20100902Pricing Supplements 1 and 2.pdf

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An IDACORP Company
IDAHO POWER COMPANY
P.O. BOX 70
BOISE, IDAHO 83707
itn~SEl - ¿ l\t\ S'2J'PATRICK A. HARINGTON
Corporate Secretary
Ms. Jean D. Jewell
Secretary
Idaho Public Utilities Commission
Statehouse
Boise, Idaho 83720
September 1, 2010
Re: In the Matter of the Application of Idaho Power Company for an Order
Authorizing the Issuance and Sale of up to $500,000,000 of Idaho Power's First
Mortgage Bonds and Debt Securities
Case No. IPC-E-10-1O
Dear Ms. Jewell:
On August 30, 2010, Idaho Power Company issued $200 milion of secured Medium-
Ter Notes ("MTNs"), as authorized under the Commission's Order No. 31053 in the above
referenced case. The MTNs were issued in the form of $100 milion of 3.40% First Mortgage
Bonds due 2020 and $100 milion of 4.85% First Mortgage Bonds due 2040.
Enclosed for filing with the Commission in connection with the issuance of the MTNs are
five copies of Pricing Supplement No.1 for the $100 milion of 3.40% First Mortgage Bonds due
2020 and Pricing Supplement No. 2 for the $100 milion of 4.85% First Mortgage Bonds due
2040. Also included with the Pricing Supplements are copies of the Prospectus Supplement
dated June 17,2010 for the $500 milion shelf registration the MTNs were issued under.
Please contact me at 388-2878 if you have any questions regarding this filing.
c:S.R. Keen
R.L. Mils
S. Spaulding
Terr Carlock-IPUC w/attachments
Sincerely,
~šlqa#1ft
f00039563.DOC; 1)p.o. Box 70 Boise, ID 83707
Telephone [phone], Fax [phone]
pharrington(gdahopower.com
Pricing Supplement No.1 Dated August 25,2010
(To Prospectus dated May 25,2010 and
Prospectus Supplement dated June 17, 2010)
relating to First Mortgage Bonds,
Secured Medium-Term Notes, Series I
f:; ~."; E:.I
ZUlÎ/ SfP -2 "If 8: 2:
$100,000,000
IDAHO POWER COMPANY
3.400/0 First Mortgage Bonds due 2020
Title of Securties:3.40% First Mortgage Bonds due 2020 (the
"Notes")
Record Dates:
Maturity Date:
Redemption:
Form:
$100,000,000
99.501 % payable in immediately available fuds,
plus accrued interest from the Original Issue Date
0.625%
98.876%
3.40% per annum
August 30, 2010
August 30, 2010
November 1 and May 1, commencing November
1,2010
October 15 and April 15
November 1,2020
See "Optional Redemption" below
Book-Entr
Principal Amount:
Price to Public:
Purchasers' Discount:
Proceeds to Us after Discount:
Interest Rate:
Original Issue Date:
Original Interest Accrual Date:
Interest Payment Dates:
BofA Merrill Lynch
J.P. Morgan
Wells Fargo Securities
Mitsubishi UF J Securities
KeyBanc Capital Markets
RBC Capital Markets
SunTrust Robinson Humphrey
US Bancorp
Optional Redemption:
We may, at our option, redeem the Notes, in whole at any time, or in part from time to time,
prior to the matuty date, as follows:
· Prior to August 1, 2020, at a redemption price equal to the greater of:
· 100% of the principal amount of the Notes to be redeemed and
· as determined by an Independent Investment Banker, the sum of the
present values of the remaining scheduled payments of principal on the
Notes to be redeemed and interest thereon (not including any portion of
payments of interest accrued as of the date fixed for redemption),
discounted to the date fixed for redemption on a semi-annual basis
(assumng a 360-day year consisting of twelve 30-day months) at the
Treasur Rate (as defined below), plus 15 basis points
· On or after August 1, 2020, at a redemption price equal to 100% of the principal
amount of the Notes to be redeemed,
plus in any case interest accrued and unpaid on the principal amount of the Notes to be redeemed
to the date fixed for redemption.
We wil mail notice of any redemption at least 30 days before the date fixed for redemption to
each holder of the Notes to be redeemed.
"Treasur Rate" means, with respect to any date fixed for redemption, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasur Issue, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasur Price for such date.
"Comparable Treasur Issue" means the United States Treasur securty selected by an
Independent Investment Baner as having a matuty comparable to the remaining term of the
Notes to be redeemed that would be used, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securties of comparable
maturity to the remaining term of the Notes to be redeemed.
"Comparable Treasur Price" means, with respect to any date fixed for redemption,
(1) the average of the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) on the third business day preceding
such date, as set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Ban of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Governent Securties" or
(2) if such release (or any successor release) is not published or does not contain such
prices on such business day, (a) the average of the Reference Treasury Dealer Quotations
for such date, after excluding the highest and lowest such Reference Treasur Dealer
2
Quotations for such date, or (b) if the corporate trustee obtains fewer than four such
Reference Treasur Dealer Quotations, the average of all the quotations received.
"Independent Investment Banker" means anyone of the Reference Treasur Dealers that we may
appoint.
"Reference Treasur Dealer Quotations" means, with respect to each Reference Treasury Dealer
and any date fixed for redemption, the average, as determined by the corporate trustee, of the bid
and asked prices for the Comparable Treasur Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the corporate trustee by such Reference Treasur Dealer
at 5:00 p.m. New York City time on the third business day preceding the date fixed for
redemption.
"Reference Treasur Dealer" means (1) each of Banc of America Securities LLC, J.P. Morgan
Securities Inc. and a Primary Treasur Dealer (as defined below) selected by Wells Fargo
Securities, LLC, and their respective successors, unless any of them ceases to be a primar U.S.
Governent securities dealer in New York City (a "Primary Treasury Dealer"), in which case we
wil substitute another Primary Treasury Dealer and (2) any other Primary Treasur Dealers that
we may select.
Supplemental Plan of Distribution and Terms Agreement:
We have entered into a terms agreement with the purchasers of the Notes with respect to the
Notes. The purchasers are committed to take and pay for all of the Notes if any are purchased.
Subject to certain conditions, each purchaser has severally agreed to purchase the principal
amount ofthe Notes indicated in the table below:
Name Principal Amount of Notes
Banc of America Securities LLC $27,500,000
J.P. Morgan Securties Inc.25,000,000
Wells Fargo Securities, LLC 25,000,000
Mitsubishi UFJ Securities (USA), Inc.10,500,000
KeyBanc Capital Markets Inc.3,000,000
RBC Capital Markets Corporation 3,000,000
SunTrust Robinson Humphrey, Inc.3,000,000
U.S. Bancorp Investments, Inc.3,000,000
Total $100,000,000
3
The Notes sold by the purchasers to the public wil initially be offered at the initial price to the
public set forth on the cover of this pricing supplement. Any Notes sold by the purchasers to
securities dealers may be sold at a discount from the initial price to the public of up to 0.375% of
the principal amount ofthe Notes. Any such securities dealers may resell any Notes purchased
from the purchasers to certain other brokers or dealers at a discount from the initial price to the
public of up to 0.125% ofthe principal amount of the Notes.
Some of the purchasers or their affliates (i) paricipate in our commercial paper program and
may from time to time hold our commercial paper and (ii) are lenders and/or agents under our
credit agreement, dated as of April 25, 2007, as amended.
Concurent with the offering of the Notes, we are also offering, through a separate terms
agreement and pricing supplement, $100,000,000 aggregate principal amount of 4.85% first
mortgage bonds due 2040 (the "2040 Notes"), which wil rank equally and ratably with the Notes
in all respects. While these offerings are concurent, they are not dependent or contingent on one
another. We cannot assure you that we will complete the offering of the 2040 Notes.
Interest Payment Dates:
We wil make interest payments on the Notes on November 1 and May 1 of each year,
commencing November 1,2010, and at matuty. The record date for the November 1 payment
of interest wil be October 15 and the record date for the May 1 payment of interest wil be April
15.
Use of Proceeds:
The purchasers wil pay the net proceeds from the sale of the Notes to us in immediately
available funds. After our receipt ofthe net proceeds, the Notes wil be credited to the
purchasers' accounts at The Depository Trust Company free of payment. We wil use the net
proceeds from the sale of the Notes and the 2040 Notes we are offering concurrently to pay at
maturity our $120 milion 6.60% first mortgage bonds due March 2,2011 and to fund a portion
of our capital requirements. If we do not use the proceeds immediately, we wil temporarily
invest them in short-term investments.
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PROSPECTUS SUPPLEMENT
To Prospectus dated May 25, 2010
$500,000,000
Idaho Power Company
First Mortgage Bonds,
Secured Medium-Term Notes, Series I
This prospectus supplement may be used to offer and sell the notes only if accompanied by the
accompanying prospectus.
Idaho Power Company may use this prospectus supplement to offer from time to time its first mortgage
bonds, secured medium-term notes, series 1.
Terms of Sale
The following terms may apply to the notes which we may sell at one or more times. We wil include
final terms for each note you purchase in a pricing supplement.
Matue 9 months to 30 years from date of issue
Fixed interest rate
Interest payable on March 1 and September 1
Held in book-entr form by The Depository Trust Company
Settlement in immediately available funds
May be subject to mandatory redemption or redemption at our option
Minimum denominations of $1 ,000 increased in multiples of $1 ,000
You should carefully consider the risk factors that we have disclosed in our public filings under the
Securities Exchange Act of 1934, as amended, before purchasing the notes.
Neither the Securities and Exchange Commission nor any state securities commission has approved
or disapproved of these notes or determined that this prospectus supplement or the accompanying
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
We may sell the notes directly or indirectly through one or more agents or dealers, including the agents
listed below. The agents are not required to sell any specified number or amount of notes. The agents wil
use their reasonable best efforts to sell the notes offered.
Ifwe sell the notes at 100% of their principal amount, we wil receive between $496,250,000 and
$499,375,000 of the proceeds from the sale of the notes, after paying the agents' commissions of between
$625,000 and $3,750,000.
BofA Merril Lynch
BNY Mellon Capital Markets, LLC
J.P. Morgan
KeyBanc Capital Markets
Mitsubishi UF J Securities
RBC Capital Markets
Sun Trust Robinson Humphrey
US Bancorp
Wells Fargo Securities
Prospectus Supplement dated June 17, 2010
We take responsibility only for the information contained in this prospectus supplement and the
accompanying prospectus and any pricing supplement, including the information that we incorporate by
reference, and any free wrting prospectus that we prepare and distrbute. We have not, and the agents
have not, authorized any other person to provide you with information that is different. If anyone
provides you with different or inconsistent information, you should not rely on it. The information
contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus
and any applicable pricing supplement is accurate only as of its respective date, regardless of the time of
delivery of such document or any sale of the securties offered hereunder. We are not making an offer of
these notes in any state where the offer is not permitted.
TABLE OF CONTENTS
Page
Prospectus Supplement
Description of the Notes ............................................................................................................................S-3
Supplemental Plan of Distrbution..... .......... .... ....... ............... ............... ....... ...... .... .... .............. .............. .... S-4
Prospectus
Risk Factors ..................................................................................................................................................2
Forward-Looking Statements........................................................................................................................2
About Idaho Power Company .......................................................................................................................4
Ratios of Earnings to Fixed Charges.............................................................................................................4
Description of First Mortgage Bonds............................................................................................................5
Description of Debt Securties ........... .... .......... ................. ...... ......... .... ......... .... .................. ........................ 1 1
Book-Entr System.....................................................................................................................................18
Use of Proceeds............................................ ...............................................................................................20
Plan of Distrbution.......................................... ...........................................................................................20
Incorporation of Certin Information by Reference................. ....... ...... ........ .............................................. 22
Where You Can Find More Information.....................................................................................................23
Legal Matters .......... ... ... ...... ...................... ............. .......................... .... ...................................... ................. 23
Experts ........................................................................................................................................................24
S-2
DESCRIPTION OF THE NOTES
General
We are issuing these notes as part of a series of first mortgage bonds under our Indentue
of Mortgage and Deed of Trust, dated as of October 1, 1937, as amended and supplemented.
You should read the following information, which summarizes certain terms of the notes, in
conjunction with the general terms and conditions of the notes and the indenture described under
"Description of First Mortgage Bonds" in the accompanying prospectus.
For each note we offer and sell, we will prepare a pricing supplement to this prospectus
supplement and the accompanying prospectus. The pricing supplement wil include the specific
terms of the note to which it relates and may include modifications of or additions to the more
general terms described in this prospectus supplement and the accompanying prospectus.
The pricing supplement relating to a note wil contain the following important
information:
.
purchase price of the notes, which may be a percentage of the aggregate principal
amount
issue date
matuity date, which wil be from nine months to 30 years from the date of issue
interest rate
interest accrual date
redemption provisions, if any, and
other material terms not inconsistent with the indentue.
.
.
.
.
.
.
The following information applies to the notes that we are offering, unless we specify
otherwise in the pricing supplement.
Except as discussed under "Book-Entry System" in the accompanying prospectus, each
note wil be in book-entry form and not certificated form. The initial depositary for book-entry
notes wil be The Depository Trust Company.
You may buy the notes in denominations of $1 ,000 or any larger amount equally
divisible by $1,000.
Unless we specify otherwise in a pricing supplement and make additional related
disclosure, we wil not offer the notes to non-United States holders. You are a non-United States
holder if you are, for United States federal income tax purposes:
· a nonresident alien individual
· a foreign corporation
· a foreign partership or
· an estate or trst that in either case is not subject to United States federal income
tax on a net income basis on income or gain from a note.
S-3
Interest and Payment on the Notes
Each note wil bear interest at a fixed rate stated on the face of the note. Interest wil be
computed on the basis of a 360-day year of twelve 30-day months. We wil make interest
payments to noteholders on March 1 and September 1 of each year or on the interest payment
dates specified in the pricing supplement, and at matuty or upon earlier redemption.
If any interest payment date, redemption date or maturity date does not fall upon a
business day, we wil make the payment on the next business day. A business day is any day,
other than a Satuday or Sunday, on which banks in The City of New York are not required or
authorized by law to close. If we payor provide for payment on the next business day, no
interest wil accrue on those amounts for the period from and after the interest payment date,
redemption date or matuty date, as the case may be, to the next business day.
We wil make payments of principal, premium, ifany, and interest in respect of the notes
in immediately available funds. We wil make payments on book-entr notes to Cede & Co., the
partnership nominee of The Depository Trust Company.
The record date forthe March 1 payment wil be February 15, and the record date for the
September 1 payment wil be August 15. Ifwe change the interest payment dates, we wil
indicate in the pricing supplement the new record dates. In order to receive interest payments on
a note, you must hold the note on the applicable record date, whether or not the record date is a
business day. We wil begin paying interest on the first interest payment date after the notes
have been issued, provided that the notes are issued before the applicable record date.
Redemption of the Notes
The notes may be subject to redemption, either mandatory or at our option, before they
mature. The pricing supplement wil indicate whether or not a note is subject to redemption and
the terms of redemption, ifany. Ifwe decide to redeem the notes, you wil receive at least 30
days' notice.
Tax Defeasance
Under curent United States federal income tax law, defeasance under the indentue
should be treated as a taxable exchange of the notes to be defeased for an interest in the
defeasance trust. Accordingly, you would recognize gain or loss equal to the difference between
your cost or other tax basis of the notes and the fair market value of your interest in the
defeasance trust. In addition, you might also thereafter be required to include in income your
share of the income, gain or loss of the defeasance trst, which could be a different amount and
includible in income at different times than would be the case in the absence of defeasance under
the indenture. You should consult your own tax advisors as to the specific potential
consequences to you of defeasance under the indentue.
SUPPLEMENTAL PLAN OF DISTRIBUTION
We are offering the notes on a continuing basis through the agents listed on the cover,
each of which has agreed to use to its reasonable best efforts to solicit purchases of the notes.
S-4
We have the right to accept offers to purchase notes and may reject any offer to purchase
notes. The agents may also reject any offer to purchase notes. We wil pay the agents a
commission on any notes sold through the agents. The commission wil range from 0.125% to
0.750% of the principal amount ofthe notes depending on the matuity of the notes.
We may also sell notes to the agents who wil purchase the notes as principal for their
own accounts. Any such sale wil be made at a discount to be agreed upon at the time of sale.
Any notes the agents purchase as principal may be resold at a fixed public offering price, the
market price or other prices determined by the agents at the time of resale.
The agents may resell any notes they purchase as principal to other brokers or dealers at a
discount which may include all or part of the discount the agents received from us. Unless the
applicable pricing supplement states otherwise, the agents will purchase the notes, as principal, at
a price equal to 100% of the principal amount less a discount that equals the applicable
commission on an agency sale of notes of the same matuity.
We may also sell notes directly to investors on our own behalf in those jurisdictions
where we are authorized to do so. We wil not pay any commissions on sales made directly by
us.
We may sell notes through agents other than the agents listed on the cover, subject to
conditions described in the sellng agency agreement that we have entered into with the agents
listed on the cover. The commission applicable to agency sales through any other agents wil be
the same as that applicable to agency sales through the agents listed on the cover.
The agents, whether acting as agent or as principal, may be deemed to be "underwters"
within the meaning of the Securities Act of 1933, as amended. We have agreed to indemnify
each agent against certain liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments made in respect of such liabilities. We have also agreed to reimburse the
agents for certain of their expenses, including the reasonable fees and expenses of their counseL.
The agents may sell to dealers who may resell to investors and the agents may pay all or
part of the discount or commission they receive from us to the dealers. Such dealers may be
deemed to be "underwiters" within the meaning of the Securties Act of 1933. Any discounts or
commissions that an agent receives in purchasing a note as principal and reselling such note, and
any profit on the resale of such note by the agent, may be deemed to be underwriters' discounts
or commissions under the Securities Act of 1933.
Payment of the purchase price of the notes must be made in imediately available fuds.
In addition to offering the notes through the agents described in this prospectus
supplement, we may sell other debt securities. The sale of other debt securties wil reduce the
maximum aggregate amount of notes that we offer by this prospectus supplement.
The notes are a new issue of securities with no established trading market and wil not be
listed on a securities exchange. The agents have advised us that they intend to establish a trading
market for the notes. However, the agents are not obligated to do so and may discontinue any
S-5
market making at any time without notice. No assurance can be given as to the liquidity of the
trading market for the notes.
In connection with the offering, the agents may purchase and sell notes in the open
market. These transactions may include short sales, stabilizing transactions and purchases to
cover positions created by short sales. Short sales involve the sale by the agents of a greater
number of notes than they are required to purchase in the offering. Stabilizing transactions
consist of certain bids or purchases made for the purpose of preventing or retarding a decline in
the market price of the notes while the offering is in progress.
The agents also may impose a penalty bid. This occurs when a particular agent repays to
agents a portion of the underwting discount received by it because the agents have repurchased
notes sold by or for the account of such agent in stabilizing or short coverig transactions.
These activities by the agents may stabilize, maintain or otherwise affect the market price
of the notes. As a result, the price of the notes may be higher than the price that otherwise might
exist in the open market. If these activities are commenced, they may be discontinued by the
agents at any time.
We estimate that our share of the total expenses of the offering, excluding underwriting
discounts and commissions, wil be approximately $2.45 millon.
Each agent and its affiiates may from time to time engage in transactions with, and
perform investment bankng, general bankng and other financial services for, us and our
affliates in the ordinary course of business.
S-6
PROSPECTUS
$500,000,000
IDAHO POWER COMPANY
First Mortgage Bonds
Debt Securities
We may offer from time to time, in one or more series:
. our first mortgage bonds and
. our unsecured debt securities.
We may offer these securities in any combination in one or more offerings up to a
total amount of $500,000,000. This prospectus provides you with a general description of
the securties we may offer. Each time we sell securties, we wil provide a prospectus
supplement that wil contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in this
prospectus. Before you invest, you should carefully read this prospectus and any
supplements, as well as the information that we incorporate by reference in this prospectus.
We may offer these securities directly or through underwters, agents or dealers, as
described in the "Plan of Distribution." The supplements to this prospectus wil describe the
terms of any particular plan of distribution, including any underwriting arrangements.
Our principal executive offices are located at 1221 West Idaho Street, Boise, Idaho
83702-5627, and our telephone number is [phone].
Investing in our securities involves risks. Please see "Risk Factors" on page 2 of
this prospectus as well as the risk factors in our most recent Annual Report on Form
10-K and in any other reports we fie pursuant to the Securities Exchange Act of 1934
that we incorporate by reference in this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
May 25,2010
TABLE OF CONTENTS
Page
Risk Factors ....................................................................................................................................2
Forward-Looking Statements..........................................................................................................2
About Idaho Power Company ........................................................................ ................................. 4
Ratios of Eamings to Fixed Charges ..............................................................................................4
Description of First Mortgage Bonds .............................................................................................5
Description of Debt Securities...................................................................................................... 11
Book-Entr System....................................................................................................................... 18
Use of Proceeds............................................ .................................................................................20
Plan of Distribution........................................ ...............................................................................20
Incorporation of Certain Information by Reference..................................................................... 22
Where You Can Find More Information ...................................................................................... 23
Legal Matters........................................................................................................................ ........ 23
Experts ..........................................................................................................................................24
ABOUT THIS PROSPECTUS
We take responsibility only for the information contained in this prospectus and any
accompanying prospectus supplement, including the information that we incorporate by
reference in this prospectus and any free wrting prospectus that we prepare and distrbute. We
have not authorized any other person to provide you with information that is different. If anyone
provides you with different or inconsistent information, you should not rely on it. We are
offering to sell securities and seeking offers to buy securties only in states where offers and sales
are permitted.
The information contained in or incorporated by reference in this prospectus is accurate
only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any
sale of the securties offered hereunder.
Unless we indicate otherwise, or the context otherwise requires, references in this
prospectus to the "Company," "we," "us" and "our" or similar terms are to Idaho Power
Company.
1
RISK FACTORS
Investing in our securities involves risks. You should carefully consider the risk factors
described in our most recent Annual Report on Form lO-K and in any other reports we file
pursuant to the Securties Exchange Act of 1934 that we incorporate by reference in this
prospectus as well as those included in any prospectus supplement hereto. Our subsequent
fiings with the Securities and Exchange Commission may contain amended and updated
discussions of significant risks.
FORWARD-LOOKING STATEMENTS
In addition to the historical information contained in this prospectus, this prospectus
includes forward-looking statements. In connection with the safe harbor provisions ofthe
Private Securties Litigation Reform Act of 1995, we are hereby fiing cautionary statements.
You should read these cautionary statements with the cautionary statements and risk factors
under "Risk Factors" in this prospectus and in any prospectus supplement and with those
included in our most recent Annual Report on Form lO-K and in any other reports that we file
pursuant to the Securties Exchange Act of 1934 that we incorporate by reference in this
prospectus.
These cautionary statements identify important factors that could cause our actual results
to differ materially from those projected in forward-looking statements made by us or
incorporated by reference in this prospectus or any prospectus supplement. Any statements that
express or involve discussions about expectations, beliefs, plans, objectives, assumptions or
future events or performance are not statements of historical facts and may be forward-looking.
These statements often, but not always, use words or phrases such as "anticipates," "believes,"
"estimates," "expects," "intends," "plans," "predicts," "projects," "may result," "may continue"
or similar expressions. Forward-looking statements involve estimates, assumptions and
uncertainties and are qualified in their entirety by reference to, and are accompanied by, the
following important factors. These factors are diffcult to predict, contain uncertainties, are
beyond our control and may cause actual results to differ materially from those contained in
forward-looking statements:
. the effect of regulatory decisions by the Idaho Public Utilities Commission, the
Oregon Public Utility Commission and the Federal Energy Regulatory
Commission affecting our ability to recover costs and/or earn a reasonable rate of
return including, but not limited to, the disallowance of costs that have been
deferred;
. changes in and compliance with state and federal laws, policies and regulations,
including new interpretations by oversight bodies, which include the Federal
Energy Regulatory Commission, the North American Electric Reliability
Corporation, the Western Electricity Coordinating Council, the Idaho Public
Utilities Commission and the Oregon Public Utility Commission, of existing
policies and regulations that affect the cost of compliance, investigations and
audits, penalties and costs of remediation that mayor may not be recoverable
2
through rates;
. changes in tax laws or related regulations or new interpretations of applicable law
by the Internal Revenue Service or other taing jursdictions;
. litigation and regulatory proceedings, including those resulting from the energy
situation in the western United States, and penalties and settlements that influence
business and profitability;
. changes in and compliance with laws, regulations and policies including changes
in law and compliance with environmental, natual resources and endangered
species laws, regulations and policies and the adoption of laws and regulations
addressing greenhouse gas emissions, global climate change, and energy policies;
. global climate change and regional weather variations affecting customer demand
and hydroelectric generation;
. over-appropriation of surace and groundwater in the Snake River Basin resulting
in reduced generation at hydroelectric facilities;
. construction of power generation, transmission and distrbution facilities,
including an inability to obtain required governental permits and approvals,
rights-of-way and siting, and risks related to contracting, constrction and start-
up;
. operation of power generating facilities, including pedormance below expected
levels, breakdown or failure of equipment, availability of electrcal transmission
capacity and the availability of water, natual gas, coal, diesel and their associated
delivery infrastructues;
. changes in operating expenses and capital expenditues, including costs and
availability of materials, fuel and commodities;
. blackouts or other disruptions of our transmission system or the western
interconnected transmission system;
. population growth rates and other demographic patterns;
. market prices and demand for energy, including strctual market changes;
. increases in uncollectible customer receivables;
. fluctuations in sources and uses of cash;
. results of financing efforts, including the ability to obtain financing or refinance
existing debt when necessary or on favorable terms, which can be affected by
factors such as credit ratings, volatility in the financial markets and other
economic conditions;
. actions by credit rating agencies, including changes in rating criteria and new
interpretations of existing criteria;
. changes in interest rates or rates of inflation;
· pedormance of the stock market, interest rates, credit spreads and other financial
market conditions, as well as changes in governent regulations, which affect the
amount and timing of required contributions to pension plans and the reported
costs of providing pension and other postretirement benefits;
. increases in health care costs and the resulting effect on medical benefits paid for
employees;
. increasing costs of insurance, changes in coverage terms and the ability to obtain
insurance;
3
. homeland security, acts of war or terrorism;
. natual disasters and other natural risks, such as earthquake, flood, drought,
lightning, wind and fire;
. adoption of or changes in critical accounting policies or estimates; and
. new accounting or Securities and Exchange Commission requirements, or new
interpretation or application of existing requirements.
Any forward-looking statement speaks only as of the date on which we make the
statement. New factors emerge from time to time; we cannot predict all factors or assess the
impact of any emerging factors on our business, or the extent to which any factor, or
combination of factors, may cause results to differ materially from those contained in any
forward-looking statement.
ABOUT IDAHO POWER COMPAN
We are an electric utility incorporated under the laws of the State of Idaho in 1989 as
successor to a Maine corporation organized in 1915. In 1998, we reorganized into a holding
company structure and became the principal subsidiary ofIDACORP, Inc. IDACORP, Inc.
owns all of our outstanding common stock.
Weare engaged in the generation, transmission, distribution, sale and purchase of electric
energy. Our service territory covers approximately 24,000 square miles in southern Idaho and
eastern Oregon, with an estimated population of one milion. We hold franchises in 71 cities in
Idaho and nine cities in Oregon and hold certificates from the respective public utility regulatory
authorities to serve all or a portion of 25 counties in Idaho and three counties in Oregon. We are
the parent of Idaho Energy Resources Co., a joint venturer in Bridger Coal Company, which
supplies coal to the Jim Bridger generating plant that we own in part. As of March 31, 2010, we
supplied electric energy to approximately 490,000 general business customers. We own and
operate 17 hydroelectric generation projects and two natural gas-fired plants and share ownership
in three coal-fired generating plants. We rely heavily on hydroelectric power for our generating
needs and are one of the nation's few investor-owned utilities with a predominantly hydroelectric
generating base.
RATIOS OF EARNINGS TO FIXED CHARGES
Ratio of Eamings to Fixed Charges ..........................................
Supplemental Ratio of Earings to Fixed Charges(l) ..............
2005
2.83x
2.78x
2006
3.l2x
3.06x
2007
2.56x
2.52x
2008
2.6lx
2.57x
2009
3.04x
3.0lx
Three Months
Ended March 31,
2010
L.98x
L.97x
Twelve Months Ended December 31,
(1) Includes interest on the guaranty of the American Falls Reservoir Distrct bonds and Milner Dam, Inc. notes.
4
DESCRIPTION OF FIRST MORTGAGE BONDS
We wil issue the first mortgage bonds offered in this prospectus under our Indentue of
Mortgage and Deed of Trust, dated as of October 1, 1937. Deutsche Bank Trust Company
Americas, formerly known as Bankers Trust Company, is the corporate trstee, and Stanley Burg
serves as individual trstee. We have amended and supplemented the indentue in the past and
will supplement it again by one or more supplemental indentues relating to these first mortgage
bonds.
This section briefly summarizes the material provisions of the indenture and
supplemental indentues, which we refer to collectively as the indentue in this section, and uses
some terms that are not defined in this prospectus but are defined in the indenture. This
summary is not complete and we qualify it by reference to the indentue. The indentue is on fie
with the Securities and Exchange Commission, and we incorporate it by reference in this
prospectus. You should read the indenture for a complete understanding of its provisions and for
the definitions of some terms used in this summar. In the sumar below, we include
references to section numbers of the indenture so that you can easily locate those provisions.
Issuance in Series. We issue bonds in series. Each series of bonds may have different
terms. We wil include all of the following information about a specific series of bonds in the
prospectus supplement relating to those bonds:
· the designation and series of the bonds
· the aggregate principal amount of the bonds
· the offering price of the bonds
· the date or dates on which the bonds wil matue
· the interest rate or rates for the bonds, or how we wil determine the interest rate
or rates
· the dates on which we wil pay the interest on the bonds
· the denominations in which we may issue the bonds
· the terms pursuant to which we may redeem the bonds, if any
· whether we wil issue all or a portion of the bonds in global form and
· any other terms or provisions relating to the bonds that are not inconsistent with
the provisions of the indenture.
Form and Exchange. Unless we state otherwise in the prospectus supplement:
· we wil issue the bonds in fully registered form without coupons
5
. a holder of bonds may exchange bonds, without charge, for an equal aggregate
principal amount of bonds of the same series, having the same issue date and with
identical terms and provisions and
. a holder of bonds may transfer bonds, without charge, other than applicable stamp
taxes or other governental charges.
See "Book-Entry System" for a description of additional requirements as to the form and
method of exchange of bonds. We wil describe any additional requirements as to the form and
method of exchange of bonds in the prospectus supplement.
Interest and Payment. We wil pay principal, premium, if any, and interest in U.S.
dollars at Deutsche Bank Trust Company Americas in New York City, and, at our option, at our
offce in Boise, Idaho. Indenture, Section 35
Maintenance Requirements. We wil file a certificate with the corporate trustee within 90
days after the close of each calendar year stating that:
. we have made the necessary expenditues to maintain our propert in good
condition as an operating system or
. we wil designate an additional amount that should be spent for this purose.
If we designate an additional amount, we must deliver to the corporate trstee, within 30 days,
cash equal to that amount less the following deductions:
. expenditues made after the close of the year to maintain the propert and
. any allowances for waiver of our right to issue additional bonds under the
indentue.
Indenture, Section 38
We may withdraw this cash for reimbursement for later expenditues on:
. propert maintenance, repairs, renewals and replacements
. waiver of our right to issue additional bonds under the indentue or
. the purchase or redemption of bonds of any series, unless a supplemental
indentue provides otherwise for a particular series of bonds.
We must spend or appropriate 15% of our annual gross operating revenues for maintenance,
retirement or amortization of our properties. We may, however, anticipate or make up these
expenditues or appropriations within the five years that immediately follow or precede a
particular year. Indenture, Section 38; Second Supplemental, Section 15
6
Improvement or Sinking Fund. There is no sing or improvement fud requirement.
