UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
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 March 31, 1998 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
Consolidated Balance Sheets 4-5
Consolidated Statements of Cash Flows 6
Consolidated Statements of Capitalization 7
Notes to Consolidated Financial Statements 8-10
Independent Accountants' Report 11
Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations 12-14
Part II. Other Information:
Item 6.
Exhibits and Reports on Form 8-K 15-19
Signatures 20
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
IPUC Idaho Public Utilities Commission
kWh kilowatt-hour
MAF Million Acre-Feet
MMbtu Million British Thermal Units
MOU Memorandum of Understanding
MWH Megawatt-Hour
OPUC Oregon Public Utilities Commission
PCA Power Cost Adjustment
REA Rural Electrification Administration
SFAS Statement of Financial Accounting Standards
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
IDAHO POWER COMPANY
Consolidated Statements of Income
Three Months Ended
March 31,
1998 1997
(Thousands of Dollars)
REVENUES:
Total general business $112,223 $112,961
Off system sales 116,413 34,839
Other revenues 9,534 7,647
Total Revenues 238,170 155,447
EXPENSES:
Operation:
Purchased power 94,206 19,559
Fuel expense 20,720 14,485
Power cost adjustment 475 (1,244)
Other 32,947 29,918
Maintenance 9,028 10,303
Depreciation 18,895 17,522
Taxes other than income taxes 5,344 5,831
Total expenses 181,615 96,374
INCOME FROM OPERATIONS 56,555 59,073
OTHER INCOME:
Gas trading activities - Net (718) -
Other - Net 1,705 3,389
Total other income 987 3,389
INTEREST CHARGES:
Interest on long-term debt 13,037 13,805
Other interest 2,086 2,048
Total interest charges 15,123 15,853
Allowance for borrowed funds used during
construction (161) (132)
Net interest charges 14,962 15,721
INCOME BEFORE INCOME TAXES 42,580 46,741
INCOME TAXES 13,125 16,361
NET INCOME 29,455 30,380
Dividends on preferred stock 1,405 1,394
EARNINGS ON COMMON STOCK $28,050 $28,986
AVERAGE COMMON SHARES OUTSTANDING (000) 37,612 37,612
Earnings per share of common stock
(basic and diluted) 0.75 0.77
Dividends paid per share of common stock 0.465 0.465
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
Consolidated Balance Sheets
ASSETS
March 31, December 31,
1998 1997
(Thousands of Dollars)
ELECTRIC PLANT:
In service (at original cost) $2,630,643 $2,605,697
Accumulated provision for depreciation (960,926) (942,400)
In service - Net 1,669,717 1,663,297
Construction work in progress 47,662 51,892
Held for future use 1,738 1,738
Electric plant - Net 1,719,117 1,716,927
INVESTMENTS AND OTHER PROPERTY 104,926 97,065
CURRENT ASSETS:
Cash and cash equivalents 3,338 6,905
Receivables:
Customer 79,113 63,076
Allowance for uncollectible accounts (1,397) (1,397)
Gas Operations 28,403 42,128
Notes 4,688 4,613
Employee notes receivable 4,652 4,757
Other 9,613 8,854
Accrued unbilled revenue 23,796 33,312
Materials and supplies (at average cost) 29,792 29,156
Fuel stock (at average cost) 8,253 7,172
Prepayments 14,092 15,381
Regulatory assets associated with income taxes 3,032 3,164
Total current assets 207,375 217,121
DEFERRED DEBITS:
American Falls and Milner water rights 32,055 32,055
Company-owned life insurance 50,793 51,915
Regulatory assets associated with income taxes 200,661 198,521
Regulatory assets - other 87,808 90,239
Other 44,511 47,973
Total deferred debits 415,828 420,703
TOTAL $2,447,246 $2,451,816
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
Consolidated Balance Sheets
CAPITALIZATION & LIABILITIES
March 31, December 31,
1998 1997
(Thousands of Dollars)
CAPITALIZATION:
Common stock equity - $2.50 par value (shares authorized
50,000,000;
shares outstanding - 37,612,351) $722,011 $711,818
Preferred stock 106,627 106,697
Long-term debt 750,116 746,142
Total capitalization 1,578,754 1,564,657
CURRENT LIABILITIES:
Long-term debt due within one year 33,999 33,998
Notes payable 48,816 57,516
Accounts payable 60,928 69,064
Accounts payable gas operations 28,817 42,874
Taxes accrued 38,265 24,295
Interest accrued 16,518 17,918
Deferred income taxes 3,032 3,164
Other 13,902 13,703
Total current liabilities 244,277 262,532
DEFERRED CREDITS:
Regulatory liabilities associated with accumulated
deferred investment tax credits 70,320 70,196
Deferred income taxes 433,234 423,736
Regulatory liabilities associated with
income taxes 27,622 34,072
Regulatory liabilities - other 483 509
Other 92,556 96,114
Total deferred credits 624,215 624,627
COMMITMENTS AND CONTINGENT LIABILITIES
TOTAL $2,447,246 $2,451,816
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
Consolidated Statements Of Cash Flows
Three Months Ended
March 31,
1998 1997
(Thousands of Dollars)
OPERATING ACTIVITIES:
Net income $29,455 $30,380
Adjustments to reconcile net income to net cash:
Depreciation & amortization 21,654 19,400
Deferred taxes and investment tax credits 1,997 1,360
Change in:
Accounts receivable and prepayments (1,752) (5,704)
Accrued unbilled revenue 9,516 7,016
Materials & supplies and fuel stock (1,717) (1,676)
Accounts payable (22,193) (10,876)
Taxes payable 13,969 18,650
Other current assets and liabilities (1,172) 3,047
Other - net (1,255) (2,964)
Net cash provided by operating activities 48,502 58,633
INVESTING ACTIVITIES:
Additions to utility plant (21,324) (24,586)
Investments in affordable housing (5,000) (9,896)
Other (2,024) (448)
Net cash used in investing activities (28,348) (34,930)
FINANCING ACTIVITIES:
Proceeds from issuance of:
Long-term debt-related to affordable housing 4,084 8,909
Dividends on common stock (17,490) (17,971)
Dividends on preferred stock (1,405) (1,394)
Increase (decrease) in short-term borrowings (8,700) (12,423)
Other - net (210) 75
Net cash provided by (used in) financing
activities (23,721) (22,804)
Net increase (decrease) in cash and cash
equivalents (3,567) 899
Cash and cash equivalents at beginning of period 6,905 7,928
Cash and cash equivalents at end of period $ 3,338 $ 8,827
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes 1,200 309
Interest (net of amount capitalized) 15,102 14,605
The accompanying notes are an integral part of these statements.
IDAHO POWER COMPANY
Consolidated Statements Of Capitalization
March 31,December 31,
1998 1997
(Thousands of Dollars)
COMMON STOCK EQUITY:
Common stock $94,031 $94,031
Premium on capital stock 361,849 362,328
Capital stock expense (3,838) (3,840)
Retained earnings 269,860 259,299
Accumulated other comprehensive income 109 -
Total common stock equity 722,011 45.7% 711,818 45.5%
PREFERRED STOCK:
4% preferred stock 16,627 16,697
7.68% Series, serial preferred stock 15,000 15,000
7.07% Series, serial preferred stock 25,000 25,000
Auction rate preferred stock 50,000 50,000
Total preferred stock 106,627 6.8 106,697 6.8
LONG-TERM DEBT:
Utility:
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
Maturing 2021 through 2031 with
rates from 7.5% to 9.52% 230,000 230,000
Total first mortgage bonds 527,000 527,000
Amount due within one year (30,000) (30,000)
Net first mortgage bonds 497,000 497,000
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 1996 B and C
due 2026 48,200 48,200
Total pollution control
revenue bonds 170,460 170,460
REA Notes 1,543 1,561
Amount due within one year (73) (72)
Net REA Notes 1,470 1,489
American Falls bond guarantee 20,355 20,355
Milner Dam note guarantee 11,700 11,700
Unamortized premium/discount - Net (1,612) (1,637)
Net utility debt 699,373 699,367
Subsidiaries:
Debt related to investments in affordable
housing with rates ranging from 6.95%
to 8.65% due 1998 to 2008 50,469 46,385
Other subsidiary debt 4,200 4,316
Total subsidiary debt 54,669 50,701
Amount due within one year (3,926) (3,926)
Net subsidiary debt 50,743 46,775
Total long-term debt 750,116 47.5 746,142 47.7
TOTAL CAPITALIZATION $1,578,754 100.0% $1,564,657 100.0%
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 March 31, 1998 and the consolidated results
of operations for the three months ended March 31, 1998
and 1997 and the consolidated cash flows for the three
months ended March 31, 1998 and 1997. 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, 1997. The results of
operations for the interim periods are not necessarily
indicative of the results to be expected for the full
year.
Principles of Consolidation
The consolidated financial statements include the accounts
of the Company and its wholly-owned or controlled
subsidiaries. All significant intercompany transactions
and balances have been eliminated in consolidation.
Investments in business entities in which the Company and
its subsidiaries do not have control, but have the ability
to exercise significant influence over operating and
financial policies, are accounted for using the equity
method.
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.
Comprehensive Income
The Company adopted SFAS 130, Reporting Comprehensive
Income, on January 1, 1998. The statement establishes a
standard for the reporting and displaying of comprehensive
income and its components in the Company's financial
statements.
