20040512Order No 29499.pdf

Office of the Secretary
Service Date
May 12, 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 DEBT SECURITIES NOT TO
EXCEED $250,000,000 AND NOT MORE THAN
000,000 SHARES OF COMMON STOCK.
CASE NO. A VU-04-
ORDER NO. 29499
On April 12, 2004, Avista Corporation (Avista) filed an Application with the Idaho
Public Utilities Commission for an Order authorizing A vista to offer, issue and sell up to
$250 000 000 of unsecured fixed or floating rate bonds, notes and other indebtedness and not more
than 3 000 000 shares of Avista s common stock. According to Avista s Application, the proceeds
will be used for general corporate purposes, to refinance debt maturities and to repay funds
borrowed under A vista credit facility. 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 subject to the reporting requirements discussed below.
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.
A vista requests authorization to offer, issue and sell up to $250 000 000 of unsecured
fixed or floating rate bonds, notes and other indebtedness, which may be converted into or
exchangeable for up to 3 000 000 shares of Avista s common stock, including, without limitation
any refunding, extension, renewal or replacement of any of the foregoing (hereinafter called the
Securities
A vista 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 moneys actually expended for these purposes from
income or from other moneys in the treasury not secured by or obtained from
the issue, assumption or guarantee of securities; or
ORDER NO. 29499
(d) Any other purpose approved by the Commission or authorized by law.
All terms of issuance will be negotiated at the time of offering. A vista will only enter
into transactions where the all-in cost is competitive with then-existing market prices of similar
transactions. No person has received or will be entitled to receive from Avista any fee for: (1)
services in connection with the consummation of the issuance and sale of the 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 securities.
A vista will file information pertaining to the types of issuances to be made and the
expected terms as soon as practical prior to the issue, but no later than the date of issuance. A vista
acknowledges that for ratemaking purposes, the determination of capital costs, capital structure
and any associated ratemaking decision is reserved for the appropriate proceeding.
As a condition of this approval, A vista shall file an annual status report with the
Commission showing all actual and proposed activity with this authority. A vista will file all final
documents from the issuances with the Commission. A vista will retain documentation showing
the reasonableness and cost effectiveness of all issues, refunding, replacements, conversions or
exchanges. These filings are informational filings and the authority granted to Avista under this
initial approval will be continual.
CONCLUSIONS OF LAW
The Commission finds that A vista is a gas corporation within the 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 31.01.01.141-150).
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
ORDER NO. 29499
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 9 61-905.
ORDER
IT IS THEREFORE ORDERED that A vista Corporation be, and the same hereby is
authorized to offer, issue and sell up to $250 000 000 in debt securities, which may be convertible
into or exchangeable for 3 000 000 shares of Avista s common stock, as described in the Application
filed on April 12, 2004.
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.
IT IS FURTHER ORDERED that Avista shall notify Staff 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 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
ORDER NO. 29499
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 the A vista 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-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 interlocutory Orders previously issued in this
Case No. A VU-04-2. Within seven (7) days after any person has petitioned for reconsideration
any other person may cross-petition for reconsideration. See Idaho Code 9 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this J-
-r1\.
day of May 2004.
S S. HANSEN, COMMISSIONER
ATTEST:
Commission Secretary
O:A VUUO402 In
ORDER NO. 29499