Good morning, everyone, and welcome to Portland General Electric Company's first quarter 2010 earnings results conference call. Today is Tuesday, May 4, 2010. (Operator Instructions) For opening remarks, I would like to turn the conference call over to Portland General Electric's Director of Investor Relations, Mr. Bill Valach.

Before we begin our discussion this morning, I'd like to make our customary statements regarding Portland General Electric's written and oral disclosures and commentary that there will be statements in this call that are not based on historical facts and as such constitute forward-looking statements under current law. These statements are subject to factors that may cause actual results to differ materially from the forward-looking statements made today. For a description of some of the factors that may occur that could cause such differences, the company requests that you read our most recent Form 10-K and Form 10-Qs. The Form 10-Q for 2010 was available this morning at portlandgeneral.com. The company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise, and this Safe Harbor statement should be incorporated as part of any transcript of this call. Portland General Electric's first quarter earnings were released before the market opened today and the release is available at portlandgeneral.com. Leading our discussion today are Jim Piro, President and CEO; and Maria Pope, Senior Vice President of Finance, CFO and Treasurer. Jim will begin today's presentation by providing a general overview of the quarter's results and our strategic capital projects. Then Maria will provide more detail around the quarter's results and key regulatory proceedings. Following those prepared remarks, we will open the lines up for your questions. Now it's a pleasure to turn the call over to Jim.

Welcome to Portland General Electric's first quarter 2010 earnings call. PGE's net income for first quarter 2010 was $27 million or $0.36 per diluted share compared to $31 million or $0.47 per diluted share for the first quarter of 2009. We are reaffirming our full year 2010 earnings guidance of $1.30 to $1.45 per diluted share. As we discussed in our last call, we continue to face challenges due to weather-related events and the effects of the weak economy. During the first quarter, the Portland metropolitan area experienced the third warmest average temperature on record. This warmer weather led to a decline in residential energy deliveries. The continued effects of the economic downturn also led to a decline in commercial and industrial energy deliveries. Hydro conditions continued to be below normal quarter-over-quarter, and the current hydro forecast indicates that we're about 75% of normal. However, better than expected thermal plant operations helped to partially offset this impact. Maria will go into more details later on the call. In Oregon, the unemployment rate came in at 10.6% in March, down from the recession high of 11.6% in mid-2009. This compares to the national unemployment rate of 9.7% for the same period. The drop in Oregon's recent jobless rate results from a stabilization of Oregon's labor force and improving job market. Oregon continued to attract in-migration, ranking second after Washington, D.C. Despite continued customer growth of approximately 1.5%, total retail energy deliveries decreased by 9% or 3.3% on a weather-adjusted basis quarter-over-quarter. For 2010, we project that weather-adjusted retail energy deliveries will remain essentially flat relative to 2009. We expect energy deliveries to paper product manufacturers to be lower than 2009. However, this decline will be offset by a moderate increase in deliveries to other existing industrial customers, including those in the…

Good morning. First quarter 2010 net income was $27 million or $0.36 per diluted share. This compares to $31 million or $0.47 per diluted share for the first quarter of 2009. Operating results for the first quarter were impacted by warmer weather, the continued effects of a weak economy and unfavorable hydro conditions relative to the first quarter of 2009. While we saw customer growth of about 0.5% compared to first quarter of 2009, retail revenues were affected by weather, the economy and lower retail pricing. Residential energy sales increased 13%. Warmer than normal weather in the first quarter of 2010 compared to colder than normal in the first quarter of 2009 and resulted in an 11% impact, while the weak economy resulted in a 2% impact. The effects of a weak economy contributed to a 5% decrease in energy deliveries to commercial and industrial customers quarter-over-quarter. On a weather-adjusted basis, total retail energy deliveries decreased a combined 3.3% quarter-over-quarter, 2.2% for residential customers, 3.3% for commercial customers and 6% for industrial customers. In the first quarter, overall customer prices decreased approximately 1.2%. This consisted of a 4.1% decrease as a result of our annual update of the net variable power cost, offset by a 2.5% increase primarily from Biglow Canyon Phase II coming into process, as well as a 0.6% increase related to the Selective Water Withdrawal project. Average variable power cost decreased 6% in the first quarter of 2010, compared to the first quarter of 2009, due to an increase in the power provided by PGE-owned generating resources and a decrease in the cost of fuel used in natural gas-fired production. For the first quarter of 2010, we saw an approximate 11% decrease in the average cost of natural gas-fired production, as well as good performance from PGE's…

