Portland General Electric Stock

Portland General Electric Company (PGE) operates as a vertically-integrated electric utility.

The company is engaged in the generation, wholesale purchase and sale, transmission, distribution, and retail sale of electricity to customers in the state of Oregon (State). The company operates as a cost-based, regulated electric utility. The company participates in the wholesale market through the purchase and sale of electricity and natural gas in an effort to obtain reasonably-priced power to serve its retail customers, manage risk, and administer its long-term wholesale contracts. PGE is committed to developing products and service offerings for the benefit of retail and wholesale customers. As of December 31, 2023, served a total of 934 thousand retail customers.

Customers and Revenues

PGE generates revenue primarily through the sale and delivery of electricity to retail customers located exclusively in Oregon. In addition, the company distributes power to Direct Access customers that choose to purchase their energy from an Electricity Service Supplier (ESS). Although the company includes such customers in its customer counts, and energy delivered to such commercial and industrial customers in its total retail energy deliveries, retail revenues include only delivery charges and applicable transition adjustments for these Direct Access customers, as the customers purchase energy directly from the ESSs. The company conducts retail electric operations within its State-approved service territory.

Retail Revenues

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), mobile homes, and small farms.

Commercial customers consist of non-residential customers who accept energy deliveries at voltages equivalent to those delivered to residential customers. This customer class includes 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.

Wholesale Revenues

PGE participates in the wholesale electricity marketplace in order to balance its supply of power to meet the needs of, and obtain reasonably-priced power for, its retail customers, manage risk, and administer its long-term wholesale contracts. Interconnected transmission systems in the western United States serve utilities with diverse load requirements and allow the company to purchase and sell electricity, largely through bi-lateral agreements, within the region to serve retail demand. The company also participates in the California Independent System Operator’s western Energy Imbalance Market (western EIM), which allows for load balancing with other western EIM participants in five-minute intervals.

Other Operating Revenues

Other operating revenues primarily consist 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, pole attachment rentals, and other electric services provided to customers.

Seasonality

Demand for electricity by PGE’s residential and, to a lesser extent, commercial and industrial customers is affected by seasonal weather conditions.

In August 2023, PGE set a new all-time high net system load peak of 4,498 megawatts (MW), surpassing the previous all-time peak that occurred in June 2021. In December 2022, the company recorded its current winter peak of 4,113 MW.

The company tracks and evaluates both load growth and peak load requirements for purposes of long-term load forecasting, integrated resource planning, and preparing general rate case assumptions. Although the average winter loads continue to exceed average summer loads, the company has seen its highest annual peak loads during the summer months.

Power Supply

PGE utilizes its generating resources, as well as wholesale power purchases from third parties to meet the needs of its retail customers.

Generation

PGE’s generating resources consist of six thermal plants (natural gas- and coal-fired), three wind farms, and seven hydroelectric facilities. The portion of PGE’s retail load requirements generated by its plants varies from year to year and is determined by various factors, including planned and unplanned outages, availability and price of coal and natural gas, precipitation and snow-pack levels, the market price of electricity, and wind variability.

Thermal: The company has five natural gas-fired generating facilities: PW1, PW2, Beaver, Coyote Springs Unit 1 (Coyote Springs), and Carty Generating Station (Carty).

The company also has a 20% ownership interest in the Colstrip Units 3 and 4 coal-fired generating plant (Colstrip), which is located in Colstrip, Montana and operated by a third party.

Wind

PGE owns and operates two wind farms, Biglow Canyon Wind Farm (Biglow Canyon) and Tucannon River Wind Farm (Tucannon River). Biglow Canyon, located in Sherman County, Oregon, consists of 217 turbines with a total nameplate capacity of 450 MW. Tucannon River, located in southeastern Washington, consists of 116 turbines with a total nameplate capacity of 267 MW.

During 2020, the wind component of the Wheatridge Renewable Energy Facility (Wheatridge), located in Morrow County, Oregon, was placed into service. Although PGE does not operate Wheatridge, it owns 40 turbines with a total nameplate capacity of 100 MW and purchases the output of the remaining turbines, with a nameplate capacity of 200 MW through a power purchase agreement.

