Portland General Electric Co · NYSE:POR
Portland General Electric — Investor Presentation (October 2003)
16 slides from Portland General Electric's investor presentation, Oct 29, 2003
Slide 1: Portland General Electric 2003 RFP: Presentation of the Independent Observer
Portland General Electric 2003 RFP Presentation of the Independent Observer IRP Workshop October 29, 2003 Merrimack Energy Group, Inc. Merrimack MEnergy
Slide 2: Role of the Independent Observer
Role of the Independent Observer ▼ Evaluate the scoring criteria developed by PGE to confirm that they do not inappropriately bias the process in favor of an equity investment by PGE ▼ Evaluate whether the scoring criteria has been applied in a fair and unbiased manner during the bid evaluation proc
Slide 3: Criteria for Evaluating PGE's Performance
Criteria for Evaluating PGE’s Performance ▼ Consistency with regard to the overall characteristics of an effective competitive bidding process ▼ Consistency with regard to regulatory guidelines ▼ Specific criteria associated with the actual implementation of the process from the perspective of: – Fa
Slide 4: Activities of Merrimack Energy in the Solicitation Process
Activities of Merrimack Energy in the Solicitation Process Activities Performed Activities Not Performed • On-site nearly 50% of the time during the • Independently model all bids evaluation process • Conducted non-price assessment for all bids • Access to all RFP files • Conducted independent credi
Slide 5: Recent Trends in Competitive Bidding Processes
Recent Trends in Competitive Bidding Processes ▼ Integrated evaluation systems more the norm ▼ Price-related criteria predominant selection criteria – Non-price used to ensure projects are viable – Non-price more objective ▼ Utilities seeking more flexibility in power procurement ▼ RFP, Contract, an
Slide 6: Characteristics of an Effective Competitive Bidding Process
Characteristics of an Effective Competitive Bidding Process ▼ The process should be fair and equitable to all bidders ▼ Ensure that competitive benefits result ▼ Encourage broad participation from potential bidders ▼ Documents should describe guidelines and criteria for submitting proposals and eval
Slide 7: Characteristics of PGE's Approach
Characteristics of PGE’s Approach ▼ Evaluation criteria and weights based on iterative process with range of input ▼ Processes/Procedures in place prior to receipt of bids – Project team defined – Evaluation of test bids – Bid evaluation guidelines/criteria clearly defined ▼ Multiple reviewers for e
Slide 8: Assessment of Bias in the Evaluation Criteria
Assessment of Bias in the Evaluation Criteria ▼ Assessment based on two perspectives: – Compare criteria to industry standards – Evaluate the weights for each criteria to ensure that the process is not unduly biased toward ownership options ▼ Bias associated with O&M Reliability Characteristics – 9
Slide 9: Observations at Different Stages of the Solicitation Process
Observations at Different Stages of the Solicitation Process ▼ Pre-Receipt of Bids ▼ Receipt of Bids ▼ Pre-Qualification ▼ Non-Price Assessment ▼ Price Assessment ▼ Combination of price and non-price evaluation ▼ Short List Merrimack MEnergy 9
Slide 10: Pre-Receipt of Bids
Pre-Receipt of Bids ▼ PGE established evaluation teams and criteria ▼ Bid evaluation process and procedures clearly defined ▼ PGE conducted training sessions for project team ▼ Scorecards for capacity and energy bids developed and refined ▼ Evaluation criteria and weights based on an iterative proce
Slide 11: Receipt of Bids
Receipt of Bids ▼ Bids were date stamped and classified into Energy, Capacity and Ownership and numbered ▼ Level of response was significant – Over 100 proposals – 45 different bidders – Diversity of options relative to type, technology, size, and term ▼ Bids were secured ▼ Process in place for “sig
Slide 12: Pre-Qualification Stage
Pre-Qualification Stage ▼ All bids evaluated relative to threshold criteria ▼ Sixteen bids originally rejected – 3 capacity bids – 7 energy bids – 6 ownership bids ▼ Based on PGE/Merrimack discussions one bid was removed from list ▼ Reasons for bid rejection included: – Failure to meet commercial in
Slide 13: Non-Price Assessment
Non-Price Assessment ▼ Evaluation criteria and weightings technology specific – Ownership options evaluated using energy bid criteria ▼ At least two members of PGE’s evaluation team scored each bid ▼ All eligible bids were scored ▼ Every point was contested ▼ Merrimack Energy reviewed and evaluated
Slide 14: Price Evaluation
Price Evaluation ▼ Price evaluation took longer than expected – Uncertain pricing formulas – Transmission cost complexities – Gas transportation cost detail ▼ Different methodologies for capacity and other bids ▼ Energy/Ownership model based on traditional utility revenue requirements ▼ All bids eva
Slide 15: Combined Price and Non-price
Combined Price and Non-price ▼ Price and non-price points combined and bids categorized ▼ Bids ranked by point range ▼ Merrimack Energy reviewed all final scores ▼ Reviewed bids to determine the following: – Potential bias between ownership and forward contracts – Maintenance of original point alloc
Slide 16: Conclusions
Conclusions Positives Negatives ▼ Very comprehensive and fair ▼ Original schedule was very process optimistic ▼ All bids afforded same level of ▼ Free form price schedules scrutiny required follow-up information ▼ All points contested from the bidders ▼ Minimum biases present in ▼ Role of portfolio
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