SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
                                    FORM 10-K

     [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended DECEMBER 31, 1995







<TABLE>
<CAPTION>  <S> <C>
                         Registrant; State of Incorporation;  IRS Employer  
 COMMISSION FILE NUMBER   ADDRESS; AND TELEPHONE NUMBER        IDENTIFICATION NO.



 1-5532                   PORTLAND GENERAL CORPORATION        93-0909442
                          (an Oregon Corporation)
                          121 SW Salmon Street
                          Portland, Oregon 97204
                          (503) 464-8820

 1-5532-99                PORTLAND GENERAL ELECTRIC COMPANY   93-0256820
                          (an Oregon Corporation)
                          121 SW Salmon Street
                          Portland, Oregon 97204
                          (503) 464-8000

</TABLE>
 Securities registered pursuant to Section 12(b) of the Act:

<TABLE> <S> <C>                                                  
<CAPTION>
                                                       
                                                                                 Name of each exchange
            Title of each class                                                   on which registered
   Portland General Corporation
     Common Stock, $3.75 par value per share                                   New York Stock Exchange
                                                                               Pacific Stock Exchange

   Portland General Electric Company
     8.25% Quarterly Income Debt Securities
      (Junior Subordinated Deferrable Interest Debentures, Series A)           New York Stock Exchange

  Securities registered pursuant to Section 12(g) of the Act:
   Portland General Corporation
     None

   Portland General Electric Company,
     8.10% Series, Cumulative Preferred Stock, $100 par value per share
     7.75% Series, Cumulative Preferred Stock, no par value
</TABLE>

                                       1

<PAGE>

 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
  of  Regulation S-K is not contained herein, and will not be contained, to the
 best of  registrant's knowledge, in definitive proxy or information statements
 incorporated  by  reference  in Part III of this Form 10-K or any amendment to
 this Form 10-K.  [ X ]

 Indicate by check mark whether  the  registrant  (1)  has  filed  all  reports
 required to be filed by Section 13 or 15(d) of the Securities Exchange Act  of
  1934  during  the  preceding  12  months (or for such shorter period that the
 registrant was required to file such  reports),  and  (2)  has been subject to
 such filing requirements for the past 90 days.         Yes   X      No       .

 The aggregate market value of Portland General Corporation voting  stock  held
  by non-affiliates of the registrant as of January 31, 1996 (based on the last
  sales   price   on  the  New  York  Stock  Exchange  as  of  such  date)  was
 $1.5 billion.

 The number of shares  outstanding  of  the  registrants'  common  stocks as of
 January 31, 1996 was:
                   Portland General Corporation               51,024,810
                   Portland General Electric Company          42,758,877
                    (owned by Portland General Corporation)


                           DOCUMENT INCORPORATED BY REFERENCE

 The information required to be included in Part III hereof is incorporated  by
 reference from Portland General Corporation's definitive proxy statement to be
 filed on or about March 27, 1996.

                                       2 
<PAGE>

                                  DEFINITIONS


 The following abbreviations or acronyms used in the text and notes are defined
 below:

 Abbreviations
  OR ACRONYMS                        TERM

 Beaver ............................Beaver Combustion Turbine Plant
 Bethel ............................Bethel Combustion Turbine Plant
 Boardman ..........................Boardman Coal Plant
 Bonneville Pacific ................Bonneville Pacific Corporation
 BPA ...............................Bonneville Power Administration
 Centralia .........................Centralia Coal Plant
 COB ...............................California/Oregon Border
 Colstrip ..........................Colstrip Units 3 and 4 Coal Plant
 Coyote Springs ....................Coyote Springs Generation Plant
 CWL ...............................Columbia Willamette Leasing, Inc.
 DEQ ...............................Oregon Department of Environmental Quality
 EFSC ..............................Oregon Energy Facility Siting Counsel
 EPA ...............................Environmental Protection Agency
 FASB ..............................Financial Accounting Standards Board
 FERC ..............................Federal Energy Regulatory Commission
 Financial Statements ..............Refers  to Financial Statements of Portland
                                    General included in Part II, Item 8 of this 
                                    report.
 Holdings ..........................Portland General Holdings, Inc.
 Intertie ..........................Pacific Northwest Intertie Transmission 
                                    Line
 IOUs ..............................Investor-Owned Utilities
 IRS ...............................Internal Revenue Service
 kWh ...............................Kilowatt-Hour
 MMBtu .............................Million British thermal units
 MW  ...............................Megawatt
 MWa ...............................Average megawatts
 MWh ...............................Megawatt-hour
 NRC ...............................Nuclear Regulatory Commission
 NYMEX .............................New York Mercantile Exchange
 OPUC or the Commission ............Oregon Public Utility Commission
 Portland General or PGC ...........Portland General Corporation
 PGE or the Company ................Portland General Electric Company
 PUD ...............................Public Utility District
 Regional Power Act ................Pacific Northwest Electric Power Planning
                                    and Conservation Act
 SFAS ..............................Statement of Financial Accounting Standards
                                    issued by the FASB
 WPPSS or Supply System ............Washington Public Power Supply System
 Trojan ............................Trojan Nuclear Plant
 Tule ..............................Tule Hub Services Company
 USDOE .............................United States Department of Energy
 WAPA ..............................Western Area Power Authority
 WNP-3 .............................Washington Public Power Supply System 
                                    Unit 3 Nuclear Project
 WSCC ..............................Western Systems Coordinating Council


                                       3
<PAGE>

                               TABLE OF CONTENTS
                                                                          PAGE

 Definitions ............................................................... 3

 PART I
      Item 1.  Business .................................................... 5
                 Portland General Corporation .............................. 5
                 Portland General Electric Company ......................... 5
                 Portland General Holdings, Inc. .......................... 17

      Item 2.  Properties ................................................. 18

      Item 3.  Legal Proceedings .......................................... 20

      Item 4.  Submission of Matters to a Vote of Security
               Holders .................................................... 23

               Executive Officers of the Registrant ....................... 23

 PART II
      Item 5.  Market for Registrant's Common Equity and
               Related Stockholder Matters ................................ 24

      Item 6.  Selected Financial Data .................................... 25

      Item 7.  Management's Discussion and Analysis of Financial
               Condition and Results of Operations ........................ 26

      Item 8.  Financial Statements and Supplementary Data ................ 35

      Item 9.  Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure ........................ 56

 PART III
      Item 10.  Directors and Executive Officers of the Registrant ........ 56

      Item 11.  Executive Compensation .................................... 56

      Item 12.  Security Ownership of Certain Beneficial Owners
               and Management ............................................. 56

      Item 13.  Certain Relationships and Related Transactions ...........  56

 PART IV
      Item 14.  Exhibits, Financial Statement Schedules and
               Reports on Form 8-K ........................................ 56

 Signatures ............................................................... 57

 Exhibit Index ............................................................ 59

 Appendix - PGE Financial Information ..................................... 64


                                       4
<PAGE>


                                    Part I



 ITEM 1. BUSINESS



 PORTLAND GENERAL CORPORATION - HOLDING COMPANY

  Portland  General  Corporation,  an  electric  utility  holding company,  was
  organized in December 1985.  Portland General Electric Company,  an  electric
  utility  company  and  Portland  General's  principal  operating  subsidiary,
 accounts  for substantially all of Portland General's assets, revenues and net
 income.  Portland  General  is  also  the  parent  company of Portland General
  Holdings,  Inc.,  which  provides  organizational  separation   for  Portland
  General's  nonutility  businesses (see page 17).  Portland General is  exempt
 from regulation under the  Public  Utility Holding Company Act of 1935, except
 Section 9(a)(2) thereof relating to  the  acquisition  of  securities of other
 public utility companies.

  As  of  December  31, 1995, Portland General and its subsidiaries  had  2,562
 regular employees compared  to  2,536 and 2,618 at December 31, 1994 and 1993,
 respectively.


 PORTLAND GENERAL ELECTRIC COMPANY - ELECTRIC UTILITY

                                    GENERAL

 PGE, incorporated in 1930, is an  electric  utility engaged in the generation,
 purchase, transmission, distribution, and sale  of electricity in the State of
 Oregon.  PGE also sells energy to wholesale customers  throughout  the western
  United  States.   PGE's  Oregon service area is 3,170 square miles, including
 54 incorporated cities of which  Portland  and Salem are the largest, within a
 state-approved service area allocation of 4,070  square  miles.  PGE estimates
  that  at  the  end  of  1995  its  service-area  population was approximately
  1.4 million, constituting approximately 44% of the  state's  population.   At
 December 31, 1995 PGE served approximately  650,000 customers.

 As  of  December  31, 1995, PGE had 2,533 regular employees.  This compares to
  2,502  and 2,577 regular  PGE  employees  at  December  31,  1994  and  1993,
 respectively.

                                       5
<PAGE>

                              OPERATING REVENUES

 PGE serves  a  diverse retail customer base.  Residential customers constitute
 the largest customer class and  accounted for 39% of the retail demand and 43%
 of retail revenues during 1995.  Residential demand is highly sensitive to the
 effects of weather.   Commercial  customers consumed 37% and industrial 24% of
 retail energy sales for the year.   Since  1993  industrial  demand  has grown
  nearly   8%,  making  this  the Company's most rapidly growing customer class
  followed  by the commercial segment  with  7%  growth.   The  commercial  and
 industrial classes  are  not  dominated  by any single industry.  While the 20
  largest  customers constituted 21% of retail  demand,  they  represented  10
 different industrial  groups  including  paper  manufacturing, high 
 technology, metal fabrication, transportation equipment,  and health services. 
 No single customer represents more than 6% of PGE's retail load.

  Wholesale  revenues  continue to make a significant contribution  to  Company
 revenues providing nearly  10%  of  total  operating  revenues  for 1995.  PGE
 actively markets wholesale power throughout the western United States  and has
  more  than  doubled  its  level  of  sales  since  1993.  A majority of PGE's
 wholesale sales were to its traditional customers comprised of IOUs,  federal
 agencies, municipalities and PUDs.  However, most of the Company's wholesale
   growth  has  come  through  sales to marketers and brokers,  relatively  new
 entrants to the increasingly competitive  wholesale  electric  energy  market.
 These sales are predominantly of a short-term nature.

  PGE's  operating revenues from customers peak during the winter season.   The
 following  table  summarizes  operating  revenues  and kWh sales for the years
 ended December 31:

<TABLE>
<CAPTION>
                                                  1995              1994              1993
 <S>                                            <C>               <C>               <C>
 Operating Revenues (thousands)
      Residential                               $379,485          $360,651          $339,174
      Commercial                                 335,607           315,156           303,783
      Industrial                                 153,347           147,347           147,274
      Public Street Lighting                      11,311            11,205            11,002
          Tariff Revenues                        879,750           834,359           801,233
          Accrued Revenues                        (2,973)           10,644            57,160
      Retail                                     876,777           845,003           858,393
      Wholesale                                   94,967           105,911            79,035
      Other                                        9,884             8,041             7,103
          Total Operating Revenues              $981,628          $958,955          $944,531
 Kilowatt-Hours Sold (millions)
      Residential                                  6,622             6,704             6,760
      Commercial                                   6,285             6,142             5,885
      Industrial                                   4,056             3,863             3,764
      Public Street Lighting                         102                93                98
         Retail                                   17,065            16,802            16,507
         Wholesale                                 3,383             2,701             1,599
            Total kWh Sold                        20,448            19,503            18,106
</TABLE>


 For an analysis of the year-to-year revenue trends,  see Item 7, Management's
 Discussion and Analysis of Financial Condition and Results of Operations.
 

                                       6
<PAGE>

                                  REGULATION

  PGE  is subject to regulation by the OPUC, which consists of  a  three-member
 commission  appointed  by  the Governor.  The OPUC approves PGE's retail rates
 and establishes conditions of  utility  service.  The OPUC ensures that prices
 are fair and equitable and provides PGE an  opportunity  to earn a fair return
 on its investment.  In addition, the OPUC regulates the issuance of securities
 and prescribes the system of accounts to be kept by Oregon  utilities.  PGE is
  also subject to the jurisdiction of FERC with regard to the transmission  and
 sale  of  wholesale  electric  energy, licensing of hydroelectric projects and
 certain other matters.  Construction  of  new generating facilities requires a
 permit from EFSC.

 The NRC regulates the licensing and decommissioning  of  nuclear power plants.
  In 1993 the NRC issued a possession-only license amendment  to  PGE's  Trojan
 operating  license.   Trojan will be subject to NRC regulation until Trojan is
 fully decommissioned, all  nuclear  fuel  is  removed  from  the  site and the
 license is terminated.  The Oregon Department of Energy also monitors Trojan.

                           OREGON REGULATORY MATTERS

 REGULATORY ENVIRONMENT
 The OPUC is presently approaching issues of retail competition on an informal,
 utility-by-utility basis, rather than through generic, broad-based proceedings
 such as other states are pursuing.  The OPUC has long had a policy of allowing
special contracts for customers that have competitive options, and many  of
 PGE's largest customers receive  power under such contracts.  In addition, the
 OPUC last year approved an innovative rate schedule under which PGE is sharing
 some of the risks and rewards of a  more  competitive  wholesale  market  with
  large industrial and commercial customers not already under special contract.
 The  OPUC  is  currently exploring performance-based ratemaking in a rate case
 for another Oregon  investor-owned  utility  and,  with  regard  to  PGE,  has
  expressed  interest  in  receiving  proposals  for  accelerated  recovery  of
 regulatory assets.

  Recent rate orders have significantly reduced the uncertainty associated with
 PGE's  recovery  of  various regulatory assets, as well as reduced the overall
 total of such assets.   The  OPUC approved recovery of most of PGE's remaining
 investment in Trojan and full recovery of Trojan's decommissioning costs.  The
 OPUC also authorized PGE to simultaneously  reduce  certain regulatory assets
 and liabilities (see discussion of recent rate orders below).

 1995 GENERAL RATE ORDER
  In  March  1995 the OPUC issued an order on PGE's 1993 general  rate  request
 after an 18-month  process.   The  order,  based  on  a  two-year test period,
  authorized  a  single  average  rate  increase of 5% representing  additional
 revenues of $51 million in 1995 and $52  million  in 1996.  The tariff change,
 which increased residential rates 7.7%, commercial  rates  5.6% and industrial
  rates  2.6%,  became  effective  April 1, 1995.  The order established  PGE's
 return on equity at 11.6%, a decrease  from  the  previously authorized 12.5%.
   The   order   authorized  PGE  to  recover  all  of  the  estimated   Trojan
 decommissioning costs  and  87%  of its remaining investment in Trojan.  These
 amounts will be collected over Trojan's  original  license  period  ending  in
  2011.  The order also adopted a mechanism to decouple short-term profits from
 retail kilowatt-hour sales during the two-year test period (decoupling).

 The disallowed  portion  of the Trojan investment, on a net of tax basis, is 
 comprised of $17 million of post-1991 capital expenditures, primarily  
 related to steam generator repair activities, 
 
                                       7
<PAGE>
 
 and $20 million of general 
 Trojan investment.  As a result of this disallowance, PGE recorded a first 
 quarter 1995 after-tax charge to income of $37 million.

 The decoupling mechanism adopted by the  OPUC  set  revenue targets associated
 with retail loads for each month beginning April 1995  through  December 1996.
  If actual weather-adjusted retail revenues exceed or fall short of target  
  revenues,
 PGE  will  refund  or  collect  the difference from customers over an 18-month
 period.  The adjustment at any time during  the two-year period cannot result
 in an overall increase or decrease in rates, due solely to decoupling, of more
 than 3% in total.  Adjustments to rates, if necessary, can be  made every six
  months.   Large  commercial  and  industrial customers are excluded from  the
 decoupling mechanism.

 New rates, effective April 1, included approximately $16 million of 
 variable power cost savings expected from the future commercial operation of 
 Coyote Springs.  The order did not include projected capital and fixed costs
 associated with Coyote Springs nor the collection  of PGE's power cost 
 deferrals which were addressed in a subsequent rate proceeding discussed 
 below.

 Legal challenges have been filed  against  the  OPUC's rate order (see Item 3,
 Legal Proceedings, for further discussion).

 POWER COST RECOVERY AND COYOTE SPRINGS ORDER

 In November 1995 the OPUC issued an order authorizing PGE to increase rates by
 an average 2.7%  to recover the capital and fixed costs associated with Coyote
 Springs and an October 1995 BPA price increase.   The  order resulted in a $40
  million  increase  in  annual  revenues for the Company.  New  prices  became
 effective in late November 1995 concurrent  with  the  commercial operation of
 Coyote Springs.

The order addressed recovery of approximately $60 million of  
incremental power costs incurred after the 1993 closure of Trojan.  While the
order authorized full recovery of $11 million of power costs
  deferred  in early 1995, it allowed  recovery  of  only  $9 million
  of the  $50  million  of excess power costs deferred from July 1993 through
 March 1994.  The order also authorized the immediate recovery of approximately
 $29 million in incentive revenues associated with prior years' achievements of
 the Company's energy efficiency programs.   PGE  recorded a $13 million after-
 tax charge to income in the third quarter of 1995 to reflect the write-off of
 unrecoverable costs.

  The  order  implemented  the Company's proposal to offset certain  regulatory
  assets  including  the uncollected  balance  of  all  power  cost  deferrals,
 incentive revenues  and  a portion of the remaining Trojan investment, against
 PGE's unamortized gain on the prior sale of a portion of Boardman.  The offset
 allowed for recovery of the  deferred  power  costs and incentive revenues and
  the  elimination  of  approximately  $117 million of  regulatory  assets  and
 liabilities from the Company's Balance Sheets without increasing customer 
 rates.

 A party to the rate proceeding has requested that the OPUC reconsider the 
 order.  A decision on the motion is pending from the OPUC.

Under the terms adopted in the order, PGE withdrew its appeal of the Boardman
 gain issue in PGE V. RONALD EACHUS, MYRON  KATZ,  NANCY  RYLES  AND  THE OPUC,
  MARION  COUNTY  CIRCUIT  COURT  (see  Item 3, Legal Proceedings, for further
 discussion).

 RESIDENTIAL EXCHANGE PROGRAM
 The RPA, passed in 1980, attempted to resolve  growing  power  supply and cost
  inequities between customers of government and publicly owned utilities,  who
 have  priority  access  to  the low-cost power from the federal hydroelectric
 system, and the customers of  IOUs.   The  RPA  residential  exchange  program
  exists  to ensure that all residential and farm customers in the region,  the
 vast majority  of  which are served by IOUs, receive similar benefits from the
 publicly funded federal  power  system.   Exchange program benefits are passed
 directly to residential and farm customers.   The  exchange  benefit  for  PGE
  residential  and  small  farm customers totaled $51 million for calendar year
 1995.  In July 1995, the BPA released its 1996 rate proposal, which included a
 significant reduction in the  benefits to PGE's customers from the residential
 exchange program under the RPA.

                                       8
<PAGE>

Under recent Congressional legislation, this exchange benefit will decline by 
$10 to $15 million, annually,  on October  1, 1996.  The amount of the 
residential exchange benefit beginning October 1, 1997 is among the subjects 
of current regional discussions regarding BPA's role in the region.

  In  1993  the  OPUC  allowed PGE to pass through a BPA price  increase  which
 reduced exchange benefits $29 million, resulting in a corresponding increase 
 in electricity prices to residential and small farm customers.

 ENERGY EFFICIENCY
 PGE has promoted the efficient  use  of  electricity  for  over  two  decades.
  Jointly,  PGE  and  the  OPUC  have  worked  together  to provide appropriate
 financial incentives for PGE's energy efficiency programs.   In  1990, PGE and
 the OPUC first implemented the Share All Value Equitably (SAVE) program.   The
  program  was  designed to remove the financial disincentive to the Company of
 pursuing cost-effective  Demand  Side  Management  (DSM) measures.  During the
  four-year  program, which ended in 1994,  PGE invested  $61  million  in  DSM
 measures and  achieved  an annualized 55 MWa of saved energy.  PGE invested an
 additional $25 million during  1995 in DSM programs resulting in an additional
 20 MWa in annual energy savings.   The  Company  is  allowed a return of and a
 return on its energy efficiency program expenditures.

  Current  DSM  programs  provide  a range of services to all  classes  of  PGE
 customers.  These programs seek to  capitalize  on  windows  of opportunity in
  which  DSM  measures  are  most  cost-effective, such as new residential  and
  commercial construction, and the replacement  and  renovation  markets.   PGE
 continues  to  provide  a  weatherization  program for  eligible  low-income
 families.

 PGE recognizes the value of and remains committed to encouraging the efficient
  use  of  energy.   With  the  prospect  of increased competition and customer
 choice, PGE is focusing its DSM efforts more  toward customer needs and wants.
 The goal is to allow more customer choice in determining what amount of energy
 efficiency is appropriate to satisfy business and lifestyle choices.  PGE will
 meet these needs through cost-effective DSM services  to  its customers in the
 form of energy expertise and information, project facilitation  and  financing
 support.

 LEAST COST ENERGY PLANNING
 The OPUC adopted Least Cost Energy Planning for all energy utilities in Oregon
  with  the  goal  of selecting the mix of options that yields an adequate  and
 reliable supply of  energy  at  the least cost to the utilities and customers.
  "Demand side" options (ie, conservation  and  load  management)  as  well  as
 traditional  "supply  side" options (ie, generation and purchase of power) are
 evaluated.  Although utility  management continues to be fully responsible for
 decision making, the process allows  the OPUC and the public to participate in
 resource planning.  Ratemaking decisions are not made in the planning process.
 However, participation by the OPUC and  the  public may reduce the uncertainty
  regarding  the  ratemaking  treatment  of  actions  consistent  with  a  plan
 acknowledged by the OPUC.

 In November 1995, PGE's 1995-1997 Integrated Resource Plan (IRP) was submitted
 to the OPUC for review and acknowledgment in  fulfillment  of  its  least cost
  planning  obligation.   Under  the  IRP,  PGE  will  rely on the increasingly
 competitive energy marketplace to meet near-term load growth  and  reliability
  needs.  PGE will make economical use of existing assets and engage in  system
 efficiency  improvements.   PGE's "just in time" resource acquisition strategy
 calls for reducing the lead time  required  for  new  generating  capacity  by
  completing  the  siting  and  permitting  process  in  advance  of a need for
  additional  resources.   As  noted above, PGE will refocus DSM activities  to
 deliver customer value and choice  while emphasizing the economic viability of
 each program.  PGE anticipates acknowledgment  of  its IRP by the OPUC by mid-
 1996.


                           COMPETITION AND MARKETING

 Progress toward greater customer choice and direct access  to customers by all
  competitors  has  been  dramatic in the last two years.  The National  Energy
 Policy Act of 1992 (Energy  Act)   allows the FERC to order wholesale wheeling
 between utilities.  The Energy Act reserved  the  right  to order true "retail
  wheeling"  to  the  individual  states.  Retail wheeling is the  movement  of
 electric energy produced and sold by another entity over 
 
                                       9
<PAGE>
 
 an electric utility's
 transmission and distribution system,  to  a  retail customer in the utility's
 service territory.  Retail wheeling would permit  retail customers to purchase
  electric  capacity and energy from any electric utility  or  power  supplier.
 Recently, Michigan  ordered  utilities  in that state to test 150 MW of retail
 wheeling.  California has proposed a comprehensive  restructuring  of electric
  utility  regulation that would lead to intense competition for customers  and
 free choice  for  all  customers  by  2002.  Although  the  OPUC  has  not yet
  considered  similar  measures,  in the coming years the Company's growth will
  increasingly be influenced by competitive  factors  rather  than  within  the
 traditional regulatory framework.

 The  electric industry is in the early stages of an increasingly competitive 
 climate that is already making dramatic differences in the way the Company 
 produces, transmits, distributes and markets electric energy and associated 
 services.  During 1995 PGE aligned the Company along its major business lines:
 energy services encompassing retail sales, marketing and customer service; 
 wholesale marketing; and power supply encompassing hydro and thermal power 
 operations.

 TRADING FLOOR OPERATIONS
  In  1995  PGE established its trading floor operations which fully integrates
 the Company's  wholesale  marketing,  energy supply, financial risk management
 and power operations functions.  The trading  floor activities seek to 
 enhance PGE's competitive
  position  in retail and wholesale markets by assuring  a  reliable,  low-cost
 supply of energy  to meet retail and wholesale loads and enhance the Company's
 ability to profitably market to current and emerging wholesale markets.

 RETAIL COMPETITION AND MARKETING
 PGE operates within a state-approved service area and under current regulation
 is substantially free  from  direct  retail  competition  with  other electric
  utilities.   PGE's  competitors  within its Oregon service territory  include
other fuel suppliers, such as the local natural gas company, which compete with
 PGE for the residential and commercial  space  and  water  heating market.  In
  addition  there  is the potential of a loss of PGE service territory  to  the
 creation of public  utility districts by voters.  In the near term much of the
  Company's  business is  likely  to  remain  regulated  with  progress  toward
 increased retail  competition  taking  place  in  stages.   For example, basic
 residential electric service is likely to remain highly regulated  with little
   competition,   while   industrial  service  may  see  rapid  development  of
 competition.  Deregulation  of other industries such as telecommunications has
 led to a host of new suppliers,  products and services.   The same is expected
 for the electric industry as more  and  more  groups  of  customers  will have
 increasing degrees of choice and alternative suppliers from whom to purchase.

