Loading...
HomeMy WebLinkAbout20151103Notice of Affiliate Transaction.pdf\PectFlConp November 3,2015 VA 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: R. Jeff Richards Vice President and General Counsel 1407 W. North Temple, Suite 320 Salt Lake Cily, aT 84116 801-2204734 Offt.ce j el[. r i c h a r ds@1t a c iJi c o rp. c o m C -t7*:Io fflf-(/J;.::loYO.Y: ry,h,<i=6i'lcfi5 z.- F'ct f-'t -.(rfI :irrd)cJ fii?>*; - lj':-1\Ov G' This letter will serve as supplemental notice pursuant to Commitment I 17(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 agreement with rate-regulated subsidiaries of BHE. PacifiCorp entered into an lntercompany Mutual Assistance Agreement (the "Agreement") with MidAmerican Energy Company ("MEC"), Kern River Gas Transmission Company ("Kern River") and Northern Natural Gas Company ("NNG") in September 2011. PacifiCorp, MEC, Kern River and NNG are all indirect, wholly-owned subsidiaries of BHE. The Agreement allows the parties to request the assistance of one another to respond to emergency situations, such as outages due to storms or equipment failures. Assistance is voluntary, meaning the party to whom a request is made may choose whether or not to assist as requested. A September l,20ll notice regarding the Agreement was previously filed with the Commission. BHE has since acquired Nevada Power Company and Sierra Pacific Power Company (both doing business as NV Energy and hereinafter collectively "NVE"). These are now additional rate-regulated subsidiaries of BHE. It was determined that PacifiCorp and the other parties to the Agreement would mutually benefit from the inclusion of additional rate-regulated BHE subsidiaries to the pool of participants in the Agreement. Accordingly, the Agreement is being amended to incorporate these two NVE entities pursuant to a First Amended Intercompany Mutual Assistance Agreement (included with this notice as Attachment A). Idaho Public Utilities Commission November 3,2015 Page2 As described in the initial notice sent to the Commission, the Agreement is similar in structure to the Intercompany Administrative Services Agreement ("IASA") used by BHE and its subsidiaries to share administrative services.' The Agreement is intended to be an additional tool for responding to emergencies. All aspects of providing assistance will be governed by the Edison Electric Institute Mutual Assistance Agreement, the Western Region Mutual Assistance Agreement or such other standard voluntary assistance agreements as may be customarily used in the industry, and conforming edits are being made to the Agreement to reflect the underlying terms and conditions of those industry agreements. However, notwithstanding such agreements, reimbursement of costs will be governed by Article 4 of the Agreement. This generally provides that goods will be reimbursed at the replacement costs and services will be reimbursed as a direct charge, service charge or allocation as applicable under the IASA. The Agreement, as amended, serves the public interest by adding additional, external resources for responding to emergencies. The Company anticipates the need to rely on the Agreement to be rare and does not have estimates on annual spending under the Agreement at this time. PacifiCorp will only provide assistance under the Agreement to the extent doing so will not impair PacifiCorp operations. Please do not hesitate to contact me if you have any questions. Best Regards, R. Jeff Richards Vice President and General Counsel PacifiCorp Enclosures I The Commission approved the IASA as part of its approval of BHE's acquisition of PacifiCorp. In The Matter of the Joint Application of MidAmerican Energy Holdings Company (MEHC) and PacifiCorp dba Utah Power & Light Company for an Order Authorizing MEHC to Acquire PacifiCorp, Case No. PAC-E-05-8 Issued 02113/2006. B=nrsxrn- lhrHAwAY En-nev FIRST AMENDED INTERCOMPANY MUTUAL ASSISTANCE AGREEMENT BY AND BETWEEN RATE.REGULATED SUBSIDIARIES OF BERKSHIRE HATHAWAY ENERGY COMPANY This First Amended lntercompany Mutual Assistance Agreement ("Agreement") is entered into by and between rate-regulated public utility subsidiaries of Berkshire Hathaway Energy Company ("Company") (each a "Party" and together the "Parties") effective March 15,2015. WHEREAS, the Parties, with the exception of Nevada Power Company DBA NV Energy and Sierra Pacific Power Company DBA NV Energy, are the signatones of the lntercompany Mutual Assistance Agreement by and between Rate-regulated Subsidiaries of MidAmerican Energy Holdings Company effective February 15,2011 and wish to amend and restate their agreement in the manner provided herein; and WHEREAS, each of the Parties is either an electric public utility providing services to captive