20070206Application.pdf

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201 South Main, Suite 2300
Salt lake City, Utah 84111
February 5 , 2007
Idaho Public Utility Commission
Statehouse
472 West Washington Street
Boise, ID 83720
ATTN:Ms. Jean Jewell
Commission Secretary
Re: Case No. PAC-07-o~In the Matter of the Application of ROCKY
MOUNTAIN POWER for authority to (1) issue
and sell or exchange not more than $1 500 000 000
of debt, (2) enter into credit support arrangements
(3) enter into currency swaps, and (4) contribute or
sell additional debt to special-purpose entities.
Dear Commissioners:
PacifiCorp, doing business as Rocky Mountain Power (Company), respectfully requests that the
Commission enter its order, effective upon issuance, authorizing the Company to (1) issue and
sell or exchange, in one or more public offerings or private placements, fixed or floating rate
debt (Debt) in the aggregate principal amount not to exceed $1 500 000 000 or, ifthe Debt is
issued at an original issue discount, such greater amount as shall result in an aggregate offering
price of not more than $1 500 000 000 (or its equivalent amount in, or based upon, foreign
currencies determined at the time of issue), (2) enter into letter of credit arrangements with one
or more banks or such other agreements or arrangements as may be necessary or appropriate
from time to time, to provide additional credit support for the payment of the principal of
interest on and premium (if any) on such Debt, (3) enter into one or more currency swaps, and
(4) contribute or sell additional Debt to special-purpose entities (SPEs) in an amount based upon
the common securities of the SPE. The Company also requests that such increased authority
remain in effect until March 31 , 2012, on the condition the Company s senior secured debt be
rated at "investment grade" by both Standard & Poor s Rating Services and Moody s Investors
Service, Inc.
The requested authority is expected to accommodate the Company s 2007 and 2008 financing
requirements. These requirements include a current-year capital budget of approximately $1.
billion, comprised of significant investments to serve customers, including expenditures for
renewable resources consistent with acquisition commitments and the refinancing of
approximately $575 million of maturing debt and mandatorily redeemable preferred stock over
the two-year period. The Company expects that it will use a substantial portion of this requested
authority during 2007 and 2008 and will likely seek subsequent new or amended authority from
the Commission to permit continued access to the long-term debt markets.
The requested authority would supplement the financing flexibility that the Commission had
previously authorized in Order No. 297897 in Case No. PAC-05-5 (the 2005 Order). In the
2005 Order, the Commission authorized the Company to issue up to $1.0 billion of securities
identical to those covered in the enclosed Application. The Company has subsequently issued
$650 000 000 principal amount of debt under the 2005 Order authority and has $350 000 000 of
additional issuance authorized under that order. As the Company does not anticipate utilizing
the remaining authority under the 2005 Order, it may be withdrawn ifthe Commission issues its
order in this matter.
The enclosed application is substantially similar to the application submitted in connection with
the 2005 Order.
The Company respectfully requests that the Commission issue its order on or before March 1
2007. The Company also requests twenty certified copies of any order issued in this matter.
Notice of this Application will be published within seven days as required by the Commission
Rules of Procedure. Please note that the Company s Application Fee in the amount of$I OOO is
being submitted under separate cover.
It is respectfully requested that all formal correspondence and Staff requests regarding this
material be addressed to:
Bye-mail (preferred):datareq uest(fY pac ifi corp. com
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, Oregon 97232
By fax:[phone]
Informal inquiries may be directed to me at [phone].
Your attention to this matter is appreciated.
Sincerely,
Bruce N. Williams
Vice President and Treasurer
Enclosures:Application (1 original and 4 copies)
Proposed Form of Order (1 original and 4 copies)
CD containing the proposed Form of Order
APPLICA TION
::CF\BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. PAC-07-O;L LuG: rEG --ki1 '3: 4~
In the Matter of the Application of ROCKY
MOUNTAIN POWER for authority to (1) issue
and sell or exchange not more than
500 000 000 of debt, (2) enter into credit
support arrangements, (3) enter into currency
swaps, and (4) contribute or sell additional debt
to special-purpose entities.
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APPLICATION
Rocky Mountain Power (Company) hereby applies for an order of the Idaho Public
Utilities Commission (Commission) authorizing the Company to (1) issue and sell or exchange
in one or more public offerings or private placements, fixed or floating rate debt (Debt) in the
aggregate principal amount of not more than $1 500 000 000 or, if the Debt is issued at an
original issue discount, such greater amount as shall result in an aggregate offering price of not
more than $1 500 000 000 (or its equivalent amount in, or based upon, foreign currencies
determined at the time of issue), (2) enter into letter of credit arrangements with one or more
banks or such other agreements or arrangements as may be necessary or appropriate, from time
to time, to provide additional credit support for the payment of the principal of, the interest on
and the premium of the Debt, (3) enter into one or more currency swaps, and (4) contribute or
sell additional Debt to special-purpose entities (SPEs) in an amount based upon the common
securities of the SPE and Commission approval of the proposed guarantee and expense payment
agreements relating to the preferred securities of the SPE, in each case substantially as described
herein. The Company requests that such authority remain in effect until March 31 , 2012, so long
as the Company maintains a BBB- or higher senior secured debt rating, as indicated by Standard
& Poor s Rating Services, and a Baa3 or higher senior secured debt rating, as indicated by
Moody s Investors' Service , Inc. The application is filed pursuant to Chapter 9, Title 61 , ofthe
Idaho Code and Section 141 ofthe Commission s Rules of Procedure and is intended to amend
and supersede order No. 29787 (2005 Order) issued by the Commission May 17 2005 in docket
number P AC-05-5 (2005 Docket). This Application is substantially similar to that filed by the
Company in the 2005 Docket and seeks authorization to issue up to $1 500 000 000 of long-term
debt through March 31 , 2012 on the same terms and conditions contained in the 2005 Order.
The Company respectfully represents that:
(a)The official name of the applicant and address of its principal business office
PacifiCorp, doing business as Rocky Mountain Power
825 N.E. Multnomah, Suite 2000
Portland, OR 97232
(b)The state and date of incorporation~ each state in which it operates as a utility
The Company was incorporated under Oregon law in August 1987 for the purpose of
facilitating consummation of a merger with Utah Power & Light Company, a Utah
corporation, and changing the state of incorporation ofPacifiCorp from Maine to Oregon.
The Company currently serves customers as Rocky Mountain Power in Idaho, Utah and
Wyoming and as Pacific Power in California, Oregon and Washington.
(c)The name, address, and telephone number of persons authorized to receive notices and
communications:
Bruce N. Williams, Treasurer
PacifiCorp
825 N.E. Multnomah, Suite 1900
Portland, OR 97232
Telephone: [phone]
E-mail: bruce. williams(fYpacificorp.com
Evan S. Reynolds, Senior Counsel
Rocky Mountain Power
825 N.E. Multnomah, Suite 1800
Portland, OR 97232
Telephone: [phone]
E-mail: evan.reynolds(fYpacificorp.com
Jeffrey K. Larsen, Vice President
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
E-mail: ieff.larsen(fYpacificorp.com
Dean S. Brockbank, Senior Counsel
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
E-mail: dean.brockbank(fYpacificorp.com
Brian Dickman
Manager, Regulation
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
E-mail: brian.dickman(fYpacificorp.com
It is respectfully requested that all formal correspondence and Staff requests regarding
this material be addressed to:
Bye-mail (preferred):datarequest~pacifi corp. com
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, Oregon 97232
By fax:[phone]
Informal questions should be directed to Bruce Williams at [phone].
(d)The date by which Commission action is requested
March 1 , 2007.
(e)A full description of the securities proposed to be issued
(1)TyPe and nature of securities
Debt to be issued in one or more transactions as conditions permit. The Debt may
be secured or unsecured and may be subordinated or unsubordinated.
* Same description as in the Company s application in the 2005 Docket.
(2)
(3)
Amount of securities:
Not more than $1 500 000 000 aggregate principal amount or, if the Debt is issued
at an original issue discount, such greater amount as shall result in an aggregate
offering price of not more than $1 500 000 000 (or its equivalent amount in, or
based upon, foreign currencies determined at the time of issue); plus additional
Debt and guaranties relating to the preferred securities of special-purpose entities
in amounts as described below.
Interest Rate:
If the Debt bears a fixed rate, the interest rate will be set at the time of issuance.
If the Debt bears a floating rate, the interest rate will be set periodically based
upon a published or quoted index of short-term rates.
(4)Dates of issuance and maturity
The Company expects to issue the Debt from time to time in either public
offerings or private placements for cash or in exchange for its outstanding
securities. Maturities will be established at the time of issuance.
(5)Institutional rating of the securities, or if not rated an explanation
The Company s debt is currently rated as follows:
Security
Senior Secured Debt
Senior Unsecured Debt
Subordinated Debt
Moody
Baal
(P) Baal
S&P
BBB+
ilia
(6)Stock Exchange on which listed
The Company has generally not listed its bonds, but has in the past listed certain
unsecured debt on The New York Stock Exchange. If the Debt is issued publicly
(7)
in an overseas market, the Debt may be listed, if appropriate, on one or more
foreign exchanges.
Additional descriptive information
General: Alternatives currently available to the Company include
(1) conventional first mortgage bonds placed publicly or privately in the domestic
or foreign markets, (2) secured or unsecured medium-term notes placed publicly
or privately in the domestic or foreign markets, (3) floating-rate debt placed
publicly or privately in the domestic or foreign markets, (4) Eurodollar financings
placed publicly or privately overseas, (5) debt issued overseas denominated in, or
based upon, foreign currencies combined with a currency swap to effectively
eliminate the currency risk, and (6) subordinated debt placed publicly or privately
in the domestic or foreign markets and issued either alone or in conjunction with
an offering of preferred securities by a special-purpose entity (SPE) organized by
the Company. A brief description of these transactions is set forth below.
First Mortgage Bonds. First mortgage bonds have been the traditional
debt financing vehicle utilized by utilities in the U.S. and are typically
offered in public offerings but may be privately placed. First mortgage
bonds are secured by a mortgage on the fixed assets of the utility.
Thereafter, the bonds are typically refundable at a premium over the
principal amount, with the premium declining to zero near the final
maturity of the bonds. The Company may determine that a call provision
structure is appropriate to provide financial flexibility in changing interest
rate environments.
The Company s first mortgage bonds are issued as First Mortgage Bonds
under the PacifiCorp Mortgage. The Commission has previously
authorized the Company to incur the lien of the PacifiCorp Mortgage in
Case No. U-1046-, Order No. 22157.
II.Medium-Term Notes. Medium-term notes (MTNs) are interest-bearing
instruments with maturities generally ranging between 9 months and
100 years. MTNs are typically offered on a continuous basis by the
borrower through one or more managers which act as agents in placing the
notes, either domestically or through global programs. MTNs can be
offered on a secured or unsecured basis.
Compensation to the agents varies by the maturity of each tranche of
MTNs issued, but is not expected to exceed one percent ofthe principal
amount of notes placed.
The MTN investor universe in the u.S. consists of banks, insurance
companies, pension funds, thrifts, mutual funds, money managers
investment advisors, corporate, and nonprofit organizations. Overseas, the
investor profile primarily consists of banks, insurance companies, pension
funds and retail accounts.
MTN programs are generally structured to allow a wide range of terms.
Principal amount, currency, maturity, interest rate and redemption terms
are fixed at the time of sale. In the event the Company chooses to issue
MTN s in foreign currencies, a currency rate swap would be
simultaneously entered into to effectively hedge the Company s exposure
III.
against currency risk. If the Company issues secured MTNs, they will
most likely be issued in the form of First Mortgage Bonds under the
PacifiCorp Mortgage.
Floating-Rate Debt.Floating-rate debt is a security with interest rates that
reset periodically, such as daily, weekly, monthly, quarterly, semi-
annually or annually at the option of the Company. The most common
indices used for pricing floating-rate debt are based upon LIBOR
commercial paper and Treasury bills.
