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>


I
TEM 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


M
anagement'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>








                             POWER OF ATTORNEY


     The  undersigned  director(s)  of  Portland General Corporation hereby
appoint(s) Alvin Alexanderson, Joseph M.  Hirko  and  Joseph  E. Feltz, and
each of them generally, as the attorney-in-fact, in any and all  capacities
stated herein, to execute on behalf of the undersigned and to file with the
Securities  and  Exchange  Commission under the Securities Exchange Act  of
1934, as amended, the Portland  General  Corporation  Annual Report on Form
10-K for the fiscal year ended December 31, 1996.


Dated:  JANUARY 28, 1997
        Carefree, Arizona



 /S/ GWYNETH GAMBLE BOOTH                /S/ KEN L. HARRISON        
Gwyneth Gamble Booth                     Ken L. Harrison

___________________________              /S/ JERRY E. HUDSON
Peter J. Brix                            Jerry E. Hudson

 /S/ CAROLYN S. CHAMBERS                 /S/ JEROME J. MEYER
Carolyn S. Chambers                      Jerome J. Meyer

 /S/ JOHN W. CREIGHTON, JR.              /S/ RANDOLPH L. MILLER
John W. Creighton, Jr.                   Randolph L. Miller

 /S/ RICHARD GEARY                       /S/ BRUCE G. WILLISON
Richard Geary                            Bruce G. Willison


                              
<PAGE>




                             POWER OF ATTORNEY


     The  undersigned  director(s)  of  Portland  General Electric  Company
hereby appoint(s) Alvin Alexanderson, Joseph M. Hirko  and Joseph E. Feltz,
and  each  of  them  generally,  as the attorney-in-fact, in  any  and  all
capacities stated herein, to execute  on  behalf  of the undersigned and to
file  with  the  Securities  and Exchange Commission under
  the  Securities
Exchange Act of 1934, as amended,  the  Portland  General  Electric Company
Annual Report on Form 10-K for the fiscal year ended December 31, 1996.


Dated: JANUARY 28, 1997
       Carefree, Arizona


 /S/ GWYNETH GAMBLE BOOTH                  /S/  KEN  L.  HARRISON
Gwyneth Gamble Booth                       Ken L. Harrison

____________________________                /S/ JERRY E. HUDSON
Peter J. Brix                              Jerry E. Hudson

 /S/  CAROLYN  S. CHAMBERS                 /S/  JEROME  J.  MEYER
Carolyn S. Chambers                        Jerome J. Meyer

 /S/ JOHN W. CREIGHTON,  JR.               /S/  RANDOLPH L. MILLER
John W. Creighton, Jr.                     Randolph L. Miller

 /S/ RICHARD GEARY                         /S/ BRUCE G. WILLISON
Richard Geary                              Bruce G. Willison

                                  
<PAGE>









                        PORTLAND GENERAL CORPORATION
                            AMENDED AND RESTATED
                 OUTSIDE DIRECTORS' STOCK COMPENSATION PLAN
                               AMENDMENT NO. 1

     THIS   AMENDMENT   to   the  Amended  and  Restated  Portland  General
Corporation Outside Directors' Stock Compensation Plan (the "Plan") is made
and  entered  into this 2nd day  of  October,  1996,  by  Portland  General
Corporation (the "Corporation");

     WHEREAS, the  Corporation  has  established  the  Plan  as amended and
restated February 6, 1996; and

     WHEREAS, pursuant to Section 11.1 of the Plan, the Board  of Directors
of  the  Corporation  may  amend  the  Plan, provided that the Plan is  not
amended  more  than  once  each  six months and  no  such  amendment  shall
adversely affect any then outstanding Award; and

     WHEREAS, the Board of Directors,  by resolutions adopted September 10,
1996, deems it in the best interest of the  Corporation  to amend the Plan,
and that the following amendment does not adversely affect  any outstanding
Award under the Plan;

     NOW, THEREFORE, effective as of September 10, 1996, the Plan is hereby
amended as follows:

     Section 4.1 is amended to read as follows:

     "4.1.  VESTING; DELIVERY OF SHARES; FORFEITURES.

          4.1  Subject to Sections 3.2(a) and 4.2 through 4.5,  shares
     of Common Stock  in  an Award shall vest 100 percent on the third
     Anniversary
 Date.  Five-Year  Awards  and Transition Awards shall
     vest and be released as set forth in Section  8.  Notwithstanding
     the  foregoing,  all  Shares  of Common Stock in any  outstanding
     Award  shall  vest  100  percent  on   the   effective  date  and
     consummation  of  the  merger of Enron Corporation  and  Portland
     General Corporation agreed  to in that certain Agreement and Plan
     of


PAGE 1 - AMENDMENT NO. 1 - ODSC PLAN

                                  
<PAGE>

     Merger  by  and  between  Enron  Corporation,   Portland  General
     Corporation and New Falcon Corp., dated as of July  20,  1996, as
     that Agreement may be amended or restated from time to time.

     IN WITNESS WHEREOF, the Corporation has caused this instrument  to  be
executed as of the day and year first above written.


                              PORTLAND GENERAL CORPORATION


                         By:  /S/ JOSEPH M. HIRKO

                              Joseph M. Hirko
                              Senior Vice President-Finance


PAGE 2 - AMENDMENT NO. 1 - ODSC PLAN

                                    
<PAGE>



THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933






















                             AMENDED AND RESTATED
                               1990 LONG-TERM
                            INCENTIVE MASTER PLAN

                         Portland General Corporation


                              1996 Restatement

                                    
<PAGE>

                         Portland General Corporation
                            AMENDED AND RESTATED
                    1990 Long-Term Incentive Master Plan
                              1996 Restatement


                              TABLE OF CONTENTS


ARTICLE                            SECTION                               PAGE


  1.  ESTABLISHMENT, PURPOSE, AND DURATION ..............................  1
       1.1  ESTABLISHMENT OF THE PLAN ...................................  1
       1.2  PURPOSE OF THE PLAN .........................................  1
       1.3  DURATION OF THE PLAN ........................................  1

  2.  DEFINITIONS AND CONSTRUCTION ......................................  2
       2.1  DEFINITIONS .................................................  2
       2.2  GENDER AND NUMBER ...........................................  5
       2.3  SEVERABILITY ................................................  5

  3.  ADMINISTRATION ....................................................  5
       3.1  THE COMMITTEE ...............................................  5
       3.2  AUTHORITY OF THE COMMITTEE ..................................  5
       3.3  DECISIONS BINDING ...........................................  6
       3.4  GRANTS OF OPTIONS BY CHIEF EXECUTIVE OFFICER OR INSIDER
            COMMITTEE ...................................................  6

  4.  SHARES SUBJECT TO THE PLAN ........................................  7
       4.1  NUMBER OF SHARES ............................................  7
       4.2  LAPSED AWARDS ...............................................  8
       4.3  ADJUSTMENTS IN AUTHORIZED SHARES ............................  8

  5.  ELIGIBILITY AND PARTICIPATION .....................................  8
       5.1  ELIGIBILITY .................................................  8
       5.2  ACTUAL PARTICIPATION ........................................  9

  6.  STOCK OPTIONS .....................................................  9
       6.1  GRANT OF OPTIONS ............................................  9
       6.2  OPTION AGREEMENT ............................................  9
       6.3  OPTION PRICE ................................................  9
       6.4  DURATION OF OPTIONS .........................................  9
       6.5  EXERCISE OF OPTIONS .........................................  9
       6.6  PAYMENT .....................................................  9

                                       i
                                     
<PAGE>

ARTICLE                              SECTION                             PAGE

       6.7  RESTRICTIONS ON SHARE TRANSFERABILITY ....................... 10
       6.8  DIVIDEND EQUIVALENTS ON STOCK OPTIONS ....................... 10
       6.9  TERMINATION
 OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
            RETIREMENT .................................................. 10
       6.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS ................. 12
       6.11 TRANSFERABILITY OF OPTIONS .................................. 12

  7.  STOCK APPRECIATION RIGHTS ......................................... 12
       7.1  GRANT OF SARS ............................................... 12
       7.2  EXERCISE OF SARS IN LIEU OF OPTIONS ......................... 13
       7.3  EXERCISE OF SARS IN ADDITION TO OPTIONS ..................... 13
       7.4  EXERCISE OF SARS INDEPENDENT OF OPTIONS ..................... 13
       7.5  SAR AGREEMENT ............................................... 13
       7.6  TERM OF SARS ................................................ 13
       7.7  PAYMENT OF SAR AMOUNT ....................................... 13
       7.8  SECTION 16 REQUIREMENTS ..................................... 14
       7.9  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
            RETIREMENT .................................................. 14
       7.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS ................. 15
       7.11 TRANSFERABILITY OF SARS ..................................... 15

  8.  RESTRICTED STOCK .................................................. 15
       8.1  GRANT OF RESTRICTED STOCK ................................... 15
       8.2  RESTRICTED STOCK AGREEMENT .................................. 16
       8.3  TRANSFERABILITY ............................................. 16
       8.4  OTHER RESTRICTIONS .......................................... 16
       8.5  CERTIFICATE LEGEND .......................................... 16
       8.6  REMOVAL OF RESTRICTIONS ..................................... 16
       8.7  VOTING RIGHTS ............................................... 16
       8.8  DIVIDENDS AND OTHER DISTRIBUTIONS ........................... 17
       8.9  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
            RETIREMENT .................................................. 17
       8.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS ................. 17

  9.  PERFORMANCE UNITS AND PERFORMANCE SHARES .......................... 17
       9.1  GRANT OF PERFORMANCE UNITS/SHARES ........................... 17
       9.2  VALUE OF PERFORMANCE UNITS/SHARES ........................... 17
       9.3  EARNING OF PERFORMANCE UNITS/SHARES ......................... 18
       9.4  FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES ...... 18
       9.5  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR

                                      ii
                                    
<PAGE>

ARTICLE                              SECTION                             PAGE

            RETIREMENT .................................................. 18
       9.6  TERMINATION OF EMPLOYMENT FOR OTHER REASONS ................. 18
       9.7  TRANSFERABILITY ............................................. 19

  10.  OTHER STOCK-BASED AWARDS ......................................... 19
       10.1 OTHER STOCK-BASED AWARDS .................................... 19
       10.2 TRANSFERABILITY ............................................. 19

  11.  BENEFICIARY DESIGNATION .......................................... 19

  12.  RIGHTS OF EMPLOYEES .............................................. 19
       12.1 EMPLOYMENT .................................................. 19
       12.2 PARTICIPATION ............................................... 19

  13.  CHANGE IN CONTROL ................................................ 20

  14.  AMENDMENT, MODIFICATION, AND TERMINATION ......................... 20
       14.1 AMENDMENT, MODIFICATION, AND TERMINATION .................... 20
       14.2 AWARDS PREVIOUSLY GRANTED ................................... 21

  15.  WITHHOLDING ...................................................... 21
       15.1 TAX WITHHOLDING ............................................. 21
       15.2 SHARE WITHHOLDING ........................................... 21

  16.  INDEMNIFICATION .................................................. 21

  17.  SUCCESSORS ....................................................... 22

  18.  REQUIREMENTS OF LAW .............................................. 22
       18.1 REQUIREMENTS OF LAW ......................................... 22
       18.2 GOVERNING LAW ............................................... 22

                                       iii
                                      
<PAGE>


                           PORTLAND GENERAL CORPORATION
                               AMENDED AND RESTATED
                       1990 LONG-TERM INCENTIVE MASTER PLAN
                                 1996 RESTATEMENT



                 ARTICLE 1.  ESTABLISHMENT, PURPOSE, AND DURATION

      1.1  ESTABLISHMENT OF THE PLAN.  Portland General Corporation
("Portland General") established the Portland General Corporation 1990
Long-Term Incentive Master Plan (hereinafter referred to as the "Plan") to
be effective October 1, 1990, subject to the approval of the Board of
Directors and the shareholders of Portland General, which approval was
given by the Board of Directors on October 1, 1990 and by the Shareholders
at the Annual Meeting of Shareholders held April 30, 1991.  The Plan shall
remain in effect as provided in Section 1.3 herein.  The Plan permits the
grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares, Performance
Units, and other Stock-Based Awards.

      1.2  PURPOSE OF THE PLAN.  The purpose of the Plan is to promote the
success, and enhance the value of the Company by linking the personal
interests of Employees to those of Company shareholders, and by providing
Employees with an incentive for outstanding performance.

     The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Employees upon
whose judgment, interest, and special effort the successful conduct of its
operation largely is dependent.

      1.3  DURATION OF THE PLAN.  The Plan shall commence on  October 1,
1990 (the "Effective Date") and shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant
to Article 14 herein, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions.  However, in no
event may an Award be granted under the Plan on or after the tenth (10th)
anniversary of the Plan's Effective Date.





                                         1

                                      
<PAGE>

                    ARTICLE 2.  DEFINITIONS AND CONSTRUCTION

      2.1  DEFINITIONS.  Whenever used in the Plan, the following terms
shall have the meanings set forth below and, when the meaning is intended,
the initial letter of the word is capitalized:
           (a)  "Award" means, individually or collectively, a grant under
                this Plan of Nonqualified Stock Options, Incentive Stock
                Options, Stock Appreciation Rights, Restricted Stock,
                Performance Shares, Performance Units, or other Stock-Based
                Awards.

           (b)  "Beneficial Owner" shall have the meaning ascribed to such
                term in Rule 13d-3 of the General Rules and Regulations
                under the Exchange Act.

           (c)  "Board" or "Board of Directors" means the Board of Directors
                of Portland General Corporation or any successor thereto as
                provided in Article 17 herein.

           (d)  "Cause" means (i) willful and gross misconduct on the part
                of a Participant that is materially and demonstrably
                detrimental to the Company; (ii) the commission by a
                Participant of one or more acts which constitute an
                indictable crime under United States Federal, state, or
                local law; or (iii) such other meaning as shall be specified
                by the Committee.  Unless otherwise provided by the
                committee at the time of making an Award, "Cause" under
                either (i), (ii) or (iii) shall be determined in good faith
                by a written resolution duly adopted by the affirmative vote
                of not less than two-thirds (2/3rds) of all the Directors
                at a meeting duly called and held for that purpose after
                reasonable notice to the Participant and opportunity for the
                Participant and his or her legal counsel to be heard.

           (e)  "Change in Control" of the Company shall be defined by the
                Committee at the time of making each and every Award
                hereunder.

           (f)  "Code" means the Internal Revenue Code of 1986, as amended
                from time to time.

           (g)  "Committee" means the committee, as specified in Article 3,
                appointed by the Board to administer the Plan with respect
                to grants of Awards.

           (h)  "Company" means Portland General Corporation, an Oregon
                corporation (including any and all Subsidiaries), or any
                successor




                                         2

                                       
<PAGE>

                thereto as provided in Article 17 herein.

           (i)  "Demotion" shall mean the reduction of a Participant's
                salary grade, job classification, or title (the
                Participant's job classification or title shall govern in
                all cases where said job classification or title are not
                defined by means of a salary grade) with the Company to a
                level at which Awards under this Plan or any other plan
                providing long-term incentives to Employees have NOT been
                granted within the three (3) years preceding such demotion.

           (j)  "Director" means any individual who is a member of the Board
                of Directors.

           (k)  "Disability" means a permanent and total disability, within
                the meaning of Code Section 22(e)(3), as determined by the
                Committee in good faith, upon receipt of sufficient
                competent medical advice from one or more individuals,
                selected by the Committee, who are qualified to give
                professional medical advice.

           (l)  "Dividend Equivalent" means an accrual for payment of cash
                or Shares equal in value to dividends paid on Shares subject
                to Options.

           (m)  "Employee" means any employee of the Company.  Directors who
                are also employed by the Company shall be considered
                Employees under this Plan.

           (n)  "Exchange Act" means the Securities Exchange Act of 1934, as
                amended from time to time, or any successor Act thereto.

           (o)  "Fair Market Value" means the closing price of Shares on the
                relevant date, as reported in the WALL STREET JOURNAL or a
                similar publication selected by the Committee.

           (p)  "Grant Price" means the value of a SAR on the date of grant,
                as determined by the Committee.

           (q)  "Incentive Stock Option" or "ISO" means an option to
                purchase Shares, granted under Article 6 herein, which is
                designated as an Incentive Stock Option and is intended to
                meet the requirements of Section 422 of the Code, or any
                successor Section thereto.





                                         3

                                       
<PAGE>

           (r)  "Insider" shall mean an Employee of the Company who is, at
                the time an Award is made under this Plan, designated as
                subject to Section 16 of the Exchange Act and the Rules
                promulgated thereunder or a Director.  
                
           (s)  "Noninsider" shall mean an individual who is not an Insider.

           (t)  "Noninsider Committee" means the committee, as specified in
                Section 3.4, that may be appointed by the Board to grant
                Options to Noninsiders.

           (u)  "Nonqualified Stock Option" or "NQSO" means an option to
                purchase Shares, granted under Article 6 herein, which is
                not intended to be an Incentive Stock Option.

           (v)  "Option" means an Incentive Stock Option or a Nonqualified
                Stock Option.

           (w)  "Option Price" means the price at which a Share may be
                purchased by a Participant pursuant to an Option, as
                determined by the Committee.

           (x)  "Outside Director" means a Director who meets the definition
                of "nonemployee director" under the Rules promulgated under
                Section 16 of the Exchange Act, as such definition may be
                amended from time to time.

           (y)  "Participant" means an Employee of the Company who has
                outstanding an Award granted under the Plan.

           (z)  "Performance Unit" or "Performance Share" means an Award
                granted to an Employee pursuant to Article 9 herein.

           (aa) "Period of Restriction" means the period during which the
                transfer of Shares of Restricted Stock is limited in some
                way (based on the passage of time, the achievement of
                performance goals, or upon the occurrence of other events as
                determined by the Committee, at its discretion), and the
                Shares are subject to a substantial risk of forfeiture, as
                provided in Article 8 herein.

