-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MgGM8KD05msuNC5IfjHYNwJZEGnd3r5AxSg3L7xRZLt8H8tkzmwLF8PQiBPQo5LF LEHQEpXOEL/AoDpuzE/Sjg== 0000049648-00-000009.txt : 20000307 0000049648-00-000009.hdr.sgml : 20000307 ACCESSION NUMBER: 0000049648-00-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 20000303 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDAHO POWER CO CENTRAL INDEX KEY: 0000049648 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 820130980 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-03198 FILM NUMBER: 560471 BUSINESS ADDRESS: STREET 1: 1221 W IDAHO ST STREET 2: PO BOX 70 CITY: BOISE STATE: ID ZIP: 83702 BUSINESS PHONE: 2083882200 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Exact name of registrants as specified I.R.S. Commission in their charters, state of Employer File Number incorporation, address of Identification principal executive offices, and Number telephone number 1-14465 IDACORP, Inc. 82-0505802 1-3198 Idaho Power Company 82-0130980 1221 W. Idaho Street Boise, ID 83702-5627 Telephone: (208) 388-2200 State of Incorporation: Idaho Web site: www.idacorpinc.com None Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Number of shares of Common Stock outstanding as of September 30, 1999: IDACORP, Inc.: 37,612,351 Idaho Power Company: 37,612,351 shares, all of which are held by IDACORP, Inc. INDEX Page Definitions 2 Part I. Financial Information: Item 1. Financial Statements IDACORP, Inc.: Consolidated Statements of Income 3-4 Consolidated Balance Sheets 5-6 Consolidated Statements of Capitalization 7 Consolidated Statements of Cash Flows 8 Consolidated Statements of Comprehensive 9 Income Notes to Consolidated Financial Statements 10-14 Independent Accountants' Report 15 Idaho Power Company: Consolidated Statements of Income 16-17 Consolidated Balance Sheets 18-19 Consolidated Statements of Capitalization 20 Consolidated Statements of Cash Flows 21 Consolidated Statements of Comprehensive 22 Income Notes to Consolidated Financial Statements 23-24 Independent Accountants' Report 25 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26-33 Part II. Other Information: Item 6. Exhibits and Reports on Form 8-K 34-37 Signatures 38-39 DEFINITIONS FASB - Financial Accounting Standards Board FERC - Federal Energy Regulatory Commission IPUC - Idaho Public Utilities Commission KWh - kilowatt-hour MAF - Million Acre-Feet MMbtu - Million British Thermal Units MWh - Megawatt-hour OPUC - Oregon Public Utilities Commission PCA - Power Cost Adjustment PUCN - Public Utility Commission of Nevada REA - Rural Electrification Administration SFAS - Statement of Financial Accounting Standards FORWARD LOOKING INFORMATION This Form 10-Q contains "forward-looking statements" intended to qualify for safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements should be read with the cautionary statements and important factors included in this Form 10-Q at Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations-Forward-Looking Information. Forward- looking statements are all statements other than statements of historical fact, including without limitation those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," and similar expressions and include, but are not limited to, statements under the heading "Other Matters" concerning the outcome of IDACORP, Inc.'s and Idaho Power Company's Year 2000 efforts. PART I - FINANCIAL INFORMATION Item 1. Financial Statements IDACORP, Inc. Consolidated Statements of Income Three Months Ended September 30, 1999 1998 (Thousands of Dollars except for per share amounts) REVENUES: General business $137,193 $ 149,411 Off-system sales 19,078 74,560 Other revenues 5,707 6,229 Total revenues 161,978 230,200 EXPENSES: Operations: Purchased power 41,088 92,885 Fuel expense 23,523 25,054 Power cost adjustment (14,774) (1,338) Other 36,615 34,455 Maintenance 10,903 10,709 Depreciation 19,511 19,140 Taxes other than income taxes 5,170 5,258 Total expenses 122,036 186,163 INCOME FROM OPERATIONS 39,942 44,037 OTHER INCOME: Allowance for equity funds used during Construction 322 46 Energy trading activities - Net 6,802 2,042 Other - Net 2,098 5,037 Total other income 9,222 7,125 INTEREST EXPENSE AND OTHER: Interest on long-term debt 13,078 13,106 Other interest 2,339 2,223 Allowance for borrowed funds used during Construction (247) (274) Preferred dividends of Idaho Power Company 1,401 1,410 Total interest expense and 16,571 16,465 other INCOME BEFORE INCOME TAXES 32,593 34,697 INCOME TAXES 10,574 12,392 NET INCOME $22,019 $ 22,305 AVERAGE COMMON SHARES OUTSTANDING 37,612 37,612 (000) EARNINGS PER SHARE OF COMMON STOCK (basic and diluted) $ 0.59 $ 0.59 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Statements of Income Nine Months Ended September 30, 1999 1998 (Thousands of Dollars except for per share amounts) REVENUES: General business $396,415 $ 382,631 Off-system sales 86,109 162,204 Other revenues 18,676 23,411 Total revenues 501,200 568,246 EXPENSES: Operations: Purchased power 81,503 145,862 Fuel expense 64,398 60,077 Power cost adjustment 424 12,951 Other 110,579 106,008 Maintenance 30,285 31,262 Depreciation 58,087 57,080 Taxes other than income taxes 16,429 16,103 Total expenses 361,705 429,343 INCOME FROM OPERATIONS 139,495 138,903 OTHER INCOME: Allowance for equity funds used during Construction 710 71 Energy trading activities - Net 14,646 4,911 Other - Net 6,224 10,643 Total other income 21,580 15,625 INTEREST EXPENSE AND OTHER: Interest on long-term debt 40,231 39,204 Other interest 6,768 6,368 Allowance for borrowed funds used during Construction (605) (714) Preferred dividends of Idaho Power Company 4,121 4,232 Total interest expense and 50,515 49,090 other INCOME BEFORE INCOME TAXES 110,560 105,438 INCOME TAXES 37,799 34,730 NET INCOME $ 72,761 $ 70,708 AVERAGE COMMON STOCK OUTSTANDING 37,612 37,612 (000) EARNINGS PER SHARE OF COMMON STOCK (basic and diluted) $ 1.93 $ 1.88 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Balance Sheets Assets September December 30, 31, 1999 1998 (Thousands of Dollars) ELECTRIC PLANT: In service (at original cost) $2,710,168 $ 2,659,441 Accumulated provision for depreciation (1,060,783) (1,009,387) In service - Net 1,649,385 1,650,054 Construction work in progress 77,224 59,717 Held for future use 1,742 1,738 Electric plant - Net 1,728,351 1,711,509 INVESTMENTS AND OTHER PROPERTY 140,267 129,437 CURRENT ASSETS: Cash and cash equivalents 17,207 22,867 Receivables: Customer 102,901 81,245 Allowance for uncollectible (1,397) (1,397) accounts Natural gas 36,124 21,426 Notes 4,747 4,643 Employee notes 4,412 4,510 Other 6,449 6,059 Energy trading assets 50,715 - Accrued unbilled revenues 26,224 34,610 Materials and supplies (at 32,127 30,157 average cost) Fuel stock (at average cost) 8,281 7,096 Prepayments 14,414 16,042 Regulatory assets associated with income Taxes 2,965 2,965 Total current assets 305,169 230,223 DEFERRED DEBITS: American Falls and Milner water 31,585 31,830 rights Company-owned life insurance 43,368 35,149 Regulatory assets associated with income Taxes 202,153 201,465 Regulatory assets - other 54,190 62,013 Other 50,520 49,994 Total deferred debits 381,816 380,451 TOTAL $2,555,603 $ 2,451,620 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Balance Sheets Capitalization and Liabilities September December 30, 31, 1999 1998 (Thousands of Dollars) CAPITALIZATION: Common stock equity: Common stock without par value (shares Authorized 120,000,000; shares Outstanding 37,612,351) $ 451,112 $ 451,564 Retained earnings 298,973 278,607 Accumulated other (686) 226 comprehensive income Total common stock equity 749,399 730,397 Preferred stock of Idaho Power 105,856 105,968 Company Long-term debt 741,849 815,937 Total capitalization 1,597,104 1,652,302 CURRENT LIABILITIES: Long-term debt due within one 88,026 6,029 year Notes payable 11,630 38,524 Accounts payable 97,818 73,499 Accounts payable - natural gas 48,530 28,476 Energy trading liabilities 54,569 - Taxes accrued 31,075 24,785 Interest accrued 15,853 18,365 Deferred income taxes 2,965 2,965 Other 13,259 12,275 Total current liabilities 363,725 204,918 DEFERRED CREDITS: Regulatory liabilities associated with deferred investment tax 67,961 69,396 credits Deferred income taxes 422,356 422,196 Regulatory liabilities associated with income taxes 28,075 28,075 Regulatory liabilities - other 3,996 4,161 Other 72,386 70,572 Total deferred credits 594,774 594,400 COMMITMENTS AND CONTINGENT LIABILITIES TOTAL $2,555,603 $ 2,451,620 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Statements of Capitalization September December 30, 31, 1999 % 1998 % (Thousands of Dollars) COMMON STOCK EQUITY: Common stock $451,112 $ 451,564 Retained earnings 298,973 278,607 Accumulated other comprehensive (686) 226 income Total common stock equity 749,399 47 730,397 44 PREFERRED STOCK OF IDAHO POWER COMPANY: 4% preferred stock 15,856 15,968 7.68% Series, serial preferred 15,000 15,000 stock 7.07% Series, serial preferred 25,000 25,000 stock Auction rate preferred stock 50,000 50,000 Total preferred stock 105,856 7 105,968 7 LONG-TERM DEBT OF IDAHO POWER COMPANY: First mortgage bonds: 8.65% Series due 2000 80,000 80,000 6.93% Series due 2001 30,000 30,000 6.85% Series due 2002 27,000 27,000 6.40% Series due 2003 80,000 80,000 8 % Series due 2004 50,000 50,000 5.83% Series due 2005 60,000 60,000 Maturing 2021 through 2031 with rates ranging from 7.5% to 9.52% 230,000 230,000 Total first mortgage bonds 557,000 557,000 Amount due within one (80,000) - year Net first mortgage 477,000 557,000 bonds Pollution control revenue bonds: 7 1/4% Series due 2008 4,360 4,360 8.30% Series 1984 due 2014 49,800 49,800 6.05% Series 1996A due 2026 68,100 68,100 Variable Rate Series 1996B due 24,200 24,200 2026 Variable Rate Series 1996C due 24,000 24,000 2026 Total pollution control 170,460 170,460 revenue bonds REA notes 1,433 1,489 Amount due within one year (75) (74) Net REA notes 1,358 1,415 American Falls bond guarantee 19,885 20,130 Milner Dam note guarantee 11,700 11,700 Debt related to investments in affordable housing with rates ranging from 6.03% to 8.59% due 1999 to 2009 70,411 62,103 Amount due within one year (7,951) (5,955) Net affordable housing debt 62,460 56,148 Unamortized premium/discount - (1,466) (1,539) Net Net Idaho Power Company debt 741,397 815,314 OTHER SUBSIDIARY DEBT 452 623 Total long-term debt 741,849 46 815,937 49 TOTAL CAPITALIZATION $1,597,104 100 $ 1,652,302 100 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Statements of Cash Flows Nine Months Ended September 30, 1999 1998 (Thousands of Dollars) OPERATING ACTIVITIES: Net income $ 72,761 $ 70,708 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 68,913 62,895 Deferred taxes and investment tax Credits (1,963) (656) Accrued PCA costs 243 12,743 Change in: Accounts receivable and (35,122) (56,060) prepayments Accrued unbilled revenue 8,386 6,847 Materials and supplies and fuel Stock (3,155) 284 Accounts payable 44,373 45,741 Taxes accrued 6,290 3,187 Other current assets and 2,326 (5,327) liabilities Other - net 5,701 (9,751) Net cash provided by operating Activities 168,753 130,611 INVESTING ACTIVITIES: Additions to utility plant (73,113) (60,136) Investments in affordable (17,556) (19,139) housing projects Investments in company-owned (6,462) - life insurance Other - net (5,510) (7,486) Net cash used in investing (102,641) (86,761) activities FINANCING ACTIVITIES: Proceeds from issuance of: Long-term debt related to affordable housing projects 14,582 15,088 First mortgage bonds - 60,000 Retirement of subsidiary long- (6,446) (3,316) term debt Retirement of first mortgage - (30,000) bonds Dividends on common stock (52,395) (52,399) Decrease in short-term (26,894) (35,077) borrowings Other - net (619) (135) Net cash used in financing (71,772) (45,839) activities Net decrease in cash and cash (5,660) (1,989) equivalents Cash and cash equivalents beginning 22,867 6,905 of period Cash and cash equivalents at end of $ 17,207 $ 4,916 period SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Income taxes $ 34,017 $ 44,773 Interest (net of amount $ 46,836 $ 40,712 capitalized) The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Statements of Comprehensive Income Three Months Ended September 30, 1999 1998 (Thousands of Dollars) NET INCOME $ 22,019 $ 22,305 OTHER COMPREHENSIVE INCOME: Unrealized gains (losses) on securities (net of tax of ($688)) (912) - TOTAL COMPREHENSIVE INCOME $ 21,107 $ 22,305 Nine Months Ended September 30, 1999 1998 (Thousands of Dollars) NET INCOME $ 72,761 $ 70,708 OTHER COMPREHENSIVE INCOME: Unrealized gains (losses) on securities (net of tax of ($688) and (912) 1,915 $1,229) Minimum pension liability adjustment (net of tax of $1,159) - (1,805) TOTAL COMPREHENSIVE INCOME $ 71,849 $ 70,818 The accompanying notes are an integral part of these statements. IDACORP, Inc. Notes to Consolidated Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Nature of Business IDACORP, Inc. (IDACORP or the Company), is a holding company whose principal operating subsidiary is Idaho Power Company (IPC). On October 1, 1998 IPC's outstanding common stock was converted on a share-for-share basis into common stock of IDACORP. However, IPC's preferred stock and debt securities outstanding were unaffected and remain with IPC. IPC, a public utility, represents over 90% of the consolidated total assets of the Company and is its principal operating subsidiary. IPC is regulated by the FERC and the state regulatory commission of Idaho, Oregon, Nevada and Wyoming and is engaged in the generation, transmission, distribution, sale and purchase of electric energy. Financial Statements In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly its consolidated financial position as of September 30, 1999, and its consolidated results of operations for the three and nine months ended September 30, 1999 and 1998 and cash flows for the nine months ended September 30, 1999 and 1998. These financial statements do not contain the complete detail or footnote disclosure concerning accounting policies and other matters that would be included in full year financial statements and therefore they should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned or controlled subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Investments in business entities in which the Company and its subsidiaries do not have control, but have the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. Accounting for Contracts Involved in Energy Trading and Risk Management Activities The Company adopted Emerging Issues Task Force 98-10 "Accounting for Contracts Involved in Energy Trading Activities," (EITF 98- 10) effective January 1, 1999. The consensus establishes standards for designating between energy contracts and energy trading contracts and accounting for each. Energy trading contracts are reported at fair value as of the balance sheet date with the resulting gains and losses reported in the income statement. The resulting impact of adoption on net income was immaterial. Related to the adoption of EITF 98-10, the Company has begun reporting electricity trading activity net (netting revenues and expenses) in "Other Income-Energy trading activities- net" on the Consolidated Statements of Income. Prior periods have been reclassified to conform with the current period's presentation with no impact to net income. Derivative Financial Instruments The Company uses financial instruments such as commodity forwards, futures, options and swaps to hedge against exposure to commodity price risk in the electricity and natural gas markets as well as to optimize its energy trading portfolio. The accounting for derivative financial instruments is in accordance with the concepts established in SFAS NO. 80, "Accounting for Futures Contracts," American Institute of Certified Public Accountants Statement of Position 86-2, "Accounting for Options," and recently issued EITF 98-10. Gains and losses from derivative instruments designed to hedge energy trading contracts as defined by EITF 98-10 are recognized in income on a current basis along with the gains and losses of the hedged transaction. Additionally, gains and losses on derivative transactions not qualifying as a hedge are recognized currently in income. Cash flows from derivatives are recognized in the statement of cash flows as an operating activity. Reclassifications Certain items previously reported for periods prior to September 30, 1999 have been reclassified to conform with the current period's presentation. Net income was not affected by these reclassifications. 