20160328Application.pdf

SEHM"
An IOACORP CompanY
RECEIVED
?$:f) t'Iilfi ?8 Att 9: 05
'r.1ii,+lH*'o*I !"-j ,.f i
Patrich A. Haningnn
Corporate Secretary
Ms. Jean D. Jewell
Secretary
Idaho Public Utilities Commission
Statehouse
Boise,Idaho 83720
March 25,2016
Re: In the Matter of the Application of Idaho Power Company for an
Order Authorizing the Issuance and Sale of up to $500,000,000 of
Applicant's First Mortgage Bonds and Debt Securities
Case No. IPC-E-16 -05
Dear Ms. Jewell:
Enclosed herewith for filing with the Commission are an original and four (4) copies of
the above-referenced Application, including a Proposed Order for the Commission's
consideration. An electronic copy of the proposed order will also be e-mailed to you. Idaho
Power has also enclosed a check for $1,000 in payment of the securities application fee to the
Commission for this application.
If you have any questions regarding this application, please contact me at 388-2878.
c:Terri Carlock
P.O. Box 70 Boke,ID 83707
Telephone [phone], Fax [phone]
iqECEIVED
BEFORE THE IDAHO PUBLIG UrlLlrlEs coMMISfl$]1lf,R eg All 9: 0E
l: '-. "r llfl: !fa| ., lj.r'Lii*l\/
i-i I .,r t-'c'rJit,{lssloN
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR AN
oRDER AUTHORIZTNG THE TSSUANCE AND )
SALE OF UP TO $5OO,OOO,OOO OF APPLICANT'S )
FIRST MORTGAGE BONDS AND DEBT )
CASE NO. !PC-E -16 - ou
APPLICATION
)
)
SECURITIES
ldaho Power Company (the "Applicant") hereby applies for an Order from the
ldaho Public Utilities Commission (the "Commission") under Title 61, ldaho Code,
Chapters 1 and 9, and Chapters 141 through 150 of the Commission's Rules of Practice
and Procedure ("Rules"), for authority to issue and sell from time to time (a) up to
$500,000,000 aggregate principal amount of one or more series of Applicant's first
mortgage bonds, which may be designated as secured medium-term notes (the
"Bonds") and (b) up to $500,000,000 aggregate principal amount of one or more series
of unsecured debt securities of the Applicant (the "Debt Securities"); provided, that the
total principal amount of the Bonds and Debt Securities to be issued and sold hereunder
shall not exceed $500,000,000. The Bonds and Debt Securities will be issued publicly
pursuant to a shelf registration with the Securities and Exchange Commission (the
'SEC") under the Securitles Act of 1933, as amended (the "Act"), or privately pursuant
to an exemption from registration under the Act, as set forth herein. Applicant requests
authority to issue the Bonds and Debt Securities through May 31 ,2019, which would
align with the anticipated three-year life of the Shelf Registration.
{00187780.RTF; 1}
APPLICATION. 1
(a) The Applicant
The Applicant is an electric public utility, incorporated under the laws of the State
of ldaho, engaged principally in the generation, purchase, transmission, distribution and
sale of electric energy in an approximately 24,000 square-mile area in southern ldaho
and eastern Oregon. The principal executive offices of the Applicant are located at
1221 W. ldaho Street, P.O. Box 70, Boise, Idaho 83707-0070; its telephone number is
[phone].
(b) Description of Securities
The Applicant will register the Bonds and Debt Securities with the SEC pursuant
to Rule 415 of the Act (the "Shelf Registration"). The Shelf Registration wil! allow the
Applicant to issue and sell one or more series of the Bonds and Debt Securities on a
continuous or delayed basis if authorized by the Commission and the other state
regulatory commissions having jurisdiction over the Applicant's securities. This will
enable the Applicant to take advantage of attractive market conditions efficiently and
rapidly. Under the Shelf Registration, the Applicant will be able to issue the Bonds and
Debt Securities at different times without the necessity of filing a new registration
statement.
The Shelf Registration will be filed jointly by the Applicant and IDACORP, !nc.,
the parent company of the Applicant, with the SEC. This joint filing is intended to
minimize the costs to the Applicant of establishing and maintaining the Shelf
Registration, and of issuing securities under the Shelf Registration, while maximizing
the Applicant's flexibility for issuing the Bonds and Debt Securities under the Shelf
{00187780.RTF; 1}
APPLICATION - 2
Registration. A copy of the Shelf Registration will be filed with the Commission as
Attachment ! to this Application.
BONDS
The Applicant proposes to issue and sell, from time to time, up to $500,000,000
aggregate principal amount of one or more series of the Bonds pursuant to the
lndenture of Mortgage and Deed of Trust, dated as of October 1, 1937 between the
Applicant and Deutsche Bank Trust Company Americas (formerly Bankers Trust
Company) and Stanley Burg, as trustees (or any successor trustees), as supplemented
and amended, and as to be further supplemented by one or more supplemental
indentures relating to the Bonds (the "Mortgage"). The Applicant may enter into interest
rate hedging arrangements with respect to the Bonds, including treasury interest rate
locks, treasury interest rate caps, treasury interest rate collars, treasury options, fonruard
starting interest rate swaps, and/or swaptions. The Bonds will be secured equally with
the other first mortgage bonds of the Applicant.