Refunding provisions for floating-rate debt vary from transaction to
transaction depending upon the structure of the agreement. Should the
Company subsequently fix the interest rate through an interest rate swap
or cap, the cost of refunding would include the cost of unwinding the swap
or cap.
Floating-rate debt could be more advantageous than fixed-rate debt. First
it can provide the Company with an occasional source of long-term
funding at attractive rates compared to the fixed-rate market. Second, it
allows the Company access to the short end of the yield curve when short-
term rates are attractive. Should rates begin to increase, the Company
could execute an interest rate swap or cap to lock in a fixed rate.
The fees associated with a floating- rate debt arrangement are not expected
to exceed one percent of the principal amount of the debt.
IV.Eurodollar Financings. Eurodollar bonds or debentures are dollar-
denominated securities issued to foreign investors. Eurodollar securities
are generally placed by a foreign underwriter, or a foreign subsidiary of a
S. investment or commercial bank (bank). Eurodollar securities are
generally unsecured obligations. However, the Company may be required
to enter into a letter of credit arrangement with one or more banks or such
other agreements or arrangements as may be necessary or appropriate
from time to time, to support its obligation to repay the principal of, the
interest on, and the premium (if any) on the debt. The Company estimates
that such an arrangement could involve a fee not expected to exceed one
percent on the principal amount of the debt. The Company would receive
dollars at the time of closing and all interest and principal payments would
be made in dollars.
A Eurodollar bond issuance is typically arranged using a bank as the
underwriter (public offering) or placement agent (private offering). The
bank's role is to locate investors outside the United States that are
interested in purchasing financial assets in dollars. The interest rate
charged on the debt is usually a spread over U.S. Treasury obligations
having a similar maturity. After the call protection has expired, the bonds
are generally callable at their principal value. The issuance fee associated
with a Eurodollar bond offering is approximately two percent of the
principal amount sold.
A potential advantage of a Eurodollar offering is that it allows the
Company to access investors generally not active in the u.S. markets, and
at the same time will not subject the Company to any currency exposure.
Another advantage is that, from time to time, very attractively priced
funds become available in the private Eurodollar market when an investor
with dollars attempts to invest in U.S. dollar assets. Thus, for short
periods, a market could be created wherein the issuer can obtain very
attractive rates relative to the public markets. These windows in the
market open and close very quickly, making it necessary that the
Company have the opportunity to commit quickly when offered an
attractive proposal.
Foreign Currency Debt Combined with a Currency Swap. The issuance of
debt denominated in a currency other than U.S. dollars, combined with a
currency swap, would allow the Company to issue debt in a foreign
currency and execute a currency swap to effectively eliminate the currency
risk. By issuing in a foreign currency, the Company would attract
investors that would not normally be investing in its securities. Issuing
securities in a foreign currency becomes attractive when the nominal
interest rate charged in the foreign country is significantly lower than the
rate in the U.S. or in dollar-denominated securities. To the extent that the
cost of executing the currency swap is less than the difference between the
nominal interest rate in the foreign country and the dollar-denominated
interest rate, issuing debt in a foreign currency and executing a currency
swap provides a lower total cost of debt.
The foreign currencies most frequently used in the past by U.S. companies
include Euro, Swiss Francs, British Sterling, Japanese Yen, Canadian
Dollars, Australian Dollars and New Zealand Dollars. The underwriters
for a foreign currency offering are responsible for locating investors
willing to purchase the Company s debt that has principal and interest
denominated in the foreign currency. The fees for a foreign currency
offering are expected to approximate two percent of the principal amount
sold.
In order to effectively eliminate the currency risk, the Company would
enter into a currency swap that would be executed simultaneously with the
foreign currency offering. In the currency swap, the Company would
receive a stream of payments in the foreign currency exactly equal in
amount and timing to the Company s obligations for the foreign currency
debt (principal and interest). In exchange, the Company would agree to
make a stream of payments in U.S. dollars to the third party. The net
effect of the transaction is that the Company s foreign currency
obligations would be exactly offset by the foreign currency receipts under
the exchange and the Company s net payments would be in U.S. dollars.
Of course, whether or not the other party to the exchange performs, the
Company remains obligated under the terms of the foreign currency debt.
The Company would propose to minimize the risk of nonperformance in
the exchange through the selection of a third party participant with a long-
term credit rating of AA equivalent or better or with a third party which is
a high quality sovereign or agency of a sovereign if the tenor of the
VI.
exchange agreement is five years or longer, or long-term credit rating of A
or better if the tenor is less than five years.
The fees associated with arranging a currency swap agreement are a
function of interest rates and currency differentials between the U.S. dollar
and the respective foreign currency.
Because a foreign offering with a currency swap involves two transactions
and multiple parties, the complexity and cost of trying to unwind such a
foreign offering prior to its final maturity effectively makes this type of
transaction generally non-callable prior to its final maturity.
Issuing debt denominated in a foreign currency combined with a currency
swap requires that the Company have a great degree of flexibility in
timing the offering in order to pick the currency, nominal interest rates
and exchange rate that will enable it to achieve a lower cost.
Cost Test: The Company will not undertake the proposed transactions in a
foreign market unless and until it can assure itself that the total cost of the
foreign borrowings proposed in this matter is no more than the total cost
of domestic borrowings for a similar term for companies of comparable
credit rating at the time of the borrowing.
Subordinated Debt. It is anticipated that any subordinated debt could be
issued in one or more series pursuant to the Company s Indenture dated as
of May 1995, as supplemented, or pursuant to a new indenture. The
Company may issue the subordinated debt (a) directly to investors, as in
the issuance and sale of its 8 3/8% Junior Subordinated Deferrable Interest
Debentures, Series A, pursuant to Case No. P AC-94-, (b) in exchange
for its outstanding securities, as in the issuance of its 8.55% Junior
Subordinated Deferrable Interest Debentures, Series B, pursuant to Case
No. PAC-95-, or (c) to an SPE in support of the preferred securities of
the SPE, as in the issuance and sale of its 8 1/4% Junior Subordinated
Deferrable Interest Debentures, Series C, pursuant to Case No. P AC-
96-, and its 7.70% Junior Subordinated Debentures Series D, pursuant
to Case No. PAC-97-
In a transaction involving preferred securities of an SPE, the Company
would organize the SPE and contribute or sell subordinated debt of the
Company to the SPE in an amount based upon the common securities of
the SPE (generally 3% ofthe aggregate liquidation preference ofthe
preferred securities issued by the SPE). The SPE would issue preferred
securities that are expected to have a liquidation preference of $25 each
have cumulative dividends payable quarterly and could be listed on the
New York Stock Exchange. In addition, the SPE would purchase
subordinated debt of the Company in an aggregate principal amount
corresponding to the liquidation preference of the preferred securities
issued by the SPEc In certain circumstances, the subordinated debt of the
Company underlying the preferred securities of the SPE could be
distributed to the holders of the preferred securities in connection with the
liquidation of the SPEc
In this instance, the Company would guarantee the SPE's payment of:
(i) any accumulated and unpaid distributions required to be paid on the
preferred securities of the SPE to the extent that the SPE has funds on
hand available therefor; (ii) the redemption price with respect to any
preferred securities called for redemption to the extent that the SPE has
funds on hand available therefor; and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation ofthe SPE (unless the Company
subordinated debt is distributed to holders of the SPE's preferred
securities), the lesser of ( a) the aggregate of the liquidation preference and
all accrued and unpaid distributions to the date of payment and (b) the
amount of assets of the SPE remaining available for distribution to holders
of the preferred securities. The guarantee is expected to be directly
enforceable by holders of the preferred securities issued by the SPE and
subordinate to all senior debt ofthe Company. It is also anticipated that
the Company and the SPE will enter into an expense reimbursement
arrangement under which the Company will agree to pay the expenses of
the SPEc
(f)A description of the method of issuance and sale or procedure by which any obligation as
guarantor will be assumed
The Company proposes to issue the Debt from time to time in either public offerings or
private placements, domestically or overseas, for cash or in exchange for its outstanding
securities. The financial markets have become increasingly global and, as such, foreign
sources of capital compete directly with domestic sources for investment opportunities.
* Same general description as in the Company s application in the 2005 Docket.
The Company anticipates that issuances will be primarily fixed-rate First Mortgage
Bonds, but it is requesting authority for a variety of borrowing options in order to provide
the financial flexibility to pursue the most attractive markets at the time of issuance and
to produce the most competitive cost for the Company.
Underwriters or placement agents will be selected after negotiations with a group of
potential candidates. The firm or firms selected to lead an offering under this authority
will be determined by the Company s opinion of their ability to assist the Company in
meeting its objective of having the lowest total cost for the Debt to be issued. This
opinion is based upon the level of underwriting or placement fees, their knowledge of the
Company and its varied operations, the Company s parent company and its affiliates, and
their ability to market the Debt to achieve the Company s fmancing and capital structure
objectives.
(g)* (1) (i)The name and address of any person receiving a fee (other than a fee for technical
services) for negotiating, issuing, or selling the securities or for securing an
underwriter, sellers, or purchasers of securities except as related to a competitive
bid
Other than for technical services, the only fees payable by the Company will be
fees and expenses to the underwriters and agents (including arrangement fees for
currency swaps). The Company may also incur an annual fee for credit support
which is not expected to exceed one percent on the principal amount of the Debt.
(ii)The fee amount:Subject to final negotiations, the fee is not expected to exceed
0 percent ofthe aggregate principal amount ofthe Debt if the Debt is issued
overseas. If issued domestically, the fee is not expected to exceed 1.0 percent of
the aggregate principal amount of the Debt. If subordinated debt is issued, the fee
* Same information as in the Company s application in the 2005 Docket.
is not expected to exceed 3.15 percent of the aggregate principal amount of the
Debt. The level of the fee is only one factor in determining the overall cost of the
Debt to be issued and, as such, is not the sole basis of the fmancing decision.
(iii)The facts showing the reason for and reasonableness ofthe fee: The Company
believes that the aforementioned compensation levels to the agents or
underwriters are not greater than the usual and customary fees prevailing
currently in the market. The Company finds these fees not unreasonable given the
services provided by the agents or underwriters. The agents and the underwriters
will be familiar with the Company and its long-term financing needs. They will
be available for consultation on these matters and will assist the Company in
evaluating market conditions and in formulating the exact terms of the
transactions. See subsection (f) supra
(2)All facts showing that the applicant is or is not "controlled" by or is or is not
under the common "control" of the person listed in (g)(1 )(i)
The Company will have no officer or director in common with any underwriter or
agent. All of the Company s issued and outstanding common stock is indirectly
owned by MidAmerican Energy Holdings Company.
(h)The purposes of the issuance
The purposes for which the Debt is proposed to be issued in this matter are (1) the
acquisition of property, (2) the construction, completion, extension or improvement of
utility facilities, (3) the improvement of service, (4) the discharge or lawful refunding of
obligations which were incurred for utility purposes or (5) the reimbursement of the
Company s treasury for funds used for the foregoing purposes.
* Same statement as in the Company s application in the 2005 Docket.
The Company keeps its accounts in a manner which enables the Commission to ascertain
the amount of money expended and the purposes for which the expenditures were made.
If the funds to be reimbursed were used for the discharge or refunding of obligations
those obligations or their precedents were originally incurred in furtherance of the utility
purposes listed above.
To the extent that the funds to be reimbursed were used for the discharge or refunding of
obligations, those obligations or their precedents were originally incurred in furtherance
of utility purposes (1), (2) and (3) supra
The results of the offerings are estimated to be:
ESTIMATED RESULTS OF THE OFFERING (1)
Less: Other Issuance Expenses
Total Percent of Total
$ 1 500 000 000 100.000%
13.125,000 875%
$ 1 486 875 000 99.125%
875 000 125%
$ 1.485.000.000 99.000%
Gross Proceeds
Less: AgentslU nderwri ters
Compensation (1)
Proceeds Payable to Company
Net Proceeds
(1) Assumes the issuance of first mortgage bonds.
