Good morning, everyone, and welcome to the Portland General Electric Company’s fourth quarter 2009 earnings results conference call. Today is Thursday, February 25, 2010. This call is being recorded, and as such, all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions). For opening remarks, I would now like to turn the conference call over to Portland General Electric’s Director of Investor Relations, Mr. Bill Valach. Please go ahead, sir.

Thank you, Cachetta and good morning, everyone. We’re very pleased that you’re able to join us today. Before we begin our discussion this morning, I’d like to make our customary statements regarding Portland General Electric’s written and oral disclosures to commentary that there will be statements in this call that are not based on historical facts and as such, constitute forward-looking statements under current law. These statements are subject to factors that may cause actual results to differ materially from the forward-looking statements made today. For a description of some of the factors that may occur that could cause such differences, the Company requests that you read our most recent Form 10-K and Form 10-Qs. Form 10-K for 2009 was available this morning at portlandgeneral.com. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, and this Safe Harbor statement should be incorporated as part of any transcript of this call. Portland General Electric’s fourth quarter and annual 2009 earnings were released before the market opened today, and the release is available at portlandgeneral.com. And with me today are Jim Piro, President and CEO, and Maria Pope, Senior Vice President of Finance, CFO and Treasurer. And it’s a pleasure now for me to turn the call over to Jim.

Thank you, Bill. Good morning, everyone, and thank you for joining us. Welcome to Portland General Electric’s 2009 Year End and Fourth Quarter Earnings Call. 2009 was a challenging year for our business and our customers. As the national recession impacted Oregon, we maintained our focus on operational excellence. We’ve put a special emphasis on reducing costs in the short-term and focusing on continuous improvements and sustainable cost efficiencies for the long-term. We work closely with our customers to support their needs through energy efficiency and flexible payment options. We made progress executing our strategic initiatives. And we continued our efforts to work with key stakeholders to help them understand our business and our challenges. This includes (inaudible) cost recovery, sharing risks appropriately and earning a fair return for our shareholders. On today’s call, I will address the key drivers of 2009 earnings. I will also provide more clarity around the key drivers for our revised 2010 earnings guidance. I will give an outlook for Oregon’s economy and our operating area. Finally, I will update you on PGE’s strategic direction and capital investment opportunities included in our integrated resource plan. Then Maria will provide details on the fourth quarter and year end results, financing and liquidity and current regulatory proceedings, focusing on the general rate case we filed on February 16. So let’s begin. PGE’s net income for 2009 was $95 million or $1.31 per diluted share compared to $87 million or $1.39 per diluted share for 2008. 2009 earnings were a result of the following key drivers The impact of the economic recession on retail loads; and increase in power costs due to poor hydro conditions and a prolonged outage at Colstrip Unit 4; and increase in the fair value of nonqualified benefit plan assets; the OPUC order on…

Good morning. Fourth quarter 2009 net income was $8 million or $0.11 per diluted share. This compares to $20 million or $0.32 per diluted share for the fourth quarter of 2008. The major items that impacted results include revenues, which increased by $36 million, primarily due to a $30 million increase from higher prices granted in 2009 general rate case. And an 11 million increase related to revenue requirements for Biglow Canyon Phase II. A $4 million increase driven by retail sales, which were up 1%. This was the result of a 3.4% increase in residential deliveries, given colder weather in November and December, offset by a 3.9% decrease in commercial and industrial energy deliveries. These increases were offset by $15 million decrease in wholesale revenues, consisting of a 22% decline in market prices and an 18% decrease in volume. Purchase power and fuel expense increased by $54 million in the fourth quarter of 2009 compared to the fourth quarter of 2008. This reflects the impacts of the following Increased cost of purchase power, including incremental replacement power costs due to the Colstrip outage, partly offset by lower wholesale sales. Increased costs of power generated, largely due to higher fuel costs. And the $18 million write-off of a portion of the regulatory asset related to Boardman’s forced outage from late 2005 to early 2006. Production and distribution expense increased by $7 million, this was primarily the result of an agreement not to seek regulatory recovery of $6 million of costs associated with the Selective Water Withdrawal system construction delay. We are pursuing insurance coverage and cost recovery from firms involved with design, construction and installation of the system. The project is currently in customer prices, effective February 1st the date project was in service. Administrative and other expenses decreased by…

