0000784977false2023Q1--12-3100007849772023-01-012023-03-3100007849772023-04-20xbrli:sharesiso4217:USD00007849772022-01-012022-03-31iso4217:USDxbrli:shares00007849772023-03-3100007849772022-12-310000784977us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-01-012023-03-310000784977us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-01-012022-03-3100007849772021-12-3100007849772022-03-31utr:sqmixbrli:purepor:retail_customers0000784977por:ResidentialMember2023-01-012023-03-310000784977por:ResidentialMember2022-01-012022-03-310000784977por:CommercialMember2023-01-012023-03-310000784977por:CommercialMember2022-01-012022-03-310000784977por:IndustrialMember2023-01-012023-03-310000784977por:IndustrialMember2022-01-012022-03-310000784977por:DirectAccesscustomersMember2023-01-012023-03-310000784977por:DirectAccesscustomersMember2022-01-012022-03-310000784977us-gaap:DeferredDerivativeGainLossMember2023-03-310000784977us-gaap:DeferredDerivativeGainLossMember2022-12-310000784977us-gaap:PensionAndOtherPostretirementPlansCostsMember2023-03-310000784977us-gaap:PensionAndOtherPostretirementPlansCostsMember2022-12-310000784977us-gaap:LossOnReacquiredDebtMember2023-03-310000784977us-gaap:LossOnReacquiredDebtMember2022-12-310000784977us-gaap:EnvironmentalRestorationCostsMember2023-03-310000784977us-gaap:EnvironmentalRestorationCostsMember2022-12-310000784977us-gaap:StormCostsMember2023-03-310000784977us-gaap:StormCostsMember2022-12-310000784977us-gaap:DeferredFuelCostsMember2023-03-310000784977us-gaap:DeferredFuelCostsMember2022-12-310000784977us-gaap:FireMember2023-03-310000784977us-gaap:FireMember2022-12-310000784977por:PandemicMember2023-03-310000784977por:PandemicMember2022-12-310000784977por:WildfireMember2023-03-310000784977por:WildfireMember2022-12-310000784977us-gaap:OtherRegulatoryAssetsLiabilitiesMember2023-03-310000784977us-gaap:OtherRegulatoryAssetsLiabilitiesMember2022-12-310000784977us-gaap:RemovalCostsMember2023-03-310000784977us-gaap:RemovalCostsMember2022-12-310000784977us-gaap:DeferredIncomeTaxChargesMember2023-03-310000784977us-gaap:DeferredIncomeTaxChargesMember2022-12-310000784977us-gaap:AssetRetirementObligationCostsMember2023-03-310000784977us-gaap:AssetRetirementObligationCostsMember2022-12-310000784977us-gaap:RegulatoryClauseRevenuesUnderRecoveredMember2023-03-310000784977us-gaap:RevenueSubjectToRefundMember2023-03-310000784977us-gaap:RegulatoryClauseRevenuesUnderRecoveredMember2022-12-310000784977us-gaap:RevenueSubjectToRefundMember2022-12-310000784977us-gaap:OtherRegulatoryAssetsLiabilitiesMember2023-03-310000784977us-gaap:OtherRegulatoryAssetsLiabilitiesMember2022-12-310000784977us-gaap:LetterOfCreditMember2023-03-310000784977us-gaap:PensionPlansDefinedBenefitMember2023-01-012023-03-310000784977us-gaap:PensionPlansDefinedBenefitMember2022-01-012022-03-310000784977us-gaap:FairValueInputsLevel1Member2023-03-310000784977us-gaap:FairValueInputsLevel2Member2023-03-310000784977us-gaap:FairValueInputsLevel3Member2023-03-310000784977us-gaap:FairValueInputsLevel1Member2022-12-310000784977us-gaap:FairValueInputsLevel2Member2022-12-310000784977us-gaap:FairValueInputsLevel3Member2022-12-310000784977us-gaap:AssetsMember2023-03-310000784977us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2023-03-310000784977srt:MinimumMember2023-03-310000784977srt:MaximumMember2023-03-310000784977srt:WeightedAverageMember2023-03-310000784977us-gaap:AssetsMember2022-12-310000784977us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2022-12-310000784977srt:MinimumMember2022-12-310000784977srt:MaximumMember2022-12-310000784977srt:WeightedAverageMember2022-12-31utr:MWhutr:MMBTUiso4217:CAD0000784977us-gaap:ElectricityMember2023-03-310000784977srt:NaturalGasReservesMember2023-03-310000784977por:UnrealizedGainLossOnDerivativesMember2023-03-310000784977us-gaap:CommonStockMember2022-12-310000784977us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-12-310000784977us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000784977us-gaap:RetainedEarningsMember2022-12-310000784977us-gaap:CommonStockMember2023-01-012023-03-3100007849772022-01-012022-09-300000784977us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310000784977us-gaap:RetainedEarningsMember2023-01-012023-03-310000784977us-gaap:CommonStockMember2023-03-310000784977us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-03-310000784977us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310000784977us-gaap:RetainedEarningsMember2023-03-310000784977us-gaap:CommonStockMember2021-12-310000784977us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-12-310000784977us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000784977us-gaap:RetainedEarningsMember2021-12-310000784977us-gaap:CommonStockMember2022-01-012022-03-310000784977us-gaap:RetainedEarningsMember2022-01-012022-03-3100007849772021-01-012021-12-310000784977us-gaap:CommonStockMember2022-03-310000784977us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-03-310000784977us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310000784977us-gaap:RetainedEarningsMember2022-03-31por:party
Table of Contents






UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023

or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ____________________ to ____________________

Commission File Number: 001-5532-99

PORTLAND GENERAL ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)

