20051031Part I response staff 2nd request .pdf

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October 28, 2005
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DONALD L. HOWELL, II
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
472 W. Washington
Boise, Idaho 83702-5983
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RE:ID Docket No. PAC-05-
IPUC Staff 2nd Data Request (3-
Please find enclosed MidAmerican s and PacifiCorp s Responses to IPUC 2nd Set of Data
Requests (3-4). A supplemental response to IPUC 2.4 will follow when information
related to Idaho becomes available.
If you have any questions, please call Andrea Kelly at [phone].
Sincerely,
QNt&--
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Andrea Kelly
Managing Director, PacifiCorp
Enclosures
cc:Jamie Van Nostrand/Stoel Rives
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P AC-05-08/PacifiCorp
October 27 2005
IPUC Staff Data Request 2.3
IPU C Staff Data Request 2.
Please provide a copy of the Applicants' response to the following data requests:
Ore20n PUC
Data Request Nos. 3 , 7 , 8 , 9 , 15 , 16, 17
, 29, 30, 33, 34, 35, 37, 38, 42, 43 , 44, 45 , 47, 48 , 49 , 50 , 51 , 52 , 53 (a
, 56, 60, 61 , 62, 63, 64, 65, 66, 68, 69, 70, 71 , 73 , 74, 75 , 76, 77 , 78 , 79, 80
101 102 103 104, 108 (a c), 109, 110
111 (a through k), 112, 113
Utah Division of Public Utilities
Data Request Nos. 2., 2.3, 2.4, 3., 3., 3., 3., 3.13 , 3.14, 3.16, 3., 3.
, 4., 4., 4., 4.4, 4., 4.
Utah Committee of Consumer Services
Data Request Nos. 2., 2., 2., 2.4, 2., 2., 2., 2.14, 2., 2.16 , 2.18, 2.
, 2., 2.30, 2., 2., 2., 2., 2.38
2.47 2.48 , 2., 2., 2., 2., 2., 2., 2., 2., 2., 2., 2.
, 2., 2., 4., 4., 4., 4., 4., 4.11 , 6.1 a
WUTC Staff
Data Request Nos. 2 through 25
Washin2ton Public Counsel
Data Request Nos. PC-, PC-, PC-, PC-, PC-, PC-, PC-, PC-, PC-
, PC-, PC-, PC-, PC-, PC-, PC-, PC-, PC-, PC-, PC-
PC-28 PC-29 PC-31 PC-32 PC-33 PC-34 PC-35 PC-37 PC-39 PC-41 PC-
42 (a d), PC-, PC-, PC-, PC-, PC-, PC-, PC-, PC-, PC-
PC-, PC-, PC-, PC-, PC-, PC-, PC-, PC-
Response to IPUC Staff Data Request 2.
Please see Attachment IPUC 2.
IDAHO
P A C- O5-
MEHC/PPW
IPUC 2nd Set DATA REQUEST
ATTACHMENT IPUC
UM-1209/PacifiCorp
August 19,2005
OPUC Data Request 3
OPUC Data Request 3
Regarding PPUI00, Abel 11 lines 21-23: Please provide all documentation
analyses and studies or other sources of information relied upon to draw the
conclusion that PacifiCorp does not meet ScottishPower s investors ' expectations.
Response to OPUC Data Request 3
The conclusion drawn in Mr. Abel's testimony is based upon his conversations
with representatives of Scottish Power pic.
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 7
OPUC Data Request 7
Regarding PPUI00 Abel/14, line 9 - PPVI00, Abel/IS, line 26: Is it the
applicant's position that the transmission investments would not take place absent
MERC's acquisition of PacifiCorp? If yes, please provide documentation that
supports this position. If no, why not?
Response to OPUC Data Request 7
It is the Applicant's position that MERC's acquisition of PacifiCorp will provide
greater certainty in both the funding and timeframes for the investments described
in Mr Abel's testimony. There are a number of investments referenced in the
documents which are new investments, investments with accelerated schedules or
investments with expanded scope or capabilities. These are a result of MERC' s
commitment. For example: The Mona - Oquirrh investment has been considered
in part through PacifiCorp s IRP efforts. However the funding availability and
project time lines have not been certain nor commitments made. The Walla Walla
Yakima or Mid C investment was a direct result of MEHC's commitments and
has not been part of PacifiCorp' s plans to date.
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 8
OPUC Data Request 8
PPUI00 and PPUI01. Provide a listing of each condition and commitment
offered by MEHC in this exhibit and testimony by other applicant witnesses, and
a corresponding 2006 present valued dollar estimate of benefit. The dollar
estimate of benefit should be net of the costs customers would incur in rates. For
example, if a transmission investment were made, the benefit estimate should be
net of the revenue requirements effect in rates. For each condition and
commitment describe the difference (or incremental benefit) customers would
experience compared to continued ownership by Scottish Power.
Response to OPUC Data Request 8
A preliminary listing of the NPV of revenue requirements and benefits of the
commitments made in the testimony of Greg Abel (Exhibit PPL/lOl) is provided
in Attachment OPUC 8. These values are initial estimates only.
comprehensive cost-benefit analysis related to these items has been completed at
this point, and these estimates may be subject to revision during the course of this
proceeding. Substantial benefits exist that have not been currently quantified in
this data response. A preliminary estimate of the NPV of the quantifiable net
benefits of the commitments is $200 million. This includes quantification of
externality values associated with environmental benefits, in a manner consistent
with PacifiCorp s 2004 IRP.
Benefits have not been estimated at this time for the continuation of previous
commitments included in the testimony of Brent Gale (Exhibit PPU30 1).
Financial impacts for other benefits not referenced in the above were not
estimated because they tend to be more qualitative than quantitative in nature.
OREGON
UM-1209
MEH C/PPW
OPUC STAFF DATA REQUEST
ATTACHMENT OPUC 8
ON THE ENCLOSED CD
UM -1209/PacifiCorp
August 19, 2005
OPUC Data Request 9
OPUC Data Request 9
PPU200, Johansen/6 notes that PaciCorp has replaced and maintained
transmission facilities. Referring to the transmission investments listed on
PPUIOO, Abel/14, line 9-Abel/15, line26. For each transmission investment
listed, provide a discussion answering the following questions:
a. Has PacifiCorp identified the project as a needed improvement?
b. Has PacifiCorp budgeted funds to undertake the improvement?
c. Has the transmission improvements been identified or studied in the
company s IRP?
d. Has any state adopted an IRP that includes the transmission investment?
e. Ras the company undertaken a cost/benefit study regarding the
transmission investment? If yes, please provide the study.
Response to OPUC Data Request 9
a. See Response to OPUC 9.
b. PacifiCorp has approved limited funds to complete corridor alternative
selection and begin preliminary site and permitting feasibility analysis on
the Mona-Oquirrh project. PacifiCorp has also approved funding to secure
one substation site at Oquirrh to reduce the future risk of locating the
substation in an area that has high economic growth of residential and
commercial properties. The commitment to the project is less than $6
million.
No funds have been committed for the other two projects specifically
referenced in the testimony.
c. Only the "Mona - Oquirrh" transmission investment was identified and
studied in PacifiCorp s 2004 IRP. This investment was associated with
the CY 2009 Utah Combined-Cycle Combustion Turbine (CCCT) proxy
resource identified in the Preferred Portfolio.
d. None of the commissions regulating PacifiCorp "adopt" the Company
IRPs. Washington has acknowledged the IRP with the Mona - Oquirrh
transmission investment included in PacifiCorp s Preferred Portfolio. Utah
has also acknowledged the IRP, but has declined to acknowledge the
Action Plan. In lieu of Action Plan acknowledgement, the Utah Public
Service Commission ordered that the IRP Action Plan be considered in the
approval process for PacifiCorp s subsequent resource solicitations.
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 9
e. As was indicated in Response to OPUC 9., the Mona-Oquirrh
transmission project was evaluated as part of the Company s 2004 IRP,
and is a component of the Preferred Portfolio. The Company is planning
on evaluating the benefit of the Path-C upgrade as part of its 2004
IRP Update filing that is scheduled to be filed informally with the
Commissions in October. As wind projects are identified as part of RFP
2003B, the Company will evaluate the benefits of the wind project and
the Walla Walla - Yakima or Mid-C commitment for cost-effectiveness.
UM -1209/PacifiCorp
August 19, 2005
OPUC Data Request 10
OPUC Data Request 10
Regarding PPL/300, Gale/24: Oregon has affiliated interest rules and statutes that
require services provided to the utility by an affiliate to be priced at the lower of
cost or market. For the states where MEC serves, which of those states have the
same requirement as Oregon?
Response to OPUC Data Request 10
In illinois, affiliate transactions, including transactions for services, must
be approved by the Illinois Commerce Commission, unless entered into in the
ordinary course of business at market prices or unless otherwise subject to an
enumerated exemption. To reduce the number of regulatory proceedings that
otherwise would be required and to document policies, MEC has entered into
an Inter-company Administrative Services Agreement C'IASA"), with its ultimate
parent holding company, which has been approved by the illinois Commerce
Commission. The IASA allows the utility to provide and receive "corporate
support" services as long as the actual cost or an appropriate allocation of cost is
charged for the service. The IASA was provided as PPL Exhibit 501 , attached to
the testimony of MEHC witness Tom Specketer.
In Iowa, affiliate transactions for services must be priced the same as such
services are priced to non-affiliates. If no such price is available, the services
must be priced at the lower of: (i) fully distributed cost; (ii) the lowest price
charged to other affiliates; or (iii) market price. In no event is an amount in
excess of market price to be charged to the utility.
In South Dakota, the PUC does not regulate affiliate transactions, although by law
affiliate transactions are not to result in cross-subsidization of the affiliate by the
regulated utility.
