BALANCE SHEET COMPONENTS

Accounts Receivable, Net

Accounts receivable is net of an allowance for uncollectible accounts of $6 million as of June 30, 2015 and December 31, 2014.

The activity in the allowance for uncollectible accounts is as follows (in millions):



	Six Months Ended June 30,
	2015			2014
Balance as of beginning of period	$	6		$	6
Provision, net	3			4
Amounts written off, less recoveries	(3		)	(3		)
Balance as of end of period	$	6		$	7

Inventories

PGE’s inventories, which are recorded at average cost, consist primarily of materials and supplies for use in operations, maintenance, and capital activities and fuel for use in generating plants. Fuel inventories include natural gas, coal, and oil. Periodically, the Company assesses the realizability of inventory for purposes of determining that inventory is recorded at the lower of average cost or market. During the six months ended June 30, 2015, the Company’s inventory balance increased largely as a result of contractual deliveries of coal exceeding usage due to plant maintenance and economic dispatch decisions.

Other Current Assets

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



	June 30, 2015		December 31, 2014
Prepaid expenses	$	32	$	39
Current deferred income tax asset	33		33
Margin deposits	28		11
Accrued sales tax refund related to Tucannon River Wind Farm	—		23
Assets from price risk management activities	3		6
Other	1		3
Other current assets	$	97	$	115

Electric Utility Plant, Net

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



	June 30, 2015			December 31, 2014
Electric utility plant	$	8,301		$	8,161
Construction work-in-progress	557			417
Total cost	8,858			8,578
Less: accumulated depreciation and amortization	(2,984		)	(2,899		)
Electric utility plant, net	$	5,874		$	5,679

Accumulated depreciation and amortization in the table above includes accumulated amortization related to intangible assets of $209 million and $191 million as of June 30, 2015 and December 31, 2014, respectively. Amortization expense related to intangible assets was $9 million and $6 million for the three months ended June 30, 2015 and 2014, respectively, and $18 million and $12 million for the six months ended June 30, 2015 and 2014, 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):



	June 30, 2015					December 31, 2014
	Current			Noncurrent		Current			Noncurrent
Regulatory assets:
Price risk management	$	98		$	186	$	100		$	121
Pension and other postretirement plans	—			237		—			247
Deferred income taxes	—			87		—			86
Debt issuance costs	—			17		—			15
Deferred capital projects	10			—		19			—
Other	9			25		14			25
Total regulatory assets	$	117		$	552	$	133		$	494
Regulatory liabilities:
Asset retirement removal costs	$	—		$	824	$	—		$	804
Trojan decommissioning activities	21			24		23			34
Asset retirement obligations	—			42		—			39
Other	32			33		37			29
Total regulatory liabilities	$	53	^*	$	923	$	60	^*	$	906


*	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):



	June 30, 2015		December 31, 2014
Regulatory liabilities—current	$	53	$	60
Accrued employee compensation and benefits	43		51
Accrued interest payable	25		26
Accrued dividends payable	27		23
Accrued taxes payable	21		22
Other	59		54
Total accrued expenses and other current liabilities	$	228	$	236

Asset Retirement Obligations

Asset retirement obligations (AROs) consist of the following (in millions):



	June 30, 2015		December 31, 2014
Trojan decommissioning activities	$	43	$	41
Utility plant	81		64
Non-utility property	11		11
Asset retirement obligations	$	135	$	116

Utility plant represents AROs that have been recognized for the Company’s thermal and wind generation sites and distribution and transmission assets where disposal is governed by environmental regulation.

The United States Environmental Protection Agency (EPA) published a final rule, effective October 19, 2015, that regulates Coal Combustion Residuals (CCRs) under the Resource Conservation and Recovery Act, Subtitle D. The new rule imposes extensive new requirements, including location restrictions, design and operating standards, groundwater monitoring and corrective action requirements, and closure and post-closure care requirements on CCR impoundments and landfills that are located on active power plants and not closed. The rule’s requirements for covered CCR impoundments and landfills include commencement or completion of closure activities generally between three and ten years from certain triggering events.

