20080701Application.pdf

~~~;co~OUNTAIN
201 South Main, Suite 2300
Salt Lake City, Uth 84111
37
Jì OVERNIGHT DELIVERY
June 30, 2008
Idaho Public Utilty Commission
Statehouse
472 West Washington Street
Boise, ID 83720
ATTN:Ms. Jean Jewell
Commssion Secretar
Re: Case No. PAC-E-08-0~:In the Matter of the Application of ROCKY
MOUNTAIN POWER for authority to (1) borrow
the proceeds of not more than $450,345,000 of
Pollution Control Revenue Bonds, (2) enter into
such agreements or arrangements as may be
reasonably necessar to effect the borrowings and
to provide credit enhancement for the Bonds,
including the issuance of First Mortgage and
Collateral Trust Bonds, and (3) replace or modify
from time to time the credit enhancement
arangements supporting the Bonds.
Dear Commissioners:
Enclosed herewith for filing with the Commssion are an original and four (4) copies of the
above-referenced application, including a proposed order for the Commission's consideration.
Due to recent market developments, there has been a signficant reduction in market liquidity for
certn insured varable rate Pollution Control Revenue Bonds and interest rates on these bonds
have risen. Consequently, the Company is seeking authority to refinance existing series of
insured variable rate pollution control bonds in the event that interest rates do not retu to more
normal levels.
In addition, the Company is requesting authority to refinance up to four series of outstading
fixed rate pollution control revenue bonds issued to finance, or refinance, the cost of certin
pollution control, solid waste disposal and sewage facilties at the Hunter, Huntington, Naughton
electric generating plants and the Cottonwood facility. Although the cost to the Company of
these bonds has not been directly impacted by these recent market developments, the Company
may be able to economically refinance these obligations depending on levels of interest rates and
market conditions.
Idaho Public Utility Commission
June 30, 2008
Page 2
The Company expects any such refiancing will achieve interest savings, including the effect of
the amortization of the redemption premium, if any, and the unortized issuace expenses on
the Prior Bonds, as a result of the refiancings.
Furher, the Company is undertng signficant capita expenditues related to pollution control
and solid waste disposal facilities at certin electric generating plants. It may be possible to
finance a portion of these expenditues through new issuances of pollution control revenue bonds
resulting in interest rate savings as compared to other financing alternatives. In order to complete
a new issuace of pollution control revenue bonds it will be necessar to obtain an allocation of
that state's "volume cap" (which imposes an anual limit in each state, based upon the state
population). As each state may have a number of competing applicants for a fixed amount of
volume cap, the Company mayor may not be successful in obtaning sufficient authority for new
money pollution control revenue bonds. However, the Company is requesting authority at this
time in order to be able to proceed with a new money financing should volume cap be available
and a ta-exempt financing be cost effective.
The Company respectfully requests that the Commission issue its order on or before
July 31, 2008. The Company also requests twenty certified copies of any order issued in this
matter. Notice of ths Application wil be published within seven days as requied by the
Commission's Rules of Procedure. Please note that the Company's Application Fee in the
amount of $1 ,000 is being submitted under separate cover.
It is respectfully requested that all formal correspondence and Staf requests regarding this
material be addressed to:
Bye-mail (preferred):dataequest(ßpacificorp.com
By reguar 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].
Idaho Public Utility Commission
June 30, 2008
Page 3
Your attention to ths matter is appreciated.
Sincerely,~~w~
Bruce N. Wiliams
Vice President and Treasurer
Enclosures: Application (1 original and 4 copies)
Proposed Form of Order (l original and 4 copies)
CD containng the proposed Form of Order
Cc: Ted Weston
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION,
¿. ü~.):J ",J::;)T-:~: 3 0 9= 39
In the Matter of the Application of ROCKY )
MOUNTAIN POWER for authority to (1) )
borrow the proceeds of not more than )
$450,345,000 of Pollution Control Revenue )
Bonds, (2) enter into such agreements or )
arangements as may be reasonably necessar to )
effect the borrowings and to provide credit )
enhancement for the Bonds, including the
issuance of First Mortgage and Collateral Trust
Bonds, and (3) replace or modify from time to
time the credit enhancement arrangements
supporting the Bonds.
APPLICATION
CASE NO. PAC-E-08:Q
Rocky Mountain Power, a division of PacifiCorp, (Company) hereby applies for an order
of the Idaho Public Utilities Commssion (Commssion) authorizing the Company to (1) borrow
the proceeds of not more than $300,345,000 of Pollution Control Revenue Refunding Bonds
("Refunding Bonds") to be issued by the Counties of Emery, Utah, Carbon, Utah, Lincoln,
Wyoming, Sweetwater, Wyoming, Converse, Wyoming, and Moffat, Colorado ("Refunding
Counties"), (2) borrow the proceeds of not more than $150,00,000 of Pollution Control
Revenue Bonds ("New Money Bonds") to be issued by one or more of the following Counties or
municipalities: Emery, Utah, Converse, Wyoming, Lincoln, Wyoming, Sweetwater, Wyoming,
City of Gilette, Wyoming, Navajo County, Arizona and Routt County, Colorado ("New Money
Issuers"), (3) enter into such agreements or arangements with the Refunding Counties and New
Money Issuers and with other entities as may be reasonably necessar to effect the borrowings
and to provide credit enhancement for the Refunding Bonds and the New Money Bonds,
including the issuance ofthe Company's First Mortgage and Collateral Trust Bonds as collateral,
1
and (4) replace or modify from time-to-time the credit enhancement arrangements
supporting the Refunding Bonds or the New Money Bonds.
These borrowings wil be in connection with the financing, or refinancing, of the cost of
certain pollution control, solid waste disposal and sewage facilities at the Company's electric
generating plants including Jim Bridger, Carbon, Cholla, Craig, Dave Johnston, Hayden, Hunter,
Huntington, Naughton and Wyodak.
The Company requests that such authority remain in effect so long as the
Company's senior secured debt holds investment-grade ratings from at least two nationally
recognized ratings agencies.
The application is fied pursuant to Chapter 9, Title 61, of the Idaho Code and
Sections 141 through 150 of the Commssion's Rules of Procedure and is intended to amend and
supersede order No. 26039 issued by the Commssion June 13, 1995 in docket number PAC-S-
95-2.
The Company respectfully requests that the Commssion issue an order by July 31, 2008.
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 utilty:
The Company was incorporated under Oregon law in August 1987 for the purpse of
faciltating 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 currently serves customers as Rocky Mountain Power in Idaho, Utah and
Wyoming and as Pacific Power in California, Oregon and Washington.
2
(c) The name, address, and telephone number of persons authorized to receive notices and
communications:
Bruce N. Wiliams
Vice President and Treasurer
PacifiCorp
825 N.E. Multnomah, Suite 1900
Portland, OR 97232
Telephone: [phone]
E-mail: bruce.willams(gpacificorp.com
JeffB. Erb
Assistant General Counsel
PacifiCorp
825 N.E. Multnomah, Suite 600
Portland, OR 97232
Telephone: [phone]
E-mail: jeff.erb(gpacificorp.com
Jeffrey K. Larsen, Vice President
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
E-mail: jeff.larsen(gpacificorp.com
Daniel Solander, Senior Counsel
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
E-mail: daniel.solander(gpacificorp.com
Ted Weston
Manager, Regulation
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
E-mail: ted.weston(gpacificorp.com
It is respectfully requested that all formal correspondence and Staff requests regarding
this material be addressed to:
Bye-mail (preferred):datarequest (gpacificorp.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 Wiliams at [phone].
3
(d) A full description of the securities proposed to be issued:
Pursuant to Rule 142 of the Rules of Practice and Procedure, the Applicant hereby files
the application filed with the Public Utility Commission of Oregon as Exhibit "D-1" in
lieu of the application required by Rule 141. Applicant further states that:
(1) Applicant has published or wil have published within seven days of the date of
filing this Application a notice in those newspapers listed in Rule 24.19 of the
Rules of Practice and Procedure of the Idaho Public Utilities Commssion that are
in general circulation in Applicant's service area.
(2) Proposed Order of Applicant is fied herewith as Exhibit "D-2".
4
PRAYER
Rocky Mountain Power respectfully requests that the Commssion enter its order in this
matter, effective upon issuance, authorizing Rocky Mountain Power to (1) borrow the proceeds
of not more than $300,345,000 of Pollution Control Revenue Refunding Bonds ("Refunding
Bonds") to be issued by the Counties of Emery, Utah, Carbon, Utah, Lincoln, Wyoming,
Sweetwater, Wyoming, Converse, Wyoming, and Moffat, Colorado ("Refunding Counties"), (2)
borrow the proceeds of not more than $150,000,000 of Pollution Control Revenue Bonds ("New
Money Bonds") to be issued by one or more of the following Counties or municipalities: Emery,
Utah, Converse, Wyoming, Lincoln, Wyoming, Sweetwater, Wyoming, City of Gilette,
Wyoming, Navajo County, Arizona and Routt County, Colorado ("New Money Issuers"), (3)
enter into such agreements or arangements with the Refunding Counties and New Money
Issuers and with other entities as may be reasonably necessar to effect the borrowings and to
provide credit enhancement for the Refunding Bonds and the New Money Bonds, including the
issuance of the Company's First Mortgage and Collateral Trust Bonds as collateral, and (4)
replace or modify from time-to-time the credit enhancement arrangements supporting the
Refunding Bonds or the New Money Bonds.
These borrowings wil be in connection with the financing, or refinancing, of the cost of
certain pollution control, solid waste disposal and sewage facilities at the Company's electric
generating plants including Jim Bridger, Carbon, Cholla, Craig, Dave Johnston, Hayden, Hunter,
Huntington, Naughton and Wyodak.
5
The Company requests that such authority remain in effect 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.
Dated at Portland, Oregon on June 27, 2008.
PACIFICORP
By:~N~
Bruce N. Wiliams
Vice President and Treasurer
6
VERIFICATION
I, Bruce N. Wiliams, declare, under penalty of perjury, that I am the duly appointed Vice
President and Treasurer of PacifiCorp 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 tre, correct, and complete
of my own knowledge except those matters stated on information or belief which I believe to be
true.
WITNSS my hand and the seal of PacifiCorp on this 2ih day of June, 2008.
~~~
Bruce N. Willams
(Seal)
7
ExhibitD-l
BEFORE THE PUBLIC UTILITY COMMISSION
OF OREGON
UF_
In the Matter of the Application of
PACIFICORP, d.b.a. PACIFIC POWER
for authority to (l) borrow the proceeds of
not more than $450,345,000 of Pollution
Control Revenue Bonds, (2) enter into
such agreements or arrngements as may
be reasonably necessary to effect the
borrowings and to provide credit
enhancement for the Bonds, including the
issuance of First Mortgage and Collateral
Trust Bonds, and (3) replace or modify
from time to time the credit enhancement
arrangements supporting the Bonds.
