20211209Application.pdf

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BEFORE THE IDAHO PUBLIC UTILIT1ES COMMISSION
L II,i !r=ala\t!1; iulu\ltJliln the Matterof the Application of
AVISTA CORPORATION for an Order authorizing
the offering, Esuance and sale of Debt Securities
not to exceed $400,000,000.
cAsE NO. Auh' t^- rv-o3
Application is hereby made to the ldahd Public Utilities Cornmission (Commission) under the provisions
of Section 6l-901 and 61-902, ldaho Code (Lam of 1951, Chapter 143)for an Order authorizing lhe
proposed offering, bsuance and sale by the Applicant of up to $400,000,000 of Debt Securitbs. The
requested authority is ln addition to the previously granted by the Commissbn for the issuane of Debt
Securilies in Order No. 34386 in Caee No. AW-U-19-02 entered July 31, 2019, under which
$3 1 0,000, 000 remains authorized but unissued.
The folloring information and specifr exhibits are fumished in support thereof
(a) Name and address of orincioal bueiness office:
Avista Corporation
1411 East Miseion Avenue
Spokane WA 99202-2600
Name of reoresentative for service:
Jason E. Lang, Assistrant Treasurer
Avista Corporatbn
141'1 East Mlssion Avenue, MSC-7
Spokane, t/t*ashington 99202-2600
Phone: [phone]
Ernail: Jason. [e-mail]
Email: [e-mail]
(b) State and dete of incorooration:
Incorporated Vtlashington Tenitory (norv the Strate of Washingrton) on March 15, 1889. The term of
incorporation is perpetual.
As a oublic utility Apolicant is oualified to do business in:
Washington, ldaho, Montana, and Oregon.
(c) General description of business. orooertv. and tenitory served:
The Applicant is a public utility which owns and operates propeny in Northem ldaho, Eastem
Washington, Centraland Southwest Oregon and Western Montana.
The Applicant is engaged in the generation, transmission, distribution and sale of elactric energy,
which it sells at retailto approxirndely 402,000 residential, commercial, and industrialcustomers in
Northem ldaho, Eastern Washington, and Westem Montana, and at wholesale to public utilities,
municipalities and others. 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 porver statlone, which it owns in whole or in part, or obtained by purchase or
exchange from other utilities, go/emmental agencies or lhird parties.
The Applicant is also engaged in the distribution and sale of natural gas to approximately 368,000
residential, commerclaland industrialcustomers in Northem ldaho, Eaetem Washington and Central
and Southweet Oregon.
(d) Descriotion of securities. lndebtedneFe or liabilities:
Pursuant to Rule 142 ot the Rulea of Pradice and Procedure, the Applicant hereby Files the
application filed with the Washington utilities and Transportatlon 6mmission as Exhibit "D-1" in lieu
of the application required by Rule 141. Applicant further states that:
(1) Applicant hat published or will haw published wihin seven days of the date of filing this
Application a notice in those newspapers listed in Rule 141.08 of the Rules of Practhe and
Prooedure dthe ldaho Public Utllfties Commission that are in general circulation in Applicant's
service area.
(2)Attached Exhibits:
Exhibit D-1 Copy of Washington Application
Exhiblt D-2 Form of ldaho Order
WHEREFORE, the fuplicant respecifully requests the ldaho Publb Utiliths Conrmission for an Order
authorizing Avista Corporatbn (hereinafter called "Applicant') to issue and sell up to and including
S400,000,000 in Debt Secudties (such arnount being in addition to $600,000,000 prariously authorized
by the Commissbn in Order No. 34386, in Case No. AVU-U-19O2 entered July 31, 2019, under which
$310,000,000 remains authorized but unissued, for a total of $710,000,000).
Dated 9th day of December, 2021
AVISTA CORPORATION
Mark T. Thies
Executive Mce President, CFO, and Treasurer
STATE OF WASHINGTON
COUNTY OF SPOKANE
l, Mark T. Thies, being duly Eworn, 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 knorvs the contents thereof; and that the sarne is true of his orn knowledge and belief,
and as to those matters he believes them to be lrue.
Mark T. Thies
Executive Mce President, CFO, and Treasurer
n
SUBSCRIBED AND SI DRN to bebre me this
9th day of December,2021.