           (ab) "Restricted Stock" means an Award granted to an Employee
                pursuant to Article 8 herein.




                                         4

                                       
<PAGE>

           (ac) "Stock Appreciation Right" or "SAR" means an Award, granted
                alone or in tandem with an Option, designated as a SAR,
                granted to an Employee pursuant to Article 7 herein.
                
           (ad) "Stock-Based Award" means an Award granted to an Employee
                pursuant to Article 10 herein.

           (ae) "Shares" means the $3.75 par value Common Stock of Portland
                General Corporation.

           (af) "Subsidiary" means any corporation in which the Company owns
                directly, or indirectly through subsidiaries, at least 50%
                of the total combined voting power of all classes of stock,
                or any other entity (including, but not limited to,
                partnerships and joint ventures) in which the Company owns
                at least 50% of the combined equity thereof.  In the event
                that applicable law permits the ownership of less than 50%
                of the total combined voting power of all classes of stock
                of a corporation to cause such corporation to constitute a
                "Subsidiary," then the requirement of 50% ownership in this
                definition shall be lowered to the lowest level permitted
                under applicable law.

      2.2  GENDER AND NUMBER.  Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the
plural.

      2.3  SEVERABILITY.  In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had not been included.

                         ARTICLE 3.  ADMINISTRATION

      3.1  THE COMMITTEE.  The Plan shall be administered by a committee
consisting solely of two or more Outside Directors, who shall be appointed
from time to time by, and shall serve at the discretion of, the Board of
Directors.  Provided, however, that if for any reason the Committee does
not qualify to administer the Plan, as contemplated by the Article 16 of
the Exchange Act and the Rules promulgated thereunder, the Board of
Directors may appoint a new Committee so as to comply therewith.

      3.2  AUTHORITY OF THE COMMITTEE.  The Committee shall have full power
except as limited by law or by the Articles of Incorporation or Bylaws of
Portland General or any




                                        5

                                      
<PAGE>

          
successor thereto as provided in Article 17 herein, subject to the
provisions herein, to determine the size and types of Awards; to determine
the terms and conditions of such Awards in a manner consistent with the
Plan; to construe and interpret the Plan and any agreement or instrument
entered into under the Plan; to establish, amend, or waive rules and
regulations for the Plan's administration; and (subject to the provisions
of Article 14 herein) to amend the terms and conditions of any outstanding
Award to the extent such terms and conditions are within the discretion of
the Committee as provided in the Plan.  Further, the Committee shall make
all other determinations which may be necessary or advisable for the
administration of the Plan.  As permitted by law, the Committee may
delegate its authorities as identified hereunder.

      3.3  DECISIONS BINDING.  All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive, and
binding on all persons, including the Company, its stockholders, Employees,
Participants, and their estates and beneficiaries.

      3.4  GRANTS OF OPTIONS BY CHIEF EXECUTIVE OFFICER OR INSIDER
COMMITTEE.  The Board of Directors may grant to the Chief Executive Officer
(the "CEO") of Portland General or any successor thereto as provided in
Article 17 herein, or a Committee appointed by it consisting of at least
two Directors one of whom shall be the CEO if the CEO is a Director
("Noninsider Committee") the authority to grant Options to Noninsiders.
Options granted pursuant to this Section 3.4 shall be subject to the
provisions of this Section 3.4, the limits specifically prescribed by the
Board of Directors and the requirements of Oregon law.  Prior to the grant
of such Options, the CEO or the Noninsider Committee, as the case may be,
shall obtain the opinion of legal counsel for the Company that each person
chosen to receive an Option under this Section is properly classified as a
Noninsider.

     The Options granted by the CEO to Noninsiders pursuant to this Section
between October 1, 1990 and October 2, 1991 may be granted upon such terms
and provisions as deemed appropriate by the CEO; provided, however, that
the aggregate number of Shares available for grant is one hundred thousand
(100,000), that any such Option granted not exceed 5,000 shares per
employee per year, that the exercise price for any such Options granted
shall equal the fair market value of Shares on the date of grant, and that
all Options granted must be exercised within ten (10) years after the date
of the grant.

     At any time after October 2, 1991, the Board of Directors may
authorize the CEO or the Noninsider Committee to grant Options for an
additional number of Shares and upon such terms and provisions as the Board
shall determine subject to the terms of this Section 3.4.  The initial one
hundred thousand (100,000) Shares authorized pursuant to the immediately
preceding paragraph and any such additional Shares granted under Options
pursuant to this Section shall be counted toward the maximum number of
Shares subject to this Plan, as set forth in Section 4.1.

                                       6
                                     
<PAGE>
                                           
     In addition to the authority granted to the CEO or the Noninsider
Committee to grant Options to Noninsiders pursuant to this Section 3.4, the
CEO may, at any time, recommend to the Committee Insiders to receive grants
of Options, and may recommend the number of Shares and the terms and
provisions applicable to such Options; provided, however, that
notwithstanding such recommendation, the grant of any Option to Insiders
and the terms and conditions applicable thereto shall be at the sole
discretion of the Committee.  In the event that the Committee shall choose
to grant an Option to an Insider upon the recommendation of the CEO, the
Committee may choose to apply the number of Shares subject to such Option
against the number of Shares available for grant by the CEO or the
Noninsider Committee pursuant to this Section 3.4, such that the number of
Shares available to the CEO or the Noninsider Committee is reduced by the
number of Shares covered by such Option.

            ARTICLE 4.  SHARES SUBJECT TO THE PLAN

      4.1  NUMBER OF SHARES.  Subject to adjustment as
provided in Section 4.3 herein, the total number of Shares available for
grant under the Plan may not exceed 2,300,000; of which no more than
1,150,000 may be issued as Restricted Stock.  These 2,300,000 Shares may be
either authorized but unissued or reacquired Shares.

     The following rules will apply for purposes of the determination of
the number of Shares available for grant under the Plan:

           (a) The grant of an Option or Restricted Stock Award shall
               reduce the Shares available for grant under the Plan by the
               number of Shares subject to such Award.

           (b) The grant of a Stock Appreciation Right related to an Option
               ("Tandem SAR") shall reduce the number of Shares available
               for grant by the number of Shares subject to the related
               Option if the Tandem SAR is granted "in lieu of" the Option.
               If the number of "in lieu of" SARs granted in Tandem with
               Options exceeds the number of Shares subject to the related
               Option, then the number of Shares available for grant shall
               additionally be reduced by the amount of such excess;
               provided, however, that to the extent such grants are paid
               in cash, such Shares shall again be available for the grant
               of Awards under the Plan in accordance with Section 16 of
               the Exchange Act and the Rules promulgated thereunder.

           (c) The grant of a Tandem SAR "in addition to" the related
               Option shall reduce the number of Shares available for grant
               by the number of Shares subject to the SAR, in addition to
               the number of Shares subject




                                         7

                                       
<PAGE>

               to the related Option.

           (d) The grant of Stock Appreciation Rights not related to an
               Option ("Freestanding SAR") shall reduce the number of
               Shares available for grant by the number of Freestanding
               SARs granted.

           (e) The grant of Performance Units and/or Performance Shares
               shall  reduce the number of Shares available for grant while
               outstanding; provided, however, that to the extent such
               grants are paid in cash, such Shares shall again be
               available for the grant of Awards under the Plan in
               accordance with Section 16 of the Exchange Act and the Rules
               promulgated thereunder.

           (f) The grant of other Stock-Based Awards shall reduce the
               number of Shares available for grant hereunder to the extent
               Shares are utilized, as determined by the Committee in
               accordance with the provisions of Section 16 of the Exchange
               Act and the Rules promulgated thereunder.

      4.2  LAPSED AWARDS.  If any Award granted under this Plan terminates,
expires, or lapses for any reason (with the exception of the termination of
a Tandem SAR granted "in lieu of" the related Option or a related Option
upon exercise of the corresponding "in lieu of" SAR), any Shares subject to
such Award again shall be available for the grant of an Award under the
Plan to the extent allowed pursuant to Section 16 of the Exchange Act and
the Rules promulgated thereunder.

      4.3  ADJUSTMENTS IN AUTHORIZED SHARES.  In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation,
stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, such adjustment
shall be made in the number and class of Shares which may be delivered
under the Plan, and in the number and class of and/or price of Awards
granted under the Plan, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; and provided that the number of Shares subject to
any Award shall always be a whole number.

                 ARTICLE 5.  ELIGIBILITY AND PARTICIPATION

      5.1  ELIGIBILITY.  Persons eligible to participate in this Plan
include all Employees of the Company, including Employees who are members
of the Board, but excluding Directors who are not Employees.

      5.2  ACTUAL PARTICIPATION.  Subject to the provisions of the Plan,
the Committee may, from time to time, select from all eligible Employees,
those to whom Awards shall be




                                       8

                                     
<PAGE>

granted and shall determine the nature and amount of each Award.  No
Employee shall have any right to be granted an Award under this Plan.

                           ARTICLE 6.  STOCK OPTIONS

      6.1  GRANT OF OPTIONS.  Subject to the terms and provisions of the
Plan, Options may be granted to Employees at any time and from time to time
as shall be determined by the Committee.  The Committee shall have
discretion in determining the number of Shares subject to Options granted
to each Employee.  The Committee may grant ISOs, NQSOs, or a combination
thereof.  Nothing in this Article 6 shall be deemed to prevent the grant of
NQSOs in excess of the maximum established by Section 422 of the Code, or
any successor Section thereto.

      6.2  OPTION AGREEMENT.  Each Option grant shall be evidenced by an
Option Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares to which the Option pertains, and such other
provisions as the Committee shall determine.  The Option Agreement also
shall specify whether the Option is intended to be an ISO within the
meaning of Section 422 of the Code, or any successor Section thereto, or a
NQSO whose grant is intended not to fall under the Code provisions of
Section 422, or any successor Section thereto.

      6.3  OPTION PRICE.  The Option Price for each grant of an Option to
an Employee shall be determined by the Committee; provided that, in the
case of an ISO, the Option Price shall not be less than 100% of the Fair
Market Value of such Share on the date the Option is granted; and, provided
further, that in the case of a NQSO, the Option Price shall not be less
than the minimum price permissible under Oregon law.

      6.4  DURATION OF OPTIONS.  Each Option granted to an Employee shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no ISO shall be exercisable later than the tenth
(10th) anniversary date of its grant.

      6.5  EXERCISE OF OPTIONS.  Options granted to Employees under the
Plan shall be exercisable at such times and be subject to such restrictions
and conditions as the Committee shall in each instance approve, which need
not be the same for each grant or for each Employee.  However, in no event
may any Option granted under this Plan to an Insider become exercisable
prior to six (6) months following the date of its grant.

      6.6  PAYMENT.  Options shall be exercised in accordance with
established procedures.

     The Option Price upon exercise of any Option shall be payable to the
Company in full either (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having a




                                       9

                                     
<PAGE>

Fair Market Value at the time of exercise equal to the total Option Price;
provided that any such Shares tendered by an Insider shall have been held
by such Insider for at least six months prior to such tender, or (c) by a
combination of (a) and (b).  The Committee also allows cashless exercise as
permitted under Federal Reserve Board's Regulation T, subject to applicable
securities law restrictions, or by any other means which the Committee
determines to be consistent with the Plan's purpose and applicable law.
The proceeds from such a payment shall be added to the general funds of the
Company and shall be used for general corporate purposes.

     The Committee also shall have the authority to extend loans to
Participants in order to aid Participants in the exercise of their Options,
upon such terms and requiring such security as the Committee, in its sole
discretion, shall deem appropriate.

     As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant, in
the Participant's name, Share certificates in an appropriate amount based
upon the number of Shares purchased under the Option(s).

      6.7  RESTRICTIONS ON SHARE TRANSFERABILITY.  The Committee shall
impose such restrictions, including restrictions on transferability, on
Options granted, and on any Shares acquired pursuant to the exercise of an
Option, under the Plan, as it may deem advisable, including, without
limitation, restrictions under applicable Federal securities laws, under
the requirements of any stock exchange or market upon which such Shares are
then listed and/or traded, and under any blue sky or state securities laws
applicable to such Shares.

      6.8  DIVIDEND EQUIVALENTS ON STOCK OPTIONS.  Employees owning Options
may be granted, at no additional cost, Dividend Equivalents based on the
dividends declared on Shares on record dates during the period between the
grant date of an Option and the date the Option is exercised, or an
equivalent period, as determined by the Committee.  Such Dividend
Equivalents may be converted to additional Shares subject to the Option
("Dividend Equivalent Shares"), or cash, or both, by such formula as may be
determined by the Committee, provided, however, that such formula shall
conform to any holding period, notice provision or other requirement under
Section 16 of the Exchange Act and the Rules promulgated thereunder.

     Dividend equivalents shall be computed as of each record date, with
respect to: (i) the number of Shares subject to the Option; and (ii) the
number of Dividend Equivalent Shares previously earned by the Employee
which were not issued during the period immediately prior to the dividend
record date.

      6.9  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
           RETIREMENT.




                                        10

                                      
<PAGE>

           (a) TERMINATION BY DEATH.  In the event the employment of an
               Employee is terminated by reason of death, any outstanding
               Options granted to that Employee shall immediately vest 100%
               and shall remain exercisable at any time prior to their
               expiration date, or for one (1) year after the date that
               employment was terminated, whichever period is shorter, by
               such person or persons as shall have been named as the
               Employee's beneficiary, or by such persons that have
               acquired the Employee's rights under the Option by will or
               by the laws of descent and distribution.  However, the
               Committee, in its sole discretion, may, at any time prior,
               including at the time an Award is made or after such
               termination, provide for the vesting and exercise of all or
               a portion of such Options.

           (b) TERMINATION BY DISABILITY.  In the event the employment of
               an Employee is terminated by reason of Disability, any
               outstanding Options granted to that Employee shall
               immediately vest 100%, and shall remain exercisable at any
               time prior to their expiration date, or for one (1) year
               after the date that the Employee's Disability is determined
               by the Committee to be total and permanent, whichever period
               is shorter.  However, the Committee, in its sole discretion,
               may, at any time prior, including at the time an Award is
               made or after such termination, provide for the vesting and
               exercise of all or a portion of such Options.

           (c) TERMINATION BY RETIREMENT.  In the event the employment of
               an Employee is terminated by reason of "normal retirement"
               (as defined under the then established rules of the
               Company's tax-qualified pension retirement plan), any
               outstanding Options granted to that Employee shall
               immediately vest 100%, and shall remain exercisable at any
               time prior to their expiration date, or for three (3) years
               after the date that employment was terminated, whichever
               period is shorter.  However, the Committee, in its sole
               discretion, may, at any time prior, including at the time an
               Award is made or after such termination, provide for the
               vesting and exercise of all or a portion of such Options.


               In the event the employment of an Employee is terminated by
               reason of Company's tax-qualified pension retirement plan),
               any outstanding Options granted to that Employee that are
               not then vested shall be forfeited.  However, the Committee,
               in its sole discretion, may, at any time prior, including at
               the time an Award is made or after such termination, provide
               for the vesting and exercise of all or a portion of




                                        11

                                      
<PAGE>

               such Options.

           (d) EXERCISE LIMITATIONS ON ISOS.  In the case of ISOs, the tax
               treatment prescribed under Section 422 of the Internal
               Revenue Code of 1986, as amended, or any successor Section
               thereto, may not be available if the Options are not
               exercised within the time periods after each of the various
               types of employment termination prescribed by said Section.

     6.10  TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  If the employment
of an Employee shall terminate for any reason (other than the reasons set
forth in Section 6.9 or for Cause), all nonvested Options held by the
Employee immediately shall be forfeited to the Company.  However, the
Committee, in its sole discretion, may at any time prior, including at the
time an Award is made or after such termination, provide for the vesting
and exercise of all or any portion of such Options, upon such terms and
conditions as its deems proper.

     If the employment of the Employee shall terminate for Cause, all
outstanding Options immediately shall be forfeited to the Company and no
additional exercise period shall be allowed, regardless of the vested
status of the Options.

     Any Options forfeited under this Section shall again be available for
grant under the Plan in accordance with Section 16 of the Exchange Act and
the Rules promulgated thereunder.

     6.11  TRANSFERABILITY OF OPTIONS.  The Committee may establish the
terms by which any Option granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated.

                    ARTICLE 7.  STOCK APPRECIATION RIGHTS

      7.1  GRANT OF SARS.  Subject to the terms and conditions of the Plan,
an SAR may be granted to an Employee at any time and from time to time as
shall be determined by the Committee.  An SAR may be granted in any of the
following forms:

           (a) "In lieu of" Options (as described in Section 4.1(b)
               herein);

           (b) "In addition to" Options (as described in Section 4.1(c)
               herein);

           (c) Independent of Options (a "Freestanding SAR"); or

           (d) In any combination of (a), (b), or (c) above.

     The Committee shall have complete discretion in determining the number
of SARs




                                       12

                                     
<PAGE>

granted to each Participant (subject to Section 4.1 herein) and, consistent
with the provisions of the Plan, in determining the terms and conditions
pertaining to such SARs.  However, the Grant Price of a Freestanding SAR
shall be at least equal to the Fair Market Value of Shares on the date of
grant of the SAR.  The Grant Price of "in lieu of" or "in addition to" SARs
(as described in Section 4.1 herein) shall equal the Option Price of the
related Option.  Further, in no event shall any SAR granted hereunder
become exercisable within the first six (6) months of its grant.


      7.2  EXERCISE OF SARS IN LIEU OF OPTIONS.  SARs granted "in lieu of"
Options (as described in Section 4.1 herein) may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the
right to exercise an equivalent number of Options.  The SAR may be
exercised only with respect to the Shares for which its related Option is
then exercisable.  Option Stock with respect to which the SAR shall have
been exercised may not be subject again to an Award under this Plan.

