UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Exact name of registrants as
specified
Commission in their charters, state of I.R.S.
File incorporation, address of Employer
Number principal executive offices, Identification
and telephone number Number
1-14465 IDACORP, Inc. 82-0505802
1-3198 Idaho Power Company 82-0130980
1221 W. Idaho Street
Boise, ID 83702-5627
Telephone: (208) 388-2200
State of Incorporation: Idaho
Web site: www.idacorpinc.com
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
Number of shares of Common Stock outstanding as of March
31, 2000:
IDACORP, Inc.: 37,612,351
Idaho Power Company: 37,612,351 shares, all of which are held by
IDACORP, Inc.
INDEX
Page
Definitions 2
Part I. Financial Information:
Item 1. Financial Statements
IDACORP, Inc.:
Consolidated Statements of Income 3
Consolidated Balance Sheets 4-5
Consolidated Statements of Capitalization 6
Consolidated Statements of Cash Flows 7
Consolidated Statements of Comprehensive 8
Income
Notes to Consolidated Financial Statements 9-13
Independent Accountants' Report 14
Idaho Power Company:
Consolidated Statements of Income 15
Consolidated Balance Sheets 16-
17
Consolidated Statements of Capitalization 18
Consolidated Statements of Cash Flows 19
Consolidated Statements of Comprehensive 20
Income
Notes to Consolidated Financial Statements 21-22
Independent Accountants' Report 23
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 24-28
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K 29-32
Signatures 33-34
DEFINITIONS
FASB - Financial Accounting Standards Board
FERC - Federal Energy Regulatory Commission
IPUC - Idaho Public Utilities Commission
kWh - kilowatt-hour
MAF - Million Acre-Feet
MMbtu - Million British Thermal Units
MWh - Megawatt-hour
OPUC - Oregon Public Utility Commission
PCA - Power Cost Adjustment
PUCN - Public Utility Commission of Nevada
REA - Rural Electrification Administration
SFAS - Statement of Financial Accounting
Standards
FORWARD LOOKING INFORMATION
This Form 10-Q contains "forward-looking statements" intended to
qualify for 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
IDACORP, Inc.
Consolidated Statements of Income
Three Months Ended
March 31,
2000 1999
(Thousands of Dollars except
for per share amounts)
REVENUES:
General business $ 123,213 $ 129,692
Off system sales 35,925 37,510
Other revenues 7,195 6,947
Total revenues 166,333 174,149
EXPENSES:
Operation:
Purchased power 12,890 17,888
Fuel expense 24,659 22,020
Power cost adjustment 3,258 9,007
Other 35,236 32,767
Maintenance 9,010 7,883
Depreciation 19,887 19,171
Taxes other than income taxes 5,427 5,584
Total expenses 110,367 114,320
INCOME FROM OPERATIONS 55,966 59,829
OTHER INCOME:
Allowance for equity funds
used during construction 456 157
Gain on sale of asset 14,000 -
Energy marketing activities -
Net 8,523 748
Other - Net 3,430 2,235
Total other income 26,409 3,140
INTEREST EXPENSE AND OTHER:
Interest on long-term debt 13,162 13,395
Other interest 2,697 2,229
Allowance for borrowed funds
used during construction (487) (224)
Preferred dividends of Idaho
Power Company 1,428 1,368
Total interest expense and
other 16,800 16,768
INCOME BEFORE INCOME TAXES 65,575 46,201
INCOME TAXES 23,496 16,700
NET INCOME $ 42,079 29,501
AVERAGE COMMON SHARES
OUTSTANDING (000) 37,612 37,612
EARNINGS PER SHARE OF
COMMON STOCK (basic and
diluted) $ 1.12 $ 0.78
The accompanying notes are an integral part of these
statements.
IDACORP, Inc.
Consolidated Balance Sheets
Assets
March 31, December 31,
2000 1999
(Thousands of Dollars)
ELECTRIC PLANT:
In service (at original cost) $2,738,386 $2,726,026
Accumulated provision for
depreciation (1,091,961) (1,073,722)
In service - Net 1,646,425 1,652,304
Construction work in progress 100,642 91,637
Held for future use 1,742 1,742
Electric plant - Net 1,748,809 1,745,683
INVESTMENTS AND OTHER PROPERTY 154,074 146,019
CURRENT ASSETS:
Cash and cash equivalents 39,693 111,338
Receivables:
Customer 103,700 98,923
Allowance for uncollectible
accounts (1,397) (1,397)
Notes 6,941 4,353
Employee notes 4,298 4,105
Other 6,525 7,764
Energy marketing assets 105,800 37,398
Accrued unbilled revenues 26,206 31,994
Materials and supplies (at
average cost) 31,519 29,611
Fuel stock (at average cost) 8,693 9,329
Prepayments 17,715 16,097
Regulatory assets associated
with income taxes 4,723 893
Total current assets 354,416 350,408
DEFERRED DEBITS:
American Falls and Milner water
rights 31,585 31,585
Company-owned life insurance 39,046 40,480
Regulatory assets associated 208,341 214,782
with income taxes
Regulatory assets - other 47,996 52,759
Other 55,905 55,277
Total deferred debits 382,873 394,883
TOTAL $2,640,172 $2,636,993
The accompanying notes are an integral part of these
statements.
IDACORP, Inc.
Consolidated Balance Sheets
Capitalization and Liabilities
March 31, December 31,
2000 1999
(Thousands of Dollars)
CAPITALIZATION:
Common stock equity:
Common stock without par
value (shares authorized
120,000,000; shares
outstanding - 37,612,351) $ 451,121 $ 451,343
Retained earnings 324,716 300,093
Accumulated other
comprehensive income 1,671 1,534
Total common stock equity 777,508 752,970
Preferred stock of Idaho Power
Company 105,667 105,811
Long-term debt 824,142 821,558
Total capitalization 1,707,317 1,680,339
CURRENT LIABILITIES:
Long-term debt due within one
year 8,125 89,101
Notes payable 11,929 19,757
Accounts payable 127,214 145,737
Energy marketing liabilities 98,245 33,814
Taxes accrued 45,784 21,313
Interest accrued 18,339 19,126
Deferred income taxes 4,723 893
Other 16,021 16,696
Total current liabilities 330,380 346,437
DEFERRED CREDITS:
Regulatory liabilities associated
with deferred investment
tax credits 67,087 67,433
Deferred income taxes 423,677 430,468
Regulatory liabilities
associated with income taxes 34,785 33,817
Regulatory liabilities - other 3,365 3,363
Other 73,561 75,136
Total deferred credits 602,475 610,217
COMMITMENTS AND CONTINGENT
LIABILITIES
TOTAL $2,640,172 $2,636,993
The accompanying notes are an integral part of these
statements.
IDACORP, Inc.
Consolidated Statements of Capitalization
March 31, December 31,
2000 % 1999 %
(ThousandS of Dollars)
COMMON STOCK EQUITY:
Common stock $ 451,121 $ 451,343
Retained earnings 324,716 300,093
Accumulated other comprehensive
income 1,671 1,534
Total common stock equity 777,508 46 752,970 45
PREFERRED STOCK OF IDAHO POWER
COMPANY:
4% preferred stock 15,667 15,811
7.68% Series, serial preferred
stock 15,000 15,000
7.07% Series, serial preferred
stock 25,000 25,000
Auction rate preferred stock 50,000 50,000
Total preferred stock 105,667 6 105,811 6
LONG-TERM DEBT:
First mortgage bonds:
8.65 %Series due 2000 - 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
5.83 %Series due 2005 60,000 60,000
7.2 %Series due 2009 80,000 80,000
Maturing 2021 through 2031
with rates ranging
from 7.5% to 9.52% 230,000 230,000
Total first mortgage bonds 557,000 637,000
Amount due within one year - (80,000)
Net first mortgage bonds 557,000 557,000
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 1,396 1,415
Amount due within one year (77) (76)
Net REA notes 1,319 1,339
American Falls bond guarantee 19,885 19,885
Milner Dam note guarantee 11,700 11,700
Unamortized premium/discount -
Net (1,420) (1,441)
Debt related to investments in
affordable housing with
rates ranging from 6.03% -
8.77% due 2000 to 2010 72,782 71,183
Amount due within one year (8,048) (9,025)
Net affordable housing debt 64,734 62,158
Other subsidiary debt 464 457
Total long-term debt 824,142 48 821,558 49
TOTAL CAPITALIZATION $1,707,317 100 $1,680,339 100
The accompanying notes are an integral part of these
statements.
IDACORP, Inc.
Consolidated Statements of Cash Flows
Three Months Ended
March 31,
2000 1999
(Thousands of Dollars)
OPERATING ACTIVITIES:
Net income $ 42,079 $ 29,501
Adjustments to reconcile net
income to net cash provided
by operating activities:
Unrealized gains from (3,971) (3,199)
energy marketing
activities
Gain on sale of asset (14,000) -
Depreciation and amortization 24,144 23,383
Deferred taxes and investment
tax credits 182 (489)
Accrued PCA costs 3,112 12,185
Change in:
Accounts receivable and
prepayments (7,937) (26,640)
Accrued unbilled revenue 5,788 7,874
Materials and supplies and
fuel stock (1,272) (3,029)
Accounts payable (18,523) (6,715)
Taxes accrued 24,471 19,718
Other current assets and
liabilities (1,462) 939
Other - net (5,681) (6,408)
Net cash provided by operating
activities 46,930 47,120
INVESTING ACTIVITIES:
Additions to utility plant (24,826) (21,637)
Investments in affordable
housing projects (6,817) (2,906)
Proceeds from sale of asset 17,500 -
Investments in Company - owned
life insurance 183 (7,332)
Other - net (551) 5,317
Net cash used in investing
activities (14,511) (26,558)
FINANCING ACTIVITIES:
Proceeds from issuance of:
Long-term debt related to 4,335 -
affordable housing projects
Retirement of:
Long-term debt related to
affordable housing projects (2,736) -
First mortgage bonds (80,000) -
Dividends on common stock (17,456) (17,468)
Decrease in short-term
borrowings (7,828) (11,812)
Other - net (379) (1,279)
Net cash used in financing
activities (104,064) (30,559)
Net decrease in cash and cash
equivalents (71,645) (9,997)
Cash and cash equivalents at
beginning of period 111,338 22,867
Cash and cash equivalents at end
of period $ 39,693 $ 12,870
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period
for:
Income taxes $ 2,424 $ 514
Interest (net of amount
capitalized) $ 16,075 $ 14,844
The accompanying notes are an integral part of these
statements
IDACORP, Inc.
Consolidated Statements of Comprehensive Income
Three Months Ended
March 31,
2000 1999
(Thousands of Dollars)
NET INCOME $ 42,079 $ 29,501
OTHER COMPREHENSIVE INCOME:
Unrealized gains on securities
(net of tax of $90) 138 -
TOTAL COMPREHENSIVE INCOME $ 42,217 $ 29,501
The accompanying notes are an integral part of these statements
IDACORP, Inc.
Notes to Consolidated Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Nature of Business
IDACORP, Inc. (IDACORP or the Company), is a holding company
whose principal operating subsidiary is Idaho Power Company
(IPC). IPC is regulated by the FERC and the state regulatory
commissions of Idaho, Oregon, Nevada and Wyoming and is engaged
in the generation, transmission, distribution, sale and purchase
of electric energy.
Financial Statements
In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments
necessary to present fairly its consolidated financial
position as of March 31, 2000, and its consolidated results
of operations for the three months ended March 31, 2000 and
1999 and cash flows for the three months ended March 31,
2000 and 1999. These financial statements do not contain
the complete detail or footnote disclosure concerning
accounting policies and other matters that would be included
in full year financial statements and therefore they should
be read in conjunction with the Company's audited
consolidated financial statements included in the Company's
Annual Report on Form 10-K for the year ended December 31,
1999. The results of operations for the interim periods are
not necessarily indicative of the results to be expected for
the full year.
Principles of Consolidation
The consolidated financial statements include the accounts
of the Company and its wholly-owned or controlled
subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation. Investments
in business entities in which the Company and its
subsidiaries do not have control, but have the ability to
exercise significant influence over operating and financial
policies, are accounted for using the equity method.
Derivative Financial Instruments
The Company uses financial instruments such as commodity
futures, forwards, options and swaps to manage exposure to
commodity price risk in the electricity and natural gas
markets. The objective of the Company's risk management
program is to mitigate the risk associated with the purchase
and sale of electricity and natural gas as well as to
optimize its energy marketing portfolio. The accounting for
derivative financial instruments that are used to manage
risk is in accordance with the concepts established in SFAS
No. 80, "Accounting for Futures Contracts," American
Institute of Certified Public Accountants Statement of
Position 86-2, "Accounting for Options," and Emerging Issues
Task Force (EITF) 98-10, "Accounting for Contracts Involved
in Energy Trading Activities." EITF 98-10 was adopted
effective January 1, 1999 resulting in an adjustment to net
income that was not material.
Energy trading contracts as defined by EITF 98-10 are
reported at fair value on the balance sheet with the
resulting gains and losses reported on the income statement.
Cash flows from energy trading contracts are recognized in
the statement of cash flows as an operating activity.
Reclassifications
Certain items previously reported for periods prior to March
31, 2000 have been reclassified to conform with the current
period's presentation. Net income was not affected by these
reclassifications.
2. INCOME TAXES
The Company's effective tax rate for the first three months
decreased from 36.2 percent in 1999 to 35.8 percent in 2000.
Reconciliations between the statutory income tax rate and
the effective rates are as follows (in thousands of
dollars):
Three Months Ended March 31,
2000 1999
Amount Rate Amount Rate
Computed income taxes based on
statutory federal income
tax rate $ 22,951 35.0% $ 16,170 35.0 %
Changes in taxes resulting from:
Investment tax credits (771) (1.2) (739) (1.6)
Repair allowance (700) (1.1) (525) (1.1)
Pension expense (479) (0.7) 21 0.1
State income taxes 2,993 4.6 2,438 5.3
Depreciation 1,693 2.6 1,360 2.9
Affordable housing tax credits (2,539) (3.9) (2,272) (4.9)
Preferred dividends of IPC 500 0.8 479 1.0
Other (152) (0.3) (232) (0.5)
Total provision for federal and
state income taxes $ 23,496 35.8% $ 16,700 36.2 %
3. PREFERRED STOCK OF IDAHO POWER COMPANY:
The number of shares of IPC preferred stock outstanding were
as follows:
March 31, December 31,
2000 1999
Cumulative, $100 par value:
4% preferred stock (authorized 215,000
shares) 156,674 158,112
Serial preferred stock, 7.68% Series
(authorized 150,000 shares) 150,000 150,000
Serial preferred stock, cumulative, without
par value; total of 3,000,000 shares
authorized:
7.07% Series, $100 stated value,
(authorized 250,000 shares) 250,000 250,000
Auction rate preferred stock, $100,000
stated value, (authorized 500 shares) 500 500
4. FINANCING:
The Company currently has a $300.0 million shelf
registration statement that can be used for the issuance of
unsecured debt securities and preferred or common stock. At
March 31, 2000, none had been issued.
On March 23, 2000, IPC filed a $200.0 million shelf
registration statement that can be used for first mortgage
bonds (including medium term notes), unsecured debt, or
preferred stock.
On January 1, 2000, IPC redeemed at maturity, $80.0 million
8.65% First Mortgage Bonds using funds from issuance of
$80.0 million Secured Medium Term Notes, Series B, 7.20%
issued on November 23, 1999.
On April 26, 2000, IPC issued $19.9 million of variable rate
bonds due February 1, 2025. Proceeds from this issuance
were used to retire $19.9 million of the American Falls bond
guarantee debt.
5. 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 $8.8 million at March
31, 2000. 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 flows.
6. REGULATORY ISSUES:
Power Cost Adjustment (PCA)
IPC has a PCA mechanism that provides for annual adjustments
to the rates charged to Idaho retail customers. These
adjustments, which take effect annually on May 16, are based
on forecasts of net power supply costs and the true-up of
the prior year's forecast. The difference between the
actual costs incurred and the forecasted costs is deferred,
with interest, and trued-up in the next annual rate
adjustment.
IPC has filed its request to implement its May 16, 2000 rate
adjustment, which, if approved, will increase Idaho general
business customer rates by 9.5 percent. The increase
results from projected below-average hydroelectric
generating conditions. Overall, IPC's annual general
business revenues are expected to increase by $38.0 million
during the 2000-2001 PCA rate period.
For the 1999-2000 PCA rate period, actual power supply costs
have been less than forecast, due to actual hydroelectric
generating conditions being more favorable than forecast.
To account for these lower-than-expected costs, IPC has
recorded a regulatory asset with a credit balance of $5.0
million as of March 31, 2000.
Regulatory Settlement
On March 28, 2000 IPC submitted the 1999 annual earnings
sharing compliance filing to the IPUC. This filing
indicated that there was almost $9.7 million in 1999
earnings and $2.7 million in unused 1998 balances available
for the benefit of IPC's Idaho customers.
On December 30, 1999, IPC filed with the IPUC to set aside
$5.4 million of 1999 revenue sharing dollars to continue
participation in Northwest Energy Efficiency Alliance (NEEA)
for the years 2000 - 2004. The IPUC approved the continued
participation by Order No. 28333, and ordered IPC to set
aside the funds in a reserve until payments are required.
DSM (Conservation) Expenses
IPC has obtained changes to the regulatory treatment of
previously deferred DSM expenses in both Idaho and Oregon.
In Idaho, IPC requested that the IPUC allow for the recovery
of post-1993 DSM expenses and acceleration of the recovery
of DSM expenditures authorized in the last general rate
case. In its Order No. 27660 issued on July 31, 1998, the
IPUC set a new amortization period of 12 years instead of
the 24-year period previously adopted. The IPUC order
reflects an increase in annual Idaho retail revenue
requirements of $3.1 million. A group of industrial
customers appealed the IPUC order to the Idaho Supreme
Court. The Idaho Supreme Court issued its opinion on April
17, 2000 affirming the IPUC order. If the Court does not
receive a petition for reconsideration within 21 days of the
issuance of the opinion, the opinion will be final.
In Oregon, the OPUC authorized a five-year amortization of
the Oregon-allocated share of DSM expenditures incurred
through 1997. The charge commenced in 1998 and recovers
approximately $540,000 per year.
7. NEW ACCOUNTING PRONOUNCEMENT:
In June 1998 the FASB issued SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities." This
statement establishes accounting and reporting standards for
derivative financial instruments and other similar
instruments and for hedging activities. It was originally
effective for fiscal years beginning after June 15, 1999.
In June 1999 the FASB issued SFAS No. 137 "Accounting for
Derivative Instruments and Hedging Activities - Deferral of
the Effective Date of FASB Standard No. 133", which defers
the effective date of SFAS No. 133 one year. The Company is
reviewing SFAS No. 133 to determine its effects on the
Company's financial position and results of operations. The
Company expects to adopt this standard by January 1, 2001.
8. DERIVATIVE FINANCIAL INSTRUMENTS:
The following table shows a summary of the notional amounts
of the Company's forward exposure as of March 31, 2000. The
maximum term related to any forward position is five
years.
Gas Electricity
MMBTU's MWh's
Payable 74,176 7,834
Receivable 77,190 9,094
Swaps 80,678 -
The following table displays the fair values of the
Company's energy marketing assets and liabilities at March
31, 2000, and the average values for the quarter ended March
31, 2000 (in thousands of dollars):
Balance at 1st Quarter
March 31, 2000 Average Balance
Assets Liabilities Assets Liabilities
Gas $ 42,414 $ 42,586 $ 23,618 $ 23,583
Electricity 63,386 55,659 45,670 39,250
Total $105,800 $ 98,245 $ 69,288 $ 62,833
Notional amounts listed above reflect the volume of energy
related to transactions with counterparties, but do not
measure exposure to market or credit risks. The maximum
term detailed above also is not indicative of likely future
cash flows as positions may be offset in the markets at any
time to meet risk management guidelines.
9. INDUSTRY SEGMENT INFORMATION:
IDACORP's principal operating segment is the regulated
utility operations of IPC. IPC's primary business is the
generation, transmission, distribution, purchase and sale of
electricity. Substantially all of the Company's revenue
comes from the sale of electricity and related services,
predominately in the United States.
The Company also markets electricity and natural gas, energy
related products and services, clean-energy products,
including fuel cell and photovoltaic systems, and home
security, internet and satellite television services, and
manages and develops independent power projects.
The following table summarizes IDACORP's segment
information:
IPC Total
Utility Other Enterprise
(Thousands of Dollars)
Three months ended
March 31, 2000:
Revenues $ 166,333 $ - $ 166,333
Net income 24,993 17,086 42,079
Total assets at March
31, 2000 2,317,980 322,192 2,640,172
Three months ended
March 31, 1999:
Revenues $ 174,149 $ - $ 174,149
Net income 26,754 2,747 29,501
Total assets at
December 31, 1999 2,355,907 281,086 2,636,993
INDEPENDENT ACCOUNTANTS' REPORT
IDACORP, Inc.
Boise, Idaho
We have reviewed the accompanying consolidated balance sheet
and statement of capitalization of IDACORP, Inc. and
subsidiaries as of March 31, 2000, and the related
consolidated statements of income, comprehensive income, and
cash flows for the three-month periods ended March 31, 2000
and 1999. 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 of making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the
United States of America, 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
accounting principles generally accepted in the United
States of America.