After the terms and conditions of the issuance and sale of the Bonds have been
determined, Applicant will file a Prospectus Supplement(s) with the SEC if the Bonds
are sold publicly, setting forth the series designation, aggregate principal amount of the
issue, purchase price or prices, issuance date or dates, maturity or maturities, interest
rate or rates (which may be fixed or variable) and/or the method of determination of
such rate or rates, time of payment of interest, whether all or a portion of the Bonds wil!
be discounted, whether all or a portion of the Bonds will be issued in global form,
whether interest rate hedging arrangements will apply to the Bonds, repayment terms,
redemption terms, if any, and any other special terms of the Bonds, which terms may be
(00187780.RTF; 1)
APPL]CATION - 3
different for each issuance of the Bonds. The Applicant will also file a copy of the
Prospectus Supplement with the Commission.
The Bonds may be designated as secured medium{erm notes. The medium-
term notes could have maturities from nine months to thirty years. Prior to issuing
medium-term notes publicly, the Applicant will file a Prospectus Supplement with the
SEC setting forth the general terms and conditions of the medium-term notes to be
issued. Upon each issuance of the medium-term notes pursuant to the Prospectus
Supplement, the Applicant will file a Pricing Supplement with the SEC providing a
specific description of the terms and conditions of each issuance of the medium-term
notes, as described above. Applicant will also file a copy of the Prospectus Supplement
and Pricing Supplements with the Commission.
Applicant's outstanding First Mortgage Bonds are currently rated Al by Moody's
lnvestors Service and A- by Standard & Poo/s Ratings Services. lf the Bonds are sold
publicly, Applicant cannot predict whether they will be similarly rated. lf the Bonds are
sold privately, it is unlikely that the Bonds will be rated.
DEBT SECURITIES
The Applicant proposes to issue and sell, from time to time, up to $500,000,000
in aggregate principal amount of one or more series of Debt Securities. The Debt
Securities will be unsecured obligations of the Applicant and will be issued under an
existing or new unsecured debt indenture of the Applicant. A form of any new indenture
will be included as an exhibit to the Shelf Registration, and will be filed with the
Commission as stated above. The Applicant will supplement the indenture in the future
to further specify the terms and conditions of each series of Debt Securities. Such
(00187780.RTF; 1)
APPLICATION - 4
amendments will be filed with the SEC and will also be filed with the Commission. The
Applicant may enter into interest rate hedging arrangements with respect to the Debt
Securities, including treasury interest rate locks, treasury interest rate caps, treasury
interest rate collars, treasury options, fonryard starting interest rate swaps, and/or
swaptions.
After the terms and conditions of the issuance and sale of the Debt Securities
have been determined, the Applicant will file a Prospectus Supplement(s) with the SEC
if the Debt Securities are sold publicly, setting forth the series designation, aggregate
principal amount of the issue, purchase price or prices, issuance date or dates, maturity
or maturities, interest rate or rates (which may be fixed or variable) and/or the method of
determination of such rate or rates, time of payment of interest, whether all or a portion
of the Debt Securities will be discounted, whether all or a portion of the Debt Securities
wi!! be issued in global form, whether the interest rate hedging arrangements will apply
to the Debt Securities, repayment terms, redemption terms, if any, and any other special
terms of the Debt Securities, which terms may be different for each issuance of the Debt
Securities. Applicant will also file a copy of the Prospectus Supplement with the
Commission.
Applicant's outstanding unsecured senior debt is currently rated A3 by Moody's
investors Service and BBB by Standard & Poor's Ratings Services. lf the Debt
Securities are sold publicly, Applicant cannot predict whether they will be similarly rated.
lf the Debt Securities are sold privately, it is unlikely that the Debt Securities will be
rated.
{00187780.RTF; 1}
APPLICATION - 5
(c) Method of lssuance
The Bonds and Debt Securities may be sold by public sale or private placement,
directly by the Applicant or through agents designated from time to time or through
undenruriters or dealerc. lf any agents of the Applicant or any underwriters are involved
in the sale of the 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 the Applicant will be filed with the Commission. lf the Bonds are
designated as medium-term notes and sold to an agent or agents as principal, the name
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.
Agents and underwriters may be entitled under agreements entered into with the
Applicant to indemnification by the Applicant against certain civil liabilities, including
liabilities under the Act.
(d) Purpose of lssuance
The net proceeds to be received by the Applicant 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 lav'rful refunding of its obligations; and for general
corporate purposes. To the extent that the proceeds from the sale of the Bonds and
Debt Securities are not immediately so used, they will be temporarily invested in short-
term discounted or interest-bearing obligations.
{00187780.RTF; 1}
APPLICATION . 6
(e) Proprietv of lssue
Applicant believes and alleges the facts set forth herein disclose that the
proposed issuance and sale of Bonds and Debt Securities are for a lawful object within
the corporate purposes of Applicant and compatible with the public interest, are
necessary or appropriate for, or consistent with, the proper performance by Applicant of
service as a public utility and will not impair its ability to perform that service, and are
reasonably necessary or appropriate for such purposes.
The Applicant currently has shelf registration authority in place from the
Commission under Order No. 33264 in Case No. IPC-E-15-04 ("Existing Orded'). The
Company is authorized to issue up to $500,000,000 aggregate principal amount of
bonds and debt securities under the Existing Order, of which $130,000,000 remains
authorized for issuance. The Applicant is requesting that the Commission's
authorization under the Existing Order remain in effect for a period of twenty-one (21)
days following the date of the Commission's order hereunder (reflecting the petition for
reconsideration period for the Commission's order hereunder pursuant to Section
331.01 of the Rules), at which point the Commission's authorization under the Existing
Order would automatically expire if no petitions for reconsideration are received. Thus
for the twenty-one (21) day period following the date of the Commission's order
hereunder, the Applicant would in effect have authorization from the Commission to
issue up to $630,000,000 of bonds and debt securities: $130,000,000 under the terms
of the Existing Order and $500,000,000 under the terms of the Commission's order
hereunder.
