ML20049A551

Annual Financial Rept 1980

ML20049A551
Person / Time
Site:	Trojan File:Portland General Electric icon.png
Issue date:	03/31/1981
From:	PORTLAND GENERAL ELECTRIC CO.
To:
Shared Package
ML20049A550	List: ML20049A549 ML20049A551 ML20049A552 ML20049A555
References
NUDOCS 8105270389
Download: ML20049A551 (44)

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-HIG H LIG HT S -

%Incmase 1980 1979 (Decrease)

Operating revenues

$ 490,237,000

$ 349,981,000 40.1 Netincome..

$ 86,200,000

$ 46,122,000 86.9 Income available forcommon stock 72,593,000

$ 32,292,000 124.8 Earnings per average common share.

$2.03

$1.06 91.5 Dividends paid per common share..................

$1.70

$1.70 Net utility plant.,

$1,842,207,000

$1,658,797,000 11.1 Gross utility construction expenditures...

$ 292,833,000

$ 254,289,000 15.2 Kilowatt-hours sold (in thousands) to ultimate customers.

12,832,000 13,139,000 (2.3)

Customers served at year end 490,375 478,971 2.4 Average kilowatt-hour use per residential customer......

12,910 13,814 (6.5)

TABLE OF CONTENTS Highlights 1

Report to Stockholdem 2-3 Growth and Conservation 4-5 Powerand FuelSupply 6

I Construction 7-9 Rates and the Regional Power Act 10-11 Public, Political and Legal Activities 12-13 Financial Review 14-15 R: search and the Future 16 Chairman's Comment 18 Selected Financial Data 19 Management's Discussion and Analysis of Financial Condition 19-20 Consolidated Statements ofIncome and Retained Earnings 21 Consolidated Balance Sheets 22-23

[

Consolidated Statements of Capitalization 24 j

Consolidated Statements of Changes in Financial Position 25 V

Notes to Financial Statements 26-33 Notice of AnnualMeeting Report ofIndependent Public Accountants 33 Supplementary Information to Disclose Effects of Changing Prices 34-35 The annualmeeting of Elev n-YearSummary 36-37 stockholdem willbe held at Market and Dividend Information 38 the Portland GeneralElectric Quarterly Comparison for 1980 and 1979 38 Company Service Center, Service Ama Map 39 3700 S.E.17th Avenue, Port-Senior Officers and Board of Directors 40 land, Ongon, May 20,1981, at Frameable Photograph of Mount St. Helens Inside Back Cover 2:00 p.m.

Good THINGS A R E H A P P E NIN G AT PGE i

1

REPORT?T STOCKHOLDERS:

m n

1980 was e good y:ar f:r The addition of the Boardman Trojan control room repairs your Company.We made substan-plant gives us some surplus power being made. Trojan shut down tial gains in severalimportant capacity at times. Effective Novem-April 11,1980 forits scheduled areas. Both revenues and earnings ber 1,1980 a Sales and Exchange refueling and maintenance and re-were up. Our power supply im.

Agreement was made with Pacific mained down untilJuly16 so that proved. IIelpful rate increases went Gas & Electric Company (PG &Elin certain wall deficiencies in the aux-into effect. A major organizational which it agrees to purchase surplus iliary building could be repaimd as malignment in the Company was energy at a price of 3.7 cents per approved by the Nuclear Regula-implemented.The Regional Power kwh, subject to escalation reflecting tory Commission.The Atomic Act was signed into law and local increases in cost of coal delivered to Safety and Licensing Board hear-government power takeover efforts Boardman. The current target de-ings on the contml buildingwalls were soundly defeated. It was a livery rate is 300 average mega-concluded July 11 with a ruling that year of progmss, listening, adapting watts.This sale is of benefit to our the proposed modifications were and change. We believe this turn-customers and our stockholders. As adequate and could be performed around will continue in the year further pmtection,in the event of safely. Construction is well under-ahead.There is much left to ac-an unanticipated'IYojan outage way and we are working towards complish. But we have upward which extends longer than a week, completion during our next sched-momentum and an improved base PG&E is obligated to begin return uled refueling and maintenance on which to build.

of energy received from our Com-outage beginning in May 1981.

Our earnings increased to pany during the preceding six Other nuclear projects are

$2.03 per average common share.

months.This backup power source experiencing delays.The Pebble This is up from $1.06 in 1979. We is reassurmg.

Springs project which the Company consider this a partial recovery to With Boardman and 'lYojan sponsors and in which it has a 47.1 the levels obtained in the 1974-76 operaug well, and warmerweath-percent intemst, suffered an addi-time period where earnings aver-er and excellent hydro conditions tionalsetback in the November aged about $2.30 per average com-during the last part of the year, we 1980 election. Oregon voters passed mon share. Revenues incmased 40 did not requim much combustion a measure which prohibits the percent, reaching $490 million as turbine operation in 1980.

siting of a nuclear plant in the state compamd with the previous year's Rate relief was granted.The untilthe Federalgovernment has

$350 million.There were several permanent power cost adjustment, licensed a permanent disposal facil-important factors which contrib-which started in November 1979 ity for spent nuclear fuel and high-uted to this improvement.

to meet a portion of majorvariable level radioactive waste. It also The'IYojan nuclear plant had power costs, provided assistance requims statewide voter approval an outstanding performance record during the year.This, along with the before a site certificate is issued.

during the year, contributing more January 1980 increase of17.7 per.

The development of the Pebble than six billion kilowatt hours to cent, the permanent 3.2 percent Springs site and the related equip-the region's power needs, and pro-passthrough increase granted in ment investment was a prudent in-viding PGE customers nearly 30 July because of the Bonneville vestment done in good faith with percent of their electricity.

Power Administration wholesale fullknowledge of state and federal The 530,000 kilowatt increase, and the August increase of regulatory bodies.We have $129 Boardman coal plant was 19.6 percent when the Company's millioninvested as of December completed on time and within Boardman coal plant became opera.

1980.We will make every effort to budget.This is a construction tional were,in part, the reasons for work toward a solution with mgula-achievement almost unheard ofin the 1980 revenue improvements, tory officials as the project's future these inflationary times. Its addi-Additional rate relief has is determined. It is a major challenge for 1981.

tion puts your Company in one of been requested. On January 29, the best power supply situations 1981, the Company filed a tariff for a Application was made to for the next five years of any private 4.4 percent rate incmase in all retail move the Skagit nuclear project utility in the region. It cost $530 rates, which became effective on to Hanford. This will defer con-million and was declared opera-March 1.The Public Utility Com-struction at least two to three years.

tional on August 3,1980. The coop-missioner of Oregon has mtained an The project sponsor,Puget Sound cration and effort of many PGE independent accounting firm to re-Power & Light Company, and its employees, contractors and work-view the rates and financial posi-partners, made the decision to ers, and the people in the com-tion of the Company and another move from Skagit County, Washing-munities surrounding the site made Omgon electric utility.This myiew ton becauseit believes Hanford this seeminglyimpossible task a is to be completed by April 1,1981.

offers fewerlicensing risks and reality. It was an outstanding We expect the review willindicate uncertainties. We share that example of teamwork.

that an additional rate incmase belief. PGE owns 30 percent of is warranted, and we plan to the twin 1288-megawatt project.

file tariffs for such anincrease promptly after the report is issued.

G o oD THINGS A R E HAPPENING AT PGE 2

I Congress passed the Pacific Frank Warren retires. After Many areas have been mor-Northwest Electric Power Plan-43 years of outstanding service and ganized for greater efficiency.We ning and Conservation Act.The leadership to the industry and the are altering policies where nec-Regional Power Act, as it is called, Company, Frank M. Warren, Chair-essary, to be more flexible and war signed into law in December.

man of the Board and Chief Execu-responsive to the needs of our The Company will get lower cost tive OfIicer, retired October 1.We stockholders, our customers, the blocks of firm energy from Bonne-will continue to have his counsel as communities we serve and our em-ville(BPA) to serve our residential a member of the Board of Directors.

ployees. We are doing a betterjob and farm customers. In addition,it Major organizational oflistening, and involving employ-will give federal dimction and fi-realignment was made.We have ces and the public in the decision-nancial assistance to conservation formed a Management Committee making process. And we are taking efforts,will aid in the development which has given us exceptional ex-positive steps to develop programs of renewable and co-generation re-pertise in all key areas.The senior to assist and communicate better sources and will enable BPA to pur-officers who make up this team will with our employees, who am the chase the output of new generating be featured in subsequent pages of important ingredient which make facilities built by a utility to meet this report, the gains we have talked about its own load gmwth and to redis-As has been reported to you, possible.

tribute the power from its pooled 1980 saw good things happen at PGE is moving in the right resources.When implemented, tlu,s PGE. We are working to make 1981 direction. We appreciate your con-should decrease rate disparity in better. A matter of high priority is fidence and continued support.

the region and will provide signifi-the dividend paid to our owners, the cantly lower cost construction holders of PGE common stock.We financing due to the guaranteed will make every effort to increase purchase. It will enable an orderly earnings to a level which willjus-development of conservation and tify an increase in the dividend power supply for the entire Pacific in 1981. We will reduce construction Northwest.

and operating expenditums to the The Act is a complex piece lowest level consistent with our re-oflegislation and will take the sponsibility to provide dependable balance of 1981 before we feel any electric service to our customers.

appreciable benefit. It no doubt will be 1983 before it is functioning smoothly. It holds much promise.

We supported its development and feelit can prove to be a positive r

2 -

q force in the years ahead.

/ ]

9 l !

We are pleased to report 3

'N that all12 PUD takeover measures p

jN were defeated in November. Six of i

j 4%

l ' l; 1

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'4 i

these were in counties served by the Company. More than 20,000 people 1J d

'.K :

I joined citizen committees against j

, f* """* Od N

C '"""~'

• the government takeover to point g

out the costs and concerns asso-ciated with newly formed people's h1 g

utility districts. We expect limited

{y{"

PUD efforts in 1981.

p An existing, but non-operatmg PUD in Columbia County received approval by the slim margin of 66 votes for $17 million in tax-secumd general obligation bonds with j

which they propose to take over the distribution of service to 6,000 of i

our customers. Several citizens took legal action challenging the validity of the election, but thejudge ruled Robert H. Short William J. Lindblad against them. If the cuizens decide Chairman of the Board President to pursue an appeal, the Company nd Chief Executive Officer would support their effort. Our h 4 4.

facilities are not for sale and con-j o.

> demnation proceedings in the g g gh courts will be required.

March 1981 Good THINGsARE HAPPENING AT PGE 3

\\

%""ZMiL"s"2"c

"'m%n".1,he

" Diversity is the watchword in Oregon.

? a?'n*a%'M.'22%n It attracts people, promotes growth, providesjobs the Company s Electncal Engineering.

9;':" 2

'=2?,'*

and softens the effect ofrecession periods.

h"M"%@ taw::s' e?'

.,ii The market is growing-it's a good MT:en72"a"ni' l

place to live."

the management team. Joe now has Dmsson opera tions. Power operations.

jf Securtty. and Environmental

,74 /

Services reporting to him.

