2
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 March 31, 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 in their charters, state
of incorporation, address of
Commission principal executive offices, I.R.s. Employer
File Number and telephone number Identification 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
March 31, 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
IDACORP, Inc. Consolidated Balance Sheets 4-5
IDACORP, Inc. Consolidated Statements of Capitalization 6
IDACORP, Inc. Consolidated Statements of Cash Flows 7
IDACORP, Inc. Notes to Consolidated Financial Statements 8-11
Independent Accountants' Report 12
Idaho Power Company Consolidated Statements of Income 13
Idaho Power Company Consolidated Balance Sheets 14-15
Idaho Power Company Consolidated Statements of Capitalization 16
Idaho Power Company Consolidated Statements of Cash Flows 17
Idaho Power Company Notes to Consolidated Financial Statements 18-19
Independent Accountants' Report 20
Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations 21-27
Part II. Other Information:
Item 6.
Exhibits and Reports on Form 8-K 28-31
Signatures 32-33
DEFINITIONS
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
IPUC Idaho Public Utilities Commission
OPUC Oregon Public Utilities Commission
kWh kilowatt-hour
MAF Million Acre-Feet
MMbtu Million British Thermal Units
MWh Megawatt-hour
PCA Power Cost Adjustment
REA Rural Electrification Administration
SFAS Statement of Financial Accounting Standards
PUCN Public Utility Commission of Nevada
FORWARD LOOKING INFORMATION
This Form 10-Q contains "forward-looking statements" intended to
qualify for the 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
March 31,
1999 1998
(Thousands of Dollars
except for
per share amounts)
REVENUES:
General business $ 129,692 $ 112,223
Off system sales 37,510 45,591
Other revenues 6,947 9,534
Total revenues 174,149 167,348
EXPENSES:
Operation:
Purchased power 17,888 24,170
Fuel expense 22,020 20,720
Power cost adjustment 9,007 475
Other 32,767 32,947
Maintenance 7,883 9,028
Depreciation 19,171 18,895
Taxes other than income 5,584 5,344
taxes
Total expenses 114,320 111,579
INCOME FROM OPERATIONS 59,829 55,769
OTHER INCOME:
Allowance for equity funds 157 -
used during construction
Energy trading activities - Net 748 (328)
Other - Net 2,235 2,101
Total other income 3,140 1,773
INTEREST EXPENSE AND OTHER:
Interest on long-term debt 13,395 13,037
Other interest 2,229 2,086
Allowance for borrowed funds
used during construction (224) (161)
Preferred dividends of Idaho
Power Company 1,368 1,405
Total interest expense and
other 16,768 16,367
INCOME BEFORE INCOME TAXES 46,201 41,175
INCOME TAXES 16,700 13,125
NET INCOME $ 29,501 $ 28,050
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612
EARNINGS PER SHARE OF
COMMON STOCK (basic and
diluted) $ 0.78 $ 0.75
The accompanying notes are an integral part of these statements.
IDACORP, Inc.
Consolidated Balance Sheets
Assets
March 31, December 31,
1999 1998
(Thousands of Dollars)
ELECTRIC PLANT:
In service (at original cost) $ 2,676,592 $ 2,659,441
Accumulated provision for
depreciation (1,028,346) (1,009,387)
In service - Net 1,648,246 1,650,054
Construction work in progress 64,783 59,717
Held for future use 1,742 1,738
Electric plant - Net 1,714,771 1,711,509
INVESTMENTS AND OTHER PROPERTY 129,467 129,437
CURRENT ASSETS:
Cash and cash equivalents 12,870 22,867
Receivables:
Customer 74,256 81,245
Allowance for uncollectible
accounts (1,397) (1,397)
Natural gas 59,062 21,426
Notes 4,616 4,643
Employee notes 4,462 4,510
Other 6,609 6,059
Accrued unbilled revenues 26,736 34,610
Materials and supplies (at
average cost) 31,534 30,157
Fuel stock (at average cost) 8,748 7,096
Prepayments 14,759 16,042
Regulatory assets associated
with income taxes 2,965 2,965
Total current assets 245,220 230,223
DEFERRED DEBITS:
American Falls and Milner water
rights 31,830 31,830
Company-owned life insurance 42,481 35,149
Regulatory assets associated
with income taxes 201,596 201,465
Regulatory assets - other 50,669 62,013
Other 49,764 49,994
Total deferred debits 376,340 380,451
TOTAL $ 2,465,798 $ 2,451,620
The accompanying notes are an integral part of these statements.
IDACORP, Inc.
Consolidated Balance Sheets
Capitalization and Liabilities
March 31, December 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) $ 451,185 $ 451,564
Retained earnings 290,641 278,607
Accumulated other
comprehensive income 226 226
Total common stock equity 742,052 730,397
Preferred stock of Idaho Power
Company 105,955 105,968
Long-term debt 734,757 815,937
Total capitalization 1,582,764 1,652,302
CURRENT LIABILITIES:
Long-term debt due within one
year 86,346 6,029
Notes payable 26,712 38,524
Accounts payable 47,738 73,499
Accounts payable - natural gas 47,522 28,476
Taxes accrued 44,503 24,785
Interest accrued 17,713 18,365
Deferred income taxes 2,965 2,965
Other 13,866 12,275
Total current liabilities 287,365 204,918
DEFERRED CREDITS:
Regulatory liabilities associated
with deferred investment 68,859 69,396
tax credits
Deferred income taxes 422,375 422,196
Regulatory liabilities 28,075 28,075
associated with income taxes
Regulatory liabilities - other 960 4,161
Other 75,400 70,572
Total deferred credits 595,669 594,400
COMMITMENTS AND CONTINGENT
LIABILITIES
TOTAL $ 2,465,798 $ 2,451,620
The accompanying notes are an integral part of these statements.
IDACORP, Inc.
Consolidated Statements of Capitalization
March 31, December 31,
1999 % 1998 %
(Thousand of Dollars)
COMMON STOCK EQUITY
Common stock $ 451,185 $ 451,564
Retained earnings 290,641 278,607
Accumulated other comprehensive
income 226 226
Total common stock equity 742,052 47 730,397 44
PREFERRED STOCK OF IDAHO POWER
COMPANY
4% preferred stock 15,955 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 105,955 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 year (80,000) -
Net first mortgage bonds 477,000 557,000
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 24,200 24,200
due 2026
Variable Rate Series 1996C 24,000 24,000
due 2026
Total pollution control 170,460 170,460
revenue bonds
REA notes 1,471 1,489
Amount due within one year (74) (74)
Net REA notes 1,397 1,415
American Falls bond guarantee 20,130 20,130
Milner Dam note guarantee 11,700 11,700
Debt related to investments in
affordable housing with 61,227 62,103
rates ranging from 6.97% to
8.59% due 1999 to 2009
Amount due within one year (6,272) (5,955)
Net affordable housing debt 54,955 56,148
Unamortized premium/discount-Net (1,515) (1,539)
Net Idaho Power Company debt 734,127 815,314
OTHER SUBSIDIARY DEBT 630 623
Total long-term debt 734,757 46 815,937 49
TOTAL CAPITALIZATION $1,582,764 100 $1,652,302 100
The accompanying notes are an integral part of these statements.
