COMMITMENTS AND GUARANTEES

Commitments

As of December 31, 2014, PGE’s estimated future minimum payments pursuant to purchase obligations for the following five years and thereafter are as follows (in millions):



	Payments Due
	2015		2016		2017		2018		2019		Thereafter		Total
Capital and other purchase commitments	$	242	$	21	$	2	$	2	$	2	$	74	$	343
Purchased power and fuel:
Electricity purchases	179		167		140		143		143		833		1,605
Capacity contracts	27		26		6		6		5		20		90
Public utility districts	8		7		5		4		2		23		49
Natural gas	56		37		40		40		36		244		453
Coal and transportation	23		14		11		5		5		—		58
Operating leases	10		11		12		11		8		192		244
Total	$	545	$	283	$	216	$	211	$	201	$	1,386	$	2,842

Capital and other purchase commitments—Certain commitments have been made for capital and other purchases for 2015 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 2015 are costs associated with the construction of Carty. 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 2049, 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 $43 million that settle as follows: $14 million in 2015; $11 million in 2016 and 2017; and $7 million in 2018.

Public utility districts—PGE has long-term power purchase agreements with certain public utility districts in the state of Washington and with the City of Portland, Oregon. Under the agreements, 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, 2014		PGE’s Share as of December 31, 2014			Contract Expiration	PGE Cost, including Debt Service
	Revenue Bonds as of December 31, 2014		Output		Capacity	Contract Expiration	2014		2013		2012
					(in MW)
Priest Rapids and Wanapum	$	1,102	8.6	%	163	2052	$	14	$	14	$	14
Wells	215		19.4		150	2018	10		10		10
Portland Hydro	4		100.0		36	2017	4		4		4

The agreements for Priest Rapids and Wanapum and Wells 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. 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 for the purpose of fueling the Company’s natural gas-fired generating plants (Port Westward Unit 1 (PW1), PW2 and 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 PW1, PW2 and Beaver are located, which expires in 2096. Rent expense was $11 million in 2014, $9 million in 2013, and $10 million in 2012.

The future minimum operating lease payments presented is net of sublease income of: $3 million in 2015; $2 million in 2016; and $1 million in 2017, 2018 and 2019. Sublease income was $3 million in 2014, 2013 and 2012.

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, 2014, 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.