{00187780.RTF; 1}
APPLICATION - 7
(f) Financial Statements: Resolutions
Applicant has filed herewith as Attachment ll its financial statements dated as of
December 31, 2015 consisting of its (a) Actual and Pro Forma Balance Sheet, (b)
Statement of Capital Stock and Funded Debt, (c) Commitments and Contingent
Liabilities, (d) Statement of Retained Earnings and (e) Statement of lncome.
A certified copy of the resolutions of Applicant's Directors authorizing the
transaction with respect to this Application wil! be filed with Commission as Attachment
ll! to this Application on or about April 15,2016.
(g) Proposed Order
Applicant has filed as Attachment lV a Proposed Order for adoption by the
Commission if this Application is granted.
(h) Notice of Application
Notice of this Application will be published in those newspapers in the Applicant's
service territory listed in Section 24.19 of the Commission's Rules within seven (7) days
after the date hereof.
PRAYER
WHEREFORE, Applicant respectfully requests that the ldaho Public Utilities
Commission issue its Order herein authorizing Applicant to issue and sell for the
purposes herein set forth up to $500,000,000 aggregate principal amount of one or
more series of its Bonds and up to $500,000,000 aggregate principal amount of its Debt
Securities; provided, that the total principa! amount of the Bonds and Debt Securities to
be issued and sold shall not exceed $500,000,000.
{00187780.RTF; 1}
APPLICATION . 8
DATED at Boise, ldaho tfrisd,jhay of March, 2016.
IDAHO POWER COMPANY
Sr. Vice President, Chief Financial
Officer and Treasurer
By:
(coRPoRATE SEAL)
1221 W.ldaho Street
P.O. Box 70
Boise, ldaho 83707-0070
{00187780.RTF; 1}
APPLICATION .9
Patrick A.
Secretary
ATTAGHMENT ll(a)
Actual and Pro Forma Balance Sheet
IDAHO POWER COMPANY
CONDENSED UNCONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31,2015
ASSETS
Electric Plant :
ln service (at original cost)..............
Accumulated provision for depreciation....................
ln service - Net..............
Construction work in progress........
Held for future use................
Electric plant - Net.....
lnvestments and Other Property:
Nonutility property.........
tnvestment in subsidiary ;;;;i;; : :.:::: : : : : : : : : : : : : : : :...
Other...........
Total investments and other property
Current Assets:
Cash and cash equiva|ents.................
Receivables:
Customer.......
Other.............
Notes recievable from related parties...........
Accrued unbilled revenues.......
Materials and supplies (at average cost)..............
Fuel stock (at average cost)..............
Prepayments.
Taxes receivab|e.................
Regulatory assets ...........
Other.............
Deferred Debits:
American Falls and Milner water rights.............
Company owned life insurance......
Regulatory assets...........
Other.............
Total deferred debits............
Actual Adjustments
After
Adjustments
$ 5,485,463,707 $$ 5,485,463,707
(1 ,913,926,81 6) (1 ,91 3,926,816)3,571,536,891 3,571,536,891
396,931,372
1,555,480
84,137,401
24,552,059
1,555,480
84,137,401
24,552,059
110,244,940 110.244.940
110,755,983
73,505,088
8,520,381
1,156,202
65,804,608
56,923,547
61,818,257
17,845,551
5,431,678
49,215,398
500,000,000 610,755,983
73,505,088
8,520,381
1,156,202
65,804,608
56,923,547
61,818,257
17,845,551
5,431,678
49,215,398
287,792 287.792
Total current assets........... 451,264,485 500,000,000 951,264,485
1't,592,186
48,566,233
1,305,210,249
56,529,654
11,592,186
48,566,233
1,305,210,249
56,529,654
421,898,322 1,421.898,322
5,958,966,441 $ 500,000,000 $6,458,966,441
396,931,372
7.090.431 7.090.431
Common Shares
Authorized
IDAHO POWER COMPANY
CONDENSED UNCONSOLIDATED BALANCE SHEET
AS OF December 31,2015
CAPITALIZATION AND LIABILITIES
Common Shares
Outstandinq Actual Adjustments
After
Adjustments
Equity Capital:50,000,000 39,150,812
Common stock..............
Premium on capital stock.............
Capital stock expense
Retained earnings........
Accummulated other comprehensive income.......
Total equity capita|...........
Long-Term Debt:
Accpunts payable
Notes and ac@unts payable to related parties...........
lncome taxes accrued
lnterest accrued.........
Accrued compensation
Current regulatory liabilities........
Advances from customers...................
Other.............
Total current liabilities........
Deferred Credits:
Regulatory liabilities associated with accumulated deferred
investment tax credits
Deferred income taxes.............
Regulatory liabilities........
Pension and other postretirement benefits.......
Other.............
Total deferred credits...........
