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, 1997
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, 1997 is 37,612,351.
IDAHO POWER COMPANY
Index
Page No
Definitions 2
Part I. Financial Information:
Item 1.
Financial Statements
Consolidated Statements of Income 3-5
Consolidated Balance Sheets 6-7
Consolidated Statements of Cash Flows 8-9
Consolidated Statements of Capitalization 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 15-20
Part II. Other Information:
Item 6.
Exhibits and Reports on Form 8-K 21-25
Signatures 26
DEFINITIONS
AFDC Allowance For Funds Used During Construction
BPA Bonneville Power Administration
CSPP Cogeneration and Small Power Production
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
IndeGO Independent Grid Operator
IPUC Idaho Public Utilities Commission
kWh kilowatt-Hour
MAF Million Acre Feet
MMbtu Million British Thermal Units
MOU Memorandum of Understanding
MWH Megawatt-Hour
NYMEX New York Mercantile Exchange
OPUC Oregon Public Utilities Commission
PCA Power Cost Adjustment
SFAS Statement of Financial Accounting Standards
SWIP Southwest Intertie Project
FORWARD LOOKING INFORMATION
This Form 10-Q contains "forward-looking statements" intended to
qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements should be read with the cautionary statements and
important factors included in this Form 10-Q at Part I, Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations - Forward-Looking Information. Forward-
looking statements are all statements other than statements of
historical fact, including without limitation those that are
identified by the use of the words "anticipates," "estimates,"
"expects," "intends," "plans," "predicts," and similar expressions.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
IDAHO POWER COMPANY
Consolidated Statements of Income
Three Months Ended
September 30,
1997 1996
(Thousands of Dollars)
REVENUES $217,174 $149,652
EXPENSES:
Operation:
Purchased power 88,392 29,454
Fuel expense 22,756 21,887
Power cost adjustment (6,893) (11,244)
Other 33,652 32,063
Maintenance 11,958 12,158
Depreciation 18,099 17,652
Taxes other than income taxes 5,333 5,902
Total expenses 173,297 107,872
INCOME FROM OPERATIONS 43,877 41,780
OTHER INCOME:
Allowance for equity funds used during
construction 4 15
Other - Net 2,123 3,561
Total other income 2,127 3,576
INTEREST CHARGES:
Interest on long-term debt 13,147 13,413
Other interest 1,120 1,286
Total interest charges 14,267 14,699
Allowance for borrowed funds used during
construction (119) (91)
Net interest charges 14,148 14,608
INCOME BEFORE INCOME TAXES 31,856 30,748
INCOME TAXES 10,715 11,597
NET INCOME 21,141 19,151
Dividends on preferred stock 1,422 1,954
EARNINGS ON COMMON STOCK $19,719 $17,197
AVERAGE COMMON SHARES OUTSTANDING (000) 37,612 37,612
Earnings per share of common stock $ .52 $ .46
Dividends paid per share of common stock $ .465 $ .465
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
Consolidated Statements of Income
Nine Months Ended
September 30,
1997 1996
(Thousands of Dollars)
REVENUES $539,595 $436,665
EXPENSES:
Operation:
Purchased power 145,019 54,100
Fuel expense 48,030 37,818
Power cost adjustment (5,961) 1,069
Other 101,567 97,421
Maintenance 35,830 31,273
Depreciation 53,664 52,224
Taxes other than income taxes 16,721 15,749
Total expenses 394,870 289,654
INCOME FROM OPERATIONS 144,725 147,011
OTHER INCOME:
Allowance for equity funds used during
construction 2 12
Other - Net 7,768 10,017
Total other income 7,770 10,029
INTEREST CHARGES:
Interest on long-term debt 40,110 39,078
Other interest 5,001 3,932
Total interest charges 45,111 43,010
Allowance for borrowed funds used during
construction (379) (255)
Net interest charges 44,732 42,755
INCOME BEFORE INCOME TAXES 107,763 114,285
INCOME TAXES 36,202 41,891
NET INCOME 71,561 72,394
Dividends on preferred stock 3,481 5,832
EARNINGS ON COMMON STOCK $68,080 $66,562
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612
Earnings per share of common stock $ 1.81 $ 1.77
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
Twelve Months Ended
September 30,
1997 1996
(Thousands of Dollars)
REVENUES $681,376 $571,970
EXPENSES:
Operation:
Purchased power 159,957 67,266
Fuel expense 73,546 52,871
Power cost adjustment (13,889) 389
Other 136,814 130,621
Maintenance 47,288 38,881
Depreciation 71,145 69,496
Taxes other than income taxes 21,630 20,313
Total expenses 496,491 379,837
INCOME FROM OPERATIONS 184,885 192,133
OTHER INCOME:
Allowance for equity funds used during
construction 36 12
Other - Net 10,239 14,324
Total other income 10,275 14,336
INTEREST CHARGES:
Interest on long-term debt 53,197 51,860
Other interest 6,252 5,220
Total interest charges 59,449 57,080
Allowance for borrowed funds use during
construction (477) (516)
Net interest charges 58,972 56,564
INCOME BEFORE INCOME TAXES 136,188 149,905
INCOME TAXES 46,403 52,678
NET INCOME 89,785 97,227
Dividends on preferred stock 5,112 7,814
EARNINGS ON COMMON STOCK $84,673 $89,413
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612
Earnings per share of common stock $ 2.25 $ 2.38
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,
1997 1996
(Thousands of Dollars)
ELECTRIC PLANT:
In service (at original cost) $2,581,517 $2,537,565
Accumulated provision for depreciation (930,636) (886,885)
In service - Net 1,650,881 1,650,680
Construction work in progress 57,078 42,178
Held for future use 1,750 1,773