PGE and NextEra Energy Resources, LLC, a subsidiary of NextEra Energy, Inc., have entered into agreements to construct a 311 MW wind energy facility, which will be part of the larger Clearwater Wind Development in Eastern Montana (Clearwater). Substantial completion of the project was achieved on January 5, 2024. PGE will own 208 MW of production capacity in these agreements.

Hydro

The company’s FERC-licensed hydroelectric projects consist of Pelton/Round Butte on the Deschutes River near Madras, Oregon, four plants on the Clackamas River, and one on the Willamette River.

As of December 31, 2021, PGE had a 66.67% ownership interest in the 455 MW Pelton/Round Butte hydroelectric project, with the remaining interest held by the Confederated Tribes of the Warm Springs Reservation of Oregon (CTWS). A 50-year joint license for the project, which is operated by PGE, was issued by the FERC in 2005. The CTWS had an option to purchase an additional undivided 16.66% ownership interest in Pelton/Round Butte in 2021, and closed on the purchase of this incremental undivided ownership interest on January 1, 2022. As a result, PGE’s ownership interest in the project is 50.01%. The CTWS has a second option in 2036 to purchase an undivided 0.02% interest in Pelton/Round Butte. If the second option is exercised, the CTWS’s ownership percentage would exceed 50%. PGE purchases 100% of the CTWS’s share of the project output.

Fuel Supply—PGE contracts for natural gas and coal supplies required to fuel the company’s thermal generating plants, with certain plants also able to operate on fuel oil, if needed. In addition, the company utilizes financial instruments, such as forward, future, swap, and option contracts to manage its exposure to volatility in natural gas prices.

Natural Gas

PGE owns 79.5%, and is the operator of record, of the KB Pipeline, which directly connects PW1, PW2, and Beaver to the Northwest Pipeline, an interstate natural gas pipeline operating between British Columbia and New Mexico by Williams. PGE transports natural gas on the KB Pipeline for its own use under a firm transportation service agreement, with capacity offered to others on an interruptible basis to the extent not utilized by the company.

PGE has access to 111,805 Dth per day of firm natural gas transportation capacity on the Northwest Pipeline to serve the three plants.

PGE has access to 4.1 billion cubic feet of natural gas storage in Mist, Oregon from which it can draw when economic factors favor its use or in the event that natural gas supplies are interrupted. The storage facility, owned and operated by NW Natural, may be utilized to provide fuel to PW1, PW2, and Beaver.

To serve Coyote Springs and Carty, PGE has access to 119,500 Dth per day of firm natural gas transportation capacity on three pipeline systems accessing the gas market in Alberta, Canada.

Coal

The Colstrip co-owners obtain coal to fuel the plant via conveyor belt from a mine that lies adjacent to the facility and is the sole source of coal supply for the plant. The coal supply contract with the owner of the mine is scheduled to expire at the end of 2025. The terms of the contract and the quality of coal are expected to allow the facility to operate within required emissions limits.

Purchased Power

PGE supplements its own generation with power purchased in the wholesale market to meet its retail load requirements, manage risk, and administer its long-term wholesale contracts.

The company’s major power purchase contracts consist of the following (also see the preceding table which summarizes the average resource capabilities related to these contracts):

Hydro—During 2023, the company had the following agreements:

Public Utility Districts—PGE has long-term power purchase contracts with certain public utility districts (PUDs) in the state of Washington for a portion of the output of two hydroelectric projects on the mid-Columbia River. Although the projects provide PGE a total of 331 MW of capacity through contracts as shown below, actual energy received is dependent upon river flows and capacity amounts may decline over time: 100 MW of capacity with Douglas County PUD that expires in 2025; 68 MW of capacity with Douglas County PUD that expires in 2028; and 163 MW of capacity with Grant County PUD that expires in 2052.

PGE has entered into two additional agreements, both beginning January 1, 2024, such as a 2-year contract in which PGE will purchase 10% of the project output and sell 25 MW back to the PUD in order to meet their load requirements; and a 3-year contract in which PGE will purchase a 20% share of the project output and sell varying amounts of energy in accordance with contract terms back to the PUD in order to meet their load requirements.

