ITEM 1. BUSINESS
SAFE HARBOR STATEMENT This Form 10-K contains "forward-looking statements" intended to qualify for safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements should be read with the cautionary statements and important factors included in this Form 10-K at Part II, Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Information". Forward- looking statements are all statements other than statements of historical fact, including without limitation those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," and similar expressions.
OVERVIEW IDACORP, Inc. (IDACORP or the Company) is a holding company incorporated in 1998 under the laws of the state of Idaho. On October 1, 1998, IDACORP became the parent of Idaho Power Company (IPC). IPC is a regulated electric utility, and also conducts IDACORP's unregulated electricity marketing operations.
IDACORP's other significant operating subsidiaries are: IDACORP Energy - natural gas marketing Ida-West Energy - independent power projects development and management IdaTech - developer of integrated fuel cell systems IDACORP Financial Services (IFS) - affordable housing and other real estate investments Rocky Mountain Communications - commercial and residential Internet service provider IDACOMM - provider of telecommunications services IDACORP Services - energy related products and services Applied Power Company (APC) - supplier of photovoltaic systems (sold January 2001).
Ownership of Ida-West was transferred by IPC to IDACORP upon formation of the holding company in 1998. APC and IFS were transferred by IPC to IDACORP effective January 1, 2000. At December 31, 2000, IDACORP had 2,044 full-time employees.
IDACORP has identified two reportable business segments, the regulated utility operations of IPC, and the energy marketing activities of IPC and IDACORP Energy. We present information about our operating segments in Note 12 to the Consolidated Financial Statements. These segments and our other operations are described below.
UTILITY OPERATIONS IPC was incorporated under the laws of the state of Idaho in 1989 as successor to a Maine corporation organized in 1915. IPC in involved in the generation, purchase, transmission, distribution and sale of electric energy in a 20,000 square mile area in southern Idaho, eastern Idaho and northern Nevada, with an estimated population of 814,000. IPC holds franchises in 72 cities in Idaho and ten cities in Oregon and holds certificates from the respective public utility regulatory authorities to serve all or a portion of 28 counties in Idaho, three counties in Oregon, and one county in Nevada. As of December 31, 2000, IPC supplied electric energy to over 390,000 general business customers and had 1,713 full-time employees.
IPC owns and operates 17 hydroelectric power plants and shares ownership in three coal-fired generating plants. These generating plants and their capacities are listed in Item 2.
ITEM 2. PROPERTIES IPC's system includes 17 hydroelectric generating plants located in southern Idaho and eastern Oregon (detailed below) and an interest in three coal-fired steam electric generating plants. The system also includes approximately 4,656 miles of high voltage transmission lines; 21 step-up transmission substations located at power plants; 17 transmission substations; 7 transmission switching stations; and 205 energized distribution substations (excludes mobile substations and dispatch centers).
IPC holds licenses under the Federal Power Act for 13 hydroelectric projects from the FERC. These and the other generating stations and their capacities are listed below:
Maximum Non- Coincident Nameplate Operating Capacity License Project Capacity kW kW Expiration
Properties Subject to Federal Licenses: Lower Salmon 70,000 60,000 1997 (a) Bliss 80,000 75,000 1998 (a) Upper Salmon 39,000 34,500 1998 (a) Shoshone Falls 12,500 12,500 1999 (a) C J Strike 89,000 82,800 2000 (a) Upper Malad 9,000 8,270 2004 Lower Malad 15,000 13,500 2004 Brownlee-Oxbow-Hells Canyon 1,398,000 1,166,900 2005 Swan Falls 25,547 25,000 2010 American Falls 112,420 92,340 2025 Cascade 14,000 12,420 2031 Milner 59,448 59,448 2038 Twin Falls 54,300 52,737 2041 Other Generating Plants: Other Hydroelectric 10,400 11,300 Jim Bridger (coal- fired) 706,667 709,617 Valmy (coal-fired) 260,650 260,650 Boardman (coal-fired) 55,200 56,050
(a)Renewed on a year-to-year basis; application for relicense is pending.
At December 31, 2000, the composite average ages of the principal parts of IPC's system, based on dollar investment, were: production plant, 20 years; transmission system and substations, 20 years; and distribution lines and substations, 15 years. IPC considers its properties to be well maintained and in good operating condition.
IPC owns in fee all of its principal plants and other important units of real property, except for portions of certain projects licensed under the Federal Power Act and reservoirs and other easements. IPC's property is also subject to the lien of its Mortgage and Deed of Trust and the provisions of its project licenses. In addition, IPC's property is subject to minor defects common to properties of such size and character that do not materially impair the value to, or the use by, IPC of such properties.
As a result of various federal legislative actions and proposals (such as the Electric Consumers Protection Act of 1986, Energy Policy Act of 1992, Clean Water Act Reauthorization and Endangered Species Act Reauthorization), a major issue facing IPC is the relicensing of its hydro facilities. The relicensing of these projects is not automatic under federal law. IPC must demonstrate comprehensive usage of the facilities, that it has been a conscientious steward of the natural resource entrusted to it, and that it is in the public interest for IPC to continue to hold the federal licenses.
IPC is actively pursuing new licenses for 10 of its 17 hydroelectric projects from the FERC. This process could take anywhere from eight to 15 years, depending on environmental issues and political processes.
The most significant relicensing will be the Hells Canyon Complex, which provides over half of IPC's generation capacity. Presently, IPC is developing study plans within the framework of a collaborative team made up of individuals representing state and federal agencies, businesses, environmental, tribal, customer, local government and local landowner interests. IPC expects to file the new license application in July 2003.
Shoshone Falls, Upper Salmon Falls, Lower Salmon Falls and Bliss hydroelectric projects are awaiting an Environmental Impact Statement (EIS) from the federal government, which is necessary prior to license issuance. IPC completed 64 Additional Information Requests (AIRs) from the agencies and non-governmental organizations in early 2000, which combined with recently filed, final recommendations, terms and conditions, will be used by the FERC to produce a draft EIS for these projects in May 2001.
IPC filed its application for a new license for the C J Strike project in November 1998. Similarly, 21 AIRs were issued on this project as well and the FERC has noticed that this project is Ready for Environmental Analysis which gives the agencies and interested parties 60 days to provide their final recommendations, terms and conditions for this project. A draft EIS is expected by August 2001.
The Upper and Lower Malad projects, scheduled for a July 2002 new license application, are nearing completion of field studies and reporting should be complete in early 2001.
Idaho Energy Resources Co. owns a one-third interest in certain coal leases near the Jim Bridger generating plant in Wyoming from which coal is mined and supplied to the plant.
Ida-West holds investments in 12 operating hydroelectric plants with a total generating capacity of 72 MW.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS None
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of all of the executive officers of IDACORP, Inc. are listed below along with their business experience during the past five years. There are no family relationships among these officers, nor any arrangement or understanding between any officer and any other person pursuant to which the officer was elected.
IDACORP, Inc.
Name, Age and Position Business Experience During Past Five (5) Years*
Jan B. Packwood, 57 Appointed May 30, 1999. Mr. President and Chief Packwood was President and Chief Executive Officer Operating Officer from February 2, 1998 to May 30, 1999.
J. LaMont Keen, 48 Appointed May 5, 1999. Mr. Keen was Senior Vice President, Senior Vice President-Administration, Administration and Chief Chief Financial Officer and Treasurer Financial Officer from March 15, 1999 to May 5, 1999, and Vice President, Chief Financial Officer and Treasurer from February 2, 1998 to March 15, 1999.
Richard Riazzi, 46 Appointed March 15, 1999. Mr. Riazzi Senior Vice President, was Vice President - Marketing and Generation and Marketing Sales from January 14, 1999 to March 15, 1999.
Darrel T. Anderson, 42 Appointed May 5, 1999. Vice President-Finance and Treasurer
Robert W. Stahman, 56 Appointed February 2, 1998. Vice President-General Counsel and Secretary
________________ *IDACORP, Inc. executive officers serve in the same capacities at Idaho Power Company. For these officers' business experience during the past five years, please refer to the next table.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of all of the executive officers of Idaho Power Company are listed below along with their business experience during the past five years. There are no family relationships among these officers, nor any arrangement or understanding between any officer and any other person pursuant to which the officer was elected.
Idaho Power Company
Name, Age and Position Business Experience During Past Five (5) Years
Jan B. Packwood, 57 Appointed May 30, 1999. Mr. Packwood President and Chief was President and Chief Operating Executive Officer Officer from September 1, 1997 to May 30, 1999, Executive Vice President from July 11, 1996 to September 1, 1997, and Vice President-Power Supply prior to July 11, 1996.
J. LaMont Keen, 48 Appointed May 5, 1999. Mr. Keen was Senior Vice President - Senior Vice President-Administration, Administration and Chief Chief Financial Officer and Treasurer Financial Officer from March 15, 1999 to May 5, 1999, Vice President, Chief Financial Officer and Treasurer from March 14, 1996 to March 15, 1999 and Vice President and Chief Financial Officer prior to March 14, 1996.
James C. Miller, 46 Appointed November 18, 1999. Mr. Senior Vice President - Miller was Vice President - Delivery Generation from July 10, 1997 to November 18, 1999 and was General Manager - Generation prior to July 10, 1997.
Richard Riazzi, 46 Appointed March 15, 1999. Mr. Riazzi Senior Vice President - was Vice President - Marketing and Generation and Marketing Sales from January 9, 1997 to March 15, 1999. Mr. Riazzi was Vice President, Corporate Marketing (1995- 1996) for Equitable Resources, Inc.
Darrel T. Anderson, 42 Appointed May 5, 1999. Mr. Anderson Vice President - Finance was corporate controller from January and Treasurer 25, 1999 to May 5, 1999, Executive Vice President of Finance and Operations at Applied Power Corp. from June 5, 1998 to January 25, 1999, and corporate controller from February 26, 1996 to June 5, 1998. Mr. Anderson was Senior Manager of Audit Services for Deloitte & Touche LLP prior to February 26, 1996.
John P. Prescott, 44 Appointed November 18, 1999. Mr. Vice President - Prescott was Vice President of Generation Business Development for IDACORP Technologies, Inc. from August 1999 to November 18, 1999, and President and Treasurer of Stellar Dynamics from October 5, 1995 to August 1999.
Bryan A.B. Kearney, 38 Appointed November 18, 1999. Mr. Vice President and Chief Kearney was Vice President and Chief Information Officer Technology Officer at Bear Creek Corp (1998-1999), Chief Information Officer for Shasta County, California (1996-1998), and Director of Information Systems and Services for the City of Fort Worth, Texas (1994- 1995).
Cliff N. Olson, 51 Appointed July 11, 1991. Vice President - Corporate Services
Robert W. Stahman, 56 Appointed July 13, 1989. Vice President - General Counsel and Secretary
Marlene K. Williams, 48 Appointed May 5, 1999. Ms. Williams Vice President - Human was Director of Human Resources at Resources Arizona Public Service prior to May 5, 1999.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
IDACORP, Inc.'s common stock (without par value) is traded on the New York and Pacific Stock Exchanges. At December 31, 2000, there were 21,886 holders of record and the year-end stock price was $49.06 per share.
The outstanding shares of Idaho Power Company common stock ($2.50 par value) are held by IDACORP, Inc. and are not traded. IDACORP, Inc. became the holding company of Idaho Power Company on October 1, 1998.
The following table shows the reported high and low sales price and dividends paid for the years 2000 and 1999 as reported by the Wall Street Journal as composite tape transactions.
2000 Quarters Common Stock, without par value: 1st 2nd 3rd 4th High $53.00 $37.00 $48.69 $51.81 Low 25.94 31.00 32.38 43.38 Dividends paid per share (cents) 46.5 46.5 46.5 46.5
______________________________
1999 Quarters Common Stock, without par value: 1st 2nd 3rd 4th High $36.50 $33.63 $32.00 $31.25 Low 29.25 29.50 29.19 26.00 Dividends paid per share (cents) 46.5 46.5 46.5 46.5
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
SUMMARY OF OPERATIONS (Thousands of Dollars except for per share amounts) IDACORP, Inc. For the Years Ended December 31, 2000 1999 1998 1997 1996
Operating revenues $1,019,353 $ 731,152 $ 795,087 $ 627,724 $ 598,065 Income from operations 261,663 199,050 193,423 191,746 193,768 Net income 139,883 91,349 89,176 87,098 83,155 Earnings per average share outstanding (basic and diluted) 3.72 2.43 2.37 2.32 2.21 Dividends declared per share 1.86 1.86 1.86 1.86 1.86
At December 31, Total long-term debt* 864,114 821,558 815,937 746,142 769,810 Total assets 4,639,258 2,640,371 2,456,819 2,451,816 2,328,738
*Excludes amount due within one year.
The above data should be read in conjunction with IDACORP's consolidated financial statements and notes to consolidated financial statements included in this Annual Report on Form 10-K.
SUMMARY OF OPERATIONS (Thousands of Dollars) IDAHO POWER COMPANY For the Years Ended 2000 1999 1998 1997 1996 December 31,
Operating revenues $ 835,662 $ 658,336 $ 756,410 $ 605,183 $ 578,445 Income from operations 169,636 172,458 180,584 180,731 187,171 Net income 131,559 97,528 95,919 92,274 90,618
At December 31, Total long-term debt* 808,977 821,558 815,937 746,142 769,810 Total assets 4,295,098 2,559,374 2,421,790 2,451,816 2,328,738
Utility Customer Data: General business customers 393,831 384,421 373,730 363,085 352,487 Average kWh per customer 37,068 36,379 36,368 37,080 37,627 Average rate per kWh (cents) 3.87 3.75 3.85 3.63 3.71
*Excludes amount due within one year.
The above data should be read in conjunction with Idaho Power Company's consolidated financial statements and notes to consolidated financial statements included in this Annual Report on Form 10-K.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION In Management's Discussion and Analysis we explain the general financial condition and results of operations of IDACORP, Inc. and its subsidiaries (IDACORP or the Company). IDACORP is a holding company formed in 1998 as the parent of Idaho Power Company (IPC), and several other entities.
IPC is an electric utility with a service territory covering over 20,000 square miles, primarily in southern Idaho, and eastern Oregon. IPC also conducts electricity marketing and trading operations, and is the parent of Idaho Energy Resources Co., a joint venturer in Bridger Coal Company, which supplies coal to IPC's Jim Bridger generating plant.
IDACORP's other significant operating subsidiaries are: IDACORP Energy Services - natural gas marketing Ida-West Energy - independent power projects development and management IdaTech - developer of integrated fuel cell systems IDACORP Financial Services - affordable housing and other real estate investments Rocky Mountain Communications- commercial and residential Internet service provider IDACOMM - provider of telecommunications services IDACORP Services - energy related products and services Applied Power Company - supplier of photovoltaic systems (sold January 2001).
As you read Management's Discussion and Analysis, it may be helpful to refer to our Consolidated Statements of Income which present our results of operations for the years ended December 31, 2000, 1999 and 1998. In our discussion we explain, by operating segment, the significant annual changes between specific line items in the Consolidated Statements of Income.
FORWARD-LOOKING INFORMATION In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), we are hereby filing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of the Company in this Annual Report, any quarterly report on Form 10-Q, in presentations, in response to questions or otherwise. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "anticipates", "believes", "estimates", "expects", "intends", "plans", "predicts", "projects", "will likely result", "will continue", or similar expressions) are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions, and uncertainties and are qualified in their entirety by reference to, and are accompanied by, the following important factors, which are difficult to predict, contain uncertainties, are beyond our control and may cause actual results to differ materially from those contained in forward-looking statements:
prevailing governmental policies and regulatory actions, including those of the Federal Energy Regulatory Commission (FERC), the Idaho Public Utilities Commission (IPUC), the Oregon Public Utilities Commission (OPUC), and the Public Utilities Commission of Nevada (PUCN), with respect to allowed rates of return, industry and rate structure, acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased power and other capital investments, and present or prospective wholesale and retail competition (including but not limited to retail wheeling and transmission costs); the current energy situation in the western United States; economic and geographic factors including political and economic risks; changes in and compliance with environmental and safety laws and policies; weather conditions; population growth rates and demographic patterns; competition for retail and wholesale customers; pricing and transportation of commodities; market demand, including structural market changes; changes in tax rates or policies or in rates of inflation; changes in project costs; unanticipated changes in operating expenses and capital expenditures; capital market conditions; competition for new energy development opportunities; and legal and administrative proceedings (whether civil or criminal) and settlements that influence the business and profitability of the Company.
Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.
RESULTS OF OPERATIONS In this section we discuss our earnings and the factors that affected them, beginning with a general overview and then discussing results for each of our operating segments.
Earnings per share of common stock 2000 1999 1998 Utility operations $ 1.97 $ 2.00 $ 2.13 Energy marketing 1.58 0.34 0.14 Other 0.17 0.09 0.10 Total earnings per share $ 3.72 $ 2.43 $ 2.37
Return on year-end common equity 17.0% 12.1% 12.2%
The primary factor contributing to the increases in earnings per share (EPS) from 1999 to 2000 and from 1998 to 1999 is favorable energy marketing results. Our net income from energy marketing increased $47 million in 2000 and $8 million in 1999 due to a combination of factors, including increased price volatility in the energy markets, and increased trading volumes over a larger geographic area.
The decrease in EPS from utility operations from 1999 to 2000 is predominantly the result of increased net power supply costs, due to a decline in hydroelectric generating conditions and increased market prices for purchased power. These cost increases are partially offset by increased general business revenue resulting from rate increases, customer growth and weather conditions.
EPS from utility operations was less in 1999 compared to 1998 due primarily to increased costs at our coal-fired generations plant and payroll and consulting expenses.
Our EPS from other operations increased in 2000 compared to 1999, predominantly because of the gain recorded on the sale in March 2000 of the Hermiston Power Project. This gain was partially offset by losses related to newly acquired subsidiaries.
UTILITY OPERATIONS
This section discusses IPC's utility operations, which are subject to regulation by, among others, the state public utility commissions of Idaho, Oregon, and Nevada, and by the Federal Energy Regulatory Commission. Before we discuss the changes in income from our utility operations, we'll describe these operations to help you understand them and the relationship between the financial statement line items.
IPC owns and operate 17 hydroelectric power plants and shares ownership in three coal-fired generating plants. The following table presents IPC's system generation for the last three years:
MWhs (in thousands) Percent of total generation 2000 1999 1998 2000 1999 1998
Hydroelectric 8,500 10,652 11,135 52% 59% 62% Thermal 7,701 7,266 6,925 48 41 38 Total system generation 16,201 17,918 18,060 100% 100% 100%
Hydro generation was seven percent below normal conditions in 2000, 17 percent above normal in 1999 and 22 percent above normal in 1998.
Because of its reliance on hydroelectric generation, IPC's generation operations can be significantly affected by the weather. The availability of inexpensive hydroelectric power depends on snowpack in the mountains above IPC's hydro facilities, precipitation and other weather and streamflow management considerations. When hydroelectric generation decreases and customer demand increases, as it has from 1998 to 2000, we must increase our reliance on more expensive thermal generation and purchased power.
The rates we charge to our general business customers are determined by the various regulatory authorities. Approximately 95 percent of our general business revenue and sales come from customers in the state of Idaho. The rates we charge these customers, (except for customers with special contracts) are adjusted annually by a power cost adjustment (PCA) mechanism. The PCA adjusts rates to reflect the changes in costs incurred by IPC to supply power. Throughout the year, we compare our actual power supply costs to the amounts we are recovering in rates. Most, but not all, of this difference is deferred and included in the calculation of rates for future years.
The primary influences on electricity sales are weather and economic conditions. Generally, extreme temperatures increase sales to customers, who use electricity for cooling and heating, and moderate temperatures decrease sales. Precipitation levels during the growing season affect sales to customers who use electricity to operate irrigation pumps. Increased precipitation reduces electricity usage by these customers.
Strong overall economic conditions in our utility service territory have resulted in general business customer growth, with 2.4 percent, 2.9 percent and 2.9 percent increases in average customers served in 2000, 1999, and 1998 respectively.
General Business Revenue The following table presents IPC's general business revenues and volumes for the last three years:
Revenues Volumes (in thousands of dollars) (in thousands of MWh) 2000 1999 1998 2000 1999 1998 Residential $225,336 $213,547 $211,445 4,393 4,200 4,090 Commercial (less than 1000 kW demand) 129,816 120,846 118,375 3,375 3,164 2,997 Industrial (greater than 1000 kW demand) 133,171 117,366 124,237 4,808 4,666 4,788 Irrigation 74,827 62,166 58,639 1,993 1,706 1,466 Public Highway and Street 2,207 2,223 2,160 29 30 28 Total $565,357 $516,148 $514,856 14,598 13,766 13,369
As mentioned above, our general business revenue is dependent on many factors, including the number of customers we serve, the rates we charge, and weather conditions.
2000 vs. 1999 The 9.5 percent increase in general business revenues is due to the following factors: Increased average rates, resulting from the PCA and special- contract customers, increased revenues $17 million. We discuss the PCA in more detail below in "Regulatory Issues - Power Cost Adjustment"; Increased usage per customer, resulting from weather conditions and other factors, increased revenues $26 million. Decreased precipitation during the growing season increased sales to irrigation customers, and hotter summer and colder winter temperatures increased sales to the other customer classes; Our average number of customers increased 2.7 percent over 1999, increasing revenue $6 million.
1999 vs. 1998 In 1999, general business revenue was only marginally higher than 1998. The following factors influenced general business revenue: A 2.9 percent increase in general business customers increased revenue $7 million; Drier weather conditions and other factors affecting usage increased revenue $12 million; Decreased average rates, resulting from the PCA, decreased revenue $17 million.
Off-system sales Off-system sales consist primarily of long-term sales contracts and opportunity sales of surplus system energy.
$ (in thousands) MWh (in thousands) Revenue per MWh 2000 1999 1998 2000 1999 1998 2000 1999 1998 $229,986 $119,785 $214,418 4,529 5,924 7,907 $50.78 $20.22 $27.12
2000 vs. 1999 Off-system sales increased due predominantly to significant increases in prices for surplus system energy, which increased our average revenue per MWh by over 150 percent. A 24 percent decrease in volumes of electricity sold, due to decreased availability, partially offset the increase in market prices.
1999 vs. 1998 Off system sales decreased due principally to two factors, a 25 percent decrease in volumes sold and a 25 percent decrease in price per MWh.
Power Supply The Power supply components of income from operations include off- system sales (described and analyzed above) and purchased power, fuel and PCA expenses (analyzed below).
The impact of the changes in net power supply costs was an increase in net power supply expense of $69 million in 2000 and a decrease of $6 million in 1999. The PCA adjustment is not designed to fully mitigate the effect of fluctuations in net power supply costs, and is applicable only to Idaho customers.
Purchased power
$ (in thousands) MWh (in thousands) Cost per MWh 2000 1999 1998 2000 1999 1998 2000 1999 1998 $398,649 $106,344 $185,271 4,311 3,127 4,707 $92.47 $34.01 $39.36
2000 vs. 1999 Purchased power expenses increased $292 million in 2000 due to major increases in prices in the energy markets, and to increased volumes purchased. The increase in volumes was necessitated by decreased generation at our hydroelectric plants and increased customer demand.
1999 vs. 1998 Purchased power expenses decreased $79 million in 1999. Contributing to these results are a number of operational factors, including changing hydro availability, system load and fluctuating wholesale market conditions.
Fuel expense
$ (in thousands) Thermal MWh generated (in thousands) 2000 1999 1998 2000 1999 1998 $94,215 $86,617 $86,237 7,701 7,266 6,925
2000 vs. 1999 Fuel expenses increased by $8 million in 2000, due primarily to increased generation at our coal-fired plants, necessitated by decreased generation at our hydroelectric plants and increased customer demand.
1999 vs. 1998 Fuel expenses were essentially unchanged. Increases in generation were offset by decreased average coal prices.
Power Cost Adjustment The PCA component of expenses is related to the Company's PCA regulatory mechanism. The PCA mechanism increases expenses when power supply costs are below forecast, and decreases expenses when power supply costs are above forecast. We discuss the PCA in more detail in "Regulatory Issues - Power Cost Adjustment."
2000 vs. 1999 The PCA expense was a credit of $121 million in 2000, due predominantly to the considerable increases in purchased power costs not anticipated in our 2000-2001 rate year forecast. In 1999, actual power supply costs were near forecast, causing the PCA component of expense to be minimal.
1999 vs. 1998 The PCA decreased $22 million in 1999, due to 1999's power supply costs being near forecast, while 1998 costs were below forecast.
Other Expenses 2000 vs. 1999 Other operations and maintenance expenses in 2000 were substantially unchanged from 1999. Decreased pension expenses were offset by increased distribution line maintenance and general expenses. Depreciation expenses increased $2 million, primarily due to plant additions.
1999 vs. 1998 Other operations and maintenance expenses increased $6 million in 1999. The increase was principally due to increased operating expenses at our coal-fired generation plants, and payroll and consulting expenses. Depreciation expenses increased $3 million, due primarily to plant additions.
ENERGY MARKETING
To compete as an energy provider of choice, we have built a trading operation that participates in the electricity, natural gas and other related markets from our offices in Boise, Idaho and Houston, Texas. Our energy marketing and trading strategy has produced increasingly positive results over the last four years. Our natural gas marketing capability continues to expand as the electricity and natural gas markets move toward convergence, and our electricity marketing efforts have resulted in volume and income increases each year since inception of the strategy.
When buying and selling energy, the high volatility of energy prices can have significant negative impact on profitability if not appropriately managed. Also, counterparty creditworthiness is key to ensuring that transactions entered into withstand dramatic market fluctuations. To manage the risks inherent in the energy commodity industry while implementing our business strategy, our Risk Management Committee, comprised of Company officers, oversees the risk management program as defined in our risk management policy. The program is intended to manage the impact to earnings caused by the volatility of energy prices by mitigating commodity price risk, credit risk, and other risks related to the energy commodity business. We discuss some of these risks later in "Market Risk."
In August 2000 the IPUC approved our application to move our nonutility electricity marketing activity to another IDACORP subsidiary, IDACORP Energy. We expect to have FERC approval by early April 2001. These non-operating transactions do not involve sales from IPC's resources and are not related to system reliability.
Operating Revenues 2000 vs. 1999 Energy marketing revenues increased $114 million in 2000 due primarily to increased prices in the energy markets and increased marketing activity. The market conditions in 2000 were something of an anomaly and as such, we do not anticipate that revenues will continue to grow at the rate seen in 2000. We anticipate our marketing revenues to grow in relation to the base 1999 revenues.
1999 vs. 1998 Energy marketing revenues increased $21 million in 1999 due primarily to increased energy marketing activities.
Operating Expenses 2000 vs. 1999 Energy marketing expenses increased $41 million in 2000 due primarily to increased administrative expenses related to the increased marketing activities. This includes increased credit reserves to reflect, in part, the increased risk associated with transactions with the California Power Exchange and Independent System Operator. We have approximately $48 million of receivables from these entities and have set up reserves in accordance with our credit policies reflective of the increased credit risk in these markets.
The Risk Management Policy defines market risk limits within which trading must be contained. Also, included is an extensive credit policy within which each counterparty is evaluated for financial strength and assigned a credit limit. Credit exposure with each counterparty is measured daily as well as the credit exposure of the entire portfolio. Our strategy is to diversify credit risk across counterparties and to set up appropriate credit reserves to protect against the potential credit losses in the portfolio.
1999 vs. 1998 Energy marketing expenses increased $7 million in 1999 due primarily to increased energy marketing activities.
OTHER OPERATIONS
Other operations include the results of operations of our diversified subsidiaries, including Ida-West Energy Company; IdaTech, LLC; Applied Power Company (APC); IDACORP Financial Services; IDACORP Services Co.; IDACOMM, Inc.; and Rocky Mountain Communications, Inc. (RMCI).
Revenues 2000 vs. 1999 Other diversified operating revenues decreased $5 million in 2000 due primarily to a reduction in sales made by APC.
1999 vs. 1998 Other diversified revenues increased $14 million in 1999 due primarily to revenues of businesses acquired by APC in 1998 and 1999.
Expenses 2000 vs. 1999 Other diversified operating expenses increased $4 million in 2000 due primarily to the operations of RMCI, acquired in August 2000, and increased activities at IdaTech, our fuel-cell technology development subsidiary, offset by a reduction in expenses at APC.
1999 vs. 1998 Other diversified operating expenses increased $13 million in 1999 due primarily to expense of businesses acquired by APC in 1998 and 1999.
Other Income 2000 vs. 1999 Other income increased $11 million in 2000 due primarily to the sale of our interest in the Hermiston Power Project, a 536-MW, gas- fired cogeneration project to be located near Hermiston, Oregon. Ida-West Energy Company, a wholly owned subsidiary of IDACORP, was responsible for managing all permitting and development activities relating to the project since its inception in 1993. We recorded a pre-tax gain of $14 million on this transaction.
LIQUIDITY AND CAPITAL RESOURCES Cash Flow Our net cash generated from operations totaled $534 million for the three-year period 1998-2000. After deducting common dividends of $210 million, net cash generation from operations provided approximately $324 million for our construction program and other capital requirements. Internal cash generation after dividends provided 42 percent of our total capital requirements in 2000, 114 percent in 1999, and 95 percent in 1998. Operating cash flows declined in 2000, predominantly due to the growth in our PCA regulatory asset balance, reflecting increased power supply expenditures that we have not yet recovered through PCA rate adjustments.
We forecast that internal cash generation after dividends will provide approximately 101 percent of total capital requirements in 2001 and 109 percent during the four-year period 2002-2005. We expect to continue financing our utility construction program and other capital requirements with both internally generated funds and, to the extent necessary, externally financed capital.
Principal amounts of long-term debt maturing in the next five years are as follows (in millions of dollars):
2001 2002 2003 2004 2005 Utility $30.1 $27.1 $80.1 $50.1 $60.1 Other 9.7 9.5 9.2 9.3 8.3
At January 1, 2001, IPC had regulatory authority to incur up to $200 million of short-term indebtedness. At December 31, 2000, IPC's short-term borrowing totaled $60 million compared to $20 million at December 31, 1999, and $39 million at December 31, 1998.
We have credit facilities established at both IPC and IDACORP. IPC has a $120 million multi-year revolving credit facility under which we pay a facility fee on the commitment, quarterly in arrears, based on IPC's First Mortgage Bond Rating. Commercial paper may be issued subject to the regulatory maximum, and is supported by bank lines of credit of an equal amount.
IDACORP has separately established a $50 million three-year credit facility that expires in December 2001, and a $100 million 364-day credit facility that expired in February 2001. We have established a new 364-day credit facility for up to $375 million to help support our unregulated operations. Under these facilities we pay a facility fee on the commitment, quarterly in arrears, based on IPC's First Mortgage Bond Rating. Commercial paper may be issued up to the amounts supported by the bank credit facilities. (See Note 7 of "Notes to Consolidated Financial Statements"). At December 31, 2000, IDACORP's short-term borrowing totaled $61 million.
Construction Program Our consolidated cash construction expenditures totaled $140 million in 2000, $111 million in 1999, and $89 million in 1998. Approximately 29 percent of these expenditures were for generation facilities, 21 percent for transmission facilities, 36 percent for distribution facilities, and 14 percent for general plant and equipment.
We estimate that our cash construction and acquisition programs will require the following amounts over the next five years. These estimates are subject to revision in light of changing economic, regulatory, environmental, and conservation factors.
2001 2002-2005 (In millions of $) Utility $124.7 $503.8 Energy marketing 7.2 7.4 Other 46.0 204.4 Total $177.9 $715.6
Financing Program Our consolidated capital structure fluctuated slightly during the three-year period, with common equity ending at 46 percent, preferred stock (of IPC) 6 percent, and long-term debt 48 percent at December 31, 2000.
IDACORP, Inc. currently has a $300 million shelf registration statement that can be used for the issuance of unsecured debt securities and preferred or common stock. At December 31, 2000, none had been issued.
In March 2000 IPC filed a $200 million shelf registration statement that can be used for both first mortgage bonds (including medium-term notes), preferred stock and unsecured debt. In December 2000, $80 million of Secured Medium Term Notes were issued by IPC. Proceeds from this issuance were used in January 2001 for the early redemption of $75 million of First Mortgage Bonds originally due in 2021. At December 31, 2000, $120 million of the total remained to be issued.
In April 2000, at our request, the American Falls Reservoir District issued its American Falls Refunding Replacement Dam Bonds, Series 2000. Proceeds from issuance of these bonds, in the aggregate amount of $19.9 million, were used to refund the same amount of bonds dated May 1, 1990. IPC has guaranteed repayment of these bonds.
In May 2000 $4.4 million of tax-exempt Pollution Control Revenue Refunding Bonds were issued by Port of Morrow, Oregon. Proceeds were used to refund in August 2000 the same amount of Pollution control Revenue Bonds, Series 1978.
In November 1999 IPC issued $80 million of Secured Medium Term Notes. The proceeds from this issuance were used in January 2000 to redeem at maturity $80 million of First Mortgage Bonds.
In September 1998 IPC issued $60 million of Secured Medium Term Notes. The proceeds from this issuance were used to redeem at maturity $30 million of First Mortgage Bonds, and to reduce the balance of commercial paper issued in connection with ongoing business.
CURRENT ISSUES In this section we address a number of other issues that affect or could affect our operations.
Western Electricity Markets and California Energy Situation Our utility operations are being affected by the electricity market conditions in the western United States. The tremendous increase in prices for purchased power, along with increasing demand and reduced hydroelectric generation, have combined to produce substantial increases in our costs to supply power.
The current mountain snowpack above Brownlee Reservoir, our main storage pool for our Hells Canyon hydro facilities, was at 55 percent of normal in February 2001. This indicates that our hydroelectric generation could be appreciably diminished in 2001.
In May 2001, we will implement the annual PCA adjustment in Idaho to recover up to 90% of our costs to supply power in the Idaho jurisdiction. The cost recovery mechanism is based on the forecast for the May 2001-May 2002 period and a true-up for the preceding year. Because the resulting rate increases are expected to be large, we are exploring an alternative method of cost recovery with the Idaho Public Utilities Commission and the legislature. This method, if approved and implemented, would enable us to recover the costs up front but spread the impact on our customers out over a longer period of time.
We are also proposing a number of programs to decrease our reliance on expensive wholesale power. The programs are designed to reduce overall energy usage, decrease peak-demand levels and increase generation within our service territory.
With regard to our non-utility energy trading in the state of California, IPC in January 1999 entered into a Participation Agreement with the California Power Exchange (CalPX), a California non-profit public benefit corporation. The CalPX operates a wholesale electricity market in California by acting as a clearinghouse through which electricity is bought and sold. Pursuant to the Participation Agreement, IPC could sell power to the CalPX under the terms and conditions of the CalPX Tariff.
On January 18, 2001, the CalPX sent us an invoice for $2.2 million - - a "default share invoice" - as a result of an alleged Southern California Edison (SCE) payment default of $214.5 million for power purchases. We made this payment. On January 24, 2001, we terminated our Participation Agreement with the CalPX. On February 8, 2001, the CalPX sent a further default share invoice for $5.2 million, due February 20, 2001, as a result of alleged payment defaults by SCE and Pacific Gas and Electric Company (PG&E), and others. However, the CalPX owes us $11.3 million for power sold to the CalPX in November and December 2000. We did not pay the February 8 invoice.
The CalPX allocated the defaults of, among others, SCE and PG&E to the remaining participants based upon the level of trading activity of each participant during the preceding three-month period. IPC believes that the default invoices were not proper and that it owes no further amounts to the CalPX. IPC intends to pursue all available remedies in its efforts to collect amounts owed to it by the CalPX.
In addition to the amounts due us from the CalPX, IPC is currently owed approximately $36.5 million from the Cal ISO for sales in November and December 2000.
On February 20, we filed a petition with FERC to intervene in a proceeding which requests the FERC to suspend the use of the CalPX charge back methodology and provides for further FERC oversight in the CalPX's implementation of its default mitigation procedures.
Also a preliminary injunction has been granted by a Federal Judge in the Federal District Court for the Central District of California enjoining the CalPX from declaring any CalPX participant in default under the terms of the CalPX Tariff. On March 9,2001, the CalPX filed for Chapter 11 protection with the U.S. Bankruptcy Court, Central District of California.
We are unable to predict the outcome of these situations.
In California, the Company believes that it has credit exposure in the range of $30-40 million. The Company continues to manage this exposure in accordance with established credit policies.
Regulatory Issues Power Cost Adjustment (PCA) IPC has a PCA mechanism that provides for annual adjustments to the rates we charge to our Idaho retail customers. These adjustments, which take effect annually in mid-May, are based on forecasts of net power supply costs, and the true-up of the prior year's forecast. The difference between the actual costs incurred and the forecasted costs is deferred, with interest, and trued-up in the next annual rate adjustment.
Our May 2000 rate adjustment increased Idaho general business customer rates by 9.5 percent, and resulted from forecasted below- average hydroelectric generating conditions. Overall, IPC's annual general business revenues are expected to increase $38 million during the 2000-2001 rate period.
So far in the 2000-2001 rate period actual power supply costs have been significantly greater than the forecast, due to actual hydrolectric conditions being below the forecast, and purchased power prices being significantly above the forecast. To account for these higher-than- forecasted costs, IPC has recorded a regulatory asset of $120 million as of December 31, 2000 ($161 million as of January 31, 2001). In February, 2001 IPC filed an application with the IPUC proposing to implement a one-year emergency fuel charge due to these extraordinarily high expenses. The IPUC suspended the proposed effective date of March 26, 2001 to May 1, 2001, to allow for public workshops and hearings to be held on the matter. The IPUC also ordered IPC to make its annual PCA filing as soon as possible so that the cases can be filed jointly. IPC will be making its filing at the end of March 2001. Due to the overall weakness in the general credit markets across the United States, and concerns regarding the liquidity of the western energy markets, any negative indication by regulators regarding the recovery of wholesale purchased power costs would affect our ability to successfully access the credit markets.
The May 1999 rate adjustment reduced rates by 9.2 percent. The decrease was the result of both forecasted above-average hydroelectric generating conditions and a true-up from the 1998-99 rate period. Overall, the May 1999 rate adjustment decreased annual general business revenues by $40 million during the 1999- 2000 rate period.
Regulatory Settlement IPC had a settlement agreement with the IPUC that expired at the end of 1999. Under the terms of the settlement, when earnings in our Idaho jurisdiction exceeded an 11.75 percent return on year- end common equity, we set aside 50 percent of the excess for the benefit of our Idaho retail customers.
In March 2000 we submitted our 1999 annual earnings sharing compliance filing to the IPUC. This filing indicated that there was almost $9.6 million in 1999 earnings and $2.7 million in unused 1998 reserve balances available for the benefit of our Idaho customers.
In April 2000 the IPUC ordered that $6.9 million of the revenue sharing balance be refunded to Idaho customers through rate reductions effective May 16, 2000 thus reducing the effect of the PCA on revenues and customer rates. The IPUC also approved IPC's continuing participation in the Northwest Energy Efficiency Alliance (NEEA) through 2004, ordering IPC to set aside the remaining $5.4 million of revenue sharing dollars to fund that participation.
Demand-Side Management (Conservation) Expenses IPC requested that the IPUC allow for the recovery of post-1993 DSM expenses and acceleration of the recovery of DSM expenditures authorized in the last general rate case. The IPUC set a new amortization period of 12 years instead of the 24-year period previously established. The order reflects an increase in annual Idaho retail revenue requirements of $3.1 million for 12 years. On April 17, 2000, the Idaho Supreme Court affirmed the IPUC order, after hearing an appeal by a group of industrial customers.
Electric Industry Restructuring Competition is increasing in the electric utility industry. Our goal is to anticipate and fully integrate into our operations any legislative, regulatory or competitive changes.
In 1997, the Idaho Legislature appointed a committee to study restructuring of the electric utility industry. Although the committee will continue studying a variety of restructuring ideas, it has not recommended any restructuring legislation and is not expected to in the foreseeable future.
In 1999, the Oregon legislature passed legislation restructuring the electric utility industry, but exempted IPC's service territory.
Integrated Resource Plan (IRP) Every two years, IPC is required to file with the IPUC and OPUC an IRP, a comprehensive look at IPC's present and future demands for electricity and plan for meeting that demand. The 2000 IRP identifies a potential electricity shortfall within our utility service territory by mid-2004. The plan projects a 250-MW resource need in 2004 to satisfy energy demand during IPC's peak periods. Prior to 2004, the IRP calls for IPC to increase purchases from the Northwest energy markets to meet short-term energy needs. IPC anticipates that after 2004, transmission constraints will not allow it to continue to cover increasing demand by increasing purchases.
IPC issued a request for proposals (RFP), seeking bids for 250 MW of additional generation to support the growing demand in IPC's utility service territory. A proposal by Garnet Energy LLC, a subsidiary of Ida-West Energy, was selected by IPC. In January 2001 IPC signed an agreement with Garnet to define the conditions under which the utility will purchase energy produced at the 250- MW project. Garnet has proposed building the natural gas-fired turbine facility in Canyon County, Idaho, located in the southwest part of the state.
Upon completion of negotiations, targeted for May 1, 2001, the contract will be submitted to the IPUC and OPUC for approval and determination of how purchase power costs will be recovered through customers' rates.
Regional Transmission Organizations In December 1999 the Federal Energy Regulatory Commission, in its landmark Order 2000, said that all companies with transmission assets must file to form regional transmission organizations (RTOs) or explain why they cannot. Order 2000 is a follow up to orders 888 and 889 issued in 1996, which required transmission owners to provide non-discriminatory transmission service to third parties. By encouraging the formation of RTOs, FERC seeks to further facilitate the formation of liquid wholesale electricity markets.
In response to FERC Order 2000, IPC and other regional transmission owners filed in October 2000 a plan to form RTO West, an independent entity that will operate the transmission grid in eight western states. RTO West will have its own independent governing board. The participating transmission owners will retain ownership of the lines, but will not have a role in operating the grid.
The FERC filing represents a major portion of the filing necessary to form RTO West. However, substantial additional filings will be necessary to include the tariff and integration agreements associated with the new entity and filings for state approvals. We expect the FERC filings to be completed by the summer of 2001 and state filings to be initiated in late 2001 or early 2002.
Relicensing of Hydroelectric Projects We are actively pursuing the relicensing of our hydroelectric projects, a process that will continue for the next 10 to 15 years. We submitted our first applications for license renewal to the FERC in December 1995. We have now filed applications seeking renewal of our licenses for our Bliss, Upper Salmon Falls, Lower Salmon Falls, CJ Strike and Shoshone Falls Hydroelectric Projects. Although various federal requirements and issues must be resolved through the license renewal process, we anticipate that our efforts will be successful. At this point, however, we cannot predict what type of environmental or operational requirements we may face, nor can we estimate the eventual cost of license renewal. At December 31, 2000, $27 million of relicensing costs were included in Construction Work in Progress.
