[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Oregon | 93-0256820 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer [x] | Accelerated filer [ ] | Non-accelerated filer [ ] | Smaller reporting company [ ] |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 6. | ||
Abbreviation or Acronym | Definition | |
AUT | Annual Power Cost Update Tariff | |
Biglow Canyon | Biglow Canyon wind farm | |
Carty | Carty Generating Station natural gas-fired generating plant | |
Cascade Crossing | Cascade Crossing Transmission Project | |
Colstrip | Colstrip Steam Electric Station (coal-fired generating plant) | |
EFSA | Equity forward sale agreement | |
EPA | United States Environmental Protection Agency | |
FERC | Federal Energy Regulatory Commission | |
FMB | First Mortgage Bond | |
IRP | Integrated Resource Plan | |
kV | Kilovolt = one thousand volts of electricity | |
Moody’s | Moody’s Investors Service | |
MW | Megawatts | |
MWa | Average megawatts | |
MWh | Megawatt hours | |
NVPC | Net Variable Power Costs | |
OPUC | Public Utility Commission of Oregon | |
PCAM | Power Cost Adjustment Mechanism | |
PW2 | Port Westward Unit 2 natural gas-fired generating plant | |
RFP | Request for proposal | |
S&P | Standard and Poor’s Ratings Services | |
SEC | United States Securities and Exchange Commission | |
Tucannon River | Tucannon River wind farm | |
Trojan | Trojan nuclear power plant |
Item 1. | Financial Statements. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues, net | $ | 403 | $ | 413 | $ | 876 | $ | 892 | |||||||
Operating expenses: | |||||||||||||||
Purchased power and fuel | 156 | 156 | 348 | 351 | |||||||||||
Production and distribution | 64 | 51 | 115 | 104 | |||||||||||
Cascade Crossing transmission project | 52 | — | 52 | — | |||||||||||
Administrative and other | 55 | 56 | 109 | 110 | |||||||||||
Depreciation and amortization | 62 | 63 | 124 | 125 | |||||||||||
Taxes other than income taxes | 25 | 26 | 52 | 53 | |||||||||||
Total operating expenses | 414 | 352 | 800 | 743 | |||||||||||
Income (loss) from operations | (11 | ) | 61 | 76 | 149 | ||||||||||
Other income (expense): | |||||||||||||||
Allowance for equity funds used during construction | 2 | 2 | 4 | 3 | |||||||||||
Miscellaneous income (expense), net | 1 | (1 | ) | 2 | 2 | ||||||||||
Other income, net | 3 | 1 | 6 | 5 | |||||||||||
Interest expense | 25 | 27 | 50 | 55 | |||||||||||
Income (loss) before income tax expense (benefit) | (33 | ) | 35 | 32 | 99 | ||||||||||
Income tax expense (benefit) | (11 | ) | 9 | 6 | 24 | ||||||||||
Net income (loss) and Comprehensive income (loss) | (22 | ) | 26 | 26 | 75 | ||||||||||
Less: net loss attributable to noncontrolling interests | — | — | (1 | ) | — | ||||||||||
Net income (loss) and Comprehensive income (loss) attributable to Portland General Electric Company | $ | (22 | ) | $ | 26 | $ | 27 | $ | 75 | ||||||
Weighted-average shares outstanding (in thousands): | |||||||||||||||
Basic | 75,935 | 75,507 | 75,772 | 75,465 | |||||||||||
Diluted | 75,935 | 75,517 | 75,893 | 75,479 | |||||||||||
Earnings (loss) per share—basic and diluted | $ | (0.29 | ) | $ | 0.34 | $ | 0.36 | $ | 0.99 | ||||||
Dividends declared per common share | $ | 0.275 | $ | 0.270 | $ | 0.545 | $ | 0.535 | |||||||
See accompanying notes to condensed consolidated financial statements. | |||||||||||||||
June 30, 2013 | 12/31/2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 119 | $ | 12 | |||
Accounts receivable, net | 137 | 152 | |||||
Unbilled revenues | 73 | 97 | |||||
Inventories | 72 | 78 | |||||
Margin deposits | 34 | 46 | |||||
Regulatory assets—current | 114 | 144 | |||||
Other current assets | 78 | 93 | |||||
Total current assets | 627 | 622 | |||||
Electric utility plant, net | 4,532 | 4,392 | |||||
Regulatory assets—noncurrent | 519 | 524 | |||||
Nuclear decommissioning trust | 37 | 38 | |||||
Non-qualified benefit plan trust | 32 | 32 | |||||
Other noncurrent assets | 49 | 62 | |||||
Total assets | $ | 5,796 | $ | 5,670 | |||
See accompanying notes to condensed consolidated financial statements. |
June 30, 2013 | 12/31/2012 | ||||||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 107 | $ | 98 | |||
Liabilities from price risk management activities—current | 103 | 127 | |||||
Short-term debt | — | 17 | |||||
Current portion of long-term debt | 50 | 100 | |||||
Accrued expenses and other current liabilities | 175 | 179 | |||||
Total current liabilities | 435 | 521 | |||||
Long-term debt, net of current portion | 1,686 | 1,536 | |||||
Regulatory liabilities—noncurrent | 796 | 765 | |||||
Deferred income taxes | 571 | 588 | |||||
Unfunded status of pension and postretirement plans | 251 | 247 | |||||
Non-qualified benefit plan liabilities | 103 | 102 | |||||
Asset retirement obligations | 96 | 94 | |||||
Liabilities from price risk management activities—noncurrent | 78 | 73 | |||||
Other noncurrent liabilities | 18 | 14 | |||||
Total liabilities | 4,034 | 3,940 | |||||
Commitments and contingencies (see notes) | |||||||
Equity: | |||||||
Portland General Electric Company shareholders’ equity: | |||||||
Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of June 30, 2013 and December 31, 2012 | — | — | |||||
Common stock, no par value, 160,000,000 shares authorized; 77,362,458 and 75,556,272 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively | 889 | 841 | |||||
Accumulated other comprehensive loss | (6 | ) | (6 | ) | |||
Retained earnings | 878 | 893 | |||||
Total Portland General Electric Company shareholders’ equity | 1,761 | 1,728 | |||||
Noncontrolling interests’ equity | 1 | 2 | |||||
Total equity | 1,762 | 1,730 | |||||
Total liabilities and equity | $ | 5,796 | $ | 5,670 | |||
See accompanying notes to condensed consolidated financial statements. |
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 26 | $ | 75 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 124 | 125 | |||||
Cascade Crossing transmission project | 52 | — | |||||
Pension and other postretirement benefits | 20 | 14 | |||||
Decrease in net liabilities from price risk management activities | (16 | ) | (64 | ) | |||
Regulatory deferral—price risk management activities | 16 | 63 | |||||
Regulatory deferral of settled derivative instruments | 10 | 4 | |||||
Decoupling mechanism deferrals, net of amortization | (5 | ) | 4 | ||||
Allowance for equity funds used during construction | (4 | ) | (3 | ) | |||
Power cost deferrals, net of amortization | (3 | ) | 4 | ||||
Deferred income taxes | (1 | ) | 43 | ||||
Other non-cash income and expenses, net | 13 | 7 | |||||
Changes in working capital: | |||||||
Decrease in receivables | 39 | 42 | |||||
Decrease in margin deposits, net | 12 | 11 | |||||
Income tax refund received | — | 8 | |||||
Decrease in payables and accrued liabilities | (13 | ) | (57 | ) | |||
Other working capital items, net | 11 | (8 | ) | ||||
Other, net | (2 | ) | (1 | ) | |||
Net cash provided by operating activities | 279 | 267 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (260 | ) | (137 | ) | |||
Proceeds from sale of solar power facility | — | 10 | |||||
Sales of nuclear decommissioning trust securities | 14 | 13 | |||||
Purchases of nuclear decommissioning trust securities | (15 | ) | (13 | ) | |||
Other, net | 2 | (1 | ) | ||||
Net cash used in investing activities | (259 | ) | (128 | ) | |||
See accompanying notes to condensed consolidated financial statements. |
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | $ | 150 | $ | — | |||
Payments on long-term debt | (50 | ) | — | ||||
Proceeds from issuance of common stock, net of issuance costs | 47 | — | |||||
Borrowings on short-term debt | 35 | — | |||||
Payments on short-term debt | (35 | ) | — | ||||
Maturities of commercial paper, net | (17 | ) | (30 | ) | |||
Dividends paid | (41 | ) | (41 | ) | |||
Debt issuance costs | (2 | ) | — | ||||
Net cash provided by (used in) financing activities | 87 | (71 | ) | ||||
Increase in cash and cash equivalents | 107 | 68 | |||||
Cash and cash equivalents, beginning of period | 12 | 6 | |||||
Cash and cash equivalents, end of period | $ | 119 | $ | 74 | |||
Supplemental cash flow information is as follows: | |||||||
Cash paid for interest, net of amounts capitalized | $ | 45 | $ | 48 | |||
Cash paid for income taxes | 6 | — | |||||
Non-cash investing and financing activities: | |||||||
Accrued dividends payable | 21 | 21 | |||||
Accrued capital additions | 34 | 14 | |||||
Preliminary engineering transferred to Construction work in progress from Other noncurrent assets | 9 | — | |||||
See accompanying notes to condensed consolidated financial statements. |
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Balance as of beginning of period | $ | 5 | $ | 6 | |||
Provision, net | 3 | 4 | |||||
Amounts written off, less recoveries | (3 | ) | (4 | ) | |||
Balance as of end of period | $ | 5 | $ | 6 |
June 30, 2013 | December 31, 2012 | ||||||
Prepaid expenses | $ | 33 | $ | 37 | |||
Current deferred income tax asset | 38 | 51 | |||||
Assets from price risk management activities | 3 | 4 | |||||
Other | 4 | 1 | |||||
Other current assets | $ | 78 | $ | 93 |
June 30, 2013 | December 31, 2012 | ||||||
Electric utility plant | $ | 6,913 | $ | 6,811 | |||
Construction work in progress | 267 | 140 | |||||
Total cost | 7,180 | 6,951 | |||||
Less: accumulated depreciation and amortization | (2,648 | ) | (2,559 | ) | |||
Electric utility plant, net | $ | 4,532 | $ | 4,392 |
June 30, 2013 | December 31, 2012 | ||||||||||||||
Current | Noncurrent | Current | Noncurrent | ||||||||||||
Regulatory assets: | |||||||||||||||
Price risk management | $ | 101 | $ | 77 | $ | 123 | $ | 71 | |||||||
Pension and other postretirement plans | — | 308 | — | 321 | |||||||||||
Deferred income taxes | — | 76 | — | 80 | |||||||||||
Deferred broker settlements | 9 | 1 | 20 | 1 | |||||||||||
Debt reacquisition costs | — | 19 | — | 22 | |||||||||||
Deferred capital projects | — | 24 | — | 16 | |||||||||||
Other | 4 | 14 | 1 | 13 | |||||||||||
Total regulatory assets | $ | 114 | $ | 519 | $ | 144 | $ | 524 | |||||||
Regulatory liabilities: | |||||||||||||||
Asset retirement removal costs | $ | — | $ | 720 | $ | — | $ | 692 | |||||||
