20170926Notice of Affiliate Transaction.pdf

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R. Jeff Richards
Vice President and General Counsel
1407 W. North Temple, Suile 320
salt Lake cia, uT 84116
801-220-4734 OlJiceI [e-mail]
September 26,2017
Idaho Public Utilities Commission
472 West 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 17(2), incorporated in the ldaho
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 FlightSafety International, Inc.
("FlightSafety"). This transaction is an amendment to a transaction initially filed with the
Commission in 2015.
FlightSafety offers a variety of aviation training services, including training for pilots, flight
attendants and customer service. PacifiCorp intends to use the flight simulator training services
offered for a specific navigation system installed in its aircraft.
In June 2015, BHE entered into a Master Professional Services Contract ("Master Contract") with
FlightSafety. By signing the Affiliate Participation Letter ("Agreement") to the Master
Professional Services Contract, PacifiCorp became a participant in the contract. Rocky Mountain
Power filed notice with the Commission of this affiliate agreement July 2,2015. The Master
Contract was set to expire July 31, 2017 . BHE and Flight Safety agreed to extend the term of the
Master Contract through and including July 31, 2020, through an Amendment to the Master
Contract ("Amended Master Contract").
PacifiCorp intends to sign a new Affiliate Participation Letter to the Amended Master Contract. A
copy of the Amended Master Professional Services Contract between BHE and FlightSafety,
including Exhibit C, Form of Affiliate Participation Letter, under which PacifiCorp would become
bound, is included with this notice as Confidential Attachment A. The Amended Master Contract
contains sensitive pricing information which, if disclosed to the public, could erode the Company's
bargaining power in the future.
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Diane Hanian
Notice of Affiliate Transaction
September 26,2017
PacifiCorp is a wholly-owned indirect subsidiary of BHE. BHE is a subsidiary of Berkshire
Hathaway, Inc. ("Berkshire Hathaway"). FlightSafety is also a subsidiary of Berkshire Hathaway.
Therefore, Berkshire Hathaway's ownership interest in FlightSafety and BHE creates an affiliated
interest for PacifiCorp in some jurisdictions.
PacifiCorp owns one aircraft used for its operations and employs pilots to fly the aircraft. The
Federal Aviation Administration ("FAA") requires that all pilots take flight simulator training at
least once per year, and BHE requires pilots to take training every nine months. PacifiCorp's
aircraft uses a specific navigation system for which FlightSafety offers the required training. BHE
issued a competitive tender in March 2017 seeking proposals for pilot training. Two proposals
were received in April 2017 and FlightSafety provided the lowest cost proposal. See Confidential
Attachment A (and specifically, Exhibit B thereto) for the annual rates.
Transacting with FlightSafety is in the public interest. PacifiCorp uses the aircraft for a variety of
purposes, including transporting personnel throughout its six states in emergency situations and to
transport personnel to conduct ordinary-course utility business if doing so is more cost-effective
than commercial flights. The pilots on staff must take at least one to two trainings per year to meet
FAA and BHE safety requirements. FlightSafety was selected as the best evaluated provider as a
result of a competitive bid.
Please do not hesitate to contact me if you have any questions.
Best Regards,
R. Jeff Richards
Vice President and General Counsel
PacifiCorp
Enclosures
REDACTED
ATTACHMENT A
AMENDED MASTER CONTRACT
THIS ATTACHMENT IS CONFIDENTIAL IN
ITS ENTIRETY AND IS PROVIDED UNDER
SEPARATE COVER