20051020final order no 29896.pdf

Office of the Secretary
Service Date
October 20, 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION FOR AN
ORDER AUTHORIZING THE OFFERING,
ISSUANCE AND SALE OF SECURITIES
NOT TO EXCEED $100,000,000
ORDER NO. 29896
CASE NO. A VU-05-
On September 21 , 2005 , Avista Corporation (Avista) filed an Application requesting
authority to offer, issue and sell up to and including $100 000 000 of secured or unsecured, fixed
or floating rate bonds, notes or other form of indebtedness. According to A vista s Application
the proceeds will be used for the following purposes: (a) acquisition of property, or the
construction, completion, extension, or improvement of facilities; (b) the improvement or
maintenance of service; (c) the issuance of stock dividends; (d) the discharge or refunding of its
obligations; or (e) the discharge or reimbursement of treasury for expenditures permitted by law.
More specifically, Avista expects to refinance $50 million of debt maturities due over the 12-
month period beginning November 2005 and $56 million associated with the Rathdrum
generating facility lease.
The interest rate, depending on market conditions at the time of issuance, is expected
not to exceed 7%. The term of the security(ies) is expected to be 10 to 40 years. A vista also
requests authority to refund, extend, renew or replace the proposed security(ies) to allow the
greatest flexibility.
The proposed issuance and redemptions provide an opportunity for A vista to reduce
borrowing costs and to increase flexibility with future refinance options. Staff recommended
approval of the requested debt authority, but believed the stated possible purposes for use of the
proceeds is too broad. Although use of the proceeds to refund $50 million debt on the 12-month
period beginning November 2005 and the funding of costs associated with the Rathdrum
generation facility are reasonable, Staff recommended the authority not be approved for purposes
of funding the issuance of stock dividends or annual maintenance expenses.
Staff recommended A vista be required to file an annual status report with the
Commission showing all actual and proposed activity with this authority and to meet annually
with Staff to discuss Avista s current financing status. Staff also recommended that Avista be
ORDER NO. 29896
required to file term sheets prior to refunding, extending, renewing or replacing the proposed
security(ies) as a condition that the authority under this initial approval be continuing.
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 will file all final documents from the issuances with the Commission. 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.
FINDINGS OF FACT
A vista Corporation is a Washington corporation qualified to do business within the
State of Idaho. A vista 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 Company proposes to receive authorization to offer, issue and sell certain
secured or unsecured bonds, notes and other evidences of indebtedness, including without
.limitation, assumption of any obligation or liability as guarantor, endorser, surety or otherwise in
respect to the securities of any other person, firm, corporation, or affiliate of the Company, and
any refunding, extension, renewal or replacement of any of the foregoing (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 Company any fee (1)
for services in connection with the consummation of the issuance and sale of the above-
referenced securities other than fees for legal, accounting or similar professional or technical
services, or (2) for services in securing underwriters, sellers or purchasers of the securities.
CONCLUSIONS OF LAW
A vista is 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. The Idaho Public Utilities
Commission has jurisdiction over this matter pursuant to Idaho Code 9 61-901 et seq. and
Commission Procedural Rules 141-150. IDAPA 31.01.01.141-150.
ORDER NO. 29896
The proposed offering, issuance and sale of the Securities is for a lawful purpose and
is within the Company s corporate powers. A formal hearing on this matter is not required.
All fees required by Idaho Code 9 61-905 have been paid by the Company.
ORDER
IT IS HEREBY ORDERED that Avista Corporation be, and the same hereby is
authorized to offer, issue and sell the Securities as described in the Application. A vista shall file
annual status reports with the Commission showing all actual and proposed activity with the
authority granted with this Order and to meet annually with Staff to discuss A vista s current
financing status. A vista shall also file term sheets prior to refunding, extending, renewing or
replacing the proposed security(ies).
IT IS FURTHER ORDERED that Avista 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 the then-existing market prices for similar
transactions.
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 or determination of costs or any other matter which may come
before the Commission pursuant to its jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that nothing in this Order and no provisions of Title 61
Chapter 9, Idaho Code, or any act or deed done or performed in connection therewith shall be
construed to obligate the State of Idaho to pay or guarantee in any manner whatsoever any
security authorized, issued, assumed or guaranteed under the provisions of Title 61 , Chapter 9
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 may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
ORDER NO. 29896
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 :(C)~
day of October 2005.
~NDER, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
, OMMISSIONER
ATTEST:
~fJ, Je D. Jewell
Commission Secretary
bls/O:A VU-05-01 ws
ORDER NO. 29896