UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-3198
IDAHO POWER COMPANY
(Exact name of registrant as specified in its charter)
Idaho 82-0130980
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1221 W. Idaho Street, Boise, Idaho 83702-5627
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (208) 383-2200
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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Number of shares of Common Stock, $2.50 par value, outstanding as of
October 31, 1994 is 37,612,351.
IDAHO POWER COMPANY
Index
Part I. Financial Information: Page No
Item 1. Financial Statements
Consolidated Statements of Income - Three Months,
Nine Months and Twelve Months Ended September 30,
1994 and September 30, 1993 3-5
Consolidated Balance Sheets - September 30, 1994
and December 31, 1993 6, 7
Consolidated Statements of Cash Flows -
Nine Months and Twelve Months Ended September 30,
1994 and September 30, 1993 8, 9
Consolidated Statements of Capitalization -
September 30, 1994 and December 31, 1993 10
Notes to Consolidated Financial Statements 11-12
Report on Review by Independent Accountants 13
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 14-23
Part II. Other Information:
Item 1. Legal Proceedings 24-25
Item 6. Exhibits and Reports on Form 8-K 26-27
Signatures 28
<TABLE> PART I - FINANCIAL INFORMATION
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
Item 1. Financial Statements
<CAPTION>
Three Months Ended
September 30, Increase
1994 1993 (Decrease)
(Thousands of Dollars)
<S> <C> <C> <C>
REVENUES (Notes 1 and 4) $151,031 $134,577 $ 16,454
EXPENSES (Notes 1 and 4):
Operation:
Purchased power 28,576 21,310 7,266
Fuel expense 28,679 21,952 6,727
Other 26,822 24,413 2,409
Maintenance 11,081 11,315 (234)
Depreciation 16,101 15,536 565
Taxes other than income taxes 6,163 5,765 398
Total expenses 117,422 100,291 17,131
INCOME FROM OPERATIONS 33,609 34,286 (677)
OTHER INCOME:
Allowance for equity funds used during
construction (Note 2) 438 788 (350)
Other - Net 3,618 3,542 76
Total other income 4,056 4,330 (274)
INTEREST CHARGES:
Interest on long-term debt 12,793 12,992 (199)
Other interest 942 578 364
Total interest charges 13,735 13,570 165
Allowance for borrowed funds used
during construction (Note 2) (509) (489) (20)
Net interest charges 13,226 13,081 145
INCOME BEFORE INCOME TAXES 24,439 25,535 (1,096)
INCOME TAXES 8,150 9,108 (958)
NET INCOME 16,289 16,427 (138)
Dividends on preferred stock 1,862 1,565 297
EARNINGS ON COMMON STOCK $ 14,427 $ 14,862 $ (435)
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 36,785 N/A
Earnings per share of common stock $ 0.38 $ 0.40 $ (0.02)
Dividends paid per share of common stock $ 0.465 $ 0.465 $ -
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE> IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<CAPTION>
Nine Months Ended
September 30, Increase
1994 1993 (Decrease)
(Thousands of Dollars)
<S> <C> <C> <C>
REVENUES (Notes 1 and 4) $ 408,382 $ 404,857 $ 3,525
EXPENSES (Notes 1 and 4):
Operation:
Purchased power 53,717 39,677 14,040
Fuel expense 70,754 58,661 12,093
Other 80,835 95,577 (14,742)
Maintenance 32,875 32,334 541
Depreciation 47,661 46,447 1,214
Taxes other than income taxes 17,538 17,416 122
Total expenses 303,380 290,112 13,268
INCOME FROM OPERATIONS 105,002 114,745 (9,743)
OTHER INCOME:
Allowance for equity funds used during
construction (Note 2) 1,552 2,168 (616)
Other - Net 8,406 8,689 (283)
Total other income 9,958 10,857 (899)
INTEREST CHARGES:
Interest on long-term debt 38,384 40,911 (2,527)
Other interest 2,231 1,299 932
Total interest charges 40,615 42,210 (1,595)
Allowance for borrowed funds used
during construction (Note 2) (1,344) (1,894) 550
Net interest charges 39,271 40,316 (1,045)
INCOME BEFORE INCOME TAXES 75,689 85,286 (9,597)
INCOME TAXES 24,110 28,988 (4,878)
NET INCOME 51,579 56,298 (4,719)
Dividends on preferred stock 5,470 4,228 1,242
EARNINGS ON COMMON STOCK $ 46,109 $ 52,070 $ (5,961)
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,461 36,563 N/A
Earnings per share of common stock $ 1.23 $ 1.42 $ (0.19)
Dividends paid per share of common stock $ 1.395 $ 1.395 $ -
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE> IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<CAPTION>
Twelve Months Ended
September 30, Increase
1994 1993 (Decrease)
(Thousands of Dollars)
<S> <C> <C> <C>
REVENUES (Notes 1 and 4) $ 543,927 $ 534,791 $ 9,136
EXPENSES (Notes 1 and 4):
Operation:
Purchased power 59,400 51,594 7,806
Fuel expense 99,948 87,426 12,522
Other 106,511 121,583 (15,072)
Maintenance 43,678 40,726 2,952
Depreciation 59,937 61,597 (1,660)
Taxes other than income taxes 22,250 23,159 (909)
Total expenses 391,724 386,085 5,639
INCOME FROM OPERATIONS 152,203 148,706 3,497
OTHER INCOME:
Allowance for equity funds used during
construction (Note 2) 2,444 2,736 (292)
Other - Net 9,641 11,291 (1,650)
Total other income 12,085 14,027 (1,942)
INTEREST CHARGES:
Interest on long-term debt 51,179 54,471 (3,292)
Other interest 3,681 1,540 2,141
Total interest charges 54,860 56,011 (1,151)
Allowance for borrowed funds used
during construction (Note 2) (1,914) (2,459) 545
Net interest charges 52,946 53,552 (606)
INCOME BEFORE INCOME TAXES 111,342 109,181 2,161
INCOME TAXES 31,596 33,731 (2,135)
NET INCOME 79,746 75,450 4,296
Dividends on preferred stock 7,251 5,575 1,676
EARNINGS ON COMMON STOCK $ 72,495 $ 69,875 $ 2,620
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,348 36,449 N/A
Earnings per share of common stock $ 1.94 $ 1.92 $ 0.02
Dividends paid per share of common stock $ 1.86 $ 1.86 $ -
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
IDAHO POWER COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS
<CAPTION>
September 30, December 31,
1994 1993
(Thousands of Dollars)
<S> <C> <C>
ELECTRIC PLANT:
In service (at original cost) $2,360,924 $2,249,723
Less accumulated provision for
depreciation 765,949 728,979
In service - Net 1,594,975 1,520,744
Construction work in progress 56,625 92,682
Held for future use 1,163 2,958
Electric plant - Net 1,652,763 1,616,384
INVESTMENTS AND OTHER PROPERTY 20,607 20,772
CURRENT ASSETS:
Cash and cash equivalents 5,389 8,228
Receivables:
Customer 29,642 29,741
Less allowance for uncollectible accounts (1,412) (1,377)
Notes 4,784 5,616
Employee notes receivable 5,649 5,909
Other 1,511 1,858
Accrued unbilled revenues (Note 1) 21,767 25,583
Materials and supplies (at average cost) 24,541 23,372
Fuel stock (at average cost) 12,308 11,553
Prepayments 20,533 20,975
Regulatory assets associated with income taxes 5,896 4,914
Total current assets 130,608 136,372
DEFERRED DEBITS:
American Falls and Milner water rights 32,605 32,755
