ORDER NO. 96-280

ENTERED OCT 25 1996

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UI 1(9)

DISPOSITION: APPLICATION APPROVED WITH CONDITIONS

Order No. 95-405 granted Pacific Power and Light, an assumed business name of PacifiCorp, (PP&L or Company) authority to provide loans to affiliated interests under a Umbrella Loan Agreement (ULA). That Order imposed several compliance conditions, one of which required PP&L to file semi-annually, a report on certain transactions conducted under the loan agreement, including interest expense, transaction costs and interest income in below-the-line accounts. PP&L has requested authority to make these submissions on an annual basis. For Commission docketing purposes, the current filing is considered as UI 1(9).

At its public meeting on October 8, 1996, the Commission adopted Staff’s recommendation to require an annual filing of reports, rather than the previously required semi-annual basis. All other ordering conditions imposed by Order No. 95-405 shall remain in effect.

Based on the application and its record, the Commission makes the following:

FINDINGS OF FACT

The Company engages in the generation, purchase, transmission, distribution and sale of heat, light and power to the public in Oregon.

Modifying compliance conditions 6 and 7 in Order No. 95-405, to require an annual filing is fair, reasonable and not contrary to the public interests.

All other ordering conditions imposed by Order No. 95-405 shall remain in effect.

The ordering conditions provide the Commission adequate access to all books of account as well as all documents, data, and records, and provide for the auditing of transactions between PP&L and its affiliated interests.

OPINION

Jurisdiction

ORS 757.005 defines a "public utility" as anyone providing electric service to the public in Oregon. PacifiCorp is a public utility subject to the Commission's jurisdiction.

Affiliation

ORS 757.015(5) defines an affiliated interest as every corporation which has two or more officers or directors in common with a public utility. ORS 757.015 (6) further defines an affiliated interest as any entity in which a public utility has a 5 percent or greater ownership interest.

Applicable Law

ORS 757.495 requires public utilities to seek approval of contracts with affiliated interests within 90 days after execution of the contract. The intent of the statute is to protect ratepayers from the abuses which may arise from less than arm's length transactions. Portland General Electric Company, UF 3739, Order No. 81-737 at 6. Failure to file within the 90-day time limit may preclude the utility from recovering costs incurred under the contract. See

ORS 757.495.

ORS 757.495(3) requires the Commission to approve the contract if the Commission finds that the contract is "fair and reasonable and not contrary to the public interest." However, the Commission need not determine the reasonableness of the contract for ratemaking purposes. The Commission will reserve that issue for a subsequent proceeding.

CONCLUSIONS

PP&L is a public utility subject to the jurisdiction of the Commission.

 

The modifications to the compliance conditions are fair, reasonable, and not contrary to the public interest.

 

 

ORDER

IT IS ORDERED that:

Compliance conditions 6 and 7 of Order No. 95-405, requiring transaction reports, which include interest expense, transaction costs and interest in below-the-line accounts, are to be submitted on an annual basis, rather than the previous semi-annual requirement.

 

All other compliance conditions in Order No. 95-405 remain in effect.

 

 

 

Made, entered, and effective ________________________.

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements in OAR

860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070(2)(a). A party may appeal this order to a court pursuant to ORS 756.580.