Portland General Electric Company Second Revision of Sheet No. 122-1 P.U.C. Oregon No. E-18 Canceling First Revision of Sheet No. 122-1 PURPOSE SCHEDULE 122 RENEWABLE RESOURCES AUTOMATIC ADJUSTMENT CLAUSE This Schedule recovers the revenue requirements of qualifying Company-owned or contracted new renewable energy resource projects (including associated transmission) not otherwise included in rates. Additional new renewable projects may be incorporated into this schedule as they are placed in service. This adjustment schedule is implemented as an automatic adjustment clause as provided for under ORS 757.210 and Section 13 of the Oregon Renewable Energy Act (OREA). AVAILABLE In all territory served by the Company. APPLICABLE To all bills for Electricity Service except Schedules 9, 76, 483, 489, and 576. This schedule is not applicable to direct access customers after December 31, 2010. ADJUSTMENT RATE The Adjustment Rate, applicable for service on and after the effective date of this schedule are: Schedule 7 0.001 per kwh 15 0.001 per kwh 32 0.001 per kwh 38 0.001 per kwh 47 0.001 per kwh 49 0.001 per kwh 75 Secondary 0.001 per kwh Primary 0.001 per kwh Subtransmission 0.001 per kwh 83 Secondary 0.001 per kwh Primary 0.001 per kwh (R) (R) Advice No. 10-06 Issued April 1, 2010 Effective for service Maria M. Pope, Senior Vice President on and after January 1, 2011

Portland General Electric Company Second Revision of Sheet No. 122-2 P.U.C. Oregon No. E-18 Canceling First Revision of Sheet No. 122-2 ADJUSTMENT RATE (Continued) SCHEDULE 122 (Continued) Schedule 87 Secondary 0.001 per kwh Primary 0.001 per kwh Subtransmission 0.001 per kwh 89 Secondary 0.001 per kwh Primary 0.001 per kwh Subtransmission 0.001 per kwh 91 0.001 per kwh 92 0.001 per kwh 93 0.001 per kwh 94 0.001 per kwh 515 0.000 per kwh 532 0.000 per kwh 538 0.000 per kwh 549 0.000 per kwh 575 Secondary 0.000 per kwh Primary 0.000 per kwh Subtransmission 0.000 per kwh 583 Secondary 0.000 per kwh Primary 0.000 per kwh 589 Secondary 0.000 per kwh Primary 0.000 per kwh Subtransmission 0.000 per kwh 591 0.000 per kwh 592 0.000 per kwh 594 0.000 per kwh (R) (R) Advice No. 10-06 Issued April 1, 2010 Effective for service Maria M. Pope, Senior Vice President on and after January 1, 2011

BEFORE THE PUBLIC UTILITY COMMISSION OF THE STATE OF OREGON UE Renewable Adjustment Clause for Biglow Canyon Phase 3 and SunWay 3 Portland General Electric Company April 1, 2010

UE / PGE / 100 Tinker - Brown - Liddle / i Table of Contents I. Introduction... 1 II. SunWay 3... 3 A. Project Description... 3 B. Ownership Structure... 3 C. Deferral and Revenue Requirement Components... 6 D. Guarantees... 7 III. Other Solar Projects... 8 IV. Qualifications... 9 List of Exhibits... 10 UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 1 I. Introduction 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Q. Please state your names and positions with Portland General Electric (PGE). A. My name is Jay Tinker. I am a project manager for PGE. My name is Rebecca Brown. I am a senior analyst for PGE. My name is Chris Liddle. I am an analyst for PGE. Our qualifications appear in Section IV of this testimony. Q. What is the purpose of your testimony? A. The purpose of our testimony is to request recovery of the revenue requirements of a qualifying renewable resource project through PGE s Schedule 122, pursuant to Oregon Revised Statutes (ORS) 757.210 and 469A.120(4). Q. How is your testimony organized? A. After this introductory section, we provide a description of SunWay 3 and present the 2011 incremental revenue requirement. Next, Section III briefly discusses other renewable projects that PGE is considering. The final section contains our qualifications. Q. Please summarize the revenue requirement of PGE s request in this filing. A. PGE is requesting recovery of approximately $0.3 million of incremental revenue requirement for SunWay 3, with new prices effective January 1, 2011. Q. Why is PGE requesting prices effective January 1, 2011? A. The January 1, 2011 effective date is consistent with the provisions of PGE s Schedule 122. The Renewable Adjustment Clause (RAC) also allows us to make one price change for both it and related net variable power costs (NVPC) through the general rate case. Q. Does this filing interrelate with the general rate case? A. Yes. On February 16, 2010, PGE initiated a