UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 16, 2008
PORTLAND GENERAL ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
| Oregon | 1-5532-99 | 93-0256820 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
121 SW Salmon Street, Portland, Oregon 97204
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (503) 464-8000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure. |
On September 17, 2008, representatives of Portland General Electric Company will make a presentation in Portland, Oregon to various members of the financial and investment community, at which the material contained in the exhibit attached hereto as Exhibit 99.1 will be presented.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit |
Description | |
| (99) | Additional exhibits | |
| 99.1 | Portland General Electric Company Overview presentation dated September 2008 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PORTLAND GENERAL ELECTRIC COMPANY (Registrant) | ||||||||
| Date: September 16, 2008 | By: | /s/ James J. Piro | ||||||
| James J. Piro | ||||||||
| Executive Vice President, Finance Chief Financial Officer and Treasurer | ||||||||
2
Exhibit 99.1
Compay Overview
September 2008
Copyright © 2008 Portland General Electric. All Rights Reserved.
Introduction
William Valach
Director, Investor Relations
| 2 |
|
Cautionary Statement
Information Current as of August 7, 2008
Except as expressly noted, the information in this presentation is current as of August 7, 2008 — the date on which PGE filed its Quarterly Report on Form 10-Q for the second quarter ended June 30, 2008 — and should not be relied upon as being current as of any subsequent date. PGE undertakes no duty to update the presentation, except as may be required by law.
Forward-Looking Statements
This presentation contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of expectations, beliefs, plans, objectives, assumptions or future events or performance. Words or phrases such as “anticipates,” “believes,” “should,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will likely result,” “will continue,” or similar expressions identify forward-looking statements. The forward-looking statements in this presentation include, but are not limited to, statements concerning continued growth of the Oregon economy and PGE’s retail load; changes in PGE’s energy portfolio; estimated future capital expenditures; the outcome of PGE’s 2009 general rate case; the completion dates, costs and rate treatment of the smart metering project; the completion dates, costs and rate treatment of Phases II and III of the Biglow Canyon Wind Farm; statements concerning the estimated cost savings results from deployment of smart metering; statements concerning the recovery of costs through future rate increases; statements concerning future dividend payouts; statements concerning the outcome of various legal and regulatory proceedings; and statements concerning the outcome of the renewables request for proposals.
Although PGE believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, PGE can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from those contemplated include, among others, events related to governmental policies; the outcome of legal and regulatory proceedings; the costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in weather, hydroelectric, and energy market conditions; wholesale energy prices, which could affect the availability and cost of fuel or purchased power; rate treatment of capital projects; operational factors affecting PGE’s power generation facilities; growth and demographic patterns in PGE’s service territory; general political, economic, and financial market conditions; and other factors that might be described from time to time in PGE’s filings with the Securities and Exchange Commission.
Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, PGE undertakes no obligation to update any forward-looking statement.
| 3 |
|
Peggy Fowler
Chief Executive Officer &
President
| 4 |
|
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
Diversified power supply
Experienced management team
Fair and balanced regulatory environment
Growth
Strong load and customer growth
Necessary and prudent regulated rate base investment opportunities
Earnings and dividend growth
Mission: To be a company our customers and communities can depend upon to provide electric service in a safe, responsible and reliable manner, with excellent customer service, at a reasonable price.
| 5 |
|
Investment Case
PGE offers strong fundamentals:
$2.3 billion Capital Expenditure Program 2008-2012
10.1% ROE on 50% equity capital structure
Constructive regulatory environment
High-performing generation and well-maintained system
6% to 8% earnings growth over the long term
Dividend payout ratio of approximately 60% over the long term
| 6 |
|
Company Overview
813,000 retail customer accounts(1)
Service territory population 1.6 million, 43% of state’s population
52 cities served – Portland and Salem the largest
Net Utility Plant – $2,609 million(2)
Generation $1,044 million
Distribution $1,029 million
Transmission $180 million
CWIP $126 million
Other $230 million
4,000-square-mile service area
26,000 miles of T&D lines
2,449 MW of generation
Summer peak load of 3,743 MW (2008)
Winter peak load of 4,073 MW (1998)
Annual load of 2,372 MWa (2007, weather adjusted)
2,709 employees(1)
WA
OR
Beaver
Port Westward
WASHINGTON
OREGON
Colstrip 3
(Montana)
Colstrip 4
Columbia River
Coyote Springs
Biglow Canyon
Boardman
Portland
Clackamas Rivar
T.W. Sullivan
River Mill
Faraday
North Fork
Oak Grove
Willamette River
Salem
Pelton
(Madras)
Round Butte
| (1) |
|
As of June 30, 2008. |
| (2) |
|
Source: 2007 FERC Form 1. |
Note: All numbers updated for year-ending December 31, 2007, except as noted.
