20040412Application.pdf

Avista Corp.
1411 East Mission POBdx3727
Spokane, Washington 99220-3727
Telephone [phone]
Toll Free 800-727-9170
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April 9, 2004
State of Idaho
Idaho Public Utilities Commission
Statehouse
Boise ID 83720
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Attention: Myrna Walters, Secretary
Transmitted herewith are one executed and two conformed copies of an application for approval of
security issuance. If other applicable data or documents become available, they will be forwarded to
your attention. Also enclosed is a diskette containing a proposed order. A check in the amount of
000.00, the maximum fee will come under separate cover.
The Company requests to receive an Order of Approval from the Commission by May 10, 2004.
When complete, please send two (2) executed copies of the Order of Approval to:
Diane C. Thoren
Assistant Treasurer
Avista Corporation
East 1411 Mission Avenue
Spokane W A 99202-2600
If any questions arise or additional information is needed, please do not hesitate to contact Paul
Kimball at 509-495-4584.
Sincerely,
Diane Thoren
Assistant Treasurer
Enclosures
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 Debt
Securities not to exceed $250,000,000 and not more 1
than 3,000.000 shares of Common Stock
CASE No.
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Application is hereby made to the Idaho Public Utilities Commission under the provisions of Sections
61-901 and 61-902 , Idaho Code (Laws of 1951, Chapter 143) and Rules 141 through 150 of the
Commission s Rules of Procedure, IDAPA 31.01.141-150, for an Order authorizing offering, issuance
and sale by Avista Corporation (hereinafter called "Applicant") of up to $250,000,000 of unsecured,
fixed or floating rate bonds, notes and other evidences of indebtedness, which may be convertible into
or exchangeable for shares of Applicant's common stock, and up to and including 3,000,000 shares of
the Applicant's common stock, including, without limitation, any refunding, extension, renewal or
replacement of any of the foregoing (the "Securities
The following information and specific exhibits are furnished in support thereof:
(a) Name and address of principal business office:
Avista Corporation
1411 East Mission Avenue
Spokane W A 99202-2600
Name of representative for service:
Diane C. Thoren, Assistant Treasurer
(b) State and date of incorporation:
Incorporated Washington Territory (now the State of Washington) on March 15, 1889. The term of
incorporation is perpetual.
States in which Qualified to do business:
Washington, Idaho, Montana, Oregon and California.
(c) General description of business. propertv. and territorv served:
The Applicant is a public utility which currently owns and operates property in Eastern Washington
Northern Idaho, Western Montana , Central & Southwest Oregon, and South Lake Tahoe,
California.
Applicant is engaged in the generation , transmission, distribution, and sale of electric energy,
which it sells at retail to approximately 325,000 residential, commercial, and industrial customers in
Eastern Washington and Northern Idaho, and at wholesale to public utilities, municipalities and
others. Its electric properties are operated as a unified system and are interconnected with
adjacent electric utilities. The electric energy sold by the Applicant is generated in power stations
which it owns in whole or in part or obtained by purchase or exchange from other utilities
governmental agencies and others.
Natural gas is distributed and sold to approximately 298,000 residential, commercial and industrial
customers in Eastern Washington, Northern Idaho, Central & Southwest Oregon, and South lake
Tahoe, California.
(d) Description of securities. indebtedness or liabilities:
Pursuant to Rule 142 of the Commission s Rules of Practice and Procedure, the Applicant hereby
Files the application filed with the Washington Utilities and Transportation Commission as Exhibit
1" in lieu of the application required by Rule 141. Applicant further states that:
(1) Applicant has published or will have published within seven days of the date of filing this
Application a notice in those newspapers listed in Rule 24.19 of the Rules of Practice and
Procedure of the Idaho Public Utilities Commission that are in general circulation in
Applicant's service area.
(2) Proposed Order of Applicant is filed herewith as Exhibit I
BEFORE THE
WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION
In the matter of the request of
A VISTA CORPORA nON
for an order establishing compliance
with Chapter 80.08 RCW
Docket No.
A vista Corporation (hereinafter called" Applicant") hereby requests the Washington
Utilities and Transportation Commission enter a written order establishing that the
proposed offering, issuance and sale by Applicant of up to and including $250,000,000 of
unsecured, fixed or floating rate bonds, notes and other evidences of indebtedness,
which may be convertible into or exchangeable for shares of Applicant's common stock
and up to and including 3,000,000 shares of Applicant's common stock, including,
without limitation, any refunding, extension, renewal or replacement of any of the
foregoing (the "Securities ) in compliance with the requirements of Chapter 80.08 RCW.
The following information is furnished in support of this application, in accordance with
the requirements of RCW 80.08.040 and WAC 480-146-290:
(1) A Description of the Purposes for Which the Issuance is Made, Including a
Certification By an Officer Authorized To Do So That the Proceeds From Any Such
Securities Are For One Or More of the Purposes Allowed By Chapter 80.08 RCW.
Applicant will use the funds from the proposed offerings, issuance and sale of Securities
for one or more of the following purposes: (a) The acquisition of property, or the
construction, completion, extension, or improvement of its facilities, or (b) the
improvement or maintenance of service, or (c) the issuance of stock dividends, or (d) the
discharge or refunding of its obligations, or (e) the reimbursement of moneys actually
expended from income or from the treasury of the Applicant to the extent permitted by
RCW 80.08.030, or (e) for other purposes permitted by law.
The Applicant will utilize the proceeds of the proposed debt offering for lawful purposes
as outlined in RCW 80.08.030. Specifically, the Applicant's capital expenditure program
requires a combination of internally generated cash and external financing. In addition
the Applicant has $28.5 million of debt maturities in the next 9 months beginning in
March 2004 that must be refinanced. The Applicant anticipates using the proceeds from
the issuance of the Securities to refinance debt maturities and to repay funds borrowed
under its corporate credit facility. The Applicant's capital expenditure program is
initially funded under its corporate credit facility. Capital expenditures are expected to
be $110 million and $120 million in 2004 and 2005, respectively.
The undersigned certifies that she has read the foregoing information with respect to
proposed use of funds and knows the contents thereof and that the same are true to the
best of her own knowledge or belief.
Done at Spokane, Washington this 9th day of April, 2004.
By: a--=.- c
Diane C. Thoren
Assistant Treasurer
(2) A Description of the Proposed Issuance Including the Terms of Financing.
The Applicant proposes to offer, issue and sell the Securities for purposes authorized by
law, in forms necessary or convenient to its operations. In the case of debt securities,
propose to issue a total amount of up to and including $250,000,000 and for terms which
may exceed 364 days, and in the case of common stock, Applicant proposes to issue a
total amount of up to and including 3,000,000 shares of Applicant's common stock.
While no specific transactions are presently pending under the proposed authority,
Applicant will only enter into transactions where the fees, interest rates and expenses
charged or incurred by Applicant in connection with the transactions, and any
refunding, extensions, renewals or replacements thereof, are competitive with then-
existing market prices for similar transactions.
Debt Securities: Debt securities may be issued in one or more series (or tranches within
a series), unsecured, long-term or short-term, bearing interest at fixed and/or variable
rates, and offered and sold by public offering and/or private placement, all as indicated
by market conditions prevailing from time to time. In addition, the debt securities may
be convertible into or exchangeable for shares of Applicant's authorized and unissued
common stock, as indicated by market conditions prevailing from time to time.
Debt securities may be sold to underwriters or through agents who in turn will offer the
debt securities to investors, or may be sold directly to investors either with or without
the assistance of a private placement agent (including placement agents who market the
debt securities on a reasonable effort basis). Debt securities may be registered under the
federal securities laws and may be listed on a securities exchange. Debt Securities may
be issued as part of a program on a continuous or periodic basis. Early redemption or
callable provisions will be determined at the time of issuance as indicated by market
conditions prevailing at such time.
