20191017Application.pdf

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PUrick A. Harrington
Corporate Secretary
Ms. Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Building 8, Suite 201-A
Boise, ID 83714
October 15,2019
In the Matter of the Application of Idaho Power Company for an Order
Authorizing up to $450,000,000 Aggregate Principal Amount
at any one time outstanding of Short to Mid-Term Borrowings
Case No. IPC-E-I9 -33
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 payrnent 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.
Sincerely,
Terri Carlock
OOUeUO n"tt'l
F:6:;;; l;
Telephone [phone], Fax [phone]
Re:
A
,
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION RECEIVEE
1$19 0tT l? Pll h: hB
cASE No. !pc-E-1e rliL'.,t .j,ii*:i*i*,0*
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AN ORDER
AUTHORIZING UP TO $45O,OOO,OOO
AGGREGATE PRINCIPAL AMOUNT AT
ANY ONE TIME OUTSTANDING OF
SHORT TO MID-TERM BORROWINGS
)
)
)
)
)
)
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APPLICATION
APPLICATION - 1
!DAHO POWER COMPANY (the "Applicant") hereby applies for an Order
of the ldaho Public Utilities Commission (the "Commission") authorizing the Applicant to
make up to $450,000,000 aggregate principal amount at any one time outstanding of
shortterm and mid-term borrowings as set forth herein, pursuant to Chapter 9, Title 61,
ldaho Code, and under Rules 141 through 150 of the Commission's Rules of Procedure
(the "Rules"). Applicant's current short-term borrowing authorization from the Commission
extends through November 2022, under Order No. 33375, dated September 14,2015, in
Case No. IPC-E-15-23 (the "Current Order"). Applicant is seeking new shortterm and
mid-term borrowing authorization from the Commission hereunder that would extend
through December 31,2026, for up to $450,000,000 aggregate principal amount at any
one time outstanding of (1) short-term borrowings for a term of one year or less and (2)
mid-term borrowings for a term of over one year up to and including three years (together,
the "Borrowings"), all as set forth in this Application.
(1) The Applicant
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
{00261226.DOCX; l}
and eastern Oregon. The principal executive offices of Applicant are located at 1221 W.
ldaho Street, P.O. Box 70, Boise, ldaho 83707-0070; its telephone number is (208) 388-
2200.
(21 Description of Securities
Applicant's Borrowings hereunder will consist of (1) loans issued by
financial and other institutions and evidenced by unsecured notes or other evidence of
indebtedness of Applicant and (2) unsecured promissory notes and commercial paper of
Applicant to be issued by means of public or private placement through one or more
commercial paper dealers or agents, or directly by Applicant.
Applicant intends to secure commitments for new unsecured lines of credit,
or extensions of existing unsecured lines of credit, for its Borrowings authorized
hereunder. The unsecured lines of credit may be obtained with several financial or other
institutions, directly by Applicant or through an agent, when and if required by Applicant's
then current financial requirements (see Section (4) below, Purpose of lssuance). Each
individual line of credit commitment will provide that up to a specific amount at any one
time outstanding will be available to Applicant to draw upon for a fee to be determined by
a percentage of the credit line available, credit line utilization, compensating balance or
combination thereof.
Applicant may also make arrangements for uncommitted credit facilities
under which unsecured lines of credit would be offered to Applicant on an "as available"
basis and at negotiated interest rates. Such committed and uncommitted borrowings will
be evidenced by unsecured promissory notes or other evidence of indebtedness of
Applicant. The committed and uncommitted line of credit agreements specifying the
APPLICATION - 2 {00261226.DOCX; I }
terms of Applicant's Borrowings will be filed with the Commission as Exhibit A to this
Application.
The Borrowings will include unsecured promissory notes to be issued and
sold by Applicant through one or more commercial paper dealers or agents, or directly by
Applicant, up to the limits imposed by applicable statutes, rules or regulations. Each note
issued as commercial paper will be either discounted at the rate prevailing at the time of
issuance for commercial paper of comparable quality and maturity or will be interest
bearing to be paid at maturity. Each note issued as commercial paper will have a fixed
maturity and will contain no provision for automatic "roll over".
Applicant's main existing short-term borrowing agreement is its Credit
Agreement dated November 6,2015 ("Existing Credit Agreement"). The Existing Credit
Agreement provides committed lines of credit from participating banks in an aggregate
principal amount at any one time outstanding of $300,000,000, with the option of
Applicant to increase the borrowing limit to $450,000,000. The Existing Credit Agreement
is scheduled to expire on November 4,2022 (the term of the Existing Credit Agreement
was previously extended from November 6, 2020 to November 4, 2022). The Existing
Credit Agreement is on file with the Commission in Case No. IPC-E-15-23.
