波特蘭通用電力 (POR) 2026年第三季法說會：因氣候溫和下修財測指引

核心要點

• 波特蘭通用電氣 (Portland General Electric) 公佈 2026 年第三季 GAAP 淨利為 1.19 億美元，即每股稀釋盈餘 1.00 美元。調整後淨利為 1.25 億美元，即每股稀釋盈餘 1.06 美元。
• 管理層將全年調整後 EPS 指引從 3.33 美元至 3.53 美元下調至 3.18 美元至 3.28 美元，主因氣候歷史性偏暖，導致住宅及小型商業用電需求減少。
• 在高科技與資料中心客戶的支撐下，工業用電需求年增 9%、季增 5%。大負載客戶至 2030 年的預期年容量成長率自 10% 上調至 12%。
• 大負載費率制度在第三季帶來約 400 萬美元的邊際利潤增量。PGE 還與 Veras 簽署了一項最高 420 兆瓦設施的協議，預計將於 2028 年首次通電。
• PGE 簽署了 Bigelow 與 Salmonfly 太陽能加儲能專案的建設移轉協議，預期投資額分別為 9 億美元與 8.5 億美元。
• 公司重申長期 EPS 與股利成長率指引為 5% 至 7%，並重申至 2030 年的長期負載成長率指引為 3%。

核心財務業績

業務與營運表現

PGE 表示，第三季需求受到十年來最涼爽的夏天以及自 2016 年以來最溫和夏天的影響。降溫需求減少對住宅與小型商業用電量的衝擊最大。管理層估計氣候因素對當季 EPS 的影響為每股 0.15 美元，其中包含營收減少以及部分被購電成本降低所抵銷的影響。

工業用電需求仍為主要成長動能。來自科技、半導體與資料中心客戶的需求支撐了 9% 的年成長率。PGE 自 7 月生效的大負載費率制度包含了最低支付義務以及直接基礎設施成本分配，旨在降低服務新增大負載相關的風險。

與 Veras 的協議涵蓋一座最高 420 兆瓦的設施。PGE 預期將於 2028 年開始通電，並於 2033 年全面拉升產能。該專案包含整合式電池儲能，而 Veras 正持續推進許可審查程序。

PGE 也啟動了對擴展日前市場 (Extended Day-Ahead Market) 的參與。公司 2027 年的年度更新費率包含自該市場預期為客戶節省的 1400 萬美元。

在清潔能源投資方面，PGE 簽署了 Bigelow 的建設移轉協議，其中包括 200 兆瓦的太陽能與 250 兆瓦的電池儲能，預計投資額為 9 億美元。Salmonfly 將包含 199 兆瓦的太陽能與 199 兆瓦的儲能，預計投資額為 8.5 億美元。

包含這兩個最近簽署的專案在內，管理層預期 2027 年資本支出為 25 億美元。這些專案先前未納入說明的五年資本預測中，是因為其協議在相關報告日期之後才生效。

PGE 持續推進其華盛頓州公用事業收購案，並預計於 2027 年年中左右完成交割。管理層表示，該交易並不依賴擬議中的控股公司架構。

管理層指引

PGE 將 2026 年調整後 EPS 指引從 3.33 美元至 3.53 美元下調至 3.18 美元至 3.28 美元。管理層將此修正歸因於下半年的氣候逆風，並表示若無這些影響，業績本將落在原始區間內。

公司還將 2026 年經氣候調整後的負載成長展望從 1.5% 至 2.5% 下調至 1% 至 2%，主因是工業負載拉升時程有所變動。管理層表示，合約最低保證應能限制修正後負載預測對營收的影響。

至 2030 年大負載客戶的預期年容量成長率自 10% 上調至 12%。PGE 維持至 2030 年長期 EPS 與股利成長率 5% 至 7% 以及負載成長率 3% 的指引。

在 2027 年融資方面，管理層預期將進行 3.5 億美元至 4 億美元的稅額扣抵貨幣化，以及 1.5 億美元至 2 億美元的新股發行。董事會宣派每股 0.55125 美元的季度股利，年化增幅為 5%。

風險與關注領域

溫和的氣候仍是最直接的盈餘壓力來源，因為它減少了住宅與小型商業用電需求。在第三季期間，經氣候調整後的住宅與商業電力交付量亦略有下降。

管理層指出通膨與供應鏈壓力是專案開發的風險，但也表示 Bigelow 與 Salmonfly 的預估每千瓦成本與先前採購專案及近期觀察到的專案統計數據大致吻合。

擬議中的控股公司架構仍存在不確定性。PGE 正尋求修改涵蓋股利限制與單一評級級距信用評級門檻的條件。管理層表示這兩項條款就目前形式而言皆不可接受，並預期委員會將於 12 月 7 日前做出決定。公司強調，其成長策略、資本計劃與目前指引均不依賴於成立控股公司。

野火風險亦仍是關注焦點。PGE 在本季期間實施了公共安全斷電措施，並持續進行系統加固、監控與技術投資。管理層正在等待奧勒岡州公用事業委員會委託製作的報告，該報告可能為未來的立法工作提供參考。

