HomeMy WebLinkAbout20240322Application.pdf
March 22, 2024
Ms. Monica Barrios-Sanchez
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
RE: Case No. INT-G-24-01
Dear Ms. Barrios-Sanchez:
Attached for consideration by this Commission is an electronic submission of Intermountain Gas
Company’s Application to Amend, Extend, and Increase Its Revolving Credit Agreement. A check
for the IPUC Issuance Fee in the amount of $1,000 will be hand-delivered under separate cover.
If you should have any questions regarding the attached, please don’t hesitate to contact me at (208)
377-6015.
Sincerely,
/s/ Lori Blattner
Lori A. Blattner
Director, Regulatory Affairs
Intermountain Gas Company
Enclosure
cc: Mark Chiles
Preston Carter
RECEIVED
Friday, March 22, 2024 11:53:22 AM
IDAHO PUBLIC
UTILITIES COMMISSION
INTERMOUNTAIN GAS COMPANY
CASE NO. INT-G-24-01
APPLICATION
AND
EXHIBITS
In the Matter of the Application of INTERMOUNTAIN GAS COMPANY
for Authorization to Amend, Extend, and Increase Its Revolving Credit
Agreement
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UTILITIES COMMISSION
APPLICATION - 1
Preston N. Carter, ISB No. 8462
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: (208) 388-1200
Attorney for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
INTERMOUNTAIN GAS COMPANY
for Authorization to Amend, Extend, and
Increase Its Revolving Credit Agreement
Case No. INT-G-24-01
APPLICATION
Intermountain Gas Company ("Intermountain" or “Company”), a subsidiary of MDU
Resources Group, Inc. with general offices located at 555 South Cole Road, Boise, Idaho, pursuant
to the applicable statutes, including Idaho Code Sections 61-901, 61-902, 61-903 and 61-905, and the
Rules and Regulations of the Idaho Public Utilities Commission (“Commission”), requests
authorization to amend, extend, and increase its current Revolving Credit Agreement to One Hundred
and Seventy-Five Million ($175,000,000) not to exceed a five (5) year period with an option to
borrow an additional Fifty Million Dollars ($50,000,000) for the same timeframe, or Two
Hundred and Twenty-Five Million ($225,000,000) in total. The renewal would occur between the
months of May and July 2024.
Communications in reference to this Application should be addressed to:
Lori A. Blattner
Director – Regulatory Affairs
Intermountain Gas Company
Post Office Box 7608
Boise, ID 83707
Lori.Blattner@intgas.com
and
Preston N. Carter
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
prestoncarter@givenspursley.com
stephaniew@givenspursley.com
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APPLICATION - 2
In support of this Application, Intermountain alleges and states as follows:
I. INTRODUCTION
Intermountain is a gas utility, subject to the jurisdiction of the Idaho Public Utilities
Commission, engaged in the sale of and distribution of natural gas within the State of Idaho under
authority of Commission Certificate No. 219 issued December 2, 1955, as amended and
supplemented by Order No. 6564, dated October 3, 1962.
Intermountain provides natural gas service to the following Idaho communities and counties
and adjoining areas:
Ada County - Boise, Eagle, Garden City, Kuna, Meridian, and Star;
Bannock County - Arimo, Chubbuck, Inkom, Lava Hot Springs, McCammon, and Pocatello;
Bear Lake County - Georgetown and Montpelier;
Bingham County - Aberdeen, Basalt, Blackfoot, Firth, Fort Hall, Moreland/Riverside, and Shelley;
Blaine County - Bellevue, Hailey, Ketchum, and Sun Valley;
Bonneville County - Ammon, Idaho Falls, Iona, and Ucon;
Canyon County - Caldwell, Greenleaf, Middleton, Nampa, Parma, and Wilder;
Caribou County - Bancroft, Grace, and Soda Springs;
Cassia County - Burley, Declo, Malta, and Raft River;
Elmore County - Glenns Ferry, Hammett, and Mountain Home;
Fremont County - Parker and St. Anthony;
Gem County - Emmett;
Gooding County –Gooding and Wendell;
Jefferson County - Lewisville, Menan, Rigby, and Ririe;
Jerome County - Jerome;
Lincoln County - Shoshone;
Madison County - Rexburg and Sugar City;
Minidoka County - Heyburn, Paul, and Rupert;
Owyhee County - Bruneau and Homedale;
Payette County - Fruitland, New Plymouth, and Payette;
Power County - American Falls;
Twin Falls County - Buhl, Filer, Hansen, Kimberly, Murtaugh, and Twin Falls;
Washington County - Weiser.