     Notwithstanding any other provision of this Plan to the contrary, with
respect to an SAR granted "in lieu of" an "Incentive Stock Option" within
the meaning of Section 422 of the Code, or any successor Section thereto:
(i) the SAR will expire no later than the expiration of the underlying
Incentive Stock Option; (ii) the SAR amount may be for no more than one
hundred percent (100%) of the difference between the Option Price of the
underlying Incentive Stock Option and the market price of the Shares
subject to the underlying Incentive Stock Option at the time the SAR is
exercised; and (iii) the SAR may be exercised only when the market price of
the Shares  subject to the Incentive Stock Option exceeds the Option Price
of the Incentive Stock Option.

      7.3  EXERCISE OF SARS IN ADDITION TO OPTIONS.  SARs granted "in
addition to" Options (as described in Section 4.1 herein) shall be deemed
to be exercised upon the exercise of the related Options.  The deemed
exercise of SARs granted "in addition to" Options shall not necessitate a
reduction in the number of related Options.

      7.4  EXERCISE OF SARS INDEPENDENT OF OPTIONS.  SARs granted
independently of Options may be exercised upon whatever terms and
conditions the Committee, in its sole discretion, imposes upon the SARs.

      7.5  SAR AGREEMENT.  Each SAR grant shall be evidenced by an SAR
Agreement that shall specify the Grant Price, the term of the SAR, and such
other provisions as the Committee shall determine.

      7.6  TERM OF SARS.  The term of an SAR granted under the Plan shall
be determined by the Committee, in its sole discretion, however, such term
shall not exceed ten (10) years.




                                       13

                                     
<PAGE>
        
      7.7  PAYMENT OF SAR AMOUNT.  Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount
determined by multiplying:

           (a) The difference between the Fair Market Value of a Share on
               the date of exercise over the Grant Price; by

           (b) The number of Shares with respect to which the SAR is exercised.

     At the sole discretion of the Committee, the payment upon SAR exercise
may be in cash, in Shares of equivalent value, or in some combination
thereof.

      7.8  SECTION 16  REQUIREMENTS.  Notwithstanding any other provision
of the Plan, the Committee may impose such conditions on exercise of an SAR
(including, without limitation, the right of the Committee to limit the
time of exercise to specified periods or the ability to exercise in cash or
Shares ) as may be required to satisfy the requirements of Section 16 of
the Exchange Act and the Rules promulgated thereunder.

      7.9  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT.

           (a) TERMINATION BY DEATH.  In the event the employment of a
               Participant is terminated by reason of death, any
               outstanding SARs granted to that Participant shall
               immediately vest 100%, and shall remain exercisable at any
               time prior to their expiration date, or for one (1) year
               after the date that employment is terminated, whichever
               period is shorter, by such person or persons as shall have
               been named as the Participant's beneficiary, or by such
               persons that have acquired the Participant's rights under
               the SARs by will or by the laws of descent and distribution.
               However, the Committee, in its sole discretion, may, at any
               time prior,  including at the time an Award is made or after
               such termination, provide for the vesting and exercise of
               all or a portion of such Options.

           (b) TERMINATION BY DISABILITY.  In the event the employment of a
               Participant is terminated by reason of Disability, any
               outstanding SARs granted to that Participant shall
               immediately vest 100%, and shall remain exercisable at any
               time prior to their expiration date, or for one (1) year
               after the date the Participant's Disability is determined by
               the Committee to be total and permanent, whichever period is
               shorter.  However, the Committee, in its sole discretion,
               may, at any time prior




                                        14

                                      
<PAGE>

               including at the time an Award is made or after such
               termination, provide for the vesting and exercise of all or
               a portion of such Options.

           (c) TERMINATION BY RETIREMENT.  In the event the employment of a
               Participant is terminated by reason of "normal retirement"
               (as defined under the then established rules of the
               Company's tax qualified pension retirement plan), all
               outstanding SARs granted to that Participant shall
               immediately vest 100%, and shall remain exercisable at any
               time prior to their expiration date, or for one (1) year
               after the date that employment was terminated, whichever
               period is shorter.  However, the Committee, in its sole 
               discretion, may, at any time prior,
               including at the time an Award is made or after such
               termination, provide for the vesting and exercise of all or
               a portion of such Options.

               In the event the employment of a Participant is terminated
               by reason of "early retirement" (as defined under the then
               established rules of the Company's tax qualified pension
               retirement plan), any outstanding SARs granted to that
               Participant that are not then vested shall be forfeited.
               However, the Committee, in its sole discretion, may, at any
               time prior, including at the time an Award is made or after
               such termination, provide for the vesting and exercise of
               all or a portion of such Options.

     7.10  TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  If the employment
of a Participant shall terminate for any reason other than the reasons
described in Section 7.9, or for Cause, all nonvested SARs held by the
Participant at that time immediately shall be forfeited to the Company.
However, the Committee, in its sole discretion, may at any time prior,
including at the time an Award is made or after such termination, provide
for the vesting and exercise of all or any portion of such SARs, upon such
terms and conditions as it deems proper.

     If the employment of the Participant shall terminate for Cause, all
outstanding SARs immediately shall be forfeited to the Company and no
additional exercise period shall be allowed, regardless of the vested
status of the SARs.

     Any SAR forfeited to the Company shall again be available for grant
under the Plan pursuant to Section 16 of the Exchange Act and the Rules
promulgated thereunder.

     7.11  TRANSFERABILITY OF SARS.  The Committee may establish the terms
by which an SAR granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise




                                      15

                                    
<PAGE>

alienated or hypothecated.

                         ARTICLE 8.  RESTRICTED STOCK

      8.1  GRANT OF RESTRICTED STOCK.  Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant
Shares of Restricted Stock to Employees in such amounts as the Committee
shall determine.

      8.2  RESTRICTED STOCK AGREEMENT.  Each Restricted Stock grant shall
be evidenced by a Restricted Stock Agreement that shall specify the Period
of Restriction, or Periods, the number of Restricted Stock Shares granted,
and such other provisions as the Committee shall determine.

      8.3  TRANSFERABILITY.  Except as provided in this
Section 8.3, the Shares of Restricted Stock granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable Period of Restriction established by the
Committee and specified in the Restricted Stock Agreement, or upon earlier
satisfaction of any other conditions, as specified by the Committee in its
sole discretion and set forth in the Restricted Stock Agreement.  However,
in no event may any Restricted Stock granted under the Plan become vested
in a Participant prior to six (6) months following the date of its grant.
Prior to vesting, all rights with respect to the Restricted Stock granted
to a Participant under the Plan shall be available during his or her
lifetime only by such Participant.

      8.4  OTHER RESTRICTIONS.  The Committee shall impose such other
restrictions on any Shares of Restricted Stock granted pursuant to the Plan
as it may deem advisable including, without limitation, restrictions based
upon the achievement of specific performance goals (Company-wide,
divisional, and/or individual), and/or restrictions under applicable
Federal or state securities laws; and may legend the certificates
representing Restricted Stock to give appropriate notice of such
restrictions.

      8.5  CERTIFICATE LEGEND.  In addition to any legends placed on
certificates pursuant to Section 8.4 herein, each certificate representing
Shares of Restricted Stock granted pursuant to the Plan shall bear the
following legend:

           "The sale or other transfer of the Shares of Stock represented
           by this certificate, whether voluntary, involuntary, or by
           operation of law, is subject to certain restrictions on transfer
           as set forth in the Portland General Corporation 1990 Long-Term
           Incentive Master Plan, and in a Restricted Stock Agreement dated
           __________.  A copy of the Plan and such Restricted Stock
           Agreement may be obtained from the Secretary of Portland General
           Corporation."




                                        16

                                      
<PAGE>
         
      8.6  REMOVAL OF RESTRICTIONS.  Except as otherwise provided in this
Section, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall become freely transferable by the Participant
after the last day of the Period of Restriction.  Once the Shares are
released from the restrictions, the Participant shall be entitled to have
the legend required by Section 8.5 removed from his or her Share
certificate.

      8.7  VOTING RIGHTS.  During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those Shares.

      8.8  DIVIDENDS AND OTHER DISTRIBUTIONS.  During the Period of
Restriction, Participants holding Shares of Restricted Stock granted
hereunder shall be entitled to receive all dividends and other
distributions paid with respect to those Shares while they are so held.  If
any such dividends or distributions are paid in Shares, the Shares shall be
subject to the same restrictions on transferability and forfeitability as
the Shares of Restricted Stock with respect to which they were paid, and
shall reduce the number of Shares available for grant under the Plan.

     8.9   TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR
RETIREMENT.

           (a) TERMINATION BY DEATH.  Upon the death of a Participant, all
           restrictions on the Participant's Restricted Stock shall lapse,
           provided, however, such restrictions shall not lapse until the
           expiration of the six (6) month vesting period provided in
           Section 8.3.

           (b) TERMINATION BY DISABILITY.  In the event that a
           Participant's employment with the Company is terminated by
           reason of Disability, the restrictions on the Participant's
           Restricted Stock shall lapse on the date the Participant's
           disability is determined by the Committee to be total and
           permanent, provided, however, such restrictions shall not lapse
           until the expiration of the six (6) month vesting period in
           Section 8.3.

           (c) TERMINATION BY RETIREMENT.  In the event that a
           Participant's employment with the Company is terminated by
           reasons of "normal retirement" (as defined under the then
           established rules of the Company's tax qualified pension
           retirement plan), the restrictions shall lapse on the number of
           shares of Restricted Stock in each restricted stock grant which
           bears the same ratio to the total number of shares of Restricted
           Stock in such grant still subject to restrictions, as the period
           of employment during the Period of Restriction for such grant
           bears to the full Period of Restriction for such grant, rounded
           up to a full share, unless otherwise determined by the Committee
           to vest the previously granted Restricted Stock in some greater




                                        17

                                      
<PAGE>

           amount, provided, however, such restrictions shall not lapse
           until the expiration of the six (6) month vesting period
           provided in Section 8.3.

      8.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  If the employment
of the Participant shall terminate for any reason other than those reasons
described in Section 8.9, including a termination for Cause, all nonvested
Shares of Restricted Stock held by the Participant at that time immediately
shall be forfeited and returned to the Company.  However, with the
exception of a termination of employment for Cause, the Committee, in its
sole discretion, may, at any time prior, including at the time an Award is
made or after such termination, provide for lapsing of the restrictions on
Restricted Stock following employment termination upon such terms and
provisions as it deems proper; provided that, no such lapsing of
restrictions shall occur after the expiration date of the Restricted Stock.

     Shares of Restricted Stock forfeited and returned to the Company may
again be available for grant under the Plan, consistent with Section 16 of
the Exchange Act and the Rules promulgated thereunder.

             ARTICLE 9.  PERFORMANCE UNITS AND PERFORMANCE SHARES

      9.1  GRANT OF PERFORMANCE UNITS/SHARES.  Subject to the terms of the
Plan, Performance Units or Performance Shares may be granted to Employees
at any time and from time to time, as shall be determined by the Committee.
The Committee shall have complete discretion in determining the number of
Performance Units or Performance Shares granted to each Employee.

      9.2  VALUE OF PERFORMANCE UNITS/SHARES.  Each Performance Unit shall
have an initial value that is established by the Committee at the time of
grant.  Each Performance Share shall have an initial value that is in
direct relation to the Fair Market Value of a Share at the time of grant.
The Committee shall set performance goals in its discretion which,
depending on the extent to which they are met, will determine the number
and/or value of Performance Units or Performance Shares that will be paid
out to the Participants.  The time period during which the performance
goals must be met shall be called a "Performance Period."  The Performance
Period pertaining to each Performance Unit or Performance Share Award shall
be between two (2) and six (6) years in length, and shall be established by
the Committee at the time of grant.

      9.3  EARNING OF PERFORMANCE UNITS/SHARES.  After the applicable
Performance Period has ended, the holder of Performance Units or
Performance Shares shall be entitled to receive payout on the number of
Performance Units or Performance Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which
the corresponding performance goals have been achieved.





                                       18

                                     
<PAGE>

      9.4  FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES.  Payment
of earned Performance Units/Performance Shares shall be made in a single
lump sum, within forty-five (45) calendar days, or such longer period as
may be required under Section 16 of the Exchange Act and the Rules
promulgated thereunder, following the close of the applicable Performance
Period.  The Committee, in its sole discretion, may pay earned Performance
Units or Performance Shares in the form of cash or in Shares (or in a
combination thereof) which have an aggregate Fair Market Value equal to the
value of the earned Performance Units or Performance Shares at the close of
the applicable Performance Period; provided, however, that the Committee
may place transfer restrictions on such Shares to meet the requirements of
Section 16 of the Exchange Act and the Rules promulgated thereunder.

      9.5  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT.  In the event the employment of a Participant is terminated by
reason of death, Disability, or "normal retirement" (as defined under the
then established rules of the Company's tax qualified pension retirement
plan) during the applicable Performance Period, the Participant shall
receive a prorated payout on the Performance Units or Performance Shares
based on the Participant's full number of months of service during the
Performance Period as compared to the entire length of the Performance
Period, further adjusted based on the achievement of the preestablished
performance goals.  Payment of earned Performance Units or Performance
Shares shall be made at the same time payments are made to Participants who
did not terminate service during the applicable Performance Period, or such
other time as is required to comply with Section 16 of the Exchange Act and
the Rules promulgated thereunder.

      9.6  TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  In the event that
a Participant terminates employment with the Company for any reason other
than those reasons set forth in Section 9.5, all Performance Units or
Performance Shares shall be forfeited by the Participant to the Company;
provided, however, that in the event of early retirement or an involuntary
termination of the employment of the Participant by the Company other than
for Cause, the Committee, in its sole discretion, may waive the automatic
forfeiture provisions and pay out on a pro rata basis, as provided in
Section 9.5.

      9.7  TRANSFERABILITY.  The Committee may establish the terms by which
any Performance Units may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated.

                    ARTICLE 10.  OTHER STOCK-BASED AWARDS

     10.1  OTHER STOCK-BASED AWARDS.  The Committee shall have the right to
grant other Stock-Based Awards which may include, without limitation, the
grant of Shares based on certain conditions, the payment of cash based on
the performance of the Common Stock, and the payment of Shares in lieu of
cash under other Company incentive bonus programs.




                                      19

                                    
<PAGE>

Payment under or settlement of any such Awards shall be made in such manner
and at such times as the Committee may determine.

     10.2  TRANSFERABILITY.  The Committee may establish the terms by which
any Stock-Based Awards granted under this Section of the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated.

                    ARTICLE 11.  BENEFICIARY DESIGNATION

     Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of
his or her death before he or she receives any or all of such benefit.
Each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be
effective only when filed by the Participant in writing with the Human
Resource Department of the Company, or such other department as the Company
may specify in writing to the Participant, during the Participant's
lifetime.  In the absence of any such designation, benefits remaining
unpaid at the Participant's death shall be paid to the Participant's
estate.

                       ARTICLE 12.  RIGHTS OF EMPLOYEES

     12.1  EMPLOYMENT.  Nothing in the Plan shall interfere with or limit
in any way the right of the Company to terminate any Participant's
employment at any time, nor confer upon any Participant any right to
continue in the employ of the Company.

     For purposes of the Plan, transfer of employment of a Participant
between the Company and any one of its Subsidiaries (or between
Subsidiaries) shall not be deemed a termination of employment.

     12.2  PARTICIPATION.  No Employee shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.

                         ARTICLE 13.  CHANGE IN CONTROL

     In order to maintain all of the Employees' rights in the event of a
Change in Control of the Company, the Committee, as constituted prior to
such Change in Control, in its sole discretion, may, as to any outstanding
Award to an Employee, either at the time the Award to the Employee is made
or at any time thereafter, take any one or more of the following actions:

       (i) Provide for the acceleration of any time periods relating to the
           exercise or realization of any such Award so that such Award may
           be exercised or




                                        20

                                      
<PAGE>

           realized in full on or before a date fixed by the Committee;

      (ii) Provide for the purchase of any such Award by the Company for an
           amount of cash equal to the amount which could have been
           attained upon the exercise of such Award or in realization of
           such Employee's rights had such Award been currently exercisable
           or payable;

     (iii) Make such adjustment to any such Award then outstanding as the
           Committee deems appropriate to reflect such Change in Control
           providing, however, that such change does not detriment the
           value of any Award to the Employee;

      (iv) Cause any such Award then outstanding to be assumed, or new
           rights substituted therefore, by the acquiring or surviving
           corporation in such Change in Control.

     The Committee may, at its discretion, include such further provisions
and limitations in any Employee's Award Agreement, documenting such Awards,
as the Committee may deem equitable and in the best interests of the
Company.





                                        21

                                      
<PAGE>

             ARTICLE 14.  AMENDMENT, MODIFICATION, AND TERMINATION

     14.1  AMENDMENT, MODIFICATION, AND TERMINATION.  With the approval of
the Board, at any time and from time to time, the Committee may terminate,
amend, or modify the Plan.  However, without the approval of the
stockholders of the Company (as may be required by the Code, by Section 16
of the Exchange Act and the Rules promulgated thereunder, by any national
securities exchange or system on which the Shares are then listed or
reported, or by a regulatory body having jurisdiction with respect hereto)
no such termination, amendment, or modification may:

           (a) Increase the total amount of Shares which may be issued
               under this Plan, except as provided in Section 4.3 herein;
               or

           (b) Change the class of Employees eligible to participate in the
               Plan; or


           (c) Materially increase the cost of the Plan or materially
               increase the benefits to Participants; or

           (d) Extend the maximum period after the date of grant during
               which Options or SARs may be exercised; or

           (e) Change the provisions of the Plan regarding Option Price.

     14.2  AWARDS PREVIOUSLY GRANTED.  No termination, amendment, or
modification of the Plan shall in any manner adversely affect any Award
previously granted under the Plan, without the written consent of the
Participant.

                         ARTICLE 15.  WITHHOLDING

     15.1  TAX WITHHOLDING.  The Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, an
amount sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect
to any grant, exercise, or payment made under or as a result of this Plan.

