10. GAS RESERVES

Our utility gas reserves are stated at cost, net of regulatory amortization, with the associated deferred tax benefits recorded as liabilities on the balance sheet.

We entered into agreements with Encana Oil & Gas (USA) Inc. (Encana) to develop physical gas reserves. These agreements are intended to provide long-term gas price protection for our utility customers rather than serving as a source of gas supply. Encana began drilling in 2011 under these agreements, and gas which is currently being produced from our working interests in these gas fields is sold by Encana at then prevailing market prices, with revenues from such sales, net of associated production costs, credited to our cost of gas. The cost of gas, including a carrying cost for the net rate base investment, is part of our annual Oregon PGA filing, which allows us to recover our costs through customer rates in a manner previously approved by the OPUC. This transaction acted to hedge the cost of gas for approximately 3% of our gas supplies for the three months ended March 31, 2013. The following table outlines our net investment at March 31, 2013 and 2012 and December 31, 2012:



	March 31,				December 31,
In thousands	2013		2012		2012
Gas reserves, current	$	14,286	$	6,732	$	14,966
Gas reserves, non-current	110,033		63,546		92,179
Less: Accumulated amortization	9,864		2,440		7,486
Total gas reserves	114,455		67,838		99,659
Less: Deferred taxes on gas reserves	32,907		22,047		28,329
Net investment in gas reserves	$	81,548	$	45,791	$	71,330