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, 1996





                        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

Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
                                                                      Name of each exchange
                                                        
TITLE OF EACH CLASS                                                   ON WHICH REGISTERED
<S>                                                                   <C>
  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,
       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 February 28,  1997 (based on the last
sales price on the New York Stock Exchange as of such date) was $2 billion.

The  number  of  shares  outstanding of the registrants' common  stocks  as  of
February 28, 1997 was:
                       Portland General Corporation               51,391,536
                       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 May 27, 1997.

                                       2
                                     <PAGE>

                                  DEFINITIONS


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

<TABLE>
<CAPTION>

Abbreviations
 OR ACRONYMS                        TERM
<S>                                 <C>
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
CUB.................................Citizen's Utility Board
CWL.................................Columbia Willamette Leasing, Inc.
DEQ.................................Oregon Department of Environmental Quality
EFSC................................Oregon Energy Facility Siting Counsel
Enron...............................Enron Corp
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

</TABLE>

                                     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............................ 16

      Item 2.  Properties.................................................. 17

      Item 3.  Legal Proceedings........................................... 19

      Item 4.  Submission of Matters to a Vote of Security
               Holders..................................................... 20

               Executive Officers of the Registrant........................ 21

PART II
      Item 5.  Market for Registrant's Common Equity and
               Related Stockholder Matters................................. 22

      Item 6.  Selected Financial Data..................................... 23

      Item 7.  Management's Discussion and Analysis of Financial
               Condition and Results of Operations......................... 24

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

      Item 9.  Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure......................... 55

PART III
      Item 10. Directors and Executive Officers of the Registrant.......... 55

      Item 11. Executive Compensation...................................... 55

      Item 12. Security Ownership of Certain Beneficial Owners
               and Management.............................................. 55

      Item 13. Certain Relationships and Related Transactions.............  55

PART IV
      Item 14. Exhibits, Financial Statement Schedules and
               Reports on Form 8-K......................................... 55

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

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

Appendix - PGE Financial Information....................................... 65

                                      4
                                    <PAGE>


                                    PART I



ITEM 1. BUSINESS



PORTLAND GENERAL CORPORATION - HOLDING COMPANY

                                    GENERAL

Portland  General  Corporation  (Portland  General or PGC), an electric utility
holding  company, was organized in December 1985.   Portland  General  Electric
Company (PGE  or  the  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.  (Holdings),  which
provides organizational separation for Portland General's nonutility businesses
(see page 16).  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,  1996,  Portland  General  and its subsidiaries had 2,649
employees  compared  to  2,562  and  2,536  at  December  31,  1995  and  1994,
respectively.


                                PROPOSED MERGER

During 1996 Portland General entered into an Amended and Restated Agreement and
Plan  of Merger (Merger Agreement) with Enron Corp  (Enron)  and  Enron  Oregon
Corp. (New  Enron), a wholly-owned subsidiary of Enron.  Under the terms of the
Merger Agreement  Portland  General will merge into New Enron (Merger) and each 
share of
the common stock of Portland  General  will  be converted into one share of the
common stock of New Enron. Immediately prior to the consummation of the Merger,
Enron will merge into New Enron for the purpose  of  reincorporating  Enron  in
Oregon (Reincorporation Merger).  The Merger Agreement provides that if certain
regulatory  reforms  are enacted, the structure of the transaction contemplated
by the Merger Agreement  will  be  revised  to  eliminate  the  Reincorporation
Merger.   The Merger has been approved by both companies'  boards  of
directors, shareholders, and the FERC.   However,  before  the  Merger  can be 
completed, approvals  and  consents  must  be  obtained from the NRC and
the OPUC (see Item 7., Management's Discussion and Analysis of Financial 
Condition and Results of Operations).

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  1996  its  service-area  population  was  approximately
1.4 million, constituting  approximately  44%  of  the  state's population.  At
December 31, 1996 PGE served approximately 668,000 customers.

As of December 31, 1996, PGE had 2,587 employees.  This compares  to  2,533 and
2,502 PGE employees at December 31, 1995 and 1994, respectively.

                                       5
                                     <PAGE>


                              OPERATING REVENUES

PGE  serves  a  diverse retail customer base.  Residential customers constitute
the largest customer class and  account for 40% of the retail demand and 44% of
retail revenues.   Residential  demand  is  highly  sensitive to the effects of
weather.   Commercial  customers consume 39% and industrial  customers  17%  of
retail revenues.  Since  1994 commercial demand has grown by nearly 10%, making
this the Company's most rapidly  growing customer class. Despite a 20% increase
in sales to high technology customers  during 1996, industrial demand decreased
nearly  3%  in  1996  due  to continued production  cut  backs  by  both  paper
manufacturers and metal fabricators.  The commercial and industrial classes are
not  dominated  by  any  single  industry.   While  the  20  largest  customers
constitute 20% of retail demand,  they represent 10 different industrial groups
including   paper   manufacturing,   high    technology,   metal   fabrication,
transportation equipment, and health services.   No  single customer represents
more than 5% of PGE's retail load.

Wholesale  revenues  continue  to  make a significant contribution  to  Company
revenues providing over 17% of total operating revenues for 1996.  PGE actively
markets wholesale power throughout the  western United States and has more than
tripled its level of sales since 1994.  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.

Sustained  revenue growth will be more challenging  in future periods.   During
1996 PGE worked  with  the OPUC staff and other interested parties to develop a
plan that addressed significant savings resulting from 
lower natural gas and purchased  power  prices.  This resulted in a $55 million
annual rate reduction effective December 1, 1996.  Also,  in a move to position
for  the  future,  PGE  has launched several experimental programs  that  allow
certain of its largest customers to acquire electricity at market based prices.
These programs resulted in annual rate reductions of $15 million.

As the electric utility industry  moves  toward  deregulation  retail customers
will  ultimately have the ability to purchase energy from any electric  utility
or power  supplier.   Consequently  PGE  will have to compete with other energy
suppliers for customers within its traditionally  exclusive  service territory.
Increased  competition is expected to result in lower prices and  less  revenue
per customer.

While PGE's  participation in  the wholesale 
marketplace  has  resulted in significant increases  in  wholesale  revenues,
primarily from short-term transactions, these revenues are also vulnerable to 
industry changes.  FERC mandated open access to transmission  facilities, the 
advent of NYMEX electricity contracts, and
the entrance of power marketers,  brokers,  and independent power producers has
resulted in increased competition, reduced margins and increased risks 
associated with all transactions, especially the long-term ones.

                                         6
                                       <PAGE>

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>
                                        1996         1995       1994
<S>                                     <C>          <C>        <C>
Operating Revenues (thousands)
     Residential                        $  426,777   $379,485   $360,651
     Commercial                            345,646    335,607    315,156
     Industrial                            149,289    153,347    147,347
     Public Street Lighting                 11,108     11,311     11,205
         Tariff Revenues                   932,820    879,750    834,359
         Accrued (Collected) Revenues      (27,142)    (2,973)    10,644
     Retail                                905,678    876,777    845,003
     Wholesale                             193,726     94,967    105,911
     Other                                  10,427      9,884      8,041
         Total Operating Revenues       $1,109,831   $981,628   $958,955
Kilowatt-Hours Sold (millions)
     Residential                             7,073      6,622      6,704
     Commercial                              6,475      6,285      6,142
     Industrial                              3,909      4,056      3,863
     Public Street Lighting                    102        102         93
        Retail                              17,559     17,065     16,802
        Wholesale                           10,188      3,383      2,701
           Total kWh Sold                   27,747     20,448     19,503
</TABLE>


For  additional  information  on  year-to-year  revenue  trends,  see  Item 7.,
Management's  Discussion and Analysis of Financial  Condition  and  Results  of
Operations.

                                  REGULATION

The OPUC, a three-member  commission  appointed by the Governor, 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 the 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 and in early  1996  approved the Trojan Decommissioning Plan.
Approval of the Trojan Decommissioning Plan by the NRC and EFSC has allowed PGE
to  commence  decommissioning  activities.   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.


                                      7

                                    <PAGE>


                           OREGON REGULATORY MATTERS

INDUSTRY RESTRUCTURING
Historically  the  OPUC  has approached the issues of retail competition on  an
informal, utility-by-utility  basis,  rather  than through generic, broad-based
proceedings.   However,  in  June  1996 the OPUC began  an  investigation  into
restructuring  the state's electric utility  industry  by  meeting  with  state
utility executives,  customers,  environmental  advocates  and other interested
parties to discuss how competition in the generation of electric power could be
introduced and when to allow customers access to competing power suppliers.

Four specific issues were the focus of subsequent meetings:  how an electricity
distribution company would operate and be regulated; how energy  efficiency and
other  public  purpose  programs  will  be offered and funded in a restructured
environment;  what  treatment  is  appropriate  for  utility  investment  in  a
generating plant that is no longer economic;  and  whether vertical integration
of  electrical  utilities should be discouraged or prohibited.   The  OPUC  has
stated its intent  to use these discussions to prepare itself for action on the
competitive initiatives  that can be implemented under its direct authority and
to work with the legislature in assessing proposals for restructuring.

The staff of the OPUC has  recommended that the commission open a proceeding to
develop a policy for the treatment  of transition costs for electric utilities.
Transition or stranded costs are costs  a  utility would not recover in a fully
competitive  environment. The proposed issues  to  be  discussed  include:  how
should a utility's  transition costs be determined; what portion of these costs
should be recovered from  customers;  and  what types of charges should be used
for transition cost recovery.  Discussions have  begun  on an informal basis to
sort  through issues and establish consensus before moving  to  a  more  formal
process  of written comments and a proposed order.

MARGINAL COST
In February 1997 the OPUC held a prehearing conference to establish a framework
for investigating  methods  for  estimating  the  marginal  cost of service for
electric  utilities.   Marginal  costs  are  the  cost of adding an  additional
customer to a utility system.  This investigation was  prompted  by  challenges
from  the  CUB  that  current  methods  assign too much cost to the residential
customer class.  The OPUC anticipates adoption  of  an order in 1997.  Specific
marginal  cost estimates and rate spread and rate decisions  will  be  made  in
subsequent rate cases and other proceedings as needed.

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

                Retail Price          CPI

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
1996            5.31                  158.6

1996 RATE SETTLEMENT
During 1996  PGE  worked  with  the  OPUC staff and other interested parties to
develop a plan for dealing with significant  savings  which resulted from lower
natural gas and power purchase prices.  This decision resulted  in  $55 million
in  annual  rate  reductions  that began December 1, 1996.  The rate reductions
will result in an after tax earnings  decrease of approximately $32 million for
1997.   In addition, the order incorporated  $15  million  in  rate  reductions
previously  approved by the OPUC resulting in total 1997 rate reductions of $70
million.

TROJAN INVESTMENT RECOVERY
In April 1996  a  circuit  court  judge in Marion County, Oregon found that the
OPUC  could  not  authorize  PGE  to collect  a  return  on  its  undepreciated
investment in Trojan contradicting  a November 1994 ruling from the same court.
The ruling was the result of an appeal  of  PGE's 1995 general rate order which
granted  PGE  recovery  of,  and  a  return on, 87  percent  of  its  remaining
investment in Trojan.

The November 1994 ruling, by a different  judge  of  the same court, upheld the
Commission's 1993 Declaratory Ruling (DR-10).  In DR-10  the   OPUC  ruled that
PGE  could  recover  and  earn a return on its undepreciated Trojan investment,
provided certain conditions  were  met.  The Commission relied on a 1992 Oregon
Department of Justice opinion issued  by  the Attorney General's office 


                                      8

                                    <PAGE>


stating
that the Commission had the authority to set  prices  including recovery of and
return on investment in plant that is no longer in service.

The 1994  ruling was appealed to the Oregon Court of Appeals and stayed pending
the appeal of the Commission's March 1995 order.  Both  PGE  and  the OPUC have
separately appealed the April 1996 ruling which was combined with the appeal of
the November 1994 ruling at the Oregon Court of Appeals.

For further information regarding the legal challenges to the OPUC's  authority
to grant recovery for PGE's Trojan investment see Item 3, Legal proceedings.

LEAST COST ENERGY PLANNING
In  August 1996 the OPUC acknowledged PGE's 1995-1997 Integrated Resource  Plan
(IRP).  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.
The 1995-1997 IRP reflects:  the  recognition  that  the  geographic  area  PGE
presently  serves  no longer defines its customer base; the accelerated pace of
technological change;  transition  of  a  key  fuel,  natural  gas, to a market
commodity; and the development of a vibrant electricity marketplace.   The  IRP
outlines  a  strategy  which  emphasizes:  (1)  the  purchase  of energy in the
marketplace  at  competitive  prices,  (2) acquisition of energy efficiency  at
reduced levels while maintaining market  presence  and  capability for possible
future increases when justified, (3) economical use of existing  assets and (4)
the  use  of  other  supply-side  actions,  including  acquisition of renewable
resources.

RESIDENTIAL EXCHANGE PROGRAM
The Regional Power Act (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
created the residential exchange program which 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  $58
million for calendar year 1996.  In  its  1996  rate  case,  the  BPA initially
proposed  a  $33 million annual reduction in the exchange benefit beginning 
October 1, 1996.   However,
recent congressional  legislation  partially  restored  the RPA exchange
benefit so
that the reduction was only $14 million for the BPA's 1997  fiscal  year.   The
amount of future residential exchange benefits is among the subjects of current
regional  discussions regarding BPA's role in the region.  PGE and the BPA have
engaged in  negotiations about the possibility of a BPA buy out and termination
of the exchange program.

DECOUPLING
An experimental  decoupling  program  adopted  by  the OPUC set monthly revenue
targets  associated with retail loads.  To the extent  weather-adjusted  retail
revenues exceeded  or fell short of target revenues, PGE will refund or collect
the difference from customers over an 18-month period. At the end of 1996 PGE's
estimated liability  to customers was $5 million.  The program expired at the
end of 1996.

ENERGY EFFICIENCY
PGE has promoted the efficient  use of electricity for over two decades and has
invested over $80 million in Demand Side Management (DSM) measures.

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 programs  more toward customer needs and wants.  PGE is
also  focusing on developing a regional  solution  to  funding  and  delivering
energy efficiency in a competitive environment.

                                         9
                                       <PAGE>

BONDABLE CONSERVATION INVESTMENT
In late  1996,  the  OPUC  designated  $81  million  of PGE's energy efficiency
investment  as  Bondable  Conservation Investment, pursuant  to  recent  Oregon
legislation, and authorized  the  issuance of conservation 
bonds collateralized
by an OPUC assured future revenue stream.   Subsequently,  PGE issued a 10 year
conservation  bond  which is expected to provide an estimated  $21  million  in
present value savings to customers while granting PGE immediate recovery of its
energy  efficiency  program   expenditures.  The OPUC assured future  revenues  
collected  from
customers will pay the debt service obligations on the bond.