For the quarter ended March 31, 1998, the Company's total
comprehensive income was not materially different from net
income. The components of total comprehensive income
include net income, the Company's proportionate share of
unrealized holding gains on marketable securities held by
an equity investee, and the changes in the Company's
additional minimum liability under a deferred compensation
plan for certain senior management employees and
directors.
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. The Company has changed the
statement of cash flows from the direct method to the
indirect method effective for the quarter ended March 31,
1998. Previous year's presentation has been restated to
conform with the new method.
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.
Gas Operations
The Company intends to be a competitive energy provider,
including both electricity and gas. In April 1997 the
Company opened a gas trading office in Houston, Texas to
serve the southern and eastern United States gas markets
and a Boise, Idaho office that serves the Northwest and
Canadian markets. The following table shows gas trading
activities for the quarter ended March 31, 1998 (thousands
of dollars):
Gas revenues $ 97,158
Cost of gas (97,166)
Administrative and General expenses (710)
Gas trading activities - Net $ (718)
Reclassifications
Certain items previously reported for periods prior to
March 31, 1998 have been reclassified to conform with the
current periods presentation. Net income was not affected
by these reclassifications.
2. COMMITMENTS AND CONTINGENT LIABILITIES:
Commitments under contracts and purchase orders relating
to the Company's program for construction and operation of
facilities amounted to approximately $2.8 million at March
31, 1998. 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. So far in the current rate period, actual
power cost expenses have exceeded the forecast. The Company
has recorded a regulatory asset of $15.4 million as of March
31, 1998. The variance that exists at the end of the current
rate period will be trued-up in the next annual PCA
adjustment.
On April 15, 1998 the Company filed its annual PCA request
with the IPUC. The filing requests a $37.1 million increase
over the 1997 rates. The increase is largely due to the
return to more normal streamflow conditions and rising costs
associated with mandatory purchases from CSPP projects. If
this request is approved, revenue from Idaho retail customers
will be $20.4 million greater than what would be recovered if
the Company was charging the base rates during this rate
period.
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 1997, the
Company set aside an estimated $8.7 million of revenue for
the benefit of its Idaho customers. Subsequently, this
amount was revised to $7.6 million, based on actual data.
In the April 15, 1998 PCA filing, the Company requested
that this revised amount be applied against the balance of
demand-side conservation expenditures which are currently
recorded as a regulatory asset.
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 of which $143 million remains available at March 31,
1998.
5. INCOME TAXES:
The effective tax rate for the first three months
decreased from 35.0 percent in 1997 to 30.8 percent in
1998. The table below displays a reconciliation between
the statutory federal income tax rate of 35.0 percent and
the effective tax rates for the three months ended March
31 (dollars are in thousands):
1998 1997
Amount Rate Amount Rate
Computed income taxes based on statutory federal
income tax rate $14,903 35.0% $16,359 35.0%
Changes in taxes resulting from:
Current state income taxes 1,715 4.0 1,823 3.9
Net depreciation 1,350 3.2 1,281 2.7
Investment tax credits restored (729) (1.7) (719) (1.5)
Removal costs (653) (1.5) (267) (0.6)
Repair allowance (782) (1.8) (782) (1.7)
Low income housing credit (1,593) (3.7) (1,014) (2.2)
Other (1,086) (2.7) (320) (0.6)
$13,125 30.8% $16,361 35.0%
6. PREFERRED STOCK:
The number of shares of preferred stock outstanding were as follows:
March 31, December 31,
1998 1997
Cumulative, $100 par value:
4% preferred stock (authorized 215,000 166,271 166,972
shares)
Serial preferred stock, 7.68% Series 150,000 150,000
(authorized 150,000 shares)
Serial preferred stock, cumulative, without
par value; total of 3,000,000 shares
authorized:
7.07% Series, $100 stated value, 250,000 250,000
(authorized 250,000 shares)
Auction rate preferred stock, $100,000
stated value,
(authorized 500 shares) 500 500
INDEPENDENT ACCOUNTANTS' REPORT
Idaho Power Company
Boise, Idaho
We have reviewed the accompanying consolidated balance sheet
and statement of capitalization of Idaho Power Company and
subsidiaries as of March 31, 1998, and the related
consolidated statements of income for the three month periods
ended March 31, 1998 and 1997 and consolidated statements of
cash flows for the three month periods ended March 31, 1998
and 1997. 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, 1997, 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 30, 1998, 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, 1997 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
May 8, 1998
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This discussion and consolidated financial statements reflect the
operations of Idaho Power Company and its wholly owned or
controlled subsidiaries. This discussion uses the terms Idaho
Power and the Company interchangeably to refer to Idaho Power 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 (basic and diluted) were $0.75
for the quarter ended March 31, 1998, a decrease of $0.02 (2.6
percent) from the same quarter last year. At March 31, 1998, the
book value per share of common stock was $19.20.
