Company: POR
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000784977-25-000012
Chunk: 34

Company: PORTLAND GENERAL ELECTRIC CO /OR/
Filing Date: 2025-02-14
Form: 10-K
Item: Item 8
Chunk 34
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 of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Regulatory Accounting — Refer to Notes 2 and 7 to the consolidated financial statements

Critical Audit Matter Description

The Company is subject to rate regulation by the Public Utility Commission of Oregon (the “OPUC”), which has jurisdiction with respect to the rates for retail electricity in the state of Oregon, and to wholesale rate regulation by the Federal Energy Regulatory Commission (the “FERC”). Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts certain financial statement line items and disclosures.

The Company’s rates are subject to regulatory rate-setting processes and annual earnings oversight. Because the OPUC and the FERC set the rates the Company is allowed to charge customers based on allowable costs, including a reasonable return on equity, the Company applies accounting standards that require the financial statements to reflect the effects of rate regulation. The Company’s rates for retail customers are determined and approved in regulatory proceedings based on an analysis of the Company’s cost of providing service to retail customers. The OPUC has the authority to disallow the recovery of any costs that it considers imprudently incurred. Although the OPUC is required to establish customer prices that are fair, just and reasonable, it has significant discretion in the interpretation of this standard. The Company assesses whether the regulatory assets and regulatory liabilities continue to