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HomeMy WebLinkAbout20100621_3001.pdfDECISION MEMORANDUM TO:CO MMISSI 0 NER KEMPTON COMMISSIONER SMITH COMMISSIONER REDFORD COMMISSION SECRETARY LEGAL WORKING FILE FROM:TERRI CARLOCK DATE:JUNE 18,2010 RE:INTERMOUNT AIN GAS COMPANY AUTHORIZATION TO ISSUE AND SELL $80 MILLION; CASE NO. INT-I0- On May 28 2010, Intermountain Gas Company (IGC or Company) filed an Application requesting authority to enter into a base revolving line of credit facility with Bank of America for $65 Million with the ability to utilize an additional amount of $15 Million. This total authority of $80 Million replaces the current revolving line of credit of $70 Million expiring August 31 2010. This authority is requested for a three-year period. The proceeds will be used to finance construction needs, pay deferred gas costs, and cover other working capital requirements. Interest rates will be based on London Interbank Offered Rate (LIBOR), Bank of America Prime Rate or the Federal Funds rate. Additional charges will be incurred for administrative fees of $15 000 annually and commitment fees based on a performance grid. The performance grid has four levels with the rate determined by the ratio of consolidated funded indebtedness to total capitalization ratio. Therefore the higher the level of debt incurred, the greater the borrowing cost for borrowed funds. STAFF RECOMMENDATION Staff recommends approval ofthe Application to enter into $80 Million line of credit agreements as described. Staff also recommends IGC continue to file quarterly reports with the Commission showing its capitalization ratio and debt borrowing information including interest rates paid. DECISION MEMORANDUM - 1 -JUNE 18 2010 All fees have been paid in accordance with Idaho Code ~ 61-905. COMMISSION DECISION Does the Commission approve IGC's request to enter into revolving line of credit agreements of $65 Million for a period of three years with an option to borrow an additional $15 Million also for three years? Does the Commission accept the proposed reporting requirements? Ya.lu G/Vv"YV'- Terri Carlock udmemos/intglO.2 dec memo tc DECISION MEMORANDUM - 2 -JUNE 18 2010