| 7 |
|
Attractive and Growing Customer Base
2007 Statistics by Customer Group(1)
Customers Revenues ($ mm) Energy Deliveries (000s of MWhs)
Residential 706,444 $716 7,688
Commercial(2) 97,088 593 7,781
Industrial(2) 256 147 4,158
Total 803,788 $1,456 19,627
2007 Revenues by Customer Group
Residential 49%
Industrial 10%
Commercial 41%
Growth in Oregon’s economy is expected to require further investment by PGE to meet increased energy demand
Population growth in Portland and Salem has exceeded rest of state – core operational areas for PGE
Population growth in Oregon has exceeded United States – 1.5% vs. 1.0% from 2006-2007
No single customer accounts for more than 4% of retail revenues
As a result of steady state population growth, PGE has achieved compounded annual customer growth and load(3) growth of 1.6% since the end of 2003.
| (1) |
|
Year-end data from PGE’s 2007 10-K. |
| (2) |
|
Includes revenues and MWhs for Direct Access Customers. |
| (3) |
|
Adjusted for weather and certain industrial customers. |
| 8 |
|
Customer Value Strategy
Maintain high overall ratings in:
Customer satisfaction
Electric service power quality and reliability
Maintain reasonable and stable long-term prices:
Integrated resource planning
Effective management of power supply operations
Effective cost management
Implement initiatives that focus on efficiency, cost effectiveness and customer service:
Customer Focus Initiative
Generation Excellence Program
Management Excellence Initiative
Deliver technologies that offer benefits to customers, such as smart meters
9
Well Maintained and High-Quality Utility System
PGE strategically makes on-going infrastructure investments in order to ensure a high level of system reliability, safety and customer satisfaction
Invested more than $775 million in the last five years on system upgrades to transmission, distribution and existing generation
2007 customer survey results
Customer satisfaction:
Top quartile for residential customers(1)
Top decile for general business customers(1)
Top quartile for key customers(2)
Reliability:
Top decile for residential and general business customers(1)
Top quartile for key customers(2)
| (1) |
|
Source: Market Strategies, Inc. (2007) |
| (2) |
|
Source: TQS Research (2007) |
10
Smart Meters
Smart Meters
Provides two-way communications with residential and commercial customers
PGE proposed a system to:
Read meters remotely and provide billing options
Activate and de-activate meters remotely
Enhance outage detection
Enable possible demand response and direct load control programs
Vendor: Sensus Metering Systems
Technology: FlexNet radio frequency technology
Deployment: More than 850,000 residential and commercial meters
Implementation Schedule:
Systems Acceptance Testing began June 2008
Full deployment scheduled to begin January 2009
Price increase effective June 1, 2008 (fully offset by certain income tax refunds to customers)
Estimated cost of $130 million—$135 million
$18 million in annual operational savings projected by 2011
OPUC approved on May 5, 2008
11
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 cost to customers
Manage and monitor risks with appropriate systems and processes to assure strategy is implemented prudently
Communication is one of the keys to our strategy
12
Power Supply Portfolio
Generation Capacity (at 12/31/07)
Physical% of Total
Capacity Capacity
Hydro
Deschutes River Projects 298 MW 8.1%
Clackamas/Willamette
River Projects(1) 205 5.6
Hydro Contracts 602 16.4
1,105 30.1
Natural Gas/Oil
Beaver Units 1-8 505 MW 13.8%
Coyote Springs 234 6.4
Port Westward 406 11.1
1,145 31.3
Coal
Boardman 380 MW 10.4%
Colstrip 296 8.1
676 18.5
Wind(2)