     15.2  SHARE WITHHOLDING.  With respect to withholding required upon
the exercise of NQSOs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event hereunder, Participants may elect, subject
to the approval of the Committee, to satisfy the withholding requirement,
in whole or in part, by having the Company withhold Shares having a Fair
Market Value, on the date the tax is to be determined, equal to the amount
required to be withheld.  All elections shall be irrevocable, and be made
in writing, signed by




                                        22

                                      
<PAGE>

the Participant in advance of the day that the transaction becomes taxable.

     Share withholding elections made by Insiders must comply with any
additional restrictions required by Section 16 of the Exchange Act and the
Rules promulgated thereunder.

                       ARTICLE 16.  INDEMNIFICATION

     Each person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against
and from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid by him or
her in settlement thereof, with the Company's approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or
she undertakes to handle and defend it on his or her own behalf.  The
foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such Persons may be entitled under the
Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.

                           ARTICLE 17.  SUCCESSORS

     All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.

                       ARTICLE 18.  REQUIREMENTS OF LAW

     18.1  REQUIREMENTS OF LAW.  The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

     18.2  GOVERNING LAW.  To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with
and governed by the laws of the State of Oregon.






                                        23

                                      
                                      
<PAGE>




<TABLE> <S> <C>


<ARTICLE> UT

<LEGEND>
THIS  SCHEDULE  CONTAINS  SUMMARY  FINANCIAL  INFORMATION  EXTRACTED  FROM  THE
CONSOLIDATED  FINANCIAL  STATEMENTS  FILED  ON  FORM 10-K FOR THE TWELVE MONTHS
ENDED DECEMBER 31, 1996 FOR PORTLAND GENERAL CORPORATION (PGC) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CIK> 0000079636
<NAME> PORTLAND GENERAL CORPORATION
       
<CAPTION>

<S>                                                          <C>
<PERIOD-TYPE>                                                12-MOS
<FISCAL-YEAR-END>                                            DEC-31-1996
<PERIOD-END>                                                 DEC-31-1996
<BOOK-VALUE>                                                 PER-BOOK
<TOTAL-NET-UTILITY-PLANT>                                    1,782,159
<OTHER-PROPERTY-AND-INVEST>                                    454,001
<TOTAL-CURRENT-ASSETS>                                         258,949
<TOTAL-DEFERRED-CHARGES>                                     1,088,140
<OTHER-ASSETS>                                                       0
<TOTAL-ASSETS>                                               3,583,249
<COMMON>                                                       192,442
<CAPITAL-SURPLUS-PAID-IN>                                      584,272
<RETAINED-EARNINGS>                                            194,740
<TOTAL-COMMON-STOCKHOLDERS-EQ>                                 971,454
<PREFERRED-MANDATORY>                                           30,000
<PREFERRED>                                                          0
<LONG-TERM-DEBT-NET>                                           926,292
<SHORT-TERM-NOTES>                                                   0
<LONG-TERM-NOTES-PAYABLE>                                            0
<COMMERCIAL-PAPER-OBLIGATIONS>                                  92,027
<LONG-TERM-DEBT-CURRENT-PORT>                                   89,937
<PREFERRED-STOCK-CURRENT>                                            0
<CAPITAL-LEASE-OBLIGATIONS>                                      6,750
<LEASES-CURRENT>                                                 2,622
<OTHER-ITEMS-CAPITAL-AND-LIAB>                               1,464,167
<TOT-CAPITALIZATION-AND-LIAB>                                3,583,249
<GROSS-OPERATING-REVENUE>                                    1,111,816
<INCOME-TAX-EXPENSE>                                           109,988
<OTHER-OPERATING-EXPENSES>                                     777,269
<TOTAL-OPERATING-EXPENSES>
                                     887,257
<OPERATING-INCOME-LOSS>                                        224,559
<OTHER-INCOME-NET>                                             (14,692)
<INCOME-BEFORE-INTEREST-EXPEN>                                 209,867
<TOTAL-INTEREST-EXPENSE>                                        77,538
<NET-INCOME>                                                   132,329
<PREFERRED-STOCK-DIVIDENDS>                                      2,793
<EARNINGS-AVAILABLE-FOR-COMM>                                  129,536
<COMMON-STOCK-DIVIDENDS>                                        65,516
<TOTAL-INTEREST-ON-BONDS>                                       63,699
<CASH-FLOW-OPERATIONS>                                         345,747
<EPS-PRIMARY>                                                    $2.53
<EPS-DILUTED>                                                    $2.53

<FN>
<F1>Represents the 12 month-to-date figure ending December 31, 1996.
</FN>

        

                                  
<PAGE>


</TABLE>




<TABLE> <S> <C>

<ARTICLE> UT

<LEGEND>
THIS  SCHEDULE  CONTAINS  SUMMARY  FINANCIAL  INFORMATION  EXTRACTED  FROM  THE
CONSOLIDATED  FINANCIAL  STATEMENTS  FILED  ON  FORM 10-K FOR THE TWELVE MONTHS
ENDED DECEMBER 31, 1996 FOR PORTLAND GENERAL ELECTRIC  COMPANY AND SUBSIDIARIES
(PGE)  AND  IS  QUALIFIED  IN  ITS  ENTIRETY  BY  REFERENCE  TO SUCH  FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CIK> 0000784977
<NAME> PORTLAND GENERAL ELECTRIC COMPANY

       
<CAPTION>

<S>                                                         <C>
<PERIOD-TYPE>                                               12-MOS
<FISCAL-YEAR-END>                                           DEC-31-1996
<PERIOD-END>                                                DEC-31-1996
<BOOK-VALUE>                                                PER-BOOK
<TOTAL-NET-UTILITY-PLANT>                                   1,782,159
<OTHER-PROPERTY-AND-INVEST>                                   262,005
<TOTAL-CURRENT-ASSETS>                                        267,545
<TOTAL-DEFERRED-CHARGES>                                    1,086,503
<OTHER-ASSETS>                                                      0
<TOTAL-ASSETS>                                              3,398,212
<COMMON>                                                      160,346
<CAPITAL-SURPLUS-PAID-IN>                                     475,055
<RETAINED-EARNINGS>                                           292,124
<TOTAL-COMMON-STOCKHOLDERS-EQ>                                927,525
<PREFERRED-MANDATORY>                                          30,000
<PREFERRED>                                                         0
<LONG-TERM-DEBT-NET>                                          926,292
<SHORT-TERM-NOTES>                                                  0
<LONG-TERM-NOTES-PAYABLE>                                           0
<COMMERCIAL-PAPER-OBLIGATIONS>                                 92,027
<LONG-TERM-DEBT-CURRENT-PORT>                                  89,937
<PREFERRED-STOCK-CURRENT>                                           0
<CAPITAL-LEASE-OBLIGATIONS>                                     6,750
<LEASES-CURRENT>                                                2,622
<OTHER-ITEMS-CAPITAL-AND-LIAB>                              1,323,059
<TOT-CAPITALIZATION-AND-LIAB>                               3,398,212
<GROSS-OPERATING-REVENUE>                                   1,109,831
<INCOME-TAX-EXPENSE>                                          112,661
<OTHER-OPERATING-EXPENSES>
                                    772,424
<TOTAL-OPERATING-EXPENSES>                                    885,085
<OPERATING-INCOME-LOSS>                                       224,746
<OTHER-INCOME-NET>                                              6,685
<INCOME-BEFORE-INTEREST-EXPEN>                                231,431
<TOTAL-INTEREST-EXPENSE>                                       75,516
<NET-INCOME>                                                  155,915
<PREFERRED-STOCK-DIVIDENDS>                                     2,793
<EARNINGS-AVAILABLE-FOR-COMM>                                 153,122
<COMMON-STOCK-DIVIDENDS>                                      105,187
<TOTAL-INTEREST-ON-BONDS>                                      63,699
<CASH-FLOW-OPERATIONS>                                        357,360
<EPS-PRIMARY>                                                       0 
<EPS-DILUTED>                                                       0

<FN>
<F1>Represents the 12 month-to-date figure ending December 31, 1996.
</FN>

        

                                     
<PAGE>


</TABLE>





______________________________________________________________________________

                       PORTLAND GENERAL ELECTRIC COMPANY



                                       TO



                              MARINE MIDLAND BANK
                      (FORMERLY THE MARINE MIDLAND TRUST
                              COMPANY OF NEW YORK)
                                                                       TRUSTEE.


                              ____________________

                      Forty-sixth Supplemental Indenture


                              Dated August 1, 1996

                              ____________________


                              First Mortgage Bonds,
                            Medium Term Note Series V





             Supplemental to Indenture of Mortgage and Deed of Trust,
             dated July 1, 1945 of Portland General Electric Company.

                                      
<PAGE>



     FORTY-SIXTH  SUPPLEMENTAL INDENTURE, dated August 1, 1996, made
by  and  between  Portland   General  Electric  Company,  an  Oregon
corporation (hereinafter called  the  "Company"), party of the first
part, and Marine Midland Bank (formerly  The  Marine  Midland  Trust
Company  of  New  York),  a  New  York banking corporation and trust
company  (hereinafter called the "Trustee"),  party  of  the  second
part.

WHEREAS, the  Company  has  heretofore  executed  and  delivered its
Indenture  of Mortgage and Deed of Trust (herein sometimes  referred
to as the "Original  Indenture"), dated July 1, 1945, to the Trustee
to secure an issue of First Mortgage Bonds of the Company; and

WHEREAS, Bonds in the aggregate principal amount of $34,000,000 have
heretofore been issued under and in accordance with the terms of the
Original Indenture as  Bonds  of an initial series designated "First
Mortgage Bonds, 3 1/8 % Series  due 1975"
 (herein sometimes referred
to as the "Bonds of the 1975 Series"); and

WHEREAS, the Company has heretofore  executed  and  delivered to the
Trustee several supplemental indentures which provided,  among other
things, for the creation or issuance of several new series  of First
Mortgage Bonds under the terms of the Original Indenture as follows:

SUPPLEMENTAL                                                PRINCIPAL
INDENTURE      DATED            SERIES                      AMOUNT

First          11-1-47  3 1/2%  Series due 1977             $  6,000,000(1)
Second         11-1-48  3 1/2%  Series due  1977               4,000,000(1)
Third          5-1-52   3 1/2%  Second Series due 1977         4,000,000(1)
Fourth         11-1-53  4 1/8%  Series due 1983                8,000,000(2)
Fifth          11-1-54  3 3/8%  Series due 1984               12,000,000(1)
Sixth          9-1-56   4 1/4%  Series due 1986               16,000,000(1)
Seventh        6-1-57   4 7/8%  Series due 1987               10,000,000(1)
Eighth         12-1-57  5 1/2%  Series due 1987               15,000,000(3)
Ninth          6-1-60   5 1/4%  Series due 1990               15,000,000(1)
Tenth          11-1-61  5 1/8%  Series due 1991               12,000,000(1)
Eleventh       2-1-63   4 5/8%  Series due 1993               15,000,000(1)
Twelfth        6-1-63   4 3/4%  Series due 1993               18,000,000(1)
Thirteenth     4-1-64   4 3/4%  Series due 1994               18,000,000(1)
Fourteenth     3-1-65   4.70%   Series due 1995               14,000,000(1)
Fifteenth      6-1-66   5 7/8%  Series due 1996               12,000,000(1)
Sixteenth      10-1-67  6.60%   Series due October 1, 1997    24,000,000
Seventeenth    4-1-70   8 3/4%  Series due April 1, 1977      20,000,000(1)
Eighteenth     11-1-70  9 7/8%  Series due November 1, 2000   20,000,000(4)
Nineteenth     11-1-71  8%      Series due November 1, 2001   20,000,000(4)
Twentieth      11-1-72  7 3/4%  Series due November 1, 2002   20,000,000


                                    
<PAGE>

                                      2

SUPPLEMENTAL                                                PRINCIPAL
INDENTURE      DATED            SERIES                      AMOUNT

Twenty-first   4-1-73   7.95%   Series due April 1, 2003    $ 35,000,000
Twenty-second  10-1-73  8 3/4%  Series due October 1, 2003    17,000,000(4)
Twenty-third   12-1-74  10 1/2% Series due December 1, 1980   40,000,000(1)
Twenty-fourth  4-1-75   10%     Series due April 1, 1982      40,000,000(1)
Twenty-fifth   6-1-75   9 7/8%  Series due June 1, 1985       27,000,000(1)
Twenty-sixth   12-1-75  11 5/8% Series due December 1, 2005   50,000,000(4)
Twenty-seventh 4-1-76   9 1/2%  Series due April 1, 2006      50,000,000(4)
Twenty-eighth  9-1-76   9 3/4%  Series due September 1, 1996  62,500,000(4)
Twenty-ninth   6-1-77   8 3/4%  Series due June 1, 2007       50,000,000(4)
Thirtieth      10-1-78  9.40%   Series due January 1, 1999    25,000,000(4)
Thirty-first   11-1-78  9.80%   Series due November 1, 1998   50,000,000(4)
Thirty-second  2-1-80   13 1/4% Series due February 1, 2000   55,000,000(4)
Thirty-third   8-1-80   13 7/8% Series due August 1, 2010     75,000,000(4)
Thirty-sixth   10-1-82  13 1/2% Series due October 1, 2012    75,000,000(4)
Thirty-seventh 11-15-84 11 5/8% Extendable Series A due
                                November 15, 1999             75,000,000(4)
Thirty-eighth  6-1-85   10 3/4% Series due June 1, 1995       60,000,000(4)
Thirty-ninth   3-1-86   9 5/8%  Series due March 1, 2016     100,000,000(4)
Fortieth       10-1-90  Medium Term Note Series              200,000,000
Forty-first    12-1-91  Medium Term Note Series I            150,000,000
Forty-second   4-1-93   7-3/4% Series due April 15, 2023     150,000,000
Forty-third    7-1-93   Medium Term Note Series II            75,000,000
Forty-fourth   8-24-94  Medium Term Note Series III           75,000,000
Forty-fifth    5-01-95  Medium Term Note Series IV            75,000,000
____________   _______  ___________________________________ ____________

(1) Paid in full at maturity.

(2) This entire issue of Bonds was redeemed out of proceeds from the
    sale of First Mortgage Bonds, 3 3/8% Series due 1984.

(3) This entire issue of Bonds was redeemed out of proceeds from the
    sale of First Mortgage Bonds, 4 5/8% Series due 1993.

(4) Redeemed in full prior to maturity.

                                    
<PAGE>

                                      3

which bonds  are  sometimes  referred to herein as the "Bonds of the
1977 Series", "Bonds of the 1977  Second Series", "Bonds of the 1983
Series", "Bonds of the 1984 Series",  "Bonds  of  the  1986 Series",
"Bonds of the 4 7/8% Series due 1987", "Bonds of the 5 1/2% Series
due  1987", "Bonds of the 1990 Series", "Bonds of the 1991  Series",
"Bonds of the 4 5/8% Series due 1993", "Bonds of the 4 3/4% Series
due 1993",  "Bonds  of the 1994 Series", "Bonds of the 1995 Series",
"Bonds of the 1996 Series",  "Bonds  of  the 1997 Series", "Bonds of
the 1977 Third Series", "Bonds of the 2000  Series",  "Bonds  of the
2001  Series",  "Bonds  of  the  2002  Series",  "Bonds  of the 2003
Series",  "Bonds  of  the  2003  Second Series", "Bonds of the  1980
Series", "Bonds of the 1982 Series",  "Bonds  of  the  1985 Series",
"Bonds  of the 2005 Series", "Bonds of the 2006 Series",  "Bonds  of
the 1996  Second  Series", "Bonds of the 2007 Series", "Bonds of the
1999 Series", "Bonds  of the 1998 Series", "Bonds of the 2000 Second
Series", "Bonds of the  2010  Series",  "Bonds  of the 2012 Series",
"Bonds  of  the  Extendable  Series  A", "Bonds of the  1995  Second
Series", "Bonds of the 2016 Series", "Bonds  of the Medium Term Note
Series", "Bonds of the Medium Term Note Series  I",  "Bonds  of  the
2023  Series",  "Bonds of the Medium Term Note Series II", "Bonds of
the Medium Term Note Series III", and "Bonds of the Medium Term Note
Series IV" respectively; and

   WHEREAS, the Original Indenture provides that the Company and the
Trustee, subject  to the conditions and restrictions in the Original
Indenture contained,  may  enter  into  an  indenture  or indentures
supplemental  thereto,  which shall thereafter form a part  of  said
Original Indenture, among other things, to mortgage, pledge, convey,
transfer or assign to the  Trustee and to subject to the lien of the
Original Indenture with the same force and effect as though included
in the granting clauses thereof,  additional  properties acquired by
the  Company  after  the  execution  and  delivery of  the  Original
Indenture, and to provide for the creation  of  any  series of Bonds
(other than the Bonds of the 1975 Series), designating the series to
be  created and specifying the form and provisions of the  Bonds  of
such  series  as  therein  provided  or  permitted, and to provide a
sinking, amortization, replacement or other  analogous  fund for the
benefit  of  all  or any of the Bonds of any one or more series,  of
such  character  and  of  such  amount,  and  upon  such  terms  and
conditions as shall be contained in such supplemental indenture; and

   WHEREAS, the Company has heretofore executed and delivered to the
Trustee the Fortieth  Supplemental  Indenture  and  the  Forty-first
Supplemental  Indenture  amending  in  certain respects the Original
Indenture, as theretofore supplemented (such  Original  Indenture as
so amended hereinafter referred to as the "Original Indenture"); and

                                  
<PAGE>

                                    4

   WHEREAS, the Company desires to provide for the creation of a new
series  of  bonds to be known as "First Mortgage Bonds, Medium  Term
Note Series V"  (sometimes  herein  referred to as the "Bonds of the
Medium Term Note Series V"), and to specify  the form and provisions
of  the  Bonds  of  such  series, and to mortgage,  pledge,  convey,
transfer or assign to the Trustee  and to subject to the lien of the
Original Indenture certain additional  properties  acquired  by  the
Company  since the execution and delivery of the Original Indenture;
and

