20190329Decision Memo.pdf

RE
DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOSEPH TERRY
TERRI CARLOCK
DATE: MARCH 28,2A19
IDAHO POWER COMPANY'S REQUEST FOR SHELF
AUTHORIZATION TO ISSUE Up TO $500,000,000 IN DEBT;
CASE NO. IPC.E.19-09
On March 12,2019, Idaho Power Company (ldaho Power; Company) filed an
Application requesting shelf authority to sell from time to time (a) up to $500 million aggregate
principal amount of one or more series of the Company's first mortgage bonds which may be
designated as secured medium term notes (Bonds) and (b) up to $500 million aggregate principal
amount of one or more series of unsecured debt securities (Debt Securities); provided that the
total principal amount of these issuances shall not exceed $500 million. The Company request
the authority be authorized through May 31,2022, to align with the anticipated three-year life of
the Shelf Registration. The correct filing fees were received with this filing.
The bonds will be issued pursuant to one or more supplemental indentures to the
Mortgage and will be secured with the other First Mortgage Bonds of Idaho Power. The Bond
and/or Debt Securities may be sold by public or private placement, directly by Idaho Power or
through agents designated from time to time or through underwriters or dealers. The types 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 documents will be filed with the Commission. The
Company is also requesting continued authority to enter into interest rate hedging arrangements
with the respect of the Bonds and/or Debt Securities including treasury interest rate locks,
IDECISION MEMORANDUM MARCH 28,2A19
treasury interest rate caps, treasury interest rate collars, treasury options, forward starting inlerest
rate swaps and/or swaptions.
The net proceeds from these issuances will be used for the acquisition of property;
construction, extension or improvement of utility facilities; improvement or maintenance of
service; discharge or lawful refunding of its obligations; and general corporate purposes. To the
extent that the proceeds from the sale of the Bonds or Debt Securities are not immediately so
used, they will be temporarily invested in short-term discounted or interest-bearing obligations.
A shelf registration 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. 33513 expires March 31,2019. The Company currently has
$280 million remaining under current shelf authority and the Company requests this authority to
remain in effect for 2l days following the date of the Commission's order when it would
automatically expire if no petitions for reconsideration are received.
The Company's cument outstanding First Mortgage Bonds and unsecured senior debt are
currently respectively rated A- and .A3 by Moody's Investors Services (Moody's) and A- and
BBB by Standard and Poor's Rating Service (S&P). The existing shelf authority has the
provision that if any rating falls below investment grade (Baa3 for Moody's and BBB- for S&P)
the Company will make a filing to support the continued authority of unissued amounts. Staff
proposes this provision continue for the length of this authority.
STATF RECOMMENDATION
Staff recommends the Commission grant the requested authority for $500 million shelf
registration through May 3 1,2022. This will allow the authority to align with the expected SEC
authorization.
Staff recommends the Commission order the Company to make a filing supporting
continued authority if the ratings fall below investment grade.
Staff recommends the Commission order Idaho Power continue to file copies of the
documents described above by letter within seven days or as soon as possible prior to issuance.
DECISION MEMORANDUM 2 MARCH 28,2019
COMMISSION DECISION
Does the Commission approve the $500 million shelf registration through May 31,2022?
Does the Commission wish to establish the filing requirements described?
Udmemos/lPC-E- I 9-09 Dec Memo
DECISION MEMORANDUM J MARCH 28,2019