20130829Application.pdf

EXECUTIVE OFFICES
I NrenMouNTAIr.l Gas CorrlpeNv
555 SOUTH COLE ROAD . P.O. BOX 7608 . BOISE,83707 o (208)377.6m0 o FAX:377€097
August 29,2013
Jean Jewell
Idatro Public Utilities Commission
472W. Washington St.
P. O. Box 83720
Boise,lD 83720-0074
RE: Intermountain Gas Company
IPUC Case No. INT-G-13-06
Dear Jean:
Enclosed for filing with this Commission an original and seven (7) copies of Intermountain
Gas Company's Application for to Issue and Sell Securities.
Please acknowledge receipt of this filing by retuming a stamped copy of this letter for our
Company files.
If you have any questions or require
contact me at 377-6168.
Sincerely,
information regarding the attached, please
Michael P. McGrath
Director - Regulatory Affairs
Intermountain Gas Company
Enclosure
cc: Scott Madison
Mark Chiles
Morgan W. Richards
INTERMOUNTAIN GAS COMPAI\Y
CASE NO. INT.G.13-06
APPLICATION
And
EXHIBITS
In the Matter of the Application of INTERMOUNTAIN GAS COMPAII"Y
for Authortzation to Issue and Sell Securities
Morgan W. Richards Jr., ISB 1913
Richards Law Offrce
P.O. Box 2076
Boise,Idaho 83701
Telephone: [phone]
Attorney for Intermountain Gas Company
In the Matter of the Application of
INTERMOUNTAIN GAS COMPANY
for Authorization to Issue and Sell
Securities
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
Case No. INT-G-I3-06
APPLICATION
Intermountain Gas Company ("Intermountain" or "Company"), a subsidiary of MDU
Resources Group, lnc. with general offices located at 555 South Cole Road, Boise, Idaho, does
hereby request authorization to issue and sell a total of Fifty Million Dollars ($50,000,000) of
Unsecured Notes split evenly between a period of twelve (12) and fifteen (15) years.
Commturications in reference to this Application should be addressed to:
Michael P. McGrath
Intermountain Gas Company
555 S Cole Rd.
Boise,Idaho 83709
and
Morgan W. Richards Jr.
fuchards Law Office
P.O. Box 2076
Boise,Idaho 83701
In support of this Application, lntermountain does allege and state as follows:
APPLICATION - 1
I.
Intermountain is a gas utility, subject to the jurisdiction 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. 219 issued December2,l955, 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,Inkom, 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, 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 - Gooding, and Wendell;
Jefferson County - Lewisville, Menan, Rigby, and Ririe;
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 liquefied
natural gas storage facility, distribution mains, services, meters and regulators, and general plant and
equipment.
APPLICATION - 2
II.
Applicant desires to issue, and therefore seeks authority from this Commission, to issue and
sell Fifty Million Dollars ($50,000,000) of Unsecured Notes,
The Board of Directors of Intermountain has duly authorized the requested Unsecured
Notes. A copy of the Resolution authorizing the Unsecured Notes is attached hereto as Exhibit No.
I and is incorporated herein by reference.
m.
The terms and conditions of the Unsecured Notes of Fifty Million Dollars ($50,000,000) are
incorporated herein by reference as though fully set out.
A copy of the terms for the above referenced Unsecured Notes 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 Idatro Code Sections 9-340D and Idaho Code
Sections 458-801 et seq.
Summar.v of Terms and Conditions
Borrower:
Lender:
Principal Amount:
lnterest Rates:
Security:
Use of Proceeds:
lntermountain Gas Company
Teachers Insurance and Annuity Association of America
("TIAA" or the "Investor")
Unsecured Note - $50,000,000
Based on ten (10) year Treasury rates plus 140-145 for the
twelve (12) yer tranche and plus 165-170 for the fifteen (15)
year tranche
None
To extinguish any remaining amounts outstanding on the
Company's Revolving Credit Agreement and provide for the
capital expenditure, working capital and general corporate
purpose needs of Intermountain.
