20170216Application.pdf

EXECUTIVE OFFICES
IrurenuouNTAIN Gns CoruPnruv
55s SOUTH COLE ROAD . p.O. BOX 7608 o BOISE, IDAHO 83707 . [phone] o FAX: [phone]
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February 16,2017
Ms. Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472W. Washington St.
P.O. Box 83720
Boise, ID 83720-0074
RE: Case No. INT-G-I7-01
Dear Ms. Hanian:
Enclosed for filing with this Commission are the original and seven (7) copies of Intermountain Gas
Company's Application to Issue and Sell Securities.
If you should have any questions regarding this Application please contact me at377-6168
Sincerely
lP. McGrath
Director-Re gu I atory Affairs
Intermountain Gas Company
Enclosure
cc: Scott Madison
Mark Chiles
Ronald L. Williams
INTERMOUNTAIN GAS COMPANY
CASE NO. INT.G.17.O1
APPLICATION
AND
EXHIBITS
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In the Matter of the Application of INTERMOUNTAIN GAS COMPAIYY
for Authorization to Issue and Sell Securities
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Ronald L. Williams,ISB 3034
Williams Bradbury PC
l0l5 W. Hays St.
Boise, Idaho 83702
Telephone: [phone]
Attomey for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
TNTERMOUNTAIN GAS COMPANY
for Authorization to Issue and Sell
Securities
Case No. INT-G-I7-01
APPLICATION
Intermountain Gas Company ("lntermountain" or ooCompany"), a subsidiary 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 Eighty-Five Million Dollars ($85,000,000) not
to exceed a five (5) year period with an option to borrow an additional Twenty-Five Million Dollars
($25,000,000) for the same timeframe, or One Hundred and Ten Million Dollars ($l10,000,000) in
total. The new credit facility replaces lntermountain's current revolving line of credit of Ninety
Million Dollars ($90,000,000) which expires July 13, 2018.
Communications in reference to this Application should be addressed to
Michael P. McGrath
Director - Regulatory Affairs
Intermountain Gas Company
Post Office Box 7608
Boise, lD 83707
and
Ronald L. Williams
Williams Bradbury PC
l0l5 W. Hays St.
Boise,Idaho 83702
In support of this Application, lntermountain does allege and state as follows:
APPLICATION - I
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 December 2,1955, 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 - Arimo, 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, 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 - Heyburn, Paul, and Rupert;
Owyhee County - Bruneau, and 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. 32840, date June 26,2013, granted Intermountain authority to enter
into a renegotiated revolving credit line not to exceed Ninety Million Dollars ($90,000,000) at any
one time. Such authority was granted fiom the date of the Order and expires on July 13,2018.
This Application seeks authority to replace the existing revolving line of credit with a
revolving line of credit of Eighty-Five Million Dollars ($85,000,000) not to exceed a five (5) year
period from the execution and delivery of the credit agreement. The revolving line of credit includes
an option to borrow an additional Twenty-Five Million Dollars ($25,000,000) for the same timeframe,
or One Hundred and Ten Million Dollars ($110,000,000) in total.
Based on this Commission's authorization, the revolving line of credit not to exceed One
Hundred and Ten Million Dollars ($l10,000,000) will continue to be used in the traditional way by
Intermountain in financing principally its working capital, capital expenditures, deferred gas costs,
and general corporate purpose needs.
The Board of Directors of lntermountain 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 Eighty-Five Million Dollars
($85,000,000) with the option to borrow an additional Twenty-Five Million Dollars ($25,000,000),
or One Hundred and Ten Million Dollars ($ I 10,000,000) 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 and
31.01.01 .Z33,together with ldaho Code $$ 74-104,106, 107, and 48-801 et seq.
Summary of Terms and Conditions
Borrower:Intermountain Gas Company
Lender:
APPLICATION - 3
A syndicate of financial institutions arranged by U.S. Bank,
N.A.