   WHEREAS,  the  Company intends at this time and from time to time
to issue an aggregate  principal  amount of Bonds of the Medium Term
Note Series V not to exceed $50,000,000 under and in accordance with
the terms of the Original Indenture  and the supplemental indentures
above referred to; and

   WHEREAS,  the Bonds of the Medium Term  Note  Series  V  and  the
Trustee's authentication  certificate to be executed on the Bonds of
the  Medium Term Note Series  V  are  to  be  substantially  in  the
following forms, respectively:

           (Form of Bond of the Medium Term Note Series V)
                            [Face of Bond]

Registered                                                Registered
No.                                                       $

                    PORTLAND GENERAL ELECTRIC COMPANY
            FIRST MORTGAGE BOND, MEDIUM TERM NOTE SERIES V
                              (Fixed Rate)

ORIGINAL ISSUE DATE:       INTEREST RATE:                MATURITY DATE:
                                       %
INTEREST PAYMENT           INTEREST PAYMENT              INITIAL REGULAR
DATES:                     PERIOD:                       REDEMPTION DATE:

INITIAL REGULAR            ANNUAL REGULAR                OPTIONAL REPAYMENT
REDEMPTION PERCENTAGE:     REDEMPTION PERCENTAGE         DATE(S):
                           REDUCTION:



   Portland   General   Electric   Company,  an  Oregon  corporation
(hereinafter sometimes called the "Company"),  for  value  received,
hereby            promises            to            pay           to
___________________________________________________________________,
or                        registered                        assigns,
____________________________________________________________________
Dollars  on  the Maturity Date specified above (except to the extent
redeemed

                                 
<PAGE>

                                   5

or repaid prior  to  the Maturity Date), and to pay interest thereon
at the Interest Rate per  annum specified above, until the principal
hereof  is  paid  or  duly  made  available  for  payment,  monthly,
quarterly,  semiannually or annually,  as  specified  above  as  the
Interest Payment Period, and on the Interest Payment Dates specified
above, in each  year  commencing  on the first Interest Payment Date
next succeeding the Original Issue  Date specified above, unless the
Original Issue Date occurs between a Regular Record Date, as defined
below, and the next succeeding Interest  Payment Date, in which case
commencing  on  the  second  Interest Payment  Date  succeeding  the
Original Issue Date, to the registered  holder  of  this bond on the
Regular Record Date with respect to such Interest Payment  Date, and
on  the  Maturity  Date  shown  above  (or  any  Redemption  Date as
described  on  the  reverse  hereof  or  any Optional Repayment Date
specified above).  Interest on this bond will  accrue  from the most
recent Interest Payment Date to which interest has been paid or duly
provided  for  or,  if no interest has been paid, from the  Original
Issue Date specified above, until the principal hereof has been paid
or duly made available  for  payment.   If the Maturity Date (or any
Redemption  Date  or any Optional Repayment  Date)  or  an  Interest
Payment Date falls  on  a day which is not a Business Day as defined
below, principal or interest  payable  with respect to such Maturity
Date  (or Redemption Date or Optional Repayment  Date)  or  Interest
Payment  Date  will be paid on the next succeeding Business Day with
the same force and  effect  as  if  made  on  such Maturity Date (or
Redemption  Date  or  Optional Repayment Date) or  Interest  Payment
Date, as the case may be,  and  no  interest  shall  accrue  for the
period  from  and  after  such  Maturity Date (or Redemption Date or
Optional Repayment Date) or Interest  Payment Date.  The interest so
payable, and punctually paid or duly provided  for,  on any Interest
Payment  Date  will, subject to certain exceptions, be paid  to  the
person in whose name this bond (or one or more predecessor bonds) is
registered at the close of business on the fifteenth day (whether or
not a Business Day)  next  preceding such Interest Payment Date (the
"Regular Record Date"); PROVIDED,  HOWEVER, that interest payable on
the Maturity Date (or any Redemption  Date or any Optional Repayment
Date) will be payable to the person to  whom  the  principal  hereof
shall  be  payable.   Should  the  Company default in the payment of
interest ("Defaulted Interest"), the  Defaulted  Interest  shall  be
paid  to  the  person  in  whose  name  this  bond  (or  one or more
predecessor  bonds) is registered on a subsequent record date  fixed
by the Company,  which  subsequent record date shall be fifteen (15)
days prior to the payment  of  such  Defaulted  Interest.   As  used
herein,  "Business  Day"  means  any  day,  other than a Saturday or
Sunday, on which banks in The City of New York  are  not required or
authorized by law to close.

   Payment  of  the principal of and interest on this bond  will  be
made in 

                                
<PAGE>

                                  6

immediately  available  funds at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The
City of New York, in such coin or  currency  of the United States of
America  as at the time of payment is legal tender  for  payment  of
public  and  private  debts;  PROVIDED,  HOWEVER,  that  payment  of
interest  on  any Interest Payment Date other than the Maturity Date
(or any Redemption  Date or any Optional Repayment Date) may be made
at the option of the  Company  by check mailed to the address of the
person entitled thereto as such  address  shall  appear  in the bond
register  of the Company.  A person holding $10,000,000 or  more  in
aggregate principal amount of bonds having the same Interest Payment
Date (whether  having  identical  or different terms and provisions)
will be entitled to receive payments of interest by wire transfer of
immediately  available funds if appropriate  written  wire  transfer
instructions have been received by the Trustee not less than sixteen
days prior to the applicable Interest Payment Date.

   Reference is  hereby  made to the further provisions of this bond
set forth on the reverse hereof,  and  such further provisions shall
for all purposes have the same effect as  though  fully set forth at
this place.

   This  bond  shall  not become or be valid or obligatory  for  any
purpose until the authentication  certificate hereon shall have been
signed by the Trustee.

                                 
<PAGE>

                                   7

   IN WITNESS WHEREOF, PORTLAND GENERAL  ELECTRIC COMPANY has caused
this instrument to be executed manually or  in facsimile by its duly
authorized officers and has caused a facsimile of its corporate seal
to be imprinted hereon.


Dated:

                      PORTLAND GENERAL ELECTRIC COMPANY,

                      By:  
                        [Title]


Attest:
                        Secretary.

           (Form of Trustee's Authentication Certificate for
               Bonds of the Medium Term Note Series V)

   This  is  one  of  the  bonds,  of the series designated  herein,
described in the within-mentioned Indenture.

                      MARINE MIDLAND BANK, AS  TRUSTEE,

                      By:
                      Authorized Officer


                                 
<PAGE>

                                   8

                            [Reverse of Bond]

   This bond is one of the bonds, of  a  series designated as Medium
Term Note Series V of an authorized issue  of  bonds of the Company,
known as First Mortgage Bonds, not limited as to  maximum  aggregate
principal amount, all issued or issuable in one or more series under
and equally secured (except insofar as any sinking fund, replacement
fund or other fund established in accordance with the provisions  of
the  Indenture  hereinafter mentioned may afford additional security
for the bonds of  any  specific  series) by an Indenture of Mortgage
and Deed of Trust dated July 1, 1945, duly executed and delivered by
the Company to The Marine Midland  Trust  Company  of  New York (now
Marine  Midland  Bank), as Trustee, as supplemented and modified  by
forty-six supplemental  indentures  (such  Indenture of Mortgage and
Deed  of  Trust  as so supplemented and modified  being  hereinafter
called the "Indenture"),  to  which  Indenture  and  all  indentures
supplemental thereto, reference is hereby made for a description  of
the  property  mortgaged and pledged as security for said bonds, the
nature and extent  of  the  security,  and  the  rights,  duties and
immunities  thereunder of the Trustee, the rights of the holders  of
said bonds and  of the Trustee and of the Company in respect of such
security,  and the  terms  upon  which  said  bonds  may  be  issued
thereunder.

   This bond will not be subject to any sinking fund.

   This bond may be subject to repayment at the option of the holder
on the Optional  Repayment  Date(s),  if  any, indicated on the face
hereof.  If no Optional Repayment Dates are  set  forth  on the face
hereof,  this bond may not be so repaid at the option of the  holder
hereof prior  to maturity.  On any Optional Repayment Date this bond
shall be repayable  in  whole  or  in  part  in increments of $1,000
(provided  that any remaining principal hereof  shall  be  at  least
$100,000) at  the  option  of the holder hereof at a repayment price
equal to 100% of the principal  amount  to  be repaid, together with
interest thereon payable to the date of repayment.  For this bond to
be repaid in whole or in part at the option of  the  holder  hereof,
this bond must be received, with the form entitled "Option to  Elect
Repayment" below duly completed, by the Trustee at 140 Broadway  - A
Level,  New  York,  New  York  10005-1180, or such address which the
Company shall from time to time notify the holders of the bonds, not
more than 60 nor less than 20 days  prior  to  an Optional Repayment
Date.  Exercise of such repayment option by the  holder hereof shall
be irrevocable.

                                
<PAGE>

                                   9

   This bond may be redeemed by the Company on any date on and after
the Initial Regular Redemption Date, if any, indicated  on  the face
hereof.   If no Initial Regular Redemption Date is set forth on  the
face hereof, this bond may not be redeemed prior to maturity, except
as provided  in  the  second succeeding paragraph.  On and after the
Initial Regular Redemption  Date,  if any, this bond may be redeemed
at any time in whole or from time to  time  in part in increments of
$1,000 (provided that any remaining principal  hereof  shall  be  at
least  $100,000)  at  the  option  of  the Company at the applicable
Regular Redemption Price (as defined below)  together  with interest
thereon payable to the date of such redemption, on notice  given not
more than 90 nor less than 30 days prior to such date.  Any  date on
which Bonds are to be redeemed is herein called a "Redemption Date".

   The  "Regular  Redemption  Price"  shall initially be the Initial
Regular Redemption Percentage, shown on  the  face  hereof,  of  the
principal  amount  of  this bond to be redeemed and shall decline at
each anniversary of the  Initial  Regular  Redemption Date, shown on
the  face  hereof,  by  the  Annual  Regular  Redemption  Percentage
Reduction, if any, shown on the face hereof, of the principal amount
to be redeemed until the Regular Redemption Price  is  100%  of such
principal amount.

   The  Bonds  may  be  redeemed prior to maturity as a whole at any
time or in part from time to time (in increments as specified in the
second  preceding  paragraph)  in  the  instances  provided  in  the
Indenture by the application  of proceeds of the sale or disposition
substantially as an entirety of the Company's electric properties at
Portland, Oregon, upon payment  of  the  principal  amount  thereof,
together  with  interest accrued to the date of such redemption,  on
notice given as provided in such second preceding paragraph.

   Interest payments  on  this bond will include interest accrued to
but excluding the Interest Payment Date or the Maturity Date, as the
case may be.  Interest payments  for  this bond will be computed and
paid on the basis of a 360-day year of twelve 30-day months.

   If  this  bond  or any portion thereof  ($1,000  or  an  integral
multiple thereof) is  duly  called  for  redemption and payment duly
provided  for  as  specified in the Indenture,  this  bond  or  such
portion thereof shall  cease  to  be  entitled  to  the  lien of the
Indenture  from  and  after the date payment is so provided for  and
shall cease to bear interest  from  and  after  the  redemption date
fixed for such redemption.

   In the event of the selection for redemption of a portion only of
the principal of this bond, payment of the redemption  price will be
made  only  

                                
<PAGE>

                                  10

upon  surrender of this bond in exchange for a  bond  or
bonds (but only of  authorized  denominations)  for  the  unredeemed
balance of the principal amount of this bond.

   The Indenture contains provisions permitting the Company  and the
Trustee,   with  the  consent  of  the  holders  of  not  less  than
seventy-five per cent in principal amount of the bonds (exclusive of
bonds disqualified  by  reason of the Company's interest therein) at
the time outstanding, including,  if  more  than one series of bonds
shall  be at the time outstanding, not less than  sixty  percent  in
principal amount of each series affected, to effect, by an indenture
supplemental  to  the Indenture, modifications or alterations of the
Indenture and of the  rights  and  obligations of the Company and of
the holders of the bonds and coupons;  provided,  however,  that  no
such  modification  or  alteration shall be made without the written
approval or consent of the  holder  hereof which will (a) extend the
maturity  of this bond or reduce the rate  or  extend  the  time  of
payment of  interest  hereon  or  reduce the amount of the principal
hereof or reduce any premium payable  on  the redemption hereof, (b)
permit the creation of any lien, not otherwise  permitted,  prior to
or  on  a  parity with the lien of the Indenture, or (c) reduce  the
percentage of the principal amount of the bonds upon the approval or
consent of the  holders of which modifications or alterations may be
made as aforesaid.

   This bond is transferable  by  the  registered  owner  hereof  in
person  or  by  his  attorney  duly  authorized  in  writing, at the
corporate  trust office of the Trustee in the Borough of  Manhattan,
City and State  of  New  York,  upon  surrender  of  this  bond  for
cancellation  and  upon  payment  of any taxes or other governmental
charges payable upon such transfer,  and  thereupon a new registered
bond or bonds of the same series and of a like  aggregate  principal
amount  will  be issued to the transferee or transferees in exchange
therefor.

   The Company,  the Trustee and any paying agent may deem and treat
the person in whose  name  this  bond  is registered as the absolute
owner hereof for the purpose of receiving  payments of or an account
of the principal hereof and interest due hereon,  and  for all other
purposes, whether or not this bond shall be overdue, and neither the
Company, the Trustee nor any paying agent shall be affected  by  any
notice to the contrary.

   Bonds  of  this series are issuable only in fully registered form
without coupons  in  denominations of $100,000 or integral multiples
of $1,000 in excess thereof.   The  registered owner of this bond at
his option may surrender the same for cancellation at said office of
the  Trustee  and receive in exchange therefor  the  same  aggregate
principal amount of registered bonds of the same series and with the
same terms and  provisions,  including the 

                                 
<PAGE>

                                   11

same issue date, maturity
date, and redemption provisions,  if any, and which bear interest at
the same rate, but of other authorized  denominations,  upon payment
of  any  taxes  or  other  governmental  charges  payable  upon such
exchange  and  subject to the terms and conditions set forth in  the
Indenture.

   If an event of  default  as defined in the Indenture shall occur,
the principal of this bond may become or be declared due and payable
before maturity in the manner  and  with  the effect provided in the
Indenture.  The holders, however, of certain  specified  percentages
of  the  bonds  at the time outstanding, including in certain  cases
specified percentages  of  bonds  of  particular  series, may in the
cases, to the extent and as provided in the Indenture, waive certain
defaults thereunder and the consequences of such defaults.

   No recourse shall be had for the payment of the  principal  of or
the  interest  on  this  bond,  or  for  any  claim based hereon, or
otherwise  in  respect  hereof  or  of  the Indenture,  against  any
incorporator,  shareholder, director or officer,  past,  present  or
future, as such,  of  the Company or of any predecessor or successor
corporation,  either  directly   or  through  the  Company  or  such
predecessor  or successor corporation,  under  any  constitution  or
statute or rule  of  law, or by the enforcement of any assessment or
penalty,  or  otherwise,   all   such  liability  of  incorporators,
shareholders, directors and officers,  as  such,  being  waived  and
released  by  the  holder and owner hereof by the acceptance of this
bond and as provided in the Indenture.

   The Indenture provides  that  this  bond  shall be deemed to be a
contract made under the laws of the State of New  York,  and for all
purposes shall be construed in accordance with and governed  by  the
laws of said State.

                       OPTION TO ELECT REPAYMENT

   The undersigned hereby irrevocably request(s) and instruct(s) the
Company  to  repay  this  bond  (or  portion hereof specified below)
pursuant  to  its terms at a price equal  to  the  principal  amount
hereof  together  with  interest  to  the  repayment  date,  to  the
undersigned, at ____________________________________________________
____________________________________________________________________
   (Please print or typewrite name and address of the undersigned)

   For this  bond  to  be  repaid,  the  Trustee must receive at 140
Broadway - A Level, New York, New York 10005-1180,  or at such other
place or places of which the Company shall from time  to time notify
the  holder  of  this bond, not more than 60 nor less than  20  days
prior to an Optional  Repayment  Date,  if any, shown on the face of
this bond, this bond with this "Option to Elect 

                                  
<PAGE>

                                    12

Repayment" form duly completed.

   If less than the entire principal amount  of  this  bond is to be
repaid, specify the portion hereof (which shall be in increments  of
$1,000)  which  the  holder  elects  to  have repaid and specify the
denomination  or  denominations  (which  shall  be  $100,000  or  an
integral multiple of $1,000 in excess of $100,000)  of  the bonds to
be  issued  to  the  holder  for the portion of this bond not  being
repaid (in the absence of any such specification, one such bond will
be issued for the portion not being repaid).

$_____________________     

                           NOTICE:    The   signature  on  this  Option  to
Date_________________      Elect   Repayment  must
                           correspond  with  the name as written  upon  the
                           face of this bond in  every  particular, without
                           alteration   or   enlargement   or  any   change
                           whatever.