2. INCOME TAXES The Company's effective tax rate for the first nine months increased from 32.9 percent in 1998 to 34.2 percent in 1999. Reconciliations between the statutory income tax rate and the effective rates for the nine-month periods ended September 30, 1999 and 1998 are as follows: 1999 1998 Amount Rate Amount Rate Computed income taxes based on statutory federal income tax rate $ 38,696 35.0% $ 36,903 35.0 % Changes in taxes resulting from: Current state income taxes 5,964 5.4 5,106 4.8 Net depreciation 3,952 3.6 4,005 3.8 Investment tax credits restored (2,221) (2.0) (2,197) (2.1) Removal costs (612) (0.6) (1,037) (1.0) Repair allowance (2,066) (1.9) (2,346) (2.2) Affordable housing credits (6,958) (6.3) (5,160) (4.9) Preferred dividends 1,442 1.3 1,482 1.4 Settlement of prior year tax returns - - (1,500) (1.4) Other (398) (0.3) (526) (0.5) Total $ 37,799 34.2% $ 34,730 32.9 % 3. PREFERRED STOCK OF IDAHO POWER COMPANY: The number of shares of IPC preferred stock outstanding were as follows: September December 30, 31, 1999 1998 Cumulative, $100 par value: 4% preferred stock (authorized 215,000 158,562 159,680 shares) Serial preferred stock, 7.68% Series (authorized 150,000 shares) 150,000 150,000 Serial preferred stock, cumulative, without par value; total of 3,000,000 shares authorized: 7.07% Series, $100 stated value, (authorized 250,000 shares) 250,000 250,000 Auction rate preferred stock, $100,000 stated value, (authorized 500 shares) 500 500 4. FINANCING: The Company currently has a $300.0 million shelf registration statement that can be used for the issuance of unsecured debt securities and preferred or common stock. At September 30, 1999, none had been issued. IPC currently has a $200.0 million shelf registration statement with a balance of $83.0 million remaining to be issued. This can be used for first mortgage bonds (including medium term notes) or preferred stock. 5. COMMITMENTS AND CONTINGENT LIABILITIES: Commitments under contracts and purchase orders relating to the Company's program for construction and operation of facilities amounted to approximately $5.7 million at September 30, 1999. The commitments are generally revocable by the Company subject to reimbursement of manufacturers' expenditures incurred and/or other termination charges. The Company is party to various legal claims, actions, and complaints, certain of which involve material amounts. Although the Company is unable to predict with certainty whether or not it will ultimately be successful in these legal proceedings, or, if not, what the impact might be, based upon the advice of legal counsel, management presently believes that disposition of these matters will not have a material adverse effect on the Company's financial position, results of operation, or cash flows. 6. REGULATORY ISSUES: Power Cost Adjustment (PCA) IPC has a PCA mechanism that provides for annual adjustments to the rates charged to Idaho retail customers. These adjustments, which take effect annually on May 16, are based on forecasts of net power supply costs and the true-up of the prior year's forecast. The difference between the actual costs incurred and the forecasted costs is deferred, with interest, and trued-up in the next annual rate adjustment. The May 16, 1999 rate adjustment reduced Idaho general business customer rates by 9.2 percent. The decrease was a result of projected above-average hydroelectric generating conditions and the true-up of the 1998-99 rate period. Overall, IPC's annual general business revenues are expected to decrease by $40.4 million during the 1999-2000 rate period. For the 1999-2000 rate period, actual power supply costs have been greater than forecast, due to actual hydroelectric generating conditions being less favorable than forecast. To account for these higher-than-expected costs, IPC has recorded an increase in regulatory assets of $4.2 million as of September 30, 1999. Regulatory Settlement Under the terms of an IPUC Settlement in effect through 1999, when earnings in IPC's Idaho jurisdiction exceed an 11.75 percent return on year-end common equity, 50 percent of the excess is set aside for the benefit of Idaho retail customers. On April 7, 1999 IPC submitted the 1998 annual earnings sharing compliance filing to the IPUC. This filing indicated that there was almost $6.4 million in earnings before authorized deductions, or $3.3 million after authorized deductions, available for the benefit of IPC's Idaho customers. On June 16, 1999 IPC filed a supplement to the April 7, 1999 annual earnings sharing compliance filing requesting that the $3.3 million of remaining 1997 and 1998 revenue sharing be refunded to its customers. On July 19, 1999 the IPUC issued Order No. 28099 in Case IPC-E-99-2, refunding $0.7 million to special contract and large customers. The remaining balance of $2.6 million has been deferred with interest until May 2000. For the nine month period ending September 30, 1999, the Company has set aside $4.5 million for the benefit of its Idaho retail customers. DSM (Conservation) Expenses IPC has obtained changes to the regulatory treatment of previously deferred DSM expenses in both Idaho and Oregon. In Idaho, IPC requested that the IPUC allow for the recovery of post-1993 DSM expenses and acceleration of the recovery of DSM expenditures authorized in the last general rate case. In its Order No. 27660 issued on July 31, 1998, the IPUC set a new amortization period of 12 years instead of the 24-year period previously adopted. The IPUC order reflects an increase in annual Idaho retail revenue requirements of $3.1 million for 12 years. Per Order No. 27660 issued July 31, 1998, IPC funded the 1998 annual revenue requirements with 1997 revenue sharing amounts from July 1998 until May 16, 1999. A group of industrial customers has appealed the IPUC order to the Idaho Supreme Court. Oral argument before the Idaho Supreme Court has been set for December 8, 1999. In December 1998, IPC filed with the IPUC a request to recover remaining deferred DSM expenditures of approximately $2.1 million. IPC requested that the amount be applied against 1998 earnings sharing amounts. On May 11, 1999 IPC received Order No. 28041 allowing recovery of $1.5 million of existing and future DSM expenditures as part of the authorized deductions from the 1998 revenue sharing funds of $6.4 million (as noted above). In Oregon, the OPUC authorized a five-year amortization of the Oregon-allocated share of DSM expenditures incurred through 1997. The DSM charge replaces an expiring rate surcharge related to extraordinary power supply costs associated with past drought conditions. IPC anticipates that the charge will recover approximately $540,000 per year. 7. NEW ACCOUNTING PRONOUNCEMENT: In June 1998 the FASB issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative financial instruments and other similar instruments and for hedging activities. It was originally effective for fiscal years beginning after June 15, 1999. In June 1999 the FASB issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Standard No. 133", which defers the effective date of SFAS No. 133 one year. The Company is reviewing SFAS No. 133 to determine its effects on the Company's financial position and results of operations. The Company expects to adopt this standard by January 1, 2001. 8. DERIVATIVE FINANCIAL INSTRUMENTS: The notional amount of open commodity derivative positions as of September 30, 1999 was a net long electricity position of 427 MW and a net short natural gas position of 111 BCF. The loss in fair value of commodity derivative positions (including natural gas and electricity forwards, futures, options and swaps) included in income before income taxes for the nine months ended September 30, 1999 was $(3.9) million. 9. INDUSTRY SEGMENT INFORMATION: IDACORP's dominant operating segment is the regulated utility operations of IPC. IDACORP's non-utility operating segments do not individually constitute more than 10% of enterprise revenues, income or assets, nor in aggregate do they comprise more than 25% of enterprise revenues, income or assets. IPC's primary business is the generation, transmission, distribution, purchase and sale of electricity. Substantially all of the Company's revenue comes from the sale of electricity and related services, predominately in the United States. The Company also sells natural gas, renewable energy products and systems, and other miscellaneous services. Revenues from these operations are not significant. The following table summarizes the segment information for IPC utility operations, with a reconciliation to total enterprise information: IPC Total Utility Other Enterprise (Thousands of Dollars) Three months ended September 30, 1999: Revenues $ 161,978 $ - $ 161,978 Net income 16,836 5,183 22,019 Three months ended September 30, 1998: Revenues $ 230,200 $ - $ 230,200 Net income 20,858 1,447 22,305 IPC Total Utility Other Enterprise (Thousands of Dollars) Nine months ended September 30, 1999: Revenues $ 501,200 $ - $ 501,200 Net income 62,933 9,828 72,761 Total assets at September 30, 1999 2,333,301 222,302 2,555,603 Nine months ended September 30, 1998: Revenues $ 568,246 $ - $ 568,246 Net income 67,513 3,195 70,708 Total assets at December 31, 1998 2,310,322 141,298 2,451,620 INDEPENDENT ACCOUNTANTS' REPORT IDACORP, Inc. Boise, Idaho We have reviewed the accompanying consolidated balance sheet and statement of capitalization of IDACORP, Inc. and subsidiaries as of September 30, 1999, and the related consolidated statements of income and comprehensive income for the three and nine month periods ended September 30, 1999 and 1998 and the consolidated statements of cash flows for the nine month periods ended September 30, 1999 and 1998. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet and statement of capitalization of IDACORP, Inc. and subsidiaries as of December 31, 1998, and the related consolidated statements of income, comprehensive income, retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated January 29, 1999, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet and statement of capitalization as of December 31, 1998 is fairly stated, in all material respects, in relation to the consolidated balance sheet and statement of capitalization from which it has been derived. DELOITTE & TOUCHE LLP Boise, Idaho October 29, 1999 Idaho Power Company Consolidated Statements of Income Three Months Ended September 30, 1999 1998 (Thousands of Dollars) REVENUES: General business $137,193 $ 149,411 Off-system sales 19,078 74,560 Other revenues 5,707 6,229 Total revenues 161,978 230,200 EXPENSES: Operations: Purchased power 41,088 92,885 Fuel expense 23,523 25,054 Power cost adjustment (14,774) (1,338) Other 36,615 34,455 Maintenance 10,903 10,709 Depreciation 19,511 19,140 Taxes other than income taxes 5,170 5,258 Total expenses 122,036 186,163 INCOME FROM OPERATIONS 39,942 44,037 OTHER INCOME: Allowance for equity funds used during construction 322 46 Energy trading activities - Net 7,266 2,042 Other - Net 1,064 5,037 Total other income 8,652 7,125 INTEREST CHARGES: Interest on long-term debt 13,041 13,106 Other interest 2,010 2,223 Allowance for borrowed funds used during construction (247) (274) Total interest expense and 14,804 15,055 other INCOME BEFORE INCOME TAXES 33,790 36,107 INCOME TAXES 10,419 12,392 NET INCOME 23,371 23,715 Dividends on preferred stock 1,401 1,410 EARNINGS ON COMMON STOCK $ 21,970 $ 22,305 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Income Nine Months Ended September 30, 1999 1998 (Thousands of Dollars) REVENUES: General business $396,415 $ 382,631 Off-system sales 86,109 162,204 Other revenues 18,676 23,411 Total revenues 501,200 568,246 EXPENSES: Operations: Purchased power 81,503 145,862 Fuel expense 64,398 60,077 Power cost adjustment 424 12,951 Other 110,579 106,008 Maintenance 30,285 31,262 Depreciation 58,087 57,080 Taxes other than income taxes 16,429 16,103 Total expenses 361,705 429,343 INCOME FROM OPERATIONS 139,495 138,903 OTHER INCOME: Allowance for equity funds used during construction 710 71 Energy trading activities - Net 15,852 4,911 Other - Net 3,802 10,643 Total other income 20,364 15,625 INTEREST CHARGES: Interest on long-term debt 40,120 39,204 Other interest 5,913 6,368 Allowance for borrowed funds used during construction (605) (714) Total interest charges 45,428 44,858 INCOME BEFORE INCOME TAXES 114,431 109,670 INCOME TAXES 37,480 34,730 NET INCOME 76,951 74,940 Dividends on preferred stock 4,121 4,232 EARNINGS ON COMMON STOCK $ 72,830 $ 70,708 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Balance Sheets Assets September December 30, 31, 1999 1998 (Thousands of Dollars) ELECTRIC PLANT: In service (at original cost) $2,710,168 $ 2,659,441 Accumulated provision for depreciation (1,060,783) (1,009,387) In service - Net 1,649,385 1,650,054 Construction work in progress 75,011 58,904 Held for future use 1,742 1,738 Electric plant - Net 1,726,138 1,710,696 INVESTMENTS AND OTHER PROPERTY 113,923 105,600 CURRENT ASSETS: Cash and cash equivalents 9,400 20,029 Receivables: Customer 101,586 81,227 Allowance for uncollectible (1,397) (1,397) accounts Natural gas - 21,426 Notes 355 467 Employee notes 4,412 4,510 Other (including $3,164 from related Parties at 12/31/98) 7,188 8,502 Energy trading assets 35,625 - Accrued unbilled revenues 26,224 34,610 Materials and supplies (at 31,716 30,143 average cost) Fuel stock (at average cost) 8,281 7,096 Prepayments 14,393 16,011 Regulatory assets associated with income taxes 2,965 2,965 Total current assets 240,748 225,589 DEFERRED DEBITS: American Falls and Milner water 31,585 31,830 rights Company-owned life insurance 43,368 35,149 Regulatory assets associated with income taxes 202,153 201,465 Regulatory assets - other 54,190 62,013 Other 49,903 49,448 Total deferred debits 381,199 379,905 TOTAL $2,462,008 $ 2,421,790 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Balance Sheets Capitalization and Liabilities September December 30, 31, 1999 1998 (Thousands of Dollars) CAPITALIZATION: Common stock equity: Common stock, $2.50 par value (50,000,000 shares authorized; 37,612,351 shares $ 94,031 $ 94,031 outstanding) Premium on capital stock 362,189 362,156 Capital stock expense (3,820) (3,823) Retained earnings 272,524 252,137 Accumulated other (686) 226 comprehensive income Total common stock equity 724,238 704,727 Preferred stock 105,856 105,968 Long-term debt 741,849 815,937 Total capitalization 1,571,943 1,626,632 CURRENT LIABILITIES: Long-term debt due within one 88,026 6,029 year Notes payable 10,165 38,508 Accounts payable (including $88 from related parties at 9/30/99) 98,010 72,660 Accounts payable - natural gas - 28,476 Energy trading liabilities 40,408 - Taxes accrued 31,606 25,164 Interest accrued 15,842 18,364 Deferred income taxes 2,965 2,965 Other 12,575 12,117 Total current liabilities 299,597 204,283 DEFERRED CREDITS: Regulatory liabilities associated with deferred investment tax 67,961 69,396 credits Deferred income taxes 420,586 420,268 Regulatory liabilities associated with income taxes 28,075 28,075 Regulatory liabilities - other 3,996 4,161 Other 69,850 68,975 Total deferred credits 590,468 590,875 COMMITMENTS AND CONTINGENT LIABILITIES TOTAL $2,462,008 $ 2,421,790 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Capitalization September December 30, 31, 1999 % 1998 % (Thousands of Dollars) COMMON STOCK EQUITY: Common stock $ 94,031 $ 94,031 Premium on capital stock 362,189 362,156 Capital stock expense (3,820) (3,823) Retained earnings 272,524 252,137 Accumulated other comprehensive (686) 226 income Total common stock equity 724,238 46 704,727 43 PREFERRED STOCK: 4% preferred stock 15,856 15,968 7.68% Series, serial preferred 15,000 15,000 stock 7.07% Series, serial preferred 25,000 25,000 stock Auction rate preferred stock 50,000 50,000 Total preferred stock 105,856 7 105,968 7 LONG-TERM DEBT: First mortgage bonds: 8.65% Series due 2000 80,000 80,000 6.93% Series due 2001 30,000 30,000 6.85% Series due 2002 27,000 27,000 6.40% Series due 2003 80,000 80,000 8 % Series due 2004 50,000 50,000 5.83% Series due 2005 60,000 60,000 Maturing 2021 through 2031 with rates ranging from 7.5% to 9.52% 230,000 230,000 Total first mortgage bonds 557,000 557,000 Amount due within one (80,000) - year Net first mortgage 477,000 557,000 bonds Pollution control revenue bonds: 7 1/4% Series due 2008 4,360 4,360 8.30% Series 1984 due 2014 49,800 49,800 6.05% Series 1996A due 2026 68,100 68,100 Variable Rate Series 1996B due 24,200 24,200 2026 Variable Rate Series 1996C due 24,000 24,000 2026 Total pollution control 170,460 170,460 revenue bonds REA notes 1,433 1,489 Amount due within one year (75) (74) Net REA notes 1,358 1,415 American Falls bond guarantee 19,885 20,130 Milner Dam note guarantee 11,700 11,700 Debt related to investments in affordable housing with rates ranging from 6.03% to 8.59% due 1999 to 2009 70,411 62,103 Amount due within one year (7,951) (5,955) Net affordable housing debt 62,460 56,148 Other subsidiary debt 452 623 Unamortized premium/discount - (1,466) (1,539) Net Total long-term debt 741,849 47 815,937 50 TOTAL CAPITALIZATION $1,571,943 100 $ 1,626,632 100 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Cash Flows Nine Months Ended September 30, 1999 1998 (Thousands of Dollars) OPERATING ACTIVITIES: Net income $ 76,951 $ 74,940 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 68,711 62,895 Deferred taxes and investment tax credits (1,805) (656) Accrued PCA costs 243 12,743 Change in: Accounts receivable and 4,209 (56,060) prepayments Accrued unbilled revenue 8,386 6,847 Materials and supplies and fuel stock (2,758) 284 Accounts payable (3,126) 45,741 Taxes accrued 6,442 3,187 Other current assets and 2,719 (5,327) liabilities Other - net 5,874 (9,751) Net cash provided by operating activities 165,846 134,843 INVESTING ACTIVITIES: Additions to utility plant (71,713) (60,136) Investments in affordable (17,556) (19,139) housing projects Investments in company-owned (6,462) - life insurance Other - net (3,842) (7,486) Net cash used in investing (99,573) (86,761) activities FINANCING ACTIVITIES: Proceeds from issuance of: Long-term debt related to affordable housing projects 14,582 15,088 First mortgage bonds - 60,000 Retirement of subsidiary long- (6,446) (3,316) term debt Retirement of first mortgage - (30,000) bonds Dividends on common stock (52,443) (52,399) Dividends on preferred stock (4,121) (4,232) Decrease in short-term (28,343) (35,077) borrowings Other - net (131) (135) Net cash used in financing (76,902) (50,071) activities Net decrease in cash and cash (10,629) (1,989) equivalents Cash and cash equivalents beginning of period 20,029 6,905 Cash and cash equivalents at end of period $ 9,400 $ 4,916 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Income taxes (including amounts paid to parent) $ 34,243 $ 44,773 Interest (net of amount $ 45,837 $ 40,712 capitalized) The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Comprehensive Income Three Months Ended September 30, 1999 1998 (Thousands of Dollars) NET INCOME $ 23,371 $ 23,715 OTHER COMPREHENSIVE INCOME: Unrealized gains (losses) on securities (net of tax of ($688)) (912) - TOTAL COMPREHENSIVE INCOME $ 22,459 $ 23,715 Nine Months Ended September 30, 1999 1998 (Thousands of Dollars) NET INCOME $ 76,951 $ 74,940 OTHER COMPREHENSIVE INCOME: Unrealized gains (losses) on securities (net of tax of ($688) and (912) 1,915 $2,185) Minimum pension liability adjustment (net of tax of $1,159) - (1,805) TOTAL COMPREHENSIVE INCOME $ 76,039 $ 75,050 The accompanying notes are an integral part of these statements. Idaho Power Company Notes to the Consolidated Financial Statements On October 1, 1998, IDACORP, Inc. (IDACORP) became the parent of Idaho Power Company and its subsidiaries (IPC). At that time IPC's ownership interests in two subsidiaries were transferred to IDACORP at book value. IPC's Consolidated Statement of Income for the nine months ending September 30, 1998 includes $2.7 million of net income attributable to the transferred subsidiaries. In 1999 the gas trading operations of IPC were transferred to another subsidiary of IDACORP. The subsidiary assumed the accounts receivable and accounts payable related to gas trading operations, and IPC recorded the transfer as a reduction of accounts receivable from the subsidiary. IPC's Consolidated Balance Sheet as of December 31, 1998 included $21.4 million of assets and $28.4 million of liabilities related to gas operations. Except as modified below, the Notes to the Consolidated Financial Statements of IDACORP also contained in this 10-Q Report are incorporated herein by reference insofar as they relate to IPC. Note 1 - Summary of Significant Accounting Policies Note 3 - Preferred Stock of Idaho Power Company Note 4 - Financing Note 5 - Commitments and Contingent Liabilities Note 6 - Regulatory Issues Note 7 - New Accounting Pronouncement 2. INCOME TAXES: IPC's effective tax rate for the first nine months increased from 31.7 percent in 1998 to 32.8 percent in 1999. Reconciliations between the statutory income tax rate and the effective rates for the nine-month periods ended September 30, 1999 and 1998 are as follows: 1999 1998 Amount Rate Amount Rate Computed income taxes based on statutory federal income tax rate $ 40,051 35.0% $ 38,385 35.0 % Changes in taxes resulting from: Current state income taxes 5,964 5.2 5,106 4.7 Net depreciation 3,952 3.5 4,005 3.6 Investment tax credits restored (2,221) (1.9) (2,197) (2.0) Removal costs (612) (0.5) (1,037) (0.9) Repair allowance (2,066) (1.8) (2,346) (2.1) Affordable housing credits (6,958) (6.1) (5,160) (4.7) Settlement of prior year tax returns - - (1,500) (1.4) Other (630) (0.6) (526) (0.5) Total $ 37,480 32.8% $ 34,730 31.7 % 8. DERIVATIVE FINANCIAL INSTRUMENTS: The notional amount of open commodity derivative positions as of September 30, 1999 was a net long electricity position of 427 MW. The loss in fair value of commodity derivative positions (including electricity forwards, futures, options and swaps) included in income before income taxes for the nine months ended September 30, 1999 was $5.0 million. 9. INDUSTRY SEGMENT INFORMATION: IPC's dominant operating segment is its regulated utility operations. IPC's non-utility operating segments do not individually constitute more than 10% of enterprise revenues, income or assets, nor in aggregate do they comprise more than 25% of enterprise revenues, income or assets. IPC's primary business is the generation, transmission, distribution, purchase and sale of electricity. Substantially all of IPC's revenue comes from the sale of electricity and related services, predominately in the United States. IPC subsidiaries also sell renewable energy products and systems, and miscellaneous other services. These revenues, however, are not significant. The following table summarizes the segment information for the regulated electric operations, with a reconciliation to total enterprise information: Regulated Electric Total Operations Other Enterprise (Thousands of Dollars) Three months ended September 30, 1999: Revenues $ 161,978 $ - $ 161,978 Net income 16,836 6,535 23,371 Three months ended September 30, 1998: Revenues $ 230,200 $ - $ 230,200 Net income 20,858 2,857 23,715 Regulated Electric Total Operations Other Enterprise (Thousands of Dollars) Nine months ended September 30, 1999: Revenues $ 501,200 $ - $ 501,200 Net income 62,933 14,018 76,951 Total assets at September 30, 1999 2,333,301 128,707 2,462,008 Nine months ended September 30, 1998: Revenues $ 568,246 $ - $ 568,246 Net income 67,513 7,427 74,940 Total assets at December 31, 1998 2,312,919 108,871 2,421,790 INDEPENDENT ACCOUNTANTS' REPORT Idaho Power Company Boise, Idaho We have reviewed the accompanying consolidated balance sheet and statement of capitalization of Idaho Power Company and subsidiaries as of September 30, 1999, and the related consolidated statements of income and comprehensive income for the three and nine month periods ended September 30, 1999 and 1998 and the consolidated statements of cash flows for the nine month periods ended September 30, 1999 and 1998. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet and statement of capitalization of Idaho Power Company and subsidiaries as of December 31, 1998, and the related consolidated statements of income, comprehensive income, retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated January 29, 1999, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet and statement of capitalization as of December 31, 1998 is fairly stated, in all material respects, in relation to the consolidated balance sheet and statement of capitalization from which it has been derived. DELOITTE & TOUCHE LLP Boise, Idaho October 29, 1999 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERTIONS In Management's Discussion and Analysis we explain the general financial condition and results of operations for IDACORP, Inc. and subsidiaries (IDACORP or the Company) and for Idaho Power Company and subsidiaries (IPC). IPC, an electric utility, is IDACORP's principal operating subsidiary, accounting for over 90 percent of IDACORP's assets, revenue and net income. Unless we indicate otherwise, this discussion explains the material changes in results of operations and the financial condition of both the Company and IPC. This discussion should be read in conjunction with the accompanying consolidated financial statements of both IDACORP and IPC. This discussion updates the discussion that we included in our Annual Report on Form 10-K for the year ended December 31, 1998. This discussion should be read in conjunction with the discussion in the annual report. We have reclassified our electricity trading activities from "Off- system sales" and "Purchased power" to "Energy trading activities - - net" on the Consolidated Statements of Income for all periods presented. This change was made to more clearly report the results of our utility operations and our energy trading activities. FORWARD-LOOKING INFORMATION: In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), we are hereby filing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of the Company and IPC in this quarterly report on Form 10-Q, in presentations, in response to questions or otherwise. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "anticipates", "believes", "estimates", "expects", "intends", "plans", "predicts", projects", "will likely result", "will continue", or similar expressions) are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions, and uncertainties and are qualified in their entirety by reference to, and are accompanied by, the following important factors, which are difficult to predict, contain uncertainties, are beyond our control and may cause actual results to differ materially from those contained in forward-looking statements: prevailing governmental policies and regulatory actions, including those of the FERC, the IPUC, the OPUC, and the PUCN, with respect to allowed rates of return, industry and rate structure, acquisition and disposal of assets and facilities, operations and construction of plant facilities, recovery of purchased power and other capital investments, and present or prospective wholesale and retail competition (including but not limited to retail wheeling and transmission costs); economic and geographic factors including political and economic risks; changes in and compliance with environmental and safety laws and policies; weather conditions; population growth rates and demographic patterns; competition for retail and wholesale customers; Year 2000 issues; pricing and transportation of commodities; market demand, including structural market changes; changes in tax rates or policies or in rates of inflation; changes in project costs; unanticipated changes in operating expenses and capital expenditures; capital market conditions; competition for new energy development opportunities; and legal and administrative proceedings (whether civil or criminal) and settlements that influence the business and profitability of the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of any such factor on the business, or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. RESULTS OF OPERATIONS: Earnings per Share and Book Value Earnings per share of common stock (basic and diluted) was $0.59 for the quarter ended September 30, 1999, the same as the amount reported for the same quarter of 1998. Year-to-date, earnings were $1.93 per share, $0.05 (2.7 percent) above last year. At September 30, 1999, the book value per share of IDACORP common stock was $19.92, compared to $19.41 at the same date in 1998. General Business Revenue Our general business revenue is dependent on many factors, including the number of customers we serve, the rates we charge, and weather conditions (temperature and precipitation) in our service territory. Compared to the same periods in 1998, the number of general business customers we served increased 2.9 percent for the second quarter and 3.0 percent year-to-date. This increase was due primarily to economic growth in our service territory. Our revenue per MWh decreased 10.7 percent for the quarter and 0.5 percent year-to-date, compared to 1998. Changes in revenue per MWh result primarily from the annual rate adjustments authorized by regulatory authorities. These adjustments are discussed below in "PCA" and "Regulatory Settlement." Dry weather conditions during the growing season contributed to increased sales of energy. MWh sales to irrigation customers increased 13.2 percent for the quarter and year-to date over 1998 amounts. Temperatures also affected sales during the quarter. Combined, heating degree-days and cooling degree-days, common measures used in the utility industry to analyze demand, were below 1998 levels by 23.7 percent for the quarter. Compared to 1998, the average kWh's sold per general business customer (excluding irrigation) decreased 3.1 percent for the quarter. The combination of these factors resulted in general business revenue decreases of $12.2 million (8.2 percent) for the quarter and increases of $13.8 million (3.6 percent) year-to-date compared to 1998. Off-System Sales Off-system sales, which consist primarily of long-term sales contracts and opportunity sales of surplus system energy, decreased by $55.5 million (74.4 percent) for the quarter and $76.1 million (46.9 percent) year-to-date. The decreased sales are primarily a result of lower market prices and less surplus system energy available for sale in 1999. Expenses Purchased power expenses decreased $51.8 million (55.8 percent) for the quarter and $64.4 million (44.1 pecent) year-to-date, due primarily to decreases in MWhs purchased of 49.3 percent for the quarter and 39.6 percent year-to-date, and to favorable market prices. The decreased quantities are due primarily to reductions in system requirements in 1999. Fuel expenses decreased $1.5 million (6.1 percent) for the quarter and increased $4.3 million (7.2 percent) year-to-date. The decrease for the quarter is due primarily to lower coal prices, offset by a 2.2 percent increase in MWhs generated at our coal fired plants. The year-to-date increase is due primarily to a 10.1 percent increase in MWhs generated, offset by lower coal prices. The PCA component of expenses decreased $13.4 million for the quarter and $12.5 million year-to-date. The PCA increases expense when actual power supply costs are below the costs forecasted in the annual PCA filing, and decreases expense when actual power supply costs are above the forecast. In the third quarter of 1999, actual power supply costs were above what had been forecast, resulting in a large PCA credit. The 1999 forecast used to set the 1999-2000 PCA rate adjustment anticipated better than normal streamflow conditions. Actual conditions have not been as favorable as forecasted and are discussed below in "Streamflow Conditions." We discuss the PCA in more detail below in "PCA." Other operating expenses increased $2.2 million (6.3 percent) for the quarter and $4.6 million (4.3 percent) year-to-date. The increase for the quarter is due primarily to increases in administration expenses and costs of generation at our coal-fired generating facilities, offset by a decrease in costs for electricity transmitted by others. The year-to-date increase is due primarily to increases in costs of generation at our coal- fired generating facilities. Other Other income increased for the quarter and year-to-date, due primarily to improved results from energy marketing activities. The increase for 1999 over 1998 was reduced due to a one-time demand side management accounting adjustment, made in the third quarter 1998, for carrying charges for the 1994-97 period. Other income for IDACORP was also decreased by costs incurred by new subsidiaries and other diversified business operations. Income taxes decreased for the quarter and increased year-to- date. These changes were due primarily to changes in net income before taxes, the impact of a tax settlement that reduced expenses in 1998, and changes in affordable housing tax credits. LIQUIDITY AND CAPITAL RESOURCES: Cash Flow For the nine months ended September 30, 1999, IDACORP generated $168.8 million in net cash from operations. After deducting for common stock dividends, net cash generation from operations provided approximately $116.4 million for our construction program and other capital requirements. Cash Expenditures We estimate that our total cash construction expenditures for 1999 will be approximately $105 million. This estimate is subject to revision in light of changing economic, regulatory, and environmental factors. During the first nine months of 1999, we spent approximately $73.1 million for construction. Our primary financial commitments and obligations are related to contracts and purchase orders associated with ongoing construction programs. To the extent required, we expect to finance these commitments and obligations by using both internally generated funds and externally financed capital. At September 30, 1999, our short-term borrowings totaled $11.6 million. Financing Program IDACORP has a $300.0 million shelf registration statement that can be used for the issuance of unsecured debt securities and preferred or common stock. At September 30, 1999, none had been issued. IPC has a $200.0 million shelf registration statement that can be used for both First Mortgage bonds (including Medium Term Notes) and Preferred Stock of which $83.0 million remains available at September 30, 1999. REGULATORY ISSUES: Power Cost Adjustment (PCA) IPC has a PCA mechanism that provides for annual adjustments to the rates we charge to our Idaho retail customers. These adjustments, which take effect annually on May 16, are based on forecasts of net power supply costs and the true-up of the prior year's forecast. The difference between the actual costs incurred and the forecasted costs is deferred, with interest, and trued-up in the next annual rate adjustment. Our May 16, 1999 rate adjustment reduced Idaho general business customer rates by 9.2 percent. The decrease was