Electric plant - Net 1,709,709 1,694,631
INVESTMENTS AND OTHER PROPERTY 43,152 36,502
CURRENT ASSETS:
Cash and cash equivalents 10,255 7,928
Receivables:
Customer 80,832 34,962
Allowance for uncollectible accounts (1,397) (1,394)
Notes 5,312 5,104
Employee notes receivable 4,652 4,486
Other 5,722 8,489
Accrued unbilled revenue 25,451 27,709
Materials and supplies (at average cost) 29,376 24,639
Fuel stock (at average cost) 8,136 11,631
Prepayments 15,039 16,165
Regulatory assets associated with income taxes 3,435 4,397
Total current assets 186,813 144,116
DEFERRED DEBITS:
American Falls and Milner water rights 32,260 32,260
Company-owned life insurance 56,057 57,291
Regulatory assets associated with income taxes 199,087 196,696
Regulatory assets - other 89,053 89,507
Other 42,550 44,334
Total deferred debits 419,007 420,088
TOTAL $2,358,681 $2,295,337
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
Consolidated Balance Sheets
CAPITALIZATION & LIABILITIES
September 30, December 31,
1997 1996
(Thousands of Dollars)
CAPITALIZATION:
Common stock equity - $2.50 par value
(shares authorized 50,000,000;
shares outstanding - 37,612,351) $692,230 $694,574
Preferred stock 106,789 106,975
Long-term debt 706,332 738,550
Total capitalization 1,505,351 1,540,099
CURRENT LIABILITIES:
Long-term debt due within one year 30,072 71
Notes payable 58,016 54,016
Accounts payable 60,869 36,370
Taxes accrued 30,471 17,304
Interest accrued 15,205 15,886
Deferred income taxes 3,435 4,397
Other 35,260 12,439
Total current liabilities 233,328 140,483
DEFERRED CREDITS:
Regulatory liabilities associated with
deferred investment tax credits 70,083 71,283
Deferred income taxes 424,195 411,890
Regulatory liabilities associated with
income taxes 33,904 35,028
Regulatory liabilities - other 536 616
Other 91,284 95,938
Total deferred credits 620,002 614,755
COMMITMENTS AND CONTINGENT LIABILITIES (Note 2)
TOTAL $2,358,681 $2,295,337
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
Consolidated Statements Of Cash Flows
Nine Months Ended
September 30,
1997 1996
(Thousands of Dollars)
OPERATING ACTIVITIES:
Cash received from operations:
Retail revenues $371,947 $378,251
Wholesale revenues 119,232 45,093
Other revenues 21,411 17,417
Fuel paid (44,079) (36,961)
Purchased power paid (111,701) (52,775)
Other operation & maintenance paid (131,786) (132,708)
Interest paid (includes long and short-term
debt only) (42,304) (43,847)
Income taxes paid (27,429) (30,532)
Taxes other than income taxes paid (15,214) (11,351)
Other operating cash receipts and
payments-Net (9,539) 3,103
Net cash provided by operating
activities 130,538 135,690
FINANCING ACTIVITIES:
First Mortgage bonds issued - 30,000
PC bond fund requisitions/Other
long-term debt (2,414) 7,700
Short-term borrowings - Net 4,254 (20,000)
Long-term debt retirement (52) (20,052)
Preferred stock retirement (109) (81)
Dividends on preferred stock (4,087) (5,956)
Dividends on common stock (53,481) (52,443)
Other sources/(uses) 1,168 (2,650)
Net cash - financing activities (54,721) (63,482)
INVESTING ACTIVITIES:
Additions to utility plant (73,474) (58,591)
Conservation (962) (2,720)
Increase in investments (2,406) (14,525)
Other 3,352 2,091
Net cash - investing activities (73,490) (73,745)
Change in cash and cash equivalents 2,327 (1,537)
Cash and cash equivalents beginning of period 7,928 8,468
Cash and cash equivalents end of period $10,255 $6,931
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $71,561 $72,394
Adjustments to reconcile net income
to net cash:
Depreciation 53,664 52,224
Deferred income taxes 6,782 2,622
Changes in operating assets and liabilities:
Accounts receivable (43,474) (1,325)
Fuel inventory 3,495 (2,686)
Accounts payable 24,499 (13,356)
Taxes payable 13,167 12,752
Other - Net 844 13,065
Net cash provided by operating
activities $130,538 $135,690
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
Consolidated Statements Of Cash Flows
Twelve Months Ended
September 30,
1997 1996
(Thousands of Dollars)
OPERATING ACTIVITIES:
Cash received from operations:
Retail revenues $484,200 $488,700
Wholesale revenues 140,691 60,947
Other revenues 28,462 22,980
Fuel paid (66,916) (53,401)
Purchased power paid (129,227) (65,787)
Other operation & maintenance paid (176,132) (167,472)
Interest paid (includes long and
short-term debt only) (51,730) (56,787)
Income taxes paid (41,948) (39,119)
Taxes other than income taxes paid (27,317) (21,866)
Other operating cash receipts and
payments-Net 9,179 11,116
Net cash provided by operating
activities 169,262 179,311
FINANCING ACTIVITIES:
First mortgage bonds issued 27,000 30,000
PC bond fund requisitions/Other
long-term debt 114,720 7,700
Short-term borrowings - Net 25,254 (18,000)
Long-term debt retirement (116,370) (20,068)
Preferred stock retirement (26,557) (98)
Dividends on preferred stock (5,981) (7,968)
Dividends on common stock (70,961) (69,929)
Other sources/(uses) (326) (2,640)
Net cash - financing activities (53,221) (81,003)
INVESTING ACTIVITIES:
Additions to utility plant (108,528) (82,855)
Conservation (2,082) (3,818)
Increase in investments (7,014) (14,525)
Other 4,907 2,176
Net cash - investing activities (112,717) (99,022)
Change in cash and cash equivalents 3,324 (714)
Cash and cash equivalents beginning of
period 6,931 7,645
Cash and cash equivalents end of
period $10,255 $6,931
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $89,785 $97,227
Adjustments to reconcile net income
