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Portland General Electric Co (NYSE:POR)
Q4 2019 Earnings Call
Feb 14, 2020, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, everyone, and welcome to the Portland General Electric Company's Fourth Quarter 2019 Earnings Results Conference Call. Today is Friday, February 14, 2020. [Operator Instructions]

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

Chris Liddle -- Director of Investor Relations and Treasury

Thank you, Jonathan. Good morning, everyone. I'm pleased you're able to join us today. Before we begin this morning, I'd like to remind you that we have prepared a presentation to supplement our discussion, which will be referencing throughout the call. The slides are available on our website at investors.portlandgeneral.com.

Referring to Slide 2, I'd 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 discussions today are Maria Pope, President and CEO; and Jim Lobdell, Senior Vice President of Finance, CFO and Treasurer. Following our prepared remarks, we will open the line for your questions.

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

Maria Pope -- President and Chief Executive Officer

Thank you, Chris, and good morning everyone. Welcome to Portland General Electric's 2019 earnings call. Today, I'll share an overview of our financial results. Earnings growth expectations, a regulatory update on our integrated resource plan and a summary of what we're seeing in the Oregon legislative session. Jim will provide more detail on our financial results, our outlook on 2020, and then we will address your questions.

Turning to Slide 4. In 2019, we recorded net income of $214 million or $2.39 per diluted share, compared with net income of $212 million or $2.37 in 2018. We finished the fourth quarter, earning $0.68 per diluted share, compared with $0.55 in the fourth quarter of 2018. The increase in earnings per share was driven by improved gross margin due to strong industrial demand and higher earnings from ongoing investments in our system. The higher gross margin was partially offset by higher operating expenses, including vegetation management and wildfire mitigation, which Jim will later describe.

Looking ahead, we are initiating 2020 full-year earnings guidance of $2.50 to $2.65 per diluted share. To provide more clarity on future growth, we're moving the time period associated with our long-term earnings guidance. We are now guiding to 4% to 6% earnings growth on average. In some years, as we experienced in 2019, our growth maybe below this range or as indicated by our 2020 guidance. We may have growth above the range.

On Slide 5, a few significant accomplishments this year include the ongoing reduction of carbon emissions in our power supply portfolio, with the construction of the Wheatridge renewable energy Boardman coal plant for closure. Both are on track and expected to be completed by the fourth quarter of this year. Additionally, in response to customers' overwhelming support of renewable energy, we launched our green future impact program. 17 large municipal and corporate customers will receive energy from this facility, the largest solar project to be built in Oregon. This program complements our IRP, plans for additional renewable procurement up to 150 average megawatts. We value the opportunity to partner with AvanGrid and expect the facility to be operational in 2021.

In 2019, we also continued investment in our system and focus on advancing communication network through our service territory and progressed on our previously announced integrated operation centers, laying the groundwork for our smart grid initiatives. And finally just yesterday, we received approval from the OPUC on our transportation electrification plan, which will enable further investments in electrification throughout our service territory.

Turning to Slide 6. The economic conditions and our service area remained strong. In 2019, Oregon ranked 10th for the rate of in-migration. This comes, excuse me -- when it comes to customer deliveries, a 6.7% increase in industrial deliveries was the major driver in 2019, offsetting downward pressure in energy efficiency on our residential and commercial deliveries. For 2020, we anticipate to deliver to our current high-tech customers will, again lead the way in our overall growth.

Now I'd like to briefly touch on legislative matters. The 2020 legislative session began this month, with renewed focus on regulating greenhouse gas emissions. We're supportive of legislation that accelerates our customers' interest to reduce carbon admissions, while not paying twice for the current renewable and clean energy trajectory that we are on. Additionally, we are supporting a few proposals to accelerate infrastructure investments enabling a clean and modern transportation system.

Turning to Slide 7. The regulatory process for our Integrated Resource Plan continues to progress, and we expect a final decision from the commission in mid-March or later. Regarding our renewable action plan we're focused on adding renewable resources of up to 150 average megawatts prior to the end of 2024. This reflects the recent extension of the federal production tax credit. In addition, we're targeting up to 600 megawatts of dispatchable capacity. We're currently engaged in bilateral contract negotiations with existing generators in the region to fill a portion of this need. As with past processes, we plan to initiate RFP design and the independent evaluator selection discussions with parties with the RFPs to follow.

And with that, thank you. And I'll hand it over to Jim.

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

Thank you, Maria. Turning to Slide 8, I'll start by walking you through the earnings drivers for 2019. First, gross margin increased earnings by $0.26 due to a $0.12 increase associated with additional investments to better serve our customers; $0.11 increase attributable to the net impact of decoupling as we experienced a decline in the average use per customer from our residential and commercial. Higher revenues due to increased industrial demand; a $0.03 net increase attributable to weather, which consisted of a $0.07 increase due to unfavorable weather in 2018; and a $0.04 decrease due to unfavorable weather in 2019.

Second a $0.09 decrease in earnings attributable to higher operating expenses consisting of a $0.13 decrease primarily attributable to cost associated with vegetation management, and wildlife mitigation efforts; a $0.05 decrease associated with IT and administrative and general expenses, primarily attributable to higher labor and employee benefits; and a $0.09 increase due to a change in year-over-year bad debt reserves. In 2018, we had recognized a one-time increase in bad debt reserves, as a result of the customer information system implementation; a $0.04 decrease associated with Carty, which consists of the net effect of a $0.10 tailwind from the cash settlement in the third quarter of 2018, which we did not -- which did not reoccur, and the $0.06 benefit from AvanGrid carrying and litigation costs recognized in the first half of 2019; a $0.02 decrease from higher depreciation and amortization expense resulting from capital additions; a $0.07 decrease associated with lower PTCs as wind underperformed for the year; and a $0.02 decrease from other miscellaneous expenses.

As we look ahead, each year we evaluate our cost structure to ensure that we are providing safe and reliable service to our customers, and to determine whether or not we will file for additional cost recovery. For a second consecutive year, we have seen opportunities to reduce costs and as a result have decided that we will not be filing a general rate case with the Oregon Public Utility Commission for a 2021 test year. We'll continue to reevaluate the need to file on an annual basis.

Moving to Slide 9. As Maria mentioned we're providing long-term earnings guidance of 4% to 6%. In addition, we are initiating full-year 2020 earnings guidance of $2.50 to $2.65 per diluted share, which assumes the following: an increase in retail deliveries between 0.5% to 1.5% weather-adjusted, this forecast reflects an increase in non-residential energy deliveries, driven primarily by high-tech manufacturing sector, as well as increases in residential deliveries from a growth in customer count.

Average hydro conditions for the year; wind generation for the year, based on five years of historical levels or forecasted studies when historical data is not available; normal thermal plant operations; operating and maintenance cost between $590 million and $610 million, during the year we'll begin the process of repurposing operating costs at our Boardman plant to offset inflationary increases elsewhere in the business, including costs associated with incremental vegetation management and wildfire mitigation, which we elevated during the second quarter of last year. This repurposing is an addition to other cost savings we have been able to achieve in the areas of field productivity, lower generating plant maintenance, IT and financing costs.

Next on guidance assumptions. We expect depreciation and amortization expense between $415 million and $435 million. We are also forecasting for the year an effective tax rate between 15% to 20%, and an average CWIP balance of $340 million, which includes Wheatridge and the integrated operating center. Finally, we expect cash from operations of $625 million to $675 million.

On to Slide 10. As we look forward to 2020, we continue to maintain a solid balance sheet, including strong liquidity and investment grade credit ratings. We expect to fund estimated capital requirements with cash from operations and the issuance of debt securities up to $400 million.

And now, operator, we're ready for questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of Julien Dumoulin from Bank of America. Your question please.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Good morning, guys. This is actually Ryan Greenwald on for Julien. Thanks for taking our questions.

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

Good morning, Ryan.

Maria Pope -- President and Chief Executive Officer

Good morning.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

So just to clarify, did you going to say that you guys are moving the base year for the 4% to 6% EPS growth?

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

We are keeping the base year for the 2018 through 2021, but we are signaling that on a forward-going basis, we are trying to achieve a 4% to 6% on average.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Got you. Helpful. And then on cost cuts, and how you're kind of thinking about that? Can you just provide a little more color into 2020 here. Given the lack of the rate case?