Twenty-seventh Supplemental, Section 14
Security. The indentue secures all bonds issued under the indentue equally and ratably,
without preference, priority or distinction. We may issue additional first mortgage bonds in the
futue, and those first mortgage bonds wil also be secured by the indentue. In the opinion of
our general counsel, the lien of the indentue constitutes a first mortgage on all the properties that
we own, except as discussed below, subject only to liens for taxes and assessments that are not
delinquent and minor excepted encumbrances. Certin of our properties are subject to
easements, leases, contracts, covenants, workmen's compensation awards and similar
encumbrances and minor defects and clouds common to properties. In the opinion of our general
counsel, none of these intederes with our operations.
The indentue does not create a lien on the following excepted propert:
· revenues or profits, or notes or accounts receivable, contracts or choses in action,
except as permitted by law during a completed default
· securities or cash, except when pledged or
· merchandise or equipment manufactued or acquired for resale.
The indentue creates a lien on our interest in propert that we subsequently acquire other
than excepted propert, subject to limitations in the case of consolidation, merger or sale of
substantially all our assets. Indenture, Section 87 We have covenanted to execute and deliver
instruments that are necessar to car out the puroses of the indentue and to create a lien on
after-acquired propert that the indentue covers. Granting Clauses
The indenture does not contain any covenants or other provisions to provide holders of
the first mortgage bonds special protection in the event of a highly leveraged transaction.
Issuance of Additional Bonds. The indenture limits the aggregate principal amount of
bonds at anyone time outstanding to $2.0 billon. We may amend the indentue and increase
this amount without consent of the holders of first mortgage bonds. Indenture, Sections 22 and
121.. F orty-fifh Supplemental, Article I The indentue contains some restrctions on increasing
the amount of prior lien bonds, which are bonds, obligations or principal indebtedness secured by
any mortgage or other lien upon any propert additions prior to the lien of the indenture.
Indenture, Sections 6 and 46
We may issue additional bonds that rank equally with the bonds in principal amount
equal to:
· 60% of the cost or fair value, whichever is less, of propert additions made after
December 31, 1943, less the amount of prior lien bonds thereon Indenture,
Article V, Second Supplemental, Sections 10 and 13
· the principal amount of first mortgage bonds or prior lien bonds referred to above,
retired or then to be retired Indenture, Articles Vand VI or
7
· the amount of cash that we deposit with the corporate trustee for the purpose,
which we may withdraw qn the same basis as bonds may be issued. Indenture,
Article VII
We may not issue bonds as proviaed above, with certain exceptions, unless we meet a net
earnings requirement. Generally, the ind~ntue requires that our net earnings must be at least
twice the annual interest requirements oni all outstanding debt of equal or prior rank, including
the bonds that we propose to issue. Under certain circumstances, the net earnings test does not
apply, including the issuance of refuding bonds to retire outstanding bonds which matue in less
than two years or which are of an equal or higher interest rate, or prior lien bonds.
We calculate net earnings before deduction of:
· propert retirement expenses, depreciation or depletion
· interest expense on indebtedness
· amortization of debt disco,Ut and expense and
· any taxes measured by or dependent on net income.
We may include only a limited amount of revenue from propert not subject to the lien of the
indenture in net earnings. Indenture, Sections 7, 27 and Article VI
Propert additions consist of electric or gas propert, or propert used in connection
therewith. Propert additions exclude securities, contracts or choses in action, merchandise and
equipment for consumption or resale, materials and supplies, propert used principally for
production or gathering of natural gas, or' any power sites and uncompleted works under Idaho
state permits. In determining net propert additions, we deduct all retired fuded propert from
gross propert additions except to the extent of certain credits with respect to released fuded
propert. Indenture, Section 4 The indentue restrcts issuance of bonds and taking other credits
under the indentue based on propert additions subject to prior liens to no more than 15% of all
bonds outstanding. However, the prior liens must not exceed 50% of the cost or fair value,
whichever is less, of these propert additions. Indenture, Section 26
As of March 31, 2010, we could issue under the indentue approximately $462 milion of
additional first mortgage bonds based on unfunded propert additions and $612 milion of
additional first mortgage bonds based on retired first mortgage bonds.
We estimate that at March 31, 2010, unfunded propert additions were approximately
$770 milion.
Release of Properties. Generally,i we may release propert from the lien of the indenture
by doing the following:
· depositing cash with the corporate trustee
· substituting propert additions or
8
. waiving our right to issue additional bonds on the basis of retired bond credits,
without application of the net earings test.
Indenture, Section 59
Actions Without Trustees' Release or Consent. Unless we are in default in the payment
of interest on any outstanding bonds or one or more of the completed defaults described under
the caption "Events of Default" below have occured and are continuing, we may, without the
trstees' release or consent, and without providing a report to the trstees or depositing with
them the consideration we receive:
. sell or otherwise dispose of any machinery, equipment, tools, implements or other
propert, which has become old, inadequate, obsolete, worn out, unfit or
unadapted for use in our operations, after we replace that propert with other
propert which has at least equal value and is subject to no additional liens
. cancel or make changes or alterations in or substitutions of any contracts, leases
or rights of way grants or
. surender or assent to the modification of any right, power, franchise, license,
governental consent or permit under which we may be operating, if, in the
opinion of our board of directors, stated in a resolution fied with the corporate
trstee, the surender or modification is desirable in the conduct of our business
and does not impair the securty of outstanding bonds.
Indenture, Section 58
Amendment of the Indenture. Generally we may modify or amend the indenture with the
consent of the holders of 60% in principal amount of all outstanding first mortgage bonds.
However, when an amendment does not affect all series of first mortgage bonds, holders of 60%
of the principal amount of all outstanding first mortgage bonds of each series affected must also
consent to the amendment.
Unless each bondholder consents, we cannot make the following modifications:
. impair the right of any bondholder to receive payment on its bond when due or to
sue for any overdue payment
. create any lien equal or prior to the lien of the indenture
. deprive any bondholder of a lien upon the mortgaged and pledged propert or
. reduce the bondholder vote necessary to amend the indentue.
9
Indenture, Sections 113, 121; Twenty-third Supplemental, Section 9; Thirty-sixth Supplemental,
Section 9
. Events of Default. The following are defaults, sometimes called completed defaults,
under the indentue:
· failure to pay the principal of any bond when due and payable whether at matuity
or otherwise
· failure to pay interest on any bond for 60 days
· failure to pay principal of or interest on any outstanding prior lien bond beyond
the grace period, if any, in the prior lien bond
· failure to observe a covenant not to, without the corporate trstee's written
approval,
· go into voluntary bankptcy or insolvency, apply for or consent to the
appointment of a receiver or trustee for us or our propert in any judicial
proceedings or make any general assignent for the benefit of creditors or
· suffer to be made and remain unvacated for a period of 90 days any order
for the appointment of a receiver or trustee for us or our propert in any
proceeding instituted by a creditor, or any final order appointing such a
receiver or trstee in any other proceeding or any order adjudicating us to
be bankpt or insolvent or
· failure to perform other covenants, agreements or conditions contained in the
indentue for 90 days after the corporate trstee gives us notice.
Indenture, Section 65
Discharge. The indentue wil be cancelled and discharged when all indebtedness
secured by the indentue is paid, including charges of the trstees.
In addition, first mortgage bonds wil be considered paid and not to be outstanding for
any purose under the indenture when we have irrevocably deposited with the trstee
· suffcient cash or
· an amount of direct obligations of, or obligations guaranteed by, the United States
governent or obligations which are collateralized by obligations of the United
States governent which, in the opinion of an independent accountant and the
opinion of our officers, wil provide suffcient funds, without regard to
reinvestment thereof, together with any deposited cash
to pay when due the principal of, and premium, if any, and interest to the matuty date or
redemption date of such first mortgage bonds, provided that in the case of redemption, proper
10
notice shall have been given or appropriate arrangements have been made with the corporate
trstee for the giving of notice.
Indenture, Section 106 and Twenty-seventh Supplemental, Section 10
Miscellaneous. The indentue provides that the corporate trstee, upon request of the
holders of a majority in interest of the outstanding first mortgage bonds, if properly indemnified
to its satisfaction, must take action to enforce the lien of the indentue. Indenture, Section 92;
Sixth Supplemental, Article XXII
We covenant in the indentue to deliver a certificate to the trstee annually, within 90
days after the close of the fiscal year, to show that we are in compliance with the terms of the
indentue and that we have not defaulted under the indentue. Various supplemental indentures
Concerning the Corporate Trustee. We and our affliates may conduct banking
transactions with the corporate trstee in the normal course of business.
DESCRIPTION OF DEBT SECURITIES
We wil issue the debt securities offered in this prospectus under our Debt Securities
Indenture, dated as of August 1, 2001. Deutsche Bank Trust Company Americas is the trstee
under the indenture. We may amend and supplement the indentue and wil supplement it by one
or more supplemental indentues relating to these debt securties.
This section briefly summarizes the material provisions of the debt securties indentue
and uses some terms that are not defined in this prospectus but are defined in the indenture. This
summary is not complete and we qualify it by reference to the indentue. The indentue is on file
with the Securities and Exchange Commission, and we incorporate it by reference in this
prospectus. You should read the indentue for a complete understanding of its provisions and for
the definition of some terms used in this summary. In the summary below, we include references
to section numbers of the indentue so that you can easily locate these provisions.
Other Indebtedness. The indenture does not limit the amount of debt securties that we
may issue; it does not restrict the amount or tye of other debt that we may issue or contain any
other provisions that would afford holders of the debt securties protection in the event of a
highly leveraged transaction. We may use other indentures or documentation containing
provisions different from those included in the indenture under which we are offering these debt
securities in connection with futue issues of debt securities. We may also offer our first
mortgage bonds, which are secured indebtedness and which are described above under the
caption "Description of First Mortgage Bonds." As of March 31, 2010, there were
$1,381,100,000 in aggregate principal amount of our first mortgage bonds outstanding.
Security, Ranking and Subordination. The debt securities that we may issue under this
indentue wil be unsecured. The debt securities that we are offering in this prospectus wil rank
equal in right of payment to our other unsecured indebtedness that is outstanding now or that we
may issue in the futue, except for any indebtedness that, by its terms, is subordinate to these
debt securities.
11
Issuance in Series. We wil issue debt securities in series. Each series of debt securties
may have different terms and, in some cases, debt securties of the same series may have
different terms. The prospectus supplement relating to a particular series of debt securties wil
contain the following information about those debt securties:
. the title of the series
· any limit on the aggregate principal amount of the series
· the date or dates on which we wil issue the debt securities of that series and on
which we wil pay the principal amount and any premium
· the rate or rates at which the debt securities of that series wil bear interest, or how
we wil determine the rate or rates
· the date or dates from which interest wil accrue
· the dates on which we wil pay interest on the debt securities of that series and the
regular record dates for the interest payment dates
. the place or places where we wil pay the principal of, premium, if any, and
interest, if different from those we describe in this prospectus
· any redemption terms, including mandatory redemption through a sinkng fud or
otherwise, redemption at our option and redemption at the option of the holder
. the denominations in which we wil issue the debt securities of that series, if other
than denominations of $1 ,000 and any integral multiple of $1 ,000
. the provisions for the satisfaction and discharge of the indentue if different from
those we describe in this prospectus and
· any other terms of the debt securities of the series.
Form and Exchange. Unless we state otherwise in the prospectus supplement:
· we wil issue the debt securties in fully registered form without coupons
· a holder of debt securities may exchange debt securties, without charge, for an
equal aggregate principal amount of debt securties of the same series, having the
same issue date and with identical terms and provisions and
. a holder of debt securities may transfer debt securities, without charge, other than
applicable stamp taxes or other governental charges.
12
Indenture, Sections 3.1, 3.2 and 3.6
Unless we state otherwise in the prospectus supplement, the transfer of debt securties
may be registered and exchanged at the corporate trst offce of the trstee, in New York, New
York, as securty registrar. We may change the place for registration of transfer and exchange.
We may designate one or more additional places for registration and exchange, all at our
discretion.
We are not required to execute or to provide for the registration of transfer or exchange of
any debt security
. durng a period of 15 days prior to giving any notice of redemption with respect to
that debt securty or
. that has been selected for redemption in whole or in part, except the unedeemed
portion of any debt securty being redeemed in part.
Indenture, Sections 3.6 and 4.2
See "Book-Entr System" for a description of additional requirements as to the form and
method of exchange of debt securities. We wil describe any additional requirements as to the
form and method of exchange of debt securties in the prospectus supplement. Indenture,
Section 3.1
Payment of Interest. Unless we state otherwise in the prospectus supplement, we wil pay
interest on each debt securty to the person in whose name the debt securty is registered as of the
close of business on the regular record date for that interest payment date. Ifwe have defaulted
in the payment of interest on any debt securty, we may pay the defaulted interest to the holder of
the debt security as of the close of business on a special record date that is not less than 10 days
prior to the date we propose to pay the defaulted interest. Notice of the special record date wil
be given by mail at least 15 days before the special record date. We may also pay defaulted
interest in any other lawful manner permitted by requirements of any securties exchange on
which the debt security may be listed, if the trstee deems that manner of payment practicable.
Indenture, Section 3.8
Unless we state otherwise in the prospectus supplement, we wil pay the principal of and
premium, if any, and interest at maturity at the corporate trst offce of the trstee, in New York,
New York, as our paying agent. We may change the place of payment. We may appoint one or
more additional paying agents and may remove any paying agent, all at our discretion.
Indenture, Section 4.2
Redemption. We wil describe any terms for the optional or mandatory redemption of a
particular series of debt securities in the prospectus supplement. Unless we state in the
prospectus supplement that the debt securities of that series are redeemable at the option of a
holder, debt securties wil be redeemable only at our option. In order to exercise our right to
redeem any debt securty, we must give the holder notice by mail at least 30 days prior to the
date fixed for redemption. If we want to redeem fewer than all the debt securities of a series, the
trstee wil choose the particular debt securties to be redeemed by a method of random
13
selection, substantially pro rata, that the trustee believes is fair and appropriate and which
complies with the requirements of the principal national securities exchange, if any, on which the
debt securities of that series are listed. If the debt securties to be redeemed have different terms
and different matuties, we may select the paricular debt securties to be redeemed.
Unless we state otherwise in the prospectus supplement, if we are redeeming the debt
securties at our option, the redemption wil be conditional upon the paying agent or agents
receiving from us, on or prior to the date fixed for redemption, enough money to redeem all of
the debt securities called for redemption, including accrued interest, if any. If suffcient money
has not been received, the notice wil not be effective and we wil not be required to redeem the
debt securities. Indenture, Section 14.2
Consolidation, Merger or Sale. The indentue provides that we wil not consolidate with,
merge with or into any other person, whether or not we are the surivor, or sell, assign, transfer
or lease all or substantially all of our properties and assets as an entirety or substantially as an
entirety to any person or group of affliated persons, in one transaction or a series of related
transactions, unless:
· the successor person, if we are not the surivor, is a person organized under the
laws of the United States or any state thereof or the District of Columbia and
expressly assumes in writing, by a supplemental indentue, all of our obligations_
under the outstanding debt securities and the indenture
· immediately before and after giving effect to the transaction or series of
transactions, no event of default, and no default, shall have occured and be
continuing and
· we deliver to the trstee an offcer's certificate and an opinion of counsel stating
that the transaction and the supplemental indentue comply with the indentue.
Indenture, Article Eleven
Events of Default. The following are events of default with respect to any series of debt
securties:
· failure to pay the principal of, or premium, if any, on, any debt security of that
series when due and payable at maturity, and upon redemption, and the time for
payment has not been extended or deferred, but excluding any failure by us to
deposit money in connection with any redemption that is at our option
· failure to pay interest on any debt security of that series when due and our failure
continues for 30 days, and the time for payment has not been extended or deferred
· failure to make a sinking fund payment when due with respect to debt securties
of that series
14
. failure to observe or pedorm any other covenant, warranty or agreement
contained in the debt securties of that series or in the indentue, other than a
covenant, agreement or waranty included in the indentue that is specifically
dealt with in another event of default, and our failure continues for 60 days after
the trstee or holders of at least 25% in aggregate principal amount of the
outstanding debt securties of that series have given us wrtten notice
. a court enters a decree or order for relief that remains unstayed and in effect for
60 consecutive days in respect of us in an involuntary case under any applicable
bankptcy, insolvency or similar law
. appointing a receiver, liquidator, assignee, custodian, trstee, sequestrator
or similar offcial for us or for any substantial part of our propert or
. ordering the winding up or liquidation of our affairs
. we commence a voluntary case under any applicable bankptcy, insolvency or
similar law
. we consent to the entr of an order for relief in an involuntary case under any
applicable bankptcy, insolvency or similar law
. we consent to the appointment or takng possession by a receiver, liquidator,
assignee, custodian, trstee, sequestrator or similar official for us or for any
substantial part of our propert
. we make any general assignent for the benefit of creditors and
. any other event of default with respect to debt securities of that series specified in
the applicable prospectus supplement.