        (End of Form of Bond of the Medium Term Note Series V)

and

   WHEREAS,  all  acts and proceedings required by law  and  by  the
charter or articles  of  incorporation  and  bylaws  of  the Company
necessary to make the Bonds of the Medium Term Note Series  V  to be
issued  hereunder,  when  executed by the Company, authenticated and
delivered by the Trustee and  duly  issued,  the  valid, binding and
legal   obligations   of   the  Company,  and  to  constitute   this
Supplemental Indenture a valid  and  binding  instrument,  have been
done  and taken; and the execution and delivery of this Supplemental
Indenture have been in all respects duly authorized;

   NOW,  THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH, that, in
order to secure  the  payment  of the principal of, premium, if any,
and interest on all Bonds at any  time  issued and outstanding under
the Original Indenture as supplemented and  modified  by  the forty-
five   supplemental   indentures   hereinbefore   described  and  as
supplemented and modified by this Supplemental Indenture,  according
to  their  tenor,  purport and effect, and to secure the performance
and observance of all  the  covenants  and  conditions  therein  and
herein  contained,  and for the purpose of confirming and perfecting
the lien of the Original  Indenture on the properties of the Company
hereinafter described, or referred  to, and for and in consideration
of the premises and of the mutual covenants  herein  contained,  and
acceptance  of  the  Bonds  of  the Medium Term Note Series V by the
holders thereof, and for other valuable  consideration,  the receipt
whereof  is  hereby  acknowledged,  the  Company  has  executed  and
delivered  this  

                                
<PAGE>

                                  13

Supplemental  Indenture  and by these presents does
grant,  bargain,  sell,  warrant, alien, convey,  assign,  transfer,
mortgage, pledge, hypothecate, set over and confirm unto the Trustee
the  following  property,  rights,  privileges  and  franchises  (in
addition to all other property,  rights,  privileges  and franchises
heretofore  subjected  to  the  lien  of  the Original Indenture  as
supplemented by the forty-five supplemental  indentures hereinbefore
described  and not heretofore released from the  lien  thereof),  to
wit:

                               CLAUSE I

   Without in  any  way limiting anything hereinafter described, all
and singular the lands,  real  estate,  chattels  real, interests in
land,   leaseholds,   ways,  rights-of-way,  easements,  servitudes,
permits  and  licenses,  lands   under   water,   riparian   rights,
franchises,   privileges,   electric   generating  plants,  electric
transmission  and  distribution  systems,  and   all  apparatus  and
equipment  appertaining  thereto,  offices,  buildings,  warehouses,
garages, and other structures, tracks, machine  shops, materials and
supplies and all property of any nature appertaining  to  any of the
plants,  systems, business or operations of the Company, whether  or
not affixed  to  the  realty,  used  in  the operation of any of the
premises or plants or systems or otherwise, which have been acquired
by  the  Company since the execution and delivery  of  the  Original
Indenture  and not heretofore included in any indenture supplemental
thereto, and  now  owned  or  which may hereafter be acquired by the
Company (other than excepted property  as  defined  in  the Original
Indenture).

                              CLAUSE II

   All  corporate,  Federal,  State,  municipal  and  other permits,
consents,  licenses, bridge licenses, bridge rights, river  permits,
franchises,  grants,  privileges  and  immunities  of every kind and
description, owned, held, possessed or enjoyed by the Company (other
than excepted property as defined in the Original Indenture) and all
renewals, extensions, enlargements and modifications of any of them,
which have been acquired by the Company since the execution  and the
delivery  of  the Original Indenture and not heretofore included  in
any indenture supplemental  thereto,  and  now  owned  or  which may
hereafter be acquired by the Company.

                              CLAUSE III

   Together   with   all   and   singular   the  plants,  buildings,
improvements,   additions,   tenements,  hereditaments,   easements,
rights,  privileges,  licenses  and   franchises   and   all   other
appurtenances whatsoever belonging or in any wise pertaining to  any
of  the  property hereby mortgaged or pledged, or 

                                 
<PAGE>
                               
                                   14

intended so to be,
or any part thereof, and the reversion and reversions, remainder and
remainders,  and  the  rents,  revenues,  issues,  earnings, income,
products and profits thereof, and every part and parcel thereof, and
all the estate, right, title, interest, property, claim  and  demand
of  every  nature  whatsoever  of  the  Company at law, in equity or
otherwise howsoever, in, of and to such property  and every part and
parcel thereof.

   TO  HAVE  AND  TO HOLD all of said property, real,  personal  and
mixed, and all and  singular the lands, properties, estates, rights,
franchises, privileges and appurtenances hereby mortgaged, conveyed,
pledged or assigned,  or  intended  so  to be, together with all the
appurtenances thereto appertaining and the rents, issues and profits
thereof, unto the Trustee and its successors and assigns, forever:

   SUBJECT, HOWEVER, to the exceptions, reservations,  restrictions,
conditions,  limitations,  covenants  and matters contained  in  all
deeds and other instruments whereunder  the Company has acquired any
of  the property now owned by it, and to permitted  encumbrances  as
defined in Subsection B of Section 1.11 of the Original Indenture;

   BUT  IN  TRUST NEVERTHELESS, for the equal and proportionate use,
benefit, security  and  protection  of  those  who from time to time
shall hold the Bonds and coupons authenticated and  delivered  under
the  Original  Indenture  and the forty-five supplemental indentures
hereinbefore  described or this  Supplemental  Indenture,  and  duly
issued by the Company,  without  any  discrimination,  preference or
priority  of  any  one  bond  or coupon over any other by reason  of
priority  in  the time of issue,  sale  or  negotiation  thereof  or
otherwise, except  as  provided  in  Section  11.28  of the Original
Indenture, so that, subject to said Section 11.28, each  and  all of
said Bonds and coupons shall have the same right, lien and privilege
under   the  Original  Indenture  and  the  forty-five  supplemental
indentures  hereinbefore  described, or this Supplemental Indenture,
and shall be equally secured  thereby  and hereby and shall have the
same proportionate interest and share in  the trust estate, with the
same effect as if all of the Bonds and coupons had been issued, sold
and  negotiated  simultaneously  on  the  date of  delivery  of  the
Original Indenture;

   AND  UPON  THE  TRUSTS,  USES  AND PURPOSES and  subject  to  the
covenants, agreements and conditions  in  the Original Indenture and
the  forty-five supplemental indentures hereinbefore  described  and
herein set forth and declared.

                                
<PAGE>

                                  15
                                    

                             ARTICLE ONE.

              BONDS OF THE MEDIUM TERM NOTE SERIES V AND
                 CERTAIN PROVISIONS RELATING THERETO.

   SECTION   1.01.   CERTAIN  TERMS OF BONDS OF THE MEDIUM TERM NOTE
SERIES V.  The aggregate principal amount of the Bonds of the Medium
Term  Note  Series  V shall be limited  to  $50,000,000,  excluding,
however, any Bonds of  the  Medium  Term  Note Series V which may be
executed, authenticated and delivered in exchange  for or in lieu of
or  in substitution for other Bonds of such Series pursuant  to  the
provisions  of  the  Original  Indenture  or  of  this  Supplemental
Indenture.

   The  definitive Bonds of the Medium Term Note Series V  shall  be
issuable  only  in  fully  registered  form  without  coupons in the
denomination of $100,000, or any amount in excess thereof  that is a
multiple of  $1,000.  Notwithstanding the provisions of Section 2.05
of the Original Indenture, each Bond of the Medium Term Note  Series
V  shall  be  dated  as of the date of its authentication, and shall
mature on such date not  less  than nine months nor more than thirty
years from such date, shall bear interest from such date, shall bear
interest at such rate or rates,  which may be fixed or variable, and
have  such  other terms and conditions  not  inconsistent  with  the
Original Indenture  as the Board of Directors of the Company, or any
officer of the Company  acting  pursuant to authority granted by the
Board of Directors may determine  (the  execution of any bond of the
Medium Term Note Series V by any authorized  officer  of the Company
being,  with regard to any holder of such bond, conclusive  evidence
of such approval).  Interest on Bonds of the Medium Term Note Series
V shall be  payable  on  the  dates established on the date of first
authentication of such Bond ("Original  Issue Date").  The person in
whose name any Bond of the Medium Term Note  Series  V is registered
at the close of business on the applicable record date  with respect
to  any  interest  payment  date  shall  be entitled to receive  the
interest   payable   thereon   on   such   interest   payment   date
notwithstanding the cancellation of such Bond  upon  any transfer or
exchange  thereof subsequent to such record date and prior  to  such
interest payment  date,  unless  the  Company  shall  default in the
payment of the interest due on such interest payment date,  in which
case  such  defaulted  interest shall be paid to the person in whose
name such Bond is registered  on  a  subsequent record date fixed by
the Company, which subsequent record date shall be fifteen (15) days
prior  to  the payment of such defaulted  interest.   Such  interest
payments shall be made in such manner and in such places as provided
on the Form  of  Bonds of the Medium Term Note Series V set forth in
this Supplemental  Indenture.   The  principal  of  the Bonds 

                                
<PAGE>

                                  16

of the
Medium Term Note Series V shall be payable in any coin  or  currency
of  the  United  States  of America which at the time of payment  is
legal tender for the payment  of  public  and  private  debts at the
office  or  agency of the Company in the Borough of Manhattan,  City
and State of  New  York,  and  interest and premium, if any, on such
Bonds shall be payable in like coin  or  currency  at said office or
agency.

   The  definitive  Bonds of the Medium Term Note Series  V  may  be
issued in the form of  Bonds,  engraved,  printed or lithographed on
steel engraved borders.

   Upon  compliance  with  the  provisions of Section  2.06  of  the
Original Indenture and as provided  in  this Supplemental Indenture,
and upon payment of any taxes or other governmental  charges payable
upon such exchange, Bonds of the Medium Term Note Series  V  may  be
exchanged   for   a  new  Bond  or  Bonds  of  different  authorized
denominations of like aggregate principal amount.

   The Trustee hereunder  shall,  by  virtue  of  its office as such
Trustee, be the registrar and transfer agent of the  Company for the
purpose  of  registering  and transferring Bonds of the Medium  Term
Note Series V.

   Notwithstanding the provisions  of  Section  2.11 of the Original
Indenture,  no  service  charge  shall be made for any  exchange  or
transfer of Bonds of the Medium Term  Note Series V, but the Company
at its option may require payment of a  sum  sufficient to cover any
tax or other governmental charge incident thereto.

   SECTION 1.02.  REDEMPTION PROVISIONS FOR BONDS OF THE MEDIUM TERM
NOTE SERIES V.  The Bonds of the Medium Term Note  Series V shall be
subject to redemption prior to maturity as a whole at any time or in
part from time to time as the Board of Directors of  the Company, or
any officer of the Company acting pursuant to authority  granted  by
the  Board  of Directors may determine, and as set forth on the Form
of Bonds of the  Medium  Term  Note  Series  V  set  forth  in  this
Supplemental Indenture.

   The  Bonds  of the Medium Term Note Series V which are redeemable
on the payment of a Regular Redemption Price as provided for in this
Section 1.02 may  be  redeemed  at  such  Regular  Redemption  Price
through  the application of cash deposited with the Trustee pursuant
to Section  6.04 of the Original Indenture upon the taking, purchase
or sale of any property subject to the lien hereof or thereof in the
manner set forth in said Section.

                                
<PAGE>

                                  17

   The Bonds  of  the  Medium Term Note Series V are also subject to
redemption  through the application  of  proceeds  of  the  sale  or
disposition substantially  as  an entirety of the Company's electric
properties at Portland, Oregon,  which  proceeds are required by the
provisions of Section 7.01 of the Original  Indenture  to be applied
to  the  retirement  of Bonds, upon payment of the principal  amount
thereof together with  interest  thereon  payable  to  the  date  of
redemption.

   SECTION  1.03.  Notwithstanding the provisions of Section 4.07 of
the Original  Indenture,  the provisions of Sections 4.04, 4.05, and
4.06 of the Original Indenture shall remain in full force and effect
and shall be performed by the  Company  so  long as any Bonds of the
Medium  Term Note Series V remain outstanding.   The  Bonds  of  the
Medium Term  Note  Series V which are redeemable on the payment of a
Regular Redemption Price  as  provided  for  in Section 1.02 of this
Supplemental  Indenture may be redeemed at such  Regular  Redemption
Price with moneys  remaining in the replacement fund provided for in
said Section 4.04 of the Original Indenture.

   SECTION 1.04.  The  requirements  which are stated in the next to
the last paragraph of Section 1.13 and  in Clause (9) of Paragraph A
of Section 3.01 of the Original Indenture  to  be applicable so long
as any of the Bonds of the 1975 Series are outstanding  shall remain
applicable  so  long  as  any  of the Bonds of the Medium Term  Note
Series V are outstanding.

   SECTION 1.05.  Notwithstanding  the provisions of Section 2.06 or
Section 2.10 of the Original Indenture,  the  Company  shall  not be
required  (i)  to  issue,  register,  discharge  from  registration,
exchange or transfer any Bond of the Medium Term Note Series V for a
period  of  fifteen  (15) days next preceding any selection  by  the
Trustee of Bonds of the  Medium Term Note Series V to be redeemed or
(ii) to register, discharge  from registration, exchange or transfer
any Bond of the Medium Term Note Series V so selected for redemption
in its entirety or (iii) to exchange  or  transfer  any portion of a
Bond  of  the  Medium Term Note Series V which portion has  been  so
selected for redemption.

   SECTION 1.06.   So  long  as  any  Bonds  of the Medium Term Note
Series V remain outstanding, all references to the minimum provision
for depreciation in the form of certificate of  available  additions
set  forth  in  Section  3.03  of  the  Original  Indenture shall be
included in any certificate of available additions  filed  with  the
Trustee,  but  whenever Bonds of the Medium Term Note Series V shall
no longer be outstanding,  all references to such minimum provisions
for depreciation may be omitted from any such certificate.

                                 
<PAGE>

                                   18

   SECTION 1.07.  I.  Each holder  of  any  Bond  of the Medium Term
Note Series V by acceptance of such Bond shall thereby consent that,
at any time after the requisite consents, if any, of  the holders of
Bonds of other series shall have been given as hereinafter provided,
Subsections  A  and  G of Section 1.10 of the Original Indenture  be
amended so as to read as follows:

   "A.  The term 'bondable  public  utility property' shall mean and
comprise any tangible property now owned  or  hereafter  acquired by
the  Company  and subjected to the lien of this Indenture, which  is
located in the  States  of  Oregon, Washington, California, Arizona,
New Mexico, Idaho, Montana, Wyoming,  Utah and Nevada and is used or
is  useful  to  it  in  the business of furnishing  or  distributing
electricity for heat, light  or power or other use, or supplying hot
water  or  steam for heat or power  or  steam  for  other  purposes,
including, without  limiting  the  generality  of the foregoing, all
properties  necessary  or  appropriate  for purchasing,  generating,
manufacturing,  producing,  transmitting,  supplying,   distributing
and/or  disposing  of  electricity,  hot  water  or steam; PROVIDED,
HOWEVER, that the term 'bondable public utility property'  shall not
be  deemed  to  include  any  nonbondable  property,  as  defined in
Subsection B of this Section 1.10, or any excepted property."

   "G.  The term 'minimum provision for depreciation' for the period
from  March  31,  1945  through  December  31,  1966,  as applied to
bondable public utility property, whether or not subject  to a prior
lien, shall mean $35,023,487.50.

   "The  term  'minimum provision for depreciation' for any calendar
year subsequent  to December 31, 1966, as applied to bondable public
utility property,  shall  mean the greater of (i) an amount equal to
2% of depreciable bondable  public utility property, as shown by the
books of the Company as of January  1  of such year, with respect to
which the Company was as of that date required,  in  accordance with
sound  accounting practice, to make appropriations to a  reserve  or
reserves  for  depreciation  or  obsolescence,  or  (ii)  the amount
actually  appropriated by the Company on its books of account  to  a
reserve or  reserves  for depreciation or obsolescence in respect of
depreciable bondable public utility property for such calendar year,
in either case less an  amount  equal  to  the  aggregate of (a) the
amount  of  any property additions which during such  calendar  year
were included  in an officers' certificate filed with the Trustee as
the basis for a  sinking fund credit pursuant to the provisions of a
sinking fund for Bonds  of  any  series,  and  (b)  166 2/3% of the
principal  amount  of  Bonds  of  any  series which shall have  been
delivered to the Trustee as a credit, or  which  the  Company  shall
have  elected to apply as a credit, against any sinking fund payment
due during  such  calendar  year  for  Bonds of any series, or which
shall have been 

                                
<PAGE>

                                  19

redeemed in anticipation  of,  or out of moneys paid
to  the Trustee on account of, any sinking fund payment  due  during
such  calendar year for Bonds of any series.  Bonds delivered to the
Trustee as, or applied as, a credit against any sinking fund payment
and Bonds  redeemed  in  anticipation  of  any sinking fund payment,
regardless of the time when they were actually delivered, applied or
redeemed, for purposes of the preceding sentence  shall be deemed to
have been delivered, applied or redeemed, as the case may be, on the
sinking  fund payment date when such sinking fund payment  was  due.
Bonds redeemed  out  of moneys paid to the Trustee on account of any
sinking fund payment shall,  regardless  of  the date when they were
redeemed, for purposes of the second preceding  sentence,  be deemed
to  have  been  redeemed on the later of (i) the date on which  such
moneys were paid  to  the  Trustee  or (ii) the sinking fund payment
date when such sinking fund payment was due.

   "The minimum provision for depreciation  for  any  calendar  year
subsequent  to  December  31,  1966,  as  applied to bondable public
utility property not subject to a prior lien, shall be determined as
set forth in the paragraph immediately preceding,  except  that  all
references therein to 'depreciable bondable public utility property'
shall  be deemed to be 'depreciable bondable public utility property
not subject to a prior lien'.

   "The  minimum  provision  for depreciation as applied to bondable
public utility property and the  minimum  provision for depreciation
as  applied to bondable public utility property  not  subject  to  a
prior lien for any period commencing subsequent to December 31, 1966
which is of twelve whole calendar months' duration but is other than
a calendar  year  or  which  is  of  less than twelve whole calendar
months' duration shall be determined by  multiplying  the  number of
whole   calendar  months  in  such  period  by  one-twelfth  of  the
corresponding minimum provision for depreciation for the most recent
calendar  year  completed  prior  to  the  end  of  such period, and
fractions of a calendar month shall be disregarded.

   "The  aggregate amount of the minimum provision for  depreciation
as applied  to  bondable  public  utility property and the aggregate
amount  of  the minimum provision for  depreciation  as  applied  to
bondable public  utility  property  not subject to a prior lien from
March 31, 1945 to any date shall be the  sum  of  the  corresponding
minimum provision for depreciation for each completed calendar  year
between  December  31,  1966  and  such date, plus the corresponding
minimum provision for depreciation for  the period, if any, from the
end of the most recent such completed calendar year to such date, in
each case determined as set forth above, plus $35,023,487.50.

