Portland General Electric Co · NYSE:POR

Portland General Electric — Investor Presentation (September 2012)

43 slides from Portland General Electric's investor presentation, September 2012

  1. Slide 1: Investor Presentation

    Investor Presentation September 2012 1

  2. 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

  3. Slide 3: PGE Value Drivers

    PGE Value Drivers • Clear focus, 100% regulated utility • Growth in service territory • Multiple opportunities for rate base growth • Progressive environmental and renewable position • Strong financial position 3

  4. Slide 4: Strong Platform. Positioned for Sustained Growth.

    PGE INVESTMENT THESIS Strong Platform. Positioned for Sustained Growth. The Company The Strengths The Growth 4

  5. Slide 5: PGE At A Glance

    PGE At A Glance  Vertically integrated – generation, Beaver transmission and distribution Port Westward OREGON WASHINGTON Montana  Market cap >$2B 26 Colstrip 3 & 4 Columbia River  Service area in 84 northwest Oregon Portland Sandy Eastern Oregon River T.W. Sullivan Coyote Springs – includes Port

  6. Slide 6: Attractive, Growing Service Territory

    Attractive, Growing Service Territory Demographic Growth Retail Load Growth (2) (Million MWhs) Continued in-migration 18.8 • Population growth of 1-1.2% annually 18.6 through 2020(1) 18.5 Industrial Growth Economy continues to improve • Growth in high-tech & manufacturing – Intel’s D1X facility – Da

  7. Slide 7: History of Successful Execution of Capital Projects

    History of Successful Execution of Capital Projects Recent Capital Projects Average Rate Base ($M)  Biglow Canyon Wind Farm (2007-2010) ‒ Three phase build-out; $960 million $3,152 $2,863  Smart Meters (2008-2010) $2,381 $2,425 ‒ 825,000 meters installed; $145 million $1,939  Selective Water With

  8. Slide 8: Ready for the Next Growth Phase

    PGE TODAY Ready for the Next Growth Phase 2006 – 2010 2011 – 2012 2013+ Grew business and built Transition – preparing for Opportunities for strong, solid platform next growth phase sustainable growth 8

  9. Slide 9: Strong Platform. Positioned for Sustained Growth.

    PGE INVESTMENT THESIS Strong Platform. Positioned for Sustained Growth. The Company The Strengths The Growth 9

  10. Slide 10: Key Strengths

    Key Strengths Diversified customer base and 1 generation portfolio 2 High quality utility operations 3 High customer satisfaction rate 4 Solid financial performance Strong balance sheet and 5 financial resources 10

  11. Slide 11: Diversified Customer Base and Generation Portfolio

    1. Diversified Customer Base and Generation Portfolio Retail Revenues Power Sources as a by Customer Percent of Retail Load (2011) Per the 2012 AUT (1) Total = $1.7B Total = 2,217 MWa Industrial Purchased Hydro 13% PowerHydro & Wind 22% Coal 26% 29% 19% Residential Wind & Solar Gas Commercial Natura

  12. Slide 12: High Quality Utility Operations

    2. High Quality Utility Operations  Highly dependable generation portfolio with 93% availability in 2011  Strong power supply operations to stabilize and optimize power costs  Progressive approach to reduce coal Effective generation – Boardman 2020 Plan Utility Operations  Ongoing T&D investment

  13. Slide 13: High Customer Satisfaction

    3. High Customer Satisfaction Top No. 1 No. 2 Decile Investor-owned In the West for Nationally among utility in the nation general business large key customers for residential satisfaction for satisfaction customer satisfaction JD Power & JD Power & TQS Research, Associates Associates Inc. All custo

  14. Slide 14: Solid Earnings

    4. Solid Earnings Net Income EPS ROE ($M) (Diluted) 8.2- $1.85- $140- 9.0% 9.0%(1) 2.00(1) 151(1) $1.95 $147 $1.66 8.0% $125 2010 2011 2012E 2010 2011 2012E 2010 2011 2012E Reduced gap between actual ROE and allowed ROE of 10% 1) Based on guidance range, as most recently reaffirmed on August 7, 2012

  15. Slide 15: Dividend Growth

    4. Dividend Growth 3.1% CAGR $1.07 $1.05 $1.03 $1.00 $0.96 $0.92 2007 2008 2009 2010 2011 2012 Target Payout Ratio of 50 to 70% Note: Represents annual dividends paid 15

  16. Slide 16: Strong Balance Sheet and Financial Resources

    5. Strong Balance Sheet and Financial Resources Revolving Credit Facilities (1) Financial Resources (in millions)  Investment grade ratings of BBB and Baa2  Manageable debt maturities Total – weighted average Available Credit Credit 15.5 years Facilities + Cash $660 $619  Target capital structure

  17. Slide 17: Strong Platform. Positioned for Sustained Growth.

    PGE INVESTMENT THESIS Strong Platform. Positioned for Sustained Growth. The Company The Strengths The Growth 17

  18. Slide 18: Future Generation Need

    Future Generation Need Load-Resource Forecast(1) - Energy Demand Exceeds Generation Resources MWa 3000 Retail load 2500 2015 shortfall Opportunity 2000 632 MWa to grow rate base Long-Term Contracts 1500 1000 PGE Generation 500 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1) Load-Resource Fore

