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 June 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
July 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 15-18
PART II. OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 6. Exhibits and Reports on Form 8-K 20-23
SIGNATURES 24
DEFINITIONS
AFDC Allowance For Funds Used DuringConstruction
APC Applied Power Corporation
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
IPRC Idaho Power Resources Corporation
kWh Kilowatt-Hour
MAF Million Acre Feet
MOU Memorandum of Understanding
MWH Megawatt-Hour
OPUC Oregon Public Utilities Commission
PCA Power Cost Adjustment
PV Photovoltaic
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
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
Three Months Ended
June 30,
Increase
1997 1996 (Decrease)
(Thousands of Dollars)
REVENUES $166,975 $140,384 $26,591
EXPENSES
Operation:
Purchased power 37,067 16,431 20,636
Fuel expense 10,789 7,399 3,390
Power cost adjustment 2,175 5,462 (3,287)
Other 38,000 32,148 5,852
Maintenance 13,568 10,310 3,258
Depreciation 18,042 17,177 865
Taxes other than income taxes 5,556 4,716 840
Total expenses 125,197 93,643 31,554
INCOME FROM OPERATIONS 41,778 46,741 (4,963)
OTHER INCOME:
Allowance for equity funds used during
construction (2) (1) (1)
Other - Net 2,256 3,115 (859)
Total other income 2,254 3,114 (860)
INTEREST CHARGES:
Interest on long-term debt 13,158 12,703 455
Other interest 1,833 1,404 429
Total interest charges 14,991 14,107 884
Allowance for borrowed funds used
during construction (127) (113) (14)
Net interest charges 14,864 13,994 870
INCOME BEFORE INCOME TAXES 29,168 35,861 (6,693)
INCOME TAXES 9,126 12,828 (3,702)
NET INCOME 20,042 23,033 (2,991)
Dividends on preferred stock 665 1,927 (1,262)
EARNINGS ON COMMON STOCK $19,377 $21,106 $ (1,729)
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612 N/A
Earnings per share of common stock $ .52 $ .56 $ (.04)
Dividends paid per share of common stock $ .465 $ .465 $ N/A
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
Six Months Ended
June 30, Increase
1997 1996 (Decrease)
(Thousands of Dollars)
REVENUES $322,422 $287,013 $35,409
EXPENSES:
Operation:
Purchased power 56,627 24,646 31,981
Fuel expense 25,273 15,931 9,342
Power cost adjustment 932 12,314 (11,382)
Other 67,917 65,358 2,559
Maintenance 23,872 19,115 4,757
Depreciation 35,564 34,572 992
Taxes other than income taxes 11,388 9,846 1,542
Total expenses 221,573 181,782 39,791
INCOME FROM OPERATIONS 100,849 105,231 (4,382)
OTHER INCOME:
Allowance for equity funds used during
construction (2) (3) 1
Other - Net 5,645 6,457 (812)
Total other income 5,643 6,454 (811)
INTEREST CHARGES:
Interest on long-term debt 26,963 25,666 1,297
Other interest 3,881 2,646 1,235
Total interest charges 30,844 28,312 2,532
Allowance for borrowed funds used
during construction (259) (164) (95)
Net interest charges 30,585 28,148 2,437
INCOME BEFORE INCOME TAXES 75,907 83,537 (7,630)
INCOME TAXES 25,487 30,294 (4,807)
NET INCOME 50,420 53,243 (2,823)
Dividends on preferred stock 2,059 3,878 (1,819)
EARNINGS ON COMMON STOCK $48,361 $49,365 $ (1,004)
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612 N/A
Earnings per share of common stock $ 1.29 $ 1.31 $ (.02)
Dividends paid per share of common stock $ .93 $ .93 $ N/A
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE TWELVE MONTHS ENDED JUNE 30, 1997 AND 1996
Twelve Months Ended
June 30, Increase
1997 1996 (Decrease)
(Thousands of Dollars)
REVENUES $613,854 $571,044 $42,810
EXPENSES:
Operation:
Purchased power 101,019 61,840 39,179
Fuel expense 72,676 47,511 25,165
Power cost adjustment (18,241) 12,595 (30,836)
Other 135,227 127,782 7,445
Maintenance 47,487 36,068 11,419
Depreciation 70,698 68,877 1,821
Taxes other than income taxes 22,200 20,381 1,819
Total expenses 431,066 375,054 56,012
INCOME FROM OPERATIONS 182,788 195,990 (13,202)
OTHER INCOME:
Allowance for equity funds used during
construction 48 (26) 74
Other - Net 11,676 15,511 (3,835)
Total other income 11,724 15,485 (3,761)
INTEREST CHARGES:
Interest on long-term debt 53,463 51,234 2,229
Other interest 6,417 5,344 1,073
Total interest charges 59,880 56,578 3,302
Allowance for borrowed funds used
during construction (448) (474) 26
Net interest charges 59,432 56,104 3,328
INCOME BEFORE INCOME TAXES 135,080 155,371 (20,291)
INCOME TAXES 47,285 53,522 (6,237)
NET INCOME 87,795 101,849 (14,054)
Dividends on preferred stock 5,644 7,837 (2,193)
EARNINGS ON COMMON STOCK $82,151 $94,012 $(11,861)
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612 N/A
Earnings per share of common stock $ 2.18 $ 2.50 $ (.32)
Dividends paid per share of common stock $ 1.86 $ 1.86 $ N/A
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1997 1996
(Thousands of Dollars)
ELECTRIC PLANT:
In service (at original cost) $2,569,684 $2,537,565
Accumulated provision for depreciation (916,114) (886,885)
In service - Net 1,653,570 1,650,680
Construction work in progress 50,338 42,178
Held for future use 1,773 1,773
Electric plant - Net 1,705,681 1,694,631
INVESTMENTS AND OTHER PROPERTY 39,926 36,502
CURRENT ASSETS:
Cash and cash equivalents 7,773 7,928
Receivables:
Customer 57,447 34,962
Allowance for uncollectible accounts (1,397) (1,394)
Notes 5,232 5,104
Employee notes receivable 4,659 4,486
Other 9,550 8,489
Accrued unbilled revenues 32,013 27,709
Materials and supplies (at average cost) 29,208 24,639
Fuel stock (at average cost) 13,223 11,631
Prepayments 14,493 16,165
Regulatory assets associated with income taxes 3,477 4,397
Total current assets 175,678 144,116
DEFERRED DEBITS:
American Falls and Milner water rights 32,260 32,260
Company-owned life insurance 55,059 57,291
Regulatory assets associated with income taxes 199,972 196,696
Regulatory assets - other 82,261 89,507
Other 43,582 44,334
Total deferred debits 413,134 420,088
TOTAL $2,334,419 $2,295,337
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED BALANCE SHEETS
CAPITALIZATION & LIABILITIES
June 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) $707,423 694,574
Preferred stock 106,870 106,975
Long-term debt 738,560 738,550
Total capitalization 1,552,853 1,540,099
CURRENT LIABILITIES:
Long-term debt due within one year 71 71
Notes payable 61,516 54,016
Accounts payable 50,233 36,370
Taxes accrued 23,304 17,304
Interest accrued 16,914 15,886
Deferred income taxes 3,477 4,397
Other 17,086 12,439
Total current liabilities 172,601 140,483
DEFERRED CREDITS:
Regulatory liabilities associated with
deferred investment tax credits 70,484 71,283
Deferred income taxes 416,753 411,890
Regulatory liabilities associated with income taxes 34,337 35,028
Regulatory liabilities - other 563 616
Other 86,828 95,938
Total deferred credits 608,965 614,755
COMMITMENTS AND CONTINGENT LIABILITIES (Note 2)
TOTAL $2,334,419 $2,295,337
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX
MONTHS ENDED JUNE 30, 1997 AND 1996
Six Months Ended
June 30,
1997 1996
OPERATING ACTIVITIES: (Thousands of Dollars)
Cash received from operations:
Retail revenues $236,933 $239,284
Wholesale revenues 57,461 33,158
Other revenues 14,215 11,562
Fuel paid (28,146) (22,054)
Purchased power paid (36,292) (24,387)
Other operation & maintenance paid (87,011) (84,749)
Interest paid (includes long and short-term
debt only) (26,435) (27,173)
Income taxes paid (23,470) (22,961)
Taxes other than income taxes paid (12,330) (9,279)
Other operating cash receipts and payments-Net (14,392) (20)
Net cash provided by operating activities 80,533 93,381
FINANCING ACTIVITIES:
PC bond fund requisitions/Other long-term debt (164) 9,000
Short-term borrowings - Net 8,074 12,100
Long-term debt retirement (35) (20,034)
Preferred stock retirement (65) (39)
Dividends on preferred stock (2,620) (3,984)
Dividends on common stock (36,010) (34,962)
Other sources/(uses) 1,083 (1,289)
Net cash - financing activities (29,737) (39,208)
INVESTING ACTIVITIES:
Additions to utility plant (49,593) (40,062)
Conservation (844) (200)
Increase in investments (1,533) (14,525)
Other 1,019 (363)
Net cash - investing activities (50,951) (55,150)
Change in cash and cash equivalents (155) (977)
Cash and cash equivalents beginning of period 7,928 8,468
Cash and cash equivalents end of period $7,773 $7,491
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $50,420 $53,243
Adjustments to reconcile net income to net cash:
Depreciation 35,564 34,572
Deferred income taxes 895 (2,486)