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

Well, as I mentioned, we are looking across the organization. We have made great strides in the IT department and the field, as far as our effectiveness, our ability to have full schedules associated with our crews. We are repurposing as I've mentioned the Boardman, O&M dollars that will be no longer necessary as we move toward decommissioning that plant. That will help us cover some of the other costs associated with inflationary challenges that we'll have as we move through the year. That's just a small sample of the things that we're working across the entire organization to better prove our efficiency.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Got it. And then lastly, you guys aren't thinking about any equity issuances, right?

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

No. No. An equity issuance would be tied to a major asset purchase or build. Otherwise, we don't see that necessary.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Got it. Thanks guys.

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

Thanks, Ryan.

Operator

Thank you. Our next question comes from the line of Brian Russo from Sidoti. Yes, your question please.

Brian Russo -- Sidoti & Company -- Analyst

Hi, good question.

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

Hey, good morning, Brian.

Maria Pope -- President and Chief Executive Officer

Good morning.

Brian Russo -- Sidoti & Company -- Analyst

Hey, could you just elaborate on your comment on repurposing Boardman costs. If Boardman plant expect to retire at the end of 2020. So those cost savings would begin in 2021? Are you accelerating those savings into '20 to manage O&M? Just a little more insight there?

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

Yes. We're having a little bit of troubling, but hearing you, Brian. But I got your question. On Boardman, Boardman is going to be going out toward the end of 2020, we've already started down the road of some decommissioning activities associated with it. We'll stop taking coal toward the fourth quarter of the year. And because of these activities, that will allow us to repurpose some of the O&M dollars associated with that facility.

Brian Russo -- Sidoti & Company -- Analyst

Got it.

Maria Pope -- President and Chief Executive Officer

We have engaged Boardman ceasing coal-fired operations for some time and have a really thoughtful glide path that we'll be pursuing for the balance of the year into next.

Brian Russo -- Sidoti & Company -- Analyst

Okay, understood. And what was the PCAM balance at year-end 2019?

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

We were above the baseline by $5 million. We just -- water and wind were the challenge this year.

Brian Russo -- Sidoti & Company -- Analyst

Okay. And I know it's early on in the 2020 hydro season, but any early look on what you're seeing with your hydro facilities?

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

The mid-Columbia is up this year. It's almost like a flip from last year. Last year we saw that the in state hydro resources were higher than the mid-Columbia. Right now, it's the opposite, the mid-Columbia is up over closer to a 100% and the in states down. So we still have a lot more weather to go. We're only in the first part of February. And as we know in Oregon anything can happen between now and the end of March.

Maria Pope -- President and Chief Executive Officer

Yes, I would emphasize Jim's caution. We're having very modest temperatures right now for winter period of time. Low precipitation. And so while the numbers appear to be good, we're very cautious for the balance of the year, and particularly for hydro, but also for wind and for load.

Brian Russo -- Sidoti & Company -- Analyst

Okay, thank you very much.

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

Thanks, Brian.

Operator

Thank you. Our next question comes from the line of Agostina Colaizzo from Mizuho. Your question please.

Agostina Colaizzo -- Mizuho Securities -- Analyst

Hi guys.

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

Good morning.

Agostina Colaizzo -- Mizuho Securities -- Analyst

Just wanted to know -- good morning, how are you?

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

Great.

Agostina Colaizzo -- Mizuho Securities -- Analyst

So just -- great. So just wanted to know or get a better sense about what would be the main drivers of -- just like the overall growth in terms of you guys being at the 4% or 6% growth rate?

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

Well, the range is 4% to 6%, and I think as Maria was talking about earlier. We have a strong economy here in Oregon and that's really a driving factor along with Wheatridge is on track. As we mentioned the Boardman, that gives us an opportunity to repurpose some of the expenses there to help cover others. And then we've got other cost reductions along with the fact that we are seeing strong growth in the high-tech and digital services in our service territory.

Agostina Colaizzo -- Mizuho Securities -- Analyst

Perfect. Super clear. Great, that's it.

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

All right. Thanks, Agostina.

Agostina Colaizzo -- Mizuho Securities -- Analyst

Bye-bye.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Travis Miller from Morningstar. Your question please.

Travis Miller -- Morningstar -- Analyst

Good morning. Thank you.

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

Good morning, Travis.

Maria Pope -- President and Chief Executive Officer

Good morning.

