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)