Portland General Electric Co · NYSE:POR
Portland General Electric — IPO Roadshow (June 2007)
34 slides from Portland General Electric's IPO roadshow presentation, Jun 4, 2007
Slide 1: Common Equity Offering
Common Equity Offering Copyright © 2007 Portland General Electric. All Rights Reserved. June 2007
Slide 2: Transaction Description
Transaction Description 2 Company: Portland General Electric (PGE ) Common Shares Offered: 21 million shares of common stock (Substantially all of the shares held in the Disputed Claims Reserve) Overallotment Options: Approx. 2.7 million shares common stock (secondary shares) Ti cker/Exchange: POR /
Slide 3: Forward-looking statements
This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward looking statements are statements of expectations, beliefs, plans, objectives, assumptions or future events o
Slide 4: Presenting Team
Presenting Team Peggy Fowler, Chief Executive Officer and President Jim Piro, Executive Vice President, Finance, Chief Financial Officer and Treasurer Bill Valach, Director of Investor Relations 4
Slide 5: Peggy Fowler, CEO and President
Peggy Fowler CEO and President
Slide 6: Investment Highlights
Investment Highlights Portland General Electric is a well-capitalized, vertically integrated, regulated electric utility Earnings and dividend growth driven by load growth and investment in regulated assets Annual capital expenditures are expected to significantly exceed depreciation Diversified pow
Slide 7: Company Overview
Company Overview 793,000 retail customer accounts Service territory population 1.6 million, 43% of state’s population 52 cities served – Portland and Salem the largest Net Utility Plant – $2.31 billion(1) Generation $536 million Distribution $987 million Transmission $145 million CWIP $412 million O
Slide 8: Statement of Direction: 2007-2009 Focus
Statement of Direction: 2007-2009 Focus Goals: Reliable, reasonably priced power – Design and maintain a reliable energy resource portfolio, maintaining high plant availability and achieving stable, predictable and reasonable prices. High customer value – Achieve high customer value by doing a great
Slide 9: Attractive and Growing Customer Base
(1) 2006 10-K. Attractive and Growing Customer Base Revenue by Customer Group Residential Industrial Commercial Retail Revenue and Load Growth 1.7% annualized customer growth from 1996-2006, with 1.7% customer growth in 2006 9 15% 39% 46% Customers ( 1 ) Revenue s ($ mm) ( 1 ) Energy (000s of MWh) (
Slide 10: Growing Oregon Economy
Growing Oregon Economy Growth in Oregon’s economy is expected to require further investment by PGE to meet increased energy demand Growth in Portland and Salem exceeds rest of state – core operational areas for PGE Taking advantage of steady state population growth, PGE has achieved annual customer
Slide 11: Investment Opportunities
Investment Opportunities Regulated Growth Net short utility Growing customer base Capital investments outpace depreciation Potential incremental capital investment of $550 - $650 million for Biglow Canyon Phases II & III across 2007 - 2010 (1) Does not include AFUDC and does not include Biglow Canyo
Slide 12: Power Supply Strategy
Power Supply Strategy Manage power supply operations to: Capitalize on PGE’s assets and position in the marketplace Meet load in most economic fashion to lower costs to customers Capture the benefits of PGE’s assets and their positioning in real-time markets Manage and monitor risks with appropriate
Slide 13: Power Supply Portfolio
Power Supply Portfolio 2007E Generation Capacity % of Total Capacity Physical Capacity Hydro Natural Gas/Oil Coal 298 MW 1,112 1,188 Wind 2007E Peak Load(2) 3,823 MW Net Purchased Power Boardman Coal Plant (1) Includes Bull Run located on the Sandy River. (2) Estimated peak as of January 1, 2007. No
Slide 14: Generation Expansion – Port Westward
Generation Expansion – Port Westward Port Westward Clatskanie, Oregon CCGT utilizing Mitsubishi G-class turbine 400 MW gas-fired plant 6,826 heat rate (without duct-firing) $280 - $290 million Expected online June 2007 EPC contractor: Black & Veatch Fully wrapped EPC contract Power island mft.: Mits
Slide 15: Generation Expansion – Biglow
Generation Expansion - Biglow Biglow Canyon Wind Farm Columbia Gorge, eastern Oregon 450 MW total capacity Phase 1: 125 MW $255 - $265 million 76 Vestas turbines 1.65 MW/turbine 37% capacity factor 25 year asset life Expected online December 2007 Phases II & III under review Construction 2008 – 2010
Slide 16: Generation Growth Opportunity
Generation Growth Opportunity PGE’s retail load is expected to grow consistently while selected long-term power purchase contracts expire, driving need for additional generation capacity Assumptions: 1.9% annual load growth through 2015 Expiration of certain contract hydro rights by 2012 Energy supp
Slide 17: Generation Growth Opportunity: Proposed Action Plan
Generation Growth Opportunity Proposed Action Plan - Generation Capacity Purchased Coal 2012E Power Sources(1) Total PGE System Capability 3,416 MW 2012E Peak Load 4,127 MW Purchased Hydro(2) Coal Gas Total PGE System Capability(3) 3,003 MW 2007E Peak Load(4) 3,823 MW 2007E Power Sources(1) Non-hydr