If debt securities are sold through a placement agent, at least two agents will be used to
ensure competitive pricing. Based on market conditions prevailing at such time and in
consultation with the placement agents, Applicant will determine the interest rates
and/or interest rate formulas at which it would be willing to issue debt securities of
various maturities.
Market conditions change rapidly and continuously, and Applicant requests the
flexibility to issue debt securities that have not been specifically described herein, albeit
within the dollar limits herein requested. No later than the date of issuance, Applicant
will notify the Commission, by letter, of the nature of any such other types of debt
securities it has issued pursuant to the authority requested under this Application.
In all series' issuances, the terms for the sale of each series will be determined at the time
of issuance, and underwriters, agents, or other purchasers will be selected at that time.
The terms for the issuance and sale of each series and the names of the underwriters,
agents, or other purchasers will be supplied to the Commission at the time of issuance.
Applicant will use commercially reasonable efforts to comply with all deadlines and
otherwise provide such information to the Commission on a timely basis, but the
Commission s approval of this offer, issuance, and sale of Securities cannot be contingent
on such filings. Applicant acknowledges, however, that, for ratemaking purposes, the
Commission shall reserve judgment on the reasonableness of Applicant's capital costs,
capital structure, and associated commissions and expenses incurred for security
issuances.
If debt securities are convertible into or exchangeable for shares of Applicant's common
stock under certain circumstances, the conversion or exchange circumstances and the
amount and price of the conversion or exchange will be negotiated at the time of the
offering.
Common Stock: Applicant may offer from time to time up to 3,000,000 shares of its
common stock for various corporate purposes, including shares of common stock for
which any of the foregoing debt securities may be convertible or exchangeable.
Outstanding shares of Applicant's common stock are listed on the New York Stock
Exchange and the Pacific Stock Exchanges under ticker symbol AVA. The shares offered
hereby will be listed, subject to notice of issuance, on such exchanges. The reported last
sale price of the common stock on the New York Stock Exchange on March 25, 2004 was
$18.19 per share.
(3) Statement As To Why The Transaction Is In the Public Interest.
The issuance of the requested authority allows Applicant the maximum flexibility in
managing its funds and reducing borrowing costs. The proposed authority would allow
Applicant to better manage its debt and capital in the most efficient and cost effective
manner.Accordingly, Applicant believes the requested authority is in the public
interest.
(4) Text of a Draft Order Granting Applicant's Request for an Order, Including A Disk
Containing the Proposed Language in a Format Acceptable to the Commission.
See attached proposed order
Wherefore, the undersigned, an authorized agent of Applicant, requests that the
Washington Utilities and Transportation Commission issue its order affirming that
Applicant has complied with the requirements of RCW 80.08.040.
The undersigned certifies, under penalties of perjury as provided in RCW 9A.72.085, that
she has read the foregoing application and knows the contents thereof and that the same
are true to the best of her own knowledge or belief.
Done at Spokane, Washington this 9th day of April, 2004.
A VI ORA TION
By: - 0
Diane C. Thoren
Assistant Treasurer
BEFORE THE WASHINGTON STATE
UTILITIES AND TRANSPORTATION COMMISSION
In the Matter of the Application of DOCKET NO. UE-
A vista ORDER NO.
Petitioner
For an Order Establishing
Compliance with RCW 80.08.040,
with Respect to its Proposal to sell
Securities up to $250,000,000 and not
more than 3,000,000 shares of
Common Stock.
ORDER ESTABLISHING
COMPLIANCE WITH RCW
80.08.040
........... ......................
BACKGROUND
On April 9, 2004, A vista Corporation (A vista or the Company) filed a statement of its
plan to issue securities with the Washington Utilities and Transportation Commission
(Commission). The Company requested an order affirming that the Company has
complied with the requirements of RCW 80.08.040.