We have previously audited, in accordance with auditing
standards generally accepted in the United States of
America, the consolidated balance sheet and statement of
capitalization of IDACORP, Inc. and subsidiaries as of
December 31, 1999, and the related consolidated statements
of income, comprehensive income, retained earnings, and cash
flows for the year then ended (not presented herein); and in
our report dated January 31, 2000, 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, 1999 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
Boise, Idaho
April 28, 2000
Idaho Power Company
Consolidated Statements of Income
Three Months Ended
March 31,
2000 1999
(Thousands of Dollars)
REVENUES:
General business $ 123,213 $ 129,692
Off system sales 35,925 37,510
Other revenues 7,195 6,947
Total revenues 166,333 174,149
EXPENSES:
Operation:
Purchased power 12,890 17,888
Fuel expense 24,659 22,020
Power cost adjustment 3,258 9,007
Other 35,236 32,767
Maintenance 9,010 7,883
Depreciation 19,887 19,171
Taxes other than income taxes 5,427 5,584
Total expenses 110,367 114,320
INCOME FROM OPERATIONS 55,966 59,829
OTHER INCOME:
Allowance for equity funds used
during construction 456 157
Energy marketing activities -
Net 7,724 726
Other - Net 4,726 1,952
Total other income 12,906 2,835
INTEREST CHARGES:
Interest on long-term debt 13,132 13,360
Other interest 1,478 2,162
Allowance for borrowed funds
used during construction (487) (224)
Total interest charges 14,123 15,298
INCOME BEFORE INCOME TAXES 54,749 47,366
INCOME TAXES 21,024 16,582
NET INCOME 33,725 30,784
Dividends on preferred stock 1,428 1,368
EARNINGS ON COMMON STOCK $ 32,297 $ 29,416
The accompanying notes are an integral part of these
statements.
Idaho Power Company
Consolidated Balance Sheets
Assets
March 31, December 31,
2000 1999
(Thousands of Dollars)
ELECTRIC PLANT:
In service (at original cost) $2,738,386 $2,726,026
Accumulated provision for
depreciation (1,091,961) (1,073,722)
In service - Net 1,646,425 1,652,304
Construction work in progress 100,629 88,348
Held for future use 1,742 1,742
Electric plant - Net 1,748,796 1,742,394
INVESTMENTS AND OTHER PROPERTY 26,601 117,759
CURRENT ASSETS:
Cash and cash equivalents 6,612 95,038
Receivables:
Customer 90,813 83,412
Allowance for uncollectible (1,397) (1,397)
accounts
Notes 2,856 345
Employee notes 4,298 4,105
Related parties - 195
Other 3,866 7,095
Energy marketing assets 63,385 29,096
Accrued unbilled revenues 26,206 31,994
Materials and supplies (at
average cost) 27,125 28,960
Fuel stock (at average cost) 8,693 9,329
Prepayments 17,556 16,054
Regulatory assets associated
with income taxes 4,723 893
Total current assets 254,736 305,119
DEFERRED DEBITS:
American Falls and Milner water
rights 31,585 31,585
Company-owned life insurance 39,046 40,480
Regulatory assets associated
with income taxes 208,341 214,782
Regulatory assets - other 47,996 52,759
Other 53,061 54,496
Total deferred debits 380,029 394,102
TOTAL $2,410,162 $2,559,374
The accompanying notes are an integral part of these
statements.
Idaho Power Company
Consolidated Balance Sheets
Capitalization and Liabilities
March 31, December 31,
2000 1999
(Thousands of Dollars)
CAPITALIZATION:
Common stock equity:
Common stock, $2.50 par
value (50,000,000 shares
authorized; 37,612,351
shares outstanding) $ 94,031 $ 94,031
Premium on capital stock 362,251 362,203
Capital stock expense (3,816) (3,819)
Retained earnings 266,932 274,181
Accumulated other
comprehensive income 1,671 1,534
Total common stock equity 721,069 728,130
Preferred stock 105,667 105,811
Long-term debt 758,944 821,558
Total capitalization 1,585,680 1,655,499
CURRENT LIABILITIES:
Long-term debt due within one 77 89,101
year
Notes payable 10,950 19,757
Accounts payable 78,549 95,125
Notes and accounts payable to 6,555 10,076
related parties
Energy marketing liabilities 55,660 25,594
Taxes accrued 43,350 21,773
Interest accrued 15,339 19,122
Deferred income taxes 4,723 893
Other 15,537 16,069
Total current liabilities 230,740 297,510
DEFERRED CREDITS:
Regulatory liabilities
associated with deferred
investment tax credits 67,087 67,433
Deferred income taxes 417,208 428,923
Regulatory liabilities
associated with income taxes 34,785 33,817
Regulatory liabilities - other 3,365 3,363
Other 71,297 72,829
Total deferred credits 593,742 606,365
COMMITMENTS AND CONTINGENT
LIABILITIES
TOTAL $2,410,162 $2,559,374
The accompanying notes are an integral part of these
statements.
Idaho Power Company
Consolidated Statements of Capitalization
March 31, December 31,
2000 % 1999 %
(Thousands of Dollars)
COMMON STOCK EQUITY:
Common stock $ 94,031 $ 94,031
Premium on capital stock 362,251 362,203
Capital stock expense (3,816) (3,819)
Retained earnings 266,932 274,181
Accumulated other 1,671 1,534
comprehensive income
Total common stock equity 721,069 45 728,130 44
PREFERRED STOCK:
4% preferred stock 15,667 15,811
7.68% Series, serial 15,000 15,000
preferred stock
7.07% Series, serial 25,000 25,000
preferred stock
Auction rate preferred stock 50,000 50,000
Total preferred stock 105,667 7 105,811 6
LONG-TERM DEBT:
First mortgage bonds:
8.65 % Series due 2000 - 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
5.83 % Series due 2005 60,000 60,000
7.20 % Series due 2009 80,000 80,000
Maturing 2021 through 2031
with rates ranging
from 7.5% to 9.52% 230,000 230,000
Total first mortgage bonds 557,000 637,000
Amount due within one year - (80,000)
Net first mortgage bonds 557,000 557,000
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 24,200 24,200
due 2026
Variable Rate Series 1996C 24,000 24,000
due 2026
Total pollution control 170,460 170,460
revenue bonds
REA notes 1,396 1,415
Amount due within one year (77) (76)
Net REA notes 1,319 1,339
American Falls bond guarantee 19,885 19,885
Milner Dam note guarantee 11,700 11,700
Debt related to investments
in affordable housing with
rates ranging from 6.97% - 71,183
to 8.77% due 2000 to 2010
Amount due within one year - (9,025)
Net affordable housing - 62,158
debt
Other subsidiary debt - 457
Unamortized premium/discount (1,420) (1,441)
- Net
Total long-term debt 758,944 48 821,558 50
TOTAL CAPITALIZATION $1,585,680 100 $1,655,499 100
The accompanying notes are an integral part of these
statements.