Tota|..............5,958,966,441 $500,000,000 $
97,877,030 $
712,257,435
(2,096,92s)
1,127,425,685
(21,275,735)
97,877,030
712,257,435
(2,096,925)
1,127,425,685
(21.275.7351
1,914,187,490 1,914,187,490
First mortgage bonds ........... .. 1,555,000,000 500,000,000 2,055,000,000
Pollution control revenue bonds 170,460,000 170,460,000
American Falls bond and Milner note guarantees ................. 20,948,636 20,948,636
Unamortized debt issuance costs and discounts on long-term debt......... (20,998,222) (20,998,222')
Total long-term debt 1,725,410,414 500,000,000 2,225,410.414
Current Liabilities:
Long-term debt due within one year...............1,063,637 1,063,637
Notes payable
94,969,604
1,058,872
10,624,096
22,291,985
42,835,077
2,216,962
31 ,213,693
15,505,900
94,969,604
'1,058,872
10,624,096
22,291,985
42,835,077
2,216,962
31 ,213,693
15,505,900
221,779,826 221.779.826
79,654,930
1,242,625,248
336,626,663
394,030,173
44,651,697
79,654,930
1,242,625,248
336,626,663
394,030,173
44,651,697
2.097.588.711 2.097.588.711
6,458,966.441
IDAHO POWER COMPANY
STATEMENT OF ADJUSTING JOURNAL ENTRIES
As of December 31,2015
Giving Effect to the Proposed issuance of
First Mortgage Bonds
Entrv No. 1
Cash.500,000,000
First Mortgage Bonds
To record the proposed issuance of First Mortgage
and the receipt of cash.
ATTAGHMENT II(bT
Statement of Gapital Stock and Funded Debt
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT
IDAHO POWER COMPANY
December 31,2015
The following statement as to each class of the capital stock of applicant is as of December 31, 2015, the
date of the balance sheet submitted with this application:
Common Stock
(1) Description - Common Stock, $2.50 par value; 1 vote per share
(2) Amount authorized - 50,000,000 shares ($125,000,000 par value)
(3) Amount outstanding - 39,150,812 shares
(4) Amount held as reacquired securities - None
(5) Amount pledged by applicant - None
(6) Amount owned by affiliated corporations - All
(7) Amount held in any fund - None
Applicant's Common Stock is held by IDACORP, lnc., the holding company of
ldaho Power Company. IDACORP, lnc.'s Common Stock is registered (Pursuant
to Section 12(b) of the Securities Exchange Act of 1934) and is listed on the New
York Stock Exchange.
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT (Continued)
IDAHO POWER COMPANY
December 31,2015
The following statement as to funded debt of applicant is as of December 31,2015, the date of the balance
sheet submitted with this application.
First Mortgage Bonds
(1)
Description
FIRST MORTGAGE BONDS:
6.15 % Series due 2019, dated as of March 30, 2009, due April 1,2019
4.5O o/o Series due 2020, dated as of Nov 20, 2009, due March 30, 2020
3.4O % Series due 2020, dated as of Aug 30, 2010, due Nov 1 ,2020
2.95 % Series due 2022, dated as of April 13, 2012, due April 1 , 2022
2.50 o/o Series due 2023, dated as of April 8, 2013, due April 1 ,2023
6.00 % Series due 2032, dated as of Nov 15, 2OO2, due Nov 15, 2032
5.50 % Series due 2033, dated as of May 13, 2003, due April 1,2033
5.50 % Series due 2034, dated as of March 26,2004, due March 15,2OU
5.875o/o Series due 2034, dated as of August '16,2004, due August 15, 2034
5.30 % Series due 2035, dated as of August 23,2005, due August 15, 2035
6.30 % Series due 2037, dated as of June 22, 2007 , due June 15,2037
6.25 o/o Series due 2037, dated as of October 18, 2OO7 , due October 15, 2O3i
4.85 o/o Series due 2040, dated as of Aug 30, 2010, due Aug 15, 2040
4.30 o/o Series due 2042, dated as of April 13, 2012, due April 1, 2042
4.00 o/o Series due 2043, dated as of April 8, 2013, due April 1, 2043
3.65 % Series due 2045, dated as of March 6, 2015, due March 1,2045
(3)
Amount
Outstanding
100,000,000
130,000,000
100,000,000
75,000,000
75,000,000
100,000,000
70,000,000
50,000,000
55,000,000
60,000,000
140,000,000
100,000,000
100,000,000
75,000,000
75,000,000
250.000.000
1-555JDOO00
(2) Amount authorized - Limited within the maximum of $2,000,000,000 (or such
other maximum amount as may be fixed by supplemental indenture) and by
property, earnings, and other provisions of the Mortgage.
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affiliated corporations - None(7) Amount of sinking or other funds - None
For a full statement of the terms and provisions relating to the respective Series and amounts of
applicant's outstanding First Mortgage Bonds above referred to, reference is made to the Mortgage and
Deed of Trust dated as of October 1, 1937, and First to Forty-Seventh Supplemental lndentures thereto,
by ldaho Power Company to Deutsche Bank Trust Company Americas (formerly known as Bankers Trust
Company) and R. G. Page (Stanley Burg, successor individual trustee), Trustees, presently on file with
the Commission, under which said bonds were issued.