Investment tax credit-Net (799) (712)
Allowance for funds used during construction (258) (161)
Postretirement benefits funding (excl pensions) 70 288
Changes in operating assets and liabilities:
Accounts receivable (28,148) (3,009)
Fuel inventory (1,592) (6,123)
Accounts payable 13,863 259
Taxes payable 6,000 11,113
Interest payable 1,028 1,121
Other - Net 3,490 5,276
Net cash provided by operating activities $80,533 $93,381
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED JUNE 30, 1997 AND 1996
Twelve Months Ended June 30,
1997 1996
OPERATING ACTIVITIES: (Thousands of Dollars)
Cash received from operations:
Retail revenues $488,153 $479,205
Wholesale revenues 90,854 58,852
Other revenues 27,122 23,615
Fuel paid (65,890) (49,851)
Purchased power paid (82,207) (58,008)
Other operation & maintenance paid (179,317) (161,144)
Interest paid (includes long and short-term debt only) (52,536) (54,141)
Income taxes paid (45,559) (39,870)
Taxes other than income taxes paid (26,505) (21,977)
Other operating cash receipts and payments-Net 7,451 8,904
Net cash provided by operating activities 161,566 185,585
FINANCING ACTIVITIES:
First mortgage bonds issued 57,000 -
PC bond fund requisitions/Other long-term debt 115,670 9,000
Short-term borrowings - Net (3,026) 3,000
Long-term debt retirement (116,370) (20,520)
Preferred stock retirement (26,555) (124)
Dividends on preferred stock (6,487) (8,041)
Dividends on common stock (70,971) (69,937)
Other sources/(uses) (1,772) (1,260)
Net cash - financing activities (52,511) (87,882)
INVESTING ACTIVITIES:
Additions to utility plant (103,177) (82,873)
Conservation (4,483) (2,416)
Increase in investments 2,635 (14,525)
Other (3,748) 1,525
Net cash - investing activities (108,773) (98,289)
Change in cash and cash equivalents 282 (586)
Cash and cash equivalents beginning of period 7,491 8,077
Cash and cash equivalents end of period $7,773 $7,491
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $87,795 $101,849
Adjustments to reconcile net income to net cash:
Depreciation 70,698 68,877
Deferred income taxes 10,582 6,635
Investment tax credit-Net 689 (1,713)
Allowance for funds used during construction (496) (448)
Postretirement benefits funding (excl pensions) 1,122 (2,074)
Changes in operating assets and liabilities:
Accounts receivable (27,677) (9,372)
Fuel inventory (2,940) (2,340)
Accounts payable 22,275 3,832
Taxes payable (2,056) 7,176
Interest payable 2,279 2,388
Other - Net (704) 10,775
Net cash provided by operating activities $161,567 $185,585
The accompanying notes are an integral part of these statements
IDAHO POWER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
June 30, December 31,
1997 1996
(Thousands of Dollars)
COMMON STOCK EQUITY:
Common stock $94,031 $94,031
Premium on capital stock 361,729 362,297
Capital stock expense (3,842) (3,842)
Retained earnings 255,505 242,088
Total common stock equity 707,423 45.6% 694,574 45.1%
PREFERRED STOCK:
Cumulative, ($100 par value):
4% preferred stock (authorized 215,000
shares; outstanding :1997-168,700,
1996-169,753) 16,870 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 (authorized and outstanding
250,000 shares) 25,000 25,000
Auction Rate Preferred Series A
(authorized and outstanding 500 shares) 50,000 50,000
Total preferred stock 106,870 6.9 106,975 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 - -
Net first mortgage bonds 527,000 527,000
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 1,597 1,632
Amount due within one year (71) (71)
Net REA Notes 1,526 1,561
Subsidiary debt 9,000 9,000
American Falls bond guarantee 20,560 20,560
Milner Dam note guarantee 11,700 11,700
Unamortized premium/discount - Net (1,686) (1,731)
Total long-term debt 738,560 47.5 738,550 48.0
TOTAL CAPITALIZATION $1,552,853 100.0% $1,540,099 100.0%
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 June 30, 1997 and the consolidated results of operation
for the three months, six months and twelve months ended June
30, 1997 and 1996 and the consolidated cash flows for the
six months and twelve months ended June 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 Co (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
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.