UM -1209/PacifiCorp
August 19, 2005
OPUC Data Request 14
OPUC Data Request 14
Regarding PPU4oo, Goodman/9: What is the basis for selecting a five-year
period for the 10-basis point commitment?
Response to OPUC Data Request 14
MidAmerican Energy Holdings Company ("MEHC") believes that over the recent
past, due to the superior credit quality and reputation of Berkshire Hathaway,
MERC's subsidiaries have been able to issue long-tenn (Le., ten year) debt
issuances at roughly a ten basis point discount, relative to other issuances by firms
of similar credit quality. MERC cannot guarantee that this spread will continue to
exist, or if it does, for how long. However, MERC is confident enough of its
market reputation that it is willing to make the five year conunitment referenced
in the question. The spread benefit may not last five years, but MERC is willing
to assume the business and market risk that it can issue debt at up to the ten basis
point discount for that period of time. Uncertainty around the permanence of the
spread and the magnitude of the estimated PacifiCorp long-term debt issuances
makes a benefit projection beyond five years less certain.
UM -1209/PacifiCorp
August 19, 2005
OPUC Data Request
OPUC Data Request 15
Regarding PPU400, Goodmanl9: Provide copies of documents relied upon for
the financial forecast of future PacifiCorp debt issuance.
Response to OPUC Data Request 15
Debt issuances for PacifiCorp included in the financial forecast of Scottish Power
are provided as Confidential Attachment OPUC 15. This information is
Confidential and is provided subject to the terms and conditions of the protective
order in this proceeding.
OREGON
UM-1209
MEH CIPPW
OPUC STAFF DATA REQUEST
CONFIDENTIAL A TT A CHMENT
OPUC
CONFIDENTIAL (LEVEL YELLOW)
ON THE ENCLOSED CD
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 16
OPUC Data Request 16
Regarding PPU400 Goodman/II: Provide a table that shows the derivation of
the $1.2 billion estimate of the purchase price in excess of book value. What
account will the $1.2 billion premium be entered into?
Response to OPUC Data Request 16
The derivation of the estimated purchase price in excess of equity book value is
provided as Confidential Attachment OPUC 16. This information is Confidential
and is provided subject to the terms and conditions of the protective order in this
proceeding.
OREGON
UM -1209
MEn CIPPW
OPUC STAFF DATA REQUEST
CONFIDENTIAL ATTACHMENT
OPUC
CONFIDENTIAL (LEVEL YELLOW)
0 N THE EN CLOSED CD
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request
OPUC Data Request 17
Regarding PPL/4oo, Goodman/IS: Provide examples of possible Commission
actions that would qualify as a reduction in revenue requirements from an
imputation of benefits accruing from the acquisition company. Was it intentional
to not list Berkshire Hathaway as an acquisition company? If yes, why was
Berkshire Hathaway not listed?
Response to OPUC Data Request 17
Examples of possible Commission actions that would qualify as a reduction to
revenue requirements as a result of the imputation of benefits accruing from the
acquisition company or other parent companies include the assignment of
effective tax rates of the acquisition company or other parent companies rather
than the use of the effective tax rates of the operating utility in the calculation of
revenue requirements or the use of a consolidated capital structure that may assign
additional leverage to the operating utility without applying an equity rate of
return that reflects the risk of the double leveraged capital structure.
As of the date of the initial testimony, Berkshire Hathaway was an MEHC
investor. With the passage of the Energy Policy Act of 2005, the Public Utility
Holding Company Act ("PURCA") will be repealed. As reflected in Applicant'
August 17, 2005 filing re PURCA-related revisions to the Application, Berkshire
Hathaway will convert the amount that it has invested in convertible preferred
stock of MEHC into common stock of MEHC. In the August 17, 2005 revisions
Mr. Gale s exhibit and Mr. Goodman s testimony list Berkshire Hathaway as well
as MEHC and PPW Holdings LLC.
UM -1209/PacifiCorp
August 19, 2005
OPUC Data Request 20
OPUC Data Request 20
Regarding PPU500, Specketer/21-22: Are the Applicants requesting a waiver of
the Commission s affiliated interest rules to have shared service costs billed to
PacifiCorp at cost, instead of the lower of market or costs?
Response to OPUC Data Request 20
No, a waiver of the Commission s rules is not being requested. Costs for the
executive management services and other services contemplated with this
testimony are expected to be at or below market. If costs exceed market, MEHC
is willing to utilize the market price or pursue a waiver.
UM -1209/PacifiCorp
August 19, 2005
OPUC Data Request 21
OPUC Data Request 21
Please provide a listing of all PacifiCorp s Board of Directors ' meetings,
including committee meetings, over the past year and a schedule of upcoming
Board of Directors' meetings, including committee meetings for the next year.
Response to OPUC Data Request 21
2005 Meeting Dates 2006 Meeting Dates
(actual dates have not been set at this
time)
PacifiCorp Board of DirectorsPacifiCorp Board of Directors
January 20, 2005
February 15, 2005
March 17, 2005
April 21 , 2005
May 23, 2005
May 27,2005
June 16, 2005
July 14,2005
August 18, 2005
September 15,2005
October 20, 2005
November 17,2005
December 13, 2005
Held approximately the third week of
every month
PacifiCorp Compensation Committee PacifiCorp Compensation Committee
April 29, 2005
May 12, 2005*
May 13, 2005*
J ul y 6, 2005
Held twice a year
* Resolution in lieu of meeting.
UM -1209/PacifiCorp
August 19, 2005
OPUC Data Request 22
OPUC Data Request 22
Please provide PacifiCorp s Board of Directors' meeting minutes , including
committee meeting minutes, since January 1, 2004.
Response to OPUC Data Request 22
PacifiCorp objects to this data request to the extent that it seeks information
covered by the attorney-client and work product privileges. Without waiving this
objection, PacifiCorp responds as follows:
Please see Confidential Attachments OPUC 22 -1 through OPUC 22 -
containing PacifiCorp s Board of Directors' meeting minutes. This information is
Confidential and is provided subject to the terms and conditions of the protective
order in this proceeding.
Please see Confidential Attachment OPUC 22 -7, containing PacifiCorp
Compensation Committee meeting minutes. This information is Confidential and
is provided subject to the terms and conditions of the protective order in this
proceeding.
OREGON
UM-1209
MEH CIPPW
OPUC STAFF DATA REQUEST
CONFIDENTIAL ATTACHMENT
OPUC 22 (1-
CONFIDENTIAL (LEVEL YELLOW)
ON THE ENCLOSED CD
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 23
OPUC Data Request 23
Please provide a listing of all MidAmerican Energy Holdings Company
(MERC) Board of Directors' meetings, including committee meetings, over the
past year and a schedule of upcoming Board of Directors' meetings, including
committee meetings for the next year.
Response to OPUC Data Request 23
MEHC Board Meetings
May 26, 2004
December 9,2004
May 10, 2005
December 7, 2005
No meetings yet scheduled for 2006
MEHC Committee (Audit) Mee~
February 9 , 2004
May 4, 2004
May 26, 2004
August 3, 2004
November 3 2004
December 8, 2004
February 25, 2005
May 5, 2005
May 9, 2005
August 8, 2005
November 3, 2005
December 6, 2005
No meetings yet scheduled for 2006
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 24
OPUC Data Request 24
Please provide MERC's Board of Directors ' meeting minutes, including
committee meeting minutes, since January 1 , 2004.
Response to OPUC Data Request 24
MERC's final and approved Board of Directors' meeting minutes, including
committee meeting minutes, since January 1, 2004, are attached in the following
confidential attachments:
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
Confidential Attachment OPUC 24-
This information is Confidential and is provided subject to the terms and
conditions of the protective order in this proceeding.
OREGON
UM-1209
MER C/PPW
OPUC STAFF DATA REQUEST
CONFIDENTIAL ATTACHMENT
OPUC 24 (1-14)
CONFIDENTIAL (LEVEL YELLOW)
ON THE ENCLOSED CD
UM -1209/Pacifi Corp
August 19, 2005
OPUC Data Request 25
0 PU C Data Request 25
Please provide a listing of all ScottishPower s Board of Directors' meetings
including committee meetings, over the past year and a schedule of upcoming
Board of Directors' meetings, including committee meetings for the next year.
Response to OPUc Data Request
2005 Meeting Dates 2006 Meeting Dates
Scottish Power Board of Directors Scottish Power Board of Directors
(dates subject to change and
confirmation)
4 February 2/3 February 2006*
3 March 29/30/31 March 2006*
6 April 4/5 May 2006*
12 April 26/27 July 2006*
6 May
22 May
23 May
28 June
21 July
8 August
30 September*
4 November
Scottish Power Board Committees Scottish Power Board Committees
10 February No committee meeting dates have
21 February been confirmed at this time.
24 May
22 June
30 June
10 August
Scottish Power Audit Committee Scottish Power Audit Committee
3 February No committee meeting dates have
5 April been confirmed at this time.
4 May
20 May
21 July
8 August
*Future meeting dates subject to change and confirmation.
UM..1209lPacifiCorp
August 19,2005
OPUC Data Request 27
OPUc Data Request
Please provide a listing of all presentations made to ratings agencies (e.
g.,
Moody s, Fitch and S&P) by PacifiCorp since January 2004. For each listed
presentation, provide the date, location, and topic(s) covered.
Response to OPUc Data Request 27
Date, location and topics are detailed in response to OPUC 28.
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 28
OPUc Data Request
Please provide a copy of each presentation, including supporting materials,
PacifiCorp made to the ratings agencies since January 1, 2004.
Response to OPUc Data Request 28
Please refer to Confidential Attachments OPUC 28 -1 and OPUC 28 -2 on the
enclosed CD. These documents contain Confidential infonnation and are
provided subject to the terms and conditions of the protective order in this
proceeding.