Travis Miller -- Morningstar -- Analyst

I just wonder on the IRP timing, would that have any, suspecting not, but timing have anything to do with 2020 earnings or growth? And then when would any kind of impact from that IRP potentially impact that 4% to 6% growth?

Maria Pope -- President and Chief Executive Officer

Sure. So the IRP process. First of all, we are hoping to get acknowledgment mid-March. It could be later. And then we will pursue RFPs and selection of an independent evaluator, and all of the processes with stakeholders that go along with that. On the renewable side, we indicated that we could seek procurement as late a 2024 or in service as late as 2024, given the extension of the production tax credit. However, that window is between now and then, and we would hope to be able to move faster. Our customers, as indicated by our green future impact products, as well as others are very interested in seeing us move faster with regards to non-carbon resources.

Travis Miller -- Morningstar -- Analyst

Does that suggest then more investment opportunities for you? Or more just power purchase agreements and such?

Maria Pope -- President and Chief Executive Officer

So we take the lease cost, least risk proposals that come our way, we work with an independent valuator in determining that, and we'll have fully transparent and open process as we move through this next year and into 2021.

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

Yes. Right now, Travis, it's impossible to tell because it's -- we're going to look at everything that comes through the door.

Travis Miller -- Morningstar -- Analyst

Okay, OK. And then it's kind of a lot wrapped into this question, but I was wondering if you could talk a little more about that AvanGrid deal. And kind of how that's going into this green future impact program, the growth there? What does that mean for you guys on the financial side and then also just the whole idea of getting to more renewable energy in the state. There's a lot in there, but that AvanGrid deal and the green future impact. And the -- interesting to hear more about?

Maria Pope -- President and Chief Executive Officer

Sure. Well, first of all, this is a announcement that we made yesterday, it's a 162 megawatt project on a nameplate basis, located in Gilliam County, Oregon, which is just east of The Dalles. The expected output is about 47 average megawatts, you know, it's a traditional PPA, but we'll meet the needs through our ourselves for some of our largest municipal and corporate customers, who wanted to go 100% green faster than our renewable portfolio of standards. So in many ways, I sort of think of this is a top-up program that will give them opportunity to buy additional solar in addition to the 40% or wherever they want to be in that purchase program, and it varies customer by customer to enable them to be a 100% green faster than our current trajectory.

So we are very much looking forward to working with AvanGrid on this. It's something we've been working with customers for sometime on. And there is also a second phase to the project, as well that we will continue having discussions with Oregon Public Utility Commission and with others. Jim, you want to go over any other details?

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

Yes, the only other thing I'd add, Travis. As you think about this particular project in context of our IRP that it does not change what we're asking for in our IRP, in our action plan.

Maria Pope -- President and Chief Executive Officer

No, I would say it's very important to stakeholders that this -- that anything that we do for specific customer's that is above and beyond our RPS standards and what we're achieving through IRPs is incremental.

Travis Miller -- Morningstar -- Analyst

Okay. Okay. And then do you have the percent of load, I guess, served by that green future impact, and any kind of thoughts on where that might be going? Is that an appropriate way to measure that green future impact?

Maria Pope -- President and Chief Executive Officer

Yes, it's not going to have a material impact on our overall load.

Travis Miller -- Morningstar -- Analyst

Okay. It's not a material share?

Maria Pope -- President and Chief Executive Officer

Yes. It's 47 average megawatt.

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

Out of an average of about 2,300.

Maria Pope -- President and Chief Executive Officer

Yes, 2,300.

Travis Miller -- Morningstar -- Analyst

No, I was just talking about the whole program, right now, in terms of numbers of megawatt or hours.

Maria Pope -- President and Chief Executive Officer

That's the program that we currently have with contracts that negotiated, we're in the discussions with regards to next phases, and I think it would be too premature to speculate on that. We are seeing interest from some large digital and high-tech companies, which could make that larger, but we will have to take that on a, sort of, project by project or customer by customer basis.

Travis Miller -- Morningstar -- Analyst

Okay. Great, thanks so much.

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

Thanks, Travis.

Operator

Thank you. Our next question comes from the line of Sophie Karp from KeyBanc. Your question please.

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

Good morning, Sophie.

Sophie Karp -- KeyBanc Capital Markets -- Analyst

Hi, good morning. How are you?

