20130701Notice of Affiliate Transaction.pdf

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\ A MDATTEn|CAN ENERGY HOT.DTNGS COMmNY
Mark C. Moench
Senior Vice President and General Counsel
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201 S. Main Street, Suite 2400
E t{ e: ?ft Salt Lake City, UT 841I Irir I J' 'ru gol-220r1s9 office
801-2201058 Fax
, 1:-;.:iil,, mtrle,[e-mail]
July 1,2013
VA OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472West 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 l7(2), incorporated in the
Idalro 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 Marmon Utility, LLC (Hendrix), for the purchase of certain "spacer
cable" needed for installation on PacifiCorp's Tule Lake Circuit 5L82 in Califomia. A copy of
the Project Proposal is included as Attachment A.
PacifiCorp is a wholly-owned indirect subsidiary of 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 the Marmon Group. Therefore,
Berkshire Hathaway's ownership interest in the Marmon Group may create an affiliated interest
in some PacifiCorp jurisdictions.
Hendrix manufactures electrical distribution cable, cable systems, and accessories for
aerial and underground utility applications. Among the items manufactured by Hendrix is
covered o'spacer cable." Spacer cable is designed to be resilient to incidental contact (e.g. fallen
trees and limbs), have increased strength in the event of impact loads, and be tolerant to transient
events such as lightning. The Company intends to use such spacer cable for part of its California
Reliability Project, which is designed to increase service reliability. The Company intends to
install approximately 5.8 miles of spacer cable on Tule Lake 5L82 in a wild life refuge area with
a history of bird strikes.
Using the spacer cable should improve reliability to customers. Hendrix is the only
known manufacturer of this product and the material is proprietary. Purchasing the spacer cable
Jean D. Jewell
Notice of Affiliate Transaction
July 1,2013
is in the public interest as part of the Company's commitnent to providing safe and reliable
electric service.
PacifiCorp anticipates spending approximately $207,000 based on the Project Proposal
included as Attachment A. This includes materials, engineering and design assistance, and
onsite field assistance of seven days divided between two weeks. The amount may be reduced
by $8,400 if the second week of field assistance is not required.
Please do not hesitate to contact me if you have any questions.
Best Regards,
7rQ,,o-6,@
Mark C. Moench
Senior Vice President and General Counsel
PacifiCorp
Enclosures
ATTACHMENT A
PROJECT PROPOSAL
*ENDRrlr
Aerial Cable Systems
Marmon Utility LLC
Proiect Proposal:
Tule Lake
Prepared by Jason Smolko, June 7, 2013
Scope: Provide Engineering, material and support for installation of 5.8 miles of
I circuit 1skv 1/0 kcmil Hendrix Spacer Gable Systems.
Svstem Material Details
5.8 miles x 1 circuits x 3 conductorc plus 5ololor sag and tolerance =
-97,747' of 1SkV 3-!ayer black l/Okcmil conductor (cut to pulling sections lengths)
- 32,249' 252AW A messen ger
- 1,012 RTL-GO95 spacers
Hardware for 108 poles =
- 100 tangent poles
- 2 angle poles
- 6 deadend or transition poles
Storm Repair Kits- qty I =
- 6 conductor splices and 2 messenger splices
- 6 conductor grips and2 messenger grips
- 12 spare spacers and 6 insulators w/ pins
- 4 tangent brackets
- restoration manuals
- conductor stripping tool
*Note - Current quantities and pricing account for design or field changes. Should circuit
lengths or pole quantities change by */- 5% - pricing will be revised*
Paclflcory - Tulo Lako Page'l of 4
Enqineerinq and Desiqn Services
Deliverables include final Bill of Materials, Sag and Tension Tables, Pole Loading Report,
Guying Specifications, Plan and Profile Drawings, lnstallation Procedures, and Pole Framing
Details.
Onsite Field Assistance
lncludes 7 days of onsite field installation assistance with a maximum of two trips. Duration
of visits are 4 days on site for first visit and 3 days on site for second visit. All travel expenses
included.
Hendrix Final Inspection/Extended Warrant
Full inspection and documentation of each pole. lnspection deliverables include a photo of
each pole and notes. Warranty of the material is valid for two years and warranty of the circuit
performance is valid for one year. Extended warranty on parts and reliability performance
available upon meeting all project inspection action items.
Total Project Price...........$207,700.00
- **Pricing only valid for purchase all items in system*
Recommended lnstallation Parts:
BJ - Slack Bracket
PAS-I Angle Stringing Block
PAT-I Messenger Angle Tensioning block
PBR-3 Roll by Stringing Block
SG-'l Sag Gauge
ST-2900 - Adjustable Stripping Tool
TL-30 - Tag Line
TM-2 - Messenger Trolley
XSSR - Single Sheave Roller - NOT SUPPLIED BY HENDRIX
All of the above installation equipment parts as noted above are included for a rental period of up to 6 weeks.
Final quantities of required installation parts will be determined by final engineering design. After 6 weeks,
standard rental fees will apply until all rental equipment is received by Hendrix.
Hendrix Enqineerino Comments:
+ Guying materia!, !ightning arrester assemblies, and fused cutout assemblies not included.
+ Estimate only - Not for construction. 5% added to conductor and messenger length to account for sag and
terminations.
Paclficorp - Tule Lake 6ni2013 Page 2 of4
Additional Notes:
Pricing firm for 30 days subject to the above clause.
Lead time is 4-6 weeks after final approved design. Al other Hendrix Terms and Conditions apply and are subject
to change. Freight allowed.
Please deduct $E,400 from the quoted price if the second week of Hendrix On-site Assistance is not required.
TERMS & CONDTTTONS OF SALE MARMON UTILITY LLC (MARMON UTILITY)
1. Acceptanca; Agrgement. This document, including these Tems and Conditions (collgctively "Agresment"), super3sdes all other agreemgnts, oral or written,
and
all other communications betweon the partie8 suggosting additional or different terms, lt 16pr6sents the final and complete understanding of the parties and may
be amendsd or canceled only by writton agreement signed by both parties. This Agreoment 6xpre$ly limits scceptancc to these terms; no order shall have any
force or effect until acknowledgad in writing by Marmon Utility; and any proposal for additional or different terms or any attempt by Buyer to vary in any degroe
any
of the termg horeof is hereby deemod material and is obiected to and rdected. No terms of any document or form submitted by Buyer shall be effective to alter or
add to the terms and condilions in this AgreBmcnt. Unles8 otherui3e 3tated herein, Buyer's receipt of any portlon of the goods ("Goods") shall conBtitute
acceptance of thb Agreemgnt and all of its torms and condltlons, unless Buysr immediately returns all such Goods.
2. Tsrms of Payment. Payment terms are net 30 days from ths invoice date. All lats payments will be subject to a late charge of US prime rate plus 2% annualized.
Shipmonts and deliveries shall at all times be subject to the continuing approv.l of Marmon Utility Credit Departmont, upon whosa information Mamon Utility
may
decline to make shipment or may require payment in advance or other arrang6mant to assuro due payment.
3. Prices. Prices, including delivGry terms, are subiect to change without notice to reflect Marmon Utility's prices at time of shipment and increases in labor or
othsr
costs. Mamon Utility reserves the right to correct any obvious erroB in specifications or pricos. Minimum invoice charge is 9500. All amounb owad to Marmon
Utility Bhall bo p.id without ab.tement, deduction o. set off. 4. Delivory and Transportation Terms. Shipments invoicod at 5,000 feet or more for cable or t3,000 or
more of accessories aro sold F.O.B. shipping polnt, freight prepaid and allowed, where within the continental United States. Shipments of less than 5,000 feet
(i3,000 for accessorie3) are sold F.O.B. shipping point, with shipping and handling charges.dded to tha invoi6.
5. Cancellation. Acceptance by Mamon Utillty of Purchas6r's written order constitutes a binding contract behrgen ths parties which, except as othgiliSo
spocifically proyided heroin, may not be canceled or modified without the parti$' mutual consont. ln the event Purchaser refuses to accept goods ordered it will
be liable for Marmon Utility' cancellation charges which shall not exceed the purchase price of the und6liyerable goods. Cancellation by Purchasor of ordered
wire and
cable goods will rosult in cancollation charg.s derived from the below formulae: a. A minimum chargo of 20olo of the sales price will b6 paid by Purchaser for
cancellation of goods Bchsdulod for fabrication 90 days or more subaequent to the date Marmon Utility rgceives notice of cancellation. b. A minimum charge of
50% of the sales price will be paid by Purchaser for cancellation of goods scheduled for fabrication less than 90 days subsequent to the date Marmon Utility
receives notice of cancellation.
ln the event the above formulas ara inadequate to cover costs incurred by Marmon Utility incident to fabrication and prior to its receipt of notic€ of can@llation,
Purchaser shall reimburse Marmon Utility all such costs incurred. Additionally, completed or partially complsted units fabricated pursuant to order shall be paid
for by Purchaser at 100% of th6 per unit pric6.
Marmon Utility
6. Taxgs. Prices do not include any salos, uae, excise, privilege, or other taxes or aaaessmenta now or hereafter imposed or levied by or under the authority of
any
federal, state, or local law, rule or regulation concerning the Goods sold hor6under or the manufacturs or aals thereof. lf Marmon Utility pays any such taxcs or
assesaments, Buycr ahall, upon demand, roimbur3e Marmon Utility for 3uch amount3,
7. Risk of LoB8. All risk of loss or damage to Goods shipped hsreundsr shall pass to Buysr upon delivery thereof to Buyer, to its dssignated agsnt, or to a carriEr
for
delivery to Buyer, whichever occurs fi6t. Unless otherui3e stated, all shipments will be made F.O.B. point of manufacture. S. Delivery, All shipping date8 are
estimates and are based upon prompt receipt of all necessary information. Oolays in s3curing Buyer's approval of necEs3ary spEcification3 or samplgs of
products
and materials shall, if Marmon Utility so chooses, extend the date of delivery. Marmon Utility shall not be liable for any claim, loss, expenss, or damage of any
kind
whatsosver for delays in delivery.
9. Waraniies and Limitations on Warrantios - Hendrix Brand. a) Marmon Utility expressly warrants that the Goods (i) will conform to th6 doscriptions and
apscificationa incorporated herein within the guidelines sstablkhed hersin and (ii) will be free from defect in materlal and workmanship for a period of one year
after shipment. THESE ARE MARMON UTILITY'ONLY WARRANTIES. MARMON UnLFY MAKES NO OTHER WARRANTY OF ANY KIND WHATSOEVER, EXPRESS
OR IMPLIED. ALL IMPLIED WARRANTIES OF MERCHANTABIL]TY AND/OR FITNESS FOR A PARTICULAR PURPOSE ARE TIEREBY DISCLAIMED BY MARMON
UTILITY AND EXCLUDED.
b) lf Buyer notifies Marmon Utility in writing within the warranty period of a defact in matcrial or workman3hip in any Goods or part thergof sold hereunder, and if
Marmon Utility determines, afrer appropriats tests and inapection, that such goods or part theraof are not in conformity wilh tho warranty given hsreunder,
Matmon
Utilily will repair, replace, or r6fund the purchase price, at its sole option. Thb 3hall be Buyer's sxclu3ive remsdy for Mamon Utility' liability hereunder. Any
claims
not made within the waranty period are deemed waived by Buyer.
c) Marmon Utility' liability to Buyer or anyone claiming through or on behalf of Buyer, with respect to 8ny claim or loss arising oul of this transaction or allcaGd to
havq rcsulted from an act or omission of Marmon Utility, whether negligent or othoruise, and whether in tort, conlract, or otheruise, includlng failure io deliver,
delay in delivery, or breach ofwarranty, shall be limitod to an amount oqual to the purcha3e price ofthe Goods or part thereofwith respEct to which such liabtlity
is
claimed or, where appropriate and at tho option of Marmon Utility, to replacement of the Goods or part ther6of. ln no case will Marmon Utility bs li.ble for any
bodily iniury, dsath, or property damago resulting from or in any way arising out of the good3 or their sale, uso, or manufacture. lN NO EVENT SHALL MARMON
UTILITY BE LIABLE FOR INCIDENTAL OR CONSEOUENTIAL DAMAGES, LOSSES, OR EXPENSES ARISING OUT OF THIS TRANSACTION.
d) lf Buyer or any other person, without the prior written consent of Marmon Utility, repaiB or modifles all or part of the Goods, or if the Goods are not installed or
used in complianco with Marmon Utility' directions, this warranty shall be yoid.
10. Warranties and Limitations on Warranties - Kerite Brand.
Pacificorp - Tule Lake 6n12013 Page 3 of 4
t$armon Utility
a) WARRANW - t$armon Utlllty LLC. wananb 3ololy to the Purcha3er that any wire or ceble of it! own mtnufecture ("Product") and 3uppliod to the Purchaser will
bo freo from dafect3 in matarlel and woikmanshlp provldod the wiro and cablo art omployod undor condltlon3 contomplated and coyered by ths d$ign
spociric.tlon3, and proyldod furthar that the wiro and cable are instalbd, splicod, t8rminatad, maintainod, and opor.ted in .ccordance with Uamon Utility LLC'3
rgcommonded standard3 and procedures.
b) lf a Product falls olectrically whilo in 3.ryice, Purch.3or shall notlfy Marmon Utillty LLC wlthln (5) day3 of the dlscoyery of Buch failur€, and sh.ll permit a
repre3ontatlvo of Marmon t tility LLC a r6asonable opportunity to inspoct tho Product. lf it ls mulually d.tormlnod by ilarmon Utlllty LLC and Purcha3er th.t tho
failuro i3 the result of defoctlve material or workman3hip, Marmon Utility LLC's Bole rsspon3iblllty under thls Wananty 3hall be to r.pair or replaco the defsctlvo
Product, the cholce of which wlll bo M.rmon Utility LLC'S option. lf Mamon Utlllty LLC choo3es to replaco the defoc-tlvo Product, the new Product will bo
dolivorod
freo of chargo to the delivery polnt called for in the original order.
c) M.rmon Uilllty LLC will not bo rs3ponsible for any damage or failure causod by Purchasor or rny third party, lncludlng without limitatlon, Acts of God.
d) Marmon Uiillg LLC will not bo ro3ponriblo for any defects or repaiE to, or replacament of, adlacsnt or connectsd equipm€nt to which tho Produc-t may supply
eloctrlcal power or from whlch lt may t.ks electrical pow6r, or with whlch lt may, ln any mannorr be a.sociated. Marmon Utlllty LLC wlll not be re8ponsible for any
incldental or consequentiel damagoa what3o€yer, glther diiect or indiract, raiulting from e failure of the Product.
E) THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES WHETHER WRTTTEN, ORAL, EXPRESSED OR IMPLIED, INCLUDING
BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
1'1. lndomniflcation a) lf the Goodi aro manufactured in accordance with 3pecification3 or othsr dlrectlon3 provldod by Buyer, Buyer shall indemnify, defsnd, and
hold h.rmleis Mamon Utlllty against all claims, lossos, liabilities, and exponsos (lncludlng.ttorngyr'fe€3), whlch M.rmon Utility may incur or become llable to
pay with rsspect to Buch Goods, lncluding (wlthout limitation) cl.ims relating to patant, tr.demerk, copyrlght lnfrlngement, or unfair compotition, claims of
noncompliance
with any foder.l, rtate, or local law or regulation, and any other claim of any thlrd party whlch rolates to or in any way arisos out of such specifications
or other dlrectlons provlded by Buyer,
b) Buyer sh.ll.lto indomnlfy, def.nd, and hold harmless Marmon Utility against all clalms, los3os, llabllltlos, rnd oxpensss (lncludlng attorneys'fees), which
Marmon Utlllty m.y incur or becomo liabla to pay which rslate to or in any w.y arila out of Good3 3ubloctod to: (l) impropor in3tallation or storago; (ii) accidont,
damage, abu3e, or miru3a: (iii) abnormal oper.ting condltions or applications; (iy) oporatlng condltlons or appllcatlon3 aboyo the rated capacity of the Goods.
