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Home My WebLink About20100528Williams Direct.pdfBEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE ) APPLICATION OF ROCKY ) MOUNTAIN POWER FOR ) APPROVAL OF CHANGES TO ITS ) ELECTRIC SERVICE SCHEDULES ) AND A PRICE INCREASE OF $27.7 ) MILLION, OR APPROXIMATELY )13.7 PERCENT ) CASE NO. PAC.E.I0.07 Direct Testimony of Bruce N. Williams ROCKY MOUNTAIN POWER RECEIVF 2010 HAY 28 PH 12: D UTli CASE NO. PAC.E.I0.07 May 2010 1 Q.Please state your name, business address and present position with Rocky 2 Mountain Power (the Company), a division of PacifCorp. 3 A.My name is Bruce N.Wiliams. My business address is 825 NE Multnomah, 4 Suite 1900, Portland, Oregon 97232. I am the Vice President and Treasurer of 5 PacifiCorp. 6 Qualifications 7 Q.Briefly describe your educational and professional background. 8 A.I received a Bachelor of Science degree in Business Administration with a 9 concentration in Finance from Oregon State University in June 1980. I also 10 received the Charered Financial Analyst designation upon passing the 11 examination in September 1986. I have been employed by the Company for 24 12 years. My business experience has included financing of the Company's electrc 13 operations and non-utilty activities, responsibilty for the investment 14 management of the Company's qualified and non-qualified retirement plan assets, 15 and investor relations. 16 Q.What are your responsibilties as Vice President and Treasurer? 17 A.I am responsible for the Company's treasur, credit risk maagement, pension 18 and other investment management activities. In this proceeding, I am responsible 19 for the preparation of Rocky Mountain Power's embedded cost of debt and 20 preferred equity and the testimony related to capital strctue. 21 Purpose of Testimony 22 Q.What is the purpose of your testimony in this proceeding? 23 A.I wil first present a financing overview of the Company. Next, I wil discuss the Wiliams, Direct - 1 Rocky Mountain Power 1 2 3 4 5 6 7 Q. 8 A. 9 10 11 12 13 Q. 14 A. 15 16 17 18 19 20 21 22 planned amounts of common equity, debt, and preferred stock to be included in the Company's planned capital strcture. I wil then analyze the embedded cost of debt and preferred stock supporting Rocky Mountain Power's electrc operations in the state of Idaho for the test period. This analysis includes the use of forward interest rates, historical relationship of securtY trading patterns, and known and measurable changes to the debt and preferred stock portfolios. What time period does your analyses cover? The test period in this proceeding is the twelve months ending December 31, 2009, with known and measurable changes though December 2010. The capital structure and cost of debt and preferred stock applied in this case were determned using an average of the five quarer ending balances from the quarer ending December 31,2009, through the quarer ending December 31,2010. What is the overall cost of capital that you are proposing in this proceeding? Rocky Mountain Power is proposing an overall cost of capital of 8.36 percent. This cost includes the Return on Equity recommendation from Dr. Samuel C. Hadaway and the following capital strcture and costs: Component Long Term Debt Preferred Stock Common Stock Equity Total Percent of Total 47.6% 0.3% 52.1% 100.0% % Cost 5.92% 5.41% 10.60% Weighted Average 2.82% 0.02% 5.52% 8.36% 23 Financing Overview 24 Q. 25 A. 26 Please explain the Company's requirements to generate new capitaL. As described in Company witness Mr. A. Richard Walje's diect testimony, the Company continues to make ongoing investment in infrastructure including Wiliams, Direct - 2 Rocky Mountan Power 1 2 3 4 5 6 7 8 9 10 11 12 13 Q. 14 A. 15 16 17 18 19 20 21 22 23 investment in generation, transmission and distrbution. These and future capital additions and investments wil require the Company to raise funds by issuing significant amounts of new long-term debt in the capital markets and obtaining new capital contrbutions from its parent company. Funds wil also be made available by the continued absence of any dividends or distributions by PacifiCorp to its parent company durng the period. Since the acquisition of PacifiCorp by MidAmerican Energy Holdings Company ("MEHC") in March 2006, there have been no common stock dividends or distributions, PacifiCorp has received $990 millon in additional cash equity contributions from MEHC, and $1.7 billon of earings have been retained in PacifiCorp. These actions help ensure thatPacifiCorp remains well-positioned to support the additional investments that have been and wil continue to be made in the system. How does the Company finance its electric utilty operations? The Company finances its regulated utilty operations utilizing a blend of debt and common equity capital. Immediately prior to and durg periods of significant capital expenditures such as the curent situation, the Company's requirement for more common .equity as a component of the capital strcture wil increase. This provides more flexibility regarding the typ.e and timing of debt financing, better access to the capital markets, a more competitive cost of debt, and over the long- run, more stable credit ratings; all of which assist in financing such expenditures. In fact, the Company's equity component is expected to remain in excess of 50 percent for the next several years to facilitate the financings necessar for the investments in system reliabilty and infrastructure. Wiliams, Direct - 3 Rocky Mountan Power 1 2 3 4 5 Q. 6 A. In addition, all else being equal, the Company wil need to have a greater common equity component to offset varous adjustments that rating agencies make to the debt component of the Company's published financial statements. I wil discuss these adjustments in greater detail later in this testimony. Do you believe the proposed capital structure is a reasonable capita structure for the purpose of setting rates in this Cocket? Yes. While the capital strcture wil var due to financing activity and capital expenditures, I believe the proposed capital strcture to be a fai and reasonable reflection of the strctue. 7 Q. What types of securities does the Company employ in the long-term debt and 8 9 10 11 12 13 14 15 .16 17 18 19 20 preferred stock components of its capital structure? A.The Company relies on a mix of first mortgage bonds, other secured debt, tax- exempt debt, unsecured debt and preferred stock to meet its long-term financing requirements. These securities employ varous matuties in order to provide flexibility and mitigate refinancing risks. The Company has completed the majority of its long-term financing utilizing secured first mortgage bonds issued under the Mortgage Indentue dated Januar 9, 1989. Exhibit NO.5 shows that, for the twelve months ending D.ecember 31,2010, the Company is projected to have approximately $5.6 bilion of first mortgage bonds outstanding, with an average cost of 6.38 percent. Presently, all outstanding first mortgage bonds bear interest at fixed rates. Proceeds from the issuance of the first mortgage bonds (and other financing instruments) are used to finance the combined utilty operation. Wiliams, Direct - 4 Rocky Mountain Power 1 Another important source of fmancing has been the tax-exempt financing 2 associated with certain qualifying equipment at power generation plants. Und.er 3 arangements with local counties and other tax -exempt entities, the Company 4 borrows the proceeds and guarantees the repayment of the long-term debt in order 5 to tae advantage of their ta-exempt status in financings. Durng the twelve 6 months ending Decmber 31,2010, the Company's tax-exempt portolio is 7 projected to be $738 millon in principal amount with an average cost of 2.44 8 percent (including the cost of issuance and credit enhancement.) 9 Planned Capital Structure 10 Q. 11 A. 12 13 14 15 16 Q. 17 18 A. 19 20 21 22 23 How did you determine the capital structure proposed in this proceeding? The Company used an average of the five quarer ending balances durng the time period ending December 31, 2010, to calculate its proposed capital strcture. This approach smoothes volatilty in the capital strctue which wil fluctuate as the Company expends capital, issues or retires debt, retains earings and receives infusions of new equity. How does the Company determine the amount of common equity, long-term debt, and preferred stock to be included in its planned capital structure? As a regulated utilty, Rocky Mountain Power has a duty and an obligation to provide safe, adequate and reliable service to customers while balancing cost and risk. Significant capital expenditures for new generation, transmission and distribution plant investnient, operating and maintenance costs for new and existing utilty plant assets, and clean air investments are required for Rocky Mountain Power to fulfil this obligation. Through its planning process, the Wiliams, Dirct - 5 Rocky Mountain Power 1 2 3 4 Q. 5 6 A. 7 8 9 10 Q. 11 A. 12 13 14 15 16 17 18 19 Q. 20 A. 21 22 23 Company determned the amount of necessar new financing including capital contributions needed to support these activities and calculated the required equity and debt ratios required to maintain continued access to the financial markets. Has the Company previously received capita contributions from MEHC and does it expect future contributions as well? Yes. Since the acquisition by MEHC on March 21,2006, the Company has received a total of $990 millon of cash capital contributions from MEHC via its direct parent company, PPW Holdings, LLC. The Company expects additional cash equity contributions of $100 millon before the end of 2010. Why is there the need for additional amounts of equity? The Company's capital strcture reflects the cost increases described in this case, including investment in infrastructure and power costs. These cost increases, coupled with the credit rating agencies' expectations for credit metrics and balance sheet strength, mean that the Company cannot finance itself solely with new debt. Additional equity is required along with improved business results and other considerations to support PacifiCorp's current senior secured 'A' credit rating from Standard & Poor's ("S&P"), 'A2' rating from Moody's Investors Service ("Moody's"), and 'A-'from Fitch Ratings. Please describe the changes to the amount of outstanding long-term debt. During the period ending December 31,2010, the balance of the outstanding long-term debt wil change though maturities and principal amortization. Based upon the long-term debt series outstanding at December 31,2009, I have calculated the reduction to the outstanding balances for matuties and principal Wiliams, Direct - 6 Rocky Mountain Power 1 2 3 Q. 4 5 A. 6 7 8 Q. 9 A. 10 11 12 13 14 Q. 15 A. 16 17 18 19 20 21 22 23 amortizations totaling $14.6 millon that are scheduled to occur durng the period ending December 31,2010. Is the proposed capital structure consistent with the Company's current credit rating? Yes. This capital structure is intended to enable the Company to deliver its required capital expenditures while achieving credit ratios that are expected to support the continuance of PacifiCorp' s current credit ratings. How does maintenance of a strong credit rating benefit customers? The credit rating given to a utilty has a direct impact on the price that a utilty pays to attract the capital necessar to support its current and future operating needs. A solid credit rating directly benefits customers by reducing immediate and futue borrowing costs related to the financing needed to support regulatory operations. Are there other benefits? Yes. During periods of capital market disruptions, higher-rated companies are more likely to have ongoing, uninterrpted access to capital and access at lower costs. This is not always the case with lower-rated companies, which find themselves either unable to secure capital or able to secure capital only on unfavorable terms and conditions durng such periods. Inaddition, higher-rated companies have greater access to the long-term markets for power purchases and sales. Such access provides these companies with more alternatives when attempting to meet the curent and futue load requirements of their customers. Wiliams, Direct - 7 Rocky Mountain Power 1 2 3 4 Q. 5 A. 6 7 8 Q. 9 A. 10 11 12 13 14 15 16 17 18 19 20 21 22 Finally, a company with strong ratings wil often avoid having to meet costly collateral requirements that are typically imposed on lower-rated companies when securig power in these markets. Did S&P and Moody's change the Company's credit ratings in 2O9? Yes. S&P upgraded PacifiCorp's senior secured debt to 'A' while it downgraded PacifiCorp's short-term debt rating to 'A-2'. Simlarly, Moody's upgraded