to net cash:
Depreciation 71,145 69,496
Deferred income taxes 11,361 7,656
Changes in operating assets
and liabilities:
Accounts receivable (41,283) (8,158)
Fuel inventory 7,613 (3,818)
Accounts payable 33,742 10
Taxes payable 2,310 8,255
Interest payable 3,306 2,339
Other - Net (8,717) 6,304
Net cash provided by operating
activities $169,262 $179,311
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
Consolidated Statements Of Capitalization
September 30,December 31,
1997 1996
(Thousands of Dollars)
COMMON STOCK EQUITY:
Common stock $94,031 $94,031
Premium on capital stock 361,759 362,297
Capital stock expense (3,840) (3,842)
Retained earnings 240,280 242,088
Total common stock equity 692,230 46.0% 694,574 45.1%
PREFERRED STOCK:
Cumulative, $100 par value:
4% preferred stock (authorized
215,000 shares; outstanding:
1997-167,885, 1996-169,753) 16,789 16,975
Serial preferred stock 7.68% Series,
(authorized and outstanding
150,000 shares) 15,000 15,000
Serial preferred stock, without par
value, authorized 3,000,000 shares:
7.07% Series, $100 stated value
(authorized and outstanding
250,000 shares) 25,000 25,000
Auction Rate Preferred Series A
$100,000 stated value (authorized
and outstanding 500 shares) 50,000 50,000
Total preferred stock 106,789 7.1 106,975 6.9
LONG-TERM DEBT:
First mortgage bonds:
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 30,000
6.85 % Series due 2002 27,000 27,000
6.40 % Series due 2003 80,000 80,000
8 % Series due 2004 50,000 50,000
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 527,000 527,000
Amount due within one year (30,000) -
Net first mortgage bonds 497,000 527,000
Pollution control revenue bonds:
7 1/4% Series due 2008 4,360 4,360
8.30 % Series 1984 due 2014 49,800 49,800
6.05 % Series 1996A due 2026 68,100 68,100
Variable Rate Series 1996B due 2026 24,200 24,200
Variable Rate Series 1996C due 2026 24,000 24,000
Total pollution control revenue
bonds 170,460 170,460
REA Notes 1,579 1,632
Amount due within one year (72) (71)
Net REA Notes 1,507 1,561
Subsidiary debt 6,766 9,000
American Falls bond guarantee 20,560 20,560
Milner Dam note guarantee 11,700 11,700
Unamortized premium/discount - Net (1,661) (1,731)
Total long-term debt 706,332 46.9 738,550 48.0
TOTAL CAPITALIZATION $1,505,351 100.0% $1,540,099 100.0%
The accompanying notes are an integral part of these statements.
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, 1997 and the consolidated
results of operation for the three months, nine months and
twelve months ended September 30, 1997 and 1996 and the
consolidated cash flows for the nine months and twelve
months ended September 30, 1997 and 1996. 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, 1996. 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 Company (IERCo); Idaho Utility Products
Company (IUPCo); IDACORP, Inc.; Ida-West Energy Company
(Ida-West); Stellar Dynamics, Inc. (Stellar); and Idaho
Power Resources Corporation (IPRC). All significant
intercompany transactions and balances have been eliminated
in consolidation. Investments in business entities in which
the Company and its subsidiaries do not have control, but
have the ability to exercise significant influence over
operating and financial policies, are accounted for using
the equity method.
Revenues
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.
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 $1.7 million at
September 30, 1997. 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 a PCA mechanism that provides for annual
adjustments to the rates charged to Idaho retail customers.
These adjustments are based on forecasts of net power supply
costs, and take effect annually on May 16. The difference
between the actual costs incurred and the forecasted costs are
deferred, with interest, and trued-up in the next annual rate
adjustment.
The 1997-8 forecast anticipates above-average hydroelectric
generating conditions. These positive conditions reduce the
Company's reliance on higher-cost thermal generation and
purchased power. This results in forecasted power supply
costs and rates being lower than the base amounts established
in past regulatory proceedings The Company's 1997 PCA
adjustment, combined with the revenue-sharing mechanism
described below, decreased rates 0.63% and will decrease
revenue during the current rate period by $2.6 million
compared to the 1996-7 rate period. Revenue from Idaho retail
customers will be $20.6 million less than what would be
recovered if the Company was charging the base rates during
this rate period.
So far in the current rate period, actual power cost expenses
have exceeded the forecast. The Company has recorded a
regulatory asset of, and decreased expenses by, $9.4 million
as of September 30, 1997. The variance that exists at the end
of the current rate period will be trued-up in the next annual
rate adjustment.
Under IPUC 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 at the same
time it makes its next PCA adjustment. In 1996, the
Company set aside approximately $4.9 million of revenue for
the benefit of its Idaho customers. Of this amount, $3.5
million is being used to reduce rates and $1.4 million was
applied against regulatory assets.
As a result of this order, the Company has provided for a
reserve for possible rate refund to customers for 1997. The
reserve has been established anticipating that the
Company's earnings will exceed the 11.75 percent threshold
for the year 1997.
