March 01, 2007

Portland General Electric reports fourth quarter and 2006 earnings results
Announces dividend and increases 2007 guidance

Portland, Ore. — Portland General Electric Company (NYSE: POR) today reported net income of $40 million, or $0.64 per diluted share, for the fourth quarter ending Dec. 31, 2006, compared to a net loss of $9 million, or $(0.15) per diluted share, for the fourth quarter 2005. Results were primarily driven by higher energy deliveries and by lower power costs due to improved hydro conditions and the availability of the Boardman power plant.

For twelve months ending Dec. 31, 2006, the company reported net income of $71 million, or $1.14 per diluted share, compared to net income of $64 million, or $1.02 per diluted share for 2005.

“2006 was an exciting year for Portland General Electric as we once again became a publicly traded company headquartered in Oregon,” said Peggy Fowler, CEO and president of Portland General Electric (PGE). “In 2007, we look forward to bringing our new 400-megawatt Port Westward plant online, completing Phase I of the Biglow Canyon Wind Farm project and continuing to provide our customers with safe, reliable power.”

Fourth Quarter 2006 Summary

• Total retail energy deliveries for the period increased 2.3 percent to 5,118,000 MWhs in 2006 from 5,003,000 MWhs in 2005.
  
  
• Total operating revenues increased by 7.5 percent to $416 million from $387 million in 2005. This was primarily the result of a 3.7 percent rate increase effective Jan. 1, 2006, and increased energy sales across all customer classes partially offset by a $9.8 million pre-tax reserve taken related to Senate Bill 408 (SB 408).
  
  
• Purchased power and fuel expense decreased by $42 million as a result of the expense for increased loads being more than offset by improved hydro availability and the Boardman plant operating in the fourth quarter 2006 versus the extended outage experienced during the fourth quarter of 2005. Additionally, the roll-off and settlement of previously marked power and fuel contracts resulted in a mark-to-market gain of $14 million in 2006 versus a mark-to-market loss of $14 million in 2005. Another offset to power costs in 2006 was a deferral, for later ratemaking treatment, of $6 million related to the Boardman outage.
  
  
• Production, distribution, administrative and other expenses increased by $5 million compared to last year’s fourth quarter due primarily to higher employee benefit expenses, and storm restoration and tree trimming costs.

Full Year 2006
For the twelve months ending Dec. 31, 2006, net income was $71 million, or $1.14 per diluted share, compared to $64 million, or $1.02 per diluted share, for the same period in 2005. Annual results were driven by increased revenues, partially offset by a reserve for SB 408, and increased purchased power and fuel costs due to increased loads and higher average power costs. Additionally, the Company had increased production and distribution expenses and higher miscellaneous income.

Full Year 2006 Summary

• As of Dec. 31, 2006, PGE served approximately 793,000 customers as compared to approximately 780,000 on December 31, 2005, a 1.7 percent increase.
  
  
• Total retail energy deliveries increased 3.6 percent (2.7 percent weather adjusted) to 19,432,000 MWhs in 2006 from 18,754,000 MWhs in 2005.
  
  
• Total operating revenues increased by 5.1 percent, to $1,520 million in 2006 from $1,446 million in 2005. This was primarily the result of a 3.7 percent rate increase effective Jan. 1, 2006, and higher energy sales. Increased operating revenues were partially offset by a $40 million pre-tax reserve related to SB 408.
  
  
• Purchased power and fuel expenses increased by $92 million primarily due to higher power purchases required to meet increased total system load, an increase in the cost of replacing generation at Boardman of approximately $52 million in 2006 compared to $40 million in 2005, and higher wholesale prices. Partially offsetting incremental replacement power costs in 2006 was a deferral, for later ratemaking treatment, of $6 million related to the Boardman outage.
  
  
• Company generation decreased about 8 percent from 2005, with reduced thermal generation due primarily to the Boardman outage. The decrease was partially offset by a 28 percent increase in PGE hydro production, resulting from increased stream flows. PGE’s hydro production met approximately 10 percent of PGE’s retail load in 2006, compared to 8 percent in 2005, while output received under long-term power purchase contracts from mid-Columbia River hydro projects met approximately 14 percent of total retail load, compared to 15 percent in 2005.
  
  
• Production, distribution, administrative and other expenses increased by $8 million compared to 2005. Higher expenses in 2006 resulted from maintenance and repair activities at PGE’s thermal generating plants, service restoration costs related to wind storms during the year, and increased tree trimming costs.
  
  
• Other income increased by $13 million due primarily to higher AFDC equity and a one-time reserve taken in 2005.

Capital Expenditures
PGE’s capital expenditures for 2006 were $371 million compared to 2005 expenditures of $255 million. Capital expenditures for 2006 included $144 million for ongoing production, transmission and distribution facilities, $48 million for the Biglow Canyon Wind Farm, $24 million for hydro relicensing projects and $155 million for Port Westward, the Company’s new natural gas-fired plant, currently under construction in Clatskanie, Ore., which is expected to go into service in late April of 2007.

Capital expenditures in 2007 are estimated to be $436 million. This includes $203 million for Phase I of the Biglow Canyon Wind Farm, $179 million for ongoing production, transmission and distribution facilities, $42 million for hydro relicensing projects and $12 million for Port Westward. Capital expenditures do not include the advanced metering infrastructure project, which the Company continues to pursue with the Oregon Public Utility Commission (OPUC).

