20160427final_order_no_33513.pdf

Office of the Secretary
Service Date
April 27,2016
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY’S APPLICATION FOR )CASE NO.IPC-E-16-05
AUTHORITY TO ISSUE AND SELL UP TO )
$500,000,000 IN FIRST MORTGAGE BONDS )
AND DEBT SECURITIES )ORDER NO.33513
__________________________________________________________________________________
)
On March 28,2016,Idaho Power Company applied to the Commission for an Order
authorizing the Company to issue and sell bonds and debt securities with a total combined
principal amount of up to $500,000,000.The Company requests the authority be authorized
through May 31,2019.
After the Company filed its Application,Commission Staff recommended that the
Commission approve the requested authority on certain conditions.Based on our review of the
record,we issue this Order approving the Application as noted below.
THE APPLICATION
The Company is an Idaho-based public utility and electrical corporation that is
qualified to do business in Oregon,Nevada,Montana and Wyoming.With this Application,the
Company seeks authority to issue and sell,from time to time,up to:(a)$500,000,000 aggregate
principal amount of one or more series of first Mortgage Bonds,which may be designated as
secured medium-term notes (the “Bonds”);and (b)$500,000,000 aggregate principal amount of
one or more series of unsecured debt securities (the “Debt Securities”).The total outstanding
combined principal amount of the Bonds and Debt Securities shall not exceed $500,000,000.
The Company asks the Commission to issue and sell the Bonds and Debt Securities through May
31,2019,to align with the anticipated three-year life of the shelf registration at the Securities
Exchange Commission (SEC).
The Company will issue the Bonds under one or more supplemental indentures to the
Company’s Indenture of Mortgage and Deed of Trust,dated as of October 1,1937,as
supplemented and amended.and will secure them equally with the Company’s other first
Mortgage Bonds.The Company,its agents,and designated underwriters may sell the Bonds and
Debt Securities by public sale or private placement.The type and terms of issuance will be
determined at the time of issuance.A copy of the shelf registration,any Prospectus,Prospectus
ORDERNO.33513 1
Supplements,Pricing Supplements,statement of net proceeds,and any agent information along
with all final documents will be filed with the Commission.The Company also requests
continued authority to enter interest rate hedging arrangements with respect to the Bonds and
Debt Securities,including treasury interest rate locks,treasury interest rate caps,treasury interest
rate collars,treasury options,forward starting interest rate swaps,and swaptions.
The Company states it will apply the net proceeds from selling the Bonds and Debt
Securities 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 selling the Bonds or Debt Securities are not immediately so used,they will be
temporarily invested in short-term discounted or interest-bearing obligations.
A shelf registration at the SEC allows a company to issue debt in one or more series
and to take advantage of attractive market conditions efficiently and rapidly.This allows
issuances to be made at lower cost and still facilitate ongoing review.The current shelf
registration authority,approved by Commission Order No.33264,dated April 1,2015,was for
two years.The Company currently has $130,000,000 remaining under the existing shelf
authority.The Company asks that this authority remain in effect for 21 days following the date
of the Commission’s Order when it would automatically expire if no petitions for reconsideration
are received.The Company’s outstanding First Mortgage Bonds and unsecured senior debt are
respectively rated Al and A3 by Moody’s Investors Service,and A-and BBB by Standard &
Poor’s Rating Service.The existing shelf authority provides that if any rating falls below
investment grade,the Company will make a filing to support the continued authority of unissued
amounts.
STAFF REVIEW AND RECOMMENDATION
Staff recommended the Commission grant the Company’s Application.Staff stated
allowing the Company to issue and sell the Bonds and Debt Securities through May 31,2019,
will align with the Company’s issuance authority with the expected three-year life of the Shelf
Registration at the SEC.This,in turn,will enable the Company to take advantage of attractive
market conditions efficiently and rapidly.
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Staff also recommended the Commission continue to require the Company to file
supplemental information if the Bonds and Unsecured Debt ratings fall below investment grade,
especially since the Company currently has a two-year authority,but is now requesting a three-
year authority.
