28898.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF AVISTA CORPORATION FOR AN ORDER AUTHORIZING THE OFFERING, ISSUANCE AND SALE OF SECURITIES NOT TO EXCEED $250,000,000.
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CASE NO. AVU-U-01-2

ORDER NO. 28898

On November 1, 2001, Avista Corporation (Avista) filed an Application with the Idaho Public Utilities Commission for an Order authorizing Avista to offer, issue and sell up to $250,000,000 of certain secured or unsecured, fixed or floating rate bonds or notes. According to Avista’s Application, the proceeds of these bonds or notes will be used for refinancing current debt or for current and upcoming capital projects. The Commission, having fully considered the Application, attached exhibits, its files and records relating to this Application, and the applicable laws and rules, grants the Application.
FINDINGS OF FACT
Avista Corporation is a Washington corporation qualified to do business within the State of Idaho and is a public utility engaged in the generation, purchase, transmission, distribution and sale of electric energy and the purchase, distribution and sale of natural gas.
Avista requests authorization to offer, issue and sell certain secured or unsecured bonds, notes and other evidences of indebtedness, including, without limitation, assumption of any obligation or liability as guarantor, endorser, surety or otherwise in respect to the securities of any other person, firm, corporation, or affiliate of the Applicant, and any refunding, extension, renewal or replacement of any of the foregoing (hereinafter called the “Securities”). The terms of each issuance series will be determined at the time of issuance. The debt issuance(s) may be at a fixed or floating rate.
Avista generally states in its Application that the net proceeds will be used for one or more of the following purposes:
(a) the improvement or maintenance of its service;

(b) the discharge or lawful refunding of its obligations;

(c) the reimbursement of monies actually expended for these purposes from income or from other monies in the treasury not secured by or obtained from the issue, assumption or guarantee of securities; or

any other purpose approved by the Commission or authorized by law.
More specifically, Avista’s Application states that the Company has $114 million of debt maturities that must be refinanced in the next nine months beginning in December 2001. The Company’s Application indicates that it may utilize swap contracts to seek out better interest rates for ratepayers than it is currently paying. In addition, the Company states that the proceeds may be used to repay funds used for the Coyote Springs 2 project and other capital items.
Avista states while the specific terms of the transactions are presently being negotiated, the Company will only enter into transactions where the fees, interest rates and expenses are competitive with market prices for similar transactions.
CONCLUSIONS OF LAW
The Commission finds that Avista is a gas corporation within the definition of Idaho Code § 61-117, an electric corporation within the definition of Idaho Code § 61-119 and a public utility within the definition of Idaho Code § 61-129. Therefore, the Commission has jurisdiction over this Application pursuant to the provisions of Idaho Code § 61-901, et seq. The Commission further finds that the Application reasonably conforms to Rules 141 through 150 of the Commission’s Rules of Procedure (IDAPA 31.01.01.141-150).
The Commission finds that the proposed issuance is for a lawful purpose and is within Avista’s corporate powers. However, this is only a general approval and 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/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 Avista for gas or electric service to consumers in the State of Idaho. The Commission further finds that the proposed transaction is in the public interest and a formal hearing on this matter would serve no public purpose.
All lawful fees have been paid by Applicant as provided by Idaho Code § 61-905.

O R D E R
IT IS THEREFORE ORDERED that Avista Corporation be, and the same hereby is, authorized to offer, issue and sell up to $250,000,000 in Securities as described in the Application filed on November 1, 2001.
IT IS FURTHER ORDERED that the Applicant is hereby authorized to issue the Securities in the manner and for the purposes described in the Application with continuing authority to refund, extend, renew or replace the same without further order of the Commission, provided that the fees, interest rates and expenses charged or incurred in connection with any transactions entered into under the authority of this Order, and any refunding, extension, renewal or replacement thereof, are competitive with market prices for similar transactions. Avista shall informally notify the Staff as soon as practical prior to the issuance of the terms and conditions of the issue. This informational filing should be made seven (7) days, or as soon as possible, prior to the issuance.
IT IS FURTHER ORDERED that Avista shall file, as soon as they become available, the following:
(a) The “Report of Securities Issued” required by 18 CFR 34.10;
(b) Verified copies of any Agreement entered into pursuant to this Order; and
(c) An annual verified statement setting forth in reasonable detail the outstanding balances and disposition of the proceeds during each year of the Agreements.
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.
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 Avista’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 (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. AVUU01-2 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 or in interlocutory Orders previously issued in this Case No. AVUU-01-2. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this
day of November 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

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ORDER NO. 28898 1

Office of the Secretary
Service Date
November 27, 2001