Revenue
General business revenue is dependent on many factors, including
the number of customers, revenue per MWH, and weather conditions.
In the first quarter of 1998, customers served increased 3.0
percent compared to the first quarter of 1997, due primarily to
economic growth in the Company's service territory. The revenue
per MWH decreased 1.9 percent, a result of the annual rate
adjustments discussed below in "Power Cost Adjustment.". Heating
degree days, a common measure used in the utility industry to
analyze temperature-related demand, were 11.5 percent less than
the first quarter of 1997, and 19.4 percent below normal. This
resulted in a 1.6 percent decrease in the average MWH used per
customer. These three factors resulted in a 0.7 percent decrease
in general business revenue.
Off-system sales are comprised of trading in the wholesale
electricity markets, long-term contracts, and opportunity sales
made when available. The increase in off-system revenue is due
primarily to a 158.4 percent increase in MWH sales, primarily
from increased trading in the wholesale electricity markets.
Expenses
Purchased power expenses increased $74.6 million (381.6 percent),
due to a 323.3 percent increase in MWHs purchased, primarily from
increased trading in the wholesale electricity markets.
Fuel expenses increased $6.2 million (43.1 percent), due
primarily to a 50.2 percent increase in MWHs generated by
Company's coal-fired power plants. Generation by these plants
was increased to take advantage of off system sales
opportunities.
The PCA component of expenses increased $1.7 million. The PCA
mechanism reduces expenses when actual power supply costs are
above forecast and increases them when power supply costs are
below forecast. In the first quarter of 1998, power supply costs
were below forecast, while in 1997 they were above forecast. The
PCA is discussed below in "Power Cost Adjustment."
Other operation expenses increased $3.0 million due to increases
in electricity wheeling charges, related to increased MWH sales,
and increased payroll-related expenses.
Maintenance expenses decreased $1.3 million due primarily to
decreased boiler maintenance expenses at the Jim Bridger plant.
During the first quarter of 1997, extensive maintenance was
performed on the plant while the Company maximized the use of its
hydro generation facilities.
Other
Other income decreased $2.4 million, due primarily to a $1.0
million increase in expenses related to Company initiatives and
$0.7 million of losses on gas trading activities. In addition,
in 1997 the Company recorded a $0.6 million gain on the sale of
an investment.
Income taxes decreased due primarily to the decrease in net
income before taxes and a decrease in the effective tax rate.
The effective tax rate has decreased primarily as a result of
increased tax credits from affordable housing and the impact of
expected tax settlements for the years 1993-1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
For the three months ended March 31, 1998, the Company generated
$48.5 million in net cash from operations. After deducting for
both common and preferred dividends, net cash generation from
operations provided approximately $29.6 million for the Company's
construction program and other capital requirements.
Cash Expenditures
Idaho Power estimates that its cash construction program for 1998
will require approximately $100.0 million. This estimate is
subject to revision in light of changing economic, regulatory,
environmental, and conservation factors. During the first three
months of 1998, the Company expended approximately $21.3 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 March 31, 1998, the Company's
short-term borrowings totaled $48.8 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 of which $143
million remains available at March 31, 1998. 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
March 31, the Company's consolidated pre-tax interest coverage
was 3.24 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, which take effect annually on May 16, are
based on forecasts of net power supply costs. The difference
between the actual costs incurred and the forecasted costs are
deferred, with interest, and trued-up in the next annual rate
adjustment.
On April 15, 1998 the Company filed its annual PCA request with
the IPUC. The filing requests a $37.1 million increase over the
1997 rates. The increase is largely due to the return to more
normal streamflow conditions and rising costs associated with
mandatory purchases from CSPP projects. If this request is
approved, revenue from Idaho retail customers will be $20.4
million greater than what would be recovered if the Company was
charging the base rates during this rate period.
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 1997, the Company set aside an estimated $8.7
million of revenue for the benefit of its Idaho customers.
Subsequently, this amount was revised to $7.6 million, based on
actual data. In the April 15, 1998 PCA filing, the Company
requested that this revised amount be applied against the balance
of demand-side conservation expenditures which are currently
recorded as a regulatory asset.
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. Independent forecasters
have projected that inflow into Brownlee Reservoir during the
April-July runoff period will be 5.2 MAF, slightly more than the
70-year median of 4.9 MAF and just more than half of 1997's 9.8
MAF.
Holding Company
In the second half of 1997, the Company filed applications with
state regulatory commissions in Idaho, Oregon, Nevada and Wyoming
and with the FERC seeking approval to form a holding company to
be called IDACORP, Inc. The purpose of the holding company is to
position Idaho Power to respond to the changing business
environment in the electric utility industry. Upon consummation
of the transaction Idaho Power, along with Ida-West, will become
wholly owned subsidiaries of IDACORP. Orders approving the
formation of the holding company have been received from Idaho,
Oregon, Wyoming and the FERC. Nevada has also approved the
transaction and will be issuing its order shortly. The matter
was submitted to and approved by the shareholders at the 1998
Annual Meeting. Upon receipt of all regulatory approvals it is
expected the holding company will be effective sometime in the
second half of 1998.
