SACC EBlast Feb. 20, 2010

PGE seeks price changes beginning January 2011

As we plan for Oregon's energy future, it's important to keep you, our customers and stakeholders, informed about significant issues. So I wanted to let you know Portland General Electric has asked the Oregon Public Utility Commission to begin a comprehensive review of PGE's costs of providing service and to approve new customer prices to take effect in January 2011. Today's filing begins a 10-month public process designed to review our request for an overall price increase of 7.4 percent.

The decision to seek a price adjustment was not one we took lightly, especially considering the current economic environment. At the same time, we can't ignore needed investments in new energy resources to meet the growing demand for electricity, as well as critical system maintenance investments necessary to continue to provide safe, reliable energy and services that meet our customers' expectations.

If, after a thorough examination of PGE's costs and analysis, the commission approves our request, a typical residential customer will see a monthly bill increase of about $6.70. The combined average price change for large commercial and industrial customers would be 5.4 percent. Impacts will vary by individual rate schedules.

About half of the requested amount will be spent on system investments to meet the growing energy demands of the region, including:

Phase III of PGE's Biglow Canyon Wind Farm project, which will help meet the state's requirement that PGE derive 25 percent of its electricity from renewable resources by the year 2025.

Federally-mandated improvements at our hydroelectric facilities on the Clackamas River, which will allow customers to continue to count on these low-cost hydro resources for decades to come.

The request also includes both capital costs and operational savings stemming from completion of a new network of smart meters. The remainder of the request reflects operating costs PGE must incur to support continued and future excellence in customer service; maintain safe, efficient and effective operations; and address new regulatory requirements. It also addresses needed updates to our information technology systems and rising health insurance premiums for employees.

There were a number of factors that helped keep our proposed increase as low as possible. These include the lower price of natural gas, which will help reduce costs for wholesale power and fuel purchases, as well as ongoing company efforts to reduce costs and find ways to serve our customers more efficiently.

As I mentioned, this is a lengthy process. My commitment to you is to keep you informed along the way and make sure we provide the necessary information to address any questions or concerns you may have. If you are interested in learning more about this issue, I invite you to read our news release and a Q&A (PDF) that provides more details. We've also prepared a video that we're making available for customers who visit us at PortlandGeneral.com.

On behalf of PGE and our 2,700 employees, I want to thank you for the opportunity to continue our ongoing dialogue about issues of importance to you, our customers and our state.

Jim Piro
President and CEO