Asset retirement obligations | — | 38 | — | 39 | |||||||||||
Power cost adjustment mechanism | 3 | — | 6 | — | |||||||||||
Other | 4 | 38 | 6 | 34 | |||||||||||
Total regulatory liabilities | $ | 7 | (1) | $ | 796 | $ | 12 | (1) | $ | 765 |
June 30, 2013 | December 31, 2012 | ||||||
Accrued employee compensation and benefits | $ | 39 | $ | 46 | |||
Accrued interest payable | 22 | 23 | |||||
Accrued taxes payable | 24 | 21 | |||||
Accrued dividends payable | 21 | 21 | |||||
Regulatory liabilities—current | 7 | 12 | |||||
Other | 62 | 56 | |||||
Total accrued expenses and other current liabilities | $ | 175 | $ | 179 |
• | A $400 million syndicated credit facility, which is scheduled to terminate in November 2017; and |
• | A $300 million syndicated credit facility, which is scheduled to terminate in December 2016. |
Three Months Ended June 30, | |||||||||||||||||||||||
Defined Benefit Pension Plan | Other Postretirement Benefits | Non-Qualified Benefit Plans | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Service cost | $ | 4 | $ | 3 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Interest cost | 8 | 8 | 1 | 1 | 1 | — | |||||||||||||||||
Expected return on plan assets | (10 | ) | (10 | ) | (1 | ) | — | — | — | ||||||||||||||
Amortization of prior service cost | — | — | 1 | — | — | — | |||||||||||||||||
Amortization of net actuarial loss | 6 | 4 | — | — | — | — | |||||||||||||||||
Net periodic benefit cost | $ | 8 | $ | 5 | $ | 1 | $ | 1 | $ | 1 | $ | — |
Six Months Ended June 30, | |||||||||||||||||||||||
Defined Benefit Pension Plan | Other Postretirement Benefits | Non-Qualified Benefit Plans | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Service cost | $ | 8 | $ | 6 | $ | 1 | $ | 1 | $ | — | $ | — | |||||||||||
Interest cost | 16 | 16 | 2 | 2 | 1 | 1 | |||||||||||||||||
Expected return on plan assets | (20 | ) | (20 | ) | (1 | ) | — | — | — | ||||||||||||||
Amortization of prior service cost | — | — | 1 | — | — | — | |||||||||||||||||
Amortization of net actuarial loss | 12 | 8 | — | — | — | — | |||||||||||||||||
Net periodic benefit cost | $ | 16 | $ | 10 | $ | 3 | $ | 3 | $ | 1 | $ | 1 |
Level 1 | Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. |
Level 2 | Pricing inputs include those that are directly or indirectly observable in the marketplace as of the reporting date. |
Level 3 | Pricing inputs include significant inputs that are unobservable for the asset or liability. |
As of June 30, 2013 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Nuclear decommissioning trust: (1) | |||||||||||||||
Money market funds | $ | — | $ | 14 | $ | — | $ | 14 | |||||||
Debt securities: | |||||||||||||||
Domestic government | 7 | 8 | — | 15 | |||||||||||
Corporate credit | — | 8 | — | 8 | |||||||||||
Non-qualified benefit plan trust: (2) | |||||||||||||||
Equity securities—Domestic | 3 | 3 | — | 6 | |||||||||||
Debt securities—Domestic government | 2 | — | — | 2 | |||||||||||
Assets from price risk management activities: (1) (3) | |||||||||||||||
Electricity | — | 2 | — | 2 | |||||||||||
Natural gas | — | 1 | — | 1 | |||||||||||
$ | 12 | $ | 36 | $ | — | $ | 48 | ||||||||
Liabilities from price risk management activities: (1) (3) | |||||||||||||||
Electricity | $ | — | $ | 45 | $ | 42 | $ | 87 | |||||||
Natural gas | — | 80 | 14 | 94 | |||||||||||
$ | — | $ | 125 | $ | 56 | $ | 181 |
(1) | Activities are subject to regulation, with certain gains and losses deferred pursuant to regulatory accounting and included in Regulatory assets or Regulatory liabilities as appropriate. |
(2) | Excludes insurance policies of $24 million, which are recorded at cash surrender value. |
(3) | For further information, see Note 4, Price Risk Management. |
As of December 31, 2012 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Nuclear decommissioning trust: (1) | |||||||||||||||
Money market funds | $ | — | $ | 15 | $ | — | $ | 15 | |||||||
Debt securities: | |||||||||||||||
Domestic government | 7 | 8 | — | 15 | |||||||||||
Corporate credit | — | 8 | — | 8 | |||||||||||
Non-qualified benefit plan trust: (2) | |||||||||||||||
Money market funds | — | 2 | — | 2 | |||||||||||
Equity securities: | |||||||||||||||
Domestic | 2 | 2 | — | 4 | |||||||||||
International | 1 | — | — | 1 | |||||||||||
Debt securities—Domestic government | 2 | — | — | 2 | |||||||||||
Assets from price risk management activities: (1) (3) | |||||||||||||||
Electricity | — | 1 | — | 1 | |||||||||||
Natural gas | — | 3 | 2 | 5 | |||||||||||
$ | 12 | $ | 39 | $ | 2 | $ | 53 | ||||||||
Liabilities — Liabilities from price risk management activities: (1) (3) | |||||||||||||||
Electricity | $ | — | $ | 72 | $ | 10 | $ | 82 | |||||||
Natural gas | — | 110 | 8 | 118 | |||||||||||
$ | — | $ | 182 | $ | 18 | $ | 200 |
(1) | Activities are subject to regulation, with certain gains and losses deferred pursuant to regulatory accounting and included in Regulatory assets or Regulatory liabilities as appropriate. |
(2) | Excludes insurance policies of $23 million, which are recorded at cash surrender value. |
(3) | For further information, see Note 4, Price Risk Management. |
Significant | Price per Unit | |||||||||||||||||||||||
Fair Value | Valuation | Unobservable | Weighted | |||||||||||||||||||||
Commodity Contracts | Assets | Liabilities | Technique | Input | Low | High | Average | |||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Natural gas financial swaps | $ | — | $ | 14 | Discounted cash flow | Natural gas forward price (per Decatherm) | $ | 3.38 | $ | 5.27 | $ | 4.12 | ||||||||||||
Electricity financial swaps | — | 14 | Discounted cash flow | Electricity forward price (per MWh) | 10.83 | 45.71 | 37.31 | |||||||||||||||||
Electricity physical forward purchase | — | 28 | Discounted cash flow | Electricity forward price (per MWh) | 9.88 | 49.37 | 35.00 | |||||||||||||||||
$ | — | $ | 56 | |||||||||||||||||||||
Fair Value | Price per Unit | |||||||||||||||||||||||
Commodity Contracts | Assets | Liabilities | Valuation Technique | Significant Unobservable Input | Low | High | Weighted Average | |||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Natural gas financial swaps | $ | 2 | $ | 8 | Discounted cash flow | Natural gas forward price (per Decatherm) | $ | 3.67 | $ | 5.21 | $ | 4.28 | ||||||||||||
Electricity financial swaps | — | 10 | Discounted cash flow | Electricity forward price (per MWh) | 7.12 | 51.72 | 41.14 | |||||||||||||||||
$ | 2 | $ | 18 | |||||||||||||||||||||
Significant Unobservable Input | Position | Change to Input | Impact on Fair Value Measurement | |||
Market price | Buy | Increase (decrease) | Gain (loss) | |||
Market price | Sell | Increase (decrease) | Loss (gain) | |||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Balance as of the beginning of the period | $ | 45 | $ | 95 | $ | 16 | $ | 79 | |||||||
Net realized and unrealized losses (gains) (1) | 11 | (7 | ) | 15 | 11 | ||||||||||
Purchases | — | — | 25 | — | |||||||||||
Issuances | — | — | — | (1 | ) | ||||||||||
Transfers out of Level 3 to Level 2 | — | — | — | (1 | ) | ||||||||||
Balance as of the end of the period | $ | 56 | $ | 88 | $ | 56 | $ | 88 |
(1) | Contains nominal amounts of realized losses, net. Both realized and unrealized losses (gains) are recorded in Purchased power and fuel expense in the condensed consolidated statements of operations of which the unrealized portion is fully offset by the effects of regulatory accounting until settlement of the underlying transactions. |
June 30, 2013 | December 31, 2012 | |||||||
Current assets: | ||||||||
Commodity contracts: | ||||||||
Electricity | $ | 2 | $ | 1 | ||||
Natural gas | 1 | 3 | ||||||
Total current derivative assets | 3 | (1) | 4 | (1) | ||||
Noncurrent assets: | ||||||||
Commodity contracts—Natural gas | — | (2) | 2 | (2) | ||||
Total derivative assets not designated as hedging instruments | $ | 3 | $ | 6 | ||||
Total derivative assets | $ | 3 | $ | 6 | ||||
Current liabilities: | ||||||||
Commodity contracts: | ||||||||
Electricity | $ | 43 | $ | 44 | ||||
Natural gas | 60 | 83 | ||||||
Total current derivative liabilities | 103 | 127 | ||||||
Noncurrent liabilities: | ||||||||
Commodity contracts: | ||||||||
Electricity | 44 | 38 | ||||||
Natural gas | 34 | 35 | ||||||
Total noncurrent derivative liabilities | 78 | 73 | ||||||
Total derivative liabilities not designated as hedging instruments | $ | 181 | $ | 200 | ||||
Total derivative liabilities | $ | 181 | $ | 200 |
(1) | Included in Other current assets on the condensed consolidated balance sheets. |
(2) | Included in Other noncurrent assets on the condensed consolidated balance sheets. |
June 30, 2013 | December 31, 2012 | ||||||||
Commodity contracts: | |||||||||
Electricity | 10 | MWh | 11 | MWh | |||||
Natural gas | 103 | Decatherms | 86 | Decatherms | |||||
Oil | (1 | ) | Gallons | — | Gallons | ||||
Foreign currency | $ | 12 | Canadian | $ | 7 | Canadian |
Gross | Gross | Net | Gross Amounts Not Offset in | |||||||||||||||||||||
Amounts | Amounts | Amounts | Consolidated Balance Sheet | |||||||||||||||||||||
Recognized | Offset | Presented | Derivatives | Cash Collateral(1) | Net Amount | |||||||||||||||||||
As of June 30, 2013: | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Commodity contracts: | ||||||||||||||||||||||||
Electricity(2) | $ | 15 | $ | — | $ | 15 | $ | (15 | ) | $ | — | $ | — | |||||||||||
Natural gas(2) | 4 | — | 4 | (4 | ) | — | — | |||||||||||||||||
$ | 19 | $ | — | $ | 19 | $ | (19 | ) | $ | — | $ | — | ||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Commodity contracts: | ||||||||||||||||||||||||
Electricity(2) | $ | 20 | $ | — | $ | 20 | $ | (20 | ) | $ | — | $ | — | |||||||||||
Natural gas(2) | 7 | — | 7 | (7 | ) | — | — | |||||||||||||||||
$ | 27 | $ | — | $ | 27 | $ | (27 | ) | $ | — | $ | — |
(1) | As of June 30, 2013 and December 31, 2012, the Company had collateral posted of $3 million and $18 million, respectively, which consists entirely of letters of credit. |
(2) | Included in Liabilities from price risk management activities—current and Liabilities from price risk management activities—noncurrent. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Commodity contracts: | |||||||||||||||
