20031021Avera Exhibit10.pdf

BEFORE THEIDAHO PUBLIC UTiliTIES COMMISSIONCASE NO. IPC-O3-IDAHO POWER COMPANY
EXHIBIT NO.
W. AVERA
Risk Premium Method - CAPM
RISK PREMIUM METHODCAPITAL ASSET PRICING MODELMarket Rate of Return (g)Dividend Yield 700Growth Rate 12.540Market Retu Risk-Free Rate (Q..lAugust 2003 Average 20-Year Treasury Bond YieldMarket Risk Premium (c)Electric Utility Proxy Group Beta (.Q)Electric Utility Proxy Group Risk Premium U:!)Implied Cost of Equity (f)14.24039085028011.670/0 Exhibit WEA-Page 1 of 1
(a) Average for the stocks in the S&P 500 Index at June 15 2003. Dividend yield for month-end June
2003 from www.standardandpoors.com. Individual company growth rates based on IBES growth
projections reported in Standard & Poor Earninqs Guide (June 2003).
(b) Average yield on Long-term (~25 years) government bonds for August 2003 reported by the U.
Department of the Treasury at www.treas.gov.
(c) (a)-(b).
(d) The Value Line Investment Survey (August 15 , 2003).
(e) (c) x (d).
(f) (b) + (e).EXHBIIT NO. 10
CASE NO. IPC-03-
W. AVERA, IPCo
PAGE 1 OF