Thank you, Maria. During this first quarter, we continued to make progress on executing strategic investments such as Biglow Canyon Wind Farm and some smart meters projects. Through a constructive regulatory process, we're working towards positive outcomes for both our 2011 general rate case and our 2009 Integrated Resource Plan. Looking ahead, we continue to position ourselves for upcoming growth opportunities, including significant investments in generation, transmission, distribution and new technology. Operator, we'd now like to open the call for questions.

(Operator Instructions) Our first question comes from the line of Brian Russo with Ladenburg Thalmann.

Could you just remind us the sales forecast embedded in the 2011 rate case? And given at the first quarter of this year, are you still comfortable with it?

As you know, we put the lower forecast to gather lead late last year, and that's put into the rate case. And then during the year, we update that forecast as we get more information from the Oregon Economic Development Commission in terms of what that growth looks like in Oregon. So that's what going on there. And so we do get a chance to update. Maria, do you have the specifics on that?

Sure. Just for background, our lows were obviously off in 2009, the base year, that we used for our 2011 rate case filings. We have projected largely flat for 2010 as well as for 2009. And as we look at the split between the residential, commercial and industrial, we had expected residential to continue to be slightly down, while commercial and industrial to be slightly up, as we expect to be coming out of the recession off of the lows in 2009.

Essentially flat 2011?

Flat 2011.

And any updated thoughts on the timing and the size of the expected 2011 equity offerings? Did you bag the 50% equity ratio?

Sure. As you know, in our rate case, we have noted that we would be looking to issue equity in the tail-end of 2011. At this point, we don't have any updates. Obviously, depending on capital market, our performance and the outcome, most importantly of the IRP and RFP progresses, we will be evaluating what we'll do.

Okay. And then lastly, just talk a little bit more about kind of the rate case cycles that you expect going forward in Oregon once this 2011 rate case is finalized. You clearly got some decent IRP-related projects, and I am wondering how the approval process of that may be dictated if and when you need to file for another general rate case?

There is a couple of factors that go into the way we might file a subsequent rate case. First of all, as you know, any new renewables that we would add would go through Renewable Adjustment Clause mechanism. So those will be able to be tracked in directly. New thermal resources, our new transmission line would have to go through a general rate case process. The current expectation on those projects wouldn't be completed till 2013 through the 2015 timeframe. So we would probably be looking at a rate case to track in those costs. And then the other factor obviously is the growth in sales and the overall economy. To the extent we have reasonable growth, we cannot set some of our increases in cost through that additional margin. So those other factors we'll look at as we determine whether we would have to file a rate case for 2012 or '13 and beyond. So that's kind of way we're thinking about it right now. Maria, do you have anything to add to that?

No. I would say we're probably looking at the some more frequent rate cases than we have in the past and very much focused on achieving some of our policy objectives in addition to recovering our cost to meet reliable service in 2011.

Our next question comes from the line of [Eric McCarthy] with Praesidis Asset Management.

Just to clarify, the $17 million for Biglow, is that additive to the 125 or is that included in the 125.

The $17 million is for the deferred net revenue requirements during 2010 under the Renewable Energy Adjustment Clause, which is a mechanism that allows us to track in 100% of the net cost. We're able to do that through deferred accounting during the year that the plan goes into service. And then in 2011, it is in there for a full year in our overall revenue requirements included in the general rate case. So the 17 million is only for the partial year based on the projection of when we think those units will be coming online.

And then it looks like you lowered CapEx for the Biglow Canyon III by about $35 million. So what's the primary driver behind that? I'm sorry if I missed it.

Okay. Maria will tell that to you.

