On Friday, Portland Gen Electric (NYSE:POR) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.
Access the full call at https://edge.media-server.com/mmc/p/f22aee7q/
Summary
Portland Gen Electric reported Q1 GAAP net income of $45 million or $0.38 per diluted share, with non-GAAP net income of $68 million or $0.58 per share.
The company experienced a 10% year-over-year growth in industrial customer demand, despite mild winter weather affecting residential and small commercial usage.
Portland Gen Electric reiterated its full-year earnings guidance of $3.33 to $3.53 per diluted share and long-term earnings and dividend growth guidance of 5% to 7%.
The company is progressing on strategic priorities, including regulatory filings for the Washington acquisition and clean energy resource procurement, targeting a mid-2027 close for the Washington transaction.
Management discussed advancements in cost management initiatives to mitigate weather impacts and affirmed commitment to maintaining operational excellence.
Portland Gen Electric anticipates a regulatory approval process for the Washington acquisition to take about a year, with discussions on potential customer benefits ongoing.
The company is focusing on capital investments to support customer growth, clean energy, and long-term reliability, with plans to manage volatility in energy usage and power costs through engagement with regulators.
Full Transcript
OPERATOR
Good morning everyone and welcome to today's conference call with Portland General Electric. Today is Friday, May 1, 2026. This call has been recorded and all lines have been placed on mute to prevent background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this period, press star then the number is 11 on your telephone keypad. To withdraw your question, please press star 11. Again. If you do intend to ask the question, please avoid the use of speakerphones for opening remarks. I will turn the conference over to Portland Gen Electric Senior Manager of Investor Relations, Ern Swartz. You may begin.
Ern Swartz (Senior Manager of Investor Relations)
Thank you, Tawanda, good morning everyone and thank you for joining us today. Before we begin, I would like to remind you that we issued a press release this morning and have prepared a presentation to supplement our discussion, which we will be referencing throughout the call. The press release and slides are available on our website at investors.portlandgeneral.com referring to slide 2 some of our remarks this morning will constitute forward looking statements. We caution you that such statements involve inherent risks and uncertainties and actual results may differ materially from our expectations. For a description of some of the factors that could cause actual results to differ materially, please refer to our press release and our most recent periodic reports on Forms 10-K and 10-Q, which are available on our website. Turning to Slide 3 leading our discussion today are Maria Pope, President and CEO, and Joe Terpik, Senior Vice President of Finance and CFO. Following their prepared remarks, we will open the line for your questions. Now I will turn things over to Maria.
Maria Pope (President and CEO)
Good morning. Thank you, Erin. Thank you all for joining us today. The first quarter delivered another stretch of warm winter weather, 10% year over year, industrial customer demand growth and continued maturity of our cost management initiatives. Beginning with slide 4, I will speak to our financial results and key drivers. For the first quarter we reported GAAP net income of 45 million or 38 cents per diluted share and non GAAP net income of 68 million or 58 cents per share. Our non GAAP results exclude the previously disclosed deferral adjustments related to the January 2024 storm restoration and reliability contingency event and business transformation, optimization and acquisition expenses. Our results reflect extremely mild weather, particularly in February and March, and lower seasonal usage from residential and small commercial customers, which Joe will cover in more detail. We will be engaging with our regulator to explore frameworks to help mitigate weather and other volatility impacting both revenue and power costs. Greater predictability is good for both customers and shareholders and we recognize that this will be multi year work. Despite weather and usage impacts, our team delivered a quarter of strong operational execution including overcoming inflationary pressure and advancing our cost management program, adapting to power market conditions, positioning our portfolio and generations fleet to deliver optimal value and executing on our robust capital investment plan to support customer growth, clean energy and long term reliability. On recent calls you have heard us highlight the company wide work to optimize our cost structure. We are using our operational strength, which we've built over multiple years to mitigate the impact of recent weather challenges by accelerating our cost management work. Our teams are squarely undertaking the challenge and we are committed to delivering strong results. As such, we are reiterating our full year Earnings guidance of $3.33 to $3.53 per diluted share and our long term earnings and dividend growth guidance of 5 to 7%. Turning to Slide 5 for updates on our five key strategic priorities. First, our teams made progress on the Washington acquisition and other key regulatory