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, 1996
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) 388-2200
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, 1996 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, 1996
and 1995 3-5
Consolidated Balance Sheets - September 30, 1996
and December 31, 1995 6, 7
Consolidated Statements of Cash Flows -
Nine Months and Twelve Months Ended September 30,
1996 and 1995 8, 9
Consolidated Statements of Capitalization -
September 30, 1996 and December 31, 1995 10
Notes to Consolidated Financial Statements 11-13
Independent Accountants' Report 14
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 16-26
Part II. Other Information:
Item 1. Legal Proceedings 27
Item 6. Exhibits and Reports on Form 8-K 27-34
Signatures 35
PART I - FINANCIAL INFORMATION
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Item 1. Financial Statements
Three Months Ended
September 30,
Increase
1996 1995 (Decrease)
(Thousands of Dollars)
REVENUES $149,652 $148,726 $ 926
EXPENSES
Operation:
Purchased power 29,454 24,027 5,427
Fuel expense 21,887 16,527 5,360
Power cost adjustment (11,244) 961 (12,205)
Other 32,063 29,225 2,838
Maintenance 12,158 9,345 2,813
Depreciation 17,652 17,033 619
Taxes other than income taxes 5,902 5,971 (69)
Total expenses 107,872 103,089 4,783
INCOME FROM OPERATIONS 41,780 45,637 (3,857)
OTHER INCOME:
Allowance for equity funds used during
construction 15 (23) 38
Other - Net 3,561 4,747 (1,186)
Total other income 3,576 4,724 (1,148)
INTEREST CHARGES:
Interest on long-term debt 13,413 12,787 626
Other interest 1,286 1,409 (123)
Total interest charges 14,699 14,196 503
Allowance for borrowed funds used
during construction (91) (48) (43)
Net interest charges 14,608 14,148 460
INCOME BEFORE INCOME TAXES 30,748 36,213 (5,465)
INCOME TAXES 11,597 12,442 (845)
NET INCOME 19,151 23,771 (4,620)
Dividends on preferred stock 1,954 1,976 (22)
EARNINGS ON COMMON STOCK $17,197 $21,795 $(4,598)
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612 -
Earnings per share of common stock $ 0.46 $ 0.58 $ (0.12)
Dividends paid per share of common stock $ 0.465 $ 0.465 $ -
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Nine Months Ended
September 30,
Increase
1996 1995 (Decrease)
(Thousands of Dollars)
REVENUES $436,665 $410,316 $26,349
EXPENSES
Operation:
Purchased power 54,100 41,419 12,681
Fuel expense 37,818 39,638 (1,820)
Power cost adjustment 1,069 7,972 (6,903)
Other 97,421 93,515 3,906
Maintenance 31,273 28,345 2,928
Depreciation 52,224 50,143 2,081
Taxes other than income taxes 15,749 18,414 (2,665)
Total expenses 289,654 279,446 10,208
INCOME FROM OPERATIONS 147,011 130,870 16,141
OTHER INCOME:
Allowance for equity funds used during
construction 12 (16) 28
Other - Net 10,017 10,065 (48)
Total other income 10,029 10,049 (20)
INTEREST CHARGES:
Interest on long-term debt 39,078 38,364 714
Other interest 3,932 4,021 (89)
Total interest charges 43,010 42,385 625
Allowance for borrowed funds used
during construction (255) (1,180) 925
Net interest charges 42,755 41,205 1,550
INCOME BEFORE INCOME TAXES 114,285 99,714 14,571
INCOME TAXES 41,891 37,626 4,265
NET INCOME 72,394 62,088 10,306
Dividends on preferred stock 5,832 6,009 (177)
EARNINGS ON COMMON STOCK $66,562 $56,079 $10,483
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612 -
Earnings per share of common stock $ 1.77 $ 1.49 $ 0.28
Dividends paid per share of common stock $ 1.395 $ 1.395 $ -
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Twelve Months Ended
September 30,
Increase
1996 1995 (Decrease)
(Thousands of Dollars)
REVENUES $571,970 $545,592 $26,378
EXPENSES:
Operation:
Purchased power 67,266 47,919 19,347
Fuel expense 52,871 63,772 (10,901)
Power cost adjustment 389 8,138 (7,749)
Other 130,621 123,766 6,855
Maintenance 38,881 38,960 (79)
Depreciation 69,496 62,684 6,812
Taxes other than income taxes 20,313 24,822 (4,509)
Total expenses 379,837 370,061 9,776
INCOME FROM OPERATIONS 192,133 175,531 16,602
OTHER INCOME:
Allowance for equity funds used during
construction 12 112 (100)
Other - Net 14,324 12,140 2,184
Total other income 14,336 12,252 2,084
INTEREST CHARGES:
Interest on long-term debt 51,860 51,154 706
Other interest 5,220 5,051 169
Total interest charges 57,080 56,205 875
Allowance for borrowed funds used
during construction (516) (1,618) 1,102
Net interest charges 56,564 54,587 1,977
INCOME BEFORE INCOME TAXES 149,905 133,196 16,709
INCOME TAXES 52,678 47,758 4,920
NET INCOME 97,227 85,438 11,789
Dividends on preferred stock 7,814 7,937 (123)
EARNINGS ON COMMON STOCK $89,413 $77,501 $11,912
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612 -
Earnings per share of common stock $ 2.38 $ 2.06 $ 0.32
Dividends paid per share of common stock $ 1.86 $ 1.86 $ -
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, December 31,
1996 1995
(Thousands of Dollars)
ELECTRIC PLANT:
In service (at original cost) $2,524,274 $2,481,830
Accumulated provision for depreciation (876,334) (830,615)
In service - Net 1,647,940 1,651,215
Construction work in progress 29,774 20,564
Held for future use 1,034 1,106
Electric plant - Net 1,678,748 1,672,885
INVESTMENTS AND OTHER PROPERTY 31,253 16,826
CURRENT ASSETS:
Cash and cash equivalents 6,931 8,468
Receivables:
Customer 37,467 33,357
Allowance for uncollectible accounts (1,394) (1,397)
Notes 5,445 5,134
Employee notes receivable 4,573 4,648
Other 7,747 10,771
Accrued unbilled revenues 21,276 25,025
Materials and supplies (at average cost) 25,715 25,937
Fuel stock (at average cost) 15,749 13,063
Prepayments 17,022 20,778
Regulatory assets associated with income taxes 4,598 5,777
Total current assets 145,129 151,561
DEFERRED DEBITS:
American Falls and Milner water rights 32,260 32,440
Company owned life insurance 56,987 56,066
Regulatory assets associated with income taxes 199,844 200,379
Regulatory assets - other 80,892 68,348
Other 45,270 43,248
Total deferred debits 415,253 400,481
TOTAL $2,270,383 $2,241,753
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED BALANCE SHEETS
CAPITALIZATION & LIABILITIES
September 30, December 31,
1996 1995
(Thousands of Dollars)
CAPITALIZATION (See Page 10):
Common stock equity - $2.50 par value (shares
authorized 50,000,000; shares outstanding
September 30, 1996 - 37,612,351; December 31,
1995 - 37,612,351) $ 679,172 $682,775
Preferred stock 132,021 132,181
Long-term debt 710,243 672,618
Total capitalization 1,521,436 1,487,574
CURRENT LIABILITIES:
Long-term debt due within one year 68 20,517
Notes payable 33,016 53,020
Accounts payable 27,127 40,483
Taxes accrued 28,161 15,409
Interest accrued 11,899 14,785
Accumulated deferred income taxes 4,598 5,777
Other 29,711 12,867
Total current liabilities 134,580 162,858
DEFERRED CREDITS:
Regulatory liabilities associated with accumulated
deferred investment tax credits 71,145 70,507
Accumulated deferred income taxes 410,447 408,394
Regulatory liabilities associated with income taxes 35,040 34,554
Regulatory liabilities - other 643 789
Other 97,092 77,077
Total deferred credits 614,367 591,321
TOTAL $2,270,383 $2,241,753
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Nine Months Ended
September 30,
1996 1995
OPERATING ACTIVITIES: (Thousands of Dollars)
Cash received from operations:
Retail revenues $378,251 $358,372