IDACORP, Inc.
Consolidated Statements of Cash Flows
Three Months Ended
March 31,
1999 1998
(Thousands of Dollars)
OPERATING ACTIVITIES:
Net income $ 29,501 $ 28,050
Adjustments to reconcile net
income to net cash
provided by operating
activities:
Depreciation and amortization 23,383 21,654
Deferred taxes and investment (489) 1,997
tax credits
Accrued PCA costs 12,185 502
Change in:
Accounts receivable and (29,839) (1,752)
prepayments
Accrued unbilled revenue 7,874 9,516
Materials and supplies and (3,029) (1,717)
fuel stock
Accounts payable (6,715) (22,193)
Taxes accrued 19,718 13,969
Other current assets and 939 (1,172)
liabilities
Other - net (6,408) (6,007)
Net cash provided by operating 47,120 42,847
activities
INVESTING ACTIVITIES:
Additions to utility plant (21,637) (21,324)
Investments in affordable (2,906) (5,000)
housing projects
Investments in company owned (7,332) -
life insurance
Other - net 5,317 2,226
Net cash used in investing (26,558) (24,098)
activities
FINANCING ACTIVITIES:
Proceeds from issuance of:
Long-term debt related to - 4,084
affordable housing projects
Retirement of long-term debt (877) (116)
Dividends on common stock (17,468) (17,490)
Decrease in short-term (11,812) (8,700)
borrowings
Other - net (402) (94)
Net cash used in financing (30,559) (22,316)
activities
Net decrease in cash and cash (9,997) (3,567)
equivalents
Cash and cash equivalents 22,867 6,905
beginning of period
Cash and cash equivalents at end $ 12,870 $ 3,338
of period
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period
for:
Income taxes $ 514 $ 1,200
Interest (net of amount $ 14,844 $ 15,102
capitalized)
The accompanying notes are an integral part of these statements
IDACORP, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nature of Business
IDACORP, Inc. (IDACORP or the Company), a holding
company formed in 1998, is the parent of Idaho Power
Company (IPC), Ida-West Energy Company, IDACORP Energy
Solutions Co., IDACORP Energy Services Co. and IDACORP
Technologies, Inc. On October 1, 1998 IPC's
outstanding common stock was converted on a share-for-
share basis into common stock of the Company. However,
IPC's preferred stock and debt securities outstanding
were unaffected and remain with IPC.
IPC, a public utility, represents over 90% of the total
assets of the Company and is its principal operating
subsidiary. IPC is regulated by the FERC and the state
regulatory commissions of Idaho, Oregon, Nevada and
Wyoming and is engaged in the generation, transmission,
distribution, sale and purchase of electric energy.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
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 March 31, 1999, and its
consolidated results of operations and cash flows for
the three months ended March 31, 1999 and 1998. These
financial statements do not contain the complete detail
or footnote disclosure concerning accounting policies
and other matters which would be included in full year
financial statements and, therefore, they should be read
in conjunction with the Company's audited 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
measured at fair value as of the balance sheet date with
the resulting gains and losses reported in the income
statement. The resulting impact on net income of
adoption 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" 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.
Comprehensive Income
For the three-month periods ended March 31, 1999 and 1998,
the Company's comprehensive income was not materially
different from net income. The components of comprehensive
income include net income, the Company's proportionate share
of unrealized holding gains on marketable securities held by
an equity investee, and the changes in additional minimum
liability under a deferred compensation plan for certain
senior management employees and directors.
Reclassifications
Certain items previously reported for periods prior to
March 31, 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 three
months increased from 31.9 percent in 1998 to 36.1
percent in 1999. Reconciliations between the statutory
income tax rate and the effective rates for the three-
month periods ended March 31, 1999 and 1998 are as
follows:
1999 1998
Amount Rate Amount Rate
Computed income taxes based
on statutory federal income
tax rate $16,170 35.0% $14,411 35.0%
Changes in taxes resulting from:
Current state income taxes 2,438 5.3 1,715 4.2
Net depreciation 1,360 2.9 1,350 3.3
Investment tax credits restored (739) (1.6) (729) (1.8)
Removal costs (119) (0.3) (653) (1.6)
Repair allowance (525) (1.1) (782) (1.9)
Affordable housing credits (2,272) (4.9) (1,593) (3.9)
Preferred dividends 479 1.0 492 1.2
Other (92) (0.2) (1,086) (2.6)
Total $16,700 36.1% $13,125 31.9%
3. PREFERRED STOCK OF IDAHO POWER COMPANY:
The number of shares of IPC preferred stock outstanding
were as follows:
March 31, December 31,
1999 1998
Cumulative, $100 par value:
4% preferred stock (authorized 215,000 159,549 159,680
shares)
Serial preferred stock, 7.68% Series 150,000 150,000
(authorized 150,000 shares)
Serial preferred stock, cumulative,
without par value; total of 3,000,000
shares authorized:
7.07% Series, $100 stated value, 250,000 250,000
(authorized 250,000 shares)
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 March 31, 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 $12.0 million at
March 31, 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:
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.
In the current rate period, actual power supply costs have
been less than forecast, due to better than forecast
hydroelectric generating conditions. IPC has recorded a
reduction to regulatory assets of $15.3 million as of March
31, 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
available for the benefit of IPC's Idaho customers. The
1997 filing was for $7.6 million.
Some of the 1998 amount has already been committed by the
IPUC for recovery of costs in cases currently pending.
Recommendations regarding the disbursement of any remaining
1998 sharing amounts, have not yet been made to the IPUC.
Demand-Side Management (Conservation) Expenses
IPC has obtained changes to the regulatory treatment of
previously deferred demand-side management (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 is funding the
annual revenue requirement with revenue sharing amounts until
May 16, 1999. A group of industrial customers has appealed
the IPUC order to the Idaho Supreme Court.
In December 1998, IPC filed with the IPUC a request to
recover remaining deferred DSM expenditures of
approximately $2.1 million. The IPUC conducted a hearing
on this matter in March 1999. In the filing IPC requested
that the amount be applied against 1998 earnings sharing
amounts. A decision is pending.
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 is effective
for fiscal years beginning after June 15, 1999. The
Company is reviewing this statement to determine its
effects on the Company's financial position and results
of operations.
8. DERIVATIVE FINANCIAL INSTRUMENTS
The notional amount of open commodity derivative positions as
of March 31, 1999 was a net long electricity position of 3 MW
and a net short natural gas position of 178 BCF.
