20071214Application.pdf

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An IDARP Company
Patrick A. Harrington
Corporate Secretary
Ms. Jean D. Jewell
Secretar
Idaho Public Utilities Commission
Statehouse
Boise, Idaho 83720
December 13, 2007
Re: In the Matter of the Application of Idao Power Company for an Order
Authorizing the Issuace and Sale of up to $350,000,000 of Applicant's Firt
Mortgage Bonds and Debt Securties
Case No. IPC-E-07-iL
Dear Ms. Jewell:
Enclosed herewith for fiing with the Commission are an original and five (5) copies of
the above-referenced application, including a proposed order for the Commission's
consideration. An electronic copy of the proposed order will also be e-mailed to you. Idaho
Power wil also be submitting its $1,000 securties application fee to the Commission promptly
in this case. Please send ten (10) certified copies of the Order issued in this matter to the
undersigned.
If you have any questions regarding this application, please contact me at 388-2878.
Øii?l1~Patrck A. Harn~ '"
c: Terr Carlock
P.O. Box 70 Boise,ID 83707
Telephone [phone], Fax [phone]
.,
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSiB~CE
zütn DEC 13 PM 4= 49
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR AN )
ORDER AUTHORIING THE ISSUANCE AND )
SALE OF UP TO $350,000,000 OF APPLICANT'S)
FIRST MORTGAGE BONDS AND DEBT )SECURTIES )
CASE NO. IPC-E-07 - fL
APPLICATION
Idaho Power Company (the "Applicant") hereby applies for an Order from the
Idaho Public Utilities Commission (the "Commission") under Title 61, Idaho Code, Chapters 1
and 9, and Chapters 141 through 150 of the Commission's Rules of Practice and Procedure, for
authority to issue and sell from time to time (a) up to $350,000,000 aggregate principal amount
of one or more series of Applicant's First Mortgage Bonds, which may be designated as secured
medium-term notes (the "Bonds") and (b) up to $350,000,000 aggregate principal amount of one
or more series of unsecured debt securities of the Applicant (the "Debt Securties"); provided,
however, that the total principal amount of the Bonds and Debt Securities to be issued and sold
hereunder shall not exceed $350,000,000. The Bonds and Debt Securities wil be issued publicly
pursuant to a shelf registration with the Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933, as amended (the "Act"), or privately pursuant to an exemption from
registration under the Act, as set forth herein.
(a) The Applicant
The Applicant is an electric public utility, incorporated under the laws of the state
of Idaho, engaged principally in the generation, purchase, transmission, distribution and sale of
electrc energy in an approximately 24,000 square-mile area in southern Idaho and eastern
APPLICATION -1
..
Oregon. The principal executive offices of the Applicant are located at 1221 W. Idaho Street,
P.O. Box 70, Boise, Idaho 83707-0070; its telephone number is [phone].
(b) Description of Securities
Applicant has filed a Registration Statement for the Bonds and Debt Securities
with the SEC in accordance with Rule 415 of the Act. A copy of the Registration Statement is
attached hereto as Attachment i. This shelf registration will allow the Applicant to issue and sell
one or more series of the Bonds and Debt Securities on a continuous or delayed basis if
authorized by the Commission and the other state regulatory commissions having jurisdiction
over the Applicant's securities. This will enable the Applicant to take advantage of attractive
market conditions effciently and rapidly. Under a shelf registration, the Applicant will be able
to issue the Bonds and Debt Securities at different times without the necessity of fiing a new
registration statement. Applicant requests authority to issue the Bonds and Debt Securities over a
period of two years from the date of the Commission's order approving this transaction.
Bonds
The Applicant proposes to issue and sell, from time to time, up to $350,000,000
aggregate principal amount of one or more series of the Bonds pursuant to the Indenture of
Mortgage and Deed of Trust, dated as of October 1, 1937 between the Applicant and Deutsche
Ban Trust Company Americas (formerly Baners Trust Company) and Stanley Burg, as
trstees, as supplemented and amended (the "Mortgage"), and as to be further supplemented by
one or more supplemental indentures relating to the Bonds. The Applicant may enter into
interest rate hedging arangements with respect to the Bonds, including treasury interest rate
APPLICATION - 2
locks, treasury interest rate caps and/or treasury interest rate collars. The Bonds will be secured
equally with the other First Mortgage Bonds of the Applicant.
After the terms and conditions of the issuance and sale of the Bonds have been
determined, Applicant will fie a Prospectus Supplement(s) with the SEC if the Bonds are sold
publicly, setting forth the series designation, aggregate principal amount of the issue, purchase
price or prices, issuance date or dates, maturty or maturities, interest rate or rates (which may be
fixed or varable) and/or the method of determination of such rate or rates, time of payment of
interest, whether all or a portion of the Bonds wil be discounted, whether all or a portion of the
Bonds will be issued in global form, whether interest rate hedging arangements will apply to the
Bonds, repayment terms, redemption terms, if any, and any other special terms of the Bonds,
which terms may be different for each issuance of the Bonds. The Applicant wil also fie a copy
of the Prospectus Supplement with the Commission.
The Bonds may be designated as secured medium-term notes. The medium-term
notes could have maturties from nine months to thirty years. Prior to issuing medium-term notes
publicly, the Applicant will fie a prospectus supplement with the SEC setting forth the general
terms and conditions of the medium-term notes to be issued. Upon each issuance of the medium-
term notes pursuant to the Prospectus Supplement, the Applicant wil file a Pricing Supplement
with the SEC providing a specific description of the terms and conditions of each issuance of the
medium-term notes, as described above. Applicant wil also fie a copy of the Prospectus
Supplement and Pricing Supplements with the Commission.
Applicant's outstanding First Mortgage Bonds are curently rated A-3 by Moody's
Investors Service, A by Standard & Poor's Ratings Services, and A- by Fitch, Inc. If the Bonds
APPLICATION - 3
are sold publicly, Applicant cannot predict whether they will be similarly rated. If the Bonds are
sold privately, the Bonds will probably not be rated.
Debt Securities
The Debt Securties will be unsecured obligations of the Applicant and will be
issued under an existing or new unsecured debt Indenture of the Applicant. A form of any new
Indenture wil be included in the Registration Statement which will be filed with the Commission
as stated above. The Applicant will supplement the Indenture in the future to further specify the
terms and conditions of each series of Debt Securities. Such amendments wil be filed with the
SEC and will also be filed with the Commission. The Applicant may enter into interest rate
hedging arangements with respect to the Debt Securities, including treasury interest rate locks,
treasury interest rate caps and/or treasur interest rate collars.
After the terms and conditions of the issuance and sale of the Debt Securties have
been determined, Applicant wil file a Prospectus Supplement(s) with the SEC if the Debt
Securties are sold publicly, setting forth the series designation, aggregate principal amount of the
issue, purchase price or prices, issuance date or dates, maturty or maturities, interest rate or rates
(which may be fixed or variable) and/or the method of determination of such rate or rates, time of
payment of interest, whether all or a portion of the Debt Securties wil be discounted, whether
all or a portion of the Debt Securties will be issued in global form, whether the interest rate
hedging arangements wil apply to the Debt Securities, repayment terms, redemption terms, if
any, and any other special terms of the Debt Securties, which terms may be different for each
issuance of the Debt Securties. Applicant will also file a copy of the Prospectus Supplement
with the Commission.
APPLICATION - 4
Applicant's outstanding unsecured senior debt is currently rated Baal by Moody's
investors Service, BBB+ by Standard & Poor's Ratings Services, and BBB+ by Fitch Inc. If the
Debt Securities are sold publicly, Applicant cannot predict whether they will be similarly rated.
If the Debt Securities are sold privately, the Debt Securities wil probably not be rated.
(c) Method ofIssuance
The Bonds and Debt Securities may be sold by public sale or private placement,
directly by the Applicant or through agents designated from time to time or through underwters
or dealers. If any agents of the Applicant or any underwriters are involved in the sale of the
Bonds or Debt Securities, the names of such agents or underwriters, the initial price to the public,
any applicable commissions or discounts and the net proceeds to the Applicant wil be fied with
the Commission. If the Bonds are designated as medium-term notes and sold to an agent or
agents as principal, the name of the agents, the price paid by the agents, any applicable
commission or discount paid by the Applicant to the agents and the net proceeds to the Applicant
wil be filed with the Commission.
Agents and underwters may be entitled under agreements entered into with the
Applicant to indemnification by the Applicant against certain civil liabilities, including the
liabilities under the Act.
(d) Purose ofIssuance
The net proceeds to be received by the Applicant from the sale of the Bonds
and/or Debt Securties will be used for the acquisition of property; the construction, completion,
extension or improvement of its facilities; the improvement or maintenance of its service; the
discharge or lawful refunding of its obligations; and for general corporate purposes. To the
APPLICATION - 5
extent that the proceeds from the sale of the Bonds and Debt Securties are not immediately so
used, they wil be temporarily invested in short-term discounted or interest-bearng obligations.
( e) Propriety ofIssue
Applicant believes and alleges the facts set forth herein disclose that the proposed
issuance and sale of Bonds and Debt Securities are for a lawful object within the corporate
purposes of Applicant and compatible with the public interest, are necessar or appropriate for,
or consistent with, the proper performance by Applicant of service as a public utility and will not
impair its ability to perform that service, and are reasonably necessar or appropriate for such
purposes.
(f) Financial Statements; Resolutions
Applicant has fied herewith as Attachment II its financial statements dated as of
September 30, 2007 consisting of its (a) Actual and Pro Forma Balance Sheet and Notes to
Financial Statements, (b) Statement of Capital Stock and Funded Debt, (c) Commitments and
Contingent Liabilities, (d) Statement of Retained Earings and (e) Statement of Income.
A certified copy of the resolutions of Applicant's Directors authorizing the
transaction with respect to this Application is filed as Attachment III.
(g) Proposed Order
Applicant has filed as Attachment IV a Proposed Order for adoption by the
Commission if this Application is granted.
(h) Notice of Application
APPLICATION - 6
Notice of this Application wil be published in those newspapers in the
Applicant's service terrtory listed in Section 24.19 of the Commission's Rules within seven (7)
days after the date hereof.
PRAYER
WHEREFORE, Applicant respectfully requests that the Idaho Public Utilities
Commission issue its Order herein authorizing Applicant to issue and sell for the purposes herein
set forth up to $350,000,000 aggregate principal amount of one or more series of its Bonds and
up to $350,000,000 aggregate principal amount of its Debt Securities; provided, that the total
principal amount of the Bonds and Debt Securties to be issued and sold shall not exceed
$350,000,000.
DATED at Boise, Idaho this !lay of December, 2007.
IDAHO POWER COMPAN
By:~~cJ?
Vice President and TreasurerJ
(CORPORA TÊ-SBAL)
ATTEST:
Patrck A. Harngto
Secretar
Idaho Power Company
1221 W.Idaho Street
P.O. Box 70
Boise, Idaho 83707-0070
APPLICATION - 7
ATTACHMENT I
(see enclosed Registration Statement)
. .
ATTACHMENT II(a)
IDAHO POWER COMPANY
BALANCE SHEET
AS OF SEPTEMBER 30, 2007
ASSETS
Electric Plant:
In service (at original cost)................................................................
Accumulated provision for depreciation.......................................
In service - Net............................................................................
Construction work in progress........ ......... ......... ..... ......... .............. ....
Held for future use............................................................................
Electric plant - Net.....................................................................
Investments and Other Property:
Nonutility property.............................................................................
Investment in subsidiary companies................................................
Other.................................................................................................
Total investments and other property...............................................
Current Assets:
Cash and cash equivalents...............................................................
Receivables:
Customer.....................................................................................
Allowance for uncollectible accounts...........................................
Notes...........................................................................................
Employee notes..........................................................................
Other............................................................................................
Accrued unbilled revenues...............................................................
Materials and supplies (at average cost)..........................................
Fuel stock (at average cost).............................................................
Prepayments.................................................................................... .
Deferred income taxes......................................................................
Regulatory assets............................................................................
Refundable income tax deposit......................................................
Other.................................................................................................
Total current assets.....................................................................
Deferred Debits:
American Falls and Milner water rights.............................................
Company owned life insurance.........................................................
Regulatory assets associated with income taxes................... ..........
Regulatory assets - PCA..................................................................
Regulatory assets - other......... ........ ............... ................. ........ .........
Employee notes................................................................................
Other.................................................................................................
Total deferred debits.........................................................................
