HomeMy WebLinkAbout20030613Final Order No 29266.pdfOffice of the Secretary
Service Date
June 13, 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
AVISTA CORPORATION FOR AN ORDER
AUTHORIZING THE OFFERING, ISSUANCE
AND SALE OF SECURITIES NOT TO EXCEED
$150,000 000. CASE NO. AVU-03-
ORDER NO. 29266
Avista Corporation (A vista) filed an Application on May 15 , 2003 requesting
authority to offer, issue and sell up to $150 000 000 of secured or unsecured, fixed or floating
rate bonds, notes and other indebtedness. This request also includes any assumption of any
obligation or liability as guarantor, indorser, surety or otherwise in respect to the securities of any
other person, firm, corporation, or affiliate of A vista, and any refunding, extension, renewal or
replacement of any of the foregoing securities (hereinafter called the "Securities
The Commission, having fully considered the Application, its files and records
relating to this Application and the applicable laws and rules, grants A vista s Application. The
Commission also exchanges the remaining unissued debt authority of $141 000 000 under Order
No. 27153, Case No. WWP-97-, for the requested authority of$150 000 000.
FINDINGS OF FACT
Avista Corporation is a Washington corporation qualified to do business within the
State of Idaho and is a public utility engaged in the generation, purchase, transmission
distribution and sale of electric energy and the purchase, distribution and sale of natural gas.
Avista requests authorization to offer, issue and sell certain secured or unsecured
bonds, notes and other evidences of indebtedness, including, without limitation, assumption of
any obligation or liability as guarantor, indorser, surety or otherwise in respect to the securities of
any other person, firm, corporation, or affiliate of A vista, and any refunding, extension, renewal
or replacement of any of the foregoing Securities.
According to the Application, the proceeds will be used for one or more of the
following purposes: (a) the acquisition of property, or the construction, completion, extension or
improvement of its facilities; (b) the improvement or maintenance of service; (c) the issuance of
stock dividends; (d) the discharge or refunding of its obligations; ( e) the reimbursement of
ORDER NO. 29266
moneys actually expended from income or from the treasury of Avista; or (f) for other purposes
permitted by law. Avista notes that its capital expenditure program requires a combination of
internally generated cash and external financing. Beginning in March 2003, $71 250 000 of debt
maturities must be refinanced in the next nine months. Avista anticipates using the proceeds
from the issuance of the Securities to refinance debt maturities and to repay funds borrowed
under its corporate credit facility. Avista s capital expenditure program is initially funded under
its corporate credit facility. Capital expenditures are expected to be $99 000 000 and
$100 000 000 in 2003 and 2004, respectively.
While no specific transactions are presently pending or contemplated under the
proposed authority, A vista indicates that it will only enter into transactions where the fees
interest rates and expenses charged or incurred in connection with the transactions, and any
refunding, extensions, renewals or replacements thereof, are competitive with then-existing
market prices for similar transactions. The first issuance of debt securities under the requested
authority is anticipated before the end of 2003 and could be in the range of $45-$50 000 000 with
a 5-30 year term and an interest rate ranging from 4.5% to 8%, depending on and subject to then-
existing market prices for similar transactions.
In support of the proposed issuance of the Securities, A vista states that it is amenable
to the Commission prospectively limiting certain existing debt authority to that amount already
issued in Order No. 27153, Case No. WWP-97-, which currently authorizes Avista to issue
$250 000 000 in principal amount of unsecured debt securities (Series C Unsecured Medium
Term Notes). To date, Avista has issued only $109 000 000 of unsecured debt under this
authority, leaving a balance of $141 000 000 remaining unissued. If necessary, A vista states that
it is willing to exchange the unissued balance of debt authority in Order No. 27153, Case No.
WWP-97-1 for new authorization for Avista to issue up to $150 000 000 in aggregate
principal amount of the Securities as described in this Application.