  Increased  competition  presents  both a threat and  an opportunity.  PGE  is
 preparing to meet  varying levels of  competition  from  traditional  and non-
 traditional sources in the various retail markets within its service territory
 as well as throughout the western United States.  Much of the Company's growth
  potential  may  no  longer  be  limited by service territory boundaries.  The
 Company plans to look beyond traditional  boundaries at opportunities to serve
 customers with energy related products and  services  allowable in the current
 regulated markets and to be prepared to further expand  as  greater  access to
 these markets emerges.

  Within  the  core  markets that make up PGE's current service territory,  the
 Company will continue  to deliver  quality electric
 service by focusing on traditional  values  like reliability, cost management,
 resource acquisition, effective energy efficiency  services,  safe  operations
  and responsive customer-oriented service.  In addition, the Company plans  to
 provide  an array of new products and services to its existing and prospective
 customers.   For  instance,   PGE  launched its Power Smart marketing
 campaign to encourage the wise use of beneficial  electro-technologies.  Other
  services  currently being offered or under development  include  distribution
 services, such  as  power  quality-related services and lighting maintenance;
 power services, such as load  following  and system control; utility services,
 such as automated billing services and outage management; and retail services,
 such as power quality and time-of-day rates.

 WHOLESALE COMPETITION AND MARKETING
 During the last few years, the western United  States  has  become  a  vibrant
  marketplace  for the trading of electricity in which PGE has become an active
participant.  Wholesale  sales  continue to make a significant contribution to
Company revenues.  During 1995 PGE's  wholesale  sales increased 25% over 1994 
levels and                                      
                                      
                                      10
<PAGE>

 
  accounted for 10% of  total revenues and  17%  of  total  sales.
  However, a surplus of energy, in conjunction with the entrance of numerous
  marketers/brokers,  independent  power  producers  and affiliates of electric
 utilities, has increased the competition for market share and is resulting in
  lower  prices  and profit margins.  During 1995, the average price  of  PGE's
 wholesale sales decreased 28%.

 PGE plans to utilize its wholesale marketing experience to expand its presence
 in the western United  States.   Wholesale  activities are focused on both 
  bulk energy markets and large end-user  customers  that  can  purchase
 energy  directly  from  the  market.   As  part  of  this effort, PGE recently
 established wholesale power marketing offices in other Western states.

  In  1996  FERC  is expected to issue new rules creating open  access  to  the
 nation's electric  transmission  grid.  The new rules could create even higher
 levels of competition in the bulk  power  markets  as all wholesale buyers and
 sellers have equal access to transmission resources.   Utilities  such  as PGE
 will be required to make their transmission systems available to anyone on the
  same  terms  and  costs that they offer to themselves.  In November 1995, PGE
 filed an open access  transmission  tariff  with  FERC in response to the FERC
  notice  of proposed rulemaking.  The Company's transmission  system  connects
 winter-peaking  utilities  in  the  Northwest and Canada, which have access to
 low-cost hydroelectric generation, with  summer-peaking wholesale customers in
 California and the Southwest, which have higher-cost fossil fuel  generation.
  PGE has used this system to purchase and sell in both markets depending  upon
 the relative price  and availability of power, water conditions, and seasonal
 demand from each market.   Under its open access tariff the  Company  will  
 lose any competitive advantage it may have had through the use of its 
 transmission assets for wholesale transactions.  Open access may  provide new 
 opportunities as the Company has equal access to the transmission capabilities 
 of other utilities.

 The Company has actively participated in  the  development of a NYMEX electric
  futures  contract  and promoted COB  as  the
 preferred physical delivery  point for pricing purposes.  A NYMEX contract has
 been approved to facilitate electric  futures  trading  by April 1996.  PGE is
 prepared to be an active participant in the market.

                                 POWER SUPPLY

  Growth  within  PGE's  service territory as well as its aggressive  wholesale
 marketing plans have underscored  the  Company's need for sources of reliable,
 low-cost energy supplies such as the abundant hydro resources of the Pacific
 Northwest.  The demand  for  energy within PGE's service
  territory  has  experienced an average annual growth rate  of   approximately
 2.5% over the  past  10  years.   During  1996 PGE expects an even
 greater level of load growth due to a vibrant economy  and the expansion plans
  of  the  high-tech  industry  in  the region.  The emerging wholesale  energy
  marketplace  has  caused  PGE to postpone  the  acquisition  of   significant
  additional new generating resources  and  capacity  for the foreseeable
 future.  Rather PGE will rely on the purchase of power in the wholesale market
 to supplement its existing base of hydro and thermal generating resources.

 GENERATING CAPABILITY
  PGE's  existing  hydroelectric,  coal-fired  and  gas-fired  plants  are  key
resources for  the  Company, providing 2,117 MW of generating capability (see
 Item 2, Properties, for a full listing of PGE's generating facilities).  PGE's
 lowest-cost producers  are  its eight hydroelectric projects on the Clackamas,
 Sandy, Deschutes, and Willamette  rivers  in  Oregon.  In 1995 generation from
 PGE's hydroelectric facilities met 11% of the Company's total load.

 In 1995 PGE completed construction of Coyote Springs,  a  241-MW,  gas-fired
 facility.  Coyote Spring is the Company's first plant addition since Boardman 
in 1980 and adds a state-of-the-art combined cycle combustion turbine plant to 
 its thermal generating resources.  Its initial operation  during the fourth 
 quarter of 1995 provided over 186,000 MWh of generation at a cost below the  
 average  cost  of Company spot market purchases.


                                      11
<PAGE>

 PURCHASED POWER
 PGE has long-term power contracts with four hydro projects on the mid-Columbia
 River which provide PGE with 590 MW of firm capacity.  PGE also has  firm 
 contracts, ranging in term from one to  21 years, to purchase energy, 
 primarily hydro-generated, from other Pacific Northwest utilities for 821 MW.  
 In addition, PGE
 has long-term exchange contracts with summer-peaking  Southwest  utilities  to
  help  meet  its  winter-peaking  requirements.  In total, the above contracts
 provide PGE 1,766 MW of firm capacity to serve PGE's peak loads.

 PGE has increasingly utilized short-term  purchases  to meet its energy needs.
 Short-term contracts include all spot, or secondary, purchases as well as firm
  purchases  for  periods  less than one year in duration.   During  1995,  60%
of PGE's power purchases were under  short-term  agreements compared to 43% in
  1994.   Short-term energy prices have remained at levels which make long-term
 power and  capacity  contracts  unattractive.  PGE's 1995 short-term purchases
 averaged 50% less than the cost of energy bought under long- and intermediate-
 term firm power contracts.  A continued  surplus  of energy within the region,
  the  emergence  of a NYMEX electric futures contract  and  open  transmission
 anticipated during 1996 are expected to continue to place competitive 
 pressures on the market price of short-term power.  PGE is susceptible to 
 wholesale price increases due to its reliance on purchased power.

 SYSTEM RELIABILITY AND THE WSCC
 PGE relies on wholesale  market  purchases within the WSCC in conjunction with
 its base of generating resources to  supply  its  resource  needs and maintain
  system  reliability.   The  WSCC  is geographically the largest of  the  nine
 regional electric reliability councils.   The  WSCC performs an essential role
  in  developing  and monitoring established reliability  criteria  guides  and
 procedures to ensure  continued  reliability  of the region's electric system.
  During the last few years, the area covered by  WSCC  has  become  a  dynamic
 marketplace  for  the trading of electricity.  This region, which includes the
 11 Western states,  is  very   diverse  in  climates.   Peak  loads  occur  at
  different  times  of  the year in the different regions.  Energy loads in the
 Southwest peak in summer  due  to air conditioning; northern loads peak during
  winter  heating  months.  Further,  according to WSCC forecasts, the 80 
  electric  organizations participating in the WSCC, which include utilities,  
 independent power producers and transmission utilities, have sufficient
 generating capacity to  cover  loads 25 to 30% greater than anticipated
 peak loads for each month of the  year  beyond  the year 2000 assuming adverse
 water conditions.  Favorable water conditions have the ability to even further
 increase energy supplies with inexpensive hydro-generated power.

 During 1995 PGE's peak load was 3,315 MW of which over 16% was met through
 economical short-term purchases.  The remaining  load was met through a
  combination  of  Company-owned generation and firm power purchase  contracts
 discussed above.  PGE's firm resource capacity totaled 3,872 MW as of December
 31, 1995.  PGE reached a new system record in February 1996 of 3,888 MW.

 The availability of wholesale  power  has made the traditional utility reserve
margin less relevant.  The need for an individual utility to maintain a reserve
 margin of 20% or higher in order to assure  that  it  has  the  capacity to 
 meet, without interruption, customer peak energy needs is no longer necessary.

                                      12

<PAGE>

 YEAR IN REVIEW
 PGE generated 36% of its load requirements in 1995 compared with 47% in  1994.
  Firm  and  secondary  purchases  met  the  remaining  load.   Regional  water
  conditions  were  about 95% of normal.  Average precipitation in the Columbia
 River basin increased  the  availability  of  inexpensive  hydropower on the
  secondary  market  in  1995.    Mild  weather, lower gas prices and increased
 competition also contributed to the availability of inexpensive power.

 1996 OUTLOOK
 The early predictions of water conditions  indicate  they will be about normal
 in 1996.  While this should result in similar levels of hydro generation as in
  1995,  efforts to restore salmon runs on the Columbia and  Snake  rivers  may
 affect the supply and price of purchased power.

 RESTORATION OF SALMON RUNS
 Several species  of  Snake  River salmon are protected as threatened under the
 Endangered Species Act (ESA).   In an attempt to save the endangered fish, the
  federal  government  has  taken actions  that  have  reduced  the  amount  of
 electricity generated at the  Columbia  and  Snake River dams.  In early 1996,
 the National Marine Fisheries Service (NMFS) will  release its recovery plan,
 which is expected to be similar to the draft plan released in 1995.   NMFS  is
  empowered  by  the ESA to require salmon protection measures by the Bureau of
 Reclamation and the  Army  Corps  of  Engineers, the agencies that operate the
 federal dams on these rivers.  Certain  measures  contained  in the draft plan
 were implemented during 1995.  River flows were boosted and water was released
 over spillways while young salmon were migrating during the spring  and summer
  in  an  attempt  to  protect  the  fish  from entering the turbines.  If this
  practice is continued it could mean less water  available  in  the  fall  and
 winter  when  demand  for  electricity  in  the  Pacific Northwest is highest.
 Although PGE does not have any hydro-electric facilities on rivers affected by
 the plan, it does buy large amounts of energy from the agencies which do.

 PGE's fish biologists are working with state and federal  agencies  to  ensure
 that PGE's hydro operations located on several Columbia River tributaries  are
  compatible with the survival of wild salmon and other wildlife.  PGE does not
 expect  the  ESA  process  to  significantly  impact its own hydro generation.
 However, PGE is working cooperatively with federal and state agencies, tribes,
 and the public to return salmon and steelhead to  their historic habitat above
 dams built on the Deschutes River.

 NEW RESOURCES
 The Company does not plan to build new generating resources  in the forseeable
 future but will rely on the current surplus of wholesale energy  to  meet  its
  growing  power  needs.   Accordingly,  the  Company  has developed a resource
 strategy which combines flexibility and a just-in-time  acquisition philosophy
 to provide 
 
                                      13
<PAGE>

 a response to potential persistent increases in  wholesale  prices.
 Specifically, PGE plans to complete the siting and permitting process for  the
  construction  of  additional  new combined cycle combustion turbine projects.
 This two-step process separates  siting  and  engineering from the decision to
 construct a new resource and significantly reduces  the  lead  time  for a new
  plant  by  as much as two years.  This process also moves decisions involving
 large capital  commitments  as  close  as possible to the anticipated time the
 power will be needed.  PGE is also evaluating  efficiency  improvements at its
  existing  facilities including the repowering of Beaver and upgrades  at  the
 Company's hydro facilities.


                                  FUEL SUPPLY

 PGE manages its fuel supply contracts as part of its trading floor operations.
  Fuel  supply  contracts  are  negotiated  to  support  annual  planned  plant
 operations.   Flexibility  in  contract  terms is sought to allow for the most
 economic dispatch of PGE's thermal resources  in  conjunction with the current
 market price of wholesale power.

 
 COAL

 BOARDMAN
 PGE has an agreement to supply coal to Boardman through  the year 2000 which
  does not require a minimum amount of coal to be purchased,  allowing  PGE  to
 obtain coal from other sources.  During 1995 PGE did not take deliveries under
 this  contract but purchased coal under favorable short-term agreements.  Coal
 purchases  in  1995  contained  less than 0.5% of sulfur by weight and emitted
 less than the EPA allowable limit  of  1.2  pounds of sulfur dioxide per MMBtu
 when burned.  The coal, from surface mining operations  in  the  Powder  River
  Basin,  was  subject  to  federal,  state,  and  local  regulations.  Coal is
 delivered to Boardman by rail under a contract which expires in 2002.

 COLSTRIP
  Coal  for Units 3 and 4, located in southeastern Montana, is  provided  under
 contract  with  Western  Energy  Company, a wholly owned subsidiary of Montana
 Power Company.  The contract provides  that the coal delivered will not exceed
 a maximum sulfur content of 1.5% by weight.   The  Colstrip  plant  has sulfur
 dioxide removal equipment to allow operation in compliance with EPA's  source-
 performance emission standards.

 CENTRALIA
 Coal for Units 1 and 2, located in Southwestern Washington, is provided  under
  contract  with  PacifiCorp  doing business as PacifiCorp Electric Operations.
 Most of Centralia's coal requirements  are  expected to be provided under this
 contract for the foreseeable future.


<TABLE>
<CAPTION>
                                SULFUR                     TYPE OF POLLUTION
 PLANT                          CONTENT                    CONTROL EQUIPMENT
 <S>                            <C>               <C>
       Boardman, OR             0.3%              Electrostatic precipitators
       Centralia, WA            0.7%              Electrostatic precipitators
       Colstrip, MT             0.7%              Scrubbers and precipitators
</TABLE>

                                      14
<PAGE>

 NATURAL GAS

 In addition to the agreements discussed below, the Company utilizes short-term
 agreements and spot market purchases to secure transportation capacity and gas
 supplies sufficient to fuel plant operations.

 BEAVER
 PGE  owns  90%  of  a  pipeline  which  directly  connects Beaver to Northwest
 Pipeline, an interstate gas pipeline operating between  British  Columbia  and
  New  Mexico.   During 1995, PGE had access to 76,000 MMBtu per day of firm 
  transportation capacity, or enough to operate Beaver at approximately 70% 
  capacity.

 COYOTE SPRINGS
 In November of 1995, PGE began service to its Coyote Springs project utilizing
 firm transportation capacity of 41,000 MMBtu/day on the interconnected systems
 of various shippers.   Two-year  contracts expiring in 1997 supply natural gas
  to  Coyote Springs at a 75% load factor.   PGE  also  obtained  the  required
 licenses  and  certificates necessary for the Company to independently bring
 natural gas from  Canada which will provide PGE with the opportunity to 
contract directly with Canadian suppliers  of  natural  gas  to  support 
Coyote Springs operations.

                             ENVIRONMENTAL MATTERS

  PGE  operates  in  a  state recognized for environmental  leadership.   PGE's
  environmental  stewardship   policy   emphasizes   minimizing  waste  in  its
 operations, minimizing environmental risk and promoting energy efficiency.

 ENVIRONMENTAL REGULATION
  PGE  is subject to regulation by federal, state, and local  authorities  with
regard to air and water quality, noise, waste disposal, and other environmental
 issues.  PGE is also subject to the Rivers and Harbors Act of 1899 and similar
 Oregon laws  under  which  it  must obtain permits from the U.S. Army Corps of
 Engineers or the Oregon Division  of  State  Lands  to construct facilities or
 perform activities in navigable waters of the State.   The  EPA  regulates the
 proper use, transportation, clean-up and disposal of polychlorinated biphenyls
  (PCBs).   State  agencies or departments which have direct jurisdiction  over
 environmental matters  include  the Environmental Quality Commission, the DEQ,
 the Oregon Department of Energy  and EFSC. Environmental matters regulated by
 these agencies include the siting and  operation  of generating facilities and
 the accumulation, cleanup and disposal of toxic and hazardous wastes.

 AIR/WATER QUALITY
  Congress passed amendments to the Clean Air Act (Act)  that  will  renew  and
 intensify national efforts to reduce air pollution.  Significant reductions in
 emissions  of  sulfur  dioxide,  nitrogen oxide and other contaminants will be
 required over the next several years.   Coal-fired  plant  operations  will be
 affected by these emission limitations.  Federal implementing standards  under
  the  Act  are  being drafted at the present time.  State governments are also
 charged with monitoring  and  administering certain portions of the Act.  Each
 state is required to set guidelines that at least equal the federal standards.

 In 1993, the EPA issued its final allocation of emission allowances.  Boardman
 was assigned sufficient allowances  to  operate after the year 2000 at a 60 to
  67%  capacity factor without having to further  reduce  emissions.   PGE  has
 purchased  additional  allowances  and  anticipates  being able to operate the
 plant at a normal 85% capacity factor.  Centralia will  be  required to reduce
 emissions by the year 2000, and the owners are examining several options such
  as  installing  scrubbers, converting to lower-sulfur coal or natural gas, or
 purchasing emission  allowances.   It is not anticipated that Colstrip will be
 required to reduce emissions because  it  utilizes scrubbers.  However, future
 legislation, if adopted, could affect plant  operations and increase operating
 costs or reduce coal-fired capacity.

  Boardman's  air  contaminant discharge permit, issued  by  the  DEQ,  has  no
 limitations on power  production.   This  permit expires in the year 2000.  
 The water pollution control facilities permit for Boardman expired in 
 
                                      15
<PAGE> 

 May 1991.  The DEQ is processing the permit application and renewal is 
 expected.  In the interim, Boardman is permitted to continue operating 
 under the terms of the original permit.

 DEQ  air  contaminant  discharge  permits  for the combustion  turbine
 generators at Bethel expired in 1995 and were replaced by new federal permits.
 Bethel was one of the first plants in the nation to successfully pass the more
 rigorous federal permitting process.  DEQ still limits night operations to one
 unit due to noise considerations.  Maximum plant operations are allowed during
 the day.  The combustion turbines are allowed to operate on either natural gas
 or oil.

  PGE is no longer accepting oil shipments by river for  its  Beaver  plant  in
 order to eliminate the risk of an oil spill into the Columbia River.  Instead,
 the  rail off-loading facility has been upgraded. This plant is normally fired
 by natural gas, and only small amounts of oil are used.

 ENVIRONMENTAL CLEANUP
 PGE is  involved with others in the environmental clean-up of PCB contaminants
 at various  sites  as  a  potentially  responsible  party (PRP).  The clean-up
  effort  is considered complete at several sites which  are  awaiting  consent
 orders from  the  appropriate  regulatory  agencies.   Future  clean-up  costs
 associated with these sites are not expected to be material.

                                      16
<PAGE>

 PORTLAND GENERAL HOLDINGS, INC. - NONUTILITY BUSINESSES

 GENERAL

  Holdings  is  a wholly owned subsidiary of Portland General and is the parent
 company of Portland  General's  subsidiaries  presently  engaged  in leveraged
  leasing  and administrative services for electric futures trading.   Holdings
 has provided  organizational separation from PGE and financial flexibility and
  support  for  the  operation  of  non-utility  businesses.   The  assets  and
 businesses of Holdings are primarily its  investments in its subsidiaries.

 LEASING

 COLUMBIA WILLAMETTE LEASING
 CWL acquires and  leases capital equipment on a leveraged basis.  During 1995,
 CWL made no new investments  in  leveraged leases.  CWL's investment portfolio
 consists of six commercial aircraft,  two  container  ships, 5,500 containers,
  coal,  tank,  and  hopper  railroad  cars, a truck assembly  plant,  an  acid
 treatment facility, and a wood chipping facility, totaling $153 million of net
 investment.  No new investments are expected  or  planned  for the foreseeable
 future.

 ELECTRICITY TRADING ADMINISTRATIVE SERVICES

 TULE HUB SERVICES COMPANY (TULE)
   Tule,   incorporated   in   Oregon  during  1994,  was  created  to  provide
 administrative services to facilitate  the  trading  of electric energy at 
 COB.  Tule is modeled after  similar  companies  in
  the  crude  oil  and  natural  gas  industries  that  evolved  as a result of
  deregulation  and  the trading of related futures contracts.  Tule  has  been
 working with the operators of the interconnected transmission lines to develop
  and  test a transfer service  which  will  verify  and  reconcile  the  title
 transfers occurring among the various buyers and sellers at COB.  This        
 will facilitate  the  trading  of electricity for power marketers by providing
 record-keeping while protecting competitive information.

 INDEPENDENT POWER

 INVESTMENT IN BONNEVILLE PACIFIC CORPORATION
 In October 1990, Holdings purchased  20%  of  the  common  stock of Bonneville
 Pacific, an independent power producer headquartered in Salt  Lake City, Utah.
 Over the next six months, Holdings purchased additional shares  of  Bonneville
  Pacific  common  stock,  increasing  its investment to 46% of the outstanding
  stock.  Holdings also has outstanding loans  of  $28  million  to  Bonneville
 Pacific  and  its  subsidiaries.  In November 1991, Portland General announced
 that it was halting  further  investments,  and  Holdings wrote off its equity
  investment  in  and  loans  to  Bonneville Pacific.  In  addition,  Holdings'
 representatives resigned from Bonneville  Pacific's board of directors.  These
   decisions  were  based  in  part  on  Bonneville   Pacific   underperforming
 expectations,  the  impairment of the investment in Bonneville Pacific and the
 inability of Bonneville  Pacific  to  meet project sell-down commitments under
 the original purchase agreement.  Bonneville  Pacific has filed for protection
  under  Chapter 11 of the Federal Bankruptcy Code.   Holdings  has  instituted
 legal proceedings  with  regard  to  its  investment  in  Bonneville  Pacific.
  Numerous  lawsuits  have been filed in this matter by Bonneville Pacific  and
 other parties since late  1991.   See  Note 14, Legal Matters, in the Notes to
 Financial Statements and Item 3, Legal Proceedings, for more information.


                                      17
<PAGE>

 ITEM 2.          PROPERTIES


 PORTLAND GENERAL CORPORATION

  Discussion  regarding  nonutility properties  is  included  in  the  previous
 section.

 PORTLAND GENERAL ELECTRIC COMPANY

  PGE's principal plants and  appurtenant  generating  facilities  and  storage
 reservoirs  are situated on land owned by PGE in fee or land under the control
  of  PGE pursuant  to  valid  existing  leases,  federal  or  state  licenses,
 easements,  or  other  agreements.   In some cases meters and transformers are
 located upon the premises of customers.   The  Indenture  securing PGE's first
 mortgage bonds constitutes a direct first mortgage lien on  substantially  all
  utility  property  and franchises, other than expressly excepted property.
 The map below shows PGE's Oregon service territory and location of generating
  facilities:

                                    OREGON

                                      18
<PAGE>

 Generating facilities owned by PGE are set forth in the following table:

<TABLE>
<CAPTION>

                                                                      PGE Net MW
                                                                      Capability
 FACILITY                Location                      Fuel
 <S>                     <C>                          <C>             <C>          <C>
 WHOLLY OWNED:
   Faraday               Clackamas River               Hydro               44
   North Fork            Clackamas River               Hydro               52
   Oak Grove             Clackamas River               Hydro               44
   River Mill            Clackamas River               Hydro               23
   Pelton                Deschutes River               Hydro              108
   Round Butte           Deschutes River               Hydro              300
   Bull Run              Sandy River                   Hydro               22
   Sullivan              Willamette River              Hydro               16
   Beaver                Clatskanie, OR               Gas/Oil             500
   Bethel                Salem, OR                    Gas/Oil             116
   Coyote Springs        Boardman, OR                 Gas/Oil             241
                                                                                      PGE
 JOINTLY OWNED:                                                                    INTEREST
   Boardman              Boardman, OR                  Coal              330 @       65.0%
   Centralia             Centralia, WA                 Coal               33 @        2.5%
   Colstrip 3 & 4        Colstrip, MT                  Coal              288 @       20.0%
   Trojan                Rainier, OR                  Nuclear              - @       67.5%
                                                         TOTAL          2,117
</TABLE>


 PGE holds five licenses  under the Federal Power Act which expire 
 during the years 2001 to 2006
 for its hydroelectric generating  plants.   FERC  requires  that  a  notice of
intent to relicense these projects be filed approximately five years
 prior to expiration of the  license.   PGE is actively pursuing the renewal of
 these licenses. The State of Oregon also  has licensed all or portions of five
 hydro plants.  For further information see the Hydro Relicensing discussion in
  Item  7, Management's Discussion and Analysis  of  Financial  Condition  and
 Results of Operations.