Total.................................................................................................
After
Actual Adjustments Adjustments
$3,712,899,314 $3,712,899,314
(1,466,697,678)(1,466,697,678)
2,246,201 ,636 2,246,201,636
277,005,561 277,005,561
3,137,242 3,137,242
2,526,344,439 2,526,344,439
888,881 888,881
70,524,150 70,524,150
27,751,710 27,751,710
99,164,741 99,164,741
4,934,656 $350,000,000 354,934,656
64,005,619 64,005,619
(1,268,622)(1,268,622)
480,272 480,272
2,286,688 2,286,688
5,721,953 5,721,953
32,766,044 32,766,044
43,598,178 43,598,178
19,012,961 19,012,961
10,193,709 10,193,709
4,147,266 4,147,266
144,545 144,545
43,926,946 43,926,946
599,178 599,178
230,549,393 350,000,000 580,549,393
29,761,485 29,761,485
31,719,346 31,719,346
348,818,979 348,818,979
3,497,560 3,497,560
101,803,227 101,803,227
2,366,462 2,366,462
42,072,771 42,072,771
560,039,830 560,039,830
$3,416,098,403 $350,000,000 $3,766,098,403
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IDAHO POWER COMPANY
BALANCE SHEET
AS OF SEPTEMBER 30, 2007
CAPITALIZATION AND LIABILITIES
Common Shares Common Shares
Authorized Outstanding
Equity Capital: 50,000,000 39,150,812
Common stock..................................................................................
Premium on capital stock..................................................................
Capital stock expense................ ........ ......................... .... ....... ...........
Retained earnings...... ..... ....... ........... ..... ........... ......... .... .... ..... .... ......
Accummulated other comprehensive income...................................
Total equity capital.......................................................................
Long-Term Debt:
First mortgage bonds.......................................................................
Pollution control revenue bonds .................................... ..................
American Falls bond and Milner note guarantees ...........................
Unamortized discount on long-term debt (Dr).............................. .....
Total long-term debt.....................................................................
Current Liabilities:
Long-term debt due within one year........................... ......................
Notes payable...................................................................................
Accounts payable............................................................................
Notes and accounts payable to related parties.................................
Taxes accrued..................................................................................
Interest accrued......... ... ...... ...... ... ..... ..... .......... ............... ............... ...
Other.................................................................................................
Total current liabilities........... ............ ....... .................. ..................
Deferred Credits:
Regulatory liabilities associated with accumulated deferred
investment tax credits .................................................................
Deferred income taxes......................................................................
Regulatory liabilities associated with income taxes.........................
Regulatory liabilities-other............................. ............................... ....
Other.................................................................................................
Total deferred credits...................................................................
After
Actual Adjustments Adjustments
$97,877,030 $97,877,030
530,757,435 530,757,435
(2,096,925)(2,096,925)
443,023,446 443,023,446
(5,616,791)(5,616,791)
1,063,944,195 1,063,944,195
845,000,000 $350,000,000 1,195,000,000
170,460,000 170,460,000
29,457,727 29,457,727
(3,202,439)(3,202,439)
1,041,715,288 350,000,000 1,391 ,715,288
81,063,637 81,063,637
144,813,000 144,813,000
65,224,511 65,224,511
726,027 726,027
2,380,957 2,380,957
27,855,558 27,855,558
50,228,516 50,228,516
372,292,206 372,292,206
70,244,982
475,258,130
42,510,213
163,331,156
186,802,233
70,244,982
475,258,130
42,510,213
163,331,156
186,802,233
938,146,714 938,146,714
Total........................................................................................... $ 3,416,098,403 $ 350,000,000 $ 3,766,098,403
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IDAHO POWER COMPANY
STATEMENT OF ADJUSTING JOURNAL ENTRIES
As of September 30, 2007
Giving Effect to the Proposed issuance of
First mortgage bonds
Entry NO.1
Cash................................................................................................ $350,000,000
First mortgage bonds ........................................................................................ $ 350,000,000
To record the proposed issuance of First mortgage
bonds and the receipt of cash.
c:\documents and settings\pah2878\locl settings\temporary intemet files\olk52fdjusting entries. xis
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ATTACHMENT II(b)
.STATEMENT OF CAPITAL STOCK AND FUNDED DEBT
IDAHO POWER COMPANY
The following statement as to each class of the capital stock of applicant is as of September
30,2007, the date of the balance sheet submitted with this application:
Common Stock
(1) Description - Common Stock, $2.50 par value; 1 vote per share
(2) Amount authorized - 50,000,000 shares ($125,000,000 par value)
(3) Amount outstanding - 39,150,812 shares
(4) Amount held as reacquired securities - None
(5) Amount pledged by applicant - None
(6) Amount owned by affiliated corporations - All
(7) Amount held in any fund - None
Applicant's Common Stock is held by IDACORP, Inc., the holding
company of Idaho Power Company. IDACORP, Inc.'s Common
Stock is registered (Pursuant to Section 12(b) of the Securities
Exchange Act of 1934) and is listed on the New York and Pacific
stock exchanges.
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT (Continued)
IDAHO POWER COMPANY
The following statement as to funded debt of applicant is as of September 30,2007, the date
of the balance sheet submitted with this application.
First Mortgage Bonds
(1 )
Description
FIRST MORTGAGE BONDS:
7.38 % Series due 2007, dated as of Dec 1, 2000, due Dec 1, 2007
7.20 % Series due 2009, dated as of Nov 23, 1999, due Dec 1,2009
6.60 % Series due 2011, dated as of Mar 2,2001, due Mar 2,2011
4.75 % Series due 2012, dated as of Nov 15, 2002, due Nov 15, 2012
4.25 % Series due 2013, dated as of May 13, 2003, due October 1, 2013
6 % Series due 2032, dated as of Nov 15, 2002, due Nov 15, 2032
5.50 % Series due 2033, dated as of May 13, 2003, due April 1, 2033
5.50 % Series due 2034, dated as of March 26, 2004, due March 15, 2034
5.875%Series due 2034, dated as of August 16, 2004, due August 15, 2034
5.30 % Series due 2035, dated as of August 23, 2005, due August 15, 2035
6.30 % Series due 2037, dated as of June 22,2007, due June 15,2037
(2) Amount authorized - Limited within the maximum of $1,500,000,000
(or such other maximum amount as may be fixed by supplemental
indenture) and by property, earnings, and other provisions of
the Mortgage.
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affiliated corporations - None
(7) Amount of sinking or other funds - None
(3)
Amount
Outstanding
80,000,000
80,000,000
120,000,000
100,000,000
70,000,000
100,000,000
70,000,000
50,000,000
55,000,000
60,000,000
140,000,000
925,000,000
For a full statement of the terms and provisions relating to the respective Series and amounts
of applicant's outstanding First Mortgage Bonds above referred to, reference is made to the Mortgage
and Deed of Trust dated as of October 1, 1937, and First to Fortieth Supplemental Indentures thereto,
by Idaho Power Company to Deutsche Bank Trust Company Americas (formerly known as Bankers
Trust Company) and R. G. Page (Stanley Burg, successor individual trustee), Trustees, presently on
file with the Commission, under which said bonds were issued.
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT (Continued)
IDAHO POWER COMPANY
Pollution Control Revenue Bonds
(A) Variable Rate Series 2000 due 2027:
(1) Description - Pollution Control Revenue Bonds, Variable Rate Series due
2027, Port of Morrow, Oregon, dated as of May 17, 2000, due February 1,
2027.
(2) Amount authorized - $4,360,000
(3) Amount outstanding - $4,360,000
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affiliated corporations - None
(7) Amount in sinking or other funds - None
(B) Variable Auction Rate Series 2003 due 2024:
(1) Description - Pollution Control Revenue Refunding Bonds, Variable Auction
Rate Series 2003 due 2024, County of Humboldt, Nevada, dated as of
October 22,2003 due December 1, 2024 (secured by First Mortgage Bonds)
(2) Amount authorized - $49,800,000
(3) Amount outstanding - $49,800,000
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affiliated corporations - None
(7) Amount in sinking or other funds - None
(C) Variable Auction Rate Series 2006 due 2026:
(1) Description - Pollution Control Revenue Refunding Bonds, Variable Auction
Rate Series 2006 due 2026, County of Sweetwater, Wyoming,
dated as of October 3, 2006, due July 15, 2026 (secured by First Mortgage
Bonds)
(2) Amount authorized - $116,300,000
(3) Amount outstanding - $116,300,000
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affiliated corporations - None
(7) Amount in sinking or other funds - None
For a full statement of the terms and provisions relating to the outstanding Pollution Control
Revenue Bonds above referred to, reference is made to (A) copies of Trust Indenture by Port of
Morrow, Oregon, to the Bank One Trust Company, N. A., Trustee, and Loan Agreement between Port
of Morrow, Oregon and Idaho Power Company, both dated May 17, 2000, under which the Variable
Rate Series 2000 bonds were issued, (B) copies of Loan Agreement between Idaho Power Company
and Humboldt County, Nevada dated October 1, 2003; Trust Indenture between Humboldt County,
Nevada and Union Bank of California dated October 1, 2003; Escrow Agreement between Humboldt
County, Nevada and Bank One Trust Company and Idaho Power Company dated October 1, 2003;
Purchase Contract dated October 21,2003 among Humboldt County, Nevada and Bankers Trust
Company; Auction Agreement, dated as of October 22, 2003 among Idaho Power Company, Union
Bank of California and Deutsche Bank Trust Company; Insurance Agreement, dated as of October 1,
2003 between AMBAC and Idaho Power Company; Broker-Dealer agreements dated October 22,
2003 among the Auction Agent, Banc One Capital Markets, Banc of America Securities and Idaho
Power Company, under which the Auction Rate Series 2003 bonds were issued, and (C) copies of
Loan Agreement between Idaho Power Company and Sweetwater County, Wyoming dated October 1,
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT (Continued)
2006; Trust Indenture between Sweetwater County, Wyoming and Union Bank of California dated
October 1, 2006; Purchase Contract dated October 2, 2006 among Sweetwater County, Wyoming and
JP Morgan Securities and Idaho Power Company; Auction Agreement, dated as of October 2,2006
among Idaho Power Company, Union Bank of California and Deutsche Bank Trust Company;
Insurance Agreement, dated as of October 3, 2006 between AMBAC and Idaho Power Company;
Broker-Dealer agreements dated October 3, 2006 among the Auction Agent, JP Morgan Securities,
Banc of America Securities, Wachovia Bank, Key Banc Capital Markets and Idaho Power Company,
under which the Auction Rate Series 2006 bonds were issued.
. ,
ATTACHMENT ll(e)
COMMITMENTS AND CONTINGENCIES:
Purchase Obligations:
As of December 31,2006, IPC had agreements to purchase energy from 92 cogeneration and small power
production (CSPP) facilities with contracts ranging from one to 30 years. Under these contracts IPC is
required to purchase all of the output from the facilities inside the IPC service territory. For projects outside
the IPC service territory, IPC is required to purchase the output that it has the ability to receive at the facility's
requested point of delivery on the IPC system. IPC purchased 911,132 megawatt-hours (MWh) at a cost of
$54 millon in 2006, 715,209 MWh at a cost of $46 milion in 2005 and 677,868 MWh at a cost of $40 milion
in 2004. At December 31, 2006, IPC had the following long-term commitments relating to purchases of
energy, capacity, transmission rights and fuel:
2007 2008 2009 2010 2011 Thereafter
(thousands of dollars)
Cogeneration and small
power production $45,130 $76,538 $76,538 $79,830 $79,830 $1,064,718
Power and transmission
rights 80,175 16,351 7,390 2,781 2,754 13,315
Fuel 54,395 30,035 28,885 2,941 3,821 11,005
In addition, IDACORP has the following long-term commitments for lease guarantees, maintenance and
services, and industry related fees.
2007 2008 2009 2010 2011 Thereafter
(thousands of dollars)
Cogeneration and small
power production $4,513 $4,666 $3,008 $2,059 $1,008 $8,991
Power and transmission
rights 36,550 7,552 3,240 1,490 1,320 7,523
FERC and other industry
related fees 3,970 4,008 4,008 3,970 3,970 19,926
IDACORP's expense for operating leases was approximately $4 million, $4 million and $5 million in 2006,
2005 and 2004, respectively.
