20190312Application.pdf

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AN IDACORP CO|nDANY i.-.,- .; -- ,
Patrick A. Harrington
Corporate Secretary
Ms. Jean D. Jewell
Secretary
Idaho Public Utilities Commission
Statehouse
Boise, Idaho 83720
March 12,2019
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-I9 - O?
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 2081388-2878
c: Terri Carlock
P.O. Box 70 Boise,ID 83707
Telephone [phone], Fox [phone]
Sincerely, \
ffiTilt f,/?/ut^
Patrick A. Harrindon\
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 $5OO,OOO,OOO OF APPLICANT'S
FIRST MORTGAGE BONDS AND DEBT
SECURITIES
CASE NO. IPC-E-1e - o9
APPLICATION
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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 Rules 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 Securities 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 , 2022, which would
align with the anticipated three-year life of the Shelf Registration.
(a)The icant
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
(00249490.RTF; 1)
APPLICATION - 1
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, ldaho 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 will 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, lnc.,
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
Registration. A copy of the Shelf Registration will be filed with the Commission as
Attachment I to this Application.
{00249490.RTF; 1}
APPLICATION - 2
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) as trustee (or any successor trustee), 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, fonrvard 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 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, which terms may be
different for each issuance of the Bonds. The Applicant will also file a copy of the
Prospectus Supplement with the Commission.
{002a9490.RTF: 1}
APPLICATION - 3
The Bonds may be designated as secured medium-term notes. The medium-
term notes could have maturities from nine months to forty 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 tt/ortgage Bonds are currently rated 41 by Moody's
lnvestors Service and A- by Standard & Poor'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. Applicant agrees to provide
written notice to the Commission under this case if its First Mortgage Bond credit ratings
fall below Baa3 for Moody's lnvestors Service or BBB- for Standard & Poor's Ratings
Services.
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 wil! 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 wi!! supplement the indenture in the future
{002a9490.RTF; 1}
APPLICATION - 4
to further specify the terms and conditions of each series of Debt Securities. Such
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
will 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 43 by [Vloody'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.
{00249a90.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 dealers. lf any agents of the Applicant or any undenryriters 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 undenryriters 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 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 lawful 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 instruments.
{00249490.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. 33513, dated April 27,2016, in Case No. IPC-E-16-05
("Existing Order"). 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
$280,000,000 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 under
Section 331.01 of the Rules "Reconsideration Period"), at which point the
Commission's authorization under the Existing Order would automatically expire if no
petitions for reconsideration are received. Applicant proposes that during the twenty-
one (21) day Reconsideration Period, Applicant would continue to have authorization
from the Commission to issue up to $280,000,000 of bonds and debt securities under
the Existing Order, in addition to Applicant's authorization to issue Bonds and Debt
Securities under the Commission's order hereunder; provided, that Applicant's total
{00249490.RTF; 1 }
APPLICATION - 7
issuance authority under the Existing Order and under the order issued hereunder
would not exceed $500,000,000 during the Reconsideration Period.
(0 Financial Statements: Resolutions
Applicant has filed herewith as Attachment ll its financial statements dated as of
December 31, 2018 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 !ncome.
A certified copy of the resolutions of Applicant's Directors authorizing the
transaction with respect to this Application will be filed with Commission as Attachment
lll to this Application on or about April 1 5,2019.
(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 principal amount of the Bonds and Debt Securities to
{00249490.RTF; 1}
APPLICATION - 8
be issued and sold shall not exceed $500,000,000, and the term of the Commission's
authorization shall run through May 31,2022
DATED at Boise, ldaho tnis lfhday of March, 2019.
IDAHO POWER COMPANY
By:a
R. Keen
Sr. Vice President, Chief Financial
Officer and Treasurer
(coRPoRATE SEAL)
Patrick Harringto
Secretary
ldaho Power Company
1221W. ldaho Street
P.O. Box 70
Boise, ldaho 83707-0070
{002a9490.RTF; 1}
APPLICATION - 9
ATTACHMENT II(a}
Actual and Pro Forma Balance Sheet
IDAHO POWER COMPANY
CONDENSED UNCONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2018
ASSETS
Actual Adiustments
After
Adjustments
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 prope(y.........
lnvestment in subsidiary companies .........