PGE 也正在密切關注電池儲能價格的上漲。管理層指出，先前已簽約或正在建設中的專案受益於早期的價格。

分析師問答亮點

控股公司條件：管理層表示，PGE 不會接受任何單純因信用評級下調一級即可能引發股利限制的架構。只要控股公司能夠自行融資並在正常情況下發放股利，公司對其他替代計算方式保持開放態度。

新專案融資：PGE 計劃使用 2023 年採購專案中 3.5 億美元至 4 億美元的稅額扣抵貨幣化、債務、遠期股權發行剩餘收益以及有限的新股。管理層表示，即使將 Bigelow 與 Salmonfly 納入後，2027 年的股權需求仍比先前披露的增加了約 5000 萬美元。

華盛頓州收購案：在沒有控股公司的情況下，管理層的目標是使被收購的公用事業公司在第一個完整年份至少達到損益兩平或略有盈餘挹注。監管討論集中在清潔能源合規性、排除在交易之外的 Lewis River 水力發電設施以及客戶費率折抵。

資料中心需求：管理層坦承資料中心客戶之間的用電量可能不均勻，但表示大負載費率制度下的照單全收條款與容量費給付支撐了盈餘的穩定性。此外，資料中心對氣候的敏感度明顯低於住宅與小型商業客戶。

電池容量：PGE 預計在完成目前的採購專案與購電協議後，電池容量將超過 1,000 兆瓦，而系統尖峰負載約為 4,500 兆瓦。

Colstrip 股權：PGE 目前沒有處分其 Colstrip 權益的計劃。管理層表示將與監管機構合作尋求替代方案，因為奧勒岡州現行法律限制將煤炭發電用於零售負載。

完整法說會逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Thank you. Good morning, everyone, and welcome to today's conference call with Portland General Electric. Today is Thursday, October 29, 2026. This call is being recorded and all lines have been placed on mute to prevent background noise. [Operator Instructions]

For opening remarks, I will turn the conference call over to Portland General Electric's Senior Manager of Investor Relations, Erin Schwartz. Please go ahead.

Erin Schwartz

Thank you, Stephen. 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.com.general.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 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 Joseph Trpik, Senior Vice President of Finance and CFO. After their prepared remarks, we will open the line for your questions. Now, I will turn things over to Maria.

Maria Pope

Thank you, Erin, and good morning, everyone. We appreciate your joining us today. The third quarter was impacted by the coolest summer in a decade. Against that backdrop, we continue to execute with discipline, actively managing power costs, driving efficiencies in O&M, and identifying additional opportunities to operate more effectively across our business. Importantly, our fundamentals remain strong, with industrial demand growing 9% year-over-year, driven by continued demand from high-tech and data center customers. In fact, we concluded a significant agreement with Veras for a facility of up to 420 megawatts, which is expected to be energized in 2028 and ramped to full capacity by 2033. Now, regarding the proposed holding company.

The Commission issued its holding company order on September 25th. While the order approved certain aspects of the proposal, several conditions were not workable. We filed for clarification and changes to two areas. We support the proposed rate credit and customer benefits totaling $83 million. If implemented, the holding company would provide additional financial flexibility while maintaining strong customer protections and utility financial strength. That said, while very important, our growth strategy, capital plan, and current guidance do not depend on the holding company implementation. Thank you. Next, I'll speak to our financial results and key drivers.

This morning, we reported a third quarter GAAP net income of $119 million for $1.00 per diluted share, a non-GAAP net income of $125 million for $1.06 per diluted share. Non-GAAP results excluded business transformation, optimization, and acquisition-related expenses, which are not reflective of ongoing operational performance. The third quarter, like the year, was marked by historically mild weather. Lower cooling demand in the quarter and significantly reduced residential and small commercial energy usage. Turning to slide 4 for our strategic priorities. Customer growth. We continue to see strong demand from technology companies, semiconductor and data center customers. Our new large load tariff effective in July increased rates for data centers and other large customers while lowering rates for residential and small commercial customers, putting us ahead of many utilities across the country.

The tariff contributed approximately $4 million of incremental margin in the third quarter and includes provisions designed to reduce risk and costs associated with serving new large loads. Essentially, at PGE, growth pays for growth. We now expect approximately 12% annual capacity growth from our large load customers through 2030, up from our prior outlook of 10%. This growth is supported by customers under contract who run already energized facilities or who are actively advancing construction and facility development. As I mentioned earlier in my remarks, we have an agreement with Veras for a facility of up to 420 megawatts. It is backed by customer and shareholder protections, our new large load tariff, including minimum payment obligations, direct cost allocation for infrastructure that will strengthen reliability across the region. The facility also includes integrated battery storage, giving us added flexibility to manage peak demand while maintaining reliability, integrating clean energy, and helping keep residential and commercial prices as low as possible.