The loss in fair value of commodity derivative positions
(including natural gas and electricity forwards,
futures, options and swaps) included in income as of
March 31, 1999 was $(0.7) 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, solar electric products and systems,
control systems integration services for substations and
semiconductor manufacturing, and miscellaneous other
services. These revenues, however, 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
March 31, 1999
Revenues $174,149 $ - $174,149
Net income 28,122 1,379 29,501
Total assets 2,258,807 206,991 2,465,798
Three Months Ended
March 31, 1998
Revenues $167,348 $ - $167,348
Net income 27,237 813 28,050
Total assets 2,334,607 112,639 2,447,246
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 March 31, 1999, and the related
consolidated statements of income and cash flows for the
three month periods ended March 31, 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 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
April 30, 1999
Idaho Power Company
Consolidated Statements of Income
Three Months Ended
March 31,
1999 1998
(Thousands of Dollars)
REVENUES:
General business $ 129,692 $ 112,223
Off system sales 37,510 45,591
Other revenues 6,947 9,534
Total revenues 174,149 167,348
EXPENSES:
Operation:
Purchased power 17,888 24,170
Fuel expense 22,020 20,720
Power cost adjustment 9,007 475
Other 32,767 32,947
Maintenance 7,883 9,028
Depreciation 19,171 18,895
Taxes other than 5,584 5,344
income taxes
Total expenses 114,320 111,579
INCOME FROM OPERATIONS 59,829 55,769
OTHER INCOME:
Allowance for equity 157 -
funds used during
construction
Energy trading 726 (328)
activities - Net
Other - Net 1,952 2,101
Total other income 2,835 1,773
INTEREST CHARGES
Interest on long-term 13,360 13,037
debt
Other interest 2,162 2,086
Allowance for borrowed
funds used during (224) (161)
construction
Total interest 15,298 14,962
charges
INCOME BEFORE INCOME 47,366 42,580
TAXES
INCOME TAXES 16,582 13,125
NET INCOME 30,784 29,455
Dividends on preferred 1,368 1,405
stock
EARNINGS ON COMMON STOCK $ 29,416 $ 28,050
The accompanying notes are an integral part of these statements.
Idaho Power Company
Consolidated Balance Sheets
Assets
March 31, December 31,
1999 1998
(Thousands of Dollars)
ELECTRIC PLANT:
In service (at original cost) $ 2,676,592 $ 2,659,441
Accumulated provision for (1,028,346) (1,009,387)
depreciation
In service - Net 1,648,246 1,650,054
Construction work in progress 63,390 58,904
Held for future use 1,742 1,738
Electric plant - Net 1,713,378 1,710,696
INVESTMENTS AND OTHER PROPERTY 104,860 105,600
CURRENT ASSETS:
Cash and cash equivalents 7,381 20,029
Receivables:
Customer 74,252 81,227
Allowance for uncollectible (1,397) (1,397)
accounts
Natural gas - 21,426
Notes 370 467
Employee notes 4,462 4,510
Other (includes $99 from
related parties in 1998 and 7,533 8,502
$909 in 1999)
Accrued unbilled revenues 26,736 34,610
Materials and supplies (at 31,445 30,143
average cost)
Fuel stock (at average cost) 8,748 7,096
Prepayments 14,680 16,011
Regulatory assets associated 2,965 2,965
with income taxes
Total current assets 177,175 225,589
DEFERRED DEBITS:
American Falls and Milner water 31,830 31,830
rights
Company-owned life insurance 42,481 35,149
Regulatory assets associated 201,596 201,465
with income taxes
Regulatory assets - other 50,669 62,013
Other 49,213 49,448
Total deferred debits 375,789 379,905
TOTAL $ 2,371,202 $ 2,421,790
The accompanying notes are an integral part of these statements.
Idaho Power Company
Consolidated Balance Sheets
Capitalization and Liabilities
March 31, December 31,
1999 1998
(Thousands of Dollars)
CAPITALIZATION:
Common stock equity:
Common stock, $2.50 par value
(50,000,000 shares authorized; $ 94,031 $ 94,031
37,612,351 shares outstanding)
Premium on capital stock 362,158 362,156
Capital stock expense (3,823) (3,823)
Retained earnings 264,063 252,137
Accumulated other 226 226
comprehensive income
Total common stock equity 716,655 704,727
Preferred stock 105,955 105,968
Long-term debt 734,757 815,937
Total capitalization 1,557,367 1,626,632
CURRENT LIABILITIES:
Long-term debt due within one 86,346 6,029
year
Notes payable 10,702 38,508
Accounts payable 45,231 72,660
Accounts payable-natural gas - 28,476
Taxes accrued 44,977 25,164
Interest accrued 17,682 18,364
Deferred income taxes 2,965 2,965
Other 13,704 12,117
Total current liabilities 221,607 204,283
DEFERRED CREDITS:
Regulatory liabilities associated
with deferred investment 68,859 69,396
tax credits
Deferred income taxes 420,642 420,268
Regulatory liabilities 28,075 28,075
associated with income taxes
Regulatory liabilities - other 960 4,161
Other 73,692 68,975
Total deferred credits 592,228 590,875
COMMITMENTS AND CONTINGENT
LIABILITIES
TOTAL $ 2,371,202 $ 2,421,790
The accompanying notes are an integral part of these statements.
Idaho Power Company
Consolidated Statements of Capitalization
March 31, December 31,
1999 % 1998 %
(Thousands of Dollars)
COMMON STOCK EQUITY
Common stock $ 94,031 $ 94,031
Premium on capital stock 362,158 362,156
Capital stock expense (3,823) (3,823)
Retained earnings 264,063 252,137
Accumulated other 226 226
comprehensive income
Total common stock equity 716,655 46 704,727 43
PREFERRED STOCK
4% preferred stock 15,955 15,968
7.68% Series, serial 15,000 15,000
preferred stock
7.07% Series, serial 25,000 25,000
preferred stock
Auction rate preferred stock 50,000 50,000
Total preferred stock 105,955 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 230,000 230,000
7.5% to 9.52%
Total first mortgage bonds 557,000 557,000
Amount due within one year (80,000) -
Net first mortgage bonds 477,000 557,000
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 24,200 24,200
due 2026
Variable Rate Series 1996C 24,000 24,000
due 2026
Total pollution control 170,460 170,460
revenue bonds
REA notes 1,471 1,489
Amount due within one year (74) (74)
Net REA notes 1,397 1,415
American Falls bond guarantee 20,130 20,130
Milner Dam note guarantee 11,700 11,700
Debt related to investments
in affordable housing with 61,227 62,103
rates ranging from 6.97% to
8.59% due 1999 to 2009
Amount due within one year (6,272) (5,955)
Net affordable housing 54,955 56,148
debt
Other subsidiary debt 630 623
Unamortized premium/discount (1,515) (1,539)
- - Net
Total long-term debt 734,757 47 815,937 50
TOTAL CAPITALIZATION $1,557,367 100 $1,626,632 100
The accompanying notes are an integral part of these statements.
