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Home My WebLink About20100601Application.pdfMoftt Thomas MOFFATT THOMA BARTT ROCK & FIELDS, CHTD. Boise Idaho Falls Pocatello Twin Falls Ms. Jean Jewell Idaho Public Utilities Commission 472 West Washington Post Offce Box 83720 Boise, Idaho 83720-0074 Eugene C. Thomas John W. BarrettR. B. Rock Richard C. Fields John S. Simko John C. WardD. James Manning Gary T. Dance Larry C. Hunter Randall A. Peterman Mark S. Pruynski Stephen R. Thomas Glenna M. Chrisrensen Gerald T. Husch Scott L. Campbell Robert B. Burns Michael E. Thomas Patricia M. Olsson Bradley J Williams Lee Radford Michael o. Roe David S. Jensen James L. Martin C. Clayton Gill Michael W. McGreaham David P. Gardner Julian E. GabiolaAngela Schaer Kaufmann Kimberly D. Evans Ross Paul D. McFarlane Jon A. StenquistTyler J. Henderson US Bank Plaza Building 1 01 S Capitol Blvd 10th FI PO Box 829 Boise, Idaho 83701 0829 C. Edward Cather II Jason G. MurrayMark C. Peterson Andrew J. Waldera Tyler J. Anderson Dylan B. Lawrence Russell G. Metcaf Benjamin C. Ritchie Rebecca A. Rainey May 28, 2010 Via Hand Delivery 2083452000 8004222889 208 385 5384 Fax ww.moffatt.com Robert E. Bakes, of counsel Morgaii W. Richards, of counsel r.c=~c=:i:;-iN00 ..:: ~(,0" Willis C. Molltt, 1907-1980 Kirk R. Helvie, 1956-2003 Re: Intermountain Gas Company Case No. INT-G-IO-o: MTBR&F File No. 11-500.0340 Dear Ms. Jewell: Enclosed for fiing please find an Application for Authorization to Issue and Sell Securties. Also enclosed is a check for the amount of$1000.00. Than you. . Thomas y for Intermountain Gas Company Client: 1656453.1 Mofftt Thomas MOFFATT THOMA BARETT ROCK & FIELDS, CHID. Boise Idaho Falls Pocatello Twin Falls Ms. Jean Jewell Idaho Public Utilities Commission 472 West Washington Post Offce Box 83720 Boise, Idaho 83720-0074 Eugene C. Thomas John W. BarrettR. B. Rock Richard C. Fields John S. Simko John C. WardD. James Manning Gar 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 Michael E. Thomas Patricia M. Olsson Bradley J Williams Lee Radford Michael O. Roe David S. Jensen James L. Martin C. Clayton Gill Michael W. McGreaham David P. Gardner Julian E. Gabiola Angela Schaer Kaufmann Kimberly D. Evans Ross Paul D. McFarlane Jon A. StenquistTyler J. Henderson US Bank Plaza Building 101 S Capitol Blvd 10th FI PO Box 829 Boise, Idaho 83701 0829 C. Edward Cather II Jason G. MurrayMark C. Peterson Andrew J. Waldera Tyler J. Anderson Dylan B. Lawrence Russell G. Metcalf Benjamin C. Ritchie Rebecca A. Rainey May 28, 2010 Via Hand Delivery 2083452000 8004222889 208 385 5384 Fax www.moffatt.com Robert E. Bakes, of counsel Morgan W. Richards, of counsel ~~c=:s~N CO Willis C. Molltt, 1907-1980 Kirk R. Helvie, 1956-2003 "",'01':i ~ý,-Ji¡vT-G-lO-O~ Re: Intermountain Gas Company MTBR&F File No. 11-500.0340 Dear Ms. Jewell: Today, contemporaneous with this letter, Intermountain Gas Company fied with the Commission an Application for Authorization to Issue and Sell Securties, of which the Commission is aware generally. We now enclose copies of the two lender's commitment letters referenced in that Application, which documents outline the terms of the proposed credit agreement. They are submitted on yellow paper because they are protected pursuant to Idaho law in general and, in particular, the sections ofIdaho law cited below. Pursuant to PUC IDAPA Rules 31.01.01.067,31.01.01.233, and 31.02.01.005.07, Idaho Code Sections 9-340D, and Idaho Code Section 48-801 et seq., Intermountain Gas Company hereby states that the enclosed credit documents are and contain confidential, proprietary and trade secret information, and/or are otherwise exempt from disclosure under Idaho law, including that law cited above. We ask that it be protected from inspection, examination or copying by any person other than the Commissioners and PUC Staff. Than you for your cooperation. If you should have comments or questions regarding this reque , please contact Kathie Barnard (377-6168) or me. . Thomas for Intermountain Gas Company Client: 1655159.2 INTERMOUNTAIN GAS COMPANY CASE NO. INT-G-I0-0~ APPLICATION And EXHIBITS RECE 2ßlf HAY 28 PM 2: 36 In the Matter of the Application of INTERMOUNAIN GAS COMPAN for Authorization to Issue and Sell Securities Stephen R. Thomas, ISB 2326 MOFFATT THOMAS BARRTT ROCK & FIELDS, CHTD. 101 S. Capitol Boulevard, Suite 1000 Boise, Idaho 83702 Telephone: (208) 345-2000 Attorney for Intermountan