Oregon93-0256820
(State or other jurisdiction of
incorporation or organization)
     (I.R.S. Employer          
     Identification No.)          
121 SW Salmon Street
Portland, Oregon 97204
(503) 464-8000
(Address of principal executive offices, including zip code,
and registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:
(Title of class)(Trading Symbol)(Name of exchange on which registered)
Common Stock, no par valuePORNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [x] Yes [ ] No
  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
[x] Yes x [ ] No
  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. [ ]

 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [x] No
 
Number of shares of common stock outstanding as of April 20, 2023 is 96,621,298 shares.
1

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

TABLE OF CONTENTS

Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 6.
2

Table of Contents

DEFINITIONS

The following abbreviations and acronyms are used throughout this document:

Abbreviation or AcronymDefinition
AFUDCAllowance for funds used during construction
AUTAnnual Power Cost Update Tariff
ColstripColstrip Units 3 and 4 coal-fired generating plant
EPAUnited States Environmental Protection Agency
FERCFederal Energy Regulatory Commission
FMBsFirst Mortgage Bonds
GAAPAccounting principles generally accepted in the United States of America
GRCGeneral Rate Case
IRPIntegrated Resource Plan
Moody’sMoody’s Investors Service
MWMegawatts
MWaAverage megawatts
MWhMegawatt hour
NasdaqNational Association of Securities Dealers Automated Quotations
NVPCNet Variable Power Costs
NYSENew York Stock Exchange
OPUCPublic Utility Commission of Oregon
PCAMPower Cost Adjustment Mechanism
RPSRenewable Portfolio Standard
S&PS&P Global Ratings
SECUnited States Securities and Exchange Commission
WheatridgeWheatridge Renewable Energy Facility
3

Table of Contents

PART I FINANCIAL INFORMATION

Item 1.Financial Statements.
 
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Dollars in millions, except per share amounts)
(Unaudited)                            
Three Months Ended March 31,
20232022
Revenues:
Revenues, net$745 $625 
Alternative revenue programs, net of amortization3 1 
Total revenues748 626 
Operating expenses:
Purchased power and fuel304 202 
Generation, transmission and distribution93 90 
Administrative and other80 89 
Depreciation and amortization111 99 
Taxes other than income taxes43 40 
Total operating expenses631 520 
Income from operations117 106 
Interest expense, net44 38 
Other income:
Allowance for equity funds used during construction3 3 
Miscellaneous income, net12  
Other income, net15 3 
Income before income tax expense88 71 
Income tax expense 14 11 
Net income and Comprehensive income$74 $60 
Weighted-average common shares outstanding (in thousands):
Basic91,840 89,396 
Diluted92,571 89,527 
Earnings per share:
Basic
$0.81 $0.67 
Diluted$0.80 $0.67 
See accompanying notes to condensed consolidated financial statements.
    
4

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)                            



March 31, 2023December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents$12 $165 
Accounts receivable, net362 398 
Inventories95 95 
Regulatory assets—current65 54 
Other current assets232 498 
Total current assets766 1,210 
Electric utility plant, net8,611 8,465 
Regulatory assets—noncurrent481 473 
Nuclear decommissioning trust38 39 
Non-qualified benefit plan trust38 38 
Other noncurrent assets217 234 
Total assets$10,151 $10,459 
See accompanying notes to condensed consolidated financial statements.


5

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, continued
(Dollars in millions)
(Unaudited)                        


March 31, 2023December 31, 2022
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$242 $457 
Liabilities from price risk management activities—current100 118 
Short-term debt68  
Current portion of long-term debt 260 
Current portion of finance lease obligation20 20 
Accrued expenses and other current liabilities321 641 
Total current liabilities751 1,496 
Long-term debt, net of current portion3,485 3,386 
Regulatory liabilities—noncurrent1,398 1,389 
Deferred income taxes447 439 
Unfunded status of pension and postretirement plans170 170 
Liabilities from price risk management activities—noncurrent70 75 
Asset retirement obligations250 257 
Non-qualified benefit plan liabilities81 83 
Finance lease obligations, net of current portion293 294 
Other noncurrent liabilities94 91 
Total liabilities7,039 7,680 
Commitments and contingencies (see notes)
Shareholders’ Equity:
Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of March 31, 2023 and December 31, 2022
  
Common stock, no par value, 160,000,000 shares authorized; 96,620,972 and 89,283,353 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively
1,548 1,249 
Accumulated other comprehensive loss(4)(4)
Retained earnings1,568 1,534 
Total shareholders’ equity3,112 2,779 
Total liabilities and shareholders’ equity$10,151 $10,459 
See accompanying notes to condensed consolidated financial statements.

6

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)    
                                                        

Three Months Ended March 31,
20232022
Cash flows from operating activities:
Net income$74 $60 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization111 99 
Deferred income taxes4 4 
Pension and other postretirement benefits1 3 
Allowance for equity funds used during construction(3)(3)
Decoupling mechanism deferrals, net of amortization(3)(1)
Regulatory assets(6)(15)
Regulatory liabilities8 5 
2020 Labor Day wildfire earnings test reserve 15 
Other non-cash income and expenses, net10 15 
Changes in working capital:
Decrease in accounts receivable, net34 21 
Decrease in inventories 6 
Decrease in margin deposits86 23 
(Decrease) in accounts payable and accrued liabilities(174)(44)
(Decrease)/increase in margin deposits from wholesale counterparties(140)99 
Other working capital items, net(27)(27)
Other, net(14)(11)
Net cash (used in) provided by operating activities(39)249 
See accompanying notes to condensed consolidated financial statements.
7

