20031103_674.pdf

DECISION MEMORANDUM
FROM:
COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
WORKING FILE
TERRI CARLOCK
TO:
DATE:OCTOBER 31,2003
SUBJECT:ACIFICORP REQUESTED SHORT -TERM DEBT AUTHORITY
OF $1.5 BILLION; CASE NO. PAC-03-11.
RECOMMEND:APPRO V
PacifiCorp requests authority to borrow not more than $1.5 billion in short-term debt
aggregate principal amount through April 30, 2006. The authority would extend the existing
short-term debt authority that expires April 30, 2004, Order No. 28970 (prior authorities Order
Nos. 27457 and 28346). The other terms and conditions will not be changed.
The type of issue (promissory notes, revolving credit, commercial paper) and the terms of
issue including interest rate will be determined at the date of issue. The short-term debt may
include (1) unsecured short-term promissory notes to and borrow from U.S. or foreign commercial
banks (or their affiliates) under the following facilities: (a) not more than $1.5 billion in aggregate
principal amount outstanding at anyone time under one or more revolving credit agreements
(Agreements); and (b) not more than $1.5 billion in aggregate principal amount outstanding at any
one time under other borrowing arrangements (Other Arrangements); and (2) commercial paper
(Paper) in the US. or overseas in an aggregate principal amount not to exceed $1.5 billion
outstanding at anyone time; provided, further, that the aggregate principal amounts outstanding
under the Agreements, Other Arrangements and Paper not exceed $1.5 billion at anyone time.
Proceeds from the debt issuances will be utilized for general utility purposes including
improvement or maintenance of service or facilities, construction purposes, acquisition of utility
property, discharge or refunding of existing issuances or to reimburse the Company s treasury.
DECISION MEMORANDUM OCTOBER 31 , 2003
ST AFF DISCUSSION AND RECOMMENDATION
PacifiCorp requests the short-term debt authority be continuous and remain effective
through April 30, 2006. Although the current authority does not expire until April 30, 2004, an
extension at this time will allow 364-day terms to be fully utilized.
Currently PacifiCorp s ratings for Senior Secured Debt are "A3" by Moody s and "A" by
Standard & Poors . For Commercial Paper the ratings are "P2" by Moody s and "A2" by
Standard & Poors . At July 31 , 2003, PacifiCorp s capital structure consisted of 45.3% common
equity, 1.4% preferred stock and 53.3% long-term debt. I recommend the authority be granted.
The reasonableness of the interest rate and all-in cost will be evaluated as part of the review of
issuance documents in this case and in future audits. The required fees have been paid.
COMMISSION DECISION
Should authority to borrow $1.5 billion in short-term debt be approved through
Apri130 2006?
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~ocR
Terri Carlock
udmemos/TC/P AC/paceO311
DECISION MEMORANDUM OCTOBER 31 , 2003