BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION

In the matter of the request of      ) DOCKET  UE-961211
THE WASHINGTON WATER POWER COMPANY  )  
for an order establishing compliance ) ORDER ESTABLISHING 
with RCW 80.08.040 )    COMPLIANCE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
. . . )

  On September 13, 1996, The Washington Water Power Company (“Applicant”) filed 
its application before the Washington Utilities and Transportation Commission 
in this matter for an order establishing compliance with RCW 80.08.040.

Background

  In its filing, the Applicant proposes to issue and sell up to and including 
$150,000,000 of Preferred Stock, unsecured debt securities, or subordinated 
deferrable interest securities, in either or any of the three methods described 
below:

Preferred Stock: Issuance of Preferred Stock, no par value, may occur at any 
time when market conditions are optimum and financing requirements necessitate 
additional equity. Redemption provisions will determine the term of the new 
Preferred Stock. If mandatory redemption provisions are a part of the new 
stock, they will be supplied at the time of issuance. If the stock has 
non-mandatory redemption provisions, the term is perpetual. If the dividend 
rate is a fixed rate, the initial rate will be negotiated and supplied at the 
time of issuance. If the dividend rate is a floating rate, the initial rate 
will be negotiated and supplied at the time of issuance, and subsequent 
dividend rates will be determined by market conditions.

Unsecured Debt Securities: Debentures may be sold to underwriters or through 
agents who in turn will offer the Debentures to investors, or may be sold 
directly to investors either with or without the assistance of a private 
placement agent. Debentures may be registered with the SEC and may be listed on 
a securities exchange. Early redemption or callable provisions will be 
determined and supplied at the time of issuance.

Subordinated Deferrable Interest Securities: Rating agencies have historically 
classified these securities as preferred securities for balance sheet purposes, 
while the distributions paid to the special purpose entity by the Applicant 
have been considered debt service payments for tax purposes. Issuance occurs 
through the use of a special purpose entity. The special purpose entity, a 
grantor trust wholly-owned by the applicant, issues “Trust Originated Preferred 
Securities” and commits the proceeds from the issuance thereof to the 
Applicant. The Applicant issues subordinated deferrable interest securities to 
the special purpose entity in return for the proceeds. The securities, issued 
by one or more special purpose entities through one or more agreements, include 
a limited guarantee by the Applicant. The guarantee covers accrued and unpaid 
distributions from the special purpose entity as well as the liquidation value 
of the securities. The Applicant commits interest payments to the special 
purpose entity, covering all declared distributions and any expenses incurred 
by the special purpose entity in connection with the financing. The terms of 
the securities will be determined by the early and mandatory redemption 
provisions, and the fixed or floating distribution rate will be negotiated and 
determined by market conditions at the time of issuance. 
 
  In all series’ issuances, the terms for the sale of each series will be 
determined at the time of issuance, and underwriters, agents, or other 
purchasers will be selected at that time. The terms for the sale of each series 
and the names of the underwriters, agents, or other purchasers will be supplied 
at the time of issuance.

DOCKET UE-961211        PAGE 2


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.   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, certified by an 
authorized officer; (b) a description of the proposed issuances, 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 is hereby authorized to enter into 
agreements substantially in the forms included with the Company’s application.

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

   A. The Report of Securities Issued required by RCW Chapter 80.
  B. Verified copies of any agreement entered into in connection with any 
transaction pursuant to this order.
  C. A verified statement setting forth in reasonable detail the disposition of 
the proceeds of each offering made pursuant to this order.

  4. 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            day of March, 
1997.

  WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


     
       STEVE McLELLAN
       Secretary