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 $1.5 million at June 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 in place, in its Idaho jurisdiction, a PCA mechanism
which provides for 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. Better water conditions
and milder weather have resulted in the Company currently recording
a PCA credit of $0.6 million at June 30, 1997. This credit reflects
power supply costs below those projected in the 1997 PCA forecast.
The current deferred balance is adjusted monthly as actual
conditions are compared to the forecasted net power supply costs.
The Company filed its 1997 PCA application on April 15,
1997, requesting a change in the Idaho jurisdiction PCA rate.
The combined effect of this year's PCA change with the revenue sharing
mechanism described below will decrease current Company revenues $2.6
million and decrease rates an average of 0.63 percent. The proposed
revenues from Idaho retail customers are $20.2 million below what
would be recovered from the base rates established in past regulatory
proceedings.
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 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
which 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 June 30, 1997.
5. INCOME TAXES:
The effective tax rate for the first six months decreased from
36.3 percent in 1996 to 33.6 percent in 1997. A reconciliation
between the statutory federal income tax rate and the effective
rate for the six months ended June 30:
1997 1996
Amount Rate Amount Rate
Computed income taxes based on
statutory federalincome tax
rate $26,567 35.0 % $29,238 35.0 %
Changes in taxes resulting from:
Current state income taxes. 3,179 4.2 3,760 4.5
Net depreciation 2,937 3.9 2,015 2.4
Investment tax credits restored (1,439) (1.9) (1,409) (1.7)
Repair allowance (1,564) (2.1) (1,720) (2.0)
Low income housing credit (2,242) (3.0) - -
Other (1,952) (2.5) (1,590) (1.9)
$25,487 33.6 % $30,294 36.3 %
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 establishes standards for the way that public business
enterprises report information about reporting 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 June 30, 1997, and the related consolidated
statements of income for the three-, six- and twelve-month periods
ended June 30, 1997 and 1996 and consolidated statements of cash
flows for the six- and twelve month periods ended June 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
July 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, a decrease
of $0.04 (7.1 percent) from the same quarter last year. Year-to-date earnings
per share were $1.29, a decrease of $0.02 (1.5 percent). Earnings for the
twelve months ended June 30, 1997 were $2.18 per share, a decrease of $0.32
(12.8 percent) from the twelve months ended June 30, 1996. The twelve-month
earnings represent a 11.6 percent earned return on June 30, 1997 common
equity, compared to the 13.5 percent earned through June 30, 1996. At June
30, 1997, the book value per share of common stock was $18.81, compared to
$18.53 for the same date in 1996.