Market Risk
The following discussion summarizes the financial instruments, derivative instruments and derivative commodity instruments sensitive to changes in interest rates and commodity prices that we held at December 31, 2000. We buy and sell financial and physical natural gas and electricity commodity contracts as part of our ongoing business. These contracts are subject to electricity and natural gas commodity price risk. We have a trading and risk management policy defining the limits within which we contain our commodity price risk. We trade commodity futures, forwards, options and swaps as a method of managing the commodity price risk and optimizing the profitability of our electricity and natural gas trading. We have minimal foreign exchange exposure related to natural gas trading activities in Canadian dollars. This exposure is periodically offset through the use of foreign exchange swap instruments. Our sensitivity related to foreign exchange rate fluctuations as of December 31, 2000 is immaterial.
Interest Rate Risk Sensitivity This table presents descriptions of our financial instruments at December 31, 2000, that are sensitive to changes in interest rates. We did not hold any interest rate derivative instruments at December 31, 2000. The majority of our debt is held in fixed rate securities with embedded call options. We hold $72 million in variable-rate tax-exempt debt and 11.8 percent of our total debt is variable in the form of commercial paper. By nature, the value of our variable rate debt is not sensitive to changes in interest rates, and the value of our commercial paper borrowings does not give rise to significant interest rate risk because these borrowings generally have maturities of less than three months.
The table below presents principal cash flows by maturity date and the related average interest rate. The table also presents the fair value for all fixed rate instruments as of December 31, 2000, based on market rates for similar instruments as of that date.
Expected Average Maturity Date Amount due interest rate (in millions) 2001 $ 40 6.9% 2002 37 6.8% 2003 89 6.5% 2004 59 7.9% 2005 69 6.0% Thereafter 539 7.8% Total $ 833 7.4%
Fair Value $ 861
Commodity Price Risk Sensitivity This analysis presents the estimated December 2000, value-at-risk related to our energy commodity contracts and related derivative instruments that are sensitive to changes in commodity prices. We use commodity derivative instruments such as futures, forwards, options and swaps to manage our exposure to commodity price risk in the electricity and natural gas markets. The objective of our risk management program is to mitigate the risk associated with the purchase and sale of natural gas and electricity. Company policy also allows the use of these commodity derivative instruments for trading purposes in support of our operations. High energy prices and volatility of prices exposes our company to risk of earnings and cash flow fluctuations. The value-at-risk measure is a tool used by our Risk Management Committee to understand the earnings and cashflow risks on a daily basis as the markets change.
The aggregate potential daily loss in earnings from our energy trading activity is estimated to be $3.9 million at a 95 percent confidence interval and for a holding period of one business day. The potential loss in earnings was estimated using an analytic value-at-risk methodology. This methodology computes value-at-risk based upon market prices for futures and historical volatilities as of December 31, 2000. The value-at-risk is understood to be a forecast and is not guaranteed to occur. The chosen confidence level and holding period are industry standards. The confidence level and holding period imply that there is a five percent chance that the daily loss will exceed $3.9 million. The value at risk calculation is principally affected by market prices and volatility of prices. The extreme increases of volatility and prices in the energy markets in December 2000 are the primary cause of the increase in our value at risk. The Risk Management Committee actively manages the risk to keep our trading activities within trading limits.
Diversified Business Activities
Telecommunication Services In August 2000, we formed IDACOMM, Inc. to provide telecommunications services using fiber optic technology. Also, in August 2000, we acquired a controlling interest in Rocky Mountain Communications, Inc. (RMCI), a Boise, Idaho-based Internet service provider. Since the acquisition, IDACORP and RMCI launched a new service-Velocitus Broadband. Velocitus offers a wide variety of broadband solutions for businesses and will be introduced in 69 markets throughout the western United States. RMCI currently serves more than 25,000 subscribers of traditional and high-speed Internet access services in both the residential and business markets.
As part of the acquisition of RMCI, IDACORP's board of directors approved the repurchase of up to 350,000 shares of outstanding common stock. These shares will be distributed to RMCI shareholders, representing partial payment for the acquisition. The amount and timing of the repurchase depend on market conditions. As of December 31, 2000, we had repurchased 156,300 shares for this purpose, at a cost of $6.6 million, and distributed 154,500 shares to RMCI shareholders. Additional shares were repurchased in January 2001 and are expected to be distributed in early 2001.
IDACORP Financial IDACORP Financial, a wholly owned subsidiary of IDACORP, is expanding its investment portfolio to include projects that provide historical tax credits. IDACORP Financial recently closed on a historical tax credit project in San Diego, California, the El Cortez project, which began to contribute to earnings in the third quarter of 2000.
IdaTech In June 2000, IdaTech (formerly Northwest Power Systems), a majority-owned subsidiary of IDACORP, delivered the first of 110 fuel cell systems to Bonneville Power Administration (BPA). Since then, five additional units have been delivered. After three months of field testing, IdaTech also received notice from the BPA to proceed with the design and production of the first block of 50 "beta" fuel cell systems for testing in 2001.
IdaTech also received Notice of Allowance from the U.S. Patent Office of all claims in an additional patent on its fuel processor. This patent covers the process that will help reduce the cost of the materials used in the hydrogen purification module. IdaTech demonstrated a natural gas fuel cell system this summer and continues to work on key alliances to meet the goal of commercializing fuel cell systems for home applications by 2003, and small-scale consumer and commercial applications by late 2002.
Applied Power Company (APC) In January 2001, we sold APC to Schott Corp. APC is a manufacturer, supplier and distributor of solar photovoltaic systems. IDACORP originally acquired APC in 1996.
Environmental and Legal Issues
Salmon Recovery Plan We are continuing to monitor regional efforts to develop a comprehensive and scientifically credible plan to ensure the long- term survival of anadromous fish runs on the Columbia and Lower Snake rivers.
In mid-August 1994, the federal government changed its designation of the Fall Chinook Salmon from Threatened to Endangered. This designation has not had any major effects on our operations.
In September 1991, we voluntarily modified operations at our three- dam Hells Canyon Complex (HCC) to protect the Fall Chinook downstream during spawning and juvenile emergence. From its start, this Fall Chinook Program has provided the Fall Chinook the high level of protection due an endangered species.
In December 2000, the National Marine Fisheries Service (NMFS) issued a Final Biological Opinion (BiOp) for operations of the Federal Columbia River Power System. The BiOp did not call for changes in the Company's operations for salmon at the HCC.
The NMFS has also developed a draft specifically for operations of the HCC. The draft BiOp seeks to change existing operations of the HCC. The NMFS, FERC, and IPC are currently involved in discussions of the draft BiOp. IPC believes that no changes to the HCC operations or facilities are justified, and will vigorously defend this position. However, the Company is unable to predict what impact, if any, a final NMFS BiOp may have on operations of the HCC.
The Bureau of Reclamation (BOR) has been seeking, unsuccessfully, for the last 5 years to acquire additional water in the upper Snake for fish flow augmentation. While it is likely the BOR will continue to seek additional water, it is unlikely, absent a settlement with all Idaho state interests that they will succeed in their efforts. In connection with water moved in the past, the Company has been compensated for its losses pursuant to an agreement with the BPA. If the BOR was successful in its efforts, the Company would expect compensation.
Threatened and Endangered Snails In December 1992, the U.S. Fish and Wildlife Service (USFWS) listed five species of Snake River snails as Threatened and Endangered Species. Since that time, we have included this possibility in all of our discussions regarding relicensing and new hydro development.
The listing specifically mentions the impact that fluctuating water levels related to hydroelectric operations may have on the snails and their habitat. Although the hydro facilities on that reach of the Snake River do not significantly affect water levels during typical operations, some of them do provide the daily operational flexibility to meet increased electricity demand during high load hours. Recent studies suggest that this has no impact on the listed snails. While it is possible that the listing could affect how we operate our existing hydroelectric facilities on the middle reach of the Snake River, we believe that such changes will be minor and will not present any undue hardship.
In 1995, as a part of our federal hydro relicensing process, we obtained a permit from the USFWS to study the five species of endangered Snake River snails. Our biologists have completed several studies to gain scientific insight into how or if these snails are affected by a variety of factors, including hydropower production, water quality, and irrigation run-off. Results of the studies indicated that the snail colonies were part of a biological community well adapted to the influences of hydropower, water quality, and irrigation run-off. Company-sponsored studies continue to review how these and other factors affect the status of the various colonies and their habitats.
Clean Air Act We have analyzed the Clean Air Act's effects on us and our customers. Our coal-fired plants in Oregon and Nevada already meet the federal emission rate standards for sulfur dioxide (SO2) and our coal-fired plant in Wyoming meets that state's even more stringent SO2 regulations. Therefore, we foresee no adverse effects on our operations with regard to SO2 emissions.
New Accounting Pronouncements In June 1998 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities." In June 2000, the FASB issued SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Activities", which amended certain provisions of SFAS 133. The Derivative Implementation Group, a task force created by the FASB, is continuing to identify and resolve implementation questions related to SFAS 133 and SFAS 138.
SFAS 133, as amended by SFAS 138, was effective as of January 1, 2001. As of January 1, 2001 contracts company-wide have been evaluated based upon the SFAS 133 derivative definition and requirements. Most of the Company's identified derivatives consist of energy trading contracts that are currently reported at fair value under the provisions of Emerging Issues Task Force 98- 10. The remaining derivatives are IPC electricity purchase and sales contracts that are subject to regulatory processes. As a result, the adoption of SFAS 133, as amended, did not have a material effect on the Company's financial position, results of operations, or cash flows.
Item 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is included in Item 7
Item 7 - Financial Statements and November 21, 2000 IPC Exhibits (c) Exhibits.
*Previously Filed and Incorporated Herein by Reference
Exhibit File Number As Exhibit *2 333-48031 2 Agreement and Plan of Exchange between IDACORP, Inc., and IPC dated as of February 2, 1998.
*3(a) 33-00440 4(a)(xiii) Restated Articles of Incorporation of IPC as filed with the Secretary of State of Idaho on June 30, 1989.
*3(a)(i) 33-65720 4(a)(ii) Statement of Resolution Establishing Terms of Flexible Auction Series A, Serial Preferred Stock, Without Par Value (cumulative stated value of $100,000 per share) of IPC, as filed with the Secretary of State of Idaho on November 5, 1991.
*3(a)(ii) 33-65720 4(a)(iii) Statement of Resolution Establishing Terms of 7.07% Serial Preferred Stock, Without Par Value (cumulative stated value of $100 per share) of IPC, as filed with the Secretary of State of Idaho on June 30, 1993.
*3(a)(iii) 1-3198 3(a)(iii) Articles of Amendment to Restated Form 10-Q Articles of Incorporation of IPC as for 6/30/00 filed with the Secretary of State of Idaho on June 15, 2000.
*3(b) 33-41166 4(b) Waiver resolution to Restated Articles of Incorporation of IPC adopted by Shareholders on May 1, 1991.
*3(c) 1-3198 3(c) By-laws of IPC amended on September Form 10-Q 9, 1999, and presently in effect. for 9/30/99
*3(d) 33-56071 3(d) Articles of Share Exchange, as filed with the Secretary of State of Idaho on September 29, 1998.
*3(e) 333-64737 3.1 Articles of Incorporation of IDACORP, Inc.
*3(f) 333-64737 3.2 Articles of Amendment to Articles of Incorporation of IDACORP, Inc. as filed with the Secretary of State of Idaho on March 9, 1998.
*3(g) 333-00139 3(b) Articles of Amendment to Articles of Incorporation of IDACORP, Inc. creating A Series Preferred Stock, without par value, as filed with the Secretary of State of Idaho on September 17, 1998.
*3(h) 1-14465 3(c) Amended Bylaws of IDACORP, Inc. as Form 10-Q of July 8, 1999. for 6/30/99
*4(a)(i) 2-3413 B-2 Mortgage and Deed of Trust, dated as of October 1, 1937, between IPC and Bankers Trust Company and R. G. Page, as Trustees.
*4(a)(ii) IPC Supplemental Indentures to Mortgage and Deed of Trust: Number Dated 1-MD B-2-a First July 1, 1939 2-5395 7-a-3 Second November 15, 1943 2-7237 7-a-4 Third February 1, 1947 2-7502 7-a-5 Fourth May 1, 1948 2-8398 7-a-6 Fifth November 1, 1949 2-8973 7-a-7 Sixth October 1, 1951 2-12941 2-C-8 Seventh January 1, 1957 2-13688 4-J Eighth July 15, 1957 2-13689 4-K Ninth November 15, 1957 2-14245 4-L Tenth April 1, 1958 2-14366 2-L Eleventh October 15, 1958 2-14935 4-N Twelfth May 15, 1959 2-18976 4-O Thirteenth November 15, 1960 2-18977 4-Q Fourteenth November 1, 1961 2-22988 4-B-16 Fifteenth September 15, 1964 2-24578 4-B-17 Sixteenth April 1, 1966 2-25479 4-B-18 Seventeenth October 1, 1966 2-45260 2(c) Eighteenth September 1, 1972 2-49854 2(c) Nineteenth January 15, 1974 2-51722 2(c)(i) Twentieth August 1, 1974 2-51722 2(c)(ii) Twenty-first October 15, 1974 2-57374 2(c) Twenty-second November 15, 1976 2-62035 2(c) Twenty-third August 15, 1978 33-34222 4(d)(iii) Twenty-fourth September 1, 1979 33-34222 4(d)(iv) Twenty-fifth November 1, 1981 33-34222 4(d)(v) Twenty-sixth May 1, 1982 33-34222 4(d)(vi) Twenty-seventh May 1, 1986 33-00440 4(c)(iv) Twenty-eighth June 30, 1989 33-34222 4(d)(vii) Twenty-ninth January 1, 1990 33-65720 4(d)(iii) Thirtieth January 1, 1991 33-65720 4(d)(iv) Thirty-first August 15, 1991 33-65720 4(d)(v) Thirty-second March 15, 1992 33-65720 4(d)(vi) Thirty-third April 1, 1993
1-3198 4 Thirty-fourth December 1, 1993 Form 8-K Dated 12/17/93
1-3198 Thirty-fifth November 1, 2000 Form 8-K Dated 11/21/00
*4(b) 1-3198 4(b) Instruments relating to IPC American Form 10-Q Falls bond guarantee (see Exhibit for 6/30/00 10(c)).
