20070618Report of bond exchange.pdf

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Pacific Power I
Rocky Mountain Power I
PacifiCorp Energy
825 NE Multnomah, Suite 1900 LCT
Portland. Oregon 97232
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June 18, 2007
VIA OVERNIGHT DELIVERY
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Idaho Public Utilities Commission
472 West Washington
Boise, Idaho 83702
Attn: Ms. Jean D. Jewell
Commission Secretary
Re:Case No. PAC-O5-
Order No. 29787
Report of First Mortgage Bond Exchange
Dear Ms. Jewell:
Pursuant to the referenced Order, PacifiCorp submits to the Commission three copies of
each ofthe following documents relating to PacifiCorp s offer to exchange up to
$350 000 000 in aggregate principal amount of its new registered 6.10% First Mortgage
Bonds due August 1 2036 for up to $350 000 000 in aggregate principal amount of its
currently outstanding 6.10% First Mortgage Bonds due August 1 2036:
Prospectus dated May 2, 2007
Exchange Agent Agreement dated May 2, 2007
Notice of Tenders dated June 12 2007
PacifiCorp s offer to exchange was made to satisfy its obligations under the Registration
Rights Agreement dated August 10, 2006 that was previously submitted to the
Commission. The terms of the new bonds are substantially identical to those of the
original bonds except the new bonds will not be subject to transfer restrictions.
PacifiCorp did not receive any proceeds from the exchange offer.
Ms. Jean Jewell
June 2007
Page 2 of 2
Under penalty of perjury, I declare that I know the contents of the enclosed documents
and they are true, correct, and complete.
Please contact me if you have any questions about this letter or the enclosed documents.
Sincerely,
Bruce N. Williams
Vice President and Treasurer
Enclosures
cc: Terri Carlock
PROSPECTUS
Dated May 2 , 2007
PROSPECTUS
$350,000,000
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OFFER TO EXCHANGE
100/0 First Mortgage Bonds due 2036
that have been registered under the Securities Act of 1933
for unregistered 6.10% First Mortgage Bonds due 2036
The Exchange Offer
. We are offering to exchange up to $350 million in aggregate principal amount of our registered 6.10%
First Mortgage Bonds due 2036, which we refer to as the "exchange bonds " for the same principal
amount of our outstanding unregistered 6.10% First Mortgage Bonds due 2036, which we refer to as the
original bonds.
. The exchange offer expires at 5 :00 p., New York time, on June 1, 2007, unless extended. We do not
currently intend to extend the expiration date.
. You may withdraw tenders of original bonds at any time prior to the expiration of the exchange offer.
. The exchange offer is subject to terms and conditions set forth in this prospectus and the accompanying
letter of transmittal.
. The exchange of original bonds for exchange bonds in the exchange offer will not be a taxable event for
S. federal income tax purposes.
. We will not receive any proceeds from the exchange offer.
The Exchange Bonds
. The terms of the exchange bonds are substantially identical to the terms of the original bonds, except that
the exchange bonds will generally be freely transferable and do not contain certain terms with respect to
registration rights and additional interest.
. We will issue the exchange bonds under the indenture governing the original bonds. For a description of
the principal terms of the exchange bonds, see "Description of Bonds.
Resales of Exchange Bonds
. The exchange bonds may be sold in the over-the-counter market, in negotiated transactions or through a
combination of such methods and we do not intend to apply for listing of either the original bonds or the
exchange bonds on any exchange or market.
. Following consummation of the exchange offer, the original bonds will continue to be subject to their
existing transfer restrictions.
Investing in the exchange bonds involves certain risks. Please read "Risk Factors" beginning on page 8 of
this prospectus.
Neither the Securities and Exchange Commission, or "SEC nor any state securities commission has approved
or disapproved of the exchange bonds or determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The date of this prospectus is May 2, 2007.
(This page has been left blank intentionally.
You should rely only on the information incorporated by reference or provided in this prospectus or
any prospectus supplement. We have not authorized anyone else, including any dealer or salesperson, to
provide you with information different from that contained in this prospectus. We are offering to exchange
original bonds for exchange bonds only in jurisdictions where such offer is permitted. You should not
assume that the information in the incorporated documents, this prospectus or any prospectus supplement
is accurate as of any other date other than the date on the front of these documents.
This prospectus incorporates important business and financial information about us that is not
included in or delivered with this prospectus. Documents incorporated by reference are available from us
without charge. Any person, including any beneficial owners, to whom this prospectus is delivered, may
obtain documents incorporated by reference in, but not delivered with, this prospectus by requesting themby telephone or in writing at the following address:
PacifiCorp
825 NE Multnomah Street, Suite 2000
Portland, Oregon 97232-4116
[phone]
Attn: Treasury
To obtain timely delivery, you must request these documents no later than five business days before
the expiration date of the exchange offer, or by May 24, 2007.
Each broker-dealer that receives exchange bonds for its own account pursuant to the exchange offer
must acknowledge that it will deliver a prospectus in connection with any resale of its exchange bonds. The
letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not
be deemed to admit that it is an "underwriter" within the meaning of the Securities Act of 1933. This
prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer for
a period of 120 days following the consummation of the exchange offer in connection with resales of
exchange bonds received in exchange for bonds where the original bonds were acquired by the broker-
dealer as a result of market-making activities or other trading activities. We have agreed that, for a period
of 120 days following the consummation of the exchange offer, we will make this prospectus available to
any broker-dealer for use in connection with any resale of the exchange bonds. See "Plan of Distribution.
TABLE OF CONTENTS
Summary...............................................................................
Risk Factors
............................................................................
Forward-LookingStatements............. .................................................
Use of Proceeds......................................... .......,........................Ratios of Earnings to Fixed Charges .
......................................................
Selected Consolidated Financial Information................. ..................... ..........TheExchangeOffer......................................................................
Description of Bonds....................................
.................................
GlobaIBond;Book-EntrySystem........................................................ ..
Certain United States Federal Income Tax Considerations. . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan of Distribution..................................... .................................
Legal Matters............................................. ..........,...................Experts.............................,
....................................................
Where You Can Find More Information....... .............. ........,....... .,.............
IncorporationofDocumentsbyReference...
...............................................
SUMMARY
This summary highlights information contained in this prospectus. It does not contain all the information
that is important to you. Therefore, you should read the entire prospectus carefully, including the additional
documents to which we refer you, before deciding on whether to exchange your original bonds for exchange
bonds. You should carefully consider, among other things, the matters discussed in "Risk Factors. Unless
otherwise noted or required by the context, in this prospectus, "we,
" "
our,
" "
" and "PacifiCorp" refer to
PacifiCorp, an Oregon corporation, and its subsidiaries. References to the "Mortgage" are to the Mortgage and
Deed of Trust, dated as of January 9, 1989, as amended and supplemented, with The Bank of New York (as
successor trustee to JPMorgan Chase Bank, NA).
PacifiCorp
We are a regulated electricity company serving approximately 1.7 million retail customers in service
territories aggregating approximately 136 000 square miles in portions of the states of Utah, Oregon
Wyoming, Washington, Idaho and California. The regulatory commission in each state approves rates for
retail electric sales within that state. We also sell electricity on the wholesale market to public and private
utilities, energy marketing companies and incorporated municipalities. The FERC regulates our wholesale
activities. We own, or have interests in, 69 thermal, hydroelectric and wind generating plants with a net
plant capacity of 8 588.1 MW. The FERC and the six state regulatory commissions also have authority over
the construction and operation of our electric generation facilities. We transmit electricity through
622 miles of transmission lines.
We are an indirect subsidiary of MidAmerican Energy Holdings Company, or "MEHc." MEHC, a
global energy company based in Des Moines, Iowa, is a majority-owned subsidiary of Berkshire
Hathaway Inc.
Our principal executive offices and telephone number are: PacifiCorp, 825 NE Multnomah
Suite 2000, Portland, Oregon 97232-4116; telephone: [phone].
SUMMARY OF THE EXCHANGE OFFER
On August 10, 2006, we privately placed $350 000 000 aggregate principal amount of 6.10% First
Mortgage Bonds due 2036, which we refer to as the "original bonds," in a transaction exempt from
registration under the Securities Act of 1933, or the "Securities Act"
In connection with the offering of original bonds, we entered into a registration rights agreement with
the initial purchasers of the original bonds in which we agreed to offer to you bonds identical to the
original bonds, except registered under the Securities Act, in exchange for your original bonds. In the
exchange offer, you are entitled to exchange your original bonds for exchange bonds, which have
substantially identical terms as the original bonds. The exchange bonds will be accepted for clearance
through The Depository Trust Company, or "DTC," with a new CUSIP. You shouldread the discussions
under the headings "The Exchange Offer
" "
Global Bond; Book-Entry System" and "Description of
Bonds" for more information about the exchange offer and exchange bonds. After the exchange offer is
complete, you will no longer be entitled to any exchange or registration rights for your original bonds.
TheExchangeOffer..........................
ExpirationDate.............................
Withdrawal of Tenders...
...... ..............
We are offering to exchange up to $350 million
principal amount of the exchange bonds for up to
$350 million principal amount of the original bonds.
Original bonds may only be exchanged, and
untendered original bonds may only be, in a
minimum denomination of $2 000 and in increments
of $1 000 thereafter.
The terms of the exchange bonds are substantially
identical to those ofthe original bonds, except the
exchange bonds will not be subj~ct to transfer
restrictions and holders of the exchange bonds will
have no registration rights. Also, the exchange bonds
will not include provisions contained in the original
bonds that required payment of additional interest in
the event we fail to satisfy our registration obligations
with respect to the original bonds.
Original bonds not tendered for exchange will
continue to be subject to transfer restrictions and will
nothave registration rights. Therefore, the market
for secondary resales of original bonds not tendered
for exchange is likely to be minimal.
We will issue registered exchange bonds promptly
after the expiration of the exchange offer.
The exchange offer will expire at 5:00 p.m. New York
City time, on June 1 2007, unless we decide to
extend the expiration date. Please read "The
Exchange Offer-Extensions, Delay in Acceptance,
Termination or Amendment" for more information
about extending the expiration date.
You may withdraw your tender of original bonds at
any time prior to the expiration date. We will return
to you, without charge, promptly after the expiration
or termination of the exchange offer any original
bonds that you tendered but that were not accepted
for exchange.
Conditions to the Exchange OtTer. .
. . . . . . . . . . . .
Procedures for Tendering Original Bonds. . .
. . .
We will not be required to accept original bonds for
exchange:
. if the exchange offer would be unlawful or
would violate any interpretation of the SEC
staff, or
. if any legal action has been instituted or
threatened that would impair our ability to
proceed with the exchange offer.
The exchange offer is not conditioned on any
minimum aggregate principal amount of original
bonds being tendered. Please read "The Exchange
Offer-Conditions to the Exchange Offer" for more
information about the conditions to the exchange
offer.
If your original bonds are held through DTC and you
wish to participate in the exchange offer, you may do
so through DTC's automated tender offer program.
If you tender under this program, you will agree to be
bound by the letter of transmittal we are providing
with this prospectus as though you had signed the
letter of transmittal. By signing or agreeing to be
bound by the letter of transmittal, you will represent
to us that, among other things:
. any exchange bonds you receive will be acquired
in the ordinary course of your business;
. you have no arrangement or understanding with
any person to participate in the distribution of
the original bonds or the exchange bonds;
. you are not our "affiliate " as defined in
Rule 405 under the Securities Act, or, if you are
our affiliate, you will comply with any applicable
registration and prospectus delivery requirement
of the Securities Act;
. if you are not a broker-dealer, you are not
engaged in and do not intend to engage in the
distribution of the exchange bonds; and
. if you are a broker-dealer that will receive
exchange bonds for your own account in
exchange for original bonds you acquired as a
result of market-making activities or other
trading activities, you will deliver a prospectus in
connection with any resale of such exchange
bonds.
Special Procedures for Beneficial Owner. . . .. . .
Guaranteed Delivery Procedures. . .
. . . . . . . . . . .
Resales.....................................
If you own a beneficial interest in original bonds that
are registered in the name of a broker, dealer
commercial bank, trust company or other nominee
and you wish to tender the original bonds in the
exchange offer, please contact the registered holder
as soon as possible and instruct the registered holder
to tender on your behalf and to comply with our
instructions described in this prospectus.
You must tender your original bonds according to
the guaranteed delivery procedures described in
The Exchange Offer-Guaranteed Delivery
Procedures" if any of the following apply:
. you wish to tender your original bonds but they
are not immediately available;
. you cannot deliver your original bonds, the letter
of transmittal or any other required documents
to the exchange agent prior to the expiration
date; or
. you cannot comply with the applicable
procedures under DTC's automated tender offer
program prior to the expiration date.
Except as indicated in this prospectus, we believe the
exchange bonds may be offered for resale, resold and
otherwise transferred without compliance with the
registration and prospectus delivery requirements of
the Securities Act, provided that:
. you are acquiring the exchange bonds in the
ordinary course of your business;
. you are not participating, do not intend to
participate and have no arrangement or
understanding with any person to participate in
the distribution of the exchange bonds; and
. you are not our affiliate.
Our belief is based on existing interpretations of the
Securities Act by the SEC staff set forth in several
no-action letters to third parties. We do not intend to
seek our own no-action letter, and there is no
assurance that the SEC staff would make a similar
determination with respect to the exchange bonds. If
this interpretation is inapplicable, and you transfer
any exchange bonds without delivering a prospectus
meeting the requirements, you may incur liability
under the Securities Act. We do not assume, or
indemnify holders against, such liability.
Each broker-dealer issued exchange bonds for its
own account in exchange for original bonds acquired
by the broker-dealer as a result of market-making
activities or other trading activities must
acknowledge that it will deliver a prospectus meeting
the requirements of the Securities Act in connection
with any resale of the exchange bonds. To the extent
described in "Plan of Distribution " a broker-dealer
may use this prospectus for any offer to resell, resale
or other retransfer of the exchange bonds.
United States Federal Income TaxConsiderations............................The exchange of original bonds for exchange bonds
will not be a taxable event for United States federal
income tax purposes. Please see "United States
Federal Income Tax Considerations.
RegistrationRights..........................If we fail to complete the exchange offer as required
by the registration rights agreement, we may be
obligated to pay additional interest to holders of the
original bonds. Please see "Description of Bonds-
Exchange Offer; Registration Rights;" for more
information regarding your rights as a holder of the
original bonds.
THE EXCHANGE AGENT
We have appointed The Bank of New York as exchange agent for the exchange offer. You should
direct questions and requests for assistance with respect to exchange offer procedures or requests for
additional copies of this prospectus or the letter of transmittal to the exchange agent addressed as follows:
THE BANK OF NEW YORK
CORPORATE TRUST OPERATIONS
REORGANIZATION UNIT
101 BARCLAY STREET, 7 EAST
NEW YORK, NEW YORK 10286
By FACSIMILE TRANSMISSION 212-298-1915
CONFIRM BY TELEPHONE: [phone]
THE EXCHANGE BONDS
The form and terms of the exchange bonds to be issued in the exchange offer are substantially
identical to the form and terms of the original bonds, except that the exchange bonds will be registered
under the Securities Act and, therefore, will not bear legends restricting their transfer, will not contain
terms providing for additional interest if we fail to perform our registration obligations with respect to the
original bonds and will not be entitled to registration rights under the Securities Act. The exchange bonds
will evidence the same debt as the original bonds, and both the original bonds and the exchange bonds are
governed by the same indenture.