4. FINANCING:
The Company currently has a $200,000,000 shelf registration
statement that can be used for both First Mortgage Bonds
(including Medium Term Notes) and Preferred Stock. In
1996, the Company issued $30,000,000 and $27,000,000
principal amount of Secured Medium Term Notes, due 2001 and
2002, respectively. These transactions have reduced the
remaining balance of the shelf registration to $143,000,000
at September 30, 1997.
5. INCOME TAXES:
The effective tax rate for the first nine months decreased
from 36.7 percent in 1996 to 33.6 percent in 1997. The
table below displays a reconciliation between the statutory
federal income tax rate of 35.0 percent and the effective
tax rates for the nine months ended September 30 (dollars
are in thousands):
1997 1996
Amount Rate Amount Rate
Computed income taxes based on
statutory federal income tax
rate $37,717 35.0% $40,000 35.0%
Changes in taxes resulting from:
Current state income taxes 3,945 3.7 5,195 4.5
Net depreciation 4,268 4.0 3,384 3.0
Investment tax credits restored (2,161) (2.0) (2,110) (1.8)
Repair allowance (2,346) (2.2) (2,424) (2.1)
Low income housing credit (3,444) (3.2) (1,125) (1.0)
Other (1,777) (1.7) (1,029) (0.9)
$36,202 33.6% $41,891 36.7%
6. NEW ACCOUNTING PRONOUNCEMENTS:
In February 1997, the FASB issued SFAS No. 128, Earnings
Per Share. This statement is effective for financial
statements for both interim and annual periods ending after
December 15, 1997. The
objective of the statement is to simplify the computations
of earnings per share. The Company does not expect the
adoption of this statement to have a significant effect on
its earnings per share of common stock.
In June 1997, the FASB issued SFAS No. 130, Reporting
Comprehensive Income and No. 131, Disclosures about
Segments of an Enterprise and Related Information. These
statements are effective for financial statements ending
after December 15, 1997. SFAS No. 130 establishes
standards for reporting and display of comprehensive income
and its components in a full set of general purpose
financial statements. SFAS No. 131 redefines standards for
the way that public business enterprises report information
about operating segments in annual and interim financial
statements. The Company is reviewing these two statements
to determine their effects on its reporting requirements.
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, 1997, and the related
consolidated statements of income for the three-, nine- and
twelve-month periods ended September 30, 1997 and 1996 and
consolidated statements of cash flows for the nine- and
twelve-month periods ended September 30, 1997 and 1996.
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, 1996, 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, 1997, 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, 1996 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 31, 1997
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS 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); Idaho
Power Resources Corporation (IPRC); and Stellar Dynamics, Inc.
(Stellar). This discussion uses the terms Idaho Power and the
Company interchangeably to refer to Idaho Power Company and its
subsidiaries.
FORWARD-LOOKING INFORMATION
Certain matters discussed in this report are "forward-looking
statements" intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform
Act of 1995. Such statements address future plans, objectives,
expectations, and events or conditions concerning various matters
such as capital expenditures, earnings, litigation, rate and
other regulatory matters, liquidity and capital resources, and
accounting matters. Actual results in each case could differ
materially from those currently anticipated in such statements,
by reason of factors including without limitations, electric
utility restructuring, including ongoing state and federal
activities; future economic conditions; legislation; regulation;
competition; and other circumstances affecting anticipated rates,
revenues and costs. Any forward-looking statement speaks only as
of the date on which such statement is made, and the Company
undertakes no obligation to update any forward-looking statement.
RESULTS OF OPERATIONS
Earnings Per Share and Book Value
Earnings per share of common stock were $0.52 for the quarter, an
increase of $0.06 (13.0 percent) from the same quarter last year.
Year-to-date earnings per share were $1.81, an increase of $0.04
(2.3 percent). Earnings for the twelve months ended September 30,
1997 were $2.25 per share, a decrease of $0.13 (5.5 percent) from
the twelve months ended September 30, 1996. The twelve-month
earnings represent a 12.2 percent earned return on September 30,
1997 common equity, compared to the 13.2 percent earned through
September 30, 1996. At September 30, 1997, the book value per
share of common stock was $18.40, compared to $18.06 for the same
date in 1996.
Electricity Sales
The table below displays a breakdown of changes in MWH sales
compared to the prior year:
Three Nine Twelve
Months Ended Months Ended Months Ended
(Thousands of MWH) September 30 September 30 September 30
Change % Chg Change % Chg Change % Chg
Residential 9 1.1 15 0.5 141 13.7
Commercial 25 3.5 85 4.1 124 4.5
Industrial (3) (0.3) 62 1.8 180 4.1
Irrigation (176) (18.4) (76) (4.8) (81) (4.8)
Street Lighting 1 12.6 2 10.3 2 9.3
Total General
Business (144) (4.0) 88 0.9 366 2.9
Off-system 3,427 544.9 5,726 181.4 6,150 159.9
Total 3,283 76.9 5,814 44.5 6,516 39.2
The increases in sales to residential and commercial customers
were due primarily to an increase in customers served.
Residential customers increased 2.8 percent for the quarter, and
3.0 percent for year-to-date and twelve months ended. Commercial
customers increased 3.9 percent for the quarter, and 4.2 percent
for year-to-date and the twelve months ended.
The decrease in sales to irrigation customers was due primarily
to increased precipitation, cooler temperatures, and crop
selection in 1997.
The increase in off-system sales was due primarily to increased
trading opportunities within the wholesale power markets and to
excellent hydroelectric generating conditions.
