KeyBanc-5-23-12.pdf

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May 23, 2012
ENERGY: Electric Utilities
Quick Alert
KeyBanc
Capital￿Markets

IDACORP, Inc. (BUY)
IDA - Quick Alert: Construction Halts at Large Solar Plant
KeyBanc Capital Markets Inc.
Member NYSE/FINRA/SIPC
Paul T. Ridzon: [phone] Ð [e-mail]
Timothy Yee: [phone] Ð [e-mail]
KEY INVESTMENT POINTS
Solar manufacturer HOKU Corporation (HOKU-NYSE) announced it has halted construction of its polysilicon manufacturing plant in
IDA©s service territory. Contractors have initiated foreclosure proceedings on the unfinished plant.
Earlier this year, IDA and HOKU entered into an agreement whereby HOKU paid IDA an upfront payment of $2 million to reduce its
monthly minimum charge as the plant experienced startup delays. IDA has indicated that it expected full-year revenues from HOKU
of $5.4 million in 2012.
While this development is viewed as a negative on the margin, we believe circumstances mitigate the impact on earnings. Recall,
IDA is permitted under a settlement to earn an ROE of 9.5% (based upon year-end equity), with any shortfall made up through the
amortization of accumulated deferred investment tax credits (ADITC©s). We expect this will offset any earnings impact, although there
remains a cash flow impact.
We further note that IDA©s current settlement does not include (as its prior settlement did) a stayout provision, so IDA is free to seek
rate relief for revenue shortfalls resulting from the loss of HOKU.
We are unclear whether IDA can seek relief in a single issue proceeding that addresses only this shortfall. In the event it cannot, we
would expect that IDA will weigh alternatives before initiating a proceeding given underlying distraction, cost and risk of upsetting its
current rate constructs inherent in a full rate case. We believe this may accelerate the time when IDA could file, rather than force a filing.
We expect shares may underperform in trading, but note recent underperformance relative to the UTY index (-6% over the past month)
may have been driven by concerns around this issue.
FOR IMPORTANT DISCLOSURES AND CERTIFICATIONS, PLEASE REFER TO PAGES 2 - 3 OF THIS NOTE.
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KeyBanc Capital Markets Inc. Disclosures and Certifications
IDACORP, Inc. - IDA
IDACORP, Inc. is an investment banking client of ours.
We have received compensation for investment banking services from IDACORP, Inc. during the past 12 months
We expect to receive or intend to seek compensation for investment banking services from IDACORP, Inc. within the next
three months.
During the past 12 months, IDACORP, Inc. has been a client of the firm or its affiliates for non-securities related services.
We have managed or co-managed a public offering of securities for IDACORP, Inc. within the past 12 months.
Reg A/C Certification
The research analyst(s) responsible for the preparation of this research report certifies that:(1) all the views expressed in
this research report accurately reflect the research analyst©s personal views about any and all of the subject securities or
issuers; and (2) no part of the research analyst©s compensation was, is, or will be directly or indirectly related to the specific
recommendations or views expressed by the research analyst(s) in this research report.
Three-Year Rating and Price Target History
Rating Disclosures
Distribution of Ratings/IB Services Firmwide and by Sector
KeyBanc Capital Markets
IB Serv/Past 12 Mos.
Rating Count Percent Count Percent
BUY [BUY]226 44.14 46 20.35
HOLD [HOLD]275 53.71 53 19.27
SELL [UND]11 2.15 4 36.36

ENERGY
IB Serv/Past 12 Mos.
Rating Count Percent Count Percent
BUY [BUY]38 48.10 16 42.11
HOLD [HOLD]41 51.90 19 46.34
SELL [UND]0 0.00 0 0.00

Quick AlertMay 23, 2012
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Rating System
BUY - The security is expected to outperform the market over the next six to 12 months; investors should consider adding the
security to their holdings opportunistically, subject to their overall diversification requirements.
HOLD - The security is expected to perform in line with general market indices over the next six to 12 months; no buy or sell
action is recommended at this time.
UNDERWEIGHT - The security is expected to underperform the market over the next six to 12 months; investors should
reduce their holdings opportunistically.
The information contained in this report is based on sources considered to be reliable but is not represented to be
complete and its accuracy is not guaranteed. The opinions expressed reflect the judgment of the author as of the
date of publication and are subject to change without notice. This report does not constitute an offer to sell or a
solicitation of an offer to buy any securities. Our company policy prohibits research analysts and members of their
families from owning securities of any company followed by that analyst, unless otherwise disclosed. Our officers,
directors, shareholders and other employees, and members of their families may have positions in these securities and
may, as principal or agent, buy and sell such securities before, after or concurrently with the publication of this report.
In some instances, such investments may be inconsistent with the opinions expressed herein. One or more of our
employees, other than the research analyst responsible for the preparation of this report, may be a member of the Board
of Directors of any company referred to in this report. The research analyst responsible for the preparation of this report is
compensated based on various factors, including the analyst©s productivity, the quality of the analyst©s research and stock
recommendations, ratings from investor clients, competitive factors and overall Firm revenues, which include revenues
derived from, among other business activities, the Firm©s performance of investment banking services. In accordance with
industry practices, our analysts are prohibited from soliciting investment banking business for our Firm.
Investors should assume that we are seeking or will seek investment banking or other business relationships with the
company described in this report.
Quick AlertMay 23, 2012