BALANCE SHEET COMPONENTS

Inventories

PGE’s inventories, which are recorded at average cost, consist primarily of materials and supplies for use in operations, maintenance, and capital activities, as well as fuel, which includes natural gas, coal, and oil for use in the Company’s generating plants. Periodically, the Company assesses inventory for purposes of determining that inventory is recorded at the lower of average cost or net realizable value.

Other Current Assets

Other current assets consist of the following (in millions):



	September 30, 2017		December 31, 2016
Prepaid expenses	$	27	$	48
Assets from price risk management activities	4		18
Margin deposits	4		8
Other	8		3
Other current assets	$	43	$	77

Electric Utility Plant, Net

Electric utility plant, net consists of the following (in millions):



	September 30, 2017			December 31, 2016
Electric utility plant	$	9,766		$	9,534
Construction work-in-progress	386			213
Total cost	10,152			9,747
Less: accumulated depreciation and amortization	(3,514		)	(3,313		)
Electric utility plant, net	$	6,638		$	6,434

Accumulated depreciation and amortization in the table above includes accumulated amortization related to intangible assets of $288 million and $257 million as of September 30, 2017 and December 31, 2016, respectively. Amortization expense related to intangible assets was $11 million for the three months ended September 30, 2017 and 2016, and $34 million and $33 million for the nine months ended September 30, 2017 and 2016, respectively. The Company’s intangible assets primarily consist of computer software development and hydro licensing costs.

Regulatory Assets and Liabilities

Regulatory assets and liabilities consist of the following (in millions):



	September 30, 2017					December 31, 2016
	Current			Noncurrent		Current			Noncurrent
Regulatory assets:
Price risk management	$	39		$	150	$	26		$	120
Pension and other postretirement plans	—			225		—			235
Deferred income taxes	—			83		—			86
Debt issuance costs	—			20		—			22
Other	3			48		10			35
Total regulatory assets	$	42		$	526	$	36		$	498
Regulatory liabilities:
Asset retirement removal costs	$	—		$	921	$	—		$	887
Trojan decommissioning activities	4			—		18			—
Asset retirement obligations	—			52		—			49
Other	16			29		33			22
Total regulatory liabilities	$	20	^*	$	1,002	$	51	^*	$	958

* Included in Accrued expenses and other current liabilities in the condensed consolidated balance sheets.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in millions):



	September 30, 2017		December 31, 2016
Accrued employee compensation and benefits	$	51	$	52
Accrued taxes payable	46		25
Accrued interest payable	40		25
Accrued dividends payable	31		30
Regulatory liabilities—current	20		51
Other	60		71
Total accrued expenses and other current liabilities	$	248	$	254

Credit Facilities

As of September 30, 2017, PGE had a $500 million revolving credit facility scheduled to expire in November 2020.

Pursuant to the terms of the agreement, the revolving credit facility may be used for general corporate purposes, as backup for commercial paper borrowings, and to permit the issuance of standby letters of credit. PGE may borrow for one, two, three, or six months at a fixed interest rate established at the time of the borrowing, or at a variable interest rate for any period up to the then remaining term of the credit facility. During the first quarter of 2017, PGE exercised one of the two one-year extensions available under the terms of the credit facility. Such action resulted in an updated expiration date of November 2020. The facility also contains a provision that requires annual fees based on PGE’s unsecured credit ratings, and contains customary covenants and default provisions, including a requirement that limits consolidated indebtedness, as defined in the agreement, to 65% of total capitalization. As of September 30, 2017, PGE was in compliance with this covenant with a 51.3% debt-to-total capital ratio.

The Company has a commercial paper program under which it may issue commercial paper for terms of up to 270 days, limited to the unused amount of credit under the revolving credit facility.

PGE classifies any borrowings under the revolving credit facility and outstanding commercial paper as Short-term debt on the condensed consolidated balance sheets.

Under the revolving credit facility, as of September 30, 2017, since PGE had no borrowings outstanding, and no commercial paper or letters of credit issued, the aggregate unused available credit capacity under the revolving credit facility was $500 million.

In addition, PGE has four letter of credit facilities under which the Company can request letters of credit for original terms not to exceed one year. These facilities provide a total capacity of $220 million. The issuance of such letters of credit is subject to the approval of the issuing institution. Under these facilities, letters of credit for a total of $54 million were outstanding as of September 30, 2017. Letters of credit issued are not reflected on the Company’s condensed consolidated balance sheets.

Pursuant to an order issued by the Federal Energy Regulatory Commission (FERC), the Company is authorized to issue short-term debt in an aggregate amount of up to $900 million through February 6, 2018.

Long-term Debt

On August 2, 2017, PGE entered into a bond purchase agreement to issue First Mortgage Bonds (FMBs) in the amount of $225 million at an interest rate of 3.98%. The first tranche of $75 million, with a maturity in 2048, was issued on August 2, 2017. The second tranche of $150 million, with a maturity in 2047, is expected to be issued and funded on or about November 21, 2017.

In May 2016, PGE entered into an unsecured credit agreement with certain financial institutions, under which the Company had the opportunity to obtain three separate term loans in an aggregate principal amount of up to $200 million by October 31, 2016. Under the agreement, PGE obtained three separate loans totaling $150 million. On August 21, 2017, the Company repaid one of the loans in the amount of $50 million. The credit agreement expires November 30, 2017, at which time any amounts outstanding under the term loans become due and payable.

The term loan interest rates on the remaining loans are set at the beginning of the interest period for periods of one, three, or six months, as selected by PGE, and are based on the London Interbank Offered Rate plus 63 basis points, and was 1.9% as of September 30, 2017, with no other fees.

Upon the occurrence of certain events of default, the Company’s obligations under the credit agreement may be accelerated. Such events of default include payment defaults to lenders under the credit agreement, covenant defaults, and other customary defaults for financings of this type.

Defined Benefit Pension Plan Costs

Components of net periodic benefit cost under the defined benefit pension plan are as follows (in millions):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Service cost	$	4		$	4		$	12		$	12
Interest cost	8			9			25			25
Expected return on plan assets	(10		)	(10		)	(30		)	(30		)
Amortization of net actuarial loss	3			3			9			11
Net periodic benefit cost	$	5		$	6		$	16		$	18