filings. In late March and early April, we filed applications with the Washington Utilities and Transportation Commission and the Oregon Public Utility Commission for approval of the Washington transaction. We anticipate the regulatory approval process to take about a year and continue to target a mid-2027 close. PGE's holding company proposal continues to advance. The docket's procedural schedule has been modestly extended to prioritize timely resolution of the holding company. We have paused the transmission company. That said, formation of a transmission company remains part of our long term strategy. We appreciate the ongoing collaboration and expect to engage with parties in the near future. Having just received reply testimony late yesterday, many issues have been resolved with a few key items remaining. The process is on course with a target final order date probably in August. Second, building upon our 2025 O&M cost management work, we continued driving efficiencies and improving productivity. We are accelerating this work, even the very warm winter weather and first quarter results. Importantly, our large load tariff proposal UM 2377 is in the final stages of review with the OPUC and we expect an order in the next several weeks. A transparent, predictable tariff for new and existing data centers strengthens protections for existing customers while supporting economic development in our region. Our proposed rate structure under consideration, enabled by Oregon's recent legislation includes a a 26% increase in data center prices which will help reduce the cost born by residential and small business customers. Third, as I noted, industrial demand growth is accelerating in our service area. We foresee robust energy usage from data centers and high tech customers with large customer capacity growing by about 10% compounded annually through 2030. This growth forecast is driven by existing customers and contracts already executed with new customers customers companies that own property and have civil work underway. Compared to Q1 last year, our data center customer load growth grew by 10%. Fourth, progress towards additional clean energy resource procurement we filed our 2025 RFP final shortlist with the OPUC in February as we aim to procure approximately 2,500 megawatts. The shortlist is composed of a diverse mix of projects and technologies to support our existing portfolio and growing customer demand. We look forward to working collaboratively with stakeholders to achieve commission acknowledgment in the coming months and fifth, our year round risk based wildfire mitigation work remains on track as we prepare for the summer months. In parallel, regulators and policymakers are engaged in this critical topic. The opuc, in coordination with the Oregon Department of Energy, has hired experts on wildfire liability policy options that balance customer needs for essential services, support for wildfire victims and financial help of utilities. We expect the study's findings will help inform policymakers in advance of the 2027 legislative session. In December, we filed our 2026 through 2028 wildfire mitigation plan which represents a significant evolution moving from an annual update to a forward looking three year strategic framework. As we progress through 2026, our focus continues to be on executing on our core priorities solid operational performance, meeting growing energy demands, expanding into Washington State and advancing customer driven clean energy investments. With the first quarter behind us, opportunities are significant. We are focused on achieving solid financial results and delivering value for customers, communities and shareholders.
Joe Terpik (Senior Vice President of Finance and CFO)
With that, I'll turn it over to Joe. Thank you Maria and good morning everyone. Turning to slide 6, our Q1 results reflect strong energy demand from our industrial customers and ongoing System Investments. Total Q1 2026 loads were flat as compared to Q1 2025 and changes in demand between our customer classes were largely offsetting. Industrial demand increased 10% on a nominal and weather adjusted basis. The industrial customer class is expected to continue growing at a strong pace, highlighting the strength of our large customer pipeline and the attractiveness of our service area to data centers and high tech customers. Commercial load decreased 2.9% or 2.3% weather- adjusted and residential load decreased 6.2% or 4.6% weather-adjusted. PGE has seen seasonal shifts in residential and small commercial average uses in recent years with rooftop solar adoption and energy efficiency growth. While not considered in our 2026 plan, deviations of this magnitude are not unprecedented and we are adapting to manage through this. Historically, demand has been winter peaking, but our region has been transitioning to a dual peaking profile with customers increasing their cooling demand as air conditioning becomes more widespread in our region. After considering the recent trends in customer usage, we now anticipate weather adjusted load growth upgrade 1.5% to 2.5% this year. In the last 12 months, our organization has evolved tremendously in the ability to adapt through cost management. We have a well defined plan in place for the balance of the year to solve for the load impacts experienced this quarter which I will discuss shortly. Now I will cover our quarter over quarter earnings drivers. We