20230329Final_Order_No_35723.pdf

ORDER NO. 35723 1

Office of the Secretary
Service Date
March 29, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF ROCKY
MOUNTAIN POWER’S APPLICATION
FOR AUTHORITY TO ISSUE AND SELL
OR EXCHANGE NOT MORE THAN
$5,000,000,000 OF DEBT, AND ENTER
INTO CREDIT SUPPORT
ARRANGEMENTS
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CASE NO. PAC-E-23-03

ORDER NO. 35723

On February 27, 2023, PacifiCorp, d/b/a Rocky Mountain Power (“Company”) applied
under Idaho Code §§ 61-901, et seq., for authority to issue and sell or exchange not more than $5.0
billion aggregate principal amount at any one time and enter into letters of credit to provide
additional credit support. Application, 1. This requested authority would increase the authority of
$3.0 billion pursuant to Order No. 34834 and remain in effect through September 30, 2028. Id. at
2. The Company requested an order be issued by March 31, 2023. Id. The Company represented
that the additional credit will be used 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.” Id. at 9
At the Commission’s March 21, 2023, Decision Meeting, Staff recommended the
Commission approve the requested authority to increase and extend the Company’s credit
authority.
Based on our review of the record, we issue this Order approving the Application as
discussed below.
THE APPLICATION
The Company seeks authority to increase and extend its current authority to borrow up to
$5.0 billion, for a period of five years. Id. at 1-2.
To obtain the increase in authority and five-year extension for borrowing, the Company’s
senior debt must maintain a BBB- or higher senior secured debt rating, as indicated by Standard
and Poor’s Rating Services (“Standard and Poor’s”), and a Baa3 or higher senior secured debt
ORDER NO. 35723 2
rating, as indicated by Moody’s Investor Services Inc. (“Moody’s”).1 Id. at 1. The Company
represents that the “issuances will be primarily fixed-rate First Mortgage Bonds” but would like
flexibility for a “variety of borrowing options.” Id. at 7. The maturity, interest rate, and other terms
are expected to be set at the time of issuance. Id. at 4.
STAFF REVIEW AND RECOMMENDATION
Staff recommended the Commission approve the Company’s request. Staff’s March 21,
2023 Decision Memorandum. Staff stated that the “foreign transactions will not be utilized for
ratemaking unless, and until, PacifiCorp can show that the all-in costs are not greater than the all-
in costs of similar domestic borrowings.” Id. at 2. Staff recommended that the Company follow
the commitments and terms from Case No. PAC-E-14-05, Order No. 33083. Id. This includes, but
is not limited to, that the Company’s senior secured debt rating remain at investment grade, and
the Company will follow the established procedure of notification if the ratings are downgraded;
and the Company will file quarterly financing activity reports and credit ratings reports, to the
extent that they are not filed with the MEHC Acquisition Case (Case No. PAC-E-05-08, Order
No. 29998). Id.
FINDINGS AND DISCUSSION
The Company is an electrical corporation and public utility in Idaho as defined in Idaho
Code §§ 61-119 and 61-129. The Commission has jurisdiction over the Application under Idaho
Code §§ 61-901, et seq. We find that the proposed transaction is in the public interest and a formal
hearing on this matter is not required. Further, we find that the proposed issuance is for a lawful
purpose and is within the Company’s corporate powers, that the Application reasonably conforms
to Rules 141 through 150 of the Commission’s Rules of Procedure, IDAPA 31.01.01.141-150, and
that the Company has paid all fees due under Idaho Code § 61-905. Accordingly, we find that the
Application should be approved, and the proposed financing should be allowed, conditional on the

1 “BBB- or higher senior secured debt rating refers to “issuers and issues with relatively high levels of creditworthiness
and credit quality. . .. In S&P Global Ratings long-term rating scale, issuers and debt issues that receive a rating of
‘BBB-’ or above are generally considered by regulators and market participants to be “investment-grade,” while those
that receive a rating lower than ‘BBB-’ are generally considered to be “speculative-grade.” Guide to Credit Rating
Essentials, p. 9. Standard & Poor’s. (Accessed December 14, 2022.)
https://www.spglobal.com/ratings/_division-assets/pdfs/guide_to_credit_rating_essentials_digital.pdf Moody’s Baa
ratings are defined as “obligations rated Baa are subject to moderate credit risk. They are considered medium-grade
and as such may possess speculative characteristics. . . . Moody’s appends numerical modifiers 1, 2, and 3 to each
generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end
of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of that generic rating category.” Moody’s Rating Scale and Definitions, p. 1. Moody’s (Accessed March
23, 2023.) https://www.moodys.com/sites/products/productattachments/ap075378_1_1408_ki.pdf
ORDER NO. 35723 3
Company maintaining the investment grade ratings requirement specified above and in prior
orders.
The Commission’s Order approving the proposed financing and the general purposes to
which the proceeds may be put is not a determination that the Commission approves of the
particular use to which these funds will be put. The Order also is not a Commission determination
or approval of the type of financing or the related costs for ratemaking purposes. The Commission
does not have before it for determination, and so does not determine, the effect of the proposed
transaction on rates the Company will charge for electric service.
O R D E R
IT IS HEREBY ORDERED that the Company’s Application to increase and extend its
current authority to borrow up to $5.0 billion, for a five-year period, is granted.
IT IS FURTHER ORDERED that the Company must continue to file quarterly reports with
the Commission setting forth the date of issuance, principal amount, interest rate, date of maturity
and identity of payee for all promissory notes issued during the quarter. The Company must
continue to file its capitalization ratios with the quarterly reports.
IT IS FURTHER ORDERED that the Company continue to maintain investment grade
ratings by Standard and Poor’s and by Moody’s Investor Services for the Company’s senior
secured debt.
IT IS FURTHER ORDERED that if the Company’s senior secured debt rating falls below
investment grade, the Company 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 days after the downgrade requesting
a supplemental order (“Supplemental Order”) authorizing the Company to continue to incur debt
as provided in this Order, despite the downgrade. Until the Company receives the Supplemental
Order, any debt incurred or issued by the Company during the Continued Authorization Period
will become due or mature no later than the final date of the Continued Authorization Period.
IT IS FURTHER ORDERED that the foregoing authorization is without prejudice to the
regulatory authority of the Commission with respect to rates, utility capital structure, service
accounts, valuation, estimates for determination of cost or any other matter which may come before
this Commission pursuant to its jurisdiction and authority as provided by law.
ORDER NO. 35723 4
IT IS FURTHER ORDERED that nothing in this Order and no provisions of Chapter 9, Title
61, Idaho Code, or any act or deed done or performed in connection therewith 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 Chapter 9, Title 61, Idaho Code.
IT IS FURTHER ORDERED that issuance of this Order does not constitute acceptance of
the Company’s exhibits or other materials 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 (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 29th day of
March 2023.

ERIC ANDERSON, PRESIDENT

JOHN R. HAMMOND, JR., COMMISSIONER

EDWARD LODGE, COMMISSIONER
ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\PAC-E-23-03 securities\orders\PACE2303_final_cs.docx