Principal Amount:
Interest Rates:
Security:
Use of Proceeds
Maturity:
Administrative Fees:
Commitment Fee:
Other Requirements:
Revolving Line of Credit - $85,000,000, 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 and additional $25,000,000 subsequent to the
Closing Date up to an aggregate amount not to exceed $l l0
Million.
At the Borrower's option, any loan under the credit facility
will bear interest at a rate equal to (D 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 .50Yo and (c) a daily rate equal
to one-month LIBORplus 1.00%).
None
To provide for working capital, capital expenditures, deferred
gas costs, and for general corporate purpose needs of
Intermountain.
Up to five (5) years from the execution and delivery of
definitive documentation for the Senior Credit Facility.
Annually, beginning at the time of closing and each year on
the anniversary 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 grid set forth below, on the actual
daily unused amount of each Lender's commitment. The
Commitment Fee is payable quarterly in arrears, commencing
on the first quarterly payment date to occur after the Closing
Date, or lune,20l7.
Costs associated with this transaction are to be paid by
Intermountain.
Pricing
Level
Consolidated Funded
Indebtedness to Total
Capitalization Ratio
Commitment
Fee
Applicable Margin
for LIBOR loans
Letter of
Credit Fee
I S 0.60:1.0 0.30%1.4s0%1.450%
II >0.55: 1.0 but <0.60: 1.0 0.2250 1.27s%1,27s%
III )0.45:1.0 but < 0.55: 1.0 0.175%1.075%1.07s%
IV < 0.45:1.0 0.1250 1.000%1.000%
APPLICATION - 4
IV.
The proceeds from the proposed revolving line of credit of Eighty-Five Million Dollars
($85,000,000) with the option to borrow an additional Twenty-Five Million Dollars ($25,000,000)
($l l0 Million in total) will continue to be used in the traditional way by [ntermountain 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 Intermountain as a public utility.
v.
Intermountain's Statement of Capitalization as ofDecember3l,2016, showing all authorized
and outstanding classes of securities, is as follows:
December 31,2016
Amount
Outstanding
($000's)Ratio
Common Stock & Surplus
Long-Term Debt
Total Capitalization
$117,360
111.201
$228J6r
sL3%
48.7%
100.0%
VIL
The estimated fees and expenses of the issuance of such revolving credit facility are expected
to total $279,750 consisting of the following:
Arrangement Fees
Legal and Syndication Fees
IPUC Issuance Fees
$248,750.00
30,000.00
1.000.00
Total w9J59N
v[[
The fee required by Section 6l-905 of the Idaho Code, was determined as follows:
APPLICATION - 5
First
Next
Remaining
$ 100,000 at $1.00 per $1,000
900,000 at $0.25 per $1,000
84.000.000 at $0.10 per $1,000
$_85J00J00
: $ 100.00
225.00: 8.400.00: $_8J25.00
As this amount is larger than the $ I ,000 maximum fee set forth in Section 6l -905 of the Idaho
Code, a check for $1,000 is enclosed with this Application.
x.
This Application is filed pursuant to the applicable statutes, including Idaho Code Sections
6l-901, 6I-902,61-903 and 61-905, 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 No. 2 and is
incorporated herein by reference.
x.
Notice of this Application will be published prior to Commission authorization in The ldaho
State Journal, The ldaho Stotesman, The ldaho Business Review, The Post Register, and The Times
News pursuant to Rule 141.08 of the Commission's Rules of Practice and Procedure.
APPLICATION - 6
WHEREFORE. lnlennountain rcspectlully petitions the ldaho Public Utilities Commissiorr
as follorvs:
a. l'hat this Application be processed u'ithout hearing pursuant to the Rules and
Regulatitlns of this Comnrissit'rrr and actr'd upon at thc carlicst possible datc:
b. Additionalll,. that this Commission approve and authorize the issuance of c linc' ol'
credit lbr the purposes describc'd up to and including One tlundred and 'l'en Milliorr l)t>llars
($l 10.000.000) not to exceed a fivc (5) year period.
c. That this Commission allow lntennountain to manage its shorl-lenn linancing
pursuant to thc Order issued in this maller until such timc as Intermounlain's Board of Dircctors
changes the uuthorized levcl ol'such shon-tcrm bonowing. rvith lntermountain making quartcrly.
reports to this Commission sctting tbrrh the date of issuance. principal amount. interest rate. date ol'
maturity and identity ol'payec lilr all promissory notcs issued during such quarter.
d. For such other relicf as this Commission may determine proper relative to this
Application.
DATIID al Boisc. ldaho, this l6th day of February. 201 7.
INTERMOUNTAIN GAS COMI'NNY Williarns llradbun,PC
By Reth/,11--
M lP.
- Rcgu Aflairs
81,
I(onald L. Williams
Attorncy for lntermountain Cas Comparrl,
APPLICA'IION .7
EXHIBIT NO. 1
CASE NO. INT.G.T7.Ol
INTERMOUNTAIN GAS COMPANY
BOARD RESOLUTION
(2 pages)
CERTTFICATE
I, JULIE A. KRENZ, hereby certiff that t am the duly elected and qualified Assistant
Secretary of Interrnountain 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
January 27,2017; 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
Interrrountain Gas Company (the "Company') a form of Summary of Proposed
Revolver Terms outlining a Credit Agreement (the "Agreement"), by and among the
Company and several financial institutions from time to time party to the Agreement
and U.S. Bank National Association, as Adrninistrative Agent (collectively referrcd
ts as the "Lenders?), whereby the L,enden would make revolving loans to the
Company, from time to time, up to the aggregate princrpal amount of Eighty-Five
Million Dollars ($85,000,000), including a Fifteen Million Dollar ($15,000,000)
zublimit for the issuance of letters of credit, and with an option to increase the
amount of commitnents and borrow up to an additional Twenty-Five Million
Dollars ($25,000,000) fsr an aggregate loan commitment of One Hundred Ten
Million Dollars ($110,000,000) not to exceed a five ycar period as set forth in the
Agreement;
NOW, TI{EREFORE, BE IT RESOLVED, that the forrr of the Agreement,
presented to the Board of Directors, be and hereby is approved and accepted; and the
Chairman of the Board, Chief Executive Offrcer, President, any Vice President
General Couusel, or any other officer ufuo performs a policy-making function (such
as adminisfration, operations, accounting, or finanoe) of the Company (the
"Authorized Officers') be, and each of them hereby is, authorized to execute and
deliver the Agreement, substantially in the form presented to the Board of Direstors,
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 rhall deem proper, suoh sxecution by the Authorized Officer of the
Agreement to be conclusive evidence of the Authorized Officer's auttrority granted
herein and the approval ihereof by the Board of Directors;
FURTHER RESOLVED, that the Authorized Officers of the Company be,
and each of them.hereby is, authorized to execute and deliver a note or notes up to
an aggregate principal amount of $110,000,000 payable to the order of the Lenders,
zubstantially in the form provided for in an exhibit to the Agreement, with such
ohanges, additions and deletions as to any and all of the terms thereof as the
Authodzed Officer executing the same shall deein proper, such execution by the
Authorized Officer of the Notes to be conclusive evidence of the Authorized
Officer's authority granted herein and the approval thereof by the Board of
Directors;
FURTHER RESOLVED, that each and every officer of the Company be,
and hereby is, authorized and ompowered, in the name and on behalf of the
Company from time to time, to take such aotions and to execute and deliver such
agrcements, certificates, instnrments, notices and documents as may be required
or as such officer may deem necessary, advisable, or proper in order to carry out
and perfonn the obligations of the Company under the Agreement and other
agreements executed by the Company pursuant to these resolutions; and all such
actions to be performed in such manner, and all such agreements, certificates,
instnrments, notices, and documents to be executed and delivered in such form as
the offrcer performing or executing the same shall approve, the performanoe or
execution thereof by such officer to be evidence that such offioer deems all of the
terms and provisions thereof to be proper; and all actions previously taken by any
officer of the Company in oonnection with the execution of the Agreement and
the transaptions contemplated by the foregoing resolutions are hereby ratified,
approved, and confirmed in all respects; and
FURTHER RESOLVED, that all actions heretofore taken in good faith by
any officer of the Company in anticipation of, or in connection wrth, the
foregoing are hereby approved, ratified and confirmed in all respects as fully as if
such actions had been presented to the Board of Directors for its approval prior to
such actions being taken.
