Cash and Cash Equivalents
Cash and cash equivalents generally consist of cash, money market funds and other short-
term liquid investments with original maturities of three months or less.
Restricted Cash - RSF
This restricted cash balance consists of funds maintained for the Rate Stabilization Fund
(“RSE”), which was established in conformity with the requirements of NHPUC Order
25,292, as explained more fully in Note 11 of these financial statements. The RSF is an
imprest fund of $5 million, which is subject to funding above or below the imprest fund
balance, reflecting actual revenue performance as it relates to prescribed revenue levels
supported by the RSF. The excess or deficient amount (versus the $5.0 million imprest
balance) is subject to return or collection to rate payers over the succeeding three-year period
of time, as of the rate order issued with the next promulgated rate case filing. On November
7, 2017, the NH PUC approved and issued Order No. 26,070 which established new rates for
Pennichuck Water. In addition, the rate order then authorized the reallocation of the existing
$5,000,000 Rate Stabilization Fund among the Company’s three utilities. Such that,
Pennichuck Water’s allocated share of the RSF would now be $3,920,000, with the
remaining balance of $1,080,000 to be allocated between Pennichuck East and Pittsfield
Aqueduct. The purpose for splitting and allocating the existing RSF is to provide additional
reserves which ensure sufficient capital to enable the Company to support its operations. For
the years ending December 31, 2017 and 2016, the balances in the RSF were $4.9 million
and $6.5 million, respectively.
Restricted Cash — Bond Project Funds
This restricted cash balance consists of funds remaining from the issuance of the Series 2014
and 2015 tax-exempt bonds (the “Bonds”) in December of 2014 and October of 2015,
respectively. The proceeds from those bond issuance transactions are maintained in separate
restricted cash accounts, with Trustee oversight, and are subject to withdrawal as a reim-
bursement of eligible capital project expenditures for the years 2014 through 2019, as defined
by the indenture and issuance documents associated with each offering. The restricted cash
accounts are also used as a “conduit” for the transfer of money from operating cash to
restricted cash, allowing the Trustee to make the required payments to bondholders for
principal and interest due semi-annually.
As of December 31, 2016, the funds in these restricted cash accounts totaled approximately
$7.6 million. During 2017, approximately $3.3 million was withdrawn from the restricted
cash accounts to make the principal and interest payments for the Bonds, on January 1 and
July 1. Also during 2017, approximately $4.3 million was withdrawn from the restricted cash
accounts, and transferred to the Company’s operating cash accounts, for reimbursements of
qualifying capital projects completed and “used and useful” during 2017, which were
initially funded from working capital. In December 2017, approximately $3.3 million was
transferred into these restricted cash accounts from the Company’s operating cash accounts,
to provide the funds needed to make the net principal and interest payments due on
January 1, 2018 for the Bonds. As of December 31, 2017, the funds in these restricted cash
accounts totaled approximately $3.3 million.
12
