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Portland General Electric Co  (NYSE:POR)
Q1 2019 Earnings Call
April 26, 2019, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, everyone, and welcome to Portland General Electric Company's First Quarter 2019 Earnings Results Conference Call. Today is Friday, April 26, 2019. This call is being recorded, and as such, all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. (Operator Instructions)

For opening remarks, I will turn the conference call over to Portland General Electric's Director of Investor Relations and Treasury, Chris Liddle. Please go ahead sir.

Christopher Liddle -- Director of Investor Relations and Treasury

Thank you, Gigi (ph), and good morning, everyone, I'm pleased you're able to join us today. Before we begin our discussion this morning, I'd like to remind you that we have prepared our presentation to supplement our discussion which we'll be referencing throughout the call.

The slides are available on our website at investors.portlandgeneral.com. Referring to Slide 2, I would like to remind everyone that 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 earnings press release and our most recent periodic reports on Form 10-K and Form 10-Q, which are also available on our website.

Leading our discussion today are Maria Pope, President and CEO; and Jim Lobdell, Senior Vice President of Finance, CFO and Treasurer. Following their prepared remarks, we will open the lines for your questions.

Now, it's my pleasure to turn the call over to Maria Pope.

Maria Pope -- President and Chief Executive Officer

Thank you, Chris, and good morning, everyone. Welcome to Portland General Electric's first quarter 2019 earnings call. I'm pleased to share our financial results and accomplishments. We are also reaffirming our full-year 2019 earnings guidance of $2.35 to $2.50 per diluted share. Earlier this week, our Board approved a 6.3% increase in our annual dividend or $0.09 per share. Additionally to provide better guidance, we're narrowing our dividend payout range to 60% to 70% of earnings.

Turning to Slide 4. For the first quarter of 2019, we reported net income of $73 million or $0.82 per share, an increase of $0.10 per share compared to the first quarter of 2018. As many of you know, we experienced unprecedented volatility and the highest power prices we've seen in the western power markets since the California energy crisis in the early 2000. Market conditions reflected 22% lower than average hydro and 43% lower than average wind, as well as ongoing reductions in gas pipeline capacity resulting from the Enbridge explosion in British Columbia last fall. During this time, we achieved 98% of plant availability which allowed us to effectively navigate market challenges and strategically dispatch our generation to maintain reliability and consistent power costs.

Turning to Slide 5. The economy in our service area remains strong. US News and World Report recently ranked Portland as one of the top 10 places to live in the country. Average wages of Oregonians have risen 3% to 4% per year for the last several years and unemployment rates in the urban centers of our service area are near historic lows. Reflecting these factors, PGE's average customer count increased by 1.2% in the first quarter and our service area remains busy with new construction and expansion projects.

Now turning to Slide 6. We're advancing transportation electrification. Earlier this month, we opened our latest Electric Avenue location and officially launched our charging network. By the end of this year, we will have 7 locations within our service area. We have also filed proposals that will help a greater number of customers deploy electric vehicle chargers. In addition, we recently partnered with our local transit authority TriMet to launch 100% wind powered all-electric bus route.

And finally, we announced our participation in the West Coast clean transportation quarter working a commercial electrification on the main interstate highway in the West. Also in the first quarter, the Public Utility Commission approved our green tariff proposal which we'll bring to market later this spring. We are also moving forward with our 2019 Integrated Resource Plan and anticipate filing this summer.

With that, I'll turn the call over to Jim.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thank you, Maria. As Maria mentioned, we are reaffirming our full-year 2019 guidance of $2.35 to $2.50 per diluted share. Additionally, we are maintaining earnings-per-share growth guidance of 4% to 6% on average through 2021 using our 2018 earnings of $2.37 per diluted share as a base year for that guidance.