REVENUES
The following table displays a breakdown of the changes in revenue:
Three Months Six Months Twelve Months
Ended Ended Ended
(Thousands of Dollars) June 30 June 30 June 30
CHANGE % CHG CHANGE % CHG CHANGE % CHG
General Business $ 4,857 4.1% ($ 1,354) -0.6% ($ 4,225) -0.9%
Off-System 21,712 158.2 36,059 105.4 45,821 75.8%
Other Revenue 22 0.3% 704 4.8% 1,214 4.3%
Total $26,591 18.9% $35,409 12.3% $42,810 7.5%
The increase in off-system revenue is due primarily to increased trading in
the wholesale power markets due to favorable sales margins. Total resale
MWH increased 96.4 percent for the quarter, 90.9 percent year-to-date and
79.5 percent for the twelve months ended. The volume and price of these
sales depend on the Company's firm energy demand, hydroelectric generating
conditions, and market conditions throughout the west.
EXPENSES
Purchased power expenses increased $20.6 million (125.6 percent) for
the quarter, $32.0 million (129.8 percent) year-to-date and $39.2 million
(63.4 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 purchases from CSPP projects $1.8 million
for the quarter and $5.1 million for both year-to-date and the twelve months
ended.
Fuel expenses increased $3.4 million (45.8 percent) for the quarter,
$9.3 million (58.6 percent) year-to-date and $25.2 million (53.0 percent)
for the twelve months ended. The increase is primarily the result of increased
operation of the Jim Bridger and Valmy coal-fired power plants when wholesale
market prices were favorable.
The PCA component of expenses decreased $3.3 million for the quarter, $11.4
million year-to-date and $30.8 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 in more detail under the heading "Other Matters."
Other operation expenses increased $5.9 million (18.2 percent) for the
quarter, $2.6 million (3.9 percent) year-to-date and $7.4 million (5.8
percent) for the twelve months ended. The increase for the quarter is due
primarily to increased administrative expenses ($2.3 million) related to the
development of natural gas marketing capabilities and increased transmission
and distribution expenses ($1.7 million) related to increased MWH sales.
The year-to-date increase results from increased administration expenses
($0.9 million), transmission and distribution expenses ($0.8 million) and
generation expenses ($0.7 million). The change for the twelve-month period
is due primarily to increased generation, transmission and distribution
expenses ($8.2 million) related to increased MWH sales.
Maintenance expenses increased $3.3 million (31.6 percent) for the quarter,
$4.8 million (24.9 percent) year-to-date and $11.4 million (31.7 percent) for
the twelve months ended. During 1997, maintenance on the Company's steam
power generation facilities was increased, while the Company maximized its
use of hydroelectric facilities. For the twelve month period there was also
increased maintenance on both transmission and distribution facilities due
to facilities damaged or destroyed by natural causes. In addition,
maintenance on transmission and distribution facilities increased.
OTHER
Other income decreased $3.8 million for the twelve month period. The decrease
was due primarily to decreased sales and profits from Bridger Coal Company.
Total interest costs increased $0.8 million for the quarter, $2.5 million year-
to-date and $3.3 million for the twelve months ended. These increases are
partly the result of increased borrowings by the Company's subsidiaries and
the issuance of $57.0 million of medium term notes by the Company in 1996.
Income taxes decreased by $3.7 million (28.9 percent) for the quarter, $4.8
million (15.9 percent) year-to-date and $6.2 million (11.7 percent) for the
twelve months ended. The decreases are due to decreases in Net Income Before
Taxes and increases in affordable housing tax credits, which increased $0.9
million for the quarter, $1.6 million year-to-date and $2.7 million for the
twelve months ended. For the twelve months ended, these factors were
partially offset by adjustments made to prior period accruals.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW
For the six months ended June 30, 1997, the Company generated $80.5 million
in net cash from operations. After deducting for both common and preferred
dividends, net cash generation from operations provided approximately $41.9
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 six months of 1997, the Company expended approximately $49.6 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. At June 30, 1997, the Company's short-term
borrowings totaled $61.5 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. 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 June 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 June 30, 1997, the Company's consolidated pre-tax
interest coverage was 3.26 times.