Klondike II Contract 27 MW 0.7%
Biglow Canyon Phase I 46 1.3
| 73 |
|
2.0 |
Net Purchased Power
Short-/Long-term 665 MW 18.1%
Total 3,664 MW 100.0%
Power Sources as % of Retail Load
2007 Actual
Purchased Power 25%
Gas/Oil 19%
Hydro/Wind(3) 29%
Coal 27%
2006 Actual
Gas/Oil 8%
Hydro/Wind(3) 27%
Purchased Power 47%
Coal 18%
| (1) |
|
Includes Bull Run located on the Sandy River. |
| (2) |
|
‘Physical Capacity’ for wind resources provided in average megawatts. |
| (3) |
|
Includes purchased power from hydro contracts and the Klondike II wind contract. |
13
Generation Expansion
Port Westward (completed)
406 MW gas-fired plant utilizing Mitsubishi G-class turbine
$280 million, including AFDC*
6,826 Btu/kWh heat rate (without duct-firing)
Placed into service June 11, 2007
Biglow Canyon Wind Farm
Columbia Gorge, eastern Oregon
450 MW total installed capacity
Phase I (completed)
$255 million, including AFDC
125 MW nameplate capacity
37% capacity factor
Online and in prices effective January 1, 2008
Phases II & III
$740 million—$780 million, including AFDC
Purchase agreements with Siemens for 141 turbines to complete the project
325 MW nameplate capacity
Phase II: 150 MW
Phase III: 175 MW
Construction 2008 – 2010
Oregon’s Renewable Energy Standard includes an automatic adjustment mechanism for rate treatment of renewable resources
*Allowance for funds used during construction.
14
Generation Growth Opportunity
Load Growth
PGE’s retail load is expected to grow consistently while selected long-term power purchase contracts expire, driving the need for additional generation capacity
Resource Need: Energy
Annual Average Availability MWa
4,000
3,500 Retail Load
3,000
1,848 MWa
2,500 1,141 MWa
576 MWa
2,000 218 MWa- RFP
Long-term Contracts
1,500
1,000 Generation
(Theoretical Availability,
Beaver used for peaking)
500
0
‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘22 ‘23 ‘24 ‘25 ‘26 ‘27 ‘28 ‘29 ‘30
Resource Need: Capacity
Megawatts MW
7,000
6,000 1-in-2 Peak Retail Load + 12% Reserves
5,000
3,617 MW
4,500 1,520 MW 2,494 MW
Renewable RFP
3,000
Long-term Contracts
2,000 Generation
(Theoretical Availability,
Normal Conditions)
1,000
0
‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘22 ‘23 ‘24 ‘25 ‘26 ‘27 ‘28 ‘29 ‘30
Note: Retail load = Net system load minus 5-year opt out (about 30 MWa).
15
Renewables Request for Proposals
Request for Proposals
Issued RFP for up to 218 MWa of renewable resources on April 23, 2008
Schedule:
RFP responses were due June 4, 2008
PGE identifies a final short list of bids by fall 2008 for subsequent negotiation
An independent evaluator (Accion Group) monitors the evaluation process for fairness and consistency of bid evaluation
PGE will consider both purchase and ownership opportunities
With the addition of 218 MWa PGE will exceed the 2015 renewable energy standard requirement of 15%
16
Boardman BART Update
Best Available Retrofit Technology (BART) for compliance with EPA Regional Haze Rule
PGE’s cost estimates (through 2014):
$360 to $470 million(1) (selective non-catalytic reduction)
$570 to $745 million(1) (selective catalytic reduction)
Oregon DEQ issued a draft proposal on August 14, 2008, which includes the installation of a SCR(2) to be completed in the 2016-2018 timeframe(3)
Preliminary schedule:
Public notice on rule November 2008
EQC decision on BART April 2009
PGE issues draft IRP June 2009
EPA approval 3Q 2009
PGE issues final IRP August 2009
IRP acknowledgement March 2010
| (1) |
|
100% of estimated cost. (2) Selective Catalytic Reduction. |
(3) PGE’s proposals would allow for capital expenditures through 2014. PGE is considering the DEQ proposal but has not incorporated it into the Company’s forecasts.
