20150908Notice of Affiliate Transaction.pdf

UPactFtConp\ A MToAMER|CAN ENERGY HorDtNGs CoMPANY J
R. Jelf Richords
Vice President and General Counsel
201 S. Main Street, Suite 2400
Salt Lake CiA, aT 84lll
801-220-4734 OfJtce
801-2204058 Fax
j efJ. r ic h a r ds@1t a c iJi c o rp. c o m
September 8,2015
YA OVERNIGHT DELIWRY
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 written 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 (now
known as Berkshire Hathaway Energy Company or "BHE"), of an affiliate interest transaction
with Kern River Gas Transmission Company ("Kern River").
PacifiCorp and Kern River are both wholly-owned, indirect subsidiaries of BHE. BHE's
ownership interest in both PacifiCorp and Kem River may create an affiliated interest in some
Pacifi Corp jurisdictions
Kern River owns and operates the Kern River pipeline system, which transports natural
gas to California, Nevada and Utah. Certain Kem River pipelines located in Utah are in an area
being used by the Utah Department of Transportation ("UDOT") as part of its Mountain View
Corridor Project.r Portions of these pipelines are also located on PacifiCorp property by virtue of
an existing permanent easement. UDOT is requiring Kern River to relocate these pipelines to
accommodate the Mountain View Corridor. To allow Kern River to accommodate UDOT's
directive, the Company will grant a Temporary Construction Workspace Easement (the
"Construction Easement"). The Construction Easement will expire one year from the date of
execution. A copy of the Construction Easement is included with this Notice as Attachment A.
Kern River will pay PacifiCorp approximately $28,822 for the Construction Easement,
which is based upon the fair market value of the temporary rights granted. The methodology for
determining the value of the transaction was as follows. A fee value for the underlying properties
was calculated to be approximated at $105,000 per acre. The acreage involved in the
I The Mountain View Corridor is a planned fieeway, transit and trail system project in western Salt Lake and
northwestern Utah counties. See http://www.udot.utah.gov/mountainview/.
Re:
Jean D. Jewell
Notice of Affiliate Transaction
September 8,2015
Construction Easement is approximately 5.49 acres. Based on the access rights included in the
underlying permanent easement, and standard industry practice for valuing annual leases, the fair
market value of the Construction Easement was determined to be five percent (5%) of fee simple
value. This yields a Construction Easement value of $28,822 per year.
The Construction Easement contains standard terms, conditions and restrictions to protect
PacifiCorp's ability to provide safe and reliable service. Thus, the granting of the Construction
Easement will not harm the public interest.
Please do not hesitate to contact me if you have any questions.
Vice President and General Counsel
PacifiCorp
Enclosures
Best Regards,@
R. Jeff Richards
Attachment A
Construction Workpl ace Agreement
Temporary Construction Workspace Agreement
This Temporary Construction Workspace Agreement ("Agreement"), dated September
_,20L5, is entered into between PACIFICORP, an Oregon Corporation dlbla Rocky
Mountain Power (hereinafter referred to as "Rocky Mountain Power") and Kern River Gas
Transmission Company (hereinafter referred to as "Kern River").
RECITALS
A. Rocky Mountain Power is the owner of a parcel or parcels of real property located
in the Salt Lake County, as more particularly depicted in the attached Exhibit A (collectively,
the "Property").
B. The design for the Utah Department of Transportation Mountain View Corridor
("MVC") near 2700 South involves the construction of new and removal of existing pipelines on
Rocky Mountain Power property. Both pipelines will be relocated to the west to minimize
conflicts with current and proposed Rocky Mountain Power facilities in the area and the MVC.
This conflict area affects approximately 0.68 miles for the existing KRGT A-Line and 0.81 miles
for the existing B-Line.