OREGON
UM-1209
MEH CIPPW
OPUC STAFF DATA REQUEST
CONFIDENTIAL ATTACHMENT
OPUC 28 (1-
CONFIDENTIAL (LEVEL YELLOW)
ON THE ENCLOSED CD
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 29
OPUc Data Request 29
Please provide a listing of all presentations made to ratings agencies (e.
Moody , Fitch and S&P) by MEHC since January 2004. For each listed
presentation, provide the date, location, and topic(s) covered.
Response to OPUc Data Request 29
At three different times, since January 2004 presentations have been made by
MEHC, in New York, to Moody , Fitch Ratings and S&P. Each time
presentations were made to each of the three ratings agencies over a two day
period as shown below.
January 30-, 2004
June 23-, 2004
May 24-25, 2005
Topics covered included corporate strategy and financial information. The
presentation on May 24-25,2005 included an additional segment which was an
overview of the PacifiCorp transaction.
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 30
OPUc Data Request 30
Please provide a copy of each presentation, including supporting materials
MERC made to the ratings agencies since January 1 2004.
Response to OPUc Data Request
The requested presentations to rating agencies are provided in the seven
confidential attachments as follows, pursuant to the protective order in this
docket:
Confidential Attachment OPUC 30 -1 (Presentation of January 30, 2004.
Confidential Attachment OPUC 30 -2 (Supporting materials for
Presentation of January 30,2004.
Confidential Attachment OPUC 30 -3 (Presentation of June 23, 2004.
Confidential Attachment OPUC 30 -4 (Supporting materials for
Presentation of June 23 2004.
Confidential Attachment OPUC 30 -5 (Presentation of May 24, 2005.
Confidential Attachment OPUC 30 -6 (Supporting materials for
Presentation of May 24, 2005.
Confidential Attachment OPUC 30 -7 (Presentation of May 24, 2005,
regarding PacifiCorp Transaction.
The information provided in these attachments is Confidential and is provided
subject to the terms and conditions of the protective order in this proceeding.
OREGON
UM-1209
MEH CIPPW
OPU C STAFF DATA REQUEST
CONFIDENTIAL ATTACHMENT
OPUC 30 (1-
CONFIDENTIAL (LEVEL YELLOW)
ON THE ENCLOSED CD
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 34
OPUC Data Request 34
Please provide the applicant's cost estimate (and supporting materials) for the
formation of the ServCo discussed at PPU300, Gale/32 lines 10-12.
Response to OPUC Data Request 34
With the recent enactment of new energy legislation, the Domenici-Barton
Energy Policy Act of 2005 ("Energy Act,,, signed into law on August 8, 2005,
the Public Utility Holding Company Act of 1935 will be repealed effective
February 8, 2006. As a result of PURCA's repeal, a services company-
ServCo-will not be formed. This portion of Mr. Gale s prefiled direct testimony
was withdrawn in the August 17, 2005 filing reflecting changes to the Application
and Direct Testimony related to repeal of PURCA.
R. Rep. No. 109-190 (Conf. Rep.
UM -1209 /Pacifi Corp
August 19, 2005
OPUC Data Request 35
OPUc Data Request
Please provide the applicant's cost estimate (and supporting materials) for the
currently required SEC filings. Please indicate which costs will be avoided if
PURCA is repealed.
Response to OPUc Data Request
With the recent enactment of new energy legislation, the Domenici-Barton
Energy Policy Act of 2005 ("Energy Act", signed into law on August 8, 2005,
the Public Utility Holding Company Act of 1935 will be repealed effective
February 8, 2006. As a result, MEHC does not expect to make any filings with
the Securities and Exchange Commission seeking that agency s approval of the
proposed acquisition.
R. Rep. No. 109-190 (Conf. Rep.
UM-1209/PacifiCorp
August 19,2005
OPUC Data Request 37
OPUc Data Request 37
Please provide the names of Berkshire Hathaway s Board of Directors.
Response to OPUc Data Request
Warren E. Buffett
Howard G. Buffett
William R. Gates ill
Malcolm G. Chace
David S. Gottesman
Charlotte Guyman
Donald R. Keough
Charles T. Munger
Thomas S. Murphy
Ronald L. Olson
Walter Scott, Jr.
Warren E. Buffett is the Chairman of the Board of Directors; Mr. Munger is the
Vice Chairman.
UM-1209/PacifiCorp
August 19, 2005
OPUC Data Request 38
OPUc Data Request 38
Please provide a listing of all Berkshire Hathaway s Board of Directors' meetings,
including committee meetings, over the past year and a schedule of upcoming
Board of Directors' meetings, including committee meetings for the next year.
Response to OPUc Data Request
Berkshire Hathaway Inc. Board Meetings
February 17, 2004
May 3, 2004
October 29-30, 2004
May 2, 2005
July 5, 2005
October 21-22, 2005
No meetings yet scheduled for 2006
Berkshire Hathaway Inc. Audit Committee Meetings
March 2, 2004
May 3, 2004
July 14, 2004
August 4, 2004
November 3 , 2004
March 2, 2005
May 2, 2005
June 29, 2005
August 3, 2005
August 17, 2005
November 2 2005
No meetings yet scheduled for 2006.
Berkshire Hathaway Inc. Governance, Compensation and Nominating Committee
Meetings
April 27, 2004
January 24, 2005
No meeting yet scheduled for 2006
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 42
OPUc Data Request
Does PacifiCorp have existing contracts and/or tariffs with CalEnergy
Generation, Kern River Gas Transmission Company, Northern Natural Gas
Company, or any other MEHC affiliate? If so, please summarize the terms and
conditions of the contracts/tariffs including costs and termination dates.
Response to OPUc Data Request 42
The requested information is provided as Attachment OPUC 42 -Ion the
enclosed CD.
CalEnergy
PacifiCorp owns and operates the Blundell Geothennal Plant near Milford,
Utah. Intermountain Geothermal Company, a subsidiary of CalEnergy, is a part
owner and the unit operator of the Roosevelt Hot Springs, which is the
geothermal steam source for the Blundell Plant. PacifiCorp and Intermountain
are signatories to two agreements: 1) Geothermal Steam Prepurchase
Agreement and 2) Steam Delivery Agreement. Please see Attachment OPUC
42 -2 on the enclosed CD for a summary of the agreements.
OREGON
UM-1209
MEH CIPPW
OPUC STAFF DATA REQUEST
ATTACHMENTS OPUC 42 -and 42
ON THE ENCLOSED CD
UM-1209/PacifiCorp
August 29 , 2005
OPUC Data Request 43
OPUc Data Request
Has PacifiCorp analyzed any future possible contracts with CalEnergy
Generation, Kern River Gas Transmission Company, or Northern Natural Gas
Company? Please explain.
Response to OPUC Data Request 43
PacifiCorp has not analyzed any future possible contracts with these companies.
UM -1209/PacifiCorp
August 29, 2005
OPUC Data Request 44
OPUc Data Request
If the application is approved, what is the anticipated effect on the deductible buy-
down insurance with SPI? Will this captive insurance end since PacifiCorp would
no longer be an affiliate of SPUK?
Response to OPUC Data Request 44
The deductible buy-down insurance with Dornoch would be terminated. The
Ireland-based captive insurer Domoch International Insurance Limited
Dornoch') has been established by Scottish Power to provide insurance cover to
companies within the Scottish Power group. Accordingly, insurance cover from
Dornoch will no longer be available to PacifiCorp once it leaves the Scottish
Power group.
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 45
OPUC Data Request
If the captive insurance is terminated, has PacifiCorp analyzed the cost of
replacement or substitute insurance? Please explain.
Response to OPUc Data Request 4S
Pacifi Corp obtained indicative quotes from the commercial market for
replacement insurance and found them to be above the levels of premiums
charged by the captive. Please refer to OPUC Data Request 46. MEHC believes
that similar terms and conditions will be available subject to appropriate risk
parameters
UM -1209/Pacifi Corp
August 29, 2005
OPUC Data Request 47
OPUC Data Request 47
Has PacifiCorp analyzed or does PacifiCorp plan to analyze obtaining insurance
from any insurance companies currently owned by Berkshire-Hathaway? Please
explain.
Response to OPUc Data Request 47
PacifiCorp has not analyzed obtaining insurance from any insurance companies
currently owned by Berkshire-Hathaway.
UM -1209/PacifiCorp
August 29, 2005
OPUC Data Request 48
OPUC Data Request 48
Per page 38 of the Stock Purchase Agreement, does PacifiCorp anticipate that it
will make a contribution to its Pension Plan to address the current under funding?
If so, what is the projected amount of this contribution?
Response to OPUc Data Request 48
PacifiCorp is considering this additional contribution, though no determination
has yet been made.
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 49
OPUC Data Request 49
If PacifiCorp plans to make a contribution to its Pension Plan, please provide
sample journal record entries or T -accounts for the accounts used in the
contribution.
Response to OPUc Data Request
Example entry to record contribution. Debit Pension Liability and Credit Cash.
AlC # Account Descri tion
280340 Pension
119665 State Street Bank & Trust
Debit
$xxx.
Credit
$xxx.
UM -1209/PacifiCorp
August 29, 2005
OPUC Data Request 50
OPUC Data Request 50
Does PacifiCorp anticipate that it will revise its pension plan assets,
investment category, to more closely match MEHC's investment category mix?
Will PacifiCorp perform an actuarial study on the effects of any change in
investment mix that may result? Please explain.
Response to OPUc Data Request
PacifiCorp undertakes an asset-liability study approximately every two years, the
most recent of which was completed earlier in CY 2005. The analysis was done
in conjunction with the PacifiCorp Retirement Plan actuaries, Hewitt Associates,
and investment consultants. The results of that study are currently being reviewed
by the PacifiCorp Pension Investment Committee, the Retirement Committee and
advisors.