*4(c) 33-65720 4(f) Agreement of IPC to furnish certain debt instruments.
*4(d) 33-00440 2(a)(iii) Agreement and Plan of Merger dated March 10, 1989, between Idaho Power Company, a Maine Corporation, and Idaho Power Migrating Corporation.
*4(e) 1-14465 4 Rights Agreement, dated as of Form 8-K September 10, 1998, between IDACORP, dated Inc. and the Bank of New York as September Rights Agent. 15, 1998
*10(a) 2-49584 5(b) Agreements, dated September 22, 1969, between IPC and Pacific Power & Light Company relating to the operation, construction and ownership of the Jim Bridger Project.
*10(a)(i) 2-51762 5(c) Amendment, dated February 1, 1974, relating to operation agreement filed as Exhibit 10(a).
*10(b) 2-49584 5(c) Agreement, dated as of October 11, 1973, between IPC and Pacific Power & Light Company.
*10(c) 1-3198 10(c) Guaranty Agreement, dated April 11, Form 10-Q 2000, between IPC and Bank One Trust for 6/30/00 Company, N.A., as Trustee, relating to $19,885,000 American Falls Replacement Dam Refinancing Bonds of the American Falls Reservoir District, Idaho.
*10(d) 2-62034 5(r) Guaranty Agreement, dated as of August 30, 1974, between IPC and Pacific Power & Light Company.
*10(e) 2-56513 5(i) Letter Agreement, dated January 23, 1976, between IPC and Portland General Electric Company.
*10(e)(i) 2-62034 5(s) Agreement for Construction, Ownership and Operation of the Number One Boardman Station on Carty Reservoir, dated as of October 15, 1976, between Portland General Electric Company and IPC.
*10(e)(ii) 2-62034 5(t) Amendment, dated September 30, 1977, relating to agreement filed as Exhibit 10(e).
*10(e)(iii) 2-62034 5(u) Amendment, dated October 31, 1977, relating to agreement filed as Exhibit 10(e).
*10(e)(iv) 2-62034 5(v) Amendment, dated January 23, 1978, relating to agreement filed as Exhibit 10(e).
*10(e)(v) 2-62034 5(w) Amendment, dated February 15, 1978, relating to agreement filed as Exhibit 10(e).
*10(e)(vi) 2-68574 5(x) Amendment, dated September 1, 1979, relating to agreement filed as Exhibit 10(e).
*10(f) 2-68574 5(z) Participation Agreement, dated September 1, 1979, relating to the sale and leaseback of coal handling facilities at the Number One Boardman Station on Carty Reservoir.
*10(g) 2-64910 5(y) Agreements for the Operation, Construction and Ownership of the North Valmy Power Plant Project, dated December 12, 1978, between Sierra Pacific Power Company and IPC.
*10(h)(i)1 1-3198 10(n)(i) The Revised Security Plan for Senior Form 10-K Management Employees- a non-qualified, deferred compensation plan effective August 1, 1996.
*10(h)(ii)1 1-3198 10(n)(ii) The Executive Annual Incentive Plan Form 10-K for senior management employees of for 1994 IPC effective January 1, 1995.
*10(h)(iii)1 1-3198 10(n)(iii) The 1994 Restricted Stock Plan for Form 10-K officers and key executives of for 1994 IDACORP, Inc. and IPC effective July 1, 1994.
*10(h)(iv)1 1-14465 10(h)(iv) The Revised Security Plan for Board 1-3198 of Directors - a non-qualified, Form 10-K deferred compensation plan effective for 1998 August 1, 1996, revised March 2, 1999.
*10(h)(v)1 1-14465 10(e) IDACORP, Inc. Non-Employee Directors Form 10-Q Stock Compensation Plan as of May for 6/30/99 17, 1999.
*10(h)(vi) 1-3198 10(y) Executive Employment Agreement dated Form 10-K November 20, 1996 between IPC and for 1997 Richard R. Riazzi.
*10(h)(vii) 1-3198 10(g) Executive Employment Agreement dated Form 10-Q April 12, 1999 between IPC and for 6/30/99 Marlene Williams.
*10(h)(viii) 1-14465 10(h) Agreement between IDACORP, Inc. and Form 10-Q Jan B. Packwood, J. LaMont Keen, for 9/30/99 James C. Miller, Richard Riazzi, Darrel T. Anderson, Bryan Kearney, Cliff N. Olson, Robert W. Stahman and Marlene K. Williams.
*10(h)(ix)1 1-14465 10(h)(ix) IDACORP, Inc. 2000 Long-Term Form 10-K Incentive and Compensation Plan. for 1999
*10(i) 33-65720 10(h) Framework Agreement, dated October 1, 1984, between the State of Idaho and IPC relating to IPC's Swan Falls and Snake River water rights.
*10(i)(i) 33-65720 10(h)(i) Agreement, dated October 25, 1984, between the State of Idaho and IPC relating to the agreement filed as Exhibit 10(i).
*10(i)(ii) 33-65720 10(h)(ii) Contract to Implement, dated October 25, 1984, between the State of Idaho and IPC relating to the agreement filed as Exhibit 10(i).
*10(j) 33-65720 10(m) Agreement Regarding the Ownership, Construction, Operation and Maintenance of the Milner Hydroelectric Project (FERC No. 2899), dated January 22, 1990, between IPC and the Twin Falls Canal Company and the Northside Canal Company Limited.
*10(j)(i) 33-65720 10(m)(i) Guaranty Agreement, dated February 10, 1992, between IPC and New York Life Insurance Company, as Note Purchaser, relating to $11,700,000 Guaranteed Notes due 2017 of Milner Dam Inc.
12 Statement Re: Computation of Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(a) Statement Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(b) Statement Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(c) Statement Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(d) Statement Re: Computation of Ratio of Earnings to Fixed Charges. (IPC)
12(e) Statement Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IPC)
12(f) Statement Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
12(g) Statement Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
21 Subsidiaries of IDACORP, Inc. and IPC.
23 Independent Auditors' Consent.
________________________ 1 Compensatory plan
IDACORP, Inc. SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2000, 1999 and 1998
Column A Column B Column C Column D Column E Additions Balance Charged At Charged (Credited) Balance Beginning to to Other At End Classification Of Period Income Accounts Deduction(1) Of Period (Thousands of Dollars) 5319: 2000: Reserves Deducted From Applicable Assets: Reserve for uncollectible accounts and assets $1,397 $21,682 $ 1,658(2) $ 1,658 $23,079 Other Reserves: Rate refunds $8,893 $ 3,505 $ - $12,398 $ - Injuries and damages reserve $1,500 $ - $ - $ - $ 1,500 Miscellaneous operating reserves $8,473 $ 306 $ - $ 4,123 $ 4,656 5332: 1999: Reserves Deducted From Applicable Assets: Reserve for uncollectible accounts $1,397 $ - $ 3,162(2) $ 3,162 $ 1,397 Other Reserves: Rate refunds $5,356 $10,543 $ - $ 7,006 $ 8,893 Injuries and damages reserve $1,500 $ - $ - $ - $ 1,500 Miscellaneous operating reserves $6,907 $ 3,242 $ - $ 1,676 $ 8,473
1998: Reserves Deducted From Applicable Assets: Reserve for uncollectible accounts $1,397 $ - $ 3,299(2) $ 3,299 $ 1,397 Other Reserves: Rate refunds $8,740 $ 4,188 $ - $ 7,572 $ 5,356 Injuries and damages reserve $1,500 $ - $ - $ - $ 1,500 Miscellaneous operating reserves $8,388 $ 512 $ - $ 1,993 $ 6,907 5359:
Notes: (1) Represents deductions from the reserves for purposes for which the reserves were created. (2) Represents collections of accounts previously written off.
IDAHO POWER COMPANY SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2000, 1999 and 1998
Amounts for Idaho Power Company are same as the above Schedule II for IDACORP, Inc.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IDACORP, Inc. (Registrant)
March 16, 2001 By: /s/Jan B. Packwood Jan B. Packwood President and Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:/s/ Jon H. Miller Chairman of the Board March 16, Jon H. Miller
By:/s/ Jan B. Packwood President and Chief " Executive Officer Jan B. Packwood and Director
By:/s/ J. LaMont Keen Senior Vice President - " Administration J. LaMont Keen and Chief Financial Officer (Principal Financial Officer)
By:/s/ Darrel T. Anderson Vice President - Finance " and Treasurer Darrel T. Anderson (Principal Accounting Officer)
By:/s/ Rotchford L. Barker By:/s/ Jack K. Lemley "
Rotchford L. Barker Jack K. Lemley Director Director
By:/s/ Robert D. Bolinder By:/s/ Evelyn Loveless "
Robert D. Bolinder Evelyn Loveless Director Director
By:/s/ John B. Carley By:/s/ Peter S. O'Neill "
John B. Carley Peter S. O'Neill Director Director
By:/s/ Peter T. Johnson By:/s/ Robert A. Tinstman "
Peter T. Johnson Robert A. Tinstman Director Director
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IDAHO POWER COMPANY (Registrant)
March 16, 2001 By:/s/Jan B. Packwood Jan B. Packwood President and Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:/s/ Jon H. Miller Chairman of the Board March 16, Jon H. Miller
By:/s/ Jan B. Packwood President and Chief " Executive Jan B. Packwood Officer and Director
By:/s/ J. LaMont Keen Senior Vice President - " Administration J. LaMont Keen and Chief Financial Officer (Principal Financial Officer)
By:/s/ Darrel T. Anderson Vice President - Finance " and Treasurer Darrel T. Anderson (Principal Accounting Officer)
By:/s/ Rotchford L. Barker By:/s/ Jack K. Lemley "
Rotchford L. Barker Jack K. Lemley Director Director
By:/s/ Robert D. Bolinder By:/s/ Evelyn Loveless "
Robert D. Bolinder Evelyn Loveless Director Director
By:/s/ John B. Carley By:/s/ Peter S. O'Neill "
John B. Carley Peter S. O'Neill Director Director
By:/s/ Peter T. Johnson By:/s/ Robert A. Tinstman "
Peter T. Johnson Robert A. Tinstman Director Director
EXHIBIT INDEX
Exhibit Page Number Number 10(h)(ix) IDACORP, Inc. 2000 Long-Term Incentive and Compensation Plan.
12 Statements Re: Computation of Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(a) Statements Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(b) Statements Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(c) Statements Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(d) Statements Re: Computation of Ratio of Earnings to Fixed Charges. (IPC)
12(e) Statements Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IPC)
12(f) Statements Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
12(g) Statements Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
21 Subsidiaries of IDACORP, Inc. and IPC
23 Independent Auditors' Consent.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
PAGE
Management's Responsibility for Financial Statements 38
Consolidated Financial Statements: IDACORP, Inc. Consolidated Statements of Income for the Years Ended December 31,2000, 1999 and 1998 39 Consolidated Balance Sheets as of December 31, 2000, 1999 and 1998 40-41 Consolidated Statements of Capitalization as of December 31, 2000, 1999 and 1998 42 Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998 43 Consolidated Statements of Retained Earnings and Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2000, 1999 and 1998 44 Notes to Consolidated Financial Statements 45-60 Independent Auditors' Report 61
Idaho Power Company Consolidated Statements of Income for the Years Ended December 31, 2000, 1999 and 1998 63 Consolidated Balance Sheets as of December 31, 2000, 1999 and 1998 64-65 Consolidated Statements of Capitalization as of December 31, 2000, 1999 and 1998 66 Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998 67 Consolidated Statements of Retained Earnings and Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2000, 1999 and 1998 68 Notes to Consolidated Financial Statements 69-72 Independent Auditors' Report 73
Supplemental Financial Information and Financial Statement Schedules Supplemental Financial Information (Unaudited) 74
Financial Statement Schedules for the Years Ended December 31, 2000, 1999 and 1998: Schedule II-Consolidated Valuation and Qualifying Accounts- IDACORP, Inc. 80 Schedule II-Consolidated Valuation and Qualifying Accounts-Idaho Power Company. 80
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS The management of IDACORP, Inc. and Idaho Power Company is responsible for the preparation and presentation of the information and representations contained in the accompanying financial statements. The financial statements have been prepared in conformance with generally accepted accounting principles. Where estimates are required to be made in preparing the financial statements, management has applied its best judgment as to the adequacy of the estimates based upon all available information.
The Companies maintain systems of internal accounting controls and related policies and procedures. The systems are designed to provide reasonable assurance that all assets are protected against loss or unauthorized use. Also, the systems provide that transactions are executed in accordance with management's authorization and properly recorded to permit preparation of reliable financial statements. The systems are supported by a staff of corporate accountants and internal auditors who, among other duties, evaluate and monitor the systems of internal accounting control in coordination with the independent auditors. The staff of internal auditors conducts special and operational audits in support of these accounting controls throughout the year.
Each Company's Board of Directors, through their Audit Committees comprised entirely of outside directors, meets periodically with management, internal auditors and independent auditors to discuss auditing, internal control and financial reporting matters. To ensure their independence, both the internal auditors and independent auditors have full and free access to the Audit Committees.
The financial statements have been audited by Deloitte & Touche LLP, the Companies' independent auditors, who were responsible for conducting their audit in accordance with generally accepted auditing standards.