Other Issuance Expenses
Regulatory agency fees
SEC fees
000
106 950
475 000
275 000
175 000
Company counsel fees
Accounting fees
Printing and engraving fees
Rating agency fees 450 000
200 000Trustee/Indenture fees
Miscellaneous expenses 191.050
1.875.000TOTAL
(i)Statement that applications for authority to fmance are required to be filed with state
governments
In addition to this Application, the Company is filing applications with the Oregon Public
Utility Commission, the Utah Public Service Commission and the Washington Utilities
and Transportation Commission (Washington applications will be made in connection
with specific issuances pursuant to Washington law). The California Public Utilities
Commission and the Wyoming Public Service Commission have exempted the Company
from their respective securities statutes.
A statement of the facts relied upon to show that the issuance is appropriate
As a public utility, the Company is expected to acquire, construct, improve, and maintain
sufficient utility facilities to serve its customers adequately and reliably at reasonable
cost. Issuances of the Debt are part of a program to finance the Company s facilities
taking into consideration prudent capital ratios, earnings coverage tests and market
uncertainties as to the relative merits of the various types of securities the Company could
sell.
Accordingly, the proposed issuances (1) are for lawful objects within the corporate
purposes of the Company, (2) are compatible with the public interest, (3) are necessary or
appropriate for or consistent with the proper performance by the Company of its service
* Same statement as in the Company s application in the 2005 Docket.
(k)
as a public utility, (4) will not impair its ability to perform that service, and (5) are
reasonably necessary or appropriate for these purposes.
A statement of the bond indenture or other limitations on interest and dividend coverage,
and the effects of these limitations on this issuance:
See Exhibit J.
(1)A summary of rate changes which occurred during or after or which will become
effective after the period described by the income statement included as Exhibit E
In December 2006, the Utah Public Service Commission approved a stipulation
settling the Company s general rate case originally filed in March 2006. The stipulation
calls for an annual increase of$115.0 million, or 9.95%, with $85.0 million ofthe
increase effective December 11 2006 and the remaining $30.0 million effective June 1
2007.
In September 2006, the Oregon Public Utility Commission (the "OPUC") approved a
stipulation settling the Company s general rate case originally filed in February 2006.
Under the stipulation, effective January 1 2007 the Company received an annual increase
for non-power cost items of$33.0 million and a $10.0 million increase for power costs
through its annual transition adjustment mechanism. After 2007, the Company s power
costs will be updated annually using the existing transition adjustment mechanism. In
July 2006, a final order was issued by the OPUC with respect to the Company s general
rate case request originally filed in November 2004. The final order modified a tax
adjustment in the general rate case, resulting in an additional annual increase in the
Company s revenue of$6.1 million effective July 2006. In April 2006, long-term special
contracts for the Company s Klamath basin irrigation customers expired. Under the
contracts, customers received power at rates less than the Company s average retail rates
charged to other customers on general irrigation tariffs. Following expiration of these
contracts, the OPUC issued an order authorizing the transition of Klamath basin irrigators
to generally applicable cost-based rates. In December 2006, the OPUC approved the
Company s request to begin amortization of the net amount of $2.31 million deferred in
the Company s motion for reconsideration ofthe tax adjustment ordered in the
Company s 2004 general rate case, and rate credits associated with the MidAmerican
Energy Holdings Company transaction. The $2.31 million increase was effective January
, 2007.
In March 2006, the Wyoming Public Service Commission approved an agreement that
settled the general rate case filed by the Company in October 2005 and a separate request
filed by the Company in December 2005 to recover increased costs of net wholesale
purchased power used to serve Wyoming customers. The agreement provided for an
annual rate increase of$15.0 million effective March 1 2006, an additional annual rate
increase of $10.0 million effective July 1 , 2006, a power cost adjustment mechanism and
an agreement by the parties to support a forecast test year in the next general rate case
application.
In December 2006, the Commission approved three applications filed by the Company
seeking to adjust the rates of certain Idaho customers for a total increase of $8.25 million.
The applications were based on settlement agreements reached after negotiations between
the Company and the respective customers and took the place of a general rate case
request originally planned to be filed in 2006. The first application was approved
effective as of September 1 , 2006 and the remaining two applications were approved
effective as of January 1 2007.
In December 2006, the California Public Utilities Commission approved a stipulation
settling the Company s general rate case originally filed in November 2005. The
stipulation called for a $7.3 million annual increase in rates and a 10.6% return on equity,
a dollar-for-dollar energy cost adjustment clause that allows for annual changes in the
level of net power costs, a post-test year adjustment mechanism that provides for
inflation-based increases to rates in 2008 and 2009 , the ability to seek recovery ofthe
California-allocable portion of major plant additions exceeding $50.0 million, and
scheduled rate increases under the terms of a transition agreement with Klamath
irrigators.
(m)Any other applicable exhibits
The following exhibits are made a part of this application:
Incorporated by
reference to:
Exhibit Case Exhibit
PAC-
02-
B**PAC-
05-
PAC-
05-
K**
L**
Description
Third Restated Articles of Incorporation effective
November 20, 1996, as amended effective
November 29, 1999
Bylaws, as amended effective May 23 , 2005
Resolutions of the Board of Directors authorizing the
proposed issuances
A statement (1) explaining the measure of control or
ownership exercised over the applicant by a utility, bank
trust company, banking association, underwriter, or
electrical equipment supplier, and (2) explaining that the
applicant is a member of any holding company system
Balance Sheet, actual and pro forma, dated
September 30, 2006
Income Statement, actual and pro forma, for the
12 months ended September 30, 2006
SEC Registration Statement on Form S-, as filed with
the SEC on September 6, 2005
Public invitation for proposal to purchase or underwrite
the proposed issuance iliot applicable
Copies of each proposal received for a negotiated
placement of the offering, a summary tabulation, a list of
prospective underwriters from whom no proposal was
received, and a justification ofthe accepted underwriting
proposal iliot applicable
Source and Uses of Treasury Funds, actual and pro
forma, dated September 30, 2006
A statement of the bond indenture or other limitations on
interest and dividend coverage, and the effects of those
limitations on this issuance
Prospectus
Underwriting Agreement or Agency Agreement
** Exhibit or supplement to the Exhibit is to be filed as soon as available.
PRA YER
Rocky Mountain Power respectfully requests that the Commission enter its order in this
matter, effective upon issuance, authorizing Rocky Mountain Power to (1) issue and sell or
exchange, in one or more public offerings or private placements, fixed or floating rate Debt in
the aggregate principal amount of not more than $1 500 000 000 or, if the Debt is issued at an
original issue discount, such greater amount as shall result in an aggregate offering price of not
more than $1 500 000 000 (or its equivalent amount in, or based upon, foreign currencies
determined at the time of issue), (2) enter into letter of credit arrangements with one or more
banks or such other agreements or arrangements as may be necessary or appropriate, from time
to time, to provide additional credit support for the payment of the principal of, the interest on
and the premium (if any) on the Debt, (3) enter into one or more currency swaps, and (4)
contribute or sell additional Debt to one or more SPEs in an amount based upon the common
securities of the SPE and Commission approval of the proposed guarantee and expense payment
agreements relating to the preferred securities of the SPE, in each case substantially as described
herein. The Company requests that such authority remain in effect until March 31 2012, so long
as the Company maintains a BBB- or higher senior secured debt rating, as indicated by Standard
& Poor s Rating Services, and a Baa3 or higher senior secured debt rating, as indicated by
Moody s Investors' Service , Inc. The Company agrees to continue to file with the Commission
on a quarterly basis debt reports including any Debt authorized by the requested order and, to the
extent not otherwise an obligation of the Company pursuant to Commitment 120 approved by
Order No. 29998 in Case No. P AC-05-, all credit rating agency reports related to the
Company issued during the quarter.
Dated at Portland, Oregon on February 5, 2007.
ACIFICORP
BY:
Bruce N. Williams
Vice President and Treasurer
VERIFICATION
Bruce N. Williams, declare, under penalty of perjury, that I am the duly appointed Vice
President and Treasurer ofPacifiCorp and am authorized to make this verification. The
application and the attached exhibits were prepared at my direction and were read by me. I know
the contents of the application and the attached exhibits, and they are true, correct, and complete
of my own knowledge except those matters stated on information or belief which I believe to be
true.
WITNESS my hand and the seal ofPacifiCorp on this 5th day of February, 2007.
Bruce N. Williams
(Seal)
DRAFT ORDER
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
ROCKY MOUNTAIN POWER for
authority to (1) issue and sell or
exchange not more than $1,500,000,000
of debt, (2) enter into credit support
arrangements, (3) enter into currency
swaps, and (4) contribute or sell
additional debt to special-purpose
entities.
CASE NO. PAC-07-
ORDER NO.
On February 6, 2007, Rocky Mountain Power (Company) filed an Application that
requested shelf authority to borrow not more than $1 500 000 000 in debt, in one or more
offerings.
Specifically, the Company seeks authority to: (1) issue and sell or exchange, in one or
more public offerings or private placements, not later than March 31 2012, fixed or floating rate
debt (Debt) in the aggregate principal amount of not more than $1 500 000 000 or, if such Debt
is issued at an original issue discount, such greater amount as shall result in an aggregate offering
price of not more than $1 500 000 000 (or its equivalent amount in, or based upon, foreign
currencies determined at the time of issue); (2) enter into letter of credit arrangements with one
or more banks or such other agreements or arrangements as may be necessary or appropriate
from time to time, to provide additional credit support for the payment of the principal of, the
interest on, and the premium (if any) on such Debt; (3) enter into one or more currency swaps;
and (4) contribute or sell additional Debt to special-purpose entities (SPEs) in an amount based
upon the common securities of the SPE and Commission approval of the proposed guarantee and
expense payment agreements relating to the preferred securities of the SPEc Such authority
would remain in effect until March 31 , 2012 so long as the Company maintains a BBB- or higher
senior secured debt rating, as indicated by Standard & Poor s Rating Services, and a Baa3 or
higher senior secured debt rating, as indicated by Moody s Investors' Service, Inc.After
reviewing the Application, the Commission grants the Company s request.
STAFF RECOMMENDATION
(To be inserted.
FINDINGS OF FACT
The Company was incorporated under Oregon law in August 1987 for the purpose of
facilitating consummation of a merger with Utah Power & Light Company, a Utah corporation
and changing the state of incorporation of PacifiCorp from Maine to Oregon. The Company The
Company currently serves customers as Rocky Mountain Power in Idaho, Utah and Wyoming
and as Pacific Power in California Oregon and Washington.
The Company proposes to issue or exchange the Debt in either public offerings or private
placements, domestically or overseas from time to time not later than March 31 , 2012, so long as
the Company maintains a BBB- or higher senior secured debt rating, as indicated by Standard &
Poor s Rating Services, and a Baa3 or higher senior secured debt rating, as indicated by Moody
Investors' Service , Inc. The Company finds that the variety of borrowing options available to it
dictate that it have the ability to select the debt instrument, market and maturity that allows it to
borrow at a lower all-in cost, consistent with its financial goals. The type of issue and its terms
including interest rate will be determined at the date of issue and the Company will notify the
Commission Staff of the terms as soon as practical before the issue. The type of issue will be
based on the all-in costs and benefits of the alternatives. The Company committed in Case
No. P AC-99-3 to a cost test where foreign transactions will not be utilized for ratemaking
unless and until it can assure the all-in costs of the foreign borrowing is no more than the all-
cost of similar domestic borrowings.
If the Debt bears a fixed rate, the interest rate will be set at the time of issuance. If the
Debt bears a floating rate, the interest rate will be set periodically based upon a published or
quoted index. The Debt may be publicly or privately placed in the domestic or foreign markets.
Selection of the method of issuance and the location will depend on the relative all-in cost and
other benefits of the alternatives being considered.
The types of offerings contemplated by the Company in its application include:
Conventional first mortgage bonds placed publicly or privately in the
domestic or foreign markets;
Secured or unsecured medium-term notes placed publicly or privately in
the domestic or foreign markets;
Floating rate debt placed publicly or privately in the domestic or foreign
markets;
Eurodollar financings placed publicly or privately overseas;
Debt issued overseas denominated in, or based upon, foreign currencies
combined with a currency swap to effectively eliminate the currency risk;
and
Subordinated debt placed publicly or privately in the domestic or foreign
markets and issued either alone or in conjunction with an offering of
preferred securities by an SPE organized by the Company.