Indenture, Section 6.1
An event of default with respect to the debt securties of any series does not necessarly
constitute an event of default with respect to any other series of debt securties issued under the
indenture. Unless we cure the default, the trstee is required to give notice of any default known
to it within 90 days after the default has occured; the term "default" includes any event which
after notice or passage of time or both would be an event of default. Except in the case of a
default in payment, the trstee is protected in withholding notice if and so long as the board of
directors, the executive committee or a trust committee of directors or responsible offcers of the
trstee in good faith determine that the withholding of notice is in the interest of the holders.
Indenture, Section 6.11
If an event of default with respect to debt securties of any series, other than due to events
of bankptcy, insolvency or reorganization, occurs and is continuing, the trstee or the holders
of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by
notice in writing to us, and to the trustee if given by the holders, may declare the unpaid principal
of and accrued interest to the date of acceleration on all the outstanding debt securties of that
15
series to be due and payable immediately. The holders of a majority of the principal amount of
the outstanding debt securities of that series, upon the conditions provided in the indentue, may
rescind an acceleration and its consequences with respect to that series.
If an event of default occurs due to bankptcy, insolvency or reorganization, all unpaid
principal of and accrued interest on the outstanding debt securities of all series wil become
immediately due and payable without any declaration or other act on the part of the trustee or
any holder. Indenture, Section 6.1
The holders of a majority in principal amount of the outstanding debt securties of any
series wil have the right to direct the time, method and place of conducting any proceeding for
any remedy available to the trstee, or exercising any trust or power conferred on the trstee,
with respect to the debt securities of that series, subject to the right of the trstee to decline to
follow instrctions that would be unlawful, expose the trstee to personal liability or be unduly
prejudicial to the interests of holders who do not join in the direction. Indenture, Section 6.9
Subject to the provisions of the indentue relating to the duties of the trustee, if an event
of default shall occur and be continuing, the trstee will be under no obligation to exercise any of
its rights or powers under the indenture at the request or direction of any of the holders, unless
the holders have offered to the trustee reasonable indemnity. Indenture, Section 7.2
The indentue provides that we must periodically file statements with the trstee
regarding compliance by us with all conditions and covenants contained in the indentue.
Indenture, Section 4.6
Modifcation o/Indenture. We may modify the indentue, without notice to or the
consent of any holders of debt securities, with respect to certain matters, including:
· to add one or more covenants or other provisions for the benefit of holders of debt
securities of one or more series or to surrender any of our rights or powers and
· to cure any ambiguity, defect or inconsistency or to correct or supplement any
provision which may be inconsistent with any other provision of the indentue.
Indenture, Section 10.1
In addition, we may modify certain of our rights and obligations and the rights of holders
of the debt securties with the consent of the holders of at least a majority in aggregate principal
amount of the outstanding debt securities affected by the modification. Indenture, Section 10.2
No amendment or modification may, without the consent of each holder of any
outstanding debt securty affected:
· change the stated maturity of any debt securty
· reduce the principal amount of, or the rate of interest on, or the amount of any
premium on, or any amount payable on redemption of, or extend the time for
payment or change the method of calculating interest on, any debt security, or
16
reduce the amount of principal of an original issue discount securty that would be
due and payable upon acceleration of matuty
. impair the right to institute suit for the enforcement of any payment with respect
to any debt securty
. reduce the percentage in principal amount of outstanding debt securties of any
series necessary to modify or amend the indenture, or to waive compliance with
certain provisions of the indenture or defaults or events of default and their
consequences or
. subordinate any debt securties to any other of our indebtedness.
Indenture, Section 10.2
Waiver. The holders of not less than a majority in aggregate principal amount of the
outstanding debt securties of any series may waive any default or event of default with respect
to that series, except payment and bankptcy defaults. Indenture, Section 6.10
Defeasance. Unless we state otherwise in the prospectus supplement relating to the debt
securities of a paricular series, the indenture provides that we shall be discharged from our
obligations under the indentue with respect to any series of debt securties at any time prior to
the maturity date or redemption of that series when we meet certain requirements specified in the
indenture, including
. when we have irrevocably deposited with the trustee, in trst,
. suffcient funds to pay the principal of and premium, if any, and interest to
the maturity date or redemption on, the debt securities of that series or
. an amount of direct obligations of, or obligations guaranteed by, the
United States governent as wil be suffcient, without consideration of
any reinvestment of any accrued income on those obligations, to pay when
due the principal of and premium, if any, and interest to the matuty date
or redemption on, the debt securties of that series and
. when we have paid all other sums payable with respect to the debt securties of
that series.
Upon the discharge of the indenture with respect to a particular series, the holders of debt
securities of that series shall no longer be entitled to the benefits of the indentue, except for
puroses of registration of transfer, exchange and replacement oflost, stolen or mutilated debt
securties. Indenture, Sections 12.1 and 12.2
Concerning the Trustee. We and our affiliates may conduct banng transactions with the
trstee in the normal course of business.
17
BOOK-ENTRY SYSTEM
We may issue all or some of the first mortgage bonds and debt securities in book-entr
form, which means that global notes, not certificates, wil represent the securities. If we issue
global notes representing any securties, the following provisions wil apply to all book-entr
securities:
The Depository Trust Company, New York, NY, which we refer to as "DTC", wil act as
securities depository for the securties. We wil issue the securities as fully-registered securities
registered in the name of Cede & Co., DTC's partership nominee, or such other name as an
authorized representative of DTC may request. We wil issue one fully-registered security
certificate for each issue of the securities, each in the aggregate principal amount of the issue,
and we wil deposit the certificate with the corporate trstee to hold as agent for DTC. We and
the trustee wil treat Cede & Co. as the holder of the securties for all puroses.
DTC, the world's largest securties depository, is a limited-purose trst company
organized under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearng corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17 A of the Securties Exchange Act of 1934, as
amended. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-
U.S. equity, corporate and municipal debt issues, and money market instrments from over 100
countres that DTC's direct participants deposit with DTC. DTC also facilitates the post-trade
settlement among direct participants of sales and other securities transactions in deposited
securties through electronic computerized book-entr transfers and pledges between direct
participants' accounts. This eliminates the need for physical movement of securties certificates.
Direct participants include both U.S. and non-U.S. securities brokers and dealers, banks, trst
companies, clearing corporations, and certain other organizations. DTC is a wholly-owned
subsidiar of The Depository Trust & Clearing Corporation, or DTCC. DTCC is the holding
company for DTC, National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its
regulated subsidiaries. Access to the DTC system is also available to others such as both U.S.
and non-U.S. securities brokers and dealers, banks, trst companies, and clearing corporations
that clear through or maintain a custodial relationship with a direct participant, either directly or
indirectly. DTC has Standard & Poor's highest rating: AA. The DTC rules applicable to its
participants are on fie with the Securities and Exchange Commission. More information about
DTC can be found at ww.dtcc.com and ww.dtc.org.
.
Purchases of securties under the DTC system must be made by or through direct
participants, which wil receive a credit for the securities on DTC's records. The ownership
interest of each actual purchaser, the beneficial owner, is in tu to be recorded on the direct and
indirect participants' records. Beneficial owners wil not receive wrtten confirmation from DTC
of their purchase. Beneficial owners are, however, expected to receive written confirations
providing details of the transaction, as well as periodic statements of their holdings, from the
direct or indirect participant through which the beneficial owner entered into the transaction.
Transfers of ownership interests in the securities are to be accomplished by entries made on the
books of direct and indirect participants acting on behalf of beneficial owners. Beneficial
18
owners wil not receive certificates representing their ownership interests in the securties, except
in the event that use of the book-entr system for the securities is discontinued.
To facilitate subsequent transfers, all securities deposited with DTC are registered in the
name ofDTC's partnership nominee, Cede & Co., or such other name as an authorized
representative of DTC may request. The deposit of securties with DTC and their registration in
the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners of the securties. DTC's
records reflect only the identity of the direct participants to whose accounts the securities are
credited, which mayor may not be the beneficial owners. The direct and indirect participants
wil remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct participants, by direct
participants to indirect participants, and by direct participants and indirect participants to
beneficial owners wil be governed by arrangements among them, subject to any statutory or
regulatory requirements that may be in effect from time to time.
Redemption notices wil be sent to DTC. If less than all of the securties within an issue
are being redeemed, DTC' s practice is to determine by lot the amount of the interest of each
direct participant in the issue to be redeemed.
Neither DTC nor Cede & Co., nor any other DTC nominee, wil consent or vote with
respect to the securties unless authorized by a direct participant in accordance with DTC's
money market instrent procedures. Under its usual procedures, DTC mails an omnibus proxy
to the issuer as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the securities are
credited on the record date, identified in a listing attached to the omnibus proxy.
Redemption proceeds and distrbutions on the securities wil be made to Cede & Co., or
such other nominee as an authorized representative ofDTC may request. DTC's practice is to
credit direct participants' accounts upon DTC's receipt of fuds and corresponding detail
information from us or the trustee on the payable date in accordance with their respective
holdings shown on DTC's records. Payments by participants to beneficial owners wil be
governed by standing instructions and customary practices, as is the case with securties held for
the accounts of customers in bearer form or registered in street name. Payment by participants to
beneficial owners wil be the responsibility of the participants and not ofDTC, the trustee or us,
subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds and distrbutions to Cede & Co., or such other nominee as may
be requested by an authorized representative of DTC, is our responsibility or the responsibility of
the trustee. Disbursement of these payments to direct participants wil be the responsibility of
DTC, and disbursement of these payments to the beneficial owners wil be the responsibility of
direct and indirect participants.
In case of any optional tender for or mandatory purchase of securities, pursuant to their
terms, a beneficial owner shall give notice to elect to have its securities purchased or tendered
through its participant to the tender/remarketing agent and shall effect delivery of the securties
by causing the direct participant to transfer the paricipant's interest in the securties, on DTC's
19
records, to the tender/remarketing agent. The requirement for physical delivery of securties in
connection with an optional tender or a mandatory purchase wil be deemed satisfied when the
ownership rights in the securities are transferred by direct participants on DTC's records and
followed by a book-entr credit of tendered securities to the tender/remarketing agent's DTC
account.
DTC may discontinue providing its services as depository with respect to the securities at
any time by giving reasonable notice to us. Under such circumstances, in the event that a
successor depository is not obtained, securty certificates are required to be printed and
delivered.
We may decide to discontinue use of the system of book-en tr-only transfers through
DTC, or a successor securties depository. In that event, security certificates wil be printed and
delivered to DTC.
Neither we, the trstee, any paying agent, nor the registrar for the securities wil have any
responsibility or liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a global securty or for maintaining, supervising or reviewing
any records relating to these beneficial ownership interests.
The information in this section concerning DTC and DTC's book-entr system has been
obtained from sources that we believe to be reliable, but we take no responsibility for the
accuracy thereof.
USE OF PROCEEDS
Unless we state otherwise in the prospectus supplement, we wil add the net proceeds
from the sale of the securities to our general fuds. We may use our general funds for any of the
following puroses:
. to acquire propert
. to construct, complete, extend or improve our electric facilities
. to improve or maintain our service
. to redeem, pay at maturity or purchase outstanding first mortgage bonds and debt
securties and
. to repay short-term borrowings.
Ifwe do not use the proceeds immediately, we may temporarily invest them in short-term
instrments.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus:
20
. through underwters or dealers
. through agents
. directly to a limited number of purchasers or to a single purchaser or
. through a combination of any of those methods of sale.
Through Underwriters or Dealers. Ifwe use underwters in the sale, the underwters
wil buy the securities for their own account. The underwters may resell the securities in one or
more transactions, including negotiated transactions, at a fixed public offering price or at varying
prices determined at the time of the sale. The underwriters may sell the securties directly or
through underwriting syndicates that managing underwriters represent. Unless we state
otherwise in the prospectus supplement, the obligations of the underwters to purchase the
securities will be subject to certain conditions, and the underwters wil be obligated to purchase
all of the securities if they purchase any of them.
If we use a dealer in the sale, we wil sell those securities to the dealer as principaL. The
dealer may then resell the securties to the public at varying prices determined at the time of
resale.
Any initial public offering price and any discounts or concessions allowed or reallowed
or paid to dealers may be changed from time to time.
Through Agents. We may from time to time designate one or more agents to sell the
securties. Unless we state otherwise in the prospectus supplement, any agent wil agree to use
its best efforts to solicit purchases for the period of its appointment.
Directly. We may sell the securties directly to one or more purchasers. In this case,
there wil be no underwriters or agents.
General Information.
The prospectus supplement wil state:
. the names of any underwters, dealers or agents, and the amounts of securties
underwritten, purchased or sold by each of them
. the terms of the securties offered
. the purchase price of the securities and the proceeds we wil receive from the sale
. any initial public offering price
. any discounts or commissions and other items constituting underwters' or
agents' compensation and
. any discounts or concessions allowed or reallowed or paid to dealers.
21
We may authorize underwters, dealers or agents to solicit offers from certain
institutions. We may sell the securties to these institutions for delayed delivery at a specified
date in the futue. At that time, they wil pay the public offering price on the terms we describe
in the prospectus supplement.
We may agree to indemnify underwriters, dealers and agents against certain civil
liabilities, including liabilities under the Securities Act of 1933.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by reference
information into this prospectus, which means that we can disclose important information to you
by referring you to other documents fied separately with the Securties and Exchange
Commission. The information incorporated by reference is considered to be part of this
prospectus. We incorporate by reference the following documents that we fied with the
Securities and Exchange Commission (SEC fie number 1-3198):
. Annual Report on Form 10- K for the year ended December 31, 2009 filed on
February 23,2010
. Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, filed on
May 6, 2010 and
. Current Reports on Form 8-K filed on January 22,2010, February 8, 2010, March
4,2010, March 24,2010, April 2, 2010, April 16, 2010, April 23, 2010, May 10,
2010 and May 21,2010.
We also incorporate by reference all documents we subsequently fie pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (i) after the date of the initial
registration statement and prior to the effectiveness of the registration statement and (ii) after the
date .of this prospectus and before we terminate the offering. We are not incorporating by
reference any documents or portions of documents that are not deemed "fied" with the
Securties and Exchange Commission, including any information fuished pursuant to Items
2.02 and 7.01 of Form 8-K.
Any statement contained in a document incorporated or deemed to be incorporated by
reference or deemed to be part of the prospectus shall be deemed to be modified or superseded
for puroses of the prospectus to the extent that a statement contained in the prospectus or in any
other subsequently fied document which also is or is deemed to be incorporated by reference or
deemed to be part of the prospectus modifies or replaces such statement. Any statement
contained in a document that is deemed to be incorporated by reference or deemed to be par of
the prospectus after the most recent effective date may modify or replace existing statements
contained in the prospectus. Any statement so modified shall not be deemed in its unmodified
form to constitute part of the prospectus for puroses of the Securties Act of 1933. Any
statement so superseded shall not be deemed to constitute part of the prospectus for puroses of
the Securities Act of 1933.
22
We wil provide to each person, including any beneficial owner, upon request, to whom
this prospectus is delivered, a copy of any or all of the information that has been incorporated by
reference in this prospectus but not delivered with this prospectus. You may obtain a copy of this
information at no cost, by written or oral request to us at the following address:
Shareowner Services
Idaho Power Company
1221 W. Idaho Street
Boise, ID 83702
Telephone [phone]
You may also access these documents at htt://ww.idacorpinc.com.
