20211123Application.pdf

A INTERMOUNIAIN'
GAs COMPANYACtffiyd Nru ,}erI,sAoq,ts
tnltr,a,finarryrpSarue
Lori A. Blattner
Director, Regulatory Affairs
lntermountain Gas Company
Enclosure
Mark Chiles
Preston Carter
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November 23,2021
Ms. Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise,lD 83720-0074
RE: Case No. INT-G-21-07
Dear Ms. Noriyuki:
Attached for consideration by this Commission is an electronic submission of lntermountain Gas
Company's Application to Issue and Sell Securities. The Application requires an IPUC Issuance
Fee in the amount of $1,000. That check will be hand-delivered under separate cover later today.
If you should have any questions regarding the attached, please don't hesitate to contact me at (208)
377-6015.
Sincerely,
dnABLM
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INTERMOT]NTAIN GAS COMPAI\IY
CASE NO.INT.C,-2I-0'7
APPLICATION
ANI)
E)GIIBITS
In the lllatter of the Apptication of INIERMOUNTAIN GAS COMPAI\IY
for Authorization to Issue and Sell Securities
Preston N. Carter, ISB No. 8462
Givens Pursley LLP
601 W. Bannock St.
Boise, lD 83702
Telephone: [phone]
Attorney for lntermountain Gas Company
BEFORE THE IDAHO PI.JBLIC UTILITIES COMMISSION
In the Matter of the Application of
INTERMOUNTAIN GAS COMPANY
for Authorization to lssue and Sell
Securities
Case No. INT-G-21-07
APPLICATION
Intermountain Gas Company ("Intermountain" or "Company"), a subsidiary of MDU
Resources Group, Inc. with general offices located at 555 South Cole Road, Boise, Idaho, pursuant
to the applicable statutes, including Idaho Code Sections 61-901 , 6l-902,61 -903 and 6l -905, and the
Rules and Regulations of the Idaho Public Utilities Commission ("Commission"), requests
authorization to issue and sell up to Fifty Million Dollars ($50,000,000) of Unsecured Notes between
the months of May and September 2022, with one or more maturity dates ranging from ten (10) to
fony (a0) years from issuance.
Communications in reference to this Application should be addressed to:
Lori A. Blattner
Director - Regulatory Affairs
Intermountain Gas Company
Post Offrce Box 7608
Boise,lD 83707
Lori. B [e-mail]
and
Preston N. Carter
Givens Pursley LLP
601 W. Bannock St.
Boise, lD 83702
prestoncaft er@ givenspursley.com
harmon.vwri ght@ g ivenspursley.com
APPLTCATION. I
ln support of this Application, Intermountain alleges and states as follows:
I.INTRODUCTION
lntermountain is a gas utility, subject to the jurisdiction of the Idaho Public Utilities
Commission, engaged in the sale of and distibution of natural gas within the State of ldaho under
authority of Commission Certificate No. 219 issued Decemberz,lgss, as amended and
supplemented by OrderNo.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, N*pu, Parma, and Wilder;
Caribou County - Bancroft, Grace, and Soda Springs;
Cassia County - Burley, Declo, Malta, and Raft River;
Elmore County - Glenns Ferry, Hammefi and Mountain Home;
Fremont County - Parker, and St. Anthony;
Gem County - Emmett;
Gooding County - Bliss, 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, Marsing, 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.
lntermountain's properties in these locations consist of transmission pipelines, liquefied
nafural gas storage facilities, compressor stations, distribution mains, services, meters and regulators,
and general plant and equipment.
tr. DESCRIPTION OF SECURITTES
Applicant seeks authority from this Commission to issue and sell up to Fifty Million Dbllars
($50,000,000) of Unsecured Notes.
APPLICATION.2
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.
The estimated terms and conditions of the Unsecured Notes are incorporated by reference.
