IDA022312.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.

February 23, 2012

Equit Research
IDACORP, Inc.
IDA: No Change To EPS Ests Following Solid 2012 Guidance
Transmission Projects Key To LT Growth--Reiterate Market Perform

• Summary. IDA initiated 2012 EPS guidance of $3.00-3.15. We are maintaining
our EPS estimates and reiterating our Market Perform rating and $44-45
valuation range. IDA’s attractive service territory, increasingly constructive
regulation, near-term earnings visibility and solid financial position pique our
interest. We remain on the sidelines due to valuation considerations and
lingering uncertainty around the timing of major transmission projects.
• 2012 Outlook. IDA initiated 2012 EPS guidance of $3.00-3.15 and laid out
Idaho Power (IPC) O&M expectations of $325-335MM, IPC capex of $230-
240MM, and expected IPC hydro generation of 7.5-9.5MM MWh (versus annual
median of 8.6MM MWh). The guidance includes an estimated use of
accumulated deferred investment tax credits (ADITCs) of less than $5MM. Our
2012E EPS remains $3.05 and does not assume use of any ADITCs.
• Post-2012. Our 2013-16E EPS are $3.20, $3.30, $3.35, and $3.45. We assume
IPC amortizes $17.5MM ADITCs in 2013 and $21MM in 2014. As a reminder,
IPC’s rate settlement allows it to accelerate the amortization of $45MM of
ADITC during the period 2012-14 in order to achieve a 9.5% ROE on year-end
Idaho-jurisdictional equity. Our 2015 and 2016 EPS estimates are based on an
assumed return to a more-traditional rate structure.
• Quick Thoughts. We are encouraged that IPC is able to earn near the 9.5%
ROE without meaningful ADITC usage. This speaks to the regulatory improvements IPC has secured over the past several years. Separately, we
continue to pay close attention to commentary around major transmission
projects as they represent the next leg of growth following the online of Langley
Gulch in mid-2012. Our model assumes Boardman-to-Hemingway (B2H) and
Gateway West construction begin around mid-2014 and mid-2015, respectively.
The ultimate timing and capex for projects could affect our 2015-16E EPS.
• Reiterate Market Perform. We are attracted to IDA’s increasingly
constructive regulatory compacts, solid balance sheet, and cash flow outlook
including no external equity needs (outside of the DRIP and employee plans) for
the foreseeable future, near-term earnings visibility, and favorable longer-term
growth trends in IPC’s footprint. Our Market Perform rating reflects valuation
considerations and lingering uncertainty around the timing of major
transmission projects. In addition, IDA’s 3.2% dividend yield is below the peer
group median of 4.3%--that said, we project annual dividend increases of 10%
through 2016.

Valuation Range: $44.00 to $45.00
We value IDA under P/E multiple (14.0X multiple on our 13E EPS of $3.20),
dividend discount and residual income analyses. Risks to our valuation include
project delays/cancellations, negative regulatory developments and economic
weakness.

Investment Thesis:
We are attracted to IDA's increasingly constructive regulatory environment and
attractive service territory. Our neutral rating reflects valuation considerations.

Market Perform

Sector: Regulated Electric Utilities
Market Weight

Earnings Reported

2011A 2012E 2013E
EPS Curr. Prior Curr. Prior
Q1 (Mar.) $0.60 $0.60 NC NE
Q2 (June) 0.42 0.56 NC NE
Q3 (Sep.) 2.16 1.48 NC NE
Q4 (Dec.) 0.18 0.40 NC NE
FY $3.36 $3.05 NC $3.20 NC
CY $3.36 $3.05 $3.20
FY P/E 12.3x 13.6x 12.9x
Rev.(MM)$1,027 $1,136 $1,172
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 (02/22/2012) $41.40
52-Week Range: $33-43
Shares Outstanding: (MM) 49.8
Market Cap.: (MM) $2,061.7
S&P 500: 1,357.66
Avg. Daily Vol.: 155,069
Dividend/Yield: $1.32/3.2%
LT Debt: (MM) $1,488.6
LT Debt/Total Cap.: 46.5%
ROE: 10.0%
3-5 Yr. Est. Growth Rate: 4.0%
CY 2012 Est. P/E-to-Growth: 3.4x
Last Reporting Date: 02/22/2012
Before Open
Source: Company Data, Wells Fargo Securities, LLC estimates, and Reuters

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

4

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W
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F
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S
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c
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,

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f
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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
$46.00
$48.00
2/1
8
/
0
9
3/1
8
/
0
9
4/1
5
/
0
9
5/1
3
/
0
9
6/1
0
/
0
9
7/8
/
0
9
8/5
/
0
9
9/2
/
0
9
9/3
0
/
0
9
10
/
2
8
/
0
9
11
/
2
5
/
0
9
12
/
2
3
/
0
9
1/2
0
/
1
0
2/1
7
/
1
0
3/1
7
/
1
0
4/1
4
/
1
0
5/1
2
/
1
0
6/9
/
1
0
7/7
/
1
0
8/4
/
1
0
9/1
/
1
0
9/2
9
/
1
0
10
/
2
7
/
1
0
11
/
2
4
/
1
0
12
/
2
2
/
1
0
1/1
9
/
1
1
2/1
6
/
1
1
3/1
6
/
1
1
4/1
3
/
1
1
5/1
1
/
1
1
6/8
/
1
1
7/6
/
1
1
8/3
/
1
1
8/3
1
/
1
1
9/2
8
/
1
1
10
/
2
6
/
1
1
11
/
2
3
/
1
1
12
/
2
1
/
1
1
1/1
8
/
1
2
2/1
5
/
1
2
Se
c
u
r
i
t
y

P
r
i
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e

ID ACORP, Inc. (IDA) 3-yr. Price PerformanceIDACOR P, Inc. (ID A) 3-yr. Price Performance
Date
Date Publication Price ($) Rating Code Val. Rng. Low Val. Rng. High Close Price ($) 2/18/2009 Kalton 2/18/2009 NA 2 30.00 32.00 25.63 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
z 5/5/2011 38.91 1 42.00 43.00 38.91
z 7/19/2011 39.83 1 43.00 44.00 39.84
z 8/4/2011 36.47 1 41.00 42.00 36.47
dz 10/24/2011 40.51 2 42.00 43.00 40.43
z 11/4/2011 41.33 2 43.00 44.00 40.43
z 1/3/2012 42.41 2 44.00 45.00 41.80
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 intends to seek or expects to receive compensation for investment banking services in
the next three months from 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 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 nonsecurities 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.
WELLS FARGO SECURITIES, LLC
Utilities EQUITY RESEARCH DEPARTMENT

6

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 an affiliate of IDACORP, Inc.

IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness.
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: February 23, 2012
48% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Outperform.
Wells Fargo Securities, LLC has provided investment banking
services for 40% 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 36% of its Equity Research Market Perform-rated
companies.
2% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Underperform.
Wells Fargo Securities, LLC has provided investment banking
services for 21% 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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SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE