COC IDANote0500809.pdf

Disclosures and Analyst Certifications can be found in Appendix A.
NEW YORK, NY, MELVILLE, NY, PRINCETON, NJ LOS ANGELES, CA MIAMI, FL LINCOLNSHIRE, IL BOCA RATON, FL

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IIDDAACCOORRPP ((IIDDAA))
1Q09 Financial Results – Reiterating BUY Rating
Highlights
• We are reiterating our BUY on IDA shares. Our price target of $28 per
share is based on a 2009/2010 P/E of 10.9x/10.4x EPS of $2.56/$2.69.
• On May 7, 2009, IDA reported 1Q09 net income of $18.9m or $0.40 per
share compared to a net income of $21.7m or $0.48 per share in 1Q08.
Idaho Power Company reported 1Q09 net income of $19.3m compared to
$21.3m in 1Q08. IDACORP Financial Services (IFS) contributed $141k in
1Q09 compared to $801k in 1Q08. Results include: reallocation of $6.4m
of PCA related costs, FERC fees refund of $1.7m, and life insurance
benefits of $1.6m. The company reaffirmed its 2009 operating/financial
assumptions.
• IDA’s net long capacity position is declining and the company is
developing plans for additional 330 MW of baseload capacity by 2012
($427m). New transmission lines ($1.4-$1.8b) and upgrades to existing
infrastructure are also needed in the future to eliminate bottlenecks,
congestion on the system and support renewables.
• We view these infrastructure projects as meaningful rate base investment
opportunities and a source of long-term incremental regulated earnings
power. We note that the transmission projects have been delayed 1-2
years. The company’s self-build baseload proposal is awaiting PUC
approval (expected in 3Q09).
• The company believes it can finance its 2009 capital expenditures with
internally generated funds and its DRIP program and does not need to
access the capital markets in the near-term. Longer-term infrastructure-
related projects would likely be financed by a combination of internally
generated cash flow and external debt/equity financing.
• Importantly, recently passed Senate Bill 1123 (SB1123) is designed to
allow a utility to file an application with the IPUC for an order specifying in
advance the ratemaking treatments (ROE, depreciation life, etc) that would
apply when the costs of the proposed project are included in a utility’s
revenue requirement. IDA has requested SB 1123 treatment for its
proposed Langley Gulch baseload generation plant.

COMPANY & MARKET DATA
Price $23.70
Price Target, Excl Dividends (YE09) $28.00
52 - Week Range $20.91-$33.89
Mkt. Capitalization (mill) $1,080
Enterprise Value (mill) $2,501
FD Shares Outstanding (mill) 46
Avg. Daily Trading Vol. (000) 549
Book Value per Share (1Q09A) $28.03
Dividend (FY09E) / Yield $1.20 5.1%
FY2007A FY2008A FY2009E
Revenue (mill) $879 $992 $1,059
1Q EPS $0.56 $0.48 $0.40
2Q EPS $0.42 $0.35
3Q EPS $0.62 $1.14
4Q EPS $0.23 $0.26
EPS $1.86 $2.22 $2.56
Prior EPS
Consensus EPS $2.40
P/E 12.7x 10.7x 9.3x
EV/EBITDA 9.8x 8.2x 7.7x
P/FCF -48.8x -48.8x -44.7x
ESTIMATES
Volume in Millions
0.0
1.0
2.0
3.0
$20
$25
$30
$35
$40
Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08
50-day average
200-day average
Chart data: Bloomberg
Brian J. Russo, CFA
646-432-6312
[e-mail]
James Berry
212-409-2685
[e-mail]

Power and Utilities Sector
Company Update

May 8, 2009
BUY
IDACORP (IDA)

