20020415Proposed Order.pdf

LARRY D.RIPLEY ISB #965
Idaho Power Company
P.O.Box70
Boise,Idaho 83707
Telephone:[phone]
FAX Telephone:[phone]
Attorney for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise,Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )OF IDAHO POWER COMPANY FOR AN )CASE NO.IPC-E-02-02ENERGYCOSTFINANCINGORDERAND)AUTHORITY TO INSTITUTE AN ENERGY )SUBMISSION OF PROPOSEDCOSTBONDCHARGE.)ORDER
Idaho Power Company ("the Company")herewith submits a proposed Order
to assist the Commission in its deliberations concerning the technical legal requirements
which must be addressed in a Commission Order in the event that the Commission
determines that it will authorize the issuance of energy cost recoverybonds and the
institution of an energy cost bond charge.The proposed Order was attached to the
Company's Application in this proceeding,but for purposes of the record,the Company
submits the proposed Order including Appendices A,B,and C,as Exhibit 9.
SUBMISSION OF PROPOSED ORDER,Page 1
Respectfully submitted this 15th day of April,2002.
ARRY D/AIPLEÝ '/Attorney for Idaho Power Company
SUBMlSSION OF PROPOSED ORDER,Page 2
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
Case No.IPC-E-02-2
Idaho Power Company
Proposed Order
Exhibit No.9
L.Ripley
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )OF IDAHO POWER COMPANY )FOR AN ENERGY COST FINANCING )CASE NO.¿PC-E-ca -04
ORDER AND AUTHORITY TO )PROPOSED ORDERINSTITUTEANENERGYCOSTBOND)CHARGE )
Exhibit No.9
Case No.IPC-E-02-2
L.Ripley,IPCo
Page 1 of 63
ENERGY COST FINANCING ORDER
TABLE OF CONTENTS
I.DISCUSSION AND STATUTORY OVERVIEW..................................................5
II.DESCRIPTION OF PROPOSED TRANSACTION .............................................11
III.FINDINGS OF FACT................................................................13
A.IDENTIFICATION AND PROCEDURE..................................................13
B.ENERGY COST AMOUNTS TO BE SECURITIZED ..........................................14
C.STRUCTURE OF THE PROPOSED SECURITIZATION.....................................19
D.USE OF PROCEEDS..................................................................34
IV.CONCLUSIONS OF LAW......................................................35
V.ORDERING PARAGRAPHS......................................................45
A.ENERGY COST BOND CHARGES ...............................................46
B.ENERGY COST RECOVERY BONDS .............................................48
C.SERVICING................................................................................50
D.STRUCTURE OF THE SECURITIZATION......................................................52
E.USE OF PROCEEDS.....................................................................52
F.MISCELLANEOUS PROVISIONS.....................................................52
APPENDIX A ECBC Rate Tariff
APPENDIX B Form of Issuance Notice Filing
APPENDIX C Applicant Illustration of Estimated Energy Cost Bond Charges
Exhibit No.9
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ENERGY COST FINANCING ORDER
The matter is before the Idaho Public Utilities Commission (the "Commission")upon the
Application of Idaho Power Company (the "Applicant"),filed March _,2002 under Title 61,
Idaho Code,Chapter 15,for an energy cost financing order authorizing:(a)the issuance and sale
of up to $172,000,000principal amount of energy cost recovery bonds (the "Energy Cost
Recovery Bonds")to recover the followingenergy cost amounts (the "Energy Cost Amounts"):
(i)previously authorized costs to be recovered as power cost adjustments ("PCA"s)in the
approximate amount of $147,000,000,(ii)additional PCAs in the approximate amount of
$18,000,000 and (iii)estimated costs related to the issuance of the Energy Cost Recovery Bonds
in the approximate amount of $7,000,000;(b)the imposition and collection of a non-bypassable,
usage-based energy cost bond charge (the "ECBC");(c)the methodology for the calculation and
adjustment of the ECBC;(d)the sale and/or assignment to a special purpose financing entity (the
"SPE")of energy cost property (the "Energy Cost Property")embodying the right to charge,
collect and receive the ECBC;(e)the Applicant's entering into a servicing agreement with the
SPE providing for the servicing of the Energy Cost Property;and (f)such other transactions,
described herein,as are necessary or desirable in connection with the issuance of the Energy
Cost Recovery Bonds.
This Energy Cost Financing Order addresses the application of the Applicant for an
energy cost financing order instituting the ECBC and providing the other aforementioned
authorizations.As discussed in this Energy Cost Financing Order,the Commission finds that the
public interest will be better served if the Energy Cost Amounts,including those that would
otherwise be reflected in a PCA adjustment,are recovered (i)through the issuance of the Energy
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Cost Recovery Bonds over the term of such bonds instead of (ii)over a one (1)year period
assuming a conventional financing of such amounts,as is required under Title 61,Idaho Code,
Chapter 15 (the "Act").The Commission finds as well that the securitization approved in this
Energy Cost Financing Order meets all other applicable requirements of the Act,and finds that
the Applicant's application for such an order should be approved.
Accordingly,the Commission approves the securitization of the Energy Cost Amounts on
the basis specified in this Energy Cost Financing Order,and authorizes,subject to the terms of
this Energy Cost Financing Order,the issuance of the Energy Cost Recovery Bonds,in a
principal amount not to exceed $172,000,000;approves the ECBC in an amount to be calculated
as provided in this Energy Cost Financing Order;approves the structure of the proposed
securitization financing as described in this Energy Cost Financing Order;and approves the form
of the Applicant's proposed ECBC rate tariff,annexed hereto as AppendixA (the "ECBC Rate
Tariff"'),to implement the ECBC.
The Applicant has provided a description of the proposed transaction structure in its
application.The proposed transaction structure does not contain every relevant detail and in
certain places uses only approximations of certain costs and requirements.The final structure
will depend in part upon the requirements of the nationallyrecognized credit rating agencies that
will rate the Energy Cost Recovery Bonds and in part upon the market conditions that exist at the
time the Energy Cost Recovery Bonds are taken to the market.
While the Commission recognizes the need for some degree of flexibilitywith regard to
the final details of the securitization transactions approved in this Energy Cost Financing Order,
the Commission has determined that,provided the Energy Cost Recovery Bonds are issued,and
Exhibit No.9
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the ECBC is imposed,in conformitywith this Energy Cost Financing Order,the requirements of
the Act shall have been met.Such conformitywill be established through the Applicant's filing
with the Commission an issuance notice filing,in the form annexed hereto as AppendixB (the
"lssuance Notice Filing"),such filing to be made on the day on which the structure and pricing
terms of the Energy Cost Recovery Bonds are finally determined,or on the next succeeding
business day.
1.DISCUSSION AND STATUTORY OVERVIEW
The State of Idaho has seen an increase in the need for replacement power to the point
where "rate shock"has become a concern within the State of Idaho.Such concerns led to the
enactment of the Act as Idaho Senate Bill No.1255,Title 61,Idaho Code,Chapter 15,which
was signed into law on April 10,2001.The legislative intent of the Act is to "provide a process
by which the recovery of large energy cost increases through fuel or power cost adjustments ...
will be facilitated by the issuance of bonds"and to "provide public utilities with a mechanism for
recovery of their increased costs while leveling the rate impact of the increase on the public
utility's customers."'
The Act authonzes the Commission to issue "energy cost financing orders"in favor of a
public utility,pursuant to which "energy cost property"can be created and "energy cost recovery
bonds"secured by such property can be issued by an electric or gas public utility and sold to
investors to finance "energy cost amounts."Energy cost amounts include costs within various
categories listed in the Act,including an electric utility's PCAs,the costs of issuing,supporting
and servicing energy cost recovery bonds,the costs of retiring and refunding the utility's existing
debt and equity securities in connection with the issuance and sale of energy cost recovery bonds
'Statement of Purpose RSI l252C2.
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and taxes related to the recovery of the "energy cost bond charge,"of which the ECBC proposed
by the Applicant is an instance.
The energy cost bond charge is the mechanism established in the Act for recovering
energy cost amounts,including debt service on energy cost recovery bonds.The Act authorizes
the imposition and collection of an energy cost bond charge on the bills of a utility's Idaho retail
customers.In this instance,the ECBC will be collected by the Applicant or by another Servicer
pursuant to a servicing agreement with the SPE,as provided by this Energy Cost Financing
Order.
The Act requires an energy cost bond charge to be non-bypassable,which means that
retail consumers of electricity within a utility's service territory who use the utility'stransmission
and distribution system will be required to pay the charge even if they elect to purchase electric
supply from a third party supplier.Although Idaho does not presently allow for third party
suppliers,the Applicant has proposed that the Commission take certain action to ensure the
collectibility of the ECBC if the State of Idaho should in the future authorize any third party
billingor collection of charges that include the ECBC.This Energy Cost Financing Order
contains terms designed to help ensure that the ECBC remains non-bypassable in such
circumstance,which will in turn minimize the risk that the SPE would receive insufficient ECBC
collections from customers paying to third party suppliers and have to compensate for this
shortfall by increasing the amount of the ECBC payable by customers generally.
Under the Act,energy cost recovery bonds must have an expected maturitydate no later
than five (5)years after issuance and a legal maturitydate no later than seven (7)years after
issuance,and scheduled principal payments must be made,to the extent practicable,in
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approximately equal amounts during each year of the term of the bonds.The Applicant expects
the amortization schedule for the Energy Cost Recovery Bonds to provide for the bonds'
retirement in full approximately three years after issuance,allowingfor final legal maturities up
to two years after the expected maturities of the respective classes.In accordance with Chapter
61,Idaho Code,Section 1503(2),scheduled principal payments on the bonds will,to the extent
practicable,be in approximately equal amounts during each year of the term of such bonds.
The Act provides for the creation of energy cost property by the issuance of an energy
cost financing order.Under the Act,an energy cost financing order becomes irrevocable and
binding upon the Commission once energy cost recovery bonds are issued based on the order,
and the Commission does not have authorityto revalue or revise energy cost amounts while such
bonds remain outstanding except pursuant to the true-up mechanism described below.
Energy cost property constitutes property for all purposes,includingfor contracts
securing energy cost recovery bonds,whether or not the revenues and proceeds arising with
respect thereto have accrued.The interest of an assignee or pledgee in energy cost property and
in the revenues and collections arising from such property are not subject to set-off,
counterclaim,surcharge or defense by the Applicant or any other person or in connection with
the bankruptcy of the relevant public utility or any other person.Further,the issuance of energy
cost recovery bonds,any related transfer or pledge of energy cost property,and any other
transactions incidental to the issuance are exempt from Title 61,Idaho Code,Sections 901
through 908,and to the extent the provisions of Title 61,Idaho Code,Section 1505 conflict with
those of Title 28,Idaho Code,Chapter 9,the creation,granting,perfection and enforcement of
liens and security interests in energy cost property are governed by the former and not the latter.
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The Act,Chapter 61,Idaho Code,Sections 1505 and 1506,establishes procedures for
providing that the sale,assignment or other transfer of energy cost property from a public utility
to an assignee will be perfected under Idaho law and that a secunty interest granted in such
energy cost property will be perfected under Idaho law.Chapter 61,Idaho Code,Sections 1505
provides that a transfer by the public utility or an assignee of energy cost property will be treated
as a sale or other absolute transfer of all of the transferor's right,title and interest,as in a true
sale,and not as a pledge or other financing secured by the energy cost property,if the parties
expressly state in governing documents that the transfer is to be a sale or other absolute transfer.
Under the Act,Chapter 61,Idaho Code,Section 1502(8),the right of a utility in energy
cost property before the transfer of such property or any other rights created under the Act or in
an energy cost financing order constitutes only a contract right but such rights,upon their
transfer,constitute a current and irrevocably vested property right and do so notwithstanding the
fact that the value of such property right will depend upon consumers using electricity and/or the
Applicant performing certain services.
As authorized by Title 61,Idaho Code,Section 1505(6),the Commission shall by this
Energy Cost Financing Order require that,in the event of default by the Applicant in payment of
revenues arising with respect to the Energy Cost Property,the Commission or any successor
agency shall,on application by the SPE or a transferee of the Energy Cost Property,order the
sequestration and payment to such party of revenues arising with respect to the Energy Cost
Property.
The Act authorizes the Commission to issue energy cost financing orders in favor of a
utility only if the sum of (i)any PCAs then in effect,(ii)any energy cost bond charge then in
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effect and (iii)the amount (identified by the utility in an application to the Commission)by
which the PCA would need to be increased absent an issuance of energy cost recovery bonds
(such sum,the "Pro Forma Charge"),would exceed a minimum threshold amount previously
approved by the Commission and in effect at the time of issuance of such energy cost financing
order (the "Minimum Threshold").On May 25,2001,in Case IPC-E-01-19,the Applicant filed
with the Commission an application to set the Minimum Threshold.On June 29,2001,the
Commission,in Order No.28761,approved a Minimum Threshold of one (1)cent per kWh.In
its application,the Applicant asserted that the Pro Forma Charge that would be payable in the
absence of the securitization hereby proposed would exceed the Minimum Threshold,and the
Commission agrees with this determination.
