20120214final_order_no_32458.pdf

Office of the Secretary
Service Date
February 14,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
iN THE MATTER OF THE APPLICATION )
OF ALBION TELEPHONE COMPANY’S )CASE NO.ALB-T-12-01
REQUEST TO BORROW UP TO )
$17,075,000 )ORDER NO.32458
_________________________________________________________________________________
)
On January 11,2012,Albion Telephone Company (“Albion”or “Company”)filed an
App1ication requesting authority to borrow up to $17,075,000 from the Federal Finance Bank
(FFB)to be guaranteed by the Rural Utilities Service (RUS).The loan will be secured by a
Restated Mortgage,Security Agreement and Financing Statement.Proceeds of the loan will be
utilized to build fiber to premises facilities capable of providing telephony,high-speed data and
broadband services to customers in the Albion,Arco and Malad exchanges.
The requested borrowing authority will consist of more than one loan.The
Broadband Loan will bear interest at the comparable Treasury rate,currently 4%per annum.
The Telecommunications Loan will bear interest at the cost-of-money interest rate established by
the government,currently 5%per annum.Both loans will have a five-year time period where
advances may be drawn.The final maturity date is set as December 31,2030,with the first
payment scheduled for October 31,2013.The loans have provisions allowing for prepayment,
refinancing and maturity extensions if requested and accepted by the FFB and RUS.Albion will
endeavor to maintain a 1 .Ox Times Interest Earned Ratio (TIER).Additional indebtedness may
not be incurred without prior written consent of RUS if the TIER is below 1.0.A portion of
these loan funds will be used for non-regulated services.Allocations and any adjustments
associated with non-regulated costs will occur in future rate cases.
STAFF ANALYSIS AND RECOMMENDATION
Staff recommended approval of Albion’s Application for the requested loan authority.
To monitor any loan covenants required by FFB and RUS,Staff recommended the following
reporting requirements be included in the Order approving the Application:
1)Provide copies of the FFB/RUS final loan approvals including
documentation for advances;
2)Provide a copy of any executed collateral documentation;
ORDER NO.32458 1
3)Provide copies of all annual and special financial reports,certification,
covenant reports,and letters regarding these determinations;and
4)The “Report of Securities Issued.”
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Albion Telephone
Company pursuant to Idaho Code §61-120,61-121,61-129,61-301,61-303,61-501,61-502,
61-901,and 61-902.and the Commission’s Rules of Procedure,IDAPA 31.01.01.000 etseq.
COMMISSION FINDINGS
The Commission finds that Albion’s filing satisfies the requirements of Idaho Code
§61-901 ci seq.and the Commission’s Rules of Procedure 141-147,IDAPA 31.01.01.141-147.
The purpose of the requested borrowing authority is appropriate and we find this Application
should be approved pursuant to Idaho Code §61-902.After reviewing the Application and
Staffs recommendations,the Commission finds that it is reasonable and prudent to allow Albion
to borrow up to $17,075,000 from the FFB and guaranteed by the RUS.The Commission also
directs Albion to comply with certain conditions more fully described below.
ORDER
IT IS HEREBY ORDERED that the Application of Albion Telephone Company
requesting Commission authority to borrow up to $17,075,000 from the Federal Finance Bank,
and guaranteed by the Rural Utilities Service,is approved.
IT IS FURTHER ORDERED that Albion shall also file the following documents with
the Commission:(1)copies of the FFB/RUS final loan approvals,including documentation for
advances;(2)a copy of any executed collateral documentation;(3)copies of all annual and
special financial reports,certification,covenant reports,and letters regarding these
determinations;and (4)a copy of the “Report of Securities Issued.”
IT IS FURTHER ORDERED that nothing in this Order shall be construed to obligate
the State of Idaho to pay or guarantee in any manner whatsoever any security authorized,issued,
assumed,repurchased,defeased or guaranteed under the provisions of this order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the
regulatory authority of this Commission with respect to rates,services,accounts,evaluation,
estimates or determination of costs,or any other matter which may come before this Commission
pursuant to its jurisdiction and authority as provided by law.
ORDER NO.32458 2
IT IS FURTHER ORDERED that the issuance of this Order does not constitute
acceptance of Albion’s exhibits or other material accompanying this Application for any purpose
other than the issuance of this Order.
THiS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order with regard to any
matter decided in this Order.Within seven (7)days after any person has petitioned for
reconsideration,any other person may cross-petition for reconsideration.See Idaho Code §61-
626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this ,‘
day of February 2012.
MACK A.REDFORD,COMMISSIONER
ATTEST:
/1 r/’
Jean D.Jewell)
Commission Scretary
O:AiJ3-T-12-Olnp
MARSHA H.SMITH,COMMISSIONER
I ULKJ L DER,P SIDENT
ORDER NO.32458 3