Jan B. Packwood J. LaMont Keen Darrel T. Anderson President and Senior Vice President, Vice President- Chief Executive Officer Administration and Finance and Treasurer Chief Financial Officer
IDACORP, Inc. Consolidated Statements of Income Year Ended December 31, 2000 1999 1998 (Thousands of Dollars Except for Per Share Amounts) OPERATING REVENUES: Electric Utility: General business $ 565,357 $ 516,148 $ 514,856 Off system sales 229,986 119,785 214,418 Other revenues 40,319 22,403 27,136 Total electric utility revenues 835,662 658,336 756,410 Diversified Operations: Energy marketing 145,400 31,368 10,745 Other 24,004 29,426 15,443 Total diversified operations 169,404 60,794 26,188 Earnings of unconsolidated partnerships, joint ventures and subsidiaries 14,287 12,022 12,489 Total operating revenues 1,019,353 731,152 795,087
OPERATING EXPENSES: Electric Utility: Purchased power 398,649 106,344 185,271 Fuel expense 94,215 86,617 86,237 Power cost adjustment (120,688) (502) 21,866 Other operations and maintenance 193,397 193,867 187,246 Depreciation 80,287 77,833 74,481 Taxes other than income taxes 20,166 21,719 20,725 Total electric utility expenses 666,026 485,878 575,826 Diversified Operations: Energy marketing 50,811 9,684 2,782 Other 40,853 36,540 23,056 Total diversified operations 91,664 46,224 25,838 Total operating expenses 757,690 532,102 601,664
OPERATING INCOME 261,663 199,050 193,423
OTHER INCOME: Allowance for equity funds used during construction 2,565 1,667 300 Gain on sale of asset 14,000 - - Other - net (605) 3,459 5,518 Total other income 15,960 5,126 5,818
INTEREST EXPENSE AND OTHER: Interest on long-term debt 53,356 54,294 52,270 Other interest 9,983 8,681 8,407 Allowance for borrowed funds used during construction (2,346) (1,392) (900) Preferred dividends of Idaho Power Company 5,929 5,572 5,658 Total interest expense and other 66,922 67,155 65,435
INCOME BEFORE INCOME TAXES 210,701 137,021 133,806
INCOME TAXES 70,818 45,672 44,630
NET INCOME $ 139,883 $ 91,349 $ 89,176
AVERAGE COMMON SHARES OUTSTANDING (000's) 37,556 37,612 37,612 EARNINGS PER SHARE OF COMMON STOCK (basic and diluted) $ 3.72 $ 2.43 $ 2.37
The accompanying notes are an integral part of these statements.
IDACORP, Inc. Consolidated Balance Sheets
December 31, 2000 1999 1998 (Thousands of Dollars)
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 106,795 $ 111,338 $ 22,867 Receivables: Customer 243,647 98,923 102,671 Allowance for uncollectible accounts (1,397) (1,397) (1,397) Employee notes 4,742 4,105 4,510 Other 15,611 12,117 10,702 Energy marketing assets 1,681,554 37,398 - Accrued unbilled revenues 44,825 31,994 34,610 Materials and supplies (at average cost) 29,731 29,611 30,157 Fuel stock (at average cost) 5,105 9,329 7,096 Prepayments 24,575 16,097 16,042 Regulatory assets associated with income 8,672 893 2,965 taxes Total current assets 2,163,860 350,408 230,223
INVESTMENTS AND OTHER ASSETS 157,068 139,091 124,021
PROPERTY, PLANT AND EQUIPMENT Utility plant in service 2,799,874 2,726,026 2,659,441 Accumulated provision for depreciation (1,142,572) (1,073,722) (1,009,387) Utility plant in service - net 1,657,302 1,652,304 1,650,054 Construction work in progress 136,388 91,637 59,717 Utility plant held for future use 2,167 1,742 1,738 Other property, net of accumulated depreciation 9,179 6,928 5,416 Property, plant and equipment - net 1,805,036 1,752,611 1,716,925
DEFERRED DEBITS: American Falls and Milner water rights 31,585 31,585 31,830 Company-owned life insurance 39,554 40,480 35,149 Regulatory assets associated with income taxes 204,880 214,782 201,465 Regulatory assets - PCA 119,905 - - Regulatory assets - other 45,750 56,137 67,212 Other 71,620 55,277 49,994 Total deferred debits 513,294 398,261 385,650
TOTAL $4,639,258 $2,640,371 $2,456,819
The accompanying notes are an integral part of these statements.
IDACORP, Inc Consolidated Balance Sheets
December 31, 2000 1999 1998 (Thousands of Dollars) LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES: Current maturities of long-term debt $ 39,774 $ 89,101 $ 6,029 Notes payable 120,600 19,757 38,524 Accounts payable 272,376 145,737 101,975 Energy marketing liabilities 1,706,501 33,814 - Taxes accrued 15,631 21,313 24,785 Interest accrued 16,985 19,126 18,365 Deferred income taxes 8,672 893 2,965 Other 28,104 16,696 12,275 Total current liabilities 2,208,643 346,437 204,918
DEFERRED CREDITS: Deferred income taxes 460,464 430,468 422,196 Regulatory liabilities associated with deferred investment tax credits 66,050 67,433 69,396 Regulatory liabilities associated with income taxes 40,230 33,817 28,075 Regulatory liabilities - PCA - 3,378 5,199 Regulatory liabilities - other 4,621 3,363 4,161 Other 69,259 75,136 70,572 Total deferred credits 640,624 613,595 599,599
LONG-TERM DEBT 864,114 821,558 815,937
COMMITMENTS AND CONTINGENT LIABILITIES
PREFERRED STOCK OF IDAHO POWER COMPANY 105,066 105,811 105,968
COMMON STOCK EQUITY: Common stock, no par value (shares authorized 120,000,000; 37,612,351 shares issued) 453,102 451,343 451,564 Retained earnings 370,126 300,093 278,607 Accumulated other comprehensive income (loss) (921) 1,534 226 Treasury stock (44,425 shares at cost) (1,496) - - Total common stock equity 820,811 752,970 730,397
TOTAL $4,639,258 $2,640,371 $2,456,819
The accompanying notes are an integral part of these statements.
IDACORP, Inc. Consolidated Statements of Capitalization December 31, 2000 % 1999 % 1998 % (Thousands of Dollars) COMMON STOCK EQUITY: Common stock $ 453,102 $ 451,343 $ 451,564 Retained earnings 370,126 300,093 278,607 Accumulated other comprehensive income (loss) (921) 1,534 226 Treasury stock (1,496) - - Total common stock equity 820,811 46 752,970 45 730,397 44
PREFERRED STOCK OF IDAHO POWER COMPANY: 4% preferred stock 15,066 15,811 15,968 7.68% Series, serial preferred stock 15,000 15,000 15,000 7.07% Series, serial preferred stock 25,000 25,000 25,000 Auction rate preferred stock 50,000 50,000 50,000 Total preferred stock 105,066 6 105,811 6 105,968 7
LONG-TERM DEBT: First mortgage bonds: 8.65% Series due 2000 - 80,000 80,000 6.93% Series due 2001 30,000 30,000 30,000 6.85% Series due 2002 27,000 27,000 27,000 6.40% Series due 2003 80,000 80,000 80,000 8 % Series due 2004 50,000 50,000 50,000 5.83% Series due 2005 60,000 60,000 60,000 7.38% Series due 2007 80,000 - - 7.20% Series due 2009 80,000 80,000 - Maturing 2021 through 2031 with rates ranging from 7.5% to 9.52% 230,000 230,000 230,000 Total first mortgage bonds 637,000 637,000 557,000 Amount due within one year (30,000) (80,000) - Net first mortgage bonds 607,000 557,000 557,000 Pollution control revenue bonds: 7 1/4% Series due 2008 - 4,360 4,360 8.30 % Series 1984 due 2014 49,800 49,800 49,800 6.05 % Series 1996A due 2026 68,100 68,100 68,100 Variable Rate Series 1996B due 2026 24,200 24,200 24,200 Variable Rate Series 1996C due 2026 24,000 24,000 24,000 Variable Rate Series 2000 due 2027 4,360 - - Total pollution control revenue bonds 170,460 170,460 170,460 REA notes 1,339 1,415 1,489 Amount due within one year (77) (76) (74) Net REA notes 1,262 1,339 1,415 American Falls bond guarantee 19,885 19,885 20,130 Milner Dam note guarantee 11,700 11,700 11,700 Unamortized premium/discount - net (1,330) (1,441) (1,539) Debt related to investments in affordable housing with rates ranging from 6.03% to 8.59% due 2000 to 2011 64,063 71,183 62,103 Amount due within one year (9,697) (9,025) (5,955) Net affordable housing debt 54,366 62,158 56,148 Other subsidiary debt 771 457 623
Total long-term debt 864,114 48 821,558 49 815,937 49
TOTAL CAPITALIZATION $1,789,991 100 $1,680,339 100 $1,652,302 100
The accompanying notes are an integral part of these statements.
IDACORP, Inc. Consolidated Statements of Cash Flows Year Ended December 31, 2000 1999 1998 (Thousands of Dollars)
OPERATING ACTIVITIES: Net income $ 139,883 $ 91,349 $ 89,176 Adjustments to reconcile net income to net cash provided by operating activities: Unrealized (gains) losses from energy marketing activities 28,531 (3,584) - Gain on sale of asset (14,000) - - Depreciation and amortization 103,971 95,436 87,143 Deferred taxes and investment tax credits 46,718 (1,820) (10,182) Accrued PCA costs (122,353) (891) 21,658 Change in: Receivables and prepayments (157,182) 2,683 4,883 Accrued unbilled revenues (12,831) 2,616 (1,298) Materials and supplies and fuel stock 4,104 (1,687) (925) Accounts payable 125,704 43,762 (9,963) Taxes accrued (5,682) (3,472) 489 Other current assets and liabilities 4,917 5,182 (825) Other - net (8,145) 1,014 (10,269) Net cash provided by operating activities 133,635 230,588 169,887
INVESTING ACTIVITIES: Additions to property, plant and equipment (140,302) (110,974) (89,184) Investments in affordable housing projects (29,166) (19,554) (19,139) Proceeds from sale of asset 17,500 - - Investments in company-owned life insurance - (5,862) - Other - net (642) (5,060) 3,206 Net cash used in investing activities (152,610) (141,450) (105,117)
FINANCING ACTIVITIES: Proceeds from issuance of: First mortgage bonds 80,000 80,000 60,000 Long-term debt related to affordable housing projects 10,021 18,730 20,556 Pollution control revenue bonds 4,360 - - Retirement of: Subsidiary debt (926) (165) (4,316) Long-term debt related to affordable housing projects (17,141) (9,650) (4,838) First mortgage bonds (80,000) - (30,000) Pollution control revenue bonds (4,360) - - Dividends on common stock (69,850) (69,863) (69,868) Increase (decrease) in short- term borrowings 100,843 (18,767) (18,992) Acquisition of treasury stock (8,014) - - Other - net (501) (952) (1,350) Net cash provided by (used in) financing activities 14,432 (667) (48,808) Net increase (decrease) in cash and cash equivalents (4,543) 88,471 15,962 Cash and cash equivalents beginning of period 111,338 22,867 6,905 Cash and cash equivalents at end of period $ 106,795 $ 111,338 $ 22,867
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Income taxes $ 29,830 $ 51,750 $ 55,527 Interest (net of amount capitalized) $ 61,825 $ 56,295 $ 53,806
The accompanying notes are an integral part of these statements.
IDACORP, Inc. Consolidated Statements of Retained Earnings
Year Ended December 31, 2000 1999 1998 (Thousands of Dollars)
RETAINED EARNINGS, BEGINNING OF YEAR $300,093 $278,607 $259,299
NET INCOME 139,883 91,349 89,176
Total 439,976 369,956 348,475
COMMON STOCK DIVIDENDS (69,850) (69,863) (69,868)
RETAINED EARNINGS, END OF YEAR $370,126 $300,093 $278,607
The accompanying notes are an integral part of these statements.
Consolidated Statements of Comprehensive Income
Year Ended December 31, 2000 1999 1998 (Thousands of Dollars)
NET INCOME $139,883 $ 91,349 $ 89,176
OTHER COMPREHENSIVE INCOME (LOSS): Unrealized gains (losses) on securities (net of tax of ($1,713),$677, and $2,185) (2,335) 1,017 3,385 Minimum pension liability adjustment (net of tax of ($78),$189 and ($2,054)) (119) 291 (3,159)
TOTAL COMPREHENSIVE INCOME $137,429 $ 92,657 $ 89,402
The accompanying notes are an integral part of these statements
IDACORP, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Nature of Business
IDACORP, Inc. (IDACORP or the Company) is a holding company whose principal operating subsidiary is Idaho Power Company (IPC). IPC is regulated by the FERC and the state regulatory commissions of Idaho, Oregon, Nevada and Wyoming, and is engaged in the generation, transmission, distribution, sale and purchase of electric energy. IPC is the parent of Idaho Energy Resources Co., a joint venturer in Bridger Coal Company, which supplies coal to IPC's Jim Bridger generating plant.
IDACORP's other significant subsidiaries are:
IDACORP Energy Services - natural gas marketing Ida-West Energy - independent power projects development and management IdaTech - developer of integrated fuel cell systems IDACORP Financial Services - affordable housing and other real estate investments Rocky Mountain Communications - commercial and residential Internet service provider IDACOMM - provider of telecommunications services IDACORP Services - energy related products and services Applied Power Company - supplier of photovoltaic systems (sold January 2001).
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned or controlled subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Investments in business entities in which the Company and its subsidiaries do not have control, but have the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method.
System of Accounts
The accounting records of IPC conform to the Uniform System of Accounts prescribed by the FERC and adopted by the public utility commissions of Idaho, Oregon, Nevada and Wyoming.
Property, Plant and Equipment
The cost of additions to utility plant in service represents the original cost of contracted services, direct labor and material, allowance for funds used during construction and indirect charges for engineering, supervision and similar overhead items. Maintenance and repairs of property and replacements and renewals of items determined to be less than units of property are charged to operations. For 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 property, plant and equipment.
Allowance for Funds Used During Construction (AFDC)
The allowance, a non-cash item, represents the composite interest costs of debt, shown as a reduction to interest charges, and a return on equity funds, shown as an addition to other income, used to finance construction. While cash is not realized currently from such allowance, it is realized under the rate making process over the service life of the related property through increased revenues resulting from higher rate base and higher depreciation expense. Based on the uniform formula adopted by the FERC, IPC's weighted- average monthly AFDC rates for 2000, 1999 and 1998 were 8.3 percent, 7.8 percent, and 6.0 percent respectively.
Revenues
In order to match revenues with associated expenses, IPC accrues unbilled revenues for electric services delivered to customers but not yet billed at month-end.
IPC had a regulatory settlement with the Idaho Public Utilities Commission (IPUC) that expired in 1999. Under terms of the settlement, when earnings in the Idaho jurisdiction exceeded an 11.75 percent return on year-end common equity, 50 percent of the excess was set aside for the benefit of IPC's Idaho retail customers.
