20100920Application.pdf

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ID 83720
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ttention: Jean D. Jewell, Secretary
Transmitted herewith are one executed and two conformed copies of an application for approval of
one or more credit facilities. 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. A
check in the amount of $1,000.00, the maximum fee is coming under separate cover.
The Company requests to receive an Order of Approval from the Commission by October 2010.
When complete, please send one (1) executed copy of the Order of Approval to:
Diane C. Thoren
Treasurer
Avista Corporation
East 1411 Mission Avenue
Spokane WA 99202-2600
If any questions arise or additional information is needed, please do not hesitate to contact Damien
Lysiak at 509-495-2097.
Sincerely,~c~
Diane C. Thoren
Treasurer
Enclosures
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 Debt Securities )not to exceed $600,000,000 )CASE NO.ÅVU -0-1 O'-6(
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 Avista Corporation
(hereinafter called the "Applicant") to enter into one or more credit facilities of up to $600,000,000 with
terms of up to 5 years, subject to extensions not to exceed two additional years if the Applicant and the
banks agree, and in connection therewith 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, indorser, surety or otherwise in respect of such securities, and any refunding,
extension, renewal or replacement of such credit facilities or any of the foregoing (collectively, the
"Credit Facilities").
The following information and specific exhibits are furnished in support thereof:
(a) Name and address of principal business office:
Name of representative for service:
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Avista Corporation
1411 East Mission Avenue
Spokane WA 99202-2600 0"
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Diane C. Thoren, Treasurer
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(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 utiity which owns and operates property in Eastern Washington, Northern
Idaho, Western Montana, Central & Southwest Oregon.
The Applicant is engaged in the generation, transmission, distribution, and sale of electric energy,
which it sells at retail to approximately 314,297 residential, commercial, and industrial customers in
Eastern Washington and Northern Idaho, and at wholesale to public utilties, 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.
The Applicant is also engaged in the distribution and sale of natural gas to approximately 282,199
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 filed with the Washington Utilties and Transportation Commission as Exhibit "D-1" in
lieu of the application required by Rule 141. Applicant further states that:
(1) Applicant has published or will have published within seven days of the date of filing this
Application 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.
Exhibit D-1
(insert form of Washington application)
Exhibit D-2
(insert form of Order)
ExhibitD-l
BEFORE THE
WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION
In the matter of the request of
AVISTA CORPORATION
for an order establishing compliance
with Chapter 80.08 RCW
Application
Docket No.
Avista Corporation (hereinafter called "Applicant") hereby requests the Washington Utilities and
Transportation Commission enter a written order authorizing the Applicant to enter into one or more credit
facilities of up to $600,000,000 with terms of up to 5 years, subject to extension for up to two more years
if the Applicant and the banks agree, and in connection therewith to offer, issue and sell certain secured
or unsecured bonds (including First Mortgage Bonds issued under Applicant's Mortgage and Deed of
Trust, dated June 1,1939, as amended and supplemented), notes and other evidences of indebtedness,
including, without limitation, assumption of any obligation or liability as guarantor, indorser, surety or
otherwise in respect of such securities, and any refunding, extension, renewal or replacement of such
credit facilities or any of the foregoing (collectively, the "Credit Facilities") in compliance with the
requirements of Chapter 80.08 RCW.
The following information is furnished in support of this application, in accordance with the requirements
of RCW 80.08.040:
(1) A Description of the Purposes for Which the Issuance is Made, Including a Certification By an
Officer Authorized To Do So That the Proceeds From Any Such Securities Are For One Or
More of the Purposes Allowed By Chapter 80.08 RCW.
The Applicant wil use the funds from the proposed Credit Facilities for one or more of the following
purposes: (a) The acquisition of property, or the construction, completion, extension, or improvement
of its facilties, or (b) the improvement or maintenance of service, or (c) the issuance of stock
dividends, or (d) the discharge or refunding of its obligations, or (e) the reimbursement of moneys
actually expended from income or from the treasury of the Applicant to the extent permitted by RCW
80.08.030, or (f) for other purposes permitted by law.
The Applicant wil utilize the proposed Credit Facilities for lawful purposes as outlned in RCW
80.08.030. Specifically, the Applicant anticipates using the Credit Facilities to provide liquidity for its
operations, including daily operational requirements.
The undersigned certifies that she has read the foregoing information with respect to the proposed use
of funds and knows the contents thereof and that the same are true to the best of her own knowledge
or belief.
Done at Spokane, Washington this 15th day of September, 2010.
By:
Diane C. Thoren
Treasurer
(2) A Description of the Proposed Issuance Including the Terms of Financing.
