20031231Final Order No 29404.pdf

Office of the Secretary
Service Date
December 31 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR AN
ORDER AUTHORIZING THE ISSUANCE
AND SALE OF UP TO $40,000,000 OF
COMMON STOCK
ORDER NO. 29404
CASE NO. IPC-03-
On December 4 2003 , Idaho Power Company filed an Application pursuant to Idaho
Code ~ 61-901 et seq. and Procedural Rules 141 - 150 requesting authority to issue and sell not
more than $40 000 000 of its authorized but unissued Common Stock, $2.50 par value. IDAP A
31.01.01.141-150. Having fully considered the Application and attached Exhibits, the
Commission issues this Order approving the Application as set out in greater detail below.
THE APPLICATION
Idaho Power is an electric corporation subject to the regulatory jurisdiction of the
Idaho Public Utilities Commission. The Company stated in its Application that it proposes to
issue stock to its parent and sole stockholder, IDACORP, Inc. Because Idaho Power shares are
not publicly traded but held by IDACORP, Morgan Stanley will complete an independent
evaluation to determine the number of shares and the price per share to be issued and sold.
These shares will be entitled to one vote per share and dividends as declared by Idaho Power
Board of Directors.
Idaho Power expects these shares, if authorized, to be issued yet this year or in the
first calendar quarter of 2004. The shares will be directly issued to IDACORP to avoid incurring
underwriting or selling agent fees. With the exception of attorney, accountant and similar
technical service fees, Idaho Power anticipates that no fees or commissions will be paid
connection with the issuance and sale of the common stock to IDACORP. Idaho Power further
represents that a registration statement with the Securities and Exchange Commission is not
required. The fee required by Idaho Code ~ 61-905 has been paid to this Commission.
Idaho Power maintains that the proceeds from the sale of the Common Stock will be
used for appropriate utility operations. More specifically, the Application indicates that the
proceeds will be used "for the acquisition of property; the construction, completion, extension or
improvement of (electric) facilities; the improvements or maintenance of (utility) service; the
discharge or lawful refunding of its obligations; and for general corporate purposes.
ORDER NO. 29404
Application at 2. To the extent that the proceeds from the sale of Common Stock are not
immediately used, they will be temporarily invested in short-term discounted or interest-bearing
obligations. Idaho Power claims that the equity funding from the issuance and sale of the
Common Stock to IDACORP will promote a more balanced capital structure for Idaho Power
and support Idaho Power s credit quality.
The Commission Staff recommended approval of the issuance and sale of up to
$40 000 000 of authorized but unissued Common Stock. The Staff reported that Idaho Power
capital structure and credit quality will be examined in the Company s current rate case
No. IPC-03-13. The Staff also recommended that Idaho Power be required to file all final and
completed issuance documents, including the Morgan Stanley evaluation and any other stock
evaluations associated with the issuance.
FINDINGS OF FACT
The Commission has jurisdiction over this matter pursuant to Title 61 , Idaho Code
Chapters 1 and 9, and specifically Idaho Code ~~ 61-119, 61-129, 61-901 , and 61-902.
Idaho Power was incorporated on May 6, 1915 and migrated its state of incorporation
to the State of Idaho on June 30 1989, and duly qualified to do business in the State of Idaho.
Idaho Power s principal place of business is located in Boise, Idaho.
We find it reasonable for Idaho Power to issue and sell up to $40 000 000 of
authorized but unissued Common Stock to its parent and sole stockholder IDACORP, Inc. Idaho
Power expects that the Common Stock will be issued and sold to IDACORP during the fourth
quarter of 2003 or the first quarter of 2004. The Common Stock will be entitled to such
dividends, if any, as may be legally declared by Idaho Power s Board of Directors from time to
time. The Common Stock will be entitled to one vote per share.
We further find it reasonable for Idaho Power to issue and sell the Common Stock
directly to IDACORP without underwriters or selling agents. No fees or commissions (other
than attorney, accountant and similar technical services) shall be paid by Idaho Power in
connection with the issuance and sale of the Common Stock to IDACORP. We recognize that
Idaho Power represents it is not required to file a registration statement for the Common Stock
with the Securities and Exchange Commission.
Based upon the representations contained in the Application, we find that the sale of
the Common Stock will be used by Idaho Power for the acquisition of property; the construction
ORDER NO. 29404
completion, extension or improvement of facilities; the improvement or maintenance of utility
service; the discharge or lawful refunding of its obligations; and for general corporation
purposes.To the extent that the proceeds from the sale of the Common Stock are not
immediately used, we further find it reasonable that they be temporarily invested in short-term
discounted or interest-bearing obligations.
Idaho Power claims the equity funding from the issuance and sale of the Common
Stock to IDACORP will promote a more balanced Idaho Power capital structure and support
Idaho Power s credit quality. These representations will likely be an issue in the rate case
IPC-03-13. Therefore, we decline to discuss the merits ofthese issues.
CONCLUSIONS OF LAW
Idaho Power is incorporated under the laws of the State of Idaho and is duly
authorized to conduct business in Idaho. The Commission has jurisdiction over this Application.
The proposed issuance and sale of the Common Stock are for a lawful purpose and
are within Idaho Power s corporate powers. The proposed transaction is in the public interest
and a formal hearing on this matter would serve no public purpose.
ORDER
IT IS HEREBY ORDERED that the Application of Idaho Power Company for
authority to issue and sell not more than $40 000 000 of its Common Stock to IDACORP under
the terms and conditions proposed is approved, for the purposes specified in said Application.
IT IS FURTHER ORDERED that Idaho Power file copies of all final and complete
issuance documents. The Company shall also file a copy of the Morgan Stanley evaluation
report and any other issuance related evaluations.
IT IS FURTHER ORDERED that as promptly as possible after the completion ofthis
transaction, Idaho Power will file with the Commission a statement showing that the transaction
has been carried out in accordance with the terms and conditions set forth herein. Idaho Power
shall also file all docUments supporting the number of shares issued and share price. No
additional authorization is required to carry out this transaction, and no supplemental Order will
be issued.
IT IS FURTHER ORDERED that nothing in this Order or any act or deed performed
in connection with this Order shall be construed to obligate the State of Idaho to payor guarantee
ORDER NO. 29404
in any manner whatsoever any security authorized, issued, assumed or guaranteed under the
provisions of this Order.
IT IS FURTHER ORDERED that this authorization for Idaho Power to issue and sell
not more than $40 000 000 of its Common Stock to IDACORP is without prejudice to the
regulatory authority of this Commission with respect to rates, service, accounts, evaluation
estimates or determination of costs or any other matter which may come before this Commission
pursuant to its jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that the issuance of this Order does not constitute
acceptance of Idaho Power Company s exhibits or other material accompanying this Application
for any purpose other than the issuance of this Order.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues
decided by this Order) may petition for reconsideration within twenty-one (21) days of the
service date of this Order with regard to any matter decided in this Order and in this Case No.
IPC-03-18. Within seven (7) days after any person has petitioned for reconsideration, any
other person may cross-petition for reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 29404
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 30
++--
day of December 2003.
MARSHA . SMITH, COMMISSIONER
ATTEST:
~il
Commission Secretary
bls/IPCEO318 tc db
ORDER NO. 29404