Summary of Terms and Conditions for the Unsecured Notes
Issuer: Intermountain Gas Company
Purchasers: One or more private placement investors (the "Investors")
Principal Amount: Unsecured Note - up to $50,000,000
Interest Rates: Final rates dependent on tenor of notes. Current estimates
based on ten (10) year Treasury rates: plus 100-150 basis
points for a ten (10) year tranche; and plus 120-170 basis
points for a fifteen (15) year tranche. Current estimates based
on thirty (30) year Treasury rates: plus 145-190 basis points
for a thirty (30) year tranche; and plus 155-200 basis points for
a forty (40) year tranche. Credit spreads are subject to change.
Date of Issue Between the months of May and September 2022.
Long-term mafurity dates in one or more tranches ranging
from ten (10) to forty (a0) years from the issuance date.
Maturity:
Voting Privileges:None
Call or Redemption
Provisions:
Sinking Funds or Other
Provisions for Securing
Payment:
Security:
Use of Proceeds:
Fees:
Subject to Make-Whole amount of T+59; par call six months
prior to maturity
None
None
If approved, the Unsecured Notes will be used to refinance
existing debt, fund capital expenditures, and for general
corporate purpose needs of Intermountain.
Private placement agent fees of up to forty (40) basis points
(up to $200,000) will be paid in conjunction with the issuance
ofthe securities. Legal fees and reasonable out-otpocket costs
will be paid or reimbursed to investor counsel and Cohen
APPLICATION.3
Tauber Spievack & Wagner P.C. (Intermountain's legal
counsel), and are estimated at $125,000.
Other Requirements Costs associated with this transaction are to be paid by
Intermountain as noted in the above delineation of 'oFees."
III. STATEMENT OF INFORMA*TION REQUIRED BY RULE 141.03
The securities will be issued under a private placement agreement marketed by [TBD] (the
"Agents") to private placement investors. The net proceeds for the Unsecured Notes (up to Fifty
Million Dollars ($50,000,000) minus the estimated Fees of Three Hundred and Twenty Five
Thousand Dollars ($325,000)) are estimated at up to Forty Nine Million Six Hundred and Seventy
Five Thousand Dollars ($49,675,000).
The estimated fees and expenses of the issuance of such Unsecured Notes are expected to
total up to Three Hundred and Twenty Five Thousand Dollars ($325,000) consisting ofthe following:
Agent Fees $200,000
LegalFees 125.000
Total $325-000
TV. STATEMENT OF PURPOSE
Based on this Commission's authorization, the Unsecured Notes will be used to refinance
existing debt, fund capital expenditures, and for general corporate purpose needs of
Intermountain.
V. STATEMENT OF EXPLANATION
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.
VI. FINAI\CIAL STATEMENT
lntermountain's Statement of Capitalization as of September 30, 2021, showing all
authorized and outstanding classes ofsecurities as adjusted to reflect the proposed issuance ofup to
$50,000,000 of Unsecured Notes, is as follows:
APPLICATION.4
September 30,2021
Common Stock &
Surplus
Long Term Debt
Total Capitalization
Actual
Amount
Outstanding
($000's)
$ 174,221
t74.323
s 348.544
$ 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
$_fl-000000
Ratio
50.0%
50.0%
1000%
Adjusted
Amount
($000's)
$ 174,221
224.323
s 398.544
VII. PROPOSED ORDER
A proposed Order granting this Application is attached as Exhibit No. 2 and is incorporated
by reference.
VIII. STATEMENT OF PUBLIC NOTICE
Notice of the application will be published within seven days of the filing date of this
Application in The ldaho Business Review, The ldaho State Journal, The ldaho Statesman, The Post
Register, and The Times News pursuant to Rule 141.08 of the Commission's Rules of Procedure.
DL VERIFIED REPORT
A copy of the verified report for the above referenced Unsecured Notes showing the amount
realized including the itemized costs and expenses incurred in connection with this transaction will
be submitted under separate cover after issuance and is to be treated as confidential pursuant to the
Commission's Rules ofProcedure IDAPA 31.01.01.067 and 31.01 .0l.233,togetherwith Idaho Code
$$ 74-104, 106, 107, and 48-801 et seq.