Revenues
The table below displays a breakdown of changes in revenue
compared to the prior year:
Three Nine Twelve
Months Ended Months Ended Months Ended
(Thousands of Dollars) September 30 September 30 September 30
Change % Chg Change % Chg Change % Chg
General Business ($3,021) (2.4) ($4,376) (1.2) ($4,484) (0.1)
Off-System 70,600 498.0 106,659 220.4 113,389 178.6
Other Revenue (57) 0.7 648 2.9 501 1.7
Total $67,522 45.1 $102,931 23.6 $109,406 19.1
The quarterly decrease in general business revenue was due
primarily to a $6.0 million decrease in revenue from irrigation
customers that resulted from the decrease in MWH sales noted
above. This decrease was offset by a $2.6 million decrease in
the provision for rate refund discussed below in "Regulatory
Settlement."
The year-to-date and twelve-month decreases in general business
revenue were due primarily to a decrease in revenue from
irrigation customers and decreased rates charged to residential,
commercial and industrial customers. Irrigation revenue
decreased $2.2 million year-to-date and $2.7 million for the
twelve months due to the decrease in MWH sales. The rate
decreases were a result of the annual rate adjustments discussed
below in "Power Cost Adjustment" and "Regulatory Settlement."
These decreases were partially offset by increased MWH sales to
residential, commercial, and industrial customers.
The increase in off-system revenue is due primarily to the
increased MWH sales noted above.
Expenses
Purchased power expenses increased $58.9 million (200.1 percent)
for the quarter, $90.9 million (168.1 percent) year-to-date and
$92.7 million (137.8 percent) for the twelve months ended. The
increase in purchased power was due primarily to increased
trading in the wholesale power markets. In addition, strong
hydroelectric generating conditions increased purchases from CSPP
projects $5.4 million for the quarter, $10.5 million year-to-date
and $10.6 million for the twelve months ended.
Fuel expenses increased $10.2 million (27.0 percent) year-to-date
and $20.7 million (39.1 percent) for the twelve months ended. The
increases were due primarily to increased operation of the Jim
Bridger, Valmy and Boardman coal-fired power plants when
wholesale market prices were favorable.
The PCA component of expenses increased $4.4 million for the
quarter, and decreased $7.0 million year-to-date and $14.3
million for the twelve months ended. The PCA mechanism reduces
expenses when actual power supply costs are above forecast and
increases them when power supply costs are below forecast. The
PCA is discussed below in "Power Cost Adjustment."
Other operation expenses increased $1.6 million (5.0 percent) for
the quarter, $4.1 million (4.3 percent) year-to-date and $6.2
million (4.7 percent) for the twelve months ended. The increase
for the quarter is due primarily to a $0.7 million increase in
wheeling related to increased off-system sales and $0.5 million
from development of the Company's marketing capabilities. Year-
to-date, marketing expenses increased $2.2 million and wheeling
expense increased $1.3 million. For the twelve months ended,
power generation expenses increased $2.8 million, marketing
increased $2.2 million, and wheeling expense increased $1.8
million.
Maintenance expenses increased $4.6 million (14.6 percent) year-
to-date and $8.4 million (21.6 percent) for the twelve months
ended. Maintenance on the Company's steam power generation
facilities increased $2.6 million year-to-date and $3.1 million
for the twelve months. This increase was due primarily to more
comprehensive overhauls being performed on the thermal plants.
Maintenance on transmission and distribution facilities increased
$0.9 million year-to-date and $4.1 million for the twelve months
due primarily to facilities damaged or destroyed by natural
causes.
Other
Other income decreased $1.4 million (40.4 percent) for the
quarter, due primarily to a $0.7 decrease in interest income from
temporary investments held in 1996 and to $0.5 million in losses
from gas trading operations.
Other income decreased $2.3 million (22.5 percent) year-to-date
and 4.1 million (28.3 percent) for the twelve months ended.
Decreased revenue from Bridger Coal Company reduced other income
$1.5 million year-to-date and $1.3 million for the twelve
months. Decreased revenue from a large construction project
completed in the third quarter of 1996 reduced other income by
$0.9 million year-to-date and $1.9 million for the twelve months.
Net interest charges increased $2.0 million year-to-date and $2.4
million for the twelve months ended. These increases were
primarily the result of the issuance of $57.0 million of medium
term notes by the Company in 1996 and of increased borrowings by
the Company's subsidiaries.
Income taxes decreased $5.7 million (13.6 percent) year-to-date
and $6.3 million (11.9 percent) for the twelve months ended. The
decreases were due primarily to decreased net income and to
increases in affordable housing tax credits, which increased $2.3
million year-to-date and $3.0 million for the twelve months
ended.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
For the nine months ended September 30, 1997, the Company
generated $130.5 million in net cash from operations. After
deducting for both common and preferred dividends, net cash
generation from operations provided approximately $73.0 million
for the Company's construction program and other capital
requirements.
Cash Expenditures
Idaho Power estimates that its cash construction program for 1997
will require approximately $89.0 million. This estimate is
subject to revision in light of changing economic, regulatory,
environmental, and conservation factors. During the first nine
months of 1997, the Company expended approximately $73.5 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. At September 30, 1997, the
Company's short-term borrowings totaled $58.0 million.
Financing Program
The Company currently has a $200,000,000 shelf registration
statement that can be used for both First Mortgage Bonds
(including Medium Term Notes) and Preferred Stock. In 1996, the
Company issued $30,000,000 and $27,000,000 principal amount of
Secured Medium Term Notes, due 2001 and 2002, respectively.