Issuer...............
Bonds Offered. . . . .
. . .
Maturity Date. . .
. . . . .
Interest Payment
Dates. . .
. . . . . . . . . .
Optional Redemption.
Sinking Fund. . .
. . . . .
Ranking.............
Covenants ....,......
Use of Proceeds ......
Listing..............
PacifiCorp
$350 000 000 in aggregate principal amount of 6.10% First Mortgage Bonds
due 2036.
The bonds are a series of securities that may be issued under the nineteenth
supplemental indenture to the Mortgage.
August 1 , 2036
February 1 and August 1, commencing February 1, 2007.
We may redeem the bonds, at our option, in whole or in part, at any time, at a
redemption price equal to the greater of:
(1) 100% of the principal amount of the bonds to be redeemed; or
(2) the sum of the present values of the remaining scheduled payments of
principal of and interest on the bonds to be redeemed discounted to the date of
redemption on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at a discount rate equal to the yield on equivalent
Treasury securities plus 20 basis points
plus, for (1) or (2) above, whichever is applicable, accrued and unpaid interest
if any, on such bonds to the date of redemption. See "Description of Bonds-
Optional Redemption.
The bonds will not be subject to a mandatory sinking fund.
The bonds will be secured by a first mortgage lien on certain utility property
owned by us. The bonds will be equally and ratably secured with all other
bonds issued under the Mortgage. The lien of the Mortgage is subject to
certain exceptions. See "Description of Bonds-Ranking and Security.
The Mortgage contains a number of covenants by us for the benefit of the
holders of the bonds, including provisions requiring us to maintain the
mortgaged property as an operating system or systems capable of engaging in
all or any of the generating, transmission, distribution or other utility
businesses described in the Mortgage. See "Description of Bonds-Certain
Covenants.
We will not receive any proceeds from the issuance of the exchange bonds
pursuant to the exchange offer. We will pay certain expenses incident to the
exchange offer. See "The Exchange Offer-Fees and Expenses.
The exchange bonds will not be listed on any exchange or market.
Trustee..............
Risk Factors. . .
. . . . . .
The Bank of New York (successor trustee to JPMorgan Chase Bank, N.A.) will
be the trustee for the holders of the bonds. See "Description of Bonds-The
Trustee. "
You should consider carefully all of the information set forth in this prospectus
and in particular, you should evaluate the specific factors under "Risk Factors.
RISK FACTORS
You should carefully consider the risk factors set fonh below as well as the other information contained in
this prospectus before exchanging your original bonds for exchange bonds. The risks described below are not the
only risks facing us. Any of the following risks could have a material adverse effect on our business, financial
condition and results of operations. Additional risks and uncenainties not cu"ently known to us or that we
cu"ently deem to be immaterial may also have a material adverse effect on our business operations. In such
case, you may lose all or pan of your original investment.
Risks Relating to this Exchange Offer
Your ability to transfer the exchange bonds is limited by the absence of a market for the exchange bonds, and a
trading market for the exchange bonds may not develop.
There is no existing public trading market for the exchange bonds and a market for the exchange
bonds might not develop and you may not be able to sell the exchange bonds or obtain a suitable price. If
such a market were to develop, the exchange bonds could trade at prices that may be higher or lower than
their initial offering price, depending on many factors, including prevailing interest rates, our operating
results and the market for similar securities. We do not intend to apply for listing of the exchange bonds on
a securities exchange or an automated dealer quotation system. As a result, it may be difficult for you to
find a buyer for the exchange bonds at the time you want to sell them and, even if you find a buyer, you
might not realize the price you want.
If you do not exchange your original bonds, your original bonds will continue to be subject to the existing transfer
restrictions and you may be unable to sell your outstanding original bonds.
We did not register the original bonds and do not intend to do so following the exchange offer.
Original bonds not tendered will therefore continue to be subject to the existing transfer restrictions and
may be transferred only in limited circumstances under applicable securities laws. If you do not exchange
your original bonds, you will lose your right, except in limited circumstances, to have your original bonds
registered under the federal securities laws. As a result, if you hold original bonds after the exchange offer
you may be unable to sell your original bonds and the value of the original bonds may decline. We have no
obligation, except in limited circumstances, and do not currently intend, to file an additional registration
statement to cover the resale of original bonds that did not tender in the exchange offer or to re-offer to
exchange the exchange bonds for original bonds following the expiration of the exchange offer.
Your ability to sell your original bonds may be significantly more limited and the price at which you may be able
to sell your original bonds may be significantly lower if you do not exchange them for exchange bonds in the
exchange offer.
To the extent that original bonds are exchanged in the exchange offer, the trading market for the
original bonds that remain outstanding may be significantly more limited. As a result, the liquidity of the
original bonds not tendered for exchange could be adversely affected. The extent of the market for original
bonds will depend upon a number of factors, including the number of holders of original bonds remaining
outstanding and the interest of securities firms in maintaining a market in the original bonds. An issue of
securities with a lesser outstanding market value available for trading, which is called the "float " may
command a lower price than would be comparable to an issue of securities with a greater fldat. As a result
the market price for original bonds that are not exchanged in the exchange offer may be affected adversely
to the extent that original bonds exchanged in the exchange offer reduce the float. The reduced float also
may make the trading price of the original bonds that are not exchanged more volatile.
There are state securities law restrictions on the resale of the exchange bonds.
In order to comply with the securities laws of certain jurisdictions, the exchange bonds may not be
offered or resold by any holder unless they have been registered or qualified for sale in such jurisdictions
or an exemption from registration or qualification is available and the requirements of such exemption
have been satisfied. We do not currently intend to register or qualify the resale of the exchange bonds in
any such jurisdictions. However, an exemption is generally available for sales to registered broker-dealers
and certain institutional buyers. Other exemptions under applicable state securities laws may also be
available.
We will not accept your original bonds for exchange if you fail to follow the exchange offer procedures and, as a
result, your original bonds will continue to be subject to existing transfer restrictions and you may not be able to
sell your original bonds.
We will issue exchange bonds as part of the exchange offer only after a timely receipt of your original
bonds, a properly completed and duly executed letter of transmittal and all other required documents.
Therefore, if you want to tender your original bonds, please allow sufficient time to ensure timely delivery.
If we do not receive your original bonds, letter of transmittal and other required documents by the
expiration date of the exchange offer, we will not accept your original bonds for exchange. We are under
no duty to give notification of defects or irregularities with respect to the tenders of original bonds for
exchange. If there are defects or irregularities with respect to your tender of original bonds, we will not
accept your original bonds for exchange. See "The Exchange Offer.
Risks Relating to Our Business
We are subject to extensive regulations that affect our operations and costs. These regulations are complex and
subject to change.
We are subject to numerous regulation and laws enforced by regulatory agencies. These regulatory
agencies include, among others, the FERC, the Environmental Protection Agency and the public utility
commissions in Utah, Oregon, Wyoming, Washington, Idaho and California.
Regulations affect almost every aspect of our business and limit our ability to independently make
management decisions regarding, among other items, business combinations, constructing, acquiring or
disposing of operating assets, setting rates charged to customers, establishing capital structures and issuing
equity or debt securities, engaging in transactions with our subsidiaries and affiliates, and paying dividends.
Regulations are subject to ongoing policy initiatives and we cannot predict the future course of changes in
regulatory laws, regulations and orders, or the ultimate effect that regulatory changes may have on us.
However, such changes could materially impact our financial results. For example, such changes could
result in, but are not limited to, increased retail competition within our service territories, new
environmental requirements, the acquisition by a municipality or other quasi-governmental body of our
distribution facilities (by negotiation, legislation or condemnation or by a vote in favor of a Public Utility
District under Oregon law) or a negative impact on our current cost recovery arrangements, including
income tax recovery.
The Energy Policy Act of 2005, or the Energy Policy Act, impacts many segments of the energy
industry. To implement the law, the FERC has and will continue to issue new regulations and regulatory
decisions addressing electric system reliability, electric transmission expansion and pricing, regulation of
utility holding companies, and enforcement authority, including the ability to assess civil penalties of up to
$1.0 million per violation per day, even in the absence of intentional violations. The full impact of those
decisions remains uncertain; however, the FERC has recently exercised its enforcement authority by
imposing significant civil penalties on us and other companies for violations of its rules and regulations. In
addition, the Energy Policy Act requires federal agencies, working together with non-governmental
organizations charged with electric reliability responsibilities, to adopt and implement measures designed
to ensure the reliability of electric transmission and distribution systems. Such measures could impose
more comprehensive or stringent requirements on us, which would result in increased compliance costs
and could adversely affect our financial results.
Further, several of our hydroelectric projects whose operating licenses have expired or will expire in
the next several years are in some stage of the FERC relicensing process. Hydroelectric relicensing is a
political and public regulatory process involving sensitive resource issues and uncertainties. We cannot
predict with certainty the requirements (financial, operational or otherwise) that may be imposed by
relicensing, the economic impact of those requirements, whether we will be willing to meet the relicensing
requirements to continue operating our hydroelectric projects. Loss of hydroelectric resources or
additional commitments arising from relicensing could adversely affect our financial results.
Recovery of our costs is subject to regulatory review and approval, and the inability to recover costs may adversely
affect our financial results.
State Rate Proceedings
We establish rates for our retail service through state regulatory proceedings. These proceedings
typically involve multiple parties, including government bodies and officials, consumer advocacy groups
and various consumers of energy, who have differing concerns, but who have the common objective of
limiting rate increases. Decisions are subject to appeal, potentially leading to additional uncertainty
associated with the approval proceedings.
Each state sets rates based in part upon the state utility commission s acceptance of an allocated share
of total utility costs. When states adopt different methods to calculate interjurisdictional cost allocations
some costs may not be incorporated into rates of any state. Rate-making is also generally done on the basis
of estimates of normalized costs, so if a given year s realized costs are higher than normal, rates will not be
sufficient to cover those costs. Each state utility commission generally sets rates based on a test year
established in accordance with that commission s policies. Certain states use a future test year and allow
for escalation of historical costs, while other states use a historical test year. Use of a historical test year
may cause regulatory lag, which results in us incurring costs, including significant new investments, for
which recovery through rates is delayed. State commissions also decide the allowed rates of return MEHC
will be given an opportunity to earn on its equity investment in us, as well as the allowed levels of expense
and investment that they deem just and reasonable in providing service~ The commissions may disallow
recovery in rates for any costs that do not meet such standard.
In Utah, Washington and Idaho, we are not permitted to pass through energy cost increases in our
rates without seeking a general rate increase. Any significant increase in the cost of fuel used for
generation or the cost of purchased electricity could have a negative impact on us, despite our efforts to
minimize this impact through future general rate cases or the use of hedging instruments. Any of these
consequences could adversely affect our financial results.
While rate regulation is premised on providing a fair opportunity to earn a reasonable rate of return
on invested capital, the state regulatory commissions do not guarantee that we will be able to realize a
reasonable rate of return.
FERC Jurisdiction
The FERC establishes cost-based tariffs under which we provide transmission services to wholesale
markets and retail markets in states that allow retail competition. The FERC also has responsibility for
approving both cost- and market-based rates under which we sell electricity at wholesale and has licensing
authority over most of our hydroelectric generation facilities. The FERC may impose price limitations
bidding rules and other mechanisms to address some of the volatility of these markets or may revoke or
restrict our ability to sell electricity at market-based rates, which could adversely affect our financial
results. The FERC may also impose substantial civil penalties for any non-compliance with the Federal
Power Act or FERC rules or orders.
We are actively pursuing, developing and constructing new facilities, the completion and expected cost of which is
subject to significant risk, and we have significant funding needs related to our planned capital expenditures.
We are engaged in several large construction or expansion projects, including construction of a new
gas-fired generating facility, the Lake Side Power Plant in Utah; construction and development of multiple
wind generating plants; various capital projects related to generation, transmission and distribution; and
the development of an underground mine. In addition, in connection with MEHC's acquisition of us in
early 2006, MEHC and we have committed to undertake several other capital expenditure projects
principally relating to environmental controls, transmission and distribution, renewable generation and
other facilities. Including these investments, we expect to incur substantial construction, expansion and
other capital-related costs over the next several years.
The completion of any or all of our pending, proposed or future construction or expansion projects is
subject to substantial risk and may expose us to significant costs. The development or construction efforts
on any particular project, or the efforts generally, may not be successful. Fluctuations in the price or
availability of commodities, manufactured goods, equipment, labor and other items over a multi-year
construction period can result in higher than expected costs to complete an asset and place it into service.
Such costs, if found to be imprudent, may not be recoverable in rates. The inability to successfully and
timely complete a project, avoid unexpected costs or to recover any excess costs through rate-making
decisions may materially affect our financial results.
Furthermore, we depend upon both internal and external sources of liquidity to provide working
capital and to fund capital requirements. If these funds are not available and MEHC does not elect to
provide any needed funding to us, we may need to postpone or cancel planned capital expenditures.
Failure to construct these projects could materially increase operating costs, limit opportunities for
revenue growth and adversely affect the reliability of electric service to our customers. For example, if we
are not able to expand our existing generating facilities, we may be required to enter into long-term
electricity procurement contracts or procure electricity at more volatile and potentially higher prices in the
spot markets to support growing retail loads. These contracts would result in additional counterparty
performance risk, which is described further below.
We are subject to numerous environmental, health, safety and other laws and regulations that may adversely
impact financial results.
Operational Standards
We are subject to numerous environmental, health, safety, and other laws and regulations affecting
many aspects of our present and future operations, including, among others:
. the Environmental Protection Agency s Clean Air Mercury Rule, which establishes a cap and trade
program to reduce mercury emissions from coal-fired power plants starting in 2010; and
. other laws or regulations that establish or could establish standards for greenhouse gas emissions
water quality, wastewater discharges, solid waste and hazardous waste.
These and related laws, regulations and orders generally require us to obtain and comply with a wide
variety of environmental licenses, permits, inspections and other approvals.
Compliance with environmental, health, safety, and other laws and regulations can require significant
capital and operating expenditures, including expenditures for new equipment, inspection, cleanup costs,
damages arising out of contaminated properties, and fines, penalties and injunctive measures affecting
operating assets for failure to comply with environmental regulations. Compliance activities pursuant to
regulations could be prohibitively expensive. As a result, some facilities may be required to shut down or
alter their operations. Further, we may not be able to obtain or maintain all required environmental
regulatory approvals for our operating assets or development projects. Delays in obtaining any required
environmental or regulatory permits, failure to comply with the terms and conditions of the permits or
increased regulatory or environmental requirements may increase our costs or prevent or delay us from
operating our facilities or developing new facilities. If we fail to comply with all applicable environmental
requirements, we may be subject to penalties, fines or other sanctions. The costs of complying with current
or new environmental, health, safety, and other laws and regulations could adversely affect our
financial results.
