DR 98-120
Pittsfield Aqueduct Company, Inc.
Petition for Approval of Terms and Conditions of a 7-Year
$1,141,792 Note Refinanced April 24, 1998
Order NISI Approving the Terms and Conditions
O R D E R N O. 23,164
March 16, 1999
On January 4, 1999, Pittsfield Aqueduct Company, Inc.
(PAC or the Company) filed with the New Hampshire Public
Utilities Commission (Commission), a petition pursuant to RSA 369
for approval of a refinancing transaction with its parent,
Pennichuck Corporation (Pennichuck). The Company had originally
requested, as part of its request for approval of a 3.89% rate
reduction, that its refinancing of long term debt obligations
that reduced the fixed annual interest rate from 10% to 6.5% be
approved.
In its Order No. 23,081 (December 8, 1998) the
Commission approved PAC's petition for a rate reduction, subject
to Commission review of the terms and conditions of the new note,
with the formal note to be filed within one month of the date of
the order. The rate reduction approved by the Commission in that
Order was due to the interest rate reduction that Pennichuck was
able to achieve once it acquired PAC.
On January 4, 1999, PAC filed the Promissory Note, a
Motion for Further Order approving the terms and conditions of
the Note nunc pro tunc as of April 24, 1998, and explanatory
information and documentation. The Note, dated April 24, 1998,
obligates PAC to pay its parent corporation, Pennichuck
Corporation, interest only on a monthly basis for seven (7) years
with the principal balance of $1,141,792 due on April 8, 2005.
We find the Promissory Note to be a pass-through to PAC
by Pennichuck Corporation of the share of the benefits and
burdens of debt obligations incurred by Pennichuck Corporation
for the benefit of PAC and that the Note constitutes a valid
long-term debt obligation. As we noted in our Order No. 23,081,
we reserved the right to revisit our conclusion as to the
refinanced debt being in the public good, but we believe after
reviewing the terms and conditions of the note that it is indeed
in the public good. We remind the Company that any and all
approvals for financing or refinancing activities must be
requested in advance from this Commission pursuant to RSA 369.
Based upon the foregoing, it is hereby
ORDERED NISI, that pursuant to RSA 369, the terms and
conditions of the $1,141,792 Promissory Note given by Pittsfield
Aqueduct Company, Inc. to Pennichuck Corporation is APPROVED,
nunc pro tunc as of April 24, 1998; and it is
FURTHER ORDERED, that the Petitioner shall cause a copy
of this Order Nisi to be published once in a statewide newspaper
of general circulation or of circulation in those portions of the
state where operations are conducted, such publication to be no
later than March 23, 1999 and to be documented by affidavit filed
with this office on or before March 30, 1999; and it is
FURTHER ORDERED, that all persons interested in
responding to this petition be notified that they may submit
their comments or file a written request for a hearing on this
matter before the Commission no later than March 30, 1999; and it
is
FURTHER ORDERED, that any party interested in
responding to such comments or request for hearing shall do so no
later than April 6, 1999; and it is
FURTHER ORDERED, that this Order Nisi shall be
effective April 16, 1999, unless the Commission provides
otherwise in a supplemental order issued prior to the effective
date.
By order of the Public Utilities Commission of New
Hampshire this sixteenth day of March, 1999.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary