UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-3198 IDAHO POWER COMPANY (Exact name of registrant as specified in its charter) Idaho 82-0130980 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 1221 W. Idaho Street, Boise, Idaho 83702-5627 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (208) 388-2200 None Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Number of shares of Common Stock, $2.50 par value, outstanding as of October 31, 1997 is 37,612,351. IDAHO POWER COMPANY Index Page No Definitions 2 Part I. Financial Information: Item 1. Financial Statements Consolidated Statements of Income 3-5 Consolidated Balance Sheets 6-7 Consolidated Statements of Cash Flows 8-9 Consolidated Statements of Capitalization 10 Notes to Consolidated Financial Statements 11-13 Independent Accountants' Report 14 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 15-20 Part II. Other Information: Item 6. Exhibits and Reports on Form 8-K 21-25 Signatures 26 DEFINITIONS AFDC Allowance For Funds Used During Construction BPA Bonneville Power Administration CSPP Cogeneration and Small Power Production FASB Financial Accounting Standards Board FERC Federal Energy Regulatory Commission IndeGO Independent Grid Operator IPUC Idaho Public Utilities Commission kWh kilowatt-Hour MAF Million Acre Feet MMbtu Million British Thermal Units MOU Memorandum of Understanding MWH Megawatt-Hour NYMEX New York Mercantile Exchange OPUC Oregon Public Utilities Commission PCA Power Cost Adjustment SFAS Statement of Financial Accounting Standards SWIP Southwest Intertie Project FORWARD LOOKING INFORMATION This Form 10-Q contains "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements should be read with the cautionary statements and important factors included in this Form 10-Q at Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Information. Forward- looking statements are all statements other than statements of historical fact, including without limitation those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," and similar expressions. PART I - FINANCIAL INFORMATION Item 1. Financial Statements IDAHO POWER COMPANY Consolidated Statements of Income Three Months Ended September 30, 1997 1996 (Thousands of Dollars) REVENUES $217,174 $149,652 EXPENSES: Operation: Purchased power 88,392 29,454 Fuel expense 22,756 21,887 Power cost adjustment (6,893) (11,244) Other 33,652 32,063 Maintenance 11,958 12,158 Depreciation 18,099 17,652 Taxes other than income taxes 5,333 5,902 Total expenses 173,297 107,872 INCOME FROM OPERATIONS 43,877 41,780 OTHER INCOME: Allowance for equity funds used during construction 4 15 Other - Net 2,123 3,561 Total other income 2,127 3,576 INTEREST CHARGES: Interest on long-term debt 13,147 13,413 Other interest 1,120 1,286 Total interest charges 14,267 14,699 Allowance for borrowed funds used during construction (119) (91) Net interest charges 14,148 14,608 INCOME BEFORE INCOME TAXES 31,856 30,748 INCOME TAXES 10,715 11,597 NET INCOME 21,141 19,151 Dividends on preferred stock 1,422 1,954 EARNINGS ON COMMON STOCK $19,719 $17,197 AVERAGE COMMON SHARES OUTSTANDING (000) 37,612 37,612 Earnings per share of common stock $ .52 $ .46 Dividends paid per share of common stock $ .465 $ .465 The accompanying notes are an integral part of these statements. IDAHO POWER COMPANY Consolidated Statements of Income Nine Months Ended September 30, 1997 1996 (Thousands of Dollars) REVENUES $539,595 $436,665 EXPENSES: Operation: Purchased power 145,019 54,100 Fuel expense 48,030 37,818 Power cost adjustment (5,961) 1,069 Other 101,567 97,421 Maintenance 35,830 31,273 Depreciation 53,664 52,224 Taxes other than income taxes 16,721 15,749 Total expenses 394,870 289,654 INCOME FROM OPERATIONS 144,725 147,011 OTHER INCOME: Allowance for equity funds used during construction 2 12 Other - Net 7,768 10,017 Total other income 7,770 10,029 INTEREST CHARGES: Interest on long-term debt 40,110 39,078 Other interest 5,001 3,932 Total interest charges 45,111 43,010 Allowance for borrowed funds used during construction (379) (255) Net interest charges 44,732 42,755 INCOME BEFORE INCOME TAXES 107,763 114,285 INCOME TAXES 36,202 41,891 NET INCOME 71,561 72,394 Dividends on preferred stock 3,481 5,832 EARNINGS ON COMMON STOCK $68,080 $66,562 AVERAGE COMMON SHARES OUTSTANDING (000) 37,612 37,612 Earnings per share of common stock $ 1.81 $ 1.77 Dividends paid per share of common stock $ 1.395 $ 1.395 The accompanying notes are an integral part of these statements. IDAHO POWER COMPANY Consolidated Statements Of Income Twelve Months Ended September 30, 1997 1996 (Thousands of Dollars) REVENUES $681,376 $571,970 EXPENSES: Operation: Purchased power 159,957 67,266 Fuel expense 73,546 52,871 Power cost adjustment (13,889) 389 Other 136,814 130,621 Maintenance 47,288 38,881 Depreciation 71,145 69,496 Taxes other than income taxes 21,630 20,313 Total expenses 496,491 379,837 INCOME FROM OPERATIONS 184,885 192,133 OTHER INCOME: Allowance for equity funds used during construction 36 12 Other - Net 10,239 14,324 Total other income 10,275 14,336 INTEREST CHARGES: Interest on long-term debt 53,197 51,860 Other interest 6,252 5,220 Total interest charges 59,449 57,080 Allowance for borrowed funds use during construction (477) (516) Net interest charges 58,972 56,564 INCOME BEFORE INCOME TAXES 136,188 149,905 INCOME TAXES 46,403 52,678 NET INCOME 89,785 97,227 Dividends on preferred stock 5,112 7,814 EARNINGS ON COMMON STOCK $84,673 $89,413 AVERAGE COMMON SHARES OUTSTANDING (000) 37,612 37,612 Earnings per share of common stock $ 2.25 $ 2.38 Dividends paid per share of common stock $ 1.86 $ 1.86 The accompanying notes are an integral part of these statements. IDAHO POWER COMPANY Consolidated Balance Sheets ASSETS September 30, December 31, 1997 1996 (Thousands of Dollars) ELECTRIC PLANT: In service (at original cost) $2,581,517 $2,537,565 Accumulated provision for depreciation (930,636) (886,885) In service - Net 1,650,881 1,650,680 Construction work in progress 57,078 42,178 Held for future use 1,750 1,773 Electric plant - Net 1,709,709 1,694,631 INVESTMENTS AND OTHER PROPERTY 43,152 36,502 CURRENT ASSETS: Cash and cash equivalents 10,255 7,928 Receivables: Customer 80,832 34,962 Allowance for uncollectible accounts (1,397) (1,394) Notes 5,312 5,104 Employee notes receivable 4,652 4,486 Other 5,722 8,489 Accrued unbilled revenue 25,451 27,709 Materials and supplies (at average cost) 29,376 24,639 Fuel stock (at average cost) 8,136 11,631 Prepayments 15,039 16,165 Regulatory assets associated with income taxes 3,435 4,397 Total current assets 186,813 144,116 DEFERRED DEBITS: American Falls and Milner water rights 32,260 32,260 Company-owned life insurance 56,057 57,291 Regulatory assets associated with income taxes 199,087 196,696 Regulatory assets - other 89,053 89,507 Other 42,550 44,334 Total deferred debits 419,007 420,088 TOTAL $2,358,681 $2,295,337 The accompanying notes are an integral part of these statements. IDAHO POWER COMPANY Consolidated Balance Sheets CAPITALIZATION & LIABILITIES September 30, December 31, 1997 1996 (Thousands of Dollars) CAPITALIZATION: Common stock equity - $2.50 par value (shares authorized 50,000,000; shares outstanding - 37,612,351) $692,230 $694,574 Preferred stock 106,789 106,975 Long-term debt 706,332 738,550 Total capitalization 1,505,351 1,540,099 CURRENT LIABILITIES: Long-term debt due within one year 30,072 71 Notes payable 58,016 54,016 Accounts payable 60,869 36,370 Taxes accrued 30,471 17,304 Interest accrued 15,205 15,886 Deferred income taxes 3,435 4,397 Other 35,260 12,439 Total current liabilities 233,328 140,483 DEFERRED CREDITS: Regulatory liabilities associated with deferred investment tax credits 70,083 71,283 Deferred income taxes 424,195 411,890 Regulatory liabilities associated with income taxes 33,904 35,028 Regulatory liabilities - other 536 616 Other 91,284 95,938 Total deferred credits 620,002 614,755 COMMITMENTS AND CONTINGENT LIABILITIES (Note 2) TOTAL $2,358,681 $2,295,337 The accompanying notes are an integral part of these statements. IDAHO POWER COMPANY Consolidated Statements Of Cash Flows Nine Months Ended September 30, 1997 1996 (Thousands of Dollars) OPERATING ACTIVITIES: Cash received from operations: Retail revenues $371,947 $378,251 Wholesale revenues 119,232 45,093 Other revenues 21,411 17,417 Fuel paid (44,079) (36,961) Purchased power paid (111,701) (52,775) Other operation & maintenance paid (131,786) (132,708) Interest paid (includes long and short-term debt only) (42,304) (43,847) Income taxes paid (27,429) (30,532) Taxes other than income taxes paid (15,214) (11,351) Other operating cash receipts and payments-Net (9,539) 3,103 Net cash provided by operating activities 130,538 135,690 FINANCING ACTIVITIES: First Mortgage bonds issued - 30,000 PC bond fund requisitions/Other long-term debt (2,414) 7,700 Short-term borrowings - Net 4,254 (20,000) Long-term debt retirement (52) (20,052) Preferred stock retirement (109) (81) Dividends on preferred stock (4,087) (5,956) Dividends on common stock (53,481) (52,443) Other sources/(uses) 1,168 (2,650) Net cash - financing activities (54,721) (63,482) INVESTING ACTIVITIES: Additions to utility plant (73,474) (58,591) Conservation (962) (2,720) Increase in investments (2,406) (14,525) Other 3,352 2,091 Net cash - investing activities (73,490) (73,745) Change in cash and cash equivalents 2,327 (1,537) Cash and cash equivalents beginning of period 7,928 8,468 Cash and cash equivalents end of period $10,255 $6,931 RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net income $71,561 $72,394 Adjustments to reconcile net income to net cash: Depreciation 53,664 52,224 Deferred income taxes 6,782 2,622 Changes in operating assets and liabilities: Accounts receivable (43,474) (1,325) Fuel inventory 3,495 (2,686) Accounts payable 24,499 (13,356) Taxes payable 13,167 12,752 Other - Net 844 13,065 Net cash provided by operating activities $130,538 $135,690 The accompanying notes are an integral part of these statements. IDAHO POWER COMPANY Consolidated Statements Of Cash Flows Twelve Months Ended September 30, 1997 1996 (Thousands of Dollars) OPERATING ACTIVITIES: Cash received from operations: Retail revenues $484,200 $488,700 Wholesale revenues 140,691 60,947 Other revenues 28,462 22,980 Fuel paid (66,916) (53,401) Purchased power paid (129,227) (65,787) Other operation & maintenance paid (176,132) (167,472) Interest paid (includes long and short-term debt only) (51,730) (56,787) Income taxes paid (41,948) (39,119) Taxes other than income taxes paid (27,317) (21,866) Other operating cash receipts and payments-Net 9,179 11,116 Net cash provided by operating activities 169,262 179,311 FINANCING ACTIVITIES: First mortgage bonds issued 27,000 30,000 PC bond fund requisitions/Other long-term debt 114,720 7,700 Short-term borrowings - Net 25,254 (18,000) Long-term debt retirement (116,370) (20,068) Preferred stock retirement (26,557) (98) Dividends on preferred stock (5,981) (7,968) Dividends on common stock (70,961) (69,929) Other sources/(uses) (326) (2,640) Net cash - financing activities (53,221) (81,003) INVESTING ACTIVITIES: Additions to utility plant (108,528) (82,855) Conservation (2,082) (3,818) Increase in investments (7,014) (14,525) Other 4,907 2,176 Net cash - investing activities (112,717) (99,022) Change in cash and cash equivalents 3,324 (714) Cash and cash equivalents beginning of period 6,931 7,645 Cash and cash equivalents end of period $10,255 $6,931 RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net income $89,785 $97,227 Adjustments to reconcile net income to net cash: Depreciation 71,145 69,496 Deferred income taxes 11,361 7,656 Changes in operating assets and liabilities: Accounts receivable (41,283) (8,158) Fuel inventory 7,613 (3,818) Accounts payable 33,742 10 Taxes payable 2,310 8,255 Interest payable 3,306 2,339 Other - Net (8,717) 6,304 Net cash provided by operating activities $169,262 $179,311 The accompanying notes are an integral part of these statements. IDAHO POWER COMPANY Consolidated Statements Of Capitalization September 30,December 31, 1997 1996 (Thousands of Dollars) COMMON STOCK EQUITY: Common stock $94,031 $94,031 Premium on capital stock 361,759 362,297 Capital stock expense (3,840) (3,842) Retained earnings 240,280 242,088 Total common stock equity 692,230 46.0% 694,574 45.1% PREFERRED STOCK: Cumulative, $100 par value: 4% preferred stock (authorized 215,000 shares; outstanding: 1997-167,885, 1996-169,753) 16,789 16,975 Serial preferred stock 7.68% Series, (authorized and outstanding 150,000 shares) 15,000 15,000 Serial preferred stock, without par value, authorized 3,000,000 shares: 7.07% Series, $100 stated value (authorized and outstanding 250,000 shares) 25,000 25,000 Auction Rate Preferred Series A $100,000 stated value (authorized and outstanding 500 shares) 50,000 50,000 Total preferred stock 106,789 7.1 106,975 6.9 LONG-TERM DEBT: First mortgage bonds: 5.33 % Series due 1998 30,000 30,000 8.65 % Series due 2000 80,000 80,000 6.93 % Series due 2001 30,000 30,000 6.85 % Series due 2002 27,000 27,000 6.40 % Series due 2003 80,000 80,000 8 % Series due 2004 50,000 50,000 9.50 % Series due 2021 75,000 75,000 7.50 % Series due 2023 80,000 