the result of projected above-average hydroelectric generating conditions and the true-up of the 1998-99 rate period. Overall, IPC's annual general business revenues are expected to decrease by $40.4 million during the 1999-2000 rate period. For the 1999 - 2000 rate year, actual power supply costs have been greater than forecast, due to actual hydroelectric generating conditions being less favorable than forecast. To account for these higher-than-expected costs, we have recorded a regulatory asset of $4.2 million as of September 30, 1999. Regulatory Settlement IPC has a settlement agreement with the IPUC that remains in effect through 1999. Under the terms of the settlement, when earnings in our Idaho jurisdiction exceed an 11.75 percent return on year-end common equity, we set aside 50 percent of the excess for the benefit of our Idaho retail customers. On April 7, 1999 we submitted our 1998 annual earnings sharing compliance filing to the IPUC. This filing indicated that there was almost $6.4 million in earnings before authorized deductions, or $3.3 million after authorized deductions, available for the benefit of our Idaho customers. On June 16, 1999 IPC filed a supplement to the April 7, 1999 annual earnings sharing compliance filing requesting that the $3.3 million of remaining 1997 and 1998 revenue sharing be refunded to its customers. On July 19, 1999 the IPUC issued Order No. 28099 in Case IPC-E-99-2, refunding $0.7 million to special contract and large customers. The remaining balance of $2.6 million has been deferred with interest until May 2000. For the nine month period ending September 30, 1999, we have set aside $4.5 million for the benefit of our Idaho retail customers. OTHER MATTERS: Energy Trading Energy trading activity is reported on a fair value basis with gains and losses recorded in other income. Inherent in the energy trading business are risks related to market movements and the creditworthiness of counterparties. When buying and selling energy, the high volatility of prices can have a significant impact on profitability if not managed. Also, counterparty creditworthiness is key to ensuring that transactions entered into withstand dramatic market fluctuations. To mitigate these risks while implementing our business strategy, the Board of Directors gave approval for executive management to form a Risk Management Committee, composed of officers of IDACORP and subsidiaries, to oversee a risk management program. The program is intended to minimize fluctuations in earnings while managing the volatility in energy prices. Embedded within the Risk Management policy and procedures is a credit policy requiring a credit evaluation of all counterparties. The objective of our risk management program is to mitigate commodity price risk, credit risk, and other risks related to the energy trading business. Streamflow Conditions We monitor the effect of streamflow conditions on Brownlee Reservoir, the water source for our three Hells Canyon hydroelectric projects. In a typical year, these three projects combine to produce about half of our generated electricity. Inflows into Brownlee result from a combination of precipitation, storage, and ground water conditions. Inflows into Brownlee were 7.9 MAF for the 1998-9 water year, compared to the 70-year median of 4.9 MAF and 1998's 8.8 MAF. Year 2000 Many existing computer systems use only two digits to identify a year in the date field. These programs were designed and developed without considering the impact of the upcoming change in the century. Unless proper modifications are made, the program logic in many of these systems will start to produce erroneous results because, among other things, the systems will read the date "01/01/00" as being January 1 of the year 1900 or another incorrect date. In addition, the systems may fail to detect that the year 2000 is a leap year. Similar problems could arise prior to the year 2000 as dates in the next millennium are entered into systems that are not Year 2000 compliant. We recognize the Year 2000 problem as a serious threat to the Company and our customers. Our Year 2000 effort has been underway for over two years and is being addressed at the highest levels within the Company. IPC's Vice President of Corporate Services is responsible for coordinating the corporate effort. IPC vice presidents and other IDACORP subsidiary presidents are responsible for addressing the problem within their respective business units and each has assigned a Year 2000 Project Leader to execute the project plan. Each subsidiary president is responsible for addressing the problem within their subsidiary in coordination with the corporate effort. In addition, we have a full-time Year 2000 Project Manger to direct the project. Additional staff has been committed to complete the conversion and implementation needed to bring non-compliant items into compliance. At its peak, there were over 20 full-time employees devoted to the project with dozens of others involved to varying degrees. Third parties have completed technical and legal audits of our plan. With respect to these audits, we have implemented their recommendations as recommended by the Y2K Steering Committee. The legal audit recommendations are also being implemented. As of September 1999 we consider ourselves ready for the Year 2000. This means that all critical systems are believed to be capable of handling the century rollover and that we will be able to continue servicing our customers as usual. Also, we have identified all of the less critical systems and contingency and/or repair plans are in place for dealing with the change of century. We are following a detailed project plan. The methodology is modeled after those used by some of the top companies in the world and has been adapted to meet our unique requirements. This process includes all the phases and steps commonly found in such plans, including the (i) identification and analysis of critical systems, key manufacturers, service providers, embedded systems and generation plants (parts of which are owned by IPC but are operated by other electric utilities), (ii) remediation and testing, (iii) education and awareness and (iv) contingency planning. We have identified the critical systems that must be Year 2000 compliant in order to continue operations. Each of these is now Year 2000 ready. The largest of these critical systems and their status regarding compliance are described below: System Description Status Business The business systems include the PeopleSoft and Systems financial and administrative Passport are functions common to most both compliant companies. Business systems vendor include accounts payable, packages. general ledger, accounts Testing to receivable, labor entry, verify inventory, purchasing, cash compliance is management, budgeting, asset complete. management, payroll, and financial reporting. Customer This system is used to bill In-house Information customers, log calls from system has System customers and create service or been repaired. work requests and track them Testing to through completion, among other verify things. At this time, the compliance is Company uses an in-house complete. developed, mainframe-based Customer Information System to accomplish these tasks. Energy The most critical function the The packages Management Company offers is the delivery comprising the System of electricity from the source EMS are fully to the consumer. This must be compliant with done with minimal interruption the latest in the midst of high demand, releases. weather anomalies and equipment Testing and failures. To accomplish this, rollout are the Company relies on a server- now complete. based energy management system provided by Landis & Gyr. This system monitors and directs the delivery of electricity throughout the Company's service area. Metering The Company relies on several In-house code Systems processes for metering has been electricity usage, including repaired and some hand-held devices with tested. embedded chips. It is critical Vendor for metering systems to operate packages have without interruption so as not been upgraded. to jeopardize the Company's Testing of revenue stream. critical components is complete. Embedded There is a category of systems Testing is Systems on which the Company is highly complete. reliant called embedded systems. These are typically computer chips that provide for automated operations within some device other than a computer such as a relay or a security system. The Company is highly reliant on these systems throughout its generation and delivery systems to monitor and allow manual or automatic adjustments to the desired devices. Those devices with chips that were not Year 2000 compliant, where the chip affected the application of the device, were replaced. Other Systems The Company also relies on a In various number of other important stages of systems to support engineering, repair and human resources, safety and testing. regulatory compliance, etc. Regarding third parties, the plan methodology has required us to identify those third parties with which we have a material relationship. We have identified as material (1) our ownership interest in thermal generating facilities which are operated and maintained by third party electric utilities; (2) our fuel suppliers for those thermal generating facilities; and (3) our telecommunication providers. In addition, we have identified 93 key manufacturers that provide materials and supplies to us. With respect to the thermal plants, fuel suppliers and telecommunication providers, members of the Year 2000 team have met periodically with the third parties to assess their status and are satisfied with their efforts. Our survey of the 93 key manufacturers has shown them to be Year 2000-ready to our satisfaction. Finally, we are connected to an electric grid that connects utilities throughout the western portion of North America. This interconnection is essential to the reliability and operational integrity of each connected utility. This also means that failure of one electric utility in the interconnected grid could cause the failure of others. In the context of the Year 2000 problem, this interconnectivity compounds the challenge faced by the electric utility industry. Our Company could do a very thorough and effective job of becoming Year 2000 compliant and yet encounter difficulties supplying services and energy because another utility in the interconnected grid failed to achieve Year 2000 compliance. In this regard, we are working closely with other electric industry organizations concerned with reliability issues and technical collaboration. As part of this collaboration we participated and successfully completed our roles in nationwide Y2K drills for electric utilities, held in April and September 1999. Our estimate of the cost of the Year 2000 plan remains at approximately $5.3 million. This amount includes $3.6 million of costs already incurred and estimated costs through the year 2000. This level of expenditure is not expected to have any material effect on our operations or our financial position. Funds to cover Year 2000 costs in 1999 have been budgeted by business entity and within the Information Services Department with approximately ten percent of the Information Services budget used for remediation. No information services department projects have been deferred due to the Company's year 2000 efforts. The Year 2000 issue poses risks to our internal operations due to the potential inability to carry on our business activities and from external sources due to the potential impact on the ability of our customers to continue their business activities. The major applications that pose the greatest risks internally are those systems, embedded or otherwise, which impact the generation, transmission and distribution of energy and the metering and billing systems. The potential risks related to these systems are electric service interruptions to customers and associated reduction in loads and revenue and interrupted data gathering and billing and the resultant delay in receipt of revenues. All of this would negatively impact our relationship with our customers, which might increase the likelihood of losing customers in a restructured industry. Externally, those customers that inadequately prepare for the Year 2000 issue may be unable to continue their business activities. This would affect us in a number of ways. Our loads and revenue would be reduced because of the lost load from discontinued business activities, and customers who lose jobs because of discontinued business activities may face difficulties in paying their power bills. The impact of this on us is dependent upon the number and size of those businesses that are forced to discontinue business activities because of the Year 2000 issue. The final phase of our Year 2000 Methodology is contingency planning. The contingency planning focused on the identification of internal risks beginning with a listing of the Company's core business processes, prioritized in order of importance and the identification of key sub-processes under each process for which it was determined that a contingency plan might be necessary. This methodology was adapted, in part, from the Company's normal business practice where the Company maintains and periodically initiates various contingency plans to maintain and restore its energy services during emergency circumstances, some of which could arise from Year 2000 related problems. In addition, the Company is coordinating its Year 2000 readiness efforts, including contingency planning with various trade associations and industry groups. Contingency plans were developed for a number of critical infrastructure areas including, but not limited to communications, including voice, data and corporate; generation; distribution; transmission; substations; call center, metering and billing. The Company believes that its contingency plans will adequately handle problem(s) which may develop in any of our critical infrastructure areas. The Company will continue to review its contingency plan to identify and further enhancements or updates related to Year 2000. New Accounting Pronouncement In June 1998 the FASB issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative financial instruments and other similar instruments and for hedging activities. In June 1999 the FASB issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Standard No. 133" which defers the effective date of SFAS No. 133 until fiscal years beginning after June 15, 2000. We are reviewing SFAS No. 133 to determine its effects on our financial position and results of operations. We expect to adopt this statement by January 1, 2001. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit File Number As Exhibit *2 333-48031 2 Agreement and Plan of Exchange between IDACORP, Inc., and IPC dated as of February 2, 1998. *3(a) 33-00440 4(a)(xiii) Restated Articles of Incorporation of IPC as filed with the Secretary of State of Idaho on June 30, 1989. *3(a)(i) 33-65720 4(a)(ii) Statement of Resolution Establishing Terms of Flexible Auction Series A, Serial Preferred Stock, Without Par Value (cumulative stated value of $100,000 per share) of IPC, as filed with the Secretary of State of Idaho on November 5, 1991. *3(a)(ii) 33-65720 4(a)(iii) Statement of Resolution Establishing Terms of 7.07% Serial Preferred Stock, Without Par Value (cumulative stated value of $100 per share) of IPC, as filed with the Secretary of State of Idaho on June 30, 1993. *3(b) 33-41166 4(b) Waiver resolution to Restated Articles of Incorporation of IPC adopted by Shareholders on May 1, 1991. 3(c) By-laws of IPC amended on September 9, 1999, and presently in effect. *3(d) 33-56071 3(d) Articles of Share Exchange of IDACORP, Inc. as filed with the Secretary of State of Idaho on September 29, 1998. *3(e) 333-64737 3.1 Articles of Incorporation of IDACORP, Inc. *3(f) 333-64737 3.2 Articles of Amendment to Articles of Incorporation of IDACORP, Inc. as filed with the Secretary of State of Idaho on March 9, 1998. *3(g) 333-00139 3(b) Articles of Amendment to Articles of Incorporation of IDACORP, Inc. creating A Series Preferred Stock, Without Par Value, as filed with the Secretary of State of Idaho on September 17, 1998 *3(h) 1-3198 3(h) Amended By-laws of IDACORP, Form 10-Q Inc. as of July 8, 1999. for 6/30/99 *4(a)(i) 2-3413 B-2 Mortgage and Deed of Trust, dated as of October 1, 1937, between IPC and Bankers Trust Company and R. G. Page, as Trustees. *4(a)(ii) IPC Supplemental Indentures to Mortgage and Deed of Trust: 1-MD B-2-a First July 1, 1939 2-5395 7-a-3 Second November 15, 1943 2-7237 7-a-4 Third February 1, 1947 2-7502 7-a-5 Fourth May 1, 1948 2-8398 7-a-6 Fifth November 1, 1949 2-8973 7-a-7 Sixth October 1, 1951 2-12941 2-C-8 Seventh January 1, 1957 2-13688 4-J Eighth July 15, 1957 2-13689 4-K Ninth November 15, 1957 2-14245 4-L Tenth April 1, 1958 2-14366 2-L Eleventh October 15, 1958 2-14935 4-N Twelfth May 15, 1959 2-18976 4-O Thirteenth November 15, 1960 2-18977 4-Q Fourteenth November 1, 1961 2-22988 4-B-16 Fifteenth September 15, 1964 2-24578 4-B-17 Sixteenth April 1, 1966 2-25479 4-B-18 Seventeenth October 1, 1966 2-45260 2(c) Eighteenth September 1, 1972 2-49854 2(c) Nineteenth January 15, 1974 2-51722 2(c)(i) Twentieth August 1, 1974 2-51722 2(c)(ii) Twenty-first October 15, 1974 2-57374 2(c) Twenty-second November 15, 1976 2-62035 2(c) Twenty-third August 15, 1978 33-34222 4(d)(iii) Twenty-fourth September 1, 1979 33-34222 4(d)(iv) Twenty-fifth November 1, 1981 33-34222 4(d)(v) Twenty-sixth May 1, 1982 33-34222 4(d)(vi) Twenty-seventh May 1, 1986 33-00440 4(c)(iv) Twenty-eighth June 30, 1989 33-34222 4(d)(vii) Twenty-ninth January 1, 1990 33-65720 4(d)(iii) Thirtieth January 1, 1991 33-65720 4(d)(iv) Thirty-first August 15, 1991 33-65720 4(d)(v) Thirty-second March 15, 1992 33-65720 4(d)(vi) Thirty-third April 16, 1993 1-3198 4 Thirty-fourth December 1, 1993 Form 8-K Dated 12/17/93 *4(b) 1-3198 4(b) Agreement of IPC to furnish Form 10-Q certain debt instruments. for 6/30/99 *4(c) 33-65720 4(e) Rights Agreement dated January 11, 1990, between IPC and First Chicago Trust Company of New York, as Rights Agent (The Bank of New York, successor Rights Agent). *4(c)(i) 1-3198 4(e)(i) Amendment dated as of Form 10-K January 30, 1998, related to for 1997 agreement filed as Exhibit 4(c). *4(d) 1-14465 4 Rights Agreement, dated as Form 8-K of September 10, 1998, dated between IDACORP, Inc. and September 15, the Bank of New York as 1998 Rights Agent. *10(a)1 1-3198 10(n)(i) The Revised Security Plan Form 10-K for Senior Management for 1994 Employees - a non-qualified, deferred compensation plan effective August 1, 1996. 