Any change to the existing asset allocation targets would be a result of the asset
liability analysis and not to more closely match MEHC's investment category
mIX.
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request
OPUc Data Request
PPL 100; Abel/5 states that there will be "at least a $30 million reduction (over
five years) in corporate overhead costs." This amount is based on the difference
of MEHC/MEC overhead costs capped at $9 million and SPUK' s overhead cost
of $15 million. However the SPUK CY 2006 cost was stipulated in Oregon
$11.7 million system-wide. Is the projected savings actually $13.5 million
system-wide over five years ($4 million Oregon)? Please explain.
Response to OPUC Data Request 51
The testimony of Mr. Abel and Mr. Specketer pertaining to overhead costs does
not speak to the rate treatment of such costs, but merely the billing from MEHC to
PacifiCorp. We believe the rate treatment of such costs should be addressed in
rate proceedings.
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 52
OPUC Data Request 52
Based on the above difference between actual SPUK overhead costs and the
MERC stated overhead costs, what else is contributing to this savings? Please list
each category of savings and associated savings.
Response to OPUc Data Request 52
See OPUC Data Request 51.
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 53
OPUC Data Request 53
Please explain the effect of the transaction on PacifiCorp s Corporate Allocation
for Group Expenses.
a. How will the transaction change the CY 2006 electric operation allocation
of 92.74%?
b. What will be the revised electric operation allocation?
c. If the allocation is increased due to PPM not being in the calculation
wouldn t this actually result in an increase in corporate overhead? Please
explain.
d. What will be PacifiCorp s cost associated with an increase in the electric
operation allocation?
Response to OPUc Data Request 53
a. The CY 2006 electric operation allocation percentage will increase as
result of PPM & other affiliates remaining with ScottishPower following
the closing of the transaction.
b. The revised electric operation allocation is anticipated to be approximately
99.85%.
c. It is not possible to respond definitively at this time. Depending upon
whether and to what extent PacifiCorp s total internal corporate overhead
costs are reduced, the actual level of such costs allocated to the regulated
utility could either decrease or increase even though the percent of the
total has increased. Such total overhead cost reductions could be
associated with integration with MEHC and/or a reduction of service
provisions to affiliates. The only remaining affiliate will be PacifiCorp
Environmental Remediation Company (PERCo).
d. PacifiCorp s Corporate Allocation for Group Expenses (internal
management fee) associated with the change are unknown at this time. It
is possible that some current services\costs under ScottishPower
ownership will either be eliminated or need to be replaced by an alternate
provider.
This allocation of PacifiCorp expenses does not include any
ScottishPower Corporate Allocation for Group Expenses, which will
decrease as outlined in the filed testimony.
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 55
OPUc Data Request
Does PacifiCorp anticipate that it will participate in any money pooling
arrangement with MERC, MEHC affiliates, or PacifiCorp subsidiaries as a result
of this transaction? Please explain.
Response to OPUc Data Request 5S
At this time it is not anticipated that PacifiCorp will participate in any money
pooling arrangements with MEHC or any MEHC affiliates. MEHC's preference
would be for its regulated subsidiaries to not engage in any money pooling
arrangements with affiliates and instead require each entity to establish its own
banking relationships and any required lines of credit.
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 56
OPUC Data Request 56
If the transaction is approved, what is the anticipated savings that will result in the
release of International Assignees (IAs)? Will the positions currently filled by
IAs be terminated or filled through a recruiting/reassignment process? What
the overall effect on full time equivalents (PrEs), including cost savings of the
potential release of IAs?
Response to OPUC Data Request 56
Currently there are three employees on International Assignment with PacifiCorp.
The anticipated cost adjustment for these employees no longer on assignment post
close with MidAmerican is estimated to be $740 000 annually. The positions are
core positions and will require to be filled post close. There will be no FIE
impact as these are current positions and will remain going forward. Therefore
the cost savings would be based on the benefits provided to the lA's which
annually are estimated to be at $740,000. Note that the IA benefit costs
referenced here are not included in Oregon rates; therefore the savings are below-
the-line.
UM-1209/PacifiCorp
August 29 2005
OPUC Data Request 60
OPUC Data Request
Will the $3.7 million per year MEC charges to PacifiCorp for budgeting and
forecasting, human resources, and tax compliance result in an off-setting
reduction of $3.7 million in PacifiCorp s corporate overhead costs since
PacifiCorp currently performs these functions and employs numerous personnel
involved in these functions? Why will PacifiCorp need these services as a
separate business platform with its own management? Please explain.
Response to OPUC Data Request 60
, MEC charges for the functions described are not expected to result in cost
savings for such functions at PacifiCorp. MEC charges for budgeting and
forecasting, human resources, tax compliance, etc., are for coordination efforts on
behalf of MEHC.
UM -1209 /Pacifi Corp
August 29, 2005
OPUC Data Request
OPUC Data Request
In what accounts will PacifiCorp record expenses (legal, accounting,
administration, IT, other) associated with this transaction? Are any "above-the
line-accounts" (i.e. accounts 921 922, 923, etc.) being used to record costs?
Please explain.
Response to OPUc Data Request 61
Transition, integration and separation associated costs will be recorded in above-
the-line A&G accounts such as 920, 921 , 923 etc.
Transaction costs will either be recorded in below-the-line accounts or will
billed to and paid by ScottishPower.
UM -1209/PacifiCorp
August 29, 2005
OPUC Data Request 62
OPUc Data Request 62
Please list PacifiCorp s costs to date for the transaction by cost category, and
amount.
Response to OPUc Data Request
Please see Attachment OPUC 62 on the enclosed CD.
OREGON
UM -1209
MEH CIPPW
OPTIC STAFF DATA REQUEST
ATTACHMENT OPUC 62
ON THE ENCLOSED CD
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 63
OPUC Data Request 63
What are PacifiCorp s anticipated costs (budget or otherwise) for this transaction?
How will PacifiCorp shield customers from the costs associated with this
transaction?
Response to 0 PU C Data Request 63
PacifiCorp s transaction cost projection is based on what was incurred during the
ScottishPower transaction and is estimated to be in the range of $3-5m. It should
be noted that transaction cost estimates can be materially impacted by the length
of the transaction approval process. Transaction costs will be charged below the
line and paid by shareholders.
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 64
OPUC Data Request
For shared services, please provide a table that compares PacifiCorp s current
labor loading with MEHC and MEC's labor loadings. Please include percentages
for each specific labor loading (i., benefits, vacation (PTO), employment taxes
etc. ).
Response to OPUc Data Request 64
Below are labor loadings budgeted for 2005, by entity for MEC and MEHC and
for FY 2006 for PacifiCorp. The MERC rates are generally lower than those of
MEC primarily due to MEHC's relatively higher paYroll per employee.
ACIFICORP
RESPONSE
PacifiCorp
MEHC RESPONSEMEC MEHC
Benefits
FAS 106
FAS 112Vacation 8.81 4.Holiday 4.74 2.Sick leave 4.26 .
PTO (sum of vacation, sick and holiday benefit)
Injuries/damages 1.46Payroll taxes 9.
Incentive pay 13.
39.02%18.58%30.88%
1.38
13.
15.
68 *
*NOTE: PacifiCorp s union employees area no longer offered an
incentive pay program. Union salaries are included in the base pay upon
which these percentages are based.
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 65
OPUC Data Request
Please provide a comparison of the projected Shared Services Costs to PacifiCorp
between the proposed two-factor formula and the three-factor formula used
PacifiCorp for subsidiaries. Please use Exhibit PPU502; Specketer for the cost
companson.
Response to OPUc Data Request 65
See Attachment OPUC 65 on the enclosed CD.
OREGON
UM-1209
MEH CIPPW
OPUC STAFF DATA REQUEST
TT A CHMENT 0 PU C 65
ON THE ENCLOSED
UM-1209/PacifiCorp
August 29, 2005
OPUC Data Request 66
OPUC Data Request 66
Does PacifiCorp anticipate any potential cost savings associated with returning to
a calendar year basis for accounting? Please explain.
Response to OPUc Data Request
No specific savings have been quantified. The value of the change lies principally
in improved comparability of publicly available financial information.
UM -1209/Pacifi Corp
September 1 , 2005
OPUC Data Request 68 MERC
OPUC Data Request 68 MEHC
As a follow-up to Staff Data Request No. 45 , has PacifiCorp or MERC analyzed
the use ofCE Insurance Services Limited (CEISL) or any other captive insurer for
any insurance including insurance not currently available through third-party
insurers (e.g. Overhead Lines)? If so, please provide the potential costs and
savings of using a captive insurer.
MEHC's Response to OPUC Data Request 68
MERC has not analyzed the use of CE Insurance Services Limited or any other
captive insurer for any insurance for PacifiCorp.
UM -1209/Pacifi Corp
September 1 , 2005
OPUC Data Request 68 PPW
OPUC Data Request 68 PPW
As a follow-up to Staff Data Request No. 45, has PacifiCorp or MEHC analyzed
the use ofCE Insurance Services Limited (CEISL) or any other captive insurer for
any insurance including insurance not currently available through third-party
insurers (e.g. Overhead Lines)? If so, please provide the potential costs and
savings of using a captive insurer.
PPW's Response to OPUC Data Request 68
At this time, PacifiCorp has not analyzed the use ofCE Insurance Services
Limited or any other captive insurer.
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 69
OPUC Data Request 69
If a captive insurer is utilized, will PacifiCorp be able to provide Staff a cost-benefit
analysis and/or risk analysis on the use of a captive insurer? Will any analysis be
perfonned with the assistance of a third-party broker (e.g. Marsh)? Please explain.