The Application recognizes that a foreign currency offering involves a degree of risk to a
S. issuer because changes in the relationship between the value of the U.S. dollar and foreign
currency may increase the ultimate cost of the debt. Currency swaps allow a party to make a
series of payments in U.S. dollars in exchange for a series of payments in, or based upon, foreign
currencies. Combining a foreign currency offering with a currency swap effectively eliminates
the currency risk by providing the Issuer a stream of foreign currency payments equal to
obligations on the foreign debt.
The Company expects to issue or exchange the Debt in either public offerings or private
placements from time to time not later than March 31 , 2012, so long as the Company maintains a
BBB- or higher senior secured debt rating, as indicated by Standard & Poor s Rating Services
and a Baa3 or higher senior secured debt rating, as indicated by Moody s Investors' Service , Inc.
The Debt may have various maturities, although medium-term notes generally have maturities
longer than nine months.
The net proceeds of the issuances will be used for one or more of the utility purposes
authorized by Idaho Code ~ 61-901. To the extent that any funds to be reimbursed were used for
the discharge or refunding of obligations, those obligations or their precedents were originally
incurred in furtherance of a utility purpose.
Issuances of the Debt proposed are part of an overall plan to finance the cost of the
Company s facilities taking into consideration prudent capital ratios, earnings coverage tests and
market uncertainties as to the relative merits of the various types of securities the Company
could sell.
The Company has paid the fees required by Idaho Code ~ 61-905.
CONCLUSIONS OF LAW
PacifiCorp doing business as Rocky Mountain Power is an electrical corporation within
the definition of Idaho Code ~ 61-119 and is a public utility within the definition of Idaho
Code ~ 61-129.
The Idaho Public Utilities Commission has jurisdiction over this matter pursuant to the
provisions of Idaho Code ~ 61-901 et seq.and the Application reasonably conforms to
Rules 141 through 150 ofthe Commission s Rules of Procedure, IDAPA 31.01.01.141-150.
The method of issuance is proper.
The general purposes to which the proceeds will be put are lawful purposes under the
Public Utilities Law of the State of Idaho and are compatible with the public interest. However
this general approval of the general purposes to which the proceeds will be put is neither a
finding of fact nor a conclusion of law that any particular construction program of the Company
which may be benefited by the approval of this Application has been considered or approved by
this Order, and this Order shall not be construed to that effect.
The issuance of an Order authorizing the proposed financing does not constitute agency
determination/approval of the type of financing or the related costs for ratemaking purposes
which determination the Commission expressly reserves until the appropriate proceeding.
The Application should be approved.
ORDER
IT IS THEREFORE ORDERED that the Company Application for authority
to: (1) issue and sell or exchange, in one or more public offerings or private placements, not
later than March 31 , 2012, fixed or floating rate Debt in the aggregate principal amount of not
more than $1 500 000 000 or, if the Debt is issued at an original issue discount, such greater
amount as shall result in an aggregate offering price of not more than $1 500 000 000 (or its
equivalent amount in, or based upon, foreign currencies determined at the time of issue);
(2) enter into letter of credit arrangements with one or more banks or such other agreements or
arrangements as may be necessary or appropriate, from time to time, to provide additional credit
support for the payment of the principal of, the interest on, and the premium (if any) on the Debt;
and (3) enter into one or more currency swaps, is granted. Such authority would remain in effect
until March 31 , 2012, so long as the Company maintains a BBB- or higher senior secured debt
rating, as indicated by Standard & Poor s Rating Services, and a Baa3 or higher senior secured
debt rating, as indicated by Moody s Investors ' Service , Inc.
IT IS FURTHER ORDERED that if the Company s senior secured debt ratings fall
below the investment grade levels referenced in the above ordering paragraph (the
Downgrade ), the Company s authority to incur Debt as provided in this Order will not
terminate, but instead such authority will continue for a period of 364 days from the date of the
Downgrade (the "Continued Authorization Period") provided that the Company:
(1) Promptly notifies the Commission in writing of the Downgrade; and
(2) Files a supplemental application within seven (7) days after the Downgrade
requesting a supplemental order ("Supplemental Order ) authorizing the Company to
continue to incur Debt as provided in this Order, notwithstanding the Downgrade.
Until Rocky Mountain Power receives the Supplemental Order, any Debt incurred or
issued by the Company during the Continued Authorization Period will become due
or mature no later than the final date of the Continued Authorization Period.
IT IS FURTHER ORDERED that the Company shall file with the Commission an
application seeking approval of any proposed contribution or sale by the Company of additional
Debt to special-purpose entities (SPEs) before such an agreement may be deemed effective.
IT IS FURTHER ORDERED that the Company shall file with the Commission on a
quarterly basis debt reports including any Debt authorized by this Order and, to the extent not
otherwise an obligation of the Company pursuant to Commitment I 20 approved by Order
No. 29998 in Case No. PAC-05-, all credit rating agency reports related to the Company
issued during the quarter.
IT IS FURTHER ORDERED that the Company shall file the following as they become
available:
The "Report of Securities Issued" required by 18 C,R. ~ 34.10.
Verified copies of any agreement entered into in connection with the
issuance of Debt pursuant to this order.
A verified statement setting forth in reasonable detail the disposition of the
proceeds of each offering made pursuant to this order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the regulatory
authority of this Commission with respect to rates, service, accounts, valuation, estimates, or
determination of costs, or any other matter that may come before this Commission pursuant to
this jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that nothing in this Order and no provision of Chapter 9
Title 61 Idaho Code or any act or deed done or performed in connection with this Order shall be
construed to obligate the State of Idaho to payor guarantee in any manner whatsoever any
security authorized, issued, assumed, or guaranteed under the provisions of Chapter 9, Title 61
Idaho Code.
IT IS FURTHER ORDERED that the Company notify the Commission as soon as
possible prior to the issuance with as much information as possible on the issue. The notice may
be by telephone or facsimile to be followed with letter of verification if notice is less than seven
days.
IT IS FURTHER ORDERED that issuance of this Order does not constitute acceptance
of the Company s exhibits or other material accompanying the Application for any purpose other
than the issuance of this Order.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) may petition for reconsideration within twenty-one (21) days of the
service date of this Order with regard to any matter decided in this Order. Within seven (7) days
after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this
day of , 2007.
PAUL KJELLANDER, President
DENNIS S. HANSEN, Commissioner
MARSHA H. SMITH, Commissioner
ATTEST:
JEAN JEWELL
Commission Secretary
EXHIBIT A-
BYLA WS
ACIFICORP
As Amended Effective May 23, 2005
DYLA WS
ACIFICORP
As Amended Effective May 23, 2005
ARTICLE I
OFFICES
The principal office of the Company in the State of Oregon shall be in the City of Portland, County
of Multnomah. The Company may have such other offices, either within or without the State of Oregon, as
the Board of Directors may designate or as the business of the Company may, from time to time, require.
ARTICLE
SHAREHOLDERS
Annual Meeting. The annual meeting of the shareholders shall be held on the second
Wednesday in the month of May in each year, unless a different date is fixed by the Board of Directors, at
such time and place as are fixed by the Board of Directors and stated in the notice of the meeting. The
failure to hold an annual meeting at the time stated herein shall not affect the validity of any corporate
action.
2.2 Special Meetings. Special meetings of the shareholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the Chairman of the Board, the President or the Board of
Directors and shall be called by the Chairman of the Board or the President upon the written demand
describing the purpose or purposes for which the meeting is to be held, signed, dated and delivered to the
Company s Secretary, of the holders of not less than one-tenth of all the outstanding votes of the Company
entitled to be cast on any issue proposed to be considered at the meeting.
Place of Meetings. Meetings of the shareholders shall be held at such place, within or without
the State of Oregon, as may be designated by the Board of Directors.
2.4 Notice of Meetings. Written or printed notice stating the date, time and place of the meeting
and, in the case of a special meeting or where otherwise required by law, the purpose or purposes for which
the meeting is called shall be mailed by the Secretary to each shareholder entitled to vote at the meeting,
and if required by law, to such additional shareholders as are entitled to receive notice, at the shareholder
address shown in the Company s stock transfer books, with postage thereon prepaid, not less than 10 nor
more than 60 days before the date of the meeting.
Fixing of Record Date. For the purpose of determining shareholders entitled to notice of a
shareholders' meeting, to demand a special meeting, to vote or to take any other action , or shareholders
entitled to receive payment of any dividend, or in order to make a determination of shareholders for any
other proper purpose, the Board of Directors of the Company may fix a future date as the record date for
any such determination of shareholders, such date in any case to be not more than 70 days nor, in the case
of a meeting, less than 10 days before the meeting or action requiring a determination of shareholders. The
record date for any meeting, vote or other action of the shareholders shall be the same for all voting groups.
Shareholders' List for Meeting After a record date for a meeting has been fixed, the
Company shall prepare an alphabetical list of the names of all its shareholders entitled to notice of the
shareholders' meeting. The list shall be arranged by voting group and within each voting group by class or
series of shares and show the address of and number of shares held by each shareholder. The shareholders
list shall be available for inspection by any shareholder, upon proper demand as may be required by law
beginning two business days after notice of the meeting is given for which the list was prepared and
continuing through the meeting, at the Company s principal office or at a place identified in the meeting
notice in the city where the meeting will be held. The Company shall make the shareholders' list available
at the meeting and any shareholder or the shareholder s agent or attorney shall be entitled to inspect the list
at any time during the meeting or any adjournment. Refusal or failure to prepare or make available the
shareholders' list does not affect the validity of action taken at the meeting.
Ouorum~ Adiournment.
(a) Shares entitled to vote as a separate voting group may take action on a matter at a
meeting only if a quorum of those shares exists with respect to that matter. A majority of the votes entitled
to be cast on the matter by the voting group constitutes a quorum of that voting group for action in that
matter.
(b) A majority of votes represented at the meeting, whether or not a quorum, may adjourn
the meeting from time to time to a different time and place without further notice to any shareholder of any
adjournment, except as may be required by law. At such adjourned meeting at which a quorum is present
any business may be transacted that might have been transacted at the meeting originally held.
(c) Once a share is represented for any purpose at a meeting, it shall be deemed present for
quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new
record date is set for the adjourned meeting. A new record date shall be set if the meeting is adjourned to a
date more than 120 days after the date fixed for the original meeting.
V oting ReQuirements~ Action Without Meeting
(a) If a quorum exists, action on a matter, other than the election of directors, is approved if
the votes cast by the shares entitled to vote favoring the action exceed the votes cast opposing the action
unless a greater number of affirmative votes is required by law or the Company s Restated Articles of
Incorporation. If any share of capital stock of the Company is entitled to more or less than one vote on any
matter, every reference in these Bylaws to a majority or other proportion of shares shall refer to such a
majority or other proportion of votes entitled to be cast.
(b) Action required or permitted by law to be taken at a shareholders' meeting may be taken
without a meeting if the action is taken by all the shareholders entitled to vote on the action. The action
must be evidenced by one or more written consents describing the action taken, signed by all the
shareholders entitled to vote on the action and delivered to the Secretary for inclusion in the minutes or
filing With the Company s records. Such action shall not be effective unless, at least 10 days before the
action is taken, any non-voting shareholder entitled to notice of the proposed action is given written notice
of the proposed action as required by law. Action taken under this section is effective when the last
shareholder signs the consent, unless the consent specifies an earlier or later effective date.
Proxies. A shareholder may vote shares in person or by proxy by signing an appointment. A
shareholder may appoint a proxy by signing an appointment form either personally or by the shareholder
attorney-in-fact. An appointment of a proxy shall be effective when received by the Secretary or other
officer of the corporation authorized to tabulate votes.
2.10 Notice of Business. At any meeting ofthe shareholders, only such business shall be conducted
as shall have been brought before the meeting (a) by or at the direction of the Board of Directors or (b) by
any shareholder of the Company who is a beneficial or record holder at the time of giving of the notice
provided for in this Section 2., who shall be entitled to vote at such meeting and who complies with the
notice procedures set forth in this Section 2.10. For business to be properly brought before a shareholder
meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary.