Guarantees
IPC has agreed to guarantee the performance of reclamation activities at Bridger Coal Company of which
Idaho Energy Resources Co., a subsidiary of IPC, owns a one-third interest. This guarantee, which is
renewed each December, was $60 millon at December 31,2006. Bridger Coal Company has a reclamation
trust fund set aside specifically for the purpose of paying these reclamation costs. Bridger Coal Company and
IPC expect that the fund will be suffcient to cover all such costs. Because of the existence of the fund, the
estimated fair value of this guarantee is minimaL.
Legal Proceedings
From time to time IDACORP and IPC are a party to legal claims, actions and complaints in addition to those
discussed below. IDACORP and IPC believe that they have meritorious defenses to all lawsuits and legal
proceedings. Although they wil vigorously defend against them, they are unable to predict with certainty
whether or not they wil ultimately be successfuL. However, based on the companies' evaluation, they believe
that the resolution of these matters, taking into account existing reserves, wil not have a material adverse
effect on IDACORP's or IPC's consolidated financial positions, results of operations or cash flows.
Wah Chang: On May 5, 2004, Wah Chang, a division of TOY Industries, Inc., filed two lawsuits in the U.S.
District Court for the District of Oregon against numerous defendants. IDACORP, IE and IPC are named as
defendants in one of the lawsuits. The complaints allege violations of federal antitrust laws, violations of the
Racketeer Influenced and Corrupt Organizations Act, violations of Oregon antitrust laws and wrongful
interference with contracts. Wah Chang's complaint is based on allegations relating to the western energy
situation. These allegations include bid rigging, falsely creating congestion and misrepresenting the source
and destination of energy. The plaintiff seeks compensatory damages of $30 million and treble damages.
On September 8, 2004, this case was transferred and consolidated with other similar cases currently pending
before the Honorable Robert H. Whaley sitting by designation in the U.S. District Court for the Southern
District of California. The companies' filed a motion to dismiss the complaint which the court granted on
February 11, 2005. Wah Chang appealed the dismissal to the U.S. Court of Appeals for the Ninth Circuit on
March 10, 2005. The Ninth Circuit set a briefing schedule on the appeal, requiring Wah Chang's opening
brief to be filed by July 6, 2005. On May 18, 2005, Wah Chang filed a motion to stay the appeal or in the
alternative to voluntarily dismiss the appeal without prejudice to reinstatement. The companies opposed the
motion and filed a cross-motion asking the Court to summarily affirm the district court's order of dismissaL.
On July 8, 2005, the Ninth Circuit denied Wah Chang's motion and also denied the companies' motion for
summary affirmance without prejudice to renewal following the filing of Wah Chang's opening brief. Wah
Chang's opening brief was filed on September 21, 2005. On October 11, 2005 the companies, along with the
other defendants, filed a motion to consolidate this appeal with Wah Chang v. Duke Energy Trading and
Marketing currently pending before the Ninth Circuit. On October 18, 2005, the Ninth Circuit granted the
motion to consolidate and established a revised briefing schedule. The companies filed an answering brief
on November 30, 2005. Wah Chang's reply brief was filed on January 6, 2006. The appeal has been fully
briefed and was orally argued on April 10,2007. The matter now awaits decision by the Ninth Circuit. The
companies intend to vigorously defend their position in this proceeding and believe this matter will not have a
material adverse effect on their consolidated financial positions, results of operations or cash flows.
City of Tacoma: On June 7, 2004, the City of Tacoma, Washington filed a lawsuit in the U.S. District Court
for the Western District of Washington at Tacoma against numerous defendants including IDACORP, IE and
IPC. The City of Tacoma's complaint alleges violations of the Sherman Antitrust Act. The claimed antitrust
violations are based on allegations of energy market manipulation, false load scheduling and bid rigging and
misrepresentation or withholding of energy supply. The plaintiff seeks compensatory damages of not less
than $175 million.
On September 8,2004, this case was transferred and consolidated with other similar cases currently pending
before the Honorable Robert H. Whaley sitting by designation in the U.S. District Court for the Southern
District of California. The companies' filed a motion to dismiss the complaint which the court granted on
February 11, 2005. The City of Tacoma appealed to the U.S. Court of Appeals for the Ninth Circuit on March
10,2005.
On August 9, 2005, the companies moved for summary affrmance of the district court's order dismissing the
City of Tacoma's complaint. The City of Tacoma filed a response to the companies' motion for summary
affirmance on August 24, 2005. The Ninth Circuit denied the companies' motion for summary affirmance on
November 3,2005. The appeal has been fully briefed and oral argument was scheduled for April 10,2007.
On March 20, 2007, the Court, pursuant to the stipulation of the parties, entered an order dismissing this
appeal with prejudice, with each party bearing its own cost on appeaL. .
Western Energy Proceedings at the FERC:
California Power Exchange Chargeback:
As a component of IPC's non-utility energy trading in the State of California, IPC, in January 1999, entered
into a participation agreement with the California Power Exchange (CaIPX), a California non-profit public
benefit corporation. The CaIPX, at that time, operated a wholesale electricity market in California by acting
as a clearinghouse through which electricity was bought and sold. Pursuant to the participation agreement,
IPC could sell power to the CalPX under the terms and conditions of the CalPX Tariff. Under the participation
agreement, if a participant in the CalPX defaulted on a payment, the other participants were required to pay
their allocated share of the default amount to the CaIPX. The allocated shares were based upon the level of
trading activity, which included both power sales and purchases, of each participant during the preceding
three-month period.
On January 18, 2001, the CalPX sent IPC an invoice for $2 million - a "default share invoice" - as a result of
an alleged Southern California Edison payment default of $215 millon for power purchases. IPC made this
payment. On January 24, 2001, IPC terminated its participation agreement with the CaIPX. On February 8,
2001, the CalPX sent a further invoice for $5 milion, due on February 20, 2001, as a result of alleged
payment defaults by Southern California Edison, Pacific Gas and Electric Company and others. However,
because the CalPX owed IPC $11 million for power sold to the CalPX in November and December 2000, IPC
did not pay the February 8 invoice. The CalPX later reversed IPC's payment of the January 18, 2001 invoice,
but on June 20,2001 invoiced IPC for an additional $2 million. The CalPX owed IPC $14 million for power
sold in November and December including $2 millon associated with the default share invoice dated June
20,2001. IPC essentially discontinued energy trading with the CalPX and the California Independent System
Operator (Cal ISO) in December 2000.
IPC believed that the default invoices were not proper and that IPC owed no further amounts to the CaIPX.
IPC pursued all available remedies in its efforts to collect amounts owed to it by the CaIPX. On February 20,
2001, IPC filed a petition with the FERC to intervene in a proceeding that requested the FERC to suspend
the use of the CalPX chargeback methodology and provide for further oversight in the CaIPX's
implementation of its default mitigation procedures.
A preliminary injunction was granted by a federal judge in the U.S. District Court for the Central District of
California enjoining the CalPX from declaring any CalPX participant in default under the terms of the CalPX
Tariff. On March 9, 2001, the CalPX filed for Chapter 11 protection with the U.S. Bankruptcy Court, Central
District of California.
In April 2001, Pacific Gas and Electric Company filed for bankruptcy. The CalPX and the Cal ISO were
among the creditors of Pacific Gas and Electric Company.
The FERC issued an order on April 6, 2001 requiring the CalPX to rescind all chargeback actions related to
Pacific Gas and Electric Company's and Southern California Edison's liabilities. Shortly after the issuance of
that order, the CalPX segregated the CalPX chargeback amounts it had collected in a separate account. The
CalPX claimed it would await further orders from the FERC and the bankruptcy court before distributing the
funds that it collected under its chargeback tariff mechanism. On October 7, 2004, the FERC issued an order
determining that it would not require the disbursement of chargeback funds until the completion of the
California refund proceedings. On November 8,2004, IE, along with a number of other parties, sought
rehearing of that order. On March 15, 2005, the FERC issued an order on rehearing confirming that the
CalPX was to continue to hold the chargeback funds, but solely to offset seller-specific shortfalls in the
seller's CalPX account at the conclusion of the California refund proceeding. Balances were to be returned
to the respective sellers at the conclusion of a seller's participation in the refund proceeding.
Based upon the Offer of Settement filed with the FERC on February 17,2006 between the California Parties
and IE and IPC discussed below in "California Refund," the California Parties supported a motion filed by IE
and IPC with the FERC seeking an Order Directing Return of Chargeback Amounts then held by the CalPX
totaling $2.27 millon. In the May 22,2006 order approving the Settlement, the FERC granted the IE and IPC
motion for return of chargeback funds held by the CaIPX. On June 1, 2006, IE received approximately $2.5
million from the CalPX representing the return of $2.27 millon in charge back funds plus interest.
California Refund:
In April 2001, the FERC issued an order stating that it was establishing price mitigation for sales in the
California wholesale electricity market. Subsequently, in a June 19, 2001, order, the FERC expanded that
price mitigation plan to the entire western United States electrically interconnected system. That plan
included the potential for orders directing electricity sellers into California since October 2, 2000, to refund
portions of their spot market sales prices if the FERC determined that those prices were not just and
reasonable, and therefore not in compliance with the Federal Power Act. The June 19 order also required all
buyers and sellers in the Cal ISO market during the subject time frame to participate in settlement
discussions to explore the potential for resolution of these issues without further FERC action. The
settlement discussions failed to bring resolution of the refund issue and as a result, the FERC's Chief
Administrative Law Judge submitted a Report and Recommendation to the FERC recommending that the
FERC adopt the methodology set forth in the report and set for evidentiary hearing an analysis of the Cal
ISO's and the CalPX's spot markets to determine what refunds may be due upon application of that
methodology.
On July 25, 2001, the FERC issued an order establishing evidentiary hearing procedures related to the scope
and methodology for calculating refunds related to transactions in the spot markets operated by the Cal ISO
and the CalPX during the period October 2, 2000, through June 20, 2001 (Refund Period).
The Administrative Law Judge issued a Certification of Proposed Findings on California Refund Liabilty on
December 12, 2002.
The FERC issued its Order on Proposed Findings on Refund Liability on March 26, 2003. In large part, the
FERC affirmed the recommendations of its Administrative Law Judge. However, the FERC changed a
component of the formula the Administrative Law Judge was to apply when it adopted findings of its staff that
published California spot market prices for gas did not reliably reflect the prices a gas market, that had not
been manipulated, would have produced, despite the fact that many gas buyers paid those amounts. The
findings of the Administrative Law Judge, as adjusted by the FERC's March 26, 2003, order, were expected
to increase the offsets to amounts still owed by the Cal ISO and the CalPX to the companies. Calculations
remained uncertain because (1) the FERC had required the Cal iSO to correct a number of defects in its
calculations, (2) it was unclear what, if any, effect the ruling of the Ninth Circuit in Bonneville Power
Administration v. FERC, described below, might have on the ISO's calculations, and (3) the FERC had stated
that if refunds would prevent a seller from recovering its California portolio costs during the Refund Period, it
would provide an opportunity for a cost showing by such a respondent.
IE, along with a number of other parties, fied an application with the FERC on April 25, 2003, seeking
rehearing of the March 26,2003, order. On October 16, 2003, the FERC issued two orders denying
rehearing of most contentions that had been advanced and directing the Cal ISO to prepare its compliance
filng calculating revised Mitigated Market Clearing Prices and refund amounts within five months.
Two avenues of activity have proceeded on largely but not entirely independent paths, converging from time
to time. The Cal iSO continued to work on its compliance refund calculations while the appellate litigation
and litigation before the FERC regarding, among other things, cost filings, fuel cost allowance offsets,
emissions offsets, cost-based recovery offsets, and allocation methods continued.
Originally, the Cal ISO was to complete its calculation within five months of the FERC's October 16,2003,
order. The Cal iSO compliance filing has since been delayed numerous times. The Cal ISO has been
required to update the FERC on its progress monthly. In its most recent status report, filed February 22,
2007, the Cal iSO reported that it has completed publishing settlement statements reflecting the basic refund
calculations, and is currently in a "financial adjustment" phase, in which it calculates adjustments to its refund
data to account for fuel cost allowance offsets, emissions offsets, cost-based recovery offsets, and interest
on amounts unpaid and refunds. The Cal iSO estimates that it wil take approximately 10 additional weeks to
complete the financial adjustment phase, including applicable review and comment periods. The Cal iSO
estimates that it wil have completed its calculations by May 2007, subject to such additional time as may be
required if unanticipated delays are encountered. The potential expansion of the FERC refund proceedings
due to the Ninth Circuit orders and the disposition of additional settlements which the Ninth Circuit has
announced it expects to be filed at the FERC in the near future may affect the finality of any Cal ISO
calculations. At present, IDACORP and IPC are not able to predict when the Ninth Circuit mandates may
issue, how the FERC will proceed in connection with the possible expansion of the proceedings, the nature
and content of as yet un-filed settlements or the extent to which the Cal ISO calculation process may be
disrupted.
