20110701Application.pdf

RECEIVED1S_
An IDACORP Company
IDAHO POWER COMPANY
g~S~~I~r~083707 ioi l JUL - f PM 3: 23
U~H.W'Íl(~;C:'-.:l,- ,/j ,) ;) ~i; I tJ j"IJ PATRICK A. HARNGTON
Corporate Secretary
HAND DELIVERED July 1, 2011
Ms. Jean D. Jewell
Secretary
Idaho Public Utilities Commission
Statehouse
Boise, Idaho 83720
Re: In the Matter of the Application of Idaho Power Company for an Order
Authorizing up to $450,000,000 Aggregate Principal Amount at any One
Time Outstanding of Short-Term Borrowings
Case No. IPC-E-11-12
Dear Ms. Jewell:
Enclosed please find an original and four (4) copies of Idaho Power's application
in the above referenced case, including a proposed order for the Commission's
consideration. An electronic copy of the proposed order wil also be e-mailed to you.
Idaho Power wil promptly file the $1,000 securties issuance application fee with the
Commission in this case.
Please feel free to contact me at 388-2878 or at pharngton~idahopower.com if
you have any questions regarding this filing.
Sincerely,
c:Steve Keen
Randy Mils
Terr Carlock
faø~
(00062267.DOC; 1)
Telephone [phone], Fax [phone]
pharrington~dahopower.com
REef!
BEFORE THE IDAHO PUBLIC UTILITIES CO~JSjION
UL -/ PH 3: 24
IN THE MA TIER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR AN ORDER )
AUTHORIZING UP TO $450,000,000 )
AGGREGATE PRINCIPAL AMOUNT AT )
ANY ONE TIME OUTSTANDING OF )
SHORT-TERM BORROWINGS )
)
LIT1i. f....,'"
CASE NO.
APPLICATION
IDAHO POWER COMPANY (the "Applicant") hereby applies for an Order of the
Idaho Public Utilities Commission (the "Commission") authorizing the Applicant to make up to
$450,000,000 aggregate principal amount at anyone time outstanding of short-ter borrowings as
set forth herein, pursuant to Chapter 9, Title 61, Idaho Code, and under Rules 141 though 150 of the
Commission's Rules of Procedure (the "Rules").
(1) The Applicant
Applicant is an electrc public utility incorporated under the laws of the state ofIdaho,
engaged principally in the generation, purchase, transmission, distrbution and sale of electrc energy
in an approximately 24,000 square mile area in souther Idaho and eastern Oregon. The principal
executive offices of the Applicant are located at 1221 W. Idaho Street, P.O. Box 70, Boise, Idaho
83707-0070; its telephone number is [phone].
(2) Description of Securities
Applicant's short-ter borrowings hereunder wil consist of (1) loans issued by
financial and other institutions and evidenced by unsecured notes or other evidence of indebtedness
of Applicant and (2) unsecured promissory notes and commercial paper of Applicant to be issued for
public or private placement through one or more commercial paper dealers or agents, or directly by
t00061543.DOC; 1 J
APPLICATION - 1
Applicant.
Applicant intends to secure commitments for new unsecured lines of credit, or
extensions of existing unsecured lines of credit, for its short-term borrowings hereunder. The
unsecured lines of credit may be obtained with several financial or other institutions, directly by the
Applicant or though an agent, when and if required by Applicant's then curent financial
requirements (see paragraph (4) Purose ofIssuance). Each individual line of credit commitment
wil provide that up to a specific amount at anyone time outstanding wil be available to Applicant
to draw upon for a fee to be determined by a percentage of the credit line available, credit line
utilization, compensating balance or combination thereof.
Applicant may also make arangements for uncommitted credit facilties under which
unsecured lines of credit would be offered to Applicant on an "as available" basis and at negotiated
interest rates. Such committed and uncommitted borrowings wil be evidenced by unsecured
promissory notes or other evidence of indebtedness of Applicant. The committed and uncommitted
line of credit agreements specifyng the ters of Applicant's short-ter borrowings wil be fied with
the Commission as Exhibit A to this Application.
Unsecured promissory notes wil be issued and sold by Applicant though one or
more commercial paper dealers or agents, or directly by Applicant, up to the limits imposed by
applicable statutes, rules or regulations. Each note issued as commercial paper wil be either
discounted at the rate prevailing at the time of issuance for commercial paper of comparable quality
and maturity or wil be interest bearng to be paid at matuty. Each note wil have a fixed matuty
and wil contain no provision for automatic "roll over".
t00061543.DOC; 1 J
APPLICATION - 2
Applicant expects to enter into a new or amended credit agreement in the fall of2011,
providing a committed line of credit from paricipating bans for short-ter borrowings of up to
$450,000,000 aggregate principal amount at anyone time outstanding, for a perod of up to seven
years, from October 2011 through October 2018, as further descrbed below (the "Credit
Agreement"). Applicant plans to use the Credit Agreement primarly as a backup credit facilty to
enhance the credit ratings for its commercial paper issuances, but may also borrow directly under the
Credit Agreement as it deems necessary or desirable.
(a) Amount of Securties
Applicant's short-ter borrowings wil not exceed a maximum $450,000,000
aggregate principal amount at anyone time outstanding during the ter of the Commission's
authorization hereunder. Applicant expects that its Credit Agreement wil initially authorize
Applicant to borrow up to $325,000,000 aggregate principal amount at anyone time outstanding,
with the option of Applicant to increase the borrowing limit to $450,000,000 during the ter ofthe
Credit Agreement. Applìcant wil provide wrtten notice to the Commission in the event Applicant
exercises its right to increase the Credit Agreement borrowing limit above $325,000,000.
(b) Interest Rate
Applicant anticipates that its short-ter borrowings hereunder wil include interest
rates that may be fixed or varable, and that the rates wil be based on LIBOR, the applicable prime
rate, or other rate established in the borrowing arangements, and may vary based upon the ratigs of
Applicant's first mortgage bonds or Applicant's corporate credit rating.
( c) Date of Issue
t00061543.DOC; q
APPLICATION - 3
Applicant requests authority to make short-ter borrowings hereunder for a seven (7)
year period, from October 1, 2011 though October 1, 2018. Applicant expects that the Credit
Agreement wil allow borrowings for an initial five (5) year perod, from October 2011 through
October 2016, with the option of Applicant to extend the borrowing perod for two one-year
extensions, up to October 2018. Applicant wil notify the Commission in wrting if it elects to
exercise either of the one-year extensions to the Credit Agreement beyond October 2016. In no
event wil the ter of any Applicant short-term borrowings hereunder extend beyond October 1,
2018.
Applicant is requesting authorization to make the short-ter borrowings as descrbed
in this Application during the seven-year period from October 1, 2011 through October 1, 2018, so
long as Applicant maintains at least a BBB- or higher senior secured debt rating, as indicated by
Standard & Poor's Ratings Services, and a Baa3 or higher rating as indicated by Moody's Investors'
Service, Inc. Applicant requests that if its senior secured debt rating falls below either such rating
("Downgrade"), its short-ter borrowing authority wil continue for a period of364 days from the
date of the Downgrade ("Continued Authorization Period"), provided that the Applicant:
(I) Promptly notifies the Commission in writing of the Downgrade; and
(2) Files a supplemental application with the Commission within seven (7) days
after the Downgrade, requesting a supplemental order ("Supplemental
Order") authorizing Applicant to continue to make short -ter borrowings and
issue commercial paper as provided in the Order, notwithstanding the
Downgrade. Until Applicant receives the Supplemental Order, any short-
ter borrowings made or commercial paper issued by Applicant during the
t00061543.DOC; q
APPLICATION - 4
Continued Authorization Perod would become due or matue no later than
the final date of the Continued Authorization Perod.
(d) Date of Maturity
The proposed short-ter borrowings wil have maturities of one year or less.
Applicant is seeking authorization to make short-term borrowings at any time hereunder so long as
the borrowings made or commercial paper issued mature no later than October 1,2018.
(e) Voting Privileges
Not applicable.
(f) Call or Redemption Provisions
Not applicable.
(g) Sinking Fund or Other Provisions for Secured Payment
Not applicable.
(3) Manner of Issuance
(a) Method of Marketing
Applicant's line of credit arangements are expected to include one or more lead
agents, and a number of additional banks as parcipating agents. The Credit Agreement would likely
include the following fees for the lead agent( s) and paricipating agents: (1) an up-front arangement
fee payable to the lead agent(s) totaling approximately .15% to .25% of the principal amount
committed, (2) up-front agent paricipation fees payable to all paricipating agents totaling
approximately .25% of the principal amount committed, (3) anual commitment agent facility fees
payable to all paricipating agents equal to approximately .15% to .25% of the principal amount
committed, and (4) anual administrative fees payable to the lead agent(s) of approximately $20,000
t00061543.DOC; 1 J
APPLICATION - 5
to $30,000. The principal amount committed for purposes of calculating the agent fees wil be
$325,000,000, unless the authorized borrowing amount under the Credit Agreement is increased as
descrbed above, up to a maximum of $450,000,000. Other expenses relating to the Credit
Agreement line of credit facility are estimated to include: Applicant's legal fees of approximately
$100,000, agent legal fees of approximately $50,000, and miscellaneous expenses of approximately
$25,000.
The above referenced Credit Agreement fees are customar for the market and wil
offset the agents' costs, including personnel time, travel and administrative costs associated with
negotiating and administering the unsecured lines of credit. The Applicant finds these fees are
reasonable given the services provided by the agents. With respect to commercial paper issuances, it
is expected that the commercial paper dealers or agents wil sell such notes at a profit to them of not
to exceed 1/8 of 1 percent ofthe principal amount of each note.
(b) Terms of Sale
See paragraph (3)(a), Method of Marketing.
. (c) Underwting Discounts or Commissions
(A) Reference is made to paragraph (3)(a), Method of Marketing, which
specifies the method of payment of fees to the financial or other institutions.
(B) It is expected that the commercial paper dealers or agents wil sell such
notes at a profit to them of not to exceed 1/8 of 1 percent of the principal amount of each note.
(d) Sales Price
See paragraph (3)(c), Underting Discounts or Commissions.
(4) Purpose of Issuance
t00061543.DOC; q
APPLICATION - 6
The net proceeds to be received by the Applicant from the short-ter borrowings
hereunder wil be used to obtain temporary short-ter capital for the acquisition of propery; the
constrction, completion, extension or improvement of its facilities; the improvement or
maintenance of its service; the discharge or lawful refunding of its obligations; and for general
corporate puroses.
(5) Statement of Explanation
Applicant believes and alleges the facts set forth in paragraph (4), Purpose of
Issuance, disclose that the proposed short-term borrowings are for a lawful object within the
corporate puroses of Applicant and compatible with the public interest, and are necessar or
appropriate for, or consistent with, the proper performance by Applicant of serice as a public utility
and wil not impair its ability to perorm that serce.