Company owned life insurance 49,058 45,294
Regulatory assets associated with income taxes 175,284 171,569
Regulatory assets - other 66,333 35,036
Other 38,820 39,235
Total deferred debits 362,100 323,889
TOTAL $2,166,078 $2,097,417
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
IDAHO POWER COMPANY
CONSOLIDATED BALANCE SHEETS
CAPITALIZATION & LIABILITIES
<CAPTION>
September 30, December 31,
1994 1993
(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION (See Page 10):
Common stock equity - $2.50 par value (shares
authorized 50,000,000; shares outstanding
September 30, 1994 - 37,612,351; December 31,
1993 - 37,085,055) $ 652,360 $ 662,367
Preferred stock (Note 5) 132,490 132,751
Long-term debt (Note 5) 693,199 693,780
Total capitalization 1,478,049 1,488,898
CURRENT LIABILITIES:
Long-term debt due within one year 517 466
Notes payable 31,600 4,000
Accounts payable 33,905 31,912
Taxes accrued 16,369 15,452
Interest accrued 14,376 14,920
Other 35,374 13,731
Total current liabilities 132,141 80,481
DEFERRED CREDITS:
Accumulated deferred investment tax credits 71,160 72,013
Accumulated deferred income taxes 369,340 358,280
Regulatory liabilities associated with
income taxes 34,775 34,968
Regulatory liabilities - other 1,382 4,235
Other 79,231 58,542
Total deferred credits 555,888 528,038
COMMITMENTS AND CONTINGENT LIABILITIES (Note 3)
TOTAL $2,166,078 $2,097,417
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<CAPTION>
Nine Months Ended
September 30,
1994 1993
(Thousands of Dollars)
<S> <C> <C>
OPERATING ACTIVITIES:
Cash received from operations:
Retail revenues $353,054 $337,627
Wholesale revenues 45,586 57,893
Other revenues 17,797 17,643
Fuel paid (70,261) (53,736)
Purchased power paid (48,302) (41,488)
Other operation & maintenance paid (133,041) (125,054)
Interest paid (includes long and
short-term debt only) (39,545) (432,516)
Income taxes paid (16,114) (21,428)
Taxes other than income taxes paid (10,713) (11,126)
Other operating cash receipts and payments-Net (1,709) 501
Net cash provided by operating activities 96,752 117,316
FINANCING ACTIVITIES:
First mortgage bonds issued - 188,136
PC bond fund requisitions/other long-term debt - 5,594
Common stock issued 13,402 19,932
Preferred stock issued - 24,781
Short-term borrowing 27,600 (5,925)
Long-term debt retirement (449) (161,861)
Preferred stock retirement (150) (55)
Dividends on preferred stock (5,542) (4,137)
Dividends on common stock (52,105) (50,815)
Other sources 5 -
Net cash - financing activities (17,239) 15,650
INVESTING ACTIVITIES:
Additions to utility plant (81,687) (84,776)
Conservation (4,942) (4,667)
Other 4,277 5,088
Net cash - investing activities (82,352) (84,355)
Change in cash and cash equivalents (2,839) 48,611
Cash and cash equivalents beginning of period 8,228 4,966
Cash and cash equivalents end of period $ 5,389 $ 53,577
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net Income $ 51,579 $ 56,298
Adjustments to reconcile net income to net cash:
CSPP-Net amortization/(deferral) - (519)
Depreciation 47,661 46,447
Deferred income taxes 12,568 6,989
Investment tax credit-Net (1,496) (359)
Allowance for funds used during construction (2,896) (4,063)
Postretirement benefits funding (excl pensions) (5,419) (7,564)
Changes in operating assets and liabilities:
Accounts receivable 8,055 8,306
Fuel inventory 492 4,925
Accounts payable 5,415 (1,292)
Taxes payable 3,777 7,258
Interest payable 797 (1,471)
Other - Net (23,781) 2,361
Net cash provided by operating activities $ 96,752 $117,316
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<CAPTION>
Twelve Months Ended
September 30,
1994 1993
(Thousands of Dollars)
<S> <C> <C>
OPERATING ACTIVITIES:
Cash received from operations:
Retail revenues $450,052 $436,697
Wholesale revenues 72,419 69,190
Other revenues 23,565 27,015
Fuel paid (100,411) (84,082)
Purchase power paid (57,060) (52,047)
Other operation & maintenance paid (170,000) (158,174)
Interest paid (includes long and
short-term debt only) (52,378) (51,655)
Income taxes paid (27,198) (25,092)
Taxes other than income taxes paid (21,752) (22,910)
Other operating cash receipts and payments-Net 5,935 (2,059)
Net cash provided by operating activities 123,172 136,883
FINANCING ACTIVITIES:
First mortgage bonds issued - 188,136
PC bond fund requisitions/other long-term debt - 8,764
Common stock issued 20,250 26,433
Preferred stock issued - 24,781
Short-term borrowings 31,385 75
Long-term debt retirement (30,465) (161,862)
Preferred stock retirement (160) (82)
Dividends on preferred stock (7,319) (5,303)
Dividends on common stock (69,248) (67,537)
Other sources 4 -
Net cash - financing activities (55,553) 13,405
INVESTING ACTIVITIES:
Additions to utility plant (119,860) (118,594)
Conservation (6,963) (6,547)
Other 11,016 6,237
Net cash - investing activities (115,807) (118,904)
Change in cash and cash equivalents (48,188) 31,384
Cash and cash equivalents beginning of period 53,577 22,193
Cash and cash equivalents end of period $ 5,389 $ 53,577
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $ 79,746 $ 75,450
Adjustments to reconcile net income to net cash:
CSPP-Net amortization/(deferral) - (1,141)
Depreciation 59,937 61,597
Deferred income taxes 12,269 7,997
Investment tax credit-Net (2,719) (766)
Allowance for funds used during construction (4,358) (5,195)
Postretirement benefits funding (excl pensions) (5,336) (8,263)
Changes in operating assets and liabilities:
Accounts receivable 2,108 (1,888)
Fuel inventory (463) 3,345
Accounts payable 2,340 687
Taxes payable (4,622) 1,727
Interest payable 1,258 4,128
Other - Net (16,988) (795)
Net cash provided by operating activities $123,172 $136,883
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
<CAPTION>
September 30, December 31,
1994 1993
(Thousands of Dollars)
<S> <C> <C> <C> <C>
COMMON STOCK EQUITY:
Common stock (Note 5) $ 94,031 $ 92,713
Premium on capital stock 363,046 350,882
Capital stock expense (4,132) (4,128)
Retained earnings 199,415 222,900
Total common stock equity 652,360 44.1% 662,367 44.5%
PREFERRED STOCK, cumulative,
($100 par or stated value):
4% preferred stock (authorized 215,000;
shares outstanding: 1994-175,444;
1993-177,506) 17,490 17,751
Serial preferred stock, authorized
150,000 shares:
7.68% Series, outstanding
150,000 shares 15,000 15,000
Serial preferred stock, without
par value, authorized 3,000,000 shares:
8.375% Series (authorized and
outstanding 250,000 shares) 25,000 25,000
Auction Rate Preferred Series A
(authorized and outstanding 500
shares) 50,000 50,000
7.07% Series (authorized and outstanding
250,000 shares) 25,000 25,000
Total preferred stock 132,490 9.0 132,751 8.9
LONG-TERM DEBT (Note 5):
