HomeMy WebLinkAbout20090522Notice of Affiliate Transaction.pdf.
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20ng MAY 22 AN 10: i 3 Daniel E. Solander
Senior Counsel
201 South Main, Suite 2300
SaltLake City, Utah 84111
(801)220-4014
May 22, 2009
VI OVERNIGHT DELIVERY
Idaho Public Service Commission
472 W. Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Attention: Jean D. Jewell
Commission Secreta
RE: PacifiCorp Notice of Affliate Transaction
Case No. P AC-E-05-08
Dear Ms. Jewell:
Ths letter will serve as notice pursuat to Commtment 117(2), incorporated in the Idaho
Public Utilties Commission Order No. 29973 issued Februar 13 2006, as supplemented by
Order No. 29998 March 14,2006, in the above-referenced proceeding, approving the acquisition
ofPacifiCorp by MidAerican Energy Holdings Company, concerng certin afliate
transactions. Whle this may not be an affiliate transaction, as defined by state law, in all of the
states in which PacifiCorp does business, in the interests of unformity notice of the transactions
is being provided in all six PacifiCorp states. The transactions were negotiated at ars-length,
and are supported by the agreements described below.
Kern River Gas Transporttion Company Agreements
PacifiCorp and Kern River Gas Transporttion Company ("Kern River") are both wholly-
owned, indirect subsidiares of MidAerican Energy Holdings Company ("MEHC"). Kern
River is a natual gas transporttion pipeline company that owns and operates the Kern River
pipeline system, which is a vita arery transporting natual gas to Californa, Nevada and Uta.
Kern River is in the process of conducting certin testing to determine whether it can increase its
pipeline pressure along portions of its pipeline route deemed "areas of consequence." Portions
of Kern River's pipeline in Salt Lake City, Uta, on which testing will be conducted are located
adjacent to the Company's Termin to Camp Wiliams transmission corrdor propert. The
Company and Kern River are entering into the Agreement to allow Kern River to enter the
Company's propert in four places to access Kern River's pipelines for the proposed testing.
Kern River will pay PacifiCorp approximately $14,000 for the right of entr, which is
based upon the estimated market value of the underlying property.
Idaho Public Utilties Commission
May 22, 2009
Page 2
Nalco Company Agreement
PacifiCorp is a wholly-owned subsidiar of MidAerican Energy Holdings Company
("MEHC"). MEHC is a wholly-owned subsidiar of Berkshire Hathaway, Inc. Nalco is a
fiancial subsidiar of Nalco Holding Company, a publicly-trded company. Durg the fourh
quaer of 2008, Berkshie Hathaway, Inc., purchased 8,739,100 shares of Nalco Holding
Company, creating an approximate six percent ownership interest.
Nalco provides the Company with cert water treatment facilties, chemicals and
expertise and has been doing so for more than thi years. Nalco provides generation plant
engineering assistace and supplies certn water treatment and dust suppression chemicals.
Additionally, Nalco may provide no-cost consulting services and techncal assistace for water
treatment programs for new generation plant development. The Company uses water as a major
component of operating its generation facilties. The Company procures water treatment
services for effective, effcient and safe operation of its generation facilties. These services
benefit the public by ensurg the Company's generation facilties operate and provide customers
with cost-effective energy. The curent agreement with Nalco became effective Janua 1, i007,
well before Berkshire Hathaway Inc.'s ownership interest began, and terminates December 31,
2009.
Constellation Energy Commodities, Inc. Agreement
On December 17, 2008, MEHC and Constellation Energy Group jointly terminated an
acquisition agreement. As par of the termination, MEHC now holds an approximate 7.45
percent common stock interest.
Prior to entering into the above trsaction, MEHC and Constellation Energy Group
entered into two agreements, the International Swap Dealers Association Master Agreement, and
Amendment Number One to the International Swap Dealers Association Master Agreement
("ISDA") that generally allow the Company and Constellation to conduct business with each
other if they so choose, effective December 13, 2001. Amendment Number One to the ISDA,
effective July 5, 2007, replaced a Master Power Purchase and Sale Agreement that became
effective September 10, 2001, all of which was prior to the existence of an affliate relationship
between the Company and Constellation.
Please call Danel Solander at (801)220-4014 or Ted Weston at (801)220-2963 if you
have any questions regarding ths filing.
Very Truly Yours,
eß eyKL se~ / jJJ
Vice President, Regulation - v I
Rocky Mountan Power
Cc: Scott Woodbur/IPUC