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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
September 16, 1998
PACIFICORP
(Exact name of registrant as specified in its charter)
State of Oregon 1-5152 93-0246090
(State of Incorporation) (Commission (I.R.S. Employer
File No.) Identification No.)
700 N.E. Multnomah, Suite 1600, Portland, Oregon 97232-4116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(503) 813-7200
No Change
(Former Name or Former Address, if changed since last report)
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Item 5. OTHER EVENTS
Information contained in the news release of PacifiCorp issued on
September 16, 1998 is incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibit.
99. PacifiCorp news release issued September 16, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PACIFICORP
(Registrant)
By: ROBERT R. DALLEY
__________________________________
Robert R. Dalley
Controller
(Chief Accounting Officer)
Date: September 17, 1998
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INDEX TO EXHIBITS
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EXHIBIT DESCRIPTION PAGE
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99 PacifiCorp news release issued September 16, 1998.
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EXHIBIT 99
_____________________________________________________________________________
PACIFICORP NEWS RELEASE
_____________________________________________________________________________
Scott Hibbs, for investors, (503) 813-7222
Dave Kvamme, for media, (503) 464-6272
September 16, 1998
PACIFICORP EXPECTS EARNINGS SHORTFALL
Portland, OR - PacifiCorp (NYSE: PPW) announced today that it expects
that its 1998 earnings will be below securities analysts' expectations. The
company expects that its third quarter earnings could be approximately 50
percent below the FIRST CALL analysts' consensus of $0.41 per share.
A significant decline in profit margin on U.S. regulated sales is
expected to contribute to the company's third quarter earnings shortfall.
Profit margins on U.S. regulated sales were down significantly in July
and August. Purchased power prices were up over the same period of 1997 due
in large part to significantly lower availability of low-cost hydroelectric
resources in the Northwest region. The company relied heavily on these
low-cost resources in lieu of its own higher cost generation to meet wholesale
and retail sales demand in 1997. Increased sales, both retail and wholesale,
unexpected outages at certain of the company's lower-cost generating plants
and the lack of low-cost hydro resources in the region forced the company to
make unanticipated higher cost power purchases to meet wholesale and retail
sales demand.
Earnings are also expected to be down in the company's Australian
electric business primarily as the result of increases in purchased power
costs and the timing of certain other operating expenses. The continued
decline in the exchange rate between the U.S. and Australian dollar is also
expected to negatively impact earnings.
In light of these issues and general business conditions, the company
believes its earnings for the fourth quarter and full year 1998 also will not
meet the current FIRST CALL analysts' consensus of $0.38 and $1.27 per share,
respectively.
Moreover, PacifiCorp is involved in a general rate case in the state of
Utah. On September 11, 1998, the Utah Division of Public Utilities (DPU)
filed testimony proposing adjustments as part of the company's general rate
case that, if ultimately accepted by the Utah Public Service Commission (PSC),
could result in a $57.5 million reduction in customer prices.
The adjustments proposed by the DPU include reduction of the company's
authorized rate of return on equity to 10 percent, removal of certain cost
items from the company's filed financial results for 1997 and other financial
adjustments. Other intervening parties have
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proposed similar types of adjustments that could result in an
even larger reduction of customer prices.
PacifiCorp's revenue requirements testimony, also filed on September 11,
1998, reflects certain adjustments from its original filing. The testimony
requests a $6.7 million reduction in customer prices and proposes a new
authorized rate of return on equity of 11.25 percent.
Hearings for the case are scheduled for October, with a final order
expected from the PSC by the end of the year. The company is unsure whether
and to what extent the potential financial impact, if any, of this order is
included in securities analysts' estimates of the company's future earnings.
Any required adjustments to customer prices would be retroactive to
February 1997, which is the date that the DPU and the Committee of Consumer
Services in Utah filed a joint petition with the PSC requesting a general rate
case.
The company has received and is analyzing a number of proposals from
parties interested in acquiring the company's electric distribution assets in
California and Montana. The company expects to announce a proposed
transaction in the near future.
The company and the other owners of the Centralia plant are also
continuing to pursue the sale of the plant and the company's adjacent
Centralia mine. The outcome of these disposition activities is uncertain, but
the company may be required to record a charge, which could be significant, as
a result of potential additional reclamation liabilities at the Centralia
mine. The amount and timing of any such charge are dependent upon a number of
factors, including the results of the sale process, completion of certain
reclamation studies at the mine and the regulatory treatment of these costs.
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