                           COMPETITION AND MARKETING

GENERAL
Recent progress toward greater  customer choice and direct access to customers
by all competitors has been dramatic  and  underscores the theme of competition
and prospective deregulation in the electric  utility  industry.   The National
Energy  Policy  Act  of  1992 (Energy Act) granted the FERC authority to  order
wholesale wheeling between  utilities.   In  1996  the  FERC  issued  Order 888
requiring  non-discriminatory  open access transmission by all public utilities
that own interstate transmission.   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  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.   In  1996 the OPUC began an  investigation  into  restructuring  the
state's electric  utility  industry  by  meeting with state utility executives,
customers, environmental advocates and other  interested parties.  The Governor
of Oregon has issued objectives for restructuring and it is expected that 
several bills proposing retail competition will be introduced during the 1997 
Oregon Legislative session.


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 regulated with competition introduced slowly, while
industrial  service may see the 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.  Portland
General is preparing to meet  varying levels  of  competition  from traditional
and non-traditional sources in the various retail markets within  PGE's service
territory  as  well as throughout the western United States.  Much of  Portland
General's growth  potential  may  no  longer  be  limited  by service territory
boundaries or activities traditionally subject to regulation.  Portland General
has  begun  to  look beyond traditional boundaries for opportunities  to  serve
customers with energy  related  products  and services allowable in the current
regulated markets and the emerging unregulated  markets.  For example, Portland
General, through a wholly-owned non-regulated subsidiary  was recently selected
to  be  the  City of Palm Springs new energy services partner  in  a  strategic
alliance designed to help the city develop a municipal utility.

PGE  will  continue  to deliver quality electric  service  
within the core  markets  that  make  up  PGE's  current service territory
by  focusing  on
traditional values like reliability,  cost  management,  resource  acquisition,
effective energy efficiency services, safe operations and responsive  customer-
oriented  service.   In  addition,  Portland  General, through PGE and new non-
regulated  subsidiaries,  will continue to develop  and  provide  an  array  of
products and services to PGE's existing and prospective customers.  This 
includes
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.

                                     10
                                   <PAGE>

PGE has implemented several experimental tariff  schedules  during the past two
years that have allowed certain of its larger customers to acquire  electricity
at  market  based  prices.  Eligible customers have the opportunity to purchase
energy at prices that  reflect  actual  market  conditions.   The  tariffs  are
presently limited to a combined 250 MW of participating customer load or 12% of
total PGE retail load.

PGE  is  evaluating  a  power delivery service tariff which, if approved by the
OPUC,  will allow large industrial  and  commercial  customers  to  purchase  a
portion of their electricity needs from any provider.

In November  1996  Portland General and Enron committed to submit to
the OPUC within 60  days  of the Merger completion, a plan to open PGE's 
service area to
competition.   The plan will  allow  residential,  commercial  and  industrial
customers to choose  their  energy  provider  and  will include a proposal to
separate  PGE  generating  facilities  from  its transmission and  distribution
system.  In addition, this plan will include a proposal for the 
treatment of transition or stranded costs.  This  action  will position the  
generating side of the
organization to compete more effectively in an open marketplace, and will allow
the distribution side to focus on customer  service.

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 been an active
participant.   Wholesale sales continue to contribute  to
Company revenues.   During  1996  PGE's  wholesale revenues increased 104% over
1995 levels with wholesale activities accounting for 18% of total revenues and  
37% of total sales.
The advent of NYMEX electricity contracts and broker markets has increased 
price
discovery.  This, along with the entrance of numerous power marketers, brokers,
and  independent  power  producers  has  reduced margins significantly and 
increased risks.  During 1996, the average price of PGE's wholesale sales 
decreased 33%.

The FERC has taken steps to provide a framework  for  increased  competition in
the  electric  industry.   In  1996  the  FERC issued Order 888 requiring  non-
discriminatory  open  access transmission by  all  public  utilities  that  own
interstate transmission.   The  final  rule  requires utilities to file tariffs
that offer others the same transmission services  they provide themselves under
comparable  terms and conditions.  This rule also allows  public  utilities  to
recover stranded  costs in accordance with the terms, conditions and procedures
set forth in Order  888.   The  ruling  requires  reciprocity  from municipals,
cooperatives  and federal power marketers receiving service under  the  tariff.
The new rules became  effective  July  1996  and  are  expected  to  result  in
increased  competition,  lower  prices  and  more  choices  to wholesale energy
customers.

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.

PGE, along with a number of other public and  private  Northwest  utilities and
the  BPA  have  signed  a  memorandum of understanding to create an independent
transmission grid operator (IndeGo).   Under the agreement, IndeGo would assume
responsibility for day to day operation  of  main  transmission lines which are
directly owned by the various parties.  The parties would maintain ownership of
the lines, as well as responsibility for repair and upgrades.

                                 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.  The demand for energy within PGE's service territory
has experienced an average annual growth rate of approximately  2.5%  over  the
last  10  years.  Wholesale demand has experienced significant increases.  In
1996 alone PGE's wholesale sales increased by over 200%.  PGE has  relied
increasingly  on short-term  purchases  to  supplement  its  existing  base  of
generating resource  and  long-term  power  contracts to meet its energy needs.
Short-term purchases include spot market, or  secondary,  purchases  as well as
firm purchases for periods less than one year in duration.  The availability of
short-term  firm purchase agreements and PGE's ability to renew these contracts
on a month by  month  basis  has  enabled  PGE to minimize risk and enhance its
ability  to  provide  reliable  low  cost energy  to retail 

                                      11
                                    <PAGE>

customers.  The 
emergence of NYMEX  electricity futures contracts  and  open  transmission  are
expected to place competitive pressures  on  the  price  of short-term power as
well  as  enhance  its availability.  Northwest hydro conditions  also  have  a
significant impact on  regional  power  supply.  Plentiful water conditions can
lead to surplus power and the economic displacement  of  more expensive thermal
generation.

GENERATING CAPABILITY
PGE's existing hydroelectric, coal-fired and gas-fired plants are important 
resources
for  the  Company,  providing 2,119 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 1996 generation  from  PGE's
hydroelectric facilities met 9% of the Company's total load.  These facilities,
operate under federal licenses,  which will be up for renewal between the years
2001 and 2006.

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 30 years, to purchase 675 MW, primarily
hydro-generated,  from other Pacific Northwest utilities.  In addition, PGE has
long-term exchange  contracts  with  summer-peaking Southwest utilities to help
meet its winter-peaking requirements.  These resources, along with short-term 
contracts, provide PGE with sufficient firm capacity to serve its peak loads.

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            28,693                28.8
1996            31,125                29.3
1997            27,490                27.4
1998            29,671                28.1
1999            29,234                27.6
2000            28,500                26.3
2001            25,340                24.3

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 electric system.  During the
last few years, the area covered by WSCC has  become  a dynamic marketplace for
the trading of electricity.  This area, which includes  11  Western  states, is
very  diverse in climates.  Peak loads occur at different times of the  year in
the different regions within the WSCC area.  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  nearly  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,  even assuming  adverse  water  conditions.
Favorable  water  conditions  have  the  ability  to  further  increase  energy
supplies.

This generating capacity and the resultant wholesale power in the WSCC 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.

TRADING FLOOR OPERATIONS
PGE's  trading   floor  operation integrates  the  Company's  wholesale
trading, fuels, energy  supply, power  operations and price risk management 
functions.  The trading floor activities seek to enhance PGE's low-cost  supply
of energy to meet retail and wholesale loads.

                                       12
                                     <PAGE>

1996 Actual Power Sources pie chart:
(megawatt hours)

Combustion Turbines: 7% (1,864,000)
PGE Hydro: 9% (2,702,000)
Coal:  9% (2,657,000)
Purchased Power: 75% (21,813,000)

1997 Forecasted Power Sources pie chart:
(megawatt hours)

PGE Hydro:  9% (3,048,000)
Coal: 9% (3,390,000)
Combustion Turbines: 7% (2,330,000)
Purchased Power: 73% (23,889,000)

YEAR IN REVIEW
PGE  generated  25% of its load requirements in 1996 compared with 36% in 1995.
Firm and secondary purchases met the remaining load.  Low gas prices, increased
competition, and abundant hydro power resulting from above  average  
precipitation  in  the  Columbia  River basin
contributed   to  the  availability  of  inexpensive  power  and  the  economic
displacement of more expensive thermal generation.

During 1996, PGE's  peak  load  was  3,888  MW,  of  which  49% was met through
economical  short-term  purchases.   PGE's  firm  resource capacity,  including
short-term purchase agreements totaled approximately  4,759 MW  as of December
31, 1996.

1997 OUTLOOK
The early predictions of water conditions indicate they will be above normal in
1997  but  not  quite  as  favorable as those experienced in 1996.  Efforts  to
restore salmon runs on the Columbia  and Snake rivers may reduce hydro 
generation which would adversely affect the supply and
price of purchased power.

RESTORATION OF SALMON RUNS
Several species of salmon found in the  Snake  River,  a major tributary of the
Columbia  River,  have  been  granted  protection under the Federal  Endangered
Species  Act  (ESA).  In an effort to help  restore  these  fish,  the  federal
government has reduced the amount of water allowed to flow through the turbines
at the hydro electric  dams  on  the  Snake  and Columbia River while the young
salmon are migrating to the ocean.  This has resulted  in  reduced  amounts  of
electricity  generated at the dams.  Favorable hydro conditions helped mitigate
the affect of  these actions in 1996.  Similar conditions are expected in 1997.
If this practice  is  continued  in  future  years  it  could  mean  less water
available in the fall and winter for generation when demand for electricity  in
the  Pacific Northwest is highest.  Although PGE does not own any hydroelectric
facilities  on  the  Columbia  and  Snake  rivers, it does buy large amounts of
energy from the agencies which do.

Several other species of salmon have been proposed  for  protection  under  the
ESA.   Actions taken to protect these species will not be in affect for several
years.  It is unclear how these potential ESA listings will impact future hydro
operations.

PGE's hydroelectric  projects  are  located  on  rivers  with depressed but not
endangered  salmon  runs.   PGE biologists are working with state  and  federal
natural resource agencies to  ensure PGE's hydro operations are compatible with
the survival and enhancement of  these  populations  of  salmon.   PGE does not
expect that any actions will be taken that will have an adverse impact  on  PGE
hydro operations in the foreseeable future.

                                     13
                                   <PAGE>


                                  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 purchase coal for Boardman through the year 2000.  
The agreement
does not require a minimum  amount  of  coal  to  be purchased, allowing PGE to
obtain coal from other sources.  During 1996 PGE did  not take deliveries under
this contract but purchased coal under favorable short-term  agreements.   Coal
purchases in 1996 contained less than 0.4% 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 Montana and Wyoming, 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 Colstrip 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  Centralia  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>


NATURAL GAS

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

BEAVER
PGE owns 90% of the Kelso-Beaver  Pipeline  which  directly connects its Beaver
generating station to Northwest Pipeline, an interstate  gas pipeline operating
between British Columbia and New Mexico.  During 1996, PGE had access to 76,000
MMBtu/day of firm transportation capacity, enough to operate  Beaver  at  a 70%
load factor.

COYOTE SPRINGS
The  Coyote  Springs  generating  station  utilizes  41,000  MMBtu/day  of firm
transportation  on  three  interconnected  pipeline  systems  accessing the gas
fields in Alberta, Canada.  Coyote Spring's two-year gas
supply  contracts  expire  in  October 1997.  Gas supplies and transportation
capacity  are  sufficient  to  fully fuel  Coyote  Springs.   Minimum  purchase
requirements represent 75% of the plant's capacity.

                                       14
                                     <PAGE>


                             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's  current and historical  operations  are  subject  to  a  wide  range  of
environmental  protection  laws  covering   air and water quality, noise, waste
disposal, and other environmental issues.  PGE  is  also subject to the Federal
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,  cleanup 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.

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 cleanup effort
is considered complete at several sites  which are awaiting consent orders from
the appropriate regulatory agencies.  These  and  future  cleanup costs are not
expected to be material.

AIR/WATER QUALITY
The Clean Air Act (Act) requires significant reductions in  emissions of sulfur
dioxide,  nitrogen  oxide and other contaminants over the next  several  years.
Coal-fired plant operations  will  be  affected  by these emission limitations.
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.

Boardman was assigned  sufficient  emission  allowances  by  the EPA to operate
after the year 2000 at a 60% to 67% capacity factor without having  to  further
reduce  emissions.   If  needed PGE will purchase additional allowances to meet
excess capacity needs.  Centralia  will  be required to reduce emissions by the
year  2000.  The owner-operator utility has  recommended  the  installation  of
scrubbers.  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 2001.  The
water pollution control facilities permit for Boardman  expired  in  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 of Bethel 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.

                                      15
                                    <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  engaged  in  leveraged  leasing,
administrative  services  for  electric futures trading, telecommunications and
non-regulated energy services.  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)
CWL acquires and leases capital equipment on a leveraged  basis.   During 1996,
CWL  made  no  new investments in leveraged leases.  CWL's investment portfolio
consists of six  commercial  aircraft, two container ships, approximately 5,500
containers, coal, tank, and hopper  railroad  cars,  a truck assembly plant, an
acid treatment facility, and a wood chipping facility, totaling $151 million of
net investment.  No new investments are expected or planned for the foreseeable
future.

                                       16
                                     <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

                                      17
                                    <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               54
  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%
                                                                 2,119
</TABLE>


PGE holds licenses under the Federal Power Act for its hydroelectric generating 
plants.  Five licenses expire  during  the
years 2001 to 2006.  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 Trojan closure, PGE was granted a possession-only  license
amendment by the  NRC.   In  early 1996 PGE received NRC approval of its Trojan
decommissioning plan.  See Note  12,  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.

                                      18
                                    <PAGE>

ITEM 3. LEGAL PROCEEDINGS



                                  NONUTILITY

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.

                                    UTILITY

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

The settlement by PGE and SCE of this case has been approved by the FERC and 
the California Public Utility Commission and needs no further approvals.
The settlement terminates a long-term  contract  and  releases all
previous  claims  asserted in the legal dispute.   SCE's annual payments  under
the settlement will  be  $15 million from 1997 through 1999 and $32
million from 2000 through 2002.  

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.  This case remains inactive.

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.

                                      19
                                    <PAGE>

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  $1.4  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 and on December 27, 1996 , the Ninth Circuit Court
of Appeals reversed its earlier  decision,  ruling  in favor of Columbia Steel.
The case has been remanded to the US District Court for  a new determination of
damages for service 
rendered from early 1989 to July 1991. 
PGE has asked for reconsideration by the Ninth Circuit.

CITIZEN'S UTILITY BOARD OF OREGON V. PUBLIC UTILITY COMMISSION  OF  OREGON  AND
UTILITY  REFORM  PROJECT  AND  COLLEEN  O'NEIL  V. PUBLIC UTILITY COMMISSION OF
OREGON, MARION COUNTY OREGON CIRCUIT COURT

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.

In PGE's 1995 general rate case, the OPUC  issued  an  order  granting PGE full
recovery of Trojan Decommissioning costs and 87% of its remaining investment in
the plant.  The URP filed an appeal of the OPUC's order.  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.

The CUB also filed an appeal challenging the portion of the OPUC's order issued
in PGE's 1995 general rate case that authorized 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.

