Balance Sheet Components (Notes)

3 Months Ended

Sep. 30, 2020

Inventories

PGE’s inventories, which are recorded at average cost, consist primarily of materials and supplies for use in operations, maintenance, and capital activities, as well as fuel, which includes natural gas, coal, and oil, for use in the Company’s generating plants. Periodically, the Company assesses whether inventories are recorded at the lower of average cost or net realizable value.

Accounts Receivable, Net

Accounts receivable, net includes $79 million and $86 million of unbilled revenues as of September 30, 2020 and December 31, 2019, respectively. Accounts receivable, net is net of an allowance for credit losses of $14 million as of September 30, 2020. The following summarizes activity in the allowance for credit losses (in millions):


	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020

Balance as of beginning of period	$	12	$	5
Increase in provision	4		13
Amounts written off	(3)		(9)
Recoveries	1		5
Balance as of end of period	$	14	$	14

In connection with the adoption of ASU 2016-13 and to conform with 2020 presentation, PGE reclassified $86 million of Unbilled revenues to Accounts receivable, net on the condensed consolidated balance sheets as of December 31, 2019.

Other Current Assets

Other current assets consist of the following (in millions):


	September 30, 2020		December 31, 2019
Prepaid expenses	$	44	$	63

Assets from price risk management activities	57		25
Margin deposits	22		16


Other current assets	$	123	$	104

Electric Utility Plant, Net

Electric utility plant, net consists of the following (in millions):


	September 30, 2020		December 31, 2019
Electric utility plant	$	11,202	$	10,928
Construction work-in-progress	473		328
Total cost	11,675		11,256
Less: accumulated depreciation and amortization	(4,304)		(4,095)
Electric utility plant, net	$	7,371	$	7,161

Accumulated depreciation and amortization in the table above includes accumulated amortization related to intangible assets of $403 million and $366 million as of September 30, 2020 and December 31, 2019, respectively. Amortization expense related to intangible assets was $47 million and $49 million for the nine months ended September 30, 2020 and 2019, respectively, and $16 million and $16 million for the three months ended September 30, 2020 and 2019, respectively. The Company’s intangible assets primarily consist of computer software development and hydro licensing costs.

Regulatory Assets and Liabilities

Regulatory assets and liabilities consist of the following (in millions):


	September 30, 2020					December 31, 2019
	Current			Noncurrent		Current			Noncurrent
Regulatory assets:
Price risk management (1)	$	—		$	114	$	—		$	95
Pension and other postretirement plans	—			200		—			213

Debt issuance costs	—			26		—			26
Trojan decommissioning activities	—			95		—			94
Other	8			92		17			55
Total regulatory assets	$	8		$	527	$	17		$	483
Regulatory liabilities:
Asset retirement removal costs	$	—		$	1,005	$	—		$	1,021
Deferred income taxes	—			246		—			260

Asset retirement obligations	—			55		—			54
Tax Reform deferral	6			—		23			—
Price risk management (1)	39			—		2			—
Other	20			69		19			42
Total regulatory liabilities	$	65	(2)	$	1,375	$	44	(2)	$	1,377

(1)For the nine months ended September 30, 2020, PGE’s actual net variable power costs (NVPC) were $70 million above the prescribed “deadband” limit of $30 million pursuant to the Company’s power cost adjustment mechanism (PCAM). PGE will not be pursuing regulatory recovery for amounts related to trading positions that resulted in realized losses of $127 million during the third quarter of 2020. The Company no longer has net market exposure from these energy trading positions. As of September 30, 2020, all other outstanding positions and related regulatory accounting deferrals have been recorded in accordance with accounting for rate-regulated enterprises.

(2)Included in Accrued expenses and other current liabilities in the condensed consolidated balance sheets.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in millions):


	September 30, 2020		December 31, 2019
Accrued employee compensation and benefits	$	63	$	74
Accrued taxes payable	57		33
Accrued interest payable	43		25
Accrued dividends payable	37		36
Regulatory liabilities—current	65		44
Other	103		103
Total accrued expenses and other current liabilities	$	368	$	315

Credit Facilities

As of September 30, 2020, PGE had a $500 million revolving credit facility scheduled to expire in November 2023. The Company has the ability to expand the revolving credit facility to $600 million, if needed. Pursuant to the terms of the agreement, the revolving credit facility may be used for general corporate purposes, including as backup for commercial paper borrowings and to permit the issuance of standby letters of credit. PGE may borrow for one, two, three, or six months at a fixed interest rate established at the time of the borrowing, or at a variable interest rate for any period up to the then remaining term of the applicable credit facility. The revolving credit facility contains a provision that requires annual fees based on PGE’s unsecured credit ratings, and contains customary covenants and default provisions, including a requirement that limits consolidated indebtedness, as defined in the agreement, to 65% of total capitalization. As of September 30, 2020, PGE was in compliance with this covenant with a 55.5% debt-to-total capital ratio. The aggregate unused available credit capacity under the revolving credit facility was $500 million.

The Company has a commercial paper program under which it may issue commercial paper for terms of up to 270 days. The Company has elected to limit its borrowings under the revolving credit facility to cover any potential need to repay any commercial paper that may be outstanding at the time. As of September 30, 2020, PGE had $75 million of commercial paper outstanding.

PGE typically classifies borrowings under the revolving credit facility and outstanding commercial paper as Short-term debt on the condensed consolidated balance sheets.

In addition, PGE has four letter of credit facilities that provide a total capacity of $220 million under which the Company can request letters of credit for original terms not to exceed one year. The issuance of such letters of credit is subject to the approval of the issuing institution. Under these facilities, letters of credit for a total of $55 million were outstanding as of September 30, 2020. Letters of credit issued are not reflected on the Company’s condensed consolidated balance sheets.

On April 9, 2020, PGE obtained a 364-day term loan from lenders in the aggregate principal of $150 million. The term loan bears interest for the relevant interest period at LIBOR plus 1.25%. The interest rate is subject to adjustment pursuant to the terms of the loan. The credit agreement is classified as Short-term debt on the Company’s condensed consolidated balance sheets and expires on April 8, 2021, with any outstanding balance due and payable on such date.

Pursuant to an order issued by the Federal Energy Regulatory Commission (FERC), the Company is authorized to issue short-term debt in an aggregate amount of up to $900 million through February 7, 2022.

Long-term Debt

On March 11, 2020, PGE completed the remarketing of an aggregate principal amount of $119 million of Pollution Control Revenue Refunding Bonds (PCRBs), which consist of $98 million aggregate principal of PCRBs that bear an interest rate of 2.125%, and $21 million aggregate principal of PCRBs that bear an interest rate of 2.375%, both due in 2033.

On April 27, 2020, PGE issued $200 million of 3.15% Series First Mortgage Bonds (FMBs) due in 2030.

Defined Benefit Retirement Plan Costs

Components of net periodic benefit cost under the defined benefit pension plan are as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Service cost	$	4	$	4	$	12	$	12
Interest cost*	8		8		24		25
Expected return on plan assets*	(11)		(10)		(33)		(30)
Amortization of net actuarial loss*	4		3		12		8
Net periodic benefit cost	$	5	$	5	$	15	$	15

* The expense portion of non-service cost components are included in Miscellaneous income (loss), net within Other income on the Company’s condensed consolidated statements of income and comprehensive income.