20050411Application.pdf

BRUCE N. WILLIAMS
Treasurer
PACIFICORP
825 E. Multnomah, Suite 1900
Portland, Oregon 97232-4116
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April 8, 2005 it'
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Idaho Public Utility Commission
Statehouse
472 West Washington Street
Boise, ill 83720
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ATTN:Ms. Jean Jewell
Commission Secretary
Re: Case No. P AC-02-In the Matter of the Application ofPACIFICORP for
authority to issue up to 50 000 000 shares of its Common
Stock to its Parent
Dear Commissioners:
On October 30, 2002, the Commission issued its Order No. 29144 in Case No. P AC-02-
authorizing PacifiCorp (Company) to issue, from time to time and for cash, up to 50 000 000
shares of the Company s Common Stock to PacifiCorp Holdings, Inc., a Delaware corporation
and the Company s immediate corporate parent (Parent).
To date, of the 50 000 000 shares of Company Common Stock originally authorized under qrder
No. 29144, the Company has issued 14 851 485 shares to its Parent. The Company is now .,
requesting that the 35 148 515 shares of remaining authority granted in Case No. PAC-02-4 be
increased by 14 851,485 shares, such that an aggregate of 50 000 000 shares of Company
Common Stock (Shares) would be authorized for future issuances to the Parent. The other terms
and conditions of the authorities specified in Order No. 29144 would not be changed.
The Company believes that the proposed sale and issuance of the Shares are reasonably required
to maintain a proper capitalization ratio, to maintain or improve the Company s access to capital
on reasonable terms and to enable the Company to acquire, construct, improve and maintain
sufficient utility facilities to serve its customers adequately and reliably at a reasonable cost.
The Company is submitting a separate request for authority to (1) issue and sell or exchange, in
one or more public offerings or private placements, fixed or floating rate debt in the aggregate
principal amount not to exceed $1 000 000 000 or, if such debt is issued at an original issue
discount, such greater amount as shall result in an aggregate offering price of not more than
000 000 000 (or its equivalent amount in, or based upon, foreign currencies determined at the
time of issue), (2) enter into letter of credit arrangements with one or more banks or such other
agreements or arrangements as may be necessary or appropriate, from time to time, to provide
additional credit support for the payment of the principal of, interest on and premium (if any) on
such debt, (3) enter into one or more currency swaps, and (4) contribute or sell additional debt to
special purpose entities (SPE) in an amount based on the common securities of the SPE
(collectively, Debt).
Portlnd2-4492853.90017507-00036
PACIFIC POWER UTAH POWER
The enclosed Exhibit A (Balance Sheet) and Exhibit B (Income Statement) contain pro forma
calculations of issuances of (i) all the Shares and (ii) all of the Debt, in each case based on the
Company s unaudited financial statements for the quarter ended December 31 , 2004 and
assuming that all the Shares and Debt were issued and sold in their entirety at the same time.
These calculations assume a per Share price equal to $10., the book value of the Company
Common Stock at November 30, 2004. Balances at December 31 , 2004 include the 14 851,485
shares previously issued by the Company to its Parent. Because the exact amount of the
issuances will vary with book value, and because the Company will be under no obligation to
issue all or any portion of Shares, it is not possible to set forth precise capitalization ratios on a
pro forma basis at future dates.
Prayer
The Company respectfully requests that the Commission enter its order in Case No.
P AC- E-02-, effective upon issuance, granting authority to the Company for the proposed
issuance and sale to the Company s Parent, from time to time, of up to 14 851,485 additional
shares of the Company s Common Stock. Such shares would be in addition to the remaining
authority under Order No. 29144 in this docket with respect to 35 148 515 shares. The Company
requests that such authorization remain in effect until all the Shares have been issued.
The Company respectfully requests that the Commission issue its order on or before
May 31 , 2005, in lieu of within 30 days after the filing of the enclosed application as required by
Idaho Code ~61-904. The Company respectfully requests twenty certified copies of any order
issued in this matter. Notice of this Application will be published within seven days as required
by the Commission s Rules of Procedure.
Your attention to this matter is appreciated.
