The Hibbing Public Utilities Commission on Aug. 12 approved Resolution 25-07 authorizing the issuance and sale of $20,000,000 in tax-exempt utility revenue notes to fund construction of a transmission line.
The resolution, presented at the meeting as a construction loan through National Bank of Commerce, allows interest-only payments during the construction period and delegates execution of closing documents to the chair, vice chair and/or secretary.
Commissioners were told the loan is intended to fund construction through completion and later convert to a longer-term amortized loan. "This is the construction loan that would turn into a 20 year amortization loan," said Luke, a staff presenter, adding that the commission could later decide whether the line is retained in full by the utility or placed with a partner and that MISO-related revenues are expected to contribute to debt service. The presentation said the project’s full completion is currently expected in June 2027.
The commission voted to approve the resolution. The meeting record shows the motion carried and that one commissioner abstained; the name for that abstention is not specified on the public audio transcript. The resolution authorizes staff to proceed with the draw schedule included in the meeting packet, subject to project scheduling and bond counsel review.
Why this matters: Commission staff described the financing as structured so that ratepayers would not bear the full burden of the asset’s cost while the transmission line is intended to provide regional grid benefits through MISO. Officials also noted the utility’s AFUDC (Allowance for Funds Used During Construction) policy is being followed for accounting during construction.
Background and next steps: The presentation included a proposed draw schedule and said bond counsel recommended the recommended structure. Staff said the utility has begun incurring modest interest during construction that will rise as borrowing increases. The commission’s vote authorizes staff to finalize documents and proceed with the loan closing process; staff said additional regulatory and financing decisions will follow as the project moves toward commercial operation.