Year 2000 Costs
The Year 2000 issue is the result of potential problems with
computer systems or any equipment with computer chips that use
dates where the year has been stored as just two characters (e.g.
97 for 1997). These systems may incorrectly evaluate dates
beyond the year 1999, potentially causing system failure and
disruption of operations which could materially affect the
Company's ability to conduct business. These systems must be
identified and either modified or replaced with systems that
correctly recognize dates beyond 1999.
The Company has developed and implemented a Year 2000 Compliance
Plan that addresses traditional hardware and software systems,
embedded systems, and service providers. The plan also includes
identification of and coordination with all external interfacing
systems. The Company expects its critical systems to be
compliant by mid-1999.
Idaho Power is connected to an electric grid that connects
utilities throughout the western portion of North America. This
interconnection is essential to the reliability and operational
integrity of each connected utility. This also means that
failure of one electric utility in the interconnected grid could
cause the failure of others. In this regard, the Company is
working closely with other electric industry organizations
concerned with the reliability issues and technical
collaboration.
The Company estimates that its operating expenses related to this
issue will total approximately $4.8 million between 1998 and 2000
and will be expensed as incurred. The Company does not expect
these expenditures to have a material effect on its financial
condition or results of operations.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit File Number As Exhibit
2 Agreement and plan of exchange,
dated as of February 2, 1998.
*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).
*4(e)(i) 1-3198 Form 4(e)(i) Amendment, dated as of January 30,
10-K for 1997 1998, related to agreement filed as
exhibit 4(e).
*4(f) 1-3198 Form 4(f) Agreement and Plan of Exchange
10-K for 1997 dated as of February 2, 1998
between Idaho Power Company, and
Idaho Power Holding Company.
*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.
*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
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.
*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 March 31, 1998.
*Previously Filed and Incorporated Herein by Reference
_______________________________
1 Compensatory plan
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
IDAHO POWER COMPANY
(Registrant)
Date May 13, 1998 By: /s/ J LaMont Keen
J LaMont Keen
Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer
and Principal Accounting
Officer)
-4-
Exhibit 2
AGREEMENT AND PLAN OF EXCHANGE
This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement"),
dated as of February 2, 1998, is between IDAHO POWER COMPANY, an
Idaho corporation (the "Company"), the company whose shares will
be acquired pursuant to the Exchange described herein, and IDAHO
POWER HOLDING COMPANY, an Idaho corporation ("IPHC"), the
acquiring company. The Company and IPHC are hereinafter referred
to, collectively, as the "Companies".
WITNESSETH:
WHEREAS, the authorized capital stock of the Company
consists of (a) 50,000,000 shares of Common Stock, $2.50 par
value ("Company Common Stock"), of which 37,612,351 shares are
issued and outstanding, (b) 215,000 shares of 4% Preferred Stock,
$100 par value, of which 166,972 shares are issued and
outstanding, (c) 150,000 shares of Serial Preferred Stock, $100
par value, of which 150,000 shares are issued and outstanding and
(d) 3,000,000 shares of Serial Preferred Stock, without par
value, of which 500,500 shares are issued and outstanding; the
number of shares of Company Common Stock being subject to
increase to the extent that shares reserved for issuance are
issued prior to the Effective Time, as hereinafter defined.
WHEREAS, IPHC is a wholly-owned subsidiary of the Company
with authorized capital stock consisting of (a) 120,000,000
shares of Common Stock, without par value ("IPHC Common Stock"),
of which 100 shares are issued and outstanding and owned of
record by the Company and (b) 20,000,000 shares of Preferred
Stock, without par value ("IPHC Preferred Stock"), none of which
shares are issued and outstanding;
WHEREAS, the Boards of Directors of the respective Companies
deem it desirable and in the best interests of the Companies and
the shareholders of the Company that each share of Company Common
Stock be exchanged for a share of IPHC Common Stock with the
result that IPHC becomes the owner of all outstanding Company
Common Stock and that each holder of Company Common Stock becomes
the owner of an equal number of shares of IPHC Common Stock, all
on the terms and conditions hereinafter set forth; and
WHEREAS, the Boards of Directors of the Companies have each
approved and adopted this Agreement and the Board of Directors of
the Company has recommended that its shareholders approve this
Agreement pursuant to the Idaho Business Corporation Act (the
"Act");
NOW, THEREFORE, in consideration of the premises, and of the
agreements, covenants and conditions hereafter contained, the
parties hereto agree with respect to the exchange provided for
herein (the "Exchange") that at the Effective Time (as
hereinafter defined) each share of Company Common Stock issued
and outstanding immediately prior to the Effective Time will be
exchanged for one share of IPHC Common Stock, and that the terms
and conditions of the Exchange and the method of carrying the
same into effect shall be as follows:
I
ARTICLE
This Agreement shall be submitted to the shareholders of the
Company entitled to vote with respect thereto for approval as
provided by the Act.