Other.....................
Total investments and other property.......
Current Assets:
Cash and cash equivalents..
Receivables:
Customer.......
Other
Accrued unbilled revenues.......
Materials and supplies (at average cost).
Fuel stock (at average cost)....................
Prepayments.
Taxes receivable
Total current assets
Deferred Debits:
Company owned life insurance.
Total deferred debits.......
Total.
$ 6,103,855,722 $
(2,210,781,028)
$ 6,103,855,722
(2,210,781,028)
3,893,074,694
480,258,675
4,751,462
3,653,100
57,026,770
36,487,611
3,893,074,694
480,258,675
751
3,653,100
57,026,770
36,487,611
97,167,481 97,167,481
165,460,127
77,177,924
7,205,816
69,318,168
54,987,326
47,979,122
16,373,874
11,828,949
48,706,510
3,655,138
500,000,000 665,460,127
77,177,924
7,205,816
69,318,168
54,987,326
47,979,122
16,373,874
11,828,949
48,706,510
3,655,138
502,692,954 500,000,000 1,002,692,954
59,852,376
1,165,467,907
58,283,507
59,852,376
1,165,467,907
58,283,507
1,283,603,790 1,283,603,790
$ 6,261,549,056 $ s00,000,000 $ 6,761,549,056
Common Shares
Authorized
IDAHO POWER COMPANY
CONDENSED UNCONSOLIDATED BALANCE SHEET
AS OF December 31, 2018
CAPITALIZATION AND LIABILITIES
Common Shares
Outstanding Actual Adjustments
After
Adjustments
Equity Capital 50,000,000
Long-Term Debt:
First mortgage bonds ................
Pollution control revenue bonds
American Falls bond.....
39,150,812
Common stock...
Premium on capital stock.............
Capital stock expense
Retained earnings........
Accummulated other comprehensive income................
Total equity capital.....
$97,877,030 $
712,257,435
(2,096,925)
1,409,245,383
(22,843,785)
$97,877,030
712,257,435
(2,0e6,925)
1,409,245,383
(22,843,785)
2194.439,138 2,194,439J38
1,665,000,000
170,460,000
19,885,000
(20,556,719)
500,000,000 2,165,000,000
170,460,000
19,885,000
(20,556,719)Unamortized debt issuance costs and discounts on long{erm debt......
Total long-term debt......
Current Liabilities:
Long-term debt due within one year...........
Notes payable
Accounts payable
Notes and accounts 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..1,967,298,200 1,967,298,200
$ 6,261,s49,056 $ 500,000,000 $ 6,761,549,056
1,834,788,281 500,000,000 2,334,788,281
1 10,596,980
6,640,793
13,135,570
23,622,431
54,909,621
25,883,170
20,037,293
10,197,579
1 10,596,980
6,640,793
13,135,570
23,622,431
54,909,621
25,883,'170
20,037,293
10,197,579
265,023,437 265,023,437
92,789,836
754,449,380
646,203,298
431,475,266
42,380,420
92,789,836
754,449,380
646,203,298
431,475,266
42,380,420
IDAHO POWER COMPANY
STATEMENT OF ADJUSTING JOURNAL ENTRIES
As of December 31,2018
Giving Effect to the Proposed issuance of
First Mortgage Bonds
Entry No. 1
Cash $ 500,000,000
First Mortgage Bonds...........
To record the proposed issuance of First Mortgage
and the receipt of cash.
$ 500,000,000
ATTACHMENT II(b)
Statement of Capital Stock and Funded Debt
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT
IDAHO POWER COMPANY
December 31,2018
The following statement as to each class of the capital stock of applicant is as of December 31 , 2018, 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 31,2018
The following statement as to funded debt of applicant is as of December 31, 2018, the date of the balance
sheet submitted with this application.