On December 2, 2003, IDACORP petitioned the U.S. Court of Appeals for the Ninth Circuit for review of the
FERC's orders, and since that time, dozens of other petitions for review have been filed. The Ninth Circuit
consolidated IE's and the other parties' petitions with the petitions for review arising from earlier FERC orders
in this proceeding, bringing the total number of consolidated petitions to more than 100. The Ninth Circuit
held the appeals in abeyance pending the disposition of the market manipulation claims discussed below and
the development of a comprehensive plan to brief this complicated case. Certain parties also sought further
rehearing and clarification before the FERC. On September 21,2004, the Ninth Circuit convened case
management proceedings, a procedure reserved to help organize complex cases. On October 22, 2004, the
Ninth Circuit severed a subset of the stayed appeals in order that briefing could commence regarding cases
related to: (1) which parties are subject to the FERC's refund jurisdiction under section 201(f) of the Federal
Power Act; (2) the temporal scope of refunds under section 206 of the Federal Power Act; and (3) which
categories of transactions are subject to refunds. Oral argument was held on April 12-13, 2005. On
September 6,2005, the Ninth Circuit issued a decision on the jurisdictional issues concluding that the FERC
lacked refund authority over wholesale electric energy sales made by governmental entities and non-public
utilities. On August 2,2006, the Ninth Circuit issued its decision on the appropriate temporal reach and the
type of transactions subject to the FERC refund orders and concluded, among other things, that all
transactions at issue in the case that occurred within or as a result of the CalPX and the Cal iSO were the
proper subject of refund proceedings; refused to expand the refund proceedings into the bilateral markets
including transactions with the California Department of Water Resources; approved the refund effective date
as October 2,2000, but also required the FERC to consider whether refunds, including possibly market-wide
refunds, should be required for an earlier time due to claims that some market participants had violated
governing tariff obligations (although the decision did not specify when that time would start, the California
Parties generally had sought further refunds starting May 1, 2000); and effectively expanded the scope of the
refund proceeding to transactions within the CalPX and Cal ISO markets outside the 24-hour spot market and
energy exchange transactions. The IDACORP settlement with the California Parties approved by the FERC
on May 22,2006, and discussed below anticipated the possibility of such an outcome and attempted to
provide that the consideration exchanged among the settling parties also encompass the setting parties'
claims in the event of such expansion of the proceedings.
The Ninth Circuit subsequently issued orders deferring the time for seeking rehearing of its order and holding
the consolidated petitions for review in abeyance for a limited time in order to create an opportunity for
unusual mediation proceedings managed jointly by the Court Mediator and FERC officials. The Ninth Circuit
has since extended the deferral for the mediation effort.
IDACORP believes that these decisions should have no material effect on IDACORP under the terms of the
IDACORP Settlement with the California Parties approved by the FERC on May 22, 2006.
On May 12, 2004, the FERC issued an order clarifying portions of its earlier refund orders and, among other
things, denying a proposal made by Duke Energy North America and Duke Energy Trading and Marketing
(and supported by IE) to lodge as evidence a contested settlement in a separate complaint proceeding,
California Public Utilities Commission (CPU C) v. EI Paso, et al. The CPUC's complaint alleged that the EI
Paso companies manipulated California energy markets by withholding pipeline transportation capacity into
California in order to drive up natural gas prices immediately before and during the California energy crisis in
2000-2001. The settlement wil result in the payment by EI Paso of approximately $1.69 bilion. Duke
claimed that the relief afforded by the settement was duplicative of the remedies imposed by the FERC in its
March 26, 2003, order changing the gas cost component of its refund calculation methodology. IE, along
with other parties, has sought rehearing of the May 12, 2004, order. On November 23,2004, the FERC
denied rehearing and within the statutory time allowed for petitions, a number of parties, including IE, filed
petitions for review of the FERC's order with the Ninth Circuit. These petitions have since been consolidated
with the larger number of review petitions in connection with the California refund proceeding.
On March 20, 2002, the California Attorney General filed a complaint with the FERC against various sellers in
the wholesale power market, including IE and IPC, alleging that the FERC's market-based rate requirements
violate the Federal Power Act, and, even if the market-based rate requirements are valid, that the quarterly
transaction reports filed by sellers do not contain the transaction-specific information mandated by the
Federal Power Act and the FERC. The complaint stated that refunds for amounts charged between market-
based rates and cost-based rates should be ordered. The FERC denied the challenge to market-based rates
and refused to order refunds, but did require sellers, including IE and IPC, to refile their quarterly reports to
include transaction-specific data. The Attorney General appealed the FERC's decision to the U.S. Court of
Appeals for the Ninth Circuit. The Attorney General contends that the failure of all market-based rate
authority sellers of power to have rates on file with the FERC in advance of sales is impermissible. The Ninth
Circuit issued its decision on September 9,2004, concluding that market-based tariffs are permissible under
the Federal Power Act, but remanding the matter to the FERC to consider whether the FERC should exercise
remedial power (including some form of refunds) when a market participant failed to submit reports that the
FERC relies on to confirm the justness and reasonableness of rates charged. On December 28, 2006, a
number of sellers have filed a certiorari petition to the U.S. Supreme Court. The U.S. Supreme Court has not
yet acted on that petition. On February 16, 2007, the Ninth Circuit announced that it was continuing to
withhold the mandate until April 27, 2007.
In June 2001, IPC transferred its non-utility wholesale electricity marketing operations to iE. Effective with
this transfer, the outstanding receivables and payables with the CalPX and the Cal ISO were assigned from
IPC to IE. At December 31,2005, with respect to the CalPX chargeback and the California refund
proceedings discussed above, the CalPX and the Cal ISO owed $14 million and $30 millon, respectively, for
energy sales made to them by IPC in November and December 2000.
On August 8, 2005, the FERC issued an Order establishing the framework for filings by sellers who elected to
make a cost showing. On September 14,2005, IE and IPC made a joint cost filing, as did approximately
thirty other sellers. On October 11, 2005, the California entities filed comments on the IE and IPC cost filing
and those made by other parties. IPC and IE submitted reply comments on October 17, 2005. The
California entities filed supplemental comments on October 24, 2005 and IPC and IE filed supplemental reply
comments on October 27, 2005.
In December of 2005, IE and IPC reached a tentative agreement with the California Parties setting matters
encompassed by the California Refund proceeding including IE's and IPC's cost filing and refund obligation.
On January 20, 2006, the Parties filed a request with the FERC asking that the FERC defer ruling on IE's and
IPC's cost filing for thirty days so the parties could complete and file the settement agreement with the
FERC. On January 26, 2006, the FERC granted the requested deferral of a ruling on the cost filing and
required that the settement be filed by February 17, 2006. On February 17, 2006, IE and IPC jointly fied
with the Californià Parties (Pacific Gas & Electric Company, San Diego Gas & Electric Company, Southern
California Edison, the California Public Utilities Commission, the California Electricity Oversight Board, the
California Department of Water Resources and the California Attorney General) an Offer of Settement at the
FERC. Other parties had until March 9, 2006 to elect to become additional settling parties. A number of
parties, representing substantially less than the majority potential refund claims, chose to opt out of the
settlement.
On March 27, 2006, the FERC issued an order rejecting the IE/IPC cost filing and on April 26, 2006, IE and
IPC sought rehearing of the rejection. By order of April 27, 2006, the FERC tolled the time for what otherwise
would have been required by statute to be a decision on the request for rehearing.
On May 12, 2006, the FERC issued an order determining the method that should be used to allocate
amounts approved in cost filings, approving the methodology that IE and IPC and others had advocated prior
to the time IE and IPC entered into the February 17, 2006 settlement - allocating cost offsets to buyers in
proportion to the net refunds they are owed through the Cal ISO and CalPX markets. On June 12, 2006, the
California Parties requested rehearing, urging the FERC to allocate the cost offsets to all purchasers from the
Cal ISO and CalPX markets and not just to that limited subset of purchasers who are net refund recipients.
On July 12, 2006, the FERC tolled the time to act on the request for rehearing and has not issued orders on
rehearing since that time. IDACORP and IPC are unable to predict how or when the FERC might rule on the
request for rehearing.
After consideration of comments, the FERC approved the February 17, 2006, Offer of Settlement on May 22,
2006. Under the terms of the settement, IE and IPC assigned $24.25 milion of the rights to accounts
receivable from the Cal ISO and CalPX to the California Parties to pay into an escrow account for refunds to
setting parties. Amounts from that escrow not used for setting parties and $1.5 milion of the remaining IE
and IPC receivables that are to be retained by the CalPX are available to fund, at least partially, payment of
the claims of any non-settling parties if they prevail in the remaining litigation of this matter. Any excess
funds remaining at the end of the case are to be returned to IDACORP. Approximately $10.25 milion of the
remaining IE and IPC receivables was paid to IE and IPC under the settlement.
On June 21, 2006, the Port of Seattle, Washington filed a request for rehearing of the FERC order approving
the Settement. The FERC issued an order on October 5, 2006, denying the Port of Seattle's request for
rehearing. On October 24, 2006, the Port of Seattle petitioned the U.S. Court of Appeals for the Ninth Circuit
for review of the FERC order approving the Settement. Initially the Ninth Circuit consolidated that review
petition with the large number of review petitions already consolidated before it and stayed further action on
the consolidated cases while the court's mediator and FERC representatives work on achieving settlements
with other parties. On October 25, 2007, the court issued an order that lifted its stay as to the review of the
Port of Seatte's petition of the FERC's orders approving the February 17, 2006 offer of settlement as well as
Port of Seattle's petitions for review of orders approving the settlements of two other sellers. The court's
order also established a consolidated briefing schedule for these three cases with initial briefs due by
January 28,2008 and final briefs due at end of July 2008. A date for argument has not been set. IPC and IE
are unable to predict when or how the Ninth Circuit might rule on these consolidated petitions for review filed
by Port of Seattle.
Market Manipulation:
In a November 20,2002 order, the FERC permitted discovery and the submission of evidence respecting
market manipulation by various sellers during the western power crises of 2000 and 2001.
On March 3, 2003, the California Parties (certain investor owned utiities, the California Attorney General, the
California Electricity Oversight Board and the CPUC) filed voluminous documentation asserting that a
number of wholesale power suppliers, including IE and IPC, had engaged in a variety of forms of conduct that
the California Parties contended were impermissible. Although the contentions of the California Parties were
contained in more than 11 compact discs of data and testimony, approximately 12,000 pages, IE and IPC
were mentioned only in limited contexts with the overwhelming majority of the claims of the California Parties
relating to the conduct of other parties.
The California Parties urged the FERC to apply the precepts of its earlier decision, to replace actual prices
charged in every hour starting January 1, 2000 through the beginning of the existing refund period (October
2,2000) with a Mitigated Market Clearing Price, seeking approximately $8 billon in refunds to the Cal iSO
and the CaIPX. On March 20, 2003, numerous parties, including IE and IPC, submitted briefs and
responsive testimony.
In its March 26, 2003 order, discussed above in "California Refund," the FERC declined to generically apply
its refund determinations to sales by all market participants, although it stated that it reserved the right to
provide remedies for the market against parties shown to have engaged in proscribed conduct.