Applicant proposes to amend the Existing Credit Agreement or enter into a
new credit agreement in early December 2019 (in either case, the "New Credit
Agreement"). Applicant anticipates that the New Credit Agreement will continue to
provide for committed lines of credit from participating banks in an aggregate principal
amount at any one time outstanding of $300,000,000, with the option of Applicant to
increase the borrowing limit to $450,000,000 for the Borrowings. Applicant further
APPLICATION - 3 {00261226.DOCX; I }
anticipates that the term of the New Credit Agreement would extend through December
31,2024, with two one-year extension options available through December 31,2026.
Applicant plans to continue to use the New Credit Agreement primarily as a backup credit
facility to enhance the credit ratings for its commercial paper issuances, but may also
borrow directly under the New Credit Agreement as it deems necessary or desirable.
Applicant will file a copy of the New Credit Agreement with the Commission upon its
execution.
Applicant's short-term borrowing authorization under the Current Order
extends through November 2022. Applicant is seeking renewed borrowing authorization
under this Application through December 31, 2026 for the Borrowings, to cover the
anticipated term of the New Credit Agreement, including the two one-year extensions of
the New Credit Agreement.
Applicant is requesting that the Commission's existing short-term borrowing
authorization underthe Current Order remain in effect fora period of twenty-one (21)
days following the date of the Commission's order hereunder ("New Orde/'). The 21-day
period reflects the Commission's "petition for reconsideration" period that would apply to
the New Order under Section 331 .01 of the Rules. At the expiration of the 21-day petition
for reconsideration period, the Commission's authorization underthe Current Orderwould
automatically expire if no petitions for reconsideration are received. During the 21-day
petition for reconsideration period, Applicant's total authorization to issue short-term
borrowings under the Current Order and/or Borrowings under the New Order would
remain at $450,000,000 aggregate principal amount at any one time outstanding.
APPLICATION - 4 {00261226.DOCX; I }
(a) Amount of Securities
Applicant's Borrowings will not exceed a maximum $450,000,000
aggregate principal amount at any one time outstanding during the term of the
Commission's authorization hereunder. Applicant currently may borrow up to
$300,000,000 aggregate principal amount at any one time outstanding under the Existing
Credit Agreement, with the option to increase the borrowing limit to $450,000,000 during
the term of the Existing Credit Agreement. Applicant anticipates that the New Credit
Agreement will contain similar authorized borrowing limits for the Borrowings. Applicant
will provide written notice to the Commission in the event Applicant exercises its right to
increase the borrowing limit under the New Credit Agreement above the initial borrowing
limit of $300,000,000 for the Borrowings.
(b) lnterest Rate
Applicant anticipates that its Borrowings hereunder will include interest
rates that may be fixed or variable, and that the rates will be based on LIBOR or a
comparable successor rate, the applicable prime rate, or other rate established in the
borrowing arrangements, and may vary based upon Applicant's long-term issuer rating,
Applicant's corporate credit rating, or other applicable credit rating of Applicant issued by
a third-party credit rating organization.
(c)Date of lssue
Applicant requests authority to make Borrowings hereunder through
December 31, 2026. Applicant anticipates that the New Credit Agreement will allow
Borrowings for an initial five (5) year period, from December 2019 through December
2024, with the option of Applicant to extend the borrowing period for two one-year
APPLICATION.5 {00261226.DOCX; I }
extensions, to December 2026. Applicant will notify the Commission in writing if it elects
to exercise either of the one-year extensions to the New Credit Agreement beyond
December 2024. ln no event will the term of any of Applicant's Borrowings hereunder
extend beyond December 31,2026.
Applicant is requesting authorization to make the Borrowings as described
in this Application through December 31,2026, so long as Applicant maintains at least a
BBB- or higher corporate credit rating, as indicated by Standard & Poor's Ratings
Services, and a Baa3 or higher long-term issuer rating, as indicated by Moody's lnvestors'
Service, lnc. Applicant requests that if its rating falls below either such rating
("Downgrade"), its borrowing authority will continue for a period of 364 days from the date
of the Downgrade ("Continued Authorization Period"), provided that Applicant:
(1) Promptly notifies the Commission in writing of the Downgrade; and
(2) Files a supplemental application with the Commission within seven
(7) days after the Downgrade, requesting a supplemental order
("Supplemental Orde/') authorizing Applicant to continue to make
Borrowings as provided in the Commission's New Order,
notwithstanding the Downgrade.
All Borrowings by Applicant during the Continued Authorization Period, but
before the Commission's issuance of the Supplemental Order, would become due or
mature no later than the final date of the Continued Authorization Period.
