2012-03-16_IDA PR_Regulatory Disclosures.pdf

Announcement: Moody's Disclosures on Credit Ratings of IDACORP,
Inc.
Global Credit Research - 16 Mar 2012
New York, March 16, 2012 -- The following release represents Moody's Investors Service's summary credit opinion on
IDACORP, Inc. and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in
Moody's ratings or rating rationale for IDACORP, Inc. and its affiliates.
Moody's current ratings on IDACORP, Inc. and its affiliates are:
Senior Unsecured Bank Credit Facility domestic currency ratings of Baa2
LT Issuer Rating ratings of Baa2
Senior Unsec. Shelf domestic currency ratings of (P)Baa2
Commercial Paper domestic currency ratings of P-2
Idaho Power Company
First Mortgage Bonds domestic currency ratings of A2
Senior Secured domestic currency ratings of A2
Senior Secured MTN domestic currency ratings of (P)A2
Senior Unsecured Bank Credit Facility domestic currency ratings of Baa1
LT Issuer Rating ratings of Baa1
Senior Secured Shelf domestic currency ratings of (P)A2
Senior Unsec. Shelf domestic currency ratings of (P)Baa1
Commercial Paper domestic currency ratings of P-2
BACKED Senior Secured domestic currency ratings of A2
Underlying Senior Secured domestic currency ratings of A2
RATINGS RATIONALE
IDA's Baa2 senior unsecured debt rating primarily reflects our assessment of key factors affecting the credit quality of IPC
(Baa1 senior unsecured debt rating), which is its single largest subsidiary. The rating also takes into account the structural
subordination of IDA's obligations in right of payment to those of IPC and its other subsidiaries. IPC's Baa1 senior unsecured
rating reflects its relatively low business risk profile, the improved cost recovery treatment it has been receiving from state
regulators in both jurisdictions and the financial pressures of executing a large capital program. Continued support from
regulators in future general rate cases will be necessary to sustain the company's improved credit metrics, driven more recently
by regulatory support and tax management related inflows. Continued conservative financing strategies will also remain an
important rating driver, as will adequate hydro conditions, since low cost hydro generation contributes over 50% of IDA's owned
generation.
Rating Outlook
IDA's stable rating outlook mirrors the stable outlook for IPC, its principal subsidiary. IPC's stable rating outlook reflects recent
supportive regulation, especially in Idaho, which should help avoid past volatility in key metrics and keep them closer in line with
similarly rated peers. The execution risks associated with ongoing capital spending projects and external financing needs,
coupled with questions regarding the appropriate run-rate for cash flow that has benefitted from one-time tax items are
tempered by assurances of future rate treatment for the Langley Gulch plant, anticipated conservative funding strategies and
future tax credit availability. IPC's outlook and ratings substantially drives those of its parent.
What Could Change the Rating - Up
Since IPC represents the predominance of IDA's holdings, IDA's rating is primarily a function of IPC's rating and outlook. IDA's
outlook could turn to positive if the benefits from recent rate relief for IPC carry through and there are no material changes in
the degree of regulatory supportiveness in IPC's future rate filings. In terms of key metrics, the outlook could turn to positive if
CFO Pre-W/C to debt and CFO Pre-WC plus interest to interest can prove sustainable (absent one-time tax benefits) near its
current high teens level and around 4.0x, respectively.
What Could Change the Rating - Down
The rating could be revised down if IDA's key credit metrics were pressured resulting in CFO pre-WC interest coverage and
CFO pre-WC to debt, below 3.5x and 15%, respectively, for an extended period of time. This degradation in metrics could
occur if the improved regulatory support for IPC wanes; if cash from operations materially decreases; or if recovery
mechanisms do not work as anticipated. A rating downgrade could also occur if the company manages its significant utility
capex program, and negative free cash flow position, in a manner that uses debt more aggressively than current capitalization
ratios suggest.
The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. Please see
the Credit Policy page on www.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
Although these credit ratings have been issued in a non-EU country which has not been recognized as endorsable at this date,
the credit ratings are deemed "EU qualified by extension" and may still be used by financial institutions for regulatory purposes
until 30 April 2012. Further information on the EU endorsement status and on the Moody's office that has issued a particular
Credit Rating is available on www.moodys.com.
For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a
program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For
ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action
on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to
the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the
debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in
a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
Information sources used to prepare each of the ratings are the following: parties involved in the ratings, parties not involved in
the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and
proprietary Moody's Analytics information.
Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes
of issuing these ratings.
Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from
sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is
not an auditor and cannot in every instance independently verify or validate information received in the rating process.
Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.
Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and
for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as
(C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of
more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a
shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.
Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information
on the meaning of each rating category and the definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date
on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data
may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the
information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further
information.
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has
issued the rating.
Ryan Wobbrock
Analyst
Infrastructure Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
William L. Hess
MD - Utilities
Infrastructure Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
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