OTHER MATTERS
POWER COST ADJUSTMENT
Since 1993, the 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 1997 through May 1998,
the Company implemented rate adjustments reducing Idaho jurisdictional
customers' PCA revenues by $2.6 million by decreasing rates at an average
of 0.63 percent, including the true-up for the PCA period May 1996 through
May 1997 and a $3.5 million refund per IPUC Order No. 26216 (see Regulatory
Settlement section below). The revenues for Idaho retail customers are $20.2
million below what would be recovered from the base rates established in
past regulatory proceedings. The reduction reflects anticipated below
normal power supply costs in the coming year due to above average
hydroelectric generating conditions. Better water conditions and milder
weather have resulted in the Company currently recording a PCA credit
of $0.6 million at June 30, 1997. This credit reflects power supply costs
below those projected in the 1997 PCA forecast. The current deferred balance
is adjusted monthly as actual conditions are compared to the forecasted net
power supply costs.
REGULATORY SETTLEMENT
Under the terms of an IPUC Settlement in effect though 1999, when the
Company's actual earnings on year-end common equity exceed 11.75 percent, the
Company will refund 50 percent of the excess to Idaho's retail rate payers.
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 has been 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 which 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 The Tribe moved for the dismissal of their legal action
against the Company and such motion was granted on ______. Additional terms
of the agreement 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. Precipitation in the Company's
service territory was near normal levels for the first six months of 1997.
At July 1, 1997, reservoir storage above Brownlee was 98 percent of capacity
and 114 percent of average, compared to last year's 97 percent of capacity
and 114 percent of average for the same period. The U.S. Army Corps of
Engineers coordinates flood control activities of the Company's water
resources based upon streamflow forecasts. This year, due to high mountain
snowpacks, the Company was required to draft water from Brownlee Reservoir to
make space for holding anticipated flood flows. The reservoir was drafted
empty in early May and was refilled by the end of June. Inflows into
Brownlee result from a combination of precipitation, storage, and ground
water conditions. At July 1, 1997, the Company estimated that 9.8 MAF of
water will flow 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 that the unbundling of costs will create a real means for our
customers to compare energy prices and that cost unbundling will facilitate
the establishment of more accurate price signals for service components. In
July, 1977 the Company distributed its initial cost unbundling study to the
IPUC and other interested parties.
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
To accommodate its customers and allow it to compete in the rapidly evolving
competitive market, 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. The Marketing Business Unit has been charged with developing
an organization with the capability to service our customers' total energy
needs.
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 service the southern and eastern United States gas markets,
and its Boise Office is servicing the Northwest. The Company began trading
natural gas in the second quarter of 1997. Natural gas volumes for the second
quarter are minimal, but the Company plans to be moving volumes of up to
300,000 mmbtu's per day by year-end. The Company will manage the price risk
of its energy trading operations using the most cost effective and efficient
risk management tools available including financial products such as swaps,
caps, collars and futures instruments.
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
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 signigicant
portions of its computer software so that it functions properly in the year
2000. The Company is expending significant resources to assure 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. Packwood currently
serves as an executive vice president and has been employed by the Company
for 27 years. Gunnoe, employed by the Company since 1968, has been
President and Chief Operating Officer since 1990.
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 establishes standards
for the way that public business enterprises report information about
reporting 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Regular annual meeting of the Company's stockholders, held May 7,
1997 in Boise, Idaho.
(b) Directors elected at the meeting for a three-year term:
Larry R. Gunnoe
Peter T. Johnson
Joseph W. Marshall
Peter S. O'Neill
Continuing Directors:
Roger L. Breezley
Evelyn Loveless
John B.Carley
Jon H. Miller
Jack K. Lemley
Phil Soulen
Gene C. Rose
Robert T. Bolinder
(c)(1) a) To elect four Director Nominees; and
b) To ratify the selection of Deloitte & Touche LLP (D&T) as
independent auditors for the fiscal year ending
December 31, 1997.
c) To transact such other business that may properly come
before the meeting.
(2) Director Nominees
Class of Stock For Withhold Total Voted
Common 31,855,266 585,206 32,440,472
4% Preferred 2,438,660 98,380 2,537,040
7.68% Preferred 140,375 443 140,818
Total 34,434,301 684,029 35,118,330
Proposal to Ratify Selection of D&T as Independent Auditors
Class of Stock For Against Abstain Total Voted
Common 31,802,262 258,072 380,138 32,440,472
4% Preferred 2,443,740 27,200 66,100 2,537,040
7.68% Preferred 139,223 200 1,395 140,818
Total 34,385,225 285,472 447,633 35,118,330
(3) Election of Directors
Name Votes For Votes Withheld
Larry R. Gunnoe 34,437,315 681,015
Peter T. Johnson 34,572,565 545,765
Joseph W. Marshall 34,476,434 641,896
Peter S. O'Neill 34,489,541 628,789
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 Sales
Form 10-Q Agreement, dated January 1, 1996,
for 3/31/96 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,
i) 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 Senior
Form 10-K 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) The Executive Annual Incentive Plan
Form 10-K for senior management employees
for 1994 effective January 1, 1995.
