The URL can be used to link to this page

Home My WebLink About20170424Redacted Notice of Affiliate Transaction.pdfPecrFrConp l, ,l i11 lili 3' 3 | R Jeff Richards Vice President and Generul Counsel 1407 llest North Temple, Suite 320 Salt Lake CiA, UT 84116 801-22047i4 Ollice 801-2204058 Fox j elf , r i c h ar ds@t a c iJic o r p. c om i:l ,-:'.l, I l\/ E D April24,2017 VIA OWRNIGHT DELIWRY Idaho Public Utilities Commission 472West Washington Boise,ID 83702-5983 Attention:Diane Hanian Commission Secretary PacifiCorp Notice of Affiliate Transaction Case No. PAC-E-05-8 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 (Company) by MidAmerican Energy Holdings Company (MEHC)l, of an affiliate interest transaction with Wells Fargo Bank, National Association and Wells Fargo Securities, LLC (Wells Fargo), and U.S. Bank National Association (U.S. Bank). PacifiCorp has selected Wells Fargo and U.S. Bank to each be one of seven joint lead arrangers for establishing a new revolving credit and letter of credit facility that will replace one of the Company's existing revolving credit agreements. As detailed in PacifiCorp's May 10, 2016 filing this is Phase II of the Credit Agreement replacements. Included with this filing are supporting documents to which Wells Fargo or U.S. Bank will be a party. A copy of the draft Confidential Commitment Letter, to which both Wells Fargo and U.S. Bank will be a party, is included as Attachment A. A copy of the draft Confidential Active Arranger Fee Letter to which Wells Fargo will be aptrty to is included as Attachment B. Included as Attachment C is a draft Confidential Passive Arranger Fee Letter to which U.S. Bank will be apafiy. All attachments hereto shall be referred to collectively as "Confidential Attachments." These Confidential Attachments contain commercially-sensitive information and are submitted as confidential. These documents contain "draft" designations, which will be removed before execution. No material changes are expected to the terms and conditions of these letters. Re I As of April 30,2014, MEHC was renamed Berkshire Hathaway Energy REDACTED Idaho Public Utilities Commission Notice of Affiliate Transaction Page2 PacifiCorp is a wholly-owned indirect subsidiary of Berkshire Hathaway Energy Company (BHE). BHE is a subsidiary of Berkshire Hathaway, Inc. (Berkshire Hathaway). Wanen E. Buffet (an individual who may be deemed to control Berkshire Hathaway), Berkshire Hathaway, various subsidiaries of Berkshire Hathaway and various employee benefit plans of Berkshire Hathaway subsidiaries together hold an interest in excess of five percent in each of Wells Fargo and U.S. Bank common stock. Therefore, Berkshire Hathaway's ownership interest in each of Wells Fargo and U.S. Bank creates an affiliated interest in some PacifiCorp jurisdictions. In anticipation of replacing the credit agreements, PacifiCorp and its parent company, BHE, held discussions with, and solicited proposals from, a number of banks conceming PacifiCorp's credit agreements. Several banks, including Wells Fargo and U.S. Bank, provided information on bank market conditions, structural considerations including tenors and impact on pricing and fees, syndication strategies, arrangement and upfront fees, experience in arranging comparable facilities for utilities and other corporate borrowers, and other considerations. The Company selected Wells Fargo as one of three active joint lead arrangers that will be engaged to assist PacifiCorp in arranging a replacement credit facility to the 2018 Credit Agreement. The Company selected U.S. Bank as one of four passive joint lead arrangers to further assist with replacing the 201 8 Credit Agreement. The selection of each of Wells Fargo and U.S. Bank as one of the seven joint lead arrangers was based on their experience in syndicating comparable facilities for utilities, knowledge of current bank market conditions, credit ratings, willingness to make significant credit commitments to PacifiCorp, knowledge of the utility industry, the Company and its operations, successful outcomes in prior financing transactions for the Company, and reasonable arrangement and other fees. The selection of Wells Fargo or U.S. Bank was not influenced by Berkshire Hathaway's ownership interest. Wells Fargo's arrangement fee will be equal to the fees paid to one other active joint lead arrangers (while two other active joint lead arrangers will be paid slightly less due to expected lesser roles and work). U.S. Bank will be paid arranger fees approximately equal to or less than the other passive joint lead arrangers. PacifiCorp believes these fees to be at market rates or better for the Company. PacifiCorp anticipates Wells Fargo's and U.S. Bank's arrangement and upfront fees related to replacing the 2018 Credit Agreement will beapprJximat.lvl undl, respictivetv. rn addition, both Wells Fargo and U.S. Bank will be paid an ongoing commitment fee and other fees at the same rate as all other banks in the new credit facility. As a public utility, the Company is expected to acquire, construct, improve, and maintain suflicient utility facilities to serve its customers adequately and reliably at reasonable cost. Revolving credit agreements and borrowings thereunder are part of a program to finance the Company's facilities taking into consideration prudent capital ratios, eaming coverage tests and market uncertainties as to the relative merits of the various types of securities the Company could sell. Accordingly, these transactions with Wells Fargo and U.S. Bank are consistent with the public interest. Idaho Public Utilities Commission Notice of Affrliate Transaction Page 3 Please do not hesitate to contact me if you have any questions. Best Regards, R. JeffRichards Vice President and General Counsel PacifiCorp Enclosures CONFIDENTIAL ATTACHMENTA DRAFT COMMITMENT LETTER THIS ATTACHMENT IS CONFIDENTIAL IN ITS ENTIRETY AND IS PROVIDED UNDER SEPARATE COVER CONFIDENTIAL ATTACHMENTB DRAFT ACTIVE ARRANGER FEE LETTER THIS ATTACHMENT IS CONFIDENTIAL IN ITS ENTIRETY AND IS PROVIDED UNDER SEPARATE COVER CONFIDENTIAL ATTACHMENT C DRAFT PASSIVE ARRANGER FEE LETTER THIS ATTACHMENT IS CONFIDENTIAL IN ITS ENTIRBTYAND IS PROVIDED UNDER SEPARATE COVER