COC IDA research note 06-02-09.pdf

Please refer to pages 2-3 of this report for detailed disclosure and certification information.

RESEARCH NOTE
Institutional Equity Research

IDACORP, INC.
June 2, 2009 IDA – NYSE

Rating:
NEUTRAL

Price: (6/2/09) $24.51

Price Targets:
12-18 month: $24
5-year: $35

Industry:
Utilities

James L. Bellessa, Jr., CFA
406.791.7230
[e-mail]

Coalition Challenges Proposed Langley Gulch Facility

• Joint motion to stay filed. On May 29th, intervenors in the case of Idaho
Power’s request for a Certificate of Public Convenience and Necessity (CPCN) to
build the Langley Gulch plant (a 300-megawatt combined-cycle generating
facility) filed a joint motion with the Idaho Public Utilities Commission (IPUC)
to stay the proceedings for at least ten months.
• Challenge based on several issues. The group of intervenors asserted in the
filing that “significant and unforeseen events have taken place since Idaho Power
initially filed its application. Any single one of these events would be sufficient
cause… to seek to slow down the company’s forced march to seek Commission
action on its request for a CPCN.” Questions were also raised about Idaho
Power’s power resource mix and the need for the project, given reduced
electricity demand due to the recession.
• Delay could create charges for utility. Although the intervenors expressed
their belief that Idaho Power will have little difficulty in renegotiating the terms
and deadline of its turbine contract with Siemens, a delay or cancellation would
most likely result in penalty charges being incurred by the utility. Depending on
Siemens’ willingness to renegotiate the contract, a disruption in the schedule
could place all or part of Idaho Power’s $9 million deposit in jeopardy (no
additional payments on the turbines are scheduled until September 1st). Although
a complete cancellation of the turbine contract remains unlikely in our view, we
estimate the impact of such a loss to be in the order of ~$0.12 per share.
• Decision expected in mid-June. The deadline for Idaho Power’s response to the
motion is June 12th, with an IPUC decision expected as early as June 15th.
• Maintaining rating and price target. We are maintaining our 12-18 month
target price of $24, or ~10x our 2010 EPS estimate. At the current share price,
we are maintaining a NEUTRAL rating.
D.A. Davidson & Co.
Two Centerpointe Drive, Suite 400 • Lake Oswego, Oregon 97035 • [phone] • [phone] • www.dadavidson.com
Copyright D.A. Davidson & Co., 2009. All rights reserved.
2
Required Disclosures
D.A. Davidson & Co. expects to receive, or intends to seek, compensation for investment banking services from this company in the
next three months.
D.A. Davidson & Co. is a full service investment firm that provides both brokerage and investment banking services. James L.
Bellessa, Jr., CFA, the research analyst principally responsible for the preparation of this report, will receive compensation that is
based upon (among other factors) D.A. Davidson & Co.’s investment banking revenue. However, D.A. Davidson & Co.’s analysts are
not directly compensated for involvement in specific investment banking transactions.
I, James L. Bellessa, Jr., CFA, attest that (i) all the views expressed in this research report accurately reflect my personal views about
the common stock of the subject company, and (ii) no part of my compensation was, is, or will be, directly or indirectly, related to the
specific recommendations or views expressed in this report.

Ratings Information

D.A. Davidson & Co. Ratings Buy Neutral Underperform
Risk adjusted return potential Over 15% total return
expected on a risk adjusted
basis over next 12-18 months
>0-15% return potential
on a risk adjusted basis
over next 12-18 months
Likely to remain flat or lose
value on a risk adjusted basis
over next 12-18 months
Distribution of Ratings (as of 3/31/09) Buy Hold Sell
Corresponding Institutional Research Ratings Buy Neutral Underperform
and Distribution 47% 47% 6%
Corresponding Private Client Research Ratings Outperform Market Perform Underperform
and Distribution 86% 9% 5%
Distribution of Combined Ratings 51% 44% 6%
Distribution of companies from whom D.A. Davidson & Co. has received compensation for investment banking services in last 12 mos.
Institutional Coverage 2% 3% 9%
Private Client Coverage 0% 0% 0%
Distribution of Combined Investment Banking 2% 3% 8%

D.A. Davidson & Co.’s Institutional Research Rating Scale (maintained since 7/9/02): Buy, Neutral, Underperform
D.A. Davidson & Co.
Two Centerpointe Drive, Suite 400 • Lake Oswego, Oregon 97035 • [phone] • [phone] • www.dadavidson.com
Copyright D.A. Davidson & Co., 2009. All rights reserved.
3
Target prices are our Institutional Research Department’s evaluation of price potential over the next 12-18 months and 5 years, based
upon our assessment of future earnings and cash flow, comparable company valuations, growth prospects and other financial criteria.
Certain risks may impede achievement of these price targets including, but not limited to, broader market and macroeconomic
fluctuations and unforeseen changes in the subject company’s fundamentals or business trends.

Other Disclosures

Information contained herein has been obtained by sources we consider reliable, but is not guaranteed and we are not soliciting any
action based upon it. Any opinions expressed are based on our interpretation of data available to us at the time of the original
publication of the report. These opinions are subject to change at any time without notice. Investors must bear in mind that inherent
in investments are the risks of fluctuating prices and the uncertainties of dividends, rates of return and yield. Investors should also
remember that past performance is not necessarily an indicator of future performance and D.A. Davidson & Co. makes no guarantee,
express or implied, as to future performance. Investors should note this report was prepared by D.A. Davidson & Co.’s Institutional
Research Department for distribution to D.A. Davidson & Co.’s institutional investor clients and assumes a certain level of investment
sophistication on the part of the recipient. Readers, who are not institutional investors or other market professionals, should seek the
advice of their individual investment advisor for an explanation of this report’s contents, and should always seek such advisor’s advice
before making any investment decisions. Further information and elaboration will be furnished upon request.