17
Financial Overview
Jim Piro
Executive Vice President, Finance, Chief Financial Officer & Treasurer
18
Recent Financial Results
Financial Summary
Year ended Six months ended
December 31, June 30,
($ in millions, except per share amounts) 2006 2007 2007 2008
Revenues $1,520 $1,743 $838 $896
Net Operating Income 121 198 169 139
Net Income 71 145 101 67
EPS (basic and diluted) $1.14 $2.33 $1.61 $1.07
Factors Impacting Results($ earnings per diluted share)
Full-year 2006
Boardman outage (-$0.51) and deferral (+$0.06)
Mark-to-market accounting (+$0.05)
Senate Bill 408 (-$0.41)
2007
Boardman deferral (+$0.26)
California settlement (+$0.06)
Senate Bill 408 (+$0.18)
Year-to-Date (Q2) 2007
Boardman deferral including interest (+$0.24)
California receivable (+$0.06)
Non-qualified benefit plan assets (+$0.05)
Senate Bill 408 (+$0.05)
2008
Delayed hydro run-off (-$0.07)
Non-qualified benefit plan assets (-$0.05)
Beaver oil sale (+$0.07)
Senate Bill 408 (-$0.01)
19
Proactive Regulatory Strategy
Oregon Public Utility Commission
Governor-appointed Commission with staggered four-year terms (Lee Beyer 3/2012, Ray Baum 8/2011, John Savage 3/2009)
Rates set based on a forward test year
PGE’s Approach to Regulation
Communicate constantly; no surprises
Commission understands issues; participate in crafting solutions; always working toward settlement
Keep an eye on total result: must be reasonable, in context
Deregulation
Oregon’s approach allows direct access for industrial and commercial customers beginning March 2002
PGE essentially economically neutral to customers choosing direct access
Large customers have choice — estimate that 13 percent of load from largest customers will be served by electricity service suppliers in 2008
20
Key Regulatory Dockets at the OPUC
2009 General Rate Case
Docket UE 197
Decision: December 2008
Annual Update Tariff for 2009 Power Costs
Docket UE 198
Decision: Fall of 2008
Approval for Amortization of Boardman Deferral
Docket UE 196
Decision: Q3 – Q4 2008
Trojan Remand(1)
Docket DR10, UE 88, UM 989
Decision: September 2008
Web Resource
www.oregon.gov/PUC/
| (1) |
|
For more detail refer to page 32 in the appendix. |
21
2009 General Rate Case Update
General Rate Case
Initially filed February 27, 2008, with a 2009 test year
Updated filing August 15, 2008, via PGE rebuttal testimony
Stipulations:
Allowed ROE: 10.1%
Capital Structure: 50% Equity / 50% Debt
Weighted average cost of capital: 8.33%
Methodology for modeling net variable power cost (NVPC)
Requested (as of August 15, 2008):
Average rate base: $2.347 billion(1)
Increase in average revenue requirement: $213 million
NVPC: $151 million
O&M, A&G and other: $62 million
Schedule(2):
Staff and intervener testimony due September 15
PGE testimony due October 1
Hearing on October 10
Oral arguments on November 13
OPUC order due December 29
If approved, customer prices will increase by approximately 11%, effective January 1, 2009 (includes PGE’s August estimate of NVPC(3))
(1) Excludes smart metering and Phases 2 & 3 of the Biglow Canyon Wind Farm. (2) Detailed schedule available on the OPUC website at http://www.oregon.gov/PUC/
(3) NVPC are updated throughout the year beginning in April and finalized in November. PGE’s July NVPC update estimated an increase of approximately $151 million. As of PGE’s August rebuttal filing, NVPC were $30 million lower than the July estimate.