Idaho Power Company
Consolidated Statements of Cash Flows
Three Months Ended
March 31,
1999 1998
(Thousands of Dollars)
OPERATING ACTIVITIES:
Net income $ 30,784 $ 29,455
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 23,339 21,654
Deferred taxes and investment (294) 1,997
tax credits
Accrued PCA costs 12,185 502
Change in:
Accounts receivable and 30,847 (1,752)
prepayments
Accrued unbilled revenue 7,874 9,516
Materials and supplies and (2,955) (1,717)
fuel stock
Accounts payable (55,905) (22,193)
Taxes accrued 19,813 13,969
Other current assets and 905 (1,172)
liabilities
Other - net (5,416) (6,007)
Net cash provided by operating 61,177 44,252
activities
INVESTING ACTIVITIES:
Additions to utility plant (21,057) (21,324)
Investments in affordable (2,906) (5,000)
housing projects
Investments in company owned (7,332) -
life insurance
Other - net 5,032 2,226
Net cash used in investing (26,263) (24,098)
activities
FINANCING ACTIVITIES:
Proceeds from issuance of long-
term debt
related to affordable housing - 4,084
projects
Retirement of long-term debt (877) (116)
Dividends on common stock (17,490) (17,490)
Dividends on preferred stock (1,368) (1,405)
Decrease in short-term (27,806) (8,700)
borrowings
Other - net (21) (94)
Net cash used in financing (47,562) (23,721)
activities
Decrease in cash and cash (12,648) (3,567)
equivalents
Cash and cash equivalents 20,029 6,905
beginning of period
Cash and cash equivalents at end $ 7,381 $ 3,338
of period
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period
for:
Income taxes $ 9 $ 1,200
Interest (net of amount $ 14,810 $ 15,102
capitalized)
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 March 31,
1998 Statement of Consolidated Income includes $0.5 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
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 three months
increased from 30.8 percent in 1998 to 35.0 percent in
1999. Reconciliations between the statutory income tax
rate and the effective rates for the three -month
periods ended March 31, 1999 and 1998 are as follows:
1999 1998
Amount Rate Amount Rate
Computed income taxes based on statutory
federal income tax rate $16,578 35.0% $14,903 35.0%
Changes in taxes resulting from:
Current state income taxes 2,438 5.1 1,715 4.0
Net depreciation 1,360 2.9 1,350 3.2
Investment tax credits restored (739) (1.6) (729) (1.7)
Removal costs (119) (0.3) (653) (1.5)
Repair allowance (525) (1.1) (782) (1.8)
Affordable housing credit (2,272) (4.8) (1,593) (3.7)
Other (139) (0.2) (1,086) (2.7)
Total $16,582 35.0% $13,125 30.8%
8. DERIVATIVE FINANCIAL INSTRUMENTS:
The notional amount of open commodity derivative positions
as of March 31, 1999 was a net long electricity position of
3 MW. The loss in fair value of commodity derivative positions
(including electricity forwards, futures, options and swaps)
included in income as of March 31, 1999 was $(1.3) 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 solar electric
products and systems, control systems integration services
for substations and semiconductor manufacturing, 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
March 31, 1999
Revenues $ 174,149 $ - $ 174,149
Net income 28,122 2,662 30,784
Total assets 2,258,807 112,395 2,371,202
Three Months Ended
March 31, 1998
Revenues $ 167,348 $ - $ 167,348
Net income 27,237 2,218 29,455
Total assets 2,334,607 112,639 2,447,246
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 March 31, 1999, and the
related consolidated statements of income and cash flows
for the three month periods ended March 31, 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 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
April 30, 1999
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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 for the
quarters ending March 31, 1999 and 1998.
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
the quarters ending March 31, 1999 and 1998. 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,
operation 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 $0.78
for the quarter ended March 31, 1999, an increase of $0.03 (4.0
percent) from the same quarter last year. At March 31, 1999, the
book value per share of IDACORP common stock was $19.73, compared
to $19.20 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 first quarter of 1998, the number of general
business customers we served increased 3.1 percent. This
increase was due primarily to economic growth in our service
territory.
Our revenue per MWh increased 10.4 percent for the quarter ended
March 31, 1999, compared to 1998. Changes in revenue per MWh
result from the annual rate adjustments authorized by regulatory
authorities. These adjustments are discussed below in "PCA"
and "Regulatory Settlement."
Temperatures in the first quarter were cooler in 1999 than in
1998, which contributed to increased sales of energy. Heating
degree days, a common measure used in the utility industry to
analyze demand, were 10.5 percent above 1998 levels. Compared to
1998, the average Kwh's sold per general business customer
increased 1.6 percent.
The combination of these factors resulted in a $17.5 million
(15.6 percent) increase in general business revenue for the
quarter compared to 1998.
Off System Sales
Off-system sales are comprised of long-term sales contracts and
opportunity sales made when we have surplus energy available.
The $8.1 million (17.7 percent) decrease in off-system revenue is
due primarily to a 17.7 percent decrease in MWhs sold, which
resulted from reduced market opportunities.
Expenses
Purchased power expenses decreased $6.3 million (26.0 percent)
for the quarter. This decrease is due primarily to a 45.5
percent decrease in MWhs purchased, offset by an increase in the
price per MWh. The decrease in MWh purchased results from
decreased availability of economically advantageous purchases.
Fuel expenses increased $1.3 million (6.3 percent), due primarily
to an increase in the average cost of coal used at our coal-fired
power plants.
The PCA component of expenses increased $8.5 million. 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
first quarter of 1999, actual power supply costs were well below
what had been forecast; in the first quarter of 1998 actual power
supply costs were near the forecast. The 1998-99 forecast used
to set the 1998-99 PCA rate adjustment, anticipated near-normal
streamflow conditions. Actual conditions have been better than
forecasted and are discussed below in "Streamflow Conditions."
We discuss the PCA in more detail below in "PCA."
Maintenance expenses decreased $1.1 million (12.7 percent). This
decrease is due primarily to a decrease in expenses at our coal-
fired generating facilities.
Other
The increase in other income is due primarily to improved margins
on energy trading.
Income taxes increased due primarily to increased net income
before taxes and the impact of a tax settlement which reduced
expenses in 1998.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
For the three months ended March 31, 1999, IDACORP generated
$47.1 million in net cash from operations. After deducting for
dividends, net cash generation from operations provided
approximately $29.7 million for our construction program and
other capital requirements.
Cash Expenditures
We estimate that our cash construction program for 1999 will
require approximately $115.5 million. This estimate is subject
to revision in light of changing economic, regulatory,
environmental, and conservation factors. During the first three
months of 1999, we spent approximately $21.6 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
March 31, 1999, our short-term borrowings totaled $26.7 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 March 31, 1999, none had been
issued.
