20250527Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER LODGE
COMMISSIONER HAMMOND
COMMISSIONER HARDIE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: JOSEPH TERRY, COMMISSION STAFF MEMBER
JEFF LOLL,DEPUTY ATTORNEY GENERAL
DATE: MAY 27, 2025
RE: IN THE MATTER OF THE APPLICATION OF INTERMOUNTAIN GAS
COMPANY FOR AUTHORIZATION TO ISSUE AND SELL
SECURITIES; CASE NO. INT-G-25-03.
On May 9, 2025, Intermountain Gas Company. ("Company" or "Intermountain") filed an
application requesting authority to issue up to $50 million in debt to refinance existing debt, fund
capital expenditures, and general corporate needs. The debt issuance may consist of one or more
loans with terms ranging from 5 to 40 years. The interest rate on the debt will be dependent on
the term of the loan and the Treasury rate at the time. For 5-year and 15-year loans, current
estimated interest rates are based on 5-year treasury rates plus 125-145 basis points and 165-215
basis points respectively. For 30 and 40-year loans, current estimated interest rates are based on
30-year Treasury rates plus 175-215 basis points. The Commission received the application fee
on May 10, 2025.
STAFF ANALYSIS
The proposed debt meets the requirement under Idaho Code §61-901. It is for more than
one year (5-40 years) and is for the acquisition of property; for the construction, completion,
extension, or improvement of its facilities; and for the improvement or maintenance of its service
or refinancing of its current obligations. The filing complies with the IDAPA 31.01.01.141.
The interest rates would be within the ranges included in the following chart assuming
current treasury rates:
DECISION MEMORANDUM - 1 - MAY 27, 2025

Term Low
in Interest High
Years Rate Interest Rate
5 5.34% 5.54%
15 5.74% 5.89%
30 6.64% 7.04%
40 6.64% 7.04%
In the Company's most recent general rate case, Case No. INT-G-22-07,the approved cost
of debt was 4.448%. While the above interest rates are above the current weighted average cost
of debt, interest rates are significantly higher than they were when much of that debt was issued.
In 2022, the average 5-year treasury rates were 2.999% and 30-year treasury rates were 3.113%.
On May 12, 2025, the 5-year treasury rate was 4.09% and the 30-year treasury rate was 4.89%.
STAFF RECOMMENDATION
Staff recommends that the Commission authorize the Company to issue up to $50 million
in debt.
Staff recommends the Commission require the Company to file with the Commission the
loan documents showing the amount borrowed and all other terms of the loan within seven days
of those documents being available.
Staff recommends the Commission order the Company to continue to file quarterly reports
that include date of issuance,principal amount, date of maturity, and identity of payee.
COMMISSION DECISION
Does the commission wish to approve Intermountain Gas Company's request to issue up
to $50 million in debt?
Does the Commission wish to require the Company to file with the Commission the loan
documents showing the amount borrowed and all other terms of the loan within seven days of
those documents being available?
Does the Commission wish to order the Company to continue to file quarterly reports that
include date of issuance, principal amount, date of maturity, and identity of payee?
4(2�
J eph Terry
Commission Staff
I:\Utility\UDMEMOS\INT-G-25-03 Decision Memo.docx
DECISION MEMORANDUM - 2 - MAY 27, 2025