Investments in semiconductor manufacturing capacity and other industrial projects have led the leaders of Portland General Electric Co. to increase their forecasts for load and earnings growth as well as capital spending. The company also has agreed to invest more than $400 million to help build a 311 MW wind energy facility in Montana.
President and CEO Maria Pope and CFO Jim Ajello this week said PGE earned $58 million on revenues of $743 million during the three months ended Sept. 30. Those numbers were both up 16% from the same period of 2021 and, on a per-share basis, profits topped analysts’ expectations.
Growing economic activity in PGE’s service territory covering about 2 million people in Oregon helped drive that growth. Through the first nine months of the year, total industrial energy deliveries have risen nearly 10% to about 4.4 million MWhs, driven by high-tech and digital services companies. And Pope told analysts on a conference call more growth lies ahead, particularly from the semiconductor sector that has been boosted by the recent passage of the CHIPS and Science Act. That have given her and Ajello confidence to raise their load growth expectation for the next five years to 2% annually from 1.5%.
“We are very fortunate to have the talent base that has created a number of really strong semiconductor manufacturers of the software companies that support their tools, as well as many fabulous companies,” Pope said. “This is a period of a lot of growth in that area and we're fortunate to have a fair amount of it.”
The long-term growth target hike is PGE’s second this year: In February, they bumped that number up from 1% per year. It also translates into more ambitious capex plans, boosted most prominently by the agreement with NextEra Energy to develop part of a wind energy project in Eastern Montana that will generate about 311 MW. PGE expects to invest $415 million and own two-thirds of the facility, which is forecast to come online by the end of next year. The Clearwater investment bumps PGE’s projected 2023 capex to $1.15 billion.
Previously, the utility had forecast spending $650 million on capital projects in each of the next four years. But an increase in projected transmission and distribution now has Pope and Ajello forecasting a capex spend of $725 million in 2024, $750 million in 2025 and $775 million in 2026. (Those figures don’t include projects PGE might agree to under requests for proposals such as the one that produced Clearwater.) Their first target for 2027 spending is $800 million.
To help fund those projects, PGE this week also said that it will sell 10.1 million shares at $43 apiece while also having the option to add another 1.5 million to that amount. If that option is fully exercised, the offering would produce gross proceeds of nearly $500 million.
Shares of PGE (Ticker: POR) rose more than 2% to $44.68 Oct. 25 and were flat the following day. They have lost nearly 15% over the past six months, trimming the company’s market capitalization to about $4 billion.
