20050725Application.pdf

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!Ll 1-10 PUBLIC
INTERMOUNTAIN GAS COMPANY UfILIT!ES COMMISSION
CASE NO. INT-O5-al
APPLICA TION
and
EXHIBITS
In the Matter of the Application of INTERMOUNTAIN GAS COMPANY
for Authorization to Issue and Sell Securities
Morgan W. Richards, Jr.
ISB # 1913
804 East Pennsylvania Lane
Boise, Idaho 83706
Telephone [phone]
Attorney for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
INTERMOUNTAIN GAS COMPANY
for Authorization to Issue and Sell Securities
Case No. INT-05-
APPLI CA TI 0 N
Intermountain Gas Company ("Intermountain ), an Idaho corporation with general offices
located at 555 South Cole Road, Boise, Idaho, does hereby request authorization of a revolving
credit facility of Forty-five Million Dollars ($45 000 000) for a period of five (5) years with an
option to borrow an additional Twenty-five Million Dollars ($25 000 000) for the same five (5) year
period ($70 million in total), replacing Intermountain s current revolving line of credit of Thirty-
five Million Dollars ($35 000 000).
Communications in reference to this Application should be addressed to:
Michael E. Rich
Vice President & Treasurer
Intermountain Gas Company
Post Office Box 7608
Boise, ID 83707
and
Morgan W. Richards, Jr.
Attorney
804 East Pennsylvania Lane
Boise, Idaho 83706
In support of this Application, Intermountain does allege and state as follows:
APPLICATION -
Intermountain is a gas utility, subject to the jurisdiction of the Idaho Public Utilities
Commission, engaged in the sale 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 s Articles of Incorporation
and Amendments thereto are on file with this Commission in Case No. U-1034-120, to which
reference is hereby made.
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 - 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 Shelly;
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, Conda, 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 - Bliss, Gooding, and Wendell;
Jefferson County - Lewisville, Menan, Ririe, and Rigby;
Jerome County - Jerome;
Lincoln County - Shoshone;
Madison County - Rexburg, and Sugar City;
Minidoka County - Heybum, Paul, and Rupert;
Owyhee County - Bruneau, 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, a compressor
station, a liquefied natural gas storage facility, distribution mains, services, meters and regulators
and general plant and equipment.
APPLICATION -
II.
Commission Order No. 29413 , dated January 7, 2003 , granted Intermountain authority to
enter into a renegotiated senior revolving credit line not to exceed Thirty-five Million Dollars
($35 000 000) at anyone time. Such authority was granted from the date of the Order and expires
on January 20, 2007.
This Application seeks authority to replace the existing revolving line of credit with a
revolving line of credit of Forty-five Million Dollars ($45 000 000) for a period of five (5) years
with an option to borrow an additional Twenty-five Million Dollars ($25 000 000) for the same five
(5) year period ($70 million in total) from execution and delivery of the credit agreement.
Based on this Commission s authorization, the revolving line of credit not to exceed
Seventy Million Dollars ($70 000 000) will continue to be used in the traditional way by
Intermountain in financing principally its construction needs and other working capital
requirements.
A copy of Intermountain s Articles of Incorporation, as amended and as of record in the
office of the Secretary of State of Idaho is filed as Exhibit No.1 in the Application in Case No.
INT-89-, and is incorporated herein by reference. No change has been made to the Articles on
file with this Commission. The Board of Directors of Intermountain has duly authorized the
requested line of credit at Intermountain s Board Meeting held July 13, 2005. A copy of the
Resolution authorizing the line of credit is attached hereto as Exhibit No.2 and is incorporated
herein by reference.
III.
The terms and conditions of the revolving line of credit of Forty-five Million Dollars
($45 000 000) with the option to borrow an additional Twenty-five Million Dollars ($25 000 000)
($70 million in total) are incorporated herein by reference as though fully set out.
A copy of the terms for the above referenced line of credit is attached hereto as Exhibit No.