Gas Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION In the Matter of the Application of INTERMOUNTAIN GAS COMPANY for Authorization to Issue and Sell Securties Case No. INT -G-1O-0J, APPLICATION Intermounta Gas Company ("Intermountai" or "Company"), a subsidiar of MDU Resources Group, Inc. with general offices located at 555 South Cole Road, Boise, Idaho, does hereby request authorization of a revolving credit facility of Sixt-Five Milion Dollars ($65,000,000) for a period of thee (3) years with an option to borrow an additional Fifteen Milion Dollars ($15,000,000) for the same thee (3) years period, or Eighty Milion Dollars ($80,000,000) in total. The new credit facility replaces Intermountain's curent revolving line of credit of Seventy Milion Dollars ($70,000,000) which expires at the end August 2010. Communcations in reference to ths Application should be addressed to: Katherine Barard, Manager - Gas Supply and Regulatory Affairs Intermountain Gas Company and Cascade Natural Gas Corporation 222 Fairview Avenue North Seattle, WA 98109-5312 and Stephen R. Thomas, ISB 2326 MOFFATT THOMAS BARRTT ROCK & FIELDS, CHTD. 101 S. Capitol Boulevard, Suite 1000 Boise, Idaho 83702 In support of this Application, Intermountain does allege and state as follows: APPLICATION -1 I. Intermountan is a gas utilty, subject to the jursdiction of the Idaho Public Utilties Commission, engaged in the sale of and distrbution of natual gas withn 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. Intermountai provides natual gas servce to the following Idaho communties 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, MorelandJverside, and Shelley; Blaine County - Bellevue, Hailey, Ketchum, and Sun Valley; Bonnevile County - Amon, Idao Falls, Iona, and Ucon; Canyon County - Caldwell, Greenleaf, Middleton, Nampa, Panna, and Wilder; Caribou County - Bancroft, Conda, Grce, and Soda Springs; Cassia County - Burley, Declo, Malta, and Raft River; Elmore County - Glenns Ferr, Hammett, and Mountain Home; Fremont County - Parker, and St. Anthony; Gem County - Emmett; Gooding County - Gooding, and Wendell; Jefferson County - Lewisvile, Menan, Rigby, and Ririe; Jerome County - Jerome; Lincoln County - Shoshone; Madison County - Rexburg, and Sugar City; Minidoka County - Heyburn, 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, Murtugh, and Twin Falls; Washington County - Weiser. Intermountain's properties in these locations consist of transmission pipelines, a liquefied natual gas storage facility, distrbution mains, servces, meters and regulators, and general plant and equipment. APPLICATION - 2 II. Commission Order No. 29855, dated August 24, 2005, granted Intermounta authority to enter into a renegotiated revolving credit line not to exceed Seventy Milion Dollars ($70,000,000) at anyone time. Such authority was granted from the date of the Order and expires on August 31, 2010. This Application seeks authority to replace the existing revolving line of credit with a revolving line of credit of Sixty-Five Milion ($65,000,000) for a period of thee (3) years with an option to borrow an additional Fifteen Milion ($15,000,000) for the same thee (3) year period ($80 milion in total) from execution and delivery of the credit agreement. Based on this Commission's authorization, the revolving line of credit not to exceed Eighty Milion Dollars ($80,000,000) will continue to be used in the traditional way by Intermountain in financing pricipally its constrction needs and other working capita requirements. The Board of Directors of Intermountain has duly authorized the requested line of credit. A copy of the Resolution languge authorizing the line of credit is attched hereto as Exhibit No. 1 and is incorporated herein by reference. III. The terms and conditions of the revolving line of credit of Sixty-Five Milion Dollars ( $65,000,000) with the option to borrow an additional Fifteen Milion Dollars ($15,000,000), or $80 millon in total, are incorporated herein by reference as though fuly set out. A copy of the terms for the above referenced line of credit agreement will be submitted under separate cover and ìs to be treated as confdential pursuat to PUC IDAP A Rules 31.01.01.067, 31.01.01.233, and 31.02.01.005.07, together with Idao Code Sections 9-340D and Idaho Code Sections 48-801 et seq. Sumar of Terms and Conditions Borrower:Intermountain Gas Company APPLICATION - 3 Lender:A syndicate of financial institutions aranged by Banc of America Securties