20140218Application.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
ln the Matter of the Application of
AVISTA CORPORATION for an Order authorizing )
the offering, issuance and sale of Debt Securities )
not to exceed $500.000.000 )
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CASE NO.
Application is hereby made Avista Corporation ("Avista" or "Applicant") to the ldaho Public Utilities
Commission under the provisions of Section 61-901 and 61-902, ldaho Code (Laws of 1951, Chapter
143) for an Order authorizinq Avista to enter into a credit facility of up to $500.000.000 with a term of up143) for an Order authorizing Avista to enter into a credit facility of up to $500,000,000 with a term of up
to 5 vears. subiect to extensions not to exceed two additional vears. and in connection therewith to offer-to 5 years, subject to e not to exceed two additionalyears, 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 facility or any of the foregoing (collectively, the "Credit
Facility").
The following information and specific exhibits are furnished in support thereof:
(a) Name and address of princioal business office:
Avista Corporation
1411 East Mission Avenue
Spokane WA 99202-2600
Name of reoresentative for service:
Ryan L. Krasselt, Assistant Treasurer
Avista Corporation
P.O. Box3727
1411 East Mission Avenue, MSC-19
Spokane, Wash in gton 99220-37 27
Phone: [phone]
(b) State and date of incorooration:
lncorporated 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, ldaho, Montana, and Oregon.
(c) General description of business. propertv. and territorv served:
The Applicant is a public utility which owns and operates property in Eastern Washington, Northern
ldaho, 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 362,000 residential, commercial, and industrial customers in
Eastern Washington, and Northern ldaho, and at wholesale to public utilities, municipalities andothers. lts 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 323,000
residential, commercial and industrial customers in Eastern Washington, Northern ldaho, and
Central & Southwest Oregon.
(d) Descriotion 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 Utilities 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 ldaho Public Utilities Commission that are in general circulation in
Applicant's service area.
(2) Attached Exhibits:
Exhibit D-1 Copy of Washington Application
Exhibit D-2 Form of ldaho Order
WHEREFORE, the Applicant respectfully requests the ldaho Public Utilities Commission for an Order
authorizing a Credit Facility of up to $500,000,000 with a term of up to 5 years, subject to extensions not
to exceed two additional years, 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, for the purposes described in this Application, with continuing
authority to refund, extend, renew or replace the same without further order of the Commission.
4^.
Dated to Spokane, Washington, tris tf day of February 2014
AVISTA CORPORATION
STATE OF WASHINGTON
County of Spokane
Ryan L. Krasselt, being duly sworn, under penalty of perjury deposes and says: That he is
Assistant Treasurer of AVISTA CORPORATION; that he has read the foregoing application and knows
the contents thereof; and that the same is true of his own knowledge and belief, and as to those matters
he believes them to be true.
SUBSCRIBED AND SWORN to before me this !3-a^y of February 2014
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Notary Public for Washington
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Krasselt
Exhibit D-l
BEFORE THE
WASH I NGTON UTI LITI ES AN D TRANSPORTATI ON COM M I SSI ON
ln the matter of the request of
AVISTA CORPORATION
for an order establishing compliance
Application
Docket No.
with Chapter 80.08 RCW )
Avista Corporation (hereinafter called "Applicant") hereby requests the Washington Utilities and
Transportation Commission enter a written order authorizing the Applicant to amend, or amend and
restate, or replace a credit facility of up to $500,000,000 with a term of up to 5 years, subject to
extensions for up to two additional years, 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 facility or any of the foregoing (collectively, the "Credit Facility") 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 lssuance is Made, lncluding 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 will use the funds from the proposed Credit Facility for one or more of the following
purposes: (a) The acquisition of property, or the construction, completion, extension, or improvement
of its facilities, or (b) the improvement or maintenance of its 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 will utilize the proposed Credit Facility for lawful purposes as outlined in RCW
80.08.030. Specifically, the Applicant anticipates using the Credit Facility to provide liquidity for its
operations, including daily operational requirements.
