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Balance Sheet Components (Notes) | 9 Months Ended
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Sep. 30, 2023
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, which includes natural gas, coal, and oil, for use in the Company’s generating plants. Periodically, PGE assesses whether inventories are recorded at the lower of average cost or net realizable value. Accounts Receivable, Net Accounts receivable, net includes $110 million and $131 million of unbilled revenues as of September 30, 2023 and December 31, 2022, respectively. Accounts receivable, net includes an allowance for credit losses of $12 million as of both September 30, 2023 and December 31, 2022. The following summarizes activity in the allowance for credit losses (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2023
Balance as of beginning of period | $ | 13 |  |  | $ | 12 |
Increase in provision | 2 |  |  | 6 |
Amounts written off | (4) |  |  | (10) |
Recoveries | 1 |  |  | 4 |
Balance as of end of period | $ | 12 |  |  | $ | 12 |
Other Current Assets Other current assets consist of the following (in millions):
| September 30, 2023 |  | December 31, 2022
Prepaid expenses | $ | 45 |  |  | $ | 69 |
Assets from price risk management activities | 74 |  |  | 313 |
Margin deposits | 30 |  |  | 116 |
Other current assets | $ | 149 |  |  | $ | 498 |
Assets from price risk management activities and related unrealized gains as well as Margin deposits decreased during the nine months ended September 30, 2023 due to decreases in wholesale natural gas and electricity prices. For further information, see Note 5, Risk Management. Electric Utility Plant, Net Electric utility plant, net consists of the following (in millions):
| September 30, 2023 |  | December 31, 2022
Electric utility plant in-service | $ | 13,045 |  |  | $ | 12,421 |
Construction work-in-progress | 709 |  |  | 467 |
Total cost | 13,754 |  |  | 12,888 |
Less: accumulated depreciation and amortization | (4,676) |  |  | (4,423) |
Electric utility plant, net | $ | 9,078 |  |  | $ | 8,465 |
Accumulated depreciation and amortization in the table above includes accumulated amortization related to intangible assets of $541 million and $499 million as of September 30, 2023 and December 31, 2022, respectively. Amortization expense related to intangible assets was $16 million and $15 million for the three months ended September 30, 2023 and 2022, respectively, and $45 million and $44 million for the nine months ended September 30, 2023 and 2022, respectively. The Company’s intangible assets primarily consist of computer software development and hydro licensing costs. Battery storage agreement—On April 26, 2023, PGE entered into a battery storage purchased power agreement (PPA) that will be accounted for as a lease upon commencement. The lease is expected to commence in December 2024 and has a term of 20 years. The total fixed contract consideration is expected to be $737 million over the lease term. Regulatory Assets and Liabilities Regulatory assets and liabilities consist of the following (in millions):
| September 30, 2023 |  | December 31, 2022
| Current |  | Noncurrent |  | Current |  | Noncurrent
Regulatory assets: |  |  |  |  |  |  |
Price risk management | $ | — |  |  | $ | 96 |  |  | $ | — |  |  | $ | 1 |
Pension and other postretirement plans | — |  |  | 95 |  |  | — |  |  | 95 |
Debt issuance costs | — |  |  | 20 |  |  | — |  |  | 21 |
Trojan decommissioning activities | — |  |  | 137 |  |  | — |  |  | 133 |
February 2021 ice storm and damage | 12 |  |  | 57 |  |  | 10 |  |  | 64 |
Power cost adjustment mechanism | 16 |  |  | 3 |  |  | 14 |  |  | 14 |
2020 Labor Day wildfire | 5 |  |  | 24 |  |  | 4 |  |  | 27 |
COVID-19 | 12 |  |  | 4 |  |  | — |  |  | 22 |
Wildfire mitigation | — |  |  | 31 |  |  | — |  |  | 28 |
Other | 10 |  |  | 79 |  |  | 26 |  |  | 68 |
Total regulatory assets | $ | 55 |  |  | $ | 546 |  |  | $ | 54 |  |  | $ | 473 |
Regulatory liabilities: |  |  |  |  |  |  |
Asset retirement removal costs | $ | — |  |  | $ | 1,164 |  |  | $ | — |  |  | $ | 1,136 |
Deferred income taxes | — |  |  | 183 |  |  | — |  |  | 194 |
Asset retirement obligations | — |  |  | 10 |  |  | — |  |  | 7 |
Price risk management | 1 |  |  | — |  |  | 195 |  |  | — |
Boardman Refund | 3 |  |  | 3 |  |  | — |  |  | — |
Other | 29 |  |  | 58 |  |  | 39 |  |  | 52 |
Total regulatory liabilities | $ | 33 |  | * | $ | 1,418 |  |  | $ | 234 |  | * | $ | 1,389 |
