20100621_3001.pdf

DECISION 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