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT (Continued)
IDAHO POWER COMPANY
December 31,2015
Pollution Control Revenue Bonds
(A) Variable Rate Series 2000 due2027:
(1) Description - Pollution Control Revenue Bonds, Variable Rate Series due 2027, Port
of Morrow, Oregon, dated as of May 17,2000, due February 1 ,2027.(2) Amount authorized - $4,360,000
(3) Amount outstanding - $4,360,000
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affiliated corporations - None
(7) Amount in sinking or other funds - None
(B) 5.15% Series 2003due2024:
(1) Description - Pollution Control Revenue Refunding Bonds, 5.15 Series 2003 due
2024, County of Humboldt, Nevada, dated as of August 20, 2009 due December 1,
2024 (secured by First Mortgage Bonds)
(2) Amount authorized - $49,800,000
(3) Amount outstanding - $49,800,000
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affiliated corporations - None
(7) Amount in sinking or other funds - None
(C) 5.250/" Series 2006 due 2026:
(1) Description - Pollution Control Revenue Bonds, 5.25o/o Series 2006 due 2026, County
of Sweetwater, Wyoming, dated as of August 20, 2009, due July 15,2026
(2) Amount authorized - $116,300,000
(3) Amount outstanding - $116,300,000
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affiliated corporations - None
(7) Amount in sinking or other funds - None
For a full statement of the terms and provisions relating to the outstanding Pollution Control Revenue
Bonds above referred to, reference is made to (A) copies of Trust lndenture by Port of Morrow, Oregon,
to the Bank One Trust Company, N. A., Trustee, and Loan Agreement between Port of Morrow, Oregon
and ldaho Power Company, both dated May 17,2000, under which the Variable Rate Series 2000 bonds
were issued, (B); Conformed Trust lndenture between Humboldt County, Nevada and Union Bank N.A.,
Trustee dated October 1, 2003 as amended and supplemented by a First Supplemental Trust lndenture,
dated Auguslz0,2OO9, and Loan Agreement between ldaho Power Company and Humboldt County,
Nevada dated October 1, 2003 under which the 5.15% Series 2003 bonds were reoffered, and (C)
Conformed Trust lndenture between Sweetwater County, Wyoming, and Union Bank , N.A., Trustee, as
amended and supplemented by a First Supplemental Trust lndenture dated August 20, 2009, and Loan
Agreements between ldaho Power Company and Sweetwater County, Wyoming, dated October 1, 2006
under which the 5.25% Series 2006 bonds were reoffered
ATTAGHMENT ll(cl
Gommitments and Contingent Liabilities
CONTINGENT LIABILITI ES
IDAHO POWER COMPANY
December 31,2015
GUARANTEES
Through a self-bonding mechanism, ldaho Power guarantees its portion of reclamation activities
and obligations at BCC, of which IERCo owns a one-third interest. This guarantee, which is
renewed annually with the Wyoming Department of Environmental Quality, was $73 million at
December 31,2015, representing !ERCo's one-third share of BCC's total reclamation obligation.
BCC has a reclamation trust fund set aside specifically for the purpose of paying these reclamation
costs. At December 31, 2015, the value of the reclamation trust fund was $70 million. During
2015, the reclamation trust fund distributed approximately $6 million for reclamation activity costs
associated with the BCC surface mine. BCC periodically assesses the adequacy of the
reclamation trust fund and its estimate of future reclamation costs. To ensure that the reclamation
trust fund maintains adequate reserves, BCC has the ability to add a per-ton surcharge to coal
sales, all of which are made to the Jim Bridger plant. Starting in 2010, BCC began applying a
nominal surcharge to coal sales in order to maintain adequate reserves in the reclamation trust
fund. Because of the existence of the fund and the ability to apply a per-ton surcharge, the
estimated fair value of this guarantee is minimal.
ldaho Power enters into financial agreements and power purchase and sale agreements that
include indemnification provisions relating to various forms of claims or liabilities that may arise
from the transactions contemplated by these agreements. Generally, a maximum obligation is not
explicitly stated in the indemnification provisions and, therefore, the overall maximum amount of the
obligation under such indemnification provisions cannot be reasonably estimated. ldaho Power
periodically evaluates the likelihood of incurring costs under such indemnities based on their
historical experience and the evaluation of the specific indemnities. As of December 31,2015,
management believes the likelihood is remote that ldaho Power would be required to perform
under such indemnification provisions or otherwise incur any significant losses with respect to such
indemnification obligations. ldaho Power has not recorded any liability on their respective
consolidated balance sheets with respect to these indemnification obligations.
CONTINGENC!ES
ldaho Power has in the past and expect in the future to become involved in various claims,
controversies, disputes, and other contingent matters. Some of these claims, controversies,
disputes, and other contingent matters involve litigation and regulatory or other contested
proceedings. The ultimate resolution and outcome of litigation and regulatory proceedings is
inherently difficult to determine, particularly where (a) the remedies or penalties sought are
indeterminate, (b) the proceedings are in the early stages or the substantive issues have not been
well developed, or (c) the matters involve complex or novel legal theories or a large number of
parties. ln accordance with applicable accounting guidance, ldaho Power establishes an accrual
for legal proceedings when those matters proceed to a stage where they present loss
contingencies that are both probable and reasonably estimable. !n such cases, there may be a
possible exposure to loss in excess of any amounts accrued. ldaho Power monitors those matters
for developments that could affect the likelihood of a loss and the accrued amount, if any, and
adjust the amount as appropriate. lf the loss contingency at issue is not both probable and
reasonably estimable, ldaho Power does not establish an accrual and the matter will continue to be
monitored for any developments that would make the loss contingency both probable and
reasonably estimable. As of the date of this report ldaho Power's accruals for loss contingencies
are not material to its financial statements as a whole; however, future accruals could be material in
CONTINGENT LIABILITIES (continued)
IDAHO POWER COMPANY
December 31,2015
a given period. ldaho Power's determination is based on currently available information, and
estimates presented in financial statements and other financial disclosures involve significant
judgment and may be subject to significant uncertainty. For matters that affect ldaho Power's
operations, ldaho Power intends to seek, to the extent permissible and appropriate, recovery
through the ratemaking process of costs incurred.