 Following  the  1993  closure,  PGE  was  granted  a  possession-only  license
  amendment  for  Trojan  by  the  NRC.   In  early  1995  PGE filed its Trojan
 decommissioning plan with the NRC.  See Note 11, Trojan Nuclear Plant, in the 
 Notes to the Financial Statements for further information.

 LEASED PROPERTIES
 Combustion turbine generators at Bethel and Beaver are leased  by  PGE.  These
  leases  expire  in  1999.   PGE  leases  its headquarters complex in downtown
  Portland  and  the coal-handling facilities and  certain  railroad  cars  for
 Boardman.

                                      19
<PAGE>

 ITEM 3. LEGAL PROCEEDINGS

                                  NONUTILITY

 ROGER G. SEGAL, AS  THE  CHAPTER 11 TRUSTEE FOR BONNEVILLE PACIFIC CORPORATION
 V. PORTLAND GENERAL CORPORATION,  PORTLAND  GENERAL HOLDINGS, INC. ET AL, U.S.
 DISTRICT COURT FOR THE DISTRICT OF UTAH

  This  action was originally filed on April 24,  1992  by  Bonneville  Pacific
 against  Portland  General,  Holdings, and certain individuals affiliated with
  Portland General or Holdings alleging  breach  of  fiduciary  duty,  tortious
 interference,  breach  of  contract,  and  other  actionable wrongs related to
 Holdings' investment in Bonneville Pacific.

  On August 2, 1993 an amended complaint was filed by  the  Bonneville  Pacific
 bankruptcy  trustee  against  Portland  General, Holdings, certain individuals
 affiliated with Portland General or Holdings  and  over  50  other  defendants
  unrelated  to  Portland  General  or  Holdings.   This  complaint and another
 subsequent amended version were dismissed by the Court in  whole  or  in part.
  The Trustee has currently on file his Fifth Amended Complaint.  The complaint
 includes  allegations  of RICO violations and RICO conspiracy, collusive tort,
 civil conspiracy, common  law  fraud,  negligent  misrepresentation, breach of
 fiduciary duty, liability as a partner for the debts  of  a  partnership,  and
  other  actionable  wrongs.   The  Court has rejected the Trustee's previously
 filed damage study which is expected  to be revised and refiled.  The Portland
 General parties have again filed motions  to dismiss.  Arguments were heard in
  December  1994,  and the motions are awaiting  decision  by  the  Court.   No
 discovery cutoff or trial date has been set.

 PORTLAND GENERAL HOLDINGS,  INC.  V.  DELOITTE & TOUCHE, ET AL, THIRD JUDICIAL
 DISTRICT COURT FOR SALT LAKE COUNTY

 On January 22, 1992, Holdings filed a complaint alleging Deloitte & Touche and
  certain  individuals associated with Bonneville  Pacific  misrepresented  the
  financial condition  of  Bonneville  Pacific.   The  complaint  alleges  that
 Holdings  relied  on  fraudulent statements and omissions by Deloitte & Touche
 and the individual defendants  in acquiring a 46% interest in and making loans
 to Bonneville Pacific starting in  September  1990.   Holdings  alleges, among
  other  things,  the  existence  of  transactions in which generation projects
 developed or purchased by Bonneville Pacific  were  transferred at exaggerated
 valuations or artificially inflated prices to Bonneville  Pacific's affiliated
  entities,  Bonneville  Pacific  related parties or third parties.   The  suit
 claims that Bonneville Pacific's books,  as  audited by Deloitte & Touche, led
  Holdings  to  conclude  wrongly  that  Bonneville  Pacific's  management  was
 effective and could achieve the profitable sale of certain  assets,  as called
  for  in  Holdings' purchase  agreement with Bonneville Pacific.  Holdings  is
 seeking approximately $228 million in damages.

  This  case has been consolidated  for  all  purposes  with  PORTLAND  GENERAL
 HOLDINGS, INC. V. BONNEVILLE GROUP AND RAYMOND L. HIXSON noted below.  Some of
 the defendants  in  the  consolidated case have asserted counterclaims against
  Holdings.  Certain counterclaims  do  not  presently  specify  an  amount  of
 damages.   The remaining counterclaims, taken together, seek approximately $80
  million  in  specified  and  punitive  damages.   The  Company  believes  the
 counterclaims have little merit.

 PORTLAND GENERAL HOLDINGS, INC. V. THE BONNEVILLE GROUP AND RAYMOND L. HIXSON,
 THIRD JUDICIAL DISTRICT COURT FOR SALT LAKE COUNTY

 On June 1, 1993  Holdings  filed a complaint alleging The Bonneville Group and
  Raymond  L.  Hixson misrepresented  the  financial  condition  of  Bonneville
 Pacific.  The complaint  contains  substantially  the same allegations against
 these defendants as claimed in PORTLAND GENERAL HOLDINGS,  INC.  V. DELOITTE &
 TOUCHE, ET AL and seeks the same damages.


                                      20
<PAGE>

                                    UTILITY

   PGE   V.   RONALD   EACHUS,   MYRON   KATZ,   NANCY   RYLES  (OREGON  PUBLIC
UTILITY COMMISSIONERS) AND THE OPUC, MARION COUNTY CIRCUIT COURT

 In July 1990 PGE reached an out-of-court settlement with  the  OPUC  on two of
  three  matters  arising from its 1987 rate case.  The settlement resolved
 the dispute regarding  the treatment of certain investment tax credits and the
 1986-1987 interim relief.  The settlement did not resolve the issue related to
 the gain on PGE's sale of  a portion of Boardman and the Intertie.  On January
 23, 1995, the judge affirmed  the  OPUC decision allocating 77% of the gain to
 customers over a 27-year period which  PGE  subsequently appealed.  PGE 
 withdrew its appeal in 
 December 1995, pursuant to an agreement adopted in an OPUC rate order.  
 Certain cross claims filed by the Utility
 Reform Project are still active in this case  which PGE will vigorously defend
  against.   See Note 13, Regulatory Matters, in the  Notes  to  Financial
 Statements for more details.

 UTILITY REFORM PROJECT V. OPUC, MULTNOMAH COUNTY CIRCUIT COURT

 On February 18,  1992  the  Utility  Reform Project (URP) filed a complaint in
 Multnomah County Oregon Circuit Court asking the OPUC to set aside and rescind
  OPUC Order No. 91-1781 which authorized  PGE  a  temporary rate increase to
 recover  a  portion  of the excess power costs incurred during the 1991 Trojan
 outage.  URP and the OPUC agreed to stay the case pending OPUC hearings on the
 OPUC order.  On February  22, 1992 the OPUC issued an order approving the rate
 increase.  The case is currently under a stay.  PGE has not intervened in this
 case.

 COLUMBIA STEEL CASTING CO.,  INC.  V.  PGE,  PACIFICORP, AND MYRON KATZ, NANCY
 RYLES AND RONALD EACHUS, NINTH CIRCUIT COURT OF APPEALS

 On June 19, 1990 Columbia Steel filed a complaint  for  declaratory  judgment,
  injunctive  relief  and  damages  in U.S. District Court for the District  of
 Oregon contending that a 1972 territory  allocation agreement 
 between PGE and PacifiCorp, dba Pacific Power & Light Company (PP&L), which
 was subsequently approved by the OPUC and the City of Portland, does not
 give PGE the exclusive right to serve them  nor  does  it  allow  PP&L to deny
  service to them.  Columbia Steel is seeking an unspecified amount in  damages
 amounting to three times the excess power costs paid over a 10-year period.

 On  July 3, 1991 the Court ruled that the Agreement did not allocate customers
 for the  provision  of  exclusive services and that the 1972 order of the OPUC
 approving the Agreement did  not  order  the  allocation  of  territories  and
 customers.  Subsequently, on August 19, 1993 the Court ruled that Columbia 
 Steel was 
  entitled  to  receive  from  PGE  approximately $1.3 million in damages which
  represented the additional costs incurred  by  Columbia  Steel  for  electric
 service from July 1990 to July 1991, trebled, plus costs and attorney's fees.

 PGE appealed to the U.S. Court of Appeals for the Ninth Circuit which on
 July 20, 1995, issued an  opinion  in favor of PGE, reversing the judgment and
 ordering judgment to be entered in favor  of  PGE.   Columbia  Steel  filed  a
  petition  for  reconsideration  which  the  court  has  not yet ruled on.


 PORTLAND GENERAL ELECTRIC COMPANY V. WESTINGHOUSE ELECTRIC  CORPORATION,  U.S.
 DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

  On  February  17,  1993  PGE  filed a complaint against Westinghouse Electric
 Corporation (Westinghouse), the  manufacturer  of  Trojan's  steam generators,
  alleging  breach  of contract, negligence, fraud, negligent misrepresentation
  and  violation  of  federal  and  state  racketeering  statutes  relating  to
 Westinghouse's design,  manufacture  and installation of the steam generators.
 On June 28, 1993 the Court dismissed PGE's  claims of negligence and negligent
 misrepresentation.  A trial date has not been set.


                                      21
<PAGE>

  SOUTHERN  CALIFORNIA  EDISON  COMPANY V. PGE, U.S.  DISTRICT  COURT  FOR  THE
 DISTRICT OF OREGON

 On August 3, 1994, Southern California  Edison  (SCE)  filed  a  complaint  in
  Multnomah County Circuit Court in Portland, Oregon claiming PGE's decision to
 close  Trojan  violated the terms of a long-term firm power sales and exchange
 agreement entered  into  in  1986.  The 25-year contract is for 75 MW of firm
 energy and capacity plus a 225-MW seasonal exchange.  Under the agreement SCE
 is obligated to pay to PGE a reservation  fee  for  system  capacity, seasonal
 exchange and other services equal to $16.9 million annually.   SCE  is seeking
  termination of the agreement and damages including a return of payments  made
 to PGE from the date of PGE's alleged default (approximately $51 million).

 PGE  successfully  moved  for  summary  judgment on all of plaintiff's claims.
  Judgment  dismissing  all  of  those claims with  prejudice  was  entered  on
 September 12, 1995.  Plaintiff has filed a notice of appeal.

 UTILITY REFORM PROJECT AND DON'T  WASTE  OREGON  COUNCIL  V.  ENERGY  FACILITY
  SITING  COUNCIL,  PORTLAND GENERAL ELECTRIC COMPANY AND OREGON DEPARTMENT  OF
 FISH AND WILDLIFE, SUPREME COURT OF THE STATE OF OREGON

 On November 16, 1994 and November 17, 1994, URP and Don't Waste Oregon Council
 (DWOC), respectively,  filed Petitions for Judicial Review of the order of the
 EFSC granting a site certificate for the Coyote Springs Generation Plant.  The
 Petitions have been consolidated.   URP  and  DWOC  seek  to  have  the  order
  remanded  to  EFSC  for  reconsideration.   They  allege  that  EFSC  did not
  adequately  address  standards  related  to  the need for power and financial
  assurances, and erred in its treatment of certain  confidential  information.
In November 1995, the Court upheld the EFSC decision granting the Coyote 
Springs Site Certificate and subsequently denied a petition for 
reconsideration.

 CITIZEN'S UTILITY BOARD OF OREGON  V.  PUBLIC  UTILITY  COMMISSION  OF OREGON,
 COURT OF APPEALS FOR THE STATE OF OREGON, JANUARY 1995

  The  Citizen's  Utility  Board  (CUB)  appealed a 1994 ruling from the Marion
 County Circuit Court which upheld the order  of  the  OPUC  in its Declaratory
 Ruling proceeding (DR-10).  In the DR-10 proceeding, PGE filed  an Application
 with the OPUC requesting a Declaratory Ruling regarding recovery of the Trojan
 investment and decommissioning costs.  On August 9, 1993 the OPUC  issued  the
  declaratory ruling.  In its ruling, the OPUC agreed with an opinion issued by
 the Oregon Department of Justice (Attorney General) stating that under current
 law, the OPUC has authority to allow recovery of and a return on Trojan 
 investment and future decommissioning costs.

 UTILITY  REFORM  PROJECT  AND  COLLEEN O'NEIL V. OPUC, MULTNOMAH COUNTY OREGON
 CIRCUIT COURT, MARCH 1995

 The URP filed an appeal of the OPUC's order in PGE's general rate case.  Among
  other  things,  the  OPUC  order  granted   PGE   full   recovery  of  Trojan
 Decommissioning costs and 87% of its remaining investment in  the  plant.  URP
  alleges  that  the OPUC lacks authority to allow PGE to recover Trojan  costs
 through its rates.   The  complaint  seeks to remand the case back to the OPUC
 and have all costs related to Trojan immediately removed from PGE's rates.

  CITIZENS  UTILITY BOARD OF OREGON V. PUBLIC  UTILITY  COMMISSION  OF  OREGON,
 MARION COUNTY OREGON CIRCUIT COURT, APRIL 1995

 The CUB filed  an  appeal challenging the portion of the OPUC's order in PGE's
 general rate case authorizing  PGE  to  recover  a  return  on  its  remaining
 investment in Trojan.  CUB alleges that the OPUC's decision is not based  upon
  evidence  received in the rate case, is not supported by substantial evidence
 in the record  of the case, is based on an erroneous interpretation of law and
  is  outside  the scope  of  the  OPUC's  discretion, and  otherwise  violates
 constitutional or statutory provisions.  CUB seeks to have the order modified,
 vacated, set aside or reversed.


                                      22
<PAGE>

 ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 None.


EXECUTIVE OFFICERS  OF  PORTLAND  GENERAL  CORPORATION  AND  PORTLAND  GENERAL
 ELECTRIC (*)


<TABLE>
<CAPTION>
            NAME                AGE                             BUSINESS     EXPERIENCE

<S>                             <C>  <C>
PGC/PGE

Ken L. Harrison                  53  Appointed to current position of Chairman of the Board and Chief Executive
  Chairman of the Board, Chief       Officer on December 1, 1988 and President of Portland General since August
  Executive Officer                  4, 1992.  Served as President of Portland General Electric from June 1987 until
  President                          September 1989.  Reappointed President of PGE on January 1, 1996.


 Alvin Alexanderson              48  Appointed to current position on December 12, 1995.  Served as Vice President,
  Senior Vice President              Rates and Regulatory Affairs from February 1991 until appointed to current
  General Counsel and Secretary      position.  Previously served as President of Portland General Exchange from May
                                     1988 until February 1991.

 Joseph M. Hirko                 39  Appointed to Senior Vice President on September 12, 1995.  Has served as 
  Senior Vice President              Vice President-Finance, Chief Financial Officer and Chief Accounting Officer
  Chief Financial Officer            since December 1991.  Served as Treasurer beginning in June 1989.  Served as Vice
                                     President,  Portland General Financial Services, Inc. from November 1985 until
                                     June 1989.

 Donald F. Kielblock             54  Appointed to current position on October 4, 1989.  Previously served as General
  Vice President - PGC/PGE           Manager, Information Services of PGE until appointed to current position.
  Human Resources

 
 PGE

 David K. Carboneau              49  Appointed to current position on January 1, 1996.  Served as Vice President, 
  Vice President                     Thermal and Power Operations from September 12, 1995 until appointed to current
  Information Technology             position.  Previously served as Vice President, Administration from October 1992
                                     to September 1995.  Served as Vice President, Information Resources from October
                                     1989 to October 1992.  For four years prior to October 1989, served as an executive
                                     officer of PGE.

 Richard E. Dyer                 53  Appointed  to  current  position  on  September  12,  1995.   Previously served as Vice 
  Senior  Vice President             President and General Manager of Power Resources and Marketing from August
  Power Supply                       1994 until appointed to current position.  Served as Vice President, PGE Marketing
                                     and Supply from July 1991 to August 1994.  Served as PGC Vice President and
                                     Assistant to the Chairman of the Board from October 1990 until July 1991.

 Peggy Y. Fowler                 44  Appointed to current position on September 12, 1995.  Served as Vice President,
  Senior Vice President              Distribution and Power Production from January 1990 until appointed to current
  Energy Services                    position.  Served as General Manager, Hydro Production and Transmission from
                                     September 1989 to January 1990.

 Frederick D. Miller             54  Appointed to current position on October 15, 1992.  Served as Director  of  
  Vice President                     Executive Department, State of Oregon, from 1987 until appointed to current
  Public Affairs and Corporate       position.
  Services



</TABLE>
  (*)  Officers are listed as of January 31, 1996.  The officers are elected 
  to serve for a term of one year or until their successors are elected and 
  qualified.


                                      23
<PAGE>


                                    Part II



 ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS


 PORTLAND GENERAL CORPORATION

 Portland  General's  common  stock is publicly held and traded on the New York
 and Pacific Stock Exchanges.   The  table  below  reflects  the  dividends  on
  Portland General's common stock and the stock price ranges as reported by THE
 WALL STREET JOURNAL for 1995 and 1994.

<TABLE>
<CAPTION>
                                   1995                               1994
 QUARTER            1ST       2ND      3RD     4TH      1ST      2ND      3RD      4TH
<S>                <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>

 High              20-7/8   23-1/4   25-3/4   29-1/4   20-1/2   18-7/8   18-1/4   19-3/4

 Low               18-7/8   20-1/4   21-5/8   25-1/4   17-1/4   16-3/8   16-1/2   16-1/2

 Closing price     20-7/8   22-3/8   25-5/8   29-1/8   17-1/2   17       16-7/8   19-1/4

 Cash dividends
 declared (cents)  30       30       30       30       30       30       30       30

</TABLE>

 The  approximate  number  of  shareholders  of  record as of December 31, l995
 was 42,051.


 PORTLAND GENERAL ELECTRIC COMPANY

 PGE is a wholly owned subsidiary of Portland General.   PGE's  common stock is
 not publicly traded.  Aggregate cash dividends declared on common  stock  were
 as follows (thousands of dollars):

                       QUARTER           1995           1994
                       First           $11,545        $15,393
                       Second           11,545         15,393
                       Third            13,682         12,828
                       Fourth           13,684         12,828

  PGE  is  restricted,  without  prior  OPUC approval, from making any dividend
  distributions  to  Portland General that would  reduce  PGE's  common  equity
 capital below 36% of total capitalization.



                                      24

<PAGE>

 ITEM 6.     SELECTED FINANCIAL DATA



 PORTLAND GENERAL CORPORATION

<TABLE>
<CAPTION>
                                                     FOR THE YEARS ENDED DECEMBER 31
                                      1995          1994          1993          1992            1991
                                              (thousands of dollars except per share amounts)
<S>                                 <C>           <C>           <C>           <C>              <C>
 
 Operating Revenues                 $983,582      $959,409      $946,829      $883,266         $889,876
 Net Operating Income                195,576       154,296       158,181       163,500          136,531
 Income (loss) from Continuing
  Operations                          81,036{1}     93,058        89,118        89,623          (20,698){2}
 Gain (loss) from Discontinued
  Operations{3}                            -         6,472             -             -          (29,169)
 Net Income (loss)                  $ 81,036{1}   $ 99,530      $ 89,118      $ 89,623         $(49,867)
 Earnings (loss) per Average
  Common Share
   Continuing Operations              $ 1.60        $ 1.86        $ 1.88        $ 1.93{4}        $ (.43){4}
   Discontinued Operations{3}              -           .13             -             -             (.63)

                                      $ 1.60        $ 1.99        $ 1.88        $ 1.93{4}        $(1.06){4}
 
 Dividends Declared
  per Common Share                    $ 1.20        $ 1.20        $ 1.20        $ 1.20           $ 1.20

 Total Assets                     $3,448,017    $3,559,271    $3,449,328    $3,140,625       $3,092,596
 Long-Term Obligations{5}            930,556       885,814       912,994       937,938          967,968

</TABLE>

 PORTLAND GENERAL ELECTRIC COMPANY

 <TABLE>
 <CAPTION>
                                             FOR THE YEARS ENDED DECEMBER 31
                               1995            1994          1993         1992        1991
                                                  (thousands of dollars)
 <S>                        <C>             <C>          <C>          <C>          <C>

 Operating Revenues           $981,628        $958,955     $944,531     $880,098     $885,578
 Net Operating Income          195,186         153,208      154,200      160,037      139,257
 Net Income                     92,787{1}      106,118       99,744      105,562       74,075

 Total Assets               $3,245,597      $3,354,151   $3,226,674   $2,920,980   $2,912,254
 Long-Term Obligations{5}      930,556         855,814      872,994      887,938      887,952


 

 NOTES TO THE TABLES ABOVE:
 1 Includes a loss of $50 million from regulatory disallowances.
 2 Includes a loss of $74 million from independent power.
 3 Reflects the results of real estate operations  which Portland General 
   discontinued in 1989.
 4 Includes $.02 for tax benefits from ESOP dividends.
 5 Includes long-term debt, preferred stock subject  to  mandatory  redemption
   requirements and long-term capital lease obligations.

                                      
</TABLE>                                      

                                      25
<PAGE>

 ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS


                             RESULTS OF OPERATIONS

 GENERAL

 Portland  General  reported  1995  earnings of $81 million or $1.60 per share,
 compared to $100 million or $1.99 per  share for 1994.  1995 results include a
 $50 million after-tax charge to income  related  to  the  OPUC's rate orders
 disallowing certain deferred power costs and 13% of PGE's remaining investment
  in  Trojan.  1994 earnings include the restoration to income of  $6  million,
 after tax, of previously recorded real estate reserves.  Excluding the effect
 of the regulatory disallowances,  income from continuing operations would have
 been $131 million compared to $93 million in 1994.

 PGE ACCOUNTS  FOR SUBSTANTIALLY ALL OF PORTLAND GENERAL'S ASSETS, REVENUES AND
 NET INCOME.  THE  FOLLOWING  DISCUSSION  FOCUSES  ON  PGE  UTILITY OPERATIONS,
 UNLESS OTHERWISE NOTED.

 1995 COMPARED TO 1994
 Strong operating earnings reflected the benefits of low variable  power  costs
  due to improved hydro conditions,  lower natural gas prices and a competitive
 wholesale  market.  The Company also benefited from continued sales growth and
 a retail price increase.

 Retail revenues  increased  $32  million,  or  nearly  4%,  due largely to the
 Company's general rate increase and continued load growth.     An  average  5%
general rate increase effective April 1, coupled with a 263,000 MWh increase in
  energy sales, resulted  in  $45  million of additional revenue.  
 An increase in retail  customers of 14,600 and a continuing
  strong  local  economy  resulted  in weather-adjusted load  growth  of  2.8%.
 Industrial customers contributed the major portion of load growth for the year
 due to  the recent expansion of high-technology  and  supporting industries in
  the region.  Weather-adjusted load for residential customers  increased  1.2%
 over  last  year.  Over  12,900  residential customers were added during 1995.
  Retail revenue increases were partially  offset  by warmer than normal 
  weather during winter heating months which decreased residential demand for  
  energy, and a  decrease  in  accrued
revenues, a result of fewer power cost deferrals and SAVE incentive revenues.

 Wholesale  sales  contributed  $95  million  or  approximately  10%  of  total
 operating revenues.  The Company's aggressive marketing efforts resulted in  a
  25%  increase  in   sales; however, revenues declined $11 million as average
 prices decreased 28%.

 Variable power costs fell $54 million, or 15%, despite increased  Company load
 as the average cost of power decreased  from  19.1 to 15.9 mills (10 mills = 1
  cent).  Improved hydro conditions, mild weather,  cheaper  natural  gas,  and
 competition among  suppliers all contributed to abundant and low-cost supplies
 of secondary energy in the region.  Company hydro generation increased 20%, or
 412,000  MWh,  reflecting  good water conditions on the Clackamas River system
 similar to those experienced  throughout  the 
 
                                      26
<PAGE>
 
 
 West.   Energy purchases were up 28% due to increased loads and thermal 
 displacement, while abundant supplies of energy drove secondary prices below 
 1994 levels.  Secondary purchases averaged 11.3 mills, ranging from 1.8 to 
 28 mills, compared to an average 20.1 mills in 1994.

 Throughout the year PGE was able to economically  dispatch or displace thermal
 generation in response to movements in the cost of short-term power.  Low-cost
 hydro significantly displaced PGE thermal generation, which decreased 32% from 
 1994.  Beaver generated electricity  at 38% 
 lower  cost  due to favorable gas prices.

<TABLE>
<CAPTION>
                RESOURCE MIX/VARIABLE POWER COSTS
 <S>                         <C>                <C>           <C>             <C>
                                                                 Average Variable
                                   Resource Mix               Power Cost (Mills/KWh)
                             1995               1994           1995           1994
 Generation                   36%                47%            8.0            10.6
 Firm Purchases               39%                33%           22.7            25.7
 Secondary Purchases          25%                20%           11.3            20.1
   Total                     100%               100%           15.9            19.1
</TABLE>


  Operating expenses (excluding variable power costs, depreciation  and  income
 taxes) were $10 million, or 4%, higher primarily due to storm damages incurred
 in December 1995.  A combination of wind and ice storms caused a record number
 of  customer  outages  in  PGE's service territory.  Repair efforts to restore
 customers' service included  around  the  clock efforts from PGE personnel and
 contract crews at a total cost exceeding $10  million,  of  which PGE is self-
 insured for the first $5 million.

