PGE will expand to Washington state, acquiring swath of PacifiCorp territory

Portland General Electric announced Tuesday that it will buy most of PacifiCorp’s utility assets in the state of Washington for $1.9 billion, including two wind farms, a natural gas-fired power plant, 4,500 miles of transmission and distribution lines, plus about 140,000 customers.

If approved, the deal will leave PacifiCorp with some hydroelectric and transmission assets but no retail presence in the state of Washington. The company, which has been owned by Warren Buffett’s Berkshire Hathaway conglomerate since 2006, currently operates in six states, including Oregon, California, Utah, Wyoming and Idaho.

Divesting its utility operations in Washington would simplify that structure, which requires a complicated system to allocate costs among customers and forces the company to deal with separate regulatory regimes in six states. An injection of cash would also help PacifiCorp stabilize its financial picture amid growing liabilities from 2020 wildfires that have strained its balance sheet and led to credit rating downgrades.

“This is a targeted step toward ensuring the continued delivery of safe, reliable power to our nearly two million customers in the West and Intermountain West,” Darin Carroll, PacifiCorp’s CEO, said in a news release. “This will improve the company’s financial stability while simplifying our operations to support our long-term commitment to customers in each of our remaining states.”

For PGE, the deal represents an opportunity to expand beyond its current Oregon customer base of 950,000, which is largely concentrated in the Portland metropolitan area. The acquisition would boost that number by about 15%, adding parts of eastern and central Washington to its service territory, including areas of Yakima, Walla Walla, Kittitas, Benton, Columbia and Garfield counties.

Maria Pope, chief executive of PGE, said in an interview that the Washington territories are experiencing customer growth and that additional data centers may consider locating in the Walla Walla or Yakima areas. The deal provides the opportunity for investment in new renewable energy facilities and transmission assets, she said, as well as potential economies of scale as PGE’s corporate functions provide support for both Oregon and Washington operations.

“It’s a great opportunity,” she said. “It’s a great fit.”

The acquisition price represents a 1.4 price multiple of the net value of PacifiCorp’s plant and equipment in service in Washington (known as the utility’s rate base, which is used to calculate customer rates). The company told analysts in a conference call Tuesday that it expects the acquisition to be additive to earnings in year one, and enhance its long-term earnings and dividend growth by 5% to 7%.

One key to the proposed transaction is PGE’s partnership with Manulife Infrastructure Fund III L.P., a private infrastructure fund, which would hold a 49% stake in a new PGE subsidiary and support future capital investments. Manulife is a $5.5 billion investment fund managed by Toronto-based Manulife Financial Corp. and its U.S.-based insurance and retirement subsidiary John Hancock. The fund is focused on high-growth assets such as data centers, renewable energy and transportation.

PGE expects to finance the transaction with a $600 million equity contribution from Manulife, $700 million in debt at the Washington utility and $600 million raised by PGE’s holding company. The company announced plans Tuesday for a public offering of $480 million in common stock, with an option for underwriters to issue another $70 million in shares.

The Manulife co-investment will ease the strain on PGE’s own balance sheet as it looks to finance the buildout of renewable, battery and transmission resources to meet surging customer demand and comply with decarbonization mandates in Oregon.

Pope said PGE spoke with several different investment partners while considering the deal. She described Manulife as a supportive, long-term capital investor with multiple decades of experience investing in energy, agriculture, timberlands and other infrastructure sectors.

PGE said in a news release that it will manage the Washington operations through the new subsidiary, which will be regulated by the Washington Utilities and Transportation Commission. The acquisition costs will not impact rates for Washington and Oregon customers, it said.

As part of the deal, PGE will acquire three new generation facilities: a 477-megawatt gas-fired plant in Chehalis, the 94-megawatt Goodnoe Hills wind farm southeast of Goldendale, and the 234-megawatt Marengo I and II wind farms near Dayton, in Columbia County.

The utility expects state and federal regulatory reviews of the acquisition will take 12 months. It plans to retain the current Washington workforce of 140 and honor existing labor agreements.

PGE on Tuesday reported a profit of of $41 million, or 36 cents per share on revenue of $889 million for the fourth quarter of 2025. Its adjusted earnings of 47 cents per share, taking account of unprecedented warm weather in November and December, fell well short of analysts’ consensus estimate of 72 cents per share, and its shares fell 3% in early trading.

For the full year, PGE reported net income of $306 million, or $2.77 per diluted share, on revenue of $3.6 billion. The company said its expects to earn between $3.33 and $3.53 per share in 2026.