20080825Compliance Filing.pdf

~ ~~çælf9l!
20
Pa1C Por I
Rocky ..ountan Por IPaCorp Ener
825 NE Multnomàh Suite 1900 LeT
Portland, Oreon 97232
VI OVERNIGHT DELIVERY
August 25, 2008
Idaho Public Utilities Commission
472 West Washington
Boise,ID 83702-5983
Attention:Ms. Jean D. Jewell
Commssion Secreta
Re: Idaho Docket No. PAC-E-05-08 Compliance Filng
To the Idaho Public Utilities Commission:
PacifiCorp submits the attchment in compliance with the Commission's Order in ths case
issued on Februar 13,2006 and amended on March 14,2006. The Order approved the
Stipulation supporting the acquisition of PacifiCorp by MidAerican Energy Holdings
Company.
Commitment 120 ofthe Stipulation provides that, PacifiCorp will provide to the Commssion, on
an informational basis, credit rating agency news releases and final reports regarding PacifiCorp
when such reports are known to PacifiCorp and are available to the public.
Therefore, in compliance with Commitment 120 of the Stipulation, please find the attched report
related to PacifiCorp.
Very try yours,~lJ~
Bruce Wiliams
Vice President and Treasurer
Enclosure
Fitch Press Release Page i ot2
? \i.
Fitch: info Center: Press Releases
Fitch Amrms Ratings for MidAmerican Energy Holdings Co., PacifiCorp and
MidAmerlcan Ene Co.ߧUlJS
13 Aug 200811:11 AM
Fitch Ratìngs-Chicao-13 August 2008: Fich Ratings has affrmed the ratings fo MidAerican Energy Holdings Co.
(MEHC) and its subsidiaries, Pacif\Cor (PPW), MidAmerican Energ Co. (MEC) and MidAerlcan funding Corp. (Funding)
as folows:
MEHC-Issur De 66+';
-Senior d debt
-Trust preferred stock at '66B';
-Short~term lOR at 'F2'.
PPW
-i DR at 'BBB';
-Senior secured debt at 'A-';
-Senior unseured debt at '86B+';
-Prefrred stock at 'BB8';
-Shortoerr lOR/commercial pa:prat 'F2',
MEC
-lOR at 'A-';
-Senior secure debfat ~A+';
-Senior unsecured debt at 'A';
-Preferred stOGkat 'A-';
-Short-term IOR/còmmercial. paperet 'F1',
Funding
-lOR at '6B6+';
-Senior secure debt at 'A-',
Approximately $11.23 bilion of debt iSaffecéd. The Ratng Outlok for ¡ill entíiésis Stable,
The ratings for MEHC reflect the company's diversed, relatiely preictble cash flows and low business risk profiie.
MEHC's regulated operations consist of two domstic utilties two domestc natura! gas pipelines, and tw electri
distrbuion companies in the UK. The operating subsidiaries benefi frm solid stand-lone credit profiles,
consistnt cah flows, and provide the parent company with georaphic and oprational diversity. Regul .
pipeline operations currentl account for approximately 920Ai of consolidated opeating income. Fitch's rating analysis also
takes into considerati and explicit support frm principal shareholdr Beshire Hatway Inc. (BRK,lOR 'MA', fim.mcial resorcs and appetit for capital investments In utility and
plpellnes secors is consistent with MEHC's significant capital spending plans. Fitch cosider the diversit of MEHC's cash
flows and 8RK's explicit financial support to MEHC and its subsidlanes and the absence offied shreholder dividend
payment. The are mitigants to financial leverage at MEHC in excess of Fitch's guidelines for the 'B88+' category.
The ratings.affrmationforPPW1akes into.consideraton the company's solid finénclal position, competitive rescuree base,
and relatively constrctie or balanced regulatory environments. The current ratngs and Stable Outook assume PPW
continues to benefit from parent company sUtlrt.and will røcive reasonable outcomes in pending and fUure rate
proceedings to recover anticipated, significant capitl investment Rating concerns facing thEcompany primarily relate to
cost overrns and the potentialinabmty to recover it barge, planned capital investment on a timeiy basis in a service terrory
that spans six states. PPW has significant planned investment in new plant to meet its load requirements and its growing
gas-fire generating capacity. PPW's capital invetmnt is expededtoincrease to $2.2bUlion in 2008 from $1.5 bi/ion in
2007 and spand!non new plant and equipment over the next 10 year is estimated at $:20 bilion. AdditionallY, the company
faces exposure to hign commodit costs in the event of a prolonged, unscheduled baseload plant outage during a period of
high demand.
The ratingsafrmation for MEC and Funding reflect the utilits low busines risk profile, stong creitmetres, loW debt
http://www.fitchratings.com/creditdesklpress _releasesldetai1.cfm?print= 1 &pr _id=429318 8/1912008
Fitch Press Release Page 2 of2
leverage anq a rel$~velysuPfrtvel'glilatoly environment lrilow. WhichlsMEC'slarge¡st jurìdi MEC furter benefits
from a soid eom¡:etîvø positicin and stbleoperatìng perf0lT8nCé. The prmary MEe Nilig. .Iude relatively high
prjected capital expenditure through 200, risk of potential cost over-runs, and moderate cQImØØexpøsure due toa
lack of an elec fuel adjustment clause in Iowa and Illinois. The absence ofa fuel clause is mitigated by the company's
long capacit poSiion and its abôve 20% reserve margin. Funding Is an intermediateholdinglfnancing company that is
wholly (lWneq subsidiåry (lfMEHC $nd the directparenfof MEC. Funding's ratin.gsare.baseon the creditClualityofMEC,
which is the priary source of cash flow to service debtooligatìons, as well as dowstram support and resourcsfrört
BRK.
MEHC, a majori-oned (86.6%) subsidiary of BRK, provides electric and gas service to approximately 6.9 millon
customers worldwide through ils ret¡l¡ subsidiaries. MEHC also has a 50%interest in CE Generation LLC, a power project
holding oopanywit US geoteral and gas..tire power prOject.
Contact: Karen Andersn [phone], Chicago; or Glen Grabelsky +1-212~g08-o577, New York.
Media Reiations: Cindy Stoller. New York, Tel: [phone].
Fitch's rang definítons and the terms of use of such ratings are Qvaîlble on the agency's public site.
.ww.fitchrangs.com..Publishedrangs.crteria and methodlogies are available from this site, at all times. Fitch's cod of
conduct, confidentiality, conflicts of interest, afliate firewall, compliance and other relevant policies and prcedures are also
available from the 'Code of Conduct' section of this site.
Copyriht ~ 2008 by Fìtcl. Inc.. Fitch Rallngs Ltd. and il subsdiaries.
htt://www.fítchatings.comJcterìt:dei:k/pre8s_releaJ;e8/detail.cfu?print= 1 &pT_id=4293 1 8 81l9120m~