These transactions have reduced the remaining balance of the
shelf registration to $143,000,000 at September 30, 1997. Idaho
Power's objective is to maintain capitalization ratios of
approximately 45 percent common equity, 5 to 10 percent preferred
stock, and the balance in long-term debt. For the twelve-month
period ended September 30, 1997, the Company's consolidated pre-
tax interest coverage was 3.29 times.
OTHER MATTERS
Power Cost Adjustment
The Company has a PCA mechanism that provides for annual
adjustments to the rates charged to Idaho retail customers.
These adjustments are based on forecasts of net power supply
costs, and take effect annually on May 16. The difference
between the actual costs incurred and the forecasted costs are
deferred, with interest, and trued-up in the next annual rate
adjustment.
The 1997-8 forecast anticipates above-average hydroelectric
generating conditions. These positive conditions reduce the
Company's reliance on higher-cost thermal generation and
purchased power. This results in forecasted power supply costs
and rates being lower than the base amounts established in past
regulatory proceedings The Company's 1997 PCA adjustment,
combined with the revenue-sharing mechanism described below,
decreased rates 0.63% and will decrease revenue during the
current rate period by $2.6 million compared to the 1996-7 rate
period. Revenue from Idaho retail customers will be $20.6
million less than what would be recovered if the Company was
charging the base rates during this rate period.
So far in the current rate period, actual power cost expenses
have exceeded the forecast. The Company has recorded a regulatory
asset of, and decreased expenses by, $9.4 million as of September
30, 1997. The variance that exists at the end of the current
rate period will be trued-up in the next annual rate adjustment.
Regulatory Settlement
Under the terms of an IPUC Settlement in effect though 1999, when
the Company's actual earnings in the Idaho jurisdiction exceeds
an 11.75 percent return on year-end common equity, the Company
will refund 50 percent of the excess to Idaho's retail
ratepayers. In 1996, the Company set aside $4.9 million of
revenue for the benefit of its Idaho customers. With the
approval of the IPUC, $3.5 million of this amount has been used
to reduce customer revenues for the period May 16, 1997 to May
15, 1998. The remaining $1.4 million was retained from sharing
and applied against the regulatory asset balance of Idaho demand
side conservation expenditures. This amount represents the
carrying charge (interest) applied to the Idaho jurisdictional
demand side conservation expenditures during 1996.
As a result of this order, the Company has provided a reserve for
possible rate refund to customers for 1997. The reserve has been
established anticipating that the Company's earnings will exceed
the 11.75 percent threshold for the year 1997.
Nez Perce Lawsuit
In 1996, Idaho Power's Board of Directors and the Nez Perce Tribe
approved an Agreement between the Company and the Tribe which
would resolve a civil lawsuit filed against Idaho Power in
December of 1991, in the United States District Court for the
District of Idaho, regarding alleged damages to the Tribe's
treaty-reserved fishing rights. On March 21, 1997, the Court
entered a judgment that incorporated the terms of the Agreement.
In accordance with the judgment, the Company paid the Tribe $5
million plus agreed upon interest on March 28, 1997. Additional
terms of the judgment require that Idaho Power pay the Tribe
$1,625,000 each year for the next four years.
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.
Inflows into Brownlee result from a combination of precipitation,
storage, and ground water conditions. At August 1, 1997, the
Company observed that 9.8 MAF of water flowed into Brownlee
Reservoir during the April-July runoff period, compared to 8.3
MAF for 1996. This figure represents approximately 204 percent
of the 69-year median of 4.81 MAF.
Competition and Strategic Planning
Competition is increasing in the electric utility industry. The
Company is attempting to anticipate and integrate into its
operations legislative, regulatory, environmental, competitive,
or technological changes. With its low energy production costs,
Idaho Power is well positioned to enter a more competitive
environment and is taking action to preserve its low-cost
competitive advantage.
As required by the Idaho legislature, the IPUC has begun an
investigation into the unbundling of costs into its various
delivery and energy components. The Company believes cost
unbundling will allow our customers to compare energy prices and
will facilitate the establishment of more accurate price signals
for service components. In July 1997 the Company distributed its
initial cost unbundling study to the IPUC and other interested
parties. The Company, along with other Idaho utilities, will
provide revised cost unbundling information to the IPUC by
December 1, 1997.
The Company further believes that the future of the electric
utility industry will be characterized by the right of customers
to choose their own electric service provider. To remain
successful, Idaho Power must continue to provide value to its
shareholders in the face of this new competitive environment.
The Company's vision involves three strategies for creating this
value: selective and efficient use of capital; an enhanced
customer orientation; and innovative, efficient operations.
Because future prices for power will be determined more by market
forces and less by regulatory administration, the Company must be
very selective and efficient in the use and allocation of
capital. Idaho Power will invest in improving and expanding its
core business, in developing new opportunities beyond its current
service territory, and in continuing to develop non-regulated
opportunities consistent with the Company's core competencies.
Marketing Business Unit
The Company formed a Marketing Business Unit in January 1997.
This new business unit is responsible for all purchases and sales
of energy, market research, and planning and implementation of
marketing strategies.
It is the intent of the Company to be a competitive energy provider,
including both electricity and gas. The Company has opened a gas
trading office in Houston, Texas to serve the southern and eastern
United States gas markets; the Boise, Idaho office is serving the
Northwest and Canadian markets.
The Company began trading natural gas in the second quarter of 1997.
Trading volumes in the second quarter were minimal, but averaged
approximately 150,000 mmbtu's per day in the third quarter. Revenue
from gas sales in the third quarter was $29.7 million. The Company
expects volumes to continue to increase through 1997.
Electricity trading continued to increase in the third quarter, with
4.1 million MWH being sold off-system resulting in $84.8 million in
sales. While a portion of the rise in sales is due to excellent
hydroelectric conditions, the majority of the increase is due to an
increase in trading opportunities within the power markets.
