20140729final_order_no_33083.pdf

Office of the Secretary
Service Date
July 29,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN )
POWER’S APPLICATION FOR )CASE NO.PAC-E-14-05
AUTHORITY TO:(1)ISSUE AND SELL OR )
EXCHANGE UP TO $1,575,000,000 OF )
DEBT,AND (2)ENTER INTO CREDIT )ORDER NO.33083
SUPPORT ARRANGMENTS )
On June 30,2014,PacifiCorp dba Rocky Mountain Power (Company)applied to the
Idaho Public Utilities Commission for an Order allowing it to:(1)issue and sell or exchange,in
one or more public offerings or private placements,fixed or floating rate debt (Debt)in the
aggregate principal amount not to exceed $1,575,000,000 or,if the Debt is issued at an original
issue discount,such greater amount as shall result in an aggregate offering price of not more than
$1,575,000,000,and (2)enter into letter of credit arrangements with one or more banks or such
other agreements or arrangements as may be necessary or appropriate,from time to time,to
provide additional credit support for the payment of the principal of,interest on and premium (if
any)on such Debt.Based on our review of the record,we issue this Order approving the
Application as noted below.
THE APPLICATION
The Company is an Oregon corporation that provides electric service as a public
utility to customers in Idaho,Utah,and Wyoming.
With this Application,the Company seeks authority to incur Debt up to
$1,575,000,000 aggregate principal amount at any one time.The Company also requests
authority to enter into letter of credit arrangements to provide additional credit support.The
Company asks that this additional Debt authority remain effective through June 30,2019,so long
as the Company’s bond ratings for senior secured debt remain investment grade;i.e.,BBB-or
higher by Standard &Poor’s Rating Services (“S&P”)and Baa3 or higher by Moody’s Investors’
Service,Inc.(“Moody’s”).The Company’s current senior secured debt ratings are A by S&P
and Al by Moody’s.
The Company explains that the requested authority will supplement the financing
flexibility previously authorized in Case No.PAC-E-10-02,Order No.31018,approving a $2
billion authority.The Company has issued $1 .875 billion under that authority.It does not
ORDER NO.33083 1
expect to use the remaining $125 million if the current request is granted,and says that
remaining authority could be withdrawn if the Commission so orders.
The Company states that if the Commission approves its Application,the securities
would be issued in one or more transactions and consist of securities issued or exchanged as
public or private placements in the form of secured or unsecured debt.The maturity,other terms
and interest rate for each issue would be determined at the time of issuance.The Company notes
that the issuance(s)may be at a fixed rate set at the time of issuance or variable interest rate
based on a published index of short-term rates such as Treasury bills,commercial paper or the
London Interbank Offered Rate (LIBOR).Fees will be charged based on the type of security
issued but are expected to average I %-3%of the outstanding balance.Any First Mortgage
Bonds issued will be issued under the PacifiCorp Mortgage.The Commission has previously
authorized the Company to incur the lien of the PacifiCorp Mortgage in Case No.U-1046-15,
Order No.22157.The variety of funding options requested will allow the Company to evaluate
the all-in cost of each option after considering all associated fees so the issuances result in
borrowings at lower costs.
The Company explains that the requested financing authority will provide funds for
one or more utility purposes.These include capital requirements for the following purposes:(1)
the acquisition of property,(2)the construction,completion,extension or improvement of utility
facilities,(3)the improvement of service,(4)the discharge or lawful refunding of obligations
which were incurred for utility purposes or (5)the reimbursement of the Company’s treasury for
funds used for the foregoing purposes.