   "All  Bonds  credited  against  any  sinking   fund  payment  due
subsequent to 

                                 
<PAGE>

                                   20

December 31, 1966 for Bonds of any series  and (except
as  provided  in  Section  9.04  with  respect  to Bonds on which  a
notation  of  partial payment shall be made) all Bonds  redeemed  in
anticipation of  or  out  of moneys paid to the Trustee as a part of
any sinking fund payment due  subsequent  to  December  31, 1966 for
Bonds  of any series, shall be canceled and no such Bonds,  nor  any
property  additions  which,  subsequent  to December 31, 1966, shall
have  been  included  in  an officers' certificate  filed  with  the
Trustee as the basis for a  sinking  fund  credit  pursuant  to  the
provisions  of a sinking fund for Bonds of any series, shall be made
the basis of  the  authentication  and  delivery  of Bonds or of any
other further action or credit hereunder."

  II. Each holder of any Bond of the Medium Term Note  Series  V, by
acceptance  of  such  Bond  shall  thereby consent that, at any time
after the requisite consents, if any,  of  the  holders  of Bonds of
other series shall have been given as hereinafter provided:

    (1)  Subsection A of Section 1.10 of the Original Indenture,  as
    the same  may  be  amended  as  hereinabove in this Section 1.07
    provided, be further amended by replacing the word "and" between
    the words "Utah" and "Nevada" with  a  comma and by adding after
    the word "Nevada" the words "and Alaska";

    (2) Subsection G of Section 1.10 of the  Original  Indenture, as
    the  same  may  be  amended as hereinabove in this Section  1.07
    provided, be further  amended  by  amending the second paragraph
    thereof to read as follows:

       "The  term  'minimum  provision  for  depreciation'  for  any
    calendar year subsequent to December  31,  1966,  as  applied to
    bondable public utility property, shall mean the greater  of (i)
    an  amount  equal  to  2% of depreciable bondable public utility
    property, as shown by the  books  of the Company as of January 1
    of such year, with respect to which  the  Company was as of that
    date required, in accordance with sound accounting  practice, to
    make appropriations to a reserve or reserves for depreciation or
    obsolescence,  or (ii) the amount actually appropriated  by  the
    Company on its books  of  account  to  a reserve or reserves for
    depreciation or obsolescence in respect  of depreciable bondable
    public utility property for such calendar  year,  in either case
    less an amount equal to the aggregate of (a) the amount  of  any
    property additions which during such calendar year were included
    in  an officers' certificate filed with the Trustee as the basis
    for a  sinking  fund  credit  pursuant  to  the  provisions of a
    sinking fund for Bonds of any series and which as  a  result  of
    having  been  so  included have been 
                                
                                 
<PAGE>    

                                   21
    
    deemed, either without time
    limit  or  only  so  long  as  any  Bonds  of  such  series  are
    outstanding, to have been  'included in an officers' certificate
    filed with the Trustee as the  basis  for a sinking fund credit'
    and to have been 'made the basis for action or credit hereunder'
    as such term is defined in Subsection H  of  Section 1.10 of the
    Original Indenture, and (b) 166 2/3% of the principal amount of
    Bonds  of  any  series  which shall have been delivered  to  the
    Trustee as a credit, or which  the Company shall have elected to
    apply as a credit, against any sinking  fund  payment due during
    such calendar year for Bonds of any series, or  which shall have
    been redeemed in anticipation of, or out of moneys  paid  to the
    Trustee on account of, any sinking fund payment due during  such
    calendar  year  for Bonds of any series and which as a result of
    having been so made  the  basis  of a credit upon a sinking fund
    payment and/or so redeemed by operation  of a sinking fund shall
    have been disqualified, either without time  limit  or  only  so
    long  as  any  Bonds  of such series are outstanding, from being
    made the basis of the authentication and delivery of Bonds or of
    any other further action  or credit under the Original Indenture
    or any supplemental indenture.   Bonds  delivered to the Trustee
    as, or applied as, a credit against any sinking fund payment and
    Bonds  redeemed  in  anticipation of any sinking  fund  payment,
    regardless  of  the time  when  they  were  actually  delivered,
    applied or redeemed,  for  purposes  of  the  preceding sentence
    shall be deemed to have been delivered, applied  or redeemed, as
    the  case  may  be, on the sinking fund payment date  when  such
    sinking fund payment was due.  Bonds redeemed out of moneys paid
    to the Trustee on  account  of  any  sinking fund payment shall,
    regardless of the date when they were  redeemed, for purposes of
    the second preceding sentence, be deemed  to  have been redeemed
    on the later of (i) the date on which such moneys  were  paid to
    the  Trustee  or  (ii)  the  sinking fund payment date when such
    sinking fund payment was due."

    (3) Subsection G of Section 1.10  of  the Original Indenture, as
    the  same may be amended as hereinabove  in  this  Section  1.07
    provided,  be further amended by deleting therefrom the last two
    paragraphs thereof and inserting therein a new last paragraph to
    read as follows:

       "The  aggregate   amount   of   the   minimum  provision  for
    depreciation as applied to bondable public  utility property and
    the aggregate amount of the minimum provision  for  depreciation
    as applied to bondable public utility property not subject  to a
    prior  lien  from March 31, 1945 to any date shall be the sum of
    the corresponding  minimum  provision  for depreciation for each
    completed calendar year between December 31, 1966 and such date,
    plus  (1) the corresponding 
    
                                 
<PAGE>    

                                   22
    
    minimum provision  for  depreciation
    for the  period,  if  any,  from the end of the most recent such
    completed calendar year to such date, in each case determined as
    set forth above, plus (2) $35,023,487.50,  plus  (3)  an  amount
    equal  to  the  aggregate  of  (a)  the  amount  of any property
    additions which, between December 31, 1966 and such date, became
    property additions of the character described in clause  (a)  of
    the second paragraph of this Subsection G and which, thereafter,
    also  between December 31, 1966 and such date, became 'available
    additions' as a result of the fact that all Bonds of such series
    ceased  to  be  outstanding,  and (b) 166 2/3% of the principal
    amount of Bonds of any series which,  between  December 31, 1966
    and such date, become Bonds of the character described in clause
    (b)  of  the  second paragraph of this Subsection G  and  which,
    thereafter, also between December 31, 1966 and such date, became
    'available Bond  retirements'  as  a result of the fact that all
    Bonds of such series ceased to be outstanding."

    III.  Each holder of any Bond of the  Medium Term Note Series V,
by acceptance of such Bond shall thereby consent  that,  at any time
after  the  requisite  consents, if any, of the holders of Bonds  of
other series shall have been given as hereinafter provided:

       (1) the subparagraph  numbered  (3) of the third paragraph of
    Section 1.03 of each of the Sixteenth and the Eighteenth through
    the Twenty-first Supplemental Indentures and the third paragraph
    of Section 1.03 of the Twenty-second  Supplemental  Indenture be
    amended  by inserting before the words "any available  additions
    thus shown  as  a credit" the phrase "provided, however, that so
    long as any Bonds of the ___________ Series are outstanding" and
    inserting in the  blank  space  of  such  phrase  the applicable
    designation of the series of Bonds created by such  supplemental
    indenture;

       (2)(i)   the  fifth  paragraph  of Section 1.03 of the  Ninth
    through the Sixteenth Supplemental Indentures and the Eighteenth
    through the Twenty-second Supplemental  Indentures, which begins
    with the words "All Bonds made the basis  of  a  credit upon any
    sinking  fund  payment  for  Bonds",  (ii) Section 1.03  of  the
    Seventeenth,   Twenty-third   and   Twenty-fourth   Supplemental
    Indentures, (iii) the last sentence of  the  fourth paragraph of
    Section  1.03  of  the  First, Third, Fifth, Sixth  and  Seventh
    Supplemental Indentures,  which begins with the words "All Bonds
    delivered to the Trustee as part of or to anticipate any sinking
    fund payment" and (iv) the last sentence of the fourth paragraph
    of Section 4.03 of the Original Indenture, which begins with the
    words 
    
                                 
<PAGE>

                                   23

    "All Bonds delivered  to  the  Trustee  as  part  of or to
    anticipate any sinking fund payment", each be amended so  as  to
    read as follows:

       "All  Bonds  made the basis of a credit upon any sinking fund
    payment,  and/or (except  with  respect  to  Bonds  on  which  a
    notation of  partial  payment  shall be made as permitted by any
    provision  of  the  Original  Indenture,   of  any  supplemental
    indenture or of any agreement entered into as  permitted  by the
    Original  Indenture  or  by any supplemental indenture) redeemed
    (whether on any sinking fund  payment date or in anticipation of
    any such sinking fund payment) by operation of the sinking fund,
    for Bonds of the 1975 Series, or  for  Bonds of the 1977 Series,
    or for Bonds of the 1977 Second Series, or for Bonds of the 1984
    Series, or for Bonds of the 1986 Series,  or  for  Bonds  of the
    4 7/8% Series due 1987, or for Bonds of the 1990 Series, or for
    Bonds of the 1991 Series, or for Bonds of the 4 5/8% Series due
    1993,  or for Bonds of the 4 3/4% Series due 1993, or for Bonds
    of the 1994  Series,  or  for  Bonds  of the 1995 Series, or for
    Bonds of the 1996 Series, or for Bonds  of  the  1997 Series, or
    for Bonds of the 2000 Series, or for Bonds of the  2001  Series,
    or  for  Bonds  of  the  2002  Series,  or for Bonds of the 2003
    Series,  or  for  Bonds  of  the  2003  Second  Series   if  not
    theretofore  canceled shall be canceled and, except as otherwise
    provided in the  supplemental  indenture creating such series of
    Bonds,  or  in  another  supplemental  indenture  amending  such
    supplemental indenture, so  long as any Bonds of such series are
    outstanding  shall not (but without  limiting  the  use  of  the
    principal amount  thereof  in  calculating any minimum provision
    for depreciation pursuant to the  provisions  of Subsection G of
    Section  1.10  of  the  Original  Indenture as the same  may  be
    amended in accordance with the provisions  of  any  supplemental
    indenture) be made the basis of the authentication and  delivery
    of  Bonds  or of any further action or credit under the Original
    Indenture or any supplemental indenture.

  "To the extent that

    (a) in any given  year  the  principal  amount  of Bonds made the
        basis  of  a  credit  upon  any sinking fund payment,  and/or
        redeemed  (whether  on a sinking  fund  payment  date  or  in
        anticipation of a sinking  fund  payment) by operation of the
        sinking fund, for Bonds of the 1975  Series,  or for Bonds of
        the 1977 Series, or for Bonds of the 1977 Second  Series,  or
        for  Bonds  of  the  1984  Series,  or  for Bonds of the 1986
        Series, or for Bonds of the 4 7/8% Series  due  1987, or for
        Bonds of the 1990 Series, or for Bonds of the 1991 Series, or
        for Bonds of the 4 5/8% Series due 1993, or for Bonds 
       
                                 
<PAGE>       

                                   24
       
        of the
        4 3/4% Series due 1993, or for Bonds of the 1994  Series, or
        for Bonds of the 1995 Series or for Bonds of the 1996 Series,

  does not exceed

    (b) an  amount  equal  to  1% of the greatest aggregate principal
        amount of Bonds of such  Series  theretofore  at any one time
        outstanding,  after  deducting from said aggregate  principal
        amount the sum of the  following  amounts,  in the event that
        such  sum  would  equal  $500,000  or more, namely,  (1)  the
        aggregate   principal  amount  of  Bonds   of   such   Series
        theretofore redeemed  by  the  application of the proceeds of
        property released from the lien  of the Original Indenture or
        taken or purchased pursuant to the  provisions of Article Six
        of  the Original Indenture, and (2) the  aggregate  principal
        amount  of  Bonds  of  such  Series  theretofore redeemed and
        retired  and  made  the  basis  for  the withdrawal  of  such
        proceeds pursuant to Section 7.03 of the  Original  Indenture
        or  certified  pursuant  to  Section  6.06  of  the  Original
        Indenture in lieu of the deposit of cash upon the release  or
        taking of property; and

  to the extent that

    (c) in  any  given  year  the  principal amount of Bonds made the
        basis  of  a  credit upon any sinking  fund  payment,  and/or
        redeemed (whether  on  a  sinking  fund  payment  date  or in
        anticipation  of  a sinking fund payment) by operation of the
        sinking fund, for Bonds  of  the 1997 Series, or for Bonds of
        the 2000 Series, or for Bonds  of  the  2001  Series,  or for
        Bonds of the 2002 Series, or for Bonds of the 2003 Series, or
        for Bonds of the 2003 Second Series,

  does not exceed

    (d) an amount equal to (1) 1% of the greatest aggregate principal
        amount  of  Bonds  of such Series theretofore at any one time
        outstanding, after making  the deductions from said aggregate
        principal amount referred to in clause (b) of this paragraph,
        minus (2) 60% of the amount  of  available additions made the
        basis of a credit against such sinking fund payment,

  the principal amount of Bonds so made the basis of a credit upon a
  sinking  fund  payment  and/or so redeemed  by  operation  of  the
  sinking fund for Bonds of  such  Series  shall  not  (but  without
  limiting  the  use  of the principal amount thereof in calculating
  any minimum provision  for 
  
                                 
<PAGE>  

                                   25
  
  depreciation pursuant to the provisions
  of Subsection G of Section  1.10  of the Original Indenture as the
  same  may  be amended in accordance with  the  provisions  of  any
  supplemental  indenture)  be  made the basis of the authentication
  and delivery of Bonds or of any  other  further  action  or credit
  under the Original Indenture or any supplemental indenture; and

  to the extent that

    (e) in any given year the amount of available additions made  the
        basis  of a credit against any sinking fund payment for Bonds
        of the 1997  Series,  or for Bonds of the 2000 Series, or for
        Bonds of the 2001 Series, or for Bonds of the 2002 Series, or
        for Bonds of the 2003 Series, or for Bonds of the 2003 Second
        Series,

  does not exceed

    (f) an  amount equal to one  and  sixty-six  and  two-thirds  one
        hundredths  per  cent  (1.66 2/3 %) of the greatest aggregate
        principal amount of Bonds  of  such Series theretofore at any
        one time outstanding, after making  the  deductions from said
        aggregate principal amount referred to in  clause (b) of this
        paragraph,

  the amount of available additions so made the basis  of  a  credit
  against a sinking fund payment shall (but without limiting the use
  of  the  amount  thereof  in calculating any minimum provision for
  depreciation pursuant to the provisions of Subsection G of Section
  1.10 of the Original Indenture  as  the  same  may  be  amended in
  accordance  with the provisions of any supplemental indenture)  be
  deemed to have  been  'included  in an officers' certificate filed
  with the Trustee as the basis for  a  sinking  fund credit' and to
  have been 'made the basis for action or credit hereunder'  as such
  term  is  defined  in Subsection H of Section 1.10 of the Original
  Indenture.

    "From and after the  time  when  all  Bonds of any of the Series
  referred  to in (a) of the paragraph immediately  preceding  shall
  cease to be  outstanding, a principal amount of Bonds equal to the
  excess of

    (i) the aggregate  principal  amount of Bonds made the basis of a
        credit  upon all sinking fund  payments  and/or  redeemed  by
        operation of the sinking fund for Bonds of such Series as set
        forth in said (a) in all years, over

   (ii) the aggregate  amounts  set  forth  in  (b) of the paragraph

                                 
<PAGE>

                                   26

        immediately preceding with reference to Bonds  of such Series
        for all years,

  shall become 'available Bond retirements' as such term  is defined
  in Section 1.10.J. of the Original Indenture and may thereafter be
  included   in  Item  4  of  any  'certificate  of  available  Bond
  retirements' thereafter delivered to and/or filed with the Trustee
  pursuant to  Section  3.02 of the Original Indenture; and from and
  after the time when all  Bonds of any of the Series referred to in
  (c)  of the paragraph immediately  preceding  shall  cease  to  be
  outstanding, a principal amount of Bonds equal to the excess of

  (iii) the  aggregate principal amount of Bonds made the basis of a
        credit  upon  all  sinking  fund  payments and/or redeemed by
        operation of the sinking fund for Bonds of such Series as set
        forth in said (c) in all years, over

   (iv) the  aggregate amounts set forth in  (d)  of  the  paragraph
        immediately  preceding with reference to Bonds of such Series
        for all years,

  shall become 'available  Bond retirements' as such term is defined
  in Section 1.10.J. of the Original Indenture and may thereafter be
  included  in  Item  4  of  any   'certificate  of  available  Bond
  retirements' thereafter delivered to and/or filed with the Trustee
  pursuant to Section 3.02 of the Original  Indenture, and an amount
  of available additions equal to the excess of

    (v) the amount of available additions made  the basis of a credit
        against all sinking fund payments for Bonds of such Series as
        set  forth in (e) of the paragraph immediately  preceding  in
        all years, over

   (vi) the aggregate  amounts  set  forth  in  (f)  of the paragraph
        immediately preceding with reference to Bonds  of such Series
        for all years,

   shall  become  'available  additions' as such term is defined  in
   Section 1.10.I. of the Original  Indenture  and may thereafter be
   included  in  Item 5 of any 'certificate of available  additions'
   thereafter filed with the Trustee pursuant to Section 3.01 of the
   Original Indenture.";

     (3) subsection  H  of Section 1.10 of the Original Indenture be

                                 
<PAGE>

                                   27

   amended by inserting before  the  semicolon preceding clause (ii)
   thereof, and as a part of clause (1)  thereof,  the words "if, to
   the extent that, and so long as, the provisions of this Indenture
   or any supplemental indentures creating or providing for any such
   fund  or  any  supplemental  indentures  amending the  provisions
   creating or providing for any such fund shall preclude the use of
   property additions so included in an officers' certificate as the
   basis for further action or credit hereunder";  Subsection  I  of
   Section 1.10 of the Original Indenture be amended by changing the
   reference  therein from "Item 5" to "Item 7"; and Subsection J of
   Section 1.10 of the Original Indenture be amended by changing the
   reference therein from "Item 4" to "Item 5";