APPLICA nON OF
PACIFIC POWER AND
WAIVER OF PAPER
SERVICE
Pursuant to ORS 757.405, ORS 757.410(1), ORS 757.415 and OAR 860-27.030,
PacifiCorp, d.b.a. Pacific Power, ("Company") hereby applies for an order of the Public
Utilty Commission of Oregon ("Commission") authorizing the Company to (1) borrow the
proceeds of not more than $300,345,000 of Pollution Control Revenue Refunding Bonds
("Refunding Bonds") to be issued by the Counties of Emery, Utah, Carbon, Utah, Lincoln,
Wyoming, Sweetwater, Wyoming, Converse, Wyoming, and Moffat, Colorado ("Refunding
Counties"), (2) borrow the proceeds of not more than $ 1 50,000,000 of Pollution Control
Revenue Bonds ("New Money Bonds") to be issued by one or more of the following
Counties or municipalities: Emery, Uta, Converse, Wyoming, Lincoln, Wyoming,
Sweetwater, Wyoming, City of Gilette, Wyoming, Navajo County, Arizona and Routt
County, Colorado ("New Money Issuers"), (3) enter into such agreements or arngements
with the Refuding Counties and New Money Issuers and with other entities as may be
reasonably necessary to effect the borrowings and to provide credit enhancement for the
Refunding Bonds and the New Money Bonds, including the issuance of the Company's First
Page i - PacifiCorp Finaoing Application June 2008
Mortgage and Collateral Trust Bonds as collateral, an (4) relace or modify frm time-to-
time the credit enhancement arangements supporting the Refunding Bonds or the New
Money Bonds.
These borrowings wil be in connection with the financing, or refinancing. of th cost
of certain pollution control, solid waste disposal and sewage facilties at the Company's
electrc generating plants including Jim Bridger, Carbon, Cholla, Craig. Dave Johnston,
Hayden, Hunter, Huntington, Naughton and Wyodak.
The Company requests that such authority remain in effect so long as the Company's
senior secured debt holds investment-grade ratings from at least two nationally recognized
ratings agencies. Additionally, the Company requests that this debt issuance amend and
supersede the debt issuance approved by the Commission in Docket No. UF 412'8 ("1995
Docket") Order No. 95-518 ("1995 Order").
Additionally. the Company respectfully waives paper service in this docket pursuant
to OAR 860-013-0070(4). The Company respectfully requests that the Commission issue an
order by July 31, 2008.
I. Compliance with OAR 860-027-0030 Filng Requirements.
(a) Exact name and address of Company's principal business offce.
PacifiCorp
825 N.E. Multnomah, Suite 2000
Portland, OR 97232
(b) State in which incorporated; date of incorporation; and the other states in whichauthorized to transact utilty business.
The Company was incorporated under Oregon law in Augst 1987 for the puros of
faciltating consummation of a merger with Utah Power & Light Company, a Utah
corporation, and changing the state of incorporation of PacifiCorp from Maine to Oregn.
Page 2 - PacifiCorp Financing Appiiction June 200
The Company currently serves customers as Pacifc Power in California, Oregon and
Washington and as Rocky Mountain Power in Idaho, Uta and Wyoming.
(c) Name and address of person(s) authorized to receive notices andcommunications regarding this application.
Bruce N. Wiliams
Vice President and Treasurer
PacifiCorp
825 N.B. Multnomah, Suite 1900
Portland, OR 97232
Telephone: [phone]
E-mail: bruce.wiliams(ipacificorp.com
Natalie Hocken
Vice President & General Counsel
Pacific Power
825 N.E. Multnomah, Suite 2000
Portland, OR 97232
Telephone: [phone]
E-mail: natalie.hockenWlpacificorp.com
Joelle Steward
Oregon Regulatory Affairs Manager
Pacific Power
825 NE Multnomah, Suite 2000
Portland, OR 97232
Telephone: [phone]
E-mail: joelle.steward(ipacificorp.com
JeffB. Erb
Assistant General Counsel
PacifiCorp Energy
825 N .E. Multnomah, Suite 600
Portland, OR 97232
Telephone: [phone]
E-mail: jeff.erb£Bpacificorp.com
It is respectfully requested that all formal correspondence and Staff requets
regarding this material be addressed to:
Bye-mail (preferred):
By regular mail:
datarequest~pacificorp.com
Data Request Response Center
Paci fi Corp
825 NE Multnomah, Suite 2000
Portland, Oregon 97232
By fax:[phone]
Informal inquiries may be directed to Bruce Wiliams at [phone].
(d) Names and titles of the principal offcers of the Company.
Greg Abel
Rob Lasich
R. Patrick Reiten
A. Richard Walje
Brent R. Gale
Mark Moench
Doug Stuver
President & CEO, PacifiCorp
President, PacifiCorp Energy
President, Pacific Power
President, Rocky Mountain Power
Senior Vice President, PacifiCor
General Counsel, PacifiCorp
Senior Vice President, Chief Financial
Offcer, PacifiCorp
Page 3 - PacifiCoJ' Financing Application June 2008
(e) Description of the general character of the business done and to be done, and adesignation of the territories served.
The Company provides retail electric service to customers as Pacific Power in
California, Oregon and Washington and as Rocky Mountain Power in Idaho, Utah and
Wyoming. A map showing PacifiCorp's service terrtories is included as Exhibit M.
(I) Statement, as of the date of the balance sheet submitted with this application,showing for each class and series of capital stock: brief description; the amount
authorized (face value and number of shares); the amount outstanding (exclusive
of any amount held in the treasury), held amount as reacquired securities;
amount pledged by the Company; amount owned by affliated interests, and
amount held in any fund.
The capital stock as of March 31, 2008 is as follows:
Outstanding
Shares
Cumulative Preferred Stock:
5% Preferred, $ 1 00 stated value
(126,533 shares authorized)
126,243
Serial Preferred, $ 1 00 stated value
(3,500,000 shares authorized)
4.52% Series
4.56% Series
4.72% Series
5.00% Series
5.40% Series
6.00% Series
7.00% Series
2,065
84,592
69,890
41,908
65,959
5,930
18,046
Total Preferred Stock 414,633
Page 4 - PacifiCorp Financing Application June 2008
Amount
$ 1 2,624,300
$206,500
$8,459,200
$6,989,00
$4,190,80
$6,595,900
$593,00
$1,804,600
$41,463,300
Common Stock*:
No Par Value
(750,000,000 shares authorized)357,060,915
*All shares of outstanding common stock are indirectly owned by MidAmerican Energy Holdings Company.
(g) Statement, as of the date of the balance sheet submitted with this application,showing for each class and series of long-term debt or notes: brief description
(amount, interest rate and maturity); amount authorized; amount outstanding
(exclusive of any amount held in the treasury): amount held as reacquiredsecurities; amount pledged by the Company; amount held by affliated interes;
and amount in sinking and other funds.
The long-term debt as of March 31, 2008 is as follows:
Description Authorized
First Mortgage Bonds:
4.30% Series due September 15, 2008
6.90% Series due November 15, 2011
5.45% Series due September 15, 2013
4.95% Series due August 15,2014
7.70% Series due November 15,2031
5.90% Series due August 15,2034
5.25% Series due June 15,2035
6.10% Series due August i, 2036
5.75% Series due April 1,2037
6.25% Series due October 15,2037
$200,000,000
$500,000,000
$200,000,000
$200,000,000
$300,000,000
$200,000,000
$300,00,000
$350,00,000
$600,000,000
$'600,000,000
$48,972,000
$4,422,000
$19,772,000
$ 1 6,203,00
$28,218,000
$46,946,000
$18,750,000
$19,609,00
8.271% C-U Series due th October 1,2010
7.978% C-U Series due thru October 1,2011
8.493% C-U Series due thru October 1,2012
8.797% C-U Series due thr October 1,2013
8.734% C-U Series due thr October i, 2014
8.294% C-U Series due thr October 1,2015
8.635% C-U Series due thr October 1,2016
8.470% C-U Series due thru October 1,2017
9.15% MIN Series C due August 9, 201 1
8.92% MTN Series C due September i, 2011
8.95% MTN Series C due September 1,2011
8.29% MTN Series C due December 30, 201 1
$8,000,000
$20,000,00
$45,000,00
$3,000,000
Page 5 - PacifCorpFinancing A'PPlication June 2008
Outtanding
$200,000,00
$500,00,000
$200,00,00
$200,000,000
$300,000,000
$200,000,000
$300,000,000
$350,000,00
$600,000,00
$600,000,00
$13,200,00
$1,469,000
$7,988,00
$7,542,000
$14,492,000
$25,697,000
$11,159,000
$12,288,000
$8,000,000
$20,00,000
$45,()00,OOO
$3;00,00
Description Authorized Outstanding
First Mortgage Bonds:
8.26% MTN Series C due Januar 10, 2012 $1,000,000 $1,000,000
8.28% MTN Series C due January 10, 20 I 2 $2,000,000 $2,000,000
8.25% MTN Series C due Februar 1, 2012 $3,000,000 $3,00,00
8.53% MTN Series C due December 16, 2021 $15,000,000 $15,000,000
8.375% MTN Series C due December 31, 2021 $5,000,000 $5,00,000
8.26% MTN Series C due January 7, 2022 $5,000,000 $5,000,000
8.27% MTN Series C due January 10, 2022 $4,000,000 $4,00,000
8.13% MTN Series E due Janua 22,2013 $10,000,000 $10,000,000
8.07% MTN Series E due September 9, 2022 $8,00,000 $8,000,00
8.11 % MTN Series E due September 9, 2022 $12,000,000 $12,00,000
8.12% MTN Series E due September 9,2022 $50,000,000 $50,00,000
8.05% MTN Series E due September 14,2022 $10,000,000 $10,00,00
8.05% MTN Series E due September 18, 2022 $15,000,000 $15,000,000
8.08% MTN Series E due October 14, 2022 $51,000,000 $51,000,000
8.23% MTN Series E due Januar 20, 2023 $5,000,000 $5,000,000
8.23% MTN Series E due January 20, 2023 $4,000,000 $4,00,000
7.26% MTN Series F due July 21, 2023 $38,000,000 $38,000,000
7.23% MTN Series F due August 16,2023 $15,000,000 $15,000,000
7.24% MTN Series F due August 16,2023 $30,000,000 $30,000,000
6.72% MTN Series F due September 14, 2023 $2,000,000 $2,000,00
6.75% MTN Series F due September 14,2023 $7,000,000 $7,00,00
6.75% MTN Series F due October 23,2023 $48,000,000 $48,00,000
6.71% MTN Series G due Januar 15,2026 $100,000,000 $100,000,00
7.00% MTN Series H due July 15,2009 $125,000,000 $125,00,00
Total First Mortgage Bonds:$4,184,835,000
Pollution Control Bonds:
Moffat County, Colorado
Varable% Series i 994 due May 1, 2013 $40,655,000 $40,655,000
Pag 6 - PacifiCorp Financing Apication June 200
Description
Converse County, Wyoming
3.90% Series 1988 due January 1,2014
Varable% Series 1992 due December 1, 2020
Varable% Series 1994 due November 1,2024
4.125% Series 1995 due November 1, 2025
Sweetwater County, Wyoming
Variable% Series 1988B due Januar 1,2014
3.90% Series 1984 due December 1,2014
Variable% Series 1990A due July 1,2015
Variable% Series 1988A due January I, 2017
Variable% Series 1 992A due December 1, 2020
Varable% Series 1 992B due December 1, 2020
Varab1e% Series 1994 due November 1,2024
Varable% Series 1995 due November 1,2025
Lincoln County, Wyoming
3.40% Series 1991 due Januar 1,2016
5.625% Series 1993 due November 1, 2021
Varable% Series 1994 due November 1, 2024
4.125% Series 1995 due November 1,2025
City of Gilette, Wyoming
Varable% Series 1988 due Januar 1,2018
Emery County, Utah
Varable% Series 1991 due July 1, 2015
5.65% Series 1993A due November 1,2023
5.625% Series 1993B due November 1, 2023
Varable% Series 1994 due November 1, 2024
6.15% Series 1996 due September 30, 2030
Carbon County, Utah
Variable% Series 1994 due November I, 2024
City of Forsyth, Montana
4.125% Series 1986 due December 1,2016
Varable% Series 1988 due Januar 1,2018
Total Pollution Control Bonds
Page 7 - PacifiCorp Financins Application June 2008
Authorized Outstanding
$17,000,000 $17,000,000
$22,485,000 $22,485,000
$8,190,000 $ß,190,000
$5,300,000 $5,300,000
$11,500,000 $ 1 1,500,000
$15,000,000 $15,00,000
$70,000,000 $70,000,000
$50,000,000 $50,000,000
$9,335,000 $9,335,000
$6,305,00 $6,30S,üOO
$21,260,000 $21,260,000
$24,400,000 $24,400,000
$45,000,000 $45,000,000
$8,300,000 $8,3oo,nOO
$15,060,000 $15,060,000
$22,000,000 $22,000,000
$41,200,000 $41,200,000
$45,000,000 $45,000,000
$46,500,000 $46,500,000
$16,400,000 $16,400,000
$121,940,000 $121,940,00
$12,675,00 $12,675,00
$9,365,000 $9,365,000
$8,500,000 $8,500,000
$45,000,00 $45,000,00
$738,370,00
(h) Full description of the securities proposed to be issued, showing: kind and
nature of securities or liabilties; amount (face value and number of shares);
interest or dividend rate, if any; date of issue and date of maturity; and voting
privileges, if any.
