20240904PAC to Bayer 57-74.pdf

1407 W North Temple, Suite 330
Salt Lake City, Utah 84116
September 4, 2024
Thomas J. Budge
[e-mail] (C)
Brian C. Collins [e-mail]
Greg Meyer [e-mail]
Kevin Higgins [e-mail] (C)
Neal Townsend [e-mail] (C)
RE: ID PAC -E-24-04
Bayer Set 4 (57-74)
Please find enclosed Rocky Mountain Power’s Responses to Bayer’s 4th Set Data Requests 57-
74.Also provided are Attachments Bayer 62, 64, 65 and 74. Provided via BOX are Confidential
Attachments Bayer 58, 60 and 69. Confidential information is provided subject to protection
under IDAPA 31.01.01.067 and 31.01.01.233, the Idaho Public Utilities Commission’s Rules of
Procedure No. 67 – Information Exempt from Public Review, and further subject to the non-
disclosure agreement (NDA) executed in this proceeding.
If you have any questions, please feel free to call me at [phone].
Sincerely,
____/s/____
Mark Alder
Manager, Regulation
Enclosures
C.c.: Eric L. Olsen/IIPA [e-mail] (C)
Lance Kaufman/IIPA [e-mail] (C)
Matthew Nykiel/ICL [e-mail]
Brad Heusinkveld/ICL [e-mail]
Ronald L. Williams/PIIC [e-mail]
Brandon Helgeson/PIIC [e-mail]
Bradley Mullins/PIIC [e-mail]
Val Steiner /PIIC [e-mail]
Kyle Williams/PIIC [e-mail]
Monica Barrios-Sanchez/IPUC [e-mail]
[e-mail]
RECEIVED
Wednesday, September 4, 2024
IDAHO PUBLIC
UTILITIES COMMISSION
PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 57

Bayer Data Request 57

To the extent not already provided, please provide all tables, figures, schedules,
exhibits, charts, and graphs supporting the testimony of Ms. Ann Bulkley and
Nikki Kobliha in executable electronic format with all formulas and links intact.

Response to Bayer Data Request 57

During the preparation of the Company’s response to this data request, it was
discovered that the Company inadvertently omitted to provide the work papers
supporting the direct testimony of Company witness, Ann E. Bulkley, from the
initial filing. Ann Bulkley’s work papers were sent to parties in this general rate
case (GRC) on August 19, 2024. All other supporting exhibits, tables, etc have
already been provided with the Company’s application. There are no
accompanying work papers for the direct testimony of Company witness Nikki L.
Kobliha.

Recordholder: Mark Alder

Sponsor: Mark Alder

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 58

Bayer Data Request 58

Please provide copies of all credit reports published by Standard & Poor’s (S&P),
Moody’s and Fitch Ratings for the Company and its parent, issued over the last
two years. This is an ongoing request.

Response to Bayer Data Request 58

PacifiCorp objects to this request to the extent that it seeks information a third-
party entity that is not within the Company’s possession. Subject to and without
waiving the foregoing objection, PacifiCorp responds as follows:

Please refer to Confidential Attachment Bayer 58.

Confidential information is provided subject to protection under IDAPA
31.01.01.067 and 31.01.01.233, the Idaho Public Utilities Commission’s Rules of
Procedure No. 67 – Information Exempt from Public Review, and further subject
to the Non-Disclosure Agreement (NDA) executed in this proceeding.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 59

Bayer Data Request 59

Please provide complete copies of all credit reports issued by S&P, Moody’s and
Fitch Ratings over the last two years that discuss the current regulated utility
industry as reviewed by any Company witness. If Company witnesses have not
reviewed the material, please so state. This is an ongoing request.

Response to Bayer Data Request 59

PacifiCorp objects to this request to the extent that it seeks information from a
third-party entity that is not within the Company’s possession. Subject to and
without waiving the foregoing objection, PacifiCorp responds as follows:

Please refer to the work papers supporting the direct testimony of Company
witness, Ann E. Bulkley, for the following S&P reports:

• S&P Global Market Intelligence, State Regulatory Evaluations, Regulatory
Research Associated dated March 1, 2024.

• S&P Global Market Intelligence, Regulatory Focus: Adjustment Clauses,
dated July 18, 2022.

• S&P Global Ratings, North American Utility Regulatory Jurisdictions Update:
Ontario Remains Unchanged, Notable Developments Elsewhere, dated March
11, 2024.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 60

Bayer Data Request 60

Please provide copies of all correspondence, presentations and all other materials
that Company or its parent company provided to credit and equity analysts over
the last two years. This is an ongoing request.

