HomeMy WebLinkAbout20080111final_order_no_30487.pdfOffice of the Secretary
Service Date
January 11, 2008
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 $350,000,000 OF
APPLICANT'S FIRST MORTGAGE BONDS
AND DEBT SECURITIES
ORDER NO. 30487
CASE NO. IPC-07-
On December 14, 2007, Idaho Power Company filed an Application requesting
authority to issue and sell: (a) up to $350 000 000 aggregate principal amount of one or more
series of First Mortgage Bonds, which may be designated as secured medium-term notes; and (b)
up to $350 000 000 aggregate principal amount of one or more series of unsecured debt
securities. The total outstanding combined principal amount of the Bonds and/or Debt Securities
to be issued and sold shall not exceed $350 000 000.
THE APPLICATION
Idaho Power seeks authority to issue and sell up to $350 000 000 aggregate principal
amount of First Mortgage Bonds and/or Debt Securities. The Company requested this authority
under a "shelf registration" format. A shelf registration allows a company to take advantage of
attractive market conditions efficiently and rapidly, without having to file a new registration
statement each time it elects to issue bonds or debt securities.
The Company requests authority to issue the Bonds and Debt Securities over a two-
year period commencing on the effective date of the Commission s Order approving this
Application. The Company intends to utilize any net proceeds received from the issuance and
sale of the Bonds and/or Debt Securities in the following manner: Acquisition of property;
construction, completion, extension or improvement of facilities; improvement or maintenance
of its services; discharge or lawful refunding of its obligations; and other general purposes.
The Company intends to issue and sell any Bonds under its Indenture of Mortgage
and Deed of Trust dated as of October 1 , 1937, as supplemented and amended. The Company
states that the Bonds may also be designated as secured medium-term notes with maturity dates
ranging from 9 months to 30 years. Additionally, Idaho Power notes that it may engage in
interest rate hedging with respect to the Bonds that will be secured equally with the other First
Mortgage Bonds previously issued and sold by the Company. The Company s outstanding First
ORDER NO. 30487
Mortgage Bonds are rated A-3 by Moody s Investors Service, A by Standard & Poor s Ratings
Services, and A- by Fitch, Inc. Idaho Power will file the relevant Prospectus Supplement(s) and
Pricing Supplement(s) with the SEC and the Commission if any of the Bonds and/or secured
medium-term notes are sold publicly. The Company describes the Debt Securities it hopes to
issue and sell as unsecured obligations issued under an existing or new unsecured debt Indenture
of the Company. Idaho Power notes that it may engage in interest rate hedging with respect to
the Debt Securities. The Company will file the relevant Prospectus Supplement(s) with the SEC
and the Commission if any ofthe Debt Securities are sold publicly. The Company s outstanding
unsecured senior debt is rated Baal by Moody s Investors Service, BBB+ by Standard & Poor
Ratings Services, and BBB+ by Fitch, Inc.
The Bonds and/or Debt Securities may be sold by public sale or private placement
directly by the Company, through its designated agents or through underwriters or dealers. If
any agents or underwriters are involved in the transaction for the sale of Bonds or Debt
Securities, the names of such agents or underwriters, the initial price to the public, any applicable
commISSIOns or discounts and the net proceeds to Idaho Power will be filed with the
Commission. If the Bonds are designated as medium-term notes and sold to an agent or agents
as principal , the names pf the agents, the price paid by the agents, any applicable commission or
discount paid by the Company to the agents and the net proceeds to the Company will be filed
with the Commission. The Company will file by letter within seven (7) days, or as soon as
possible, prior to the issuance all likely terms of issuance. All final documents regarding the sale
of the Bonds and Debt Securities will also be filed with the Commission.
ST AFF REVIEW AND RECOMMENDATION
Commission Staff reviewed the Company Application and accompanYIng
documents. Staff recommended approval of the Application, noting that the Company will file a
notice of issuance and terms of debt securities and all final documents associated with such
transactions with the Commission. The Company has submitted the appropriate fees for
securities issuance under Idaho Code 9 61-905.
FINDINGS OF FACT
Idaho Power was initially incorporated under the laws of the State of Maine and
subsequently migrated its state of incorporation from Maine to the State of Idaho effective June
, 1989. The Company is qualified to do business as a foreign corporation in the States of
ORDER NO. 30487
Oregon, Nevada, Montana, and Wyoming. Idaho Power is engaged principally in the generation
purchase, transmission, distribution and sale of electric energy to residential , commercial and
industrial customers in southern Idaho and eastern Oregon.
