20040527Final Order No 29502.pdf

Office of the Secretary
Service Date
May 27, 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
CAMBRIDGE TELEPHONE COMPANY FOR
AN AMENDMENT TO THE AUTHORITY TO
BORROW $17.5 MILLION CASE NO. CAM-03-
ORDER NO. 29502
On May 10, 2004, Cambridge Telephone Company (Cambridge) requested an
amendment to its authority to borrow up to $17.5 million from the Rural Telephone Utilities
Service (RUS) and Rural Telephone Bank (RTB) as provided by Commission Order No. 29399.
In Order No. 29399 the Commission found Cambridge s proposal to borrow $17.5 million
consistent with the public interest and with the Company s proper performance as a public
utility. Order No. 29399 at 2. This financing was expected to be structured with three loans: a
RUS loan of $7 500 000 that qualifies for the 5% hardship interest rate with a 15-year loan
maturity, a RUS loan of $6 096 000 and a RTB loan of $3 547 950. The amendment is to
recognize that RUS, in the loan agreement dated April 1 , 2004, now proposes four loans instead
of three. The total amount remains the same at up to $17.5 million but the loan details are
slightly different. The loans will be as follows:
1) RUS note for $6 096 000 with the interest rate to be determined prior to
taking the advance and a maturity date of March 1 , 2019.
2) RUS note for $4 857 000 with the interest rate of 5% and a maturity date
of March 1 2019.
3) RUS note for $2 643 000 with the interest rate of 5% and a maturity date
of March 1 2012.
4) RTB note for $3 457 950 with the interest rate to be determined prior to
taking the advance and a maturity date of March 1 2019.
The remaining terms and purpose of the notes continue to be consistent with Order No. 29399.
ST AFF RECOMMENDATION
Staff recommended approval of the loan amendment with the requirement that all
other applicable terms and conditions of Order No. 29399 remain the same.
ORDER NO. 29502
COMMISSION FINDINGS AND DECISION
Cambridge Telephone Company is a telephone corporation within the definition of
Idaho Code 9 61-121 and is a public utility in the definition of Idaho Code 9 61-129. The Idaho
Public Utilities Commission has jurisdiction over this matter pursuant to the provisions of Idaho
Code 9 61-901 et seq.
After examining the Application and Staffs recommendation, the Commission finds
that the proposed amendment to the previously approved borrowing authority in Order No.
29399 is consistent with the public interest and Cambridge s proper performance of its duties as
a public utility.
The Commission finds that the amendment does not change the overall amount to be
borrowed by Cambridge. Thus, no additional regulatory fees are required to be paid. See Idaho
Code 9 61-905. However, the amendment does propose a change in the number and details of
the component loans that make up the aggregate amount. The Commission still finds that with
the amendment the general purposes to which the loan funds will be utilized are still lawful
purposes under the public utilities law and are compatible with the public interest. In addition
the approval of the general purposes to which the funds will be put to use is neither a finding of
fact nor a conclusion of law that any particular project, program or future cost recovery is
authorized. Approval of this Order shall not be construed to approve any particular use of the
funds which Cambridge may benefit by the approval of this Order.
The Commission further finds that the issuance of an Order authorizing the
amendment to the authority to borrow funds up to $17.5 million does not constitute agency
determination/approval of the type of financing or the related costs for ratemaking purposes.
The Commission expressly reserves the ratemaking implication from these loans until an
appropriate future proceeding.
The Commission s approval of this Application is conditioned upon Cambridge
satisfying the four reporting requirements contained in Order No. 29399 that were initially
recommended by the Staff. Order No. 29399 at 2. Cambridge is reminded that compliance with
reporting requirements does not guarantee that the cost of the loans or the use of such funds will
be automatically recovered in the next rate case. To the extent that these loan funds are used for
non-regulated services, any adjustment associated with non-regulated costs will occur in a future
rate case.
ORDER NO. 29502
ORDER
IT IS THEREFORE ORDERED that Cambridge Telephone Company s Application
for an amendment to the authority it received to borrow $17.5 million in Order No. 28399 is
granted.
IT IS FURTHER ORDERED that Cambridge may execute the loan documents with
the Rural Utility Service and Rural Telephone Bank in the manner described above.
IT IS FURTHER ORDERED that this authorization to borrow not more than
$17 500 000 is without prejudice to the regulatory authority of this Commission with respect to
rates, services, accounts, evaluations, estimates , or determination of costs, or the allocation of
costs between regulated and non-regulated activities, or any other matter that may come before
this Commission pursuant to its jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that nothing in this Order and no provision of Idaho
Code, Title 61 , Chapter 9, or any act or deed done or performed in connection with this Order
shall be construed to obligate the State of Idaho to payor guarantee in any manner whatsoever
any funds authorized by the Commission.
IT IS FURTHER ORDERED that issuance of this Order does not constitute
acceptance of Cambridge s exhibits or other material accompanying the Application for any
purpose other than issuance of this Order.
IT IS FURTHER ORDERED that approval of this amendment is conditioned upon
all remaining terms and conditions of Order No. 29399 remaining in effect including the
reporting requirements.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) or in interlocutory Orders previously issued in this Case No. CAM-03-
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 or in interlocutory Orders previously issued in
this case. Within seven (7) days after any person has petitioned for reconsideration, any other
person may cross-petition for reconsideration. See Idaho Code 9 61-626.
ORDER NO. 29502
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this :25"
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day of May 2004.
ATTEST:
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ission Secretary
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ORDER NO. 29502
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MARSHA H. SMITH, COMMISSIONER