Wholesale revenues 45,093 43,406
Other revenues 17,417 17,262
Fuel paid (36,961) (45,301)
Purchased power paid (52,775) (39,514)
Other operation & maintenance paid (132,708) (119,445)
Interest paid (includes long and
short-term debt only) (43,847) (41,363)
Income taxes paid (30,532) (31,814)
Taxes other than income taxes paid (11,351) (12,425)
Other operating cash receipts and payments-Net 3,103 (4,368)
Net cash provided by operating activities 135,690 124,810
FINANCING ACTIVITIES:
First mortgage bonds issued 30,000 -
PC Bond fund requisitions/Other long-term debt 7,700 -
Short-term borrowings - Net (20,000) (4,000)
Long-term debt retirement (20,052) (502)
Preferred stock retirement (81) (135)
Dividends on preferred stock (5,956) (5,875)
Dividends on common stock (52,443) (52,482)
Other sources/(uses) (2,650) (791)
Net cash used in financing activities (63,482) (63,785)
INVESTING ACTIVITIES:
Additions to utility plant (58,591) (59,702)
Conservation (2,720) (4,589)
Increase in investments (14,525) -
Other 2,091 3,163
Net cash used in investing activities (73,745) (61,128)
Change in cash and cash equivalents (1,537) (103)
Cash and cash equivalents beginning of period 8,468 7,748
Cash and cash equivalents end of period $ 6,931 $ 7,645
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net Income $ 72,394 $ 62,088
Adjustments to reconcile net income to net cash:
Depreciation 52,224 50,143
Deferred income taxes 2,622 6,664
Investment tax credit-Net 638 (179)
Allowance for funds used during construction (267) (1,164)
Postretirement benefits funding (excl pensions) 934 (3,508)
Changes in operating assets and liabilities:
Accounts receivable 4,096 8,724
Fuel inventory 856 (5,663)
Accounts payable 1,324 1,906
Taxes payable 12,535 5,353
Interest payable (874) 986
Other - Net (10,792) (540)
Net cash provided by operating activities $135,690 $124,810
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Twelve Months Ended
September 30,
1996 1995
OPERATING ACTIVITIES: (Thousands of Dollars)
Cash received from operations:
Retail revenues $488,700 $462,520
Wholesale revenues 60,947 59,930
Other revenues 22,980 23,177
Fuel paid (53,401) (69,570)
Purchased power paid (65,787) (53,804)
Other operation & maintenance paid (167,472) (158,179)
Interest paid (includes long and
short-term debt only) (56,787) (54,194)
Income taxes paid (39,119) (32,218)
Taxes other than income taxes paid (21,866) (23,410)
Other operating cash receipts and payments-Net 11,116 (550)
Net cash provided by operating activities 179,311 153,702
FINANCING ACTIVITIES:
First mortgage bonds issued 30,000 -
PC Bond fund requisitions/Other long-term debt 7,700 -
Short-term borrowings - Net (18,000) 19,400
Long-term debt retirement (20,068) (518)
Preferred stock retirement (98) (152)
Dividends on preferred stock (7,968) (7,898)
Dividends on common stock (69,929) (69,977)
Other sources/(uses) (2,640) (775)
Net cash used in financing activities (81,003) (59,920)
INVESTING ACTIVITIES:
Additions to utility plant (82,855) (88,541)
Conservation (3,818) (6,477)
Increase in investments (14,525) -
Other 2,176 3,492
Net cash used in investing activities (99,022) (91,526)
Change in cash and cash equivalents (714) 2,256
Cash and cash equivalents beginning of period 7,645 5,389
Cash and cash equivalents end of period $6,931 $7,645
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net Income $97,227 $85,438
Adjustments to reconcile net income to net cash:
Depreciation 69,496 62,684
Deferred income taxes 7,656 7,962
Investment tax credit-Net (269) 253
Allowance for funds used during construction (528) (1,729)
Postretirement benefits funding (excl pensions) 1,585 (3,271)
Changes in operating assets and liabilities:
Accounts receivable 657 35
Fuel inventory (531) (5,798)
Accounts payable 1,479 (5,885)
Taxes payable 4,664 8,872
Interest payable 240 1,845
Other - Net (2,365) 3,296
Net cash provided by operating activities $179,311 $153,702
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
September 30, December 31,
1996 1995
(Thousands of Dollars)
COMMON STOCK EQUITY:
Common stock $ 94,031 $ 94,031
Premium on capital stock 362,823 363,044
Capital stock expense (4,147) (4,127)
Retained earnings 226,465 229,827
Total common stock equity 679,172 44.6% 682,775 45.9%
PREFERRED STOCK, cumulative, ($100 par
or stated value):
4% preferred stock (authorized 215,000;
shares outstanding: 1996-170,206;
1995-171,813) 17,021 17,181
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 132,021 8.7 132,181 8.9
LONG-TERM DEBT:
First mortgage bonds:
5 1/4% Series due 1996 - 20,000*
5.33 % Series due 1998 30,000 30,000
8.65 % Series due 2000 80,000 80,000
6.93 % Series due 2001 30,000 -
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 500,000 490,000
*Amount due within one year - (20,000)
Net first mortgage bonds 500,000 470,000
Pollution control revenue bonds:
5.90 % Series due 2003 - 24,200*
6 % Series due 2007 - 24,000
7 1/4% Series due 2008 4,360 4,360
7 5/8% Series 1983-1984 due 2013-2014 - 68,100
8.30 % Series 1984 due 2014 49,800 49,800
6.05 % Series 1996A due 2026 68,100 -
Variable Rate Series 1996B due 2026 24,200 -
Variable Rate Series 1996C due 2026 24,000 -
Total pollution control revenue bonds 170,460 170,460
*Amount due within one year - (450)
Net pollution control revenue bonds 170,460 170,010
REA Notes 1,649 1,700
Amount due within one year (68) (67)
Net REA Notes 1,581 1,633
IdaWest Notes 7,700 -
American Falls bond guarantee 20,560 20,740
Milner Dam note guarantee 11,700 11,700
Unamortized premium/discount - Net (1,758) (1,465)
Total long-term debt 710,243 46.7 672,618 45.2
TOTAL CAPITALIZATION $1,521,436 100.0% $1,487,574 100.0%
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF ACCOUNTING POLICIES:
Financial Statements
In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments
necessary to present fairly the consolidated financial
position as of September 30, 1996 and the consolidated
results of operation for the three months, nine months and
twelve months ended September 30, 1996 and 1995 and the
consolidated cash flows for the nine months and twelve
months ended September 30, 1996 and 1995. 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, 1995. 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.; Ida-West Energy Company (Ida-West);
Stellar Dynamics (Stellar); and Idaho Power Resources
Corporation (IPRC). 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 and Cash Equivalents
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.
Management Estimates
The preparation of financial statements, in conformity with
generally accepted accounting principles, requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Reclassifications
Certain items previously reported for years prior to 1996
have been reclassified to conform with the current year's
presentation. Net income was not affected by these
reclassifications.
2. 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 $1.8 million at
September 30, 1996. 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 flow.
3. REGULATORY ISSUES:
The Company has in place, in its Idaho jurisdiction, a
Power Cost Adjustment (PCA) mechanism which allows Idaho's
retail customer rates to be adjusted annually to reflect
the Idaho share of forecasted net power supply costs.
