BENEFIT PLANS

Idaho Power has a noncontributory defined benefit pension plan covering most employees. The benefits under the plan are based on years of service and the employee’s final average earnings. In addition, Idaho Power has a nonqualified defined benefit plan for certain senior management employees and directors called the Senior Management Security Plan (SMSP). Idaho Power also maintains a defined benefit postretirement plan (consisting of health care and death benefits) that covers all employees who were enrolled in the active group plan at the time of retirement as well as their spouses and qualifying dependents. Idaho Power also has an Employee Savings Plan that complies with Section 401(k) of the Internal Revenue Code and covers substantially all employees. Idaho Power matches specified percentages of employee contributions to the Employee Savings Plan.

The following table shows the components of net periodic benefit costs for the pension, SMSP, and postretirement benefits plans for the three months ended September 30 (in thousands of dollars):



	Pension Plan						Senior Management Security Plan				Postretirement Benefits
	2011			2010			2011		2010		2011			2010
Service cost	$	5,120		$	4,417		$	487	$	385	$	330		$	340
Interest cost	7,581			7,279			773		751		859			898
Expected return on plan assets	(7,968		)	(7,270		)	—		—		(660		)	(641		)
Amortization of transition obligation	—			—			—		—		510			510
Amortization of prior service cost	130			163			61		59		(105		)	(133		)
Amortization of net loss	2,168			1,918			323		232		144			143
Net periodic benefit cost	7,031			6,507			1,644		1,427		1,078			1,117
Costs not recognized due to the effects of regulation ⁽¹⁾	(2,371		)	(4,624		)	—		—		—			—
Net periodic benefit cost recognized for financial reporting⁽¹⁾	$	4,660		$	1,883		$	1,644	$	1,427	$	1,078		$	1,117
⁽¹⁾ Net periodic benefit costs for the pension plan are recognized based upon the authorization of each regulatory jurisdiction Idaho Power operates within. Under IPUC order, income statement recognition of pension plan costs has been deferred until costs are recovered through rates. See Note 3 – “Regulatory Matters” for information on Idaho Power’s 2011 Idaho pension rate order, which increased Idaho jurisdiction recovery to $17.1 million annually, effective June 1, 2011.

The following table shows the components of net periodic benefit costs for the pension, SMSP, and postretirement benefits plans for the nine months ended September 30 (in thousands of dollars):



	Pension Plan						Senior Management Security Plan				Postretirement Benefits
	2011			2010			2011		2010		2011			2010
Service cost	$	15,359		$	13,253		$	1,463	$	1,156	$	992		$	1,020
Interest cost	22,742			21,839			2,319		2,253		2,576			2,693
Expected return on plan assets	(23,903		)	(19,847		)	—		—		(1,981		)	(1,921		)
Amortization of transition obligation	—			—			—		—		1,530			1,530
Amortization of prior service cost	389			488			183		175		(316		)	(401		)
Amortization of net loss	6,505			5,756			969		698		433			430
Net periodic benefit cost	21,092			21,489			4,934		4,282		3,234			3,351
Costs not recognized due to the effects of regulation ⁽¹⁾	(11,981		)	(18,650		)	—		—		—			—
Net periodic benefit cost recognized for financial reporting⁽¹⁾	$	9,111		$	2,839		$	4,934	$	4,282	$	3,234		$	3,351
⁽¹⁾ Net periodic benefit costs for the pension plan are recognized based upon the authorization of each regulatory jurisdiction Idaho Power operates within. Under IPUC order, income statement recognition of pension plan costs has been deferred until costs are recovered through rates. See Note 3 – “Regulatory Matters” for information on Idaho Power’s 2011 Idaho pension rate order, which increased Idaho-jurisdiction recovery to $17.1 million annually, effective June 1, 2011.

In September 2011, Idaho Power contributed $18.5 million to its pension plan. The contribution was in excess of the $6 million minimum contribution requirement for the 2011 calendar year. Idaho Power elected to contribute more than the minimum requirement in order to bring the pension plan to a more funded position, to reduce future required contributions, and to reduce Pension Benefit Guaranty Corporation premiums.