BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION

In the matter of the request of    ) Docket UE-981107
THE WASHINGTON WATER POWER COMPANY )  
for an order establishing compliance    ) ORDER
with RCW 80.08.040                 )

  On August 18, 1998, The Washington Water Power Company (“Applicant”) filed 
its application before the Washington Utilities and Transportation Commission 
(“Commission”) in this matter for an order establishing compliance with RCW 
80.08.040.

Background
  The Applicant seeks Commission affirmation that the requirements of RCW 80.08 
are met for the following securities transaction: To exchange up to and 
including 20,000,000 shares of Common Stock for Depositary Shares.  Each 
Depositary Share will constitute a one-tenth interest in one share of Preferred 
Stock, Convertible Series L.  The exchange will be conditional upon at least 
6,000,000 shares of Common Stock being tendered for exchange.  If more than 
20,000,000 Common Shares are validly tendered and not withdrawn pursuant to the 
Exchange Offer, the Company will accept such shares for exchange on a pro rata 
basis.

  The shares of Preferred Stock will be deposited with The Bank of New York, as 
Preferred Stock Depositary, and each Depositary Share will entitle the owner to 
all of the proportionate rights, preferences and privileges of the Preferred 
Stock represented thereby. Dividends on the Preferred Stock are cumulative and 
will accrue at the rate of $12.40 per annum, payable quarterly in arrears in 
cash on or before the 15th day of each March, June, September and December, 
commencing December 15, 1998.  The proportionate annual dividend rate for each 
Depositary Share will be $1.24 per share, and dividends will be payable on the 
Depositary Shares as, when and if paid on the Preferred Stock.  Each share of 
Preferred Stock will have a liquidation preference to ten times the fair market 
value per share of the Common Stock on or about the date of issuance, plus 
accrued and unpaid dividends.  The proportionate liquidation preference of each 
Depositary Share will be one-tenth of this amount. 

  On or about November 1, 2001, (the “Mandatory Conversion Date”) each of the 
outstanding shares of Preferred Stock will be mandatorily converted by the 
Company into (i) ten Common Share, subject to certain antidilution adjustments, 
and (ii) the right to receive a cash amount equal to all accrued but unpaid 
dividends thereon.

  The shares of Preferred Stock may be converted, at the option of the Company, 
at any time on or after December 15, 1998, and prior to the Mandatory 
Conversion Date, in whole or in part from time to time, into, for each share so 
converted (1) a number of Common Shares equal to the Optional Conversion Price 
(as defined below) then in effect plus (2) the right to receive an amount, in 
cash, equal to the accrued and unpaid dividend thereon to the conversion date 
plus (3) the right to receive the Optional Conversion Premium (as Hereinafter 
defined).


DOCKET UE-981107         Page 1
  The “Optional Conversion Price” means, for each share of Preferred Stock 
converted at the option of the Company, a number of shares of Common Stock 
equal to the lesser of (a) an amount determined as a percentage, ranging from 
110% to 130%, of an amount equal to ten times the current market price per 
share of the Common Stock before the commencement of the Exchange Offer divided 
by the Current Market Price as of the close of business on the second trading 
day immediately preceding the day on which the Company gives notice of optional 
conversion and (b) ten shares of Common Stock, subject to antidilution 
adjustment.

  The “Optional Conversion Premium” means, for each share of Preferred Stock 
converted at the option of the Company, an amount, in cash, initially equal to 
$20.90, declining by $0.02111 for each day following December 15, 1998, to and 
including the optional conversion date (computed on the basis of a 360-day year 
consisting of twelve 30-day months) and equal to zero on and after September 
15, 2001; provided, however, that in lieu of delivering such amount in cash, 
the Company may, at its option, deliver a number of Common Shares equal to the 
quotient of such amount divided by the Current Market Price on the second 
trading day immediately preceding the day in which the Company gives notice of 
such conversion.

  The initial Optional Conversion Premium of $20.90 represents the difference 
between the annual dividend of $12.40 on each share of New Preferred Stock and 
an assumed annual dividend of $4.80 for ten Common Shares for the period after 
December 15, 1998, through September 15, 2001 (i.e. $1.90 per quarter for 
eleven quarters).  The premium declines to zero on September 15, 2001: no 
premium will be paid on or after September 15, 2001.  Dividends will accrue on 
the Preferred Stock through the conversion date.

  A holder of Preferred Stock (or of Depositary Shares) will not be entitled to 
vote on matters voted upon by the common shareholder of the Company.  Holders 
of Preferred Stock have certain additional voting rights exercisable together 
with all the other holders of each other series of preferred stock of the 
Company, including certain rights to elect directors during the default of 
payment of dividends for six consecutive quarters.

FINDINGS

 THE COMMISSION FINDS:

 1.  The Washington Water Power Company, a Washington corporation, is a public 
service company subject to the jurisdiction of this Commission under the 
provisions of Chapter 80.08 RCW.

 2.2.  As to form, the application herein meets the requirements of Chapter 
80.08 RCW and the rules and regulations of the Commission adopted pursuant 
thereto.

 3.  The Company’s application in this Docket contains (a) a description of the 
purposes for which the proposed securities will be issued along with 
certification by an authorized officer that the proceeds from this financing 
will be used for the purposes allowed by Chapter 80.08 RCW; (b) a description 
of the proposed issuance, including the terms of financing; and (c) a statement 
as to why the proposed transactions are in the public interest.

 4.  An order consistent with the above findings should be entered.

ORDER

 THE COMMISSION ORDERS:

 1.  The Washington Water Power Company has complied with the requirements of 
RCW 80.08.040.

 2.  The Washington Water Power Company will file, as soon as available:

      a.  The Report of Securities Issued required by WAC 480-146-230.

     b.  Verified copies of any agreement entered into in connection with any 
transaction pursuant to this order.

  3.  This order shall in no way affect the authority of this Commission over 
rates, service, accounts, valuations, estimates or determination of costs, or 
any matters whatsoever that may come before it, nor shall anything herein be 
construed as an acquiescence in any estimate or determination of costs, or any 
valuation of property claimed or asserted.

 DATED at Olympia, Washington, and effective this 23rd day of September, 1998.

 WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



       CAROLE J. WASHBURN
       Secretary