NEWS FLASH: MidAmerican Purchase Approved by PUC
Posted on February 24, 2006 by oregoncub
Tags, Telecommunications and CUB Connects, Utility Regulation
The Public Utility Commission has just released its Order approving the sale of PacifiCorp (dba Pacific Power) to MidAmerican Energy Holdings Co. Their press release, below, gives an outline of the conditions of the $9.4 billion sale, or you can go directly to the details by reading the Commission’s Order (which cites heavily to CUB’s Brief and Testimony).
The Commission relied on CUB’s analysis in approving the agreement between MidAmerican and other parties to the case, including conditions with regard to rate credits, structural protections of PacifiCorp, and renewable energy development. Our blog entry on the MidAmerican Settlement Agreement provides more information on the specific terms of the agreement.
PUC NEWS RELEASE
PacifiCorp Sale Approved by Commission
Salem, OR -Today the Oregon Public Utility Commission (OPUC) approved a sale of PacifiCorp from Scottish Power to MidAmerican Energy Holding Company (MEHC) for $9.4 billion.
PacifiCorp, with 535,000 customers in Oregon, is the state’s second-largest regulated utility. The company provides electrical service to customers in six states.
After a thorough examination of the proposed sale, the Commission found that the transaction provided benefits for customers and is in the public interest.
“When viewed in total this is a good deal for ratepayers due to the combination of financial ring-fencing, certain guaranteed cost cuts, commitments for renewable energy, and low-income energy assistance,” Commission Chairman Lee Beyer said. “In addition to these benefits, MidAmerican pledged that PacifiCorp’s corporate headquarters would remain in Portland and that senior management in Portland will continue to make decisions on Oregon-related issues.”
By law the Commission cannot approve a sale unless it finds the transaction is in the public interest and provides a net benefit for ratepayers.
The sale was scrutinized by a wide variety of parties including advocates for residential and industrial users, renewable energy proponents, and Native American Indian tribes, who signed a stipulation endorsing the sale.
MidAmerican is based in Des Moines, Iowa. Its largest shareholder is Warren Buffett. Buffett provided a sworn statement that he will not directly or indirectly exercise control over PacifiCorp.
The $9.4 billion deal includes $5.1 billion in cash plus approximately $4.3 million in debt.
In the stipulation, the company committed to:
- $140 million company-wide rate credit to mitigate harms and provide customer benefits, $40 million of which is Oregon’s share;
- Isolate the utility from the holding company (termed ring-fencing) to protect PacifiCorp from financial harm;
- Keep PacifiCorp headquarters in Portland;
- Provide $400,000 per year for five years to low-income energy assistance programs;
- Extend customer service guarantees and performance standards;
- Acquire 400 MW of renewable energy by 2008 and file a plan to develop an additional 1400 MW by 2015 if cost effective;
- Provide access to books and records of PacifiCorp, MEHC and Berkshire Hathaway.
Previously the sale was approved by the public utility commissions of Utah, Idaho, Washington, Wyoming and California.
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03/10/17 | 0 Comments | NEWS FLASH: MidAmerican Purchase Approved by PUC