Veras is working through the permitting processes and applications were submitted ahead of any moratoriums. Energization is expected to begin in 2028. Turning to the Washington acquisition. We continue to move forward and advance the regulatory review process. We anticipate a 2027 close or a mid-2027 close. Third quarter marked an important milestone with the successful launch of our participation in the Extended Day Ahead Market or EDAM. A market PGE helped design and develop. EDAM further advances Western energy markets, lowers costs, reduces volatility, and improves reliability. We expect EDAM to create meaningful customer value, contributing to reliability and affordability.

Reflected in our 2027 AUT is $14 million of customer savings. I'm proud of the outstanding work our teams delivered to achieve this milestone, another step forward in delivering efficient and affordable energy for our customers. Clean energy. We have executed two contracts for new emitting projects. First, we signed a build transfer agreement for a combined 200 megawatt solar and 250 megawatt battery storage facility at Bigelow with an anticipated investment of $900 million. Second, we've also signed a build transfer agreement for the Salmonfly project, a combined 199 megawatt solar and 199 megawatt battery storage facility with an anticipated investment of $850 million. Salmonfly is being developed with the Confederated Tribes of the Warm Springs.

The project supports coordinated operations of solar and storage along with our existing and jointly owned hydroelectric facilities. Additionally, we continue to make progress on commercial negotiations for other projects from the 2025 RFP. And finally, this month, we filed our 2026 Clean Energy Plan, an Integrated Resource Plan with the Commission. Turning to risk management and wildfires. Against a challenging regional wildfire season, our teams executed our risk management plans, maintained enhanced readiness and responded proactively. We declare the end of fire season in our service territory on October 26th. We continue to execute our year-round wildfire mitigation program, including system hardening, enhanced situational awareness, and technology investments designed to improve reliability and reduce risk.

Wildfire risk is a societal wide issue, and we remain committed to working collaboratively with stakeholders on solutions that strengthen public safety, community resilience, and an investable energy future for the Pacific Northwest. To summarize, we're seeing continued strength in customer growth, success executing initiatives such as EDAM and advancing clean energy resource opportunities. This work positions us to serve our customers, support Oregon's growth, and deliver long-term value for shareholders. With that, I'll turn to slide 5 and our 2026 earnings guidance. As a result of weather-related headwinds, we are revising our full-year adjusted earnings guidance from $3.33 to $3.53 to $3.18 to $3.28 per diluted share. We would have been solidly within our original guidance range if not for weather-related headwinds in the second half of the year. We continue to reaffirm our long-term earnings and dividend growth guidance of 5% to 7%.

I'll now turn the call over to Joe to walk through our financial results in more detail. Thank you.

Joseph Trpik

Thank you, Maria. Good morning, everyone. Turn to slide 6. Our third quarter results reflect continued execution on cost management, regulatory recovery, and industrial growth despite the mildest summer since 2016. Beginning with our load trends year-over-year. Total retail energy deliveries decreased 3% compared to the third quarter of 2025 on a nominal basis and increased 1% on a weather-adjusted basis. We continue to see strong demand from our technology, semiconductor and data center customers, with 12% annual large customer capacity growth expected through 2030. Industrial demand remained a key driver in the third quarter, increasing 5% quarter-over-quarter and 9% year-over-year. This reflects continued demand from our high-tech and data center customers. In the third quarter, we experienced one of the mildest summers in recent history.

Residential deliveries decreased 8.9% on a nominal basis and were down 0.6% weather-adjusted, while commercial deliveries decreased 5.5% nominally and were down 2.8% weather-adjusted. We are updating our 2026 weather-adjusted load growth guidance from 1.5% to 2.5% to 1% to 2%, primarily reflecting changes in the timing of industrial load ramp-ups. Given contractual minimums, we do not expect the revised load forecast to result in meaningful changes to our 2026 weather-adjusted load growth guidance in the fall of 2026 revenue. Turning to our third quarter financial results. As a reminder, we provided adjusted EPS guidance of $1.20 to $1.32 per share with a midpoint of $1.26. Actual third quarter adjusted EPS was $1.06. The majority of this variance is a result of the historically mild weather.

Now I'll cover the primary year-over-year earnings drivers for the quarter. A $0.07 decrease from industrial demand driven by continued growth from high-tech and data center customers. A $0.21 decrease from residential and commercial load, largely driven by the mild weather. A $0.04 benefit from power cost. This variance is comprised of a 14 cent detriment from favorable power costs in 2025 that reversed for this comparison and an 18 cent benefit in the current period primarily driven by the expected entry year timing of revenue collection and power cost recognition. Quarter over quarter, there is a 15 cent weather-related EPS impact that contemplates both the decrease to revenue impact and the offsetting decrease to power cost. This is embedded within the residential and commercial load and net variable power cost variances.

There was a 14 cent increase from additional cost recovery reflecting the seaside battery asset, including customer rates beginning in November 2025, and the distribution system planning recovery that began in April of 2026. A nine cent decrease from other capital and financing costs in support of our ongoing rate-based investments made up of one cent of higher depreciation and amortization, seven cents for dilution, and one cent of additional interest expense. And then there was a $0.11 benefit from O&M reflecting continued strong cost management and productivity improvements across the organization. On to slide 7 for our 5-year capital forecast, which includes 2026 and 2027 spend from our 2023 RFP projects. I will note that this view does not contemplate CapEx from the recently signed Bigelow Optimization Phase 2 and Salmonfly projects or any other ongoing resource procurement negotiations and the Washington acquisition, which are progressing as expected. Focusing on 2027 spend, when including both the recently signed projects, we have a total forecasted capital expenditures of $2.5 billion. On to slide 8 for financing. We remain well positioned. We have completed the majority of our 2026 financing activity, providing clear visibility to our funding need for this year.

