Portland General Electric Reports Net Income Of $24 Million In Q1 2009

Revenues increased in the first quarter of 2009 as the General Rate Case order went into effect at the beginning of the year. However, these increases were substantially offset by a reduction in energy sales, higher power costs, and increases in other operating expenses. Adjustments related to Senate Bill 408 (SB 408) and a smaller decline in the fair market value of non-qualified benefit plan trust assets contributed to the increase in net income in the first quarter of 2009 compared to the first quarter of 2008.

First Quarter 2009 Highlights:

Total retail customers increased by around 0.5% from 810,197 at the end of 2008 to 814,058 at the end of the first quarter of 2009.

Total retail energy deliveries decreased by 1.3% on a weather adjusted basis in the first quarter of 2009 compared to the first quarter of 2008.

Prices increased around 5.6% pursuant to the General Rate Case order that went into effect on January 1, 2009 and other price adjustments, including a reduction to reflect less-than-anticipated power costs in 2007.

The Oregon Public Utility Commission approved a decoupling mechanism for a two-year trial period effective February 1, 2009.

Completed systems acceptance testing phase of the smart meter project in March 2009 and began full deployment of 850,000 smart meters in April. Installation is expected to be completed by year-end 2010.

Construction of Phases II and III of the Biglow Canyon Wind Farm continued on track in the first quarter of 2009. Phases II and III are expected to be completed by the end of 2009 and 2010, respectively.

Issued 12.5 million shares of common stock in March 2009 for net proceeds of $170 million.

$130 million in First Mortgage Bonds (FMBs) were issued in January 2009. Also, $300 million in FMBs were issued in April 2009, in part to refinance around $142 million in Pollution Control Bonds.

2009 Earnings Guidance:

Portland General Electric is reaffirming full-year 2009 earnings guidance within the previously disclosed range of $1.80 to $1.90 per diluted share. Portland General Electric is also reaffirming its long-term annual earnings growth expectation of 6 to 8% beginning with 2009.

Liquidity:

Portland General Electric has two unsecured revolving credit facilities with two separate groups of banks and an aggregate borrowing capacity of $495 million. As of March 31, 2009, the company had an aggregate remaining borrowing capacity of $272 million available under the two credit facilities and a cash balance of $47 million. As of April 30, 2009, the aggregate borrowing capacity was $279 million. Portland General Electric posts or receives margin deposits related to power and natural gas contracts. These contracts are used to meet load requirements and are reflected in customer prices. As of March 31, 2009, Portland General Electric had posted margin deposits of $409 million, consisting of $205 million in cash and $204 million in letters of credit.

Capital Expenditures:

Capital expenditures in 2009 are estimated to be $723 million. The majority of these expenditures in 2009 are related to Phases II ($230 million) and III ($176 million) of the Biglow Canyon Wind Farm and ongoing expenditures for production, transmission and distribution ($226 million).

Capital expenditures in 2010 are estimated to be $522 million. The majority of these expenditures are for Phase III of the Biglow Canyon Wind Farm ($201 million) and ongoing expenditures for production, transmission and distribution ($223 million).

Financing Plans:

To fund a portion of the capital expenditures, Portland General Electric issued $130 million of First Mortgage Bonds in January 2009. The company also issued $300 million in FMBs in April 2009, in part to refinance $142 million of Pollution Control Bonds and to fund capital expenditures related to Biglow Canyon Phase II and smart meters. In addition to the debt issuances, Portland General Electric issued 12.5 million shares of common stock for net proceeds of $170 million. Under Portland General Electric’s current capital expenditure program the company anticipates issuing around $375 million of debt through 2010, part of which will be used to refinance around $186 million in debt maturities in 2010.

First Quarter 2009 Summary:

Higher revenues in the first quarter of 2009 compared to first quarter 2008 were offset by a reduction in energy sales, higher power costs and increases in other operating expenses.

Other items impacting comparative results are as follows:

First Quarter 2009:

$1.6 million after-tax loss or $0.02 per diluted share from a decline in the fair market value of non-qualified benefit plan trust assets.

Around $1 million after-tax loss or $0.01 per diluted share from additional costs related to the December 2008 storm.

First Quarter 2008:

$2.5 million after-tax loss or $0.04 per diluted share from a decline in the fair market value of non-qualified benefit plan trust assets.

$1.2 million after-tax loss or $0.02 per diluted share from refunds to customers related to SB 408.

We made progress with major capital projects during the first quarter, said Jim Piro, president and chief executive officer of Portland General Electric. We’ve officially started the rollout of our new smart meter project system-wide, and construction of our Biglow Canyon Wind Farm Phases II and III are on schedule. These projects reflect a strong alignment with the priorities our customers place on energy efficiency and green power – priorities that are confirmed by the fact that, for the fourth year in a row, we sold more renewable energy to residential customers than any other utility in the United States.