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PORTLAND GENERAL ELECTRIC : OR/ : Other Events (form 8-K)

08/31/2015 | 06:02am US/Eastern
Item 8.01  Other Events
General Rate Case - In February 2015, Portland General Electric Company (PGE or
"the Company") filed with the Public Utility Commission of Oregon (OPUC) a
general rate case based on a 2016 test year (2016 GRC, or "the case") and
included costs related to the Carty Generating Station (Carty), which is
currently under construction. PGE's initial filing proposed a $66 million
increase in annual revenues, representing an approximate 3.7% increase in
overall customer prices and included:

• A capital structure of 50% debt and 50% equity;

• A return on equity of 9.9%;

• A cost of capital of 7.67%; and

• An average rate base of $4.5 billion.

PGE, OPUC Staff, and certain customer groups have now reached agreements that resolve all issues in the case.


In June, a partial stipulation was filed covering agreements reached on a
variety of issues in the proceeding, including, with certain conditions, cost
recovery of Carty. In addition, PGE updated 2016 power cost estimates and its
load forecast, resulting in an adjusted revenue increase of $41 million as of
July 15, 2015, a $25 million reduction to the originally filed increase of $66
million.

On August 28, 2015, supporting testimony was filed that reflects the impact of
an additional stipulation reached by the parties, settling all remaining issues
in the case. As revised, the expected net increase in annual revenue
requirements of $18 million represents an increase of approximately 1% in
overall customer prices and reflects:

• A capital structure of 50% debt and 50% equity;

• A return on equity of 9.6%, down from the current authorized rate of 9.68%;

• A cost of capital of 7.52%, which will be updated for any new long-term

debt issuances priced no later than November 1, 2015; and

• An average rate base of $4.4 billion.

The net increase in annual revenue requirement as proposed in the Company's initial filing and as revised consists of the following (in millions):

                                                           Stipulations and       August 2015
                                                            Updates through     Stipulations and
                              As Filed February 12, 2015     July 15, 2015          Updates           As Revised August 28, 2015
Carty                        $                  83         $             2   $                 (2 ) $                    83
Base business cost*                             39                     (21 )                  (28 ) $                   (10 )
Supplemental tariff updates                    (56 )                    (6 )                    7   $                   (55 )
   Annual revenue
requirement, net             $                  66         $           (25 ) $                (23 ) $                    18





* The July reduction in base business revenue requirement includes various
Operating and Maintenance and other cost adjustments ($11 million), lower net
variable power cost (NVPC) ($7 million), and the Grassland switchyard moved from
base business to Carty ($3 million). The August reduction in base business
revenue requirement consists primarily of a lower return on equity than
requested ($10 million), lower NVPC ($10 million), miscellaneous reductions ($4
million), and settlement on cost of capital and all other issues in the filing
($4 million).


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The net annual revenue requirement increase of $18 million, or 1%, will be
effective in two phases. A $37 million decrease, representing a 2.1% decrease in
customer prices, will be effective January 1, 2016. The decrease will consist of
a reduction in base business costs of $10 million and a decrease of $27 million
related to the amortization and recognition of certain customer credits through
supplemental tariffs. A $55 million annualized increase, representing a customer
price increase of 3.1%, will be effective when Carty becomes operational,
subject to the site becoming operational by July 31, 2016. The increase will
consist of an $83 million annualized increase related to the cost recovery of
Carty and a $28 million annualized decrease related to the amortization of
certain customer credits through supplemental tariffs.

Updates to the load forecast, to be finalized in October 2015; power costs, to
be finalized in November 2015; and actual cost of debt, including any new
issuances priced no later than November 1, 2015, may further change the amounts
shown in the table above. Regulatory review of the 2016 GRC will continue, with
a final order expected to be issued by the OPUC by December 2015. All the
stipulations remain subject to OPUC approval.

The 2016 GRC filing (OPUC Docket UE 294), as well as copies of direct testimony,
exhibits and stipulations discussed above, are expected to be made available on
the OPUC Internet website at www.oregon.gov/puc.




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© Edgar Online, source Glimpses

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