Sincerely,
Bruce N. Williams
Treasurer
Enclosures:Proposed Form of Order (1 original and 4 copies)
Diskette (containing the proposed Form of Order)
Application Fee ($1 000) (check enclosed)
Exhibit A (Balance Sheet, actual and pro forma, dated December 31 , 2004)
Exhibit B (Income Statement, actual and pro forma, for the 12 months ended
December 31 , 2004)
Exhibit C (Resolutions of the Board of Directors authorizing the proposed
issuances)
Portlnd2-4492853.9 0017507 -00036
EXHIBIT A
PACIFICORP
UNCONSOLIDATED BALANCE SHEET
DECEMBER 31, 2004
ASSETS AND OTHER DEBITS TOTAL CORPORATION PROPOSED FINANCING TOTAL PROFORMA
UTILITY PLANT
ELECTRIC PLANT IN SERVICE (101)13,667,763,284.667 763,284.
PROPERTY UNDER CAPITAL LEASES (101.24,296,280.296 280.
ELECTRIC PLANT PURCHASED OR SOLD (102)213,554.213,554.
EXPERIMENTAL ELECTRIC PLANT - UNCLASSIFIED (103)
ELECTRIC PLANT HELD FOR FUTURE USE (105)346 101.346,101.
COMPLETED CONSTRUCTION NOT CLASSIFIED (106)20,421,076.20,421 076.
CONSTRUCTION WORK IN PROGRESS - ELECTRIC (107)439,891,116.439,891,116.
ELECTRIC PLANT ACQUISITION ADJUSTMENTS (114)157,193,779.157,193,779.
OTHER UTILITY PLANT (118)
NUCLEAR FUEL (120.120.
TOTAL UTILITY PLANT 14,311,125,193.311,125 193.
ACCUM PROV FOR DEPR OF ELECT PLANT IN SERVICE (108)5,463,468,995.5,463,468,995.
ACCUM PROV FOR AMORT OF ELECT PLANT IN SERVICE (111)327,939,832.45 327,939 832.45
ACCUM PROV FOR ASSET ACQUISITION ADJUSTMENT (115)68,930,108.930,108.
ACCUM PROV FOR DEPR OF OTHER UTILITY PLANT (119)
ACCUM PROV FOR AMORT OF NUCLEAR FUEL ASSEMB (120.
UTILITY PLANT - NET 8,450,786,257.48 8,450 786,257.48
NON UTILITY PROPERTY AND INVESTMENTS
NONUTILITY PROPERTY (121)217,225.217 225.
ACCUM PROV FOR DEPRIAMORT OF NONUTILITY PROP (122)1,491,696.1,491,696.
INVESTMENT IN ACCOCIATED COMPANIES (123)15,111,723.111,723.
INVESTMENT IN SUBSIDIARY COMPANIES (123.69,298,918.69,298 918.
OTHER INVESTMENTS (124)85,964,599.85,964,599.
OTHER SPECIAL FUNDS (128)10,833.025.833 025.
TOTAL NON UTILITY PROPERTY & INVESTMENTS 188,933,796.188 933,796.
CURRENT AND ACCRUED ASSETS
CASH (131)336,089.336 089.
SPECIAL DEPOSITS (132-134)15.584,319.15,584,319.
WORKING FUNDS (135)(82,097.55\(82,097.
TEMPORARY CASH INVESTMENTS (136)854,734.216,412,500.226,267 234.
NOTES RECEIVABLE (141)425,229.425 229.
CUSTOMER ACCOUNTS RECEIVABLE (142)290,118,181.290,118,181.
OTHER ACCOUNTS RECEIVABLE (143)10,751,889.10,751,889.
ACCUMULATED PROV FOR UNCOLLECTIBLE ACCOUNTS (144)(18,937,480.40)(18,937,480.40\
NOTES RECEIVABLE FROM ASSOCIATED COMPANIES (145)
ACCOUNTS RECEIVABLE FROM ASSOCIATED COMPANIES (146)514,160.514,160.
FUEL STOCK (151-152)48,450,942.48,450,942.
MATERIALS AND SUPPLIES (154-163)105,246,617.105,246,617.
PREPAYMENTS (165)60,836,559.60,836 559.
INTEREST AND DIVIDENDS RECEIVABLE (171)58,069.069.
RENTS RECEIVABLE (172)441,926.6,441 926.
ACCRUED UTILITY REVENUES (173)158,191,000.158,191,000.
MISCELLANEOUS CURRENT AND ACCRUED ASSETS (174)(282,312.54)(282,312.
DERIVATIVE INSTRUMENT ASSETS (175)367,444,527.367,444,527.