experienced a 7-cent increase in retail revenues, including a 9 cent increase from additional cost recovery largely from the inclusion of our seaside battery asset in customer rates beginning in November 2025. A 9-cent increase driven by higher industrial demand offset by 11 cents due to lower residential demand A decrease from power cost of $0.15 driven by $0.09 from power cost performance in 2025 that reverses for this comparison and $0.06 from current year power cost performance driven by less favorable wholesale and environmental credit market conditions. A 16-cent decrease from other capital and financing costs in support of our ongoing rate base investments made up of $0.10 of higher depreciation and amortization, $0.05 of dilution and $0.01 of additional interest cost a $0.09 decrease from other items, primarily the timing of tax credits and O and M costs $0.10 from deferral reductions related to the January 2024 storm and reliability contingency event reflecting the outcome of the final OPUC order received In March, a 10 cent decrease from business transformation optimization expenses and acquisition costs. This brings us to our GAAP EPS of $0.38 per diluted share. After adjusting for the 2024 regulatory disallowance and our business transformation expense, we reach our Q1 2026 non GAAP EPS of $0.58 per diluted share. On to Slide 7 for our 5 year capital forecast which includes 2026 and 2027 spend for the incoming 2023 RFP projects. I will note this view does not contemplate CAPEX from the ongoing 2025 RFP or the Washington Utility business. Given our ongoing investment in critical systems and assets, serving our customers and other policy priorities, we remain engaged with stakeholders as we consider our next regulatory steps. We will keep you informed as this progresses in line with our usual practice. Onto slide 8 for liquidity and Financing Summary Total liquidity at the end of the quarter was 954 million. Our investment grade credit ratings remain unchanged. We will continue to maintain strong cash flow metrics with an estimated 2026 CFO to debt metric above 19% in the first quarter, we executed a $550 million equity forward to address our 2026 base equity needs and fund the 2023 RFP project this quarter. We also entered into two unsecured credit agreements, a $350 million term loan facility maturing in March 2028 to fund capital expenditures including those related to our 2023 RFP and general corporate needs, and a 680 million delayed draw term loan intended to finance the Washington acquisition related cost. The loan is available until specific milestones tied to the acquisition are achieved and matures 364 days after funding. Lastly, in April, the Board of Directors declared a quarterly common stock dividend of 55.125 cents per share, representing an increase of 5% on an annualized basis. We remain committed to paying a competitive dividend in line with our 60% to 70% payout target while balancing overall financing needs. Our plan focuses on maintaining strong operating cash flows while supporting continued investment in customer focused capital projects, all while advancing us towards our authorized capital structure. As Maria and I have mentioned, our teams remain focused on advancing key priorities for the balance of the year. Most notable is our deployment of incremental cost management measures to offset load impacts on 2026 earnings. To date, relative to our plan, Q1 was 25 cents below our expectations, while $0.09 is driven by timing. We will address the remainder through refining our capital and maintenance work streams, optimizing our team equipment and facilities management, and positioning our power portfolio and generation fleet to deliver optimal value. We are confident that these cost savings measures are achievable, especially when considering the 25 million we saved last year, our existing momentum built into our 2026 plan, and the opportunity to accelerate what was planned for 2027 into this year. As such, we are reaffirming our long term earnings and dividend growth guidance of 5 to 7% and our full year adjusted earnings guidance of $3.33 to $3.53 per diluted share. We remain focused on safe, reliable and efficient operations, advancing our strategic priorities and achieving our commitments to deliver value to our customers, communities and shareholders.
OPERATOR
And now Operator, we are ready for questions. Thank you ladies and gentlemen. As a reminder to ask the question, please press star 11 on your telephone then wait for your name to be announced. To withdraw your question, please press Start one one again. Please stand by while we compile the Q and A roster. Our first question comes from the line of Julian Dimou Dumoulin Smith with Jeffries. Your line is open.
Julian Dimou Dumoulin Smith (Equity Analyst)
Morning, Julian. Hey, good morning, Maria. Thanks, operator. Thanks everyone. It's nice to chat. If we can start off here a little bit more on the negotiations and conversations on the holding company side. I mean, what are the key areas of contention that prevented a settlement here? If you can kind of go back to the extent possible, obviously, I mean, asking about someone is difficult, but to the extent possible, elucidate a little bit around that. And particularly now that you've removed the transmission company from the filing, how do you think about prospects from here, given how perhaps the two became at times a little overly intertwined?