22
Recovery of Power Cost
Annual Power Cost Update Tariff
Annual reset of rates based on forecast of net variable power costs (NVPC) for the coming year. Following OPUC approval, new prices go into effect on or around January 1 of the following year
Power Cost Adjustment Mechanism
Power cost sharing
Customer Surcharge
90/10 Sharing(1)
$28 million(2)
150 Bps of ROE
Baseline
NVPC
($14) million(2)
75 Bps of ROE
90/10 Sharing(1)
Customer Refund
Earnings test
Return on Equity
Customer Surcharge
9.1%
100 Bps
10.1%
100 Bps
11.1%
Customer Refund
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
| (1) |
|
90 percent with customers, 10 percent with PGE. (2) Deadband for 2008. |
23
Forward Capital Expenditures Driving Rate Base Growth
Capital Expenditures
Attractive growth opportunities through capital investment in core utility assets
Earnings expected to grow 6 to 8 percent per year over the long term starting with 2008
New capital investments funded through cash from operations and issuances of debt and equity with a targeted capital structure of 50/50
Projects (in millions)1 2008 2009 2010 2011 2012
Smart metering $23 $100—$110—-
Biglow Canyon Wind Farm: Phase II2 $75 $235——
Biglow Canyon Wind Farm: Phase III2 $23 $180 $185—-
Boardman emissions controls3 $3 $5—$10 $290—$330
Hydro relicensing $62 $60—$80
Ongoing capital expenditures4 $229 $225—$245 $225—$245 $240—$260 $230—$250
Depreciation and amortization of $205 million—$240 million annually (2008 –2012)
(1) Current as of August 7, 2008 (refer to cautionary statement). Does not include AFDC. Forecasted expenditures are preliminary and subject to change. Does not include capital expenditures for potential additional renewables, beyond Biglow Canyon, to meet Oregon’s Renewable Energy Standard.
| (2) |
|
2007 capital expenditure for Biglow Canyon Phases II and III was $17 million. |
(3) Forecasted capital expenditures based on the installation of a SNCR system, per PGE’s November 2007 BART filing. Total expenditures under PGE’s proposal expected to be $360 million—$470 million (100% of project cost).
| (4) |
|
Includes upgrades to transmission, distribution and existing generation, as well as new customer connections. |
24
Rate Base Growth Opportunities
Capital Expenditures
($ mm)
$500 $455
$415
$400 $371
$300 $255
$200 $194
$100
$0
2004 2005 2006 2007 2008E(1)
Debt/Capitalization
60%
S&P “BBB”: 50%—60%
55% 50% 50%
50% 47%
45% 42% 43%
40%
35%
30%
2004 2005 2006 2007 2008E(1)
Approved/Projected Avg. Rate Base
($ mm)
$2,347(4)
$2,400 $2,237(3)
$2,200
$2,009(2)
$2,000
$1,766
$1,800
$1,600
2002 2007 2008 2009E
Current Credit Ratings
Senior Senior
Secured Unsecured Outlook
S&P A BBB Stable
Moody’s Baa1 Baa2 Stable
| (1) |
|
Forecasted expenditures are preliminary and subject to change. (2) Includes annualized rate base of Port Westward. |
| (3) |
|
Approved UE-180 rate base plus Biglow Canyon Phase 1. |
(4) Per PGE’s General Rate Case (UE-197) rebuttal testimony filed August 15, 2008. Excludes smart metering and Phases 2 & 3 of the Biglow Canyon Wind Farm.