To be timely, a shareholder s notice must be delivered to or mailed and received at the principal executive
offices of the Company as follows: (a) for annual meetings, not less than 45 days nor more than 75 days
prior to the date in the current year corresponding to the day and month of mailing of the Company s proxy
statement for the prior year s annual meeting, and (b) for other meetings, not less than 90 days nor more
than 120 days prior to the date of the meeting; provided, however, that in the event that less than 100 days
notice or prior public disclosure of the date of such other meeting is given or made, notice by the
shareholder to be timely must be received no later than the close of business on the 10th day following the
day on which such notice of the date of such other meeting was mailed or such public disclosure was made.
A shareholder s notice to the Secretary shall set forth as to each matter the shareholder proposes to bring
before the meeting (a) a brief description of the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (b) the name and address of the shareholder proposing
such business, (c) the class and number of shares of the Company which are beneficially owned by the
shareholder and (d) any material interest of the shareholder in such business. If the shareholder is not a
shareholder of record at the time of giving the notice, the notice shall be accompanied by appropriate
documentation of the shareholder s claim of beneficial ownership. Notwithstanding anything in these
Bylaws to the contrary, no business shall be conducted at a shareholder meeting except in accordance with
the procedures set forth in this Section 2.10. The officer presiding at the meeting shall, if in the officer
opinion the facts warrant, determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of these Bylaws, and if such officer should so
determine, such officer shall so declare to the meeting and any such business not properly brought before
the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 2., a
shareholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder with respect to the matters set forth in this Section 2.10.
11 Nomination of Directors. Only persons who are nominated in accordance with the procedures
set forth in these Bylaws shall be eligible to serve as directors. Nominations of persons for election to the
Board of Directors of the Company may be made at a meeting of shareholders ( a) by or at the direction of
the Board of Directors or (b) by any shareholder of the Company who is a beneficial or record holder at the
time of giving of notice provided for in this Section 2., who shall be entitled to vote for the election of
directors at the meeting and who complies with the notice procedures set forth in this Section 2.11. Such
nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant
to timely notice in writing to the Secretary. To be timely, a shareholder s notice shall be delivered to or
mailed and received at the principal executive offices of the Company not less than 60 days nor more than
90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior
public disclosure of the date of the meeting is given or made, notice by the shareholder to be timely must be
received no later than the close of business on the 10th day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made. Such shareholder s notice shall set
forth (a) as to each person whom the shareholder proposes to nominate for election or reelection as
director all information relating to such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (including such person s written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); and (b) as to the shareholder giving the
notice (i) the name and address of such shareholder and (ii) the class and number of shares of the Company
which are beneficially owned by such shareholder. If the shareholder is not a shareholder of record at the
time of giving the notice, the notice shall be accompanied by appropriate documentation of the
shareholder s claim of beneficial ownership. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall furnish to the Secretary that information
required to be set forth in a shareholder s notice of nomination which pertains to the nominee. No person
shall be eligible to serve as a director of the Company unless nominated in accordance with the procedures
set forth in this Section 2.11. The officer presiding at the meeting shall, if in the officer s opinion the facts
warrant, determine and declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by the Bylaws, and if such officer should so determine, such officer shall so declare
to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions
of this Section 2., a shareholder shall also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set
forth in this Section 2.11.
12 Conduct of Meeting. The officer presiding at any meeting of the shareholders shall have
authority to determine the agenda and order of business at the meeting and to adopt such rules and
regulations as may be necessary or desirable to promote the fair and efficient conduct of the business of the
meeting.
ARTICLE III
BOARD OF DIRECTORS
Duties of Board of Directors~ Election. All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the Company shall be managed under the direction of, its
Board of Directors, which shall be divided into three classes, as nearly equal in number as possible, with
one class being elected each year. Members of a class shall be elected by the shareholders, by a plurality of
the votes cast at the meeting.
3.2 Number, Election and Qualification.The exact number of directors may, within the limits of
not less than nine (9) nor more than twenty-one (21) set forth in Article VI of the Company s Restated
Articles of Incorporation, be fixed and increased or decreased from time to time by resolution of the Board
of Directors. Directors shall hold office for a term of three years, and until their successors are elected and
qualified or the number of directors is decreased; provided, however, that the term of office of any director
shall not extend beyond the regular quarterly meeting of the Board of Directors following the date the
director reaches age 70; and, provided further, that the term of any director who is also an employee of the
Company shall expire at the date of the employee s retirement as an employee. No reduction in the number
of directors shall shorten the term of any incumbent director.
Regular Meetings. The Board of Directors may provide the time and place, either within or
without the State of Oregon, for the holding of regular meetings of the Board of Directors without other
notice.
3.4 Special Meetings. Special meetings of the Board of Directors may be called by or at the
request of the Chairman of the Board, the President or any two directors. The person or persons authorized
to call special meetings of the Board of Directors may fix any place, either within or without the State of
Oregon, as the place for holding any special meeting of the Board of Directors called by them.
Notice. Notice of the date, time and place of any special meeting of the Board of Directors
shall be given at least 48 hours prior to the meeting by notice communicated in person, by telephone
telegraph, teletype or other form of wire or wireless communication, or by mail or private carrier. If
mailed, notice shall be deemed effective when deposited in the United States mail addressed to the director
at the director s business address, with postage thereon prepaid. Notice by all other means shall be deemed
effective when received by or on behalf of the director. Except as otherwise provided by law or in the
Company s Restated Articles of Incorporation, neither the business to be transacted at, nor the purpose of
any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice
of such meeting.
Quorum. One third of the total number of directors fixed in accordance with Section 3.2 of
these Bylaws shall constitute a quorum for the transaction of business at any meeting of the Board of
Directors. Ifless than a quorum is present at a meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.
Manner of Acting. The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors, unless a different number is provided by law
the Restated Articles of Incorporation or these Bylaws.
Vacancies. Any vacancy, including a vacancy resulting from an increase in the number of
directors, occurring on the Board of Directors may be filled by the shareholders, the Board of Directors or
the affirmative vote of a majority of the remaining directors if less than a quorum of the Board of Directors
or by a sole remaining director. Any directorship not filled by the directors shall be filled by election at an
annual meeting or at a special meeting of shareholders called for that purpose; if the vacant office was held
by a director elected by a voting group of shareholders, then only the holders of shares of that voting group
are entitled to vote to fill the vacancy. A director elected to fill a vacancy shall be elected to serve until the
next meeting of shareholders at which directors are elected and shall continue to serve until a successor
shall be elected and qualified or there is a decrease in the number of directors. A vacancy that will occur at
a specific later date, by reason of a resignation or otherwise, may be filled before the vacancy occurs, but
the new director may not take office until the vacancy occurs.
Compensation. By resolution of the Board of Directors, the directors may be paid a reasonable
compensation for their services as directors, and their expenses, if any, of attendance at each meeting ofthe
Board of Directors; provided, that no director who is also a full-time officer or employee of the Company
shall receive additional compensation as a director. No such payment shall preclude any director from
serving the Company in any other capacity and receiving compensation therefor.
10 Presumption of Assent.A director of the Company who is present at a meeting of the Board
of Directors or a committee of the Board of Directors shall be deemed to have assented to the action taken
unless (a) the director s dissent or abstention from the action is entered in the minutes of the meeting, (b)
the director delivers a written notice of dissent or abstention to the action to the presiding officer of the
meeting before the adjournment thereof or to the Company immediately after the adjournment of the
meeting or (c) the director objects at the beginning of the meeting or promptly upon the director s arrival to
the holding of the meeting or transacting business at the meeting. The right to dissent or abstain shall not
apply to a director who voted in favor of the action.
11 Executive Committee. The Board of Directors, as soon as may be after its election in each
year, shall by resolution adopted by a majority of all the Directors in office when the action is taken
designate from among its members an Executive Committee to consist of the officer designated as Chief
Executive Officer and two or more other directors. Such Committee shall have and may exercise all of the
powers of the Board during the intervals between its meetings which may be lawfully delegated, subject to
such limitations as may be provided by resolution of the Board. The Board shall have the power at any
time to change the membership of such Committee and to fill vacancies in it. The Executive Committee
may make rules for the conduct of its business and may appoint such committees and assistants as it may
deem necessary. A majority of the members of such Committee shall be a quorum. The Executive
Committee shall elect one of its members as chairman.
12 Other Committees. The Board of Directors, by resolution adopted by a majority of all the
Directors in office when the action is taken, from time to time may establish, fix the membership, defme
the duties and appoint the members of each of such other committees of the Board of Directors as it shall
determine. One-third of the members of each such other committee, but in no case fewer than two
directors, shall be a quorum of the committee.
ARTICLE ill - A
SPECIAL NUCLEAR COMMITTEE
3A.1 Establishment of Committee~ Membership. The Board of Directors shall establish a Special
Nuclear Committee. The members of the Special Nuclear Committee shall be elected by the Board of
Directors from their number. The membership of the Special Nuclear Committee shall consist of three
directors, or such larger number as the Board of Directors, from time to time, shall determine. No director
may serve on the Special Nuclear Committee unless such director is a citizen of the United States of
America, A majority of the members of the Special Nuclear Committee shall at all times be made up of
directors ("Independent Directors ) who are not current or former employees of the Company or of any
other affiliated entity (a) that owns, directly or indirectly through one or more subsidiaries, a majority of the
outstanding capital stock of the Company, (b) a majority of the outstanding equity securities of which is
owned, directly or indirectly through one or more subsidiaries, by the Company, or (c) a majority of the
outstanding equity securities of which is owned, directly or indirectly through one or more subsidiaries, by
any entity referred to in clause (a) ofthis paragraph 3A.1.
3A.2 Term~ Removal.Each member of the Special Nuclear Committee shall serve for a term
commencing on the date of election to the Special Nuclear Committee and ending when such member
term as a director expires. During any director s term as a member of the Special Nuclear Committee, such
member shall not be removed except for willful and continued failure by such member to substantially
perform his or her duties to the Company in accordance with these bylaws, or such member s conviction of
fraud, embezzlement, theft or other criminal conduct involving a felony.
3A.3 Regular Meetings. Regular meetings of the Special Nuclear Committee may be held at such
places and at such times as the members of the Special Nuclear Committee may by vote from time to time
determine, and if so determined, no notice thereof need be given.
3A.4 Special Meetings. Special meetings of the Special Nuclear Committee may be held at any
time and at any place when called by two or more members of the Special Nuclear Committee, reasonable
notice thereof being given to each member of the Special Nuclear Committee, or at any time without call or
formal notice, provided all the members of the Special Nuclear Committee are present or waive notice
thereof by a writing which is filed with the records of the meeting. In any case it shall be deemed sufficient
notice to a member of the Special Nuclear Committee to send notice by mail or telegram at least forty-eight
hours before the meeting addressed to such member at his or her usual or last known business or residence
address.
3A.5 Quorum. A majority of the members of the Special Nuclear Committee shall constitute a
quorum for the transaction of business, but a lesser number may adjourn any meeting from time to time
and the meeting may be held as adjourned without further notice. Except as otherwise provided, when a
quorum is present at any meeting, a majority of the members in attendance there at shall decide any
question brought before such meeting.
3A.6 Vacancies. If the office of any member of the Special Nuclear Committee, one or more
elected by the Board of Directors pursuant to 3A.l of this Article ill-, becomes vacant by reason of death
resignation, removal, disqualification or otherwise, the Board of Directors shall choose a successor or
successors from among the members of the Board of Directors who are citizens of the United States of
America, who shall hold office for the unexpired term. Such successors shall be chosen in such a manner
to ensure that, after giving effect to their selection, a majority of the members of the Special Nuclear
Committee are Independent Directors, as such term is defmed in 3A.l of this Article ill-
3A.7 Nuclear Authority Delegated to Special Nuclear Committee. Except as otherwise provided in
3A.8 of this Article ill-, the Special Nuclear Committee shall have sole discretion and decision-making
authority on behalf of the Company as to all matters involving any interests that the Company may hold
now or in the future, in any nuclear power facility, whether such ownership interest is direct or indirect.