general rate case proceeding with a 2011 test year (Docket No. UE 215). The general rate case filing includes fixed and variable costs UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 2 1 2 3 4 5 6 7 8 associated with Biglow Canyon Phase 3 as well as energy benefits. That filing, however, only includes the power costs and energy benefits of SunWay 3. Q. What Rate of Return (ROR) is PGE using for this filing? A. PGE is using an overall ROR of approximately 8.289%, which is comprised of a Return on Equity of 10.5% and Cost of Debt of 6.077%. The ROR and its components used to derive the 2011 revenue requirement of SunWay 3 are consistent with PGE s request in its February 16, 2010 general rate case filing (Docket No. UE 215). Should the Commission authorize a different ROR in UE 215, we would incorporate it into this filing. UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 3 II. SunWay 3 A. Project Description 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Q. Please describe the project. A. SunWay 3 is the latest solar power addition to PGE s renewable resource portfolio. Installed on the rooftops of seven buildings owned by ProLogis, this photovoltaic thin-film system is expected to have a capacity of 2.4 MW. SunWay 3, LLC (SunWay 3) was formed for the sole purpose of developing, constructing, managing, and operating this solar project. Q. Has PGE developed similar projects in the past? A. Yes. In our 2009 RAC filing (Docket No. UE 209), we received recovery of our investments in two very similar facilities: SunWay 1, in association with the Oregon Department of Transportation; and SunWay 2, in association with ProLogis. Q. Did these projects use the same ownership structure as SunWay 3? A. Yes. This same ownership structure was used for the development of SunWay 1 and SunWay 2 PGE created a limited liability company and used third-party financing to develop the projects. Q. When will SunWay 3 become operational? A. We expect the entire facility to be placed in service by mid-2010. Q. Who receives the energy produced by the project? A. SunWay 3, LLC operates the facility as a Qualifying Facility (QF) as defined by the Public Utility Regulatory Policies Act of 1978 (PURPA) and part 292 of the FERC's Regulations (18 C.F.R. Part 292). PGE purchases the entire output from SunWay 3 through a power purchase agreement at avoided cost consistent with other QFs. B. Ownership Structure 21 Q. Which entities are involved in the development or ownership of this project? UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 A. The entities involved are: SunWay 3, LLC PGE formed this entity for the sole purpose of developing, constructing, managing, and operating a solar energy project on the sites. Managing Member PGE is managing the operation of SunWay 3. Investor Member Firstar Development is the primary equity investor in the project. Installer Northwest Solar Solutions, LLC (NSS) designs, constructs, and installs photovoltaic roofing systems. NSS will provide completed design, engineering, procurement, construction, and installation services. ProLogis SunWay 3 will lease the rooftops of seven of the buildings owned by ProLogis. Q. Please describe the ownership structure of the solar energy project? A. SunWay 3 was formed to own, develop, manage, and operate a solar energy project consisting of a photovoltaic thin-film system with an approximate generating capacity of 2.4 MW placed on the roofs of seven buildings owned by ProLogis. PGE, as Managing Member of SunWay 3, will manage and control the business and will provide a net equity contribution of approximately $1.45 million. As mentioned above, SunWay 3 also has an Investor Member, Firstar Development, LLC. Q. What is the role of the Investor Member in this structure? A. The Investor Member is obligated to make a capital contribution to SunWay 3 and will hold 99.99% ownership of SunWay 3 for approximately the first five years of operation. In return, the Investor Member is able to take advantage of the bulk of the tax credits associated with this project and to earn a return on its capital contribution. Q. What is the role of the Managing Member in this structure? UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 A. PGE will make capital contributions totaling approximately $1.45 million and will hold 0.01% ownership 1 of SunWay 3 for approximately the first five