20080204Application.pdf

ttention: Jean D. Jewell, Secretary
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Transmitted herewith are one executed and two conformed copies of an application for approval of
security issuance. The application contains as much information as is presently known. If other
applicable data or documents become available, they will be forwarded to your attention. Acheck in
the amount of $1,000.00, the maximum fee is coming under separate cover.
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The Company requests to receive an Order of Approval from the Commission by February l', 2008.
When complete, please send one (1) executed copies of the Order of Approval to,:
Diane C. Thoren
Assistant Treasurer
Avista Corporation
East 1411 Mission Avenue
Spokane W A 99202-2600
If any questions arise or additional information is needed, please do not hesitate to contact Paul
Kimball at 509-495-4584.
Sincerely,~-~
Diane Thoren
Assistant Treasurer
Enclosures
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
\ Í,) !\.i....lt)CASE NO. üTiUTIE.S
Avu-o -o8-0(
Application is hereby made to the Idaho Public Utilties Commission under the provisions of Section 61-
901 and 61-902, Idaho Code (Laws of 1951, Chapter 143) for an Order authorizing offering, issuance
and sale by Avista Corporation (hereinafter called "Applicant") of up to $350,000,000 of secured fixed
rate bonds.
In the Matter of the Application of
AVISTA CORPORATION for an Order authorizing
the offering, issuance and sale of Securities
not to exceed $350,000,000
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The following information and specific exhibits are furnished in support thereof:
(a) Name and address of principal business office:
Avista Corporation
1411 East Mission Avenue
Spokane W A 99202-2600
Name of representative for service:
Diane C. Thoren, Assistant Treasurer
(b) State and date of incorporation:
Incorporated Washington Territory (now the State of Washington) on March 15, 1889. The term of
incorporation is perpetual.
States in which qualified to do business:
Washington, Idaho, Montana, and Oregon.
(c) General description of business, property, and territory served:
The Applicant is a public utilty which owns and operates property in Eastern Washington, Northern
Idaho, Western Montana, Central & Southwest Oregon.
Applicant is engaged in the generation, transmission, distribution, and sale of electric energy, which
it sells at retail to approximately 352,000 residential, commercial, and industrial customers in
Eastern Washington and Northern Idaho, and at wholesale to public utilities, municipalities and
others. Its electric properties are operated as a unified system and are interconnected with
adjacent electric utilities. The electric energy sold by the Applicant is generated in power stations
which it owns in whole or in part or obtained by purchase or exchange from other utilities and
governmental agencies.
Natural gas is distributed and sold to approximately 311,000 residential, commercial and industrial
customers in Eastern Washington, Northern Idaho, and Central & Southwest Oregon.
(d) Description of securities, indebtedness or liabilities:
Pursuant to Rule 142 of the Rules of Practice and Procedure, the Applicant hereby Files the
application fied with the Oregon Public Utiities Commission as Exhibit "D-1" in lieu of the
application required by Rule 141. Applicant further states that:
(1) Applicant has published or wil have published within seven days of the date of filng thisApplication a notice in those newspapers listed in Rule 141.08 of the Rules of Practice and
Procedure of the Idaho Public Utilities Commission that are in general circulation in
Applicant's service area.
D-l
BEFORE THE
PUBLIC UTILITY COMMISSION OF OREGON
In the Matter of the Application of
AVISTA CORPORATION
for an Order authorizing the issuance and sale of
Debt Securities not to exceed $350,000,000
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APPLICATION
UF-
Avista Corporation (hereinafter called "Applicant") hereby applies for an Order of the Public Utility Commission
of Oregon (Commission) authorizing the issuance and sale by the Applicant of up to $350,000,000 of first
mortgage bonds ("Bonds") in accordance with OAR 860-27-0025 and -0030 and Oregon Revised Statutes
(ORS) 757.415, provided that, with respect to the Bonds contemplated above, such Bonds are either issued
with a cost to maturity not exceeding the spreads over Treasury yields established by the Commission or is
issued with a cost to maturity not exceeding 7.0 percent per annum.
1. Required information:
(a) The name and principal business address of the Applicant is Avista Corporation, 1411 East
Mission Avenue, Spokane, Washington 99202-2600.
(b) The Applicant was incorporated in Washington Territory (now the State of Washington) on March
15, 1889. The term of incorporation is perpetual. The Applicant is a public utility, which currently owns and
operates property in Eastern Washington, Northern Idaho, Western Montana, and Central & Southwestern
Oregon.