customers within franchised service areas, a transmission company, a local distribution company or an interstate pipeline company and each of the Parties is subject to the oversight of regulatory authorities, such as a state public utility commission and/or the Federal Energy Regulatory Commission ("FERC"); and WHEREAS, a Party may from time to time require mutual aid or assistance from another Party, which may involve the provision of goods, services and/or specialized resources for temporary emergency purposes, or the emergency interchange of equipment or goods by one Party to the other, as long as provided without detriment to the providing Party's public utility obligations ("mutual assistance"); and WHEREAS, as rate-regulated entities, the Parties have obligations to provide reasonably adequate service, and from time to time may be able to assist one another in providing mutual assistance; and WHEREAS, the Parties are some of the signatories of the lntercompany Administrative Services Agreement ('IASA) by and between the Company and its subsidiaries, which permits the sharing of professional, technical and other specialized resources, and wish to enter into an agreement that will allow mutual assistance on similar terms; and WHEREAS, in order to minimize any potential for cross-subsidization or affiliate abuse and ensure appropriate oversight, participation under this Agreement is limited to Rate-Regulated Subsidiaries of the Company; and WHEREAS, effective May 1, 2014, the name of Company was changed from MidAmerican Energy Holdings Company to Berkshire Hathaway Energy Company; and WHEREAS, from time to time, additional Rate-Regulated Subsidiaries may wish to execute the Agreement in order to provide and take advantage of mutual assistance provided hereunder. NOW, THEREFORE, in consideration of the premises and mutual agreements set forth herein, the Parties wish to amend the Agreement and agree as follows: B-nrsun: Ilennury Errnev ARTICLE 1. PROVISION OF MUTUAL ASSISTANCE Upon and subject to the terms of this Agreement, one Party ("Providing Party") may provide mutual assistance to another Party ("Recipient Party"), Availability and provision of mutual assistance shall be governed by an applicable mutual aid agreement, which may be the Edison Electric lnstitute Mutual Aid Agreement, the Western Region MutualAssistance Agreement, or such other agreement as may be customarily used in the region where the mutual assistance is to be provided ("applicable mutual aid agreement"), the provisions of which are incorporated in this Agreement by reference. To the extent not inconsistent with obligations under the applicable mutual aid agreement, the provisions of this Agreement shall govern the conduct and obligations of the Parties. The Parties recognize that there may be several phases of mutual assistance activity, including pre-notification of a potential need for assistance, a request for information related to the costs and availability of mutual assistance, and actual mobilization. Only actual mobilization is considered the provision of mutual assistance. ARTICLE 2. DEFINITIONS For purposes of this Agreement, these terms shall be defined as follows: (a) "Laws" shall mean any law, statute, rule, regulation or ordinance of any governmental authority, which may be without limitation a federal agency, a state or a governmental subdivision. (b) "Rate-Regulated Subsidiary" shall mean a subsidiary of the Company ("subsidiary') that is regulated by one or more State Commissions and/or FERC in the subsidiary's capacity of providing regulated public utility services to captive customers within franchised public utility service areas, FERC jurisdictional transmission service or which is an interstate pipeline or local distribution company as defined by FERC, (c) "State Commissions" shall mean any state public utility commission or state public service commission with utility regulatory jurisdiction over a Rate-Regulated Subsidiary, ARTICLE 3. EFFECTIVE DATE This Agreement shall be effective as of the date of execution; provided, however, that in those jurisdictions in which regulatory approval is required before the Agreement becomes effective, the effective date shall be as of the date of such approval. ARTICLE 4. CHARGES AND PAYMENT The Parties recognize that charges for mutual assistance will begin when a request for mobilization of assistance is submitted to the Providing Party by the Recipient Party. Costs associated with pre-notification of a potential need or gathering of information associated with a request for mutual assistance will not be charged to the Recipient Party. Providing Parties will bill Recipient Parties, as appropriate, for mutual assistance rendered