PacifiCorp's senior secured debt to 'A2'. Please explain these rating changes. The upgrade to PacifiCorp's senior secured debt merely reflects a change in S&P's methodology rather than a change in PacifiCorp's credit quality or financial metrics. S&P changed its approach to estimating the amount of collateral available to senior secured debt holders in the event of a default by PacifiCorp on its first mortgage bonds. S&P continues to be cautious about PacifiCorp' s cr.et metrcs and has stated it views the Company's credit metrcs on a stand-alone basis as more consistent with a 'BBB' rating. Indeed, in downgrading the Company's short- term debt rating, S&P cited a need to take a firer view on linkng PacifiCorp short-term ratings to stand-alone credit quality. S&P sustained its current' A-' corporate credit rating based on its expectation "that management wil achieve cash flow metrics more consistent with an 'A' rating over the next several years."i Moody's upgrade of PacifiCorp' s senior debt was par of an industr-wide action in which the majority of senior secured debt ratings of investment-grade i Standar & Poor's RatingsDirect April 1, 2009, and reiterated in the RatingsDirect of Apri 30, 2010. Willams, Direct - 8 Rocky Mountain Power 1 2 3 4 Q. 5 6 A. 7 8 9 Q. 10 11 12 A. 13 14 15 16 17 18 19 20 21 regulated utilities were upgraded by one leveL. The action was a result of an analysis of the history of regulated utility defaults and was not specific or unique to the Company. Do these rating agency actions change the Company's need to add equity to its capital structure and improve itsrmancial metrics? No. Without continued improvement in financial metrics along with supportive state regulatory outcomes in rate cases, the ratings direction is likely to be lower rather than higher forPacifiCorp. Do S&P's recent credit reports on PacifCorp underline S&P's expectation that PacifiCorp improve its financial metrics in order to maintain its current credit rating? Yes. In its latest report, S&P made several references to the need for PacifiCorp to improve its stand-alone financial metrics, noting that PacifiCorp had an "aggressive financial risk profile that reflects a large capital program and the need to shore up cash flow metrcs." S&P also stated that "(G)iven the recent tuoil in both the liquidity and capital markets, we have taken a firer view on the need to link the PacifiCorp short-term ratings to its stand-alone credit quality, which supports an 'A-2' short-term rating.,,2S&P also reiterated its credit views, including that "supportive rate case outcomes reman key to maintaining and improving upon the Company's financial performance.',3 Exhibit No.6 is the Apri 30, 2010 S&P RatingsDirect publication. 2 Standar & Poor's RatingsDirect April 30, 2010 3 ¡d. Wiliams, Direct - 9 Rocky Mountain Power 1 Purchase Power Agreements 2 Q. 3 4 A. 5 6 7 8 9 10 11 12 Q. 13 A. 14 15 16 17 18 19 20 Q. 21 22 A. 23 Is the Company subject to rating agency debt imputation associated with Purchase Power Agreements? Yes. Rating agencies and financial analysts consider purchase power agreements ("PPAs") to be debt-lie and wil impute debt and related interest when calculating financial ratios. For example, S&P wil adjust the Company's published financial results and impute debt balances and interest expense resulting from PPAs when assessing creditwortiness. It does so in order to obtain a more accurate assessment of a company's financial commtments and fixed payments. Exhibit NO.7 is the May 7, 2007, publication by S&P detailing its view of the debt aspects of PPAs. How does this impact the Company? In its April 30, 2010, RatingsDirect report cited above, S&P stated that approximately $395 millon of additional debt and related interest expense were added to the Company's debt and coverage tests solely as a result ofPPAs. There were also other adjustments made by S&P that together resulted in total imputations of approximately $1 bilion of debt and $78 millon of interest being added into the calculation of PacifiCorp' s credit ratios. . These adjustments are detailed by S&P in its April 30, 2010, Ratings Direct report (Exhibit No.6) How would the inclusion of this PPA-related debt affect the Company's capital structure? Negatively. By including the imputed debt resulting from PPAs and these other adjustments, the Company's capital structue has a lower equity component as a Wiliams, Direct - 10 Rocky Mountain Power 1 corollar to the higher debt component, lower coverage ratios and reduced 2 financial flexibility than what might otherwise appear to be the case from a 3. review of the book value capital structue. For example, if one were to add the $ 1 4 bilion of debt adjustments that S&P makes to the Company's capital structue in 5 this case, the resulting common equity percentage would decline from 52.1 6 percent to 48.5 percent. The table below shows the proposed capital strcture and 7 how the S&P adjustments impact the components when viewed by the rating 8 agency. Illustration of Rating Agency Adjustments to PacifiCorp's Capital Structure ($ in milions) Book Values I Rating Agency Adjusted Book Values Ratios Adjustments I Ratios Long-Term Debt 6,369/47.6%$1,000 7,369/51.2% Preferred Stock 41/0.3%0 41/0.3% Common Equity 6,984/52.1 %0 6,984/48.5% Totals $13,394/100.0%$1,000 $14,394/100.0% 9 Financing Cost Calculations 10 Q.How did you calculate the Company's embedded costs of long-term debt and 11 preferred stock? 12 A.I calculated the embedded costs of debt and preferred stock using the 13 methodology relied upon in the Company's previous rate cases in Idaho and other 14 jurisdictions. 15 Q.Please explain the cost of debt calculation. 16 A.I calculated the cost of debt by issue, based on each debt series' interest rate and 17 net proceeds at the issuance date, to produce a bond yield to matuty for each Wiliams, Direct - 11 Rocky Mountain Power 1 2 3 4 5 6 7 8 9 10 Q. 11 A. 12 13 14 15 16 17 18 19 20 Q. 21 22 A. 23 series of debt. It should be noted that in the event a bond was issued to refinance a higher cost bond, the pre-tax premium and unamortized costs, if any, associated with the refinancing were subtracted from the net proceeds of the bonds that were issued. The bond yield was then multiplied by the principal amount outstanding of each debt issue, resulting in an annualized cost of each debt issue. Aggregating the annual cost of each debt issue produces the total annualized cost of debt. Dividing the total annualized cost of debt by the net proceeds of debt outstanding produces the weighted average cost for all debt issues. This is the Company's embedded cost of long-term debt. How did you calculate the embedded cost of preferred stock? The embedded cost of preferred stock was calculated by first determing the cost of money for each issue. This is the result of dividing the annual dividend rate by the per share net proceeds for each series of preferred stock. The cost associated with each series was multiplied by the total par or stated value outstanding for each issue to yield the annualized cost for each issue. The sum of annualized costs for each issue produces the total annual cost for the entire preferred stock portfolio. I then divided the total annual cost by the total amount of preferred stock outstanding to produce the weighted average cost of all issues. This is the Company's embedded cost of preferred stock. A portion of the Company's debt portfolio bears variable coupon rates. What is the basis for the projecte interest rates used by the Company? The majority of the Company's varable rate debt is in the form of tax-exempt debt. Exhibit NO.8 shows that these securties on average had been trading at Wiliams, Direct - 12 Rocky Mountain Power 1 approximately 91 percent of the 30-day LIBOR (London Inter Ban Offer Rate) 2 for the period Januar 2000 through December 2009. Therefore, the Company 3 has applied a factor of 91 percent to the forward 30-day LffOR Rates durng the 4 period ending December 31, 2010, and then added the respective credit 5 enhancement and remaketing fees for each floating rate tax-exempt bond. Credit 6 enhancement and remarketing fees are included in the interest component because 7 these are costs which contribute directly to the interest rate on the securities and 8 are recognized in interest expense. 9 Embedded Cost of Long- Term Debt 10 Q.What is the Company's embedded cost of long-term debt? 11 A.The embedded cost of long-term debt is 5.92 percent as shown in Exhibit No.5. 12 Embedded Cost of Preferred Stock 13 Q. What is the Company's embedded cost of preferred stock? 14 A. Exhibit No. 9 shows the embedded cost of preferred stock at December 31, 15 2010, to be 5.41 percent 16 Q.Does this conclude your testimony? 17 A.Yes. Wiliams, Direct - 13 Rocky Mountain Power Case No. PAC-E-I0-07 Exhibit NO.5 Witness: Bruce N. Wiliams BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ROCKY MOUNTAIN POWER Exhibit Accompanying Direct Testimony of Bruce N. Wiliams Cost of Long Term Debt Summar May 2010 LI E NO . 1 2 3 4 5 6 DE S R I O N AV E R A G E AM O U N T OU T S T A N D I N G . Su b t D t a l - P o l l u t i o n Co n t r o l R e v e n u e B o n d s s e c u d b y F M s Su b t D t a l - P o l l u t i o n C o n t r l R e v e n u e B o n d s To t a l P o l l u t i o n C o n t r o l R e v e n u e B o n d s $4 0 0 , 4 7 0 , 0 0 0 $3 3 7 , 9 0 0 , 0 0 0 $7 3 8 , 3 7 0 , 0 0 0 IS S U A N C E R E D E M O N N E T PR O C E D S A N N U A L DE B T I N T E R E S T A L L . I N O R I G L I N E EX P E S E S E X P E S E S T O CO M P A N S E R V I C E CO S T R A T E C O S T L I E N O . i ($ 5 9 , 3 0 1 , 7 7 7 ) ( $ 3 2 , 1 7 7 , 7 7 7 ) $ 5 , 5 3 9 , 5 7 3 , 0 4 6 $ 3 5 8 , 9 8 1 , 7 3 6 6 . 2 1 6 % 6 . 3 7 5 % 2 3 . 5 2 3 ($ 1 0 , 5 6 0 , 8 1 0 ) ( $ 9 , 5 5 0 , 1 9 4 ) $ 3 8 0 , 3 5 8 , 9 9 6 $ 1 2 , 2 9 7 , 5 4 4 2 . 7 7 3 % 3 . 0 7 1 % 2 8 . 0 4 ($ 4 , 2 9 4 , 2 3 2 ) ( $ 7 , 6 2 1 , 2 2 9 ) $ 3 2 5 , 9 8 4 , 5 3 9 $ 5 , 7 0 7 , 7 6 1 1 . 5 2 2 % 1 . 6 8 9 % 2 7 . 8 5 ($ 1 4 , 8 5 5 , 0 4 2 ) ( $ 1 7 , 1 7 1 , 4 2 3 ) $ 7 0 6 , 3 4 3 , 5 3 5 $ 1 8 , 0 0 5 , 3 0 5 2 . 2 0 1 % 2 . 4 3 9 % 2 7 . 9 6 ., ($ 4 9 , 3 4 9 , 2 0 0 ) $ 6 , 2 4 5 , 9 1 6 , 5 8 1 $ 3 7 6 , 9 8 7 , 0 4 1 5 . 7 5 1 % 5 . 9 1 9 % 2 4 . 0 8 ')10 __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - l _ _ To t a F i r s t M o r t g a g e B o n d s $5 , 6 3 1 , 0 5 2 , 6 0 0 78 T o t a C o s t o f L o n g T e r m D e b t $ 6 , 3 6 9 , 4 2 2 , 6 0 ( $ 7 4 , 1 5 6 , 8 1 8 ) ')10 " a v e r a g e o f t h e 5 q u a r t e r . e n d i n g b a l n c e s s p a n i n g t h e f i s c a y e a 1l _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ :: o m ; ; _. I I ) ( 0 :i 1 ß 2 : 0 ¡¡ z 2 : ~ '" - .. 0 z s : gi ~ ! = g i: ; i 0 1 : J £ Ç ) " U ê : Zm l l : J . ~ ~ " 1 :: o ~ o =6 : i æ= ~ . s . ~ 3 ( . '" Pa g e 2 0 1 3 ~~ - - - - - - - - - - - - - ~ - - - - - - - - - - - - - - - - - - - - - - __ _ _ ~ ! l ! ~ ~ £ ~ ~ ~ ~ _ _ PR l C l A L A M O u N T TO A L PE R $1 0 0 Li 1N R E S T iS S U A N C E MA T I R 1 OR l G OR l G i N A L AV E R A G E iS S U A N C E RE D E M P T I O N DO l l R PR l C l A L MO N E Y TO AN A L DE T Li NO . RA l E DE S C R i T I O N DA l E DA l E Li E iS S U E OU T T A N D G . EX E N S E S EX P E N S E S AM O U N AM O U N CO M P A N Y SE R V i C E C O S T NO . (a ) (h ) (c ) (d ) (e ) (g ) (h ) (i ) (j ) (k ) (1 ) (m ) (n ) 1 ¡ 1 2 t. 0 . Ø W ¡ M ¡ i j H ¡ i j ? ? ? ~ U U : : : : U U 2 ! 3 8.2 7 1 % C- D S e r i e s d u e t l O c l 2 0 1 0 04 1 1 5 1 9 2 10 1 0 1 1 1 0 18 $4 8 , 9 7 2 , 0 0 0 $3 , 8 0 3 , 2 0 0 $0 $0 $3 , 8 0 3 , 2 0 0 $1 0 0 . 0 0 0 8. 2 7 0 % $3 1 4 . 5 2 5 3 ¡ 4 7.9 7 8 % C- D S e r i e s d u e t l O c 1 2 0 1 1 04 / 1 5 1 9 2 10 / 0 1 / 1 1 19 $4 , 4 2 2 , 0 0 0 $7 1 6 . 8 0 0 $0 $0 $7 1 6 , 8 0 0 $1 0 0 . 0 0 0 7. 9 7 7 % $5 7 , 1 7 9 4 ¡ 5 8.4 9 3 % C- D S e r i e s d u e t l O c l 2 0 1 2 04 / 1 5 1 9 2 10 / 0 1 1 1 2 20 $1 9 , 7 7 2 , 0 0 0 $4 , 8 6 0 , 4 0 0 $0 $0 $4 , 8 6 0 , 4 0 0 $1 0 0 . 0 0 0 8. 4 9 2 % $4 1 2 , 7 4 5 5 ¡ 6 8.7 9 7 % C- D S e r i e s d u e t l O c i 2 0 1 3 04 / 1 5 1 9 2 10 / 0 1 1 1 20 $1 6 , 2 0 3 , 0 0 0 $5 , 2 0 1 , 4 0 0 $0 $0 $5 , 2 0 1 , 4 0 0 $1 0 0 . 0 0 0 8. 7 9 6 % $4 5 7 , 5 1 5 6 ¡ 7 8.7 3 4 % C- D S e r i e s d u e t l O c l 2 0 1 4 04 / 1 5 1 9 2 10 / 0 1 1 1 4 21 $2 8 , 2 1 8 , 0 0 0 $1 0 , 8 0 3 , 4 0 0 $0 $0 $1 0 , 8 0 3 , 4 0 0 $1 0 0 . 0 0 0 8. 7 3 3 % $9 4 3 , 4 6 1 7 ! 8 8.2 9 4 % C- D S e r i e s d u e t l O c l 2 0 1 5 04 / 1 5 1 9 2 10 / 0 1 / 1 5 21 $4 6 , 9 4 6 , 0 0 0 $2 0 , 1 6 0 , 4 0 0 $0 $0 $2 0 , 1 6 0 , 4 0 0 $1 0 0 . 0 0 8. 2 9 3 % $1 , 6 7 1 , 9 0 2 8 ¡ 9 8.6 3 5 % C- D S e r i e s d u e t l O c l 2 0 1 6 04 / 1 5 / 9 2 10 1 0 1 / 1 6 22 $1 8 , 7 5 0 , 0 0 0 $9 , 1 4 0 , 4 0 0 $0 $0 $9 , 1 4 0 , 4 0 0 $1 0 0 . 0 0 8. 6 3 4 % $7 8 9 . 