COC IDA050511.pdf

Please see page 5 for rating definitions, important disclosures
and required analyst certifications
Wells Fargo Securities, LLC does and seeks to do business with companies
covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of the
report and investors should consider this report as only a single factor in
making their investment decision.

May 5, 2011

Equit Research
IDACORP, Inc.
IDA: Strong Q1 Results & Outlook Intact - Still Waiting on UCAP

• Summary. IDA reported Q1 EPS of $0.60, above our $0.45 estimate and vs.
$0.34 last year. Improved results were primarily driven by the full-year impact
of the mid-10 rate increase and a return to more normal weather. Mgmt
affirmed ’11 EPS guidance of $2.80-2.95. Our ’11-13E EPS remain $2.87, $2.95
and $3.05. We are reiterating our Outperform rating and increasing our
valuation range to $42-43 per share from $41-42 per share.
• Tax Update. IDA continues to await approval of the uniform capitalization
(UCAP) tax settlement from the U.S. Congress Joint Committee on Taxation and
believes the IRS’ recent finalization of the ’09 tax year review increases the
likelihood of a 2011 determination. If the UCAP settlement is approved, Idaho
Power would recognize the $60mm benefit and expects an ongoing benefit of $5-
6mm per year.
• EPS Outlook. IDA affirmed ’11 EPS guidance of $2.80-2.95, which continues
to embed $15mm of accelerated ADITC amortizations and reflects a slightly
improved hydro outlook (8.5-10.5mm MWh vs. 7.5-9.5mm MWh previously).
The company highlighted that if the UCAP agreement is approved in ‘11 then
ADITC amortizations would not be required and pre-sharing EPS could
approximate $3.15-3.25 (under the ’09-11 rate plan earnings above a 10.5% ROE
are shared 50/50 with customers). Our ’11-13E EPS remain $2.87, $2.95 and
$3.05. Idaho Power plans to file an Integrated Resource Plan (IRP) this
summer, which will likely provide insight into potential base rate growth
opportunities.
• Upcoming Rate Filing. Idaho Power filed a notice of intent with the IPUC,
which allows the company to file a general rate case as early as 6/1/11 for new
rates effective 1/1/12. While our EPS estimates beyond ’11 assume traditional
regulatory constructs, we continue to believe Idaho Power may have an
opportunity to extend the existing rate plan, which we estimate represents at
least $0.05-0.10 upside to our ’12E & ‘13E EPS. Approval of the UCAP tax
settlement would increase the likelihood of an extension of the current plan, in
our view.
• Reiterate Outperform. We are attracted to IDA’s healthy balance sheet and
favorable LT growth trends in Idaho Power’s service territory. In addition, we
believe there may be upside potential to our EPS ests should (1) base rate growth
opportunities arise out of the upcoming IRP or (2) current rate constructs are
extended beyond ’11. In addition, valuation remains reasonable as shares trade
at 1-2% discounts to Small-Cap Regulated Electric peers on ’12E & ‘13E EPS.

Valuation Range: $42.00 to $43.00 from $41.00 to $42.00
We value IDA under P/E multiple (apply a 14.5X multiple to our 12E EPS of $2.95)
and dividend discount analyses. Risks to our valuation include project
delays/cancellations, negative regulatory developments and consistently below
average hydro conditions.

Investment Thesis:
We rate shares Outperform. We are attracted to IDA's increasingly constructive
regulatory environment, attractive service territory and strong rate base growth
potential.

Outperform

Sector: Regulated Electric Utilities
Market Weight

Earnings Reported

2010A 2011E 2012E
EPS Curr. Prior Curr. Prior
Q1 (Mar.) $0.34 $0.60 0.45 NE
Q2 (June) 0.82 0.67 0.72 NE
Q3 (Sep.) 1.39 1.22 1.19 NE
Q4 (Dec.) 0.41 0.38 0.50 NE
FY $2.95 $2.87 NC $2.95 NC
CY $2.95 $2.87 $2.95
FY P/E 13.2x 13.6x 13.2x
Rev.(MM)$1,036 $1,069 $1,117
Source: Company Data, Wells Fargo Securities, LLC estimates, and Reuters NA = Not Available, NC = No Change, NE = No Estimate, NM = Not Meaningful V = Volatile, = Company is on the Priority Stock List

Ticker IDA
Price (05/05/2011) $38.91
52-Week Range: $31-40
Shares Outstanding: (MM) 49.4
Market Cap.: (MM) $1,922.2
S&P 500: 1,335.10
Avg. Daily Vol.: 209,468
Dividend/Yield: $1.20/3.1%
LT Debt: (MM) $1,487.3
LT Debt/Total Cap.: 47.7%
ROE: 10.0%
3-5 Yr. Est. Growth Rate: 4.0%
CY 2011 Est. P/E-to-Growth: 3.4x
Last Reporting Date: 05/05/2011
Before Open
Source: Company Data, Wells Fargo Securities, LLC estimates, and Reuters

Neil Kalton, CFA, Senior Analyst
[phone] / [e-mail]
Sarah Akers, CFA, Associate Analyst
[phone] / [e-mail]
Jonathan Reeder, Associate Analyst
[phone] /
[e-mail]

WELLS FARGO SECURITIES, LLC
Utilities EQUITY RESEARCH DEPARTMENT

2

Company Description:
IDACORP (IDA) is the holding company for Idaho Power Company (IPC), a regulated electric utility serving
more than 485,000 customers in southern Idaho, including Boise and surrounding areas, and eastern Oregon.
In addition, IDACORP Financial Services (IFS), a non-utility business, invests in affordable housing tax
credits.

WELLS FARGO SECURITIES, LLC
IDACORP, Inc. EQUITY RESEARCH DEPARTMENT

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WELLS FARGO SECURITIES, LLC
Utilities EQUITY RESEARCH DEPARTMENT

4

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6
6
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%
E
q
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47

4
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%
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45

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%
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D
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9

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So
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c
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:

W
e
l
l
s

F
a
r
g
o

S
e
c
u
r
i
t
i
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s
,

L
L
C

e
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a
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a
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c
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p
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y

f
i
l
i
n
g
s

WELLS FARGO SECURITIES, LLC
IDACORP, Inc. EQUITY RESEARCH DEPARTMENT

5

Required Disclosures

$18.00
$20.00
$22.00
$24.00
$26.00
$28.00
$30.00
$32.00
$34.00
$36.00
$38.00
$40.00
$42.00
$44.00
4/3
0
/
0
8
5/2
8
/
0
8
6/2
5
/
0
8
7/2
3
/
0
8
8/2
0
/
0
8
9/1
7
/
0
8
10
/
1
5
/
0
8
11
/
1
2
/
0
8
12
/
1
0
/
0
8
1/7
/
0
9
2/4
/
0
9
3/4
/
0
9
4/1
/
0
9
4/2
9
/
0
9
5/2
7
/
0
9
6/2
4
/
0
9
7/2
2
/
0
9
8/1
9
/
0
9
9/1
6
/
0
9
10
/
1
4
/
0
9
11
/
1
1
/
0
9
12
/
9
/
0
9
1/6
/
1
0
2/3
/
1
0
3/3
/
1
0
3/3
1
/
1
0
4/2
8
/
1
0
5/2
6
/
1
0
6/2
3
/
1
0
7/2
1
/
1
0
8/1
8
/
1
0
9/1
5
/
1
0
10
/
1
3
/
1
0
11
/
1
0
/
1
0
12
/
8
/
1
0
1/5
/
1
1
2/2
/
1
1
3/2
/
1
1
3/3
0
/
1
1
4/2
7
/
1
1
Se
c
u
r
i
t
y

P
r
i
c
e

IDACORP, Inc. (IDA) 3-yr. Price PerformanceIDACORP, Inc. (IDA) 3-yr. Price Performance
Date
Date Publication Price ($) Rating Code Val. Rng. Low Val. Rng. High Close Price ($)
4/30/2008 Kalton
4/30/2008 NA 2 31.00 33.00 32.44
z 12/18/2008 29.19 2 30.00 32.00 29.24
z 2/19/2009 24.39 2 26.00 27.00 24.39
z 8/6/2009 27.79 2 27.00 29.00 27.79
z 9/10/2009 28.37 2 29.00 30.00 28.37
z 11/10/2009 29.52 2 30.00 31.00 29.52
z 12/14/2009 31.18 2 32.00 33.00 31.54
z 2/25/2010 33.94 2 35.00 36.00 33.89
z 8/6/2010 35.75 2 36.00 37.00 36.05
z 10/29/2010 37.00 2 38.00 39.00 36.80
cz 11/15/2010 36.34 1 40.00 41.00 36.52
z 2/9/2011 38.22 1 41.00 42.00 38.05
Source: Wells Fargo Securities, LLC estimates and Reuters data
Symbol Key Rating Code Key
d Rating Downgrade ‹ Initiation, Resumption, Drop or Suspend 1 Outperform/Buy SR Suspended c Rating Upgrade „ Analyst Change 2 Market Perform/Hold NR Not Rated
z Valuation Range Change ˆ Split Adjustment 3 Underperform/Sell NE No Estimate

Additional Information Available Upon Request

I certify that:
1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or
issuers discussed; and
2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed
by me in this research report.

ƒ Wells Fargo Securities, LLC maintains a market in the common stock of IDACORP, Inc.
ƒ Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for IDACORP, Inc. within the
past 12 months.
ƒ Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in
the next three months from IDACORP, Inc.
ƒ Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from IDACORP, Inc. in the
past 12 months.
WELLS FARGO SECURITIES, LLC
Utilities EQUITY RESEARCH DEPARTMENT

6

ƒ IDACORP, Inc. currently is, or during the 12-month period preceding the date of distribution of the research report was, a client
of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to IDACORP, Inc.
ƒ IDACORP, Inc. currently is, or during the 12-month period preceding the date of distribution of the research report was, a client
of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securities-related services to IDACORP, Inc.
ƒ Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from
IDACORP, Inc. in the past 12 months.
ƒ Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in IDACORP, Inc.

IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and consistently below average
hydro conditions.

Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions.
Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability
and revenue of the firm, which includes, but is not limited to investment banking revenue.
STOCK RATING
1=Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the
next 12 months. BUY
2=Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market
over the next 12 months. HOLD
3=Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12
months. SELL
SECTOR RATING
O=Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months.
M=Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months.
U=Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months.
VOLATILITY RATING
V = A stock is defined as volatile if the stock price has fluctuated by +/-20% or greater in at least 8 of the past 24 months or if the
analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading.

As of: May 5, 2011
45% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Outperform.
Wells Fargo Securities, LLC has provided investment banking
services for 42% of its Equity Research Outperform-rated
companies.
52% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Market Perform.
Wells Fargo Securities, LLC has provided investment banking
services for 47% of its Equity Research Market Perform-rated
companies.
3% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Underperform.
Wells Fargo Securities, LLC has provided investment banking
services for 41% of its Equity Research Underperform-rated
companies.

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course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws.
WELLS FARGO SECURITIES, LLC
IDACORP, Inc. EQUITY RESEARCH DEPARTMENT

7

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About Wells Fargo Securities, LLC
Wells Fargo Securities, LLC is a U.S. broker-dealer registered with the U.S. Securities and Exchange Commission and a member of
the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp.
This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments
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Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2011
Wells Fargo Securities, LLC.

SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE