20231031Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
LEGAL
FROM:JOSEPH TERRY
CHRIS BURDIN
DATE:OCTOBER 31,2023
RE:IN THE MATTER OF THE APPLICATION OF IDAHO POWER
COMPANY FOR AN ORDER AUTHORIZING UP TO $600,000,000
AGGREGATE PRINCIPAL AMOUNT AT ANY ONE TIME
OUTSTANDING OF UNSECURED BORROWINGS;
CASE NO.IPC-E-23-26
On October 18,2023,Idaho Power Company ("Idaho Power")applied for authority to
borrow short-term and mid-term debt up to $600,000,000 aggregate principal amount at any one
time.Idaho Power's current short-term borrowingauthoritywas granted by Order No.34483,
dated November 14,2019.This requested authoritycould extend through December 31,2030.
The required fees were received on October 23,2023.
The borrowings under the requested authoritymay consist of 1)loans evidenced by
unsecured notes or other evidence of indebtedness and 2)unsecured promissory notes and
commercial paper.Any note issued will either be short-term borrowings for one year or less,or
mid-term borrowings for a term of more than one year but not more than three years.Idaho
Power intends to obtain new unsecured lines of credit or extend existing lines of credit.Each
line of credit will provide a specific dollar amount be available to draw upon for a fee.
Uncommitted credit facilities may also be utilized on an "as available"basis at negotiated
interest rates.Idaho Power expects the initial credit agreement to be for $400,000,000with the
option to increase the limit to $600,000,000.Idaho Power will provide the Commission with
written notification in the event it increases the limit above $400,000,000.
Idaho Power requests the short-term and mid-term borrowing authoritybe authorized
initially through December 31,2028,with the ability to extend the time period for two one-year
extensions through December 31,2030.Idaho Power will provide written notification to the
DECISION MEMORANDUM -1 -OCTOBER 31,2023
Commission if it elects to exercise either of the one-yearextensions beyond December 31,2028.
In no event will any borrowings under this authorityextend beyond December 31,2030.
Idaho Power requests this borrowing authorityto be continuing through December 31,
2030,so long as Idaho 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 investment grade,Idaho Power will follow the Commission approved
filing process to establish its ongoing borrowing authority.
The net proceeds will be used to obtain temporary 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 lawful refunding of its obligation;and for general
corporate purposes.The Company states the proposed increase in unsecured capacity reflects
increased operating costs since 2019 when the last authoritywas approved by the Commission.
Using the consumer price index,prices have increased by 14%since 2019,and while the CPI has
gone down in 2023,inflation is still significant,supporting the Company's reasoning for
increasing the amount of short-term debt capacity available.
STAFF RECOMMENDATION
Staff recommends the Commission approve the proposed short-term and mid-term
borrowingauthorityup to $400,000,000,with the option to increase to $600,000,000 with notice
provided.
Staff recommends the term be authorized through December 31,2028,with two optional
one-year extensions with notice provided.
Staff recommends the Commission order Idaho Power to make a filing supporting
continued borrowing authorityif the ratings fall below investment grade.
DECISION MEMORANDUM -2 -OCTOBER 31,2023
COMMISSION DECISION
Does the Commission approve Idaho Power's request for short-term and mid-term
borrowing authority up to $400,000,000,with the option to increase to $600,000,000with notice
provided?
Does the Commission approve the borrowing authorityfor the period through December
31,2028,with two optional one-year extensions with notice provided?
Does the Commission wish to order Idaho Power to make a filing supporting continued
borrowing authorityif the ratings fall below investment grade?
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Udmemos/IPC-E-23-26 _Decision Memo
DECISION MEMORANDUM -3 -OCTOBER 31,2023