(d) Date of Maturitv
The proposed Borrowings will have maturities of three years or less or will
be revolving Borrowings with a final maturity date no later than December 31, 2026.
APPLICATION - 6 {00261226.DOCX; l}
Applicant is seeking authorization to make Borrowings at any time hereunder so long as
the borrowings made or commercial paper issued mature no later than December 31,
2026.
(e) Votinq Privileqes
(3)
Not applicable.
(0 Call or Redemption Provisions
Not applicable.
(g) Sinkinq Fund or Other Provisions for Secured Pavment
Not applicable.
Manner of lssuance
(a) Method of Marketino
Applicant's line of credit arrangements are expected to include one or more
lead agents, and a number of additional banks as participating agents. The New Credit
Agreement would likely include the following fees for the lead agent(s) and participating
agents: (1) an up-front arrangement fee payable to the lead agent(s) totaling
approximately 0.10% to 0.20o/o of the principal amount committed, (2) up-front agent
participation fees payable to all participating agents totaling approximately 0.10% to
0.15o/o of the principal amount committed, (3) annual commitment agent facility fees
payable to all participating agents equal to approximately 0.15% to 0.25o/o of the principal
amount committed, and (4) annual administrative fees payable to the lead agent(s) of
approximately $15,000 to $30,000. The principal amount committed for purposes of
calculating the agent fees will be $300,000,000, unless the authorized borrowing amount
under the New Credit Agreement is increased as described above, up to a maximum of
APPLICATION . 7 {00261226.DOCX; I }
$450,000,000. Other expenses relating to the New Credit Agreement line of credit facility
are estimated to include: Applicant's legal fees of approximately $50,000, agent legal fees
of approximately $50,000, and miscellaneous expenses of approximately $25,000.
The above referenced New Credit Agreement fees are customary for the
market and will offset the agents' costs, including personnel time, travel and
administrative costs associated with negotiating and administering the unsecured lines of
credit. Applicant finds these fees are reasonable given the services provided by the
agents. With respect to commercial paper issuances, it is expected that the commercial
paper dealers or agents will sell such notes at a profit to them of not to exceed 118 of 1
percent of the principal amount of each note.
(b) Terms of Sale
See Section (3)(a) above, Method of Marketing.
(c) Underwritinq Discounts or Commissions
(A) See Section (3Xa) above, Method of Marketing, which
specifies the method of payment of fees to the financial or other institutions.
(B) lt is expected that the commercial paper dealers or agents will
sell such notes at a profit to them of notto exceed 118 of 1 percent of the principal amount
of each note.
(d)Sales Price
See Section (3Xc) above, Underwriting Discounts or Commissions.
(4) Purpose of lssuance
The net proceeds to be received by Applicant from the Borrowings
hereunder will be used to obtain temporary capital for: the acquisition of property; the
APPLICATION - 8 {00261226.DOCX; I }
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.
(s)State me nt qfExplanalian
Applicant believes and alleges the facts set forth in Section (4) above,
Purpose of lssuance, disclose that the proposed Borrowings are for a laMul object within
the corporate purposes of Applicant and compatible with the public interest, and 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.
(6) Financial Statements: Resolutions
Attached to this Application as Attachment I are Applicant's financial
statements dated as of June 30, 2019, consisting of its (A) Actual and Pro Forma Balance
Sheet and Notes to Financial Statements, (B) Statement of Capital Stock and Funded
Debt, (C) Contingent Liabilities, (D) Statement of Retained Earnings, and (E) Statement
of lncome.
A certified copy of the resolutions of Applicant's Directors authorizing the
Borrowings with respect to this Application will be filed with the Commission as
Attachment l! in this case no later than October 25,2019.
(71 Proposed Order
Attached to this Application as Attachment lll is a Proposed Order for
consideration by the Commission in this matter.
APPLICATION - 9 {00261226.DOCX; l}
(8) Notice of Application
Notice of this Application will be published in those newspapers in
Applicant's service territory listed in Rule 141(h) of the Rules within seven (7) days after
the date hereof.
Applicant will file as Exhibit A hereto copies of the New Credit Agreement
and other agreements for the Borrowings, including committed and uncommitted
unsecured lines of credit and other borrowing arrangements hereunder, when such
agreements are entered into.
PRAYER
WHEREFORE, Applicant respectfully requests that the ldaho Public Utilities
Commission issue its order authorizing Applicant to make up to $450,000,000 aggregate
principal amount at any one time outstanding of Borrowings from the service date of the
New Order through December 31, 2026, under the terms and conditions and for the
purposes set forth in this Application.
DATED at Boise, ldaho this 14th day of October,2019.