Turning to Slide 7, which shows earnings drivers. First, gross margin increased a total of $0.10 per diluted share. As part of our 2019 General Rate Case, we added $250 million of rate base which increased earnings power by $0.03 per share in the first quarter. Additionally, weather represented a $0.03 per share increase when compared to unfavorable weather in the first quarter of 2018. The remaining $0.04 are the net of the following. Colder temperatures across the region, which increased demand that resulted in higher revenues, higher power prices in the market as a result of increased regional demand due to colder temperatures, lower wind and hydro production, and limited gas supply due to gas pipeline maintenance and inspection. And our power plants achieved outstanding availability allowing us to effectively dispatch the lowest cost resources in a challenged market. Next, an increase of $0.03 is attributable to the absence of incremental costs associated with the Carty litigation included in the first quarter of 2018. A decrease of $0.02 from lower production tax credit generation as when underperformed in the first quarter of 2019, and finally, a decrease of $0.01 for miscellaneous items.

On the Slide 8, we have provided a summary of the Company's current capital expenditure forecasts from 2019 to 2023. Consistent with our rolling planning process, we're updating our capital forecast to include additional expenditures of $20 million in 2019 for a total of $600 million. These additional expenditures will be focused on upgrading our generation facilities.

On to Slide 9, we continue to maintain a solid balance sheet including strong liquidity and investment grade credit ratings. As of March 31st 2019, we have first mortgage bond issuance capacity of $1 billion, cash available, short-term credit and letter of credit capacity totaling $726 million, and a common equity ratio of 50.7%.

This month, we redeemed $300 million of first mortgage bonds with an interest rate of 6.1% and issued $200 million of first mortgage bonds at a rate of 4.3% maturing in 2049. For the remainder of 2019, we expect to fund estimated capital requirements with cash from operations and the issuance of debt securities up to an additional $250 million.

And now, operator we're ready for questions.

Questions and Answers:

Operator

(Operator Instructions) And our first question is from Chris Turnure from JP Morgan. Your line is now open.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Good morning, Chris.

Chris Turnure -- JP Morgan -- Analyst

Good morning, Maria and Jim.

Maria Pope -- President and Chief Executive Officer

Good morning.

Chris Turnure -- JP Morgan -- Analyst

You guys mentioned the Enbridge pipeline situation from the fall. Could you just kind of walk us through the impact on the quarter itself for you not necessarily directly to your bottom line and the EPS impact, but what that means for the commodity markets in the area right now, and then just separately on the 1Q results? What would be kind of a clean number ex any kind of weather versus normal or commodities versus normal?

Maria Pope -- President and Chief Executive Officer

Sure. So I think it's important as we look at the Enbridge pipeline explosion and then the subsequent repair and maintenance as well as inspection that they've been doing from the entire pipeline in British Columbia, has meant that we've had curtailed capacity. This has largely been an issue for electric generation when we've had very cold periods of time and the heating load has required extensive use of gas that would not take place during normal temperatures. As we look into the balance of the year, we're not just concerned about the issues with the Enbridge pipeline and the additional inspections and maintenance that will be ongoing, but we're also concerned around the withdrawal rates of lease of Canyon and the protocol restrictions that we saw last summer and we'll continue to see this summer. All of these things are important not just in and of themselves but as they combine with lower wind and with lower hydro. The forecast for the balance of the year in the Dallas are much better for hydro, they're below normal in British Columbia, and in our system, we're seeing slightly above average. But in general, we're expecting warmer temperatures this summer and with those warmer temperatures frequently come lower levels of wind generation, and as such, we're preparing for what will probably be a continuation of challenging energy markets. It's not possible always to break things up and to start it -- what is one area costs and in one particular area. Jim might have some additional comments.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Yeah, Chris. One thing I do is we try to kind of normalize it. I think about it from the perspective of the AUT, and in the first quarter, we're over $12 million in the AUT. But when you look at weather compared to normal, there really was no impact associated with the additional loads that were created there, and as Maria pointed out, there were a lot of moving pieces that were occurring in the marketplace and they're all interrelated. So it's very difficult to be able to pull out exactly what the impact of the gas was.

Chris Turnure -- JP Morgan -- Analyst

Okay. That's helpful, kind of surrounding color though. But for the first quarter specifically, you guys benefited by $12 million pre-tax versus your kind of baseline plan that you submitted to the Commission last year.

