THE HACKETT GROUP FINANCE BENCHMARK PROGRESS …

1 Filed: 2010-05-26 EB-2010-0008 Exhibit F5 Tab 3 Schedule 2 Page 1 of 1 THE HACKETT GROUP FINANCE BENCHMARK PROGRESS 1 REPORT 2 INTRODUCTION 3 In 2007, FINANCE partnered with the HACKETT GROUP to assess the efficiency and effectiveness 4 of its processes and procedures against benchmarked 2006 data. A follow-up mini 5 benchmarking exercise was undertaken in 2009 using 2008 data. This exercise focused on 6 areas related to resource allocation/utilization. 7 8 Certain information and statistics in the benchmarking report are considered by the HACKETT 9 GROUP to be sensitive, proprietary and confidential. For that reason, the HACKETT GROUP has 10 produced a report filed at Ex. F5-T3-S2 which does not include this proprietary information. 11 The sensitive information relates to certain definitions, questionnaires, process taxonomy, 12 research and programs related to a firm being considered world class.

2 The sensitive 13 information is considered by the HACKETT GROUP to be proprietary and trade secrets. OPG s 14 agreement with the HACKETT GROUP precludes the release of this confidential, proprietary 15 information. However, the report at Ex. F5-T3-S2 does show how OPG compares to the 16 median value of its peer GROUP , as defined by HACKETT . For the BENCHMARK PROGRESS Report - 17 FINANCE , the data from a GROUP of 11 energy companies was compiled and compared to the 18 data collected for OPG. 19 20 BENCHMARK PROGRESS Report FinancePresented to:The HACKETT GroupMay 6, 2010 Filed: 2010-05-26 EB-2010-0008 Exhibit F5-3-2 Page 2 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is Background Baseline External Comparisons Process GROUP Analysis Next StepsPage 3 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc.

3 All rights reserved. Reproduction of this document or any portion thereof without prior written consent is 4 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is Scope The data captured and represented in this report includes OPG s FINANCE operations Data was captured across 8 process groups as defined by HACKETT Revenue Cycle information was excluded from collection, analysis and comparisons The FTE, cost, and transaction data represents calendar 2008 All currency information is displayed in Canadian dollars (.944 conversion to USD)Page 5 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is demographics Utilities Peer GROUP Product linesOperating locationsCountriesEmployeesRevenue (CAD) Peer MedianCAD1 BCAD2 BCAD6 BCAD13B3K7K15K40K62040250100250201020505 Page 6 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc.

4 All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. HACKETT selected organizations that have relatively similar demographics and business complexity as Ontario Power Generation ( revenue, geographic footprint, regulatory environment, etc.) Peer GROUP comparisons in the report represent the median value of the custom peer companiesThe following is a list of the companies in the custom peer GROUP for Ontario Power Generation:Selected BENCHMARK participants included in the custom peer groupPeer Comparison Approach Ameren Corporation Areva CMS Energy Corporation Constellation Energy GROUP Dalkia FPL GROUP LCRA NorthWestern Corporation PSEG Energy Holdings Reliant Energy We EnergiesPage 7 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is 8 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc.

5 All rights reserved. Reproduction of this document or any portion thereof without prior written consent is Total = MillionFor 2008, OPG s FINANCE Costs were MillionOther cost Facilities, travel Supplies, trainingTechnology cost Computer processing MaintenanceOutsourcing cost Outside servicesLabor cost Wages (full-time and part-time) Overtime and bonuses Taxes and fringe benefitsProcess Cost: Million2006 Total = Million2006 Annual Revenue after Rebates = Million2008 Annual Revenue after Rebates = BillionPage 9 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is FTEs2006 Resource Allocation38%37%20%5%Transactional ProcessingControl & Risk ManagementPlanning and StrategyManagement and Administration40%35%19%6% andReportingTax MgmtTreasury MgmtComplianceMgmtPlng and PerMgmtBusinessAnalysisMgmt andAdmin2008 Staff Time Allocation by Process Groups2006 Staff Time Allocation by Process Groups2008 Resource andReportingTax MgmtTreasury MgmtComplianceMgmtPlng and PerMgmtBusinessAnalysisMgmt FTEsPage 10 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc.

