20191108Decision Memo.pdf

RE
DF],CISION I\TE]\{OItANDT]M
TO COMMISSIONER KJELLANDE,R
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOSEPH TEITRY
TERRI CARLOCK
DATE: NOVEMBE,R 6.2019
IDAHO POWER COMPANY'S APPLICATON FOR AUTIIORITY
TO BORROW UP TO S45O,OOO,OOO IN SHORT-TERM DI]BT;
CASE NO. IPC.E-I9-33
On October 15, 2019. Idaho Power Company ("ldaho Power") applied for authority to
bonow shon-term and mid-tcrm debt up to $450.000,000 aggregate principal amount at any
time. Idaho Power's current short-term bonowing authority was granted by Order No, 33375,
dated September 14.2015. This requested authority could extend through December 31,2O26.
The required fees were included with the Application.
The borrowings under the requested authority may consist of: ( I ) loans evidenced by
unsecured notes or other evidence of indebtedness; and (2) unsecured promissory notes and
commercial paper. Any note issued will either be shon-terrn borrowings lbr one year or less, or
mid-term bonowings lbr a term of more than one l'ear but nol more than three years. Idaho
Porver intends to obtain new unsecured lines ofcredit or exlend cxisting lines ofcredit. Each
line of credit will provide a specific dollar amount be available to draw upon tbr a f'ee.
Uncommitted credit facilities may also be utilized on an "as available" basis at negotiated
interest rates. Idaho Power expects the initial crcdit agreement to bc fbr $300.000.000 with the
options to increase the linrit to $450.000.000. ldaho Porver will provide the Commission with
written notification in the event it increases the lirrit above $300.000,000.
Idaho Power requesls the short-term and mid-term borrowing authority be authorized
initially through f)ecember 31,2024, with the ability to extcnd the tirne period lbr 1wo one-ycar
extensions through December 31. 2026. ldaho Power will provide written notillcation to the
Commission il it elects to exercise either ofthe one-year extensions beyond December 31.2024.
ln no event will any borrowings under this authority extend beyond December 31.2026.
DECISIONMEMORNNDUM .I- NOVEMBER6.2OI9
Idaho Power requests this borrowing authority be conlinuing rhrough
December 31,2026, so long as ldaho Power's senior secured debt rating is investment
grade, at least BBB- or higher by Standard & Poor's and Baa3 or higher by Moody's Investors'
Service. If Idaho Power's rating falls below investmenl grade, Idaho Power will follow the
Commission approved Iiling process to establish its ongoing borrowing authority.
The net proceeds will be used to obtain temporary capital fbr: the acquisition of
property; the construction, completion, extension. or improvement of its lacilities; the
improvement or mainlenance of its service; the discharge or lawful refunding of its obligation:
and for general corporate purposes.
STAFF RECOMMENDATION
Staff recommends the Commission approve the proposed short-term and mid-term
bonowing authority up to $300,000,000, with the option to incrcase to $450,000,000 wirh
written notice provided.
Staff recommends the term be authorized through December 31,2024. with two optional
one-year extensions rlith writlen notice providcd.
Staff recommends the Commission order Idaho Power to nrake a filing supporting
continued borrowing authority ilthe ralings I'all below investment grade.
COMMISSION DECISION
Does the Commission approve Idaho Pou,er's request for short-term and mid-term
borrowing authority up to $300.000,000. with the option to increase to $450,000,000 with
uritten notice provided?
Does the Commission approve the borrowing authority.. for the period through
December 31,2024, with two optional one-year exlensions with written notice provided?
Does the Commission wish to order Idaho Power to make a filing suppofling conlinued
borrowing authority if the ratings fall below investrnent grade'?
seph-l'err1
udmcnros,/lPC-li-l 9-31 Dccision Nlcnxr
DECISION MEMORANDUM 1-NOVF]MBER 6,20I9