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(In millions)
(Unaudited)        
Three Months Ended March 31,
20232022
Cash flows from investing activities:
Capital expenditures(274)(167)
Sales of Nuclear decommissioning trust securities 2 
Purchases of Nuclear decommissioning trust securities (2)
Proceeds from sale of properties2 12 
Other, net(4)1 
Net cash used in investing activities(276)(154)
Cash flows from financing activities:
Proceeds from issuance of common stock$300 $ 
Proceeds from issuance of long-term debt100  
Payments on long-term debt(260) 
Issuance of commercial paper, net68  
Proceeds from Pelton/Round Butte financing arrangement 25 
Dividends paid(40)(38)
Repurchase of common stock (18)
Other(6)(6)
Net cash provided by (used in) financing activities162 (37)
(Decrease) Increase in cash and cash equivalents(153)58 
Cash and cash equivalents, beginning of period165 52 
Cash and cash equivalents, end of period$12 $110 
Supplemental cash flow information is as follows:
Cash paid for interest, net of amounts capitalized$22 $18 
Cash paid for income taxes2 2 
Non-cash investing and financing activities:
Assets obtained under leasing arrangements 29 
See accompanying notes to condensed consolidated financial statements.
8

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1: BASIS OF PRESENTATION

Nature of Business

Portland General Electric Company (PGE or the Company) is a vertically-integrated electric utility engaged in the generation, purchase, transmission, distribution, and retail sale of electricity in the State of Oregon (State). The Company participates in the wholesale market by purchasing and selling electricity and natural gas, as well as buying and selling transmission products and services, in an effort to provide reasonably-priced power for its retail customers. In addition, PGE offers wholesale electricity transmission service pursuant to its Open Access Transmission Tariff , which contains rates, terms, and conditions of service, as filed with, and approved by, the Federal Energy Regulatory Commission (FERC). PGE operates as a single segment, with revenues and costs related to its business activities recorded and analyzed on a total electric operations basis. The Company’s corporate headquarters is located in Portland, Oregon and its approximately 4,000 square mile, State-approved service area, entirely within the State, encompasses 51 incorporated cities. As of March 31, 2023, PGE served 928,000 retail customers within a service area of 1.9 million residents.

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 note 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.

The financial information included herein as of and for the three months ended March 31, 2023 and 2022 is unaudited; however, in the opinion of management, such information reflects all adjustments necessary to fairly present the condensed consolidated financial position, condensed consolidated income and comprehensive income, and condensed consolidated cash flows of the Company for these interim periods. All such adjustments are of a normal recurring nature, unless otherwise noted. The financial information as of December 31, 2022 is derived from the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2022, included in Item 8 of PGE’s Annual Report on Form 10-K, filed with the SEC on February 16, 2023, which should be read in conjunction with the interim unaudited Financial Statements.

Comprehensive Income

No material change occurred in Other comprehensive income in the three months ended March 31, 2023 and 2022.

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.

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
9

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
price of wholesale electricity and natural gas, interim financial results do not necessarily represent those to be expected for the year.

NOTE 2: REVENUE RECOGNITION

Disaggregated Revenue

The following table presents PGE’s revenue, disaggregated by customer type (in millions):
Three Months Ended March 31,
20232022
Retail:
Residential$362 $308 
Commercial197 178 
Industrial82 69 
Direct access customers6 8 
Subtotal647 563 
Alternative revenue programs, net of amortization3 1 
Other accrued revenues, net1  
Total retail revenues651 564 
Wholesale revenues*
88 56 
Other operating revenues9 6 
Total revenues$748 $626 

* Wholesale revenues include $34 million and $19 million related to electricity commodity contract derivative settlements for the three months ended March 31, 2023 and 2022, respectively. Price risk management derivative activities are included within total revenues but do not represent revenues from contracts with customers as defined by GAAP. For further information, see Note 5, Risk Management.

Retail Revenues

The Company’s primary revenue source is the sale of electricity to customers at regulated, tariff-based prices. Retail customers are classified as residential, commercial, or industrial. Residential customers include single-family housing, multiple-family housing (such as apartments, duplexes, and town homes), manufactured homes, and small farms. Residential demand is sensitive to the effects of weather, with demand highest during the winter heating and summer cooling seasons. Commercial customers accept energy deliveries at voltages equivalent to those delivered to residential customers and are also sensitive to the effects of weather, although to a lesser extent than residential customers. Commercial customers include most businesses, small industrial companies, and public street and highway lighting accounts. Industrial customers consist of non-residential customers who accept delivery at higher voltages than commercial customers. Demand from industrial customers is primarily driven by economic conditions, with weather having little impact on energy use by this customer class.
In accordance with state regulations, PGE’s retail customer prices are based on the Company’s cost of service and determined through general rate case (GRC) proceedings and various tariff filings with the Public Utility Commission of Oregon (OPUC). Additionally, the Company offers pricing options that include a daily market price option, various time-of-use options, and several renewable energy options.
10

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
Retail revenue is billed based on monthly meter readings taken at various cycle dates throughout the month. At the end of each month, PGE estimates the revenue earned from energy deliveries that have not yet been billed to customers. This amount, classified as unbilled revenues, which is included in Accounts receivable, net in the Company’s condensed consolidated balance sheets, is calculated based on actual net retail system load each month, the number of days from the last meter read date through the last day of the month, and current customer prices.
PGE’s obligation to sell electricity to retail customers generally represents a single performance obligation representing a series of distinct services that are substantially the same and have the same pattern of transfer to the customer that is satisfied over time as customers simultaneously receive and consume the benefits provided. The Company applies the invoice method to measure its progress towards satisfactorily completing its performance obligations.
Pursuant to regulation by the OPUC, PGE is mandated to maintain several tariff schedules to collect funds from customers for programs that benefit the general public, such as conservation, low-income housing, energy efficiency, renewable energy programs, and privilege taxes. For such programs, the Company generally collects the funds and remits the amounts to third party agencies that administer the programs. In these arrangements, PGE is considered to be an agent, as the Company’s performance obligation is to facilitate a transaction between customers and the administrators of these programs. Therefore, such amounts are presented on a net basis within Revenues, net on the condensed consolidated statements of income.
Wholesale Revenues
PGE participates in the wholesale electricity marketplace in order to balance its supply of power to meet the needs of its retail customers. Interconnected transmission systems in the western United States serve utilities with diverse load requirements and allow the Company to purchase and sell electricity within the region depending upon, among other things, the relative price and availability of power; hydro, solar and wind conditions; and daily and seasonal retail demand.
PGE’s Wholesale revenues are primarily short-term electricity sales to utilities and power marketers that consist of single performance obligations that are satisfied as energy is transferred to the counterparty. The Company may choose to net certain purchase and sale transactions in which it would simultaneously receive and deliver physical power with the same counterparty; in such cases, only the net amount of those purchases or sales required to meet retail and wholesale obligations will be physically settled and recorded in Wholesale revenues.
Other Operating Revenues
Other operating revenues consist primarily of gains and losses on the sale of natural gas volumes purchased that exceeded what was needed to fuel the Company’s generating facilities, as well as revenues from transmission services, excess transmission capacity resales, utility pole attachment revenues, and other services provided to customers and other energy providers.