  A  March 1995 general rate order disallowed recovery of 13% of  PGE's  Trojan
 investment  resulting in a $37 million after-tax charge to income.  PGE also
 recorded a $13 million after-tax third quarter loss as a result of an OPUC 
 order which
 disallowed recovery of a portion  of  the Company's deferred power costs.  For
 further information on the OPUC order, see Note 13, Regulatory Matters.
 
  Depreciation  increased  $10  million,  or   8%,  largely  due  to  higher
 depreciation rates effective with the Company's general rate increase.  Income
 taxes increased $18 million primarily due  to an increase in before-tax
 operating income.  The Company  benefited from a one-time state tax refund of
 approximately $4 million which contributed to a lower effective  
 tax rate for the year.  

 The construction of Coyote Springs accounted for the increases in capitalized 
 interest during each year, which partially offset a corresponding increase in
 interest expense.  Income also includes a $5 million charge for
 increased charitable donations.

 1994 COMPARED TO 1993
 Portland  General's  1994  earnings of $100 million, $1.99 per share, compared
  favorably  to  1993 earnings of  $89  million,  $1.88  per  share.   In  1994
 previously recorded real estate reserves of $6 million, after tax, or $.13 per
 share, were restored  to  income  as a result of the substantial completion of
 divestiture of real estate investments.  Income from continuing operations was
 $93 million compared to $89 million in 1993.

 Customer growth and increased wholesale  activity  resulted  in  strong energy
  sales  for  the year. KWh sales increased 8% over the prior year, adding  $60
 million to revenues.   Weather-adjusted  retail  load grew approximately 2.5%
  with  the addition of nearly 13,700 retail customers.   Wholesale  kWh  sales
 escalated 69% reflecting the availability of low cost power for resale and the
 Company's  active  wholesale marketing of energy throughout the western United
 States.

                                      27
<PAGE>

 Accrued revenues of  $19  million, relating to power cost deferrals, were down
 substantially from $67 million  in  1993.  PGE deferred for later collection a
 portion of incremental Trojan replacement  power  costs for nine months during
 1993.  Nuclear cost savings allowed PGE to operate  the  last  nine  months of
 1994 without the need for additional power cost deferrals.

An  8%  increase  in  total  sales combined with a 14% decline in PGE's hydro
 generation contributed to a $35  million  increase  in  variable  power costs.
  Strong  performance  at  PGE's  thermal generating facilities allowed PGE  to
 generate 47% of its total system load  compared to 42% in 1993.  Generation at
  coal  fired plants increased 20%, with all  plants  producing  above 1993
 levels.   Despite the increased generation at its thermal plants, average fuel
  costs decreased  by  4%  due  to  low  natural  gas  prices.   These  factors
 contributed  to  a  reduction  in  total  average variable power costs to 19.1
 mills/kWh from 19.4 mills/kWh in 1993.

   Operating   expenses   (excluding   variable  power   costs,   depreciation,
  and  amortization)  decreased  by  $24  million.   Continued
 emphasis on cost reductions at Trojan resulted  in  $30  million  in decreased
  nuclear operating expenses.  Since plant closure in 1993, the number  of  PGE
 nuclear  employees  has  dropped  from  984  to 166 and correspondingly annual
 nuclear operating expenses have declined from   approximately  $96  million to
  $15  million.   Increases  in  operating  costs  on PGE's distribution system
 partially offset nuclear cost savings.

  The  $4  million increase in other income reflected an  increase  in  accrued
 interest on  deferred  power  costs  and  a  gain  on  the sale of non-utility
 property, partially offset by provisions for litigation  costs.  Allowance for
funds used during construction increased $4 million, primarily due to the level
  of construction expenditures at Coyote Springs in 1994, which  helped  offset
 increased interest costs on short-term borrowings.


                              FINANCIAL CONDITION

 During  1995  regulatory actions resulted in the write-down and elimination of
 certain regulatory assets and liabilities.  The March 1995 general rate order,
 discussed in Note 13, Regulatory Matters, 
  resulted  in the write-down of 13% of PGE's investment in Trojan.  
 Continued amortization and the regulatory offset of
 $20 million,  discussed  below,  also contributed to the
 decrease in the Trojan investment balance.

 In November 1995 the Company placed Coyote Springs in service.
 Concurrently, a rate proceeding was finalized
 which provided recovery of the fixed and capital costs of the plant.

  The November 1995 proceeding  also  approved partial recovery of PGE's 
  outstanding power costs deferrals, recorded as unbilled and accrued revenues.
 The order adopted
 the Company's  proposal to offset the uncollected balances of all power cost
 deferrals approved for recovery, a portion of
 the Trojan Investment, and certain  other regulatory assets
 against the Company's $117 million deferred gain  remaining from the 1985
 sale  of a portion of
 Boardman and the Intertie.  See Note 13, Regulatory Matters, in  the  Notes to
 the Financial Statements for additional discussion regarding the November 1995
 order.


                                   CASH FLOW

 PORTLAND GENERAL CORPORATION
 Portland General requires cash to pay dividends to its common stockholders, to
  provide  funds to its subsidiaries, to meet debt service obligations and  for
 day-to-day  operations.   Sources of cash are dividends from PGE, asset sales,
 leasing rentals, short- and  intermediate-term  borrowings,  and  the  sale of
 Portland General's common stock.

  During 1995, Portland General discontinued its commercial paper program.   In
 order to meet periodic liquidity and operational needs, Portland General has 
 maintained a one-year credit facility of $15 million from which no borrowings 
 were made during 1995.  
 As of year-end  1995  Portland  General  had  $30 million of debt which
 matures in 1996.

  Portland  General received $50 million in dividends from  PGE.  In  addition,
 Portland General  received  $10  million  in proceeds from the issuance of new
  shares  of  common stock under its Dividend Reinvestment  and  
  
  
                                      28
<PAGE>  

  Optional  Cash
 Payment Plan (DRIP).   Beginning  in November 1995 Portland General began open
 market purchases of common stock for  the DRIP program rather than issuing new
 shares.


 PORTLAND GENERAL ELECTRIC COMPANY

 CASH PROVIDED BY OPERATIONS is used to meet the day-to-day  cash requirements
 of PGE.  Supplemental cash is obtained from external borrowings as needed.

  A significant portion of cash from operations  comes  from  depreciation  and
 amortization  of  utility  plant,  charges  which  are  recovered  in customer
  revenues  but require no current cash outlay.  Changes in accounts receivable
 and accounts  payable  can  also be significant contributors or users of cash.
 Improved cash flow for the current  year  reflects the Company's general price
  increase  and  lower variable power costs.  Cash  flows  were  not  adversely
  affected by the $50  million non-cash charge  to  income  for  regulatory
 disallowances.   1994 cash flows were affected by a $20 million tax prepayment
 related to a 1985  WNP-3  abandonment  loss deduction which was challenged  by
  the IRS.  During 1995 Portland General reached  a  settlement  with  the  IRS
 regarding  the  deduction.   The  settlement  did  not  materially  affect the
   Company's   cash  requirements  (see  Note  3,  Income  Taxes,  for  further
 information).

 INVESTING ACTIVITIES include generation,  transmission  and  distribution
 facilities improvements, as  well as energy efficiency programs.  1995 capital
 expenditures of $232 million were  primarily  for the expansion and upgrade of
  its transmission and distribution system and completion  of  Coyote  Springs.
 Annual capital expenditures are expected to be approximately $170 million over
 the  next few years.  The majority of anticipated capital expenditures are for
 improvements  to  the  Company's  expanding distribution system to support the
 addition of new customers to PGE's service territory.

  The  Company  plans  to  proceed with obtaining  required  site  permits  for
 potential new generating resources but does not anticipate new construction in
 the foreseeable future.  The  Company  will continue to make energy efficiency
 expenditures but at approximately 50% of 1995 levels.

 FINANCING ACTIVITIES provide supplemental  cash  for day-to-day operations and
 capital requirements as needed.  During 1996 internal  funding  is expected to
 cover the Company's capital expenditures.

  PGE  maintains  varying levels of short-term debt, primarily in the  form  of
 commercial paper,  which  serve  as  the  primary form of daily liquidity with
  1995 balances ranging from $30 million to $170 million. PGE  has  committed  
  borrowing
 facilities totaling $200 million which  are used primarily as backup for PGE's
 $200 million commercial paper facility.   In  July 1995, PGE extended the life
  of  its $200 million credit facility to five years  and  reduced  the  annual
 commitment  fee  to  ensure  adequate  liquidity  and  take  advantage  of  an
 attractive market for credit.

  In  1995  PGE redeemed $80 million of preferred stock including a $10 million
 sinking fund  payment.   To  fund  the  redemption,  PGE issued $75 million of
 Junior Subordinated Deferrable Interest Debentures due 2035, which are listed 
 on the NYSE.

 In May 1995 PGE issued $75 million of medium term notes secured by  its  First
 Mortgage Bond Indenture with maturities ranging from 5 to 12 years.
 Concurrently with  the  issuance  of  the  debt,  PGE  settled two outstanding
 forward interest rate swap agreements, each with a notional amount of $25
 million, which were initiated  in November 1994.  The termination resulted in
 a $5 million payment which was deferred and will
 be amortized over the average life of the bonds issued.

 PGE filed a shelf registration  statement  for  $250 million providing for the
 issuance of secured debt as well as unsecured senior  and  junior  debentures.
 The registration statement allows for the debt to be issued for terms  ranging
 from nine months to 40 years as either fixed or floating rate debt.  With  the
  issuance  of the $75 million 
  
                                      29
<PAGE>

  of debentures discussed above, PGE currently has
 $175 million of debt issuance capacity under its existing shelf registration.

 The issuance  of  additional preferred stock and First Mortgage Bonds requires
 PGE to meet earnings  coverage  and  security  provisions  set  forth  in  the
 Articles of Incorporation and the Indenture securing its First Mortgage Bonds.
  As  of December 31, 1995, PGE could issue $408 million of preferred stock and
 $455 million of additional First Mortgage Bonds.

 In January  1996  the  Company   issued  a $35 million variable rate note to a
  commercial bank maturing in January 1997 to  fund  the  early  redemption  of
 7.75% and 7.95% First Mortgage Bonds.

                        
                        FINANCIAL AND OPERATING OUTLOOK

 COMPETITION
 The Energy Policy Act of 1992 (Energy Act) set the stage for change in federal
  and   state  regulations  aimed  at  increasing  both  wholesale  and  retail
 competition  in  the  electric industry.  The Energy Act eased restrictions on
 independent power production  and  granted  authority  to FERC to mandate open
 access for the wholesale transmission of electricity.

 FERC has taken steps to provide a framework for increased  competition  in the
  electric  industry.   In March 1995 it issued a Notice of Proposed Rulemaking
 (NOPR) regarding non-discriminatory  open access transmission requirements for
 all public utilities.  The proposed rules  address  several  issues  including
  stranded  asset  recovery  and  open access transmission of electricity.   If
  adopted,  the  proposed  open access  transmission  requirements  would  give
 wholesale competitors access  to  PGE's  transmission facilities and, in turn,
 give PGE access to others' transmission facilities.  PGE filed  an open access
 transmission tariff with FERC but has not yet received an order.

 Since the passage of the Energy Act, various  state  utility  commissions have
  addressed  proposals which would gradually allow customers direct  access  to
 generation suppliers,  marketers,  brokers  and  other  service providers in a
 competitive marketplace for energy services.  Although presently  operating in
  a  cost-based regulated environment, PGE expects increasing competition  from
 other  forms  of energy and other suppliers of electricity.  While the Company
 is unable to determine the future impact of increased competition, it believes
 that ultimately it will result in reduced wholesale and retail prices.


 OREGON REGULATORY ENVIRONMENT
 The OPUC is approaching  the  issues  of  retail  competition  on an informal,
   utility-by-utility   basis,   rather   than   through  generic,  broad-based
  proceedings.   The OPUC has had a long-standing policy  of  allowing  special
 contracts for customers  that  have  competitive  options, and  many  of PGE's
  largest customers receive power under such contracts.  In addition, the  OPUC
 approved  an  innovative  rate schedule under which PGE is sharing some of the
 risks and rewards of a more competitive wholesale market with large industrial
 and commercial customers not  already  under  special  contract.   The OPUC is
  exploring  performance-based  ratemaking  in  a  rate case for another Oregon
  investor-owned utility and, with regard to PGE, has  expressed  interest  in
 receiving proposals for accelerated recovery of regulatory assets.

 Recent rate orders have substantially reduced the Company's regulatory risks,
  particularly  the   uncertainty  associated  with  the  recovery  of  various
 regulatory assets.  The  OPUC  approved  recovery  of  87%  of PGE's remaining
 investment in Trojan and full recovery of Trojan's decommissioning  costs (see
  Item  3, Legal  Proceedings, for discussion on legal challenges to the OPUC's
  authorization).   The   OPUC  also  approved  a   proposal  under  which  PGE
 simultaneously eliminated  certain regulatory assets and liabilities (see 
 Note 13, Regulatory Matters, for further discussion of 1995 rate orders).
 
 It remains to be determined  what  effect  future competitive factors may have
 on retail rates in Oregon and the Company's ability to fully recover remaining
 regulatory assets.

                                      30
<PAGE>

 CUSTOMER GROWTH AND ENERGY SALES
 The growth of PGE's retail customer  base  by  over  14,600  contributed to an
  average  2.8%  increase  in  weather-adjusted retail kWh sales.  The  Company
 continues to benefit from consistent growth in its residential customer class.
  During  1995,  the addition of  approximately  12,900  residential  customers
 resulted in a 1.2%  load  growth  for  this  customer class.  Over the past 10
  years increases in the number of residential customers  has  resulted  in  an
 average annual residential load growth of 1.2%.

 In 1995, industrial  customers  expanded  their  demand for energy by  4.9%,
  making  them  the most rapidly growing customer class within PGE's  service
 territory.  Above average growth in this class is expected to contribute to an
 overall retail load growth of approximately 4.6% in 1996.

 COMMODITY PRICE RISK MANAGEMENT
 The Company is exposed  to  market risk arising from the need to purchase fuel
 for its generating units (both  natural  gas  and  coal) as well as the direct
  purchase  and sale of wholesale electricity in support  of   its  retail  and
 wholesale markets.   PGE  operates without a power cost adjustment tariff, and
 therefore adjustments for power  costs  above  or below those used in existing
 general tariffs are not automatically reflected  in  retail  customers' rates.
 Through the formation of the trading floor, PGE has integrated  its  wholesale
 marketing, fuels, power operations and price risk management functions.   This
  has  led  to  a more efficient energy  production and procurement process, as
 well as an expansion of the Company's ability to offer its customers a variety
 of energy solutions  and  pricing.   This  expansion  of product offerings, in
  conjunction  with  the  development of a broader, more competitive  wholesale
 electricity market, means  the  Company  must actively manage its market price
 risk.

 The Company  uses  financial instruments,  such  as  commodity  futures,
 options, forwards and swaps, to hedge the price of natural gas and electricity
 and reduce the Company's exposure  to  market  fluctuations  in  the price 
 of natural gas and electricity.  In addition  to  hedging
  activities, Company policy has been expanded to allow for the use of 
  financial instruments for trading purposes in support of Company operations
although no trading of financial instruments was done during the year.  In 
1995, transactions consisted primarily of fixed for floating swap agreements 
where the Company receives or makes payments based on the differential between  
a specified price and the actual price of natural gas or electricity.  
Swap contracts
 generally require monthly cash settlements over the term of the  contract.
 The Company is exposed to credit risk in the event of non-performance  by  the
 counterparties and has established guidelines to mitigate that risk.

 POWER & FUEL SUPPLY
  PGE's base of hydro and thermal generating capacity provides the Company with
 the  flexibility needed to respond to  seasonal fluctuations in the demand for
 electricity  both  within  its Oregon service territory and from its wholesale
 customers.  PGE plans to generate  35% of its energy requirements during 1996,
 approximately the same level achieved during 1995.

 PGE maintains flexibility in fuel supply  contracts  to allow for the economic
 dispatch of PGE's thermal resources in conjunction with  hydro  operations and
  the  current market price of wholesale power.  The Company  benefits  from  a
 strategic  location  which  places  it  adjacent  to two competing natural gas
   pipelines  with  access  to  three  significant  producing   basins.    Firm
 transportation on both pipelines provides an  adequate supply of natural gas to
meet plant generating capacities.  In addition, the Company maintains a
  flexible  portfolio of physical supply which  relies  heavily  on  short-term
 agreements and spot-market purchases to fuel plant operations.

 During 1995  the Company relied on wholesale purchases to supply approximately
 64% of its energy needs, and PGE expects to purchase approximately 65% of its
 1996 load requirements.   PGE  has  long-term  power contracts with four hydro
  projects on the mid-Columbia River which provide  PGE  with  590  MW.   Early
 predictions  of  1996  water  conditions  indicate  they will be about normal;
 however, efforts to restore salmon 
 runs on the Columbia  and  Snake Rivers may affect the supply and price of 
 purchased power (see Restoration 
 
                                      31
<PAGE>

 of Salmon Runs 
 below).  Additional  factors that could affect purchased power include weather
 conditions in the Northwest  during  winter months and in the Southwest during
 summer months, as well as the performance  of  major  generating facilities in
 both regions.

  PGE  has  increasingly relied upon short-term purchases to  meet  its  energy
 needs.  The Company anticipates that an active wholesale market and surplus of 
 generating capacity
 within the WSCC (see  the  Power Supply discussion under Item 1, Business, for
 further information regarding  the  WSCC)  should provide sufficient wholesale
 energy available at competitive prices to supplement  Company  generation  and
 purchases under existing firm power contracts.

  RESTORATION  OF  SALMON  RUNS  -  Several  species  of Snake River salmon are
 protected as threatened under the Endangered Species Act  (ESA).   The federal
  government  has  taken  emergency  actions  that  have reduced the amount  of
 electricity generated at the Columbia and Snake River  dams  in  an attempt to
  save  the  endangered  fish.   In  January 1995 the National Marine Fisheries
 Service (NMFS) released a draft plan  calling  for  altering the management of
 federal dams and reservoirs in the Columbia River basin  in  order  to protect
  dwindling  salmon  stocks.   The  plan takes steps to boost river flows while
  young  salmon  are migrating and further  reduces  the  water  available  for
 generation.  The  release  of  the NMFS final plan is scheduled for early 1996
  and  is  expected to call for salmon protection measures similar to those
 adopted by  the  draft  plan.   NMFS is empowered by the ESA to require salmon
 protection measures by the U.S. Bureau  of Reclamation and the U.S. Army Corps
 of Engineers which operate the federal dams.

  The  Columbia River and its tributaries produce  nearly  two  thirds  of  the
 electricity  used  in  the  region.   PGE  purchases  power from many sources,
 including the mid-Columbia dams.  Reductions in the amount of water allowed to
 flow through the dams' turbines reduce generation and  increase  the cost of
 power  available  to  purchase  on a non-contract, or secondary, basis.   The
 attempt to improve fish passage by releasing more water from the reservoirs in
 the spring and summer could mean less  water  available in the fall and winter
 when the demand for electricity in the Pacific  Northwest is the highest and
 could lead to higher power costs.

 HYDRO RELICENSING 
 PGE HYDRO - PGE's hydroelectric plants are  some of the Company's most
 valuable resources supplying economical generation and flexible load following
  capabilities.  Company-owned hydro generation produced  2.4  million  MWh  of
 renewable  energy  in  1995, meeting  11%  of PGE's load.  PGE's hydroelectric
 plants, which operate under federal licenses,  will  be up for renewal between
  the  years  2001  and  2006.   The license for the 408-MW Pelton/Round  Butte
project - the Company's largest hydro resource - is the first up for renewal.  
PGE
  will file a notice of intent with FERC officially beginning  the  anticipated
 minimum five year relicensing process.   Should the relicensing process not be
 completed  prior  to  the  expiration of the original license, annual licenses
 will be issued, usually under the original  terms and conditions.

  The  relicensing process includes  the  involvement  of  numerous  interested
parties such as governmental agencies, public interest groups and communities,
 with  much  of the focus on environmental concerns.  PGE has already performed
 many pre-filing  activities  including  nearly  50  public  meetings with such
groups.  The cost of relicensing includes legal and filing fees as well as the
 cost  of  environmental  studies, possible fish passage measures and  wildlife
  habitat enhancements.  Relicensing  cost  may  be  a  significant  factor  in
 determining  whether  a  project remains cost-effective after a new license is
 obtained, especially for smaller  projects.  Although FERC has never denied an
 application or issued a license to  anyone  other than the incumbent licensee,
 this is no assurance that a new license will be granted.

MID-COLUMBIA HYDRO - PGE's long-term power purchase contracts with certain 
public utility districts in the state of Washington expire between 2005 and
2017.  Certain Idaho Electric Utility Co-operatives have initiated proceedings
with FERC seeking to change the allocation of generation from the Priest Rapids 
and Wanapum dams between electric utilities in the region upon expiration of
the current contracts.  FERC is expected to rule on the matter during 1996.
PGE will seek renewal of these contracts under terms and conditions similar to
the original.  However, an unfavorable FERC ruling could result in a reduction
of the amount of power from the two projects that PGE could acquire beyond the
expiration dates of the current contracts.  For further information regarding 
the power purchase contracts on the mid-Columbia dams, including Priest Rapids
and Wanapum, see Note 9, Commitments, in the Notes to Financial Statements.

                                      
                                      32
<PAGE>

NUCLEAR DECOMMISSIONING
 In January 1995 PGE submitted its Trojan decommissioning  plan  to the NRC and
  EFSC.   The plan, which estimates PGE's cost to decommission Trojan  at  $358
 million in  nominal  dollars  (actual  dollars  to  be  spent  in  each year),
 represents a site-specific decommissioning estimate performed for Trojan by an
 engineering firm experienced in decommissioning nuclear plants.  This estimate
  assumes  that  the  majority of decommissioning activities will occur between
 1997 and 2001, beginning  with  the  removal of certain large plant components
 while construction of a temporary dry  spent  fuel  storage facility is taking
 place.  The plan anticipates final site restoration activities  will  begin in
 2018 after PGE completes shipment of spent fuel to a USDOE facility (see  Note
  11,  Trojan Nuclear Plant, for further discussion of the decommissioning plan
 and other  Trojan  issues).   PGE  anticipates approval of its decommissioning
 plan during 1996 following the completion  of  a review process.  
 During 1995, PGE successfully   completed  the  removal  and
 burial  of  
 
                                      32
<PAGE>
 
 certain  of  Trojan's large components.  Meanwhile, the Company is
 pursuing the licensing and  planning issues in preparation for decommissioning
 activities to begin following plan approval.

 NEW ACCOUNTING STANDARDS
 SFAS No. 121, "Accounting for  the  Impairment  of Long-Lived Assets and Long-
  Lived  Assets to be Disposed Of", imposes a stricter  criterion  for  
  continuing to carry
 regulatory  assets, requiring that such assets be probable of recovery at each
 balance sheet  date.  As of December 31, 1995, all regulatory assets are being
 collected in rates charged to customers.

 The Company's accounting  policies  conform  to  generally accepted accounting
 principles and consider the effects of ratemaking  practices.  The Company has
  recorded  certain  regulatory  assets and is dependent  upon  the  regulatory
 process to ensure that future revenues  will  be  provided  to  recover  these
 costs.  In the event that  all or a portion of the Company's operations are no 
 longer subject to cost-
 based  regulation  (due  to  a  change  in  regulation  or  the  effects  of
competition), the Company could be required to recognize the impairment of and
 write down its long-lived assets to their fair value as well as   
 write off any remaining regulatory assets.

SFAS No. 123, "Accounting for Stock-Based Compensation", effective in 1996,
encourages companies to recognize compensation expense for the fair value of
stock-based compensation.  The Company has limited use of stock-based 
compensation and does not anticipate that the adoption of this standard will
have a material impact on the financial position or results of operations 
or cash flows of
the Company.  For further information on the Company's stock compensation 
plans see Note 4, Common and Preferred Stock, in the Notes to Financial
Statements.

 NONUTILITY
 BONNEVILLE PACIFIC  LITIGATION  -  Portland  General,  Holdings,  and  certain
 affiliated individuals, along with others, have been named as defendants  in a
  class  action  by  investors in Bonneville Pacific and in a suit filed by the
  bankruptcy  trustee  for  Bonneville  Pacific.   The  class  action  includes
 allegations of various  violations  of federal and Utah securities laws and of
 the Racketeer Influenced and Corrupt  Organizations  Act  (RICO).  The suit by
 the bankruptcy trustee for Bonneville Pacific alleges RICO violations and RICO
 conspiracy, collusive tort, civil conspiracy, common
law fraud, negligent misrepresentation, breach of fiduciary duty, liability as
 a partner for the debts of a partnership and other actionable wrongs.

 Holdings has filed a complaint seeking approximately $228 million  in  damages
  against  Deloitte  &  Touche  and  certain parties associated with Bonneville
 Pacific alleging that it relied on fraudulent  and  negligent  statements  and
  omissions  when  it  acquired  a 46% interest in and made loans to Bonneville
 Pacific.

