Portland General Electric Co · NYSE:POR
Portland General Electric — Investor Presentation (August 2012)
46 slides from Portland General Electric's investor presentation, Aug 13, 2012
Slide 1: Investor Presentation August 2012
Investor Presentation August 2012 1 Exhibit 99.1
Slide 2: Cautionary Statement
Cautionary Statement Information Current as of August 7, 2012 Except as expressly noted, the information in this presentation is current as of August 7, 2012 — the date on which PGE filed its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 — and should not be relied upon a
Slide 3: PGE Value Drivers
PGE Value Drivers 3 • Solid utility operations • Strong financial position • Growth in service territory • Clear focus, 100% regulated utility • Net-short utility, need for new generation • Multiple opportunities for rate base growth • Progressive environmental position
Slide 4: PGE Investment Thesis: Strong Platform. Positioned for Sustained Growth.
P G E I N V E S T M E N T T H E S I S Strong Platform. Positioned for Sustained Growth. The Company The Strengths The Growth 4
Slide 5: PGE At A Glance
Vertically integrated – generation, transmission and distribution Market cap >$2B Service area in northwest Oregon – includes Portland and Salem – 828,000 customers(1) – 50% of Oregonians depend on PGE for electricity – 75% of Oregon’s commercial and industrial activity Gas Hydro Coal Wind Ser
Slide 6: Attractive, Growing Service Territory
Attractive, Growing Service Territory 18.5 18.6 18.8 2010 2011 2012E • Long term forecast >1% annually through 2030 1) Population growth based on data from The Oregon Office of Economic Analysis (OEA) 2) Adjusted for weather and certain industrial customers; 2012E assumes 1% load growth over 2011 le
Slide 7: History of Successful Execution of Capital Projects
History of Successful Execution of Capital Projects Recent Capital Projects Average Rate Base $1,939 $2,381 $2,425 $2,863 $3,152 2007 2008 2009 2010 2011 Biglow Canyon Wind Farm (2007-2010) ‒ Three phase build-out; $960 million Smart Meters (2008-2010) ‒ 825,000 meters installed; $145 million
Slide 8: PGE Today: Ready for the Next Growth Phase
P G E T O D A Y Ready for the Next Growth Phase 2006 – 2010 2011 – 2012 2013+ Grew business and built solid platform Transition – preparing for next growth phase Strong, sustainable growth 8
Slide 9: PGE Investment Thesis: The Company
The Company P G E I N V E S T M E N T T H E S I S Strong Platform. Positioned for Sustained Growth. The Strengths The Growth 9
Slide 10: Key Strengths
Key Strengths 1 Diversified customer base and generation portfolio 2 High quality utility operations 3 High customer satisfaction rate 4 Solid performance record 5 Strong balance sheet and financial resources 10
Slide 11: Diversified Customer Base and Generation Portfolio
1. Diversified Customer Base and Generation Portfolio Power Sources as a Percent of Retail Load Per the 2012 AUT(1) Residential 50% Commercial 37% Industrial 13% Retail Revenues by Customer (2011) Total = $1.7B 1) Annual Update Tariff Hydro and wind/solar include PGE owned and contracted resources;
Slide 12: High Quality Utility Operations
2. High Quality Utility Operations Highly reliable generation portfolio with 93% availability in 2011 Ongoing T&D investment to ensure high levels of reliability and customer satisfaction Strong power supply operations to stabilize and optimize power costs Progressive approach to reduce coal
Slide 13: High Customer Satisfaction
Top Decile 3. High Customer Satisfaction No. 2 In the West for general business satisfaction Investor-owned utility in the nation for residential customer satisfaction Nationally among large key customers for satisfaction JD Power & Associates JD Power & Associates TQS Research, Inc. No. 1 All custo
Slide 14: Solid Earnings
4. Solid Earnings 8.0% 9.0% 2010 2011 2012E $125 $147 $140- 151(1) 2010 2011 2012E ROE Net Income ($M) $1.66 $1.95 $1.85- 2.00(1) 2010 2011 2012E EPS (Diluted) Reduced gap between actual ROE and allowed ROE of 10% 14 1) Based on guidance range, as most recently reaffirmed on August 7, 2012 8.2- 9.0%
Slide 15: Continuous Dividend Growth
4. Continuous Dividend Growth $0.92 $0.96 $1.00 $1.03 $1.05 $1.07 2007 2008 2009 2010 2011 2012 3.1% CAGR Target Payout Ratio of 50 to 70% Note: Represents annual dividends paid 15
Slide 16: Strong Balance Sheet and Financial Resources