IDAHO POWER COMPANY
(coRPoRATE SEAL)R. Keen
. Vice President, Chief Financial Officer
and Treasurer
ATTEST:
ckA Ha ngton
Corporate S
ldaho Power Company
APPLICATION - 1O {00261226.DOCX; I }
ATTACHMENT r(A)
IDAHO POWER COMPANY
CONDENSED UNCONSOLIDATED BALANCE SHEET
AS OF JUNE 30,2019
ASSETS
Actual Adjustments
After
Adjustments
Electric Plant :
ln service (at original cost)................$6,197,160,124
(2,269,628,329)
$6,197,160,124
(2,265,628,329')Accumulated provision for depreciation.................
ln service - Net.
Construction work in progress.......
Held for future use................
Electric plant - Net...........
lnvestments and Other Property:
Nonutility property........
lnvestment in subsidiary companies
Other........
Total investments and other property
Current Assets:
Cash and cash equivalents.
Receivables:
Customer......
Accrued unbilled revenues............
Materials and supplies (at average cost)..
Fuel stock (at average cost)..
Prepayments
Taxes receivab|e...................
Regulatory assets
Other.........
Total current assets...........
Deferred Debits:
Company owned life insurance
Regulatory assets.................
Other...
Total deferred debits..................
Total......
1,311,176,505 1,311,176,505
$ 6,343,395,960 $ 450,000,000 $ 6,793,395,960
3,927,531,795
501,550,221
4,688,790
3,927,531,795
501,550,221
4,688,790
4,433,770,806 4,433,770,806
3,653,100
60,487,519
34,795,248
3,653,100
60,487,519
34,795,248
98,935,867 98,935,867
140,129,803
83,645,969
13,253,958
73,226,188
58,440,715
s5,973,330
16,898,389
53,659,567
4,284,863
450,000,000 590,129,803
83,645,969
13,253,958
73,226,188
58,440,715
55,973,330
16,898,389
53,659,567
4,284,863
499,512,782 450,000,000 949,512,782
59,725,654
1,195,079,118
56,371,733
59,725,654
1 ,1 95,079,1 1 8
56,371,733
Common Shares
Authorized
IDAHO POWER COMPANY
CONDENSED UNCONSOLIDATED BALANCE SHEET
AS OF June 30,2019
CAPITALIZATION AND LIABILITIES
Common Shares
Outstanding Actual Adjustments
After
Adjustments
Equity Capital:
Common stock.
50,000,000 39,1 50,81 2
Premium on capital stock.
Capital stock expense...................
Retained earnings..
Accummulated other comprehensive income.....
Totalequity capital.
Long-Term Debt:
First mortgage bonds
Pollution control revenue bonds
American Falls bond and Milner note guarantees ..
Unamortized discount on long-term debt (Dr).........
Total long-term debt..........
Current Liabilities:
Long-term debt due within one year......................
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 defened
investment tax credits .....
Deferred income taxes.........
Regulatory liabilities
Pension and other postretirement benefits......
Other.............
Total deferred credits........
Total
1,976,716,584 1 ,976,716,584
$ 6,343,395,960 $ +S0,000,000 $ 0,2SS,994,857
$97,877,030 $
712,257,435
(2,096,925)
I ,438,019,01 1
(21,867,672)
$97,877,030
712,257,435
(2,096,925)
1 ,438,019,01 1
(21,867,672)
2,224,188,879 2,224,188,879
1,665,000,000
170,460,000
19,885,000
(19,823.527\
1,665,000,000
170,460,000
19,885,000
(19,823,527\
1,835,521,473 1,835,521,473
80,530,092
17,830,498
25,744,402
23,599,208
39,434,599
67,458,005
37,401j03
14 ,97 1 ,117
450,000,000 450,000,000
80,530,092
17,830,498
25,744,402
23,599,208
39,434,599
67,458,005
14,971,117
306,969,024 450,000,000 719,567,921
92,789,836
747,110,984
658,020,855
433,725,123
45,069,786
92,789,836
747,110,984
658,020,855
433,725,123
45,069,786
Cash.............
IDAHO POWER COMPANY
STATEMENT OF ADJUSTING JOURNAL ENTRIES
As ofJune 30, 2019
Giving Effect to the Proposed issuance of
Short-term notes
Entrv No. 1
$ 450,000,000
Notes payable.$ 450,000,000
To record the proposed issuance of short-term
notes and the receipt of cash.