(2) A Description of the Proposed lssuance lncluding the Terms of Financing.
Overview:
The Applicant has an existing credit facility that will expire in February 2017. This existing credit
facility provides the Applicant with $400 million of liquidity and is its primary liquidity source for
purposes allowed by Chapter 80.08 RCW. The requested authority will allow the Applicant to amend,
or amend and restate, or replace the facility with an amended, or amended and restated, or
replacement revolving credit facility.
The Credit Facility will amend, or amend and extend or replace the existing credit facility and provide
the Applicant with the continued ability to borrow and repay these amounts as needed for daily
operational requirements. The Applicant, at its option, can rollover these borrowings at revised
interest rates during the term of the Credit Facility without the initial borrowings being repaid in cash
until the expiration of the term of the Credit Facility. The aggregate borrowings outstanding under the
Credit Facility will be limited to $500,000,000. Similar to the existing credit facility, interest will be
charged under the Credit Facility at rates set by the tenure of the requested borrowings and the
applicable interest rate spread. The Credit Facility will also include the ability to issue letters of credit,
similar to the provisions of the existing credit facility. The Applicant anticipates that the Credit Facility
Page I of4
Exhibit D-l
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 and Deed of Trust. The existing facility is similarly
secured with First Mortgage Bonds.
Amount: $500,000,000 in aggregate.
Date of lssue and Maturity: The Credit Facility is expected to have an initial term of five years expiring
in 2019 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
Facility is notexpected to exceed 1%, including feesforco-lead arrangers (fee paid fororganizing the
syndication of the Credit Facility, expected to range from 0.075% to 0.10%) and upfront fees (fee paid
for the banks' initial commitment of capital upon closing the Credit Facility, expected to range from
0.12o/o to 0.30%), and agency fees (annual fee paid to the lead bank for administering the Credit
Facility expected to range from $35,000 to $50,000 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:
Pricing Level Facilityfundrawn
Fee
Eurodollar
Margin (r)Alternate Base
Rate Margin (2)
T
(ereater than or equal to NA2\0.r00%0.775a/o 0.000%
II
(A-lA3)0.125%0.87s%o 0.000%
III
(BBB+/Baal)0.175%0.950%0.000%
IV
(BBB/Baa2)0.200%1.050%1.050%
V
(BBB-/Baa3)0.250%1.250%t.2s0%
VI
(less than or equal to BB+/Ba1)0.300o/o 1.4500/,1.4500
1 Eurodollar Margin applies for bonowings with a term of at least two weeks. The rate will be the applicable LIBOR
rate plus the Eurodollar Margin.
2Alternate Base Rate Margin applies for borrowings of less than two 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 LIBOR rate plus
1.00o/o.
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 A-lA2 (i.e. Pricing Level l). The credit facility
agreement indicates that in the event the Applicant's senior secured debt ratings are split by one
level, the higher rating will apply. ln the event the ratings are split by more than one level, the level
that is one level below the higher rating will 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 ls ln the Public lnterest.
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Exhibit D-l
The requested authority will allow the Applicant to continue manage its daily cash needs consistent
with purposes allowed by Chapter 80.08 RCW. 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.
Done at Spokane, Washington tnis ffi-ay of February 2014.
AVISTA CORPORATION
By:
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Exhibit D-l
STATE OF WASHINGTON )
County of Spokane )
The undersigned certifies under penalty of perjury under the laws of the State of Washington that the
foregoing is true and correct to the best of my knowledge and belief, and that the proposed issuance of
securities will be used for the purposes allowed by Chapter 80.08 RCW.
