20210310Application.pdf

fv1arch 10, 2021
State of Idaho
Idaho Public Utilities Commission
Statehouse
Boise ID 83720
Attention: Jean D. Jewell, Secretary
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Transmitted herewith are the processing check of $1,000 and copies of the legal
notices published in the Lewiston Tribune and the Coeur d'Alene Press related to
our application requesting authorization to enter into a credit facility of up to
$500,000,000. If other applicable data or documents become available, they will be
forwarded to your attention.
If any questions arise or additional information is needed, please do not hesitate to
contact Karrie Wilson at 509-495-2345.
Sincerely,
Jason E. Lang
Assistant Treasurer
Enclosures
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In 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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CASE NO. Avu..-u..-a ,_o,
Application is hereby made by Avista Corporation ("Avista" or "Applicant") to the Idaho
Public Utilities Commission under the provisions of Section 61-901 and 61-902, Idaho Code
(Lavvs of 1951, Chapter 143) for an Order authorizing Avista to amend, amend and restate,
or replace its current credit facility \11/ith a credit facility under which Avista may borrow an
aggregate principal amount of up to $500,000,000 at any time outstanding, \11/ith an initial
term of up to five (5) years, and also potentially including an option to extend the initial
term prior to its expiration for up to tv.o (2) additional years, and in connection there\11/ith to
offer, issue and sell certain secured or unsecured bonds (including First Mortgage Bonds
issued under Avista's Mortgage and Deed of Trust, dated June 1, 1939, as amended and
supplemented), notes and other evidences of indebtedness, including any refunding,
extension, renewal or replacement of such credit facility or any of the foregoing
(collectively, the "Credit Facility"). The Credit Facility may be secured and \II/ill replace
Avista's current credit facility that expires in April 2022.
The follo\11/ing information and specific exhibits are furnished in support thereof:
(a) Name and address of principal business office:
Avista Corporation
1411 East Mission Avenue
Spokane WA 99202-2600
Name of representative for service:
Jason Lang, Assistant Treasurer
Avista Corporation
1411 East Mission Avenue, MSC-7
Spokane, Washington 99202-2600
Phone: [phone]
(b) State and date of incorporation:
(c)
(d)
Incorporated Washington Territory (now the State of Washington) on March 15,
1889. The term of incorporation is perpetual.
States in IIIAlich qualified to do business:
Washington, Idaho, Montana, and Oregon.
General description of business. property, and territory served:
The Applicant is a public utility IIIAlich owns and operates property in Eastern
Washington, Northern Idaho, Western Montana, and Central & Southwest Oregon.
The Applicant is engaged in the generation, transmission, distribution, and sale of
electric energy, IIIAlich it sells at retail to approximately 400,000 residential,
commercial, and industrial customers in Eastern Washington, Northern Idaho and
Western Montana, and at IIIAlolesale 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, IIIAlich it owns in IIIAlole 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 367,000 residential, commercial and industrial customers in Eastern
Washington, Northern Idaho, and Central & Southwest Oregon.
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 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 Idaho 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 Idaho Order
WHEREFORE, the Applicant respectfully requests the Idaho Public Utilities Commission
issue an Order authorizing Avista to amend, amend and restate, or replace its current credit
facility with a Credit Facility under which Avista may borrow an aggregate principal amount
of up to $500,000,000 at any time outstanding, with an initial term of up to five (5) years,
and also potentially including an option to extend the initial term prior to its expiration for up
to too (2) 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, 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 9th day of March 2021
AVISTA CORPORATION
By
Mark T. Thies
Executive Vice President, CFO and Treasurer
STATE OF WASHINGTON
County of Spokane
Mark T. Thies, being duly SV\Orn, under penalty of perjury deposes and says: That
he is Executive Vice President, CFO and 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.
Mark T. Thies
E,cecutive Vice President, CFO and Treasurer
SUBSCRIBED AND S\I\ORN to before me this .1 day of H al'2021
Notary Public for Washington
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RAEAN CORNELL
Notary Public
State of Washington
My Appointment Expires
Jan 30. 2022 ------ ---
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BEFORE THE
WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION
In the Matter of the Application of )
AVISTA CORPORATION )
for an Order Establishing Compliance )
with RCW 80.08.040 with Respect to Proposed )
issuance of up to $500,000,000 of debt )
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Application
Docket No.