On June 25, 2003, the FERC ordered over 50 entities that participated in the western wholesale power
markets between January 1, 2000 and June 20, 2001, including IPC, to show cause why certain trading
practices did not constitute gaming or anomalous market behavior in violation of the Cal ISO and the CalPX
Tariffs. The Cal ISO was ordered to provide data on each entity's trading practices within 21 days of the
order, and each entity was to respond explaining their trading practices within 45 days of receipt of the Cal
ISO data. IPC submitted its responses to the show cause orders on September 2 and 4, 2003. On October
16,2003, IPC reached agreement with the FERC Staff on the two orders commonly referred to as the
"gaming" and "partnership" show cause orders. Regarding the gaming order, the FERC Staff determined it
had no basis to proceed with allegations of false imports and paper trading and IPC agreed to pay $83,373 to
settle allegations of circular scheduling. IPC believed that it had defenses to the circular scheduling
allegation but determined that the cost of settlement was less than the cost of litigation. In the settlement,
IPC did not admit any wrongdoing or violation of any law. With respect to the "partnership" order, the FERC
Staff submitted a motion to the FERC to dismiss the proceeding because materials submitted by IPC
demonstrated that IPC did not use its "parking" and "lending" arrangement with Public Service Company of
New Mexico to engage in "gaming" or anomalous market behavior ("partnership"). The "gaming" settlement
was approved by the FERC on March 3, 2004. Originally, eight parties requested rehearing of the FERC's
March 3, 2004 order. The motion to dismiss the "partnership" proceeding was approved by the FERC in an
order issued on January 23,2004 and rehearing of that order was not sought within the time allowed by
statute. Some of the California Parties and other parties have petitioned the U.S. Court of Appeals for the
Ninth Circuit and the District of Columbia Circuit for review of the FERC's orders initiating the show cause
proceedings. Some of the parties contend that the scope of the proceedings initiated by the FERC was too
narrow. Other parties contend that the orders initiating the show cause proceedings were impermissible.
Under the rules for multidistrict litigation, a lottery was held and although these cases were to be considered
in the District of Columbia Circuit by order of February 10, 2005, the District of Columbia Circuit transferred
the proceedings to the Ninth Circuit. The FERC had moved the District of Columbia Circuit to dismiss these
petitions on the grounds of prematurity and lack of ripeness and finality. The transfer order was issued
~
before a ruling from the District of Columbia Circuit and the motions, if renewed, will be considered by the
Ninth Circuit. The Ninth Circuit has consolidated this case with other matters and are holding them in
abeyance. IPC is not able to predict the outcome of the judicial determination of these issues.
The settement between the California Parties and IE and IPC discussed above in the California Refund
proceeding approved by the FERC on May 22,2006, results in the California Parties and other settling
parties withdrawing their requests for rehearing of IPC's and IE's settlement with the FERC Staff regarding
allegations of "gaming". On October 11, 2006, the FERC issued an Order denying rehearing of its earlier
approval of the "gaming" allegations, thereby effectively terminating the FERC investigations as to IPC and IE
regarding bidding behavior, physical withholding of power and "gaming" without finding of wrongdoing. On
October 24, 2006, the Port of Seattle, Washington appealed to the U.S. Court of Appeals for the Ninth Circuit
FERC's denial of its request for rehearing its order granting approval of the settement of the gaming
allegations against IE and IPC. On November 17, 2006, the Ninth Circuit consolidated the Port of Seatte's
review petition with a large number of review petitions previously consolidated and has stayed further action
on the consolidated cases while the court's mediator and FERC representatives work on achieving
settements with other parties. The Ninth Circuit establishment of a briefing schedule for the settlements
discussed above does not apply to the "gaming" settlement.
On June 25, 2003, the FERC also issued an order instituting an investigation of anomalous bidding behavior
and practices in the western wholesale power markets. In this investigation, the FERC was to review
evidence of alleged economic withholding of generation. The FERC determined that all bids into the CalPX
and the Cal iSO markets for more than $250 per MWh for the time period May 1,2000, through October 1,
2000, would be considered prima facie evidence of economic withholding. The FERC Staff issued data
requests in this investigation to over 60 market participants including IPC. IPC responded to the FERC's
data requests. In a letter dated May 12, 2004, the FERC's Office of Market Oversight and Investigations
advised that it was terminating the investigation as to IPC. In March 2005, the California Attorney General,
the CPUC, the California Electricity Oversight Board and Pacific Gas and Electric Company sought judicial
review in the Ninth Circuit of the FERC's termination of this investigation as to IPC and approximately 30
other market participants. IPC has moved to intervene in these proceedings. On April 25, 2005, Pacific Gas
and Electric Company sought review in the Ninth Circuit of another FERC order in the same docketed
proceeding confirming the agency's earlier decision not to allow the participation of the California Parties in
what the FERC characterized as its non-public investigative proceeding.
Pacific Northwest Refund:
On July 25, 2001, the FERC issued an order establishing another proceeding to explore whether there may
have been unjust and unreasonable charges for spot market sales in the Pacific Northwest during the period
December 25, 2000 through June 20, 2001. The FERC Administrative Law Judge submitted
recommendations and findings to the FERC on September 24, 2001. The Administrative Law Judge found
that prices should be governed by the Mobile-Sierra standard of the public interest rather than the just and
reasonable standard, that the Pacific Northwest spot markets were competitive and that no refunds should be
allowed. Procedurally, the Administrative Law Judge's decision is a recommendation to the commissioners
of the FERC. Multiple parties submitted comments to the FERC with respect to the Administrative Law
Judge's recommendations. The Administrative Law Judge's recommended findings had been pending
before the FERC, when at the request of the City of Tacoma and the Port of Seattle on December 19, 2002,
the FERC reopened the proceedings to allow the submission of additional evidence related to alleged
manipulation of the power market by Enron and others. As was the case in the California refund proceeding,
at the conclusion of the discovery period, parties alleging market manipulation were to submit their claims to
the FERC and responses were due on March 20, 2003. Grays Harbor intervened in this FERC proceeding,
asserting on March 3, 2003 that its six-month forward contract, for which performance had been completed,
should be treated as a spot market contract for purposes of the FERC's consideration of refunds and
requested refunds from IPC of $5 milion. Grays Harbor did not suggest that there was any misconduct by
IPC or IE. The companies submitted responsive testimony defending vigorously against Grays Harbor's
refund claims.
In addition, the Port of Seatte, the City of Tacoma and the City of Seattle made filings with the FERC on
March 3, 2003, claiming that because some market participants drove prices up throughout the west through
acts of manipulation, prices for contracts throughout the Pacific Northwest market should be re-set starting in
May 2000 using the same factors the FERC would use for California markets. Although the majority of these
claims are generic, they named a number of power market suppliers, including IPC and IE, as having used
parking services provided by other parties under FERC-approved tariffs and thus as being candidates for
claims of improperly having received congestion revenues from the Cal ISO. The FERC declined to order
refunds on June 25,2003, and multiple parties then appealed to the Ninth Circuit Court of Appeals. IE and
IPC were parties in the FERC proceeding and participated in the appeaL. On August 24,2007, the court filed
an opinion in the appeal, remanding to the FERC the orders that declined to require refunds. The court's
opinion instructed the FERC to consider whether evidence of market manipulation submitted by the
petitioners for the period January 1, 2000 to June 21, 2001 would have altered the agency's conclusions
about refunds and directed the FERC to include sales to the California Department of Water Resources in the
proceeding. On September 18, 2007, the court extended until November 16, 2007 the time for filing petitions
for rehearing to allow the parties time to assess settement prospects and directed Senior Judge Edward
Leavey of the Ninth Circuit to initiate mediation efforts. The stay also effectively defers the time frame in
which the court's mandate to the FERC might be issued. On October 25,2007, Powerex Corp. filed an
unopposed motion to extend the date for seeking rehearing unti December 17, 2006. IE and IPC are unable
to predict the outcome of these matters. The Settlement in the California Refund proceeding resolves all
claims the California Parties have against IE and IPC in the Pacific Northwest proceeding.
There are pending in the U.S. Court of Appeals for the Ninth Circuit approximately 200 petitions for review of
numerous FERC orders regarding the Western energy matters of 2000 and 2001, including the California
refund proceeding, the structure and content of the FERC's market-based rate regime, show cause orders
respecting contentions of market manipulation, and the Pacific Northwest proceedings. Decisions in anyone
of these appeals may have implications with respect to other pending cases, including those to which
IDACORP, IPC or IE are parties. IDACORP, IPC and IE are unable to predict the outcome of any of these
petitions for review.
Shareholder Lawsuit: On May 26,2004 and June 22,2004, respectively, two shareholder lawsuits were
filed against IDACORP and certain of its directors and officers. The lawsuits, captioned Powell, et al. v.
IDACORP, Inc., et al. and Shorthouse, et al. v. IDACORP, Inc., et aI., raise largely similar allegations. The
lawsuits are putative class actions brought on behalf of purchasers of IDACORP stock between February 1,
2002, and June 4,2002, and were filed in the U.S. District Court for the District of Idaho. The named
defendants in each suit, in addition to IDACORP, are Jon H. Miler, Jan B. Packwood, J. LaMont Keen and
Darrel T. Anderson.
The complaints alleged that, during the purported class period, IDACORP and/or certain of its officers and/or
directors made materially false and misleading statements or omissions about the company's financial
outlook in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and
Rule 10b-5, thereby causing investors to purchase IDACORP's common stock at artificially inflated prices.
More specifically, the complaints alleged that IDACORP failed to disclose and misrepresented the following
material adverse facts which were known to defendants or recklessly disregarded by them: (1) IDACORP
failed to appreciate the negative impact that lower volatility and reduced pricing spreads in the western
wholesale energy market would have on its marketing subsidiary, IE; (2) IDACORP would be forced to limit
its origination activities to shorter-term transactions due to increasing regulatory uncertainty and continued
deterioration of creditworthy counterparties; (3) IDACORP failed to account for the fact that IPC may not
recover from the lingering effects of the prior year's regional drought and (4) as a result of the foregoing,
defendants lacked a reasonable basis for their positive statements about IDACORP and their earnings
projections. The Powell complaint also alleged that the defendants' conduct artificially inflated the price of
IDACORP's common stock. The actions seek an unspecified amount of damages, as well as other forms of
relief. By order dated August 31,2004, the court consolidated the Powell and Shorthouse cases for pretrial
purposes, and ordered the plaintiffs to file a consolidated complaint within 60 days. On November 1, 2004,
IDACORP and the directors and officers named above were served with a purported consolidated complaint
captioned Powell, et al. v. IDACORP, Inc., et aI., which was filed in the U.S. District Court for the District of
Idaho.
The new complaint alleged that during the class period IDACORP and/or certain of its officers and/or
directors made materially false and misleading statements or omissions about its business operations, and
specifically the IE financial outlook, in violation of Rule 10b-5, thereby causing investors to purchase
IDACORP's common stock at artificially inflated prices. The new complaint alleged that IDACORP failed to
disclose and misrepresented the following material adverse facts which were known to it or recklessly
disregarded by it: (1) IDACORP falsely inflated the value of energy contracts held by IE in order to report
higher revenues and profits; (2) IDACORP permitted IPC to inappropriately grant native load priority for
certain energy transactions to IE; (3) IDACORP failed to file 13 ancillary service agreements involving the
sale of power for resale in interstate commerce that it was required to file under Section 205 of the Federal
Power Act; (4) IDACORP failed to file 1,182 contracts that IPC assigned to IE for the sale of power for resale
in interstate commerce that IPC was required to file under Section 203 of the Federal Power Act; (5)
IDACORP failed to ensure that IE provided appropriate compensation from IE to IPC for certain affiliated
energy transactions; and (6) IDACORP permitted inappropriate sharing of certain energy pricing and
transmission information between IPC and IE. These activities allegedly allowed IE to maintain a false
perception of continued growth that inflated its earnings. In addition, the new complaint alleges that those
earnings press releases, earnings release conference calls, analyst reports and revised earnings guidance
releases issued during the class period were false and misleading. The action seeks an unspecified amount
of damages, as well as other forms of relief. IDACORP and the other defendants filed a consolidated motion
to dismiss on February 9,2005, and the plaintiffs filed their opposition to the consolidated motion to dismiss
on March 28, 2005. IDACORP and the other defendants filed their response to the plaintiff's opposition on
April 29, 2005 and oral argument on the motion was held on May 19, 2005.
On September 14, 2005, Magistrate Judge Mikel H. Williams of the U.S. District Court for the District of Idaho
issued a Report and Recommendation that the defendants' motion to dismiss be granted and that the case
be dismissed. The Magistrate Judge determined that the plaintiffs did not satisfactorily plead loss causation
(Le., a causal connection between the alleged material misrepresentation and the loss) in conformance with
the standards set forth in the recent United States Supreme Court decision of Dura Pharmaceuticals, Inc. v.
Broudo, 544 U.S.336, 125 S. Ct. 1627 (2005). The Magistrate Judge also concluded that it would be futile to
afford the plaintiffs an opportunity to file an amended complaint because it did not appear that they could cure
the deficiencies in their pleadings. Each party filed objections to different parts of the Magistrate Judge's
Report and Recommendation.