Done at spokane, washington tnis 6y of February
SUBSCRIBED AND SWORN tO bEfOrE ME this13 aayofFebruary2014 ....*TIJ,.lk
My Commission Expires:
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Krasselt
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Exhibit D-2
PROPOSED ORDER OF APPLICANT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
!N THE MATTER OF THE APPLICATION OF
AVISTA CORPORATION FOR AN ORDER
AUTHORIZING A CREDIT FACILITY NOT TO
EXCEED $500,000,000
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)
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CASE NO.
ORDER NO.
On [DATE], Avista Corporation (Avista) filed an Application with the ldaho Public Utilities
Commission (Commission) requesting an Order authorizing Avista to amend, or amend and restate, or
replace its existing credit facility with a credit facility of up to $500,000,000 in aggregate principal amount
at any time outstanding with a term of up to 5 years expiring in 2019, subject to extensions not to exceed
two additional years, 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 facility or
any of the foregoing (collectively, the "Credit Facility"). The Credit Facility will amend, or amend and
restate, or replace the existing credit facility that will expire in February 2017. 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 amend, or amend and restate, or replace its existing
credit facility including, without limitation, continuing authority for any refunding, extension, renewal or
replacement of the Credit Facility. The net proceeds of the Credit Facility will be used for (a) the acquisition
of property, or the construction, completion, extension or improvement of its facilities, (b) 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 transactions, other than underwriting/arranging
fees, commitment fees, agency fees, and fees for legal, accounting or similar professional or technical
services, or (2) for services in securing lenders in the Credit Facility.
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Exhibit D-2
FINDINGS OF FACT AND
CONGLUSIONS OF LAW
Avista is a Washington corporation qualified to do business in the State of ldaho. Avista is a public
utili$ 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 ldaho
Code $ 61-117, an electric corporation within the definition of ldaho Code $ 61-119, and a public utility
within the definition of ldaho Code $ 61-129. The Commission has jurisdiction over this Application
pursuant to the provisions ol ldaho 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 ldaho Code $ 61-905.
The Commission finds that the proposed Credit Facility 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 Facility 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 Facility 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 ldaho.
ORDER
lT lS HEREBY ORDERED that Avista's Application for authority to amend, amend and restate, or
replace its current credit facility with a Credit Facility of up to $500,000,000 in aggregate principal amount
at any time outstanding with a term of up to 5 years, subject to extensions not to exceed two additional
years, 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)1, notes and other evidences of indebtedness, including, without limitation,
assumption of any obligation or liability as guarantor, indorser, surety or othenrvise 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, under the terms and conditions and for the
purposes set forth in the Application and this Order is granted.
lT lS 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 maintiains 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 lnvestors ' Service, lnc). lf Avista's
Page2 ol4
Exhibit D-2
senior secured debt rating falls below either such rating ("Downgrade"), the Company's authority to incur
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 (the "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 (a
"Supplemental Orde/') authorizing the Company to continue to make borrowings as provided in the Order,
notwithstanding the Downgrade. Untilthe Company receives a Supplemental Order, any borrowings made
by Avista during the Continued Authorization Period will 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.
lT lS FURTHER ORDERED that Avista shall file the terms of the proposed issuance(s) of
securities in connection with the Credit Facility, 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 Facility.
lT lS 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 lssued," and
(b) Verified copies of any Credit Agreement entered into pursuant to this Order.
lT lS 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.
lT lS FURTHER ORDERED that nothing in this Order and no provisions of Chapter 9, Title 61,
ldaho Code, or any act or deed done or performed in connection therewith shall be construed to obligate
the State of ldaho to pay or guarantee in any manner whatsoever any security authorized, issued,
assumed or guaranteed under the provisions of Chapter 9, Title 61 ldaho Code.
lT lS 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 lS 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
Page 3 of 4
Exhibit D-2
petitioned for reconsideration, any other person may cross-petition for reconsideration. See ldaho Code $
61626.
DONE by Order of the ldaho Public Utilities Commission at Boise, ldaho this XX day of MONTH,
2014.
, COMMISSIONER
, COMMISSIONER
, COMMISSIONER
ATTEST:
Commission Secretary
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