A vista further notes that no person has received or will be entitled to receive any fee
for services in connection with the consummation of the issuance and sale of the Securities, other
than fees for legal, accounting or similar professional or technical services. A vista also states
that no person has received or will be entitled to receive any fee for services in securing
underwriters, sellers or purchasers of these Securities.
ORDER NO. 29266
CONCLUSIONS OF LAW
The Commission finds that A vista is a gas corporation within the definition of Idaho
Code 9 61-117, an electric corporation within the definition of Idaho Code 9 61-119, and a
public utility within the definition of Idaho Code 9 61-129. Therefore, the Commission has
jurisdiction over this Application pursuant to the provisions of Idaho Code 961-901 et seq. The
Commission further finds that the Application reasonably conforms to Rules 141 through 150 of
the Commission s Rules of Procedure, IDAPA 31.01.01.141-150.
The Commission finds that the proposed issuance is for a lawful purpose and is
within Avista s corporate powers. However, this is only a general approval and is not a finding
of fact or a conclusion of law that the particular use to which these funds are to be put is
approved by this Order. The issuance of an Order authorizing the proposed issuance does not
constitute agency determination/approval of the type of financing or the related costs for
ratemaking purposes. The Commission does not have before it for determination in this case
and, therefore, does not determine the effect of issuance on rates to be charged by A vista for gas
or electric service to consumers in the state ofIdaho.
The Commission further finds that the proposed transaction is in the public interest
and a formal hearing on this matter would serve no public purpose.
Avista has paid all lawful fees as provided by Idaho Code 9 61-905.
ORDER
IT IS HEREBY ORDERED that A vista Corporation be, and the same hereby is
authorized to offer, issue and sell up to $150 000 000 in Securities as described in the Application
filed on May 15 , 2003.
IT IS FURTHER ORDERED that the temaining unissued debt authority of
$141 000 000 under Order No. 27153 , Case No. WWP-97-1 is hereby exchanged for the
requested authority of $150 000 000.
IT IS FURTHER ORDERED that Avista is hereby authorized to issue the Securities in
the manner and for the purposes described in the Application with continuing authority to refund
extend, renew or replace the same without further order of the Commission, provided that the fees
interest rates and expenses charged or incurred in connection with any transactions entered into
under the authority of this order, and any refunding, extension, renewal or replacement thereof, are
competitive with market prices for similar transactions.
ORDER NO. 29266
IT IS FURTHER ORDERED that Avista shall file the terms of the proposed Securities
issuance( s) with Staff prior to issuance. This informational filing should be made seven (7) days, or
as soon as possible, prior to the issuance.
IT IS FURTHER ORDERED that Avista shall file, as soon as they become available
the following:
(a) The "Report of Securities Issued" including a verified statement setting forth in
reasonable detail the balance issued and disposition ofthe proceeds; and
(b) Verified copies of any Agreement entered into pursuant to this order.
IT IS FURTHER ORDERED that the foregoing authorization is without prejudice to
the regulatory authority of the Commission with respect to rates, utility capital structure, service
accounts, valuation, estimates for determination of cost or any other matter which may come before
this Commission pursuant to its jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that nothing in this Order and no provisions of Chapter 9
Title 61 , Idaho Code, or any act or deed done or performed in connection therewith shall be
construed to obligate the state of Idaho to payor guarantee in any manner whatsoever any security
authorized, issued, assumed or guaranteed under the provisions of Chapter 9, Title 61 , Idaho Code.
IT IS FURTHER ORDERED that issuance of this Order does not constitute acceptance
of Avista s exhibits or other material accompanying the Application for any purpose other than the
issuance ofthis Order.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) or in interlocutory Orders previously issued in this Case No. A VU-03-
may petition for reconsideration within twenty-one (21) days of the service date of this Order
with regard to any matter decided in this Order or in interlocutory Orders previously issued in
this Case No. A VU-03-Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code
61-626.
ORDER NO. 29266
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this
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day of June 2003.t2t7~-
PAUL KJELLANDER, PRESIDENT
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SHA H. SMITH, COMMISSIONER
ATTEST:
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Commission Secretary
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ORDER NO. 29266