20170308final_order_no_33725.pdf

Office of the Secretary
Service Date
March 8,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF INTERMOUNTAIN GAS COMPANY )CASE NO.INT-G-17-O1
FOR AUTHORITY TO ISSUE AND SELL )
SECURITIES )ORDER NO.33725
__________________________________________________________________________________
)
On February 16,2017,Intermountain Gas Company (“the Company”),a subsidiary of
MDU Resources Group,Inc.,applied to the Commission for authority to obtain a revolving
credit facility of $85 million not to exceed a five-year period,with an option to borrow an
additional $25 million over the same time period,or $110 million in total.This new credit
facility replaces the Company’s current revolving line of credit of $90 million,which expires
July 13,2018.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 $110 million at any one time.The proposed line of credit would exist for
five years from the execution and delivery of the credit agreement.The Company would use the
proceeds in financing principally its working capital,capital expenditures,deferred gas costs,
and general corporate purpose needs.U.S.Bank,N.A.,would administer the line of credit.
The Company has the option to select between predetermined interest rate methods.
The rate will be based on London Interbank Offered Rate (LIBOR),U.S.Bank Prime Rate or the
Federal Funds rate plus appropriate margins.Additional charges will be incurred for
administrative fees of $15,000 annually and commitment fees based on a performance grid.The
performance grid has four levels with the rate determined by the ratio of consolidated funded
indebtedness to total capitalization ratio.Therefore,the higher the level of debt incurred,the
greater the borrowing cost for borrowed funds.The debt ratio for Intermountain was 48.7%as of
December 31,2016.
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 pipelines,a liquefied
ORDER NO.33725 1
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 Idaho Code §61-117 and
61-129.
The Commission has jurisdiction over the Application under Idaho Code §§61-901,
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 31.01.01.141-.150,and that the
Company has paid all fees due under Idaho Code §61-905.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.The Order also is not a Commission
determination or approval of the type of financing or the related costs for ratemaking purposes.
In this case,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 to obtain a revolving
line of credit up to $110 million,not to exceed a five-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 the Commission with respect to rates.utility capital strucmre.service
accounts,valuation,estimates for 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
ORDER NO.33725
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 Idaho Code §6 1-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 8’
day of March 2017.
ATTEST:
Diane M.Hanian
Commission Secretary
O:INT-G-17-Olcc
PA KJELLANDER,PRESIDENT
KRISTINE RAPER,
ERIC ANDERSON,COMMISSIONER
ORDER NO.33725