The Act provides for the issuance of an energy cost financing order authorizing the
recovery of energy cost amounts through an issuance of energy cost recovery bonds if the
Commission finds that the public interest would be better served if a public utility's energy cost
amounts,including those that would be reflected in a PCA,are recovered (i)through the issuance
of energy cost recovery bonds over the term of those bonds instead of (ii)over a one (1)year
period assuming a conventional financing of those amounts (the "Public Interest Standard").
The Commission has determined that this standard is met by the Energy Cost Recovery
Bonds.The precise interest rate at which the Energy Cost Recovery Bonds can be sold in a
future market is not known today.The Energy Cost Recovery Bonds,however,are expected to
amortize over approximately a three year period,are expected to receive the highest long-term
debt ratings available from one or more nationallyrecognized rating agencies,and are expected
to be able to finance virtuallyall of the costs to be recovered.For these reasons the issuance of
the Energy Cost Recovery Bonds in lieu of a conventional one (1)year financing will
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significantlyreduce the Applicant's costs of financing the Ongoing PCA Amounts (as defined
below),and will spread the impact of those costs over a period of time that is of appropriate
length from a public interest standpoint.
As required in the Act,Chapter 61,Idaho Code,Section 1503(7),this Energy Cost
Financing Order institutes a mechanism requiring that the ECBC be reviewed at least annually
and that adjustments be made to the ECBC to:(a)correct any undercollections or
overcollections during the period since the last such adjustment and (b)ensure the billing of the
ECBC necessary to generate the collection of amounts sufficient to timely provide all payments
of principal and interest and any other amounts due in connection with the Energy Cost
Recovery Bonds (includingongoing fees and expenses and amounts required to be deposited in
or allocated to any collection account or subaccount thereunder)during the period for which such
adjusted ECBC is to be in effect.
In addition to the required annual reviews,more frequent reviews will be allowed to
ensure that the amount of the ECBC matches the funding requirements approved in this Energy
Cost Financing Order.These provisions will not only help to ensure that the financial
requirements of the proposed securitization are met but also that the amount of ECBC collections
does not exceed the amount necessary to cover these requirements.
To maximize the savings brought to customers through securitization,the Act,Chapter
61,Idaho Code,Section 1503(5),provides as follows:
The state of Idaho does hereby pledge to and agree with the owners of energy cost property
and with any energy cost recovery bondholders that neither the state nor any of its
agencies,includingthe commission,shall (by legislative action,ballot initiative or other
similar process)limit,alter,restrict or impair the energy cost amounts,the energy cost
bond charge,the energy cost property,the energy cost financing orders or any rights
thereunderor ownership thereof or security interest therein or in any way impair the rights
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or remedies of any energy cost recovery bondholders until the energy cost recovery bonds,including all pnncipal,interest,premium,costs,expenses and arrearages thereon,are fully
met and discharged,provided nothing contained in this chapter shall preclude such alimitation,alteration,restriction or impairment if and when adequate provision (includingwithoutlimitationprovisionforthepaymentofprincipalandinterestwhendue)shall bemadebylawfortheprotectionoftheenergycostrecoverybondholders.
To facilitate compliance and consistency with applicable statutory provisions,this Energy
Cost Financing Order adopts the definitions in Title 61,Idaho Code,Chapter 15.
II.DESCRIPTION OF PROPOSED TRANSACTION
A full description of the transactions proposed by the Applicant is provided in its
application and this docket.A brief summary of the proposed transactions is provided in this
section and a more detailed description is included in Section III.C,"Structure of the Proposed
Securitization."To facilitate the proposed securitization,the Applicant proposed that the SPE be
created and that the Applicant transfer to the SPE the Energy Cost Property and the attendant
rights to impose,collect and receive the ECBC along with the other rights arising pursuant to this
Energy Cost Financing Order.Upon such transfer,the Energy Cost Property will become a
current and irrevocably vested property right pursuant to Title 61,Idaho Code,Section 1502(8).
The SPE will issue the Energy Cost Recovery Bonds and transfer the net proceeds from the sale
of such bonds to the Applicant in consideration of the transfer of the Energy Cost Property.The
SPE will be organized and managed in a manner to ensure that the SPE will be bankruptcy-
remote from,and will not be affected by a bankruptcy of,the Applicant or any of its successors.
In addition,the SPE will have at least one independent manager,trustee or director whose
approval will be required for certain major actions or organizational changes by the SPE.
The Energy Cost Recovery Bonds will be issued pursuant to an indenture and
administered by an indenture trustee (the "Trustee").The Energy Cost Recovery Bonds will be
Exhibit No.9
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secured by and payable solely out of the Energy Cost Property and other collateral described in
the Applicant's application.This collateral will be pledged to the Trustee for the benefit of the
holders of the Energy Cost Recovery Bonds.
The Applicant will act as the initial Servicer (in such capacity,the "Servicer")for the
Energy Cost Recovery Bonds.The Servicer will collect the ECBC and remit such collections to
the Trustee on behalf of the SPE.The Servicer will be responsible for making any required or
allowed true-ups of the ECBC.If the Servicer defaults on its obligations under the servicing
agreement,the Trustee may appoint a successor Servicer.
The ECBC will be calculated to ensure the collection of an amount sufficient to service
on a timely basis the principal and interest for the Energy Cost Recovery Bonds and all of the
other Energy Cost Amounts.In addition to the annual true-up required by Title 61,Idaho Code,
Section 1503(7),periodic true-ups may be performed as necessary to ensure that the amount
collected from the ECBC is sufficient to service the Energy Cost Recovery Bonds.
The Applicant requests authority to issue the Energy Cost Recovery Bonds in the original
principal amount of up to $172,000,000,includingtherein the amount necessary to recover the
energy cost amounts,including up-frontand ongoing costs,described in its application and this
docket.The Applicant requests approval of an energy cost bond charge in an amount sufficient
to recover the principal and interest on such bonds as well as all other energy cost amounts
specified in its application and in this docket.
The Applicant requests that the ECBC be imposed (i)upon all of the Applicant's existing
retail customers and all future retail customers located within its certificated service area as it
existed on March I,2002 and,in addition,(ii)on and after July 21,2002,upon all of the
Exhibit No.9
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Applicant's then existing retail customers and all future retail customers located within the
Prairie Service Area.
III.FINDINGS OF FACT
A.IDENTIFlCATION AND PROCEDURE.
IDENTIFICATION OF APPLICANT AND APPLICATION
1.The Applicant is an electric public utility,incorporated under the laws of the state of
Idaho,engaged principallyin the generation,purchase,transmission,distribution and sale of
electric energy in an approximately 20,000 square-mile area in southern Idaho and eastern
Oregon.
2.The Applicant's application was filed on March _,2002 and includes the exhibits,
schedules and any further filing by or for the Applicant in this docket.
PROCEDURAL HISTORY
3.On March 29,1993,by Order No.24806 issued in Case No.IPC-E-92-25,the
Commission approved the implementation of an annual Power Cost Adjustment PCA procedure
(the "PCA Mechanism")to enable the Applicant to collect,or require it to refund,90%of the
difference between net power supply costs actuallyincurred and those allowed in base rates.
Idaho retail customer rates are adjusted annually(up or down)May to May to reflect forecasted
changes in the Applicant's net power supply costs for the current PCA year and to true up any
deviation between forecasted and actual costs for the previous PCA year (April to March).
4.On May 25,2001,the Commission determined that the costs of the Irrigation Load
Reduction Program (authorizingpayments to certain irrigation customers that committed to
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reduce energy consumption)should be treated as a purchased power expense in the PCA
Mechanism.On March 28,2001,the Commission determined that payments for the Astaris
Load Reduction Program should be treated as a purchased power expense in the PCA
Mechanism.
5.On May 25,2001,in Case IPC-E-01-19,the Applicant filed with the Commission an
application to set the Minimum Threshold.On June 29,2001,the Commission,in Order No.
28761,approved a Minimum Threshold of one (1)cent per kWh (approximately $128,000,000).
6.On March _,2002,the Applicant filed its application for an energy cost financing order
under Title 61,Idaho Code,Chapter 15,to permit securitization of certain of its energy cost
amounts as described in its application.
B.ENERGY COST AMOUNTS TO BE SECURITIZED
MINIMUM THRESHOLD
7.The energy cost amounts whose securitization is sought include the followingPCA
amounts,which are either presently includible for recovery through the PCA Mechanism or
whose recovery through the PCA Mechanism the Applicant would request absent a securitization
(collectively,the "Ongoing PCA Amounts"):(a)approximately $82,000,000 [estimated as of
March 8,2002]of power supply costs incurred in excess of the amounts originally forecast for
the 2001-2002 PCA year (excluding voluntaryload reduction programs for the irrigators and
Astaris);(b)approximately $15,000,000 [estimated as of March 8,2002]of power supply costs
forecasted for the 2002-2003 PCA year (excluding the aforesaid voluntaryload reduction
programs);(c)approximately $147,000,000 of voluntaryload reduction payments to the
irrigators and Astaris for the 2001-2002 PCA year;and (d)approximately $18,000,000
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[estimated as of March 8,2002]representing the unamortized balance,as of May 16,2002,of
the previously authorized PCA charge for the period October 1 through September 30,2002.
8.The Ongoing PCA Amounts,absent securitization,would be includible in the 2002 PCA
(which covers the PCA year from May 2002 to May 2003).In its application,the Applicant
asserted,based on the Ongoing PCA Amounts (which total approximately $262,000,000)that the
Pro Forma Charge that would be payable in the absence of the securitization hereby proposed
would exceed the Minimum Threshold.
9.The Commission accepts the Applicant's calculation and concludes that the Minimum
Threshold has been met.
IDENTIFlCATION AND AMOUNTS
10.Energy cost amounts are defined to mean amounts that a public utility,assignee or other
issuer has been authorized to recover by the Commission pursuant to an energy cost financing
order,including without limitation:
(a)Amounts recoverable by a public utility pursuant to a fuel or power cost adjustment,
a purchased gas adjustment tracker rate,a commodity electric or gas tracker rate
adjustment,or a purchased power tracker rate;
(b)Expenditures incurred to refinance or retire existing debt or existing equity capital of
the public utilitythrough the issuance of energy cost recovery bonds and any costs related
thereto;
(c)Amounts necessary to recover federal or state taxes actually paid by a public utility,
which tax liabilityis modified by the transactions approved in an energy cost financing
order issued by the Commission pursuant to this chapter;and
(d)Reasonable costs,as approved by the Commission,relating to the issuance,servicing
or refinancing of energy cost recovery bonds under the provisions of Title 61,Idaho Code,
Chapter 15,includingwithout limitation principal and interest payments and accruals,
sinking fund payments,debt service and other reserves,costs of credit enhancement,
indemnities,if any,owed to an assignee or other issuer or the trustee for the energy cost
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recovery bonds,issuance costs and redemption premiums,if any,and all other reasonable
fees,costs and charges with respect to energy cost recovery bonds.
11.The Applicant has proposed to recover energy cost amounts consisting of the Ongoing
PCAs as well as the up-frontcosts and ongoing costs identified in this docket.The actual costs
of issuing,credit-enhancing and servicing,including third party fees and expenses,the Energy
Cost Recovery Bonds will not be known until the Energy Cost Recovery Bonds are priced,and
certain ongoing costs relating to the Energy Cost Recovery Bonds may not be known until such
costs are incurred.
12.The Applicant has estimated the maximum amount of these costs as shown in this docket
and has proposed to recover these estimated amounts as energy cost amounts through
securitization pursuant to this Energy Cost Financing Order.The Applicant has proposed that,to
the extent that the actual amount of any of the up-frontcosts incurred by the Applicant varies
from the amounts securitized,the Applicant be permitted to recover any additional amounts
reasonably incurred,and be required to provide a credit for any excess amounts securitized,in
either case pursuant to a subsequent PCA or securitization proceeding.
13.The Applicant has proposed to use the net proceeds received from the sale of the Energy
Cost Recovery Bonds for general corporate purposes.
PUBLIC INTEREST SERVED BY SECURITIZATION
14.The Act provides that the Commission shall authorize the issuance of energy cost
recovery bonds if it determines that the Public Interest Standard has been met.
15.The Commission has made a determination with respect to the Public Interest Standard.