CTWS—PGE has a long-term agreement under which the company purchases output from the CTWS’ interest in the Pelton/Round Butte hydroelectric project. Although the agreement provides approximately 224 MW of net capacity, actual energy received is dependent upon river flows. The term of the agreement coincides with the term of the FERC license for this project, which expires in 2055. Under a separate PPA executed in 2014, PGE pays fixed capacity and energy charges to the CTWS for 100% of its share of the project through 2024. The CTWS exercised their option to purchase an additional undivided 16.66% ownership interest in Pelton/Round Butte effective January 1, 2022. As a result of the sale, capacity from company-owned generation decreased by approximately 76 MW, and capacity from purchased power increased by a corresponding amount. Under the PPA, PGE purchases 100% of the CTWS’s additional share of the project and payments under the PPA increase proportionately. PGE and the CTWS executed an additional 16-year PPA which begins on January 1, 2025, that effectively extends the term from 2024 to 2040 and increases the capacity payments in the extension period.

Other—The remaining capacity is primarily consisted of two additional contracts that provide for the purchase of power generated from hydroelectric projects with capacity of 236 MW in total: 200 MW of capacity with Bonneville Power Administration (BPA) that expires in February 2024; and 36 MW of capacity with Portland Hydro that expires in 2032.

PURPA qualifying facilities—PGE is required to purchase power from PURPA qualifying facilities (QFs), as mandated by federal law. QFs are generating facilities that fall within the following two categories: i) qualifying generation facilities with a capacity of 80 MW or less and whose primary energy source is renewable (hydro, wind, solar, biomass, waste, or geothermal); or ii) qualifying cogeneration facilities that sequentially produce electricity and another form of useful thermal energy (e.g., heat and steam) in a way that is more efficient than the separate production of each form of energy. As of December 31, 2023, PGE had contracts with 69 online QFs, providing a total of 315 MW of capacity. As of December 31, 2023, PGE had two contracts with QFs representing 116 MW of capacity that are not yet operational, of which one of the QF PPAs is in default because the QF has failed to complete construction and become operational by the date required by the PPA. The PPAs provide that the QF must cure its default within a period specified under the contract terms. If the QF has failed to cure, PGE is permitted to immediately terminate the QF PPA upon expiration of the cure period. The term of a QF PPA generally ranges from 15 to 23 years.

Dispatchable Standby Generation (DSG)—PGE has a DSG program under which the company can dispatch and monitor customer-owned backup generators when needed to provide NERC-required operating reserves. As of December 31, 2023, there were 79 customer-owned generators with a total DSG nameplate capacity of 131 MW. PGE continues to pursue expansion of the program through ongoing engagement with customers and incorporation of battery energy storage.

Capacity—PGE has one capacity contract representing up to 100 MW of seasonal capacity during the summer and winter peak periods obtained from a natural gas-fired resource, which expires in February 2024.

Wind—PGE has three contracts representing 300 MW of capacity to purchase power generated from renewable wind resources that extend to 2028, 2035, and 2051, respectively. The expected energy from these wind resources will vary from the nameplate capacity due to varying wind conditions. PGE and NextEra Energy Resources, LLC, a subsidiary of NextEra Energy, Inc. have entered into agreements to construct a 311 MW wind energy facility, which will be part of the larger Clearwater Wind Development in Eastern Montana. Substantial completion of the project was achieved on January 5, 2024. PGE will own 208 MW of production capacity in these agreements. Subsidiaries of NextEra Energy Resources, LLC will own the remaining 103 MW of production capacity and will sell their portion of the output to PGE under a 30-year PPA.

Solar—PGE has five contracts representing 219 MW of capacity to purchase power generated from photovoltaic solar projects. Two of these projects extend to 2036 while the other three extend to 2037, 2038, and 2042, respectively. The expected energy from these solar resources will vary from the nameplate capacity due to varying solar conditions. The solar component of Wheatridge supplies the company with 50 MW of capacity. The facility also includes 30 MW related to the battery component which is not reflected in the resource and contracted capacity table above. Subsidiaries of NextEra Energy Resources, LLC own the solar and battery components, and sell their portion of the output to PGE.

Biomass—PGE has one contract to purchase biomass energy that is set to expire in June 2024.

Green Future Impact Program— PGE has three contracts representing 360 MW of capacity to purchase power generated from renewable resources to support the Green Future Impact Program:

A 15-year contract with Avangrid Renewables representing 162 MW from a renewable solar facility in Gilliam County, Oregon that was placed in service in January 2023.

