20041101Decision Memo.pdf.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:TERRI CARLOCK
DATE:OCTOBER 29, 2004
RE:IDAHO POWER COMPANY'S REQUEST TO ISSUE AND SELL UP TO
$300 MILLION SHELF AUTHORITY FOR FIRST MORTGAGE BONDS
AND DEBT SECURITIES CASE NO. IPC-04-22.
On October 7, 2004, Idaho Power Company filed an Application requesting authority to
issue and sell from time to time (a) up to $300 000 000 aggregate principal amount of one or
more series of First Mortgage Bonds, which may be designated as secured medium-term notes
(b) up to $300 000 000 aggregate principal amount of one or more series of unsecured debt
securities. The total outstanding combined principal amount of the Bonds and the principal
amount of the Debt Securities to be issued and sold shall not exceed $300 000 000.
Idaho Power will file a registration statement for the Bonds and Debt Securities with the
Securities and Exchange Commission pursuant to the shelf registration provisions of Rule 415 of
the Securities Act of 1933 , as amended. This will enable Idaho Power to take advantage of
attractive market conditions efficiently and rapidly. Under the shelf registration, Idaho Power
will be able to issue the Bonds and/or Debt Securities at different times without the necessity of
filing a new registration statement. If approved, Idaho Power requests that the shelf registration
be effective for two years from the date of the order approving the registration.
The Bonds will be issued pursuant to one or more supplemental indentures to the
Mortgage and will be secured equally with the other First Mortgage Bonds of Idaho Power.
Interest rate hedging arrangements with respect to the Bonds, may be entered by Idaho Power
including treasury interest rate locks, treasury interest rate caps and/or treasury interest rate
collars.
DECISION MEMORANDUM - 1 -OCTOBER 29, 2004
The Bonds and/or Debt Securities may be sold by public sale or private placement
directly by Idaho Power or through agents designated from time to time or through underwriters
or dealers. The type and terms of issuance will be determined at the time of issuance. Any
required Prospectuses will be filed prior to issuance. If any agents or any underwriters are
involved in the sale of the Bonds and/or Debt Securities, the names of such agents or
underwriters, the initial price to the public (if applicable), any applicable commissions or
discounts, and the net proceeds to the Applicant will be filed by the Applicant with the
Commission. If the Bonds are designated as medium-term notes and sold to an agent or agents
as principal, the names of the agents, the price paid by the agents, any applicable commission or
discount paid by the Applicant to the agents and the net proceeds to the Applicant will be filed
with the Commission. Idaho Power will file by letter seven days or as soon as possible prior to
issuance the terms of issuance. All final documents will also be filed.
Net proceeds from the sale of the Bonds and/or Debt Securities will be used for the
acquisition of property; the construction, completion, extension or improvement of its facilities;
the improvement or maintenance of its service; the discharge or lawful refunding of its
obligations; and for general corporate purposes. To the extent that the proceeds from the sale of
the Bonds or Debt Securities are not immediately so used, they will be temporarily invested in
short-term discounted or interest-bearing obligations.
The capital structure for Idaho Power Company as of June 30, 2004 was 51.7% debt
9% preferred stock and 45.4% common equity. The combination of issuance with a shelf
registration is unknown. However, if the full $300 million were issued as debt immediately, the
pro-forma capital structure would be 58.6% debt, 2.5% preferred stock and 38.9% common
equity.
STAFF RECOMMENDATION
Staff recommends approval of the $300 million shelf registration for two years.
COMMISSION DECISION
Does the Commission approve the $300 million shelf registration?
Should the approval be for the requested two-year period?
TC\ipce04.22ShelDOOM.DMl 0.29.
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CwJock
Terri Carlock
DECISION MEMORANDUM - 2 -OCTOBER 29 , 2004