WHERE YOU CAN FIND MORE INFORMATION
We fie annual, quarterly and curent reports and other information with the Securities
and Exchange Commission. The public may read and copy any materials we fie with the
Securties and Exchange Commission at the Securities and Exchange Commission's public
reference room located at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain
information on the operation of the public reference room by calling the Securties and Exchange
Commission at 1-800-SEC-0330. The Securties and Exchange Commission maintains an
internet site that contains reports, proxy and information statements, and other information
regarding issuers that fie electronically with the Securities and Exchange Commission. The
address of that site is htt://ww.sec.gov. Information about us is also available at our website
at htt://ww.idahopower.comand on IDACORP, Inc.'s website at htt://ww.idacorpinc.com.
However, the information on our website and on IDACORP, Inc.'s website is not a part of this
prospectus.
This prospectus is part of a registration statement on Form S-3 that we fied with the
Securties and Exchange Commssion relating to the securties covered by this prospectus. This
prospectus does not contain all the information included in the registration statement. You may
review a copy of the registration statement at the Securities and Exchange Commission's public
reference room or on the Securities and Exchange Commission's internet site referred to above.
LEGAL MATTERS
Rex Blackbur, our Senior Vice President and General Counsel, and Dewey & LeBoeuf
LLP, New York, New York, wil pass upon the validity of the securities and other legal matters
for us. Sullivan & Cromwell LLP, New York, New York, wil pass upon the validity of the
securities for any underwriter, dealer or agent. Dewey & LeBoeufLLP and Sullvan &
Cromwell LLP may, for matters governed by the laws ofIdaho, rely upon the opinion of Mr.
Blackburn. As of May 1,2010, Mr. Blackbur owned 13,223 shares ofIDACORP, Inc. common
stock, including shares that may be acquired within 60 days pursuant to the exercise of stock
options. Mr. Blackbur is acquiring additional shares of IDACORP, Inc. common stock at
regular intervals through employee stock plans.
23
EXPERTS
The consolidated financial statements of Idaho Power Company and its subsidiary for the
year ended December 31, 2009, and the related financial statement schedule, incorporated in this
prospectus by reference from the Company's Annual Report on Form lO-K for the year ended
December 31,2009, and the effectiveness of the Company's internal control over financial
reporting as of December 31,2009, have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports (which reports (1)
express an unqualified opinion on the financial statements and financial statement schedule and
include an explanatory paragraph relating to the adoption of guidance for accounting for
uncertainty in income taxes and (2) express an unqualified opinion on the effectiveness of
internal control over financial reporting), which are incorporated herein by reference. Such
financial statements and financial statement schedule have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods ended
March 31, 2010 and 2009, which is incorporated herein by reference, Deloitte & Touche LLP, an
independent registered public accounting firm, have applied limited procedures in accordance
with the standards of the Public Company Accounting Oversight Board (United States) for a
review of such information. However, as stated in their report included in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, and incorporated by
reference herein, they did not audit and they do not express an opinion on that interim financial
information. Accordingly, the degree of reliance on their report on such information should be
restricted in light of the limited natue of the review procedures applied. Deloitte & Touche LLP
are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their
report on the unaudited interim financial information because the report is not a "report" or a
"part" of the registration statement prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Securities Act of 1933.
Rex Blackburn, our Senior Vice President and General Counsel, has reviewed the
statements under "Description of First Mortgage Bonds" relating to the lien of the indentue and
the statements as to matters of law and legal conclusions in the documents incorporated by
reference. We make these statements in reliance upon his opinion and authority as an expert.
24
$500,000,000
IDAHO POWER COMPANY
First Mortgage Bonds
Secured Medium-Term Notes, Series I
PROSPECTUS SUPPLEMENT
June 17, 2010
BofA Merrill Lynch
BNY Mellon Capital Markets, LLC
J.P. Morgan
KeyBanc Capital Markets
Mitsubishi UF J Securities
RBC Capital Markets
Sun Trust Robinson Humphrey
US Bancorp
Wells Fargo Securities
Pricing Supplement No.2 Dated August 25,2010
(To Prospectus dated May 25,2010 and
Prospectus Supplement dated June 17, 2010)
relating to First Mortgage Bonds,
Secured Medium-Term Notes, Series I
~:; .j'1.__;;
zow SEP -2 ßJî 81 20
rD/\r~lCi
UTILITIES
$100,000,000
IDAHO POWER COMPANY
4.85% First Mortgage Bonds due 2040
Title of Securties:4.85% First Mortgage Bonds due 2040 (the
"Notes")
Principal Amount:
Price to Public:
Proceeds to Us after Discount:
Interest Rate:
Original Issue Date:
Original Interest Accrual Date:
Interest Payment Dates:
$100,000,000
99.830% payable in immediately available funds,
plus accrued interest from the Original Issue Date
0.750%
99.080%
Purchasers' Discount:
Record Dates:
Matuty Date:
Redemption:
Form:
4.85% per annum
August 30, 2010
August 30, 2010
February 15 and August 15, commencing
February 15,2011
January 31 and July 31
August 15,2040
See "Optional Redemption" below
Book-Entr
BofA Merrill Lynch
J.P. Morgan
Wells Fargo Securities
Mitsubishi UF J Securities
KeyBanc Capital Markets
RBC Capital Markets
SunTrust Robinson Humphrey
US Bancorp
Optional Redemption:
We may, at our option, redeem the Notes, in whole at any time, or in par from time to time,
prior to the matuty date, as follows:
· Prior to February 15,2040, at a redemption price equal to the greater of:
· 100% of the principal amount of the Notes to be redeemed and
· as determined by an Independent Investment Baner, the sum of the
present values of the remaining scheduled payments of principal on the
Notes to be redeemed and interest thereon (not including any portion of
payments of interest accrued as of the date fixed for redemption),
discounted to the date fixed for redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
Treasur Rate (as defined below), plus 20 basis points
. On or after February 15,2040, at a redemption price equal to 100% of the
principal amount of the Notes to be redeemed,
plus in any case interest accrued and unpaid on the principal amount of the Notes to be redeemed
to the date fixed for redemption.
We wil mail notice of any redemption at least 30 days before the date fixed for redemption to
each holder of the Notes to be redeemed.
"Treasury Rate" means, with respect to any date fixed for redemption, the rate per annum equal
to the semi-annual equivalent yield to matuty of the Comparable Treasur Issue, assuming a
price for the Comparable Treasur Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasur Price for such date.
"Comparable Treasur Issue" means the United States Treasur securty selected by an
Independent Investment Banker as having a matuty comparable to the remaining term of the
Notes to be redeemed that would be used, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securties of comparable
maturity to the remaining term of the Notes to be redeemed.
"Comparable Treasury Price" means, with respect to any date fixed for redemption,
(1) the average of the bid and asked prices for the Comparable Treasur Issue (expressed
in each case as a percentage of its principal amount) on the third business day preceding
such date, as set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Governent Securties" or
(2) if such release (or any successor release) is not published or does not contain such
prices on such business day, (a) the average of the Reference Treasur Dealer Quotations
for such date, after excluding the highest and lowest such Reference Treasur Dealer
2
Quotations for such date, or (b) if the corporate trstee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all the quotations received.
"Independent Investment Banker" means anyone of the Reference Treasur Dealers that we may
appoint.
"Reference Treasur Dealer Quotations" means, with respect to each Reference Treasur Dealer
and any date fixed for redemption, the average, as determined by the corporate trstee, of the bid
and asked prices for the Comparable Treasur Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the corporate trustee by such Reference Treasur Dealer
at 5:00 p.m. New York City time on the third business day preceding the date fixed for
redemption.
"Reference Treasury Dealer" means (1) each of Banc of America Securities LLC, J.P. Morgan
Securities Inc. and a Primary Treasury Dealer (as defined below) selected by Wells Fargo
Securities, LLC, and their respective successors, unless any of them ceases to be a primary U.S.
Governent securities deaiêr in New York City (a "Primary Treasury Dealer"), in which case we
will substitute another Primary Treasury Dealer and (2) any other Primary Treasury Dealers that
we may select.
Supplemental Plan of Distribution and Terms Agreement:
We have entered into a terms agreement with the purchasers of the Notes with respect to the
Notes. The purchasers are committed to take and pay for all of the Notes if any are purchased.
Subject to certain conditions, each purchaser has severally agreed to purchase the principal
amount of the Notes indicated in the table below:
Name Principal Amount of Notes
Banc of America Securities LLC $27,500,000
J.P. Morgan Securities Inc.25,000,000
Wells Fargo Securties, LLC 25,000,000
Mitsubishi UFJ Securities (USA), Inc.10,500,000
KeyBanc Capital Markets Inc.3,000,000
RBC Capital Markets Corporation 3,000,000
SunTrust Robinson Humphrey, Inc.3,000,000
U.S. Bancorp Investments, Inc.3,000,000
Total $100,000,000
3
The Notes sold by the purchasers to the public wil initially be offered at the initial price to the
public set forth on the cover of this pricing supplement. Any Notes sold by the purchasers to
securities dealers may be sold at a discount from the initial price to the public of up to 0.450% of
the principal amount of the Notes. Any such securties dealers may resell any Notes purchased
from the purchasers to certin other brokers or dealers at a discount from the initial price to the
public of up to 0.150% ofthe principal amount of the Notes.
Some of the purchasers or their affliates (i) participate in our commercial paper progrm and
may from time to time hold our commercial paper and (ii) are lenders and/or agents under our
credit agreement, dated as of April 25, 2007, as amended.
Concurrent with the offering of the Notes, we are also offering, through a separate terms
agreement and pricing supplement, $100,000,000 aggregate principal amount of 3.40% first
mortgage bonds due 2020 (the "2020 Notes"), which wil rank equally and ratably with the Notes
in all respects. While these offerings are concurent, they are not dependent or contingent on one
another. We cannot assure you that we will complete the offering of the 2020 Notes.
Interest Payment Dates:
We wil make interest payments on the Notes on Februar 15 and August 15 of each year,
commencing February 15,2011, and at maturity. The record date for the February 15 payment
of interest wil be January 31 and the record date for the August 15 payment of interest wil be
July 31.
Use of Proceeds:
The purchasers wil pay the net proceeds from the sale of the Notes to us in immediately
available funds. After our receipt of the net proceeds, the Notes wil be credited to the
purchasers' accounts at The Depository Trust Company free of payment. We wil use the net
proceeds from the sale ofthe Notes and the 2020 Notes we are offering concurently to pay at
matuity our $120 millon 6.60% first mortgage bonds due March 2,2011 and to fud a portion
of our capital requirements. Ifwe do not use the proceeds immediately, we wil temporarily
invest them in short-term investments.
4
PROSPECTUS SUPPLEMENT
To Prospectus dated May 25, 2010
$500,000,000
Idaho Power Company
First Mortgage Bonds,
Secured Medium-Term Notes, Series I
This prospectus supplement may be used to offer and sell the notes only if accompanied by the
accompanying prospectus.
Idaho Power Company may use this prospectus supplement to offer from time to time its first mortgage
bonds, secured medium-term notes, series 1.
Terms of Sale
The following terms may apply to the notes which we may sell at one or more times. We wil include
final terms for each note you purchase in a pricing supplement.
Mature 9 months to 30 years from date of issue
Fixed interest rate
Interest payable on March 1 and September 1
Held in book-entry form by The Depository Trust Company
Settlement in immediately available funds
May be subject to mandatory redemption or redemption at our option
Minimum denominations of$l,OOO increased in multiples of$l,OOO
You should carefully consider the risk factors that we have disclosed in our public fiings under the
Securities Exchange Act of 1934, as amended, before purchasing the notes.
Neither the Securities and Exchange Commission nor any state securities commission has approved
or disapproved of these notes or determined that this prospectus supplement or the accompanying
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
We may sell the notes directly or indirectly through one or more agents or dealers, including the agents
listed below. The agents are not required to sell any specified number or amount of notes. The agents wil
use their reasonable best efforts to sell the notes offered.
If we sell the notes at 100% of their principal amount, we wil receive between $496,250,000 and
$499,375,000 of the proceeds from the sale of the notes, after paying the agents' commissions of between
$625,000 and $3,750,000.
BorA Merril Lynch
BNY Mellon Capital Markets, LLC
J.P. Morgan
KeyBanc Capital Markets
Mitsubishi UF J Securities
RBC Capital Markets
SunTrust Robinson Humphrey
US Bancorp
Wells Fargo Securities
Prospectus Supplement dated June 17, 2010
We take responsibility only for the information contained in this prospectus supplement and the
accompanying prospectus and any pricing supplement, including the information that we incorporate by
reference, and any free wrting prospectus that we prepare and distrbute. We have not, and the agents
have not, authorized any other person to provide you with information that is different. If anyone
provides you with different or inconsistent information, you should not rely on it. The information
contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus
and any applicable pricing supplement is accurate only as of its respective date, regardless of the time of
delivery of such document or any sale of the securties offered hereunder. We are not making an offer of
these notes in any state where the offer is not permitted.
TABLE OF CONTENTS
Page
Prospectus Supplement
Description of the Notes ............................................................................................................................S-3
Supplemental Plan of Distribution......................................... ....................................................................S-4
Prospectus
Risk Factors ....... ........... ..... .... ............ ............ ....... ...... ........ ....... ........ ......... ....... ..................... ...................... 2
Forward-Looking Statements........................................................................................................................2
About Idaho Power Company .......................................................................................................................4
Ratios of Eamings to Fixed Charges.............................................................................................................4
Description of First Mortgage Bonds............................................................................................................5
Description of Debt Securities ............................ ..... .... ................ ......... .... ....... ...... .... ................................. 11
Book-Entr System.....................................................................................................................................18
Use of Proceeds............................................ ...............................................................................................20
Plan of Distrbution.......................................... ...........................................................................................20
Incorporation of Certain Information by Reference.... ...... ..... .... .... .... ... ........ ......... ...... ..... ...... ... ... ...... ........ 22
Where You Can Find More Information.....................................................................................................23
Legal Matters......... ........ ..... ....... ....... ........ ..... ...... .... ........ ..... .... ............. .... ....... ...... ....... ........ .......... ........... 23
Experts ........................................................................................................................................................24
S-2
General
DESCRIPTION OF THE NOTES
Weare issuing these notes as part of a series of first mortgage bonds under our Indentue
of Mortgage and Deed of Trust, dated as of October 1, 1937, as amended and supplemented.
You should read the following information, which sumarizes certain terms of the notes, in
conjunction with the general terms and conditions of the notes and the indenture described under
"Description of First Mortgage Bonds" in the accompanying prospectus.
For each note we offer and sell, we will prepare a pricing supplement to this prospectus
supplement and the accompanying prospectus. The pricing supplement wil include the specific
terms of the note to which it relates and may include modifications of or additions to the more
general terms described in this prospectus supplement and the accompanying prospectus.
The pricing supplement relating to a note wil contain the following important
information:
.purchase price of the notes, which may be a percentage of the aggregate principal
amount
issue date
matuity date, which wil be from nine months to 30 years from the date of issue
interest rate
interest accrual date
redemption provisions, if any, and
other material terms not inconsistent with the indentue.
.
.
.
.
.
.
The following information applies to the notes that we are offering, unless we specify
otherwise in the pricing supplement.
Except as discussed under "Book-Entry System" in the accompanying prospectus, each
note wil be in book-entr form and not certificated form. The initial depositary for book-entry
notes wil be The Depository Trust Company.
You may buy the notes in denominations of $ i ,000 or any larger amount equally
divisible by $1,000.
Unless we specify otherwise in a pricing supplement and make additional related
disclosure, we wil not offer the notes to non-United States holders. You are a non-United States
holder if you are, for United States federal income tax puroses:
.a nonresident alien individual
a foreign corporation
a foreign partnership or
an estate or trst that in either case is not subject to United States federal income
tax on a net income basis on income or gain from a note.
.
.
.
S-3
Interest and Payment on the Notes
Each note wil bear interest at a fixed rate stated on the face of the note. Interest wil be
computed on the basis of a 360-day year of twelve 30-day months. We wil make interest
payments to noteholders on March 1 and September 1 of each year or on the interest payment
dates specified in the pricing supplement, and at matuty or upon earlier redemption.
