Company: POR
Filing Date: 2025-04-25
Form Type: 10-Q
Source: 0000784977-25-000074
Chunk: 38

Company: PORTLAND GENERAL ELECTRIC CO /OR/
Filing Date: 2025-04-25
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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 into financial agreements for, and purchase and sale agreements involving physical delivery of, both power and natural gas that include indemnification provisions relating to certain claims or liabilities that may arise relating to the transactions contemplated by these agreements. Generally, a maximum obligation is not explicitly stated in the indemnification provisions and, therefore, the overall maximum amount of the obligation under such indemnifications cannot be reasonably estimated. PGE periodically evaluates the likelihood of incurring costs under such indemnities based on the Company’s historical experience and the evaluation of the specific indemnities. As of March 31, 2025, management believes the likelihood is remote that PGE would be required to perform under such indemnification provisions or otherwise incur any significant losses with respect to such indemnities. The Company has not recorded any liability on the condensed consolidated balance sheets with respect to these indemnities.

NOTE 10: INCOME TAXES

Income tax expense for interim periods is based on the estimated annual effective tax rate, which includes tax credits, regulatory flow-through adjustments, and other items, applied to the Company’s year-to-date, pre-tax income. The significant differences between the Federal statutory tax rate and PGE’s effective tax rate are reflected in the following table:Three Months Ended March 31, 20252024Federal statutory tax rate21.0 %21.0 %Federal tax credits*(9.5)(16.2)State and local taxes, net of federal tax benefit8.6 9.1 Flow-through depreciation and cost basis differences(0.5)0.2 Reversal of excess deferred income tax(2.0)(3.3)Executive Compensation0.8 0.5 Other(0.4)(0.6)Effective tax rate18.0 %10.7 %* Federal tax credits primarily consist of production tax credits (PTCs) earned from Company-owned wind-powered generating facilities as well as amortization of investment tax credits (ITCs). PTCs are earned based on a per-kilowatt hour rate and, as a result, the annual amount of PTCs earned will vary based on weather conditions and availability of the facilities. PTCs are earned for 10 years from the in-service dates of the corresponding facilities. PGE’s PTC generation will end at various dates through 2033. The generation of production tax credits from Tucannon River Wind Farm ended in 2024. ITCs are deferred and amortized as a reduction of income tax expense over the