Arrangements with Multiple Performance Obligations

Certain contracts with customers, primarily wholesale, may include multiple performance obligations. For such arrangements, PGE allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers.


11

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
NOTE 3: 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, PGE assesses whether inventories are recorded at the lower of average cost or net realizable value.

Accounts Receivable, Net

Accounts receivable, net includes $115 million and $131 million of unbilled revenues as of March 31, 2023 and December 31, 2022, respectively. Accounts receivable, net includes an allowance for credit losses of $13 million and $12 million as of March 31, 2023 and December 31, 2022, respectively. The following summarizes activity in the allowance for credit losses (in millions):
Three Months Ended March 31,
 2023
Balance as of beginning of period$12 
Increase in provision3 
Amounts written off(3)
Recoveries1 
Balance as of end of period$13 

Other Current Assets

Other current assets consist of the following (in millions):
March 31, 2023December 31, 2022
Prepaid expenses$89 $69 
Assets from price risk management activities113 313 
Margin deposits30 116 
Other current assets$232 $498 

Assets from price risk management activities and related unrealized gains as well as Margin deposits decreased during the three months ended March 31, 2023 due to decreases in wholesale natural gas and electricity prices. For further information, see Note 5, Risk Management.


12

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
Electric Utility Plant, Net

Electric utility plant, net consists of the following (in millions):             
March 31, 2023December 31, 2022
Electric utility plant in-service$12,704 $12,421 
Construction work-in-progress411 467 
Total cost13,115 12,888 
Less: accumulated depreciation and amortization(4,504)(4,423)
Electric utility plant, net$8,611 $8,465 

Accumulated depreciation and amortization in the table above includes accumulated amortization related to intangible assets of $513 million and $499 million as of March 31, 2023 and December 31, 2022, respectively. Amortization expense related to intangible assets was $14 million and $15 million for the three months ended March 31, 2023 and 2022, respectively. The Company’s intangible assets primarily consist of computer software development and hydro licensing costs.
Battery storage agreement—On April 26, 2023, PGE entered into a battery storage purchased power agreement (PPA) that will be accounted for as a lease upon commencement. The lease is expected to commence in December 2024 and has a term of 20 years. The expected total fixed contract consideration will approximate $737 million over the lease term.

13

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
Regulatory Assets and Liabilities

Regulatory assets and liabilities consist of the following (in millions):
March 31, 2023December 31, 2022
CurrentNoncurrentCurrentNoncurrent
Regulatory assets:
Price risk management$ $22 $ $1 
Pension and other postretirement plans 95  95 
Debt issuance costs 21  21 
Trojan decommissioning activities 133  133 
February 2021 ice storm and damage12 61 10 64 
Power cost adjustment mechanism16 10 14 14 
2020 Labor Day wildfire5 26 4 27 
COVID-1912 10  22 
Wildfire mitigation 31  28 
Other20 72 26 68 
Total regulatory assets$65 $481 $54 $473 
Regulatory liabilities:
Asset retirement removal costs$ $1,145 $ $1,136 
Deferred income taxes 190  194 
Asset retirement obligations 9  7 
Price risk management12  195  
Other34 54 39 52 
Total regulatory liabilities$46 
*
$1,398 $234 
*
$1,389 

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

Wildfire Mitigation represents incremental costs and investments made by PGE under SB 762, which was passed in the 2021 legislative session with an effective date of July 19, 2021. SB 762 instructs public utilities to develop, implement, and execute a wildfire protection plan, in which reasonable costs can be recovered through the prices to all customers. The outcome of PGE’s 2022 GRC provided an annual amount of $24 million to be collected in base rates in regards to wildfire mitigation efforts. On July 1, 2022, PGE filed an application for reauthorization of OPUC Docket UM 2019 to defer incremental wildfire mitigation costs which exceed the amount granted in base rates. As of March 31, 2023 and December 31, 2022, PGE’s deferred balance related to wildfire mitigation was $31 million and $28 million, respectively. While the Company believes the full amount of the deferral is probable of recovery, the OPUC has significant discretion in making the final determination of recovery. The OPUC’s conclusions of overall prudence, or application of a potential earnings test, could result in a portion, or all, of PGE’s deferral being disallowed for recovery. Such disallowance would be recognized as a charge to earnings.