Pollution Control Revenue Bonds will be issued by municipalities in an amount not
more than $450,345,000 in several series. Up to $300,345,000 wil be issued as Refunding
Bonds and up to $150,000,000 wil be issued as New Money Bonds (Refunding Bonds and
New Money Bonds wil collectively be referred to as "Bonds"). The proceeds from the sale
of the Bonds wil be loaned to the Company who wil be responsible to pay the principal and
interest on the Bonds. These Bonds wil either bea a fixed interest rate or a floating interest
rate. If these Bonds bear a fixed interest rate, the rate will be set at the time of issuance. If
these bonds bear a floating interest rate, the rate wil be set periodically based upon maret
conditions. The Company expects these bonds to be issued and the related agreements to be
executed from time-to-time. Dates of maturity wil be determined based upon an engineer's
certificate verifyng the economic life of the qualifying pollution control equipment and solid
and sewage waste facilities ("Qualifying Facilities").
While floating rate Bonds have a nominal long-term maturity, the obligations wil be
remarketed and bear interest at one or more frequencies, including, but not limited to, daily,
weekly, monthly, flexible or term periods. Because of the remarketing feature, combined
with the support of a letter of credit, investors are indifferent to the final maturty of the
instrent; as a result, the floating rate Bonds may be structured with the longest maturity
justified by the underlying assets being financed, while obtaining rates reflective of short
maturities.
The Company wil enter into an agreement with a remarketing agent who wil agi:
in advance to seek new purchasers for the floating rate Bonds on a best-effrts basis if
existing investors no longer wish to hold their bonds at the end of the interest peri. To
Page '8 - PacifiCorpFinancing Application June 2008
satisfy the investment criteria of potential purchasers, the Company expects to arge for a
letter of credit or insurance contract as a source of credit support and liquidity. For example,
a letter of credit wil provide amounts required to purchase tendered floating rate Bonds that
have not been successfully remarketed immediately, as well as amounts required for payment
of scheduled interest and principal at maturity or though acceleration. The floating rate
bonds not immediately remarketed may then be sold to other investors.
The floating rate Bonds' strcture may include the selection of one of several tax-
exempt market rate pricing modes, including pricing modes as short as daily an as long as
anually. The Bonds may also include an option to convert to a tenn mode in which the rate
is fixed for a certain period of time. The operation of those modes will be described in the
offcial statement for floating rate Bonds when filed as Exhibit J.
The pricing mode selection will depend upon a number of factors, including
expectations as to which mode offers the lowest relative rates at the time of issuance. Durng
the time the floating rate Bonds carr a floating rate, the Bonds would be prepayable at par
plus accrued interest at the end of any interest rate period.
Subject to market conditions, the Bonds may be issued at fixed interest rates. The
Company expects to pay interest on a semi-anual basis. The fixed rate Bonds may include
call provisions at fixed prices at future dates. To achieve lower borrowing costs, the
Company may purchase credit enhancement from insurance companes, which would give
the Bonds an AAA Aaa rating. The insurance companies may require the Company to
collateralize the Bonds with the Company's First Mortgage and Collateral Trust Bonds.
However, if the anticipated interest savings are not suffcient or the tenns relating -to th bond
insurance are considered to be unduly restrctive, the Company may choose not to obtain
insurance. In this situation, the Company may collateralize the Bonds with the Company's
P~e 9 - PacifiCorp Financing Application June 2Q08
First Mortgage and Collateral Trust Bonds in an aggregate principal amount not ex.ceeing
the principal amount of the Bonds, thereby providing the Bonds with a credit rating equal to
its senior debt (A-fA3). The Commission previously authorized the Company to incur the
lien of the PacifiCorp Mortgage in UF 3990, Order No. 88-1363.
(i) Description of the proposed transaction, including a statement of the reasonswhy it is desired to consummate the transaction and the anticipated effect
thereof. If the transaction is part of a general program, describe the program
and its relation to the proposed transaction. Such description shall include:
These borrowings wil be made in connection with the issuance of Bonds by the
Issuers to finance or refinance Qualifyng Facilties at one or more of the following plants:
Jim Bridger, Carbon, Cholla, Craig, Dave Johnston, Hayden, Hunter, Huntington, Naughton
and Wyodak ("Plants"). The Qualifyng Facilities consist principally of systems to remove
and dispose of pariculates and sulfur dioxide from flue gases and certin solid and sewage
wastes. Arizona, Colorado, Utah and Wyoming statutes and the Internal Revenue Code
permit local governental agencies to issue bonds, the interest on which is not subjet to
federal income taxation for most bondholders, for the purpose of the constrction of qualifie
pollution control equipment and solid and sewage waste facilties. The Issuer wil be asked
to adopt appropriate resolutions providing for the issuance of the appropriate series of the
Bonds.
In order to provide credit support for the Bonds, the Company could enter into
agreements with commercial banks or insurance companies. Additionally, th Company
could issue its First Mortgage and Collateral Trust Bonds as collateral for repayment of the
Bonds, either alone or in conjunction with bank or insurace company credit support.
Due to fecent market developments, there has been at time, a significant reduction in
market liquidity for certin insured variable rate Pollution Control Revenue Bonds and
interest fates on these bonds have risen. The Company is seking authority to refinance
Page W - PacifCorp Financing Application June 2008
existing series of insured varable rate pollution control bonds in the event that interest rates
do not return to more normal levels.
Additionally, the Company is requesting authority to refinan up to four series of
outstanding fixed rate Pollution Control Revenue Bonds issued to finance, or refinance, th
cost of certin pollution control, solid waste disposal and sewage facilities at the Company's
Hunter, Huntington, Naughton electric generating plants and the Cottonwood facility.
Although the cost to the Company of these bonds has not ben directly impacted by thse
recent market developments, the Company may be able to economically refinane these
obligations depending on levels of interest rates and maret conditions.
The Company expects any such refinancing wil achieve interet savings, including
the effect of the amortization of the redemption premium, if any, and the unamortized
issuance expenses on the Prior Bonds, as a result of th refinancings.
Further, the Company is undertking significant capital expenditures related to
pollution control and solid waste disposal facilties at certain electrc generatin plants. It
may be possible to finance a portion of these expenditure through new issuance of
Pollution Control Revenue Bonds resulting in interet rate savings as compard to other
financing alternatives. In order to complete a new issuance of Pollution Control R.evenue
Bonds it wil be necessar to obtain an allocation of the "volume cap") from th state in
which the respective Issuer is located. The Company's succes in obtaining suffcient volume
cap for New Money Bonds wil depend on the number of compeing applicants in each state.
The Company is requesting authority at this time in order to be able to proeed with a new
money financing should volume cap be available and a tax..xempt financing be cost
effective.
i The "volume cap" imposes an annual limit in each state, based upon the 1;täte 1'opulation.
P~ 11 - PacifiCorp Finaning Application June 2008
(A) Description of the proposed method of issuing and sellng the securities.
The Refunding Counties or the New Money Issuers (collectively, "Issuers") wil issue
the Bonds. The Bonds wil be issued pursuant to Indentures of Trust between the Issuers and
trstees. Pursuant to agreements between the Issuers and the Company, the proceeds frm the
sale of the Bonds, other than refudable accrued interest, wil be loaned to the Company to
finance or refinance the Facilties. Under the loan agrements, the Company wil be obligatd
to pay absolutely and unconditionally, to the extent suffcient funds are not already in the
possession of the trustee, the principal of, the interest on, and the premium (if any) on the
Bonds, as well as certain fees and expenses of the Issuers.
To achieve a lower cost of money, the Company may enter into reimbursement
agreements, guarantees, pledges, or other security agreements or arangements to assure
timely payment of amounts due in respect of the Bonds. For example, a letter of credit may
be added in order to support the Bonds. In connection with a letter of credit, the Company
would enter into a reimbursement agreement under which a ban would issue a letter of
credit to support payments in respect of the Bonds. Under the reimbursement agrement, the
Company would be required to reimburse each ban for any drawings uner its letter of
credit. Amounts advanced by a ban under a letter of credit ar expected to bear interet
based upon various short-term rates. The Company expects that any letter of credit ban wiU
have a long-term credit rating of not less than AA and a short-term rating of not less than A-
LIP-I. In the event a letter of credit is obtained, it is expected to have an initial term of at
least one year and may be extended by mutual consent of the bank and the Compay or
replaced by the Company with another lettr of credit or an alternative credit enhancement
arrangement.
The fees associated with the creit enhancement arangement are not expte to
exceed 0.75 percent per anum. The Company believes, and its experìeiwe in previous tax-
Page 12 - PadfiCorp Financing Appli'ation June 2008
exempt financings confirms, that the interest savings from enhancing the credit support for
the Bonds wil exceed the cost of the letter of credit or alternative credit arrgements; that
is, the effective cost of the Bonds wil be lowered by the credit enhancement arngements.
Over the life of the Bonds, it may be necessar or desirable to replace one or more
letters of credit or alternative credit enhancement arngements from time-to-time as, for
example, the credit ratings of the varous bans (and thus the Company's interest costs)
fluctuate or market rates for letters of credit change. The Company therefore requests
authority to substitute, as necessary or desirable from time to time, letters of credit or other
credit enhancement arangements for letters of credit or other credit enhanement
arangements then in effect with respect to the Bonds.
