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The Honorable Kimberly D. BoseJune 30, 2014Page 5 of 13customers in Utah, Wyoming and Idaho. Pacific Power and Rocky MountainPower each is an unincorporated division of PacifiCorp. PacifiCorp obtainedmarket-based rate authority in Docket No. ER97-2801-000.8The Applicants also recently became affiliated with NV Energy, Inc. and itstwo operating utilities, Nevada Power Company (“Nevada Power”) and SierraPacific Power Company (“Sierra Pacific”), both of which are located in Nevadawithin the Southwest Region.9 Nevada Power serves customers in southernNevada, while Sierra Pacific serves customers predominately in northern Nevada.Nevada Power and Sierra Pacific formerly operated separate BAAs, but nowoperate a single BAA in which they own or otherwise control approximately 7,800MW of generation capacity. The Commission has granted Nevada Power andSierra Pacific the authority to sell electric energy, capacity, and ancillary servicesat market-based rates outside of the formerly-separate Nevada Power and SierraPacific BAAs.10In addition to these utilities, the Applicants are affiliated with several othergeneration-only companies that operate in the Western Interconnection, that arebriefly discussed below: MidAmerican Renewables, LLC indirectly owns 49 percent of the membershipinterests in Agua Caliente (the remaining 51 percent is indirectly owned byNRG Energy, Inc., which is not affiliated with MidAmerican).11 AguaCaliente owns and operates a 290 MW solar photovoltaic electric generatingfacility in Yuma County, Arizona, which commenced commercial operation inApril 2014 and is directly interconnected to the transmission system owned byPacific Gas & Electric Company (“PG&E”) and operated by the CaliforniaISO (“CAISO”). Agua Caliente has entered into a long-term power purchaseagreement pursuant to which the entire net electrical output of its generatingfacility is committed to PG&E. The Commission has granted Agua Caliente8PacifiCorp, 79 FERC ¶ 61,383 (1997).9BHEC’s indirect acquisition of Nevada Power and Sierra Pacific was approvedin Silver Merger Sub, Inc., 145 FERC ¶ 61,261 (2013).10See Sierra Pacific Power Co., 95 FERC ¶ 61,193, reh’g denied, 96 FERC¶ 61,050 (2001).11On June 12, 2014, BHEC submitted a filing in Pinyon Pines Wind I, LLC,Docket No. ER12-1521-001, in which it explained that BHEC’s indirect interest in AguaCaliente is a passive interest and, therefore, that neither BHEC nor any of its subsidiaries(which would include the Applicants) should be considered as affiliates of Agua Caliente.The Commission has not yet addressed this submission.

The Honorable Kimberly D. BoseJune 30, 2014Page 6 of 13authorization to sell energy, capacity and ancillary services at market-basedrates.12 Pinyon Pines Wind I and Pinyon Pines Wind II are indirect, wholly-ownedsubsidiaries of MidAmerican Renewables. Pinyon Pines Wind I owns andoperates an approximately 168 MW (nameplate) wind-powered electricgeneration facility, and Pinyon Pines Wind II owns and operates anapproximately 132 MW (nameplate) wind-powered electric generation facility,both located in Kern County, California, and interconnected with thetransmission system owned by Southern California Edison Company (“SCE”)and operated by the CAISO. The entire output of these facilities is committedto SCE pursuant to long-term power purchase agreements. The Commissiongranted Pinyon Pines Wind I and Pinyon Pines Wind II authorization to sellenergy, capacity, and ancillary services at market-based rates.13 Solar Star 1 and Solar Star 2 are indirect, wholly-owned subsidiaries ofMidAmerican Renewables. Solar Star 1 is developing and constructing a 310MW (nameplate) solar photovoltaic electric generating facility, and Solar Star2 is developing and constructing a 276 MW solar (nameplate) photovoltaicelectric generating facility, each located in Kern and Los Angeles Counties,California, and interconnected to the SCE transmission system that is operatedby the CAISO. The entire output of these facilities is committed to SCEpursuant to long-term power purchase agreements. Construction of thesefacilities began in 2013 and is expected to be completed in the fourth quarter of2015. The Commission has granted each of these entities authorization to sellenergy, capacity, and ancillary services at market-based rates.14 Topaz is an indirect, wholly-owned subsidiary of MidAmerican Renewablesthat is constructing a 550 MW (nameplate) solar photovoltaic generatingfacility in San Luis Obispo County, California, which is interconnected to thetransmission system owned by PG&E and operated by the CAISO. The TopazFacility began trial operation during the first quarter of 2013. A portion of thefacility is now in commercial operation, and the Topaz Facility is expected tobe in full commercial operation by March 2015. Topaz has entered into a12Agua Caliente Solar, LLC, Docket No. ER12-21-000 (Dec. 1, 2011)(unreported).13Alta Wind VII, LLC and Alta Wind IX, LLC, Docket Nos. ER12-1521-000 andER12-1522-000 (May 31, 2012) (unreported).14Solar Star California XIX, LLC, Solar Star California XX, LLC, Docket Nos.ER13-1441 and ER13-1442 (June 20, 2013) (unreported).