Electricity | $ | 10 | $ | (10 | ) | $ | 18 | $ | 43 | ||||||
Natural Gas | 28 | (11 | ) | 20 | 25 |
2013 | 2014 | 2015 | 2016 | Total | |||||||||||||||
Commodity contracts: | |||||||||||||||||||
Electricity | $ | 12 | $ | 43 | $ | 24 | $ | 6 | $ | 85 | |||||||||
Natural gas | 43 | 35 | 9 | 6 | 93 | ||||||||||||||
Net unrealized loss | $ | 55 | $ | 78 | $ | 33 | $ | 12 | $ | 178 |
June 30, 2013 | December 31, 2012 | ||||
Assets from price risk management activities: | |||||
Counterparty A | 16 | % | — | % | |
Counterparty B | 13 | 6 | |||
Counterparty C | 10 | — | |||
Counterparty D | 4 | 11 | |||
Counterparty E | 4 | 21 | |||
Counterparty F | 2 | 13 | |||
Counterparty G | 1 | 10 | |||
50 | % | 61 | % | ||
Liabilities from price risk management activities: | |||||
Counterparty H | 16 | % | 24 | % | |
Counterparty I | 15 | — | |||
Counterparty A | 10 | 14 | |||
Counterparty J | 8 | 10 | |||
49 | % | 48 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Numerator (in millions): | |||||||||||||||
Net income (loss) attributable to Portland General Electric Company common shareholders | $ | (22 | ) | $ | 26 | $ | 27 | $ | 75 | ||||||
Denominator (in thousands): | |||||||||||||||
Weighted-average common shares outstanding—basic | 75,935 | 75,507 | 75,772 | 75,465 | |||||||||||
Dilutive effect of shares issuable pursuant to the EFSA, unvested restricted stock units, and employee stock purchase plan shares | — | 10 | 121 | 14 | |||||||||||
Weighted-average common shares outstanding—diluted | 75,935 | 75,517 | 75,893 | 75,479 | |||||||||||
Earnings (loss) per share—basic and diluted | $ | (0.29 | ) | $ | 0.34 | $ | 0.36 | $ | 0.99 |
Portland General Electric Company Shareholders’ Equity | |||||||||||||||||||
Common Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Noncontrolling Interests’ Equity | ||||||||||||||||
Shares | Amount | ||||||||||||||||||
Balances as of December 31, 2012 | 75,556,272 | $ | 841 | $ | (6 | ) | $ | 893 | $ | 2 | |||||||||
Issuance of common stock, net of issuance costs of $2 | 1,665,000 | 47 | — | — | — | ||||||||||||||
Issuance of shares pursuant to equity-based plans | 141,186 | — | — | — | — | ||||||||||||||
Stock-based compensation | — | 1 | — | — | — | ||||||||||||||
Dividends declared | — | — | — | (42 | ) | — | |||||||||||||
Net income (loss) | — | — | — | 27 | (1 | ) | |||||||||||||
Balances as of June 30, 2013 | 77,362,458 | $ | 889 | $ | (6 | ) | $ | 878 | $ | 1 | |||||||||
Balances as of December 31, 2011 | 75,362,956 | $ | 836 | $ | (6 | ) | $ | 833 | $ | 3 | |||||||||
Issuance of shares pursuant to equity-based plans | 164,325 | — | — | — | — | ||||||||||||||
Stock-based compensation | — | 1 | — | — | — | ||||||||||||||
Dividends declared | — | — | — | (41 | ) | — | |||||||||||||
Net income | — | — | — | 75 | — | ||||||||||||||
Balances as of June 30, 2012 | 75,527,281 | $ | 837 | $ | (6 | ) | $ | 867 | $ | 3 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | governmental policies and regulatory audits, investigations and actions, including those of the FERC and OPUC with respect to allowed rates of return, financings, electricity pricing and price structures, acquisition and disposal of facilities and other assets, construction and operation of plant facilities, transmission of electricity, recovery of power costs and capital investments, and current or prospective wholesale and retail competition; |
• | the outcome of legal and regulatory proceedings and issues including, but not limited to, the matters described in Note 7, Contingencies, in the Notes to Condensed Consolidated Financial Statements; |
• | the failure to complete capital projects on schedule and within budget or the abandonment of capital projects, which could result in the Company’s inability to recover project costs; |
• | operational factors affecting PGE’s power generation facilities, including forced outages, hydro and wind conditions, and disruption of fuel supply, which may cause the Company to incur repair costs, as well as increased power costs for replacement power; |
• | changes in wholesale prices for fuels, including natural gas, coal, and oil, and the impact of such changes on the Company’s power costs, and changes in the availability and price of wholesale power; |
• | economic conditions that result in decreased demand for electricity, reduced revenue from sales of excess energy during periods of low wholesale market prices, impaired financial stability of vendors and service providers and elevated levels of uncollectible customer accounts; |
• | unseasonable or extreme weather and other natural phenomena, which could affect customers’ demand for power and PGE’s ability and cost to procure adequate power and fuel supplies to serve its customers, and could increase the Company’s costs to maintain its generating facilities and transmission and distribution systems; |
• | volatility in wholesale power and natural gas prices, which could require the Company to issue additional letters of credit or post additional cash as collateral with counterparties pursuant to existing power and natural gas purchase agreements; |
• | future laws, regulations, and proceedings that could increase the Company’s costs or affect the operations of the Company’s thermal generating plants by imposing requirements for additional emissions controls or significant emissions fees or taxes, particularly with respect to coal-fired generation facilities, in order to mitigate carbon dioxide, mercury and other gas emissions; |
• | capital market conditions, including access to capital, interest rate volatility, reductions in demand for investment-grade commercial paper, as well as changes in PGE’s credit ratings, which could have an impact on the Company’s cost of capital and its ability to access the capital markets to support requirements for working capital, construction costs, and the repayments of maturing debt; |
• | changes in residential, commercial, and industrial customer growth, and in demographic patterns, in PGE’s service territory; |
• | the effectiveness of PGE’s risk management policies and procedures and the creditworthiness of customers and counterparties; |
• | declines in the fair value of debt and equity securities held for the defined benefit pension plans and other benefit plans, which could result in increased funding requirements for such plans; |
• | changes in, and compliance with, environmental and endangered species laws and policies; |
• | the effects of climate change, including changes in the environment, which may affect energy costs or consumption, increase the Company’s costs, or adversely affect its operations; |
• | new federal, state, and local laws that could have adverse effects on operating results; |
• | cyber security attacks, data security breaches, or other malicious acts that cause damage to the Company’s generation and transmission facilities or information technology systems, or result in the release of confidential customer and proprietary information; |
• | employee workforce factors, including a significant number of employees approaching retirement, potential strikes, work stoppages, and transitions in senior management; |
• | political, economic, and financial market conditions; |
• | natural disasters and other risks, such as earthquake, flood, drought, lightning, wind, and fire; |
• | financial or regulatory accounting principles or policies imposed by governing bodies; and |
• | acts of war or terrorism. |
Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | % Increase /(Decrease)in Energy Deliveries | ||||||||||||
Average Number of Customers | Retail Energy Deliveries* | Average Number of Customers | Retail Energy Deliveries* | |||||||||||
Residential | 726,960 | 3,809 | 722,542 | 3,880 | (1.8 | )% | ||||||||
Commercial | 103,798 | 3,583 | 103,147 | 3,603 | (0.6 | ) | ||||||||
Industrial | 268 | 2,088 | 261 | 2,084 | 0.2 | |||||||||
Total | 831,026 | 9,480 | 825,950 | 9,567 | (0.9 | ) | ||||||||
* | In thousands of MWh. |
General Rate Case* | |||
Annual revenue requirement change | |||
($ in millions) | |||
Increase to annual revenues—Initial filing | $ | 105 | |
Reduction resulting from non-power cost stipulation | (42 | ) | |
Increase resulting from update to load forecast (revenue) | 24 | ||
Reduction resulting from power costs stipulation and updated power costs | (8 | ) | |
Increase to annual revenues—As revised | $ | 79 |
* | Forecasted 2014 Net Variable Power Costs, the load forecast, and PGE’s cost of long-term debt will be updated at various dates through November 15, 2013. These updates, as well as resolution of pension cost recovery, may change the amounts presented above. |
• | A capital structure of 50% debt and 50% equity; |
• | A return on equity of 9.75%; |
• | A cost of capital to be determined based on updates for actual 2013 debt issuances; |
• | An average rate base of $3.1 billion; |
• | Updates to incorporate revised information regarding expected 2014 costs; |
• | Allowance for PGE to collect approximately $16.5 million of certain 2014 information technology and customer service costs during a five year amortization period beginning in 2014, with rate base treatment of the uncollected balances; |
• | Implementation of a historical rolling average for forecasted wind generation; |
• | Extension of PGE’s decoupling mechanism for three years through 2016; and |
• | Updates to incorporate revised terms and conditions for the Company’s direct access program and streetlight pricing. |
• | Challenges to recovery of the Company’s investment in its closed Trojan plant; |
• | Claims for refunds related to wholesale energy sales during 2000 - 2001 in the Pacific Northwest; and |
• | An investigation of environmental matters regarding Portland Harbor. |