(c) The name and address of the person authorized on behalf of the Applicant to receive notices and
communications with respect to this Application is Ms. Diane C. Thoren, Assistant Treasurer, Avista
Corporation, 1411 East Mission Avenue, Spokane, Washington, 99202.
(d) The names and titles of the principal officers of the Applicant, all of whom maintain offices at 1411
East Mission Avenue, Spokane, Washington 99202, are as follows:
Scott L. Morris
Malyn K. Malquist
Marian M. Durkin
Karen S. Feltes
Christy M. Burmeister-Smith
Don F. Kopczynski
David J. Meyer
Kelly O. Norwood
Ann M. Wilson
Roger D. Woodworth
Don M. Falkner
Susan Y. Miner
Diane C. Thoren
Chairman of the Board, Chief Executive Offcer & President
Executive Vice President & Chief Financial Offcer
Senior Vice President, General Counsel & Chief Compliance Officer
Senior Vice President & Corporate Secretary
Vice President, Controller & Principal Accounting Offcer
Vice President
Vice President & Chief Counsel for Regulatory & Governmental Affairs
Vice President
Vice President & Treasurer
Vice President
Assistant Treasurer
Assistant Corporate Secretary
Assistant Treasurer
(e) Applicant is engaged in the generation, transmission, distribution and sale of electric energy,which it sells at retail to approximately 352,000 residential, commercial, and industrial customers in Eastern
Washington and Northern Idaho, and at wholesale to public utilities, municipalities and others. Its electric
properties are operated as a unified system and are interconnected with adjacent electric utilties. The electric
energy sold by the Applicant is generated in power stations, which it owns in whole or in part or obtained, by
purchase or exchange from other utilities and governmental agencies.
Applicant is also engaged in the distribution and sale of natural gas to approximately 311,000
residential, commercial and industrial customers in Eastern Washington, Northern Idaho, and Central &
Southwestern Oregon.
(f) The Applicant's capital stock as of September 30,2007 was as follows (Dollars in thousands):
Preferred Stock
(10,000,000 shares authorized)
OutstandingShares Amount
Total Preferred Stock 00 ~
Common Stock
(200,000,000 shares authorized)
No Par Value
Capital Stock Expense
Total Common Stock
52,882,985
52.882.985
$727,048
(22,538)
$704.510
None of the capital stock is held as reacquired securities, pledged, held by affiliated corporations, or held in
any fund, except as noted above.
(g) The Applicant's long-term debt as of September 30, 2007 was as follows:
Authorized Outstanding
($OOOs)($OOOs)
Description
First Mortgage Bonds
Secured Medium-Term Notes, Series A $ 250,000 $ 68,000
Secured Medium-Term Notes, Series B 250,000 5,000
5.70% Series Due 7-1-2038 150,000 150,000
6.125% Series Due 9-1-2013 150,000 45,000
5.45% Series Due 12-1-2019 *90,000
6.25% Series Due 12-1-2035 150,000 150,000
Series C 250,000 88,850
Pollution Control Bonds
Series due October 1 , 2032 66,700 66,700
Series due March 1, 2034 17,000 17,000
6% Series due 2014 4,100 4,100
Trust Preferred Notes
Capital I & II 150,000 113,403
Senior Corporate Notes
9.75% Due 6-1-2008 400,000 272,860
Total Long Term Debt $2.187.800 $1.070,913
None of the long-term debt is held as reacquired securities, pledged, held by affliated corporations, or held in
any fund, except as noted above.
*Both the 6,125% and the 5.45% Series were issued under the same $150 milion authority.
(h) Full Description of Securities Proposed to be Issued. The Applicant proposes to offer, issue andsell the Bonds for purposes authorized by law, in forms necessary or convenient to its operations, in a total
amount of up to and including $350,000,000 and for terms which will exceed 365 days. While no specific
transactions are presently pending or contemplated under the proposed authority, the Applicant wil only enter
into transactions where the fees, interest rates and expenses charged or incurred by the Applicant in
connection with the transactions, and any refunding, extensions, renewals or replacements thereof, are
competitive with then-existing market prices for similar transactions.
(i) Detailed Description of the Proposed Transaction. The terms for the Bonds will be determined atthe time of issuance, and the underwriters, banks or other agents wil be selected at that time. The Applicant
proposes to offer, issue and sell the Bonds in a total amount of up to and including $350,000,000. The Bonds
may be issued as public offerings or on a private placement basis. The Applicant will only enter into
transactions where the fees, interest rates and expenses charged or incurred by the Applicant in connection
with the transactions are competitive with then-existing market prices for similar transactions. The terms of
each Bond issuance and the names of the banks, or agents wil be supplied at the time of issuance.
