Donn Hanbidge, Ontario Power Generation Inc. - Speaker at the marcus evans Energy CFO Summit 2012 held in San Antonio, TX, delivered his presentation entitled Transforming OPG’s Finance Function

1. O N T A R I O P O W E R G E N E R A T I O N
O N T A R I O P O W E R G E N E R A T I O N
Transforming OPG s Finance Function
OPG’s
Donn Hanbidge, CFO
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Energy CFO Summit
February 7-8, 2012
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2. O N T A R I O P O W E R G E N E R A T I O N
Transforming OPG’s Finance function
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Improving Efficiency & Effectiveness
Continuous I
C ti Improvement
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The Road Ahead
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3. O N T A R I O P O W E R G E N E R A T I O N
OPG’s Corporate Profile
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100% owned by the Province
of Ontario
19,791 MW generating
capacity
65 hydroelectric, 3 nuclear
and 5 thermal stations
Produce ~60% of Ontario’s
electricity
~11,000 employees
Investment Grade credit ratings
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4. O N T A R I O P O W E R G E N E R A T I O N
IMPROVING EFFICIENCY AND
EFFECTIVENESS

5. O N T A R I O P O W E R G E N E R A T I O N
Improving Efficiency & Effectiveness
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Decentralized & Centralized Services &
Full-Service Decentralized Controllership
Multiple locations Leading edge technology &
high
hi h process automation
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Different application
platforms Ease of access to information
Manual processes Valued business partner
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6. O N T A R I O P O W E R G E N E R A T I O N
Improvement Initiatives
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Invest in technology
• Consolidate applications to one common platform
• Increase process automation
• Exploit leading edge technology
Centralize transaction processing
C t li t ti i
Standardize and simplify processes
Optimize resource allocation
Improve access to information
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7. O N T A R I O P O W E R G E N E R A T I O N
1st Quartile Efficiency & Effectiveness
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8. O N T A R I O P O W E R G E N E R A T I O N
World-Class Performance
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9. O N T A R I O P O W E R G E N E R A T I O N
CONTINUOUS IMPROVEMENT

10. O N T A R I O P O W E R G E N E R A T I O N
Focus on Continuous Improvement
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11. O N T A R I O P O W E R G E N E R A T I O N
THE ROAD AHEAD

12. O N T A R I O P O W E R G E N E R A T I O N
External Challenges
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Low growth in electricity demand
Low market prices
Decreasing capacity and electricity
generation
Higher expectations to achieve an appropriate
return on equity, while limiting impacts on
customer rates
Urgent need to align cost structure with declining
capacity and production
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13. O N T A R I O P O W E R G E N E R A T I O N
Organizational Design
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14. O N T A R I O P O W E R G E N E R A T I O N
Our Transformation Process
Start with a clean slate
Focus on transformational changes
Establish clear accountabilities
Eliminate any duplication
Be
B specific about work that will stop
ifi b t k th t ill t
Focus cost reduction efforts on non-core
work areas
Choose lowest cost, most efficient approach
Maintain focus on safe, reliable electricity generation
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15. O N T A R I O P O W E R G E N E R A T I O N
Finance Accountabilities
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16. O N T A R I O P O W E R G E N E R A T I O N
Finance Service Delivery Model
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17. O N T A R I O P O W E R G E N E R A T I O N
Structural Improvements
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Realign organization and roles to centre-led
organizational
organi ational model
Leverage Centres of Excellence
• Investment Planning, Management
and Performance Reporting, and Corporate
Business Planning
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Expand Shared Financial Services Centre that will
deliver centralized accounting & transactional services
Focused business partner support by leveraging the use
of Centres of Excellence, centralized services, and
greater use of self-service
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18. O N T A R I O P O W E R G E N E R A T I O N
Process Improvements
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Simplify governance and policies
• Business Case Summary process
• Organizational Authority Register
Streamline business planning process
• Improve integration with strategic planning
and capital allocation process
d it l ll ti
• Reduce detail and condense timing
Standardize
St d di management reporting
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• Standard suite of reports & eliminate ad-hoc reporting
• Automate delivery methods
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19. O N T A R I O P O W E R G E N E R A T I O N
Process Improvements
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Centralize performance & scorecard reporting
• Reduce effort to create multiple
performance and scorecard reports
• Improve alignment of measures
and targets
Transaction processing
• Automate matching and posting of invoices
Increase effectiveness of Internal Audit
I ff ti fI t l A dit
• Extend audit cycle for low risk business processes
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Increase use of control self-assessment
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20. O N T A R I O P O W E R G E N E R A T I O N
People & Rewards
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Leadership
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Cu tu e and eade s p
Culture a d leadership
behaviours
Talent
Align objectives and
accomplishments with rewards
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21. O N T A R I O P O W E R G E N E R A T I O N
Future State Finance Function
A trusted business partner driving value
Efficient service delivery model
• Leverage expertise in COEs
and Shared services
• Streamline governance & processes
A World-Class Finance organization
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22. O N T A R I O P O W E R G E N E R A T I O N
World-Class Performance – A Roadmap
p
Benchmark & undertake
gap analysis
Utilize bl k h t
Utili blank sheet
approach
Map out journey to World-Class
Frequent communication with stakeholders
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