Sure. We're doing really well on executing our capital expenditure projects. And in particular, Biglow Canyon Phase III is coming in right on budget, and this is the result any contingencies as well an additional savings that we have been able to realize we are achieving and we've reduced our estimates by about $35 million at this time.

Okay. So it's just coming in under budget then?

Yes, we had assumed some contingencies given that project, and the schedule is going forward, and we're being able to capture those contingencies based on the delivery of the turbines and the good work that contractor is going to get that project completed.

Okay. And then the follow-up on Brian's question. I think you said total megawatt-hour volumes were going to be flat in '10 and '11 with '09. Is what (inaudible)?

Yes. Approximately that is what we have expected in the 2011 rate case.

And what is that total megawatt-hour volume? Is that 17.5?

Maria, look it up. But just as a general course, we will continue to update the load forecast based on new economic information as we go through this year. I think the latest forecast, including the general rate case, will be in the September timeframe. So we'll continue to update it based on the economic activity, watching closely how the economy affects both our industrial and commercial customers and then how residential use for customer changes over the year. So that's kind of the plan, and we will find the number. Maria?

It looks like that's approximately the number, but I will confirm with you after the call.

And the last question, what are the taxes -- the SB 408 issue is obviously one that's tough to follow. What are taxes that are in rates for 2010, the nominal tax dollar value?

While Maria's doing that, as you know, SB 408 is a complex rule, and we've been working on trying to better understand and simplify that process. We've been working with the other utilities to potentially address that in the next 2011 legislative session. We think that the law just really is very complex for investors to understand, and we are trying to try and resolve some of those issues around 408. So, with that, Maria, so you want to get into this?

Sure. So, we're expecting to have neither a material surcharge or refund for customers in 2010. In 2009, we had a refund of about $13 million.

A specific question you asked around what taxes are in rates? The way you do that, is you go back to the 2009 general rate case and determine essentially the taxes that were included in the approved revenue requirements. And then you have to adjust that going forward for the addition of the Biglow Canyon wind farms and any other changes in our overall cost structure. That's how it's determined. Then we use that as the baseline going forward.

And just last question. It looks like in the first quarter we were helped by mild weather, in that hydro was weak at the same time. If we see a less mild summer, and temperatures are still up but hydro continues to be weak, how is that going to impact us on the [PKM]?

Two questions; we tend to have our winter peak, which we expect cold weather. So the warmer weather actually hurt us from a consumption standpoint because residentials didn't use as much energy as they would typically use under normal weather. Added to that the reduction in hydro because of low snow a pack, those two things kind of were additive. As we think about the rest of the year, we've assumed normal weather going through the rest of the year, and you have to just kind of play it out. If we get a warm summer like we did last year, then that would improve margins and help us on the revenue line. On the cost side, it really depends on how generation plants operate. We expect hydro to be below normal for the rest of the year as we mentioned earlier, and so that would tend to hurt us on that side. So, warmer summers help us, colder summers would hurt us from a revenue standpoint. And then hydro, at least our current forecast is we'll continue to be below normal through the rest of the year.

Our next question comes from the line of James Bellessa with D. A. Davidson & Company. James Bellessa - D.A. Davidson & Company: You indicated that there was lower than expected wind generation during the first quarter. What was the capacity utilization rate? And can you blame it on the El Nino effect as another large developer is using as an excuse?

There is some projections that El Nino can affect the weather patterns and the wind. We do not have enough experience yet to reach that conclusion. But we are looking at it. We're trying to understand it, because wind was down in the first quarter. So I will tell you, the last month, it looks like it's been up. James Bellessa - D.A. Davidson & Company: Do you have specific numbers?

In the first quarter we were at 14% capacity factor, and that compares to about 30% last year. And we really anticipate at a little bit more than that. Last year was interesting that it was only towards the tail-end of the year that we began to see our capacity sectors really drop. So we're watching it pretty closely, and have also seen the comments on the El Nino effect.

We're trying to do some work in the area of wind to get a better forecast. We've been using the metrological data that was tracked when these projects were developed. We're trying to get better information to do a better job forecasting wind, not only for operations, but also for regulatory purposes. And a lot of work is going into that effort. James Bellessa - D.A. Davidson & Company: Did I hear that correctly, that the utilization of the wind farm was 14%, less than a half of what it was a year ago?