1 Compensatory plan *10(b)1 1-3198 10(n)(ii) The Executive Annual Form 10-K Incentive Plan for senior for 1994 management employees of IPC effective January 1, 1995. *10(c)1 1-3198 10(n)(iii) The 1994 Restricted Stock Form 10-K Plan for officers and key for 1994 executives of IDACORP, Inc. and IPC effective July 1, 1994. *10(d)1 1-14465 10(h)(iv) The Revised Security Plan 1-3198 for Board of Directors - a Form 10-K non-qualified, deferred for 1998 compensation plan effective August 1, 1996, revised March 2, 1999. *10(e)1 1-3198 10(e) IDACORP, Inc. Non-Employee Form 10-Q Directors Stock Compensation for 6/30/99 Plan as of May 17, 1999. *10(f) 1-3198 10(y) Executive Employment Form 10-K Agreement dated November 20, for 1997 1996 between IPC and Richard R. Riazzi. *10(g) 1-3198 10(g) Executive Employment Form 10-Q Agreement dated April 12, for 6/30/99 1999 between IPC and Marlene Williams. 10(h) Form of Change in Control Agreement between IDACORP, Inc. and Jan B. Packwood, J. LaMont Keen, James C. Miller, Richard Riazzi, Darrel T. Anderson, Bryan Kearney, Cliff N. Olson, Robert W. Stahman and Marlene K. Williams. 12 Statement Re: Computation of Ratio of Earnings to Fixed Charges. (IDACORP, Inc.) 12(a) Statement Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IDACORP, Inc.) 12(b) Statement Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.) 12(c) Statement Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.) 12(d) Statement Re: Computation of Ratio of Earnings to Fixed Charges. (IPC) 12(e) Statement Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IPC) 12(f) Statement Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC) 12(g) Statement Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC). 1 Compensatory plan 15 Letter Re: Unaudited Interim Financial Information. 27(a) Financial Data Schedule for IDACORP, Inc. 27(b) Financial Data Schedule for IPC. (b) Reports on Form 8-K. No reports on Form 8-K were filed during the three-month period ended September 30, 1999. * Previously filed and Incorporated Herein by Reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IDACORP, Inc. (Registrant) Date November 5, 1999 By: /s/ J LaMont Keen J LaMont Keen Senior Vice President Administration and Chief Financial Officer (Principal Financial Officer) Date November 5, 1999 By: /s/ Darrel T Anderson Darrel T Anderson Vice President Finance and Treasurer (Principal Accounting Officer) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IDAHO POWER COMPANY (Registrant) Date November 5, 1999 By: /s/ J LaMont Keen J LaMont Keen Senior Vice President Administration and Chief Financial Officer (Principal Financial Officer) Date November 5, 1999 By: /s/ Darrel T Anderson Darrel T Anderson Vice President Finance and Treasurer (Principal Accounting Officer) EX-3 2 Exhibit 3(c) Amended Bylaws of Idaho Power Company September 9, 1999 Article I Office Section 1.1. Principal Office. The Company shall maintain its principal office in Boise, Idaho. Section 1.2. Registered Office. The Company shall maintain a registered office in the State of Idaho, as required by the Idaho Business Corporation Act (the "Act"). Article II Shareholders Section 2. 1. Annual Meeting of Shareholders. An annual meeting of the shareholders shall be held on the first Wednesday of May or such other time as may be designated by the Board of Directors. Section 2.2. Special Meetings. A special meeting of the shareholders may be called at any time by the President, a majority of the Board of Directors or the Chairman of the Board. A special meeting of the shareholders also may be called by the holders of not less than twenty percent (20%) of all the shares entitled to vote on any issue proposed to be considered at the proposed special meeting if such holders sign, date and deliver to the Secretary of the Company one (1) or more written demands for the meeting describing the purpose or purposes for which it is to be held. Upon receipt of one (1) or more written demands for such proposed special meeting by the holders of not less than twenty percent (20%) of all the shares entitled to vote on any issue proposed to be considered at the proposed special meeting, the Secretary of the Company shall be responsible for determining whether such demand or demands conform to the requirements of the Act, the Restated Articles of Incorporation and these Bylaws. After making an affirmative determination, the Secretary shall prepare, sign and deliver the notices required for such meeting. The shareholders' demand may suggest a time and place for the meeting but the Board of Directors shall, by resolution, determine the time and place of any such meeting. Section 2.3. Place of Meetings. All meetings of the shareholders shall be held at the Company's principal office or at such other place as shall be designated in the notice of such meetings. Section 2.4. Notice of Shareholders' Meeting. Written notice of the time and place of a meeting of the shareholders shall be mailed to each shareholder entitled to receive notice under the Act: (a) not less than 10 days nor more than 60 days prior to the date of an annual or special meeting of the shareholders; or (b) if applicable, within 30 days after the date on which a shareholder demand satisfying the requirements of Section 2.2 is delivered to the Secretary of the Company. Every notice of an annual or special meeting of shareholders shall be deemed duly served when the notice is deposited in the United States mail or with a private overnight courier service, with postage prepaid and addressed to the shareholder at the shareholder's address as it appears on the Company's records or if a shareholder shall have filed with the Secretary of the Company a written request that the notice be sent to some other address, then to such other address. If an annual or special shareholders' meeting is adjourned to a different date, time or place, notice need not be given of the new date, time or place if such new date, time or place is announced at the meeting before adjournment. In any event, if a new record date for the adjourned meeting is or must be determined, notice of the adjourned meeting shall be given to persons who are shareholders as of the new record date. Section 2.5. Waiver of Notice. Any shareholder may waive any required notice of the time, place, and purpose of any meeting of the shareholders by telegram, telecopy, confirmed facsimile, or other writing, either before or after such meeting has been held. Such waiver must be signed by the shareholder entitled to the notice and be delivered to the Company for inclusion in the minutes or filing with the corporate records. The attendance of any shareholder at any shareholders' meeting shall constitute a waiver of. (a) any objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and (b) any objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented. Section 2.6. Quorum of Shareholders. Unless the Restated Articles of Incorporation or the Act provide otherwise, a majority of the outstanding shares entitled to vote on a particular matter at a meeting shall constitute a quorum for purposes of action on that matter at the meeting. A share may be represented at a meeting by the record holder thereof in person or by proxy. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting. Whether or not a quorum is present, the meeting may be adjourned by a majority vote of the shareholders present or represented. At any adjourned meeting where a quorum is present, any business may be transacted that could have been transacted at the meeting originally called. Section 2.7. Record Date for Determination of Shareholders. The Board of Directors shall establish a record date for determining shareholders entitled to notice of a shareholders' meeting, to vote or to take any other action, which date shall not be more than 70 days before the meeting or action requiring a determination of shareholders. A determination of shareholders is effective for any adjournment of the meeting, unless a new record date is or must be set. Section 2.8. Shareholders' List for Meeting. The officer or agent in charge of the stock transfer books for shares of the Company shall prepare an alphabetical list of the names of all shareholders who are entitled to notice of a shareholders' meeting. The list shall be arranged by voting group, and within each voting group by class or series of shares, and show the address of and number of shares held by each shareholder. The list shall be made available for inspection by any shareholder, at least 10 days before the meeting for which the list was prepared and continuing through the meeting, at the Company's principal office or at a place identified in the meeting notice in the city where the meeting will be held. The Company also shall make the list available at the shareholders' meeting, and any shareholder is entitled to inspect the list at any time during the meeting or any adjournment. Section 2.9. Transaction of Business at Shareholders' Meetings. 2.9.1 Transaction of Business at Annual Meeting. Business transacted at an annual meeting of shareholders may include all such business as may properly come before the meeting. Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders: (a) pursuant to the Company's notice of meeting; (b) by or at the direction of the Board of Directors; or (c) by any shareholder who was a shareholder of record at the time of giving of notice of the meeting, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.9. 1. For nominations or other business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Company and such other business must otherwise be a proper matter for shareholder action. To be timely, a shareholder's notice shall be delivered to the Secretary at the principal executive offices of the Company not earlier than the close of business on the 90th day nor later than the close of business on the 60th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a shareholder's notice as described above. Such shareholder's notice shall set forth: (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a- 11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such shareholder, as they appear, on the Company's books, and of such beneficial owner and (ii) the class and number of shares of the Company which are owned beneficially and of record by such shareholder and such beneficial owner. 2.9.2 Transaction of Business at Special Meeting. Business transacted at a special meeting of the shareholders shall be limited to the purposes set forth in the notice of the special meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Company's notice of meeting: (a) by or at the direction of the Board of Directors; or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any shareholder of the Company who is a shareholder of record at the time of giving of notice of the meeting, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.9.2. In the event the Company calls a special meeting of shareholders for the purpose of electing one or more directors to the Board of Directors, any such shareholder may nominate a person or persons, as the case may be, for election to such position or positions as specified in the Company's notice of meeting, if the shareholder's notice required by this Section 2.9.2 shall be delivered to the Secretary at the principal executive offices of the Company not earlier than the close of business on the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a shareholder's notice as described above. Such shareholder's notice shall set forth: (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act and Rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (i) the name and address of such shareholder, as they appear on the Company's books, and of such beneficial owner and (ii) the class and number of shares of the Company which are owned beneficially and of record by such shareholder and such beneficial owner. 2.9.3 General. Only such persons who are nominated in accordance with the procedures set forth in this Section 2.9 shall be eligible to serve as directors and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.9. The chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.9 and, if any proposed nomination or business is not in compliance with this Section 2.9, to declare that such defective proposal or nomination shall be disregarded, unless otherwise provided by any applicable law. For purposes of this Section 2.9, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. Notwithstanding the foregoing provisions of this Section 2.9, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.9. Nothing in this Section 2.9 shall be deemed to affect any rights of. (a) the shareholders to request inclusion of proposals in the Company's proxy statement pursuant to Rule 14a-8 under the Exchange Act; or (b) the holders of any series of Preferred Stock to elect directors under specified circumstances. Section 2. 10. Action by Written Consent. Any action required or permitted by the Act to be taken at an annual or special meeting of shareholders may be taken without a meeting, without prior notice, and without a vote, if consents in writing, setting forth the action so taken, are signed by the holders of all of the outstanding shares of stock entitled to vote on the matter. Section 2.11. Presiding Officer. The Chairman of the Board shall act as chairman of all meetings of the shareholders. In the absence of the Chairman of the Board, the President, or in his or her absence, any Vice President designated by the Board of Directors shall act as the chairman of the meeting. Section 2.12. Procedure. At each meeting of shareholders, the chairman of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the shareholders will vote at the meeting and shall determine the order of business and all other matters of procedure. Except to the extent inconsistent with any such rules and regulations as adopted by the Board of Directors, the chairman of the meeting may establish rules, which need not be in writing, to maintain order and safety and for the conduct of the meeting. Without limiting the foregoing, the chairman of the meeting may: (a) determine and declare to the meeting that any business is not properly before the meeting and therefore shall not be considered; (b) restrict attendance at any time to bona fide shareholders of record and their proxies and other persons in attendance at the invitation of the chairman of the meeting; (c) restrict dissemination of solicitation materials and use of audio or visual recording devices at the meeting; (d) , adjourn the meeting without a vote of the shareholders, whether or not there is a quorum present; and (e) make rules governing speeches and debate, including time limits and access to microphones. The chairman of the meeting acts in his or her absolute discretion and his or her rulings are not subject to appeal. Article III Board of Directors Section 3. L Authority. The Board of Directors shall have the ultimate authority over the conduct and management of the business affairs of the Company. Section 3.2. Number. The number of directors of the Company shall be not less than nine (9) nor more than 15, as determined from time to time by the vote of a majority of the Board of Directors. Unless otherwise provided by the Act, the number of directors may be increased or decreased, beyond the limits set forth above, only by an amendment to these Bylaws. To the extent permitted by the Act, any newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the then existing classes of directors so as to maintain such classes as nearly equal in number as possible. No change in the number of directors shall shorten the term of any director then in office. Section 3.3. Term. Each director shall hold office from