DISCUSSION
In its application, the Company proposes to offer, issuance and sale up to and including
$250,000,000 of unsecured, fixed or floating rate bonds, notes and other evidences of
indebtedness, which may be convertible into or exchangeable for shares of the
Company s common stock, and up to and including 3,000 000 shares of the Company
common stock, including, without limitation, any refunding, extension, renewal or
replacement of any of the foregoing (the "Securities ). The application is filed pursuant
to Chapter 80.08 RCW and the requirements of WAC 480-146-290.
According to the application and supporting materials filed by the Company, the
proceeds of the financing are for one or more of the purposes allowed by RCW 80.08.030.
Specifically, the Company s capital expenditure program requires a combination of
internally generated cash and external financing. In addition, the Company has $28.5
million of debt maturities in the next 9 months beginning in March 2004 that must be
refinanced. The Company anticipates using the proceeds from the issuance of the
Securities to refinance debt maturities and to repay funds borrowed under its corporate
credit facility. The Company s capital expenditure program is initially funded under its
corporate credit facility. Capital expenditures are expected to be $110 million and $120
million in 2004 and 2005, respectively.
The debt securities may be sold to underwriters or through agents who in turn will offer
the debt securities to investors, or may be sold directly to investors either with or
without the assistance of a private placement agent.
In all series' issuances, the terms for the sale of each series will be determined at the time
of issuance, and underwriters, agents, or other purchasers will be selected at that time.
The terms for the issuance and sale of each series and the names of the underwriters,
agents, or other purchasers will be supplied to the Commission at the time of issuance
In its application, the Company states that the requested authority allows greater
flexibility in managing its source of external funds in order to achieve lower financing
costs. Since this enables the Company to manage its debt and capital structure in a more
efficient manner, the Company asserts that its request is in the public interest.
FINDINGS
(1) Avista is engaged in the business of electric service within the state of
Washington. As a public service company, it is subject to the jurisdiction of the
Commission under the provisions of Chapter 80.08 RCW.
(2) As to form, the application herein meets the requirements of Chapter 80.08 RCW
and the rules and regulations of the Commission adopted pursuant thereto. Chapter 480-
146 WAC
(3) This matter was brought before the Commission at its regularly scheduled
meeting on May 12, 2004.
(4) The Company s application in this Docket contains: (a) a certification by an
authorized officer that the proceeds will be used for one or more purposes allowed by
RCW 80.08.030; (b) a description of the proposed issuance, including the terms of
financing, and (c) a statement as to why the proposed transaction(s) is in the public
interest.
ORDER
THE COMMISSION ORDERS:
(1) Avista Corporation has complied with the requirements of RCW 80.08.040 with
respect to the proposals set forth in its application to sell up to and including
$250,000,000 of debt securities, which may be convertible into or exchangeable for share
of the Company s common stock, and up to and including 3,000,000 share of the
Company s common stock.
(2) The Company is directed to file a Report of Securities Issued as required by WAC
480-146-340. The Company is also required to file verified copies of any agreement
entered into in connection with any transaction pursuant to this Order. Finally, the
Company shall file a verified statement setting forth in reasonable detail the disposition
of the proceeds of each offering made pursuant to this Order.
(3) This Order shall in no way affect the authority of this Commission over rates,
services, accounts, valuations, estimates, or determination of costs, or any matters
whatsoever that may come before it, nor shall anything herein be construed as
acquiescence in any estimate or determination of costs, or any valuation of property
claimed or asserted.
The Commissioners, having determined this filing complies with the requirements of
Chapter 80.08 RCW, directed the Secretary to enter this Order.
DATED at Olympia, Washington, and effective this 12th day of May, 2004.