Revised 2007 Earnings Guidance
PGE is revising its full-year 2007 earnings guidance from $1.70 - $1.80 to $1.90 - $2.00 per diluted share. Guidance is revised upward by approximately $0.30 per diluted share due to a $20.4 million pre-tax deferral related to the Boardman outage as well as the associated interest and Senate Bill 408 impacts. This increase was partially offset by a reduction of $0.11 per diluted share related to the final order on PGE’s most recent general rate case.

Dividend
On Feb. 22, 2007, the PGE board of directors approved a quarterly common stock dividend of 22.5 cents per share. The dividend is payable on April 16, 2007 to shareholders of record at the close of business on March 26, 2007.

Overview of Recent Developments
General Rate Case
On Jan. 12, 2007, the OPUC issued a final order (Order) in a general rate case proceeding which addressed PGE’s proposed revenue requirements and the inclusion of Port Westward in rates. The OPUC approved a reduction in rates of $21.6 million, which was effective Jan. 17, 2007 and an increase in rates of $42.1 million for Port Westward to be effective with the in service date of the facility. The OPUC had previously approved an increase in annual revenues of $74.1 million for net variable power costs effective Jan. 1, 2007, related to the 2007 Resource Valuation Mechanism (RVM) filing. The overall increase in annual revenues approved by the OPUC for 2007 for the RVM, the general rate case, and Port Westward proceedings was $94.6 million, or 6.4 percent, with an allowed return on equity of 10.1 percent and a 50 percent equity capital structure.

The Order approved an Annual Power Cost Update Tariff. This tariff, which replaces the RVM, provides for annual rate adjustments to reflect updated forecasts of net variable power costs for future calendar years. The Order also approved a new Power Cost Adjustment Mechanism (PCAM) by which PGE can adjust future rates to reflect a portion of the difference between each year’s forecasted and actual net variable power costs.

Port Westward
PGE is nearing completion of Port Westward, its new 400 MW, natural gas-fired plant, with generating capacity to power approximately 300,000 homes annually. PGE is presently in the testing phase and expects the facility to go into service in late April 2007.

Biglow Canyon Wind Farm
PGE has executed an agreement with Vestas Wind Systems, of Denmark, to acquire 76 wind turbines for the first phase of the Biglow Canyon Wind Farm, located in Sherman County, Oregon. PGE has also entered into a contract for construction of Phase I with D.H. Blattner & Sons, Inc. Completion of Phase I of the project will provide 125 MW and is expected by December 2007. Total project costs for the first phase will be approximately $260 million. PGE will file a rate application with the OPUC on March 2, 2007, seeking an increase in annual revenue requirements of approximately $13 million for full recovery of all costs related to the first phase of the Biglow Canyon Wind Farm.

Boardman Plant Power Cost Deferral
The Boardman Power Plant was taken out of service from late October 2005 to late May 2006 for repairs to the plant’s turbine and generator rotors. The plant was again taken out of service in early June for repairs to its low pressure turbine unit; upon completion of these repairs, the plant returned to full operation on July 1, 2006. Total incremental power costs to replace the output of the Boardman plant were approximately $92 million, including $52 million in 2006. PGE filed an application with the OPUC for recovery of excess power costs, estimated at $46 million, for the period Nov. 18, 2005, through Feb. 5, 2006. On Feb. 12, 2007, the OPUC issued an order authorizing PGE to defer for future rate recovery $26.4 million of excess power costs related to Boardman’s extended outage. Recognition of this deferral includes $6 million in the fourth quarter of 2006 and $20.4 million to be recorded in 2007. Actual recovery of deferral amounts is contingent on a future ratemaking proceeding including a prudency review and an earnings test.

Senate Bill 408
Senate Bill 408 (SB 408) attempts to more closely match income tax amounts forecasted to be collected in revenues with the amount of income taxes paid to governmental entities by investor-owned utilities or their consolidated group. It requires that utilities file a report with the OPUC each year regarding the amount of taxes paid by the utility or its consolidated group (with certain adjustments), as well as the amount of taxes authorized to be collected in rates, as defined by the statute. This report is to be filed by October 15th of the year following the reporting year. If the OPUC determines that the difference between the two amounts is greater than $100,000, the utility is required to adjust its rates. The first rate adjustment under the law applies to taxes paid to units of government and amounts collected from customers on or after Jan. 1, 2006.

Based on PGE’s assessment of permanent rules adopted by the OPUC in September 2006 to implement SB 408, the Company has estimated and recorded potential refunds to customers of approximately $42 million (including $2 million in accrued interest) for the year 2006. Any refunds to customers for the 2006 tax year would begin after June 1, 2008. PGE will continue to evaluate its options for changing or modifying the legislation and Rules.

Stock Distribution
The Disputed Claims Reserve (DCR) continues to report distributions of PGE common stock to Enron creditors with allowed and settled claims. Most recently, approximately 350,000 and 478,000 shares were distributed on Dec. 1, 2006, and Feb. 1, 2007, respectively. These distributions reduced the total shares held in the DCR to approximately 51 percent of total shares outstanding. Subsequent distributions are expected to occur on a bi-monthly basis.

Fourth Quarter and 2006 Earnings Call and Webcast March 1, 2007
PGE will host a conference call with financial analysts on Thursday, March 1, 2007, at 5 p.m. EST. The conference call will be webcast live in our Investors section. A replay of the call will be available beginning at 7 p.m. EST on Thursday, March 1 and will continue through Thursday, March 8.

Peggy Fowler, CEO and president; Jim Piro, executive vice president, CFO and treasurer; and Bill Valach, director of investor relations will participate in the call. Management will respond to questions following formal comments. The attached consolidated income statements, balance sheets, cash flow statements and supplemental operating statistics are an integral part of this earnings release.

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