On April 4, 1996 a circuit court  judge  in  Marion  County,  Oregon rendered a
decision  that  contradicted a November 1994 ruling from the same  court.   The
1996 decision found  that  the OPUC could not authorize PGE to collect a return
on its undepreciated investment  in  Trojan currently in PGE's rate base.  Both
the 1994 and 1996 circuit court decisions  have  been  appealed  to  the Oregon
Court of Appeals where they have been consolidated.
                                    
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


At  a special shareholder meeting on November 12, 1996 in Portland, Oregon  the
shareholders   of   Portland  General's  common  stock  voted  to  approve  the
transactions contemplated  by  the  Merger  Agreement between Portland General,
Enron Corp, and Enron Oregon Corp.  The results of voting were as follows:

               FOR             AGAINST     ABSTAIN
               39,250,549      716,681     505,289

                                      20
                                    <PAGE>

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


<TABLE>
<CAPTION>
NAME                              AGE   BUSINESS EXPERIENCE

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

Ken L. Harrison                   54    Appointed to current position of
 Chairman of the Board, Chief           Chairman of the Board and Chief
 Executive Officer                      Executive Officer on December 1, 1988
 President                              and President of Portland General since
                                        August 4, 1992.  Served as President of
                                        Portland General Electric from June 1987
                                        until September 1989.  Reappointed
                                        President of PGE on January 1, 1996.

Alvin Alexanderson                49    Appointed to current position on
 Senior Vice President                  December 12, 1995.  Served as Vice
 General Counsel and Secretary          President, Rates and Regulatory Affairs
                                        from February 1991 until appointed to
                                        current position.  Previously served
                                        as President of Portland General
                                        Exchange from May 1988 until February
                                        1991.

David K. Carboneau                50    Appointed  to  current  position  on 
 Vice President                         January  28, 1997.  Served as Vice
 Utility Service and                    President, Information Technology
 Telecommunications                     from January 1, 1996 until appointed
                                        to current position. Previously
                                        served as Vice President, Thermal
                                        and Power Operations from September 
                                        1995 to January 1996.  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.

Joseph M. Hirko                   40    Appointed to Senior Vice President on
 Senior Vice President                  September 12,  1995.  Has served as 
 Chief Financial Officer                Vice President-Finance, Chief Financial
                                        Officer and Chief Accounting 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               55    Appointed to current position on October
 Vice President - PGC/PGE               4, 1989.  Previously served as General
 Human Resources                        Manager, Information Services of PGE
                                        until appointed to current position.



PGE

Richard E. Dyer                   54    Appointed  to  current  position on
 Senior Vice President                  September 12, 1995.   Previously  served
 Power Supply                           as  Vice President and General Manager
                                        of Power Resources and Marketing from
                                        August 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                   45    Appointed to current position  on 
 Executive Vice President               November 5, 1996.  Served as Senior Vice
 Chief Operating Officer                President,  Energy  Services  from 
                                        September 1995 until appointed to 
                                        current  position.  Served  as  Vice 
                                        President, Distribution and Power 
                                        Production  from January 1990 to 
                                        September 1995.  Served as General
                                        Manager, Hydro Production and 
                                        Transmission from September 1989 to
                                        January 1990.

Pamela Lesh                       40    Appointed to current position on 
 Vice President                         November 5, 1996.  Served as Director of
 Rates and Regulatory Affairs           Marketing Strategy from May 1996 until
                                        appointed to current position.  Served
                                        as Director of Rates and Regulatory
                                        Affairs from January 1992 to May 1996.

Frederick D. Miller               55    Appointed to Senior Vice President on 
 Senior Vice President                  November 5, 1996.  Served as Director of
 Public Affairs and Corporate           Executive Department, State of Oregon,
 Services                               from 1987 until appointed to Vice
                                        President, Public Affairs and Corporate
                                        Services on October 15, 1992.


<FN>

(*)  Officers are listed as of January 31, 1997.   The  officers are elected to
serve for a term of one year or until their successors
       are elected and qualified.

</FN>

</TABLE>

                                      21
                                    <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 1996 and 1995.

<TABLE>
<CAPTION>
                             1996                           1995
QUARTER          1ST     2ND     3RD     4TH     1ST     2ND     3RD     4TH
<S>              <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
High             31-1/2  30-7/8  38-5/8  44-3/4  20-7/8  23-1/4  25-3/4  29-1/4

Low              28-1/2  27-3/4  28      37-5/8  18-7/8  20-1/4  21-5/8  25-1/4

Closing price    30-3/4  30-7/8  38-3/8  42      20-7/8  22-3/8  25-5/8  29-1/8

Cash dividends
declared (cents) 32      32      32      32      30      30      30      30

</TABLE>

The  approximate  number of shareholders of record  as  of  December  31,  l996
was 38,189.


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         1996           1995
                       First           $14,966        $11,545
                       Second           17,959         11,545
                       Third            56,014         13,682
                       Fourth           16,248         13,684

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.

                                        22
                                      <PAGE>

ITEM 6.     SELECTED FINANCIAL DATA



PORTLAND GENERAL CORPORATION

<TABLE>
<CAPTION>
                                                FOR  THE  YEARS  ENDED DECEMBER 31
                               1996            1995            1994         1993         1992
                                       (thousands of dollars except per share amounts)
<S>                            <C>             <C>             <C>          <C>          <C>   
Operating Revenues             $1,111,816        $983,582        $959,409     $946,829     $883,266
Net Operating Income              224,559         195,576         154,296      158,181      163,500
Income from Continuing
 Operations                       129,536{1}       81,036{2}       93,058       89,118       89,623
Gain from Discontinued                                                                      
 Operations{3}                          -               -           6,472            -            -
Net Income                       $129,536{1}     $ 81,036{2}     $ 99,530     $ 89,118     $ 89,623
Earnings per Average
 Common Share
  Continuing Operations            $ 2.53          $ 1.60          $ 1.86       $ 1.88       $ 1.93
  Discontinued Operations{3}            -               -             .13            -            -

                                   $ 2.53          $ 1.60          $ 1.99       $ 1.88       $ 1.93
Dividends Declared
 per Common Share                  $ 1.28          $ 1.20          $ 1.20       $ 1.20       $ 1.20

Total Assets                   $3,583,249      $3,448,017      $3,559,271   $3,449,328   $3,140,625
Long-Term Obligations{4}          963,042         930,556         885,814      912,994      937,938

</TABLE>
PORTLAND GENERAL ELECTRIC COMPANY

<TABLE>
<CAPTION>
                     FOR THE YEARS ENDED DECEMBER 31
                           1996            1995            1994         1993         1992
                                                  (thousands of dollars)
<S>                       <C>              <C>             <C>          <C>          <C>
Operating Revenues         $1,109,831        $981,628        $958,955     $944,531     $880,098
Net Operating Income          224,746         195,186         153,208      154,200      160,037
Net Income                    155,915          92,787{2}      106,118       99,744      105,562

Total Assets               $3,398,212      $3,245,597      $3,354,151   $3,226,674   $2,920,980
Long-Term Obligations{4}      963,042         930,556         855,814      872,994      887,938

<FN>

NOTES TO THE TABLES ABOVE:
1 Includes $18 million charge for merger costs
2 Includes a loss of $50 million from regulatory disallowances.
3 Reflects the results of discontinued real estate operations.
4 Includes  long-term debt, preferred stock subject  to  mandatory  redemption
requirements and long-term capital
   lease obligations.

</FN>

</TABLE>

                                       23
                                     <PAGE>

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


RESULTS OF OPERATIONS

                                    GENERAL

Portland General  reported  1996  earnings  of $130 million or $2.53 per share,
compared to $81 million or $1.60 per share for 1995.  1996 results include  $18
million of after-tax merger related costs. 1995  earnings 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.

Excluding  the  effect of merger related costs  and  regulatory  disallowances,
income from continuing  operations  would  have  been  $148  million  and  $131
million, respectively.

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.

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

                Operating             Net
                Revenue               Income

1992            883                   90
1993            947                   89
1994            959                   100
1995            984                   81
1996            1112                  130

PGE Electricity Sales graph:
(Billions of kWh)
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

1996            Residential           7.1
                Commercial            6.6
                Industrial            3.9
                Wholesale             10.2

1996 COMPARED TO 1995
Strong operating  earnings  reflected  the benefits of low variable power costs
due  to  optimal hydro conditions and a competitive  wholesale  market.   Sales
growth due  to  a  growing  retail  customer base, along with favorable weather
conditions contributed to new record  peak loads for both the summer and winter
periods.

Retail revenues exceeded the prior year  by  $29  million,  largely due to rate
increases accompanied by 3% higher energy sales. These increases were partially
offset by revenue refund provisions for SAVE adjustments and certain state tax
benefits.

  Favorable  weather  conditions  contributed  to  higher  energy sales in both
residential and commercial classes.   In January and February mean temperatures
were colder than average by 2.6 and 4.5 degrees respectively,  and temperatures
in  August  and  September  were  warmer  than average  by 3.1 and 3.2  degrees
respectively.

Industrial loads declined 3.8% due to weak  demand from paper manufacturers and
metals fabricators despite benefiting from growth in the high-tech industries.

During 1996, PGE revenues decreased $20 million due to adjustments related to 
SAVE refund provisions, decoupling revenues and certain state tax benefits.

Wholesale  revenues  exceeded  1995  levels  by  $99  million due to aggressive
marketing  efforts.   Sales increased by 6.8 million MWh  over  1995,  however,
average sales prices decreased by  33%.

The price of variable power dropped 18% in 1996, averaging 13 mills versus 15.9
mills (10 mills = 1 cent) last year.  Total costs increased only $23 million or
8%, despite a 36% rise  in  total  Company  energy requirements.  Optimal hydro
conditions brought steep reductions in the cost  of secondary power, as well as
the  cost  of  firm  power  purchased  from the mid-Columbia  projects.   Power
purchases amounted to 75% of total PGE load  in 1996 at an average cost of 13.9
mills compared to 18.3 mills in 1995.

                                       24
                                     <PAGE>

PGE hydro projects generated 9% of the Company's  energy needs, an 11% increase
in production levels.  PGE's thermal plants operated  efficiently, and with the
addition of Coyote Springs, average overall costs dropped to 6.1 mills from 8.0
mills in 1995.  Excluding Coyote Springs, thermal plants  generation  was  down
13% due to economic displacement early in the year.

<TABLE>
<CAPTION>
                RESOURCE MIX/VARIABLE POWER COSTS

                                       Average Variable
                      Resource Mix     Power Cost (Mills/KWh)

                      1996   1995      1996   1995
<S>                   <C>    <C>       <C>    <C>

Generation             25%    36%       6.1    8.0
Firm Purchases         62%    39%      14.6   22.7
Secondary Purchases    13%    25%      10.4   11.3
  Total               100%   100%      13.0   15.9
</TABLE>


Operating  expenses  (excluding  variable power, depreciation and income taxes)
were $32 million or 12% higher than  1995.   The  increase  is primarily due to
additional  costs  associated  with   fixed  natural gas transportation,  storm
related  repair  and  maintenance  projects  and  increased  customer  support.
Incremental operating costs associated with Coyote Springs, which was placed in
operation  in  late  1995,  were  offset by decreased costs  at  other  thermal
facilities resulting from economic  displacement.   Throughout the year PGE was
able  to economically dispatch or displace thermal generation  in  response  to
movements  in  the  cost  of  short-term power and the availability of low-cost
hydro power.

Depreciation and  amortization  increased $20 million, or 15%,
due primarily to depreciation related to Coyote Springs.

Excluding  regulatory  disallowances  of  $50 million  in  1995,  other  income
declined $9 million due to a reduced return on regulatory assets
and the absence of equity AFDC.

Interest charges are $7 million above 1995 due to reduced AFDC
and  higher  levels  of  short-term debt.  Preferred dividend
requirements were down $7 million due to the  retirement  of nearly $80 million
in preferred stock in 1995.

Operating Expenses graph:
($ Millions)

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

1996            Operating Costs       306
                Variable Power        317
                Depreciation          155

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 in 1995, 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  1994.   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.

                                      25
                                    <PAGE>

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 West.  Energy purchases were up 28%
due  to increased loads and economic displacement of thermal generation,  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.

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.

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.


                                   CASH FLOW

Utility Capital Expenditures graph:
($ Millions)

1992            159
1993            149
1994            243
1995            232
1996            185

PORTLAND GENERAL CORPORATION
Portland General requires cash to pay dividends to its common shareholders,  to
provide  funds  to  its  subsidiaries, to meet debt service obligations and for
day-to-day  operations.  Sources  of  cash  are  dividends  from  PGE,  leasing
rentals, short-  and  intermediate-term  borrowings,  and  the sale of Portland
General's  common stock.  In order to meet periodic liquidity  and  operational
needs, Portland General maintains a $20 million one-year credit facility.

In February 1996 the Board of Directors approved an increase in PGC's quarterly
dividend from  $.30  to  $.32  per share. This was the first change in Portland
General's dividend since 1990.

Portland General received $103 million  in  dividends  from  PGE.  In addition,
Portland  General  received  $3  million  in proceeds from the issuance of  new
shares  of  common  stock  under its Dividend Reinvestment  and  Optional  Cash
Payment Plan (DRIP).

                                      26
                                    <PAGE>

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.

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 1996
balances ranging  from $83 million to $251 million. PGE has committed borrowing
facilities totaling  $200 million which are used as backup for PGE's commercial
paper facility.

A significant portion  of  cash  provided by 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 1996 reflects a higher percentage  of  cash  revenues
combined with lower variable power costs.

INVESTING  ACTIVITIES  include   generation,   transmission   and  distribution
facilities improvements, as well as energy efficiency programs.   1996  capital
expenditures  of  $185 million were primarily for the expansion and upgrade  of
the transmission and  distribution  system.   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.

The Company does not anticipate construction of new generating resources in the
foreseeable  future.   The  Company  will continue to  make  energy  efficiency
expenditures similar to 1996 levels.

FINANCING ACTIVITIES provide supplemental  cash  for  day-to-day operations and
capital requirements as needed.  During 1996 both Standard  &  Poor's  Investor
Services  (S&P)  and  Moody's Investor Services (Moody's) reviewed and upgraded
PGE's debt ratings.  S&P  upgraded  PGE's senior secured debt from A- to A, its
unsecured debt from BBB+ to A-, and commercial  paper  from  A2  to  A1  with a
Stable Outlook.  Similarly Moody's upgraded the Company's debt ratings, raising
PGE's secured debt from A3 to A2, unsecured debt from Baa1 to A3 and commercial
paper  from  P2  to  P1.   The improved ratings, especially on short-term debt,
should help lower the Company's  future  borrowing costs.  During 1997 internal
funding is expected to cover the Company's capital expenditures.

During 1996 the Company issued $170.6 million of long-term debt.  The proceeds 
were used to retire $97.6 million in long-term debt and to pay down outstanding 
short-term debt.

Also in 1996 PGE redeemed the final 200,000 outstanding shares  of  its
8.10% preferred stock,  at  par.   The  $20  million redemption leaves only the
Company's 7.75% preferred stock outstanding which has sinking fund requirements
beginning in 2002.