The Honorable Kimberly D. BoseJune 30, 2014Page 7 of 13long-term power purchase agreement pursuant to which the entire net electricaloutput of the Topaz Facility is committed to PG&E. The Commission grantedTopaz authorization to sell energy, capacity and ancillary services at marketbased rates.15 Yuma Cogeneration Associates (“Yuma”) owns and operates a 52.3 MWnatural gas-fired cogeneration facility located in Yuma, Arizona. The facilityis interconnected with the transmission system owned and operated by ArizonaPublic Service Company. Yuma sells its output to San Diego Gas and ElectricCompany under a long-term power purchase agreement. Yuma obtainedmarket-based rate authority in Docket No. ER07-1236-000.16 Applicants also are affiliated with CE Generation, LLC, which indirectly owns,among other things, ten geothermal units in the Imperial Irrigation DistrictBAA. Each of these units has been certified as a qualifying facility (“QF”)under the Public Utility Regulatory Policies Act of 1978. These geothermalfacilities have a total generating capacity of 346.6 MW, as indicated onAttachment B. Applicants also are affiliated with CalEnergy LLC, which is apower marketer that was formed for the purpose of marketing the output of thegeothermal electric generation facilities. CalEnergy LLC does not own orcontrol any generation facilities, and it has obtained market-based rateauthority.17D.ERCOT affiliatesThe Applicants are affiliated with a 212-MW QF (Power Resources, Ltd.)in the Electric Reliability Council of Texas (“ERCOT”) region that has obtainedmarket-based rate authority.18On June 23, 2014, the Applicants became affiliated with TX Jumbo RoadWind, LLC, which is developing and constructing a 300 MW (nameplate) windpowered electric generation facility in Castro County, Texas in the ERCOTregion. TX Jumbo Road Wind, LLC has not filed an application with theCommission for market-based rate authority.15Topaz Solar Farms LLC, Docket No. ER12-1626 (Jun. 14, 2012) (unreported).16Yuma Cogeneration Assocs., Docket No. ER07-1236 (Dec. 4, 2007)(unreported).1718CalEnergy, LLC, Docket No. ER13-1266 (May 31, 2013) (unreported).Power Resources, Ltd., Docket No. ER09-762-000 (May 7, 2009) (unreported).Applicants also are affiliated with Electric Transmission Texas, LLC, which builds, ownsand operates transmission projects in ERCOT.

The Honorable Kimberly D. BoseJune 30, 2014Page 8 of 13II.SUMMARY OF THE TRIENNIAL GENERATION MARKETPOWER ANALYSISAs required by Order No. 697, Mr. Frame conducted the “Pivotal SupplierAnalysis” and “Market Share Analysis” and the results, which are discussed indetail in the Frame Affidavit and summarized below, are presented in the formatset out in Appendix A to 18 C.F.R. Subpart H. Consistent with the ClarifyingOrder, Mr. Frame’s analyses are based on December 2011-through-November2012 generation and load data. Mr. Frame’s triennial analyses focus on whetherApplicants can exercise market power within the Northeast region, and inparticular in the PJM and NYISO BAAs.Before providing the results of his analyses, Mr. Frame providesbackground on the Applicants (Section II of the Frame Affidavit) and a descriptionof the Commission’s analytic approach to screening for horizontal market power(Section III of the Frame Affidavit). Attachment 2 to the Frame Affidavit listseach of the generating resources owned or controlled by Applicants and theirgeneration-owning affiliates in the Eastern Interconnection.Mr. Frame’s discussion of how he applied the Commission’s indicativescreens to the Applicants is set out in Section IV of the Frame Affidavit. As hedescribes more fully in the Frame Affidavit, Mr. Frame made several veryconservative assumptions in conducting his analyses. For example, Mr. Frameassumed that MidAmerican’s uncommitted generation in the Central Region andSaranac’s generation in NYISO had a first-call priority on imports into the PJMmarket in the Northeast Region, regardless of whether MidAmerican or Saranachad firm transmission reservations (P 28), and that MidAmerican’s and Cordova’stotal capacity in PJM had a first-call priority for deliveries into the NYISO market(P 29).19 He also assumed no derates for the substantial amount of windgeneration either owned or purchased by MidAmerican, and instead usednameplate ratings (P 21); assumed no planned outages at any of Applicants’generating facilities during the study period (P 25); treated all of MidAmerican’slong-term wholesale purchases as being under MidAmerican’s “control,” and noneof the capacity underlying MidAmerican’s long-term wholesale sales as beingunder the “control” of the purchasers (P 22); and assigned all of the CordovaFacility’s capacity to Cordova even though the output of the facility was fullycontractually committed to a third-party during the study period (P 32, n.42). In19For purposes of his analyses, Mr. Frame used the Simultaneous TransmissionImport Limit (“SIL”) estimates accepted by the Commission in its recent Order onSimultaneous Transmission Import Limit Values for the Northeast Region, 147 FERC¶ 61,190 (2014).

