20020314Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONERKJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RANDY LOBB
LISA NORDSTROM
DAVE SCHUNKE
BEVERLY BARKER
BILL EASTLAKE
LOU ANN WESTERFIELD
RON LAW
TONYA CLARK
GENE FADNESS
WORKING FILE
FROM:ALDEN HOLM
TERRI CARLOCK
DATE:MARCH 14,2002
SUBJECT:IDAHO POWER REQUESTEDSHORT-TERM DEBTAUTHORITYOF$350,000,000;CASE NO.IPC-E-02-1.
RECOMMEND:APPROVAL
Idaho Power Company (Company;Idaho Power)requests authorityto borrow not more
than $350,000,000in short-term debt aggregate principle amount through March 31,2004.The
authoritywould replace the short-term authoritythat expires March 31,20022.
The securities will consist of loans issued by financial and other institutions and
evidenced by unsecured notes or other evidence of indebtedness;and unsecured promissory
notes to be issued for public or private placement.The proposed securities issuance will not
exceed a total of $350,000,000aggregate principle outstandingat any one time with interest rates
to be set at the time of issuance.The Company will issue the securities during the one-year
period from April 1,2002 through March 31,2003,and have varyingmaturities of not more than
'Order No.28651 authorized the Company to borrowup to $300,000,000 in short-term debt.That authority expiresonMarch31,2002.The amount requested in this application is separate from and not in addition to the current$300 rnillionpreviouslyauthorized.
DECISION MEMORANDUM l MARCH 14,2002
one year.In no event will the Company have any borrowing from this authorization that matures
beyond March 31,2004.
Proceeds from the short-term borrowings will be used to finance ongoing construction of
utility-relatedprojects,the retirement of maturing debt,the refunding or purchase of debt,
preferred stock or common equity,and other general corporate purposes.
STAFF DISCUSSION AND RECOMMENDATION
Idaho Power requests the short-term debt authoritybe continuous and remain effective
through March 31,2004.Currently,Idaho Power's ratings for Senior Secured Debt are "A2"by
Moody's and "AA-"by Standard &Poors'.For Commercial Paper the ratings are "Pl"by
Moody's and "Al"by Standard &Poors'.At December 31,2001,the Company's capital
structure consisted of 33.3%common equity,7.7%preferred stock,and 59.0%long-term debt.I
recommend the authoritybe granted.The reasonableness of the interest rate and all-in cost will
be evaluated as part of the review of issuance documents in this case and in future audits.The
required fees have been paid.
COMMISSION DECISION
Should authorityto borrow $350,000,000 in short-term debt be approved through March
31,2004?
Alden Holm
i:udmemos/IPC-E-02-01 Decision Memo
DECISION MEMORANDUM 2 MARCH 14,2002