C. Kern River desires and Rocky Mountain Power is willing to allow Kern River and
its selected contractor(s) access and use the Property for the purposes of temporary construction
workspace (the "Work") in conjunction with its relocation of the Kern River facilities, as further
described in Exhibit A. This also includes the right to use the existing access roads on adjacent
Rocky Mountain Power property as shown on Exhibit A.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. fught of Entry and Temporary Use. Rocky Mountain Power hereby grants to
Kern River, and to Kern River's contractors, subcontractors, and agents (for purposes of this
agreement, Kern River and its contractors, subcontractors, and agents, if any, shall be referred to
as "Kem River"), the right to enter the Property for the sole purpose of conducting its Work on
the Property. This right of entry shall allow Kern River to conduct its Work on locations shown
in the drawings, attached hereto as Exhibit A. Kern River will compensate Rocky Mountain
Power for the 5.49 acres (4.83 acres of workspace area and .66 acre access road) as shown in the
drawings attached hereto as Exhibit A in the amount of $28,822.00 (50% of an annual lease rate
of l|Yo of the workspace area's value of $105,000 per acre). Kem River shall strictly comply
with any reasonable instructions, directions or restrictions promulgated by Rocky Mountain
Power. This right of entry shall commence on the date of execution and shall expire one year
from the date of execution. Kern River shall be responsible and liable for the actions and
inactions of its contractors, subcontractors and agents hereunder as if Kern River were
performing the same. Kern River's use of the access roads shall not materially interfere with
Rocky Mountain Power's use of the roads, and Kern River shall be responsible to repair any
damage to the access roads caused by its use.
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2. Compliance with Law. In the prosecution of the Work, Kem fuver shall secure,
at its expense, any and all necessary permits and shall comply with all applicable federal, state
and local laws, regulation and enactments applicable to the Work. All Work shall be performed
in a workmanlike manner and in compliance with all applicable industry standards. Kem River
shall perform and stage construction so as to ensure the safety of: (a) Kern River's agents and
employees; (b) any and all Rocky Mountain Power operations conducted on the Property; (c)
surrounding property owners; and (d) the public in general.
3. Rocky Mountain Power Operations. Kern River shall not make or allow to be
made any use of the Property that is inconsistent with, or interferes in any manner with Rocky
Mountain Power's operation, maintenance or repair of Rocky Mountain Power's existing
installations or additional facilities or improvements constructed after the granting of this right of
entry, including, without limitation, electric transmission and distribution circuits that cross over
or above the property as herein described.
4. (a) Power Lines. Kem River shall not use or permit to be used on the Property,
construction cranes or other equipment that violate the clearance standards set forth in the
NESC, OSHA or High Voltage Overhead Line Safety Act. Kern River shall not place any
temporary spoils within a thirty (30) foot radial clearance from any overhead power line unless
otherwise approved by Rocky Mountain Power in writing in advance. The storage of hazardous
materials is prohibited within the Property. At no time shall Kern River transport or place
materials or equipment of any kind that exceed fourteen (14) feet in height, or that creates a
material risk of endangering Rocky Mountain Power's facilities, or that poses a risk to human
safety, under or adjacent to any overhead power line. At no time shall Kern River operate any
equipment or vehicle exceeding fourteen (14) feet in height under or adjacent to any overhead
power line; furthernore, any vehicle or equipment exceeding fourteen (14) feet in height during
operation shall maintain a twenty (20) foot radial clearance from any overhead power line. Kern
River's use of the Property shall comply with the clearance standards set forth in the NESC,
OSHA and High Voltage Overhead Line Safety Act.
(b) Towers/Poles.
(i) Materials, supplies, or equipment of any kind may not be stock-
piled, parked, or stored within five (5) feet of the towers or poles or in such proximity to said
towers that they would block access to any overhead power line.
(ii) No vehicles or equipment may be left unattended for any reason
within ten (10) feet of Rocky Mountain Power's towers or in such proximity to said towers that
they would block access to any overhead power line.
(iii) No re-construction, operational or maintenance activities, vehicles,
equipment, materials, supplies, warning barriers, stockpiles, earth, spoils, etc. may be used
within the Property that will provide a platform for persons to climb the towers or poles or
provide access within the minimum clearance standards established by the National Electric
Safety Code.
5. Costs of Construction. The parties acknowledge that Utah Department of
Transportation has agreed to be responsible for the cost of the Work. In no event shall Rocky
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Mountain Power be responsible for any costs incurred with respect to the Work. Kern River shall
maintain the Property free from liens or other encumbrances associated with the Work.