The precise interest rate at which the Energy Cost Recovery Bonds can be sold in a future market
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is not known today.The Energy Cost Recovery Bonds,however,are expected to amortize over
approximately a three year period.The Applicant's preliminarydiscussions with the rating
agencies and review of comparable transactions completed on behalf of other electnc utilities
indicate that (a)the Energy Cost Recovery Bonds will be rated in the highest long-term rating
category and (b)the Energy Cost Recovery Bonds will not be treated as debt of the Applicant for
credit rating purposes.Accordingly,the recovery of amounts authorized hereby may be financed
virtually entirelywith Energy Cost Recovery Bonds.Therefore,the Applicant believes that the
use of Energy Cost Recovery Bonds will lower the Applicant's cost of capital as compared to
other commercially reasonable financing alternatives.
16.For these reasons,the issuance of the Energy Cost Recovery Bonds satisfies the Public
Interest Standard.
17.In its application,the Applicant requested authorization of an initial ECBC between
0.50 cents/kWh and 0.65 cents/kWh,it being understood that if the Commission approves a
transaction of less than $172,000,000principal amount of Energy Cost Recovery Bonds,the high
and low points of the range of authorized initial ECBC levels will be reduced ratably.Such
range of authorized initial ECBC levels,inclusive of the stated amounts,and taking into account
such ratable reduction,is referred to in this Energy Cost Financing Order as the "Expected
Range."
18.The determination that the proposed securitization satisfies the Public Interest Standard is
dependent upon the assumption that the ECBC will fall within the Expected Range.To ensure
that the public is served by the issuance of Energy Cost Recovery Bonds and the imposition of
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an ECBC in place of a PCA charge,the issuance of Energy Cost Recovery Bonds must be
structured in a manner that conforms to this assumption.
ISSUANCE NOTICE FILING
19.To ensure that the Energy Cost Recovery Bonds fall within the terms approved by this
Energy Cost Financing Order,the Applicant has proposed that it be required to submit to the
Commission,either on the date on which the structure and pricing of the Energy Cost Recovery
Bonds are determined or on the next succeeding business day,the Issuance Notice Filing,which
shall set forth the followinginformation:(a)the principal amount of each class or tranche of
Energy Cost Recovery Bonds issued;(b)the interest rates and amortization schedules for each
such class or tranche;and (c)the ECBC to be put into effect immediately followingthe date of
issuance,together with the Applicant's certification that such charge falls within the Expected
Range (after giving effect to any adjustment in the Expected Range).
20.All amounts that require computation for purposes of the Issuance Notice Filing shall be
computed using the methodology illustrated in the Applicant's Illustration of Estimated Energy
Cost Bond Charges annexed hereto as AppendixC (the "Illustration").
21.The completion and filing of an issuance notice filing substantially in the form of
Appendix B hereto will ensure that any securitization actuallyundertaken by the Applicant
complies with the terms of this Energy Cost Financing Order.Therefore,the Applicant's
proposal should be approved.
Exhibit No.9
PROPOSED ORDER -18 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 18 of 63
C.STRUCTURE OF THE PROPOSED SECURITIZATION.
THE SPE
22.For purposes of the proposed securitization,the Applicant will create a special purpose
entity,the SPE,which will be a Delaware limited liability company whose sole member will be
the Applicant.
23.The SPE will be formed for the limited purpose of acquiring the Energy Cost Property
(including any energy cost property authorized by the Commission in a subsequent financing
order),issuing the Energy Cost Recovery Bonds (including any energy cost recovery bonds
authorized by the Commission in a subsequent financing order),and performing other activities
relating thereto or otherwise authorized by this Energy Cost Financing Order.
24.The SPE will not be permitted to engage in any other activities and will have no assets
other than the Energy Cost Property (and any subsequent energy cost property)and related assets
to support its obligations under the Energy Cost Recovery Bonds (and any subsequent energy
cost recovery bonds).Obligations relating to the Energy Cost Recovery Bonds (and any
subsequent energy cost recovery bonds)will be the SPE's only significant liabilities.These
restrictions on the activities of the SPE and restrictions on the ability of Applicant to take action
on the SPE's behalf are imposed to ensure that the SPE will be bankruptcy-remote,as described
below,and will not be affected by a bankruptcy of Applicant.
25.The SPE will be managed by a board of managers,trustees or a board of directors with
rights similar to those of boards of directors of corporations.As long as the Energy Cost
Recovery Bonds remain outstanding,the SPE will have at least one manager,trustee or director
who is independent,i.e.,who has no affiliation with the Applicant.The SPE will not be
Exhibit No.9PROPOSEDORDER-19 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 19 of 63
permitted to amend those provisions of its organizational documents that ensure its bankruptcy-
remoteness from the Applicant without the consent of the independent manager,trustee or
director.Similarly,the SPE will not be permitted to institute bankruptcy or insolvency
proceedings or to consent to the institution of bankruptcy or insolvencyproceedings against it,or
to dissolve,liquidate,consolidate,convert or merge without the consent of the independent
manager,trustee or director.Other restrictions to assure bankruptcy-remoteness may also be
included in the organizational documents of the SPE as indicated by the rating agencies.
26.The initial capital of the SPE will be not less than 1.0%of the initial aggregate principal
balance of the Energy Cost Recovery Bonds.The initial capital of the SPE will be contributed to
the SPE by the Applicant.The capitalization of the SPE must be sufficient to allow the SPE to
meet any reasonably expected expenses that might arise relating to the ECBC and the Energy
Cost Recovery Bonds.In addition,the SPE is expected to retain earnings on investments of its
capital until all of the principal of and interest on the Energy Cost Recovery Bonds and all
related expenses have been paid in full.
27.The SPE will issue the Energy Cost Recovery Bonds in an aggregate amount not to
exceed the principal amount approved by this Energy Cost Financing Order and will pledge to
the Trustee,as collateral for payment of the Energy Cost Recovery Bonds,the Energy Cost
Property created by such order,includingthe SPE's right to receive ECBC collections.In
addition,the SPE will pledge to the Trustee certain additional collateral described herein.
28.Concurrently with the issuance of any Energy Cost Recovery Bonds,the Applicant will
transfer to the SPE all of the Applicant's rights under this Energy Cost Financing Order,
includingthe right to impose,collect and receive the ECBC.This transfer will be structured so
Exhibit No.9
PROPOSED ORDER -20 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 20 of 63
as to qualify as a "true sale"within the meaning of Title 61,Idaho Code,Section 1506(1).By
virtue of such transfer,the SPE will acquire all of the right,title,and interest of the Applicant in
the Energy Cost Property.
29.The use and proposed structure of the SPE and the limitations related to its organization
and management are necessary to minimize risks related to the proposed securitization
transactions and to minimize the ECBC.Therefore,the use and proposed structure of the SPE,
as set forth in Findings of Fact Nos.23 through 28,should be approved.
OTHER CREDIT ENHANCEMENT
30.The Applicant proposes that it retain discretion to provide for various other forms of
credit enhancement including letters of credit,reserve accounts,surety bonds,swap
arrangements,hedging arrangements and other mechanisms designed to promote the credit
quality and marketability of the Energy Cost Recovery Bonds and that the costs of any credit
enhancements be included in the amount of qualified costs to be securitized.
ENERGY COST PROPERTY
31.Under Title 61,Idaho Code,Section 1502(8),any right that a public utilityhas in energy
cost property before its sale or other transfer,or any other rights created under Title 61,Idaho
Code,Chapter 15 or in any energy cost financing order and assignable under Title 61,Idaho
Code,Section 1504 or pursuant to an energy cost financing order shall be only a contract right
but shall,upon its transfer,constitute a current and irrevocably vested property right
notwithstanding the fact that the value of such property right will depend upon consumers using
electricity and/or the public utility performing certain services.
Exhibit No.9
PROPOSED ORDER -21 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 21 of 63
32.Energy cost property and all other collateral will be held and administered by the Trustee
pursuant to an indenture,as described in the Applicant's application.This proposal will help
ensure the lowest ECBC and should be approved.
33.Under Title 61,Idaho Code,Section 1505(4),energy cost property constitutes property
for all purposes,includingfor contracts securing energy cost recovery bonds,whether or not the
revenues and proceeds arising with respect thereto have accrued.
SERVICER AND THE SERVICING AGREEMENT.
34.Title 61,Idaho Code,Section 1504(3)provides that,if an interest in energy cost property
is sold or assigned,or is pledged as collateral,the Commission shall authorize the public utility
to contract with an assignee or other issuer that it will continue to operate its system to provide
service to its customers,will collect amounts with respect to energy cost bond charges for the
benefit and account of the assignee or other issuer,and will account for and remit these amounts
to or for the account of the assignee or other issuer.Contracting with the assignee or other issuer
pursuant to this statutory provision does not impair or negate the characterization of the sale,
assignment or pledge as an absolute transfer,a true sale or security interest,as applicable.
35.The Applicant will execute a servicing agreement with the SPE.This agreement may be
amended,renewed or replaced by another servicing agreement.The Applicant will be the initial
Servicer under the servicing agreement but may be succeeded as Servicer by another entity under
certain circumstances detailed in the servicing agreement.
36.Pursuant to the servicing agreement,the Servicer is required,among other things,to
impose and collect the ECBC for the benefit and account of the SPE,to make the periodic true-
up adjustments to the ECBC required or allowed by this Energy Cost Financing Order,and to
Exhibit No.9
PROPOSED ORDER -22 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 22 of 63
account for and remit the ECBC collections to or for the account of the SPE in accordance with
the remittance procedures contained in the servicing agreement without any charge,deduction or
surcharge of any kind (other than the servicing fee specified in the servicing agreement).
37.Under the terms of the servicing agreement,if any Servicer fails to fully perform its
servicing obligations,the Trustee or its designee may,or upon the instruction of the requisite
percentage of holders of the outstanding amount of Energy Cost Recovery Bonds shall,appoint
an alternate party to replace the defaulting Servicer,in which case the replacement Servicer will
perform the obligations of the Servicer under the servicing agreement.The obligations of the
Servicer under the servicing agreement and the circumstances under which an alternate Servicer
may be appointed will be more fully described in the servicing agreement.The rights of the SPE
under the servicing agreement will be included in the collateral pledged to the Trustee for the
benefit of holders of the Energy Cost Recovery Bonds.
38.The obligations to continue to provide service and to collect and account for the energy
cost bond charge will be binding upon the Applicant and any other entity that provides
transmission and distribution services or direct wire services to (i)the Applicant's existing retail
customers and future retail customers located within the Applicant's certificated service area as it
existed on March 1,2002 or (ii)on and after July 21,2002,the Applicant's then existing retail
customers and future retail customers located within the Prairie Service Area.
39.The proposals described in Findings of Fact Nos.34 through 38 are reasonable,will
reduce risk associated with the proposed securitization and will,therefore,facilitate the lowest
ECBC and the greatest benefit to customers and should be approved.
Exhibit No.9PROPOSEDORDER-23 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 23 of 63
ENERGY COST RECOVERY BONDS
40.The SPE may issue and sell the Energy Cost Recovery Bonds in one or more series and
one or more classes or tranches in each series.The scheduled maturity in any series of Energy
Cost Recovery Bonds will not exceed approximately three (3)years from the date of issuance of
such series.The legal final maturitydate of each series and class or tranche and amounts in each
series will be finally determined by the Applicant,consistent with this Energy Cost Financing
Order and market conditions and indications of the rating agencies at the time of issuance.The
Applicant will retain sole discretion regarding whether or when to assign,sell or otherwise
transfer any rights concerning Energy Cost Property arising under this Energy Cost Financing
Order,or to cause the issuance of any of the Energy Cost Recovery Bonds authorized in this
Energy Cost Financing Order.The Applicant may withdraw its application if it disagrees with
any of the terms and conditions of this Energy Cost Financing Order or any modification thereof
within fourteen (14)days of issuance of this Energy Cost Financing Order or of such
modification.
41.The structure of the Energy Cost Recovery Bonds with respect to the maturities and
classes or tranches of the energy cost recovery bonds is reasonable and should be approved,
provided that the initial ECBC instituted in order to support payments on the Energy Cost
Recovery Bonds and all related Energy Cost Amounts falls within the Expected Range.
SECURITY FOR ENERGY COST RECOVERY BONDS
42.The payment of the energy cost recovery bonds authorized by this Energy Cost Financing
Order is to be secured by the energy cost property created by this Energy Cost Financing Order
and by certain other collateral as described in the Applicant's application.The energy cost
Exhibit No.9
PROPOSED ORDER -24 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 24 of 63
recovery bonds will be issued pursuant to the indenture,which will be administered by the
Trustee.The indenture will include provisions for a collection account and subaccounts for the
collection and administration of the energy cost bond charge and payment or fundingof the
principal and interest on the energy cost recovery bonds and other costs,including fees and
expenses,in connection with the energy cost recovery bonds,as described in the Applicant's
application.Pursuant to the indenture,the SPE will establish a collection account as a trust
account to be held by the Trustee as collateral to ensure the payment of the principal,interest,
and other costs approved in this Energy Cost Financing Order related to the energy cost recovery
bonds in full and on a timely basis.The collection account will include the general subaccount,
the overcollateralization subaccount,the capital subaccount,and the reserve subaccount,and
may include other subaccounts.
A.THE GENERAL SUBACCOUNT.
43.The Trustee will deposit the ECBC collections remitted to it by the Servicer for the
account of the SPE into the general subaccount.The Trustee will on a periodic basis apply
moneys in the general subaccount to pay servicing expenses and other expenses of the SPE,to
pay principal and interest on the Energy Cost Recovery Bonds,and to meet the funding
requirements of the other subaccounts.The moneys in the general subaccount (including,to the
extent necessary,investment earnings)will be applied by the Trustee to pay principal and
interest on the energy cost recovery bonds and all other amounts due in accordance with the
terms of the indenture.
Exhibit No.9
PROPOSED ORDER -25 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 25 of 63
B.THE OVERCOLLATERALIZATIONSUBACCOUNT.
44.The overcollateralization subaccount will be periodicallyfunded from ECBC remittances
over the life of the Energy Cost Recovery Bonds.The aggregate amount and timing of the actual
funding will depend on tax and rating agency requirements,and is expected to be not less than
0.5%of the original principal amount of the Energy Cost Recovery Bonds.The
overcollateralization subaccount will serve as collateral to ensure timely payment of principal
and interest on the Energy Cost Recovery Bonds and all other amounts due.To the extent that
the overcollateralization subaccount must be drawn upon to pay any of these amounts owing to a
shortfall in the ECBC remittances,it will be replenished through future ECBC remittances to its
required level through the true-up mechanism.The moneys in the overcollateralization
subaccount (includinginvestment earnings)will be used by the Trustee to pay principal and
interest on the Energy Cost Recovery Bonds and all other amounts due on such bonds.
C.THE CAPITAL SUBACCOUNT.
45.When a series of Energy Cost Recovery Bonds is issued,the Applicant will make a
capital contribution to the SPE for that series.The SPE will deposit this contribution into the
capital subaccount for that series.The amount of the capital contribution will not be less than
1.0%of the original principal amount of each series of Energy Cost Recovery Bonds.The initial
capital of the SPE will be contributed to the SPE by the Applicant.The capital subaccount will
serve as collateral to ensure timely payment of principal and interest on the Energy Cost
Recovery Bonds and all other amounts due.To the extent that the capital subaccount must be
drawn upon to pay these amounts due to a shortfall in the ECBC remittances,it will be
replenished through future such remittances to its original level through the true-up mechanism.
Exhibit No.9PROPOSEDORDER-26 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 26 of 63
46.The moneys in the capital subaccount will be used by the Trustee to pay principal and
interest on the Energy Cost Recovery Bonds and all other amounts due.Upon maturity of the
Energy Cost Recovery Bonds and the discharge of all obligations payable through the ECBC,all
moneys in the capital subaccount,including any investment earnings on amounts on deposit
therein,will be released to the SPE for payment to the Applicant.Such investment eamings will
not be released to the Applicant before such time.
D.THE RESERVE SUBACCOUNT.
47.The reserve subaccount will hold any ECBC remittances and investment earnings on the
collection account in excess of the amounts needed to pay current principal and interest on the
Energy Cost Recovery Bonds and to pay all of the amounts due (includingwithout limitation
fundingor replenishing the overcollateralization subaccount and the capital subaccount).Any
balance in the reserve subaccount on a true-up adjustment date will be subtracted from the
aggregate ECBC amounts otherwise required to be billed.The moneys in the reserve subaccount
(includinginvestment earnings thereon)will be used by the Trustee to pay principal and interest
on the Energy Cost Recovery Bonds and all other amounts due.
E.GENERAL SUBACCOUNT PROVISIONS.
48.The collection account and the subaccounts described above are intended to provide for
full and timely payment of scheduled principal and interest on the Energy Cost Recovery Bonds
and all other amounts due.If the amount of energy cost bond charge collections remitted to the
general subaccount is insufficient to make all scheduled payments of principal and interest on the
Energy Cost Recovery Bonds and to make payment on all other amounts due,the reserve
Exhibit No.9
PROPOSED ORDER -27 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 27 of 63
subaccount,the overcollateralization subaccount,and the capital subaccount will be drawn down,
in that order,to make those payments.
49.Any deficiency in the overcollateralization subaccount or the capital subaccount resulting
from such withdrawals must be replenishedfirst to the capital subaccount and then to the
overcollateralization subaccount on a periodic basis through the true-up mechanism.In addition
to the foregoing,there may be such additional accounts and subaccounts as are necessary to
segregate amounts received from various sources or to be used for specified purposes.Such
accounts and subaccounts will be administered and utilized as set forth in the servicing
agreement and the indenture.
50.As provided in Title 61,Idaho Code,Section 1503(10),any surplus ECBC collections in
excess of the amounts necessary to pay principal,premium,if any,interest,credit enhancement
and all other fees,costs and charges with respect to energy cost recovery bonds will be released
by the SPE to the Applicant and used to benefit the Applicant's customers in such manner as the
Commission may reasonably determine except to the extent that such use would result in a
recharacterization of the tax,accounting or other intended characteristics of the financing and
except that amounts in the capital subaccount will be retained by the Applicant.
51.The use of a collection account and its subaccounts in the manner proposed by the
Applicant is reasonable,will lower risks associated with the securitization and thus lower the
costs to customers,and should,therefore,be approved.
Exhibit No.9
PROPOSED ORDER -28 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 28 of 63
ENERGY COST BOND CHARGES--IMPOSITIONAND COLLECTION,NON-
BYPASSIBILITY
52.The Applicant seeks authorization to impose on and collect from its Idaho retail
customers an energy cost bond charge in an amount sufficient to provide for the timely recovery
of the Energy Cost Amounts,which are approved in this Energy Cost Financing Order (including
payment of principal and interest on the Energy Cost Recovery Bonds and ongoing costs related
to such bonds).
53.The energy cost bond charge will be separately identified on bills presented to retail
customers.
54.If there is a shortfall in payment of an amount billed,the amount paid will,in a manner
consistent with the billing and collection systems in use at the time,first,be proportioned
between the ECBC and other fees and charges,other than late fees,and second,any remaining
portion of the payment will be attributed to late fees.This allocation will facilitate a proper
balance between the competing claims to this source of revenue in an equitable manner.
55.The Applicant will collect the ECBC from (i)all of the Applicant's existing retail
customers and all future retail customers located within its certificated service area as it existed
on March 1,2002 and,in adÃition,(ii)on and after July 21,2002,all of the Applicant's then
existing retail customers and all future retail customers located within the Prairie Service Area.
56.The Applicant's proposal related to imposition and collection of the ECBC is reasonable
and is necessary to ensure ECBC collections sufficient to support recovery of the Energy Cost
Amounts,which should be approved.It is reasonable to approve the form of the ECBC Rate
Tariff in this Energy Cost Financing Order and to require that a tariff substantially in the form of
Exhibit No.9
PROPOSED ORDER -29 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 29 of 63
the ECBC Rate Tariff be filed before any Energy Cost Recovery Bonds are issued,such tariff to
become effective upon filing.
57.The Act requires that the ECBC be non-bypassable,which means that retail consumers of
electricity within a utility's service territory who use the utility's transmission and distribution
system will be required to pay the charge even if they elect to purchase electric supply from a
third party supplier,and this Energy Cost Financing Order shall so provide.In addition,
although Idaho does not presently allow for third party suppliers,the Applicant has proposed that
the Commission take certain action to ensure the collectibilityof the ECBC if the State of Idaho
should in the future authorize any third party billingor collection of charges that include the
ECBC,this so as to minimize the risk that the SPE will receive insufficient ECBC collections
from customers paying directly to third party suppliers and an increase in the ECBC payable by
customers generally would be required.
58.The Applicant has further proposed that the Commission order that,if and to the extent
that the State of Idaho in the future authorizes any third party to bill and collect the ECBC,such
third party must (i)meet any creditworthiness criteria subsequentlyestablished by the
Commission,and (ii)comply with the followingbilling,collection and remittance procedures
and information access requirements:
a)such third party must agree to remit the full amount of all ECBC amounts it bills to
customers,regardless of whether payments are received from such customers,within thirty
(30)days of the Servicer's bill for such charges;
b)such third party must agree to provide the Servicer with total monthlykWh usage
information for each customer in a timely manner to enable the Servicer to fulfill its
obligations,because such information is the basis for assessing the required level of such
remittances;
Exhibit No.9
PROPOSED ORDER -30 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 30 of 63
c)the Servicer shall be entitled,seven (7)days after a default by such third party in
remitting any ECBC amounts payable to the Servicer,to assume responsibility for billing
the ECBC,or to transfer responsibility to a qualifying third party;
d)if and so long as such third party does not maintain at least a "Baa2"and "BBB"(or the
equivalent)long-term unsecured credit rating from Moody's Investors Service and
Standard &Poor's Rating Services,respectively,such third party must maintain,with the
Servicer or as directed by the Servicer,a cash deposit or comparable security equal to two
(2)months'maximum estimated collections of the ECBC,as reasonably determined by the
Servicer.In the event of a default in the remittance of any such amounts by any such third
party,any shortfall in ECBC collections will be included in the true-up;and
e)Customers will continue to be responsible for payment to the Servicer of the ECBC
billed by any third party to the extent such customer has not paid the ECBC billed to it.In
the event of a failure of any customer to pay the ECBC,the Applicant,as Servicer,will be
authorized to direct the Applicant (or any successor provider of electric service)to shut-off
power to such customer in accordance with Commission policies and procedures and any
applicable laws then in effect.
59.The proposals described in Findings of Fact Nos.52 through 58 are reasonable,will
reduce risk associated with the proposed securitization and will,therefore,facilitate the
obtainment of the lowest ECBC and the greatest benefit to customers and should be approved.
THE TRUE-UP MECHANISM
60.Pursuant to Title 61,Idaho Code,Section 1503(7),the Servicer will apply to the
Commission annually to make adjustments to the ECBC,using the methodology shown in the
Illustration,to:(a)correct any undercollections or overcollections during the period since the
last such adjustment and (b)ensure the billing of the ECBC necessary to generate the collection
of amounts sufficient to timely provide all payments of principal and interest and any other
amounts due in connection with the Energy Cost Recovery Bonds (including ongoing fees and
expenses and amounts required to be deposited in or allocated to any collection account or
subaccount thereunder)during the period for which such adjusted ECBC is to be in effect.
Exhibit No.9
PROPOSED ORDER -31 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 31 of 63
61.The true-up of the ECBC will be based upon the Servicer's most recent forecast of
electricity sales and estimates of debt service and other transaction-related expenses.The
calculation of the ECBC will also reflect both a projection of uncollectible ECBC amounts and a
projection of payment lags between the billing and collection of ECBC amounts based upon the
Applicant's most recent experience,taking into consideration payments of ECBC amounts.
62.The true-up adjustment filing will set forth the Servicer's calculation of the true-up
adjustment to the ECBC.The Commission shall,within thirty (30)days after the date of a true-
up adjustment filing,approve or disapprove the adjustment application,which review shall be
limited to confirming the mathematical accuracy of the Servicer's adjustment.Any necessary
corrections to the true-up adjustment that are due to mathematical errors in the calculation of
such adjustment or otherwise will be made in future true-up adjustment filings.
63.Title 61,Idaho Code,Section 1503(7)authorizes the Commission to:(a)specify in an
energy cost financing order that adjustments will be made to the energy cost bond charge more
frequentlythan annually;(b)provide for adjustments to an energy cost bond charge at more
frequent intervals than those initiallyspecified in its energy cost financing order;and
(c)authorize a change in the method for calculating an energy cost bond charge from that which
was initially specified in its energy cost financing order so as to better ensure the timely recovery
of all energy cost amounts.
64.The true-up mechanism proposed by the Applicant is reasonable and will reduce risks
related to the Energy Cost Recovery Bonds resulting in a lower ECBC and greater benefits to
customers and should be approved.
