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Balance Sheet Components (Notes) | 9 Months Ended
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Sep. 30, 2016
Balance Sheet Components [Abstract] |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS 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 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. Other Current Assets Other current assets consist of the following (in millions):
| September 30, 2016 |  | December 31, 2015
Prepaid expenses | $ | 28 |  |  | $ | 43 |
Margin deposits | 8 |  |  | 33 |
Assets from price risk management activities | 5 |  |  | 10 |
Other | — |  |  | 2 |
Other current assets | $ | 41 |  |  | $ | 88 |
Electric Utility Plant, Net Electric utility plant, net consists of the following (in millions):
| September 30, 2016 |  | December 31, 2015
Electric utility plant | $ | 9,415 |  |  | $ | 8,560 |
Construction work-in-progress | 194 |  |  | 545 |
Total cost | 9,609 |  |  | 9,105 |
Less: accumulated depreciation and amortization | (3,269 | ) |  | (3,093 | )
Electric utility plant, net | $ | 6,340 |  |  | $ | 6,012 |
Accumulated depreciation and amortization in the table above includes accumulated amortization related to intangible assets of $260 million and $227 million as of September 30, 2016 and December 31, 2015, respectively. Amortization expense related to intangible assets was $11 million and $10 million for the three months ended September 30, 2016 and 2015, respectively, and $33 million and $28 million for the nine months ended September 30, 2016 and 2015, respectively. The Company’s intangible assets primarily consist of computer software development and hydro licensing costs. Carty Placed In Service—On July 29, 2016, the Company placed Carty into service, a 440 MW baseload natural gas-fired generating plant in Eastern Oregon, located adjacent to the Boardman coal-fired generating plant (Boardman). As of September 30, 2016, PGE had $615 million in plant in service related to Carty as compared to $424 million, as of December 31, 2015 included in Construction work-in-progress (CWIP) for the project. The final order issued by the OPUC on November 3, 2015 in connection with the Company’s 2016 General Rate Case (GRC), authorized the inclusion in customer prices of capital costs for Carty of up to $514 million, as well as Carty’s operating costs, at such time that the plant is placed in service, provided that occurred by July 31, 2016. As Carty was placed in service on July 29, 2016, the Company has been authorized to include in customer prices, effective August 1, 2016, the revenue requirement necessary to allow for recovery of capital costs of up to $514 million, as well as Carty’s operating costs. See Note 7, Contingencies, for further information regarding Carty. Capital Lease—PGE has entered into agreements to purchase natural gas transportation capacity to serve Carty via a 24-mile natural gas pipeline, Carty Lateral, that was constructed to serve the Carty facility. The Company has entered into a 30-year agreement to purchase the entire capacity of Carty Lateral, which is approximately 175,000 decatherms per day. At the end of the initial contract term, the Company has the option to renew the agreement in continuous three-year increments with at least 24-months prior written notice. For accounting purposes, this transportation capacity agreement is treated as a capital lease. As of September 30, 2016, a capital lease asset of $57 million was reflected within Electric utility plant, and accumulated amortization of such assets of $2 million reflected within Accumulated depreciation and amortization in the table above. The present value of the future minimum lease payments due under the agreement included $3 million within Accrued expenses and other current liabilities and $52 million in Other noncurrent liabilities on the condensed consolidated balance sheets. For ratemaking purposes capital leases are treated as operating leases; therefore, in accordance with the accounting rules for regulated operations, the amortization of the leased asset is based on the rental payments recovered from customers. Also for ratemaking purposes, such rental payments were capitalized to the Carty project prior to its in service date of July 29, 2016 and, as a result, amortization of the leased asset of $2 million and interest expense of $3 million was capitalized to CWIP. Beginning August 1, 2016, amortization of the leased asset of $1 million and interest expense of $1 million has been recorded to Purchased power and fuel expense in the condensed consolidated statements of income through September 30, 2016. For the remainder of 2016, PGE expects $2 million in minimum lease payments, with $1 million of imputed interest and present value of net minimum lease payments of $1 million. As of September 30, 2016, PGE’s estimated future minimum lease payments, for the following five years and thereafter, net of administrative costs such as property taxes, insurance and maintenance are as follows (in millions):
| Payments Due
| 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | Thereafter |  | Total
Total minimum lease payments | $ | 7 |  |  | $ | 6 |  |  | $ | 6 |  |  | $ | 6 |  |  | $ | 6 |  |  | $ | 78 |  |  | $ | 109 |