This includes $550 million of equity issued under the forward sale with $152 million drawn as of September 30th. We are moving $398 million of the planned equity draw to while the decision on the holding company structure is pending. We have a $500 million ATM facility to further support equity needs. We also have a $350 million 24-month term loan satisfying our 2026 financing needs. And finally, our investment grade credit ratings remain unchanged. Looking ahead to our 2027 financing plans, we anticipate $350 million to $400 million of tax credit monetization and $150 million to $200 million of equity issuance. In October, the Board of Directors declared a quarterly common stock dividend of $0.55125 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 we look back at our progress over the past three quarters and turn to 4Q, we're proud of our disciplined execution. We are advancing management actions across operating and power costs. We remain focused on safe, reliable, and efficient operations, advancing our strategic priorities, and delivering value for our customers, communities, and shareholders. We successfully addressed the year-to-date significant weather and other load impacts in the first half of the year through management of power costs and driving efficiencies across the organization. However, given the impact of historically mild weather in the second half of the year, we are revising our adjusted earnings guidance to $3.18 to $3.28 per diluted share.

We are reaffirming our long-term EPS and dividend growth guidance of 5% to 7% and our long-term load growth guidance of 3% through 2030. And now, operator, we are ready for questions. Thank you.

Operator

[Operator Instructions] Our first question comes from the line of Julien Dumoulin-Smith of Jefferies.

分析師問答

Julien Dumoulin-Smith

Hey, good morning team. Nice to chat. Thanks for the time. Good morning. Hey, so just real quickly, I saw in the 10Q this added risk disclosure. I just wanted to dig in a little bit about it, right, specifically citing some of these delay risks potentially. Can you clarify a little bit what's going on with the '25 RFP, if that impacts both company-owned generation assets or PPAs? Or just a little bit more context. Obviously, we've seen various delayed processes in the past, so it's not entirely novel to see this as a new novel risk disclosure. But again, we'd love to understand a little bit about what specifically is transpiring today.

Joseph Trpik

I'll kick us off on this, Julien. Good morning. Really, what you're seeing there is we're just talking that there are multiple paths to procuring assets, including BTA, not just the RFP. And you see in this case that we're just exploring some alternative paths based on what are the most attractive assets. investments. That's the only difference here, understanding our last match was a straight and dark beat.

Maria Pope

And Julian, let me add, first of all, I'm impressed that you're looking at our risk disclosures in the 10Q. One of the things that I think gives us a lot of confidence in our pipeline is the Bigelow 2 project that we announced today, as well as Salmonfly. And the overall cost per kilowatt is pretty close to what we saw out of the 2023 and even as well as what we see from statistics across the country over the last 12 months. So while we are nervous about inflation and supply chain, the execution of our team has been very strong.

Julien Dumoulin-Smith

Yep, excellent. Thank you. And if I can just follow up a little bit on some of the holdco dynamics. Again, this gets a little bit in the weeds as well. Look, I know that OPUC staff has filed here in support of some of the clarifications on the retained earnings cap. Can you talk a little bit about some of those alternative cap calculations, and do you see that as an acceptable provision? Again, I go back to some of the caveats you guys put in the Q here about moving forward and what this might look like for reconsideration. I'll leave it open-ended.

Joseph Trpik

I'll start us here. I mean, we continue to appreciate the dialogue from the staff here and our focus is making sure that the holdco is able to function in a normal basis, meaning pay dividends and be able to finance itself. You know, we appreciate that we don't have opposition from parties like AWAC. And I'll just leave it as we work through the math of some of these. We are open to any proposals here that, again, just allow it to operate effectively. The reason we are where we are right now is it would not have been prudent to work forward with the design as was because it did not allow us to effectively operate. effectively have a holdco and protect our shareholders and dividends.

Julien Dumoulin-Smith

Got it. Excellent. And just lastly here on the credit rating side, and obviously this ends up being fairly binary in terms of what exactly happens in terms of notch thresholds, but given the financing benefit, is the one notch threshold like a red line that if the Commission doesn't amend it, you guys wouldn't proceed with the holdco? Again, I just curious on the relationship between the the rating side and your decision to move forward again if if I can tell those to.

Joseph Trpik

As it relates to the proposal, the order out there on the holdco, it has it's both the one, the one notch provision within the holdco agreement and the dividend restrictions are both red lines. I mean, that is, that is why we responded to where we are as it relates, specifically to the rating agencies, we continue to be in dialogue with them. We keep them apprised, and we are working through, you know, different scenarios with them, you know, as it relates to us adapting to whatever the next proposal holds or orders.