Without limiting the generality of the foregoing, the Special Nuclear Committee shall, except as otherwise
provided in 3A.8 of this Article ill-, have sole decision-making authority with respect to all matters
relating to the operation, maintenance, contribution of capital, decommissioning, and fuel cycle matters
with respect to all such nuclear power facilities. The Special Nuclear Committee shall report to the Board
of Directors on a quarterly basis with respect to its activities, but such reports shall be for informational
purposes only, and any powers that the Board of Directors generally might otherwise have with respect to
any such matters are, except as otherwise provided in this Article ill-, permanently and irrevocably
delegated to the Special Nuclear Committee.
3A.8 Certain Decisions Reserved to Board of Directors. Notwithstanding 3A.7 of this Article ill-
after consultation with the Special Nuclear Committee, the Board of Directors shall have, with respect to
any nuclear power facility in which the Company has a direct or indirect interest, the following rights:
(a) The right to determine to sell, lease or otherwise dispose of the Company s interest in
any such facility;
(b)The right to authorize and determine the budget related to the facility; and
(c) The right to take any action with respect to any such nuclear facility that is ordered by
the Special Nuclear Committee or any other governmental agency or court of competent jurisdiction.
3A.9 Access to Restricted Information. To the extent that the Company, by virtue of its ownership
of any direct or indirect interest in any nuclear power facility, obtains any so-called "Restricted Data" as to
which access is restricted pursuant to the provisions of the Atomic Energy Act of 1954, as amended, or any
rules, regulations or orders of the Nuclear Regulatory Commission, access to any such information shall be
limited solely to the members of the Special Nuclear Committee, and the members of the Special Nuclear
Committee shall not, without the permission of the Nuclear Regulatory Commission, reveal any such
information to any foreign citizen or other person with whom it shall be unlawful to share any such
information.
3A.1O Report of Foreign Influence~ Whistle Blower Protections. In the event that any member of the
Special Nuclear Committee believes that any action by a foreign citizen is designed to influence such
member s behavior with respect to any nuclear power facility to the detriment of the national interest of the
United States of America, such member is authorized and directed to report such behavior to the Nuclear
Regulatory Commission. The Company hereby extends to each member of the Special Nuclear Committee
the full protection afforded by the so-called "whistle blower" regulations of the Nuclear Regulatory
Commission as codified at 10 c.F.R. ~50., and agrees that the phrase "protected activity" used therein
shall include, with respect to each member of the Special Nuclear Committee, any action or decision made
by any such member pursuant to this Article III-A of these bylaws, including any votes cast by any such
member.
3A.11 Amendments to Bylaw Provisions Relating to Special Nuclear Committee. Notwithstanding
Article IX of these bylaws, the provisions of this Article III-A shall not, without the prior consent of the
Nuclear Regulatory Commission, be amended or repealed unless and until (a) the provisions of the Atomic
Energy Act of 1954, as amended, or the applicable regulations thereunder, are amended such as to remove
the current provisions thereof restricting foreign ownership of nuclear power facilities, or (b) the Company
shall, with the consent of the Nuclear Regulatory Commission, have disposed of all of its interests in any
nuclear power facilities. In the event that either such condition shall have been met, the Company shall
prior to amending or repealing the provisions of this Article III-, notify the Nuclear Regulatory
Commission of its intent to effect such amendment or repeal.
ARTICLE IV
OFFICERS
Number. The officers of the Company shall be a Chairman of the Board (who shall be a
Director of the Company), a President, one or more Vice Presidents (who may be distinguished from one
another by such designations as the Board of Directors may specify), a Secretary, a Treasurer, and if the
Board of Directors shall deem such an officer desirable, a Controller. Each of the aforesaid officers shall
be appointed by the Board of Directors. The Board of Directors shall designate one of the officers of the
Company (who shall also be a Director of the Company) as Chief Executive Officer. Other officers and
assistant officers may be appointed as determined by the Board of Directors. Any two or more offices may
be held by the same person.
4.2 Appointment and Term of Office. With the exception of the initial appointment of any new
officer or assistant officer, or the initial election of an officer to another or different office, which may be at
any meeting of the Board of Directors, the officers of the Company shall be appointed annually at the first
meeting of the Board of Directors held after each annual meeting of the shareholders. If the appointment of
officers shall not be held at such meeting, such appointment shall be held as soon thereafter as conveniently
may be. Each officer shall hold office until a successor shall have been duly appointed and shall have
qualified or until such officer s death, resignation, or removal from office in the manner hereinafter
provided.
Removal.Any officer or agent appointed by the Board of Directors may be removed by the
Board of Directors with or without cause, but such removal shall be without prejudice to the contract rights
if any, of the person so removed. The appointment of an officer does not itself create contract rights.
4.4 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or
otherwise, may be filled by the Board of Directors for the unexpired portion of the term.
Chairman of the Board. The Chairman of the Board of Directors shall preside at all meetings
of the Board of Directors and shall perform other duties assigned by the Board of Directors.
Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of
the Company and, subject to the control of the Board of Directors, shall in general supervise and control all
ofthe business and affairs of the Company.
President.The President shall perform all duties incident to the office of President and such
other duties as from time to time may be assigned by the Chief Executive Officer or the Board of Directors.
Vice Presidents. Each of the Vice Presidents shall perform such duties as from time to time
may be assigned by the Chief Executive Officer or the Board of Directors.
Treasurer.The Treasurer shall perform the duties usually pertaining to such office and such
other duties as from time to time may be assigned by the Chief Executive Officer or the Board of Directors.
The Treasurer shall give a bond for faithful discharge of the Treasurer s duties in such sum and with such
surety or sureties as the Board of Directors shall determine.
4.10 Secretary. The Secretary shall have the responsibility for preparing minutes of all meetings of
the directors and shareholders and for authenticating records of the Company. The Secretary shall in
addition perform other duties assigned by the Chief Executive Officer or the Board of Directors.
11 Other Officers. Other officers and assistant officers shall perform such duties as from time to
time may be assigned to each ofthem by the Chief Executive Officer or the Board of Directors.
4.12 Salaries. The salaries of the officers shall be fixed from time to time by the Board of
Directors, and no officer shall be prevented from receiving such salary because the officer is also a director
of the Company.
ARTICLE V
INDEMNIFICATION
The Company shall indemnify to the fullest extent not prohibited by law any person who is made, or
threatened to be made, a party to an action, suit or proceeding, whether civil, criminal, administrative
investigative, or otherwise (including an action, suit or proceeding by or in the right of the Company) by
reason of the fact that the person is or was a director, officer, employee or agent of the Company or a
fiduciary within the meaning of the Employee Retirement Income Security Act of 1974 with respect to any
employee benefit plan of the Company, or serves or served at the request of the Company as a director
officer, employee or agent, or as a fiduciary of an employee benefit plan, of another corporation
partnership, joint venture, trust or other enterprise. The Company shall pay for or reimburse the reasonable
expenses incurred by any such person in any such proceeding in advance of the fmal disposition of the
proceeding to the fullest extent not prohibited by law. This Article shall not be deemed exclusive of any
other provisions for indemnification or advancement of expenses of directors, officers, employees, agents
and fiduciaries that may be included in any statute, bylaw, agreement, general or specific action of the
Board of Directors, vote of shareholders or otherwise.
ARTICLE VI
ISSUANCE OF SHARES
6.1 Certificates for Shares.
(a) Certificates representing shares of the Company shall be in form determined by the
Board of Directors. Such certificates shall be signed by the Chairman of the Board, the President or a Vice
President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and may
be sealed with the seal of the Company or a facsimile thereof. All certificates for shares shall be
consecutively numbered or otherwise identified. The signatures of officers upon a certificate may be
facsimiles.
(b) Every certificate for shares of stock that are subject to any restriction on transfer
pursuant to the Restated Articles of Incorporation, the Bylaws, applicable securities laws, agreements
among or between shareholders or any agreement to which the Company is a party shall have
conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement
of the existence of such restriction and that the Company retains a copy of the restriction. Every certificate
issued when the Company is authorized to issue more than one class or series of stock shall set forth on its
face or back either the full text of the designations, relative rights, preferences and limitations of the shares
of each class and series authorized to be issued and the authority of the Board of Directors to determine
variations for future series or a statement of the existence of such designations, relative rights, preferences
and limitations and a statement that the Company will furnish a copy thereof to the holder of such
certificate upon written request and without charge.
(c)All certificates surrendered to the Company for transfer shall be canceled, and no new
certificate shall be issued until the former certificate for a like number of shares shall have been
surrendered and canceled, except that in case of a lost, destroyed or mutilated certificate a new one may be
issued therefor upon such terms and indemnity to the Company as the Board of Directors prescribes.
6.2 Transfer of Shares Transfer of shares of the Company shall be made only on the stock
transfer books of the Company by the holder of record thereof or by the holder s legal representative, who
shall furnish proper evidence of authority to transfer, or by the holder s attorney thereunto authorized by
power of attorney duly executed.
Transfer Agent and Registrar. The Board of Directors may from time to time appoint one or
more transfer agents and one or more registrars for the shares ofthe Company, with such powers and duties
as the Board of Directors determines by resolution.
6.4 Officer Ceasing to Act. If the person who signed a share certificate, either manually or in
facsimile, no longer holds office when the certificate is issued, the certificate is nevertheless valid.
ARTICLE vn
CONTRACTS, LOANS, CHECKS AND OTHER INSTRUMENTS
Contracts. The Board of Directors may authorize any officer or officers, or agent or agents to
enter into any contract or execute and deliver any instrument in the name of and on behalf of the Company,
and such authority may be general or confmed to specific instances.
7.2 Loans. No loans shall be contracted on behalf of the Company and no evidence of
indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such
authority may be general or confmed to specific instances.
Checks, Drafts, etc. All checks, drafts or other orders for the payment of money and notes or
other evidences of indebtedness issued in the name of the Company shall be signed by such officer or
officers, or agent or agents of the Company and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
7.4 Deposits.All funds of the Company not otherwise employed shall be deposited from time to
time to the credit of the Company in such banks, trust companies or other depositaries as the Board of
Directors or officers of the Company designated by the Board of Directors may select; or be invested as
authorized by the Board of Directors.
ARTICLE vrn
MISCELLANEOUS PROVISIONS
Seal.The corporate seal of the Company shall be circular in form and shall bear an inscription
containing the name of the Company, the year 1910 and the state of incorporation.
8.2 Severability. Any determination that any provision of these Bylaws is for any reason
inapplicable, invalid, illegal or otherwise ineffective shall not affect or invalidate any other provision of
these Bylaws.
Waiver of Notice.
(a) A shareholder may at any time waive any notice required by these Bylaws, the Restated
Articles of Incorporation or the provisions of any applicable law. Such waiver shall be in writing, be
signed by the shareholder entitled to the notice and be delivered to the Company for inclusion in the
minutes for filing with the corporate records. A shareholder s attendance at a meeting waives objection to
(i) lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting
objects to holding the meeting or transacting business at the meeting and (ii) consideration of a particular
matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the
shareholder objects to considering the matter when it is presented.
(b) A director may at any time waive any notice required by these Bylaws, the Restated
Articles of Incorporation or the provisions of any applicable law. Except as set forth below, such waiver
must be in writing, be signed by the director entitled to the notice, must specify the meeting for which
notice is waived and must be filed with the minutes or corporate records. A director s attendance at or
participation in a meeting waives any required notice to the director of the meeting unless the director at the
beginning of the meeting, or promptly upon the director s arrival, objects to holding the meeting or
transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.
8.4 Engineering Decisions in Washington. Engineering decisions pertaining to any project or
engineering activities in the State of Washington shall be made by the engineer designated by or in
accordance with resolutions of the Board of Directors.
Oregon Control Share Act. Sections 60.801 to 60.816 of the Oregon Business Corporation
Act, known as the "Oregon Control Share Act " do not apply to acquisitions of the Company s voting
shares (as defined in the Oregon Control Share Act).