• | Power Costs—Pursuant to the AUT process, PGE files annually an estimate of power costs for the following year. The OPUC issued an order on the 2013 AUT resulting in an estimated 2% decrease in customer prices as a result of expected lower power costs. The new prices became effective January 1, 2013 and are expected to result in a decrease of approximately $36 million in annual revenues when compared to revenues resulting from prices in effect for 2012. As part of its 2014 General Rate Case, PGE included projected power costs in its initial request for a $105 million increase in revenues. The power cost portion of the request was moved to a separate docket at the OPUC and has been agreed to by intervenors and the OPUC staff, subject to updates through November 15, 2013. |
• | Renewable Resource Costs—Pursuant to a renewable adjustment clause mechanism (RAC), PGE can recover in customer prices prudently incurred costs of renewable resources that are expected to be placed in service in the current year. The Company may submit a filing to the OPUC by April 1st each year, with prices expected to become effective January 1st of the following year. As part of the RAC, the OPUC has authorized the deferral of eligible costs not yet included in customer prices until the January 1st effective date. |
• | Decoupling—The decoupling mechanism, which currently expires at the end of 2013, is intended to provide for recovery of margin lost as a result of any reduction in electricity sales attributable to energy efficiency and conservation efforts by residential and certain commercial customers. The Company requested in its 2014 GRC filing that the OPUC extend authorization of the mechanism to continue on a permanent basis. Agreements reached in the rate case, subject to OPUC approval, provide for continuation of the mechanism through 2016. The mechanism provides for collection from (or refund to) customers if weather adjusted use per customer is less (or more) than the levels projected in the Company’s most recent approved general rate case. |
• | Capital deferral—In the 2011 General Rate Case, the OPUC authorized the Company to defer the costs associated with four capital projects that were not completed at the time the 2011 General Rate Case was approved. A regulatory asset of $15 million was recorded in 2012, for potential recovery in customer prices, subject to an earnings test, with an offsetting credit to Depreciation and amortization expense. The Company submitted a filing to the OPUC in July 2013 requesting recovery of the deferral, with a resulting tariff effective January 1, 2014. In the first half of 2013, the Company deferred an additional $9 million of costs associated with these projects. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
Revenues, net | $ | 403 | 100 | % | $ | 413 | 100 | % | $ | 876 | 100 | % | $ | 892 | 100 | % | |||||||||||
Purchased power and fuel | 156 | 39 | 156 | 38 | 348 | 40 | 351 | 39 | |||||||||||||||||||
Gross margin | 247 | 61 | 257 | 62 | 528 | 60 | 541 | 61 | |||||||||||||||||||
Other operating expenses: | |||||||||||||||||||||||||||
Production and distribution | 64 | 16 | 51 | 12 | 115 | 13 | 104 | 12 | |||||||||||||||||||
Cascade Crossing transmission project | 52 | 13 | — | — | 52 | 6 | — | — | |||||||||||||||||||
Administrative and other | 55 | 14 | 56 | 14 | 109 | 12 | 110 | 12 | |||||||||||||||||||
Depreciation and amortization | 62 | 15 | 63 | 15 | 124 | 14 | 125 | 14 | |||||||||||||||||||
Taxes other than income taxes | 25 | 6 | 26 | 6 | 52 | 6 | 53 | 6 | |||||||||||||||||||
Total other operating expenses | 258 | 64 | 196 | 47 | 452 | 51 | 392 | 44 | |||||||||||||||||||
Income (loss) from operations | (11 | ) | (3 | ) | 61 | 15 | 76 | 9 | 149 | 17 | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||
Allowance for equity funds used during construction | 2 | 1 | 2 | — | 4 | 1 | 3 | — | |||||||||||||||||||
Miscellaneous income (expense), net | 1 | — | (1 | ) | — | 2 | — | 2 | — | ||||||||||||||||||
Other income, net | 3 | 1 | 1 | — | 6 | 1 | 5 | — | |||||||||||||||||||
Interest expense | 25 | 6 | 27 | 7 | 50 | 6 | 55 | 6 | |||||||||||||||||||
Income (loss) before income tax expense (benefit) | (33 | ) | (8 | ) | 35 | 8 | 32 | 4 | 99 | 11 | |||||||||||||||||
Income tax expense (benefit) | (11 | ) | (3 | ) | 9 | 2 | 6 | 1 | 24 | 3 | |||||||||||||||||
Net income (loss) | (22 | ) | (5 | ) | 26 | 6 | 26 | 3 | 75 | 8 | |||||||||||||||||
Less: net loss attributable to noncontrolling interests | — | — | — | — | (1 | ) | — | — | — | ||||||||||||||||||
Net income (loss) attributable to Portland General Electric Company | $ | (22 | ) | (5 | )% | $ | 26 | 6 | % | $ | 27 | 3 | % | $ | 75 | 8 | % |
Three Months Ended June 30, | |||||||||||||
2013 | 2012 | ||||||||||||
Revenues (1) (dollars in millions): | |||||||||||||
Retail: | |||||||||||||
Residential | 179 | 45 | % | 187 | 45 | % | |||||||
Commercial | 150 | 37 | 152 | 37 | |||||||||
Industrial | 54 | 13 | 56 | 14 | |||||||||
Subtotal | 383 | 95 | 395 | 96 | |||||||||
Other retail revenues, net | (10 | ) | (2 | ) | (1 | ) | — | ||||||
Total retail revenues | 373 | 93 | 394 | 96 | |||||||||
Wholesale revenues | 21 | 5 | 9 | 2 | |||||||||
Other operating revenues | 9 | 2 | 10 | 2 | |||||||||
Total revenues | $ | 403 | 100 | % | $ | 413 | 100 | % | |||||
Energy deliveries (2) (MWh in thousands): | |||||||||||||
Retail: | |||||||||||||
Residential | 1,580 | 30 | % | 1,621 | 31 | % | |||||||
Commercial | 1,796 | 35 | 1,764 | 34 | |||||||||
Industrial | 1,064 | 20 | 1,078 | 21 | |||||||||
Total retail energy deliveries | 4,440 | 85 | 4,463 | 86 | |||||||||
Wholesale energy deliveries | 771 | 15 | 702 | 14 | |||||||||
Total energy deliveries | 5,211 | 100 | % | 5,165 | 100 | % | |||||||
Average number of retail customers: | |||||||||||||
Residential | 727,470 | 87 | % | 722,886 | 87 | % | |||||||
Commercial | 104,831 | 13 | 103,623 | 13 | |||||||||
Industrial | 263 | — | 253 | — | |||||||||
Total | 832,564 | 100 | % | 826,762 | 100 | % |
(1) | Includes both revenues from customers who purchase their energy supplies from the Company and revenues from the delivery of energy to those commercial and industrial customers that purchase their energy from ESSs. |
(2) | Includes both energy sold to retail customers and energy deliveries to those commercial and industrial customers that purchase their energy from ESSs. |
• | A $10 million decrease resulting from lower average prices due primarily to the reduction in power costs as forecasted in the Company’s 2013 AUT and a slightly larger portion of energy deliveries going to customers who purchase their energy from ESSs; |
• | The customer refund of $9 million reflected in Other retail revenues, net in the table above related to cumulative over-billings during a period of several years as a result of a meter configuration error. Management believes the customer billing error is not material to any past reporting period. The Company corrected this matter in the second quarter of 2013 through an out of period adjustment as a reduction to Revenues, net; and |
• | A $2 million decrease related to a 1% decrease in the volume of energy delivered primarily due to warmer temperatures during the second quarter heating season. Residential energy deliveries were down 3% and industrial deliveries were off 1%, while commercial energy deliveries showed a 2% increase. |
Heating Degree-days | Cooling Degree-days | ||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||
April | 372 | 356 | — | 5 | |||||||
May | 172 | 222 | 15 | 11 | |||||||
June | 49 | 131 | 67 | 24 | |||||||
Second quarter | 593 | 709 | 82 | 40 | |||||||
15-year average for the year-to-date | 721 | 714 | 68 | 68 |
Three Months Ended June 30, | |||||||||||
2013 | 2012 | ||||||||||
Sources of energy (MWh in thousands): | |||||||||||
Generation: | |||||||||||
Thermal: | |||||||||||
Coal | 794 | 16 | % | 208 | 4 | % | |||||
Natural gas | 228 | 4 | % | 7 | — | % | |||||
Total thermal | 1,022 | 20 | % | 215 | 4 | % | |||||
Hydro | 436 | 9 | % | 547 | 11 | % | |||||
Wind | 384 | 7 | % | 377 | 7 | % | |||||
Total generation | 1,842 | 36 | % | 1,139 | 22 | % | |||||
Purchased power: | |||||||||||
Term | 2,571 | 51 | % | 2,931 | 58 | % | |||||
Hydro | 508 | 10 | % | 522 | 10 | % | |||||
Wind | 111 | 2 | % | 103 | 2 | % | |||||
Spot | 19 | 1 | % | 398 | 8 | % | |||||
Total purchased power | 3,209 | 64 | % | 3,954 | 78 | % | |||||
Total system load | 5,051 | 100 | % | 5,093 | 100 | % | |||||
Less: wholesale sales | (771 | ) | (702 | ) | |||||||
Retail load requirement | 4,280 | 4,391 |
Runoff as a Percent of Normal * | |||||
Location | 2013 Forecast | 2012 Actual | |||
Columbia River at The Dalles, Oregon | 99 | % | 126 | % | |
Mid-Columbia River at Grand Coulee, Washington | 107 | 129 | |||
Clackamas River at Estacada, Oregon | 95 | 133 | |||
Deschutes River at Moody, Oregon | 96 | 118 |
Six Months Ended June 30, | |||||||||||||
2013 | 2012 | ||||||||||||
Revenues (1) (dollars in millions): | |||||||||||||
Retail: | |||||||||||||
Residential | $ | 425 | 49 | % | $ | 443 | 49 | % | |||||
Commercial | 299 | 34 | 308 | 35 | |||||||||
Industrial | 105 | 12 | 109 | 12 | |||||||||
Subtotal | 829 | 95 | 860 | 96 | |||||||||
Other retail revenues, net | (6 | ) | (1 | ) | (4 | ) | — | ||||||
Total retail revenues | 823 | 94 | 856 | 96 | |||||||||
Wholesale revenues | 37 | 4 | 19 | 2 | |||||||||
Other operating revenues | 16 | 2 | 17 | 2 | |||||||||
Total revenues | $ | 876 | 100 | % | $ | 892 | 100 | % | |||||
Energy deliveries (2) (MWh in thousands): | |||||||||||||
Retail: | |||||||||||||
Residential | 3,809 | 35 | % | 3,880 | 36 | % | |||||||
Commercial | 3,583 | 33 | 3,603 | 34 | |||||||||
Industrial | 2,088 | 20 | 2,084 | 20 | |||||||||
Total retail energy deliveries | 9,480 | 88 | 9,567 | 90 | |||||||||
Wholesale energy deliveries | 1,311 | 12 | 1,090 | 10 | |||||||||
Total energy deliveries | 10,791 | 100 | % | 10,657 | 100 | % | |||||||
Average number of retail customers: | |||||||||||||
Residential | 726,960 | 87 | % | 722,542 | 88 | % | |||||||
Commercial | 103,798 | 13 | 103,147 | 12 | |||||||||
Industrial | 268 | — | 261 | — | |||||||||
Total | 831,026 | 100 | % | 825,950 | 100 | % |
(1) | Includes both revenues from customers who purchase their energy supplies from the Company and revenues from the delivery of energy to those commercial and industrial customers that purchase their energy from ESSs. |
