PORTLAND GENERAL ELECTRIC CO /OR/

Previous wording

Changes in the global and local climate could result in more intense, frequent, and extreme weather events such as ice and snowstorms, high wind, flooding, changes in regional rainfall and snowpack levels, high heat events, drought conditions, and increased risk of wildfires. These events may disrupt energy delivery, cause power outages, or impair the use of, and damage, the Company’s facilities and transmission and distribution system. Such events could result in a reduction in revenue and an increase in additional costs to restore service, repair facilities, purchase power and fuel to serve PGE load requirements, and procure insurance related to such impacts. The increase in additional costs could also have an adverse effect on cash flow and liquidity. In response to more intense, frequent, and severe weather events, PGE may need to make additional investments in generation, transmission, and distribution assets to enhance reliability and resiliency. Weather-related events could also cause system constraints or disrupt transmission flows, resulting in decreased reliability for customers. Severe weather may also require increased PGE personnel availability, which could result in increased operating expenses as well as increased safety risk. In certain instances, PGE relies on mutual aid support to assist in the recovery from severe weather. Lack of availability of mutual aid support could result in increased time to restore services to customers as well as increased costs and decreased customer satisfaction.

Current wording

Changes in the global and local climate could result in more intense, frequent, and extreme weather events such as ice and snowstorms, high wind, flooding, changes in regional rainfall and snowpack levels, high heat events, drought conditions, declining tree health, and increased risk of wildfires. These events may disrupt energy delivery, cause power outages, or impair the use of, and damage, the Company’s facilities and transmission and distribution system. Such events could result in a reduction in revenue and an increase in additional costs to restore service, repair facilities, purchase power and fuel to serve PGE load requirements, and procure insurance related to such impacts. The increase in additional costs could also have an adverse effect on cash flow and liquidity. In response to more intense, frequent, and severe weather events and increasing peak loads, PGE may need to make additional investments in generation, transmission, distribution, and energy storage assets to enhance reliability and resiliency. Weather-related events could also cause system constraints or disrupt transmission flows, resulting in decreased reliability for customers. Severe weather may also require increased PGE personnel availability, which could result in increased operating expenses as well as increased safety risk. In certain instances, PGE relies on mutual aid support to assist in the recovery from severe weather. Lack of availability of mutual aid support could result in increased time to restore services to customers as well as increased costs and decreased customer satisfaction.

Previous wording

Wildfires of greater size and prevalence, such as those of a magnitude seen in Oregon in recent years, could negatively affect public safety, the resilience of the electric grid, customers’ demand for power and PGE’s ability and cost to procure adequate power and fuel supplies to provide reliable service to its customers, PGE’s ability to access the wholesale energy market, PGE’s ability to operate its generating facilities and transmission and distribution systems, PGE’s costs to maintain, repair, and replace such facilities and systems, and PGE’s ability to recover these additional costs. While PGE has wildfire mitigation programs in place, PGE may not be able to effectively implement its wildfire mitigation initiatives or wildfire mitigation initiatives may not be successful or effective in preventing or reducing wildfire-related losses. PGE may be unable to effectively implement a PSPS and de-energize its system in the event of heightened wildfire risk, or the PSPS may not be able to prevent a wildfire, which could lead to potential liability if energized systems are determined to be the cause of wildfires that result in harm.

Current wording

Wildfires of greater size and prevalence, such as those of a magnitude seen in the West Coast in recent years, could negatively affect public safety, the resilience of the electric grid, customers’ demand for power and PGE’s ability and cost to procure adequate power and fuel supplies to provide reliable service to its customers, PGE’s ability to access the wholesale energy market, PGE’s ability to operate its generating facilities and transmission and distribution systems, PGE’s costs to maintain, repair, and replace such facilities and systems, and PGE’s ability to recover these additional costs. While PGE has wildfire mitigation programs in place, PGE may not be able to effectively implement its wildfire mitigation initiatives or wildfire mitigation initiatives may not be successful or effective in preventing or reducing wildfire-related losses. PGE may be unable to effectively implement a PSPS and de-energize its system in the event of heightened wildfire risk, or the PSPS may not be able to prevent a wildfire, which could lead to potential liability if energized systems are determined to be the cause of wildfires that result in harm.

