20110408final_order_no_32221.pdf

Offce of the Secretary
Service Date
April 8,2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER FOR AN
ORDER EXTENDING THE SHORT -TERM
DEBT AUTHORITIES GRATED IN CASE
NO. PAC-E-06-01
)
) CASE NO. PAC-E-ll-09
)
) ORDER NO. 32221
)
On March 9, 2011, PacifiCorp dba Rocky Mountain Power ("Rocky Mountain" or
"Company") fied an Application requesting a Commission Order extending the short-term debt
authorities previously granted to the Company in Case No. PAC-E-06-01 for five years or until
April 30, 2016.
THE APPLICATION
Rocky Mountain requests authority to extend the existing short-term debt authority
which currently expires April 30, 2011. See Order No. 29999. As a condition for the five-year
extension, Rocky Mountain's senior secured debt must maintain a credit rating of BBB- or
higher by Standard & Poor's Rating Services and a senior secured debt rating of Baa3 or higher
by Moody's Investor Services, Inc. The other terms and conditions wil not be changed.
The type of issue (promissory notes, revolving credit, commercial paper) and the
terms of issue, including interest rate, will be determined at the date of issue. The short-term
debt may include (1) unsecured short-term promissory notes to and borrow from U.S. or foreign
commercial banks (or their affiliates) under the following facilities: (a) not more than $1.5
bilion in aggregate principal amount outstanding at anyone time under one or more revolving
credit agreements (Agreements); and (b) not more than $1.5 bilion in aggregate principal
amount outstanding at anyone time under other borrowing arrangements (Other arangements);
and (2) commercial paper (Paper) in the U.S. or overseas in an aggregate principal amount not to
exceed $1.5 billion outstanding at anyone time; provided, fuher, that the aggregate principal
amounts outstanding under the Agreements, Other Arangements and Paper not exceed $1.5
bilion at anyone time.
Proceeds from the debt issuances wil be utilized for general utility puroses
including improvement or maintenance of service or facilities, constrction puroses, acquisition
ORDER NO. 32221 1
of utility proper, discharge or refuding of existing issuances or to reimburse the Company's
treasur.
STAFF REVIEW AND RECOMMENDATION
Commission Staff reviewed the Company's Application and accompanying
documents. Staff recommended that Rocky Mountain be allowed to extend its short-ter debt
authority until April 30, 2016. Staff affirmed that the reasonableness of the interest rate and all-
in-cost wil be evaluated as par of the review of issuance documents in this case and in futue
audits.
Staff recommended that if Rocky Mountain's senor secured debt ratings fall below
the investment grade levels referenced above (the "Downgrade") the Company's authority to
incur Debt not terinate. According to Staff, such authority should continue for a period of 180
days from the date of the Downgrade (the "Continued Authorization Period") provided that
Rocky Mountain complies with the following conditions:
(1) Promptly notify the Commssion in wrting ofthe Downgrade; and
(2) File a supplemental Application with the Commssion withn seven (7)
days . after the Downgrade requesting a supplemental Order
("Supplemental Order") authorizing Rocky Mountai to continue to incur
Debt as provided in ths Order, notwithstanding the Downgrade. Until
Rocky Mountain receives the Supplemental Order, any Debt incurred or
issued by Rocky Mountain durng the Continued Authorization Period wil
become due or matue no later than the final date of the Continued
Authorization Perod.
CONCLUSIONS OF LAW
Rocky Mountain is an electrcal corporation withn the definition of Idaho Code § 61-
119, and a public utility within the definition of Idaho Code § 61-129. The Idaho Public Utilities
Commission has jurisdiction over this matter pursuat to Title 61 of the Idaho Code, specifically
Idaho Code §§ 61-901 and 6l-902.
The Commission finds that an evidentiar hearng in ths matter is not required. The
Commission finds that Rocky Mountain's Application is within Rocky Mountain Power's
, corporate powers, and is generally compatible with the public interest. The method of issuance
is proper.
Ths general approval of the general purposes to which the proceeds wil be put is
neither a finding of fact nor a conclusion of law that any paricular program of the Company
ORDER NO. 32221 2
which may be benefited by the approval of this Application has been considered or approved by
this Order, and this Order shall not be constred to that effect. The issuance of this Order does
not constitute a Commssion deterination/approval of the type of financing or the related costs
for ratemaking puroses, which deterination the Commission expressly reserves until the
appropriate proceeding.
COMMISSION FINDINGS
The Commission has carefully reviewed Rocky Mountain's Application and Staffs
recommendation in this case. The Commssion approves the Company's request to extend,
through April 30, 2016, the time perod durng which it is peritted to issue short-ter debt
securties. The Commission finds that the reasonable and responsible issuance of debt securities
is an integral par of Rocky Mountai's ability to finance its ongoing operations and fulfill its
obligation to continue to provide reliable electrc serice to its ratepayers. However, the
Commission conditions the extension of debt authority granted in this Order upon Rocky
Mountain's senior secured debt maintaining an investment grade credit rating, BBB- or higher by
Standard & Poor's Rating Services and a senior secured debt rating of Baa or higher by
Moody's Investor Serices, Inc.
Subsequent to the issuance of the debt securties authorized in this Order, if the
Company's senior secured debt is downgraded below 'investment grade,' as the term is defined
above, Rocky Mountain shall promptly notify the Commission in wrting and file a Supplemeital
Application requesting that the Commission grant continuing authority to issue debt securties
and incur debt in the maner described in ths Order.
Finally, the Commission finds that the fuds obtained though the proposed sale of
the Bonds and/or Debt Securties wil be used for the acquisition of propery; the constrction,
completion, extension or improvement of facilities; the improvement or maintenance of its
servce; the discharge or lawful refuding of its obligations; and other general corporate
puroses.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain Power's Application to extend the
Commission's grant of authority to the Company to borrow $1.5 bilion in short-ter debt
instrents through April 30, 2016 is approved.
ORDER NO. 32221 3
IT is FURTHER ORDERED that the proposed credit rating condition requiring an
"investment grade" rating, BBB- or higher by Stadard & Poor's Rating Serices and Baa or
higher by Moody's Investor Services, Inc., for the Company's senior secured debt is adopted.
IT IS FURTHER ORDERED that if the Company's senior secured debt falls below
"investment grade," Rocky Mountain Power shall promptly notify the Commission in wrting of
the Downgrade.
IT IS FURTHER ORDERED that Rocky Mountain Power shall file a supplemental
Application with the Commission withn seven (7) days after the Downgrade requesting a
supplemental Order from the Commission authorizing the Company to continue to incur Debt as
provided in this Order, notwithstanding the Downgrade. Until Rocky Mountain receives the
Supplemental Order, any Debt incured or issued by Rocky Mountain durng the Continued
Authorization Period wil become due or matue no later than the final date of the Continued
Authorization Period.
IT IS FURTHER ORDERED that Rocky Mountain Power shall promptly fie a copy
of any Prospectus Supplement showing the ters of the sale, names of the purchasers or
underwters or agents with the Commssion after the issuance of each seres of Debt Securties.
The Company wil also file with the Commission a copy of any Prospectus and Pricing
Supplements it has filed with the Securties and Exchange Commission for any Bonds designated
as medium-ter notes.
IT IS FURTHER ORDERED that nothing in this Order or any act or deed performed
in connection with this Order shall be constred to obligate the State ofIdaho to payor guarantee
in any maner whatsoever any securty authorized, issued, assumed or guaranteed under the
provisions of this Order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the
regulatory authority of this Commission with respect to rates, serice, accounts, evaluation
estimates or deterination of costs or any other matter which may come before the Commission
pursuant to its jursdiction and authority as provided by law. For ratemakg puroses, the
Commission shall resere judgment on the reasonableness of the Company's capital costs,
comparative underwting analysis and any associated commissions and expenses incured for
any or all securty issuances. In its next general rate case filing, the Company wil be required to
ORDER NO. 32221 4
show that its capital cost, comparative underriting analysis, embedded expenses, and methods
of securities marketing are just and reasonable.
IT is FURTHER ORDERED that the issuance of ths Order does not constitute
acceptance of Rocky Mountain Power's exhibits or other materal accompanying ths
Application for any purose other than the issuace of ths Order.
THIS is A FINAL ORDER. Any person interested in ths Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order with regard to any
matter decided in ths Order. Withn seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code/ § 61-
626.
qlkDONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this l)
day of April 2011.
t.
~d~
MASHA H. SMITH, COMMISSIONER
ATTEST:~lJ~J D:Jeweli~
Commssion Secretar
ORDER NO. 32221 5