By
tl tl )', i.1,,',- l,'., r / lr,
p0TARY
PUBLICNotary Public for Washington
Exhibit D-2
PROPOSED ORDER
BEFORE THE IDAHO PT]BLIC UTILITIES COMMISSION
IN THE MATTER OF TIIE APPLICATION
OF AVISTA CORPORATION TO ISSI]E TIP
TO M00,000,000 oF DEBT sEcuRrrrEs
ORDER NO.
On 2021, Avista Corporation applied to the Idatro Public Utilities
Commission for an Order allowing Avista to issue up to $400,000,000 of Debt Securities. The
requested authority is in addition to the authority previously granted by the Idaho Public Utilities
Commission for the issuance of Debt Securities in Order No. 34386, in Case No. AVU-U-19-02
entered July 31, 2019, under which $310,000,000 reurains authorized but unissued. The
Commission's Staffhas reviewed the Application and recommends that the Commission approve
the requested offering.
Based on our review of the record, we issue this Order approving the Application as noted
below.
BACKGROIDID
Idaho Code $$ 6l-901 through 6l-909 govern the issuance of securities by public utilities.
In summary, "when authorized by order of the commission and not otherwise, [public utilities]
may issue stocks and stock certificates and may issue, assume or guarantee bonds or other
securities payable at periods of more than twelve (12) months after the date thereof.. .." Idaho
Code $ 6l-901. The statutes permit utilities to issue securities for the following purposes:
Acquiring property; building, completing, extending, or improving utility facilities; improving or
maintaining utility service; discharging or lawfully refunding utility obligations; reimbursing
money that the utility has expended to accomplish these purposes from income or other money in
)
)
)
)
CASE NO.
the treasury that is not secured by or obtained from the issue, assumption or guarantee of securities;
and accomplishing any other Commission-approved purpose. Idaho Code $ 6l-901.
To obtain the Commission's order, the utility must file an application and pay a statutory
fee. Idaho Code $$ 6l-902 and -905. The Commission then must dispose of the application within
thirty days, absent an earlier finding of good cause to issue a later order. Idaho Code $ 6l-904.
The Commission must grant the application unless it finds, for good cause shown, that the
proposed issuance would be (l) inconsistent with the public interest and not necessary or
appropriate for or consistent with the applicant's proper performance of its service as a public
utility or (2) for an impermissible purpose. Idaho Code$ 6l-902.
If the utility obtains the Commission's authorization to issue securities, then the utility may
issue the authorized securities for the limited purposes expressed in the statute or allowed by the
Commissior.Idaho Code $ 6l-901.
TIIE APPLICATION
Avista is a Washington corporation that is qualified to do business in the State of Idaho. It
is a public utility that provides electric and natural gas service to customers in northern Idaho,
eastern Washington and central and southwest Oregon.
With this Application, Avista requests the Commission issue an Order authorizing Avista
Corporation (hereinafter called "Applicant") to issue and sell up to and including $400,000,000 in
Debt Securities (such being in addition to $600,000,000 previously authorized by the Commission
in Order No . 34386, in Case No. AW-U -19-02 entered July 3 1 , 201 9, under which $3 1 0,000,000
remains authorized but unissued, for a total of $710,000,000). Avista explains it would use the net
proceeds from the issuances for one or more of the following purposes: (1) investrnents 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,
-2-
extension or improvement of its utility facilities, and improvement or maintenance of its utility
service, all as contemplated 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
the discharge or refunding of other obligations, (3) the reimbursement of moneys actually
expended from income or from other moneys in the treasury of the Applicant (to the extent not
secured by or obtained from the issue, assumption or guarantee of securities) for any of the
purposes described in (1) or (2) above and/or (4) such other purposes as may be permitted by law.
STAFF REVIEW
Commission Staff reviewed Avista's Application. Based on that review, Staff
recommended the Commission allow Avista to issue $400,000,000 of debt securities as requested.
Staffobserved the proposed issuance would not significantly affect Avista's capital structure and
would not impair the Company's ability to maintain its debt- to-equity ratio. Staff thus
recommended the Commission approve the Application.
FINDINGS OF FACT AI\D CONCLUSIONS OF LAW
The Commission finds that Avista Corporation is a Washington corporation that is
qualified to do business in Idaho. The Company 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. The Company is a gas corporation within the definition of ldaho Code $ 6l-
ll7 , an electrical corporation within the definition of ldaho Code $ 6l - 1 19, and a public utility
within the definition of ldaho Code $ 6l-129. The Commission has jurisdiction over this
Application under ldaho Code $ 6l-901, et seq.