25
Growth in Dividends
Common stock dividend payment history:
$0.250
$0.245
| $0.240 |
|
4.3% increase |
$0.235
| $0.230 |
|
4.4% increase |
$0.225
$0.220
$0.215
07/06 11/06 03/07 07/07 11/07 03/08 07/08
Quarterly Dividend Payment Date
Current quarter’s dividend of 24.5 cents per share is payable on October 15, 2008, to shareholders of record as of September 25, 2008
Dividend growth is evaluated based on capital requirements and financial performance, but over the long term, we expect a target dividend payout ratio in the 60 percent range
26
Drivers of Future Performance
Strong economic and load growth in operating area
Continued operational excellence and customer focus drive core utility performance
Investments in prudent rate base assets drive earnings and dividend growth
Relationships with regulators and customer groups to ensure fair regulatory outcomes
Existing mechanisms for sharing power cost volatility with customers enhance stability of PGE earnings
27
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
Diversified power supply
Experienced management team
Fair and balanced regulatory environment
Growth
Strong load and customer growth
Necessary and prudent regulated rate base investment opportunities
Earnings and dividend growth
28
Investor Relations Contact Information
William J. Valach
Director, Investor Relations
503-464-7395
William.Valach@pgn.com
Portland General Electric Company
121 S.W. Salmon Street
Suite 1WTC0403
Portland, OR 97204
www.PortlandGeneral.com
29
Appendix
Table of Contents
Organization Chart p.31
Trojan Remand Case p.32
Trojan Class Action Suits p.33
Diverse Mix of Resources – Hydro p.34-35
Hydro Supply p.36
Selective Water Withdrawal Update p.37
Diverse Mix of Resources – Natural Gas p.38
Natural Gas Transportation p.39
Diverse Mix of Resources – Coal p.40
Boardman Coal Supply and Transportation p.41
Diverse Mix of Resources – Wind p.42
Project Management – Exceeding Expectations p.43
Generation Excellence p.44
Strategic Location Within Western Grid p.45
30
PGE Organization
| (34) |
|
Peggy Fowler
CEO and President
| (34) |
|
Jim Piro Executive Vice President Finance, Chief Financial Officer & Treasurer 164 employees |
| (34) |
|
Jay Dudley Vice President General Counsel and Secretary 47 employees |
| (28) |
|
Steve Quennoz Vice President Nuclear & Power Supply/Generation 428 employees |
| (24) |
|
Jim Lobdell Vice President Power Operations & Resource Planning 52 employees |
| (30) |
|
Arleen Barnett Vice President Administration 103 employees |
| (21) |
|
Carol Dillin Vice President Public Policy 39 employees |
| (34) |
|
Stephen Hawke Senior Vice President Customer Service and Delivery 675 employees |
| (3) |
|
Cam Henderson Vice President and CIO Information Technology 272 employees |
| (36) |
|
Joe McArthur Vice President Customer Service & Distribution Support 870 employees |
| (28) |
|
Bill Nicholson Vice President Customers & Economic Development 55 employees |
Organization chart and employee counts are as of August 2008; employee counts exclude temporary employees. ( ) = Number of utility years experience.
31
Trojan Remand Case
PGE collected a “return on” Trojan from April 1995 through September 2000. Effective September 30, 2000 Trojan was removed from the balance sheet along with several largely offsetting regulatory liabilities (2000 Settlement)
As a result of the Oregon Court of Appeals remand of a 2002 OPUC order, the OPUC is addressing two issues:
What prices would have been in effect if, in 1995, the OPUC had interpreted the law to prohibit a return on the Trojan investment
Whether the OPUC has authority to engage in retroactive ratemaking
The OPUC has processed the remand in phases. The final phase, Phase 3, will review specific issues regarding the remand of the 2000 Settlement. The current schedule for Phase 3 calls for a Commission order on September 30, 2008
The OPUC has indicated that the September order will be a final comprehensive order addressing all Trojan-related issues
32
Trojan Class Action Suits
Two class action suits were filed in Marion County Circuit Court in January 2003 on behalf of current and former electric service customers. The suits seek to recover damages to customers for PGE charging OPUC-approved rates that included a “return on” the Company’s Trojan investment.
In August 2006, the Oregon Supreme Court issued a ruling abating the class action proceedings until the OPUC issues an order in the remand proceeding.
The Oregon Supreme Court concluded that the OPUC has primary jurisdiction and if the OPUC determines that it can provide a remedy to PGE customers, then the class action proceeding may be moot in whole or in part. But if the OPUC determines it cannot provide a remedy, and that decision becomes final, the court system may have a role to play.
The Oregon Supreme Court also ruled that the plaintiffs retain the right to return to the Marion County Circuit Court for disposition of whatever issues remain unresolved from the remanded OPUC proceedings, including the rights to attorney fees.
In October 2006, the Marion County Circuit Court issued an Order of Abatement abating the class actions but inviting motions to lift the abatement after one year.
In October 2007 the plaintiffs filed a motion asking the Circuit Court to lift the abatement.
