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BENEFIT PLANS:
 12 Months Ended
Dec. 31, 2020
Retirement Benefits, Description [Abstract]  
Benefit Plans BENEFIT PLANS
 
Idaho Power sponsors defined benefit and other postretirement benefit plans that cover the majority of its employees. Idaho Power also sponsors a defined contribution 401(k) employee savings plan and provides certain post-employment benefits.

Pension Plans

Idaho Power has pension plans–a noncontributory defined benefit pension plan (pension plan) and two nonqualified defined benefit pension plans for certain senior management employees called the Security Plan for Senior Management Employees I and Security Plan for Senior Management Employees II (together, SMSP). Idaho Power also has a nonqualified defined benefit pension plan for directors that was frozen in 2002. Remaining vested benefits from that plan are included with the SMSP in the disclosures below. The benefits under these plans are based on years of service and the employee's final average earnings.
 
The following table summarizes the changes in benefit obligations and plan assets of these plans (in thousands of dollars): 
 Pension PlanSMSP
 2020201920202019
 
Change in projected benefit obligation:    
Benefit obligation at January 1$1,134,752 $951,857 $122,443 $102,318 
Service cost42,987 34,061 213 (181)
Interest cost40,013 42,312 4,350 4,575 
Actuarial loss163,610 147,784 13,420 17,888 
Plan amendment— — 130 2,839 
Benefits paid(43,967)(41,262)(5,765)(4,996)
Projected benefit obligation at December 311,337,395 1,134,752 134,791 122,443 
Change in plan assets:  
Fair value at January 1763,119 650,604 — — 
Actual return on plan assets112,451 113,777 — — 
Employer contributions40,000 40,000 — — 
Benefits paid(43,967)(41,262)— — 
Fair value at December 31871,603 763,119 — — 
Funded status at end of year$(465,792)$(371,633)$(134,791)$(122,443)
Amounts recognized in the balance sheet consist of:    
Other current liabilities$— $— $(6,154)$(5,911)
Noncurrent liabilities(465,792)(371,633)(128,637)(116,532)
Net amount recognized
$(465,792)$(371,633)$(134,791)$(122,443)
Amounts recognized in accumulated other comprehensive income consist of:
    
Net loss$437,859 $347,785 $55,537 $45,851 
Prior service cost49 56 2,983 3,143 
Subtotal437,908 347,841 58,520 48,994 
Less amount recorded as regulatory asset(1)
(437,908)(347,841)— — 
Net amount recognized in accumulated other comprehensive income
$— $— $58,520 $48,994 
Accumulated benefit obligation$1,115,923 $958,586 $119,517 $109,966 
(1) Changes in the funded status of the pension plan that would be recorded in accumulated other comprehensive income for an unregulated entity are recorded as a regulatory asset for Idaho Power as Idaho Power believes it is probable that an amount equal to the regulatory asset will be collected through the setting of future rates.
 
The actuarial losses reflected in the benefit obligations for the pension and SMSP plans in 2020 are due primarily to decreases in the assumed discount rates of both plans from December 31, 2019, to December 31, 2020. The actuarial losses affecting the
benefit obligations for the pension and SMSP plans in 2019 are due primarily to decreases in the assumed discount rates from December 31, 2018, to December 31, 2019. For more information on discount rates, see “Plan Assumptions” below in this Note 12.

As a non-qualified plan, the SMSP has no plan assets. However, Idaho Power has a Rabbi trust designated to provide funding for SMSP obligations. The Rabbi trust holds investments in marketable securities and corporate-owned life insurance. The recorded value of these investments was approximately $108.8 million and $97.6 million at December 31, 2020 and 2019, respectively, and is reflected in Investments and in Company-owned life insurance on the consolidated balance sheets.

