20131216Notice of Affiliate Transaction.pdf

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December 16,2013
VIA OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472West Washington
Boise,ID 83702-5983
Attention:Jean D. Jewell
Commission Secretary
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
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 between BNSF Railway Company (BNSF) for coal transportation services. A
verified copy of the BNSF Common Carrier Pricing Authority 90068 Attachment A Coal Unit
Train Commitment Certificate Number BNSF 90068-0072 (Agreement) is included with this
Notice 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 BNSF. Therefore, Berkshire
Hathaway's ownership interest in BNSF may create an affiliated interest in some PacifiCorp
jurisdictions.
Through the Agreement, BNSF provides rail transportation services for coal sourced
from three different regions of mines located in the Wyoming Powder River Basin to
PacifiCorp's Dave Johnston Steam Plant ("Dave Johnston") near Glenrock, Wyoming. Under the
Agreement, the BNSF railroad will transport a minimum of 3 million tons of coal per year to
Dave Johnston. Under the agreement, each year PacifiCorp will determine and nominate a fixed
tonnage volume of coal for the plant's consumption requirements. Additionally, PacifiCorp will
provide a monthly schedule to the BNSF for the monthly coal volumes to be delivered to the
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Mark C. Moench
Senior Vice President and General Counsel
201 S. Main Street, Suite 2400
Salt Lake CiO, aT 84111
801-2204459 Office
801-2204058 Fax
ma r k. m o e n c h@1t ac iti c o rp. c o m
Re:
Jean D. Jewell
Notice of Affiliate Transaction
December 16,2013
Page2
plant. PacifiCorp will retain the responsibility of unloading the unit coal train deliveries at the
plant.
PacifiCorp owns and operates many generation facilities, some of them fueled by coal.
Coal-fired generation facilities may be located near mine heads or may be located far away from
a coal source. In situations where coal must travel a great distance to reach the generation plant,
railroad transportation service is less expensive than other potential transportation sources such
as transporting coal in 38 ton haul trucks. Rail service providers can be likened to electric
utilities in that they usually serve exclusive service territories with rates governed by the Surface
Transportation Board (STB). Dave Johnston is captive to the BNSF railroad meaning that the
BNSF is the only railroad company that can provide coal transportation services to Dave
Johnston. The Agreement serves the public interest by ensuring PacifiCorp obtains fuel supplies
for its coal-fired baseload generation plants at rates overseen by the STB.
Please do not hesitate to contact me if you have any questions.
Best Regards,
Vn(,,LG
Mark C. Moench
Senior Vice President and General Counsel
PacifiCorp
Enclosures