(2) | Includes both energy sold to retail customers and energy deliveries to those commercial and industrial customers that purchase their energy from ESSs. |
• | A $22 million decrease resulting from lower average prices due primarily to the reduction in power costs as forecasted in the Company’s 2013 AUT and a slightly larger portion of energy deliveries going to customers who purchase their energy from ESSs; |
• | The industrial customer refund of $9 million related to cumulative over-billings over a period of several years, reflected in Other retail revenues, net in the table above; and |
• | An $8 million decrease related to lower volumes of energy delivered driven in part by warmer temperatures during the heating season in the first half of 2013 compared with the first half of 2012 and by the extra day |
• | A $5 million increase related to the decoupling mechanism, with a $4 million potential collection recorded in the first half of 2013 compared with a $1 million potential refund recorded in the first half of 2012; and |
• | A $3 million increase related to the Company’s PCAM, as a potential refund to customers was recorded in the first half of 2012 related to the 2011 PCAM, with no estimated refund to customers recorded in the first half of 2013. |
Heating Degree-days | Cooling Degree-days | ||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||
First quarter | 1,902 | 1,967 | — | — | |||||||
Second quarter | 593 | 709 | 82 | 40 | |||||||
Year-to-date | 2,495 | 2,676 | 82 | 40 | |||||||
15-year average for the year-to-date | 2,571 | 2,562 | 68 | 68 |
Six Months Ended June 30, | |||||||||||
2013 | 2012 | ||||||||||
Sources of energy (MWh in thousands): | |||||||||||
Generation: | |||||||||||
Thermal: | |||||||||||
Coal | 2,155 | 20 | % | 1,285 | 12 | % | |||||
Natural gas | 1,204 | 11 | 1,137 | 11 | |||||||
Total thermal | 3,359 | 31 | 2,422 | 23 | |||||||
Hydro | 917 | 9 | 1,130 | 10 | |||||||
Wind | 629 | 6 | 623 | 6 | |||||||
Total generation | 4,905 | 46 | 4,175 | 39 | |||||||
Purchased power: | |||||||||||
Term | 3,881 | 37 | 4,147 | 39 | |||||||
Hydro | 901 | 8 | 936 | 9 | |||||||
Wind | 177 | 2 | 177 | 2 | |||||||
Spot | 703 | 7 | 1,181 | 11 | |||||||
Total purchased power | 5,662 | 54 | 6,441 | 61 | |||||||
Total system load | 10,567 | 100 | % | 10,616 | 100 | % | |||||
Less: wholesale sales | (1,311 | ) | (1,090 | ) | |||||||
Retail load requirement | 9,256 | 9,526 |
2013 | 2014 | 2015 | 2016 | 2017 | |||||||||||||||
Ongoing capital expenditures (1) | $ | 319 | $ | 319 | $ | 249 | $ | 258 | $ | 241 | |||||||||
Port Westward Unit 2 | 161 | 129 | 10 | — | — | ||||||||||||||
Carty Generating Station | 123 | 167 | 112 | 48 | — | ||||||||||||||
Tucannon River Wind Farm | 105 | 387 | 8 | — | — | ||||||||||||||
Hydro licensing and construction (2) | 19 | 35 | 35 | 4 | 1 | ||||||||||||||
Total capital expenditures | $ | 727 | (3) | $ | 1,037 | $ | 414 | $ | 310 | $ | 242 | ||||||||
Long-term debt maturities | $ | 100 | $ | — | $ | 70 | $ | 67 | $ | 58 |
(1) | Consists primarily of upgrades to, and replacement of, transmission, distribution, and generation infrastructure, as well as new customer connections. |
(2) | Relate primarily to modifications to the Company’s hydro facilities to enhance fish passage and survival, as required by conditions contained in the operating licenses. |
(3) | Includes preliminary engineering and removal costs, which are included in other net operating activities in the condensed consolidated statements of cash flows. |
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Cash and cash equivalents, beginning of period | $ | 12 | $ | 6 | |||
Net cash provided by (used in): | |||||||
Operating activities | 279 | 267 | |||||
Investing activities | (259 | ) | (128 | ) | |||
Financing activities | 87 | (71 | ) | ||||
Increase in cash and cash equivalents | 107 | 68 | |||||
Cash and cash equivalents, end of period | $ | 119 | $ | 74 |
Dividends | |||||||||
Declared Per | |||||||||
Declaration Date | Record Date | Payment Date | Common Share | ||||||
February 20, 2013 | March 25, 2013 | April 15, 2013 | $ | 0.270 | |||||
May 22, 2013 | June 25, 2013 | July 15, 2013 | 0.275 | ||||||
July 31, 2013 | September 25, 2013 | October 15, 2013 | 0.275 |
• | A $400 million syndicated credit facility scheduled to terminate November 2017; and |
• | A $300 million syndicated credit facility scheduled to terminate December 2016. |
• | In June 2013, PGE entered into a bond purchase agreement with certain institutional buyers (Buyers) under which the Company agreed to sell to the Buyers, in two tranches, an aggregate principal amount of $225 million of 4.47% Series FMBs, consisting of $150 million due 2044 and $75 million due 2043. On June 27, 2013, PGE issued the $150 million of FMBs, and expects to issue the $75 million on or before August 30, 2013; and |
• | In April 2013, PGE repaid $50 million of 4.45% Series of FMBs. |
Moody’s | S&P | ||
First Mortgage Bonds | A2 | A- | |
Senior unsecured debt | Baa1 | BBB | |
Commercial paper | Prime-2 | A-2 | |
Outlook | Stable | Stable |
• | During the first half of 2013, PGE entered into agreements for the construction of PW2 and Carty. As a result, capital and other purchase commitments increased as follows: $251 million in 2013; $255 million in 2014; $88 million in 2015; and $29 million in 2016. |
• | During the second quarter of 2013, PGE committed to issue, in two tranches, $225 million of 4.47% Series FMBs, consisting of $150 million due 2044 and $75 million due 2043. As a result, future interest on long- |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 6. | Exhibits. |
Exhibit Number | Description |
1.1 | Underwriting Agreement, dated June 11, 2013, among Portland General Electric Company; Barclays Capital Inc.; J.P. Morgan Securities LLC; Wells Fargo Securities, LLC; and Merrill Lynch, Pierce Fenner & Smith Incorporated, as representatives of the several underwriters named therein, and Barclays Capital Inc, in its capacity as an agent for and an affiliate of the forward purchaser named therein (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed June 17, 2013). |
3.1 | Second Amended and Restated Articles of Incorporation of Portland General Electric Company (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed August 3, 2009). |
3.2 | Ninth Amended and Restated Bylaws of Portland General Electric Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 27, 2011). |
4.1 | Sixty-seventh Supplemental Indenture dated June 15, 2013 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 27, 2013). |
10.1 | Confirmation of Forward Sale Transaction dated June 11, 2013 between Portland General Electric Company and Barclays Bank PLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 17, 2013). |
10.2 | First Amendment to Confirmation Agreement dated June 25, 2013 between Portland General Electric Company and Barclays Bank PLC. |
31.1 | Certification of Chief Executive Officer. |
31.2 | Certification of Chief Financial Officer. |
32 | Certifications of Chief Executive Officer and Chief Financial Officer. |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema Document. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
PORTLAND GENERAL ELECTRIC COMPANY | ||||
(Registrant) | ||||
Date: | August 1, 2013 | By: | /s/ James F. Lobdell | |
James F. Lobdell | ||||
Senior Vice President of Finance, Chief Financial Officer and Treasurer | ||||
(duly authorized officer and principal financial officer) |
1. | Schedule I: Schedule I to the Confirmation shall be deleted in its entirety and replaced with Schedule I attached hereto as Exhibit 1. |
2. | Counterparts: This First Amendment Agreement may be signed in any number of counterparts, each of which shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument. |
3. | Governing Law: This First Amendment Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
4. | Continuing Effectiveness: As expressly modified herein, the Confirmation shall remain in full force and effect and is hereby ratified and confirmed in all respects. All references in the Confirmation, the Agreement and the Underwriting Agreement to the “Confirmation” or to the “Forward Sale Agreement” shall refer to the Confirmation as amended herein. |
5. | Effective Date: The correction as set forth in this First Amendment Agreement shall be deemed effective as of June 11, 2013. |
Forward Price Reduction Date | Forward Price Reduction Amount |
June 21, 2013 | USD $.275 |
September 23, 2013 | USD $.275 |
December 23, 2013 | USD $.275 |
March 21, 2014 | USD $.275 |
June 23, 2014 | USD $.280 |
September 23, 2014 | USD $.280 |
December 23, 2014 | USD $.280 |
March 23, 2015 | USD $.280 |
June 23, 2015 | USD $.285 |
1. | I have reviewed this Quarterly Report on Form 10-Q of Portland General Electric Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 1, 2013 | By: | /s/ James J. Piro |
James J. Piro | |||
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Portland General Electric Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 1, 2013 | By: | /s/ James F. Lobdell |
James F. Lobdell | |||
Senior Vice President of Finance, Chief Financial Officer and Treasurer |
/s/ James J. Piro | /s/ James F. Lobdell | |||||
James J. Piro | James F. Lobdell | |||||
President and Chief Executive Officer | Senior Vice President of Finance, Chief Financial Officer and Treasurer | |||||
Date: | August 1, 2013 | Date: | August 1, 2013 |
Fair Value of Financial Instruments (Policies)
|
6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | PGE determines the fair value of financial instruments, both assets and liabilities recognized and not recognized in the Company’s condensed consolidated balance sheets, for which it is practicable to estimate fair value as of June 30, 2013 and December 31, 2012, and then classifies these financial assets and liabilities based on a fair value hierarchy. The fair value hierarchy, which contains three broad classification levels, is used to prioritize the inputs to the valuation techniques used to measure fair value. The levels and application to the Company are discussed below.