Thanks, Maria. Looking ahead, we will continue our focus on operational excellence through actively managing our costs and monitoring our performance metrics. We will do this through our companywide efforts on efficiency and cost-effectiveness, while not losing sight of the importance of delivering high customer value. We will continue to work with our regulators and our customers to help them understand the challenges our business is facing and the importance of a fair and reasonable cost recovery so that we can deliver the service, safety and system reliability our customers expect at the lowest possible cost. Finally, we will continue to pursue solid, rate-based investments in generation, transmission and distribution assets that will deliver value to our customers and shareholders. Operator, we would now like to open the call for questions.

(Operator instructions) And your first question comes from the line of Brian Russo with Ladenburg Thalmann. Brian Russo – Ladenburg Thalmann: Hi, good morning.

Brian Russo – Ladenburg Thalmann: Pretty good, thanks. You mentioned up to $300 million of potential equity needs in '11. Can you comment on your potential debt needs in 2011 as well?

Maria will take that.

Sure. At this point in time, we are not estimating issuing any debt in 2011. Both of those assumptions, the equity and the debt are based on the level of capital expenditures that we will see in addition to our base capital from the IRP, as that’s resolved. Brian Russo – Ladenburg Thalmann: So I guess your equity ratio is likely to fall meaningfully below the 50% mark by year-end '10 with the debt issuances in 2010 and then the up $300 million of equity issuances in '11 get you back up to the 50%, is that correct?

We are below our target right now by about three points. We expect to be lower by about another point at the end of 2010 and then to be slightly higher at the end of 2011, with some excess cash for what we’re expecting to be capital expenditures in 2012 associated with the IRP. Brian Russo – Ladenburg Thalmann: Okay. Can you repeat your comments on the collateral returns you expect in 2010 and 2011?

Sure. We, first of all, we have $200 million in collateral currently outstanding at December 31. And given no price changes, we expect 65% of that to be returned in 2010 and 25% of that in 2011, with the balance in '12 and beyond. Brian Russo – Ladenburg Thalmann: Okay. And then just on your guidance, I am a little surprised that you would revise it lower based on current hydro conditions. Am I correct in assuming that February is generally a trough month and there tends to be improvements as we move through March and April? So if indeed we do get improvements in hydro, would that create sensitivity in your adjusted guidance?

That’s a great question, Brian. I think we struggled a lot with the hydro. We are seeing a very strong El Nino effect in the Northwest and it just seems stronger than we’ve seen in the past. You are correct that we have seen snowfall in March and we can get fairly significant snowfall in March but the weather forecasters are saying that the El Nino effect is pretty strong and so given that, we thought about waiting on the hydro, but it’s out there, it was pretty clear that the forecasts were down and there has been a fair conversation around it. So there is some potential we could get a recovery in March, but just given the weather factors we’re looking at, we just felt like it was important to kind of communicate that to the market. If we were to get significant snowfall in March that might change our perspective, but the probabilities just don’t seem to be weighing in that direction at this point. Brian Russo – Ladenburg Thalmann: Okay, thank you very much.

Thanks, Brian.

And your next question comes from the line of Jaideep Malik with Goldman Sachs. Jaideep Malik – Goldman Sachs: Hey, good morning.

Good morning. Jaideep Malik – Goldman Sachs: I had a question about the rate case. What are the O&M costs that are typically not recovered in these rate cases, the amounts and all? And has this like changed since the last case when you filed this testimony?

There’s just a couple things that we made adjustments in actually the rate case filing. On the incentive side, the last rate case, the Commission decided to allow us to recover half of all non-officers incentives and none of the officers’ incentives. That’s been kind of a latest practice in Oregon. In the case, we filed in consistent with what the PUC decided in the last rate case. So, a portion of the incentives are not recovered in our customers’ prices. Now, we structure our incentive plans to address that. So we’ve kind of taken that off the table. The other issues are around our deferred comp plans and some of the plans that we run where we defer executive and high compensated employees’ salary and then that goes into a separate plan. That typically is not recovered in customers’ prices. And then advertising kind of image advertising, which is kind of below the line expense that’s typically not allowed in customers prices. Other than that, all our costs should be recoverable in customer prices. And I think our case demonstrates those costs are prudent and reasonable. Jaideep Malik – Goldman Sachs: Any way to quantify those amounts?

