Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Under terms of an agreement (the “Agreement”) executed and approved by the OPUC in 2000, PGE has a 66.67% ownership interest in the 455 MW Pelton/Round Butte hydroelectric project on the Deschutes River, with the remaining interest held by the Confederated Tribes of the Warm Springs Reservation of Oregon (CTWS). The CTWS had an option to purchase an additional undivided 16.66% ownership interest in Pelton/Round Butte in 2021. On June 30, 2021, the CTWS notified PGE of their intent to exercise this purchase option. Under the terms of the purchase option in the Agreement, on January 1, 2022, PGE completed the sale of the additional undivided interest in the project at a net book value of approximately $38 million, with no gain or loss recognized on the sale. Under terms of the Agreement, the CTWS has a second option in 2036 to purchase an undivided 0.02% interest in Pelton/Round Butte. If the option is exercised, the CTWS’ ownership percentage would exceed 50%. PGE remains the operator of the project.

PGE is obligated to purchase 100% of the CTWS’ share of the project’s output under a PPA through 2040. The exercise of the purchase option was evaluated as a sale-leaseback arrangement, and PGE determined that the transaction did not qualify for sale-leaseback accounting. As a result, the transaction is being accounted for as a financing, and PGE will continue to record the asset on the consolidated balance sheets within Electric utility plant, net as if it were the legal owner and will continue to recognize depreciation expense over the estimated useful life. A financing obligation will be recorded in Other noncurrent liabilities. The monthly PPA payments will be split between interest expense and a reduction of the principal portion of the financing obligation. Any material differences between expense recognition and timing of payments is deferred as a regulatory asset or liability in order to match what is being recovered in customer prices for ratemaking purposes.