Idaho Power Company
Consolidated Statements of Cash Flows
Three Months Ended
March 31,
2000 1999
(Thousands of
Dollars)
OPERATING ACTIVITIES:
Net income $ 33,725 $ 30,784
Adjustments to reconcile net
income to net cash:
Unrealized gains (losses)
from energy marketing
activities (4,223) 623
Depreciation and amortization 22,638 23,339
Deferred taxes and investment
tax credits (34) (294)
Accrued PCA costs 3,112 12,185
Change in:
Accounts receivable and
prepayments (10,435) 30,224
Accrued unbilled revenue 5,788 7,874
Materials and supplies and fuel
stock (484) (2,955)
Accounts payable (14,226) (55,905)
Taxes accrued 22,041 19,813
Other current assets and
liabilities (2,483) 905
Other - net (7,230) (5,416)
Net cash provided by operating
activities 48,189 61,177
INVESTING ACTIVITIES:
Additions to utility plant (24,826) (21,057)
Investments in affordable housing
projects - (2,906)
Investments in Company - owned
life insurance 183 (7,332)
Net cash of affiliates
transferred to parent (4,737) -
Other - net (222) 5,032
Net cash used in investing
activities (29,602) (26,263)
FINANCING ACTIVITIES:
Retirement of first mortgage
bonds (80,000) (877)
Dividends on common stock (17,456) (17,490)
Dividends on preferred stock (1,428) (1,368)
Decrease in short-term (8,017) (27,806)
borrowings
Other - net (112) (21)
Net cash used in financing (107,013) (47,562)
activities
Net decrease in cash and cash (88,426) (12,648)
equivalents
Cash and cash equivalents at 95,038 20,029
beginning of period
Cash and cash equivalents at end of $ 6,612 $ 7,381
period
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Income taxes $ 2,424 $ 9
Interest (net of amount
capitalized) $ 16,026 $ 14,810
Net assets of affiliates
transferred to parent $ 22,090 $ -
The accompanying notes are an integral part of these
statements.
Idaho Power Company
Consolidated Statements of Comprehensive Income
Three Months Ended
March 31,
2000 1999
(Thousands of Dollars)
NET INCOME $33,725 $30,784
OTHER COMPREHENSIVE INCOME:
Unrealized gains on securities 138 -
(net of tax of $90)
TOTAL COMPREHENSIVE INCOME $33,863 $30,784
The accompanying notes are an integral part of these
statements
Idaho Power Company
Notes to the Consolidated Financial Statements
On October 1, 1998, IDACORP, Inc. (IDACORP) became the
parent of Idaho Power Company and subsidiaries (IPC). On
January 1, 2000 IPC's ownership interests in two
subsidiaries were transferred to IDACORP at book value.
IPC's consolidated balance sheet as of December 31, 1999
included total assets of $108 million and net assets of $22
million, and the consolidated income statement for the
quarter ended March 31, 1999 includes net income of $315
thousand attributable to the transferred subsidiaries.
Except as modified below, the Notes to the Consolidated
Financial Statements of IDACORP also contained in this Form
10-Q are incorporated herein by reference insofar as they
relate to IPC.
Note 1 - Summary of Significant Accounting
Policies
Note 3 - Preferred Stock of Idaho Power Company
Note 4 - Financing
Note 5 - Commitments and Contingent Liabilities
Note 6 - Regulatory Issues
Note 7 - New Accounting Pronouncement
2. INCOME TAXES:
IPC's effective tax rate for the first three months
increased from 35.0 percent in 1999 to 38.4 percent in 2000.
Reconciliations between the statutory income tax rate and
the effective rates are as follows (in thousands of
dollars):
Three Months Ended March 31,
2000 1999
Amount Rate Amount Rate
Computed income taxes based on
statutory federal income tax
rate $ 19,162 35.0% $ 16,578 35.0 %
Changes in taxes resulting from:
Investment tax credits (771) (1.4) (739) (1.6)
Repair allowance (700) (1.3) (525) (1.1)
Pension expense (479) (0.9) 21 0.0
State income taxes 2,508 4.6 2,438 5.1
Depreciation 1,693 3.1 1,360 2.9
Affordable housing tax credits - - (2,272) (4.8)
Other (389) (0.7) (279) (0.5)
Total provision for federal and
state income taxes $ 21,024 38.4% $ 16,582 35.0 %
8. DERIVATIVE FINANCIAL INSTRUMENTS:
The following table shows a summary of the notional amounts
of IPC's forward exposure as of March 31, 2000. The maximum
term related to any forward position is five years.
Electricity
MWh's
Payable 7,834
Receivable 9,094
The following table displays the fair value of IPC's energy
marketing assets and liabilities (all electricity) at March
31, 2000, and the average values for the quarter ended March
31, 2000 (in thousands of dollars):
Balance at March 31, 1st Quarter Average
2000 Balance
Assets Liabilities Assets Liabilities
$ 63,385 $ 55,660 $ 45,670 $ 39,250
9. INDUSTRY SEGMENT INFORMATION:
IPC's dominant operating segment is its regulated electric
operations. IPC's non-utility operating segments do not
individually constitute more than 10 percent of enterprise
revenues, net income or total assets, nor in aggregate do
they comprise more than 25 percent of enterprise revenues,
net income or total assets.
IPC's primary business is the generation, transmission,
distribution, purchase and sale of electricity.
Substantially all of IPC's revenue comes from the sale of
electricity and related services, predominately in the
United States. IPC also markets electricity and provides
other energy-related services.
The following table summarizes IPC's segment information for
the regulated electric operations, with a reconciliation to
total enterprise information:
Regulated
Electric Total
Operations Other Enterprise
(Thousands of Dollars)
Three months ended March 31,
2000:
Revenues $ 166,333 $ - $ 166,333
Net income 26,421 7,304 33,725
Total assets at March 31, 2000 2,317,980 91,595 2,409,575
Three months ended March 31,
1999:
Revenues $ 174,149 $ - $ 174,149
Net income 28,122 2,662 30,784
Total assets at December 31,
1999 2,355,907 203,467 2,559,374
INDEPENDENT ACCOUNTANTS' REPORT
Idaho Power Company
Boise, Idaho
We have reviewed the accompanying consolidated balance sheet
and statement of capitalization of Idaho Power Company and
subsidiaries as of March 31, 2000, and the related
consolidated statements of income, comprehensive income, and
cash flows for the three-month periods ended March 31, 2000
and 1999. 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 of making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the
United States of America, 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
accounting principles generally accepted in the United
States of America.
We have previously audited, in accordance with auditing
standards generally accepted in the United States of
America, the consolidated balance sheet and statement of
capitalization of Idaho Power Company and subsidiaries as of
December 31, 1999, and the related consolidated statements
of income, comprehensive income, retained earnings, and cash
flows for the year then ended (not presented herein); and in
our report dated January 31, 2000, 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, 1999 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
Boise, Idaho
April 28, 2000
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERTIONS
In Management's Discussion and Analysis we explain the
general financial condition and results of operations for
IDACORP, Inc. and subsidiaries (IDACORP or the Company) and
for Idaho Power Company and subsidiaries (IPC). IPC, an
electric utility, is IDACORP's principal operating
subsidiary. Except where we indicate otherwise, this
discussion explains the material changes in results of
operations and the financial condition of both the Company
and IPC. This discussion should be read in conjunction with
the accompanying consolidated financial statements of both
IDACORP and IPC.
This discussion updates the discussion that we included in
our Annual Report on Form 10-K for the year ended December
31, 1999. This discussion should be read in conjunction
with the discussion in the annual report.
FORWARD-LOOKING INFORMATION:
In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 (Reform Act), we
are hereby filing cautionary statements identifying
important factors that could cause our actual results to
differ materially from those projected in forward-looking
statements (as such term is defined in the Reform Act) made
by or on behalf of the Company and IPC in this quarterly
report on Form 10-Q, in presentations, in response to
questions or otherwise. Any statements that express, or
involve discussions as to expectations, beliefs, plans,
objectives, assumptions or future events or performance
(often, but not always, through the use of words or phrases
such as "anticipates", "believes", "estimates", "expects",
"intends", "plans", "predicts", projects", "will likely
result", "will continue", or similar expressions) are not
statements of historical facts and may be forward-looking.
Forward-looking statements involve estimates, assumptions,
and uncertainties and are qualified in their entirety by
reference to, and are accompanied by, the following
important factors, which are difficult to predict, contain
uncertainties, are beyond our control and may cause actual
results to differ materially from those contained in forward-
looking statements:
prevailing governmental policies and regulatory
actions, including those of the FERC, the IPUC, the OPUC,
and the PUCN, with respect to allowed rates of return,
industry and rate structure, acquisition and disposal of
assets and facilities, operations and construction of plant
facilities, recovery of purchased power and other capital
investments, and present or prospective wholesale and retail
competition (including but not limited to retail wheeling
and transmission costs);
economic and geographic factors including political and
economic risks;
changes in and compliance with environmental and safety
laws and policies;
weather conditions;
population growth rates and demographic patterns;
competition for retail and wholesale customers;
pricing and transportation of commodities;
market demand, including structural market changes;
changes in tax rates or policies or in rates of
inflation;
changes in project costs;
unanticipated changes in operating expenses and capital
expenditures;
capital market conditions;
competition for new energy development opportunities;
and
legal and administrative proceedings (whether civil or
criminal) and settlements that influence the business and
profitability of the Company.
Any forward-looking statement speaks only as of the date on
which such statement is made, and we undertake no obligation
to update any forward-looking statement to reflect events or
circumstances after the date on which such statement is made
or to reflect the occurrence of unanticipated events. New
factors emerge from time to time and it is not possible for
management to predict all such factors, nor can it assess
the impact of any such factor on the business, or the extent
to which any factor, or combination of factors, may cause
results to differ materially from those contained in any
forward-looking statement.
RESULTS OF OPERATIONS:
Earnings per Share and Book Value of IDACORP Common Stock:
Earnings per share (EPS) of IDACORP common stock (basic and
diluted) was $1.12 for the quarter ended March 31, 2000, an
increase of $0.34 over the same quarter last year. The
increase in EPS was due primarily to two factors, the sale
of the Hermiston Power Project, which increased EPS
approximately $0.22 and improved results from energy
marketing activities, which increased EPS approximately
$0.13. These factors are discussed below in "Other Income."
At March 31, 2000, the book value per share of IDACORP
common stock was $20.67, compared to $20.02 at December 31,
1999.
General Business Revenue
Our general business revenue is dependent on many factors,
including the number of customers we serve, the rates we
charge, and economic and weather conditions (temperature and
precipitation) in our service territory.
Compared to the same period in 1999, the number of general
business customers we served increased 2.8 percent. This
increase was due primarily to economic growth in our service
territory.
Our revenue per MWh decreased 7.8 percent compared to 1999.
Changes in revenue per MWh result primarily from the annual
rate adjustments authorized by regulatory authorities.
These adjustments are discussed below in "PCA" and
"Regulatory Settlement."
Changes in weather conditions did not significantly affect
sales this quarter. Heating degree-days, a common measure
used in the utility industry to analyze demand, were below
1999 levels by 2.5 percent.
Sales (in MWhs) to commercial and industrial customers
increased 5.1 percent for the quarter, due primarily to
economic factors.
The combination of these factors resulted in a decrease in
general business revenue of $6.5 million compared to 1999.
Power Supply
Power supply components of income from operations include
off-system sales and purchased power, fuel, and PCA
expenses. There has been a reduction in both the off-system
sales and purchased power components of power supply,
primarily as a result of less hydro energy available for
sale, general business load growth and increases in thermal
production.
Off-system sales, consisting primarily of long-term sales
contracts and opportunity sales of surplus system energy
decreased $1.6 million from last year and purchased power
expenses decreased $5.0 million.
Fuel expenses increased $2.6 million, due primarily to a 15
percent increase in MWhs generated at our coal-fired plants.
The PCA component of expenses decreased $5.7 million. The
PCA expense component is related to our PCA regulatory
mechanism, which increases expense when actual power supply
costs are below the costs forecasted in the annual PCA
filing, and decreases expense when actual power supply costs
are above the forecast. In both 1999 and 2000, actual power
supply costs were less than forecasted, resulting in PCA
expenses. We discuss the PCA in more detail below in "PCA."
The impact of these changes in net power supply costs is a
decrease in net expense in 2000 of $8.1 million.
Other expenses
Other operating expenses increased $2.5 million. The
increase is due primarily to increases in payroll and
related expenses, electricity wheeling expenses, and
amortization of DSM costs, offset by a reduction in pension
costs for our defined benefit pension plan.
Other income
IDACORP's other income increased for the quarter, due
primarily to the sale of our interest in the Hermiston Power
Project, a 536 MW, gas-fired cogeneration project located
near Hermiston, Oregon. We recorded a pre-tax gain of $14.0
million on this transaction. This item does not affect
IPC's financial statements because Ida-West, the developer
of the Hermiston project, is a subsidiary of IDACORP, and
not IPC.
In addition, improved results from energy marketing
activities increased IDACORP's other income by $7.8 million
and IPC's other income by $7.0 million. This increase is
due to an increase in volumes over last year as well as
favorable market conditions.
Income taxes
Income taxes increased for the quarter, due primarily to the
increases in net income before taxes. IPC's effective tax
rate also increased because of a reduction of affordable
housing tax credits. On January 1, 2000, IPC transferred
its IDACORP Financial Services (IFS) subsidiary to IDACORP.
IFS invests in affordable housing projects for which the tax
credits are earned.
LIQUIDITY AND CAPITAL RESOURCES:
Cash Flow
For the three months ended March 31, 2000, IDACORP generated
$46.9 million in net cash from operations. After deducting
for common stock dividends, net cash generation from
operations provided approximately $29.5 million for our
construction program and other capital requirements.
Cash Expenditures
We estimate that our total cash construction expenditures
for 2000 will be approximately $121 million. This estimate
is subject to revision in light of changing economic,
regulatory, and environmental factors. During the first
three months of 2000, we spent approximately $24.8 million
for construction. Our primary financial commitments and
obligations are related to contracts and purchase orders
associated with ongoing construction programs. To the
extent required, we expect to finance these commitments and
obligations by using both internally generated funds and
externally financed capital. At March 31, 2000, our short-
term borrowings totaled $11.9 million.
Financing Program
IDACORP has a $300.0 million shelf registration statement
that can be used for the issuance of unsecured debt
securities and preferred or common stock. At March 31,
2000, none had been issued.
On March 23, 2000, IPC filed a $200.0 million shelf
registration statement that can be used for both First
Mortgage Bonds (including Medium Term Notes), Preferred
Stock, and unsecured debt. At March 31, 2000, none had been
issued.