Julien Dumoulin-Smith

Got it. All right. Awesome. And anything on wildfires here that you'd offer up in as much as we saw a lot happen in California? I don't know if there's anything that you'd flag for your upcoming session or maybe not. Again, maybe a campaign. I THINK IT'S AGAINST THE BACKDROP OF A TOUGH SEASON OVER THE LAST COUPLE OF YEARS.

Maria Pope

Overall in the state of Oregon as well as across the country with regards to wildfires. And, you know, as I noted in my prepared remarks, you know, our team did really well. We did turn the power off a number of times and actively monitored for one of the longest IMT that we've had in the history of our company. Clearly, wildfire smoke is an issue for Oregon. The damage and destruction, most of which is in the U.S. Forest Service lands or BLM lands, but also for the overall health of the economy of the state. And so you can see in the Oregon business plan in the Governor's prosperity reports and council work, a lot of focus on how to address this issue.

We're looking forward to seeing the report that the PUC has commissioned. It's not out yet. I would expect it to be out in the next couple of weeks, and that should create a foundation for some of the legislative work we can do this session. We're closely monitoring what's going on in California, and particularly the findings from wildfire that's in the California earthquake report done earlier this year.

Julien Dumoulin-Smith

Excellent, guys. Thank you. Speak soon. Thanks, Julie.

Operator

Thank you. Our next question comes from the line of Shahriar Pourreza of Wells Fargo Securities.

Shahriar Pourreza

Hey, guys. Morning. Morning, Charlie. Morning. Just real quick on the holdco. Just on the petition, I mean, AWAC came in not opposing your changes to conditions 25 and 26. Are you seeing similar alignment from staff and CUB? And is the resolution before the December 7th acceptance date the base case or should we think of this sliding into '27 with the shareholder vote?

Maria Pope

Oh, that's a good question. You know, we're continuing to work through the process. Um, the Commission should uh come out, um, uh, pretty soon with their decision. Um, and we're continue we're we are monitoring and working through all of the different aspects.

Shahriar Pourreza

Okay, got it. Thanks, Maria. And then just on Bigelow and the Salmonfly build transfers, that's $1.75 billion that sits outside of the plan, mostly '27, '28. How should we think about the equity content there? Is it roughly 50-50 with the $500 million ATM covering it, or does the whole thing cover it? Outcome change, how you finance it. Thanks.

Joseph Trpik

So, I'll start with our guidance. When we talk to both our 5% to 7%, when we talk to our equity plan here, we are always viewing this without the holdco in the first place. So, our growth rates and the affirmations we made previously were exclusive to the holdco. So, we do think to, when we think to the financing of of these two projects specifically, we're We start with the tax credit that we'll receive from the 2023 RFP. We disclosed here earlier on the call somewhere between $350 million or $400 million of tax credits that will come from the '23 RFPs. Then we'll look to the debt to finance, our draw from the '25 forward, which we had almost $400 million left. And then we have a minimal new equity.

I think when you look to our equity guidance here, we have our equity for 2027, even inclusive of these projects, has increased by about $50 million from our prior disclosure.

Shahriar Pourreza

Got it. Perfect. Appreciate it, guys. I'll leave it there. Thanks. Thank you.

Operator

Thank you. Our next question comes from the line of Steve Fleishman of Wolfe Research.

Steven Fleishman

Yes, I think just clarity on you said you'll hear from the Commission your future any more specifics on likely. and which of these different options they, you know, clarification and rehearing, you know. Which direction? Just anything? So,.

Maria Pope

The date, the outside date is December 7th, when we would expect to hear from them. So I would assume that we'll go all the way to December 7th. Um, you know, given that we had a month-long, you know, year and a half long process and a negotiated settlement with a so there's a lot of um testimony on the record, a lot of expert statements, you know, my hope is that they are looking at the record and working through the process, and they'll come out with a decision on December 7th. So we'll know more then.

Steven Fleishman

One other question on that. So in the scenario where they do fix those two conditions appropriately. How are you thinking about the fact that kind of a less double leverage kind of opened in the order for a future rate case? And just is that an acceptable risk as part of this?

Maria Pope

You know, I think, Steve, we've looked at that from sort of the norm across the country, and it's not something that is always excluded from other holding companies. And so it's a risk that is typical of some other utilities, and we would expect to work through it. We're also moving towards 5-year rate cases. And so I think that the 5-year rate case uh system in the future will create uh more certainty for investors as as we move forward. That's helpful.

Operator

Our next question comes from the line of Christopher Ellinghaus of Guggenheim Securities.

Christopher Ellinghaus

Good morning, everybody. So, vis-a-vis the holdco decision, have you had any ways to get a sense of whether, you know, the two key elements sort of in dispute were errors on the part of the Commission in haste of trying to make adjustments to the settlement or those were intentional?

Maria Pope

You know, I don't think we have a comment on that. You know, we can't have any ex parte communications during this period of time with the decision outstanding. So we submitted what we thought were clear and pretty minimal recommendations in our clarification. filing a number of weeks ago and tried to make that as workable as possible, given all of the discussions over the prior months and the settlement that we had previously had with staff.

