DF 98-047
ROSEBROOK WATER COMPANY, INC.
Petition for Authority to Borrow
Order Nisi Approving Financing
O R D E R N O. 22,933
May 13, 1998
The Petitioner, Rosebrook Water Company, Inc.
(Rosebrook), is a public utility that supplies water to limited
areas in the towns of Carroll, Bethlehem and the unincorporated
township of Crawford's Purchase. On April 6, 1998, Rosebrook
filed a request with the New Hampshire Public Utilities
Commission (Commission), pursuant to RSA 369, for authority to
borrow an amount not to exceed $120,000 to finance a secondary 24
inch well along with connecting piping, and electrical and
related mechanical modifications to the pump station. The
secondary well is mandated by New Hampshire Department of
Environmental Services (NHDES) rules which require a backup
source of water in the event of failure of the primary source.
Rosebrook has filed an application with NHDES
requesting State Revolving Loan Fund (SRF) financing for the
project. Rosebrook is on the funded portion of the NHDES list of
projects to receive SRF financing at a fifteen year fixed rate of
3.9525%, subject, in part, to the prior approval by the
Commission to borrow the funds.
As of the date of this order, the terms and conditions
of the proposed financing were not yet finalized. NHDES provided
a letter dated February 28, 1998 from the New Hampshire Business
Finance Authority (NHBFA) which outlined the following
recommended terms of the financing: 1)fifteen year term note at
3.9525%; and 2)unconditional personal guarantees of Joan Satter
and Kim DeSalvo each of whom owns 47.5% of the outstanding shares
of Rosebrook. Additionally, the NHBFA letter recommended the
primary source of repayment be Rosebrook's net income, the
secondary source be PUC approval of a rate increase, and the
tertiary source of repayment be the guarantors.
Upon review of Rosebrook's petition, accompanying
financial schedules and responses to related data requests, it is
clear that Rosebrook is currently generating sufficient revenues
to service the debt requested in this proceeding. Taking into
account the additional costs expected as a result of the well
project, Rosebrook would still be earning in excess of the 10%
rate of return allowed in its last rate proceeding, DR 95-304.
Hence, an increase in rates as a result of the project is neither
necessary nor warranted at this time. However, Rosebrook has the
option of seeking a step increase in its rates as a result of
Order No. 22,120 in DR 95-304 if, at the time the project is
completed, Rosebrook can demonstrate an earnings deficiency.
Based upon Staff's review, we find the proposed use of
the funds to be prudent and in the public interest and the terms
and conditions of the loan reasonable. However, if the final
terms and conditions of the SRF financing vary materially from
those outlined above, we reserve the right to revisit any
borrowing authority given in this order. We hereby instruct
Rosebrook to forward the final terms of the financing to the
Commission as soon as they are available.
Based upon the foregoing, it is hereby
ORDERED NISI, that, pursuant to RSA 369, Rosebrook is
authorized to borrow up to $120,000 under the terms and
conditions set forth above; and it is
FURTHER ORDERED, that the proposed use of these funds
is prudent as presented; and it is
FURTHER ORDERED, that Rosebrook submit the final terms
and conditions of the financing to the Commission as soon as they
are available; and it is
FURTHER ORDERED, that pursuant to N.H. Admin. Rules,
Puc 1604.03 or Puc 1605.03, 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 May 20, 1998 and to be documented by affidavit filed
with this office on or before May 27, 1998; 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 June 3, 1998; and it
is
FURTHER ORDERED, that any party interested in
responding to such comments or request for hearing shall do so no
later than June 10, 1998; and it is
FURTHER ORDERED, that this Order Nisi shall be
effective June 12, 1998, 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 thirteenth day of May, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary