20130701Notice of Affiliate Transaction2.pdf

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Mark C, Moe4ch
Senior Vice President and Generul Counsel
201 S. Main Street, Saite 2400
Salt Lake CW, UT 81111
801-22(M1s9 Oflice
801-2201058 Fax
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,l I i!I I -'-_July 1,2013
VIA OWRNIGHT DELIWRY
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 International Business Machines Corporation (IBM). The Company
desires to enter into an Enterprise Software and Support Option (ESSO) with IBM to essentially
combine existing agreements to achieve savings. A copy of the ESSO is included as Confidential
Attachment A. This material contains commercially-sensitive information and is submitted under
seal, and the Company requests that it be made confidential.
PacifiCorp is a wholly-owned indirect subsidiary of MEHC. MEHC is a subsidiary of
Berkshire Hathaway, Inc (Berkshire Hathaway). As of March 31,2010, Waren 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 IBM. Therefore, Berkshire
Hathaway's ownership interest in IBM may create an affiliated interest in some PacifiCorp
jurisdictions.
PacifiCorp has historically used a variety of technologies from IBM to support the
delivery of key business functions. Specific functions provided by IBM include support for
PacifiCorp's customer service and billing, support for enterprise reporting and analyics in the
Enterprise Data Warehouse, support for Corporate Enterprise Content Management for
document storage, archiving and retrieval, and support for optimization of energy trading
activities. The ESSO will allow PacifiCorp to bundle certain software licensing purchases and
support services to achieve significant savings over the term of the contract. PacifiCorp
anticipates saving approximately $800,900 over the next three years.
Jean D. Jewell
Notice of Affiliate Transaction
July 1,2013
The Company relies on software furnished by IBM to create and maintain critical
business records. This software is proprietary to IBM; therefore, only IBM is able to provide
service. Without the software furnished by IBM, many goups in the Company would not be able
to perform necessary for business functions or prepare reports related to those business functions.
Installing a different reporting system would require considerable time and expense.
Additionally, PacifiCorp will be able to conserve expenses. Accordingly, ttre transaction is
consistent with the public interest.
Please do not hesitate to contact me if you have any questions.
Best Regards,
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Mark C. Moench
Senior Vice President and General Counsel
PacifiCorp
Enclosures
CONFIDENTIAL ATTACHMBNT A
ENETERPRISE SOFTWARE AND SERVICES OPTION
ATTACHMENT A IS CONFIDENTIAL AND WILL BE
PROVIDED UNDER SEPARATE COVER