20200629Notice of Affiliate Transaction- Pryer Safe Harbor-Redacted.pdf

CONFIDENTIAL
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1407 W. North Temple, Syife,32i.. ,,'',:Ctf.#i$Siffiq
Salt Lake Ci$, aT 84116
801-2204565 Office
Tim. C I ar k@t ac ift c o rp. c o m
June29,2020
Idaho Public Utilities Commission
I l33l W. Chinden Blvd
Building 8 Suite 20lA
Boise,lD 83714
Attention: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 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),
PacifiCorp hereby provides notice of an affrliated interest transaction with BHE Wind, LLC
("BHE Wind") roritre purchase ofI worth of wind turbine equipment for
PacifiCorp's Pryor Mountain wind facility (the Wind Project). A copy of the Purchase and Sale
Agreement (the "Agreement") is included with this Notice as Confidential Attachment A. The
Agreement contains sensitive and confidential pricing and cost information which, if disclosed to
the public, could erode the Company's ability to bargain with vendors in the future.
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 hansferring certain wind turbine equipment to PacifiCorp for
use in its Wind Project.
Re:
Idaho Public Utilities Commission
Page2
CONFIDENTIAL
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Vestas Vl l0 60 hertz 2.0MW will be transferred from BHE Wind to
PacifiCorp priced at BHE Wind's cost . The costs of the transferred
equipment that were paid and incurred by ln 16 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). 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.l This transaction supports the cost effectiveness and deliverability for the Pryor
Mountain facility for the benefit of customers.
Please do not hesitate to contact me if you have any questions.
Sincerely,
- f ,-*-h. l! (/^. ( - -c
Timothy K. Clark
Senior Attorney
PacifiCorp
Enclosures
I 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 ofthe five-
percent safe-harbor metlrod for establishing the beginning ofconstruction date. Conversely, when a transfer consists
solely oftangible 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 ofthe five-percent safe harbor.
2
CONFIDENTIAL
ATTACHMENT A
PacifiCorp Notice of Affiliate Transaction
to
THIS ATTACHMENT IS CONFIDENTIAL IN ITS
ENTIRETY AND IS PROVIDED UNDER SEPARATE
COVER