Deviations from forecasted costs are deferred with interest
and then adjusted (trued-up) in the subsequent year. At
September 30, 1996, the Company had recorded $4.6 million
of power supply costs above those projected in the 1996
forecast. The current balance is adjusted monthly as
actual conditions are compared to the forecasted net power
supply costs.
The Company filed its 1996 PCA application on April 15,
1996, requesting a decrease in the Idaho jurisdiction PCA
rate. On May 16th the Company received a ruling from the
Idaho Public Utility Commission reducing Idaho rates by
$25.7 million (5.9 percent), including the true-up for
1995. The 1996 PCA forecast reflects costs below the base
rates established for PCA expenses.
Under Order No. 26216, when the Company's actual earnings
in the Idaho jurisdiction in a given year exceed an 11.75
percent return on year-end common equity, the Company will
refund 50 percent of the excess when it makes its next PCA
adjustment. As a result of this order, at September 30,
1996 the Company provided $3.45 million as a reserve for
possible rate refunds to customers. The reserve has been
established in the event that the Company's earnings will
continue to exceed the 11.75 percent threshold for the year
1996.
4. FINANCING:
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. On
July 29, 1996, the Company issued $30,000,000 principal
amount of Secured Medium Term Notes, Series B, 6.93% Series
Due 2001. The net proceeds were used for repayment of
commercial paper issued in connection with the Company's
ongoing construction program. On October 2, 1996,
$27,000,000 principal amount of Secured Medium Term Notes,
Series B, 6.85% Due 2002 were issued with net proceeds from
this sale to be used to redeem the Company's 8.375% Series,
Serial Preferred Stock, Without Par Value. Pending the
redemption, these funds were used to repay a portion of the
Company's outstanding short-term debt.
On October 9, 1996, the Company mailed a Notice of
Redemption (with a call date of November 7, 1996) for the
250,000 shares of 8.375% Series, Serial Preferred Stock,
Without Par Value.
On August 29, 1996, tax exempt Pollution Control Revenue
Refunding Bonds in principal amount of $68,100,000 Series
1996A, $24,200,000 Series 1996B and $24,000,000 Series
1996C were issued by Sweetwater County, Wyoming. Certain
of the proceeds were used to retire the $24,200,000
Pollution Control Revenue Bonds due 2003. The remainder of
the proceeds were used to provide for sufficient cash and
U.S. government securities which were placed in an
irrevocable trust to repay when due the principal and
interest on the $24,000,000 Pollution Control Revenue Bonds
due 2007 and the principal, interest and call premium on
the $68,100,000 Pollution Control Revenue Bonds due 2013-
2014. As a result of this defeasance transaction the
bonds, cash and securities are not included on the
accompanying consolidated balance sheet at September
30,1996.
5. INCOME TAXES:
The effective tax rate for the first nine months decreased
from 37.7% in 1995 to 36.7% in 1996. A reconciliation
between the statutory federal income tax rate and the
effective rate for the nine months ended September 30, 1996
and 1995 is as follows:
1996 1995
Amount Rate Amount Rate
Computed income taxes based on
statutory federal income tax rate $40,000 35.0% $34,900 35.0%
Changes in taxes resulting from:
Current state income taxes 5,195 4.5 5,642 5.6
Prior year adjustments - - (877) (0.9)
Depreciation 3,384 3.0 3,297 3.3
Investment tax credits restored (2,110) (1.8) (2,125) (2.1)
Repair allowance (2,424) (2.1) (2,071) (2.1)
Other (2,154) (1.9) (1,140) (1.1)
$41,891 36.7% $37,626 37.7%
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, 1996, and the related
consolidated statements of income for the three-, nine- and
twelve-month periods ended September 30, 1996 and 1995 and
consolidated statements of cash flows for the nine- and twelve-
month periods ended September 30, 1996 and 1995. 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, 1995, 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, 1996, 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, 1995 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
November 4, 1996
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Idaho Power Company's consolidated financial statements represent the
Company and its six wholly-owned subsidiaries: Idaho Energy Resources
Company (IERCo); Ida-West Energy Company (Ida-West); IDACORP, Inc.;
Idaho Utility Products Company (IUPCo); Stellar Dynamics (Stellar); and
Idaho Power Resources Corporation (IPRC). This discussion uses the
terms Idaho Power and the Company interchangeably to refer to Idaho
Power Company and its subsidiaries.
The Company is primarily a hydro-based electric utility. Therefore,
changing weather, precipitation, and streamflow conditions
significantly affect its operational results, just as they affect other
utilities in the Pacific Northwest. In addition, the amount of energy
used by general business consumers varies from season to season - and
from month to month within each season - primarily because of
seasonal weather. Non-firm (or off-system) energy sales also vary, by
quarter and by year, as a result of varying hydro conditions and energy
demand from other utilities. Operating costs fluctuate during the
periods due to water and market conditions tempered by the operation of
the Power Cost Adjustment (PCA) mechanism in Idaho, its primary
jurisdiction.
The PCA provides recovery for a major portion of those operating
expenses that have the greatest potential for variation. With the PCA,
the Company's operating results and earnings per share are more closely
aligned with general regulatory, economic, and temperature-related
weather conditions, and are less dependent on variable precipitation
and streamflow conditions.
Earnings Per Share and Book Value
Earnings per share of common stock were $0.46 for the quarter, a
decrease of $0.12 (20.7 percent) from the same quarter last year. As
expected the Company's more normal 1996 third quarter earnings are down
from last year's record levels as a result of relatively flat operating
revenues, increased operating expenses and a more normal effective
income tax rate. Year-to-date earnings per share were $1.77, an
increase of $0.28 (18.8 percent). The twelve months ended September 30,
1996 yielded earnings of $2.38 per share, an increase of $0.32 (15.5
percent) from the twelve months ended September 30, 1995. The twelve-
month earnings represent a 13.17 percent earned return on year-end
common equity, compared to the 11.75 percent earned through September
30 last year. At September 30, 1996, the book value per share of
common stock was $18.06, compared to $17.54 for the same period a year
ago.
RESULTS OF OPERATIONS
Precipitation and Streamflows
Idaho Power monitors the effect of precipitation and streamflow
conditions on Brownlee Reservoir, the water source for the three Hells
Canyon hydroelectric projects. In a typical year, these three projects
combine to produce about half of the Company's generated electricity.
Precipitation in the Company's service territory was near normal levels
for the first nine months of 1996. At October 1, 1996, reservoir
storage above Brownlee was 62 percent of capacity, compared to 65
percent last year and an average storage of 133 percent for the same
period.
Inflows into Brownlee result from a combination of precipitation,
storage, and ground water conditions. In water year 1996, 8.3 million
acre-feet (MAF) of water flowed into Brownlee Reservoir during the
April-July runoff period, compared to 6.6 MAF a year ago. This figure
represents approximately 173 percent of the 68-year median of 4.8 MAF.
Energy Requirements
For the first nine months of 1996, the Company met its total system
energy requirements from the following sources: hydro generation (63
percent), thermal generation (20 percent), and purchased power and
other interchanges (17 percent). For the same period of 1995, these
figures were 61 percent hydro, 28 percent thermal, and 11 percent
purchased power and other interchanges.
With streamflows above average, the Company estimates that 59 percent
of its 1996 energy requirements will come from hydro generation, 24
percent from thermal generation, and 17 percent from purchased power
and other interchanges. Under normal conditions, Idaho Power's hydro
system would contribute approximately 57 percent of the Company's total
system energy requirement. Thermal generation accounts for
approximately 34 percent, and the remaining 9 percent comes from
purchased power and other interchanges.