6. Safety. Safety of personnel, property, Rocky Mountain Power operations and the
public is of paramount importance in the prosecution of the Work. Kem River shall keep all
Work locations in the Property free from safety and health hazards and ensure that its employees
are competent and adequately trained in all safety and health aspects of the Work. Kern River
shall have proper first aid supplies available on the job site so that prompt first aid services can
be administered to any person injured on the job site. Kern River shall promptly notify Rocky
Mountain Power of any OSHA reportable injuries arising during the Work. Kern River shall
have a non-delegable duty to control its employees while on the Property to ensure that such
employees do not use, are not under the influence of, and do not have in their possession, any
alcoholic beverage, drug, narcotic or other substance that may inhibit the safe performance of the
Work.
7. Indemnification. As consideration for the right of entry and use conveyed
pursuant to this Agreement, Kern River agrees to protect, defend, release, indemnifu and hold
harmless Rocky Mountain Power, its parent companies, subsidiaries and affiliates, and each of
their officers directors, employees, shareholders, contractors, agents, attorneys, insurers, and
assigns from and against any costs, expenses, damages, claims, attorney's fees, lawsuits,
allegations, judgments, or other losses caused by or as a result of: (a) the prosecution of the
Work contemplated by this Agreement by Kem River, or any employees, contractors,
subcontractors, principals or agents of Kern fuver; (b) any mechanic's, materialman's, tax or
other lien asserted against the Property as the result of the Work; (c) the failure to properly
obtain any permit or other approval necessary for the Work; or (d) Kem River's material breach
of any provision of this Agreement. Rocky Mountain Power agrees to protect, defend, release,
indemnify and hold harmless Kern River, its parent companies, subsidiaries and affiliates, and
each of their officers directors, employees, shareholders, contractors, agents, attorneys, insurers,
and assigns from and against any costs, expenses, damages, claims, attorney's fees, lawsuits,
allegations, judgments, or other losses caused by or as a result of Rocky Mountain Power's
material breach of any provision of this Agreement.
8. Insurance. Kern River shall, at its sole cost and expense, obtain and maintain
workers compensation and liability insurance in amounts sufficient to protect against the risks
and liabilities assumed by Kem River under this Agreement.
9. Entire Agreement: Counterparts. This Agreement shall constitute the entire
agreement and understanding of the parties with respect to the subject matter hereof, and shall
supersede all offers, negotiations and other agreements with respect thereto. This Agreement
may be executed in any number of counterparts and by each of the parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument. Any signature page of
this Agreement may be detached from any counterpart and reattached to any other counterpart
hereof. The facsimile transmission of a signed original of this Agreement or any counterpart
hereof and the retransmission of any signed facsimile transmission hereof shall be the same as
delivery of an original.
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10. Termination. This Agreement and right of entry granted hereunder may be
terminated by Rocky Mountain Power in the event that Kern River continues in default with
respect to any provision of this Agreement for a period of two days after receipt of notice from
Rocky Mountain Power identifuing the nature of Kern River's breach. Notwithstanding the
foregoing, in the event that the nature of Kem River's breach constitutes an imminent threat to
persons or property, Rocky Mountain Power may immediately suspend the right of entry granted
herein until such time as Kern River remedies the breach.
11. Restoration of Property. Upon termination of this Right of Entry agreement, Kern
River shall restore the Property to substantially the same condition as existed prior to the work,
including but not limited to restoring vegetation to its original condition as current year growing
season permits.
12. Rocky Mountain Power and Kern River contemplate entering into and executing
an agreement with the Utah Department of Transportation regarding the relocation of the
pipelines which is the basis for entering into this Agreement. If the Utility Relocation and
Property Exchange Agreement is not executed for any reason, Kem River will remove the
Pipelines installed pursuant to this Agreement and shall restore the Property to its pre-
construction condition.
13. Jury Waiver. 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 litigation directly or indirectly arising
out of, under or in connection with this agreement. Each Party further waives any right to
consolidate any action in which a jury trial has been waived with any other action in which a jury
trial cannot be or has not been waived.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date and year first above written.
ROCKY MOUNTAIN POWER KERN RIVER
By:By:
Name:
Title:
Name:
Title:
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Exhibit A
of Grantor's Land and map of temporary workspaces)
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