The issuance of  additional First Mortage Bonds and preferred  stock 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,  1996,  PGE  had  the  capability  to issue additional First 
Mortgage Bonds and preferred  stock in amounts sufficient  to  meet its capital
requirements.

                                     27
                                   <PAGE>

FINANCIAL AND OPERATING OUTLOOK

PORTLAND GENERAL CORPORATION - HOLDING COMPANY

                                PROPOSED MERGER

GENERAL
During 1996 Portland General entered into an Amended and Restated Agreement and
Plan of Merger (Merger  Agreement)  with  Enron  Corp  (Enron) and Enron Oregon
Corp. (New Enron), a wholly-owned subsidiary of Enron.   Under the terms of the
Merger Agreement Portland General will merge into New Enron (Merger)  and  each 
share of
the  common stock of Portland General will be converted into one share  of  the
common stock of New Enron. Immediately prior to the consummation of the Merger,
Enron  will  merge  into  New Enron for the purpose of reincorporating Enron in
Oregon (Reincorporation Merger).  The Merger Agreement provides that if certain
regulatory reforms are enacted,  the  structure of the transaction contemplated
by  the  Merger  Agreement will be revised  to  eliminate  the  Reincorporation
Merger.  The Merger has  been approved by both companies' boards of
directors, shareholders, and the FERC.  However,  before  the Merger  can  be  
completed, approvals  and  consents  must  be  obtained  from the NRC and the 
OPUC.

APPROVALS AND CONSENTS
OPUC  - PGE is subject to the jurisdiction of the  OPUC  with  respect  to  its
electric  utility  operations.   The  approval  of the OPUC is required for any
transaction in which a person seeks to acquire the power  to  exercise  any 
substantial influence over the policies and actions of a public utility subject 
to the OPUC's 
jurisdiction.  Upon completion  of  the Merger, Enron will be the sole owner of
PGE common stock.  On August 30, 1996, Enron filed an application with the OPUC
seeking approval of the Merger.  The  OPUC must approve the merger if they find
that it will serve the customers of PGE in the public interest.  In making that
finding the OPUC may consider whether the  change  in  ownership  of  PGE  will
impair  the  ability  of  the  utility  to provide adequate service at just and
reasonable  rates.   The  Staff  of  the  OPUC  issued  a
preliminary  recommendation  that  the  OPUC  approve the merger application,   
subject  to  certain conditions.  Portland General and Enron have entered into 
discussions with the Staff which are intended to settle differences over the 
proposed conditions.  There is no assurance that the parties will reach 
agreement.  An OPUC decision on the merger application was expected by the end 
of March 1997.  However, there is no assurance that the OPUC will have rendered 
a decision by that time.

FERC - The FERC approved the Merger, without conditions, on February 26, 1997.

OTHER  -  Consent and approval  of the Merger is still pending before the NRC.

OPERATIONS AFTER THE BUSINESS COMBINATION
When the merger is complete, Portland General will cease to exist.  PGE, 
Portland General's utility subsidiary  will  retain  its name, most of its
functions and maintain its principal corporate offices in Portland, Oregon.  It
will be a subsidiary of Enron, an integrated natural gas company  headquartered
in  Houston,  Texas.  Essentially all of Enron's operations are conducted 
through its subsidiaries
and affiliates which are  principally  engaged in the gathering, transportation
and  wholesale marketing of natural gas;  the  exploration  and  production  of
natural  gas  and  crude  oil;  the  production,  purchase,  transportation and
marketing   of  natural  gas  liquids  and  refined  petroleum  products;   the
independent development, promotion, construction and operation of power plants,
natural gas liquids  facilities  and  pipelines;  and  the  non-price regulated
purchasing and marketing of energy related commitments.

ACCOUNTING TREATMENT
The Merger will be accounted for by Enron as a purchase for financial reporting
purposes.  PGE will continue to report its assets and liabilities at historical 
cost.

                                      28
                                    <PAGE>

PORTLAND GENERAL ELECTRIC COMPANY - ELECTRIC UTILITY

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 the FERC to mandate open access for
the wholesale transmission of electricity.

The FERC has taken steps to provide  a  framework  for increased competition in
the  electric  industry.   In  1996 the FERC issued Order  888  requiring  non-
discriminatory  open access transmission  by  all  public  utilities  that  own
interstate transmission.   The  final  rule  requires utilities to file tariffs
that offer others the same transmission services  they provide themselves under
comparable  terms and conditions.  This rule also allows  public  utilities  to
recover stranded  costs in accordance with the terms, conditions and procedures
set forth in Order  888.   The  ruling  requires  reciprocity  from municipals,
cooperatives  and federal power marketers receiving service under  the  tariff.
The new rules became  effective  July  1996  and  are  expected  to  result  in
increased  competition,  lower  prices  and  more  choices  to wholesale energy
customers.

In February 1997 PGE signed a long-term transmission agreement with Washington 
Water Power (WWP) under these new rules.  WWP will receive 100 MW of firm 
transmission capacity through the end of 1997 and a total 200 MW of firm 
transmission capacity from January 1998 through the end of the year 2001.

PGE,  along with a number of other public and private Northwest  utilities  and
the BPA  have  signed  a  memorandum  of understanding to create an independent
transmission grid operator (IndeGo).  Under  the agreement, IndeGo would assume
responsibility for day to day operation of main  transmission  lines  which are
directly owned by the various parties.  The parties would maintain ownership of
the lines, as well as responsibility for repair and upgrades.

FERC  actions  apply only to the wholesale transmission of electricity.   Terms
and conditions of  retail  transmission service are subject to individual state
regulation.   Since the passage  of  the  Energy  Act,  various  state  utility
commissions have  addressed proposals which would allow retail customers direct
access to generation  suppliers, marketers, brokers and other service providers
in a competitive marketplace  for  energy  services  (retail  wheeling).  It is
expected  that  several  bills proposing retail competition will be  introduced
during the 1997 Oregon legislative session.

PGE has initiated several  experimental  tariff  schedules  during the past two
years that have allowed certain of its larger customers to acquire  electricity
at  market  based  prices.  Eligible customers have the opportunity to purchase
energy at prices that  reflect  actual  market  conditions.   The  tariffs  are
limited to a total of 250 MW  or 12% of total PGE retail load.

PGE has filed a tariff which, upon approval by the OPUC,
will allow large industrial and commercial customers to purchase as much
as one-third of their electricity needs from any provider.  This Power Delivery
Service  Tariff  initially will be available for up to 75 megawatts of load per
year. If the OPUC  approves  the merger of Portland General and Enron, affected
customers will be allowed to purchase  100 percent of their electricity through
the tariff, up to 225 megawatts per year.  Absent  OPUC approval of the merger,
PGE will phase in the tariff over a longer period of time.

In November 1996 Portland General and Enron committed  to  submit  to  the OPUC
within  60  days of the merger completion a plan to open PGE's service area  to
competition.   The  plan  will  allow  residential,  commercial  and industrial
customers  to  choose  their  energy  provider  and will include a proposal  to
separate  PGE  generating  facilities  from its transmission  and  distribution
system.  In addition, the plan will include a proposal 
for the treatment of transition or stranded costs.  The action will position 
the generating side of the organization to
compete   more  effectively  in  an  open  marketplace,  and  will  allow   the
distribution side to focus on quality of service, safety and reliability.

                                      29
                                    <PAGE>

REGULATORY MATTERS
Industry Restructuring  -  Historically  the  OPUC has approached the issues of
retail  competition  on  an  informal, utility-by-utility  basis,  rather  than
through generic, broad-based proceedings.  However, in June 1996 the OPUC began
an investigation into restructuring  the  state's  electric utility industry by
meeting with state 
utility executives, customers, environmental  advocates  and
other  interested  parties  to  discuss  how  competition  in the generation of
electric  power  could  be  introduced  and when to allow customers  access  to
competing power suppliers.

Four specific issues were the focus of subsequent  meetings: how an electricity
distribution company would operate and be regulated;  how energy efficiency and
other  public  purpose programs will be offered and funded  in  a  restructured
environment;  what  treatment  is  appropriate  for  utility  investment  in  a
generating plant  that  is no longer economic; and whether vertical integration
of electrical utilities should  be  discouraged  or  prohibited.  The  OPUC has
stated  its  intent  to  use  these  discussions  to  prepare for action on the
competitive initiatives that can be implemented under its  direct authority and
to work with the legislature in assessing proposals for restructuring.

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 
regulation assets.

1996  RATE SETTLEMENT - During 1996 PGE worked with the OPUC  staff  and  other
interested parties to develop a plan for dealing with significant savings which
resulted  from  lower  natural gas and power purchase prices.  This resulted in
$55 million in annual rate  reductions  that  began December 1, 1996.  The rate
reductions will result in an after tax earnings  decrease  of approximately $32
million  for  1997.   In addition, the order incorporated $15 million  in  rate
reductions previously approved  by  the  OPUC  resulting  in  total  1997  rate
reductions of $70 million.

BONDABLE  CONSERVATION  INVESTMENT  -  In  late  1996,  the OPUC designated $81
million  of  PGE's  energy  efficiency  investment  as  Bondable   Conservation
Investment,  pursuant to recent Oregon legislation, and authorized issuance  of
conservation bonds  collateralized  by  an  OPUC assured future revenue stream.
Subsequently,  PGE issued a 10 year conservation  bond  which  is  expected  to
provide an estimated  $21  million  in present value savings to customers while
granting PGE immediate recovery of its  energy efficiency program expenditures.
The OPUC assured future revenues collected from customers will pay debt service 
obligations.

TROJAN INVESTMENT RECOVERY - In April 1996  a  circuit  court  judge  in Marion
County, Oregon found that the OPUC could not authorize PGE to collect a  return
on  its undepreciated investment in Trojan contradicting a November 1994 ruling
from  the  same  court.   The  ruling was the result of an appeal of PGE's 1995
general rate order which granted  PGE  recovery of, and a return on, 87 percent
of its remaining investment in Trojan.

The November 1994 ruling, by a different  judge  of  the same court, upheld the
Commission's 1993 Declaratory Ruling (DR-10).  In DR-10  the   OPUC  ruled that
PGE  could  recover  and  earn a return on its undepreciated Trojan investment,
provided certain conditions  were  met.  The Commission relied on a 1992 Oregon
Department of Justice opinion issued  by  the Attorney General's office stating
that the Commission had the authority to set  prices  including recovery of and
on investment in plant that is no longer in service.

The 1994  ruling was appealed to the Oregon Court of Appeals and stayed pending
the appeal of the Commission's March 1995 order.  Both  PGE  and  the OPUC have
separately appealed the April 1996 ruling which was combined with the appeal of
the November 1994 ruling at the Oregon Court of Appeals.

For further information regarding the legal challenges to the OPUC's  authority
to grant recovery for PGE's Trojan investment see Item 3., Legal proceedings.

LEAST  COST ENERGY PLANNING - In August 1996 the OPUC acknowledged PGE's  1995-
1997 Integrated  Resource  Plan  (IRP).   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.   The  1995-1997  IRP  reflects:  the
recognition that the geographic area PGE presently serves no longer defines our
customer base; the  accelerated  pace  of technological change; transition of a
key fuel, natural gas, to a market commodity;  and the development of a vibrant
electricity marketplace.  

                                      30
                                    <PAGE>

The IRP outlines a strategy which emphasizes: (1) the
purchase of energy in the marketplace at competitive prices, (2) acquisition of
energy  efficiency  at  reduced levels while maintaining  market  presence  and
capability for possible future  increases when justified, (3) economical use of
our existing assets and (4) the use  of  other  supply-side  actions, including
acquisition of renewable resources.

RETAIL CUSTOMER GROWTH AND ENERGY SALES
Weather  adjusted  retail  energy sales grew less than 1 percent  during  1996,
reflecting   cutbacks   by   paper   manufacturers   and   metal   fabricators.
Nevertheless, the Company benefited  from continued growth in residential sales
of 1.8% with the addition of nearly 15,500  new  customers as well as increased
commercial sales which rose 3%.  Industrial sales, although negatively affected
in  1996 by weak demand from the paper manufacturers  and  metals  fabricators,
continues to benefit from growth in the high-tech and transportation sectors.
Rising  demand  from  the  high-tech industry in Oregon combined with continued
gains in residential and commercial  customer classes is expected to contribute
to 6.7% load growth  for 1997.

WHOLESALE SALES

The surplus of electric generating capability in the Western U.S., the entrance 
of numerous wholesale marketers and brokers into the market, and open access 
transmission is contributing to increasing pressure on the price of power.  In 
addition the development of financial markets and NYMEX electricity contract 
trading 
has led to increased price discovery available to market participants, further 
adding to the competitive pressure on wholesale margins.  During 1996 PGE's 
wholesale revenues increased 104% over 1995 levels with wholesale activity 
accounting for 18% of 
total revenues and 37% of total sales.  In future years PGE will continue its 
participation in the wholesale marketplace to balance its supply of power to 
meet the needs of its retail customers, manage risk and to administer PGE's 
current long-term wholesale contracts.  Due to increasing volatility and 
reduced margins resulting from increased competition, long-term wholesale 
marketing activites will be performed by PGE's non-regulated affiliates.

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 integrated  its  wholesale
trading, fuels, energy supply, power operations and price risk management 
functions.  The
Company must purchase energy  to  serve its wholesale markets.  This along with
the development of a broader, more  competitive  wholesale  electricity market,
means the Company must actively hedge 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  its  exposure  to fluctuations in these commodities.   In  addition  to
hedging activities, financial  instruments  are  used  for  trading purposes.
PGE  trades  instruments  on the  New  York
Mercantile  Exchange  as well as in the  over the counter market.  Consequently
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 service territory and from its wholesale customers.
PGE plans to generate 27% of its energy requirements during 1997, approximately
the same level achieved during 1996.

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 of fuel to meet plant operations.

                                      31
                                    <PAGE>

During  1996  the Company relied on wholesale purchases to supply approximately
75% of its energy  needs, and expects to purchase approximately 73% of its 1997
load requirements.   PGE has long-term power contracts with four hydro projects
on the mid-Columbia River  which  provide  PGE  with  590  MW.  Early forecasts
indicate above average water conditions for 1997.  However,  efforts to restore
salmon  runs  on the Columbia and Snake Rivers may reduce the amount  of  water
available for generation  which could affect the supply, availability and price
of purchased power.  Additional  factors that could affect the availability and
price of 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  a  surplus  of
generating capacity  within 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  salmon  found in the Snake
River,  a  major tributary of the Columbia River, have been granted  protection
under the Federal  Endangered  Species Act (ESA).  In an effort to help restore
these fish, the federal government  has  reduced the amount of water allowed to
flow through the turbines at the hydro electric  dams on the Snake and Columbia
River while the young salmon are migrating to the  ocean.  This has resulted in
reduced  amounts  of  electricity  generated  at  the  dams.   Favorable  hydro
conditions  helped  mitigate  the  affect  of these actions in  1996.   Similar
conditions are expected in 1997.  If this practice is continued in future years
it could mean less water available in the fall  and  winter for generation when
demand for electricity in the Pacific Northwest is highest.   Although PGE does
not own any hydroelectric facilities on the Columbia and Snake  rivers, it does
buy large amounts of energy from the agencies which do.