80,000 8 3/4% Series due 2027 50,000 50,000 9.52 % Series due 2031 25,000 25,000 Total first mortgage bonds 527,000 527,000 Amount due within one year (30,000) - Net first mortgage bonds 497,000 527,000 Pollution control revenue bonds: 7 1/4% Series due 2008 4,360 4,360 8.30 % Series 1984 due 2014 49,800 49,800 6.05 % Series 1996A due 2026 68,100 68,100 Variable Rate Series 1996B due 2026 24,200 24,200 Variable Rate Series 1996C due 2026 24,000 24,000 Total pollution control revenue bonds 170,460 170,460 REA Notes 1,579 1,632 Amount due within one year (72) (71) Net REA Notes 1,507 1,561 Subsidiary debt 6,766 9,000 American Falls bond guarantee 20,560 20,560 Milner Dam note guarantee 11,700 11,700 Unamortized premium/discount - Net (1,661) (1,731) Total long-term debt 706,332 46.9 738,550 48.0 TOTAL CAPITALIZATION $1,505,351 100.0% $1,540,099 100.0% The accompanying notes are an integral part of these statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF ACCOUNTING POLICIES: Financial Statements In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position as of September 30, 1997 and the consolidated results of operation for the three months, nine months and twelve months ended September 30, 1997 and 1996 and the consolidated cash flows for the nine months and twelve months ended September 30, 1997 and 1996. These financial statements do not contain the complete detail or footnote disclosure concerning accounting policies and other matters which would be included in full year financial statements and, therefore, they should be read in conjunction with the Company's audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. The results of operation for the interim periods are not necessarily indicative of the results to be expected for the full year. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Idaho Energy Resources Company (IERCo); Idaho Utility Products Company (IUPCo); IDACORP, Inc.; Ida-West Energy Company (Ida-West); Stellar Dynamics, Inc. (Stellar); and Idaho Power Resources Corporation (IPRC). All significant intercompany transactions and balances have been eliminated in consolidation. Investments in business entities in which the Company and its subsidiaries do not have control, but have the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. Revenues To match revenues with associated expenses, the Company accrues unbilled revenues for electric services delivered to customers but not yet billed at month-end. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand and highly liquid temporary investments with original maturity dates of three months or less. Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. COMMITMENTS AND CONTINGENT LIABILITIES: Commitments under contracts and purchase orders relating to the Company's program for construction and operation of facilities amounted to approximately $1.7 million at September 30, 1997. The commitments are generally revocable by the Company subject to reimbursement of manufacturers' expenditures incurred and/or other termination charges. The Company is party to various legal claims, actions, and complaints, certain of which involve material amounts. Although the Company is unable to predict with certainty whether or not it will ultimately be successful in these legal proceedings or, if not, what the impact might be, based upon the advice of legal counsel, management presently believes that disposition of these matters will not have a material adverse effect on the Company's financial position, results of operation, or cash flow. 3. REGULATORY ISSUES: The Company has a PCA mechanism that provides for annual adjustments to the rates charged to Idaho retail customers. These adjustments are based on forecasts of net power supply costs, and take effect annually on May 16. The difference between the actual costs incurred and the forecasted costs are deferred, with interest, and trued-up in the next annual rate adjustment. The 1997-8 forecast anticipates above-average hydroelectric generating conditions. These positive conditions reduce the Company's reliance on higher-cost thermal generation and purchased power. This results in forecasted power supply costs and rates being lower than the base amounts established in past regulatory proceedings The Company's 1997 PCA adjustment, combined with the revenue-sharing mechanism described below, decreased rates 0.63% and will decrease revenue during the current rate period by $2.6 million compared to the 1996-7 rate period. Revenue from Idaho retail customers will be $20.6 million less than what would be recovered if the Company was charging the base rates during this rate period. So far in the current rate period, actual power cost expenses have exceeded the forecast. The Company has recorded a regulatory asset of, and decreased expenses by, $9.4 million as of September 30, 1997. The variance that exists at the end of the current rate period will be trued-up in the next annual rate adjustment. Under IPUC Order No. 26216, when the Company's actual earnings in the Idaho jurisdiction in a given year exceed an 11.75 percent return on year-end common equity, the Company will refund 50 percent of the excess at the same time it makes its next PCA adjustment. In 1996, the Company set aside approximately $4.9 million of revenue for the benefit of its Idaho customers. Of this amount, $3.5 million is being used to reduce rates and $1.4 million was applied against regulatory assets. As a result of this order, the Company has provided for a reserve for possible rate refund to customers for 1997. The reserve has been established anticipating that the Company's earnings will exceed the 11.75 percent threshold for the year 1997. 4. FINANCING: The Company currently has a $200,000,000 shelf registration statement that can be used for both First Mortgage Bonds (including Medium Term Notes) and Preferred Stock. In 1996, the Company issued $30,000,000 and $27,000,000 principal amount of Secured Medium Term Notes, due 2001 and 2002, respectively. These transactions have reduced the remaining balance of the shelf registration to $143,000,000 at September 30, 1997. 