The following table shows the components of net periodic benefit cost for these plans (in thousands of dollars). For purposes of calculating the expected return on plan assets, the market-related value of assets is equal to the fair value of the assets.
 Pension PlanSMSP
 202020192018202020192018
Service cost$42,987 $34,061 $37,836 $213 $(181)$(316)
Interest cost40,013 42,312 38,833 4,350 4,575 4,248 
Expected return on assets(56,239)(48,623)(52,302)— — — 
Amortization of net loss17,325 13,564 13,558 3,734 2,533 3,788 
Amortization of prior service cost6 6 6 290 96 98 
Net periodic pension cost44,092 41,320 37,931 8,587 7,023 7,818 
Regulatory deferral of net periodic benefit cost(1)
(42,042)(39,379)(36,153)— — — 
Previously deferred pension cost recognized(1)
17,154 17,154 17,154 — — — 
Net periodic benefit cost recognized for financial reporting(1)(2)
$19,204 $19,095 $18,932 $8,587 $7,023 $7,818 
(1) Net periodic benefit costs for the pension plan are recognized for financial reporting based upon the authorization of each regulatory jurisdiction in which Idaho Power operates. Under IPUC order, the Idaho portion of net periodic benefit cost is recorded as a regulatory asset and is recognized in the income statement as those costs are recovered through rates.
(2)  Of total net periodic benefit cost recognized for financial reporting $15.9 million, $15.1 million, and $15.2 million respectively, was recognized in "Other operations and maintenance" and $11.9 million, and $11.0 million, and $11.6 million respectively, was recognized in "Other (income) expense, net" on the consolidated statements of income of the companies for the twelve months ended December 31, 2020, 2019, and 2018.

The following table shows the components of other comprehensive (loss) income for the plans (in thousands of dollars):
 Pension PlanSMSP
 202020192018202020192018
Actuarial (loss) gain during the year$(107,399)$(82,631)$(15,226)$(13,420)$(17,888)$7,049 
Plan amendment service cost— — — (130)(2,839)— 
Reclassification adjustments for:
Amortization of net loss17,325 13,564 13,558 3,734 2,533 3,788 
Amortization of prior service cost6 6 6 290 96 98 
Adjustment for deferred tax effects23,184 17,776 428 2,452 4,658 (2,815)
Adjustment due to the effects of regulation
66,884 51,285 1,234 — — — 
Other comprehensive (loss) income recognized related to pension benefit plans
$— $— $— $(7,074)$(13,440)$8,120 

The following table summarizes the expected future benefit payments of these plans (in thousands of dollars):
 202120222023202420252026-2030
Pension Plan$42,701 $44,558 $46,596 $48,616 $50,521 $282,431 
SMSP6,154 6,197 6,349 6,491 6,489 33,339 
 
Idaho Power’s funding policy for the pension plan is to contribute at least the minimum required under the Employee Retirement Income Security Act of 1974 (ERISA) but not more than the maximum amount deductible for income tax purposes. In 2020, 2019, and 2018, Idaho Power elected to contribute more than the minimum required amounts 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. As of the date of this report, IDACORP's and Idaho Power's minimum required contribution to the
pension plan is estimated to be $4 million during 2021. Depending on market conditions and cash flow considerations in 2021, Idaho Power could contribute up to $40 million to the pension plan during 2021 in order to help balance the regulatory collection of these expenditures with the amount and timing of contributions and to mitigate the cost of being in an underfunded position.

Postretirement Benefits

Idaho Power maintains a defined benefit postretirement benefit plan (consisting of health care and death benefits) that covers all employees who were enrolled in the active-employee group plan at the time of retirement as well as their spouses and qualifying dependents. Retirees hired on or after January 1, 1999, have access to the standard medical option at full cost, with no contribution by Idaho Power. Benefits for employees who retire after December 31, 2002, are limited to a fixed amount, which has limited the growth of Idaho Power’s future obligations under this plan.
 
The following table summarizes the changes in benefit obligation and plan assets (in thousands of dollars):
 20202019
Change in accumulated benefit obligation:  
Benefit obligation at January 1$71,029 $66,453 
Service cost1,029 853 
Interest cost2,493 2,989 
Actuarial loss (gain)9,359 5,298 
Benefits paid(1)
(2,958)(4,564)
Benefit obligation at December 3180,952 71,029 
Change in plan assets:  
Fair value of plan assets at January 139,625 33,391 
Actual return (loss) on plan assets5,248 7,269 
Employer contributions(1)
(604)3,529 
Benefits paid(1)
(2,958)(4,564)
Fair value of plan assets at December 3141,311 39,625 
Funded status at end of year (included in noncurrent liabilities)$(39,641)$(31,404)
(1) Contributions and benefits paid are each net of $3.4 million and $3.3 million of plan participant contributions for 2020 and 2019, respectively.