First mortgage bonds:
5 1/4% Series due 1996 20,000 20,000
5.33 % Series due 1998 30,000 30,000
8.65 % Series due 2000 80,000 80,000
6.40 % Series due 2003 80,000 80,000
8 % Series due 2004 50,000 50,000
9.50% Series due 2021 75,000 75,000
7.50% Series due 2023 80,000 80,000
8 3/4% Series due 2027 50,000 50,000
9.52% Series due 2031 25,000 25,000
Total first mortgage bonds 490,000 490,000
Pollution control revenue bonds:
5.90 % Series due 2003 24,650* 25,050*
6 % Series due 2007 24,000 24,000
7 1/4% Series due 2008 4,360 4,360
7 5/8% Series 1983-1984 due 2013-2014 68,100 68,100
8.30 % Series 1984 due 2014 49,800 49,800
Total pollution control
revenue bonds 170,910 171,310
*Less amount due within one year (450) (400)
Net pollution control revenue bonds 170,460 170,910
REA Notes 1,784 1,834
Less amount due within one year (67) (66)
Net REA Notes 1,717 1,768
American Falls bond guarantee 20,905 21,055
Milner Dam note guarantee 11,700 11,700
Unamortized premium/discount - Net (1,583) (1,653)
Total long-term debt 693,199 46.9 693,780 46.6
TOTAL CAPITALIZATION $1,478,049 100.0% $1,488,898 100.0%
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
IDAHO POWER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF ACCOUNTING POLICIES:
Financial Statements
In the opinion of the Company, the accompanying unaudited
financial statements contain all adjustments necessary to
present fairly the consolidated financial position as of
September 30, 1994 and the consolidated results of operation for
the three months, nine months and twelve months ended September
30, 1994 and 1993 and the consolidated cash flows for the nine
months and twelve months ended September 30, 1994 and 1993.
These condensed 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, 1993. The results of operation 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 subsidiaries, Idaho Energy
Resources Co (IERCo), Idaho Utility Products Company (IUPCO),
IDACORP, INC. and Ida-West Energy Company (Ida-West). All
significant intercompany transactions and balances have been
eliminated in consolidation.
Revenues
In order to match revenues with associated expenses, the Company
accrues unbilled revenues for electric services delivered to
customers but not yet billed at month-end.
Cash Flows
For purposes of reporting cash flows, cash and cash equivalents
include cash on hand and highly liquid temporary investments
with original maturity dates of three months or less.
2. ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION (AFDC):
The allowance, a non-cash item, represents the composite
interest costs of debt, shown as a reduction to interest
charges, and a return on equity funds, shown as an addition to
other income, used to finance construction. While cash is not
realized currently from such allowance, it is realized under the
rate making process over the service life of the related
property through increased revenues resulting from higher rate
base and higher depreciation expense. Based on the uniform
formula adopted by the Federal Energy Regulatory Commission, the
Company's weighted average monthly AFDC rate for the nine months
ended September 30, 1994, was 8.6 percent and was 9.6 percent
for the entire year of 1993.
3. 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 $10,098,000 at September 30, 1994.
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 operations or cash flows.
4. POWER COST ADJUSTMENT:
The Company has in place, in its Idaho jurisdiction, a Power
Cost Adjustment (PCA) mechanism which allows the customer's
rates to be adjusted annually to reflect the Company's
forecasted net power supply costs. Sixty percent of the
deviations from forecasted costs are deferred with interest and
then adjusted (trued-up) in the subsequent year. At September
30, 1994, the Company had recorded $8.8 million of power supply
costs above those projected in the 1994 forecast. The current
balance is adjusted monthly as actual conditions are compared to
the forecasted net power supply costs.
In addition, the Company filed for temporary drought rate relief
with the Oregon Public Utility Commission (OPUC). The OPUC
issued an accounting order that grants the Company permission to
begin deferring with interest 60 percent of Oregon's share in
the Company's increased power supply costs incurred between May
13, 1994 and December 31, 1994. The Company is required to file
a request with the OPUC to recover the deferred amount.
5. FINANCING:
(a) Debt:
The Company currently has a $200,000,000 shelf registration
statement which can be used for both First Mortgage Bonds
(including Medium Term Notes) and Preferred Stock.
(b) Stock:
In June 1994, the Company suspended issuing original issue
shares of its common stock through its Employee Savings,
Dividend Reinvestment and Stock Purchase, and Employee Stock
Ownership Plans. For these plans the shares are presently being
purchased on the open market. During 1994, the Company issued
527,296 original issue shares, producing approximately $13.4
million in proceeds.
INDEPENDENT ACCOUNTANTS' REPORT
Idaho Power Company
Boise, Idaho
We have reviewed the accompanying consolidated balance sheet
and statement of capitalization of Idaho Power Company and
subsidiaries as of September 30, 1994, and the related
consolidated statements of income for the three-month, nine-
month and twelve-month periods ended September 30, 1994 and
1993 and consolidated statements of cash flows for the nine-
month and twelve-month periods ended September 30, 1994 and
1993. 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 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, 1993, and the related
consolidated statements of income, retained earnings, and cash
flows for the year then ended (not presented herein), and in
our report dated January 31, 1994, we expressed an unqualified
opinion on those consolidated financial statements (which
includes an explanatory paragraph relating to the change in
the Company's method of accounting for income taxes and
postretirement benefits in the year ended December 31, 1993).
In our opinion, the information set forth in the accompanying
consolidated balance sheet and statement of capitalization as
of December 31, 1993 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
Portland, Oregon
October 28, 1994
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion relates to Idaho Power Company and its four
consolidated, wholly-owned subsidiaries: Idaho Energy Resources
Company (IERCo), Ida-West Energy Company (Ida-West), IDACORP, Inc., and
Idaho Utility Products Company (IUPCO). Idaho Power Company and its
subsidiaries are collectively referred to here as the Company.