Exhibit No.9
PROPOSED ORDER -32 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 32 of 63
TRANSACTION STRUCTURE AND AMOUNT OF ENERGY COST BOND CHARGE
65.The Applicant has proposed a transaction structure that includes (but is not limited to):
(a)the use of a special purpose entity as issuer of energy cost recovery bonds,limiting
the risks to bond holders of any adverse impact resulting from a bankruptcy proceeding
of its parent or any affiliate;
(b)the right to impose and collect an energy cost bond charge that is non-bypassable and
that must be trued up at least annually,but may be trued up more frequentlyunder certain
circumstances,in order to assure the timely payment of the debt service and other
ongoing transaction costs;
(c)additional collateral in the form of a collection account that will include a capital
subaccount of not less than 1.0%of the initial principal amount of the energy cost
recovery bonds (plus investment earnings on amounts in such subacccount)and an
overcollateralization subaccount that builds up over time to equal not less than an
additional 0.5%of the initial principal amount of the energy cost recovery bonds,and
other subaccounts,resulting in greater certainty of payment of interest and principal to
investors and that are consistent with the requirements of the Internal Revenue Service
that are needed to receive the desired federal income tax treatment for the energy cost
recovery bond transaction;
(d)protection of bondholders against potential defaults by a Servicer that is responsible
for billingand collecting the energy cost bond charge from existing or future retail
customers;
Exhibit No.9
PROPOSED ORDER -33 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 33 of 63
(e)benefits for federal income tax purposes including that:(a)the issuance of this
Energy Cost Financing Order and the sale of the Energy Cost Property to the SPE will
not result in gross income to the Applicant,(b)the issuance of the Energy Cost Recovery
Bonds and the transfer of the net proceeds thereof to the Applicant will not result in gross
income to the Applicant,(c)the Energy Cost Recovery Bonds will be debt obligations of
the Applicant;and
(f)the energy cost recovery bonds will be marketed using proven underwritingand
marketing processes,through which market conditions and investors'preferences,with
regard to the timing of the issuance,the terms and conditions,related maturities,type of
interest (fixed or variable)and other aspects of the structuringand pricing will be
determined,evaluated and factored into the structuringand pricing of the energy cost
recovery bonds.
66.The Applicant's proposed transaction structure,as implemented by this Energy Cost
Financing Order,is necessary to enable the Energy Cost Recovery Bonds to obtain the highest
possible bond credit rating,to ensure that the structuringand pricing of the Energy Cost
Recovery Bonds should result in the lowest ECBC consistent with market conditions and this
Energy Cost Financing Order and to ensure the greatest benefit to customers consistent with
market conditions.
D.USE OF PROCEEDS
67.Upon the issuance of the Energy Cost Recovery Bonds,the SPE will use the net proceeds
from the sale of the Energy Cost Recovery Bonds (after payment of transaction costs)to pay to
the Applicant the purchase price of the Energy Cost Property.
Exhibit No.9
PROPOSED ORDER -34 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 34 of 63
68.Upon receipt of the net proceeds from the sale of the Energy Cost Recovery Bonds (after
payment of transaction costs),the Applicant shall use such net proceeds for general corporate
purposes.
IV.CONCLUSIONS OF LAW
l.The Applicant is an electric public utility under the laws of the state of Idaho,engaged
principally in the generation,purchase,transmission,distribution and sale of electric energy in an
approximately 20,000 square-mile area in southern Idaho and eastern Oregon.
2.The Applicant has met the Minimum Threshold and is entitled to file an application for
an Energy Cost Financing Order under Title 61,Idaho Code,Chapter 15.
3.The Commission has jurisdiction and authority over the Applicant's application pursuant
to Title 61,Idaho Code,Chapter 15.
4.The Commission has authority to approve this Energy Cost Financing Order under Title
61,Idaho Code,Chapter 15.
5.The Applicant's application does not constitute a major rate proceeding as defined by
RP 122.
6.Only the retail portion of energy cost amounts may be recovered through an energy cost
bond charge assessed against retail customers.
7.The SPE shall be an "assignee"as defined in Title 61,Idaho Code,Section 1502(1)when
all or a portion of the Energy Cost Property is transferred,other than as security,to the SPE.
Exhibit No.9
PROPOSED ORDER -35 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 35 of 63
8.The holders of the Energy Cost Recovery Bonds and the Trustee shall each be an "energy
cost recovery bondholder"as defined in Title 61,Idaho Code,Section 1502(10).
9.The Applicant may authorize the SPE to issue the Energy Cost Recovery Bonds,and the
SPE may issue the Energy Cost Recovery Bonds in accordance with this Energy Cost Financing
Order.
10.The securitization approved in this Energy Cost Financing Order satisfies the Public
Interest Standard.
I1.The securitization approved in this Energy Cost Financing Order satisfies the requirement
of Title 61,Idaho Code,Section 1503 that energy cost recovery bonds be sold to recover ECA
amounts and other energy cost amounts.
12.The securitization approved in this Energy Cost Financing Order satisfies the requirement
of Title 61,Idaho Code,Section 1503(1)that the public interest would be better served if the
Energy Cost Amounts are recovered through the issuance of energy cost recovery bonds over the
term of such bonds as opposed to the recovery of the related ECA amounts (as defined in Title
61,Idaho Code,Section 1502(4))over a period of one (1)year,assuming a conventional
financing of such ECA amounts.
13.The methodology approved in this Energy Cost Financing Order to true up the ECBC
satisfies the requirements of Title 61,Idaho Code,Section 1503(7).
14.As provided in Title 61,Idaho Code,Section 1503(5),this Energy Cost Financing Order
and the Energy Cost Amounts and ECBC determined herein shall be irrevocable and binding
upon the Commission,and the Commission shall not have authority either by rescinding,altering
Exhibit No.9
PROPOSED ORDER -36 Case No.IPC-E-02-2
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Page 36 of 63
or amending this Energy Cost Financing Order or otherwise to,either directly or indirectly,
revalue or revise for ratemalang purposes the Energy Cost Amounts.Once the Commission has
determined the ECBC,it cannot determine in a later proceeding that the ECBC is unjust or
unreasonable or in any way reduce or impair the value of the Energy Cost Property either
directly or indirectly by taking the ECBC into account when setting other rates for the Applicant;
nor shall the amount of revenues arising with respect thereto be subject to reduction,impairment,
postponement or termination,except pursuant to the true-up mechanism.
15.As provided in Title 61,Idaho Code,Sections 1504(4),any requirement under Title 61,
Idaho Code,Chapter 15 or this Energy Cost Financing Order that the Commission take action
with respect to the subject matter of this Energy Cost Financing Order shall be binding upon the
Commission,as it may be constituted from time to time,and any successor agency exercising
functions similar to the Commission.The Commission shall have no authority to rescind,alter
or amend any such requirement under Title 61,Idaho Code,Chapter 15 or this Energy Cost
Financing Order,except pursuant to the true-up mechanism.
16.As provided in Title 61,Idaho Code,Sections 1501(8)and 1504,the rights and interests
of the Applicant or its successor under this Energy Cost Financing Order,including the right to
impose,collect and receive the ECBC,shall be assignable and shall become a current and
irrevocably vested property right upon their transfer to the SPE.
17.The Energy Cost Property shall constitute property for all purposes,includingfor
contracts securing the Energy Cost Recovery Bonds,whether or not the revenues and proceeds
arising with respect thereto have accrued,as provided by Title 61,Idaho Code,Section 1505(4).
Exhibit No.9
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18.Upon the transfer by the Applicant of the Energy Cost Property to the SPE in accordance
with this Energy Cost Financing Order,the SPE shall have all of the rights of the Applicant with
respect to the Energy Cost Property.
19.Any payment of the ECBC by a retail customer shall discharge the retail customer's
obligations in respect of such charge but shall not discharge the obligations of the Servicer (or
third party recipient,if any,of such payment)to remit such payment to the Trustee or the
Servicer,as the case may be.
20.As provided in Title 61,Idaho Code,Section 1506(4),the interest of an assignee or
pledgee in the Energy Cost Property and in the revenues and collections arising from such
property shall not be subject to set-off,counterclaim,surcharge or defense by the Applicant or
any other person,or in connection with the bankruptcy of the Applicant or any other person.
21.If and when the Applicant transfers to the SPE the right to impose,collect,and receive
the ECBC and to issue the Energy Cost Recovery Bonds,the Servicer shall be entitled to recover
the ECBC associated with the Energy Cost Property only for the benefit of the SPE and the
energy cost recovery bondholders in accordance with the servicing agreement.
22.If and when the Applicant transfers its rights in a securitization transaction approved in
this Energy Cost Financing Order to the SPE pursuant to documentation that expressly states
such transfer to be a sale or other absolute transfer,as contemplated in Title 61,Idaho Code,
Section 1506(1),then,pursuant to such statutory provision,the Applicant's transfer shall be a
true sale of an interest in the Energy Cost Property and not a secured transaction or other
financing arrangement and title,legal and equitable,shall pass to the SPE,and such true sale
Exhibit No.9
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treatment shall apply notwithstanding any contrary treatment for federal and state income and
franchise taxes,accounting or other purposes.
23.As provided in Title 61,Idaho Code,Section 1505,a valid and enforceable lien and
security interest in the energy cost property in favor of the holders of the energy cost recovery
bonds (or the Trustee on their behalf)shall be created by this Energy Cost Financing Order and
the execution and delivery of a security agreement with the holders of the energy cost recovery
bonds (or the Trustee on their behalf)in connection with the issuance of the Energy Cost
Recovery Bonds.The lien and security interest shall attach from the time that value is given by
the pledgees of the Energy Cost Property and,on perfection through the filing of a financing
statement in accordance with Title 28,Idaho Code,Chapter 9,shall be a continuouslyperfected
security interest in all revenues and proceeds arising with respect thereto,whether or not the
revenues or proceeds have accrued.Conflicting security interests shall rank according to priority
in time of perfection.As provided in Title 61,Idaho Code,Section 1505(3),any financing
statement so filed shall remain in effect until a termination statement is filed.
24.As provided in Title 61,Idaho Code,Section 1505(5),subject to the terms of the security
agreement covering the Energy Cost Property and the rights of any third parties holding security
interests therein perfected in the manner described in such statutory provision,the validity and
relative priority of a security interest created under such statutory provision shall not be defeated
or adversely affected by the commingling of revenues arising with respect to the Energy Cost
Property with other funds of the Applicant,or by any security interest in a deposit account of the
Applicant perfected under Title 28,Idaho Code,Chapter 9,into which the revenues are
deposited.Subject to the terms of such security agreement,the pledgees of the Energy Cost
Property shall have a perfected security interest in all cash and deposit accounts of the Applicant
Exhibit No.9
PROPOSED ORDER -39 Case No.IPC-E-02-2
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in which revenues arising with respect to the Energy Cost Property have been commingled with
other funds,but the perfected security interest shall be limited to an amount not greater than the
amount of the revenues with respect to the Energy Cost Property received by the Applicant
within twelve (12)months before:(a)any default under the security agreement,or (b)the
institution of insolvency proceedings by or against the Applicant,less payments from the
revenues to the pledgees during such twelve (12)month period.
25.As provided in Title 61,Idaho Code,Section 1505(6),if an event of default occurs under
the security agreement covering the Energy Cost Property,the pledgees of the Energy Cost
Property,subject to the terms of such security agreement,shall have all rights and remedies of
secured parties upon default under Title 28,Idaho Code,Chapter 9,and shall be entitled to
foreclose or otherwise enforce their security interest in the Energy Cost Property,subject to the
rights of any third parties holding prior security interests in the Energy Cost Property perfected
in the manner provided in such statutory provision.In addition,pursuant to Title 61,Idaho
Code,Section 1505(6),the Commission shall require in this Energy Cost Financing Order that,
in the event of a default by the Applicant in the payment of revenues arising with respect to the
Energy Cost Property,the Commission and any successor to the Commission,upon application
by the SPE or any subsequeet pledgees or transferees of the Energy Cost Property,and without
limitingany other remedies available to such persons by reason of such default,shall order the
sequestration and payment to the pledgees or transferees of revenues arising with respect to the
Energy Cost Property.As provided in Title 61,Idaho Code,Section 1505(6),this Energy Cost
Financing Order shall remain in full force and effect notwithstandingany bankruptcy,
reorganization,or other insolvency proceedings with respect to the Applicant or any other
pledgor or transferor of the Energy Cost Property.
Exhibit No.9
PROPOSED ORDER -40 Case No.IPC-E-02-2
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26.As provided in Title 61,Idaho Code,Section 1505(9),upon the effective date of this
Energy Cost Financing Order,there shall exist a statutory lien on all of the Energy Cost Property
then existing or thereafter arising pursuant to the terms of this Energy Cost Financing Order.