.4 GROWTH- & CONSERV ATION 1980 census shotvs 26pement Electricheat and tvaterheating Efective conservation pmgrams population gmtvth in last decade.

remain top choixs.

paying offorcustomers.

Oregon's cham; is no longer a New msidential customer con-PGE customers am working at secret. More than 2.6 million people

, nections totaled 12,291 in 1980. This conservation and conservation is now live here. Perrentage-wise, next j is the fourth highest numberin the working for them. Surveys indicate to Alaska we had the fastest growth i Company's history but mfiecting the 86 percent of our msidential custom-rate over the past decade among the f highintemst ratesitwas nearly30 ers have taken conservation actions.

Pacific states.

l pertent below last year. Electric heat A majority indicate they would like We serve more than 40 pertent l was selected by 66 percent of these additionalinformation and help so of Omgon's population and our cus.

new customers and electric water they could do more.We will continue tomer count in those ten years has

! heating by over 80 percent.There has to pmvide assistance.

incmased 43 pertent.The move to the l been a downwant tmnd the past few In all, PGE residential, commer-Pacific Coast states will continue,

! years as natural gas supplies in-cial and industrial customers in 1980 Opportunity beckons. With lumber, cmase in the region and the public used 12.8 billion kilowatt hours of pulp and paper, and other wood

! perteives higher electric rates in the electricity Commercial and industrial pmducts representing 37 percent of future. Because of the need to use en-customers maintained their use at the state's employment, we obviously ergy wisely, the sensitivity of future 1979 levels while residential custom-felt the result of high intemst rates oil supply and the high cost of build-ers showed a significant decrease.

ing new genemtion, the Company, tomer consumed 12,910 kwh in 1980, but vacancy rates are low and them j continues to encourage conservation l In fact, our average residential cus-and the downturn in housing starts, is an unmet backlog of people who I and exercise load management a decrease of 904 kwh from the pre-will need new quarters when interest improvement.

vious year. The total reduction of res-rates return to a mom normallevel.

PGE's annualload gmwth rate idential customer usage in 1980 was We pride ourselves on a varied and

! between 1980 and 2000 is expected to 205 million kilowatt hours. The skilled labor force and a well bal-j be about 2.9 pertent.

warmer weather helped, but conser-anced and diversified industrial base.

vation was an important contributor.

Agriculture hits netvhigh

} in gmss income.

l l

l KlWWATTHOlmS M D;D I

Agn.cultum is an Oregon mam.-

mrA1.cusmunts S^us mcusmuets

! stay, and in 1980 it generated more

,I

$.",f,kj.

! than $1.7 billion in gross income, an maons; l the highest amount ever mached.

3-The Port of Portland is the gateway to the Pacific Rim countries and is

,h;i!;-

, the largest export port on the West jll' l Coast. Tourism contributed $1.1 billion i

l to the economy in 1980. In the last

! decade, non-agricultural employment 4

is up 47 pertent, with its manufactur-

ing component rising 21 pertent. Me-l dian annual household disposable income is estimated at over $17,000 i

. and estimated retail sales at $11.5 i billion.

L__ _

4

f

~

"We are concentrating on cost efective and innovativeprograms to help save energy Our customers are responding."

l average customer should save about 62.5 pervent ofour customers who 28,000electricallyheated homes 4,600 kwh annually, which should mspcnded hadinstalled or planned mspected.

resultin an annual savings of $182.

toinstall the restrictors.

'Ibtal electdcity saved annually by We project an annual savings Since PGE began its innovative those customers who weatherized is per household of480 kwh for those zeru-intemst weathedzation pmgram over 60.3 million kwh.These invest-who install the restrictors. They will in July 1978 we have had over ments m weatherization are permit-save about $18 per year. If only one-78,000 inquides msulting in more ted in the rate base.

third of PGE residential customers than 28,000in-home audits and There am 39 Company people who heatwaterelectdcally actually recommendations by PGE Energy working on customerweatheriza-install the restrictors, the total yearly Counselors.This program enables tion projects with an additional 25 electrical savings will still amount to electdc heat customers to install ap-contractor-supplied home inspectors.

52.8 million kwh. These reductions in pmved cost-effective weatherization PGE Home Energy Audits include a energyconsumption obviouslycause such as insulation, storm windows, free water heaterwrap and a lower-reduction in revenue. Revenue losses caulking,etc.with no payment re-ing of the water heater thermostat, if are a part of every rate requimment quurd until they sell the home.

the customer agrees.

application.

As of year-end,13,104 electric Other conservation activities heat customers have weatherized Over60,000 electricwater included continuation of the popular their homes with PGE's help.The av-heaters wmpped.

"How to with Pete" half-hourenergy erage amount invested in approved conservation television series for weatherization was $1,734.The same One of the most cost-effective do-it-yourselfers, energy counseling conservation activities for both the Programs forcommercial andindus-trial customers, conservation and al-5.".*AD. p". $'"7."D."O..'.

Company and its customers is the u.acc a2 6 rovia 4 ror. tor."'ada"*

wrapping ofelectric water heaters ternative energy resourte emphasis

^ g with a blanket of insulation and turn-at the'Irojan Visitors Infonnation Center, a Water Heater Incentive Pro-

- ing down heater thermostats.

gram providmg a $300 financial m, -

At year's end,60,208 water ntive for customers to install either heaters have been wrapped for an a solar domestic water heateror average expected customersavings water heater heat pump. In addition

$yg:

7, peryearof 590 kwh or a total dollar to regular conservation advertising F

g9' saving of $23. The electricity savings and billinserts, our customers have g

q,9 by these 60,208 conservation-minded requested 1.3 million pieces of do-it-ri g customers will amount to approxi-yourselfliterature since 1972, to help mately 35.5 milhon kwh peryear.

them with conservation projects.

o

&^

Showerjlowrestrictors mailed to RegionalP6werActpassage to aR residentialcustomers.

assistin conservation efort.

A new conservation program The Regional Power Act, signed that met with great success was the into lawin December,whenimple-mailmg m, September of two shower mented willgive federaldirection restrictor discs to each of our 433,527 and financial assistance to conserva-msidential customers. Installation is tion efforts in such critical amas as an easy do-it-yourselfjob which re-home weatherization, water heater duces the amount of hot water used.

wrapping, residential solar devel-Simple step-by-step mstructions opment and other electric energy-were provided with the mstrictors.

saving programs.BPA has a $1.2 Each mailmg mcluded a response billion bonding capacity for regional cani so the Company could evaluate conservation and alternate genera-the program. Results indicated that tion assistance.

j G0oD THINGS ARE HAPPENrNG AT PGE 5

o_

8 "PGE's power situation is one of the most favorable in the region. Ourfuel resources are varied andfirm."

POWER & FUEL SUPPLY The Company now enjoys a The Company has contracts ing emergencies, and offers a market diversified power resource base forfuel to cover'Rojan operations for, and a source of, surplus electnc-which includes hydroelectric, nuclear to 1987.

ity in either direction when available.

and coal for base load operations and Our30 percentownershipin The existing sales and exchange oil / natural gas combustion turbine Skagit,10 percent share of Washing.

agreement with PG&Ein California plants for peaking or emergency use.

ton Public Power Supply System Umt is a prime example ofhowthis helps In addition, PGE has finn contracts

1. 3 and 47.1 pertent share of the Peb.

the Company.

foroutside power purchases.

ble Springs project offer additional Partnershipin newcoal and nuclear nuclearresourtes as they develop.

plants (see chart on page 9), the City Coal: The completion of the of Portland's BullRun project,co-530-megawatt Boardman plantis generation development, increased making a significant contribution to conservation and alternate resourte our resources. Low-sulphur, sub-development such as solar assist will bituminous coalforBoardmanis help meet energy requuementslater supplied under a 20-yearcontract

1. 8Ec$mcy a

in the decade.

andis delivered by unit trams from m

Hydro and thermal facilities mines nearGillette, Wyoming, at a

%g under Bonneville Power Administra-present rate of 1.2 million tons a year.

ritoware nours tion contrul will also become an We also have a 2.5 percent ownership o

important new sourte offinn low-in the 1,312-megawatt Centralia plant cost power for our residential and which gives us 32 additional farm customers under the new megawatts. Ourinterestin the Regional Power Actlegislation.

Colstrip #3 and #4 units in Montana Hydroelectric: The Company's willgive us 260 megawatts at full si eight hydro facilities produced a total capacity when finished in 1984-85.

of 2.3 billion kilowatt hours during Combustion'ntrbine: The 534-the year and played an important megawatt Beavercombined cvele part in PGE's total generation. In ad-unit and the 116-megawatt simple

~

dition,long-term contracts with Mid-cycle Bethelunit provide a combined Columbia River public utility district 650-megawatt capacity when re-hydro projects t *sulted in the Com-quued. Both units now have the flex-um rcruydm a

pany receiving a total of 3.5 billion ibility to operate on natural gas or oil.

um pyo y,,

kilowatt hours of electricity.The A naturalgas pipeline was brought (PUD-Canadian long-terra Mid-Calumbia supply con-into Beaverin 1980 to allowlower tracts am in forte entil after the year cost interruptible gas to be used "NJ ?

2000. In 1980, PGEh hydro projects when available,instead ofoil. 'Ib-um coai plus the long-term contracts pm-gether the two plants provided less au comburrem_.

vided 36 perrent of cur power re-than one percent of PGE's energy

"""'""d quimments. In 1982 the City of requirements in 1980,but they am

" C i" b8'","g Portland's Bull Run hydn; electric important generation facilities em aureuren pruject is expected to produce 36 to have available when needed. The (Ing megawatts ofcapacity. The Company 233-megawatt Harborton unit 10-Admini,cmt,o,o has contracted for this output.

cated in Portland must be moved out Nuclear: PGE's 'Rojan nuclear of the city or sold.

plant's 6.1 billion kilowatt hours out-Other Sources:The put pluvided about 30 percent of our Northwest-Southwest intertie and 2

customer's mquirements.The plant the interconnecting of regional power had an excellent pmduction recortiin systems have benefited the Company 1980. At full power NE receives in several ways.The 4,000-megawatt about 729 megawatts of'Dujan out-intertie provides system support dur-put from our 67.5 percent ownership.

GooDTHrNGsARE HAPPENING AT P G E 6

/

2u"2*T*o%"2"e** "W"Lt "Upon completion ofBoaniman our effective october 1.1%0 and to the

• 'nn7M' :e"y,1, construction activity has mduced, however Q:"a",""L'M",?1m westillam busywith workon Tmjan LeM"=1%"'t contml mom altemtions and partnership maintains overa I supervision a e,neen, and c.n trn involvement with Colstn.nand tion. Nuclear and Thermal r

% Win"2?n'e WPPSS #3pmjects."

Interna Audit functions.