Because the Company is primarily a hydroelectric utility, its
operational results, like those of other utilities in the Northwest,
are significantly affected by changing weather and streamflow
conditions. In addition, the amount of energy used by general business
consumers varies from season to season - and from month to month within
each season - due primarily to seasonal weather. Non-firm (or off-
system) energy sales also vary, by quarters and by years, as a result
of hydro conditions and energy demand from other utilities. Finally,
operating costs fluctuate during periods when reduced hydroelectric
generating capability or a strong non-firm energy market increases the
Company's reliance on thermal generation or purchases of power from
other utilities.
The Power Cost Adjustment (PCA) mechanism, approved by the Idaho Public
Utilities Commission (IPUC), includes a major portion of those
operating expenses that have the greatest potential for variation. When
the PCA is fully implemented in Idaho, the Company's operating and
earnings per share results will be more closely aligned with general
regulatory, economic, and temperature-related weather conditions, and
will be less dependent on variable precipitation and streamflow
conditions.1 In addition, the Company filed a general rate increase
request with the IPUC in June of this year, its first in nearly a
decade. If approved as filed, the request will increase the Company's
annual revenues by $37.05 million, raise Idaho customer rates by an
average of 9.09 percent. The revenue requirement order will trigger
full implementation of the PCA mechanism at the 90 percent recovery
level from its present 60 percent.
Earnings Per Share
Earnings per share of common stock were $0.38 for the quarter, a
decrease of $0.02 (or 5.0 percent) from the same quarter last year.
Year-to-date, earnings per share were $1.23, a decrease of $0.19 (13.4
percent), and the twelve months ended September 30, 1994 showed
earnings of $1.94 per share, an increase of $0.02 (1.0 percent). The
twelve-month earnings represent an 11.1 percent earned return on year-
end September 30 common equity, the same percentage as the return at
September 30 last year.
Among the items under review in the Company's current rate filing is
its allowed return on equity. Although they have begun to increase
recently, allowed returns on common equity granted nationally have
declined over the last few years as a result of a lower interest rate
environment. This decline created a contrast for some utilities with
dividend payout levels set during periods of higher allowed returns.
The Company has requested an allowed return on equity above its present
dividend yield on year-end book value to provide, among other things,
current earnings to cover dividend payments. However, the Company
cannot predict the outcome of these rate proceedings.
RESULTS OF OPERATIONS
Precipitation and Streamflows
The Company's service territory continued to experience lower than
normal precipitation and higher than normal temperatures during the
third quarter. As of October 1, 1994, reservoir storage above Brownlee
Reservoir (water source for the Hells Canyon hydroelectric complex) was
at 23 percent of capacity, compared to 39 percent of capacity at this
time last year. Streamflows into Brownlee recorded between April and
July 1994 were 2.75 million acre-feet (MAF). This figure is 46 percent
of last year's 6.0 MAF and approximately 57 percent of the 65-year
median amount of 4.8 MAF. These streamflows reflect the drought
conditions that have plagued the Company's service territory for seven
of the last eight years.
Energy Requirements
For the first nine months of 1994, the Company's total energy
requirements were met by hydro generation (41 percent), thermal
generation (45 percent), and purchased power and other interchanges (14
percent). During the same period of 1993, these percentages were: 56
percent hydro, 36 percent thermal, and 8 percent purchased power and
other interchanges. With precipitation and streamflows below normal,
the Company estimates that it will derive 41 percent of its total 1994
energy requirements from hydro generation, 48 percent from thermal
generation, and 11 percent from purchased power and other interchanges.
Under normal conditions, these percentages would be closer to 58
percent hydro, 36 percent thermal, and 6 percent purchased power and
other interchanges.
Power Cost Adjustment
The Company's PCA mechanism allows it to collect, or refund, 60 percent
of the difference between actual net power supply costs and those
allowed in the Company's Idaho base rates. The Company filed its 1994
PCA application on April 15, 1994, requesting an increase in base rates
for the Idaho jurisdiction. The increase (in effect from May 16, 1994
through May 15, 1995) is approximately $9.8 million, or 2.5 percent.
This figure includes last year's true-up and other adjustments.
Deviations from forecasted costs are deferred with interest and trued
up the following year. At September 30, 1994, the Company had recorded
$8.8 million of power supply costs above those projected in the 1994
forecast. This current balance will be adjusted monthly as actual
conditions are compared to the forecasted net power supply costs. The
final cumulative amount will be included in the 1995 true-up
adjustment. When the IPUC issues a revenue requirement order on the
permanent rate request, the PCA mechanism will be increased from the
current 60 percent recovery level to 90 percent.
Revenues
General business revenues were up for the quarter ($19.3 million or
17.7 percent), up for the first nine months of 1994 ($20.5 million or
6.4 percent), and up for the twelve months ending September 30, 1994
($17.5 million or 4.1 percent).
The quarterly increase reflects sales increases in three customer
classes over those achieved in third-quarter 1993. Residential sales
rose $7.6 million (23.1 percent); small commercial sales rose $4.2
million (18.1 percent); and irrigation sales rose $5.1 million (17.4
percent). In addition, large industrial loads increased $2.3 million or
10.1 percent. The total number of general business customers served
rose by 11,952, a 3.8 percent increase over the same period last year.
The increase in general business customers and sales also account for
the year-to-date increase in revenues, as do higher 1994 irrigation
loads caused by below normal spring precipitation and warmer summer
temperatures. These increased loads accounted for a $15.2 million (32.6
percent) increase in year-to-date irrigation sales. An extended period
of warm temperatures during the summer months resulted in record-
setting customer demand. On June 23, 1994, the Company set a new record
for system peak load at 2,392 megawatts (MW).
The increase in revenues for the twelve-month period again reflects
both higher energy demands caused by warm summer weather and an
increase in general business customers.
Firm off-system sales rose $3.9 million for the quarter, $10.1 million
year-to-date, and $13.4 million for the twelve months ended September
30, 1994. These increases were due primarily to the addition of two
firm contracts signed during 1993. Surplus sales were down $6.4 million
during the third quarter, $28.2 million year-to-date, and $21.5 million
for the twelve-month period. These decreases reflect the additional
firm contracts and the less favorable hydro generation conditions
resulting from the region's current drought situation, as compared to
the improved hydro generation conditions experienced during 1993.
When compared to the corresponding periods a year ago, total operating
revenues increased $16.5 million (or 12.2 percent) for the third
quarter of 1994, $3.5 million (0.9 percent) year-to-date, and $9.1
million (1.7 percent) for the twelve months ended September 30, 1994.
General Revenue Requirement Case
On June 30, 1994, the Company filed a general revenue requirement rate
case with the IPUC. The proposed $37.05 million increase in annual
revenues translates to an average 9.09 percent rise in base rates in
the Idaho jurisdiction. This filing is the Company's first requested
general rate increase since 1985, and will bring all of the Company's
cost components to a more current level in response to concerns
expressed by the IPUC and various customer groups in recent regulatory
proceedings.