* Included in Accrued expenses and other current liabilities in the condensed consolidated balance sheets. Wildfire Mitigation represents incremental costs and investments made by PGE under Oregon Senate Bill (SB) 762, which was passed in the 2021 legislative session with an effective date of July 19, 2021. SB 762 instructs public utilities to develop, implement, and execute a wildfire protection plan, in which reasonable costs can be recovered through prices to all customers. The outcome of PGE’s 2022 GRC provided an annual amount of $24 million to be collected in base rates for recovery of operating expenses related to wildfire mitigation efforts beginning May 9, 2022. As of September 30, 2023 and December 31, 2022, PGE’s deferred balance related to incremental wildfire mitigation operating expenses was $31 million and $28 million, respectively. On July 1, 2022, PGE filed an application for reauthorization of OPUC Docket UM 2019 to defer incremental wildfire mitigation costs that exceed the amount granted in base rates. On May 10, 2023, in Order No. 23-173, the OPUC approved an automatic adjustment clause mechanism to recover wildfire mitigation costs (capital and expense). PGE and certain parties agreed to a stipulation, which was adopted by the OPUC on October 18, 2023, that allows PGE to begin amortizing $27 million comprised of $23 million related to the September 30, 2023 deferred operating expense balance of $31 million and $4 million for capital related revenue requirement. The $27 million will be amortized over a one-year period beginning October 20, 2023. PGE will recover the remaining deferred expense balance in future periods to be determined in a later proceeding. Beginning January 1, 2024, and in conjunction with the Company’s current GRC proceeding, PGE will remove collections related to wildfire mitigation costs (for both capital and operating expense) from base prices and include the forecasted costs within the automatic adjustment clause. Differences between actual and forecasted costs will be recorded as regulatory assets or liabilities within the automatic adjustment clause balancing account, which will not be subject to an earnings test. COVID-19—The COVID-19 pandemic led Oregon’s Governor to declare a state of emergency on March 8, 2020. Due to the adverse impacts of COVID-19 on economic activity, PGE experienced an increase in bad debt expense, lost revenue, and other incremental costs. In March 2020, PGE filed an application with the OPUC for deferral of lost revenue and certain incremental costs, such as bad debt expense, related to COVID-19. PGE’s deferral application was approved by the OPUC in October 2020 with final stipulations approved in November 2020. As of September 30, 2023 and December 31, 2022, PGE’s deferred balance, net of amortization, was $16 million and $22 million, respectively, comprised primarily of bad debt expense in excess of what is currently considered and collected in customer prices. PGE filed a request for amortization of deferred amounts in December 2022, which reflected a $12 million adjustment primarily related to bad debt write-offs being lower than estimated. During a March 14, 2023 public meeting, Staff recommended the OPUC approve PGE's filing of Advice No. 22-45 associated with the recovery of the COVID-19 deferral. On March 21, 2023, Advice No. 22-45 was approved by the OPUC, allowing for amortization of deferred amounts over a two-year period, which began April 1, 2023. Deferral of Boardman revenue requirement—In 2020, intervenors filed a deferral application with the OPUC that would have required PGE to defer and refund the revenue requirement associated with the Company’s Boardman coal-fired generating plant (Boardman) then included in customer prices as established in the Company’s 2019 GRC. The OPUC found that the deferral was warranted with amortization subject to an earnings test. Subsequently, PGE and parties submitted stipulations to the OPUC reflecting agreements that resolved all matters related to this deferral and stated that PGE would refund $6.5 million to customers. On June 5, 2023, the OPUC issued Order 23-195, which approved the stipulations. The refund amount, plus interest, is being amortized into customer prices over a two-year period that began July 1, 2023. Establishing the Boardman refund deferral resulted in an increase to regulatory liabilities with an offsetting charge to the condensed consolidated statements of income during 2023. As of September 30, 2023, the liability balance was $6 million. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in millions):
| September 30, 2023 |  | December 31, 2022
Accrued employee compensation and benefits | $ | 74 |  |  | $ | 66 |
Accrued taxes payable | 50 |  |  | 29 |
Accrued interest payable | 47 |  |  | 31 |
Accrued dividends payable | 50 |  |  | 42 |
Regulatory liabilities—current | 33 |  |  | 234 |
Margin deposits from wholesale counterparties | 7 |  |  | 140 |
Other | 95 |  |  | 99 |
Total accrued expenses and other current liabilities | $ | 356 |  |  | $ | 641 |