CONSTRUCTION Colstrip #3 and #4, which are being tion at year end. On the positive side, Boart/ man coal-fired plant built by Montana PowerCompany new management was installed by mmpleted and on-lme.

near a surface mine in southeastern WPPSS in mid-year andimprove-Montana,where the initialtwo oper-ments am evident. Major construc-Without question the August ating units of the project are located.

tionjobs completed wem installation 1980 completion of the Boaniman Construction progress lagged during of condenser tubing, heat tmating the coal plant substantially within its the early part of the year because contamment vessel, and topping out

$530 million budget was the con _

ofweather and envimnmental the 496-foot cooling tower.

struction highlight of the year.

delays but nowis progressing at The Company owns 10 pement At full power,it produces 530,000 a satisfactory rate.

of the Unit #3 installation. The pres-kilowatts-equal to the output of During 1981 PGE expects to ently scheduled 1986 online date is Bonneville Dam, and is capabla of reduce its participation to 18.6 being reassessed fora possible ex-pmviding for the electrical needs of percent from 20 pement to enable tension. Incurred costs as ofDecem-240,000 homes. When operating at cooperatives in mountain states to ber 31,1980 were $78.1 million.

full capacity it burns 300 tons of coal participate in the project as required per hour. PGE owns 80 percent of the by the Montana state site certificate.

Skagit nudearpmject project,with its partners, Idaho Unit #3is scheduled forcommemial furtherdelayed.

Power Company and Pacific North-operation in 1984 and unit #4 in west Generating Company each own-1985. 'Ibgether they will provide 260 ing 10 percent. PGE's investment in megawatts to help meet our projected Puget Sound Power & Light the plant at year end was $416.4 load growth. Pmject completion was Company, the Skagit sponsor, and the million.

12 pement at year-end with incurred ther partners announcedin July The 1,450 acre Carty Reservoir Company costs of$62.8 million.

the decision to move the planned two at the Boardman site not only pru_

1288-megawatt unit project fmm, vides necessam cooling water for the WPPSS #3 nuclearplant wn-f hg

plant but also atfords water stcrage struction experienwspmblems.

Hanford Reservation near Richland, for trngation of nearby and land.The Washington. Regulatory proceedings expa d 5

a n d Hampered by heavy snowfall and litigation as well as community The Company owns 1,600 acms of e rly m the year, and damage when a and envimnmental considerations 496-foot crane fellinto the reactor regarding the ongmal site prompted land at the site excluding the mser-voir acmage, and it is under study as auxiliary building under construc-the move.

a site for a second coal plant.

ti n, the 1240-megawatt Washington Seismic and geologic studies Public Power Supply System unit #3 at the Hanford site am underway.

A few statistics to give you a being built near Montesano, Wash-No decisions have been made.The feel for the work and matenals that ington reached 23.6 percent comple-Nuclear Regulatory Commission went into the Boardman project. It applications and state of Washington I f/

site certification and other mquired took 7.1 milhon manhours to com-J

" / g' plete, with a peak work fome of1,700 permits am in the process of being in the final stages. It requimd 11,500 filed. While this action will defer the tons of structural steel, nearly 370 k

y' construction start two to three years, miles of wire and cable, mom than 58

\\ yourmanagement believes it is a miles of pipe, more than 81,000 cubic

'~

prudent move. Our incurred costs at yanis of concrete, and SM raihuad yearend wem $105.4 million. Consid-cars of parts.The project tills a big eration is also being given to drop-power need for your Company.

p ng plans for the second unit.

Colstrippmjects moving Y

along well.

The 1240 megawatt Washington Pubhc Power Supply System urut #3 was 23 6 The Company is a partner in QComP e t ae P o ns the two 700-megawatt coal units, nuasar omt.

G ooD THIN G S ARE HAPPENING AT PGE 7

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'th>jan impmvements Companyformed to hold down hakling pattern, and repairs madedun'ng year:

mnstruction costs.

With licensing arxl permit Repairs made dudng the Effective July 15, Portland delays, and the restdctive nuclear spdng 1980 refueling included, at General Electdc Companyjoined initiative appmwd by the Orrgon the request of the Nuclear Regula-thme other utility companies to or-voters in Nowmber, management tory Commission, modification of ganize an engineering and construc-cannot at this time determine if some pipe hangers and restraints tion management company. Pdmary Pebble Spdngs will be built.

on blockwallsin the auxiliary objective of the new firm, Northwest We haw undergone eight building to reduce stressin case of Energy Services Company,is to pro-years of federal and state hearings, a stmng earthquake. Also addi-vide its owners the ability to hold the the granting and the removal of tional fire and safety systems were line on construction costs of new a site certilicate,and most twxntly added to meet the new plant re-power plants thruugh pooling of ex-successfully completed a headng quirements as a result of the Three perience, continuity of effort, and an before the Oregon Energy Facilities Mile Island investigation. Addi-enhanced ability to attract the best Siting Council to show the need tional operator training was also talent. This will contribute substan-for power in the pmposed Pebble accomplished as an important part tially to improved mnstruction pro-Spring time frame.

of this precautionary action. Work ductivity, reduced construction As pmject sponsorwe have is continuing on the contrul build-schedules, lower costs andimproved a 47.1 penxnt interestin the pmject ing walls and will be completed by plant performance, and an inwstment at year and of summer 1981.

Operation of completed pmj-

$12R8 million.The Company will In February 1981 the plant ects willbe handled by the parent maintain minimum levels of expendi-was out of serviw for13 days for the companies. Financing will remain tures necessary to seek resolution repair of fourleaking steam gener-the responsibility of the individual of the pmblem or recovery of ator boiler tubes.These have been utilities.

project costs.

plugged along with other first row Otherowners am Pacific tubes.

Power & Light Company, Puget Sound Power & Light Companyand Siren system in 10-mile mdius of The Washington Water Power plant being installed to meet new Company.

fedemirequirements.

'Ib meet new emergency response requirements the Company is installing some 200 public alert nw m enou sirens in the 10-mile zone surrounding f,fES" the plant. Installation is scheduled W e'V for completionin April 1981 and will cost an estimated $1 million.

1 EARutST UNITS UNDER

t. 0F COMPANY DATE OF CONSTRUCT 10N OR NET CAPABluTY COMPANY'S COST TO OPERAn0N PLANNED LOCATION

• N MEGAWATTS INTEREST FUEL 12'31 80 (000)

(A)

Colstnp #3 C01 strip, Montana 700 18.6 Coal

$ 62,769 1984 m rr n n m in

1. 4 700 18.6 Coal 1985

~~WPPSS #3 Montesano. Washington 1240 10 Nuclear S 78.085 1986 NEEEUUt c'.'iir$**[3.nd Skagit #1

• Hanf0rd. Washington 1288 30 Nuclear $105.450 earty e4 inut. b-ns t=at in==i h...i rn

1. 2 1288 30 Nuclear 1990's PebbleSpnngs #1 Arlington. Oregon 1260 47.1 Nuclear $128,838 mid tradna paa en iitheitojaa nua ar

1. 2 1260 47.1 Nuclear 1990's re a nd pr 4 abus t o nt

( A) Dates el apeahon, constructen casts, and isnt ownersing arrangements are sattest to conhaming renew and altershon due to thanging tenditens.

of aur meterners el-trual needt

(

GooDTHINGsARE H A P P E NIN G AT PGE 9

J US"*"2""d C,"**C,'R4" "1980 pmvided us much needed rate relief of Reeulation and Admamstration, october I. l9nh A renstered professnonal engnneer.

WhlCh helped earnings. Boardman went chuckjomed the company m 1%6 and served c :,u,yeta cy,,1 in the rate base and a powercost n

c y a z i m : 4 "'"'

adjustment is nowin effect."

and manager. he also supervises the Human Resourtes at tmtses of thecompany R ATES & THE REGION AL POWER ACT The timing for this incmase was dic-ter when plant operations and water Umelyand need<tl mte tated by the passage of Ballot Mea-conditions wem better than normal.

incnusespmvidctl.

sure 9 in 1978 which does not allow The continuation of these favorable the Company to charge customem for factors has allowed the Company to The tint rate increase occuned the use of any property not pmsently continue the rate mduction during on January 14,1980 and was to be the used to supply electric service. The the fint quarter of1981 whem the ad-Company's only genemlinflationary Commissioner has interpreted that to justment has been set at 2.3 mills per incrrase of the year. It amounted to mean Boaniman could not bein the kilowatt hour reduction.

17.7 [crrent and was predicated on rate base until it began operation but allowed rate of return on common on that day rates could be increased Additionalmte tvliefneedctf equity of 15.17 perrent and 11.15 per-to cover the fixed costs of the plant in 198L cent rrturn on rate base. As a part of and any change in operations be-cause of the plant.

the general investigation into the,

need for that mte rulief, the Commis-

'e expect that 1981 will prove sioner set aside two issues until a Powercost adjustment works to bejust as busyin the rate amas as was 1980. The only adjustment for futum time.The tint dealt with tlle both ways.

Bonneville Power Admirustration,s the ongoing inflationary pmssums (BPA) wholesale rate incmase which which occurmd in1980 was in the 1980 also proved the logic and Januaq rate increase. These continu-had become effective in December the worth of the power cost adjust-ing costincreases required that the 1979 and the second, related to the ment.The Company began 1980 with Company pmpare a rate filing for Boardman project.

below-nonnal waterconditions and submittal early in 1981. The expected Because of the uncertainty of with the 'Irojan plant out of service.

amount of the filing was to bejust the impact of the BPA incmase on the Company, the Commissioner had the During the fint quarter of the year, over 20 pertent.The Company was the Company was allowed a sur-pmpamd to file that rate incmase on Company defer all ccsts incurmd as a charge of 3.7 mills per kilowatt hour Januaq 28,1981 but during that day result of that rate incmase until a added to all bills. The overrun in the Commissionerasked both the better estimate could be made.

on July 1,1980 those defened costs continued into the second quar-Company and Pacific Power & Light ter during which a 3.3 mill smtharge Company not to file the rate cases expenses, as well as the estimated Iu ~

was added to all kilowatt hours con-that he knew they were preparing.

ture effect of that BPA incmase,wer" sumed.The power cost adjustment Instead, he allowed a 4.4 percent rate mcluded m a smgle rate action.The I

went to zem during the third quarter increase for PGE, effective March 1, pennanent increase associated with due to return of normal cost condi-198L At the same time he announced the new wholesale rates was 3.2 per-tions in power operations.

that he was ortlering an investigation cent.The defened expenses to that The fouith quarter of the year by the'Ibuche Ross accounting firm date will be mcovered by a 1.2 per-sawoutstanding plant operations into the financial conditiens and rate cent incmase which began also on and excellentwaterconditions. As a needs of both companies.The Com-July 1,1980 and is to rrmain in effect result during the first half of the pany believes thatits case is com-until all such defened expenses have fourth quarter, the Company re-plete and its evidence as strong as been nwmd.

turned to ratepayers 1.5 mills per possible and the Company expects, kilowatt hour. Because of a favorable that after the findings of the 'Ibuche Boanlman plant went into mte contract with Pacific Gas and Electric Ross mport,it will be able to file for base m, August.