Maria Pope -- President and Chief Executive Officer

Good morning.

Sophie Karp -- KeyBanc Capital Markets -- Analyst

I was wondering, if we could chat a little bit more about the comments on the IRP, and it seems like you guys have a decent, by contemporary standards, loan growth in the state. So against that, we are seeing cost, delays, some of the acquisitions of renewable assets. And granted, this is longer term, maybe it's too early to talk about that. But how should we think about the cadence of your renewable procurement and the puts and takes on your earnings going forward?

Maria Pope -- President and Chief Executive Officer

So our integrated resource plan calls for up to an addition of about 150 average megawatts of renewables and 600 megawatts of capacity. We will go through the process as we have in the past, it will be fairly public. The first is to get the acknowledgment of the IRP, and then we'll begin talking with stakeholders about how we're doing this procurement. Looking at RFPs, looking at an independent evaluator, and we'll be doing that work through 2020, and hope to move expeditiously.

In addition we're already having some discussions with existing capacity providers. All of the capacity we're looking for is non-emitting capacity at this point in time. And we will update you at future calls as we have information that it will be material.

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

Sophie, one other thing you need to keep in mind is that we're going to be following the stair steps associated with renewable portfolio standard, which says in 2025 it's 27% of our retail load needs to be served. By 2030, it's 35%. 45% in 2035. And eventually 50% by 2040.

Sophie Karp -- KeyBanc Capital Markets -- Analyst

Got it. And then another question that I had, is there something that we should be watching with respect to legislative session in Oregon this year. How is that shaping up so far?

Maria Pope -- President and Chief Executive Officer

Certainly. So we have had a fairly consensus legislative session, and that would have followed from last year's tension. The issues that really are around cap and trade, it's complex, it's changing all the time, it's short session. And so the session will be finished in early March. We -- as I noted in my remarks, are supportive of cap and trade legislation that supports our customers' interests in moving to a low-carbon energy future. But also ensuring that customers do not pay twice, since we're already bringing on our current renewable projects, as we've discussed in the call, as well as the trajectory that Jim just outlined.

Sophie Karp -- KeyBanc Capital Markets -- Analyst

Do you think we're going to see something done in this session?

Maria Pope -- President and Chief Executive Officer

We are hopeful, but I would say that it's too early to call, and anything can happen. So we remain very hopeful.

Sophie Karp -- KeyBanc Capital Markets -- Analyst

Got it. Thank you. That's all from me.

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

Thank you, Sophie.

Operator

Thank you. Our next question is a follow-up from the line of Julien Dumoulin-Smith from Bank of America.

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

See you again, Ryan.

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

Hey -- no, it's Julien [Indecipherable] I just wanted to clarify the earlier response. What is the reasoning behind the pivoting in the growth rate. I just want to understand -- I understand that the capex can be bulky at times, and so therefore lumpy rather. And so, therefore, it might not necessarily enable a smooth trajectory. I understand certain years you may or may not be filing a rate case. But I want to hear from you guys exactly what the reasoning is behind the slight pivot here? And if there's anything specific that you might be otherwise alluding to?

Maria Pope -- President and Chief Executive Officer

So let me let Jim address this. But first, please know that we are being responsive to investors' interests for more visibility, and we've heard your requests for that, Jim?

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

Yes. Julien, we've taken that limiter off of 2018 through 2021 and just saying, on long-term basis, this is our objective. Again as I had mentioned previously we're looking at a strong economy in Oregon. We continue to have a lot of in-migration into the state, continuing, excuse me, continuing to have a lot of load growth in the high tech sector out there, we actually had a paper company come back online in the service territory. We've got a lot of cost saving efforts that we've got going on inside the company, they're really showing a lot of promise. And when you start adding all of these things up, I think we are really turning in the right direction. And that gave us a lot more confidence in putting out that type of guidance.

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

Got it. So this is more about a post '21 outlook that it is saying anything specific to any given year, right?

Maria Pope -- President and Chief Executive Officer

Absolutely. Sometimes will be higher, and sometimes will be lower, but this is where we're looking toward the long-term future.