(B) Statement of whether such securities are to be issued pro rata to existing holdersof the Company's securities or issued pursuant to any preemptive right or in
connection with any liquidation or reorganization.
The Bonds wil not be issued pro rata to existing holders of the Company's securities
and wil not be issued pursuant to any preemptive rights or in connection with anyliquidation or reorganization. .
(C) Statement showing why it is in the Company's interest to issue securities in themanner proposed and the reason(s) why it selected the proposed method of sale.
See (n) (A)
(D) Statëment tbat exemption from the competitive bidding requirements of any
federal or other state regulatory body has or has not been requested or obtained,
and a copy of the action taken thereon when available.
The Company does not believe that the issuance of the Bonds is subject to the
competitive bidding requirements of federal or state regulatory bodies.
ü) Name and address of any person receiving or entitled to a fee for service (otherthan attorneys, accountants and similar technical servces) in connection with
the negotiation or consummation of the issuance or sale of securities, or for
services in securing underwriters, sellers or purchasers of securities, other than
fees included in any competitive bid; the amount of each such fee, and facts
showing the necessity for the services and that the fee does not exceed the
customary fee for such services in arm's length transactions and is reasonable in
the light of the cost of rendering the service, and any other relevant facts.
Page i 3 - PacifiC"Orp Financing Application June 2008
The Company and the Issuers wil negotiate the sale of the Bonds to undeters.
These underwters may also serve as remarketing agents for any floating rate bond. The
Issuers may receive an issuance fee paid up front and/or anually at an effective rate is not
expected to exceed O. I 25 percent per annum on the principal amount of the Bonds. The
Company wil also pay the expenses of the offering incured by the Issuers. The underwting
fee is not expected to exceed i .25 percent of the principal amount of the Bonds. Th anual
remarketing fee for variable fate bonds is not expected to exceed 0.125 percent of th
principal amount of the Bonds. The potential fees to the underwters andremarketing agents
are consistent with prevailing market usual and customary fees. These fees are reasonable
given the services provided by the underwters and remarketing agents. The undrwters
and remarketing agents wil be familar with the Company, its parent company and affliates
and their long-term financing needs. They wil be available for consultation on these matters
and wil assist the Company in evaluating market conditions and in formulating th exact
terms of the transactions.
(k) Statement showing both in total amount and per unit the price to the public,underwriting commissions and net proceeds to the Company.
ESTIMATED RESULTS OF THE OFFERING (I)
Total Percent of Total
Proceeds from Bonds $450,345,000 100.00%
Less:Underwters
Compensation (2)5,629,312 1.25%
Other Issuance Expenses 7,900,000 1.75%
Total Costs of the Financings $13.529.3 12 3.00%
(I) As the financings are special purpse financings, the interest on which is exempt from taxation 10 the hold, the proeds
may be used only 10 finance or refinance the Facilties
(2) Base upon a fixed rate oITering
Page 14 - PacifiCorp Financing Applkation June 2008
Other Issuance Expenses
Underwriters' Counsel Fees
$1,000
6,300,000
50,000
125,000
225,000
125,000
75,000
565,000
200,000
75,00
159,000
$7,900,000
Regulatory Agency Fees
Issuer Fees (I)
Trustee Fees
Company Counsel Fees
Bond Counsel Fees
Accountants' Fees
Credit Enhancement Fees (2)
Rating Agency Fees
Printing Fees
Miscellaneous
Total Other Expenses
(1) The Company may be required to pay an Issuer's fee to the Issuers to compensate them for providing the Comny the
opportnity to borrow the proces ofthe Bonds. The Company's past experiene indicates that some Issuers wil charg such a
fee. For purposes of this estimated expense, it is assumed that some Issuers wil require the Company to pay an Issuers Fee.
Issuer's Fee are not expected to exceed an effective cost of 0.125 percent per annum of the principal amount over the life of the
Bonds.
(2) Repreents estimated one-time upfront fees to letters of credit banks. Annual fee is not expete to exce Ø.75 percent per
annum.
(I) Purposes for which the securities are to be issued.
(A) Construction, completion, extension or improvement of facilties; description
of such facilties and the cost thereof.
(B) Reimbursement of the Company's trasur for expenditures against which
securties have not been issued; statement giving a general description of 'Such
expenditures, the amounts and accounts to which charged, the associated
credits, if any, and the periods during which the expenditures were made.
(C) Refunding or discharging of obligations; description of the obligations to be
refunded or discharged, including the character, principal amounts discount or
premium applicable thereto, date of issue and date of matuty, puroses to
which the proceeds were applied and all othr materal facts concerning such
obligations.
Page i 5 - PacifiCorp Financing Application June 2~
(D) Improvement or maintenance of service; description of the tye of
expenditures and the estimated cost in reasonable detaiL.
(m) Statement as to whether or not any application, regstration statement, etc., withrespect to the transaction or any part thereof, is required to be fied with any
federal or other state regulatory body.
In addition to this Application, the Company is filing an application with the Idaho
Public Utilties Commission and wil provide a notice to the Washington Utilties an
Trasporttion Commission prior to the Bonds being issued.
(n) Facts relied upon by the Company to show that the issue:
(A) Is for some lawful object within the corporate purposes ofthe Company.
As a public utilty, the Company is expected to acquire, constrct, improve, an
maintain suffcient utilty facilities to serve its customers adequately and reliably at
reasonable cost. The proposed arangements are par of an overall plan to finance the cost of
the Facilties taking into consideration prudent capital ratios, earnings coverage tests, maret
uncertainties and the relative merits of the varous tyes of securities th Company could sell
or other financing it could arange.
The proposed arrangements wil provide the Company access to funds in the
municipal, tax-exempt bond market which are believed to be less costly tha other mean of
financing the Facilties.
Given the current capita) structure and the condition of the securities' markets, the
Company believes that the proposed financing arangements constitute the finacing of
choice to fud the Facilties.
(B) Is compatible with the public interest.
See (n)(A).
(C) Is necessary or appropriate for or consistent with tbe properperformance by the Company of service as a utilty.
See (n)(A).
(D) Wil not impair the Company's abilty to perform utility servce.
Page ) 6 - PacifiCorp Financing Application June 2008
See (n)(A).
(E) Is reasonably necessary or appropriate for such purposes.
See (n)(A).
(F) If fied under ORS 757.495, is fair and reasonable and not contrary to thepublic interest.
The Company is not fiing this Application pursuant to DRS 757.495. Therefore,
(n)(F) is not applicable. The Company respectfully requests a waiver of this provision.
(0) Statement of all rigbts to be a corporation, franchises, permits and contracts forconsolidation, merger or lease included as assets of the Company or any
predecessor thereof, the amounts actually paid as consideration therefore,
respectively, and the facts relied upon to show the issuance of the securities for
wbich approval is requested wil not result in the capitalization of tbe rigbt to be
a corporation of or any franchise, permit or contract for consolidation, merger
or lease in excess of tbe amount (exclusive of any tax or annual charge) actually
paid as the consideration for such right, franchise, permit or contract.
(p) If fied under ORS 757.490, ORS 757.495:
The Company is not filing this Application pursuant to ORS 757.490 or ORS
757.495. Therefore, (p) is not applicable. The Company respectfully requests a waiver of this
provision.
II. Exhibits.
Exhibit Docket Exhibit Description
A UF 4193 A Third Restated Articles of Incorporation effective Novembe
20, 1996, as amended effective November 29, 1999
B UF 4237 A-2 A copy of the Bylaws with amendments to date.
C**Resolutions of the Board of Directors authorizing the propos
issuances
A copy of mortgage indenture, or other agreement under which
it is proposed to issue the securities, also a copy of any
mortgage, indenture, or other agreement securing 'Other funded
obligations of the Company.
D**
Pag 17 - PacifiCor Financing Application June 2008
E Balance Sheet, actual and pro forma, date Marh 31, 2008.
F A statement of all known contingent liabilties, except minor
items such as damage claims and similar items involving
relatively small amounts, as of the date of ths application.
G Income Statement, actual and pro forma, for the 12 months
ended March 31, 2008.
H Analysis of surplus for the period covered by the income
statements referred to in Exhibit G.
Copy of the proposed and of the publish invitation of
proposals for the purchase of underwting of the seurtie to
be issued; of each proposal received; and of each contract,
underwriting, and other arrgement entered into for the-saleor
marketing or the securities. When a contract or underwting is
not in final form so as to permit fiing, a preliminar draft or a
summary identifying paries thereto and setting forth theprincipal terms thereof, may be fied ending filing of
conformed copy in the form execute by final amendment to
the application.
J**
K** Copies of the stock certifcates, notes, or othr evidence of
indebtedness proposed to be issue.
M Map showing PacifiCorp service terrtories.
**Exhibit or supplement to the Exhbit is to be fied as soon as available.
III. Conclusion.
PacifiCorp respectfully requests that the Commission enter an order in this matte,
effective upon issuance, authorizing PacifiCorp to (i) borrow the procees of not more than
$300,345,000 of Pollution Control Revenue Refuding Bonds to be issued by the Countie 'Of
Emery, Utah, Carbon, Uta, Lincoln, Wyoming, Sweetwater, Wyoming, Converse,
Wyoming, and Moffat, Colorado, (2) borrow the proceds of not more than $150,000,000 of
Pollution Control Revenue Bonds to be issued by one or more 'Of the following Counties or
municipalities therein: Emery, Utah, Convers, Wyoming, Lincoln, Wyoming, Swetwater,
Wyoming, City of Gilette, Wyoming, Navajo County, Arizona and Itoutt County, Colorado,
(3) enter into such agreements or arrangements with the Refuing Counties and New
Pag 18 - PacifiCorp Financing App1ication June 208
Money Issuers and with other entities as may be reonably ne to effect the
borrowings and to provide credit enhancement for the Refunding Bonds and the New Money
Bonds, including the issuance of its First Mortgage and Collateral Trust Bonds as collateral,
and (4) replace or modify from time to time the credit enhancement arngements suppoing
the Refunding Bonds or the New Money Bonds.
DATED June 27, 2008.