5. INCOME TAXES: The effective tax rate for the first nine months decreased from 36.7 percent in 1996 to 33.6 percent in 1997. The table below displays a reconciliation between the statutory federal income tax rate of 35.0 percent and the effective tax rates for the nine months ended September 30 (dollars are in thousands): 1997 1996 Amount Rate Amount Rate Computed income taxes based on statutory federal income tax rate $37,717 35.0% $40,000 35.0% Changes in taxes resulting from: Current state income taxes 3,945 3.7 5,195 4.5 Net depreciation 4,268 4.0 3,384 3.0 Investment tax credits restored (2,161) (2.0) (2,110) (1.8) Repair allowance (2,346) (2.2) (2,424) (2.1) Low income housing credit (3,444) (3.2) (1,125) (1.0) Other (1,777) (1.7) (1,029) (0.9) $36,202 33.6% $41,891 36.7% 6. NEW ACCOUNTING PRONOUNCEMENTS: In February 1997, the FASB issued SFAS No. 128, Earnings Per Share. This statement is effective for financial statements for both interim and annual periods ending after December 15, 1997. The objective of the statement is to simplify the computations of earnings per share. The Company does not expect the adoption of this statement to have a significant effect on its earnings per share of common stock. In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income and No. 131, Disclosures about Segments of an Enterprise and Related Information. These statements are effective for financial statements ending after December 15, 1997. SFAS No. 130 establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. SFAS No. 131 redefines standards for the way that public business enterprises report information about operating segments in annual and interim financial statements. The Company is reviewing these two statements to determine their effects on its reporting requirements. INDEPENDENT ACCOUNTANTS' REPORT Idaho Power Company Boise, Idaho We have reviewed the accompanying consolidated balance sheet and statement of capitalization of Idaho Power Company and subsidiaries as of September 30, 1997, and the related consolidated statements of income for the three-, nine- and twelve-month periods ended September 30, 1997 and 1996 and consolidated statements of cash flows for the nine- and twelve-month periods ended September 30, 1997 and 1996. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet and statement of capitalization of Idaho Power Company and subsidiaries as of December 31, 1996, and the related consolidated statements of income, retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated January 31, 1997, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet and statement of capitalization as of December 31, 1996 is fairly stated, in all material respects, in relation to the consolidated balance sheet and statement of capitalization from which it has been derived. DELOITTE & TOUCHE LLP Portland, Oregon October 31, 1997 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS OVERVIEW Idaho Power Company's consolidated financial statements represent the Company and its six wholly-owned subsidiaries: Idaho Energy Resources Company (IERCo); Ida-West Energy Company (Ida-West); IDACORP, Inc.; Idaho Utility Products Company (IUPCo); Idaho Power Resources Corporation (IPRC); and Stellar Dynamics, Inc. (Stellar). This discussion uses the terms Idaho Power and the Company interchangeably to refer to Idaho Power Company and its subsidiaries. FORWARD-LOOKING INFORMATION Certain matters discussed in this report are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements address future plans, objectives, expectations, and events or conditions concerning various matters such as capital expenditures, earnings, litigation, rate and other regulatory matters, liquidity and capital resources, and accounting matters. Actual results in each case could differ materially from those currently anticipated in such statements, by reason of factors including without limitations, electric utility restructuring, including ongoing state and federal activities; future economic conditions; legislation; regulation; competition; and other circumstances affecting anticipated rates, revenues and costs. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement. RESULTS OF OPERATIONS Earnings Per Share and Book Value Earnings per share of common stock were $0.52 for the quarter, an increase of $0.06 (13.0 percent) from the same quarter last year. Year-to-date earnings per share were $1.81, an increase of $0.04 (2.3 percent). Earnings for the twelve months ended September 30, 1997 were $2.25 per share, a decrease of $0.13 (5.5 percent) from the twelve months ended September 30, 1996. The twelve-month earnings represent a 12.2 percent earned return on September 30, 1997 common equity, compared to the 13.2 percent earned through September 30, 1996. At September 30, 1997, the book value per share of common stock was $18.40, compared to $18.06 for the same date in 1996. Electricity Sales The table below displays a breakdown of changes in MWH sales compared to the prior year: Three Nine Twelve Months Ended Months Ended Months Ended (Thousands of MWH) September 30 September 30 September 30 Change % Chg Change % Chg Change % Chg Residential 9 1.1 15 0.5 141 13.7 Commercial 25 3.5 85 4.1 124 4.5 Industrial (3) (0.3) 62 1.8 180 4.1 Irrigation (176) (18.4) (76) (4.8) (81) (4.8) Street Lighting 1 12.6 2 10.3 2 9.3 Total General Business (144) (4.0) 88 0.9 366 2.9 Off-system 3,427 544.9 5,726 181.4 6,150 159.9 Total 3,283 76.9 5,814 44.5 6,516 39.2 The increases in sales to residential and commercial customers were due primarily to an increase in customers served. Residential customers increased 2.8 percent for the quarter, and 3.0 percent for year-to-date and twelve months ended. Commercial customers increased 3.9 percent for the quarter, and 4.2 percent for year-to-date and the twelve months ended. The decrease in sales to irrigation customers was due primarily to increased precipitation, cooler temperatures, and crop selection in 1997. The increase in off-system sales was due primarily to increased trading opportunities within the wholesale power markets and to excellent hydroelectric generating conditions. Revenues The table below displays a breakdown of changes in revenue compared to the prior year: Three Nine Twelve Months Ended Months Ended Months Ended (Thousands of Dollars) September 30 September 30 September 30 Change % Chg Change % Chg Change % Chg General Business ($3,021) (2.4) ($4,376) (1.2) ($4,484) (0.1) Off-System 70,600 498.0 106,659 220.4 113,389 178.6 Other Revenue (57) 0.7 648 2.9 501 1.7 Total $67,522 45.1 $102,931 23.6 $109,406 19.1 The quarterly decrease in general business revenue was due primarily to a $6.0 million decrease in revenue from irrigation customers that resulted from the decrease in MWH sales noted above. This decrease was offset by a $2.6 million decrease in the provision for rate refund discussed below in "Regulatory Settlement." The year-to-date and twelve-month decreases in general business revenue were due primarily to a decrease in revenue from irrigation customers and decreased rates charged to residential, commercial and industrial customers. Irrigation revenue decreased $2.2 million year-to-date and $2.7 million for the twelve months due to the decrease in MWH sales. The rate decreases were a result of the annual rate adjustments discussed below in "Power Cost Adjustment" and "Regulatory Settlement." These decreases were partially offset by increased MWH sales to residential, commercial, and industrial customers. The increase in off-system revenue is due primarily to the increased MWH sales noted above. Expenses Purchased power expenses increased $58.9 million (200.1 percent) for the quarter, $90.9 million (168.1 percent) year-to-date and $92.7 million (137.8 percent) for the twelve months ended. The increase in purchased power was due primarily to increased trading in the wholesale power markets. In addition, strong hydroelectric generating conditions increased purchases from CSPP projects $5.4 million for the quarter, $10.5 million year-to-date and $10.6 million for the twelve months ended. Fuel expenses increased $10.2 million (27.0 percent) year-to-date and $20.7 million (39.1 percent) for the twelve months ended. The increases were due primarily to increased operation of the Jim Bridger, Valmy and Boardman coal-fired power plants when wholesale market prices were favorable. The PCA component of expenses increased $4.4 million for the quarter, and decreased $7.0 million year-to-date and $14.3 million for the twelve months ended. The PCA mechanism reduces expenses when actual power supply costs are above forecast and increases them when power supply costs are below forecast. The PCA is discussed below in "Power Cost Adjustment." Other operation expenses increased $1.6 million (5.0 percent) for the quarter, $4.1 million (4.3 percent) year-to-date and $6.2 million (4.7 percent) for the twelve months ended. The increase for the quarter is due primarily to a $0.7 million increase in wheeling related to increased off-system sales and $0.5 million from development of the Company's marketing capabilities. Year- to-date, marketing expenses increased $2.2 million and wheeling expense increased $1.3 million. For the twelve months ended, power generation expenses increased $2.8 million, marketing increased $2.2 million, and wheeling expense increased $1.8 million. Maintenance expenses increased $4.6 million (14.6 percent) year- to-date and $8.4 million (21.6 percent) for the twelve months ended. Maintenance on the Company's steam power generation facilities increased $2.6 million year-to-date and $3.1 million for the twelve months. This increase was due primarily to more comprehensive overhauls being performed on the thermal plants. Maintenance on transmission and distribution facilities increased $0.9 million year-to-date and $4.1 million for the twelve months due primarily to facilities damaged or destroyed by natural causes. Other Other income decreased $1.4 million (40.4 percent) for the quarter, due primarily to a $0.7 decrease in interest income from temporary investments held in 1996 and to $0.5 million in losses from gas trading operations. Other income decreased $2.3 million (22.5 percent) year-to-date and 4.1 million (28.3 percent) for the twelve months ended. Decreased revenue from Bridger Coal Company reduced other income $1.5 million year-to-date and $1.3 million for the twelve months. Decreased revenue from a large construction project completed in the third quarter of 1996 reduced other income by $0.9 million year-to-date and $1.9 million for the twelve months. Net interest charges increased $2.0 million year-to-date and $2.4 million for the twelve months ended. These increases were primarily the result of the issuance of $57.0 million of medium term notes by the Company in 1996 and of increased borrowings by the Company's subsidiaries. Income taxes decreased $5.7 million (13.6 percent) year-to-date and $6.3 million (11.9 percent) for the twelve months ended. The decreases were due primarily to decreased net income and to increases in affordable housing tax credits, which increased $2.3 million year-to-date and $3.0 million for the twelve months ended. LIQUIDITY AND CAPITAL RESOURCES Cash Flow For the nine months ended September 30, 1997, the Company generated $130.5 million in net cash from operations. After deducting for both common and preferred dividends, net cash generation from operations provided approximately $73.0 million for the Company's construction program and other capital requirements. Cash Expenditures Idaho Power estimates that its cash construction program for 1997 will require approximately $89.0 million. This estimate is subject to revision in light of changing economic, regulatory, environmental, and conservation factors. During the first nine months of 1997, the Company expended approximately $73.5 million for construction. Idaho Power's primary financial commitments and obligations are related to contracts and purchase orders associated with its ongoing construction program. To the extent required, the Company expects to finance these commitments and obligations by using both internally generated funds and externally financed capital. At September 30, 1997, the Company's short-term borrowings totaled $58.0 million. Financing Program The Company currently has a $200,000,000 shelf registration statement that can be used for both First Mortgage Bonds (including Medium Term Notes) and Preferred Stock. In 1996, the Company issued $30,000,000 and $27,000,000 principal amount of Secured Medium Term Notes, due 2001 and 2002, respectively. These transactions have reduced the remaining balance of the shelf registration to $143,000,000 at September 30, 1997. Idaho Power's objective is to maintain capitalization ratios of approximately 45 percent common equity, 5 to 10 percent preferred stock, and the balance in long-term debt. For the twelve-month period ended September 30, 1997, the Company's consolidated pre- tax interest coverage was 3.29 times. OTHER MATTERS Power Cost Adjustment The Company has a PCA mechanism that provides for annual adjustments to the rates charged to Idaho retail customers. These adjustments are based on forecasts of net power supply costs, and take effect annually on May 16. The difference between the actual costs incurred and the forecasted costs are deferred, with interest, and trued-up in the next annual rate adjustment. The 1997-8 forecast anticipates above-average hydroelectric generating conditions. These positive conditions reduce the Company's reliance on higher-cost thermal generation and purchased power. This results in forecasted power supply costs and rates being lower than