In March 2000 IPC submitted a 1999 annual earnings sharing compliance filing to the IPUC. This filing indicated that there was almost $9.6 million in 1999 earnings and $2.7 million in unused 1998 reserve balances available for the benefit of IPC's Idaho customers. In April 2000 the IPUC ordered that $6.9 million of the revenue sharing balance be refunded to Idaho customers through rate reductions effective May 16, 2000. The IPUC also approved IPC's continuing participation in the Northwest Energy Efficiency Alliance (NEEA) through 2004, ordering IPC to set aside the remaining $5.4 million of revenue sharing dollars to fund that participation.
Power Cost Adjustment
IPC has a Power Cost Adjustment (PCA) mechanism that provides for annual adjustments to the rates charged to Idaho retail customers. These adjustments are based on forecasts of net power supply costs, and take effect annually on May 16. The difference between the actual costs incurred and the forecasted costs are deferred, with interest, and trued-up in future annual rate adjustments.
Depreciation
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 utility plant in service approximated 2.94 percent in 2000, 2.94 percent in 1999 and 2.87 percent in 1998.
Income Taxes
The Company follows the liability method of computing deferred taxes on all temporary differences between the book and tax basis of assets and liabilities and adjusts deferred tax assets and liabilities for enacted changes in tax laws or rates. Consistent with orders and directives of the IPUC, the regulatory authority having principal jurisdiction, IPC's deferred income taxes (commonly referred to as normalized accounting) are provided for the difference between income tax depreciation and straight-line depreciation computed using book lives on coal-fired generation facilities and properties acquired after 1980. On other facilities, deferred income taxes are provided for the difference between accelerated income tax depreciation and straight-line depreciation using tax guideline lives on assets acquired prior to
1981. Deferred income taxes are not provided for those income tax timing differences where the prescribed regulatory accounting methods do not provide for current recovery in rates. Regulated enterprises are required to recognize such adjustments as regulatory assets or liabilities if it is probable that such amounts will be recovered from or returned to customers in future rates (see Note 2).
The State of Idaho allows a three-percent investment tax credit (ITC) upon certain qualifying plant additions. ITC 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.
Cash and Cash Equivalents
For purposes of reporting cash flows, 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.
Management Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Regulation of Utility Operations
Electric utilities have historically been recognized as natural monopolies and have operated in a highly regulated environment in which they have an obligation to provide electric service to their customers in return for an exclusive franchise within their service territory with an opportunity to earn a regulated rate of return. This regulatory environment is changing. The generation sector has experienced competition from non-utility power and market producers, and the FERC is requiring utilities, including IPC, to provide wholesale open-access transmission service to others. Transmission services may soon be provided by Regional Transmission Organizations rather than utilities.
Some state regulatory authorities are in the process of changing utility regulations in response to federal and state statutory changes and evolving competitive markets. These statutory and conforming regulations may result in increased wholesale and retail competition. In 1997, the Idaho Legislature appointed a committee to study restructuring of the electric utility industry. Although the committee will continue studying a variety of restructuring ideas, it has not recommended any restructuring legislation and is not expected to in the foreseeable future. In 1999, the Oregon legislature passed legislation restructuring the electric utility industry, but exempted IPC's service territory. Due to IPC's low cost structure, it is well positioned to compete in the evolving utility market place. However, the Company is unable to predict what financial impact or effect the adoption of any such legislation would have on IPC's operations.
IPC follows Statement of Financial Accounting Standards (SFAS) No. 71, "Accounting for the Effects of Certain Types of Regulation," and its financial statements reflect the effects of the different rate making principles followed by the various jurisdictions regulating IPC. Pursuant to SFAS 71 IPC capitalizes, as deferred regulatory assets, incurred costs that are expected to be recovered in future utility rates. IPC also records as deferred regulatory liabilities the current recovery in utility rates of costs that are expected to be paid in the future.
The following is a breakdown of IPC's regulatory assets and liabilities for the years 2000, 1999 and 1998:
2000 1999 1998 Assets Liabilities Assets Liabilities Assets Liabilities (Millions of Dollars) Income taxes $213.6 $ 40.2 $215.7 $ 33.8 $204.4 $ 28.1 Conservation 32.3 - 37.5 - 43.3 - Employee benefits 3.7 - 4.7 - 5.6 - PCA deferral and amortization 119.9 - - 3.4 - 5.2 Other 9.7 4.7 13.9 3.4 18.3 4.1 Deferred investment tax credits - 66.0 - 67.4 - 69.4 Total $379.2 $110.9 $271.8 $108.0 $271.6 $106.8
At December 31, 2000, IPC had $5.5 million of regulatory assets that were not earning a return on investment, excluding the $213.6 million that relates to income taxes.
In the event that recovery of costs through rates becomes unlikely or uncertain, SFAS 71 would no longer apply. If the Company were to discontinue application of SFAS 71 for some or all of IPC's operations, then these items may represent stranded investments. If the Company is not allowed recovery of these investments, it would be required to write off the applicable portion of regulatory assets and the financial effects could be significant.
Derivative Financial Instruments
The Company uses financial instruments such as commodity futures, forwards, options and swaps to manage exposure to commodity price risk in the electricity and natural gas markets. The objective of the Company's risk management program is to mitigate the risk associated with the purchase and sale of natural gas and electricity as well as to optimize its energy marketing portfolio. The accounting for derivative financial instruments that are used to manage risk is in accordance with the concepts established in SFAS No. 80, "Accounting for Futures Contracts," American Institute of Certified Public Accountants Statement of Position 86-2, "Accounting for Options," and Emerging Issues Task Force (EITF) 98-10, "Accounting for Contracts Involved in Energy Trading Activities". EITF 98-10 was adopted effective January 1, 1999 resulting in an adjustment to net income that was not material.
Energy trading contracts as defined by EITF 98-10 are reported at fair value on the balance sheet with the resulting gains and losses reported on the income statement. The fair value of positions recorded on the balance sheet is dependant on the prices and volatility of the energy markets. As such, these items on the balance sheet can fluctuate greatly without large changes in volumes or positions. Cash flows from energy trading contracts are recognized in the statement of cash flows as an operating activity.
The following table shows a summary of the notional amounts of the Company's forward exposure (including both sales and purchases) as of December 31, 2000 and 1999. The maximum term related to any forward position is ten years.
December 31,2000 December 31,1999 Gas Electricity Gas Electricity MMbtu's MWh's MMbtu's MWh's
Total gross notional volume 190,777 34,453 112,513 10,818
The following table displays the fair values of the Company's energy marketing assets and liabilities at December 31, 2000 and 1999, and the average values for the twelve months ended December 31, 2000 (in thousands of dollars):
Balance at Twelve Months Balance at December 31,2000 Average Balance December 31,1999 Assets Liabilities Assets Liabilities Assets Liabilities
Gas $ 108,935 $ 115,537 $ 67,263 $ 69,742 $ 8,302 $ 8,220 Electricity 1,572,619 1,590,964 401,956 397,914 29,096 25,594
Total $1,681,554 $1,706,501 $ 469,219 $ 467,656 $ 37,398 $ 33,814
The gain in fair value of energy trading contract positions (including electricity and natural gas forwards, futures, options and swaps) included in income before income taxes for the years ended December 31, 2000 and 1999 were $145.4 million and $31.4 million respectively.
Notional amounts listed above reflect the volume of energy related to transactions with counterparties, but do not measure exposure to market or credit risks. The maximum term detailed above also is not indicative of likely future cash flows as positions may be offset in the markets at any time to meet risk management guidelines.
Comprehensive Income
Components of the Company's comprehensive income include net income, unrealized holding gains on marketable securities, the Company's proportionate share of unrealized holding gains on marketable securities held by an equity investee, and the changes in additional minimum liability under a deferred compensation plan for certain senior management employees and directors.
New Accounting Pronouncements
In June 1998 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities." In June 2000, the FASB issued SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Activities", which amended certain provisions of SFAS 133. The Derivative Implementation Group, a task force created by the FASB, is continuing to identify and resolve implementation questions related to SFAS 133 and SFAS 138.
SFAS 133, as amended by SFAS 138, was effective as of January 1, 2001. As of January 1, 2001 contracts company-wide have been evaluated based upon the SFAS 133 derivative definition and requirements. Most of the Company's identified derivatives consist of energy trading contracts that are currently reported at fair value under the provisions of Emerging Issues Task Force 98-10. The remaining derivatives are IPC electricity purchase and sales contracts that are subject to regulatory processes. As a result, the adoption of SFAS 133, as amended, did not have a material effect on the Company's financial position, results of operations, or cash flows.
Other Accounting Policies
Debt discount, expense and premium are being amortized over the terms of the respective debt issues.
Reclassifications
Certain items previously reported for years prior to 2000 have been reclassified to conform to the current year's presentation.
2. INCOME TAXES: IPC has settled Federal and Idaho tax liabilities on all open years through the 1996 tax year except for amounts related to a partnership which have been, in management's opinion, adequately accrued.
A reconciliation between the statutory federal income tax rate and the effective rate is as follows:
2000 1999 1998 (Thousands of Dollars) Computed income taxes based on statutory federal income tax rate $ 73,746 $ 47,957 $ 46,832 Change in taxes resulting from: AFDC (1,719) (1,071) (420) Investment tax credits (3,083) (3,032) (2,934) Repair allowance (4,550) (2,800) (2,800) Settlement of prior years tax returns 161 (380) (1,965) State income taxes (net of federal reduction) 9,793 6,250 7,574 Depreciation 8,243 7,292 5,237 Affordable housing and historic tax credits (net of related deferred taxes) (12,962) (8,934) (6,504) Preferred dividends of IPC 2,075 1,950 1,980 Other (886) (1,560) (2,370) Total provision for federal and state income taxes $ 70,818 $ 45,672 $ 44,630 Effective tax rate 33.6% 33.3% 33.4%
The provision for income taxes consists of the following:
2000 1999 1998 (Thousands of Dollars) Income taxes currently payable: Federal $ 18,984 $ 38,165 $ 45,606 State 5,169 9,327 9,206 Total 24,153 47,492 54,812 Income taxes deferred - net of amortization: Federal 40,641 2,174 (8,006) State 7,407 (2,031) (1,376) Total 48,048 143 (9,382) Investment tax credits: Deferred 1,700 1,069 2,134 Restored (3,083) (3,032) (2,934) Total (1,383) (1,963) (800) Total provision for income taxes $ 70,818 $ 45,672 $ 44,630
The tax effects of significant items comprising the Company's net deferred tax liability are as follows:
2000 1999 1998 (Thousands of Dollars) Deferred tax assets: Regulatory liabilities $ 40,230 $ 33,817 $ 28,075 Advances for construction 9,224 9,646 10,401 Other 22,488 18,586 20,512 Total 71,942 62,049 58,988 Deferred tax liabilities: Utility plant 249,546 249,597 247,270 Regulatory assets 213,552 215,675 204,430 Conservation programs 13,561 17,396 16,866 PCA 47,189 (1,826) (2,543) Other 17,230 12,568 18,126 Total 541,078 493,410 484,149
Net deferred tax liabilities $469,136 $431,361 $425,161
3. COMMON STOCK: Changes in shares of IDACORP common stock and treasury stock for 2000, 1999 and 1998 were as follows (in thousands of dollars):
COMMON STOCK TREASURY STOCK Shares Issued* Amount Shares Amount
Balance at December 31, 1997 37,612,351 $452,519 - $ - Other - net - (955) - - Balance at December 31, 1998 37,612,351 451,564 - - Other - net - (221) - - Balance at December 31, 1999 37,612,351 451,343 - - Treasury shares: Acquired - - 198,925 8,014 Issued - (744) (154,500) (6,518) Other - net - 2,503 - - Balance at December 31, 2000 37,612,351 $453,102 44,425 $ 1,496
*Total common shares outstanding were 37,567,926 at December 31, 2000 and 37,612,351 at December 31, 1999 and 1998.
As of December 31, 2000 there were 3,791,321 shares of authorized but unissued shares of IDACORP common stock were reserved for future issuance under the Company's Dividend Reinvestment and Stock Purchase Plan and IPC's Employee Savings Plan. In addition, 314,114 shares are reserved for the Restricted Stock Plan and 750,000 shares for the Long-Term Incentive and Compensation Plan (LTICP) (see Note 9).
The Company has a Shareholder Rights Plan (Plan) designed to ensure that all shareholders receive fair and equal treatment in the event of any proposal to acquire control of the Company. Under the Plan, the Company declared a distribution of one Preferred Share Purchase Right (Right) for each of the Company's outstanding Common Shares held on October 1, 1998 or issued thereafter. The Rights are currently not exercisable and will be exercisable only if a person or group (Acquiring Person) either acquires ownership of 20 percent or more of the Company's Voting Stock or commences a tender offer that would result in ownership of 20 percent or more of such stock. The Company may redeem all but not less than all of the Rights at a price of $0.01 per Right or exchange the Rights for cash, securities (including Common Shares of the Company) or other assets at any time prior to the close of business on the 10th day after acquisition by an Acquiring Person of a 20 percent or greater position.
Additionally, the IDACORP Board created the A Series Preferred Stock, without par value, and reserved 1,200,000 shares for issuance upon exercise of the Rights.
Following the acquisition of a 20 percent or greater position, each Right will entitle its holder to purchase for $95 that number of shares of Common Stock or Preferred Stock having a market value of $190.
If after the Rights become exercisable, the Company is acquired in a merger or other business combination, 50 percent or more of its consolidated assets or earnings power are sold, or the Acquiring Person engages in certain acts of self-dealing, each Right entitles the holder to purchase for $95, shares of the acquiring company's common stock having a market value of $190.
Any Rights that are or were held by an Acquiring Person become void if any of these events occurs. The Rights expire on September 30, 2008.
The Rights themselves do not give any voting or other rights as shareholders to their holders. The terms of the Rights may be amended without the approval of any holders of the Rights until an Acquiring Person obtains a 20 percent or greater position, and then may be amended as long as the amendment is not adverse to the interests of the holders of the Rights.
In 2000, IDACORP's Board of Directors approved the repurchase of up to 350,000 shares of outstanding common stock for distribution to shareholders of an acquired entity as partial payment for the acquisition. As of December 31, 2000, 156,300 shares had been acquired (at a cost of $6.6 million) and 154,500 shares had been issued under this plan. In January 2001, the Company repurchased an additional 150,000 shares (at a cost of $6.2 million) for distribution to shareholders of the acquired entity.