Amounts recognized in accumulated other comprehensive income consist of the following (in thousands of dollars):
 20202019
Net loss$6,434 $(81)
Prior service cost127 174 
Subtotal6,561 93 
Less amount recognized in regulatory assets(6,561)(93)
Net amount recognized in accumulated other comprehensive income$— $— 
 
The net periodic postretirement benefit cost was as follows (in thousands of dollars):
 202020192018
Service cost$1,029 $853 $1,051 
Interest cost2,493 2,989 2,643 
Expected return on plan assets(2,404)(2,220)(2,467)
Immediate recognition of loss from temporary deviation(1)
— — 4,216 
Amortization of prior service cost47 48 47 
Net periodic postretirement benefit cost$1,165 $1,670 $5,490 
(1) In 2018, a loss associated with a temporary deviation from the cost-sharing provisions of the substantive plan was recognized in "Other expense, net" on the consolidated statements of income of the companies.

The following table shows the components of other comprehensive income for the plan (in thousands of dollars):
 202020192018
Actuarial loss during the year$(6,515)$(249)$(1,109)
Reclassification adjustments for:
Immediate recognition of loss from temporary deviation(1)
— — 4,216 
Reclassification adjustments for amortization of prior service cost47 48 47 
Adjustment for deferred tax effects1,665 52 270 
Adjustment due to the effects of regulation
4,803 149 (3,424)
Other comprehensive income related to postretirement benefit plans
$— $— $— 
(1) In 2018, a loss associated with a temporary deviation from the cost-sharing provisions of the substantive plan was recognized in "Other expense, net" on the consolidated statements of income of the companies.
 
The following table summarizes the expected future benefit payments of the postretirement benefit plan (in thousands of dollars):
 202120222023202420252026-2029
Expected benefit payments$5,363 $5,245 $5,056 $4,843 $4,668 $20,211 
 
Plan Assumptions
 
The following table sets forth the weighted-average assumptions used at the end of each year to determine benefit obligations for all Idaho Power-sponsored pension and postretirement benefits plans:
Pension PlanSMSPPostretirement
Benefits
 202020192020201920202019
Discount rate2.80 %3.60 %2.70 %3.65 %2.70 %3.60 %
Rate of compensation increase(1)
4.43 %4.37 %4.75 %4.75 %— — 
Medical trend rate— — — — 6.8 %6.7 %
Dental trend rate— — — — 4.0 %4.0 %
Measurement date12/31/202012/31/201912/31/202012/31/201912/31/202012/31/2019
(1) The 2020 rate of compensation increase assumption for the pension plan includes an inflation component of 2.40% plus a 2.03% composite merit increase component that is based on employees' years of service. Merit salary increases are assumed to be 8.0% for employees in their first year of service and scale down to 0.6% for employees in their fortieth year of service and beyond.
The following table sets forth the weighted-average assumptions used to determine net periodic benefit cost for all Idaho Power-sponsored pension and postretirement benefit plans: 
Pension PlanSMSPPostretirement
Benefits
 202020192018202020192018202020192018
Discount rate3.60 %4.55 %3.95 %3.65 %4.60 %3.95 %3.60 %4.60 %3.95 %
Expected long-term rate of return on assets
7.40 %7.50 %7.50 %— — — 6.50 %6.75 %6.75 %
Rate of compensation increase4.43 %4.37 %4.25 %4.75 %4.75 %4.75 %— — %— %
Medical trend rate— — — — — — 6.8 %6.7 %6.3 %
Dental trend rate— — — — — — 4.0 %4.0 %4.0 %
  
The assumed health care cost trend rate used to measure the expected cost of health benefits covered by the postretirement plan was 6.8 percent in 2020 and is assumed to decrease to 6.0 percent in 2021, 5.2 percent in 2022, 5.1 percent in 2023 and to gradually decrease to 3.9 percent by 2074. The assumed dental cost trend rate used to measure the expected cost of dental benefits covered by the plan was 4.0 percent, or equal to the medical trend rate if lower, for all years.

Plan Assets

Pension Asset Allocation Policy: The target allocation and actual allocations at December 31, 2020, for the pension asset portfolio by asset class is set forth below:
Asset ClassTarget
Allocation		Actual
Allocation
December 31, 2020
Debt securities24 %23 %
Equity securities59 %64 %
Real estate9 %6 %
Other plan assets8 %7 %
Total100 %100 %
 
Assets are rebalanced as necessary to keep the portfolio close to target allocations. The plan’s principal investment objective is to maximize total return (defined as the sum of realized interest and dividend income and realized and unrealized gain or loss in market price) consistent with prudent parameters of risk and the liability profile of the portfolio. Emphasis is placed on preservation and growth of capital along with adequacy of cash flow sufficient to fund current and future payments to plan participants.
 