Overview:
The Applicant has two existing credit facilities that will expire in April 2011. These existing credit
facilities provide the company with a combined $395 million of liquidity and are its primary liquidity
source for purposes allowed by Chapter 80.08 RCW. The requested authority wil allow the Applicant
to replace these facilities with one or more new revolving credit facilities.
Page 1 of3
Exhibit D-l
The Credit Facilities will replace the existing credit facilities and provide the Applicant with the
continued ability to borrow and repay these amounts as needed for daily operational requirements.
The Company, at its option, can rollover these borrowings at revised interest rates during the term of
the Credit Facilities without the initial borrowings being repaid in cash unti the expiration of the term of
the Credit Facilities. The aggregate borrowings outstanding under the Credit Facilities will be limited to
$600,000,000. Similar to the existing credit facilties, interest will be charged under the Credit Facilities
at rates set by the tenure of the requested borrowings and the applicable interest rate spread. The
Credit Facilities will also include the ability to issue letters of credit, similar to the provisions of the
existing credit facilities. The Applicant anticipates that the Credit Facilities will be secured by First
Mortgage Bonds issued under the Applicant's Mortgage and Deed of Trust, dated as of June 1, 1939,
as amended and supplemented. Substantially all of the Applicant's utility properties are subject to the
lien of the Mortgage. The existing facilties are similarly secured with First Mortgage Bonds.
Amount:
$600,000,000 in aggregate.
Date of Issue and Maturity:
The Credit Facilities are expected to have an initial term of five years with an option to extend the term
up to two more years if the Applicant and the banks agree.
Compensation to any bank or agent for their services in connection with the handling of the Credit
Facilities is not expected to exceed 1 %, including fees for co-lead arrangers (fee paid for organizing
the syndication of the Credit Facilities, expected to range from 0.15% to 0.30%) and upfront fees (fee
paid for the banks' initial commitment of capital upon closing the Credit Facilties, expected to range
from 0.50% to 0.65%), and agency fees (annual fee paid to the lead bank for administering the Credit
Facilities expected to range from $25,000 to $40,000 annually), and such fees do not exceed the
customary fees for such services in arm's-length transactions and are reasonable.
Estimated fees and borrowing spreads, based on the Applicant's current senior secured debt
rating and current market information, are as follows:
Eurodollar Alternate Base
Pricing Level Facility/Undrawn Margin (I)Rate Margin (2)
Fee
0.425%2.125%3.125%
~-~.~-~-
0.450%2.250%3.250%
iv
(BBBlBaa2)
V
(BBB-lBaa3)
Vi
(less than or equal to BB+lBal)
0.750%3.125%4.125%
1.000%3.500%4.500%
1 Eurodollar Margin applies for borrowings with a term of at least two weeks. The rate will be the applicable UBOR
rate plus the Eurodollar Margin.
2 Alternate Base Rate Margin applies for borrowings of less than tw weeks. The rate is reset daily to whichever is
the greatest of (a) Prime Rate, (b) the Federal Funds Rate plus the Base Rate Margin, (c) 30 day UBOR rate plus
1.00%.
Page 2 of3
Exhibit D-l
As noted above the fees are based upon the Applicant's current senior secured debt rating. The
Applicant's senior secured debt ratings are currently BBB+/Baa1 (i.e. Pricing Level ILL). In the event
that the Applicant's senior secured debt ratings are split by one level, the higher rating wil apply. In
the event the ratings are split by more than one level, the level that is one level below the higher
rating wil apply.
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, and any refunding,
extensions, renewals or replacements thereof, are competitive with market prices for similar
transactions.
(3) Statement As To Why The Transaction Is In the Public Interest.
The requested authority will allow the Applicant to continue manage its daily cash needs consistent
with purposes allowed by Chapter 80.08 RCW. The Applicant's capital expenditure program requires
a combination of internally generated cash flows and external financings. The requested authority will
allow the Applicant to continue to manage is debt and capital needs in the most efficient and cost-
effective manner. Accordingly, the Applicant believes the requested authority is in the public interest.
(4) Text of a Draft Order Granting Applicant's Request for an Order.
A copy of a draft order granting the Applicant's request for an order is attached hereto as "Exhibit A".
Wherefore, the undersigned, an authorized agent of the Applicant, requests that the Washington Utilities
and Transportation Commission issue its order affirming that the applicant has complied with the
requirements of RCW 80.08.040.
The undersigned certifies, under penalties of perjury as provided in RCW 9A. 72.085, that she has read the
foregoing application and knows the contents thereof and that the same are true to the best of her own
knowledge or belief.
Done at Spokane, Washington this 15th day of September, 2010.
AVISTA CORPORATION
By:
Diane C. Thoren
Treasurer
Page 3 of3
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 ONE OR MORE
CREDIT FACILITIES NOT TO
EXCEED $600,000,000
)
)
)
)
)
CASE NO.
ORDER NO.
On September 15, 2010, Avista Corporation (Avista) filed an Application with the Idaho Public
Utilties Commission (Commission) requesting an Order authorizing Avista to enter into one or more credit
facilities of up to $600,000,000 with terms of up to 5 years, subject to extensions not to exceed two
additional years if the Applicant and the banks agree, and in connection therewith 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, indorser, surety or otherwise in respect
of such securities, and any refunding, extension, renewal or replacement of such credit facilities or any
of the foregoing (collectively, the "Credit Facilties"). The Credit Facilities will replace existing credit
facilities that wil expire in April 2011. 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.
THE APPLICATION
Avista proposes to receive authorization to enter into the Credit Facilities including, without
limitation, any refunding, extension, renewal or replacement of the credit faciliies. The net proceeds of the
Credit Facilities wil 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 Avista any fee (1) for services in
connection with the consummation of the above-referenced securities, other than fees for
underwriting/arranging, legal, accounting or similar professional or technical services, or (2) for services in
securing lenders in the Credit Facilities.
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
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
Page 1 of3
Exhibit D-2
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.
Avista has paid all lawful fees as provided by Idaho Code § 61-905.
The Commission finds that the proposed Credit Facilities is for a lawful purpose and is within
Avista's corporate powers.
The Commission further finds that the proposed transaction is in the public interest and a formal
hearing on this matter is not required.
The Commission's approval of the Credit Facilities 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 Credit Facilities does not constitute 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.
ORDER
IT IS HEREBY ORDERED that Avista's Application for authority to make up to $600,000,000 in
aggregate principal amount at anyone time outstanding of short-term borrowings, for seven years from the
date of the credit agreement, under the terms and conditions and for the purposes set forth in the
Application and this Order is granted.
IT IS FURTHER ORDERED that this authorization will remain in place for seven years from the
date of execution of the credit agreement, provided that the Company maintains at least Pricing Level V as
indicated in the application i.e. (BBB- or higher senior secured debt rating, as indicated by Standard & Poor
s Ratings Services, and a Baa3 or higher rating as indicated by Moody s Investors' Service, Inc). If Avista's
senior secured debt rating falls below either such rating ("Downgrade ), the Company's authority to incur
short-term borrowings provided in this Order will not terminate, but instead such authority will continue for a
period of 364 days from the date of the Downgrade Continued Authorization Period"), provided that Avista:
(1) promptly notifies the Commission in writing of the Downgrade; and (2) files a supplemental application
with the Commission within fourteen (14) days after the Downgrade, requesting a supplemental order
Supplemental Order) authorizing the Company to continue to make short-term borrowings as provided in
the Order, notwithstanding the Downgrade. Until the Company receives the Supplemental Order, any
short-term borrowings made by Avista during the Continued Authorization Period wil become due or
mature no later than the final date of the Continued Authorization Period. Subject to the foregoing proviso
regarding a Downgrade, no additional authorization is required to carry out this transaction and no
Supplemental Order will be issued.
IT IS FURTHER ORDERED that Avista shall file the terms of the proposed issuance(s) of
securities in connection with the Credit Facilities, 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, after the closing
of the Credit Facilities.
Page 2 of3
Exhibit D-2
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 Credit 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-petiion for reconsideration. See Idaho Code §
61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this XX day of MONTH,YY.
, COMMISSIONER
, COMMISSIONER
, COMMISSIONER
ATTEST:
Commission Secretary
Page 3 of3
WHEREFORE, the Applicant respectfully requests the Idaho Public Utilities Commission for an
Order authorizing the Credit Facilities of up to $600,000,000 with terms of up to 5 years, subject
to extensions not to exceed two additional years if the Applicant and the banks agree, and in
connection therewith 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, indorser, surety or otherwise in respect of such securities, for the purposes
described in this Application, with continuing authority to refund, extend, renew or replace the
same without further order of the Commission.
Dated to Spokane, Washington, this 15th day of September, 2010.
AVISTA CORPORATION
By ~c.~
Diane C. Thoren, Treasurer
STATE OF WASHINGTON
County of Spokane
Diane C. Thoren, being duly sworn, under penalty of perjury deposes and says: That she is
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, Treasurer
SUBSCRIBED AND SWORN to before me this
15th day of September.
r2 CL t4 QNtU
Notary Public for Washington
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