The Honorable Kimberly D. BoseJune 30, 2014Page 9 of 13addition, Mr. Frame attributed to the Applicants the capacity of Bishop Hill II(81 MW) and all of the New Wind Generation (1,050 MW), resources that werenot in service during the December 2011-November 2012 study period.Attachment 2, p.3, nn. 2, 3 and 5. Each of these assumptions attributed additionalcapacity to the Applicants. As summarized in Section V (P 32) of the FrameAffidavit and shown on his Attachments 3 and 4, Mr. Frame concludes that theApplicants pass both horizontal market power screens in the PJM and NYISOmarkets in the Northeast Region.In addition to including all the New Wind Generation in his analysis of thePJM and NYISO markets in the Northeast Region, Mr. Frame also prepared ananalysis that shows the impact of including the New Wind Generation in theMISO market in the Central Region. The results of this analysis are shown inAttachment 5, for which Mr. Frame used the same study period as used for thePJM and NYISO markets, and used all of the same conservative assumptionsdiscussed above except for the imports.20 Attachment 5 supports Mr. Frame’sconclusion that the Applicants would pass both screens in the Central Region aswell. Mr. Frame’s analysis of the Central Region is provided for informationalpurposes, and the Applicants do not request Commission action on the CentralRegion analysis at this time. The Applicants will report further changes in statusconsistent with the Commission’s regulations as the New Wind Generationfacilities are placed into service, and triennial analyses for the Central Region willbe submitted in accordance with the schedule set out in Appendix D to Order No.697.III.VERTICAL MARKET POWERSections 35.37(d) and (e) require sellers to provide additional informationto assist the Commission’s review of vertical market power issues, includingpotential barriers to entry. In order to address the open-access transmissionrequirement under Section 35.37(d), the Applicants note that MidAmerican hasturned over functional control of its transmission system to MISO, which offersopen access transmission service through the MISO tariff. This fully satisfies therequirements of Section 35.28. Other than the limited interconnection facilities atthe Cordova Facility, Cordova does not own or operate transmission facilities.The same holds true for the Saranac Facility.20Because Mr. Frame did not have access to a MISO SIL study for this studyperiod, he conservatively assumed that the only imports into MISO were (i) the entiretyof the Cordova capacity, MidAmerican’s QCS ownership capacity, and any long-termpurchases from first tier BAAs and (ii) the limited OVEC capacity imported to MISOload-serving entities with an ownership interest in the OVEC generation. P 30.

The Honorable Kimberly D. BoseJune 30, 2014Page 10 of 13As for the information required under Section 35.37(e)(1), neither Cordovanor MidAmerican owns or controls any intrastate natural gas transportation orintrastate natural gas storage facilities, although MidAmerican does operatenatural gas local distribution and storage facilities in the Central Region. As notedabove, MidAmerican’s LDC services are regulated by the IUB, the ICC, theSDPUC and various Nebraska municipalities. A wholly-owned subsidiary ofSaranac, North Country Gas Pipeline Corporation, owns and operates an intrastatepipeline in upstate New York with a capacity of about 100 dekatherm/day. TheNorth Country pipeline runs approximately 22 miles from an interconnection withthe TransCanada Pipeline in Napierville, Quebec, to Plattsburgh, New York,where it interconnects with the Saranac Facility and two other customers. Noother affiliates own or operate intrastate pipeline or storage facilities in or adjacentto the Northeast Region.As required under Sections 35.37(e)(2) and (3), the Applicants provide thefollowing information describing the Applicants’ ownership or control of sites forgeneration capacity development, as well as sources of coal supplies andtransportation for coal supplies in or first tier to the PJM and NYISO markets: Consistent with the Commission’s regulations, the Applicants have previouslyupdated the status of their “acquisition of control of sites for new generationcapacity development.”21 The most recent such submission was in Docket No.LA13-4 on January 14, 2014. At that time, MidAmerican reported a total often such sites, each located in the relevant geographic market of MISO(Central Region), with a combined maximum potential amount of reasonablycommercially feasible generation of 1,630 MW. Since that submission, sitecontrol has been surrendered for one of these sites (representing 70 MW), andfive sites (representing approximately 1,050 MW) will be utilized for the NewWind Generation. This will leave MidAmerican with control over fourremaining sites, each located in the relevant geographic market of MISO, witha combined maximum potential amount of reasonably commercially feasiblegeneration of approximately 510 MW. The Applicants will use this revised listof four sites as a basis for reporting future changes in status related toacquisition of control of sites for new generation capacity development.MidAmerican’s control of these four remaining sites does not raise any entrybarrier concerns. Each individual wind generator site consists of the footprintneeded for the individual structure and is very small in size. While theindividual sites have been geographically grouped to constitute a particularwind farm, the wind farms themselves are dispersed throughout the state of2118 C.F.R. § 35.42(d) (2013).

