20040315Final Order No 29447.pdf

Office of the Secretary
Service Date
March 15 2004
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
$62 000,000. CASE NO. AVU-04-
ORDER NO. 29447
On February 19, 2004, Avista Corporation (hereinafter called "Avista ) filed an
Application with the Idaho Public Utilities Commission for an Order authorizing the offering,
issuance and sale by the Applicant of up to and including $62 000 000 of subordinated
debentures, with fixed or variable rates, and any refunding, extension, renewal or replacement of
anyofthe foregoing (the "Subordinated Debentures
The Commission, having fully considered the Application and exhibits attached thereto
and all of the Commission s files and records pertaining to this Application, now makes the
following Findings of Fact and Conclusions of Law:
FINDINGS OF FACT
A vista 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 authority to offer, issue and sell up to and including $62 000 000 of
Subordinated Debentures at fixed or variable rates. The proceeds will be used to redeem the
outstanding amount of $60 million for the 7.875% Junior Subordinated Deferrable Interest
Debentures, Series A, due 2037 and the Avista Capital I 7.875% Trust Originated Preferred
Securities, Series A. The original securities were issued pursuant to Order No. 26669 dated
November 1 , 1996 in Case No. WWP-96-1. The covenants of the existing securities only
allow retirement of the securities with securities holding like subordination. These Subordinated
Debentures and the Trust Preferred Securities meet these covenant requirements and will allow
some financing flexibility for A vista.
The initial issuance will have a fixed interest rate not to exceed 7% for the first five
years, at which time the Preferred Securities can be redeemed or reissued with either a fixed or
floating interest rate. The entire term of the Subordinated Debentures may range from 30 to 40
ORDER NO. 29447
years. A vista also requests authority to refund, extend, renew or replace the proposed debentures
to fully utilize the flexible nature of these debentures.
According to the Application, the net proceeds will be used for (a) the improvement
or maintenance of its service; (b) the discharge or lawful refunding of its obligations; (c) the
reimbursement of moneys actually expended for said purposes from income or from other
moneys in the treasury not secured by or obtained from the issue, assumption or guarantee of
securities; or (d) any other purpose approved by the commission or authorized by law.
A vista affirms that no person has received or will be entitled to receive from the
Applicant any fee (1) for services in connection with the consummation of the issuance and sale
of the above-referenced securities, other than fees for underwriting, legal, accounting or similar
professional or technical services, or (2) for services in securing underwriters, sellers or
purchasers of the securities.
CONCLUSIONS OF LAW
The Commission finds that A vista 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 A vista for gas
or electric service to consumers in the State ofIdaho.
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.
Avista has paid all lawful fees as provided by Idaho Code ~ 61-905.
ORDER NO. 29447
ORDER
IT IS HEREBY ORDERED that Avista Corporation be, and the same hereby is
authorized to offer, issue and sell up to and including $62 000 000 in Subordinated Debentures as
described in the Application filed on February 19, 2004.
IT IS FURTHER ORDERED that Avista is hereby authorized to issue the Subordinated
Debentures 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.
IT IS FURTHER ORDERED that Avista shall file the terms of the proposed
Subordinated Debenture issuance(s) and any subsequent changes to the terms with Staff prior to
issuance. 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
and update when changes occur, the following:
(a) The "Report of Securities Issued"; and
(b) Verified copies of any Agreement entered into pursuant to this Order.
IT IS FURTHER ORDERED that Avista file a status report with this Commission at
least 30 days prior to the end of the fifth year when the terms of the securities may change. This
informational filing should include an analysis of any changes considered and the best available
estimates for the security terms. This informational filing shall be updated as terms change as long
as the securities are outstanding.
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 payor guarantee in any manner whatsoever any security
authorized, issued assumed or guaranteed under the provisions of Chapter 9, Title 61 , Idaho Code.
ORDER NO. 29447
IT IS FURTHER ORDERED that issuance ofthis Order does not constitute acceptance
of the A vista s exhibits or other material accompanying the Application for any purpose other than
the issuance ofthis 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. A VU-04-
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 imerlocutory Orders previously issued in
this Case No. A VU-04-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 1ST-A
day of March 2004.
~~AJ
MARSHA H. SMITH, COMMISSIONER
ENNIS S. HANSEN, OMMISSIONER
ATTEST:
Commission Secretary
0: AVUU040 1 In
ORDER NO. 29447