6 All rights reserved. Reproduction of this document or any portion thereof without prior written consent is and Findings FINANCE cost as a percent of revenue is (vs..84% for 2006) Approximately 70% of FINANCE s costs are labor costs Technology and other costs are comparable to the peer GROUP Total staffing has decreased, but is slightly higher than peer Overall, areas where OPG compares favorably against peers include General Accounting, Tax Management, Treasury Management, Function Management/Administration, and Staff Experience and Training Transactional process staffing levels are lower than peer, but opportunities exist Higher wage rates and lower productivity cause cost per disbursement to be higher than peer 67% of vendor invoices are received electronically, which is better than peer 93% percent of journal entries are automated, with a days to close equal to peer Control and Risk Management processes use higher outsourcing investment Treasury outsourcing cost as a percent of revenue is.

7 004%, compared to .001% for peer Compliance process cost is 18% higher than peer, driven by staffing levels High investment in Planning & Strategy achieves mixed levels of effectiveness and efficiency Operations Managers do not enter budget information into an online application causing the budget cycle to be longer than required (128 days) Business analysts spend the majority of their time analyzing data, and less time collecting / compiling FINANCE staff receive more formal training 32 hours of formal training hours for FINANCE employees 55% of analysis staff is experienced in both FINANCE and operationsPage 11 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is ComparisonsPage 12 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is 2006 OPG 2008 Peer 2006 Peer 2008 Labor OutsourcingT echnologyOtherFinance Cost* as a Percent of Revenue before RebatesTotal Cost* Revenue Cycle excluded from both OPG & ComparisonsQuartile 1 Quartile 2 Quartile 3 Quartile 4 OPG OPG FINANCE Cost* as % of Revenue before Rebates vs.

8 Peer GROUP Quartile 13 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is 2006 OPG 2008 Peer 2006 Peer 2008 Labor OutsourcingT echnologyOtherFinance Cost* as a Percent of Revenue after RebatesTotal Cost* Revenue Cycle excluded from both OPG & ComparisonsQuartile 1 Quartile 2 Quartile 3 Quartile 4 OPG OPG FINANCE Cost* as % of Revenue after Rebates vs. Peer GROUP Quartile 14 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is 2008 Peer 2008T ransaction ProcessingControl and Risk ManagementPlanning and StrategyManagement and AdministrationFTEs* per OPG s Revenue after RebatesTotal FTEs and Process Category Allocation* Revenue Cycle excluded from both OPG & Comparisons40%44%19%19%35%31%6%6%OPGPeer GroupTransaction ProcessingControl and Risk ManagementPlanning and StrategyManagement and AdministrationFinance Resource Allocation*Page 15 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc.

9 All rights reserved. Reproduction of this document or any portion thereof without prior written consent is 2006 OPG 2008 Peer 2006 Peer 2008 FINANCE FTEs* per Billion of Revenue before Rebates* Revenue Cycle excluded from both OPG & ComparisonsPage 16 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is 2006 OPG 2008 Peer 2006 Peer 2008 FINANCE FTEs* per Billion of Revenue after Rebates* Revenue Cycle excluded from both OPG & ComparisonsPage 17 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is Technology InvestmentOPG s technology cost = 2006 OPG 2008 Peer 2006 Peer 2008 FINANCE Technology Cost as a Percent of RevenuePage 18 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc.

10 All rights reserved. Reproduction of this document or any portion thereof without prior written consent is 2006 OPG 2008 Peer 2006 Peer 2008 FINANCE s Other CostsFinance Other Cost as a Percent of RevenueOPG s other cost = Million Page 19 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is GROUP AnalysisPage 20 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is DisbursementsCash DisbursementsCost as a Percent of RevenueCash DisbursementsFTEs per Billion of 2006 OPG 2008 Peer 2006 Peer 2006 OPG 2008 Peer 2006 Peer 21 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is per Transaction (Invoices/T&E Reports)Percent A/P Transactions Require CorrectionTransactions per FTE Percent Electronic TransactionsCash 2006 OPG 2008 Peer 200811,71110,04112,713 OPG 2006 OPG 2008 Peer 2006 OPG 2008 Peer 200865%67%48%OPG 2006 OPG 2008 Peer 2008 Page 22 BENCHMARK PROGRESS Report FINANCE 2010 The HACKETT GROUP , Inc.