Economy
Since 1987 Idaho's economy has consistently posted annual gains in
employment. On many occasions in the past ten years, Idaho earned a
ranking among the top five fastest growing states in the nation. Since
1987, through mid-year 1996, nonagricultural employment in the state
grew at an annual average compound rate of 4.0 percent per year.
Recently, Idaho's economic growth has slowed somewhat, but has remained
strong when compared to the rest of the nation. During 1995, Idaho
experienced a 3.5 percent increase in nonagricultural employment. In
the first seven months of 1996 the rate of employment growth increased
modestly and resulted in a 12-month growth rate of 3.9 percent.
Current economic forecasts estimate that Idaho's nonagricultural
employment will produce a 3.1 percent gain in 1996 followed by gains
of 2.9 percent in 1997 and 3.0 percent in 1998. Idaho's population
gains are expected to moderate in the near-term as the state's job
creation rate slows. Still, Idaho will likely maintain a rate of
population growth over the next few years that is nearly twice that of
the national average.
Power Cost Adjustment
Since 1993, the Idaho Public Utilities Commission (IPUC) has permitted
Idaho Power to use a PCA mechanism in its Idaho jurisdiction. The PCA
enables the Company to collect or to refund a portion of the difference
between net power supply costs actually incurred and those allowed in
the Company's base rates. The current balance is adjusted monthly as
actual conditions are compared to the PCA forecasted net power supply
costs. For the period May 1996 through May 1997, the Company received
approved tariffs from the IPUC, reducing Idaho jurisdictional PCA rates
by $25.7 million (5.9 percent), including the true-up for the PCA
period May 1995 through May 1996. The reduction reflects anticipated
lower power supply costs in the coming year due to above-average
hydroelectric generating conditions. The 1996 PCA forecast reflects
power supply costs below those established for PCA expenses in the
Company's last general rate proceeding. At September 30, 1996, the
Company had recorded as a deferred assets and reduction in operating
expenses $4.6 million of power supply costs above those projected in
the 1996 forecast.
Revenues
General business revenues were up $0.7 million (1.0 percent) for the
quarter, $21.2 million (6.1 percent) for the year-to-date, and $19.8
million (4.3 percent) for the twelve months ended September 30, 1996.
The increases reflect the continuing strength of economic growth in the
Company's service territory, increases in new customers, energy usage
patterns, and rate adjustments in the Idaho and Oregon jurisdictions.
Idaho Power added 11,144 new general business customers in the last
twelve months, a 3.3 percent increase over the total number of
customers served at this time last year.
Total surplus sales increased $2.3 million (282.2 percent) during the
third quarter, $4.0 million (37.9 percent) for nine months ended and
$4.1 million (34.0 percent) for the twelve-month period. The increases
reflect improved hydroelectric generating conditions in 1996. Firm
sales increased $0.8 million (7.3 percent) during the third quarter
$2.1 million (6.6 percent) for year-to-date and $3.3 million (7.6
percent) for the twelve-month period.
When compared to the corresponding periods a year ago, total operating
revenues increased $0.9 million (1.0 percent) for the third quarter,
$26.3 million (6.4 percent) year-to-date and $26.4 million (4.8
percent) for the twelve months ended September 30, 1996. The increase
for the third quarter was reduced by the recording of a provision for
rate refund pursuant to the Company's regulatory compact in Idaho.
Expenses
Total operation and maintenance expenses were up $4.2 million (5.3
percent) for the quarter, $10.8 million (5.1 percent) year-to-date, and
$7.5 million (2.7 percent) for the twelve months ended September 30,
1996.
Purchased power expenses were up for the three, nine, and twelve-month
periods by $5.4 million (22.6 percent), $12.7 million (30.6 percent),
and $19.3 million (40.4 percent), respectively. These increases
reflect economy purchases that were made to take advantage of low
market prices this year. The low market prices were a result of the
abundance of hydro generation in the West, which displaced the
Company's thermal facilities, and increased purchases from CSPP
projects that also experienced strong hydroelectric generating
conditions.
Fuel expenses were up for the quarter: $5.4 million (32.4 percent), but
down $1.8 million (4.6 percent) year-to-date and $10.9 million (17.1
percent) for the twelve months ended. The increase for the quarter is
mainly due to the operation of the Valmy coal-fired power plant
following this summer's regional transmission line outages which
affected several western states' power supplies. The Company operated
Valmy for a period of time during peak load periods for voltage and
reactive support of the Company's transmission grid. The decreases for
the year-to-date and twelve months periods reflect improved
hydroelectric generating conditions.
The PCA component of expenses was down for the quarter, year-to-date,
and twelve month periods by $12.2 million, $6.9 million, and $7.7
million respectively. The PCA mechanism reduces expenses when power
supply costs are above forecast, and increases them when power supply
costs are below forecast.
All other operation and maintenance expenses increased $5.7 million for
the third quarter, $6.8 million year-to-date, and $6.8 million for the
twelve months ended September 30, 1996. These increased expenses were
due in part to costs associated with maintenance of the Company's
electric system, tax and regulatory charges related to increased hydro
generation, and increased consulting services.
Total interest costs increased slightly for the quarter, year-to-date
and twelve months ended $0.5 million, $0.6 million, and $0.9
respectively. These increases are partly the result of borrowings on
investments by the Company's subsidiaries and the issuance of $30.0
million Medium Term Notes by the Company in July, 1996.
Ida-West Energy Company
This wholly owned subsidiary of the Company holds investments in eight
operating hydroelectric plants with a total generating capacity of 60.8
megawatts (MW).
In January 1996, Ida-West purchased all of the outstanding bonds
(approximately $33 million) that were issued to finance three
hydroelectric plants known collectively as the Friant Power Project.
This project is located at the U.S. Bureau of Reclamation's Friant Dam
on the headwaters of the San Joaquin River in Madera and Fresno
Counties, California. It has an aggregate generating capacity of 27.4
MW. The project is owned and operated by Friant Power Authority, a
quasi-governmental entity consisting of six irrigation districts, a
water district, and a municipal utility district.
In addition, Ida-West has an interest with two other equal partners in
the Hermiston Power Project, a 460 MW gas-fired cogeneration project to
be located near Hermiston, Oregon. The Bonneville Power Administration
(BPA) selected the project to be a part of its Resource Contingency
Program. In 1993, the partnership and the BPA signed an option
development agreement granting the 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 agreement also entitled the partnership to
reimbursement from the BPA for certain development costs, based on the
achievement of certain milestones. Ida-West has been responsible for
managing all permitting and development activities relating to the
project since its inception. In March 1996, the Oregon Energy Facility
Siting Council issued a site certificate for the project, the last
major permit necessary for construction and operation of the project.
Therefore, the partnership has completed all of its option development
responsibilities and has entered into a new agreement with BPA
continuing BPA's option into the hold period (which expires on June 30,
2000) and allowing the partnership to market the project's output to
third parties to the extent their loads are not under contract with
BPA, subject to BPA's right of first refusal to acquire the project's
output until 2005. The partnership is exploring various alternatives
for marketing the project's output. Project financing for construction
costs would be non-recourse to Idaho Power.
In August 1996, Ida-West signed an agreement in principle to acquire
five hydroelectric projects located in Shasta County, California with a
total generating capacity of 11.2 MW. Ida-West will acquire the
projects through a limited liability company in which it will hold a
fifty percent interest. Closing is expected to occur by the end of
1996, subject to the satisfaction of customary closing conditions.
To date, the Company has invested $20 million in Ida-West. Ida-West
continues an active search for new projects.
Idaho Power Resources Corporation
IPRC, a wholly-owned subsidiary, incorporated in March 1996 and
chartered in July 1996 to provide guidance, resources and long-term
strategic planning to projects or business proposals that are not
subject to regulation by the FERC and the state regulatory commissions.
