20130603Application.pdf

EXECUTIVE OFFICES
IrurenuouNTArN Gls Coupn uv
sss SOUTH COLE ROAD . p.O. BOX 7608 . BO|SE,IDAHO 83107 . [phone] o FAX:[phone]
June 3, 2013
NEW CASE
RE: lntermountain Gas Company's Application to lssue and Sell Securities
Case No. INT-G-13-04
Dear Jean:
Enclosed for filing with this Commission are the origina! and seven (7) copies of
lntermountain Gas Company's Application to lssue and Sell Securities. Also enclosed is
a check in the amount of $1,000.00 for the IPUC lssuance Fee.
lf you have any questions or require additional information regarding the attached,
please contact me at [phone].
Sincerely,m
Jean Jewell
Idaho Public Utilities Commission
472W. Washington St.
P. O. Box 83720
Boise, lD 83720-0074
Director - Regulatory Affairs
Enclosures
cc: Scott Madison
Mark Chiles
Steve Thomas
INTERMOUNTAIN GAS COMPAIIY
CASE NO. INT.G.13.O4
APPLICATION
And
EXHIBITS
In the Matter of the Application of INTERMOUNTAIN GAS COMPA1YY
for Authorization to Issue and Sell Securities
Stephen R. Thomas,lSB 2326
MOFFATT THOMAS BARRETT ROCK & FIELDS, CHTD.
101 S. Capitol Boulevard, Suite 1000
Boise,Idaho 83702
Telephone: [phone]
Attomey 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-G-13-04
APPLICATION
Intermountain Gas Company ("Intermountain" or 'oCompany"), a subsidiary of MDU
Resources Group, Inc. with general offtces located at 555 South Cole Road, Boise, Idaho, does
hereby request authorization of a revolving credit facility of Sixty-Five Million Dollars
($65,000,000) 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, or Ninety Million Dollars
($90,000,000) in total. The new credit facility replaces Intermountain's current revolving line of
credit of Eighty Million Dollars ($80,000,000) which expires August 11,2013.
Communications in reference to this Application should be addressed to:
Michael P. McGrath
Intermountain Gas Company
555 S Cole Rd.
Boise,Idaho 83709
and
Stephen R. Thomas,lSB 2326
MOFFATT THOMAS BARRETT 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. I
I.
Intermountain is a gas utility, subject to the jwisdiction of the Idaho Public Utilities
Commission, engaged in the sale of and distribution of natural gas within the State of Idaho under
authority of Commission Certificate No. 2I9 issued Decemberz,lgss, as amended and
supplemented by Order No. 6564, dated October 3,1962.
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, lnkom, Lava Hot Springs, McCammon, and Pocatello;
Bear Lake County - Georgetown, and Montpelier;
Bingham County - Aberdeen, Basalt, Blackfoot, Firth, Fort Hall, Moreland/Riverside, and Shelley;
Blaine County - Bellevue, Hailey, Ketchum, and Sun Valley;
Bonneville County - Ammon, ldaho 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 - Emmeff;
Gooding County - Gooding, and Wendell;
Jefferson County - Lewisville, 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, Murtaugh, and Twin Falls;
Washington County - Weiser.
Intermountain's properties in these locations consist of transmission pipelines, a liquefied
natural gas storage facility, distribution mains, services, meters and regulators, and general plant and
equipment.
APPLICATION.2
IL
Commission Order No. 32013, dated Jwrc 24,2010, granted Intermountain authority to
enter into a renegotiated revolving credit line not to exceed Eighty Million Dollars ($80,000,000) at
any one time. Such authority was granted from the date of the Order and expires on August 11,
2013.
This Application seeks authority to replace the existing revolving line of credit with a
revolving line of credit of Sixty-Five Million ($65,000,000) for a period of five (5) years from
execution and delivery of the credit agreement. The revolving line of credit includes an option to
borrow an additional Twenty-Five Million ($25,000,000) for the same five (5) year period, or
Ninety Million Dollars ($90,000,000) in total..