I ARTICLE
Subject to the satisfaction of the terms and conditions set
forth in this Agreement and to the provisions of Article VI, IPHC
agrees to file with the Secretary of State of the State of Idaho
(the "Secretary of State") Articles of Share Exchange (the
"Articles") with respect to the Exchange, and the Exchange shall
take effect upon the effective date as specified in the Articles
(the "Effective Time")
I ARTICLE
A. At the Effective Time:
(1) each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time shall be
automatically exchanged for one share of IPHC Common Stock, which
shares shall thereupon be fully paid and non-assessable;
(1) PHC shall acquire and become the owner and holder of
each issued and outstanding share of Company Common Stock so
exchanged;
(1) each share of IPHC Common Stock issued and
outstanding immediately prior to the Effective Time shall be
canceled and shall thereupon constitute an authorized and
unissued share of IPHC Common Stock;
(1) each share of Company Common Stock held under the
Dividend Reinvestment and Stock Purchase Plan, the Employee
Savings Plan and the 1994 Restricted Stock Plan (including
fractional and uncertificated shares) immediately prior to the
Effective Time shall be automatically exchanged for a like number
of shares (including fractional and uncertificated shares) of
IPHC Common Stock, which shares shall be held under the Dividend
Reinvestment and Stock Purchase Plan, the Employee Savings Plan
and the 1994 Restricted Stock Plan, as the case may be; and
(1) the former owners of Company Common Stock shall be
entitled only to receive shares of IPHC Common Stock as provided
herein.
A. Subject to dissenters' rights as set forth in Part 13
of the Act for the 4% Preferred Stock, $100 par value and the
Serial Preferred Stock, $100 par value, shares of the Company's
4% Preferred Stock, $100 par value, Serial Preferred Stock, $100
par value, and Serial Preferred Stock, without par value, shall
not be exchanged or otherwise affected in connection with the
Exchange and, to the extent issued and outstanding immediately
prior to the Effective Time, shall continue to be issued and
outstanding following the Exchange as shares of the Company of
the applicable series designation.
A. As of the Effective Time, IPHC shall succeed to the
Dividend Reinvestment and Stock Purchase Plan as in effect
immediately prior to the Effective Time, and the Dividend
Reinvestment and Stock Purchase Plan shall be appropriately
amended to provide for the issuance and delivery of IPHC Common
Stock on and after the Effective Time.
A. As of the Effective Time, the Employee Savings Plan
and the 1994 Restricted Stock Plan shall be appropriately amended
to provide for the issuance and delivery of IPHC Common Stock on
and after the Effective Time.
I ARTICLE
The filing of the Articles with the Secretary of State and
the consummation of the Exchange are subject to the satisfaction
of the following conditions precedent:
(1) the approval by the shareholders of the Company,
to the extent required by the Act, of this Agreement;
(1) the approval for listing, upon official notice of
issuance, by the New York Stock Exchange, of IPHC Common Stock to
be issued and reserved for issuance pursuant to the Exchange;
(1) the receipt of such orders, authorizations, approvals
or waivers from the Idaho Public Utilities Commission and all
other regulatory bodies, boards or agencies as are required in
connection with the Exchange, which orders, authorizations,
approvals or waivers remain in full force and effect and do not
include, in the sole judgment of the Board of Directors of the
Company, unacceptable conditions; and
(4) the receipt by the Company of a tax opinion of LeBoeuf,
Lamb, Greene & MacRae L.L.P. satisfactory to the Board of
Directors of the Company to the effect that (a) common
shareholders of the Company (i) will recognize no gain or loss in
connection with the Exchange, (ii) will have the same basis in
their IPHC Common Stock after the Exchange as they had in their
Company Common Stock before the Exchange and (iii) will be
entitled to include any period that they held Company Common
Stock before the Exchange when determining any holding period
with respect to IPHC Common Stock received in the Exchange and
(b) IPHC will recognize no gain or loss upon its receipt of
Company Common Stock in the Exchange.