Intermountain's properties in these locations consist of transmission pipelines, liquefied
natural gas storage facilities, compressor stations, distribution mains, services, meters and regulators,
and general plant and equipment.
II. DESCRIPTION OF SECURITIES
Commission Order No. 35527, Case No INT-G-22-06, granted Intermountain the authority to
renew its revolving credit agreement to $100,000,000 not to exceed a five-year period, with the option
to borrow an additional $25,000,000. Applicant seeks authority from this Commission to amend,
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APPLICATION - 3
extend, and increase its current Revolving Credit Agreement to One Hundred and Seventy-Five
Million Dollars ($175,000,000) not to exceed a five (5) year period with an option to borrow an
additional Fifty Million Dollars ($50,000,000) for the same timeframe, or Two Hundred and Twenty-
Five Million Dollars ($225,000,000) in total.
The Board of Directors of Intermountain has duly authorized the amendment, extension, and
increase of the Revolving Credit Agreement. A copy of the Resolution is attached hereto as Exhibit
No. 1 and is incorporated by reference.
The estimated terms and conditions of the Revolving Credit Agreement are incorporated by
reference.
Summary of Terms and Conditions for Revolving Credit Agreement
Borrower: Intermountain Gas Company
Lender: A syndicate of financial institutions arranged by U.S. Bank
National Association and Wells Fargo Securities, LLC.
Principal Amount: Revolving Credit Agreement - $175,000,000, which will
include a $25 Million sublimit for standby letters of credit and
a $5 Million sublimit for swingline loans. The Borrower has
the right to borrow an additional $50,000,000 subsequent to
the Closing date up to an aggregate amount not to exceed $225
Million.
Interest Rates: At the Borrower’s option, any loan under the credit facility
will bear interest at a rate equal to (i) SOFR plus the
Applicable Margin, as determined in accordance with the
Performance Pricing grid set forth below or (ii) the base rate
(to be defined as the highest of (a) the U.S. Bank prime rate,
(b) the Federal Funds rate plus .50% and (c) a daily rate equal
to one-month SOFR plus 1.00%.
Date of Renewal: Between the months of May and July 2024.
Maturity: Up to five (5) years from the execution and delivery of
definitive documentation for the Senior Credit Facility.
Voting Privileges: None
Call or Redemption
Provisions: Not Applicable
Sinking Funds or Other
Provisions for Securing
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APPLICATION - 4
Payment: None
Security: None
Use of Proceeds: If approved, the Revolving Credit Agreement will be used to
provide for capital expenditures, deferred gas costs, and for
general corporate purpose needs of Intermountain.
Fees: Annually, beginning at the time of closing and each year on
the anniversary date of the credit facility, the Borrower will
pay an Administrative Fee of approximately $15,000 to U.S.
Bank, National Association.
The Borrower will pay a fee determined in accordance with
the estimated Performance Pricing grid set forth below, on the
actual daily unused amount of each Lender’s commitment.
The Facility Fee is payable quarterly in arrears, commencing
on the first quarterly payment date to occur after the Closing
Date. The Performance Pricing grid below is subject to
negotiation after the launch of the facility.
Pricing
Level
Indebtedness to
Capitalization Ratio
Facility
Fee
SOFR
Advances/Letter of
Credit Fee
Base Rate
Advances
I ≥ 0.60:1.0 0.250 1.625% 0.450%
II ≥0.55:1.0 but < 0.60: 1.0 0.200% 1.375% 0.275%
III ≥0.45:1.0 but < 0.55: 1.0 0.150% 1.125% 0.075%
IV < 0.45:1.0 0.100% 1.000% 0.000%
Other Requirements: Costs associated with this transaction are to be paid by
Intermountain as noted in the above delineation of “Fees.”