The Company is requesting a 12.5 percent return on common equity
applied to a 45 percent common equity component. In addition, this
request will change the base components included in the PCA. When the
IPUC issues a revenue requirement order on the permanent rate request,
the PCA mechanism will be increased from the current 60 percent to 90
percent.
In August 1994, the IPUC held hearings on the Company's proposed
interim rate relief request for an $11.5 million increase in its
revenue requirement (a 2.83 percent uniform rate increase), and on
August 5, 1994, denied the Company's interim request.
The Commission began public hearings during the week of October 10,
1994 on the Company's permanent rate request. This portion of the
hearings consisted only of cross-examination of Company witnesses.
Commission staff and intervenors are scheduled to present their cases
during the week of December 12. The Company expects a decision to its
rate case by late January or early February of 1995.
In addition in May 1994, the Company filed for temporary drought rate
relief with the Oregon Public Utility Commission (OPUC). The OPUC
issued an accounting order that grants the Company permission to begin
deferring with interest 60 percent of Oregon's share in the Company's
increased power supply costs incurred between May 13, 1994 and December
31, 1994. After the close of 1994 the Company is required to file its
deferred amount amortization proposal with the OPUC.
Expenses
Total operating expenses were up $17.1 million (17.1 percent) for the
quarter, $13.3 million (4.6 percent) year-to-date, and $5.6 million
(1.5 percent) for the twelve months ended September 30, 1994
Purchased power and fuel expenses were higher for the three-, nine-,
and twelve-month periods. These increases reflect poor hydro conditions
that have increased the Company's reliance on thermal generation and
purchased power to meet increasing customer demand. All other operation
and maintenance expenses rose $2.2 million for the third quarter, but
were down $14.2 million year-to-date and $12.1 million for the twelve-
month period. These decreases reflect the change as the Company went
from lower PCA costs in 1993 (due to better hydro conditions) to higher
PCA costs in 1994 (due to the return of drought conditions). Deferral
of deviations from forecasted costs increased expenses in 1993, while
lowering them in 1994. The decrease was offset somewhat by increases in
certain regulatory commission and employee payroll and benefit
expenses. Depreciation expense increased as a result of greater plant
investment.
Total interest expense rose slightly for the three-month period, but
declined by $1.6 million and $1.2 million for the nine- and twelve-
month periods respectively. Refinancing during 1993 reduced long-term
interest expense, while tax settlements with the Internal Revenue
Service increased other interest expenses. Income taxes decreased for
the three-, nine-, and twelve-month periods ended September 30, 1994 as
a result of changes in pre-tax income.
Ida-West Energy Company
This wholly-owned subsidiary of the Company owns, through various
partnerships, 50 percent of five Idaho hydroelectric projects with a
total generating capacity of approximately 34 megawatts. Third parties
unaffiliated with Ida-West own the remaining 50 percent of these
projects, thus satisfying "qualifying facility" status under PURPA
guidelines. The partnerships have obtained project financing (non-
recourse to the Company) for each of these facilities.
As a part of its Resource Contingency Program, the Bonneville Power
Administration (BPA) requested proposals to provide up to 800 average
megawatts of energy options. Ida-West, along with two partners,
submitted a proposal for a 227 megawatt gas-fired cogeneration project
to be located near Hermiston, Oregon. On June 4, 1993, BPA selected
three projects - including that of the partnership - for participation
in the program. The partnership and BPA signed an option development
agreement granting BPA an option to acquire energy and capacity from
the project any time during a five-year option hold period after all
option development period tasks, including permitting, have been
completed. The option also entitles the partnership to BPA
reimbursement for certain development costs, based on achievement of
certain milestones. This option includes an exclusive right to acquire
energy and capacity from a second 233 megawatt unit at the site during
the same five-year option hold period. In March 1994, BPA and the
partnership reached an additional agreement on the power purchase
contract, setting forth the terms and conditions on which BPA will
purchase energy and capacity from the project upon exercise of the
option. The partnership expects to complete development period tasks by
year-end 1995. Project financing for construction costs would be
non-recourse to the Company.
The Company's total equity investment in Ida-West is $20 million. Ida-
West continues an active search for new projects.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
Net cash generation from operations was $96.8 million for the first
nine months of 1994. After deducting common and preferred dividends,
net cash generation from operations provided approximately $39.1
million for the Company's construction program and other capital
requirements. This was a 37.3 percent decrease from the same period of
1993.
Cash Expenditures
At present, the Company estimates that its cash construction program
for 1994 will require approximately $109.8 million. Generating
facilities account for about 34 percent of total required cash funds,
transmission for 11 percent, distribution for 43 percent, and general
plant and equipment for the balance. This estimate is subject to
revision in light of changing economic, regulatory, and environmental
factors and conservation policies. Year-to-date, the Company has
expended approximately $86.6 million for construction and conservation.
The Company's primary financial commitments and obligations are related
to contracts and purchase orders for its ongoing construction program.
They are expected to be financed with both internally-generated funds
and externally-financed capital to the extent required. Although the
Company has regulatory approval to incur up to $150 million of bank
borrowings, it presently maintains lines of credit aggregating $70
million with various banks. These lines of credit may be used to
finance a portion of the construction program on an interim basis. At
September 30, 1994, the Company had short-term borrowings of $31.6
million.
Financing Program
In June, the Company suspended the issuance of original issue shares of
its common stock through its Employee Savings, Dividend Reinvestment
and Stock Purchase and Employee Stock Ownership Plans. It now purchases
these required shares on the open market. During the first nine months
of 1994, the Company issued 527,296 original issue shares, producing
about $13.4 million in proceeds. In addition, the Company has on file a
shelf registration statement for the issuance of first mortgage bonds
and/or preferred stock with a total aggregate principal amount not to
exceed $200 million.
The Company's current objective is to maintain capitalization ratios of
approximately 45 percent common equity, 8 to 10 percent preferred
stock, and the balance in long-term debt. Its strategy is to achieve
this target structure through accumulated earnings and issuance of new
equity. The Company continues to explore cost savings through the
economic refunding of current outstanding issues. For the twelve months
ended September 30, 1994, the Company's consolidated pre-tax interest
coverage was 3.03 times.
Construction Program
In early spring, the Company completed testing of the Swan Falls
Project, and both generation units were declared available for
commercial operation. Additional work to preserve the old power plant
as an historical site began during the year, while work to establish a
museum on the site is scheduled for completion in 1995. In May, crews
completed the federally-mandated stabilization of the dam and began the
environmental reclamation of approximately 18 acres of land affected by
the construction activities.
Expansion of the Twin Falls Project recently passed the halfway point,
with completion estimated for mid-1995. Revised total cash expenditures
for the Twin Falls expansion are currently estimated at $38.1 million,
with total construction costs at $41.9 million, including an allowance
for funds used during construction. When completed, this project will
add 43 MW of new capacity to the Company's generation system.