ARTICLE IX
AMENDMENTS
The Company s Bylaws may be amended or repealed or new bylaws may be made: (a) by the
affirmative vote of the holders of record of a majority of the outstanding capital stock of the Company
entitled to vote thereon, irrespective of class, given at any annual or special meeting of the shareholders;
provided that notice of the proposed amendment, repeal or new bylaw or bylaws be included in the notice
of such meeting or waiver thereof; or (b) by the affirmative vote of a majority of the entire Board of
Directors given at any regular meeting of the Board, or any special meeting thereof; provided that notice of
the proposed amendment, repeal or new bylaw or bylaws be included in the notice of such meeting or
waiver thereof or all of the directors at the time in office be present at such meeting.
EXHIBIT C
Statement of Control, Ownership
and
Holding Company Status
Exhibit C
Statement of Control, Ownership and Holding Company Status
PacifiCorp does not directly or indirectly own, control or hold power to vote S percent or
more of the outstanding voting securities of any "public utility company" as defined in
the Public Utility Holding Company Act of 1935, as amended (PUHCA 1935) or the
Public Utility Holding Company Act of 2005 (PUHCA 2005) of any company that is a
holding company" by virtue of such acts, and no determination has been made by the
Securities and Exchange Commission or the Federal Energy Regulatory Commission that
PacifiCorp exercises a controlling influence over any such person.
All of PacifiCorp s issued and outstanding common stock is indirectly owned by
MidAmerican Energy Holdings Company, which is a "holding company" under PUHCA
2005 and a majority-owned subsidiary of Berkshire Hathaway Inc.
EXHIDIT C
EXHIBIT
ACIFICORP
Unconsolidated Balance Sheet
September 30, 2006
EXHIBIT D
PACIFICORP
UNCONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2006
ASSETS AND OTHER DEBITS TOTAL CORPORATION PROPOSED FINANCING TOTAL PROFORMA
UTILITY PLANT
ELECTRIC PLANT IN SERVICE (101)068 264 174,068 264 174,
PROPERTY UNDER CAPITAL LEASES (101,620 226,620 226,
ELECTRIC PLANT PURCHASED OR SOLD (102)200,200,
EXPERIMENTAL ELECTRIC PLANT - UNCLASSIFIED (103)
ELECTRIC PLANT HELD FOR FUTURE USE (105)205 805,205 805,
COMPLETED CONSTRUCTION NOT CLASSIFIED (106)101 647,101 847,
CONSTRUCTION WORK IN PROGRESS - ELECTRIC (107)749 170 367,656,480 672,407 651 259,
ELECTRIC PLANT ACQUISITION ADJUSTMENTS (114)157 193 779,157 193 779,
OTHER UTILITY PLANT (116)
NUCLEAR FUEL (120,120.4)
TOTAL UTILITY PLANT 042 566 421,658 460 872,701 067 293,
ACCUM PROV FOR DEPR OF ELECT PLANT IN SERVICE (106)895 930 413,695 930 413,
ACCUM PROV FOR AMORT OF ELECT PLANT IN SERVICE (111)376 642 964,376 642 964,
ACCUM PROV FOR ASSET ACQUISITION ADJUSTMENT (115)518 975,516 975.
ACCUM PROV FOR DEPR OF OTHER UTILITY PLANT (119)
ACCUM PROV FOR AMORT OF NUCLEAR FUEL ASSEMB (120.
UTILITY PLANT - NET 691 494 067,656,480 872,349 974 939,
NON UTILITY PROPERTY AND INVESTMENTS
NONUTILITY PROPERTY (121)896 543,896 543,
ACCUM PROV FOR DEPR/AMORT OF NON UTILITY PROP (122)205 063,205 063,
INVESTMENT IN ACCOCIATED COMPANIES (123)373 024,373 024,
INVESTMENT IN SUBSIDIARY COMPANIES (123,103 783 226,103 763 226,
OTHER INVESTMENTS (124)101 992,101 992,
OTHER SPECIAL FUNDS (128)681 693,661 693,
LONG-TERM PORTION OF DERIVATIVE INSTRUMENT ASSETS (175)271 018 877.96 271 016 677,
TOTAL NONUTILITY PROPERTY & INVESTMENTS 469 650 294,469 650 294,
CURRENT AND ACCRUED ASSETS
CASH (131)981 237,961 237,
SPECIAL DEPOSITS (132-134)376 224,376 224,
WORKING FUNDS (135)170,170,
TEMPORARY CASH INVESTMENTS (136)26,481 893,(26,461 893.92)
NOTES RECEIVABLE (141)863 240,663 240,
CUSTOMER ACCOUNTS RECEIVABLE (142)326 961 715,326 981 715,
OTHER ACCOUNTS RECEIVABLE (143)559 849,559 849,
ACCUMULATED PROV FOR UNCOLLECTIBLE ACCOUNTS (144)(12 047,400.41)(12 047 400.41)
NOTES RECEIVABLE FROM ASSOCIATED COMPANIES (145)310,420,310,420,
ACCOUNTS RECEIVABLE FROM ASSOCIATED COMPANIES (146)658 379,658 379,
FUEL STOCK (151-152)772 047,772 047,
MATERIALS AND SUPPLIES (154-163)126 393 935,126 393 935,
PREPAYMENTS (165)150 347,150 347,
INTEREST AND DIVIDENDS RECEIVABLE (171)211,211,
RENTS RECEIVABLE (172)065 114,065 114,
ACCRUED UTILITY REVENUES (173)163 107 761,163 107 761,
MISCELLANEOUS CURRENT AND ACCRUED ASSETS (174)
CURRENT PORTION OF DERIVATIVE INSTRUMENT ASSETS (175)145 520 672,145 520 672.60
DERIVATIVE INSTRUMENT ASSETS - HEDGES (176)162 990,
TOTAL CURRENT AND ACCRUED ASSETS 003 460 612,(26,461 693,92)947 815 928,
DEFERRED DEBITS
UNAMORTIZED DEBT EXPENSE (181)206 992,500 000,706 992,
EXTRAORDINARY PROPERTY LOSSES (182,
UNRECOVERED PLANT AND REGULATORY STUDY COSTS (182,257 738,257 736,
OTHER REGULATORY ASSETS (182,077 500 436,077 500 436,
PRELIMINARY SURVEY & INVESTIGATION CHARGES (183)455 168,3,455 168,
CLEARING ACCOUNTS (184)
TEMPORARY FACILITIES (185)434.434,
MISCELLANEOUS DEFERRED DEBITS (186)820 119,820 119,
RESEARCH DEVELOPMENT DEMONSTRATION EXPENDITURES (188)
UNAMORTIZED LOSS ON REACQUIRED DEBT (169)611 912.611 912,
ACCUMULATED DEFERRED INCOME TAXES (190)699 360 623.43 699 360 623.43
TOTAL DEFERRED DEBITS 894 304,426,500 000,908 804 426,
TOTAL ASSETS AND OTHER DEBITS 078 909 601,646 496 978,696 245 569,
EXHIBIT D
PAGE 1 OF 2
EXHIBIT D
PACIFICORP
UNCONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2006
LIABILITIES AND OTHER CREDITS TOTAL CORPORATION PROPOSED FINANCING TOTAL PROFORMA
CAPIT ALiZA TION
COMMON EQUITY
COMMON STOCK ISSUED (201)3,417 945,896,3,417 945 896,
COMMON STOCK LIABILITY FOR CONVERSION (203)
PREMIUM ON CAPITAL STOCK (207)
OTHER PAID-IN CAPITAL (208-211)152 690 163,152,690 163,
INSTALLMENTS RECEIVED ON CAPITAL STOCK (212)
CAPITAL STOCK EXPENSE (214)288 206,288 206,
RETAINED EARNINGS 1215,216)731 045 878,003 641,727 042,237.
REACQUIRED CAPITAL STOCK (217)
ACCUMULATED OTHER COMPREHENSIVE INCOME (219)13,686 744,686 744,
TOTAL COMMON EQUITY 274 080 475.49 003 641,270 076 834.46
PREFERRED STOCK ISSUED (204)41,463,300,41,463 300,
LONG-TERM DEBT
BONDS 1221)259 424 000,751 373 000.010 797 000,
POLLUTION CONTROL FUNDS ON DEPOSIT WITH TRUSTEE (221,, 5)224 025,224 025.79\
ADVANCES FROM ASSOCIATED COMPANIES (223\
OTHER LONG-TERM DEBT (224)37,500 000,(37 500 000,
UNAMORTIZED PREMIUM ON LONG-TERM DEBT (225)396,396,
UNAMORTIZED DISCOUNT ON LONG-TERM DEBT (226)019 963,019,963,
TOTAL LONG-TERM DEBT 288 724,407,713 873 000,002 597 407,
TOTAL CAPITALIZATION 604,268,182.709 869 358,314 137,541.
OTHER NONCURRENT LIABILITIES
OBLIGATIONS UNDER CAPITAL LEASES (227)33,484 705,33,484 705,
ACCUMULATED PROVISION FOR PROPERTY INSURANCE (228,688 396,688 396.
ACCUMULATED PROVISION FOR INJURIES & DAMAGES (228,2,472 878,2,472 878,
ACCUMULATED PROVISION FOR PENSIONS & BENEFITS (228,388,967 223.388 967 223,
ACCUMULATED MISCELLANEOUS OPERATING PROVISIONS (228.4)749 098.40 749 098.40
ACCUMULATED PROVISION FOR RATE REFUNDS 1229)
LONG-TERM PORTION OF DERIVATIVE INSTRUMENT LIABILITIES (244\505 083 048.43 505,083 048.43
ASSET RETIREMENT OBLIGATION (230)899,472,899,472,
TOTAL OTHER NONCURRENT LIABILITIES 060 344 823.060 344 823,
CURRENT AND ACCRUED LIABILITIES
NOTES PAYABLE 1231\000 000,(60 921 739,078 260,
ACCOUNTS PAYABLE 1232)409 783,131,409 783 131,
NOTES PAYABLE TO ASSOCIATED COMPANIES (233\
ACCOUNTS PAYABLE TO ASSOCIATED COMPANIES (234\510 009,510 009,
CUSTOMER DEPOSITS (235)930 765,930 765,
TAXES ACCRUED (236)990 228,(2,448 641,541 587,
INTEREST ACCRUED 1237\936 641,936 641,
DIVIDENDS DECLARED (238)520 947.43 520 947.43
MATURED LONG-TERM DEBT (239\
MATURED INTEREST (240)
TAX COLLECTIONS PAYABLE (241)252 197,252 197,
MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES (242\786 895,786 895,
OBLIGATIONS UNDER CAPITAL LEASES (243)763 978,763 978,
CURRENT PORTION OF DERIVATIVE INSTRUMENT LIABILITIES (244)119,407 026,119 407 026,
DERIVATIVE INSTRUMENT LIABILITIES - HEDGES (245)480 784,480 784.
TOTAL CURRENT AND ACCRUED LIABILITIES 867 362 607,(63 370 380,803 992 226,
DEFERRED CREDITS
CUSTOMER ADVANCES FOR CONSTRUCTION (252\167 220,167 220,
OTHER DEFERRED CREDITS (253)173 903,173 903,
OTHER REGULATORY LIABILITIES (254)114 419,046,114,419 046,
ACCUMULATED DEFERRED INVESTMENT TAX CREDITS (255)667 970,667 970.
UNAMORTIZED GAIN ON REACQUIRED DEBT (257)228,228,
ACCUM DEFERRED INCOME TAXES - ACCEL AMORTIZTN (281)404,436,404,436.
ACCUM DEFERRED INCOME TAXES-LlBRLZ DEPRECIATION 1282)990 858 018,990 858 018,
ACCUMULATED DEFERRED INCOME TAXES-OTHER (283\306 166 163,306 166 163,
TOTAL DEFERRED CREDITS 546 933 987,546 933 987.
