PORTLAND, Ore., Dec. 18, 2020 /PRNewswire/
-- Portland General Electric Company (NYSE: POR) ("PGE"
or the "Company") today announced the Special Committee of the
Board of Directors concluded its independent review of the energy
trading activity that led to the losses incurred in the third
quarter.
The Special Committee concluded that the trades were
ill-conceived and revealed opportunities for improving the
Company's energy trading policies and practices. Additionally, the
Board of Directors concluded that the actions the Company began
taking in August to enhance oversight of energy trading and
associated risk management reporting, policies and practices are
consistent with the Special Committee's recommendations and will be
monitored by the Board of Directors through enhanced reporting.
These actions will strengthen the Company and include:
- Added expertise: PGE brought in additional
experienced risk management personnel and replaced the Power
Operations general manager with a new interim leader.
- Strengthened trading policies: Power Operations
personnel are operating under revised policies designed to prevent
positions of the type that led to the losses. The improved policies
place controls on the ability of personnel to enter into wholesale
energy transactions to the extent that PGE does not have physical
or financial delivery capability.
- Enhanced risk reporting: Energy trading activity
reporting has been improved to ensure greater visibility into
portfolio risk.
- Changed reporting structures: Energy Trading Risk
Management now reports through a Risk and Compliance team that
reports to the Chief Executive Officer. Effective January 1, 2021, Power Operations will report to
the Vice President of Strategy, Regulation and Energy Supply.
- Changed personnel: The individuals who previously were
placed on leave are no longer with the Company.
The Compensation and Human Resources Committee of the Board of
Directors, in consultation with the other independent directors of
the Board, has determined, in light of the third quarter losses, it
would be inconsistent with PGE's pay-for-performance philosophy for
certain senior leaders to receive annual incentive compensation.
Accordingly, the CEO, the CFO and one additional executive officer
will not receive any annual incentive compensation for 2020.
"The Special Committee, with the assistance of independent legal
advisors, conducted a thorough, top-to-bottom review of the energy
trading activity that led to the losses and we are pleased to put
this matter behind us," said Jack
Davis, Chair of the PGE Board. "The Board is confident that
the actions the management team implemented and continues to take
will make PGE an even stronger company, better positioned to carry
out our mission of powering the communities we serve."
As previously announced, there will be no impact to customer
prices, as the Company will not pursue regulatory recovery.
Additionally, the losses do not impact PGE's ability to serve
customers.
Review of Energy Trading Losses
The energy trading
positions resulting in these losses were short in the desert
Southwest and California power
markets and long in the Pacific Northwest power markets. In
August 2020, wholesale electricity
prices increased substantially in the desert Southwest and
California power markets due to
extreme weather conditions, constraints to regional transmission
facilities, and changes in power supply in the West. As a result of
these market disruptions and the Company's exposure to these
positions, the Company's energy portfolio realized significant
losses.
About Portland General Electric Company
Portland
General Electric (NYSE: POR) is a fully integrated energy company
based in Portland, Oregon, with
operations across the state. The company serves approximately
900,000 customers with a service area population of 2 million
Oregonians in 51 cities. PGE has 16 generation plants in five
Oregon counties, and maintains and
operates 14 public parks and recreation areas. For over 130 years,
PGE has delivered safe, affordable and reliable energy to
Oregonians. Together with its customers, PGE has the No. 1
voluntary renewable energy program in the U.S. PGE and its 3,000
employees are working with customers to build a clean energy
future. In 2019, PGE, employees, retirees and the PGE Foundation
donated $4.3 million and volunteered
32,900 hours with more than 700 nonprofits across Oregon. For more information
visit portlandgeneral.com/news.
Forward-Looking Statements
Statements in this press
release that relate to future plans, objectives, expectations,
performance, events and the like may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include statements containing
words such as "anticipates," "believes," "intends," "estimates,"
"promises," "expects," "should," "conditioned upon," and similar
expressions. Investors are cautioned that any such forward-looking
statements are subject to risks and uncertainties, including,
without limitation: the impact of the recommendations of the
Special Committee on the Company and its operations; the time and
expense incurred in implementing the recommendations of the Special
Committee; any reputational damage to the Company relating to the
matters underlying the Special Committee's review; the outcome of
various legal and regulatory proceedings; general economic and
financial market conditions; severe weather conditions, wildfires,
and other natural phenomena and natural disasters that could result
in operational disruptions, unanticipated restoration costs, or
liability for third party property damage; cyber security breaches
of the Company's customer information system or operating systems,
which may affect customer bills or other aspects of our operations;
and widespread health emergencies or outbreaks of infectious
diseases such as the novel coronavirus disease (COVID-19), which
may affect our financial position, results of operations and cash
flows. As a result, actual results may differ materially from those
projected in the forward-looking statements. All forward-looking
statements included in this press release are based on information
available to the Company on the date hereof and such statements
speak only as of the date hereof. The Company expressly disclaims
any current intention to update publicly any forward-looking
statement after the distribution of this release, whether as a
result of new information, future events, changes in assumptions or
otherwise. Prospective investors should also review the risks,
assumptions and uncertainties listed in the Company's most recent
annual report on Form 10-K and in other documents that the Company
files with the United States Securities and Exchange Commission,
including management's discussion and analysis of financial
condition and results of operations and the risks described therein
from time to time.
Media Contact:
Brianne
Hyder, Portland General Electric
Brianne.Hyder@pgn.com; 503-464-8596
Investor Contact:
Jardon
Jaramillo, Portland General Electric
Jardon.Jaramillo@pgn.com; 503-464-7051
View original
content:http://www.prnewswire.com/news-releases/portland-general-electric-announces-conclusion-of-the-review-by-the-special-committee-of-the-board-of-directors-301195896.html
SOURCE Portland General Company