Avista's Application reasonably conforms to Rules l4l through 150 of the Commission's
Rules of Procedure (IDAPA 31.01.01.141-150), and Avista has paid all fees required by ldaho
Code $ 6l-905.
-3-
The proposed issuance is for a lawful purpose, is within Avista's corporate powers, and is
compatible with the public interest.
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 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 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 Corporation, as of is hereby
authorized to offer, issue and sell up to and including $400,000,000 in Debt Securities (such
amount being in addition to $600,000,000 previously authorized by the Commission in Order No.
34386, in Case No. AW-U-19-02 entered July 31, 2019, under which $310,000,000 remains
authorized but unissued, for a total of $71 0,000,000).
IT IS FURTHER ORDERED that Avista shall file the following as they become available:
l. The "Report of Securities Issued" required by l8 C.F.R. $ 34.10; and
2. Verified copies of any Agreement entered into pursuant to this Order.
IT IS FURTHER ORDERED that the issuance of this Order does not constitute acceptance
of Avista's exhibits or other material accompanying this Application for any purpose other than
the issuance of this Order.
IT IS FURTHER ORDERED that nothing in this Order or any act or deed performed in
connection with this Order shall be construed to obligate the State of Idaho to pay or guarantee in
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any manner whatsoever any security authorized, iszued, assumed or guaranteed under the
provisions of this Order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the
Commission's regulatory authority regarding rates, service, accounts, evaluation estimates or
determination of costs or any other matter which may come before the Commission pursuant to its
jurisdiction and authority as provided by law.
THIS IS A FINAL ORDER. Any person interested in the Order (or in issues decided by
this Order) may petition for reconsideration within twenty-one (21) days of the service date ofthis
Order with regard to any matter decided in this Order and in this case. Within seven (7) days after
any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See ldaho Code $$ 61-626 and 62-619.
-5-
DONE by Orrdo of the Idaho Public Utilities Commission at Boise, Idaho this _ day of
2021.
Paul Kjellander, PRESIDENT
Iftistine Rry€r, COMMISSIONER
Eric Anderson, COMMISSIONER
ATTEST:
JanNoriyuki
Commission Secretary
.G
BEFORE THE
WASHI NGTON UTI LMES AND TRANSPORTATION COMMISSION
ln the matter of the request of
AVISTA CORPORATION
for an ordar establiahing oornpliance
with RCW 80.08.040 with reepec't to Proposad
lssuance of rp to $400,000,000 of additionalDebtsecudtbs )
Avista Gorporation (hereinafter called "Applicant) hereby requests the Washington Utilities and
Transportatbn Cornmission enter a written order authorizing the Applicant to issue up to $400,000,0fl) of
Debt Securities. The Debt Securities will be bsued via public offerings or private placements, and are
e:eected to have terms which will exceed g months, all depending on and subjecl to then-existing rnarket
pries for similar transac'tione.
The requested authority to issue Debt Securities is in addition to the authority previously granted by the
Washington Utilities and Trarsportation Commission for the issuance of debt sccurtties under Order No.
01, entered September 12,2019, in Docket No. U-l90554, of whlch $310,000,000 remains evailable for
issuance, for a total of $710,000,000.
The terms of the financing are described in rnore detail in Seclion 2 of this apptlcation.
The follouring information is furnished in support of this applicatbn, in accordance with the requirements of
RCW80.08.O40:
(1) A Deccrlptlon of the Purpoeee for Ulrhich the lssuance ls ilade, lncluding a Certlflcatlon By
an Oflicer Authorlzed To Do 8o That the Proceedg From Any Such Securities ArE For One
Or More of the Purpooec Allowed By Chapter 80.08 RCW.
The Applbant will use the proceeds frorn the issuance of Debt Securitles for one or more of the following
purposes:(a) investments in the Applicant's utility plant facilities to enhance service ard system
reliability, to replace aging inftastruc{ure, and, generally, for the acquisition of property or the
construclion, completion, extension or improvement of its utility facilities, and improvement or
maintenance of its utility service, allas contemphted in its then+unent integrated resouroe plan as filed
with the Commission, (b) the retirement of maturing long{erm debt, the repayment of short-term debt
and the dischargs or refunding of other obligations, (c) the reimbursement of moneys actually expended
from income or fnom any other moneys in the treasury of the Applicant br any of the purposes deacribed
in (a) and/or (b) above (to the extent permlted by RCW 80.08.030), (d) and or euch other purposes as
may be permitted by law.
