Fitch Rates PacifiCorp's $800MM Issuance of FMBs 'A-'

Business Wire,  July 15, 2008  

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NEW YORK -- Fitch Ratings has assigned an 'A-' rating to PacifiCorp's (PPW) $800 million first mortgage bond (FMB) issuance. The transaction is expected to close July 17, 2008 and is composed of $500 million of 5.65% bonds due July 15, 2018 and $300 million of 6.35% bonds due July 15, 2038. Proceeds from the issuance will be used for general corporate purposes. The Rating Outlook is Stable.

PPW's ratings reflect the company's solid financial position, competitive resource base, and relatively low business risk profile. The ratings assume reasonable outcomes in pending and future rate proceedings to recover anticipated, significant capital investment.

Fitch's analysis also takes into account PPW's projected above-industry-average long-term service territory growth, primarily in its Eastern service territory, significant planned investment in new plant to meet its load requirements and its growing exposure to gas-fired generating capacity. PPW's capital investment is expected to increase to $2.2 billion in 2008 from $1.5 billion in 2007 and spending on new plant and equipment over the next 10 years is estimated at $20 billion.

Cost overruns and the potential inability to recover its large, planned capital investment on a timely basis is a primary source of concern for PPW investors. Additionally, PPW faces growing reliance on gas-fired generation and exposure to high commodity costs in the event of a prolonged, unscheduled base-load plant outage during a period of high demand.

PPW, a wholly owned subsidiary of MidAmerican Energy Holdings Company, provides integrated electric service to approximately 1.7 million retail customers in parts of Utah, Oregon, Wyoming, Washington, Idaho and California.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

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