On April 26, 2000, IPC issued $19.9 million of variable
rate bonds due February 1, 2025. Proceeds from this
issuance were used to retire $19.9 million of the American
Falls bond guarantee debt.
REGULATORY ISSUES:
Power Cost Adjustment (PCA)
IPC has a PCA mechanism that provides for annual adjustments
to the rates charged to our Idaho retail electric customers.
These adjustments, which take effect annually on May 16, are
based on forecasts of net power supply costs, and the true-
up of the prior year's forecast. The difference between the
actual costs incurred and the forecasted costs is deferred,
with interest, and trued-up in the next annual rate
adjustment.
Our May 16, 1999 rate adjustment reduced Idaho general
business customer rates by 9.2 percent. The decrease was
the result of projected above-average hydroelectric
generating conditions and the true-up of the 1998-99 rate
period. Overall, IPC's annual general business revenues
were expected to decrease by $40 million during the 1999-
2000 PCA rate period.
In April 2000 we filed our proposed May 16, 2000 PCA
adjustment, which, if approved, will increase Idaho general
business customer rates by 9.5 percent. The increase
results from projected below-average hydroelectric
generating conditions (see "Streamflow Conditions" below)
and the true-up of the 1999-2000 rate period. Overall,
IPC's annual general business revenues are expected to
increase by $38 million during the 2000-2001 rate period.
For the 1999 - 2000 PCA rate year, actual power supply costs
have been less than forecast, due to actual hydroelectric
generating conditions being more favorable than forecast.
To account for these lower-than-expected costs, we have
recorded a regulatory asset with a credit balance of $5.0
million as of March 31, 2000.
Regulatory Settlement
IPC had a settlement agreement with the IPUC that expired at
the end of 1999. Under the terms of the settlement, when
earnings in our Idaho jurisdiction exceeded an 11.75 percent
return on year-end common equity, we set aside 50 percent of
the excess for the benefit of our Idaho retail customers.
In March 2000 we submitted our 1999 annual earnings sharing
compliance filing to the IPUC. This filing indicated that
there was almost $9.7 million in 1999 earnings and $2.7
million in unused 1998 reserve balances available for the
benefit of our Idaho customers.
In December 1999 we filed with the IPUC to set aside $5.4
million of 1999 revenue sharing dollars to continue
participation in Northwest Energy Efficiency Alliance (NEEA)
for the years 2000 - 2004. The IPUC approved the continued
participation by Order No. 28333, and ordered IPC to set
aside the funds in a reserve until payments are required.
DSM (Conservation) Expenses
In Idaho, IPC requested that the IPUC allow for the recovery
of post-1993 DSM expenses and acceleration of the recovery
of DSM expenditures authorized in the last general rate
case. In its Order No. 27660 issued on July 31, 1998, the
IPUC set a new amortization period of 12 years instead of
the 24-year period previously adopted. The IPUC order
reflects an increase in annual Idaho retail revenue
requirements of $3.1 million. A group of industrial
customers has appealed the IPUC order to the Idaho Supreme
Court. The Idaho Supreme Court issued its opinion on April
17, 2000 affirming the IPUC order. If the Court does not
receive a petition for reconsideration within 21 days, the
opinion will be final.
OTHER MATTERS:
Energy Marketing
Over the last three years we have been implementing a
strategy to become a competitive energy provider throughout
the western markets. In order to compete as an energy
provider of choice we needed to build a foundation of an
effective and efficient trading operation that competently
participates in the electricity, natural gas and other
related markets. In 1997 we opened natural gas trading
operations in Houston, Texas and in Boise, Idaho. We also
began to expand our electricity marketing, which, along with
natural gas, is included in other income. We have seen
increasing positive results from our strategy. Our natural
gas marketing capability continues to expand as the
electricity and natural gas markets move toward convergence,
and our electricity marketing efforts have resulted in
volume and income increases each year since inception of the
strategy. While building this business capability over the
last three years, we have also been developing appropriate
controls to mitigate the operational, market and credit risks
inherent in the marketing business.
When buying and selling energy, the high volatility of
energy prices can have a significant impact on profitability
if not managed. Also, counterparty creditworthiness is key
to ensuring that transactions entered into withstand
dramatic market fluctuations. To manage these risks while
implementing our business strategy, the Company has a Risk
Management Committee, comprised of Company officers, to
oversee the risk management program as defined in the risk
management policy. The program is intended to minimize
fluctuations in earnings while managing the volatility of
energy prices by mitigating commodity price risk, credit
risk, and other risks related to the energy trading business
Streamflow Conditions
We monitor the effect of streamflow conditions on Brownlee
Reservoir, the water source for our three Hells Canyon
hydroelectric projects. In a typical year, these three
projects combine to produce about half of our generated
electricity.
Inflows into Brownlee result from a combination of
precipitation, storage, and ground water conditions. The
National Weather Service's projected inflows into Brownlee
were 3.9 MAF for the 2000-2001 water year, compared to the
70-year median of 4.9 MAF and 1999's 7.9 MAF.
New Accounting Pronouncement
In June 1998 the FASB issued SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities." This
statement establishes accounting and reporting standards for
derivative financial instruments and other similar
instruments and for hedging activities. In June 1999 the
FASB issued SFAS No. 137 "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Standard No. 133" which defers the
effective date of SFAS No. 133 until fiscal years beginning
after June 15, 2000. We are reviewing SFAS No. 133 to
determine its effects on our financial position and results
of operations. We expect to adopt this statement by January
1, 2001.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit File Number As
Exhibit
*2 333-48031 2 Agreement and Plan of Exchange
between IDACORP, Inc., and IPC
dated as of February 2, 1998.
*3(a) 33-00440 4(a)(xiii) Restated Articles of Incorporation
of IPC as filed with the Secretary
of State of Idaho on June 30, 1989.
*3(a)(i) 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) of IPC, as
filed with the Secretary of State
of Idaho on November 5, 1991.
*3(a)(ii) 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) of IPC, 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 of IPC
adopted by Shareholders on May 1,
1991.
*3(c) 1-3198 3(c) By-laws of IPC amended on September
Form 10-Q 9, 1999, and presently in effect.
for 9/30/99
*3(d) 33-56071 3(d) Articles of Share Exchange, as
filed with the Secretary of State
of Idaho on September 29, 1998.
*3(e) 333-64737 3.1 Articles of Incorporation of
IDACORP, Inc.
*3(f) 333-64737 3.2 Articles of Amendment to Articles
of Incorporation of IDACORP, Inc.
as filed with the Secretary of
State of Idaho on March 9, 1998.
*3(g) 333-00139 3(b) Articles of Amendment to Articles
of Incorporation of IDACORP, Inc.
creating A Series Preferred Stock,
without par value, as filed with
the Secretary of State of Idaho on
September 17, 1998.
*3(h) 1-14465 3(c) Amended Bylaws of IDACORP, Inc. as
Form 10-Q of July 8, 1999.
for 6/30/99
*4(a)(i) 2-3413 B-2 Mortgage and Deed of Trust, dated
as of October 1, 1937, between IPC
and Bankers Trust Company and
R. G. Page, as Trustees.
*4(a)(ii) IPC 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 1, 1993
1-3198 4 Thirty-fourth December 1, 1993
Form 8-K
Dated
12/17/93
*4(b) 33-65720 10(c) Instruments relating to IPC
American Falls bond guarantee. (see
Exhibit 10(c)).