COVID-19—The COVID-19 pandemic led Oregon’s Governor to declare a state of emergency on March 8, 2020. Due to the adverse impacts of COVID-19 on economic activity, PGE experienced an increase in bad debt expense, lost revenue, and other incremental costs. On March 20, 2020, PGE filed an application with the OPUC for deferral of lost revenue and certain incremental costs, such as bad debt expense, related to COVID-19. PGE, other utilities under the OPUC’s jurisdiction, intervenors, and OPUC staff held discussions regarding the scope of costs incurred by utilities which may qualify for deferral under Docket UM 2114, Investigation into the Effects of the COVID-19 Pandemic on Utility Customers. The result of those discussions was an Energy Term Sheet (Term Sheet), which
14

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
dictates costs in scope for deferral but is silent to the timing of recovery of such costs. On September 24, 2020, the Commission adopted a proposed OPUC Staff motion for Staff to execute stipulations incorporating the terms of the Term Sheet. PGE’s deferral application was approved by the Commission on October 20, 2020 with final stipulations for the Term Sheet approved on November 3, 2020. As of both March 31, 2023 and December 31, 2022, PGE’s deferred balance was $22 million, comprised primarily of bad debt expense in excess of what is currently considered and collected in customer prices. The Company has released deferrals associated with the year ended 2020, resulting in a pre-tax charge to earnings for 2022 in the amount of $2 million. The amount recorded represents the Company’s estimate based on its understanding of the OPUC’s intent to apply an earnings test to certain elements of utility COVID deferrals. PGE filed a request for amortization of deferred amounts on December 16, 2022, which reflected a $12 million adjustment primarily related to bad debt write-offs being lower than estimated. During the March 14, 2023 public meeting, Staff recommended the Commission approve PGE's filing of Advice No. 22-45 associated with the recovery of the COVID-19 deferral. On March 21, 2023, Advice No. 22-45 was approved by the Commission, allowing for amortization of deferred amounts over a two-year period, which began April 1, 2023.

Deferral of Boardman revenue requirementIn October 2020, intervenors filed a deferral application with the OPUC that would require PGE to defer and refund the revenue requirement associated with the Company’s Boardman coal-fired generating plant (Boardman) then included in customer prices as established in the Company’s 2019 GRC. The application stated a deferral was required for customers to adequately capture the reduction in revenue requirement beginning on October 15, 2020, the date Boardman ceased operations. PGE estimated the revenue requirement for Boardman to be $14 million for the year ended December 31, 2020, an additional $66 million for the year ended December 31, 2021, and $23 million for the year ended December 31, 2022. In the 2022 GRC Order, the OPUC found that the deferral was warranted with amortization subject to an earnings test. On July 27, 2022, the Company filed an application, which, subject to OPUC approval, showed that the Company did not exceed the earnings test threshold for 2020 or 2021 and consequently, no refund would be required for those years. Customer prices resulting from the 2022 GRC Order no longer include any revenue requirement related to Boardman after new customer prices took effect on May 9, 2022. Although still subject to OPUC review, PGE does not believe it exceeded its regulated return on equity under the earnings test for 2022. On October 24, 2022, PGE and parties submitted a stipulation with the OPUC reflecting an agreement that resolved all matters related to 2021 under this deferral and states that no refund remains necessary for that year. The stipulation remains subject to OPUC approval. Review and determination of potential refund for the periods related to 2020 and 2022 remain outstanding.

In November 2022, the OPUC granted a motion by PGE to suspend the procedural schedule and directed the Company to file a status update no later than February 16, 2023. In granting the ruling the OPUC noted that it expects to resolve this matter, addressing both the 2020 and 2022 deferrals, within the first half of 2023. The status update on February 16, 2023 stated that a settlement conference had been scheduled and parties anticipated filing with the OPUC another status update, settlement agreement, or proposed procedural schedule by March 14, 2023. On March 13, 2023, PGE notified the OPUC that settlement discussions had been productive and the parties are progressing toward resolution of the matter before the end of the first half of 2023. Based on the application of an earnings test, PGE has not recorded a refund related to Boardman for 2020, 2021, or 2022. PGE believes the range of reasonably possible refund is limited to the Boardman revenue requirement for the year 2020. The OPUC has significant discretion in making the final determination of the application of the earnings test for 2020, 2021, and 2022 and could require additional refunds that would be recognized as a charge to earnings, which could be material.


15

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in millions):
March 31, 2023December 31, 2022
Accrued employee compensation and benefits$52 $66 
Accrued taxes payable30 29 
Accrued interest payable46 31 
Accrued dividends payable42 42 
Regulatory liabilities—current46 234 
Margin deposits from wholesale counterparties 140 
Other105 99 
Total accrued expenses and other current liabilities$321 $641 

The current portion of Regulatory liabilities and Margin deposits from wholesale counterparties decreased during the three months ended March 31, 2023 due to decreases in wholesale natural gas and electricity prices. For further information, see Note 5, Risk Management.

Credit Facilities

As of March 31, 2023, PGE had a $650 million revolving credit facility scheduled to expire in September 2027. The Company has the ability to expand the revolving credit facility to $750 million, if needed, subject to the requirements of the agreement. Pursuant to the terms of the agreement, the revolving credit facility may be used for general corporate purposes, including as backup for commercial paper borrowings and to permit the issuance of standby letters of credit. PGE may borrow for one, 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 applicable credit facility. The revolving credit facility contains a provision that requires annual fees based on the Companys 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 March 31, 2023, PGE was in compliance with this covenant with a 54.2% debt-to-total capital ratio and the aggregate unused available credit capacity under the revolving credit facility was $582 million. In addition, the credit facility offers the potential for adjustments to interest rate margins and fees based on PGE’s achievement of certain annual sustainability-linked metrics related to its non-emitting generation capacity and the percentage of management comprised of women and employees who identify as black, indigenous, and people of color. The Company believes these potential adjustments will have an immaterial impact on PGE’s results of operations.

The Company has a commercial paper program under which it may issue commercial paper for terms of up to 270 days. The Company has elected to limit its borrowings under the revolving credit facility in order to allow for coverage of any potential need to repay any commercial paper that may be outstanding at the time. As of March 31, 2023, PGE had $68 million commercial paper outstanding.