LLC and Ban of America, N.A. Principal Amount:Revolving Line of Credit - $65,000,000, which will include a $10 Milion sub limit for standby letters of credit and a $5 Millon sublimit for swingline loans. The Borrower has the right to borrow an additional $15,000,000 subsequent to the Closing Date up to an aggregate amount not to exceed $80 millon. Interest Rates:At the Borrower's option, any loan under the credit facilty will bear interest at a rate equa to (i) LIBOR plus the Applicable Margin, as determined in accordance with the Performance Pricing grd set fort below or (ii) the Base Rate (to be defined as the highest of (a) the Ban of America prime rate, (b) the Federa Funds rate plus .50% and (c) a daily rate equa to one-month LIBOR plus 1.00%). Securty:None Use of Proceeds:To refinance certn existing indebtedness, and to provide for the working capita, capita expenditues, deferred gas costs, and general corporate purose needs of Intermountain. Matuty:Three (3) year from the execution and delivery of defintive documentation for the Senior Credit Facilty, or approximately June 30, 2013 Administrative Fees:Anually, beginning at the time of closing and each year on the aniversar date of the credit facilty, the Borrower will pay an Administrative Fee of$15,000 to Ban of America. Commitment Fee:The Borrower will pay a fee determned in accordace with the Performance Pricing grd set fort below, on the actual daily unused amount of each Lender's commitment. The Commitment Fee is payable quaerly in arears, commencing on the first quaerly payment date to occur afer the Closing Date, or September, 2010. Consolidated Funded Pricing Indebtedness to Total Commitment Applicable Margin Letter of Level Capitalization Ratio Fee for LIBOR loans Credit Fee I ~ 0.60:1.0 0.50%2.50%2.50% II ~0.55:1.0 but.. 0.60: 1.0 0.40%2.25%2.25% II ~0.45:1.0 but.. 0.55: 1.0 0.30%2.00%2.00% iv .. 0.45:1.0 0.25%1.75%1.75% APPLICATION - 4 Other Requirements:Costs associated with ths tranaction are to be paid by Intermountai. iv. The proceeds from the proposed revolving line of credit of Sixty-Five Milion Dollars ($65,000,000) with an option to borrow an additional Fifteen Milion Dollars ($15,000,000) ($80 milion in total) will continue to be used in the traditional way by Intermountan in financing principally its constrction needs and other working capita requirements. These uses are consistent with the public interest and necessar, appropriate, and consistent with the proper and legally mandated performance to the public by Intermountan as a public utilty. V. Intermountan's statement of capitaization as of March 31, 2010, showing all authorized and outstading classes of securties, is as follows: March 31, 2010 Common Stock & Surlus Long-Term Debt Total Capitalization Amount Outstading ($OOO's) $85,917 42,182 $128.099 Ratio 60.9% 39.1% 100,0% VI. The estimated fees and expenses of the issuace of such revolving credit facilty are expected to total $333,500 consisting ofthe followig: Arangement Fees Legal and Syndication Fees IPUC Issuance Fees $307,500.00 25,000.00 1,000.00 APPLICATION - 5 Total $333.500.00 VII. The fee required by Section 61-905 of the Idaho Code, was determned as follows: First $ 100,000 at $1.00 per $1,000 = $ 100.00Next 900,000 at $0.25 per $1,000 = 225.00Remainng 64,000,000 at $0.10 per $1,000 = 6,400.00$ 65,00Q,QOO = $ 6,725.00 As this amount is larger than the $1,000 maximum fee set fort in Section 61-905 of the Idaho Code, a check for $1,000 is enclosed with ths Application. VIII. This Application is filed pursuat to the applicable statutes, including Idaho Code Sections 61-901,61-902,61-903 and 61-905, and the Rules and Regulations of this Commssion. Intermountain stads ready for an immediate hearing of ths Application if such is determined necessar by this Commission. A proposed Order granting ths Application is attched hereto as Exhbit 2 and is incorporated herein by reference. ix. Notice of ths Application will be published prior to Commission authorization in The Idaho State Journal, The Idaho Statesman, The Post Register, and The Times News puruant to Ru1e 141.8 of the Commission's Ru1es of Practice and Procedure. APPLICATION - 6 WHEREFORE, Intermountain respectfully petitions the Idaho Public Utilties Commission as follows: a. That ths Application be processed without hearng pursuat to the Rules and Regulations of this Commission and acted upon at the earliest possible date; b. That this Commssion