Christopher Liddle -- Director of Investor Relations and Treasury

We were $12 million above the baseline --

Maria Pope -- President and Chief Executive Officer

-- meaning higher cost.

Christopher Liddle -- Director of Investor Relations and Treasury

Right.

Maria Pope -- President and Chief Executive Officer

We're $12 million above and then we had higher revenues that offset some of those higher costs.

Chris Turnure -- JP Morgan -- Analyst

Okay. So there are still a couple of moving pieces around that and net-net you obviously did well for the quarter?

Christopher Liddle -- Director of Investor Relations and Treasury

Yes.

Maria Pope -- President and Chief Executive Officer

Yes. Because that cold weather drove our loads to be higher but it also drove natural gas usage to be significantly higher, and during very cold periods of time, we generally see lower levels of wind generation in particular and the snow pack was still pretty strong, so we didn't see a lot of runoffs in hydro.

Christopher Liddle -- Director of Investor Relations and Treasury

Yes. So you've got cold weather running up prices, because it's running up demand. You've got gas prices that are increasing because of the constraints on the gas, the mainline gas system. You've got lower hydro and wind as Maria was pointing out. And then you've got our power plants where we had great availability during that time period. All of those combined allowed us to be able to manage our power prices very consistently.

Chris Turnure -- JP Morgan -- Analyst

Okay. And then my second question is on cap and trade and it looks like it's entered into the final stages here. And you guys don't have a lot of cold exposure obviously, but I'm wondering if you or others have done a kind of estimated customer bill impact for your customers or electric utility customers in general in the state?

Maria Pope -- President and Chief Executive Officer

Sure. Well, thank you. The cap and trade discussions have been ongoing for some time and continue in the state of Oregon as well as regionwide. We've been participating actively with all of the stakeholders and our main concern has been that our customers don't pay twice. We have very specific renewable goals in the State of Oregon which require us to add renewable energy at different points in time as we move forward toward 2050. And so as we do that, we're able to stay within the realm and not incur any fees or penalties which would require any impact to customer prices. So it's very important as we decarbonise our electric supply that customers don't pay twice for that and that's currently included in the draft of the legislation.

Operator

Thank you. Our next question is from Julien Dumoulin-Smith from Bank of America. Your line is now open.

Julien Dumoulin-Smith -- Bank of America -- Analyst

Hey, good morning. Can you hear me?

Christopher Liddle -- Director of Investor Relations and Treasury

Yeah. Good morning, Julien.

Maria Pope -- President and Chief Executive Officer

Yes, go ahead.

Julien Dumoulin-Smith -- Bank of America -- Analyst

Hey. So perhaps just to pick up on a smaller -- bunch of smaller items here. In terms of cost cuts, you all have talked about pursuing a more meaningful revisit of your structure over time here. How do you think about that relative to the lower loads as you think about it. I'm just thinking about '19, how you're trending in an overall on sort of this multi-year basis given some of the comments you made last quarter and especially relative to load trends as well?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Well, from a load perspective, we're anticipating on a long-term basis to have over 1% increase in load. For 2019, we were saying whether adjusted in our guidance we are going to go up by 0.5%. So not really seeing a drop off in load. As Maria had mentioned in her comments, we're seeing a tremendous amount of construction that's occurring in our service territory and that is keeping us more than busy. So we are trying to address how we go about performing on all that additional growth that's occurring in the service territory while at the same time trying to be as efficient as possible on a long-term view for the Company. And it meant a lot of changes inside the organization.

Julien Dumoulin-Smith -- Bank of America -- Analyst

Got it. So maybe said differently, net-net cost program is still under way as anticipated and load roughly not too far?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

That seems reasonable.

Julien Dumoulin-Smith -- Bank of America -- Analyst

Okay. And then turning to the IRP here. I know that filing this summer, maybe just in terms of setting expectations, how do you think about potential awards coming out of that even preliminarily given sort of the back and forth on REC availability that you have et cetera. And PTC acceleration that we just saw.