Based on a preliminary evaluation, the Company believes the rule will not have a material effect on operations at Boardman, which produce dry CCRs. Disposal of the dry CCRs occurs at an on-site landfill that is currently permitted and regulated by the State of Oregon under requirements similar to the new CCR rule.

Colstrip utilizes wet scrubbers and a number of settlement ponds that will require upgrading or closure to meet the new regulatory requirements. The operator of Colstrip has provided an initial cost estimate related to the impacts of the new CCR rule. As a result, during the second quarter of 2015, the Company recorded an increase to the existing Colstrip AROs in the amount of $15 million, with a corresponding increase in the cost basis of the plant, included in Electric utility plant, net on the consolidated balance sheet. PGE plans to seek recovery in customer prices of the incremental costs associated with the new rule.

Credit Facilities

During the first quarter of 2015, PGE determined that a $500 million aggregate revolving credit facility capacity would be sufficient to meet its liquidity needs and accordingly, in March 2015, reduced its aggregate revolving credit capacity from $700 million to $500 million. As of June 30, 2015, PGE has a $500 million revolving credit facility, which is scheduled to expire in November 2019.

Pursuant to the terms of the agreement, the revolving credit facility may be used for general corporate purposes and as backup for commercial paper borrowings, and also 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 credit facility. The revolving credit facility contains provisions for two, one-year extensions subject to approval by the banks, 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 June 30, 2015, PGE was in compliance with this covenant with a 50.4% debt-to-total capital ratio.

PGE classifies any borrowings under the revolving credit facility and outstanding commercial paper as Short-term debt on the condensed consolidated balance sheets. As of June 30, 2015, PGE had no borrowings or commercial paper outstanding, $38 million of letters of credit issued, and an aggregate available capacity under the credit facility of $462 million.

In addition, PGE has two $30 million letter of credit facilities, 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. As of June 30, 2015, $59 million of letters of credit had been issued under these facilities.

The Company has a commercial paper program under which it may issue commercial paper for terms of up to 270 days, limited to the unused amount of credit under the revolving credit facility.

Pursuant to an order issued by the Federal Energy Regulatory Commission (FERC), the Company is authorized to issue short-term debt up to $900 million through February 6, 2016. The authorization provides that if utility assets financed by unsecured debt are divested, then a proportionate share of the unsecured debt must also be divested.

Long-term Debt

During the six months ended June 30, 2015, PGE had the following long-term debt transactions:


•	In June, repaid $200 million of long-term bank loans;


•	In May, issued $70 million of 3.50% Series First Mortgage Bonds (FMBs) due 2035 and repaid $67 million of 6.80% Series FMBs, due January 2016;


•	In February, repaid $50 million of long-term bank loans; and


•	In January, issued $75 million of 3.55% Series FMBs due 2030 and repaid $70 million of 3.46% Series FMBs.

On July 10, 2015, the Company repaid the remaining outstanding balance of long-term bank loans in the amount of $55 million.

Pension and Other Postretirement Benefits

Components of net periodic benefit cost are as follows (in millions):



	Defined Benefit Pension Plan						Other Postretirement Benefits						Non-Qualified Benefit Plans
	2015			2014			2015			2014			2015		2014
Three Months Ended June 30:
Service cost	$	5		$	3		$	1		$	1		$	—	$	—
Interest cost	8			8			1			1			1		1
Expected return on plan assets	(10		)	(10		)	(1		)	(1		)	—		—
Amortization of prior service cost	—			—			—			1			—		—
Amortization of net actuarial loss	5			5			—			—			—		—
Net periodic benefit cost	$	8		$	6		$	1		$	2		$	1	$	1
Six Months Ended June 30:
Service cost	$	9		$	7		$	2		$	1		$	—	$	—
Interest cost	16			17			2			2			1		1
Expected return on plan assets	(20		)	(20		)	(1		)	(1		)	—		—
Amortization of prior service cost	—			—			—			1			—		—
Amortization of net actuarial loss	10			9			—			—			—		—
Net periodic benefit cost	$	15		$	13		$	3		$	3		$	1	$	1