By:J~N W4~
Bruce N. Wiliams
Vice President and Treasurr
PacifiCorp
Pag i 9 - paçjfiCorp Financing Application June 2008
PacifiCorp Financing Appiction June 208
EXHIBITE
EXBlTE
PAClFJ
PRO FOMA UNONSDATED BALANCE SHEET
MARCH 31, 20
ASSET TOTAL CORPRATI PROPOSED FINANC TOTAL PROFORMA
UTILIT PLANT
UTILITY PLANT 1101-106 114 16,710,813,210 16,710,813210
CONSTRUCTION WORK IN PROGRESS MOn 1,164,05 181 152225692 1 316279,873
TOTAL UTILIT PLANT 17,874,867,391 152225,692 18,027,093,08
ACCUM PROV FOR DEPR.AMORT.DEPL.ll08,110,111,1151 CR 6,744 457 194 6,744,457,194
UTILITY PlAT - NET 11,130410,197 152225,69 I 1,282,~5,88
OTHER PROPERTY AND INVESTMENTS
NONUTILIT PROPERTY 121\9,40,795 9407,795
ACCUM PROV FOR DEPRIAMORT OF NONUTILITY PROP 122 CR 1424,907 1424,907
INVSTMENT IN ACCOCIATED COMPANIES 123 8,122,014 8,122 014
INVESTMENT IN SUBSIDIARY COMPANIES 123.1\154,43,192 154,43192
OTHER INVESTMENTS 1124 84,05070 84,057,070
OTHER SPECIA FUNDS 128 8,99,972 8,99972
LONG-TERM PORTION OF DERIVATI INSTRUMENT ASSETS 1175 185 759,94 185759,94
TOTAL OTHER PROPERTY AND INVSTMENTS 44,35,082 0 44 3508
CURRENT AND ACCRUED ASSETS
CASH 131\21740,620 13,917312 7,8230
SPECIAL DEPOSITS 1132.134 2,935,410 2,93,410
'IRKING FUNDS /135 2.270 2270
TEMPORARY CASH INVSTMENTS 136 182,84,186 182,84,186
NOTES RECEIVABLE 141 241,393 241,393
CUSTOMER ACCOUNTS RECEIVA8LE 142 325 03 761 325,033,761
OTHER ACCOUNT RECEIVABLE 1431 15,99,091 15,99,091
ACCUMULATED PROV FOR UNCOLLECTIBLE ACCOUNTS 144 CR 808,98 80898
NOTES RECEIVABLE FROM ASSOCIATED COMPANIES 145 27,366,330 27388,33
ACCOUNTS RECEIVABLE FROM ASSOCIATED COMPANIES 146\12,766,039 127e03
FUEL STOCK 1151-152 104 127907 104,127,907
MATERIAS AND SUPPLIES 154.163\159,98,795 159,969795
PREPAYMENTS /165 6360,991 63,60 991
INTEREST AND DIVIDENDS RECEIVABLE 171 13,78794 13,787,94
RENTS RECEIVABLE 1172\3,03,43 3,03,432
ACCRUED UTILITY REVNUES 1173 172,31100 172,311,00
MISCELlNEOUS CURRENT AND ACCRUED ASSETS 1174 11,676,26 11,676,26
DERIVATIVE INSTRUMENT ASSETS 11751'38,709,391 38,709,391
LONG-TERM PORTION OF DERIVATIVE INSTRUMENT ASSETS 1175 CR 185 759,94 185 759,94
DERIVATIVE INSTRUMENT ASSETS - HEDGES 1178 0 0
TOTAL CURRENT AND ACCRUED ASSETS 1,31333,903 13917,312 1 29 416,591
DEFERRED DEBITS
UNAMORTIZED DEBT EXENSE 1811 2656100 8,05184 34,615,94
EXTRAORDINARY PROPERTY LOSSES 182.11 0 0
UNRECOVERED PLANT AND REGULATORY STUDY COSTS 1182.2\14,301577 14,301577
OTHER REGULATORY ASSETS 182.3\1, 194,507,381 1,194507,381
PRELIMINRY SURVE &lNSTGAnON CHAGES 1831 0 0
CLERING ACCOUNTS 1184 0 0
TEMPORARY FACILITES 11851 101,56 101,$2
MISCELLANEOUS DEFERRED DEBITS 1186 64,629,458 64,6245
RESEARCH DEVELOPMENT DEMONSTRATION EXPENDITURES 188\0 0
UNAMORTIZD LOSS ON REACQUIRED DEBT 189 19,631,127 5,005,373 24,6350
ACCUMULATED DEFERRED INCOME TAXES /190 46,945252 46994 25
TOTAL DEFERRED DEBITS 1,789,68,457 13,057217 1 80 737,674
TOTAL ASSETS 14,68,782 639 151,365,597 1483,148,236
se PACI1COS 2007 ÆRC FOR NO. I AND 2OQI FEJC FORM 3-Q FOil TH NOTES TO TH FINANCIAL STATES ElITE
PAOE I OF2
EXHIBITE
PAClF1P
PRO FORMA UNCONLIDATED BANCE SHEET
MARCH 31, 20
LIABILmES AND STOCKHOLDER EQUITY TOTAL CORPORnoN PROPOSED FINANCING TOTAL PRFOA
PROPREITARY CAPITAL
COMMON STOCK ISSUED 201 3,17,94,89,00 3417945,89
PREFERRED STOCK ISSUED 204\41,46 30.00 41,46,30
COMMON STOCK LIAILIT FOR CONVRSION /203 0.00 0
PREMIUM ON CAPITAL STOCK /207 0.00 0
OTHER PAID-IN CAPITAL 20211\427,06,95.00 427,0695
INSTALLMENTS RECEIVED ON CAPITAL STOCK /212 0.00 0
CAPITAL STOCK EXPENSE 214\DR 41,288,207.00 41,288,207
RETAINED EARNINGS 215215.1 216\1,33 633,36.00 58,757 1,34.222,123
UNAPPROPRIATED UNDISTRIBUTED SUBSIDIAY EARINGS 216.1 i 6,796,764.00 6,796,764
REACQUIRED CAPITAL STOCK/217 0.00 0
ACCUMULATED OTHER COMPREHENSIVE INCOME 219 4,190,741.00 14190741
TOTAL PROPREITARY CAPITAL 5,187 424 33.00 588,757 5.188 013,091
lONGTERM DEBT
BONDS (2211 5 123205,00.00 1500000 5,273,205.00
POLLUTION CONTROL FUNDS ON DEPOSIT IMH TRUSTEE 221.4, 5 0.00 0 0
ADVANCES FROM ASSOCIATED COMPANIES /223 0.00 0
OTHER LONG.TERM DEBT /224 0.00 0
UNAMORTIZED PREMIUM ON LONG.TERM DEBT/225 40,320.00 40,320
UNAORTIZED DISCOUNT ON LONG- TERM DEBT 22\DR 5,88,083.00 7416,754 5,44532
TOTAL LONG-TERM DEBT 5,117,383237.00 150,416,754 5267799991
OTHR NONCURRENT LIABILITIES
OBLIGATIONS UNDER CAPITAL LEASES 227\47,53,817.00 47,53,817
ACCUMULATED PROVISION FOR PROPERTY INSURANCE /228.11 0.00 0
ACCUMULATED PROVISION FOR INJURIES & DAMGES 228.21 7,244,573.00 7.244573
ACCUMULATED PROVISION FOR PENSIONS & BENEFITS /228.3\271822,781.00 271,822781
ACCUMULATED MISCELLAEOUS OPERATING PROVISIONS 1228.37,50,082.00 37,50,08
ACCUMULATED PROVISION FOR RATE REFUNDS 229\0.00 0
LONG-TERM PORTION OF DERIVATIV INSTRUMENT LIAILITIES 1244 595,281 828.00 595281,828
ASSET RETIREMENT OBLIGATION 1230 74,92 102.00 74,922,102
TOTAL OTHER NONCURRENT LIABILITIES 1,03,310,183.00 0 1 03 310,183
CURRENT AND ACCRUED LIABILITES
NOTES PAYABLE 231\000 0
ACCOUNTS PAYABLE /232 456 120 010.00 456120010
NOTES PAYABLE TO ASSOCIATED COMPANIES 2331 0.00 0
ACCOUNTS PAYABLE TO ASSOCIATED COMPANIES /234 13,264,131.00 1326,131
CUSTOMER DEPOSITS (235 21 743 502.00 21,743,502
TAXES ACCRUED 1236 57,815,132.00 3608 58,175218
INTEREST ACCRUED /237 109.591,168.00 109,591,168
DMDENDS DECLARED /238 520,947.00 520,947
MATURED LONG- TERM DEBT /239 0.00 0
MATURED INTEREST /240 0.00 0
TAX cotECTIO PAYA8Ef2411 11.175872.00 11175,872
MISCELLAEOUS CURRENT AND ACCRUED LIABILITES 242\75,405 379.00 75,40,379
OBLIGATIONS UNDER CAPITAL LEASES /243 1,469,512.00 1469,512
DERIVATIVE INSTRUMENT LIABILITIES 244 77836,335.00 778,365,335
CURRENT PORTION OF DERIVATIVE INSTRUMENT LIAILITES 244 DR 595,281,828.00 595281828
DERIVATIVE INSTRUMENT LIAILITIES. HEDGES 2451-0.00 0
TOTAL CURRENT AND ACCRUED LIABILITIES 930189,160.00 36,08 930,549,246
DEFERRED CREDITS
CUSTOMER ADVANCES FOR CONSTRUCTIONI252 2098107.00 20,98,107
OTHER DEFERRED CREDITS 253 55 482,370.00 55482370
OTHER REGULATORY LIAILITIES /254\75,407,967.00 75,407,967
ACCUMULATED DEFERRED INVESTMENT TAX CREDITS 255 53,047,575.00 53,047675
UNAMORTIZED GAIN ON REACQUIRED DEBT 257\0.00 0
ACCUM DEFERRED INCOME TAXES - ACCEL AMORTIZTN 281 0.00 0
ACCUM DEFERRED INCOME TAXES-OTHER PROPERTY (282 1,878,36 201.00 1,878,36 201
ACCUMULATED DEFERRED INCOME TAXES-DTHERI2831 330,193,50.00 33,193,50
TOTAL DEFERREO CREDITS 2,413475,725.00 0 2,413,475,725
TOTAL LIAILITIES AND OTHER CREDITS 14,682782639 151,365,597 14,83 146,236
SEE PAClFICOll 201 F.ERC FORM NO. i AND 2008/Q1 FERC FOR 3-Q FOR TI NOTE TO TI FINNC.IAL STAlE
EXITE
PAG2OF2
PacifiCorp
Pro Forma Refunding of insured variable rate peRBs
Pro Forma Journal Entries for the 12 Months Ended March 31,2008
Unamortized Debt Expense 181 5,n4.957Cash 131
Issuance expenses incurr In connectin with th $216,470,00 refunding of PCRBs.
Unamortized Loss on Reaquired Debt 189 2,814,762Unamortized Debt Expense 181
To trnsfer unamortzed debt issuance expenses associated wi the retire bonds to
unamortized lens on recquire debt.Cash 131 3,008.933Interest on Long-Term Debt 427/216
Interest savings on $216,470,000 of debt for twlve mont, at an assumed saving rate of 1.39%.
Interest on Long-Term Debt
Cash
Lettr of Creit fee, at an assumed rate of O. 75"1.
427/216
131
1,623,525
Amortization of Debt Expense 428/216 401,039Unamortized Debt Expense 181
Amortzation of issuance expense for twelve months for refunding bonds at th assumed weighted average
remaining life of th refundd bonds of 14.4 yelS.
Amortization of Loss on Reacquired Debt 428.1/216 202,893
Amortization of Debt Discount and Expense 428/216
Reelass of twelve months of amortzation for the unamortzed issuance expense associated wi the
refunde bonds now ~cognized as lens on reacquIred det.
Income Taxes - Federal
Income Taxes - State
Taxes Accrued
Net tax effec of above interest expense amount
409/216
409/216
236
328.878
44,690
Pro Forma Assumptions:
Term
1) Maturity will be determined base upon an engineer's certificate veriing the economic life of the qualifying
faciltis. For purposes of this pro forma the maturity of the refunding bonds is assumed to be the same as the
refunded bonds.
Interest Rate
2) The interest rate on the refunding bonds will vary depending upon the pricing mode sele in marketing the bond.