(6) Financial Statements; Resolutions
Attached to this application as Attachment I are Applicant's financial statements
dated as of March 31, 2011, consisting of its (A) Actual and Pro Forma Balance Sheet and Notes to
Financial Statements, (B) Statement of Capital Stock and Funded Debt, (C) Commitments and
Contingent Liabilities, (D) Statement of Retained Earings and (E) Statement of Income.
A cerified copy of the resolutions of Applicant's Directors authorizing the short-ter
borrowings with respect to this Application wil be fied with the Commission by July 15, 2011, as
Attachment II.
(7) Proposed Order
Attached to this application as Attachment II is a Proposed Order for consideration
by the Commission in this matter.
t00061543.DOC; 1 J
APPLICATION - 7
(8) Notice of Application
Notice of this Application wil be published in those newspapers in Applicant's
serice tertory listed in Rule 141 (h) of the Rules within seven (7) days after the date hereof.
Applicant wil fie as Exhibit A hereto copies of the Credit Agreement and other
agreements for the committed and uncommitted unsecured lines of credit and other borrowing
arangements hereunder.
PRAYER
WHEREFORE, Applicant respectfully requests that the Idaho Public Utilities
Commission issue its Order authorizing Applicant to make up to $450,000,000 aggregate principal
amount at anyone time outstanding of short-ter borrowings, for the perod from October 1, 2011
through October 1, 2018, under the ters and conditions and for the purposes set fort in this
application.
DATED at Boise, Idaho this 30th day of June, 2011.
(CORPQRATE SEAL)
IDAHO POWER COMPANY.~
teven R. Keen
Vice President and Treasurer
ATTEST:
!W17LJlsI Patrck A. H
Secretar
Idaho Power Company
1221 W. Idaho Street
P.O. Box 70
Boise,ID 83707-0070
t00061543.DOC; q
APPLICATION - 8
VERIFICATION
I, Steven R. Keen, declare that I am the Vice President, Finance and Treasurer of
Idaho Power Company, and am authorized to make this Verification. The application and the
attached exhibits were prepared at my direction and were read by me. I know the contents of the
Application and the attached exhibits, and they are tre, correct and complete to the best of my
knowledge and belief.
WITESS my hand and sea of Idaho Power Copay ~s ~O~y .Of June, 2011.~R'Z~~R.Keen
~SUBSCRIBED AND SWORN to me this ~ day of June, 2011.
(Notar Seal)
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¡~I O'tAR¡." \\""'.~ \-)¡ l _.- i i Notar Public for Idaho
\ \ PUB'" \ (, J 0 i! Residing at Boise, Idaho
'\ .n..... ....:.~ ¡ My Commission Expires: OJ 1?l /2£ Ilf.#. 'U¡. ....... 'Q" ....
'.....,11'E Of \ ""i"............','
t00061543.DOC; q
APPLICATION - 9
ATTACHMENT I(A)
IDAHO POWER COMPANY
BALANCE SHEET
As of March 31,2011
ASSETS
Electc Plant :
In service (at original cost)..........................................................
Accumulated provision for depreciation.................................
In service - Net......... ..................... ........................ ... ..............
Construction work in progress...................................... ...............
Held for future use.......................................................................
Electrc plant - Net............................................................ ......
Investments and Other Propert:
Nonutilty propert..................................................... ..................
Investment in subsidiary companies ..........................................
Other...........................................................................................
Total investments and other propert..........................................
Current Assets:
Cash and cash equivalents..................................... ................. ...
Receivables:
Customer...............................................................................
Allowance for uncollectible accounts....... .......... ............... .....
Notes......................................................................................
Related part..........................................................................
Other......................................................................................
Accrued unbiled revenues................................................. .........
Materials and supplies (at average cost)....................................
Fuel stock (at average cost)........................................................
Prepayments............................. ............ ... ................. ..................
Other...............................
Total current assets................................. ..............................
Deferred Debits:
American Falls and Milner water rights.......................................
Company owned life insurance............... ... ........... ......................
Regulatory assets........................... ... ................... ......................
Other...........................................................................................
Total deferred debits...................................................................
TotaL...........................................................................................
After
Actual Adjustments Adjustments
4,354,553,910 $$4,354,553,910
(1,633,508,693)(1,633,508,693)
2,721,045,217 2,721,045,217
485,248,838 485,248,838
7,080,816 7,080,816
3,213,374,871 3,213,374,871
2,081,420 2,081,420
73,113,546 73,113,546
30,390,304 30,390,304
105,585,270 105,585,270
91,018,213 450,000,000 541,018,213
68,096,582 68,096,582
(1,604,840)(1,604,840)
238,662 238,662
14,101,408 14,101,408
13,442,325 13,442,325
41,591,774 41,591,774
45,871,129 45,871,129
33,595,162 33,595,162
8,948,308 8,948,308
810,631 810,631
316,109,354 450,000,000 766,109,354
20,796,272 20,796,272
26,675,899 26,675,899
744,770,296 744,770,296
40,180,758 40,180,758
832,423,225 832,423,225
$4,467,492,720 $450,000,000 $4,917,492,720
C:\Docurnents and Settings\pah2878\Local Settings\Temporary Internet Files\Content.Outlook\DS58JHIB\Balance Sheet (2).xlsx
Balance Sheet for applicaton
6/30/2011
11:35AM
IDAHO POWER COMPANY
BALANCE SHEET
As of March 31, 2011
CAPITALIZATION AND LIABILITIES
Common Shares Common Shares
Authorized Outstanding
Equity Capital: 50,000,000 39,150,812
Common stock............................................................................
Premium on capital stock......................................................... ...
Capital stock expense.................................................................
Retained earnings.................................................... ........ ...........
Accummulated other comprehensive income.............................
Total equity capital.................................................................
Long-Term Debt:
First mortgage bonds ............................ .....................................
Pollution control revenue bonds .................................................
American Falls bond and Milner note guarantees ......................
Unamortized discount on long-term debt (Dr).......... ....... ............
Total long-term debt...............................................................
Current Liabilities:
Notes payable......... ....................................................... .............
Accounts payable .. ................... ........................... ............. ..........
Notes and accounts payable to related parties...........................
Taxes accrued......................... ...... ... .................. .........................
Interest accrued..........................................................................
Other...........................................................................................
Total current liabilties............................................................
Deferred Credits:
Deferred income taxes.................... ......... .......... ............... ...........
Regulatory liabilties-other.......... .................................................
Other...........................................................................................
Total deferrd credits.............................................................
Total.......................................................................................
After
Actual Adjustments Adjustments
$97,877,030 $97,877,030
688,757,435 688,757,435
(2,096,925)(2,096,925)
645,153,592 645,153,592
(8,780,865)(8,780,865)
1,420,910,267 1,420,910,267
1,295,000,000 1,295,000,000
170,460,000 170,460,000
26,266,818 26,266,818
(3,358,167)(3,358,167)
1,488,368,651 1,488,368,651
450,000,000 450,000,000
62,370,162 62,370,162
834,509 834,509
19,327,095 19,327,095
23,947,744 23,947,744
128,971,926 128,971,926
235,451,436 450,000,000 685,451,436
662,578,055 662,578,055
225,241,431 225,241,431
434,942,880 434,942,880
1,322,762,366 1,322,762,366
$4,467,492,720 $450,000,000 $4,917,492,720
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Balance Sheet for applicaton
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ACCOUNT
NUMBER
101
102
105
107
108
111
114
115
121
122
1231
124
125
128
131
134
135
136
141
142
143
144
145
146
151
152
154
1581
1582
163
165
171
173
175
176
181
1822
1823
183
184
185
186
188
189
ACCOUNT TITLE
Electric plant in service........................ 4,355,008,359.12
Electric plant purchased or sold..........
Electrc plant held for future use.... ... ...
Construction work in progress - Electri
Accumulated provision for depreciatiot
Accumulated provision for amortizatioi
Electric plant acquisition adjustment.
Accumulated provision for amortzatioi
Nonutilty propert................................
Accumulated provision for deprecatior
Investment in subsidiary companies...
Other investments...............................
Sinking funds............... ......... ...............
Other special funds...... .......................
Cash....................................................
Other special deposits.........................
Working funds.....................................
Temporary cash investments..............
Notes receivable......... ... ......................
Customer accounts receivable........ ....
Other accounts receivable............. ......
Accumulated provision for uncollectibl
Intercompany Notes Receivable -IPC'
Accounts receivable from associated (
Fuel stock............................................
Fuel expense undistributed ................
Plant materials and operating supplie~
Allowance Inventory............................
Allowances Withheld............. ..............
Stores expense undistributed..............
Prepayments. ..... ...... ...................... .....
Interest and dividends receivable........
Accrued utility revenues......................
Derivative instrument assets... ... ... ....
Derivative instrument assets - hedges
Unamortized debt expense .................
Unrecovered plant and regulatory stuc
Other regulatory assets.......................
Preliminary survey and investigation c
Clearing accounts......... .......................
Temporary facilties.............................
Miscellaneous deferred debits......... ....
RD&D
Unamortized loss on reacquired debt. 14,295,908.42
deferred income taxes...i'f'fl~~¡
7,080,816.27
485,248,837.80
(1,774,007,326.93)
(19,125,506.70)
(454,449.28)
424,152.32
2,081,419.93
73,113,546.35
2,309.11
30,016,089.42
51,243,742.19
(0.25)
44,850.00
39,729,621.21
238,661.94
68,096,582.21
13,442,324.69
(1,604,840.00)
13,701,318.30
400,089.85
33,595,162.00
42,240,936.29
3,630,192.70
8,948,308.27
4,525.29
41,591,773.85
1,178,012.23
17 ,941,875.50
740,247,533.89
466,355.01
767,106.30
54,181,683.80
201
204
2042
204305
204306
207
210
211
214
215
216
2161
2162
2163
Common stock issued........ ......... ... .....
Preferred stock issued - 4% Preferred
Preferred stock issued - 7.68% Series
Preferred stock issued - 8.37% Perpel
Preferred stock issued - Flexible aucti.
Preferred stock issued - 7.07% Series
Premium on capital stock................ ....
Gain on reacquired capital stock - 4%
OCI......................................................
Capital stock expense.... .................. ...
Appropriated retained earnings... ... .....
Unappropriated retained earnings.......
Unappropriated undistributed subsidia
Accumulated other comprehensive inc
Subsidiary accumulated other compre
97,877,030.00
688,757,435.30
(2,096,924.51 )
2,031,670.33
573,318,128.34
70,650,452.81
American Falls and Milner
186727
186734
American Fall~
Company-owned life insurance
186720
186726
Company_owr' .
ARO reclass on ELM business uni
ARO amount 159,199,987.91
Regulatory Assets
Form 3-0 744,770,296.00
182.3 740,247,533.89
182.319 adjusl 4,522,762.11
744,770,294.83
Other DD 87,652,929.03
Am Falls/Milne.