Previous wording

Capital investment and operating expenses related to this risk may not be recoverable through increases in customer prices or insurance proceeds.

Current wording

Capital investment and operating expenses related to this risk may not be recoverable through customer prices or insurance proceeds. PGE’s insurance coverage may not fully cover all the hazards and liabilities to which PGE is subject. Certain liabilities resulting from wildfires and other risks, may be excluded from PGE’s insurance coverage. Insurance costs in the utility industry continue to rise, and the Company may be unable to obtain insurance on acceptable terms or at all. Rising insurance costs and any losses for which PGE is not adequately insured against could have a material, adverse effect on our results of operations and financial position.

Previous wording

In the normal course of business, PGE collects, processes, and retains sensitive and confidential customer and employee information, as well as proprietary business information, and operates systems that directly impact the availability and transmission of electric power in its service territory. PGE owns and operates generation, transmission, distribution, and other facilities that depend on information technology systems. The Company is exposed to, and may be adversely affected by, interruptions to its computer and information technology systems and sophisticated cyber-attacks. As with most companies, PGE has experienced attempts to breach the Company’s systems and other similar incidents. A cyber-attack may cause large-scale disruption to the U.S. bulk power system or PGE operations and could target the Company’s computer systems, software, or networks to achieve such disruption. Generation, transmission, and distribution facilities, in general, have been identified as potential targets of physical or cyber-attacks. Employees could also be potential targets of both physical or cyber attacks. In addition, physical attacks on transmission and distribution facilities have occurred in the United States. Despite the security measures in place, the Company’s systems and assets, and those of third-party service providers, could be vulnerable to cybersecurity attacks, data security breaches, physical attacks and security breaches, acts of terrorism, or other similar events that could disrupt operations, cause damage to the Company’s generation, transmission, or distribution facilities, impact reliability of the transmission and distribution system, information technology systems, inhibit the capability of equipment or systems to function as designed or expected, prevent service to customers or collection of revenues, or result in the release of sensitive or confidential customer, employee, or Company information. Such events could cause a shutdown of service, expose PGE to liability, or cause reputational damage. In addition, the Company may be required to expend significant capital and other resources to protect against security breaches or to alleviate problems caused by security breaches. A breach of certain business systems could impact PGE’s ability to initiate, authorize, process, record, and report financial information. The cost of repairing damage to PGE’s facilities and infrastructure caused by acts of terrorism, and the loss of revenue if such events prevent PGE from providing utility service to its customers, could adversely impact its financial condition and results of operations. PGE maintains insurance coverage against some, but not all, potential losses resulting from these risks. However, insurance is limited in scope and subject to exceptions, and may not be adequate to protect the Company against liability in all cases. Insurers may dispute or be unable to perform their obligations to the Company, or may not be available at rates th…

Excerpt shortened here; the source contains the full paragraph.

Current wording

In the normal course of business, PGE collects, processes, and retains sensitive and confidential customer and employee information, as well as proprietary business information, and operates systems that directly impact the availability and transmission of electric power in its service territory. PGE owns and operates generation, transmission, distribution, and other facilities that depend on information technology systems. The Company is exposed to, and may be adversely affected by, interruptions to its computer and information technology systems and sophisticated cyber-attacks. As with most companies, PGE has experienced attempts to breach the Company’s systems, customer accounts and other similar incidents. A cyber-attack may cause large-scale disruption to the U.S. bulk power system or PGE operations and could target the Company’s computer systems, software, or networks to achieve such disruption. Generation, transmission, and distribution facilities, in general, have been identified as potential targets of physical or cyber-attacks. Employees could also be potential targets of both physical or cyber attacks. In addition, physical attacks on transmission and distribution facilities have occurred in the United States. Despite the security measures in place, the Company’s systems and assets, and those of third-party service providers, could be vulnerable to cybersecurity attacks, data security breaches, physical attacks and security breaches, acts of terrorism, civil unrest or other similar events that could disrupt operations, cause damage to the Company’s generation, transmission, or distribution facilities, impact reliability of the transmission and distribution systems or information technology systems, inhibit the capability of equipment or systems to function as designed or expected, prevent service to customers or collection of revenues, or result in the release of sensitive or confidential customer, employee, or Company information. Such events could cause a shutdown of service, expose PGE to liability, or cause reputational damage. In addition, the Company may be required to expend significant capital and other resources to protect against security breaches or to alleviate problems caused by security breaches. A breach of certain business systems could impact PGE’s ability to initiate, authorize, process, record, and report financial information. The cost of repairing damage to PGE’s facilities and infrastructure caused by acts of terrorism, and the loss of revenue if such events prevent PGE from providing utility service to its customers, could adversely impact its financial condition and results of operations. PGE maintains insurance coverage against some, but not all, potential losses resulting from these risks. However, insurance is limited in scope and subject to exceptions, and may not be adequate to protect the Company against liability in all cases. Insurers may dispute or be unable to perform their obligations to the Company, …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

