20060508final_order_no_30036.pdf

Office of the Secretary
Service Date
May 8, 2006
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 COMMON
STOCK
ORDER NO. 30036
CASE NO. A VU-06-
On April 7, 2006, Avista Corporation (Avista) applied for authority to offer, issue
and sell up to 5 000 000 shares of authorized but unissued Common Stock, without par value
Common Stock") under one or more methods, the periodic offering program, direct sales or
underwritten transactions. The proceeds will be used for one or more of the following purposes:
(a) the improvement or maintenance of service, (b) the discharge or refunding of its obligations
(c) the reimbursement of moneys actually expended from income or from the treasury of Avista
to the extent permitted, or (d) other purposes approved by the Commission or permitted by law.
THE APPLICATION
A vista proposes that the shares issued and sold under the periodic offering program
will be subject to the following pricing limitations: the price received by Avista before agent
commission, will not be less than $0.25 below the last price at which Avista Common Stock was
reported in the record of composite quotations published in the Wall Street Journal on the trading
day immediately preceding the day for the fixing of such price, and will also not be less than
100% of the book value per share of A vista s Common Stock as of the last day of the most
recently ended calendar quarter. Shares sold under direct sales and underwritten transactions
will be based on current market conditions.
STAFF REVIEW
Staff recommended approval of Avista s Application. However, consistent with a
similar authorization of stock issuance in Order No. 29947, Case No. A VU-05-, recently
issued by the Commission, Staff also recommended that A vista be required to file a status report
with the Commission reflecting pertinent quarterly financial information to include the
following: (a) Debt to Equity Ratio, (b) Enterprise Value, (c) Net Income Available to Common
Stock, and (d) Common Shares Outstanding.
Staff reported that the issuance will allow A vista the flexibility to issue authorized
but unissued shares of Common Stock to more effectively improve the common equity ratio of
ORDER NO. 30036
its capital structure, strengthen its balance sheet and reduce costs associated with issuing stock
through underwritings. This authority will provide flexibility to finance the anticipated capital
expenditure program of $450 million over the next three years. It also allows flexibility to fund
debt and preferred stock maturities exceeding $550 million over the same time period.
FINDINGS OF FACT
Avista was incorporated under Washington law on March 15 , 1889. The Company is
qualified to do business within the State of Idaho and is engaged principally in the generation
purchase, transmission, distribution and sale of electric energy to residential, commercial and
industrial customers in eastern Washington and northern Idaho, and the purchase, distribution
and sale of natural gas to residential, commercial and industrial customers in eastern
Washington, northern Idaho and central and southwest Oregon.
Based on the representations in the Application, we find that the proceeds from the
issuances and sales ofthe Shares will be used for (a) the improvement or maintenance of service
(b) the discharge or refunding of its obligations, (c) the reimbursement of moneys actually
expended from income or from the treasury of A vista to the extent permitted, or (d) for other
purposes permitted by law.
Based on the representations in the Application, we further find that A vista proposes
to issue and sell up to 5 000 000 shares of its Common Stock under one or more methods, the
periodic offering program, direct sales, or underwritten transactions. Shares offered under its
periodic offering program will be subject to the following pricing limitations: the price received
by A vista before agent commission, will not be less than $0.25 below the last price at which
Avista Common Stock was reported in the record of composite quotations published in the Wall
Street Journal on the trading day immediately preceding the day for the fixing of such price, and
will also not be less than 100% of the book value per share of A vista s Common Stock as of the
last day of the most recently ended calendar quarter. Shares sold under direct sales and
underwritten transactions will be based on current market conditions.
No person has received or will receive from A vista any fee (1) for services In
connection with the issuance or sale of the above-referenced Common Stock, other than fees for
legal, accounting or similar professional or technical services, or (2) for services in securing
underwriters, sellers or purchasers of the Common Stock.
The Company has paid the required fees required by Idaho Code ~ 61-905.
ORDER NO. 30036
CONCLUSIONS OF LAW
A vista is an electric corporation within the definition of Idaho Code ~ 61-119, a gas
corporation within the definition of Idaho Code ~ 61-117, and a public utility within the
definition of Idaho Code ~ 61-129. The Idaho Public Utilities Commission has jurisdiction over
this matter pursuant to Title 61 , Idaho Code , Chapters 1 and 9, specifically Idaho Code ~ ~ 61-
119 61-129 61-901 , and 61-902, and IDAPA 31.01.01.141-150.
After examining the Application and Staffs comments, the Commission finds that an
evidentiary hearing in this matter is not required.
The Commission further finds that the Application requesting authority to issue and
sell up to 5 000 000 shares of Common Stock under the Company s periodic offering program
direct sales, or underwritten transactions, subject to certain conditions is for a lawful purpose, is
within Avista s corporate powers, and is generally compatible with the public interest. The
Commission further finds that the method of issuance is proper.
This general approval of the general purposes to which the proceeds will be put is
neither a finding of fact nor a conclusion of law that any particular program of the Company
which may be benefited by the approval of this Application has been considered or approved by
this Order, and this Order shall not be construed to that effect.
The issuance of this Order does not constitute agency determination/approval of the
type of financing or the related costs for ratemaking purposes, which determination the
Commission expressly reserves until the appropriate proceeding.
ORDER
IT IS HEREBY ORDERED that the Application of Avista Corporation requesting
authority to issue and sell up to 5 000 000 shares of Common Stock under the Company
periodic offering program, subject to the following pricing limitations: the price received by
Avista before agent commission, will not be less than $0.25 below the last price at which Avista
Common Stock was reported in the record of composite quotations published in the Wall Street
Journal on the trading day immediately preceding the day for the fixing of such price, and will
also not be less than 100% of the book value per share of A vista s Common Stock as of the last
day of the most recently ended calendar quarter, or by direct sales, or underwritten transactions is
hereby granted.
ORDER NO. 30036
IT IS FURTHER ORDERED that nothing in this Order or any act or deed performed
in connection with this Order 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 this Order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the
regulatory authority of this Commission with respect to rates, service, accounts, evaluation
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 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 Avista Corporation shall file the following as they
become available:
1. The "Report of Securities Issued" required by 18 C.R. ~ 34.10.
2. Verified copies of any agreement entered into in connection with the
Company s sales and issuances ofthe Shares.
IT IS FURTHER ORDERED that the Company shall file a status report with the
Commission reflecting pertinent quarterly financial information to include the following: (a)
Debt to Equity Ratio, (b) Enterprise Value, (c) Net Income Available to Common Stock, and (d)
Common Shares Outstanding, and wi11 work with the Staff on developing an acceptable format
to meet these filings.
IT IS FURTHER ORDERED that the issuance of this Order does not constitute
acceptance of A vista s exhibits or other material accompanying this 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 with regard to any
matter decided in this Order. 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. 30036
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ~t+-
day of May 2006.
ATTEST:
~gJ~i:s
~~
Secretary
O:A VU-06-0 I dw
ORDER NO. 30036
PA LL D RESIDENT
MARSHA H. SMITH, COMMISSIONER
IS S. HANSEN, COMMISSIONER