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

In addition, PGE has three letter of credit facilities that provide a total capacity of $220 million under which the Company can request letters of credit for original terms not to exceed one year. 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 $135 million were outstanding as of March 31, 2023. Letters of credit issued are not reflected on the Company’s condensed consolidated balance sheets.
16

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)

Pursuant to an order issued by the FERC, the Company is authorized to issue short-term debt in an aggregate amount of up to $900 million through February 6, 2024.

Long-term Debt

On October 21, 2022, PGE obtained a 366-day term loan from lenders in the aggregate principal of $260 million under a 366-Day Bridge Credit Agreement. The term loan bore interest for the relevant interest period at the Term Secured Overnight Financing Rate (SOFR) plus Term SOFR Adjustment Rate of 10 basis points and applicable margin of 87.5 basis points. The interest rate was subject to adjustment pursuant to the terms of the loan. On March 1, 2023, this term loan was repaid in full with proceeds from the Equity Forward Sale Agreement described in Note 7, Shareholders’ Equity.

On November 30, 2022, PGE entered into a Bond Purchase Agreement related to the sale of $200 million in First Mortgage Bonds (FMBs), $100 million of which were funded in full on January 13, 2023.

Defined Benefit Retirement Plan Costs

Components of net periodic benefit cost under the defined benefit pension plan are as follows (in millions):
Three Months Ended March 31,
20232022
Service cost$3 $4 
Interest cost*9 7 
Expected return on plan assets*(11)(12)
Amortization of net actuarial loss* 4 
Net periodic benefit cost$1 $3 

* The net expense portion of non-service cost components are included in Miscellaneous income (expense), net within Other income on the Company’s condensed consolidated statements of income and comprehensive income.

NOTE 4: FAIR VALUE OF FINANCIAL INSTRUMENTS

PGE estimated the fair value of financial asset and liability instruments as of March 31, 2023 and December 31, 2022, and classified these financial instruments based on a fair value hierarchy that is applied to prioritize the inputs to the valuation techniques used to measure fair value. The three levels of the fair value hierarchy and application to the Company are:

Level 1
Quoted prices are available in active markets for identical assets or liabilities as of the measurement date;
Level 2
Pricing inputs include those that are directly or indirectly observable in the marketplace as of the measurement date; and
Level 3
Pricing inputs include significant inputs that are unobservable for the asset or liability.
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 assets and liabilities and their placement within the fair value hierarchy. Assets measured at fair value using net asset value (NAV) as a practical expedient are not
17

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
categorized in the fair value hierarchy. These assets are listed in the totals of the fair value hierarchy to permit the reconciliation to amounts presented in the financial statements.

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.

The Company’s financial assets and liabilities whose values were recognized at fair value in the Company’s condensed consolidated balance sheets are as follows by level within the fair value hierarchy (in millions):

As of March 31, 2023
Level 1Level 2Level 3
Other (2)
Total
Assets:
Cash equivalents$ $ $ $— $ 
Nuclear decommissioning trust: (1)
Debt securities:
Domestic government10 10  — 20 
Corporate credit 11  — 11 
Money market funds— — — 7 7 
Non-qualified benefit plan trust: (3)
Debt securities—domestic government3   — 3 
Money market funds3   — 3 
Equity securities3   — 3 
Price risk management activities: (1) (4)
Electricity 39 45 — 84 
Natural gas 71 6 — 77 
$19 $131 $51 $7 $208 
Liabilities:
Price risk management activities: (1) (4)
Electricity$ $41 $72 $— $113 
Natural gas 50 7 — 57 
$ $91 $79 $— $170 
 
(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)Assets are measured at NAV as a practical expedient and not subject to hierarchy level classification disclosure.
(3)Excludes insurance policies of $29 million, which are recorded at cash surrender value.
(4)For further information, see Note 5, Risk Management.

18

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
As of December 31, 2022
Level 1Level 2Level 3
Other (2)
Total
Assets:
Cash equivalents$150 $ $ $— $150 
Nuclear decommissioning trust: (1)
Debt securities:
Domestic government9 10  — 19 
Corporate credit 9  — 9 
Money market funds— — — 11 11 
Non-qualified benefit plan trust: (3)
Debt securities—domestic government3   — 3 
Money market funds1   — 1 
Equity securities3   — 3 
Price risk management activities: (1) (4)
Electricity 93 63 — 156 
Natural gas 225 6 — 231 
$166 $337 $69 $11 $583 
Liabilities:
Price risk management activities: (1) (4)
Electricity$ $53 $93 $— $146 
Natural gas 39 8 — 47 
$ $92 $101 $— $193 
 
(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)Assets are measured at NAV as a practical expedient and not subject to hierarchy level classification disclosure.
(3)Excludes insurance policies of $31 million, which are recorded at cash surrender value.
(4)For further information, see Note 5, Risk Management.

Cash equivalents are highly liquid investments with maturities of three months or less at the date of acquisition and primarily consist of money market funds. Such funds seek to maintain a stable net asset value and are comprised of short-term, government funds. Policies of such funds require that the weighted average maturity of securities holdings of such funds not exceed 90 days and provide investors with the ability to redeem shares of the funds daily at their respective net asset value. Cash equivalents 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 measurement date. Principal markets for money market fund prices include published exchanges such as the National Association of Securities Dealers Automated Quotations (Nasdaq) and the New York Stock Exchange (NYSE).

Assets held in the Nuclear decommissioning trust (NDT) and Non-qualified benefit plan (NQBP) trusts are recorded at fair value in PGE’s condensed 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:
 
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 measurement date.
19

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
 
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 yields and issuer spreads. The external credit rating, coupon rate, and maturity of each security are considered in the valuation, as applicable.

Equity securities—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 measurement date. Principal markets for equity prices include published exchanges such as Nasdaq and the NYSE.

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. The Company believes the redemption value of these funds is likely to be the fair value, which is represented by the net asset value. Redemption is permitted daily without written notice.

