PGE estimated the fair value of financial asset and liability instruments as of March 31, 2023 and December 31, 2022, and classified these financial instruments based on a fair value hierarchy that is applied to prioritize the inputs to the valuation techniques used to measure fair value. The three levels of the fair value hierarchy and application to the Company are:


Level 1			Quoted prices are available in active markets for identical assets or liabilities as of the measurement date;
Level 2			Pricing inputs include those that are directly or indirectly observable in the marketplace as of the measurement date; and
Level 3			Pricing inputs include significant inputs that are unobservable for the asset or liability.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. Assets measured at fair value using net asset value (NAV) as a practical expedient are not

categorized in the fair value hierarchy. These assets are listed in the totals of the fair value hierarchy to permit the reconciliation to amounts presented in the financial statements.

Changes to market liquidity conditions, the availability of observable inputs, or changes in the economic structure of a security marketplace may require transfer of the securities between levels.

The Company’s financial assets and liabilities whose values were recognized at fair value in the Company’s condensed consolidated balance sheets are as follows by level within the fair value hierarchy (in millions):


	As of March 31, 2023
	Level 1		Level 2		Level 3		Other (2)		Total
Assets:
Cash equivalents	$	—	$	—	$	—	$	—	$	—
Nuclear decommissioning trust: (1)
Debt securities:
Domestic government	10		10		—		—		20
Corporate credit	—		11		—		—		11
Money market funds	—		—		—		7		7
Non-qualified benefit plan trust: (3)
Debt securities—domestic government	3		—		—		—		3
Money market funds	3		—		—		—		3
Equity securities	3		—		—		—		3




Price risk management activities: (1) (4)
Electricity	—		39		45		—		84
Natural gas	—		71		6		—		77
	$	19	$	131	$	51	$	7	$	208
Liabilities:

Price risk management activities: (1) (4)
Electricity	$	—	$	41	$	72	$	—	$	113
Natural gas	—		50		7		—		57
	$	—	$	91	$	79	$	—	$	170

(1)Activities are subject to regulation, with certain gains and losses deferred pursuant to regulatory accounting and included in Regulatory assets or Regulatory liabilities as appropriate.


	As of December 31, 2022
	Level 1		Level 2		Level 3		Other (2)		Total
Assets:
Cash equivalents	$	150	$	—	$	—	$	—	$	150
Nuclear decommissioning trust: (1)

Debt securities:
Domestic government	9		10		—		—		19
Corporate credit	—		9		—		—		9
Money market funds	—		—		—		11		11
Non-qualified benefit plan trust: (3)
Debt securities—domestic government	3		—		—		—		3
Money market funds	1		—		—		—		1
Equity securities	3		—		—		—		3



Price risk management activities: (1) (4)
Electricity	—		93		63		—		156
Natural gas	—		225		6		—		231
	$	166	$	337	$	69	$	11	$	583
Liabilities:

Price risk management activities: (1) (4)
Electricity	$	—	$	53	$	93	$	—	$	146
Natural gas	—		39		8		—		47
	$	—	$	92	$	101	$	—	$	193

(1)Activities are subject to regulation, with certain gains and losses deferred pursuant to regulatory accounting and included in Regulatory assets or Regulatory liabilities as appropriate.

Cash equivalents are highly liquid investments with maturities of three months or less at the date of acquisition and primarily consist of money market funds. Such funds seek to maintain a stable net asset value and are comprised of short-term, government funds. Policies of such funds require that the weighted average maturity of securities holdings of such funds not exceed 90 days and provide investors with the ability to redeem shares of the funds daily at their respective net asset value. Cash equivalents are classified as Level 1 in the fair value hierarchy due to the availability of quoted prices for identical assets in an active market as of the measurement date. Principal markets for money market fund prices include published exchanges such as the National Association of Securities Dealers Automated Quotations (Nasdaq) and the New York Stock Exchange (NYSE).

Assets held in the Nuclear decommissioning trust (NDT) and Non-qualified benefit plan (NQBP) trusts are recorded at fair value in PGE’s condensed consolidated balance sheets and invested in securities that are exposed to interest rate, credit, and market volatility risks. These assets are classified within Level 1, 2, or 3 based on the following factors:

Debt securities—PGE invests in highly-liquid United States Treasury securities to support the investment objectives of the trusts. These domestic government securities are classified as Level 1 in the fair value hierarchy due to the availability of quoted prices for identical assets in an active market as of the measurement date.

Assets classified as Level 2 in the fair value hierarchy include domestic government debt securities, such as municipal debt, and corporate credit securities. Prices are determined by evaluating pricing data such as broker quotes for similar securities and adjusted for observable differences. Significant inputs used in valuation models generally include benchmark yields and issuer spreads. The external credit rating, coupon rate, and maturity of each security are considered in the valuation, as applicable.