the base amounts established in past regulatory proceedings The Company's 1997 PCA adjustment, combined with the revenue-sharing mechanism described below, decreased rates 0.63% and will decrease revenue during the current rate period by $2.6 million compared to the 1996-7 rate period. Revenue from Idaho retail customers will be $20.6 million less than what would be recovered if the Company was charging the base rates during this rate period. So far in the current rate period, actual power cost expenses have exceeded the forecast. The Company has recorded a regulatory asset of, and decreased expenses by, $9.4 million as of September 30, 1997. The variance that exists at the end of the current rate period will be trued-up in the next annual rate adjustment. Regulatory Settlement Under the terms of an IPUC Settlement in effect though 1999, when the Company's actual earnings in the Idaho jurisdiction exceeds an 11.75 percent return on year-end common equity, the Company will refund 50 percent of the excess to Idaho's retail ratepayers. In 1996, the Company set aside $4.9 million of revenue for the benefit of its Idaho customers. With the approval of the IPUC, $3.5 million of this amount has been used to reduce customer revenues for the period May 16, 1997 to May 15, 1998. The remaining $1.4 million was retained from sharing and applied against the regulatory asset balance of Idaho demand side conservation expenditures. This amount represents the carrying charge (interest) applied to the Idaho jurisdictional demand side conservation expenditures during 1996. As a result of this order, the Company has provided a reserve for possible rate refund to customers for 1997. The reserve has been established anticipating that the Company's earnings will exceed the 11.75 percent threshold for the year 1997. Nez Perce Lawsuit In 1996, Idaho Power's Board of Directors and the Nez Perce Tribe approved an Agreement between the Company and the Tribe which would resolve a civil lawsuit filed against Idaho Power in December of 1991, in the United States District Court for the District of Idaho, regarding alleged damages to the Tribe's treaty-reserved fishing rights. On March 21, 1997, the Court entered a judgment that incorporated the terms of the Agreement. In accordance with the judgment, the Company paid the Tribe $5 million plus agreed upon interest on March 28, 1997. Additional terms of the judgment require that Idaho Power pay the Tribe $1,625,000 each year for the next four years. Precipitation and Streamflows Idaho Power monitors the effect of precipitation and streamflow conditions on Brownlee Reservoir, the water source for the three Hells Canyon hydroelectric projects. In a typical year, these three projects combine to produce about half of the Company's generated electricity. Inflows into Brownlee result from a combination of precipitation, storage, and ground water conditions. At August 1, 1997, the Company observed that 9.8 MAF of water flowed into Brownlee Reservoir during the April-July runoff period, compared to 8.3 MAF for 1996. This figure represents approximately 204 percent of the 69-year median of 4.81 MAF. Competition and Strategic Planning Competition is increasing in the electric utility industry. The Company is attempting to anticipate and integrate into its operations legislative, regulatory, environmental, competitive, or technological changes. With its low energy production costs, Idaho Power is well positioned to enter a more competitive environment and is taking action to preserve its low-cost competitive advantage. As required by the Idaho legislature, the IPUC has begun an investigation into the unbundling of costs into its various delivery and energy components. The Company believes cost unbundling will allow our customers to compare energy prices and will facilitate the establishment of more accurate price signals for service components. In July 1997 the Company distributed its initial cost unbundling study to the IPUC and other interested parties. The Company, along with other Idaho utilities, will provide revised cost unbundling information to the IPUC by December 1, 1997. The Company further believes that the future of the electric utility industry will be characterized by the right of customers to choose their own electric service provider. To remain successful, Idaho Power must continue to provide value to its shareholders in the face of this new competitive environment. The Company's vision involves three strategies for creating this value: selective and efficient use of capital; an enhanced customer orientation; and innovative, efficient operations. Because future prices for power will be determined more by market forces and less by regulatory administration, the Company must be very selective and efficient in the use and allocation of capital. Idaho Power will invest in improving and expanding its core business, in developing new opportunities beyond its current service territory, and in continuing to develop non-regulated opportunities consistent with the Company's core competencies. Marketing Business Unit The Company formed a Marketing Business Unit in January 1997. This new business unit is responsible for all purchases and sales of energy, market research, and planning and implementation of marketing strategies. It is the intent of the Company to be a competitive energy provider, including both electricity and gas. The Company has opened a gas trading office in Houston, Texas to serve the southern and eastern United States gas markets; the Boise, Idaho office is serving the Northwest and Canadian markets. The Company began trading natural gas in the second quarter of 1997. Trading volumes in the second quarter were minimal, but averaged approximately 150,000 mmbtu's per day in the third quarter. Revenue from gas sales in the third quarter was $29.7 million. The Company expects volumes to continue to increase through 1997. Electricity trading continued to increase in the third quarter, with 4.1 million MWH being sold off-system resulting in $84.8 million in sales. While a portion of the rise in sales is due to excellent hydroelectric conditions, the majority of the increase is due to an increase in trading opportunities within the power markets. The Company will manage the price risk of its energy trading operations using risk management tools including financial products such as swaps, caps, collars and futures instruments. The Company began using NYMEX gas futures contracts in the third quarter and anticipates an increase in natural gas futures and derivatives trading for the purposes of hedging physical