III. STATEMENT OF INFORMATION REQUIRED BY RULE 141.03
The Revolving Credit Agreement will be issued to a syndicate of financial institutions
arranged by U.S. Bank National Association and Wells Fargo Securities, LLC (the “Agents”). The
net proceeds for the Revolving Credit Agreement are up to One Hundred and Seventy-Five Million
Dollars ($175,000,000) plus the option to borrow an additional Fifty Million ($50,000,000). The
estimated fees discussed below do not reduce the amount the Company is able to borrow.
The estimated fees and expenses of the renewal of the Revolving Credit Agreement are
expected to total up to Four Hundred and Fifty Thousand Dollars ($450,000) consisting of the
following:
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APPLICATION - 5
Arrangement and Syndication Fees $300,000
Legal Fees 150,000
Total $450,000
IV. STATEMENT OF PURPOSE
Based on this Commission’s authorization, the Revolving Credit Agreement will be used to
provide for capital expenditures, deferred gas costs, and for general corporate purpose needs of
Intermountain.
V. STATEMENT OF EXPLANATION
These uses are consistent with the public interest and necessary, appropriate, and consistent
with the proper and legally mandated performance to the public by Intermountain as a public utility.
VI. FINANCIAL STATEMENT
Intermountain’s Statement of Capitalization as of December 31, 2023, showing all authorized
and outstanding classes of securities, is as follows:
December 31, 2023
Actual
Amount
Outstanding
($000’s) Ratio
Common Stock &
Surplus
$ 200,403 47.1%
Long Term Debt 225,086 52.9%
Total Capitalization $ 425,489 100.0%
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APPLICATION - 6
The following table is the supporting detail underlying the above Long-Term Debt as of
December 31, 2023.
Statement of Long-Term Indebtedness December 31, 2023:
Description Due Date Authorized and Outstanding
4.08% Senior Notes October 30, 2025 $25,000,000
4.33% Senior Notes October 30, 2028 $25,000,000
4.00% Senior Notes November 9, 2046 $30,000,000
3.62% Senior Notes June 13, 2029 $20,000,000
3.82% Senior Notes June 13, 2034 $10,000,000
4.26% Senior Notes June 13, 2049 $20,000,000
4.60% Senior Notes June 30, 2052 $20,000,000
4.75% Senior Notes June 30, 2062 $20,000,000
6.19% Senior Notes November 30, 2033 $25,000,000
Unamortized Debt Expense ($613,500)
Line of Credit and Commercial Paper $30,700,000
Total $225,086,500
VII. PROPOSED ORDER
A proposed Order granting this Application is attached as Exhibit No. 2 and is incorporated
by reference.
VIII. STATEMENT OF PUBLIC NOTICE
Notice of the application will be published within seven days of the filing date of this
Application in The Idaho Business Review, The Idaho State Journal, The Idaho Statesman, The Post
Register, and The Times News pursuant to Rule 141.08 of the Commission’s Rules of Procedure.
IX. VERIFIED REPORT
A copy of the verified report for the above referenced Revolving Credit Agreement showing
the amount realized including the itemized costs and expenses incurred in connection with this
transaction will be submitted under separate cover after renewal and is to be treated as confidential
pursuant to the Commission’s Rules of Procedure IDAPA 31.01.01.067 and 31.01.01.233, together
with Idaho Code §§ 74-104, 106, 107, and 48-801 et seq.
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APPLICATION - 7
X. COMMISSION FEE
The fee required by Section 61-905 of the Idaho Code, was determined as follows:
First $ 100,000 at $1.00 per $1,000 = $ 100
Next 900,000 at $0.25 per $1,000 = 225
Remaining 224,000,000 at $0.10 per $1,000 = 22,400
$ 225,000,000 = $ 22,725
As this amount is larger than the $1,000 maximum fee set forth in Section 61-905 of the Idaho
Code, a check for $1,000 is enclosed with this Application.
