COC IDA050610.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 6, 2010

Equit Research
IDACORP, Inc.
IDA: 2010 Off To A Slow Start; Maintaining EPS Estimates

• Summary. IDA reported Q1 EPS of $0.34 vs. our estimate of $0.43, consensus
$0.41 and last year $0.40. We are maintaining our 10E EPS of $2.72 despite the
light Q1 as a result of provisions in the Idaho rate settlement which provide
levers to achieve a 9.5% ROE. We are also maintaining our 11E and 12E EPS of
$2.95 and $3.00, though we note modest concerns post-2011 should ’10 and ’11
earnings include significant tax benefits, resulting in lower quality earnings.
Reiterate Market Perform and $35-36 valuation range.
• IDA reported Q1 EPS of $0.34, below our estimate of $0.43, consensus of
$0.41 and $0.40 last year. Q1 was hurt by a 5% decline in sales volumes (mild
weather, economic pressures and conservation measures) as well as a couple
timing issues related to Bridger Coal and intra-period tax allocations. Q1
benefitted from $4.5mm of ADITC amortizations, ~ $0.09 per share.
• ADITC Amortizations. The Idaho rate settlement allows IPC to amortize
ADITCs (which reduce taxes) up to $25mm in both 2010 and 2011, not to exceed
$45mm, in order to achieve an ROE of 9.5%. It appears that the amortizations
are taken on a quarterly basis ($4.5mm in Q1) rather than in 4Q as we previously
thought in order to comply with interim reporting standards, which require IDA
to use an estimated annual effective tax rate (based on estimated annual pre-tax
income and other tax adjustments) to compute quarterly taxes.
• We maintain our 10E EPS of $2.72, consistent with IDA’s $2.65-2.80
guidance. Despite the light Q1, we expect more normal weather and an assumed $25mm base rate increase in mid-2010 will result in improved results for the
balance of the year. Our estimate assumes IDA achieves a 9.5% ROE on year-
end Idaho jurisdictional equity of $1.325B. We have tempered our sales 2010
growth expectations (based largely on poor Q1 weather) and made other minor
tweaks to our model and, as a result, we now assume ADITC amortizations of
$17mm in 2010 vs. $12mm previously.
• Longer-Term Concerns? The Idaho rate settlement provides reasonable
certainty that Idaho Power will earn close to a 9.5% ROE in ’10 and ‘11.
However, we are somewhat concerned that if material ADITC amortizations (or
other tax benefits) are required to achieve the 9.5% ROE in 2010 and 2011, then
2012 could face additional regulatory risk. We expect IDA to file for new base
rates effective 1/1/12 and if ’10 and ’11 earnings are “lower quality,” the required
base rate increase to preserve earnings power in 2012 could be significant.
While we think these concerns may be premature, we will be paying close
attention to tax items as 2010 proceeds.

Valuation Range: $35.00 to $36.00
We value IDA under P/E multiple analysis (apply an 11.5-12.0X multiple to our 12E
EPS of $3.00). Risks to our valuation include project delays or cancellations,
negative regulatory developments and consistently below average hydroelectric
conditions.

Investment Thesis:
We are attracted to IDA's increasingly constructive regulatory environment,
attractive service territory and strong rate base growth potential. Our Market
Perform rating largely reflects valuation considerations.

Market Perform

Sector: Regulated Electric Utilities
Market Weight

Earnings Reported

2009A 2010E 2011E
EPS Curr. Prior Curr. Prior
Q1 (Mar.) $0.40 $0.34 0.43 NE
Q2 (June) 0.58 0.60 0.52 NE
Q3 (Sep.) 1.16 1.28 1.14 NE
Q4 (Dec.) 0.49 0.50 0.63 NE
FY $2.64 $2.72 NC $2.95 NC
CY $2.64 $2.72 $2.95
FY P/E 12.8x 12.5x 11.5x
Rev.(MM)$1,050 $1,082 $1,109
Source: Company Data, Wells Fargo Securities, LLC estimates, and Reuters NA = Not Available, NC = No Change, NE = No Estimate, NM = Not Meaningful

Ticker IDA
Price (05/06/2010) $33.86
52-Week Range: $22-37
Shares Outstanding: (MM) 48.0
Market Cap.: (MM) $1,625.3
S&P 500: 1,128.15
Avg. Daily Vol.: 256,304
Dividend/Yield: $1.20/3.5%
LT Debt: (MM) $1,290.2
LT Debt/Total Cap.: 45.1%
ROE: 10.0%
3-5 Yr. Est. Growth Rate: 4.0%
CY 2010 Est. P/E-to-Growth: 3.1x
Last Reporting Date: 05/06/2010
Before Open
Source: Company Data, Wells Fargo Securities, LLC estimates, and Reuters

Neil Kalton, CFA, Senior Analyst
[phone] / [e-mail]
Sarah Akers, 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
IDACORP, Inc. EQUITY RESEARCH DEPARTMENT

5

Required Disclosures

$18.00
$20.00
$22.00
$24.00
$26.00
$28.00
$30.00
$32.00
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$38.00
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IDACORP, Inc. (IDA) 3-yr. Price PerformanceIDACORP, Inc. (IDA) 3-yr. Price Performance
Date
Date Publication Price ($) Rating Code Val. Rng. Low Val. Rng. High Close Price ($)
5/1/2007 Brothwell
5/1/2007 NA 3 31.00 33.00 34.45
z 5/10/2007 NA 3 30.00 33.00 32.84 z 6/11/2007 NA 3 30.00 32.00 31.78
z 8/9/2007 NA 3 32.00 34.00 34.77
c 8/30/2007 32.29 2 32.00 34.00 32.52
z 11/1/2007 34.89 2 33.00 35.00 33.70
„ 11/14/2007 Kalton
z 11/14/2007 33.79 2 34.00 35.00 33.85
z 2/15/2008 32.04 2 31.00 33.00 31.46
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
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 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.

IDA: Risks to our valuation include project delays or cancellations, negative regulatory developments and consistently below
average hydroelectric 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 6, 2010
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.
50% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Market Perform.
Wells Fargo Securities, LLC has provided investment banking
services for 41% of its Equity Research Market Perform-rated
companies.
5% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Underperform.
Wells Fargo Securities, LLC has provided investment banking
services for 46% of its Equity Research Underperform-rated
companies.

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

7

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Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2010
Wells Fargo Securities, LLC.

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