     (4) paragraph  (3) of Section 3.01(A) of the Original Indenture
   be amended by changing  the  period at the end thereof to a comma
   and adding the following words  thereto:  "except  to  the extent
   otherwise  provided  in  this  Indenture  or  in any supplemental
   indenture";

     (5) the Certificate of Available Additions set forth in Section
   3.03.A. of the Original Indenture be amended by

        (i) adding  new  paragraphs (5) and (6) thereto  immediately
            preceding existing paragraph (5) thereof, as follows:

           "(5) The aggregate  amount, if any, of available additions
                included  in Item  4  above  which  were  so  included
                because the  same were made the basis of a credit upon
                any sinking fund  payment  for Bonds of any series and
                which  have  subsequently  again   become   'available
                additions'  as a result of the fact that all Bonds  of
                such   series   ceased    to    be   outstanding,   is
                $_________________

           "(6) The   aggregate   amount   of   available   additions
                heretofore made the basis for action  or  credit under
                said   Indenture   of  Mortgage  and  which  have  not
                subsequently again become 'available additions' as set
                forth in Item 5 above,  namely Item 4 above minus Item
                5 above is $_______________

         (ii) renumbering existing paragraph (5) as paragraph (7) and
              changing the references in renumbered  paragraph (7) from
              "Item 3 above minus Item 4 above" to "Item  3 above minus
              Item 6 above",

                                   
<PAGE>

                                     28

        (iii) renumbering   existing  paragraphs  (6)  and  (7)   as
              paragraphs (8) and  (9)  and  changing the references in
              renumbered paragraph (9) from "Item 5 above minus Item 6
              above" to "Item 7 above minus Item 8 above", and

         (iv) deleting  "Item  7 above" in the  second  line  of  the
              paragraph immediately  succeeding  renumbered  paragraph
              (9) and substituting "Item 9 above" therefor; and

     (6) the Certificate of Available Bond Retirements set forth  in
     Section 3.03.B. of the Original Indenture be amended by

          (i) adding a new paragraph (4) thereto immediately preceding
              the existing paragraph (4) thereof, as follows:

            "(4) The  aggregate  amount,  if any, of Bonds previously
                 made  the basis of a credit  upon  any  sinking  fund
                 payment  for  Bonds  of  any  series, and/or redeemed
                 (whether  on  a  sinking  fund  payment  date  or  in
                 anticipation of sinking fund payment) by operation of
                 the sinking fund for Bonds of such series, which have
                 subsequently become 'available Bond retirements' as a
                 result  of  the fact that all Bonds  of  such  series
                 ceased to be outstanding is $___________"

         (ii) renumbering the existing paragraph (4) as paragraph (5)
              and revising the  same to read as follows: "The amount of
              presently available  Bond  retirements, namely the sum of
              Items (1), (2), (3) and (4) above, is $___________"

        (iii) renumbering the existing paragraphs (5) and (6) as (6)
              and (7), respectively, and  changing  the  reference  in
              renumbered  paragraph  (7) from "Item 4 minus Item 5" to
              "Item 5 minus Item 6".

   IV.  The amendments of Subsections A, G, H, I and/or J of Section
1.10 of the Original Indenture, of Sections  3.01,  3.03 and/or 4.03
of  the  Original  Indenture  and/or  of Section 1.03 of the  First,
Third,  Fifth,  Sixth,  Seventh  and  Ninth   through  Twenty-fourth
Supplemental  Indentures  set  forth  above shall,  subject  to  the
Company  and  the  Trustee, in accordance  with  the  provisions  of
Section 17.02 of the  Original Indenture, entering into an indenture
or indentures supplemental to the Original Indenture for the purpose
of so amending said Subsections  A, G, H, I and/or J, Sections 3.01,

                                 
<PAGE>

                                   29

3.03 and/or 4.03 and/or Section 1.03,  become effective at such time
as  the holders of not less than 75% in principal  amount  of  Bonds
then   outstanding   or  their  attorneys-in-fact  duly  authorized,
including the holders  of  not  less than 60% in principal amount of
the Bonds then outstanding of each  series the rights of the holders
of which are affected by such amendment,  shall  have  consented  to
such  amendment.  No further vote or consent of the holders of Bonds
of the  Medium  Term  Note Series V shall be required to permit such
amendments  to  become effective  and  in  determining  whether  the
holders  of  not  less   than  75%  in  principal  amount  of  Bonds
outstanding  at  the  time such  amendments  become  effective  have
consented thereto, the  holders of all Bonds of the Medium Term Note
Series V then outstanding shall be deemed to have so consented.

   SECTION 1.08.  This Article  shall be of force and effect only so
long as any Bonds of the Medium Term Note Series V are outstanding.

                              ARTICLE TWO.

                                TRUSTEE.

   SECTION  2.01.   The  Trustee hereby  accepts  the  trust  hereby
created.  The Trustee undertakes,  prior  to  the  occurrence  of an
event of default and after the curing of all events of default which
may  have  occurred,  to perform such duties and only such duties as
are specifically set forth  in  the Original Indenture as heretofore
and hereby supplemented and modified,  on  and  subject to the terms
and   conditions  set  forth  in  the  Original  Indenture   as   so
supplemented and modified, and in case of the occurrence of an event
of default (which has not been cured) to exercise such of the rights
and powers vested in it by the Original Indenture as so supplemented
and modified,  and to use the same degree of care and skill in their
exercise,  as  a  prudent  man  would  exercise  or  use  under  the
circumstances in the conduct of his own affairs.

   The Trustee shall not be responsible in any manner whatsoever for
or in respect of the  validity  or  sufficiency of this Supplemental
Indenture or the Bonds issued hereunder or the due execution thereof
by the Company.  The Trustee shall be  under  no  obligation or duty
with  respect  to  the  filing, registration, or recording  of  this
Supplemental  Indenture  or   the   re-filing,  re-registration,  or
re-recording thereof.  The recitals of  fact  contained herein or in
the  Bonds  (other  than  the Trustee's authentication  certificate)
shall be taken as the statements  solely  of  the  Company,  and the
Trustee assumes no responsibility for the correctness thereof.

                                 
<PAGE>

                                   30

                             ARTICLE THREE.

                       MISCELLANEOUS PROVISIONS.

   SECTION   3.01.    Although   this  Supplemental  Indenture,  for
convenience and for the purpose of  reference,  is  dated  August 1,
1996, the actual date of execution by the Company and by the Trustee
is as indicated by their respective acknowledgments hereto annexed.

   SECTION 3.02.  This Supplemental Indenture is executed and  shall
be  construed as an indenture supplemental to the Original Indenture
as heretofore  supplemented  and  modified,  and as supplemented and
modified  hereby, the Original Indenture as heretofore  supplemented
and modified  is  in  all  respects  ratified and confirmed, and the
Original  Indenture  as  heretofore  and  hereby   supplemented  and
modified  shall  be  read, taken and construed as one and  the  same
instrument.  All terms  used in this Supplemental Indenture shall be
taken to have the same meaning  as  in the Original Indenture except
in cases where the context clearly indicates otherwise.

   SECTION  3.03.   In  case  any  one or  more  of  the  provisions
contained in this Supplemental Indenture  or in the Bonds or coupons
shall for any reason be held to be invalid, illegal or unenforceable
in  any  respect,  such invalidity, illegality  or  unenforceability
shall  not  affect  any   other   provisions  of  this  Supplemental
Indenture, but this Supplemental Indenture  shall be construed as if
such invalid or illegal or unenforceable provision  had  never  been
contained herein.

   SECTION 3.04.  This Supplemental Indenture may be executed in any
number  of counterparts, and each of such counterparts shall for all
purposes  be deemed to be an original, and all such counterparts, or
as many of  them  as  the  Company  and  the  Trustee shall preserve
undestroyed,  shall  together  constitute  but  one   and  the  same
instrument.

   IN WITNESS WHEREOF, Portland General Electric Company  has caused
this  Supplemental  Indenture to be signed in its corporate name  by
its President or one  of  its  Senior  Vice Presidents or one of its
Vice Presidents and its corporate seal to  be  hereunto  affixed and
attested  by its Secretary or one of its Assistant Secretaries,  and
in token of  its  acceptance of the trusts created hereunder, Marine
Midland Bank (formerly The Marine Midland Trust Company of New York)
has caused this Supplemental Indenture to be signed in its corporate
name by one of its  Vice  Presidents  or  one  of its Assistant Vice
Presidents or one of its Corporate Trust Officers  and its 

                                 
<PAGE>

                                   31

corporate
seal  to  be  hereunto affixed and attested by one of its  Corporate
Trust Officers, all as of the day and year first above written.


                         PORTLAND GENERAL ELECTRIC
                         COMPANY

                         By:__________________________
                         Title:  SENIOR VICE PRESIDENT
Attest:

___________________________

Title:  ASSISTANT SECRETARY

                                                               (Seal)

                         MARINE MIDLAND BANK

                         By: _________________________

                         Title: ______________________

Attest:

___________________________

Title: ____________________
                                                               (Seal)


                                  
<PAGE>

                                    32

State of Oregon
                    } ss.:
County of Multnomah

   The  foregoing  instrument  was  acknowledged  before  me on this ____
day  of August, 1996 by Joseph M. Hirko, a Senior Vice President  of
PORTLAND  GENERAL ELECTRIC COMPANY, an Oregon corporation, on behalf
of said corporation.

                       _____________________________________________
                       Notary Public for Oregon
                       My Commission Expires _______________________

[NOTARIAL SEAL]

                                   
<PAGE>

                                     33

State of New York
                  } ss.:
County of _______

   The foregoing  instrument  was  acknowledged before me on this ____ day 
of August, 1996 by _____________________________, a(an) ____________________
of MARINE MIDLAND BANK, a New York banking corporation and trust company, on 
behalf of said corporation.


                       ____________________________________
                       Notary Public, State of New York
                       No. ________________________________
                       Commission Expires _________________

[NOTARIAL SEAL]

                                    
<PAGE>

                                      34

State of Oregon
                    } ss.:
County of Multnomah

     Joseph M. Hirko and Steven F. McCarrel, a Senior Vice President
and Assistant Secretary, respectively,  of PORTLAND GENERAL ELECTRIC
COMPANY,  an  Oregon  corporation, the mortgagor  in  the  foregoing
mortgage named, being first  duly sworn, on oath depose and say that
they are the officers above named  of said corporation and that this
affidavit is made for and on its behalf by authority of its Board of
Directors and that the aforesaid mortgage  is made by said mortgagor
in good faith, and without any design to hinder,  delay  or  defraud
creditors.

Subscribed and sworn to before me this ____ day of August, 1996.



                       ______________________________________
                       Notary Public for Oregon
                       My Commission Expires ________________

[NOTARIAL SEAL]




















                                            SS 6726

                                 
<PAGE>




                         PORTLAND GENERAL CORPORATION

                 OUTSIDE DIRECTORS' DEFERRED COMPENSATION PLAN

                               1996 RESTATEMENT

                                AMENDMENT NO. 2




     This Amendment No. 2 to the Portland General Corporation Outside
Directors' Deferred Compensation Plan, as restated effective January 1, 1996
(the "Plan") is effective as of November 4, 1996 and has been executed as of
the 6th day of November 1996 on behalf of Portland General Corporation (the
"Company").

     WHEREAS, pursuant to Section 10.1, the Human Resources Committee of the
Company's Board of Directors (the "Committee") has the authority to amend the
Plan; and

     WHEREAS, the Committee wishes to allow Participants who serve on the
Boards of companies affiliated with the Company or joint venture partners of
the Company to maintain their accounts with the Company until they no longer
serve on the Board of an affiliated company;

     NOW, THEREFORE, the Plan is hereby amended as follows:

     FIRST:  Section 3.1 is amended in its entirety to read as follows:

         (a) ELIGIBILITY.  An Outside Director shall be eligible to participate
     by making Deferral Elections under paragraph 3.2 below. The Senior
     Administrative Officer shall notify eligible Outside Directors about the
     Plan and the benefits provided under it.

         (b) CESSATION OF
 ELIGIBILITY.  An Eligible Outside Director who ceases
     to serve on a Board of a Participating Company shall cease participating
     as to new deferrals immediately.

     SECOND:  Section 5.1(a) is amended in its entirety to read as follows:

         (a) ENTITLEMENT TO BENEFITS AT TERMINATION.  Benefits under this Plan
     shall be payable to a Participant on termination of membership on all
     Boards of Participating Companies. The amount of the benefit shall be the
     balance of the Participant's Account including Interest to the date of
     payment, in the form elected under Paragraph 5.3 below.

         Notwithstanding the above, if a Participant terminates Board
     membership with a Participating Company but, within sixty (60) days
     thereafter, becomes a Board member of an affiliate of the Company or
     Portland General Electric Company, including subsidiaries and joint
     venture partners, the status of which shall be determined at the
     discretion of the Senior Administrative Officer, the Participating Company
     shall continue to maintain the Participant's Account pursuant to Section
     IV. Benefits shall be payable to such Participant under this paragraph or
     Paragraph 5.1(b) below when the Participant is no longer a member of the
     Board of any affiliated company, as determined at the discretion of the
     Senior Administrative Officer.

                                                                         1
                                                                       
<PAGE>

                         PORTLAND GENERAL CORPORATION

                 OUTSIDE DIRECTORS' DEFERRED COMPENSATION PLAN

                               1996 RESTATEMENT

                                AMENDMENT NO. 2




     THIRD:  Except as provided herein, all other Plan provisions shall remain
in full force and effect.

     IN WITNESS WHEREOF, the Company has caused this instrument to be executed
as of the day and year first written above.



                                      PORTLAND GENERAL CORPORATION

                                  By: _________________________________
                                      Donald F. Kielblock
                                      Senior Administrative Officer and
                                      Vice President, Human Resources


                                                                         2
                                                                       
<PAGE>




                         PORTLAND GENERAL CORPORATION

                     MANAGEMENT DEFERRED COMPENSATION PLAN

                               1996 RESTATEMENT

                                AMENDMENT NO. 2




     This Amendment No. 2 to the Portland General Corporation Management
Deferred Compensation Plan, as restated effective January 1, 1996 (the "Plan")
is effective as of November 4, 1996 and has been executed as of the 6th day of
November 1996 on behalf of Portland General Corporation (the "Company").
     WHEREAS, pursuant to Section 10.1, the Human Resources Committee of the
Company's Board of Directors (the "Committee") has the authority to amend the
Plan; and

     WHEREAS, the Committee wishes to allow Participants who transfer to
companies affiliated with the Company or joint venture partners of the Company
to maintain their accounts with the Company until they are no longer employed
by an affiliated company;

     NOW, THEREFORE, the Plan is hereby amended as follows:

     FIRST:  Section 3.1(b) is amended in its entirety to read as follows:

         (b) CESSATION OF ELIGIBILITY.  An Eligible Employee who ceases to be
     an employee of a Participating Employer or to satisfy condition 2.13(a) or
     2.13(b) of the definition of Eligible Employee shall cease participating
     as to new deferrals immediately. An Eligible Employee who ceases to
     satisfy condition
 2.13(c) of the definition of Eligible Employee may
     continue to participate in the Plan if such individual has a current
     election to defer under the Plan at the time the Employee ceases to
     satisfy condition 2.13(c).

     SECOND:  Section 5.1(a) is amended in its entirety to read as follows:

         (a) ENTITLEMENT TO BENEFITS AT TERMINATION.  Benefits under this Plan
     shall be payable to a Participant on termination of employment with all
     Participating Employers. The amount of the benefit shall be the balance of
     the Participant's Account including Interest to the date of payment, in
     the form elected under Paragraph 5.3 below.

         Notwithstanding the above, if a Participant transfers employment from
     a Participating Employer to an affiliate of the Company or Portland
     General Electric Company, including subsidiaries and joint venture
     partners, the status of which shall be determined at the discretion of the
     Senior Administrative Officer, the Participating Employer shall continue
     to maintain the Participant's Account pursuant to Section IV. Benefits
     shall be payable to such Participant under this paragraph or Paragraph
     5.1(b) below when the Participant is no longer employed by any affiliated
     company, as determined at the discretion of the Senior Administrative
     Officer.

                                                                         1
                                                                       
<PAGE>

                         PORTLAND GENERAL CORPORATION

                     MANAGEMENT DEFERRED COMPENSATION PLAN

                               1996 RESTATEMENT

                                AMENDMENT NO. 2




     THIRD:  Except as provided herein, all other Plan provisions shall remain
in full force and effect.

     IN WITNESS WHEREOF, the Company has caused this instrument to be executed
as of the day and year first written above.




                                      PORTLAND GENERAL CORPORATION


                                  By: _________________________________
                                      Donald F. Kielblock
                                      Senior Administrative Officer and
                                      Vice President, Human Resources


                                                                         2
                                                                       
<PAGE>




                                                        Exhibit (23)




                CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As  independent  public  accountants, we hereby consent to the incorporation of
our reports included in this  Form  10-K,  into  Portland General Corporation's
previously filed Registration Statement No. 33-27462 on Form S-8,  Registration
Statement No. 33-40943 on Form S-8, Registration Statement No. 33-49811 on Form
S-8, Registration Statement No. 33-55321 on Form S-3 and Registration Statement
No. 33-61313 on Form S-8.


                                                      Arthur Andersen LLP


Portland, Oregon,
January 20, 1997





                CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent  to  the  incorporation of
our  reports  included  in  this  Form  10-K,  into  Portland  General Electric
Company's previously filed Registration Statement No. 33-62549 on Form S-3.


                                                      Arthur Andersen LLP


Portland, Oregon,
January 20, 1997


<PAGE>