Company: POR
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000784977-25-000012
Chunk: 46

Company: PORTLAND GENERAL ELECTRIC CO /OR/
Filing Date: 2025-02-14
Form: 10-K
Item: Item 8
Chunk 46
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’s assertion that amounts are probable of recovery or a future reduction in rates.  

Lease Classification of Battery storage agreement - Refer to Note 17 to the consolidated financial statements

Critical Audit Matter Description

The Company determines if an arrangement is a lease at inception and whether the arrangement is classified as an operating or finance lease. Lease classification requires management judgment including determining the: economic life of the asset, unit of account, and the identification of lease and non-lease components. On December 20th, 2024, the Company commenced a battery storage capacity agreement that is accounted for as an operating lease. The Company determined that the lease term does not represent a major part of the economic life of the asset. 

Given the significant judgments made by management to determine the economic life of the asset, we performed audit procedures to assess the reasonableness of such judgments, which required a high degree of auditor judgment and use of specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the judgments surrounding the determination of the economic useful life used to determine the classification of the lease included the following, among others:

•We tested the effectiveness of the controls over management's assessment of the classification of the lease, including inputs and assumptions used in the lease classification analysis.

•We evaluated the reasonableness of the inputs, assumptions, and judgments used by management to determine the lease classification by:

◦Obtaining the lease agreement to examine material lease provisions considered by management in their analysis.

◦With the assistance of professionals in our firm having expertise in lease accounting, we assessed the accounting treatment of the agreement. 

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◦With the assistance of fair value specialists, we performed a benchmarking analysis to estimate the economic useful life of the leased asset.

•We tested the mathematical accuracy of the Company's calculation of the lease ROU asset and lease liability.

/s/ Deloitte & Touche LLP

Portland, Oregon

February 13, 2025

We have served as the Company’s auditor since 2004.

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Table of ContentsPORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(Dollars in millions, except per share amounts)

Years Ended December 31,202420232022Revenues:         Revenues, net$3,480 $2,912 $2,636          Alternative revenue programs, net of amortization(40)11 11                  Total Revenues3,440