  19. Slide 19: Potential Opportunities for Rate Base Growth

    Potential Opportunities for Rate Base Growth Potential to add $2B to 5 rate base (1) 4 3 Cascade 2 New Crossing $3.1B 1 New renewable base load energy New peaking energy capacity Average 2016-2017 Rate Base 2011 1) Rate base growth dependent on outcome of RFP processes 19

  20. Slide 20: New Peaking Capacity Resource

    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 Acceptable Bid Types(1)  Build-own-transfer project on a greenfield site  Asset purchase agreement of an existing facility  PGE’s benchmar

  21. Slide 21: New Base Load Energy Resource

    2. New Base Load Energy Resource Requirement  300-500 MW base load energy resource Acceptable Bid Types(1)  Build-own-transfer project on a greenfield site  Asset purchase agreement of an existing facility  PGE’s benchmark bid – Carty 1  Construction bid on PGE’s benchmark site (project will be

  22. 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  PGE plans to submit a ben

  23. Slide 23: Cascade Crossing Transmission Project

    4. 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 potential new wind r

  24. Slide 24: Potential Capital Projects Timeline

    Potential Capital Projects Timeline (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 • Capacity, energy and renewable forecast assumes sel

  25. Slide 25: Portland General Electric Value Proposition

    Portland General Electric Value Proposition  Strong balance sheet  Solid growth in customer demand Strong Platform positioned for Sustained  Potential rate base growth of $2B Growth  Constructive regulatory environment 25

  26. Slide 26: PGE Investor Relations Team

    PGE Investor Relations Team Director, Investor Relations William J. (503) 464-7395 Valach William.Valach@pgn.com Analyst, Investor Relations Lucia M. (503) 464-8586 Dempsey Lucia.Dempsey@pgn.com Portland www.PortlandGeneral.com 121 S.W. Salmon Street General Suite 1WTC05 Electric Portland, OR 97204

  27. Slide 27: Appendices

    Portland General Electric Appendices 27

  28. Slide 28: Appendices

    Appendices 1. Financials 2. Resource planning 3. Regulatory environment 4. Business initiatives – details 28

  29. Slide 29: YTD 2012 Financial Results

    YTD 2012 Financial Results 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 YTD Q2 Retail Revenues Weather Adjusted Load Growth (in millions) (excluding two large paper manufacturers) $853 $856 Q2 2012 0.5% $390 Q2

  30. Slide 30: Resource Mix

    Resource Mix Resource Capacity (at 12/31/11)(1) Power Sources as a Capacity % of Total Percent of Retail Load Capacity Per the 2012 AUT Hydro Deschutes River Projects 298 MW 7.1% Clackamas/Willamette River Projects 191 4.6 Total = 2,217 MWa Hydro Contracts 485 11.6 974 23.3 Natural Gas/Oil Purchased

  31. Slide 31: 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

  32. Slide 32: Energy Load-Resource Balance

    Energy Load-Resource Balance Load-Resource Balance (2012-2021) Energy 3500 3000 Retail load before EE (excl. 5-year opt-outs) 2500 Annual Average Availability (MWa) Retail load including EE (excl. 5-year opt-outs) 632 MWa (513 MWa after EE) 2000 Long-term Contracts Wind – Biglow, Klondike II, Vansyc

  33. Slide 33: Energy Action Plan

    Energy Action Plan Annual Annual Energy Action Plan for 2015 MWa 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 & Power 2 Renewable: ETO Energy Savings 119 Existing Contract

  34. Slide 34: Capacity Load-Resource Balance

    Capacity Load-Resource Balance Load-Resource Balance (2012-2021) Winter Capacity 6000 Peak Hour before EE + Reserves (excl. 5- 5000 year opt-outs) Peak Hour Load 4000 after EE + Reserves 2015 Shortfall Available Capacity (MW) (excl. 5-year opt-outs) 1,409 before EE Wind - Biglow 1-3, 1,233 after EE

  35. Slide 35: Capacity Action Plan

    Capacity Action Plan Capacity Action Plan for 2015 MW PGE Load with EE Savings 4,150 Remove 5-year Opt-Outs -144 Operating Reserves(1) 183 Contingency Reserves(2) 232 Existing PGE & Contract Resources -3,012 PGE Resource Target 1,409 Resource Actions Thermal: CCCT 441 Combined Heat & Power 2 Renewab

  36. Slide 36: 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

  37. Slide 37: Recovery of Power Costs / Return on Equity

    Recovery of Power Costs Annual Power Cost Update Tariff • 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 Power Cost Adjustment Mechan

  38. Slide 38: Renewable Energy Standard

    Renewable Energy Standard 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 T

  39. Slide 39: Decoupling Mechanism

    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- resident

  40. Slide 40: Cost Efficiency Initiatives

    Cost Efficiency Initiatives  Company-wide benchmarking to identify best practices  Investments to leverage technology – Financial system and supply chain replacement project – Timekeeping System – Enterprise Asset Management  Process Improvements & Work Redesign  Savings will offset cost inflati

  41. Slide 41: 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

  42. Slide 42: 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

  43. Slide 43: 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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