20160304final_order_no_33476.pdf

Office ofthe Secretary
Service Date
March 4.2016
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN TIlE MATTER OF PACIFICORP DBA )
ROCKY MOUNTAIN POWER’S )CASE NO.PAC-E-16-03
APPLICATiON FOR AN ORDER )
EXTENDING SHORT-TERM DEBT )ORDER NO.33476
AUTHORITY FOR FIVE YEARS.)
On January 26,2016.PacifiCorp dba Rocky Mountain Power filed an Application
with the Commission for an Order allowing it to extend short-term debt authorities granted in
Order No.32221 (Case No.PAC-E-1l-09)for five years,through April 30,2021.The other
terms and conditions of the previous debt authority would not change.Based on our review of
the record,we issue this Order approving the Application as noted below.
BACKGROUND
In February 2006.PacifiCorp applied to the Commission for authorization to borrow
no more than $1.5 billion aggregate principal in short-term debt through April 30,2011.The
Commission granted the Company’s 2006 request in Order No.29999.On March 9,2011.the
Company requested that the Commission allow it to extend that authority for an additional five
years.The Commission granted that request on the condition that the Company’s senior secured
debt be rated “investment grade.”Order No.32221 at 3-4.
THE CURRENT APPLICATION
With this Application,the Company seeks authority to extend these short-term debt
authorities for an additional five years—through April 30,2021.The extension would allow the
Company to issue short-term debt that 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 billion in aggregate principal amount outstanding at any one time
under one or more revolving credit agreements (Agreements);and (b)not more than $1.5 billion in
aggregate principal amount outstanding at any one time under other borrowing arrangements
(Other Arrangements);and (2)commercial paper (Paper)in the U.S.or overseas in an aggregate
principal amount not to exceed $1.5 billion outstanding at any one time;provided,further,that the
aggregate principal amounts outstanding under the Agreements,Other Arrangements and Paper not
exceed $1.5 billion at any one time.
ORDER NO.33476
PacifiCorp states that it currently has two revolving credit agreements totaling $1.2
billion.These credit agreements currently have final termination dates of June 28.2017 ($600
million of commitments)and March 27.2018 ($600 million of commitments).According to the
Company.the requested extension is essential to utilize these existing revolving credit agreements
and preserve its ability to issue commercial paper after April 30.2016.
The Company states that proceeds from the debt issuances will be utilized for general
utility purposes including improvement or maintenance of service or facilities,construction
purposes,acquisition of utility property,discharge or refunding of existing issuances or to
reimburse the Company’s treasury.
STAFF REVIEW
Staff recommended the Commission approve the Company’s requested shelf debt of
$1.5 billion through April 30,2021.Staff also recommended,as a condition of granting the
requested authority,the Commission require that PacifiCorp maintain a BBB-or higher senior
secured debt rating by Standard and Poor’s Rating Services,and a Baa3 or higher senior secured
debt rating by Moody’s Investor Services,Inc.(“investment grade”).Staff finally recommended
continuing the existing procedures should PacifiCorp’s senior secured debt ratings fall below the
investment grade levels.
Staff also observed that the Company’s other prior commitments and obligations
from other cases shall remain in effect.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
PaeifiCorp is an electrical corporation within the definition of Idaho Code §61-119
and a public utility within the definition of Idaho Code §6 1-129.The Idaho Public Utilities
Commission has jurisdiction over this matter pursuit to Title 61 of the Idaho Code.See Idaho
Code §61-901-902.
We find that an evidentiary hearing is unnecessary in this matter.The Application
conforms to the Commission’s Rules 141-146 (IDAPA 31.01.01.141-.146),and the Company
has paid all fees required by Idaho Code §6 1-905.Further,the proposed issuance is for a lawful
purpose,is within the Company’s corporate powers,and is compatible with the public interest.
We thus find that the Company’s Application should be approved as conditioned below.
As was the case in our previous extension of authority (Order 32221).the
Commission conditions the extension of debt authority granted in this Order upon PacifiCorp’s
ORDER NO.33476 2
maintenance of senior secured debt at an investment grade credit rating.Should the Company’s
senior secured debt be downgraded below investment grade subsequent to the issuance of the
debt securities authorized in this Order.PacifiCorp shall promptly notii the Commission in
writing,and file a supplemental application requesting that the Commission grant continuing
authority to issue debt securities and incur debt in the manner described in this Order.Finally.
the Commission finds that the funds obtained through the proposed extension of authority for
debt issuances will be used for general utility purposes including improvement or maintenance of
service or facilities,construction purposes,acquisition of utility property,discharge or refunding
of existing issuances or to reimburse the Company’s treasury.
The Commission’s approval of the extension is not a finding of fact or a conclusion
of law that the particular use to which these funds are to be put to use is approved by this Order.
The issuance of an Order authorizing an extension for 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 PacifiCorp dba Rocky Mountain Power’s
Application for authority to extend debt authorities granted in Order No.32221 (Case No.PAC
E-ll-09)for an additional five years,through April 30,2021,is approved.As requested in the
Application,the Company is authorized to issue and sell or exchange debt of up to $1.5 billion in
aggregate principal,and to enter into credit arrangements.
IT IS FURTHER ORDERED that the Company continue to maintain an investment
grade rating,BBB-or higher by Standard &Poor’s,and Baa3 or higher by Moody’s Investor
Services,for the Company’s senior secured debt.
IT IS FURTHER ORDERED that if the Company’s senior secured debt falls below
investment grade.PacifiCorp shall promptly notify the Commission in writing of the
Downgrade.
IT IS FURTHER ORDERED that should such a Downgrade occur,the Company
shall file a supplemental application with the Commission within seven (7)days after the
Downgrade requesting a supplemental Order from the Commission authorizing the Company to
ORDER NO.33476
continue to incur Debt as provided in this Order,notwithstanding the Downgrade.Until such a
supplemental Order is issued,any Debt incurred or issued by the Company during that period
will become due or mature no later than the final date of the Continued Authorization Period.
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
regulatory authority of this Commission with respect to 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.For ratemaking purposes,the Commission shall
reserve judgment on the reasonableness of the Company’s capital costs,comparative
underwriting analysis and any associated commissions and expenses incurred for any or all
security issuances.In its next general rate case filing,the Company will be required to show that
its capital cost,comparative underwriting analysis,embedded expenses,and methods of
securities marketing are just and reasonable.
IT IS FURTHER ORDERED that the 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 IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one days of the service date of this Order with regard to any
matter decided in this Order.Within seven days after any person has petitioned for
reconsideration,any other person may cross-petition for reconsideration.See Idaho Code §61-
626.
ORDER NO.33476 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of March 2016.
ATTEST:
SlONERKRISTINERAPER,CO
Jl €
D.Jewell
Commission Secretary
O:PAC-E-I 6-O3bk
ERIC ANDERSON,COMMISSIONER
ORDER NO.33476 5