Western Energy Proceedings
High prices for electricity, energy shortages, and blackouts in California and in the western
wholesale markets during 2000 and 2001 caused numerous purchasers of electricity in those
markets to initiate proceedings to consider requiring refunds and other forms of disgorgement from
energy sellers. Some of these proceedings remain pending before the FERC or are on appeal to
the United States Court of Appeals for the Ninth Circuit, and thus there remains some uncertainty
about the ultimate outcome of the proceedings. ldaho Power and IESCo (as successor to
IDACORP Energy L.P.) believe that the current state of the FERC's orders, if maintained, and the
settlement releases they have obtained, will restrict potential claims that might result from the
pending proceedings. As a result, ldaho Power predicts that these matters will not have a material
adverse effect on their respective results of operations or financial condition. However, if
unanticipated orders are issued by the FERC or by the Ninth Circuit Court of Appeals or other
courts, exposure to indirect claims in the proceedings could exist. These indirect claims would
consist of so-called "ripple claims," which involve potential claims for refunds in the Pacific
Northwest markets from an upstream seller of power based on a finding that its downstream buyer
was liable for refunds as a seller of power during the relevant period. Given the speculative nature
of ripple claims and in light of ldaho Power's and IESCo participating in the market as both a buyer
and seller of energy, ldaho Power and IESCo are unable to estimate the possible loss or range of
loss that could result from the proceedings and have no amount accrued relating to the
proceedings. To the extent the availability of any ripple claims materializes, ldaho Power and
IESCo will continue to vigorously defend their positions in the proceedings.
Hoku Corporation Bankruptcy Claims
On June 26,2015, the trustee in the Hoku Corporation chapter 7 bankruptcy case (ln Re: Hoku
Corporation, United States Bankruptcy Court, District of ldaho, Case No. 13-40838 JDP) filed a
complaint against ldaho Power, alleging that specified payments made by Hoku Corporation to
ldaho Power in the six years prior to Hoku Corporation's bankruptcy filing in July 2013 should be
recoverable by the trustee as constructive fraudulent transfers. Hoku Corporation was the parent
entity of Hoku Materials, lnc., with which ldaho Power had an electric service agreement approved
by the IPUC in March 2009. Under the electric service agreement, ldaho Power agreed to provide
electric service to a polysilicon production facility under construction by Hoku Materials in the state
of ldaho. ldaho Power also had agreements with Hoku Materials pertaining to the design and
construction of apparatus for the provision of electric service to the polysilicon plant. The trustee's
complaint against ldaho Power includes alternative causes of action for constructive fraudulent
transfer under the federal bankruptcy code, ldaho law, and federal law, with requests for recovery
from ldaho Power in amounts up to approximately $36 million. The complaint alleges that the
payments made by Hoku Corporation to ldaho Power are subject to recovery by the trustee on the
basis that Hoku Corporation was insolvent at the time of the payments and did not have any legal
or equitable title in the polysilicon plant or liability for Hoku Materials'debts, and thus did not
receive reasonably equivalent value for the payments it made for or on behalf of Hoku Materials.
CONTINGENT LIABILITIES (continued)
IDAHO POWER COMPANY
December 31,2015
As of the date of this report, the proceedings are in preliminary stages and it is not possible to
determine ldaho Power's potential liability, if any, or to reasonably estimate a possible loss or range
of possible loss, if any, within the trustee's alternative prayers for relief. ldaho Power intends to
vigorously defend against the claims.
Other Proceedings
ldaho Power is party to legal claims and legal and regulatory actions and proceedings in the
ordinary course of business that are in addition to those discussed above and, as noted above,
record an accrual for associated loss contingencies when they are probable and reasonably
estimable. As of the date of this report the companies believe that resolution of those matters will
not have a material adverse effect on their respective consolidated financial statements. ldaho
Power is also actively monitoring various pending environmental regulations that may have a
significant impact on its future operations. Given uncertainties regarding the outcome, timing, and
compliance plans for these environmental matters, ldaho Power is unable to estimate the financial
impact of these regulations. However, ldaho Power does believe that future capital investment for
infrastructure and modifications to its electric generating facilities could be significant to comply with
these regulations.
ATTACHMENT II(dT
Statement of Retained Earnings
IDAHO POWER COMPANY
Condensed Statement of Unconsolidated Retained Earnings
and
Undistributed Subsidiary Earnings
For the Twelve Months Ended December 31,2015
Retained Earninos
Retained earnings (at the beginning of period)
Balance transferred from income
Dividends received from subsidiary...
Total
Dividends:
Common Stock
Total
Retained earnings (at end of period)
Balance (at beginning of period)
Equity in earnings for the period
Dividends paid (Debit)...
Balance (at end of period)
Undistributed Subsidiarv Earninqs
$ 9s2,335,875
18,432,354,019
6,000,000
114,265,941,519
96,908,038
96,908,038
$ t o+,s25,137,719
$ 8,101,436,598
665,994,181
(6,000,000)
$ 8,167,430,779
ATTAGHMENT !l(e)
Statement of lncome
IDAHO POWER COMPANY
CONDENSED UNCONSOLIDATED STATEMENT OF INCOME
For the Twelve Months Ended December 31, 2015
Operating Revenues...
Operating Expenses:
Purchased power.........
Fuel expense... ... ..........
Power cost adjustment... ...
Other operation and maintenance expense...
Energy effeciency programs....
Depreciation expense.....
Amortization of limited{erm electric p|ant...........
Taxes other than income taxes...........
lncome taxes - Federal...
lncome taxes - Other..........