WASHINGTON UTILITIES AND TRANSPORT nON COMMISSION
CAROLE J. WASHBURN, Secretary
Exhibit D-
PROPOSED ORDER OF APPLICANT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
AVISTA CORPORATION for an Order authorizingthe offering, issuance and sale of Debt
Securities not to exceed $250,000,000 and not more 1
than 3.000.000 shares of Common Stock
CASE NO.
ORDER NO.
On April 9, 2004, Avista Corporation (hereinafter called "Applicant") filed an Application with the Idaho
Public Utilities Commission for an Order authorizing the offering, issuance and sale by the Applicant of up
to $250,000,000 of unsecured, fixed or floating rate bonds, notes and other evidences of indebtedness,
which may be convertible into or exchangeable for shares of Applicant's common stock, and up to and
including 3,000,000 shares of Applicant's common stock, including, without limitation, any refunding,
extension , renewal or replacement of any of the foregoing (the "Securities
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
Applicant is a Washington corporation qualified to do business within the State of Idaho. The Applicant 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.
The Applicant proposes to receive authorization to offer, issue and sell the Securities, including, without
limitation , any refunding, extension, renewal or replacement of any of the Securities.
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.
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, private placement, 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 Applicant is a gas corporation within the definition of definition of Idaho
Code 9 61-117, an electric corporation within the definition of Idaho Code 9 61-119, and a public utility
within the definition of Idaho Code 9 61-129. Therefore, the Commission has jurisdiction over this
Application pursuant to the provisions of Idaho Code 9 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 31.01.141-150.
The Commission finds that the proposed issuance is for a lawful purpose and is within Applicant'
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 Applicant 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. Applicant has paid all lawful fees as provided by Idaho Code 9 61-905.
ORDER
IT IS HEREBY ORDERED that Applicant be, and the same hereby is, authorized to offer, issue
and sell up to and including $250,000,000 in debt securities, which may be convertible into or
exchangeable for shares of Applicant's common stock, and up to and including 3,000,000 shares of
Applicant's common stock, all as described in the Application filed on April 9, 2004.
IT IS FURTHER ORDERED that 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.
IT IS FURTHER ORDERED that Applicant shall file the terms of the proposed issuance(s) of the
Securities and any subsequent changes to the terms with Staff upon issuance. This informational filing
should be made seven (7) days, or as soon as possible, prior to the issuance.
IT IS FURTHER ORDERED that Applicant shall file, as soon as they become available and update
when changes occur, the following:
(a) The IIReport of Securities Issued"; and
(b) Verified copies of any Agreement entered into pursuant to this Order.
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.
IT IS FURTHER ORDERED that issuance of this Order does not constitute acceptance
of Applicant'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. A VU- -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. A VU- - 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 day of May 2004.
PAUK KJELLANDER, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
DENNIS S. HANSEN, OMMISSIONER
ATTEST:
Jean D. Jewell
Commission Secretary
WHEREFORE, the Applicant respectfully requests the Idaho Public Utilities Commission for an Order
authorizing Avista Corporation (hereinafter called "Applicant") to issue up to and including
$250,000,000 of unsecured, fixed or floating rate bonds, notes and other evidences of indebtedness,
which may be convertible into or exchangeable for shares of common stock, and up to 3,000,000
shares of the Applicant's common stock, including, without limitation, any refunding, extension, renewal
or replacement of any of the foregoing (the "Securities
Dated to Spokane, Washington, this 9th day of April , 2004.
AVISTA CORPORATION
By
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Diane C. Thoren , Assistant Treasurer
STATE OF WASHINGTON
County of Spokane
Diane C. Thoren, being duly sworn, under penalty of perjury deposes and says: That she is
Assistant Treasurer of AVISTA CORPORATION; that she has read the foregoing application and knows
the contents thereof; and that the same is true of her own knowledge and belief, and as to those matters
she believes them to be true.~.; C~
Diane C. Thoren, Assistant Treasurer
SUBSCRIBED AND SWORN to before me this
9th day of April, 2004.
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