Response to OPUC Data Request 69
MEHC has not done an analysis of the use of a captive insurer for PacifiCorp
following the closing, and thus does not have a cost/benefit analysis, a risk
analysis or a third-party broker analysis regarding this. If a captive insurer is
utilized, PacifiCorp will file for approval of the affiliated interest transaction and
demonstrate that it is consistent with the Commission s rules. It is unknown at
this time whether any supporting analyses will be perfonned with the assistance
of a third-party broker.
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 70
OPUC Data Request 70
As a follow-up to Staff Data Request No. 58, did MEHC and PacifiCorp calculate
the effect of the approximately $2 million cross-charges ($720 thousand in
FY 2004) to SPUK by PacifiCorp as stated in UI 221? The net cost of the
$11.7 million system-wide charges to PacifiCorp and the $2 million system-wide
charges to SPUK would equal approximately $9.7 million. When considering the
PacifiCorp cross-charge to SPUK, is the projected savings in corporate overhead
actually $0.7 million annually ($9.7 million minus $9 million) or $3.5 million
system-wide over five years ($1.03 million Oregon)? Please explain.
Response to OPUC Data Request 70
This request appears to mistakenly refer to Staff Data Request No. 58 instead of
No. 51. Referring to the response to Request No. 51 , $15 million is the
anticipated amount of SP charges referenced in Mr. Specketer s testimony. It is
not necessary or appropriate to reduce this amount by the $2 million of cross-
charges from PacifiCorp to SP noted above. In Oregon general rate cases
(including the most recent docket UE-170), PacifiCorp reduced its labor costs by
the amount associated with PacifiCorp employees providing services to the
ScottishPower Group. It would be double counting to reduce the amount of the
ScottishPower charges by the amount of these PacifiCorp labor costs because
these costs are elsewhere removed from revenue requirements.
UM-1209/PacifiCorp
September 1 2005
OPUC Data Request 71
OPUC Data Request 71
What specific services will PacifiCorp receive from CalEnergy? What is missing
from PacifiCorp s current organizational structure that requires it to use CalEnergy?
What services are currently being performed in the SPUK contract that will be carried
out by CalEnergy? Please explain.
Response to OPUC Data Request
Due to the repeal of the PUHCA, it is not anticipated that any administrative services
will be provided by CalEnergy. Instead, all such services will be provided by MEHC
or MEC. Please refer to the amended and substituted testimony ofMEHC witness
Specketer.
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 73
OPUC Data Request 73
Please list any subsidiary ofPacifiCorp that will no longer be active if the transaction
with MERC is approved. Please explain any changes in PacifiCorp s subsidiary
organizational structure.
Response to OPUC Data Request 73
No changes in status or organizational structure of any subsidiary ofPacifiCorp
are anticipated at this time.
UM -12 09 /Pacifi Corp
September 1 , 2005
OPUC Data Request 74
OPUC Data Request 74
Is PacifiCorp contemplating structuring an affiliate to undertake business activities of
any Scottish Power affiliates after completion of the transaction? Please explain.
Response to OPUC Data Request 74
No. PacifiCorp has no current plans to structure an affiliate to undertake business
activities of any Scottish Power affiliates.
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 75
OPUC Data Request 75
Is PacifiCorp contemplating structuring an affiliate or subsidiary to undertake any
new business activities or business ventures not presently being perfonned by a
current affiliate or subsidiary after completion of the transaction? Please explain.
Response to OPUC Data Request 75
No. PacifiCorp has no current plans to structure an affiliate or subsidiary to
undertake any new business activities or business ventures not currently being
perfonned by a current affiliate or subsidiary.
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 76
OPUC Data Request 76
As a follow-up to Staff Data Request No. 60, please provide Organization Charts for
PacifiCorp s Budgeting, Forecasting, Human Resources, and Tax divisions. Please
include total Full Time Equivalents (FTE's) for each division and fiscal year 2005
labor costs (include all loadings) for each division.
Response to OPUC Data Request 76
Please refer to Attachment OPUC 76 on the enclosed CD for the most recent
available organizational charts of the BudgetIForecasting, Human Resources
Corporate Tax, and Operating Tax groups.
FY 2005 FTE counts and labor costs for the requested parts of the Company are as
follows:
Or~anization FfE' s FYO5 Labor Costs
Bud getIF orecasting $ 1 722 585
Human Resources $ 6 389,474
Corporate Tax $ 1 747 162
Operating Tax $ 359 585
OREGON
UM-1209
MEHC/PPW
OPUC STAFF DATA REQUEST
ATTACHMENT OPUC
ON THE ENCLOSED CD
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 77
OPUC Data Request 77
Please explain any reductions of personnel in each division that will result from
receiving these services from MEC. For each targeted reduction, please include the
associated cost savings.
Response to OPUC Data Request 77
As noted in our response to Request No. 60, the services to be provided by MEC
pertain to executive management or corporate coordination services, and the day-to-
day management ofPacifiCorp (and other MEHC group companies) will not change.
These services are similar to services provided by Scottish Power today.
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 78
OPUC Data Request 78
Will the Intercompany Administrative Services Agreement (IASA) between
PacifiCorp and MEHC/MEC include the amendments shown on PPL/501; Specketer
pages one and two of nine? Please explain if these amendments will not be included.
Response to OPUC Data Request 78
Yes, the amendment is an integral part of the IASA.
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 79
OPUC Data Request 79
What entities (e.g. PacifiCorp, MEHC, MEC, other) will be party to the IASA?
Response to OPTIC Data Request 79
MEHC and all MEHC subsidiaries, including MEC and PacifiCorp upon completion
of the transaction, are or will be parties to the IASA.
UM -1209/PacifiCorp
September 1, 2005
OPUC Data Request 80
OPUC Data Request 80
Based on historical data concerning the MEHC/MEC IASA, approximately what
percentage of costs are direct charged and what percentage of costs are allocated per
the two-factor formula? Please explain the analysis.
Response to OPUC Data Request 80
Costs reflected on Revised Exhibit 502 are based on MEHC's historical experience.
The estimate is that approximately 70% of the MEHC/MEC costs reflected in
Revised Exhibit 502 will be directly charged and the remainder allocated.
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 81
OPUC Data Request 81
Per the IASA, Section 2., and the travel costs listed in PPL/502; Specketer, will
PacifiCorp perform a "lower of cost or market" analysis" (market being
economy/coach class flights) when determining to use or not to use the corporate
aircraft? Will these records be available to Staff? Please explain.
Response to OPUC Data Request
MERC bills the actual costs of travel incurred by its executives to the entities
benefiting, which in turn account for such costs as above-the-line (recoverable) or
below-the-line (non-recoverable) based on the various regulatory arrangements that
are in place, including an analysis of how such costs relate to "market" if appropriate.
As with any cost charged to PacifiCorp, Staffwill have access to any and all
supporting documentation. MERC doesn t necessarily view the "market" for such
costs as simply the price of a coach fare. In any event, this is an issue properly
resolved in a rate proceeding.
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 82
OPUC Data Request 82
Per the IASA, what is the projected annual amount that PacifiCorp will cross-charge
MEHC, MEC, and other affiliates ofMEHC?
Response to OPUC Data Request 82
No such charges are contemplated at this time, although PacifiCorp is not precluded
from charging MEHC for costs that should be shared by all MEHC group companies
or for services provided specifically to another entity in the MEHC group.
UM 1209/P acifi Corp
September 1 , 2005
OPUC Data Request 86
OPUC Data Request 86
Referring to PPL/ 100 Abel! 9, please provide further infonnation regarding
acquisitions (of regulated utilities) that MERC has undertaken in the energy
industry:
Describe the regulatory review processes that each acquisition went
through.
b. What commitments were made by MEHC or its predecessor in interest?
c. What is the current status of the acquisition commitments? Please
explain the circumstances surrounding any commitments that may still
be outstanding or were not settled to the satisfaction of the regulatory
agencIes.
Response to OPUC Data Request 86
The following is provided with respect to MERC's acquisition of regulated
utilities in the United States:
Northern Natural Gas Company & Kern River Gas Transmission Company
a. Both the Northern and Kern acquisitions were subject to review under the
Rart-Scott-Rodino Act.
b. Neither MEHC nor its predecessor in interest made any commitments to
regulatory bodies in connection with review of the Northern and Kern
acquisitions.
c. N/
MidAmerican Energy Company
a. MEHC's acquisition ofMEC was reviewed by the state commissions of
Iowa, illinois and South Dakota. The acquisition was also subject to
review under the Hart-Scott-Rodino Act, was reviewed by FERC, the
NRC, and certain license transfers were reviewed by the FCC.
b. MEHC entered into the following commitments with the Iowa Utilities
Board ("IUB") in the course of obtaining that regulatory agency
approval of the MEC acquisition. The commitments included:
(1) Investment Grade Rating - MERC affinned that they will
use all commercially reasonable efforts to maintain an
investment grade rating for both MEC as an entity and
particularly for MEC's long-tenD debt.
(2) Capital Structure -
i. In case of a decrease in MEC's common equity level
below 42%, resulting from events within the control
ofMEC, MEC will file with the IUB within a
reasonable time after the occurrence of the event an
application for approval of a reasonable utility
capital structure in light of such event;
UM -1209/PacifiCorp
September 1 , 2005
OPUC Data Request 86
ii. In case of a decrease in MEC's common equity
below 42% as a result of events beyond the control
of MEC, MEC shall file a notice of the decrease in
the common equity with the IUB explaining the
causes of the decrease.
iii. case of a decrease in common equity to a level
below 39% resulting ftom events beyond the
control of MEC, MEC shall file with the IUB an
application for approval of a reasonable utility
capital structure in light of such event or events.
