20190718Notice of Affiliate Transaction.pdf

REC E IVED
R JelfRichards
Vlce President and Generul Counsel
110711a. North Temple, Suite i20
Sah Lake CtA, UT 81116
801-220-4734 OfJice
j elli ric h ails@t actJic orp. c o m
July 18,2019
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
byOrderNo.29998 March 1.4,2006, inthe above-referencedproceeding, approvingthe
acquisition of PacifiCorp by MidAmerican Energy Holdings Company (now "Berkshire
Hathaway Energy Company'' or "BHE'), of an affiliate interest transaction with Penn Machine
Company LLC ('?enn Machine"). PacifiCorp intends to purchase Penn Machine air preheater
main drive gear box parts ("Equipmenf'). The parties to the transaction agreed to use
PacifiCorp's Pwchase Order Standard Terms and Conditions ("Agreement") for this transaction.
PacifiCorp provides the Agreement as a confidential attachment because it 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
(BfE). BFIE is a subsidiary of Berkshire Hathaway, Inc. (Berkshire Hathaway). Berkshire
Hathaway currently holds a majority interest in Penn Machine. Therefore, Berkshire Hathaway's
ownership interest in Penn Machine creates an affiliated interest with PacifiCorp in some
PacifiCorp jurisdictions.
PacifiCorp contacted the manufactures of the air preheater system and boiler used at the Jim
Bridger plant to obtain competitive bids for the Equipment. The air preheater system is a major
component in the boilers used at the plant to pre-warm combustion air in the boiler; the main
gear box operates the air preheater system. In response to this request, the Company was
informed the Equipment can only be provided by Penn Machine as it is propriety to Penn
Machine.
The company used its competitive bid process when seeking a vendor for air preheater main
drive gearbox parts. The Agreement was prepared in accordance with PacifiCorp's procurement
policies and procedures and contains standard commercial terms and conditions to protect
PacifiCorp's ability to provide safe and reliable service. Thus, the use of Penn Machine as
supplier of the Equipment under the Agreement is in the public interest.
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Diane Hanian
Notice of Affiliate Transaction
July 18,2019
Please do not hesitate to contact me if you have any questions.
Best Regards,
R.J
Vice and General Counsel
PacifiCorp
Enclosures
REDACTED
ATTACHMENT A
PURCHASE ORDER STANDARD TERMS AND CONDITIONS
THIS ATTACHMENT IS CONFIDENTIAL IN
ITS ENTIRETY AND IS PROVIDED UNDER
SEPARATE COVER