The Honorable Kimberly D. BoseJune 30, 2014Page 11 of 13Iowa. Further, there does not appear to be a reasonable limit on the number ofpotential sites available for further wind development in the Midwest.As noted above, the Applicants recently became affiliated with TX JumboRoad Wind, LLC, which is developing and constructing a 300 MW(nameplate) wind-powered electric generation facility in the ERCOT region.Although TX Jumbo Road Wind, LLC has neither placed generation in servicenor filed an application for market-based rate authority, it has acquired sitecontrol for the project. For the same reasons cited in the paragraphimmediately above, TX Jumbo Road Wind, LLC’s acquisition of site controldoes not raise any entry barrier concerns, nor should it call into question theApplicants’ continued market-based pricing authority. MidAmerican does not own any coal reserves and acquires all the coal it needsfor electric generation from unaffiliated suppliers pursuant to long- and shortterm contracts. MidAmerican owns or controls through lease agreements a fleet of coal railcars for private use in connection with its coal-fired generation. From time totime, MidAmerican may lease/sublease a small fraction of these rail cars forshort-term use. MidAmerican also owns various limited “spur lines” that arededicated for private local transportation of coal to its generating stations.MidAmerican does not own any other coal transportation equipment orfacilities. None of Cordova, Saranac or any other affiliate of the Applicants owns or hasoptions on sites for generation capacity development, or owns coal reserves orcoal transportation equipment or facilities in the Northeast Region.Finally, as required by Section 35.37(e)(4), the Applicants affirmatively statethat none of the Applicants or any of their affiliates has erected barriers to entryinto the relevant market and that they will not erect barriers into the relevantmarket. As required under Appendix B to Subpart H of Part 35 of theCommission’s regulations, also included as Attachment B hereto are updatedgeneration and transmission asset tables.The information pertaining to horizontal and vertical market power issuesdemonstrates that there are no market power concerns involving the Applicantsthat call into question the Applicants’ continued market-based pricing authority.

The Honorable Kimberly D. BoseJune 30, 2014Page 12 of 13IV.REVISED MARKET-BASED RATE TARIFFMidAmerican proposes to revise its MBR tariff to include a provision toenable it to sell ancillary services into the Southwest Power Pool (“SPP”) ancillaryservice markets. MidAmerican seeks an effective date of March 1, 2014, becausethat was the start date of SPP ancillary service markets, but MidAmerican has notyet sold any ancillary services in those markets. A marked copy ofMidAmerican’s MBR tariff is included to highlight the additional tariff language.V.CONFIDENTIAL INFORMATIONIncluded with the Frame Affidavit and the accompanying exhibits are Mr.Frame’s workpapers, which are found in the attachment labeled “Workpapers.”There are some workpapers that are privileged and thus are included as a separateattachment labeled “Privileged Workpapers.” Per Section 35.37(f), also includedas Attachment C hereto is a form of protective agreement under which parties tothis proceeding executing the protective agreement may review information in thePrivileged Workpapers for which the Applicants seek privileged treatment.VI.COMMUNICATIONS AND SERVICEThe Applicants request that all correspondence and communications relatedto this triennial market power update be made to the following persons:Steven J. RossSteptoe & Johnson LLP1330 Connecticut Ave., N.W.Washington, DC 20036202.429.6279sross@steptoe.comPaul J. LeightonVice President and Senior Trading AttorneyMidAmerican Energy Company4299 NW Urbandale DriveUrbandale, IA 50322515.242.4099pjleighton@midamerican.comA copy of this filing (other than the workpapers) has been served by e-mail on allparties to these dockets. Parties that desire a copy of the workpapers may makearrangements with the undersigned.VII.CONCLUSIONThe market power analyses set out in the Frame Affidavit and theadditional information included with this filing demonstrate that the Applicantsmeet the Commission’s standards for market-based pricing authority in theNortheast Region. The Applicants respectfully request that the Commissionaccept for filing this updated tr

QCS 345 kV substation forming part of the border between the Northeast and Central Regions. Similarly, the Cordova Facility is located in the immediate . PacifiCorp, which is located in the Northwest Region, is an Oregon corporation engaged primarily in the business of providing retail electric service to . Nevada Power Company ("Nevada .