 A detailed report released in June 1992 by a U.S. Bankruptcy examiner outlined
 a number of questionable transactions  that  resulted in gross exaggeration of
  Bonneville  Pacific's  assets  prior to Holdings'  investment.   This  report
 includes the examiner's opinion that  there  was significant mismanagement and
  very  likely  fraud at Bonneville Pacific.  For  additional  information  and
 further details,  see  Note  14,  Legal  Matters, in  the  Notes  to Financial
 Statements.


                                      33
<PAGE>

 Appendix (Electronic Filing Only)

 Omitted graphic material:

 Page 7 Retail Price v. Inflation graph comparing
 PGE retail price (cents per KWh) to Portland CPI:

                Retail Price        CPI

 1986           5.0                 108.2
 1987           4.93                110.9
 1988           4.77                114.7
 1989           4.69                120.3
 1990           4.57                127.4
 1991           4.69                134
 1992           4.79                139.9
 1993           4.86                144.7
 1994           4.97                148.9
 1995           5.16                153.2

 Page 12 January reserve margin for WSCC region
 available capability less peak load (megawatts & percent)

                Megawatts           Percent

 1992           34,689              35.2
 1993           22,997              21.7
 1994           31,033              31.0
 1995           31,018              28.8
 1996           32,076              29.3
 1997           30,578              27.4
 1998           31,970              28.1
 1999           31,883              27.6
 2000           30,943              26.3
 2001           29,039              24.3

 Page 13 1995 Actual Power Sources pie chart:
 (megawatt hours)

 Combustion Turbines:  11% (2,272,000)
 PGE Hydro:  11% (2,434,000)
 Coal:  14% (2,933,000)
 Purchased Power:  64% (13,948,000)

 Page 13 1996 Forecasted Power Sources pie chart:
 (megawatt hours)

 PGE Hydro:  10% (2,384,000)
 Coal:  12% (2,903,000)
 Combustion Turbines:  13% (3,236,000)
 Purchased Power:  65% (16,159,000)

Page 18 Map of PGE's Oregon service territory and location
of generating facilities.


 Page 26 Operating Revenue and Net Income (Loss) graph:
 ($ Millions):
                Operating           Net
                Revenue             Income

 1991           890                 (50)
 1992           883                 90
 1993           947                 89
 1994           959                 100
 1995           984                 81

 Page 26 PGE Electricity Sales graph:
 (Billions of kWh)

 1991           Residential         6.5
                Commercial          5.6
                Industrial          3.6
                Wholesale           3.9

 1992           Residential         6.3
                Commercial          5.8
                Industrial          3.6
                Wholesale           2.7

 1993           Residential         6.8
                Commercial          6.0
                Industrial          3.8
                Wholesale           1.6

 1994           Residential         6.7
                Commercial          6.2
                Industrial          3.9
                Wholesale           2.7

 1995           Residential         6.6
                Commercial          6.4
                Industrial          4.1
                Wholesale           3.3


 Page 26 Retail Revenues and Power Costs Graph:
 (excluding effect of RPA credit) (Mills/kWh)

                Net Variable        Retail
                Power               Revenues

 1991           10                  52
 1992           11                  53
 1993           17                  56
 1994           16                  53
 1995           14                  54

 Page 27  Operating Expenses graph:
 ($ Millions)

 1991       Operating Costs     361
            Variable Power      226
            Depreciation        112

 1992       Operating Costs     327
            Variable Power      222
            Depreciation         99

 1993       Operating Costs     283
            Variable Power      311
            Depreciation        122

 1994       Operating Costs     262
            Variable Power      347
            Depreciation        124

 1995       Operating Costs     271
            Variable Power      294
            Depreciation        134

 Page 29 Utility Capital Expenditures graph:
 ($ Millions)

 1991           150
 1992           159
 1993           149
 1994           243
 1995           232

 Page 31 Residential Customers graph:
 (Thousands)

 1985           461076
 1986           470136
 1987           476481
 1988           484293
 1989           496165
 1990           512913
 1991           526699
 1992           536111
 1993           545410
 1994           557338
 1995           570253


                   
                   MANAGEMENT'S STATEMENT OF RESPONSIBILITY

  Portland  General Corporation's management is responsible for the preparation
 and presentation  of  the  consolidated  financial  statements in this report.
  Management  is  also  responsible for the integrity and  objectivity  of  the
  statements.  Generally accepted  accounting  principles  have  been  used  to
 prepare the statements, and in certain cases informed estimates have been used
 that are based on the best judgment of management.

 Management  has  established,  and  maintains, a system of internal accounting
  controls.   The  controls  provide  reasonable   assurance  that  assets  are
  safeguarded,  transactions receive appropriate authorization,  and  financial
 records are reliable.   Accounting  controls are supported by written policies
 and procedures, an operations planning  and budget process designed to achieve
 corporate objectives, and internal audits of operating activities.

 Portland General's Board of Directors includes  an  Audit  Committee  composed
  entirely of outside directors.  It reviews with management, internal auditors
 and  independent  auditors  the  adequacy  of  internal  controls,  financial
 reporting, and other audit matters.

 Arthur Andersen LLP is Portland General's independent public accountant.  As a
  part  of its annual audit, selected internal accounting controls are reviewed
 in order  to  determine  the  nature,  timing  and extent of audit tests to be
 performed.  All of the corporation's financial records  and  related  data are
  made  available  to  Arthur Andersen LLP.  Management has also endeavored  to
  ensure  that all representations  to  Arthur  Andersen  LLP  were  valid  and
 appropriate.

 Joseph M. Hirko
 Senior Vice President,
 Chief Financial Officer

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

 To the Board of Directors and Shareholders of
     Portland General Corporation:

 We have audited  the  accompanying  consolidated  balance  sheets  of Portland
 General Corporation and subsidiaries as of December 31, 1995 and 1994, and the
  related  consolidated statements of income, retained earnings and cash  flows
 for each of  the  three  years  in  the period ended December 31, 1995.  These
 financial statements are the responsibility  of the Company's management.  Our
 responsibility is to express an opinion on these financial statements based on
 our audits.

  We  conducted  our  audits  in  accordance with generally  accepted  auditing
 standards.  Those standards require  that  we  plan  and  perform the audit to
 obtain reasonable assurance about whether the financial statements are free of
 material misstatement.  An audit includes examining, on a test basis, evidence
 supporting the amounts and disclosures in the financial statements.   An audit
  also  includes  assessing  the  accounting  principles  used  and significant
  estimates  made  by  management, as well as evaluating the overall  financial
 statement presentation.  We believe that our audits provide a reasonable basis
 for our opinion.

 In our opinion, the financial  statements referred to above present fairly, in
 all material respects, the financial  position of Portland General Corporation
 and subsidiaries as of December 31, 1995  and  1994,  and the results of their
  operations  and their cash flows for each of the three years  in  the  period
 ended December  31,  1995  in  conformity  with  generally accepted accounting
 principles.


                                                           Arthur Andersen LLP
 Portland, Oregon,
 January 24, 1996

                                      34
<PAGE>
                                  

 ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                           PORTLAND GENERAL CORPORATION AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
 FOR THE YEARS ENDED DECEMBER 31                                          1995              1994              1993
 <S>                                                                   <C>               <C>               <C>  

                                       (THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
 OPERATING REVENUES                                                    $   983,582       $   959,409       $   946,829
 OPERATING EXPENSES
    Purchased power and fuel                                               293,589           347,125           311,713
    Production and distribution                                             63,841            61,891            73,576
    Maintenance and repairs                                                 47,532            47,391            55,320
    Administrative and other                                               108,067           100,596           100,321
    Depreciation and amortization                                          134,423           124,081           122,218
    Taxes other than income taxes                                           51,490            52,151            55,730
                                                                           698,942           733,235           718,878
 OPERATING INCOME BEFORE INCOME TAXES                                      284,640           226,174           227,951
 INCOME TAXES                                                               89,064            71,878            69,770
 NET OPERATING INCOME                                                      195,576           154,296           158,181
 OTHER INCOME (DEDUCTIONS)
   Regulatory disallowances - net of income taxes of $25,542               (49,567)                -                 -
    Interest expense                                                       (79,128)          (71,653)          (70,802)
    Allowance for funds used during construction                            11,065             4,314               785
    Preferred dividend requirement - PGE                                    (9,644)          (10,800)          (12,046)
    Other - net of income taxes                                             12,734            16,901            13,000
 INCOME FROM CONTINUING OPERATIONS                                          81,036            93,058            89,118
 DISCONTINUED OPERATIONS
    Gain on disposal of real estate operations -
     net of income taxes of $4,226                                               -             6,472                 -
 NET INCOME                                                            $    81,036       $    99,530       $    89,118
 COMMON STOCK
    Average shares outstanding                                          50,766,916        49,896,685        47,392,185
    Earnings per average share
      Continuing operations                                                  $1.60             $1.86             $1.88
      Discontinued operations                                                    -              0.13                 -
    Earnings per average share                                               $1.60             $1.99             $1.88
    Dividends declared per share                                             $1.20             $1.20             $1.20

                                           PORTLAND GENERAL CORPORATION AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
 FOR THE YEARS ENDED DECEMBER 31                                          1995              1994              1993
                                                                                           (THOUSANDS OF DOLLARS)
 BALANCE AT BEGINNING OF YEAR                                          $   118,676       $    81,159       $    50,481
 NET INCOME                                                                 81,036            99,530            89,118
 ESOP TAX BENEFIT AND OTHER                                                 (2,872)           (1,705)           (1,524)
                                                                           196,840           178,984           138,075
 DIVIDENDS DECLARED ON COMMON STOCK                                         60,955            60,308            56,916
 BALANCE AT END OF YEAR                                                $   135,885       $   118,676       $    81,159
 The accompanying notes are an integral part of these consolidated statements.
</TABLE>

                                      35    
<PAGE>

                 PORTLAND GENERAL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
 AT DECEMBER 31                                                                               1995                1994
 <S>                                                                                    <C>                 <C>
                                                                                               (THOUSANDS OF DOLLARS)
                                                          ASSETS
 ELECTRIC UTILITY PLANT - ORIGINAL COST
    Utility plant (includes Construction Work
      in Progress of $33,382 and $148,267)                                              $  2,754,280        $  2,563,476
    Accumulated depreciation                                                              (1,040,014)           (958,465)
                                                                                           1,714,266           1,605,011
    Capital leases - less amortization of $27,966 and $25,796                                  9,353              11,523
                                                                                           1,723,619           1,616,534
 OTHER PROPERTY AND INVESTMENTS
    Leveraged leases                                                                         152,666             153,332
    Trojan decommissioning trust, at market value                                             68,774              58,485
    Corporate owned life insurance less loans of $26,432  and $21,731                         74,574              65,687
    Other investments                                                                         28,603              40,188
                                                                                             324,617             317,692
 CURRENT ASSETS
    Cash and cash equivalents                                                                 11,919              17,542
    Accounts and notes receivable                                                            104,815              91,418
    Unbilled and accrued revenues                                                             64,516             162,151
    Inventories, at average cost                                                              38,338              31,149
    Prepayments and other                                                                     16,953              34,455
                                                                                             236,541             336,715
 DEFERRED CHARGES
  Unamortized regulatory assets
    Trojan investment                                                                        301,023             402,713
    Trojan  decommissioning                                                                  311,403             338,718
    Income taxes recoverable                                                                 217,366             217,967
    Debt reacquisition costs                                                                  29,576              32,245
    Energy efficiency programs                                                                77,945              58,894
    Other                                                                                     27,611              47,787
  WNP-3 settlement exchange agreement                                                        168,399             173,308
  Miscellaneous                                                                               29,917              16,698
                                                                                           1,163,240           1,288,330
                                                                                        $  3,448,017        $  3,559,271
                                              CAPITALIZATION  AND LIABILITIES
 CAPITALIZATION
    Common stock equity
      Common stock, $3.75 par value per share 100,000,000 shares authorized,
      51,013,549 and 50,495,492 shares outstanding                                      $    191,301        $    189,358
      Other paid-in capital - net                                                            574,468             563,915
    Unearned compensation                                                                     (8,506)            (13,636)
    Retained earnings                                                                        135,885             118,676
                                                                                             893,148             858,313
    Cumulative preferred stock of subsidiary
      Subject to mandatory redemption                                                         40,000              50,000
      Not subject to mandatory redemption                                                          -              69,704
    Long-term debt                                                                           890,556             835,814
                                                                                           1,823,704           1,813,831
 CURRENT LIABILITIES
    Long-term debt and preferred stock due within one year                                   105,114              81,506
    Short-term borrowings                                                                    170,248             148,598
    Accounts payable and other accruals                                                      133,405             104,254
    Accrued interest                                                                          16,247              19,915
    Dividends payable                                                                         16,668              18,109
    Accrued taxes                                                                             15,151              27,778
                                                                                             456,833             400,160
 OTHER
    Deferred income taxes                                                                    652,846             687,670
    Deferred investment tax credits                                                           51,211              56,760
    Deferred gain on sale of assets                                                                -             118,939
    Trojan decommissioning and transition obligation                                         379,179             396,873
    Miscellaneous                                                                             84,244              85,038
                                                                                           1,167,480           1,345,280
                                                                                        $  3,448,017        $  3,559,271
 The accompanying notes are an integral part of these consolidated balance sheets.
</TABLE>

                                      36
<PAGE>

                 PORTLAND GENERAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
 FOR THE YEARS ENDED DECEMBER 31                                     1995            1994           1993
 <S>                                                            <C>             <C>            <C>
                                                                                (THOUSANDS OF DOLLARS)
 CASH PROVIDED (USED) BY -
 OPERATIONS:
   Net income                                                   $   81,036      $   99,530     $   89,118
   Adjustment to reconcile net income to net cash
    provided by operations:
      Depreciation and amortization                                102,266          94,217         89,749
      Amortization of WNP-3 exchange agreement                       4,910           4,695          4,489
      Amortization of Trojan investment                             24,884          26,738         26,329
      Amortization of Trojan decommissioning                        13,336          11,220         11,220
      Amortization of deferred charges - other                      (1,777)          2,712          6,713
      Deferred income taxes - net                                   (9,555)         37,396         61,086
      Other noncash revenues                                        (5,037)         (2,570)        (1,926)
      Regulatory Disallowances                                      49,567               -              -
   Changes in working capital:
      (Increase) Decrease in receivables                           (14,687)        (22,952)       (74,123)
      (Increase) Decrease in inventories                            (7,189)          3,264         15,017
      Increase (Decrease) in payables                               22,122          (5,105)       (29,837)
      Other working capital items - net                              1,957         (18,104)        13,759
   Trojan decommissioning expenditures                             (10,927)         (3,360)        (1,625)
   Deferred charges - other                                         (9,472)         13,987         (3,331)
   Miscellaneous - net                                              15,108           5,897         17,728
                                                                   256,542         247,565        224,366
 INVESTING ACTIVITIES:
   Utility construction - new resources                            (49,096)        (87,537)       (28,666)
   Utility construction - other                                   (158,198)       (131,675)      (101,692)
   Energy efficiency programs                                      (25,013)        (23,745)       (18,149)
   Rentals received from leveraged leases                           21,204          20,886         15,530
   Nuclear decommissioning trust deposits                          (16,598)        (11,220)       (11,220)
   Nuclear decommissioning trust withdrawals                        13,521               -              -
   Discontinued operations                                               -          26,288          2,600
   Other                                                           (1,465)        (14,058)       (10,763)
                                                                  (215,645)       (221,061)      (152,360)
 FINANCING ACTIVITIES:
   Short-term borrowings - net                                      21,650         (10,816)        18,736
   Borrowings from Corporate Owned Life Insurance                    4,679          21,731              -
   Long-term debt issued                                           147,138          74,631        249,782
   Long-term debt retired                                          (69,445)        (49,882)      (279,986)
   Repayment of nonrecourse borrowings for
     leveraged leases                                              (18,741)        (18,046)       (13,095)
   Preferred stock retired                                         (79,704)        (20,000)        (3,600)
   Common stock issued                                              10,299          50,074          9,520
   Dividends paid                                                  (62,396)        (59,856)       (56,850)
                                                                   (46,520)        (12,164)       (75,493)
 INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                                                 (5,623)         14,340         (3,487)
 CASH AND CASH EQUIVALENTS AT THE BEGINNING
   OF YEAR                                                          17,542           3,202          6,689
 CASH AND CASH EQUIVALENTS AT THE END
   OF YEAR                                                      $   11,919      $   17,542      $   3,202
 Supplemental disclosures of cash flow information
   Cash paid during the year:
     Interest, net of amounts capitalized                       $   66,584       $  60,852      $  73,476
     Income taxes                                                   86,778          31,539         12,259
 The accompanying notes are an integral part of these
 consolidated statements.
</TABLE>


                                      37
<PAGE>


 PORTLAND GENERAL CORPORATION AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS

NATURE OF OPERATIONS
Portland General Corporation is an electric utility  holding company.  PGE, an
electric   utility  company  and  Portland  General's  principal   operating
subsidiary, accounts  for  substantially  all  of  Portland  General's assets,
 revenues and net income.

  PGE  is engaged in the generation, purchase, transmission, distribution,  and
 sale of  electricity  in  the  State  of  Oregon.   PGE  also  sells energy to
  wholesale  customers,  predominately utilities throughout the western  United
  States.  PGE's Oregon service  area  is  3,170  square  miles,  including  54
 incorporated  cities, of  which  Portland  and Salem are the largest, within a
 state-approved service area allocation of 4,070  square  miles.  At the end of
 1995 PGE's service area population was approximately 1.4 million, constituting
 approximately 44% of the state's population.  At December 31, 1995, PGE served
 approximately 650,000 customers.

 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 CONSOLIDATION PRINCIPLES
 The consolidated financial statements include the accounts of Portland General
 and all of its majority-owned subsidiaries.  Significant intercompany balances
 and transactions have been eliminated.

 BASIS OF ACCOUNTING
  Portland  General  and  its  subsidiaries'  financial statements  conform  to
  generally  accepted  accounting principles.  In  addition,  PGE's  accounting
 policies are in accordance  with the requirements and the ratemaking practices
 of regulatory authorities having jurisdiction.

 USE OF ESTIMATES
 The preparation of financial statements requires management to make estimates
 and assumptions that affect the reported amounts of assets and liabilities 
 at the date of the financial
  statements  and the reported amounts of  revenues  and  expenses  during  the
 reporting period.  Actual results could differ from those estimates.

 RECLASSIFICATIONS
  Certain amounts  in  prior  years  have  been  reclassified  for  comparative
 purposes.

 REVENUES
 PGE  accrues  estimated unbilled revenues for services provided from the meter
 read date to month-end.

 PURCHASED POWER
 PGE credits purchased  power  costs  for  the  net amount of benefits received
  through  a  power purchase and sale contract with  the  BPA.   Reductions  in
 purchased power  costs  that  result from this exchange are passed directly to
 PGE's residential and small farm customers in the form of lower prices.

 DEPRECIATION
 PGE's depreciation is computed  on  the  straight-line  method  based  on  the
  estimated  average  service lives of the various classes of plant in service.
 Depreciation expense as  a percent of the related average depreciable plant in
 service was approximately 4.0% in 1995, 3.8% in 1994 and 3.9% in 1993.

 The cost of renewal and replacement of property units is charged to plant, and
 repairs and maintenance are  charged  to  expense  as  incurred.   The cost of
  utility  property  units  retired, other than land, is charged to accumulated
 depreciation.

 ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION (AFDC)
  AFDC represents the pretax cost  of  borrowed  funds  used  for  construction
 purposes  and a reasonable rate for equity funds.  AFDC is capitalized as part
 of the cost  of plant and is credited to income but does not represent current
 cash earnings.   The  average  rates  used by PGE were 7.16%, 4.65%, and 3.52%
 for the years 1995, 1994 and 1993, respectively.


                                      38 
<PAGE>


 INCOME TAXES
 Portland General files a consolidated federal  income  tax  return.   Portland
  General's  policy  is  to  collect for tax liabilities from subsidiaries that
  generate  taxable  income and to  reimburse  subsidiaries  for  tax  benefits
  utilized  in  its tax return.   Deferred  income  taxes  are
 provided for temporary differences between financial and income tax reporting.
 Amounts  recorded  for Investment Tax Credits (ITC) have been deferred and are
  being  amortized  to  income  over  the  approximate  lives  of  the  related
 properties, not to exceed  25  years.   See  Notes 3 and 3A, Income Taxes, for
 more details.

 INVESTMENT IN LEASES
 CWL, a subsidiary of Holdings, acquires and leases  capital equipment.  Leases
  that qualify as direct financing leases and are substantially  financed  with
 nonrecourse  debt  at  lease  inception are accounted for as leveraged leases.
 Recorded investment in leases is  the  sum of the net contracts receivable and
 the estimated residual value, less unearned income and deferred ITC.  Unearned
 income and deferred ITC are amortized to income over the life of the leases to
 provide a level rate of return on net equity invested.

 The components of CWL's net investment in  leases  as of December 31, 1995 and
 1994, are as follows (thousands of dollars):

<TABLE>
<CAPTION>
                                           1995                 1994
 <S>                                     <C>                  <C>
 Lease contracts receivable              $508,190             $550,620
 Nonrecourse debt service                (389,619)            (434,542)
    Net contracts receivable              118,571              116,078
 Estimated residual value                  84,610               86,202
 Less - Unearned income                   (41,134)             (39,391)
    Investment in leveraged leases        162,047              162,889
 Less - Deferred ITC                       (9,381)              (9,557)
    Investment in leases, net            $152,666             $153,332
</TABLE>


 CASH AND CASH EQUIVALENTS
 Highly liquid investments with original maturities of three months or less are
 classified as cash equivalents.

 DERIVATIVE FINANCIAL INSTRUMENTS
 PGE uses financial instruments such as commodity futures, options, forwards
 and swaps to hedge against exposures to interest rate, foreign currency and
 commodity price risks.  The objective of PGE's hedging program is to mitigate
 risks due to market fluctuations associated with external financings or the
 purchase of natural gas, electricity and related products.  Gains and losses
 from derivatives that reduce commodity price risks are recognized as fuel or
 purchased power expense.  Gains and losses on financial instruments that 
 reduce interest rate risk of future debt issuances are deferred and amortized 
 over  the life of the related debt as an adjustment to interest expense.

 Company policy also allows the use of the financial instruments, noted above,
 for trading purposes.  Gains or losses on financial instruments that are used 
 for trading purposes, or otherwise do not qualify for hedge accounting, are
 recognized in income on a current basis (see Note 7, Other Financial
 Instruments, for further information).

 WNP-3 SETTLEMENT EXCHANGE AGREEMENT
 The WNP-3 Settlement Exchange Agreement, which has been excluded from PGE's
 rate base, is carried at present value and amortized on a constant return
 basis.

                                      39   
<PAGE>

 REGULATORY ASSEETS AND LIABILITIES
 The Company is subject to the provisions of Statement of Financial Accounting
 Standards 
 No. 71, "Accounting for the Effects of Certain Types of Regulation" (SFAS
 No. 71).  When the requirements of SFAS No. 71 are met, PGE defers, or accrues
 revenue for, certain costs which would otherwise be charged to expense, if 
 it is probable that future rates will permit recovery of such costs 
 (regulatory assets).  In addition PGE defers, or accrues a liability for, 
 certain revenues, gains or cost reductions which would otherwise be reflected
 in income but through the ratemaking process ultimately will be credited to
 customers (regulatory liabilities).  These regulatory assets and liabilities
 are reflected as deferred charges, accrued revenues and other liabilities
 in the financial statements and are amortized over the period in which they
 are included in billings to customers.

 Regulatory assets and liabilities reflected in the Consolidated Balance
 Sheets of December 31 relate to the following:

                                                   1995           1994

     Regulatory Assets
      Power cost deferrals                       $      -     $   96,216
      Trojan-related assets                       612,426        741,431
      Income taxes recoverable                    217,366        217,967
      Debt reacquisition and other                 57,187         80,032
      Energy efficiency programs                   77,945         58,894
                Total Regulatory Assets          $964,924     $1,194,540

     Regulatory Liabilities
      Deferred gain on sale of assets            $      -     $  118,939
      Miscellaneous                                11,801         19,114
                Total Regulatory Liabilities     $ 11,801     $  138,053

As of December 31, 1995, all of the Company's regulatory assets and liabilities
are being reflected in rates charged to customers over periods ranging from
approximately 3 to 28 years.  Based on rates in place at year-end 1995, the
Company estimates that it will collect the majority of its regulatory assets
within the next 10 years and substantially all of its regulatory assets
within the next 20 years.  During 1995 the Company wrote down and offset
certain regulatory assets and liabilities in conjunction with regulatory
actions taken by the OPUC.  For further discussion of the write-down and
elimination of certain regulatory assets in 1995 see Note 13, Regulatory
Matters.


