Portland General Electric CFO Speaks About His Company

| About: Portland General (POR)
This article is now exclusive for PRO subscribers.

On June 2, The Wall Street Transcript interviewed Jim Piro, Chief Financial Officer, Treasurer and  Executive Vice President of Finance of Portland General Electric (NYSE:POR). Key excerpts follow:

TWST: We would like to begin with a brief historical sketch of the company and a picture of the things you are doing at the present time.

Mr. Piro: Portland General Electric is a well-capitalized, stable company that has pretty nice ongoing growth opportunities. We are a vertically integrated, regulated utility. We have a strong balance sheet with strong credit ratings. We have a diversified power supply portfolio. We have experienced staff and management. We have a fair and reasonable regulatory environment. We also have strong growth opportunities. Our customer growth has been about 1.6% over the last few years and, looking forward, it looks like about 1.9% over the long-term.

We also have the opportunities to invest in prudent regulated rate base. We try to provide our investors earnings and dividend growth. So that's kind of the overview of the company. Our mission is really to provide electric service in a safe, responsible and reliable manner with excellent customer service at a reasonable price to our customers. We have a growing service territory; it's about 800,000 customers. We have some well-known customers that are located in the Portland area. To name some of the companies here: Intel, Mentor Graphics, Nike is headquartered in the Portland area, Columbia Sportswear is headquartered here, and we are starting to see an emerging cluster in the solar space. About three solar companies have announced plans to construct solar WAP plants here in the Portland metropolitan area.

TWST: I would think that Portland is one of those green conscious parts of the country.

Mr. Piro: It absolutely is. Our customers really respond to renewable power. In Oregon, we have what's called a renewable energy standard and it calls for the company to have 25% of its load met by renewable power by 2025. We are taking steps to move down the path to accomplish that goal.

Last year, we completed our first wind farm, Biglow Canyon Phase I, got it online at year-end on budget. We've just announced the contracts for Phases II and III, which would give us about 450 megawatts of wind generation that we would own and operate. In addition to that we have one 75-megawatt contract for wind. We've got a lot of support in Oregon to add renewables and we are right now in the marketplace for an additional RFP for 218 average megawatts of renewables, which we expect to get responses back in June. So there is a lot of support for renewables. In addition to that, our residential customers are number one in sales for the third year in a row on renewable products.

TWST: Are there any other challenges that might present themselves to the company over the next few years?

Mr. Piro
: Just the need to add new generation beyond just renewable energies because of the growth in our service territory and, because we do not currently have enough generation to meet our customers' needs, we are going to need to add base-load generation. Like many utilities around the country, we are being asked, "What type of generation are you going to add?" Coal has its own set of issues given the climate issues that we are facing. Nuclear is really not ready for prime time here in the West yet. So it really leaves us the option of gas-fired generation. As we move toward the need to add gas generation, we are going to have to look at the supply side. That is a big challenge, especially given what's happened with natural gas prices over the last a year or so.

: Is there anything else on your strategic agenda?

Mr. Piro: There are a couple of things. We've just announced that we're moving forward with the installation of smart meters in our service territory, adding 800,000 meters that will allow us to read meters remotely, do a lot of our operational services remotely and provide customers things like preferred billing dates and other options. Down the road, the smart meters will allow us to help our customers better manage their energy needs and allow them to maybe look at some time-of-day pricing as well as manage their demand on the system. So that's one thing we've just announced and we are pretty excited about that. We are going to go through a six-month testing process and then go to full deployment if all goes well starting next year.

We are also looking at transmission opportunities down the road. It's a little farther out, but there is a need for electric transmission in the Northwest because of the growing loads and the congestion that exists. That might be an investment opportunity for the company down the road. Then finally, just continue to work to improve our customer service. We have a corporate-wide initiative called our Customer Focus Initiative, which really is to get us more efficient in our operations as well as to make our interactions with the customers much better.