ATTACHMENT l(B)
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT
IDAHO POWER COMPANY
June 30, 2019
The following statement as to each class of the capital stock of applicant is as of June 30, 2019, 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 Sectron 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
June 30, 2019
The following statement as to funded debt of applicant is as of June 30, 2019, 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 o Series due 2022, dated as of April 13, 2012, due April 1,2022
2.50 % Series due 2023, dated as of April B, 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 [t/arch 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 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 % Series due 2037, dated as of October 18, 2007, due October 15, 2037
4.85 % 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 Yo 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 Jvlarch 1,2045
4.05 o/o Series due 2046, dated as of lvlarch 1 0, 2016, due March 1 , 2046
4.20 % 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), Trustees, presently on file with the Commission, under which said bonds were issued.
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT (Continued)
IDAHO POWER COMPANY
June 30, 2019
Pollution Control Revenue Bonds
(A) Variable Rate Series 2000 due 2027:
(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) 1.45% Series 2003 due2024:
(1) Description - Pollution Control Revenue Refunding Bonds, 1.45% Series 2003 due
2024, Counly 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) 1.70% Series 2006 due 2026:
(1) Description - Pollution Control Revenue Bonds, 1.70% 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.
ATTACHMENT t(C)
CONTINGENT LIABILITI ES
IDAHO POWER COMPANY
June 30,2019
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 $58.3 million at
June 30, 2019, representing IERCo's one-third share of BCC's total reclamation obligation of
$175.0 million. BCC has a reclamation trust fund set aside specifically for the purpose of paying
these reclamation costs. At June 30, 2019, the value of BCC's reclamation trust fund was $125.9
million. During the six months ended June 30, 2019, the reclamation trust fund made no
distributions 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 reseryes, 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,
ln May 2019, the state of Wyoming enacted legislation that limits a mine operator's maximum
amount of self-bonding. ldaho Power and the co-owners of BCC have 18 months to comply with
the new regulations, which would reduce the portion of ldaho Power's guarantee of reclamation
activities and obligations at BCC that ldaho Power is allowed to self-bond. As of the date of this
report, ldaho Power believes the cost of any insurance, third-party assurance, or additional
collateral that might be required for this guarantee due to the new law would be immaterial to the
financial statements.
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 June 30, 2019, management
believes the likelihood is remote that ldaho Power would be required to perform under such
indemnification provisions or othenruise incur any significant losses with respect to such
indemnification obligations. ldaho Power has not recorded any liability on its balance sheets 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, as
applicable, 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
CONTINGENT LIABILITIES (continued)
IDAHO POWER COMPANY
June 30, 2019
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 appropriate, recovery through the ratemaking process of costs incurred,
although there is no assurance that such recovery would be granted.
ldaho Power is 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, ldaho Power believes that resolution of existing claims will not have a
material adverse effect on its 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 l(D)
IDAHO POWER COMPANY
Condensed Statement of Unconsolidated Retained Earnings
and
Undistributed Subsidiary Earnings
For the Twelve Months Ended June 30, 2019
Retained Earninqs
Retained earnings (at the beginning of period) ......
Balance transferred from income.
Dividends received from subsidiary.....................
Tota|.............
Dividends:
Common Stock.
Total.
1,271,626,373
210,196,746
24,000,000.00
1 ,505,823,1 1 9
12s,828,535
125,828,535
$ t,379,994,584
73,619,882
8,404,545
(24,000,000)
$58,024,427
Retained earnings (at end of period)..
Undistributed Subsidiary Earninqs
Balance (at beginning of period).
Equity in earnings for the period
Dividends paid (Debit).
Balance (at end of period),.....
ATTACHMENT r(E)
IDAHO POWER COTMPANY
CONDENSED UNCONSOLIDATED STATEMENT OF INCOME
For the Twelve Months Ended June 30, 2019
Actual
1,383,967,973 $
289,800,167
156,644,289
38,951,442
369,923,316
40,873,562
159,779,680
7,399,993
34,633,791
20,600,847
(2,242,7e7)
36,578,621
(42,607,315)
5,405,098
1,115,740,694
268,227,279
25,388,632
8,404,545
(50,337)
4,821,199
38,564,039
306,791,318
75,868,750
8,749,500
808,1 35
3,796,726
9,363,433
98,586,544
10,396,517
88,190,027
$ 218,601 ,291
Adjustmelts
After
Adjustments
Operating Revenues
Operating Expenses:
Purchased power..........
Fuel expense
Power cost adjustment...............
Other operation and maintenance expense.
Energy effeciency programs.....
Depreciation expense...
Amortization of limited-term electric plant.....
Taxes other than income taxes..........
lncome taxes - Federal........
lncome taxes - Other...........
Provision for deferred income taxes....................,
Provision for deferred income taxes - Credit........
I nvestment 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..............