The purposes described in the preceding paragraph are allowed by RCW 80.08.030.
(2) A Description of the Proposed lsauance lncluding the Terms of Financing.
The Applicant proposes to offer, issue and sellthe Debt Securities, in an aggregate principal arnounl not to
exceed $400,000,000 (addition to the authori$ previously granted by the Washington Wlities and
Transportation Commission for the issuance of debt eecurities under Order No. 01, entered September 12,
2019, in Docket No, U-190554, of which $310,000,000 remains available for issuance), maturing not less
than nine (9) months nor more than fifly (50) years from the date of initial authorization and delivery.
The Debt Securities could (1) be secured or unsecured, (2) bear interest at a fixed or ltoating rate and (3) be
sold in public ofbrings, in private offerings in accordance with Rule 14,4A under the Securities Act of 1933,
as amended, or in direct private placernents, or issued to secure a term loan enangement with lenders, issued
and delivered ln exchange for outstanding debt securities of the Company and/or any combinatircn of the
foregoing.
Applicatbn
Docket No.
Page 1 of6
lf the Company issues secured debt it would do so by issuing First Mortgage Bonds (FMBs). FMBs have
been the traditional debt financing vehicle utilized by most utilities in the U.S., and can be offered in both
public offerings and private placement. FMBs are secured by the lien of the lvlortgage and Deed of Trust,
dated as of June 1, 1939. as amended and supplunented by various supplemental indentures and other
instruments. This lien secures the FMBs, and the FMBs should have higher ratings by nationally recognized
rating agencies than unsecured debt. This higher credit rating should lead to a lourer interest rate al the lime
of issuance as compared to unsecure debt. See Exhibit B for most current indicative secured fixed interest
rate spreads.
Unsecured debt would not be secured by any lien on assets of the Company and, accordingly, should have
lower ratings by nationally recognized rating agencies rating than secured debt. Unsecured debt typically has
a higher interest rate at the time of issuance than secured debt. See Exhibit C for cunent indicative unsecured
fixed interest rate spreads.
lf the Company issues Debt Securities with a fixed rate, the interest rate will nol change through the life of
the Debt Securities.
lf tlre Company bsues Debt Securities with a floating interest rate, the interest rate will reset periodically, such
as daily, weekly, monthly, quarterly, semi-annually or annually. The most common indices used for pricing
floating+ate Debt Securities are based upon the Secured OvernQht Financing Rate (SOFR), comrnercial
paper and/or U.S. Treasury rates.
Undenrriters or placement agents for the sale of Debt Securities will be selected from a group of potential
candidates. The firm or firms selected to be underwriters or placement agents in an offering under this
authori$ will be determined by the Applicant's opinion of their ability to assist lhe Applicant in meeting its
objeciives for the Debt Securities to be issued. This opinion is based upon the level of uMerwriting or
placement fees, their knorledge of the Applicant and its varied operations, and their ability to ma*et the Debt
Securities to achieve the Applicant's financing and capital struciure objectives.
The Applicant also requests authority to issue Debt Securities. without further Commission approval, even if
total spreads exceed those shown in Exhibit B and Exhibit C so long as the coupon rate does not exceed 8.0
percent per annum in order to provkle additional flexibility in the event spreads widen when the Applicant
decides to issue any Debt Securities.
(3) Statement As To Why The Transaction ls ln the Public lnterest.
The requested authority would provide part of the financing necessary to allow the Applicant to carry out the
purposes described ln paragraph 1 above and, thus, to continue to conducl its operations as an electric and
gas utility company on a reliable basis for the benefit of its customers. \Mthout such financing, the Applicant
could not continue to conduct its operations as such. Accordingly, the Applicant believes 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 D'.
The undersigned, an authorized agent of the Applicant, certifies under penalty of perjury under the laws of
the State of Washington that the foregoing is true and conect to the best of my knorledge and belief, and
that the proposed issuance of securities will be used for the purposes allowed by Chapter 80.08 RCW and
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.
Page 2 of 6
t}abd S Day cf Deenber2@l.