Provision for deferred income taxes..........
Provision for deferred income taxes - Credit..........
lnvestment tax credit adjustment..
Operating lncome.......
Other lncome and Deductions:.........
Allowance for equity funds used during construction
Earnings of unconsolidated equity method investments
lncome taxes - Other income and deductions...
Other - Net..............
Net other income and deductions
lncome Before lnterest Charges......
lnterest Charges:.....
lnterest on first mortgage bonds..........
lnterest on other long-term debt............
lnterest on short-term debt........
Amortization of debt premium, discount and expense, net...
Other interest expense.
Total interest charges....
Allowance for borrowed funds used during construction - Credit.......
Net interest charges......
$ 1,267,505,531
226,470,388
186,230,999
16,765,780
342,145,933
30,531,891
130,931,146
7,178,537
32,808,301
12,593,365
5,986,110
86,269,807
(58,085,989)
492,099
Actual
247,187
21,785,246
6,659,942
2,144,263
(5,068,415)
25,521,036
272,708,200
74,370,514
8,685,291
797,327
3,078,637
4,846,724
91,768,493
10,043,775
81,724,718
$ 190,983,482
Total operating expenses................. 1,020,318,367
164
Net lncome.....
ATTAGHMENT IV
Proposed Order
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
rN THE MATTER OF THE APPLTCATION )
oF IDAHO POWER COMPANY FOR AN )
oRDER AUTHORTZTNG THE ISSUANCE AND ) CASE NO. rPC-E-16-_
SALE OF UP TO $5OO,OOO,OOO OF APPLICANT'S )
FIRST MORTGAGE BONDS AND DEBT
SECURITIES
) PROPOSED ORDER
)
This matter is before the Commission upon the Application of Idaho Power
Company ("Applicant") filed March _,2016, for authority to issue and sell from time to
time (a) up to $500,000,000 aggregate principal amount of one or more series of
Applicant's first mortgage bonds, which may be designated as secured medium-term
notes ("Bonds") and (b) up to $500,000,000 aggregate principal amount of one or more
series of unsecured debt securities of the Applicant ("Debt Securities"); provided
however, that the total principal amount of the Bonds and Debt Securities to be issued
and sold shall not exceed $500,000,000. The Commission, having fully considered the
Application and attached exhibits, its files and records relating to the Application and the
applicable laws and rules, now makes the following:
FINDINGS OF FACT
I.
The Commission has jurisdiction pursuant to Title 61, ldaho Code, Chapters one
and nine.
lt.
The Applicant is incorporated under the laws of the State of ldaho and is qualified
to do business in the states of Oregon, Nevada, Montana and Wyoming in connection
with its utility business, with its principal office in Boise, ldaho.
{00187804.RTF; l}
PROPOSED ORDER - I
The Applicant seeks authority to issue and sell, from time to time, (a) up to
$500,000,000 aggregate principal amount of one or more series of the Bonds under its
lndenture of Mortgage and Deed of Trust, dated as of October 1, 1937 as supplemented
and amended, and as to be further supplemented and amended ("Mortgage"), and (b)
up to $500,000,000 aggregate principal amount of one or more series of Debt Securities
under an unsecured debt indenture of Applicant; provided, that the total principal
amount of the Bonds and Debt Securities to be issued and sold shall not exceed
$500,000,000.
lv.
The Applicant will file a registration statement for the Bonds and Debt Securities
with the Securities and Exchange Commission ("SEC") pursuant to the shelf registration
provisions of Rule 415 of the Securities Act of 1933, as amended (the "Shelf
Registration"). This will enable the Applicant to take advantage of attractive market
conditions efficiently and rapidly. Under the shelf registration, the Applicant will be able
to issue the Bonds and/or Debt Securities at different times without the necessity of
filing a new registration statement. The Applicant requests authority to issue the Bonds
and/or Debt Securities through May 31,2019, which will align with the anticipated three-
year life of the Shelf Registration.
V.
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 the
Applicant. The Applicant may enter into interest rate hedging arrangements with
{00187804.RTF; l}
PROPOSED ORDER - 2
respect to the Bonds, including treasury interest rate locks, treasury interest rate caps,
treasury interest rate collars, treasury options, fonruard starting interest rate swaps,
and/or swaptions. The Applicant states that price or prices, issuance date or dates,
maturity or maturities, interest rate or rates (which may be fixed or variable) and/or the
method of determination of such rate or rates, time of payment of interest, whether a!! or
a portion of the Bonds will be discounted, whether all or a portion of the Bonds will be
issued in global form, whether interest rate hedging arrangements will apply to the
Bonds, repayment terms, redemption terms, if any, and any other special terms of the
Bonds have not yet been determined and may be different for each issuance of the
Bonds.
vl.
The Bonds may be designated as secured medium-term notes. The medium-
term notes could have maturities from nine months to thirty years. Before issuing
medium-term notes publicly, the Applicant wi!! file a Prospectus Supplement with the
SEC setting forth the general terms and conditions of the medium-term notes to be
issued. Upon each issuance of the medium-term notes pursuant to the Prospectus
Supplement, the Applicant will file a Pricing Supplement with the SEC providing a
specific description of the terms and conditions of each issuance of the medium-term
notes, as described in paragraph V above. The Applicant wi!! also file a copy of the
Prospectus Supplement and Pricing Supplements with the Commission.
vlt.