Summary of Terms and Conditions
Lender:
Intermountain Gas Company
sYndicate of financial institutions arranged by Banc of
Borrower:
APPLICATION -
Principal Amount:
America Securities LLC
Revolving Line of Credit - $45 000 000 with an option to
borrow an additional $25 000 000 ($70 million in total)
Security:
Use of Proceeds:
None
To refinance certain existing indebtedness, and to provide for the
working capital, deferred gas costs, and general corporate
purpose needs of Intermountain.
Commitment Fee:
Five (5) years from execution and delivery of the credit
agreement, or approximately August 30, 2010.
The Borrower will pay a fee determined in accordance with the
Performance Pricing grid set forth below, on each Lender
commitment amount. The Commitment Fee will be charged on
the difference between the maximum amount of Intermountain
Revolving Credit Facility and the sum of (a) the average
principal amount outstanding under the Revolver, and (b) the
amount of Letters of Credit issued, each for the preceding
quarterly period. The Commitment Fee is accrued quarterly in
arrears commencing upon the Closing Date and payable
quarterly in arrears commencing September 30, 2005.
Maturity:
Consolidated LIBOR Applicable
Indebtedness to Margin and Letter of
Level Capitalization Commitment Fee Credit Fee
::::-60%30 bps 125.0 bps
::::-55% 0:::: 60%20 bps 112.5 bps
ill ::::-45% 0:::: 55%15 bps 87.5 bps
0::::45%12.5 bps 62.5 bps
Other Requirements:Costs associated with this transaction are to be paid by
Intermountain.
IV.
The proceeds from the proposed revolving line of credit of Forty-five Million Dollars
($45 000 000) with an option to borrow an additional Twenty-five Million Dollars ($25 000 000)
($70 million in total) will continue to be used in the traditional way by Intermountain in financing
principally its construction needs and other working capital requirements.
APPLICATION -
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.
Intermountain statement of capitalization as of September 30, 2004, showing all
authorized and outstanding classes of securities, is as follows:
September 30, 2004
Amount
Outstanding
($000' s)Ratio
Long-Term Debt:
TIAA Senior Debentures
Wells Fargo Bank Revolving Line of Credit
Total Long-Term Debt
Common Shareholder s Interest
Total Capitalization
$58 000
17,000
000
67,792
(1)
52.
47.
1 00.
(1) Amount Outstanding on $35 Million Line of Credit.
VI.
The estimated fees and expenses of the issuance of such promissory notes are expected to
total $163 500 consisting of the following:
Facility Fees
Legal and SYndication Fees
IPUC Issuance Fees
Total
$112 500.
000.
1,000.
$J 63 500.
VII.
The fee of $1 000., required by Section 61-905 of the Idaho Code, was determined as
follows:
First
Next
Remaining
$ 100 000 at $1.00 per $1 000 =
900 000 at $0.25 per $1 000 =
69,000,000 at $0.10 per $1 000 =
$ 70 000.000
$ 100.
225.
900.
225.
APPLICATION -
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.
VIII.
This Application is filed pursuant to the applicable statutes, including Idaho Code Sections
61-901 , 61-902, 61-903 and 61-905, the Rules and Regulations of this Commission and resolution
of the Board of Directors of Intermountain.
Intermountain stands ready for an immediate hearing of this Application if such
determined necessary by this Commission.
Proposed Order granting this Application is attached hereto as Exhibit 4 and is
incorporated herein by reference.
IX.
Notice of this Application will be published prior to Commission authorization in The
Idaho State Journal, The Idaho Statesman, The Post Register and The Times News pursuant to
Rule 141.8 of the Commission s Rules of Practice and Procedure.
APPLICATION -
WHEREFORE, Intermountain respectfully petitions the Idaho Public Utilities Commission
as follows:
That this Application be processed without hearing pursuant to the Rules and
Regulations of this Commission and acted upon at the earliest possible date;
Additionally, that this Commission approve and authorize the issuance of a line
credit for the purposes described up to and including Seventy Million Dollars ($70 000 000) for a
period of five (5) years.3. That this Commission allow Intermountain to manage its short-term financing
pursuant to the order issued in this matter until such time as Intermountain s Board of Directors
changes the authorized level of such short-term borrowing, 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;
For such other and further relief as to this Commission seems proper.
DATED at Boise, Idaho, this 25th day of July 2005.
INTERMOUNTAIN GAS COMPANY
APPLICATION -
EXHIBIT NO.
CASE NO. INT-O5-C)(
INTERMOUNTAIN GAS COMPANY
ARTICLES OF INCORPORATION
(On File)
EXHIBIT NO.
CASE NO. INT-O5-6f
INTERMOUNTAIN GAS COMPANY
BOARD RESOLUTION
(1 page)
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EXHIBIT NO.
CASE NO. INT-O5-
INTERMOUNTAIN GAS COMPANY
IDAHO PUBLIC UTILITIES COMMISSION
PROPOSED ORDER
(4 pages)
PROPOSED ORDER OF APPLICANT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
INTERMOUNTAIN GAS COMPANY
for Authorization to Issue and Sell Securities
Case No. INT -05-
ORDER NO.
On July 25 , 2005 , Intermountain Gas Company (hereinafter "Intermountain" or "IGC"
filed an Application pursuant to Chapter 9 of Title 61, Idaho Code and Rules 141 through 150 of
the Commission s Rules of Procedure. IDAPA 31.01.01.141-150. Through this Application, IGC
requests authorization of a revolving line of credit, not to exceed $70 000 000, for a period of five
years, replacing Intermountain s current revolving line of credit of $35 000 000. IGC contends that
this line of credit will continue to be used in the traditional manner, which is principally to finance
construction needs and other working capital requirements.
The Idaho Public Utilities Commission, having fully considered the Application and
exhibits attached thereto, and all of the Commission files and records pertaining to this
Application, now makes the following Findings of Fact and Conclusions of Law:
FINDINGS OF FACT
IGC is an Idaho corporation with its office and principal place of business in Boise, Idaho.
IGC is a natural gas public utility, owning and operating transmission pipelines, a compressor
station, a liquefied natural gas storage facility, distribution mains, services, meters and regulators
and general plant and equipment.
Intermountain seeks the Commission s authorization and permission to issue a revolving
line of credit not to exceed $70 000 000 at anyone time outstanding for a period of five years from
the execution and delivery of the credit agreement.The revolving line of credit will be
administered through Bank of America, N.A.. The proceeds from the borrowing of this issuance
will be used principally to finance construction and other working capital requirements ofIGC.
ORDER NO.PAGE 1
CONCLUSIONS OF LAW
IGC is a gas corporation within the definition of Idaho Code 9 61-117 and is a public utility
within the definition of Idaho Code 9 61-129.
The Idaho Public Utilities Commission has jurisdiction over this matter pursuant to the
provisions of Idaho Code 9 61-901 et seq.and the Application reasonably conforms to Rules 141-
150 of the Commission s Rules of Procedure (IDAP A 31.01.01-141-150).
The method of issuance is proper.
The general purposes to which the proceeds will be put are lawful under the Public Utility
Law of the state of Idaho and are compatible with the public interest. However, this general
approval of the general purposes to which the proceeds will be put is neither a finding of fact nor a
conclusion of law that any particular construction program of IGC which may be benefited by the
approval of this Application has been considered or approved by this Order, and this Order shall not
be construed to that effect.
The issuance of an Order authorizing the proposed financing does not constitute agency
determination/approval of the type of financing or the related costs for ratemaking purposes. The
Idaho Public Utilities Commission does not have before it for determination, and therefore does not
determine, any effect of the proposed transactions on rates to be charged by IGC for natural gas to
consumers in the state of Idaho.
All lawful fees have been paid by Intermountain as provided by Idaho Code 9 61-905.
The Application should be approved.
