ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: The Company is subject to the risk of fluctuating interest rates in the normal course of business.
−Removed: Our policy is to manage interest rates through the use of fixed rate long-term debt and, to a lesser extent, short-term debt.
−Removed: The Company’s exposure to interest rate risk related to existing fixed rate, long-term debt is due to the term of the majority of our First Mortgage Bonds and the term of the promissory note, which have final maturity dates ranging from 2028 to 2049, and interest rates ranging from 4.24% to 5.96%, which exposes the Company to interest rate risk as interest rates may drop below the existing fixed rate of the long-term debt prior to such debt’s maturity.
−Removed: In addition, the Company has interest rate exposure on $60 million of variable rate lines of credit with two banks.
−Removed: As of March 31, 2025, there were no outstanding balances on the lines of credit.
−Removed: Increases in variable interest rates result in an increase in the cost of borrowing on these variable rate lines of credit.
−Removed: We are also exposed to market risk associated with changes in commodity prices.
−Removed: Our risks associated with price increases in chemicals, electricity and other commodities are mitigated by our ability to recover our costs through rate increases to our customers.
−Removed: We have also sought to mitigate future significant electric price increases by signing multi-year supply contracts at fixed prices.
+Added: The Company is subject to
+Added: the risk of fluctuating interest rates in the normal course of business.
+Added: Our policy is to manage interest rates
+Added: through the use of fixed rate long-term debt and, to a lesser extent, short-term
+Added: The Company's exposure to interest
+Added: rate risk related to existing fixed rate, long-term debt is due to the term of
+Added: the majority of our First Mortgage Bonds and the term of the promissory note,
+Added: which have final maturity dates ranging from 2028 to 2049, and interest rates
+Added: ranging from 4.24% to 5.96%, which exposes the Company to interest rate risk as
+Added: interest rates may drop below the existing fixed rate of the long-term debt
+Added: prior to such debt’s maturity.
+Added: addition, the Company has interest rate exposure on $60 million of variable
+Added: rate lines of credit with two banks.
+Added: of June 30, 2025, there was approximately $2.0 million outstanding on the lines
+Added: Increases in variable
+Added: interest rates result in an increase in the cost of borrowing on these variable
+Added: rate lines of credit.
+Added: exposed to market risk associated with changes in commodity prices.
+Added: Our risks associated with price increases in
+Added: chemicals, electricity and other commodities are mitigated by our ability to
+Added: recover our costs through rate increases to our customers.
+Added: We have also sought to mitigate future
+Added: significant electric price increases by signing multi-year supply contracts at
+Added: fixed prices.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.