Maria Pope -- President and Chief Executive Officer

So Julien, there's three main areas of our IRP that we'll be focusing on. The first one is energy efficiency, demand response and dispatchable storage. The second is we're seeking approximately 150 average megawatts of additional renewable that we would hope we'd be able to come online by about 2023 to be able to pick up. So that last remaining portion of the PTC is they roll off into the future.

And then, thirdly, a stage process to acquire additional capacity resources that would meet our resource needs by being able to take advantage of capacity that is carbon-free first and really understand the depth of the market in that area. It's too early to speculate what might happen out of an RFP for any of the additional builds that might take place from our IRP. Our hope is that we'll have a preliminary draft of our IRP out sometime in May, maybe toward the latter part of May. And then with a filing of the final document sometime this summer. We have had a number of public hearings and a very robust public process so far.

Julien Dumoulin-Smith -- Bank of America -- Analyst

Sorry -- and Maria, if I can, can you elaborate a little bit more on this process for low carbon resources, just what that could broadly look at. Because it seems like obviously, it's a little bit of a -- it's sort of ill-defined right now. What could that -- what permutations that will take?

Maria Pope -- President and Chief Executive Officer

Sure. So first of all, if we're looking at low carbon resources, I'm going to address the capacity piece which I think is where you're going versus just a RFP for energy. On the capacity side, what we'll do is we'll go low with sort of a layered approach, as you'll remember from our last discussion in the 2016 IRP, we ended up with contracts with a number of regional parties and significantly Bonneville Power Administration to be able to provide capacity. And so being able to use hydro capacity contracts as a non-carbon emitting way to be able to balance the intermittency of renewables will be the first way that will test the market. And based on that, then we'll figure out what else we need to do as we use a layered approach to our capacity RFP processes.

Julien Dumoulin-Smith -- Bank of America -- Analyst

Okay, all right. Fair enough. Well, I'll leave it there. So thank you very much.

Maria Pope -- President and Chief Executive Officer

Thanks, Julien.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thanks, Julien.

Operator

Thank you. Our next question is from Insoo Kim from Goldman Sachs. Your line is now open.

Insoo Kim -- Goldman Sachs -- Analyst

Thank you. On the tightened dividend payout policy, is the thought that over time gradually from just the moderate difference in the EPS growth and dividend growth that you've recently been growing at that 60% to 70% and especially maybe at the midpoint that'll come gradually over time?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Yes.

Insoo Kim -- Goldman Sachs -- Analyst

Okay. But there's no specific time period or whether it'll be in the lower or upper end of that in some period of time?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

No, no we're not providing any guidance along those lines. We just -- we looked at our modeling, we thought it was appropriate based on what we were seeing in order to narrow the range.

Insoo Kim -- Goldman Sachs -- Analyst

Got it. And then on the load growth, I know you've guided to the 0.5% weather adjusted for this year and 1% would definitely be a pretty positive step longer term. Are you seeing, and Maria, I know you talked about all the activity outside your window on construction and whatnot. Do you have any time frame in your head as to whether that's going to be in the next couple of years or whether that'll be a little bit more longer term?

Maria Pope -- President and Chief Executive Officer

I think it will be both. Right now, Oregon has third highest number of cranes in the country behind Seattle and Los Angeles, obviously, much larger metropolitan areas than Portland. We're also seeing substantial interest in a wide variety of industries, but significantly in terms of energy consumption, digital companies as well as other high-tech companies. And I think this is not just a reflection of robust economy, but also our economic position vis-a-vis California and markets in Washington. Our geographic area is much less expensive to operate in than Northern California, San Francisco or the Seattle region.

Insoo Kim -- Goldman Sachs -- Analyst

Understood. Thank you very much.

Maria Pope -- President and Chief Executive Officer

Thank you.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thanks, Insoo.

Operator

Thank you. Our next question is from Paul Fremont from Mizuho. Your line is now open.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Good morning, Paul.

Paul Fremont -- Mizuho -- Analyst

Good morning. Thanks a lot. Just following up on Julien's question with respect to the IRP. If you were to determine that additional resources were required, I assume there would be an associated RFP process. How far out into the future would you expect that RFP to take place?

