PORTLAND GENERAL ELECTRIC CO /OR/

Current report

The effects of unseasonable or severe weather and other natural phenomena can adversely affect the Company’s financial condition and results of operations, and the effects of climate change could result in more intense, frequent, and extreme weather events.

Current report

Weather conditions have in the past adversely affected PGE’s revenues and costs, materially impacting the Company’s results of operations. Variations in temperatures have adversely and positively affected customer demand for electricity, with warmer-than-normal winter seasons or cooler-than-normal summer seasons reducing demand for energy. Weather conditions are the dominant cause of usage variations from normal seasonal patterns, particularly for residential customers. Rapid increases in load requirements resulting from unexpected weather changes, particularly if coupled with transmission constraints, could adversely impact PGE’s cost and ability to meet the energy needs of its customers. Conversely, rapid decreases in load requirements could result in the sale of excess energy at depressed market prices. Changes in the global and local climate have resulted 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 have disrupted energy delivery, caused power outages, and impaired the use of, and damaged, the Company’s facilities and transmission and distribution system and could continue to do so in the future. Such events have resulted 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 also had adverse effects on cash flow and liquidity. In response to more intense, frequent, and severe weather events and increasing peak loads, PGE has made additional investments in generation, transmission, distribution, and energy storage assets to enhance reliability and resiliency but there is no guarantee these steps will successfully address these impacts on PGE’s financial results. Weather-related events have also caused system constraints or disrupted transmission flows, resulting in decreased reliability for customers. Severe weather also has required increased PGE personnel availability, which has resulted 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 has resulted in increased time to restore services to customers as well as increased costs and decreased customer satisfaction. We expect these weather related conditions to continue and they could have a material adverse effect on the Company’s financial condition and results of operations.