Maria Pope (President and CEO)
Sure. First of all, thanks, Julian. With regards to the holding company, we're really encouraged that parties have been meeting together to align thinking and to further the process. We just received a testimony yesterday, we've agreed upon some number of general provisions around ring fencing, including commission's oversight, access to books and records and other things. Obviously we still remain pretty far apart with regards to credit, the use of leverage and other such things and we look forward to engaging with stakeholders as well as commission staff. This is all part of the process. And as you can see, there are a lot of different concepts and history brought up in the filing that was just published yesterday.
Julian Dimou Dumoulin Smith (Equity Analyst)
Yep, absolutely. And then if I can follow up real quickly here, just around the year itself and I know you guys were just talking here, but you know, obviously there's been some gyrations here, especially with the start of the year. Can you talk about the levers, a little bit more? That's Joe question here in the context of the remainder of the year and the offsets, if you will, against the full year number here. Again, I know the load numbers was moving, started the year here with one Q and obviously cognizant ultimately of the 26 being reaffirmed here. But can you speak a little bit to the levers, going into that, if you will?
Joe Terpik (Senior Vice President of Finance and CFO)
Sure. Good morning. As well as we bet you our cost management program that we had in place has always been designed as a multi year plan. We achieved a slightly exceeded our goals last year. So it really gave us a foundation to build off of to have levers, tools, items in place to react to situations like this. Part of the plan overall was to mature the organization to give us flexibility when situations like this occur. So one of the things we're doing is really taking advantage of this. It's a multi year plan. This plan was intended to exceed beyond 2026. So we had already been working and identifying levers and benefits that were for this year, but also items for next year. So we've had the ability to just look into what is our toolkit of items and actions. In addition, we're realigning based on what we're now seeing as the pattern of performance to set the portfolio up to really optimize itself based on, on the design. So I look at this as two pronged. We have the ability of both being in our control, how we plan and adapt our energy portfolio and then how we plan and adapt to our costs. Working throughout the whole management team and organization. This process has already been in place. We've already been working this because the goal of all this has always been transformation. So we feel pretty confident that as we, we look to our toolkit, as we identified this gap, that we have the ability to execute and do things well within our control, to react because this work had already been underway and it's really just steering it a little differently or giving it a little more momentum.
Julian Dimou Dumoulin Smith (Equity Analyst)
Excellent. Awesome. Maria, just to clarify the earlier comment you made at this point, don't expect any kind of further settlement conversations on either the Holdco or Transco. Right. Just I heard your comment about, you know, you remain pretty far apart on some of these key issues.
Maria Pope (President and CEO)
Now, the process still allows for settlement conversations and we're engaging with parties and working through the issues. Okay, all right, great. Thank you for that. Sorry, I wanted to make sure that came across correctly. No, no, thank you.
Julian Dimou Dumoulin Smith (Equity Analyst)
Awesome. Thank you.
OPERATOR
Thank you. Our next question comes from the line of Shah Parisa with Wells Fargo Securities. Your line is open.
Whitney Motilemo
Hi, good morning team. This is Whitney Motilemo on for sure. So thinking broadly on recovery tools with the RCE mechanism no longer available, how are you thinking about the path to future reliability related costs in a way that remains timely and investable? Should we assume the fallback is simply broader GRC treatment or are there other tools you think Oregon could still support for event driven cost recovery?
Maria Pope (President and CEO)
So first of all, an excellent question. And over time you're absolutely right. We are engaging with regulators to work in removing the volatility and generating more predictability, both on the impact to energy usage from weather as well as other issues. Obviously RCE was around significant events and of course we have more volatility to power costs and exposure. All right, that sounds, this is clearly something that's going to take some time and it's really important.
Whitney Motilemo
Yes, thank you. And then just as a Follow up as it relates to the multi year rate planning. Obviously Portland is super supportive of Oregon's transition to that, but staff's been arguing with just the transition framework and the company finds it super restrictive. So as Oregon moves into the multi year rate plans, what do you think the main principal Portland is trying to protect?