The NQBP trust is invested in exchange-traded government money market funds and is classified as Level 1 in the fair value hierarchy due to the availability of quoted prices in published exchanges such as Nasdaq and the NYSE. The money market fund in the NDT is valued at NAV as a practical expedient and is not included in the fair value hierarchy.

Assets and liabilities from price risk management activities, recorded at fair value in PGE’s condensed consolidated balance sheets, consist of derivative instruments entered into by the Company to manage its risk exposure to commodity price and foreign currency exchange rates and reduce volatility in NVPC for the Company’s retail customers. For additional information regarding these assets and liabilities, see Note 5, 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 forward commodity prices and interest rates. Substantially all of these inputs 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 commodity forwards, futures, and swaps.

Assets and liabilities from price risk management activities classified as Level 3 consist of longer-term commodity forwards, futures, swaps, and options for which fair value is derived using one or more significant inputs that are not observable for the entire term of the instrument.

20

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
Quantitative information regarding the significant, unobservable inputs used in the measurement of Level 3 assets and liabilities from price risk management activities is presented below:
Fair ValueValuation TechniqueSignificant Unobservable InputPrice per Unit
Commodity ContractsAssetsLiabilitiesLowHighWeighted Average
(in millions)
As of March 31, 2023
Electricity physical forwards$44 $69 Discounted cash flowElectricity forward price (per MWh)$39.21 $245.00 $96.46 
Natural gas financial swaps6 8 Discounted cash flowNatural gas forward price (per Decatherm)2.81 9.36 4.02 
Electricity financial futures1 2 Discounted cash flowElectricity forward price (per MWh)40.00 209.00 108.12 
$51 $79 
As of December 31, 2022
Electricity physical forwards$52 $93 Discounted cash flowElectricity forward price (per MWh)$35.00 $270.00 $101.27 
Natural gas financial swaps6 8 Discounted cash flowNatural gas forward price (per Decatherm)2.71 24.71 4.42 
Electricity financial futures11  Discounted cash flowElectricity forward price (per MWh)54.17 143.70 104.21 
$69 $101 

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. For certain long-term contracts, observable, liquid market transactions are not available for the duration of the delivery period. In such instances, the Company uses internally-developed long-term price curves that utilize observable data when available. When not available, regression techniques are used to estimate unobservable future prices.

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 PGE’s position as either the buyer or seller under the contract. Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:

Significant Unobservable InputPositionChange to InputImpact on Fair Value
Market priceBuyIncrease (decrease)Gain (loss)
Market priceSellIncrease (decrease)Loss (gain)


21

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
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):

Three Months Ended March 31,
20232022
Balance as of the beginning of the period$32 $85 
Net realized and unrealized (gains)*
(11)(37)
Transfers from Level 3 to Level 27 4 
Balance as of the end of the period$28 $52 
* Both realized and unrealized losses/(gains), of which the unrealized portions are offset by the effects of regulatory accounting until settlement of the underlying transactions, are recorded in Revenues, net or Purchased power and fuel expense in the condensed consolidated statements of income and comprehensive income. Includes $5 million in net realized losses for the three months ended March 31, 2023 and $1 million in net realized gains for the three months ended March 31, 2022.

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.

Long-term debt is recorded at amortized cost in PGE’s condensed consolidated balance sheets. The value of the Company’s FMBs and Pollution Control Revenue Bonds is classified as a Level 2 fair value measurement.

As of March 31, 2023, the carrying amount of PGE’s long-term debt was $3,485 million, net of $13 million of unamortized debt expense, and its estimated aggregate fair value was $3,110 million. As of December 31, 2022, the carrying amount of PGE’s long-term debt was $3,646 million, net of $13 million of unamortized debt expense, and its estimated aggregate fair value was $2,984 million.

NOTE 5: RISK MANAGEMENT

PGE participates in the wholesale marketplace 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 the Company’s long-term wholesale contracts. Wholesale market transactions include purchases and sales of both power and fuel resulting from economic dispatch decisions with respect to Company-owned generation resources. The Company also performs portfolio management and wholesale market sales services for third parties in the region. As a result of this ongoing business activity, 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 exchange rate risk in order to reduce volatility in NVPC for its retail customers. Such derivative instruments, recorded at fair value on the condensed consolidated balance sheets, may include forwards, future, swap, and options contracts for electricity, natural gas, and foreign currency, with changes in fair value recorded in the condensed consolidated statements of income and comprehensive income. PGE also enters into non-exchange-traded weather contract options, which are accounted for using the intrinsic value method. In accordance with ratemaking and cost recovery processes authorized by the OPUC, the Company recognizes a regulatory asset or liability to defer the gains and losses from derivative activity until settlement of the associated derivative instrument. PGE may designate certain derivative instruments as cash flow hedges or may use derivative instruments as economic hedges. The Company does not intend to engage in trading activities for non-retail purposes.


22

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
PGE’s Assets and Liabilities from price risk management activities consist of the following (in millions):
March 31, 2023December 31, 2022
Current assets:
Commodity contracts:
Electricity$52 $112 
Natural gas61 201 
Total current derivative assets (1)
113 313 
Noncurrent assets:
Commodity contracts:
Electricity32 44 
Natural gas16 30 
Total noncurrent derivative assets (1)
48 74 
Total derivative assets (2)
$161 $387 
Current liabilities:
Commodity contracts:
Electricity$69 $93 
Natural gas31 25 
Total current derivative liabilities100 118 
Noncurrent liabilities:
Commodity contracts:
Electricity44 53 
Natural gas26 22 
Total noncurrent derivative liabilities70 75 
Total derivative liabilities (2)
$170 $193 
(1) Total current derivative assets are included in Other current assets, and Total noncurrent derivative assets are included in Other noncurrent assets on the condensed consolidated balance sheets.
(2) As of March 31, 2023 and December 31, 2022, no derivative assets or liabilities were designated as hedging instruments.

