20170119final_order_no_33700.pdf

Office of the Secretary
Service Date
January 19, 2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF MIDVALE TELEPHONE COMPANY ) CASE NO. MID-T-16-01
FOR AUTHORITY TO BORROW FROM )
THE RURAL UTILITIES SERVICE ("RUS") )
IN AN AMOUNT NOT TO EXCEED ) ORDER NO. 33700
$12,691,000 )
On December 21, 2016, Midvale Telephone Company ("Company") filed an
Application for Loan Approval with this Commission requesting authority to execute a loan
contract amendment and supplemental mortgage in an amount not to exceed $12,691,000 with
the United States of America, acting through the Rural Utilities Service ("RUS"). Having fully
considered the Application, the Commission enters this Order granting it as follows.
THE APPLICATION
RUS has provided an offering letter to loan the funds to Midvale at the Cost-of­
Money rate for nineteen (19) years. The actual interest rate will be set at the time each advance
is made to Midvale. The rate will be based on the average yield on outstanding marketable
obligations of the United States with a comparable maturity, but not to exceed 7 percent per year.
The Company states that the proceeds of the RUS loan will be used to pay for, and
partially reimburse general funds to: (1) extend services to approximately 368 new customers;
(2) provide for router and switch upgrades to handle broadband traffic growth; (3) allow the
Company to provide faster broadband speeds in each of its eleven exchanges; ( 4) provide fiber to
the home ("FTTH") in several areas and extend fiber for toll and broadband Ethernet transport
facilities to provide larger pipes and redundant paths; (5) build approximately 49.59 miles of new
toll fiber, 83.61 miles of local fiber, and 17.56 miles of drops; (6) serve two new FTTH Carrier
Serving Areas ("CSA") and one new CSA for copper DSL; and (7) replace six existing CSAs
without Ethernet capabilities. The total new Optical Network Terminals ("ONT") for FTTH are
309 and four Digital Subscriber Line Access Multiplexers ("DSLAM") with 192 lines.
These upgrades and installations of new plant will occur in Idaho and Arizona. Plant
in the respective states will be used as collateral for the loans. Plant expenditures in Idaho
including network costs, construction equipment, and engineering is expected to be $7,103,921.
ORDER NO. 33700 1
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
The Company is an Idaho corporation providing telecommunications services,
including local exchange service, within the states of Idaho and Arizona. It is a certified
telephone corporation and public utility as defined in Idaho Code §§ 61-121 and 61-129.
The Commission has jurisdiction over the Application under Idaho Code§§ 61-901,
et seq. We find that the proposed transaction is in the public interest and a formal hearing on this
matter is not required. We further find that the proposed issuance is for a lawful purpose and is
within the Company's corporate powers, that the Application reasonably conforms to Rules 141
through 150 of the Commission's Rules of Procedure, IDAPA 31.01.01.141-150, and that the
Company has paid all fees due under Idaho Code § 61-905. Accordingly, we find that the
Application should be approved and the proposed debt authority should be allowed.
The Commission's Order approving the proposed debt authority and the general
purposes to which the proceeds may be put is not a determination that the Commission approves
of the particular use to which these funds will be put. The Order also is not a Commission
determination nor approval of the type of financing or the related costs for ratemaking purposes.
The Commission does not have before it for determination, and so does not determine, the effect
of the proposed transaction on rates the Company will charge for telecommunication service.
ORDER
IT IS HEREBY ORDERED that the Application of Midvale Telephone Company for
authority to execute a loan contract amendment and supplemental mortgage with the RUS in an
amount not to exceed $12,691,000 is granted.
IT IS FURTHER ORDERED that the Company must file with the Commission
copies of the RUS final loan approvals, including documentation for advances.
IT IS FURTHER ORDERED that the Company must file with the Commission a
copy of any executed collateral documentation.
IT IS FURTHER ORDERED that the Company must file with the Commission
copies of all annual certifications and covenant reports, and letters regarding these
determinations.
IT IS FURTHER ORDERED that the Company must file with the Commission a
copy of the "Report of Securities Issued."
ORDER NO. 33700 2
IT IS FURTHER ORDERED that the foregoing authorization is without prejudice to
the regulatory authority of the Commission with respect to rates, utility capital structure, service
accounts, valuation, estimates for determination of cost or any other matter which 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 provisions of Chapter 9,
Title 61, Idaho Code, or any act or deed done or performed in connection therewith shall be
construed to obligate the State of Idaho to pay or guarantee in any manner whatsoever any security
authorized, issued, assumed or guaranteed under the provisions of Chapter 9, Title 61, Idaho Code.
IT IS FURTHER ORDERED that issuance of this Order does not constitute acceptance
of the Company's exhibits or other material accompanying the 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. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code§ 61-626.
ORDER NO. 33700 3
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of January 2017.
ATTEST:
Diane M. Hanian
Commission Secretary
O:MID-T-16-01 cc
ORDER NO. 33700
ERIC ANDERSON, COMMISSIONER
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