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(a) The authority will establish the terms of a loan made from the rural electrification revolving loan fund when the authority approves the loan application under 3 AAC 106.220.
(b) A loan must bear an interest rate equal to two percent a year on the unpaid balance. Interest paid to the authority must be recovered by the electric utility receiving the loan through a surcharge to the regular electric rates paid by the customers served by the electric service extended with the loan proceeds. Interest payments to the authority are due on the first day of the calendar year following the extension of electric service and on the first day of each calendar year thereafter until paid in full.
(c) A loan from the rural electrification revolving loan fund will be made only to finance a project if full repayment of the loan is likely to be made within 10 years. Payment of the unpaid balance of the principal of the loan is deferred until the first day of the calendar year following the extension of electric service. At that time, and annually after that, the annual principal repayment amount due will be calculated as follows:
(1) the average cost to the electric utility to acquire and install one transformer, one span of line, one pole, and one service drop during the initial 30-day period following the extension of electric service must be calculated by the electric utility and verified by the authority; after the first year following the extension of electric service, and in January of each year until the loan is fully repaid, a recognized construction-cost index for the area will be used to adjust the amount specified for the first year under this paragraph;
(2) the actual cost to the electric utility to provide each service connection to customers first served in the preceding calendar year must be reported by the electric utility to the authority each January, and the cost must be verified by the authority; the first report must exclude the cost of service connections for customers connected during the initial 30-day period following extension of electric service;
(3) for each customer for whom the cost of connection reported under (2) of this subsection is equal to or greater than the amount calculated under (1) of this subsection, no principal payment is due;
(4) for each customer for whom the cost of connection reported under (2) of this subsection is less than the amount calculated under (1) of this subsection, the difference is due as a principal repayment.
(d) Notwithstanding (c) of this section, the authority and the borrower may agree to a fixed repayment term.
(e) A loan must be supported by appropriate documentation that may include a loan agreement, bonds, notes, or other documentation, in a form satisfactory to the authority.
History: Eff. 2/16/96, Register 137
Authority: AS 42.45.020
Editor's note: Before 2/16/96, Register 137, the substance of 19 AAC 96.240 was set out in former 3 AAC 94.250. The history note of 19 AAC 96.240 does not reflect the history of 3 AAC 94.250.
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Last modified 7/05/2006