I think you could look back at the last rate case. I don’t have the numbers here. Maria, I don’t know if you have them.

It is pointed out in the rate case filing. It generally is about 3.25 to a 1% of ROE. Jaideep Malik – Goldman Sachs: Okay. That is the only question I had. Thanks.

Thank you.

And your next question comes from the line of Nancy Doyle with MetLife. Nancy Doyle – MetLife: Yes, hi. Could you explain to me again how the deadband works and why the higher purchase power fuel expenses you experienced weren’t recovered from rate payers?

Talking about 2009 specifically? Nancy Doyle – MetLife: Yes.

Maria, why don’t you go through that?

Sure. The deadband has two parts to it. The first is we start with base line that variable power costs and then we are 150 basis points above or 75 basis points below. And so, for this year, the $22 million higher cost would fit into that 150 basis points above for higher costs. That’s the first test. The second test, which came into play last year is, is that we only have a customer refund, if we are over 100 basis points or under 100 basis points of our target ROE of 10%. So, last year, we were under 10% in our results and we did not have a refund based on the second part of that test.

Last year, we’re actually over $22 million in 2009?

Yes, so, we didn’t have a refund. I said at the wrong way. We were over instead of under. Sorry.

Last year, we were at $22 million, so we still didn’t get through the deadband, and so as a result we didn’t have the ability to surcharge our customers. Nancy Doyle – MetLife: Okay. And then in your rate case that you’re finally now you said you’re going to be addressing that asymmetric deadband?

Yes, this has been a continuing issue, Nancy. A few years ago, we did not have a PCAM mechanism at all. We put a proposal forward, negotiated with the parties. The Commission ultimately decided on this structure that we currently have, which is not symmetrical. We really feel that we have some ability to absorb some cost, but the deadband gets larger and larger as we grow our rate base and puts us exposed to significant risk, which affects our metrics and our bond ratings, potentially, as well as our stock price, because of that volatility. So in the rate case, we’ve requested a smaller deadband and a symmetrical deadband and we will argue real hard and try to convince the Commission and the parties that this makes sense for both our customers and our investors. So, it’s a $10 million on the up and down side without any change over time and then a 90-10 sharing above those numbers or below those numbers. Nancy Doyle – MetLife: And what was your earned ROE last year?

It was right about 6.4%. Nancy Doyle – MetLife: And in addressing the dividend, you increased it in May. Your plans for a dividend increased this year?

Typically, we look at the dividend in May with our Board and will look at operating cash flows, we’ll look at needs for capital and we will make that decision in May. And that’s typically the time we address it. I can’t tell you how we’ll decide on that issue at this point. Nancy Doyle – MetLife: Thank you.

Thank you, Nancy.

And your next question comes from the line of Igor Grinman of Zimmer Lucas Partners. Igor Grinman – Zimmer Lucas Partners: Hey, guys, actually, my questions have been answered. Thanks.

Thank you.

And your next question comes from the line of Gavin Tam with Macquarie. Gavin Tam – Macquarie: Hi, good morning, guys. Question on decoupling. I guess my understanding is that the large C&I customers aren’t covered under your current decoupling. And then your rate case, I understand that you’re just asking for an extension of your pilot. But how come you guys didn’t try to have decoupling, I guess, revised to include the large C&I customers? Then maybe if you could talk a little bit about I don’t know if it relates to that lost revenue adjustment that you spoke about earlier. If you could talk a bit about that how that might soften declining sales for your large C&I customers.

