Hello, following up our PGE Budget presentation I am forwarding you the
following information.

Jessica - the 2002 Capital Slide has been revised to be consistent with
the NNG disclosure schedule.  The decommissioning forecast is up by $1.6
MM, however since this is funded by the decommissioning trust it should
not be an issue.

Tracy - Do you have a time and agenda set for the Nov. 1 dry run of the
budget presentation?  I may be sitting in for Piro so please keep me
posted as to what the plan is.

Rod - you asked for some detail on our IT capital expenditures.  The
file IT_Teresa includes the requested detail.  Note that in our UE-115
ratecase we were authorized to expend up to $96.8 MM for the  2000-2002
budget years. This is a balancing account, such that if we don't expend
the money we have to refund it to customers.  As an fyi - I've pasted in
below the language from our UE-115 Stipulation on IT costs.


Q.  What is the basis for the stipulation relating to issue S-45, CIS /
IT Disallowance?

A.  After a Staff review of new IT systems and their associated capital
costs, Staff has determined PGE's capital costs for new IT systems to be
prudent.  As a result, the Parties agreed to full recovery of PGE's IT
investments, subject to a Staff audit.  PGE will place into base rates
100% of the 2002 revenue requirement related to the 2000, 2001, and 2002
capital additions for the CIS/IT capital items listed below.  The 2002
revenue requirement included in base rates will be trued-up to the
actual revenue requirement for the CIS/IT capital costs.  OPUC Staff
will audit PGE's actual capital expenditures for the CIS/IT capital
items listed below.

1. Customer information system.
2. Enterprise resources planning (ERP) system.
3. Network meter reading (NMR) backbone and data store (excluding the
meters).
4. Miscellaneous capitalized information technology costs.

Some of the forecasted 2000-2002 capital additions may be delayed until
2003.  Delayed costs can also be recovered, subject to the same Staff
audit procedures and standards.  Only those costs that are reasonable
and prudent will be authorized for inclusion in the "actual" revenue
requirement calculation.  Accordingly, customers will receive a refund
for any costs PGE does not expend or costs the OPUC finds imprudent.

Let me know if you have any questions.
Jim B. 503-464-8931

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<DIV><FONT size=1>Hello, f</FONT><FONT size=1>ollowing up our PGE Budget 
presentation I am forwarding you the following information.</FONT></DIV>
<DIV><FONT size=1></FONT>&nbsp;</DIV>
<DIV><FONT size=1>
<DIV>Jessica - the 2002 Capital Slide has been revised to be consistent with the 
NNG disclosure schedule.&nbsp; The decommissioning forecast is up by $1.6 MM, 
however since this is funded by the decommissioning trust it should not be an 
issue.</DIV>
<DIV>&nbsp;</DIV>
<DIV>Tracy - Do you have a time and agenda set for the Nov. 1 dry run of the 
budget presentation?&nbsp; I may be sitting in for Piro so please keep me posted 
as to what the plan is.</DIV></FONT></DIV>
<DIV><FONT size=1></FONT>&nbsp;</DIV>
<DIV><FONT size=1>Rod - you asked for some detail on our IT capital 
expenditures.&nbsp; The file IT_Teresa includes the requested detail.&nbsp; Note 
that in our UE-115 ratecase we were authorized to expend up to $96.8 MM&nbsp;for 
the &nbsp;2000-2002 budget years.&nbsp;This is a balancing account, such that if 
we don't expend the money we have to refund it to customers.</FONT>&nbsp; As an 
fyi - I've pasted in below the language from our UE-115 Stipulation on IT 
costs.</DIV>
<DIV>&nbsp;</DIV>
<DIV>&nbsp;</DIV>
<DIV><STRONG>Q.</STRONG>&nbsp; What is the basis for the stipulation relating to 
issue S-45, CIS / IT Disallowance?</DIV>
<DIV><BR><STRONG>A.</STRONG>&nbsp; After a Staff review of new IT systems and 
their associated capital costs, Staff has determined PGE's capital costs for new 
IT systems to be prudent.&nbsp; As a result, the Parties agreed to full recovery 
of PGE's IT investments, subject to a Staff audit.&nbsp; PGE will place into 
base rates 100% of the 2002 revenue requirement related to the 2000, 2001, and 
2002 capital additions for the CIS/IT capital items listed below.&nbsp; The 2002 
revenue requirement included in base rates will be trued-up to the actual 
revenue requirement for the CIS/IT capital costs.&nbsp; OPUC Staff will audit 
PGE's actual capital expenditures for the CIS/IT capital items listed 
below.</DIV>
<DIV><BR>1. Customer information system.<BR>2. Enterprise resources planning 
(ERP) system.<BR>3. Network meter reading (NMR) backbone and data store 
(excluding the meters).<BR>4. Miscellaneous capitalized information technology 
costs.<BR></DIV>
<DIV>Some of the forecasted 2000-2002 capital additions may be delayed until 
2003.&nbsp; Delayed costs can also be recovered, subject to the same Staff audit 
procedures and standards.&nbsp; Only those costs that are reasonable and prudent 
will be authorized for inclusion in the "actual" revenue requirement 
calculation.&nbsp; Accordingly, customers will receive a refund for any costs 
PGE does not expend or costs the OPUC finds imprudent.</DIV>
<DIV>&nbsp;</DIV>
<DIV>Let me know if you have any questions.</DIV>
<DIV>Jim B. 503-464-8931<BR></DIV></BODY></HTML>