Maria Pope -- President and Chief Executive Officer

I don't think we know which is one of the reasons why we're testing the marketing of following a layered approach. Whatever we do, we'll absolutely have a competitive bidding component through an RFP process and -- or something similar. And we will also be discussing it publicly with all stakeholders. And you should also appreciate that -- that's why there's a pretty significant discussion within the industry regulators and others around the growing interdependence of gas and electricity, overall capacity, availability of markets. And we would expect that all of these discussions will come into play as we look at also advances in technology. Jim may have some other comments he wants to add.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Yes. The other thing I'd say Paul is, as we're looking at renewable resources, the value that PTC is still out there. We're going to try and capture as much of that as possible for our customers.

Paul Fremont -- Mizuho -- Analyst

Right. And then the other -- I guess the other question and I had really relate to sort of a change in the dividend policy. It seems like the payout level is going up at a time where you might end up in a period of higher spending levels. I just maybe just want to get a better understanding of that.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

So, again, as we're doing our long-term modeling for the company, the narrowing of that range really fits well with that. So we're comfortable with it.

Paul Fremont -- Mizuho -- Analyst

Great. Thank you very much.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thanks Paul.

Maria Pope -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is from Gregg Orrill from UBS. Your line is now open.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Good Morning, Gregg.

Maria Pope -- President and Chief Executive Officer

Good morning.

Gregg Orrill -- UBS -- Analyst

Hi, good morning. Not to read anything into this, but in the cash from operations guidance for '19, are there any adjustments that you would guide to that, you know to think about using it as a base for going forward?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

No. I take it as written in the Q. I think it explains it quite well what we're expecting from operations, what we're expecting from investing in financing activities.

Gregg Orrill -- UBS -- Analyst

Okay.

Maria Pope -- President and Chief Executive Officer

I would say that as we're taking up our capital expenditures, having them being spent more proportionately throughout the year, has been a consequence of the higher level of capital spending that we have to be able to effectively get the work done efficiently and as low cost as possible.

Gregg Orrill -- UBS -- Analyst

Okay. And then on the next RFP or IRP, have you identified yet the level of resource that you'll need or maybe better said the shortfall in supply?

Maria Pope -- President and Chief Executive Officer

We're still in discussions of that, what we have had discussions with is about a 150 average megawatts of energy. And then what will be in the mid 2020 is a growing capacity shortfall.

Gregg Orrill -- UBS -- Analyst

Okay. Thank you.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thanks, Greg.

Operator

Thank you. Our next question is from Travis Miller from MorningStar. Your line is now open.

Travis Miller -- MorningStar -- Analyst

Good morning. Thank you.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Good morning, Travis.

Travis Miller -- MorningStar -- Analyst

Sticking on the IRP here for a moment. Those three buckets that you identified, would you plan to offer self build or self investment options in all three of those? Is there are any bucket there that you would think about not doing it or doing more of a self build option? Your thoughts on that.

Maria Pope -- President and Chief Executive Officer

We have not discussed any of those thoughts publicly at this point in time. We're still in the planning stages to -- and making sure that we have the least cost resources available for customers. We take a look at what's competitively available and if we need to supplement that competitive marketplace with a bit of our own. And at this point in time, we're still doing that work and looking at the market.

Travis Miller -- MorningStar -- Analyst

Okay. You wouldn't -- you wouldn't rule out any of those buckets so in terms of possible self build and none of that's in your 2022 and '23 CapEx. So that will be incremental, is that right?

Maria Pope -- President and Chief Executive Officer

It will all be incremental, correct.

Travis Miller -- MorningStar -- Analyst

Okay. And then real quick, I wonder if you could give an update on the Wheatridge facility where it is and starting early construction or what?

Maria Pope -- President and Chief Executive Officer

So construction has not started. We're doing a lot of engineering, a lot of permit work. Unfortunately, as one prepares the site, there's a lot of work that takes place where there's not a lot of capital spending until you really get into the construction and assembly mode of a wind farm. So we're very much in the early stages.

Travis Miller -- MorningStar -- Analyst

Okay, still on track for the original schedule?

Maria Pope -- President and Chief Executive Officer

Absolutely. Yep, it's going well.

