POR: NDR: HoldCo + RFP Could Move the CAGR Debate; Balance Sheet Looks More Fundable than Feared

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POR: NDR: HoldCo + RFP Could Move the CAGR Debate; Balance Sheet Looks More Fundable than Feared

Portland General Electric Company Equity Research

HoldCo / Funding Debate: HoldCo remains the obvious catalyst, but approval is not the whole

thesis. The process is moving toward an August 25 order if settlement is not reached, and the

remaining debate sounds focused on financial commitments rather than the structure itself. POR has

paused the Transco piece to prioritize HoldCo, but mgmt continues to view the structure as part of a

broader flexibility toolkit. We are not yet including HoldCo in our estimates, with a fuller update likely

closer to the order date.

The balance sheet gives POR more room than the stock implies. Our estimates show FFO/debt

improving from 18% in 2026 to 21% in 2027, 22% in 2028-2029 and 23% in 2030, while equity

capitalization moves from 48% in 2026 toward ~50%-51%. With the $550M forward already doing

real work, the question is how much incremental capital POR can add, not whether the base plan is

fundable.

The HoldCo + RFP scenario is the 2H debate. We look at a $2.5B RFP ownership case funded with

~$900M HoldCo debt, ~$600M JSNs, ~$800M OpCo debt and ~$200M OCF, with no common

equity. The ~$1.5B raised at HoldCo would be downstreamed to PGE as parent equity contribution,

supporting the OpCo equity ratio, while the JSNs receive partial rating-agency equity credit. This

structure does not remove financing cost, but it can remove the common equity overhang.

The EPS bridge is simple: incremental regulated NI less financing drag. We calculate gross

incremental NI as average incremental rate base x 50% regulatory equity ratio x 9.5% allowed ROE,

then subtract after-tax HoldCo debt interest, JSN cost and unrecovered OpCo interest. Under the