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy. PGE recognizes any transfers between levels in the fair value hierarchy as of the end of the reporting period. Changes to market liquidity conditions, the availability of observable inputs, or changes in the economic structure of a security marketplace may require transfer of the securities between levels. |
||||||||||||
Allocation of Financial Asset to Hierarchy Levels [Policy Text Block] | Trust assets held in the Nuclear decommissioning and Non-qualified benefit plan trusts are recorded at fair value in PGE’s consolidated balance sheets and invested in securities that are exposed to interest rate, credit and market volatility risks. These assets are classified within Level 1, 2 or 3 based on the following factors: Money market funds—PGE invests in money market funds that seek to maintain a stable net asset value. These funds invest in high-quality, short-term, diversified money market instruments, short-term treasury bills, federal agency securities, certificates of deposits, and commercial paper. Money market funds are classified as Level 2 in the fair value hierarchy as the securities are traded in active markets of similar securities but are not directly valued using quoted market prices. Debt securities—PGE invests in highly-liquid United States treasury securities to support the investment objectives of the trusts. These domestic government securities are classified as Level 1 in the fair value hierarchy due to the availability of quoted prices for identical assets in an active market as of the reporting date. Assets classified as Level 2 in the fair value hierarchy include domestic government debt securities, such as municipal debt, and corporate credit securities. Prices are determined by evaluating pricing data such as broker quotes for similar securities and adjusted for observable differences. Significant inputs used in valuation models generally include benchmark yield and issuer spreads. The external credit rating, coupon rate, and maturity of each security are considered in the valuation as applicable. Equity securities—Certain equity mutual fund and common stock securities are classified as Level 1 in the fair value hierarchy due to the availability of quoted prices for identical assets in an active market as of the reporting date. Principal markets for equity prices include published exchanges such as NASDAQ and the New York Stock Exchange (NYSE). Certain mutual fund assets included in commingled trusts or separately managed accounts are classified as Level 2 in the fair value hierarchy as pricing inputs are directly or indirectly observable in the marketplace as of the reporting date. Assets and liabilities from price risk management activities are recorded at fair value in PGE’s condensed consolidated balance sheets and consist of derivative instruments entered into by the Company to manage exposure to commodity price risk and foreign currency exchange rate risk, and reduce volatility in net power costs for the Company’s retail customers. For additional information regarding these assets and liabilities, see Note 4, Price Risk Management. For those assets and liabilities from price risk management activities classified as Level 2, fair value is derived using present value formulas that utilize inputs such as quoted forward prices for commodities and interest rates. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include over-the-counter forwards and swaps. Assets and liabilities from price risk management activities classified as Level 3 consist of instruments for which fair value is derived using one or more significant inputs that are not observable for the entire term of the instrument. These instruments consist of longer term over-the-counter swap derivatives. |
||||||||||||
Fair Value Transfer, Policy [Policy Text Block] | Transfers out of Level 3 occur when the significant inputs become more observable, such as when the time between the valuation date and the delivery term of a transaction becomes shorter. PGE records transfers in and transfers out of Level 3 at the end of the reporting period for all of its financial instruments. Transfers from Level 2 to Level 1 for the Company’s price risk management assets and liabilities do not occur as quoted prices are not available for identical instruments. As such, the Company’s assets and liabilities from price risk management activities mature and settle as Level 2 fair value measurements. |
||||||||||||
Debt, Policy [Policy Text Block] | PGE classifies borrowings under the revolving credit facilities and outstanding commercial paper as Short-term debt on the condensed consolidated balance sheets. Long-term debt is recorded at amortized cost in PGE’s consolidated balance sheets. The fair value of long-term debt is classified as a Level 2 fair value measurement and is estimated based on the quoted market prices for similar issues or on the current rates offered to PGE for debt of similar remaining maturities. |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Preferred stock, no par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 30,000,000 | 30,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | 160,000,000 | 160,000,000 |
Common stock, shares issued | 77,362,458 | 75,556,272 |
Common stock, shares outstanding | 77,362,458 | 75,556,272 |
Earnings Per Share (Notes)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings (loss) per share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted average number of common shares outstanding and the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares consist of: (1) employee stock purchase plan shares; (2) unvested time-based and performance-based restricted stock units along with associated dividend equivalent rights; and (3) shares issuable pursuant to an equity forward sale agreement (EFSA). See Note 6, Equity, for additional information on the EFSA and its impact on earnings per share. Unvested performance-based restricted stock units and associated dividend equivalent rights are included in dilutive potential common shares only after the performance criteria has been met. For the three and six month periods ended June 30, 2013 and 2012, unvested performance-based restricted stock units and related dividend equivalent rights of 435,224 and 466,624, respectively, were excluded from the dilutive calculation because the performance goals had not been met. Due to PGE’s net loss position for the three months ended June 30, 2013, shares of approximately 228,000 related to shares issuable pursuant to the EFSA and unvested restricted stock units shares were excluded from the diluted weighted average common shares outstanding as their effect would have been anti-dilutive. Components of basic and diluted earnings (loss) per share were as follows:
Basic and diluted earnings (loss) per share amounts are calculated based on actual amounts rather than the rounded amounts presented in the table above and on the condensed consolidated statements of operations. Accordingly, calculations using the rounded amounts presented for net income and weighted average shares outstanding may yield results that vary from the earnings per share amounts presented in the table above. |
Price Risk Management (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | PGE’s Assets and Liabilities from price risk management activities consist of the following (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments [Table Text Block] | PGE’s net volumes related to its Assets and Liabilities from price risk management activities resulting from its derivative transactions, which are expected to deliver or settle through 2016, were as follows (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price Risk Management Assets and Liabilities Subject to Master Netting Agreements [Table Text Block] | Price risk management liabilities subject to master netting agreements is as follows (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] | Net realized and unrealized losses (gains) on derivative transactions not designated as hedging instruments are classified in Purchased power and fuel in the condensed consolidated statements of operations and were as follows (in millions):
Net unrealized and certain net realized losses (gains) presented in the table above are offset within the consolidated statements of operations by the effects of regulatory accounting. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Price Risk Derivatives [Table Text Block] | Assuming no changes in market prices and interest rates, the following table indicates the year in which the net unrealized loss recorded as of June 30, 2013 related to PGE’s derivative activities would become realized as a result of the settlement of the underlying derivative instrument (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Concentration of Risk, by Counterparty [Table Text Block] | Counterparties representing 10% or more of Assets and Liabilities from price risk management activities as of June 30, 2013 or December 31, 2012 were as follows:
|
Price Risk Management (Policies)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Price Risk Management [Abstract] | |
Derivatives, Policy [Policy Text Block] | PGE utilizes derivative instruments to manage its exposure to commodity price risk and foreign currency exchange rate risk in order to reduce volatility in net power costs for its retail customers. These derivative instruments may include forwards, futures, swaps, and option contracts for electricity, natural gas, oil, and foreign currency, which are recorded at fair value on the condensed consolidated balance sheets, with changes in fair value recorded in the condensed consolidated statements of operations. In accordance with the ratemaking and cost recovery process authorized by the Public Utility Commission of Oregon (OPUC), PGE recognizes a regulatory asset or liability to defer the gains and losses from derivative instruments until realized. This accounting treatment defers the fair value gains and losses on derivative instruments until settlement of the associated derivative instrument. PGE may designate certain derivative instruments as cash flow hedges or may use derivative instruments as purely economic hedges. The Company does not engage in trading activities for non-retail purposes. |
Fair Value of Financial Instruments Fair Value of Financial Instruments (Details) (USD $)
|
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2013
|
Dec. 31, 2012
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3 | $ 0 | ||
Defined Benefit Plan, Transfers Between Measurement Levels | 0 | 0 | |
Long-term Debt, Fair Value | 1,921,000,000 | 1,949,000,000 | |
Long-term Debt | 1,736,000,000 | 1,636,000,000 | |
Cash Surrender Value, Fair Value Disclosure | $ 24,000,000 | $ 23,000,000 |
Basis of Presentation (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2013
retail_customers
|
Jun. 30, 2012
|
Jun. 30, 2013
retail_customers
|
Jun. 30, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Basis of Presentation [Abstract] | |||||||
Number of Retail Customers | 833,750 | 833,750 | |||||
Decoupling Mechanism Deferrals, Net | $ 4,000,000 | $ (5,000,000) | $ 4,000,000 | ||||
Other Comprehensive Income | 0 | 0 | 0 | 0 | |||
revenue overstatment | $ 9,000,000 | $ 3,000,000 | $ 3,000,000 | $ 2,000,000 | $ 1,000,000 |
Equity (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity [Table Text Block] | The activity in equity during the six month periods ended June 30, 2013 and 2012 is as follows (dollars in millions):
|
Earnings Per Share (Details) (USD $)
In Millions, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Components of Earnings per Share [Abstract] | ||||
stock offering | 11,100,000 | |||
Unvested performance based restricted stock | 435,224 | 466,624 | 435,224 | 466,624 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 228,000 | |||
Numerator (in millions) | ||||
Net income sttributable to Portland General Electric Company common shareholders | $ (22) | $ 26 | $ 75 | |
Denominator | ||||
Weighted Average Common Shares Outstanding-Basic | 75,935,000 | 75,507,000 | 75,772,000 | 75,465,000 |
Dilutive effect of unvested restricted stock units and employee stock purchase plan shares | 0 | 10,000 | 121,000 | 14,000 |
Weighted Average Common Shares Outstanding-Diluted | 75,935,000 | 75,517,000 | 75,893,000 | 75,479,000 |
Earnings (loss) per share: | ||||
Earnings Per Share, Basic and Diluted | $ (0.29) | $ 0.34 | $ 0.36 | $ 0.99 |
Price Risk Management Net volumes related to price risk management activities (Details) (CAD)
In Millions, unless otherwise specified |