TOTAL LIABILITIES AND OTHER CREDITS 13,078 909 601,646,498 978,725 408 579,
EXHIBIT D
PAGE 2 OF 2
PacifiCorp
Pro Forma Issuance of $1.5 billion of Long-term Debt
Proposed Journal Entries for the 12 Months Ended September 30, 2006
Cash
Unamortized Debt Expense
Bonds
Proceeds of issuing $1.billion in long-term debt
131
181
221
1,485 000 000
000 000
500 000,000
Notes Payable - Commercial Paper
Cash
231
131
000 000
000 000
Proceeds of bond issuance used to retire existing short-term debt at September 30, 2006
Bonds
Other Long-Term Debt
Cash
221
224
131
748 627 000
500 000
786 127 000
Proceeds of bond issuance used to finance long-term debt mandatorily redeemable preferred stock
maturities (for scheduled maturities from 10/1/06 through 12/31/08)
Construction Work In Progress
Cash
107
131
618 873 000
618 873 000
000 000
921 740
078,260
500 000
500 000
4,400 000
4,400 000
Remaining proceeds of bond issuance used to finance additional capital spending
Interest on Long-Term Debt
Temporary Cash Investments
Notes Payable - Commercial Paper
Interest on $1.billion bond issuance
427/216
136
231
Amortization of Debt Expense
Unamortized Debt Expense
Amortization of debt expense for new issuance
428/216
181
Temporary Cash Investments 136Other I nterest Expense 431 / 216
Reduced interest from short-term debt replaced by new issuance
Temporary Cash Investments 136 46 039 846
Interest on Long-Term Debt 427/216 46 039 846
Reduced interest from maturing bonds and mandatorily redeemable preferred stock replaced by new issuance
Construction Work In Progress
AFUDC - borrowed funds
Capitalized interest from increased CWIP
107
432/216
607 872
607 872
Taxes Accrued
Income Taxes - Federal
Income Taxes - State
Net tax effect of above interest expense amounts
236
409/216
409/216
2,448 641
155 707
292 934
PacifiCorp
Pro Forma Issuance of $1.5 billion of Long-term Debt
Pro Forma Assumptions:
1) Proceeds of long-term debt issuance used to retire short-term debt, replace maturing long-term
debt & preferred stock and finance capital expenditures.
2) Assumed 30 year long-term debt issuance at 6.4% interest rate with 1.0% issuance costs.
3) Assumed short-term debt interest rate of 5.5%.
4) Scheduled long-term debt & mandatorily redeemable preferred stock maturities through 12/31/08:
Maturity
Date
10/01/06
10/01/06
10/01/06
10/01/06
10/01/06
10/01/06
10/01/06
10/01/06
11/01/06
Amount
$3,459 000
279 000
145 000
850 000
342 000
037 000
736 000
704 000
200 000,000
$210 552 000
724 000
100 000 000
500 000
000 000
500 000
000 000
745 000
301 000
242 000
925 000
1,460 000
206 000
800 000
764 000
200,000 000
200 000 000
055 000
325 000
348 000
007 000
587 000
389,000
869,000
828 000
$575 575 000
$786 127 000
Rate
8.271 %
978%
8.493%
797%
8.734%
294%
635%
8.470%
650%
670%
625%
7.480%
7.430%
7.220%
270%
8.271%
978%
8.493%
8.797%
734%
8.294%
635%
8.470%
375%
300%
8.271%
978%
8.493%
797%
734%
8.294%
8.635%
8.470%
01/10/07
06/01/07
06/15/07
09/11/07
09/18/07
09/24/07
10/01/07
10/01/07
10/01/07
10/01/07
10/01/07
10/01/07
10/01/07
10/01/07
05/15/08
09/15/08
10/01/08
10/01/08
10/01/08
10/01/08
10/01/08
10/01/08
10/01/08
10/01/08
Total L T Debt & Pfd Stk maturities from 10/1106 through 12/31/08
5) For purposes of pro forma statements, the allowance for borrowed funds used during construction
rate assumed equal to rate for new bond issuance used to finance new capital spending.
6) Effective federal income tax rate of 33.41 % a!1d. effective state tax rate of 4.54%.
i:'
EXHIBIT E
ACIFICORP
Unconsolidated Statement of Income
12 Months Ended September 30, 2006
EXHIBIT E
PACIFICORP
UNCONSOLIDATED STATEMENT OF INCOME
12 MONTHS ENDED SEPTEMBER 30 2006
TOTAL CORPORATION PROPOSED FINANCING TOTAL PROFORMA
UTILITY OPERATING INCOME
OPERATING REVENUES 683,420 321,683,420 321,
OPERATION AND MAINTENANCE EXPENSE
OPERATION 053 822 471,053 822,471,
MAINTENANCE 339 704 064,339 704 064.
TOTAL OPERATION AND MAINTENANCE EXPENSE 393 526 535,393 526 535,
DEPRECIATION 384 313 502,384 313 502,
DEPRECIATION EXPENSE FOR ASSET RETIREMt:NT COSTS
AMORTIZATION 155 098,155 098,
TAXES OTHER THAN INCOME TAXES 100 412 956,100,412 956,
CURRENT INCOME TAXES 139 948 530.448 641,00)137 499 889.
PROVISION FOR DEFERRED INCOME TAXES 010 019,010 019,
INVESTMENT TAX CREDIT ADJUSTMENTS -- NET 854 860,00)854 860,00)
GAINS FROM DISPOSITION OF UTILITY PLANT
LOSSES FROM DISPOSITION OF UTILITY PLANT 094.094,
ACCRETION EXPENSE
GAINS FROM DISPOSITION OF ALLOWANCES 577 749,577 749.
OTHER UTILITY OPERATING INCOME - STEAM HTG
UTILITY OPERATING INCOME 607 426 194,2,448 641,609 874 835.
OTHER INCOME AND DEDUCTIONS
OTHER INCOME
INCOME FROM MERCHANDISING 617 288,617 288,
INCOME FROM NON UTILITY OPERATIONS 114 342,114 342.
NONOPERATING RENTAL INCOME 546.546,
EQUITY IN EARNINGS OF SUBSIDIARIES 089 939,92)089 939,
INTEREST AND DIVIDEND INCOME 920 572.62 920 572.62
ALLOW FOR FUNDS USED DURING CONSTRUCTION 20,676 224,676 224,
MISCELLANEOUS NONOPERATING INCOME 547 482 239.547 482 239,
GAIN ON DISPOSITION OF PROPERTY 350 532,350 532,
TOTAL OTHER INCOME 576 133 806,576 133 806,
OTHER INCOME DEDUCTIONS
LOSS ON DISPOSITION OF PROPERTY 376 730,376 730,
MISCELLANEOUS AMORTIZATION 076 376,076 376,
MISCELLANEOUS INCOME DEDUCTIONS 533 852 186,533 852 186,
TOTAL OTHER INCOME DEDUCTIONS 535 305 293,000 535 305 293,
TAXES APPLIC TO OTHER INCOME & DEDUCTIONS
TAXES OTHER THAN INCOME TAXES 479 531.24 479 531.24
INCOME TAXES 341 152,341 152,
DEFERRED INCOME TAXES (41,402 722.40)(41 402 722.40)
INVESTMENT TAX CREDITS 065 260,00)065 260,00\
TOTAL TAXES APPLIC TO OTHER INC & DED 352 701.44 352 701.44
NET OTHER INCOME AND DEDUCTIONS 25,475 812,25,475 812,
INCOME BEFORE INTEREST CHARGES 632 902 006,2,448 641,635 350 647,
INTEREST CHARGES
INTEREST ON LONG-TERM DEBT 243 030 969,960 154,292 991 123,
AMORTIZATION OF DEBT DISCOUNT AND EXPENSE 907 738,500,000.407 738,
AMORTIZATION OF LOSS ON REACQUIRED DEBT 032 14836 032 148,
AMORTIZATION OF PREMIUM ON DEBT 718,718,
AMORTIZATION OF GAIN ON REACQUIRED DEBT (84 505,(84 505,
INTEREST ON DEBT TO ASSOCIATED COMPANIES 85,335,335,
OTHER INTEREST EXPENSE 273,435,(4,400 000,873 435,
ALLOW FOR BRD FUNDS USED DURING CONSTR (21 277 258,(39 607 872.00 (60 885 130,96)
NET INTEREST CHARGES 255 965 145.48 6,452 282,262,417 427,
INCOME BEFORE EXTRAORD, ITEMS 376 936 860,003 641,372 933 219,
EXTRAORDINARY ITEMS -- NET OF INCOME TAX
INCOME TAX ON CUM, EFFECT OF CHANGE IN ACCT. PRINC
CUMULATIVE EFFECT OF CHANGE IN ACCT. PRINCIPLE
NET INCOME 376 936 860,003 641,03)372 933 219.
PREFERRED DIVIDEND REQUIREMENTS 083 789,083 789,
EARNINGS AVAILABLE FOR COMMON STOCK 374 853 071,003 641,370 849 430.
EXHIBIT E
PAGE 1 OF 1
EXHIBIT I
Sources and Uses of Treasury Funds
September 30, 2006
EXHIBIT I
PACIFICORP
SOURCES AND USES OF TREASURY FUNDS
SEPTEMBER 30, 2006
TREASURY FUND USES:TOTAL CORPORATION PROPOSED FINANCING TOTAL PROFORMA
UTILITY PLANT 042,586,421,658 480 872,701 067 293,
ACCUMULATED PROVISION FOR DEPREC, AND AMORTIZATION 351 092 353,351 092,353,
UTILITY PLANT - NET 691,494,067,658 480 872,349 974 939,
INVESTMENT IN DEFERRED OR TERMINATED PROJECTS 552,481 000,552,481 000.
TOTAL FUND USES 243 975 067,658,480 872,902 455 939,
TREASURY FUND SOURCES:
PERMANENT FINANCING ISSUANCES
LONG TERM DEBT 934 648 000,076 149,000,010 797 000,
PREFERRED STOCK 41,463 300,463 300,
COMMON STOCK 459 234 102,3,459 234 102,
OBLIGATIONS UNDER CAPITAL LEASES 720 726,720 726,
TOTAL 7,468 066 129,076 149 000,544 215 129,
TEMPORARY FINANCING ISSUANCES
SHORT TERM DEBT (NET)518 106.(34,439 845,19,078 260,
CURRENT PORTION OF LONG TERM DEBT & PFD STK 362 276 000,(362 276 000,
CURRENT PORTION OF CAPITAL LEASES 763 978,763 978,
ADVANCES FROM SUBSIDIARIES (NET)
TOTAL 416 558 084,(396 715 845,842 238,
TOTAL FUND SOURCES 884 624 214.679 433 154,584 057 368,
BALANCE OF FUNDS OBTAINED FROM INCOME AND FROM SOURCES
OTHER THAN SECURITIES ISSUED AND OTHER OBLIGATIONS INCURRED 359 350 853,(20,952,282.338 398 571,
EXHIBIT I
PAGE 1 OF 1
EXHIBIT J
Limitations on Issuance of First Mortgage Bonds
and
Preferred Stock
September 30,2006
Exhibit J
Limitations on Issuance of First Mortgage Bonds
and Preferred Stock
September 30, 2006
Mortgage
Bonds may be issued under the Company s Mortgage on the basis of: (1) Class
A" Bonds delivered to the Trustee under the Mortgage; (2) 70% of qualified Property
Additions after adjustments to offset retirements; (3) retirement of Bonds or certain prior
lien bonds; and/or (4) deposits of cash. With certain exceptions in the case of (1) and (3)
above, the issuance of Bonds under the Mortgage is subject to adjusted net earnings of
the Company for twelve out of the preceding fifteen months, before income taxes, being
at least twice the annual interest requirements on all Bonds at the time outstanding,
including any new issue, all outstanding Class "A" Bonds held other than by the Trustee
or by the Company, and any other indebtedness secured by a lien prior to the Lien of the
Mortgage.
Under above mortgage coverage tests, the Company estimates that it could have
issued an additional $4.6 billion principal amount of Bonds under the Mortgage as of
September 30, 2006.
Preferred Stock
Not applicable to proposed issuance.
EXHlliIT J