The three major goals in Idaho Power’s asset allocation process are to:

•determine if the investments have the potential to earn the rate of return assumed in the actuarial liability calculations;
•match the cash flow needs of the plan. Idaho Power sets bond allocations sufficient to cover approximately five years of benefit payments. Idaho Power then utilizes growth instruments (equities, real estate, venture capital) to fund the longer-term liabilities of the plan; and
•maintain a prudent risk profile consistent with ERISA fiduciary standards.
 
Allowable plan investments include stocks and stock funds, investment-grade bonds and bond funds, real estate funds, private equity funds, and cash and cash equivalents. With the exception of real estate holdings and private equity, investments must be readily marketable so that an entire holding can be disposed of quickly with only a minor effect upon market price.

Rate-of-return projections for plan assets are based on historical risk/return relationships among asset classes. The primary measure is the historical risk premium each asset class has delivered versus the yield on the Moody's AA Corporate Bond Index. This historical risk premium is then added to the current yield on the Moody's AA Corporate Bond Index. Additional analysis is performed to measure the expected range of returns, as well as worst-case and best-case scenarios. Based on the current low interest rate environment, current rate-of-return expectations are lower than the nominal returns generated over the past 30 years when interest rates were generally much higher.
Idaho Power’s asset modeling process also utilizes historical market returns to measure the portfolio’s exposure to a “worst-case” market scenario, to determine how much performance could vary from the expected “average” performance over various time periods. This “worst-case” modeling, in addition to cash flow matching and diversification by asset class and investment style, provides the basis for managing the risk associated with investing portfolio assets.

Fair Value of Plan Assets: Idaho Power classifies its pension plan and postretirement benefit plan investments using the three-level fair value hierarchy described in Note 17 - "Fair Value Measurements." The following table presents the fair value of the plans' investments by asset category (in thousands of dollars).
 Level 1Level 2Level 3Total
Assets at December 31, 2020    
Cash and cash equivalents$25,008 $— $— $25,008 
Intermediate bonds34,455 163,000 — 197,455 
Equity Securities: Large-Cap79,259 — — 79,259 
Equity Securities: Mid-Cap104,089 — — 104,089 
Equity Securities: Small-Cap82,069 — — 82,069 
Equity Securities: Micro-Cap44,715 — — 44,715 
Equity Securities: Global and International69,687 — — 69,687 
Equity Securities: Emerging Markets10,574 — — 10,574 
Plan assets measured at NAV (not subject to hierarchy disclosure)
Commingled Fund: Equity Securities: Global and International116,223 
Commingled Fund: Equity Securities: Emerging Markets50,019 
Real estate54,630 
Private market investments37,875 
Total$449,856 $163,000 $— $871,603 
Postretirement plan assets(1)
$1,333 $39,978 $— $41,311 
 Level 1Level 2Level 3Total
Assets at December 31, 2019    
Cash and cash equivalents$10,878 $— $— $10,878 
Short-term bonds21,628 — — 21,628 
Intermediate bonds22,369 134,931 — 157,300 
Equity Securities: Large-Cap92,852 — — 92,852 
Equity Securities: Mid-Cap81,663 — — 81,663 
Equity Securities: Small-Cap67,075 — — 67,075 
Equity Securities: Micro-Cap31,469 — — 31,469 
Equity Securities: International13,817 — — 13,817 
Equity Securities: Emerging Markets8,245 — — 8,245 
Plan assets measured at NAV (not subject to hierarchy disclosure)
Commingled Fund: Equity Securities: Global and International114,975 
Commingled Fund: Equity Securities: Emerging Markets40,059 
Commingled Fund: Commodities fund34,793 
Real estate47,570 
Private market investments40,795 
Total$349,996 $134,931 $— $763,119 
Postretirement plan assets(1)
$641 $38,984 $— $39,625 
(1) The postretirement benefits assets are primarily life insurance contracts.

For the years ended December 31, 2020 and 2019, there were no material transfers into or out of Levels 1, 2, or 3.
Fair Value Measurement of Level 2 Plan assets and Plan assets measured at NAV:

Level 2 Bonds: These investments represent United States government, agency bonds, and corporate bonds. The United States government and agency bonds, as well as the corporate bonds, are not traded on an exchange and are valued utilizing market prices for similar assets or liabilities in active markets.

Level 2 Postretirement Asset: This asset represents an investment in a life insurance contract and is recorded at fair value, which is the cash surrender value, less any unpaid expenses. The cash surrender value of this insurance contract is contractually equal to the insurance contract's proportionate share of the market value of an associated investment account held by the insurer. The investments held by the insurer's investment account are all instruments traded on exchanges with readily determinable market prices.