the date of his or her election and qualification until his or her successor shall have been duly elected and qualified or until his or her earlier removal, resignation, death or incapacity. Section 3.4. Eligibility for Elections. No person who will be 70 years of age or more on or before an annual meeting shall be nominated to the Board of Directors, and any directors who reach the age of 70 shall be automatically retired from the Board of Directors. Section 3.5. Regular Meetings of the Board. Regular meetings of the Board of Directors may be held at times and places agreed on by a majority of the directors at any meeting of the Board of Directors, and such regular meetings may be held at such times and places without any further notice of the date, time, place or purposes of such regular meetings. Section 3.6. Special Meetings of the Board. Special meetings of the Board of Directors may be called: (a) by, or at the request of, the Chairman of the Board; or (b) by the Secretary of the Company at the written request of a majority of the directors then in office. Special meetings of the Board of Directors may be called on not less than 12 hours notice to each director, given orally or in writing, either personally, by telephone (including by message or by recording device), by facsimile transmission, by telegram or by telex, or on not less than three (3) calendar days' notice to each director given by mail. Notice of the special meeting of the Board of Directors shall specify the date, time and place of the meeting. Actions taken at any such meeting shall not be invalidated because of lack of notice if notice is waived as provided in Section 3.7. Section 3.7. Waiver of Notice. A director may waive any required notice before or after the date and time stated in the notice by written waiver signed by the director entitled to the notice and filed with the minutes or corporate records. In addition, a director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless the director at the beginning of the meeting, or promptly upon the director's arrival, objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting. Section 3.8. Participation by Telecommunication. Any director may participate in any meeting of the Board of Directors through the use of any means of communication by which all directors participating in the meeting may simultaneously hear each other during the meeting. A director participating in a meeting by this means shall be deemed to be present in person at the meeting. Section 3.9. Quorum of Directors. A majority of the directors in office immediately before the meeting begins shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. Section 3. 10. Action. If a quorum is present when the vote is taken, the Board of Directors shall take actions pursuant to resolutions adopted by the affirmative vote of. (a) a majority of the directors present at the meeting of the Board of Directors; or (b) such greater number of the directors as may be required by the Restated Articles of Incorporation, these Bylaws or the Act. Section 3.11. Action by Unanimous Written Consent. Any action required or permitted to be taken at a Board of Directors' meeting may be taken without a meeting if the action is taken by all members of the Board of Directors. The action shall be evidenced by one (1) or more written consents describing the action taken, signed by each director, and included in the minutes or filed with the corporate records reflecting the action taken. Section 3.12. Selection of Chairman of the Board and Officers. The Chairman of the Board shall be selected by and from the members of the Board of Directors. He or she shall conduct all meetings of the Board of Directors and shall perform all duties incident thereto. The Board of Directors shall also select a President, a Vice President, a Secretary and a Treasurer and such additional Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers and agents as the Board of Directors from time to time may deem advisable. If the Board of Directors wishes it may also elect as an officer of the Company the Chairman of the Board. Section 3.13. Powers and Duties of Officers and Agents. The powers and duties of the officers and agents shall be determined by the Board of Directors and these Bylaws. Section 3.14. Delegation of Powers. For any reason deemed sufficient by the Board of Directors, whether occasioned by absence or otherwise, the Board may delegate all or any of the powers and duties of any officer to any other officer or director, but no officer or director shall execute, verify or acknowledge any instrument in more than one capacity unless specifically authorized by the Board of Directors. Section 3.15. Appointment of Executive Committee. At the same meeting at which the Board of Directors selects the Chairman of the Board, the Board of Directors shall appoint an Executive Committee consisting of two (2) or more members, who shall serve at the pleasure of the Board of Directors. Such appointments shall be made by a majority of all the directors in office when the action is taken. Unless otherwise provided by the Act or further limited by a resolution of the Board of Directors, the Executive Committee may exercise all of the powers of the Board of Directors. Section 3.16. Power to Appoint Additional Committees of the Board. The Board of Directors shall have the power to designate, by resolution, one (1) or more additional committees and appoint members of the Board of Directors to serve on them. To the extent provided in such resolution, such committees may manage the business and affairs of the Company, unless otherwise provided by the Act. Each committee shall have two (2) or more members, who shall serve at the pleasure of the Board of Directors. A majority of the members of any committee of the Board of Directors will constitute a quorum for any committee action. Section 3.17. Compensation. The Board of Directors may, by resolution, authorize the payment to directors of compensation for the performance of their duties. No such payment shall preclude any director from serving the Company in any other capacity and receiving compensation therefor. The Board of Directors may also, by resolution, authorize the reimbursement of expenses incurred by directors in the performance of their duties. Section 3.18. Conflicting Interest Transaction. Any conflicting interest transaction shall he governed by Section 30-1-860 through 30-1-863 of the Act. Article IV Officers Section 4. 1. General. The officers of the Company shall consist of a President, a Vice President, a Secretary, a Treasurer and such additional Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers and agents as the Board of Directors from time to time may deem advisable. If the Board of Directors wishes, it may also elect as an officer of the Company the Chairman of the Board. Each such officer shall hold office for such term, if any, as may be established by the Board of Directors or set forth in an employment agreement, if any, or until his or her successor shall have been duly elected and qualified or until his or her earlier resignation, retirement, removal from office, incapacity or death. The Board of Directors may remove any officer or agent at any time, with or without cause, unless otherwise provided by the Act or the Restated Articles of Incorporation. One person may hold two or more offices, except the offices of President and Secretary. Section 4.2. President. The President shall have general and active management of the business of the Company and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall have the general powers and duties of supervision and management usually vested in the office of president of a corporation. Section 4.3. Vice Presidents. Each Vice President shall serve under the direction of the President and shall perform such other duties as the Board of Directors shall from time to time direct. Section 4.4. Secretary. The Secretary of the Company shall serve under the direction of the President and shall perform such other duties as the Board of Directors shall from time to time direct, unless otherwise provided by these Bylaws or determined by the Board of Directors. The Secretary shall be responsible for preparing minutes of the directors' and shareholders' meetings and for authenticating records of the Company. The Secretary shall safely keep in his or her custody the seal of the Company and shall have authority to affix the same to all instruments where its use is required. The Secretary shall give all notices required by the Act, these Bylaws or any resolution of the Board of Directors. Section 4.5. Treasurer The Treasurer shall serve under the direction of the President and shall perform such other duties as the Board of Directors shall from time to time direct. The Treasurer shall have custody of all corporate funds and securities and shall keep in books belonging to the Company full and accurate accounts of all receipts and disbursements. The Treasurer shall deposit all monies, securities and other valuable effects in the name of the Company in such depositories as may be designated for that purpose by the Board of Directors and shall disburse the funds of the Company as may be ordered by the Board of Directors. The Treasurer shall upon request report to the Board of Directors on the financial condition of the Company. Section 4.6. Assistant Secretary and Assistant Treasurer. The Assistant Secretary, in the absence or disability of the Secretary, shall perform the duties and exercise the powers of the Secretary. The Assistant Treasurer, in the absence or disability of the Treasurer, shall perform the duties and exercise the powers of the Treasurer. Article V Stock and Transfers Section5.1. Certificates for Shares. Subject to the provisions of Section 5.2, every shareholder shall be entitled to a certificate of the shares to which the shareholder has subscribed, and each certificate shall be signed, either manually or by facsimile, by any two (2) of the following: the Chairman of the Board (if he or she is an officer), the President, the Treasurer and the Secretary. Such certificate may bear the seal of the Company or a facsimile thereof. Each certificate shall state the name of the Company, the number and class of shares and the designation of the series, if any, that the certificate represents. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if such person or entity were such officer, transfer agent or registrar at the date of issue. Section 5.2. Shares Without Certificates. The Company shall have the power to authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization shall not affect shares already represented by certificates until they are surrendered to the Company. Within, a reasonable time after the issue or transfer of shares without certificates, the Company shall send the shareholder a written statement of the information required on certificates by the Act. Section 5.3. Transferable Only on Books of the Company. Shares of the capital stock of the Company shall be transferred on the books of the Company only by the holder of the shares in person or by an attorney lawfully appointed in writing and upon surrender of the certificates, if any, for the shares. A record shall be made of every such transfer and issue. Whenever any transfer is made for collateral security and not absolutely, the fact shall be so expressed in the entry of such transfer. Section 5.4. Stock Ledger. The Company shall maintain a stock ledger that contains the name and address of each shareholder and the number of shares of each class of the capital stock that the shareholder holds. The stock ledger may be in written form or in any other form that can be converted within a reasonable time into written form for visual inspection. Section 5.5. Registered Shareholders. The Company shall have the right to treat the registered holder of any share of its capital stock as the absolute owner of such share and shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not the Company shall have express or other notice thereof, unless otherwise required by any applicable law. Article VI Indemnification Section 6. 1. Defined Terms. Capitalized terms used in this Article VI that are defined in Section 30-1-850 of the Act shall have the meaning given to such terms under Section 30-1-850 of the Act. Section 6.2. Insurance. The Company shall have the power to purchase and maintain insurance, in such amounts as the Board of Directors may deem appropriate, on behalf of any person who is a Director, Officer, employee or agent against Liability and Expenses in connection with any Proceeding, to the extent permitted under any applicable law. Section 6.3. Agreements. The Company may enter into an indemnification agreement with any Director, Officer, employee or agent, to the extent permitted under any applicable law. Section 6.4. Amendments. Any amendment or repeal of this Article VI shall not be retroactive in effect. Section 6.5. Severability. In case any provision in this Article VI shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances. Article V11 Amendment of Bylaws Section 7. 1. Amendment by the Board of Directors. These Bylaws may be amended, altered, changed, added to, repealed or substituted by the affirmative vote of a majority of the Board of Directors, unless the Restated Articles of Incorporation, these Bylaws or the Act provide otherwise. Section 7.2. Amendment by the Shareholders. Subject to the provisions of Section 7.3, these Bylaws may be amended, altered, changed, added to, repealed or substituted by the affirmative vote of a majority of all shares entitled to vote thereon, if notice of the proposed amendment, alteration, change, addition, repeal or substitution is contained in the notice of the meeting. Section 7.3. Amendment of Certain Provisions. Notwithstanding any other provision of these Bylaws, (i) any amendment, alteration, change, addition, repeal or substitution of this Section 7.3, Section 2.9 or Article III of these Bylaws by the shareholders shall require the affirmative vote of two-thirds of all shares entitled to vote thereon; and (ii) no change of the date for the annual meeting of the shareholders shall be made by the shareholders within the 30-day period preceding the date designated for the annual meeting pursuant to Section 2. 1, unless consented to in writing, as provided in Section 2. 10, or approved at any meeting of the shareholders by a majority of all shares entitled to vote thereon. EX-10 3 Exhibit 10(h) IDACORP, Inc. has Change In Control Agreements with each of the following: Jan B. Packwood - President and Chief Executive Officer; J. LaMont Keen - Senior Vice President-Administration and Chief Financial Officer; James C. Miller - Senior Vice President-Delivery; Richard Riazzi - Senior Vice President- Generation and Marketing; Darrel T. Anderson - Vice President- Finance and Treasurer; Bryan Kearney - Vice President and Chief Information Officer; Cliff N. Olson - Vice President - Corporate Services; Robert W. Stahman - Vice President, General Counsel and Secretary; Marlene K. Williams - Vice President-Human Resources. The terms and conditions of each Agreement are the same as those set forth in Mr. Packwood's Agreement. EX-10 4 CHANGE IN CONTROL AGREEMENT BETWEEN IDACORP, INC. AND JAN B. PACKWOOD THIS AGREEMENT, is by and between IDACORP, Inc., an Idaho corporation (the "Corporation") and JAN B. PACKWOOD (the "Executive") and is effective on the date established pursuant to Section 15 of this Agreement (the "Effective Date"). W I T N E S S E T H: WHEREAS, the Executive is a valuable employee of the Corporation or any Subsidiary of the Corporation, an integral part of its management, and a key participant in the decision-making process relative to short-term and long-term planning and policy for the Corporation; and WHEREAS, the Corporation wishes to encourage the Executive to continue his career and services with the Corporation following a Change in Control; and WHEREAS, the Board has determined that it would be in the best interests of the Corporation and its shareholders to assure continuity in the management of the Corporation's, including Subsidiaries', administration and operations in the event of a Change in Control by entering into this Agreement with the Executive; NOW THEREFORE, it is hereby agreed by and between the parties hereto as follows: 1. Definitions. a. "Board" shall mean the Board of Directors of the Corporation. b. "Cause" shall mean the Executive's fraud or dishonesty which has resulted or is likely to result in material economic damage to the Corporation or a Subsidiary of the Corporation, as determined in good faith by a vote of at least two-thirds of the non-employee directors of the Corporation at a meeting of the Board at which the Executive is provided an opportunity to be heard. c. "Change in Control" shall mean: (i) any person (as such term is used in Section 13(d) of the Securities Exchange Act of 1934 (the "1934 Act"), excluding a corporation or other entity owned, directly or indirectly, by the stockholders of the Corporation immediately prior to the transaction in substantially the same proportions as their ownership of stock of the Corporation ("Person")) is the beneficial owner, directly or indirectly, of 20% or more of the outstanding stock of the Corporation requiring the filing of a report with the Securities and Exchange Commission under Section 13(d) of the 1934 Act; (ii) a purchase by any Person of shares pursuant to a tender or exchange offer to acquire any stock of the Corporation (or securities convertible into stock) for cash, securities or any other consideration provided that, after closing of the offer, such Person is the beneficial owner (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 20% or more of the outstanding stock of the Corporation (calculated as provided in Paragraph (d) of Rule 13d-3 under the 1934 Act in the case of rights to acquire stock); (iii) shareholder approval of a merger, consolidation, liquidation or dissolution of the Corporation, or the sale of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of the Corporation immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination; or (iv) a change in the majority of the members of the Board within a 24-month period unless the election or nomination for election by the Corporation's shareholders of each new director was approved by the vote of at least two-thirds of the directors then still in office who were in office at the beginning of the 24-month period. With respect to subparagraph 1(c)(iii), upon the Board's determination that the transaction subject to shareholder approval thereunder will not be closed, a Change in Control shall not be deemed to have occurred from such date forward and this Agreement shall continue in effect as if no Change in Control had occurred except to the extent termination requiring payments under this Agreemetn hereof occurs prior to such Board's determination. d. "Compensation" shall mean the highest combined amount of base salary and bonus received by the Executive during any one calender year which is one of the five calender years preceding employment termination, including any elective contributions made by the Corporation on behalf of the Executive that are not includible in the gross income of the Executive under Sections 125 or 402(a)(8) of the Internal Revenue Code of 1986, as amended (the "Code") or any successor provision thereto. e. "Constructive Discharge" shall mean any of the following: (i) any material failure by the Corporation or any Subsidiary of the Corporation to comply with any of the provisions of this Agreement; (ii) the Corporation or a Subsidiary of the Corporation requiring the Executive to be based at any office or location more than 50 miles from the location at which the Executive was based on the day prior to the Change in Control; (iii) a reduction which is more than de minimis in (A) the Executive's annual rate of base salary or maximum annual bonus opportunity, (B) the long-term incentive compensation the Executive has the opportunity to earn, determined in the aggregate if multiple long-term incentive opportunities exist, or (C) the combined annual benefit accrual rate under the Corporation's qualified defined benefit pension plan and/or the Idaho Power Company security plan for Senior Management Employees, as in effect immediately prior to the Change in Control (except if such reduction is a part of a reduction for all executive officers); (iv) the Corporation failing to require a successor entity to assume and agree to perform the Corporation's obligations pursuant to Section 9; or (v) a reduction which is more than de minimis in the long term disability and life insurance coverage provided to the Executive under the Corporation's life insurance and long term disability plans as in effect immediately prior to the Change in Control. No such event described hereunder shall constitute Constructive Discharge unless the Executive has given written notice to the Corporation specifying the event relied upon for such termination within one year after the occurrence of such event (but in no event later than the Ending Date) and the Corporation has not remedied such within 30 days of receipt of such notice. The Corporation and Executive, upon mutual written agreement, may waive any of the foregoing provisions which would otherwise constitute a Constructive Discharge. f. Coverage Period" shall begin on the Starting Date and end on the Ending Date. g. "Disability" shall mean an injury or illness which permanently prevents the Executive from performing services to the Corporation and which qualifies the Executive for payments under the Corporation's long term disability plan, which for purposes of this Agreement shall be the Idaho Power Company Long Term Disability Plan. h. "Ending Date" shall be the date which is 36 full calendar months following the date on which a Change in Control occurs or if the Change in Control is shareholder approval pursuant to Section 1(c)(iii), the date which is 36 months following the consummation of the transaction subject to such shareholder approval. i. "Retirement" shall mean attainment of normal retirement age under the Idaho Power Company Security Plan. j. "Subsidiary" means any corporation of which more than 50% of the outstanding stock having ordinary voting power to elect a majority of the board of directors of such corporation is now or hereafter owned, directly or indirectly, by the Corporation. k. "Starting Date" shall be the date on which a Change in Control occurs. 2. Term. This Agreement shall be effective as of the Effective Date and shall continue thereafter until the 36 month anniversary of the later of (i) such date, or (ii) if the Change in Control causing the Agreement to be effective is shareholder approval pursuant to Section 1(c)(iii), the date of the consummation of the transaction subject to such shareholder approval; provided, however, the Corporation's obligations, if any, to provide payments and/or benefits pursuant to Section 3 of this Agreement and the obligations of the Corporation and the Executive under Section 5 of this Agreement shall survive the termination of this Agreement. 3. Severance Benefits. a. If the Executive's employment hereunder is terminated by the Corporation for any reason other than Cause, death, or Disability, or by the Executive in the event of a Constructive Discharge or in the event of Retirement, in any case, at any time during the Coverage Period, then, (i) within five business days after such termination, the Corporation shall pay to the Executive (or if the Executive dies after termination of employment but before receiving all payments to which he has become entitled hereunder, to the estate of the Executive) the following amounts: (A) accrued but unpaid salary and accrued but unused vacation; and (B) a lump sum cash amount equal to two and one-half times the Executive's Compensation; and (ii) the Executive shall be entitled to the following additional severance benefits: (A) restrictions on all restricted stock granted prior to the Change in Control and beneficially owned by the Executive shall lapse immediately; (B) outplacement services commencing within 12 months of the Starting Date and extending for a period of not more than 12 months, the scope and provider of which shall be selected by the Executive in his sole discretion (but at a total cost to the Corporation of not more than $12,000); and (C) for a period commencing with the month in which termination of employment shall have occurred and ending 24 months thereafter, the Executive and, as applicable, the Executive's covered dependants shall be entitled to all benefits under the Corporation's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Corporation's senior executives generally. If and to the extent that equivalent benefits shall not be payable or provided under any such plan, the Corporation shall pay or provide equivalent benefits on an individual basis. The benefits provided in accordance with this Section 3(a)(ii)(C) shall be secondary to any comparable benefits provided by another employer. b. Notwithstanding anything to the contrary contained in this Agreement, if the Executive voluntarily terminates employment for any reason (unless, prior to such termination, the Corporation has given notice to the Executive that it intends to terminate the Executive's employment for Cause) in the first full calendar month following the one year anniversary of the Change in Control, the Corporation shall pay to the Executive (or the Executive's estate upon death) the amounts and provide to the Executive the benefits provided under Section 3(a); provided, however, the lump sum amount calculated under Section 3(a)(i)(B)shall be multiplied by 2/3, and the welfare benefits provided pursuant to Section 3(a)(ii)(C) shall continue for 18 months rather than 24 months. c. (i) If Independent Tax Counsel (as that term is defined below) shall determine that the aggregate payments and benefits provided to the Executive pursuant to this Agreement and any other payments and benefits provided to the Executive from the Corporation, any Subsidiary and/or plans of the Corporation and/or its Subsidiaries which constitute "parachute payments" as defined in Section 280G of the Code, or any successor provision thereto ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then such Parachute Payments shall be reduced (but not below zero) but only to the extent necessary so that no portion thereof shall be subject to the Excise Tax. The determination of the Independent Tax Counsel under this subsection (i) shall be final and binding on all parties hereto. Unless the Executive gives prior written notice specifying a different order to the Corporation to effectuate the limitations described above, the Corporation shall reduce or eliminate the Parachute Payments by first reducing or eliminating those payments or benefits which are not payable in cash and then by reducing or eliminating other Parachute Payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the employment termination date. Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement of agreement governing the Executive's rights and entitlement to any benefits or compensation. For purposes of this Section 3(c), "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm with expertise in the area of executive compensation tax law, who shall be selected by the Corporation and shall be reasonably acceptable to the Executive, and whose fees and disbursements shall be paid by the Corporation. (ii) The Executive shall notify the Corporation in writing within 45 days of any claim by the IRS that, if successful, would require the payment by the Executive of an Excise Tax. Upon receipt of such notice, the Corporation may, in its sole discretion, either contest such claim, provide the Executive with an additional payment (a "Gross-Up Payment") intended to reimburse the Executive for any such Excise Tax and any income tax or Excise Tax attributable to the Gross-Up Payment (including interest or penalties with respect thereto), or do nothing. If the Corporation notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this sentence, the Executive shall: (A) give the Corporation any information reasonably requested by the Corporation relating to such claim, (B) take such action in connection with contesting such claim as the Corporation shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Corporation, (C) cooperate with the Corporation in good faith in order to effectively contest such claim, and (D) permit the Corporation to participate in any proceedings relating to such claim; provided, however, that the Corporation shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Corporation shall control all proceedings taken in connection with such contest; provided, however, that if the Corporation directs the Executive to pay such claim and sue for a refund, the Corporation shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iii) If, after the receipt by the Executive of an amount advanced by the Corporation pursuant to Section 3(c)(ii), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall, within 10 days of the receipt of such refund, pay to the Corporation the amount of such refund, together with any interest paid or credited thereon after taxes applicable thereto. d. In the event of any termination of the Executive's employment described in Section 3(a) or Section 3(b), the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment; provided, however, to the extent the Executive receives medical and health benefits from a subsequent employer, medical and health benefits provided pursuant to Section 3(a)(ii)(C) shall be secondary to those received from the subsequent employer. e. It is intended that the termination provisions herein are in lieu of, and not in addition to, termination or severance payments and benefits provided under the Corporation's other termination or severance plans or agreements ("Other Termination Benefits"). Unless waived by the Executive, Other Termination Benefits the Executive receives, or is entitled to receive in the future, shall reduce payments and benefits provided hereunder. 4. Source of Payments. All payments provided for in Section 3 above shall be paid in cash from the general funds of the Corporation provided, however, that such payments shall be reduced by the amount of any payments made to the Executive or his dependents, beneficiaries or estate from any trust or special or separate fund established by the Corporation to assure such payments. The Corporation shall not be required to establish a special or separate fund or other segregation of assets to assure such payments, and, if the Corporation shall make any investments to aid it in meeting its obligations hereunder, the Executive shall have no right, title or interest in or to any such investments except as may otherwise be expressly provided in a separate written instrument relating to such investments. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between the Corporation and the Executive or any other person. To the extent that any person acquires a right to receive payments from the Corporation such right shall be no greater than the right of an unsecured creditor of the Corporation. 5. Litigation Expenses: Arbitration. a. Full Settlement, Litigation Expenses; Arbitration. Except as provided below, the Corporation's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Corporation may have against the Executive or others. The Corporation agrees to pay, upon written demand therefor by the Executive, all legal fees and expenses the Executive reasonably incurs as a result of any dispute or contest (regardless of the outcome thereof) by or with the Corporation or others regarding the validity or enforceability of, or liability under, any provision of this Agreement, plus in each case, interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code. Notwithstanding the foregoing, the Executive agrees to repay to the Corporation any such fees and expenses paid or advanced by the Corporation if and to the extent that the Corporation or such others obtains a judgment or determination that the Executive's claim was frivolous or was without merit from the arbitrator or a court of competent jurisdiction from which no appeal may be taken, whether because the time to do so has expired or otherwise. Notwithstanding any provision hereof or in any other agreement, the Corporation may offset any other obligation it has to the Executive by the amount of such repayment. In any such action brought by the Executive for damages or to enforce any provisions of this Agreement, he shall be entitled to seek both legal and equitable relief and remedies, including, without limitation, specific performance of the Corporation's obligations hereunder, in his sole discretion. b. In the event of any dispute or difference between the Corporation and the Executive with respect to the subject matter of this Agreement and the enforcement of rights hereunder, either the Executive or the Corporation may, by written notice to the other, require such dispute or difference to be submitted to arbitration. The arbitrator or arbitrators shall be selected by agreement of the parties or, if they cannot agree on an arbitrator or arbitrators within 30 days after the Executive has notified the Corporation of his desire to have the question settled by arbitration, then the arbitrator or arbitrators shall be selected by the American Arbitration Association (the "AAA") upon the application of the Executive. The determination reached in such arbitration shall be final and binding on both parties without any right of appeal or further dispute. Execution of the determination by such arbitrator may be sought in any court of competent jurisdiction. The arbitrators shall not be bound by judicial formalities and may abstain from following the strict rules of evidence and shall interpret this Agreement as an honorable engagement and not merely as a legal obligation. Unless otherwise agreed by the parties, any such arbitration shall take place in Boise, Idaho, and shall be conducted in accordance with the Rules of the AAA. The Executive's expenses for such proceeding shall be paid, or repaid to the Corporation as the case may be, as provided in subsection (a) of this Section 5. 