*10(n)(iii)1 1-3198 10(n) The 1994 Restricted Stock Plan for
Form 10-K officers and key executives effective
for 1994 July 1, 1994.
*10(n)(iv)1 1-3198 10(n)(iv) The Revised Security Plans for Senior
Form 10-K Management Employees and for
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.
*1 Compensatory Plan
*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.
*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 six months ended June 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 August 4, 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>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,705,681
<OTHER-PROPERTY-AND-INVEST> 39,926
<TOTAL-CURRENT-ASSETS> 175,678
<TOTAL-DEFERRED-CHARGES> 413,134
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,334,419
<COMMON> 94,031
<CAPITAL-SURPLUS-PAID-IN> 357,887
<RETAINED-EARNINGS> 255,505
<TOTAL-COMMON-STOCKHOLDERS-EQ> 707,423
0
106,870
<LONG-TERM-DEBT-NET> 716,263
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 22,297
<COMMERCIAL-PAPER-OBLIGATIONS> 61,516
<LONG-TERM-DEBT-CURRENT-PORT> 71
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 719,979
<TOT-CAPITALIZATION-AND-LIAB> 2,334,419
<GROSS-OPERATING-REVENUE> 166,975
<INCOME-TAX-EXPENSE> 9,126
<OTHER-OPERATING-EXPENSES> 125,197
<TOTAL-OPERATING-EXPENSES> 134,323
<OPERATING-INCOME-LOSS> 32,652
<OTHER-INCOME-NET> 2,254
<INCOME-BEFORE-INTEREST-EXPEN> 34,906
<TOTAL-INTEREST-EXPENSE> 14,864
<NET-INCOME> 20,042
665
<EARNINGS-AVAILABLE-FOR-COMM> 19,377
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 80,533
<EPS-PRIMARY> 0.52
<EPS-DILUTED> 0.52
</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) June 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 $87,795
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 24,601 38,057 35,307 49,498 51,316 46,596
Investment tax credit adjustment............ (1,439) (1,583) (1,064) (1,086) 776 689
Total income taxes.................... 23,162 36,474 34,243 48,412 52,092 47,285
Income before income taxes...................... 83,152 120,938 109,173 135,333 142,710 135,080
Fixed Charges:
Interest on long-term debt................. 53,408 53,706 51,172 51,147 52,165 53,463
expense and premium - net.................. 392 507 567 567 594 631
Interest on short-term bank loans........... 647 220 1,157 3,144 2,269 2,338
Other interest.............................. 1,011 2,023 1,538 1,598 2,319 3,448
Interest portion of rentals................. 683 1,077 794 925 991 937
Total fixed charges................... 56,141 57,533 55,228 57,381 58,338 60,817
Supplemental increment to fixed charges* .. 2,487 2,631 2,622 2,611 2,600 2,606
Total supplemental fixed charges...... 58,628 60,164 57,850 59,992 60,938 63,423
Supplemental Earnings - as defined............. $141,780 $181,102 $167,023 $195,325 $203,648 $198,503
Supplemental Ratio of earnings to fixed
charges 2.42x 3.01x 2.89x 3.26x 3.34x 3.13x
<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) June 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 $87,795
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 24,601 38,057 35,307 49,498 51,316 46,596
Investment tax credit adjustment............ (1,439) (1,583) (1,064) (1,086) 776 689
Total income taxes.................... 23,162 36,474 34,243 48,412 52,092 47,285
Income before income taxes...................... 83,152 120,938 109,173 135,333 142,710 135,080
Fixed Charges:
Interest on long-term debt................. 53,408 53,706 51,172 51,147 52,165 53,463
expense and premium - net.................. 392 507 567 567 594 631
Interest on short-term bank loans........... 647 220 1,157 3,144 2,269 2,338
Other interest.............................. 1,011 2,023 1,538 1,598 2,319 3,448
Interest portion of rentals................. 683 1,077 794 925 991 937
Total fixed charges................... 56,141 57,533 55,228 57,381 58,338 60,817
Preferred dividends requirements............ 7,611 8,547 10,682 12,392 12,146 8,634
