960422.docx

DECISION MEMORANDUM
TO:COMMISSIONERNELSON
COMMISSIONER SMITH
COMMISSIONER HANSEN
MYRNA WALTERS
STEPHANIE MILLER
DAVID SCHUNKE
DON HOWELL
SUSAN HAMLIN
BEVERLY BARKER
GARY RICHARDSON
TONYA CLARK
WORKING FILE
FROM:TERRI CARLOCK
DATE:APRIL 22, 1996
SUBJECT:PACIFICORP $250 MILLION PREFERRED STOCK AUTHORITY
AMENDMENT FOR TYPE OF ISSUE; CASE NO. PAC-S-96-2
RECOMMEND:APPROVAL
PacifiCorp requests authority to amend Order No. 26407 to expand the $250 Million in preferred stock authority to also include issuances of subordinated debt in the form of qualified income debt securities (QUIDS) through a special purpose entity (SPE).  The expanded authority would allow the company to obtain the tax advantages of debt but retain the rating advantages of preferred equity.  A similar authority was previously authorized in
PAC-S-94-2.
PacifiCorp requests all other terms of Order No. 26407 including that the debt authority be continuous and remain effective as long as PacifiCorp’s senior secured debt rating is A- or higher from at least two nationally recognized rating agenciesremain in force.
STAFF DISCUSSION AND RECOMMENDATION
I recommend approval with the condition that PacifiCorp be required to show the overall cost is favorable to other preferred issues.  The language used in PAC-S-94-2, Order No. 25697 is “A schedule with documentation showing that the security issuance utilized will be a low-cost option compared to other preferred stock issues.  This information can be provided simultaneous with the ‘Report of Securities Issued’.”  
COMMISSION DECISION
Should the expansion to allow QUIDS be approved?
If approved should the authority include the same reporting language as in PAC-S-94-2?
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TC/pacs962.amdTerri Carlock