Mr. Steven A. Bolton
Corporation Counsel
June 28, 2018
Page Three
rate on the SRF Program and Trust Fund borrowings is 2.424% per annum, though the final rate
is not locked in until the loan commences its repayment period. The loans will be unsecured.
The corporate parent, Pennichuck, will provide an unsecured corporate guaranty of the
repayment of the loans in accordance with the terms of a Guaranty Agreement.
Approval by Pennichuck, PEU and PWW. The loans to finance the projects listed above and
the guaranty of the loans have been approved by the respective Board of Directors of
Pennichuck, PEU and PWW.
Pennichuck recommends that the City authorize (1) PEU to enter into the loan under the SRF
Program; (ii) PWW to enter into the loan under the Trust Fund, and (iii) Pennichuck to enter into
the Guaranty Agreements for both companies and loans.
Other Approvals. As regulated public utilities, PEU and PWW must obtain approval of the
loans from the New Hampshire Public Utilities Commission (““NHPUC”), which will approve
the loans if it finds the loans to be consistent with the public good. PEU and PWW will file
petitions for approval with the NHPUC in early July, and expects the NHPUC to consider the
petitions promptly. Under the SRF Program and the Trust Fund, the loans must also be approved
by the Governor and Executive Council.
Lower Costs Are Good for Customers. Pennichuck and its Board of Directors have
determined that the capital projects to be financed by the SRF Program and Trust Fund loans will
allow PEU and PWW to continue to provide safe, adequate and reliable water service to its
customers on a cost-effective basis. The terms of the financings through the SRF Program and
Trust Fund are very favorable compared to other alternatives and will result in lower financing
costs than would be available under other debt options. These lower financing costs will be
passed on to customers.
Requested Approvais. For the reasons described above, Pennichuck respectiully requests that
the City, acting in its capacity as sole shareholder of Pennichuck and pursuant to Article IX(3) of
Pennichuck’s Articles of Incorporation, authorize the following actions:
RESOLVED, that the City hereby approves the borrowing by Pennichuck East Utility,
Inc. of up to $4,240,000 from the State of New Hampshire pursuant to the State
Drinking Water Revolving Loan Fund Program to finance the cost of the Locke Lake
New Groundwater Source Project;
FURTHER RESOLVED, that the City hereby approves the borrowing by Pennichuck
Water Works, Inc. of up to $3,375,000 from the State of New Hampshire pursuant to
the New Hampshire Drinking Water and Groundwater Trust Fund to finance the cost of
the Pennichuck Core Water Main Replacement Project;