$ 1,383,967,973
289,800,167
156,644,289
38,951,442
362,027,917
40,873,562
159,779,680
7,399,993
34,633,791
20,600,847
(2,242,797)
36,578,621
(42,607,315)
5,405,098
1,107,845,295
276122,678
25,388,632
8,404,545
(50,337)
(3,074,200)
30,668,640
306,791 ,318
75,868,750
8,749,500
808,135
3,796,726
9,363,433
98,586,544
10,396,517
88,190,027
$Net 1ncome...........$ 218,601,291
ATTACHMENT II
A certified copy of the resolutions of Applicant's Directors authorizing the
Borrowings with respect to this Application will be filed with the Commission as
Attachment ll in this case no later than October 25, 2019.
ATTACHMENT III
BEFORE THE !DAHO PUBLIC UTILITIES COMMISSION
tN THE MATTER OF THE APPLTCATTON OF )
TDAHO POWER COMPANY FOR AN ORDER )CASE NO. IPC-E-19.
AUTHORIZING UP TO $45O,OOO,OOO
AGGREGATE PRINC!PAL AMOUNT AT
ANY ONE TIME OUTSTANDING OF
SHORT TO MID-TERM BORROW]NGS
PROPOSED ORDER
On October _, 2019, ldaho Power Company ("ldaho Power" or
"Company"), a public utility headquartered in Boise, ldaho, providing retailelectric service
in southern ldaho and eastern Oregon, filed with this Commission its application
("Application") pursuant to Chapter 9, Title 61 of the ldaho Code and Rules 141 through
150 of the Commission's Rules of Procedure, requesting an order authorizing ldaho
Power to make up to $450,000,000 aggregate principal amount of unsecured borrowings
consisting of (1) short-term borrowings for a term of one year or less and (2) midterm
borrowings for a term of over one year up to and including three years (together, the
"Borrowings"), under the terms set forth in the Application. ldaho Power's current short-
term borrowing authorization from the Commission was granted in Order No. 33375,
dated September 14,2015, in Case No. IPC-E-15-23 (the "Current Order") and extends
through November 2022. The Company is seeking to extend its borrowing authorization
from the Commission through December 31,2026 for the Borrowings, as set forth in its
Application. The Commission hereby adopts its Findings of Fact, Conclusions of Law
and Order approving the Application.
FINDINGS OF FACT
I
ldaho Powerwas incorporated on May 6, 1915 and migrated its state of
incorporation to the State of ldaho on June 30, 1989 and is duly qualified to do business
in the State of ldaho. ldaho Power's principa! office is located in Boise, ldaho.
)
)
)
)
)
PROPOSED ORDER - 1 {0026122'7.DOCX; t}
il
ldaho Power requests authorization to make Borrowings of up to
$450,000,000 aggregate principal amount at any one time outstanding through December
31,2026. ldaho Power states that the Borrowings will consist of (1) loans issued by
financial and other institutions and evidenced by unsecured notes or other evidence of
indebtedness of the Company and (2) unsecured promissory notes and commercial paper
of the Company to be issued by means of public or private placement through one or
more commercial paper dealers or agents, or directly by the Company.
lil
ldaho Power intends to secure commitments for new unsecured lines of
credit, or extensions of existing unsecured lines of credit, for the Borrowings. The
unsecured lines of credit may be obtained with several financial or other institutions,
directly by the Company or through an agent, when and if required by the Company's
then current financial requirements. Each individual line of credit commitment will provide
that up to a specific amount at any one time outstanding will be available to the Company
to draw upon for a fee to be determined by a percentage of the credit line available, credit
line utilization, compensating balance or combination thereof.
ldaho Power may also make arrangements for uncommitted credit facilities
under which unsecured lines of credit would be offered to the Company on an "as
available" basis and at negotiated interest rates. Such committed and uncommitted
Borrowings will be evidenced by the Company's unsecured promissory notes or other
evidence of indebtedness.
The Borrowings will include unsecured promissory notes to be issued and
sold by ldaho Power through one or more commercial paper dealers or agents, or directly
by the Company, up to the limits imposed by applicable statutes, rules or regulations.
Each note issued as commercial paper will be either discounted at the rate prevailing at
the time of issuance for commercial paper of comparable quality and maturity or will be
interest bearing to be paid at maturity. Each note issued as commercial paper will have
a fixed maturity and wil! contain no provision for automatic "roll over". The proposed
Borrowings may be revolving borrowings with a final maturity date no laterthan December
31, 2026. The Company is seeking authorization to make Borrowings at any time, so
PROPOSED ORDER - 2 {00261227.DOCX; I }
long as the borrowings made or commercial paper issued mature no later than December
31,2026.