April 10, 2008: Motion heard and abatement continued
June 3, 2008: Abatement continued with next status conference scheduled for October 15, 2008, and tentative trial date set for April 2009.
Class action suits request $260 million in relief (plus interest).
33
Diverse Mix of Resources — Hydro
Pelton
Round Butte
Deschutes River Projects
298 MW Net Capability
34
Diverse Mix of Resources — Hydro
Sullivan
River Mill
Faraday
Oak Grove
North Fork
Clackamas & Willamette River Projects
190 MW Net Capability
35
Hydro Supply
Diversity of river systems
12 plants on 5 river systems
| 7 |
|
owned, on 3 rivers |
| 5 |
|
contract, on 2 rivers |
High reliability
99%+ availability
Priest Rapids Wanapum Rocky Reach Wells
(Mid-Columbia contracts)
Columbia River
Portland
(contract)
Portland Sandy River
Deschutes River
Clackamas River
Pelton
Salem
Willamette River
RoundButte
Sullivan River Mill Faraday North Fork Oak Grove
36
Selective Water Withdrawal Update
Meet water quality standards for lower river & project reservoirs
Temperature
pH
Dissolved oxygen
Provide a downstream fish passage system
Screen 100% of powerhouse flows
Schedule
Begin construction September 2007
Complete construction December 2008
Start up March 2009
Operational April 2009
Selective Water Withdrawal
37
Diverse Mix of Resources — Natural Gas
Coyote Springs
234 MW Net
Capability
Beaver
505 MW Net
Capability
Port Westward
406 MW Net
Capability
38
Natural Gas Transportation
WCSB BRITISH COLUMBIA
AECO
Spectra B.C. Pipeline Southern Crossing Pipeline
Kingsgate
Huntingdon/Sumas WASHINGTON
Williams
(Northwest Pipeline Corp.)
Spokane
Seattle
K-B Pipeline
Beaver
Mist Storage Port Westward
Portland
Coyote IDAHO
TransCanada Gas
Transmission
Northwest
OREGON
Boise
Rockies
Medford
Malin
CALIFORNIA
NEVADA
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Diverse Mix of Resources — Coal
Boardman
380 MW Net
Capability
Colstrip 3 & 4
296 MW Net
Capability
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Boardman Coal Supply and Transportation
Ability to secure and deliver coal from Powder River Basin (Wyoming) and Montana
Multiple mine sources and delivery options provide reliable and competitive pricing
Secured rail contract through 2013, and currently completing an RFP for post-2008 supply
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Diverse Mix of Resources — Wind
Biglow Canyon Wind Farm I
Klondike II
Biglow Phase I
Commercial: December 2007
Total capacity: 125 MW
Turbines: 76 (1.65 MW / Turbine)
Vendor: Vestas
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Project Management — Exceeding Expectations
Port Westward
2008 Best Practices Award (Combined Cycle Journal)
Biglow Canyon Wind Farm Phase I
Willamette Falls/Sullivan Flow Control
Pelton Round Butte Selective Water Withdrawal
River Mill Fish Ladder
2008 Aon Build America Award
Marmot Dam
Grand Engineering Excellence Award
(American Council of Engineering Companies of Oregon)
Trojan Decommissioning
International Project of the Year Award (Project Management Institute)
Boardman Power Plant
Most Improved Power Plant in the Nation (FOMIS)
River Mill Fish Ladder
Sullivan Flow Control Biglow Construction Trojan Decommissioning Marmot Dam Removal
Generation Excellence
Optimal Performance
Safety
OR-OSHA Voluntary Protection Program
OR-OSHA SHARP Certification
SafeStart Program
Human Performance
Operations Training
Maintenance Training
Staffing & Succession Planning
Foreman & Supervisor Training
Boardman Simulator
Reliability
Industry Best Practices
Reliability Centered Maintenance
Contractor Quality Assurance
Process Imporvement
Operations Procedures Improvements
Root Cause & Corrective Action Program
Reliability Management Group
Process Mapping of Maximo Implementation
Work Management Review
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Strategic Location Within Western Grid
Access to liquid Western trading hubs
Sufficient rights to meet 1:2 peak requirement
Exploring opportunities for new transmission to meet demand and access new resources
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