Exhibit D-1
Avista Corporation (hereinafter called "Applicant") hereby requests the Washington Utilities and
Transportation Commission enter a written order authorizing the Applicant to amend, amend and restate,
or replace its current credit facility with a re\Olving credit facility under which Applicant may borrow an
aggregate principal amount of up to $500,000,000 at any time outstanding, with an initial term of up to fiw
(5) years, and also potentially including an option to extend the initial term prior to its expiration for up to
two (2) additional years, and in connection therewith to issue 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 under the credit facility, all fer
the purposes permitted by and under the authority of RCW 80.08, including any refunding, extension,
renewal or replacement of such credit facility or any of the foregoing (collectiwly, the "Credit Facility"), and
confirming compliance with the requirements of RCW 80.08.040.
The following information is furnished in support of this application, in accordance with the requirements d
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 will use the funds borrowed under the new Credit Facility for one or more of the
following purposes : (a) inwstments in the Applicant's utility plant facilities to enhance service and
system reliability, to replace aging infrastructure, and, generally, for the acquisition of property or
the construction, completion, extension or improwment of its utility facilities , and improwment or
maintenance of its utility service, all as contemplated in its then-current integrated resource plan as
filed with the Commission, (b) the retirement of maturing long-term debt, the repayment of short­
term debt and the discharge or refunding of other obligations, (c) the reimbursement of moneys
actually expended from income or from any other moneys in the treasury of the Applicant for any d
the purposes described in (a) and/or (b) abow (to the extent permitted by RCW 80.08.030), (d) for
any other proper purposes not in violation of any provision of RCW 80.08 or any other law and/or
(e) to provide liquidity for its daily operational cash requirements in respect of or resulting from
payments or reimbursements related to the purposes described in (a), (b), (c) and/or (d) abow and
for such other purposes, as may be permitted by law.
The purposes described in the preceding paragraph are allowed by RCW 80.08.
(2) A Description of the Proposed Issuance Including the Terms of Financing.
Owrview:
The Applicant has an existing creditfacility that will expire in April 2022. This existing credit facility
provides the Applicant with $400,000,000 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 existing creditfacilitywith an amended, or amended and restata::I,
or replacement re\Olving credit facility .
The Credit Facility will amend, amend and restate, or replace the existing creditfacility and provide
the Applicant with the continued ability to borrow and repay these amounts as needed for daily
operational requirements . While the principal amount of each borrowing will be payable at the end
of the interest period for such borrowing, the Applicant, at its option, will be able, subject to the terms
Page 1 of4
4830-2027-3373v .100088333-000214
Exhibit D-1
of the Credit Facility, to rollo-.er borrowings at re1,,1sed interest rates during the term of the Credit
Facility withoutthe initial borrowings being repaid in cash until the expiration of the term of the Credit
Facility. Borrowings under the Credit Facility will ha-.e maturities of less than one year. The
aggregate principal amount of borrowings outstanding under the Credit Facility will be limited to rd
more than $500,000,000 at any time outstanding. Similar to the existing creditfacility, interest will
be charged under the Credit Facility at rates set by the term 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 pro1,,1sions of the existing credit facility. The Applicant anticipates trat the Credit
Facility will be secured by non-transferrable First Mortgage Bonds issued under the Applicant's
Mortgage and Deed of Trust, dated as of June 1, 1939, as amended and supplemented. The
Applicant's obligations on these First Mortgage Bonds would be deemed to be satisfied to the extent
the obligations under the Credit Facility are satisfied. The First Mortgage Bonds would ha-.e an
initial maturity date equal to the initial term of the Credit Facility, and would be subject to potential
extension if the maturity date of the Credit Facility is extended. 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: an aggregate principal amount of up to $500,000,000 at any time outstanding.
Date of Issue and Maturity: The Credit Facility is expected to ha-.e an initial term of up to fi-.e years
and also potentially including an option to extend the initial term prior to its expiration for up to two
additional years, if the Applicant and the banks agree.
Compensation to any bank or agent for their sef\nces in connection with the handling of the Credit
Facility is not expected to exceed 1 %, including fees for lead arrangers (fee paid for organizing 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 rallJe
from 0.12% to 0. 30% ), and agency fees (annual fee paid to the lead bank for administering the
Credit Facility expected to range from $40,000 to $50,000 annually).
Estimated fees and borrowing spreads, based on the Applicant's current senior secured debt rating
and current market information, are as follows :
Pricing Facility Fee Eurodollar ABRMargin LC Participation Fee
Le-.el Margin c1) (2)
I 0.075% 0.800% 0.000% 0.800%
II 0.100% 0.900% 0.000% 0.900%
Ill 0.125% 1.000% 0.000% 1.000%
IV 0.175% 1.075% 0.000% 1.075%
V 0.225% 1.275% 0.275% 1.275%
VI 0.275% 1.475% 0.475% 1.475%
'Eurodollar Margin applies for borrowingswith a term of at least two weeks The rate will be the applicable LIBOR
rate plus the Eurodollar Margin.
2 Alternate Base Rate Margin appliesforborrowingsof lessthan 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
1.00%.
As noted abo-.e the fees are based upon the Applicant's current senior secured debt rating. The
Applicant's senior secured debt ratings are currently A-/A3 (i.e. Pricing Le-.el Ill). In the e-.ent the
Applicant's senior secured debt ratings are split by one le-.el, the higher rating will apply. In the
e-.ent the ratings are split by more than one le-.el, the le-.el that is one le-.el below the higher rating
will apply.
(3) Statement As To Why The Transaction Is In the Public Interest.
The requested authority will pro1,,1de the Applicant the liquidity necessary for it to carry out the
purposes described in paragraph 1 abo-.e and, thus, to continue to conduct its operations as an
Page 2 of 4
4830-2027-3373v.10 0088333-000214
Exhibit D-1
electric and gas utility company on a reliable basis for the benefit of its customers. Withrut such
liquidity, the Applicant could not continue to conduct its operations as such. Accordingly, the
Applicant beliews that 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 an order as requested herein.
Done at Spokane, Washington this 9th day of March 2021 .
Mark T. Thies
Executiw Vice President, CFO and Treasurer
Page 3 of 4
4830-2027-3373v .10 0088333-000214
STA TE OF WASHINGTON
County of Spd(ane
Exhibit D-1
Toe 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 v,rilt be used for the purposes allowed by Cha~er 80.08 RCW.
Done at Spokane, Washington this 9th day ofMfil:.di2021.
By:
Mark T. Thies
Executiw Vice President, CFO and Treasurer
SUBSCRIBED AND SWORN to bebre me this ~ day of .mu._ 2021
Notary Public br Washington
My Commission Expires: f -'&0 • ~02.<...
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4'830-2027-337~.100088333-00021-4
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RAEANCORNELL • "h1"ry Public t Sta1'3 of Washington I My Appointment Expires
Jan 30. 2022 I ------
Proposed Order of Applicant
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FORAN ORDER
AUTHORIZING A CREDIT FACILITY
NOT TO EXCEED $500,000,000
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CASE NO.
ORDER NO.
Exhibit D-2
On [DATE], Avista Corporation ("Company" or "Avista") applied to the Idaho Public
utilities Commission for an Order authorizing Avista to amend, amend and restate, or replare
its current credit facility with a revolving credit facility under which the Company may borrow an
aggregate principal amount of up to $500,000,000 at any time outstanding, with an initial term
of up to five (5) years, and also potentially including an option to extend the inltial term prior to
its expiration for up to too (2) additional years, and in oonnection therewith to issue certain
secured or unsecured bonds (including Frst Mortgage Bonds issued under the Company's
Mortgage and Deed of Trust, dated June 1, 1939, as amended and supplemented), notes and
other evidenres of indebtedness under the credit facillty, including any refunding, extension,
renewal or replarement of such credit facility or any of the foregoing (oollectively, the "Credit
Facility").
The Commission, having oonsidered the record, enters this Order approving the
Application.
THE APPLICATION
Avista is a Washington oorporation qualified to do business in the State of Idaho. It
generates, transmits, distrbutes, and sells electricity in northern Idaho, eastern Washington,
and western Montana. It also distributes and sells natural gas in eastern Washington, northern
Idaho, and central and southwest Oregon.
With this Application, Avista asks the Commission to authorize it to amend, amend
and restate, or replare its current credit facility with the Credit Facility under which Avista may
borrow an aggregate principal amount of up to $500,000,000 at any time outstanding. The
initial term of the Credit Facility will be for up to five years, and also potentially including an
option to extend the initial term prior to its expiration for up to too additional years. In
Exhibit D-2
connection with the Credit Facility, Avista may issue secured or unsecured bonds (including
First Mortgage Bonds issued under the Company's Mortgage and Deed of Trust, dated June
1, 1939, as amended and supplemented), notes and other evidences of indebtedness under
the Credit Facility. Avista proposes that such credit facility or any of the foregoing may be
refunded, extended, renewed, or replaced within the authorized timeframe. The requested
authority will replace current credit facilities set to expire in April 2022.