Slide 18: Forward Capital Expenditures Driving Rate Base Growth
Forward Capital Expenditures Driving Rate Base Growth Capital Expenditures Attractive growth opportunities through capital investment in core utility assets Earnings expected to grow 4 to 6 percent per year over the long term $289 $297 $383 $335 $457 Total capital expenditures $60 $63 $131 $116 $273
Slide 19: Proactive Regulatory Strategy
Proactive Regulatory Strategy Oregon Public Utility Commission Three-member governor-appointed Commission with four-year terms Rates set based on a forward test year PGE’s Approach to Regulation Communicate constantly No surprises Understand our issues; participate in crafting solutions Seek agreeme
Slide 20: Strong Management and Engaged, Valued Workforce
Strong Management and Engaged, Valued Workforce Experienced management team with officers averaging 26 years in the utility industry Dedicated and knowledgeable employee base of over 2,600 Scorecard-driven and customer-focused culture Continued cost-effective and reliable plant operations 20
Slide 21: Jim Piro, Executive VP, Finance, CFO and Treasurer
Jim Piro Executive VP, Finance, CFO and Treasurer
Slide 22: Recent Financial Results
Recent Financial Results Invested over $800 million in system since 2002 Operating statistics positive Solid customer satisfaction Volatile hydro conditions 2005 and 2006 Boardman outage Lack of power cost adjustment mechanism Senate Bill 408 reserve Key Drivers of Historical Performance 22 Financia
Slide 23: Regulatory and Financial Highlights since 2006
Regulatory and Financial Highlights since 2006 General Rate Case for 2007 test year concluded Boardman deferral granted to allow PGE to recover a portion of the replacement power costs OPUC supportive of adding wind generation to PGE rate base Reached a settlement that resolves all issues between PG
Slide 24: Drivers of Future Performance
Drivers of Future Performance Strong economic and load growth in service territory Continued operational excellence and customer focus drive core utility performance Investments in prudent rate base assets drive earnings and dividend growth Work closely with regulators and customer groups to achieve
Slide 25: 2007 Rate Case Results
2007 Rate Case Results (1) Includes annualized rate base of Port Westward. Power Cost Adjustment Mechanism – 90/10 sharing mechanism after application of ROE deadband; subject to an earnings test Intra-year Power Cost Adj. 10.1% Allowed ROE Annual Power Cost Update Tariff – annual reset of net varia
Slide 26: Rate Base Growth Opportunities
Rate Base Growth Opportunities Capital Expenditures Approved Average Rate Base Debt/Capitalization S&P “BBB”: 50% - 60% (1) (1) (1) Forecasted expenditures are preliminary and subject to change. (2) Includes annualized rate base of Port Westward. Note: S&P target credit statistic range based on Busi
Slide 27: Regulatory and Legal Update
Regulatory and Legal Update Boardman Coal Plant deferral $26.4 million granted File for amortization in second quarter 2007 Subject to OPUC prudence review, complete process late 2007 / early 2008 Senate Bill 408 (utility taxes) Beginning January 2006, implements an annual rate adjustment if the dif
Slide 28: Dividends
Dividends Dividends Current annualized dividend of 94 cents per share, increased on May 2, 2007, from 90 cents per share Current quarter’s dividend payable on July 16, 2007, to shareholders of record as of June 25, 2007 Over the long term, we expect a target dividend payout ratio in the 60 percent r
Slide 29: Strategy for Success
Strategy for Success Portland General Electric is a well-capitalized, stable company with on-going growth opportunities Stability Vertically integrated, regulated business Strong balance sheet/ credit ratings Experienced management team Supportive regulatory environment Growth Strong load and custom
Slide 30: Investor Relations Contact Information
Investor Relations Contact Information William J. Valach Director, Investor Relations 503.464.7395 William.Valach@pgn.com Portland General Electric Company 121 SW Salmon Street Suite 1WTC 0403 Portland, OR 97204 www.PortlandGeneral.com 30
Slide 31: Appendix
ay Appendix Coston General Electric
Slide 32: Strong Management
Strong Management (32) Peggy Fowler CEO and President Portland General Electric Company 13 employees (33) Stephen Hawke Senior Vice President, Customer Service and Delivery 657 employees (19) Carol Dillin Vice President, Public Policy 38 employees (33) Doug Nichols Vice President, General Counsel an
Slide 33: Regulatory Update
Regulatory Update PGE absorbs all costs/benefits within the ROE band irrespective of power cost variances After the earnings test and application of the power cost sharing PGE can earn up to 9.1% and down to 11.1% return on equity Customer Surcharge Customer Refund 150 Bps of ROE Baseline NVPC 75 Bp
Slide 34: Generation Growth Opportunity: Proposed Action Plan
Generation Growth Opportunity Proposed Action Plan (1) Expected and potential resource actions, capacity need based on winter season. (2) Assumes normal hydro. (3) Renewable portfolio standard. Note: Data as of May 25, 2007. 34 Energy Capacity Energy/Capacity Actions (1) MWa (2) % of Target MW (2) 2