Portland General Electric Co · NYSE:POR
Portland General Electric — Corporate Update (March 2010)
54 slides from Portland General Electric's corporate update, Mar 15, 2010
Slide 1: 2009 Integrated Resource Plan: Boardman 2020 Alternative
2009 Integrated Resource Plan Boardman 2020 Alternative March 15, 2010 1 Copyright © 2010 Portland General Electric. All Rights Reserved.
Slide 2: 2020 Vision for Boardman
2020 Vision for Boardman A 2020 plan for Boardman would be the most sustainable option for Oregon and our customers: The 2020 plan balances cost and risk, as well as impacts to the environment, Boardman community and employees. Saves customers about $200 million ($2009) NPVRR through 2040. Saves cus
Slide 3: US Coal Fleet Heat Rate
US Coal Fleet Heat Rate* 50,000 45,000 Boardman 40,000 35,000 MMBTU / MWH 30,000 25,000 20,000 15,000 10,000 5,000 1 29 57 85 113 141 169 197 225 253 281 309 337 365 393 421 449 # of Plants Source: 2000-2007 Average, SNL Financial Database *Chart shows overall efficiency at 499 of the 533 U.S. coal
Slide 4: PGE Resource Needs – Energy
PGE Resource Needs – Energy Load-Resource Balance 2010-2020 3500 Existing Existingresource resource need needreflects reflectsload load 3000 growth, growth, expiringlong expiring long term contracts, and term contracts, and Retail Load RES RESrequirements. requirements. 2500 2015 Shortfalls Annual A
Slide 5: Proposed Action Plan
Proposed Action Plan Key Proposed Resource Actions: Acquire 122 MWa of Renewable Energy Standard (RES) compliant renewables Meets 2015 Oregon RES compliance Found reasonable by OPUC in 2007 IRP 214 MWa of EE by 2015 300-500 MW High Efficiency Combined Cycle Gas Plant Up to 200 MW of flexible gas cap
Slide 6: Challenges
Challenges A workable alternative operating plan for Boardman must address: Regional Haze rules / BART requirements Potential National Emission Standards for Hazardous Air Pollutants (NESHAP) Maximum Achievable Control Technology (MACT) requirements Pending Sierra Club litigation IRP requirements Co
Slide 7: DEQ / EPA - Regional Haze Program
DEQ / EPA - Regional Haze Program Federal Program Regional Haze Rule adopted July 1999 Objective: Return visibility to natural background level by 2064 States must submit and periodically update implementation plans Oregon’s Regional Haze Plan Identifies pollutants and sources causing haze Describes
Slide 8: Objective of Regional Haze Plan
Objective of Regional Haze Plan Class I Area 17 16 15 20% Worst Days 14 13 12 Reas onab Deciview - dv 11 le P ro g ress 10 Glid epat 9 First h 8 Planning 7 “Natural Period 6 Conditions” 5 4 20% Best Days No Degradation 3 2 1 0 2000-04 2018 Milestone 2064 Baseline Year 810
Slide 9: BART Basics
BART BASICS BART is “Best Available Retrofit Technology” BART applies to: Major sources > 250 tons per year of any haze pollutant Construction commenced 1962-1977 26 source categories, including Electric Generating Units & industrial boilers, kraft pulp mills, and refineries BART is determined on ca
Slide 10: Regulated Haze Emissions
5 Regulated Haze Emissions Ammonium Sulfate: SO2 + ammonia, from combustion of fuels containing sulfur Ammonium Nitrate: NOx + ammonia, from high temperature combustion processes Organic and Elemental Carbon: mostly combustion due to fire (wildfire + forest, agricultural, other controlled burning, a
Slide 11: Boardman BART / RP Required Controls
Boardman BART / RP Required Controls June 19, 2009 EQC adopted Boardman Regional Haze Rule requirements Best Available Retrofit Technology (BART) Requirement: NOx (Low NOx Burner & Over Fire Air) 0.23 lb/mmBtu by 2011 SNCR contingency by 2014 SO2 (Semi-Dry Scrubber) 0.12 lb/mmBtu by 2014 PM (Bag Hou
Slide 12: Proposed Revision to BART – BART II