12. Patont3. Except a3 proyidod ln Ssction l0A with r€spoct to Good3 m.nufactured in lccordance wlth 3paclticetioni or dir€ctions provided by Buyer, and
provided Buyor h.s mrda .ll pryment3 duo horeunder, Marmon lnility sh.ll defend, at its oxpense, any 3uit or procoodlng brought against Buyer bas.d upon any
claim that tho Good3 or any plrt theroof infringe any United States p.tent i33ued .3 of the date of Marmon Utlllty's quotatlon and Bhall pay any damages and
costr
awerded thoroln againit Buyor, proylded that Marmon Utility i3 notifiod promptly io writing of such clalm and b giyen firll authority, information and assist nce by
Buyor to defand or sottle the Buit. It tho
Marmon Utility
Good3 or rny part thoroof are deemed to infringe any such patont, Mamon Utility rhall, at lt3 expon3o lnd solo option eithor; procure ior Buyer the right to
continue u3lng sald Good3 or part; rsplaco them with non-infringing Good3 or parb; modfy thsm ro thoy becomo non.infrlnging; or remove them and rgfund the
purcha3o prlce for thsm,
13. Forco Maieure. Mamon Utility 3hall not b€ liable for any delay ln or failuro of porfomanco horounder du. to any contingoncy boyond its reasonable control,
includlng wlthout llmitatlon: an act of God; war; civil commotion; 3abotage; labor dbpute, oxplo3lon; fir3; .ccldant; powor or equipmont failure; inability to obtaln
luitable or 3ufflclont labor, ,uol, power, or material; delay of erigr; embargo; or iny law, ordlnance, rule, or rogulatlon, whother valid or inyalid, including but not
llmlted to priority, requlsltlon, allocation, or price control. 14. Default. f Buyer b In deftult or commlts . breach of .ny ot the provirions of this Agreement,
Mamon
Utility 3hall have the right to c€aso work hereunder lmmediately. Further, if Buyer fai13 to curo 3uch dof.ult or broach wlthin ton (10) days after wrltten notics
thoroof
from M.rmon Utility, Marmon Utillty may temin.te this Agreement by wri$en notlco io Buyor. lf Buy.r cure3 iuch def.ult or bro.ch within s.id t6n (10) day
psriod,
this Agrooment lhall remaln ln ofiact, except for any adju8tmsnts to pricg, delivgry terms, or other provlslon horeof which aro nocessary or appropriate bocause
of
any permitted cossatlon of work by Marmon Utility. '15. Storago. lf Buyer is unwilling to accept 3hlpment of tho Goods on ths agreed Bhipping date, Marmon Utility
may, at ita option, placa thom ln 3torago and blll Buyer for reasonabla storage chgrger. ln 3uch ce3s, rlak of lo3r rhall pass to Buygr when the Goods arg placad
in
3torage, and the date tho Goods are placad in storaga shall constitute th6 date of rhipment fo. purposos of beglnnlng ths warranty period. 16. Material Rsturn
Policy, Marmon Utillty re3erye3 tho right to refuie roturn requests of any materlal. All matorial roturnr mult be pre-authorized by Marmon Uiility, be in origin.l
roralaable
condltlon, and h.ye a wrlttsn "Reiurn Authorization" issued. A minlmum Restocklng Feo of 25% of the original lnyolce amount will be charged for all
roturn8. Tho roturnlng party ls responlible for all prepaid frsight cost3 back to the Marmon Utlllty polnt of orlgln. 17, Walvsr. Failure of Marmon Utiliiy ai any time
to
roquirs Buyer'3 pertormanco of any oblig.tlon under this Agreemsnt shell not affect Marmon Utlllty' rlght to roquiro porformanco of that obligation, Any waive. by
Marmon Utlllty of any broach or dofault h6r6undor must be in witing and shall not be con3trued to bo a walver of any continuing or succeoding breach or default,
a
waivor or modiflcatlon of thls proyl3ion itself, or a waiver or modification of any right und.r thb Agreoment, 18. A$lgnment. Buyer shall not asslgn this
Agrsomont
or any monios due or to becoma duo horeunder, without illarmon Utility' prior written con30nt! and any attempted a33ignment without Memon Utility' prior writton
conlont shall be void and, .t Marmon Utility's option, ground3 for temination of this agreomsnt. 19. Govornlng Laws. ThiB Agreoment Bhall be construed in
accordanca with tho laws of the lurisdiction in which E lcat3d the plant of M.rmon Utllity produclng the Goods, as lndlcatsd on the front hereof.
(
Paclflcorp - Tule Lako 6nt2013 Page 4 of 4