Pricng modes may include one or more of the following options: daily. weekly. term or fixed rate. For purpses
of this pro forma the interest rate savings was based on a comparison of rates since 1211/07 on insure
daily mode programs V$ existing daily mode programs with letters of creit.
Issuanc Fees
3a) The underwriting fe is not expected to exceed 1.25 percent of the principal amount of th refunding bonds. The
annual remarketing fee is not expected to exceed 0.125 percent of the princial amount of the refunding bond.
b) The Company may be required to pay an Issuer's fee to the Counties to compensate the Countis for proviing th
Company the opportunity to issue the refunding bonds. Not all Counties have historically diargd such a fee and
for purposes of this pro forma. it is assumed that two of the Counties represente will require th'Company to pay an
Issuer's Fee. Issuer's Fees are not expected to exceed an effive cost of 0.125 percent per annum of the princial
amount over the life of the refunding bonds.
5.774,957
2.814.762
3.008.933
1,623,525
401,039
202,893
373,5'8
PacifiCorp
Pro Forma Refunding of insured variable rate peRBs
c) Estimated Other Expenses are as follows:
Regulatory Agenc Fees
Issuer Fees (b)
Trustee Fees
Company Counsel Fees
Bond Counsel Fees
Underwriters' Counsel Fees
Accuntants Fees
Credit Enhancement Fees
Rating Agency Fees
Printing Fees
Miscellaneous
481
2,300,000
24,034
60,084
108,152
60,084
36,051
271,582
96.135
36,051
76,428
3,069,082
Income Tax Rate
4) Effective federal income tax rate of 33.41% and effctive state tax rate of 4.54%.
PacifiCorp
Pro Forma Refunding of fixed rate peRBs
Pro Forma Journal Entries for the 12 Months Ended March 31, 2008
126,750
2,341,201
Unamortized Loss on Reacquired Debt 189Unamortized Debt Expense 181Cash 131
Call preium and issuance expenses incurr In connection wih the $83,875,00 refunding of PCRBs.
Unamortized Loss on Reaquired Debt 189 2,071 ;590Unamortized Debt Expense 181
Unamortized Debt Discount 226
To trnsfer unamonlzed debt discount and issuance expenses associated wi the retire bo to
unamonlzed loss on reacquire debt.Cash 131 545,188Interest on Long-Term Debt 427/216
Interest savings on $83,875,000 of debt for twelve monts, at assumed ne weighted Issue rate of 5.07%.
7,72.9
142,756
Amortization of Loss on Reacquired Debt 428.1/216Amortization of Debt Expense 428/216
Unamortized Loss on Reacquired Debt 189Unamortized Debt Expense 181
Amonlzation of call premium and issuance expenses for refundng bonds for twlve month at the assumed
weighted average remaing life of the refunde bonds of 16.4 yers.
2,467,951
1,654,836
41'6,754
545,188
7,729
142,7'
Amortization of Loss on Reacquired Debt 428.1/216 125.385Amortization of Debt Discount and Expense 428/216 125,385
Reclass of twelve months of amortization for the unamorzed debt discount and Issuance expense associate wi the
refunded bonds now reognized as lo on required debt.
Income Taxes - Federal
Income Taxes - State
Taxes Accrued
Net ta effect of above interest expee amounts
409/216
409/216
236
131.870
17,920
Pro Form Assumptions:
nm
1) Maturity wil be determined based upon an engineer's certifcate verifing the economic life of the qualifing
facilities. For purposes of this pro forma the maturity of the refunding bonds is assume to be the same as the
refunded bonds.
Interest Rate
2) The interest rate on the refunding bonds wil vary depending upon the pncing mod sele in markting the bons.
Pncing modes may include one or more of the following options: daily, weekly, term or fixe rate. For purpse
of this pro forma a fixed rate mode was selected.
Issuance Fees
3a) The underwriting fee is not expected to exceed 1.25 percnt of the pnncipal amount of the refunding bonds.
b) The Company may be required to pay an Issuer's fee to the Countis to compensate the Countie for providing the
Company the opportnity to issue the refunding bonds. Not all Counties have histonclly charg such a fe but
for purposes of this pro forma. it is assume that the two Countis represented wil reuir th Company to pay an
Issuer's Fee. Issuer's Fees are not expeed to exce an effecive cost of 0.125 percent per annum of the pnncipl
amount over the lif of the refunding bonds.
149,790
PacifiCorp
Pro Forma Refunding of fixed rate peRBs
c) Estimated Other Expenses are as follows:
Regulatory Agency Fees
Issuer Fees (b)
Trustee Fees
Company Counsel Fees
Bond Counsel Fees
Underwriters' Counsel Fees
Accuntants Fees
Rating Agency Fees
Printing Fees
Miscellaneous
186
1.100.00
9.312
23,281
41,905
23,281
13,96
37,249
13,96
29,613
1,292,763
Income Tax Rate
4) Effective feeral income tax rate of 33.41 % and efftie state tax rate of 4.54%.
PacifiCorp
Pro Forma Issuance of new money PCRBs
Pro Forma Journal Entries for the 12 Months Ended March 31,2008
Construction Fund on Deposit with Trustee 221Unamortized Debt Expense 181Bonds 221
Procees of issuing pro forma $150,000,00 in PCRBs.
Construction Work In Progress 107
Construction Fund on Deposit with Trustee 221
Proee of issuance used to finance qualifyng pr forma pollution contrl facilits.
Interest on Long-Term Debt 427/216Cash 131
Intere due on pro foa bod Issuance at 5.07% for twelve monUi.
Construction Work In Progress 107
AFUDC - borrowed funds 432/216
Capitalized interest from increased CWiP (AFUDC rate assume at new bond issuance rate).
Amortization of Debt Expense 428/216Unamortized Debt Expense 181
Amortization of debt expense for twelve months for pro forma bo Issuance with 30 yer term.
Taxes Accrued
Income Taxes - Federal
Income Taxes - State
Net tax effect of above Interest expense amount.
236
409/216
409/216
144,880,263
5,119,737
150,000,000
144,880,263
144,880,263
7,605,000
7,605,00
7,345,429
7,345,429
170,658
170,658
1'63,272
143,740
19,532
Pro Form Assumptions:
Term
1) Maturity wil be determined based upon an engineer's certcate veriing th ecnomic lif of the qualifing
facilties. For purpses of this pro form the matunty of th bonds is assumed to be 30 years.
Interest Rate
2) The interest rate on the bonds will vary depending upon the pncing mode select in marketing the bonds.
Pricing modes may include one or more of the following options: daily, weekly, term or fied rate. For purposes
of this pro forma a fixed rate mode was selected.
Issuance Fees
3a) The undeiwriting fe is not expected to exced 1.25 percent of the pnncipal amount of the bonds.
b) The Company may be required to pay an Issuer's fe to the Counti to compensate the Counties for providing the
Company the opportunity to issue the bonds. Not all Counties have historically charg such a fe but
for purposes of this pro forma, it is assumed that all Countis wil require the Company to pay an Issuer's Fee.
Issuer's Fees are not expected to exceed an effecte cost of 0.125 percent per annum of the pnncpal amount over
the life of the bonds.
PacifiCorp
Pro Forma Issuance of new money peRBs
c) Estimated Other Expenses are as follows:
Regulatory Agency Fees
Issuer Fees (b)
Trustee Fee
Company Counsel Fees
Bond Counsel Fee
Underwriters' Counsel Fees
Accountants Fees
Rating Agency Fees
Printing Fees
Miscellaneous
333
2,900,00
16,654
41,635
74,943
41,635
24,981
66,616
24,981
52,959
3,244,737
Income Tax Rate
4) Effectve federal incoe tax rate of 33.41% and effctive state ta rate of 4.54%.
PacifiCor Financing Application June 2008
EXHIBITF
(JS) Contingencies
Legal Matters
PacifiCorp is part to a variety of legal actions arising out of the norml corse of busines. Plaintiff ocasionally se
punitive or exemplar damages. PacifiCoip does not believe that such norml and routine litigation will have a materal
effect On its consolidated finacial results. PacifiCorp is also involved in oth kinds of lega actions, some of which
asser or may asse claim or seek to impoe fines and penalties in substatial amounts and ar descbe below.
In Febru 2007, the Sierr Club and the Wyoming Outdoor Council file a compliant against PacifiCorp in th feder
distrct cour in Cheyenne, Wyoming, alleging violations of the Wyoming state opacity stdards at PacifCorp's Jim
Bridger plant in Wyoming. Under Wyoming state requiremets, which are par of the Jim Bridger plant's Title V peit
and ar enforceable by private citizens under the federal Clean Air Act, a potential sourc of pollutants such as a 'C1~
fired generating facilty must meet minimum standards for opacity, which is a meaurment of light that is 'Obsred in
the flue of a generating facilty. Th complaint alleges thousands of violations of assert six-minute compliance periods
and seeks an injunction ordering the Jim Bridger plant's compliance with opacity limits, civil penalties of $32,500 per
day per violation, and the plaintiffs' costs of litigation. The court grated a motion to bifurcte the tral into sete
liabilty and remedy phases. A five-ay tral on the liabilty phas is scheduled to begin on April 21, 2008. Th rey-
phase trail has not yet been set. PacifiCoip believes it has a numbe of defenses to the claims. PaciftCorp intends to
vigorously oppose the lawsuit but cannot predict its outcome at this time. PacifiCorp has already committed to invest at
least $812 milion in pollution control equipment at its generating facilities, including the Jim Brier plant. This
commitment is expected to significantly reduce system-wide emissions, including emissions at th Jim Bridger plant.
Environmental Matters
PacifiCoip is subject to numerous environmental laws, including the fedral Clean Air Act, related air quality standar
promulgated by the Environmental Protection Agency an various state air 'quality laws; the Endanere Speie Act,
particularly as it relates to certin endangered species of fish; the Comprehesive Environmta Response,
Compensation and Liabilty Act, and similar state laws relating to environmntal cleanups; th Resour Conseation
and Recovery Act and similar state laws relating to the storage an handling of haiadous materals; and the Clen
Water Act, and similar state laws relating to water quality. These laws have the potial for impating PacifiCorp's
operations. Specifically, the Clean Air Act wil likely continue to impact th operations of PacifiCorp's generating
facilties and wil likely reuire PacifiCorp 10 reduce emissions from those facilties through the installation of additional
or improved emission controls, the purchase of additional emission aIJowanees, or some combination thereof. As of
December 3 i, 2007, PacifiCoip's environmental contingencies principally consist of air quality matter. Pending or
proposed air regulations would, if enacted, require PacifiCorp to reuce its electricity plant emissions of sulfur dioxide,
nitrogen oxide and other pollutants at its generting plants below currnt levels. PacifiCorp believes it is in material
compliance with current environmental requirements.
PacifiCorp's policy is to accrue environmental cleanup-related costs of a non-capital nature when those costs are
believed to be probable and can be reasonably estimated. The quantification of environmental exposures is based on
assessments of many factors, including changing laws and regulations, advancements in environmental technologies, the
quality of infonnalion available related to specific sites, the assessment stage of each site investigation, preliminary
findings and the length of time involved in remediation or settlement, PacifiCorp's proportionate share and any coverage
provided by insurance policies. Remediation costs that are fixed and detenninable have been discounted to their preent
value using credit-adjusted, risk-fre discount rates based on the expeted future annual borrwing costs of PacifiCorp.