TOTAL CURRENT AND ACCRUED ASSETS 068,952,355.216,412,500.285,364,855.
DEFERRED DEBITS
UNAMORTIZED DEBT EXPENSE (181)306,626.500,000.33,806 626.
EXTRAORDINARY PROPERTY LOSSES (182.
UNRECOVERED PLANT AND REGULATORY STUDY COSTS (182.16,818,879.818,879.
OTHER REGULATORY ASSETS (182.191,062.739.191,062,739.
PRELIMINARY SURVEY & INVESTIGATION CHARGES (183)501,866.501,866.
CLEARING ACCOUNTS (184)10,468.10,468.
TEMPORARY FACILITIES (185)59,110.59,110.
MISCELLANEOUS DEFERRED DEBITS (186)78,628,533.78,628,533.
RESEARCH DEVELOPMENT DEMONSTRATION EXPENDITURES 1188)
UNAMORTIZED LOSS ON REACQUIRED DEBT (189)36,402.629.36,402,629.
ACCUMULATED DEFERRED INCOME TAXES (190)767 958,463.767,958,463.
TOTAL DEFERRED DEBITS 117,749,318.500,000.127,249,318.46
TOTAL ASSETS AND OTHER DEBITS 11,826,421 728.225 912,500.052,334,228.
EXHIBIT A
PAGE 1 OF 2
EXHIBIT B
PACIFICORP
UNCONSOLIDATED STATEMENT OF INCOME
12 MONTHS ENDED DECEMBER 31, 2004
TOTAL CORPORATION PROPOSED FINANCING TOTAL PROFORMA
UTILITY OPERATING INCOME
OPERATING REVENUES 989,584 939.989,584,939.
OPERATION AND MAINTENANCE EXPENSE
OPERATION 580,818,239.580,818,239.
MAINTENANCE 314,659,283.40 314,659,283.40
TOTAL OPERATION AND MAINTENANCE EXPENSE 895,477,523.895,477 523.
DEPRECIATION 360,452 077.360,452 077 .
DEPRECIATION EXPENSE FOR ASSET RETIREMENT COSTS
AMORTIZATION 64,969,244.969,244.
TAXES OTHER THAN INCOME TAXES 92,915,793.915,793.
INCOME TAXES -- FEDERAL 45,160,095.(8,255,625.00)36,904,470.46
-- STATE (12,313,741.73)(717,060.00)(13,030,801.73)
PROVISION FOR DEFERRED INCOME TAXES 90,595,061.90,595,061.
INVESTMENT TAX CREDIT ADJUSTMENTS -- NET (5,854,860.00)(5,854,860.00)
GAINS FROM DISPOSITION OF UTILITY PLANT
LOSSES FROM DISPOSITION OF UTILITY PLANT
ACCRETION EXPENSE
GAINS FROM DISPOSITION OF ALLOWANCES 908,181.908,181.
OTHER UTILITY OPERATING INCOME - STEAM HTG
UTILITY OPERATING INCOME 459,091 927.972 685.468,064,612.46
OTHER INCOME AND DEDUCTIONS
OTHER INCOME
INCOME FROM MERCHANDISING 257,134.257,134.
INCOME FROM NONUTILITY OPERATIONS 602,858.602,858.
NONOPERATING RENTAL INCOME 56,009.46 56,009.46
EQUITY IN EARNINGS OF ELECTRIC SUBSIDIARIES 813,948.41 813,948.41
EQUITY IN EARNINGS OF NONELECTRIC SUBSIDIARIES
INTEREST AND DIVIDEND INCOME 853,795.38,112,500.43,966,295.
ALLOW FOR FUNDS USED DURING CONSTRUCTION 163,409.163,409.
MISCELLANEOUS NONOPERATING INCOME 88,025,571.88,025,571.
GAIN ON DISPOSITION OF PROPERTY 929 668.929,668.
TOTAL OTHER INCOME 105,702,395.38,112,500.143,814,895.
OTHER INCOME DEDUCTIONS
LOSS ON DISPOSITION OF PROPERTY 744 690.744 690.
MISCELLANEOUS AMORTIZATION 339,255.339,255.
MISCELLANEOUS INCOME DEDUCTIONS 72,659,251.72,659,251.
TOTAL OTHER INCOME DEDUCTIONS 73,743,198.73,743,198.
TAXES APPLIC TO OTHER INCOME & DEDUCTIONS
TAXES OTHER THAN INCOME TAXES 193,371.193,371.
INCOME TAXES 218,644.218,644.
INVESTMENT TAX CREDITS (2,065,260.(2,065,260.
TOTAL TAXES APPLIC TO OTHER INC & DED 346,755.346,755.
NET OTHER INCOME AND DEDUCTIONS 26,612,442.38,112,500.724,942.
INCOME BEFORE INTEREST CHARGES 485,704,369.47,085,185.532,789,554.
INTEREST CHARGES
INTEREST ON BONDS 229,563,697.200,000.290,763,697.
AMORTIZATION OF DEBT DISCOUNT AND EXPENSE 4,404,846.500,000.904 846.
AMORTIZATION OF LOSS ON REACQUIRED DEBT 291,371.291,371.
AMORTIZATION OF PREMIUM ON DEBT 718.(2,718.
AMORTIZATION OF GAIN ON REACQUIRED DEBT (85,451.(85,451.
INTEREST ON DEBT TO ASSOCIATED COMPANIES 426,708.426,708.
OTHER INTEREST EXPENSE 20,945,009.20,945,009.
ALLOW FOR BRD FUNDS USED DURING CONSTR (6,767,217.40\(6,767,217.40
NET INTEREST CHARGES 255,776,247.61,700,000.317,476,247.
INCOME BEFORE EXTRAORD. ITEMS 229,928,122.(14 614 815.215,313,307.
EXTRAORDINARY ITEMS - NET OF INCOME TAX
INCOME TAX ON CUM. EFFECT OF CHANGE IN ACCT. PRINC
CUMULATIVE EFFECT OF CHANGE IN ACCT. PRINCIPLE
NET INCOME 229,928,122.(14,614 815.215 313,307.
PREFERRED DIVIDEND REQUIREMENTS 083 789.083,789.
EARNINGS AVAILABLE FOR COMMON STOCK 227,844,332.(14,614,815.213,229,517.
EXHIBIT B
PAGE 1 OF 1
Exhibit B
PacifiCorp
Pro Forma Issuance of 50,000,000 shares of Common Stock
Proposed Journal Entries for the 12 Months Ended December 31, 2004
Cash 131 534 500 000
Common Shares Issued 201 534 500,000
Temporary Cash Investment 136 534,500,000
Cash 131 534,500,000
Temporary Cash Investment 136 13,362 500
Interest Income 419/216 362 500
Notes Payable - Commercial Paper 231 285 000,000
Temporary Cash Investment 136 285,000 000
Income Taxes - Federal (350/0)409/216 676,875
Income Taxes - State (3.040/0)409/216 406 220
T axes Accrued 236 083,095
Notes: Assumes 50 000 000 shares of common stock issued at a per share price equal to book value
at November 30 2004 of $10.69 with no stock issuance cost. Excess cash is invested at a
rate of 2.50/0.
PacifiCorp
Pro Forma Issuance of $1,000,000 000 of Long-Term Debt
Proposed Journal Entries for the 12 Months Ended December 31, 2004
Cash 131 990 000,000
Unamortized Debt Expense 181 10,000,000
Bonds 221 000 000,000
Temporary Cash Investment 136 990,000,000
Cash 131 990 000 000
Temporary Cash Investment 136 750 000
Interest Income 419/216 750 000
Interest on Bonds 427 /216 200,000
Temporary Cash Investment 136 200,000
Amort of Debt Discount & Expense 428/216 500,000
Unamortized Debt Expense 181 500,000
Taxes Accrued 236 14,055,780
Income Taxes - Federal (350/0)409/216 932 500
Income Taxes - State (3.040/0)409/216 123 280
Notes: Assumes $1,000,000,000 issuance of Long-Term debt with a coupon rate of 6.120/0, 20 year
term and issuance cost of 10/0. Excess cash is invested at a rate of 2.50/0.