Such lien shall be a first priority lien and shall arise by operation of Title 61,Idaho Code,Section
1505(9)automatically without any action on the part of the Applicant,the SPE or any other
person,and shall secure all obligations,then existing or subsequently arising,to the Trustee and
to the holders of the Energy Cost Recovery Bonds issued pursuant to this Energy Cost Financing
Order.The persons for whose benefit such lien is established shall,upon the occurrence of any
event of default under the indenture between the SPE and the Trustee,have all rights and
remedies of a secured party upon default under Title 28,Idaho Code,Chapter 9,and shall be
entitled to foreclose or otherwise enforce such statutory lien in the Energy Cost Property.Such
lien shall attach to the Energy Cost Property regardless of who shall own,or shall subsequently
be determined to own,such property including the Applicant,the SPE or any other person.Such
lien shall be valid,perfected,and enforceable against the owner of the Energy Cost Property and
all third parties upon the effectiveness of this Energy Cost Financing Order without any further
public notice;provided,however,that any person may,but shall not be required to,file a
financingstatement in accordance with Title 61,Idaho Code,Section 1505(3).Any financing
statements so filed may be "protective filings"and shall not be evidence of the ownership of the
Energy Cost Property.A perfected statutory lien in the Energy Cost Property shall be a
continuouslyperfected lien in all revenues and proceeds arising with respect thereto,whether or
not the revenues or proceeds have accrued,and conflicting liens shall rank according to priority
in time of perfection.In addition,the Commission requires in this Energy Cost Financing Order,
pursuant to Title 61,Idaho Code,Section 1505(9),that,in the event of a default by the Applicant
Exhibit No.9
PROPOSED ORDER -41 Case No.IPC-E-02-2
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in payment of revenues arising with respect to the Energy Cost Property,the Commission or any
successor to the Commission,upon the application by the beneficiaries of such statutory lien,and
without limitingany other remedies available to the beneficiaries by reason of the default,shall
order the sequestration and payment to the beneficiaries of revenues arising with respect to the
Energy Cost Property.
27.As provided in Title 61,Idaho Code,Section 1505(6),if an event of default occurs under
the security agreement covering the Energy Cost Property,the pledgees of the Energy Cost
Property,subject to the terms of the security agreement,shall have all rights and remedies of a
secured party upon default under Title 28,Idaho Code,Chapter 9,and shall be entitled to
foreclose or otherwise enforce their security interest in the Energy Cost Property,subject to the
rights of any third parties holding prior security interests in the Energy Cost Property perfected
in the manner provided in such provision.
28.As provided by Title 61,Idaho Code,Section 1503(6),the Energy Cost Recovery Bonds
authorized by this Energy Cost Financing Order are not a debt or liability of the State of Idaho or
of any political subdivision thereof and do not constitute a pledge of the full faith and credit of
the State of Idaho or any of its political subdivisions,but are payable solely from the ECBC.
Each of the Energy Cost Recovery Bonds shall contain on its face a statement to the following
effect:"Neither the full faith and credit nor the taxing power of the state of Idaho is pledged to
the payment of the principal of,or interest on,this bond."Title 61,Idaho Code,Section 1503(6)
shall not preclude bond guarantees or enhancements pursuant to Title 61,Idaho Code,Chapter
15,nor shall it preclude the payment of compensation for any breach of the State of Idaho's
pledge (referred to below)or for any action or failure to act by the Commission in contravention
of Title 61,Idaho Code,Chapter 15.
Exhibit No.9
PROPOSED ORDER -42 Case No.IPC-E-02-2
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29.The Act,Chapter 61,Idaho Code,Section 1503(5),provides as follows:
The state of Idaho does hereby pledge to and agree with the owners of energy cost property
and with any energy cost recovery bondholders that neither the state nor any of its
agencies,includingthe commission,shall (by legislative action,ballot initiative or other
similar process)limit,alter,restrict or impair the energy cost amounts,the energy cost
bond charge,the energy cost property,the energy cost financing orders or any rights
thereunder or ownership thereof or security interest therein or in any way impair the rights
or remedies of any energy cost recovery bondholders until the energy cost recovery bonds,
including all principal,interest,premium,costs,expenses and arrearages thereon,are fully
met and discharged,provided nothing contained in this chapter shall preclude such a
limitation,alteration,restriction or impairment if and when adequate provision (including
without limitation provision for the payment of principal and interest when due)shall be
made by law for the protection of the energy cost recovery bondholders.
This pledge and agreement does not preclude the Commission's approval of adjustments to the
ECBC pursuant to the true-up mechanism but instead contemplates such action.
30.Pursuant to Title 61,Idaho Code,Section 1503(5),the State of Idaho has acknowledged
that any energy cost recovery bondholders (as defined in Title 61,Idaho Code,Section 1502(10))
may and will rely on its pledge and agreement and that they would be irreparably harmed by any
such limitation,alteration,restriction or impairment without such adequate provision,and the
Applicant and SPE are authorized to include this pledge and agreement in the Energy Cost
Recovery Bonds and the documents relating thereto.The Applicant and SPE have indicated that
they will include this pledge and agreement in such bonds and related documents.
31.As required by Title $1,Idaho Code,Section 1503(2),this Energy Cost Financing Order
shall remain in effect until all Energy Cost Recovery Bonds and all Energy Cost Amounts have
been paid in full.
32.As provided in Title 61,Idaho Code,Section 1507,any successor to the Applicant,
whether pursuant to any bankruptcy,reorganization or other insolvency proceeding,or pursuant
to any merger,sale or transfer,by operation of law or otherwise,shall perform and satisfy all
Exhibit No.9
PROPOSED ORDER -43 Case No.IPC-E-02-2
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obligations of the Applicant pursuant to Title 61,Idaho Code,Chapter 15,in the same manner
and to the same extent as was required of the Applicant before such proceeding or merger,sale
or transfer including without limitation billing,collecting and paying ECBC collections,and any
other revenues arising with respect to the Energy Cost Property,to the Trustee and the holders of
the Energy Cost Recovery Bonds and seeking ECBC adjustments,as necessary and permitted by
this Energy Cost Financing Order,to recover all Energy Cost Amounts.
33.The Applicant retains sole discretion regarding whether or when to assign,sell or
otherwise transfer the rights and interests created by this Energy Cost Financing Order or any
interest therein or to cause the issuance of any Energy Cost Recovery Bonds.As provided in
Title 61,Idaho Code,Section 1503(3),the Applicant may withdraw its application if it disagrees
with any of the terms and conditions of this Energy Cost Financing Order or any modification
thereof within fourteen (14)days of issuance of this Energy Cost Financing Order or of such
modification.
34.As required in Title 61,Idaho Code,Section 1503(3),this Energy Cost Financing Order
specifies the estimated amount of the ECBC and the formula for determining the amount of such
charge that from time to time shall be sufficient to recover all of the Energy Cost Amounts.
35.The finality of this Energy Cost Financing Order shall not be impaired in any manner by
the participation of the Commission,either directlyor through its delegated personnel,in any
decisions relating to the issuance of the Energy Cost Recovery Bonds or by the Commission's
review,or issuance of any orders,relating to the issuance notice filing to be filed with the
Commission pursuant to this Energy Cost Financing Order.
Exhibit No.9
Case No.IPC-E-02-2PROPOSEDORDER-44 L.Ripley,IPCo
Page 44 of 63
36.This Energy Cost Financing Order meets the requirements for an Energy Cost Financing
Order under Title 61,Idaho Code,Chapter 15.
V.ORDERING PARAGRAPHS
Based upon the record,the Findings of Fact and Conclusions of Law set forth herein,and for the
reasons stated above,the Commission orders:
1.APPROVAL OF APPLICATION.The application of Idaho Power Company for the
issuance of an energy cost financing order under Title 61,Idaho Code,Chapter 15 is approved in
full,as provided in this Energy Cost Financing Order.
2.AUTHORITY TO SECURITIZE.The Applicant may securitize the Energy Cost
Amounts described in its application and this docket in the manner provided by this Energy Cost
Financing Order.To the extent that the actual amount of any of the up-frontcosts incurred by
the Applicant varies from the amounts securitized,the Applicant may recover any additional
amounts reasonably incurred,and may be required to provide a credit for any excess amounts
securitized,in either case pursuant to a subsequent PCA or securitization proceeding.
3.RECOVERY OF ENERGY COST BOND CHARGES.The Applicant shall impose
upon,and the Servicer shall collect from,retail customers (and third party providers,if any),as
provided in this Energy Cost Financing Order,the ECBC,in an amount sufficient to provide for
the timely recovery of the Energy Cost Amounts,as detailed in the application and this docket,
includingpayment of principal and interest on the Energy Cost Recovery Bonds.
4.ISSUANCE NOTICE FILING.This Energy Cost Financing Order shall authorize the
issuance of the Energy Cost Recovery Bonds only (i)if the ECBC that would be put into effect
on the date of the bonds'issuance falls within the Expected Range and (ii)the Applicant files an
Exhibit No.9
PROPOSED ORDER -45 Case No.IPC-E-02-2
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1ssuance Notice Filing substantially in the form of Appendix B hereto either on the date on
which the structure and pricing of the Energy Cost Recovery Bonds are determined or on the
next succeeding business day.The Issuance Notice Filingshall set forth the following
information:(a)the principal amount of each class or tranche of Energy Cost Recovery Bonds
issued;(b)the interest rates and amortization schedules for each such class or tranche;and (c)the
ECBC to be put into effect on the date of issuance,together with the Applicant's certification that
such charge falls within the Expected Range (after giving effect to any adjustment therein to
reflect a reduction if the Commission approves a transaction of less than $172,000,000 principal
amount of Energy Cost Recovery Bonds).
5.APPROVAL OF ECBC RATE TARIFF.The form of the ECBC Rate Tariff annexed
hereto as Appendix A to this Energy Cost Financing Order is approved.Prior to the issuance of
any Energy Cost Recovery Bonds under this Energy Cost Financing Order,the Applicant shall
file a tariff substantially in the form of Appendix A hereto.Such tariff shall become effective
upon filing.
A.ENERGY COST BOND CHARGES
6.IMPOSITION AND COLLECTION:SPE'S RIGHTS AND REMEDIES.The Applicant
is authorized to impose the ECBC on,and the Servicer is authorized to collect the ECBC from,
retail customers (and third party supplies,if any),as provided in this Energy Cost Financing
Order,in an amount sufficient to provide for the timely recovery of the Energy Cost Amounts as
approved in this Energy Cost Financing Order.If there is a shortfall in payment of an amount
billed,the amount paid shall,in a manner consistent with the billingand collection systems in
use at the time,first,be proportioned between the ECBC and other fees and charges,other than
Exhibit No.9
PROPOSED ORDER -46 Case No.IPC-E-02-2
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Page 46 of 63
late fees,and second,any remaining portion of the payment shall be attributed to late fees.Upon
the transfer by the Applicant of the Energy Cost Property to the SPE,the SPE shall have all of
the rights of the Applicant with respect to the Energy Cost Property,includingwithout limitation
the right to exercise any and all rights and remedies with respect thereto,including the right to
authorize disconnection of electric service and to assess and collect any amounts payable by any
retail customer in respect of the Energy Cost Property.
7.COLLECTOR OF ENERGY COST BOND CHARGES.The Applicant shall collect
ECBC and shall remit collections of the ECBC to the Trustee for the account of the SPE.
8.NON-BYPASSIBILITY.The ECBC shall be imposed (i)upon all of the Applicant's
existing retail customers and all future retail customers located within its certificated service area
as it existed on March I,2002 and,in addition,(ii)on and after July 21,2002,upon all of the
Applicant's then existing retail customers and all future retail customers located within the
Prairie Service Area.In addition,if and to the extent that the State of Idaho in the future
authorizes any third party to bill or collect charges that include the ECBC,such third party must
(i)meet any creditworthiness criteria subsequently established by the Commission,and
(ii)comply with the followingbilling,collection and remittance procedures and information
access requirements:
a)such third party must agree to remit the full amount of all ECBC amounts it bills to
customers,regardless of whether payments are received from such customers,within thirty
(30)days of the Servicer's bill for such charges;
b)such third party must agree to provide the Servicer with total monthlykWh usage
information for each customer in a timely manner to enable the Servicer to fulfill its
obligations,because such information is the basis for assessing the required level of such
remittances;
Exhibit No.9
PROPOSED ORDER -47 Case No.IPC-E-02-2
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c)the Servicer shall be entitled,seven (7)days after a default by such third party in
remitting any ECBC amounts payable to the Servicer,to assume responsibility for billing
the ECBC,or to transfer responsibility to a qualifying third party;
d)if and so long as such third party does not maintain at least a "Baa2"and "BBB"(or the
equivalent)long-term unsecured credit rating from Moody's Investors Service and
Standard &Poor's Rating Services,respectively,such third party must maintain,with the
Servicer or as directed by the Servicer,a cash deposit or comparable security equal to two
(2)months'maximum estimated collections of the ECBC,as reasonably determined by the
Servicer.In the event of a default in the remittance of any such amounts by any such third
party,any shortfall in ECBC collections will be included in the true-up;and
e)Customers will continue to be responsible for payment to the Servicer of the ECBC
billed by any third party to the extent such customer has not paid the ECBC billed to it.In
the event of a failure of any customer to pay the ECBC,the Applicant,as Servicer,will be
authorized to direct the Applicant (or any successor provider of electric service)to shut-off
power to such customer in accordance with Commission policies and procedures and any
applicable laws then in effect.
