COC IDA080708.pdf

Please see page 5 for rating definitions, important disclosures and required analyst certifications.
WCM 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.

A publication of
WACHOVIA CAPITAL MARKETS, LLC

Equity Research
IDACORP, Inc.
IDA: Solid Q2 Driven By Idaho Power
Regulatory Improvements On The Horizon?

• On 8/7, IDA reported 2Q EPS of $0.39, above our estimate of $0.33 but below
consensus of $0.42. This compares to $0.41 in the year-ago period. Despite a
roughly $0.12 per share headwind resulting from the implementation of an even
power supply cost distribution methodology (which has a zero net impact over a
12-month period), Idaho Power Company’s (IPC) EPS contribution rose $0.02
largely driven higher retail rates (partially offset by the negative impact of weather
in the quarter) and better (albeit still below average) hydro conditions. Earnings
growth at IPC was more than offset by a lower contribution from IDACORP
Financial Services (IFS) and the parent company.
• IDA Targets PCA in Regulatory Workshops. Having made progress on the test
year in a previous workshop, IDA takes aim at the Power Cost Adjustment
Mechanism this summer to address issues such as the load growth adjustment
mechanism (LGAR) and 90/10 sharing formula. Sustained below average hydro
conditions coupled with strong customer growth in recent years have prevented
IDA from earning its allowed ROE as a result of the PCA design, spurring the
company to seek changes in the regulatory arena. We would view any
improvements to the PCA mechanism positively as they would likely improve both
IDA’s EPS outlook and regulatory risk profile. It is our understanding that there
could be action on the regulatory front by the end of the year.
• 08 Outlook Update. Feeling the impact of a slowing economy, IDA trimmed 08
CapEx to $255-270mm from $270-290mm based on lower expected new customer
connections and timing issues. In addition, mgmt increased the expected effective
tax rate at the consolidated level to 22-26% from 20-24% based on a larger EPS
contribution from Idaho Power than previously expected. Turning to hydro, mgmt
tightened the range of expected hydro generation to 6.5-7.5mm MWh from 6.0-8.0
mm MWh. We are maintaining our 08E-09E EPS of $2.10 and $2.30, and look to
the outcome of the pending rate case and opportunities to invest in regulated
transmission and generation projects as key earnings growth drivers going forward
(along with the aforementioned potential for positive regulatory developments).

Valuation Range: $31 to $33
We value IDA under P/E multiple and dividend discount analysis, which indicate a 12-
18 month valuation range of $31-33 per share. We apply a P/E multiple of 13.5X (a
modest discount to the Regulated peer group to reflect Idaho's below average
regulatory environment) to our estimated 2010 EPS range of $2.40-2.60 and discount
back the resulting share price by one year to derive a 12-18 month share price of
approximately $31. Risk to our valuation analysis include project delays or
cancellations and consistently below average hydroelectric conditions.

Investment Thesis:
We rate shares Market Perform. IDA's EPS growth outlook is strong driven by a
likely material increase in regulated infrastructure, which is needed to accommodate
Idaho's fast-growing population. However, while it appears to be improving, Idaho's
regulatory environment continues to be a concern.

Market Perform
Sector: Regulated Electric Utilities, Market
Weight
August 7, 2008
Earnings Reported

2007A 2008E 2009E
EPS Curr. Prior Curr. Prior
Q1 (Mar.) $0.56 $0.48 A NC NE
Q2 (June) 0.41 0.39 A 0.33 NE
Q3 (Sep.) 0.65 0.88 0.93 NE
Q4 (Dec.) 0.23 0.35 0.36 NE
FY $1.86 $2.10 NC $2.30 NC
CY $1.86 $2.10 $2.30
FY P/E 16.0x 14.1x 12.9x
Rev.(MM) $879.4 $929.4 $980.7
Source: Company Data, Wachovia Capital Markets, LLC estimates, and Reuters NA = Not Available, NC = No Change, NE = No Estimate, NM = Not Meaningful