Several  other  species of salmon have been proposed for protection  under  the
ESA.  Actions taken  to protect these species will not be in affect for several
years.  It is unclear how these potential ESA listings will impact future hydro
operations.

PGE's hydroelectric projects  are  located  on  rivers  with  depressed but not
endangered  salmon  runs.   PGE biologists are working with state  and  federal
natural resource agencies to  ensure PGE's hydro operations are compatible with
the survival and enhancement of  these  populations  of  salmon.   PGE does not
expect that any actions will be taken that will have an adverse impact  on  PGE
hydro operations in the foreseeable future.

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  2.7  million  MWh  of
renewable energy  in  1996,  meeting  9%  of  PGE's  load.  PGE's hydroelectric
plants,  operate under federal licenses, which will be  up  for renewal between
the years 2001 and 2006.  PGE officially began the relicensing  process for its
408-MW  Pelton Round Butte Project  in July 1996.  The Confederated  Tribes  of
Warm  Springs,   currently  the  licensee  for  a  powerhouse  located  at  the
reregulating dam (one  of  three  dams  within the Pelton Round-Butte Project),
have also filed a notice stating their intent  to seek a license for the entire
project.  Should relicensing 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,  there  is no
assurance that a new license will be granted to PGE.

                                      32
                                    <PAGE>

MID-COLUMBIA  HYDRO  -   PGE's  long-term power purchase contracts with certain
public utility districts in the state  of  Washington  expire  between 2005 and
2018.  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 the expiration
of the current  contracts.  An  initial decision was issued in December 1996 by
the  presiding   FERC  administrative   law   judge.  This  decision  does  not
substantially change PGE's share of power from these two dams. This decision is
expected to be appealed.   

PGE will continue to seek renewal of these contracts
under terms and conditions similar to the original.   For  further  information
regarding  the  power  purchase  contracts  on the mid-Columbia dams, including
Priest Rapids and Wanapum, see Note 8, Commitments,  in  the Notes to Financial
Statements.

NUCLEAR DECOMMISSIONING
In 1996 the NRC and EFSC approved PGE's Trojan decommissioning plan.  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, after
the  spent  fuel  has been transferred to a temporary dry  spent  fuel  storage
facility.  The plan anticipates final site restoration activities will begin in
2018 after PGE completes  shipment  of spent fuel to a USDOE facility (see Note
12, Trojan Nuclear Plant, for further  discussion  of  the decommissioning plan
and other Trojan issues).  Current decommissioning activities  are  focused  on
the  licensing, planning and construction of a temporary dry spent fuel storage
facility and the removal of the Trojan reactor vessel.

                                       33
                                     <PAGE>

                    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, 1996 and  1995, and the
related consolidated statements of income, retained earnings and cash flows for
each of the three years in the period ended December 31, 1996.  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, 1996 and 1995, and the results of  their
operations and their cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting principles.


                                                            Arthur Andersen LLP
Portland, Oregon,
January 20, 1997

                                        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                                        1996               1995              1994
                                                                       (THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
<S>                                                                    <C>                <C>               <C>
OPERATING REVENUES                                                     $ 1,111,816         $ 983,582         $ 959,409
OPERATING EXPENSES
   Purchased power and fuel                                                316,729           293,589           347,125
   Production and distribution                                              81,968            63,841            61,891
   Maintenance and repairs                                                  55,508            47,532            47,391
   Administrative and other                                                115,881           108,067           100,596
   Depreciation and amortization                                           154,670           134,423           124,081
   Taxes other than income taxes                                            52,513            51,490            52,151
                                                                           777,269           698,942           733,235
OPERATING INCOME BEFORE INCOME TAXES                                       334,547           284,640           226,174
INCOME TAXES                                                               109,988            89,064            71,878
NET OPERATING INCOME                                                       224,559           195,576           154,296
OTHER INCOME (DEDUCTIONS)
   Regulatory disallowances - net of income taxes of $25,542                     -           (49,567)                -
   Interest expense                                                        (79,180)          (79,128)          (71,653)
   Allowance for funds used during construction                              1,642            11,065             4,314
   Preferred dividend requirement - PGE                                     (2,793)           (9,644)          (10,800)
   Other - net of income taxes                                             (14,692)           12,734            16,901
INCOME FROM CONTINUING OPERATIONS                                          129,536            81,036            93,058
DISCONTINUED OPERATIONS
   Gain on disposal of real estate operations -
    net of income taxes of $4,226                                                -                 -             6,472
NET INCOME                                                               $ 129,536          $ 81,036          $ 99,530
COMMON STOCK
   Average shares outstanding                                           51,144,462        50,766,916        49,896,685
   Earnings per average share
     Continuing operations                                                   $2.53             $1.60             $1.86
     Discontinued operations                                                     -                 -              0.13
   Earnings per average share                                                $2.53             $1.60             $1.99
   Dividends declared per share                                              $1.28             $1.20             $1.20


                              PORTLAND GENERAL CORPORATION AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF RETAINED EARNINGS


<CAPTION>

FOR THE YEARS ENDED DECEMBER 31                                          1996              1995              1994
                                                                                  (THOUSANDS OF DOLLARS)
<S>                                                                      <C>               <C>               <C>
BALANCE AT BEGINNING OF YEAR                                             $ 135,885         $ 118,676          $ 81,159
NET INCOME                                                                 129,536            81,036            99,530
ESOP TAX BENEFIT AND OTHER                                                  (2,093)           (2,872)           (1,705)
                                                                           263,328           196,840           178,984
DIVIDENDS DECLARED ON COMMON STOCK                                          65,516            60,955            60,308
BALANCE AT END OF YEAR                                                   $ 197,812         $ 135,885         $ 118,676

<FN>

The accompanying notes are an integral part of these consolidated statements.

</FN>
</TABLE>

                                        35
                                      <PAGE>

                 PORTLAND GENERAL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

AT DECEMBER 31                                                                           1996                1995
                                                                                             (THOUSANDS OF DOLLARS)
<S>                                                                                      <C>                 <C>
                                                                                               
                                       ASSETS
ELECTRIC UTILITY PLANT - ORIGINAL COST
   Utility plant (includes Construction Work
     in Progress of $36,919 and $33,382)                                                 $ 2,899,746         $ 2,754,280
   Accumulated depreciation                                                               (1,124,337)         (1,040,014)
                                                                                           1,775,409           1,714,266
   Capital leases - less amortization of $30,569 and $27,966                                   6,750               9,353
                                                                                           1,782,159           1,723,619
OTHER PROPERTY AND INVESTMENTS
   Leveraged leases                                                                          150,695             152,666
   Trojan decommissioning trust, at market value                                              78,448              68,774
   Corporate Owned Life Insurance less loans of $26,411 and $26,432                           83,666              74,574
   Contract termination receivable                                                           111,447                   -
   Other investments                                                                          29,745              28,603
                                                                                             454,001             324,617
CURRENT ASSETS
   Cash and cash equivalents                                                                  29,802              11,919
   Accounts and notes receivable                                                             125,314             104,815
   Unbilled and accrued revenues                                                              53,317              64,516
   Inventories, at average cost                                                               32,903              38,338
   Prepayments and other                                                                      17,613              16,953
                                                                                             258,949             236,541
DEFERRED CHARGES
 Unamortized regulatory assets
   Trojan investment                                                                         275,460             301,023
   Trojan  decommissioning                                                                   282,131             311,403
   Income taxes recoverable                                                                  195,592             217,366
   Debt reacquisition costs                                                                   28,063              29,576
   Conservation investments - secured                                                         80,102              -
   Energy efficiency programs                                                                 11,974              77,945
   Other                                                                                      22,575              24,322
 WNP-3 settlement exchange agreement                                                         163,217             168,399
 Miscellaneous                                                                                29,026              33,206
                                                                                           1,088,140           1,163,240
                                                                                         $ 3,583,249         $ 3,448,017
                           CAPITALIZATION  AND LIABILITIES
CAPITALIZATION
   Common stock equity
     Common stock, $3.75 par value per share 100,000,000 shares authorized,
     51,317,828 and 51,013,549 shares outstanding                                          $ 192,442           $ 191,301
     Other paid-in capital - net                                                             584,272             574,468
   Unearned compensation                                                                      (3,072)             (8,506)
   Retained earnings                                                                         197,812             135,885
                                                                                             971,454             893,148
   Cumulative preferred stock of subsidiary
     Subject to mandatory redemption                                                          30,000              40,000
   Long-term debt                                                                            933,042             890,556
                                                                                           1,934,496           1,823,704
CURRENT LIABILITIES
   Long-term debt and preferred stock due within one year                                     92,559             105,114
   Short-term borrowings                                                                      92,027             170,248
   Accounts payable and other accruals                                                       149,255             133,405
   Accrued interest                                                                           14,372              16,247
   Dividends payable                                                                          17,386              16,668
   Accrued taxes                                                                              30,985              15,151
                                                                                             396,584             456,833
OTHER
   Deferred income taxes                                                                     614,576             652,846
   Deferred investment tax credits                                                            47,314              51,211   
   Deferred gain on contract termination                                                     112,697                   -
   Trojan decommissioning and transition costs                                               357,844             379,179
   Miscellaneous                                                                             119,738              84,244
                                                                                           1,252,169           1,167,480
                                                                                         $ 3,583,249         $ 3,448,017

<FN>
The accompanying notes are an integral part of these consolidated balance sheets.
</FN>
</TABLE>

                                        36
                                      <PAGE>


                 PORTLAND GENERAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31                                1996                1995           1994
<S>                                                            <C>                 <C>            <C>
                                                                                (THOUSANDS OF DOLLARS)
CASH PROVIDED (USED) BY -
OPERATIONS:
  Net income                                                   $    129,536        $ 81,036       $ 99,530
  Adjustment to reconcile net income to net cash
   provided by operations:
     Depreciation and amortization                                  118,929         102,266         94,217
     Amortization of WNP-3 exchange agreement                         5,182           4,910          4,695
     Amortization of Trojan investment                               24,244          24,884         26,738
     Amortization of Trojan decommissioning                          14,041          13,336         11,220
     Amortization of deferred charges - other                         5,034          (1,777)         2,712
     Deferred income taxes - net                                    (19,979)         (9,555)        37,396
     Other noncash revenues                                          (1,697)         (5,037)        (2,570)
     Regulatory Disallowances                                             -          49,567              -
  Changes in working capital:
     (Increase) Decrease in receivables                              (9,381)        (14,687)       (22,952)
     (Increase) Decrease in inventories                               5,435          (7,189)         3,264
     Increase (Decrease) in payables                                 40,052          22,122         (5,105)
     Other working capital items - net                                 (644)          1,957        (18,104)
  Trojan decommissioning expenditures                                (8,231)        (10,927)        (3,360)
  Deferred charges - other                                           35,454          (9,472)        13,987
  Miscellaneous - net                                                 7,772          15,108          5,897
                                                                    345,747         256,542        247,565
INVESTING ACTIVITIES:
  Utility construction - new resources                                    -         (49,096)       (87,537)
  Utility construction - other                                     (184,717)       (158,198)      (131,675)
  Energy efficiency programs                                        (12,318)        (25,013)       (23,745)
  Rentals received from leveraged leases                             29,623          21,204         20,886
  Nuclear decommissioning trust deposits                            (15,435)        (16,598)       (11,220)
  Nuclear decommissioning trust withdrawals                           7,888          13,521              -
  Discontinued operations                                                 -               -         26,288
  Other                                                             (10,659)         (1,465)       (14,058)
                                                                   (185,618)       (215,645)      (221,061)
FINANCING ACTIVITIES:
  Short-term borrowings - net                                       (78,221)         21,650        (10,816)
  Borrowings from Corporate Owned Life Insurance                          -           4,679         21,731
  Long-term debt issued                                             170,590         147,138         74,631
  Long-term debt retired                                           (127,661)        (69,445)       (49,882)
  Repayment of nonrecourse borrowings for
    leveraged leases                                                (25,535)        (18,741)       (18,046)
  Preferred stock retired                                           (20,000)        (79,704)       (20,000)
  Common stock issued                                                 3,380          10,299         50,074
  Dividends paid                                                    (64,799)        (62,396)       (59,856)
                                                                   (142,246)        (46,520)       (12,164)
INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                                   17,883          (5,623)        14,340
CASH AND CASH EQUIVALENTS AT THE BEGINNING
  OF YEAR                                                            11,919          17,542          3,202
CASH AND CASH EQUIVALENTS AT THE END
  OF YEAR                                                          $ 29,802        $ 11,919       $ 17,542
Supplemental disclosures of cash flow information
  Cash paid during the year:
    Interest, net of amounts capitalized                           $ 76,105        $ 66,584       $ 60,852
    Income taxes                                                    111,630          86,778         31,539

<FN>
The accompanying notes are an integral part of these
consolidated statements.
</FN>

</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.

During  1996  Portland  General  entered  into an Amended  and  Restated
Agreement and Plan of Merger (Merger Agreement)  with Enron Corp (Enron)
and Enron Oregon Corp. (New Enron), a wholly-owned  subsidiary of Enron.
The  Merger will be accounted for by Enron as a purchase  for  financial
reporting  purposes.  PGE  will  continue to report its assets and 
liabilities  at historical cost (see Item 7. Management's Discussion and 
Analysis of Financial Condition and Results of Operations).

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 1996, PGE's service area
population was approximately 1.4 million, constituting approximately 44% of the
state's  population.   At December 31, 1996, PGE served  approximately  668,000
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 require 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 4.3% in 1996, 4.0% in 1995 and 3.8% in 1994.

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

                                      38
                                    <PAGE>

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 5.52%, 7.16%, and  4.65% for
the years 1996, 1995 and 1994, respectively.

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, 1996  and
1995, are as follows (thousands of dollars):

<TABLE>
<CAPTION>
                                       1996                 1995
<S>                                    <C>                  <C>
Lease contracts receivable             $460,061             $508,190
Nonrecourse debt service               (345,450)            (389,619)
   Net contracts receivable             114,611              118,571
Estimated residual value                 84,604               84,610
Less - Unearned income                 ( 39,435)             (41,134)
   Investment in leveraged leases       159,780              162,047
Less - Deferred ITC                      (9,085)              (9,381)
   Investment in leases, net           $150,695              $152,666
</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 an intangible asset with the carrying amount being amortized over 
the life of the related agreement.

                                      39
                                    <PAGE>

REGULATORY ASSETS 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 refunded  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
as of December 31 relate to the following:

<TABLE>
<CAPTION>
                                                  1996                     1995
<S>                                               <C>                      <C>
                                                       (thousands of dollars)
Regulatory Assets
  Trojan-related                                   557,591                  612,426
  Income taxes recoverable                         195,592                  217,366
  Debt reacquisition and other                      50,638                   53,898
  Conservation investments - secured                80,102                        -
  Energy efficiency programs                        11,974                   77,945
              Total Regulatory Assets             $895,897                 $961,635
Regulatory Liabilities
  Deferred gain on SCE Termination                $112,697                        -
  Miscellaneous                                     35,893                   11,081
               Total Regulatory Liabilities       $148,590                $  11,081
</TABLE>

As  of  December  31,  1996,   all  of  the  Company's  regulatory  assets  and
liabilities are being reflected in rates  charged  to  customers  over  periods
ranging from approximately 5 to 28 years.  Based on rates in place at year  end
1996, 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.

