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Town, AG, Water Company Discuss Borrowing with DPU



The Town of Milford, the state Attorney General's Office and the privately held Milford Water Company each filed briefs with the state Department of Public Utilities (DPU) last month regarding the company's June request to borrow $7 million

According to Manager David Condrey's statement filed with the DPU, "The proposed financing is reasonably necessary to enable the construction of infrastructure and maintenance- related investments in plant. Specifically, the company is in the process of eliminating all known lead services from its system in an effort to lower our customers' exposure. We are also working

on a significant project to increase our water capacity at two of our existing sources which have lost capacity over the years. This project will help to ease the demands now being placed on our surface water sources and help to lessen some of the water restrictions that we are forced to impose every season. Additionally, we have planned the rehabilitation of our Highland St. water storage tank which will help to extend its life and improve water quality in the system. There are other water main replacement projects also being planned

in the near future which will also extend their respective lives and improve water quality and fire protection in those areas."

The Town of Milford is not opposed to the borrowing, noted Special Counsel Gerald Moody, but asked the DPU to ensure that the borrowing terms with People's United Bank "be spelled out

in as much detail as possible and be viewed by

the Department as being in the best interest of

the rate payers." In addition, he asked the DPU to "incorporate into its decision, a requirement that the Company utilize the borrowed funds solely for the purposes as identified in these proceedings... and further require that the Company move expeditiously to undertake these projects, particularly those which will serve to increase the capacity, efficiency and quality of the water system available to the rate payers of Milford."

The Attorney General's Office asked three things: "(1) the Department order the Company to provide evidence to support each fixed interest rate associated with the termed out balances for the debt issuance; (2) the Department condition approval of the Company's petition on the capping of both the credit spread and the interest rate associated with the debt issuance; and (3) the Department's approval of the Company's petition be conditioned on the terms of the final debt agreement being the same as the proposed terms provided in the Company's Initial Filing."

Through its attorney, Jon Bonsall, the Milford Water Company said its borrowing request

meets the DPU's two standards that the financing "is reasonably necessary to accomplish some legitimate purpose in meeting a company's service obligations" and that "its net utility plant (utility plant less accumulated depreciation) is equal to or in excess of its total capitalization."

The DPU has not set a date for making its final decision on the borrowing request.




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