5. Strong Balance Sheet and Financial Resources $660 $115 $74 Total Credit Facilities Letters of Credit Cash Investment grade ratings of BBB and Baa2 Manageable debt maturities – weighted average 15.5 years Target capital structure of 50% debt, 50% equity 2012 capital expenditures of $320M,
Slide 17: PGE Investment Thesis: The Growth
P G E I N V E S T M E N T T H E S I S Strong Platform. Positioned for Sustained Growth. The Company The Strengths The Growth 17
Slide 18: Demand Exceeds Generation Resources
0 500 1000 1500 2000 2500 3000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Future Generation Need 2015 shortfall 513 MWa MWa Long-Term Contracts PGE Generation 1) Load-Resource Forecast Data from 2011 IRP Update, filed with the OPUC on 11/23/2011; shortfall is net of energy efficiency Load-Res
Slide 19: Potential Opportunities for Rate Base Growth
Potential Opportunities for Rate Base Growth $3.1B (1) Average Rate Base 2011 2016-2017 1 2 4 New peaking capacity New base load energy Cascade Crossing 3 5 New renewable energy 19 1) Rate base growth dependent on outcome of RFP processes; PGE is committed to move forward with the least cost, least
Slide 20: New Peaking Capacity
1. New Peaking Capacity Resource Requirement 200 MW year-round flexible resource 200 MW bi-seasonal (winter and summer) peaker 150 MW winter-only peaker Specifications Bidders can submit a PPA, build own transfer or asset purchase agreement of an existing facility Port Westward 2 submitted
Slide 21: New Base Load Energy Resource
2. New Base Load Energy Resource Requirement 300-500 MW base load energy resource Specifications Bidders can submit a PPA, build own transfer or asset purchase agreement of an existing facility Carty I submitted as PGE’s benchmark bid Bidders can also submit projects on PGE’s benchmark site
Slide 22: New Renewable Energy Resource
3. New Renewable Energy Resource Requirement 100 MWa resource(1) Specifications To meet Oregon’s Renewable Energy Standard of 15% by 2015 – wind, solar, biomass or other Bidders can submit a PPA, build own transfer or asset purchase agreement of an existing facility Benchmark bid will be sub
Slide 23: Cascade Crossing Transmission Project
Requirement 500 kV line, approximately 215 miles Specifications Path from Eastern Oregon to Salem, south of Portland Connect Boardman, Coyote Springs, and potential new projects to service territory Provide transmission access for new potential wind resources Improve regional grid reliabil
Slide 24: Potential Capital Projects Timeline
Potential Capital Projects Timeline 24 (in millions) 2012 2013 2014 2015 2016 2017 Capacity Resource $250-$350 Energy Resource $550-$700 Renewable Resource $700-$850 Cascade Crossing $800-$1,000 Base Capital Spending(1) $325 $300 $275 $275 $350 $375 1) Includes ongoing capital expenditures, hydro re
Slide 25: Portland General Electric 5-Year Outlook
Portland General Electric 5-Year Outlook Strong balance sheet Continued EPS growth Solid growth in customer demand 25 Potential rate base growth of $2B
Slide 26: Summary
S U M M A R Y Strong Platform. Positioned for Sustained Growth. The Growth Multiple growth opportunities • Capacity, energy, renewables and transmission • >$2B potential rate base growth 26 The Strengths Solid platform • Operational excellence, high customer satisfaction and strong financial positio
Slide 27: Portland General Electric Appendices
Portland General Electric Appendices 27
Slide 28: Appendices
Appendices 1. Financials 2. Resource planning 3. Regulatory environment 4. Business initiatives – details 28
Slide 29: YTD 2012 Financial Results
YTD 2012 Financial Results 29 Net Income Earnings per Share (in millions) 2011 2012 2011 2012 Q1 $69 $49 $0.92 $0.65 Q2 $22 $26 $0.29 $0.34 YTD $91 $75 $1.21 $0.99 $463 $462 $390 $394 2011 2012 Q2 Q1 $853 $856 YTD Q2 Retail Revenues (in millions) Q2 2012 0.5% YTD Q2 2012 1.0% Full Year 2012 Forecast
Slide 30: Appendices
Appendices 1. Financials 2. Resource planning 3. Regulatory environment 4. Business initiatives – details 30
Slide 31: Resource Mix
1) Capacity of a given plant represents the megawatts the plant is capable of generating under normal operating conditions, net of electricity used in the operation of the plant 2) Wind generation from contracts and Biglow Canyon is expressed in average megawatts; Biglow’s capacity reflects the weig
Slide 32: Business Growth: Integrated Resource Plan