A 25-year contract with Avangrid Renewables representing 138 MW from a renewable solar facility in Wasco County, Oregon that is expected to be placed in service in January 2026.

A 25-year contract with Avangrid Renewables representing 60 MW from a renewable solar facility in Wasco County, Oregon that is expected to be placed in service in January 2026.

Short-term Contracts—These contracts are for delivery periods of one month to one year in length. They are entered into with various counterparties to provide additional firm energy to help meet the company’s load requirements.

PGE also utilizes spot purchases of power in the open market to secure the energy required to serve its retail customers. Such purchases are made under contracts that range in duration from 15 minutes to less than one month. PGE is a market participant in the western EIM, which allows certain of the company’s generating plants to receive automated dispatch signals from the California Independent System Operator (CAISO) for load balancing with other western EIM participants in five-minute intervals.

Future Energy Resource Strategy

PGE’s Integrated Resource Plan (IRP) outlines the company’s plan to meet future customer demand and describes PGE’s future energy supply strategy.

Transmission and Distribution

Transmission systems deliver energy from generating facilities to distribution systems for final delivery to customers. PGE schedules energy deliveries over its transmission system in accordance with FERC requirements and operates one BAA in its service territory. In 2023, PGE delivered approximately 28 million megawatt hours (MWh) through 1,254 circuit miles of transmission lines operating at or above 115 kilovolts (kV).

PGE’s transmission system is part of the Western Interconnection, the regional grid in the western United States. The Western Interconnection includes the interconnected transmission systems of 11 western states, two Canadian provinces and parts of Mexico, and is subject to the reliability rules of the WECC and the NERC. PGE relies on transmission contracts with BPA to transmit a significant amount of the company’s generation to serve its distribution system. PGE’s transmission system, together with contractual rights on other transmission systems, enables the company to integrate and access generation resources to meet its customers’ energy requirements. PGE’s transmission system is managed on a coordinated basis to obtain maximum load-carrying capability and efficiency. PGE has joined the Western Power Pool’s resource adequacy program known as the Western Resource Adequacy Program (WRAP), which is expected to become a binding commitment in 2026.

The company’s wholesale transmission activities are regulated by the FERC and are offered on a non-discriminatory basis, with all potential customers provided equal access to PGE’s transmission system through PGE’s OATT. In accordance with its OATT, PGE offers several transmission services to wholesale customers, including:

Network integration transmission service, a service that integrates generating resources to serve retail loads;

Short- and long-term firm point-to-point transmission service, a service with fixed delivery and receipt points; and

Non-firm point-to-point service, an ‘as available’ service with fixed delivery and receipt points.

Environmental Matters

PGE’s operations, primarily its thermal generating plants, are subject to regulation under the federal Clean Air Act (CAA), which addresses particulate matter, hazardous air pollutants, and GHG emissions in terms of both quantity and rate, among other things.

PGE works continually with state agencies to obtain permits or certificates of compliance needed for its hydroelectric operations under the FERC licenses and continues to monitor and update equipment to meet federal and state standards.

PGE continues to implement fish protection measures at its hydroelectric projects that were prescribed by the U.S. Fish and Wildlife Service and the National Marine Fisheries Service under their authority granted in the ESA and the FPA.

The handling and disposal of hazardous materials from the company facilities is subject to regulation under the federal Resource Conservation and Recovery Act.

PGE is also subject to the Comprehensive Environmental Response Compensation and Liability Act, commonly referred to as Superfund, which provides authority to the EPA to assert joint and several liability for investigation and remediation costs for designated Superfund sites.

PGE is subject to regulation by the United States Department of Energy (USDOE), which, under the Nuclear Waste Policy Act of 1982, is responsible for the permanent storage and disposal of spent nuclear fuel. PGE has contracted with the USDOE for permanent disposal of spent nuclear fuel from Trojan that is stored in the Independent Spent Fuel Storage Installation (ISFSI), an NRC-licensed interim dry storage facility that houses the fuel.

Regulation

Federal Regulation

Several federal agencies, including the Federal Energy Regulatory Commission (FERC), the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), and the Nuclear Regulatory Commission (NRC), have regulatory authority over certain aspects of PGE’s operations and activities.