PGE has exposure to natural and human-caused disasters and other risks, including, but not limited to, a pandemic, earthquake, accidents, equipment failure, acts of terrorism, acts of vandalism, computer system outages, and other events. Such events, which may be amplified by the fact that PGE’s business activities are concentrated in one region, could disrupt PGE operations, damage PGE facilities and systems, interrupt the delivery of electricity, increase repair and service restoration expenses, reduce revenues, cause the release of harmful materials, cause fires or flooding, and subject the Company to liability. Such events, if repeated or prolonged, can also affect customer satisfaction and the level of regulatory oversight.

Current wording

PGE has exposure to natural and human-caused disasters and other risks, including, but not limited to, a pandemic, earthquake, accidents, equipment failure, acts of terrorism, civil unrest, acts of vandalism, computer system outages, and other events. Such events, which may be amplified by the fact that PGE’s business activities are concentrated in one region, could disrupt PGE operations, damage PGE facilities and systems, interrupt the delivery of electricity, increase repair and service restoration expenses, reduce revenues, cause the release of harmful materials, cause fires or flooding, and subject the Company to liability. Such events, if repeated or prolonged, can also affect customer satisfaction and the level of regulatory oversight.

Previous wording

The operation of electric generation, transmission, battery storage, and distribution infrastructure involves inherent risks, including breakdown or failure of equipment, motor vehicle accidents, fires involving the utility’s equipment, dam failure at company-owned hydroelectric facilities, public and worker safety, human contact with energized equipment, and operator error. A portion of the Company’s operations relies on Company- or third party-owned natural gas transmission and distribution infrastructure and involves inherent risks, such as leaks, explosions, mechanical problems, and worker and public safety.

Current wording

The operation of electric generation, transmission, battery storage, and distribution infrastructure involves inherent risks, including, but not limited to, breakdown or failure of equipment, motor vehicle accidents, fires involving the utility’s equipment, dam failure at company-owned hydroelectric facilities, public and worker safety, human contact with energized equipment, and operator error. A portion of the Company’s operations relies on Company- or third party-owned natural gas transmission and distribution infrastructure and involves inherent risks, such as leaks, explosions, mechanical problems, and worker and public safety.

Previous wording

Long-term increases in both the number of customers and demand for energy will require continued expansion and upgrade of PGE’s generation, transmission, and distribution systems. Construction of new facilities and modifications or replacements of existing facilities could be affected by factors such as unanticipated delays and cost increases, including supply chain disruption and cost inflation, availability of a skilled workforce, increases in interest rates, failure of counterparties to perform under agreements, ability to build or secure transmission, and the failure to obtain, or delay in obtaining, necessary permits from state or federal agencies or tribal entities. Supply chain disruption could be exacerbated by government tariffs as well as inflation. Delays and cost increases could result in failure to complete the projects or the abandonment of capital projects, which could eliminate or impair PGE’s ability to recover related costs in the rate determination process. In addition, failure to complete construction projects according to specifications could result in reduced plant efficiency, equipment failure, and plant performance that falls below expected levels, which could increase operating costs.