In addition, the Company continues to explore the economic feasibility
of constructing the Southwest Intertie Project. The Bureau of Land
Management is expected to approve the Final Environmental Impact
Statement/Proposed Plan Amendment by the end of 1994. The right-of-way
grant would follow in November 1994. The Company continues to negotiate
with various utilities and electric providers for financial
participation in the project, with the intention of retaining up to a
20 percent ownership in the line.
Competition and Strategic Planning
Competition is increasing in the electric utility industry, due to a
variety of developments. In response, the Company continues to review
and proceed with a strategic planning process designed to anticipate
and fully integrate into Company operations any legislative,
regulatory, environmental, competitive, or technological changes. With
its low energy production costs, the Company is well-positioned to
enter a more competitive environment and is taking action to preserve
its low-cost competitive advantage.
In September 1993, the Company submitted a detailed position paper to
its state regulators and other interested parties. This report outlined
proposed changes in the Company's resource acquisition policy. With the
potential deregulation of the electric utility industry, and a more
competitive power supply marketplace, the Company believes that current
resource acquisition policies must be changed to avoid burdening it and
its customers with unnecessary future power supply costs. The Company
believes that the appropriate criteria for adding future supplies
should be power needs at the time of development and the addition be
the least-cost market alternative. Therefore, the Company filed with
the IPUC in December 1993 for permission to approve lower prices for
new cogeneration and small power production (CSPP) contracts. The IPUC
found that there is good reason to believe that current Idaho CSPP
purchase rates are too high and ordered that rates contained in new
CSPP contracts would be subject to revision based on its final outcome.
The IPUC has scheduled a hearing for the week of November 29, 1994.
Rosebud Enterprises, Inc. (Rosebud) filed a Complaint against the
Company with the IPUC, alleging that the Company refused to sign a
contract to purchase the output of a 40 MW petroleum waste-fired
generating plant that Rosebud proposes to build near Mountain Home,
Idaho. Because this facility, known as the Mountain Home Project, is
larger than 10 MW, the IPUC's established rates for small CSPP projects
are not available to Rosebud. On September 16, 1994, the IPUC issued a
final order directing the Company to recalculate and offer avoided cost
rates as described in the order. Following the issuance of this order,
Rosebud and the Company filed petitions for reconsideration which are
now pending before the IPUC.
On June 3, 1994 the IPUC approved the buyout and cancellation of a
January 22, 1993 Firm Energy Sales Agreement (FESA) with Meridian
Generating Company, L.P. (MGC). The FESA was a 25-year agreement with
MGC for a 54 MW natural gas-fired combined cycle cogeneration facility
located in Meridian, Idaho. The Company estimates that the revenue
requirement savings, including cancellation charges (of $13.2 million,
which are recorded as a regulatory asset) paid to MGC, are between $130
to $170 million.
On June 28, 1994, Washington Water Power and Sierra Pacific Resources
announced that their respective boards of directors had approved a
merger agreement between the two companies. The Company is intervening
in the regulatory approval process to ensure that the proposed merger
has no adverse affects on its operations. In addition, the Company is
actively identifying and responding to business opportunities presented
by the proposed merger.
Internally, the Company continues its commitment to refining its
business processes to ensure its ability to offer the greatest possible
value to its customers and its shareowners. Among these strategic
initiatives are:
- formation of process redesign teams that are examining and
refining the Company's work order and line extension process;
- initiation of a four-year, $3 million project to automate and
consolidate the operation of the Company's 17 hydro-electric power
plants;
- continued training for Company employees in the principles and
processes of continuous quality improvement;
- formation of a Technical Advisory Panel, comprised of
representatives from public and private interest groups, who will
advise the Company on such matters as competition, alternative
resources, and conservation. The Company will use the panel's advice as
it reviews its Integrated Resource Plan, due for publication early in
1995.
Salmon Recovery Plan
Work continues on the development of a comprehensive and scientifically
credible plan to ensure the long-term survival of anadromous fish runs
on the Columbia and Lower Snake Rivers. The Company fully supports and
actively participates in this regional effort.
In mid-August, the federal government changed its designation of the
Fall Chinook Salmon from threatened to endangered. The Company does not
anticipate that the new designation will have any major effects on its
operations. In September 1991 the Company modified operations at its
three-dam Hells Canyon Hydroelectric Complex to protect the Fall
Chinook downstream during spawning and juvenile emergence. From its
start, the Company's Fall Chinook program has exceeded the protection
requirements for threatened species, affording the fish the same high
level of protection due an endangered species.
The Snake River Salmon Recovery Team has submitted its Draft Recovery
Plan (Draft Plan) to the National Marine Fisheries Service (NMFS),
detailing its recommendations for restoring the listed Snake River
salmon runs. After reviewing the 500-page report, the Company believes
that the proposed course of action, if fully implemented, could lead to
a successful recovery. The Draft Plan details comments regarding some
institutional changes and responsibility for management of recovery
efforts. It suggests reductions in ocean and in-river harvest rates,
calls for significant improvements in transportation and collection
systems, supports flow augmentation and habitat improvements, calls
for a test drawdown of Lower Granite Reservoir on the Snake River, and
suggests habitat, hatchery and predation improvements. The Company is
closely monitoring the finalization of this Draft Plan, due to be
released by the end of this year.
Pending completion of a final recovery plan by the NMFS, the U.S. Army
Corps of Engineers and other governmental agencies operating
federally-owned dams and reservoirs on the Snake and Columbia Rivers
have consulted the NMFS each year regarding federal system operations.
On March 28, 1994, Judge Malcolm Marsh of the U.S. District Court for
the District of Oregon ordered the federal agencies to reinitiate the
consultation completed for 1993 operations of the federal system. Judge
Marsh concluded that the consultations and subsequent operations were
"...too heavily geared towards a status quo that has allowed all forms
of river activity to proceed..." at the expense of fish. On September
9, 1994 the Ninth Circuit Court of Appeals echoed Judge Marsh's
decision when it found that the 1993 Strategy for Salmon proposed by
the Northwest Power Planning Council (NPPC) was in violation of the
1980 Northwest Power Planning Act. The decision of the appeals court
specifically ordered the NPPC to focus more attention on saving young
salmon and to defer to the expertise of state, federal, and tribal
fisheries management agencies in developing its salmon recovery
program. The NPPC announced that it will not appeal the Ninth Circuit
Court's decision. The Council has begun consultations with regional
fisheries agencies and Indian tribes to consider amendments to its
program.
Although the Company coordinates its operations to aid the federal
agencies with their salmon recovery efforts, neither the Company nor
the operation of any of its facilities were directly involved in the
litigation. It is possible that the court-ordered re-consultation could
lead to operational changes for Company facilities in the future. At
this time, however, the Company cannot assess the impacts, if any, that
might occur as a result of any such changes.
It also is possible that the final recovery plan could have a material
impact on the Company, as well as every other person, community and
industry in the Northwest that depends on the Snake and Columbia
Rivers. The Company hopes that anadromous fish runs can be restored to
the level demanded by society without placing undue hardship on either
the Company or those who benefit from its service.