Whitney Motilemo
Is it the ability to retain the existing statutory tools during this transition or the ability to continue using narrower just mechanisms for high priority capital without needing a full rate case? And that's it.
Maria Pope (President and CEO)
So good question. And there's no question that we need to work on, I think a common understanding of what's needed for all stakeholders, particularly investors and tools that will provide for adequate capital recovery and other interim items as we move to the multi year framework. I think as we saw from the Sura testimony testimony that was just issued yesterday, we have a lot of work to do around common understanding of how we'll attract and retain capital and continue to grow the utility to invest for customers in clean energy, reliability and customer growth.
Joe Terpik (Senior Vice President of Finance and CFO)
Whitney, just to add to Maria's comment, you're right, there's a collection of new tools that are needed both in the transition and also in the multi year plan and we've already been adapting to those. You saw those new tools, in all honesty, the Seaside Tracker as well as the DSP that have taken some time to work through. So I mean I think what you're seeing here is we're all working to evolve here from what was a very traditional process to both a multi year process and how to find your way to that multi year process. So I think the dialogue with the commission is really about what type of tools do we need and you understand they're new and that honestly why this takes a bit of time here is to make sure they work well for all parties involved.
Whitney Motilemo
Sounds good. Thank you, Maria. Thank you Joe.
OPERATOR
Thank you. Thank you. Our next question comes from the line of Chris Ellenhoff with Siebert William Schenk. Your line is open.
Chris Ellenhoff (Equity Analyst)
Hey, good morning everybody. Morning Chris. Maria, can you just talk about what you're seeing in the Oregon economy? I know it's been struggling a little bit, but can you give us some color on are you seeing some recovery? Is it still sort of where it was as an adjunct to that customer growth year over year was a little lighter than first quarter of last year. Is that part of that issue or are there some other factors at play?
Maria Pope (President and CEO)
First of all, we consider customer growth to actually continue to be quite strong, particularly in the non downtown areas, slightly under 1% and we continue to also see good business formation and new entrants particularly on the data center side but also on the high tech and semiconductor manufacturing side. We're very encouraged. Our customers are focused and they continue to invest in many parts of Oregon.
Joe Terpik (Senior Vice President of Finance and CFO)
Okay Chris, if I can just add on the load right Just for when you ask to the patterns right. We saw this the combination of what was some warm months and just some unusual flows of weather even within the
Chris Ellenhoff (Equity Analyst)
month that we obviously to ourselves peel back and ask ourselves very questions very similar to you. Are there economic conditions or other conditions and really seeing items that are really reacting to what is an unusual set of weather patterns. We've had one of the warmest winters here as well as it was a little sunnier. So you got things like a little more solar penetration than you normally would have seen in the winter months and things like that. But we didn't you know to Maria's comment the broad economic factors that the guidance that gets us through what we believe are longer term as it relates to load continues to hold and be consistent. Sure. And there clearly are some unusual customer in migration patterns that seem to fluctuate. So I just kind of curious if there's any other factors there Joe, in the reduction to the 2026 load expectations. Is that merely a Q1 adjustment or is there other factors incorporated there?
Joe Terpik (Senior Vice President of Finance and CFO)
As it relates on an overall basis we believe largely realized with this being the main the heating part of the load reduction we have reshaped the remainder of the year. But in all honesty the reshaping is a movements between the other quarters. But from a loads experience we think we've sort of worked through the unusual part of the year on a cumulative basis and then just expect some slightly different flows here as we see differing customer reactions to heat and to heat and cold weather.
Chris Ellenhoff (Equity Analyst)
But overall net should be relatively close
Maria Pope (President and CEO)
to zero rest either. So Marie, you were talking about wanting to pursue some mechanism for the volatility. The weather for you guys in the region is supposed to be on the warmer side for the spring and into the summer. That sort of effect on consumers. Do you think that will be sort of inspirational for your interveners for maybe pursuing that mechanism discussion a little more? That's a good question. Certainly last year we began to see the impacts of significant higher AC penetration and we saw quite a bit of higher load growth without as much high temperature as one would have historically needed to have seen. So definitely more correlation to high temperatures in terms of energy usage which is a positive going forward for us. And we have not factored in that in our forecast, we're relying on those things right now that are actionable with regards to the commission and how they might think of this. Affordability is a priority, and predictability for customers is super important. I have had conversations with the chair of the commission with regards to these unique patterns that we're seeing. And so those conversations with the commissioners and with staff will be ongoing.