Company the mduction in customer the amount indicated in the report as bills was incmased to 6 mills for each being reasonable. It is anticipated On August 3,1960 the Company kilowatt hour for the remainderof that that relief, coupled with the ear-was pennitted to put into effect a the fourth quarter. The power cost lier 4.4 perrent, should amount in 19.6 percent rate incmase to cover the adjustment thus helped the Company total to the same revenue as if the i

fixed costs of Boardman and the during the early part of the year Companyhad followed the nonnal I

change in operating expenses be.

when power was more expensive pmcedum.

cause of Boaniman being on-line.

than normal and, conversely, pro-duced a rearly 9 million dollar return to ratepayers during the fourth quar-Good THINGsARE HAPPENING AT PGE 10

l During 1980, the Company was the Company's domestic and rural involved in many hearings that were customers. The Company would I,owercostpmjectfinancing mindated by the National Energy continue to use its transmission and welmme.

Act. One of those hearings centered distribution facilities to serve the on Lifeline Rates argi the Commis-customer and would continue to earn In addition, the council and BPA sioner concluded that Lifeline Rates a fair return on its investment.

can agree to purthase all or part of would not be implemented for any DRPA would not provide new energy the output of new generating plants electric utility service subject to his to the region but would cause part being built by subsidiaries of jurisdiction. During the pendency of of the requirement for building investor-owned utilities. This will that hearing, the Commissioner ex-new facilities to be shifted from the give regional backing to these proj-pressed a desue to u, nplement a rate Company to some of the pmfemn ects and is expected to result in sig-that would pmmote conservation; agencies.The DRPA hearings were nificantlylower financing costs.

however, all rates pmposed to ac-concluded during 1980 and the various complish that purpose wem rejected parties wem completing the neces-SL25 biBionformnservation and because of the mequitable or bunien-sag briefs when the Regional Power renewaMe resounrs some elkcts that they would impose Act was signedintolaw on December on the various customer classes. A 5,1980. Because of the passage of hcaring on an appmpriate cogenera-that Act, the Commissioner sus-

'Ibp priority is given conserva-tion ratt.was also held and the Com-pended the DRPA proceeding.The tion and renewable resources.

pany testified that cogeneration rates Company believes that it is still a vi-Conservation is treated as an energy should be based on the avoided cost able alternative and has urged the resource and valued at 110 pertent to the Company that could be saved Commissioner to keep DRPA alive of the least cost alternative.On a by utilizing any power available fmm until the benefits under the Regional revolving basis, a $1.25 billion bond-cogeneration sourtes. Although the Power Act can be ascertained.

ing capacity for federalloans and hearing is complete, the Commis-grants is authorized for conserva-sioner has not rendemd a decisionon RegionalIbwerAct passage ti n and mnewable resourte projects.

These are to be equitably awarded what the appmpriate cogeneration assures residential / farm thmugnout the region. All of these rate should be.

mstomedowerpowermsts features of the Act should pruvide a On Januaq 16,1981 the Com-missioner ordervd a connection measure of rate reliefin the future.

\\

charge be designed and filed with an Passage of the Regional Power effective date of Marth 31,1981.The Actin December 1980 willhelp keep connection charge to be applied to rates low for PGE's residential and electric resistance space heating is farm customers.The Act assures

$400 pr kilowatt. Ilowever, theru those customers their fair sham of would be a fme allowance of one thelow cost federal hydmpower kilowatt of electric msistanm space from the BPA during a five year heating h>ad for eveg 200 square feet phase-in period beginning no sooner of floor space.This hook-up charge than October 1981.

was also to be applied to electrical Under the Act, PGE residential resistance water heating with the and farm customers willmceive 60 same $400 per kilowatt being as-percent of their power at the lowest sessed afler a free allowance of 4%

federal rate the first year, and will re-kilowatts of chstrical resistance ceive 10 perrent additional for the water heating. On Februaq 19,1981 next four years-resulting in those

~

the Commissioner announced that customers benefiting with a substan.

OPERAMGREVME he was staying his onler to allow tiallylower rate than would other-E EE85 I/ " < '

the Irgislatum time to consider wise have been requimd.

the issue.

Another important aspect is the

-s '

establistunent of a regional planning

(

Action on Ortson's Domesticand council consisting of two mpresenta-BumiIbwerAct suspendal.

tives each fmm omgon,Washingon.

Idaho and Montana. It will develop a tv8 nal plan to meet futum energy i

There was also a venlengthy hearing in 1980 mncerning the im-

".ds with priorities given to conser-V"l' "' RneWa e Nr8y ptm, ns, plementation of the Domestic and w ste and high conversion efficiency Rural Power Act(DRPAl passed pre-resourtes, and finally traditional viously by the Oregon Irgislature.

s urtes such as coal and nuclear Under the DRPA the state of Oregon pm would have become a prrfemnce g

customer and would petition BPA for the delivery of enough power to meet the energy requirrments of y,

Good THrNGsARE HAPPENING AT PGE 11

2"'M'a'

'"W"ed ;""%

" Openness, candorand citizen Preudent General Counsel and Secre participation received m* creased emphasis urw-r -wn nd ~

cornpany in 1978 as Vue Freudent W.2','e":s"M,%"g-in 1980. Allpublic takeover attempts in our 22:M'%,n service area were defeated, but a 2;:MinW*

restrictive nudear measure was passed."

whir h provides valuable be< kground for supervi saon of public aHairs and public relations artavities PUBLIC, POLITIC AL & LEG AL ACTIVITIES "I.istening-to serve our cus-The Company made an early com-the November ballot. Six of these en-tomers better" was a major corporate mitment to the community that the dangered 95 percent ofoursystem objective in 1980, and we made nota-proposed pmject would not be built operation. Citizen committees with ble pmgmss. We started with a without community support.

over 20,000 members were formed concentrated effort to get our senior The public involvement pmcess statewide to fight these takeover ollicers out in the field more, talking included public opinion surveys in attempts. Many ofouremployees with our customers and our customer surruunding communities to evalu.

joined those committees. All twelve contact employees-answering ques-ate support for the proposed pmject.

measums wem defeated as voters tions, getting a better understanding Advance information pmgmms were malized that the costs for takeover of of concerns, desires,and possible held for public officials toinform Private utility systems would be solutions.This was also comple-them of the proposal's details, the extremely high, that it would mean mented with customer attitude pmcess, and the Company's pledge more government rather than less, surveys and tvsponse opportunities.

to be guided by committee recom.

and that them was no assurance An Advisory Committee was mendations. An extensive speakers' of the availabilityof federal power formed in our Willamette Valley program was instituted to keep the to meet all of their needs.

Division to assist the Company in general public informed. Mailings We anticipate some of the gov-evaluating existing and proposed with response forms wem made to ernment takeover groups will surface pmgrams and policies,information citizens in the ama. School study again, however the lower powercosts material and services. It has proved programs were also instituted. Close for our residential and rural custom-extivmely helpful and the effort liaison was maintained with the staff ers which willresult fmm passage will be expanded.

of the Omgon Department of Fish of the RegionalPower Actwillmake and Wildlife, takeover of our properties mom Citizen Cornmittee evaluates On February 12,1981, the difficult, pmposed WillametteFalls Citizen Advisory Committee mcom-genemting pmject.

mended that the Company not build One existing PUD passed a the proposed pmject untilit was as-bondlevy A second hydmelectric plant certained that its twenty conditions could be met.The committee's rec-at Willamette Falls m Omgon City has The Columbia River PUD, estab-bmn under consideration by the ommendations acknowledged the lished in 1939, but never activated, Company since 1958. Seeking exten' Pos d pm a n rrowly passed a $17 million tax-o a

ery }

m de sive community involvement in the study of the 60 megawatt pmposal, a the Company and fish protection be swumd general obligation bond guaranteed in advance. On March 3, rssue with the avowed purpose of 20-member Citizen Advisory Com' 1981 the Company determined the takmg over our distribution system

' mittee was appointed, repmsenting servd,musemers m me envimnmental concerns wem too business, labor, histanc, fislung, and great and announced that it would county.The validity of the election envimnmental concerns. It spent was chaHenged m murt for vote several months studying plans and not pmceed with the proposed regularities by several citizens and Proj t.

holding hearings before making its now is being considered for appeal.

mcmnmendations on the proposal.

Our properties are not for sale, and Vbters say no to takeover we are confident they are worth sev-attempts.

eral times the bond amount. Con-demnation pmceedings will be m-1980 was an extremely busy quimd to establish value before any political year in Omgon. In addition takeover and buyout can be ac-to national and statewide activity, complished.It promises to be a long twelve Oregon counties had people's process.The area in question repm-utility district takeover measures on sents about five percent of our energy sales.

Good TnINGS ARE nAPPENING AT PGE 12

I Passage of n ut h'ar mnstruction

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Tht dppDIVf*(l stelt1*Wl(le riiea slln, inenu(Ine(l caTilt r in Nlls n'[M)rl,

'r y 9 - ?.J. p., _

which n quines diat a permanent

~-

j t

• ' ~

- -+ 1,3 O b M (lisposal f acility f or s;wint nuclear

~

+

yJ h[DQ Q

lik. [

f uel drl(l Illy,Il level railloactlVe Wasti' A2

"* b $ -N.t" (M:73 has tv en brensed to operate by Ole p"

M

.s I

.\\To l

f +Mier al goVerninent lwtf on> a sitf t cer

'Lf A-

~

utirat4> can tv issued for any new nu clear plant in Un y,on. has no eff ect on

- l, y.

-=

die operation of 'IYojan Exisung

's,

plants wen grandf athen d Its ma}or

}

Influente is on die timing dnd loca ly NN,',

llorl of illtun nllflear projects and a Qy n> assessment of alta rnate n sources W

The ley,ality of the measun> is t* my

? %,,

studied by concerned nuliues 7 ',[#

]

W Ol'j" 3-4 -

. 'E

'N '

.\\ { F

.I U

~.O O 7 #j' {

5'I '

f

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~pp 7,

r

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t;

%!a ining a bett er pib of list emog and being i

e esponsive to our mistomerg ree ein a top lewel emphasis Pt.) pla nru ng and < nmmu nit y meetlage wer e an important part of the

.,4

• f' W illa met te > alle hydroelecins projesi

,,7 y_r g

en ide,. tion,

,,w r

J y9 t

ofekhOn n kkN' k Iref on peop @ L n4 iud l n g many Pt.F empim eet finned atisens t mma t ees t o heip defeat People s t tiht 5 1)igi n41 take s er at t em pt s kb!

'k h' h b s b

+b fi $

4

3

r"L"";"M2'"vTn'y%,W 9

" Operating revenues were up 40 percent; l

1

/ ssistint to tha Executiva Mca Presi net income increased 87 percent and drnt Prevwusly he wts a vne President of the First Nate;nal Bank r,f oregon earnings pershare ch.

bed to S2.03. It was I N trned Vke Pressdent and chnef hnen m

rirl Ouner for the Company an M78.

7"sg:i;mm;n a good year; but infaimess we must 2,"M" ::tL remember the previous year was not very responubiht y for financial.

good, so the momentum was needed and 7

- ntmaandhudactma functions

(

must continue.y p

9 i

z_1.

FIN ANCI AL REVIEW The Company's net income in-During 1980, the Company Enrollment in the plan will be creased to $86 million in 1980 from declanxi dividends to common and accepted at any time. Shareholders

$46 million in 1979, an increase of 87 prefernxi stockholders of $60.9 mil-wishing furtherinformation should pertent. Earnings per average com.

lion and $13.6 million. On February 4, contact the plan agent, U.S. National mon sham increased to $2.03 f mm 1981, the Board of Directors declared Bank of Oregon, PO. Box 3850,

$1.CS. 7btad operating mvenues wem a quarterly common stock dividend Portland, OR 97208,(503) 225 0474.