In late 1996,  the  OPUC  designated  $81  million  of  PGE's energy efficiency
investment  as  Bondable  Conservation Investment, pursuant  to  recent  Oregon
legislation,  and  approved  PGE's   request   to   issue   conservation  bonds
collateralized  by  an  OPUC assured future revenue stream.  Subsequently,  PGE
issued  a  10 year conservation  bond  providing  savings  to  customers  while
granting PGE  immediate recovery of its energy efficiency program expenditures.
Future revenues collected from customers will pay debt service obligations.


NOTE 2 -EMPLOYEE BENEFITS

PENSION PLAN
Portland General has a non-contributory defined benefit 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>
                                                    1996                    1995
<S>                                                 <C>                     <C>
Actuarial present value of benefit obligations:
   Accumulated benefit obligation, including
     vested benefits of $174,540 and $174,694        $187,847                $187,977
   Effect of projected future compensation levels      38,841                  34,345
   Projected benefit obligation (PBO)                 226,688                 222,322
Plan assets at fair value                             323,717                 295,516
Plan assets in excess of PBO                           97,029                  73,194
Unrecognized net experience gain                      (95,055)                (71,691)
Unrecognized prior service costs amortized
   over 13- to 16-year periods                         11,846                  13,180
Unrecognized net transition asset being
   recognized over 18 years                           (15,660)                (17,618)
Pension liability                                   $  (1,840)              $  (2,935)
</TABLE>


<TABLE>
<CAPTION>
                                                    1996         1995          1994
<S>                                                 <C>          <C>           <C>
ASSUMPTIONS:
   Discount rate used to calculate PBO              7.50%        7.00%         8.50%
   Rate of increase in future compensation levels   5.50         5.00          6.50
   Long-term rate of return on assets               8.50         8.50          8.50

COMPONENTS OF NET PERIODIC PENSION EXPENSE
(THOUSANDS OF DOLLARS):

   Service cost                                     $    6,940   $    5,500     $   6,199
   Interest cost on PBO                                 15,911       15,722        14,693
   Actual return on plan assets                        (39,542)     (61,377)        6,011
   Net amortization and deferral                        15,596       37,830       (25,971)
   Net periodic pension expense/(benefit)            $  (1,095)   $  (2,325)   $      932
</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, 1996 was $27 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, 1995 was $30 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, 1996 and 1995.

DEFERRED COMPENSATION
Portland  General  provides certain employees with benefits under  an  unfunded
Management Deferred Compensation Plan (MDCP).  Obligations for the MDCP are $30
million and $25 million at December 31, 1996 and 1995, 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

                                       41
                                     <PAGE>

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, combined  with dividends on unallocated shares were 
used to pay principal and interest on PGE's loan.  These amounts are not 
material.  Shares of common stock used to match contributions by employees of 
Portland General and its non-regulated 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>
                                         1996            1995             1994
<S>                                      <C>             <C>              <C>
Income Tax Expense:
  Currently payable
     Federal                             $102,066        $ 77,845         $41,833
     State                                 21,472           9,230           7,072
                                          123,538          87,075          48,905
  Deferred income taxes
      Federal                             (13,401)        (15,359)         22,269
      State                                (2,539)         (6,741)          4,472
                                          (15,940)        (22,100)         26,741
  Investment tax credit adjustments        (4,193)         (5,725)         (4,145)
                                         $103,405        $ 59,250        $ 71,501
Provision Allocated to:
  Operations                             $109,988        $ 89,064        $ 71,878
  Other income and deductions              (6,583)        (29,814)           (377)
                                         $103,405        $ 59,250        $ 71,501
Effective Tax Rate Computation:
  Computed tax based on
   statutory federal income
   tax rates applied to
   income before income taxes            $ 81,529        $ 49,101        $ 57,596
  Increases (Decreases) resulting from:
   Flow through depreciation                9,497           6,715           8,283
   Regulatory disallowance                      -           3,470               -
   State and local taxes - net             11,719           4,857           8,953
   State of Oregon refund                       -          (3,668)              -
   Investment tax credits                  (4,193)         (5,725)         (4,145)
   Excess deferred taxes                     (750)           (700)           (767)
   Merger expenses                          3,724               -               -
   Preferred dividend requirement             912           3,155           3,526
   Other                                      967           2,045          (1,945)
                                         $103,405        $ 59,250        $ 71,501
   Effective tax rate                       44.4%           42.2%           43.5%
</TABLE>

                                       42
                                     <PAGE>

As of December 31, 1996 and 1995,  the  significant components of the Company's
deferred  income tax assets and liabilities  were  as  follows   (thousands  of
dollars):

<TABLE>
<CAPTION>
                                    1996               1995
<S>                                 <C>                <C>
DEFERRED TAX ASSETS
Plant-in-service                    $   64,471         $   86,721
Other                                   61,012             60,245
                                       125,483            146,966
DEFERRED TAX LIABILITIES
Plant-in-service                      (414,417)          (448,049)
Energy efficiency programs             (32,026)           (30,314)
Trojan abandonment                     (69,315)           (54,335)
WNP-3 exchange contract                (59,302)           (60,489)
Leasing                               (136,478)          (142,606)
Other                                   (7,918)           (43,470)
                                      (719,456)          (779,263)
Less current deferred taxes               (430)              (414)
Less valuation allowance               (20,173)           (20,135)
Total                                $(614,576)         $(652,846)
</TABLE>

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

                                       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, 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)
 Sales of stock                    350,778       1,315            -           -           -      5,335           -
 Redemption of stock               (46,499)       (174)    (200,000)    (20,000)          -        449           -
 Tax benefits stock options,
   repayment of ESOP loan
   and other                             -           -            -           -           -      4,020       5,434

 December 31, 1996              51,317,828    $192,442      300,000    $      -     $30,000   $584,272     $(3,072)


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

</TABLE>

COMMON STOCK
As  of  December  31,  1996,  Portland General had reserved 2,333,386 and 8,185
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.

<TABLE>
<CAPTION>
PGE's cumulative preferred stock consisted
of:
At December 31,                               1996             1995
                                              (thousands of dollars)
<S>                                           <C>              <C>
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 shares outstanding          -           20,000
        Current sinking fund                        -          (10,000)
                                              $30,000          $40,000
</TABLE>

                                       44
                                     <PAGE>


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, 1996,  PGE's common stock equity capital
was 49% of its total capitalization.

STOCK COMPENSATION PLANS
Portland General has authorized  2.3  million shares of Portland General common
stock under its Long-Term Incentive Plan  (LTIP).   Stock options represent the
majority  of  activity  under  this  plan.  Stock option plan  activity  is  as
follows:

<TABLE>
<CAPTION>
                                                     Option Price
                               Options               Per Share
<S>                            <C>                   <C>

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
   Granted                      373,029              $25 - $43.50
   Exercised                   (306,930)             $14 - $25
   Canceled                     (31,096)             $14 - $37.625
December 31, 1996               827,503              $13 - $43.25
Stock options exercisable
  at December 31, 1996          473,870              $13 -$25
</TABLE>

At December 31, 1996, 831,946 common shares  were  available for issuance under
the LTIP.

Portland General accounts for stock-based compensation  plans under APB Opinion
25.  Due to a limited number of Portland General stock options  granted  on  an
annual basis, the amount of compensation expense, which would be required to be 
disclosed under Statement of Financial Accounting Standards No. 123, 
"Accounting for Stock Based Compensation", is not material.

                                     45
                                   <PAGE>

NOTE 5 - SHORT-TERM BORROWINGS

At  December  31, 1996, Portland General and PGE had total committed lines of 
credit of
$220 million.   Portland  General has a $20 million committed facility expiring
in July 1997.   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, 1996, 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>
                                                        1996              1995                1994
<S>                                                     <C>               <C>                 <C>
AS OF YEAR-END:                                               (thousands of dollars)
   Aggregate short-term debt outstanding
     Commercial paper                                   $ 83,027           $170,248           $148,598
     Bank loans                                            9,000                  -                  -
   Weighted average interest rate*
     Commercial paper                                       5.6%               6.1%               6.2%
     Bank loans                                             7.3                   -                  -
    Unused committed lines of credit                    $220,000           $215,000           $215,000
FOR THE YEAR ENDED:
    Average daily amounts of short-term
    debt outstanding
     Commercial paper                                    158,259            111,366            138,718     
     Bank loans                                          $ 7,013          $     206          $   1,273
    Weighted daily average interest rate*
     Commercial paper                                       5.6                6.3                4.5
     Bank loans                                             5.8%               6.5%               4.3%    
    Maximum amount outstanding
     during the year                                    $251,462           $170,248           $174,082

<FN>
             *  Interest rates exclude the effect of commitment fees,  facility
fees and other financing fees.
</FN>

</TABLE>

                                        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.

<TABLE>
<CAPTION>

Schedule of long-term debt at December 31                    1996                         1995
                                                                  (thousands of dollars)
<S>                                                          <C>                          <C>
First Mortgage Bonds
   Maturing 1996 through 2001
      5.875 % Series due June 1, 1996                            $       -                $   5,066
      6.60%  Series due October 1, 1997                             15,063                   15,363
     Medium-term notes 5.65% - 9.00%                               295,000                  210,000
  Maturing 2002 - 2007  6.47% - 9.07%                              168,000                  260,595
  Maturing 2021 - 2023  7.75% - 9.46%                              195,000                  195,000
                                                                   673,063                  686,024
Pollution Control Bonds
  Port of Morrow, Oregon, variable rate
    (Average 3.5% - 4.3% for 1996), due 2013 &                      29,400                   23,600
     2031
  City of Forsyth, Montana, variable rate
    (Average variable rates 3.4%- 3.5% for
     1996), due 2013-2016                                          118,800                  118,800
  Amount held by trustee                                            (8,236)                  (8,152)
  Port of St. Helens, Oregon, variable rate due
   2010 and 2014 (Average variable rates 3.4% - 3.5%                51,600                   51,600
   for 1996)
                                                                   191,564                  185,848
Other
  8.25% Junior Subordinated Deferrable Interest Debentures,
     due December 31, 2035                                          75,000                   75,000
  Portland General medium-term notes 8.09% due                           -                   30,000
   1996
  6.91% Conservation Bonds maturing monthly to                      79,790                        -
   2006
  Capital lease obligations                                          6,750                    9,353
  Other                                                               (566)                    (555)
                                                                   160,974                  113,798
                                                                 1,025,601                  985,670
  Long-term debt due within one year                               (92,559)                 (95,114)
     Total long-term debt                                    $     933,042                $ 890,556
</TABLE>


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

<TABLE>
<CAPTION>
                       1997             1998             1999             2000             2001
<S>                    <C>              <C>              <C>              <C>              <C>
 Maturities:
       PGE             $92,559          $71,073          $102,124         $32,222          $57,737
</TABLE>

                                       47
                                     <PAGE>

NOTE 7 - OTHER FINANCIAL INSTRUMENTS

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.

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

<TABLE>
<CAPTION>
                                         1996                           1995
<S>                            <C>             <C>           <C>             <C>
                               Carrying        Fair          Carrying        Fair
                               Amount          Value         Amount          Value
Preferred stock subject to
  mandatory redemption         $  30,000       $  31,455      $ 50,000        $    52,900
Long-term debt                                                               
  PGC (Parent only)            $       -       $       -     $  30,000       $     30,531
  PGE                            939,627         959,668       946,872            994,996
                                $939,627        $959,668      $976,872         $1,025,527
Interest rate swaps in net
 receivable position                   -            $582             -                  -
</TABLE>


NON-TRADING ACTIVITIES
Commodity   -   Company   policy  allows  the  use  of  financial
instruments such as commodity futures, options and swap contracts
to hedge the price of natural  gas and electricity and reduce the
Company's exposure to market fluctuations  in  these commodities.
In  1996  hedge transactions consisted of commodity  futures  and
swap contracts  where the Company receives from or makes payments
to counterparties based on the differential between a fixed price
and an index reference price for natural gas or electricity.  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, 1996 and 1995 outstanding futures and swap contracts related to 
natural gas had an absolute notional contract quantity of 6,085,000 million 
British thermal units (MMBtu) and 4,500,000 MMBtu's, respectively.  In 
addition, outstanding swap contracts related to electricity had an absolute 
notional contract quantity of 1,410,000 Mwh and 256,000 Mwh as of December 31, 
1996 and 1995, respectively.  The commodity futures and swap contracts extend 
for a period of up to three years.  Recognition of  gains
or losses on hedging instruments is deferred until the underlying
physical transaction  occurs.   Upon  recognition, these gains or
losses are recognized in income as a reduction  to or increase in
purchased power and fuel expense.  

                                 48
                               <PAGE>

The estimated  fair  value  of
outstanding  natural  gas financial instruments was $5,153,000 at
December  31, 1996 
and $(261,000)  at  December  31,  1995.   The
estimated  fair   value   of  outstanding  electricity  financial
instruments was $(375,000) at December 31, 1996 and $(335,000) at
December 31, 1995.

INTEREST RATE - In August 1996 PGE entered into a 3 year interest
rate swap agreement with a  notional amount of $50 million.  This
puts  PGE  in  a floating rate position  on  the  additional  $50
million of long term debt issued in August 1996.  At December 31,
1996, the fair value  PGE would receive if the interest rate swap
agreement was terminated is not material.

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.   Realized and unrealized gains or
losses  on  commodity-based financial  instruments  that  do  not
qualify as hedges  are recognized in income on a current basis in
purchased  power and  fuel  expense.   Net  losses  arising  from
natural gas  trading  activities during the period ended December
31, 1996 were $4,481,000.   Net  gains  arising  from electricity
trading activities during the period ended December 31, 1996 were
$260,000.  At December 31, 1996 outstanding swap and option contracts related 
to natural gas had an absolute notional contract quantity of 280,000 MMBtu's.  
In addition, outstanding futures, swap and option contracts related to 
electricity had an absolute notional contract quantity of 1,099,000 Mwh as of 
December 31, 1996.  The commodity futures, swaps and option contracts extend 
for a period of up to two years.  The  Company  is  exposed to credit risk in
the  event  of  non-performance  by  the counterparties  and  has
established guidelines to mitigate this risk.

The fair value of the financial instruments  as  of  December 31,
1996 and the average fair value of those instruments held  during
the year are as follows (thousands of dollars):

<TABLE>
<CAPTION>
                                                                              AVERAGE FAIR VALUE
                                FAIR VALUE AS OF                            FOR THE YEAR ENDED (A)
                                    12/31/96                                       12/31/96

PRODUCT                 ASSETS                LIABILITIES             ASSETS                LIABILITIES
<S>                     <C>                   <C>                     <C>                   <C>       
Natural Gas             $     48              $   360                 $     52              $    528
Electricity               $2,296               $2,469                   $1,181                $1,476

<FN>
         (a) Computed using the ending balance at each month end.
</FN>
</TABLE>

NOTE 8 - 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 $16 million  annually  in  1997
through  2001,  and  $124 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.