Travis Miller -- MorningStar -- Analyst

Great. That's all I have. Thank you.

Maria Pope -- President and Chief Executive Officer

Thank you.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thanks, Travis.

Operator

Thank you. Our next question is from Vedula Murti from Avon Capital. Your line is now open.

Vedula Murti -- Avon Capital -- Analyst

Good morning.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Good morning, Vedula.

Vedula Murti -- Avon Capital -- Analyst

In terms of the netting of revenues versus the fuel and purchased power costs, you indicated that, I want to make sure I got this right that your fuel and purchased power incurred costs were about $12 million above the baseline. So if that's correct, that would imply in order to get to the $0.07 positive delta to the gross margins plus system we're basically about positive $20 million to end up there. Is that basically accurate?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

It is a reasonable direction, the numbers are a little bit off. But Chris or Peter can help you with those later.

Vedula Murti -- Avon Capital -- Analyst

Okay. And secondarily in terms of these some of the cost initiatives you discussed on -- I want to take a look at the operating expenses, generation transmission distribution and administrative and other year-over-year at least for the quarter, that was about 7% above in aggregate, combined 7% higher in '19 versus '18 I assume, some of the extreme weather conditions may have affected that. So as on a going forward basis here, kind of how should we be thinking about that?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

From two perspectives. One is that we aligned our cost structure to our most recent 2019 GRC. And with that being said, we are continuing as we mentioned previously that we are focusing on the efficiency and throughput of the operations and we're hoping to improve the overall cost structure of the company going forward.

Vedula Murti -- Avon Capital -- Analyst

Is there a way -- or can you bound that off in any fashion as to kind of what would be a reasonable expectation?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

No, not at this point.

Vedula Murti -- Avon Capital -- Analyst

All right, thank you.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thank you.

Operator

Thank you. Our next question is from Phil Covello from ExodusPoint. Your line is now open.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Good morning, Phil.

Andrew Levi -- ExodusPoint -- Analyst

Hey guys, it's Andy Levi here. No, it's actually Andy.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

No, I was hoping for Phil.

Andrew Levi -- ExodusPoint -- Analyst

I know you were, I like you guys.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Likewise.

Andrew Levi -- ExodusPoint -- Analyst

And actually another good quarter, so you guys managed everything really well.-

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thank you.

Andrew Levi -- ExodusPoint -- Analyst

Just on the back -- not to kind of beat a dead horse, but just on the power market situation, I just want to kind of understand it and I can understand your situation. But what were the -- how could you categorize your hydro conditions with 90 -- did you give a number? I don't remember as far as first normal for the quarter.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Hydro for us, well, the region was down. So you have to think about that from perspective of how it influences power prices. When you look at our hydro alone, we're about 22% under where we expected in our AUT filing.

Andrew Levi -- ExodusPoint -- Analyst

Okay.

Maria Pope -- President and Chief Executive Officer

You know a lot of that was comes from regional contracts we have with the Mid Sea. So that would be representative of the industry in general and the Pacific Northwest.

Andrew Levi -- ExodusPoint -- Analyst

Okay. And I mean when you say the contracts, that the contracts you have, but not because it was below normal with this weather and cold weather related. So both --

Maria Pope -- President and Chief Executive Officer

These are -- these are long term contracts we have with some of the Columbia River Dam operators. And that's the bulk of the generation -- those dams have the bulk of the generation in the Pacific Northwest.

Andrew Levi -- ExodusPoint -- Analyst

And was it more than it was just so cold that the water was flowing? Or there wasn't even any melting at all or just curious trying to figure out why in the winter which I know is lower hydro time anyway, but why it was below normal?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