Yes, Jim. And that had an impact of being about $3 million less than Q1 last year. James Bellessa - D.A. Davidson & Company: Is that 3 million the revenues or pre-tax?

That was in the pre-tax.

Replacement cost basically, based on expected.

Our next question comes from the line of [Steve Gambuzza with Longbow Capital].

The gain on the non-qualified pension plan in the quarter, the amount that you indicated in the press release, is that a pre-tax or a net income number?

That's a pre-tax number.

Do you exclude those gains from adjusted EPS, or are they included?

We don't do an adjusted EPS or report that way, so we just include it.

So you're not assuming anything in your guidance for that?

No we have not. We just call that within the range.

And I think you may have commented on this. With respect to the collateral postings, if we think about kind of where the balance sheet is right now, and assumed no real changes in commodity prices going forward, how much cash, forget about LC postings, but how much actual cash would come back to you between now and the year 2011?

About $18 million this year, Steve, and then for next year, it is about $46 million.

$46 million, that's the cash. If I'm just trying to think about kind of the impact on your debt to capital of this issue, there's nothing else other than that that's kind of reflected in debt right now?

No, there is not.

(Operator Instructions) Our next question comes from the line of [John Alley] with Decade Capital.

Just some other calls going on this morning, so I apologize if you've already gone over this. Just wanted to go over load growth from 2009 to 2010. I think you said it was flat overall, but I was kind of looking for a customer split, residential versus commercial and industrial.

Sure. We're expecting load to be roughly flat in total; down for residential; pretty much flat for commercial, but down a little bit; and then for industrial, up for what was a very low base in 2009. In the first quarter, we were down in all segments by 2.2% for residential; commercial, 3.3%; and industrial, 6%; for a total of 3.3%.

The forward backload cash is based on weather-adjusted information.

Yes, all of that is weather-adjusted.

So does the decoupling protect you on the residential side of the down?

Yes, it did, and we did have a decoupling adjustment in the first quarter of about $5 million. We also had a decoupling adjustment in the first quarter of last year, but not quite as significant.

Just recall decoupling only deals with use per customer, does not adjust for weather. So we weather-adjust the data. So what we actually saw in the first quarter was a decline in use per customer at the residential level, and that's what we adjusted for, for the use per customer.

And for 2011, you said flat overall again. But what would you expect, I guess, the split to be?

Flat overall, continued slight decrease in residential as people are conserving more, and then with a slight return in the economy, up slightly for commercial and a little bit more for industrial.

Okay. And are you seeing any residential customer growth at all?

We are. We saw 0.5% of new customers in our service territory in the first quarter over the last year.

What you see in Oregon is actually we do see customer growth, but that's offset by efficiency. And we are promoting efficiency in Oregon through the Energy Trust of Oregon in our programs to reduce consumption. And so we're seeing reductions in use per customer, which offsets the growth in number of customers.

Our next question comes from the line of [Eric McCarthy] with Praesidis Asset Management.

Just a quick follow-up on the decoupling. What's the base that that is set on?

The base is from the last general rate case. So when we set rates, in this case 2009, we take that use per residential customer as the baseline. And then when we complete the 2011 rate case to the extent decoupling is in the continued program, we'll use that use per customer that comes out of that case as the baseline. And then on the commercial side, we don't use, use per customer, we do programmatic changes. So the extent the commercial customers implement energy efficiency programs, we would identify those lost revenues and then be able to recapture those lost revenues.

I think the data here that I have is about 11,000 kilowatt per residential customer per year.

That sounds about right from the last rate case. So that's the use per customer that we use as a baseline.

And at this time, there are no further questions. I will turn the conference over to Mr. Jim Piro.

Thanks very much. We appreciate your interest in Portland General Electric and invite you to join us when we report on our second quarter results for 2010. If you have additional questions, please contact Bill Valach who will be available after this call. Thank you again for joining us.

Ladies and gentlemen, this does conclude today's conference. Thank you for your participation. You may now disconnect.