IPRC will establish, acquire and expand business operations in
sustainable infrastructure technology and services including energy,
water, waste disposal, telecommunications and information systems.
IPRC has a Memorandum of Understanding signed by Idaho Power and
representatives from the government of Indonesia on March 6, 1996 that
clears the way to conduct a detailed feasibility study on using solar
photovoltaic (PV) technology, micro hydroelectric systems, and other
renewable energy systems to provide electricity to various locations
throughout Indonesia's complex of islands. A feasibility study and
business plan is expected to be completed by the end of this year. If
the project is deemed workable and receives the required approvals,
IPRC would likely begin to develop services in 1997.
In October 1996, IPRC concluded its first non-utility acquisition.
Applied Power Corporation (APC), is a Lacy, Washington based,
international company that designs, supplies and distributes
photovoltaic (PV)systems. APC's demonstrated ability to design,
manufacture and distribute packaged PV systems complements IPRC's goal
of creating new service companies to meet a worldwide market for
renewable energy. APC was established in 1981, has operated in nine
countries worldwide.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
For the nine months ended September 30, 1996, the Company generated
$135.7 million in net cash from operations. After deducting for both
common and preferred dividends, net cash generation from operations
provided approximately $77.3 million for the Company's construction
program and other capital requirements. This is a 16.2 percent
increase over the same period in 1995.
Cash Expenditures
Idaho Power estimates that its cash construction program for 1996 will
require approximately $88.4 million. This estimate is subject to
revision in light of changing economic, regulatory, environmental, and
conservation factors. During the first nine months of 1996, the
Company expended approximately $58.6 million for construction.
Idaho Power's primary financial commitments and obligations are related
to contracts and purchase orders associated with its ongoing
construction program. To the extent required, the Company expects to
finance these commitments and obligations by using both internally
generated funds and externally financed capital. Although the Company
has regulatory approval to incur up to $150 million of bank borrowings,
it presently maintains lines of credit with various banks aggregating
$85 million. The Company may use these lines of credit to finance a
portion of its construction program on an interim basis. At September
30, 1996, the Company's short-term borrowings totaled $33 million.
Financing Program
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. On July 29, 1996, the Company issued
$30,000,000 principal amount of Secured Medium Term Notes, Series B,
6.93% Series Due 2001. The net proceeds were used for repayment of
commercial paper issued in connection with the Company's ongoing
construction program. On October 2, 1996, $27,000,000 principal amount
of Secured Medium Term Notes, Series B, 6.85% Due 2002 were issued with
net proceeds from this sale to be used to redeem the Company's 8.375%
Series, Serial Preferred Stock, Without Par Value. Pending the
redemption, these funds were used to repay a portion of the Company's
outstanding short-term debt.
On October 9, 1996, the Company mailed a Notice of Redemption for the
250,000 shares of 8.375% Series, Serial Preferred Stock, Without Par
Value, informing shareholders that they are required to send in their
certificates to be redeemed for payment.
On August 29, 1996, tax exempt Pollution Control Revenue Refunding
Bonds in principal amount of $68,100,000 Series 1996A, $24,200,000
Series 1996B and $24,000,000 Series 1996C were issued by Sweetwater
County, Wyoming. Certain of the proceeds were used to retire the
$24,200,000 Pollution Control Revenue Bonds due 2003. The remainder of
the proceeds were used to provide for sufficient cash and U.S.
government securities which were held in an irrevocable trust to repay
when due the principal and interest on the $24,000,000 pollution
control revenue bonds due 2007 and the principal, interest and call
premium on the $68,100,000 pollution control revenue bonds due 2013-
2014. As a result of this defeasance transaction the bonds, cash and
securities are not included on the accompanying consolidated balance
sheet as of September 30,1996.
Idaho Power's 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. For the twelve-month period
ended September 30, 1996, the Company's consolidated pre-tax interest
coverage was 3.63 times.
Southwest Intertie Project
The Company's Southwest Intertie Project (SWIP) is on hold, pending an
order from the Public Service Commission of Nevada allowing Nevada
Power to participate in the project.
The Company's SWIP proposal calls for a 500-mile, 500 kilovolt (kV)
transmission line that would serve as a major north-south transmission
artery, interconnecting the Company's system with those of utilities in
California and the Southwest. The U.S. Bureau of Land Management has
issued a favorable record of decision on the Company's environmental
impact statement and granted the project a right-of-way across public
lands in Idaho, Nevada, and Utah.
The Company and interested parties have completed ownership allocation
and negotiations for the execution of the Memorandum of Agreement
(MOA). When the MOA is executed, the Company will require each party to
pay its share of the approximately $8.5 million expended for
environmental permitting, right-of-way acquisition, and related
development activities. The SWIP owners will then form an Executive
Committee, with voting rights proportional to each share of the
project. The Executive Committee will oversee development activities
for the SWIP and related projects.
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. Idaho Power fully supports and
actively participates in this regional effort.
In March of 1995, the National Marine Fisheries Service (NMFS) released
a Proposed Recovery Plan for the listed Snake River Salmon. The NMFS
accepted public comment on the Plan through December of 1995. As
drafted, the Plan would not require any changes to the Company's
current operations for salmon. 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 will continue to consult with the NMFS
regarding ongoing system operations. The Company does not expect these
interim operations to change its current operations for salmon.
Idaho Power has negotiated a 5-year contract with the BPA to replace
lost energy and capacity resulting from recovery plans that impact the
Company's power supply costs.
Nez Perce Lawsuit
Idaho Power's Board of Directors and the Nez Perce Tribe have approved
an Agreement between the Company and the Tribe, which resolves a four-
and-a-half year-old lawsuit regarding alleged damages to the Tribe's
treaty-reserved fishing rights.
The suit arose from the construction, maintenance, and operation of
Idaho Power's three-dam Hells Canyon Complex and the project's alleged
impact both on fish and the Tribe's treaty-reserved fishing rights.
The Agreement requires the approval of the United States government
(through the Bureau of Indian Affairs (BIA)) acting in its capacity as
trustee for the Tribe.
Under the terms of the agreement, Idaho Power will pay the Nez Perce
Tribe $11.5 million in the following manner:
- $5 million in at which time the Nez Perce would move for the
dismissal of, with prejudice, their legal action against the Company.
- $1,625,000 each year for the next four years beginning in 1997.
All payments under the Agreement in Principle will be made in 1996
dollars, which allows for adjusted future inflation within a minimum
range of 3 percent and a maximum of 7 percent. The first payment of
$5.0 million plus inflation adjustment will be paid on or before the
end of 1996.
On July 12, 1996 the IPUC issued Order No. 26513, and on August 5,
1996, the OPUC issued Order No. 96-207 approving capitalization of
their respective jurisdictional share of the $11.5 million, upon the
signing of the definitive agreement between the Tribe and Idaho Power.
The parties are still awaiting BIA approval.
In connection with settling the litigation, the Company and the Tribe
also reached a provisional settlement regarding the relicensing of the
Hells Canyon Complex. In return for the Tribe's support of the
Company's application to relicense the project, the Company will place
$5 million, the majority of which the Tribe has agreed to dedicate to
implementable fisheries restoration efforts, in an escrow account on
August 3, 2003, the date by which the Company must file its relicense
application. The Tribe will be entitled to earnings from investments
on this account until the Company accepts or rejects a new federal
license for the project. If the Company accepts the new federal
license, the Tribe will take ownership of the money in the account. If
the Company rejects the license, the money will be returned to the
Company. This settlement is provisional because the Tribe retains the
right to opt out of this relicensing settlement at any time prior to
the Company's acceptance of a new federal license.
Company Transformation and Regulatory Initiative
On August 3, 1995, Idaho Power filed a regulatory proposal with the
IPUC to support the Company's organizational redesign and corporate
vision. In response to the Company's proposal, the IPUC approved a
Settlement Stipulation that provides for a general rate freeze through
the end of 1999. The Stipulation also allows, as necessary, for the
accelerated amortization of regulatory liabilities associated with
accumulated deferred investment tax credits (ADITCs) to provide a
minimum 11.50 percent return on actual year-end common equity for the
Idaho jurisdiction. The new freeze and the accelerated amortization of
regulatory liabilities associated with ADITCs gives the Company time to
pursue and to implement its efficiency and growth initiatives with the
assurance of at least a reasonable level of financial performance apart
from the need to change customer prices.
On November 22, 1995, the Idaho State Tax Commission approved the
accounting treatment for the Idaho ADITCs. The Internal Revenue
Service granted its approval on March 5, 1996.
Arizona Public Service Agreement
On August 28, 1996 the Company filed an application with the Idaho
Public Utilities Commission (IPUC) requesting that the IPUC include the
cost of a firm purchase power agreement with Arizona Public Service
Company (APS) in the Company's PCA. The agreement provided for
delivery to begin in September 1996 and to continue for five years with
scheduled delivery each year for the period September through March.
The agreement contained a provision requiring inclusion in the PCA by
the IPUC as a condition of final acceptance. On November 1, 1996 the
Company received Order No. 26668 from the IPUC which denied the
inclusion of the contract costs in the PCA in their entirety. As a
result, Idaho Power gave APS notice that purchases under the Agreement
were suspended effective November 1, 1996.
Marketing Business Unit
To accommodate its customers and allow it to compete in the rapidly
evolving competitive market, the Company is forming a Marketing
Business Unit. This new business unit will be responsible for all
purchases and sales of electric energy, both retail and wholesale,
market research, planning and implementation of marketing strategies,
and sales to all Idaho Power customers.
The formation of this business unit will occur over the next three
months with a target of January 1, 1997, to be fully operational. Jan
Packwood has been named Executive Vice President and assigned the
responsibility of forming the executive and senior management team for
the Marketing Business Unit. In conjunction with the newly formed
marketing management team, he will lead the Company's effort to
establish a customer-driven marketing unit that will bring value to
employees, customers and stockholders alike.
To assist the Marketing Business Unit in bringing value to the Company,
the Board of Directors gave approval for executive management to form a
Risk Management Committee, comprised of executives and senior managers,
to oversee a new risk management program. The program is intended to
minimize fluctuations in earnings and cash flow while controlling the
volatility of the Company's energy prices to its customers. The
objectives of the program will include setting and achieving commodity
price targets, locking in commodity prices related to specific
contracts for the sale of electricity and managing commodity price risk
for customers.
The Company plans to appoint risk managers to conduct transactions to
manage commodity price risk and capital market risk. The transactions
will include over-the-counter or exchange-traded futures, options,
swaps, or combinations of the three.
IPUC Workshops Regarding Industry Changes
In August, 1996 the IPUC completed its investigation into changes in
the electric utility industry and issued Order No. 26555. The IPUC
commended the working group for its effort and for the development of a
position paper (an attachment to the order) on the changes affecting
the electric utility industry.
The position paper was the product of a series of workshops concerning
the electric utility industry restructuring and its impact on the state
of Idaho. Participants included commissioners and commission staff,
electric utility customers and customer group representatives, publicly-
owned utilities and investor-owned utilities, and public interest
groups. The position paper set forth regulatory and legal issues that
might arise during a transition to a more competitive environment. The
IPUC addressed the issues individually in Order No. 26555. In its
order the IPUC described a cautious forward approach, noting that
customers of Idaho regulated utilities pay some of the lowest rates in
the nation and that low cost hydroelectricity is an existing benefit of
Idaho retail customers. The IPUC stated its expectation that many of
the specific restructuring issues would be resolved in a case-by-case
manner.
FERC Order Nos. 888 and 889
On April 24, 1996, the FERC issued its Order Nos. 888 and 889 dealing
with Open-Access Non-Discriminatory Transmission Services by Public and
Transmitting Utilities, and standards of conduct regarding these
issues. These orders require public utilities owning transmission
lines to file open access tariffs available to buyers and sellers of
wholesale electricity, require utilities to use the tariffs for their
own wholesale sales and purchases, and allow utilities to recover
stranded costs, subject to certain conditions. Public utilities owning
transmission lines were required to file compliance tariffs by July 9,
1996.
Idaho Power has long had an informal open-access transmission policy,
and is experienced in providing reliable, high-quality, economical
transmission service. The Company provides various firm and non-firm
wheeling services for several surrounding utilities. In November of
1995, the Company filed with the FERC open-access tariffs for Point-to-
Point and Network transmission service. The Company requested and
received permission to implement these tariffs beginning February 1,
1996.
The substance of these tariffs was to offer the same quality and
character of transmission services to anyone seeking them as those the
Company uses in its own operations. A settlement was reached as filed
on the rate for services under these tariffs and the settlement has
been certified for approval to the FERC by the administrative law
judge.
On July 8, 1996, the Company filed a new open access transmission
tariff to replace the 1995 tariffs. This provides full compliance with
Final Order 888. This new filing did not include a rate change.
Independent Grid Operator
A group of seven investor-owned Northwest electric companies, including
Idaho Power, plus two public electric entities have signed a memorandum
of understanding that will create an independent transmission grid
operator called "IndeGO". It will ensure non-discriminatory, open
access to electricity transmission facilities in compliance with recent
FERC rulings. The group plans to file the IndeGO proposal with FERC by
December 31, 1996 and anticipates operation would commence by July 4,
1997. This memorandum of understanding is an agreement to investigate
the feaasibility of developing a regional transmission grid which would
be operated by an entity independent of power market interests. It is
believed that the formation of such an entity will facilitate the
operation of an evolving competitive electric power market. Operating
as one regional system, the nine utility companies will be able to
increase the efficiency of transmission operations and provide improved
access for all system users.
IndeGo is envisioned as an independent transmission company not to be
controlled by any individual power market participant(s). It is
anticipated that IndeGO will operate as a single control area
transmission grid, with pricing based on a single zonal tariff applied
equally to all users including the participating companies.
IndeGO will not own transmission facilities at the onset, but will be
responsible for the operation and maintenance of main transmission grid
facilities carrying 230 kilovolts (KV) or more that are owned or
controlled by the nine utilities. The area encompassed by the nine
companies has approximately 11,000 miles of transmission lines and
comprises nearly four million customer accounts.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
File As
Exhibit Number Exhibit
*3(a) 33-00440 4(a)(xiii) Restated Articles of
Incorporation of the Company as
filed with the Secretary of State
of Idaho on June 30, 1989.
*3(a)(i) 33-65720 4(a)(i) Statement of Resolution
Establishing Terms of 8.375%
Serial Preferred Stock, Without
Par Value (cumulative stated
value of $100 per share), as
filed with the Secretary of State
of Idaho on September 23, 1991.
*3(a)(ii) 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), as filed
with the Secretary of State of
Idaho on November 5, 1991.
*3(a)(iii) 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), 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 adopted
by Shareholders on May 1, 1991.
*3(c) 33-00440 4(a)(xiv) By-laws of the Company amended on
June 30, 1989, and presently in
effect.
*4(a)(i) 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(a)(ii) 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
2-51722 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
American Falls bond guarantee.
(see Exhibits 10(f) and
10(f)(i)).
*4(c) 33-65720 4(f) Agreement 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 the
Company and First Chicago
Trust Company of New York, as
Rights Agent (The Bank of New
York, successor Rights Agent).
*10(a) 2-51762 5(a) Agreement, dated April 20,
1973, between the Company and
FMC Corporation.
