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HomeMy WebLinkAbout20100819Compliance Report.pdf~ l:~£æiQ;cR REe£ g""',.~ .~Pa Po I Rocky Montan Po IPa Ene 825 NE Multom. Suit 1900 LeT Portd, Oregon 97232 ?t\ '3: GO i~\\\ ~UG '9 Augut 19,2010 VI OVERNIGHT DELIVERY Idaho Public Utilties Commssion 472 West Washigton Boise, ID 83702-5983 Attntion:Ms. Jean D. Jewell Commssion Secreta Re: Idaho Docket No. P AC-E-05-08 Compliance Filng To the Idaho Public Utilties Commission: PacifiCorp submits the attchments in compliance with the Commssion's Order in ths case issued on Febru 13,2006 and amended on March 14,2006. The Order approved the Stipulation supportg the acquisition ofPacifiCorp by MidAerican Energy Holdigs Company. Commtment 120 of the Stipulation provides tht PacifiCorp will provide to the Commission, on an informational basis, credit rating agency news releases and finl reports regarding PacifiCorp when such reports are known to PacifiCorp and are available to the public. Therefore, in compliance with Commtment 120 of the Stipulation, please fid the attched report related to PacifiCorp. Very try your,~~ Bruce Wiliams Vice President and Treasurer Enclosure MOODy'S INVESTORS SERVICE Credit Opnion: PacifCorp Global Credit Research. 06 Aug 2010 Poran. Ore, Uriit Sla caOuU Issuer Rating First Moage Bonds Seor Secured Sr Unsec Bank Cret FacDit Senior Unecre MT Prefered Stock Commerial PapeUlt Pant: Berk Hat 1m:OuUIsue Rat Senior UnecureST Isue RatPant MI En Hong CoOuU Sr Unec Ban Cret Faclit Seio Uneced Moos RangSt Baa1 Ki Ki Baa1 Ba1Ba P-2 Stafifi P.1 Stae Ba1 Ba1 MaLaura Schuac/Ne '\ Wil L HesJN '\ Ph 212.55.38212.55.387 (1JPaACUAL (CFO PreWIC + Int) /lnt Exe (CFO PreW/C) / Deb (CFO PreWIC - Divde) / DebDebt I Boo Capizat 1Q10LTM 5.1x24,424 421% 205. 260% 260%42% 203. 17.9% 17.9% 447% 20 4.OX 18.7% 18.7%43,4 (1) Al ra ar caul in accordance wi tt Reguled Ele and Ga Utit Rang Mey usin Mxs standd adjustmen No: Fo defi of Moo's most comon ra tes plse see th accomin User's Guide. Rang Drers Supp relato enviroment Mes wel poitoned witin rag ra Reaon dive geng caci Miere gro in serce teCo Pr Pac (Baa1 senio unsecured, sta) is a ve inra elc ut heed in Por. Ore seng 1.7 mHl custoer in po of tt sta of Ut (42% of 20 retD eltrci vomes), Oreg (25%), Wyoing (17%). Washinon (8%), Id (6%) and caora (2%) an also ening in whal poer mar (as a reult of excess elbicit gener or ot syste baangactti) an coa mining actti. PacifCo is an indirt wholed subsidiar of MdAmerca En Hoings Copay (rvHC: Baa1 senio unecured, stable), which is a conolid sUbidiar of Bere Haay nco (BRK: fi Issuer Ra, stae). SUMM RAiNG RAONAL PacifCo's Ba1 rang fo it senior unsecur obigaio is dr by the stabiit of it re cah fl, the georaphcally dive an reatve contrct reulator enroen in which It oprat, tt diifca of it ge poolio, cred mebcs th ar win tt rage ap fo a re utit ra Ba1. Th ra al conid PaciIor's poit as a sUbid of rvHC, a hoin copany whe sUbid ar prarD en in relaed ac.DEM. RAIN CO Reason sup reor enonmen Pacifrp's rang reognies tt related na of it buineses and acknge tt re stalit an prit of cah flassociat wit these opratis. The major of PacifCo's reul ope ar concted in staes th M:s conid avge for U.S. reulor jurisdicti in ters of frewor coistey and predictabiTit of decision and an exon of tiely re of costs andinvetmen. In Ut, Oreg an Califia, PacifCor is ab to ute a foard tet ye which limit reul lag. Whi in Washi and Idho,PaciCo utlies a hiorc test yer wit kn adjutm an in Wyoin, PacifCo uses a hitoc tet year wi kn an meaurab adjustments or a forecast test yer based on Ciumstaes. In an atlpt to minimize reul la an ea it aDed ROEs, PaifCo is exed to fi frue rate caes in all it jurisdictons. n Id, Or, Calia an Wyoing, reul ha aued adusen mecms to rec cha in tt cots of fu and purhaed powe. n Ut, Ore, Washinon, Califoria and Id, PaifCo ha relary too to rec or deer re of the revnue reuireent associaed wi new reab reoue aditns and, in some caes, ot ne sigil invetmen ouide of trdital rae caSes. n Uth, lela pased in Marc 20 al aued tt comissio to apve en cot adjustmen mechaisms. Subseq Pacifrp reuete ap for an ene adtmen mechaism (ECAM. The reuet whch is curr be reulto has pased tt fit phe of tt review whh wa to dein if use of an ECA wa in th pu inret, th utli an Inter are noadessing ra design conide. M:s view fuel an puhaed po adustmen prions as supve to cr qua as ttad predicbilit to ut cash fl an reuce implen la. Ore SB 40 autores th Ore Publc Utit Commissio (OPUC) to se evuae the dience beee ut' incoe ta paid and the amous coleed fr customer and requires the compay to adust rate for tt difen. In Oc 20, PacilCo indica th it is in a $3 miUion under-colte poit fo tt 20 ta yer. n Ap 2010, th OPUC appr a stipulat reched wiPacifrp and OPUC St aDowng PaclfCor to rer $2 milio fo the 2008 ta yer. Witin tt frewor of M:s Auust 20 Rang Meody fo Regat Elec an Ga Utes (tt Me), fo Factor 1:Regul Fraework Pacif map to a ratig factor in tt Baa rang. Th Ba ra re reat enen which are geneDysupve thh Pacor nee onng rate reie. For Fact 2: Ab to Rec Cots and Earn Ret - PacilCo has eney adustmen mechenims in most of it judict and map to a ra faor in the Ba ra. M.ta see teor n 200, PacifCor's reil sal dene by 3% re to 20 re sal, Ov tt medium te, PaciIor is exte to expreaonbl gro of 2-3% anal ov tt ne-ter. Witn the frmew of tt Meol fo Facor 3: Diveifca - Ma Posti,Pac's mulsta sece terr wi an imprng ec envien reul in a ra fato sco in th A ra. Well divifed geerti poolio Pacif beef fr a well-erlfed genon poolio. li 10,48 MN ge 1I is comprsed prmarly of lowost bae lo coa and hyro asset, supping its poitn as a lo cost enrg supier. in 20-20, coa fired capait conbibued 63% an hyd conut 5% of PacifCor's en supp. Natural ga fired ca supie much of tt remaind. In addi, PaciIor has 921 MN of wind capacit which mitga some of it expur to vole natural gas prce. Due to the bance fumix inudng an avege le of col geeraton, win the frmewor of th Me, fo Fac 3: Diveifcaon. Gen and Fue Divit, PacilCor map to a rang fato in tt Baa ra. Cre met coiste wi Baa ra PacCo's cre met are toar th up en of tt ra indi in tt Mey fo ut ra Ba, whh Is cosisten wi PacCor's Ba1 rang. Thro 200, PaCo's rat of cah fr op be chang in wong ca (CFO prW/C) to Debt, cala in accornc wi M:s staard adustmen, we in tt rang of 18-19% end it CFO prW/C inert cov wer in tt ra of 3.8-.1x rae. In 20, met imprve signian wi CFO prWIC to Deb of 26 an CFO prW/C int coe of 5.3x Cah lIów impr due to ra increes, impr margins on whoal po trac an increed defer ta due to bousdeprati. Ove th ner-to-edium te, Mxs antcipa PaciIor's cred met wi reai copara to pr201e wi CFO preW/C to De abve 18% and CFO prW/C interest covra of arnd 4.Ox M:s ancipes tt company wil pr seek ra re fo incred cots reat to it invtmen prm and th any poenal diven pocy wil be eshe in a manne th is sup of th copanys curr credit pr Uqul Pacifrp's Prme-2 sho te rang for comercia pa rel th re sta an predicble cah fl prde by it oponas a reg vertca intraed elec ut. In 20, cah fr opon of $1.5 bi co apxiat 64% of PaclfCor's ou inclu $2.3 bi of ca ex and plan acqisit. Th cash sho wa fund vi a combinaon of in an exeral sou of cah, indi $125 milio of capit con from th pal' an appoximatel $1 biio of first morgag bo issuance in Jaua 20. In 2010, ca eiites are prjeed to be appximatel $1.7 biion. In 2010, Mis do no exp PacCo to ne signifcan fiancig due to th signifcan deine in it cap expit an limited amounts of matring deb. Ov th next few yers, Mu cash shoalls ar exped to be fund from a cobina of inter and exrn sources of cah incng cap contbuon fr the pa an deb financing. PacifiCor's liqid pr is fuer supped by an equit comiten agent, exring Feb 28, 2014, be ~HC, PaifCor's paent, an BRK Pacifor's ultmate pa Uner whic BRK ha comited to pr up to $3.5 billio in eqit to ~HC thro Febar 28,2011 reing to $2 bill thgh Febru 2014. Equifr th agreeen may be reueted to fud ~HC's de obigation or to pr capi to ~HC's rela subsidar, includin PacifCo. Pacif's liquidit poit is sup by a $6 milio revng creit facit avDabl th Octobe 2012, an by a sec $760 miDonreng cr agmen avail th July 2011 afer which av is reed to $720 mil for tt yer enng July 2012 an to $6mDIi fo th yer en Ju 2013. PacifCo re on the reng crit faUites to batop it commer pa prra and to sup it va ra ta-ept bo. As of March 31, 2010, Pacif ha no sho ter de or commerial pa oung and $258milon of th faclit wer used fo leers of cr an to supp varae po co bo. Th facilit do no conn rang tr th wo cae accel or make th faHit una an alo do't reire MA reresen fo boin. Th faitesdo contain a rang sensitiv prng gr and a ficial covan that limit deb to 65% of to capat. As of Marc 31, 2010, PacifCor's deb to caaton ra as dened in the agreen wa 48%. PacifiCo's ne-t matrities incl $5 milio of first morgage bo due Noembe 2011 an $8 miDon of ot first morga bods maturing thoughot 2011. Ove, PacifCo's liqi.dì poiton is fe to be sufen to mee tt compay's cata nees ov tt next to quarer. Rang Qu Th stable ou inces Mxs exp th PacifCor wiH coti to reei reonbl re trent for th re ofit highe ca exre, an th the fund reremen wiH be fi in a man coiste wi manens comitent to maintin a hea fiia pre. W1 Co Ch th Rang . Up While th size of th copay's capi expre liit th prpe for a rang upgra in th ner-ter, th rang cou be upged if reaonbl regulato supp an a conserv finc ca exdit pr res in a sustain impren in creit met. Ths wou include, fo exple, PacifCor's ra of CFO prW/C to Deb remaing in exess of 22%, an CFO pre-W/C + intt execoge reaining abo 4.5)( on a sustanabl bais. W1 Cod Chge th Ra - Do Th ratng could be adjuted doard if PacifCor's plned capi exdires are fu in a man inconisten wi it currfinancial prle, or if tte we to be ade re rulings on curnt an fure ra cases such tha we would anipae a sustane deteri in finanial metres as deonstr, for exple, by a rao of CFO prW/C to Deb falin be 19%, and/or it CFO pre-W/Cint expe coe beng le th 3.9x ov an ex pe. PaCo Facor 1: RegulaFI' ~X Fa 2: Ab to Reer Co an Ea Re X (25) Fa 3: Diercaon (10%) a) Maet Positon (5%)X bi Geer and Fue Divit (5%)XFac 4: Fina Stng Uq & FinaMe (40) a) Liidit (10"Ai)X b) CFO prWC + Int I Intet (7.5%) (3y Avg)X c) CFO prWC I De (7.5%) (3yr Avg)X d) CFO prWC - Diven I De (7.5%) (3y Avg)X e~~ I Capiizat or De I RAV (7.5%) (3y X Rang: a) Pkol hiplie Senior Unecur Rang Ba1 b) Acal Seni Unsecured Ratng Ba1 MOODY'S INVESTORS SERVICE (Ç 2010 Mxs Invetor See, Inc. anor it licor an afes (c~, "tODY'Sj. Al riht reser. CRIT RAINGSAR MOODY'S INVORS SEE,INC:S ("MIS") CURR OPNIONS OF THE RENE FURE CREDI RISK OF ENITIE CR COMITMENS, OR DET OR DE-lSECUS. MI DEES CR RI/I THE RI THAr /I EN MAt NO ME ITS CORAUJI RN/CI OBUGArIO/i THE CO DUE/ID/I ESMAEO FICI LOS IN THE EV OF DEItLT. CRE RAINGS DO NOT JODRSS /I OTHER RI INLUDING BUT NOT UMED TO: UQDI RI MI VAE RIK, OR PRCEWLiu CRDI RAINGSAR NOT STArEMENS OF CURR OR HISTORICA FA. CRDI RA DO NOT COSTITUTEINVMENT OR FlClIOVI/I CR RAAR NOT RECOMMENDArIO TO PURC SELl OR HO PAICUt SECU CR RA DO NOT COEN ON THE SUlIØ OF /I IN\STME FO /I PARUt INOR MIS ISES ITS CRDI RAINGS WTH THE EXArION /lD UNDERST/IDING THA EA INOR VILL MAK ITS 0V STUDY /I E\AT OF EA SECURI THA IS UN CONSDERAIO FOR PU HOG, OR8. AL INORMATION CONTAIED HEREIN IS PROTECTED BY Lß, INLUDIN BUT NOT LMED TO, COPYRIG LJ, AN NONE OF SUCH INORMATION MAY BE COPID OR OTHERWISE REPRODUCED. REPACKAD, FURTHER TRAMlD, TRFERRED. DISSEMNTED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FORIW SUCH PUPOSE, IN WHOLE OR IN PART, INIW FORM OR MAR OR BY fW tÆ WHATSOEVR, BY fW PERSON WITUT roODYS PRIOR WRITNCONENT '" inorat contaned hern is obed by WODYS fr sour beie by it to be accurae an reliab. Bese of th posibili of human or mecic eror as wel as ot fact. hover, aD infat coned hen is prded "AS IS" wiou warnt d an kind roODYS adop aD necessary meaures so thattt inforat it uses in assiging a cre ratng is d sufie quit an fr ree sou; hoev, roODYS do no an cano in ev insta inen veri aud or va inoraton rec in therang press. Uner no cirstace shal WODYS ha an liali to any peon or en fo (a) any loss or damag in wt or in pa caed by, reulng fr, or relng to, any er (ne or otise) or ot cirumstae or co wiin or ouid th con of WODYS or any d it dir, ofcer. empl oragen in conecti wi tt prureen, co, compi. anysis. inter, communica, pucaon or deliw d any such infaton. or (b) any diret, indir spe, coeql, compesa oriniden daag whoe (incluing wiou Umit, lot pr), ev if WODYS is aded in ad of tt posib of such damages, reulng fr tt use d or ina to usè. an such infatn. Th ra,fiial repng analis. projectis, and oter oberons. if any, coting part d th infoati conhen are, and must be contred solel as, staent d opnion an no statemen d fac or reommenti to purhae, sel or ho an securi. Each uSer of the inforaton cone herin must mak it ow study an evaat of each securi it may conid purcing, hoin or sellin. NO WARRN EXRESS OR tJLIED, AS TO TH ACCURY, TM:L1NESS, COM=TENESS, M:RCHABIUTY OR FITSS FORIW PARTICULA PURPOSE OF IW SUCH RATING OR OTHER OPININ OR INFORMATI IS GIN OR MAE BY roODYS INfW FORM OR MAER WHATSOEVER. lI, a Whed cred rang agcy subid of Mxs Co ("M;O¡, heeb dicloes Ui mostissue of de secures (inuding co an municpa bo. de, no and comeria pa) and prerr stoc rate by MS ha, pr to assignmen of any rang. ag to pay to MS for apisal an ra seres rede by it fee rang fr $1,50 to apatel $2.50.00. MeO an MS al maintain poicie and predre to ads tt indepce of MS's rang and ra pres. hfat re cerafiati that may exst beee dir of M;O and ra enties, and betw en wh ho rang fr MSand have alo puicly repoed to tt SEC an owerhi int in MeO of mor th 5%. is pote anal at ww moo com unde the hein "Shreer Rel - Cor Goerance - Direc an SharehAfia Policy." My publon ino Autra of ths doument is by roODYS afat, Mos nvto Se Pl Limited ABN 61 00 39 65, whic hol Autran Fmancia Sees Ucese no. 33. This doumen is int to be prdedonl to "Wesal cli" witin th meaning of sec 761 G of Uie Coti Ac 201. By conuin to access this doumen fr wi Autr, yo reen to M:DYS th yo ar, or ar acsing th doumen as areen of, a "Wesal clr and th ne yo no tt en yo reen wi direc or inrecdisseminae th doen or it co to "re cl" wiin th mein of sec 761 G of tt Cors Ac 201.