Based on this Commission's authorization, the revolving line of credit not to exceed Ninety
Million Dollars ($90,000,000) will continue to be used in the traditional way by Intermountain in
financing principally its construction needs and other working capital requirements.
The Board of Directors of Intermountain has duly authorized the requested line of credit. A
copy of the Resolution authorizing the line of credit is attached hereto as Exhibit No. I and is
incorporated herein by reference.
III.
The terms and conditions of the revolving line of credit of Sixty-Five Million Dollars
($65,000,000) with the option to borrow an additional Twenty-Five Million Dollars ($25,000,000),
or Ninety Million Dollars ($90,000,000) in total, are incorporated herein by reference as though
fully set out.
A copy of the terms for the above referenced line of credit will be submitted under separate
cover and is to be treated as confidential pursuant to PUC IDAPA Rules 31.01.01.067,31.01.01.233
and 31.02.01.005.07, together with Idaho Code Sections 9-340D and Idaho Code Sections 458-801
et seq.
APPLICATION. 3
Borrower:
Lender:
Principal Amount:
Interest Rates:
Security:
Use of Proceeds:
Maturity:
Administrative Fees:
Commitment Fee:
Summarv of Terms and Conditions
Intermountain Gas Company
A syndicate of financial institutions arranged by U.S. Bank,
N.A.
Revolving Line of Credit - $65,000,000, which will include a
$15 Million sublimit for standby letters of credit and a $5
Million sublimit for swingline loans. The Borrower has the
right to borrow an additional $25,000,000 subsequent to the
Closing Date up to an aggregate amount not to exceed $90
Million.
At the Borrower's option, any loan under the credit facility
will bear interest at a rute equal to (i) LIBOR plus the
Applicable Margin, as determined in accordance with the
Performance Pricing grid set forth below or (ii) the Base Rate
(to be defined as the highest of (a) the U.S. Bank prime rate,
(b) the Federal Funds rate plus .50o/o and (c) a daily rate equal
to one-month LIBOR plus 1.00%).
None
To refinance certain existing indebtedness, and to provide for
the working capital, capital expenditures, deferred gas costs,
and general corporate purpose needs of Intermountain.
Five (5) years from the execution and delivery of definitive
documentation for the Senior Credit Facility, or
approximately Jture 30, 201 8
Annually, beginning at the time of closing and each year on
the aruriversary date of the credit facility, the Borrower will
pay an Administrative Fee of $15,000 to U.S Bank.
The Borrower will pay a fee determined in accordance with
the Performance Pricing grld set forth below, on the actual
daily unused amount of each Lender's commitrnent. The
Commitment Fee is payable quarterly in arrears,
commencing on the first quarterly payment date to occur
after the Closing Date, or September, 2013.
APPLICATION - 4
Pricing
Leve!
Consolidated Funded
lndebtedness to Total
Gaoitalization Ratio
Gommitment
Fee
Applicable Margin
for LIBOR loans
Letter of
Credit Fee
I < 0.60:1.0 030%1.4s0%.450%
II >0.55:1.0 but < 0.60: 1.0 0.225%1.2750/o .275o/o
III >0.45:1.0 but < 0.55: 1.0 0.1750/o 1.07s%.075o/ov< 0.45:1.0 0.12s%1.000%.000o/o
Other Requirements:Costs associated with this transaction are to be paid by
Intermountain.
IV.
The proceeds from the proposed revolving line of credit of Sixty-Five Million Dollars
($65,000,000) with an option to borrow an additional Twenty-Five Million Dollars ($25,000,000)
($90 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.
These uses are consistent with the public interest and necessary, appropriate, and consistent
with the proper and legally mandated performance to the public by Intermotrntain as a public utility.
v.
lntermountain's Statement of Capitalization as of March3l,2013, showing all authorized
and outstanding classes of securities, is as follows:
Common Stock & Surplus
Long-Term Debt
Total Capitalization
March 31.2013
Amount
Outstanding($000's) Ratio
$99,7tt 65.7%
52.137 34.3%
$151J48 1!O0%
APPLICATION. 5
vI.