IV
The Company's main existing shortterm borrowing agreement is its Credit
Agreement dated November 6,2015 ("Existing Credit Agreement"). The Existing Credit
Agreement provides committed lines of credit from participating banks in an aggregate
principal amount at any one time outstanding of $300,000,000, with the option of
Applicant to increase the borrowing limit to $450,000,000. The Existing Credit Agreement
is scheduled to expire on November 4, 2022 (the term of the Existing Credit Agreement
was previously extended from November 6, 2020 to November 4, 2022). The Existing
Credit Agreement is on file with the Commission in Case No. IPC-E-15-23.
The Company proposes to amend the Existing Credit Agreement or enter
into a new credit agreement in early December 2019 (in either case, the "New Credit
Agreement"). The Company anticipates that the New Credit Agreement will continue to
provide for committed lines of credit from participating banks in an aggregate principal
amount at any one time outstanding of $300,000,000, with the option of the Company to
increase the borrowing limit to $450,000,000. The Company further anticipates that the
term of the New Credit Agreement would extend through December 31,2024, with two
one-year extension options through December 31 ,2026. The Company plans to continue
to use the New Credit Agreement primarily as a backup credit facility to enhance the credit
ratings for its commercial paper issuances, but may also borrow directly under the New
Credit Agreement as it deems necessary or desirable. ldaho Power will file a copy of the
New Credit Agreement with the Commission upon its execution, and will provide written
notice to the Commission in the event that the Company elects to increase the borrowing
limit under the New Credit Agreement above $300,000,000, or extend the term of the
New Credit Agreement beyond December 31,2024.
V
ldaho Power's line of credit arrangements are expected to include one or
more lead agents, and a number of additional banks as participating agents. The
Company's proposed New Credit Agreement would likely include the following fees for
PROPOSED ORDER - 3 {00261227.DOCX; I }
the lead agent(s) and participating agents: (1) an up-front arrangement fee payable to the
lead agent(s) totaling approximately 0.10% to 0.20o/o of the principal amount committed,
(2) up-front agent participation fees payable to all participating agents totaling
approximately 0.10% to 0.15% of the principalamount committed, (3) annualcommitment
facility fees payable to all participating agents equal to approximately 0.15o/o to 0.25o/o ot
the principal amount committed, and (4) annual administrative fees payable to the lead
agent(s) of approximately $15,000 to $30,000. The principal amount committed for
purposes of calculating the agent fees will be $300,000,000, unless the authorized
borrowing amount under the New Credit Agreement is increased as described above, up
to a maximum of $450,000,000. Other expenses relating to the New Credit Agreement
are estimated to include: ldaho Power outside legalfees of approximately $50,000, agent
legal fees of approximately $50,000, and miscellaneous expenses of approximately
$25,000.
ldaho Power states that the above referenced New Credit Agreement fees
are customary in the market and will offset the agents' costs, including personnel time,
travel and administrative costs associated with negotiating and administering the New
Credit Agreement. With respect to commercial paper issuances, ldaho Power expects
that the commercial paper dealers or agents will sell such notes at a profit to them of not
to exceed 118 of 1 percent of the principal amount of each note.
VI
ldaho Power states the purpose for which the proposed Borrowings will be
made is to obtain temporary short-term capital for: the acquisition of property; the
construction, completion, extension or improvement of its facilities; the improvement or
maintenance of its service; the discharge or laMul refunding of its obligations; and for
general corporate purposes.
vil
ldaho Power requests authorization to make the Borrowings as described
in its Application through December 31 ,2026, so long as the Company maintains at least
a BBB- or higher corporate credit rating, as indicated by Standard & Poor's Ratings
Services, and a Baa3 or higher long-term issuer rating, as indicated by Moody's lnvestors'
Service, lnc. ldaho Power requests that if its rating falls below either such rating
PROPOSED ORDER - 4 {00261227.DOCX: t\
("Downgrade"), its borrowing authority would continue for a period of 364 days from the
date of the Downgrade ("Continued Authorization Period"), provided that the Company:
(1) Promptly notifies the Commission in writing of the Downgrade; and
(2) Files a supplemental application with the Commission within seven
(7) days after the Downgrade, requesting a supplemental order
("Supplemental Order") authorizing ldaho Power to continue to make
Borrowings as provided in the New Order, notwithstanding the
Downgrade.
Until ldaho Power receives the Supplemental Order, all Borrowings during
the Continued Authorization Period will become due or mature no later than the end of
the Continued Authorization Period.
CONCLUSIONS OF LAW
ldaho Power is an electrical corporation within the definition of ldaho Code
S 61-1 19 and is a public utility within the definition of ldaho Code S 61-129.