(3) Affiliate Debt - MEHC will not pennit:
i. MEC to guarantee the obligations of any affiliate
ii. MEC to make loans or transfer funds or assets to
affiliated holdings companies or other affiliates
outside the ordinary course of business or without
adequate consideration, provided that the foregoing
commitments shall not apply to:
(a) the disbursement out of retained earnings by
MEC
(b) use by MEC of any securitization or transitional
funding proceeds for the repayment or
retirement of debt or equity securities held by its
parent, provided such use is pursuant to the
authority of any law which has the purpose of
restructuring the electric industry, and/or
(c) any contracts or arrangements between MEC
and any affiliate which is authorized by rule or
approved by the IUB.
(4) Non-recourse financing - MEHC
i. Will continue to use its best efforts to use non-
recourse project financing to the extent necessary to
protect MEC from the debts of its affiliates;
ii. Will not pledge the assets ofMEC beyond the stock
of the direct parent ofMEC that may be pledged
under the financing structure proposed for the
reorganization, provided that the foregoing
commitments shall not apply to
(a) the issuance of debt by MEHC or other
affiliates which does not cause the assets of
MEC to be pledged, and/or
(b) the issuance of secured and unsecured debt by
MEC for its own purposes.
(5) Cash infusions - Consistent with the concept of non-
recourse financing, MEHC has not guaranteed the debt of
MEC. However, MEHC will use its best efforts to provide
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 86
MEC with cash infusions, if necessary, to protect customers
MEC and its investment in MEC.
(6) Affiliate relationship with power plants - MEC will not
purchase capacity or energy from any power plant owned
or operated by MERC or an affiliate ofMEHC without
prior IUB approval.
(7) Omaha office MEHC affirms that it will not charge any
costs of the Omaha office to MEC except to the extent that
the activities conducted from that office are beneficial to
MEC or are appropriately charged to MEC under IUB
rules.
(8) Additional affiliate infonnation - MERC affinns its
commitment and legal obligation to file with the IUB all
infonnation regarding affiliates ofMEC which is required
to be filed by statute or rule.
(9) Reports to the IUB MERC commits to timely file with
the IUB a copy of
i. All regular quarterly and annual reports ofMEHC or
any affiliate to the Securities and Exchange
Commission
ii. All quarterly and annual consolidated financial
statements ofMEHC, any intermediate company
between MEHC and MEC and MEC, and
iii. All quarterly and annual consolidating schedules
for MERC, MEC and any intermediate companies.
(10) Annual revenue sharing calculations - The IUB directed
MEC to file its 1999 revenue sharing calculation two
ways. First, include all costs and savings of the
acquisition and second, exclude all costs and savings of
the acquisition.
CalEnergy, now MERC, entered into the following commitments to the Federal
Energy Regulatory Commission ("FERC") in the course of obtaining that
regulatory agency s approval of the MERC/MEC acquisition. The commitments
included:
(1) That CalEnergy would sell 80% of its 50% share of the
output of an independent power joint venture project both it
and MERC had agreed to construct, for at least four (4)
years, through multi-year contract(s).
(2) That an open season would be extended to eligible MEC
wholesale requirements customers pennitting them to
terminate their contract with MEC in the event MEC filed for
a rate increase, for a period of five (5) years from the
acquisition (1999).
UM-1209/PacifiCorp
September 1 , 2005
OPUC Data Request 86
(3)That MERC would abide by the ICC's policy with respect to
intra-system transactions within the MERC structure, as
newly constituted after the acquisition.
c. MERC is in compliance with all of the foregoing acquisition commitments to
the extent that such commitments have not expired.
UM -1209 /Pacifi Corp
September 8, 2005
OPUC Data Request 87
OPUc Data Request
From 1995 through the present, please provide for PacifiCorp:
a. A matrix that details the Treasury rate, date, and type of security (e.
senior secured, unsecured, etc.) and all-in spreads for each security issued;
b. The corresponding debt ratings from Moody s Investor s Service, Fitch and
Standard & Poor s when each security was issued; andc. Narrative explanations for any changes in ratings or spreads for each
issuance, including copies of analyst reports by the rating agencies for
each upgrade or downgrade.
PPW's Response to OPUc Data Request 87
a. Please see Attachment OPUC 87 a on the enclosed CD that provides this
information.
b. Please see Attachment OPUC 87 a on the enclosed CD.
c. PacifiCorp s ratings were changed by Standard & Poor s (S&P) in August
2004 and by both S&P and Moody s in November, 2001. Copies of the
reports discussing those rating changes are attached as Attachments OPUC
87 c -, 87 c -, and 87 c -3 on the enclosed CD.
Copies of other rating agency reports documenting changes in ratings in
the time frame requested are not presently available.
OREGON
UM -1209
MEH CIPPW
OPUC STAFF DATA REQUEST
ATTACHMENTS OPUC 87 a, and 87 c(I-
ON THE ENCLOSED CD
UM-1209/PacifiCorp
September 8, 2005
OPUC Data Request 88
OPUC Data Request 88
From 1995 through the present, please provide for both MEHC and MEC:
a. A matrix that details the Treasury rate, date, and type of security (e.
senior secured, unsecured, etc.) and all-in spreads for each security issued;
b. The corresponding debt ratings from Moody s Investor s Service, Fitch and
Standard & Poor s when each security was issued; andc. Narrative explanations for any changes in ratings or spreads for each
issuance, including copies of analyst reports by the rating agencies for
each upgrade or downgrade.
MEHC's Response to OPUC Data Request 88
The entity currently known as MEHC did not exist, as presently comprised, until
March 1999 and Berkshire Hathaway made its investment in MEHC in March of
2000. Thus MERC has limited this response to the period 1999 through the
present.
a. See the attachment identified as Attachment OPUC 88 a on the enclosed
CD.
b. See the attachment identified as Attachment OPUC 88 b on the enclosed
CD.
c. There have been no changes in the ratings of these securities by either
Moody s Investors Service or Standard & Poor s since they were issued.
Fitch Ratings, however, has changed the rating they assigned to both
MEHC and MEC.
In the case of MEHC, Fitch Ratings upgraded MEHC at the time of the
Berkshire Hathaway investment, raising the senior unsecured credit rating
from BBB- to BBB. Fitch indicated that the exceptional financial
flexibility of Berkshire Hathaway would lend considerable financial
strength to MEHC. See the attachment identified as Attachment OPUC 88
c -Ion the enclosed CD.
Regarding MEC, Fitch lowered MEC' s senior unsecured credit rating in
January 2002 (from A+ to A) and again in November 2002 (from A to
A-). The rationale given by Fitch was that the credit downgrades were not
reflective of any changes in MEC's credit quality, but rather were a
consequence of a change in Fitch policy regarding the magnitude of the
rating differential between a utility subsidiary and its parent. See the
attachments identified as Attachment OPUC 88 c -2 and Attachment
OPUC 88 c -3 on the enclosed CD.
OREGON
UM -1209
MER CIPPW
OPUC STAFF DATA REQUEST
ATTACHMENTS OPUC 88 a, 88 b, and
88 c(I-
ON THE ENCLOSED CD
UM -1209/PacifiCorp
September 8 2005
OPUC Data Request 89
OPUC Data Request 89
How does MEHC propose to track the debt costs of PacifiCorp s "similarly
situated peers?" Who are the similarly situated peers today and what is the
current incremental cost of debt for those Companies?
MERe's Response to OPUC Data Request 89
At this time it is envisioned that over the five year commitment period, on each
occasion that PacifiCorp makes a long-term debt issuance, an investment banking
firm familiar with the public utility debt issuance market would be requested to
compile examples of comparable debt issuances by other public utilities that have
similar credit ratings (excluding similarly rated MEHC public utilities).
An example of similarly situated peers and their incremental cost of debt is
contained in the attachment identified as Attachment OPUC 89 on the enclosed
CD.
OREGON
UM -1209
MEH CIPPW
OPUC STAFF DATA REQUEST
TT A CHMENT 0 PU C 89
ON THE ENCLOSED CD
, UM-1209/PacifiCorp
September 16, 2005
OPUC Data Request 92
OPUC Data Request 92
As a follow-up to Staff Data Request No. 45, does PacifiCorp intend to obtain
replacement insurance for SPI? If so:
i. Has PacifiCorp perfonned an analysis to detennine the cost benefit of
the replacement insurance?
ii. How does PacifiCorp s analysis compare to Staffs property insurance
analysis listed on Table 3 of Staffs VI 233 memorandum dated
November 4, 2004 (Commission Order No. 04- 737)?
iii. How does PacifiCorp s analysis compare to Staffs liability insurance
analysis listed on Table 2 of Staffs VI 233(1) memorandum dated
March 4, 2005 (Commission Order No. 05-146)?
PPW's Response to OPUC Data Request 92
The parties are still in the early stages of the transaction and no formal discussions
have taken place to date.
11.
111.
This request is not applicable.
This request is not applicable.
UM-1209/PacifiCorp
September 16, 2005
OPUC Data Request 93 MERC
OPUC Data Request 93 MERC
Based on PacifiCorp s insurance analysis, please provide a cost comparison of
total insurance costs between current costs and post-transaction costs using the
following table? Row do these costs compare to what was authorized in rates in
the UE 170 Stipulation on Non-labor A&G costs?
Cost Fiscal Year 2005 Under MERC
Property Insurance Premiums (include
SP!)
Property - Uninsured Loss
Liability Insurance Premiums (include
SP!)
O/H Line Insurance Premiums (include
SP!)
O/H Line - Uninsured Loss
Liability - Uninsured Losses
Workers Compensation Premiums
Workers Compensation - Uninsured
Losses
Other Risk Management Expenses
Mining - Premiums
Minin~ - Uninsured Losses
MERC's Response to OPUC Data Request 93 MERC
Given that the parties are still in the very early stages of the transaction, there has
been no identification, yet, ofprojected insurance cost after completion of the
acquisition.