years of operation. In addition, PGE must take all necessary action required by law or contract to maintain and operate the solar facility and the business of SunWay 3, LLC. In turn, SunWay 3 will pay an annual accounting fee and management fee totaling approximately $12,000 to PGE, increasing 2.3% each year. Q. Will the ownership structure change? A. The ownership structure described above is expected to be in place for the initial five or six years of the project. After that time, an ownership switch may occur and PGE would own 95% and the Investor Member the remaining 5%. The change in ownership may only occur when all of the following are true: 1) the target IRR has been achieved for the Investor Member; 2) the solar equipment comprising the project has been fully depreciated for federal income tax purposes; and 3) the compliance period (minimum of five years starting at the in-service date) has expired. Q. What will happen to the remaining 5% ownership share held by the Investor Member? A. PGE may purchase this 5% share at fair market value, currently estimated to be approximately $142,000. Q. Why not transfer 100% of the ownership to PGE after five years? A. In order to comply with tax guidelines, the Investor Member should have a meaningful interest in the LLC after the ownership switch date. Q. Were other funds required besides the two capital investments? 1 SunWay 3 is a direct subsidiary of PGE but at this time is not considered an affiliated interest as defined in ORS 757.015 because PGE only owns a 0.01% share. UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 6 1 2 3 4 5 6 7 8 9 10 11 12 A. Yes, SunWay 3 received a construction loan for the project of approximately $13.1 million from Wells Fargo. Once the Investor Member has made their capital contribution, we expect this loan to be paid off. The Clean Wind Fund also provided approximately $0.2 million. Q. Why is PGE using this ownership structure? A. PGE is unable to fully utilize the tax benefits that accompany this solar project, including BETC and ITC. Therefore, involving a partner who could use the tax incentives was essential to the success of the project. Q. What benefits does SunWay 3 provide for PGE s customers? A. Customers will benefit from the addition of 2.4 MW of renewable generation capacity. PGE expects approximately 92% of the renewable energy credits generated by the facility to be used to meet PGE s renewable energy obligation pursuant to ORS 469A.052 (see below for more renewable energy credit distribution detail). C. Deferral and Revenue Requirement Components 13 14 15 16 17 18 19 20 21 22 Q. What is SunWay 3 s overall impact on PGE s revenue requirement? A. PGE currently forecasts the 2011 revenue requirement for SunWay 3 to be approximately $0.3 million. PGE Exhibit 101 summarizes the development of the incremental revenue requirement. A comparison of the SunWay 3 s cost to the market price of electricity is available in PGE s work papers. Q. Over what period of time will the initial capital investment be depreciated? A. PGE s initial capital investment of approximately $1.45 million will be depreciated over 20 years. Q. How is PGE treating the Renewable Energy Credits (RECs) associated with the output from SunWay 3? UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 7 1 2 3 4 5 6 7 8 A. Per the Energy Trust of Oregon Incentive Agreement (Agreement), as amended, 8% of the RECs will be deposited in a WREGIS account for PGE and retired for the benefit of PGE s Clean Wind Fixed Renewable Option customers. In 2011, this is expected to equate to approximately 235 RECs. Also per the Agreement, 92% of the RECs will be deposited in a WREGIS account as directed by the ETO. In 2011, this is expected to equate to approximately 2,705 RECs. The ETO s policy requires it to use the RECs to benefit PGE s customers. PGE expects that the ETO will give the necessary directions for the RECs to be counted toward PGE s renewable energy obligation pursuant to ORS 469A.052. D. Guarantees 9 10 11 12 13 Q. What guarantees has PGE made to the other parties regarding SunWay 3? A. PGE guarantees to the benefit of the Investor Member (1) the performance of certain obligations of the Managing Member (while the Managing Member is PGE) under the SunWay 3, LLC Operating Agreement relating to Tax Cash Grants and (2) the repayment of the construction loan, which