PURCHASE COMMITMENTS
Purchase commitments outstanding  (principally construction
at PGE) which include coal and railroad service agreements 
totaled approximately $63 million  at  December 31, 1996.
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, 1996                         $200,011         $186,785         $209,130          $183,920         $ 36,825
PGE's current share of:
   Output                                     12.0%            13.9%            18.7%             21.8%             100%
   Net capability (megawatts)                   154              128              194               177               36
   Annual cost, including debt service:
      1996                                   $5,300           $3,700           $4,700            $5,700           $4,300
      1995                                    4,900            3,900            4,700             5,700            4,300
      1994                                    4,500            3,400            4,800             6,600            4,600
Contract expiration date                       2011             2005             2009              2018             2017
</TABLE>

PGE's share of debt service costs, excluding  interest,  will  be
approximately  $8  million  for  1997,  $5  million  for 1998, $6
million for 1999 and 2000, and $7 million for  2001.  The minimum
payments through the remainder of the contracts  are estimated to
total $87 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 $26 million in 1997 through 1999, $23 million
in 2000, and $21  million  in  2001.   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 $22
million  for  1996,  1995  and  1994.   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>
 1997                            $ 3,016                $ 19,988                    $ 23,004
 1998                              3,016                  19,446                      22,462
 1999                              1,388                  20,007                      21,395
 2000                                  -                  20,053                      20,053
 2001                                  -                  20,326                      20,326
Remainder                              -                 190,800                     190,800
 Total                             7,420                $290,620                    $298,040
Imputed Interest                    (670)
Present Value of
Minimum Future
Net Lease Payments               $ 6,750
</TABLE>


Included  in the future minimum operating lease payments schedule  above
is  approximately   $124   million  for  Portland  General's  and  PGE's
headquarters complex.

                                      50
                                    <PAGE>

NOTE 9 - 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  in October 1990.
Revenues from the WAPA sales contract and market sales are used to support the  
carrying
value  of  PGE's  investment.   A  portion  of  the energy under the WSA
contract is sold at market prices.

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 which began in 1987.  In exchange, PGE will make available to BPA 
energy from
its combustion turbines or from  other available sources at an agreed-to
price.

In light of declining market prices  for  wholesale power, an evaluation
of  expected  future   cash  flows  was completed  in  late  1996.   The
Company's  best estimates, given reasonable  operating  assumptions  and
revenue projections, show that cash flow is expected to be sufficient to
support the carrying value of PGE's investment.

PGE will continue  to  monitor  related  cash  flows  in  light  of  the
continued  competitive  pressure  on  electricity  prices,  as  well  as
possible changes in contractual terms, conditions, and obligations.


NOTE 10 - JOINTLY-OWNED PLANT

At December 31, 1996, 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            $375,133         $188,352
Colstrip 3&4       Colstrip, MT        Coal      1,440             20.0             452,762          205,259
Centralia          Centralia, WA       Coal      1,310              2.5               9,715            5,880
</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 - LEGAL MATTERS

BONNEVILLE PACIFIC LAWSUIT - On  October  7,  1996  the bankruptcy court
approved  the settlement entered into by Portland General  and  Portland
General  Holdings  (collectively  referred  to  as  Portland)  with  the
Bonneville   Pacific   Corporation's   (Bonneville)  bankruptcy  trustee
(Trustee).   Pursuant  to  the settlement,  Bonneville  and  its  estate
released all claims and causes  of  action,  including those asserted in
the Trustee's civil action against Portland and  its  current and former
officers  and  directors.  In exchange, Portland released  any  and  all
claims  against  Bonneville,   its   estate  and  related  entities  and
individuals  relating  to  its  equity  investment   in   and  loans  to
Bonneville,  except  that  Portland  will retain ownership of 2  million
shares  of Bonneville common stock.  The  settlement with the trustee 
will  not  have  a
material impact on Portland General's results of operations.

In early  1997  Portland  received  payments  for certain litigation and
settlement  costs in other matters related  to  the  Bonneville Pacific  
lawsuit.   These payments will be recognized into income during the 
first quarter of 1997.

TROJAN INVESTMENT RECOVERY - In April  1996  a  circuit  court  judge in
Marion  County,  Oregon  found that the OPUC could not authorize PGE  to
collect a return on its undepreciated investment in Trojan contradicting
a November 1994 ruling from  the  same court.  The ruling was the result
of an appeal of PGE's 1995 general rate order which granted PGE recovery
of, and a return on, 87 percent of its remaining investment in Trojan.

                                    51
                                  <PAGE>


The November 1994 ruling, by a different judge of the same court, upheld
the Commission's 1993 Declaratory Ruling  (DR-10).   In  DR-10 the  OPUC
ruled  that  PGE  could  recover  and earn a return on its undepreciated
Trojan investment, provided certain conditions were met.  The Commission
relied on a 1992 Oregon Department  of  Justice  opinion  issued  by the
Attorney  General's office stating that the Commission had the authority
to set prices  including  recovery of and on investment in plant that is
no longer in service.

The 1994  ruling was appealed  to the Oregon Court of Appeals and stayed
pending the appeal of the Commission's  March  1995 order.  Both PGE and
the  OPUC  have  separately appealed the April 1996  ruling  which  were
combined with the appeal of the November 1994 ruling at the Oregon Court
of Appeals.

Management believes  that  the  authorized recovery of and on 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.

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.


NOTE 12 - 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
$24 million and will be paid from current operating funds.

DECOMMISSIONING - In 1996, PGE received approval  of the decommissioning
plan  submitted  to  the NRC and EFSC during 1995.  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   1996  dollars,  the  current
decommissioning cost estimate is $256 million.

<TABLE>
<CAPTION>
       TROJAN DECOMMISSIONING LIABILITY
            (thousands of dollars)
<S>                                 <C>
Estimate - 12/31/94                 $351,294
Updates filed with NRC - 11/16/95      7,084
                                     358,378
Expenditures through 12/31/96        (24,144)
Liability - 12/31/96                $334,234

Decommissioning                     $334,234
Transition costs                      23,610
Total Trojan obligation             $357,844
</TABLE>

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 1996 to
cover the costs of planning and licensing activities in support  of  the
independent  spent  fuel storage installation and the reactor vessel and
internals  removal project.  Decommissioning funds are
invested primarily  in  investment-grade,  tax-exempt  and U.S. Treasury
bonds.  Year-end balances are valued at market.

Earnings  on  the trust fund 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.

                                   52
                                 <PAGE>

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  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.

<TABLE>
<CAPTION>
       DECOMMISSIONING TRUST ACTIVITY
            (thousands of dollars)
<S>                                 <C>        <C>
Beginning Balance                   $68,774    $58,485
ACTIVITY
 Contributions                       15,435     16,598
 Gain                                 2,127      7,212
Disbursements                        (7,888)   (13,521)

Ending Balance                      $78,448    $68,774

</TABLE>

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 five 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 financial protection 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.


NOTE 13 -SCE CONTRACT TERMINATION AGREEMENT

In March 1996, PGE and SCE entered into a termination agreement  for the
Power Sales Agreement between the two companies.  The FERC and the  CPUC
have approved terms and conditions of the agreement.

The  agreement  requires  that  SCE pay PGE $141 million over the next 6
years ($15 million per year in 1997  through  1999  and  $32 million per
year in 2000 through 2002).  PGE recorded a discounted receivable in
the  amount  of  $112.7  million of which $1.25 million was received in 1996.
Disposition  of  the gain has  been
deferred  pending  OPUC  determination  of  the  appropriate  regulatory
treatment.

                                   53
                                 <PAGE>

            QUARTERLY COMPARISON FOR 1996 AND 1995 (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>
1996
Operating revenues                       $300,581      $233,425     $260,091       $317,719
Net operating income                       66,744        51,675       44,742         61,398
Net income                                 49,362        33,679       20,541         25,954
Common stock
Average shares outstanding             51,063,105    51,109,790   51,158,923     51,243,669
Earnings per average share{1}               $ .97          $.66         $.40           $.51


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

<FN>
{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.
</FN>
</TABLE>


PORTLAND GENERAL ELECTRIC COMPANY
<TABLE>
<CAPTION>
                                       MARCH 31      JUNE 30      SEPTEMBER 30   DECEMBER 31
                                                        (THOUSANDS OF DOLLARS)
<S>                                    <C>           <C>          <C>            <C>
1996
Operating revenues                     $300,195      $232,921     $259,656       $317,059
Net operating income                     66,816        51,850       45,514         60,566
Net income                               50,104        34,914       27,919         42,978
Income available for
 common stock                            49,118        34,269       27,338         42,397


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

</TABLE>

                                     54
                                   <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 May 27,  1997.   Executive
officers of Portland General are listed on page 21 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 May 27, 1997.  Executive
officers of Portland General Electric are listed on page 21 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    66
   Consolidated Statements of Income for each of the three years
    in the period ended December 31, 1996                           35    67
   Consolidated Statements of Retained Earnings for each of
     the three years in the period ended December 31, 1996          35    67
   Consolidated Balance Sheets at December 31, 1996 and 1995        36    68
   Consolidated Statement of Cash Flows for each of the three
     years in the period ended December 31, 1996                    37    69
   Notes to Financial Statements                                    38    70

   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 1, 1996 - Item 5.  Other Events:                         X     X
   The OPUC staff revised response to rate plan.

                                      55
                                    <PAGE>


(B) REPORT ON FORM 8-K                                               PGC   PGE

   November 12, 1996 - Item 5.  Other Events:                        X     X
   Shareholders approve merger with Enron Corp.

   November 12, 1996 - Item 5.  Other Events:                        X     X
   The OPUC staff stipulation for settlement on rate proposal.

   November 26, 1996 - Item 5.  Other Events:                        X     X
   The OPUC approves rate settlement.

   January 16, 1997 - Item 5.  Other Events:                         X     X
   Preliminary merger recommendation from the OPUC staff.

   January 24, 1997 - Item 5.  Other Events:                         X     X
   Settlement conferences suspended.

   February 14, 1997 - Item 5.  Other Events:                        X     X
   Settlement conferences continued.

                                     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



March 3, 1997                     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        March 3, 1997
  Ken L. Harrison


                               Senior Vice President,
/S/ JOSEPH M. HIRKO            Chief Financial Officer        March 3, 1997
  Joseph M. Hirko


    *Gwyneth Gamble Booth
      Peter J. Brix
    *Carolyn S. Chambers
    *John W. Creighton, Jr.
    *Richard Geary
    *Ken L. Harrison
    *Jerry E. Hudson           Directors                      March 3, 1997
    *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



March 3, 1997                    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         March 3, 1997
Ken L. Harrison


                             Senior Vice President
/S/ JOSEPH M. HIRKO          Chief Financial Officer         March 3, 1997
Joseph M. Hirko



    *Gwyneth Gamble Booth
      Peter J. Brix
    *Carolyn S. Chambers
    *John W. Creighton, Jr.
    *Ken L. Harrison
    *Jerry E. Hudson          Directors                      March 3, 1997
    *Richard Geary
    *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

NUMBER  EXHIBIT                                                       PGC   PGE

(2)       PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, 
          LIQUIDATION OR SUCCESSION

        * Amended and Restated Agreement and Plan of Merger, dated 
          as of July 20, 1996 and amended and restated as of 
          September 24, 1996 among Enron Corp, Enron Oregon Corp 
          and Portland General Corporation [Amendment 1 to 
          S4 Registration Nos. 333-13791 and 333-13791-1, dated 
          October 10, 1996, Exhibit No. 2.1].                         X     X

(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;

        * Fortieth Supplemental Indenture, dated October 1,
          1990 [Form 10-K for the fiscal year ended December 31,
          1990, Exhibit (4)].                                         X     X

                                        59
                                      <PAGE>

                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

NUMBER  EXHIBIT                                                       PGC   PGE

(4)     * Forty-First Supplemental Indenture dated December 1,
CONT.     1991 [Form 10-K for the fiscal year ended December 31,      X     X
          1991, Exhibit (4)].

        * 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

          Forty-Sixth Supplemental Indenture dated August 1, 1996
          (Filed herewith).                                           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

                                    60
                                  <PAGE>

                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

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, 1996 Restatement
          dated January 1, 1996 [Form 10-Q for the quarter
          ended June 30, 1996, Exhibit (10)].                         X     X

        * Portland General Corporation Outside Directors'
          Deferred Compensation Plan, Amendment No. 1
          dated October 18, 1996 [Form 10-Q for the quarter
          ended June 30, 1996, Exhibit (10)].                         X     X

          Portland General Corporation Outside Directors'
          Deferred Compensation Plan, 1996 Restatement,
          Amendment No. 2 dated November 4, 1996
          (filed herewith).                                           X     X

                                      61
                                    <PAGE>

                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

NUMBER  EXHIBIT                                                       PGC   PGE

(10)    * Portland General Corporation Retirement Plan for
CONT.     Outside Directors, 1996 Restatement dated January 1, 1996
          [Form 10-Q for the quarter ended June 30, 1996,
          Exhibit (10)].                                              X     X

        * Portland General Corporation Outside Directors' Life
          Insurance Benefit Plan, 1996 Restatement dated
          January 1, 1996 [Form 10-Q for quarter ended
          June 30, 1996, Exhibit (10)].                               X     X

        * Portland General Corporation Outside Directors' Life
          Insurance Benefit Plan, 1996 Restatement, Amendment
          No. 1 dated September 10, 1996 [Form 10-Q for the
          quarter ended September 31, 1996, Exhibit (10)].            X     X

        * Portland General Corporation Outside Directors' Stock
          Compensation Plan, Amended and Restated December 6,
          1996 [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 October 2,
          1996 (filed herewith).                                      X

               EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS

        * Portland General Corporation Management Deferred
          Compensation Plan, 1996 Restatement dated January 1,
          1996 [Form 10-Q for the quarter ended June 30, 1996,
          Exhibit (10)].                                              X     X

        * Portland General Corporation Management Deferred
          Compensation Plan, Amendment No. 1 dated October 18,
          1996  [Form 10-Q for the quarter ended June 30, 1996,
          Exhibit (10)].                                              X     X.