UM-1209/PacifiCorp
September 16, 2005
OPUC Data Request 93 PPW
OPUC Data Request 93 PPW
Based on PacifiCorp s insurance analysis, please provide a cost comparison of
total insurance costs between current costs and post-transaction costs using the
following table? How do these costs compare to what was authorized in rates in
the DE 170 Stipulation on Non-labor A&G costs?
Cost Fiscal Year 2005 Under MERC
Property Insurance Premiums (include
SP!)
Property - Uninsured Loss
Liability Insurance Premiums (include
SP!)
om Line Insurance Premiums (include
SP!)
om Line - Uninsured Loss
Liability - Uninsured Losses
Workers Compensation Premiums
Workers Compensation - Uninsured
Losses
Other Risk Mana~ement Expenses
Mining - Premiums
Mining - Uninsured Losses
PPW's Response to OPUC Data Request 93 PPW
PacifiCorp s costs were as follows:
UM-1209/PacifiCorp
September 16, 2005
OPUC Data Request 93 PPW
Cost Fiscal Year 2005 Under MEHC*
Property Insurance Premiums (include $11,594 668
SPI)Domoch (DIlL) was not
in place during FY 05
Property - Uninsured Loss $10,000 000
Liability Insurance Premiums (include $7,063,339
SPI)Domoch (DIlL) was not
in place during FY 05
OIR Line Insurance Premiums (include N/A
SPI)Domoch (DIlL) was not
in place during FY 05
OIR Line - Uninsured Loss Included in Property -
Uninsured Loss (above)
Liability - Uninsured Losses 249,863
Workers Compensation Prenuums $2,272 682
Workers Compensation - Uninsured $1,459,480
Losses
Other Risk Management Expenses $861,486
Mining - Premiums (Workers 080,217
Compensation)
Mining - Uninsured Losses (Workers $578,805
Compensation)
* Regarding post-transaction costs, see MERC's response to this request.
In OPUC Docket No. UE 170, PacifiCorp requested recovery of $45.3 million for
Property & Liability Insurance Premiums and Uninsured Losses (See PPL Exhibit 801
page 4.17.1. This amount is on a total company basis.) In the First Partial Stipulation in
that Docket, the Parties agreed to a decrease of $6.123 million in the Company s filed
revenue requirement related to unspecified non-labor administrative and general costs.
The Stipulation is silent on how much of this decrease is related to insurance.
UM -1209/PacifiCorp
September 16, 2005
OPUC Data Request 96
OPUC Data Request 96
As a follow-up to both Staff Data Request No. 60 and a discussion during the
August 29, 2005 Workshop, please explain how the tax services provided by
MEC would be a "benefit" due to I;l;corporate overhead" cost savings since the
UE 170 Stipulation concerning Non-labor A&G costs already contains
approximately $3.04 million in payments to Price Waterhouse Coopers (PwC)
(please see PacifiCorp s UE 170 response to Staff Data Request No. 254)?
a. Does PacifiCorp expect that payments to MEC will replace payments to
PwC?
b. If so, how can there be any savings to customers since this amount is
already in rates and was not provided by Scottish Power?
MEHC's Response to OPUC Data Request 96
a. Yes. We understand that approximately $980 000 of the $3.04 million
projected billings from PwC for FY 2006 is for preparation of federal and
state income tax returns of PacifiCorp Holdings Inc. and subsidiaries.
That portion of these tax services pertaining to utility operations is
included in the MEC shared service cost estimate ofMEHC witness
Specketer.
b. To present a conservative estimate of corporate overhead costs savings
MEHC has included the costs of the MEC tax return preparation services
in the its shared services cost projections even though the comparable
PwC costs do not originate from ScottishPower today. MEC shared
services billings for tax preparation services will likely be offset by a
reduction in future payments to PwC by PacifiCorp. However, since the
an-angement with PwC is effective through FY 2006 and MEHC has not
evaluated alternatives to this agreement, MEHC chose not to reflect the
potential savings related to tax preparation services in this proceeding.
However, all savings properly assigned or allocated to PacifiCorp
resulting from this transaction, including savings on tax preparation or tax
advisory services, will be appropriately reflected in PacifiCorp s next
general rate proceeding.
UM-1209/PacifiCorp
September 16, 2005
OPUC Data Request 97
OPUC Data Request 97
As a follow-up to Staff Data Request No. 61 , why would transition, integration
and separation costs be recorded in regulatory accounts since customers would
not have to bear these costs absent the transaction? Please explain.
PPW's Response to OPUC Data Request 97
Consistent with PacifiCorp s prior experience in the ScottishPower transaction
PacifiCorp would request that the Commission consider inclusion of these types
of costs in future rate proceedings to the extent that the resultant benefits
outweighed the costs.
UM-1209/PacifiCorp
September 16, 2005
OPUC Data Request 101
OPUC Data Request 101
Please provide copies of any analyses in the possession of PacifiCorp or
MidAmerican related to the effect of the proposed transaction on future coal costs
of PacifiCorp or MidAmerican.
Response to OPUC Data Request 101
Neither PacifiCorp nor MidAmerican possess any analyses related to the effect of
the proposed transaction on future coal costs of PacifiCorp or MidAmerican.
UM -1209 /Pacifi Corp
September 16, 2005
OPUC Data Request 102 MERC
OPUC Data Request 102 MEHC
Please identify the mines that provided coal to both PacifiCorp and MidAmerican
thermal plants in 2004 or 2005 and specify the type of contract(s) (e., spot or
long term) related to the purchase(s). If the transaction occurs, could PacifiCorp
reassign its coal deliveries to MidAmerican or vice versa?
MEHC's Response to OPUC Data Request 102
Based on summaries PacifiCorp has provided, as well as public information
MidAmerican believes the only mine providing coal to both PacifiCorp and
MidAmerican in 2004 and 2005 is Kennecott's Cordero Rojo Complex in the
Powder River Basin (PRB), in Wyoming. MidAmerican has both spot and multi-
year contracts with Kennecott, but these contracts cannot be assigned without the
written consent of Kennecott.
UM-1209/PacifiCorp
September 16, 2005
OPUC Data Request 102 PPW
OPUC Data Request 102 PPW
Please identify the mines that provided coal to both PacifiCorp and MidAmerican
thermal plants in 2004 or 2005 and specify the type of contract(s) (e., spot or
long term) related to the purchase(s). If the transaction occurs, could PacifiCorp
reassign its coal deliveries to MidAmerican or vice versa?
PPW's Response to OPUC Data Request 102
The Cordero Rojo Mine Complex provided coal to both PacifiCorp and
MidAmerican thermal plants in 2004 and 2005. PacifiCorp s three-year contract
for coal deliveries to the Dave Johnston plant from Kennecott Energy s Cordero
Rojo Complex terminates December 31 , 2005. Therefore, there is no anticipated
impact in terms of reassigning coal deliveries under this contract.
UM-1209/PacifiCorp
September 16, 2005
OPUC Data Request 103
OPUC Data Request 103
If the transaction occurs, what would be the effect on future coal costs or coal
transportation costs?
Response to OPUC Data Request 103
Neither MidAmerican nor PacifiCorp has a projection of the effect on future coal
costs or coal transportation costs resulting from this transaction.
UM -1209 /Pacifi Corp
September 16, 2005
OPUC Data Request 104
OPUC Data Request 104
Please refer to the attached testimony exhibit of Mr. MacRitchie in Docket
UM 918 that shows a "Comparison of Non-Production Cost/Customer for US
Utilities (1996)". Please provide a similar comparison using 2004 data. Please
discuss the relative positions of PacifiCorp and MidAmerican Energy Company
and the implications for cost changes at PacifiCorp as a result of the transaction.
MEHc's Response to OPUC Data Request 104
MEHC does not possess the requested analysis and could not reasonably produce
it. In an attempt to be responsive to this data request, however, MEHC has
examined FERC Ponn 1 data for PacifiCorp and MEC with the following results:
Using FERC Fonn 1 infonnation, MEHC was not able to precisely match the
numbers for PacifiCorp or MEC to the information supplied in the 1996 exhibit
but did calculate amounts that were relatively similar to those provided in 1996 by
subtracting production O&M from total O&M. This approach yielded the
following values, for 1996: $319.45/customer for PacifiCorp, rather than the
$300. 13/customer provided in the above-referenced exhibit. The same approach
yielded a value of $270. 13/customer for MEC, rather than the $247.95/customer
provided in the above-referenced exhibit. Comparable values for 2004 would be
$433.23/customer for PacifiCorp and $350.87/customer for MEC.
MEHC does not believe that this comparison materially assists the Commission in
determining whether this proposed transaction is in the public interest.
Differences in non-production costs may exist between utilities for a number of
reasons that have nothing to do with relative efficiency of operation. These
differences frequently exist because of factors such as differences in service
territory terrain, population densities, customer mix and proximity of generation
to load centers, for example. MEHC anticipates a much more detailed review of
PacifiCorp s costs will be required to determine to what extent post-transaction
cost reductions will be possible.
UM-1209/PacifiCorp
September 23, 2005
OPUC Data Request 108
OPUC Data Request 108
As a follow-up to PacifiCorp s response to Staff Data Request No. 70:
a. Since PacifiCorp will no longer be receiving payments for labor from
ScottishPower, and since PacifiCorp does not intend to make labor
reductions based on the MEHC transaction, and since no PacifiCorp cross-
charges to MEHC are contemplated at this time (PacifiCorp s response to
Staff Data Request No. 82), would customers now have to bear higher
A&G overhead costs since ScottishPower will no longer absorb a portion
of these costs? Please explain.
b. Is this also true for labor and other services provided to PacifiCorp
Financial Services and PacifiCorp Group Holdings that will no longer be
affiliates of PacifiCorp? Please explain.
c. Are there any new business operations or reduction in expenses that will
replace the lost labor and other service payments from ScottishPower,
PacifiCorp Financial Services, and PacifiCorp Group Holdings? Please
explain.