Based upon the representations in the Application, we find that the funds obtained
through the proposed sale of the Bonds and/or Debt Securities will be used for the acquisition of
property; the construction, completion, extension or improvement of facilities; the improvement
or maintenance of its service; the discharge or lawful refunding of its obligations; and other
general corporate purposes.
CONCLUSIONS OF LAW
Idaho Power Company is an electric corporation within the definition of Idaho Code
9 61-119, and a public utility within the definition of Idaho Code 9 61-129. The Idaho Public
Utilities Commission has jurisdiction over this matter pursuant to Title 61 , Idaho Code, Chapters
1 and 9, specifically Idaho Code 99 61-119, 61-129, 61-901 , and 61-902, and IDAPA
31.01.01.141-.150.
After examining the Application and Staff s recommendations, the Commission finds
that an evidentiary hearing in this matter is not required.
The Commission further finds that the Application requesting authority to issue and
sell: (a) up to $350 000 000 aggregate principal amount of one or more series of First Mortgage
Bonds, which may be designated as secured medium-term notes; and (b) up to $350 000 000
aggregate principal amount of one or more series of unsecured debt securities, subject to certain
conditions, is for a lawful purpose, is within Idaho Power s corporate powers, and is generally
compatible with the public interest. The method of issuance is proper.
This general approval of the general purposes to which the proceeds will be put is
neither a finding of fact nor a conclusion of law that any particular program of the Company
which may be benefited by the approval of this Application has been considered or approved by
this Order, and this Order shall not be construed to that effect.
The issuance of this Order does not constitute agency determination/approval of the
type of financing or the related costs for ratemaking purposes, which determination the
Commission expressly reserves until the appropriate proceeding.
The Company has paid the appropriate fees as required by Idaho Code 9 61-905.
ORDER NO. 30487
ORDER
IT IS HEREBY ORDERED that Idaho Power Company s Application request is
granted for authority to issue and sell: (a) up to $350 000 000 aggregate principal amount of one
or more series of First Mortgage Bonds, which may be designated as secured medium-term
notes; and (b) up to $350 000 000 aggregate principal amount of one or more series of unsecured
debt securities. The total outstanding combined principal amount of Bonds and Debt Securities
to be issued and sold shall not exceed $350 000 000. The securities will be issued under the
terms and conditions and for the purposes set forth in the Application and this Order.
IT IS FURTHER ORDERED that this authorization shall remain in place for a period
of two years commencing from the effective date of this Order. The Company may request an
extension of this authorization by letter filed with the Commission prior to the expiration of the
two-year period.
IT IS FURTHER ORDERED that Idaho Power shall notify the Commission by letter
within seven (7) days, or as soon as possible if the required information is not available, before
the issuance of the Bonds and/or Debt Securities of the likely range of interest rates and other
terms for the securities.
IT IS FURTHER ORDERED that Idaho Power shall promptly file a copy of any
Prospectus Supplement showing the terms of the sale, names of the purchasers or underwriters or
agents with the Commission after the issuance of each series of Bonds. The Company will also
file with the Commission a copy of any Prospectus and Pricing Supplements it has filed with the
Securities and Exchange Commission for any Bonds designated as medium-term notes.
IT IS FURTHER ORDERED that Idaho Power shall promptly file a copy of any
Prospectus Supplement showing the terms of the sale, names of the purchasers or underwriters or
agents with the Commission after the issuance of each series of Debt Securities.
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 ofIdaho to payor guarantee
in any manner whatsoever any security authorized, issued, assumed or guaranteed under the
provisions of this Order.
IT IS FURTHER ORDERED that this authorization 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 the Commission
ORDER NO. 30487
pursuant to its jurisdiction and authority as provided by law. For ratemaking purposes, the
Commission shall reserve judgment on the reasonableness of the Company s capital costs
comparative underwriting analysis and any associated commissions and expenses incurred for
any or all security issuances. In its next rate proceeding, the Company will be required to show
that its capital cost, comparative underwriting analysis, embedded expenses, and methods of
securities marketing are just and reasonable.
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 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. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code 9 61-
626.
ORDER NO. 30487
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of January 2008.
~~
MACK A. RE ENT
1)~rJ~
RSHA H. SMITH, COMMISSIONER
ATTEST:
D. Jewell
mission Secretary
O:IPC-O7-
ORDER NO. 30487