On March 29,2006, the U.S. District Court for the District of Idaho (Judge Edward J. Lodge) issued an Order
in this case (Powell v. IDACORP) adopting the Report and Recommendation of Magistrate Judge Willams
issued on September 14, 2005, granting the defendants' (IDACORP and certain of its offcers and directors)
motion to dismiss because plaintiffs failed to satisfy the pleading requirements for loss causation. However,
Judge Lodge modified the Report and Recommendation and ruled that plaintiffs had until May 1, 2006, to file
an amended complaint only as to the loss causation element. On May 1, 2006, the plaintiffs filed an
amended complaint. The defendants filed a motion to dismiss the amended complaint on June 16, 2006,
asserting that the amended complaint stil failed to satisfy the pleading requirements for loss causation.
Briefing on this most recent motion to dismiss was completed on August 28, 2006, and oral argument was
held on February 26,2007.
On May 21,2007, the U.S. District Court for the District of Idaho granted the defendants' motion to dismiss
the amended complaint because it failed to satisfy the pleading requirements for loss causation. The court
also denied the plaintiffs' request to further amend the complaint.
On June 19, 2007, the plaintiffs filed a notice of appeal from the District Court's judgment to the United States
Court of Appeals for the Ninth Circuit. On October 1, 2007, the plaintiffs filed a motion for voluntary dismissal
of their appeal, with prejudice, with both sides to assume their own costs. IDACORP and the other
defendants did not offer or tender any consideration for this motion, nor did the defendants oppose the
motion. The Ninth Circuit granted plaintiffs' motion on October 3,2007 and the order dismissing the appeal
was filed with the District Court on October 9,2007. This action is now concluded.
Western Shoshone National Council: On April 10, 2006, the Western Shoshone National Council (which
purports to be the governing body of the Western Shoshone Nation) and certain of its individual tribal
members filed a First Amended Complaint and Demand for Jury Trial in the U.S. District Court for the District
of Nevada, naming IPC and other unrelated entities as defendants.
Plaintiffs allege that IPC's ownership interest in certain land, minerals, water or other resources was
converted and fraudulently conveyed from lands in which the plaintiffs had historical ownership rights and
Indian title dating back to the 1860's or before. Although it is unclear from the complaint, it appears plaintiffs'
claims relate primarily to lands within the state of Nevada. Plaintiffs seek a judgment declaring their title to
land and other resources, disgorgement of profits from the sale or use of the land and resources, a decree
declaring a constructive trust in favor of the plaintiffs of IPC's assets connected to the lands or resources, an
accounting of money or things of value received from the sale or use of the lands or resources, monetary
damages in an unspecified amount for waste and trespass and a judgment declaring that IPC has no right to
possess or use the lands or resources.
On May 1, 2006, IPC filed an Answer to plaintiffs' First Amended Complaint denying all liability to the plaintiffs
and asserting certain affirmative defenses including collateral estoppel and res judicata, preemption,
impossibility and impracticability, failure to join all real and necessary parties, and various defenses based on
untimeliness. On June 19,2006, IPC filed a motion to dismiss plaintiffs' First Amended Complaint, asserting,
among other things, that the Court lacks subject matter jurisdiction and that plaintiffs failed to join an
indispensable party (namely, the United States government). Briefing on the motion to dismiss was
completed on September 28, 2006. Newly decided authority from the United States Court of Federal Claims
in further support of IPC's motion to dismiss was filed on January 3, 2007. On May 31, 2007, the U.S. District
Court granted the defendants' motion to dismiss stating that the plaintiffs' claims are barred by the finality
provision of the Indian Claims Commission Act. On June 8,2007, plaintiffs filed a motion for reconsideration.
On June 25, 2007, the defendants filed an opposition to plaintiffs' motion for reconsideration and plaintiffs
filed their reply to opposition to motion for reconsideration on July 9,2007. The matter is now fully briefed and
submitted to the District Court for decision. IPC intends to vigorously defend its position in this proceeding,
but is unable to predict the outcome of this matter.
Sierra Club Lawsuit . Bridger: In February 2007, the Sierra Club and the Wyoming Outdoor Council filed a
complaint against PacifiCorp in federal district court in Cheyenne, Wyoming for alleged violations of the Clean Air
Act's opacity standards (alleged violations of air pollution permit emission limits) at the Jim Bridger coal fired plant
("Plant") in Sweetwater County, Wyoming. IPC has a one-third ownership interest in the Plant. PacifiCorp owns a
two-thirds interest and is the operator of the Plant. The complaint alleges thousands of violations and seeks
declaratory and injunctive relief and civil penalties of $32,500 per day per violation as well as the costs of litigation,
including reasonable attorney fees.
The U.S. District Court has set this matter for trial commencing in April 2008. Discovery in the matter is ongoing.
In October 2007, the plaintiffs and defendant filed motions for summary judgment on the alleged opacity permit
violations. IPC continues to monitor the status of this matter but is unable to predict its outcome and is unable to
estimate the impact this may have on its consolidated financial positions, results of operations or cash flows.
Snake River Basin Adjudication: IPC is engaged in the Snake River Basin Adjudication (SRBA), a general
stream adjudication, commenced in 1987, to define the nature and extent of water rights in the Snake River
basin in Idaho, including the water rights of IPC. The initiation of the SRBA resulted from the Swan Falls
Agreement, an agreement entered into by IPC and the Governor and Attorney General of Idaho in October
1984 to resolve litigation relating to IPC's water rights at its Swan Falls project. IPC has filed claims to its
water rights for hydropower and other uses in the SRBA. Other water users in the basin have also filed
claims to water rights. Parties to the SRBA may file objections to water right claims that adversely affect or
injure their claimed water rights and the Idaho District Court for the Fifth Judicial District, which has
jurisdiction over SRBA matters (SRBA Court), then adjudicates the claims and objections and enters a
decree defining a part's water rights. IPC has filed claims for all of its hydropower water rights in the SRBA,
is actively protecting those water rights, and is objecting to claims that may potentially injure or affect those
water rights. One such claim involves a notice of claim of ownership filed on December 22, 2006, by the
State of Idaho, for a portion of the water rights held by IPC that are subject to the Swan Falls Agreement.
On May 10, 2007. in order to protect its claims and the availability of water for power purposes at its facilities,
and in response to the claim of ownership filed by the State, IPC filed a complaint and petition for declaratory
and injunctive relief regarding the status and nature of IPC's water rights and the respective rights and
responsibilities of the parties under the Swan Falls Agreement.
In conjunction with the filing of the complaint and petition, IPC filed motions with the court to stay all pending
proceedings involving the water rights of IPC and to consolidate those proceedings into a single action where
all issues relating to the Swan Falls Agreement can be determined.
IPC alleged in the complaint, among other things, that contrary to the parties' belief at the time the Swan
Falls Agreement was entered into in 1984, the Snake River basin above Swan Falls was over-appropriated
and as a consequence there was not in 1984, and there currently is not, water available for new upstream
uses over and above the minimum flows established by the Swan Falls Agreement; that because of this
mutual mistake of fact relating to the over-appropriation of the basin, the Swan Falls Agreement should be
reformed; that the State's December 22,2006, claim of ownership to IPC's water rights should be denied;
and that the Swan Falls Agreement did not subordinate IPC's water rights to aquifer recharge.
On May 30,2007, the State filed motions to dismiss IPC's complaint and petition. These motions were
briefed and, together with IPC's motions to stay and consolidate the proceedings, were argued before the
Court on June 25, 2007.
On July 23,2007, the court issued an Order granting in part and denying in part the State's motion to
dismiss, consolidating the issues into a consolidated sub case before the court and providing for discovery
during the objection period; a scheduling conference is set for December 17, 2007. In its Order, the court
denied the majority of the State's motion to dismiss, refusing to dismiss the complaint and finding that the
court has jurisdiction to hear and determine virtually all the issues raised by IPC's complaint that relate to
IPC's water rights and the effect of the Swan Falls Agreement upon those water rights. This includes the
issues of ownership, whether IPC's water rights are subordinated to recharge and how those water rights are
to be administered relative to other water rights on the same or connected resources. The court did find that
by virtue of a state statute the IDWR, and its director, could not be parties to the SRBA and therefore stayed
IPC's claims against the IDWR and its director pending resolution of the issues to be litigated in the SRBA, or
unti further order of the court.
Consistent with IPC's motion to consolidate and stay the proceedings, the court consolidated all of the issues
associated with IPC's water rights before the court and stayed that proceeding to allow other parties that may
be affected by the litigation to file responses or intervene in the consolidated proceedings by December 5,
2007. IPC is unable to predict the outcome of the consolidated proceedings.
Renfro Dairy: On September 28, 2007, the principals of Renfro Dairy near Wilder, Idaho filed a lawsuit in
the District Court of the Third Judicial District of the State of Idaho (Canyon County) against IDACORP and
IPC. The plaintiffs' complaint asserts claims for negligence, negligence per se, gross negligence, nuisance,
and fraud. The claims are based on allegations that from 1972 unti at least March 2005, IPC discharged
"stray voltage" from its electrical facilities that caused physical harm and injury to the plaintiffs' dairy herd.
Plaintiffs seek compensatory damages of not less than $1 millon.
Plaintiffs have not yet served their complaint on IDACORP or IPC. If the action is pursued by the plaintiffs, the
companies intend to vigorously defend their position in this proceeding and believe this matter will not have a
material adverse effect on their consolidated financial positions, results of operations or cash flows.
. )
ATTACHMENT ll(d)
IDAHO POWER COMPANY
STATEMENT OF RETAINED EARNINGS
AND
UNDISTRIBUTED SUBSIDIARY EARNINGS
For the Twelve Months Ended September 30, 2007
Retained Earnings
Retained earnings (at the beginning of period)........ .................... ............... ....................
Balance transferred from income....................................................................................
Retained earnings adjustment for the adoption of FIN 48 as of January 1, 2007...........
Total.....................................................................................................
Dividends on common stock...........................................................................................
Retained earnings (at the end of period).........................................................................
Undistributed Subsidiary Earnings
Balance (at beginning of period).....................................................................................
Equity in earnings for the period......................................................................................
Balance (at end of period)...............................................................................................
$ 399,988,429
80,510,683
15,135,586
495,634,698
52,611,252
$ 443,023,446
$ 45,921,937
5,879,267
$ 51,801,204
ATTACHMENT ll(e)
IDAHO POWER COMPANY
STATEMENT OF INCOME
For the Twelve Months Ended September 30, 2007
Operating Revenues..... ..... ........... ................................... ... ........... ....... .............. $
Operating Expenses:
Purchased power....................................................................................
Fuel........................................................................................................
Power cost adjustment.......................... ... ... ... .....................................
Other operation and maintenance expense............................................
Depreciation expense. ............ .... ...................................... .......................
Amortization of limited-term electric plant.............................................
Taxes other than income taxes...............................................................
Income taxes - Federal................... ............. ............... ...... .......... ............
Income taxes - Other...............................................................................
Provision for deferred income taxes................................ ................... .....
Provision for deferred income taxes - Credit.........................................
Investment tax credit adjustment... ........ ........... ............ ............ .............
Total operating expenses..................................................................
Operating Income........... ............................... ...... ................. ..... ......................
Other Income and Deductions:
Allowance for equity funds used during construction..............................
Income taxes....... ... ....... ........................... ......... ......................................
Other - Net..............................................................................................
Net other income and deductions.......................................... .................
Income Before Interest Charges........................... ..........................................
Interest Charges:
Interest on first mortgage bonds.......... ............... ....................... ....... ......
Interest on other long-term debt..................................... ............... ........
Interest on short-term debt.......................... ................... ............... ..........
Amortization of debt premium, discount and
expense - Net.....................................................................................
Other interest expense........................................... .................................
Total interest charges............................................................
Allowance for borrowed funds used during construction - Credit..........
Net interest charges......................................................... .....
Net Income......................................................................................................
Actual
862,524,100
295,173,825
132,885,625
(130,055,062)
288,186,728
93,708,366
11,268,773
16,971,498
5,338,489
(4,481,494)
41,031,744
(10,086,325)
1,419,084
741,361,251
121,162,849
5,958,237
4,699,191
6,556,775
17,214,203
138,377,052
48,745,750
6,377,351
4,861,944
2,314,997
2,325,947
64,625,989
6,759,620
57,866,369
$80,510,683
The accompanying Notes to Financial Statements are an integral part of this statement
c:\documents and setlngs\pah2878\1ocal settings\temporary internet files\olk52f\incoe statement 12 mo end 9-30.xls
ATTACHMENT ILL
STATE OF IDAHO )
COUNTY OF ADA ) ss.