*4(c) 33-65720 4(f) Agreement of IPC 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) 1-14465 4 Rights Agreement, dated as of
Form 8-K September 10, 1998, between
dated IDACORP, Inc. and the Bank of New
September York as Rights Agent.
15,1998
*10(a) 2-49584 5(b) Agreements, dated September 22,
1969, between IPC and Pacific
Power & Light Company relating to
the operation, construction and
ownership of the Jim Bridger
Project.
*10(a)(i) 2-51762 5(c) Amendment, dated February 1, 1974,
relating to operation agreement
filed as Exhibit 10(a).
*10(b) 2-49584 5(c) Agreement, dated as of October 11,
1973, between IPC and Pacific
Power & Light Company.
*10(c) 33-65720 10(c) Guaranty Agreement, dated March 1,
1990, between IPC and West One
Bank, as Trustee, relating to
$21,425,000 American Falls
Replacement Dam Bonds of the
American Falls Reservoir District,
Idaho.
*10(d) 2-62034 5(r) Guaranty Agreement, dated as of
August 30, 1974, between IPC and
Pacific Power & Light Company.
*10(e) 2-56513 5(i) Letter Agreement, dated January 23,
1976, between IPC and Portland
General Electric Company.
*10(e)(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 IPC.
*10(e)(ii) 2-62034 5(t) Amendment, dated September 30,
1977, relating to agreement filed
as Exhibit 10(e).
*10(e)(iii) 2-62034 5(u) Amendment, dated October 31, 1977,
relating to agreement filed as
Exhibit 10(e).
*10(e)(iv) 2-62034 5(v) Amendment, dated January 23, 1978,
relating to agreement filed as
Exhibit 10(e).
*10(e)(v) 2-62034 5(w) Amendment, dated February 15, 1978,
relating to agreement filed as
Exhibit 10(e).
*10(e)(vi) 2-68574 5(x) Amendment, dated September 1, 1979,
relating to agreement filed as
Exhibit 10(e).
*10(f) 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(g) 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
IPC.
*10(h)(i)1 1-3198 10(n)(i) The Revised Security Plan for
Form 10-K Senior Management Employees - a non-
for 1994 qualified, deferred compensation
plan effective August 1, 1996..
*10(h)(ii)1 1-3198 10(n)(ii) The Executive Annual Incentive Plan
Form 10-K for senior management employees of
for 1994 IPC effective January 1, 1995.
*10(h)(iii)1 1-3198 10(n)(iii) The 1994 Restricted Stock Plan for
Form 10-K officers and key executives of
for 1994 IDACORP, Inc. and IPC effective
July 1, 1994.
10(h)(iv)1 1-14465 10(h)(iv) The Revised Security Plan for Board
1-3198 of Directors - a non-qualified,
Form 10-K deferred compensation plan
for 1998 effective August 1, 1996, revised
March 2, 1999.
*10(h)(v)1 14465 10(e) IDACORP, Inc. Non-Employee
Form 10-Q Directors Stock Compensation Plan
for 6/30/99 as of May 17, 1999.
*10(h)(vi) 1-3198 10(y) Executive Employment Agreement
Form 10-K dated November 20, 1996 between IPC
for 1997 and Richard R. Riazzi.
*10(h)(vii) 1-3198 10(g) Executive Employment Agreement
Form 10-Q dated April 12, 1999 between IPC
for 6/30/99 and Marlene Williams.
*10(h)(viii) 1-14465 10(h) Agreement between IDACORP, Inc. and
Form 10-Q Jan B. Packwood, J. LaMont Keen,
for 9/30/99 James C. Miller, Richard Riazzi,
Darrel T. Anderson, Bryan Kearney,
Cliff N. Olson, Robert W. Stahman
and Marlene K. Williams.
*10(h)(ix)1 1-14465 10(h)(ix) IDACORP, Inc. 2000 Long-Term
Form 10-K Incentive and Compensation Plan.
for 1999
*10(i) 33-65720 10(h) Framework Agreement, dated October
1, 1984, between the State of Idaho
and IPC relating to IPC's Swan
Falls and Snake River water rights.
*10(i)(i) 33-65720 10(h)(i) Agreement, dated October 25, 1984,
between the State of Idaho and IPC
relating to the agreement filed as
Exhibit 10(i).
*10(i)(ii) 33-65720 10(h)(ii) Contract to Implement, dated
October 25, 1984, between the State
of Idaho and IPC relating to the
agreement filed as Exhibit 10(i).
*10(j) 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 IPC and the Twin Falls
Canal Company and the Northside
Canal Company Limited.
*10(j)(i) 33-65720 10(m)(i) Guaranty Agreement, dated February
10, 1992, between IPC and New York
Life Insurance Company, as Note
Purchaser, relating to $11,700,000
Guaranteed Notes due 2017 of Milner
Dam Inc.
12 Statement Re: Computation of Ratio
of Earnings to Fixed Charges.
(IDACORP, Inc.)
12(a) Statement Re: Computation of
Supplemental Ratio of Earnings to
Fixed Charges. (IDACORP, Inc.)
12(b) Statement Re: Computation of Ratio
of Earnings to Combined Fixed
Charges and Preferred Dividend
Requirements. (IDACORP, Inc.)
12(c) Statement Re: Computation of
Supplemental Ratio of Earnings to
Combined Fixed Charges and
Preferred Dividend Requirements.
(IDACORP, Inc.)
12(d) Statement Re: Computation of Ratio
of Earnings to Fixed Charges. (IPC)
12(e) Statement Re: Computation of
Supplemental Ratio of Earnings to
Fixed Charges. (IPC)
12(f) Statement Re: Computation of Ratio
of Earnings to Combined Fixed
Charges and Preferred Dividend
Requirements. (IPC)
12(g) Statement Re: Computation of
Supplemental Ratio of Earnings to
Combined Fixed Charges and
Preferred Dividend Requirements.
(IPC)
15 Independent Auditors' Consent.
21 Subsidiaries of IDACORP, Inc. and
IPC.
27(a) Financial Data Schedule for
IDACORP, Inc.
27(b) Financial Data Schedule for IPC.
_______________________________
1 Compensatory plan
(b) Reports on Form 8-K. No reports on Form 8-K were filed
during the three-month period ended March 31, 2000.
* 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.
IDACORP, Inc.
(Registrant)
Date May 5, 2000 By: /s/ J LaMont Keen
J LaMont Keen
Senior Vice President
Administration
and Chief Financial Officer
(Principal Financial Officer)
Date May 5, 2000 By: /s/ Darrel T Anderson
Darrel T Anderson
Vice President Finance
and Treasurer
(Principal Accounting Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
IDAHO POWER COMPANY
(Registrant)
Date May 5, 2000 By: /s/ J LaMont Keen
J LaMont Keen
Senior Vice President
Administration
and Chief Financial Officer
(Principal Financial Officer)
Date May 5, 2000 By: /s/ Darrel T Anderson
Darrel T Anderson
Vice President Finance
and Treasurer
(Principal Accounting Officer)