IPC has a $200 million shelf registration statement that can be
used for both First Mortgage Bonds (including Medium Term Notes)
and Preferred Stock of which $83 million remains available at
March 31, 1999.
Our objective is to maintain capitalization ratios of
approximately 45 percent common equity, 5 to 10 percent preferred
stock, and the balance in long-term debt. For the twelve-month
period ended March 31, our consolidated pre-tax interest coverage
was 3.27 times.
REGULATORY ISSUES
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.
In the current rate period, actual power costs have been less
than forecast, due to better than forecast hydroelectric
generating conditions. For the rate period we have recorded a
reduction to regulatory assets of $15.3 million as of March 31,
1999.
On April 15, 1999, we filed a request with the IPUC to implement
the annual PCA. If approved, the adjustment would reduce all
Idaho residential customer electricity rates by seven percent.
The decrease results from 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.
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 available for the benefit of
our Idaho customers. Our 1997 and 1996 filings were for $7.6
million and $4.9 million, respectively.
Some of the 1998 amount has already been committed by the IPUC
for recovery of costs in cases currently pending. We have not
made any recommendations to the IPUC regarding the disbursement
of any remaining 1998 sharing amounts.
OTHER MATTERS:
Energy Trading
Energy trading activity, which includes both electricity and
natural gas, 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 energy
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, comprised 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 of energy prices. Embedded within
the Risk Management policy and procedures is a credit policy
requiring a credit evaluation of all counterparties before doing
business with them. 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. The National Weather
Service is projecting that April-July 1999 inflow into Brownlee
Reservoir, Idaho Power's key water storage facility, will be 7.36
MAF, compared to the 70-year median of 4.9 MAF and 1998's 8.8
MAF.
Year 2000 Costs
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 affiliate 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 appointed a full-
time Year 2000 Project Manager to direct the project. Additional
staff has been committed to complete the conversion and
implementation needed to bring non-compliant items into
compliance. This staff consists of a mix of end users, IPC
Information Services staff and contract programmers. Currently,
there are over 20 full-time employees devoted to the project with
dozens of others involved to varying degrees. We have retained
third parties who have completed technical and legal audits of
our plan. With respect to the technical audit, we have
implemented the recommendations as recommended by the Y2K
Steering Committee. The legal audit recommendations are also
being implemented.
We have targeted July 1999 as the date by which we expect to be
ready for the Year 2000. This means that all critical systems
are expected to be capable of handling the century rollover and
that we will be able to continue servicing our customers without
interruption. It also means that all of the less critical
systems are expected to have been identified and that contingency
and/or repair plans are expected to be 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,
generation plants, (parts of which are owned by IPC but is
operated by another electric utility), (ii) remediation and
testing, (iii) education and awareness and (iv) contingency
planning.
With respect to that key component of the methodology related to
the identification of critical systems, we have identified those
critical systems that must be Year 2000 compliant in order to
continue operations. Many are already compliant or are in the
process of vendor upgrades to become compliant. The largest of
these critical systems and their status regarding compliance are
set forth below:
System Description Status
Business The business systems include the PeopleSoft
Systems financial and administrative and PassPort
functions common to most companies. are both
Business systems include accounts compliant
payable, general ledger, accounts vendor
receivable, labor entry, inventory, packages.
purchasing, cash management, Testing to
budgeting, asset management, verify
payroll, and financial reporting. compliance
is complete.
Customer This system is used to bill In-house
Information customers, log calls from customers system has
System and create service or work requests been
and track them through completion, repaired;
among other things. At this time, testing is
the Company uses an in-house underway,
developed, mainframe-based Customer with a
Information System to accomplish projected
these tasks. July 1999
completion
date.
Energy The most critical function the The packages
Management Company offers is the delivery of comprising
System electricity from the source to the the EMS are
consumer. This must be done with fully
minimal interruption in the midst of compliant
high demand, weather anomalies and with the
equipment failures. To accomplish latest
this, the Company relies on a server- releases.
based energy management system Testing and
provided by Landis & Gyr. This rollout are
system monitors and directs the over 50%
delivery of electricity throughout complete and
the Company's service area. will be
completed in
the second
quarter of
1999.
Metering The Company relies on several In-house
Systems processes for metering electricity code has
usage, including some hand-held been
devices with embedded chips. It is repaired and
critical for metering systems to tested.
operate without interruption so as Vendor
not to jeopardize the Company's packages are
revenue stream. being
upgraded.
Testing is
underway
with
completion
scheduled
for the
second
quarter of
1999.
Embedded There is a category of systems on Testing is
Systems which the Company is highly reliant about 90%
called embedded systems. These are complete.
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 The Company also relies on a number In various
Systems of other important systems to stages of
support engineering, human repair and
resources, safety and regulatory testing.
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, the plan methodology includes a
process wherein some members of the Year 2000 team meet
periodically with the third parties to assess the status of their
efforts. This is an ongoing process and will continue until such
time as the third party has completed compliance testing and
certified to us that they are compliant. Regarding the 93 key
manufacturers we have contacted all via mail and requested they
complete a survey indicating the extent and status of their Year
2000 efforts. The survey is followed up with contact by
telephone if necessary. We are over 90% complete with that
effort.
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 a nationwide Y2K drill for electric utilities, held on
April 9, 1999.
Our estimate of the cost of our Year 2000 plan remains at
approximately $5.3 million. This includes costs incurred to date
of approximately $2.3 million 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 10 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 that may enhance 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 which 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
the size of those businesses that are forced to discontinue
business activities because of the Year 2000 issue.
As part of our Year 2000 plan, we are in the process of
developing contingency plans and expect to complete this process
on or before July 1999.
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 is effective for fiscal years beginning
after June 15, 1999. We are reviewing this statement to
determine its effects on our financial position and results of
operations.
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) 33-00440 4(a)(xiv) By-laws of IPC amended on June 30,
1989, 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 Restated
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) 333-48031 3(c) Amended Bylaws of IDACORP, Inc. as
of September 10, 1998.
*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:
IPC Number Dated
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) Instruments relating to IPC
American Falls bond guarantee. (See
Exhibit 10(c)).
*4(c) 33-65720 4(f) Agreement of IPC to furnish certain
debt instruments.
*4(d) 33-00440 2(a)(iii) Agreement and Plan of Merger dated
March 10, 1989, between Idaho Power
Company, a Maine Corporation, and
Idaho Power Migrating Corporation.
*4(e) 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(e)(i) 1-3198 4(e)(i) Agreement dated as of January 30,
Form 10-K 1998, related to agreement filed as
for 1997 Exhibit 4(e).
*4(f) 1-14465 4 Rights Agreement, dated as of
Form 8-K September 10, 1998, between
dated IDACORP, Inc. and the Bank of New
September York as Rights Agent.