under this Agreement in as specific a manner as practicable. Page 2 B:nrsnm: llnnmav Emnev Payments for mutual assistance shall be governed by an applicable mutual aid agreement, which may be the Edison Electric lnstitute Mutual Aid Agreement, the Western Region Mutual Assistance Agreement, or such other agreement as may be customarily used in the region where the mutual assistance is to be provided. ln the event that the mutual assistance consists only of the interchange of a good in an emergency circumstance, the Recipient Party shall reimburse the Providing Party the replacement cost of the transferred good. Any associated services shall be reimbursed by the Recipient Party as a direct charge, service charge or allocation as applicable pursuant to the IASA. ARTICLE 5. STANDARD OF CARE The Parties will comply with all applicable Laws regarding affiliated interest hansactions, including timely filing of regulatory filings and reports. The Parties agree not to cross-subsidize and shall comply with any applicable Laws and State Commission, FERC or other applicable orders, Subject to the terms of this Agreement, the Parties shall perform their obligations hereunder in a commercially reasonable manner. ARTICLE 6. TAXES Each Party shall bear all taxes, duties and other similar charges, except taxes based upon its gross income (and any related interest and penalties), imposed as a result of its receipt of mutual assistance under this Agreement, including without limitation sales, use and value-added taxes. ARTICLE 7. ACCOUNTING AND AUDITING Providing Parties shall maintain such books and records as are necessary to support the charges for mutual assistance, in sufficient detail as may be necessary to enable the Parties to satisfy applicable reg u latory req u irements ("Records"). Al I Parties : (a) Shall provide access to the Records at all reasonable times; (b) Shall maintain the Records in accordance with good record management practices and with at least the same degree of completeness, accuracy and care as it maintains for its own records; and (c) Shall maintain its own accounting records, separate from the other Parties' accounting records, Subject to the provisions of this Agreement, Records supporting mutual assistance billings shall be available for inspection and copying by any qualified representative or agent of a Party, at the expense of the inquiring Party. ln addition, FERC or State Commission staff or agents may audit the accounting records of Providing Parties that form the basis for charges to Rate-Regulated Subsidiaries, All Parties agree to cooperate fully with such audits. ARTICLE 8. COOPERATION WITH OTHERS The Parties will use good faith efforts to cooperate with each other in all matters related to the provision and receipt of mutual assistance. Such good faith cooperation will include providing electronic access in the same manner as provided other vendors and contractors to systems used in connection with mutual Page 3 B:nrsmn- llenumvErnsv assistance and using commercially reasonable efforts to obtain all consents, licenses, sublicenses or approvals necessary to permit each Party to perform its obligations. Each Party shall make available to another Party any information required or reasonably requested by the Party related to the provision of mutual assistance and shall be responsible for timely provision of said information and for the accuracy and completeness of the information; provided, however, that a Party shall not be liable for not providing any information that is subject to a confldentiality obligation or a regulatory obligation not to disclose or be a conduit of information owned by it to a person or regulatory body other than the other Party. The Parties will cooperate with each other in making such information available as needed in the event of any and all intemal or extemal audits, utility regulatory proceedings, legal actions, or dispute resolution, Each Party shall fully cooperate and coordinate with each othe/s employees and contractors in the performance or provision of mutual assistance. The Parties shall not commit or permit any act that will interfere with the performance or receipt of mutual assistance by any Party's employees or contractors. ARTICLE 9. COMPLIANCE WITH ALL LAWS Each Party shall be responsible for (a) its compliance with all Laws affecting its business, including, but not limited to, laws and govemmental regulations goveming federal and state affiliate transactions, workers' compensation, health, safety and security; (b) pursuant to the provisions of the applicable mutual aid agreement, any use it may make of the mutual assistance to assist it in complying with such laws and govemmental regulations; and (c) compliance