20061103Notice of affiliate transaction.pdf

One Utah Center, 22nd Floor
201 South Main
Salt Lake City, UT 84111
RECEIVED Please Reply To:
ROCKY MOUNTAIN
POWER
AOM$IOMOf MO'~
IDAHO HJbLiC
UTILITiES COt\M.1ISSIOh
200G NOV - 3 AM 10: 03 Dean S. Brockbank, Senior ~ounsel
SUIte 2200
Direct Dial (801) 220- 4568
Fax [phone]
email:
dean. brockban k~pacificorp .comNovember 2 2006
VIA OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472 West Washington
Boise, ID 83702-5983
Attention:Jean D. Jewell
Commission Secretary
Re:PacifiCorp Notice of Affiliate Transaction
Docket No. P AC-05-
Dear Ms. Jewell:
This letter will serve as notice pursuant to Commitment I 17(2), incorporated in the Idaho
Public Utilities Commission Order No. 29973 issued February 13 2006, as supplemented by
Order No. 29998 March 14 2006, in the above-referenced proceeding, approving the acquisition
ofPacifiCorp by MidAmerican Energy Holdings Company, that PacifiCorp intends to enter into
the following new transaction with an affiliate:
A natural gas Firm Transportation Service Agreement ("Agreement") between
PacifiCorp and Kern River Gas Transmission Company having a contract demand
of 91 000 dth/day, for an initial term of 30 years commencing on February 1
2007.
Although this is an affiliate transaction, the parties negotiated the Agreement at arms-
length. A copy of the Agreement that will be executed is attached hereto for your reference as
Exhibit
Please call me at the above number or Brian Dickman at [phone] if you have any
questions regarding this filing.
Sincerely,
~~
;;;13KXiw
/\
Dean S. Brockbank
Senior Counsel
EXHIBIT I
FIRM TRANSPORT A TION SERVICE AGREEMENT
CONTRACT NO. -C:::contract nbr:::-
THIS AGREEMENT is made and entered into this .:::execution _date jormal? by and between
KERN RIVER GAS TRANSMISSION COMPANY a Texas general partnership, hereinafter
called "Transporter " and PACIFICORP a Corporation incorporated/formed under the laws of the
State of Oregon hereinafter called "Shipper
WHEREAS, Shipper has acquired or intends to acquire a supply of Natural Gas which can be
delivered to Transporter s pipeline system and redelivered by Transporter to Shipper or for Shipper
account at Delivery Points on Transporter s system;
WHEREAS, Shipper desires Transportation service from Transporter in accordance with
Transporter s Rate Schedule KRF-, for firm incremental rate service related to the 2003 Expansion
Project, on file with the FERC, as amended from time to time; and
WHEREAS, Transporter is willing to render such Transportation service.
NOW, THEREFORE, in consideration of the mutual covenants and agreements as herein set forth
the parties hereto agree as follows:
ARTICLE I - GAS TO BE TRANSPORTED
1.1 Subject to the terms, conditions and limitations hereof, Transporter agrees to receive, on a
firm basis, from Shipper for Transportation at the Receipt Point(s) specified in Exhibit "
hereto, as amended from time to time, and to transport and deliver Thermally Equivalent
Quantities to Shipper at the Delivery Point(s) specified in Exhibit "A" hereto, as amended from
time to time, Quantities of Natural Gas, exclusive of Quantities required for fuel used and lost
and unaccounted-for Gas, up to Shipper s TMDQ, which is 91 000 Dth per day. Shipper
DMDQ is equal to Shipper s TMDQ.
1.2 Shipper will reimburse Transporter for fuel used and lost and unaccounted-for Gas on an in-
kind basis at the factors applicable to incremental rate service related to the 2003 Expansion
Project, pursuant to the General Terms and Conditions of Transporter s tariff as filed with the
FERC to be effective on the date Transporter commences service, and as amended from time
to time.
Page 1 of9
ARTICLE II - APPLICABLE RATE SCHEDULE
Shipper agrees to pay Transporter for all Natural Gas Transportation service rendered under
the terms of this Agreement in accordance with Transporter s Rate Schedule KRF -, as filed
with the FERC to be effective on the date Transporter commences service, and as amended
from time to time. This Agreement will be subject to the provisions of such Rate Schedule and
the General Transportation Terms and Conditions applicable thereto on file with the FERC and
as amended from time to time, which by this reference are incorporated herein and made a part
hereof.