Current wording

Long-term increases in both the number of customers and demand for energy, as well as the natural aging of existing infrastructure, will require continued expansion and upgrade of PGE’s generation, transmission, and distribution systems. Construction of new facilities and modifications or replacements of existing facilities could be affected by factors such as unanticipated delays and cost increases, tariffs impacting the cost and availability of necessary equipment, supply chain disruption and cost inflation, community opposition, availability of a skilled workforce, increases in interest rates, failure of counterparties to perform under agreements, ability to build or secure transmission, and the failure to obtain, or delay in obtaining, necessary permits from state or federal agencies or tribal entities. Supply chain disruption could be exacerbated by government tariffs as well as inflation. Delays and cost increases could result in failure to complete the projects or the abandonment of capital projects, which could eliminate or impair PGE’s ability to recover related costs in the rate determination process. In addition, failure to complete construction projects according to specifications could result in reduced plant efficiency, equipment failure, and plant performance that falls below expected levels, which could increase operating costs.

Previous wording

The OPUC regulates the prices that PGE charges, which is a major factor in determining the Company’s operating income, financial position, liquidity, and credit ratings. As a general matter, PGE relies on customer prices to recover most of the costs incurred in connection with the operation of its business, including, among other things, costs related to capital projects (such as the construction of new facilities or the modification of existing facilities), the costs of compliance with legislative and regulatory requirements (including environmental laws), and the costs of damage from storms and other natural disasters. Prices paid by customers are impacted by commodity prices, costs and capital investments, particularly investments made to meet increased customer demand and meet the state’s clean energy goals. Regulators may deny recovery of costs it considers imprudently incurred. Although the OPUC is required to establish customer prices that are fair, just, and reasonable, it has significant discretion in the interpretation of this standard. The Company’s cost recovery proceedings may not authorize sufficient revenues, or the actual costs could exceed its authorized or forecasted costs. PGE attempts to manage its costs at levels consistent with OPUC-approved prices. However, if the Company is unable to do so, or if such cost management results in increased operational risk, the Company’s financial and operating results could be adversely affected.

Current wording

The OPUC regulates the prices that PGE charges, which is a major factor in determining the Company’s operating income, financial position, liquidity, and credit ratings. As a general matter, PGE relies on customer prices to recover most of the costs incurred in connection with the operation of its business, including, among other things, costs related to capital projects (such as the construction of new facilities or the modification of existing facilities), the costs of compliance with legislative and regulatory requirements (including environmental laws), and the costs of damage from storms and other natural disasters, including the costs to implement wildfire mitigation plans. Prices paid by customers are impacted by commodity prices, costs and capital investments, particularly investments made to meet increased customer demand and meet the state’s clean energy goals. Regulators may deny recovery of costs considered imprudently incurred. Regulators have delayed recovery of prudently incurred costs due to affordability concerns. Although the OPUC is required to establish customer prices that are fair, just, and reasonable, it has significant discretion in the interpretation of this standard. The Company’s cost recovery proceedings may not authorize sufficient revenues, or the actual costs could exceed its authorized or forecasted costs. Customer dissatisfaction with prices and national and statewide affordability concerns may result in decreased or delayed recovery of prudently incurred costs. PGE attempts to manage its costs at levels consistent with OPUC-approved prices. However, if the Company is unable to do so, or if such cost management results in increased operational risk, the Company’s financial and operating results could be adversely affected.

Previous wording

In the normal course of its business, PGE is subject to regulatory proceedings, lawsuits, claims, and other matters, which could result in adverse judgments, settlements, fines, penalties, injunctions, or other relief. Such matters include governmental policies, legislative action, and regulatory audits, investigations, and actions, including those of the FERC and OPUC with respect to allowed rates of return, financings, electricity pricing and price structures, acquisition and disposal of facilities and other assets, construction and operation of plant facilities, transmission of electricity, recovery of power costs, operating expenses, deferrals, timely recovery of costs and capital investments, and current or prospective wholesale and retail competition. These matters are subject to many uncertainties and involve many different parties with sometimes conflicting interests, which can increase regulatory scrutiny. Therefore, management cannot predict with certainty the ultimate outcome of any proceeding. The final resolution of certain matters in which PGE is involved could result in disallowance of capital and operating expenses previously deferred, increased litigation, changes to established regulatory procedures or could require that the Company incur expenditures over an extended period and in a range of amounts that could have an adverse effect on its cash flows and results of operations. Similarly, the terms of resolution could require the Company to change its business practices and procedures, which could also have an adverse effect on its cash flows, financial position, or results of operations. New laws, changes in legal precedent, or novel interpretations of existing regulations could also result in adverse effects on cash flows and results of operations.

