PacifiCorp has asked the Public Utility Commission (PUC) of Oregon for approval of a non-cash transfer of certain transmission infrastructure in Wyoming between it and the Western Area Power Administration.
After reaching an agreement with WAPA in April, PacifiCorp filed its Asset Exchange Agreement application with the Oregon PUC on June 24. PacifiCorp is acting in its role as a regulated transmission provider in Oregon, the company said.
PacifiCorp intends to acquire from WAPA certain transmission facilities that are located at PacifiCorp’s Thermopolis, Wyoming substation, and to sell to WAPA certain transmission facilities located at WAPA’s Spence, Wyoming substation. This would all be done in a cash-free like-kind exchange transaction under Section 1031 of the Internal Revenue Code.
PacifiCorp says in the filing that customers will not be harmed by the exchange and that no stock, bonds or other securities will be changing hands. Also, there are “no known contingent liabilities associated with this transaction.
Completion of the asset exchange would generally eliminate the need for parties to pay each other for upgrades and allow them to maintain all assets within their respective substations, PacifiCorp said in the filing.
PacifiCorp owns the Thermopolis substation in Wyoming. WAPA owns certain assets in the Thermopolis substation (the WAPA facilities), some of which will need to be upgraded this summer.
The two parties entered into an asset exchange agreement dated April 14. The closing of the transaction requires the required regulatory approvals.
The parties agree that the assets being exchanged are equivalent in value, and therefore, no additional cash or other consideration is required to be paid by either party. The book value of the company facilities is roughly $769,000.
The company facilities to be exchanged consist of certain relays and controls, a circuit breaker, switches, take-off structure, a transformer and insulators and buswork, “all as noted in Schedule 1 to the Agreement,” according to PacifiCorp. “The transmission assets are and will continue to be used to operate the 230 kV line position for the Spence-Mustang 230 kV transmission line.”
The WAPA facilities to be exchanged consist of certain switches, transformers, relays, insulators and a circuit breaker. “The transmission assets are and will continue to be used to operate the 230 kV line position for the Spence-Thermopolis 230 kV transmission 13 line (currently known as the Badwater-Thermopolis 230 kV transmission line).”
In addition to this filing, this transaction requires approval from FERC, the California Public Utilities Commission, and the Wyoming Public Service Commission. FERC approval of this transaction was received May 31.
According to the application, Oregon PUC pre-approval is required for sales of property “necessary and useful in the performance of a utility’s duties” when the value is in excess of $100,000.