15, 1998
*10(a) 2-49584 5(b) Agreements, dated September 22,
1969, between IPC and Pacific
Power & Light Company relating to
the operation, construction and
ownership of the Jim Bridger
Project.
*10(a)(i) 2-51762 5(c) Amendment, dated February 1, 1974,
relating to operation agreement
filed as Exhibit 10(a).
*10(b) 2-49584 5(c) Agreement, dated as of October 11,
1973, between IPC and Pacific
Power & Light Company.
*10(c) 33-65720 10(c) Guaranty Agreement, dated March 1,
1990, between IPC and West One
Bank, as Trustee, relating to
$21,425,000 American Falls
Replacement Dam Bonds of the
American Falls Reservoir District,
Idaho.
*10(d) 2-62034 5(r) Guaranty Agreement, dated as of
August 30, 1974, between IPC and
Pacific Power & Light Company.
*10(e) 2-56513 5(i) Letter Agreement, dated January 23,
1976, between IPC and Portland
General Electric Company.
*10(e)(i) 2-62034 5(s) Agreement for Construction,
Ownership and Operation of the
Number One Boardman Station on
Carty Reservoir, dated as of
October 15, 1976, between Portland
General Electric Company and IPC.
*10(e)(ii) 2-62034 5(t) Amendment, dated September 30,
1977, relating to agreement filed
as Exhibit 10(e).
*10(e)(iii) 2-62034 5(u) Amendment, dated October 31, 1977,
relating to agreement filed as
Exhibit 10(e).
*10(e)(iv) 2-62034 5(v) Amendment, dated January 23, 1978,
relating to agreement filed as
Exhibit 10(e).
*10(e)(v) 2-62034 5(w) Amendment, dated February 15, 1978,
relating to agreement filed as
Exhibit 10(e).
*10(e)(vi) 2-68574 5(x) Amendment, dated September 1, 1979,
relating to agreement filed as
Exhibit 10(e).
*10(f) 2-68574 5(z) Participation Agreement, dated
September 1, 1979, relating to the
sale and leaseback of coal handling
facilities at the Number One
Boardman Station on Carty
Reservoir.
*10(g) 2-64910 5(y) Agreements for the Operation,
Construction and Ownership of the
North Valmy Power Plant Project,
dated December 12, 1978, between
Sierra Pacific Power Company and
IPC.
*10(h)(i) 1 1-3198 10(n)(i) The Revised Security Plan for
Form 10-K Senior Management Employees - a non-
for 1994 qualified, deferred compensation
plan effective August 1, 1996.
*10(h)(ii) 1 1-3198 10(n)(ii) The Executive Annual Incentive Plan
Form 10-K for senior management employees of
for 1994 IPC effective January 1, 1995.
*10(h)(iii) 1 1-3198 10(n)(iii) The 1994 Restricted Stock Plan for
Form 10-K officers and key executives of
for 1994 IDACORP, Inc. and IPC effective
July 1, 1994.
*10(h)(iv) 1 1-14465 10(h)(iv) The Revised Security Plan for Board
1-3198 of Directors - a non-qualified,
Form 10-K deferred compensation plan
For 1998 effective August 1, 1996, revised
March 2, 1999.
*10(i) 33-65720 10(h) Framework Agreement, dated October
1, 1984, between the State of Idaho
and IPC relating to IPC's Swan
Falls and Snake River water rights.
*10(i)(i) 33-65720 10(h)(i) Agreement, dated October 25, 1984,
between the State of Idaho and IPC
relating to the agreement filed as
Exhibit 10(i).
*10(i)(ii) 33-65720 10(h)(ii) Contract to Implement, dated
October 25, 1984, between the State
of Idaho and IPC relating to the
agreement filed as Exhibit 10(i).
*10(j) 33-65720 10(m) Agreement Regarding the Ownership,
Construction, Operation and
Maintenance of the Milner
Hydroelectric Project (FERC No.
2899), dated January 22, 1990,
between IPC and the Twin Falls
Canal Company and the Northside
Canal Company Limited.
*10(j)(i) 33-65720 10(m)(i) Guaranty Agreement, dated February
10, 1992, between IPC and New York
Life Insurance Company, as Note
Purchaser, relating to $11,700,000
Guaranteed Notes due 2017 of Milner
Dam Inc.
*10(k) 1-3198 10(y) Executive Employment Agreement
Form 10-K dated November 20, 1996 between IPC
for 1997 and Richard R. Riazzi.
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)
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 March 31,
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 May 10, 1999 By: /s/ J LaMont Keen
J LaMont Keen
Senior Vice President
Administration
and Chief Financial Officer
(Principal Financial
Officer)
Date May 10, 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 May 10, 1999 By: /s/ J LaMont Keen
J LaMont Keen
Senior Vice President
Administration
and Chief Financial Officer
(Principal Financial
Officer)
Date May 10, 1999 By: /s/ Darrel T. Anderson
Darrel T. Anderson
Vice President Finance
and Treasurer
(Principal Accounting
Officer)
_______________________________
1 Compensatory plan
<TABLE>
<CAPTION>
Ex-12
IDACORP
Consolidated Financial Information
Ratio of Earnings to Fixed Charges
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) March 31,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined:
Income before income taxes.................. $101,775 $127,342 $135,247 $133,570 $133,806 $138,831
Adjust for distributed income of equity
investees................................. 326 (2,058) (1,413) (3,943) (4,697) (7,490)
Equity in loss of equity method investments. 0 0 0 0 458 611
Minority interest in losses of majority
owned subs................................ 0 0 0 0 (125) (102)
Fixed charges, as below..................... 66,324 70,215 70,418 69,634 69,923 70,504
Total earnings, as defined.............. $168,425 $195,499 $204,252 $199,261 $199,365 $202,354
Fixed charges, as defined:
Interest charges............................ $54,433 $56,456 $57,348 $60,761 $60,677 $61,179
Preferred stock dividends of subsidiaries-
gross up-Idcrp rate....................... 11,097 12,834 12,079 7,891 8,445 8,391
Rental interest factor...................... 794 925 991 982 801 934
Total fixed charges, as defined......... $66,324 $70,215 $70,418 $69,634 $69,923 $70,504
Ratio of earnings to fixed charges.............. 2.54x 2.78x 2.90x 2.86x 2.85x 2.87x
Exhibit 12
</TABLE>
<TABLE>
<CAPTION>
Ex-12a
IDACORP
Consolidated Financial Information
Supplemental Ratio of Earnings to Fixed Charges
Twelve Months Ended December 31, Twelve Months
(Thousands of Dollars) Ended
March 31,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined:
Income before income taxes.................. $101,775 $127,342 $135,247 $133,570 $133,806 $138,831
Adjust for distributed income of equity
investees................................. 326 (2,058) (1,413) (3,943) (4,697) (7,490)
Equity in loss of equity method
investments............................... 0 0 0 0 458 611
Minority interest in losses of
majority owned subs....................... 0 0 0 0 (125) (102)
Supplemental fixed charges, as below........ 68,946 72,826 73,018 72,208 72,496 73,073
Total earnings, as defined.............. $171,047 $198,110 $206,852 $201,835 $201,938 $204,923
Fixed charges, as defined:
Interest charges............................ $54,433 $56,456 $57,348 $60,761 $60,677 $61,179
Preferred stock dividends of subsidiaries-
gross up-Idcrp rate....................... 11,097 12,834 12,079 7,891 8,445 8,391
Rental interest factor...................... 794 925 991 982 801 934
Total fixed charges..................... 66,324 70,215 70,418 69,634 69,923 70,504
Supplemental increment to fixed charges*.... 2,622 2,611 2,600 2,574 2,573 2,569
Total supplemental fixed charges........ $68,946 $72,826 $73,018 $72,208 $72,496 $73,073
Supplemental ratio of earnings to fixed charges. 2.48x 2.72x 2.83x 2.80x 2.79x 2.80x
* Explanation of increment:
Interest on the guaranty of American Falls Reservoir District bonds
and Milner Dam Inc. notes which are already included in operating expense.