Proposed Revision to BART – “BART II” Submittal of a new BART application considering all possible alternatives including an early shut down (2020 option) with the following controls: NOx: 0.23 lb/mmBtu by 2011 Combustion controls (Low NOx Burner, Over Fire Air) SNCR contingency by 2014 SO2 Investig
Slide 13: Comparison of existing vs. proposed BART rule
Comparison of existing vs. proposed BART rule Current Rule Proposed Revision Current Controls Constituent Emissions1 Emissions* Cost** Schedule Emissions* Cost** Schedule Low-NOx Burner/ OFA NOx 0.45 0.23 $32.8 Million Jul-11 0.23 $32.8 Million Jul-11 Scrubber/Bag House SO2 0.61 0.12 $289 Million Ju
Slide 14: National Emissions Standards
National Emissions Standards Recent D.C. Circuit court case established that EPA is required by the Clean Air Act to promulgate National Emission Standards for Hazardous Air Pollutants (NESHAPs) for Electrical Generating Units (EGUs). Rulemaking timeline is set in the consent decree that becomes eff
Slide 15: MACT Timeline – Published Consent Decree
MACT Timeline – Published Consent Decree January 2010: Information Collection Requests (ICRs) - §114 letters sent to utilities Through Sept. 2010: Fuel and Stack sampling data collected/submitted to EPA on a phased schedule Early / mid-Dec. 2010: Rule package to OMB (90 day review period) March 16,
Slide 16: MACT - Regulatory & Legislative Approach
MACT - Regulatory & Legislative Approach Regulatory Approach Examining DEQ and EPA roles in NESHAPs determination and compliance requirements Advocacy in NESHPAs Rulemaking Process re: Plants with Early Closure Legislative Approach Bingaman Energy Bill Climate Bill Multi-pollutant Bill 16
Slide 17: Sierra Club Lawsuit
Sierra Club Lawsuit Plaintiffs are Sierra Club, Northwest Environmental Defense Center, Friends of the Columbia Gorge, Columbia Riverkeeper, and Hells Canyon Preservation Council Complaint alleged violations of federal Clean Air Act (CAA), Oregon’s State Implementation Plan (SIP) at Boardman, the Pl
Slide 18: IRP Objective
IRP Objective The primary goal of the IRP is to identify a resource action plan, that when considered with our existing portfolio, provides the best combination of expected cost and associated risks and uncertainties for the utility and its customers. 18
Slide 19: Modeling Updates
Modeling Updates Deterministic Update: Added 2020 portfolio Includes bridge PPA from 2017 to 2020 Stochastic Updates: Changed inputs for natural gas prices from real $ to nominal $ Results in higher TailVar and year-to-year variation for portfolios Relatively little impact on TailVar less mean Model
Slide 20: Modeling Updates
Modeling Updates Loss of Load Probability (LOLP) / Expected Unserved Energy (EUE) Updates: Set thermal plant scheduled maintenance to zero Assumes replacement supply procured well in advance for maintenance outages Constrained wind output for highest load hours to equal IRP capacity value of 5% Appl
Slide 21: Cost & Deterministic Risk Metrics
Cost & Deterministic Risk Metrics Customer Usage Reference High & Low Load Case Cost NPVRR for Each (Net Present New Resources Portfolio Value Revenue High & Low Fuel Prices Requirement) •Candidate portfolios Plant Upgrades analyzed in High & Low CO2 Costs West-wide production cost model Change Key
Slide 22: Scenario Analysis: Portfolio Cost vs. Risk
Scenario Analysis: Portfolio Cost vs. Risk $37,000 Market Bridge to IGCC in WY Natural Gas ($32,735, $38,635) $36,500 Portfolio Portfoliomodeling modelingentailed entailed Wind constructing constructingand andanalyzing analyzing16 16 portfolios across 21 different portfolios across 21 different Dive
Slide 23: Portfolio Scoring Grid
