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HomeMy WebLinkAbout20090522Notice of Affiliate Transaction.pdf. ~2!~,&~OUNTAIN f'(EC!:: l 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