Shipper s rates for Transportation service shall be in accordance with the rates set forth in
Exhibit B. In accordance with the Federal Energy Regulatory Commission s Policy Statement
on Alternatives to Traditional Cost-of-Service Ratemaking, Transporter will submit the
negotiated rates reflected on Exhibit "B" to the Commission for review prior to flowing gas
under this Agreement. If the Commission disallows the negotiated rates, Shipper s rates for
Transportation service shall be in accordance with the rates set forth in Alternate Exhibit "8."
Notwithstanding Section 5.5 of the General Terms and Conditions, and subject to any
negotiated credit, Shipper will make payment of the Monthly Reservation Charge pursuant
hereto in full irrespective of (but without prejudice to the rights otherwise of Shipper with
respect to) any dispute relative to the amount invoiced, and will not be entitled to any
abatement of such payment or any set-off against it, including but not limited to, abatement or
set-off due or alleged to be due by reason of any past, present or future claims or other rights
of Shipper against Transporter or any other person or entity, whether in connection herewith or
any unrelated transaction.
ARTICLE III - TERM OF AGREEMENT
3.1 This Agreement will become effective on February 1 , 2007 and will remain in full force and
effect through January 31 , 2037.
ARTICLE IV - NOTICES
4.1 Any notice called for in this Agreement will be given in writing and will be considered as
having been given if delivered personally, by confirmed facsimile or by mail with all postage
and charges prepaid to either Shipper or Transporter at the place designated. Routine
communications will be considered as duly delivered when mailed by ordinary mail. Normal
operating instructions can be made by telephone, electronic media or confirmed facsimile.
Unless changed, the addresses of the parties are as follows:
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Transporter:
KERN RIVER GAS TRANSMISSION COMPANY
Attention: MARKETING & CUSTOMER SERVICES
2755 E. Cottonwood Parkway S-300
Salt Lake City UT 84121
Facsimile: [phone]
. Shipper Notices:
ACIFICORP
Attention: Contract Administration
825 NE Multnomah, Suite 600
Portland, Oregon 97232
Facsimile: [phone]
Shipper Invoices:
P ACIFICORP
Attention: C&T Back Office
825 NE Multnomah, Suite 700
Portland, Oregon 97232
Facsimile: [phone]
ARTICLE V - SUCCESSORS AND ASSIGNS
5.1 This Agreement will be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. No assignment or transfer by either party hereunder will be
made without the written consent of the other party. Such consent will not be unreasonably
withheld. No such consent of Transporter or Shipper will be required when an assignment by
Shipper or Transporter is the result of, and part of, a corporate acquisition, merger or
reorganization. Nothing contained herein will prevent either party from pledging, mortgaging
or assigning its rights hereunder as security for its indebtedness and either party may assign to
the pledgee or mortgagee (or to a trustee for the holder of such indebtedness) any money due
or to become due under this Agreement. As between the parties hereto, such assignment will
become effective on the first day of the month following written notice that such assignment
has been effectuated. Upon request of either party, the other party will acknowledge in writing
any permitted assignment described herein and the right of any permitted assignee (and any
assignee upon enforcement of any assignment made as security for indebtedness) to enforce
this Agreement against such other party, and will also deliver such certificates, copies of
corporate documents and opinions of counsel as may be reasonably requested by such
permitted assignee relating to such party, this Agreement and any other matters relevant
thereto. No permitted assignment will relieve the assigning party from any of its obligations
under this Agreement. Shipper hereby confirms that the rights of Transporter under the
Agreement that may be assigned include any right given or reserved to Transporter in the
Agreement to consent to any assignment or transfer by Shipper of its rights and obligations
thereunder.
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ARTICLE VI - GOVERNMENTAL BODIES
6.1 Notwithstanding any other provision hereof, this Agreement will be subject to all laws
statutes, ordinances, regulations, rules and court decisions of governmental entities now or
hereafter having jurisdiction.
ARTICLE VII - MISCELLANEOUS PROVISIONS
7.1 This Agreement will be amended only by an instrument in writing executed by both parties
hereto.
