20130219Notice of Affiliate Transaction.pdf

PAC I F I Co R P SeMark C. Moench
nior Vice President and General Counsel
A MIDAMERICAN ENERGY HOLDINGS COMRANY !r ç) 9 r ' q: 3 201 S. Main Street, Suite 2400
Salt Lake Ci, UT 84111
801-220-4459 Office
- 801-220-4058 Fax
[e-mail]
February 18 5 2013
VIA OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472 West Washington
Boise, ID 83702-5983

Attention: Jean D. Jewell
Commission Secretary

Re: PacifiCorp Notice of Affiliate Transaction
Case No. PAC-E-05-8
Dear Ms. Jewell:
This letter will serve as notice pursuant to Commitment I 17(2), incorporated in the
Idaho Public Utilities Commission Order No. 29973 issued February 13, 2006, as supplemented
by Order No. 29998 March 14, 2006, in the above-referenced proceeding, approving the
acquisition of PacifiCorp by MidAmerican Energy Holdings Company ("MEHC"), of an affiliate
interest transaction with Wells Fargo Bank, N.A. and Wells Fargo Securities, LLC (Wells
Fargo). PacifiCorp has selected Wells Fargo to be one of three active lead arrangers as well as a
lender and letter of credit fronting bank under a revolving credit agreement that the Company
intends to enter into in the near future. This upcoming revolving credit agreement is the second
of two new credit agreements that were noted in Rocky Mountain Power's June 4, 2012 and
other affiliated interest notice filings.
Included with this filing are three supporting documents, to which Wells Fargo will be a
party. A copy of the confidential draft Active Arranger Fee Letter is included as Attachment A.
A copy of the confidential draft Commitment Letter is included as Attachment B. A copy of the
confidential draft LC Fronting Bank Fee Letter is included as Attachment C. These Confidential
Attachments contain commercially-sensitive information and are submitted under seal, and the
Company requests they be made confidential. These documents contain "draft" designations,
which will be removed prior to their execution. No material changes are expected to the terms
and conditions of these letters. Rocky Mountain Power also expects to separately file, when
available, the form of new credit agreement to which Wells Fargo will be a party.
PacifiCorp is a wholly-owned indirect subsidiary of MidAmerican Energy Holdings
Company (MEHC). MEHC is a subsidiary of Berkshire Hathaway, Inc (Berkshire Hathaway).
As of March 31, 2010, Warren E. Buffet (an individual who may be deemed to control Berkshire
Hathaway), Berkshire Hathaway, various subsidiaries of Berkshire Hathaway and various
employee benefit plans of Berkshire Hathaway subsidiaries together held an interest in excess of
5 percent in Wells Fargo common stock. Therefore, Berkshire Hathaway's ownership interest in
Wells Fargo may create an affiliated interest in some PacifiCorp jurisdictions.
Idaho Public Utilities Commission
February 18, 2013
Page 2
As noted in the documents previously submitted in this case as affiliate transaction
notices, PacifiCorp expected to enter into two new revolving credit agreements over the
subsequent nine to twelve months as part of an overall plan to replace existing credit agreements
that expire over the same approximate time period. In anticipation of the replacement process,
PacifiCorp and its parent company, MEHC, held discussions with and solicited proposals from a
number of banks concerning replacing PacifiCorp's credit agreements. Several banks, including
Wells Fargo, provided information on bank market conditions, structural considerations
including tenors and impact on pricing and fees, syndication strategies, arrangement and upfront
fees, experience in arranging comparable facilities for utilities and other corporate borrowers and
other considerations. The first of these two new revolving credit agreements was completed and
provided to the Commission on July 16, 2012. The Company is now preparing to complete the
second new revolving credit agreement consistent with previous notices.
The Company selected Wells Fargo as one of six lead arrangers engaged to assist
PacifiCorp in arranging the two new revolving credit agreements The selection of Wells Fargo
as one of the six lead arrangers was based on its experience in syndicating comparable facilities
for utilities, knowledge of current bank market conditions, credit ratings, willingness to make
significant credit commitments to PacifiCorp, knowledge of the utility industry, the Company
and its operations, successful outcomes in prior financing transactions for the Company and
reasonable arrangement and other fees.
The selection of Wells Fargo was not influenced by Berkshire Hathaway's ownership
interest. Wells Fargo's fees will be equal to the fees paid to three of the five other lead arrangers
(while one bank will be paid slightly more and one bank slightly less due to expected roles and
work) and at what PacifiCorp believes to be market rates or better for the Company. In addition,
Wells Fargo will be paid an ongoing commitment fee at the same rate as all other banks in the
credit agreement.
As a public utility, the Company is expected to acquire, construct, improve, and maintain
sufficient utility facilities to serve its customers adequately and reliably at reasonable cost.
Revolving credit agreements and borrowings thereunder are part of a program to finance the
Company's facilities taking into consideration prudent capital ratios, earning coverage tests and
market uncertainties as to the relative merits of the various types of securities the Company
could sell. Accordingly, the transaction with Wells Fargo is consistent with the public interest.
Please do not hesitate to contact me if you have any questions.
Best Regards,
Mark C. Moench
Senior Vice President and General Counsel
PacifiCorp
Enclosures