6. Tax Withholding. The Corporation may withhold from any payments made under this Agreement all federal, state or other taxes as shall be required pursuant to any law or governmental regulation or ruling. 7. Entire Understanding. This Agreement contains the entire understanding between the Corporation and the Executive with respect to the subject matter hereof and supersedes any prior severance or termination agreement between the Corporation and the Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to the Executive of any kind elsewhere provided and not expressly dealt with in this Agreement. 8. Severability. If, for any reason, any one or more of the provisions or part of a provision contained in this Agreement shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement not held so invalid, illegal or unenforceable, and each other provision or part of a provision shall to the full extent consistent with law continue in full force and effect. 9. Consolidation, Merger, or Sale of Assets. If the Corporation consolidates or merges into or with, or transfers all or substantially all of its assets to, another entity the term "the Corporation" as used herein shall mean such other entity and this Agreement shall continue in full force and effect. In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by this Agreement, the Corporation shall require such successor expressly and unconditionally to assume and agree to perform the Corporation's obligations under this Agreement, in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place. 10. Notices. All notices, requests, demands and other communications required or permitted hereunder shall be given in writing and shall be deemed to have been duly given if delivered or mailed, postage prepaid, first class as follows: a. to the Corporation: IDACORP, Inc. Attention: General Counsel P.O. Box 70 Boise, Idaho 83707 b. to the Executive: Jan B. Packwood 3227 Agate Ct. Boise, Idaho or to such other address as either party shall have previously specified in writing to the other. 11. No Attachment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect. 12. Binding Agreement. This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and the Corporation and their respective permitted successors and assigns. 13. Modification and Waiver. Prior to the date of a Change in Control or, if earlier, the date of a public announcement of a transaction or event which if consummated would be a Change in Control ("Pre-Change in Control Event"), this Agreement may be terminated, modified or amended by action of a majority of the members of the Board. After a Change in Control or Pre- Change in Control Event, this Agreement may not be terminated, modified or amended except by an instrument in writing signed by the parties hereto. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument signed by the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. Notwithstanding any other provision contained in this Agreement to the contrary, if any action taken or required to be taken pursuant to the terms of this Agreement would preclude the use of the "pooling of interests" accounting method with respect to any specific transaction the consummation of which is intended to be accounted for under the "pooling of interests" method, this Agreement shall be modified to the extent the Corporation deems necessary to permit such "pooling of interests" accounting treatment. 14. Headings of No Effect. The section headings contained in this Agreement are included solely for convenience of reference and shall not in any way affect the meaning or interpretation of any of the provisions of this Agreement. 15. Effective Date and Executive Acknowledgments. This Agreement shall become effective on the Starting Date. The Executive acknowledges that he has read and understands the provisions of this Agreement. The Executive further acknowledges that he has been given an opportunity for his legal counsel to review this Agreement and that the provisions of this Agreement are reasonable and that he has received a copy of this Agreement. 16. Not Compensation for Other Plans. It is understood by all parties hereto that amounts paid and benefits provided hereunder are not to be considered compensation, earnings or wages for purpose of any employee benefit plan of the Corporation or its Subsidiaries, including, but not limited to, the qualified retirement plan or the Idaho Power Company Security Plan. 17. Release. Notwithstanding any provision herein to the contrary, the Corporation shall not have any obligation to pay any amount or provide any benefit under this Agreement unless and until the Executive executes a release of the Corporation, its Subsidiaries or related parties, in such form as the Corporation may reasonably request, of all claims against the Corporation, its affiliates and related parties relating to the Executive's employment and termination thereof and unless and until any revocation period applicable to such release has expired. 18. Governing Law. This Agreement and its validity, interpretation, performance, and enforcement shall be governed by the laws of Idaho. IN WITNESS WHEREOF, the Corporation through its officers duly authorized, and the Executive both intending to be legally bound have duly executed and delivered this Agreement, to be effective as of the date set forth in Section 15. IDACORP, INC. Date: 8/25/99 By: /s/ Jon H. Miller JON H. MILLER Chairman of the Board EXECUTIVE Date: 9/1/99 Jan B. Packwood EX-12 5
Ex12 IDACORP, Inc. Consolidated Financial Information Ratio of Earnings to Fixed Charges Twelve Months Twelve Months Ended December 31, Ended (Thousands of Dollars) September 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $ 101,775 $ 127,342 $ 135,247 $ 133,570 $ 133,806 $ 138,927 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (3,431) Equity in loss of equity method 0 0 0 0 458 289 investments Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (62) Fixed charges, as below 66,324 70,215 70,418 69,634 69,923 71,463 Total earnings, as defined $ 168,425 $ 195,499 $ 204,252 $ 199,261 $ 199,365 $ 207,186 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,677 $ 62,105 Preferred stock dividends of subsidiaries- gross up-Idacorp rate 11,097 12,834 12,079 7,891 8,445 8,401 Rental interest factor 794 925 991 982 801 957 Total fixed charges, as defined $ 66,324 $ 70,215 $ 70,418 $ 69,634 $ 69,923 $ 71,463 Ratio of earnings to fixed charges 2.54x 2.78x 2.90x 2.86x 2.85x 2.90x
EX-12 6
Ex12a IDACORP, Inc. Consolidated Financial Information Supplemental Ratio of Earnings to Fixed Charges Twelve Months Twelve Months Ended December 31, Ended (Thousands of Dollars) September 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $ 101,775 $ 127,342 $ 135,247 $ 133,570 $ 133,806 $ 138,927 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (3,431) Equity in loss of equity method investments 0 0 0 0 458 289 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (62) Supplemental fixed charges, as below 68,946 72,826 73,018 72,208 72,496 74,024 Total earnings, as defined $ 171,047 $ 198,110 $ 206,852 $ 201,835 $ 201,938 $ 209,747 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,677 $ 62,105 Preferred stock dividends of subsidiaries- gross up-Idacorp rate 11,097 12,834 12,079 7,891 8,445 8,401 Rental interest factor 794 925 991 982 801 957 Total fixed charges 66,324 70,215 70,418 69,634 69,923 71,463 Supplemental increment to fixed charges* 2,622 2,611 2,600 2,574 2,573 2,561 Total supplemental fixed charges $ 68,946 $ 72,826 $ 73,018 $ 72,208 $ 72,496 $ 74,024 Supplemental ratio of earnings to fixed charges 2.48 x 2.72 x 2.83 x 2.80 x 2.79 x 2.83 x *Explanation of increment - Interest on the guaranty of American Falls Reservoir District bonds and Milner Dam, Inc. notes which are already included in operation expenses.
EX-12 7
Ex12b IDACORP, Inc. Consolidated Financial Information Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements Twelve Months Twelve Months Ended December 31, Ended (Thousands of Dollars) September 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $ 101,775 $ 127,342 $ 135,247 $ 133,570 $ 133,806 $ 138,927 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (3,431) Equity in loss of equity method investments 0 0 0 0 458 289 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (62) Fixed charges, as below 66,324 70,215 70,418 69,634 69,923 71,463 Total earnings, as defined $ 168,425 $ 195,499 $ 204,252 $ 199,261 $ 199,365 $ 207,186 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,677 $ 62,105 Preferred stock dividends of subsidiaries- gross up-Idacorp rate 11,097 12,834 12,079 7,891 8,445 8,401 Rental interest factor 794 925 991 982 801 957 Total fixed charges 66,324 70,215 70,418 69,634 69,923 71,463 Preferred dividends requirements 0 0 0 0 0 0 Total combined fixed charges and preferred dividends $ 66,324 $ 70,215 $ 70,418 $ 69,634 $ 69,923 $ 71,463 Ratio of earnings to combined fixed charges and preferred dividends 2.54x 2.78x 2.90x 2.86x 2.85x 2.90x
EX-12 8
Ex12c IDACORP, Inc. Consolidated Financial Information Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements Twelve Months Twelve Months Ended December 31, Ended (Thousands of Dollars) September 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $ 101,775 $ 127,342 $ 135,247 $ 133,570 $ 133,806 $ 138,927 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (3,431) Equity in loss of equity method investments 0 0 0 0 458 289 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (62) Supplemental fixed charges and preferred dividends, as below 68,946 72,826 73,018 72,208 72,496 74,024 Total earnings, as defined $ 171,047 $ 198,110 $ 206,852 $ 201,835 $ 201,938 $ 209,747 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,677 $ 62,105 Preferred stock dividends of subsidiaries-gross up-Idacorp rate 11,097 12,834 12,079 7,891 8,445 8,401 Rental interest factor 794 925 991 982 801 957 Total fixed charges 66,324 70,215 70,418 69,634 69,923 71,463 Supplemental increment to fixed charges* 2,622 2,611 2,600 2,574 2,573 2,561 Supplemental fixed charges 68,946 72,826 73,018 72,208 72,496 74,024 Preferred dividends requirements 0 0 0 0 0 0 Total combined supplemental fixed charges and preferred dividends $ 68,946 $ 72,826 $ 73,018 $ 72,208 $ 72,496 $ 74,024 Supplemental ratio of earnings to combined fixed charges and preferred dividends 2.48x 2.72x 2.83x 2.80x 2.79x 2.83x *Explanation of increment - Interest on the guaranty of American Falls Reservoir District bonds and Milner Dam, Inc. notes which are already included in operation expenses.
EX-12 9
Ex12d Idaho Power Company Consolidated Financial Information Ratio of Earnings to Fixed Charges Twelve Months Twelve Months Ended December 31, Ended (Thousands of Dollars) September 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $ 109,173 $ 135,333 $ 142,710 $ 138,746 $ 140,984 $ 145,745 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (3,431) Equity in loss of equity method investments 0 0 0 0 476 0 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) 0 Fixed charges, as below 55,227 57,381 58,339 61,743 61,394 62,178 Total earnings, as defined $ 164,726 $ 190,656 $ 199,636 $ 196,546 $ 198,032 $ 204,492 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,593 $ 61,221 Rental interest factor 794 925 991 982 801 957 Total fixed charges, as defined $ 55,227 $ 57,381 $ 58,339 $ 61,743 $ 61,394 $ 62,178 Ratio of earnings to fixed charges 2.98x 3.32x 3.42x 3.18x 3.23x 3.29x
EX-12 10
Ex12e Idaho Power Company Consolidated Financial Information Supplemental Ratio of Earnings to Fixed Charges Twelve Months Twelve Months Ended December 31, Ended (Thousands of Dollars) September 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $ 109,173 $ 135,333 $ 142,710 $ 138,746 $ 140,984 $ 145,745 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (3,431) Equity in loss of equity method investments 0 0 0 0 476 0 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) 0 Supplemental fixed charges, as below 57,849 59,992 60,939 64,317 63,967 64,739 Total earnings, as defined $ 167,348 $ 193,267 $ 202,236 $ 199,120 $ 200,605 $ 207,053 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,593 $ 61,221 Rental interest factor 794 925 991 982 801 957 Total fixed charges 55,227 57,381 58,339 61,743 61,394 62,178 Supplemental increment to fixed charges* 2,622 2,611 2,600 2,574 2,573 2,561 Total supplemental fixed charges $ 57,849 $ 59,992 $ 60,939 $ 64,317 $ 63,967 $ 64,739 Supplemental ratio of earnings to fixed charges 2.89x 3.22x 3.32 x 3.10x 3.14x 3.20x *Explanation of increment - Interest on the guaranty of American Falls Reservoir District bonds and Milner Dam, Inc. notes which are already included in operation expenses.
EX-12 11
Ex12f Idaho Power Company Consolidated Financial Information Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements Twelve Months Twelve Months Ended December 31, Ended (Thousands of Dollars) September 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $ 109,173 $ 135,333 $ 142,710 $ 138,746 $ 140,984 $ 145,745 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (3,431) Equity in loss of equity method investments 0 0 0 0 476 0 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) 0 Fixed charges, as below 55,227 57,381 58,339 61,743 61,394 62,178 Total earnings, as defined $ 164,726 $ 190,656 $ 199,636 $ 196,546 $ 198,032 $ 204,492 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,593 $ 61,221 Rental interest factor 794 925 991 982 801 957 Total fixed charges 55,227 57,381 58,339 61,743 61,394 62,178 Preferred stock dividends-gross up Idaho Power rate 10,682 12,392 12,146 7,803 8,275 8,212 Total combined fixed charges and preferred dividends $ 65,909 $ 69,773 $ 70,485 $ 69,546 $ 69,669 $ 70,390 Ratio of earnings to combined fixed charges and preferred dividends 2.50x 2.73x 2.83x 2.83x 2.84x 2.91x
EX-12 12
Ex12g Idaho Power Company Consolidated Financial Information Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements Twelve Months Twelve Months Ended December 31, Ended (Thousands of Dollars) September 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $ 109,173 $ 135,333 $ 142,710 $ 138,746 $ 140,984 $ 145,745 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (3,431) Equity in loss of equity method investments 0 0 0 0 476 0 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) 0 Supplemental fixed charges and preferred dividends, as below 57,849 59,992 60,939 64,317 63,967 64,739 Total earnings, as defined $ 167,348 $ 193,267 $ 202,236 $ 199,120 $ 200,605 $ 207,053 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,593 $ 61,221 Rental interest factor 794 925 991 982 801 957 Total fixed charges 55,227 57,381 58,339 61,743 61,394 62,178 Supplemental increment to fixed charges* 2,622 2,611 2,600 2,574 2,573 2,561 Supplemental fixed charges 57,849 59,992 60,939 64,317 63,967 64,739 Preferred stock dividends-gross up Idaho Power rate 10,682 12,392 12,146 7,803 8,275 8,212 Total combined supplemental fixed charges and preferred dividends $ 68,531 $ 72,384 $ 73,085 $ 72,120 $ 72,242 $ 72,951 Supplemental ratio of earnings to combined fixed charges and preferred dividends 2.44x 2.67x 2.77x 2.76x 2.78x 2.84x *Explanation of increment - Interest on the guaranty of American Falls Reservoir District bonds and Milner Dam, Inc. notes which are already included in operation expenses.
EX-15 13 Exhibit 15 November 5, 1999 IDACORP, Inc. Idaho Power Company Boise, Idaho We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of IDACORP, Inc. and subsidiaries and Idaho Power Company and subsidiaries for the periods ended September 30, 1999 and 1998, as indicated in our reports dated October 29, 1999; because we did not perform an audit, we expressed no opinion on that information. We are aware that our reports referred to above, which are included in your Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, are incorporated by reference in Idaho Power Company's Registration Statement No. 33-51215 on Form S-3 and IDACORP, Inc.'s Registration Statement Nos. 333-00139 and 333-64737 on Form S-3 and Registration Statement Nos. 33-56071, 333-89445 and 333-65157 on Form S-8. We also are aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, are not considered a part of the Registration Statements prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. DELOITTE & TOUCHE LLP Boise, Idaho EX-27 14 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT Ex27A this schedule contains summary financial information extracted from IDACORP, and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1998 SEP-30-1999 PER-BOOK 1,728,351 140,267 305,169 381,816 0 2,555,603 451,112 0 298,287 749,399 0 105,856 728,339 0 13,510 11,630 88,026 0 0 0 858,843 2,555,603 501,200 37,799 361,705 399,504 101,696 21,580 123,276 50,515 72,761 0 72,761 52,395 0 168,753 1.93 1.93
EX-27 15
UT Ex27B this schedule contains summary financial information extracted from Idaho Power Company and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1998 SEP-30-1999 PER-BOOK 1,726,138 113,923 240,748 381,199 0 2,462,008 94,031 358,369 271,838 724,238 0 105,856 728,339 0 13,510 10,165 88,026 0 0 0 791,874 2,462,008 501,200 37,480 361,705 399,185 102,015 20,364 122,379 45,428 76,951 4,121 72,830 52,443 0 165,846 0 0
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