Further, our regulatory rate structure or long-term customer contracts may not allow us to recover all
costs incurred to comply with new environmental regulations. Although we believe that, in most cases, we
are legally entitled to recover these kinds of costs, the inability to fully recover such costs ina timely
manner could adversely affect our financial results.
Site Cleanup and Contamination
Environmental, health, safety, and other laws and regulations also impose obligations to remediate
contaminated properties or to pay for the cost of such remediation, often by parties that did not actually
cause the contamination. We are generally responsible for on-site liabilities, and in some cases off-site
liabilities, associated with the environmental condition of our assets, including power generation facilities
and transmission and distribution assets which we have acquired or developed, regardless of when the
liabilities arose and whether they are known or unknown. In connection with acquisitions, we may obtain
or require indemnification against some environmental liabilities. If we incur a material liability, or the
other party to a transaction fails to meet its indemnification obligations, we could suffer material losses.
We have established liabilities to recognize our obligations for known remediation liabilities. However
future events, such as changes in existing laws or policies or their enforcement, or the discovery of
currently unknown contamination, may give rise to additional remediation liabilities which may be
material.
Inflation and increases in commodity prices and fuel transportation costs may adversely affect our financial
results.
Inflation affects us through increased operating costs and increased capital costs for plant and
equipment. As a result of regulatory lag and competitive price pressures, we may not be able to pass the
costs of inflation on to our customers. If we are unable to manage costs increases or pass them on to our
customers, our financial results could be adversely affected.
We are also heavily exposed to changes in prices and availability of coal and natural gas and the
transportation of coal and natural gas because a majority of our generation capacity utilizes these fossil
fuels. We currently have contracts of varying durations for the supply and transportation of coal for our
existing generation capacity, although we obtain some of our coal supply from mines owned or leased by
us. When these contracts expire or if they are not honored, we may not be able to purchase or transport
coal on terms as favorable as the current contracts. We have similar exposures regarding the market price
of natural gas. Changes in the cost of coal or natural gas supply or transportation and changes in the
relationship between such costs and the market price of power will affect our financial results. Since the
sales price we receive for power may riot change at the same rate as our coal or natural gas supply or
transportation costs, we may be unable to pass on the changes in costs to our customers.
Our financial results may be adversely affected if we are unable to obtain adequate, reliable and affordable
transmission service.
We depend on transmission facilities owned and operated by utilities to transport electricity to both
wholesale and retail markets, as well as natural gas purchased to supply some of our electric generation
facilities. We have legal obligations to serve our retail customers and some of our wholesale customers
and if adequate transmission is unavailable to serve those customers' loads economically, we will incur
additional costs to deliver power. Sucn unavailability could also decrease our revenue if we are unable to
purchase or sell and deliver products to our other wholesale customers. For these reasons, limits on the
availability of transmission service could adversely affect our financial results.
We are subject to market risk, counter party peiformance risk and other risks associated with wholesale energy
markets.
In general, wholesale market risk is the risk of adverse fluctuations in the market price of wholesale
electricity and fuel, including natural gas and coal, which is compounded by volumetric changes affecting
the availability of or demand for electricity and fuel. We purchase electricity and fuel in the open market
or pursuant to short-term or variable-priced contracts as part of our normal operating business. If market
prices rise, especially in a time when larger than expected volumes must be purchased at market or short-
term prices, we may incur significantly greater expense than anticipated. Likewise, if electricity market
prices decline in a period when we are a net seller of electricity in the wholesale market, we will earn
less revenue.
Wholesale electricity prices in our service areas are influenced primarily by factors throughout the
western United States relating to supply and demand. Those factors include the adequacy of generating
capacity, scheduled and unscheduled outages of generating facilities, hydroelectric generation levels, prices
and availability of fuel sources for generation, disruptions or constraints to transmission facilities, weather
conditions, economic growth and changes in technology. Volumetric changes are caused by unanticipated
changes in generation availability and/or changes in customer loads due to the weather, the economy or
customer behavior. Although we plan for resources to meet our current and expected retail and wholesale
load obligations, we are a net buyer of electricity during some peak periods and therefore our energy costs
may be adversely impacted by market risk. In addition, we may not be able to timely recover all, if any, of
those increased costs unless the state regulators authorize such recovery.
We are also exposed to risks related to performance of contractual obligations by our wholesale
suppliers and customers. We rely on suppliers to deliver commodities, primarily natural gas, coal and
electricity, in accordance with short- and long-term contracts. Failure or delay by suppliers to provide these
commodities pursuant to existing contracts could disrupt our ability to deliver electricity and require us to
incur additional expenses to meet customer needs. In addition, when these contractual agreements end, we
may be unable to purchase commodities on terms equivalent to the terms of current contracts.
We rely on wholesale customers to take delivery of the energy they have committed to purchase and
to pay for the energy on a timely basis. Failure of customers to take delivery may require us to find other
customers to take the energy at lower prices than the original customers committed to pay. At certain
times of year, prices paid by us for energy needed to satisfy our customers' demand for energy may exceed
the amounts we receive through rates from these customers. If the strategy we use to economically hedge
the exposure to these risks is ineffective, we could incur significant losses.
Our operating results may fluctuate on a seasonal and quarterly basis.
The sale of electric power is generally a seasonal business. In the markets in which we operate
customer demand peaks in the winter months due to heating requirements and also peaks in the summer
months due to irrigation and cooling needs. Extreme weather conditions such as heat waves or winter
storms could cause these seasonal fluctuations to be more pronounced. In addition, a portion of our supply
of electricity comes from hydroelectric projects that are dependent upon rainfall and snowpack.
As a result, our overall financial results may fluctuate substantially on a seasonal and quarterly basis.
We have historically sold less power, and consequently earned less income, when weather conditions are
mild. Unusually mild weather in the future may adversely affect our financial results through lower
revenues or increased energy costs. Conversely, unusually extreme weather conditions could increase our
costs to provide power and adversely affect our financial results. Furthermore, during or following periods
of low rainfall or snowpack, we may obtain substantially less electricity from hydroelectric projects and
must purchase greater amounts of electricity from the wholesale market or from other sources at market
prices. The extent of fluctuation in financial results may change depending on a number of factors related
to our regulatory environment and contractual agreements, including our ability to recover power costs
and terms of the power sale contracts.
We are subject to operating uncertainties which may adversely affect our financial results.
The operation of a complex electric utility (including generating, transmission and distribution
systems) involves many operating uncertainties and events that are beyond our control. These potential
events include the breakdown or failure of power generation equipment, transmission and distribution
lines or other equipment or processes; unscheduled plant outages; work stoppages; shortage of qualified
labor; transmission and distribution system constraints or outages; inadequate coal reserves and other fuel
shortages or interruptions; unavailability of critical equipment, material and supplies; low water flows;
performance below expected levels of output, capacity or efficiency; operator error; and catastrophic
events such as severe storms, fires, earthquakes, explosions or mining accidents. A casualty occurrence
might result in injury or loss of life, extensive property damage or environmental damage. Any of these
risks could significantly reduce or eliminate our revenues or significantly increase our expenses. For
example, if we cannot operate generation facilities at full capacity due to damage caused by a catastrophic
event, our revenues could decrease due to decreased wholesale sales and our expenses could increase due
to the need to obtain energy from more expensive sources. Further, current and future insurance coverage
may not be sufficient to replace lost revenue or cover repair and replacement costs. Any reduction of
revenues for such reason, or any other reduction of our revenues or increase in our expenses resulting from
the risks described above could adversely affect our financial results.
Potential terrorist activities or military or other actions could adversely affect us.
The continued threat of terrorism since September 11 , 2001 and the impact of military and other
actions by the United States and its allies may lead to increased political, economic and financial market
instability and subject our operations to increased risk of acts of terrorism. The United States government
has issued warnings that energy assets, specifically including electric utility infrastructure, are potential
targets of terrorist organizations. Political, economic or financial market instability or damage to our
operating assets or the assets of our customers or suppliers may result in business interruptions, lost
revenues, higher commodity prices, disruption in fuel supplies, lower energy consumption and unstable
wholesale energy markets, increased security, repair or other costs that may materially adversely affect us
in ways that cannot be predicted at this time. Any of these risks could materially affect our financial results.
Furthermore, instability in the financial markets as a result of terrorism or war could also materially
adversely affect our ability to raise capital.
The insurance industry changed in response to these events. As a result, insurance covering risks we
typically insure against may decrease in scope and availability, and we may elect to self-insure against many
such risks. In addition, the available insurance may have higher deductibles, higher premiums and more
restrictive policy terms.
Poor performance of plan investments and other factors impacting pension and postretirement benefits plan costs
could unfavorably impact our cash flows and liquidity.
Costs of providing our non-contributory defined benefit pension and postretirement benefits plans
depend upon a number of factors, including the level and nature of benefits provided, the rates of return
on plan assets, discount rates, the interest rates used to measure required minimum funding levels, changes
in laws and government regulation and our required or voluntary contributions made to the plans. Our
pension and postretirement benefits plans are in underfunded positions, and without sustained growth in
the investments over time to increase the value of the plans' assets , we will be required to make significant
cash contributions to fund the plans. Furthermore, the recently enacted Pension Protection Act of 2006
may require us to accelerate contributions to our pension plan for periods after 2007 and may result in
more volatility in the amount and timing of future contributions. Such cash funding obligations, which are
also impacted by the other factors described above, could have a material impact on our liquidity by
reducing our cash flows.
A downgrade in our credit ratings could negatively affect our access to capital, increase the cost of borrowing or
raise energy transaction credit support requirements.
Our debt securities and preferred stock are rated investment grade by various rating agencies but may
not continue to be rated investment grade in the future. Although none of our outstanding debt has rating-
downgrade triggers that would accelerate a repayment obligation, a credit rating downgrade would
increase our borrowing costs and commitment fees on our revolving credit agreement and other financing
arrangements, perhaps significantly. In addition, we would likely be required to pay a higher interest rate
in future financings, and the potential pool of investors and funding sources would likely decrease. Further
access to the commercial paper market, our principal source of short-term borrowings, could be
significantly limited, resulting in higher interest costs.
Most of our large customers, suppliers and counterparties require sufficient creditworthiness in order
to enter into transactions, particularly in the wholesale energy markets. If our credit ratings or the credit
ratings of our subsidiaries were to decline, especially below investment grade, operating costs would likely
increase because counterparties may require a letter of credit, collateral in the form of cash-related
instruments or some other security as a condition to further transactions with us.
We have a substantial amount of debt, which could adversely affect our ability to obtain future financing and limit
our expenditures.
As of March 31 , 2007, we had $4.9 billion in total debt securities outstanding. Our principal financing
agreements contain restrictive covenants that limit our ability to borrow funds, and any issuance of debt
securities requires prior authorization from multiple state regulatory commissions. We expect that we will
need to supplement cash generated from operations and availability under committed credit facilities with
new issuances of long-term debt. However, if market conditions are not favorable for the issuance of long-
term debt, or if an issuance of long-term debt would exceed contractual or regulatory limits, we may
postpone planned capital expenditures, or take other actions, to the extent those expenditures are not fully
covered by cash from operations, borrowings under committed credit facilities or equity contributions
from MEHe.
MEHC may exercise its significant influence over us in a manner that would benefit MEHC to the detriment of
our creditors and preferred stockholders.
MEHC, through a subsidiary, owns all of our common stock and therefore has significant influence
over our business and any matters submitted for shareholder approval. In circumstances involving a
conflict of interest between MEHC and our creditors and preferred stockholders, MEHC could exercise its
influence in a manner that would benefit MERC to the detriment of our creditors and preferred
stockholders.
FORWARD-LOOKING STATEMENTS
This prospectus contains statements that do not directly or exclusively relate to historical facts. These
statements are "forward-looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. You can typically identify forward-looking statements by the use of forward-looking
words, such as "may,
" "
will
" "
could
" "
project
" "
believe
" "
anticipate,
" "
expect,
" "
estimate
" "
continue,
potential
" "
plan
" "
forecast
" "
intend" and similar terms. These statements are based upon our current
intentions, assumptions, expectations and beliefs and are subject to risks, uncertainties and other
important factors. Many of these factors are outside our control and could cause actual results to differ
materially from those expressed or implied by our forward-looking statements.
We have identified a number of these factors in our filings with the SEC, including our Transition
Report on Form 10-K that is incorporated by reference in this prospectus, and we refer you to those
reports for further information.
The following are among the factors, in addition to those set forth above under "Risk Factors " that
could cause actual results to differ materially from the forward-looking statements:
. The outcome of general rate cases and other proceedings conducted by regulatory commissions or
other governmental and legal bodies;
. Changes in prices and availability for both purchases and sales of wholesale electricity and
purchases of coal, natural gas and other fuel sources that could have a significant impact on
generation capacity and energy costs;
. Changes in regulatory requirements or other legislation, including limits on the ability of public
utilities to recover income tax expense in rates such as Oregon Senate Bill 408;
. Changes in economic, industry or weather conditions, as well as demographic trends, that could
affect customer growth and electricity usage or supply;
. A high degree of variance between actual and forecasted load and prices that could impact the
hedging strategy and costs to balance electricity load and supply;
. Hydroelectric conditions, as well as the cost, feasibility and eventual outcome of hydroelectric
relicensing proceedings, that could have a significant impact on electric capacity and cost and on
our ability to generate electricity;
. Performance of our generation facilities, including unscheduled outages or repairs;
. Changes in, and compliance with, environmental and endangered species laws, regulations,
decisions and policies that could increase operating and capital improvement costs, reduce plant
output and/or delay plant construction;
. Changes resulting from MEHC ownership;
. The impact of new accounting pronouncements or changes in current accounting estimates and
assumptions on financial position and results of operations;
. The impact of increases in healthcare costs, changes in interest rates and investment performance
on pension and other postretirement benefits expense, as well as the impact of changes in
legislation on funding requirements;
. Availability, terms and deployment of capital;
. Financial condition and creditworthiness of significant customers and suppliers;
. The impact of financial derivatives used to mitigate or manage interest rate risk and volume and
price risk and changes in the commodity prices, interest rates and other conditions that affect the
value of the derivatives;
. Changes in our credit ratings;
. Timely and appropriate completion of our resource procurement process; unanticipated
construction delays, changes in costs, receipt of required permits and authorizations, ability to fund
capital projects and other factors that could affect future generation plants and infrastructureadditions;
. Other risks or unforeseen events, including wars, the effects of terrorism, embargos and other
catastrophic events; and
. Other business or investment considerations that may be disclosed from time to time in SEC filings
or in other publicly disseminated written documents.
Further details of the potential risks and uncertainties affecting us are described in the "Risk Factors
section of this prospectus. We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. The foregoing review of
factors should not be construed as exclusive.
USE OF PROCEEDS
We issued $350 million in principal amount of the original bonds dated as of August 10, 2006 to the
initial purchasers of those bonds. We are making the exchange offer to satisfy our obligations to do so
under the original bonds, the nineteenth supplemental indenture and the registration rights agreement we
entered into at the time we issued the original bonds. We will not receive any cash proceeds from the
exchange offer. In consideration of issuing the exchange bonds in the exchange offer, we will receive an
equal principal amount of original bonds. Any original bonds properly tendered and accepted in the
exchange offer will be canceled.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table presents our ratio of earnings to fixed charges for the fiscal years indicated. In
May 2006, our Board of Directors elected to change our fiscal year-end from March 31 to December 31.
Ratios:.....................................
9 Months Ended
December 31, 2006
Fiscal Years Ended March 31,2006 2005 2004 20039x 2.5x 2.4x 1.7x
For purposes of this ratio, fixed charges represent consolidated interest charges, an estimated amount
representing the interest factor in rents and preferred dividends of wholly owned subsidiaries. Preferred
dividends of wholly owned subsidiaries represent preferred dividends multiplied by the ratio which pre-tax
income from continuing operations bears to income from continuing operations. Earnings represent the
aggregate of (a) income from continuing operations, (b) taxes based on income from continuing
operations, ( c) minority interest in the income of majority-owned subsidiaries that have fixed charges
(d) fixed charges and (e) undistributed income of less than 50%-owned affiliates without loan guarantees.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following table sets forth selected financial data, which should be read in conjunction with our
consolidated financial statements and the related notes to those statements included in our Transition
Report on Form 10-K that is incorporated by reference in this prospectus. In May 2006, our Board of
Directors elected to change our fiscal year-end from March 31 to December 31.
Nine Months Ended
December 31,2006 200S
Years Ended March 31.2006 2ooS 2004
(Millions of dollars)
(Unaudited)
2003
Statement ofIncomeData:
Operating revenue................. 924.667.896.$3,048.194.5 $ 3 082.4 .
Income from operations. . . .
. . . . . . ..
415.521.3 792.656.4 617.488.
Net income ....................,..160.213.360.251.7 248.1 140.
December 31.2006 2ooS 2006
March 31.2ooS 2004 2003
Balance Sheet Data:
Total assets
...............
$13 851.3 $12 827.4 $12 731.3 $12 520.$11 677.$11 695.
Long-term debt, excluding
current maturities. . . .
. . ..
917.4 691.4 685.602.492.390.
Preferred stock subject to
mandatory redemption. ..37.5 45.45.52.60.66.
Preferred stock. . . .
. . . . . . ..
41.3 41.3 41.3 41.3 41.3 41.3
Total shareholders' equity. .4,426.805.051.8 377.320.235.
THE EXCHANGE OFFER
Purpose of the Exchange Offer
In connection with the sale of the original bonds, we entered into a registration rights agreement with
the initial purchasers of the original bonds. In that agreement, we agreed to file a registration statement
relating to an offer to exchange the original bonds for the exchange bonds. We also agreed to use our best
efforts to have the SEC declare that registration statement effective by August 10, 2007. We are offering
the exchange bonds under this prospectus in an exchange offer for the original bonds to satisfy our
obligations under the registration rights agreement. We refer to our offer to exchange the exchange bonds
for the original bonds as the "exchange offer.
Resale of Exchange Bonds
Based on interpretations of the SEC staff in no-action letters issued to third parties, we believe that
each exchange bond issued in the exchange offer may be offered for resale, resold and otherwise
transferred by you without compliance with the registration and prospectus delivery requirements of the
Securities Act if:
. you are not our affiliate within the meaning of Rule 405 under the Securities Act;
. you acquire such exchange bonds in the ordinary course of your business;
. you do not intend to participate in the distribution of exchange bonds; and
. you are not a broker-dealer that will receive exchange bonds for your own account in exchange for
original bonds that you acquired as a result of market-making activities or other trading activities.
If you tender your original bonds in the exchange offer with the intention of participating in any
manner in a distribution of the exchange bonds, you:
. cannot rely on such interpretations of the SEC staff; and
. must comply with the registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction of the exchange bonds.
Unless an exemption from registration is otherwise available, the resale by any security holder
intending to distribute exchange bonds should be covered by an effective registration statement under the
Securities Act containing the selling security holder s information required by the Securities Act. This
prospectus may be used for an offer to resell, a resale or other retransfer of exchange bonds only
specifically described in this prospectus. Each broker-dealer that receives exchange bonds for its own
account in exchange for original bonds, where that broker-dealer acquired such original bonds as a result
of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such exchange bonds. Please read "Plan of Distribution" for more details
regarding the transfer of exchange bonds.
Terms of the Exchange Offer
Upon the terms and subject to the conditions described in this prospectus and in the letter of
transmittal, we will accept for exchange any original bonds properly tendered and not withdrawn prior to
the expiration date of the exchange offer. We will issue $1 000 principal amount of exchange bonds in
exchange for each $1 000 principal amount of original bonds surrendered under the exchange offer and
accepted by us. Original bonds may be tendered only in integral multiples of $1 000, subject to a $2 000
minimum and untendered original bonds may only be in a minimum denomination of $2 000 and integral
multiples of $1 000 in excess thereof.
The terms of the exchange bonds are identical in all material respects to those of the original bonds
except the exchange bonds will not be subject to transfer restrictions and holders of the exchange bonds
will have no registration rights. Also, the exchange bonds will not include provisions contained in the
original bonds that required payment of additional interest in the event we failed to satisfy our registration
obligations with respect to the original bonds. The exchange bonds will be issued under and entitled to the
benefits of the same indenture that authorized the issuance of the outstanding bonds.
The exchange offer is not conditioned on any minimum aggregate principal amount of original bonds
being tendered for exchange.
As of the date of this prospectus, $350 million principal amount of original bonds are outstanding.
This prospectus and the letter of transmittal are being sent to all registered holders of the original bonds.
There will be no fixed record date for determining registered holders of the original bonds entitled to
participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions of the registration rights
agreement, the applicable requirements of the Securities Act and the Exchange Act, and SEC rules and
regulations. Original bonds that are not tendered for exchange in the exchange offer:
. will remain outstanding,
. will continue to accrue interest, and
. will be entitled to the rights and benefits that holders have under the Mortgage.
We will be deemed to have accepted for exchange properly tendered original bonds when we have
given oral (promptly confirmed in writing) or written notice of the acceptance to the exchange agent and
complied with the applicable provisions of the registration rights agreement. The exchange agent will act as
agent for the tendering holders for the purposes of receiving the exchange bonds from us. We will issue the
exchange bonds promptly after the expiration of the exchange offer.
If you tender original bonds in the exchange offer, you will not be required to pay brokerage
commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to
the exchange of original bonds. We will pay all charges and expenses, other than certain applicable taxes
described below, in connection with the exchange offer. It is important that you read "The Exchange
Offer-Fees and Expenses" for more details about fees and expenses incurred in the exchange offer.
We will return any original bonds that we do not accept for exchange for any reason without expense
to the tendering holder as promptly as practicable after the expiration or termination of the exchange
offer.
Expiration Date
The exchange offer will expire at 5:00 p.m., New York City time, on June 1, 2007, unless at our sole
discretion we extend the offer.
Extensions, Delay in Acceptance, Termination or Amendment
We expressly reserve the right, at any time or at various times, to extend the period of time during
which the exchange offer is open. We may delay acceptance for exchange of any original bonds by giving
oral (promptly confirmed in writing) or written notice of the extension to their holders. During any such
extensions, all original bonds you have previously tendered will remain subject to the exchange offer, and
we may accept them for exchange.
To extend the exchange offer, we will notify the exchange agent orally (promptly confirmed in writing)
or in writing of any extension. We also will make a public announcement of the extension no later than
9:00 a., New York City time, on the next business day after the previously scheduled expiration date.
If any of the conditions described below under "The Exchange Offer-Conditions to the Exchange
Offer" have not been satisfied with respect to the exchange offer, we reserve the right, at our sole
discretion:
. to extend the exchange offer
. to delay accepting for exchange any original bonds, or
. to terminate the exchange offer.
We will give oral (promptly confirmed in writing) or written notice of such extension, delay or
termination to the exchange agent. Subject to the terms of the registration rights agreement, we also
reserve the right to amend the terms of the exchange offer in any manner.
Any such extension, delay in acceptance, termination or amendment will be followed as promptly as
practicable by oral or written notice thereof to the registered holders of the original bonds. If we amend
the exchange offer in a manner that we determine to constitute a material change, we will promptly
disclose that amendment by means of a prospectus supplement. We will distribute the supplement to the
registered holders of the original bonds. Depending on the significance of the amendment and the manner
of disclosure to the registered holders, we may extend, pursuant to the terms of the registration rights
agreement and the requirements of federal securities law, the exchange offer if the exchange offer would
otherwise expire during such period.
Without limiting the manner in which we may choose to make public announcements of any
extension, delay in acceptance, termination or amendment of the exchange offer, we have no obligation to
publish, advertise or otherwise communicate any such public announcement, other than by making a timely
release to an appropriate news agency.
Conditions to the Exchange Offer
Notwithstanding any other provision of the exchange offer and subject to the terms of the registration
rights agreement, we will not be required to accept for exchange, or to issue exchange bonds in exchange
for, any original bonds and may terminate or amend the exchange offer, if at any time before the expiration
date of the exchange offer any of the following events occur:
. any injunction, order or decree has been issued by any court or any governmental agency that would
prohibit, prevent or otherwise materially impair our ability to proceed with the exchange offer; or
. the exchange offer violates any applicable law or any applicable interpretation of the staff of the
SEe.
In addition, we will not be obligated to accept for exchange the original bonds of any holder that has
not made to us:
. the representations described under "The Exchange Offer-Procedures for Tendering" and "Plan
of Distribution " and
. such other representations as may be reasonably necessary under applicable SEC rules, regulations
or interpretations to make available to us an appropriate form for registering the exchange bonds
under the Securities Act.
We expressly reserve the right to amend or terminate the exchange offer notwithstanding the
satisfaction of the foregoing conditions. We will give oral or written notice of any extension
non-acceptance, termination or amendment to the holders of the original bonds as promptly as practicable.
These conditions are for our sole benefit, and we may assert them or waive them in whole or in part at
any time or at various times at our sole discretion. Our failure at any time to exercise any of these rights
will not mean that we have waived our rights. Each right will be deemed an ongoing right that we may
assert at any time or at various times. If we waive a condition, we may be required in order to comply with
applicable securities laws, to extend the expiration date of the exchange offer.
In addition, we will not accept for exchange any original bonds tendered, and will not issue exchange
bonds in exchange for any such original bonds, if at such time any stop order has been threatened or is in
effect with respect to the registration statement of which this prospectus constitutes a part or the
qualification of the indenture relating to the bonds under the Trust Indenture Act of 1939.
Procedures for Tendering
How to Tender Generally
Only a holder of the original bonds may tender original bonds in the exchange offer. For purposes of
the exchange offer, a holder is a person whose name appears on the Trustee s registry books for the
original bonds as a registered holder thereof and a person whose name appears on a DTC security position
listing as an owner of the original bonds. To tender in the exchange offer, a holder must either (1) comply
with the procedures for physical tender or (2) comply with the automated tender offer program procedures
of DTC, described below.
To complete a physical tender, a holder must:
. complete, sign and date the letter of transmittal or a facsimile of the letter of transmittal
. have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires
. mail or deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration
date, and
. deliver the original bonds to the exchange agent prior to the expiration date or comply with the
guaranteed delivery procedures described below.
To be tendered effectively, the exchange agent must receive any physical delivery of the letter of
transmittal and other required documents at its address provided above under "The Exchange Agent"
prior to the expiration date.
To complete a tender through DTC's automated tender offer program , the exchange agent must
receive, prior to the expiration date, a timely confirmation of book-entry transfer of such original bonds
into the exchange agent's account at DTC according to the procedure for book-entry transfer described
below and a properly transmitted agent's message.
The tender by a holder that is not withdrawn prior to the expiration date and our acceptance of that
tender will constitute an agreement between the holder and us in accordance with the terms and subject to
the conditions described in this prospectus and in the letter of transmittal.
THE METHOD OF DELIVERY OF ORIGINAL BONDS, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND
RISK. RATHER THAN MAIL THESE ITEMS, WE RECOMMEND THAT YOU USE AN OVERNIGHT
OR HAND DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME
ENSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION 'DATE. YOU
SHOULD NOT SEND THE LETTER OF TRANSMITTAL OR ORIGINAL BONDS TO US. YOU
MAY REQUEST YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.
How to Tender if You Are a Beneficial Owner
If you beneficially own original bonds that are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and you wish to tender those bonds, you should contact the
registered holder as soon as possible and instruct the registered holder to tender on your behalf. If you are
a beneficial owner and wish to tender on your own behalf, you must, prior to completing and executing the
letter of transmittal and delivering your original bonds, either:
. make appropriate arrangements to register ownership of the original bonds in your name, or
. obtain a properly completed bond power from the registered holder of your original bonds.
The transfer of registered ownership may take considerable time and may not be completed prior to
the expiration date.
Signatures and Signature Guarantees
You must have signatures on a letter of transmittal or a notice of withdrawal described below under
The Exchange Offer-Withdrawal of Tenders" guaranteed by an eligible institution unless the original
bonds are tendered:
. by a registered holder who has not completed the box entitled "Special Issuance Instructions" or
Special Delivery Instructions" on the letter of transmittal, or
. for the account of an eligible institution.
An "eligible institution" is a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States, or an eligible guarantor institution within the meaning of
Rule 17 Ad-15 under the Exchange Act, that is a member of one of the recognized signature guarantee
programs identified in the letter of transmittal.
When Endorsements or Bond Powers Are Needed
If a person other than the registered holder of any original bonds signs the letter of transmittal, the
original bonds must be endorsed or accompanied by a properly completed bond power. The registered
holder must sign the bond power as the registered holder s name appears on the original bonds. An eligible
institution must guarantee that signature.
If the letter of transmittal or any original bonds or bond powers are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, or officers of corporations or others acting in a fiduciary or
representative capacity, those persons should so indicate when signing. Unless we waive this requirement
they also must submit evidence satisfactory to us of their authority to deliver the letter of transmittal.
Tendering Through DTC's Automated Tender Offer Program
The exchange agent and DTC have confirmed that any financial institution that is a participant in
DTC's system may use DTC's automated tender offer program to tender. Accordingly, participants in the
program may, instead of physically completing and signing the letter of transmittal and delivering it to the
exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing
DTC to transfer the original bonds to the exchange agent in accordance with its procedures for transfer.
DTC will then send an agent's message to the exchange agent.
An agent's message is a message transmitted by DTC to and received by the exchange agent and
forming part of the book-entry confirmation, stating that:
DTC has received an express acknowledgment from a participant in DTC's automated tender offer
program that is tendering original bonds that are the subject of such book-entry confirmation;
. the participant has received and agrees to be bound by the terms of the letter of transmittal, or, in
the case of an agent's message relating to guaranteed delivery, the participant has received and
agrees to be bound by the applicable notice of guaranteed delivery; and
. we may enforce the agreement against such participant.
Determinations Under the Exchange Offer
We will determine at our sole discretion all questions as to the validity, form, eligibility, time of
receipt, acceptance of tendered original bonds and withdrawal of tendered original bonds. Our
determination will be final and binding. We reserve the absolute right to reject any original bonds not
properly tendered or any original bonds our acceptance of which, in the opinion of our counsel, might be
unlawful. Our interpretation of the terms and conditions of the exchange offer, including the instructions
in the letter of transmittal, will be final and binding on all parties.
Unless waived, any defects or irregularities in connection with tenders of original bonds must be cured
within such time as we determine. Neither we, the exchange agent nor any other person will be under any
duty to give notification of defects or irregularities with respect to tenders of original bonds, nor will we or
those persons incur any liability for failure to give such notification. Tenders of original bonds will not be
deemed made until such defects or irregularities have been cured or waived. Any original bonds received
by the exchange agent that are not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned to the tendering holder, unless otherwise provided in the letter of
transmittal, as soon as practicable following the expiration date.
When We Will Issue Exchange Bonds
In all cases, we will issue exchange bonds for original bonds that we have accepted for exchange in the
exchange offer only after the exchange agent timely receives:
. original bonds or a timely book-entry confirmation of transfer of such original bonds into the
exchange agent's account at DTC, and
. a properly completed and duly executed letter of transmittal and all other required documents or a
properly transmitted agent's message.
Return of Original Bonds Not Accepted or Exchanged
If we do not accept any tendered original bonds for exchange for any reason described in the terms
and conditions of the exchange offer or if original bonds are submitted for a greater principal amount than
the holder desires to exchange, we will return the unaccepted or non-exchanged original bonds without
expense to their tendering holder. In the case of original bonds tendered by book-entry transfer into the
exchange agent's account at DTC according to the procedures described below , such non-exchanged
original bonds will be credited to an account maintained with DTC. These actions will occur as promptly
practicable after the expiration or termination of the exchange offer.
Your Representations to Us
By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among
other things:
. any exchange bonds you receive will be acquired in the ordinary course of your business;
. you have no arrangement or understanding with any person to participate in the distribution of the
original bonds or the exchange bonds within the meaning of the Securities Act;
. you are not our affiliate, as defined in Rule 405 under the Securities Act, or, if you are our affiliate
you will comply with the applicable registration and prospectus delivery requirements of the
Securities Act;
. if you are not a broker-dealer; you are not engaged in and do not intend to engage in the
distribution of the exchange bonds; and
. if you are a broker-dealer that will receive exchange bonds for your own account in exchange for
original bonds that you acquired as a result of market-making activities or other trading activities
you will deliver a prospectus in connection with any resale of such exchange bonds.
Book-Entry Transfer
The exchange agent will make a request to establish an account with respect to the original bonds at
DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial
institution participating in DTC's system may make book-entry delivery of original bonds by causing DTC
to transfer such original bonds into the exchange agent's account at DTC in accordance with DTC'
procedures for transfer. If you are unable to deliver confirmation of the book-entry tender of your original
bonds into the exchange agent's account at DTC or all other documents required by the letter of
transmittal to the exchange agent prior to the expiration date, you must tender your original bonds
according to the guaranteed delivery procedures described below.
Guaranteed Delivery Procedures
If you wish to tender your original bonds but they are not immediately available or if you cannot
deliver your original bonds, the letter of transmittal or any other required documents to the exchange
agent, or comply with the applicable procedures under DTC's automated tender offer program prior to the
expiration date, you may tender if:
. the tender is made through a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., a commercial bank or trust company having an
office or correspondent in the United States, or an eligible guarantor institution;
. prior to the expiration date, the exchange agent receives from such member firm of a registered
national securities exchange or of the National Association of Securities Dealers, Inc., commercial
bank or trust company having an office or correspondent in the United States, or eligible guarantor
institution either a properly completed and duly executed notice of guaranteed delivery by facsimile
transmission, mail or hand delivery or a properly transmitted agent's message and notice of
guaranteed delivery:
. stating your name and address, the registered number(s) of your original bonds and the principal
amount of original bonds tendered
. stating that the tender is being made thereby, and
. guaranteeing that, within three New York Stock Exchange trading days after the expiration date
the letter of transmittal or facsimile thereof or agent's message in lieu thereof, together with the
original bonds or a book-entry confirmation, and any other documents required by the letter of
transmittal will be deposited by the eligible guarantor institution with the exchange agent; and
. the exchange agent receives such properly completed and executed letter of transmittal or
facsimile or agent's message, as well as all tendered original bonds in proper form for transfer or
a book-entry confirmation, and all other documents required by the letter of transmittal, within
three New York Stock Exchange trading days after the expiration date.
Upon request to the exchange agent, the exchange agent will send a notice of guaranteed delivery to
you if you wish to tender your original bonds according to the guaranteed delivery procedures described
above.
Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw your tender at any time prior to
5:00 p., New York City time, on the expiration date.
For a withdrawal to be effective:
. the exchange agent must receive a written notice of withdrawal at one of the addresses listed above
under "The Exchange Agent " or
. the withdrawing holder must comply with the appropriate procedures of DTC's automated tender
offer program.
Any notice of withdrawal must:
. specify the name of the person who tendered the original bonds to be withdrawn
. identify the original bonds to be withdrawn, including the registration number or numbers and the
principal amount of such original bonds
. be signed by the person who tendered the original bonds in the same manner as the original
signature on the letter of transmittal used to deposit those original bonds or be accompanied by
documents of transfer sufficient to permit the trustee to register the transfer in the name of the
person withdrawing the tender, and
. specify the name in which such original bonds are to be registered, if different from that of the
person who tendered the original bonds.
If original bonds have been tendered under the procedure for book-entry transfer described above
any notice of withdrawal must specify the name and number of the account at DTC to be credited with the
withdrawn original bonds and otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, eligibility and time of receipt of notice of
withdrawal, and our determination shall be final and binding on all parties. We will deem any original
bonds so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.
Any original bonds that have been tendered for exchange but that are not exchanged for any reason
will be returned to their holder without cost to the holder, or, in the case of original bonds tendered by
book-entry transfer into the exchange agent's account at DTC according to the procedures described
above, such original bonds will be credited to an account maintained with DTC for the original bonds. This
return or crediting will take place as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. You may retender properly withdrawn original bonds by following one
of the procedures described under "The Exchange Offer-Procedures for Tendering" at any time prior to
5:00 p., New York City time, on the expiration date.
Fees And Expenses
We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail;
however, we may make additional solicitation by facsimile, e-mail, telephone or in person by our officers
and regular employees and those of our affiliates.
We have not retained any dealer-manager in connection with the exchange offer and will not make
any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however
pay the exchange agent reasonable and customary fees for its services and reimburse it for its related
reasonable out-of-pocket expenses. We may also pay brokerage houses and other custodians, nominees
and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this
prospectus, letters of transmittal and related documents to the beneficial owners of the original bonds and
in handling or forwarding tenders for exchange.
We will pay the cash expenses to be incurred in connection with the exchange offer. They include:
. SEC registration fees for the exchange bonds
. fees and expenses of the exchange agent and the trustee
. accounting and legal fees
. printing costs, and
. related fees and expenses.
Transfer Taxes
If you tender your original bonds for exchange, you will not be required to pay any transfer taxes. We
will pay all transfer taxes, if any, applicable to the exchange of original bonds in the exchange offer. The
tendering holder will, however, be required to pay any transfer taxes, whether imposed on the registered
holder or any other person, if:
. certificates representing exchange bonds or original bonds for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the name of, any person other
than the registered holder of the original bonds tendered
. tendered original bonds are registered in the name of any person other than the person signing the
letter of transmittal, or
. a transfer tax is imposed for any reason other than the exchange of original bonds for exchange
bonds in the exchange offer.
If satisfactory evidence of payment of any transfer taxes payable by a tendering holder is not
submitted with the letter of transmittal, the amount of the transfer taxes will be billed directly to that
tendering holder. The exchange agent will retain possession of exchange bonds with a face amount equal to
the amount of the transfer taxes due until it receives payment of the taxes.
Consequences of Failure to Exchange
If you do not exchange your original bonds for exchange bonds in the exchange offer, you will remain
subject to the existing restrictions on transfer of the original bonds. In general, you may not offer or sell the
original bonds unless either they are registered under the Securities Act or the offer or sale is exempt from
or not subject to registration under the Securities Act and applicable state securities laws. Except as
required by the registration rights agreement, we do not intend to register resales of the original bonds
under the Securities Act. We have no obligation to re-offer to exchange the exchange bonds for original
bonds following the expiration of the exchange offer.
The tender of original bonds in the exchange offer will reduce the outstanding principal amount of the
original bonds. Due to the corresponding reduction in liquidity, this may have an adverse effect on, and
increase the volatility of, the market price of any original bonds that you continue to hold.
Other
Participation in the exchange offer is voluntary, and you should carefully consider whether to accept.
You are urged to consult your financial and tax advisors in making your decision on what action to take. In
the future, we may at our discretion seek to acquire untendered original bonds in open market or privately
negotiated transactions, through subsequent exchange offers or otherwise. We have no present plan to
acquire any original bonds that are not tendered in the exchange offer or to file a registration statement to
permit resales of any untendered original bonds, except as required by the registration rights agreement.
DESCRIPTION OF BONDS
The original bonds were issued, and the exchange bonds will be issued, by PacifiCorp pursuant to the
nineteenth supplemental indenture to the Mortgage, dated as of August 1, 2006 (the "Supplemental
Indenture ). The terms of the bonds include those stated in the Mortgage, the Supplemental Indenture
and those made part of the Mortgage by reference to the Trust Indenture Act of 1939, as amended.
Set forth below is a description of the material terms of the original bonds and exchange bonds, which
are referred to as "bonds" below. The following description is not complete in every detail and is subject
, and is qualified in its entirety by reference to, the Mortgage, the Supplemental Indenture and the
related registration rights agreement. We urge you to read the Mortgage, the Supplemental Indenture and
the related registration rights agreement because they, and not this description, define your rights as
holders of the bonds. Capitalized terms used in this "Description of Bonds" that are not defined in this
registration statement have the meanings given to them in the Mortgage or the Supplemental Indenture.
The registered holder of a bond will be treated as the owner of it for all purposes. Only registered
holders will have rights under the Supplemental Indenture and the Mortgage.
General
The bonds are or will be issued as a series of First Mortgage Bonds under the Mortgage and are
initially limited in aggregate principal amount to $350 000 000. The entire principal amount of the bonds
will mature and become due and payable, together with any accrued and unpaid interest thereon, on
August 1, 2036. The bonds are not subject to any sinking fund provision. The bonds are available for
purchase in denominations of $2 000 and any integral multiple of $1 000 in excess thereof.
Interest
Each bond will bear interest at the rate of 6.10% per annum. Interest on the bonds will be payable
semi-annually in arrears on February 1 and August 1 of each year (each, an "Interest Payment Date ). The
initial Interest Payment Date for the original bonds was February 1, 2007. The amount of interest payable
will be computed on the basis of a 360-day year consisting of twelve 30-day months. If any date on which
interest is payable on the bonds is not a business day, then payment of the interest payable on that date will
be made on the next succeeding day which is a business day (and without any additional interest or other
payment in respect of any delay), with the same force and effect as if made on such date.
So long as the bonds remain in book-entry only form, the record date for each Interest Payment Date
will be the close of business on the business day before the applicable Interest Payment Date. If the bonds
are not all in book-entry form, the record date for each Interest Payment Date will be the close of business
on the first calendar day of the month of the applicable Interest Payment Date (whether or not a business
day).
Ranking and Security
The bonds will be issued under the Mortgage and secured by a first mortgage lien on certain utility
property owned from time to time by us and/or Class "A" Bonds, as defined in Section 1.01 of the
Mortgage, held by the Trustee. The bonds will be equally and ratably secured with all other bonds issued
under the Mortgage.
There are excepted from the lien of the Mortgage all cash and securities (except those specifically
deposited); equipment, materials or supplies held for sale or other disposition; any fuel and similar
consumable materials and supplies; automobiles, other vehicles, aircraft and vessels; timber, minerals
mineral rights and royalties; receivables, contracts, leases and operating agreements; electric energy, gas
water, steam and other products for sale, distribution or other use; natural gas wells; gas transportation
lines or other property used in the sale of natural gas to customers or to a natural gas distribution or
pipeline company, up to the point of connection with any distribution system; our interest in the Wyodak
Facility; and all properties that have been released from the discharged Mortgages and Deeds of Trust, as
supplemented, of Pacific Power & Light Company and Utah Power & Light Company and that PacifiCorp,
a Maine corporation, or Utah Power & Light Company, a Utah corporation, contracted to dispose of, but
title to which had not passed at the date of the Mortgage. The lien of the Mortgage is also subject to
Excepted Encumbrances, as such term is defined in Section 1.06 of the Mortgage, including tax and
construction liens, purchase money liens and certain other exceptions. We have reserved the right, without
any consent or other action by holders of bonds of the Eighth Series or any subsequently created series of
bonds, to amend the Mortgage in order to except from the lien of the Mortgage allowances allocated to
steam-electric generating plants owned by us, or in which we have interests, pursuant to Title IV of the
Clean Air Act Amendments of 1990, as now in effect or as hereafter supplemented or amended.
The Mortgage contains provisions subjecting after-acquired property to the lien thereof. These
provisions maybe limited, at our option, in the case of consolidation or merger (whether or not PacifiCorp
is the surviving corporation), conveyance or transfer of all or substantially all the utility property of another
electric utility company to us or sale of substantially all of our assets. In addition, after-acquired property
may be subject to a Class "A" Mortgage, as defined in Section 1.01 of the Mortgage, purchase money
mortgages and other liens or defects in title.
The Mortgage provides that the Trustee shall have a lien upon the mortgaged property, prior to the
holders of bonds, for the payment of its reasonable compensation and expenses and for indemnity against
certain liabilities.
Further Issuances
The Mortgage does not limit the aggregate principal amount of bonds that may be issued thereunder
and provides that bonds may be issued from time to time in one or more series. The bonds of the series
offered by this registration statement will be limited initially to $350 000 000 in aggregate principal
amount. We may, from time to time, without notice to or the consent of the registered holders of the
bonds, create and issue further bonds equal in rank and having the same maturity, payment terms
redemption features, CUSIP numbers and other terms as the series of bonds offered by this offering
memorandum, except for the payment of interest accruing prior to the issue date of the further bonds and
under some circumstances, for the first Interest Payment Date following the issue date of the further
bonds. These further bonds may be consolidated and form a single series with the series of the bonds
offered by this registration statement.
Bonds of any series may be issued from time to time on the basis of:
(1) 70% of qualified Property Additions after adjustments to offset retirements;
(2)
(3)
(4) deposits of cash.
With certain exceptions in the case of clauses (2) and (3) above, the issuance of bonds is subject to
Adjusted Net Earnings of PacifiCorp for 12 consecutive months out of the preceding 15 months, before
income taxes, being at least twice the Annual Interest Requirements on all bonds at the time outstanding,
all outstanding Class "A" Bonds held other than by the Trustee or by us, and all other indebtedness
secured by a lien prior to the lien of the Mortgage. In general, interest on variable interest bonds, if any, is
calculated using the rate then in effect.
Property Additions" generally include electric, gas, steam and/or hot water utility property but not
fuel, securities, automobiles, other vehicles or aircraft, or property used principally for the production or
gathering of natural gas.
The issuance of bonds on the basis of Property Additions subject to prior liens is restricted. Bonds
may, however, be issued against the deposit of Class "A" Bonds.
Class "A" Bonds (which need not bear interest) delivered to the Trustee;
retirement of bonds or certain prior lien bonds; and/or
Release and Substitution of Property
Property subject to the lien of the Mortgage may be released upon the basis of:
(1) the release of such property from the lien of a Class "A" Mortgage;
(2) the deposit of cash or, to a limited extent, purchase money mortgages;
(3) Property Additions, after making adjustments for certain prior lien bonds outstanding against
Property Additions; and/or
(4) waiver of the right to issue bonds.
Cash may be withdrawn upon the bases stated in (1), (3) and (4) above. Property that does not
constitute Funded Property, as defined in Section 1.05 of the Mortgage, may be released without
substituting other Funded Property. Similar provisions are in effect as to cash proceeds of such property.
The Mortgage contains special provisions with respect to certain prior lien bonds deposited and disposition
of moneys received on deposited prior lien bonds.
Optional Redemption
The bonds are redeemable, in whole or in part, at any time, and at our option, at a redemption price
equal to the greater of:
. 100% of the principal amount of bonds then outstanding to be redeemed; or
. the sum of the present values of the remaining scheduled payments of principal and interest
thereon (not including any portion of such payments of interest accrued as of the redemption date)
discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus 20 basis points, as calculated by an
Independent Investment Banker;
plus, in either of the above cases, accrued and unpaid interest thereon to the redemption date.
We will mail a notice of redemption at least 30 days before the redemption date to each holder of
bonds to be redeemed. If we elect to partially redeem the bonds, the Trustee will select in a fair and
appropriate manner the bonds to be redeemed.
Unless we default in payment of the redemption price, on and after the redemption date, interest will
cease to accrue on the bonds or portions thereof called for redemption.
Adjusted Treasury Rate" means, with respect to any redemption date:
. the yield, under the heading which represents the average for the immediately preceding week
appearing in the most recently published statistical release designated "15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal Reserve System
and which establishes yields on actively traded United States Treasury securities adjusted to
constant maturity under the caption "Treasury Constant Maturities " for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three months before or
after the Remaining Life, yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue will be determined and the Adjusted Treasury Rate will be interpolated
or extrapolated from such yields on a straight line basis, rounding to the nearest month); or
. if such release (or any successor release) is not published during the week preceding the calculation
date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield
to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
The Adjusted Treasury Rate will be calculated on the third business day preceding the redemption
date.
Comparable Treasury Issue" means the United States Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of the bonds to be redeemed
that would be used, at the time of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the remaining term of such bonds
Remaining Life
Comparable Treasury Price" means, with respect to any redemption date, (1) the average of four
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest
Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than
four such Reference Treasury Dealer Quotations, the average of all such quotations.
Independent Investment Banker" means one of the Reference Treasury Dealers appointed by us and
its successors, or if that firm is unwilling or unable to serve as such, an independent investment and
banking institution of national standing appointed by us.
Reference Treasury Dealer" means:
. each of Lehman Brothers Inc. and Greenwich Capital Markets, Inc. and their respective successors;
provided, that if one of these parties ceases to be a primary u.S. Government securities dealer in
New York City ("Primary Treasury Dealer ), we will substitute another Primary Treasury Dealer;
and
. any other Primary Treasury Dealers selected by us.
Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and
any redemption date, the average, as determined by the Independent Investment Banker, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Independent Investment Banker at 5:00 p., New York City time, on the
third business day preceding such redemption date.
Merger or Consolidation
The Mortgage provides that, in the event of the merger or consolidation of another electric utility
company with or into PacifiCorp or the conveyance or transfer to us by another such company of all or
substantially all such company s property that is of the same character as Property Additions, as defined in
the Mortgage, an existing mortgage constituting a first lien on operating properties of such other company
may be designated by us as a Class "A" Mortgage. Bonds thereafter issued pursuant to such additional
mortgage would be Class A" Bonds and could provide the basis for the issuance of bonds under the
Mortgage.
Certain Covenants
The Mortgage contains a number of covenants by us for the benefit of the holders of the bonds
including provisions requiring us to maintain the mortgaged property as an operating system or systems
capable of engaging in all or any of the generating, transmission, distribution or other utility businesses
described in the Mortgage.
Dividend Restrictions
The Mortgage provides that we may not declare or pay dividends (other than dividends payable solely
in shares of Common Stock) on any shares of Common Stock if, after giving effect to such declaration or
payment, we would not be able to pay our debts as they become due in the usual course of business.
Reference is made to the notes to the audited consolidated financial statements included in the Form lO-
incorporated by reference herein for information relating to other restrictions.
Modification
The rights of bondholders may be modified with the consent of holders of 60% of the bonds, or, if less
than all series of bonds are adversely affected, the consent of the holders of 60% of the series of bonds
adversely affected.
In general, no modification of the terms of payment of principal, premium, if any, or interest and no
modification affecting the lien or reducing the percentage required for modification is effective against any
bondholder without the consent of such holder.
Unless there is a Default under the Mortgage, the Trustee generally is required to vote Class "
Bonds held by it with respect to any amendment of the applicable Class "A" Mortgage proportionately
with the vote of the holders of all Class "A" Bonds then actually voting.
Defaults and Notice Thereof
Defaults" are defined in the Mortgage as:
default in other covenants for 90 days after notice; or
the existence of any default under a Class "A" Mortgage which permits the declaration of the
principal of all the bonds secured by such Class "A" Mortgage and the interest accrued
thereupon due and payable.
An effective Default under any Class "A" Mortgage or under the Mortgage will result in an effective
Default under all such mortgages. The Trustee may withhold notice of Default (except in payment of
principal, interest or funds for retirement of bonds) if it determines that it is not detrimental to the
interests of the bondholders.
(1) default in payment of principal;
(2) default for 60 days in payment of interest or an installment of any fund required to be applied tothe purchase or redemption of any bonds;
(3) default in payment of principal or interest with respect to certain prior lien bonds;
(4) certain events in bankruptcy, insolvency or reorganization;
(5)
(6)
The Trustee or the holders of 25% of the bonds may declare the principal and interest due and
payable on Default, but a majority may annul such declaration if such Default has been cured. No holder
of bonds may enforce the lien of the Mortgage without giving the Trustee written notice of a Default and
unless the holders of 25% of the bonds have requested the Trustee to act and offered it reasonable
opportunity to act and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred
thereby and the Trustee shall have failed to act. The holders of a majority of the bonds may direct the time
method and place of conducting any proceedings for any remedy available to the Trustee or exercising any
trust or power conferred on the Trustee. The Trustee is not required to risk its funds or incur personal
liability if there is reasonable ground for believing that repayment is not reasonably assured.
Defeasance
Under the terms of the Mortgage, we will be discharged from any and all obligations under the
Mortgage in respect of the bonds of any series if we deposit with the Trustee, in trust, moneys or
government obligations, in an amount sufficient to pay all the principal of, premium (if any) and interest
, the bonds of such series or portions thereof, on the redemption date or maturity date thereof, as the
case may be. The Trustee need not accept such deposit unless it is accompanied by an opinion of counsel
to the effect that (a) we have received from, or there has been published by, the Internal Revenue Service
(the "IRS") a ruling or (b) since the date of the Mortgage, there has been a change in applicable federal
income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm
that, the holders of such bonds or the right of payment of interest thereon (as the case may be) will not
recognize income, gain or loss for federal income tax purposes as a result of such deposit, and/or ensuing
discharge and will be subject to federal income tax on the same amount and in the same manner and at the
same times, as would have been the case if such deposit, and/or discharge had not occurred.
Upon such deposit, our obligation to pay the principal of (and premium, if any) and interest on such
bonds shall cease, terminate and be completely discharged.
In the event of any such defeasance and discharge of bonds of such series
, -
holders of bonds of such
series would be able to look only to such trust fund for payment of principal of (and premium, if any) and
interest, if any, on the bonds of such series.
The Trustee
The Bank of New York (as successor trustee to JPMorgan Chase Bank, N.A.) from time to time may
act as a lender under loan agreements with us and our affiliates, and serves as trustee under indentures and
other agreements involving us and our affiliates.
Exchange Offer; Registration Rights
We entered into a registration rights agreement with the initial purchasers pursuant to which
agreed, for the benefit of the holders, at our cost, to (1) prepare and file a registration statement with the
SEC with respect to a registered offer to exchange the original bonds for a series of exchange bonds that
will be issued under the Mortgage in the same aggregate principal amount as and with terms that will be
substantially identical in all material respects to the original bonds (except that the exchange bonds will not
contain terms with respect to the transfer restrictions) and (2) use our reasonable best efforts to cause the
exchange offer registration statement to be declared effective under the Securities Act within 365 days
after the closing date (the "Exchange Effectiveness Deadline ). Promptly after the exchange offer
registration statement being declared effective, we will offer the exchange bonds in exchange for surrender
of the original bonds (the "Exchange Offer
, (1) because of any change in law or in applicable interpretations thereof by the staff of the SEC, we
are not permitted to effect the Exchange Offer, (2) the Exchange Offer is not consummated within 400
days of the closing date, (3) an initial purchaser so requests with respect to the bonds not eligible to be
exchanged for exchange bonds in the Exchange Offer and held by it following consummation of the
Exchange Offer or (4) any holder (other than a broker-dealer involved in resales of exchange bonds) (an
Exchanging Dealer ) who is not eligible to participate in the Exchange Offer or, in the case of any holder
(other than an Exchanging Dealer) that participates in the Exchange Offer, such holder does not receive
freely tradable exchange bonds on the date of the exchange and any such holder so requests for any reason
other than the failure by such holder to make a timely and valid tender in accordance with the Exchange
Offer, we will be required to: (a) as promptly as practicable prepare and file with the SEC and thereafter
use our reasonable best efforts to cause to be declared effective within 150 days, but in any event not prior
to 365 days after the closing date (the "Shelf Effectiveness Deadline ), a shelf registration statement
relating to the offer and sale of the bonds or the exchange bonds, as the case may be; and (b) use our
reasonable best efforts to keep the shelf registration statement continuously effective for a period of
two years from the closing date or such shorter period that will terminate when all the bonds covered by
the shelf registration statement have been sold pursuant thereto or are no longer restricted securities (as
defined in Rule 144 under the Securities Act).
If (1) the exchange offer registration statement is not declared effective by the Exchange Effectiveness
Deadline, (2) the shelf registration statement is not declared effective by the Shelf Effectiveness Deadline
or (3) after either the exchange offer registration statement or the shelf registration statement is declared
effective, such registration statement or the related prospectus thereafter ceases to be effective or usable
(subject to certain exceptions) in connection with resales of bonds or exchange bonds for the periods
specified and in accordance with the registration rights agreement (each such event referred to in clauses
(1) through (3), a "Registration Default"), additional interest will accrue on the bonds subject to such
Registration Default at a rate of 0.50% per annum from and including the date on which any such
Registration Default occurs to but excluding the date on which all such Registration Defaults have ceased
to be continuing. In each case, such additional interest is payable in addition to any other interest payable
from time to time with respect to the bonds and the exchange bonds and is payable at the same times, in
the same manner and to the same persons as such other interest.
GLOBAL BOND; BOOK-ENTRY SYSTEM
The original bonds were, and the exchange bonds will be, issued under a book-entry system in the
form of one or more global bonds, each, a "Global Bond." Each Global Bond with respect to the original
bonds was, and each Global Bond with respect to the exchange bonds will be, deposited with, or on behalf
, a depositary, which will be The Depository Trust Company, New York, New York, or the "Depositary.
The Global Bonds with respect to the original bonds were, and the Global Bonds with respect to the
exchange bonds will be, registered in the name of the Depositary or its nominee.
The original bonds were not issued in certificated form and, except under the limited circumstances
described below, owners of beneficial interests in the Global Bonds are not entitled to physical delivery of
the bonds in certificated form. The Global Bonds may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any nominee to a successor of the Depositary or a
nominee of such successor.
The Depositary is a limited-purpose trust company organized under the New York Banking Law, a
banking organization" within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Exchange Act.
The Depositary holds securities that its participants ("Direct Participants ) deposit with the Depositary.
The Depositary also facilitates the post-trade settlement among Direct Participants of securities
transactions, such as transfers and pledges, in deposited securities through electronic computerized book-
entry changes in Direct Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies
clearing corporations and certain other organizations, including Euroclear Bank S.A./N.V. as operator of
the Euroclear System, or "Euroclear " and Clearstream Banking, societe anonyme, or "Clearstream." The
Depositary is a wholly owned subsidiary of The Depository Trust & Clearing Corporation, or "DTCc."
DTCC, in turn, is owned by a number of Direct Participants and Members of the National Securities
Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation and
Emerging Markets Clearing Corporation, also subsidiaries of DTCC, as well as by the New York Stock
Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities
Dealers, Inc. Access to the Depositary system is also available to others, such as securities brokers and
dealers, banks and trust companies, that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly, or "Indirect Participants." The rules applicable to the Depositary
and its Direct and Indirect Participants are on file with the SEc.
Purchases of the securities under the Depositary system must be made by or through Direct
Participants, which will receive a credit for the securities on the Depositary s records. The ownership
interest of each actual purchaser of each security, or "Beneficial Owner " is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from the
Depositary of their purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from the Direct or
Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the securities are to be accomplished by entries made on the books of Direct and
Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in securities, except in the event that use of the book-entry system
for the securities is discontinued.
To facilitate subsequent transfers, all bonds deposited by Direct Participants with the Depositary are
registered in the name of the Depositary s partnership nominee, Cede & Co., or such other name as may
be requested by an authorized representative of the Depositary. The deposit of bonds with the Depositary
and their registration in the name of Cede & Co. or such other nominee effect no change in beneficial
ownership. The Depositary has no knowledge of the actual Beneficial Owners of the bonds; the
Depositary s records reflect only the identity of the Direct Participants to whose accounts such bonds are
credited, which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners are governed by arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither the Depositary nor Cede & Co. (nor any other nominee of the Depositary) will consent or
vote with respect to the bonds unless authorized by a Direct Participant in accordance with the
Depositary s procedures.
Principal and interest payments on the bonds and any redemption payments are made to Cede & Co.
(or such other nominee as may be requested by an authorized representative of the Depositary). The
Depositary s practice is to credit Direct Participants' accounts upon the Depositary s receipt of funds and
corresponding detail information from PacifiCorp or the trustee on the payable date in accordance with
their respective holdings shown on the Depositary s records. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street name " and will be the
responsibility of such Participant and not of the Depositary, the trustee or PacifiCorp, subject to any
statutory or regulatory requirements as may be in effect from time to time. Payment of principal, interest
and any redemption proceeds to Cede & Co. (or such other nominee as may be requested by an authorized
representative of the Depositary) is the responsibility of PacifiCorp, disbursements of such payments to
Direct Participants shall be the responsibility of the Depositary, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
The Depositary may discontinue providing its services as securities depositary with respect to the
bonds at any time by giving reasonable notice to PacifiCorp or the trustee. Under such circumstances, in
the event that a successor securities depositary is not obtained, certificated bonds are required to be
printed and delivered. PacifiCorp may decide to discontinue use of the system of book-entry transfers
through the Depositary (or a successor securities depositary). In that event, certificated bonds will be
printed and delivered.
The information in this section concerning the Depositary and the Depositary s book-entry system has
been obtained from sources PacifiCorp believes to be reliable but has not been independently verified by
PacifiCorp, the initial purchasers or the trustee.
A Global Bond of any series may not be transferred except as a whole by the Depositary to a nominee
or successor of the Depositary or by a nominee of the Depositary to another nominee of the Depositary. A
Global Bond representing bonds is exchangeable, in whole but not in part, for bonds in definitive form of
like tenor and terms if (1) the Depositary notifies PacifiCorp that it is unwilling or unable to continue as
depositary for such Global Bond or if at any time the Depositary is no longer eligible to be or in good
standing as a "clearing agency" registered under the Exchange Act, and in either case, a successor
depositary is not appointed by PacifiCorp within 120 days of receipt by PacifiCorp of such notice or of
PacifiCorp becoming aware of such ineligibility, (2) while such Global Bond is subject to the transfer
restrictions, the book-entry interests in such Global Bond cease to be eligible for Depositary services
because such bonds are neither (a) rated in one ofthe top four categories by a nationally recognized
statistical rating organization nor (b) included within a Self-Regulatory Organization system approved by
the SEC for the reporting of quotation and trade information of securities eligible for transfer pursuant
Rule 144A under the Securities Act, or (3) PacifiCorp in its sole discretion at any time determines not to
have such bonds represented by a Global Bond and notifies the trustee thereof. A Global Bond
exchangeable pursuant to the preceding sentence shall be exchangeable for bonds registered in such names
and in such authorized denominations as the Depositary shall direct.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
General
The following summary describes the material United States federal income tax consequences
relevant to the exchange of original bonds for exchange bonds pursuant to the exchange offer but does not
purport to be a complete analysis of all potential or future tax effects. The following discussion is based on
the provisions of the United States Internal Revenue Code of 1986, as amended, or the Code, and related
United States Treasury regulations, administrative rulings and judicial decisions now in effect, changes to
which subsequent to the date hereof may affect the tax consequences described below.
We encourage holders to consult their tax advisors with respect to the United States federal income
tax consequences to them of the exchange offer in light of their particular circumstances, as well as the
effect of any state, local or foreign tax laws or any applicable tax treaty.
An exchange of original bonds for exchange bonds pursuant to the exchange offer will not be a taxable
event for United States federal income tax purposes. Consequently, holders will not recognize any taxable
gain or loss as a result of exchanging original bonds for exchange bonds pursuant to the exchange offer.
The holding period of the exchange bonds will include the holding period of the original bonds, and the tax
basis in the exchange bonds will be the same as the tax basis in the original bonds immediately before the
exchange.
PLAN OF DISTRIBUTION
Based on interpretations of the SEC staff in no-action letters issued to third parties, we believe that
you may resell or otherwise transfer exchange bonds issued in the exchange offer without further
compliance with the registration and prospectus delivery requirements of the Securities Act if:
. you acquire exchange bonds in the ordinary course of your business, and
. you are not engaged in, and do not intend to engage in, and have no arrangement or understanding
with any person to participate in, a distribution of exchange bonds.
We believe that you may not transfer exchange bonds issued in the exchange offer without further
compliance with such requirements or an exemption from such requirements if you are:
. our affiliate within the meaning of Rule 405 under the Securities Act, or
. a broker-dealer that acquired original bonds as a result of market-making or other trading activities.
The information described above concerning interpretations of and positions taken by the SEC staff
not intended to constitute legal advice. Broker-dealers should consult their own legal advisors with respect
to these matters.
If you wish to exchange your original bonds for exchange bonds in the exchange offer, you will be
required to make representations to us as described in "The Exchange Offer-Procedures for Tendering
and "Your Representations to Us" of this prospectus and in the letter of transmittal. In addition, if a
broker-dealer receives exchange bonds for its own account in exchange for original bonds that were
acquired by it as a result of market-making activities or other trading activities, it will be required to
acknowledge that it will deliver a prospectus in connection with any resale by it of such exchange bonds. A
broker-dealer may use this prospectus, as amended or supplemented, in connection with these resales, and
all dealers effecting transactions in the exchange bonds may be required to deliver a prospectus, as
amended or supplemented for 120 days following consummation of the exchange offer. For the 120 days
following the consummation of the exchange offer, we will promptly send additional copies of this
prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such
documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer
(including certain expenses of counsel for the initial purchasers) other than dealers' and brokers' discounts
commissions and counsel fees and will indemnify the holders of the exchange bonds (including any broker-
dealer) against certain liabilities, including liabilities under the Act.
We will not receive any proceeds from any sale of exchange bonds by broker-dealers. Exchange bonds
received by broker-dealers for their own account in the exchange offer may be sold from time to time in
one or more transactions:
. in the over-the-counter market
. in negotiated transactions
. through the writing of options on the exchange bonds, or
. a combination of such methods of resale.
The prices at which these sales occur maybe:
. at market prices prevailing at the time of resale
. at prices related to such prevailing market prices, or
. at negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such broker-dealer or the
purchasers of any exchange bonds. Any broker-dealer that resells exchange bonds that it received for its
own account in the exchange offer and any broker or dealer that participates in a distribution of exchange
bonds may be deemed to be an "underwriter" within the meaning of the Securities Act. Any profit on any
resale of exchange bonds and any commission or concessions received by any such persons may be deemed
to be underwriting compensation. The letter of transmittal states that, by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within
the meaning of the Securities Act.
LEGAL MA TIERS
The validity of the exchange bonds being offered hereby will be passed upon for us by Perkins Coie
LLP, Portland, Oregon.
EXPERTS
The consolidated financial statements as of December 31, 2006 and for the nine-month period then
ended, incorporated in this prospectus by reference from our Transition Report on Form lO-K for the
transition period from April 1, 2006 to December 31, 2006 have been audited by Deloitte & Touche LLP
an independent registered public accounting firm, as stated in their report (which report expressed an
unqualified opinion and includes an explanatory paragraph relating to the adoption of SFAS No. 158
Employers' Accountingfor Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB
Statements No. 87, 88 106 and 132(R), as of December 31, 2006), which is incorporated herein by
reference, and has been so incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
The consolidated financial statements as of March 31 , 2006 and for each of the two years in the period
ended March 31 , 2006, incorporated in this prospectus by reference to our Transition Report on
Form 10-K for the transition period from April 1, 2006 to December 31 2006, have been so incorporated
in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting
firm, given on the authority of such firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file our annual, quarterly and current reports and other information with the SEC. You can
inspect and copy the materials we have filed with the SEC at the public reference room maintained by the
SEC at lOO F Street, N., Room 1580, Washington, D.e. 20549. You can call the SEC at 1-800-732-0330
for further information about the public reference room. We are also required to file electronic versions of
these documents with the SEC, which may be accessed through the SEe's website at www.sec.gov.
Our website is www.pacificorp.com. We make our annual reports, quarterly reports and current
reports available free of charge on our web site as soon as reasonably practicable as we file these reports
with the SEe. Information contained on the website is not a part of this prospectus, except as explicitly
incorporated by reference.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" certain of our publicly filed documents into this
prospectus, which means that information in these documents is considered part of this prospectus. We
hereby incorporate by reference our Transition Report on Form lO-K for the nine months ended
December 31, 2006 and our Current Reports on Form 8-K filed on March 12 2007 and March 14 2007.
In addition, all documents filed with the SEC pursuant to Sections 13(a), 13(c), 14 and 15(d) ofthe
Exchange Act by us subsequent to the date of this prospectus and prior to the termination of this offering
shall be deemed to be incorporated by reference into this prospectus and to be a part hereof from the date
of filing of such documents with the SEe. Any statement contained in this prospectus or in a document
incorporated or deemed to be incorporated by reference into this prospectus shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a statement contained in this
prospectus or in any other subsequent filed document which also is or is deemed to be incorporated by
reference into this prospectus modifies or supersedes the statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to constitute a part of this
prospectus.
Statements contained in this prospectus or in any document incorporated by reference into this
prospectus as to the contents of any contract or other document referred to herein or therein are not
necessarily complete, and in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the documents incorporated by reference, each such statement being
qualified in all respects by such reference.
Copies of the documents listed above are also available free of charge through our website
(www.pacificorp.com) as soon as reasonably practicable after we electronically file the material with, or
furnish it to, the SEe. In addition, you can obtain the documents referenced above by contacting us at:
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, Oregon 97232-4116
Telephone: [phone]
Attn: Treasury
PACIFICORP
A MIDAMERICAN ENERGY HOLDINGS COMPANY
ACIFICORP
OFFER TO EXCHANGE ITS
10% FIRST MORTGAGE BONDS DUE 2036
THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
FOR UNREGISTERED 6.10% FIRST MORTGAGE BONDS DUE 2036
PROSPECTUS
May 2, 2007
EXCHANGE AGENT AGREEMENT
Dated May 2, 2007
2007-05-02 08:35am From-BANK OF NEW YORK 212 815-5704 T-359 002 F-T81
EXECUTION VERSION
May 2, 2007
EXCHANGE AGENT AGREEMENT
The BaDk of New York
10l Barclay Street, Floor 8 West
New York, New York) 0286
Attention: James D. Heaney, Vice President
Ladies and Gentlemen:
PflcifiCOJp, an Oregon corporation (the "Company ) proposes to make an
offer (the t'Exchange Offer ) to exchange all of its outstanding 6.10% First Mortgage
Bonds due 2036 (the "Old Securities ) for its 6.10% First Mortgage Bonds due 2036 (the
"New Securities ). The terms and conditions of the Exchange Offer as cUlTently
contemplated are set forth in a prospectus, dated May 2, 2007 (the "Prospectus") included
in the Company's Registration Statement on Fonn S-4 as amended, proposed to be
distributed to all record holders of the Old Securities. The Old Securities and the New
Securities are collectively refelTed to herein as the 'ISecurities.
The Company hereby appoints The Bank of New York to act as exchange
agent (the "Exchange Agentll) in connection with the Exchange Offer. References
hereinafter to "you" shan refer to The Bank of New York.
The Exchange Offer is expected to be commenced by the Company on or
about May 2, 2007. The Letter of Transmittal accompanying the Prospectus (or in the
case of book-entry securities, the Automated Tender Offer Program ("A TOP") of the
Book-Entry Tra.:nsfer Facility (as defined below)) is to be used by the holders ofllie Old
Securities to accept the Exchange Offer and contains instructions with respect to the
delivery of certificates for Old Securities tendered in connection therewith.
The Exchange Offer shall expire at 5:00 p.m., New York City time, on
Jillle I, 2007 or on such subsequent date or time to which the Company may extend the
Exchange Offer (the tlExpiration Date ). Subject to the tenns and conditions set forth in
the Prospecms, the Company expressly reserves the right to extend the Exchange Offer
from time to rime and may extend the Exchange Offer by giving oral (promptly
confirmed in writing) or written notice to you before 9:00 a.m., New York City time, on
the business day following the previously scheduled Expiration Date.
The Company expressly reserves the right to amend or tenninate the
Exchange Offer, and not to accept for exchange any Old Securities not theretofore
accepted for exchange, upon the occurrence of any of the conditions of the Exchange
24S'7S-OD3SILEGAL I :!9~SO)Dj
2007-05-02 08:35am F rom-BANK OF NEW YORK 212 815-5704 T-359 003 F-781
Offer specified in the Prospectus under the caption "The Exchange Offer -- Conditions to
the Exchange Offer. II The Company will give oral (promptly confirmed in writing) or
written notice of any extension, amendment, tel1nination or nonacceptance to you as
promptIy as practicable.
In carrying out your duties as Exchange Agent, you ate to act in
accordance with the fo11owing instructions:1. You will perform such duties and only such duties as are
specifically set forth in tile section of the ProspectUs captiol1ed "The Exchange Offer" or
as specifically set forth herein; provided. however.that in no way will your general duty
to act in good faith be discharged by the foregoing.2. You will establish a boole-entry account with respect to the Old
Securities at The Depository Trust Company (the "Book-Entry Transfer Facility ) for
puIposes of the Exchange Offer within two business days after the date of the Prospectus,
and any financial institution that is a participant in the Book-Entty Transfer Facility'
systems may make book~entry delivery of the Old Securities by causing the Book-Entry
Transfer Fac~ity to transfer such Old Securities into your account in accordaTlce with the
Book-Entry Transfer Facility's procedure for such transfer.3. You are to examine each of the Letters of Transmittal and
cenificates for Old Securities (or confmnation of book-entry transfer into your account at
the Book-Entry Transfer Facility) and any other documents delivered or mailed to you by
or for holders of the Old Securities to ascertain whether: (i) the Letters of Transmittal and
any such other documents are duly executed and properly completed in accordance with
instructions set forth therein; and (ii) the Old Securities have otherwise been properly
tendered. In each case where the Letter of Transmittal or any otller document has been
improperly completed or executed or any of the cenificates for Old Securities are not in
proper fonn for transfer or some other irregularity in COI1!\ection with the acceptance of
the Exchange Offer exists, you will endeavor to inform the presenters of the need for
fulfilhnent of an requirements and to take any other action as n1ay be reasonably
necessary or advisable to cause such irregularity to be corrected.4. With the approval of the Senior Vice President and ChiefFinancia1
Officer or the Vice President and Treasurer of the Company (silch approval, if given
orally, to be promptly col1finned in writing) or any other party designated in writing, by
such an officer. you are alltI1orized to waive any irregularities in connection with any
tender of Old Securities pursuant to the Exchange Offer.5. Tenders of Old Securities may be made only as set forth in 'the
Letter of Transmittal and in the section of the ProspectUs capTioned "The Exchange Offer
- Procedures for Tendering," and Old Securities shal1 be considered properly tendered to
you only when 'tendered in accordance with the procedures set forth therein.
2487BoOO35/I..ECiAL 12945030.3
2007-05-02 08:35am F rom-BANK OF NEW YORK ZIZ 815-5704 T-359 004 F-781
Notwithstanding the provisions of this Section 5, Old Securities which the
Senior Vice President and ChiefFinandal Officer or the Vice President and Treasurer of
the Company shall approve as having been properly tendered shall be considered to be
properly tendered (such approval, if given Oleany, shall be promptly confirmed in
writing).6. You shall advise the Company with respect to any Old Securities
received subsequent to the Expiration Date and accept its instructions with respect to
disposition of such 01d Securities.
You shall accept tenders:
(a) in cases where the Old Securities are registered in tWo or
more names on1 y if signed by an named holders;
(b) in cases where the signing person (as indicated on the
Letter of Transmittal) is acting in a fiduciary or a representative capacity
only when
proper evidence of his or her authority SO to act is submitted; and
(c) from persons other than the registered bolder of Old
Securities, provided that customary transfer r~quirements, including payment of any
applicable transfer taXes, are fulfilled.