Jun. 30, 2013
MMBTU
MWh
|
Dec. 31, 2012
MWh
MMBTU
|
---|---|---|
Commodity contracts: | ||
Electricity | 10,000,000 | 11,000,000 |
Natural gas | 103,000,000 | 86,000,000 |
Oil | (1,000,000) | 0 |
Foreign currency | 12 | 7 |
Variable Interest Entities (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net | $ 5 | $ 6 |
Variable Interest Entity, Consolidated, Carrying Amount, Cash and Cash Equivalents | 1 | |
Variable Interest Entity, Electric utility plant, net | $ 5 | $ 5 |
Price Risk Management Future Year Net Unrealized Gain/Loss Recorded at Balance Sheet Date Expected to Become Realized (Details) (Loss on Derivatives [Member], USD $)
In Millions, unless otherwise specified |
6 Months Ended | 12 Months Ended | 42 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2013
|
Dec. 31, 2016
|
Dec. 31, 2015
|
Dec. 31, 2014
|
Dec. 31, 2016
|
|
Loss on Derivatives [Member]
|
|||||
Commodity contracts: | |||||
Electricity | $ 12 | $ 6 | $ 24 | $ 43 | $ 85 |
Natural gas | 43 | 6 | 9 | 35 | 93 |
Net unrealized loss | $ 55 | $ 12 | $ 33 | $ 78 | $ 178 |
Earnings Per Share (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Earnings per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Components of basic and diluted earnings (loss) per share were as follows:
Basic and diluted earnings (loss) per share amounts are calculated based on actual amounts rather than the rounded amounts presented in the table above and on the condensed consolidated statements of operations. Accordingly, calculations using the rounded amounts presented for net income and weighted average shares outstanding may yield results that vary from the earnings per share amounts presented in the table above. |
Basis of Presentation (Notes)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Basis of Presentation [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | BASIS OF PRESENTATION Nature of Business Portland General Electric Company (PGE or the Company) is a single, vertically integrated electric utility engaged in the generation, transmission, distribution, and retail sale of electricity. The Company also participates in the wholesale market by purchasing and selling electricity and natural gas in order to obtain reasonably-priced power for its retail customers. PGE operates as a single segment, with revenues and costs related to its business activities maintained and analyzed on a total electric operations basis. PGE’s corporate headquarters are located in Portland, Oregon and its service area is located entirely within the state of Oregon. PGE’s service area includes 52 incorporated cities, of which Portland and Salem are the largest, within a state-approved service area allocation of approximately 4,000 square miles. As of June 30, 2013, PGE served 833,750 retail customers with a service area population of approximately 1.7 million, comprising approximately 44% of the state’s population. Condensed Consolidated Financial Statements These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such regulations, although PGE believes that the disclosures provided are adequate to make the interim information presented not misleading. To conform with the 2013 presentation, PGE has separately presented Decoupling mechanism deferrals, net of amortization of $4 million from Other non-cash income and expenses, net in the operating activities section of the condensed consolidated statement of cash flows for the six months ended June 30, 2012. The financial information included herein for the three and six month periods ended June 30, 2013 and 2012 is unaudited; however, such information reflects all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the condensed consolidated financial position, condensed consolidated results of operations, and condensed consolidated cash flows of the Company for these interim periods. Certain costs are estimated for the full year and allocated to interim periods based on estimates of operating time expired, benefit received, or activity associated with the interim period; accordingly, such costs may not be reflective of amounts to be recognized for a full year. Due to seasonal fluctuations in electricity sales, as well as the price of wholesale energy and natural gas, interim financial results do not necessarily represent those to be expected for the year. The financial information as of December 31, 2012 is derived from the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2012, included in Item 8 of PGE’s Annual Report on Form 10-K, filed with the SEC on February 22, 2013, and should be read in conjunction with such condensed consolidated financial statements. Comprehensive Income PGE had no material components of other comprehensive income to report for the three or six month periods ended June 30, 2013 and 2012. Use of Estimates The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of gain or loss contingencies, as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results experienced by the Company could differ materially from those estimates. Customer Billing Matter In May 2013, PGE discovered that it had over-billed an industrial customer during a period of several years as a result of a meter configuration error. An analysis of the data determined that the Company’s revenues were overstated by approximately $3 million in 2012 and in 2011, $2 million in 2010, and $1 million in 2009. PGE believes the customer billing error is not material to any past annual or interim reporting period. The Company corrected this matter in the second quarter of 2013 as an out of period adjustment, and recorded, as a reduction to Revenues, net, a refund to the customer in the amount of $9 million. Recent Accounting Pronouncements Accounting Standards Update (ASU) 2011-11, Balance Sheet (Topic 210) - Disclosures about Offsetting Assets and Liabilities (ASU 2011-11), requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. In addition, ASU 2013-01, Balance Sheet (Topic 210) - Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (ASU 2013-01), was issued in January 2013 and clarifies that the scope of ASU 2011-11 applies to financial instruments accounted for in accordance with Topic 815, Derivatives and Hedging. Both ASUs are effective January 1, 2013 for the Company, and require retrospective application. PGE adopted the amendments contained in ASU 2011-11 and ASU 2013-01 on January 1, 2013, which did not have an impact on the Company’s consolidated financial position, consolidated results of operations, or consolidated cash flows. See Note 4, Price Risk Management, for the additional disclosures made pursuant to the adoption of these ASUs. |
Fair Value of Financial Instruments (Notes)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS PGE determines the fair value of financial instruments, both assets and liabilities recognized and not recognized in the Company’s condensed consolidated balance sheets, for which it is practicable to estimate fair value as of June 30, 2013 and December 31, 2012, and then classifies these financial assets and liabilities based on a fair value hierarchy. The fair value hierarchy, which contains three broad classification levels, is used to prioritize the inputs to the valuation techniques used to measure fair value. The levels and application to the Company are discussed below.
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy. PGE recognizes any transfers between levels in the fair value hierarchy as of the end of the reporting period. Changes to market liquidity conditions, the availability of observable inputs, or changes in the economic structure of a security marketplace may require transfer of the securities between levels. There were no significant transfers between levels, except those transfers out of Level 3 to Level 2 presented in this note, during the three and six month periods ended June 30, 2013 and 2012. The Company’s financial assets and liabilities recognized at fair value are as follows by level within the fair value hierarchy (in millions):
Trust assets held in the Nuclear decommissioning and Non-qualified benefit plan trusts are recorded at fair value in PGE’s consolidated balance sheets and invested in securities that are exposed to interest rate, credit and market volatility risks. These assets are classified within Level 1, 2 or 3 based on the following factors: Money market funds—PGE invests in money market funds that seek to maintain a stable net asset value. These funds invest in high-quality, short-term, diversified money market instruments, short-term treasury bills, federal agency securities, certificates of deposits, and commercial paper. Money market funds are classified as Level 2 in the fair value hierarchy as the securities are traded in active markets of similar securities but are not directly valued using quoted market prices. Debt securities—PGE invests in highly-liquid United States treasury securities to support the investment objectives of the trusts. These domestic government securities are classified as Level 1 in the fair value hierarchy due to the availability of quoted prices for identical assets in an active market as of the reporting date. Assets classified as Level 2 in the fair value hierarchy include domestic government debt securities, such as municipal debt, and corporate credit securities. Prices are determined by evaluating pricing data such as broker quotes for similar securities and adjusted for observable differences. Significant inputs used in valuation models generally include benchmark yield and issuer spreads. The external credit rating, coupon rate, and maturity of each security are considered in the valuation as applicable. Equity securities—Certain equity mutual fund and common stock securities are classified as Level 1 in the fair value hierarchy due to the availability of quoted prices for identical assets in an active market as of the reporting date. Principal markets for equity prices include published exchanges such as NASDAQ and the New York Stock Exchange (NYSE). Certain mutual fund assets included in commingled trusts or separately managed accounts are classified as Level 2 in the fair value hierarchy as pricing inputs are directly or indirectly observable in the marketplace as of the reporting date. Assets and liabilities from price risk management activities are recorded at fair value in PGE’s condensed consolidated balance sheets and consist of derivative instruments entered into by the Company to manage exposure to commodity price risk and foreign currency exchange rate risk, and reduce volatility in net power costs for the Company’s retail customers. For additional information regarding these assets and liabilities, see Note 4, Price Risk Management. For those assets and liabilities from price risk management activities classified as Level 2, fair value is derived using present value formulas that utilize inputs such as quoted forward prices for commodities and interest rates. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include over-the-counter forwards and swaps. Assets and liabilities from price risk management activities classified as Level 3 consist of instruments for which fair value is derived using one or more significant inputs that are not observable for the entire term of the instrument. These instruments consist of longer term over-the-counter swap derivatives. Quantitative information regarding the significant, unobservable inputs used in the measurement of Level 3 assets and liabilities from price risk management activities as of June 30, 2013 is presented below:
Quantitative information regarding the significant, unobservable inputs used in the measurement of Level 3 assets and liabilities from price risk management activities as of December 31, 2012 is presented below:
The significant unobservable inputs used in the Company’s fair value measurement of price risk management assets and liabilities are long-term forward prices for commodity derivatives. These inputs employ the mid-point of the market’s bid-ask spread and are derived using observed transactions in active markets, as well as historical experience as a participant in those markets. These inputs are validated against nonbinding quotes from brokers with whom the Company transacts. In addition, changes in the fair value measurement from price risk management assets and liabilities are analyzed and reviewed on a monthly basis by the Company’s Risk Management group. This process includes analytical review of changes in commodity prices as well as procedures to analyze and identify the reasons for the changes over specific reporting periods. The Company’s Level 3 assets and liabilities from price risk management activities are sensitive to market price changes in the respective underlying commodities. The significance of the impact is dependent upon the magnitude of the price change and the Company’s position as either the buyer or seller of the contract. Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:
Changes in the fair value of net liabilities from price risk management activities (net of assets from price risk management activities) classified as Level 3 in the fair value hierarchy were as follows (in millions):
Transfers into Level 3 occur when significant inputs used to value the Company’s derivative instruments become less observable, such as a delivery location becoming significantly less liquid. During the six month periods ended June 30, 2013 and 2012, there were no transfers into Level 3 from Level 2. Transfers out of Level 3 occur when the significant inputs become more observable, such as when the time between the valuation date and the delivery term of a transaction becomes shorter. PGE records transfers in and transfers out of Level 3 at the end of the reporting period for all of its financial instruments. Transfers from Level 2 to Level 1 for the Company’s price risk management assets and liabilities do not occur as quoted prices are not available for identical instruments. As such, the Company’s assets and liabilities from price risk management activities mature and settle as Level 2 fair value measurements. Long-term debt is recorded at amortized cost in PGE’s consolidated balance sheets. The fair value of long-term debt is classified as a Level 2 fair value measurement and is estimated based on the quoted market prices for similar issues or on the current rates offered to PGE for debt of similar remaining maturities. As of June 30, 2013, the estimated aggregate fair value of PGE’s long-term debt was $1,921 million, compared to its $1,736 million carrying amount. As of December 31, 2012, the estimated aggregate fair value of PGE’s long-term debt was $1,949 million, compared to its $1,636 million carrying amount. |
Equity (Notes)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | EQUITY The activity in equity during the six month periods ended June 30, 2013 and 2012 is as follows (dollars in millions):
On June 11, 2013, PGE entered into an EFSA in connection with a public offering of 11,100,000 shares of its common stock. The underwriters exercised their over-allotment option in full in connection with such public offering and on June 17, 2013, PGE issued an additional 1,665,000 shares of PGE common stock for $28.54 per share, net of the underwriters’ discount. Pursuant to the terms of the EFSA, a forward counterparty borrowed 11,100,000 shares of PGE’s common stock from third parties in the open market and sold the shares to a group of underwriters for $29.50 per share, less an underwriting discount equal to $0.96 per share. The underwriters then sold the shares in a public offering. PGE will not receive any proceeds from the sale of common stock until the EFSA is settled, and at that time PGE will record the proceeds, if any, in equity. Under the terms of the EFSA, PGE may elect to settle the equity forward transactions by means of: (1) physical; (2) cash; or (3) net share settlement, in whole or in part, at any time on or prior to June 11, 2015, except in specified circumstances or events that would require physical settlement. To the extent that the transactions are physically settled, PGE would be required to issue and deliver shares of PGE common stock to the forward counterparty at the then applicable forward sale price. The forward sale price was initially determined to be $29.50 per share at the time the EFSA was entered into, and the amount of cash to be received by PGE upon physical settlement of the EFSA is subject to certain adjustments in accordance with the terms of the EFSA. The use of the EFSA substantially eliminates future equity market price risk by fixing the common stock offering sales price under the then existing market conditions, while mitigating immediate share dilution resulting from the offering by postponing the actual issuance of common stock until such funds are needed in accordance with the Company’s capital requirements. The EFSA had no initial fair value since it was entered into at the then market price of the common stock. PGE concluded that the EFSA was an equity instrument and that it does not qualify as a derivative because the EFSA was indexed to the Company’s stock. PGE anticipates settling the EFSA through physical settlement on or before June 11, 2015. At June 30, 2013, the Company could have physically settled the EFSA by delivering 11,100,000 shares to the forward counterparty in exchange for cash of $314 million. In addition, at June 30, 2013, the Company could have elected to make a cash settlement by paying approximately $26 million, which amount includes $11 million of underwriting discount, or a net share settlement by delivering approximately 844,757 shares of common stock. To the extent that PGE makes a cash or net share settlement, the Company would receive no additional proceeds from the public offering. Prior to settlement, the potentially issuable shares pursuant to the EFSA will be reflected in PGE’s diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of PGE’s common stock used in calculating diluted earnings per share for a reporting period would be increased by the number of shares, if any, that would be issued upon physical settlement of the EFSA less the number of shares that could be purchased by PGE in the market with the proceeds received from issuance (based on the average market price during that reporting period). |
Price Risk Management (Notes)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price Risk Management Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price Risk Management | PRICE RISK MANAGEMENT PGE participates in the wholesale marketplace in order to balance its supply of power, which consists of its own generation combined with wholesale market transactions, to meet the needs of its retail customers, manage risk, and administer its existing long-term wholesale contracts. Such activities include fuel and power purchases and sales resulting from economic dispatch decisions for Company-owned generation. As a result, PGE is exposed to commodity price risk and foreign currency exchange rate risk, from which changes in prices and/or rates may affect the Company’s financial position, results of operations, or cash flows. PGE utilizes derivative instruments to manage its exposure to commodity price risk and foreign currency exchange rate risk in order to reduce volatility in net power costs for its retail customers. These derivative instruments may include forwards, futures, swaps, and option contracts for electricity, natural gas, oil, and foreign currency, which are recorded at fair value on the condensed consolidated balance sheets, with changes in fair value recorded in the condensed consolidated statements of operations. In accordance with the ratemaking and cost recovery process authorized by the Public Utility Commission of Oregon (OPUC), PGE recognizes a regulatory asset or liability to defer the gains and losses from derivative instruments until realized. This accounting treatment defers the fair value gains and losses on derivative instruments until settlement of the associated derivative instrument. PGE may designate certain derivative instruments as cash flow hedges or may use derivative instruments as purely economic hedges. The Company does not engage in trading activities for non-retail purposes. PGE’s Assets and Liabilities from price risk management activities consist of the following (in millions):
PGE’s net volumes related to its Assets and Liabilities from price risk management activities resulting from its derivative transactions, which are expected to deliver or settle through 2016, were as follows (in millions):
PGE has elected to report gross on the balance sheet the positive and negative exposures resulting from derivative instruments with counterparties under agreements that meet the definition of a master netting arrangement. In the case of default on, or termination of, any contract under the master netting arrangements, these agreements provide for the net settlement of all related contractual obligations with a counterparty through a single payment. These types of transactions may include non-derivative instruments, derivatives qualifying for scope exceptions, receivables and payables arising from settled positions, and other forms of non-cash collateral, such as letters of credit, which are excluded from the offsetting table presented below. Information related to Price risk management liabilities subject to master netting agreements is as follows (in millions):
Net realized and unrealized losses (gains) on derivative transactions not designated as hedging instruments are classified in Purchased power and fuel in the condensed consolidated statements of operations and were as follows (in millions):
Net unrealized and certain net realized losses (gains) presented in the table above are offset within the consolidated statements of operations by the effects of regulatory accounting. Of the net losses (gains) recognized in Net income for the three months ended June 30, 2013 and 2012, net losses of $56 million and net gains of $37 million, respectively, have been offset, with net losses of $59 million and $44 million offset for the six months ended June 30, 2013 and 2012, respectively. Assuming no changes in market prices and interest rates, the following table indicates the year in which the net unrealized loss recorded as of June 30, 2013 related to PGE’s derivative activities would become realized as a result of the settlement of the underlying derivative instrument (in millions):
PGE’s secured and unsecured debt is currently rated at investment grade by Moody’s Investors Service (Moody’s) and Standard and Poor’s Ratings Services (S&P). Should Moody’s and/or S&P reduce their rating on PGE’s unsecured debt to below investment grade, the Company could be subject to requests by certain wholesale counterparties to post additional performance assurance collateral, in the form of cash or letters of credit, based on total portfolio positions with each of those counterparties. Certain other counterparties would have the right to terminate their agreements with the Company. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position as of June 30, 2013 was $155 million, for which PGE has posted $25 million in collateral, consisting entirely of letters of credit. If the credit-risk-related contingent features underlying these agreements were triggered at June 30, 2013, the cash requirement to either post as collateral or settle the instruments immediately would have been $153 million. As of June 30, 2013, PGE has posted an additional $34 million in cash collateral which is classified as Margin deposits on the Company’s condensed consolidated balance sheet, for derivative instruments with no credit-risk related contingent features. Counterparties representing 10% or more of Assets and Liabilities from price risk management activities as of June 30, 2013 or December 31, 2012 were as follows:
See Note 3 for additional information concerning the determination of fair value for the Company’s Assets and Liabilities from price risk management activities. |
Balance Sheet Components Allowance for Uncollectible Accounts (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Allowance for Uncollectible Accounts | ||
Balance as of begining of period | $ 5 | $ 6 |
Provision, net | 3 | 4 |
Allowance for Doubtful Accounts Receivable, Charge-offs | (3) | (4) |
Balance as of end of period | $ 5 | $ 6 |
Balance Sheet Components Other Current Liabilities (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Accrued employee compensation and benefits | $ 39 | $ 46 |
Accrued interest payable | 22 | 23 |
Accrued taxes payable | 24 | 21 |
Accrued dividends payable | 21 | 21 |
Regulatory liabilities—current | 7 | 12 |
Other | 62 | 56 |
Total accrued expenses and other current liabilities | $ 175 | $ 179 |
Fair Value of Financial Instruments Unobservable Input Reconciliation (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Balance as of the beginning of the period | $ 45 | $ 95 | $ 16 | $ 79 |
Net realized and unrealized losses (1) | (11) | (7) | (15) | (11) |
Purchases | 0 | 0 | 25 | 0 |
Issuances | 0 | 0 | 0 | (1) |
Transfers out of Level 3 to Level 2 | 0 | 0 | 0 | (1) |
Balance as of the end of the period | $ 56 | $ 88 | $ 56 | $ 88 |