Current wording

In the normal course of its business, PGE is subject to regulatory proceedings, lawsuits, claims, and other matters, which could result in adverse judgments, settlements, fines, penalties, injunctions, or other relief. Such matters include governmental policies, legislative action, and regulatory audits, investigations, and actions, including those of the FERC and OPUC with respect to allowed rates of return, financings, corporate structure, electricity pricing and price structures, acquisition and disposal of facilities and other assets, construction and operation of plant facilities, transmission of electricity, recovery of power costs, operating expenses, deferrals, timely recovery of costs and capital investments, and current or prospective wholesale and retail competition. These matters are subject to many uncertainties and involve many different parties with sometimes conflicting interests, which can increase regulatory scrutiny. Therefore, management cannot predict with certainty the ultimate outcome of any proceeding. The final resolution of certain matters in which PGE is involved could result in disallowance of capital and operating expenses previously deferred, increased litigation, changes to established regulatory procedures or could require that the Company incur expenditures over an extended period and in a range of amounts that could have an adverse effect on its cash flows and results of operations. Similarly, the terms of resolution could require the Company to change its business practices and procedures, which could also have an adverse effect on its cash flows, financial position, or results of operations. New laws, changes in legal precedent, or novel interpretations of existing regulations could also result in adverse effects on cash flows and results of operations.

Previous wording

PGE is subject to various environmental laws, regulations, and other standards including federal, state, and local environmental statutes, rules and regulations relating to air quality, water quality and usage, soil quality, GHG emissions such as carbon dioxide, waste management, hazardous wastes, fish, avian and other wildlife mortality and habitat protection, historical artifact preservation, natural resources, health, and safety. Compliance with such laws and regulations could, among other things, prevent or delay the development of power generation and transmission and distribution facilities, restrict output of facilities, limit the use of fuels required for power generation, require additional pollution control equipment, require investment in non-emitting resources, force early retirement of assets, and otherwise increase costs and increase capital expenditures.

Current wording

PGE is subject to various environmental laws, regulations, and other standards including federal, state, and local environmental statutes, rules and regulations relating to air quality, water quality and usage, soil quality, permitting, GHG emissions such as carbon dioxide, waste management, hazardous wastes, fish, avian and other wildlife mortality and habitat protection, historical artifact preservation, natural resources, health, and safety. Compliance with such laws and regulations could, among other things, prevent or delay the development of power generation and transmission and distribution facilities, restrict output of facilities, limit the use of fuels required for power generation, require additional pollution control equipment, require investment in non-emitting resources, force early retirement of assets, and otherwise increase costs and increase capital expenditures.

Previous wording

Compliance with any new or additional GHG emissions reduction requirements could require PGE to incur significant expenditures, including those related to carbon capture and sequestration technology, purchase of emission allowances and offsets, fuel switching, and theretirement or replacement of high-emitting generation facilities with non-emitting facilities. The cost to comply with potential GHG emissions reduction requirements is subject to significant uncertainties, including those related to: the timing of the implementation of emissions reduction rules; required levels of emissions reductions; requirements with respect to the allocation of emissions allowances; the maturation, regulation, and commercialization of carbon capture, sequestration, and storage technology; and PGE’s compliance alternatives. Although the Company cannot currently estimate the effect of future laws and regulations on its results of operations, financial condition, or cash flows, the costs of compliance with such legislation or regulations could be material.