The liability recorded was $29 milion at December 3 i, 2007 and $40 milion at Deember 3 i, 200 and is included in
Deferred credits - Other in the Consolidated Balance Sheets. The December 3 i, 2007 recorded liabilty included
$IS milion of discounted liabilities. Had none of the liabilities included in the $29 milion balanc recrdd at
Decembe 31,2007 been discounted, the total would have bee $32 milion. The expeted undiscounted paymets.for
each of the years ending December 3 i, 200S through 20 i 2 and thereafter are as follows: $9 milion in 2008, $3 milion
in 200, $2 milion in 2010, $2 milion in 201 i, $1 mi)ion in 2012 and SiS mi)ion thereafter.
It is possible that future findings or changes in estimates could require that additional amounts be acced. Should
current circumstances change, it is possible that PacifiCorp could incur an additional undiscounted obligation of up to
approximately $)1 milion relating to existing sites. However, management believes that completion or resolution of
these matters wi) have no material adverse effect on PacifiCorp's consolidated financial position, reults of opertions
or cash flows.
Hydroelectric Relicensing
PacifiCoip's hydroelectrc portfolio consists of 47 plants with an aggregate plant net owned capacity of 1,158 MW. The
FERC regulates 9S% of the net capacity of this portfolio through 16 individual licenses. Severl of PacifiCorp's
hydroelectric projects are in some stage of relicensing with the FERC. Hydroelectrc relicensing and th related
environmental compliance requirements and litigation are subject to uncertainties. PacifiCorp expets that future costs
relating to these mallers may be significant and wil consist primaily of additional relicensing costs, operations and
maintenance expense, and capital expenditures. Electricity generation reductions may result from the additional
environmental requirements. PacifiCorp had incurred $89 milion and $79 milion in costs as of December 3 I, 2007 and
2006, respectively, for ongoing hydroelectric relicensing, which are reflected in Construction work-in-progres in the
Consolidated Balance Sheets.
1n February 2004, PacifiCorp fied with the FERC a final application for a new license to oprate the 169-MW
(nameplate rating) Klamath hydroelectric project in anticipation of the Marh 2006 expiration of the existing lice.
PacifiCorp is currently operating under an annual license issued by the FERC and expets to continue to operate undr
annual licenses until the new operating license is issued. As part of the relicensing proces, the United State
Departments of lntenor and Commerce fied proposed licensing tenns and conditions with the FEC in March 200,
which proposed that PacifiCorp construct upstream and downstream fish pasge facilties at the Klamth hydroletrc
project's four mainstem dams. In April 2006, PacifiCorp fied alternatives to the federal ageries' proposal an
requested an administrative hearing to chaiienge some of the federal agencies' factual assumptions supporting thir
proposal for the construction of the fish passage facilities. A hearing was held in August 200 before an administrtive
law judge. The administrative law judge issued a ruling in September 2006 generHy supporting the fedral agncies'
factual assumptions. In January 2007, the United States Departments of Interior and Commerce filed modified tenns and
conditions consistent with the March 2006 filings and rejected the alternatives proposed by PacifiCorp. PacifiCorp is
prepared to meet and implement the federal agencies' tenns and conditions as part of the project's relicensing. However,
PacifiCorp expects to continue in settlement discussions with various parties in the Klamath Basin area who have
intervened with the FERC licensing proceeding to try to achieve a mutuaiiy acceptable outcome for the project.
Also, as part of the relicensing process, the FERC is required to perfonn an environmental review. In Septeber 200,
the FERC issued its draft environmental impact statement on the Klamath hydroelectric project license. PacifiCorp filed
comments on the draft statement by the close of the public comment period on December I, 2006. Subsequently, in
November 2007, the FERC issued its final environmental impact statement. The United States Fish and Wildlife Service
and the National Marine Fisheries Service issued final biological opinions in December 2007 analyzing the hydrolectric
project's impact on endangered species under the proposed new FERC license. The United States Fish and Wildlife
Service asserts the hydroelectric project is 1:urrently not covered by previously issued biological opinions, and that
consultation under the Endangered Species Act is required by the issuance of annual license renewals. PacifiCorp
disputes these assertions, and believes federal case law is clear that consultation on annual FERC licenses is not
required. PacifiCorp wil need to obtain water quality certifications from Oregon and California pnor to the FERC
issuing a final license. PacifiCorp currently has applications pending before each state.
In the relicensing of the Klamath hydroelectnc project, PacifiCorp had incurred $48 milion and $42 millon in costs at
December 3 I, 2007 and 2006, respectively, which are reflected in Constrction work-in-progress in the Consolidated
Balance Sheets. While the costs of implementing new license provisions cannot be determined until such time as a new
license is issued, such costs could be matenal.
FERCJssues
California Refund Case
In June 2007, the FERC approved PacifiCorp's settlement and release of claims agreemt ("Settlement") with Pacific
Gas and Electric Company, Souther California Edison Company, San Diego Gas & Electric Company, the People of
the State of California, ex rei' Edmund G. Brown Jr., Attorney Generl, th California Elecricity Oversight Boa, an
the California Public Utilties Commission (collectively, the "Californa Parties"), certin of which purchas eoeri) in
the Califoria Independent System Opertor ("iSO") and the California Power Exchange ("PX") markets during pat
periods of high energy pnces in 200 and 2001. The Settlement, which was executed by PacifiCorp in April 2007,
settles claims brought by the California Parties against PacifiCorp for refunds and remedies in numeous related
proceedings (together, the "FERC Proceedings"), as well as certn potential civil claim, arsing from events and
transactions in Wester United States energy markets during the penod January 200 thugh June 2001 (the "Refud
Period''). Under the Settlement, PacifiCorp made cash payments to escrows controlled by the California Parties in the
amount of $ i 6 milion in April 2007, and upon FERC approval of the agreement in June 2007, PacifiCorp allowed th
PX to release an additional $12 milion to such escrows, which represented PacifiCorp's estimated unpaid receivable
from the transactions in the PX and iSO markets during the Refund Penod, plus interest. The monies held in escrow are
for distribution to buyers from the iSO and PX markets that purchased power during the Refud Penod. The agement
provides for the release of claims by the California Parties (as well as additional parties that join in the Settlement)
against PacifiCorp for refunds, disgorgement of profits, or other monetary or non-monetar remedie in the FERC
Proceedings, and provides a mutual releae of claims for civil damages and equitable relief.
Northwest Refund Case
In June 2003, the FERC terminated its proceeding relating to the possibility of requinng refunds for wholesale spot-
market bilateral sales in the Pacific Norhwest between December 200 and Jun 2001. Th FERC oonclude that
ordering refunds would not be an appropriate resolution of the matter. In November 2003, the FERC issue its final
order denying rehearing. Several market participants fied petitions in the United States Court of Appls for the Ninth
Circuit (the "Ninth Circuit") for review of the FERC's final order. In August 2007, the Ninth Circuit issued its order on
this appel, concluding that the FERC failed to adequately explain how it considered or examined new evidee
showing intentional market manipulation in California and its potential ties to the Pacific Nortwest and that the F£RC
should not have excluded from the Pacific Nortwest refund proceeding purchases of energy made by the California
Energy Resources Scheduling ("CERS") division in the Pacific Nortwest spot market. The Ninth Circit remanded the
case to the FERC to (i) address the new market manipulation evidence in detail and account for it in any future ordrs
regarding the award or denial of refunds in the proceedings, (ii) include sales to CERS in its analysis, and (iii) furtr
consider its refund decision in light of related, intervening opinions of the court. The Ninth Circuit offered no opinion on
the FERC's findings based on the record established by the administrative law judge and did not rule on the merits of the
FERC's November 2003 decision to deny refunds. Due to the remand, PacifiCorp cannot predict the impact of this
ruling at this time.
PacifiCorp Finandng Applicatio June 20
EXHIBITG
ÐHI8TGPÀFlP
PRO FORMA UNCOSOTE STATEMENT OF INCOM
12 MONTH ENDE MARCa1, 20
TOTAL COPORATI PROSED FINANCNG TOTAL PROFMA
UTLITY OPERATING INCOME
OPERATING REVNUES 4,358 751,88 435,751,889
OPERATION AND MANTENACE EXPENSE
OPERATION 2,499,477,709 2499477709
MAINTENANCE 370,20571 37020,571
TOTAL OPERATION AND MAINTNACE EXPENSE 2,86 678 280 0 2,869,878,280
DEPRECIATION 413,667,104 413667,104
DEPRECIATION EXPENSE FOR ASSET RETIREMENT COSTS 0 0
AMRTIZTION 63,969,101 63,96,101
TAXES OTHER THN INCOME TAXES 102,5099 102,5099
CURRENT INCOME TAXES 90,90,322 90,90,322
PROVISION FOR DEFERRED INCOME TAXES 122756,874 122756,874
INVSTMENT TAX CREDIT ADJUSTMENTS - NET (4,875,90 (4,875,90 .