$490 million in 1980, an incrrase of of 42 % cents per share payable April

$140 million, or 40 perrent over 1979.

15,1981. This is an indicated annual 1980 capitalfinancingfmm j

Factors contributing to the dividend of $1.70 per share. Stock-inany soutws.

i earnings incmase include favorable holders have been notified that 63 l

' hydro conditions in the fourth quar-pertent of the 1980 common stock l

ter of 1980, a significant increase in dividend payments trpmsent a tv.

Building new utility plants to sales to other utilities, and the excel.

turn of capital and are non-taxable meet future demand requires that l

lent operation of the 'nojan nuclear

' as dividend income for Federalin.

large amounts of new capital be plant. Other factors include rate come tax purposes. The balance, or raised from a vanety of sourtes.'Ib 37 pertent of common stock dividend fin nce the 1980 construction pro-relief received during 1980 covering $Payments, and 100 perrent of1980 gram ($293 milhon, mcluding $68 inflationary costs and the inclusior nulbon of allowance for ftads used in rates of the Company's new Preferred dividend payments are Boardman plant.

fully taxable as dividend income.

t during constniction (ADC)), to retire

These figums am subject to final de.

I ng-term debt maturing during Dividend policy maintained' i termination by the Internal Revenue the year and to reduce the balance of

! Service. Shamholders who have short-term bank loans, the Company

! questions concerning this matter armged long-term financing The Company's Board of l should contact their tax advisor.

amounting to $380 million. Major Directors and management mcognize l

activity during the year mcluded the the import;mce dividends play in the

!Dividend minvestmentplan I " "I"E stockholders investmentdecisions.

Your Boani of Directors intends to Paspation gws January S Id 4,000,000 shams of com-maintain a sound and forward-looking dividend policy This is borne Participation in the Dividend mon stock to the pubhc at $14.375 per out by the fact the dividend has been

, Reinvestment and Common Stock share. Net proceeds were $55.3 mil-

! maintained during recent years of l Pmthase Plan continued to incmase lion. Received $10.4 milhon under the l adversity. Every effort will be made i this year. As of December 31,1980 leveraged lease of the coal handling

! about 14.600 shamholders partici.

facilities at the Boardman plant.

l to increase earnings to a level which l pated in the plan. They invested $8.5 l February will allow for a dividend increase in

, million during 1980-an incmase of Sold $55,000,000 of 13.25 per-l1981.

' 18 pertent over 1979.

j cent first mortgage bonds due 2000 I

j Thmugh the plan, common i n private placement basis. Net

! and prefermd stockholders of reconi

{ Pmceeds were $54.7 million.

have the opportunity to automatically 1 May i minvest their dividends for addi-Sold $50,000,000 of14.75 per-l

! tional stock purthases. The plan also l cent notes due 1987 in the Eumdoll

allows shareholders to invest up to market. Net pmceeds wem $48.6 l $5,000 cash per calendar quarter for

million.

l

. direct purchases of additional shams

} August

of common st<x k. Participants incur Sold $75,000,000 of13% percent

' no commission or other charges since

first mortgage bonds due 2010 to i the sharts aru purchased directly t the public. Net pmceeds werv $74.2 from the Company

! million.

I i

i I

14

September Entemd into a bank cmdit agmement, expinng in 1984, which pmvided $100 mi' lion from sales of WHEREOUR DOM NEOM commercial paper.The agmement also pmvides forother financing op-i tions,in place ofcommemial paper sales, thmugh a group of banks.

Other l

Incmased the'&ojan trust agmement by appmximately $18.2 million and used an additional $10.6 i

l million under the Portof Mormw pollution contml bonds. Participa-tion in the Company's Dividend Reinvestment and Common Stock Ihnthase Plan pmvided $8.5 million.

1 Mnancingfuturewpitalpmjwts.

PGE's 1981 construction pro-t gram is estimated at $310 million in-

[

ciuding approximately $60 million of ADC. The Company estimates that 30 to 35 partent of the 1981 cash expen-ditums forconstmction willbe funded byinternalcash genemtion WHEREOUR DOLLAR WENT i

as compamd to 18 pertent for 1980.

'Ib partially finance the 1981 pmgram, the Company sold thme million shams of common stock to i

the public in Marth 1981 at $12.125 par sham. Net pmceeds wem $34.7 million. In addition, the Company plans to finance its sham of pollution contml equipment for the Colstrip project thmugh the sale of pollution contml bonds.The Company plans to sell additional long-term debt later in the yearand may selladditional l

shams of common or pmfermd stock.

i The Company's 1982-83 con-l struction pmgram,which is subject l

to continuing mview and adjustment.

l is currently fomcastin the range of l

$750 to $800 million, including ap-l proximately $190 million of ADC.

l Internally generated cash is expected l

to provide 30 percent of the total funds needed to finance the 1982-83 program.

l G ooD T HINGs AR E H A P P E NIN G AT PGE 15

l l

l l

l l

RESEARCH & THE FUTURE

)

p Geothermal development is a i

[

$2.5 millum rvscan:h buciget continued possibility for futum en slaterl for 1981.

ergy supply assistance in Omgon and

-psd the Company is maintaining pmsent Energy researth is on a fast leases on 8.900 acms in the Cascade q ~

track. Finding new and impmved Mountain ama of the state. It also is

)

~

ways to provide needed electnc ser in partnership with other utilities in 3'I l

vice is a must. Your Company has the development of a 10 megawatt budgeted $2.5 million in 1981 for geothermal demonstration unit m msearth, with $2.1 million of that Nevada which is now scheduled to go supporting protects directed by the into operation in the 1982-83 time industry's non pmfit Electnc Power frame. Information gained from this d

Researth Institute. Supported by 600 test operation allows the Company 4

'~5 members this centrahzed researth to evaluate power plant design as _

m f;:t,g g y,g g,p.g,w n l

management organization is working and reservoir perfonnance befom on 1.200 active R&D projects with making major commitments f or p,ggggg-f unding of $1.3 billion.

commerrial sized umts.

c p.n, n.n

.hi.

..oor..n.ois.nt,

.udit and h.lp m.to..r. plan ol.r.p.o.

[

Included am major develop

.nd..., h..iing.r.i.

ment pro}ects for solar. thennal and photovoltaic, f uel cells, wind.

Eledrk Po..r Re arch in.Latut. nucle.r geothermal, coal gasificauon and to.,on,toa

.uch.. ooobi.it in.hown liquitication, conservation, nuclear, b.re in San Dieg..ro on.of m.ny PGE

.upport.d.divits.. tn our $2 S f uston. ligmd metal f ast bmeder rruuion r.

arch budget n actor and envimnmental pmtection.

? '.-;

-g;y 7-j g

proposal to the U S Department of 4 ;,....

.-R

?I 1,.

j The Company submitted a Energy f or a $4 7 million coal gasiti L.

~p

. -x -

.i 4

k F'

- -i -

(s'

. = -* y~ Y.,.

canon f easibility study at our Beaver l -

.- ' i

'A.

r k

I 8"4 i ((.

• ! ]f.k'.[h -

cornbustaon turbine plant. We wem miormed in December that we wem q -..,-[3

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• il i: -

x k

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not granted the pmject and am j

[ '}:

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I prvsently pursuing other avenues of,

'a.

. /gi' -.a

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D.

h f ederal support.

i

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. g '

y

- {' Y '

Locul trsearth activltles mntmue r

}is 'tyc

(.~/,;

A s

to pnnkle valuable assistance

l. -

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I ' p. : -

W. 3: : V

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Our kval msearth programs

.'f.

i +

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)

include conunued operation and TS 1,.

-. j

..n I-s I

momtonng of solar demonstration 9.I 7!*

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t

.S umts in our service area. wood pole J

=

,.* '.. -J. A.y V 5

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r d't ?, ] } I..

i ff

~

t matment impmvements, trre growth

' f studies, heat pump water heater

'1

[. '.

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" g"'Eg-K;h u-development and fish pmtection

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',() ) D THING $ AHE HAPPFNING AT PGF l

16 l

l

FIN ANCI AL & STATISTIC AL l

l l

1 G OO D THINGS AR E H A PPE NIN G AT PGE

l Chairman's Commant "We believe continued researth, sound management and our intensified efort to l

listen to customers and supply them the i

services they want and are willing to pay for; will enable your Company to continue the upswing wegenemted in1980. You can mst assured the management team and our 3,106 employees will make every efort to do so. We am encoumged by thepositive attitude toward ene devel-i opment and the mduction of tory overlap the nation's newleade hip is demonstmting. It is urgently needed.

Indeed, good things happened in 1980.

Thefutum holds muchpmmiseforthis 91-year-old Companyand thegmwing region which we serve."

i m

e

.a

$1ut d JLt I

i 18

/

Portland General Electric C:mpany and Subsidiaries Selected Financial Dr.t3 Years Ended December 31 1980 1979 1978 1977 1976 (Thousands of Dollars)

Operating Revenues.....

$ 490,237

$ 349,981

$ 303,678

$ 253,073

$ 217,787 N;t Income....

86,200 46,122 48,784*

36,988 52,021 Long 'Ibrm Debt **...

1,097,665 M9,441 781,619 706,224 558,950

'Ibtal Assets............

2,061,683

.w,328 1,588,038 1,374,839 1,202,982 Errnings per Average Common Share........

$2.03

$1.06

$1.40*

$1.09

$2.27 Dividends Declared per Common Share.................

$1.70

$1.70

$1.70

$1.70

$1.64

• Excludes the cumulative effect($7,845,000 or S.32 per share) of a change in accounting policy of accruing estimated unbilled revenue.

" Includes cumulative preferred stock subject to mandatory redemption requirements.

Management's Discussion and Analysis of Financial Condition RCsults of Operations N;t income and earnings per share for 1980 increased over 1979 primarily due to the outstanding performance of the 'IYojan nuclear plant ('IYojan), good hydro conditions, general rate relief granted the Company by the Public Utility Commissioner of Omgon (Commissioner), and the start-up of the Boardman cod-fired plant (Boardman) on August 3,1980.

N t income and earnings per share for 1979 had decreased from 1978 primarily as e result of excess power costs incurred during the second half of the year.

Significant incmases in revenues (11.6% rate increase in January 1979) and ellowance for funds used during construction (ADC) were more than offset by the Company's inability to recover rapidly escalating power costs and the higher costs of replacement energy. The combmation of poor hydro conditions beginmng in August and the outage of'lbjan for repairs from mid October until December 31, 1979, resulted in the need to purchase significant quantities of power. These higher costs of purchased power and increases m fossil fueled generation resulted in excess power costs of approximately $60 million which were only partially recovered.

In 1980 'Ibjan generated nearly 30% of the electricity consumed by the Company's customers. The plant ran almost continuously before and after a 26. day regulatory outage and a 72. day refueling outage. Output at the plant increased 15% over 1979 cnd more than doubled that of1978. The improved availability of'IYojan during I

1980 enabled the Company to meet its load requimments with a supply of power that was significantly less expensive than alternative thermal power sources.