Response to Bayer Data Request 60

PacifiCorp objects to this request to the extent that it seeks information from
Berkshire Hathaway Energy Company (BHE) that is not within the Company’s
possession. Subject to and without waiving the foregoing objection, PacifiCorp
responds as follows:

Please refer to Confidential Attachment Bayer 60.

Confidential information is provided subject to protection under IDAPA
31.01.01.067 and 31.01.01.233, the Idaho Public Utilities Commission’s Rules of
Procedure No. 67 – Information Exempt from Public Review, and further subject
to the Non-Disclosure Agreement (NDA) executed in this proceeding.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 61

Bayer Data Request 61

Please provide a projection of Company’s capital expenditures out over the next
five years, and an estimate of the sources of cash available to fund these capital
expenditures broken out by external debt markets, external equity infusions from
its parent company, retained earnings, depreciation expense, deferred taxes and
other sources (explain). Please also include in this response the funding planned
for debt maturity, retirements and/or refinancing over this same time period.

Response to Bayer Data Request 61

PacifiCorp objects to this data request on the grounds that it seeks information
that is not relevant and the request is not reasonably calculated to lead to the
discovery of admissible evidence. Subject to and without waiving the foregoing
objection, the Company responds as follows:

Please refer to the direct testimony of Company witness, Nikki Kobliha, page 21,
lines 6 to 22.

PacifiCorp funds it capital expenditures (CAPEX) from a mix of debt and equity.
As stated in Nikki Kobliha’s direct testimony, page 12, lines 6-13, Berkshire
Hathaway Energy Company (BHE) has agreed to suspend dividends until 2028.
Please refer to the Company’s response to Bayer Data Request 66 which provides
a discussion on access to external capital.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 62

Bayer Data Request 62

In electronic format with all formulas intact, please provide the monthly average
balances for construction work in progress and short-term debt for the most recent
13-month period and the test year.

Response to Bayer Data Request 62

Please refer to Attachment Bayer 62.

Recordholder: Zack Muth

Sponsor: Sheila Diver

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 63

Bayer Data Request 63

Please provide the amount of capitalized interest estimated to be paid during the
test year related to construction projects for the test year.

Response to Bayer Data Request 63

The Company assumes this request is asking for allowance for funds used during
construction, which includes the capitalization of both debt and equity financing
costs. With this clarification the Company responds as follows.

The estimated r 2024 allowance for funds used during construction (AFUDC),
both equity and debt, is $366.6 million.

Recordholder: Ernie Knudsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 64

Bayer Data Request 64

In electronic format with all formulas intact, please provide the five-year
projected and five-year historical capital structure, capital expenditures and
capital funding. Please include a breakdown of all sources of equity capital
including retained earnings, paid-in capital, and debt capital, both long-term and
short-term debt, etc.

Response to Bayer Data Request 64

Please refer to direct testimony of Company witness, Nikki L. Kobliha which
provides historical (Table 2), and projected (Table 3) capital structure. Please
refer to Attachment Bayer 64 which provides the historical capital structure.

Please refer to the Company’s response to Bayer Data Request 66 which provides
a discussion on financing.

Please refer to the table below for the five-year capital spending amounts:

Recordholder: Kristi Olsen / Ernie Knudsen

Sponsor: Nikki Kobliha

2019 2020 2021 2022 2023
Capital Expenditures 2,334,486 2,678,404 1,465,374 2,522,219 3,633,097
PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 65

Bayer Data Request 65

In electronic format with all formulas intact, please identify the Commission
approved capital structure, authorized ROE, and overall rate of return in
Company’s last three regulatory proceedings. Please identify the docket and order
numbers.

Response to Bayer Data Request 65
Please refer to Attachment Bayer 65.

Recordholder: Mark Alder

Sponsor: To Be Determined

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 66

Bayer Data Request 66

Please describe how the Company accesses external capital. If the Company’s
external capital is provided by its parent or some other related company under a
credit agreement, please describe the terms of the credit agreement and the
associated service fees.

Response to Bayer Data Request 66

Please refer to the direct testimony of Company witness, Nikki Kobliha, page 19,
lines 7 to 22:

The Company does maintain a credit agreement for short-term borrowing.

The Company’s issuances of long-term debt are guided by corporate
authorizations from its board of directors, regulatory authorizations by various
state commissions, the Company’s budget and plan, loan covenants, acquisition
commitments, and other considerations. Timing and amount of any debt issuance
will depend on factors including market conditions, the Company’s needs,
financing authorizations, and other considerations.

If the Company has authorization available under an effective Securities and
Exchange Commission (SEC) registration statement, the practice is to issue debt
in a public offering due to the more favorable interest rates that are often
obtained. The decision is based on discussions with the underwriters and their
assessment of market conditions for public offerings and private placements for
the amount and maturities of debt the Company is considering issuing.

