20040622Final Order No 29531.pdf

Office of the Secretary
Service Date
June 22, 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. 29531
On April 12, 2004, 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 unsecured fixed or floating rate bonds, notes and other indebtedness and not
more than 3 000 000 shares of Avista s common stock. On May 12, 2004, the Commission
granted Avista s Application in Order No. 29499.
On May 16 , 2004, the Commission received a request from A vista to increase this
authority from 3 000 000 shares to 10 000 000 common shares and clarify its authority to issue
common shares. The amendments are needed to simplify pricing of debt if the convertible option
is used and to allow the independent issuance of common shares up to $250 000 000. The
Commission, having fully considered the applicable laws and rules, grants A vista s request.
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 be
exchangeable for up to 10 000 000 shares of A vista 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
more of the following purposes:
(a) The improvement or maintenance of its service;
(b) The discharge or lawful refunding of its obligations;
ORDER NO. 29531
(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
(d) Any other purpose approved by the Commission or authorized by law.
All tenDS 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 A vista 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 infonnation pertaining to the types of issuances to be made and the
expected tenDS as soon as practical prior to the issue, but no later than the date of issuance.
A vista acknowledges that for ratemaking purposes, the detennination 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 infonnational filings and the authority granted to
A vista 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 61-11 7, 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 confonns 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
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
ORDER NO. 29531
constitute agency detennination/approval of the type of financing or the related costs for
ratemaking purposes. The Commission does not have before it for detennination in this case
and, therefore, does not detennine the effect of issuance on rates to be charged by A vista 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 fonnal 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 of unsecured, fixed or floating rate bonds
notes and other evidences of indebtedness, which may be convertible into or exchangeable for
shares of A vista common stock, but also to offer, issue and sell up to and including the
000 000 shares of common stock in connection with any such convertible debt or independent of
any debt offering. In the event of a conversion from debt to equity, the maximum dollar amount of
the converted shares would have a limit of up to $250 000 000.
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 tenDS with Staff upon issuance. This
infonnational 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.
ORDER NO. 29531
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 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. 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-Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code
61-626.
ORDER NO. 29531
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this d.J..;...J.
day of June 2004.
MARSHA H. SMITH, COMMISSIONER
ENNIS S. HANSE , COMMISSIONER
ATTEST:
Jewell
ission Secretary
O:A VUU0402 In2
ORDER NO. 29531