positions and taking advantage of basis movements in natural gas prices. At September 30, 1997, the Company's use of financial instruments did not have a material effect on its financial statements. Snohomish County Public Utility District Alliance The Company and Snohomish County Public Utility District formed an alliance to jointly develop and market new products and services under the terms of a MOU signed May 29, 1997. The alliance is intended to provide the Company the opportunity to better serve its existing customers and to maintain its independence. The Company anticipates forming additional alliances when practical. Year 2000 Costs Idaho Power, like most other companies, will be required to modify significant portions of its computer software so that it functions properly in the year 2000. The Company is expending significant resources to ensure that its computer systems are able to deal with transactions that occur in 2000 and beyond. Failure to adequately prepare for these transactions could have a material impact on the Company's ability to conduct its business. Maintenance and modification costs related to this issue will be expensed as incurred, and new software will be capitalized and amortized over its useful life. Officer Changes In July 1997, Idaho Power's Board of Directors named Jan B. Packwood to succeed the retiring Larry R. Gunnoe as President and Chief Operating Officer of the Company, effective September 1, 1997. New Accounting Pronouncements In February 1997, the FASB issued SFAS No. 128, Earnings Per Share. This statement is effective for financial statements for both interim and annual periods ending after December 15, 1997. The objective of the statement is to simplify the computations of earnings per share. The Company does not expect the adoption of this statement to have a significant effect on its earnings per share. In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income and No. 131, Disclosures about Segments of an Enterprise and Related Information. These statements are effective for financial statements ending after December 15, 1997. SFAS No. 130 establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. SFAS No. 131 redefines standards for the way that public business enterprises report information about operating segments in annual and interim financial statements. The Company is reviewing these two statements to determine their effects on its reporting requirements. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit File Number As Exhibit *3(a) 33-00440 4(a)(xiii) Restated Articles of Incorporation of the Company as filed with the Secretary of State of Idaho on June 30, 1989. *3(a)(ii) 33-65720 4(a)(ii) Statement of Resolution Establishing Terms of Flexible Auction Series A, Serial Preferred Stock, Without Par Value (cumulative stated value of $100,000 per share), as filed with the Secretary of State of Idaho on November 5, 1991. *3(a)(iii) 33-65720 4(a)(iii) Statement of Resolution Establishing Terms of 7.07% Serial Preferred Stock, Without Par Value (cumulative stated value of $100 per share), as filed with the Secretary of State of Idaho on June 30, 1993. *3(b) 33-41166 4(b) Waiver resolution to Restated Articles of Incorporation adopted by Shareholders on May 1, 1991. *3(c) 33-00440 4(a)(xiv) By-laws of the Company amended on June 30, 1989, and presently in effect. *4(a)(i) 2-3413 B-2 Mortgage and Deed of Trust, dated as of October 1, 1937, between the Company and Bankers Trust Company and R. G. Page, as Trustees. *4(a)(ii) Supplemental Indentures to Mortgage and Deed of Trust: Number Dated 1-MD B-2-a First July 1, 1939 2-5395 7-a-3 Second November 15, 1943 2-7237 7-a-4 Third February 1, 1947 2-7502 7-a-5 Fourth May 1, 1948 2-8398 7-a-6 Fifth November 1, 1949 2-8973 7-a-7 Sixth October 1, 1951 2-12941 2-C-8 Seventh January 1, 1957 2-13688 4-J Eighth July 15, 1957 2-13689 4-K Ninth November 15, 1957 2-14245 4-L Tenth April 1, 1958 2-14366 2-L Eleventh October 15, 1958 2-14935 4-N Twelfth May 15, 1959 2-18976 4-O Thirteenth November 15, 1960 2-18977 4-Q Fourteenth November 1, 1961 2-22988 4-B-16 Fifteenth September 15, 1964 2-24578 4-B-17 Sixteenth April 1, 1966 2-25479 4-B-18 Seventeenth October 1, 1966 2-45260 2(c) Eighteenth September 1, 1972 2-49854 2(c) Nineteenth January 15, 1974 2-51722 2(c)(i) Twentieth August 1, 1974 2-51722 2(c)(ii) Twenty-first October 15, 1974 2-57374 2(c) Twenty-second November 15, 1976 2-62035 2(c) Twenty-third August 15, 1978 33-34222 4(d)(iii) Twenty-fourth September 1, 1979 33-34222 4(d)(iv) Twenty-fifth November 1, 1981 33-34222 4(d)(v) Twenty-sixth May 1, 1982 33-34222 4(d)(vi) Twenty-seventh May 1, 1986 33-00440 4(c)(iv) Twenty-eighth June 30, 1989 33-34222 4(d)(vii) Twenty-ninth January 1, 1990 33-65720 4(d)(iii) Thirtieth January 1, 1991 33-65720 4(d)(iv) Thirty-first August 15, 1991 33-65720 4(d)(v) Thirty-second March 15, 1992 33-65720 4(d)(vi) Thirty-third April 16, 1993 1-3198 4 Thirty-fourth December 1, 1993 Form 8-K Dated 12/17/93 *4(b) Instruments relating to American Falls bond guarantee. (see Exhibits 10(f) and 10(f)(i)). *4(c) 33-65720 4(f) Agreement to furnish certain debt instruments. *4(d) 33-00440 2(a)(iii) Agreement and Plan of Merger dated March 10, 1989, between Idaho Power Company, a Maine Corporation, and Idaho Power Migrating Corporation. *4(e) 33-65720 4(e) Rights Agreement dated January 11, 1990, between the Company and First Chicago Trust Company of New York, as Rights Agent (The Bank of New York, successor Rights Agent). *10(a) 2-51762 5(a) Agreement, dated April 20, 1973, between the Company and FMC Corporation. *10(a)(i) 2-57374 5(b) Letter Agreement, dated October 22, 1975, relating to agreement filed as Exhibit 10(a). *10(a)(ii) 2-62034 5(b)(i) Letter Agreement, dated December 22, 1976, relating to agreement filed as Exhibit 10(a). *10(a)(iii) 33-65720 10(a) Letter Agreement, dated December 11, 1981, relating to agreement filed as Exhibit 10(a). *10(b) 2-49584 5(b) Agreements, dated September 22, 1969, between the Company and Pacific Power & Light Company relating to the operation, construction and ownership of the Jim Bridger Project. *10(b)(i) 2-51762 5(c) Amendment, dated February 1, 1974, relating to operation agreement filed as Exhibit 10(b). *10(c) 2-49584 5(c) Agreement, dated as of October 11, 1973, between the Company and Pacific Power & Light Company. *10(d) 2-49584 5(d) Agreement, dated as of October 24, 1973, between the Company and Utah Power & Light Company. *10(d)(i) 2-62034 5(f)(i) Amendment, dated January 25, 1978, relating to agreement filed as Exhibit 10(d). *10(e) 33-65720 10(b) Coal Purchase