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 at various dates through 2035, were as follows (in millions):
March 31, 2023December 31, 2022
Commodity contracts:
Electricity4 MWhs6 MWhs
Natural gas208 Decatherms211 Decatherms
Foreign currency$8 Canadian$10 Canadian
PGE has elected to report positive and negative exposures resulting from derivative instruments pursuant to agreements that meet the definition of a master netting arrangement gross on the condensed consolidated balance sheets. In the case of default on, or termination of, any contract under the master netting arrangements, such agreements provide for the net settlement of all related contractual obligations with a given 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. As of March 31, 2023, gross amounts included as Price risk management liabilities subject to master netting agreements were $7 million, entirely for natural gas, for which PGE has posted no collateral. As of
23

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
December 31, 2022, gross amounts included as Price risk management liabilities subject to master netting agreements were $5 million, entirely for natural gas, for which PGE posted no collateral.

Net realized and unrealized losses (gains) on derivative transactions not designated as hedging instruments are classified in Revenues, net or Purchased power and fuel, as applicable, in the condensed consolidated statements of income and comprehensive income and were as follows (in millions):
Three Months Ended March 31,
20232022
Commodity contracts:
Electricity$(35)$(40)
Natural Gas132 (211)
Foreign currency exchange  
Net unrealized and certain net realized losses/(gains) presented in the table above are offset within the condensed consolidated statements of income and comprehensive income by the effects of regulatory accounting. Of the net amounts recognized in Net income for the three-month periods ended March 31, 2023 and 2022, net losses of $206 million and net gains of $198 million, respectively, have been offset.

Assuming no changes in market prices and interest rates, the following table indicates the year in which the net unrealized loss/(gain) recorded as of March 31, 2023 related to PGE’s derivative activities would become realized as a result of the settlement of the underlying derivative instrument (in millions):
20232024202520262027ThereafterTotal
Commodity contracts:
Electricity$19 $12 $19 $(4)$(2)$(15)$29 
Natural gas(18)(2)(4)4   (20)
Net unrealized loss/(gain)$1 $10 $15 $ $(2)$(15)$9 
PGE’s secured and unsecured debt is currently rated at investment grade by Moody’s Investors Service (Moody’s) and S&P Global Ratings (S&P). Should Moody’s or S&P reduce their rating on the Company’s unsecured debt to below investment grade, PGE 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 derivative instruments with credit-risk-related contingent features that were in a liability position as of March 31, 2023 was $153 million, for which PGE has posted $16 million in collateral, consisting entirely of letters of credit. If the credit-risk-related contingent features underlying these agreements were triggered at March 31, 2023, the cash requirement to either post as collateral or settle the instruments immediately would have been $106 million. As of March 31, 2023, PGE had $14 million cash collateral posted for derivative instruments with no credit-risk-related contingent features. Cash collateral for derivative instruments is classified as Margin deposits included in Other current assets on the Company’s condensed consolidated balance sheets.

As of March 31, 2023, PGE received from counterparties $8 million in collateral, consisting entirely of letters of credit. Increases in margin deposits received from wholesale counterparties is primarily due to the increase in PGE’s natural gas derivative asset positions. The obligation to return cash collateral held for derivative instruments is included in Accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets.

24

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
PGE is exposed to credit risk in its commodity price risk management activities related to potential nonperformance by counterparties. Credit risk may be concentrated to the extent PGE’s counterparties have similar economic, industry or other characteristics and due to direct or indirect relationships among the counterparties. The Company manages the risk of counterparty default according to its credit policies by performing financial credit reviews, setting limits and monitoring exposures, and requiring collateral (in the form of cash, letters of credit, and guarantees) when needed. PGE also uses standardized enabling agreements and, in certain cases, master netting agreements, which allow for the netting of positive and negative exposures under multiple agreements with counterparties.
See Note 4, Fair Value of Financial Instruments, for additional information concerning the determination of fair value for the Company’s Assets and Liabilities from price risk management activities.

NOTE 6: EARNINGS PER SHARE

Basic earnings per share are computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share are 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. Potential common shares consist of: i) employee stock purchase plan shares; ii) contingently issuable time-based and performance-based restricted stock units, along with associated dividend equivalent rights; and iii) shares issuable pursuant to the Equity Forward Sale Agreement (EFSA). See Note 7, Shareholders’ 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 have been met.

For the three months ended March 31, 2023, unvested performance-based restricted stock units and related dividend equivalent rights of 413 thousand shares were excluded from the dilutive calculation because the performance goals had not been met, with 385 thousand shares excluded for the three months ended March 31, 2022.

Net income is the same for both the basic and diluted earnings per share computations. The denominators of the basic and diluted earnings per share computations are as follows (in thousands):
Three Months Ended March 31,
20232022
Weighted-average common shares outstanding—basic91,840 89,396 
Dilutive effect of potential common shares731 131 
Weighted-average common shares outstanding—diluted92,571 89,527 

25

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
NOTE 7: SHAREHOLDERS’ EQUITY

The activity in equity during the three-month periods ended March 31, 2023 and 2022 was as follows (dollars in millions, except per share amounts):
Common StockAccumulated
Other
Comprehensive
Loss
Retained
Earnings
SharesAmountTotal
Balances as of December 31, 202289,283,353 $1,249 $(4)$1,534 $2,779 
Issuances of shares pursuant to equity-based plans159,603  — —  
Issuances of shares pursuant to equity forward sales agreement7,178,016 300 — — 300 
Stock-based compensation(1)— — (1)
Dividends declared ($0.4525 per share)
—   (40)(40)
Net income— — — 74 74 
Balances as of March 31, 202396,620,972 $1,548 $(4)$1,568 $3,112