If any interest payment date, redemption date or matuty date does not fall upon a
business day, we wil make the payment on the next business day. A business day is any day,
other than a Satuday or Sunday, on which banks in The City of New York are not required or
authorized by law to close. Ifwe payor provide for payment on the next business day, no
interest wil accrue on those amounts for the period from and after the interest payment date,
redemption date or matuty date, as the case may be, to the next business day.
We wil make payments of principal, premium, if any, and interest in respect of the notes
in immediately available funds. We wil make payments on book-entr notes to Cede & Co., the
partership nominee of The Depository Trust Company.
The record date for the March 1 payment wil be Februar 15, and the record date for the
September 1 payment wil be August 15. If we change the interest payment dates, we wil
indicate in the pricing supplement the new record dates. In order to receive interest payments on
a note, you must hold the note on the applicable record date, whether or not the record date is a
business day. We will begin paying interest on the first interest payment date after the notes
have been issued, provided that the notes are issued before the applicable record date.
Redemption of the Notes
The notes may be subject to redemption, either mandatory or at our option, before they
mature. The pricing supplement wil indicate whether or not a note is subject to redemption and
the terms of redemption, ifany. Ifwe decide to redeem the notes, you wil receive at least 30
days' notice.
Tax Defeasance
Under curent United States federal income tax law, defeasance under the indentue
should be treated as a taxable exchange of the notes to be defeased for an interest in the
defeasance trst. Accordingly, you would recognize gain or loss equal to the difference between
your cost or other tax basis of the notes and the fair market value of your interest in the
defeasance trst. In addition, you might also thereafter be required to include in income your
share of the income, gain or loss of the defeasance trst, which could be a different amount and
includible in income at different times than would be the case in the absence of defeasance under
the indenture. You should consult your own tax advisors as to the specific potential
consequences to you of defeasance under the indentue.
SUPPLEMENTAL PLAN OF DISTRIBUTION
We are offering the notes on a continuing basis through the agents listed on the cover,
each of which has agreed to use to its reasonable best efforts to solicit purchases of the notes.
S-4
We have the right to accept offers to purchase notes and may reject any offer to purchase
notes. The agents may also reject any offer to purchase notes. We wil pay the agents a
commission on any notes sold through the agents. The commission wil range from 0.125% to
0.750% of the principal amount of the notes depending on the maturity of the notes.
We may also sell notes to the agents who wil purchase the notes as principal for their
own accounts. Any such sale wil be made at a discount to be agreed upon at the time of sale.
Any notes the agents purchase as principal may be resold at a fixed public offering price, the
market price or other prices determined by the agents at the time of resale.
The agents may resell any notes they purchase as principal to other brokers or dealers at a
discount which may include all or part of the discount the agents received from us. Unless the
applicable pricing supplement states otherwise, the agents wil purchase the notes, as principal, at
a price equal to 100% of the principal amount less a discount that equals the applicable
commission on an agency sale of notes of the same matuty.
We may also sell notes directly to investors on our own behalf in those jurisdictions
where we are authorized to do so. We will not pay any commissions on sales made directly by
us.
We may sell notes through agents other than the agents listed on the cover, subject to
conditions described in the selling agency agreement that we have entered into with the agents
listed on the cover. The commission applicable to agency sales through any other agents wil be
the same as that applicable to agency sales through the agents listed on the cover.
The agents, whether acting as agent or as principal, may be deemed to be "underwters"
within the meaning ofthe Securities Act of 1933, as amended. We have agreed to indemnify
each agent against certain liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments made in respect of such liabilities. We have also agreed to reimburse the
agents for certain of their expenses, including the reasonable fees and expenses of their counseL.
The agents may sell to dealers who may resell to investors and the agents may pay all or
part of the discount or commission they receive from us to the dealers. Such dealers may be
deemed to be "underwters" within the meaning of the Securities Act of 1933. Any discounts or
commissions that an agent receives in purchasing a note as principal and reselling such note, and
any profit on the resale of such note by the agent, may be deemed to be underwriters' discounts
or commissions under the Securities Act of 1933.
Payment of the purchase price of the notes must be made in immediately available fuds.
In addition to offering the notes through the agents described in this prospectus
supplement, we may sell other debt securities. The sale of other debt securities wil reduce the
maximum aggregate amount of notes that we offer by this prospectus supplement.
The notes are a new issue of securties with no established trading market and wil not be
listed on a securities exchange. The agents have advised us that they intend to establish a trading
market for the notes. However, the agents are not obligated to do so and may discontinue any
S-5
through rates;
. changes in tax laws or related regulations or new interpretations of applicable law
by the Internal Revenue Service or other taxing jurisdictions;
. litigation and regulatory proceedings, includig those resulting from the energy
situation in the western United States, and penalties and settlements that influence
business and profitability;
. changes in and compliance with laws, regulations and policies including changes
in law and compliance with environmental, natual resources and endangered
species laws, regulations and policies and the adoption of laws and regulations
addressing greenhouse gas emissions, global climate change, and energy policies;
. global climate change and regional weather variations affecting customer demand
and hydroelectric generation;
. over-appropriation of surface and groundwater in the Snake River Basin resulting
in reduced generation at hydroelectric facilities;
. construction of power generation, transmission and distrbution facilities,
including an inability to obtain required governental permits and approvals,
rights-of-way and siting, and risks related to contracting, constrction and start-
up;
. operation of power generating facilities, including pedormance below expected
levels, breakdown or failure of equipment, availability of electrical transmission
capacity and the availability of water, natual gas, coal, diesel and their associated
delivery infrastrctues;
. changes in operating expenses and capital expenditues, including costs and
availability of materials, fuel and commodities;
. blackouts or other disruptions of our transmission system or the western
interconnected transmission system;
. population growth rates and other demographic patterns;
. market prices and demand for energy, including strctual market changes;
. increases in uncollectible customer receivables;
. fluctuations in sources and uses of cash;
. results of financing efforts, including the ability to obtain financing or refinance
existing debt when necessary or on favorable terms, which can be affected by
factors such as credit ratings, volatility in the financial markets and other
economic conditions;
· actions by credit rating agencies, including changes in rating criteria and new
interpretations of existing criteria;
. changes in interest rates or rates of inflation;
· performance of the stock market, interest rates, credit spreads and other financial
market conditions, as well as changes in governent regulations, which affect the
amount and timing of required contrbutions to pension plans and the reported
costs of providing pension and other postretirement benefits;
. increases in health care costs and the resulting effect on medical benefits paid for
employees;
· increasing costs of insurance, changes in coverage terms and the ability to obtain
insurance;
3
. homeland security, acts of war or terrorism;
. natual disasters and other natural risks, such as earthquake, flood, drought,
lightning, wind and fire;
. adoption of or changes in critical accounting policies or estimates; and
. new accounting or Securities and Exchange Commission requirements, or new
interpretation or application of existing requirements.
Any forward-looking statement speaks only as of the date on which we make the
statement. New factors emerge from time to time; we cannot predict all factors or assess the
impact of any emerging factors on our business, or the extent to which any factor, or
combination of factors, may cause results to differ materially from those contained in any
forward-looking statement.
ABOUT IDAHO POWER COMPANY
We are an electric utility incorporated under the laws of the State of Idaho in 1989 as
successor to a Maine corporation organized in 1915. In 1998, we reorganized into a holding
company strctue and became the principal subsidiary ofIDACORP, Inc. IDACORP, Inc.
owns all of our outstanding common stock.
Weare engaged in the generation, transmission, distrbution, sale and purchase of electrc
energy. Our service terrtory covers approximately 24,000 square miles in southern Idaho and
eastern Oregon, with an estimated population of one milion. We hold franchises in 71 cities in
Idaho and nine cities in Oregon and hold certificates from the respective public utility regulatory
authorities to serve all or a portion of 25 counties in Idaho and three counties in Oregon. We are
the parent of Idaho Energy Resources Co., a joint ventuer in Bridger Coal Company, which
supplies coal to the Jim Bridger generating plant that we own in part. As of March 31, 2010, we
supplied electrc energy to approximately 490,000 general business customers. We own and
operate 17 hydroelectric generation projects and two natural gas-fired plants and share ownership
in three coal-fired generating plants. We rely heavily on hydroelectrc power for our generating
needs and are one of the nation's few investor-owned utilities with a predominantly hydroelectric
generating base.
RATIOS OF EARNINGS TO FIXED CHARGES
Ratio of Earings to Fixed Charges..........................................
Supplemental Ratio of Earnings to Fixed Charges(l) ..............
2005
2.83x
2.78x
2006
3.12x
3.06x
2007
2.56x
2.52x
2008
2.61x
2.57x
2009
3.04x
3.01x
Three Months
Ended March 31,
2010
1.98x
1.97x
Twelve Months Ended December 31,
(i) Includes interest on the guaranty of the American Falls Reservoir Distrct bonds and Milner Dam, Inc. notes.
4
DESCRIPTION OF FIRST MORTGAGE BONDS
We wil issue the first mortgage bonds offered in this prospectus under our Indentue of
Mortgage and Deed of Trust, dated as of October 1, 1937. Deutsche Bank Trust Company
Americas, formerly known as Bankers Trust Company, is the corporate trstee, and Stanley Burg
serves as individual trstee. We have amended and supplemented the indentue in the past and
wil supplement it again by one or more supplemental indentues relating to these first mortgage
bonds.
This section briefly summarizes the material provisions of the indentue and
supplemental indentures, which we refer to collectively as the indentue in this section, and uses
some terms that are not defined in this prospectus but are defined in the indentue. This
summary is not complete and we qualify it by reference to the indentue. The indentue is on fie
with the Securities and Exchange Commission, and we incorporate it by reference in this
prospectus. You should read the indentue for a complete understanding of its provisions and for
the definitions of some terms used in this summary. In the sumary below, we include
references to section numbers of the indentue so that you can easily locate those provisions.
Issuance in Series. We issue bonds in series. Each series of bonds may have different
terms. We wil include all of the following information about a specific series of bonds in the
prospectus supplement relating to those bonds:
· the designation and series of the bonds
· the aggregate principal amount of the bonds
· the offering price of the bonds
· the date or dates on which the bonds wil matue
· the interest rate or rates for the bonds, or how we wil determine the interest rate
or rates
· the dates on which we wil pay the interest on the bonds
· the denominations in which we may issue the bonds
· the terms pursuant to which we may redeem the bonds, if any
· whether we will issue all or a portion of the bonds in global form and
· any other terms or provisions relating to the bonds that are not inconsistent with
the provisions of the indentue.
Form and Exchange. Unless we state otherwise in the prospectus supplement:
· we wil issue the bonds in fully registered form without coupons
5
. a holder of bonds may exchange bonds, without charge, for an equal aggregate
principal amount of bonds of the same series, having the same issue date and with
identical terms and provisions and
. a holder of bonds may transfer bonds, without charge, other than applicable stamp
taxes or other governental charges.
See "Book-Entr System" for a description of additional requirements as to the form and
method of exchange of bonds. We wil describe any additional requirements as to the form and
method of exchange of bonds in the prospectus supplement.
Interest and Payment. We wil pay principal, premium, if any, and interest in U.S.
dollars at Deutsche Bank Trust Company Americas in New York City, and, at our option, at our
offce in Boise, Idaho. Indenture, Section 35
Maintenance Requirements. We wil file a certificate with the corporate trstee within 90
days after the close of each calendar year stating that:
. we have made the necessary expenditues to maintain our propert in good
condition as an operating system or
. we wil designate an additional amount that should be spent for this purose.
If we designate an additional amount, we must deliver to the corporate trstee, within 30 days,
cash equal to that amount less the following deductions:
· expenditues made after the close of the year to maintain the propert and
. any allowances for waiver of our right to issue additional bonds under the
indentue.
Indenture, Section 38
We may withdraw this cash for reimbursement for later expenditures on:
. propert maintenance, repairs, renewals and replacements
. waiver of our right to issue additional bonds under the indentue or
. the purchase or redemption of bonds of any series, unless a supplemental
indenture provides otherwise for a particular series of bonds.
We must spend or appropriate 15% of our annual gross operating revenues for maintenance,
retirement or amortization of our properties. We may, however, anticipate or make up these
expenditures or appropriations within the five years that immediately follow or precede a
particular year. Indenture, Section 38; Second Supplemental, Section 15
6
Improvement or Sinking Fund. There is no sinkng or improvement fud requirement.
Twenty-seventh Supplemental, Section 14
Security. The indentue secures all bonds issued under the indentue equally and ratably,
without preference, priority or distinction. We may issue additional first mortgage bonds in the
futue, and those first mortgage bonds wil also be secured by the indentue. In the opinion of
our general counsel, the lien of the indenture constitutes a first mortgage on all the properties that
we own, except as discussed below, subject only to liens for taxes and assessments that are not
delinquent and minor excepted encumbrances. Certin of our properties are subject to
easements, leases, contracts, covenants, workmen's compensation awards and similar
encumbrances and minor defects and clouds common to properties. In the opinion of our general
counsel, none of these interferes with our operations.
The indentue does not create a lien on the following excepted propert:
· revenues or profits, or notes or accounts receivable, contracts or choses in action,
except as permitted by law during a completed default
· securties or cash, except when pledged or
· merchandise or equipment manufactued or acquired for resale.
The indentue creates a lien on our interest in propert that we subsequently acquire other
than excepted propert, subject to limitations in the case of consolidation, merger or sale of
substantially all our assets. Indenture, Section 87 We have covenanted to execute and deliver
instruments that are necessary to carr out the puroses of the indentue and to create a lien on
after-acquired propert that the indentue covers. Granting Clauses
The indenture does not contain any covenants or other provisions to provide holders of
the first mortgage bonds special protection in the event of a highly leveraged transaction.
Issuance of Additional Bonds. The indenture limits the aggregate principal amount of
bonds at anyone time outstanding to $2.0 bilion. We may amend the indentue and increase
this amount without consent of the holders of first mortgage bonds. Indenture, Sections 22 and
121,. F orty-fifh Supplemental, Article I The indentue contains some restrctions on increasing
the amount of prior lien bonds, which are bonds, obligations or principal indebtedness secured by
any mortgage or other lien upon any propert additions prior to the lien of the indentue.
Indenture, Sections 6 and 46
We may issue additional bonds that rank equally with the bonds in principal amount
equal to:
· 60% of the cost or fair value, whichever is less, of propert additions made after
December 31, 1943, less the amount of prior lien bonds thereon Indenture,
Article V, Second Supplemental, Sections 10 and 13
· the principal amount of first mortgage bonds or prior lien bonds referred to above,
retired or then to be retired Indenture, Articles Vand VI or
7
· the amount of cash that we deposit with the corporate trstee for the purpose,
which we may withdraw on the same basis as bonds may be issued. Indenture,
Article VII
We may not issue bonds as provided above, with certain exceptions, unless we meet a net
earnings requirement. Generally, the indentue requires that our net earnings must be at least
twice the annual interest requirements on all outstanding debt of equal or prior rank, including
the bonds that we propose to issue. Under certain circumstances, the net earnings test does not
apply, including the issuance of refunding bonds to retire outstanding bonds which matue in less
than two years or which are of an equal or higher interest rate, or prior lien bonds.
We calculate net earnings before deduction of:
· propert retirement expenses, depreciation or depletion
· interest expense on indebtedness
· amortization of debt discount and expense and
· any taxes measured by or dependent on net income.
We may include only a limited amount of revenue from propert not subject to the lien of the
indentue in net earnings. Indenture, Sections 7, 27 and Article VI
Propert additions consist of electric or gas propert, or propert used in connection
therewith. Propert additions exclude securities, contracts or choses in action, merchandise and
equipment for consumption or resale, materials and supplies, propert used principally for
production or gathering of natural gas, or any power sites and uncompleted works under Idaho
state permits. In determining net propert additions, we deduct all retired funded propert from
gross propert additions except to the extent of certain credits with respect to released fuded
propert. Indenture, Section 4 The indenture restricts issuance of bonds and taking other credits
under the indenture based on propert additions subject to prior liens to no more than 15% of all
bonds outstanding. However, the prior liens must not exceed 50% of the cost or fair value,
whichever is less, of these propert additions. Indenture, Section 26
As of March 31, 2010, we could issue under the indentue approximately $462 milion of
additional first mortgage bonds based on unfuded propert additions and $612 milion of
additional first mortgage bonds based on retired first mortgage bonds.
