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Home My WebLink About20090107Compliance Filing.pdf- - ~ ~tEf9cEl=RE.Ci: \ '" E. 0. .. i;..." . 1 M~\\:45Janua 7, 2009 inn~ J~N - li:~4 \ ~ ç~ VI OVERNIGHT DELIVERlfT\~R~~t idî,i~S£iS'¡O¡'¡ Pa Po I Rocky Mountn Por IPatCrp Ene 825 NE Multom. Suit 190 LeT Portand. Oreon 9722 Idao Public Utilties Commssion 472 West Washington Boise, il 83702-5983 Attention:Ms. Jean D. Jewell Commission Secreta Re: Idaho Docket No. P AC-E-05-08 Compliance Filng To the Idaho Public Utilities Commssion: PacifiCorp submits the attchment in compliance with the Commssion's Order in ths case issued on Februar 13,2006 and amended on March 14,2006. The Order approved the Stipulation supporting the acquisition ofPacifiCorp by MidAerican Energy Holdings Company. Commitment 120 of the Stipulation provides that PacifiCorp will provide to the Commssion, on an informational basis, credit rating agency news releases and fial 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 fid the attached report related to PacifiCorp. Very trly yours, ~Lm~ Bruce Wiliams Vice President and Treasurer Enclosure ,.- -. RESEARCH Research Update: MidAmerican Energy Holdings Co., Subs Ratings Affrmed; Remain On Watch Neg Publication dae: Primary Credit Anaivst: 17-Dec-2oo8 Anne Selting, San Francsco (1) 415-371-5009; anne_seltlng(§standardand poors.com Rationale On Dec. 17, 2008, Standard & Poor's Ratings Services affirmed the ratings of HidAerican Energy Holdings company (MEC) and those of its U.S. regu1ated subsidiaries, including the electric utilities PacifiCorp and MidAerican Energy Company, and the gas pipelines operations of Northern Natural Gas Co. and Kern River Gas Transmission Co. The ratings of HEHC and these subsidiaries remain on CreditWatch with negative implications. The affirmtion follows the anoucement today that HElC and Constellation Energy Group (BBB!WatchNeg!A-2) have terminated MElC's $4.7 billion planed acquisition of Constellation. Constellation has instead elected to pursue an alternative proposal received Dec. 3 from Electricitê de France International (EDFI), a subsidiary of Electricitê de France S.A. (AA-!WatchNeg!A-l+) . EDFI has bid $4.5 billion for a 50% ownership interest in Constellation's nuclear assets. Constellation's shareholder vote to considerthe MEC acquisition, scheduled for Dec. 23, has been cancelled. CreditWatch The creditWatch listing reflects our intent to reassess HEMC's future businessstrategy, which may be inconsistent with the company's current 'A' category rating. Current ratings have clearly been conditioned on MEC focusing squarely on regulated, integrated electric and gas operations. By contemplating the acquisition of a predominately merchant generation company such as Constellation, MEC has demonstrated a willingness to increase its own business risk profile. The resolution of the CreditWatch listing will consider MElC's ongoingbusiness strategy, its revised financial projections, and its future f:inancial policy (including the ultimate disposition of the sizable payments MEe hasreceived from Constellation in lieu of closing the transaction). Addit:ionally.we will evaluate the existence and permanence of the sizable capital aV"ailable to HEMC via Berkshire Hathaway, Inc. (AA/Stable!A-1+), which owns approximately 8B% of MEC's common voting stock.constellation anounced today it has paid MEC $175 million in termination fees, and about $435 million in cash, which consists of a preferred dividend payout of $17 million and $418 million, reflecting the conversion of a portion of MEC's preferred shares. In addition, MERe :is receiving nearly 20 million shares of Constellation common stock. representing a nearly 10% ownership stake. Constellation is also expected to imminently repay a $1 billion note owed to MERC which would otherwise bear 14% interest and be due at the end of 2009. To fund the $1 billion equity infusion MERC provided to Constellation in late September HEMe issued a like amount of trust preferred stock to its ultimate parent, Berkshire. This obligation, with an 11% coupon, remainsoutstanding. .. Ratings List Ratings Affirmed MidAer1can Energy Holdings Co. Corporate Credit Rating A-!Watch Neg!-- MidAerican Energy Co.PacifiCorpCorprate Credit Rating Comercial PaperLocal currency A-/Watch Neg!A-1 A-l/Watch Neg Northern Natural Gas Co. corprate Credit Rating A/watch Neg/-- Kern River Gas Transmission Co.Senior secured A- /Watch Neg Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at ww.ratingsdirect.com. 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