Panel approves bill to let utilities issue bonds

BOISE – A House committee approved a measure Monday that would give Avista Corp. and other Idaho utilities a way to repay debt by issuing low-cost bonds, which proponents say would lead to a savings for North Idaho customers.

“Various pressures have caused the rates to go up for our customers, and this will provide some relief,” said Neil Colwell, a lobbyist for Avista. “We’re establishing a tool we might use to lower rates in the future.”

The bill still needs approval by the full House, Senate and the governor to become law.

Similar to a bill passed in 2001, it would give the Idaho Public Utilities Commission authority to let utilities issue bonds to refinance a portion of their total debt. A utility would use some of the revenue it collects from customers to guarantee repayment of the bonds, which means it could get a lower interest rate and give the savings back to the customer.

The change would have a big impact on Avista, Colwell said, because of its high debt and poor bond rating. The company’s problems for the utility started when it had to borrow during the 2001 energy crisis.

“This could take that debt from 9 percent to 5 or 6 percent,” said Rep. George Eskridge, R-Dover, a sponsor of the bill along Rep. Eric Anderson, R-Priest Lake. “That’s a substantial amount that will go back to the consumer.”

Eskridge said he wouldn’t have supported the bill if it didn’t guarantee reduced costs for ratepayers.

“The cost of energy is high enough already,” Eskridge said. “We need to find ways to reduce it any way we can.”

PUC spokesman Gene Fadness said the commission would likely reject utilities requests to issue bonds unless consumers’ rates would drop. “The only other way is if the utility could show a better investment rating, which would benefit the consumer down the road,” Fadness said.

If the bill passes, Colwell said, Avista will propose the same change next year in Washington, where 60 percent of its customers live.