The proceeds will be split evenly for terms of twelve (12) and
fifteen (15) years
Maturity:
APPLICATION - 3
Fees:No underwriting fees or commissions will be paid in
conjunction with the issuance of the securities. Legal fees and
reasonable out-of-pocket costs will be paid or reimbursed to
TIAA, Sutherland Asbill & Brennan LLP (TIAA's special
counsel, and Cohen Tauber Spievack & Wagner P.C.
(lntermountain's legal counsel), and are estimated at
$125,000.
Costs associated with this transaction are to be paid by
Intermountain as noted in the above delineation of "Fees."
Other Requirements:
Iv.
Based on this Commission's authorization, the Unsecured Notes not to exceed Fifty Million
Dollars ($50,000,000) will continue to be used in the traditional way to extinguish any remaining
amounts outstanding on the Company's Revolving Credit Agreement and provide for the capital
expenditure, working capital and general corporate purpose needs of Intermountain. 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.
v.
The net proceeds (Fifty Million Dollars ($50,000,000) minus the estimated Fees of One
Hundred and Twenty Five Thousand Dollars ($125,000) are estimated at Forty Nine Million Eight
Hundred and Seventy Five Thousand Dollars ($49,875,000).
VI.
Intermountain's Statement of Capitalization as of July 31,2013, showing all authorized and
outstanding classes of securities as adjusted to reflect the proposed issuance of the $50,000,000 of
Unsecured Notes, is as follows:
July 31,2013
As Adjusted
Amount
($000's)
$ 94,154
ttt.637
$20sJ91
Common Stock &
Surplus
Long Term Debt
Total Capitalization
Amount
Outstanding
($000's)
$ 94,154
61.637
s 155.791
Ratio
45.8%
54.2%
100-0%
APPLICATION.4
YII.
The estimated fees and expenses of the issuance of such Unsecured Notes are expected to
total $125,000 consisting of the following:
Legal Fees
Misc. Fees
Total
s100,000.00
2s.000.00
$125.000.00
VIII.
The fee required by Section 6l-905 ofthe 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
49.000.000 at $0.10 per $1,000
$_65J00J00
$ 100.00
225.00
4.900.00
s s.22s.00
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.
IX.
This Application is filed pursuant to the applicable statutes, including Idaho Code Sections
6l-901, 6l-902,61-903 and 61-905, and the Rules and Regulations of this Commission.
Intermoturtain 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.
x.
Notice of this Application will be published prior to Commission authorizationinThe ldaho
State Journal, The ldaho Statesman, The Idaho Business Review, The Post Register, and The Times
News pursuant to Rule 141.8 of the Commission's Rules of Practice and Procedure.
APPLICATION - 5
WHEREFORE, Intermountain 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;
b. Additionally,that this Commission approve and authorize the issuance of Unsecured
Notes for the purposes described up to and including Fifty Million Dollars ($50,000,000) for a
period of twelve (12) and fifteen (15) years.
c. That this Commission allow Intermountain to manage its Unsecured Note financing
pursuant to the order issued in this matter until such time as Intermountain's Board of Directors
changes the authorized level of such Notes.
d. For such other relief as this Commission may determine proper relative to this
Application.
DATED at Boise,Idaho, this 29th day of August, 2013.
INTERMOUNTAIN GAS COMPANY Richards Law Offrce
Attorney for Intermountain Gas Company
APPLICATION - 7
Exhibit I
CASE NO. INT.G-13.06
INTERMOUNTAIN GAS COMPANY
Board Resolution
(2 pages)
CERTIFICATE
I, PAUL K. SANDNESS, hereby certiry that I am the duly elected and qualified
Secretary of Intermountain Gas Cornpany, an Idaho corporation; that the following is a true and
correct copy of resolutions adopted by Written Consent of the Board of Directors dated August 7,
2013; and that said resolutions have not been modified or amended and are presently in ltrll force
and effect:
WI-IEREAS, there has been presented to flre Board of Directors of
Intennountain Gas Company (the "Company") a Sumnrary o1'Ternrs outlining a
Note Purchase Agreement (the'?A.greement") between the Company and Teachers
Insruance and Annuity Association of America ("Purchaser") under which the
Conrpany proposes to issue and sell unsecured notes in an aggregate priucipal
amount of up to Fifty Million Dollars ($50,000,000), in one or more series, with
maturities up to lifteen (15) years as set forth in the Agreement;
NOW, TI{EREFORE, BE IT RESOLVED, that the Sunrmary of Tenns
substantially iu the furm presented to the Board of Directors, is hereby approved
and accepted;
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 oflicer who perforrns a policy-making
function (such as adrninistration, operations, accorurting, or finance) of the
Cornpany be, and each of them hereby is, authorized to negotiate, execute and
deliver the Agreement substantially in conformity with the Summary of Tenns
presented to the Boald 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 flre authorized officer's authority granted
herein and the approval thereof by the Board of Dir:ectors; and
FURTHER RESOLVED, that the authorized offrcers be, and each of them
hereby is, authorized and empowered to take or caLrss to be taken any and all
fi.rther actions and to execute and deliver or cause to be executed and delivered
all further agreernents, documents, certificates, and undertakings, in the name and
on behalf of the Conrpany, and to make such filings or applications with
goverruuental or regulatory agencies and authorities as the authorized officers
rnay determine to be necessary, propsr, or desirable to cany into effbct the interil
and purpose of any and all of the foregoing resolutions; and the delivery of any
such agreement, docrtment, certificate, and/or undertaking shall be conclusive
evidence of the officer's ar.rthority granted herein and the appr:oval thereof by the
Board of Directors; and all actions previously taken by any olficel or agent of the
Company in connection with the transactions contemplated by the Sumrnary of
Terms (including, but not limited to, the negotiation of the Agreement and all
related agreements) and the tansactions contemplated by the foregoing
resolutions are hereby ratified, approved, and confirmed in all respects.
IN WITNESS WHEREOF, I have hereunto set my hand on Augtrst 8, 2013.
PAUL K. SA
2
Exhibit 2
CASE NO. INT.G.T3.O6
INTERMOT'NTAIN GAS COMPANY
IDAIIO PUBLIC UTILITIES COMMISSION
PROPOSED ORDER
(4 pages)
PROPOSED ORDER OF APPLICANT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application ot
INTERMOLTNTAIN GAS COMPANY
for Authorization to Issue and Sell
Securities
Case No. INT-G-I3-06
ORDER NO.
On August 29th,2013, Intermountain Gas Company ("Intermountain" or "Compily"), &
subsidiary of MDU Resources Group, Inc. 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, Intermountain requests authorization for Unsecured
Notes, not to exceed $50,000,000, split evenly for a period of twelve (12) and fifteen (15) years.
Intermountain contends that these Unsecured Notes will continue to be used in the traditional
manner, which is principally to extinguish any remaining amounts outstanding on the Company's
Revolving Credit Agreement and provide for the capital expenditure, working capital and general
corporate purpose needs of Intermountain.
The Idaho Public Utilities Commission, having fully considered the Application and
exhibits attached 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. lntermountain 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 Unsecured
Notes not to exceed $50,000,000 at any one time outstanding split evenly for a period of twelve (12)
and fifteen (15) years from the execution and delivery of the agreement. The Unsecured Notes will
be administered through Teachers lnsurance and Annuity Association of America. The proceeds
ORDER NO.PAGE 1
from the bonowing in this issuance will be used principally to extinguish any remaining amounts
outstanding on the Company's Revolving Credit Agreement and provide for the capital expenditure,
working capital and general corporate purpose needs of Intermountain.
CONCLUSIONS OF LAW
Intermountain is a gas corporation within the definition of ldaho Code $ 6l-117 and is a
public utility within the definitionof Idaho 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 of the 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 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 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 beenpaid by Intermountain as provided by ldaho Code g 6l-905.
The Application should be approved.
ORDER
IT IS THEREFORE ORDERED that the Application of Intermountain Gas Company for
authority to issue Unsecured Notes split evenly between a period of twelve (12) and fifteen (15)
years not to exceed $50,000,000 as described in its Application should be, and the same hereby is,
granted for a period of fifteen (15) years from the execution and delivery of the Unsecured Notes,
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 6l,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
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, Idatro this
2013.
SECRETARY
PRESIDENT
COMMISSIONER
COMMISSIONER
ORDERNO.PAGE 4