The current portion of Regulatory liabilities and Margin deposits from wholesale counterparties decreased during the nine months ended September 30, 2023 due to decreases in wholesale natural gas and electricity prices. For further information, see Note 5, Risk Management. Credit Facilities On August 18, 2023, PGE entered into an amendment of its existing revolving credit facility. As of September 30, 2023, PGE had a $750 million revolving credit facility scheduled to expire in September 2028. The Company has the ability to expand the revolving credit facility to $850 million, if needed, subject to the requirements of the agreement. 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, 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 the Company’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, 2023, PGE was in compliance with this covenant with a 54.3% debt-to-total capital ratio and had no outstanding balance on the revolving credit facility. As a result of the policy to backup commercial paper borrowings, the aggregate unused available credit capacity under the credit facility was $750 million. In addition, the credit facility offers the potential for adjustments to interest rate margins and fees based on PGE’s achievement of certain annual sustainability-linked metrics related to its non-emitting generation capacity and the percentage of management comprised of women and employees who identify as black, indigenous, and people of color. The Company believes these potential adjustments will have an immaterial impact on PGE’s results of operations. 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 in order to allow for coverage of any potential need to repay commercial paper that may be outstanding at the time. As of September 30, 2023, PGE had no 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 three 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 $92 million were outstanding as of September 30, 2023. Letters of credit issued are not reflected on the Company’s condensed consolidated balance sheets. Pursuant to an order issued by the FERC, the Company is authorized to issue short-term debt in an aggregate amount of up to $900 million through February 6, 2024. Long-term Debt On August 29, 2023, PGE entered into a Bond Purchase Agreement related to the sale of $500 million in First Mortgage Bonds (FMBs), the bonds consist of: •a series, due in 2030, in the amount of $50 million that bear interest at an annual rate of 5.44%; •a series, due in 2033, in the amount of $150 million that bear interest at an annual rate of 5.48%; •a series, due in 2038, in the amount of $100 million that bear interest at an annual rate of 5.68%; •a series due in 2053, in the amount of $100 million that bear interest at an annual rate of 5.78%; and •a series due in 2059, in the amount of $100 million that bear interest at an annual rate of 5.83%. As of September 30, 2023, the 2030, 2033, and 2038 series, totaling $300 million, were issued and funded in full. The 2053 and 2059 series, totaling $200 million, are expected to be funded in November 2023. On October 21, 2022, PGE obtained a 366-day term loan from lenders in the aggregate principal of $260 million under a 366-Day Bridge Credit Agreement. The term loan bore interest for the relevant interest period at the Term Secured Overnight Financing Rate (SOFR) plus Term SOFR Adjustment Rate of 10 basis points and applicable margin of 87.5 basis points. The interest rate was subject to adjustment pursuant to the terms of the loan. On March 1, 2023, this term loan was repaid in full with proceeds from the Equity Forward Sale Agreement described in Note 7, Shareholders’ Equity. On November 30, 2022, PGE entered into a Bond Purchase Agreement related to the sale of $200 million in First Mortgage Bonds (FMBs), the first half of which funded in 2022 and the remaining $100 million funded in full on January 13, 2023. 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,
| 2023 |  | 2022 |  | 2023 |  | 2022
Service cost | $ | 3 |  |  | $ | 4 |  |  | $ | 9 |  |  | $ | 12 |
Interest cost* | 9 |  |  | 7 |  |  | 27 |  |  | 21 |
Expected return on plan assets* | (11) |  |  | (12) |  |  | (33) |  |  | (36) |
Amortization of net actuarial loss* | — |  |  | 4 |  |  | — |  |  | 12 |
Net periodic benefit cost | $ | 1 |  |  | $ | 3 |  |  | $ | 3 |  |  | $ | 9 |
* The net expense portion of non-service cost components are included in Miscellaneous income, net within Other income on the Company’s condensed consolidated statements of income and comprehensive income. PGE sponsors a health and welfare plan, under which it offers medical and life insurance benefits, as well as health reimbursement arrangements. Retirees who participate in the Company’s postretirement health insurance plans are eligible for a Defined Dollar Medical Benefit, which limits PGE’s obligation pursuant to the postretirement health plan by establishing a maximum benefit per employee with employees responsible for the additional cost. In the third quarter of 2022, PGE executed a buyout of the Non-represented Retiree Medical Plan, resulting in an $11 million settlement gain, which has been recorded in Miscellaneous income, net on the condensed consolidated statement of income and comprehensive income.

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