ORDER NO. 99-004

ENTERED JAN 05 1999

This is an electronic copy. Appendices and footnotes may not appear.

OF OREGON

UM 901

DISPOSITION: STIPULATION ADOPTED

On December 30, 1997, Portland General Electric Company (PGE) filed a depreciation study of its electric service property. Based on the study, PGE recommended that its annual depreciation expense for its transmission, distribution, and general plant properties be increased by approximately $13 million. PGE's recommendation included new depreciation lives and salvage rates for most of its transmission, distribution, and general plant accounts.

Staff and PGE worked together to develop depreciation parameters acceptable to both parties. The parties reached agreement and on October 20, 1998, filed the attached stipulation. On December 11, 1998, Staff filed testimony supporting the stipulation and an exhibit showing the parameters on which the parties agreed.

The stipulation provides that the depreciation parameters agreed upon will be used for PGE's distribution, transmission, and general facilities. By December 31, 1998, PGE will file an updated depreciation study and include generation facilities remaining as its capital investments. The updated study will be combined with the parameters adopted in this order to determine the correct depreciation rates for use by PGE. We are currently engaged in a proceeding involving PGE's application for restructuring and the rate setting that would accompany any restructuring (Docket No. UE 102). The depreciation rates established in this proceeding will be used in Docket No. UE 102 as part of the rate-setting process.

As stated above, PGE will file an updated depreciation study by December 31, 1998. We anticipate further activity in this docket to establish depreciation rates after that study is filed.

Based on the evidence submitted, the Commission finds that the stipulated depreciation parameters will be fair and reasonable. The Commission concludes that it should approve the stipulation. A copy of the stipulation is attached to this order as Attachment 1. The adopted revised depreciation parameters are attached as Attachment 2.

ORDER

IT IS ORDERED that:

1.  The stipulation filed by PGE and the Commission's Staff on October 20, 1998, is adopted.

2.  The revised depreciation parameters shown on Attachment 2 to this order are adopted.

Made, entered, and effective ____________________________.

 A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements of OAR 860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070. A party may appeal this order to a court pursuant to ORS 756.580.