20131216Notice of Affiliate Transaction2.pdf

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Mark C. Moench
Senior Vice President and General Counsel
i"i lr-l: nq 201 S. Main Sfieet, Suite 2400
'1: r r' " ' Salt Lake City, UT 841I I
801-2204159 Ollice
801-220-4058 Fox
ma r k. m o en c h@p a c iftc o rp. c o m
December 16,2013
VA OWRNIGHT DELIEVERY
Idaho Public Utilities Commission
472West Washington
Boise,ID 83702-5983
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 PacifiCorp and HomeServices Relocation (HomeServices).
PacifiCorp previously submitted notice of an affiliate transaction between HomeServices and
PacifiCorp in June 2010. The contract submitted with the notice contains a provision allowing
for the extension ofthe contract. The contract term has been extended, effective January 1,2014.
A copy of the First Amendment to the Relocation Services Contract (Contract) 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 HomeServices. Therefore,
Berkshire Hathaway's ownership interest in HomeServices may create an affrliated interest in
some PacifiCorp j urisdictions.
For the current Contract, MEHC selected HomeServices through a Request for Proposal
process designed to elicit the most comprehensive relocation services package at a reasonable
cost. MEHC subsidiaries have the option to sign onto the Contract and receive the same terms
and conditions as MEHC. After determining the terms and conditions to be reasonable,
PacifiCorp has opted to sign onto the Amendment. Under the terms of the Contract,
HomeServices will manage comprehensive relocation services for PacifiCorp's transferring
Re:
Jean D. Jewell
Notice of Affiliate Transaction
December 16,2013
Page2
employees and new hires and will directly bill PacifiCorp for expenses incurred. The terms and
conditions, and pricing structure remain the same as under the previous contract, except the term
is extended to December 31, 2015 and the business ethics provisions is modified.
As part of its management service, HomeServices assigns a personal relocation
consultant to each relocating employee or new hire to coordinate departure and destination
services. Departure services include personalized needs assessment; for homeowners, home
marketing plan design, evaluation and negotiation of offers, and closing and settlement
assistance; household goods survey; thirty-day notice to landlords for renters; and car and hotel
reservations. Destination services include providing real estate agent information, housing and
community information, area tours, cost of living analyses, and school reports; home buying
search, negotiation and closing assistance; for renters, rental property search; temporary living;
rental car coordination; partner/spouse career assistance and counseling; household goods
moving and storage; and overlapping mortgage payment assistance. HomeServices will provide
these services through its network of preferred vendors and service providers.
HomeServices will charge PacifiCorp a modest, flat fee per relocation for its services,
plus the actual costs of services procured from its vendors and service providers. The fee
HomeServices charges for its services is comparable to or lower than fees charged by other
companies that offer relocation management services. PacifiCorp expects to pay HomeServices
$400 per relocation managed. The base fee per transaction is $1,600, which will be discounted
by $600 if HomeServices receives a fee from the real estate selling agent, and discounted by
another $600 if HomeServices receives a fee from the real estate buying agent. For this fee,
HomeServices negotiates discounted rates for many of the services it provides through third-
party vendors, such as household goods shipping and storage. HomeServices will bill PacifiCorp
for the cost of the third-party services without markup.
To meet staffing needs, PacifiCorp occasionally relocates existing employees and new
hires. PacifiCorp offers relocation services to its eligible employees and new hires as part of total
employee compensation to offset the expense of relocating and to ensure a smooth transition to
the new position. The Contract allows PacifiCorp to purchase these services at a discount. For
these reasons, the Contract is reasonable and meets the public interest.
Please do not hesitate to contact me if you have any questions.