The bonds’ coupon rate and other terms and conditions are typically set during a
pricing call with the underwriters, at which time they are committing to purchase
the bonds from the Company. The pricing call normally occurs during the late
morning or early afternoon (Pacific Time).

Before the pricing call, a base prospectus is normally prepared and included in the
filing of a SEC registration statement covering the type of securities to be issued.
As a “well known seasoned issuer” PacifiCorp’s SEC registration statement can
be effective for a period of three years. A preliminary prospectus supplement,
which contains more of the specifics of the pending transaction, may be prepared
before the pricing call and used by the underwriters as part of their sales efforts.
Once the terms and conditions of the offering are set during the pricing call, the
prospectus supplement is then finalized.

A supplemental indenture is prepared during the time leading up to the pricing
call and is also then completed when all of the terms and conditions are known
and agreed to.
PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 66

Settlement, at which time the underwriters receive the bonds and pay the proceeds
(net of underwriting discounts) to the company, typically occurs three business
days after the pricing call.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 67

Bayer Data Request 67

Please provide the most recent senior secured, unsecured and corporate credit
ratings of Company, assigned by S&P, Moody’s and Fitch. Also, please provide
Company’s S&P business and financial risk profiles and identify the benchmark
volatility table (standard, medial or low) used by S&P.

Response to Bayer Data Request 67

PacifiCorp objects to this request to the extent that it seeks information from a
third-party entity that is not within the Company’s possession. Subject to and
without waiving the foregoing objection, PacifiCorp responds as follows:

Under Standard and Poor’s (S&P) group methodology, PacifiCorp’s senior
secured, unsecured and corporate S&P credit ratings benefit by being considered
“strategically important” to the Berkshire Hathaway Energy Company (BHE)
group, which has a group credit profile of ‘a’. The Company is not currently rated
by Fitch.

PacifiCorp Credit Ratings History
08/21/24
Moody's
LT Issuer/Corporate Baa1
Sr. Secured Debt A2
Sr. Unsecured Debt Baa1
Preferred Stock Baa2
Commercial Paper P-2
Outlook Stable

S&P
LT Issuer/Corporate BBB+
Sr. Secured Debt A
Sr. Unsecured Debt BBB+
Preferred Stock BBB-
Commercial Paper A-2
Outlook CW-

The S&P business and financial risk profiles are:
PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 67

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 68

Bayer Data Request 68

To the extent not already provided, please provide in electronic format with all
formulas intact, Company’s credit metric calculations relied on by S&P and
Moody’s for the last five years and near-term projections if available. Please
include all financial statements used to derive these credit metrics. In addition,
please provide S&P and Moody’s benchmark ranges for the credit metrics.

Response to Bayer Data Request 68

PacifiCorp objects to this request to the extent that it seeks information from a
third-party entity that is not within the Company’s possession. Subject to and
without waiving the foregoing objection, PacifiCorp responds as follows:

The Company does not calculate the credit metrics relied on by the rating
agencies. Standard and Poor’s (S&P) and Moody’s calculate the results using
financial statements publicly available.

Please refer to the Company’s response to Bayer Data Request 58, specifically
Confidential Attachment Bayer 58, which provides the rating agency reports.

The benchmark ranges are provided in the direct testimony of Company witness,
Nikki L. Kobliha, Table 5

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 69

Bayer Data Request 69

Please state whether Company’s regulated retail operations have any off balance
sheet debt such as operating leases as categorized by S&P. If the answer is “yes,”
provide the amount of each off-balance sheet debt item and estimate the related
imputed interest and amortization expense associated with these off-balance sheet
debt equivalents specific to Company’s jurisdictional regulated retail operations.
If available, please provide this information for the test year.

Response to Bayer Data Request 69

Yes. Please refer to Confidential Attachment Bayer 69 which provides the
Company’s projected amounts of each imputed Standard and Poor’s (S&P) debt
item and associated interest and amortization expense amounts projected for the
test year.

Confidential information is provided subject to protection under IDAPA
31.01.01.067 and 31.01.01.233, the Idaho Public Utilities Commission’s Rules of
Procedure No. 67 – Information Exempt from Public Review, and further subject
to the Non-Disclosure Agreement (NDA) executed in this proceeding.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 70

Bayer Data Request 70

Please provide the jurisdictional allocation for each of the Company’s
jurisdictions for all balance sheet and income statement adjustments S&P makes
in assessing the Company’s credit metrics.