The Company will manage the price risk of its energy trading
operations using risk management tools including financial products
such as swaps, caps, collars and futures instruments. The Company
began using NYMEX gas futures contracts in the third quarter and
anticipates an increase in natural gas futures and derivatives trading
for the purposes of hedging physical positions and taking advantage of
basis movements in natural gas prices. At September 30, 1997, the
Company's use of financial instruments did not have a material effect
on its financial statements.
Snohomish County Public Utility District Alliance
The Company and Snohomish County Public Utility District formed
an alliance to jointly develop and market new products and
services under the terms of a MOU signed May 29, 1997. The
alliance is intended to provide the Company the opportunity to
better serve its existing customers and to maintain its
independence. The Company anticipates forming additional
alliances when practical.
Year 2000 Costs
Idaho Power, like most other companies, will be required to
modify significant portions of its computer software so that it
functions properly in the year 2000. The Company is expending
significant resources to ensure that its computer systems are
able to deal with transactions that occur in 2000 and beyond.
Failure to adequately prepare for these transactions could have a
material impact on the Company's ability to conduct its business.
Maintenance and modification costs related to this issue will be
expensed as incurred, and new software will be capitalized and
amortized over its useful life.
Officer Changes
In July 1997, Idaho Power's Board of Directors named Jan B.
Packwood to succeed the retiring Larry R. Gunnoe as President and
Chief Operating Officer of the Company, effective September 1,
1997.
New Accounting Pronouncements
In February 1997, the FASB issued SFAS No. 128, Earnings Per
Share. This statement is effective for financial statements for
both interim and annual periods ending after December 15, 1997.
The objective of the statement is to simplify the computations of
earnings per share. The Company does not expect the adoption of
this statement to have a significant effect on its earnings per
share.
In June 1997, the FASB issued SFAS No. 130, Reporting
Comprehensive Income and No. 131, Disclosures about Segments of
an Enterprise and Related Information. These statements are
effective for financial statements ending after December 15,
1997. SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components in a full set
of general purpose financial statements. SFAS No. 131 redefines
standards for the way that public business enterprises report
information about operating segments in annual and interim
financial statements. The Company is reviewing these two
statements to determine their effects on its reporting
requirements.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit File Number As 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)(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 Coal
Form 10-Q Sales Agreement, dated January 1,
for 3/31/96 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 and for
for 1994 Directors-a non-qualified, deferred
compensation plan effective
November 30, 1994.
*10(n)(ii)1 1-3198 10(n)(ii) The Executive Annual Incentive Plan
Form 10-K for senior management employees
for 1994 effective January 1, 1995.
______________________
1 Compensatory Plan
*10(n)(iii)1 1-3198 10(n)(iii) The 1994 Restricted Stock Plan for
Form 10-K officers and key executives
for 1994 effective July 1, 1994.
*10(n)(iv)1 1-3198 10(n)(iv) The Revised Security Plans for
Form 10-K Senior Management Employees and for
1996 Directors-a non-qualified, deferred
compensation plan effective August
1, 1996.
*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.
*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.
______________________
1 Compensatory Plan
*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 substation
Form 10-Q dated October 4, 1995, between the
for 9/30/95 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, 1997.
*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 7, 1997 By: /s/ J LaMont Keen
J LaMont Keen
Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
<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>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,709,709
<OTHER-PROPERTY-AND-INVEST> 43,152
<TOTAL-CURRENT-ASSETS> 186,813
<TOTAL-DEFERRED-CHARGES> 419,007
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,358,681
<COMMON> 94,031
<CAPITAL-SURPLUS-PAID-IN> 357,919
<RETAINED-EARNINGS> 240,280
<TOTAL-COMMON-STOCKHOLDERS-EQ> 692,230
0
106,789
<LONG-TERM-DEBT-NET> 686,359
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 19,973
<COMMERCIAL-PAPER-OBLIGATIONS> 58,016
<LONG-TERM-DEBT-CURRENT-PORT> 30,072
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 765,242
<TOT-CAPITALIZATION-AND-LIAB> 2,358,681
<GROSS-OPERATING-REVENUE> 539,595
<INCOME-TAX-EXPENSE> 36,202
<OTHER-OPERATING-EXPENSES> 394,870
<TOTAL-OPERATING-EXPENSES> 431,072
<OPERATING-INCOME-LOSS> 108,523
<OTHER-INCOME-NET> 7,770
<INCOME-BEFORE-INTEREST-EXPEN> 116,293
<TOTAL-INTEREST-EXPENSE> 44,732
<NET-INCOME> 71,561
3,481
<EARNINGS-AVAILABLE-FOR-COMM> 68,080
<COMMON-STOCK-DIVIDENDS> 69,888
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 130,538
<EPS-PRIMARY> 1.81
<EPS-DILUTED> 1.81
</TABLE>
Exhibit 15
Nov 7, 1997
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, 1997 and
1996, as indicated in our report dated November 4, 1997; 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, 1997, is incorporated by reference in Registration
Statement Nos. 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
Ex-12
<TABLE>
<CAPTION>
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,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income..................... $59,990 $84,464 $74,930 $86,921 $90,618 $89,785