Current wording

Compliance with any new or additional GHG emissions reduction and air quality requirements could require PGE to incur significant expenditures, including those related to carbon capture and sequestration technology, purchase of emission allowances and offsets, fuel switching, and the retirement or replacement of high-emitting generation facilities with non-emitting facilities. The cost to comply with potential GHG emissions reduction and air quality requirements is subject to significant uncertainties, including those related to: i) the timing of the implementation of emissions reduction rules; ii) required levels of emissions reductions; iii) requirements with respect to the allocation of emissions allowances; iv) the maturation, regulation, and commercialization of carbon capture, sequestration, and storage technology; and v) PGE’s compliance alternatives. Although the Company cannot currently estimate the effect of future laws and regulations on its results of operations, financial condition, or cash flows, the costs of compliance with such legislation or regulations could be material.

Previous wording

PGE participates in a federal grant program established for the modernization of energy infrastructure through the Infrastructure Investment and Jobs Act (IIJA), and some PGE customers receive funds through the CHIPS act to support the domestic production of semiconductors and various federal science agencies. Failure to continue these programs, or revocation of grants or funds allocated through these programs could impact the ability to continue to make certain infrastructure investments, or could result in the customers’ demand forecast being lower than anticipated, resulting in stranded assets.

Current wording

PGE participates in a federal grant program established for the modernization of energy infrastructure through the Infrastructure Investment and Jobs Act, and some PGE customers receive funds through the CHIPS and Science Act of 2022 to support the domestic production of semiconductors and various federal science agencies. Failure to continue these programs, or revocation of grants or funds allocated through these programs could impact the ability to continue to make certain infrastructure investments, or could result in the customers’ demand forecast being lower than anticipated, resulting in stranded assets.

Previous wording

PGE has experienced load growth in recent years, and projects a significant amount of growth in the future. Unfavorable economic conditions in Oregon, such as, for example, increased inflation, may result in reduced demand for electricity and impair the financial stability of PGE’s customers. Such reductions in demand could adversely affect PGE’s results of operations and cash flows. Significant growth may result in PGE’s inability to generate or procure enough energy to meet customer demand. Economic conditions could also result in an increased level of uncollectible customer accounts and cause the Company’s vendors and service providers to experience cash flow problems and be unable to perform under existing or future contracts and could result in investment in assets to accommodate higher load that are no longer needed.

Current wording

PGE has experienced load growth in recent years, and projects a significant amount of growth in the future. Significant growth may result in PGE’s inability to generate or procure enough energy to meet customer demand. PGE's ability to invest in infrastructure necessary to support growth is dependent on regulatory approvals as is PGE's ability to allocate the costs of growth appropriately to customer classes. Unfavorable economic conditions in Oregon, such as, for example, increased inflation, may result in reduced demand for electricity and impair the financial stability of PGE’s customers. Such reductions in demand could adversely affect PGE’s results of operations and cash flows. Economic conditions and regulatory outcomes could also result in an increased level of uncollectible customer accounts. The Company’s business customers, vendors and service providers could experience cash flow problems and be unable to perform under existing or future contracts and could result in investment in assets to accommodate higher load that are no longer needed.

Previous wording

In addition, the terms of the Company’s debt instruments may limit the payment of dividends. Under the Indenture of Mortgage and Deed of Trust, dated July 1, 1945, as amended and supplemented to date, between PGE and Wells Fargo Bank, National Association, so long as any of the First Mortgage Bonds (FMBs) are outstanding, the Company may not pay or declare dividends (other than stock dividends) on common stock or purchase or retire for a consideration (other than in exchange for other shares of PGE’s capital stock or the proceeds from the sale of other shares of capital stock) any shares of capital stock of any class, if the aggregate amount distributed or expended after December 31, 1944 would exceed the aggregate amount of PGE’s net income, as adjusted, available for dividends on common stock accumulated after December 31, 1944. At December 31, 2024, $402 million of accumulated net income, as defined in the Indenture, was available for payment of dividends under this provision.

Current wording

In addition, the terms of the Company’s debt instruments may limit the payment of dividends. Under the Indenture of Mortgage and Deed of Trust, dated July 1, 1945, as amended and supplemented to date, between PGE and Wells Fargo Bank, National Association, so long as any of the First Mortgage Bonds (FMBs) are outstanding, the Company may not pay or declare dividends (other than stock dividends) on common stock or purchase or retire for a consideration (other than in exchange for other shares of PGE’s capital stock or the proceeds from the sale of other shares of capital stock) any shares of capital stock of any class, if the aggregate amount distributed or expended after December 31, 1944 would exceed the aggregate amount of PGE’s net income, as adjusted, available for dividends on common stock accumulated after December 31, 1944. At December 31, 2025, $403 million of accumulated net income, as defined in the Indenture, was available for payment of dividends under this provision.