The estimated fees and expenses of the issuance of such revolving credit facility are
expected to total $217,250 consisting of the following:
Arrangement Fees $213,750.00
Legal and Syndication Fees 2,500.00
IPUC Issuance Fees 1.000.00
Total S2n-%9-W
VII.
The fee required by Section 61-905 of the Idaho Code, was determined as follows:
First $ 100,000 at $1.00 per $1,000 : $ 100.00
Next 900,000 at $0.25 per $1,000 : 225.00
Remaining 64.000.000 at $0.10 per $1,000 : 6.400.00
$_65J00O00 : $ iJ25J0
As this amount is larger than the $1,000 maximum fee set forth in Section 6l-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
6l-901, 6l-902,61-903 and 6l-905, and the Rules and Regulations of this Commission.
Intermountain stands ready for an immediate hearing of this Application if such is
determined necessary by this Commission.
A proposed Order granting this Application is attached hereto as Exhibit 2 and is
incorporated herein by reference.
IX.
Notice of this Application will be published prior to Commission authorizationinThe ldaho
State Journal, The ldaho Statesman, The ldaho Business Review, The Post Register, and The Times
News pursuant to Rule 141.8 of the Commission's Rules of Practice and Procedure.
APPLICATION - 6
WHEREFORE, lntermountain respectfully petitions the Idaho Public Utilities Commission
as follows:
a. 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 of
credit for the purposes described up to and including Ninety Million Dollars ($90,000,000) for a
period of five (5) years.
c. That this Commission allow Intermountain to manage its short-term furancing
pursuant to the order issued in this matter until such time as Intermoturtain's Board of Directors
changes the authorized level of such short-term borrowing, with Intermoturtain 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;
d. For such other relief as this Commission may determine proper relative to this
Application.
DATED at Boise,Idaho, this 3rd day of June,2013.
INTERMOUNTAIN GAS COMPANY MOFFATT THOMAS BARRETT ROCK &
FIELDS, CHTD.
lntermountain Gas Company
APPLICATION - 7
Exhibit I
CASE NO. INT.G.T3-04
INTERMOUNTAIN GAS COMPAI\"Y
Board Resolution
(2 pages)
CERTIFICATE
I, PAUL K. SANDNESS, hereby certify that I am the duly elected and qualified
Secretary of Intermountain Gas Company, an Idaho corporation; that the following is a true and
correct copy of resolutions adopted by Written Consent of the Board of Directors dated May 29,
2013; and that said resolutions have not been modified or amended and are presently in full force
and effect:
WHEREAS, there has been presented to the Board of Directors of
Intermountain Gas Company (the "Compant'') a Summary of Terms and Conditions
outlining a Credit Agreement (the "Agreement") among the Company, U.S. Bank,
National Association ('U.S. Bank"), as Administrative Agent and Wells Fargo
Bank, N.A., as Syndication Agent for a syndication of lenders (collectively the
"Lenders") under which the Company has a need for loans for general corporate
purposes, including working capital, for Sixty-Five Million Dollars ($65,000,000),
including a Fifteen Million Dollars ($15,000,000) sublimit for the issuance of letters
of credit, with an option to increase the amount of commitnents and borrow up to an
additional Twenty-Five Million Dollars ($25,000,000) for an aggregate loan
commibnent of Ninety Million Dollars ($90,000,000) for a five year period as set
forth in the Agreement;
NOW, THEREFORE, BE IT RESOLVED, that the Summary of Terms and
Conditions substantially in the form presented to the Board of Directors, is hereby
approved and accepted; and
FURTHER RESOLVED, that the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President or Assistant Vice President, the
General Counsel, and any other officer who performs a policy-making function
(such as administration, operations, accounting, or finance) of the Company be, and
each of them hereby is, authorized to negotiate, execute and deliver the Agreement
substantially in conformity with the Summary of Terms and Conditions presented to
the Board of Directors, with such changes, additions and deletions as to any or all of
the terms and provisions thereof as the authorized officer executing the Agreement
on behalf of the Company shall deem proper, such execution to be conclusive
evidence of the authorized offtcer's authority granted herein and the approval thereof
by the Board of Directors;
FURTHER RESOLVED, that the authorized officers be, and each of them
hereby is, authorized and empowered to take or cause to be taken any and all further
actions and to execute and deliver or cause to be executed and delivered all further
agreements, documents, certificates, and undertakings, in the name and on behalf of
the Company, and to make such filings or applications with governmental or
regulatory agencies and authorities as the authorized officers may determine to be
necessary, proper, or desirable to carry into effect the intent and purpose 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 officer'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
tansactions contemplated by the Summary of Terms and Conditions (including, but
not limited to, the negotiation of the Agreemeirt and all related agreements) and the
tansactions contemplated by the foregoing resolutions are hereby ratified, approved,
and confirmed in all respects.
