MidAmerican Energy Holdings Co. said Wednesday it has reached settlement agreements for its $9.4 billion purchase of PacifiCorp in all six states where PacifiCorp operates.
The latest agreements were reached with Washington and Wyoming.
In November, Utah utility regulators reached an agreement with the Iowa-based utility, which is 83 percent owned by billionaire Warren Buffett through his company, Berkshire Hathaway. PacifiCorp operates as Utah Power in Utah.
California, Idaho and Oregon also have reached agreements.
All of the settlement agreements must still receive final approvals by each state's public service commission.
Greg Abel, president of MidAmerican, said in a statement that he was pleased to have reached the agreements, calling them "a significant step forward in the regulatory approval process."
As part of the agreements in Washington and Wyoming agreement, MidAmerican has committed to rate credits that amount to $142.5 million through 2010.
Utah did not negotiate any rate credits, but it may choose to adopt other states' provisions.
Brent Gale, MidAmerican's senior vice president of legislation and regulation, said the rate credits amount to $6 million companywide and will be reflected in the utility's next rate case.
"The rate credits are just a mechanism to ensure that we either contain our costs or reduce our costs," Gale said. "If we reduce costs, then of course we're not out anything. On the other hand, if we weren't able to reduce the costs, then the customers get the benefit anyway."
A second type of rate credit accepted by Washington and Wyoming is an enforcement mechanism to hold customers harmless from increases in costs that might occur from insurance coverage and costs associated with services PacifiCorp previously provided to its affiliates.
Gale said Utah is still considering whether to adopt the rate credit provisions. He added that Utah negotiated something of similar value to the $6 million rate credit in its settlement agreement, namely, a delay in when PacifiCorp's next electricity rate hike takes effect.
In five of the six states, including Utah, Gale said there are time limits by which the commission must issue an order in a rate case.
"If we waive those time limits, then it delays the time in which the increased rates go into effect," Gale said. "That obviously has a value to customers, if you can delay a rate increase from going into effect."
The Utah agreement delays by roughly 40 days the implementation of a 2006 scheduled electricity rate hike.
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