A couple of things Andy. One is that when you look at the snow pack, that's occurred in the region you might say. And I include in the region going up into Canada, that Canadian snow pack and the reservoirs that we saw up there are at lower levels what we're experiencing down here in the Pacific Northwest. So when you look at the forecast that was in the Q for hydro for the annual basis, you'll find that Grand Coulee was down below 100%, but if you look at what we've got for the Oregon resources, so looking at the Clackamas River, the Deschutes River, those levels were up higher than 100%. So that had a big impact because the Canadians are a big driver of the flows that go down through the mid Columbia system and a big impact on power prices. I mean specifically, Grand Coulee for 2019 is estimated to be about 87% of normal versus last year, we were closer to 100%. You look at the Deschutes River, the Deschutes is sitting at -- and Deschutes is in Oregon, one of our major power plants are sitting on it, the Pelton Round Butte, that one supposed to be at 110%. So that has a significant impact on power prices, when you got cold weather occurring, you've got a decrease in hydro and rain at that particular point in time and you've got the gas issue that was going on on the Enbridge system. And at the same time, you've got wind that is not delivering at the forecasted levels. Then that really comes together and drives power prices.

Andrew Levi -- ExodusPoint -- Analyst

I get it. And then -- but just as far as -- back on the hydro, that wasn't your own hydro that was the issue. It was more around as you said north of you -- where the excess hydro normally would flow, is that kind of the way to look at it?

Maria Pope -- President and Chief Executive Officer

Yes. And I'm not sure I would use the word excess, but that's where the larger quantity of hydro for the entire region is. Our hydro, as Jim mentioned, actually performed relatively well versus the region as a whole all the way through British Columbia.

Andrew Levi -- ExodusPoint -- Analyst

Okay. I got it. Thank you very much.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thanks Andrew.

Operator

Thank you. Our next question is from Greg Reiss from Centenus. Your line is now open.

Maria Pope -- President and Chief Executive Officer

Greg?

Greg Reiss -- Centenus -- Analyst

Yep. Can you hear me?

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Yes.

Maria Pope -- President and Chief Executive Officer

Now we can.

Greg Reiss -- Centenus -- Analyst

Congrats on a good quarter. Just a real quick question on the IRP, the 150 megawatts that you mentioned, is that kind of what the nameplate capacity of the resource would be or would you yet to kind of gross that up for like a renewable capacity factors or would be something bigger than that?

Maria Pope -- President and Chief Executive Officer

Yes. That's an average megawatt, not capacity, but generation. So you would need to gross it up. Yes.

Greg Reiss -- Centenus -- Analyst

Okay. So it's like a wind farm was selected, you'd have to gross that up by like a 35% capacity factor.

Maria Pope -- President and Chief Executive Officer

Yes, I generally multiply by three.

Greg Reiss -- Centenus -- Analyst

Okay. Got you. Perfect. Thanks so much.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Thanks Greg.

Maria Pope -- President and Chief Executive Officer

Thank you.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

You know one other thing I want to mention is when we look at wind, during the summertime, we all have more thermal, so we can have reasonable wind during the summertime period and when you're looking at the expectations, keep in mind from a modeling perspective, from a recovery perspective, we look at a five-year average. So --

Maria Pope -- President and Chief Executive Officer

So these poor wind conditions actually roll into our average in the future.

Greg Reiss -- Centenus -- Analyst

Yes. Got you.

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

All right. Thanks Greg.

Maria Pope -- President and Chief Executive Officer

Thank you.

Greg Reiss -- Centenus -- Analyst

Thanks.

Operator

Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to Maria Pope for closing remarks.

Maria Pope -- President and Chief Executive Officer

Thank you. We very much appreciate your interest in Portland General Electric and we invite you to join us in August when we report our second quarter 2019 results. Have a great day and thank you again.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect.

Duration: 36 minutes

Call participants:

Christopher Liddle -- Director of Investor Relations and Treasury

Maria Pope -- President and Chief Executive Officer

James Lobdell -- Senior Vice President of Finance, Chief Financial Officer and Treasurer

Chris Turnure -- JP Morgan -- Analyst

Julien Dumoulin-Smith -- Bank of America -- Analyst

Insoo Kim -- Goldman Sachs -- Analyst

Paul Fremont -- Mizuho -- Analyst

Gregg Orrill -- UBS -- Analyst

Travis Miller -- MorningStar -- Analyst

Vedula Murti -- Avon Capital -- Analyst

Andrew Levi -- ExodusPoint -- Analyst

Greg Reiss -- Centenus -- Analyst

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