XI. MODIFIED PROCEDURE
Intermountain requests that this matter be handled under modified procedure pursuant to
Rules 201-204 of the Commission's Rules of Procedure. Intermountain stands ready for an immediate
hearing of this Application if such is determined necessary by this Commission.
XII. REQUEST FOR RELIEF
Intermountain respectfully petitions the Idaho Public Utilities Commission as follows:
1) That this Application be processed without hearing pursuant to the Rules and
Regulations of this Commission and acted upon at the earliest possible date;
2) That this Commission approve and authorize the amendment, extension, and increase
of its current Revolving Credit Agreement to One Hundred and Seventy-Five Million Dollars
($175,000,000) not to exceed a five (5) year period with an option to borrow an additional Fifty
Million Dollars ($50,000,000) for the same timeframe, or Two Hundred and Twenty-Five Million
Dollars ($225,000,000) in total;
3) That this Commission allow Intermountain to manage the Revolving Credit
Agreement pursuant to the order issued in this matter until such time as Intermountain’s Board of
Directors changes the authorized level of such Revolving Credit Agreement, with Intermountain
making quarterly reports to this Commission setting forth the date of issuance, principal amount,
interest rate, date of maturity and identity of payee for all promissory notes issued during such quarter;
and
4) For such other relief as this Commission may determine is just and proper.
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APPLICATION - 8
DATED: March 22, 2024.
INTERMOUNTAIN GAS COMPANY GIVENS PURSLEY LLP
By By
Lori A. Blattner Preston N. Carter
Director – Regulatory Affairs Attorney for Intermountain Gas Company
RECEIVED
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UTILITIES COMMISSION
EXHIBIT NO. 1
CASE NO. INT-G-24-01
INTERMOUNTAIN GAS COMPANY
BOARD RESOLUTION
(2 pages)
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CERTIFICATE
I, Allison R. Waldon, hereby certify that I am the duly elected and qualified Assistant
Secretary of Intermountain Gas Company, an Idaho corporation; that the following is a true and
correct copy of resolutions adopted by Written Consent of the Board of Directors dated
March 19, 2024; and that said resolutions have not been modified or amended and are presently in
full force and effect:
WHEREAS, the Board of Directors of Intermountain Gas Company (the
“Company”) has determined that it is desirable for the Company amend and restate
the Third Amended and Restated Credit Agreement dated as of October 13, 2022
(the “Agreement”), by and among the Company and other lenders, under which the
lenders would make revolving loans to the Company, from time to time, in amounts
up to an aggregate principal amount of up to $175,000,000 for a period not to exceed
five years;
NOW, THEREFORE, BE IT RESOLVED, that the Chair of the Board, Chief
Executive Officer, President, any Vice President, Chief Legal Officer, Treasurer, or
any other officer who performs a policy-making function (such as administration,
operations, accounting, or finance) of the Company (the “Authorized Officers”) be,
and each of them hereby is, authorized to (i) negotiate, execute and deliver the
Agreement, with such terms and provisions as the Authorized Officer executing the
Agreement on behalf of the Company shall deem proper, and (ii) in connection with
such Agreement execute and deliver promissory notes in an aggregate principal
amount up to $175,000,000, with such terms as the Authorized Officers executing the
same shall deem proper (the “Notes”), such execution by the Authorized Officers of
the Agreement and the Notes to be conclusive evidence of the Authorized Officer’s
authority granted herein and the approval thereof by the Board of Directors;
FURTHER RESOLVED, that each and every officer of the Company be,
and hereby is, authorized and empowered, in the name and on behalf of the
Company from time to time, to take such actions and to execute and deliver such
agreements, certificates, instruments, notices and documents as may be required or
as such officer may deem necessary, advisable, or proper in order to carry out and
perform the obligations of the Company under the Agreement and other agreements
executed by the Company pursuant to these resolutions; and all such actions to be
performed in such manner, and all such agreements, certificates, instruments,
notices, and documents to be executed and delivered in such form as the officer
performing or executing the same shall approve, the performance or execution
thereof by such officer to be evidence that such officer deems all of the terms and
provisions thereof to be proper; and
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2
FURTHER RESOLVED, that all lawful actions previously taken in good
faith by any officer of the Company in anticipation of, or in connection with, the
foregoing are hereby approved, ratified and confirmed in all respects as if such
actions had been presented to the Board of Directors for its approval prior to such
actions being taken.