*10(a)(i) 2-57374 5(b) Letter Agreement, dated
October 22, 1975, relating to
agreement filed as Exhibit
10(a).
*10(a)(ii) 2-62034 5(b)(i) Letter Agreement, dated
December 22, 1976, relating to
agreement filed as Exhibit
10(a).
*10(a)(iii) 33-65720 10(a) Letter Agreement, dated
December 11, 1981, relating to
agreement filed as Exhibit
10(a).
*10(b) 2-49584 5(b) Agreements, dated
September 22, 1969, between
the Company and Pacific
Power & Light Company relating
to the operation, construction
and ownership of the Jim
Bridger Project.
*10(b)(i) 2-51762 5(c) Amendment, dated February 1,
1974, relating to operation
agreement filed as Exhibit
10(b).
*10(c) 2-49584 5(c) Agreement, dated as of
October 11, 1973, between the
Company and Pacific Power &
Light Company.
*10(d) 2-49584 5(d) Agreement, dated as of
October 24, 1973, between the
Company and Utah Power & Light
Company.
*10(d)(i) 2-62034 5(f)(i) Amendment, dated January 25,
1978, relating to agreement
filed as Exhibit 10(d).
*10(e) 33-65720 10(b) Coal Purchase Contract, dated
as of June 19, 1986, among the
Company, Sierra Pacific Power
Company and Black Butte Coal
Company.
*10(f) 2-57374 5(k) Contract, dated March 31,
1976, between the United
States of America and American
Falls Reservoir District, and
related Exhibits.
*10(f)(i) 33-65720 10(c) Guaranty Agreement, dated
March 1, 1990, between the
Company and West One Bank, as
Trustee, relating to
$21,425,000 American Falls
Replacement Dam Bonds of the
American Falls Reservoir
District, Idaho.
*10(g) 2-57374 5(m) Agreement, effective April 15,
1975, between the Company and
The Washington Water Power
Company.
*10(h) 2-62034 5(p) Bridger Coal Company
Agreement, dated February 1,
1974, between Pacific
Minerals, Inc., and Idaho
Energy Resources Co.
*10(i) 2-62034 5(q) Coal Sales Agreement, dated
February 1, 1974, between
Bridger Coal Company and
Pacific Power & Light Company
and the Company.
*10(i)(i) 33-65720 10(d) Second Restated and Amended
Coal Sales Agreement, dated
March 7, 1988, among Bridger
Coal Company and PacifiCorp
(dba Pacific Power & Light
Company) and the Company.
*10(i)(ii) 1-3198 10(i)(ii) Third Restated and Amended
Form 10-Q Coal Sales Agreement, dated
for 3/31/96 January 1, 1996, among Bridger
Coal Company and PacifiCorp
(dba Pacific Power & Light
Company) and the Company.
*10(j) 2-62034 5(r) Guaranty Agreement, dated as
of August 30, 1974, with
Pacific Power & Light Company.
*10(k) 2-56513 5(i) Letter Agreement, dated
January 23, 1976, between the
Company and Portland General
Electric Company.
*10(k)(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 the Company.
*10(k)(ii) 2-62034 5(t) Amendment, dated September 30,
1977, relating to agreement
filed as Exhibit 10(k).
*10(k)(iii) 2-62034 5(u) Amendment, dated October 31,
1977, relating to agreement
filed as Exhibit 10(k).
*10(k)(iv) 2-62034 5(v) Amendment, dated January 23,
1978, relating to agreement
filed as Exhibit 10(k).
*10(k)(v) 2-62034 5(w) Amendment, dated February 15,
1978, relating to agreement
filed as Exhibit 10(k).
*10(k)(vi) 2-68574 5(x) Amendment, dated September 1,
1979, relating to agreement
filed as Exhibit 10(k).
*10(l) 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(m) 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 the Company.
*10(n)(i)1 1-3198 10(n)(i) The Revised Security Plans for
Form 10-K Senior Management Employees
for 1994 and for Directors-a non-
qualified, deferred
compensation plan effective
November 30, 1994.
*10(n)(ii)1 1-3198 10(n)(ii) The Executive Annual Incentive
Form 10-K Plan for senior management
for 1994 employees effective January 1,
1995.
*10(n)(iii)1 1-3198 10(n)(iii) The 1994 Restricted Stock
Form 10-K Plan for officers and key
for 1994 executives effective July 1,
1994.
*10(o) 33-65720 10(f) Residential Purchase and Sale
Agreement, dated August 22,
1981, among the United Stated
of American Department of
Energy acting by and through
the Bonneville Power
Administration, and the
Company.
*10(p) 33-65720 10(g) Power Sales Contact, dated
August 25, 1981, including
amendments, among the United
States of America Department
of Energy acting by and
through the Bonneville Power
Administration, and the
Company.
*10(q) 33-65720 10(h) Framework Agreement, dated
October 1, 1984, between the
State of Idaho and the
Company relating to the
Company's Swan Falls and
Snake River water rights.
1 Compensatory Plan
*10(q)(i) 33-65720 10(h)(i) Agreement, dated October 25,
1984, between the State of
Idaho and the Company
relating to the agreement
filed as Exhibit 10(q).
*10(q)(ii) 33-65720 10(h)(ii) Contract to Implement, dated
October 25, 1984, between the
State of Idaho and the
Company relating to the
agreement filed as Exhibit
10(q).
*10(r) 33-65720 10(i) Agreement for Supply of Power
and Energy, dated
February 10, 1988, between
the Utah Associated Municipal
Power Systems and the
Company.
*10(s) 33-65720 10(j) Agreement Respecting
Transmission Facilities and
Services, dated March 21,
1988 among PC/UP&L Merging
Corp. and the Company
including a Settlement
Agreement between PacifiCorp
and the Company.
*10(s)(i) 33-65720 10(j)(i) Restated Transmission
Services Agreement, dated
February 6, 1992, between
Idaho Power Company and
PacifiCorp.
*10(t) 33-65720 10(k) Agreement for Supply of Power
and Energy, dated
February 23, 1989, between
Sierra Pacific Power Company
and the Company.
*10(u) 33-65720 10(l) Transmission Services
Agreement, dated May 18,
1989, between the Company and
the Bonneville Power
Administration.
*10(v) 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 the Company and the
Twin Falls Canal Company and
the Northside Canal Company
Limited.
*10(v)(i) 33-65720 10(m)(i) Guaranty Agreement, dated
February 10, 1992, between
the Company and New York Life
Insurance Company, as Note
Purchaser, relating to
$11,700,000 Guaranteed Notes
due 2017 of Milner Dam Inc.
*10(w) 33-65720 10(n) Agreement for the Purchase
and Sale of Power and Energy,
dated October 16, 1990,
between the Company and The
Montana Power Company.
*10(x) 1-3198 10(x) Agreement for design of
Form 10-Q substation dated October 4,
for 9/30/95 1995, between the Company and
Micron Technology, Inc.
12 Statement Re: Computation of
Ratio of Earnings to Fixed
Charges.
12(a) Statement Re: Computation of
Supplemental Ratio of
Earnings to Fixed Charges.
12(b) Statement Re: Computation of
Ratio of Earnings to Combined
Fixed Charges and Preferred
Dividend Requirements.
12(c) Statement Re: Computation of
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. No reports on Form 8-K were
filed for the three months ended September 30, 1996.