          Portland General Corporation Management Deferred
          Compensation Plan, 1996 Restatement, Amendment No. 2
          dated November 4, 1996 (filed herewith).                    X 

        * Portland General Corporation Senior Officers Life
          Insurance Benefit Plan, 1996 Restatement Amendment No. 1
          dated October 22, 1996 [Form 10-Q for the quarter ended
          March 31, 1996, 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

                                        62
                                      <PAGE>

                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

NUMBER  EXHIBIT                                                       PGC   PGE

(10)    * Portland General Electric Company Annual Incentive Master
CONT.     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, 1996 Restatement dated January 1, 1996
          [Form 10-Q for the quarter ended March 31, 1996,
          Exhibit (10)].                                              X     X

        * Portland General Corporation Supplemental Executive
          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)].                                              X     X

          Portland General Corporation Amended and Restated 1990
          Long-Term Incentive Master Plan, 1996 Restatement
          dated September 10, 1996 (filed herewith).                  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

                                       63
                                     <PAGE>

                   PORTLAND GENERAL CORPORATION AND SUBSIDIARIES

                                   EXHIBIT INDEX

NUMBER  EXHIBIT                                                       PGC   PGE

(99)      ADDITIONAL EXHIBITS

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

_________________________________
* Incorporated by reference as indicated.



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

                                       64
                                     <PAGE>

                                    APPENDIX




                        PORTLAND GENERAL ELECTRIC COMPANY





                                TABLE OF CONTENTS


PART II
                                                                  PAGE

    ITEM 8.  FINANCIAL STATEMENTS AND NOTES ...................... 67

                                       65
                                     <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 Shareholder of
    Portland General Electric Company:

We  have  audited the accompanying  consolidated  balance  sheets  of  Portland
General Electric Company and subsidiaries as of December 31, 1996 and 1995, and
the related consolidated statements of income, retained earnings and cash flows
for each of  the  three  years  in  the  period ended December 31, 1996.  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, 1996 and 1995, and the results of
their operations and their cash flows for each of the three years in the period
ended  December  31,  1996 in conformity  with  generally  accepted  accounting
principles.

                                                           Arthur Andersen LLP

Portland, Oregon,
January 20, 1997

                                        66
                                      <PAGE>

              PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31                                        1996          1995           1994
                                                                             (THOUSANDS OF DOLLARS)
<S>                                                                    <C>           <C>            <C>
 OPERATING REVENUES                                                    $ 1,109,831   $ 981,628      $ 958,955
 OPERATING EXPENSES
  Purchased power and fuel                                                 316,729     293,589        347,125
  Production and distribution                                               81,968      63,841         61,891
  Maintenance and repairs                                                   55,508      47,532         47,389
  Administrative and other                                                 111,308     106,128         97,987
  Depreciation and amortization                                            154,586     134,340        124,003
  Taxes other than income taxes                                             52,325      51,489         52,038
  Income taxes                                                             112,661      89,523         75,314
                                                                           885,085     786,442        805,747
NET OPERATING INCOME                                                       224,746     195,186        153,208
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                                                                      5,234       8,415         15,500
  Income taxes                                                               1,451       4,272            377
                                                                             6,685     (33,623)        16,148
INTEREST CHARGES
  Interest on long-term debt and other                                      68,116      69,667         61,493
  Interest on short-term borrowings                                          9,042       6,917          5,788
  Allowance for borrowed funds used during construction                     (1,642)     (7,808)        (4,043)
                                                                            75,516      68,776         63,238
NET INCOME                                                                 155,915      92,787        106,118
PREFERRED DIVIDEND REQUIREMENT                                               2,793       9,644         10,800
INCOME AVAILABLE FOR COMMON STOCK                                       $  153,122   $  83,143       $ 95,318



                         PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

<CAPTION>

FOR THE YEARS ENDED DECEMBER 31                                        1996          1995           1994
                                                                              (THOUSANDS OF DOLLARS)
<S>                                                                    <C>           <C>            <C>
BALANCE AT BEGINNING OF YEAR                                           $ 246,282     $ 216,468      $ 179,297
NET INCOME                                                               155,915        92,787        106,118
ESOP TAX BENEFIT & OTHER                                                  (2,093)       (3,570)        (1,705)
                                                                         400,104       305,685        283,710
DIVIDENDS DECLARED
  Common stock                                                           105,187        50,456         56,442
  Preferred stock                                                          2,793         8,947         10,800
                                                                         107,980        59,403         67,242
BALANCE AT END OF YEAR                                                 $ 292,124     $ 246,282      $ 216,468

<FN>
The accompanying notes are an integral part of these consolidated statements.
</FN>

</TABLE>

                                        67
                                      <PAGE>

              PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
AT DECEMBER 31                                               1996                   1995
<S>                                                          <C>                     <C>
                                                                  (THOUSANDS OF DOLLARS)

                             ASSETS
ELECTRIC UTILITY PLANT - ORIGINAL COST
  Utility plant (includes Construction Work in Progress of
  $36,919 and $33,382)                                       $ 2,899,746             $ 2,754,280
  Accumulated depreciation                                    (1,124,337)             (1,040,014)
                                                               1,775,409               1,714,266
  Capital leases - less amortization of                            6,750                   9,353
   $30,569 and $27,966
                                                               1,782,159               1,723,619
OTHER PROPERTY AND INVESTMENTS
  Contract termination receivable                                111,447                       -
  Trojan decommissioning trust, at market                         78,448                  68,774
   value
  Corporate Owned Life Insurance, less loans                      51,410                  44,635
   of $ 26,411 and $26,432
  Other investments                                               20,700                  24,943
                                                                 262,005                 138,352
CURRENT ASSETS
  Cash and cash equivalents                                       19,477                   2,241
  Accounts and notes receivable                                  145,372                 102,592
  Unbilled and accrued revenues                                   53,317                  64,516
  Inventories, at average cost                                    32,903                  38,338
  Prepayments and other                                           16,476                  15,619
                                                                 267,545                 223,306
DEFERRED CHARGES
  Unamortized regulatory assets
    Trojan investment                                            275,460                 301,023
    Trojan  decommissioning                                      282,131                 311,403
    Income taxes recoverable                                     195,592                 217,366
    Debt reacquisition costs                                      28,063                  29,576
    Conservation investments - secured                            80,102                       -
    Energy efficiency programs                                    11,974                  77,945
    Other                                                         22,575                  24,322
  WNP-3 settlement exchange agreement                            163,217                 168,399
  Miscellaneous                                                   27,389                  30,286
                                                               1,086,503               1,160,320
                                                             $ 3,398,212             $ 3,245,597

                    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                                   475,055                 466,325
   Retained Earnings                                             292,124                 246,282
  Cumulative preferred stock
   Subject to mandatory redemption                                30,000                  40,000
  Long-term debt                                                 933,042                 890,556
                                                               1,890,567               1,803,509
CURRENT LIABILITIES
  Long-term debt and preferred stock due                          92,559                  75,114
   within one year
  Short-term borrowings                                           92,027                 170,248
  Accounts payable and other accruals                            144,712                 132,064
  Accrued interest                                                14,372                  15,442
  Dividends payable                                               17,117                  14,956
  Accrued taxes                                                   31,485                  12,870
                                                                 392,272                 420,694
OTHER
  Deferred income taxes                                          497,734                 525,391
  Deferred investment tax credits                                 47,314                  51,211
  Deferred gain on contract termination                          112,697                       -
  Trojan decommissioning and transition costs                    357,844                 379,179
  Miscellaneous                                                   99,784                  65,613
                                                               1,115,373               1,021,394
                                                             $ 3,398,212             $ 3,245,597
        
<FN>
        The accompanying notes are an integral part of
        these consolidated balance sheets.
</FN>

</TABLE>

                                     68
                                   <PAGE>

                      PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
                              CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>

FOR THE YEARS ENDED DECEMBER 31                                   1996            1995            1994
                                                                          (THOUSANDS OF DOLLARS)
<S>                                                               <C>             <C>             <C>
CASH PROVIDED (USED IN)
  OPERATIONS:
      Net Income                                                  $ 155,915       $  92,787        $ 106,118
      Non-cash items included in net income:
          Depreciation and amortization                             118,845         102,183           94,140
          Amortization of WNP-3 exchange agreement                    5,182           4,910            4,695
          Amortization of Trojan investment                          24,244          24,884           26,738
          Amortization of Trojan decommissioning                     14,041          13,336           11,220
          Amortization of deferred charges - other                    5,397          (1,777)           2,712
          Deferred income taxes - net                                (9,071)          1,714           25,720
          Regulatory disallowances                                        -          49,567                -
     Changes in working capital:
         (Increase) Decrease in receivables                         (32,025)        (11,539)         (29,678)
         (Increase) Decrease in inventories                           5,435          (7,189)           3,264
          Increase (Decrease) in payables                            38,233          13,196           (3,470)
         Other working capital items - net                             (841)          1,946          (20,754)
     Trojan decommissioning expenditures                             (8,231)        (10,927)          (3,360)
     Deferred items - other                                          34,772          (9,472)          13,987
     Miscellaneous - net                                              5,464           8,871            7,103
                                                                    357,360         272,490          238,435
INVESTING ACTIVITIES:
     Utility construction - new resources                                 -         (49,096)         (87,537)
     Utility construction - other                                  (184,717)       (158,198)        (131,675)
     Energy efficiency programs                                     (12,318)        (25,013)         (23,745)
     Nuclear decommissioning trust deposits                         (15,435)        (16,598)         (11,220)
     Nuclear decommissioning trust withdrawals                        7,888          13,521                -
     Other investments                                               (4,431)         (8,624)          (9,954)
                                                                   (209,013)       (244,008)        (264,131)
FINANCING ACTIVITIES:
     Short-term debt - net                                          (78,221)         21,650           18,678
     Borrowings from Corporate Owned Life Insurance                       -           4,679           21,731
     Long-term debt issued                                          170,590         147,138           74,631
     Long-term debt retired                                         (97,661)        (69,445)         (29,882)
     Preferred stock retired                                        (20,000)        (79,704)         (20,000)
     Common stock issued                                                  -               -           41,055
     Dividends paid                                                (105,819)        (60,149)         (73,026)
                                                                   (131,111)        (35,831)          33,187
INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                                   17,236          (7,349)           7,491
CASH AND CASH EQUIVALENTS AT THE BEGINNING
  OF YEAR                                                             2,241           9,590            2,099
CASH AND CASH EQUIVALENTS AT THE END
  OF YEAR                                                          $ 19,477         $ 2,241          $ 9,590
______________________________________________________________________________________________________________
Supplemental disclosures of cash flow information
   Cash paid during the year:
      Interest, net of amounts capitalized                         $ 73,396        $ 64,136         $ 55,995
      Income taxes                                                  108,277          94,327           44,918
______________________________________________________________________________________________________________
<FN>
The accompanying notes are an integral part of these
consolidated statements.
</FN>
</TABLE>

                                         69
                                       <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 6A.  Long-Term Debt                                       47
    Note 7A.  Other Financial Instruments                          48
    Note 8A.  Commitments                                          49
    Note 9A.  WNP-3 Settlement Exchange Agreement                  51
    Note 10A. Jointly-Owned Plant                                  51
    Note 11A. Legal Matters                                        51
    Note 12A. Trojan Nuclear Plant                                 52
    Note 13A. SCE Contract Termination Agreement                   53


Management's Discussion and Analysis of Financial
Condition and Results of Operations                                24

                                     70
                                   <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>
                                        1996               1995              1994
<S>                                     <C>                <C>               <C>
 Income Tax Expense
   Currently payable
      Federal                           $ 98,320           $ 74,089          $ 40,680
      State & local                       21,963              9,448             8,536
                                         120,283             83,537            49,216
   Deferred income taxes
      Federal                             (4,500)           (11,631)           24,856
      State & local                         (676)            (6,648)            4,811
                                          (5,176)           (18,279)           29,667
   Investment tax credit adjustments      (3,897)            (5,549)           (3,946)
                                        $111,210           $ 59,709          $ 74,937
 Provision Allocated to:
   Operations                           $112,661           $ 89,523          $ 75,314
   Other income and deductions            (1,451)           (29,814)             (377)
                                        $111,210           $ 59,709          $ 74,937
 Effective Tax Rate Computation:
  Computed tax based on statutory
  federal income tax rates applied
  to income before income taxes         $ 93,494           $ 53,374          $ 63,369
   Flow through depreciation               9,460              7,389             8,080
   Regulatory disallowance                     -              3,456                 -
   State and local taxes - net            11,975              5,552             9,839
   State of Oregon refund                      -             (4,346)                -
   Investment tax credits                 (3,897)            (5,549)           (3,946)
   Excess deferred tax                      (750)              (700)             (767)
   Other                                     928                533            (1,638)
                                        $111,210           $ 59,709          $ 74,937
   Effective tax rate                      41.6%              39.2%             41.4%
</TABLE>


                                       71
                                     <PAGE>

As  of December 31, 1996 and 1995, the significant components of PGE's deferred
income tax assets and liabilities were as follows (thousands of dollars):

<TABLE>
<CAPTION>
                                     1996                  1995
<S>                                  <C>                   <C>
DEFERRED TAX ASSETS
Plant-in-service                     $   64,471            $   86,721
Other                                    20,563                23,339
                                         85,034               110,060
DEFERRED TAX LIABILITIES
Plant-in-service                       (414,417)             (448,049)
Energy efficiency programs              (32,026)              (30,314)
Trojan abandonment                      (69,315)              (54,335)
WNP-3 exchange contract                 (59,302)              (60,489)
Other                                    (7,897)              (42,470)
                                       (582,957)             (635,657)
Less current deferred taxes                 189                   206
Total                                 $(497,734)            $(525,391)
</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.



NOTE 4A - COMMON STOCK

<TABLE>
<CAPTION>

                                                COMMON   STOCK
                                       Number of            $3.75 Par           Other Paid-in       Unearned
                                       Shares               Value               Capital             Compensation
                                                                                    (thousands of dollars)
<S>                                    <C>                  <C>                 <C>                 <C>
                                                                              
 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)
   Redemption of preferred stock                -                   -              2,195                   -
   Repayment of ESOP loan and other             -                   -              1,677               4,858
 December 31, 1996                     42,758,877            $160,346           $477,311             $(2,256)
</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, 1996, PGE's common stock equity capital  was
49% of its total capitalization.

                                        72
                                      <PAGE>

NOTE 5A - SHORT-TERM BORROWINGS

At December 31, 1996, PGE  had total committed lines of credit of $220 million.
PGE has a committed facility of  $200  million  expiring  in July 2000. The 
line of
credit  has  an  annual  fee  of 0.10% and does 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, 1996, 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>
                                                        1996               1995               1994
<S>                                                     <C>                <C>                <C>
AS OF YEAR-END:                                               (thousands of dollars)
   Aggregate short-term debt outstanding
     Commercial paper                                   $ 83,027           $170,248           $148,598
     Bank loans                                            9,000                  -                  -
   Weighted average interest rate*
     Commercial paper                                       5.6%               6.1%               6.2%
     Bank loans                                             7.3
    Unused committed lines of credit                    $200,000           $200,000           $200,000
FOR THE YEAR ENDED:
    Average daily amounts of short-term
    debt outstanding
     Commercial paper                                    158,259            111,366            126,564
     Bank loans                                          $ 5,265           $    206          $   1,273    
    Weighted daily average interest rate*
     Commercial paper                                       5.6                6.3                4.6     
     Bank loans                                             5.7%               6.5%               4.3%
    Maximum amount outstanding
     during the year                                    $251,462           $170,248           $159,482

<FN>
            * Interest rates exclude the effect  of  commitment  fees, facility
fees and other financing fees.
</FN>
</TABLE>

                                         73
                                       <PAGE>