Contract, dated as of June 19, 1986, among the Company, Sierra Pacific Power Company and Black Butte Coal Company. *10(f) 2-57374 5(k) Contract, dated March 31, 1976, between the United States of America and American Falls Reservoir District, and related Exhibits. *10(f)(i) 33-65720 10(c) Guaranty Agreement, dated March 1, 1990, between the Company and West One Bank, as Trustee, relating to $21,425,000 American Falls Replacement Dam Bonds of the American Falls Reservoir District, Idaho. *10(g) 2-57374 5(m) Agreement, effective April 15, 1975, between the Company and The Washington Water Power Company. *10(h) 2-62034 5(p) Bridger Coal Company Agreement, dated February 1, 1974, between Pacific Minerals, Inc., and Idaho Energy Resources Co. *10(i) 2-62034 5(q) Coal Sales Agreement, dated February 1, 1974, between Bridger Coal Company and Pacific Power & Light Company and the Company. *10(i)(i) 33-65720 10(d) Second Restated and Amended Coal Sales Agreement, dated March 7, 1988, among Bridger Coal Company and PacifiCorp (dba Pacific Power & Light Company) and the Company. *10(i)(ii) 1-3198 10(i)(ii) Third Restated and Amended Coal Form 10-Q Sales Agreement, dated January 1, for 3/31/96 1996, among Bridger Coal Company and PacifiCorp (dba Pacific Power & Light Company) and the Company. *10(j) 2-62034 5(r) Guaranty Agreement, dated as of August 30, 1974, with Pacific Power & Light Company. *10(k) 2-56513 5(i) Letter Agreement, dated January 23, 1976, between the Company and Portland General Electric Company. *10(k)(i) 2-62034 5(s) Agreement for Construction, Ownership and Operation of the Number One Boardman Station on Carty Reservoir, dated as of October 15, 1976, between Portland General Electric Company and the Company. *10(k)(ii) 2-62034 5(t) Amendment, dated September 30, 1977, relating to agreement filed as Exhibit 10(k). *10(k)(iii) 2-62034 5(u) Amendment, dated October 31, 1977, relating to agreement filed as Exhibit 10(k). *10(k)(iv) 2-62034 5(v) Amendment, dated January 23, 1978, relating to agreement filed as Exhibit 10(k). *10(k)(v) 2-62034 5(w) Amendment, dated February 15, 1978, relating to agreement filed as Exhibit 10(k). *10(k)(vi) 2-68574 5(x) Amendment, dated September 1, 1979, relating to agreement filed as Exhibit 10(k). *10(l) 2-68574 5(z) Participation Agreement, dated September 1, 1979, relating to the sale and leaseback of coal handling facilities at the Number One Boardman Station on Carty Reservoir. *10(m) 2-64910 5(y) Agreements for the Operation, Construction and Ownership of the North Valmy Power Plant Project, dated December 12, 1978, between Sierra Pacific Power Company and the Company. *10(n)(i)1 1-3198 10(n)(i) The Revised Security Plans for Form 10-K Senior Management Employees and for for 1994 Directors-a non-qualified, deferred compensation plan effective November 30, 1994. *10(n)(ii)1 1-3198 10(n)(ii) The Executive Annual Incentive Plan Form 10-K for senior management employees for 1994 effective January 1, 1995. ______________________ 1 Compensatory Plan *10(n)(iii)1 1-3198 10(n)(iii) The 1994 Restricted Stock Plan for Form 10-K officers and key executives for 1994 effective July 1, 1994. *10(n)(iv)1 1-3198 10(n)(iv) The Revised Security Plans for Form 10-K Senior Management Employees and for 1996 Directors-a non-qualified, deferred compensation plan effective August 1, 1996. *10(o) 33-65720 10(f) Residential Purchase and Sale Agreement, dated August 22, 1981, among the United Stated of American Department of Energy acting by and through the Bonneville Power Administration, and the Company. *10(p) 33-65720 10(g) Power Sales Contact, dated August 25, 1981, including amendments, among the United States of America Department of Energy acting by and through the Bonneville Power Administration, and the Company. *10(q) 33-65720 10(h) Framework Agreement, dated October 1, 1984, between the State of Idaho and the Company relating to the Company's Swan Falls and Snake River water rights. *10(q)(i) 33-65720 10(h)(i) Agreement, dated October 25, 1984, between the State of Idaho and the Company relating to the agreement filed as Exhibit 10(q). *10(q)(ii) 33-65720 10(h)(ii) Contract to Implement, dated October 25, 1984, between the State of Idaho and the Company relating to the agreement filed as Exhibit 10(q). *10(r) 33-65720 10(i) Agreement for Supply of Power and Energy, dated February 10, 1988, between the Utah Associated Municipal Power Systems and the Company. *10(s) 33-65720 10(j) Agreement Respecting Transmission Facilities and Services, dated March 21, 1988 among PC/UP&L Merging Corp. and the Company including a Settlement Agreement between PacifiCorp and the Company. *10(s)(i) 33-65720 10(j)(i) Restated Transmission Services Agreement, dated February 6, 1992, between Idaho Power Company and PacifiCorp. *10(t) 33-65720 10(k) Agreement for Supply of Power and Energy, dated February 23, 1989, between Sierra Pacific Power Company and the Company. *10(u) 33-65720 10(l) Transmission Services Agreement, dated May 18, 1989, between the Company and the Bonneville Power Administration. *10(v) 33-65720 10(m) Agreement Regarding the Ownership, Construction, Operation and Maintenance of the Milner Hydroelectric Project (FERC No. 2899), dated January 22, 1990, between the Company and the Twin Falls Canal Company and the Northside Canal Company Limited. *10(v)(i) 33-65720 10(m)(i) Guaranty Agreement, dated February 10, 1992, between the Company and New York Life Insurance Company, as Note Purchaser, relating to $11,700,000 Guaranteed Notes due 2017 of Milner Dam Inc. ______________________ 1 Compensatory Plan *10(w) 33-65720 10(n) Agreement for the Purchase and Sale of Power and Energy, dated October 16, 1990, between the Company and The Montana Power Company. *10(x) 1-3198 10(x) Agreement for design of substation Form 10-Q dated October 4, 1995, between the for 9/30/95 Company and Micron Technology, Inc. 12 Statement Re: Computation of Ratio of Earnings to Fixed Charges. 12(a) Statement Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. 12(b) Statement Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. 12(c) Statement Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. 15 Letter re: unaudited interim financial information. 27 Financial Data Schedule (b) Reports on Form 8-K. No reports on Form 8-K were filed for the three months ended September 30, 1997. *Previously Filed and Incorporated Herein by Reference SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IDAHO POWER COMPANY (Registrant) Date November 7, 1997 By: /s/ J LaMont Keen J LaMont Keen Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)