MERC's Response to OPUC Data Request 108
a. The $15 million net ScottishPower cross-charge number cited by MEHC
witness Specketer at pp. 9-10, lines 23-24 and 1-4 of his testimony already
takes into consideration the labor charges that PacifiCorp charged back to
ScottishPower. The $9 million annual cap on corporate overhead charges
MEHC has committed to for the flfst five years following the transaction is
clearly less than the $15 million net charges from ScottishPower.
aggregate, as a result of the transaction, PacifiCorp will bear lower costs under
fv1EHC ownership than under ScottishPower ownership.
b. See the response to OPUC Data Request 53 c. Charges to these two entities
are small, only $400,000 per year.
c. It is not possible to predict whether any new business operations or other
reductions in expenses will be implemented. However, MEHC believes that,
in aggregate, corporate overhead costs borne by PacifiCorp will be reduced as
a result of this transaction
UM-1209 /Pacifi Corp
September 23,2005
OPUC Data Request 109
OPUC Data Request 109
In the same format provided in PacifiCorp s response to Staff Data Request No.
76, please provide total Full Time Equivalents (FfE's) and fiscal year 2005 labor
costs (include all loadings) for Facilities Services, CBS Accounting, IT Services
and PC Services.
PPW's Response to OPUC Data Request 109
PacifiCorp does not have specific departments called Facilities Services, CBS
Accounting, IT Services, and PC Services; typically these are terms that are used
when describing service pricing - the process of charging our affiliates for
services provided by PacifiCorp.
The departments provided below are not a perfect match for the terms listed
above; however they do closely align to the type of costs included in the above
mentioned service pricing:
Oraanization
Real Estate Management
CBS Finance
FTE'
337
FYO5 labor Costs
196 238
105,705
$43 304 628
UM-1209/PacifiCorp
September 23 , 2005
OPUC Data Request 110
OPUC Data Request 110
Are there any planned fiscal year 2006 reductions for Facilities Services, CBS
Accounting, IT Services, and PC Services or for Budget/Forecasting, Human
Resources, Corporate Tax, and Operating Tax groups? Please explain.
PPW's Response to OPUC Data Request 110
There are no fiscal year 2006 regulated cost reductions planned in the areas
referenced in this request as a result of the MEHC transaction.
Prior to the MEHC transaction the company initiated a "re-basing" project with
the purpose of identifying ways to make efficiencies and mitigate increases in
controllable costs going folWard. This task was accomplished by a combination of
reorganizing and realigning business activities and reducing cost increases. This
project targeted only non-operational areas of the business. As a consequence, the
areas referenced in this request may be affected by this "re-basing" project.
UM-1209/PacifiCorp
September 23 2005
OPUC Data Request 111 MERC
OPUC Data Request 111 MERe
Concerning the transfer of personnel to Utah:
a. Please provide relevant documentation which demonstrates that
PacifiCorp has previously discussed with the Oregon Commission or
Commission Staff, prior to the MEHC transaction, the possible large-scale
shifting of personnel from Portland to Salt Lake City.
b. Approximately how many people will be transferred? (Please see the
September 7, 2005, Oregonian article titled PacifiCorp to Shift Staff
Utah"
c. Please provide the titles of corporate and senior management that will be
transferred to Utah. How many corporate and senior management
personnel are planned to be transferred to Utah? Please explain.
d. Given the assurances by MEHC and MEC to Utah to have a balanced
level of staffing between Portland and Salt Lake City, about how many
more Portland personnel would need to be transferred to Utah to meet this
commitment?
e. What is the average total annual compensation for personnel currently
located in Portland? Given this total compensation, provide estimates of
annual local and state taxes that are paid on average per employee.
f. What is the estimated re-Iocation cost of these personnel and in which
accounts would these costs be recorded? Please explain the analysis
performed to determine this amount.
g. Please provide the number and titles of corporate and senior management
that will be maintained in Portland.
h. Concerning the positions that will be transferred to Utah, what upper level
subordinate positions will stay in Portland? Will these personnel be able
to make decisions regarding interpretation of customer service policies
and tariffs pertaining to Oregon customers?
1. What is the estimated decrease in Portland building lease costs that will
result from moving personnel out of Portland? When do current lease
contracts expire? Will PacifiCorp need to sub-let any space to off-set
costs of vacancies?
j.
Please explain how the loss of state income tax revenue, loss of local
purchasing dollars, and loss of community involvement for the personnel
being transferred from Oregon is a benefit to the Oregon public.k. Please explain how the loss of local presence of corporate and senior
management is a benefit to Oregon customers.
MERe's Response to OPUC Data Request 111
b. The September 7, 2005, Oregonian article titled PacifiCorp to Shift Staff
to Utah" is a reporter s selective and speculative supposition regarding
future MEHC actions, ba~.:d upon remarks made by Mr. Abel in Utah that
UM-1209/PacifiCorp
September 23,2005
OPUC Data Request 111 MEHC
were taken out-of-context. The article is not a factual report of any
MERC plans regarding staff changes because MEHC has not made
definitive plans regarding how it will increase the number of corporate and
senior management positions in Utah, other than what is already included
in Mr. Abel's testimony. The impact, if any, on Oregon staffing levels
will depend upon facts currently unknown (e., executives who may
choose to leave PacifiCorp after the close of the transaction) and whether
it is determined to be efficient and appropriate to locate an executive
position and associated staffing in another state.
c. See the response to "
d. See the response to "
f. See the response to "
g. See the response to "
h. See the response to "
i. See the response to "
J. See the response to "
k. See the response to "
Regarding parts a and e, please see PPW's response to this request.
UM-1209/PacifiCorp
September 23 2005
OPUC Data Request 111 PPW
OPUC Data Request 111 PPW
Concerning the transfer of personnel to Utah:
, '
a. Please provide relevant documentation which demonstrates that
PacifiCorp has previously discussed with the Oregon Commission or
Commission Staff, prior to the MEHC transaction, the possible large-scale
shifting of personnel from Portland to Salt Lake City.
b. Approximately how many people will be transferred? (Please see the
September 7 2005, Oregonian article titled PacifiCorp to Shift Staff
Utah"
c. Please provide the titles of corporate and senior management that will be
transferred to Utah. How many corporate and senior management
personnel are planned to be transferred to Utah? Please explain.
d. Given the assurances by MEHC and MEC to Utah to have a balanced
level of staffing between Portland and Salt Lake City, about how many
more Portland personnel would need to be transferred to Utah to meet this
commitment?
e. What is the average total annual compensation for personnel currently
located in Portland? Given this total compensation, provide estimates of
annual local and state taxes that are paid on average per employee.
f. What is the estimated re-Iocation cost of these personnel and in which
accounts would these costs be recorded? Please explain the analysis
performed to determine this amount.
g.
Please provide the number and titles of corporate and senior management
that will be maintained in Portland.
h. Concerning the positions that will be transferred to Utah, what upper level
subordinate positions will stay in Portland? Will these personnel be able
to make decisions regarding interpretation of customer service policies
and tariffs pertaining to Oregon customers?
1. What is the estimated decrease in Portland building lease costs that will
result from moving personnel out of Portland? When do current lease
contracts expire? Will PacifiCorp need to sub-let any space to off-set
costs of vacancies?
J. Please explain how the loss of state income tax revenue, loss of local
purchasing dollars, and loss of community involvement for the personnel
being transferred from Oregon is a benefit to the Oregon public.
k. Please explain how the loss of local presence of corporate and senior
management is a benefit to Oregon customers.
PPW's Response to OPUC Data Request 111
a. PacifiCorp has no documents discussing large-scale shifts of personnel
from Portland to Salt Lake City.
UM -1209/PacifiCorp
September 23,2005
OPUC Data Request 111 PPW
e. The average total annual compensation (base plus incentive) for personnel
currently located in Portland is $85 945. The average annual taxes paid
per employee is $637 for local taxes and $6,132 for state taxes.
See also MEHC's response to this request.
UM-1209/PacifiCorp
September 23,2005
OPUC Data Request 112
OPUC Data Request 112
Please provide the expiration dates for all union contracts. What percentage of
PacifiCorp s employees is unionized?
PPW's Response to OPUC Data Request 112
The percentage of PacifiCorp s employees that are unionized is estimated at 58%
as of 2005
Contract Expiration:
Mining - Bridger (November 25,2007)
Mining - Energy West (January 2, 2008)
Local 125 IBEW (January 25, 2009)
Local 57 Power Delivery (January 25 2006)
Local 57 Generation (May 25 , 2006)
Local 57 Combustion (May 25, 2007)
Local 197 UWUA (May 25 2007)
Local 659 IBEW (April 25 , 2007)
Local 127 UWUA (September 25 2007)
Local 57 Laramie (June 25 2006)
UM-1209/PacifiCorp
September 23, 2005
OPUC Data Request 113
OPUC Data Request 113
Please provide a listing, including expiration dates, for MEC's current union
contracts. What percentage of MEC's employees are unionized?
Response to OPUC Data Request 113
MidAmerican Energy Company
Current Collective Bargaining Agreements
. f D t.2reemen xplra Ion
1. MidAmerican Energy March 1, 2006
Company and International
Brotherhood of Electrical
Workers, Locals 109 & 499
2. MidAmerican Energy September 30, 2007
Company and United Steel
Paper and Forestry, Rubber
Manufacturing, Energy, Allied
Industrial and Service Workers
International Union, Local 738
3. MidAmerican Energy February 28, 2008
Company and Local Union 125
United Association of
Journeymen and Apprentices of
the Plumbing and Pipefitting
Industry of the United States and
Canada
2. The percentage ofMEC employees who are unionized is 46.8%.