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 24,601 38,057 35,307 49,498 51,316 47,465
Investment tax credit adjustment............ (1,439) (1,583) (1,064) (1,086) 776 (1,062)
Total income taxes.................... 23,162 36,474 34,243 48,412 52,092 46,403
Income before income taxes...................... 83,152 120,938 109,173 135,333 142,710 136,188
Fixed Charges:
Interest on long-term debt................. 53,408 53,706 51,172 51,147 52,165 53,197
expense and premium - net.................. 392 507 567 567 594 643
Interest on short-term bank loans........... 647 220 1,157 3,144 2,269 2,657
Other interest.............................. 1,011 2,023 1,538 1,598 2,319 2,953
Interest portion of rentals................. 683 1,077 794 925 991 949
Total fixed charges................... 56,141 57,533 55,228 57,381 58,338 60,399
Earnings - as defined.......................... $139,293 $178,471 $164,401 $192,714 $201,048 $196,587
Ratio of earnings to fixed charges.............. 2.48x 3.10x 2.98x 3.36x 3.45x 3.25x
Exhibit 12
</TABLE>
<TABLE>
<CAPTION>
Ex-12a
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,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income..................... $59,990 $84,464 $74,930 $86,921 $90,618 $89,785
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 24,601 38,057 35,307 49,498 51,316 47,465
Investment tax credit adjustment............ (1,439) (1,583) (1,064) (1,086) 776 (1,062)
Total income taxes.................... 23,162 36,474 34,243 48,412 52,092 46,403
Income before income taxes...................... 83,152 120,938 109,173 135,333 142,710 136,188
Fixed Charges:
Interest on long-term debt................. 53,408 53,706 51,172 51,147 52,165 53,197
expense and premium - net.................. 392 507 567 567 594 643
Interest on short-term bank loans........... 647 220 1,157 3,144 2,269 2,657
Other interest.............................. 1,011 2,023 1,538 1,598 2,319 2,953
Interest portion of rentals................. 683 1,077 794 925 991 949
Total fixed charges................... 56,141 57,533 55,228 57,381 58,338 60,399
Supplemental increment to fixed charges* .. 2,487 2,631 2,622 2,611 2,600 2,603
Total supplemental fixed charges...... 58,628 60,164 57,850 59,992 60,938 63,002
Supplemental Earnings - as defined............. $141,780 $181,102 $167,023 $195,325 $203,648 $199,190
Supplemental Ratio of earnings to fixed
charges 2.42x 3.01x 2.89x 3.26x 3.34x 3.16x
<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.
Exhibit 12-A
</TABLE>
<TABLE>
<CAPTION>
Ex-12b
Idaho Power Company
Consolidated Financial Information
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income..................... $59,990 $84,464 $74,930 $86,921 $90,618 $89,785
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 24,601 38,057 35,307 49,498 51,316 47,465
Investment tax credit adjustment............ (1,439) (1,583) (1,064) (1,086) 776 (1,062)
Total income taxes.................... 23,162 36,474 34,243 48,412 52,092 46,403
Income before income taxes...................... 83,152 120,938 109,173 135,333 142,710 136,188
Fixed Charges:
Interest on long-term debt................. 53,408 53,706 51,172 51,147 52,165 53,197
expense and premium - net.................. 392 507 567 567 594 643
Interest on short-term bank loans........... 647 220 1,157 3,144 2,269 2,657
Other interest.............................. 1,011 2,023 1,538 1,598 2,319 2,953
Interest portion of rentals................. 683 1,077 794 925 991 949
Total fixed charges................... 56,141 57,533 55,228 57,381 58,338 60,399
Preferred dividends requirements............ 7,611 8,547 10,682 12,392 12,146 9,071
Total fixed charges and preferred
dividends............................ 63,752 66,080 65,910 69,773 70,484 69,470
Earnings - as defined.......................... $139,293 $178,471 $164,401 $192,714 $201,048 $196,587
Ratio of earnings to fixed charges and
preferred dividends.......................... 2.18x 2.70x 2.49x 2.76x 2.85x 2.83x
Exhibit 12-B
</TABLE>
<TABLE>
<CAPTION>
Ex-12c
Idaho Power Company
Consolidated Financial Information
Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) September 30,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income..................... $59,990 $84,464 $74,930 $86,921 $90,618 $89,785
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 24,601 38,057 35,307 49,498 51,316 47,465
Investment tax credit adjustment............ (1,439) (1,583) (1,064) (1,086) 776 (1,062)
Total income taxes.................... 23,162 36,474 34,243 48,412 52,092 46,403
Income before income taxes...................... 83,152 120,938 109,173 135,333 142,710 136,188
Fixed Charges:
Interest on long-term debt................. 53,408 53,706 51,172 51,147 52,165 53,197
expense and premium - net.................. 392 507 567 567 594 643
Interest on short-term bank loans........... 647 220 1,157 3,144 2,269 2,657
Other interest.............................. 1,011 2,023 1,538 1,598 2,319 2,953
Interest portion of rentals................. 683 1,077 794 925 991 949
Total fixed charges................... 56,141 57,533 55,228 57,381 58,338 60,399
Supplemental increment to fixed charges* .. 2,487 2,631 2,622 2,611 2,600 2,603
Supplemental fixed charges............ 58,628 60,164 57,850 59,992 60,938 63,002
Preferred dividends requirements............ 7,611 8,547 10,682 12,392 12,146 9,071
Total supplemental fixed charges
and preferred dividends.............. 66,239 68,711 68,532 72,384 73,084 72,073
Supplemental Earnings - as defined............. $141,780 $181,102 $167,023 $195,325 $203,648 $199,190
Supplemental Ratio of earnings to fixed
charges and preferred dividends.............. 2.14x 2.64x 2.44x 2.70x 2.79x 2.76x
<F2>
* Explanation of increment: Exhibit 12-C
interest on the guaranty of American Falls District bonds
and Milner Dam Inc. notes which are already included in operating expense.
</TABLE>