GAINS FROM DISPOSITON OF UTILITY PLA CR 0 0
LOSSES FROM DISPOSITON OF UTILITY PLAT 0 0
ACCRETION EXPENSE 0 0
GAINS FROM DISPOSITION OF ALLOWANCES CR 12,34,99 12340,99
OTHER UTILIT OPERATING INCOME - STEAM HTG 0 0
UTILITY OPERATING INCOME 712,479,121 0 712.479,121
OTHER INCOME AND DEDUCTIONS
OTHER INCOME
INCOME FROM MERCHANDISING t22776 (227765
INCOME FROM NONUTILIT OPERATIONS 150,022 150,022
NONOPERATIN RENTAL INCOME 64194 64194
EQUITY IN EANINGS OF SUBSIDIAIES (90,275 190,275
INTEREST AND DIVIDEND INCOME 138933 13,89933
ALLOW FOR FUNDS USED DURING CONSTRUCTION 43,26,280 43,263,280
MISCELLANEOUS NONOPERATING INCOME 145,08,481 145,08,481
GAIN ON DISPOSITION OF PROPERTY 1,938,413 1,93413
TOTAL OTHER INCOME 203,286,68 0 203,26,68
OTHER INCOME DEDUCTIONS
LOSS ON DISPOSITION OF PROPERTY 1,762,139 1762,139
MISCELLAEOUS AMORTIZATION 1,12186 1,121,86
MISCELLAEOUS INCOME DEDUCTIONS 150797,108 150,797,108
TOTAL OTHER INCOME DEDUCTIONS 153,68,912 0 153,68,912
TAXES APPLIC TO OTHER INCOME & DEDUCTIONS
TAXS OTHER THA INCOME TAXES 216657 216,657
INCOME TAXS 24,776,742 38,08 25,136,628
DEFERRED INCOME TAXS 3,635,138 (3,635138
INVSTMENT TAX CREDITS 1784,427 11,784,427
TOTAL TAXS APPLIC TO OTHER INC & DED 19,573,83 36,08 19,933,920
NET OTHER INCOME AND DEDUCTIONS 3001193 36,08 29,651,852
INCOME BEFORE INTEREST CHARGES 742,491,059 36,08 742,130,973
INTEREST CHARGES
INTREST ON LONG- TERM DEBT 291,762,816 5674,40 297457020
AMORTIZATION OF DEBT DISCOUNT AND EXPENSE 29830 38175 3,371,478
AMORTIZATION OF LOSS ON REACQUIRED DEBT 4,633,178 33,007 4,969,185
AMORTIZATION OF PREMIUM ON DEBT (2,718 12718
AMORTIZATION OF GAIN ON REACQUIRED DEBT 35,1041 135104
INTEREST ON DEBT TO ASSOCIATED COMPANIES 0 0
OTHER INTEREST EXPENSE 25,614,121 25,614,121
ALLOW FOR BRD FUNDS USED DURING CONSTR 29,625,725 7345,429 (36,971,154
NET INTEREST CHARGES 295,351,671 194,84 294,402628
INCOME BEFORE EXTRAORD. ITEMS 447,139,38 58,757 447,728,145
EXTRAORDINAY ITEMS - NET OF INCOME TAX
INCOME TAX ON CUM. EFFECT OF CHANGE IN ACCT. PRINC 0 0
CUMULATIVE EFFECT OF CHANGE IN ACCT. PRINCIPLE 0 0
NET INCOME 447,139,38 588,757 447,728,145
SEE PACIFICOIU 207FERC FORM NO.1 AND 2008J1 FERC FORM 3-Q FOR TH NOS'r TH FIAHAL STATES EXlBIT G
PAæ IOF I
PocifiCorp FiBancing Application June 200
EXHIBITB
EXHlBlH
PACIRCORP
PRO FORMA UNCONSOIDATED STATEMENT OF RETAINED EARNINGS
12 MONTHS ENDED MARCH 31, 208
TOTAL CORPRA1l0N PROPOED FINANCING TOTAL PRFORMA
RETAINED EARNINGS 215,215.1,216 216.1
BAlNCE AT BEGINNING OF PERIOD 901374.532 901374,532
NET INCOME 447,139,38 58,757 447728145
1,34 513,92 58.757 1.349,102.677
DIVIDENDS DECLARED
PREFERRED STOCK 2,083,790 208.790
COMMON STOCK 0 0
BALACE AT END OF PERIOD 1,34,43,130 588757 1,347,018,887
SEE PACIFICRPS 2007 FERC FORM NO. I AN 2008J1 PEC FOR l-Q FOR TH NOTES TO TH FINANCIAL STATE
:ElOBI H
PAGE 10FI
PacifCorp Financlo Application June 208
EXHIBITM
MONTANA
ii'~
NEVADA
-?f'
COLORADO
CALIFORNIA
ARIZONA
N.EW MEXICO
Exhibit D-2
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
ROCKY MOUNTAIN POWER for
authority to (1) borrow the proceeds of
not more than $450,345,000 of Pollution
Control Revenue Bonds, (2) enter into
such agreements or arrangements as may
be reasonably necessary to effect the
borrowings and to provide credit
enhancement for the Bonds, including the
issuance of First Mortgage and Collateral
Trust Bonds, and (3) replace or modify
from time to time the credit enhancement
arrangements supporting the Bonds.
)
)
)
)
)
)
)
)
)
)
CASE NO. PAC-E-08-_
ORDER NO.
On June ,2008, Rocky Mountain Power (Company) filed an Application that requested
authority to: (1) borrow the proceeds of not more than $300,345,000 of Pollution Control
Revenue Refunding Bonds ("Refunding Bonds") to be issued by the Counties of Emery, Utah,
Carbon, Utah, Lincoln, Wyoming, Sweetwater, Wyoming, Converse, Wyoming, and Moffat,
Colorado ("Refunding Counties"), (2) borrow the proceeds of not more than $150,000,000 of
Pollution Control Revenue Bonds ("New Money Bonds") to be issued by one or more of the
following Counties or municipalities: Emery, Utah, Converse, Wyoming, Lincoln, Wyoming,
Sweetwater, Wyoming, City of Gilette, Wyoming, Navajo County, Arizona and Routt County,
Colorado ("New Money Issuers"), (3) enter into such agreements or arangements with the
Refunding Counties and New Money Issuers and with other entities as may be reasonably
necessar to effect the borrowings and to provide credit enhancement for the Refunding Bonds
and the New Money Bonds, including the issuance of the Company's First Mortgage and
Collateral Trust Bonds as collateral, and (4) replace or modify from time-to-time the credit
enhancement arrangements supporting the Refunding Bonds 'Or the New Money Bonds.
These borrowings wil be in connection with the financing, or refinancing, of the cost of
certain pollution control, solid waste disposal and sewage facilities at the Company's electric
generating plants including Jim Bridger, Carbon, Cholla, Craig, Dave Johnston, Hayden, Hunter,
Huntington, Naughton and Wyodak.
After reviewing the Application, the Commssion 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 corpration,
and changing the state of incorporation of PacifiCorp 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.
Pollution Control Revenue Bonds wil be issued by municipalities in an amount not more
than $450,345,000 in several series. Up to $300,345,000 wil be issued as Refunding Bonds and
up to $150,000,00 wil be issued as New Money Bonds (Refunding Bonds and New Money
Bonds wil collectively be referred to as "Bonds"). The proceeds from the sale of the Bonds wil
be loaned to the Company who wil be responsible to pay the principal and interest on the Bonds.
These Bonds wil either bear a fixed interest rate or a floating interest rate. If these Bonds bear a
fixed interest rate, the rate wil be set at the time of issuance. If these bonds bear a floating
interest rate, the rate wil be set periodically based upon market conditions. The Company
expects these bonds to be issued and the related agreements to be executed from time-to-time.
Dates of maturity wil be determined based upon an engineer's certificate verifying the economic
life of the qualifying pollution control equipment and solid and sewage waste facilties
("Qualifying Facilities").
While floating rate Bonds have a nominal long-term maturity, the obligations wil be
remarketed and bear interest at one or more frequencies, including, but not limited to, daily,
weekly, monthly, flexible or term periods. Because of the remarketing feature, combined with
the support of a letter of credit, investors are indifferent to the final maturity of the instrument; as
a result, the floating rate Bonds may be structured with the longest maturity justified by the
underlying assets being financed, while obtaining rates reflective of short maturities.
The Company wil enter into an agreement with a remarketing agent who wil agree in
advance to seek new purchasers for the floating rate Bonds on a best-efforts basis if existing
investors no longer wish to hold their bonds at the end of the interest period. To satisfy the
investment criteria of potential purchasers, the Company expects to arrange for a letter of credit
or insurance contract as a source of credit support and liquidity. For example, a letter of credit
wil provide amounts required to purchase tendered floating rate Bonds that have not been
successfully remarketed immediately, as well as amounts required for payment of scheduled
interest and principal at maturity or through acceleration. The floating rate bonds not
immediately remarketed may then be sold to other investors.
The floating rate Bonds' structure may include the selection of one of several tax-exempt
market rate pricing modes, including pricing modes as short as daily and as long as annually. The
Bonds may also include an option to convert to a term mode in which the rate is fixed for a
certain period of time. The operation of those modes wil be described in the official statement
for floating rate Bonds.
The pricing mode selection wil depend upon a number of factors, including expectations
as to which mode offers the lowest relative rates at the time of issuance. During the time the
floating rate Bonds car a floating rate, the Bonds would be prepay able at par plus accrued
interest at the end of any interest rate period.
Subject to market conditions, the Bonds may be issued at fixed interest rates. The
Company expects to pay interest on a semi-annual basis. The fixed rate Bonds may include call
provisions at fixed prices at future dates. To achieve lower borrowing costs, the Company may
purchase credit enhancement from insurance companies, which would give the Bonds an
AAN Aaa rating. The insurance companies may require the Company to collateralize the Bonds
with the Company's First Mortgage and Collateral Trust Bonds. However, if the anticipated
interest savings are not sufficient or the terms relating to the bond insurance are considered to be
unduly restrictive, the Company may choose not to. obtain insurance. In this situation, the
Company may collateralize the Bonds with the Company's First Mortgage and Collateral Trust
Bonds in an aggregate principal amount not exceeding the principal amount of the Bonds,
thereby providing the Bonds with a credit rating equal to its senior debt (A-fA3). The
Commission previously authorized the Company to incur the lien of the PacifiCorp Mortgage in
Case No. U-1046-158, Order No. 22157.
The net proceeds of the proposed financings wil be used for one or more of the utilty
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.
The proposed financings are par of an overall plan to finance the cost of the Company's
facilities takng into consideration prudent capital ratios, earings coverage tests and market
uncertainties as to the relative merits of the varous 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 corpration within
the definition of Idaho Code § 61-119 and is a public utility within the definition of Idaho
Code § 61-129.
The Idaho Public Utilties Commssion 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 of the Commssion's Rules of Procedure, IDAPA 31.01.01.141-150.
The method of issuance is proper.
The general purposes to which the proceeds wil be put are lawful purposes under the
Public Utilties 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 wil be put is neither a
finding of fact nor a conclusion of law that any paricular 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
determnation/approval of the type of financing or the related costs for ratemaking purposes,
which determnation the Commssion expressly reserves until the appropriate proceeding.
The Application should be approved.
ORDER
IT IS THEREFORE ORDERED that the Company's Application for authority to: (1)
borrow the proceeds of not more than $300,345,000 of Pollution Control Revenue Refunding
Bonds ("Refunding Bonds") to be issued by the Counties of Emery, Utah, Carbon, Utah,
Lincoln, Wyoming, Sweetwater, Wyoming, Converse, Wyoming, and Moffat, Colorado
("Refunding Counties"), (2) borrow the proceeds of not more than $150,000,00 of Pollution
Control Revenue Bonds ("New Money Bonds") to be issued by one or more of the following
Counties or municipalities: Emery, Utah, Converse, Wyoming, Lincoln, Wyoming, Sweetwater,
Wyoming, City of Gilette, Wyoming, Navajo County, Arizona and Routt County, Colorado
("New Money Issuers"), (3) enter into such agreements or arangements with the Refunding
Counties and New Money Issuers and with other entities as may be reasonably necessary to
..
effect the borrowings and to provide credit enhancement for the Refunding Bonds and the New
Money Bonds, including the issuance of the Company's First Mortgage and Collateral Trust
Bonds as collateral, and (4) replace or modify from time-to-time the credit enhancement
arrangements supporting the Refunding Bonds or the New Money Bonds.
These borrowings wil be in connection with the financing, or refinancing, of the cost of
certain pollution control, solid waste disposal and sewage facilties at the Company's electric
generating plants including Jim Bridger, Carbon, Cholla, Craig, Dave Johnston, Hayden, Hunter,
Huntington, Naughton and Wyodak.
IT is FURTHER ORDERED that the Company shall fie the following as they become
available:
a. The "Report of Securities Issued" required by 18 C.F.R. § 34.10.
b. Verified copies of any agreement entered into in connection with the
issuance of Debt pursuant to this order.
c. 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
determnation of costs, or any other matter that may come before this Commssion 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 ~ 1,
Idaho Code.
IT is FURTHER ORDERED that the Company notify the Commssion as soon as
possible prior to the issuance with as much information as possible on the issue. The notice may
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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 ,2008.
JIM KEMPTON, Commssioner
MACK A. REDFORD, Commssioner
MARSHA H. SMITH, Commssioner
ATTEST:
JEAN JEWELL
Commssion Secretar