1 8 2 9 ¡ 10 8.4 7 0 % C- D S e r i e s d u e t l O c 1 2 0 1 7 04 1 1 1 9 2 10 1 0 1 / 1 7 22 $1 9 , 6 0 9 , 0 0 0 $1 0 , 3 6 6 , 6 0 0 $0 $0 $1 0 , 3 6 6 . 6 0 0 $1 0 0 . 0 0 8. 4 6 9 % $8 7 7 , 9 4 7 10 ! 11 8. 4 9 3 % Su b t o t a . A m o r t i z i u g F M s 21 $6 5 , 0 5 2 , 6 0 0 $0 $0 $6 5 , 0 5 2 , 6 0 0 8. 4 9 2 % $5 , 5 2 4 , 4 5 6 11 ¡ 12 12 ¡ 13 6. 0 0 % Se r i s d u e N o v 2 0 1 1 11 / 2 1 1 0 1 11 1 5 / 1 1 10 $5 0 0 , 0 0 0 , 0 0 0 $5 0 0 , 0 0 0 , 0 0 0 ($ 5 , 3 3 8 , 8 4 9 ) $0 $4 9 4 , 6 6 1 . 1 5 1 $9 8 . 9 3 2 7. 0 5 1 % $3 5 , 2 5 5 , 0 0 0 13 i 14 5.4 5 0 % Se r i e s d u e S e p 2 0 1 3 09 / 0 8 / 0 3 09 1 1 5 1 1 3 10 $2 0 0 , 0 0 0 ; 0 0 0 $2 0 0 , 0 0 0 . 0 0 0 ($ 1 , 6 5 4 , 6 6 0 ) ($ 5 , 9 6 7 . 8 1 9 ) $1 9 2 , 3 7 7 , 5 2 1 $9 6 . 1 8 9 5. 9 6 0 % $1 1 , 9 2 0 , 0 0 0 14 ¡ 15 4.9 5 0 % Se r i e s d u e A u g 2 0 1 4 08 2 4 / 0 4 08 1 5 / 1 4 10 $2 0 0 , 0 0 0 , 0 0 0 $2 0 0 , 0 0 0 , 0 0 0 ($ 2 , 1 7 0 , 3 6 5 ) $0 $1 9 7 , 8 2 9 , 6 3 5 $9 8 . 9 1 5 5. 0 9 0 % $1 0 , 1 8 0 , 0 0 0 15 ¡ 16 7.7 0 0 % Se r i s d u e N o v 2 0 3 1 11 / 2 1 1 0 1 11 1 5 1 3 30 $3 0 0 , 0 0 0 , 0 0 0 $3 0 0 , 0 0 0 , 0 0 0 ($ 3 , 7 0 1 , 3 1 0 ) $0 $2 9 6 . 2 9 8 , 6 9 0 $9 8 . 7 6 6 7. 8 0 7 % $2 3 , 4 2 1 , 0 0 0 16 ¡ 17 5.9 0 0 % Se r i e s d u e A u g 2 0 3 4 08 / 2 4 / 0 4 08 1 1 5 1 3 4 30 $2 0 0 , 0 0 0 , 0 0 0 $2 0 0 , 0 0 0 , 0 0 0 ($ 2 , 6 1 4 , 3 6 5 ) $0 $1 9 7 . 3 8 5 , 6 3 5 $9 8 . 6 9 3 5. 9 9 4 % $ 1 1 , 9 8 8 , 0 0 0 17 ¡ 18 5.2 5 0 % Se r i e s d u e J u n 2 0 3 5 06 1 0 8 / 0 5 06 1 1 5 1 3 5 30 $3 0 0 , 0 0 0 , 0 0 0 $3 0 0 , 0 0 0 , 0 0 0 ($ 3 , 9 9 2 , 0 2 1 ) ($ 1 , 2 9 5 , 9 9 5 ) $2 9 4 . 7 1 1 , 9 8 4 $9 8 . 2 3 7 5. 3 6 9 % $1 6 , 1 0 7 , 0 0 0 18 ¡ 19 6.1 0 0 % Se r i e s d u e A u g 2 0 3 6 08 1 1 0 / 0 6 08 1 1 1 3 6 30 $3 5 0 , 0 0 0 , 0 0 0 $3 5 0 , 0 0 , 0 0 0 ($ 4 , 0 4 8 , 8 8 1 ) $0 $3 4 5 , 9 5 1 , 1 1 9 $9 8 . 8 4 3 6. 1 8 5 % $2 1 , 6 4 7 , 5 0 0 19 ¡ 20 5.7 5 0 % Se r i e s d u e A p r 2 0 3 7 03 1 1 4 / 0 7 04 1 0 1 1 3 7 30 $6 0 0 , 0 0 0 , 0 0 0 $6 0 0 , 0 0 0 , 0 0 0 ($ 6 1 3 , 2 1 6 ) $0 $5 9 9 . 3 8 6 , 7 8 4 $9 9 . 8 9 8 5. 7 5 7 % $3 4 . 5 4 2 , 0 0 0 20 ¡ 21 6.2 5 0 % Se r i e s d u e O c l 2 0 3 7 10 / 0 3 / 0 7 10 1 1 5 1 3 7 30 $6 0 0 , 0 0 0 , 0 0 0 $6 0 0 . 0 0 0 . 0 0 0 ($ 5 . 8 7 7 . 2 8 1 ) $0 $5 9 4 , 1 2 2 , 7 1 9 $9 9 . 0 2 0 6. 3 2 3 % $3 7 . 9 3 8 , 0 0 0 21 ¡ 22 5.6 5 0 % Se r i s d u e J u 1 2 0 1 8 07 / 1 7 1 0 8 07 / 1 5 / 1 8 10 $5 0 0 , 0 0 0 , 0 0 0 $5 0 0 , 0 0 0 , 0 0 0 ($ 3 , 9 7 1 , 5 9 6 ) $0 $4 9 6 , 0 2 8 , 4 0 4 $9 9 . 2 0 6 5. 7 5 6 % $2 8 , 7 8 0 , 0 0 0 22 ¡ 23 6.3 5 0 % Se r i e s d u e J u 1 2 0 3 8 07 / 1 7 1 0 8 07 1 1 5 / 3 8 30 $3 0 0 . 0 0 0 , 0 0 $3 0 0 , 0 0 0 , 0 0 0 ($ 3 , 9 6 0 , 9 5 8 ) $0 $2 9 6 , 0 3 9 , 0 4 2 $9 8 . 6 8 0 6. 4 5 0 % $1 9 , 3 5 0 , 0 0 0 23 ! 24 5.5 0 0 % Se r i e s d u e J a n 2 0 1 9 01 1 0 8 1 0 01 1 1 5 / 1 9 10 $3 5 0 , 0 0 0 , 0 0 0 $3 5 0 , 0 0 0 , 0 0 0 ($ 4 , 8 0 2 , 3 6 9 ) $0 $3 4 5 , 1 9 7 , 6 3 1 $9 8 . 6 2 8 5.6 8 1 % $1 9 , 8 8 3 , 5 0 0 24 ¡ 25 6.0 0 % Se r i e s d u e J a n 2 0 3 9 01 1 0 8 / 0 9 01 / 1 5 1 3 9 30 $6 5 0 , 0 0 0 , 0 0 0 $6 5 0 , 0 0 0 , 0 0 0 ($ 1 2 , 2 9 8 , 6 8 5 ) $0 $6 3 7 , 7 0 1 , 3 1 5 $9 8 . 1 0 8 6.1 3 9 % $3 9 , 9 0 3 , 5 0 0 25 j 26 6. 0 7 % Su b t o t a . B u l l e t F M B s 23 $5 , 0 5 0 , 0 0 0 , 0 0 0 ($ 5 5 , 0 4 , 5 5 5 ) ($ 7 , 2 6 3 , 8 1 5 ) $4 , 9 8 7 , 6 9 1 , 6 3 0 6.1 5 7 % $3 1 0 , 9 1 5 , 5 0 0 26 ¡ 27 27 ¡ 28 9. 1 5 0 % Se r i e s C d u e A u g 2 0 1 1 08 / 0 9 1 9 1 08 / 0 9 1 1 1 20 $8 , 0 0 0 , 0 0 0 $8 , 0 0 0 , 0 0 ($ 7 5 , 3 2 7 ) $0 $7 , 9 2 4 , 6 7 3 $9 9 . 0 5 8 9.2 5 4 % $7 4 0 . 3 2 0 28 ¡ 29 8. 9 5 0 % Se r i e s C d u e S e p ~ 0 1 1 08 1 1 6 1 9 1 09 1 0 1 1 1 1 20 $2 0 , 0 0 0 , 0 0 0 $2 0 , 0 0 0 . 0 0 0 ($ 1 3 2 , 1 1 8 ) $0 $1 9 , 8 6 7 , 8 8 2 $9 9 . 3 3 9 9.0 2 1 % $1 , 8 0 , 2 0 0 29 ¡ 30 8. 9 2 0 % Se r i e s C d u e S e p 2 0 1 1 08 1 1 6 1 9 1 09 / 0 1 / 1 1 20 $2 0 , 0 0 0 , 0 0 0 $2 0 , 0 0 0 . 0 0 0 ($ 1 8 8 , 3 1 8 ) $0 $1 9 , 8 1 1 , 6 8 2 $9 9 . 0 5 8 9.0 2 2 % $1 , 8 0 4 , 4 0 0 30 ! 31 8. 9 5 0 % Se r i e s C d u e S e p 2 0 1 1 08 1 1 6 / 9 1 09 / 0 1 / 1 1 20 $2 5 , 0 0 0 , 0 0 0 $2 5 , 0 0 0 , 0 0 0 ($ 1 7 5 , 3 9 8 ) $0 $2 4 , 8 2 4 , 6 0 2 $9 9 . 2 9 8 9.0 2 6 % $2 , 2 5 6 , 5 0 0 31 ¡ 32 8. 2 9 0 % Se r i s C d u e D e c 2 0 1 1 12 1 3 1 1 9 1 12 1 3 0 / 1 1 20 $3 , 0 0 0 , 0 0 0 $3 , 0 0 0 , 0 0 0 ($ 2 3 , 0 4 0 ) ($ 4 1 0 , 7 8 4 ) $2 . 5 6 6 , 1 7 5 $8 5 . 5 3 9 9. 9 7 2 % $2 9 9 , 1 6 0 32 ¡ 33 8. 2 6 0 % Se r i s C d u e J a n 2 0 1 2 01 1 0 9 1 9 2 01 1 1 0 1 1 2 20 $1 . 0 0 0 , 0 0 0 $1 , 0 0 0 , 0 0 0 ($ 7 , 6 4 9 ) ($ 1 3 6 , 9 2 8 ) $8 5 5 , 4 2 3 $8 5 . 5 4 2 9. 9 3 8 % $9 9 , 3 8 0 33 ¡ 34 8. 2 8 0 % Se r i e s C d u e J a n 2 0 1 2 01 / 1 0 1 9 2 01 1 1 0 1 1 2 20 $2 , 0 0 0 , 0 0 $2 , 0 0 0 , 0 0 0 ($ 1 3 , 2 9 7 ) ($ 2 7 3 , 8 5 6 ) $1 , 7 1 2 , 8 4 7 $8 5 . 6 4 2 9, 9 4 7 % $1 9 8 , 9 4 0 34 ¡ 35 8. 2 5 0 % Se r i e s C d u e F e b 2 0 1 2 01 1 1 5 1 9 2 02 1 0 1 1 1 2 20 $3 , 0 0 0 , 0 0 0 $3 , 0 0 0 . 0 0 0 ($ 2 2 , 9 4 6 ) ($ 4 1 0 , 7 8 4 ) $2 , 5 6 6 , 2 7 0 $8 5 . 5 4 2 9. 9 2 4 % $2 9 7 , 7 2 0 35 ¡ 36 8. 5 3 0 % Se r i s C d u e D e c 2 0 2 1 12 / 1 6 / 9 1 12 1 1 6 1 1 30 $1 5 , 0 0 0 , 0 0 0 $1 5 , 0 0 0 , 0 0 0 ($ 1 1 5 , 2 0 2 ) ($ 2 , 0 5 3 , 9 2 2 ) $1 2 , 8 3 0 , 8 7 7 $8 5 . 5 3 9 10 . 0 6 6 % $1 , 5 0 9 , 9 0 0 36 ¡ 37 8.3 7 5 % Se r i s C d u e D e c 2 0 2 1 12 1 3 1 / 9 1 12 1 1 1 2 1 30 $5 . 0 0 , 0 0 0 $5 , 0 0 , 0 0 0 ($ 3 8 , 4 0 0 ) ($ 6 8 4 , 6 4 1 ) $4 , 2 7 6 , 9 5 9 $8 5 . 5 3 9 9. 8 8 9 % $4 9 4 , 4 5 0 37 ¡ 38 8.2 6 0 % Se r i e s C d u e J a n 2 0 2 2 01 1 0 8 1 2 01 1 0 7 / 2 2 30 $5 , 0 0 0 , 0 0 0 $5 , 0 0 0 , 0 0 ($ 3 3 , 2 4 3 ) ($ 6 8 4 , 6 4 1 ) $4 , 2 8 2 , 1 1 7 $8 5 . 6 4 2 9. 7 4 5 % $4 8 7 , 2 5 0 38 ! 39 8.2 7 0 % Se r i e s C d u e J a n 2 0 2 2 01 / 0 9 1 9 2 01 l Ù J / 2 2 30 $4 , 0 0 0 , 0 0 0 $4 , 0 0 0 , 0 0 0 ($ 3 0 , 5 9 4 ) ($ 5 4 7 , 7 1 2 ) $3 , 4 2 1 , 6 9 3 $8 5 . 5 4 2 9. 7 6 8 % $3 9 0 , 7 2 0 39 ¡ 40 8. 7 6 6 % Su b t o t a l . S e r i e s C M T N . 23 $1 1 1 , 0 0 0 , 0 0 0 ($ 8 5 5 , 5 3 3 ) ($ 5 , 2 0 3 , 2 6 8 ) $1 0 4 , 9 4 1 , 2 0 0 9. 3 5 4 % $1 0 , 3 8 2 , 9 4 0 40 ~ ( ) ~ : : 41 . 41 ¡ : Q ) J 0 :0 g i _ . ~ 42 8.1 3 0 % Se r s E d u e J a n 2 0 1 3 01 1 2 0 1 9 3 01 1 2 2 1 1 3 20 $1 0 , 0 0 0 , 0 0 0 $1 0 , 0 0 0 , 0 0 0 ($ 7 5 , 8 2 7 ) ($ 6 7 1 , 6 8 7 ) $9 , 2 5 2 , 4 8 6 $9 2 . 5 2 5 8. 9 3 9 % $8 9 3 , 9 0 0 42 1 Z Q : - . 43 8.0 5 0 % Se r i s E d u e S e p 2 0 2 2 09 / 1 8 1 9 2 09 / 1 8 1 2 2 30 $1 5 , 0 0 , 0 0 0 $1 5 , 0 0 0 , 0 0 0 ($ 1 3 1 , 4 7 1 ) ($ 1 , 6 9 5 . 5 6 6 ) $1 3 , 1 7 2 , 9 6 3 $8 7 . 8 2 0 9. 2 5 8 % $1 , 3 8 8 , 7 0 0 43 , . 0 Z s : 44 8.0 7 0 % Se r i e s E d u e S e p 2 0 2 2 09 / 0 9 1 9 2 09 1 0 / 2 2 30 $8 , 0 0 0 , 0 0 0 $8 , 0 0 0 , 0 0 ($ 7 0 , 1 1 8 ) ($ 9 0 , 3 0 2 ) $7 . 0 2 5 . 5 8 0 $8 7 . 8 2 0 9. 2 8 0 % $7 4 2 , 4 0 0 44 r ~ ! = g 45 8.1 1 0 % Se r i e s E d u e S e p 2 0 2 2 09 / 1 1 1 9 2 09 1 0 9 1 2 2 30 $1 2 , 0 0 0 , 0 0 0 $1 2 , 0 0 0 , 0 0 0 ($ 1 0 5 , 1 7 7 ) ($ 1 , 3 5 6 , 4 5 3 ) $1 0 . 5 3 8 , 3 7 0 $8 7 . 8 2 0 9. 3 2 5 % $1 , 1 1 9 . 0 0 0 45 . ) o 0 1 ~ 46 8.1 2 0 % Se r i e s E d u e S e p 2 0 2 2 09 / 1 1 1 9 2 09 / 0 9 1 2 2 30 $5 0 , 0 0 0 , 0 0 0 $5 0 , 0 0 0 , 0 0 0 ($ 4 3 8 , 2 3 8 ) ($ 5 , 6 5 1 , 8 8 7 ) $4 3 , 9 0 9 , 8 7 5 $8 7 . 8 2 0 9. 3 3 6 % $4 , 6 6 8 , 0 0 0 46 ç i " U _ . . m Q ) : i 47 8.0 5 0 % Se r i s E d u e S e p 2 0 2 2 09 1 1 4 1 9 2 09 / 1 4 1 2 2 30 $1 0 , 0 0 0 , 0 0 0 $1 0 , 0 0 0 , 0 0 0 ($ 8 7 , 6 4 8 ) ($ 1 , 1 3 0 , 3 7 7 ) $8 , 7 8 1 , 9 7 5 $8 7 . 8 2 0 9. 2 5 8 % $9 2 5 , 8 0 0 47 f = ~ ~ " U 48 8. 0 8 0 % Se r i s E d u e O c i 2 0 2 2 10 1 1 5 1 9 2 10 / 1 4 1 2 2 30 $2 5 , 0 0 0 , 0 0 0 $2 5 , 0 0 0 , 0 0 0 ($ 2 0 0 , 1 9 0 ) ($ 2 , 0 6 1 , 6 2 7 ) $2 2 , 7 3 8 . 1 8 2 $9 0 . 9 5 3 8. 9 5 3 % $2 , 2 3 8 , 2 5 0 48 ~ ~ N ~ 49 8. 0 8 0 % Se r i e s E d u e O c i 2 0 2 2 10 1 1 5 1 9 2 10 / 1 4 / 2 2 30 $2 6 , 0 0 , 0 0 0 $2 6 , 0 0 0 , 0 0 0 ($ 2 0 8 , 1 9 8 ) ($ 2 , 9 3 8 , 9 8 1 ) $2 2 . 8 5 2 , 8 2 1 $8 7 . 8 9 5 9. 2 8 3 % $2 , 4 1 3 , 5 8 0 49 1 - . S l g ¡ 50 8. 2 3 0 % Se r i e s E d u e J a n 2 0 2 3 01 1 2 9 1 9 3 01 1 2 0 / 2 3 30 $4 , 0 0 0 , 0 0 0 $4 , 0 0 , 0 0 0 $5 1 , 2 2 9 ($ 8 8 , 9 8 9 ) $3 , 9 6 2 , 2 4 1 $9 9 . 0 5 6 8.3 1 6 % $3 3 2 , 6 4 50 ( . 51 8. 2 3 0 % Se r i e s E d u e J a n 2 0 2 3 01 1 2 0 1 9 3 01 1 2 0 1 2 3 30 $5 , 0 0 0 , 0 0 0 $5 , 0 0 0 , 0 0 0 ($ 3 7 , 9 1 4 ) ($ 3 3 5 . 8 4 3 ) $4 , 6 2 6 , 2 4 3 $9 2 . 5 2 5 8.9 5 1 % $4 7 , 5 5 0 51 52 8.1 0 0 % Su b t o t a l . S e r i e s E M T N . 29 $1 6 5 , 0 0 0 , 0 0 0 ($ 1 , 3 0 3 , 5 5 2 ) ($ 1 6 , 8 3 5 , 7 1 2 ) $1 4 6 , 8 6 0 , 7 3 6 9. 1 9 4 % $1 5 , 1 6 9 , 8 2 0 52 ¡ 53 53 ! Pa g e 3 o f 3 Ii _ i i i . -- - - - - - - - - - - - - - - ~ - - - - - - - - - - - - - - - - - - - - __ _ _ _ ~ T P R ~ E E T O C O M P ~ _ i : _ _ _ _ PR I C I A L A M O U N TO A L PE R $1 0 0 LI N lN l E R E S T IS S U A N C E MA W R I OR I G OR I G l N A L AV E R A G E IS S U A N C E RE E M T I N DO L L A R PR I C I A L MO N E Y TO AN N A L DE B T LI NO . RA l E DE S C R I T I O N DA l E DA l E LIF E IS S U E OU T T A N D I N G ' " EX P E N S E S EX E N S E S AM O U N AM O U N T CO M P A N Y SE R V I C E C O S T NO . (a ) (b ) (c ) (d ) (e ) (g ) (h ) (i ) (j ) (k ) (1 ) (m ) (n ) 54 7.2 6 0 % Se r i e s F d u e J u 1 2 0 2 3 07 1 2 2 1 3 07 1 2 1 2 30 $1 1 , 0 0 0 , 0 0 0 $1 1 , 0 0 , 0 0 0 ($ 1 0 0 , 6 2 2 ) ($ 5 8 9 , 0 6 2 ) $1 0 , 3 1 0 , 3 1 6 $9 3 . 7 3 0 7. 8 0 4 % $8 5 8 , 4 4 0 54 55 7.2 6 0 % Se r i e s F d u e J u 1 2 0 2 3 07 1 2 2 1 3 07 1 2 1 2 30 $2 7 , 0 0 , 0 0 0 $2 7 , 0 0 0 , 0 0 0 ($ 2 4 6 , 9 8 1 ) ($ 1 . 4 4 5 . 8 8 0 ) $2 5 . 3 0 7 , 1 3 9 $9 3 . 7 3 0 7. 8 0 4 % $2 , 1 0 7 , 0 8 0 55 56 7.2 3 0 % Se r i e s F d u e A u g 2 0 2 3 08 1 1 6 1 9 3 08 1 1 6 1 2 30 $1 5 , 0 0 0 , 0 0 $1 5 , 0 0 , 0 0 0 ($ 1 3 7 , 2 1 1 ) ($ 2 6 8 , 6 2 4 ) $1 4 , 5 9 4 , 1 6 5 $9 7 . 2 9 4 7. 4 5 7 % $1 , 1 1 8 , 5 5 0 56 57 7.2 4 0 % Se r i e s F d u e A u g 2 0 2 3 08 1 1 6 1 9 3 08 1 1 6 1 2 30 $3 0 . 0 0 0 , 0 0 0 $3 0 , 0 0 0 , 0 0 0 ($ 2 7 4 , 4 2 3 ) ($ 5 3 7 , 2 4 8 ) $2 9 , 1 8 8 , 3 2 9 $9 7 . 2 9 4 7. 4 6 7 % $2 , 2 4 0 , 1 0 0 57 58 6.7 5 0 % Se r i e s F d u e S e p 2 0 2 3 09 / 1 4 1 9 3 09 / 1 4 1 2 30 $2 . 0 0 , 0 0 0 $2 , 0 0 0 , 0 0 0 ($ 1 5 , 3 0 0 ) $0 $1 , 9 8 4 , 7 0 0 $9 9 . 2 3 5 6. 8 1 0 % $1 3 6 , 2 0 0 58 59 6.7 2 0 % Se r i e s F d u e S e p 2 0 2 3 09 1 1 4 1 9 3 09 1 1 4 / 2 3 30 $2 . 0 0 0 , 0 0 0 $2 , 0 0 0 , 0 0 0 ($ 1 5 , 3 0 0 ) $0 $1 , 9 8 4 , 7 0 0 $9 9 . 2 3 5 6. 7 8 0 % $1 3 5 , 6 0 0 59 60 6.7 5 0 % Se r i e s F d u e S e p 2 0 2 3 09 / 1 4 1 9 3 09 1 1 4 1 2 30 $5 , 0 0 0 , 0 0 0 $5 . 0 0 0 , 0 0 0 ($ 3 8 , 2 5 0 ) ($ 3 4 , 1 6 9 ) $4 , 9 2 7 , 5 8 1 $9 8 . 5 5 2 6. 8 6 5 % $3 4 3 , 2 5 0 60 61 6.7 5 0 % Se r i e s F d u e O c t 2 0 2 3 10 1 2 1 9 3 10 1 2 6 1 2 30 $1 2 . 0 0 0 , 0 0 0 $1 2 , 0 0 0 , 0 0 0 ($ 9 1 , 3 9 6 ) $0 $1 1 , 9 0 8 , 6 0 4 $9 9 . 2 3 8 6. 8 1 0 % $8 1 7 , 2 0 0 61 62 6.7 5 0 % Se r i e s F d u e O c t 2 0 2 3 10 1 2 1 9 3 10 1 2 6 1 2 3 30 $1 6 , 0 0 0 , 0 0 0 $1 6 , 0 0 0 , 0 0 0 ($ 1 2 1 , 8 6 1 ) $0 $1 5 , 8 7 8 , 1 3 9 $9 9 . 2 3 8 6. 8 1 0 % $1 , 0 8 9 . 6 0 0 62 63 6.7 5 0 % Se r i e s F d u e O c t 2 0 2 3 10 1 2 1 9 3 10 1 2 6 1 2 30 $2 0 , 0 0 0 , 0 0 0 $2 0 , 0 0 0 . 0 0 0 ($ 1 5 2 , 3 2 6 ) $0 $1 9 , 8 4 7 , 6 7 4 $9 9 . 2 3 8 6. 8 1 0 % $1 , 3 6 2 , 0 0 0 63 64 7. 4 4 % Su b t o t a . S e r i e s F M I N s 30 $1 4 0 , 0 0 0 , 0 0 0 ($ 1 , 1 9 3 , 6 7 0 ) ($ 2 , 8 7 4 , 9 8 3 ) $1 3 5 , 9 3 1 , 3 4 7 7. 2 9 1 % $1 0 , 2 0 8 , 0 2 0 64 65 65 66 6.7 1 0 % Se r i e s G d u e J a n 2 0 2 6 01 1 2 1 9 6 01 1 1 5 / 2 6 30 $1 0 0 , 0 0 0 , 0 0 0 $1 0 0 , 0 0 0 , 0 0 0 ($ 9 0 4 , 4 6 7 ) $0 $9 9 , 0 9 5 , 5 3 3 $9 9 . 0 9 6 6. 7 8 1 % $6 , 7 8 1 , 0 0 66 67 6. 7 1 0 % Su b t o t a . S e r i e s G M I N s 30 $1 0 0 , 0 0 0 , 0 0 0 ($ 9 0 4 , 4 6 7 ) $0 $9 9 , 0 9 5 , 5 3 3 6. 7 8 1 % $6 , 7 8 1 , 0 0 0 67 68 68 69 6. 2 1 6 % To t a l F i r s t M o r t a g e B o n d s 24 $5 , 6 3 1 , 0 5 2 , 6 0 0 ($ 5 9 , 3 0 1 , 7 7 7 ) ($ 3 2 , 1 7 7 , 7 7 7 ) $5 , 5 3 9 , 5 7 3 , 0 4 6 6. 3 7 5 % $3 5 8 , 9 8 1 , 7 3 6 69 70 70 71 %M i m M M l l i j Ü J W ~ l l l ¡ H ¡ i ¡ M i ì : ) i ( 71 72 1. 5 3 5 % Mo f f a t 9 4 d u e M a y 2 0 1 3 11 1 7 1 9 4 05 1 0 1 / 1 3 18 $4 0 . 6 5 5 , 0 0 0 $4 0 , 6 5 5 , 0 0 0 ($ 8 7 4 , 1 5 9 ) ($ 7 4 , 9 1 2 ) $3 9 , 7 0 5 , 9 2 9 $9 7 . 6 6 6 1.6 8 2 % $6 8 3 , 8 1 7 72 73 4.0 0 2 % Co n v e r s e 8 8 d u e J a n 2 0 1 4 01 1 1 4 / 8 8 01 / 0 1 1 1 4 26 $1 7 , 0 0 0 , 0 0 0 $1 7 , 0 0 0 , 0 0 0 ($ 1 5 5 , 9 7 0 ) ($ 5 7 9 , 8 4 9 ) $1 6 , 2 6 4 , 1 8 1 $9 5 . 6 7 2 4. 2 7 9 % $7 2 7 , 4 3 0 73 74 4.0 0 2 % Sw e e t w a t e r 8 4 d u e D e c 2 0 1 4 12 1 1 2 1 8 4 12 1 0 1 / 1 4 30 $1 5 , 0 0 0 . 0 0 0 $1 5 . 0 0 0 , 0 0 0 ($ 2 2 7 . 8 8 7 ) $0 $1 4 , 7 7 2 , 1 1 3 $9 8 . 4 8 1 4. 