COLI
NetotherDD 40,180,758.03
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Balance Sheet for applicaton
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219
221
2213
222
224
225
226
2282
2283
2284
229
230
231
232
233
234
235
236
237
2372
238
241
242
2424
244
245
252
253
254
255
257
281
282
283
Accumulated other comprehensive inc
Bonds - First mortgage..... ........... ........
Bonds - Pollution control revenue........
Reacquired Bonds
Other long-term debt.........................
Unamortized premium on long-term dE
Unamortized discount on long-term de
Accumulated provision for injuries and
Accumulated provision for pensions....
Accumulated misc oper prov
Accumulated provision for rate refund:
Asset retirement obligation......... ......
Notes payable.....................................
Accounts payable................................
Notes payable to associated companÎl
Accounts payable to associated comp
Customer deposits...... ....... .................
Taxes accrued.....................................
Interest accrued - Long-term debt.....
Interest accrued - Other liabilties........
Dividends declared........................... ...
Tax collections payable.......................
Miscellaneous current and accrued lia
Preferred dividends accrued...............
Derivative instrument liabilties... ... ... .
Derivative instrument liabilties - hedgE
Customer advances for construction...
Other deferred credits.........................
Other regulatory liabilties....................
Accumulated deferred investment tax
Unamortized gain on reacquired debt.
Accumulated deferred income taxes -
Accumulated deferred income taxes -
Accumulated deferred income taxes -
(8,780,865.34)
1,465,460,000.00
26,266,818.18
(3,358,167.42)
1,727,593.00
273,378,881.61
100,000.00
24,062,028.21
20,744,846.06
62,370,161.89
834,508.65
9,029,991.06
18,480,434.81
23,947,744.34
1,783,475.80
116,408,434.29
1,750,025.19
22,681,409.72
24,114,760.76
61,518,682.51
68,133,360.15
Deferred income taxes
Regulatory liabilities
Form 3-Q 66,041,443.00
ARO amount 159199987.9
225,241,430.91
61,518,682.51
4,522,760.49
254
Adjustment
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Balance Sheet for applicaton
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IDAHO POWER COMPANY
STATEMENT OF ADJUSTING JOURNAL ENTRIES
As of March 31, 2011
Giving Effect to the Proposed issuance of
Short-term notes
Entry NO.1
Cash................................................................................................ $450,000,000
Notes payable.................................................................................................... $ 450,000,000
To record the proposed issuance of short-term
notes and the receipt of cash.
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Adjustng Entries.xlsx
AJE-BS
6/30/2011
11:34AM
IDAHO POWER COMPANY
CONDENSED NOTES TO FINANCIAL STATEMENTS
As of March 31, 2011
1. Management Estimates
Management makes estimates and assumptions when preparing financial statements in conformity with
GAAP. These estimates and assumptions include those related to rate regulation, retirement benefits,
contingencies, litigation, asset impairment, income taxes, unbiled revenues, and bad debt. These estimates
and assumptions affect the reported amounts of assets and liabilties and the disclosure of contingent assets
and liabilties at the date of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. These estimates involve judgments with respect to, among other things, future
economic factors that are dificult to predict and are beyond management's control. As a result, actual results
could differ from those estimates.
2. Regulation of Utilty Operations
Idaho Power's financial statements reflect the effects of the different ratemaking principles followed by the
jurisdictions regulating Idaho Power. The application of accounting principles related to regulated operations
sometimes results in Idaho Power recording expenses and revenues in a different period than when an
unregulated enterprise would. In these instances, the amounts are deferred as regulatory assets or
regulatory liabilties on the balance sheet and recorded on the income statement when recovered or returned
in rates. Additionally, regulators can impose regulatory liabilties upon a regulated company for amounts
previously collected from customers and for amounts that are expected to be refunded to customers. The
effects of applying these regulatory accounting principles to Idaho Power's operations are discussed in more
detail in Note 13.
3. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and highly liquid temporary investments with maturity dates
at date of acquisition of three months or less.
4. Derivative Financial Instruments
Financial instruments such as commodity futures, forwards, options, and swaps are used to manage
exposure to commodity price risk in the electricity and natural gas markets. All derivative instruments are
recognized as either assets or liabilities at fair value on the balance sheet. Idaho Power's physical forward
contracts qualify for the normal purchases and normal sales exception to derivative accounting requirements
with the exception of forward contracts for the purchase of natural gas for use at Idaho Power's natural gas
generation facilties. The objective of the risk management program is to mitigate the price risk associated
with the purchase and sale of electricity and natural gas. Because of Idaho Power's regulatory accounting
mechanisms, Idaho Power records the changes in fair value of derivative instruments related to power supply
as regulatory assets or liabilties.
5. Property, Plant and Equipment and Depreciation
The cost of utility plant in service represents the original cost of contracted services, direct labor and material,
AFUDC, and indirect charges for engineering, supervision, and similar overhead items. Repair and
maintenance costs associated with planned major maintenance are expensed as the costs are incurred, as
are maintenance and repairs of propert and replacements and renewals of items determined to be less than
units of property. For utilty property replaced or renewed, the original cost plus removal cost less salvage is
charged to accumulated provision for depreciation, while the cost of related replacements and renewals is
added to propert, plant and equipment.
All utility plant in service is depreciated using the straight-line method at rates approved by regulatory
authorities. Annual depreciation provisions as a percent of average depreciable utilty plant in service
approximated 2.84 percent in 2010, 2.81 percent in 2009, and 2.73 percent in 2008.
Long-lived assets are periodically reviewed for impairment when events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. If the sum of the undiscounted expected future
cash flows from an asset is less than the carrying value of the asset, impairment must be recgnized in the
financial statements. There were no material impairments of these assets in 2010, 2009, or 2008..
CONDENSED NOTES TO FINANCIAL STATEMENTS (Continued)
6. Revenues
Operating revenues related to Idaho Power's sale of energy are recorded when service is rendered or energy
is delivered to customers. Idaho Power accrues estimated unbiled revenues for electric services delivered to
customers but not yet biled at period-end. Idaho Power collects franchise fees and similar taxes related to
energy consumption. None of these collections are reported on the income statement. Beginning in
February 2009, Idaho Power is collecting in base rates a portion of the allowance for funds used during
construction (AFUDC) related to its Hells Canyon relicensing project, as discussed in Note 3. Cash collected
under this ratemaking mechanism is not recorded as revenue, but is instead recorded as a regulatory liabilty.
7. Allowance for Funds Used During Construction
AFUDC represents the cost of financing construction projects with borrowed funds and equity funds. With
one exception, cash is not realized currently from such allowance, it is realized under the ratemaking process
over the service life of the related property through increased revenues resulting from a higher rate base and
higher depreciation expense. The component of AFUDC attibutable to borrowed funds is included as a
reduction to interest expense, while the equity component is included in other income. Idaho Power's
weighted-average monthly AFUDC rates for 2010,2009, and 2008 were 8.0 percent, 6.7 percent, and 5.2
percent, respectively. Idaho Power's reductions to interest expense for AFUDC were $11 milion for 2010, $5
millon for 2009, and $7 milion for 2008. Other income included $17 milion, $8 milion, and $3 millon of
AFUDC for 2010,2009, and 2008, respectively.
8. Income Taxes
IDACORP and Idaho Power account for income taxes under the asset and liability method, which requires the
recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have
been included in the financial statements. Under this method, deferred tax assets and liabilities are
determined based on the differences between the financial statements and tax basis of assets and liabilities
using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a
change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the
enactment date.
Consistent with orders and directives of the Idaho Public Utilities Commission (IPUC), the regulatory authority
having principal jurisdiction over Idaho Power's Idaho service territory, Idaho Power's deferred income taxes
for plant-related items (commonly referred to as normalized accounting) are primarily provided for the
difference between income tax depreciation and book depreciation used for financial statement purposes.
Unless contrary to applicable income tax guidance, deferred income taxes are not provided for those income
tax timing differences where the prescribed regulatory accounting methods direct Idaho Power to recognize
the tax impact currently for rate-making and financial reporting. Regulated enterprises are required to
recognize such adjustments as regulatory assets or liabilties if it is probable that such amounts wil be
recovered from or returned to customers in future rates.
The State of Idaho allows a three-percent investment tax credit on qualifying plant additions. Investment tax
credits earned on regulated assets are deferred and amortized to income over the estimated service lives of
the related properties. Credits earned on non-regulated assets or investments are recognized in the year
earned.
9. Comprehensive Income
Comprehensive income includes net income, unrealized holding gains and losses on available-far-sale
marketable securities, and amounts related to a deferred compensation plan for certin senior management
employees and directors called the Senior Management Security Plan (SMSP).
10. Other Accounting Policies
Debt discount, expense and premium are deferred and being amortized over the terms of the respective debt
issues.
11. New Accounting Pronouncements
There are no new accounting pronouncements issued but not yet adopted that are expected to have a
material impact on the financial statements of Idaho Power.
CONDENSED NOTES TO FINANCIAL STATEMENTS (Continued)
12. Financing
Credit Facilties
Idaho Power has a $300 milion credit facilty that expire on April 25, 2012. Idaho Power may issue
commercial paper up to the amounts supported by the credit facilties. Under these facilties the companies
pay a facility fee on the commitment, quarterly in arrears, based on the company's rating for senior
unsecured long-term debt securities (without third-part credit enhancement) as provided by Moody's
Investors Service and Standard & Poor's Ratings Services.
At March 31, 2011, no loans or short-term borrowings were outstanding under Idaho Power's facilty. At
March 31,2011, Idaho Power had regulatory authority to incur up to $450 milion of short-term indebtedness.
Long-Term Financing: In May 2010, Idaho Power registered with the SEC up to $500 millon of first
mortgage bonds and debt securities. On June 17, 2010, Idaho Power entered into a sellng agency
agreement with ten banks named in the agreement in connection with the potential issuance and sale from
time to time of up to $500 milion aggregate principal amount of first mortgage bonds. As of March 31, 2011,
$300 millon remained on Idaho Power's shelf registration for the issuance of first mortgage bonds and debt
securities.
On March 2, 2011, Idaho Power repaid at maturity $120 millon of first mortgage bonds using proceeds from
first mortgage bonds issued in August 2010.
Mortgage: As of December 31, 2010, Idaho Power could issue under its Indenture of Mortgage and Deed of
Trust, dated as of October 1, 1937, between Idaho Power and Deutsche Bank Trust Company Americas
(formerly known as Bankers Trust Company) and R.G. Page, as Trustees (Stanley Burg, successor individual
trustee) (Mortgage) approximately $407 millon of additional first mortgage bonds based on total unfunded
property additions of approximately $679 milion. Idaho Power could issue an additional $612 millon of first
mortgage bonds based on retired first mortgage bonds. These amounts are further limited by the maximum
amount of first mortgage bonds set forth in the Mortgage.
