20180119Notice of Affiliate Transaction.pdf

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R. Jeff Richards
Vice President and Generql Counsel
1407 W. North Temple, Suite 320
salt Lake cio, uT 84116
801-220-4734 Ollice
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January 19,2018
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 17(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 affiliate interest transaction with Bridger Coal Company ("BCC").
The proposed transaction is a transfer of certain coal analyzing equipment (Thermo-Fisher
Elemental Cross-belt Analyzer) by PacifiCorp to BCC. BCC is a joint venture owned 66.67 percent
by PacifiCorp through its direct wholly-owned subsidiary Pacific Minerals, Inc., and ldaho Power
Company, which owns the remaining 33.33 percent.
BACKGROUND AI\D PROPOSED TRANSFER
BCC is the primary supplier of coal to the Jim Bridger generating plant located in southwest
Wyoming. The Jim Bridger Power Plant is designed to burn coal within specific parameters to
maximize generation output. Coal outside of these parameters may cause the plant to be de-rated
and reduce generation output. In an effort to maximize quality of coal deliveries, samples are
currently taken and analyzed via a Thermo-Fisher CQM Analyzer as coal exits the mine to
determine quality characteristics prior to shipment to the power plant. The data from these samples
provides the flexibility to blend varying qualities of coal to improve overall quality delivered to
the plant.
A project to further improve coal quality analysis for blending purposes is being developed which
involves the purchase of the idled Thermo-Fisher Elemental Cross-belt Analyzer ("ECA") from
PacifiCorp's Deer Creek mine in Utah that meets the specification requirements for the project
and will result in a substantial cost savings to the project versus purchase of a new unit. Additional
savings will be achieved by reducing coal handling costs. The ECA will be located immediately
downstream from the underground mine shipping location that is approximately six miles
upstream from the CQM analyzer discussed above. The ECA will measure the coal quality of all
underground mine coal. This includes coal shipped directly to the plant, blended coal with the
surface mine and coal stockpiled for later blending purposes. The addition of the ECA will
accurately determine the quality of the underground mine coal. The existing coal analyzer does
not provide the accuracy for plant blending requirements.
Re
Diane Hanian
Notice of Affiliate Transaction
January 19,2018
The Deer Creek mine ceased operations in 2015. The ECA is therefore no longer needed at the
Deer Creek mine.
PacifiCorp requests to transfer the ECA to BCC so that BCC may use the analyzer at the BCC
mine.
The proposed transfer of the ECA is priced at market value and supported by both joint owners of
BCC. Two appraisals were obtained by BCC to determine the fair market value of the ECA.
Appraisals were performed by recognized and highly regarded engineering/consulting firms in the
mining and geology industry. The average of the two appraisals, $29,850, was used as the
transaction price.l
A copy of the Bill of Sale and Disclaimer Agreement ("Agreement") between PacifiCorp and BCC
for the ECA is included as Attachment A.
AFFILIATE STATUS AND NOTICE
BCC is a joint venture owned 66.67 percent by PacifiCorp through its direct, wholly-owned
subsidiary Pacific Minerals, Inc., and 33.33 percent by Idaho Power Company. Therefore,
PacifiCorp's ownership interest in BCC via Pacific Minerals, Inc. creates an affiliated interest
relationship between the Company and BCC in some PacifiCorp jurisdictions.
Transacting with BCC is in the public interest. The transfer will not have a negative effect on
PacifiCorp's ability to serve its customers or otherwise affect the public. The ECA has been idled
since the Deer Creek mine ceased operations in 2015 with no likely reuse potential within
PacifiCorp. This item was slated to be disposed through a public auction at some future date.
Amounts received at a previous auction of other Deer Creek mine equipment were equivalent to
scrap value, which is generally less than the market value. PacifiCorp, its customers, and the public
will benefit from the improved coal quality analysis and improved flexibility to blend varying
qualities of coal to improve the overall quality delivered to the Jim Bridger Plant. Purchasing the
used ECA provides significant savings over purchasing new equipment. Additionally, PacifiCorp
will be able to more efficiently and effectively manage its fuel costs.