*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 5, 1996 By: /s/ J LaMont Keen
J LaMont Keen
Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
<TABLE>
<CAPTION>
Exhibit 12
Idaho Power Company
Consolidated Financial Information
Ratio of Earnings to Fixed Charges
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income $ 57,872 $ 59,990 $ 84,464 $ 74,930 $ 86,921 $ 97,227
Income taxes:
Income taxes (includes amounts charged
to other income and deductions) 24,321 24,601 38,057 35,307 49,497 52,947
Investment tax credit adjustment (3,177) (1,439) (1,583) (1,064) (1,086) (269)
Total income taxes 21,144 23,162 36,474 34,243 48,412 52,678
Income before income taxes 79,016 83,152 120,938 109,173 135,333 149,905
Fixed Charges:
Interest on long-term debt 54,370 53,408 53,706 51,173 51,146 51,860
Amortization of debt discount,
expense and premium - net 374 392 507 567 567 581
Interest on short-term bank loans 935 647 220 1,157 3,144 2,555
Other interest 3,297 1,011 2,023 1,537 1,598 2,084
Interest portion of rentals 884 683 1,077 794 925 1,131
Total fixed charges 59,860 56,141 57,533 55,228 57,381 58,211
Earnings - as defined $138,876 $139,293 $178,471 $164,401 $192,714 $208,116
Ratio of earnings to fixed charges 2.32X 2.48X 3.10X 2.98X 3.36X 3.58X
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12(a)
Idaho Power Company
Consolidated Financial Information
Supplemental Ratio of Earnings to Fixed Charges
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income $ 57,872 $ 59,990 $ 84,464 $ 74,930 $ 86,921 $ 97,227
Income taxes:
Income taxes (includes amounts charged
to other income and deductions) 24,321 24,601 38,057 35,307 49,497 52,947
Investment tax credit adjustment (3,177) (1,439) (1,583) (1,064) (1,086) (269)
Total income taxes 21,144 23,162 36,474 34,243 48,412 52,678
Income before income taxes 79,016 83,152 120,938 109,173 135,333 149,905
Fixed Charges:
Interest on long-term debt 54,370 53,408 53,706 51,173 51,146 51,860
Amortization of debt discount,
expense and premium - net 374 392 507 567 567 581
Interest on short-term bank loans 935 647 220 1,157 3,144 2,555
Other interest 3,297 1,011 2,023 1,537 1,598 2,084
Interest portion of rentals 884 683 1,077 794 925 1,131
Total fixed charges 59,860 56,141 57,533 55,228 57,381 58,211
Suppl increment to fixed charges* 1,599 2,487 2,631 2,622 2,611 2,603
Total supplemental fixed charges 61,459 58,628 60,164 57,850 59,992 60,814
Supplemental earnings - as defined $140,475 $141,780 $181,102 $167,023 $195,325 $210,719
Supplemental ratio of earnings to fixed
charges 2.29X 2.42X 3.01X 2.89X 3.26X 3.46X
<F1>
* 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>
<TABLE>
<CAPTION>
Exhibit 12(b)
Idaho Power Company
Consolidated Financial Information
Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income $ 57,872 $ 59,990 $ 84,464 $ 74,930 $ 86,921 $ 97,227
Income taxes:
Income taxes (includes amounts charged
to other income and deductions) 24,321 24,601 38,057 35,307 49,497 52,947
Investment tax credit adjustment (3,177) (1,439) (1,583) (1,064) (1,086) (269)
Total income taxes 21,144 23,162 36,474 34,243 48,412 52,678
Income before income taxes 79,016 83,152 120,938 109,173 135,333 149,905
Fixed Charges:
Interest on long-term debt 54,370 53,408 53,706 51,173 51,146 51,860
Amortization of debt discount,
expense and premium - net 374 392 507 567 567 581
Interest on short-term bank loans 935 647 220 1,157 3,144 2,555
Other interest 3,297 1,011 2,023 1,537 1,598 2,084
Interest portion of rentals 884 683 1,077 794 925 1,131
Total fixed charges 59,860 56,141 57,533 55,228 57,381 58,211
Preferred dividends requirements 6,663 7,611 8,547 10,682 12,392 12,004
Total fixed charges and
preferred dividends 66,523 63,752 66,080 65,910 69,773 70,215
Earnings - as defined $138,876 $139,293 $178,471 $164,401 $192,714 $208,116
Ratio of earnings to fixed charges and
preferred dividends 2.09X 2.18X 2.70X 2.49X 2.76X 2.96X
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12(c)
Idaho Power Company
Consolidated Financial Information
Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend
Requirements
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income $ 57,872 $ 59,990 $ 84,464 $ 74,930 $ 86,921 $ 97,227
Income taxes:
Income taxes (includes amounts charged
to other income and deductions) 24,321 24,601 38,057 35,307 49,497 52,947
Investment tax credit adjustment (3,177) (1,439) (1,583) (1,064) (1,086) (269)
Total income taxes 21,144 23,162 36,474 34,243 48,412 52,678
Income before income taxes 79,016 83,152 120,938 109,173 135,333 149,905
Fixed Charges:
Interest on long-term debt 54,370 53,408 53,706 51,173 51,146 51,860
Amortization of debt discount,
expense and premium - net 374 392 507 567 567 581
Interest on short-term bank loans 935 647 220 1,157 3,144 2,555
Other interest 3,297 1,011 2,023 1,537 1,598 2,084
Interest portion of rentals 884 683 1,077 794 925 1,131
Total fixed charges 59,860 56,141 57,533 55,228 57,381 58,211
Suppl increment to fixed charges* 1,599 2,487 2,631 2,622 2,611 2,603
Supplemental fixed charges 61,459 58,628 60,164 57,850 59,992 60,814
Preferred dividend requirements 6,663 7,611 8,547 10,682 12,392 12,004
Total supplemental fixed charges
and preferred dividends 68,122 66,239 68,711 68,532 72,384 72,818
Supplemental earnings - as defined $140,475 $141,780 $181,102 $167,023 $195,325 $210,719
Supplemental ratio of earnings to fixed
charges and preferred dividends 2.06X 2.14X 2.64X 2.44X 2.70X 2.89X
<F2>
* 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
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, 1996 and 1995, as indicated in our
report dated October 31, 1996; 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, 1996, is incorporated by reference in Registration
Statement Nos. 33-65720, 333-00139, and 33-51215 on Form S-3, and
Registration Statement No. 33-56071 on Form S-8.
We also are aware that the aforementioned report, pursuant to Rule
436(c) under the Securities Act of 1933, is not considered a part of
the aforementioned 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
Portland, Oregon
November 5, 1996
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from (balance
sheets, income statements and cash flow statements) and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,678,748
<OTHER-PROPERTY-AND-INVEST> 31,253
<TOTAL-CURRENT-ASSETS> 145,129
<TOTAL-DEFERRED-CHARGES> 415,253
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,270,383
<COMMON> 94,031
<CAPITAL-SURPLUS-PAID-IN> 358,676
<RETAINED-EARNINGS> 226,465
<TOTAL-COMMON-STOCKHOLDERS-EQ> 679,172
0
132,021
<LONG-TERM-DEBT-NET> 696,894
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 13,349
<COMMERCIAL-PAPER-OBLIGATIONS> 33,016
<LONG-TERM-DEBT-CURRENT-PORT> 68
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 715,863
<TOT-CAPITALIZATION-AND-LIAB> 2,270,383
<GROSS-OPERATING-REVENUE> 436,665
<INCOME-TAX-EXPENSE> 41,891
<OTHER-OPERATING-EXPENSES> 289,654
<TOTAL-OPERATING-EXPENSES> 331,545
<OPERATING-INCOME-LOSS> 105,120
<OTHER-INCOME-NET> 10,029
<INCOME-BEFORE-INTEREST-EXPEN> 115,149
<TOTAL-INTEREST-EXPENSE> 42,755
<NET-INCOME> 72,394
5,832
<EARNINGS-AVAILABLE-FOR-COMM> 66,562
<COMMON-STOCK-DIVIDENDS> 69,925
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 135,690
<EPS-PRIMARY> 1.77
<EPS-DILUTED> 1.77
</TABLE>