The Mortgage secures all bonds issued under the indenture equally and ratably, without preference, priority,
or distinction. First mortgage bonds issued in the future wil also be secured by the Mortgage. The lien of the
indenture constitutes a first mortgage on all the properties of Idaho Power, subject only to certain limited
exceptions including liens for taxes and assessments that are not delinquent and minor excepted
encumbrances. Certain of the properties of Idaho Power are subject to easements, leases, contracts,
covenants, workmen's compensation awards, and similar encumbrances and minor defects and clouds
common to properties. The Mortgage does not create a lien on revenues or profis, or notes or accounts
receivable, contracts or chases in action, except as permitted by law during a completed default, securities,
or cash, except when pledged, or merchandise or equipment manufactured or acquired for resale. The
Mortgage creates a lien on the interest of Idaho Power in property subsequently acquired, other than
excepted property, subject to limitations in the case of consolidation, merger, or sale of all or substantially all
of the assets of Idaho Power. The Mortgage requires Idaho Power to spend or appropriate 15 percent of its
annual gross operating revenues for maintenance, retirement, or amortization of its properties. Idaho Power
may, however, anticipate or make up these expenditures or appropriations within the five years that
immediately follow or precede a particular year.
On February 17,2010, Idaho Power entered into the Forty-fifth Supplemental Indenture, dated as of February
1, 2010, to the Mortgage for the purpose of increasing the maximum amount of first mortgage bonds issuable
by Idaho Power from $1.5 to $2.0 billon. The amount issuable is also restricted by property, earnings, and
other provisions of the Mortgage and supplemental indentures to the Mortgage. Idaho Power may amend the
Mortgage and increase this amount without consent of the holders of the first mortgage bonds. The
Mortgage requires that Idaho Power's net earnings be at least twice the annual interest requirements on all
outstanding debt of equal or prior rank, including the bonds that Idaho Power may propose to issue. Under
certain circumstances, the net earnings test does not apply, including the issuance of
refunding bonds to retire outstanding bonds that mature in less than two years or that are of an equal or
higher interest rate, or prior lien bonds.
CONDENSED NOTES TO FINANCIAL STATEMENTS (Continued)
13. Regulatory Matters
Recent and Pending Idaho Regulatory Matters
Power Cost Adjustment Application Filing
In both its Idaho and Oregon jurisdictions, Idaho Power has power cost adjustment, or PCA, mechanisms
that address the volatilty of power supply costs and provide for annual adjustments to the rates charged to its
retail customers. The PCA mechanisms track Idaho Power's actual net power supply costs (primarily fuel
and purchased power less off-system sales) and compare these amounts to net power supply costs currently
being recovered in retail rates. In its Idaho jurisdiction, the annual PCA rate adjustments are based on two
components:
a forecast component, based on a forecast of net power supply costs in the coming year as
compared to current net power supply costs included in base rates; and
a true-up component, based on the diference between the previous year's actual net power supply
costs and the previous year's forecast. This component also includes a balancing mechanism so
that, over time, the actual collection or refund of authorized true-up dollars matches the amounts
authorized. The true-up component is calculated monthly, and interest is applied to the balance.
On May 28,2010, the IPUC issued an order approving a $146.9 millon decrease in Idaho PCA rates,
effective June 1,2010. On April 15, 2011, Idaho Power made its annual PCA filing with the IPUC. In its
application, Idaho Power requested a $40.4 milion reduction to current Idaho PCA rates, effective for the
period from June 1, 2011 to May 31, 2012. The requested reduction reflects lower forecasted power supply
costs than last year and includes a $14.5 millon refund to customers of the March 31,2011 true-up balance.
The requested reduction to current Idaho PCA rates was net of Idaho Power's additional request in the
application to recover in Idaho PCA rates $10.0 millon of Idaho Power's energy efficiency rider deferral
balance that the IPUC had previously authorized for recovery in Idaho Power's Idaho PCA rates.
Load Change (Formerly "Load Growth'7 Adjustment Rate Order
The load change adjustment rate (LCAR), (formerly referred to as the "load growth adjustment rate") is an
element of the Idaho PCA formula that is intended to minimize the impact of fluctuations in power supply
expenses associated with load changes resulting from changing weather conditions, customer base, or
customer use patterns. The LCAR reconizes that the power supply expenses recovered through Idaho
Power's base rates change as loads increase or decrease. The LCAR adjusts, upwards or downwards,
power supply costs Idaho Power recovers through its Idaho PCA for differences between actual load and the
load used in calculating base rates. On January 14, 2011, Idaho Power submitted comments to the IPUC in
support of a revised methodology submitted by another utility for deriving the LCAR rate. Idaho Power's filing
with the IPUC requested a new LCAR rate of $19.36 per MWh, in accordance with the proposed
methodology, effective April 1, 2011, representing a 27 percent decrease relative to the then-current LCAR
rate.
On March 15, 2011, the IPUC issued an order requiring Idaho Power and the two other utilities involved in
the proceeding to modify their LCAR such that it is computed based on the most recent IPUC-approved cost
of service results, effective for Idaho PCA calculations beginning on April 1, 2011. Idaho Power began
applying the new LCAR rate of $19.36 per MWh on that date.
Fixed Cost Adjustment Mechanism
In March 2007, the IPUC approved the implementation of a fixed cost adjustment (FCA) pilot program for
Idaho Power's residential and small general service customers. The FCA is a rate mechanism designed to
remove Idaho Power's disincentive to invest in energy efficiency programs by separating (or decoupling) the
recovery of fixed costs from the variable kilowatt-hour charge and linking it instead to a set amount per
customer. The FCA allows Idaho Power to recover the difference between certain fixed costs recovered in
CONDENSED NOTES TO FINANCIAL STATEMENTS (Continued)
rates and the fixed costs authorized for recovery in Idaho Power's most recnt rate case. The initial pilot
program began on January 1, 2007 and ended on December 31, 2009. On April 29, 2010, the IPUC
approved a two-year extension of the FCA pilot program, efective retroactively, through December 31, 2011.
On March 15, 2011, Idaho Power filed an application with the IPUC requesting authorization to implement
revised FCA rates for electric service from June 1, 2011 through May 31, 2012. Idaho Power's application
requested an aggregate increase of $3.0 millon in FCA rates for the residential and small general service
customer classes in its Idaho jurisdiction. As of the date of this report, a determination and order from the
IPUC is pending.
Recovery of Contribution to Defined Benefit Pension Plan
In May 2010, the IPUC approved Idaho Power's request to increase rates to allow recovery of a $5.4 milion
planned cash contribution to its defined benefit pension plan for the 2009 plan year. In September 2010,
Idaho Power elected to make a $60 millon contribution to its defined beneft pension plan, rather than the
minimum required funding amount, to bring the defined benefit pension plan to a more funded position,
reduce future required contributions, and reduce Pension Benefit Guaranty Corporation premiums.
On March 15, 2011, Idaho Power filed an application with the IPUC requesting an increase in the amount
included in base rates for recovery of the Idaho-allocated portion of Idaho Power's cash contributions to its
defined benefit pension plan from the current amount of $5.4 million to approximately $17.1 millon annually.
Idaho Power's application requested that the revised rates become efective on June 1, 2011. The IPUC has
approved processing of the application under modified procedure, which may allow for issuance of an order
on or before June 1, 2011.
On October 1, 2010, Idaho Power filed an application with the IPUC requesting an order accepting Idaho
Power's 2011 retirement benefits package, but not requesting recovery through rates of additional pension
plan contributions. On April 28, 2011, the IPUC issued an order accepting Idaho Power's 2011 retirement
benefits package.
Energy Effciency and Demand Response Programs
Idaho Power has implemented and/or manages a wide range of opportunities for its customers to participate
in energy efficiency and demand response programs. On March 15, 2011, Idaho Power filed an application
with the IPUC requesting that the IPUC issue an order designating Idaho Power's 2010 Idaho energy
efficiency rider expenditures of $42.5 milion as prudently incurred expenses. As of the date of this report, a
determination and order from the IPUC is pending.
On October 22, 2010, Idaho Power filed an application with the IPUC requesting acceptance of the
company's demand-side resources (DSR) business model, which included a request for authorization to (a)
move demand response incentive payments out of the energy efficiency rider and into the Idaho PCA on a
prospective basis beginning on June 1, 2011, and thus subject to a true-up under the PCA mechanism; (b)
establish a regulatory asset for the direct incentive payments associated with Idaho Power's energy efficiency
program for large commercial and industrial customers, beginning January 1, 2011, so that Idaho Power may
capitalize the direct incentive payments associated with the program, include the costs associated with the
program incentive payments in its rate base, and thus earn a rate of return on a portion of its DSR activities;
and (c) change the carrying charge on the existing energy efficiency rider balancing account (from the current
interest rate of 1.0 percent to Idaho Power's authorized rate of return). On April 1 , 2011, the IPUC issued an
order stating that certain issues raised in the application are more properly considered in a general rate case
proceeding. However, the IPUC noted in its order that Idaho Power's energy efficiency rider balance includes
approximately $10 millon in expenditures that have been previously approved by the IPUC for recovery, and
thus authorized recovery of $10 milion of the rider balance in Idaho Power's Idaho PCA rates, beginning
June 1, 2011.
CONDENSED NOTES TO FINANCIAL STATEMENTS (Continued)
Transmission Rate Refunds and Shortall Filing
In its last two Idaho general rate cases, Idaho Power included an estimate of open access transmission tariff
(OATI) revenues from third parties based on a forecasted OATT rate. However, on January 15,2009, the
FERC issued an order that required Idaho Power to reduce its transmission service rates to FERC
jurisdictional customers and refund to transmission customers $13.3 milion of transmission revenues that
Idaho Power had received starting in 2006. This refund resulted in an overstatement of the revenue credits
in the Idaho jurisdictional revenue requirement in Idaho Power's general rate cases. On October 30, 2009,
the IPUC approved Idaho Power's request for authorization to defer the difference between the revenue
credits in the last two general rate cases and the amount of OA TI revenues Idaho Power had received since
March 2008 and expected to receive through May 2010. Based on actual and projected transmission
revenues from March 2008 through May 2010, Idaho Power recorded a $4.7 millon regulatory asset in 2009
for future recovery.
On October 13, 2010, Idaho Power refreshed its filng with the IPUC for its deferral related to unrecovered
transmission revenues. Termination of a transmission arrangement with PacifiCorp and adjustments to other
transmission arrangements allowed Idaho Power to reduce its prior deferral amount to $2.1 millon. On
February 9, 2011, the IPUC issued an order reducing the deferral amount to $2.1 milion, as requested by
Idaho Power, but denied Idaho Power's request to begin amortization on January 1, 2012. Idaho Power's
January 2010 settlement agreement would not permit potential inclusion of the deferral amount in rates until
after January 1, 2012. The IPUC ordered that Idaho Power advise the IPUC when the FERC has issued its
order on rehearing, following which Idaho Power may request a commencement date for the amortization
period.
Recent and Pending Oregon Regulatory Matters
Oregon Power Cost Adjustment Mechanism Filings
Idaho Power's Oregon PCA mechanism has two components: the annual power cost update (APCU) and the
power cost adjustment mechanism (PCAM).
