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Home My WebLink About20160708Redacted Notice of Affiliate Transaction.pdfYPncrnConp [1EC E IV ED :il16 iUL -B AII 9: l5 : ::.f ,-L-iC.- , r'11,1:.ilSSl0N R. Jeff Richards Vice President and General Counsel 1407 W. North Temple, Suite 320 salt Lake cio, uT 84116 801-2204734 OfJice j eff. r i c h ar ds@t a c iJic o rp. c o m July 8,2016 VA OVERNIGHT DELIWRY 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 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 "Berkshire Hathaway Energy Company" or "BHE"), of an affiliated interest transaction with International Business Machines Corporation (IBIO for a Statement of Work providing that IBM will provide to PacifiCorp consulting services related to its existing Content Manager OnDemand (CMOD) system. The consulting services will be provided under a Statement of Work (SOW) that will be executed upon the submission of all required regulatory filings. The SOW contains all relevant details regarding the consulting services IBM will provide to PacifiCorp, including pricing terms. The SOW is being issued under the terms and conditions of the existing IBM Customer Agreement (Original Agreement), which is the master contract under which IBM was originally engaged for the purchase and set-up of the CMOD system and related services. A verified copy of the SOW is included with this Notice as Attachment A. A verified copy of the Original Agreement is included with this Notice as Attachment B, for reference. Attachments A and B are designated as Confidential, and contain commercially-sensitive information and, accordingly, require designation as confidential. Disclosure of the information could erode Company's bargaining position and could be deemed a breach of its 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. Therefore, Berkshire Hathaway's ownership interest in IBM may create an affiliated interest in some Pacifi Corp jurisdictions. Jean D. Jewell Notice of Affiliate Transaction July 8,2016 The Company 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 PacifiCorp'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 been using the CMOD system for a number of years. CMOD is used to allow customers to view and print statements online. Due to the company's recent system-wide upgrades, certain corresponding changes and upgrades must be made to the existing CMOD system to allow full functionality of the system. This software is proprietary to IBM; therefore, only IBM is able to provide the necessary services related to these upgrades. It is estimated that PacifiCorp will spend approximately $28,020 for the services to be provided under the SOW. Procuring and installing a different system in lieu of upgrading the current CMOD system would require considerable time and expense. Having IBM perform the necessary CMOD system upgrades, rather than replacing the CMOD system, will result in cost savings to PacifiCorp. Accordingly, the transaction is consistent with the public interest. Please do not hesitate to contact me if you have any questions. Best Vice President and General Counsel PacifiCorp Enclosures IDAHO AFFILIATED INTEREST FILING ATTACHMENT A STATEMENT OF WORK This attachment is confidential in its entirety andwill be provided under separate cover. IDAHO AFFILIATED INTEREST FILING ATTACHMENT B IBM CUSTOMER AGREEMENT This attachment is confidential in its entirety andwill be provided under separate cover.