Christopher Ellinghaus

So obviously the settlement was very detailed and really gave the Commission a pretty good roadmap for this, but they decided to deviate. Do you think that they understand the impact that that has on investors and how that affects cost of capital when they do things like that?

Joseph Trpik

I'll chime in. I mean, that's the point of the clarification and honestly the point of our communications. Clearly the material included within the staff addressed that. However, we will work through the record here to hope that they have that clarity. Obviously, for us, as you know, that is what's critical to us, that is the value of this holdco that allows for the benefits that would go to customers to be paid. And so we need to make sure they appreciate that it's a critical structure that for an all to come.

Christopher Ellinghaus

Together. Okay. Joe, some of the numbers that you quoted were kind of interesting in the the absolutes versus the weather adjusted load numbers. It seems like maybe there might be some other factor because like the residential, you know, weather-adjusted was still lower, and total retail sales weren't up that much on a weather-adjusted basis either. So is there another factor at play that you can identify that might be dampening? Yes. load for the quarter beyond the weather?

Joseph Trpik

For the quarter, just for the quarter, when we think of residential, we were at 0.6 on a weather-adjusted. But I would agree with you on a year-to-date basis, Chris, as you may recall in the first quarter, we had some unusual load trends that we addressed through our plans. And we do agree that there were some unusual load patterns. So when you look year-to-date results those patterns obviously still hold however as we revised our you know as we revised and looked through the third quarter which is obviously one of our largest load quarters after adjusting out weather on the residential side it was pretty pretty darn close okay.

Maria Pope

And let me add one other one other comment. One of the great things about the U. M. 2377 large load tariff is that there's a essentially a take or pay. So we have pretty significant capacity payments, which positively impacted the bottom line. But we had some lower energy usage from a couple of the data center customers. could be kind of choppy at times.

Christopher Ellinghaus

That reminds me, Maria, I meant to ask, have you got any rule of thumb or any thoughts in terms of, you know, when you do have some extremes on the weather side, how that will affect the data centers or large load customers in general that ambient temperatures really might have an impact on the on their cooling needs and did you see any of that in this quarter at all?

Joseph Trpik

Yes, so I'll respond to it. So clearly the data centers have a less of a weather sensitivity. You did see a small weather to your question to date. We haven't, we haven't shown that. I believe we have seen that their weather differences and, you know, a couple percentage points, obviously, where you see the residential side acting much worse extremely well. I mean, I agree, and maybe what we can reflect to as we work through our guidance going forward is potentially as this class becomes more significant, try to give the differing sensitivities, because it is, you're right, as we go through this, the residential class, even the small commercial class, react much more significantly to weather than these classes that are much more an installed. You know, they're already insulated, they're trying to be as efficient as possible, even without the external factors.

Christopher Ellinghaus

And lastly, have you got any updates on your expected timing of 2025 resources?

Joseph Trpik

So, as you relate, if we're talking to the 2025 RFP, we have the two projects, obviously, we just announced here the timing for these projects as we're trying to work through tax credits have in-service dates and they have a little bit of different in-service dates in 2029. We do continue to work other items on the RFP shortlist that we published at the beginning of the year as we continue to work to fill what we believe is the bucket to serve the system reliably. Okay, thanks. Appreciate it.

Operator

Thank you. Our next question comes from the line of Aidan Kelly of JPMorgan.

Aidan Kelly

Hey guys, good morning. Thanks for the time today. Morning. Morning.

Aidan Kelly

I guess just picking up on the holdco or the hypothetical lack thereof scenario, could you just walk through how you would finance the Washington acquisition under the existing structure? The question is like do you see this changing the calculus of your CapEx or do you more look to kind of backfill with more equity in that scenario?

Joseph Trpik

I think to your comment, without a holdco, I'll start with, we had said that with a holdco that the, it would be, Washington would be accretive in the first full year. Our goal without a holdco would be that it be at least a break even to a slight accretion in its first full year. that we would not be impacting the capital at our PGE side, but we would be financing this at a balanced capital structure as it relates to that structure, assuming, again, no holdco.

Aidan Kelly

Great, that's super helpful. And then maybe just picking up on the Washington utility acquisition. Could you just characterize where staff, stakeholders' concerns are most substantive today, and maybe what incremental commitments you believe might be necessary to reach a settlement in Washington at this time?

Maria Pope

Sure. So, first of all, the process is going really well and we're moving through a lot of important conversations. There's three main areas that have been raised. The first one is CETA compliance, which is their clean energy compliance in the state of Washington. The second is is the hydro facility that is not included in the transaction. That's facilities that are on the Lewis River off of Mount St. Helens. And then third is the rate credit for customers.

Aidan Kelly

Great. Thanks for the time today. I'll leave it there. Thank you.

Operator

Thank you. Our next question comes from the line of Anthony Crowdell of Mizuho.

Anthony Crowdell

Hey, thanks so much. Good morning, team. I just want to follow up on Chris's question that maybe two people ago, just on the capital plan and I think the higher cost of equity, just without the holding company or if it's still not determined yet, just are there any changes to your capital program? Program, just as given the higher cost of equity that maybe you guys would have to readdress the capital plan that's out there. And I have a follow-up.

