VI. Assignment of Proceeding

Dian M. Grueneich is the assigned Commissioner and Myra J. Prestidge is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. The Facility is located ion the Beaver River in southwestern Utah on U. S. Forest Service Land in the Fish Lake National Forest.

2. The Facility serves 43,000 California customers in extreme Northern California.

3. The Facility serves only 0.03% of the total peak load in PacifiCorp's California service territory.

4. Continued operation of the Facility by PacifiCorp is not necessary to maintain the reliability of the electric supply in California.

5. In order to continue to operate the Facility, PacifiCorp would need to make a significant investment in the replacement of the 350-foot section main flow line just below the Merchant Valley Dam.

6. Selling the Facility to City will save PacifiCorp ratepayers between $2.25 and $2.39 million, as compared with the costs of either repairing and continuing to operate the Facility or decommissioning the Facility.

7. City will utilize the Facility to serve its retail customers in Utah.

8. PacifiCorp submitted a PEA with the application, as required by Rule 2.4(b).

9. The PEA states that since the project will not involve any change in the use of the Facility, there is no possibility that the project will have significant adverse impacts on the environment.

10. The PEA is adequate for the Commission's decision-making purposes under CEQA.

11. We concur with the statements in the PEA that there is no possibility that the project will have a significant adverse impact on the environment.

12. The proposed ratemaking treatment is unopposed.

13. California's estimated net share of the gain on sale is $500, based on PacifiCorp's most recent general rate case.

14. PacifiCorp proposes to allocate the entire net gain on sale of approximately $500 to California ratepayers.

Conclusions of Law

1. Under Section 377.2, the sale of the Facility to City is exempt from Section 377's requirement that the Facility remain dedicated to serve California ratepayers, because the Facility is located outside of this state, serves less than 60,000 customers, and is not needed to provide electricity to California customers.

2. The sale of the Facility to City is permissible under Section 362, because the Facility is not needed to maintain the reliability of the electric supply in this state.

3. Section 851 requires prior Commission approval of any transfer of utility property that is used or useful in the provision of utility services.

4. The sale of the Facility to City is in the public interest, pursuant to Section 851, and should be approved.

5. The project, as described in the PEA, is exempt from the requirements of CEQA pursuant to State CEQA Guideline 15061(b)(3).

6. The proposed ratemaking treatment for this transaction should be approved.

7. This decision should be effective today in order to allow the sale of the Facility to City to proceed expeditiously.

ORDER

IT IS ORDERED that:

1. PacifiCorp is authorized to sell the Upper Beaver Hydroelectric Project, as described in the application (the Facility), to the City of Beaver (City), Utah, according to the terms stated in the application, pursuant to Section 851.

2. The Facility shall be removed from electric generation service according to the procedures established by the Federal Energy Regulatory Commission.

3. PacifiCorp shall notify the Commission by advice letter no later than 45 days after the closing of the transaction and transfer of the Facility to City. The advice letter shall include PacifiCorp's final calculation of California's share of the gain on sale, with supporting figures.

4. PacifiCorp shall allocate California's share of the net gain on sale entirely to ratepayers pursuant to Decision 06-05-041.

5. Application 06-09-003 is closed.

This order is effective today.

Dated March 15, 2007, at San Francisco, California.

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