We estimate that at March 31, 2010, unfunded propert additions were approximately
$770 milion.
Release of Properties. Generally, we may release propert from the lien ofthe indenture
by doing the following:
· depositing cash with the corporate trustee
· substituting propert additions or
8
. waiving our right to issue additional bonds on the basis of retired bond credits,
without application of the net earnings test.
Indenture, Section 59
Actions Without Trustees' Release or Consent. Unless we are in default in the payment
of interest on any outstanding bonds or one or more of the completed defaults described under
the caption "Events of Default" below have occured and are continuing, we may, without the
trstees' release or consent, and without providing a report to the trstees or depositing with
them the consideration we receive:
. sell or otherwise dispose of any machinery, equipment, tools, implements or other
propert, which has become old, inadequate, obsolete, worn out, unfit or
unadapted for use in our operations, after we replace that propert with other
propert which has at least equal value and is subject to no additional liens
. cancel or make changes or alterations in or substitutions of any contracts, leases
or rights of way grants or
. surrender or assent to the modification of any right, power, franchise, license,
governental consent or permit under which we may be operating, if, in the
opinion of our board of directors, stated in a resolution filed with the corporate
trstee, the surrender or modification is desirable in the conduct of our business
and does not impair the security of outstanding bonds.
Indenture, Section 58
Amendment of the Indenture. Generally we may modify or amend the indentue with the
consent of the holders of 60% in principal amount of all outstanding first mortgage bonds.
However, when an amendment does not affect all series of first mortgage bonds, holders of 60%
of the principal amount of all outstanding first mortgage bonds of each series affected must also
consent to the amendment.
Unless each bondholder consents, we cannot make the following modifications:
. impair the right of any bondholder to receive payment on its bond when due or to
sue for any overdue payment
. create any lien equal or prior to the lien of the indenture
. deprive any bondholder of a lien upon the mortgaged and pledged propert or
. reduce the bondholder vote necessary to amend the indentue.
9
Indenture, Sections 113, 121; Twenty-third Supplemental, Section 9; Thirty-sixth Supplemental,
Section 9
Events of Default. The following are defaults, sometimes called completed defaults,
under the indenture:
· failure to pay the principal of any bond when dùe and payable whether at matuty
or otherwise
· failure to pay interest on any bond for 60 days
· failure to pay principal of or interest on any outstanding prior lien bond beyond
the grace period, if any, in the prior lien bond
· failure to observe a covenant not to, without the corporate trustee's written
approval,
· go into voluntary bankptcy or insolvency, apply for or consent to the
appointment of a receiver or trstee for us or our propert in any judicial
proceedings or make any general assignent for the benefit of creditors or
. suffer to be made and remain unvacated for a period of 90 days any order
for the appointment of a receiver or trustee for us or our propert in any
proceeding instituted by a creditor, or any final order appointing such a
receiver or trstee in any other proceeding or any order adjudicating us to
be bankpt or insolvent or
· failure to perform other covenants, agreements or conditions contained in the
indentue for 90 days after the corporate trstee gives us notice.
Indenture, Section 65
Discharge. The indentue wil be cancelled and discharged when all indebtedness
secured by the indenture is paid, including charges of the trstees.
In addition, first mortgage bonds wil be considered paid and not to be outstanding for
any purose under the indentue when we have irrevocably deposited with the trustee
· suffcient cash or
· an amount of direct obligations of, or obligations guaranteed by, the United States
governent or obligations which are collateralized by obligations of the United
States governent which, in the opinion of an independent accountant and the
opinion of our offcers, wil provide suffcient fuds, without regard to
reinvestment thereof, together with any deposited cash
to pay when due the principal of, and premium, if any, and interest to the matuty date or
redemption date of such first mortgage bonds, provided that in the case of redemption, proper
10
notice shall have been given or appropriate arrangements have been made with the corporate
trstee for the giving of notice.
Indenture, Section 106 and Twenty-seventh Supplemental, Section 10
Miscellaneous. The indentue provides that the corporate trstee, upon request of the
holders of a majority in interest of the outstanding first mortgage bonds, if properly indemnified
to its satisfaction, must take action to enforce the lien of the indentue. Indenture, Section 92;
Sixth Supplemental, Article XXII
We covenant in the indenture to deliver a certificate to the trstee annually, within 90
days after the close of the fiscal year, to show that we are in compliance with the terms of the
indentue and that we have not defaulted under the indentue. Various supplemental indentures
Concerning the Corporate Trustee. We and our affliates may conduct banking
transactions with the corporate trstee in the normal course of business.
DESCRIPTION OF DEBT SECURITIES
We wil issue the debt securities offered in this prospectus under our Debt Securities
Indenture, dated as of August 1, 2001. Deutsche Bank Trust Company Americas is the trustee
under the indentue. We may amend and supplement the indentue and wil supplement it by one
or more supplemental indentues relating to these debt securities.
This section briefly summarizes the material provisions of the debt securties indentue
and uses some terms that are not defined in this prospectus but are defined in the indentue. This
summary is not complete and we qualify it by reference to the indentue. The indenture is on file
with the Securities and Exchange Commission, and we incorporate it by reference in this
prospectus. You should read the indentue for a complete understanding of its provisions and for
the definition of some terms used in this summary. In the summary below, we include references
to section numbers of the indentue so that you can easily locate these provisions.
Other Indebtedness. The indentue does not limit the amount of debt securties that we
may issue; it does not restrict the amount or type of other debt that we may issue or contain any
other provisions that would afford holders of the debt securities protection in the event of a
highly leveraged transaction. We may use other indentues or documentation containing
provisions different from those included in the indenture under which we are offering these debt
securities in connection with futue issues of debt securties. We may also offer our first
mortgage bonds, which are secured indebtedness and which are described above under the
caption "Description of First Mortgage Bonds." As of March 31,2010, there were
$1,381,100,000 in aggregate principal amount of our first mortgage bonds outstanding.
Security, Ranking and Subordination. The debt securities that we may issue under this
indentue wil be unsecured. The debt securties that we are offering in this prospectus wil rank
equal in right of payment to our other unsecured indebtedness that is outstanding now or that we
may issue in the futue, except for any indebtedness that, by its terms, is subordinate to these
debt securities.
11
Issuance in Series. We wil issue debt securties in series. Each series of debt securties
may have different terms and, in some cases, debt securities of the same series may have
different terms. The prospectus supplement relating to a particular series of debt securties wil
contain the following information about those debt securities:
. the title of the series
· any limit on the aggregate principal amount of the series
· the date or dates on which we wil issue the debt securties of that series and on
which we wil pay the principal amount and any premium
· the rate or rates at which the debt securties of that series wil bear interest, or how
we wil determine the rate or rates
· the date or dates from which interest wil accrue
· the dates on which we wil pay interest on the debt securties of that series and the
regular record dates for the interest payment dates
· the place or places where we wil pay the principal of, premium, if any, and
interest, if different from those we describe in this prospectus
· any redemption terms, including mandatory redemption through a sinking fud or
otherwise, redemption at our option and redemption at the option of the holder
· the denominations in which we wil issue the debt securities of that series, if other
than denominations of $1 ,000 and any integral multiple of $1 ,000
· the provisions for the satisfaction and discharge of the indentue if different from
those we describe in this prospectus and
· any other terms of the debt securties of the series.
Form and Exchange. Unless we state otherwise in the prospectus supplement:
· we wil issue the debt securities in fully registered form without coupons
· a holder of debt securities may exchange debt securties, without charge, for an
equal aggregate principal amount of debt securities of the same series, having the
same issue date and with identical terms and provisions and
· a holder of debt securties may transfer debt securties, without charge, other than
applicable stamp taxes or other governental charges.
12
Indenture, Sections 3.1, 3.2 and 3.6
Unless we state otherwise in the prospectus supplement, the transfer of debt securities
may be registered and exchanged at the corporate trst offce of the trstee, in New York, New
York, as securty registrar. We may change the place for registration of transfer and exchange.
We may designate one or more additional places for registrtion and exchange, all at our
discretion.
We are not required to execute or to provide for the registration of transfer or exchange of
any debt security
. during a period of 15 days prior to giving any notice of redemption with respect to
that debt securty or
. that has been selected for redemption in whole or in par, except the unredeemed
portion of any debt securty being redeemed in part.
Indenture, Sections 3.6 and 4.2
See "Book-Entry System" for a description of additional requirements as to the form and
method of exchange of debt securities. We wil describe. any additional requirements as to the
form and method of exchange of debt securties in the prospectus supplement. Indenture,
Section 3.1
Payment of Interest. Unless we state otherwise in the prospectus supplement, we wil pay
interest on each debt security to the person in whose name the debt securty is registered as of the
close of business on the regular record date for that interest payment date. If we have defaulted
in the payment of interest on any debt securty, we may pay the defaulted interest to the holder of
the debt security as of the close of business on a special record date that is not less than 10 days
prior to the date we propose to pay the defaulted interest. Notice of the special record date wil
be given by mail at least 15 days before the special record date. We may also pay defaulted
interest in any other lawful manner permitted by requirements of any securities exchange on
which the debt security may be listed, if the trstee deems that manner of payment practicable.
Indenture, Section 3.8
Unless we state otherwise in the prospectus supplement, we wil pay the principal of and
premium, if any, and interest at matuty at the corporate trst offce of the trstee, in New York,
New York, as our paying agent. We may change the place of payment. We may appoint one or
more additional paying agents and may remove any paying agent, all at our discretion.
Indenture, Section 4.2
Redemption. We wil describe any terms for the optional or mandatory redemption of a
particular series of debt securities in the prospectus supplement. Unless we state in the
prospectus supplement that the debt securties of that series are redeemable at the option of a
holder, debt securities wil be redeemable only at our option. In order to exercise our right to
redeem any debt security, we must give the holder notice by mail at least 30 days prior to the
date fixed for redemption. If we want to redeem fewer than all the debt securties of a series, the
trstee wil choose the particular debt securties to be redeemed by a method of random
13
selection, substantially pro rata, that the trstee believes is fair and appropriate and which
complies with the requirements of the principal national securities exchange, if any, on which the
debt securties of that series are listed. If the debt securities to be redeemed have different terms
and different matuties, we may select the particular debt securities to be redeemed.
Unless we state otherwise in the prospectus supplement, if we are redeeming the debt
securities at our option, the redemption wil be conditional upon the paying agent or agents
receiving from us, on or prior to the date fixed for redemption, enough money to redeem all of
the debt securities called for redemption, including accrued interest, if any. If suffcient money
has not been received, the notice wil not be effective and we wil not be required to redeem the
debt securities. Indenture, Section 14.2
Consolidation, Merger or Sale. The indentue provides that we wil not consolidate with,
merge with or into any other person, whether or not we are the surivor, or sell, assign, transfer
or lease all or substantially all of our properties and assets as an entirety or substantially as an
entirety to any person or group of affliated persons, in one transaction or a series of related
transactions, unless:
. the successor person, if we are not the surivor, is a person organized under the
laws of the United States or any state thereof or the District of Columbia and
expressly assumes in wrting, by a supplemental indentue, all of our obligations
under the outstanding debt securties and the indentue
. immediately before and after giving effect to the transaction or series of
transactions, no event of default, and no default, shall have occured and be
continuing and
. we deliver to the trustee an officer's certificate and an opinion of counsel stating
that the transaction and the supplemental indenture comply with the indentue.
Indenture, Article Eleven
Events of Default. The following are events of default with respect to any series of debt
securties:
. failure to pay the principal of, or premium, if any, on, any debt security of that
series when due and payable at maturity, and upon redemption, and the time for
payment has not been extended or deferred, but excluding any failure by us to
deposit money in connection with any redemption that is at our option
. failure to pay interest on any debt security of that series when due and our failure
continues for 30 days, and the time for payment has not been extended or deferred
. failure to make a sinkng fund payment when due with respect to debt securties
of that series
14
. failure to observe or perform any other covenant, waranty or agreement
contained in the debt securties of that series or in the indentue, other than a
covenant, agreement or warranty included in the indentue that is specifically
dealt with in another event of default, and our failure continues for 60 days after
the trustee or holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series have given us written notice
. a cour enters a decree or order for relief that remains unstayed and in effect for
60 consecutive days in respect of us in an involuntary case under any applicable
bankptcy, insolvency or similar law
. appointing a receiver, liquidator, assignee, custodian, trstee, sequestrator
or similar offcial for us or for any substantial part of our propert or
. ordering the winding up or liquidation of our affairs
. we commence a voluntary case under any applicable bankptcy, insolvency or
similar law
. we consent to the entr of an order for relief in an involuntar case under any
applicable banptcy, insolvency or similar law
. we consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trstee, sequestrtor or similar official for us or for any
substantial part of our propert
. we make any general assignment for the benefit of creditors and
. any other event of default with respect to debt securties of that series specified in
the applicable prospectus supplement.
Indenture, Section 6.1
An event of default with respect to the debt securties of any series does not necessarily
constitute an event of default with respect to any other series of debt securities issued under the
indentue. Unless we cure the default, the trstee is required to give notice of any default known
to it within 90 days after the default has occurred; the term "default" includes any event which
after notice or passage of time or both would be an event of default. Except in the case of a
default in payment, the trustee is protected in withholding notice if and so long as the board of
directors, the executive committee or a trust committee of directors or responsible offcers of the
trstee in good faith determine that the withholding of notice is in the interest of the holders.
Indenture, Section 6.11
If an event of default with respect to debt securties of any series, other than due to events
of bankptcy, insolvency or reorganization, occurs and is continuing, the trstee or the holders
of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by
notice in writing to us, and to the trustee if given by the holders, may declare the unpaid principal
of and accrued interest to the date of acceleration on all the outstanding debt securities of that
15
series to be due and payable immediately. The holders of a majority of the principal amount of
the outstanding debt securities of that series, upon the conditions provided in the indentue, may
rescind an acceleration and its consequences with respect to that series.
If an event of default occurs due to bankptcy, insolvency or reorganization, all unpaid
principal of and accrued interest on the outstanding debt securties of all series wil become
immediately due and payable without any declaration or other act on the part of the trstee or
any holder. Indenture, Section 6.1
The holders of a majority in principal amount of the outstanding debt securities of any
series wil have the right to direct the time, method and place of conducting any proceeding for
any remedy available to the trstee, or exercising any trst or power conferred on the trstee,
with respect to the debt securties of that series, subject to the right of the trustee to decline to
follow instrctions that would be unlawful, expose the trstee to personal liability or be unduly
prejudicial to the interests of holders who do not join in the direction. Indenture, Section 6.9
Subject to the provisions of the indentue relating to the duties of the trustee, if an event
of default shall occur and be continuing, the trstee wil be under no obligation to exercise any of
its rights or powers under the indenture at the request or direction of any of the holders, unless
the holders have offered to the trstee reasonable indemnity. Indenture, Section 7.2
The indenture provides that we must periodically file statements with the trstee
regarding compliance by us with all conditions and covenants contained in the indentue.
Indenture, Section 4.6
Modifcation of Indenture. We may modify the indenture, without notice to or the
consent of any holders of debt securities, with respect to certain matters, including:
. to add one or more covenants or other provisions for the benefit of holders of debt
securities of one or more series or to surender any of our rights or powers and
. to cure any ambiguity, defect or inconsistency or to correct or supplement any
provision which may be inconsistent with any other provision of the indentue.
Indenture, Section 10.1
In addition, we may modify certain of our rights and obligations and the rights of holders
of the debt securities with the consent of the holders of at least a majority in aggregate principal
amount of the outstanding debt securties affected by the modification. Indenture, Section 10.2
No amendment or modification may, without the consent of each holder of any
outstanding debt securty affected:
. change the stated maturity of any debt security
. reduce the principal amount of, or the rate of interest on, or the amount of any
premium on, or any amount payable on redemption of, or extend the time for
payment or change the method of calculating interest on, any debt securty, or
16
reduce the amount of principal of an original issue discount securty that would be
due and payable upon acceleration of matuty
. impair the right to institute suit for the enforcement of any payment with respect
to any debt securty
. reduce the percentage in principal amount of outstanding debt securties of any
series necessary to modify or amend the indentue, or to waive compliance with
certain provisions of the indentue or defaults or events of default and their
consequences or
. subordinate any debt securties to any other of our indebtedness.
Indenture, Section 10.2
Waiver. The holders of not less than a majority in aggregate principal amount of the
outstanding debt securities of any series may waive any default or event of default with respect
to that series, except payment and bankptcy defaults. Indenture, Section 6.10
Defeasance. Unless we state otherwise in the prospectus supplement relating to the debt
securities of a particular series, the indentue provides that we shall be discharged from our
obligations under the indentue with respect to any series of debt securties at any time prior to
the maturity date or redemption of that series when we meet certain requirements specified in the
indenture, including
. when we have irevocably deposited with the trstee, in trst,
. suffcient funds to pay the principal of and premium, if any, and interest to
the matuity date or redemption on, the debt securities of that series or
. an amount of direct obligations of, or obligations guaranteed by, the
United States governent as wil be suffcient, without consideration of
any reinvestment of any accrued income on those obligations, to pay when
due the principal of and premium, if any, and interest to the matuity date
or redemption on, the debt securties of that series and
. when we have paid all other sums payable with respect to the debt securities of
that series.
Upon the discharge of the indenture with respect to a particular series, the holders of debt
securities of that series shall no longer be entitled to the benefits of the indentue, except for
puroses of registration of transfer, exchange and replacement of lost, stolen or mutilated debt
securities. Indenture, Sections 12.1 and 12.2
Concerning the Trustee. We and our affliates may conduct banking transactions with the
trstee in the normal course of business.
17
BOOK-ENTRY SYSTEM
We may issue all or some of the first mortgage bonds and debt securities in book-entr
form, which means that global notes, not certificates, wil represent the securities. Ifwe issue
global notes representing any securities, the following provisions wil apply to all book-entry
securties:
The Depository Trust Company, New York, NY, which we refer to as "DTC", wil act as
securities depository for the securties. We wil issue the securities as fully-registered securities
registered in the name of Cede & Co., DTC's partership nominee, or such other name as an
authorized representative ofDTC may request. We wil issue one fully-registered security
certificate for each issue of the securities, each in the aggregate principal amount of the issue,
and we wil deposit the certificate with the corporate trstee to hold as agent for DTC. We and
the trstee wil treat Cede & Co. as the holder of the securties for all puroses.
DTC, the world's largest securties depository, is a limited-purose trst company
organized under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934, as
amended. DTC holds and provides asset servicing for over 3.5 milion issues of Us. and non-
U.S. equity, corporate and municipal debt issues, and money market instrents from over 100
countres that DTC's direct participants deposit with DTC. DTC also facilitates the post-trade
settlement among direct participants of sales and other securties transactions in deposited
securties through electronic computerized book-entry transfers and pledges between direct
participants' accounts. This eliminates the need for physical movement of securities certificates.
Direct participants include both U.S. and non-US. securities brokers and dealers, banks, trst
companies, clearing corporations, and certain other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation, or DTCC. DTCC is the holding
company for DTC, National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its
regulated subsidiaries. Access to the DTC system is also available to others such as both US.
and non-U.S. securities brokers and dealers, banks, trst companies, and clearing corporations
that clear through or maintain a custodial relationship with a direct participant, either directly or
indirectly. DTC has Standard & Poor's highest rating: AAA. The DTC rules applicable to its
participants are on fie with the Securities and Exchange Commission. More information about
DTC can be found at ww.dtcc.com and ww.dtc.org.
Purchases of securities under the DTC system must be made by or through direct
paricipants, which wil receive a credit for the securties on DTC' s records. The ownership
interest of each actual purchaser, the beneficial owner, is in tu to be recorded on the direct and
indirect participants' records. Beneficial owners wil not receive written confirmation from DTC
of their purchase. Beneficial owners are, however, expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from the
direct or indirect participant through which the beneficial owner entered into the transaction.
Transfers of ownership interests in the securties are to be accomplished by entres made on the
books of direct and indirect participants acting on behalf of beneficial owners. Beneficial
18
owners wil not receive certificates representing their ownership interests in the securties, except
in the event that use of the book-entry system for the securties is discontinued.
To facilitate subsequent transfers, all securties deposited with DTC are registered in the
name ofDTC's partership nominee, Cede & Co., or such other name as an authorized
representative of DTC may request. The deposit of securities with DTC and their registration in
the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners of the securities. DTC's
records reflect only the identity of the direct participants to whose accounts the securities are
credited, which mayor may not be the beneficial owners. The direct and indirect participants
wil remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct participants, by direct
participants to indirect participants, and by direct participants and indirect paricipants to
beneficial owners wil be governed by arrangements among them, subject to any statutory or
regulatory requirements that may be in effect from time to time.
Redemption notices wil be sent to DTC. If less than all of the securties within an issue
are being redeemed, DTC' s practice is to determine by lot the amount of the interest of each
direct participant in the issue to be redeemed.
Neither DTC nor Cede & Co., nor any other DTC nominee, wil consent or vote with
respect to the securities unless authorized by a direct participant in accordance with DTC' s
money market instrent procedures. Under its usual procedures, DTC mails an omnibus proxy
to the issuer as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the securities are
credited on the record date, identified in a listing attached to the omnibus proxy.
Redemption proceeds and distributions on the securities wil be made to Cede & Co., or
such other nominee as an authorized representative ofDTC may request. DTC's practice is to
credit direct participants' accounts upon DTC' s receipt of fuds and corresponding detail
information from us or the trustee on the payable date in accordance with their respective
holdings shown on DTC's records. Payments by paricipants to beneficial owners wil be
governed by standing instrctions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in street name. Payment by participants to
beneficial owners wil be the responsibility of the participants and not ofDTC, the trstee or us,
subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds and distributions to Cede & Co., or such other nominee as may
be requested by an authorized representative of DTC, is our responsibility or the responsibility of
the trstee. Disbursement of these payments to direct participants wil be the responsibility of
DTC, and disbursement of these payments to the beneficial owners wil be the responsibility of
direct and indirect participants.
In case of any optional tender for or mandatory purchase of securties, pursuant to their
terms, a beneficial owner shall give notice to elect to have its securities purchased or tendered
through its participant to the tender/remarketing agent and shall effect delivery of the securties
by causing the direct paricipant to transfer the paricipant's interest in the securities, on DTC's
19
records, to the tender/remarketing agent. The requirement for physical delivery of securities in
connection with an optional tender or a mandatory purchase wil be deemed satisfied when the
ownership rights in the securities are transferred by direct participants on DTC's records and
followed by a book-entr credit of tendered securities to the tender/remarketing agent's DTC
account.
DTC may discontinue providing its services as depository with respect to the securties at
any time by giving reasonable notice to us. Under such circumstances, in the event that a
successor depository is not obtained, securty certificates are required to be printed and
delivered.
We may decide to discontinue use of the system of book-en tr-only transfers through
DTC, or a successor securties depository. In that event, security certificates wil be printed and
delivered to DTC.
Neither we, the trustee, any paying agent, nor the registrar for the securities wil have any
responsibility or liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a global security or for maintaining, supervising or reviewing
any records relating to these beneficial ownership interests.
The information in this section concerning DTC and DTC's book-entr system has been
obtained from sources that we believe to be reliable, but we take no responsibility for the
accuracy thereof.
USE OF PROCEEDS
Unless we state otherwise in the prospectus supplement, we wil add the net proceeds
from the sale of the securities to our general funds. We may use our general funds for any of the
following puroses:
. to acquire propert
. to constrct, complete, extend or improve our electric facilities
. to improve or maintain our service
. to redeem, pay at maturity or purchase outstanding first mortgage bonds and debt
securities and
. to repay short-term borrowings.
Ifwe do not use the proceeds immediately, we may temporarily invest them in short-term
instrents.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus:
20
. through underwriters or dealers
. through agents
. directly to a limited number of purchasers or to a single purchaser or
· through a combination of any of those methods of sale.
Through Underwriters or Dealers. Ifwe use underwters in the sale, the underwriters
wil buy the securties for their own account. The underwters may resell the securties in one or
more transactions, including negotiated transactions, at a fixed public offering price or at varying
prices determined at the time of the sale. The underwters may sell the securties directly or
through underwriting syndicates that managing underwters represent. Unless we state
otherwise in the prospectus supplement, the obligations of the underwiters to purchase the
securities wil be subject to certin conditions, and the underwters wil be obligated to purchase
all of the securities if they purchase any of them.
If we use a dealer in the sale, we wil sell those securties to the dealer as principaL. The
dealer may then resell the securities to the public at varying prices determined at the time of
resale.
Any initial public offering price and any discounts or concessions allowed or reallowed
or paid to dealers may be changed from time to time.
Through Agents. We may from time to time designate one or more agents to sell the
securities. Unless we state otherwise in the prospectus supplement, any agent will agree to use
its best efforts to solicit purchases for the period of its appointment.
Directly. We may sell the securities directly to one or more purchasers. In this case,
there wil be no underwriters or agents.
General Information.
The prospectus supplement wil state:
. the names of any underwriters, dealers or agents, and the amounts of securties
underwtten, purchased or sold by each of them
. the terms of the securities offered
. the purchase price of the securties and the proceeds we wil receive from the sale
. any initial public offering price
. any discounts or commissions and other items constituting underwiters' or
agents' compensation and
. any discounts or concessions allowed or reallowed or paid to dealers.
21
We may authorize underwters, dealers or agents to solicit offers from certain
institutions. We may sell the securties to these institutions for delayed delivery at a specified
date in the futue. At that time, they will pay the public offering price on the terms we describe
in the prospectus supplement.
We may agree to indemnify underwters, dealers and agents against certain civil
liabilities, including liabilities under the Securities Act of 1933.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securties and Exchange Commission allows us to incorporate by reference
information into this prospectus, which means that we can disclose importnt information to you
by referring you to other documents filed separately with the Securities and Exchange
Commission. The information incorporated by reference is considered to be part of this
prospectus. We incorporate by reference the following documents that we fied with the
Securities and Exchange Commission (SEC fie number 1-3198):
· Annual Report on Form 10-K for the year ended December 31, 2009 filed on
February 23,2010
· Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, filed on
May 6, 2010 and
· Current Reports on Form 8-K fied on January 22,2010, February 8, 2010, March
4,2010, March 24,2010, April 2, 2010, April 16, 2010, April 23, 2010, May 10,
2010 and May 21,2010.
We also incorporate by reference all documents we subsequently fie pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (i) after the date of the initial
registration statement and prior to the effectiveness of the registration statement and (ii) after the
date of this prospectus and before we terminate the offering. Weare not incorporating by
reference any documents or portions of documents that are not deemed "filed" with the
Securities and Exchange Commission, including any information fuished pursuant to Items
2.02 and 7.01 of Form 8-K.
Any statement contained in a document incorporated or deemed to be incorporated by
reference or deemed to be part of the prospectus shall be deemed to be modified or superseded
for purposes of the prospectus to the extent that a statement contained in the prospectus or in any
other subsequently fied document which also is or is deemed to be incorporated by reference or
deemed to be part of the prospectus modifies or replaces such statement. Any statement
contained in a document that is deemed to be incorporated by reference or deemed to be part of
the prospectus after the most recent effective date may modify or replace existing statements
contained in the prospectus. Any statement so modified shall not be deemed in its unmodified
form to constitute part of the prospectus for puroses of the Securties Act of 1933. Any
statement so superseded shall not be deemed to constitute part of the prospectus for purposes of
the Securties Act of 1933.
22
We wil provide to each person, including any beneficial owner, upon request, to whom
this prospectus is delivered, a copy of any or all of the information that has been incorporated by
reference in this prospectus but not delivered with this prospectus. You may obtain a copy of this
information at no cost, by wrtten or oral request to us at the following address:
Shareowner Services
Idaho Power Company
1221 W. Idaho Street
Boise, ID 83702
Telephone [phone]
You may also access these documents at htt://ww.idacorpinc.com.
WHERE YOU CAN FIND MORE INFORMATION
We fie annual, quarerly and curent reports and other information with the Securties
and Exchange Commission. The public may read and copy any materials we fie with the
Securities and Exchange Commission at the Securities and Exchange Commission's public
reference room located at 100 F Street, N.£., Washington, D.C. 20549. The public may obtain
information on the operation of the public reference room by calling the Securities and Exchange
Commission at 1-800-SEC-0330. The Securties and Exchange Commission maintains an
internet site that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Securties and Exchange Commission. The
address of that site is htt://ww.sec.gov. Information about us is also available at our website
at htt://ww.idahopower.comandonIDACORP, Inc.'s website at htt://ww.idacorpinc.com.
However, the information on our website and on IDACORP, Inc.'s website is not a part of this
prospectus.
This prospectus is part of a registration statement on Form S-3 that we fied with the
Securities and Exchange Commission relating to the securties covered by this prospectus. This
prospectus does not contain all the information included in the registration statement. You may
review a copy of the registration statement at the Securties and Exchange Commission's public
reference room or on the Securties and Exchange Commission's internet site referred to above.
LEGAL MATTERS
Rex Blackbur, our Senior Vice President and General Counsel, and Dewey & LeBoeuf
LLP, New York, New York, will pass upon the validity of the securties and other legal matters
for us. Sullvan & Cromwell LLP, New York, New York, wil pass upon the validity of the
securities for any underwriter, dealer or agent. Dewey & LeBoeufLLP and Sullivan &
Cromwell LLP may, for matters governed by the laws ofIdaho, rely upon the opinion of Mr.
Blackbur. As of May 1,2010, Mr. Blackbur owned 13,223 shares ofIDACORP, Inc. common
stock, including shares that may be acquired within 60 days pursuant to the exercise of stock
options. Mr. Blackbur is acquiring additional shares ofIDACORP, Inc. common stock at
regular intervals through employee stock plans.
23
EXPERTS
The consolidated financial statements of Idaho Power Company and its subsidiary for the
year ended December 31, 2009, and the related financial statement schedule, incorporated in this
prospectus by reference from the Company's Annual Report on Form 10-K for the year ended
December 31,2009, and the effectiveness of the Company's internal control over financial
reporting as of December 31,2009, have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports (which reports (1)
express an unqualified opinion on the financial statements and financial statement schedule and
include an explanatory paragraph relating to the adoption of guidance for accounting for
uncertainty in income taxes and (2) express an unqualified opinion on the effectiveness of
internal control over financial reporting), which are incorporated herein by reference. Such
financial statements and financial statement schedule have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods ended
March 31, 2010 and 2009, which is incorporated herein by reference, Deloitte & Touche LLP, an
independent registered public accounting firm, have applied limited procedures in accordance
with the standards of the Public Company Accounting Oversight Board (United States) for a
review of such information. However, as stated in their report included in the Company's
Quarterly Report on F onn 10-Q for the quarter ended March 31, 2010, and incorporated by
reference herein, they did not audit and they do not express an opinion on that interim financial
information. Accordingly, the degree of reliance on their report on such information should be
restrcted in light of the limited nature of the review procedures applied. Deloitte & Touche LLP
are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their
report on the unaudited interim financial information because the report is not a "report" or a
"part" of the registration statement prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Securties Act of 1933.
Rex Blackbur, our Senior Vice President and General Counsel, has reviewed the
statements under "Description of First Mortgage Bonds" relating to the lien of the indentue and
the statements as to matters of law and legal conclusions in the documents incorporated by
reference. We make these statements in reliance upon his opinion and authority as an expert.
24
$500,000,000
IDAHO POWER COMPAN
First Mortgage Bonds
Secured Medium-Term Notes, Series I
PROSPECTUS SUPPLEMENT
June 17,2010
BofA Merril Lynch
BNY Mellon Capital Markets, LLC
J.P. Morgan
KeyBanc Capital Markets
Mitsubishi UF J Securities
RBC Capital Markets
Sun Trust Robinson Humphrey
US Bancorp
Wells Fargo Securities