Relicensing
The Company is vigorously pursuing the relicensing of its hydroelectric
projects, a process that will continue for the next 10 to 15 years.
Although various federal requirements and issues must be resolved
through the relicensing process, the Company anticipates that its
efforts will be successful. At this point, however, the Company cannot
predict what type of environmental or operational requirements it may
face, nor can it estimate the eventual cost of relicensing.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On February 16, 1994, the Company brought an action, Idaho Power
Company v. Underwriters at Lloyds' London, et al., in United States
District Court for the District of Idaho against 31 insurance companies
and insurance syndicates which provided it with liability insurance in the
period from 1969 through 1974. The action seeks a declaration and money
damages arising from the defendants' failure to defend and indemnify the
Company for approximately $6.9 million in costs the Company incurred in
investigating and remediating hazardous waste materials at the Pacific
Hide and Fur Company recycling site in Pocatello, Idaho, pursuant to an
administrative action and consent decree between the Company and the
Environmental Protection Agency. Those insurers which are not in
liquidation, and which wrote the vast majority of the coverage at issue,
have appeared and answered the complaint, asserting numerous affirmative
defenses. The case is set for trial in the United States District Court
for the Eastern District of Washington on June 26, 1995 and is presently
in the early stages of dicovery.
On December 6, 1991, a complaint entitled Nez Perce Tribe, Plaintiff,
v. Idaho Power Company, Defendant, Civil No. CIV 91-0517-S-EJL, was filed
against the Company in the United States District Court for the District
of Idaho. The Company was served with the Complaint on March 26, 1992.
In the Complaint, the Tribe contends that pursuant to treaties with the
United States Government including the Treaty of June 11, 1855, 12 Stat.
957, and the Treaty of June 9, 1863, 14 Stat. 647, the right to take fish
at all usual and accustomed fishing places outside the Nez Perce
Reservation and the exclusive right to take fish in all streams running
through or bordering the reservation were reserved for the Tribe in said
treaties. The Complaint further states that the Snake River supported
substantial runs of anadromous fish and that the construction of Brownlee,
Oxbow and Hells Canyon Dams in 1958, 1961 and 1967, respectively, created
total barriers to the migration of the anadromous fish, thereby destroying
the fish runs and violating the reserved fishing rights stated in the
above-described treaties. In the Complaint, the Tribe seeks actual,
incidental and consequential damages in amounts to be proven at trial
together with $150,000,000 in punitive damages as well as pre and post-
judgment interest and costs and attorney fees.
On September 11, 1992, the Tribe filed an Amended Complaint in which
it amplified its original Complaint by asserting that Brownlee, Oxbow and
Hells Canyon Dams were "constructed, operated and maintained in such a
manner as to damage plaintiff's rights" to harvest fish, which rights the
Tribe asserts to be "present, possessory property right(s)".
On September 18, 1992, the Company filed a motion for summary
judgment.
On March 21, 1994, the Federal District Judge issued an order
granting the Company's motion for summary judgment on all claims except
the Tribe's claim for compensation based on exclusion from its usual and
accustomed fishing places, which part of the motion the District Judge
denied without prejudice.
On September 28, 1994, the Federal District Judge issued an Order
rejecting the Second Report and Recommendation of the Magistrate granting,
in its entirety, the Company's motion for summary judgment.
The lawsuit is still in the early stages, and the Company is unable
to predict the outcome of this case. However, the Company believes its
actions were lawful and intends to vigorously defend this suit.
This matter has been previously reported in Form 10-K dated March 16,
1992, March 12, 1993, March 10, 1994, and other reports filed with the
Commission.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
File
Exhibit Number As Exhibit
*4 (a) 2-3413 B-2 - Mortgage and Deed of Trust, dated
as of October 1, 1937, between
the Company and Bankers Trust
Company and R. G. Page, as
Trustees.
*4 (b) - Supplemental Indentures to
Mortgage and Deed of Trust:
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
2-51762 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 1, 1993
1-3198 4 Thirty-fourth December 1, 1993
Form 8-K
Dated
12/17/93
12 - Ratio of Earnings to Fixed
Charges.
12(a) - Supplemental Ratio of Earnings to
Fixed Charges.
12(b) - Ratio of Earnings to Combined
Fixed Charges and Preferred
Dividend Requirements.
12(c) - Supplemental Ratio of Earnings to
Combined Fixed Charges and
Preferred Dividend Requirements.
15 - Letter re: unaudited interim
financial information.
27 - Financial Data Schedule
(b) Reports on Form 8-K. The following reports on Form 8-K
were filed for the three months ended September 30, 1994.
1. Item 5. Other Events -
A report on Form 8-K dated July 11, 1994 was filed by
the Company concerning the application request for an
increase in annual revenues for jurisdictional sales
and service at approximately $37.05 million.
A report on Form 8-K dated August 11, 1994 was filed
by the Company concerning the denial of the Company's
$11.5 million interim rate relief by the Idaho Public
Utilities Commission.
*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.
IDAHO POWER COMPANY
(Registrant)
Date November 4, 1994 By: /s/ Dan Bowers
Dan Bowers
Vice President and
Acting Chief Financial Officer
(Principal Financial Officer)
Date November 4, 1994 By: /s/ Harold J Hochhalter
Harold J Hochhalter
Controller
(Principal Accounting Officer)
Idaho Power Company
Consolidated Financial Information
<TABLE>
Ratio of Earnings to Fixed Charges
<CAPTION>
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30,
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income $ 84,737 $ 69,241 $ 57,872 $ 59,990 $ 84,464 $ 79,746
Income taxes:
Income taxes (includes amounts
charged to other income and
deductions) 45,336 26,418 24,321 24,601 38,057 34,315
Investment tax credit adjustment (3,295) (3,184) (3,177) (1,439) (1,583) (2,719)
Total income taxes 42,041 23,234 21,144 23,162 36,474 31,596
Income before income taxes 126,778 92,475 79,016 82,152 120,938 111,342
Fixed Charges:
Interest on long-term debt 49,629 50,119 54,370 53,408 53,706 51,179
Amortization of debt discount,
expense and premium - net 238 309 374 392 507 566
Interest on short-term bank loans 2,200 1,027 935 647 220 639
Other interest 3,164 2,259 3,297 1,011 2,023 2,476
Interest portion of rentals 757 902 884 683 1,077 893
Total fixed charges 55,988 54,616 59,860 56,141 57,533 55,753
Earnings - as defined $182,766 $147,091 $138,876 $139,293 $178,471 $167,095
Ratio of earnings to fixed charges 3.26X 2.69X 2.32X 2.48X 3.10X 3.00X
</TABLE>
Idaho Power Company
Consolidated Financial Information
<TABLE>
Supplemental Ratio of Earnings to Fixed Charges
<CAPTION>
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30,
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income $ 84,737 $ 69,241 $ 57,872 $ 59,990 $ 84,464 $ 79,746
Income taxes:
Income taxes (includes amounts
charged to other income and
deductions) 45,336 26,418 24,321 24,601 38,057 34,315
Investment tax credit adjustment (3,295) (3,184) (3,177) (1,439) (1,583) (2,719)
Total income taxes 42,041 23,234 21,144 23,162 36,474 31,596
Income before income taxes 126,778 92,475 79,016 83,152 120,938 111,342
Fixed Charges:
Interest on long-term debt 49,629 50,119 54,370 53,408 53,706 51,179
Amortization of debt discount,
expense and premium - net 238 309 374 392 507 566
Interest on short-term bank loans 2,200 1,027 935 647 220 639
Other interest 3,164 2,259 3,297 1,011 2,023 2,476
Interest portion of rentals 757 902 884 683 1,077 893
Total fixed charges 55,988 54,616 59,860 56,141 57,533 55,753
Suppl increment to fixed charges* 2,321 1,969 1,599 2,487 2,631 2,624
Total supplemental fixed charges 58,309 56,585 61,459 58,628 60,164 58,377
Supplemental earnings - as defined $185,087 $149,060 $140,475 $141,780 $181,102 $169,719
Supplemental ratio of earnings to
fixed charges 3.17X 2.63X 2.29X 2.42X 3.01X 2.91X
<FN>
* 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.