Total fixed charges and preferred
dividends............................ 63,752 66,080 65,910 69,773 70,484 69,451
Earnings - as defined.......................... $139,293 $178,471 $164,401 $192,714 $201,048 $195,897
Ratio of earnings to fixed charges and
preferred dividends.......................... 2.18x 2.70x 2.49x 2.76x 2.85x 2.82x
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) June 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 $87,795
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 24,601 38,057 35,307 49,498 51,316 46,596
Investment tax credit adjustment............ (1,439) (1,583) (1,064) (1,086) 776 689
Total income taxes.................... 23,162 36,474 34,243 48,412 52,092 47,285
Income before income taxes...................... 83,152 120,938 109,173 135,333 142,710 135,080
Fixed Charges:
Interest on long-term debt................. 53,408 53,706 51,172 51,147 52,165 53,463
expense and premium - net.................. 392 507 567 567 594 631
Interest on short-term bank loans........... 647 220 1,157 3,144 2,269 2,338
Other interest.............................. 1,011 2,023 1,538 1,598 2,319 3,448
Interest portion of rentals................. 683 1,077 794 925 991 937
Total fixed charges................... 56,141 57,533 55,228 57,381 58,338 60,817
Supplemental increment to fixed charges*.... 2,487 2,631 2,622 2,611 2,600 2,606
Supplemental fixed charges............ 58,628 60,164 57,850 59,992 60,938 63,423
Preferred dividends requirements............ 7,611 8,547 10,682 12,392 12,146 8,634
Total supplemental fixed charges
and preferred dividends.............. 66,239 68,711 68,532 72,384 73,084 72,057
Supplemental Earnings - as defined............. $141,780 $181,102 $167,023 $195,325 $203,648 $198,503
Supplemental Ratio of earnings to fixed
charges and preferred dividends.............. 2.14x 2.64x 2.44x 2.70x 2.79x 2.75x
<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.
Exhibit 12-C
</TABLE>
<TABLE>
<CAPTION>
Ex-12
Idaho Power Company
Consolidated Financial Information
Ratio of Earnings to Fixed Charges
Twelve Months
Twelve Months Ended December 31, Ended
(Thousands of Dollars) June 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 $87,795
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 24,601 38,057 35,307 49,498 51,316 46,596
Investment tax credit adjustment............ (1,439) (1,583) (1,064) (1,086) 776 689
Total income taxes.................... 23,162 36,474 34,243 48,412 52,092 47,285
Income before income taxes...................... 83,152 120,938 109,173 135,333 142,710 135,080
Fixed Charges:
Interest on long-term debt................. 53,408 53,706 51,172 51,147 52,165 53,463
expense and premium - net.................. 392 507 567 567 594 631
Interest on short-term bank loans........... 647 220 1,157 3,144 2,269 2,338
Other interest.............................. 1,011 2,023 1,538 1,598 2,319 3,448
Interest portion of rentals................. 683 1,077 794 925 991 937
Total fixed charges................... 56,141 57,533 55,228 57,381 58,338 60,817
Earnings - as defined.......................... $139,293 $178,471 $164,401 $192,714 $201,048 $195,897
Ratio of earnings to fixed charges.............. 2.48x 3.10x 2.98x 3.36x 3.45x 3.22x
Exhibit 12
</TABLE>
Exhibit 15
Aug 5, 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 March 31, 1997 and 1996, as indicated in our
report dated April 30, 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 March 31,
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
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in
Registration Statement Nos. 33-51215, and 333-00139
of Idaho Power Company on Form S-3 and Registration
Statement No. 33-56071 of Idaho Power Company on
Form S-8 of our report dated January 31, 1997
appearing in the Annual Report on Form 10-K of Idaho
Power Company for the year ended December 31, 1996.
DELOITTE & TOUCHE LLP
Portland, Oregon
August 5, 1997