IN VfITNESS WHEREOF, I have hereunto set my hand on May 30, 2013.
Exhibit 2
CASE NO. INT.G.13.O4
INTERMOTJNTAIN GAS COMPANY
IDAHO PI]BLIC 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-G-I3-04
ORDERNO.
On June 3'd, 2013, Intermountain Gas Company ("Intermountain" or "Company"), a
subsidiary of MDU Resources Group, Inc. filed an Application pursuant to Chapter 9 of Title 61,
Idaho Code and Rules l4l through 150 of the Commission's Rules of Procedure. IDAPA
31.01.01.141-150. Through this Application, Intermountain requests authorization of a revolving
line of credit, not to exceed $90,000,000, for a period of five (5) years, replacing Intermountain's
current revolving line of credit of $80,000,000. Intermountain 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 affached thereto, and all of the Commission's files and records pertaining to this
Application, now makes the following Findings of Fact and Conclusions of Law:
FINDINGS OF FACT
Intermountain is an Idaho corporation with its office and principal place of business in
Boise, Idaho. Intermountain is a natural gas public utility, owning and operating transmission
pipelines, 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 $90,000,000 at any one time outstanding for a period of five (5) years
from the execution and delivery of the credit agreement. The revolving line of credit will be
administered through US Bank, N.A. The proceeds from the borrowing in this issuance will be
used principally to finance construction and other working capital requirements of Intermountain.
ORDER NO.PAGE I
CONCLUSIONS OF LAW
Intermountain is a gas corporation within the definition of ldaho Code $ 6l-117 and is a
public utility within the definitionof ldoho Code $ 6l-129.
The Idaho Public Utilities Commission has jurisdiction over this matter pursuant to the
provisions of ldaho Code $ 6l-901, et seq., and the Application reasonably conforms to Rules 141-
150 ofthe Commission's Rules of Procedure (IDAPA 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 pulposes to which the proceeds will be put is neither a finding of fact nor a
conclusion of law that any particular construction 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 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 Intermountain for
natural gas to consumers in the state of Idaho.
All lawful fees have been paid by Intermountain as provided by ldaho Code $ 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 $90,000,000 at any one time outstanding as
described in its Application should be, and the same hereby is, granted for a period of five (5) years
from the execution and delivery of the credit agreement.
IT IS FURTHER ORDERED that Intermountain will continue to make 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,
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
ORDER NO.PAGE 2
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 l4l-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
pay or guarantee in any manner whatsoever any security authorized, issued, assumed or guaranteed
under the provisions of said Chapter 9, Title 61, Idaho Code and Commission Rules 141-150.
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, Idalro this _ day of
2013.
PRESIDENT
COMMISSIONER
COMMISSIONER
ATTEST:
SECRETARY
ORDER NO.PAGE 4