PGE is a ‘licensee,’ a ‘public utility,’ and a ‘user, owner, and operator of the bulk power system,’ as those terms are defined in the Federal Power Act (FPA). As such, the company is subject to regulation by the FERC in matters related to wholesale energy activities, transmission services, reliability and cybersecurity standards, natural gas pipelines, hydroelectric projects, accounting policies and practices, short-term debt issuances, and certain other matters.

Wholesale Energy—PGE has authority under its FERC Market-Based Rates tariff to charge market-based rates for wholesale energy sales in all markets in which it sells electricity except in its own Balancing Authority Area (BAA).

Transmission—PGE offers wholesale electricity transmission service pursuant to its Open Access Transmission Tariff (OATT), which contains rates, terms, and conditions of service, as filed with, and approved by, the FERC.

Natural Gas Pipelines—The FERC has authority in matters related to the construction, operation, extension, enlargement, safety, and abandonment of jurisdictional interstate natural gas pipeline facilities, as well as transportation rates and accounting for interstate natural gas commerce. PGE is subject to such authority as the company has a 79.5% ownership interest in the Kelso-Beaver (KB) Pipeline, a 17-mile, 20-inch diameter, interstate pipeline that provides natural gas to the company’s three natural gas-fired generating plants located near Clatskanie, Oregon: Port Westward Unit 1 (PW1), Port Westward Unit 2 (PW2), and Beaver; the North Mist storage facility, which is owned and operated by a local natural gas distribution company; and one additional delivery point that serves a local manufacturing concern. As the operator of record of the KB Pipeline, PGE is subject to the requirements and regulations enacted under the Pipeline Safety Laws administered by the PHMSA, which include safety and operator qualification standards in addition to public awareness requirements.

Hydroelectric Licensing—As required under the FPA, PGE holds FERC licenses for all company-owned and operated hydroelectric generating plants.

State Regulation

PGE is subject to the jurisdiction of the OPUC, which reviews and approves the company’s retail prices and reviews its generation and transmission resource acquisition plans, pursuant to a biennial integrated resource planning process.

Properties

Generating Facilities

PGE’s hydroelectric projects are operated pursuant to FERC (Federal Energy Regulatory Commission) licenses issued under the FPA (Federal Power Act). The licenses for the hydroelectric projects on the three different rivers expire as follows: Clackamas River, 2055; Willamette River, 2035; and Deschutes River, 2055.

PGE and NextEra Energy Resources, LLC, a subsidiary of NextEra Energy, Inc. have entered into agreements to construct a 311 MW wind energy facility, which will be part of the larger Clearwater Wind development in Eastern Montana. Substantial completion of the project was achieved on January 5, 2024. PGE will own 208 MW of production capacity in these agreements.

Transmission and Distribution

PGE owns or has contractual rights associated with transmission lines that deliver electricity from its generation facilities to its distribution system in its service territory and also to the Western Interconnection. As of December 31, 2023, PGE-owned electric transmission system consisted of 1,254 circuit miles as follows: 287 circuit miles of 500 kV line; 413 circuit miles of 230 kV line; and 554 miles of 115 kV line. The company also has 28,868 circuit miles of distribution lines that deliver electricity to its customers. PGE also has an ownership interest in, and capacity on, the following:

14% of the 2,260 MW transmission facilities between the Colstrip switchyard to the Broadview switchyard, near Billings, Montana, and 16% of the 1,930 MW transmission facilities between the Broadview switchyard and the interconnection point with BPA’s transmission system near Townsend, Montana; and

20% of the Northwest AC Intertie, a 4,800 MW transmission facility between the John Day Substation near the Columbia River in northern Oregon, and Malin, Oregon, near the California border. The Northwest AC Intertie is used primarily for the transmission of interstate purchases and sales of electricity among utilities, including PGE.

In addition, the company has contractual rights to a total of 3,970 MW of BPA transmission systems.

Non-utility Real Estate

PGE owns, through a wholly owned subsidiary, its corporate headquarters building located in Portland, Oregon.

PGE also owns unregulated properties that are leased to third parties and located adjacent to PGE’s T.W. Sullivan hydro generating facility. PGE has recorded a non-utility ARO related to this site.

History

Portland General Electric Company was founded in 1889. The company was incorporated in 1930.