The APCU allows Idaho Power to reestablish its Oregon base net power supply costs annually, separate
from a.general rate case, and to forecast net power supply costs for the upcoming water year. The APCU
has two components: the "October Update," Idaho Power's calculation of estimated normalized net power
supply expenses for the following April through March test period, and the "March Forecast," Idaho Power's
forecast of expected net power supply expenses for the same test period, updated for a number of variables
including the most recent stream flow data and future wholesale electric prices. On March 23, 2011, Idaho
Power filed the March Forecast of the APCU with the Oregon Public Utiity Commission (OPUC). If approved
as filed, the APCU would result in an approximately $0.9 milion annual decrease in amounts collected
through Oregon jurisdiction customer rates.
The PCAM is a true-up filed annually in February. The filing calculates the deviation between actual net
power supply expenses incurred for the preceding calendar year and the net power supply expenses
recovered through the APCU for the same period. Under the PCAM, Idaho Power is subject to a portion of
the business risk or benefit associated with this deviation through application of an asymmetrical dead band
(or range of deviations) within which Idaho Power absorbs cost increases or decreases. For deviations in
actual power supply costs outside of the deadband, the PCAM provides for 90%/10% sharing of costs and
benefits between customers and Idaho Power. However, collection by Idaho Power will occur only to the
extent that it results in Idaho Power's actual return on equity (ROE) for the year being no greater than 100
basis points below Idaho Power's last authorized ROE. A refund to customers wil occur only to the extent
that it results in Idaho Power's actual ROE for that year being no less than 100 basis points above Idaho
Power's last authorized ROE. On February 28, 2011, Idaho Power submitted its 2010 PCAM true-up, stating
that actual net power supply costs were within the deadband, resulting in no request for a deferraL.
ATTACHMENT I(B)
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT
IDAHO POWER COMPANY
The following statement as to each class of the capital stock of applicant is as of March 31,
2011, the date of the balance sheet submitted with this application:
Common Stock
(1) Description - Common Stock, $2.50 par value; 1 vote per share
(2) Amount authorized - 50,000,000 shares ($125,000,000 par value)
(3) Amount outstanding - 39,150,812 shares
(4) Amount held as reacquired securities - None
(5) Amount pledged by applicant - None
(6) Amount owned by afiliated corporations - All
(7) Amount held in any fund - None
Applicant's Common Stock is held by IDACORP, Inc., the holding company of
Idaho Power Company. IDACORP, Inc.'s Common Stock is registered
(Pursuant to Section 12(b) of the Securities Exchange Act of 1934) and is
listed on the New York stock exchange.
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT (Continued)
IDAHO POWER COMPANY
The following statement as to funded debt of applicant is as of March 31, 2011, the date of the
balance sheet submitted with this application.
First Mortgage Bonds
(1 )
Description
FIRST MORTGAGE BONDS:
4.75 % Series due 2012, dated as of Nov 15, 2002, due Nov 15, 2012
4.25 % Series due 2013, dated as of May 13, 2003, due October 1, 2013
6 % Series due 2032, dated as of Nov 15, 2002, due Nov 15, 2032
5.50 % Series due 2033, dated as of May 13, 2003, due April 1, 2033
5.50 % Series due 2034, dated as of March 26, 2004, due March 15, 2034
5.875%Series due 2034, dated as of August 16, 2004, due August 15, 2034
5.30 % Series due 2035, dated as of August 23, 2005, due August 15, 2035
6.30 % Series due 2037, dated as of June 22,2007 due June 15, 2037
6.25 % Series due 2037, dated as of Oct 18, 2007, due October 15, 2037
6.025% Series due 2018, dated as of July 10, 2008, due Jul 15, 2018
6.15 % Series due 2019, dated as of March 30, 2009, due April 1, 2019
4.50 % Series due 2020, dated as of Nov 20,2009, due March 30,2020
3.40 % Series due 2020, dated as of Aug 30,2010, due Nov 1, 2020
4.85 % Series due 2040, dated as of Aug 30, 2010, due Aug 15, 2040
(3)
Amount
Outstanding
100,000,000
70,000,000
100,000,000
70,000,000
50,000,000
55,000,000
60,000,000
140,000,000
100,000,000
120,000,000
100,000,000
130,000,000
100,000,000
100,000,000
1,295,000,000
(2) Amount authorized - Limited within the maximum of $2,000,000,000 (or such other maximum
amount as may be fixed by supplemental indenture) and by propert, earnings, and other
provisions of the Mortgage.
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affiliated corporations - None
(7) Amount of sinking or other funds - None
For a full statement of the terms and provisions relating to the respective Series and amounts
of applicant's outstanding First Mortgage Bonds above referred to, reference is made to the Mortgage
and Deed of Trust dated as of October 1, 1937, and First to Forty-sixth Supplemental Indentures
thereto, by Idaho Power Company to Deutsche Bank Trust Company Americas (formerly known as
Bankers Trust Company) and R. G. Page (Stanley Burg, succssor individual trustee), Trustees,
presently on file with the Commission, under which said bonds were issued.
STATEMENT OF CAPITAL STOCK AND FUNDED DEBT (Continued)
IDAHO POWER COMPANY
Pollution Control Revenue Bonds
(A) Variable Rate Series 2000 due 2027:
(1) Description - Pollution Control Revenue Bonds, Variable Rate Series due
2027, Port of Morrow, Oregon, dated as of May 17, 2000, due February 1,
2027.
(2) Amount authorized - $4,360,000
(3) Amount outstanding - $4,360,000
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affliated corporations - None
(7) Amount in sinking or other funds - None
(B) 5.15% Series due 2024:
(1) Description - Pollution Control Revenue Refunding Bonds, 5.15% Series 2003
due 2024, County of Humboldt, Nevada, dated as of October 22,2003,
reoffered on August 20, 2009, due December 1, 2024 (secured by First
Mortgage Bonds)
(2) Amount authorized - $49,800,000
(3) Amount outstanding - $49,800,000
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affilated corporations - None
(7) Amount in sinking or other funds - None
(C) 5.25% Series due 2026:
(1) Description - Pollution Control Revenue Bonds, 5.25% Series 2006 due 2026,
County of Sweetwater, Wyoming, dated as of October 1, 2006, reoffered on
August 20, 2009, due July 15, 2026
(2) Amount authorized - $116,300,000
(3) Amount outstanding - $116,300,000
(4) Amount held as reacquired securities - None
(5) Amount pledged - None
(6) Amount owned by affilated corporations - None
(7) Amount in sinking or other funds - None
For a full statement of the terms and provisions relating to the outstanding Pollution Control
Revenue Bonds above referred to, reference is made to (A) copies of Trust Indenture by Port of
Morrow, Oregon, to the Bank One Trust Company, N. A., Trustee, and Loan Agreement between Port
of Morrow, Oregon and Idaho Power Company, both dated May 17, 2000, under which the Variable
Rate Series 2000 bonds were issued, (B); Conformed Trust Indenture between Humboldt County,
Nevada and Union Bank N.A., Trustee dated October 1, 2003 as amended and supplemented by a
First Supplemental Trust Indenture, dated August 20, 2009, and Loan Agreement between Idaho
Power Company and Humboldt County, Nevada dated October 1, 2003under which the 5.15% Series
2003 bonds were reoffered, and (C) Conformed Trust Indenture between Sweetwater County,
Wyoming, and Union Bank, NA, Trustee, as amended and supplemented by a First Supplemental
Trust Indenture dated August 20,2009, and Loan Agreements between Idaho Power Company and
Sweetwater County, Wyoming, dated October 1, 2006 under which the 5.25% Series 2006 bonds were
reoffered.
ATTACHMENT I(C)
COMMITMENTS AND CONTINGENCIES:
COMMITMENTS:
Guarantees
Idaho Power has agreed to guarantee a portion of the performance of reclamation activities and obligations
at BCC, of which IERCo owns a one-third interest. This guarantee, which is renewed each December, was
$63 milion at March 31, 2011, representing IERCo's one-third share of the total reclamation obligation of
$189 millon. BCC has a reclamation trust fund set aside specifically for the purpose of paying these
reclamation costs. BCC continually assesses the adequacy of the reclamation trust fund and its estimate of
future reclamation costs. To ensure that the reclamation trust fund maintains adequate reserves, BCC has
the ability to add a per-ton surcharge to coal sales. Starting in 2010, BCC began applying a nominal
surcharge to coal sales in order to maintain adequate reserves in the reclamation trust fund. Becuse of the
existence of the fund and the ability to apply a per-ton surcharge, the estimated fair value of this guarantee is
minimaL.
Idaho Power enters into financial agreements and power purchase and sale agreements that include
indemnification provisions relating to various forms of claims or liabilities that may arise from the transactions
contemplated by these agreements. Generally, a maximum obligation is not explicitly stated in the
indemnification provisions and, therefore, the overall maximum amount of the obligation under such
indemnifications cannot be reasonably estimated. Idaho Power periodically evaluates the likelihood of
incurring costs under such indemnities based on their historical experience and the evaluation of the specific
indemnities. As of March 31, 2011, management believes the likelihood is remote that Idaho Power would be
required to perform under such indemnification provisions or otherwise incur any significant losses with
respect to such indemnification obligations. Idaho Power has not recorded any liabilty on its condensed
balance sheets with respect to these indemnification obligations.
CONTINGENCIES:
Idaho Power have in the past and expect in the future to become involved in various claims, controversies,
disputes, and other contingent matters, including the items described in this Note. Some of these claims,
controversies, disputes, and other contingent matters involve litigation or other contested proceedings. Idaho
Power intends to vigorously protect and defend their interests and pursue their rights. However, no
assurance can be given as to the ultimate outcome of any particular matter because litigation and other
contested proceedings are inherently subject to numerous uncertinties. For matters that affect Idaho
Power's operations, Idaho Power intends to seek, to the extent permissible and appropriate, recovery of
incurred costs through the ratemaking process.
Western Energy Proceedings at the FERC
In this report, the term "western energy situation" is used to refer to the California energy crisis that occurred
during 2000 and 2001, and the energy shortages, high prices, and blackouts in the western United States.
High prices for electricity in California and in western wholesale markets during 2000 and 2001 caused
numerous purchasers of electricity in those markets to initiate proceedings seeking refunds or other forms of
relief and the FERC to initiate its own investigations. Some of these proceedings (referred to in this report as
the western energy proceedings) remain pending before the FERC or on appeal to the United States Court of
Appeals for the Ninth Circuit (Ninth Circuit).
There are more than 200 petitions pending in the Ninth Circuit for review of numerous FERC orders
regarding the western energy situation. Decisions in these appeals may have implications with respect to
other pending cases, including those to which Idaho Power or IE are parties. Idaho Power and IE intend to
vigorously defend their positions in these proceedings but are unable to predict the outcome of these
matters. Except as to the matters described below under "Pacific Northwest Refund," Idaho Power and IE
believe that settlement releases they have obtained that are described below under "California Refund" will
restrict potential claims that might result from the disposition of the pending Ninth Circuit review petitions and
that these matters will not have a material adverse effect on their consolidated financial positions, results of
operations, or cash flows.