IN WITNESS WHEREOF,I have hereunto set my hand on Febnrary 6,2017.
Krenz, Assistant
2
EXHIBIT NO.2
CASE NO. INT.G.l7.OI
INTERMOUNTAIN GAS COMPANY
IDAHO PUBLIC UTILITIES COMMISSION
PROPOSED ORDER
(3 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-I7-01
ORDERNO.
On February 16th,2017, lntermountain Gas Company (the "Companf'), a subsidiary of
MDU Resources Group, Inc., applied to the Commission under ldaho Code $$ 6l-901, et seq. for
authority to obtain a revolving line of uedit up to $110,000,000, not to exceed a five (5) year period.
Having fully considered the Application, the Commission enters this Order granting it as follows.
THE APPLICATION
The Company proposes to enter agreements allowing it to obtain a revolving line of credit of
not more than $ I 10,000,000 at any one time. The proposed line of credit would exist for a period not
to exceed five years from the date of execution and delivery of the credit agreement. The Company
contends that it will use the proceeds to principally finance its construction needs and other working
capital requirements. U.S. Bank, N.A., would administer the line of credit.
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
The Company is an Idaho corporation with its office and principal place of business in Boise,
Idaho. It is a natural gas public utility that owns and operates transmission pipelines, a liquefied
natural gas storage facility, distribution mains, services, meters and regulators, and general plant and
equipment. It is a gas corporation and public utility as defined in ldaho Code $$ 6l-117 and6l-129.
The Commission has jurisdiction over the Application under ldaho Code $ 6l-901, et seq.
We find that the proposed transaction is in the public interest and a formal hearing on this matter is
not required. We further find that the proposed issuance is for a lawful purpose and is within the
Company's corporate powers, that the Application reasonably conforms to Rules 141 through 150 of
the Commission's Rules of Procedure, IDAPA 3 1 .01 .01 - 141- I 50, and that the Company has paid all
ORDER NO PAGE I
fees due under ldaho Code $ 6l-905. Accordingly, we find that the Application should be approved
and the proposed financing should be allowed.
The Commission's Order approving the proposed financing and the general purposes to which
the proceeds may be put is not a determination that the Commission approves of the particular use to
which these funds will be put. This Order also is not a Commission determination/approval of the
type of financing or the related costs for ratemaking purposes. The Commission does not have before
it for determination, and so does not determine, the effect of the proposed transaction on rates the
Company will charge for natural gas service.
ORDER
IT IS HEREBY ORDERED that the Company's Application for authority to obtain a
revolving line of credit up to $l10,000,000, not to exceed a five (5) year period is granted.
IT IS FURTHER ORDERED that the Company must continue to file quarterly reports with
the Commission setting forth the date of issuance, principal amount, interest rate, date of maturity and
identity of payee for all promissory notes issued during the quarter. The Company must continue to
file its capitalization ratios with the quarterly reports.
IT IS FURTHER ORDERED that the foregoing authorization is without prejudice to the
regulatory authority of this Commission with respect to rates, utility capital structure, service,
accounts, valuation, estimates or determination of cost or any other matter which may come before
this Commission pursuant to its 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 any act or deed done or performed in connection therewith 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 Chapter 9, Title 61, Idaho Code.
IT IS FURTHER ORDERED that issuance of this Order does not constitute acceptance of the
Company's exhibits or other material accompanying the 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. See ldoho Code $ 6I-626.
ORDER NO PAGE 2
day of
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this _
2017
PRESIDENT
COMMISSIONER
COMMISSIONER
ATTEST:
SECRETARY
ORDER NO.PAGE 3