The issuance of Bonds under the requested authority is anticipated before the end of 2008 and is expected to
be in the range of $250-$350 milion with terms of 10-31 years. The actual amount issued and the maturities
selected for the Bonds will be determined based on market conditions, investor demand and on the
Applicant's current maturity schedule. At the time of issuance the Applicant wil assess current market
conditions to determine where the yield curve and spreads are most attractive, indicating strong investor
demand. Based upon recent indications from investment banks, the Applicant could issue 10-year secured
bonds at no more than 245 basis points over the current 10-year Treasury rate and no more than 265 basis
points over the 30-year Treasury rate for a 30-year secured bond.
The Company also requests authority to issue the Bonds without further Commission approval to the extent its
cost to maturity does not exceed the maximum total spreads over Treasury yields (See Exhibit L) or is issued
with a cost to maturity not exceeding 7.0 percent per annum in order to provide additional flexibility in the event
spreads widen or the Company decides to sell the Bonds through underwriters.
U) Fees to Persons Other than Attorneys & Accountants. The Applicant wil only enter intotransactions where the fees, interest rates and expenses charged or incurred by the Applicant in connection
with the transactions are competitive with then-existing market prices for similar transactions. The terms of
each Bond issuance and the names of the banks, or agents wil be supplied at the time of issuance.
(k) Total Amount and Net Proceeds. The estimated net proceeds are equal to $350,000,000 less theunderwriter's, bank's or agent's commissions. Compensation to any underwriter, bank or agent for their
services in connection with the handling of the Bonds is not expected to exceed 1 .5%.
Estimated Total Fees and Expenses - with total fees not to exceed $4,600,000
Underwriters
Legal counsel fees
Title Insurance
Printing
Accounting
Trustee fees
Rating agency fees
Miscellaneous
$3,150,000
500,000
350,000
100,000
100,000
50,000
250,000
100,000
$4,600.000Total:
(I) Purposes for which the Securities are to be Issued. The Applicant may use the funds from the
offer, issuance and sale of the Bonds for any or all of the following purposes: (1) the Applicant's construction,
facility improvement, and maintenance programs, (2) to retire or exchange one or more outstanding stock,
bond, or note issuances, (3) to reimburse the treasury for funds previously expended, and (4) for such other
purposes, as may be permitted by law. To the extent that the Applicant's treasury is refunded, the original
expenditures, or their precedents, were made for purposes described by ORS 757.415(1)(a), (b), or (e). To
the extent that the obligations are discharged or refunded, those obligations or their precedents were used for
purposes described by ORS 757.415(1 )(a), (b), or (e).
(m) Other applications. Similar applications have been filed with, the Washington Utilties and
Transportation Commission and the Idaho Public Utilities Commission, in whose jurisdictions the Applicant
also operates. The appropriate forms or other appropriate filing wil be filed with the Securities and Exchange
Commission depending on the nature of the issuance of the Bonds.
(n) Public interest. The Applicant anticipates using the proceeds from the issuance of the Bonds to
refinance debt maturities and to repay funds borrowed under its corporate credit facility. The Applicant has
$318 millon of debt maturities throughout the year plus $190 millon of capital expenditures for 2008. The
issuance of the requested authority allows the Applicant the greater flexibility to manage its funds and reduce
borrowing costs. As the facts set forth in this application demonstrate, the proposed authority would allow the
Applicant to better manage its debt and capital in a more efficient and cost effective manner. Accordingly,
Applicant believes the requested authority is consistent with the public interest and necessary or appropriate
for or consistent with the proper performance by the Applicant of service as a public utility.
(0) Not Applicable
2. Submitted herewith are the following exhibits as required:
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit i
Exhibit J
Exhibit K
Exhibit L
The Applicant's Articles of Incorporation
The Applicant's Bylaws
A copy of the resolution adopted by the Applicant's Board.
The Applicant's Mortgage
A balance sheet as of September 30,2007
A statement of contingent liabilties as of September 30, 2007
An income statement for the 9 months ended September 30, 2007
An analysis of retained earnings for the 12 months ended September 30, 2007
Drafts of transactional documents wil be supplied when available.
Underwriting documents will be supplied when available.
Not applicable
Spreads Table
WHEREFORE, the Applicant respectfully requests the Public Utility Commission of Oregon to.enter a written
order authorizing the proposed offering, issuance and sale by the Applicant of up to $350,000,000 of certain
first mortgage bonds.