Best Regards,
V1(,,LG 7A-,"!,--
Mark C. Moench
Senior Vice President and General Counsel
PacifiCorp
Enclosures
First Amcndment
RELOCATION SERVICES CONTRACT
HomeServices Relocation, LLC
MidAmerican Energr lloldings Company
TIIIS FIRST AMENDMENT to the Relocation Services Contract ("Contract") is entered into as
of the date set forth below, by and between MidAmerican Energy Holdings Company ("MidAmeri.*"),
an Iowa Corporation, and HomeServices Relocation, LLC ("Contractor"), a Delaware Limited Liability
Corporation
WIIEREAS, Contractor and MidAmerican entered into the Relocation Services Contract
(Contract) executed on February 16, 2010;
WHEREAS Contractor and MidAmerican now desire to amend the Contract to extend the
Contract term.
The parties agrce to amend the Contract as follows:
l. PG-24 (TERM). The Contract is hereby amended by extcnding the term to December 31, 2015.
2. Pc-12 (SEVERABILITY AIID GOVERNING LAW). The following paragraph hereby is added
to the end of PG-12:
*TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES
HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF LITIGATTON DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS CONTRACT. EACH PARTY FURTHER
WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY
TRIAL HAS BEEN WATVED WITH A}.IY OTHER ACTION IN WHTCH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.'
3. PG-19 (BUSINESS ETHICS). The paragraph set forth in PG-19 hereby is deleted in its entirety
and replaced with the following language:
'Contractor, its employees, officers, agents, representatives and Subcontraotors shall at all
times maintain the highest ethical standards and avoid conflicts of interest in the
performance of Contractor's obligations under this Contact. In conjunction with its
performance of the Worh Contractor and its employees, officers, agents and
representatives shall comply with, and cause its Subconhactors and their respective
employees, officers, agents and representatives to comply with, all applicable laws,
statutes, regulations and other requirements prohibiting bribery, comrption, kick-backs or
similar unethical practices including without limitation, the United States Foreign Comrpt
Practices Act, the Unircd Kingdom Bribery Act 2010, and the Company Code of Business
Conduct. Without limiting the generalrty of the foregoing, Contractor specifically
rcpresedts and w€rrmts ttrst neilhcr Contra0tor flor any Subcontrac,tor employem; offoors,
rcprcsEnt[tives Or ottror agcnts of Contrastor have madc or witl rnake ,uny paymenti or
have given or will give an)4hing of value, in ei&er oase h any goveramwrt offirial
(inoluding any officcr or crnployoo of any govo:rmmtal authority) m influemcc hig hor, or
its dccision or to gain any ottrc advanhge fot Compary or Corrfimctor in csunostisn with
the Work to be perfornd hcrrundcr. Coatraotor shall maintain and carse to be
mainteinsd escctivq aco$mting procoduras and ifitottrBl oonEols Egoqssary to reoord 6ll
€epcndittrres in eonnedon wifh ilris Contract and to vec'ify Conraator's cornpliance with
this futicls. Cornpaoy shll bepennificd t0 audit such reoonds as rasonably noceasary to
confimr Contractror's oompliancc with this Articlq Csutac&r stall inamoiliddy prpvidc
noticB to Cmrpany of any f,ac.B, oircum'Btarlcolr or allcgetions tbat co$tituto or mig-ht
constiturc a breach of this Articlc and shall oooperato with Gomparry's subseErent
invsstigntion of sueh rnatlcrs. Contactor shatl indernnify and hold Company hannlcs.s
ftom all fincs, penaltios, expenses or oth€r lorseo silstainod by Compuy as a rssult of
Contaotor's broach of thla pnovision. Tha Putics spcoifice[J aaknor+ledgc ttrat
ContractoCe hihno to e*arply with the of tliis Articlc shall oonsdtute.a
oondition of dofault urtdpr this Coutm["
All othcr tgrrnsand oqnditione ac .eet forth in tho Oorurart, as irmettdod, shall ooatintre'to s$pXy,
IN SlffNESg'WmREOf,', he partioc hor-o to heve excsutcd tbis Fint An:l€odmcd as of;tho drtp
set for&below,
MtilAqrcrlcan Energgr lloldhtgt Conpan-y HomeSsrvicer Rdocation, LLC
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