23 Gr een w/ On -pe Div ak Bo En 0.0 15.0 30.0 45.0 60.0 75.0 ers a er g if ied rd m yT Th an ar g er m thr et al w o u gh /G 20 2 r ee 0 Div n w/o ers Div lea ifie ers se dT ifie her d Gr ma ee n lw ith Gre Bo en a Portfolio Scoring Grid Div rdm Ma ers an rk e ifie thro t dT u gh her 20 1 ma lw 4 i
Slide 24: Portfolio Scoring Grid
Portfolio Scoring Grid Weighted Scores & Ranked Results 3. Portfolio Evaluation Scoring: Screening Deterministic Stochastic Reliability & Diversity Total Weighted Scores (a) (b) (c) (f) (g) (h) (i) (j) (k) (l) (m) (n) (l) (m) (n) Within Meets Cost: Risk Risk Risk Risk: Risk: Risk: Year- Reliability:
Slide 25: Scenario Analysis: Boardman Highlight
Scenario Analysis: Boardman Highlight Horizontal axis shows expected cost; vertical axis shows risk of higher cost than expected. $35,500 Portfolio Portfoliowith withclosure closureofofBoardman Boardman in 2020 provides the best in 2020 provides the best combination combinationof ofcost cost&&risk r
Slide 26: NPVRR – Reference Case Cost & Deterministic Risk
NPVRR (2009$) – Reference Case Cost & Deterministic Risk Boardman Portfolios $28,674 $28,700 $28,593 $28,600 Both Both2020 2020and and2040 2040 closure closurecases casesperform perform $28,500 $ Millions $28,396 well wellunder underdeterministic deterministic risk risk measures. 2014 measures. 2014
Slide 27: Summary of Cost & Deterministic Risk
Summary of Cost & Deterministic Risk NPVRR $2009 in Millions Cost & Risk: Deterministic NPVRR $2009 in Millions Boardman Boardman through Boardman Future through 2014 2020 through 2040* Reference Case $28,593 $28,396 $28,674 Rank 2 1 3 Delta from 2040 ($81) ($278) Delta from 2014 ($197) $81 Average
Slide 28: Cost Impacts to 2021
Cost Impacts to 2021 Boardman 2014 vs. 2020 Closure $700,000 Over Overthe thenext nextdecade decade 2020 2020 case has lowercost case has lower cost $600,000 than than2014 2014case caseover over$600 $600 million million(nominal (nominal$), $), $500,000 which which representsan represents anNPV NPV b
Slide 29: Summary Comparison: Boardman Cases 2014, 2020 and 2040
Summary Comparison: Boardman Cases 2014, 2020 and 2040 Summary 2014 vs. 2014 vs. 2040 vs. 2020* 2040* 2020* Cost & Risk Metrics ($2009 millions) NPVRR - Reference Case Costs $197 ($81) $278 Deterministic Risk - Avg. of Worst 4 Futures $356 $216 $140 Deterministic Risk - Avg. of Worst 4 Futures Less
Slide 30: Rate Impacts
Rate Impacts Boardman Closure Rate Impacts 2011 – 2021 2014 vs. 2020 2014 vs. 2040 First Year Impacts 2.6% 3.3% Average Rate Impacts 3.2% 1.6% Boardman Items Items that that will will influence influence Administration Accelerated Dep. customer customer rates over the rates over the same same time p
Slide 31: Boardman Alternatives: NPVRR of Reference Case
Boardman Alternatives NPVRR of Reference Case 28,650 28,600 28,550 NPVRR 2009$ millions 28,500 28,450 28,400 28,350 28,300 28,250 28,200 Boardman Boardman Boardman Boardman Boardman Boardman Boardman Boardman through through through through through through through through 2014 2017 2018 2019 2020 20
Slide 32: Boardman Alternatives: Cost vs. Risk
Boardman Alternatives Cost vs. Risk 35,250 Retaining RetainingBoardman Boardman through through2020 2020reduces reduces deterministic deterministic costand cost and risk. risk. Boardman through 2014 2010-40 NPVRR, $2009 million Average of 4 Worst Futures 35,000 Boardman through 2017 RISK Boardman th
Slide 33: Boardman Alternatives: CO2 Emissions
Boardman Alternatives CO2 Emissions Average Emissions 2014-2023 10,000 8,000 Short Tons (000) 6,000 4,000 2,000 0 Boardman Boardman Boardman Boardman Boardman Boardman Boardman Boardman through through through through through through through through 2014 2017 2018 2019 2020 2021 2022 2023 33
Slide 34: Why Boardman 2020 Plan?