 NOTE 2 - EMPLOYEE BENEFITS

 PENSION PLAN
  Portland  General  has  a  non-contributory defined pension plan (the Plan)  
  covering
 substantially all of its employees.   Benefits  under  the  Plan  are based on
  years  of  service,  final  average  pay  and covered compensation.  Portland
 General's policy is to contribute annually to  the  Plan  at least the minimum
 required under the Employee Retirement Income Security Act  of  1974  but  not
  more  than the maximum amount deductible for income tax purposes.  The Plan's
 assets are  held  in  a  trust  and consist primarily of investments in common
 stocks, corporate bonds and U.S. government issues.

 Portland General determines net periodic  pension  expense  according  to  the
  principles of SFAS No. 87, "Employers' Accounting for Pensions".  Differences
 between  the  actual  and  expected  return on Plan assets are included in net
 amortization and deferral and are considered  in  the  determination of future
 pension expense.  
 

                                      40
<PAGE>
 
 
 The following table sets forth the Plan's  funded status and
  amounts recognized in Portland General's financial statements  (thousands  of
 dollars):


<TABLE>
<CAPTION>
                                                         1995                    1994
 <S>                                                    <C>                     <C>
 Actuarial present value of benefit obligations:
    Accumulated benefit obligation, including
      vested benefits of $174,694 and $142,082          $187,977                $154,320
    Effect of projected future compensation levels        34,345                  35,134
    Projected benefit obligation (PBO)                   222,322                 189,454
 Plan assets at fair value                               295,516                 245,225
 Plan assets in excess of PBO                             73,194                  55,771
 Unrecognized net experience gain                        (71,691)                (54,391)
 Unrecognized prior service costs amortized
    over 13- to 16-year periods                           13,180                  12,935
 Unrecognized net transition asset being
    recognized over 18 years                             (17,618)                (19,575)
 Pension liability                                      $ (2,935)               $ (5,260)
</TABLE>


<TABLE>
<CAPTION>
                                                            1995              1994              1993
 <S>                                                        <C>               <C>               <C>
 ASSUMPTIONS:
    Discount rate used to calculate PBO                     7.00%             8.50%             7.25%
    Rate of increase in future compensation levels          5.00              6.50              5.25
    Long-term rate of return on assets                      8.50              8.50              8.50
</TABLE>


 

<TABLE>
<CAPTION>
                                                   
 <S>                                             <C>               <C>               <C>
 COMPONENTS OF NET PERIODIC PENSION
 EXPENSE (THOUSANDS OF DOLLARS):
 Service cost                                    $  5,500          $  6,199          $   6,151
 Interest cost on PBO                              15,722            14,693             14,241
 Actual return on plan assets                     (61,377)            6,011            (48,231)
 Net amortization and deferral                     37,830           (25,971)            29,839
 Net periodic pension expense/(benefit)          $ (2,325)         $    932          $   2,000
</TABLE>


 OTHER POST-RETIREMENT BENEFIT PLANS
 Portland General accrues  for  health, medical and life insurance costs during
the employees' service years, in accordance with SFAS No. 106.  PGE receives 
recovery for the
  annual provision in customer rates.  Employees are covered  under  a  Defined
 Dollar  Medical  Benefit  Plan  which  limits Portland General's obligation by
 establishing a maximum contribution per  employee.   The  accumulated  benefit
   obligation  for  post-retirement  health  and  life  insurance  benefits at
 December 31, 1995  was $30 million, for which there were $28 million
 of assets held in trust.  The benefit obligation for post-retirement health 
 and life insurance benefits at December 31, 1994 was $27 million.

 Portland General also  provides senior officers with additional benefits under
 an unfunded Supplemental  Executive Retirement Plan (SERP).  Projected benefit
 obligations for the SERP are $15 million at December 31, 1995 and 1994.

 DEFERRED COMPENSATION
 Portland General provides certain  employees  with  benefits under an unfunded
 Management Deferred Compensation Plan (MDCP).  Obligations  for  the  MDCP are
 $25 million and $21 million at December 31, 1995 and 1994, respectively.

EMPLOYEE STOCK OWNERSHIP PLAN
  Portland General has an Employee Stock Ownership Plan (ESOP) which is a  part
 of  its  401(k)  retirement  savings plan.  Employee contributions up to 6% of
 base pay are matched by employer  contributions  in  the  form  of ESOP common
 stock.  Shares of common stock to be used to match contributions by PGE
 employees were purchased from a $36 million loan from PGE to the ESOP trust in
  late  1990.   This loan is presented in the common equity section as unearned
 compensation.  Cash contributions from PGE and dividends on shares held in the
 trust are used to pay the debt service on PGE's loan.  As the loan is retired,
  an  equivalent  amount   of   stock   is   allocated  to  employee  accounts.
 Contributions to the ESOP of $4 million for 1995 and $5 million for each of 
 1994 and 1993 combined  with  dividends on unallocated shares of $1 million 
 for each of 1995 and 1994 and 
 
 
                                      41
<PAGE>

 $2 million for 1993 were used to pay principal  and
 interest on PGE's loan.  Shares of common stock used to match contributions by
  employees  of Portland General and its subsidiaries are purchased on the open
 market.


 NOTE 3 - INCOME TAXES

 The following  table shows the detail of taxes on income and the items used in
 computing the differences  between  the  statutory federal income tax rate and
 Portland General's effective tax rate.  NOTE:   The  table  does  not  include
  income  taxes  related  to  1994 gains on discontinued real estate operations
 (thousands of dollars):

<TABLE>
<CAPTION>
                                            1995            1994            1993
 <S>                                      <C>             <C>             <C>
 Income Tax Expense:
   Currently payable
      Federal                             $ 77,845        $ 41,833        $  7,874
      State                                  9,230           7,072          (4,885)
                                            87,075          48,905           2,989
   Deferred income taxes
       Federal                             (15,359)         22,269          63,534
       State                                (6,741)          4,472           9,355
                                           (22,100)         26,741          72,889
   Investment tax credit adjustments        (5,725)         (4,145)         (4,356)
                                          $ 59,250        $ 71,501        $ 71,522
 Provision Allocated to:
   Operations                             $ 89,064        $ 71,878        $ 69,770
   Other income and deductions             (29,814)           (377)          1,752
                                          $ 59,250        $ 71,501        $ 71,522
 Effective Tax Rate Computation:
   Computed tax based on
    statutory federal income
    tax rates applied to
    income before income taxes            $ 49,101        $ 57,596        $ 56,224

   Increases (Decreases) resulting from:
    Flow through depreciation                6,715           8,283          10,748
    Regulatory disallowance                  3,470               -               -
    State and local taxes - net              4,857           8,953           3,288
    State of Oregon refund                  (3,668)              -               -
    Investment tax credits                  (5,725)         (4,145)         (4,356)
    Excess deferred taxes                     (700)           (767)         (3,419)
    USDOE nuclear fuel assessment                -               -           5,075
    Preferred dividend requirement           3,155           3,526           3,935
    Other                                    2,045          (1,945)             27
                                          $ 59,250        $ 71,501        $ 71,522
    Effective tax rate                       42.2%           43.5%           44.5%
</TABLE>

                                      42
<PAGE>

 

 As of December 31, 1995 and 1994,  the significant components of the Company's
 deferred income tax assets and liabilities  were  as  follows   (thousands  of
 dollars):

<TABLE>
<CAPTION>
                                        1995               1994
 <S>                                 <C>                <C>
 DEFERRED TAX ASSETS
 Plant-in-service                    $  86,721          $  72,012
 Deferred gain on sale of assets             -             47,134
 Other                                  60,245             51,924
                                       146,966            171,070
 DEFERRED TAX LIABILITIES
 Plant-in-service                     (448,049)          (444,546)
 Energy efficiency programs            (30,314)           (23,024)
 Trojan abandonment                    (54,335)           (80,944)
 WNP-3 exchange contract               (60,489)           (68,698)
 Replacement power costs                     -            (38,136)
 Leasing                              (142,606)          (146,468)
 Other                                 (43,470)           (40,829)
                                      (779,263)          (842,645)
 Less current deferred taxes              (414)             4,040
 Less valuation allowance              (20,135)           (20,135)
 Total                               $(652,846)         $(687,670)
</TABLE>

 Portland General has recorded deferred
 tax assets and liabilities for all temporary differences between the financial
 statement and tax bases of assets and liabilities.  Valuation allowances 
 represent capital loss carryforwards that presently
 cannot be offset with capital gains.

 Portland General reached a settlement with the IRS on all issues regarding
 the 1985-1990 tax returns, including PGE's WNP-3 abandonment loss
 deduction.  During 1996, Portland General will be filing amended state 
 returns to reflect
 appropriate audit adjustments.  The settlement did not have a material 
 adverse impact on the results of current operations or cash flows of 
 Portland General.

                                      43
<PAGE>



 NOTE 4 - COMMON AND PREFERRED STOCK


 COMMON AND PREFERRED STOCK
                                                    
<TABLE>
<CAPTION>
                                                    CUMULATIVE PREFERRED
                              COMMON STOCK              OF SUBSIDIARY       Other
                           Number    $3.75 Par       Number    $100 Par     No-Par    Paid-in      Unearned
                         OF SHARES     VALUE       OF SHARES     VALUE      VALUE     CAPITAL    COMPENSATION*
<S>                     <C>           <C>         <C>          <C>         <C>       <C>         <C>
(thousands of dollars
 except share amounts)


December 31, 1992       47,099,701    $176,624    1,533,040    $123,304    $30,000   $509,802     $(23,478)
Sales of stock             534,952       2,006            -           -          -      8,802            -
Redemption of stock              -           -      (36,000)     (3,600)         -      2,130            -
Repayment of ESOP loan
 and other                       -           -            -           -          -     (1,676)       4,327

December 31, 1993       47,634,653     178,630    1,497,040     119,704     30,000    519,058      (19,151)
Sales of stock           2,864,839      10,743            -           -          -     40,390            -
Redemption of stock         (4,000)        (15)    (200,000)    (20,000)         -      2,055            -
Repayment of ESOP loan
 and other                       -           -            -           -          -      2,412        5,515

December 31, 1994       50,495,492     189,358    1,297,040      99,704     30,000    563,915      (13,636)
Sales of stock             539,057       2,022            -           -          -      9,355            -
Redemption of stock        (21,000)        (79)    (797,040)    (79,704)         -      2,778            -
Repayment of ESOP loan
 and other                       -           -            -           -          -     (1,580)       5,130
December 31, 1995       51,013,549    $191,301      500,000    $ 20,000    $30,000   $574,468     $ (8,506)

</TABLE>
 
 *See the discussion of stock compensation  plans  below  and  Note 2, Employee
 Benefits, for a description of the ESOP.


 COMMON STOCK
  As of December 31, 1995, Portland General had reserved 2,493,351  and  17,533
 authorized  but  unissued  common  shares  for  issuance  under  its  dividend
 reinvestment plan and employee stock purchase plan, respectively.


 CUMULATIVE PREFERRED STOCK
 The 7.75% series preferred stock has an annual sinking fund requirement  which
  requires the redemption of 15,000 shares at $100 per share beginning in 2002.
 At  its option, PGE may redeem, through the sinking fund, an additional 15,000
 shares  each  year.  All  remaining  shares  shall  be mandatorily redeemed by
  sinking  fund in 2007. This series is only redeemable  by  operation  of  the
 sinking fund.

 The 8.10% series  preferred stock has an annual sinking fund requirement which
 requires the redemption  of  100,000 shares at $100 per share.  At its option,
 PGE may redeem, through the sinking  fund,  an  additional 100,000 shares each
 year.  This series is redeemable at the option of  PGE at $101 per share up to
 April 14, 1996 and at reduced amounts thereafter.

                                      44
<PAGE>

 

<TABLE>
<CAPTION>
 PGE's cumulative preferred stock consisted of:
 <S>                                               <C>                  <C>
 At December 31,                                     1995                 1994
                                                        (thousands of dollars)
 Subject to mandatory redemption
 No par value 30,000,000 shares authorized
    7.75% Series 300,000 shares outstanding        $30,000              $30,000
 $100 par value, 2,500,000 shares authorized
    8.10% Series 200,000 and 300,000 shares         20,000               30,000
 outstanding
         Current sinking fund                      (10,000)             (10,000)
                                                    40,000               50,000
 Not subject to mandatory redemption, $100 par
 value
    7.95% Series, 298,045 shares outstanding             -               29,804
    7.88% Series, 199,575 shares outstanding             -               19,958
    8.20% Series, 199,420 shares outstanding             -               19,942
                                                         -               69,704
                                                  
                                                   $40,000             $119,704
</TABLE>

 No dividends may be paid on common stock or any class  of stock over which the
  preferred  stock  has priority unless all amounts required  to  be  paid  for
 dividends and sinking fund payments have been paid or set aside, respectively.

 COMMON DIVIDEND RESTRICTION OF SUBSIDIARY
 PGE is restricted from  paying  dividends  or  making  other  distributions to
  Portland  General without prior OPUC approval to the extent such  payment  or
 distribution  would  reduce PGE's common stock equity capital below 36% of its
 total capitalization.  At December 31, 1995, PGE's common stock equity capital
 was 48% of its total capitalization.

 STOCK COMPENSATION PLANS
 Portland General has a plan under which 2.3 million shares of Portland General
 common stock are authorized   for  stock-based  incentives  including  a stock
  option  plan and restricted common shares.  At December 31, 1995, 1.2 million
 common shares  were  available for issuance under the plan.  Upon termination,
 expiration or lapse of  certain  types of awards, any shares remaining subject
 to the award are again available for  grant under the plan.  Stock option plan
 activity is as follows:

<TABLE>
<CAPTION>
 
 <S>                              <C>                <C>
                                                      Option Price
                                   Options              Per Share
 December 31, 1992                 838,750           $14-$19
    Granted                         65,300           $17.125-$22.25
    Canceled                       (47,250)          $14-$19
 December 31, 1993                 856,800           $14-$22.25
    Granted                         32,000           $13-$18.125
    Exercised                      (10,000)          $15.75
    Canceled                       (43,500)          $14-$22.25
 December 31, 1994                 835,300           $13-$22.25
    Granted                         88,600           $17-$25
    Exercised                     (114,400)          $14.75-$18.125
    Canceled                       (17,000)          $14-$20
 December 31, 1995                 792,500           $13-$25
 Stock options exercisable
   at December 31, 1995            362,600           $13-$15.75

</TABLE>

  During  1995, Portland General issued 18,839  (net  of  cancellations)
 restricted  common  shares  to  officers and selected employees of
 Portland General and PGE.  As of December  31, 1995, 139,721 restricted
  common  shares  under  the  plan  were outstanding  for  officers  and
 employees.

                                      45

<PAGE>
 
 NOTE 5 - SHORT-TERM BORROWINGS

 At December 31, 1995, Portland General  had  total  committed  lines of
  credit  of $215 million.  Portland General has a $15 million committed
 facility expiring  in  July 1996.  PGE has a committed facility of $200
 million expiring in July  2000.  These lines of credit have annual fees
 of 0.10% and do not require compensating cash balances.  The facilities
 are used primarily as backup for both  commercial  paper and borrowings
   from  commercial  banks  under  uncommitted  lines  of  credit.    At
 December  31,  1995,  there  were  no  outstanding borrowings under the
 committed facilities.

  PGE  has a $200 million commercial paper  facility.  Unused  committed
 lines of  credit  must  be  at  least  equal  to  the  amount  of PGE's
  commercial  paper  outstanding.   Commercial paper and lines of credit
 borrowings are at rates reflecting current market conditions.

 Short-term borrowings  and  related  interest  rates  were  as  follows:
 

<TABLE>
<CAPTION>
                                                     1995          1994          1993
                                                           (thousands of dollars)
 <S>                                               <C>           <C>           <C>
 AS OF YEAR-END:
    Aggregate short-term debt outstanding
      Commercial paper                             $170,248      $148,598      $159,414
    Weighted average interest rate*
      Commercial paper                                 6.1%          6.2%          3.5%
     Unused committed lines of credit              $215,000      $215,000      $240,000
 FOR THE YEAR ENDED:
     Average daily amounts of short-term
     debt outstanding
      Bank loans                                   $    206      $  1,273      $ 10,949
      Commercial paper                              111,366       138,718       123,032
     Weighted daily average interest rate*
      Bank loans                                       6.5%          4.3%          3.6%
      Commercial paper                                 6.3           4.5           3.5
     Maximum amount outstanding
      during the year                              $170,248      $174,082      $171,208

</TABLE>

      * Interest  rates  exclude the effect of commitment fees, facility
        fees and other financing fees.

                                      46 
<PAGE>

NOTE 6 - LONG-TERM DEBT

 The Indenture securing PGE's  First Mortgage Bonds constitutes a direct
  first  mortgage  lien  on  substantially   all  utility  property  and
 franchises, other than expressly excepted property.

  In  1995,  PGE  issued  $75  million  in  8.25 Junior  Subordinated
 Deferrable Interest Debentures, listed below, which pay interest  quarterly 
 and are traded on the NYSE.  PGE may redeem the debentures at its  option
 beginning on October 1, 2000 at a redemption price equal to 100% of the
 principal amount plus any accrued interest.

 
<TABLE>
<CAPTION>
 <S>                                                           <C>                <C>
 Schedule of long-term debt at December 31,                      1995                        1994
                                                                        (thousands of dollars)
 First Mortgage Bonds
    Maturing 1995 through 2000
       4.70% Series due March 1, 1995                                                        $3,045
       5.875% Series due June 1, 1996                             5,066                       5,216
       6.60%  Series due October 1, 1997                         15,363                      15,363
      Medium-term notes 5.65% - 9.27%                           210,000                     251,000
   Maturing 2001 - 2007  6.47% - 9.07%                          260,595                     210,845
   Maturing 2021 - 2023  7.75% - 9.46%                          195,000                     195,000
                                                                686,024                     680,469
 Pollution Control Bonds
   Port of Morrow, Oregon, variable rate
     (Average 3.8% for 1995), due 2013                           23,600                      23,600
   City of Forsyth, Montana, variable rate
     (Average variable rates 3.8% - 4.0% for 1995),
     due 2013-2016                                              118,800                     118,800
   Amount held by trustee                                        (8,152)                     (8,355)
   Port of St. Helens, Oregon, variable rate due 2010
     and 2014 (Average variable rates 3.8% - 4.0% for 1995)      51,600                      51,600
 
                                                                185,848                     185,645
 Other
   8.25% Junior Subordinated Deferrable Interest                 75,000
     Debentures, Series A, due 2035                                                               -
   Portland General medium-term notes 8.09% due                  30,000                      30,000
     1996
   Capital lease obligations                                      9,353                      11,523
   Other                                                           (555)                       (317)
                                                                113,798                      41,206
                                                                985,670                     907,320
   Long-term debt due within one year                           (95,114)                    (71,506)
      Total long-term debt                                     $890,556                    $835,814
</TABLE>


 The following principal amounts  of long-term debt become due through early 
 redemptions and  maturities  (thousands of dollars):

<TABLE>
<CAPTION>
                          1996        1997        1998        1999        2000
 <S>                    <C>         <C>         <C>         <C>         <C>
  Maturities:
    PGC (Parent only)   $30,000     $     -     $     -     $     -     $     -
    PGE                  65,114      86,985      64,745      45,383      25,000
                        $95,114     $86,985     $64,745     $45,383     $25,000
</TABLE>

                                      47
<PAGE>

 NOTE 7 - OTHER FINANCIAL INSTRUMENTS

  HEDGING ACTIVITIES
  
  COMMODITY - Company policy  allows
 the  use  of  financial instruments  such as
  commodity  futures, options and swaps to hedge the price
 of natural gas  and electricity  and reduce the Company's
  exposure  to  market   fluctuations in these commodities.  
In  1995  transactions
 consisted primarily of fixed for floating swap agreements
 where the Company receives or makes payments based on the
  differential  between  a specified price and an index reference
  price  of  natural  gas  or  electricity.  
Swap contracts generally require monthly cash settlements
 over the term of the contract.  The Company is exposed to
  credit  risk  in  the  event of non-performance  by  the
 counterparties and has established guidelines to mitigate this risk.

 At December 31, 1995, the  Company  had  outstanding swap
  and  option contracts for the net purchases  of  4.6 billion  
  cubic  feet of natural gas over the following 14
  months.  Electric  swap  and  option  contracts  totaled
 256,000 MWh  of  electricity  over  the  following  nine
  months.   Recognition of gains or losses on the hedging instruments
  is deferred until the underlying physical transaction occurs.  See  
  the  discussion  in Note 8, Fair Value of
 Financial Instruments, for the estimated  fair  value  of
 these contracts.

 INTEREST RATE - In November 1994 PGE entered into two 10-year forward
 interest rate swap agreements, each with a notational
  amount of $25 million to hedge the future issuance costs of debt.  
  PGE settled the swap agreements
  for approximately $5 million in 1995  concurrently  with  the
  issuance   of   $75  million  of  long-term  debt.   The
 settlement amount was deferred and will be amortized over
  10 years.  This  amortization  does  not  materially
 affect the Company's weighted average borrowing rate.

TRADING ACTIVITIES
In addition to hedging activities, Company policy allows the use of the 
financial instruments, noted above, for trading purposes in support
of Company operations.  Gains or losses on financial instruments that do not 
qualify as hedges are recognized in income on a current basis.  During 1995 
no trading activity took place.


 NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS

 The  following  methods  and  assumptions  were  used  to
  estimate  the  fair  value  of  each  class of financial
 instruments for which it is practicable  to estimate that
 value:

 CASH AND CASH EQUIVALENTS
   The  carrying  amount  of  cash  and  cash  equivalents
 approximates  fair value because of the short maturity of
 those instruments.

 OTHER INVESTMENTS
 Other investments approximate market value.

 REDEEMABLE PREFERRED STOCK
 The fair value  of redeemable preferred stock is based on
 quoted market prices.


LONG-TERM DEBT
 The fair value of  long-term  debt  is estimated based on
 the quoted market prices for the same  or  similar issues
 or on the current rates offered to Portland  General  for
 debt of similar remaining maturities.

 INTEREST RATE SWAPS
 The fair value of the Company's 1994 interest rate swap agreements was based
 on the estimated termination value at December 31, 1994.
 
 NATURAL GAS AND ELECTRICITY SWAPS
  The  fair  value of natural gas and electricity swaps is
 the estimated  amount  that  the Company would receive or
 pay to terminate the agreements  at  the  reporting date,
  taking into account current market rates.


                                      48
 <PAGE>

 The estimated fair values of financial instruments are as
 follows (thousands of dollars):

<TABLE>
<CAPTION>

                                               1995                             1994
 <S>                                 <C>             <C>               <C>             <C>
                                     Carrying           Fair           Carrying           Fair
                                      Amount           Value            Amount           Value
 Preferred stock subject to
    mandatory redemption             $ 50,000        $   52,900        $ 60,000        $ 60,000
 Long-term debt
   PGC (Parent only)                 $ 30,000        $   30,531        $ 30,000        $ 29,887
   PGE                                946,872           994,996         866,114         824,211
                                     $976,872        $1,025,527        $896,114        $854,098

Interest rate swaps in net
 (payable) position                         -                 -               -            (401)

Commodity swaps in net
 (payable) position:
   Natural gas                              -              (261)              -            (598)
   Electricity                              -              (335)              -               -
</TABLE>


 NOTE 9 - COMMITMENTS

 NATURAL GAS AGREEMENTS
 PGE  has long-term agreements for transmission of natural
 gas from  domestic  and  Canadian sources to natural gas-
 fired generating facilities.  The agreements provide firm
 pipeline capacity.  Under the terms of these  agreements,
  PGE  is  committed  to  paying   capacity   charges   of
  approximately $15 million annually in 1996 through 1999,
 and  $149 million  over  the  remaining years of the
  contracts  which expire at varying dates  from  1998  to
 2015.  PGE has  the  right  to  assign unused capacity to
 other parties.

 RAILROAD SERVICE AGREEMENT
 PGE has a railroad service agreement  to  deliver coal from
  Wyoming  to Boardman and is  required  to
 contribute  $5  million over the 4 years remaining in the
 contract.

 PURCHASE COMMITMENTS
  Other  purchase  commitments   outstanding  (principally
 construction at PGE) totaled approximately $61 million at
  December  31,  1995.   Cancellation  of  these  purchase
 agreements could result in cancellation charges.

 PURCHASED POWER
 PGE has long-term power purchase  contracts  with certain
  public utility districts in the state of Washington  and
 with  the  City  of Portland, Oregon.  PGE is required to
 pay its proportionate  share  of  the  operating and debt
 service costs of the hydro projects whether  or  not they
 are operable.


                                      49
<PAGE>

Selected information is summarized as follows (thousands
 of dollars):

<TABLE>
<CAPTION>
                                             ROCKY       PRIEST                                PORTLAND
                                             REACH       RAPIDS      WANAPUM        WELLS        HYDRO
<S>                                        <C>          <C>          <C>          <C>          <C>
Revenue bonds outstanding at
 December 31, 1995                         $210,322     $128,360     $183,135     $189,540     $ 38,045
PGE's current share of:              
  Output                                      12.0%        13.9%        18.7%        21.8%         100%
  Net capability (megawatts)                    144          156          156          175           27
  Annual cost, including debt service:
      service:
        1995                                 $4,900       $3,900       $4,700       $5,700       $4,300
        1994                                  4,500        3,400        4,800        6,600        4,600
        1993                                  4,000        3,800        5,400        5,500        4,800
 Contract expiration date                      2011         2005         2009         2018         2017
</TABLE>


 PGE's  share  of  debt service costs, excluding interest,
 will be approximately $9 million for 1996, $4 million annually for 1997 and 
 1998 and $6 million annually for 1999 and 2000.  The  minimum  payments  
 through the remainder of the contracts are estimated to total $93 million.