9.TRUE-UPS.True-ups of the ECBC shall be undertaken and conducted as described in
Findings of Fact Nos.60 through 64 of this Energy Cost Financing Order.The Servicer shall file
the true-up adjustment with the Commission.
10.OWNERSHIP NOTIFICATION.The Applicant (or any other entity that may bill the
ECBC to customers)shall,at least annually,provide written notification,to each retail customer
to which the ECBC is billed,that the ECBC collections are the property of the SPE and not of
the billingentity.
B.ENERGY COST RECOVERY BONDS
11.ISSUANCE.The SPE is authonzed to issue Energy Cost Recovery Bonds as specified in
this Energy Cost Financing Order.
12.ADDITIONAL FINANCINGS.The Applicant,the SPE or any other assignee may apply
for one or more successive energy cost financingorders pursuant to Title 61,Idaho Code,
Section 1503(2).
Exhibit No.9
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13.COLLATERAL.All of the Energy Cost Property and other collateral shall be held and
administered by the Trustee pursuant to the indenture as described in the Applicant's application.
The SPE shall establish a collection account with the Trustee as described in Findings of Fact
Nos.42 through 51.Upon the maturityof the Energy Cost Recovery Bonds and the discharge of
all obligations in respect thereof,all amounts in the collection account,other than amounts in the
capital subaccount (includinginvestment earnings),shall be released to the SPE and shall be
credited to the Applicant's retail customers.The Applicant shall within thirty (30)days after the
date that these funds are eligible to be released notify the Commission of the amount of such
funds available for crediting to the benefit of its retail customers.
14.FUNDING OF CAPITAL SUBACCOUNT.The capital subaccount shall be funded by a
capital contribution from the Applicant in an initial amount of not less than 1.0%of the initial
aggregate principal balance of the Energy Cost Recovery Bonds,and investment earnings on
such amount are expected to be retained by the SPE pursuant to the indenture until all of the
principal of and interest on the Energy Cost Recovery Bonds is paid and all other Energy Cost
Amounts are paid in full.Upon the maturityof the Energy Cost Recovery Bonds and the
discharge of all obligations in respect thereof,all amounts in the capital subaccount,including
investment eamings thereon,shall be released to the SPE for payment to the Applicant.
15.CREDIT ENHANCEMENT.The Applicant may provide for various forms of credit
enhancement includingletters of credit,reserve accounts,surety bonds,swap arrangements,
hedging arrangements and other mechanisms designed to promote the credit quality and
marketability of the Energy Cost Recovery Bonds or to mitigate the risk of an increase in interest
rates;provided that (i)the costs of such credit enhancement shall not cause the aggregate amount
of up-front costs securitized plus the expense of reacquiring debt and equity to exceed the
Exhibit No.9
PROPOSED ORDER -49 Case No.IPC-E-02-2
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amount specified in this docket and (ii)the Commission shall be informed of the decision to use
such credit enhancement.This Ordering Paragraph shall not apply to the collection account or
those of its subaccounts that have been approved in this Energy Cost Financing Order.
16.LIFE OF BONDS.The scheduled maturityin any series of Energy Cost Recovery Bonds
will not exceed approximately three (3)years from the date of issuance of such series.The legal
final maturity date of each series and class or tranche and amounts in each series shall be finally
determined by the Applicant,consistent with this Energy Cost Financing Order and market
conditions and indications of the rating agencies at the time of issuance.
17.AMORTIZATION.Scheduled principal payments on the Energy Cost Recovery Bonds
shall,to the extent practicable,be scheduled to be made in approximately equal amounts during
each year of the term of such bonds.
18.USE OF THE SPE.The Applicant shall use the SPE,as proposed in its application,in
conjunction with the issuance of any energy cost recovery bonds authorized under this Energy
Cost Financing Order.The SPE shall be funded with an amount of capital that is sufficient for
the SPE to carry out its intended functions and to minimize the possibility that the Applicant
would have to extend funds to the SPE in a manner that could jeopardize the bankruptcy-
remoteness of the SPE.
C.SERVICING
19.SERVICING AGREEMENT.The Commission authorizes the Applicant to enter into the
servicing agreement with the SPE and to perform the servicing duties approved in this Energy
Cost Financing Order.Without limitingthe foregoing,in its capacity as initial Servicer of the
energy cost property,the Applicant is authorized to calculate,bill and collect,for the account of
Exhibit No.9
PROPOSED ORDER -50 Case No.IPC-E-02-2
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Page 50 of 63
the SPE,the ECBC initiallyauthorized in this Energy Cost Financing Order,as adjusted from
time to time pursuant to the true-up mechanism,and to make such filings and take such other
actions as are required or permitted by this Energy Cost Financing Order in connection with the
periodic true-ups described in this Energy Cost Financing Order.The Servicer shall be entitled
to collect servicing fees in accordance with the provisions of the servicing agreement.As set
forth in its application and this docket,the Applicant has indicated that the per annum servicing
fee it or any of its affiliates will receive while serving as Servicer shall not at any time exceed
0.25%(25 basis points)of the initial principal balance of each series of Energy Cost Recovery
Bonds,payable monthly.
20.REPLACEMENT OF APPLICANT AS SERVICER.In the event of a default by the
Applicant in any of its servicing functions with respect to the ECBC,the SPE may replace the
Applicant as Servicer in accordance with the terms of the servicing agreement.No entity may
replace the Applicant as the Servicer in any of its servicing functions with respect to the energy
cost bond charge and the energy cost property authorized by this Energy Cost Financing Order if
the replacement would cause any of then current credit ratings of the energy cost recovery bonds
to be suspended,withdrawn or downgraded.The per annum servicing fee payable to any
Servicer not affiliated with the Applicant shall not at any time exceed 1.25%of the initial
principal balance of each series of Energy Cost Recovery Bonds,payable periodically.
21.COLLECTION TERMS.The Servicer shall remit collections of the ECBC to the SPE or
the Trustee for the SPE's account in accordance with the terms of the servicing agreement.
22.CONTRACT TO PROVIDE SERVICE.Upon the transfer and pledge of the Energy
Cost Property created by this Energy Cost Financing Order to the SPE,the Applicant shall,as
Exhibit No.9
PROPOSED ORDER -51 Case No.IPC-E-02-2
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required by Title 61,Idaho Code,Section 1504(3),contract with the SPE that the Applicant will
continue to operate its system to provide service to its customers,will collect amounts with
respect to the ECBC for the benefit and account of the SPE,and will account for and remit these
amounts to or for the account of the SPE.Such a contract shall not impair or negate the
characterization of such transfer or pledge,as the case may be,as an absolute transfer,a true sale
or a security mterest.
D.STRUCTURE OF THE SECURITIZATION
23.STRUCTURE.The Applicant shall structure this securitization as proposed in the
Applicant's application as implemented by this Energy Cost Financing Order.
E.USE OF PROCEEDS
24.USE OF PROCEEDS.Upon the issuance of the Energy Cost Recovery Bonds,the net
proceeds received by the Applicant shall be used for general corporate purposes.
F.MISCELLANEOUS PROVISIONS
25.CONTINUING ISSUANCE RIGHT.The Applicant has the continuingirrevocable right
to cause the issuance of Energy Cost Recovery Bonds in one or more series,subject to the terms
of this Energy Cost Financing Order,for a period of one (1)year after this Energy Cost
Financing Order becomes non-appealable,provided that the Applicant may apply to seek an
extension or renewal of this Energy Cost Financing Order.
26.BINDING ON SUCCESSORS.This Energy Cost Financing Order,together with the
ECBC authorized hereby,shall be binding upon the Applicant and any successor thereto that
provides transmission and distribution services or direct wire services to (i)the Applicant's
Exhibit No.9
PROPOSED ORDER -52 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 52 of 63
existing retail customers and future retail customers located within the Applicant's certificated
service area as it existed on March 1,2002 or (ii)on and after July 21,2002,the Applicant's then
existing retail customers and future retail customers located within the Prairie Service Area.In
this paragraph,a "successor"means any entitythat succeeds by any means whatsoever to any
interest or obligation of its predecessor,whether pursuant to any bankruptcy,reorganization or
other insolvency proceeding,or pursuant to any merger,sale or transfer,by operation of law or
otherwise.
27.FLEXIBILITY.Subject to compliance with the requirements of this Energy Cost
Financing Order,the Applicant and the SPE shall be afforded flexibility in establishing the terms
and conditions of the Energy Cost Recovery Bonds,includingthe final structure of the SPE as a
Delaware limited liabilitycompany,repayment schedules,term,payment dates,collateral,credit
enhancement,required debt service,reserves,interest rates,indices and other financing costs and
the ability of the Applicant,at its option,to issue one or more series of the Energy Cost Recovery
Bonds.
28.EFFECTIVENESS OF ORDER.Subject to the terms hereof,this Energy Cost Financing
Order shall become effective on the date hereof (the "Effective Date");provided that the
Applicant shall not be authorized to impose,collect or receive the ECBC until the Issuance
Notice Filing has been made and the Energy Cost Property and other rights of the Applicant
under this Energy Cost Financing Order have been transferred to the SPE in conjunction with the
issuance of the Energy Cost Recovery Bonds.This Energy Cost Financing Order shall remain in
effect from and after the Effective Date (i)until one (1)year from the date on which it shall have
become non-appealable if no Energy Cost Recovery Bonds shall have been issued during such
one (1)year period or (ii)if Energy Cost Recovery Bonds are issued pursuant to this Energy
Exhibit No.9
PROPOSED ORDER -53 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 53 of 63
Cost Financing Order within such one (1)year period,then until all of the principal of,interest
on and other amounts due under the Energy Cost Recovery Bonds and all other Energy Cost
Amounts shall have been paid in full,provided that the Applicant may apply to seek an extension
or renewal of this Energy Cost Financing Order.
29.EFFECT.This Energy Cost Financing Order constitutes a legal Energy Cost Financing
Order for Idaho Power Company under Title 61,Idaho Code,Chapter 15.The Commission
finds this Energy Cost Financing Order complies with the provisions of Title 61,Idaho Code,
Chapter 15.An Energy Cost Financing Order gives rise to rights,interests,obligations and
duties as expressed in Title 61,Idaho Code,Chapter 15.It is the Commission's express intent to
give rise to those rights,interests,obligations and duties by issuing this Energy Cost Financing
Order.The Applicant and the Servicer of the Energy Cost Recovery Bonds are directed to take
all actions as are required to effectuate the transactions approved in this Energy Cost Financing
Order,subject to compliance with the criteria established in this Energy Cost Financing Order.
30.THIS IS A FINAL ORDER.Any person interested in this Energy Cost Financing Order
(or in issues finallydecided by this Energy Cost Financing Order)or in interlocutoryorders
previously issued in this case may petition for reconsideration within twenty-one (21)days of the
service date of this Energy C'ost Financing Order with regard to any matter decided in this
Energy Cost Financing Order or in interlocutoryorders previously issued in this case.Within
seven (7)days after any person has petitioned for reconsideration,any other person may cross-
petition for reconsideration.See Title 61,Idaho Code,Section 626.
SIGNED AT BOISE,IDAHO THE DAY OF ,2002.
Exhibit No.9
PROPOSED ORDER -54 Case No.IPC-E-02-2
L.Ripley,IPCo
Page 54 of 63
APPENDIX A
Exhibit No.9
Case No.IPC-E-02-2
L.Ripley,IPCo
Page 55 of 63
IDAHO POWER COMPANY
l.P.U.C.NO.26,TARIFF NO.101 ORIGINAL SHEET NO.57-1
SCHEDULE 57
ENERGY COST BOND CHARGE
APPUCABILITY
This schedule is applicable to the electric energy billed to all retail Customers throughout the
Company's service area within the State of Idaho,including the first block portion of the FMC/Astaris
special contract,the energy billed to other retail Customers taking service under special contract,and,on
and after July 21,2002,the energy billed to the existing and future retail Customers located within the
Prairie Service Area.
This schedule sets out the rates,terms and conditions under which an Energy Cost Bond Charge
shall be billed and collected by the Company,o successor Servicer,or any third party that may assume
the responsibility for billing or collecting such charge on behalf of the owner of the Energy Cost Property
pursuant to the terms of the Financing Order and the Servicing Agreement.
DEFINITIONS
For the purposes of this schedule the following terms shol\have the following meanings:
Enerqv Cost Bond Charge is a non-bypassable charge,expressed in cents per kWh.applied to
each Customer's billed energy on a monthly basis.The monthly Energy Cost Bond Charge will be
separately stated on the Customer's regular bill.
Enerav Cost Property is the property created by the Financing Order pursuant to Title 61.Idaho
Code,Chapter 15.
Enerqv Cost Recovery Bonds are the debt securities issued by the Special Purpose Entity pursuant
to Title 61,Idaho Code,Chapter 15 and the Financing Order,together with any additional such securities
issued pursuont to Title 61,Idaho Code,Chapter 15 and any subsequent energy cost financing orders
issued pursuant to Title 61,idaho Code,Chapter 15.