The addition of Boardman has given the Company a greater diversification of l

power sources, a larger load capability and an increased earnings base. Operation of the plant places the Company into a temporary position of surplus capacity. An agreement for the sale of surplus power has been negotiated and includes a I

l provision for the return of energy when needed by the Company.

The combination of the operation of'IYojan and Boardman and favorable hydro conditions in the region during the fourth quarter of 1980 enabled the Company to increase sales of electricity to other utilities by approximately $34 million over 1979. These conditions also resulted in an incmase in purchased power and a l

decrease in fossil fuel production expense over 1979 as the Company utilitized the most economical mix of internal generation and outside power purchases to satisfy its customer load requirements and sales contracts.

Operating revenues for 1980,1979 and 1978 have increased primarily as a result of the following rate increases:

August,1980

-19.6% rate increase when Boardman went into service.

July 1980

-3.2% rate increase to cover Bonneville Power Administration wholesale rate increase.

Jrnuary1980 -17.7% general rate increase.

J;nuary1979 -11.6% general rate increase.

November 1977 -12.6% general rate increase.

19

In cddition, effective November 15,1979, the Commissioner granted the Company a permanent power cost adjustment tariff (PCA). This tariff now provides for 80%

recovery of variable power costs in excess of those in existing general tariffs.

These power costs include those of Company owned generation and purchased power. The tariff also provides for refunds of 80% of savings in power costs when they are less than those used to set existing general tariffs. The enactment of the -

PCA effectively eliminates the extreme fluctuations in earnin which maybe ctused by excess power costs, as experienced in 1979 and 197 Nonoperating income decreased in I?80 compared to 1979 due to a wdte-down of the Company's interest in certain mining properties.

The effects ofinflation on the Company can be depicted by the steadyincrease over tha past three years in administrative expenses, maintenance and repairs, and interest charges. Rate relief enables the Company to partially recover these rising costs but present ratemaking practices do not produce utility rates that specifically recover increases relating to the rapidly escalati costs of plant and equipment. Rate regulation effectively limits the recovery of ant (through revenues) to the origmal cost of those assets. For additional scussionof the effects ofinflation, see Supplementary Information to Disclose the Effects of -

Chinging Prices on pages 34 and 35.

CcpitalResources and Liquidity Th) Company's 1981 capital expenditure program is estimated at $335 million.

including ADC. The Company's 1982-83 program is estimated in the range of $750 million to $800 million, including ADC. Approximately 60% of these estimates is for gin: rating plant facilities,25% for transmission, distribution and general facilities, and the balance for the conservation program, nuclear fuel and other expenditures. Such cost estimates are based on the Company's present plans for joint ownership of certain future generating facilities and present construction schedules and are subject to further mvision as a result of changes in such plans and potential effects of the Pacific Northwest Electric Power Planning and Conservation Act(see page 11).

Ths Company expects that approximately 65% to 70% ofits 1981 cash capital expenditures will require external financing to be pruvided from the sale of debt and equity securities, and may include other financing arrangements. This estimate reflects a decrease from 1980, when approximately 82% of cash capital expenditures required external financing. Continuation of the upward trend in funds generated from operations is expected to enable the Com greiter portion ofits cash requirements from internal sources. pany to provide a During 1980, the Company relied heavily on debt or debt equivalents for external fintncmg due to a poor equi,ty market and restrictions on the issuance of preferred -

stock. The issuance of additional prefermd stock and first mortgage bonds requins the Company to meet certain earnings coverage p'rovisions. Presently the Company is unable to issue pmferred stock. The Company s ability to meet these earnings coverage provisions depends primarily upon the adequacy and timeliness of future rate relief. Long-term debt as a percent of total capitalization was 58% at December 31,1980, compared with 52% in 1979. With adequate rate aliif and market conditions permitting, the Company plans to gradually increase its equity ratio as a percent of total capitalization. Accordingly, the first financing of1981 was the sale of additional shares of common stock.

The Company's primary internal source ofliquidity is from current operations.

Externally, liquidity is provided through borrowings under bank and bank-supported financing agreements, the sale of nrst mortgage bonds, and the issuance of common and pmferred stock. At December 31,1980, the Company had

$190 million of short-term cmdit available under its various short-term credit agmements, with $153 million unused.

1 i

a 20

Portland General Electric Company and Subsidiaries C:nsolidated Statem:nts cfInComo For the Years Ended December 31 1980 1979 1978 l

(Thousands of Dollars) i Operating Revenues (Note l).....

$490,237

$349,981

$303,678 Operating Expenses Purchased power..............................

106,755 75,111 76,911 Prod u ction.................................

62,434 69,522 23,794

'Iransmission and distribution..................

13,116 12.805 11,672 Administrative and other.............

47,865 38,728 33,914 23,006 18,418 13,313 Maintenance and repairs..................

Depreciation (Note 1).....

43,176 33,642 31,587 Taxes other than income taxes...

24,945 24,166 24,280 Taxes on income (Note 2) 36,747 12,300 4,968 358,044 284,692 220.439 132,193 65,289 83,239 Operating Income.....

Oth rIncomeandDeductions Allowance for equity funds used during construction (Note 1)..............

32,017 27,445 9,058 Other-net ofincome taxes........

(6,526) 1,270 5,325 t

l 25,491 28,715 14,383 l

l l

Interest Charges l

Intemst on long. term debt.....

93,886 70,326 58,206 Interest on short-term borrowings 12,060 9,096 8,973 Other.....

1,744 1,030 1,183 l

Allowance for borrowed funds used during construction (Note 1).

(36,206)

(32,570)

(19,524) 71,484 47,882 48,838 I

Income befom cumulative effect of change in accounting policy....

86,200 46,122 48,784 Cumulative effect to January 1,1978 of accruing estimated unbilled revenues-net ofincome taxes of $8,503 (Note 1).......

7,845 l

N:t Income.................

$ 86,200

$ 46,122

$ 56,629 l

l Pr:ferred Dividend Requirement......

13,607 13,830 14,175 I

C:mmon Stock Income available.

$ 72,593

$ 32,292

$ 42,454

..... 35,788,621 30,403,911 24,709,977 Average shares outstanding Earnings per share Before cumulative effect of change in accounting policy......

$2.03

$1.06

$1.40 Cumulative effect to January 1,1978 of accruing estimated unbilled revenues-net.

.32 Ecrnings per share........

$2.03

$1.06

$1.72 Dividends declared per share..

$1.70

$1.70

$1.70 Ccnsolidated Statements of Retained Earnings For theYears Ended December 31 1980 1979 1978 (Thousands of Dollars)

Balance at Beginning of Year...........

$ 74,080

$ 94,918

$ 94,978 86,200 46,122 56,629 N t Income............

160,280 141,040 151,607 l

Deduct Dividends decland Common stock....

60,877 53,130 42,514 13,607 13.830 14,175 Prefermd stock......

74,484 66,960 56,689 Balance at End of Year.

$ 85,796

$ 74,080

$ 94,918 The accompanying notes am an integral part of these statements.

21

Portland General Electric C;mpany and Subsidiaries Crnsolid.ted Balance Sheets Assets At December 31 1980 1979 (Thousands of Dollars)

Electric Utility Plant-Original Cost In service Production....

$1,011,139

$ 597,917

'lYansmission.......

144,621 134,495 Distribution...............

412,601 385,104 General...............

67,854 58,975 1,636,215 1,176,491 Accumulated depreciation (Note l)...

(244,016)

(203,572) 1,392,199 972,919 Construction work in pmgress (Note 6) 377,919 617,300 Nuclear fuel, less accumulated amortization of $48,057 and $29,476 (Note 1).....

72,089 68,578 1,842,207 1,658,797 Other Property and Investments Conservation program 22,552 6,186 O ther...........

10,586 14,769 33,138 20,955 Current Assets Cash 3,394 4,909 Receivables Customer accounts-net 33,604 27,886 Other accounts and notes.

15,859 4,625 Estimated unbilled revenues (Note l).

30,098 21,781 Materials and supplies-average cost Fuel oil 34,597 28,591 C o al.......................

6,846 504 Other......

18,792 12,683 Property taxes applicable to subsequent periods 8,415 9,697 Prepayments 7,852 7,394 Deferred power costs (Note 1) 3,897 7,320 163,354 125,390 Deferred Charges...

22,984 16,186

$2,061,683

$1,821,328 22

Crpitalization and Liabilities At December 31 1980 1979 (Thousands of Dollars)

Ccpitalization (see accompanying statements)

Commo n s tock equity.......................................................... $ 627,069

$ 551.612 Cumulative preferred stock Subject to ma ndatory redemption.................................................

43,500 45,000 Not subject to mandatory redemption...........................................

105,000 105,000 Iong-term debt..........

1,054,185 754.441 1,829,754 1,456.053 I

1 Current Liabilities Long-term debt due within one year................................

17,878 50,988 Current sinking fund-preferred stock...........................................

1,500 B :nk loans ( No te 4 ).....................................................

37,000 130,000 Accounts payable and other accruals......

72,213 100,632 Acc rued inte rest.......................................

27,559 15,414 D ivid end s payable.............................................................

18,695 16,814 Accrued general taxes....................

20,248 18,918 Acc rued income taxes......................................................

1,069 865 Deferredincome taxes (Note l).

12,602 11,392 207,264 346.523 t

1 1

I Oth:r l

Deferred income taxes (Note l).......................

19,075 14,673 1

Deferred investment tax credits (Note 1)............................

2,215 2,366 3,375 1,713 Miscellaneous.......................................................

Commitments and contingencies (Notes 6 and 7).

24,665 18,752

$2,061,683

$1,821,328 The recompanying notes are an integral part of these statements.

i l

23

Portland General Electric Company and Subsidiaries C nsolid:tedStatem:ntscfCcpitaliz ti n At December 31 1980 1979 (Thousands of Dollars)

C mmon Stock Equity (Note 3)

Common stock, $3 75 par value per sham, 100,000,000 and 50,000,000 shares authorized, 36,060,802 and 31,435,856 shares outstanding..................... $ 135,228

$ 117,884 Other paid.in capital..................

410,123 363,631 Capital stock expense.......

(4,078)

(3,983)

Retained earnings....................

85,796 74,080 627,069 34.3%

551,612 37.9%

Cumulative Preferred Stock (Note 3)

Subject to mandatory redemption

$100 par value per share,2,500,000 shares authorized 11.50% Series, 165,000 and 195,000 shares outstanding...........

16,500 19,500 Current sinking fund on 11.50% Series (1,500) 8.875% Series,270,000 shares outstanding.............

27,000 27.000 43,500 2.4 45,000 3.1 Not subject to mandatory redemption 9.76% Series, 100,000 shares outstanding....

10,000 10,000 7.95% Series, 300,000 shares outstanding.....................

30,000 30,000 7.88% Series, 200,000 shares outstanding.............

20,000 20,000 8.20% Series, 200,000 shams outstanding.............

20,000 20,000

$25 par value per share,6,000.000 shares authorized

$2.60 Series, 1,000,000 shares outstanding.