I ARTICLE
Following the Effective Time, each holder of an outstanding
certificate or certificates theretofore representing shares of
Company Common Stock may, but shall not be required to, surrender
the same to IPHC for cancellation and reissuance of a new
certificate or certificates in such holder's name or for
cancellation and transfer, and each holder or transferee will be
entitled to receive a certificate or certificates representing
the same number of shares of IPHC Common Stock as the shares of
Company Common Stock previously represented by the certificate or
certificates surrendered. Until so surrendered or presented for
transfer, each outstanding certificate which, immediately prior
to the Effective Time, represented Company Common Stock shall be
deemed and treated for all corporate purposes to represent the
ownership of the same number of shares of IPHC Common Stock as
though such surrender or transfer and exchange had taken place.
The holders of Company Common Stock at the Effective Time shall
have no right to have their shares of Company Common Stock
transferred on the stock transfer books of the Company, and such
stock transfer books shall be deemed to be closed for this
purpose at the Effective Time.
I ARTICLE
This Agreement may be amended, modified or supplemented, or
compliance with any provision or condition hereof may be waived,
at any time, by the mutual consent of the Boards of Directors of
the Company and of IPHC; provided, however, that no such
amendment, modification, supplement or waiver shall be made or
effected, if such amendment, modification, supplement or waiver
would, in the judgment of the Board of Directors of the Company,
materially and adversely affect the shareholders of the Company.
Notwithstanding shareholder approval of this Agreement, this
Agreement may be terminated and the Exchange and related
transactions abandoned at any time prior to the time the Articles
are filed with the Secretary of State, if the Board of Directors
of the Company determines, in its sole discretion, that
consummation of the Exchange would be inadvisable or not in the
best interests of the Company or its shareholders.
IN WITNESS WHEREOF, each of the Company and IPHC, pursuant
to authorization and approval given by its Board of Directors,
has caused this Agreement to be executed as of the date first
above written.
IDAHO POWER COMPANY
By:_________________________________
Name: Jan B. Packwood
Title: President
IDAHO POWER HOLDING COMPANY
By:_________________________________
Name: Joseph W. Marshall
Title: Chairman of the Board
and Chief Executive Officer
<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) March 31,
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income..................... $84,464 $74,930 $86,921 $90,618 $92,274 $91,352
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 38,057 35,307 49,498 51,316 47,559 43,800
Investment tax credit adjustment............ (1,583) (1,064) (1,086) 776 (1,087) (565)
Total income taxes.................... 36,474 34,243 48,412 52,092 46,472 43,235
Income before income taxes...................... 120,938 109,173 135,333 142,710 138,746 134,587
Fixed Charges:
Interest on long-term debt................. 53,706 51,172 51,147 52,165 53,215 52,447
expense and premium - net.................. 507 567 567 594 653 656
Interest on short-term bank loans........... 220 1,157 3,144 2,269 2,902 3,011
Other interest.............................. 2,023 1,538 1,598 2,319 3,990 3,916
Interest portion of rentals................. 1,077 794 925 991 982 1,066
Total fixed charges................... 57,533 55,228 57,381 58,338 61,742 61,096
Earnings - as defined.......................... $178,471 $164,401 $192,714 $201,048 $200,488 $195,683
Ratio of earnings to fixed charges.............. 3.10x 2.98x 3.36x 3.45x 3.25x 3.20x
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) March 31,
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income..................... $84,464 $74,930 $86,921 $90,618 $92,274 $91,352
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 38,057 35,307 49,498 51,316 47,559 43,800
Investment tax credit adjustment............ (1,583) (1,064) (1,086) 776 (1,087) (565)
Total income taxes.................... 36,474 34,243 48,412 52,092 46,472 43,235
Income before income taxes...................... 120,938 109,173 135,333 142,710 138,746 134,587
Fixed Charges:
Interest on long-term debt................. 53,706 51,172 51,147 52,165 53,215 52,447
expense and premium - net.................. 507 567 567 594 653 656
Interest on short-term bank loans........... 220 1,157 3,144 2,269 2,902 3,011
Other interest.............................. 2,023 1,538 1,598 2,319 3,990 3,916
Interest portion of rentals................. 1,077 794 925 991 982 1,066
Total fixed charges................... 57,533 55,228 57,381 58,338 61,742 61,096
Supplemental increment to fixed charges* .. 2,631 2,622 2,611 2,600 2,574 2,565
Total supplemental fixed charges...... 60,164 57,850 59,992 60,938 64,316 63,661
Supplemental Earnings - as defined............. $181,102 $167,023 $195,325 $203,648 $203,062 $198,248