CITY OF BOISE )
I, PATRICK A. HARGTON, the undersigned, Secretar of Idaho Power
Company, do hereby certify that the following constitutes a full, true and correct copy of the
resolutions adopted by the Board of Directors on September 20, 2007, relating to the
establishment of a shelf registration for the issuance of up to $350 million of First Mortgage
BondslMedium- Term Notes or Debt Securities of the Company, and that said resolutions have
not been amended or rescinded and are in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this J.1ay of
December, 2007.
f#J11l -lsI Patrick A. Harn
Secretar
(CORPORATE SEAL)
RESOLVED, That the proper offcers of the Company be, and they
hereby are, authorized and empowered to make, execute and file, in the name and
on behalf of the Company, such applications and other documents and any
amendments or supplements to such applications and documents with the state
regulatory authorities having jurisdiction over the Company and/or its securties
as may be necessary to obtain an exemption from competitive bidding
requirements and to facilitate the creation, issuance, sale and delivery by this
Company in one or more series from time to time of (a) first mortgage bonds
("First Mortgage Bonds") in an aggregate principal amount not exceeding
$350,000,000 and (b) unsecured debt securities ("Debt Securities", and with the
First Mortgage Bonds, collectively referred to as the "Securties") in an aggregate
principal amount not exceeding $350,000,000; provided, however, that the total
principal amount of First Mortgage Bonds and Debt Securities shall not, in the
aggregate, exceed $350,000,000 and to enter into swap or hedging arangements
with respect to any First Mortgage Bonds or Debt Securities; and be it
FURTHER RESOLVED, That the proper officers of the Company be, and
they hereby are, authorized to prepare and file with the Securties and Exchange
Commission one or more registration statements (each including a prospectus)
and any amendments (including post-effective amendments) or supplements
thereto, for the registration under the Securities Act of 1933, as amended, of the
Securities and for qualification under the Trust Indenture Act of 1939, as
amended, of the Company's Mortgage and Deed of Trust, dated as of October 1,
1937, as heretofore supplemented and as it is proposed to be further supplemented
by a supplemental indenture or indentures and for qualification under the Trust
Indenture Act of 1939, as amended, of an indenture of the Company relating to
the Debt Securties, as it is proposed to be supplemented by a supplemental
indenture or indentures; and be it
FURTHER RESOLVED, That J. LaMont Keen, Thomas R. Saldin,
Darrel T. Anderson and Elizabeth W. Powers, be, and they hereby are, appointed
and designated as the persons duly authorized to receive communications and
notices from the Securities and Exchange Commission with respect to said
registration statement; and be it
FURTHER RESOLVED, That the Company hereby appoints J. LaMont
Keen, Darrel T. Anderson, Thomas R. Saldin, and each of them severally, as the
true and lawful attorney and attorneys of the Company with full power to act with
or without the others and with full power of substitution and resubstitution to
execute said registration statement and any amendment or amendments thereto,
for and on behalf of the Company; and that each offcer and director of the
Company executing said registration statement and any amendment or
amendments thereto on behalf of the Company, be, and he hereby is, authorized to
appoint J. LaMont Keen, Darel T. Anderson, Thomas R. Saldin, and any agent
named for service in said registration statement, and each of them severally, his
true and lawful attorney or attorneys with power to act with or without the other
and with full power of substitution and resubstitution, to execute in his name,
place and stead, in his capacity as an offcer or director of the Company, such
registration statement and any amendment or amendments thereto, and all
instruments necessary or incidental in connection therewith, and to file the same
with the Securties and Exchange Commission, with full power and authority to
each of said attorneys to do and perform, in the name and on behalf of the said
offcers or directors, or any of them, every act whatsoever necessary or desirable
to be done in the premises as fully and to all intents and puroses as such offcer
or director might or could do in person; and be it
FURTHER RESOLVED, That the proper offcers of the Company be, and
they hereby are, authorized and empowered to take, in the name and on behalf of
the Company, any and all action which they may deem necessar or desirable in
order to effect the registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of any of the states or terrtories of the
United States of America and the District of Columbia, and in connection
therewith to execute, acknowledge, verify, deliver, file and publish all such
applications, reports, agreements, resolutions and other papers, documents and
instrments that may be required or appropriate under such laws, and to take any
and all other action which may be deemed by them to be necessar or desirable in
order to maintain such registration or qualification for as long as they deem it to
be in the best interests of the Company; and be it
FURTHER RESOLVED, That upon obtaining the necessary regulatory
authorizations, and upon effectiveness of the registration statement under the
Securities Act of 1933, and, if applicable, the relevant indenture becoming
qualified under the Trust Indenture Act of 1939, as amended, the proper offcers
of the Company be, and they hereby are, authorized to issue and sell, or cause to
be issued and sold, all or any portion of the Securities either pursuant to
competitive bidding, negotiated underwriting, private sale, through agents,
directly to an agent at a negotiated discount or directly to purchasers, upon such
terms and conditions and at a price or prices as are established by the Board of
Directors by these resolutions or may hereafter be established by the Board of
Directors or the Executive Committee of this Board; and be it
FURTHER RESOLVED, That the President, any Vice President or the
Treasurer of the Company be, and each of them hereby is, authorized to enter into
an Underwriting Agreement, a Purchase Agreement, a Selling Agency Agreement
and/or a Distribution Agreement in the form or forms to be approved by the Board
of Directors or the Executive Committee of this Board, with such underwters,
purchasers and/or sales agents as the Board of Directors or the Executive
Committee of this Board shall determine for the sale by the Company of the
Securities and to enter into swap or hedging arrangements with respect to any
First Mortgage Bonds or Debt Securities; and be it
FUTHER RESOLVED, That there are hereby created five new series of
First Mortgage Bonds, under the Company's Mortgage and Deed of Trust, dated
as of October 1, 1937, as supplemented, each to be designated "First Mortgage
Bonds, _ Series due _" or "First Mortgage Bonds, Secured Medium-Term
Notes, Series _", and the issuance by the Company of not to exceed
$350,000,000 in aggregate principal amount of such five series of First Mortgage
Bonds is hereby authorized and that, pursuant to the provisions of the Company's
Mortgage and Deed of Trust, dated as of October 1, 1937, as supplemented, the
proper officers of the Company be, and they hereby are, authorized to execute
under the seal of the Company and to deliver to Deutsche Ban Trust Company
Americas as Corporate Trustee under said Mortgage, First Mortgage Bonds in a
total aggregate principal amount not to exceed $350,000,000, in fully registered
form in denominations of $1,000 and any multiple or multiples thereof; that this
Board of Directors hereby determines that all of the First Mortgage Bonds of each
such series shall mature on the date or dates and shall bear interest at the rate or
rates and be payable on the date or dates provided in the Supplemental Indenture
providing for the creation of such series or, if Secured Medium-Term Notes,
Series _' this Board of Directors hereby determines that such First Mortgage
Bonds to be issued from time to time shall (i) bear interest at such rate or rates
(which may be fixed or variable), (ii) mature on such date or dates from nine (9)
months to thirty (30) years from the date of issue, (iii) contain such provisions
with respect to the redemption thereof prior to maturity, and the dates and prices
associated therewith, as may be appropriate upon due consideration of current
market conditions and the Company's general financing plan, and (iv) have such
other terms and provisions, all as may be determined from time to time by the
President, any Vice President or the Treasurer of the Company and as shall be set
forth or referred to in, and confirmed by, written order or orders for the
authentication and delivery of the First Mortgage Bonds of such series under the
Company's Mortgage and Deed of Trust, as heretofore supplemented, and each
such written order shall conclusively establish the determination by the Board of
Directors of the terms of the principal amount of the First Mortgage Bonds of
such series subject to such written order, both principal and interest to be payable
at the office or agency of the Company in the Borough of Manattan, The City of
New York, and at the option of the Company, interest on each said First Mortgage
Bond may also be payable at the offce of the Company in Boise, Idaho, in such
coin or currency of the United States of America as at the time of payment is legal
tender for public and private debts; and that such First Mortgage Bonds shall be
.
otherwise redeemable, registrable, transferable and exchangeable as otherwise
contemplated in the form established by the Board of Directors or the Executive
Committee of this Board; and that such First Mortgage Bonds shall contain such
other terms as the Board of Directors or the Executive Committee of this Board
shall approve, such approval to be conclusively evidenced by the actions of the
Board of Directors or the Executive Committee of this Board in setting the terms
of each such series of First Mortgage Bonds and by the execution and delivery
thereofby the offcers executing the same; and be it
FURTHER RESOLVED, That Deutsche Ban Trust Company Americas
be, and it hereby is, requested, upon fulfillment of the requirements specified in
Article V, VI and/or VII of said Mortgage, to authenticate said First Mortgage
Bonds, and deliver the same promptly, in accordance with the written order or
orders of the Company signed by the President or any Vice President, and by the
Treasurer or any Assistant Treasurer of the Company; and be it
FURTHER RESOLVED, That the Executive Committee be, and it hereby
is, authorized to approve one or more Supplemental Indenture(s), supplemental to
the Company's Mortgage and Deed of Trust dated as of October 1, 1937; and that
the proper officers of the Company be, and they hereby are, authorized and
directed to execute and deliver, on behalf of the Company, said Supplemental
Indenture(s) with such terms therein as the Executive Committee or the offcers
executing the same may approve, their approval of any such terms and/or changes
to be conclusively evidenced by the actions of the Executive Committee in setting
the terms of each such series of First Mortgage Bonds or by the execution and
delivery thereof by the offcers of the Company; and be it
FURTHER RESOLVED, That the proper offcers of the Company be, and
they hereby are, authorized and directed to record and file or cause to be recorded
and fied such Supplemental Indenture(s), when executed, in such offices as in
their judgment may be necessary or appropriate in order to carry out the puroses
of the foregoing resolutions; and be it
FURTHER RESOLVED, That the Executive Committee be, and it hereby
is, authorized to adopt and approve a form of First Mortgage Bond substantially
as provided and set forth in the Company's Mortgage and Deed of Trust, dated as
of October 1, 1937, with such changes thereto as the Executive Committee or the
offcers of the Company executing the same may approve, such approval to be
conclusively evidenced by the actions of the Executive Committee in setting the
terms of said First Mortgage Bonds or by the execution and delivery thereof by
the offcers of the Company; and, until definitive bonds are ready for delivery, the
proper officers of the Company be, and they hereby are, authorized in their
discretion to execute and deliver to Deutsche Ban Trust Company Americas, as
Corporate Trustee, and Deutsche Ban Trust Company Americas, be, and it
hereby is, requested to authenticate and deliver a temporary bond or temporar
bonds in substantially the form approved by the Executive Committee of this
Board; and be it
FURTHER RESOLVED, That if any offcer of the Company who signs,
or whose facsimile signatue appears upon, said First Mortgage Bonds, ceases to
.