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

Got it. And since we're talking about '21 and the outlook through '21. I know, we're talking about cost cuts in '20 and then '21 on the subsequent question. I suspect that why you're not giving guidance for say, that you still feel confident in being able to achieve that compounded growth rate off '18 into '21, given what you know today given your cost trajectory, your rate case decisions, etc, right?

Maria Pope -- President and Chief Executive Officer

Yes. And please know that we're working across our company to be more efficient and effective and to serve customers' needs, as those accelerate not only for green energy, but for responsiveness and services that are commensurate with industries outside of the utility business.

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

Excellent. All right, thank you all very much. I appreciate the clarification.

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

Thanks, Julien.

Operator

Thank you. Our next question comes from the line of the Vedula Murti from Avon Capital. Your question please.

Vedula Murti -- Avon Capital -- Analyst

Good morning.

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

Good morning, Vedula.

Maria Pope -- President and Chief Executive Officer

Good morning.

Vedula Murti -- Avon Capital -- Analyst

Okay. Not to beat the dead horse here. Just so I understand, kind of, what we were just discussing with Julien is basically the idea that having set out the parameters for '18 through '21 that the 4% to 6% type of compound growth rate is now kind of being targeted by post '21 as well going forward?

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

Yes.

Vedula Murti -- Avon Capital -- Analyst

Okay. Secondarily you mentioned one of your slides here about the 1Q approval of the transportation electrification plan. Can you give us a sense as to the potential capital dollars, that would be -- that could be associated with that over say reasonable planning period and weather and I doesn't -- I'm not sure that there is a whole lot associated with that, that would be in the capex plan currently?

Maria Pope -- President and Chief Executive Officer

Sir, that's a great question. And this was something that was just approved yesterday and we're very pleased that it really focuses on physical infrastructure, customer service, supply energy management, our distribution operation and demand reliability management. As you know, this is an area that is very new and it's hard to forecast. We could see a need over the long-term for upwards of 5,000 new charging ports, as well as other infrastructure. But in the near-term, we're probably looking at fairly modest growth, maybe ballpark $100 million over about a five year time period. So, it's really around supporting the transformation of this sector in Oregon, transportation is the largest emitter of greenhouse gases, and we already are working very closely with a number of partners.

In particular, TriMet, which is one of the larger transit authorities in the country is working very closely with us. There are some existing bus reps, as well as could govern some of their bus depots, and we have a number of other partnerships with municipalities and others, advancing charging infrastructure and working closely with them.

Vedula Murti -- Avon Capital -- Analyst

Okay. And with the IRP then going to the RFP, when the request for proposal go out, at least my recollection in the past is that you have self-build own options that you propose along with obviously third-parties that the independent evaluator will then assess. And in the past, I think you've indicated that there are structural disadvantages for you being the incumbent utility in regards to tax attributions and things of that nature that usually tend to favor the third-parties with regards to the ultimate selection at the end of the RFP? Is there anything that's -- that might be different this time or that could -- or anything unique that might be more advantageous to you this time?

Maria Pope -- President and Chief Executive Officer

So it's just too early to tell. I think in your comments, there's just a lot of speculation in there. We'll go through a open and transparent process with the PUC. We'll work with an independent evaluator. And if we put in a bid, we will hope that it will be competitive. We have a good track record, but it's important that we have the lowest-cost, least-risk projects into our customers' portfolio.

Vedula Murti -- Avon Capital -- Analyst

And just -- I think you answered this earlier. But when will the final outcome of the RFP and the actual selection be announced? Is it around the end of the year?

Maria Pope -- President and Chief Executive Officer

Again, it's just too early to speculate on that. But, thank you for your questions.

Vedula Murti -- Avon Capital -- Analyst

Thank you.

Operator

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Maria Pope for any further remarks.

Maria Pope -- President and Chief Executive Officer

Thank you. We appreciate your questions and interest in joining us for today's call. We invite you to join us in April for Portland General Electric's First Quarter 2020 Results. Thank you.

Operator

[Operator Closing Remarks]

Duration: 35 minutes

Call participants:

Chris 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

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Brian Russo -- Sidoti & Company -- Analyst

Agostina Colaizzo -- Mizuho Securities -- Analyst

Travis Miller -- Morningstar -- Analyst

Sophie Karp -- KeyBanc Capital Markets -- Analyst

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

Vedula Murti -- Avon Capital -- Analyst

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