Why Boardman 2020 Plan? A 2020 plan for Boardman is the best option for PGE and our customers. The 2020 plan balances cost and risk, as well as impacts to the environment, community and employees. As compared to 2014, the 2020 plan: Saves customers about $200 million ($2009) NPVRR through 2040. Redu
Slide 35: Why Boardman 2020 Plan?
Why Boardman 2020 Plan? Analysis shows the 2020 operating plan for Boardman takes advantage of the plant’s economic benefits over the next decade while minimizing cost and risk uncertainty after 2020. As compared to 2014, the 2020 plan: Reduces the amount of money that PGE must recover from its cust
Slide 36: Boardman Decision Factors
Boardman Decision Factors Portfolio Cost Rate Impacts & Reliability Regulatory Boardman Legal 2020 Highest Value and Reliability for Orderly Customers Transition Technology & for Infrastructure Employees Development and Community 36
Slide 37: Next Steps
Next Steps Early April - Submit BART II to DEQ April 8 - File IRP Addendum April 26 - IRP Presentation at Commission Public Meeting May-July – IRP Review and Comment Period Late August - Commission Ruling on IRP 37
Slide 38: Appendix
Appendix IRP Analytical Results – Scoring Grid Backup 38
Slide 39: Portfolio Analysis: Reference Case
Portfolio Analysis Reference Case NPV of Revenue Requirements (2009$) 35,000 30,000 25,000 2010-2040 NPVRR, $ in Millions 20,000 15,000 10,000 5,000 0 Market Boardman Boardman Diversified Diversified Boardman Boardman Diversified Diversified Diversified Natural Gas Wind Bridge to Oregon CO2 Diverse
Slide 40: Portfolio Analysis: Worst Futures Less Reference Case
Portfolio Analysis Worst 4 Futures Less Reference Case Net Present Value of Revenue Requirements (2009$) 10,000 8,000 2010-2040 NPVRR, $ in Millions 6,000 4,000 2,000 0 Oregon CO2 Wind Bridge to Diversified Diversified Diverse Bridge to Diversified Diversified Diversified Boardman Natural Gas Boardm
Slide 41: Portfolio Analysis: Worst Futures
Portfolio Analysis Worst 4 Futures Net Present Value of Revenue Requirements (2009$) 40,000 2010-2040 NPVRR, $ in Millions 38,000 36,000 34,000 32,000 30,000 Diversified Diversified Wind Boardman Bridge to Diversified Diversified Diversified Oregon CO2 Boardman Boardman Boardman Natural Gas Diverse
Slide 42: Portfolio Analysis: Combined Performance
Portfolio Analysis Combined Performance Frequency of Good vs. Bad Outcomes 100% Does not meet reliability 80% criteria 60% 40% Performance Probability 20% 0% t s r et al ke Ga ind en in d Y lea rg ee n 14 11 20 Y se 17 ar l W re W in W uc Ta Gr 20 Go 20 20 in W lea 20 -20% M ra dG th N h 2 h h d n h
Slide 43: Risk Metrics - illustration
Risk Metrics - illustration Average of 4 Worst Futures Shows Showsmagnitude magnitudeofof potential worst cost potential worst cost outcomes outcomes Avg. of 4 Worst Futures Less Ref. Case Shows Showsdifference difference between betweenworst worst outcomes outcomesandand expected expectedcost cost
Slide 44: Stochastic Risk – TailVar less the Mean
Stochastic Risk – TailVar 90 less the Mean Boardman through 2014 Boardman through 2011 Boardman through 2017 Boardman through 2020 Market Natural Gas Diversified Thermal with Green w/o lease Diversified Thermal with Green Diversified Thermal with Wind Oregon CO2 Goal Diversified Green Wind Diversifi
Slide 45: Stochastic Risk - TailVar
