ORDER NO. 99-260

ENTERED APR 14 1999

This is an electronic copy. Appendices and footnotes may not appear.

OF OREGON

UI 17 (2)

DISPOSITION: APPLICATION APPROVED WITH CONDITIONS

On March 10, 1999, the Commission received an application from PacifiCorp dba Pacific Power & Light Company (Company), filed pursuant to ORS 757.480 and ORS 757.495, requesting authority to engage in certain affiliated interest transactions.

Based on a review of the application and the Commission’s records, the Commission finds that the application satisfies applicable statutes and administrative rules. At its Public Meeting on April 6, 1999, the Commission adopted Staff’s recommendation to approve the application with conditions. Staff’s recommendation is attached as Appendix A and is incorporated by reference.

Jurisdiction

ORS 757.005 defines a "public utility" as anyone providing heat, light, water or power service to the public in Oregon. The Company is a public utility subject to the Commission's jurisdiction.

Affiliation

An affiliated interest relationship exists under ORS 757.015.

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 all the financial aspects of the contract for ratemaking purposes. The Commission may reserve that issue for a subsequent proceeding.

Ratepayers should not be harmed by approval of this application.

CONCLUSIONS

1. The Company is a public utility subject to the jurisdiction of the Commission.

2. An affiliated interest relationship exists.

3. The agreement is fair, reasonable, and not contrary to the public interest.

4. The application should be granted.

ORDER

IT IS ORDERED that the supplemental application of PacifiCorp dba Pacific Power & Light Company regarding the joint venture between PacifiCorp Trans, Inc., an affiliated interest and World Travel Partners L.P. is granted, subject to conditions stated in Appendix A.

Made, entered, and effective ________________________.

APPENDIX A

DATE: March 16, 1999

TO: Bill Warren through Marc Hellman and Mike Myers

FROM: Marion Anderson

SUBJECT: UI 17 (2) – PacifiCorp, d.b.a. Pacific Power and Light (PP&L), Supplemental Application Regarding the Joint Venture between PacifiCorp Trans, Inc., (PCTI), an Affiliated Interest, and World Travel Partners L.P.

SUMMARY RECOMMENDATION:

I recommend approval with conditions.

DISCUSSION:

PP&L and PCTI are affiliated entities under ORS 757.015 through the following ownership chain. PP&L wholly owns PacifiCorp Group Holdings, Inc., which in turn wholly owns PCTI.

This notification was received on March 10, 1999.

PERTINENT ISSUES:

I have investigated the following issues to determine if the agreement is fair and reasonable, and not contrary to the public interest.

1. Scope of Services

This application replaces the term’s portion of the existing agreement. There are two major changes: a. the agreement is extended through March 31, 2001. b. PP&L is now allowed "to use the software product Meeting Assist Lite upon its release to WTP clients for the term of this Agreement. PacifiCorp will incur no license or operating costs associated with MeetingAssist except any actual travel costs associated with the installation of the product."

2. Transfer Pricing Methods and Cost Allocations

3. Determination of Public Interest Compliance

This supplemental application does not impact the Commission conditions imposed by Order No. 99-03.

4. Records Availability, Audit Procedures and Reporting Requirements

I believe that Detailed Recommendation Condition 1 affords the Commission adequate access to records and provides for the auditing of transactions between PacifiCorp d.b.a. Pacific Power and Light and PacifiCorp Trans, Inc.

March 16, 1999

Page 2

CONCLUSIONS:

Based on an investigation and review of this application, my conclusions are as follows:

PacifiCorp d.b.a. Pacific Power and Light is a regulated electric company subject to the jurisdiction of the Public Utility Commission of Oregon.

An affiliated interest relationship exists between PacifiCorp d.b.a. Pacific Power and Light and PacifiCorp Trans, Inc.

The application appears to be fair and reasonable and not contrary to the public interest.

DETAILED RECOMMENDATION:

Based on the preceding discussion and conclusions, I recommend that the extension of the joint service provider agreement between PacifiCorp Trans, Inc., and World Travel Partners L.P. be approved with the following conditions:

PacifiCorp d.b.a. Pacific Power and Light shall provide the Commission access to all books of account, as well as all documents, data and records of PacifiCorp d.b.a. Pacific Power and Light and PacifiCorp Trans, Inc., that pertain to transactions between the two.

The Commission reserves the right to review for reasonableness all financial aspects of this arrangement in any rate proceeding or earnings review under an alternative form of regulation.

PacifiCorp d.b.a. Pacific Power and Light shall notify the Commission in advance of any substantive changes to the agreement, including any material changes in any cost. Any changes to the agreement terms that alter the intent and extent of activities under the agreement from those approved herein shall be submitted for approval in an application for a supplemental order (or other appropriate format) in this docket.

cc: Lee Sparling

Kathy Miller