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Lower Costs Are Good for Customers. Pennichuck and its Board of Directors have
determined that the “one time” refilling of the RSF funds with this CoBank loan, will allow PEU
to continue to provide safe, adequate and reliable water service to their customers on a cost-
effective basis. The terms of the loan are very favorable compared to other alternatives and will
result in lower financing costs and/or a better and more immediate “fix” than the cash flow
implications from the timing of recovery and regulatory lag that would be available under those
other options to refill the RSF funds, as may be available in the current rate case. These lower
financing costs, as well as the rate stability that will be achieved with the new MOEF in PEU’s
rate structure, will be passed on to customers.
Other Approvals. As a regulated public utility, PEU must obtain approval of the term loan
from the New Hampshire Public Utilities Commission (*NHPUC”), which will approve the term
loan if it finds the loan to be consistent with the public good. PEU has filed a petition for
approval with the NHPUC contemporaneously with this notice to the City and expects the
NHPUC to consider the petition promptly.
Requested Approvals. For the reasons described above, Pennichuck respectfully requests that
the City, acting in its capacity as sole shareholder of Pennichuck and pursuant to Article [X(3) of
Pennichuck’s Articles of Incorporation, authorize the following actions:
RESOLVED, that the City hereby approves the loan to Pennichuck East Utility, Inc.
from CoBank, ACB, in an amount of up to $2,550,000, with a 25-year amortization
schedule: and
FURTHER RESOLVED, that the City hereby approves the guaranty by Pennichuck
Corporation of the payment by Pennichuck East Utility, Inc. of the loan authorized in
the prior resolution; and
FURTHER RESOLVED, that the City hereby authorizes Pennichuck Corporation and
Pennichuck East Utility, Inc., their Boards of Directors, and their Officers, to take any
and all actions required to obtain all necessary approvals with respect to the actions
described in these resolutions and to execute and deliver such documents as are
necessary to affect the CoBank loan, and the guaranty described in these resolutions.
Respectfully submitted,
PENNICHUCK CORPORATION
Larry D. Goodhue
Chief Executive Officer
cc. Mayor James Donchess