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Investment Conclusion
Reiterating BUY Rating
We are reiterating our BUY rating on IDA shares. Our price target of $28 per
share is based on a 2009/2010 P/E of 10.9x/10.4x EPS of $2.56/$2.69.
1Q09 Financial Results
On May 7, 2009, IDA reported 1Q09 net income of $18.9m or $0.40 per share
compared to a net income of $21.7m or $0.48 per share in 1Q08. Idaho Power
Company reported 1Q09 net income of $19.3m compared to $21.3m in 1Q08.
IDACORP Financial Services (IFS) contributed $141k in 1Q09 compared to
$801k in 1Q08.
1Q09 decreased results were primarily attributable to the impact of certain
changes to IPC’s Power Cost Adjustment (PCA) mechanism. In May 2008, the
Idaho Public Utility Commission (IPUC) issued an order that changed the
allocation method of base power supply costs and as a result, 1Q08 PCA
expenses were $6.4m lower than 1Q09. 1Q09 results were also impacted by a
5% decrease in sales volumes due to weather and a decline in commercial and
industrial sales, partially offset by the effects of the Load Growth Adjustment
Rate (LGAR) and Fixed Cost Adjustment (FCA) mechanisms, a $1.7m reduction
in income related to a 2006 FERC fee refund, a $1.7m decrease in operating
income due to a decrease in the Open Access Transmission Tariff (OATT),
partially offset by a $4.1m increase in income from Bridger Coal Company, a
$2.2m increase in other income related to life insurance investments, and a
$1.6m increase in interest income.
In 1Q09, IPC capital expenditures totaled approximately $50m, and the Company
expects utility capital expenditures to be approximately $780-$800m in 2009-
2011.
Company Guidance Unchanged
The company reaffirmed its 2009 operating/financial assumptions including:
maintenance expense of $280-$290m, Idaho Power capex of $220-$230m
(excludes Langley Gulch baseload plant proposal), hydro generation of 6.5-8.5m
MWh, non-regulated subsidiary earnings of $0.0-$3.0m, Idaho Power effective
tax rate of 31-35%, and consolidated tax rate of 24-28%.
2009-2011 capital expenditures total $780-$800m (excluding potential baseload
resource) with the bulk of spending to occur in 2010-2011 and includes siting and
permitting of transmission expansions). The company expects to finance 2009
capital expenditures with operating cash flow, continuous equity program and
debt financing.
Cash and Earnings Expectations
We estimate 2009 EPS of $2.56 per share. Our assumptions include: lower
projected O&M expense, lower depreciation expense, rate relief, and minimal
earnings variability from hydro conditions, partially offset by lower non-regulated
earnings, higher tax rate, and load growth of 1.2%.
We estimate 2010 EPS of $2.69 per share. Our assumptions include: continued
cost controls, rate relief, and load growth of 2%.
IDACORP (IDA)

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Other Highlights
On March 9, 2009, IDA filed an application with the IPUC requesting a Certificate
of Public Convenience and Necessity (CPCN) for the 300MW Langley Gulch
natural gas-fired CCCT power plant. The Company anticipates beginning
construction in summer 2010 at an estimated cost of $427m with an expected in-
service date of December 2012. If approved, IPC expects to spend an additional
$45m to $50m on the project in 2009. IPUC approval is expected 3Q09.
The Gateway West Project is a series of transmission lines between Windstar
and Hemingway that IPC is currently jointly exploring with PacifiCorp (private).
IPC’s share of the project’s estimated cost is expected to be between $500m and
$600m; $40m of initial costs are already included in IPC’s 2009-2011 capital
expenditures, however, the remaining construction costs are not currently
included in the company’s forecast. The initial phase of the project could be
completed by 2014 and the remaining phases could be constructed as demand
requires.
IPC is also exploring options to build a 500kV transmission line from Boardman
to Hemingway. The Boardman-Hemingway Line is estimated to cost $600m and
IPC is currently seeking partners for up to 50% the project. The initial project
phase is estimated to cost $50m and will be funded by IPC. While initial costs
are included in IPC’s 2009-2011 forecast, construction costs for the project are
not currently included. The project’s estimated in-service date has been delayed
from 2013 to 2015 subject to siting, permitting and other regulatory approvals.
Senate Bill 1123 (SB1123) is designed to allow a utility to file an application with
the IPUC for an order specifying in advance the ratemaking treatments (ROE,
depreciation life, etc) that would apply when the costs of the proposed project are
included in a utility’s revenue requirement.
The goal is to provide more certainty for adequate cost recovery and attractive
financing for large-scale projects during a time in which new infrastructure
investment is needed to alleviate constraints on the grid, meet supply needs, and
accommodate new large load requests as various companies consider locating in
Idaho. IDA has requested SB 1123 treatment for its proposed Langley Gulch
baseload generation plant.
Primary Risks
The primary risks of an investment in IDA shares include (but are not limited to);
pending regulatory issues, under-recovery of volatile supply costs including
power, fuel and natural gas, regulatory allowance of the recovery of power costs,
operating costs and capital investments, uncertain stream flow and weather
conditions, legislation/regulation changes, generation plant availability
(unplanned outages), access to capital markets, litigation, pension requirements,
changes in wholesale energy prices, execution risk, hydro relicensing, changes
in regional economy, increased employee related costs. See Appendix A for
additional risk factors.