No waiver by any party of anyone or more defaults by the other in the performance of any
provisions of this Agreement will operate or be construed as a waiver of any future default or
defaults, whether of a like or of a different character.
No liability for any act or omission of Transporter will be incurred by, or asserted against, any
person or company which is a partner in Kern River Gas Transmission Company, or any
owners, subsidiaries or affiliates of the partners. Any recourse for any liability of Transporter
will be against Transporter only.
7.4 The headings of the Articles of this Agreement are inserted for convenience of reference only
and will not affect the meaning or construction thereof.
This Agreement will be construed in accordance with the laws of the State of Utah.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first set forth above.
.:::signatory _block?
Page 4 of9
EXHIBIT "
TO FIRM TRANSPORTATION SERVICE AGREEMENT
DATED: .:::execution date?
CONTRACT NO: ':::contract nbr?
BETWEEN
ACIFICORP
AND
KERN RIVER GAS TRANSMISSION COMPANY
SHIPPER'S DMDQ: 91 000 Dth per day -
Delivery Point( s)
Lake Side
Meter Receipt Point Receipt Pressure
Number Loc. Type Entitlements si
g)
- 2/
014010 Physical 000 Dth/d 1200
Meter Delivery Point Delivery Pressure
Number Loc. Type Entitlements - 3/
024032 Physical 000 Dth/d 650
Receipt Point( s)
Goshen
1/ The Receipt Point Entitlements and Delivery Point Entitlements specified on this Exhibit "
must each be equal to (1) Shipper s DMDQ, if this is an original Exhibit "A" or (2) the Receipt and
Delivery Point Entitlements set forth on the original Exhibit "A" to the agreement, if this is an
amended Exhibit "
2/ The minimum pressure at which Shipper will be obligated to cause Gas to be delivered to
Transporter for Shipper s account at the Receipt Point (s).
3/ The maximum pressure at which Transporter will be obligated to deliver Gas for Shipper
account at the Delivery Point (s).
Page 5 of9
EXHIBIT "
TO FIRM TRANSPORTATION SERVICE AGREEMENT
DATED: .:::execution date?
CONTRACT NO: ':::contract nbr?
BETWEEN
ACIFICORP
AND
KERN RIVER GAS TRANSMISSION COMPANY
SHIPPER'S DMDQ: 91 000 Dth per day
EFFECTIVE: February 1 2007
NEGOTIATED RATES
Reservation/Demand Charges:
Shipper will pay Transporter daily reservation/demand charges on a total quantity of 91 000 Dth per
day, determined as follows:
1. For all quantities not scheduled, up to 91 000 Dth per day, Shipper will pay Transporter a
discounted firm daily reservation/demand rate of $0.09 per Dth for the entire term of the
agreement.
2. For scheduled quantities from the Goshen receipt point to the Lake Side or West Valley
delivery points, Shipper will pay Transporter a discounted firm daily reservation/demand
backhaul rate of $0.09 per Dth for the entire term ofthe agreement.
3. For scheduled quantities from the Goshen receipt point to all delivery points north of the
Goshen receipt point from February 1 , 2007 through January 31 , 2008, Shipper will pay
Transporter a discounted firm daily reservation/demand backhaul rate of $0.09 per Dth.
4. For scheduled quantities from the Goshen receipt point to delivery points north of the Goshen
receipt point and south of the Coyote Creek compressor station, other than the Lake Side and
West Valley delivery points , from February 1 2008 through January 31 , 2037, Shipper will
pay Transporter a discounted firm daily reservation/demand backhaul rate of $0.12 per Dth.
5. For scheduled quantities from the Goshen receipt point to all delivery points north of the
Coyote Creek compressor station from February 1 2008 through January 31 , 2037, Shipper
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will pay Transporter s maximum firm daily reservation/demand rate under Rate Schedule
KRF-1 for firm incremental rate service related to the 2003 Expansion Project at the time
service is rendered, or a discounted firm daily reservation/demand backhaul rate mutually
agreed to by Transporter and Shipper.