So the mechanism has two components. The first one is for the residential and small commercial, which is just used for customer base on a weather-adjusted basis. The next group of customers is the medium to large commercial customers and that’s where we use a lost revenue calculation. What we do is we work with the Energy Trust of Oregon, who delivers these energy efficiency programs to that class of customers and we identify the measures that they install and they compute the lost revenues for those measures. So it’s really tied to energy efficiency actions. The large customers are a completely different animal because they are so economically driven as opposed to related to energy efficiency or conservation. And so the whole purpose of decoupling is to address the disincentive of us putting in energy efficiency with our customers. And those customers are minimally impacted by energy efficiency, but more impacted by the economy. But again, the decoupling proposal is really to address the disincentive of promoting energy efficiency. So, it’s really hard for us to argue that that large class ought to go into the decoupling mechanism. It’s pretty much what we’ve agreed to. And I think that the challenge for us is when we have significant change in large customers, the way we have to address that is by filing a general rate case, which we’re doing for 2011. Gavin Tam – Macquarie: Okay, thanks.

Thanks, Gavin.

And your next question comes from the line of John Ali [ph] with Decade Capital. John Ali – Decade Capital: Good morning, guys. Just a quick question, if you could go over the pension accounting treatment that you requested. Is there going to be any movement on that, has there been?

Sure. In December, we filed a deferral order related to the expense of $3.7 million that we’re anticipating in 2010. And then in the rate case, we filed a request to recover not only the income statement or FAS 87 expense, but also the cost of funding additional dollars as required by the Pension Protection Act. And that for 2011 would be $19 million; '12 would be $18 million and then '13 would be about $16 million, declining to about $6 million and de minimis after that. John Ali – Decade Capital: So for 2010, is that baked into guidance?

Yes, that is. John Ali – Decade Capital: So if that doesn’t happen, is there further downside?

It’s within our range. John Ali – Decade Capital: Okay. And just looking at kind of the out years, is it kind of fair to say that 2012 is more of a transition year? Because, there is a small uptick from AFUDC, but then maybe some headwinds from inflation kind of offset growth, but then you have significantly more shares in '12 than you do '11. So we should really look to '13 to meet kind of your full potential?

I would say 2011 look like should be a full potential year; if we’re successful in our rate case and get adequate and reasonable cost recovery, we ought to be able to earn near our allowed ROE other than the disallowances we talked about earlier. And that’s really what we are pointing towards. And we’re really focused on getting through the rate case and getting prices in place that will recover our costs. The problems we’ve had over last few years have been economically driven and a couple of problems with the plant, not necessarily, regulatory problems per se. And so we are hoping that if this case settled, get the policy issues aside and we should be in a reasonably good place going into 2011. We hope to have prices effective January 1. John Ali – Decade Capital: Okay. And just one other question. When you guys talk about the collateral, can you give us a break out in terms of what’s returning of LCs versus cash?

It’s about proportionate. The vast majority of collateral we’ve outstanding is LCs. We have about 50 some odd million dollars of cash. John Ali – Decade Capital: Okay, great. That’s all my questions, thank you.

Thanks, John.

And your next question comes from the line of James Bellessa with D.A. Davidson & Company. James Bellessa – D.A. Davidson: Hi. Good morning.

Hi, Jim, how are you doing? James Bellessa – D.A. Davidson: All right. Say, on the Senate Bill 408 deferral, how much was the amount in 2009 and what are you kind of thinking it will be in 2010?

Sure. It was about $13 million in 2009 and we’re forecasting roughly about the same amount in 2010. James Bellessa – D.A. Davidson: Then in your issuance of debt this year, you indicate that it should be in the order of magnitude of $250 million, $70 million of which has already been issued. What’s the timing on the remainder?

Sure. We are looking at issuing approximately $120 million of our pollution control bonds that we repurchased last year and decided not to reissue. And that will take place and probably close in March. And then we will look at our cash flows for the balance. It could either be in the summer time or later towards the end of Q3.

We have a large retirement coming due in –

Yes, we have about $140 million coming due in March, with the balance to $186 million in April and May. Those are unsecured long-term debts that has (inaudible) life. James Bellessa – D.A. Davidson: Thank you very much.

Thanks, Jim.

(Operator instructions)

I think we’re ready to close it off.

Okay. We appreciate your interest in Portland General Electric and invite you to join us when we report on first quarter 2010 results. If you have any additional questions, please contact Bill Valach, who will be available after this call. Thank you again for joining us today.

This concludes today’s conference. You may now disconnect.