Lastly,Staff recommended the Company continue to file copies of all documents as
described above.The Company should file the terms of issuance with the Commission,by letter,
seven days,or as soon as possible,before issuing the securities.
FINDINGS AND DISCUSSION
The Company is an Idaho corporation with its principal office in Boise,Idaho.The
Company is also an electric corporation as defined by Idaho Code §61-1 19,and a public utility
as defined in Idaho Code §6 1-129.The Commission has jurisdiction over this matter pursuant
to Title 61 of the Idaho Code,including without limitation Idaho Code §61-501,and 61-901
through 61-909.
Based on our review of the record,we find that the Company’s Application
reasonably conforms to Rules 141 through 150 of the Commission’s Rules of Procedure (IDAPA
31.01.0L141-.150),and that the Company has paid all fees required by Idaho Code §61-905.
We also find that the Company proposes to issue securities for lawful purposes under
Idaho Code §61-901,that the proposed issuance is within the Company’s corporate powers and
in the public interest,and that a formal hearing on this matter is not required.We find it
reasonable to grant the Company’s Application,which will enable the Company to take
advantage of favorable market conditions and quickly and efficiently issue the securities at lower
costs while allowing for ongoing Commission review.
As always,our approval of the issuance is not a finding of fact or a conclusion of law
that the particular use to which these funds are to be put is approved by this Order.The issuance
of an Order authorizing the proposed issuance does not constitute agency determination or
approval of the type of financing or the related costs for ratemaking purposes.The Commission
does not have before it for determination in this case and therefore does not determine the effect
of issuance on rates to be charged by the Company for service to Idaho consumers.
ORDER
IT IS HEREBY ORDERED that the Company’s Application is granted.The
Company is authorized to issue and sell,from time to time through May 31,2019,up to:(a)
ORDERNO.33513 3
$500,000,000 aggregate principal amount of one or more series of the Bonds;and (b)
$500,000,000 aggregate principal amount of one or more series of the Debt Securities.The total
outstanding combined principal amount of the Bonds and Debt Securities shall not exceed
$500,000,000.The Company may ask the Commission to extend this authorization by filing a
letter with the Commission before the authority expires.
IT IS FURTHER ORDERED that the Company must 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 issuing 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.
IT IS FURTHER ORDERED that Company must file a copy of the registration
statement with the Commission,as promptly as possible after the Company files the registration
statement with the SEC.
IT IS FURTHER ORDERED that the Company must file with the Commission,as
promptly as possible after issuing each series of Bonds,a copy of the Prospectus Supplement
showing the terms of the sale,and the names of the purchasers or underwriters or agents.If the
Company issues Bonds designated as medium-term notes,the Company’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 Company 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 IS FURTHER ORDERED that the Company must file with the Commission,as
promptly as possible after issuing 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.
IT IS FURTHER ORDERED that the Company’s’existing authority to issue bonds
and debt securities,as specified in Order No.33264 in Case No.IPC-E-15-04,will extend for a
period of twenty-one (21)days from the service date of this order,at which time the existing
authority under Order No.33264 will automatically expire if no petition(s)for reconsideration
have been filed in this case.
ORDERNO.33513 4
IT IS FURTHER ORDERED that the authorization set forth in this Order is without
prejudice to the Commission’s authority over rates,utility capital structure,service accounts,
valuation,estimates for determination of cost,or any other matter that may come before the
Commission under its jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that nothing in this Order and no provisions of Chapter
9,Title 61,Idaho Code,or any act or deed done or performed in connection with this Order shall
be construed to obligate the State of Idaho to pay or guarantee in any manner whatsoever any
security authorized,issued,assumed,or guaranteed under the provisions of Chapter 9,Title 61
Idaho Code.
IT IS FURTHER ORDERED that issuance of this Order does not constitute
acceptance of the Company’s exhibits or other material accompanying the 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 Idaho Code §6 1-626.
ORDERNO.33513 5
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this ‘7 ‘
day of April 2016.
PAUL JELLJER,PRESIDENT
.S
KRISTINE RAPER,CO S STONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Ii .
D.Jewell fJ
Cimmission Secretary
O:IPC-E-I 6-O5kk
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