The ldaho Public Utilities Commission has jurisdiction over this matter
pursuant to the provisions of ldaho Code S 61-901 ef seg., and the Application reasonably
conforms to Rules 141 through 150 of the Commission's Rules of Procedures, IDAPA
31 .01 .01 .141-150.
The method of issuance is proper.
The general purposes to which the proceeds will be put are lawful purposes
under the Public Utility Law of the State of ldaho and are compatible with the public
interest. However, this general approval of the general purposes to which the proceeds
will be put is neither a finding of fact nor a conclusion of law that any particular
construction program of the Company which may be benefited by the approval of this
Application has been considered or approved by this Order, and this Order shall not be
construed to that effect.
The issuance of an Order authorizing the proposed financing does not
constitute agency determination/approval of the type of financing or the related costs for
ratemaking purposes, which determination the Commission expressly reserves until the
appropriate proceed ing.
All fees have been paid by ldaho Power in accordance with ldaho Code $
PROPOSED ORDER - 5 {00261227.DOCX; I }
61-905.
ORDER
lT lS THEREFORE ORDERED that Idaho Power Company is granted
authority to make up to $450,000,000 aggregate principal amount at any one time
outstanding of Borrowings through December 31,2026, under the terms and conditions
and for the purposes set forth in the Company's Application and this Order. As requested
in ldaho Power's Application, the Company's borrowing authority underthe Current Order
will remain in effect for a period of twenty-one (21) days following the date of this Order.
The 21-day period reflects the Commission's "petition for reconsideration" period that
applies to this Order under Section 331.01 of the Rules. At the expiration of the 21-day
petition for reconsideration period, the Commission's authorization under the Current
Order will automatically expire if no petitions for reconsideration are received. During the
21-day petition for reconsideration period, ldaho Power's total authorization to issue
Borrowings under the Current Order and/or this Order will remain at $450,000,000
aggregate principal amount at any one time outstanding.
lT lS FURTHER ORDERED that this authorization will remain in place
through December 31, 2026, provided that the Company maintains at least a BBB- or
higher corporate credit rating, as indicated by Standard & Poor's Ratings Services, and a
Baa3 or higher longterm issuer rating, as indicated by Moody's lnvestors'Service, lnc. lf
ldaho Power's rating falls below either such rating ("Downgrade"), its borrowing authority
under this Order will continue for a period of 364 days from the date of the Downgrade
("Continued Authorization Period"), provided that the Company:
(1) Promptly notifies the Commission in writing of the Downgrade; and
(2) Files a supplemental application with the Commission within seven (7) days
after the Downgrade, requesting a supplemental order ("Supplemental
Orded') authorizing ldaho Power to continue to make Borrowings as
provided in this Order, notwithstanding the Downgrade.
Until ldaho Power receives the Supplemental Order, all Borrowings during
the Continued Authorization Period will become due or mature no later than the end of
the Continued Authorization Period.
Subject to the foregoing ordering paragraph relating to a Downgrade, no
PROPOSED ORDER - 6 {00261227.DOCX; I }
additional authorization is required to carry out this transaction and no supplemental order
will be issued.
lT lS FURTHER ORDERED that the Company must notify the Commission
in writing if: (1 ) the Company will increase the credit limit under the New Credit Agreement
beyond $300,000,000; or (2) the Company will exercise either of the one-year extensions
under the New Credit Agreement beyond December 31, 2024. The Company must
provide such notice to the Commission at least seven (7) days before the referenced
event is to occur (or, if the required information is then unavailable, as soon as thereafter
as possible).
lT lS FURTHER ORDERED that ldaho Power file, as soon as available,
final exhibits as set forth in its Application.
1T IS FURTHER ORDERED that the foregoing authorization is without
prejudice to the regulatory authority of the Commission with respect to rates, utility capital
structure, service accounts, valuation, estimates for determination of cost 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 nothing in this Order and no provisions of
Chapter 9, Title 61, ldaho Code, or any act or deed done or performed in connection with
this Order shall be construed to obligate the State of ldaho to pay or guarantee in any
manner whatsoever any security authorized, issued, assumed, or guaranteed under the
provisions of Chapter 9, Title 61 ldaho Code.
lT lS 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 lS 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 ldaho Code S 61-626.
PROPOSED ORDER - 7 {0026t227.DOCX; l}
DONE by Order of the ldaho Public Utilities Commission at Boise, ldaho
this _ day of ,2019
PAUL KJELLANDER, PRESIDENT
KRISTINE RAPER, COMMISSIONER
ERIC ANDERSON, COMMISSIONER
ATTEST:
Diane M. Hanian
Commission Secretary
PROPOSED ORDER. 8 {00261227.DOCX; I }