Stochastic Risk - TailVar Boardman through 2011 Boardman through 2014 Boardman through 2017 Boardman through 2020 Bridge to IGCC in WY Natural Gas Diversified Thermal with Green w/o lease Diversified Thermal with Wind Diversified Thermal with Green Oregon CO2 Goal Market Diverse Green with wind in W
Slide 46: Stochastic Risk – Annual Cost Variance
Stochastic Risk – Annual Cost Variance Year-to-Year Portfolio Average Variance Wind Market Oregon CO2 Goal Boardman through 2014 Boardman through 2011 Diversified Green Boardman through 2017 Boardman through 2020 Diversified Green with On-peak Energy Target Diversified Thermal with Wind Diversified
Slide 47: Portfolio Reliability – Unserved Energy
Portfolio Reliability – Unserved Energy 2012-2020 & 2025 Market Bridge to IGCC in WY Bridge to Nuclear Wind Diversified Green Diverse Green with wind in WY Oregon CO2 goal Diversified Thermal with Wind Diversified Thermal with Green Diversified Green with On-peak Energy Target Natural Gas Boardman t
Slide 48: Portfolio Reliability - LOLP
Portfolio Reliability - LOLP LOLP Performance for 2012-2020, & 2025 Market Wind Diversified Green Oregon CO2 Compliance Bridge to IGCC in WY Boardman through 2014 Boardman through 2020 Diversified Thermal with Green w/o lease Bridge to Nuclear Diversified Thermal with Wind Diversified Thermal with G
Slide 49: HHI - Fuel
HHI - Fuel Oregon CO2 Goal 1,824 Green w/ On-peak Energy Target 1,907 Diversified Green 1,958 Diverse Green with wind in WY 1,966 Bridge to Nuclear 1,985 Wind 2,055 Diversified Thermal with Green 2,073 Diversified Thermal with Wind 2,079 Boardman through 2020 2,079 Diversified Thermal w/ Green w/o l
Slide 50: HHI - Technology
HHI - Technology Bridge to Nuclear 2,036 Market 2,154 Bridge to IGCC in WY 2,367 Diversified Thermal with Green 2,532 Diverse Green with wind in WY 2,576 Diversified Thermal w/ Green w/o lease 2,615 Diversified Green 2,656 Green w/ On-peak Energy Target 2,656 Diversified Thermal with Wind 2,660 Oreg
Slide 51: Portfolio Scoring Grid: Cost & Risk Results Tabulated
Portfolio Scoring Grid Cost & Risk Results Tabulated 1. Portfolio Evaluation Scoring: Screening Deterministic Stochastic Reliability & Diversity Raw Performance Metrics (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) Within Meets Cost: Prob. of Prob. of Risk Risk Risk Risk: Risk: Risk: Year-
Slide 52: Portfolio Scoring Grid: Normalized Scores
Portfolio Scoring Grid Normalized Scores 2. Portfolio Evaluation Scoring: Screening Deterministic Stochastic Reliability & Diversity Normalized Scores (0 to 100) (a) (b) (c) (f) (g) (h) (i) (j) (k) (l) (m) (n) Within Meets Cost: Risk Risk Risk Risk: Risk: Risk: Year- Reliability: Diversity: Diversit
Slide 53: CO2 Emissions – 2021 Annual Total
CO2 Emissions – 2021 Annual Total 14,000 12,000 10,000 8,000 Short Tons (000) 6,000 4,000 2,000 - Market Natural Wind Diversified Diversified Bridge to Bridge to Diversified Diversified Boardman Oregon Boardman Boardman Diverse Diversified Boardman Gas Green Thermal IGCC in Nuclear Green with Therma
Slide 54: CO2 Emissions – 2021 Intensity
CO2 Emissions – 2021 Intensity .60 .50 Short Tons of CO2 per MWh .40 .30 .20 .10 .00 Market Natural Wind Diversified Diversified Bridge to Bridge to Diversified Diversified Boardman Oregon Boardman Boardman Diverse Diversified Boardman Gas Green Thermal w/ IGCC in Nuclear Green w/ Thermal through CO
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