Previous wording

Credit rating agencies routinely evaluate the Company, and their ratings of long-term and short-term debt are based on a number of factors, including the perceived supportiveness of the regulatory environment affecting the utility operations, the Company’s cash generating capability, level of indebtedness, overall financial strength, the status of certain capital projects, as well as factors beyond PGE’s control, such as tax reform, the state of the economy and industry generally. A ratings downgrade could increase fees on PGE’s syndicated unsecured revolving credit facility, commercial paper program, and letter of credit facilities, increasing the cost of funding day-to-day working capital requirements, and could also result in higher interest rates on future long-term debt. A ratings downgrade could also restrict the Company’s access to the commercial paper market, a principal source of short-term financing, or result in higher interest costs.

Current wording

Credit rating agencies routinely evaluate the Company, and their ratings of long-term and short-term debt are based on a number of factors, including the perceived supportiveness of the regulatory environment affecting the utility operations, the Company's ability to recover costs through customer pricing, the Company's ability to effectively manage risks, the Company’s cash generating capability, level of indebtedness, overall financial strength, the status of certain capital projects, as well as factors beyond PGE’s control, such as tax reform, the state of the economy, and industry generally. A ratings downgrade could increase fees on PGE’s syndicated unsecured revolving credit facility, commercial paper program, and letter of credit facilities, increasing the cost of funding day-to-day working capital requirements, and could also result in higher interest rates on future long-term debt. A ratings downgrade could also restrict the Company’s access to the commercial paper market, a principal source of short-term financing, or result in higher interest costs.

Previous wording

The risk of volatility in power costs is partially mitigated through the AUT and the PCAM. Application of the PCAM requires that PGE absorb certain power cost increases before the Company is allowed to recover any amount from customers. Accordingly, the PCAM is expected to only partially mitigate the potentially adverse financial impacts of forced generating plant outages, reduced hydro and wind availability, interruptions in fuel supplies, and volatile wholesale energy prices. A new mechanism, the Reliability Contingency Event (RCE), which, like the PCAM, allows for cost sharing and deferral of certain costs for specific events, was introduced through the 2024 GRC. This mechanism expires at the end of 2025.

Current wording

The risk of volatility in power costs is partially mitigated through the AUT and the PCAM. Application of the PCAM requires that PGE absorb certain power cost increases before the Company is allowed to recover any amount from customers. Accordingly, the PCAM is expected to only partially mitigate the potentially adverse financial impacts of forced generating plant outages, reduced hydro and wind availability, interruptions in fuel supplies, and volatile wholesale energy prices. The Reliability Contingency Event (RCE) mechanism, which operates under the PCAM tariff, allows for cost sharing and deferral of certain costs for specific events, was introduced through the 2024 GRC. This mechanism expired at the end of 2025.

Previous wording

PGE meets its customers’ energy demand requirements based on capacity obtained from its generating facilities and third-party PPAs. The Company continuously evaluates how much capacity it will need to meet reasonably expected demands of customers and provide reasonable reserves. PGE is also required to file IRPs with the OPUC that detail the Company’s plan to meet the future energy and capacity needs of its customers through a least-cost, least-risk combination of energy generation and demand reduction, while also aggressively reducing GHG emissions from the power supply. If the capacity provided by the Company’s generating facilities and purchased power is not adequate to meet customers’ energy demands, PGE may be required to purchase more power from third parties, which may not come from non-emitting resources, invest in acquiring additional generating or battery storage facilities, or invest in extending the operating life of existing generating assets, which could increase GHG emissions. Any failure to obtain adequate capacity to meet customers’ energy demand requirements could increase its costs and negatively impact PGE’s customer satisfaction, all of which could have an adverse impact on PGE’s business and results of operations.