X. COMN{ISSION FEE
The fee required by Section 6l-905 of the Idaho Code, was determined as follows
First
Next
Remaining
=$ 100: 225: 4.900: S 5-225
As this amount is largerthanthe $1,000 maximum fee set fonh in Section 6l-905 ofthe Idaho
APPLICATION. 5
Code, a check for $1,000 is enclosed with this Application.
XI. MODIFIED PROCEDURE
Intermountain requests that this matter be handled under modified procedune pursuant to
Rules 201-204 ofthe Commission's Rules of Procedure. Intermountain stands ready for an immediate
hearing of this Application if such is determined necessary by this Commission.
XII. REQUEST FOR RELIEF
Intermountain respectfully petitions the Idaho Public Utilities Commission as follows:
l) That this Application be processed without hearing pursuant to the Rules and
Regulations of this Commission and acted upon at the earliest possible date;
2) That this Commission approve and authorize the issuance of Unsecured Notes for the
purposes described up to and including Fiffy Million Dollars ($50,000,000) with one or more maturity
dates ranging from ten (10) to fony (40) years from issuance;
3) That this Commission allow Intermountain to manage its Unsecured Note frnancing
pursuant to the order issued in this matter until such time as lntermountain's Board of Directors
changes the authorized level of such Notes, with Intermountain 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; and
4) For such other relief as this Commission may determine is just and proper.
DATED: November 23, 2021
TNTERMOI.JNTAIN GAS COMPANY GIVENS PURSLEY LLP
dnLBLw l'7i- {-- -
By
Lori A. Blattner
Director - Regulatory Affairs
By
Preston N. Carter
Attomey for Intermountain Gas Company
APPLICATION. 6
EIMIBIT NO. 1
CASE NO.INT.c,-zI.0,1
INTERMOT]NTAIN GAS COMPANY
BOARII RESOLUTION
(2 pages)
CERTIFICATE
I, Allison Mann, hereby certiff that I am the duly elected and qualified Assistant Secretary
of Intermountain Gas Company, an Idaho corporation; that the following is a true and correct copy
of resolutions adopted by Written Consent ofthe Board of Directors dated November 5, 2021; and
that said resolutions have not been modified or amended and are presently in full force and effect:
WHEREAS, the Board of Directors of Intermountain Gas Company (the
"Company") has determined that it is desirable forthe Company to enter into aNote
Purchase Agreement (the "Agreemenf') by and among the Company and other
purchasers which shall be identified in the Agreement (collectively referred to as the
"Purchasers"), under which the Company shall propose to issue and sell unsecured
Notes (as shall be defured in the Agreement) in an aggregate principal amount of up
to $50,000,000 in one or more series with maturities up to forty (40) years as shall be
set forth in the Agreement;
NOW, TFDREFORE, BE IT RESOLVED, that the Chair ofthe Board, Chief
Executive Officer, President, any Vice President, General Counsel, or any other
officer who performs a policy-making function (such as administration, operations,
accounting, or furance) of the Company (the 'Authorized Officem") h, and each of
them hereby is, authorized to negotiate, execute and deliver an Agreement, with such
terms and provisions as the Authorized Officer executing the Agreement on behalf of
the Company shall deem proper, such execution by the Authorized Offrcer of the
Agreement to be conclusive evidence of the Authorized Officer's authority granted
herein and the approval thereof 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 the Note or Notes up to
the aggregate principal amount of $50,000,000 payable to the order of the Purchasers,
substantially in the forms which shall be provided for in the exhibits to the Agreement,
with such changes, additions and deletions as to any and all of the terms thereof as the
Authorized Officer executing the same shall deem proper, such execution by the
Authorized Officer ofthe 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 empowered, in the name and on behalf of the
Company from time to time, to take such actions and to execute and deliver such
agreements, certificates, instruments, notices and documents as may be required or
as such officer may deem necessary, advisable, or proper in order to carry out and
perform the obligations of the Company under the Agreement and any other
agreements and documents executed by the Company pursuant to these resolutions;
and all such actions to be performed in such manner, and all such agreements,
certificates, instruments, notices, and documents to be executed and delivered in
such form as the officer performing or executing the same shall approve, the
performanec or exocution thereof by such officer to be evidence that such officer
dee,ms all of the terms and provisions thcrcof to be proper; and
FURTIIER RESOLVED, that all laurful aotions heretofore taken in good
faith by any officer of the Company in anticipation of, or in connection wittu the
foregoing are hereby approved, ratifiod and confinncd in all respects as fully as if
such actions had been prcsented to the Board of Dirrectors for lts approval prior to
such actions being taken.
