20041129Final Order No 29643.pdf

Office of the Secretary
Service Date
November 29 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
VISTA CORP. FOR AN ORDER MODIFYING
EXISTING AUTHORITY TO ALLOW THE
ISSUANCE OF SECURED OBLIGATIONS IN
CONNECTION WITH CERTAIN $88,850,000
UNSECURED MEDIUM-TERM NOTES
CURRENTLY OUTSTANDING AND CERTAIN
UNSECURED OBLIGATIONS RELATED TO
CERTAIN $83,700,000 TAX-EXEMPT DEBTSECURITIES
CASE NO. A VU-04-
ORDER NO. 29643
On November 12, 2004, Avista Corporation filed a revised Application to modify
two previous Commission Orders authorizing the Company s issuance of debt securities. Order
No. 27153 issued in Case No. WWP-97-1 and Order No. 28899 issued in Case No. A VU-
01-, authorized Avista s issuance of certain unsecured debt securities. Pursuant to authority
granted to it in Order No. 27153 , Avista issued Series C Medium-Term Notes, and under its
authority granted in Order No. 28899, Avista issued securities in connection with the refunding
of Colstrip Pollution Control Bonds issued by the City of Forsythe, Montana. Provisions of the
Series C Notes and the conditions in the bond insurance agreement currently limit the amount of
secured debt A vista can issue. By its Application to modify the previous Orders, A vista
proposes to secure these debt obligations after receiving approval from the Commission to
remove the negative covenants restricting the issuance of additional secured debt. Specifically,
A vista proposes to issue secured obligations (i.e. first mortgage bonds issued under A vista
Mortgage and Deed of Trust, dated as of June 1 , 1939) to the trustee for holders of A vista
Medium-Term Notes, Series C, issued under Order No. 27153 (the Series C Notes), and initially
to the bond insurer, but ultimately to the trustee for the benefit of holders, of those certain City of
Forsyth, Montana, Pollution Control Revenue Refunding Bonds (Avista Corporation Colstrip
Project) Series 1999A and Series 1999B, issued under Order No. 28899 (the Colstrip Pollution
Control Bonds).
ORDER NO. 29643
ORDER NO. 27153 APPROVING SERIES C NOTES
In October 1997 , A vista received approval from the Commission to issue up to
$250 000 000 of debt securities (and to refinance $85 000 000 of securities related to certain tax-
exempt debt securities, which was later supplemented by the authority granted in Order No.
28899). Avista issued $109 000 000 of Series C Notes under the authority granted in Order No.
27153. $88 850 000 of Series C Notes are presently outstanding. The Series C Notes are
unsecured obligations of A vista. Certain provisions of the Series C Notes limit the amount of
secured debt Avista can issue, unless it secures the Series C Notes.
ORDER NO. 28899 AUTHORIZING COLSTRIP
POLLUTION CONTROL BONDS
In November 2001 , Avista received approval from the Commission to issue up to
$83 700 000 of securities in connection with the refunding of certain pollution control bonds
issued by the City of Forsyth, Montana, the proceeds of which had been loaned to Avista.
Avista issued $83 700 000 of securities related to the Colstrip Pollution Control Bonds under
the authority granted in Order No. 28899. $83 700 000 of Colstrip Pollution Control Bonds are
presently outstanding. The securities issued by A vista related to the Colstrip Pollution Control
Bonds are unsecured obligations of A vista.Conditions in the bond insurance agreement
pursuant to which bond insurance policies for the Colstrip Pollution Control Bonds were issued
similarly limit the amount of secured debt A vista can issue, unless it secures its obligations
related to the Colstrip Pollution Control Bonds.
Because of the anticipated time schedule and steps necessary to secure its
obligations related to the Colstrip Pollution Control Bonds by delivery of its first mortgage
bonds to the trustee for the holders of such bonds, A vista believes that it would be prudent, as
an initial interim step, to deliver first mortgage bonds directly to the bond insurer. This interim
step will operate to eliminate the negative covenant contained in the bond insurance agreement
until such time as A vista is able to deliver its first mortgage bonds to the trustee for the benefit
of the holders of the Colstrip Pollution Control Bonds. In this way, A vista hopes to pursue the
present financial market opportunities, while it works to satisfy the necessary steps for delivery
of first mortgage bonds to the trustee for the holders of the Colstrip Pollution Control Bonds.
Any first mortgage bonds delivered to the bond insurer would be returned and surrendered upon
ORDER NO. 29643
the issuance and delivery of first mortgage bonds to the trustee for the benefit of the holders of
such bonds.
Based on the record in this case, the Commission finds it prudent and reasonable to
modify Order No. 28899 issued in Case No. A VU-01-3 and Order No. 27153 issued in Case
No. WWP-97-1 as requested by Avista. Accordingly, this Order is issued to amend the
previous Orders to allow A vista to issue secured obligations and remove the negative covenants
contained in the conditions of the Series C Notes and the bond insurance agreement for the
Colstrip Pollution Control Bond.
ORDER
IT IS HEREBY ORDERED that Order No. 28899 issued in Case No. A VU-01-
and Order No. 27153 issued in Case No. WWP-97-1 are amended to allow Avista Corporation
to issue secured obligations (i., first mortgage bonds issued under the Applicants Mortgage and
Deed of Trust, dated as of June 1 , 1939) in order to remove the negative covenants contained in
the conditions of the Series C Notes and the bond insurance agreement of the Colstrip Pollution
Control Bonds.
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 9 61-
626.
ORDER NO. 29643
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this c2 -fA
day of November 2003.
Out of the Office on this Date
MARSHA H. SMITH, COMMISSIONER
, COMMISSIONER
ATTEST:
D. Jewell
mmission Secretary
bls/O:A VUU0403
ORDER NO. 29643