with FERC's Standards of Conduct, Market-Based Rate Affiliate Restrictions, and any comparable restrictions imposed by FERC or a State Commission. Page 4 B:nrsun- llenrmv Emnev ARTICLE 10. DISPUTE RESOLUTION The Parties shall promptly resolve any conflicts arising under this Agreement and such resolution shall be final. lf applicable, adjustments to the charges will be made as required to reflect the discovery of enors or omissions in the charges. lf the Parties are unable to resolve any service, performance or budget issues or if there is a material breach of this Agreement that has not been corrected within ninety (90) days, representatives of the affected Parties will meet promptly to review and resolve those issues in good faith. ARTICLE 11. TERMINATION FOR CONVENIENCE A Party may terminate its participation in this Agreement either with respect to all, or part, of the mutual assistance provided hereunder at any time and from time to time, for any reason or no reason, by giving notice of termination to the other Party as soon as reasonably possible. ARTICLE 12. CONFIDENTIALINFORMATION/NONDISCLOSURE To the fullest extent allowed by law, the provision of mutual assistance or reimbursement for mutual assistance provided pursuant to this Agreement shall not operate to impair or waive any privilege available to any Party in connection with the mutual assistance, its provision or reimbursement thereof. The Parties will handle all information exchanged in the course of performing mutual assistance in accordance with requirements for documenting and handling critical infrastructure information as defined by the North American Electric Reliability Corporation Critical lnfrastructure Protection Standards and will further comply with non-disclosure requirements of other applicable regulations. The Parties shall use good faith efforts at the termination or expiration of this Agreement to ensure that any user access and passwords related to this Agreement are terminated. ARTICLE 13. PERMITTED DISCLOSURE Notwithstanding provisions of this Agreement to the contrary, each Party may disclose confidential information: (a) To the extent required by a State Commission, FERC, a court of competent jurisdiction or other governmental authority or otherwise as required by Laws, including without limitation disclosure obligations imposed under federal securities laws, provided that such Party has given the other Party prior notice of such requirement when legally permissible to permit the other Party to take such legal action to prevent the disclosure as it deems reasonable, appropriate or necessary; or (b) On a "need-to-know" basis under an obligation of confidentiality to its consultants, legal counsel, affiliates, accountants, banks and other financing sources and their advisors. ARTICLEl4. SUBCONTRACTORS To the extent provided herein, the Parties shall be fully responsible for the acts or omissions of any subcontractors of any tier and of all persons employed by such subcontractors and shall maintain complete control over all such subcontractors, it being understood and agreed that anything not contained herein Page 5 B:nrsmn- lhnreunv Emnev shall not be deemed to create any contractual relation between the subcontractor of any tier and the Parties. ARTICLE 15. NONWAIVER The failure of a Party to insist upon or enforce strict performance of any of the terms of this Agreement or to exercise any rights herein shall not be construed as a waiver or relinquishment to any extent of its right to enforce such terms or rights on any future occasion. ARTICLEl6. SEVERABILITY Any provision of this Agreement prohibited or rendered unenforceable by operation of law shall be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement. ARTICLE 17. ENTIRE AGREEMENT/DOCUMENTS INCORPORATED BY REFERENCE All understandings, representations, warranties, agreements and referenced attachments, if any, existing between the Parties regarding the subject matter hereof are merged into this Agreement, which fully and completely express the agreement of the Parties with respect to the subject matter hereof, ARTICLE 18. ADDITION OF RATE.REGULATED SUBSIDIARIES Without further action by the Parties, effective on the date of its execution, a Rate-Regulated Subsidiary may enter into the Agreement and be bound thereby. Page 6 By: Brnxsrn- lhnremvfunev This Agreement has been duly executed on behalf of the Parties as follows: KERN RIVER GAS TRANSMISSION COMPANY MIDAMERICAN ENERGY COMPANY By: Title:Title: Name: Date: NORTHERN NATURAL GAS COMPANY By: Title: PACIFICORP By: Name: Date: Name: Date: SIERRA PACIFIC POWER COMPANY DBA NV EI,IERGY By: Name: Date: NEV DBA By: - ADA POWER COMPANY NV ENERGY Title: Name: Date: Page 7