Commingled Funds: These funds, made up of the global, international and emerging markets equity securities and commodities fund measured at NAV, are not publicly traded, and therefore no publicly quoted market price is readily available. The values of the commingled funds are presented at estimated fair value, which is determined based on the unit value of the fund. The values of these investments are calculated by the custodian for the fund company on a monthly or more frequent basis, and are based on market prices of the assets held by each of the commingled funds divided by the number of fund shares outstanding for the respective fund. The investments in commingled funds have redemption limitations that permit monthly redemption following notice requirements of 5 to 7 days.

Real Estate: Real estate holdings represent investments in open-end and closed-end commingled real estate funds. As the property interests held in these real estate funds are not frequently traded, establishing the market value of the property interests held by the fund, and the resulting unit value of fund shareholders, is based on unobservable inputs including property appraisals by the fund companies, property appraisals by independent appraisal firms, analysis of the replacement cost of the property, discounted cash flows generated by property rents and changes in property values, and comparisons with sale prices of similar properties in similar markets. These real estate funds also furnish annual audited financial statements that are also used to further validate the information provided. Redemptions on the open-end funds are generally available on a quarterly basis, with 10 to 35 days written notice, depending on the individual fund. If the fund has sufficient liquidity, the redemption will be processed at the fund NAV or the fund’s estimate of fair value at the end of the quarter. If the fund does not have sufficient liquidity to honor the full redemption, the remainder will be set for redemption the following quarter on a pro-rata basis with other redemption requests. This same process will repeat until the redemption request has been completed. To protect other fund holders, real estate funds have no duty to liquidate or encumber funds to meet redemption requests. The closed-end funds are formed for a stated life of 7 to 9 years. The fund can be further extended with the approval of the limited partners. There are generally no redemption rights associated with these funds. The limited partner must hold the fund for the life of the fund or find a third-party buyer.

Private Market Investments: Private market investments represent two categories: fund of hedge funds and venture capital funds. These funds are valued by the fund companies based on the estimated fair values of the underlying fund holdings divided by the fund shares outstanding or multiplied by the ownership percentages of the holder. Some hedge fund strategies utilize securities with readily available market prices, while others utilize less liquid investment vehicles that are valued based on unobservable inputs including cost, operating results, recent funding activity, or comparisons with similar investment vehicles. Redemptions are available on a quarterly basis with 70 days written notice. Redemptions will be processed at the quarterly NAV or fair value within 60 days following quarter end. In the event of a full redemption, a reserve amount of 5% to 10% of the redemption amount may be held in reserve until the audited financial statements of the fund are published. This allows the fund to adjust the redemption so that other fund holders are not adversely impacted. Venture capital fund investments are valued by the fund companies based on estimated fair value of the underlying fund holdings divided by the fund shares outstanding. Some venture capital investments have progressed to the point that they have readily available exchange-based market valuations. Early stage venture investments are valued based on unobservable inputs including cost, operating results, discounted cash flows, the price of recent funding events, or pending offers from other viable entities. These private market investments furnish annual audited financial statements that are also used to further validate the information provided. These funds are formed for a stated life of 10 to 15 years. The general partner can extend the fund life for 2 or 3 one-year periods. The fund can be further extended with the approval of the limited partners. There are generally no redemption rights associated with these funds. The limited partner must hold the fund for the life of the fund or find a third-party buyer.
Employee Savings Plan

Idaho Power has a defined contribution plan designed to comply with Section 401(k) of the Internal Revenue Code and that covers substantially all employees. Idaho Power matches specified percentages of employee contributions to the plan. Matching annual contributions were approximately $7.9 million, $7.7 million, and $7.7 million in 2020, 2019, and 2018, respectively.
 
Post-employment Benefits

Idaho Power provides certain benefits to former or inactive employees, their beneficiaries, and covered dependents after employment but before retirement, in addition to the health care benefits required under the Consolidated Omnibus Budget Reconciliation Act. These benefits include salary continuation, health care and life insurance for those employees found to be disabled under Idaho Power’s disability plans, and health care for surviving spouses and dependents. Idaho Power accrues a liability for such benefits. The post-employment benefits included in other deferred credits on both IDACORP’s and Idaho Power’s consolidated balance sheets at December 31, 2020, and 2019, were approximately $2 million.