approve and authorize the issuace of a line of credit for the puroses described up to and including Eighty Milion Dollars ($80,000,000) for a period of three (3) years. c. That ths Commission allow Intermountan to manage its short-term financing pursuat to the order issued in this matter until such time as Intermountan's Board of Directors changes the authorized level of such short-term borrowing, with Intermountain making quarerly reports to ths Commission settng fort the date of issuance, principal amount, interest rate, date of matuty and identity of payee for all promissory notes issued durng such quarer; d. For such other relief as this Commission may determine proper relative to this Application. DATED at Boise, Idaho, this 28th day of May, 2010. INTERMOUNTAIN GAS COMPANY MOFFATT THOMAS BARRTT ROCK & FIELDS, CHTD. Tomas. or Intermountain Gas Company B L/ .. .y nL.CU'\L~J~ Katherine Barard Manager - Gas Supply and Regulatory Affairs By APPLICATION - 7 Exhibit 1 CASE NO. INT-G-I0-0J. INTERMOUNTAIN GAS COMPANY Board Resolution (1 page) RESOLVED, that Intermountain Gas Company (the "Company") is authorized and directed to enter into a revolving credit facility of Sixty-Five Million Dollars ($65,000,000) for a period of three (3) years, with an option to borrow an additional Fifteen Milion Dollars ($15,000,000) for the same three year period, or an aggregate loan commitment of Eighty Milion Dollars ($80,000,000) (the "Agreement"), by and between the Company and Ban of America, N.A. ("Ban of America"), as agent for a syndication of lenders (including Ban of America) (collectively the "Lenders"), the terms of the Agreement which shall also be par passu with the terms of the TIAA-CREF (formerly known as Teachers Insurance and Anuity Association) loan to the Company dated September 18, 1998; and the Agreement refinances the Company's curent revolving credit facility with an aggregate loan commitment of $70 million with Ban of America and other lenders; FURTHER RESOLVED, that the Chairman of the Board, Chief Executive Officer, President, any Vice President, Chief Financial Offcer, Treasurer, and General Counsel be, and each of them hereby is, authorized and empowered, in the name and on behalf of the Company, to execute and deliver the Agreement, promissory notes, and other related loan documents necessary or advisable to borrow and repay funds under the Agreement, with such changes therein as the officer executing the same may approve, such execution thereof to be conclusive evidence of the offcer's authority granted herein and the approval thereof by the Board of Directors; and FURTHER RESOLVED, that the authorized offcers be, and each of them hereby is, authorized and empowered to take or cause to be taken any and all fuher actions and to execute and deliver or cause to be executed and delivered all fuher agreements, documents, certificates, and undertakings, in the name and on behalf of the Company, and to make such fiings or applications with governental or regulatory agencies and authorities as the authorized offcers may determine to be necessary, proper, or desirable to carr into effect the intent and purose of any and all of the foregoing resolutions; and the delivery of any such agreement, document, certificate, and/or undertaking shall be conclusive evidence of the offcer's authority granted herein and the approval thereof by the Board of Directors; and all actions previously taken by any officer or agent of the Company in connection with the transactions contemplated by the Agreement (including, but not limited to, the negotiation of the Agreement and all related agreements) and the transactions contemplated by the foregoing resolutions are hereby ratified, approved, and confirmed in all respects. Exhibit 2 CASE NO. INT-G-I0-~ INTERMOUNTAIN GAS COMPANY IDAHO PUBLIC UTILITIES COMMISSION PROPOSED ORDER (4 pages) PROPOSED ORDER OF APPLICAN BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION In the Matter of the Application of INTERMOUNTAIN GAS COMPANY for Authorization to Issue and Sell Securties Case No. INT-G-1O-~ ORDER NO. On May 28, 2010, Intermountan Gas Company ("Intermountain" or "Company"), a subsidiar of MDU Resources Group, Inc. filed an Application pursuat to Chapter 9 of Title 61, Idaho Code and Rules 141 through 150 of the Commssion's Rules of Procedure. IDAPA 31.01.01.141-150. Though this Application, Intermountain requests authorization of a revolving line of credit, not to exceed $80,000,000, for a period of 3 years, replacing Intermountan's curent revolving line of credit of $70,000,000. Intermountain contends that ths line of credit will continue to be used in the traditional maner, which is principally to finance construction needs and other working capital requirements. The Idaho Public Utilties Commission, having fully considered the Application and exhibits attched thereto, and all of the Commission's fies and records pertning to this Application, now makes the following Findings of Fact and Conclusions of Law: FININGS OF FACT Intermountain is an Idaho corporation with its offce and principal place of business in Boise, Idaho. Intermountain is a natual gas public utility, ownng and operating transmission pipelines, a liquefied natual gas storage facilty, distrbution mains, services, meters and regulators, and general plant and equipment. Intermountain seeks the Commission's authorization and permssion to issue a revolving line of credit not to exceed $80,000,000 at anyone time outstanding for a period of three years from the execution and delivery of the credit agreement. The revolving line of credit will be admnistered though Ban of America, N.A. The proceeds from the borrowing in this issuace will be used principally to finance constrction and other workig capital requirements of Intermountan. ORDER NO.PAGE 1 CONCLUSIONS OF LAW Intermountain is a gas corporation withn the defiition of Idaho Code § 61-117 and is a public utilty within the definition of Idaho Code § 61-129. The Idaho Public Utilties Commission has jurisdiction over this matter pursuant to the provisions of Idaho Code § 61-901, et seq., and the Application reasonably conforms to Rules 141- 150 of the Commission's Rules of Procedure (IDAPA 31.01.01-141-150). The method of issuance is proper. The general puroses to which the proceeds will be put are lawf under the Public Utilty Law of the state of Idaho and are compatible with the public interest. However, this general approval of the general puroses to which the proceeds will be put is neither a finding of fact nor a conclusion of law that any paricular constrction program of Intermountain which may be benefited by the approval of this Application has been considered or approved by this Order, and this Order shall not be constred to that effect. The issuace of an Order authorizig the proposed financing does not constitute agency determination/approval of the tye of financing or the related costs for ratemakng puroses. The Idaho Public Utilties 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 Intermountain for natural gas to consumers in the state ofIdaho. All lawfl fees have been paid by Intermountain as provided by Idaho Code § 61-905. The Application should be approved. ORDER IT IS THEREFORE ORDERED that the Application of Intermountan Gas Company for authority to issue a revolving line of credit not to exceed $80,000,000 at anyone time outstanding as described in its Application should be, and the same hereby is, GRANTED. IT is FURTHER ORDERED that ths authority will be from the date of this Order and expire on IT IS FURTHER ORDERED that Intermountain will continue to make quaerly reports to this Commission setting forth the date of issuace, principal amount, interest rate, date of matuty and identity of payee for all promissory notes issued durng such quaer, 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 pursuat to this jursdiction and authority as provided by law. IT is FURTHER ORDERED that nothig in ths Order and no provisions of Chapter 9, Title 61, Idaho Code, or Ru1es 141-150 of the Commssion's Ru1es of Procedure, or any act or deed done or performed in connection with this Order shall be constred to obligate the state of Idaho to payor guaantee in any maner whatsoever any security authorized, issued, assumed or guaranteed under the provisions of said Chapter 9, Title 61, Idaho Code and Commssion Ru1es 141-150. IT is FURTHER ORDERED that issuace of ths Order does not constitute acceptace of Intermountain's exhbits or other material accompanying this Application for any purose other than the issuance of ths Order. THIS IS A FINAL ORDER. Any person interested in ths Order may petition for reconsideration withn twenty-one (21) days of the service date of ths 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 Idao Public Commission at Boise, Idaho this 2010. day of PRESIDENT COMMSSIONER COMMISSIONER ATTEST: SECRETARY ORDER NO.PAGE 4