Joseph Trpik

Yes, I think, thank you for your question. You know, at this time, there really isn't a change to the capital plan. As I mentioned, you know, the additional financing costs for the RFP projects as they were added thanks to the, you know, the ability to monetize the tax credits from 2023 have a negligible or, you know, slight impact on our equity plan. And we believe, you know, we continue to be able to support our 5% to 7% growth, you know, with our current financings and without a holdco. So right now, I mean, I don't think now is the time really to debate any changes to the capital plan. But we agree that with our current.

Maria Pope

Current stock price and not having a holding company creates challenges, especially given Oregon's specific clean energy goals. You know, as Stu noted, near term, we have levers from the tax credit, tax credits are solid balance sheet, being able to draw on equity forward, as well as other mechanisms. So we're really focused on working through the process to hopefully come to a solid resolution that works for everyone on the holding company.

Anthony Crowdell

Okay, and then just more of a modeling question. Of the calls here, this cycle, we've been talking about maybe a spread between rate-based growth and maybe earnings growth or earnings per share CAGR. I'm just curious, what do you think the ranges or what's a good modeling assumption to use for, you know, go from rate-based growth to earnings growth for Portland?

Joseph Trpik

You know, I don't think, I don't have an update yet. I mean, we will look to that as we work to the 2027 guidance. I mean, I think the spread will hold for the moment until we formalize and layer in everything as it relates to 2027.

Anthony Crowdell

Great. Thanks so much. Catch you guys at EEI. Thank you.

Operator

Thank you. Our next question comes from the line of Gregg Orrill of UBS.

Gregg Orrill

Hey, good morning. Thank you. Um, maybe just some housekeeping around the, uh, the CapEx plan and the Bigelow and Salmonfly. Projects were signed on and in October. Was that the reason why you didn't include them in the $7.4 billion CapEx plan?

Joseph Trpik

That's right, Greg, not to do the sort of accounting or disclosures. We've always had our CapEx table that we use in the investor materials aligned with the liquidity and capital resources footnote in that 10Q. The 10Q is in as of date, and so we've tried to hopefully put some pretty adequate disclosures both in the investor materials as well as in the 10Q to layer that through. I mean, that is the only reason is because both agreements have effective dates within the last couple of days here.

Gregg Orrill

And are you providing any guidance around how that would – how those projects would impact the EPS growth rate guidance?

Joseph Trpik

For right now, obviously we've given guidance on the equity financing plan and we've affirmed our 5% to 7% for right now. So at the moment, what we've historically said here, which aligns is that in years of meaningful RFPs, we expect to achieve a growth rate at our midpoint generally at our midpoint or better here. And there's these RFP projects don't change that.

Operator

Thank you. Appreciate it. Thank you. Our next question comes from the line of David Rold of BofA.

Unknown Speaker

Hey, thanks for taking the question. Um, just looking at the 4Q implied guide, wondering if you could help us bridge a little bit of better how you get there, just with a little more granularity. In other words, if we took your slide 6 and rolled it forward a quarter. Comparing last year to last year or even to 2024, what are the puts and takes you'd flag that kind of ground your confidence in the number for this year, just given it such a meaningful step up. From recent quarters.

Joseph Trpik

Okay, sorry, I didn't mean to talk too soon. That's all right, go ahead. Good morning. I always love the roll forward questions where I get to just put the numbers in the air here. But so yes, there's a meaningful change from last fourth quarter to this fourth quarter. Just as a reminder, last year had a pretty, there was a pretty material weather effect in the fourth quarter, mainly in December. So when you think of the biggest, the biggest puts and takes are, are weather, right? Weather normal assumption. So that in of itself is ¢17.

The, the timing of the DS, so the distribution system planning recovery and C-side was only a partial quarter last time. So the DSP and C-side we'll drive that. We have a change or a more favorable move on net variable power costs. We have additional cost management. And then the last one is just the mechanical timing of the way the costs roll through the AUT. But when you take this, the super majority of the variance between when you look fourth quarter last year you'd anticipate fourth quarter to be this year is in margin. There's a little bit in the O&M management side, but the majority is these margin items that I laid out here, plus some O&M favorability. Okay, great. Thank you.

Operator

Thank you. Our next question comes from the line of J.C. Vidalas of Ladenburg Thalmann & Company. Hi, good morning. Just a quick clarification.

Unknown Speaker

If the Commission were to take action consistent with staff's recommendations that they put out on the 22nd, would that be enough to accept the Commission's order if they kind of go ahead and approve staff's recommendations? Or would you not be, or would you consider that an unacceptable recommendation?

Joseph Trpik

If we took the recommendations with the one notch credit downgrade before dividends stopped, we would not be able to accept that. That's not a one notch, as you all know, occurs sometimes for the sector as a whole and through ordinary course of business. And to have an ordinary course of business item risk dividends is not something that we're willing to accept whatsoever. Okay. Great. And then just on.