AVISTA CORPORATION
By
Diane C. Thoren, Assistant Treasurer
Dated: January 25, 2008
STATE OF WASHINGTON
County of Spokane
I, Diane C. Thoren, being duly sworn, depose and say that I am the Assistant Treasurer of Avista
Corporation, the Applicant in the foregoing Application; that i have read said Application, including all Exhibits
thereto, and know the contents thereof; and that the same are true to the best of my knowledge and belief.
Diane C. Thoren, Assistant Treasurer
SUBSCRIBED AND SWORN to before me this
25th Day of January, 2008
Notary Public for Washington
My Commission Expires:
Exhibit D-2
PROPOSED ORDER OF APPLICANT
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 SECURITIES NOT TO )EXCEED $350.000.000 )
CASE NO.
ORDER NO.
On January 31,2008, Avista Corporation (Avista) filed an Application with the Idaho Public Utilties
Commission (Commission) requesting an Order authorizing the offering, issuance and sale by Avista of up
to $350,000,000 of secured fixed rate bonds (the Securities). The Commission, having fully considered the
Application and exhibits attached thereto, and all of the Commission's files and records pertaining to the
Application, makes the following findings of fact and conclusions of law, and enters this Order approving
Avista's Application.
Avista proposes to receive authorization to offer, issue and sell the Securities including, without
limitation, any refunding, extension, renewal or replacement of any of 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. More specifically,
Avista anticipates using the proceeds to refinance $318 million of debt maturities throughout the year
including $273 milion that matures June 1, 2008. Avista requests authority to refund, extend, renew or
replace the proposed securities to allow for the greatest flexibility in their use.
No person has received or wil be entitled to receive from Avista any fee (1) for services in
connection with the consummation of the issuance and sale of the above-referenced 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 the securities. Avista is a Washington
corporation qualified to do business in the State of Idaho.
Avista 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. Avista is a gas corporation within the
definition of Idaho Code § 61-117, an electric corporation within the definition of Idaho Code § 61-119, and
a public utility within the definition of Idaho Code § 61-129. The Commission has jurisdiction over this
Application pursuant to the provisions of Idaho Code § 61-901, et seq. The Commission further finds that
the Application reasonably conforms 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 is within Avista's
corporate powers. The proposed issuance and redemption of maturing debts provide an opportunity for
Avista to reduce borrowing costs and increase flexibility with future refinance options. This debt authority,
however, may not be used to fund stock dividends.
The Commission's approval of the issuance 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 constiute agency determination/approval of the type of
financing or the related costs for ratemaking purposes. The Commission does not have before it for
determination in this case and, therefore, does not determine the effect of issuance on rates to be charged
by Avista 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 formal hearing on this matter is not required. Avista
has paid all lawful fees as provided by Idaho Code § 61-905.
ORDER
IT iS HEREBY ORDERED that Avista Corporation be, and the same hereby is authorized to offer,
issue and sell up to and including $350,000,000 in Securities, all as described in the Application filed on
January 31,2008.
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 the
Order, and any refunding, extension, renewal or replacement thereof, are competitive with market prices
for similar transactions.
IT IS FURTHER ORDERED that Avista 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 filng
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 and update if
any changes occur, the following:
(a) The "Report of Securities Issued," and
(b) Verified copies of any Agreement entered into pursuant to this Order.
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 may petition for reconsideration
within twenty-one (21) days of the service date of 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.
DONE by Order of the Idaho Public Utilties Commission at Boise, Idaho this day of February
2008.
JIM KEMPTON, COMMISSIONER
MARSHA H. SMITH, COMMISSIONER
DENNIS S. HANSEN, OMMISSIONER
ATTEST:
Jean D. Jewell
Commission Secretary
WHEREFORE, the Applicant respectfully requests the Idaho Public Utilities Commission for an
Order authorizing Avista Corporation (hereinafter called "Applicant") to issue up to and including
$350,000,000 of the Securities.
Dated to Spokane, Washington, this 31st day of January, 2008.
AVISTA CORPORATION
By
Diane C. Thoren, Assistant Treasurer
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STATE OF WASHINGTON
County of Spokane
Diane C. Thoren, being duly sworn, under penalty of perjury deposes and says: That she is
Assistant Treasurer of AVISTA CORPORATION; that she has read the foregoing application and knows
the contents thereof; and that the same is true of her own knowledge and belief, and as to those matters
she believes them to be true.~~
Diane C. Thoren, Assistant Treasurer
SUBSCRIBED AND SWORN to before me this
31 st day of January, 2008.
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