Less imputed interest |  |  |  |  |  |  |  |  |  |  |  |  | 55 |
Present value of net minimum lease payments |  |  |  |  |  |  |  |  |  |  |  |  | $ | 54 |
Regulatory Assets and Liabilities Regulatory assets and liabilities consist of the following (in millions):
| September 30, 2016 |  | December 31, 2015
| Current |  | Noncurrent |  | Current |  | Noncurrent
Regulatory assets: |  |  |  |  |  |  |
Price risk management | $ | 61 |  |  | $ | 161 |  |  | $ | 120 |  |  | $ | 161 |
Pension and other postretirement plans | — |  |  | 228 |  |  | — |  |  | 239 |
Deferred income taxes | — |  |  | 80 |  |  | — |  |  | 86 |
Debt issuance costs | — |  |  | 23 |  |  | — |  |  | 16 |
Other | 4 |  |  | 23 |  |  | 9 |  |  | 22 |
Total regulatory assets | $ | 65 |  |  | $ | 515 |  |  | $ | 129 |  |  | $ | 524 |
Regulatory liabilities: |  |  |  |  |  |  |
Asset retirement removal costs | $ | — |  |  | $ | 872 |  |  | $ | — |  |  | $ | 837 |
Trojan decommissioning activities | 24 |  |  | 4 |  |  | 17 |  |  | 15 |
Asset retirement obligations | — |  |  | 48 |  |  | — |  |  | 45 |
Other | 25 |  |  | 34 |  |  | 38 |  |  | 31 |
Total regulatory liabilities | $ | 49 |  | * | $ | 958 |  |  | $ | 55 |  | * | $ | 928 |
* | 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, 2016 |  | December 31, 2015
Regulatory liabilities—current | $ | 49 |  |  | $ | 55 |
Accrued employee compensation and benefits | 45 |  |  | 51 |
Accrued interest payable | 40 |  |  | 25 |
Accrued dividends payable | 29 |  |  | 28 |
Accrued taxes payable | 43 |  |  | 25 |
Other | 64 |  |  | 75 |
Total accrued expenses and other current liabilities | $ | 270 |  |  | $ | 259 |
Credit Facilities As of September 30, 2016, PGE had a $500 million revolving credit facility scheduled to expire in November 2019. Pursuant to the terms of the agreement, the revolving credit facility may be used for general corporate purposes, 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 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 September 30, 2016, PGE was in compliance with this covenant with a 51.0% debt-to-total capital ratio. 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. PGE classifies any borrowings under the revolving credit facility and outstanding commercial paper as Short-term debt on the condensed consolidated balance sheets. Under the revolving credit facility, as of September 30, 2016, PGE had no borrowings, commercial paper, or letters of credit issued. As of September 30, 2016, the aggregate unused available credit capacity under the revolving credit facility was $500 million. In addition, PGE has four letter of credit facilities that provide a total of $160 million capacity 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 four facilities, $73 million of letters of credit were outstanding as of September 30, 2016. Letters of credit issued are not reflected on the Company’s condensed consolidated balance sheets. 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 6, 2018. Long-term Debt In May 2016, PGE entered into an unsecured credit agreement with certain financial institutions, under which the Company may obtain three separate term loans in an aggregate principal amount of up to $200 million by October 31, 2016. PGE has obtained the following two term loans:
• | $50 million on May 4, 2016; and
• | $75 million on June 15, 2016.
The Company has given notice to the financial institutions that it intends to obtain the third term loan in the amount of $25 million on October 31, 2016. The term loan interest rates are set at the beginning of the interest period for periods of 1-month, 3-months or 6-months, as selected by PGE and are based on the London Interbank Offered Rate (LIBOR) plus 63 basis points, approximately 1.2% as of September 30, 2016, with no other fees. The credit agreement expires November 30, 2017, at which time any amounts outstanding under the term loans become due and payable. Upon the occurrence of certain events of default, the Company’s obligations under the credit agreement may be accelerated. Such events of default include payment defaults to lenders under the credit agreement, covenant defaults and other customary defaults for financings of this type. During the nine months ended September 30, 2016, PGE had the following First Mortgage Bonds (FMBs) long-term debt transactions, all of which occurred in early January 2016:
• | Issued $140 million of 2.51% Series FMBs due in 2021;
• | Repaid $75 million of 5.80% Series FMBs, due in 2018; and
• | Repaid $58 million of 3.81% Series FMBs, due in 2017.
Due to the anticipated repayment of the $133 million in early January 2016, this amount of long-term debt was classified as current on the Company’s condensed consolidated balance sheets as of December 31, 2015. Defined Benefit Pension 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,
| 2016 |  | 2015 |  | 2016 |  | 2015
Service cost | $ | 4 |  |  | $ | 4 |  |  | $ | 12 |  |  | $ | 13 |
Interest cost | 9 |  |  | 8 |  |  | 25 |  |  | 24 |
Expected return on plan assets | (10 | ) |  | (10 | ) |  | (30 | ) |  | (30 | )
Amortization of net actuarial loss | 3 |  |  | 5 |  |  | 11 |  |  | 15 |
Net periodic benefit cost | $ | 6 |  |  | $ | 7 |  |  | $ | 18 |  |  | $ | 22 |

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