California Refund: This proceeding originated with an effort by agencies of the State of California and
investor-owned utilties in California to obtain refunds for a portion of the spot market sales from sellers of
electricity into California markets from October 2, 2000 through June 20, 2001. The FERC has issued
numerous orders establishing price mitigation plans for sales in the California wholesale electricity market,
including the methodology for determining refunds. IE and numerous other parties have petitioned the Ninth
Circuit for review of the FERC's orders on California refunds. As additional FERC orders have been issued,
further petitions for review have been filed before the Ninth Circuit, which from time to time has identified
discrete cases that can proceed to briefing and decision while it stayed action on the other consolidated
cases.
On May 22, 2006, the FERC approved an ofer of settlement between and among IE and Idaho Power, the
California Parties (consisting of Pacific Gas & Electric Company, San Diego Gas & Electric Company,
Southern California Edison Company, the California Public Utilties Commission, the California Electricity
Oversight Board, the California Department of Water Resources (CDWR), and the California Attorney
General) and additional parties that elected to be bound by the settlement. The settlement disposed of
matters encompassed by the California refund proceeding, as well as market manipulation claims and
investigations relating to the western energy situation among and between the parties agreeing to be bound
by it. Although many market participants agreed to be bound by the settlement, other market participants,
representing a small minority of potential refund claims, initially elected not to be bound by the settlement.
From time to time, as the California Parties have reached settlements with those other market participants,
they have elected to opt into the IE-Idaho Power-California Parties' settlement. The settlement provided for
approximately $23.7 millon of IE's and Idaho Power's estimated $36 millon rights to accounts receivable
from the California Independent System Operator (Cal ISO) and the California Power Exchange (CaIPX) to
be assigned to an escrow account for refunds and for an additional $1.5 milion of accounts receivable to be
retained by the CalPX until the conclusion of the litigation. The additional $1.5 millon of accounts receivable
retained by the CalPX is available to fund the claims of non-settling parties if they prevail in the remaining
litigation of the California refund proceeding and the balance in the escrow account is insufficient, after
distribution to setting parties, to satisfy the claims of the litigants. Any additional amounts owed to non-
settling parties would be funded by other amounts owed to IE and Idaho Power by the Cal ISO and CaIPX, or
directly by IE and Idaho Power, and any excess funds remaining in the escrow and the amounts retained by
the CalPX at the end of the case would be returned to IE and Idaho Power. The remaining IE and Idaho
Power receivables were paid to IE and Idaho Power under the settement.
In an August 2006 decision, the Ninth Circuit ruled that all transactions that occurred within the CalPX and
the Cal iSO markets from October 2,2000 to June 21,2001 were proper subjects of the refund proceeding.
In that decision the Ninth Circuit refused to expand the proceedings into the bilateral market, required the
FERC to consider claims that some market participants had violated governing tariff obligations at an earlier
date than the refund effective date, and expanded the scope of the refund proceeding to include transactions
within the CalPX and Cal ISO markets outside the limited 24-hour spot market and energy exchange
transactions. Parts of the decision exposed sellers to increased claims for potential refunds. The Ninth
Circuit issued its mandate on April 15, 2009, thereby officially returning the cases to the FERC for further
action consistent with the court's decision.
On November 19, 2009, the FERC issued an order to implement the Ninth Circuit's remand. The remand
order established a trial-type hearing in which participants wil be permitted to submit information regarding (i)
specified tariff violations committed by any public utility seller from January 1, 2000 to October 2, 2000
resulting in a transaction that set a market clearing price for the trading period when the violation occurred,
and (ii) claims for refunds for multi-day transactions and energy exchange transactions entered into during
the refund period (October 2, 2000 to June 21, 2001). Numerous parties, including IE and Idaho Power, filed
motions to clarif the FERC's order and responses to these motions. In response to a solicitation from the
FERC, on September 22,2010 IE and Idaho Power, along with a number of other parties, submitted
comments to the FERC regarding the scope of the proceedings. Although IE and Idaho Power are unable to
predict when or how the FERC wil rule on these motions and the later comments, the effect of the remand
order for IE and Idaho Power is confined to the minority of market participants that are not bound by the IE-
Idaho Power-California Parties' settlement described above. IE and Idaho Power believe the remanded
proceedings will not have a material adverse effect on their consolidated financial positions, results of
operations, or cash flows.
In 2005, the FERC established a framework for sellers wanting to demonstrate that the generally applicable
FERC refund methodology interfered with the recovery of costs. IE and Idaho Power made such a cost filing,
which was rejected by the FERC. On June 18, 2009, FERC issued an order stating that it was not ruling on
IE's and Idaho Power's request for rehearing of the cost filing rejection because their request had been
withdrawn in connection with the IE-Idaho Power-California Parties' settlement. On May 18, 2010, in
response to further pleadings by IE and Idaho Power, FERC reconsidered its earlier refusal to consider the
request for rehearing but denied rehearing. On June 18, 2009, in a separate order, the FERC ruled that only
net refund recipients were responsible for the costs associated with cost filings. On June 25, 2010, IE and
Idaho Power filed a petition for review of the pertinent FERC orders in the Ninth Circuit. Until the Cal ISO
completes its refund calculations, it is uncertain whether there are any parties who are not bound by the
California refund settlement that might be affected by the cost filing and the review of its rejection. IE and
Idaho Power are unable to predict how or when the Cal ISO's refund calculations will be completed and how
or when the Ninth Circuit might rule, but the direct effect of any such calculations and ruling is confined to
obligations of IE and Idaho Power to the small minority of claims of market participants that are not bound by
the settlement. Accordingly, IE and Idaho Power believe this matter wil not have a material adverse effect
on their consolidated financial positions, results of operations, or cash flows.
Pacific Northwest Refund: On July 25, 2001, the FERC issued an order establishing a proceeding
separate from the California refund proceeding to determine whether there may have been unjust and
unreasonable charges for spot market sales in the Pacific Northwest during the period December 25, 2000
through June 20, 2001, because the spot market in the Pacifc Northwest was affected by the dysfunction in
the California market. In 2003, the FERC terminated the proceeding and declined to order refunds, but in
2007 the Ninth Circuit issued an opinion, in Port of Seattle, Washington v. FERC, remanding to the FERC the
orders that declined to require refunds. The Ninth Circuit's opinion instructed the FERC to consider whether
evidence of market manipulation would have altered the agency's conclusions about refunds and directed the
FERC to include sales originating in the Pacifc Northwest to the CDWR in the scope of proceeding. The
Ninth Circuit officially returned the case to the FERC on April 16, 2009. On September 4, 2009, IE and Idaho
Power joined with a number of other parties in a joint petition for a writ of certiorari to the U.S. Supreme
Court, which was denied on January 11, 2010.
In several separate filings, the California Parties - which no longer include the California Electricity Oversight
Board - and the City of Tacoma, Washington (Tacoma) and the Port of Seattle, Washington (Port of Seattle)
asked the FERC to reorganize and restructure the case in different ways to enable them to pursue claims, as
asserted by the California Parties, that all spot market sales in the Cal ISO and CalPX markets and sales to
CDWR made in the Pacific Northwest, and, as asserted by Tacoma and Port of Seattle, other sales in the
Pacific Northwest, from January 1, 2000 through June 20, 2001, should be subject to refund and repriced,
because market manipulation and tariff violations affected spot market prices. Their requests would expand
the scope of the refund period in the Pacific Northwest proceeding from the December 25, 2000 through June
20, 2001 period previously considered by the FERC. On May 22, 2009, the California Parties filed a motion
with the FERC to sever claims regarding sales originating in the Pacific Northwest to CDWR from the
remainder of the Pacific Northwest proceedings and to consolidate their claims regarding these sales with
ongoing proceedings in cases that IE and Idaho Power have settled, as well as with a new complaint filed on
May 22, 2009 by the California Attorney General against parties with whom the California Parties have not
settled (Brown Complaint). IE and Idaho Power, along with a number of other parties, filed their opposition to
the motion of the California Parties. Many other parties also filed responses to the motion of the California
Parties. Tacoma and the Port of Seattle jointly filed a motion on August 4, 2009 with the FERC in connection
with the California refund proceeding, the Lockyer remand pending before the FERC (involving claims of
failure to file quarterly transaction reports with the FERC, from which IE and Idaho Power previously were
dismissed), the Brown Complaint, and the Pacific Northwest refund remand proceeding. The Tacoma and
the Port of Seattle motion asks the FERC to require refunds from all sellers in the Pacific Norhwest spot
markets for the expanded period (January 1, 2000 through June 20, 2001). IE and Idaho Power joined with a
number of other sellers in the Pacific Northwest markets during 2000 and 2001 in opposing the motion of
Tacoma and the Port of Seattle. On April 19, 2010, the California Parties filed a motion with the FERC
renewing the requests contained in their May 22,2009 motion and on May 3,2010, IE and Idaho Power
joined with a number of other parties opposing the renewal request. On July 21, 2010, the Port of Seattle
and Tacoma once again filed a motion requesting that the FERC either summarily dispose of the case or set
it for hearing, and the California Parties, answering a pleading in the Brown Complaint, renewed their request
for consolidation. On March 25, 2011 the California Parties filed another motion requesting that the FERC
take action on the Ninth Circuit remand of the Pacific Northwest Refund case, the Ninth Circuit remand
described above under California Refund, the Brown Complaint, and the Lockyer remand, and repeating their
earlier requests for summary FERC action or reorganization of the cases. On April 11, 2011, IE and Idaho
Power joined with a number of other parties opposing the request for summary action and reorganization of
the cases. As of the date of this report, the FERC has not acted on the Ninth Circuit remand or the motions.
IE and Idaho Power intend to vigorously defend their positions in these proceedings but are unable to predict
the outcome of these matters or estimate the impact these matters may have on their consolidated financial
positions, results of operations, or cash flows.
Sierra Club Lawsuit and EPA Notice of Violation - Boardman
In September 2008, the Sierra Club and four other non-profit corporations filed a complaint against Portland
General Electric Company (PGE) in the U.S. District Court for the District of Oregon alleging opacity permit
limit and Clean Air Act (CAA) violations at the Boardman coal-fired plant located in Morrow County, Oregon.
The complaint sought, in addition to injunctive remedies, civil penalties of up to $32,500 per day per violation,
and reimbursement of plaintiffs' costs of litigation, including reasonable attorneys' fees. Trial for the matter is
scheduled for December 2011. Idaho Power is not a party to this proceeding but has a 10 percent ownership
interest in the Boardman plant. PGE owns 65 percent of the plant and is the operator of the plant.
In September 2010, the U.S. Environmental Protection Agency (EPA) issued a Notice of Violation to PGE,
alleging that PGE had violated the New Source Performance Standards (NSPS) and operating permit
requirements under the CAA, as a result of modifications made to the plant in 1998 and 2004. The Notice of
Violation states the maximum civil penalties the EPA is authorized to impose under the CAA for violations of
the NSPS (which range from $25,000 to $37,500 per day), but does not impose any penalties or specify the
amount of any proposed penalties with respect to the alleged violations.