The Debt Securities will be unsecured obligations of the Applicant and will be
issued under an existing or new unsecured debt indenture of the Applicant. The
{00187804.RTF; 1 }
PROPOSED ORDER - 3
Applicant may enter into interest rate hedging arrangements with respect to the Debt
Securities, including treasury interest rate locks, treasury interest rate caps, treasury
interest rate collars treasury options, fonrard starting interest rate swaps, and/or
swaptions. The Applicant states that price or prices, issuance date or dates, maturity or
maturities, interest rate or rates (which may be fixed or variable) and/or the method of
determination of such rate or rates, time of payment of interest, whether all or a portion
of the Debt Securities will be discounted, whether all or a portion of the Debt Securities
wil! be issued in global form, whether interest rate hedging arrangements will apply to
the Debt Securities, repayment terms, redemption terms, if any, and any other special
terms of the Debt Securities have not yet been determined and may be different for
each issuance of the Debt Securities.
vlil.
Applicant states that the Bonds and/or Debt Securities may be sold by public sale
or private placement, directly by the Applicant or through agents designated from time
to time or through underwriters or dealers. lf any agents of the Applicant or any
undenrriters 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. !f 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.
{0018780a.RTF; l}
PROPOSED ORDER - 4
tx.
The net proceeds to be received by the Applicant 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 genera!
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.
CONCLUSIONS OF LAW
l.
Applicant is incorporated under the State of ldaho and is duly authorized to do
business in the states of Oregon, Nevada, Montana and Wyoming in connection with its
utility operations.
il.
The Commission has jurisdiction over this Application.
llr.
The Commission does not have before it for determination and, therefore, does
not determine the effect of the Bonds and/or Debt Securities on rates to be charged by
Applicant for electric service to consumers in the State of ldaho.
tv.
The proposed issuance and sale of the Bonds and/or Debt Securities are for a
lawful purpose and are within Applicant's corporate powers. The proposed transaction
{00187804.RTF; l}
PROPOSED ORDER - 5
is in the public interest, and a formal hearing on this matter would serve no public
purpose.
V.
Al! fees have been paid by Applicant in accordance with ldaho Code 61-905.
ORDER
lT IS THEREFORE ORDERED that the Application of ldaho Power Company to
issue and sell from time to time (a) up to $500,000,000 aggregate principal amount of
one or more series of the Bonds and (b) up to $500,000,000 aggregate principal amount
of one or more series of the Debt Securities in the ways and for the purposes set forth in
its Application be, and the same is hereby granted; provided, that the total principal
amount of the Bonds and Debt Securities to be issued and sold shall not exceed
$500,000,000. This authorization shall be through May 31 , 2019. Applicant may
request an extension of this authorization by letter filed with the Commission prior to the
expiration of such three-year period.
lT lS FURTHER ORDERED that Applicant notify the Commission by letter within
seven (7) days (or as soon as possible, if the required information is not available within
seven (7) days) before the issuance of the Bonds and/or Debt Securities of the likely
range of interest rates and other terms for the securities, unless, in the case of Bonds,
the Bonds are issued as medium-term notes.
lT lS FURTHER ORDERED that Applicant file a copy of the registration
statement with the Commission, as promptly as possible after the Applicant files the
registration statement with the SEC.
{00187804.RTF; l}
PROPOSED ORDER - 6
lT IS FURTHER ORDERED that Applicant file, as promptly as possible after the
issuance of each series of Bonds, a copy of the Prospectus Supplement showing the
terms of the sale, and the names of the purchasers or undenruriters or agents with the
Commission. !f the Applicant issues Bonds designated as medium-term notes, the
Applicant's reporting requirements shall consist of filing with the Commission a copy of
the Prospectus Supplement for the medium-term notes as filed with the SEC. The
Applicant shall also file with the Commission a copy of the Pricing Supplements filed
with the SEC, setting forth the specific terms and conditions for each issuance of the
medium-term notes.
IT !S FURTHER ORDERED that Applicant file, as promptly as possible after the
issuance of each series of Debt Securities, a copy of the Prospectus Supplement
showing the terms of the sale, and the names of the purchasers or underwriters or
agents with the Commission.
lT IS FURTHER ORDERED that ldaho Power's existing authorization from the
Commission to issue bonds and debt securities under Order No. 33264 in Case No.
IPC-E-15-04 ("Existing Orde/') will extend for a period of twenty-one (21) days following
the service date of this order, at which time said authorization under the Existing Order
will automatically expire if no petition(s) for reconsideration have been filed in this case
as provided in the final paragraph of this order.
IT lS FURTHER ORDERED that nothing in this order shall be construed to
obligate the state of ldaho to pay or guarantee in any manner whatsoever any security
authorized, issued, assumed, repurchased, defeased or guaranteed under the
provisions of this order.
{00187804.RTF; l}
PROPOSED ORDER - 7
lT !S FURTHER ORDERED that this authorization is without prejudice to the
regulatory authority of this Commission with respect to rates, services, 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.
lT lS FURTHER ORDERED that the issuance of this order does not constitute
acceptance of ldaho 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
finally decided by this order) or in interlocutory orders previously issued in this case 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 or in interlocutory orders 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 /daho
Code 61-626.
{00187804.RTF; l}
PROPOSED ORDER - 8
DONE BY ORDER of the ldaho Public Utilities Gommission at Boise, ldaho this
day of
PAUL KJELLANDER, PRESIDENT
KRISTINE RAPER, COMMISSIONER
ERIC ANDERSON, COMMISSIONER
ATTEST:
JEAN D. JEWELL
Commission Secretary
{0018780a.RTF; l}
PROPOSED ORDER - 9