First Mortgage Bonds
(1)
Description
FIRST MORTGAGE BONDS:
3.40% 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 % Series due 2023, dated as of April 8, 2013, due April 1,2023
6.00 % Series due 2032, dated as of Nov 15,2002, 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 15,2034
5.875o/o Series due 2034, dated as of August 16,2004, due August 15,2034
5.30 % Series due 2035, dated as ofAugust 23,2005, due August 15, 2035
6.30 % Series due 2037, dated as ofJune 22,2007, due June 15,2037
6.25 % Series due 2037, dated as of October 18,2007, due October 15,203i
4.85% Series due 2040, dated as of Aug 30, 2010, due Aug 15,2040
4.30 % Series due 2042, dated as of April 13, 2012, due April 1 , 2042
4.0O % 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
4.OS o/o Series due 2046, dated as of March 1 0, 201 6, due March 1 , 2046
4.20 o/o Series due 2048, dated as of March 16, 2018, due March 1 , 2048
(3)
Amount
Outstanding
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
120,000,000
220,000,000
1,655,000,000
(2) Amount authorized - Limited within the maximum of $2,500,000,000 (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-eighth Supplemental lndentures thereto, by
ldaho Power Company to Deutsche Bank Trust Company Americas (formerly known as Bankers Trust
Company), Trustee, presently on file with the Commission, under which said bonds were issued.
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT (Continued)
IDAHO POWER COMPANY
December 31,2018
Pollution Control Revenue Bonds
(A) Variable Rate Series 2000 due 2027:
(1) Description - Pollution Control Revenue Bonds, Variable Rate Series due 2027, Porl
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) 5.25% Series 2006 due 2026:
(1) Description - Pollution Control Revenue Bonds, 5.25% Series 2006 due 2026, County
of Sweetwater, Wyoming, dated as of August 20, 2009, due July 15,2026
(2) Amount authorized - $1 16,300,000
(3) Amount outstanding - $1 16,300,000
(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 August 20, 2009, 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.
AIIACHMENT l!(c)
Commitments and Contingent Liabilities
CONTINGENT LIABILITIES
IDAHO POWER COMPANY
December 31,2018
GUARANTEES
Through a self-bonding mechanism, ldaho Power guarantees its portion of reclamation activities
and obligations at BCC, of which IERCo owns a onethird interest. This guarantee, which is
renewed annually with the Wyoming Department of Environmental Quality, was $58.4 million at
December 31,2018, representing IERCo's one-third share of BCC's total reclamation obligation of
$175.2 million. BCC has a reclamation trust fund set aside specifically for the purpose of paying
these reclamation costs. At December 31, 2018, the value of the reclamation trust fund was $101.9
million. During 2018, the reclamation trust fund made distributions of $6.7 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, and does, add a per-
ton surcharge to coal sales, all of which are made to the Jim Bridger plant. 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 its historical
experience and the evaluation of the specific indemnities. As of December 31, 2018, 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 its consolidated balance
sheet with respect to these indemnification obligations.
CONTINGENCIES
ldaho Power has in the past and expects in the future to become involved in various claims,
controversies, disputes, and other contingent matters, some of which 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 accrualfor legal proceedings when those matters proceed to a stage where they
present loss contingencies that are both probable and reasonably estimable. 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 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
CONTINGENT LIABILITIES (continued)
IDAHO POWER COMPANY
December 31,2018
appropriate, recovery through the ratemaking process of costs incurred, although there is no
assurance that such recovery would be granted.
ldaho Power is a party to legal claims and legal and regulatory actions and proceedings in the
ordinary course of business and, as noted above, records an accrual for associated loss
contingencies when they are probable and reasonably estimable. ln connection with its utility
operations, ldaho Power is subject to claims by individuals, entities, and governmental agencies for
damages for alleged personal injury, property damage, and economic losses, relating to the
company's provision of electric service and the operation of its generation, transmission, and
distribution facilities. Some of those claims relate to electrical contacts, service quality, property
damage, and wildfires. ln recent years, utilities in the western United States have been subject to
significant liability for personal injury, loss of life, property damage, trespass, and economic losses,
and in some cases, punitive damages and criminal charges, associated with wildfires that
originated from utility property, most commonly transmission and distribution lines. ln recent years,
ldaho Power has regularly received claims by both governmental agencies and private landowners
for damages for fires allegedly originating from ldaho Power's transmission and distribution system.