Exhibit 12-A
</TABLE>
<TABLE>
<CAPTION>
Ex-12b
IDACORP
Consolidated Financial Information
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements
Twelve Months Ended December 31, Twelve Months
(Thousands of Dollars) Ended
March 31,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined:
Income before income taxes.................. $101,775 $127,342 $135,247 $133,570 $133,806 $138,831
Adjust for distributed income of equity
investees................................. 326 (2,058) (1,413) (3,943) (4,697) (7,490)
Equity in loss of equity method
investments............................... 0 0 0 0 458 611
Minority interest in losses of majority
owned subs................................ 0 0 0 0 (125) (102)
Fixed charges, as below..................... 66,324 70,215 70,418 69,634 69,923 70,504
Total earnings, as defined.............. $168,425 $195,499 $204,252 $199,261 $199,365 $202,354
Fixed charges, as defined:
Interest charges............................ $54,433 $56,456 $57,348 $60,761 $60,677 $61,179
Preferred stock dividends of subsidiaries-
gross up-Idcrp rate....................... 11,097 12,834 12,079 7,891 8,445 8,391
Rental interest factor...................... 794 925 991 982 801 934
Total fixed charges..................... 66,324 70,215 70,418 69,634 69,923 70,504
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 $70,504
Ratio of earnings to combined fixed charges
and preferred dividends....................... 2.54x 2.78x 2.90x 2.86x 2.85x 2.87x
Exhibit 12-B
</TABLE>
<TABLE>
<CAPTION>
Ex-12c
IDACORP
Consolidated Financial Information
Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements
Twelve Months Ended December 31, Twelve Months
(Thousands of Dollars) Ended
March 31,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined:
Income before income taxes.................. $101,775 $127,342 $135,247 $133,570 $133,806 $138,831
Adjust for distributed income of equity
investees................................. 326 (2,058) (1,413) (3,943) (4,697) (7,490)
Equity in loss of equity method
investments............................... 0 0 0 0 458 611
Minority interest in losses of majority
owned subs................................ 0 0 0 0 (125) (102)
Supplemental fixed charges and Pref Div,
as below.................................. 68,946 72,826 73,018 72,208 72,496 73,073
Total earnings, as defined.............. $171,047 $198,110 $206,852 $201,835 $201,938 $204,923
Fixed charges, as defined:
Interest charges............................ $54,433 $56,456 $57,348 $60,761 $60,677 $61,179
Preferred stock dividends of subsidiaries-
gross up-Idcrp rate....................... 11,097 12,834 12,079 7,891 8,445 8,391
Rental interest factor...................... 794 925 991 982 801 934
Total fixed charges..................... 66,324 70,215 70,418 69,634 69,923 70,504
Supplemental increment to fixed charges*.... 2,622 2,611 2,600 2,574 2,573 2,569
Supplemental fixed charges.................. 68,946 72,826 73,018 72,208 72,496 73,073
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 $73,073
Supplemental ratio of earnings to combined fixed
charges...................................... 2.48x 2.72x 2.83x 2.80x 2.79x 2.80x
* Explanation of increment: Exhibit 12-C
interest on the guaranty of American Falls District bonds
and Milner Dam Inc. notes which are already included in operating expense.
</TABLE>
<TABLE>
<CAPTION>
Ex-12d
Idaho Power Company
Consolidated Financial Information
Ratio of Earnings to Fixed Charges
Twelve Months Ended December 31, Twelve Months
(Thousands of Dollars) Ended
March 31,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined:
Income before income taxes.................. $109,173 $135,333 $142,710 $138,746 $140,984 $145,770
Adjust for distributed income of equity
investees................................. 326 (2,058) (1,413) (3,943) (4,697) (7,490)
Equity in loss of equity method
investment................................ 0 0 0 0 476 611
Minority interest in losses of majority
owned subs................................ 0 0 0 0 (125) (102)
Fixed charges, as below..................... 55,227 57,381 58,339 61,743 61,478 61,926
Total earnings, as defined.............. $164,726 $190,656 $199,636 $196,546 $198,116 $200,715
Fixed charges, as defined:
Interest charges............................ $54,433 $56,456 $57,348 $60,761 $60,677 $60,992
Rental interest factor...................... 794 925 991 982 801 934
Total fixed charges, as defined....... $55,227 $57,381 $58,339 $61,743 $61,478 $61,926
Ratio of earnings to fixed charges.............. 2.98x 3.32x 3.42x 3.18x 3.22x 3.24x
Exhibit 12-D
</TABLE>
<TABLE>
<CAPTION>
Ex-12e
Idaho Power Company
Consolidated Financial Information
Supplemental Ratio of Earnings to Fixed Charges
Twelve Months Ended December 31, Twelve Months
(Thousands of Dollars) Ended
March 31,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined:
Income before income taxes.................. $109,173 $135,333 $142,710 $138,746 $140,984 $145,770
Adjust for distributed income of equity
investees................................. 326 (2,058) (1,413) (3,943) (4,697) (7,490)
Equity in loss of equity method
investments............................... 0 0 0 0 476 611
Minority interest in losses of majority
owned subs................................ 0 0 0 0 (125) (102)
Supplemental fixed charges, as below........ 57,849 59,992 60,939 64,317 64,051 64,495
Total earnings, as defined.............. $167,348 $193,267 $202,236 $199,120 $200,689 $203,284
Fixed charges, as defined:
Interest charges............................ $54,433 $56,456 $57,348 $60,761 $60,677 $60,992
Rental interest factor...................... 794 925 991 982 801 934
Total fixed charges..................... 55,227 57,381 58,339 61,743 61,478 61,926
Supplemental increment to fixed charges*.... 2,622 2,611 2,600 2,574 2,573 2,569
Total supplemental fixed charges........ $57,849 $59,992 $60,939 $64,317 $64,051 $64,495
Supplemental ratio of earnings to fixed charges. 2.89x 3.22x 3.32x 3.10x 3.13x 3.15x
* Explanation of increment:
Interest on the guaranty of American Falls Reservoir District bonds
and Milner Dam Inc. notes which are already included in operating expense.
