HomeMy WebLinkAbout20230106Final_Order_No_35657.pdfORDER NO. 35657 1
Office of the Secretary
Service Date
January 6, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY’S APPLICATION FOR
AN ORDER AUTHORIZING THE
ISSUANCE OF AN ADDITIONAL
$150,000,000 IN SHORT-TERM
SECURITIES
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CASE NO. INT-G-22-09
ORDER NO. 35657
On December 28, 2022, Intermountain Gas Company (“Company”) applied under Idaho
Code §§ 61-901, et seq., for authority to secure an additional $150,000,000 in short-term securities.
Application at 1. The Company represented that additional short-term securities are needed to
account for unprecedented increases in natural gas prices. Id. at 2. The Company requested an
order be issued at the earliest possible date. Id. at 5.
Pursuant to Idaho Code § 61-904, the Commission has 30 days from the filing date to issue
an order. At the Commission’s January 3, 2023, Decision Meeting, Staff recommended that the
Commission issue an order approving the requested authority. Based on our review of the record,
we issue this Order approving the Application as discussed below.
THE APPLICATION
The Company seeks authority to increase its current authority to borrow up to
$150,000,000, for a period of 12 months (“Line of Credit”) Id. at 2. The Company can select
between two interest rate methods for the Line of Credit including (1) the Secured Overnight
Financing Rate (“SOFT”) plus an applicable margin from the Secured Overnight Financing Rate
(“SOFR”) Advances column; or (2) the Prime Rate. Id. at 3. The Line of Credit will also have a
one-time administrative fee and an upfront fee, which were not determined when the Company
applied. Id. The Line of Credit will be used to “cover natural gas costs that will be payable in
January and February 2023.” Id.
STAFF REVIEW AND RECOMMENDATION
Staff recommended the Commission approve the Company’s request, due to the recent
unexpected increase in natural gas prices. Staff noted that natural gas prices have been significantly
higher this year due to colder temperatures, Must Flow Operational Orders in the south end of the
Northwest Pipeline that have increased prices from the Sumas and Stanfield supplies, and pipeline
maintenance and constraints on southwestern pipelines. With these factors, Staff predicted that
ORDER NO. 35657 2
natural gas prices may spike for a prolonged period, and “additional access to short-term debt may
be needed.” Decision Memorandum at 2.
While the Company is not independently rated, Staff verified that the ratings of the
Company’s parent company, MDU Resources Group, Inc., (“MDU”) are BBB+ by Standard &
Poor’s Rating Services (“Standard & Poor’s”) and Fitch Ratings (“Fitch”). Staff reasoned that
MDU’s credit rating is unlikely to be impacted by the Company’s securities request, because the
Company is a small percentage—around 5% of MDU’s revenue.
Staff recommended the Company file a verified report for the short-term securities showing
the amount realized, including the itemized costs and expenses incurred in connection with this
issuance and that the Company should continue filing quarterly reports identifying the date of
issuance, principal amount, interest rate, date of maturity and identity of payee for all promissory
notes issued in that quarter, along with the capitalization ratios with the quarterly report.
FINDINGS AND DISCUSSION
The Company is a public utility in Idaho as defined in Idaho Code §§ 61-117, and engaged
in the generation, purchase, transmission, distribution, and sale of natural gas. 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.
Further, we find that the proposed issuance is for a lawful purpose and is within the Company’s
corporate powers, that the Application 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 approve the Application and find 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. 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 gas service.
O R D E R
IT IS HEREBY ORDERED that the Company’s Application for authority to borrow up to
$150,000,000, for a twelve-month period, is granted.
ORDER NO. 35657 3
IT IS FURTHER ORDERED that the Company shall file a verified report for the requested
short-term securities showing the amount realized including the itemized costs and expenses
incurred in connection with this issuance.
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 structure, 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 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 materials 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 § 61-626.
ORDER NO. 35657 4
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 6th day of
January 2023.
ERIC ANDERSON, PRESIDENT
JOHN CHATBURN, COMMISSIONER
JOHN R. HAMMOND, JR., COMMISSIONER
ATTEST:
Jan Noriyuki
Commission Secretary
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