Equity securities—Equity mutual fund and common stock securities are classified as Level 1 in the fair value hierarchy due to the availability of quoted prices for identical assets in an active market as of the measurement date. Principal markets for equity prices include published exchanges such as Nasdaq and the NYSE.

Money market funds—PGE invests in money market funds that seek to maintain a stable net asset value. These funds invest in high-quality, short-term, diversified money market instruments, short-term treasury bills, federal agency securities, certificates of deposits, and commercial paper. The Company believes the redemption value of these funds is likely to be the fair value, which is represented by the net asset value. Redemption is permitted daily without written notice.

The NQBP trust is invested in exchange-traded government money market funds and is classified as Level 1 in the fair value hierarchy due to the availability of quoted prices in published exchanges such as Nasdaq and the NYSE. The money market fund in the NDT is valued at NAV as a practical expedient and is not included in the fair value hierarchy.

Assets and liabilities from price risk management activities, recorded at fair value in PGE’s condensed consolidated balance sheets, consist of derivative instruments entered into by the Company to manage its risk exposure to commodity price and foreign currency exchange rates and reduce volatility in NVPC for the Company’s retail customers. For additional information regarding these assets and liabilities, see Note 5, Risk Management.

For those assets and liabilities from price risk management activities classified as Level 2, fair value is derived using present value formulas that utilize inputs such as forward commodity prices and interest rates. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include commodity forwards, futures, and swaps.

Assets and liabilities from price risk management activities classified as Level 3 consist of longer-term commodity forwards, futures, swaps, and options for which fair value is derived using one or more significant inputs that are not observable for the entire term of the instrument.

Quantitative information regarding the significant, unobservable inputs used in the measurement of Level 3 assets and liabilities from price risk management activities is presented below:


	Fair Value				Valuation Technique	Significant Unobservable Input	Price per Unit
Commodity Contracts	Assets		Liabilities				Low		High		Weighted Average
	(in millions)
As of March 31, 2023
Electricity physical forwards	$	44	$	69	Discounted cash flow	Electricity forward price (per MWh)	$	39.21	$	245.00	$	96.46
Natural gas financial swaps	6		8		Discounted cash flow	Natural gas forward price (per Decatherm)	2.81		9.36		4.02
Electricity financial futures	1		2		Discounted cash flow	Electricity forward price (per MWh)	40.00		209.00		108.12
	$	51	$	79
As of December 31, 2022
Electricity physical forwards	$	52	$	93	Discounted cash flow	Electricity forward price (per MWh)	$	35.00	$	270.00	$	101.27
Natural gas financial swaps	6		8		Discounted cash flow	Natural gas forward price (per Decatherm)	2.71		24.71		4.42
Electricity financial futures	11		—		Discounted cash flow	Electricity forward price (per MWh)	54.17		143.70		104.21
	$	69	$	101

The significant unobservable inputs used in the Company’s fair value measurement of price risk management assets and liabilities are long-term forward prices for commodity derivatives. For certain long-term contracts, observable, liquid market transactions are not available for the duration of the delivery period. In such instances, the Company uses internally-developed long-term price curves that utilize observable data when available. When not available, regression techniques are used to estimate unobservable future prices.

The Company’s Level 3 assets and liabilities from price risk management activities are sensitive to market price changes in the respective underlying commodities. The significance of the impact is dependent upon the magnitude of the price change and PGE’s position as either the buyer or seller under the contract. Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:

Changes in the fair value of net liabilities from price risk management activities (net of assets from price risk management activities) classified as Level 3 in the fair value hierarchy were as follows (in millions):


	Three Months Ended March 31,
		2023		2022
Balance as of the beginning of the period		$	32	$	85
Net realized and unrealized (gains)*		(11)		(37)



Transfers from Level 3 to Level 2		7		4
Balance as of the end of the period		$	28	$	52

* Both realized and unrealized losses/(gains), of which the unrealized portions are offset by the effects of regulatory accounting until settlement of the underlying transactions, are recorded in Revenues, net or Purchased power and fuel expense in the condensed consolidated statements of income and comprehensive income. Includes $5 million in net realized losses for the three months ended March 31, 2023 and $1 million in net realized gains for the three months ended March 31, 2022.

Transfers out of Level 3 occur when the significant inputs become more observable, such as when the time between the valuation date and the delivery term of a transaction becomes shorter.

Long-term debt is recorded at amortized cost in PGE’s condensed consolidated balance sheets. The value of the Company’s FMBs and Pollution Control Revenue Bonds is classified as a Level 2 fair value measurement.

As of March 31, 2023, the carrying amount of PGE’s long-term debt was $3,485 million, net of $13 million of unamortized debt expense, and its estimated aggregate fair value was $3,110 million. As of December 31, 2022, the carrying amount of PGE’s long-term debt was $3,646 million, net of $13 million of unamortized debt expense, and its estimated aggregate fair value was $2,984 million.