Current wording

PGE meets its customers’ energy demand requirements based on capacity obtained from its generating facilities and third-party PPAs. The Company continuously evaluates how much capacity it will need to meet reasonably expected demands of customers and provide reasonable reserves. PGE is also required to file IRPs with the OPUC that detail the Company’s plan to meet the future energy and capacity needs of its customers through a least-cost, least-risk combination of energy generation and demand reduction, while also aggressively reducing GHG emissions from the power supply. If the capacity provided by the Company’s generating facilities and purchased power is not adequate to meet customers’ energy demands, or if customer demand increases beyond forecasts, PGE may be required to purchase more power from third parties, which may not come from non-emitting resources, invest in acquiring additional generating or battery storage facilities, or invest in extending the operating life of existing generating assets, which could increase GHG emissions. Any failure to obtain adequate capacity to meet customers’ energy demand requirements could increase its costs and negatively impact PGE’s customer satisfaction, all of which could have an adverse impact on PGE’s business and results of operations.

Previous wording

A basic premise of PGE’s business as a vertically integrated utility is the ability to produce electricity at competitive prices due to economies of scale. Furthermore, a key component of PGE’s growth is its ability to construct, own, and operate facilities. Many companies and organizations conduct research and development activities to seek improvements in alternative technologies and distributed generation. Advancements in and creation of new technologies could include fuel cells and micro turbines, wind turbines, photovoltaic solar cells, distributed generation, nuclear energy, hydrogen, ongoing customer energy efficiency, two-way grid enabling customer-owned generation, and advances in batteries or energy storage. It is possible that advances in such technologies, or other current technologies, will reduce the cost of alternative methods of electricity production or storage to a level that is equal to or below that of existing methods.

Current wording

A basic premise of PGE’s business as a vertically integrated utility is the ability to produce electricity at competitive prices due to economies of scale. Furthermore, a key component of PGE’s growth is its ability to construct, own, and operate facilities. Many companies and organizations conduct research and development activities to seek improvements in alternative technologies and distributed generation. Advancements in and creation of new technologies could include fuel cells and micro turbines, wind turbines, photovoltaic solar cells, distributed generation, modular nuclear energy, hydrogen, ongoing customer energy efficiency, two-way grid enabling customer-owned generation, and advances in batteries or energy storage. It is possible that advances in such technologies, or other current technologies, will reduce the cost of alternative methods of electricity production or storage to a level that is equal to or below that of existing methods.

Previous wording

PGE also owns unregulated properties that are currently or previously leased to third parties and located adjacent to PGE’s T.W. Sullivan hydro generating facility. PGE has recorded a non-utility asset retirement obligation (ARO) for this site related to assets that are no longer in service. Significant changes in estimates for this non-utility ARO due to changes in environmental laws or regulations could adversely affect PGE’s results of operations.

Current wording

(ARO) for this site related to assets that are no longer in service. Significant changes in estimates for this non-utility ARO due to changes in environmental laws or regulations could adversely affect PGE’s results of operations.

Previous wording

Rapidly changing stakeholder expectations and standards with respect to PGE’s environmental, social, and governance (ESG) programs could result in increased costs and exposure to incremental risk.

Current wording

Stakeholder expectations and standards with respect to PGE’s environmental, social, and governance (ESG) programs could result in increased costs and exposure to incremental risk.

Previous wording

Investors, lenders, rating agencies, customers, regulators, state legislatures, employees, and other stakeholders are increasing their focus on evaluating companies as corporate citizens based on their ESG programs and metrics. Based on PGE’s ESG profile, investors and lenders may elect to increase their required returns on capital offered to the Company, reallocate capital, or not commit capital as a result of their assessment of the Company’s ESG profile. Such actions by investors and lenders could increase PGE’s cost of, or access to, capital and financing.

Current wording

Investors, lenders, rating agencies, customers, regulators, state legislatures, employees, and other stakeholders often evaluate companies as corporate citizens based on their ESG programs and metrics. Based on PGE’s ESG profile, investors and lenders may elect to increase their required returns on capital offered to the Company, reallocate capital, or not commit capital as a result of their assessment of the Company’s ESG profile. Such actions by investors and lenders could increase PGE’s cost of, or access to, capital and financing.