25,000 25,000 105,000 5.7 105,000 7.2 Long-term Debt (Note 5)

First mortgage bonds Maturing 1980 through 1985 10%% Series due December 1,1980..............................

40,000 10% Series due April 1,1982..................................

40,000 40,000 3%% Series due November 1,1984.............

6,886 7,126 9%% Series due June 1,1985...................................

27,000 27,000 Maturing 1986 through 1990-4%-5%%.

27,340 28,160 Maturing 1991 through 1995 -4%-5 %%..........................

65,719 66,682 Maturing 1996 through2000 - 5%- 13 %%..........................

244,801 189,951 Maturing 2001 through2005 -7 %- 1 1 %%...........................

142,000 142,000 Maturing 2006 through2010 -- 8%- 13%%.........................

175,000 100,000 Pollution control bonds, Port of St. Helens, Oregon, 7%%, due 2006 (guaranteed by Company).

12,735 12,735 Pollution control bonds, Port of Morrow, Oregon, 6%%, due 2008 (guaranteed by Company)...........................

34,000 34,000 Amount held by trustee...................................

(10,560) 10% notes due Man:h 1,1984.....................................

50,000 50,000 14%% notes due May 1,1987....................................

50,000

'lYojan trust agreement.......................................

96,222 77,975 B ank credit agreement.......................................

100,000 Other..........................................

360 360 1,072,063 805,429 Long. term debt due within one year.........

(17,878)

(50,988) 1,054,185 57.6 754,441 51.8

'Ibtal capitalization................................

$1,829,754 100.0% $1,456,053 100.0%

The accompanying notes are an integral part of these statements.

24

Portland General Electric Company and Subsidiaries Crnsolidated Statem:nts cf Changes in Financial Positi:n For the Years Ended December 31 1980 1979 1978 FIhousands of Dollars)

Source of Funds Current operations Income before cumulative effect of change in accounting policy.............. $ 86,200 $ 46,122 $ 48,784 Non cash charges (credits)toincome Depreciation and amortization......................................

61,757 46,840 35,008 Deferred income taxes-net.......................

33,409 11,293 1,018 Allowance for equity funds used during construction....................

(32,017)

(27,445)

(9,058)

Other-net.........................................................

8,563 2,799 3,038 157,912 79,609 78,790 Cumulative effect of change in accounting policy (Note 1)....................

7,845 Funds provided internally..........................................

157,912 79,609 86,635 Proceeds from external financing Long-term debt.....................................

325,282 102,672 116,795 C o mm o n stoc k......................................................

63,817 93,83.4 68,459 Short-term borrowings-net.......................

(93,000) 59,000 26,000 Sale / leaseback of assets (Note 7)..............................

10,393 20,246 50,310

$464,404 $355,361

$348,199 Application of Funds Gmss utility construction............................................... $292,833

$254,289

$278,265 Allowance for equity funds used during construction.......................

(32,017)

(27,445)

(9,058) 260,816 226,844 269,207 Co nservation program..................................................

16,366 5,994 192 Divid end s declared.....................................................

74,484 66,960 56,689 R;tirement oflong term debt and preferred stock.....

61,690 45,119 45,666 Miscellaneous - net..................................................

1,435 7,990 8,267 Increase (decrease) in working capital excluding current maturities, sinking funds and short term borrowings Cash.......................................................

(1,515) 522 (681)

R eceiva bles......................................................

16,952 4,684 7,457 Estimated unbilled revenues........................................

8,317 1,572 20,209 Materials and supplies...............

18,457 24,525 (5,776)

Accounts payable and accruals...................................

11,649 (41,516)

(50,810) i Other-net......

(4,247) 12,667 (2,221)

$464,404 $355,361

$348,199 Th3 recompanying notes am an integral part of these statements.

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25

Portland General Hectric Company and Suhaldiaries N testoFinancialStatem:nts NOTE 1.

SUMMARY

OF ACCOUNTING POLICIES The Company's accounting policies conform to generally accepted accounting princi-ples for regulated public utilities and are in accordance with the accounting require-mer ts and the ratemaking practices of the regulatory authorities havingjurisdiction.

j Consolidation Principles-The financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany balances and trans-actions have been eliminated.

Revenues-Effective January 1,1978, the Company changed to a methoo of account-ing to accrue the amount of estimated unbilled revenues for services provided to the month end to more closely match revenues and costs. Prior to this time revenues.

were recorded as customers were billed, principally on a cycle basis throughout each month. The cumulative effect of the change on years prior to 1978 is $16,348,000 less income taxes of $8,503,000.

Allowance for Rands Used During Construction ( ADC)- ADC mpresents the pretax cost of borrowed funds used for construction purposes and a reasonable rate for other(equity) funds. ADC is capitalized as part of the cost of utility plant and is cmdited to income but does not represent current cash earnings. The mavimum ADC rates used are determined by a formula established by the Federal Energy Regulatory Commission and were 12.25%,11.50% and 10.03% for the years 1980,1979 and 1978.

Depreciation-Depreciation is computed on the straight-line method based utou the estimated service lives of the various classes of plant in service. Depreciation expense as a percent of the related average depreciable plant in service approximated 3.3% in 1980, and 3.0% in 1979 and 1978.

Depreciation of the 'nojan nuclear plant ('IYojan) includes provisions for estimated decommissioning costs. Such provisions am included in current rates to customers based on estimated decommissioning costs of approximately $17,000,000. The Com-pany and the Public Utility Commissioner of Oregon (Commissioner) are continuing to review the decommissioning costs estimate, and it is expected that any increase in such costs will be provided for in future rate increases.

The costs of renewals and replacement of property units are charged to plant, and repairs and maintenance are charged to expense.The cost of property units atired, l

other than land, are charged to accumulated depreciation.

l Amortization of Nuclear Riel-The cost of nuclear fuel is amortized to expense based on the quantity of heat produced for the generation of electric energy. Effective January 1,1979, the Commissioner has allowed increased revenues to provide for the estimated cost of permanent storage including such cost for fuel consumed in i

prior years. The accumulated cost of permanent storage at December 31,1980 is l

$9,851,000, and is included in accumulated amortization of nuclear fuel.

Retirement Plan-The Company has a noncontributory pension plan covering substantially all ofits employees. The total pension expense for 1980,1979 and 1978 was $4,593,000, $3,865,000 and $3,290,000, including amortization of prior ser' rice costs over not more than 30 years. The Company makes annual contributions to the plan equal to the amounts accrued for pension expense. A comparison of the actu- -

arial present value of accumulated plan benefits (using an assumed interest rate of 7 %%) and net assets available for benefits is presented below.

January 1, January 1, 1980 1979 l

l

- (Thousands of Dollars) l Actuarial Present Value Vested.....

$38,859

$35,437 Nonvested..

1,564 1.995 S40,423

$37,432

$37,069

$33,196 Net Assets.

The present value of accumulated plan benefits and net assets available for benefits have not changed materially as of December 31,1980.

In addition to the retirement plan, the Company is providing for the unfunded liabil-ity for post retirement group life insurance benefits, which is estimated at $6,000,000 as ofJanuary 1,1980.

26

Deferred Power Costs-Effective November 15,1979, the Commissioner issued an order for a permanent power cost adjustment tariff (PCA). The PCA covers variable power cost deviations from a base rate, which includes Company-owned genemtion and purchased power costs. The base rate is adjusted quarterly by the Commissioner.

The PCA provides that 80% of the costs associated with unit price changes, above or below those included in the general tariffs, be collected or refunded through an adjustment to customers' bills. Allowed costs greater orless than the total monthly adjustment are deferred. As of December 31,1980 approximately $1,213,000 was undemollected and will subsequently be recovered through charges to customers'-

bills or offset against any future overcollection.

Income 'Ihxes-Deferred income taxes are provided for timing diffemnces between financial and income tax reporting to the extent permitted by the Commissioner for ratemaking purposes. Deferred taxes am not provided for a portion of accelerated depreciation which has the effect of passing such reductions on to the Company's customers. Portions of deferred income taxes are classified as current liabilities to the extent the related assets are current.

'Ihx reductions resulting from investment tax credits are deferred and subsequently amortized to income over a 30-year period, the approximate life of the related prop-erties. The Company estimates it has approximately $95,000,000 ofinvestment tax credit carryforwards available for application against any future Federal income tax payments. Approximately $29,000,000 of these carryforwards expire in 1982 and ~

$40,000,000 expire in 1987.

NOTE 2.

INCOME TAX EXPENSE The following table shows the detail of taxes'on income and the items used in computing the differences between the statutory Federal income tax rate and the Company's effective tax rate.

Years Ended December 31 1980 1979 1978 Income Tax Expense (Thousands of Dollars)

Utility Currently payable.

$ 2,114

$ 143 $ (25)

Deferred income taxes Capitalized interest......

24,987 7,943 3,342 Accelerated depreciation.

9,422 3,361 1,354 Deferred powercosts.

(1,810) 1,810 -

Unbilled revenue.........

3,020 207 872 Nuclear fuel-negative salvage value (3,492)

(931)

Capitalized payrolltaxes and other empicyee benef~ts.

2,804 580 Other.

(147)

(711)

(472)

Investment tax credit adjustments (151)

(102)

(103)

"Ibtal utility..

36,747 12,300 4.968 Nonutility Currently payable.

(1,910) 265 (8)

Deferred income taxes.

' (16) 1,153 (3,103)

Totalnonutility (1,926) 1,418 (3.111) 34,821 13,718 1,857 Cumulative effect of accounting change Deferredincometaxes.

8,503 Totalincome tax expense.

$34,821

$13,718

$10,360 Effective'Ihm Rate Computed tax based on statutory Federal income tax rates applied to income before income taxes and cumulative effect or accounting change.

$55,670

$27,526

$24.307 Isss reduction in taxes resulting from Accelerated depreciation........

6,904 6,019 12,921 Allowance for equity funds used during construction.

14,728 12,699 6,612 other (783)

(4.910) 2.917

$34,821

$13,718

$ 1,857 Effective tax rate.

28.8%

22.9%

3.7%

27

Portland General Electric Company and Subsidiaries The Company has a Federalincome tax net operating loss carryforward of approxi-mately $8,500,000 which expires in 1986. Deferred taxes will be recorded to the extent that the loss carryforward is realized.

NOTE 3.

COMMON AND CUMULATIVE PREFERRED STOCK The following changes occurre..

9.1%

9.1%

Long.'Ibrm Debt (thousands).

$1,054,185

$754,441 Interest (thousands)..

$93,886

$70,326 Embedded cost 9.8%

9.3%

EMPLOYEE Numberof Employees (Demmber31k.

3,106 2,789 '

DATA Operating Payroll (thousands)..