As of the date of this report, the company believes that resolution of existing claims will not have a
material adverse effect on its consolidated financial statements. ldaho Power is also actively
monitoring various pending environmental regulations and executive orders related to
environmental matters 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.
ATTACHMENT II(d)
Statement of Retained Earnings
IDAHO POWER COMPANY
Condensed Statement of Unconsolidated Retained Earnings
and
Undistributed Subsidiary Earnings
For the Twelve Months Ended December 31,2018
Retained Earninqs
Retained earnings (at the beginning of period)
Balance transferred from income.
Dividends received from subsidiary
Tota|...........
Dividends:
Common Stock
Tota|...........
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
$ t,238,951,935
213,520,498
24,000,000
1,476,472,434
121 790 728
121 790 728
$ t,354,681,706
69,749,884
8,813,793
(24,000,000)
$54,563,677
$
ATTACHMENT Il(e)
Statement of !ncome
IDAHO POWER COMPANY
CONDENSED UNCONSOLIDATED STATEMENT OF INCOME
For the Twelve Months Ended December 31,2018
Operating Revenues...
Operating Expenses:
Purchased power.........
Fuel expense... ... ..........
Power cost adjustment... .
Other operation and maintenance expense.....
Energy effeciency programs....
Depreciation expense.....
Amortization of limitedterm 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..
Total operating expenses.
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......
$ 1,366,582,339
293,814,296
133,197,921
42,105,612
372,418,811
35,702,949
158,057,969
7,131 ,956
34,792j43
20,035,445
(2,242,797)
37,060,319
(44,435,246)
5,405,099
1,093,044,474
273,537,865
24,352,523
8,813,793
(311,784)
2,112,097
34,966,629
308,504,494
75,666,250
8,74',1,394
797,510
3,759,740
7,356,632
96,321 ,516
10,1 51 ,31 3
86,170,203
Net lncome.....$ 222,334,291
Actual
ATTACHMENT IV
Proposed Order
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO ISSUE AND SELL UP TO
$500,000,000 IN FIRST MORTGAGE BONDS
AND DEBT SECURITIES
CASE NO.IPC-E-Tg.
PROPOSED ORDER
On March _, 2}lg,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
3t,2022.
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 for authority to issue and sell the Bonds and Debt Securities through May
31, 2022, to align with the anticipated three-year life of its 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, 7937, as
supplernented 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 Supplements,
Pricing Supplements, statement of net proceeds, and any agent information along with all final
)
)
)
)
)
)
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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 instruments.
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 Company's current shelf registration
authority,approvedbyCommissionOrderNo.33513,dated Apnl2T,20l6,extendsuntilMay3l,
20L9. The Company currently has $280,000,000 remaining under the existing shelf authority. The
Company asks that this authority remain in effect for 27 days following the date of the
Commission's Order when it would automatically expire if no petitions for reconsideration are
received; provided, that the Company's total issuance authority under Order No. 33513 and under
this Order would not exceed $500,000,000 at any time. The Company's outstanding First
Mortgage Bonds and unsecured senior debt are respectively rated Al and ,A'3 by Moody's Investors
Service, and A- and BBB by Standard & Poor's Rating Service.
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 3l,2022,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.
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,
since the Company is requesting a three-year authority.
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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 $ 6l-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 6l-901 through
6t-909.
Based on our review of the record, we find that the Company's Application reasonably
conforms to Rules l4l 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 $ 6l-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 37,2022, up to: (a) $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
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may ask the Commission to extend this authorizationby 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. 33513 in Case No. IPC-E-I6-05, 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. 33513 will automatically expire if no petition(s) for reconsideration have been
filed in this case.
IT IS FURTHER ORDERED that the Company will provide written notice to the
Commission in this case if its First Mortgage Bond credit ratings fall below Baa3 for Moody's
Investors Service or BBB- for Standard & Poor's Ratings Services.
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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 6l 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 l-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this _ day of
2019.
PAUL KJELLANDER, PRESIDENT
KRISTINE RAPER, COMMISSIONER
ERIC ANDERSON, COMMISSIONER
ATTEST:
Jean D. Jewell
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