0 9 1 % $6 1 3 , 6 5 0 74 75 2.2 9 9 % Li c o h i 9 1 d u e J a n 2 0 1 6 01 1 1 7 1 9 01 1 0 1 / 1 6 25 $4 5 , 0 0 0 , 0 0 0 $4 5 , 0 0 0 , 0 0 0 ($ 7 7 1 , 8 3 6 ) ($ 2 , 5 7 8 , 6 0 2 ) $4 1 , 6 4 9 , 5 6 2 $9 2 . 5 5 5 2.7 1 1 % $1 , 2 1 9 . 9 5 0 75 76 4.2 2 9 % Fo r s y t 8 6 d u e D e c 2 0 1 6 12 1 2 9 / 8 6 12 1 0 1 1 1 6 30 $8 , 5 0 0 , 0 0 0 $8 , 5 0 0 , 0 0 0 ($ 3 0 4 , 8 2 4 ) $0 $8 , 1 9 5 , 1 7 6 $9 6 . 4 1 4 4. 4 4 6 % $ 3 7 7 , 9 1 0 7 6 ¡ 77 5. 7 4 5 % Li c o h i 9 3 d u e N o v 2 0 2 1 11 / 0 1 1 9 3 11 / 0 1 / 2 1 28 $8 , 3 0 0 , 0 0 0 $8 , 3 0 0 . 0 0 0 ($ 4 2 6 , 1 0 5 ) ($ 4 1 4 , 7 7 8 ) $7 , 4 5 9 , 1 1 7 $8 9 . 8 6 9 6. 5 3 6 % $ 5 4 2 , 4 8 8 7 7 ¡ 78 5. 7 7 0 % Em e r y 9 3 A d u e N o v 2 0 2 3 11 0 1 1 9 3 11 1 0 1 1 2 3 30 $4 6 , 5 0 0 , 0 0 $4 6 , 5 0 0 , 0 0 0 ($ 1 , 6 2 4 , 7 9 3 ) ($ 2 , 8 4 2 , 0 5 3 ) $4 2 , 0 3 3 , 1 5 4 $9 0 . 3 9 4 6. 5 0 0 % $ 3 , 0 2 2 , 5 0 0 7 8 ! 79 5. 7 4 5 % Em e r y 9 3 B d u e N o v 2 0 2 3 11 0 1 / 9 3 11 0 1 1 2 30 $1 6 , 4 0 0 , 0 0 0 $1 6 , 4 0 0 . 0 0 0 ($ 1 , 0 1 5 , 0 5 1 ) ($ 8 1 9 , 5 5 7 ) $1 4 , 5 6 5 , 3 9 2 $8 ß . 8 1 3 6. 6 0 4 % $ 1 , 0 8 3 , 0 5 6 7 9 i 80 1. 4 3 7 % Ca r b o n 9 4 d u e N o v 2 0 2 4 11 1 7 1 9 4 11 0 1 1 4 30 $9 , 3 6 5 , 0 0 0 $9 , 3 6 5 , 0 0 0 ($ 2 0 6 . 5 1 9 ) ($ 5 8 , 5 7 4 ) $9 , 0 9 9 ; 9 0 7 $9 7 . 1 6 9 1. 5 5 % $ 1 4 5 , 6 2 6 8 0 i 81 1. 4 3 3 % CO I v e r s e 9 4 d u e N o v 2 0 2 4 11 / 1 7 1 9 11 / 0 1 / 2 4 30 $8 . 1 9 0 , 0 0 0 $8 , 1 9 0 , 0 0 0 ($ 2 0 9 , 7 7 8 ) ($ 8 6 , 3 2 3 ) $7 . 8 9 3 , 8 9 9 $9 6 . 3 8 5 1. 5 8 5 % $ 1 2 9 , 8 1 2 8 1 i 82 1.4 3 1 % Em e r y 9 4 d u e N o v 2 0 2 4 11 1 1 7 / 9 4 11 1 0 1 1 2 4 30 $1 2 1 , 9 4 0 , 0 0 0 $1 2 1 , 9 4 0 , 0 0 0 ($ 3 , 2 7 4 , 2 4 6 ) ($ 1 , 9 2 5 , 7 6 7 ) $1 1 6 , 7 3 9 , 9 8 7 $9 5 . 7 3 6 1. 6 1 1 % $ 1 , 9 6 4 , 4 5 3 8 2 ¡ 83 1. 2 1 % Lic o h i 9 4 d u e N o v 2 0 2 4 11 1 1 1 9 4 11 1 0 1 / 2 4 30 $1 5 , 0 6 0 , 0 0 0 $1 5 , 0 6 0 , 0 0 0 ($ 4 2 2 , 8 5 8 ) ($ 8 1 , 4 2 7 ) $1 4 , 5 5 5 , 7 1 5 $9 6 . 6 5 1 1. 6 6 3 % $ 2 5 0 , 4 4 8 8 3 ¡ 84 1.4 2 1 % Sw e e t w a t e r 9 4 d u e N o v 2 0 2 4 11 / 1 7 1 9 4 11 1 0 1 1 2 4 30 $2 1 , 2 6 0 , 0 0 0 $2 1 , 2 6 0 , 0 0 0 ($ 5 1 0 , 4 7 9 ) ($ 8 8 , 3 5 2 ) $2 0 , 6 6 1 , 1 6 9 $9 7 . 1 8 3 1. 5 3 9 % $ 3 2 7 , 1 9 1 8 4 ¡ 85 4. 2 3 1 % Co n v e r s e 9 5 d u e N o v 2 0 2 5 11 1 7 1 9 5 11 1 0 1 1 2 5 30 $5 , 3 0 0 . 0 0 0 $5 , 3 0 0 , 0 0 0 ($ 1 3 2 , 0 4 3 ) $0 $5 , 1 6 7 . 9 5 7 $9 7 . 5 0 9 4. 3 8 1 % $ 2 3 2 , 1 9 3 8 5 i 86 4. 3 3 0 % Li c o h i 9 5 d u e N o v 2 0 2 5 11 1 7 1 9 5 11 0 1 1 2 5 30 $2 2 , 0 0 0 . 0 0 0 $2 2 , 0 0 0 , 0 0 0 ($ 4 0 4 , 2 6 2 ) $0 $2 1 , 5 9 5 , 7 3 8 $9 8 . 1 6 2 4. 4 4 1 % $ 9 7 7 , 0 2 0 8 6 i 87 2. 7 7 3 % Su b t o t a . S e c u r e P C R B s 28 $4 0 0 , 4 7 0 , 0 0 0 ($ 1 0 , 5 6 0 , 8 1 0 ) ($ 9 , 5 5 0 , 1 9 4 ) $3 8 0 , 3 5 8 , 9 9 6 3. 0 7 1 % $ 1 2 , 2 9 7 , 5 4 8 7 ! 88 88 ¡ 89 1. 6 0 % Sw e e t w a t e r 8 8 B d u e J a n 2 0 1 4 01 1 1 4 / 8 8 01 1 0 1 1 1 4 26 $1 1 , 5 0 0 , 0 0 0 $1 1 , 5 0 0 , 0 0 0 ($ 8 4 , 8 2 2 ) ($ 3 9 2 , 2 5 0 ) $1 1 , 0 2 2 , 9 2 8 $9 5 . 8 5 2 1. 5 5 5 % $ 1 7 8 , 8 2 5 8 9 ¡ 90 1.3 3 6 % Sw e e t w a t e r 9 0 A d u e J u 1 2 0 1 5 07 1 2 5 1 9 0 07 / 0 1 / 1 5 25 $7 0 . 0 0 0 , 0 0 0 $7 0 , 0 0 0 , 0 0 0 ($ 6 6 0 , 7 5 0 ) ($ 7 9 5 , 1 2 2 ) $6 8 , 5 4 4 , 1 2 8 $9 7 . 9 2 0 :: ~ : ~ : $ i ~ : : ~ ~ ~ : ~ 1 91 1. 5 1 % Em e r y 9 1 d u e J u 1 2 0 1 5 05 1 2 1 9 07 1 0 1 / 1 5 24 $4 5 , 0 0 0 , 0 0 0 $4 5 , 0 0 0 , 0 0 0 ($ 8 7 2 , 5 0 5 ) ($ 2 , 5 6 8 , 8 5 9 ) $4 1 , 5 5 8 , 6 3 6 $9 2 . 3 5 3 92 1.3 9 2 % Sw e e t w a t e r 8 8 A d u e J a n 2 0 1 7 01 1 1 4 / 8 8 01 1 0 1 / 1 7 29 $5 0 , 0 0 0 , 0 0 0 $5 0 , 0 0 0 , 0 0 0 ($ 4 2 2 , 4 4 3 ) ($ 8 8 2 , 1 0 1 ) $4 8 , 6 9 5 , 4 5 6 $9 7 . 3 9 1 1. 0 4 % $ 7 5 2 , 0 0 9 2 i 93 1. 3 5 6 % Fo r s y t 8 8 d u e J a n 2 0 1 8 01 1 1 4 / 8 8 01 1 0 1 1 1 8 30 $4 5 , 0 0 0 , 0 0 0 $4 5 , 0 0 0 , 0 0 0 ($ 3 8 0 , 1 9 8 ) ($ 1 , 0 1 3 , 2 8 3 ) $4 3 , 6 0 6 , 5 1 9 $9 6 . 9 0 3 1. 4 8 4 % $ 6 6 7 , 8 0 0 9 3 ~ Q m ; ; 94 1. 3 4 4 % Gi t t 8 8 d u e J a n 2 0 1 8 01 1 1 4 / 8 8 01 1 0 1 1 1 8 30 $6 3 , 0 0 0 , 0 0 0 $4 1 , 2 0 0 , 0 0 0 ($ 3 5 1 . 9 0 5 ) ($ 1 , 0 0 6 , 0 1 3 ) $3 9 , 8 4 2 , 0 8 2 $9 6 . 7 0 4 1. 4 8 0 % $ 6 0 9 . 7 6 0 9 4 i C / ~ g CD _ . , . 95 1.4 2 % Co n v e r s e 9 2 d u e D e c 2 0 2 0 09 / 2 9 1 9 2 12 1 1 1 2 0 28 $2 2 , 4 8 5 , 0 0 0 $2 2 , 4 8 5 , 0 0 0 ($ 2 4 2 , 1 6 4 ) ($ 3 0 3 , 3 0 3 ) $2 1 , 9 3 9 , 5 3 3 $9 7 . 5 7 4 1. 4 6 % $ 3 0 2 , 6 4 8 9 5 Z g - e 96 1.4 2 % Sw e e t w a t e r 9 2 A d u e D e c 2 0 2 0 09 / 2 9 1 9 2 12 / 0 1 1 2 0 28 $9 , 3 3 5 , 0 0 $9 , 3 3 5 , 0 0 0 ($ 1 6 7 , 5 2 4 ) ($ 1 3 4 , 0 9 4 ) $9 . 0 3 3 . 3 8 2 $9 6 . 7 6 9 1. 3 8 1 % $ 1 2 8 , 9 1 6 9 6 " 0 z š : 97 1. 2 4 2 % Sw e e t w a t e r 9 2 B d u e D e c 2 0 2 0 09 1 2 9 1 9 2 12 1 0 1 1 2 0 28 $6 , 3 0 5 , 0 0 0 $6 , 3 0 5 , 0 0 0 ($ 1 5 1 , 9 0 8 ) ($ 9 7 , 7 3 5 ) $6 , 0 5 5 , 3 5 7 $9 6 . 0 4 1 1. 4 1 3 % $ 8 9 , 0 9 0 9 7 W ~ . 9 g 98 1. 3 5 4 % Sw e e t w a t e r 9 5 d u e N o v 2 0 2 5 12 1 1 4 1 9 5 11 0 1 1 2 5 30 $2 4 , 4 0 0 , 0 0 0 $2 4 , 4 0 0 , 0 0 0 ($ 2 2 5 , 0 0 0 ) ($ 4 2 8 , 4 6 9 ) $2 3 , 7 4 6 , 5 3 1 $9 7 . 3 2 2 1. 4 6 5 % $ 3 5 7 , 4 6 0 9 8 £ " . 0 1 : i 99 6. 1 5 0 % Em e r y 9 6 d u e S e p 2 0 3 0 09 / 2 4 1 9 6 09 1 3 0 1 3 0 34 $1 2 , 6 7 5 , 0 0 0 $1 2 , 6 7 5 , 0 0 0 ($ 7 3 5 , 0 1 3 ) $0 $1 1 , 9 3 9 , 9 8 7 $9 4 . 2 0 1 6. 5 7 8 % $ 8 3 3 , 7 6 2 9 9 , . c ; ~ ~ . 10 0 1. 5 2 2 % Su b t o t a . U n s e r e d P C R B s 28 $3 3 7 , 9 0 0 , 0 0 0 ($ 4 , 2 9 4 , 2 2 ) ($ 7 , 6 2 1 , 2 2 9 ) $3 2 5 , 9 8 , 5 3 9 1. 6 8 9 % $ 5 , 7 0 7 , 7 6 1 1 0 0 ¡ z ~ c a " U 10 1 10 1 ~ 0 W 0 10 2 2.2 0 1 % To t a P C R B O b l g a t i o n s 28 $7 3 8 , 3 7 0 . 0 0 0 ($ 1 4 , 8 5 5 , 0 4 2 ) ($ 1 7 , 1 7 1 , 4 2 3 ) $7 0 6 , 3 3 , 5 3 5 2. 4 3 9 % $ 1 8 , 0 0 5 , 3 0 5 1 0 2 5 i 6 0 ~ _. . . . . . . 10 3 10 3 ~ W 10 4 5.7 5 1 % To t a l L o n g . T e r m D e b t 24 $6 , 3 6 9 , 4 2 2 . 6 0 0 ($ 7 4 , 1 5 6 , 8 1 8 ) ($ 4 9 , 3 9 , 2 0 0 ) $6 , 2 5 , 9 1 6 , 5 8 1 5. 9 1 9 % $ 3 7 6 , 9 8 7 , 0 4 1 1 0 4 10 5 -- - - - - - - - - - - - - . - - - - - - - - - - - - - - - - - . , - - - - - - - - - - - - - - - - - - _ . . _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - . . _ - - - - - - - ~ . . ~ ~ - - - - ~~ . ~ __ _ _ _ _ _ _ . _ _ _ . . . . . J Case No. PAC-E-I0-07 Exhibit NO.6 Witness: Bruce N. Wiliams BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ROCKY MOUNTAIN POWER . Exhibit Accompanying Direct Testimony of Bruce N. Wiliams Standard & Poor's Ratings Direct Rating Factors May 2010 PacifiCorp Primary Credit Analys: Anr,e Se!üiig, San Fiands¡;o (1) 415.371.50G9; i.nm~_$elt¡¡¡¡¡'$sti.mdard~!ndpmir$.i:am Scc&mlary -Credit Analys lix1d A Shipllmi. eFA. NfM:' Yi)rk j 1 i 212.433- ïE7B: tQ(¡tUhipm;~nyM.andanli~ndponrS.(:nm Table Of Contents .Major Rating Factors Outlook www.standardandpoors.com/ratìngsdirect 1 1$.12:: ¡ X~TlOOm Rocky Mountain Power Exhibit No.6 Page 2 of 10 Case No. PAC-E-10-07 ..................wiïrÏÈiss:srücë".I\¡:.Wiiiiäiis ....................l.a.çlfi.Ç.9.rP............................ Major Rating Factors . Market and regulatory diversiry aff()rd(~d by PacìHCorp's electric lltílíty i:msim.~ss,\'1thich serves portions of six western U.s. stnt.C$; ...............R('mil.cltx:rric .rat.c$c(llnparefav()rablr.withth(is$.()f.()rhcHlt~~r.C.¡upplkr$.................... ..... operating .in the srates .P.idfìCorp serves, siiggestìng that the company may he ablc~ to niainniinits competitive advantage despite its ongoing need for ..............................i:ar(~J~,li~~f..tQ .s~tpm~tIJi. .1;;i:ge.qipkal..Jl!:pgrmm. . ... ............... ... . The company has made progress in putting into phKe fuel and purchased ,P)".,r(~r adìiisters in the six Hates it s(~n'c~ (an adjllSt(~r was put imo effc':t iii Idaho in 2009, and one is pending inPadfiCorp's brgest market~ Utah); . .... . ... .....~... tii(~ çöii~pitti()~i(;f. i, Ó68 ~i~ëg~~~~.~tt; (ll~t~~~~~ti.i~,~l. g,~~. Pl~''lts,~iic;t~g\~iti~... wind farm ¡nvestincllt~ is reducing the cOlnpany's relíance on purchased po'\ver; and . A tcritátíVèi'êsóltitiùriih..the .cùfitèhl:óúsKlii:ú.áthhydl'ó..relkèhsirg.ciisëhàš th(~ potential to a(kquatdy addrcss the comparry's finandal exposure if the project is decommissioned, as is now (~ndsi()ne(l. Weaknesses: . I:kspitc reçcnr ratc relid in IK~m:iy all states PadfiCorp serve~, regulatory lag continU(.~s to allow' only modest imprüvern(~nr in the company's finandal profie: Its retum on equity remains under atithOlíi(~ levels .ind .............. .............. àlthough Jevúägc: häsiii1.prÓvc:dsiiice . MidAtùeriòùi EiiérgyHóldíiigs .Cò~(MEHq. ri¿qúiredif iii. 2006~. ùish. HÓ\v.... metrics remain ,"veak; . Regulators ,\.,'ill need to çonsiswnt!y siipporcretaìl rate increases to recover PaáfiCorp's pbrnied capital inws.ments,~ilrhoughtherecessi onaryeiiviromncnt has caused sorne scaJing~backof capital plans; . Growth in the pen.:'Cl1tage of generation provided br riat\iral gas costs mitigates some of the company's potential exposure to carbon rt~gl11arÌ(m; but íriwdiices gn~~lter porciitial for ço~r ,"obtilty. Rationale ........... .. .. .... t1'he dt\~ iC()l'p(ll'at(~. cre4ìt r,:~ tìrig. (q:':RJ .ofil")iicif¡C,:nrp. reflet:tsÎts. N tJ((:ellcrit" .bi.tsíii(~S~. risk; .I'r(itì~~;e\!ì(ìe¡it;~~ .by. ¡;... .. dívers(~ and growing service territory, ~md"aggrc~ssive" financial risk profie that reflc':ts a .large capital progtam and the tWl'd to sh()n~ up its cash flmv in(~trics. While the ring-fenced utility's credit meti"ics are more consistent on a staiid.alone ba~is with a 'EBB' category rating, Sral1dm:,d &. Poor's H~itíngs Services (~:iqx~cts that lIamigernenr. \.víl ........ . ...... ~içhle\;eç¡ishH¿;\~;t)leúkšill()rêç()nstšiêlli,v:ii:hiiliA'¿It(~g()i1;railngù\;êi;theiiêiTseyerarj;êa.n;:ìjadfiÖ:;r.¡;î;;.... o\;vned by MidAmi~rìcan£nergy Holdings Co. (Ml'HC; ßßB+/Srabld--).ln turn, MEHC is privately' held and nh"ijority owiwd by Berkshire J::bthaway (AA+/SmbldA-l+), which at Yt~lr.etld 2009 had an 89,5%imerest in . . .... ..1..1El-lC"on.an..und:ìhlted h¡:isis;..(MEHC':'ncnmíning .wmmonequítv.:ìs.ovn:ie:d..bv.Walrer.Sçotr.I..9";7'X;J.a:nd.I)r.es:dcnt............L ~ ~ and Chief Executive Officer Greg Abel !O,8%)),1\tEHC bas d(~mol1strated ,1 wílingness to deploy equity to support the iitílty's huge capital program, providing the utility with $865 milioii iii equity wlltrìbiitkins since it pill'diaSed Standard & Poor's I RatingDírett on the Global Credit Portal I April 30, 2010 ."\,¡ Rocky Mountin Power EXh.ibit No.6 Page ~ Rf 10 Case No. PA~Mf,Otp Wiiness.:..B"rüëë..I'CiMii¡"äins............ ..... ......... the çOl1pan~' in .March 1006, . ...MEHt'š.¿l'ea~t.ï:~r().flë .~s.sllï)ì)()rï(;d.jj);Bë.rbhii.e~..\,;ii~ëh.h~1s.~t).:i)läÇë..r.hï.¡:)ljgii...Fd)rli~ïiy.IÜff.ä.13";5.hímoI).e(ïliln:.... ............ ..... ....... ... eommìtrnent agreeim.'tt bet\'\teen itself and !\.fEHC in \\'hichMEHC can unilaterally. calliipon. Berkshire to support dtherìts d(~ht repayin(:nr or the capìral ric(:ds of i~ ll)1l1hued suhsidìarìes, including PadfiCorp. In March 2011\ rh(~ ....................... àgi'eëtti:etit.was. àtiicndedtö .(~xtertd thrtmgh:. Fehnüü'y 2014ätälüWd. hNd ö£$2 .bil1ön; .WcVìe\'\ thìšägtëërtletit... bet\veen PaCífC(lfp'S par(:nt and ~l 'AA+' rated entìtr as fcdiidng the likelihood of a PadfiCorp default. ........~:~.:r~l?:l~~.~. ~!l;\:.:l:.~.!~E~.t:~S~~?iT~~?.~.i..~?~y..~.!:~~~.~:.~~~.!:.~.~,l..!?~:~..~.r~~.i.:.Pr~)!~~:~yi:~i~!:~.!.~:~.~?.~!l:.'.':~:d.r~.~.!~.~..~:~..!~.:... compariy.We take this vie\v because the utility has no right to caus(~t\'1EHC to make an equity contribution~ either fmm MEHC or \':ì~i ßt~rkshire through an MEHC b()~l.rd request. WliikMEHC would typìcaUy havt~ strong incentives to SU,ppOrt th(~ utility by tapping the Herkshìre contingent equity~ \ve would fi~te that ìn ¡l catastrophk ... ........... '.útiíif .ev'ëúr;..MEHC-';;'üüia.hicX:i)ëd¿.d. fó.dó.sì:i.ónlj'. ìfaàítig';ró.,\'.ëiElti.ïljc.eë.öïiótiiíë.hi\~i.ìïiterëšrš. ófdïi;;.Ïl"àï'eiiE.. Such a scenario is i'eniote and would require an unprecedcnrcd event such ¡is\vh.H occurred during the western energy crìsís~ when regulaton; refused to allow ntìlities to recover .power procurement ÇiistS. PacifiCorp serves :1.7 l1ìUioii custorners in portions of six \"\'este.rI states: Utah, Oregon, W'yoming, Washingwl1~ Idaho~ ~Hid California. The company opcrat($ as Padfic Po\vt~r in Ort~g(ln~ W~ishingt()n, and CalifonlÌ~l, and as Roáy t-~lOtinrain l'nwerin Ut¡ih~ W'ynining, a!ld Idaho, 'rhc~ company's \,vo lil'gesr in..'lrkets, Urah and Oregon, .......................................âtë()l.ltltcdf()iahúiit67~~(;rthec()ilipa.iiy¡srêtaad;;êtdÇsalt.;šîtî2Üij9;,vhh\vY()liiiJigâl1a..\'Wašhiiigrúîiai..i)%~ and the hahmc(: being sold r. customers in Idaho and CalifornÍi'l. A;; of Dec. 31 ~ 2009, thelltility's long-term dt~bt \-vas $6.4 hilion. COllolidated long-term debt at \fEHC (which indudes PacifiCorp's deht) was nearly $20 !Jillon ............"