20260618Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER LODGE
COMMISSIONER HAMMOND
COMMISSIONER HARDIE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: JAMES CHANDLER, COMMISSION STAFF
ERIKA K. MELANSON,DEPUTY ATTORNEY GENERAL
DATE: JUNE 23, 2026
RE: IN THE MATTER OF THE APPLICATION OF AVISTA CORPORATION
FOR AN ORDER AUTHORIZING THE OFFERING, ISSUANCE, AND
SALE OF DEBT SECURITIES NOT TO EXCEED $800,000,000; CASE NO.
AVU-E-26-09.
BACKGROUND
On June 6, 2026, Avista Corporation ("Company") applied to the Idaho Public
Utilities Commission ("Commission") requesting authority to offer, issue, and sell up to
$800,000,000 secured or unsecured Debt Securities ("Debt") ("Application").
Application at 2. The requested authority is in addition to previous authorizations
approved by the Commission, of which $80,000,000 remain authorized but unissued. Order
No. 36079. Id. at 2. The required filing fees were received by the Commission on June 8,
2026.
The Company represents that it intends to use proceeds from the issuance for the
following: (1) investments into utility plant facilities, aging infrastructure, and acquisition
of property, or construction, extension or improvement of utility facilities; (2) retirement of
maturing long-term debt, repayment of short-term debt, and the discharge or refunding of
its obligations; (3) reimbursement of money's actually expended from income or from any
other money's in the treasury for any purpose described in (1) and/or (2) above; and/or (4)
such other purposes as may be permitted by law. Exhibit D-1 at 1.
The Company represents that the Debt could be secured or unsecured. If the
Company were to issue secured debt, it would do so by issuing First Mortgage Bonds
DECISION MEMORANDUM - I - JUNE 23, 2026

("FMBs"). Id.at 2. FMBs have been the traditional debt financing vehicle utilized by most
utilities in the U. S. and can be offered in both public offerings and private placement. FMBs
are secured by the lien of the Mortgage and Deed of Trust, dated as of June 1, 1939, as
amended and supplemented by various supplemental indentures and other instruments. This
lien secures the FMBs, and the FMBs should have higher ratings by nationally recognized
rating agencies than unsecured debt. This higher credit rating should lead to a lower interest
rate at the time of issuance as compared to unsecure debt. Id.
Unsecured debt is not secured by any lien on assets of the Company and, accordingly,
has lower ratings than secured debt by nationally recognized rating agencies. Unsecured
debt typically has a higher interest rate at the time of issuance than secured debt. Id.
The Company represents that the Debt maturity will be established with each
issuance and will not be less than nine months nor more than 50 years. Id. at 1. The interest
rate could be either fixed or floating and will be decided at the time of issuance. Application
at 1. If the Company issues Debt with a floating rate, the interest rate will be reset
periodically based on an index, generally Secured Overnight Financing Rate, commercial
paper, or Treasury Bills. Exhibit D-1 at 2. If the Company issues Debt with a fixed rate it
will be at a rate based upon the maturity period of that Debt. Id.
The Company represents that Debt may be issued by a firm or firms to be underwriters
or placement agents in an offering under this authority and will be determined by the Company's
opinion of firms' ability to assist the Company in meeting its objectives for the Debt to be issued.
Id. The Company' s opinion is based upon the level of underwriting or placement fees,the firm's
knowledge of the Company and its varied operations, and the firm's ability to market the Debt
to achieve the Company's financing and capital structure objectives. Id.
The Company is also requesting authority to issue Debt, without further Commission
approval, even if the total spreads exceed those shown in Exhibit D-1 at 5 and 6, so long as the
coupon rate does not exceed 8.0 percent per annum in order to provide additional flexibility in
the event spreads widen when the Company's decides to issue any Debt. Id.
Consistent with Order Nos. 29947 and 3 003 6,the Company continues to comply with
all reporting and filing requirements applicable to debt issued pursuant to the authority
requested and should continue to do so unless otherwise ordered by the Commission.
DECISION MEMORANDUM - 2 - JUNE 23, 2026

STAFF RECOMMENDATION
Staff recommends the Commission authorize the Company's request to issue an
additional $800,000,000 of Debt. In addition, Staff recommends that the authority under this
approval be continuing, without further order of the Commission, even if the total spreads
exceed those shown in Exhibit D-I at 5 and 6,provided the coupon rate does not exceed 8.0 percent
per annum. Staff further recommends the Commission require the Company to continue
complying with the reporting and filing requirements established in Order Nos. 29947 and 30036.
COMMISSION DECISION
Does the Commission wish to:
1. Authorize the Company's request for authority to issue an additional $800,000,000
of debt securities?
2. Authorize the debt authority to be continuing, without further Commission
approval, even if the total spreads exceed those shown in Exhibit D-I at 5 and 6, so
long as the coupon rate does not exceed 8.0 percent per annum?
3. Require the Company to be subject to the reporting and filing requirements identified?
i
fames Chandler
Auditor 3
I:\Uti1ity\UDMEM0S\AVU-E-26-09 Decision Memo.docx
DECISION MEMORANDUM - 3 - JUNE 23, 2026