Ticker IDA
Price (08/07/2008) $29.66
52-Week Range: $28-37
Shares Outstanding: (MM) 45.2
Market Cap.: (MM) $1,341.8
S&P 500: 1,266.07
Dividend/Yield: $1.20/4.0%
LT Debt: (MM) $1,153.5
LT Debt/Total Cap.: 43.3%
ROE: 8.0%
3-5 Yr. Est. Growth Rate: 7.0%
CY 2008 Est. P/E-to-Growth: 2.0x
Last Reporting Date: 08/07/2008
Before Open
Source: Company Data, Wachovia Capital Markets, LLC estimates, and Reuters

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

WACHOVIA CAPITAL MARKETS, LLC
Utilities EQUITY RESEARCH DEPARTMENT

2

Company Description:
IDACORP (IDA) is the holding company for Idaho Power Company (IPC), a regulated electric utility serving
over 475,000 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.

WACHOVIA CAPITAL MARKETS, LLC
IDACORP, Inc. EQUITY RESEARCH DEPARTMENT

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WACHOVIA CAPITAL MARKETS, LLC
IDACORP, Inc. EQUITY RESEARCH DEPARTMENT

5

Required Disclosures

$24.00
$25.00
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IDACORP, Inc. (IDA) 3-yr. Price PerformanceIDACORP, Inc. (IDA) 3-yr. Price Performance
Date
Date Publication Price ($) Rating Code Val. Rng. Low Val. Rng. High Close Price ($) 8/2/2005 Hamlin
8/2/2005 NA 2 28.00 30.00 31.11
„ 2/14/2006 Brothwell
z 5/12/2006 NA 2 30.00 32.00 33.50
z 8/10/2006 NA 2 35.00 38.00 36.93
z 1/19/2007 NA 2 34.00 37.00 37.22
dz 2/16/2007 NA 3 31.00 33.00 35.60
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
Source: Wachovia Capital Markets, 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 Wachovia Capital Markets, 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 Wachovia Capital Markets, LLC or its affiliates received compensation for investment banking services from IDACORP, Inc. in the past 12
months.
ƒ IDACORP, Inc. currently is, or during the 12-month period preceding the date of distribution of the research report was, a client of Wachovia
Capital Markets, LLC. Wachovia Capital Markets, LLC provided investment banking services to IDACORP, Inc..
WACHOVIA CAPITAL MARKETS, 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 Wachovia
Capital Markets, LLC. Wachovia Capital Markets, LLC provided noninvestment banking securities-related 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 Wachovia
Capital Markets, LLC. Wachovia Capital Markets, LLC provided nonsecurities services to IDACORP, Inc..
ƒ Wachovia Capital Markets, LLC received compensation for products or services other than investment banking services from IDACORP, Inc.
in the past 12 months.

Risk to our valuation analysis include project delays or cancellations and consistently below average hydroelectric conditions.

Wachovia Capital Markets, LLC does not compensate its research analysts based on specific investment banking transactions. WCM’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: August 7, 2008
45% of companies covered by Wachovia Capital Markets, LLC
Equity Research are rated Outperform.
Wachovia Capital Markets, LLC has provided investment banking services
for 44% of its Equity Research Outperform-rated companies.
52% of companies covered by Wachovia Capital Markets, LLC
Equity Research are rated Market Perform.
Wachovia Capital Markets, LLC has provided investment banking services
for 32% of its Equity Research Market Perform-rated companies.
4% of companies covered by Wachovia Capital Markets, LLC
Equity Research are rated Underperform.
Wachovia Capital Markets, LLC has provided investment banking services
for 50% of its Equity Research Underperform-rated companies.

Important Disclosure for International Clients
The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain
categories of investors. For certain non-U.S. institutional reader (including readers in the EEA), this report is distributed by
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WACHOVIA CAPITAL MARKETS, LLC
IDACORP, Inc. EQUITY RESEARCH DEPARTMENT

7

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