The Company, under the Governor’s emergency orders, must continue to service all of its customers, but is constrained for exercising full
authority in its collection of water bills in a normal manner. Shutoff notices and further actions have been stopped during this timeframe.
The emergency orders have already shown some impact upon the delinquency of payments on billed amounts to customers, and the overall
impact of this is yet to be determined, as businesses may or may not be able to reopen and re-employ their employees. And, the impact of
those closures or impediments, would have an indirect or direct impact on the Company’s ability to collect revenues to support fixed and
variable costs of operations.
Under the emergency orders, the Company must work with ratepayers in negotiating payment plans for deferred amounts, for a period to
not less than 6 months for those payment plans.
The Company is also in the process of completing certain rate case activities and other financing activities, all of which are to recoup
revenue levels needed to cover current costs. Delays in any of these, coupled with reduction in receipts for billed amounts, would cause the
Company’s ability to cover its working capital needs to be compromised. And, the Line of Credit would quickly be insufficient to meet those
needs.
lf that occurs, the Company’s ability to maintain its workforce would be compromised, and as such, its ability to meet its responsibilities as
an essential service provider in the region would be at risk.
The PPP loan, as defined and approved, is based upon the Company’s ability to keep its workforce employed.
is aloan at 2.5x average monthly payroll and associated benefits.
Is to be used at Jeast 75% for payroll and payroll related costs over an 8-week period after funding
Can be used up to 25% for certain non-payroll costs, including: rent, lease payments, interest on debt, and utilities
If certain requirements under the PPP program can be met, the loan is forgivable, based upon specific calculations, up to 100% (as a grant)
And amounts not forgiven are deferred for repayment for 6 months, and then amortized for repayment over 18 months at a 1% interest
cost.
This loan in essence gives an added layer of working capital needed to sustain operations, over and above the Line of Credit, and at an
interest rate approximately 1/3 of that line and potentially at a zero cost to ratepayers.
Thanks, Steve. Please let me know if you need anything additional.
ie PENN GH UGK
Larry D. Goodhue
Chief Executive Officer
Pennichuck Water
25 Manchester St.
Merrimack, New Hampshire 03054
Ph: (603) 913-2312
The contents of this e-mail and any attachments are confidential, and may be privileged or otherwise protected from disclosure, and are the property of Pennichuck Corporation and/or any of its subsidiaries. The e-mail and its
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