Exhibit C
Common Stock Issuances and Sales to PHI
WHEREAS, the Board of Directors of PacifiCorp (the "Company ), by
resolutions adopted August 22, 2002 (the "Prior Resolutions ), authorized
the Company to issue shares of its Common Stock to PacifiCorp Holdings
Inc., a Delaware corporation and the Company s immediate corporate
parent ("PHI"
),
for the purposes of improving the Company
capitalization and enhancing its ability to meet its obligations as a public
utility, 14 851,485 shares of which have been issued as of the date hereof;
and
WHEREAS, it is now desirable to provide for the issuance of additional
shares and to restate the unused authority under the Prior Resolutions;
now, therefore, be it
RESOLVED, that the Board of Directors of the Company hereby
authorizes the issuance and sale by the Company, from time to time and
for cash, of up to 50 million shares of Common Stock of the Company
(the "Shares ) to PHI; and further
RESOLVED, that the Shares may be sold to PHI, in such amounts and at
such times as shall be determined by the President and Chief Executive
Officer, the Chief Financial Officer or any other Senior or Executive Vice
President or the Treasurer of the Company (each, an "Authorizing
Officer
);
provided, however, that the issuance and sale by the Company
of the Shares shall be subject to (1) the Company s first having obtained
all necessary authorizations therefor from the federal and state regulatory
authorities having jurisdiction over such issuance and sale, and (2) the
Company s receipt of cash consideration for the Shares in an amount per
Share not less than book value determined as set forth below, which
amount shall be adequate consideration for the Shares; and further
RESOLVED, that the book value of the Shares shall be determined by an
Authorizing Officer as of the last day of the month preceding the proposed
issuance, by reference to the consolidated financial statements of the
Company as of such day; and further
RESOLVED, that said determination by an Authorizing Officer shall be
conclusive evidence of the book value of such Shares; and further
RESOLVED, that each Authorizing Officer, acting alone or with anyone
or more other Authorizing Officers, is hereby authorized and empowered
in the Company s name and on its behalf, to enter into one or more
subscription agreements or other agreements with PHI to effect each such
issuance and sale of the Shares, with such terms and conditions as an
Authorizing Officer shall approve, such approval to be conclusively
evidenced by the signature of such Authorizing Officer on such stock
purchase agreement; and further
RESOLVED, that the Chief Executive Officer, the Chief Financial Officer
or the Treasurer of the Company shall report to the Board of Directors at
each regularly scheduled board meeting with respect to any issuance and
sale of the Shares pursuant to the foregoing resolutions; and further
RESOLVED, that the officers of the Company are hereby authorized and
directed to take or cause to be taken, in the Company s name and on its
behalf, any and all such further action as in their judgment may be
desirable or appropriate to cause the issuance and delivery of the Shares as
specified in the preceding resolutions.
General
RESOLVED, that the officers of the Company are hereby authorized, in
the Company s name and on its behalf, to prepare and file with the
California Public Utilities Con1n1ission, the Idaho Public Utilities
Commission, the Public Utility Commission of Oregon, the Public Service
Commission of Utah, the Washington Utilities and Transportation
Commission and the Wyoming Public Service Commission, as may be
appropriate or necessary, applications for orders of said regulatory
authorities authorizing or exempting the issuance and sale of the Shares
together with any and all amendments to such applications and with any
and all exhibits and other docun1ents peliaining to such applications or any
amendments thereto, as in the judgment of such officers may appear
desirable or appropriate; and further
RESOLVED, that the acts of the officers in filing applications (and
amendments and supplements to such applications) with the regulatory
authorities named in the illl111ediately preceding resolution, together with
the various exhibits to such applications (and such amendments and
supplements), for orders authorizing or exempting the issuance and sale of
the Shares are hereby approved, ratified and confirmed; and further
RESOLVED, that the officers of the Company are hereby authorized and
directed, in the Company s name and on its behalf, to make any and all
such further filings with, and to take any and all such further action in the
proceedings before, federal and state regulatory authorities as in the
judgment of the officer or officers taking such action may appear desirable
or appropriate for the purpose of obtaining any and all such further
regulatory approvals, authorizations or consents as may be required to be
obtained by the Company in connection with the issuance and sale by it of
the Shares; and further
RESOLVED , that the officers of the Company are hereby authorized, in
the Company s name and on its behalf, to execute and deliver any and all
such agreements, instruments and other documents, and to do and perfonn
any and all such other acts as in the judgment of such officers may be
desirable or appropriate to caITY out the purposes of the foregoing
resolutions.
Effect on Prior Resolutions
RESOLVED, that the foregoing resolutions shall supersede the prior
resolutions, but the foregoing resolutions shall not affect the validity
any actions taken in reliance on such previously adopted resolutions.