COMMITMENTS AND GUARANTEES

Commitments

As of December 31, 2013, PGE’s estimated future minimum payments pursuant to purchase obligations for the following five years and thereafter are as follows (in millions):



	Payments Due
	2014		2015		2016		2017		2018		Thereafter		Total
Capital and other purchase commitments	$	710	$	113	$	40	$	2	$	2	$	67	$	934
Purchased power and fuel:
Electricity purchases	240		159		150		125		126		683		1,483
Capacity contracts	22		23		22		2		2		1		72
Public Utility Districts	8		8		7		5		5		33		66
Natural gas	65		21		12		10		8		6		122
Coal and transportation	21		6		6		6		4		5		48
Operating leases	11		9		10		10		10		191		241
Total	$	1,077	$	339	$	247	$	160	$	157	$	986	$	2,966

Capital and other purchase commitments—Certain commitments have been made for capital and other purchases for 2014 and beyond. Such commitments include those related to hydro licenses, upgrades to generating, distribution and transmission facilities, information systems, and system maintenance work. A large component of these commitments for 2014 and 2015 are costs associated with the construction of three new generating facilities. Termination of these agreements could result in cancellation charges.

Electricity purchases and Capacity contracts—PGE has power purchase contracts with counterparties, which expire at varying dates through 2037, and power capacity contracts through 2019. In addition to the power purchase contracts with counterparties presented in the table, PGE has power sale contracts with counterparties of approximately $1 million that settle in 2014.

Public Utility Districts—PGE has long-term power purchase contracts with certain public utility districts in the state of Washington and with the City of Portland, Oregon. The Company is required to pay its proportionate share of the operating and debt service costs of the hydroelectric projects whether or not they are operable. The future minimum payments for the Public Utility Districts in the preceding table reflect the principal payment only and do not include interest, operation, or maintenance expenses. Selected information regarding these projects is summarized as follows (dollars in millions):



	Revenue Bonds as of December 31, 2013		PGE’s Share in 2013			Contract Expiration	PGE Cost, including Debt Service
	Revenue Bonds as of December 31, 2013		Output		Capacity	Contract Expiration	2013		2012		2011
					(in MW)
Priest Rapids and Wanapum	$	1,001	9.0	%	170	2052	$	14	$	14	$	14
Wells	232		19.4		150	2018	10		10		10
Portland Hydro	7		100.0		36	2017	4		4		4

Under contracts with the public utility districts, PGE has acquired a percentage of the output (Allocation) of Priest Rapids and Wanapum and Wells. The contracts provide that, should any other purchaser of output default on payments as a result of bankruptcy or insolvency, PGE would be allocated a pro rata share of the output and operating and debt service costs of the defaulting purchaser. For Wells, PGE would be allocated up to a cumulative maximum of 25% of the defaulting purchaser’s percentage Allocation. For Priest Rapids and Wanapum, PGE would be allocated up to a cumulative maximum that would not adversely affect the tax exempt status of any outstanding debt.

Natural gas—PGE has agreements for the purchase and transportation of natural gas from domestic and Canadian sources for its natural gas-fired generating facilities. The Company also has a natural gas storage agreement, which expires in April 2017, for the purpose of fueling the Company’s Port Westward natural gas-fired generating plant (Port Westward) and Beaver natural gas-fired generating plant (Beaver).

Coal and transportation—PGE has coal and related rail transportation agreements with take-or-pay provisions related to Boardman, which expire at various dates through 2020.

Operating leases—PGE has various operating leases associated with its headquarters and certain of its production, transmission, and support facilities. The majority of the future minimum operating lease payments presented in the table consist of (i) the corporate headquarters lease, which expires in 2018, but includes renewal period options through 2043, and (ii) the Port of St. Helens land lease, where Port Westward and Beaver are located, which expires in 2096. Rent expense was $9 million in 2013, $10 million in 2012, and $9 million in 2011.

The future minimum operating lease payments presented is net of sublease income of: $3 million in 2014 and 2015; $2 million in 2016; and $1 million in 2017 and 2018. Sublease income was $3 million in 2013, 2012, and 2011.

Guarantees

PGE enters into financial agreements and power and natural gas purchase and sale agreements that include indemnification provisions relating to certain claims or liabilities that may arise relating to the transactions contemplated by these agreements. Generally, a maximum obligation is not explicitly stated in the indemnification provisions and, therefore, the overall maximum amount of the obligation under such indemnifications cannot be reasonably estimated. PGE periodically evaluates the likelihood of incurring costs under such indemnities based on the Company’s historical experience and the evaluation of the specific indemnities. As of December 31, 2013, management believes the likelihood is remote that PGE would be required to perform under such indemnification provisions or otherwise incur any significant losses with respect to such indemnities. The Company has not recorded any liability on the consolidated balance sheets with respect to these indemnities.