 PGE has entered  into  long-term  contracts  to  purchase
  power from other utilities in the West.  These contracts
 will require fixed payments of up to $37 million in 1996,
 $27 million in 1997, and $26 million in both 1998 and 1999 and $21 million
 in 2000.  After that date, capacity contract charges will average $19 million
 annually until 2016.

 LEASES
 PGE  has  operating  and capital leasing arrangements for
 its headquarters complex,  combustion  turbines  and  the
  coal-handling  facilities  and certain railroad cars for
  Boardman.  PGE's aggregate rental  payments  charged  to
 expense  amounted  to  $21 million for 1995, and $22 million annually for
  1994  and  1993.   PGE has  capitalized  its  combustion
 turbine leases.  However,  these  leases  are  considered
 operating leases for ratemaking purposes.

 Future minimum lease payments under non-cancelable leases
 are as follows (thousands of dollars):

<TABLE>
<CAPTION>
         YEAR ENDING                               OPERATING LEASES
         DECEMBER 31      CAPITAL LEASES      (NET OF SUBLEASE RENTALS)        TOTAL
 <S>                         <C>                       <C>                   <C>
  1996                       $ 3,016                   $ 19,127              $ 22,143
  1997                         3,016                     18,326                21,342
  1998                         3,016                     18,403                21,419
  1999                         1,388                     19,454                20,842
  2000                             -                     19,768                19,768
  Remainder                        -                    152,756               152,756
     Total                    10,436                   $247,834              $258,270
  Imputed Interest           (1,083)
  Present Value of
  Minimum Future
  Net Lease Payments         $ 9,353
</TABLE>

  Included  in the future minimum operating lease payments
 schedule above  is approximately $129 million for Portland General's
 and PGE's headquarters complex.

                                      50 
<PAGE>

NOTE 10 - JOINTLY OWNED PLANT

 At December 31, 1995,  PGE  had the following investments
   in  jointly owned  generating  plants   (thousands   of
 dollars):

<TABLE>
<CAPTION>
                                                    MW          PGE %         PLANT        ACCUMULATED
   FACILITY           LOCATION         FUEL      CAPACITY     INTEREST     IN SERVICE     DEPRECIATION
 <S>               <C>                 <C>       <C>          <C>          <C>            <C>
 Boardman          Boardman, OR        Coal        508        65.0         $370,721       $176,365
 Colstrip 3&4      Colstrip, MT        Coal      1,440        20.0          451,176        189,799
 Centralia         Centralia, WA       Coal      1,310         2.5            9,649          5,665
</TABLE>


 The  dollar  amounts  in  the table above represent PGE's
 share of each jointly owned  plant.   Each participant in
  the  above  generating  plants  has  provided   its  own
  financing.  PGE's share of the direct expenses of  these
  plants   is  included  in  the  corresponding  operating
 expenses on  Portland  General's  and  PGE's consolidated
 income statements.


 NOTE 11 - TROJAN NUCLEAR PLANT

  PLANT  SHUTDOWN AND TRANSITION COSTS - PGE  is  a  67.5%
 owner of  Trojan.   In  early 1993, PGE ceased commercial
 operation of the nuclear plant.  Since plant closure, PGE
 has committed itself to a  safe and economical transition
  toward  a  decommissioned plant.   Remaining  transition
 costs associated  with   operating  and  maintaining  the
   spent   fuel   pool   and   securing  the  plant  until
 dismantlement begins in 1998 are estimated at $37 million
 and will be paid from current operating funds.

   DECOMMISSIONING   -   In   1995,   PGE    submitted   a
  decommissioning  plan  to  the  NRC and EFSC.  The  plan
  estimates  PGE's  cost to decommission  Trojan  at  $358
 million, reflected in  nominal  dollars  (actual  dollars
  expected to be spent in each year).  The plan represents
 a  site-specific  decommissioning  estimate performed for
 Trojan by an engineering firm experienced  in  estimating
   the  cost  of  decommissioning  nuclear  plants.   This
 estimate  assumes  that  the  majority of decommissioning
 activities will occur between 1997  and  2001, while fuel
  management  costs  extend through the year 2018.   Final
 site restoration activities  are  anticipated to begin in
  2018 after PGE completes shipment of  spent  fuel  to  a
 USDOE  facility (see the Nuclear Fuel Disposal discussion
 below).   The cost estimate is adjusted periodically  due
  to  refinement  of  the  timing  and  scope  of  certain
 dismantlement  activities.   Stated  in 1995 dollars, the
 current decommissioning cost estimate is $246 million.

  Until plan approval, PGE is prohibited  from  initiating
   any   major   decommissioning   activities.    However,
 decommissioning  planning  and  licensing  activities are
 continuing.  PGE anticipates approval by the NRC and EFSC
 of its decommissioning proposal during 1996.

 PGE is collecting $14 million annually through  2011 from
  customers for decommissioning costs.  These amounts  are
 deposited  in an external trust fund which  is limited to
  reimbursing  PGE  for  activities  covered  in  Trojan's
 decommissioning  plan.   Funds were withdrawn during 1995
  to cover the costs of large  component  removal.  Trojan
 decommissioning  trust  assets  are invested primarily in
  investment-grade,  tax-exempt and U.S. Treasury bonds.   Year-end
 balances are valued at market.

                                      51
<PAGE>



 Earnings on the trust  are  used  to reduce the amount of
  decommissioning  costs to be collected  from  customers.
   PGE   expects   any   future   changes   in   estimated
  decommissioning  costs  to  be  incorporated  in  future
 revenues to be collected from customers.

 INVESTMENT RECOVERY - The  OPUC  issued an order in March
  1995  authorizing PGE to recover all  of  the  estimated
 costs of  decommissioning Trojan and 87% of the remaining
 investment  in  the  plant.   Amounts are to be collected
 over Trojan's original license period ending in 2011. The
 disallowed portion of the Trojan investment was comprised
  of  $17  million  of  post-1991 capital  expenditures,
 primarily related to steam  generator  repair activities,
  and  $20 million of general Trojan investment.   As  a
 result  of  this  disallowance, PGE recorded an after-tax
 charge to income of $37 million.

 The OPUC's order and  the  agency's  authority  to  grant
  recovery  of  the Trojan investment under Oregon law are
 being challenged  in  state  courts.  Management believes
 that the authorized recovery of the Trojan investment and
 decommissioning costs will be upheld and that these legal
 challenges will not have a material adverse impact on the
  results  of  operations or financial  condition  of  the
 Company for any future reporting period.

 NUCLEAR FUEL DISPOSAL  AND  CLEANUP  OF FEDERAL PLANTS -
 PGE contracted with the USDOE for permanent  disposal  of
 its spent nuclear fuel in federal facilities at a cost of
  .1 cent  per net kilowatt-hour sold at Trojan which the
  Company paid  during  the  period  the  plant  operated.
 Significant  delays  are expected in the USDOE acceptance
  schedule of spent fuel  from  domestic  utilities.   The
 federal  repository,  which  was  originally scheduled to
  begin operations in 1998, is now estimated  to  commence
  operations no   earlier   than  2010.   This  may  create
  difficulties  for  PGE in disposing  of  its  high-level
 radioactive waste by  2018.  However, federal legislation
 has been introduced which, if passed, would require USDOE
 to provide interim storage  for  high level waste until a
 permanent site is established.  PGE  intends  to build an
  interim storage facility at Trojan to house the  nuclear
 fuel until a federal site is available.

 The  Energy  Policy Act of 1992 provided for the creation
 of a Decontamination  and Decommissioning Fund to finance
  the  cleanup of USDOE gas  diffusion  plants.   Funding
 comes from  domestic  nuclear  utilities  and the federal
 government.  Each utility contributes based  on the ratio
   of  the  amount  of  enrichment  services  the  utility
 purchased  to  the  total  amount  of enrichment services
  purchased  by  all  domestic  utilities   prior  to  the
  enactment  of  the legislation.  Based on Trojan's  1.1%
  usage  of  total  industry  enrichment  services,  PGE's
 portion of the funding  requirement  is approximately $17
 million.  Amounts are funded over 15 years beginning with
 the USDOE's fiscal year 1993.  Since enactment,  PGE  has
  made  the  first four of the 15 annual payments with the
 first payment made in September 1993.

 NUCLEAR INSURANCE  - The Price-Anderson Amendment of 1988
 limits public liability  claims  that  could arise from a
 nuclear incident and provides for loss sharing  among all
 owners of nuclear reactor licenses.   Because Trojan  has
  been permanently defueled, the NRC has exempted PGE from
 participation  in  the  secondary insurance pool covering
 losses in excess of $200 million at other nuclear plants.
 In addition, the NRC has  reduced  the  required  primary
  nuclear  insurance coverage for Trojan from $200 million
 to $100 million  following  a  3 year cool-down period of
  the  nuclear fuel that is still on-site.   The  NRC  has
 allowed  PGE  to self-insure for on-site decontamination.
  PGE  continues  to   carry   non-contamination  property
 insurance on the Trojan plant at the $155 million level.

                                      52
<PAGE>



 NOTE 12 - WNP-3 SETTLEMENT EXCHANGE AGREEMENT

 PGE is selling energy received  under  a  WNP-3  Settlement Exchange Agreement
 (WSA) to WAPA for 25 years, which began October 1990.   Revenues from the WAPA
 sales contract are expected to be sufficient to support the  carrying value of
 PGE's investment.

 The energy received by PGE under WSA is the result of a settlement  related to
  litigation  surrounding  the  abandonment  of  WNP-3.  PGE receives about  65
  average annual MW for approximately 30 years from  BPA  under  the  WSA.  In
 exchange,  PGE  will make available to BPA energy from its combustion turbines
 or from other available resources at an agreed-to price.


 NOTE 13 - REGULATORY MATTERS

 SETTLEMENT REACHED  -  Pursuant  to  the  agreement adopted by the OPUC in the
 order discussed below, the Marion County Circuit  Court approved PGE's request
 for dismissal of its dispute with the Commission regarding  the  allocation of
 the gain on a sale of a portion of Boardman and the Intertie in PGE  V. RONALD
 EACHUS, MYRON KATZ, NANCY RYLES AND THE OREGON PUBLIC UTILITY COMMISSION.

1995 Rate Orders - On March 29, 1995 the OPUC issued an order on PGE's 1993 
general  rate request.  The order, based on a two-year test period, authorized 
a single average rate increase of 5% representing additional revenues of $51 
million in 1995 and $52 million in 1996.  The order established PGE's return on 
equity at
  11.6%  for  both  1995  and 1996.  This is  a  decrease  from the previously
 authorized 12.5%.  The order  authorized  PGE  to recover all of the estimated
  Trojan decommissioning costs and 87% of its remaining  investment  in  Trojan
 which  will be collected over Trojan's original license period ending in 2011.
 As a result  of  the  disallowance  of  13% of PGE's investment in Trojan, the
 Company recorded a $37 million after-tax charge  to  income. The order also
  adopted a mechanism to decouple short-term profits from retail  kilowatt-hour
 sales.  For further information regarding the Trojan disallowance see Note 11,
 Trojan Nuclear Plant.

 On  November  21,  1995 the Commission issued an order granting PGE an average
 2.7% rate increase to  recover  the  capital  and  fixed costs associated with
  Coyote  Springs  and  BPA's  October  1995 price increase.   The  order  also
 addressed recovery of PGE deferred power  costs  and  proposed  elimination of
 certain regulatory assets.

 The order authorized full recovery of $11 million of power costs deferred from
 January through March 1995 and allowed  recovery of only $9 million of the $50
 million of  power costs deferred from July 1993 through March 1994.  The order
  also  authorized  the  immediate  recovery  of  approximately $29 million  in
 incentive revenues associated with prior years' achievements  of the Company's
  energy efficiency programs.  PGE recorded a $13 million after-tax  charge  to
 income based on the order.

 The  order  implemented  the  Company's  proposal to offset certain regulatory
  assets, including the  uncollected  balance of  all  power  cost  deferrals,
 incentive revenues  and a portion of the  remaining Trojan investment, against
 PGE's unamortized gain on the prior sale of a portion of Boardman.  The offset
  allowed  for  recovery of the deferred power  costs  and  incentive  revenues
  discussed  above,   without  increasing   customer  rates, while eliminating
 approximately $117 million  of  regulatory  assets  and  liabilities  from the
 Company's balance sheets.

An application for reconsideration of the November 1995 order was filed with 
the OPUC by a party to the proceeding.  A decision from the OPUC is pending.


                                      53
<PAGE>


 NOTE 14 - LEGAL MATTERS

 BONNEVILLE PACIFIC CLASS ACTION AND LAWSUIT
  In  April  1992 legal action was filed by Bonneville Pacific against Portland
 General, Holdings,  and  certain  individuals affiliated with Portland General
 or Holdings alleging breach of fiduciary  duty, tortious interference, breach
 of contract, and other actionable wrongs related  to  Holdings'  investment in
  Bonneville  Pacific.   Following  his  appointment,  the  Bonneville  Pacific
 bankruptcy trustee, on behalf of Bonneville Pacific, filed numerous amendments
  to  the complaint.  The complaint now includes allegations of RICO violations
 and RICO  conspiracy,  collusive  tort,  civil  conspiracy,  common law fraud,
 negligent misrepresentation, breach of fiduciary duty, liability as a partner
 for  the debts of a partnership, and other actionable wrongs.  The Court has
 rejected  the  Trustee's previously filed damage study which is expected to be
 revised and refiled.

 OTHER LEGAL MATTERS
 Portland General  and  certain  of its subsidiaries are party to various other
 claims,  legal actions and complaints  arising  in  the  ordinary  course  of
 business.  These claims are not considered material.

 SUMMARY
 While the ultimate  disposition  of  these  matters  may have an impact on the
  results  of  operations  for a future reporting period, management  believes,
 based on discussion of the  underlying  facts  and  circumstances  with  legal
  counsel,  that  these  matters will not have a material adverse effect on the
 financial condition of Portland General.

 OTHER BONNEVILLE PACIFIC RELATED LITIGATION
 Holdings has filed complaints  seeking  approximately  $228 million in damages
 against Deloitte & Touche and certain other parties associated with Bonneville
  Pacific  alleging that it relied on fraudulent and negligent  statements  and
 omissions by  Deloitte  &  Touche and the other defendants when it acquired an
 interest in and made loans to Bonneville Pacific.


                                      54
<PAGE>


                  QUARTERLY COMPARISON FOR 1995 AND 1994 (UNAUDITED)

 PORTLAND GENERAL CORPORATION

<TABLE>
<CAPTION>
                                     MARCH 31        JUNE 30      SEPTEMBER 30    DECEMBER 31
                                         (THOUSANDS  OF  DOLLARS EXCEPT PER SHARE AMOUNTS)
 <S>                               <C>             <C>            <C>             <C>
 1995                           
 Operating revenues                  $259,177        $219,892       $222,612        $281,901
 Net operating income                  49,553          47,179         40,266          58,578
 Net income/(loss)                     (1,954)         32,403         14,181          36,406
 Common stock
 Average shares outstanding        50,591,449      50,697,040     50,798,082      50,976,781
 Earnings/(loss) per 
  average share{1}                      $(.04)           $.64           $.28            $.71


 1994
 Operating revenues                  $278,014        $202,110       $214,180        $265,105
 Net operating income                  55,920          30,019         27,525          40,832
 Net income                            39,165          23,965         11,887          24,513
 Common stock
 Average shares outstanding        48,670,211      50,145,565     50,285,669      50,461,348
 Earnings per average share{1}           $.80            $.48           $.24            $.49


  {1}As  a  result  of  dilutive  effects  of  shares issued during the period,
 quarterly earnings per share cannot be
   added to arrive at annual earnings per share.

</TABLE>



 PORTLAND GENERAL ELECTRIC COMPANY

                             MARCH 31     JUNE 30   SEPTEMBER 30   DECEMBER 31
                                             (THOUSANDS OF DOLLARS)
 1995
 Operating revenues         $258,891     $218,476    $222,240       $282,021
 Net operating income         49,388       46,499      39,902         59,397
 Net income/(loss)               640       34,800      16,789         40,558
 Income available for
  common stock                (1,943)      32,383      14,409         38,294


 1994
 Operating revenues          $277,672    $201,773    $213,897        $265,613
 Net operating income          53,555      27,734      26,342          45,577
 Net income                    41,187      18,540      14,807          31,584
 Income available for
  common stock                 38,199      15,894      12,224          29,001


                                      55   
<PAGE>


 ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                     ACCOUNTING AND FINANCIAL DISCLOSURE


 None.


                                   Part III    
 

 ITEMS 10-13   INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
               OF THE REGISTRANT



 PORTLAND GENERAL CORPORATION

  Information  for  Items  10-13 is incorporated by  reference  to  Portland
 General's definitive proxy statement to  be  filed on or about March 27, 1996.
 Executive officers of Portland General are listed on page 23 of this report.

 PORTLAND GENERAL ELECTRIC COMPANY

  Information  for  Items  10-13 is incorporated by  reference  to  Portland
 General's definitive proxy statement to be filed on or about March 27, 1996.
 Executive officers of Portland General Electric are listed on page 23 of this
 report.

                                    Part IV    
                                    
ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
             ON FORM 8-K


 PORTLAND GENERAL CORPORATION AND PORTLAND GENERAL ELECTRIC COMPANY


(a)  INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
                                                                       PAGE NO.
                                                                      PGC   PGE
     FINANCIAL STATEMENTS
     Report of Independent Public Accountants                          34    65
     Consolidated Statements of Income for each of the three years
      in the period ended December 31, 1995                            35    66
     Consolidated Statements of Retained Earnings for each of the
      the three years in the period ended December 31, 1995            35    66
     Consolidated Balance Sheets at December 31, 1995 and 1994         36    67
     Consolidated Statement of Cash Flows for each of the three
      years in the period ended December 31, 1995                      37    68
    Notes to Financial Statements                                      38    69

    FINANCIAL STATEMENT SCHEDULES
    Schedules are omitted because of the absence of conditions under which they
    are  required or because the required information is given in the financial
    statements or notes thereto.

    EXHIBITS
    See Exhibit Index on Page 59 of this report.

 (b)  REPORT ON FORM 8-K
                                                                      PGC   PGE
    November 21, 1995 - Item 5.  Other Events:                         X     X
    The OPUC issued an order on PGE's August 1995 consolidated 
     filing.


                                      56      
<PAGE>

                                  SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
 Act of 1934,  the  Registrant  has duly caused this report to be signed on its
 behalf by the undersigned, thereunto duly authorized.

                         Portland General Corporation



 February 29, 1996        By      /S/ KEN L. HARRISON
                                         Ken L. Harrison

                                Chairman of the Board and
                                Chief Executive Officer


 Pursuant to the requirements of  the  Securities  Exchange  Act  of 1934, this
  report  has  been  signed  below  by  the following persons on behalf of  the
 Registrant and in the capacities and on the dates indicated.


                              Chairman of the Board and
/S/ KEN L. HARRISON           Chief Executive Officer         February 29, 1996
   Ken L. Harrison


                              Senior Vice President,
/S/ JOSEPH M. HIRKO           Chief Financial Officer         February 29, 1996
    Joseph M. Hirko


*Gwyneth Gamble Booth
*Peter J. Brix
*Carolyn S. Chambers
*John W. Creighton, Jr.
*Ken L. Harrison
*Jerry E. Hudson              Directors                       February 29, 1996
*Warren E. McCain
*Jerome J. Meyer
*Randolph L. Miller
*Bruce G. Willison

*By       /S/ JOSEPH E. FELTZ
      (Joseph E. Feltz, Attorney-in-Fact)


                                      57
<PAGE>

 
                                  SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
  Act of 1934, the Registrant has duly caused this report to be signed  on  its
 behalf by the undersigned, thereunto duly authorized.

                         Portland General Electric Company



 February 29, 1996       By     /S/ KEN L. HARRISON
                                      Ken L. Harrison

                              Chairman of the Board and
                              Chief Executive Officer


 Pursuant  to  the  requirements  of  the Securities Exchange Act of 1934, this
  report  has  been signed below by the following  persons  on  behalf  of  the
 Registrant and in the capacities and on the dates indicated.


                              Chairman of the Board and
/S/ KEN L. HARRISON           Chief Executive Officer         February 29, 1996
   Ken L. Harrison


                              Senior Vice President
/S/ JOSEPH M. HIRKO           Chief Financial Officer         February 29, 1996
    Joseph M. Hirko



*Gwyneth Gamble Booth
*Peter J. Brix
*Carolyn S. Chambers
*John W. Creighton, Jr.
*Ken L. Harrison
*Jerry E. Hudson              Directors                       February 29, 1996
*Warren E. McCain
*Jerome J. Meyer
*Randolph L. Miller
*Bruce G. Willison


*By              /S/ JOSEPH E. FELTZ
      (Joseph E. Feltz, Attorney-in-Fact)


                                      58
<PAGE>



                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

<TABLE> <S> <C>
<CAPTION>
 NUMBER                         EXHIBIT                                     PGC    PGE

 (3)      Articles of Incorporation and bylaws
 
        * Restated Articles of Incorporation of Portland General
          Corporation [Pre-effective Amendment No. 1 to Form S-4,
          Registration No. 33-1987, dated December 31, 1985,
          Exhibit (B)].                                                      X

        * Certificate of Amendment, dated July 2, 1987, to the
          Articles of Incorporation limiting the personal
          liability of directors of Portland General Corporation
          [Form 10-K for the fiscal year ended December 31, 1987,
          Exhibit (3)].                                                      X

        * Copy of Articles of Incorporation of Portland General
          Electric Company [Registration No. 2-85001, Exhibit (4)].                 X

        * Certificate of Amendment, dated July 2, 1987, to the
          Articles of Incorporation limiting the personal
          liability of directors of Portland General Electric
          Company [Form 10-K for the fiscal year ended
          December 31, 1987, Exhibit (3)].                                          X

        * Form of Articles of Amendment of the New Preferred
          Stock of Portland General Electric Company
          [Registration No. 33-21257, Exhibit (4)].                                 X

        * Bylaws of Portland General Corporation as amended on
          February 5, 1991 [Form 10-K for the fiscal year
          ended December 31, 1990, Exhibit (10)].                            X

        * Bylaws of Portland General Electric Company as
          amended on October 1, 1991 [Form 10-K for the fiscal
          year ended December 31, 1991, Exhibit (3)].                               X

 (4)      Instruments defining the rights of security holders,
          including indentures

        * Portland General Electric Company Indenture of Mortgage
          and Deed of Trust dated July 1, 1945;

        * Fifteenth Supplemental Indenture, dated June 1, 1966;
          Eighteenth Supplemental Indenture, dated November 1, 1970;
          Twentieth Supplemental Indenture, dated November 1, 1972;
          Twenty-First Supplemental Indenture, dated April 1, 1973;
          (Registration No. 2-61199, Exhibit 2.d-1).                         X      X
        
        * Fortieth Supplemental Indenture, dated October 1,
          1990 [Form 10-K for the fiscal year ended December 31,
          1990, Exhibit (4)].                                                X      X




</TABLE>

                                      59
<PAGE>



                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

<TABLE>
<CAPTION>
 NUMBER                         EXHIBIT                                     PGC    PGE


 (4)    * Forty-First Supplemental Indenture dated December 31,
Cont.     1991 [Form 10-K for the fiscal year ended December 31,
          1991, Exhibit (4)].                                                X      X

        * Forty-Second Supplemental Indenture dated April 1, 1993
          [Form 10-Q for the quarter ended March 31,1993,
          Exhibit (4)].                                                      X      X

        * Forty-Third Supplemental Indenture dated July 1, 1993
          [Form 10-Q for the quarter ended September 30, 1993,
          Exhibit (4)].                                                      X      X

        * Forty-Fourth Supplemental Indenture dated August 1, 1994
          [Form 10-Q for the quarter ended September 30, 1994,
          Exhibit (4)].                                                      X      X

        * Forty-Fifth Supplemental Indenture dated May 1, 1995
          [Form 10-Q for the quarter ended June 30, 1995,
          Exhibit (4)].                                                      X      X

          Other instruments which define the rights of holders of
          long-term debt not required to be filed herein will be
          furnished upon written request.

