20260818Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER LODGE
COMMISSIONER HAMMOND
COMMISSIONER HARDIE
COMMISSION SECRETARY
LEGAL
FROM: JAMES CHANDLER, COMMISSION STAFF
ERIKA K. MELANSON, DEPUTY ATTORNEY GENERAL
DATE: AUGUST 18, 2026
SUBJECT: IN THE MATTER OF INTERMOUNTAIN GAS COMPANY'S
APPLICATION FOR AUTHORIZATION TO ISSUE AND SELL
SECURITIES; CASE NO. INT G-26-03.
On July 30, 2026, Intermountain Gas Company ("Company") filed an Application
requesting authority to issue and sell up to $60,000,000 of Unsecured Notes with proposed
maturity dates from 5 to 40 years ("Application"). Application at 1. The Company represents net
proceeds from the Notes will be used for: (1) refinancing of existing debt; (2) funding capital
expenditures; and(3) general corporate purposes. Id. at 4. The Company anticipates one or more
private placement investors and the interest rates on the Unsecured Notes will be set at the time of
the issuance based on 5 to 40 year Treasury rates plus a credit spread of 120-170 basis points. Id.
at 3. The Company issued payment to the Commission for the filing fees on August 3, 2026.
STAFF DISCUSSION AND RECOMMENDATIONS
Staff has reviewed the Application and believes that the proposed debt meets the
requirements under Idaho Code § 61-901, as it is for more than one year (5-40 years) and is for
the acquisition of property; the construction, completion, extension, or improvement of its
facilities; the improvement or maintenance of its service; and the refinancing of its current
obligations. The Company's Application also conforms to all filing requirements under Idaho
Code § 61-905 and IDAPA 31.01.01.141-150.
In the Company's most recent general rate case, Case No. INT-G-25-02, the approved
weighted average cost of debt was 4.965%. INT G-25-02 Stipulation at 3. The interest rates shown
above are greater than the Company's current weighted average cost of debt,which Staff believes
is consistent with the current interest rate environment. In 2025, the average 5-year Treasury rate
DECISION MEMORANDUM - 1 - AUGUST 18, 2026

was 3.90%,1 and the 30-year Treasury rate was 4.77%.2 As of August 6,2026,the 5-year Treasury
rate was 4.32%,3 and the 30-year Treasury rate was 5.16%.4 The actual interest rate will be
dependent on Treasury rates at the time of issuance.
Based on its review, Staff recommends the Commission authorize the Company's request
to issue and sell up to $60,000,000 of Unsecured Notes for the purposes described above. A
Commission Order approving the proposed financing and the general purposes for which the
proceeds will be used is not a determination of prudence regarding the Company's specific use of
the proceeds.
Staff also recommends the Commission require the Company to submit the documents
detailing the amount issued and all other terms of the securities within 7 days of those documents
being available.
Staff further recommends the Commission require the Company to continue submitting
quarterly reports that include: the date of issuance,principal amount,interest rate, date of maturity,
and identity of the payee issued during the quarter.
COMMISSION DECISION
Does the Commission wish to approve the Company's request to issue and sell up to
$60,000,000 in Unsecured Notes?
Does the Commission wish to require the Company to be subject to the reporting and filing
requirements identified in Staff's Comments?
t,w
James Chandler
Auditor 3
I:\Utility\UDNMMOS\INTG2603jc.docx
'https://ycharts.com/indicators/5year_treasury_rate_monthly
2 https://ycharts.com/indicators/30_year treasury_rate_monthly
3 https://www.cnbc.com/quotes/LJS5Y
a https://www.cnbc.com/quotes/LJS30Y
DECISION MEMORANDUM - 2 - AUGUST 18, 2026