Chris Ellenhoff (Equity Analyst)
Okay. A couple of related questions on the Holdco. One, can we infer from the Transco, you know, sort of retreat that while you didn't come up with an official settlement, that you guys have resolved some issues unofficially through that process? And secondly, the, you know, sort of references to historical events are not terribly surprising. They were very sensitive about things like ring fencing and credit, you know, back in the day. But the Holdco is a pretty different animal than some of those events. So, you know, does the commission staff sort of appreciate the pretty significant differences despite them, you know, bringing them up again?
Maria Pope (President and CEO)
So, first of all, with regards to your question on the transmission company, our goal was to prioritize at the request of staff and commissioners. We're trying to be cognizant of their workload and make sure that we are talking about those things which are in the highest priority. But the transmission company remains a topic that we will continue to discuss in the future, but not at this time. I think that the testimony shows that we have common ground on a number of items. I would agree with you in some of the written words in the Surrey bottle testimony, and it just shows that we have more work to do and collaborate and establish common understanding and kind of the why and drivers as well as utility practices across the country that are pretty standard. The next step is to engage directly
Chris Ellenhoff (Equity Analyst)
and to continue the conversation. Right. Okay. Thanks for the caller. Appreciate it.
Maria Pope (President and CEO)
No, thank you.
OPERATOR
Our next question comes from the line of Aidan Kelly with JP Morgan. Your line is open.
Aidan Kelly (Equity Analyst)
Good morning. Hey, guys. Hey, guys. Good morning. Thanks for the time today. Just with the applications in Oregon and Washington now underway, could you speak to the initial feedback from stakeholders on the pending acquisition as well as the upcoming milestones we should watch for and just any sense of kind of what the customer benefits you're highlighting for the commissions at this time?
Maria Pope (President and CEO)
Sure. So, first of all, we've engaged with a wide variety of stakeholders. We've spoken with all of the commissioners and staff in Oregon, spoken multiple times with the commissioners in Washington, as well as staff, respective governor's offices. And I think particularly important is we spent time actually in the service territory and are really encouraged by the receptivity we had, the focus on economic development and the interest in our ability to serve current and new businesses in both the Walla Walla Wallula and Yakima regions. So I'm really encouraged with the opportunities we move forward. In terms of discussions on benefits, we're just at the very early stages, but I would say in particular for Washington, it is very much of a constructive, business focused environment and we look forward
Aidan Kelly (Equity Analyst)
to engaging with all stakeholders as we move forward.
Maria Pope (President and CEO)
Great. Thanks for the insight there.
Aidan Kelly (Equity Analyst)
Yeah, the conversations could not have gone better. Okay, that's good to hear. Thanks for that. And then. Yeah, just wanted a separate question. Just wanted to pick up on the regulatory front again. I know it's kind of been talked about earlier in the call, but maybe just clearly asking, like, could you just speak to the timing of your next CRC as we kind of get closer to your stay out expiring this summer? What are the factors that would cause you to file earlier or later at this time?
Maria Pope (President and CEO)
So clearly we're spending a lot of time talking about that issue and we are focusing on sort of what's next, our timing. We know that energy bills are incredibly important to all businesses and families and we are working to keep customer bills as low as possible by delivering reliable services that customers can count on. We also have not decided exactly on the next timing of our rate case, but there's no question that it'll probably be sometime in the second half of the year. We're still evaluating the major components.
Aidan Kelly (Equity Analyst)
Great, thanks. I'll leave it there. Take care.
Maria Pope (President and CEO)
Thank you.
OPERATOR
Our next question comes from the line of Greg Oriel with ubs. Your line is open.
Greg Oriel (Equity Analyst)
Yeah. Hey, thank you. When would you be in a position to include the 25 RFP into the CapEx plan?