Response to Bayer Data Request 70

PacifiCorp objects to this request to the extent that it seeks information from a
third party entity that is not within the Company’s possession. Subject to and
without waiving the foregoing objection, PacifiCorp responds as follows:

The Company is not aware of Standard and Poor’s (S&P) making jurisdictional
adjustments in their rating of PacifiCorp.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 71

Bayer Data Request 71

In electronic format with all formulas intact, please provide the Company’s
jurisdictional statement of operating income at present and proposed rates for the
test year.

Response to Bayer Data Request 71

Please refer to the direct testimony of Company witness, Shelley E. McCoy,
Exhibit 47, specifically page 1.0, line 33.

Recordholder: Nick Highsmith

Sponsor: Shelley McCoy

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 72

Bayer Data Request 72

Please describe the impact, if any, the ratings downgrades have had on the
Company’s embedded cost of debt.

Response to Bayer Data Request 72

A credit rating is an assessment of a company’s ability to repay interest and
principal to investors, the lower the credit rating the higher the spread premium
necessary to attract borrowing from investors. A lower credit rating directly
corresponds to a higher cost of debt.

PacifiCorp’s rating downgrade increased its spread premium and forecasted cost
of debt as investors expect a higher coupon rate on the Company’s issuances. A
supportive regulatory environment is needed to ensure additional downgrades do
not increase these costs further.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 73

Bayer Data Request 73

Please describe the Company’s embedded cost of debt immediately before the
ratings downgrades.

Response to Bayer Data Request 73

PacifiCorp’s embedded cost of debt as of June 30, 2023 was 4.910 percent.

The Company was downgraded by Standard and Poor’s (S&P) in June 2023 and
by Moody’s in November 2023, but these downgrades occurred after the May
2023 issuance.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

PAC-E-24-04 / Rocky Mountain Power
September 4, 2024
Bayer Data Request 74

Bayer Data Request 74

What is Ms. Kobliha’s estimate of the impact on the Company’s cost of debt as a
result of the ratings downgrades already realized? Please provide a detailed
explanation and all work papers with formulas intact supporting her estimate.

Response to Bayer Data Request 74

The impact on the Company’s cost of debt as a result of the ratings downgrade
cannot be precisely calculated since there are many factors that influence the cost
of debt for a particular issuance including the date of the issuance, the United
States (U.S.) Treasury market, headlines regarding the utility industry, the supply
of buyers in the market and even the day of the week.

Generally, the Company saw a 10 to 20 indicative basis point increase in the
spread over treasuries from the May 2023 offering to the January 2024 offering.

The investment grade utility index spread increased 34 basis points over the
period from May 2023 to January 2024. Please refer to Attachment Bayer 74.

Documentation on all long-term debt issuances is provided to the Idaho Public
Utilities Commission (IPUC) under Order No. 36136.

Recordholder: Kristi Olsen

Sponsor: Nikki Kobliha

1
Joe Dallas (ISB# 10330)
Rocky Mountain Power
825 NE Multnomah, Suite 2000
Portland, OR 97232
Telephone: [phone]
Email: [e-mail]

Attorney for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF ROCKY
MOUNTAIN POWER FOR
AUTHORITY TO INCREASE ITS
RATES AND CHARGES IN IDAHO
AND APPROVAL OF PROPOSED
ELECTRIC SERVICE SCHEDULES
AND REGULATIONS

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CASE NO. PAC-E-24-04

ATTORNEY’S CERTIFICATE
CLAIM OF CONFIDENTIALITY
RELATING TO DISCOVERY
RESPONSES

I, Joe Dallas, represent Rocky Mountain Power in the above captioned matter. I am a
attorney for Rocky Mountain Power.
I make this certification and claim of confidentiality regarding the response to the attached
Idaho Public Utilities Commission Staff discovery request pursuant to IDAPA 31.01.01 because
Rocky Mountain Power, through its response, is disclosing certain information that is Confidential
and/or constitutes Trade Secrets as defined by Idaho Code Section 74-101, et seq. and 48-801 and
protected under IDAPA 31.01.01.067 and 31.01.01.233. Specifically, Rocky Mountain Power
asserts that the response to Bayer Set 4 contains Company proprietary information that could be
used to its commercial disadvantage.
2
Rocky Mountain Power herein asserts that the aforementioned responses contain
confidential information that the information contains Company proprietary information.
I am of the opinion that this information is “Confidential,” as defined by Idaho Code
Section 74-101, et seq. and 48-801, and should therefore be protected from public inspection,
examination and copying, and should be utilized only in accordance with the terms of the
Protective Agreement in this proceeding.

DATED this 4th day of September, 2024.

Respectfully submitted,

By__________________________
Joe Dallas
Attorney
Rocky Mountain Power