Rod,

Listed below is one of the items that I have been trying to get a hold of you
on.  The others can wait until you have a few minutes.


We have spent some time reviewing the allocation of our VaR and net open
position (NOP) trading limits and would like to make the following changes to
better match the limits and their objectives to our trading activity and
portfolio.

1.  VaR:  Given that we are a naturally short utility and do not hedge our
long-dated gas position for regulatory, liquidity and market view reasons we
would like to  reallocate $500k of our regulated electric VaR to our regulated
natural gas VaR bring the gas VaR up to $2.5MM and reducing the electric VaR
to $7.5mm.  This change is necessary to account for the size of our natural
short position in the back-end of our reporting period. After reducing our
electric VaR we will still have sufficient capacity to manage the regulated
electric portfolio.

2. NOP:  After changing our regulated gas VaR to $2.5MM it will be necessary
to change the corresponding net open position.  Currently we have been using a
10 Bcf limit for our NOP and Maturity Gap.  Using a $2.5MM VaR we recalculated
 the corresponding NOP/Maturity limit to be approximately 17 Bcf.

I have reviewed these changes with Vlady and he has concurred with my proposed
changes.  In our conversation he recommended that in addition to reviewing
these changes with you that I also run them by Rick Buy.  It was my intent to
review these changes with you but I was surprised by having to review these
changes with Rick.  It was my understanding that once an allocation of VaR was
made to a business unit that it is within the business units preview to
reallocate that VaR as needed to met business unit objectives.  If the
business process has changed I will be glad to contact Rick and review these
changes with him.  Its your call so please let me know your preference.


Thanks.

Jim Lobdell
Vice President
Risk Management, Reporting, Controls & Credit
Portland General Electric
(503) 464-2723