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HomeMy WebLinkAbout20170222Redacted Notice of Affiliate Transaction.pdfYPncrnConp PacifiCorp Notice of Affiliate Transaction Case No. PAC-E-05-8 R. Jeff Richards Vice President and General Counsel U07 W North Temple, Suite 320 salt Lake cio, uT 84116 801-220-4734 Ollice jeff.richail@1tacifi corp.com iJ.:4.) o''ln February 21,2017 Idaho Public Utilities Commission 472West Washington Boise,ID 83702-5983 Attention: Diane Hanian Commission Secretary ia. -n Ir! -.; .!J ,ri r_v \ Jl\) ;"i"1-= 15Er'.| L', cl N)(}-rRe Dear Ms. Hanian: 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 indirect affiliate interest transaction with Amarillo Gear Company LLC (Amarillo). The Company intends to purchase Amarillo reduction gear boxes and drive shaft assemblies through Midwest Cooling Towers, Inc. (Midwest), among other non-Amarillo equipment. The parties to the transaction agreed to use PacifiCorp's standard Materials Supply Contract (Agreement) for this transaction. The Agreement contains sensitive pricing information which, if disclosed to the public, could erode the Company's bargaining power in the future. A copy of the Agreement is included as Confidential Attachment A. PacifiCorp is a wholly-owned, indirect subsidiary of Berkshire Hathaway Energy Company (BHE). BHE is a subsidiary of Berkshire Hathaway, Inc. (Berkshire Hathaway). Berkshire currently holds a majority interest in The Marmon Group (Marmon). Marmon comprises four autonomous companies consisting of 15 diverse stand-alone business sectors, and about 185 independent manufacturing and service businesses. Amarillo is part of one of the four such autonomous companies, Marmon Food, Beverage & Water Technologies Company. Therefore, Berkshire Hathaway's ownership interest in Marmon may create an affiliated interest between PacifiCorp and Amarillo. The Company recently conducted a request for proposal process to select a vendor to replace certain mechanical equipment for ten cooling tower cells at its Huntington Plant. The equipment to be replaced included ten each of gearboxes, shaft assemblies and fan assemblies. Of the eight companies who provided a bid in response to the request for proposal, seven companies included Amarillo equipment in their proposals. The Company selected Midwest because it submitted the lowest cost bid. The value of all equipment to be purchased under the Agreement is Diane Hanian Notice of Affiliate Transaction February 21,2017 approximately $392,600. The value of the Amarillo equipment to be supplied under the Agreement is approximately $231,600. Detailed pricing information for the equipment to be provided by Midwest is contained in Exhibit B to Confidential Attachment A. The Company used its standard request for proposal procurement process when seeking a vendor to equipment as described in the Agreement. The Agreement was prepared in accordance with PacifiCorp's procurement policies and procedures and contains standard commercial terms and conditions to protect the Company's ability to provide safe and reliable service. Thus, the use of Midwest as supplier of the equipment under the Agreement will not harm 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 IDAI{O AFFILIATED INTEREST FILING CONFIDENTIAL ATTACHMENT A AGREEMENT This attachnent is confidential in its entirety andwill be provtded under separate cover.