ä!çöfthe~mljtn:.äæ. ................................................. .............................................. ... .................... ....................... ................................. .................................... SUl'portiw~ rate cas(~ outcomes remain key to llaiiuainìl'g ilnd improving upon the comp;¡ny's financ.ial pcrformanç'(~. ........ .............. )Xt'h~i. ~~l~~~Ç. Rllrçh~lS(~~PaçifiÇ()fP . int996 fWID Sçotti~hP()'\r(~r, th~ .iitility .~~~.c()Jisìstf:l1tlr~e.~llUtl~~Jf:. to. ~-l ?l.its..... authorized retitrl on equiry (ROE), which varies byiurisdiction but ranges from 10(~!;~ f( 10.6%. .Management has focused on improving its returns~ with some success. In 200.9, our calculations suggest that the consolidated ROE for P;¡cifiCorp was 8.5'7~). R(~giibti:ry lag n~maìns an issue for the comp.my. although the comparw is perm.ìtæd iitid¿r sfátéiegúlatiùritùùscloi~;árd..test..ye¡üs.foì;..ràfe..òiscsÌliUiàh,. Orcgùii, WYòriiirig~àrid Càlifomiá:(Idahó and Washingtoil require historical test years,) ...... .rtl..?, 99?~. .S(:~'.(~r ¡¡.i. ~i:i~.s.~. .ì.tl.t:c.ry~t).(!i:~i.. ¡¡¡¡~.t:~~~. ç:.()¡¡~p::.i~.r. .rt:.;lç:~~4. (I.. ~i:ttlt~tl~i:¡¡t .t~). .ii~1rl.(!i~1.etl.t: .fl..t~l. .::.I~~. r.ti.i~;:li.;l~t:.~. ..P(~\~t:l:.........................,. adìustmenis,whích dl(~ IPUC approved. The Utah Puhlk: Serviie Coiiimìssiotl (UPSC) is consíckdng th(~ d~ìgn of il new fuel adjuster, and d)(: company iii February 1010 filed to s(:ek approval to defer th(~ difference between the net power costs allowedin the company's 2009 rate ca$e and actu,il eO$ts in\."1lm~d. That request is pending before the ...................... .ët;lniiiiS~i(m. Recent general rate case activity indudc$ the company's settlement agreement with the UL)SC on Feb. 18~ 2010, for a . . remilmte im;re~t~e qf$Ji..rlliH¡m',...allaY~T~lgCpdç('j!KI:ease(?fi.X,..m¡;CQJaparcdwiththcQ:rigìna!.$.(EinUljfln. .. sought. In Wyoming~ the cornpany hal) filed ¡l generalmte case with the Wyoming Public Servìce Commission for an incn~al)(~ of as mudi as $71 miHìon. bidy this yeai; the conunission in Oregon approved a stipulation agreement that indudes an annuill.iiicrcase to $42 liìllion~ as well .1S three t;¡:iff .riders for the coll(~ctiol1 of Ml additional $8 million................................................__._--_.......................................................................................................................... ................................................................................................. that is ~issodatcd with \"'lrlOUS cost Ìnitiatives over di(~ cours(~ (If the next thrt'C years. III W;ashillgton~ the commission Mid PadfiCorp reached ¡i settlement agreementfo! an annual incn,:,lS: of $14 míliotl, or an averig\: price ¡ncreasc~ of ww.standardandpøors.comlmtingsdíreet 3 Rocky Mountin Power Exhibit No. 6 P~ge 4pl,1,O Case No. PAC~,orp . .'wiïnešš':"š¡:üëë"r\f W¡¡iärnš.... ... ................... .5'h~.Prü forma rare adjustl1Cl1ts in California \\t(~re made in January 2009 ro address (~nergy cosr adjustments :e1nd .... ..............attr.iti(ln.ad¡u$:tm(~nr£..~nle.(:on:!patiy..b~1s.fh...d.a.g~neral.ratc.ca&e.:wìth .theCaliot.nia .Pl.\hlk. UtiltÎ($. GommiSSl.OIl..for..... atl antlual increase of $8 miliotl that remains pending. PacifiCorp complettxl $1.3 bilìi:m iii c~lpítal (~xrenditures in 2009, up frirn $1.8 bìJion in 2008, The company is ... ............ pfùìc(.(~d ìöspcnd. $4;(,. biUióil. in 20 1 ü~2012~eXdi.dingnóil~çáShän(i\'Íhïnëe fÙr füudsüscd. düdilgëúnStiÜçtiöii~'rh(~.. largest component OfI\ldfiCorp's capital program is the COl1structimi of the G~lteway transmíssìoii projt'Ct, mi estim~lted $4.6 hinion, 2,OOO-mile mllsmissiotl line comiecring portions of Wyi:iining, Utah, Idalw, Oregon, and the .................. ...S(luth\ic'CSteniii.S...Thcprojtx;tislx~íng(;mn:p,i".teJ.inphaSC&,.witii.ínìtialpoftiom.of iiew:.liHes..bûng:p,ia(;cd.jn.servk(~......... as (~arly as 2010 and il completion date scheduled for 2018. About 34'J~J (If the company's tmat capital hudget ovt.~ the ne:i't thre(~ years (ZO 1 0-2(12) is devot(~d to rmnsmi$ûon investment, of which Gare\vay is a compom.':t. In 2008~ .. ..............the..fed~~i:¡il.f,ti~~I:ro:..Reg~¡I.~1Wry:.ç~~lnl;rih~¡c;in..,1~';ini.ti;. tht..çl:imp;i!;ir.¡):¡;~~!;ir,i\f~~.ri?te..tr~~.~tlJ:i~~m.9J..i.Q.Q..haMs.PQi.~).l,.f.Ç)r.............. seven of the eight projecr st.i;niems. Lower fuel prices, dec£east~d volume of \'~lholei;ale dectricity pu.rchasei;, and fa\'o£abk rate appwvals on retail .... ..... .......... .deetádty. salesal1dsalesofrent':\'lta hIe energy. creditsaffectedPacifí(;orp's. 2009. restilts.;. Although revenues declined .. slightly, by almost 1 %, gross margins per IIlC'ga\'I!Htt-hour soldìncreased byahIlost 6'';(" õ:1S did the cOlIipany's earnings beforeínterest and taxes. Operating income increased about :11'"7;, due in J¡irg(~ parr ro retail revenues ¡ncrc,ii;esprovkledbyregut~tory rate. rdid.. F()r 2009,ca:.h.flo\:o'sfrom opel'atìonsmse.by..$508i:n.ìlioll..W..$1.5 bimOll, but the Iliajoriry of thi\: was al1rihllt~lble to the deferred ìncm:ne ta)\Es. In 2009, n:~rai. :sales declined by 3~'b, 'while \"holesale sales 'w(,~e approximately flat. About 30t3'~J~32%of PadfiCorp's total electric sales are to industrial ,..... ~~i~r:()~l~~I:~~.. ~:\~. ~1. !i:~ ii.l~", ~'\~. .~~~l. i: ~J~~~~~I. .$.~t(~S.. ~i~ii.rr~~~ í~);ri. .r~).. ~~..~ .(i:r~ ~. ~ii~. ?~)9~. p'~:i:f.()!:ri~,i!i~.e;,. .,i:'S.. í;ri~l~i~~i:i¡: I. .~,i:l~~. .,i!~~..........................., more Stl1sitive to the btl~ioes." cycle than .is residential dearic cOl.$Ulnptiol1. TndustrÍ;11 s¡i.les d(.~lined 7~~, i112009. Year-end levt"rage for the company was 53%, virtually unchanged year over Yt~ar. Borrowing ín 2009 was partiaUy ......... . .. ........ offset by.,$ 125. míl1ùnofequi:ry. COotrihtitioo. from .MEHC ofhe.se. ~~qiiìry .ii'ly(o'Stmcmswì U. be. key. to ma,ìlltaiiÜl1ga.. . balanc(~d capital structur..: throughout the company's capital program. Debt to total capitalization rdk'"ts several adìustmei:s we mah\ the larg(:sr of whk:h in(:lud~~ adding $395 milion for po\v~~r pUl'chase oblìg,itiml$ mid $37() . . .... miHi9n..f9rll)Sr~l'etireiietlL()hligatiQtls.\t'eçKpect .tl1atl'acifiÇpr..wil. .llQthc..in;iPPsìtlQii..tQ.makçcIisttitmripnsJP its parent whík~ it is (:)\Ecuting its capital prognun and thm MEHC \vil mmiage PadfiCo.rp's dt~bt h~,'erage dm\'nward to the 50% area in the next several years. ...................Shon-term.t;Tedit.faeto-rs.. ...................... . ...................................................... .............................. ........................ ........................................... The company's liquidity position is strong. 'rh(,~ PacifiCorp 'A-2' shorHi~rm rating n~fle(.'ts that although th(~ contingent equity agæeuient between MEI,'¡C and Berkshíæ supports MEHC and its subsìdíaríe!:, the agreement is ....... t)Qt. a Wti.rce. of instimJ,llcl)u;¡ Ui;lllidjry, Thc . agrCt':t1C11t;'UOwi-.Ik(kshire .uptl) J.8QdilY$.fP fund. i) .i:eqtie&t. by. M:fJ:K:... Gíyen the rt"c(~nt turmoil in both the liquidity and e,ipital markers, we have taken a fin1"~r view on the Ul~ed tv link the PadfìCorp sho/"-te:tn ratings to íts &t.and-al()l(~ i::n~dít quality, whkh supt)ms an 'A~2' short-rem! rating. ...................... .~dI~)~,:(~,r~~~":I:~?t~~. ~~atait~ol1Kh. ~(~r~shil'eC(Hltra(.'tilaHyhasup tosì~l1()i:tt~~?r~sl'(~~~~~)~~~'f~~~d~s:~~lif?'d... liquidity; it has :stwng economic íI1CenriYcs to do so. PacifiCorp's cash ;:111d cash (~qiiiyalents toral(~d $117 million as of Dec. 31,2009.10 addition, rhe company has .......... .$.1.39$..hi1io.n.in.u.tlsecure¡¡..re:v()I:ving.c.r(.~dit.stl:ucturc(Ìil1two.s.ep.irate..~1gi:eme.:iti::..ml.$8.0'O..millì()n.linc..expíring...........................,..... July 20:13 ¡md a $700 milion line extendii)g through Octobc.r 20:12. 1he company hadlerters of credit in pl;ice for $258 milion, leaving $1.137 bilion avaUõ:ibk imder its r(~v(llving facilities. Standard & lool" I RatíngsDírect òn the Global Credit Portal IApri i 30, ;~O 10 4 Rocky Mountain Power Exhibit No. 6 P~ge ~p!-10 Case No. PAc;~Xjrp ..................ïNÍtrÏëss:ï3rücë".N:Wîiiiäms.. ............Outlook The r,r.bk outlook on thePadfiCorp ratings incorporati:'$ our expectation that MEHC wil continue to support th(~ utility by cOtltl:ihuting (\luiry sl.ffid(~l1 to ensure that our fully i:'tdiusted ddir to rNal ci:'tpiraliz.itioti is managed over ...................... . thencxt. fe\v years to . iliiadjusted. lcvdof dolo-er to 50~~~andtli;l FFOtotot.üdcht. and. H"O interest ~(wel'agewìU.. be 20'J~ or bdt(~r ¡md in the range of 4.0i(4.5x, reÌ)pcctivdF Given thar PadfiCorp's financial risk profile is weak for the ciiuetl nttíngs~ \~'e do iwt.expecr near-term .upward rating.. mom(~mum for the utility. PadfiCorp's ..................regul¡uQxy..¡lJ:id..s.txw;tu-mli¡:umlatinJl$hid.ds.th~Jltilit):Jmnls.(mle.J\JEHCç¡:e:dit..d(~R~ô.!Jnltki.l1~.man.e.xte.n.t,............................................... SpedikaIly, our criteria provide thar the PacifCorp CCR can be no n:iore than three notches .¡hove the MF~HC consolidated i:l''dir lai:'ng. 'niC company is comfortably within this range. so \'l'e do not see signífic~mt prospet:s f()r .......... ........... . .t.i~~ .ll~¡l¡!y..~¡~r:ìl~~.t.~.~ìi.ll..l~..~. .I:~~~li.r.. i:f. ..1.d.~.~!.i;~.~~t.ìl~~.~.:~~I~G:c~.~)1~ .~'t~:tfr;.~t'l~íi:ll~.I~i:. ~l~i~)y~.¡~.~t.¡i.l):l:..(~ll!i.()()k...... ... ... .... ................................ Table 1. flat¡r,g as of Apr!! 28., 2m 0 PacifiCor, ... hrtlill1d GencralElectric eo; . Pìcifíc Gas & Electìc Cu; ...... A-/Stible/iH BSB/Stable/A.2 f:Sßt/Stable/A.2 ..Average of past three fiscal years.. ..............(Mil:$l Re\r"et1ues Net ¡nr:ume fmm r:nt oper. 4,4U4.3 ,1797 1.7&1.0 HJH.O 326.5 t 3,21 a.g ......................... ?u.n.~~.~~!l. ~P.e.:~t¡.o.n.:;. ¡ppm................................. ¡ ,342.:i 1.157: 3,Ù3tHl Debt Equ!W umnz 5,54'L 5.926Z 5rL4 3.437.7Cii.û!a: axpend!uiws '1 Jl75.2 12,5628 .;A04.3 iO,ü32.3 Adjustd ratios Opet ¡n¡mme ¡bet. D&Al!mvemies j%) taiT intmest 1~¡)\ler.;l~l51xì EBi rDA interesrcûlJ!',mge ix) Ret\;fH on cap!t;;! í%)130 259 2¡U 2.2 t.g ....1'4.4;).0 ï.n mi 114 23.9 :~5.R .., ,.,~.O 4.0 FFO/d~~ht f~~l Zü.:? ...............D.e.btÆBl.H::Ai,ú......42....... ......4........................... ....................:1.3 ~Ftli¡y adjt:smd iíxi¡J(íng ¡lßttr¡;tirr:e;it obligatinns!. Table 2. ..fiscal year ended M,m 31- . Rt..ür:g histOty 200 2Ð 2001 20 20 ........... ................ . A,~/Stabta!A.,2. A.~/S.ulblelA.~.1.. .A~/StGb~i;¡ t\~.1 .. .A.,/St.ab~t:lA.,i. . A.~lSlilbl.e/J\.~l.. (MiL, $) 1.ZTJ. 1 4,258.;) ....4.3.9ß...... 99.8 1.4964 Z?8.n ,i,154.1 :i.396J~e"Jet1ue$ h¡¡id:i ¡ìwii nperatimii; iFHn 4,457.0 .................:-4?,9......... 1)&11 ?.Z:l7.l 4.4980 ...A~¡W ......;m¿~..... ............:~W\l) 92Hi 8645 ............... .N.e.t. ~n~~~!rm~. fl~~E1. ~;qnt:!~t.t~lg gi~e~~;~'t~9n~'~.. (';tipitai EiXti¡md¡tl;rES Cash and shmHmm :(lvestfr6til:59.0 1,l30.5 119.6117.0 'l.15ï.ü 590 1.375j) ww.standardandpoors,comJratingsdíreet 5 Tabla 2. Rocky Mountain Power Exhibit NO.6 P'!ge çpf 10Case No. PAc.~forp . ...................Wiïr;ëss:srüëë..N.:.Wiiiiärts... Debt Preferred stock 7.415Jl 5J335.9 5,873.5 205 41.0 41.0 $,71.5 5,967.0 5,0800 14..12.3 12,522.9 10,953$ Eal.ûtv Debt and eauiw 5.473.6 !3,185.3 413 41.3 4,425.8 3.750.7 9,900.4 3,936.0 2.5 3.0 Adjusted ratios nm intNm;¡ .:nvnmge M 7.8 2.S 15.9 163 n. ~,.l....t .-.....-.................,...................'...'~rFO.'W~t:'.êô~i.rx)'.,.,.,.,.,...-.,.....,.,.......4:9 . ... ...,t1.............3:5..237 'W.2Hl.9 nOn 110.7) (105) fFO¡dal:t ~ %) D!s!:.fetkmaiy cash flow/deht (%j ..............Niitcashtlowìm:i¡.~lLl%)............... Debt/debt and eauity ì%j ~ewrn i)i, common aiiii¡tv~%l ... .. Comm0l1. ctivk!end payout rat¡ii(I;i;adj. !% I. 'Flliy ad#lted (i~i¡,'rkig iio.~tfi;t;f!!m¡,t cbl\(ai¡¡¡r:$!. ...........;6,Û....................:72.3....... ..........£i.B. . 525 52.6 53.5 HI 68 7.8 7J)(J.n (L( Table!, .....3:9............... ...:rs no)) (5.6) ........S6J..............ll1......... . 55..3 58.0 5.2 13.9 ~i2 4H.1 PaeìlCorp reported _mounts ~.Fiscalyear ended Dee, 31, 2D- t1erK~Hßlj ........ .... ..... ....................................Operalinl....OperalÙII.. income income (before (beforeOM) OM) Î,¡.¡¡g.n î,Bmi.ii Operalini................... íllCom fafer OM) 1,!fìfJ.U Cash flow Interest from eltp!use operations 359.U Î ,~'inu.il Debt fì.4HHI Shareholders' equity 6..7~iZ.tl Cashflow hom operations 1,5(KHl Oivideudt Capitiil paid eXp!nditNl 2.il Z.32SH Stndard & POir's adjiistmeir Operating 36.5 ~t3=~$as 5.0 2.3 ,,11 :2 ~,2."1'1 4.1..~.J .,:J... ~ (2.oJ';)10 ¡toi..¡1m .