IDACORP (IDA)

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APPENDIX A: IMPORTANT RESEARCH DISCLOSURES

ANALYST CERTIFICATION
I, Brian Russo, attest that the views expressed in this research report accurately reflect my personal views about the subject security
and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or
views expressed in this research report.
The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon
various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities.

COMPANY BACKGROUND
Headquartered in Boise, Idaho, IDACORP, Inc., (IDA) is a holding company formed in 1998 that is primarily engaged in the
generation, transmission, distribution, sale and purchase of energy. IDA serves over 466,000 retail customers across its 24,000sq
mile service territory in both Idaho and Oregon, and owns approximately 3,267MW of generating capacity. IDA’s principal operating
subsidiary is Idaho Power Company (IPC). The company’s unregulated utilities include IDACORP Financial (IFS) that invests in
affordable housing and real estate and Ida-West Energy Company (Ida-West) that operates small hydroelectric generation projects.
VALUATION METHODOLOGY
We value equities utilizing a multi-faceted approach which includes; sum-of-the-parts, net asset value, discounted cash flow, leading
P/E, EV/EBITDA.
RISKS
On top of normal economic and market risk factors that impact most all equities, Idacorp (IDA) is uniquely at risk to:
Because of IPC’s predominantly hydroelectric generating base and heavy reliance on hydroelectric generation, which can be
adversely affected by weather, reduced hydroelectric generation can reduce revenues and increase costs.
Continuing declines in stream flows and over-appropriation of water in Idaho may reduce hydroelectric generation and revenues and
increase costs.
Load growth in IPC’s service territory due to customer growth and demand for energy exposes it to greater market and operational risk
as increased reliance on purchased power to meet load requirements could increase costs and reduce earnings and cash flows.
IPC’s reliance on coal and natural gas to fuel its generating facilities exposes it to risk of increased market prices, which could
increase costs and reduced earnings.
Changes in temperature and precipitation can reduce power sales and revenues.
Climate change could affect customer demand and hydroelectric generation and lead to restrictions on generation resources.
If Idaho Public Utility Commission (IPUC), the Oregon Public Utility Commission (OPUC) or the Federal Energy Regulatory
Commission (FERC) grant less rate recovery in rate case filings than IPC needs to cover the costs of providing services, financial
results could be adversely impacted and economic expansion may be limited.
Conditions that may be imposed in connection with hydroelectric license renewals may require large capital expenditures and reduce
earnings and cash flows.
The cost of complying with environmental regulations related to air quality, water quality, natural resources and health and safety can
increase capital expenditures and operating costs and reduce earnings and cash flows.
IDACORP and its subsidiaries are subject to costs and other effects of legal and regulatory proceedings, settlements, investigations
and claims, including those that have arisen out of the western energy situation.
IPC’s business is subject to substantial governmental regulation and may be adversely affected by increased costs resulting from, or
liability under, existing or future regulations or requirements.
Increased capital expenditures can significantly affect liquidity.
As a holding company, IDACORP does not have its own operating income and must rely on the upstream cash flows from its
subsidiaries to pay dividends and make debt payments.
A downgrade in IDA’s credit ratings could negatively affect the company’s ability to access capital and increase their cost of
borrowing.
Adverse results of income tax audits could reduce earnings and cash flows.
Employee workforce factors, including the loss or retirement of key personnel, availability of qualified personnel and an aging
workforce, could increase costs and reduce earnings.

IDACORP (IDA)

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STOCK RATING DEFINITIONS
Buy: The stock’s return is expected to exceed 15% over the next twelve months.
Neutral: The stock’s return is expected to be plus or minus 15% over the next twelve months.
Sell: The stock’s return is expected to be negative 15% or more over the next twelve months.

Investment Ratings are determined by the ranges described above at the time of initiation of coverage, a change in risk, or a change
in target price. At other times, the expected returns may fall outside of these ranges because of price movement and/or volatility. Such
interim deviations from specified ranges will be permitted but will become subject to review.

RATINGS DISPERSION AND BANKING RELATIONSHIPS (as of 05/01/09)
Buy 76% (5% are banking clients)
Neutral 22% (0% are banking clients)
Sell 2% (50% are banking clients)

INVESTMENT RATING AND PRICE TARGET HISTORY

IDACORP (IDA)

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COMPANY SPECIFIC DISCLOSURES:
Ladenburg Thalmann & Co. Inc. does not make a market in subject company. Ladenburg Thalmann & Co. Inc. has neither had an
investment banking relationship with, nor received investment banking fees from the subject company in the past 12 months. Neither
the Analyst, nor members of the Analyst’s household own any securities issued by the subject Company.

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