Company: POR
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000784977-25-000012
Chunk: 79

Company: PORTLAND GENERAL ELECTRIC CO /OR/
Filing Date: 2025-02-14
Form: 10-K
Item: Item 1A
Chunk 79
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 PGE’s business as a vertically integrated utility is the ability to produce electricity at competitive prices due to economies of scale. Furthermore, a key component of PGE’s growth is its ability to construct, own, and operate facilities. Many companies and organizations conduct research and development activities to seek improvements in alternative technologies and distributed generation. Advancements in and creation of new technologies could include fuel cells and micro turbines, wind turbines, photovoltaic solar cells, distributed generation, nuclear energy, hydrogen, ongoing customer energy efficiency, two-way grid enabling customer-owned generation, and advances in batteries or energy storage. It is possible that advances in such technologies, or other current technologies, will reduce the cost of alternative methods of electricity production or storage to a level that is equal to or below that of existing methods. 

The electricity industry is undergoing significant change, including increased deployment of distributed energy resources, technological advancements as described above, and political and regulatory developments. Electric utilities are experiencing increasing deployment of distributed energy resources, such as solar generation, energy storage, electric vehicles and demand response technologies. The deployment of these technologies supports PGE’s decarbonization goals. The growth of new technologies will require modernization of the electric distribution grid to, among other things, accommodate increasing two-way flows of electricity and increase the grid’s capacity to interconnect these resources. A higher penetration of distributed energy resources may result in decreased customer demand, or may have impacts on grid reliability. PGE may be unable to effectively adapt to evolving technologies, may invest in technologies that ultimately prove ineffective, and employees and customers may be unable to adapt to technologies needed to advance decarbonization goals, such as demand response programs at scale. Increased distributed energy resources and renewable energy resources will require new and sustained investments in grid modernization and transmission, and may require the use of traditional generation to provide additional capacity at peak times. If all such costs are not recoverable in prices, PGE could experience material increases in its commodity costs, which could impact PGE’s results of operations, financial condition, or cash flows. 

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It is also possible that alternative generation or storage resources are mandated, subsidized, or encouraged through legislation or regulation or otherwise are economically competitive and added to the available generation supply. Competitors may not be subject to the same operating, regulatory and financial requirements that the Company is, potentially causing a substantial competitive disadvantage for PGE. Changes in public policy, such as new tax incentives that PGE cannot take advantage of or efforts to deregulate the utility industry, could provide an advantage to competitors