Business Growth: Integrated Resource Plan Integrated Resource Planning Process Under OPUC guidelines, PGE is required to file an Integrated Resource Plan within two years of acknowledgment of the previous plan The IRP requires that the primary goal must be the selection of a portfolio of resourc
Slide 33: Energy Load-Resource Balance
Energy Load-Resource Balance 0 500 1000 1500 2000 2500 3000 3500 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 A n n u al A v e rage A v ai labili ty ( M W a ) Long-term Contracts 632 MWa (513 MWa after EE) Retail load before EE (excl. 5-year opt-outs) Coal – Boardman Natural Gas – Port Westward
Slide 34: Energy Action Plan
Energy Action Plan 1) Up to 100 MWa; actual purchases will depend on balancing needs; total might not foot due to rounding PGE Load With EE Savings 2,620 Remove 5-year Opt-Outs -128 Existing PGE & Contract Resources -1,860 PGE Resource Target 632 Resource Actions Thermal: CCCT 406 Combined Heat & Po
Slide 35: Capacity Load-Resource Balance
Capacity Load-Resource Balance 0 1000 2000 3000 4000 5000 6000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 A v ai lable Capacit y ( M W ) Load-Resource Balance (2012-2021) Winter Capacity Long-Term Contracts & DSG 2015 Shortfall 1,409 before EE 1,233 after EE Peak Hour Load after EE + Reserves
Slide 36: Capacity Action Plan
1) Approx. 6% of generation; excludes reserves for action plan acquisitions 2) 6% of PGE net system load excluding 5-year opt-outs. Total might not foot due to rounding Capacity Action Plan PGE Load with EE Savings Remove 5-year Opt-Outs Operating Reserves(1) Contingency Reserves(2) Existing PGE & C
Slide 37: Appendices
Appendices 1. Financials 2. Resource planning 3. Regulatory environment 4. Business initiatives – details 37
Slide 38: Regulatory Environment
Regulatory Environment Oregon Public Utility Commission – Governor-appointed Commission with staggered four-year terms (John Savage 3/2013, Stephen Bloom 12/2015, Susan Ackerman (chair) 3/2016) Return on Equity & Capital Structure – 10.0% allowed return on equity – 50% debt and 50% equity capita
Slide 39: Recovery of Power Costs
Recovery of Power Costs • Annual reset of rates based on forecast of net variable power costs (NVPC) for the coming year • Subject to OPUC prudency review and approval, new prices go into effect on or around January 1 of the following year • PGE absorbs 100% of the costs/benefits within the deadband
Slide 40: Additional Renewable Resources
Additional Renewable Resources Integrated Resource Plan addresses procurement of wind or other renewable resources to meet requirements of Oregon’s Renewable Energy Standard by 2015. Such need is now approximately 100 MWa (or 300 MW wind nameplate capacity) Year Renewable Target 2011 5% 2015 15% 202
Slide 41: Decoupling Mechanism
The decoupling mechanism is intended to allow recovery of margin lost due to a reduction in sales of electricity resulting from customers’ energy efficiency and conservation efforts Includes a Sales Normalization Adjustment mechanism (SNA) for residential and small non- residential customers (≤ 30 k
Slide 42: Appendices
Appendices 1. Financials 2. Resource planning 3. Regulatory environment 4. Business initiatives – details 42
Slide 43: Boardman 2020 Emissions Controls
Boardman 2020 Emissions Controls Emissions Controls at the Boardman Plant In December 2010, the Oregon Environmental Quality Commission (OEQC) approved revised Best Available Retrofit Technology (BART) rules June 2011, EPA approved revised rules, which were published in the Federal Register in J
Slide 44: Cost Efficiency Initiatives
Cost Efficiency Initiatives 44 Company-wide benchmarking to identify best practices and standards 2020 Vision Technology Upgrades – Financial system and supply chain replacement project – Timekeeping System – Enterprise Asset Management • Transmission & Distribution • Generation • Information Te
Slide 45: Smart Meter Project
Smart Meter Project Smart Meters Provide two-way communications with residential and commercial customers Vendor: Sensus Technology: FlexNet radio frequency technology Completed installation of 825,000 meters as of December 31, 2010 Capital costs: $145 million OPUC approved limited term
Slide 46: Biglow Canyon Wind Farm
Biglow Canyon Wind Farm Columbia Gorge, eastern Oregon 450 MW total nameplate capacity Total cost approximately $1B Phase I Phase II Phase III Nameplate Capacity 125 MW, 76 turbines 150 MW, 65 turbines 175 MW, 76 turbines MW per unit 1.65 Megawatts 2.3 Megawatts 2.3 Megawatts Cost (w/AFDC) $25
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