Maria Pope (President and CEO)
Good morning, Greg. Right now, our anticipation, just as a reminder. Right. We include the RFPs in the plan once we have them under contract. We think the earliest we'll start to see contracts is the beginning of 2027 if things work to the normal course as we work through these projects. So we're hoping that it'd be nice to have it aligned relatively to our fourth quarter update. But as you know, we are, since we are working with a collection of individuals and you have a series of negotiations going on that can vary.
Greg Oriel (Equity Analyst)
Thank you.
OPERATOR
Thank you. Please stand by for our next question. Our next question comes from the line of Paul Fremont with Ladenburg, Sallman and Company. The line is open.
Paul Fremont (Equity Analyst)
Morning, Paul. Good morning. Thank you very much. I guess my first question is should we Think about the prospects for settlement being the best between now and when hearings are scheduled in early June.
Maria Pope (President and CEO)
Well, I hope so. The sooner we can settle, the better. But I want to make sure that we give all parties an adequate time to establish good understanding and being able
Paul Fremont (Equity Analyst)
really to move forward constructively. Right. But in most states, you know, typically if it's going to settle, it's going to. It usually settles before hearings. Is that sort of the case in Oregon, or would you expect the prospects for being just as good after hearings? I don't know if I would hedge either side. I think we're going to continue the process just as we have in the past and hopefully we can come to settlements and if not, we'll go to the hearings and then work towards settlements afterwards. We've got plenty of Runway to engage ahead of the hearings and we're always hopeful of settling sooner rather than later. Okay, and in the past, I guess you've expressed a very high level of confidence in your ability to settle this particular case. Is that unchanged, given your comments earlier that the parties still remain pretty far apart?
Maria Pope (President and CEO)
No, we still have good expectations of being able to settle. And I would reiterate as well that we have put a number of issues behind us as we work through the process.
Paul Fremont (Equity Analyst)
And then have you received the counter proposal that was referenced in your regulatory filing from the intervener parties and judging, I guess by your comments earlier, you know, it sounds like even in the counter, even if you did receive one, that there are still sort of major issues to be resolved.
Maria Pope (President and CEO)
No, we haven't. The parties are working on that and we are continuing the discussions.
Paul Fremont (Equity Analyst)
Great. And then I guess it looks as if to us as if the Washington utility subsidiary of Berkshire may not be earning at levels that are close to their authorized return levels. Is there something that you plan on doing to potentially narrow the gap between what they're earning and what they're authorized to earn?
Maria Pope (President and CEO)
So our focus as we move into Washington and look at the opportunities in the state is first, it's a strong operational fit with operations that we know well. We have noted that we expected to be accretive in the first year and to enhance our long term and the overall businesses EPS growth and dividend growth. And much of that is driven by the opportunity for new investment, for clean energy investments in particular that are supporting the CETA compliance obligations that they have. And the commissioners have continued to reiterate that for us. But we would be expecting to drive through a similar return profile in Washington as we have in Oregon or better.
Joe Terpik (Senior Vice President of Finance and CFO)
Yeah, I mean, Paul, the historical gap that we've seen has been mainly related to power costs. And one of the attributes that when we do this transaction is a very much more specific and transparent direction of costs for the Washington customers. And we believe having this clarity of the Washington utility, as well as having a much more specific, instead of allocated set of assets and cost there, will drive to a more, you know, a more effective recovery over time.
Paul Fremont (Equity Analyst)
Okay, so it's not through merger synergies that you would expect to sort of improve.
Joe Terpik (Senior Vice President of Finance and CFO)
No, Paul. To date,, when we talk to, and we speak to the accretive nature of this transaction here on the front end and as it relates to getting a better recovery, this is about the execution of the plan, the execution of the cost and the operation of utility. We have not layered in any type of cost synergy or other work here. We really just layered in an effective operation and getting the financing and other benefits of the company synergies, as I know we've talked to you in that we will work to, but we're not counting on those to make this accretive on the front.
Maria Pope (President and CEO)
And there absolutely will be synergies on the O and M side and on the power cost side. Great.
Paul Fremont (Equity Analyst)
Thank you very much.
OPERATOR
Thank you. Our next question comes from the line of Travis Miller with Morningstar. Your line is open.