Avista indicates it will use the proceeds for one or more of these purposes: (1)
investments in the Applicant's utility plant facilities to enhance service and system reliability, to
replace aging infrastructure, and, generally, to acquire property or oonstruct oomplete, extend,
or improve its facilities, and to improve or maintain its service, all as oontemplated in its then­
current integrated resource plan as filed with the Commission; (2) the retirement of maturing
long-term debt, the repayment of short-term debt and to discharge or refund its obligations; (3)
to reimburse money actually expended for these purposes from income or other money in the
treasury not secured or obtained from the issue, assumption or guarantee of securities; or (4) to
provide liquidity for its daily operational cash requirements in respect of or resulting from
payments or reimbursements related to the purposes described in ( 1 ), (2) and/or (3), and for
such other purposes, as may be permitted by law.
The estimated fees and borrowing spreads will be based on the Company's current
senior secured debt rating and current market information. Avista's current senior secured debt
ratings are A-/A3 based on industry metrics.
The Company also requests authority to issue, refund , extend, renew, or replace
indebtedness under the Credit Facility without further Commission approval. The issuance
oould allow the Company greater flexibility to manage its cash funds and reduce borrowing
costs, thereby permitting the Company to better manage its debt and capital in a more efficient
and cost-effective manner.
Documents filed with the Application indicate that no person has received or will be
entitled to receive from Avista any fee for services in connection with the consummation of the
above-referenced transactions, other than underwriting/arranging fees, syndication fees,
commitment fees, agency fees, upfront fees and fees for legal, accounting, or similar
professional or technical services.
Exhibit D-2
STAFF RECOMMENDATION
Staff recommended approval of the proposed Credit Facility under which the Company
may borrow in an aggregate principal amount of up to $500,000,000 at any time outstanding.
Staff also reoommended the authority be for an initial term of up to five years, and also
potentially including an option to extend the initial term prior to its expiration for up to tv\o
additional years. If the extensions are exercised, Staff recommended the Company be required
to file an nformational letter notifying the Commission of any extensions under this authority. In
addition, Staff reoommended that the authority under this initial approval be contnuing (without
further order required) for the initial term of up to five years plus any extensions up to tv.o
additional years.
COMMISSION FINDINGS AND DISCUSSION
Avista is a Washngton 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 an electric
corporation within the definition of Idaho Code § 61-119, a gas oorporation within the definition
of Idaho Code§ 61-117, and a public utility within the definition of Idaho Code § 61-129. The
Commission has jurisdiction over this Application under Idaho Code§ 61-901, et. seq.
The Company's Application reasonably conforms to Rules 141 through 150 of the
Commission's Rules of Procedure {IDAPA 31.01 .01 .141-150), and the Company has paid all
fees required by Idaho Code§ 61-905.
The Company's proposed issuance 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 issuance does not constitute agency
determination or approval of the type of financing or the related costs for ratemaking
purposes. The Commission does not have before it for determination, and does not
Exhibit D-2
determine, the effect of issuance on rates to be charged by the Company for gas or electric
services to customers in the State of Idaho.
ORDER
IT IS HEREBY ORDERED that Avista's Application for authority to amend, amend
and restate, or replace its current credit facility with the Credit Facility under which Avista may
borrow an aggregate principal amount of up to $500,000,000 at any time outstanding, with an
initial term of up to five years, and also potentially includng an option to extend the initial term
prior to its expiration for up to t\11,0 additional years , is granted.
IT IS FURTHER ORDERED that Avista shall promptly notify the Commission in
writing if it exercises any of the extensions referenced above .
IT IS FURTHER ORDERED that this authorization will remain in place for five years
from the date of execution of the credit agreement for the Credit Facility, plus any extensions
exercised up to t\11,0 additional years.
IT IS 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 days,
or as soon as possible, after the closing of the Credit Facility.
IT IS FURTHER ORDERED that Avista shall file the following as they come available:
(1) The "Report of Securities Issued;" and (2) Verified copies of any credit agreement entered
pursuant to this Order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the
Commission's regulatory authority regarding rates, utility capital structure, service accounts,
valuation estimates for determination of oosts or any other matter which may come before
the Commission pursuant to its jurisdiction as provided by law.
IT IS FURTHER ORDERED that nothing in this Order or any act or deed performed in
connection with this Order shall be oonstrued to obligate the State of Idaho to pay or guarantee
Exhibit D-2
in any manner whatsoever any serurity authorized, issued, assumed, or guaranteed under this
Order.
IT IS FURTHER ORDERED that issuing this Order does not oonstitute 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 servire date of this Order. Within seven (7)
days after any person has petitioned for reoonsideration, any other person may cross-petition
for reconsideration. See Idaho Code§ 61-626.
II/
Exhibit D-2
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this XX
day of [MONTH], 2021.
, COMMISSIONER
, COMMISSIONER
, COMMISSIONER
ATTEST:
Commission Secretary