Supplemental Ratio of earnings to fixed
charges 3.01x 2.89x 3.26x 3.34x 3.16x 3.11x
<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) March 31,
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income..................... $84,464 $74,930 $86,921 $90,618 $92,274 $91,352
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 38,057 35,307 49,498 51,316 47,559 43,800
Investment tax credit adjustment............ (1,583) (1,064) (1,086) 776 (1,087) (565)
Total income taxes.................... 36,474 34,243 48,412 52,092 46,472 43,235
Income before income taxes...................... 120,938 109,173 135,333 142,710 138,746 134,587
Fixed Charges:
Interest on long-term debt................. 53,706 51,172 51,147 52,165 53,215 52,447
expense and premium - net.................. 507 567 567 594 653 656
Interest on short-term bank loans........... 220 1,157 3,144 2,269 2,902 3,011
Other interest.............................. 2,023 1,538 1,598 2,319 3,990 3,916
Interest portion of rentals................. 1,077 794 925 991 982 1,066
Total fixed charges................... 57,533 55,228 57,381 58,338 61,742 61,096
Preferred dividends requirements............ 8,547 10,682 12,392 12,146 7,803 7,601
Total fixed charges and preferred
dividends............................ 66,080 65,910 69,773 70,484 69,545 68,697
Earnings - as defined.......................... $178,471 $164,401 $192,714 $201,048 $200,488 $195,683
Ratio of earnings to fixed charges and
preferred dividends.......................... 2.70x 2.49x 2.76x 2.85x 2.88x 2.85x
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) March 31,
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Computation of Ratio of Earnings to
Fixed Charges:
Consolidated net income..................... $84,464 $74,930 $86,921 $90,618 $92,274 $91,352
Income taxes:
Income taxes (incl amounts charged
to other income and deductions)............ 38,057 35,307 49,498 51,316 47,559 43,800
Investment tax credit adjustment............ (1,583) (1,064) (1,086) 776 (1,087) (565)
Total income taxes.................... 36,474 34,243 48,412 52,092 46,472 43,235
Income before income taxes...................... 120,938 109,173 135,333 142,710 138,746 134,587
Fixed Charges:
Interest on long-term debt................. 53,706 51,172 51,147 52,165 53,215 52,447
expense and premium - net.................. 507 567 567 594 653 656
Interest on short-term bank loans........... 220 1,157 3,144 2,269 2,902 3,011
Other interest.............................. 2,023 1,538 1,598 2,319 3,990 3,916
Interest portion of rentals................. 1,077 794 925 991 982 1,066
Total fixed charges................... 57,533 55,228 57,381 58,338 61,742 61,096
Supplemental increment to fixed charges* .. 2,631 2,622 2,611 2,600 2,574 2,565
Supplemental fixed charges............ 60,164 57,850 59,992 60,938 64,316 63,661
Preferred dividends requirements............ 8,547 10,682 12,392 12,146 7,803 7,601
Total supplemental fixed charges
and preferred dividends.............. 68,711 68,532 72,384 73,084 72,119 71,262
Supplemental Earnings - as defined............. $181,102 $167,023 $195,325 $203,648 $203,062 $198,248
Supplemental Ratio of earnings to fixed
charges and preferred dividends.............. 2.64x 2.44x 2.70x 2.79x 2.82x 2.78x
<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>
Exhibit 15
May 13, 1998
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, 1998 and 1997,
as indicated in our report dated May 8, 1998; 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, 1998, is incorporated by reference in Registration Statement
Nos. 333-00139 and 33-51215 on Form S-3, Registration Statement
No. 33-56071 on Form S-8 and Registration Statement No. 333-48031
of IDACORP, Inc. on Form S-4 filed on March 16, 1998.
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
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from (balance
sheets, income statements and cash flow statements) and is qualifed in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,719,117
<OTHER-PROPERTY-AND-INVEST> 104,926
<TOTAL-CURRENT-ASSETS> 207,375
<TOTAL-DEFERRED-CHARGES> 415,828
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,447,246
<COMMON> 94,031
<CAPITAL-SURPLUS-PAID-IN> 358,011
<RETAINED-EARNINGS> 269,969
<TOTAL-COMMON-STOCKHOLDERS-EQ> 722,011
0
106,627
<LONG-TERM-DEBT-NET> 686,203
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 63,913
<COMMERCIAL-PAPER-OBLIGATIONS> 48,816
<LONG-TERM-DEBT-CURRENT-PORT> 33,999
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 785,677
<TOT-CAPITALIZATION-AND-LIAB> 2,447,246
<GROSS-OPERATING-REVENUE> 238,170
<INCOME-TAX-EXPENSE> 13,125
<OTHER-OPERATING-EXPENSES> 181,615
<TOTAL-OPERATING-EXPENSES> 194,740
<OPERATING-INCOME-LOSS> 43,430
<OTHER-INCOME-NET> 987
<INCOME-BEFORE-INTEREST-EXPEN> 44,417
<TOTAL-INTEREST-EXPENSE> 14,962
<NET-INCOME> 29,455
1,405
<EARNINGS-AVAILABLE-FOR-COMM> 28,050
<COMMON-STOCK-DIVIDENDS> 17,490
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 48,502
<EPS-PRIMARY> 0.75
<EPS-DILUTED> 0.75
</TABLE>
