20200604Notice of Affiliate Transaction-Redacted.pdf

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June 4,2020
Idaho Public Utilities Commission
I l33l W. Chinden Blvd
Building 8 Suite 20lA
Boise,ID 83714
Affention:Diane Hanian
Commission Secretary
PacifiCorp Notice of Affiliate Transaction
Case No. PAC-E-05-8
Dear Ms. Hanian:
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 on
March 14,2006, in the above-referenced proceeding, approving the acquisition of PacifiCorp by
MidAmerican Energy Holdings Company (now Berkshire Hathaway Energy Company),
PacifiCorp hereby provides notice of PacifiCorp hereby provides notice of an affiliated interest
transaction with of an affiliated interest transaction with BHE Wind, LLC ("BHE Wind"). BHE
Wind will be conveying equipment to PacifiCorp for PacifiCorp's TB Flats I and II wind facility
(the "Wind Project"). A copy of the Purchase and Sale Agreement is included with this Notice as
Confidential Attachment A. The agreement contains commercially-sensitive information which,
if disclosed to the public, could erode the Company's ability to bargain with vendors in the
future, and it is submitted as confidential.
PacifiCorp is a wholly-owned subsidiary of Berkshire Hathaway Energy Company
("BHE"). BHE Renewables, LLC ("BHER") is also a wholly-owned subsidiary of BHE. BHE
Wind is a wholly owned subsidiary of BHER. Therefore, BHE's ownership interest in
PacifiCorp and BHER creates an affiliate interest relationship between PacifiCorp and BHE
Wind.
Based in Phoenix, Arizona, BHE Wind owns solar, wind, geothermal, and hydroelectric
projects that produce energy for both the wholesale market and for customers under long-term
power agreements. BHE Wind is transferring certain wind turbine equipment to PacifiCorp for
use in its Energy Vision 2020 projects. Energy Vision 2020 was assessed in the Company's 2017
Integrated Resource Plan (IRP) preferred portfolio, which identified a time-limited opportunity
to procure approximately 1,100 mega-watts (MW) of cost-effective Wyoming wind facilities and
Re:
CONFIDENTIAL
Notice of Affiliate Transaction
June 4,2020
Page2
REDACTED
construct transmission facilities to relieve existing congestion and allow interconnection of those
new wind facilities, while providing all-in customer savings. The Wind Project is a component
of the Energy Vision 2020 projects.
Vestas Vl l0 60 hertz 2.0MW equipment will be transferred from BHE Wind to PacifiCorp via a
purchaseandsaleagreementpriiedatBHEWind,s.o'toff.Thecostsofthe
transferred equipment were paid and incurred by BHE Wind in 2016 and are projected to
constitute five percent or more of the eventual total cost of the Wind Project. This "five-percent
safe harbor" equipment establishes a2016 beginning of construction date that qualifies the Wind
Project for 100 percent Production Tax Credits ("PTCs") so long as the Wind Project is placed in
service before January 1,2021. If this same equipment was transferred to PacifiCorp by an
unrelated party (a non-affiliated party), the costs would be treated as paid and incurred by
PacifiCorp in2020 rather than in 2016, and the project would not be eligible for 100 percent
PTCs. (With respect to transfers of solely tangible personal property between related parties,
amounts paid or incurred by the transferor with respect to such property can be taken in to
account by the transferee for the purposes of the five-percent safe-harbor method for establishing
the beginning of construction date. Conversely, when a transfer consists solely of tangible
personal property to a transferee not related to the transferor, costs paid or incurred by the
transferor may not be taken into account by the transferee for the purposes of the five-percent
safe harbor.) Thus, this transaction supports the cost effectiveness and deliverability of Energy
Vision 2020 for the benefit of customers.
Please do not hesitate to contact me if you have any questions.
Sincerely,
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Timothy K. Clark
Senior Attorney
PacifiCorp
Enclosures
2
CONFIDENTIAL
ATTACHMENT A
PacifiCorp Notice of Affiliate Transaction
to
THIS ATTACHMENT IS CONFIDENTIAL IN ITS
ENTIRETY AND IS PROVIDED UNDER SEPARATE
COVER