be an offcer of the Company prior to the issuance of said Bonds, the Bonds so
signed or bearing such facsimile signature shall nevertheless be valid; and be it
FURTHER RESOLVED, That upon all said First Mortgage Bonds the
signature of the President or a Vice President ofthe Company, the signature of the
Secretary or an Assistant Secretary of the Company and the seal of the Company
may be facsimile; and that any such facsimile signature of any such offcer of the
Company appearing on said First Mortgage Bonds is hereby approved and
adopted as a signature of such offcer of the Company, and any such facsimile
seal of the Company appearing on said First Mortgage Bonds is hereby approved
and adopted as a seal of the Company; and be it
FURTHER RESOLVED, That in respect of said First Mortgage Bonds,
Deutsche Bank Trust Company Americas be, and it hereby is, appointed agent of
this Company (1) in respect of the payment of the principal of, and interest (and
premium, if any) on, said First Mortgage Bonds, (2) in respect of the registration,
transfer and exchange of said First Mortgage Bonds, and (3) upon which notices,
presentations and demands to or upon the Company in respect of said First
Mortgage Bonds, and in respect of the Company's said Mortgage and Deed of
Trust, dated as of October 1, 1937, as supplemented, may be given or made; and
be it
FURTHER RESOLVED, That Thomas R. Saldin be, and he hereby is,
appointed Counsel, under the Mortgage, to render any opinions of counsel
required thereunder, and Lisa A. Grow be, and he hereby is, appointed Engineer,
under the Mortgage, to make, execute and deliver any Engineer's Certificate
required thereunder, said appointments to remain in effect until the Trustee
receives wrtten notice to the contrar; and be it
FURTHER RESOLVED, That the Executive Committee and the proper
offcers of this Company be, and they are hereby, authorized to take such actions,
for and on behalf of the Company, relating to the authentication, creation,
issuance, sale and delivery of said First Mortgage Bonds, the execution and
delivery of one or more Supplemental Indentues as hereinabove provided and the
recording and filing of such completed Supplemental Indentures in such offces as
they may deem necessar or desirable, including, without limitation, the
determination of the interest rate and the insertion thereof in the form of said First
Mortgage Bonds and, at their option, in the Supplemental Indentue creating such
series; and be it
FURTHER RESOLVED, That the proper offcers of the Company be, and
they hereby are, authorized and empowered to execute and deliver on behalf of
the Company one or more indentures providing for the issuance of Debt Securities
by the Company, including supplements to any indenture, with such trustee or
trstees as they may appoint, such indenture or indentures, or supplement or
supplements, to be in such form or forms and bear such date or dates as may be
approved by the offcers of the Company executing the same, such approval to be
conclusively evidenced by the execution of said indenture or indentures or
supplement or supplements; and be it
FURTHER RESOLVED, That the proper offcers of the Company be,
and they hereby are, authorized and empowered to appoint any agent, trustee or
registrar necessary or appropriate in connection with the issuance or sale of the
Debt Securities; and be it
FURTHER RESOLVED, That the trustee appointed in connection with
the issuance or sale of the Debt Securities be, and it hereby is, requested, upon
fulfillment of the requirements specified in said indenture, to authenticate said
Debt Securities, and deliver the same promptly, in accordance with the wrtten
order or orders of the Company signed by the President or any Vice President,
and by the Treasurer or any Assistant Treasurer of the Company; and be it
FURTHER RESOLVED, That the proper offcers of the Company be, and
they hereby are, authorized and empowered to execute the Debt Securities in
temporary or definitive form, under manual or facsimile signature, and under the
facsimile seal of the Company attested by the manual or facsimile signature of the
Secretary; and be it
FURTHER RESOLVED, That the Executive Committee and the proper
offcers of this Company be, and they are hereby, authorized to take such actions,
for and on behalf of the Company, relating to the authentication, creation,
issuance, sale and delivery of said Debt Securities, the execution and delivery of
the indenture and one or more supplemental indentures as hereinabove provided,
including, without limitation, the determination of the interest rate and the
insertion thereof in the form of said Debt Securties and, at their option, in the
supplemental indenture creating such series; and be it
FURTHER RESOLVED, That the Executive Committee and the proper
officers of this Company be, and they hereby are, authorized and empowered in
the name and on behalf of the Company to do or cause to be done any and all
other acts and things as they may deem necessary or desirable to consumate the
transactions set forth in and contemplated by these resolutions with full power to
act in the premises, and that all actions of the Executive Committee and the
proper officers of the Company taken pursuant to and in furherance of the
puroses of these resolutions be, and they hereby are, established as actions of
this Board of Directors.
. .
ATTACHMENT iv
.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR AN )
ORDER AUTHORIING THE ISSUANCE AND )
SALE OF UP TO $350,000,000 OF APPLICANT'S)
FIRST MORTGAGE BONDS AND DEBT )SECURTIES )
CASE NO. IPC-E-07-
PROPOSED ORDER
This matter is before the Commission upon the Application of Idaho Power
Company ("Applicant") filed December _' 2007, for authority to issue and sell from time to
time (a) up to $350,000,000 aggregate principal amount of one or more series of Applicant's First
Mortgage Bonds, which may be designated as secured medium-ter notes (Bonds) and (b) up to
$350,000,000 aggregate principal amount of one or more series of unsecured debt securities of
the Applicant (Debt Securties); provided however, that the total principal amount of the Bonds
and Debt Securities to be issued and sold shall not exceed $350,000,000. The Commission,
having fully considered the Application and attached exhibits, its fies and records relating to the
Application and the applicable laws and rules, now makes the following:
FININGS OF FACT
i.
The Commission has jurisdiction pursuant to Title 61, Idaho Code, Chapters one
and nine.
II.
The Applicant is incorporated under the laws of the State ofIdaho and is qualified
to do business in the states of Oregon, Nevada, Montana and Wyoming in connection with its
utility business, with its principal office in Boise, Idaho.
PROPOSED ORDER - 1
..
III.
The Applicant seeks authority to issue and sell, from time to time, (a) up to
$350,000,000 aggregate principal amount of one or more series of the Bonds under its Indenture
of Mortgage and Deed of Trust, dated as of October 1, 1937 as supplemented and amended
("Mortgage"), and as to be fuher supplemented and amended and (b) up to $350,000,000
aggregate principal amount of one or more series of Debt Securities under an unsecured debt
Indenture of Applicant; provided, that the total principal amount of the Bonds and Debt
Securities to be issued and sold shall not exceed $350,000,000.
IV.
The Applicant has filed a registration statement for the Bonds and Debt Securities
with the Securities and Exchange Commission (SEC) pursuant to the shelf registration provisions
of Rule 415 of the Securties Act of 1933, as amended. This will enable the Applicant to take
advantage of attractive market conditions efficiently and rapidly. Under the shelf registration, the
Applicant will be able to issue the Bonds and/or Debt Securities at different times without the
necessity of filing a new registration statement. The Applicant requests authority to issue the
Bonds and/or Debt Securities over a period of two years from the date of this Order.
V.
The Bonds will be issued pursuant to one or more supplemental indentues to the
Mortgage and will be secured equally with the other First Mortgage Bonds of the Applicant. The
Applicant may enter into interest rate hedging arangements with respect to the Bonds, including
treasur interest rate locks, treasury interest rate caps and/or treasury interest rate collars. The
Applicant states that price or prices, issuance date or dates, maturity or maturities, interest rate or
rates (which may be fixed or variable) and/or the method of determination of such rate or rates,
PROPOSED ORDER - 2
time of payment of interest, whether all or a portion of the Bonds will be discounted, whether all
or a portion of the Bonds will be issued in global form, whether interest rate hedging
arrangements will apply to the Bonds, repayment terms, redemption terms, if any, and any other
special terms of the Bonds have not yet been determined and may be different for each issuance
of the Bonds.
VI.
The Bonds may be designated as secured medium-term notes. The medium-term
notes could have maturties from nine months to thirty years. Before issuing medium-term notes
publicly, the Applicant will file a Prospectus Supplement with the SEC setting forth the general
terms and conditions of the medium-term notes to be issued. Upon each issuance of the medium-
term notes pursuant to the Prospectus Supplement, the Applicant will file a Pricing Supplement
with the SEC providing a specific description of the terms and conditions of each issuance of the
medium-term notes, as described in paragraph V above. The Applicant will also fie a copy of
the Prospectus Supplement and Pricing Supplements with the Commission.
VII.
The Debt Securities wil be unsecured obligations of the Applicant and will be
issued under an existing or new unsecured debt Indenture of the Applicant. The Applicant may
enter into interest rate hedging arargements with respect to the Debt Securties, including
treasury interest rate locks, treasury interest rate caps and/or treasury interest rate collars. The
Applicant states that price or prices, issuance date or dates, maturity or maturties, interest rate or
rates (which may be fixed or varable) and/or the method of determination of such rate or rates,
time of payment of interest, whether all or a portion of the Debt Securities will be discounted,
whether all or a portion of the Debt Securities will be issued in global form, whether interest rate
PROPOSED ORDER - 3
..
hedging arrangements will apply to the Debt Securities, repayment terms, redemption terms, if
any, and any other special terms of the Debt Securities have not yet been determined and may be
different for each issuance of the Debt Securities.
VIII.
Applicant states that the Bonds and/or Debt Securities may be sold by public sale
or private placement, directly by the Applicant or through agents designated from time to time or
through underwriters or dealers. If any agents of the Applicant or any underwriters are involved
in the sale of the Bonds and/or Debt Securities, the names of such agents or underwriters, the
initial price to the public (if applicable), any applicable commissions or discounts, and the net
proceeds to the Applicant will be fied by the Applicant with the Commission. If the Bonds are
designated as medium-term notes and sold to an agent or agents as principal, the names of the
agents, the price paid by the agents, any applicable commission or discount paid by the Applicant
to the agents and the net proceeds to the Applicant will be filed with the Commission.
IX.
The net proceeds to be received by the Applicant from the sale of the Bonds
and/or Debt Securties wil be used for the acquisition of property; the construction, completion,
extension or improvement of its facilities; the improvement or maintenance of its service; the
discharge or lawful refunding of its obligations; and for general corporate purposes. To the
extent that the proceeds from the sale of the Bonds or Debt Securties are not immediately so
used, they will be temporarly invested in short-term discounted or interest-bearng obligations.
PROPOSED ORDER - 4
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CONCLUSIONS OF LAW
I.
Applicant is incorporated under the State of Idaho and is duly authorized to do
business in the states of Oregon, Nevada, Montana and Wyoming in connection with its utility
operations.
II.
The Commission has jurisdiction over this Application.
il.
The Commission does not have before it for determination and, therefore, does
not determine the effect of the Bonds and/or Debt Securties on rates to be charged by Applicant
for electric service to consumers in the State of Idaho.
IV.
The proposed issuance and sale of the Bonds and/or Debt Securties are for a
lawful purpose and are within Applicant's corporate powers. The proposed transaction is in the
public interest, and a formal hearng on this matter would serve no public purose.
V.
All fees have been paid by Applicant in accordance with Idaho Code 61-905.
PROPOSED ORDER - 5
. ..
ORDER
IT is THEREFORE ORDERED that the Application ofIdaho Power Company to
issue and sell from time to time (a) up to $350,000,000 aggregate principal amount of one or
more series of the Bonds and (b) up to $350,000,000 aggregate principal amount of one or more
series of the Debt Securities in the ways and for the purposes set forth in its Application be, and
the same is hereby granted; provided, that the total principal amount of the Bonds and Debt
Securities to be issued and sold shall not exceed $350,000,000. This authorization shall be for
two years from the date of this order. Applicant may request an extension of this authorization
by letter fied with the Commission prior to the expiration of such two-year period.
IT is FURTHER ORDERED that Applicant notify the Commission by letter
within seven (7) days (or as soon as possible, if the required information is not available within
seven (7) days) before the issuance of the Bonds and/or Debt Securties of the likely range of
interest rates and other terms for the securities, unless, in the case of Bonds, the Bonds are issued
as medium-term notes.
IT is FURTHER ORDERED that Applicant fie, as promptly as possible after the
issuance of each series of Bonds, a copy of the Prospectus Supplement showing the terms of the
sale, and the names of the purchasers or underwters or agents with the Commission. If the
Applicant issues Bonds designated as medium-term notes, the Applicant's reporting requirements
shall consist of fiing with the Commission a copy of the Prospectus Supplement for the medium-
term notes as filed with the SEC. The Applicant shall also file with the Commission a copy of
the Pricing Supplements filed with the SEC, setting forth the specific terms and conditions for
each issuance of the medium-term notes.
PROPOSED ORDER - 6
-If
IT is FURTHER ORDERED that Applicant file, as promptly as possible after the
issuance of each series of Debt Securities, a copy of the Prospectus Supplement showing the
terms of the sale, and the names of the purchasers or underwriters or agents with the
Commission.
IT is FURTHER ORDERED that nothing in this order shall be constred to
obligate the state ofIdaho to payor guarantee in any manner whatsoever any security authorized,
issued, assumed, repurchased, defeased or guaranteed under the provisions ofthis order.
IT is FURTHER ORDERED that this authorization is without prejudice to the
regulatory authority of this Commission with respect to rates, services, accounts, evaluation,
estimates or determination of costs, or any other matter which may come before this Commission
pursuant to its jurisdiction and authority as provided by law.
IT is FURTHER ORDERED that the issuance of this order does not constitute
acceptance of Idaho Power Company's exhibits or other material accompanying this Application
for any purpose other than the issuance of this order.
DONE BY ORDER of the Idaho Public Utilities Commission at Boise, Idaho this
_day of
MACK A. REDFORD, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
JIM KEMPTON, COMMISSIONER
PROPOSED ORDER - 7
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ATTEST:
JEAN D. JEWELL
Commission Secretary
PROPOSED ORDER - 8