SunWay 3, LLC obtained from Wells Fargo. UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 8 III. Other Solar Projects 1 2 3 4 5 6 7 Q. Will PGE be involved in the development of any other solar projects? A. Possibly. PGE is currently evaluating additional solar development opportunities. Q. Does PGE propose to include these additional solar projects during this proceeding? A. No. PGE is reviewing other projects and proposes separate filings for deferral of costs related to these additional projects until they can be addressed fully in a future RAC filing. This will allow PGE sufficient time to prepare the details for these projects while also providing parties adequate time for review. UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 9 IV. Qualifications 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Q. Mr. Tinker, please describe your qualifications. A. I received a Bachelor of Science degree in Finance and Economics from Portland State University in 1993 and a Master of Science degree in Economics from Portland State University in 1995. In 1999, I obtained the Chartered Financial Analyst (CFA) designation. I have worked in the Rates and Regulatory Affairs department since 1996. Q. Ms. Brown, please describe your qualifications. A. I received a Bachelor of Science degree in Accounting from the University of Nevada-Reno in 1985 and a Master of Business Administration with an emphasis in Finance from the University of Wyoming in 1987. In 1990, I became a Certified Public Accountant. I have worked at three state commissions (Wyoming, Texas and Oregon) totaling 12 years of regulatory experience. I also worked at PacifiCorp for 2 ½ years in Corporate Accounting. I have been with PGE in the Rates and Regulatory Affairs department since October 2007. Q. Mr. Liddle, please describe your qualifications. A. I received a Bachelor of Science degree in Business Administration with a finance emphasis from the University of Oregon in 2004 and a Master of Business Administration degree from Portland State University in 2009. I have been employed at PGE since 2005, beginning as an analyst in PGE s Corporate Finance Department. I then worked in PGE s Investor Relations Department. My current position is Analyst, Regulatory Affairs. Q. Does this conclude your testimony? A. Yes. UE Renewable Adjustment Clause Direct Testimony

UE / PGE / 100 Tinker - Brown - Liddle / 10 List of Exhibits PGE Exhibit Exhibit 101 Description SunWay 3 Revenue Requirement UE Renewable Adjustment Clause Direct Testimony

SunWay 3-2011 Revenue Requirement 2011 1 Sales to Customers $ 262,523 2 Other Revenues $ 12,353 3 Total Operating Revenues $ 274,875 4 NVPC $ 19,376 5 O&M / A&G $ - 6 Uncollectibles Expense $ 1,496 7 OPUC Fees $ 820 8 A&G, Ins/Bene., & Gen. Plant $ - 9 Depreciation & Amortization $ 72,316 10 Property Taxes $ - 11 Franchise Fees $ 6,608 12 Utility Income Tax $ 50,314 13 Total Operating Expenses & Taxes $ 150,931 14 Utility Operating Income $ 123,944 15 Rate of Return 8.289% 16 Misc. Deferred Debits $ 1,450,796 17 Misc. Deferred Credits $ - 18 Avg. Accum. Def Taxes $ 38,695 19 Working Cash $ 5,886 20 Avg. Rate Base $ 1,495,378 21 Regulated Net Income $ 78,507 22 Return on Equity 10.50% Utility Income Taxes 23 Book Rev $ 274,875 24 Book Exp $ 100,617 25 Interest Expense $ 45,437 26 Permanent Ms $ - 27 Deferred Ms $ (92,285) 28 Taxable Income $ 221,107 29 State Tax $ 13,801 30 State Tax Credits $ - 31 Net State Taxes $ 13,801 32 Federal Taxable Income $ 207,306 33 Federal Tax $ 72,557 34 Federal Tax Credits $ - 35 Deferred Taxes $ (36,044) 36 Total Income Tax $ 50,314

37 Working Cash Factor 3.900% 38 Weighted Cost of Debt 3.039% 39 State Tax Rate 6.242% 40 Federal Tax Rate 35.000% 41 Composite Tax Rate 39.057% 42 Effective Cost of Debt 6.077% 43 Equity Share of Cap Structure 50.000% 44 Debt Share of Cap Structure 50.000% 45 ROE Target 10.500% 46 WACC 8.289% 47 Gross-up Factor 1.641 48 Grossed-up Cost of Capital 11.653% 49 Bad Debt Rate 0.570% 50 OPUC Fee Rate 0.3125% 51 Franchise Fee Rate 2.517% Income Tax Check 52 Revenue $ 274,875 53 Int. Expense $ 45,437 54 Op. Expense $ 100,617 55 Book Taxable $ 128,821 56 Tot. Sch. M $ (92,285) 57 Tax Taxable $ 221,107 58 Net State Tax $ 13,801 59 Net Federal Tax $ 72,557 60 Deferred Tax $ (36,044) 61 Total Tax $ 50,314 TRUE UOI Check 62 Avg. Rate Base $ 1,495,378 63 RROE 8.289% 64 UOI $ 123,944 TRUE