20030310_402.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
WORKING FILE
FROM:TERRI CARLOCK
DATE:MARCH 7, 2003
RE:IDAHO POWER COMPANY'S REQUEST TO ISSUE AND SELL UP TO
$300 MILLION SHELF AUTHORITY FOR FIRST MORTGAGE BONDS,
SERIAL PREFERRED STOCK, WITHOUT PAR VALUE, AND DEBT
SECURITIES - CASE NO. IPC-03-
On March 3 2003, Idaho Power Company filed an Application requesting authority to
issue and sell from time to time (a) up to $300 000 000 aggregate principal amount of one or
more series of First Mortgage Bonds, which may be designated as secured medium-term notes
(b) up to $300 000 000 in gross proceeds to Idaho Power of one or more series of its Serial
Preferred Stock, Without Par Value, and (c) up to $300 000 000 aggregate principal amount of
one or more series of unsecured debt securities. The total outstanding combined principal
amount of the Bonds, the gross proceeds to Applicant of the Preferred Stock and the principal
amount of the Debt Securities to be issued and sold shall not exceed $300 000 000.
Idaho Power has filed a registration statement for the Bonds, Preferred Stock and Debt
Securities with the Securities and Exchange Commission pursuant to the shelf registration
provisions of Rule 415 of the Securities Act of 1933, as amended. This will enable Idaho Power
to take advantage of attractive market conditions efficiently and rapidly. Under the shelf
registration, Idaho Power will be able to issue the Bonds, Preferred Stock and/or Debt Securities
at different times without the necessity of filing a new registration statement. If approved, Idaho
Power requests that the shelf registration be effective for two years from the date of order.
The Bonds will be issued pursuant to one or more supplemental indentures to the
Mortgage and will be secured equally with the other First Mortgage Bonds ofldaho Power.
Interest rate hedging arrangements with respect to the Bonds, may be entered by Idaho Power
including treasury interest rate locks, treasury interest rate caps and/or treasury interest rate
collars.
DECISION MEMORANDUM - 1 -March 2003
The Bonds, Preferred Stock and/or Debt Securities may be sold by public sale or private
placement, directly by Idaho Power or through agents designated from time to time or through
underwriters or dealers. The type and terms of issuance will be determined at the time of
issuance. Any required Prospectuses will be filed prior to issuance. If any agents or any
underwriters are involved in the sale of the Bonds, Preferred Stock and/or Debt Securities, the
names of such agents or underwriters, the initial price to the public (if applicable), any applicable
commissions or discounts, and the net proceeds to the Applicant will be filed by the Applicant
with the Commission. If the Bonds are designated as medium-term notes and sold to an agent or
agents as principal, the names of the agents, the price paid by the agents, any applicable
commission or discount paid by the Applicant to the agents and the net proceeds to the Applicant
will be filed with the Commission. Idaho Power will file by letter seven days or as soon as
possible prior to issuance the terms of issuance. All final documents will also be filed.
Net proceeds from the sale of the Bonds, Preferred Stock and/or Debt Securities will be
used 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 obligations; and for general corporate purposes. To the extent that the proceeds from the sale
of the Bonds, Preferred Stock or Debt Securities are not immediately so used, they will be
temporarily invested in short-term discounted or interest-bearing obligations.
The capital structure for Idaho Power Company as of September 30, 2002 was 44.
debt, 3.6% preferred stock and 51.9% common equity. The combination of issuance with a shelf
registration is unknown. However, if the full $300 million were issued as debt immediately, the
pro-forma capital structure would be 54% debt, 3% preferred stock and 43% common equity.
STAFF RECOMMENDATION
Staff recommends approval of the $300 million shelf registration for two years.
COMMISSION DECISION
Does the Commission approve the $300 million shelf registration?
Should the approval be for the requested two-year period?
Terri Carlock
TC\ipce03 .3ShelDOOM.DM3.7 .
DECISION MEMORANDUM - 2 -March 7, 2003