Travis Miller (Equity Analyst)
Good morning. Thank you. Got two quick ones and then follow up, it's a higher level one. Two quick ones. The 26% increase in the data center prices you talked about through the tariff, are those for all existing and prospective customers, or would those be just for
Maria Pope (President and CEO)
prospective data centers for existing and new customers?
Travis Miller (Equity Analyst)
All data center customers. And we worked very collaboratively with each of those customers, and there's no surprises.
Joe Terpik (Senior Vice President of Finance and CFO)
Okay, that was my one quick one. The other quick one, the generation mix Q1 last year to Q1 this year, some changes there. In terms of your own generation versus purchased, was there anything. Was this weather driven? Is there something fundamental going on? Anything to read through some of those mixes, particularly in the owned versus purchased? Yeah. No, there's no real, there's no strategic changes going on there. I mean, what you'll, you will see is it's really a combination of events. The, the weather, the energy pricing related to running assets, as well as certain contracts that will roll on and off. I think you'll see a contract there rolled on under the not owned or the contracted section. But no, overall, our strategy on how we manage the portfolio and the mix of owned versus contracted stays on. These are just ebbs and flows in the normal course of a. Of a year.
Travis Miller (Equity Analyst)
Okay, makes sense. And my higher level question, I think there's a report that called the E3 report that came out in the last couple days, talked about a 9 gigawatt shortfall by 2030 and a 14 to 18 gigawatt shortfall by 2035. And particularly along the western edge of the region where you serve and up and down there, wonder if you could talk to whether you were involved in the report, if these are numbers that are consistent with what you're seeing, with what you've reported to regulators, et cetera.
Maria Pope (President and CEO)
Sure. So the report was commissioned on behalf of industry groups that we participate in know well across the Pacific Northwest. And as you know and can see through our 2025 RFP as well as our IRP, we are working to procure more energy than we certainly have in the past. And there would be others in the region that are doing the same. The report was really focused also on resource adequacy and how we better manage resource adequacy as a region. It includes additional focus on transmission and clearly our entering the energy imbalance the Day Ahead market. And building upon our energy imbalance, we'll improve that for Portland General as well as Pacificor who actually just went live with the Day ahead market today. So we appreciate the information that was put together. It's created a lot of regional discussions that are very constructive. Okay, great. I appreciate all the thoughts. That's all I have.
Travis Miller (Equity Analyst)
Thank you.
OPERATOR
Thank you. Our next question comes from Milana Rujia with Mizuhu. Your line is open.
Rujia
Hi, good morning. This is Rutia from Mizuho for Anthony Cordell. Thank you for taking my question. You've talked about the Washington acquisition as this opportunity to bring a growth oriented philosophy to a service territory that has historically say more maintenance focused. Can you walk us through what that looks like in the first, say 12 to 18 months after you take over? Perhaps you've already touched on this in previous questions, but just specifically, what are the areas that you bring this growth initiative to and what would you point to as early signs that the shift is taking hold? Thank you.
Joe Terpik (Senior Vice President of Finance and CFO)
Good morning. Rujia. I'll start here and maybe hand it over to Maria. When you talk in the shorter term here, this is really about supporting and giving them the right investment. Mainly on the D side, a little bit of T as it relates to putting, you know, continuing to build that infrastructure at the rate that it needs to support growth. The longer term growth will really come from, as we've mentioned, there are RFPs that we will be involved in and really helping support economic growth and development in a region that we believe is primed for economic growth and development. So that's why if you look to the charts that we show here on as it relates to the inclusion of the Washington utility, you'll see that the, the growth is a little more, is a little more back end focused as we give a little time here to support some industrial growth and then support some of the RFP needs that will go in the area. Perfect. Thank you.
Maria Pope (President and CEO)
We're really encouraged with, yeah, we're really encouraged with the regional leaders interest in accelerating the growth in Eastern Washington and have had terrific conversations with our existing customers as well as with new potential customers. Okay.
Rujia
Thank you for the answer.
Maria Pope (President and CEO)
I appreciate it.
OPERATOR
Thank you.
Maria Pope (President and CEO)
Thank you.
OPERATOR
Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Maria for closing remarks. Thank you very much for joining us today. We appreciate your interest in Portland General and we look forward to seeing you at upcoming conferences. Have a great day.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
Login to comment