ORDER
IT IS THEREFORE ORDERED that the Application of Intermountain Gas Company for
authority to issue a revolving line of credit not to exceed $70 000 000 at anyone time outstanding
as described in its Application should be, and the same hereby is, GRANTED.
IT IS FURTHER ORDERED that this authority will be from the date of this Order and
expIre on
IT IS FURTHER ORDERED that Intermountain will continue to make quarterly reports
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
ORDER NO.PAGE 2
IT IS FURTHER ORDERED that the foregoing authorization is without prejudice to the
regulatory authority of this Commission with respect to rates, service, accounts, valuation, estimates
or determination of cost or any other matter which may come before this Commission pursuant to
this 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 Rules 141-150 of the Commission s Rules of Procedure, or any act or deed
done or performed in connection with this Order shall be construed to obligate the state of Idaho to
payor guarantee in any manner whatsoever any security authorized, issued, assumed or guaranteed
under the provisions of said Chapter 9, Title 61, Idaho Code and Rules 141-150 of the
Commission s Rules of Procedure.
IT IS FURTHER ORDERED that issuance of this Order does not constitute acceptance of
Intermountain s exhibits or other material accompanying this 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.
ORDER NO.PAGE 3
DONE by Order of the Idaho Public Commission at Boise, Idaho this
August 2005.
day of
PRESIDENT
COMMISSIONER
COMMISSIONER
ATTEST:
SECRETARY
. -
ORDER NO.PAGE 4
ffitt Thomas
MOFFATT THOMAS BARRETT ROCK & FIELDS, CHTD.
Eugene C. Thomas
John W. BarrertR. B. Rock
Richard C. Fields
Robert E. Bakes
John S. Simko
John C. Ward
D. James Manning
Gary T. Dance
Larry C. Hunter
Randall A. Peterman
Mark S. Prusynski
Stephen R. Thomas
Glenna M. Christensen
Gerald T. Husch
Scott L. Campbell
Robert B. Burns
James C. DaleMichael E. Thomas
Patricia M. Olsson
James C. deGlee
Bradley J Williams
Lee Radford
Michael O. Roe
David S. Jensen
James L. MartinC. Clayton Gill
David P. Gardner
John O. Fitzgerald, II
Julian E. GabiolaAngela Schaer Kaufmann
Michael W. McGreaham
Kimberly D. Evans Ross
Jon A. Stenquist
Eric M. Barzee
Valerie N. Charles
Jason G. Murray
Mark C. Peterson
Andrew J. Waldera
Tyler J. Anderson
Russell G. Metcalf
July 25 , 2005
via Hand Delivery
Morgan W. Richards of counsel
Willis C. Moffatt 1907 -1980
Kirk R. Helvie 1956-2003
c;:::
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Ms. Jean Jewell
Idaho Public Utilities Commission
472 West Washington
Post Office Box 83720
Boise, Idaho 83720-0074
Re: Case No. INT-O5-
MTBR&F File No. 11-500.335
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Dear Ms. Jewell:
Boise
Idaho Falls
Pocatello
Twin Falls
US Bank Plaza Building
101 S Capitol Blvd 10th
PO Box 829
Boise Idaho 83701 0829
208345 2000
800 422 2889
208 385 5384 Fax
www.moffattcom
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Pursuant to PUC IDAP A Rules 31.01.01.067, 31.01.01.233 and 31.02.01.005.07 and pursuant
to Idaho Code Section 9-340D and Section 48-801 et seq., Intermountain Gas Company hereby
files Exhibit No.Terms and Conditions of Revolving Line of Credit Agreement. As
General Counsel of Intermountain Gas Company, I have been asked to inform you that this
information is confidential and contains trade secrets. We ask that it be protected from
inspection, examination or copying by any person other than the Commission and PUC staff.
Thank you for your cooperation. If you should have questions or comments, please contact
Michael McGrath (377-6168) or me (345-2000), and if unavailable at this number, then Cheryl
Bruehl (385-5493).
Etgene . Thomas
General Counsel
Intermountain Gas Company
ECT /
Enclosures
BOI MT2:588108.