S&P Global Ratings on Jan. 15 raised the outlook on Portland General Electric Co. to stable from negative after the company released the conclusion of its review of energy trades in 2020 resulted in about $127 million of losses.
The trades, by two employees, were inconsistent with prior practices and resulted in losses stemming from wholesale price volatility associated with the California heatwave in 2020, PGE disclosed in August 2020. S&P Global Ratings lowered the company's outlook to negative from positive in August following the disclosure.
The review, led by a special committee and independent advisers, resulted in actions to improve trading policies and practices, enhance risk management, and bolster oversight and internal controls, S&P Global Ratings said.
The trade losses were an isolated event, S&P Global Ratings said, adding that, following the review, the company implemented sufficient governance and internal controls.
The stable outlook also reflects the expectation that PGE's financial measures will improve in 2021 and 2022. Specifically, the ratio of funds from operations-to-debt is expected to be between 17.5% and 19.5% over the next two years.
S&P Global Ratings rates PGE at BBB+.