¡101km¡imediaj¡~ Ln,5 hvtirif!s B3Porteê as l1Q\ìity P¡¡¡,tmtimment 359.H ..........banl'fír................................. nbligations A¡:wiec 11 H.l ~ntere$t not induded in . .................. .... 'li~~pöriiúj"dëbi" 2ItO 2(l(200 50 33.9 33.8 Giipita1izeó ~n!Brest 3£,0 ¡350l ¡S501 135.0) ... .:..... ............. f~~~~te.~ J~~~~~r!~~~~~. ..... ;1~~.'?" agreStl1&nts. ..............ß:i,:1.... fì~)?~,B?5.a3ï,5Jl,~ 56.3 9.0 90 5.2AS$et tetlft~ment í1bHgat!o!Js .....................T-ië(:liissifdiü6ìï.. r¡f !J!)floperatirig tm:milß (axpensl1s1 ~w 9,0 .........~:...............KUI... i; ..~.i. Standard & Poor's I RatíngsDirect on the Global Credît Portal I April 30, 201 Û 6 Rocky Mountain Power Exhibit NO.6 Page ~ 9.f 10 Case No. PAc~lØforp. Witness':'ï:i¡:ücë" ï\j:'Wi¡¡iäiTs'" Table 3. Het:~(;ss~f¡t:(nlOl' (lf working-capita! crmhllow flhanges.. T('la; anj!lsmiems 999,8 (lQ5)973 945 ~402 781 43.1 2001 ¡10¡130.9) Standard &'..p'oor's..~~j~ted amounts .........................Miiiiitëir. .. . "'"7415ì3 - -_.._._.--6~71r5- Operatig income lbefore O&A) l;üñ:::r' EBITDA ......T;ni:rB..... Cash flow Fwds Interest 'rum frm Dividends Capital flIT eXl!lle operations operatioiis paid expendîturBS "'"l ;ZilJ:......... 437:7.... .. 'n';43: T...... ... T;ï!i(: 1.................-::il............... 'l,'J9'l:1 Deb E,uity ~P;3dflCùrr r:i1pùrtoo amütmts :;h~t~"tn atß mken from ihB t.umt3m:y~ fir::3nda~ S!:3!t3rnl::~ts bm m1ght ir:dude .adjHstment.s mace bv dam nmvkiers ::1' n:das~üfk:ßtjßß~ marls bv SI¡¡¡daù & ~ei;(s ¡'MlY$ts. f'lf.ile n€Jf.ihai 1\'-'1) repmted ¡¡ml)~lt~t$ i¡¡¡let'totíflQ ¡nt:l)me ¡Jf.f¡¡f. ti&t. ¡md cash Hi;w ¡¡om ¡iperstioii,.¡ tot'f. ~st. !(l ~ier¡.f. mere li~Sjl (lf. Sta:1sm ~ P~.H' s..ad~u1tf:d arn~um iupe:.~tt~,g ~nCO:11~ ~~fUft. Ð&A ~~1 Eg:Tt1~.. &.nd tasn fk~v fr.)m nperatlMS and fUt:..'Ì fr;)m operat~on1. respoc1i¥e~l~. Cùn$tlt:en~'. tr~t. f:fst sect!co ... ~E1 8.~'1r~ u~hles mav f:ß:3)is:~ flHtl~:s;r:t:~ d~Sr;f:pt:i'1nS ;mt1 &;-:mmt::. ww.standardandpoors.comlratìngsdírect 7 .. .J!lfB:i~ l 3tK~1:5lllf;i~.. Rocky Mountain Power Exhibit NO.6 Page 8 of 10 Case No. PAc.~Mforp Witnëšš':"šrüëë"'i'i. wilíäniš.......................... ~Unk:s~ r:h~f\'V¡S:ß noted~ aH mt¡n~ in lhi!\ report 8.te gfohal sca~e rating~. St~nct&td & ~c:r'~ cred;~ r&~~:~s on the g~nha! sra!e ~r;~ t:Q:'ll~n$n:t. a~m!\$ (fjtmtr~as:. Sr~,nclft! Standard & POOl''s I RatíngsDíreet Oil the Global Credît Portal l April 30. 2010 s . ,lSiH2;1 l 3t:os~. Rocky Mountain Power Exhibit NO.6 Page ~Rf 10 Case No. PAc.~forp Wiù,ëšš.:.ï:l¡:üëë.f'j:.Wìíííärnš.......................... :""*W.~~.: ""S:. š.M š. .:;:. ..:~. ...'.., ~':..... _. _...... .&.~nn(s. ~:t~~di~ .rat~ngs. nr:.s. l~iltiml.d .$f.(~te. .are. rehHj~e .ttl.::blj;nts .cr .cbjkj(á~~'1$. w~thto .tht .srlf~('..:fi..t.:).t;n~l... ww.standardandpoors.comlmtìngsdírect 9 Rocky Mountain Power Exhibit No. 6 Page 10 of 10 Case No. PAC-E-1D-07 . .................WiinëSs:.i3rüë"ë.f\:.Wi¡¡¡änïs.... GCj"l"'fk1ht i c ¡ ~~mi by StmmsRÌ & P¡icr"~ Fin;md&l Serè:es LtG ¡S&PJ- s s¡¡hsi¡jk:fV (lfTliii Mr.Gmll"Hm Gr,mpan¡es. lnc. .,\¡j right, llsi,,,,,d. NCCÐn~f.nt. flnt~udlng--raû;:¥i:~;-ocre:j;t~relB1;yj-analv~es-anddata~-rn~x)et--:øth\~~ff.-orcther-aPf)licaûo~lnr--íwtrRJt therefrom;.m.-8!W .p8!t-thereor ~Ct~1ttrnl ~nay' h~' !rH.::diHmt t¡!'lefSll "flglnßll¡¡¡'l repmctui:¡¡rt or ::!i:;rll1¡¡md ¡:1 Sß\' fi1ff by ¡my mmlfs. ¡¡t ;¡ti1red in ß ¡jitabs.sr: (\ ff:td¡,.:al "ysrmr:, W¡thClit ij~ii púrn 'Ndwir: perm¡:i~lcr: ¡¡ sSef'. Tlm Cr:r:tent -s:m;l nùt he ;.iræd fur any t:t!a\:~'ft;; tX Ut"'mti)o(:ied purposes. S&P~ rt.s affHl~tes.- and any tn¡td..~rrv- p:"J\fk1ers, as we~¡ .as the~r d;rarw!$, ~ff!cß(s. ,sì)arßh(~iders. ~mplov(.~s Dr ;Jgijnw ~:rUHHct:Vi~h S&P Partl~~S! dH not 9uìiìiim-i~~~ th~~ ;ac,€:urac¥.. cmn~:letE:n-;;"$: t:mß~¡n~~$~i tif ct)¡),iÙlhmt-1 nf 1hß Gnntant S&P Pan it~S iìre m:: E~~p,cr.~t¡Me fl)r any errnrs çr nmlssi¡¡r.-s, mgardles:i uf thi' ~alJ~e, ti:r me rewlts o!imirid rrum the lJ~e (It the Com¡mt uf fM thi, s:¥:ûrit' or mair,t¡:':MCil uf any (Ílitli input bV the \:se!. 'n1l CMmm is ....¡:r£Nlt-t;:J"m csi1"a.'!s"æslK. St'.P'P;\W¡ESf.1ii;ClAìM'r,\!IV r~NU i\tl EXffiSStlRil1PliW WAiìfANflES;diNttl:iUlNG; iljf'NOTUMrm.1.m;'ANY WAHHANHlSCF............................ MF.CHANTABlUTY OR mNESS Em A PMTICULM HlRPGSIi 0:l USE, mfHJGM mOM BUGS. snmVME HlllRS OFi DEFECTS. THAT THE CGNTHJT'S FUNCTIO~.ilNG WiLt.8E.IJNlNH+iRUPTED on "iliA: mE CON1U.i W'l OPf.HME wm.¡ AN,' SOHVVA!"U': OH HABCWAfiE C()Nf-¡GU¡lATiN, k: no event shaH s.SVP Pa!ties b;illat:te to ¡iny pm1:r fii¡ ¡my (!Ìlei:t. !nc¡rai:¡, jr;r.(!¡l:¡¡L i:K¡¡mrilat¥, ¡;¡¡mpml&at(lt¥, ¡i:flth,~, !;tiadal (lt cil!isaalJ:miill dsm¡;t¡iis, ¡:¡¡sl:. ;iXpll;Ses. iiigsl fem" cr ;cs:~e:i f~'lcl¡¡d¡ng, wllÌlmlt i¡m¡Mia::, k13t im::i:me r:f it)st ¡:n::l¡ts ;:f\d o¡:¡l(rt¡nirii c¡¡stsl in r.l)¡111ettiO¡1witr; ¡my 'ise l)f ti'ie Ccntent even ¡I ¡¡,!vsed of the PGSSlp¡¡¡w l)f such dim;:lies. ...................... .Cr!ì(iì¡;'ßlitiidä:'al-,sës:¡íihìd£iigratlngr,;ä:'d r,¡,'üiiiii:\ts ìithiiC&iitiir.i: äiß it,1tf:miif, cifri¡i¡,'\,òìì ~scr lhßcl¡f:t~iiY äi!i f:#:rë:i~èd är.ciiòtsL'irimf:iiiS i; fud il. F'f.c:)mmendatk:n~ tt) pu~hasa.. ht~kt, Qr sa! j a:,:y socuritia~ or'to ma~e (l,r-v lnvest'ent riøcislons.- ~:&P assumes t'0 oò;igatkJo tn update the C(lote:':t to; :O\\ling pubi¡('at~:)~ in anv fOtm t~r for~"t~;~t Th~ CQ:1tef~t sh:Kiki nm. h~~ tf~Hed n£i and h; not 3. sulJstitute for the ~ild ::. ji~dgmenI sn~š e,K~3HF~f~fK:e Hf ~hB user,- it"; fnam;y:-mfe~t emujtweß.t~ 3n\:~sors (Hlctlnr d~ents \l'èien rnak~ng ;nvestmem and nth~"l. busln~ss ~jE(:~s-;ons, S&P's Qpk~t~"1 .:ü1d 3nalys~s do- n::~t a~te~~~ the sujtahiHt';øf any set-urn)'. S*f.-\1oos not act as a. ü~ju(;:ary or iUl ~nV~$tmeBta~wlsor. V~11tia S&f' ha~ obtaim~~ informatlun from t~ot.rc~~ :t beneves to he rei;ah;~" St~J~ ~~~S nUt i3~rfnni! an ai~d¡i and u'f:dartakøs nn~Mv of d;J dm9tmt~eQr S&P keeps certin ólctMties ùf its ò;£:t'e% U;1!" sepóliól,e 1m;) each iilher lri order to p;esere ,he ir¡dependenie art. Obj!!ct¡"¡iy of ú,ek respllth'e õìcth'¡tie,. As a result. i:¡mJliii busì;!ss ¡!fits ;~f S&F m~ì' h(l,'¡¡ i¡;f¡irmatl(ln tI1ìit ì;¡ oot ~w;¡¡a::;e m ¡¡h¡ir S&P b¡¡¡;¡nei;.~ i;nito. S&F hilS ~;¡bl¡slmd p(l!i:¡¡¡S ;l¡ic ¡lt1!l;lEiHi$ to m¡;inw¡n the c:)'"fjde!)t~at~tV ut cßrtain n($n.-ltb~k ~nfuañQn received :n con!".ect;on ~Vtt~ ead,, a.na~)'trea¡ prot;eS$. ......." .s.&~.in¡w. mte.i'i~ .ç.¡iffri~r,;.¡¡tilim.fQr ¡t~ .1.¡tj¡i;J;,. ar,!.I j;~rl¡i¡n.!:.¡.!..dlt.tlJlij;tt¡j ana!yl,~s,.rimTIaH'i. fH.lff. ¡~;.:;l~r~ .;.lt.tl¡.¡;j¡;t)'!¡W~. Ql.".¡jtt;rjt¡e~¡. w Imtt. ooHyi.lì);,. ;;~f .¡.W.~!l~;.¡.iii?'.rWt...... !ndtssemin;3te ;m opir.iG::s 3fin (1natses. S&?~ pub!:c f~"H~::gs l:r:r an3~;¡SeS aJr. mad~ avaHahtn on ;rs VVßh ~üte~. \\i,,\(O~~.;;~,;mdardarlritl:'$..-rùm in'ee of d:argl.t and wi""w.raüngs;Ji¡er;tcmn and www.g:ehaitw::.tpo~til..wm!s;ilscrifli¡onl.3ndrm.! b;i d¡$irjhii~ üirm,¡¡h ether means, intii.d¡ng via S&f' publk;3tlen~ arld third-party redi;:trihu~~-:tfs. Additic-r.iS~ h:f-t1frn&ti~~ ~hùut ~~~r ratings fl.(:$. :$ av;sEl:r~r. 3t 'V..r\~1i~'i ,st.3ntì~ftiti.~dp,m:;.c(tm.lt&fr:t~:g$fuß:i. .....R~~~_$1~~illl~~I1¡1¡1¡~¡1¡~¡~m~~~~¡-..... Standard & Poor's I RatingsDirect on the Global Credît Portal l April 30, 2010 10 Case No. PAC-E-I0-07 Exhibit NO.7 Witness: Bruce N. Wiliams BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ROCKY MOUNTAIN POWER Exhibit Accompanying Direct Testimony of Bruce N. Willams Standard & Poor's Ratings Direct PPA Debt Imputation May 2010 Criteria I Corporates I Utilties: Standard & Poor's Methodology For Imputing Dent For U.S. Utilities' Power Purchase Agreements Primary Credit Analys: David BCldek, New York 111212 -438.-7969; dtlv¡¡UKJdeki'9'staii(Ì"niaridpoOfs,wm Table Of Contents The Mechanics Of PPA Debt Imputation Illustration Of The PPA Adjustment :Mcthodology 5hor(- Term Contracts Evergreen Treatment Analytical Treatment Of Contracts \\7irh All-In Energy Prices Transmission Arrangements PPAs Treated As Leases ......"Evähülting"Th"e Effècf"Of PPA~l" ." www.standardandpoors.comlmtingsdirect 1 :m~m:14 l Xill~Zl~ Rocky Mountain Power Exhibit NO.7 Page 2 of 7 Case No. PAC-E-10-07 'Wiïnešš:"ä¡:üëë"N:'Wiííiaííš' Criteria I Corporates I Utilties: ...................... .Staiidat.d..'.&...Póór's...l\ïIëthódoi.ögy....Fot~'..Imputirig' Debt For U.S. Utilities' Power Purcliase .......Agreériérits f'or rXlliY y(~ars, Standard &: Poor's R¡itings Services has viewed power supply agre(~lIents WPA) in the 'U.S. utilty ........................Sêêior.ûs.ê;:~ù\thïgfr:í(t.~d;.aebi~nkt;;tlíîatlc¡är()hìlgati(;lls.iliiirêpí:;šeñt.sllhštlttïiês.tt.)r.ë1d,i=flíiiñc;,;acû.pltâr..... itlVestnwiirs in gellerHtioii capacity; In a sense, a utilty th;u has entered into a PPA has contract(~d wirh ¡l suppii(~r to make th(! financial investm(!ll on its bchalf. Conseqmmdy, PPA fixed obligations, in tile form of capaçity payments, .............. ..........medrhrdüíüüll.hlä lítiHtv's'fìmmd¡ll'mettkS:'11s:.tl:Riltìih.tht:V'ài'e'p';lfrnf'¡l:UtrlìlV'$ .t)elirnneïu.cäiöImlïšti'uCfutt.nmt...............................-l .... ,'-,' .' .l '. '. . .. , ate inçorl)orated iii our assessment of a util!)s cl~editworrhÎl)(ss. ...................... .\~Çea~jui;t tttilitiei;'. ati,uicìaJ. rn~tríci;,. in~(~l'p()ra~nG rP 1\ . fixe~(~blìgatilJns.so . that\"~. catiC()rtl~ll't~ ~(~riil~ni(1S th,it.... finaiice and build generation capacity ;:"U1d those that purchase capacity to satisfy ¡;stomer needs. The analytical goal of our financial adjustn:ieiits fol' PPAs is to reflect tìxed obligations. in a \ova~' that depiçts the çredit exposiire that is. ¡idded by PPAs. That said, PPAs also benefìt utilities thaI' enter into contracrs wirh suppliers beçausePPAs wil typiòillfshiff'iâdoùsnsks..fò ..thcsùpplíers,. sùchasctiùsh;údi6ù...ris.kàùdúiúst..úffhi 6peràtiiigfisk:lJPAscaiiâlsú pro'vide tltìltíes 'with as~wt díversiry thar inight not have been achÍ(~V~lhk~ through sdf~huìld. 'l1ie principal l'i$k home hY'1 utilty that relies onPPAs is the recovery of the finandal obligation in rates. 'I11e Mechanics Of IlIlA Deht Imputation .... ............ .... Astartirig. point .for. .cakulnting. the. .debt. ti). heimpur(~d for. PPA.,rdat(~d fixed.()bli.~;uil)n~. c.ai:.l)(~. foundaml)ng .the.. . '\.:ommitments and eomingenóes" in th(~ nott."$ to;1 utility's financial statem(!nts. \'(l(~ cakulat(~ a net present value (NPV) of the stream of the o'utstmiding cl)nrt'acts' cap.ieit)' payment~ reported in the fìn¡indal ~ratt~nwnrs iii) the foundation of our finandat adjustments. The notes to the fin;i!l:ial statements emimenite capacity paymeiir$ for the (Í\re yenrs succeeding rhe aimualrepnit and ¡l "dwreaftcr" period. Whil(~ \\'e have ,l(:cess to prüpderary forcc.:'l.sts thnt show th(~ derail tirderlying t1w COStS ............ ...... ......tliat.~m1..a¡Iialg~iH1~ited..beyond.thc..fiye.' ye~u li(lrizmi~.othcl's,..f(lr.puaKlSt$...of cakuiatÌng.~m.NPV..candiyide.thc........ amount reportt~d as Mthereafrer" by the average of the capaciry payments in the prt"Ceding five years to derive an approxitmlt~ tenor of the amoimts ¡;ombined ¡iS the sum of the ohligatioiis beyond the fifth )'e,¡ir. ............ Iii. eálcülátí:rg. déht. èqüiválëiits, .,¥e. àlsÓiúdüdc .iiè\vcù¡ü'iåds. rhâfwH!. cóiillrieilCédüiiùgthë. fóiéciis( Ï;èáód. Süch..... contracts an~n't rdlccted in the notes to the financial srntem(!nts, bur rde\'ant information r(~garding thcse contraçts ate provided to us on a wnfidential hasis. If a Wntral.'1 has bt'Cn execiitcd but th(~ cti(:rgy 'w:ìl1 not flow imtilsomc ....................... . later period, we won'timputedebr fo:rthatco:ntractuntHtheyearrh:at energydelive:riesb\."ginunde:n:hecontiictif.. the c(lntnict repre$(~lt$ incremental capacìl)'; However, to the extent that th(~ contra¡;t wil simply r(~piace an expiring contract, ,ve \'V.m il'npute debt as thou.gh rhe funirc contract is ;l continml.tioii of the existing ci:lItracr. ..,...,.,.........1......1..........1'................,..................,.......d............................................,................................,..,.................................................................................................................................W(~ C¡lCU arc tie Ì\"PV ot cl1paçity payments usmg l1 discoi.mt rat(~ equn'l1knt to the company s average çost ot debt~ 1)~t of securitization debt. Once we arrive at the NI'V, we apply a risk factor, as is discussed below, to reflect the benefits of regulatory or legisiativ(~ cost reCovci:y mechanisms. Standard & p()(Jr\ RatingsDìrect I Ma)' 7. 2007 .~.. . .. . . . . . . . . . . . . . . '.' . .s~~,~ar~')'U!ò._f.c~r$...A,:~Ji~~t$,(~~:1~~r~~~t~,.,.~~,mpr:.m.~l::~J~:s5$rl1i=l~1tef:.'i..~'1t¡tt.::~.*t~$. r.~".:m~:):;:r:~Ls:;~.~.:f:rm$.,qtu*r;/i)i*~¡~.t:~~:;r.tr:_.tl.ßJ$.~tPlt9i~:. . .. . : . . . . . . . . . . .~il2in4.t..:wfšl2l:$t . . . Critt.~ria Corporat(:fs Utilities: Statulard& Poor's MNhodology for lmimtùig Debt F~E~~~~~~~¥,.'ercJ~';~~el1t$ ................................ .......... ...... .............. ..,....................... .......,............ ................................ ... .................................WitrÏëšš.:..i3rüce .i\:\iiriiiäinii........... Balance sheet dcbt is incrcasedby the risk-fa(.'toNidjusted NPV of the stream of capacity payments. We deríve an .....................,. ~'ldílIStt'lJ .debt,ti:~cap.iwlízati()i:l..r.atio..hy .addiEig..rht~. adì~lsted.NP.V..to.,b()dl.. dU.~.niiiI!~11Iti:t.~'lnd.the..dell0irinatl)t:.i:f thar...,..... ratio. w(~ cakulaf(~ an implìedinrerest e)(p(~nse fot dw illpim:~d debt by multíplying the same iltiHty ~i'\wag\~ (:ost of deht ........ .üsed. as. thedišëöütit. tate in. the NilV' .ótltülatiòt1. by. theàmöürtt öfimputeddebt;. The. ädjüi;tedFFO:,uFirttërest... expcIls(~ ratìo is çalcuJ¡:m.~d by addirig theirnplied interest expense to both dK~ i:un(~nlt(r and denominator of the cquiuiöii. We also add implied depredarioii to the l"quatiotls numeraWr. We calculare the adjtisted .,..Fl04IN.otal.debt.mtìc~.hy.adding..jmput(~d.dehtto.the.equ¡ition'.s.denomínator..andmiímplied.dcprecíatíoll.(~XpimSt......, to its nuni(~r~ltnr. Our adjusted (.i:ish flO\'i' cn~dit metrics indude a. depreciation e:irpensc adiustment to FFO. "fhis adjustment represents ...................... . á'vë hide Jàr.'òijjtiiiiúg thc' ù\vúûshíp:Ukt' afti:íbiites . úf'rhi:~'ëóIÏt¡:àërëël¡ii'id'áiii:r iëiliïjCrs.thë.dfèds.úf.ìïllpi:lüü'iòiiùïi'............. rhe cash flo\'\' ratios. We der.\'(~ the d(~p,'edati()n expense adjustment by nii.dtiplying the re.levant yeai:'s capacity 'paym(~nt obligation by the risk façtor and then subtracting the implied PPA-rdated interest expensc for that year ........................ frtm.'l. rhepi:dncff.f the risk . Jactt)l'. times thescheduled c~ipaciry. payment~. Risk Factors 'fIle NPVs that Srandard & Poor's cakii.laH~s to adjust n~ported financial ineti:cs to C$lpture PPA capaciry payments are nii.dtiplíed by risk factors. Thi.'S :risk factors typicall)r range between O%¡ to 50%, but can bc as high as 1 OO~~h ........ ............... .R~~k. f~i~:r.():r~.. 'l.r.(~. ~I~ ~i:r.~~l)'. :r~~ l~r(~~l. ~ 1:1. ~~~. .~l:r.(~J:s.t ~..~ l~~l.? y'~l ~l ¡~i'.il.i ~l: pf. .i:~'K~il¡~ f:().l'. .():r. .l~~&~~l~ll:i~~~.~' ~?~~l~~. ~'l:l~.~~~.. ~~l:.()~'~ry......................... of the capacity costS associated \víth power supply ai:mngements. The stmngest recoyery mechillìsms tl'nslate into th(~ smallest fisk factors. A :i 00% risk factof would signify that all risk rdated to contractual obligations rests on the company ,'iith ilo inirigatíng l'cgubtmy or legìshitíve support. r.or example, an unR'gulateò energy company that has cntered into a tollng arrangement with a third-party supplít~r \vi:i.ld tx~ assigned a :i 00% risk factOr. Conversdy, a W~~, risk Üctür iiidicat(~$ thar the burdi~n (~f dw coiltractual ... pa rmÇlltsxesrssalely\yithratepa ß.~rs. '.IJiistY,Pgf arr.irige11eiit..isJreqncl1tlyfmlri4..¡immlgre.gglateqi.tíHtíes..tIWiaÇr as conduits fm the ddh"eryof ,1 third party's decrrkiry and essentially ddi\'-cr power, colkcr charges, and remit f'W(~!ll($ to the sl.pplb's. T!:eS(~ t!tilti(~s have typicaHy been dii:ect(~d to sell ¡itl thár generat1øn assets, are b¡im~d from developing new g(~ncnition assets, and the pO\\'cr supplk~d to their custOl1J(~rs i& sourced through a state ;;iuctíon . ........ .......(;;:.thi~d..pä:tti~š~.ïcäv¡n i'thë'ùïiiitiëš"ù;';íct'aš 'j~të~~ëdi;~j~;; .l~h~;cë;~. r(;t~ií' cušrt)~~~;:š"ä;~d'thë"ëi~~t;:dtY. .šupi;iië;:;;~"""""""""""""'... ... Intennedhte degrees of recovery risk ¡ire prcsented bya number of rcgulatory and legislative mechanisms. For .................. ..... .exainple,. .smi:le. .I:egul ¡If.on .use..a. .utilry 'sratcc.se ioestahlhh .basCraf(:s. that. .pnwidc. fot. thc. .I:eco:\'cry. of .the. .fixed.. costs creatcd by Pt~As.Although 'W(~ se(~ this type of 111echanism as generally supportive of credit quality the fact f(~in¡üns that the t.itílíty wìU 11etd to litigi:ite the fight to re(;over COSts and thc pn,idencc of l~PA capadty p¡iyiicnts in . . . . . . . . . . . . . . . . . . .. .. .~il(:~~~~iy~r.~t'?(:~~~~tl:ii;i~sll.r~()i:lg()iJ'lg rCCI)\'ery ()f itsfÎ~e~E~~~!.s~ .tî:ir~(l(:~'~Yl~:'\J\~'e.e:!l~pi(ly¡~s()d~!l'.ri~kf¡~~.~()I:lr1. . cases \¡\!h(~rc a regulator has cstablísh(~d a pm:vcr çost adjustment medianbm that re"overs all prudent PPA costs~ we employ a dsk farmr of lY¥Q because the recovery hurdle is Im'l('r than it .is fni: a urilry thin must litigate time and again its right to rec(wer (;osts. We ft.x:ogi1Íi:e that tlwreare certain jurisdictÎons that have tri.ie~up mechanisms rhat are more t.n'orable and frequent than the review of base rates, but stil don't amountto pure pass-throl.ghmechanisms. Smne of thesc mechanisms ww.standardandpoors.com/mtìngsdírect 3 ........ ... ... .. ..... .St~n.ir:~t&_f.~,~t:$._.AnJj~m$Jt:1tr~.wt.Namp:::~u.Q(d.~$MtJ1l;l.~ltiet:,.r~tbt~.:t..~~r~$. r.~~:m~$~¡r~tl:..s:;~.~I~nrl$.,~tU:it~/r:i$t~:~~_t:~~:;H~rI..1I(:JS:1t~tg~. . .,. . .;jRa1'41.:¡'li':4~1.... Critm'ia Corpon1tes Utilities: Stmulard c:; Poor's MähOtüJ1ogy For lmtmtùig Debt F~~itttJntr~~~~~ær cill,llNb4t(1"\~el1t$ ....... .......................................... . ....... ................. ,.... ............. ..............,................ .......... ... ... ....WitrÏešš.:ï3rüëë.ï'¡:.Wi¡¡iäinš......................... are triggered when certain financial thresholds are met or after .prt~scribed peúods of time have pas...ed. In these ...........iiist¡lriCcs,..in.(:¡l.kl.1atírig:adjllsred..nitios~.t\'(:. wil.t~rip1oy:.¡¡..ás.k.fac.wl'..het\.\~t'eri.Jhc.rt.~'iî&(~.25t~:ó..1:isk.JactOl'S..for....... \.itilties '1\:ith power cost adjustment mechanisms and 50%. HllnUy. 'W(: vÎe\V kgislativdy creat(~d cost recovery rlK'L'hanÎsms as longer lasting and n:l(n.~ rt~ilenf to change than ..... ................ .i'tgûláwi.)i. töšt i'eC()t.eiTVehides~. CÜiisëqütjnly~süch. tilt:'Chiüllsms ltád t6 tisk fäëtütš htt\\i('eli. tJ%. ¡m:d. 15%;... depeiidÌng on the legislative pn))Ì&iOllS for WSf rtx;overy and the supply fimctkir borne by the utility. Lcgì&latìve giiai:nrces of crirnpk:te and timely I'(:covery of costs art: parricularly imJx)rtanr w achieving the )owei;r risk facwrs. Illustration Of The PPA AdJustment Methodology ...........JJ"W.çfllqiJar¡m~~.9fthe..4.tht. Nt;jyak.ms,. impJje~l.jr~ttWSt..eKp'en~e,..d.er.ny'¡¡,~t¡i:m.~:KP'.en~t.. ~.ml..aqiY:~t~~.f¡nançjJd......,.. 11)~rr.is, usin.g risk factori;, arc ilustrated in. the foUowirig cxan\ple: " ~ (SO5)Assumption 2,.(lKi..nmi 1,500.000 '444,0;)0 Year 1 Year 2 Year 3 Year.Year 5 Thereaftr Ga::!; JÌTim npnrõ,l1inns rumh¡ Jrom oper;:tkin$ ... .lhtêf11lt éXpér!Sé Directl issued debt Si)OfHemi debt 500.000 ......,...................... -ltl!J'.tetm .o'iie 1,'V~thmtlie' ye,\l........ .. '300;000- ................................... LOfl~H:em debt 6,500,000 Shal'eÌ'okler's Equity 6,miu.OOO .... ...... .F~i:d(:~¡flili:ÜVi:li!!i!n¡trni:Elt~mm.Ooo ..... flO.OOO ....... J300,(IOiL 600,000 . ßOO,OüüßOO,Oüü ...........4,Züü.JIOO~ NPV of fixed capacity eomhlitmeir Using â ¡¡O% disi;oimt rate App!icatinn of an m:suITsd 2S% risk fäêtM M30,30B '1,257.577 lmp¡!ed ¡nterest I~)tpansa' lmpliiiil depreciation expense 75,455 74.S45 .....Unailiusfuûr'atìns..... Fro ti interest bd u tH) Ü) t(H~~; Dt~ht (%i zn.il ...... ..........55JI.............. ........... Debt to .capitaiizatl:ll 1%1... Ratios adjustd for deht iml.utatíoD Fro tii interest Ix)§ ....... ....... .......... .fmmMaJI:ie!;tJ%t:~. Debt 1X capiwliwt!!)n 1%1" 4t1 ..........HUL 590 'H!ereaftet approximate l'€!ai~;; 7_ '1 he t=;ii'e,)t ,¡ear's ¡limUed :ntei-e,t is su!ilnitted ft~m the ¡IF;iUct of the ri,k facmr inlllti¡iiíed nv the c¡nent year', caparlty payment Md,i:¡ imp¡1erlmr:rist ro the Ilmr:~mt\)i and ;!¡;¡;¡¡m1nalm a¡;d adC:i ImpHiid i!eprec!¡\t¡r ro "HI .... Adds ¡mr:~¡M ¡)1ir:i:,t1:¡i:1orJ i!Kjeme t~ F'Hì ,,1'1 :ml'i¡~d (lah; III Nl¡fimlc . ..... ..d.ep¡,.nA.ilj~.11l1!Ht!~9'~M.m.~lm¡!.¡¡!i'. .f\Jlii!!1i~m.¡¡i!at~e. !i!jm!ii.lr;!m¡:fr-P:::fi¡,')~¡ ~1rfrn.i¡P'!j¡¡¡il¡¡E;s:.Nl.Y::Net.¡:r.:~¡!(!tl/~im!:.......,... ............................. ... ..... ........ .............. Standard & Poor's RatingsDìrect I May 7,2007 4 . . . .. ................. .St~_n~j~m_&._f:l:~n~._.;mJja~t$J~!t~n:trL.~~1_m;~"i~n.tu!~$;1~mi:'Mìt:~i1..W:~m_tt.$:&~:~$. r.~';.~r~~:;¡~_~t..:1(.-.:.erm$._~tU$~:u;$t~¡~.t:~J:;r.tr:,.'t:ja51.~;g'... .. . . .;¡iija*I.:Rm-:1. . . (" . C" 0"1" S' 1 .. l) t .'1 i I ¡ F' I . I') i F,RoGkJi~jn:PQw,r_,ritt~ria_,ml'0n¡les 'fi itws: tmWill(J (:"t 1 oor S lV t~tfm(.') ogy or m¡mtmg . eot ~kh\6ltNd-:IIf~tt5¡ 51~ifi¡(1r CiJ~flft~\i~ents .. ........,""""""""""""""'" ,. ""',.. ,. ". "",.. ".. ,. .,"""',.................. ....... . ... ............ ...,"',.,"""",...... ,..........,' ..,"",......".........,"",. """""........Wit'rÏëšš:.šrüceN..Wi¡¡¡'äníš'" ....Short-Term.Contrac,ts.... Standard &' Poor's has abandoncd its historìcal pnilticc of not imputing debt for contnKts with tenus of three years or kss. However, W(~ understand thiit theæ a-re some urilties that use shMNerm PPAs of approximately one year M .. ..... .lei:i:asgap fiUel"s. pending the. t't1Ustruçtionofnewcapaçity.1u the. extent thttt. suçhshorNerm supply. .trrangettt'llts.. rcpresent a nomilliil pcn.:entage of dell1i111d and scrvc rhe purposes describixl above, we \~til neither impute dcbt for s\lCh contracts nor provide evergreen treatment to siich çontnK,ts. Evergreen lreatment ...................... .X~~~. N:l.Y. .~f. .r:~~. ~:~'~.d.. .(~t? li.~oir:i~ii~~. oi~'iiii.~ ~~4. .\:vi~l~. oi. l~i~~f(!li~i. .(~f. .~I:,(~I:r.~~~~~i~. ~)l:. .ii~f:e.i:i~i~~d.:i¡i.r~~~~!.ii:,. ~()~)~~¡~':'!S.. S~ ~1.1~~1~ ........,................... to distortion~ in a l1tilty's fhiancÎ.ll profíe n~Jativ(~ to the NPV of the fixed obligations of a utilty with a portfolio l1f PPAs that is made up of longer-term commitment'. Wll(~re rh(~re is the pOI(~lUiHl for such disti:n:ti(lns~ raring conmlittces wil çonsider evergreen treatment of eKisting PPA obligations as a sçenario for indusion in the rating . ...... áiläfysk .E,,~úg.i(:l't .ti:éäiiiiétit è:ùéiids. ihéreilòióf. shóá'~~Ùid .ii'ti:éi:ïièdi.ï!'ê~tÙii't. còtùúás tòidlëà. ihè. Iàiïg~ i:éi:iïi.. obligation of dectríc utílitíes to m(~et their çustom(~rs' demand fordoctridty. Whíle .\ye...liave..q)ii(:lii(kd...tliartherçi~.¡ilìltijr(~a P~ii)l...()fLirìlitìes\"'li()se..p()l.tfoli()si:iri~.!dsringa(ld..pr(úi~çreayeA$ dQlù meaningfully correspond to long-term load serving obligations, W(~ wìU ncverthekss apply(~vergreen treatment in those cas(~s where the portfolìo of existing and proí(~çted PPAs is incom;istent with long-renn load-sen'ing obligations. J:\ hlanker application of (~vt.rgn~ntrcatmcnr is not warf;1ln~d. Th provid(~ eve.rgreen treannei:t, Standard & Poor's starts by looking at the tenor of outstanding PPAs. Others çan look to the" cmnnltrments and (:oiitíngendes" in the nOr($ to a utílíty's firmndal sratemellt$ to derì\'~' ¡ill ............ ........ ...approximateteiior of. the contraçt:t If .'W.~. .condude. th¡it the.. dunuinn. ofPPAs. .isshoft. .rel~ltiV(~ to our . t¡llgt.'ted. tenor,.. . \ve WOlild rhi~i ¡idd capadtf payml~lts Illtíl the targeted renor í: ¡¡diii~ved. .Basi~don our ::n.ily:sìs of S(~\"el(ii c,ompaniès, we have dcrennincd that the evergreen extension of the tenor of existing CÜl1mlCtS and m:iti¡;.ipated contn:¡cts sho,11d extend cOntl"I,:ts to çommon of about 12 The pdce for the c.,paCÎty that we add \'ViI be dedvcd f\'m nC\v pea-ker tl1try economics. We use cmpir.ial data to establish thc çOst of developing new peaking capadty and rdleçt regional díHerences in our analysis. The cost of ,. """"",ncw,capac.ity. .is.tninshtcd.into"adollars. ,pcr,kíll)watt"yetl.rtkW.,)~carl,figurc ,using.a.wciglitcd..avcl:age,c()."t .of,capiral"....... ".'... for the utility and a pwxy c..:¡pital rcc(lvery period. .......Aïialytical.Treatfueïit.Of.Corirracfs.With.All..lri.EriergyPriceS.... 'fhe pricing f(ir sornePPA cinrracrs is srat(~d .1S a singlet aU-in cnergy pt'ce. St¡mdal'd & Poo:r's considers an implied capacity p.rÎce that funds the recovery of the supplier's c~ipital inwstment to be subsumed ,"vitliin th(~ ilii~in energy ........... .......... .i;i'i~:ë:c,:~;~~sëqi;e;iay~. ~,~,~ .l~;¡ì .1)~(;~)' ~~~i)~~d~,. ~h¡lrg~~št~~t¡~di~l$Ìl~\t(t~;ç~iîc~¡bt~~;~;¡n)pîi~:dc~~ì;~i~~¡ty:pain~ë;;r.. . associated w'ith the PPA. The $/k\'V' figure is multiplied by the number of kílm'\'tltts unde.r contrai:t. in cases of r($ourçes such as wìnd powcr that (::i:hihít vC.l'Y .low cnpad£yfactors; we wil adíust the kíltHv,ltts under Ci:imict £0 "ï'cflëtt.the. ;:üïtkipätëd'ëäpädty'fäëWt. tnat thë tesótù'te'ü'ex'tt'ëtëÛtú;ithië\'ë: . ,.. ,........ ...... ,. ,.. ,. ..... .... ... ..,""""""",.,....,. ""',., ,. ."""',..,............ , We deriv(~ the proxy cost of çap::1dtr using empirjç¡il data evidendng the cost of developing new ix~,iking çapudty. ww.standardandpoors.com/mtìngsdíreet 5 . . . . . . . . . . . . .S~.t:_n~ir:~t&J\~:~r:$.';~iiJi~n~$Jt:1~ri.~';tt,~.~aw~i.~tt.c.q§$~$rJ1lmt~~r:,.~...r'tK;~_:tS:&~~$. r''5~:;n.~$:l;~~i\:.S.f:~.~.:.erm$._clJJ.$.crt.:~$:;~tmt;r.tr:..tb~t~a~lv:'gt_. . ............ ...æm~¡;Wmll4::!1..... Criteria Corponites Utilities: Standard à Poor's Mähodólogy f'or ImpuJÍ1ig Debt F~Eit~1i~~~~~¥"er ciJ~È/Hb~(1enf$ .................. .......................... ... .............. .....................................................................................WitrÏess:.šrüceN:.Wìiiiiimš... .We \-"HI reflect regional differenc(~s in our analysis. The cost of new capacity is translat(~d into a $/k\'il figure using a ....................,..:\v(~íghr(~d..a11'(~11Igt.'.ÇlJst .(If(:Hpir.al.¡i:d..H.pro.xy.capit¡¡l.n~(:o\.ci:y..ix~ríod..Tb.ìs.ii:mlx~r. w:iJl.ht~.i\pdated..fr()m.tii:l(~.:ti:.:time.....,..... r. rdlcct prçvailing costs for the dcvelopment and financing of the marginal unit, a combustion turbine. ........ lráisrtssióíi. Attangemehts.. In ¡'.."Cent years, some utìliti(~s have entered inrolung-tertn transmission contmcts in lien of huildinggeneration.lii smne C¡iSCS, these contnlCts provide access to spt"Cific power phnlts~ ""hUe other transmissíoii ~irr;ingements provide .......;i:ëê~~,;¿t¡;c()ilïix;i1il\;êi.vh¿)lëiâl(;dëáriêir§.riï¡ir.h~t$:\x!e"h¡i,;e(~(;iïaiïa(;a'ih¡it'th~~¿ë.t);ix;s;:iftriiï¿iñì¿¿i¡:iï..................... ........ . . ............. arnmgemenrs represenr extensions of the lX)wer pl.nts to which they are connected or the markeù' that they serve. Irresp(~ctíye of \\'hether thes(~ trallmi&~on lines an~ integl":iJ to the ddivery of pow(~r from a speâfìc plant or are . .............wnduIt¡¡tü.whulemll~.inark.'et5;we.yk~\ythl~Se..arm:ng~ments.nsexhihitil1g."ery.strong.pMilld5.tO..Pl)As.¡lS¡i................... ........................ . SL1hstitut(~ for invc;¡tment in power plants. Con;¡equendy, w(~ wil ínipute debt for the fixed cost;¡ associated with loug-rem1 transmission. colirraCts. :PPAs Treated As Leases Sev(~rallltilítieshay(~ .l'ep()ttt~4..thattlieir;içC()lIntallts. dk1:¡lr(~...tll~ltcçrtilìn.Pl\~s..ne(~d t()bçi:re¡nt~cia$k~ls(~s.f()r accounting purposes due w the tenor (If the l"PA or the residual value of the asset upon the PPA's expiration. We haw consistently taken the position that companics should identify those capacity charges that are subjel"t to operating lease tfeatrncnr in rhe fil1¡mch,1 staten1(mts s.o that we can accordPPA treatment to thos.e obtigatiol1s~ in "'ïieiï .(;f'ï~;'šë' trë.~\t;nët;t~..th.ät.iš~.tjpA$ .tbai.;;ë~~i\;ë..~;¡;e;;;lÙi;g.ïëaú;..treatnlcí:¡i.for.äcët)uïttiïtg.purp(;$~s..\,;oi;.;t.bë..;;l.tb¡ëçt ... .................... to a 100% risk .factor for anulytical purposes as though they were leases. .Rar.h(~t; the NPV of the stream of Ci:1P~Kíty parmel1ti associated w'.ith these PPAs \\'il be r(~duÎ,'Cd by the risk factor that is applied to the utilty's other PPA ... . .... ëúiniilÌtiiitrits. PPM that. átë trNitëd.á sëápìtil .lëá:sës fói'ácëöüütìiigpütpös~~s. Will. iiöt .i'ëcëí'Ve l'lA. tä~MiÏicütlx~aiïsë.... capital le~ise trei:1tment indicates that the plant under contract economically "belongs" to the utility. Evaluatig The Effect Of Il:PAs 'fhough history is on th(~ side of full çl)st reCIWt.;ry~ PPAs ncverrhdess add fimlIdal oblígatioiis dwt ht;ìghtcn . .....fh:mndø.l..ris.k,..yet, )ye.;mplY:.ri~k.f,:rt9X$. .th('t. rel:hlt:edebtj.in.p.u.titim:i..t(~.reçQgnj7,e. th~.t.:u.ti.i.te;¡..tJ:mtxdx. .PrJ..lPAs... tnlIsfer sígiiifcmlt risks to ratepayers and suppli(~rs. Additioniil Contacts: ...................... .AtthtllfS¡ITo(jmrl, Newy~nkl11 Z12438..2ti9:arthut:.s.'rrKlilsafl(tls.tm¡t!iltjandpOOs.IXitl.... At!eeB Spang;?.f. New York ni ?1?.438-?'(J96; atlsen..:sparig!¡¡rcfi;standardandpnnrscom Scatt Tayior, New Yolk 11) 212-48.2057; scott.tay!o~standaroa!1dpOOfSCom .Mifl W Whirln¡:k, NEiw Yùrk 01 21i.4:~(t.ïg78; ì¡)hn_w!i¡tkl(:k~:¡mnuaf¡jm)dp¡)Qls(;Q:1 Standard & Poor's Ratiug$Dìrec I May 7,2007 6 .. ....... ...... .Sl~_G:j~ro.&.,~çt:~t..AnJjtim:sJ("4(,:n:trtN~~m~:¡.mJlU§%~(fl:k"tt'it:_.W:tnÇ¡_:lI:.*~:~$. r''l~:mt$:l¡r;_n:..s:;~.~.:trm$._t1tU$.clt1i$t~¡~_t:~~:;V::t:.ftl:J$5liš1Q;:. : .... .;)i;:mI4i.:R~lU!t,.... Rocky Mountain Power Exhibit NO.7 Page 7 of 7 Case No. PAC-E-1Q-07 . ....Witriešš.:..Brüëë..N":.Wiiiianiš....... Cùlwrìgl1¡ ~ 2LL09 Stand,!!! & f'iim's, :~ dMsì¡¡¡ !!f The McGrsw.Hll Cciii¡.¡¡nles, inc, (S?:"j. SM' ¡me!!!! lIS th,iu pmiy ¡ICe¡l¡,otS ìi¡¡'Je ßxc¡~¡¡~'e iim¡¡¡ì¡:w,/ tlghts in t1it dsts Ql :nhmmilìm: ¡ifOv¡d¡;ct here'n. This ;j¡¡¡¡¡/irifmmmim, may nniy ii" (,siid kite:'iiaíly f:;f buslnl''ss ¡i¡li¡wsß:; &:' :;Iì&li r~1l ii¡: usiid f.;¡f ¡¡i: lJüav,'M ci mi¡¡uthn:'i¡¡d ¡iiir¡:o;,,s, m~~emì!;at¡;¡ri,..d¡slli¡;;¡t¡nrl.cr.repmi:k~;t¡¡,ri.uf.this. datt'J1lfmmatkin ¡n.¡¡II'..fuim..ì,..stricily. tlt¡¡hibiwj.ii.:iiiiiit.wittl.the ¡i;i¡¡;w!iiten.¡J!¡m¡s~¡¡t"l.uf.S&R. 8¡;CSii,e.uf.t!' ¡ifs;¡ihmty ¡¡f human m m::chiirù~a¡ errcl by S&?, ii,; effl¡¡atf ¡)¡ ìi; thkct pM! lkens!lfs, S&P. its affmste:¡ ,111d its thj¡,! perty ¡¡c;isnm ctn :mt. g¡¡¡¡f¡¡ftte the ;¡¡:ci;r:i:y, adequac,:. cl)mpi~~t.nQS5 ~f ttvaFj.tbUlt af any :;¡formatior:- ar~d is not :.espr~ri$.:ble. fc~ any t.rrors or t:m~s~km.5 Of fOt the tes;.;lts, ootahioo from the t~~ út ,St~h :nfu;matioo~ S&P GlvlS ~JO f:xr.m.:ss OLL ~\lPUH) Wj\f-FtANliES,INCHml~JG, BlIT Mìl UMU1P TO. "',NY WAflflM..fnFS Or- MFFtCHAN1ABll.W on r-m..ø:;s r-OR A PARTICULMJ l1mmoc on USE. In ~ !l\ii:mt~ii¿;;¡ S&P, its a~filiat€i~ ~nd its third rK~IT ¡;(o~:t,st,m be ì~hlf: f(sr ¿;ny dkect h)(Hmr..sj)ß(;ia.1 ()l Wt1seqiientla.1 Ml',meS fr, MMect\oo with s;.!lscriber's 0" ........................¡¡t!;¡;¡s'ui¡¡ -(fttlf;:atain1mimaùon'i:ntaìn¡¡¡j-herein;'Atr.ecs;¡t¡sthe- di¡;,¡¡¡'¡¡;¡mmat¡m1.t¡mta¡r.o'¡¡¡¡¡Íf-,cs'~:hla:t .ìli-tmmiraûi:m'ir¡-m¡;-ev¡¡nt,m-ra¡¡¡¡¡;m-ntwi;¡,.¡¡-thd'.' ................ paf~Y of infrsrmatinr: tlf s-ofr..,,,~rß ki tl.:,mi;~i3t.ed, Aiiiyik seivites r!!¡W~j!l¡ì !ly Stsm!¡m! & P1l(¡r'S Rating:; ~:':~:F.s !Rstiil¡J:i Se:v:i¡;s) ¡3m Üi:i (¡'Suit nl :;¡;psrste 3l:tÌ''1tles ti¡;sigm:t !ll praS!ltie 1M ~i¡j¡:¡iMd;i¡¡Ce ;iiti iihiei;üvlty of nst\ngs o¡:inllir:s. The cn~,jit ratings 3;)Q ¡¡tisiivatkirs w!1tei;1Rlj timin a¡1l i;elely statemRnts of opin;lli end not stat¡;me;1l;S of fil~t or reommel)Qai¡ons to ¡Jun%sa. t:eld, ¡)r ............ .i~ll ¿r~:è~ùrltlii$ iiririiì¡¿ ¡iiiy nihiiF j¡¡~'EémiiiitdeCii¡¿iià Ät~ènì'¡r.t¡Y, ¿r.1túif:riinf,iil;\fci:~3t¡n¡ji&r.fu¡nr:tliii~iii~ 5li&ùhi ijriút:t;¡ nniiiiy äf:dítiitiii ú (¡mer Ìl'i¡¡¡liiii. cor.tiim¡d herein in ma~ing 3"y¡nVø~tment d'l;lsion. f)attngs are tisød on ¡;1fmniat'oo n¡ceiv;jd by f)aili'1S Seivices. (lt1iør divis!r,::s nf Str.dard & Plmrs ;r.;ylm :llfi)rm~~jmi that is nm (!\(aH:-h!l. tn flatings St:(V*CB;.. Standmd & ?cm'!¡ has r.stabli!thO ~)B;k::e;.: and ~lH)€:edt.res En ms.int;3in thH ccnHdm:l;a.Ht)t ~)rnBn~fKib!~~ l~ftirrnat~o-r~ rai:¡:j..ed dl;fing the liltir,gs ¡:rl)¡¡S~. . . . . . . . . . . ... . .. . . .. .. .&¡ú;;risšê;v¡te:lftie¡vi:sc;;¡Î$ir.ã¡¡;;ñfõibirái:ng~ji~;r,llè;:mù;;ñs;ii¡~;;¡s;~;;m~i~¡ir,¡ddthè;:;¡ti:iiîsr.;îeis~rr.;ldi~êêj;;¡úíir.èif¡:¡rdpr.ij,ê;;¡Îârtiè¡¡ii;Ùr,iîi:imilik;;Ùî\ . tr,e siicurit,es. Whj ie Stamlard & fuei's reiel'l!3 ttl¡; right to disseminate tM rating, i, rereiws no oovml!m fil àllng im, e¡¡ce~'t fr,t sub3cr,ption5 tri its p¡,bllcaiì;i/l,;. Add:t~Cr.;i~ ~nfHfmat~or. ;~~mut nür rat¡~s f!~~~s ~~ (~va;¡¿!l~~E: at 't"'..:r~\:,st~ndc!fi¡(tndpm3~~t,ccrníl;~:finln~l$(-eR~. ............. .t~rw. lt;S.~~~tra/~~~t~L lP.!.;. l:S.~~l~f:~ .b.Y. Sß:t .Hll¡~~~ 5.!HJ. ~~ngì.t;. ~l~~t~~~e.~.ijt~~t~ .iiu:d. m~\~ QNL"J:' _t~ .t~~9. .by. t~?: jnüj~lk;U;j.i .w. );V!1Qff _üm:;.ñ~¥~. b~eJ~_ #~sJ~-t .N~. ~t.~mJ.ug. Qt.... r:a$~~~:'s/ù$m jf)~ and nn ~imB~mnt:nw) (1c-ce~s via ther'''1me pa5.s~..~md/ü::-et tn i$. pßrm;¡t;~rl" r tl :"eprir.t t:,at'~.mf:, or us~ ~hl. data nr infn:m1tk:f1 oth than (1$. pr~:~riro herein. r;-cniaCl- Cgl.nt S&!\;,k6~;., 55 \-\:ater 'Str~et ,Nß\'v Y r,rRi ~J~l l00"~ ~: t1 ~l:li.438,.72aij or by e""m~~H ~n: r~saan~rLr~*,:est~!andardandiJcnrs.t10m. Cop)'fit¡ht~) 1 $9:l..ZilS Swr:da.tct & Ftii::"s. a ctivjsl¡) of lii", McGmw.Hm G(,mpa¡1jas, All flghts Rese:vad -_............~_~~~~~~~~~¡~1¡¡¡¡~¡¡¡~~1~~~~~~H~\~¡j~ ww.standardandpuors.comlmtìngsdírect 7 Case No. PAC-E-1O-07 Exhibit NO.8 Witness: Bruce N. Willams BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ROCKY MOUNTAIN POWER Exhibit Accompanying Direct Testimony of Bruce N. Wiliams PCRB Varable Rates May 2010 Rocky Mountain Power Exhibit No.8 Page 1 of 3 Case No. PAC-E.1Q-07 Witness: Bruce N. Wiliams Indicative Forward PCRB Variable Rates For Quarter End Periods thru December 31, 2010 Jan-OO Feb-OO Mar-OO Apr-OO May-OO Jun-OO Jul-OO Aug-OO Sep-OO Oct-OO Nov-DO Dec-OO Jan-Ol Feb-01 Mar-01 Apr-01 May-01 Jun-01 Jul-Ol Aug-01 Sep-01 Oct-Ol Nov-01 Dec-Ol Jan-02 Feb-02 Mar.02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 30 DayLIBOR Daiy Ave (a) Floating Rate PCRBs Daiy Ave (b) PCRB/LIBOR (b)/(a) 5.81% 5.89% 6.05% 6.16% 6.54% 6.65% 6.63% 6.62% 6.62% 6.62% 6.63% 6.68% 5.88% 5.53% 5.13% 4.82% 4.16% 3.92% 3.82% 3.64% 3.17% 2.48% 2.13% 1.96% 1.81% 1.85% 1.89% 1.86% 1.84% 1.84% 1.83% 1.80% 1.82% 1.81% 1.44% 1.42% 1.36% 1.34% 1.1% 1.31% 1.31% 1.6% 1.1% 1.1% 1.2% 1.2% 1.3% 1.5% 1.11% 57% 62% 61% 65% 75% 65% 60% 62% 68% 66% 65% 62% 53% 65% 62% 77% 81% 77% 69% 65% 76% 88% 84% 84% 82% 75% 77% 85% 91% 86% 81% 83% 93% 102% 115% 110% 103% 107% 111% 115% 119% 119% 102% 104% 111% 111% 121% 114% 110% 3.33% 3.62% 3.68% 4.02% 4.89% 4.35% 3.99% 4.09% 4.50% 4.36% 4.33% 4.14% 3.10% 3.59% 3.18% 3.72% 3.38% 3.03% 2.65% 2.36% 2.42% 2.18% 1.79% 1.64% 1.49% 1.9% 1.46% 1.58% 1.67% 1.58% 1.49% 1.49% 1.69% 1.84% 1.66% 1.57% 1.40% 1.43% 1.45% 1.52% 1.56% 1.38% 1.2% 1.6% 1.24% 1.24% 1.6% 1.32% 1.21% Page 1 of 3 Rocky Mountain Power Exhibit No.8 Page 2 of 3 Case No. PAC.E-10-07 Witness: Bruce N. Wiliams Indicative Forward PCRB Variable Rates For Quarter End Periods thru December 31, 2010 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04 Sep-04 Octc04 Nov-04 Dec-04 Jan.05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 30 DayLIBOR Daiy Ave (a) Floatig Rate PeRBs Daiy Ave (b) PeRB/LIBOR (b)/(a) 1.0% 1.09% 1.0% 1.0% 1.25% 1.41% 1.60% 1.78% 1.90% 2.19% 2.39% 2.49% 2.61% 2.81% 2.97% 3.09% 3.25% 3.43% 3.69% 3.78% 3.99% 4.15% 4.36% 4.48% 4.58% 4.76% 4.92% 5.08% 5.24% 5.37% 5.35% 5.33% 5.32% 5.32% 5.35% 5.32% 5.32% 5.32% 5.32% 5.32% 5.32% 5.32% 5.52% 5.48% 4.98% 4.75% 5.00% 3.95% 3.14% 107% 110% 115% 117% 102% 89% 88% 83% 91% 75% 70% 72% 72% 69% 84% 95% 74% 67% 66% 68% 67% 71% 71% 67% 68% 65% 70% 69% 71% 67% 66% 68% 67% 68% 69% 68% 68% 68% 71% 73% 71% 69% 68% 70% 72% 74% 65% 76% 91% 1.7% 1.20% 1.27% 1.29% 1.28% 1.26% 1.40% 1.49% 1.72% 1.65% 1.67% 1.78% 1.88% 1.95% 2.50% 2.93% 2.39% 2.28% 2.44% 2.55% 2.66% 2.93% 3.10% 3.02% 3.13% 3.11% 3.45% 3.52% 3.74% 3.60% 3.53% 3.61% 3.57% 3.62% 3.70% 3.64% 3.63% 3.64% 3.79% 3.90% 3.76% 3.66% 3.76% 3.84% 3.56% 3.53% 3.25% 3.02% 2.86% Page 2 of 3 Rocky Mountain Power Exhibit NO.8 Page 3 of 3 Case No. PAC-E-10-07 Witness: Bruce N. Wiliams Indicative Forward PCRB Variable Rates For Quarter End Periods thru December 31, 2010 30 DayLIBOR Floatig Rate PCRBs Daiy Ave Daiy Ave PCRB 1 LIB OR (a)(b)(b)/(a) Mar-08 2.80%3.79%135% Apr-08 2.79%2.23%80% May-08 2.63%1.93%73% Jun-08 2.47%2.77%112% Jul-08 2.46%4.12%168% Aug-08 2.47%3.03%123% Sep-08 2.94%4.57%155% Oct-08 3.87%4.89%126% Nov-08 1.68%2.34%139% Dec-08 1.01%1.02%101% Jan-09 0.39%0.70%181% Feb-09 0.46%0.68%147% Mar-09 0.53%0.66%124% Apr-09 0.45%0.63%140% May.09 0.35%0.53%153% Jun-09 0.32%0.45%143% Jul-09 0.29%0.41%142% Aug-09 0.27%0.43%158% Sep-09 0.25%0.40%161% Oct-09 0.24%0.39%159% Nov-09 0.24%0.37%157% Dec-09 0.23%0.38%165% Average 91% Forwar 30 Day LIBOR* (1) Histoncal l'loatig Rate PCRB 130 Day LIB OR (2) Forecast Floating RatePCRB (1) * (2) 313/2010 6130/2010 913012010 1213112010 0.33% 0.85% 1.36% 1.50% 91% 91% 91% 91% 0.30% 0.77% 1.23% 1.6% * Soure: Bloomberg L.P. (1113/10) Page 3 of 3 Case No. PAC-E-I0-07 Exhibit NO.9 Witness: Bruce N. Wiliams BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ROCKY MOUNTAIN POWER Exhibit Accompanying Direct Testimony of Bruce N. Wiliams Cost of Preferred Stock May 2010 Li n e No . To t a l P a r An n u a l or S t a t e d Is s u n c e Ca l Di v i d e n d Sh a r e s Va l u e Da t e Pr i c e Ra t e OI S OI S (2 ) (3 ) (4 ) (5 ) (6 ) 12 6 , 2 4 3 $1 2 . 6 2 4 , 3 0 0 De s c r i p t i o n o f I s s u e (1 ) ;0 % 4. 5 2 0 % e 7. 0 0 0 % e 6. 0 0 0 % )% 5. 0 0 0 % 0% 5. 4 0 0 % 50 % 4. 7 2 0 % 34 % 4. 5 6 0 % (d ) (e ) ., 6 % Ne t Pr e m i u m & % o f Gr o s s~(9 ) Co s t o f~(1 0 ) An n u a l Co s t (i Li n e No . :: ( ) m : ; ;: ~ Š - a al C D e ' ~ ~ z ; : " ' .. 0 Z š : gi ~ ! = g r: , , c o = ' 2 c ; " U ~ zm Q ) = ' . ~ . ~ - o :: 0 ~ o = 6 : E ¡¡ . . s . g ¡ 3 ~ (J