IN WITNESS WHEREOF, I have hereunto set my hand on March 20, 2024.
Allison R. Waldon, Assistant Secretary
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EXHIBIT NO. 2
CASE NO. INT-G-24-01
INTERMOUNTAIN GAS COMPANY
IDAHO PUBLIC UTILITIES COMMISSION
PROPOSED ORDER
(3 pages)
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ORDER NO. ________________ PAGE 1
PROPOSED ORDER OF APPLICANT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
INTERMOUNTAIN GAS COMPANY
for Authorization to Amend, Extend, and
Increase Its Revolving Credit Agreement
Case No. INT-G-24-01
ORDER NO.
On March 22, 2024, Intermountain Gas Company (the “Company”), a subsidiary of MDU
Resources Group, Inc., applied to the Commission under Idaho Code §§ 61-901, et seq. for authority
to amend, extend, and increase its current Revolving Credit Agreement to $175,000,000, not to exceed
a five-year period, with an option to borrow an additional $50,000,000 for the same time frame, or
$225,000,000 in total. Having fully considered the Application, the Commission enters this Order
granting it as follows.
THE APPLICATION
The Company asks for authority to amend, extend, and increase its current revolving credit
agreement up to $225,000,000. The proposed Revolving Credit Agreement would exist for a period
not to exceed five years from the date of execution and delivery of the credit agreement. The interest
rate will either be based on SOFR plus an applicable margin or the base rate, which is the higher of
the U.S. Bank prime rate, the Federal Funds rate plus 0.50%, or a daily rate equal to one-month SOFR
plus 1%. The Company says it will use the Revolving Credit Agreement to provide for capital
expenditures, deferred gas costs, and for general corporate purposes.
The Company anticipates arrangement, syndication, and legal fees necessary to complete
the amendment, extension, and increase of the Revolving Credit Agreement to total up to
$450,000, which will not reduce the amount the Company is able to borrow.
COMMISSION FINDINGS AND DECISION
The Company is an Idaho corporation with its office and principal place of business in Boise,
Idaho. It is a natural gas public utility that owns and operates transmission pipelines, liquefied natural
gas storage facilities, compressor stations, distribution mains, services, meters and regulators, and
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ORDER NO. ________________ PAGE 2
general plant and equipment. It is a gas corporation and public utility as defined in Idaho Code §§
61-117 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 transaction 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 financing should be allowed.
The Commission’s Order approving the proposed financing 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. This Order also is not a Commission determination or 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 natural gas service.
ORDER
IT IS HEREBY ORDERED that the Company’s Application for authority to amend, extend,
and increase its Revolving Credit Agreement to $175,000,000, not to exceed a five-year period, with
an option to borrow an additional $50,000,000 for the same time frame, or $225,000,000 in total is
granted.
IT IS FURTHER ORDERED that the Company must continue to file quarterly reports with
the Commission setting forth the date of issuance, principal amount, interest rate, date of maturity and
identity of payee for all promissory notes issued during the quarter. The Company must continue to
file its capitalization ratios with the quarterly reports.
IT IS FURTHER ORDERED that the foregoing authorization is without prejudice to the
regulatory authority of this Commission with respect to rates, utility capital structure, service,
accounts, valuation, estimates or 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
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ORDER NO. ________________ PAGE 3
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.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ________
day of ________________ 2024.
__________________________________
PRESIDENT
__________________________________
COMMISSIONER
__________________________________
COMMISSIONER
ATTEST:
____________________________________
SECRETARY
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