IN WITNESS WHEREOF, I have hereunto set my hand on Novcmber 9,2A21.
Secrctory
2
E)(HIBIT NO.2
CASE NO.INT.C,-2I47
INTERMOT]NTAIN GAS COMPANW
IIIAHO PUBLIC UTILITIES COMMISSION
PROPOSED ORDER
(3 pages)
PROPOSED ORDER OF APPLICAI\T
BEFORE TI{E IDAHO PI.JBLIC UTILITIES COMMISSTON
ln the Matter of the Application of
INTERMOUNTAIN GAS COMPANY
for Authorization to Issue and Sell
Securities
Case No. INT-G-21-07
ORDER NO.
OnNovember23,202l, lntermountain Gas Company (the "Compffiy"), a subsidiary ofMDU
Resources Group, [nc., applied to the Commission wrder ldaho Code $$ 6l -901 , et seq. for authority
to issue Unsecured Notes, not to exceed $50,000,000, with one or more maturity dates ranging from
ten (10) to forty (40) years. Having fully considered the Application, the Commission enters this
Order granting it as follows.
TIIE, APPLICATION
The Company asks for authority to issue and sell up to $50,000,000 of unsecured debt
securities. The proposed issuance will be directly placed in one or more tranches with one or more
private placement investors. The Company anticipates one or more tanches with proposed maturity
dates ranging from ten years to fony years from the date of issuance. The interest rate will be set at
the time of issuance based on l0-year Treasury rates plus a credit spread of approximately 100-170
for any lO-year issuance or lS-year issuance and based on 30-year Treasury rates plus a credit spread
of approximately 145-200 for any 30-year issuance or 40-year issuance. Credit spreads are subject to
change. The Company says it will use net proceeds from the sale of the unsecured notes to refinance
existing debt, fund capital expenditures and for general corporate purposes.
COMMISSION FII\DINGS AND DECISION
The Company is an Idaho corporation with its offrce and principal place of business in Boise,
Idaho. It is a natural gas public utility that owns and operates tansmission pipelines, liquefied natural
gas storage facilities, compressor stations, distribution mains, services, meters and regulators, and
general plant and equipment. It is a gas corporation and public utility as defined in Idaho Code $$
6l-117 and6l-129.
ORDER NO.PAGE 1
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 l4l through 150 of
the Commission's Rules of Procedure, IDAPA 31.01.01-14l-150, and that the Company has paid all
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 or approval ofthe
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 issue and sell up
to $50,000,000 of Unsecured Notes with proposed maturity dates from ten (10) to forty (40) years is
granted.
IT IS FURTI{ER ORDERED that the Company must continue to file quarterly reports with
the Commission setting forth the date of issuance, principal amount, interest rate, date ofmaturity 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 FLTRTFIER 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.
ORDER NO PAGE 2
IT IS FURTHER ORDERED that issuance ofthis Order does not constitute acceptance ofthe
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 $ 6l-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of _2021.
PRESIDENT
COMMISSIONER
COMMISSIONER
ATTEST:
SECRETARY
ORDERNO.PAGE 3