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Home My WebLink About20150120Notice of Affiliate Transaction.pdf\PecrnEoRP January 20,2015 VA OWRNIGHT DELIWRY 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 Commitmentl 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)I, of an affiliate interest transaction with Wells Fargo Bank, N.A. (Wells Fargo). PacifiCorp selected Wells Fargo to be the custodian to hold assets for its Long Term lncentive Plan (LTIP) as explained below. A confidential copy of the draft Form of Custody Agreement (Agreement) is included as Confidential Attachment A. Attachment A contains commercially-sensitive information, which if disclosed, could expose PacifiCorp to competitive harm and cause increased costs. Confidential Affachment A contains a "drafto'designation, which will be removed upon execution of the Agreement, however the Agreement will remain confidential. The Company does not expect any material changes to the terms and conditions of the Agreement. PacifiCorp is a wholly-owned indirect subsidiary of Berkshire Hathaway Energy Company (BHE). BHE is a subsidiary of Berkshire Hathaway, Inc. (Berkshire Hathaway). On December 31,2013, 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 in excess of five percent of Wells Fargo & Company common stock. Wells Fargo Bank, N.A. is a subsidiary of Wells Fargo & Company. Therefore, Berkshire Hathaway's ownership interest in Wells Fargo & Company and BHE may create an affiliated interest in some PacifiCorp jurisdictions. Currently, BHE provides an LTIP for designated employees of BHE and certain of its subsidiaries, including PacifiCorp. Beginning in January, 2015 those BHE subsidiaries, including PacifiCorp, will implement and administer their own individual LTIPs and no longer 7nt5 JrrH 20 flit R. Jeff Richards Vice President and General Counsel 201 S. Main Street, Suite 2400 F t salt Lake city, uT 841I Ii ui 8oI-2204734 ofJice 801-220-4058 Fax Re: t As of April 3O,2O|4,MEHC was renamed Berkshire Hathaway Energy. Idaho Public Utilities Commission January 20,2015 Page2 be part of the BHE LTIP. PacifiCorp does not include LTIP in rates. However, the Company provides notice of this transaction with Wells Fargo to ensure consistent treatment of affrliate contracts. PacifiCorp selected Wells Fargo to serve as the custodian to hold the LTIP assets due to Wells Fargo providing similar custody services for the current BHE LTIP, overall satisfaction with its administration and services, reports and fees. The selection of Wells Fargo was not influenced by Berkshire Hathaway's ownership interest. PacifiCorp will pay a fee to Wells Fargo, priced at market rates or better, based on the number of transactions and consistent with other financial arrangements currently in place. 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. Holding assets in a custodial account is a prudent arrangement to set aside assets to fund the Company's LTIP obligations. Accordingly, the transaction is consistent with the public interest. Please do not hesitate to contact me if you have any questions. Best Regards, R. JeffRichards Vice President and General Counsel PacifiCorp Enclosures CONFIDENTIAL ATTACHMENT A THE ENTIRE DOCUMENT IS CONFIDENTIAL ANID WILL BE PROYIDED SEPARATELY.