</TABLE>
Idaho Power Company
Consolidated Financial Information
<TABLE>
Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements
<CAPTION>
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income $ 84,737 $ 69,241 $ 57,872 $ 59,990 $ 84,464 $ 79,746
Income taxes:
Income taxes (includes amounts
charged to other income and
deductions) 45,336 26,418 24,321 24,601 38,057 34,315
Investment tax credit adjustment (3,295) (3,184) (3,177) (1,439) (1,583) (2,719)
Total income taxes 42,041 23,234 21,144 23,162 36,474 31,596
Income before income taxes 126,778 92,475 79,016 83,152 120,938 111,342
Fixed Charges:
Interest on long-term debt 49,629 50,119 54,370 53,408 53,706 51,179
Amortization of debt discount,
expense and premium - net 238 309 374 392 507 566
Interest on short-term bank loans 2,200 1,027 935 647 220 639
Other interest 3,164 2,259 3,297 1,011 2,023 2,476
Interest portion of rentals 757 902 884 683 1,077 893
Total fixed charges 55,988 54,616 59,860 56,141 57,533 55,753
Preferred dividends requirements 6,374 5,685 6,663 7,611 8,547 10,037
Total fixed charges and
preferred dividends 62,362 60,301 66,523 63,752 66,080 65,790
Earnings - as defined $182,766 $147,091 $138,876 $139,293 $178,471 $167,095
Ratio of earnings to fixed charges
and preferred dividends 2.93X 2.44X 2.09X 2.18X 2.70X 2.54X
</TABLE>
Idaho Power Company
Consolidated Financial Information
<TABLE>
Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend
Requirements
<CAPTION>
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30,
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income $ 84,737 $ 69,241 $ 57,872 $ 59,990 $ 84,464 $ 79,746
Income taxes:
Income taxes (includes amounts
charged to other income and
deductions) 45,336 26,418 24,321 24,601 38,057 34,315
Investment tax credit adjustment (3,295) (3,184) (3,177) (1,439) (1,583) (2,719)
Total income taxes 42,041 23,234 21,144 23,162 36,474 31,596
Income before income taxes 126,778 92,475 79,016 82,152 120,938 111,342
Fixed Charges:
Interest on long-term debt 49,629 50,119 54,370 53,408 53,706 51,179
Amortization of debt discount,
expense and premium - net 238 309 374 392 507 566
Interest on short-term bank loans 2,200 1,027 935 647 220 639
Other interest 3,164 2,259 3,297 1,011 2,023 2,476
Interest portion of rentals 757 902 884 683 1,077 893
Total fixed charges 55,988 54,616 59,860 56,141 57,533 55,753
Suppl increment to fixed charges* 2,321 1,969 1,599 2,487 2,631 2,624
Supplemental fixed charges 58,309 56,585 61,459 58,628 60,164 58,377
Preferred dividend requirements 6,374 5,685 6,663 7,611 8,547 10,037
Total supplemental fixed charges
and preferred dividends 64,683 62,270 68,122 66,239 68,711 68,414
Supplemental earnings - as defined $185,087 $149,060 $140,475 $141,780 $181,102 $169,719
Supplemental ratio of earnings to
fixed charges and preferred
dividends 2.86X 2.39X 2.06X 2.14X 2.64X 2.48X
<FN>
* 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.
</TABLE>
Exhibit 15
October 28, 1994
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 Idaho Power Company and subsidiaries for the
periods ended September 30, 1994 and 1993, as indicated in our report dated
October 28, 1994; because we did not perform an audit, we expressed no
opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended September 30, 1994, is
incorporated by reference in Registration Statement Nos. 33-65720, and 33-
60046 on Form S-3; and Post-Effective Amendment No. 1 to Registration
Statement No. 2-99567 and Registration Statement Nos. 33-36947 and 33-56071
on Form S-8.
We also are aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act, is not considered a part of the Registration
Statement 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
Portland, Oregon
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> Dec-31-1993
<PERIOD-START> Jan-01-1994
<PERIOD-END> Sep-30-1994
<PERIOD-TYPE> 9-mos
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,652,763
<OTHER-PROPERTY-AND-INVEST> 20,607
<TOTAL-CURRENT-ASSETS> 130,608
<TOTAL-DEFERRED-CHARGES> 362,100
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,166,078
<COMMON> 94,031
<CAPITAL-SURPLUS-PAID-IN> 358,914
<RETAINED-EARNINGS> 199,415
<TOTAL-COMMON-STOCKHOLDERS-EQ> 652,360
0
132,490
<LONG-TERM-DEBT-NET> 679,715
<SHORT-TERM-NOTES> 3,500
<LONG-TERM-NOTES-PAYABLE> 13,484
<COMMERCIAL-PAPER-OBLIGATIONS> 28,100
<LONG-TERM-DEBT-CURRENT-PORT> 517
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 655,912
<TOT-CAPITALIZATION-AND-LIAB> 2,166,078
<GROSS-OPERATING-REVENUE> 408,382
<INCOME-TAX-EXPENSE> 24,110
<OTHER-OPERATING-EXPENSES> 303,380
<TOTAL-OPERATING-EXPENSES> 327,490
<OPERATING-INCOME-LOSS> 80,892
<OTHER-INCOME-NET> 9,958
<INCOME-BEFORE-INTEREST-EXPEN> 90,850
<TOTAL-INTEREST-EXPENSE> 39,271
<NET-INCOME> 51,579
5,470
<EARNINGS-AVAILABLE-FOR-COMM> 46,109
<COMMON-STOCK-DIVIDENDS> 69,594
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 96,752
<EPS-PRIMARY> 1.23
<EPS-DILUTED> 1.23
</TABLE>