 (10)     Material Contracts
 
        * Residential Purchase and Sale Agreement with the
          Bonneville Power Administration [Form 10-K for the
          fiscal year ended December 31, 1981, Exhibit (10)].                X      X

        * Power Sales Contract and Amendatory Agreement Nos. 1 and
          2 with Bonneville Power Administration [Form 10-K for
          the fiscal year ended December 31, 1982, Exhibit (10)].            X      X

        The following 12 exhibits were filed in conjunction with the
        1985 Boardman/Intertie Sale:

        * Long-term Power Sale Agreement, dated November 5, 1985
          [Form 10-K for the fiscal year ended December 31, 1985,
          Exhibit (10)].                                                     X      X

        * Long-term Transmission Service Agreement, dated
          November 5, 1985 [Form 10-K for the fiscal year
          ended December 31, 1985, Exhibit (10)].                            X      X

        * Participation Agreement, dated December 30, 1985
          [Form 10-K for the fiscal year ended December 31,
          1985, Exhibit (10)].                                               X      X
<S> <C>
</TABLE>

                                      60
<PAGE>



                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

<TABLE>
<CAPTION>
 NUMBER                         EXHIBIT                                     PGC    PGE

 (10)   * Lease Agreement, dated December 30, 1985 [Form 10-K
 Cont.    for the fiscal year ended December 31, 1985,
          Exhibit (10)].                                                     X      X

        * PGE-Lessee Agreement, dated December 30, 1985
          [Form 10-K for the fiscal year ended December 31,
          1985, Exhibit (10)].                                               X      X

        * Asset Sales Agreement, dated December 30, 1985
          [Form 10-K for the fiscal year ended December 31,
          1985, Exhibit (10)].                                               X      X

        * Bargain and Sale Deed, Bill of Sale and Grant of
          Easements and Licenses, dated December 30, 1985
          [Form 10-K for the fiscal year ended December 31,
          1985, Exhibit (10)].                                               X      X

        * Supplemental Bill of Sale, dated December 30, 1985
          [Form 10-K for the fiscal year ended December 31,
          1985, Exhibit (10)].                                               X      X

        * Trust Agreement, dated December 30, 1985 [Form 10-K
          for the fiscal year ended December 31, 1985, Exhibit (10)].        X      X

        * Tax Indemnification Agreement, dated December 30, 1985
          [Form 10-K for the fiscal year ended December 31, 1985,
          Exhibit (10)].                                                     X      X

        * Trust Indenture, Mortgage and Security Agreement, dated
          December 30, 1985 [Form 10-K for the fiscal year ended
          December 31, 1985, Exhibit (10)].                                  X      X

        * Restated and Amended Trust Indenture, Mortgage and
          Security Agreement, dated February 27, 1986 [Form 10-K
          for the fiscal year ended December 31, 1985, Exhibit (10)].        X      X



        * Portland General Corporation Outside Directors'
          Deferred Compensation Plan, 1990 Restatement
          dated November 1, 1990 [Form 10-K for the fiscal
          year ended December 31, 1990, Exhibit (10)].                       X      X

        * Portland General Corporation Retirement Plan for
          Outside Directors, 1990 Restatement dated July 10, 1990
          [Form 10-K for the fiscal year ended December 31, 1990,
          Exhibit (10)].                                                     X      X
<S> <C>
</TABLE>

                                      61
<PAGE>



                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

<TABLE>
<CAPTION>
 NUMBER                         EXHIBIT                                     PGC    PGE

 (10)   * Portland General Corporation Outside Directors Life
 Cont.    Insurance Benefit Plan, Amendment No. 2 dated
          December 3, 1989 [Form 10-K for the fiscal year ended
          December 31, 1989, Exhibit (10)].                                  X      X

        * Portland General Corporation Outside Directors' Stock
          Compensation Plan, Amended and Restated December 6,
          1989 [Form 10-K for the fiscal year ended December 31,             X
          1991, Exhibit (10)].

        * Portland General Corporation outside Directors' Stock
          Compensation Plan, Amendment No. 1 dated February 8,
          1994 [Form 10-Q for the quarter ended March 31, 1994,
          Exhibit (10)].                                                     X

          EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS

          Portland General Corporation Management Deferred
          Compensation Plan, 1994 Restatement dated October 1,
          1994 (filed herewith).                                             X      X

          Portland General Corporation Management Deferred
          Compensation Plan, Amendment No. 1 dated April 1,    
          1995 (filed herewith).                                             X      X

        * Portland General Corporation Senior Officers Life
          Insurance Benefit Plan, Amendment No. 2 dated
          December 3, 1989 [Form 10-K for the fiscal year ended
          December 31, 1989, Exhibit (10)].                                  X      X

        * Portland General Corporation Annual Incentive Master Plan
          [Form 10-K for the fiscal year ended December 31, 1987,
          Exhibit (10)].                                                     X      X

        * Portland General Corporation Annual Incentive Master Plan,
          Amendments No. 1 and No. 2 dated March 5, 1990 [Form
          10-K for the fiscal year ended December 31, 1989, Exhibit
          (10)].                                                             X      X

        * Portland General Electric Company Annual Incentive Master
          Plan [Form 10-K for the fiscal year ended December 31, 1987,
          Exhibit (10)].                                                            X

        * Portland General Electric Company Annual Incentive Master
          Plan, Amendments No. 1 and No. 2 dated March 5, 1990
          [Form 10-K for the fiscal year ended December 31, 1989,
          Exhibit (10)].                                                            X

        * Portland General Corporation Supplemental Executive
          Retirement Plan, 1990 Restatement dated July 10, 1990
          [Form 10-K for the fiscal year ended December 31, 1990,
          Exhibit (10)].                                                     X      X
<S> <C>
</TABLE>

                                      62 
<PAGE>


                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

<TABLE>
<CAPTION>
 NUMBER                         EXHIBIT                                     PGC    PGE

 (10)   * Portland General Corporation Supplemental Executive
 Cont.    Retirement Plan, Amendment No. 1 dated January 1, 1991,
          [Form 10-K for the fiscal year ended December 31, 1991,            X      X
          Exhibit (10)].

        * Change in Control Severance Agreement, effective October 1,
          1994 [Form 10-K for the fiscal year ended December 31,
          1994, Exhibit 10(a)].                                              X      X

        * Portland General Corporation Amended and Restated 1990
          Long-Term Incentive Master Plan, amended July 1993
          [Form 10-K for the fiscal year ended December 31, 1993,
          Exhibit (10)].                                                     X

        * Portland General Corporation 1990 Long-Term Incentive
          Master Plan, Amendment No. 1 dated February 8, 1994
          [Form 10-K for the fiscal year ended December 31, 1993,
          Exhibit (10)].                                                     X

 (23)     Consents of experts and counsel
 
          Portland General Corporation Consent of Independent
          Public Accountants (filed herewith).                               X

          Portland General Electric Company Consent of Independent
          Public Accountants (filed herewith).                                      X

 (24)     Power of attorney
 
          Portland General Corporation Power of Attorney
          (filed herewith).                                                  X

          Portland General Electric Company Power of Attorney
          (filed herewith).                                                         X

 (99)     Additional exhibits

          Form 11-K relating to Employee Stock Purchase Plan of
          Portland General Corporation (filed herewith).                     X

* Incorporated by reference as indicated.
<S> <C>
</TABLE>

Note:  Although the Exhibits furnished to the Securities and Exchange 
       Commission with the Form 10-K have been omitted herein, they will be
       supplied upon written request and payment of a reasonable fee for
       reproduction costs.  Requests should be sent to:

            Joseph M. Hirko
            Senior Vice President
            Chief Financial Officer

            Portland General Corporation
            121 SW Salmon Street
            Portland, OR 97204



                                      63    
<PAGE>


                                    APPENDIX




                        PORTLAND GENERAL ELECTRIC COMPANY




                                TABLE OF CONTENTS      

                     
PART II

                                                                           Page
 Item 8.       Financial Statements and Notes ............................. 66
                     
                     
                                      64                
<PAGE>                     
                     
                     MANAGEMENT'S STATEMENT OF RESPONSIBILITY

  PGE's management is responsible for the preparation and presentation  of  the
  consolidated  financial  statements  in  this  report.   Management  is  also
 responsible  for  the  integrity and objectivity of the statements.  Generally
 accepted accounting principles  have  been used to prepare the statements, and
 in certain cases informed estimates have  been used that are based on the best
 judgment of management.

 Management has established, and maintains,  a  system  of  internal accounting
  controls.   The  controls  provide  reasonable  assurance  that  assets   are
  safeguarded,  transactions  receive  appropriate authorization, and financial
 records are reliable.  Accounting controls  are  supported by written policies
 and procedures, an operations planning and budget  process designed to achieve
 corporate objectives, and internal audits of operating activities.

  PGE's  Board of Directors includes an Audit Committee  composed  entirely  of
  outside  directors.   It  reviews  with  management,  internal  auditors  and
 independent  auditors the adequacy of internal controls, financial reporting,
 and other audit matters.

 Arthur Andersen  LLP is PGE's independent public accountant.  As a part of its
 annual audit, selected  internal  accounting controls are reviewed in order to
 determine the nature, timing and extent  of  audit tests to be performed.  All
 of the corporation's financial records and related  data are made available to
  Arthur  Andersen  LLP.  Management has also endeavored  to  ensure  that  all
 representations to Arthur Andersen LLP were valid and appropriate.

 Joseph M. Hirko
 Senior Vice President,
 Chief Financial Officer


                     REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

 To the Board of Directors and Shareholders of
     Portland General Electric Company:

 We have audited the  accompanying  consolidated  balance  sheets  of  Portland
  General  Electric  Company and subsidiaries as of December 31, 1995 and 1994,
 and the related consolidated  statements of income, retained earnings and cash
 flows for each of the three years  in  the  period  ended  December  31, 1995.
 These financial statements are the responsibility of the Company's management.
  Our  responsibility  is  to  express an opinion on these financial statements
 based on our audits.

  We  conducted  our  audits in accordance  with  generally  accepted  auditing
 standards.  Those standards  require  that  we  plan  and perform the audit to
 obtain reasonable assurance about whether the financial statements are free of
 material misstatement.  An audit includes examining, on a test basis, evidence
 supporting the amounts and disclosures in the financial  statements.  An audit
  also  includes  assessing  the  accounting  principles  used and  significant
  estimates  made  by  management, as well as evaluating the overall  financial
 statement presentation.  We believe that our audits provide a reasonable basis
 for our opinion.

 In our opinion, the financial  statements referred to above present fairly, in
 all material respects, the financial  position  of  Portland  General Electric
 Company and subsidiaries as of December 31, 1995 and 1994, and  the results of
  their  operations  and  their cash flows for each of the three years  in  the
  period  ended  December  31,  1995  in  conformity  with  generally  accepted
 accounting principles.

                                                         Arthur Andersen LLP

 Portland, Oregon,
 January 24, 1996

                                      65
<PAGE>


               PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
 FOR THE YEARS ENDED DECEMBER 31                                          1995           1994           1993
 <S>                                                                   <C>           <C>            <C>
                                                                               (THOUSANDS OF DOLLARS)
  OPERATING REVENUES                                                   $  981,628    $  958,955     $  944,531
  OPERATING EXPENSES
   Purchased power and fuel                                               293,589       347,125        311,713
   Production and distribution                                             63,841        61,891         73,576
   Maintenance and repairs                                                 47,532        47,389         55,320
   Administrative and other                                               106,128        97,987         98,408
   Depreciation and amortization                                          134,340       124,003        121,898
   Taxes other than income taxes                                           51,489        52,038         55,676
   Income taxes                                                            89,523        75,314         73,740
                                                                          786,442       805,747        790,331
 NET OPERATING INCOME                                                     195,186       153,208        154,200
 OTHER INCOME (DEDUCTIONS)
 Regulatory disallowances - net of income taxes of $25,542                (49,567)            -              -
   Allowance for equity funds used during construction                      3,257           271              -
   Other                                                                    8,415        15,500         11,771
   Income taxes                                                             4,272           377         (1,752)
                                                                          (33,623)       16,148         10,019
 INTEREST CHARGES
   Interest on long-term debt and other                                    69,667        61,493         61,817
   Interest on short-term borrowings                                        6,917         5,788          3,443
   Allowance for borrowed funds used during construction                   (7,808)       (4,043)          (785)
                                                                           68,776        63,238         64,475
 NET INCOME                                                                92,787       106,118         99,744
 PREFERRED DIVIDEND REQUIREMENT                                             9,644        10,800         12,046
 INCOME AVAILABLE FOR COMMON STOCK                                      $  83,143    $   95,318      $  87,698


                                                      PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
                                                           CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
 
 FOR THE YEARS ENDED DECEMBER 31                                            1995          1994           1993
                                                                                  (THOUSANDS OF DOLLARS)
 BALANCE AT BEGINNING OF YEAR                                           $ 216,468    $  179,297      $ 165,949
 NET INCOME                                                                92,787       106,118         99,744
 ESOP TAX BENEFIT AND OTHER                                                (3,570)       (1,705)        (1,524)
                                                                          305,685       283,710        264,169
 DIVIDENDS DECLARED
   Common stock                                                            50,456        56,442         72,826
   Preferred stock                                                          8,947        10,800         12,046
                                                                           59,403        67,242         84,872
 BALANCE AT END OF YEAR                                                 $ 246,282    $  216,468      $ 179,297
 
 The accompanying notes are an integral part of these consolidated statements.

</TABLE>

                                      66       
<PAGE>

               PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

AT DECEMBER 31                                             1995                  1994
<S>                                                     <C>                   <C>
                                                              (THOUSANDS OF DOLLARS)

                                    ASSETS
ELECTRIC UTILITY PLANT - ORIGINAL COST
  Utility plant (includes Construction Work in
   Progress of $33,382 and $148,267)                    $  2,754,280          $  2,563,476
  Accumulated depreciation                                (1,040,014)             (958,465)
                                                           1,714,266             1,605,011
  Capital leases - less amortization of                        9,353                11,523
   $27,966 and $25,796
                                                           1,723,619             1,616,534
OTHER PROPERTY AND INVESTMENTS
  Trojan decommissioning trust, at market                     68,774                58,485
   value
  Corporate owned life insurance, less loans                  44,635                40,034
   of $ 26,432 and $21,731
  Other investments                                           24,943                26,074
                                                             138,352               124,593
CURRENT ASSETS
  Cash and cash equivalents                                    2,241                 9,590
  Accounts and notes receivable                              102,592                91,672
  Unbilled and accrued revenues                               64,516               162,151
  Inventories, at average cost                                38,338                31,149
  Prepayments and other                                       15,619                33,148
                                                             223,306               327,710
DEFERRED CHARGES
  Unamortized regulatory assets
    Trojan investment                                        301,023               402,713
    Trojan  decommissioning                                  311,403               338,718
    Income taxes recoverable                                 217,366               217,967
    Debt reacquisition costs                                  29,576                32,245
    Energy efficiency programs                                77,945                58,894
    Other                                                     27,611                47,787
  WNP-3 settlement exchange agreement                        168,399               173,308
  Miscellaneous                                               26,997                13,682
                                                           1,160,320             1,285,314
                                                        $  3,245,597          $  3,354,151

                        CAPITALIZATION AND LIABILITIES
CAPITALIZATION
  Common stock equity
    Common stock, $3.75 par value per share,
     100,000,000 shares authorized,
     42,758,877 shares outstanding                      $    160,346          $    160,346
    Other paid-in capital - net                              466,325               457,412
    Retained Earnings                                        246,282               216,468
  Cumulative preferred stock
    Subject to mandatory redemption                           40,000                50,000
    Not subject to mandatory redemption                            -                69,704
  Long-term debt                                             890,556               805,814
                                                           1,803,509             1,759,744
CURRENT LIABILITIES
  Long-term debt and preferred stock due                      75,114                81,506
   within one year
  Short-term borrowings                                      170,248               148,598
  Accounts payable and other accruals                        132,064               104,612
  Accrued interest                                            15,442                19,084
  Dividends payable                                           14,956                15,702
  Accrued taxes                                               12,870                32,820
                                                             420,694               402,322
OTHER
  Deferred income taxes                                      525,391               549,160
  Deferred investment tax credits                             51,211                56,760
  Deferred gain on sale of assets                                  -               118,939
  Trojan decommissioning and transition costs                379,179               396,873
  Miscellaneous                                               65,613                70,353
                                                           1,021,394             1,192,085
                                                        $  3,245,597          $  3,354,151

The accompanying notes are an integral part of these consolidated balance sheets.

</TABLE>
                                      67

<PAGE>

               PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
 <S>                                                              <C>             <C>              <C>  <C>  
 FOR THE YEARS ENDED DECEMBER 31                                     1995            1994             1993
                                                                            (THOUSANDS OF DOLLARS)
 CASH PROVIDED (USED IN)
   OPERATIONS:
       Net Income                                                 $  92,787       $  106,118       $  99,744
       Non-cash items included in net income:
           Depreciation and amortization                            102,183           94,140          89,718
           Amortization of WNP-3 exchange agreement                   4,910            4,695           4,489
           Amortization of Trojan investment                         24,884           26,738          26,329
           Amortization of Trojan decommissioning                    13,336           11,220          11,220
           Amortization of deferred charges - other                  (1,777)           2,712           6,713
           Deferred income taxes - net                                1,714           25,720          60,721
           Other noncash revenues                                    (3,257)            (271)              -
           Regulatory disallowances                                  49,567                -               -
      Changes in working capital:
          (Increase) Decrease in receivables                        (11,539)         (29,678)        (68,717)
          (Increase) Decrease in inventories                         (7,189)           3,264          15,017
           Increase (Decrease) in payables                           13,196           (3,470)        (26,588)
          Other working capital items - net                           1,946          (20,754)         11,886
      Trojan decommissioning expenditures                           (10,927)          (3,360)         (1,625)
      Deferred charges - other                                       (9,472)          13,987          (3,331)
      Miscellaneous - net                                            12,128            7,374          15,869
                                                                    272,490          238,435         241,445
 INVESTING ACTIVITIES:
      Utility construction - new resources                          (49,096)         (87,537)        (28,666)
      Utility construction - other                                 (158,198)        (131,675)       (101,692)
      Energy efficiency programs                                    (25,013)         (23,745)        (18,149)
      Nuclear decommissioning trust deposits                        (16,598)         (11,220)        (11,220)
      Nuclear decommissioning trust withdrawals                      13,521                      -                -
      Other investments                                              (8,624)          (9,954)         (7,133)
                                                                   (244,008)        (264,131)       (166,860)
 FINANCING ACTIVITIES:
      Short-term debt - net                                          21,650           18,678          29,855
      Borrowings from Corporate Owned Life Insurance                  4,679           21,731               -
      Long-term debt issued                                         147,138           74,631         249,782
      Long-term debt retired                                        (69,445)         (29,882)       (266,986)
      Preferred stock retired                                       (79,704)         (20,000)         (3,600)
      Common stock issued                                                 -           41,055               -
      Dividends paid                                                (60,149)         (73,026)        (84,951)
                                                                    (35,831)          33,187         (75,900)
 INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                                                  (7,349)           7,491          (1,315)
 CASH AND CASH EQUIVALENTS AT THE BEGINNING
   OF YEAR                                                            9,590            2,099           3,414
 CASH AND CASH EQUIVALENTS AT THE END
   OF YEAR                                                        $   2,241       $    9,590       $   2,099
 Supplemental disclosures of cash flow information
    Cash paid during the year:
       Interest, net of amounts capitalized                       $  64,136       $   55,995       $   67,447
       Income taxes                                                  94,327           44,918           17,242
 
 The accompanying notes are an integral part of these consolidated statements.


</TABLE>

                                      68
<PAGE>


                Portland General Electric Company and Subsidiaries
                           Notes to Financial Statements


  Certain  information, necessary  for  a  sufficient  understanding  of  PGE's
 financial condition  and  results  of operations, is substantially the same as
 that disclosed by Portland General in  this  report.  Therefore, the following
 PGE information is incorporated by reference to  Part II of Portland General's
 Form 10-K on the following page numbers.

                                                                   PAGE

 Notes to Financial Statements
    Note 1A.   Summary of Significant Accounting Policies           38
    Note 2A.   Employee Benefits                                    40
    Note 4B.   Preferred Stock                                      44
    Note 5A.   Short Term Borrowings                                46
    Note 6A.   Long-Term Debt                                       47
    Note 7A.   Other Financial Instruments                          48
    Note 8A.   Fair Value of Financial Instruments                  48
    Note 9A.   Commitments                                          49
    Note 10A.  Jointly Owned Plant                                  51
    Note 11A.  Trojan Nuclear Plant                                 51
    Note 12A.  WNP-3 Settlement Exchange Agreement                  53
    Note 13A.  Regulatory Matters                                   53
    Note 14A.  Legal Matters                                        54

 Management's Discussion and Analysis of Financial
 Condition and Results of Operations                                26


                                      69
<PAGE>

NOTE 3A -INCOME TAXES


The following table shows the detail of taxes on income  and the items used in
computing the differences between the statutory federal income  tax  rate and
PGE's effective tax rate (thousands of dollars):

<TABLE>
<CAPTION>
                                            1995            1994            1993
 <S>                                      <C>             <C>             <C>
  Income Tax Expense
    Currently payable
       Federal                            $ 74,089        $ 40,680        $ 12,495
       State & local                         9,448           8,536           1,591
                                            83,537          49,216          14,086
    Deferred income taxes
       Federal                             (11,631)         24,856          53,718
       State & local                        (6,648)          4,811          11,763
                                           (18,279)         29,667          65,481
    Investment tax credit adjustments       (5,549)         (3,946)         (4,075)
                                          $ 59,709        $ 74,937        $ 75,492
  Provision Allocated to:
    Operations                            $ 89,523        $ 75,314        $ 73,740
    Other income and deductions            (29,814)           (377)          1,752
                                          $ 59,709        $ 74,937        $ 75,492
  Effective Tax Rate Computation:
   Computed tax based on statutory
   federal income tax rates applied
   to income before income taxes          $ 53,374        $ 63,369        $ 61,333
    Flow through depreciation                7,389           8,080           9,207
    Regulatory disallowance                  3,456               -               -
    State and local taxes - net              5,552           9,839           9,783
    State of Oregon refund                  (4,346)              -               -
    Investment tax credits                  (5,549)         (3,946)         (4,075)
    USDOE nuclear fuel assessment                -               -           5,050
    Excess deferred tax                       (700)           (767)         (3,419)
    Other                                     (533)         (1,638)         (2,387)
                                          $ 59,709        $ 74,937        $ 75,492
    Effective tax rate                       39.2%           41.4%           43.1%

</TABLE>

                                      70  

<PAGE>


 As of December 31, 1995 and 1994, the significant components of PGE's deferred
 income tax assets and liabilities were as follows (thousands of dollars):

<TABLE>
<CAPTION>
                                      1995                   1994
 <S>                                  <C>                    <C>
 DEFERRED TAX ASSETS
 Plant-in-service                    $   86,721        $   72,012
 Deferred gain on sale of assets              -            47,134
 Other                                   23,339            22,246
                                        110,060           141,392
 DEFERRED TAX LIABILITIES
 Plant-in-service                      (448,049)         (444,546)
 Energy efficiency programs             (30,314)          (23,024)
 Trojan abandonment                     (54,335)          (80,944)
 Replacement power costs                      -           (38,136)
 WNP-3 exchange contract                (60,489)          (68,698)
 Other                                  (42,470)          (39,826)
                                       (635,657)         (695,174)
 Less current deferred taxes                206             4,622
 Total                               $ (525,391)       $ (549,160)

</TABLE>

PGE has recorded deferred tax assets and liabilities for all temporary 
differences between the financial statement bases and tax bases of assets
and liabilities.

 Portland General has reached a settlement with the IRS on all issues regarding
 the 1985-1990 tax returns including  PGE's WNP-3 abandonment loss deduction.
 During 1996, Portland General will be filing amended  state returns to reflect
 appropriate audit adjustments.  The settlement did not have a material adverse 
 impact on  the  results  of current
 operations or cash flows of Portland General Electric.


NOTE 4A - COMMON STOCK

<TABLE>
<CAPTION>
                                          COMMON   STOCK             Other
                                       Number        $3.75 Par      Paid-In        Unearned
                                     of  Shares        Value        Capital      Compensation
                                                            (thousands of dollars)                  
<S>                                  <C>             <C>           <C>             <C>
                                                                              
December 31, 1992                    40,458,877      $151,721      $431,673        $(23,267)
 Redemption of preferred stock                -             -         2,130               -
 Repayment of ESOP loan and other             -             -           175           5,468
December 31, 1993                    40,458,877       151,721       433,978         (17,799)
 Sales of stock                       2,300,000         8,625        32,430               -
 Redemption of preferred stock                -             -         2,119               -
 Repayment of ESOP loan and other             -             -         1,481           5,203
December 31, 1994                    42,758,877       160,346       470,008         (12,596)
 Redemption of preferred stock                 -             -         3,093               -
 Repayment of ESOP loan and other              -             -           338           5,482
December 31, 1995                    42,758,877      $160,346      $473,439        $ (7,114)

</TABLE>


 COMMON STOCK
  Portland  General  is  the  sole  shareholder  of  PGE  common stock.  PGE is
 restricted, without prior OPUC approval, from paying dividends or making other
 distributions to Portland General to the extent such payment  or  distribution
   would   reduce  PGE's  common  stock  equity  capital  below  36%  of  total
 capitalization.   At  December 31, 1995, PGE's common stock equity capital was
 48% of its total capitalization.


                                      71 
<PAGE>