AVISTA CORPORAT1ON
By:
MarkT. Thbs
Erceuhm \rhe
Treaurer
Pr€8ident, CFO, and
STATE OF WASHI.IGTO}.I
cot Nw oF sPol(AilE
l, Mafi T. Thba, being duly suom, under penalty d periury rhpoaar and eayt: Tlut hc b Ex€cuhre
Vice Pmddsnt, CFO, andTreaurerdAVISTACORPORATION: that ho hasr?ad&eforegofrrgapptcdlon
and knowlfn contsrtaheraot and thd the aame btue of hb own knordcdge and belief, and a bhooo
mataru ho bcliwcs hsn to bc tn s.
)
)
)
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MerkT. Thhs
E:acot0w Vhe President, CFO, and Tre*urer
ST BSCRIBED At{D SIIORN to bdor€ mc tfib
Sr day December,2O21.
Notery PuHic for Washington
I0TARI
PUgLIC
Pago 3 dB
ElhhitA
Gross Procceds
Lsss: AgentgtJndemriters
Compensation
Proeeds Payable to Applicant
Lees: other lssuance/Teehnbal Seryioes Exp€nsss tzttsxrl
Net Proceeds
Rding ag€noy fees
Legal fees
Regulatory fees
Acmuntingftee
Pffitlng
Miscelhneous sxpensss
Btlmated l,let ProceeGlt,
. Total
wD.000,000
3,500,000
396,500,000
3.720.000
$500,000
500,000
75,000
100,000
75,000
120.000
$1,370,000
Pacant of Total
100.00%
0.875%
w.125%
0.93%
98.207o
(1) Assumec the iseuance d First Mortgage Bonde.
(2) O$cr laruanct/Technlcal Servlcec Experucs for Each lscuance
to
to
to
to
to
to
3300,000
300,000
50,000
50,000
50.000
80,000
$830,000
(3)Fkat Mortgge Bonds EsUm&d lsouance Fees and Expensee
TOTAL
Legal
Tille lnsurance
County Filing Feceatd Oher
Total
S75.000 To
80,000 To
30,000 To
$150,000
240,000
100.000
(4)
$185,000 s490.000
Thls will likely be done in muliple issuances. As euch, $re are estimating issuanca/technical service
expenses for eacfi issuance.
Page4 d6
EldrbtE
SecuudtatoS@
Tlo foIovirg are muirnum lndlcqtiva sprrads br \6ri('ui mefifrG syer the applic$lc 0cndtrnad< treaeunT
yicU. A. dabd ln Scdion 2 UE Appllcent requcata erttroily to isrue Dcbt Scari0et wthod turfier
Ccrmhnim ryo\rd illprea& wcd wlrC b prwfulcd h ttb BfiUt, r lotp s the coryon tatc &os oot
orood 8.0 pctwrtpcrannum. THe bmcsrttoprovidc addfifi.lllcxbilfiy inthccnerilsprcedswftlenufren
tuApplioad deddeto banany debt,
Maxlmum
Sprerd Orcr
Benchma*
Dcbt Securl'ti€r Metrrlty Perbd Treasury
Yield
Glster than less than or equal to
(>)
9M
1Y
2Y
3Y
4Y
5Y
7t
8Y
9Y
10Y
15Y
20Y
25Y
30Y
{ups)
185
190
195
200
205
210
215
220
230
265
240
2/$5
245
255
(3)
lY
2Y
3Y
4Y
5Y
7,1
8Y
9Y
10Y
15Y
20Y
25Y
30Y
moreOr
Page 0 of6
BfiilritC
Unsecured lntorsst R# Spude
The blloving are rnexlmum indioatit B eprcads br verlous mdurities overtte applicable borcfirnarktresury
yiets. Fc staled in Sedbn 2 $e Applicant requests authority to bsue Debl Securitieo wlhout furtter
Conrnisokm approval irsfi€ads oeed what b profiled in this Exhbit, as loilg c the coupon rde doee nd
exoeed 8.0 percent p€r annum. Thb is meant lo prorrirte addlfronal flexbilty in tho arerlt epred witlcn rvhen
the Applicant deckdee to bsue any debt.
Maxlrnum
Spread Over
Benchma*
Treasury
Debt Securlties MaturiW Period Yleld
Greaterthan Le-ss than sr equal to
(!l
1Y
2Y
3Y
4Y
5Y
w
8Y
9Y
10Y
15Y
20Y
25Y
30Y
(>)
OY
1Y
2Y
3Y
4Y
5Y
7,1
8Y
9Y
10Y
t5Y
20Y
25Y
30Y more0r
(bp6l
215
220
225
230
235
240
245
25{)
260
295
270
275
27s
285
Pagc6 of 6