Idaho Power continues to monitor the status of these matters but is unable to predict their outcome or what
effect these matters may have on its consolidated financial position, results of operations, or cash flows.
Water Rights - Snake River Basin Adjudication
Idaho Power holds water rights, acquired under applicable state law, for its hydroelectric projects. In
addition, Idaho Power holds water rights for domestic, irrigation, commercial, and other necessary purposes
related to project lands and other holdings within the states of Idaho and Oregon. Idaho Power's water rights
for power generation are, to varying degrees, subordinated to future upstream appropriations for irrigation
and other authorized consumptive uses.
Over time increased irrigation development and other consumptive uses within the Snake River watershed
led to a reduction in flows of the Snake River. In the late 1970's and early 1980's these reduced flows
resulted in a conflict between the exercise of Idaho Power's water rights at certin hydroelectric projects on
the Snake River and upstream consumptive diversions. The Swan Falls Agreement, signed by Idaho Power
and the State of Idaho on October 25, 1984, resolved the conflict and provided a level of protection for Idaho
Power's hydropower water rights at specified projects on the Snake River through the establishment of
minimum stream flows and an administrative process governing future development of water rights that may
affect those minimum stream flows. In 1987, Congress enacted legislation directing the FERC to issue an
order approving the Swan Falls settlement together with a finding that the agreement was neither
inconsistent with the terms and conditions of Idaho Power's project licenses nor the Federal Power Act. The
FERC entered an order implementing the legislation on March 25,1988.
The Swan Falls Agreement provided that the resolution and recognition of Idaho Power's water rights
together with the State Water Plan provided a sound comprehensive plan for management of the Snake
River watershed. The Swan Falls Agreement also recognized, however, that in order to effectively manage
the waters of the Snake River basin, a general adjudication to determine the nature, extent, and priority of the
rights of all water uses in the basin was necessary. Consistent with that recognition, in 1987 the State of
Idaho initiated the Snake River Basin Adjudication (SRBA), and pursuant to the commencement order issued
by the SRBA court that same year, all claimants to water rights within the basin were required to file water
right claims in the SRBA. Idaho Power has filed claims to its water rights and has been actively participating
in the SRBA since its commencement. Questions concerning the effect of the Swan Falls Agreement on
Idaho Power's water right claims, including the nature and extent of the subordination of Idaho Power's rights
to upstream uses, resulted in the filing of litigation in the SRBA in 2007 between Idaho Power and the State
of Idaho. This litigation was resolved by the Framework Reaffrming the Swan Falls Settlement (Framework)
signed by Idaho Power and the State of Idaho on March 25, 2009. In that Framework, the parties
acknowledged that the effective management of Idaho's water resources remains critical to the public interest
of the State of Idaho by sustaining economic growth, maintaining reasonable electric rates, protecting and
preserving existing water rights, and protecting water quality and environmental values. The Framework
further provided that the State of Idaho and Idaho Power would cooperate in exploring approaches to resolve
issues of mutual concern relating to the management of Idaho's water resources. Idaho Power continues to
work with the State of Idaho and other interested parties on these issues.
One such issue involves the management of the Eastern Snake Plain Aquifer (ESPA), a large underground
aquifer in southeastern Idaho that is hydrologically connected to the Snake River. House Concurrent
Resolution No. 28, adopted by the Idaho Legislature in 2007, directed the Idaho Water Resource Board to
pursue the development of a comprehensive management plan for the ESPA, to include measures that
would enhance aquifer levels, springs, and river flows on the eastern Snake River plain to the benefit of both
agricultural development and hydropower generation. In May of 2007, the Idaho Water Resource Board
appointed an advisory committee, charged with the responsibilty of developing a management plan for the
ESPA. Idaho Power was a member of that committee. In January 2009, the Idaho Water Resource Board,
based on the committee's recommendations, adopted a Comprehensive Aquifer Management Plan (CAMP)
for the ESPA. The Idaho Legislature approved the CAMP that same year. Idaho Power is a member of the
CAMP Implementation Committee, and is currently working with the Idaho Water Resource Board, other
stakeholders, and the Idaho Legislature in implementing the provisions of the CAMP management plan.
Idaho Power also continues its active participation in the SRBA in seeking to ensure that its water rights are
protected and that the operation of its hydroelectric projects is not adversely impacted. While Idaho Power
cannot predict the outcome, Idaho Power does not currently anticipate any materially adverse modification of
its water rights as a result of the SRBA process.
U.s. Bureau of Reclamation Proceedings
Idaho Power filed a complaint on October 15, 2007, and an amended complaint on September 30, 2008, in
the U.S. District Court of Federal Claims in Washington, D.C. against the U.S. Bureau of Reclamation
(USBR). The complaint relates to a 1923 spaceholder contract right for storage and delivery of water to
Idaho Power from American Falls Reservoir, a USBR storage reservoir on the Snake River. In the complaint,
Idaho Power alleged that the USBR breached the contract by the failure to implement certain contract
provisions relating to secondary storage capacity and claimed damages for the lost generation resulting from
reduced flows downstream of the reservoir, and requested a prospective declaration of the rights and
obligations of the parties under the 1923 contract. The USBR claimed that the referenced provisions of the
1923 contract were abrogated or amended by subsequent contracts associated with the 1976 rebuild of
American Falls Reservoir and that the provisions of the 1923 contract no longer apply. The water rights for,
and the operation of, American Falls Reservoir are also the subject of litigation in the SRBA, described
above. During the pendency of the proceedings, Idaho Power worked with the USBR and Idaho interests
(including the State of Idaho and upstream water users) in an effort to resolve the contested contract issues
that are common to both the SRBA and the pending federal case with the USBR. These efforts were focused
on a recognition in state policy and the Idaho State Water Plan that wil promote more efficient operation of
the upper Snake River reservoir system to optimize the use of Snake River flows for hydroelectric generation
downstream while recognizing and protecting in-reservoir spaceholder contract rights. These discussions
resulted in a resolution passed by the Idaho Water Resource Board in March 2011 that established a
standing committee, referred to as the Upper Snake River Advisory Committee (USRAC). The USRAC is
comprised of a member of the Idaho Water Resource Board, representatives of Idaho Power, the USBR, and
the Committee of Nine, a committee comprised of upstream water users that hold USBR contract rights to
reservoir space that advises the State of Idaho and the USBR on reservoir operations. The USRAC is tasked
with collaboratively working to identif and implement measures to optimize the operation and management
of the reservoir system above Milner Dam to benefit existing and future beneficial uses, including hydropower
below Milner Dam. This collaborative process wil include a review of existing water bank and rental pool
procedures to encourage and faciltate opportunities for the rental, acquisition and transfer of reservoir
storage water and water rights for beneficial uses, including hydropower. The passage of the resolution and
establishment of the USRAC has effectively resolved the critical issues outstanding in the pending litigation
pertining to the 1923 contract. While Idaho Power is unable to predict the ultimate impact of the
collaborative procss, it does not currently expect the outcome of the procss wil have a material adverse
effect on its financial position, results of operations, or cash flows.
Other Legal Proceedings
IDACORP and Idaho Power are parties to legal claims, actions, and proceedings in addition to those
discussed above. Resolution of any of these matters wil take time and the companies cannot predict the
outcome of any of these proceedings. However, the companies currently believe that resolution of these
matters wil not have a material adverse effect on their consolidated financial positions, results of operations,
or cash flows.
ATTACHMENT I(D)
IDAHO POWER COMPANY
Statement of Retained Earnings
and
Undistributed Subsidiary Earnings
For the Twelve Months Ended March 31 J 2011
Retained Earnings
Retained earnings (at the beginning of period) ...............................488,641,185
Balance transferred from income.......... ...........................................144,508,232
Dividends received from subsidiary..................................................
Total........................................................................633,149,417
Dividends:
Common Stock .... ........... ............. ........... ......................... ........58,646,278
Total........................................................................58,646,278
Retained earnings (at end of period)................................................ $574,503,139
Undistributed Subsidiary Earnings
Balance (at beginning of period).......................................................62,898,011
Equity in earnings for the period.......................................................7,752,442
Dividends paid (Debit). ....... ......... .....................................................
Balance (at end of period)................................................................ $70,650,453
C:\Documents and Settings\pah2878\Local Settings\Ternporary Internet Files\Content.Outlook\DS58JHIB\
Retained Earnings.xlsx
Ret earn
613012011
11:32 AM
ATTACHMENT I(E)
IDAHO POWER COMPANY
STATEMENT OF INCOME
For the Twelve Months Ended March 31, 2011
Operating Revenues........ .................. ......... ............. ........ ...................................
Operating Expenses:
Purchased power....................................................................................
FueL......................................................................................................
Power cost adjustment..... ................ ..... . . . . . . . . . . . ................. ....................
Other operation and maintenance expense......... ...................................
Depreciation expense......... ................. ......................... ...........................
Amortization of limited-term electric plant.............................................
Taxes other than income taxes...............................................................
Income taxes - Federal.... ............... .... .............. ......... ............. .................
Income taxes - Other.................. ............ .................................................
Provision for deferred income taxes.......... .............................. ................
Provision for deferred income taxes - Credit..........................................
Investment tax credit adjustment...........................................................
Total operating expenses......... ....... .................... .......... ..... ................
Operating Income........ ................. ............... .............. ......... .............. ..... ... .......
Other Income and Deductions:
Allowance for equity funds used during construction. ..... .................. ......
Income taxes..... .... ................................. ......... ................ ....... ..... ............
Other- Net...............................................................................................
Net other income and deductions... ....... .............. ...................................
Income Before Interest Charges.. ........................................................ ...........
Interest Charges:
Interest on first mortgage bonds. ............................ ........... .......... ...........
Interest on other long-term debt. ..... ......... .... ..... ....................................
Interest on short-term debt.. ......... .............. .......... ...... .............................
Amortization of debt premium, discount and expense - Net........... ... ...
Other interest expense... ........ .................. ... ............... .......... ...................
Total interest charges............................................................
Allowance for borrowed funds used during construction - Credit...........
Net interest charges... ...... ............... ... ..... ..............................
Net Income......................................................................................................
Actual
1,031,379,609
141,877 ,544
152,387,782
34,208,516
344,490,463
109,967,689
6,833,878
25,576,852
(12,138,520)
1,645,569
127,935,844
(101,255,378)
(1,854,405)
829,675,834
201,703,775
18,221,558
2,723,330
4,280,831
25,225,719
226,929,494
73,153,667
8,742,315
430,414
2,468,974
1,570,576
86,365,946
11,697,126
74,668,820
152,260,674
The accompanying Notes to Financial Statements are an integral part of this sttement
C:\Documents and Settings\pah2878\Local Settings\Temporary Internet Files\Content.Outlook\DS58JHIB\lncome Statement.xlsx
Income statement for presentati
6/30/2011
11:36AM
ATTACHMENT II
(Board resolutions authorizing Applicant's short-term borrowings as descrbed in this application
will be filed in ths case by July 15,2011)
ATTACHMENT III
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR AN ORDER )
AUTHORIING UP TO $450,000,000 )
AGGREGATE PRINCIPAL AMOUNT AT )
ANY ONE TIME OUTSTANDING OF )
SHORT-TERM BORROWINGS )
)
CASE NO. IPC-E-II-12
PROPOSED ORDER
On , 2011 Idaho Power Company ("Idaho Power" or "Company"), a
public utilty headquarered in Boise, Idaho, providing retail electrc serice in souther Idaho and
eastern Oregon, fied with this Commission its Application pursuat to Chapter 9, Title 61 ofthe
Idaho Code and Rules 141 through 150 of the Commission's Rules of Procedure, requesting an
Order authorizing Idaho Power to make up to $450,000,000 aggegate principal amount of short-ter
borrowings at anyone time outstanding. The Commission hereby adopts its Findings of Fact,
Conclusions of Law and Order approving the Application.
FINDINGS OF FACT
I
Idaho Power was incorporated on May 6, 1915 and migrated its state of incorporation
to the state ofIdaho on June 30, 1989 and is duly qualified to do business in the state ofIdaho. Idaho
Power's principal offce is located in Boise, Idaho.
II
Idaho Power requests authorization to make short-term borrowings of up to
$450,000,000 aggregate principal amount at anyone time outstanding for a period from October 1,
2011 though October 1,2018. Idaho Power states that its short-term borrowings wil consist of(l)
t00061544.DOC; n
PROPOSED ORDER - 1
loans issued by financial and other institutions and evidenced by unsecured notes or other evidence
of indebtedness of the Company and (2) unsecured promissory notes and commercial paper of the
Company to be issued for public or private placement though one or more commercial paper dealer
or agents, or directly by the Company.
II
Idaho Power intends to secure commitments for new unsecured lines of credit, or
extensions of existing unsecured lines of credit, for its short-ter borrowings. The unsecured lines
of credit may be obtained with several financial or other institutions, directly by the Company or
through an agent, when and if required by the Company's then current financial requirements. Each
individual line of credit commitment wil provide that up to a specific amount at anyone time
outstanding wil be available to the Company to draw upon for a fee to be determined by a
percentage ofthe credit line available, credit line utilization, compensating balance or combination
thereof.
Idaho Power may also make arangements for uncommitted credit facilities under
which unsecured lines of credit would be offered to the Company on an "as available" basis and at
negotiated interest rates. Such committed and uncommitted borrowings wil be evidenced by the
Company's unsecured promissory notes or other evidence of indebtedness.
Unsecured promissory notes wil be issued and sold by Idaho Power through one or
more commercial paper dealers or agents, or directly by the Company, up to the limits imposed by
applicable statutes, rules or regulations. Each note issued as commercial paper wil be either
discounted at the rate prevailing at the time of issuance for commercial paper of comparable quality
and matuty or wil be interest bearng to be paid at maturity. Each note wil have a fixed matuty
and wil contain no provision for automatic "roll over".
t00061544.DOC; 1 J
PROPOSED ORDER - 2
N
Idaho Power plans to enter into a new credit agreement in October of2011, which
wil provide a committed line of credit for short-ter borrowings from paricipating bans. The
Company expects that the credit agreement wil initially authorize short-term borrowings of up to
$325,000,000 aggegate principal amount at anyone time outstanding, with the option of the
Company to increase the borrowing limit to $450,000,000 during the term of the credit agreement.
Idaho Power fuer expects that the credit agreement wil have an initial term of five years, from
October 2011 to October 2016, with the option ofthe Company to extend the ter for two one-year
extensions, up to October 2018. Idaho Power wil provide wrtten notice to the Commission in the
event that the Company elects to increase the short-ter borrowing limit under the credit agreement
above $325,000,000, or extend the ter of the credit agreement beyond October 2016.
Idaho Power states that its short-ter borrowings wil have maturities of one year or
less. All short-ter borrowings under the Company's application wil matue no later than October
1,2018.
v
Idaho Power's line of credit arangements are expected to include one or more lead
agents, and a number of additional bans as paricipating agents. The Company's proposed new
credit agreement would likely include the following fees for the lead agent(s) and paricipating
agents: (1) an up-front arangement fee payable to the lead agent( s) totaling approximately .15% to
.25% of the principal amount committed, (2) up-front agent paricipation fees payable to all
paricipating agents totaling approximately .25% of the principal amount committed, (3) anual
commitment facility fees payable to all paricipating agents equal to approximately .15% to .25% of
the principal amount committed, and (4) anual administrative fees payable to the lead agent(s) of
t00061544.DOC; q
PROPOSED ORDER - 3
approximately $20,000 to $30,000. The principal amount committed for purposes of calculatig the
agent fees wil be $325,000,000, unless the authorized borrowing amount under the credit agreement
is increased as described above, up to a maximum of $450,000,000. Other expenses relating to the
credit agreement are estimated to include: Idaho Power outside legal fees of approximately $100,000,
agent legal fees of approximately $50,000, and miscellaneous expenses of approximately $25,000.
Idaho Power states that the above referenced Credit Agreement fees are customar in
the market and wil offset the agents' costs, including personnel time, travel and administrative costs
associated with negotiating and administering the credit agreement. With respect to commercial
paper issuances, Idaho Power expects that the commercial paper dealer or agents wil sell such notes
at a profit to them of not to exceed 118 of 1 percent of the principal amount of each note.
VI
Idaho Power states the purose for which the proposed short-ter borrowings wil be
made and promissory notes, commercial paper or other evidence of indebtedness issued, is to obtain
temporar short-term capital for the acquisition of proper; the constrction, completion, extension
or improvement of its facilities; the improvement or maintenance of its serice; the discharge or
lawful refunding of its obligations; and for general corporate puroses.
VII
Idaho Power requests authorization to make the short -ter borrowings as descrbed in
its application during said seven-year perod, so long as the Company maintains at least a BBB- or
higher senior secured debt rating, as indicated by Standard & Poor's Ratings Serces, and a Baa3 or
higher rating as indicated by Moody's Investors' Serice, Inc. Idaho Power requests that if its senor
secured debt rating falls below either such rating ("Downgrade"), its short-ter borrowing authority
(00061544.DOC; 1 J
PROPOSED ORDER - 4
would continue for a period of364 days from the date ofthe Downgrade ("Continued Authorization
Period"), provided that the Company:
(1) Promptly notifies the Commission in wrting of the Downgrade; and
(2) Files a supplemental application with the Commission within seven (7) days
after the Downgrade, requesting a supplemental order ("Supplemental Order") authorizing
Idaho Power to continue to make short-ter borrowings and issue commercial paper as
provided in the Order, notwithstanding the Downgrade. Until Idaho Power receives the
Supplemental Order, any short-term borrowings made or commercial paper issued by the
Company during the Continued Authorization Perod would become due or mature no later
than the final date of the Continued Authorization Perod.
CONCLUSIONS OF LAW
Idaho Power is an electrcal corporation within the definition of Idaho Code § 61-119
and is a public utility within the definition of Idaho Code § 61-129.
The Idaho Public Utilities Commission has jurisdiction over this matter pursuant to
the provisions of Idaho Code § 61-901 et seq., and the Application reasonably conforms to Rules
141 through 150 of the Commission's Rules of Procedures, IDAPA 31.01.01.141-150.
The method of issuance is proper.
The general puroses to which the proceeds wil be put are lawful puroses under the
Public Utility Law of the state ofIdaho and are compatible with the public interest. However, this
general approval of the general purposes to which the proceeds wil be put is neither a finding offact
nor a conclusion of law that any paricular construction program of the Company which may be
benefited by the approval of this Application has been considered or approved by this Order, and this
Order shall not be constred to that effect.
t00061544.DOC; 1 J
PROPOSED ORDER - 5
The issuance of an Order authorizing the proposed financing does not constitute
agency deterination! approval of the type of financing or the related costs for ratemaking purses,
which deterination the Commission expressly reserves until the appropriate proceeding.
All fees have been paid by Idaho Power in accordance with Idaho Code § 61-905.
ORDER
IT is THEREFORE ORDERED that Idaho Power Company is granted authority to
make up to $450,000,000 aggregate principal amount at anyone time outstanding of short-term
borrowings, for the perod of October 1, 2011 through October 1, 2018, under the ters and
conditions and for the puroses set forth in the Company's application and this Order.
IT is FURTHER ORDERED that this authorization wil remain in place from
October 1,2011 to October 1, 2018, provided that the Company maintains at least aBBB- or higher
senior secured debt rating, as indicated by Standard & Poor's Ratings Serices, and a Baa3 or higher
rating as indicated by Moody's Investors' Serice, Inc. If Idaho Power's senior secured debt rating
falls below either such rating ("Downgrade"), the Company's authority to incur short-term
borrowings and issue commercial paper as provided in ths Order wil not terinate, but instead such
authority wil continue for a period of 364 days from the date of the Downgrade ("Continued
Authorization Perod"), provided that Idaho Power:
(1) Promptly notifies the Commission in wrting of the Downgrade; and
(2) Files a supplemental application with the Commission within seven (7) days
after the Downgrade, requesting a supplemental order ("Supplemental Order")
authorizing the Company to continue to make short-ter borrowings and issue
commercial paper as provided in the Order, notwithstanding the Downgrade.
Until the Company receives the Supplementa Order, any short-term borrowings
made or commercial paper issued by Idaho Power during the Continued
Authorization Perod wil become due or mature no later than the final date of
the Continued Authorization Perod.
t00061544.DOC; q
PROPOSED ORDER - 6
Subject to the foregoing orderng paragraph regarding a Downgrade, no additional
authorization is required to car out this transaction and no Supplemental Order wil be issued.
IT is FURTHER ORDERED that Idaho Power file, as soon as available, final
exhibits as set forth in its Application.
IT is FURTHER ORDERED that the foregoing authorization is without prejudice to
the regulatory authority of this Commission with respect to rates, utility capital strcture, serice,
accounts, evaluation, estimates for deterination of cost or any other matter which may come before
this Commission pursuant to its jursdiction and authority as provided by law.
IT is FURTHER ORDERED that nothing in ths Order and no provisions of Title 61,
Chapter 9, Idaho Code, or any act or deed done or perormed in connection therewith shall be
constred to obligate the state of Idaho to payor guarantee in any maner whatsoever any security
authorized, issued, assumed or guaranteed under the provisions of said Title 61, Chapter 9, Idaho
Code.
DONE BY ORDER of the Idaho Public Utilities Commission at Boise, Idaho this
_day of ,2011.
PAUL KJELLANDER, President
MACK A. REDFORD, Commissioner
MARSHA H. SMITH, Commissioner
ATTEST:
Jean D. Jewell
Commission Secretar
(00061544.DOC; 1 J
PROPOSED ORDER - 7