Please do not hesitate to contact me if you have any questions.
Best Regards,
R. Jeff
Vice President and General Counsel
PacifiCorp
Enclosures
I The transfer of the ECA is subject to a six percent Wyoming sales tax that will be paid by BCC.
ATTACHMENTA
Check one of the followingtr Donation
tr Employee Sale
E Salvage Sale: Computer/Furniture/Other g/l 516390, Order
x Salvage Sale: Distribution Equip g/l 516390, Order
E Sale of Capital Item (if greater than $500 at time of purchase)
COSTCENTER# ORDER#
Send signed Bill of Sale & check to:
InternalMail: CCO, ATTN: SAP, 1033 Bldg.Extemal Mail: PacifiCorp, Attn: Central Cashiers/SAP
P.O. Box 5504, PortlandOF. 97228-5504
PACIFICORP
dba Rocky Mountain Power/Pacific Power
Date 0912012017
Control No: BS17- 0017
x Outside Sale
BILL OF SALE AND DISCLAIMER
In consideration ofremoval from property Rocky Mountain Power/Pacific Power, the undersigned, herein referred to as Seller/Donor, hereby
sells/donates To BRIDGER COAL COMPANY the following material:
DISCLAIMER OF WARRANTIES: Buyer/Donee acknowledges that it is buying/accepting the material "AS IS", AND WITH ALL
FAULTS. SELLER/DONOR MAKES NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS, EXCEPT THAT SELLER/DONOR WARRANTIES THAT IT HAS TITLE TO THE
MATERIAL AND/OR HAS THE RIGHT TO SELL/DONATE IT AND THAT IT IS FREE FROM ALL LIENS OR
ENCUMBRANCES.
INSPECTION/REPRESENTATIONS: Buyer/Donee acknowledges that it has thoroughly inspected the material and that it is buying/accepting
the material solely in reliance upon such inspection, and not in reliance upon any express, implied, or prospective warranties or representations
by Seller/Donor. Seller/Donor makes no representation that any lift equipment, either as an assembled package in any form or as individual
pieces, is appropriate for use ofintegration with any particular vehicle chassis or equipment.
IDEMNITY: Buyer/Donee agrees to defend, protect, indemnifu, and hold harmless Seller/Donor, its directors, officers, employees, agents,
and their representatives against and from any and all loss, claims, actions, or suits, including cost and attorney's fees, both at trial and on
appeal, for or on account ofany economic or personal injury or death to any persons, or any damage to or destruction ofany property belonging
to Seller/Donor or others, resulting from arising out of, or in any way connected with the design, manufacture, condition, maintenance, use,
or operation ofthe materials sold/donated hereunder, excepting only such injury or harm as may be caused solely by the gross negligence of
Seller/Donor, its directors, officers, employees, or agents.
LIMITATION OF LIABILITY: SELLER/DONOR SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES WHATEVER,
INCLUDING WITHOUT LIMITATION, LOSS OF USE, LOST PROFITS, OR LIABILITY TO THIRD PARTIES, AND WHETHER
SUCH LIABILITY AzuSES OUT OF TORT (INCLUDING NEGLIGENCE), WARRANTY, CONTRACT, OR STRICT LIABILITY.
BRIDGER COAL COMPANY DOES HEREBY UNDERSTAND AND AGREE TO THE ABOVE DISCLAIMERS, LIMITATIONS,
AND INDEMNITY PROVISIONS.
BRIDGER COAL COMPANY
Noted PACIFICORP
(Seller/Donor)
By
Date Material Received Employee Name
Dated
Employee No
Sub Total
Sales Ta:< Exempt
TOTAL
$ 29,850.00
$0
$ 29,850.00
Description of Material Sold Stock or Serial
No.
Qtv Unit Price Total Amount
2013 Thermo Scientific Model ECA Cross Belt Sampler sN 86r063 1 $ 29,850 $ 29,850
SAP ACCOUNT DISTRIBUTION
Check one o.f the .following PROVIDE COST CENTER #
ALSO work order # if applicable