You shal1 accept partial tenders of Old Securities where so indicated and
as pennitted in the Letter of Transmittal and deliver certificates for Old Securities to the
registrar for split-up and return any untendered Old Securities to the holder (or such other
person as may be designated in the Letter of Transmittal) as promptly as practicable after
expiration or termination of me Exchange Offer.8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will notifY you (such notice, if given orally, 10 be
promptly confim1ed in writing) of its acceptance, promptly after the Expiration Date, of
all Old Securities properly tendered and you, on behalf of the Company, wi11 exchange
such Old Securities for New Securities and cause such Old Securities to be cancelled.
DeHvery of New Securities will be made on behalf of the Company by you at the rate of
$1,000 principal amount of New Securities for each $1.000 principal amount of the
corresponding senes of Old Securities tendered promptly after notice (such notice if
given orally, to be promptly confmned in writing) of acceptance of said Old Securities by
tbe Company; provided however, that in all cases, Old Securities tendered pursuant to
the Exchange Offer will be exchanged only after timely receipt by you of certificates for
such Old Securities (or confirmation of book-entry transfer into your account at the
Book~Entry Transfer Fa em ty) , a properly completed and (tu1y executed Letter of
Transmittal (or manually signed facsimile thereof) with any required signature guarantees
and any other required documents. You shall issue New Securities omy in denominations
of$l,OOO or any integral111l1ltiple thereof, with minimum denominations of$2.000.
2487S.0035!lEG AL1294S030.
2007-05-02 08: Seam F rem-BANK OF NEW YORK 212 815-5704 T-S59 005/011 F-7B1
9. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the tenns and upon the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Securities tendered pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any Old Securities
tendered if any of the conditions set forth in the Exchange Offer are not met. Notice of
any decision by the Company not to exchange any Old Secnrities tendered shall be given
(if given orally, to be promptly confirmed in writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept
for exchange all or part of the Old Securities tendered because of an invalid tender, the
QCc1lIrence of certain other events set forth in the Prospectus under the caption liThe
Exchange Offer -~ Conditions to the Exchange Offer" or otherwise, yO1,l shall as soon as
practicable after the expiration or tennination of the Exchange Offer return those
certificates fOT upaccepted Old Securities (or effect appropriate book-elltry transfer),
together with aI:lY related required documents and tbe Letters of Transmittal relating
thereto that are in your possession, to the persons who deposited tbem.
12. An certificates for reissued Old Securities, unaccepted Old
Securhies or for New Securities shall be forwarded by flrst-c1aS5 mail.
13. You are not authorized to payor offer to pay any concessions
commissions or solicitation fees to any broker, dealer, bank or other persons or to engage
or utilize any person to solicit tenders.
14.As Exchange Agent hereunder you:
(a) shall not be liable for allY action or omission to act unless
the same constitutes your own gross negligence, willful misconduct or bad faith. and in
no event shan you be liable to a securityholder. me Company or any third party for
special, indirect or consequential loss or damage of any ldnd whatsoever (including, but
not limited to, 10ss of profit) arising in connection with this Agreement irrespective of
whether you have been advised oftbe likelihood of such Joss or damage and regardless of
the fonn of action;
(b) shall have no duties or obligations other than those
specjfically set forth herein or as may be subsequently agreed to in writing betWeen you
and the Company;
(c) will be regarded as making no representations and having
no responsibilities as to the validity, sufficiency, value or genuineness of any of the
certificates or the Old Securities represented thereby deposited with you pursuant to the
Exchange Offer, and will not be required to and will make no representation as to the
validity, vall.Je or genuine:ness of the Exchange Offer;
248i8-003S/LEGAL 12945030..3
2007-05-02 08:36am F rom-BANK OF NEW YORK 212 815-5704 T-359 006/011 F-781
(d) shan not be obligated to take any legal action hereunder
which might in your judgment involve any expense or liability, unless you shan have
been furnished with indemnity satisfactory to you;
(e) may conclusively rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter, telegram. or other
document or security delivered to you and believed by you to be genuine and to have
beel1 signed or presented by the proper person or perSons;
('0 may act uppn any tender, state:rnent, request, document
agreement, certificate or other instrument whatsoever not only as to its due execution and
validity and effectiveness of its provisions, but also as to the truth and accuracy of any
il1fonnation contained therein, which you shall in good faith believe to be genuine or to
have been signed or presented by the proper person or persons;
(g)
may conclusively rely on and shall be protected in acting
upon written or oral instructions from any authOlized officer of the Company;
(h) may consuh with counsel of your selection with respect to
any questions relating to your duties and responsibilities and the advice or opinion of
such counsel shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted to be taken by you hereunder in good faith and in
accordance with the advice or opinion of such counsel;
(i) shall in no event be responsible or liable for any faill1re or
delay in the pertonnance of your obligations under this Agreement arising out of or
caused by, directly or indirectly, forces beyond your reasonable control, including
without limitation strikes
, .
work stoppages, accidents, acts of war or terrorism, civil or
military distUrbances, nuclear or natural catastrophes, acts of God, and inten-uptions, Joss
or malfunctions of utilities, communications or computer (software or hardware)
services; and
CD shaH not advise any person tendering Old Securities
pursuant to the Exchange Offer as to the wisdom of making such tender or as to the
market value or decline or appreciation in market value of any Old Securities.
15. You shall take such action as may from time to time be requested
by the Company (and such other action as you may deem appropriate) to furnish copies
of the Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery (as
defined in the Prospectus) or such other forms as may be approved ITom time to time by
the Company, to all persons requesting such documents and to accept and comply with
telephone requests for info1111ation relating to the Exchange Offer, provided that such
jnfonnation shall relate only to the procedures for accepting (or wjthdrawmg from) the
Exchange Offer. 111e Company will furnish you with copies of such documents upon
2487S-o0;35ILEGAL 12945030.3
2007-05-02 08:36am F rem-BANK OF NEW YORK 212 815-5704 T -359 007l011 F-781
your request. An other requests for infonnation relating to the Exchange Offer shaH be
directed to the Company, Attention: Bruce N. Williams.
16. You shall advise by facsimile transmission Broce N. Williams, the
Vice President and Treasurer of the Company (at the facsimile number [phone]),
and such other person or persons as the Company may request, daily (and more
frequently during the week irnmediately preceding the Expiration Date if requested) up to
and including the Expiration Date, as to the number of Old Securities which have been
tendered pursuant to the Exchange Offer and the items received by you pursuant to this
Agreement, separately reporting and giving cumulative totals as to items properly
recdved and items improperly received. In addition, you will also inform, and cooperate
in making available to, tIle Company or any such other person or persons upon oral
request made from time to time prior to tIle Expiration Date of such other information as
they may reasonably request. Such cooperation shall inc1ude. without limitatio~ the
granting by you to the Company and such person as the Company may request of access
to those persons on your staff who are responsible for receiving tenders, in order to
ensure that immediately prior to the Expiration Date the Company shaH have received
information in sufficient detail to enable it to decide whether to extend the Exchange
Offer. You shall prepare a final list of all persons whose tenders were accepted, the
aggregate principal amount of Old Securities tendered and the aggregate principal
amount of Old Securities accepted and deliver said list to the Company.
17. Letters of Transmittal and Notices of Guaranteed DeUvery shall be
stamped by you as to the date and. after the expiration of the Exchange Offer, the time, of
receipt thereof and shall be preserved by you for a period of rime at least equal to the
period of time you preserve other records pertaining to the transfer of securities. You
shall dispose of unused Letters of Transmittal and other surplus materials by retUrning
them to the Company.
18. For servicas rendered as Exchange Agent hereunder, you shall be
em1tIed to such compensation as shall be agreed in writing between the Company and
you. The provisions of this section shall SUI'/ive the termination oft11is Agreement.
19. You hereby acknowledge receipt of the Prospectus and the Letter
of Transmittal. Any inconsistency between this Agreement, on the one band, and the
Prospectus and the Letter of Transmittal (as they may be amended from time to time), on
the Other hand, shall be resolved jn favor of the latter two documents, except wi1:h respect
to your duties, liabilities and indemnification as Exchange Agent.
20. The Company covenants and agrees to fully indemnify and hold
you hannless against any ill1d all 10ss, liability, coSt or expense, inc1uding attorneys' fees
and expenses, incurred without gross negligence or willful misconduct on your part,
arising out of or in COIU1ection with any act, omission, delay or refusal made by you jn
rel1allce upon any signature, endorsement, assignment, certificate, order, request, notice
instnlction or other instml11ent or document believed by you to be valid, genuine and
;2487S-0035/LEGAL 12945030.
2007-05-02 08:36am F rem-BANK OF NEW YORK 212 815-5704 T-359 008/011 F-781
sufficient and in accepting any tender or effecting any transfer of Old Securities believed
by you in good faith to be authorized, and in delaying or refusing in good faith to accept
any tenders or effect any transfer of Old Securities. Tn each case. the Company shall be
:notified by you, by letter or facsimile transmission, of the written asserrlon of a claim
against you or of any other action commenced against you, promptly after you shall have
received any such written assertion or shall have been seIV'ed with SUJrolJ.Ol)S in
connection therewith. The Company shall be entitled to participate at its own expense in
"the defense of any sucl'l claim or other action and, if the Company so elects, the Company
shall assume the defense of any suit brought to enforce any such claim. In the event that
the Company .shall assume d1e defense of any such suit, the Company shall not be liable
for the fees and expenses of any additional counsel thereafter retained by you, so long as
the Company shaH retain counsel reasonably satisfactory to you to defend such suit, and
so long as you have not detem'J.inedj in your reasonable judgmentj that a conflict of
jnterest exists between you and the Company. The provisions of this sectio~ shall
survive the termination oftbis Agreement.
21. You shall BITange to comply with a11 requirements under the tax
laws ofd1e United States, including those relating \0 missing Tax Identification Numbers
and shall file any appropriate reports with the Internal Revenue Service.
22. You shall deliver or cause to be delivered, in a timely manner to
each governmental authority to which any transfer taxeS are payable in respect of the
exchaJ.'lge of Old Securities, the Company s check in the amount of all transfer taxes so
payable; provided however.that you shall reimburse the Company for amounts refunded
to you in respect of your payment of any such transfer taxes, at such tjme as such refund
is received by you.
23. This Agreement and your appointment as Exchange Agent
hereunder shan be constn1ed and enforced in accordance with the laws of the State of
New York applicable to agreements made and to be perforn1ed entirely within such state
and without regard to conflicts of taw prind:ples, and shall inure to dle benefit of, and the
obligations created hereby shall be binding upon, the successors and assigns of each of
the parties hereto.
24. This Agreement may be executed in two or more counterpatts,
each of which shall be deemed to be an original and all of which together shall constitute
one and the same agreement.
25. - II) case any provision of this Agreement shall be invaJid, illegal or
unenfOTceabJe, the validity. legality and enforceability of the remahung provisions shall
not in any way be affected or impaired thereby.
26- Thjs Agreement shall not be deemed or construed to be modified
amended, rescinded, cancel1ed or waived, jn whole or in part, except by a WIitten
2487S.003$fl.EGAI. I 2945030.
2007-05-02 F rem-BANK OF NEW YORK 212 815-570408: S7am T-S59 009/011 F-781
iJ1stmment signed by a duly authorized representative of the party to be charged. This
Agreement may not be modified orally.
27. UJlless Otherwise provided herein, all notices~ requests and other
communications to any party hereunder shall be in writing (including facsimile or similar
writing) and shan be given to such party, addressed to it, at its address or telecopy
number set forti1 below:
If to the Company:
PacifiCorp
825 NE Multnomah Street, Suite 2000
Ponland, OR 97232
Facsimile: [phone]
Attention: Bruce N. Williams
And a copy to:
Perkins Coif LLP
1120 NW Couch Street, Tenth Floor
Portland, OR 97209
Facsimile: [phone]
Attention: Michael C. HalI
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 8 West
New York, New York 10286
Facsimile: [phone]
Attention: James D. Heaney, Vice President
28. Unless tenninated earlier by the parties hereto, this Agreement
shan terminate 90 days fonowing the Expiration Date. NotWithstanding the foregoing,
Sections 18 and 20 shall survive the tenninarion of this Agreement. Upon any
termination of this Agreement, you shall promptly deliver to the Company any
certificates for Securities, fuI\ds or propeny then held by you as Exchange Agent under
this Agreement.
24878-OO35/LEGAL 12945030,3
2007-05-02 08: S7arn From-BANK OF NEW YORK 212 815-5704 T-S59
hereof.
2487R-O035JLEGAL 12945030.3
p. 01 0/011
29.This Agreement shall be binding and effective as of the date
F-781
2007-05-02 08: 37am F rom-BANK OF NEW YORK 212 815-5704 T-359 P.011/011 F-781. .
p1ease acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enc1osed copy.
P ACIFICORP
BY:
Name: Bruce N. Williams
Title: Vice President and
Treasurer
Accepted as of the date
first above written:
THE BANK OF NEW YORK, as Exchange Agent
10-
2487B-OO35ILECiAL J 2~450303
NOTICE OF TENDERS
Dated June 12 2007
THE BANK OF NEW YORK
101 Barclay Street, 8W
New York, New York 10286
June 12, 2007
PacifiCorp
825 NE Multnomah Street, Suite 2000
Portland, Oregon 97232-4116
Re:PacifiCorp - $350 000 000 6.1 0% Series Due 2036 (A Series of First Mortgage
Bonds) (the "New Bonds
Ladies and Gentlemen:
The undersigned, on behalf of The Bank: of New York, as the Exchange Agent
(the "Exchange Agent") under the Exchange Agent Agreement, dated May 2 2007, between the
Exchange Agent and PacifiCorp (the "Company ), hereby notifies the Company that at 5 p.
(New York time) on June 2007 the aggregate principal amount of the 6.10% Series Due 2036
(A Series of First Mortgage Bonds) (the "Old Bonds ) of the Company specified on Schedule A
to this letter had been properly tendered for exchange, received by the Exchange Agent and had
not been validly withdrawn, all in accordance with the terms of the Company s offer to exchange
the Old Bonds for the New Bonds as described in the Company s Prospectus dated May 2, 2007
(the "Prospectus
24878.0035ILEGAL 13226677,
2007-06-11 05:05pm Frcm-BANK OF NEW YORK 212 815-5704 T -934 P. DDZ/DD2 F-758
Sincerely,
THE BANK OF NEW YORK
Title: JAMES D. HEANEY
VICE PRESIDENT
~4878-VO35/LEGALI3226677.4
SCHEDULE A
The following 6.10% Series Due 2036 (A Series of First Mortgage Bonds) have
been properly tendered for exchange and received by the Exchange Agent prior to 5 :00 p.
New York City time on the June 11 2007 expiration date and have not been validly withdrawn.
Registered
Holder
CUSIP No.Principal Amount Principal Amount
Held Tendered for Exchange
$340 000 000 $333 300 000
$10 000 000 $10 000 000
$350,000 000 $343 300 000
Cede & Co.
55 Water Street
New York, NY 10005
Cede & Co.
55 Water Street
New York, NY 10005
Aggregate Principal
Amount to be
Exchanged:
695114CA4
U69458AA2
24878-003 S/LEGALI3226677.4