4

$46,590

$37,105 Construction and Other Paymil(thousands)

$32,701

$25,183 36

^

1978 1977 1976 1975 1974 1973 1972 1971 1970 5,365 5,120 b,024 4,982 4,700 4,685 4,624 '

4,414 4,023 3,403 3,175 3,045 3,169 2,632 2,649 2,509 2,235 2,086 3,351 3,486 3,439 2,699 3,3f4 3,285 3,135 2,788 2,524 113 109 107 104 1C,6 113 119 134 141 1,1'73 44 394 530 600 829 1,781 1,391 930 13,30G 11,934 12,009 11,484 11,402 11,561 12,168 10,962 9,704 5143,829

$130,052

$109,571

$ 88,351

$ 73,124

$ 63,007

$ 57,142

$ 54,249

$ 45,206 77,000 64,695 56,027 53,628 41,881 36,691 31,983 29,155 25,192' 52,662 47,721 39,654 24,504 20,888 16,806 14,294

-13,106 11,070 12,107 6,996 7,073 8,898 6,970 5,235 5,444 5,639 4,933 18.060 3,609 5,462 4,561 3,138 3,094 3,580 2,770 1,889

$303,678

$253,073

$217,787

$179,942

$146,001

$124,833

$112,443

$104,919

$ 88,290 2.30' 2.08' 1.80' l.55' l.29' l.11' 1.02' l.04'

.968 407,056 389,700 371,315 358,438 347,671 338,188 323,729 318,132 304,504 52,107 49,883 47,071 45,547 44,143 41,521 40,373 38,076 36,919 187 192 192 187 199 188 186 164 147

' t,347 1,444 1,367 1,370 1,397 1,047 1,125 1,906 1,949 1

2 3

3 1

5 2

1 1

460,698 441,221 419,948 405,545 393,411 380,949 365,415 358,279 343,520 13,459 13,455 13,787 14,139 13,733 14,144

-14,334 14,197 13,427 5360.81

$341.76

$300.68

$250.74

$213.67

$190.22

$177.14

$174.49

$150.87 2.68' 2.54' 2.18' 1,778 1.56' l.34'

' 1.24' l.23' l.12' 2,313 2,114 2,537 2,693 2,753 2,282 2,779 2,685 2,402 1,307 4,675 1,147 170 152 328 10.819 5,936 9,214 9,613 9,465 9,806 10,463 9,265 8,189 14,439 12,725 12,898 12,476 12,370 12,416 13,242 11,950 10,591 1,134 791 889 992 968 855 1,074 988 887 13.305 11,934 12,009 11,4 _84 11,402 11,561 12,168 10,962 9,704

,788

.52'

.46'

.33'

.39'

.25'

.10'

.12'

.08'

.71'

.68'

.34'

.43'

.28'

.31'

.24'

.24'

.2 P

$278,265

$201,896

$191,475

$182,513

$153,580

$152,198

$110,431

$50,298

$34,555 -

$1,482.862

$1,245,532

$1,088,253

$946,165

$785,312

$668,336

$529,724

$430.474

$390,588

$478,759

$410,323

$361,070

$283,938

$241,965

$187,746

$182,823

$157,052

$132,579

$13.42

$18.45

$18.94

$18.32

$17.92

$17.88

$17.41

$16.53

$15.60 i

$130

$1.685

$1.625

$1.565

$1.51

$1.465

$1.41

$1.36

$1.28 24,709,9.7 21,414,344 17,687,431 14,333,333 12,125,000 10,500,000 9,666,667 8,666,667 8,350,000

$1.72

$1.09

$2.27

$2.52

$2.17

$2.04

$2.11

$2.00

$1.63

$151,500

$154,500

$130,500

$108,500

$80,000

$80,000

$40,000

$10,000

$10,000

$14.175

$13,657

$11,812

$9,818

$6,577

$5,247

$2,196

.$976

$152 l

9.2%

9.2%

9.3%

9.1%

8.2%

8.2%

8.4%

9.8%

. 9.8%

$735,119

$656,724

$533,450

$444,991

$335,344

$326,403

$277,669

$261,529

$244,178

$58,206

$48,528

$40,711

$28,519

$20,734

$18,591

$15,132

$13,667

$11,377 9.3%

8.3%

8.0%

8.1%

6.3%

6.2%

5.8%'

5.6%

5.4%

2,579 2,441 2,311 2,116 2,008 1,881 1,767 1,704 1,604 L

$31.631

$27,808

$22,798

$18,498

$15,703

$13,982

$12,879

$12,151

$10,746

[

$21,293

$19,647

$18,564

$18,033

$14,493

$12,117

$10,039

$8,748

$7,443 37 t

P;rtirnd General Electric C:mpany M rk:tandDivid:ndInf;rmati:n COMMON STOCK The Company's common stock is principally traded on the New York Stock Exchange.

The following table shows the high and low sales prices of the common stock on the composite tape (as reported by The Wallstreet Journal) during the respective periods.

1980 1979 Ouarter ist 2nd 3rd 4th 1st 2nd 3rd 4th TRANSFER AGENTand REGISTRAR High.

14 %

14 %

14 %

14 %

18 %

17%

17.

16%

Low.

10 %

i1%

12 %

I1%

16%

16 %

15 13 COMMON STOCK and PREFERRED STOCK Ouarterly cash dividends paid per share were at the rate of 42%'(January, April, July United states National Bank and October of 1980 and 1979).

ofOregon The approximate number of stockholders as of December 31,1980 is 97,044.

.O Bo 3 Portland,OR 97208 503-225-6474 PREFERRED STOCK The 11.50% and $2.60 series of preferred stock are listed on the New York Stock Ex-NEW YORK STOCK change. The following table shows the high and low sales prices of these two series EXCHANGE on the composite tape (as reported by The WallStreet Journal) for the respective

. hading symbol: PGN periods. The remaining five series are traded infrequently over the counter and dis-closure of quarterly plice ranges is not meaningful.

1980 1979 Quarter 1st 2nd 3rd 4th 1st 2nd 3rd 4th

$2.60 lligh.

21 %

22 21 19 %

25 %

25 25 23 %

love 17 17 18 %

16 %

23 %

23 %

23 19 %

I 1.50% Ifigh 95 95%

97 91%

106 %

104 %

103 100 %

low.

82%

83 92 78 %

100 %

100 %

100 90 %

Ouarterly cash dividends were paid on each class of the Company's preferred stock at its stated rate during 1980 and 1979.

Quarterly Comparison for 1980 and 1979 March 31 June 30 September 30 December 31 (Thousands of Dollars) 1980

$131,349

$96,746

$120,044

$142,098 Operating revenues Operating income.

$ 38,009

$18,059

$ 30,951

$ 45,174 Net income.

$ 32,256

$10,764

$ 17,325

$ 25,855 Income available for common stock...

$ 28,838

$ 7,353

$ 13,914

$ 22,488 Common stock 35,551,321 35,705,398 35,359,528 36,038,237 Average shams outstanding.

_ Earnings per share.

$.81

$.21

$.39

$.62 1979 Operating revenues

$ 97,679

$81,081

$ 72,224

$98,997 Operating income.

$ 30,214

$20,682

$ 15,794

$ (1,401)

Net income.

$ 22,729

$17,134

$ 9,974

$ (3,715)

Income available for common stock

$ 19,260

$13,631

$ 6,520

$ (7,169)

Common stock Average shares outstanding.

27,740,339 31,171,754 31,284,492 31,419,060 Earnings per share *

$.69

$.44 S.21

$(.23)

• As a result of dilutive effect of shares issu-d d uring the period. quarterly earnings per share cannot be added to arrive at annual earnings per share.

A copy of Form 10 K including the financial statements and the schedules thereto is available without charge upon written request to James N.

Woodcock, Mce President and 'neasurer, at the address below:

Portland General Electric Company PORTLAND GENERAL (Home Office)

ELECTRIC COMPANY 121 s.W salmon street 121 s.W salmon street.

Portland. OR 97204 Portland. Oregon 97204 503 226-8333 38

SERVICE AREA

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. 7, Located in the heart of Oregon's population center, PGE provides service to 54 incorporated cities and 40 percent of the State's population in a compact and efficient 3,350 square-mile area.

39

SENIOR OFFICERS BOARD CF DIRECTORS mr.aor==e Robert H. Short Warren W.Braley 1957 Chairman of the Board and Partner. Braley & Graham Portland-Buick and opel automobile dealer Chief Executiveof!1cer William J. Lindblad.

1980 William J. Lindblad President. Portland General Electric Company-electric utility President William E. Love 1977-Jose h L Williams Chairman and Chief Executive otricer.

ViceC altmanof theBoard Equitable Savings & Iman Association. Ponland James W. Durham Ernest H. Miller 1963 Senior Vice President.

President, Mortgage Bancorporation. Salem-real estate loans and GeneralCounnel and Secretary investments throughout oregon Ken L Harrison Wade Newbegin* '

1948' Senior Vice President-Finance President and Chairman of the Board. R. M. Wade & Co.,

and Chief Financial officer Portland -manufacturer and distabutor of pumping farm and Charles L Heinrich

dgau nequipmmt.

fj,*j,V, President - Regulation-Robert W. Roth

'1972 President and Chief Executive officer. Jantzen. Inc Portland. a wholly d *ubsid ary w Blue Bel. Inc-manufactum a sponswear wj Glen E. Bredemeier Z,1 u Vice President-Power operations Charles Goodwin, Jr John L. Schwabe 1977 Vice President-Thermat operations Partner. Schwabe. Williamson,Wyatt. Moore and Roberts-Portland attorneys fhas e Pre i ent Administrative Services f e Bo and Chief Executive Oficer.

as E. Heider P rtland General Electric Company Portland-electric utility Dougsident-Public Afairs Vice Eberl Thompson

• 1960 L. E. Hodel Po"l'a - p"' "*118"""5' Vice President-Engineering' Construcuan W. T.

tt. Jr.

1969 Formerly estdent and Chief Executive 051cer Baza'r,Inc. Portland William June vice President-Corporate Planning James J. Walton*

1948 Consulting civil engineer > retired. Salem Hillman Lueddemann.Jr.

Vice President and Assistant to the EarlWantland

'1973 Chairmanof theBoard Presidentand Chief Executiveofficer.3rktronix.Inc Beaverton-manufacturer of electronic equipment Vice President-operating Services -

Frank M. Warren 1949 Retired Chairman of the Board and Chief Executive oficer.

E.Ka Stepp Portland General Electric Company. Portland-Vice Pr ident-Human Resources electric utility E D. Wieden William W.Wessinger 1968 Vice President-Public Relations Chairman of the Board. Bratz-Weinhard Company. Portland-a wholly owned subsidiary of Pabst Brewing Co.

Vice President-svision operations Robert J. Wilhelm 1973 Pmidet.WUhdm WucW Co, Ponland-trucbg and warehousing Bart D. Withers vice President-nuclear Josep'h L Williams 1980 c *' '" #

' " ' " ' " " ' "'^*

""'"#~

James N. Woodcock E',c'tric tEity Vice President and Reasurer Ral h E. Williams 1963 games L Staines '

rmfdent. williams investment Co., Portland-personal investments

' Advisory Mount St.Helens eruptions have caused noproblems on oursystem ather than providing an occasional light sprinkleofash. The mountain is30 miles north ofournearestpoint ofservice. The eruptions are spec-tacular,and we haveincluded this frameablephoto of the violent eruption which occurred on Sunday, May18,1980.

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"E Portl'nd General Electric Company 121 S.W. Salmon Street Portirnd, Oregon 97204 l

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