20160701Redacted Notice of Affiliate Transaction.pdf

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R. Jeff Richards
Vice President and General Counsel
1407 W. North Temple, Suite 320
Salt Lake CiO, UT 84116
801-220-4734 Offtce
j eff. ri c h ar ds@t acifi co rp. c o m
Ju,ly 1,2016
VA OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472West Washington
Boise,lD 83702-5983
Attention: Jean D. Jewell
Commission Secretary
Re: 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 OrderNo. 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 "Berkshire
Hathaway Energy Company" or "BHE"), of an affiliated interest transaction with International
Business Machines Corporation (IBM). PacifiCorp desires to enter into an Enterprise Software
and Support Option (ESSO) agreement with IBM and IBM Credit LLC (IGF), under which IBM
will provide certain products and services for multiple applications under the terms and
conditions of one agreement, rather than providing those services under a separate agreement for
each application.
PacifiCorp will receive cost savings for the software and services provided in accordance with
the ESSO. PacifiCorp will also enter into a Transaction Finance Agreement (TFA) under which
the company will remit payments for the products and services provided by IBM under the
ESSO. A verified copy of the ESSO is included with this Notice as Attachment A. A verified
copy of the TFA is included with this Notice as Attachment B. Both Attachments are designated
as Confidential, and are commercially-sensitive and are subject to a provision in the ESSO
requiring that the entire contract (and the terms of associated documents that are incorporated
therein by reference, including the TFA) be designated confidential. Disclosure of the
information could erode the company's bargaining position and could be deemed to be a breach
of contractual obligations.
PacifiCorp is a wholly-owned indirect subsidiary of Berkshire Hathaway Energy Company
(BHE). BHE is a subsidiary of Berkshire Hathaway,Inc. (Berkshire Hathaway). Berkshire
Hathaway publicly owns IBM common stock totaling greater than a five percent interest.
Jean D. Jewell
Notice of Affiliate Transaction
July 1,2016
Therefore, Berkshire Hathaway' s ownership
some Pacifi Corp jurisdictions.
interest in IBM may create an affiliated interest in
PacifiCorp has historically used a variety of technologies from IBM to support the delivery of
key business functions. Specific functions provided by IBM include support for the company's
customer service and billing, support for enterprise reporting and analytics in the Enterprise Data
Warehouse, support for Corporate Enterprise Content Management for document storage,
archiving and retrieval, and support for optimization of energy trading activities. PacifiCorp has
previously provided notice of agreements for software and support services supporting the ESSO
to the Commission. The ESSO allows Company to bundle certain software licensing purchases
and support services to achieve benefits over the term ofthe contract.
PacifiCorp relies on software furnished by IBM to create and maintain critical business records.
This software is proprietary to IBM; therefore, only IBM is able to provide service. Without the
software furnished by IBM, many groups in the company would not be able to perform critical
tasks necessary for business functions or prepare reports related to those business functions.
Procurement and installation of different reporting systems would require considerable time and
expense. Accordingly, the transaction is consistent with the public interest.
Please do not hesitate to contact me if you have any questions.
Vice President and General Counsel
PacifiCorp
Enclosures
R. Jeff RlelFlrds
CONFIDENTIAL
ATTACHMENTA
Enterprise Software and Support Option
This attachment is confidential in its entirety and
will be provided under separate cover
CONFIDENTIAL
ATTACHMENT B
Transaction Finance Agreement
This attachment is confidential in its entirety and
will be provided under separate cover