STAFF REVIEW
Staff recommended the Commission approve the Company’s requested shelf
authority of $1.575 billion Debt for the period through June 30,2019.Staff notes that the
Company’s prior commitments and obligations from other cases shall remain in effect.For
example,the Company shall continue to apply the cost test described in Case No.PAC-E-99-3
and will not use foreign transactions for ratemaking unless and until the Company can show that
the all-in costs are not more than the all-in cost of similar domestic borrowings.The Company’s
commitments and obligations from Case No.PAC-E-10-02,Order No.31018,also remain in
effect.Staff also recommended,as a condition of granting the requested authority,the
Commission require the Company’s senior secured debt to be rated at investment grade,and that
ORDER NO.33083 2
the Company file Quarterly Financing Activity Reports and credit rating reports in this case to
the extent they are not filed in the MidAmerican Energy Holdings Company acquisition case,
Case No.PAC-E-05-8.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The Commission finds that the Company is an Oregon corporation that is qualified to
do business in Idaho.The Company is an electric corporation within the definition of Idaho
Code §6 1-119,and a public utility within the definition of Idaho Code §61-129.The
Commission has jurisdiction over this Application pursuant to the provisions of Idaho Code §
61-901,etseq.
The Commission finds that the Company’s Application should be approved.The
Company’s Application reasonably conforms to Rules 141 through 150 of the Commission’s
Rules of Procedure (IDAPA 31.01.01.141-150),and the Company has paid all fees required by
Idaho Code §61-905.Further,the proposed issuance is for a lawful purpose,is within the
Company’s corporate powers,and is compatible with the public interest.
The Commission’s approval of the issuance is not a finding of fact or a conclusion of
law that the particular use to which these funds are to be put is approved by this Order.The
issuance of an Order authorizing the proposed issuance does not constitute agency determination
or approval of the type of financing or the related costs for ratemaking purposes.The
Commission does not have before it for determination in this case and therefore does not
determine the effect of issuance on rates to be charged by the Company for electric service to
consumers in the State of Idaho.
ORDER
IT IS HEREBY ORDERED that the Company’s Application is approved.As
requested in the Application,the Company is authorized to issue and sell or exchange Debt in the
aggregate principal amount of up to $1,575,000,000,and to enter into such arrangements as may
be needed to provide additional credit support for the payment of the Debt.
IT IS FURTHER ORDERED that the authority approved by this Order shall remain
in effect through June 30,2019,so long as the Company maintains an investment grade rating
(i.e.,a senior secured debt rating of at least BBB-or higher by Standard &Poor’s Rating
Services and Baa3 or higher by Moody’s Investors’Service,Inc.).
ORDER NO.33083 3
IT IS FURTHER ORDERED that the Company will continue to meet the following
requirements:(1)keep its commitments and perform its duties as expressed in this Commission’s
prior orders;(2)file Quarterly Financing Activity Reports and credit rating reports with the
Commission,to the extent not otherwise filed in Case No.PAC-E-05-08;(3)meet the all-in cost
test commitment for foreign transactions;(4)provide the anticipated details of the transaction as
soon as possible prior to the issuance;and (5)file the “Report of Securities Issued,”and verified
copies of any credit arrangement entered into pursuant to this order as soon as they become
available.
IT IS FURTHER ORDERED that the issuance of this Order does not constitute
acceptance of the Company’s exhibits or other material accompanying this Application for any
purpose other than the issuance of this order.
IT IS FURTHER ORDERED that nothing in this Order or any act or deed performed
in connection with this order shall be construed to obligate the State of Idaho to pay or guarantee
in any manner whatsoever any security authorized,issued,assumed or guaranteed under the
provisions of this order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the
Commission’s regulatory authority regarding rates,service,accounts,evaluation estimates or
determination of costs or any other matter which may come before the Commission pursuant to
its jurisdiction and authority as provided by law.
THIS IS A FINAL ORDER.Any person interested in the Order (or in issues decided
by this Order)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 and in this case.Within seven (7)days
after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §61-626 and 62-6 19.
ORDER NO.33083 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of July 2014.
PAUL KJELLANDER,PRESIDENT
A
MACK A.REDFORD,COMMISSIONER
MARSHA H.SMITH,COMMISSIONER
ATTEST:
IN:.1)
7 L /
Jean D Jewell (
Cdmmission Secretary
O:PAC-E-I 4-O5kk
ORDER NO.33083 5