Exhibit 12-E
</TABLE>
<TABLE>
<CAPTION>
Ex-12f
Idaho Power Company
Consolidated Financial Information
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements
Twelve Months Ended December 31, Twelve Months
(Thousands of Dollars) Ended
March 31,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined:
Income before income taxes.................. $109,173 $135,333 $142,710 $138,746 $140,984 $145,770
Adjust for distributed income of equity
investees................................. 326 (2,058) (1,413) (3,943) (4,697) (7,490)
Equity in loss of equity mehtod
investments............................... 0 0 0 0 476 611
Minority interest in losses of majority
owned subs................................ 0 0 0 0 (125) (102)
Fixed charges, as below..................... 55,227 57,381 58,339 61,743 61,478 61,926
Total earnings, as defined.............. $164,726 $190,656 $199,636 $196,546 $198,116 $200,715
Fixed charges, as defined:
Interest charges............................ $54,433 $56,456 $57,348 $60,761 $60,677 $60,992
Rental interest factor...................... 794 925 991 982 801 934
Total fixed charges..................... 55,227 57,381 58,339 61,743 61,478 61,926
Preferred stock dividends-gross up-Ipco
rate...................................... 10,682 12,392 12,146 7,803 8,275 8,357
Total combined fixed charges and
preferred dividends.................. $65,909 $69,773 $70,485 $69,546 $69,753 $70,283
Ratio of earnings to combined fixed charges and
preferred dividends.......................... 2.50x 2.73x 2.83x 2.83x 2.84x 2.86x
Exhibit 12-F
</TABLE>
<TABLE>
<CAPTION>
Ex-12g
Idaho Power Company
Consolidated Financial Information
Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements
Twelve Months Ended December 31, Twelve Months
(Thousands of Dollars) Ended
March 31,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined:
Income before income taxes.................. $109,173 $135,333 $142,710 $138,746 $140,984 145,770
Adjust for distributed income of equity
investees................................. 326 (2,058) (1,413) (3,943) (4,697) (7,490)
Equity in loss of equity method
investments............................... 0 0 0 0 476 611
Minority interest in losses of majority
owned subs................................ 0 0 0 0 (125) (102)
Supplemental fixed charges and Pref Div,
as below.................................. 57,849 59,992 60,939 64,317 64,051 64,495
Total earnings, as defined.............. 167,348 $193,267 $202,236 $199,120 $200,689 $203,284
Fixed charges, as defined:
Interest charges............................ 54,433 $56,456 $57,348 $60,761 $60,677 $60,992
Rental interest factor...................... 794 925 991 982 801 934
Total fixed charges..................... 55,227 57,381 58,339 61,743 61,478 61,926
Supplemental increment to fixed charges*.... 2,622 2,611 2,600 2,574 2,573 2,569
Supplemental fixed charges.................. 57,849 59,992 60,939 64,317 64,051 64,495
Preferred stock dividends-gross up-Ipco
rate...................................... 10,682 12,392 12,146 7,803 8,275 8,357
Total combined supplemental fixed
charges and preferred dividends...... $68,531 $72,384 $73,085 $72,120 $72,326 $72,852
Supplemental ratio of earnings to combined fixed
charges...................................... 2.44x 2.67x 2.77x 2.76x 2.77x 2.79x
* Explanation of increment: Exhibit 12-G
interest on the guaranty of American Falls District bonds
and Milner Dam Inc. notes which are already included in operating expense.
</TABLE>
Exhibit 15
May 10, 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 March 31, 1999 and 1998, as indicated in our reports
dated April 30, 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 March
31, 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 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
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from IDACORP,
Inc. and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,714,771
<OTHER-PROPERTY-AND-INVEST> 129,467
<TOTAL-CURRENT-ASSETS> 245,220
<TOTAL-DEFERRED-CHARGES> 376,340
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,465,798
<COMMON> 451,185
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 290,867
<TOTAL-COMMON-STOCKHOLDERS-EQ> 742,052
0
105,955
<LONG-TERM-DEBT-NET> 721,030
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 13,727
<COMMERCIAL-PAPER-OBLIGATIONS> 26,712
<LONG-TERM-DEBT-CURRENT-PORT> 86,346
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 769,976
<TOT-CAPITALIZATION-AND-LIAB> 2,465,798
<GROSS-OPERATING-REVENUE> 174,149
<INCOME-TAX-EXPENSE> 16,700
<OTHER-OPERATING-EXPENSES> 114,320
<TOTAL-OPERATING-EXPENSES> 131,020
<OPERATING-INCOME-LOSS> 43,129
<OTHER-INCOME-NET> 3,140
<INCOME-BEFORE-INTEREST-EXPEN> 46,269
<TOTAL-INTEREST-EXPENSE> 16,768
<NET-INCOME> 29,501
0
<EARNINGS-AVAILABLE-FOR-COMM> 29,501
<COMMON-STOCK-DIVIDENDS> 17,468
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 47,120
<EPS-PRIMARY> 0.78
<EPS-DILUTED> 0.78
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Idaho Power
Company and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,713,378
<OTHER-PROPERTY-AND-INVEST> 104,860
<TOTAL-CURRENT-ASSETS> 177,175
<TOTAL-DEFERRED-CHARGES> 375,789
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,371,202
<COMMON> 94,031
<CAPITAL-SURPLUS-PAID-IN> 358,353
<RETAINED-EARNINGS> 264,271
<TOTAL-COMMON-STOCKHOLDERS-EQ> 716,655
0
105,955
<LONG-TERM-DEBT-NET> 721,030
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 13,727
<COMMERCIAL-PAPER-OBLIGATIONS> 10,702
<LONG-TERM-DEBT-CURRENT-PORT> 86,346
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 716,787
<TOT-CAPITALIZATION-AND-LIAB> 2,371,202
<GROSS-OPERATING-REVENUE> 174,149
<INCOME-TAX-EXPENSE> 16,582
<OTHER-OPERATING-EXPENSES> 114,320
<TOTAL-OPERATING-EXPENSES> 130,902
<OPERATING-INCOME-LOSS> 43,247
<OTHER-INCOME-NET> 2,835
<INCOME-BEFORE-INTEREST-EXPEN> 46,082
<TOTAL-INTEREST-EXPENSE> 15,298
<NET-INCOME> 30,784
1,368
<EARNINGS-AVAILABLE-FOR-COMM> 29,416
<COMMON-STOCK-DIVIDENDS> 17,490
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 61,117
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