Financina Order is the energy cost financing order issued by the Commission pursuant to Title 61,
idaho Code,Chapter 15.Order No.
Servicer is the entity responsible for,among other things,bi\\\ng and collecting the Energy Cost
Bond Charge.
Servicina Aareement is the agreement,dated ,2002,between the Company,as
Servicer,and the Special Purpose Entity,as from time to time in effect.
Special Purpose Entity is the owner of Energy Cost Property,on behalf of which the Energy Cost
Bond Charge is collected.
DETERMINATIONOF ENERGY COST BOND CHARGE
The Energy Cost Bond Charge shall be adjusted no less frequently than annually in order to ensure
that e×pected Energy Cost Bond Charge collections are sufficient to pay,on a timely basis,the principal of
and interest on all Energy Cost Recovery Bonds and all other energy cost amounts approved in the
Financing Order.The Energy Cost Bond Charge for a period is determined by dividing (a)the amount
necessary to pay,on a timely basis,the principal of and interest on the Enerav Cost Recoverv Bonds and
Exhibit No.9
IDAHO issued Case No.IPC-E-02-2
Issued -John R.Gale,Vic L.Ripley,IPCo
Effective -1221 Y Page 56 of 63
IDAHO POWER COMPANY
1.P.U.C.NO.26,TARIFF NO.101 ORIGINAL SHEET NO.57-2
SCHEDULE 57
ENERGY COSTBOND CHARGE
(Continued)
DETERMINATION OF ENERGY COST BOND CHARGE (Continued)
all other approved projected energy cost amounts for the period (giving effect to lags between billing
and collection and allowing for uncollectibles)by (b)the projected kilowatt-hours of retail energy to be
billed for the period.
ENERGY COST BONDCHARGE
The Energy Cost Bond Charge is c per kWh for each billed kWh.
PAYMENT
The billing and payment of the Energy Cost Bond Charge shall be on terms identical to the billing
and payment provisions of the service schedule or special contract under which the Customer is taking
service.
EXPIRATION
This schedule shall remain in effect until the Energy Cost Bond Charge collections have been made
and remitted to the Special Purpose Entity in an amount sufficient to satisfy all obligations of the Special
Purpose Entity in regard to paying the principal of and interest on the Energy Cost Bonds together with all
other energy cost amounts whose recovery throughthe Energy Cost Bond Charge is authorized in the
Financing Order,as provided in Title 61,Idaho Code,Chapter 15.This schedule is irrevocable and non-
bypassable for the full term during which it applies.
Exhibit No.9
IDAHO Issued Case No.IPC-E-02-2
Issued -John R.Gale,Vic L.Ripley,IPCo
Effective -1221 Y Page 57 of 63
APPENDIX B
Exhibit No.9
Case No.IPC-E-02-2
L.Ripley,IPCo
Page 58 of 63
IDAHO POWER COMPANY APPENDIX B
FORM OF ISSUANCE NOTICE FILING
[Letterhead of Applicant]
[to be filed on the date of pncing of the Energy Cost Recovery Bonds
or on the followingbusiness day]
[date]
Idaho Public Utilities Commission
[ADDRESS]
Attention:
Re:Applcation of ldaho Power Company for an Enerey Cost Financing Order and
Authoritv to lnstitute an Energy Cost Bond Charge
IDAHO POWER COMPANY (the "Applicant")submits this lssuance Notice
Filing pursuant to Ordenng Paragraph No.4 of the Energy Cost Financing Order in
Application of Idaho Power Company for an Energy Cost Financing Order and Authority
to Institute an Energy Cost Bond Charge,Docket No.(the "Energy Cost
Financing Order").Capitalized terms used herein without definition have the meanings
assigned to them in the Energy Cost Financing Order.
This letter constitutes the lssuance Notice Filing of the Applicant required under
the Energy Cost Financing Order and sets forth the followingparticulars of the Energy
Cost Recovery Bonds,which are to be issued on the Closing Date indicated below:
Name of Energy Cost Recovery Bonds:
SPE:
Closing Date:
Principal Amount of Energy Cost Recovery Bonds Issued (per class):
Class
Class
Class
Class
Interest Rates and Expected Amortization Schedule (per class):See
Attachment 1.
ECBC to be put into effect on Closing Date:cents/kWh
The Applicant hereby certifies that the ECBC to be put into effect on the Closing
Date falls within the Expected Range after giving effect to any adjustment in the
Expected Range required under the Energy Cost Financing Order.
The Applicant is delivering this Issuance Notice Filing to the Commission and to
no other person.The Applicant specificallydisclaims any responsibility to any other
Exhibit No.9
NYB 520658.1 37652 00779 03/08/02 06:45pm Case No.IPC-E-02-2
L.Ripley,IPCo
Page 59 of 63
person for the contents of this lssuance Notice Filing,whether such person claims rights
directly or as a third party beneficiary.
IDAHO POWER COMPANY
By:
(title)
Exhibit No.9
NYB 520658.1 3765200779 03/08/02 06:45pm Case No.IPC-E-02-2
L.Ripley,IPCo
Page 60 of 63
APPENDIX C
Exhibit No.9
Case No.IPC-E-02-2
L.Ripley,IPCo
Page 61 of 63
APPENDIXC
luAHO POWER COMPANY
ENERGY COST FINANCING ORDER
ILLUSTRATION OF ESTIMATED ENERGY COST BOND CHARGES (a)
MONTHLYCOLLECTIONS
Forecast Projected %of ECBCs Collected Projected ECBC
Sales ECBC ECBC in Month 2 Months Collections (millions)
(thousand (cents Billings in Month After After Semi-
Month mWh)per kWh)(millions)of Billinq Billinq Billinq Charge-offs Monthly Annually
llay-2002(b)506,836 0.5352 $2.712 10.0%60.0%29.5%0.5%$0.271
Jun-2002 1,120,106 0.5352 $5.995 30.0%50.0%19.5%0.5%$3.426
Jul-2002 1,335,010 0.5352 57.145 30.0%50.0%19.5%0.5%$5.941 $30.004
Aug-2002 1,384,285 0.5352 $7.408 30.0%50.0%19.5%0.5%$6.964
Sep-2002 1,212,991 0.5352 $6.492 30.0%50.0%19.5%0.5%$7.045
Oct-2002 1,038,656 0.5352 $5.559 30.0%50.0%19.5%0.5%$6.358
Nov-2002 986,698 0.5352 $5.281 30.0%50.0%19.5%0.5%$5.629
Dec-2002 1,087,955 0.5352 55.822 30.0%50.0%19.5%0.5%$5.471
Jan-2OO3 1,180,518 0.5352 $6.318 30.0%50.0%19.5%0.5%$5.836 $34.482
Feb-2003 1,119.440 0.5352 $5.991 30.0%50.0%19.5%0.5%$6.092
Mar-2003 1,072,423 0.5352 $5.739 30.0%50.0%19.5%0.5%$5.949
Apr-2003 913,676 0.5352 $4.890 30.0%50.0%19.5%0.5%$5.505
May-2003 953,206 0.4751 54.529 30.0%50.0%19.5%0.5%$4.923
Jun-2003 1,068,203 0.4751 55.075 30.0%50.0%19.5%0.5%$4.740
Jul-2003 1,292,538 0.4751 $6.141 30.0%50.0%19.5%0.5%$5.263 $32.419
Aug-2003 1,346,229 0.4751 $6.396 30.0%50.0%19.5%0.5%$5.979
Sep-2003 1,173.922 0.4751 55.577 30.0%50.0%19.5%0.5%$6.068
Oct-2003 989,969 0.4751 $4.703 30.0%50.0%19.5%0.5%$5.447
Nov-2003 939,383 0.4751 $4.463 30.0%50.0%19.5%0.5%$4.778
Dec-2003 1,044,117 0.4751 $4.960 30.0%50.0%19.5%0.5%$4.637
Jan-2004 1,149,862 0.4751 $5.463 30.0%50.0%19.5%0.5%$4.989 $29.703
Feb-2004 1,101,699 0.4751 $5.234 30.0%50.0%19.5%0.5%$5.269
Mar-2004 1,040,054 0.4751 $4.941 30.0%50.0%19.5%0.5%$5.165
Apr-2004 964,365 0.4751 54.582 30.0%50.0%19.5%0.5%$4.866
May-2004 1,001,528 0.4448 $4.454 30.0%50.0%19.5%0.5%$4.591
Jun-2004 1,109,550 0.4448 $4.935 30.0%50.0%19.5%0.5%$4.601
Jul-2004 1,332.811 0.4448 $5.928 30.0%50.0%19.5%0.5%$5.114 $31.133
Aug-2004 1,378,041 0.4448 $6.129 30.0%50.0%19.5%0.5%$5.765
Sep-2004 1,203,858 0.4448 $5.354 30.0%50.0%19.5%0.5%$5.827
Oct-2004 1,020,923 0.4448 $4.541 30.0%50.0%19.5%0.5%$5.235
Nov-2004 964,007 0.4448 $4.288 30.0%50.0%19.5%0.5%$4.601
Dec-2004 1,068,201 0.4448 $4.751 30.0%50.0%19.5%0.5%$4.455
Jan-2005 1,193,869 0.4448 $5.310 30.0%50.0%19.5%0.5%$4.805 528.699
Feb-2005 1,141,951 0.4448 $5.079 30.0%50.0%19.5%0.5%$5.105
Mar-2005 1,079,160 0.4448 $4.800 30.0%50.0%19.5%0.5%$5.015
Apr-2005 995,742 0.4448 $4.429 30.0%50.0%19.5%0.5%$4.719
PERIODIC DEBT SERVICE
Trustee
Payment Beginning Servicing and Other Interest Principal Overcollater-Total Debt Ending
Date Principal Fees(c)Expenses(d)Payment(e)Payment(f)alization(q)Service Principal
15-May-02
15-Nov-02 172,000,000 215,000 40,000 3,440,000 26,166,152 143,333 30,004,485 145,833,848
15-May-03 145,833,848 215,000 40,000 2,916,677 31,167,181 143,333 34,482,191 114,666,667
15-Nov-03 114,666,667 215,000 40,000 2,293,333 29,727,462 143,333 32,419,129 84,939,205
15-May-04 84,939,205 215,000 40,000 1,698,784 27,605,872 143,333 29,702,989 57,333,333
15-Nov-04 57,333,333 215,000 40,000 1,146,667 29,587,671 143,333 31,132,671 27,745,662
15-May-05 27,745,662 215,000 40,000 554,913 27,745,662 143,333 28,698,909 0
Please refer to the footnotes on the following page.
Exhibit No.9
Case No.IPC-E-02-2
L.Ripley,IPCo
Page 62 of 63
APPEND1X C
IDAHO POWER COMPANY
ENERGY COST FINANCING ORDER
ILLUSTRATION OF ESTIMATED ENERGY COST BOND CHARGES (a)
FOOTNOTES
(a)All figures based upon data and market conditions as of March 7,2002.
(b)Assumes transaction close of May 15,2002.ECBC billing assumed to commence May 16,2002.
(c)Assumes annual servicing fee equal to 0.25%of the original principal amount of the energy cost recovery bonds.
(d)Assumes trustee and other expenses of $40,000 per annum.
(e)Assumes interest rate of 4.00%.
(f)Assumes 1/3 of principal scheduled to be amortized in each year of transaction.
(g)Assumes 0.50%of overcollateralization collected in equal amounts on each payment date.
Exhibit No.9
Case No.IPC-E-02-2
L.Ripley,IPCo
Page 63 of 63
CERTIFICATE OF SERVICE
l HEREBY CERTIFY that on this 15th day of April,2002,I served a true
and correct copy of the above and foregoing SUBMISSION OF PROPOSED ORDER
upon the following named parties by the method indicated below,and addressed to thefollowing:
Lisa D.Nordstrom _x__Hand Delivered
Deputy Attorney General U.S.Mail
Idaho Public Utilities Commission OvernightMail
472 W.Washington Street FAX
P.O.Box 83720
Boise,Idaho 83720-0074
R.Scott Pasley Hand Delivered
Assistant General Counsel x_U.S.Mail
J.R.Simplot Company OvernightMail
999 Main Street FAX
P.O.Box 27
Boise,Idaho 83702
Peter J.Richardson Hand Delivered
Richardson &O'Leary,PLLC U.S.Mail
99 East State Street,Suite 200 OvernightMail
P.O.Box 1849 FAX
Eagle,Idaho 83616
William M.Eddie Hand Delivered
Land and Water Fund of the Rockies x U.S.Mail
P.O.Box 1612 OvernightMail
Boise,Idaho 83701 FAX
LAR Ÿ 6.R LEY
CERTIFICATE OF SERVICE