Commodity/Usage Charges:
The Commodity/Usage Rate for all capacity scheduled by Shipper or any replacement
Shipper pursuant to paragraphs (2) through (5) above shall be the lesser of $0.005 per Dth or
the maximum rate under the KRF-1 Rate Schedule for firm incremental rate service at the
time service is rendered, plus all applicable surcharges, for the entire term of the agreement.
Transportation Charges for All Other Transportation Paths and for Authorized Overrun
For all other scheduled quantities, including quantities in excess of Shipper s DMDQ,
Shipper will pay Transporter a Total Rate that is calculated as follows:
Total Rate = Maximum Rate + Applicable Surcharges + Index Spread Adjustment
Where:
Maximum Rate = The sum of the maximum firm daily reservation/demand rate and the
maximum commodity/usage rate under Rate Schedule KRF-l for incremental rate service
related to the 2003 Expansion Project
Index Spread Adjustment* = ((Others "SoCal Gas" - Rockies "Kern River, Opal Plant") - Maximum
Rate)) x .
*Based on the Daily Price Survey, Flow Date Midpoint spot price reported in the Platts Gas Daily
publication for the day of scheduled transportation.
In no event will the Total Rate, less applicable surcharges, be less than the
Maximum Rate described above. The parties understand and agree that
Transporter may change its rates and/or surcharges from time to time in
accordance with the Natural Gas Act.
Page 7 of9
ALTERNATE EXHIBIT "
TO FIRM TRANSPORTATION SERVICE AGREEMENT
DATED: .:::execution date?
CONTRACT NO: ':::contract nbr?
BETWEEN
ACIFICORP
AND
KERN RIVER GAS TRANSMISSION CaMP ANY
SHIPPER'S DMDQ: 91 000 Dth per day
EFFECTIVE: February 1 2007
DISCOUNTED RATES
Reservation/Demand Charges:
Shipper will pay Transporter daily reservation/demand charges on a total quantity of 91 000 Dth per
day, determined as follows:
1. For all quantities not scheduled, up to 91 000 Dth per day, Shipper will pay Transporter a
discounted firm daily reservation/demand rate of $0.09 per Dth for the entire term of the
agreement.
2. For scheduled quantities from the Goshen receipt point to the Lake Side or West Valley
delivery points, Shipper will pay Transporter a discounted firm daily reservation/demand
backhaul rate of $0.09 per Dth for the entire term of the agreement.
3. For scheduled quantities from the Goshen receipt point to all delivery points north of the
Goshen receipt point from February 1 , 2007 through January 31 , 2008, Shipper will pay
Transporter a discounted firm daily reservation/demand backhaul rate of $0.09 per Dth.
4. For scheduled quantities from the Goshen receipt point to delivery points north ofthe Goshen
receipt point and south of the Coyote Creek compressor station, other than the Lake Side and
West Valley delivery points, from February 1 , 2008 through January 31, 2037, Shipper will
pay Transporter a discounted firm daily reservation/demand backhaul rate of $0.12 per Dth.
Page 8 of 9
5. For scheduled quantities from the Goshen receipt point to all delivery points north ofthe
Coyote Creek compressor station from February 1 , 2008 through January 31 , 2037
Shipper will pay Transporter s maximum firm daily reservation/demand rate under Rate
Schedule KRF-1 for firm incremental rate service related to the 2003 Expansion Project
at the time service is rendered, or a discounted firm daily reservation/demand backhaul
rate mutually agreed to by Transporter and Shipper.
6. For all other scheduled quantities, except Authorized Overrun, Shipper will pay
Transporter s maximum firm daily reservation/demand rate under Rate Schedule KRF-
for firm incremental rate service related to the 2003 Expansion Project at the time service
is rendered for the entire term of the agreement.
Commodity /U sage Charges:
The Commodity/Usage Rate for all capacity scheduled by Shipper or any replacement Shipper
pursuant to paragraphs (2) through (6) above shall be the lesser of $0.005 per Dth or the maximum
rate under the KRF -1 Rate Schedule for firm incremental rate service at the time service is rendered
plus all applicable surcharges, for the entire term of the agreement.
Authorized Overrun Charges:
For all scheduled quantities in excess of 91 000 Dth per day, Shipper will pay Transporter the
maximum authorized overrun rate at the time service is rendered, plus all applicable surcharges.
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