Unknown Speaker

On the Washington portion, I believe the utility is somewhat earning around the mid-single digits. I mean, do you think that's enough to make it either break even or be slightly accretive if there is no holdco? Yes.

Joseph Trpik

So I think so. I think I mentioned a little earlier here. Obviously, our plan here, we said it would be accretive in the first full year with a holdco. Our comment was that the transaction does not need a holdco, which we fully support. We said it would take a little while longer to be accretive without a holdco. However, as we've continued to to work forward. Our goal is in the first full year of the WashCo to at least be break-even. That is what we are shooting for.

We believe if we hit our operational goals here that is an achievable result.

Unknown Speaker

Okay. And then just along those lines, I mean, if it closes mid-2027, when would you suspect you would be going in for your first rate case in Washington?

Joseph Trpik

I want to, we're still evaluating when that would be. I think when we would go in for a rate case would potentially even be part of this agreement. So I don't have an exact date at this point in time. Okay, great. Thank you. See you all at EEI. Thank you. Thank you.

Operator

Thank you. As a reminder, to ask a question, you'll need to press star 1 1 on your telephone. Our next question comes from the line of Travis Miller of Morningstar Inc.

Travis Miller

Hi, everyone. Thank you. Quick modeling question here. The large load tariff, what is or will be the impact, either from a net revenue and or earnings, for either the rest of the year or next year?

Joseph Trpik

Good morning. So I'll start, Maria may add on this one. So for the third quarter, the first quarter of the large load tariff has been in effect. I believe we disclosed it's around $4 million. We think for the second half of the year, potentially that same, not a little bit more. Then next year as we work through obviously we haven't given guidance there's no reason to think that those type of numbers wouldn't occur for the first part of the year but just as a reminder all of this gets rolled into a rate case one of the more you know important factors for the large load tariff as much as we talk about you know the additional charging and the balancing to the data centers is the residential customers also did experience a bit of a of a little bit of a rate credit reduction around 1% here that came through starting at that same period of time.

Travis Miller

Okay, perfect and then higher level question for your system as you look at it today in terms of energy coming from renewables and then the need for capacity and particularly clean capacity should we expect most of the incremental projects to come with some type of battery solution? Again, just given the balance between energy and capacity that's on your system now.

Maria Pope

That's a great question. We have been very fortunate to be out front in implementing battery storage and it's a really important part of our reliability mix today. Being able to add batteries to existing renewable facilities as well as with additional additional renewables enables us to better leverage existing transmission through the system and really create positive synergies. We would expect to continue to add batteries. The more you add, you get to a little bit of diminishing returns. One of the things that we as part of U of 2377 of our large load work is the capacity that many of those customers bring. So as I noted, Veras is bringing battery storage to their project, and we have other data centers that do the same thing. So we also are watching very closely the run-up in battery storage prices and are fortunate to have as much we uh in construction uh and moving forward at the uh prior pricing.

Joseph Trpik

I do think just as a numbers part, which is an interesting when we work through these 2025 RFP and PPAs that are out there from the other, we will have batteries on the system well in excess of 1,000 megawatts, on a system with a peak load of somewhere around 4,500 megawatts right now. So it's a pretty, you know, right even now the EI's we have some standalone batteries, it's a pretty impressive battery population relative to the overall system.

Travis Miller

Yeah, that's great. Those are big numbers relative. Okay, that's all I need. Thanks so much.

Operator

Thank you. Our next question comes from the line of Paul Fremont of Ladenburg Thalmann.

Paul Fremont

Hey, thanks. I'm just curious what your plans are for your ownership interest in Colstrip. Are you still planning to exit ownership of the plant in 2028?

Joseph Trpik

Good morning, Paul. How are you? So, Colstrip, we continue to own Colstrip and our interest. We do not currently have a disposition plan for Colstrip. We do know that under current Oregon law that the electrons related to Colstrip or the power coming from whole generation is not to be served for retail load, at least as currently written. We just concurrent to work with all the constituents on what is the best alternatives as it relates to the future distribution, future status of that plant for us.

Paul Fremont

So would you consider continued ownership of the plant if you couldn't sell to retail customers?

Joseph Trpik

We honestly will have to work with the regulators. I think it'll be just an interesting dialogue to have considering the status of the law and the ownership interest. But we're open to work with them. Obviously, it is inexpensive energy, but by view of Oregon, it is not clean energy, but we are open to work through many different scenarios on how to resolve our structure with Colstrip.

Operator

Great. Thank you. Thank you. This concludes the question and answer session. I would now like to turn it back to Maria for closing remarks.

Maria Pope

Great. Thank you very much. Clearly, as we've discussed this morning, a lot of work to continue to be doing on the holding company structure. But as we've also noted, we've taken up our growth rate from our data centers from 10% to 12%, underpinned by really positive results from our large local tariff. We have two exciting RFP projects that are moving forward, offsetting some of the other reductions in capital for this year. And then as we look at O&M, we've exceeded our goals, solid operating performances, as well as through the day ahead market, we're seeing great results on the power cost side. Uh we appreciate your time this morning and uh we look forward to seeing uh you all at EEI in a couple of weeks.

Operator

Thank you. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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