4. PREFERRED STOCK OF IDAHO POWER COMPANY: The number of shares of IPC preferred stock outstanding at December 31, 2000, 1999 and 1998 were as follows:
Shares Outstanding at December 31, Call Price 2000 1999 1998 Per Share Preferred stock: Cumulative, $100 par value: 4% preferred stock (authorized 215,000 shares) 150,656 158,112 159,680 $104.00 Serial preferred stock, 7.68% Series (authorized 150,000 shares) 150,000 150,000 150,000 $102.97 Serial preferred stock, cumulative, without par value; total of 3,000,000 shares authorized: 7.07% Series, $100 stated value, (authorized 250,000 $103.535 to shares)(a) 250,000 250,000 250,000 $100.354 Auction rate preferred stock, $100,000 stated value, (authorized 500 shares)(b) 500 500 500 $100,000.00
Total 551,156 558,612 560,180
(a) The preferred stock is not redeemable prior to July 1, 2003. (b) Dividend rate at December 31, 2000 was 4.95% and ranged between 4.28% and 5.00% during the year.
During 2000, 1999 and 1998 IPC reacquired and retired 7,456 shares, 1,568 shares and 7,292 shares of 4% preferred stock. As of December 31, 2000, the overall effective cost of all outstanding preferred stock was 6.02 percent.
5. LONG-TERM DEBT: The Company currently has a $300.0 million shelf registration statement that can be used for the issuance of unsecured debt securities and preferred or common stock. At December 31, 2000, none had been issued.
On March 23, 2000, IPC filed a $200.0 million shelf registration statement that can be used for first mortgage bonds (including medium term notes), unsecured debt, or preferred stock. On December 1, 2000, $80.0 million principal amount of Secured Medium Term Notes, Series C, 7.38% Series due 2007 were issued and proceeds from this issuance were used for the early redemption in January 2001 of the $75.0 million First Mortgage Bonds 9.50%, Series due 2021. At December 31, 2000, $120.0 million of the total remained to be issued.
The amount of first mortgage bonds issuable by IPC is limited to a maximum of $900.0 million and by property, earnings and other provisions of the mortgage and supplemental indentures thereto. Substantially all of the electric utility plant is subject to the lien of the indenture.
Pollution Control Revenue Bonds, Series 1984, due December 1, 2014, are secured by First Mortgage Bonds, Pollution Control Series A, which were issued by IPC and are held by a Trustee for the benefit of the bondholders.
First mortgage bonds maturing during the five-year period ending 2005 are $30.0 million in 2001, $27.0 million in 2002, $80.0 million in 2003, $50.0 million in 2004 and $60.0 million in 2005.
On September 9, 1998, $60.0 million principal amount of Secured Medium Term Notes, Series B, 5.83% Series due 2005 were issued by IPC. Proceeds from this issuance were used to redeem at maturity, the $30.0 million First Mortgage Bonds 5.33% Series B due September 1998, with the balance used for repayment of commercial paper issued in connection with IPC's ongoing business.
On November 23, 1999, $80.0 million principal amount of Secured Medium Term Notes, Series B, 7.20% Series due 2009 were issued by IPC. Proceeds from this issuance were used to redeem at maturity, the $80.0 million First Mortgage Bonds 8.65% Series due January 2000.
On April 26, 2000, at the request of IPC, the American Falls Reservoir District issued its American Falls Refunding Replacement Dam Bonds, Series 2000, in the aggregate principal amount of $19.9 million for the purpose of refunding on April 26, 2000 a like amount of its bonds dated May 1, 1990. IPC has guaranteed repayment of these bonds.
On May 17, 2000, tax exempt Pollution Control Revenue Refunding Bonds Series 2000 in the aggregate principal amount of $4.4 million were issued by Port of Morrow, Oregon for the purpose of refunding on August 1, 2000, a like amount of its Pollution Control Revenue Bonds, Series 1978.
At December 31, 2000, 1999 and 1998 the overall effective cost of all outstanding first mortgage bonds and pollution control revenue bonds was 7.52 percent, 7.62 percent and 7.69 percent, respectively.
At December 31, 2000, IDACORP Financial Services, Inc., a wholly owned subsidiary of the Company, has $64.1 million of debt with interest rates ranging from 6.03 percent to 8.59 percent. This debt is collateralized by investments in affordable housing projects with a book value of $101.7 million at December 31, 2000. Principal amounts maturing during the five-year period ending 2005 are $9.7 million in 2001, $9.5 million in 2002, $9.2 million in 2003, $9.3 million in 2004 and $8.3 million in 2005.
6. FAIR VALUE OF FINANCIAL INSTRUMENTS: The estimated fair value of the Company's financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
Cash and cash equivalents, customer and other receivables, notes payable, accounts payable, interest accrued, and taxes accrued are reported at their carrying value as these are a reasonable estimate of their fair value. The estimated fair values for long-term debt and investments are based upon quoted market prices of the same or similar issues or discounted cash flow analyses as appropriate.
The total estimated fair value of the Company's debt was approximately $933.6 million in 2000, $898.1 million in 1999 and $877.4 million in 1998. Included in investments and other property were financial instruments totaling $20.6 million in 2000, $24.0 million in 1999 and $14.2 million in 1998. Estimated fair value of these instruments was $26.0 million in 2000, $30.6 million in 1999 and $20.3 million in 1998.
7. NOTES PAYABLE: At December 31, 2000, IDACORP had a $50 million three-year credit facility that expires in December 2001, and a $100 million 364-day credit facility that expired in February 2001. Under these facilities the Company pays a facility fee on the commitment, quarterly in arrears, based on IPC's First Mortgage Bond Rating. Commercial paper may be issued up to the amounts supported by the bank credit facilities.
Balances and interest rates of short-term borrowings for IDACORP were as follows:
Year Ended December 31, 2000 1999 1998 (Thousands of Dollars)
Balance at end of year $60,900 - - Effective annual interest rate at end of year 7.8 % - -
At December 31, 2000, IPC had regulatory authority to incur up to $200 million of short-term indebtedness. IPC has a $120 million multi-year revolving credit facility expiring in December 2001. Under this facility IPC pays a facility fee on the commitment, quarterly in arrears, based on IPC's First Mortgage Bond rating. Commercial paper may be issued subject to the regulatory maximum, and is supported by bank lines of credit of an equal amount.
Balances and interest rates of short-term borrowings for IPC were as follows:
Year Ended December 31, 2000 1999 1998 (Thousands of Dollars)
Balance at end of year $59,700 $19,757 $38,524 Effective annual interest rate at end of year 6.8 % 6.1 % 6.0 %
8. COMMITMENTS AND CONTINGENT LIABILITIES: Commitments under contracts and purchase orders relating to IPC's program for construction and operation of facilities amounted to approximately $8.3 million at December 31, 2000. Additionally Ida- West Energy has commitments totaling $33.1 million. The commitments are generally revocable, subject to reimbursement of manufacturers' expenditures incurred and/or other termination charges.
IPC is currently purchasing energy from 66 on-line cogeneration and small power production facilities with contracts ranging from 1 to 30 years. Under these contracts IPC is required to purchase all of the output from these facilities. During the fiscal year ended December 31, 2000, IPC purchased 862,313 MWh at a cost of $53.7 million.
The Company is party to various legal claims, actions, and complaints, certain of which involve material amounts. Although unable to predict with certainty whether or not it will ultimately be successful in these legal proceedings, or, if not, what the impact might be, based upon the advice of legal counsel, management presently believes that disposition of these matters will not have a material adverse effect on the Company's financial position, results of operations or cash flows.
9. STOCK-BASED COMPENSATION: IDACORP has two stock-based compensation plans that align employee and shareholder objectives related to the long-term growth of the Company.
In 1995, SFAS No. 123, "Accounting for Stock-Based Compensation" was issued. It encourages a fair-value based method of accounting for stock-based compensation. As permitted by SFAS 123, the Company adopted its disclosure-only requirements and continues to account for stock-based compensation in accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25).
The Company adopted the 2000 Long-Term Incentive and Compensation Plan (LTICP) for officers, key employees and directors. The LTICP permits the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares, and other awards.
The maximum number of shares available under the LTICP is 750,000. In 2000, IDACORP issued 220,000 stock options with an exercise price equal to the market price of the Company's stock on the date of grant. The maximum term of the options is ten years, and they vest over a five-year period. In accordance with APB 25, no compensation costs have been recognized for the option awards in 2000.
Stock option transactions in 2000 are summarized as follows. There were no stock option transactions in 1999 and 1998:
Number Weighted of average shares exercise price Beginning of year - - Options granted 220,000 $35.8125 Options exercised - - Options cancelled - - End of year 220,000 $35.8125 Exercisable - -
IDACORP has a restricted stock plan for certain key employees. Each grant made under this plan has a three-year restricted period, and the final award amounts depend on the attainment of cumulative earnings per share performance goals. At December 31, 2000 there were 265,766 remaining shares available under this plan.
Restricted stock awards are compensatory awards and the Company accrues compensation expense (which is charged to operations) based upon the market value of the granted shares. For the years 2000, 1999 and 1998, total compensation accrued under the plan was $1.5 million, $0.5 million and $0.6 million respectively.
The following table summarizes restricted stock activity for the years 2000, 1999 and 1998:
2000 1999 1998 Shares outstanding - 43,615 43,063 38,365 beginning of year Shares granted 34,649 23,497 21,361 Shares forfeited - (9,585) (4,063) Shares issued (24,709) (13,360) (12,600) Shares outstanding - end of year 53,555 43,615 43,063 Weighted average fair value of current year stock grants on grant date $ 34.44 $ 32.88 $ 37.00
Had compensation cost for the stock-based compensation plans been determined on the basis of fair value pursuant to the provisions of SFAS 123, net income and earnings per share would have been as follows:
2000 1999 1998 Net income As reported $139,883 $ 91,349 $ 89,176 Pro forma 140,186 91,145 89,155 Basic and diluted earnings per share As reported 3.72 2.43 2.37 Pro forma 3.73 2.43 2.37
For purposes of the pro forma calculations above, the estimated fair value of the options and restricted stock are amortized to expense over the vesting period. The fair value of the restricted stock is the market price of the stock on the date of grant. The fair value of each option granted in 2000 was estimated at the date of grant using the Binomial option-pricing model with the following assumptions:
Stock dividend yield 5.19% Expected stock price volatility 27% Risk-free interest rate 6.15% Expected option lives 7 years Fair value of options granted $8.42
10. BENEFIT PLANS: Pension Plans
IDACORP has a noncontributory defined benefit pension plan covering most employees. The benefits under the plan are based on years of service and the employee's final average earnings. The Company's policy is to fund with an independent corporate trustee at least the minimum required under the Employee Retirement Income Security Act of 1974 but not more than the maximum amount deductible for income tax purposes. The Company was not required to contribute to the plan in 2000, 1999 and 1998. The trustee invests the plan's assets primarily in listed stocks (both U.S. and foreign), fixed income securities and investment grade real estate.
IDACORP has a nonqualified, deferred compensation plan for certain senior management employees and directors. The Company financed this plan by purchasing life insurance policies and investments in marketable securities, all of which are held by a trustee. The cash value of the policies and investments exceed the projected benefit obligation of the plan but do not qualify as plan assets in the actuarial computation of the funded status.
The following table shows the components of net periodic benefit cost for these plans (in thousands of dollars):
Pension Plan Deferred Compensation Plan 2000 1999 1998 2000 1999 1998 Service cost $ 7,442 $ 8,389 $ 7,133 $ 574 $ 744 $ 572 Interest cost 16,718 16,402 15,458 1,965 1,797 1,747 Expected return on assets (30,095) (25,240) (22,724) - - - Recognized net actuarial (gain) loss (4,503) (344) (111) 242 279 255 Amortization of prior service cost 708 708 424 (353) (325) (332) Amortization of transition asset (263) (263) (263) 613 613 613 Net periodic pension cost $(9,993) $ (348) $ (83) $3,041 $3,108 $2,855
The following table summarizes the changes in benefit obligation and plan assets of these plans (in thousands of dollars):
Pension Plan Deferred Compensation Plan 2000 1999 1998 2000 1999 1998 Change in projected benefit obligation: Benefit obligation at January 1 $229,042 $253,729 $224,073 $ 26,925 $ 27,029 $ 25,067 Service cost 7,442 8,389 7,133 574 744 572 Interest cost 16,718 16,402 15,458 1,965 1,797 1,747 Actuarial loss (gain) 455 (33,014) 14,139 840 (489) 1,297 Benefits paid (12,376) (16,464) (11,774) (2,516) (2,201) (2,049) Plan amendments - - 4,700 88 45 395 Benefit obligation at 241,281 229,042 253,729 27,876 26,925 27,029 December 31 Change in plan assets: Fair value at January 1 340,521 290,080 256,893 - - - Actual return on plan assets 12,644 66,905 44,961 - - - Employer contributions - - - - - - Benefit payments (12,376) (16,464) (11,774) - - - Fair value at December 31 340,789 340,521 290,080 - - -
Funded status 99,508 111,479 36,351 (27,876) (26,925) (27,029) Unrecognized actuarial loss (gain) (85,648)(108,057) (33,722) 6,442 5,844 6,612 Unrecognized prior service cost 7,954 8,662 9,370 (355) (796) (1,166) Unrecognized net transition liability (1,178) (1,441) (1,704) 2,762 3,375 3,988 Net amount recognized $ 20,636 $ 10,643 $ 10,295 $(19,027)$(18,502)$(17,595)
Amounts recognized in the statement of financial position consist of: Prepaid (accrued) pension cost $ 20,636 $ 10,643 $ 10,295 $(26,365)$(25,815)$(25,631) Intangible asset - - - 2,407 2,579 2,822 Accumulated other comprehensive income - - - 4,931 4,734 5,214 Net amount recognized $ 20,636 $ 10,643 $ 10,295 $(19,027)$(18,502)$(17,595)
The following table sets forth the assumptions used at the end of each year for all IPC-sponsored pension and postretirement benefit plans:
Pension Benefits Postretirement Benefits 2000 1999 1998 2000 1999 1998 Discount rate 7.5% 7.5% 6.75% 7.5% 7.5% 6.75% Expected long-term rate of return on assets 9.0 9.0 9.0 9.0 9.0 9.0 Annual salary increases 4.5 4.5 4.5 - - -
Savings Plan
IDACORP has an Employee Savings Plan which complies with Section 401(k) of the Internal Revenue Code and covers substantially all employees. The Company matches specified percentages of employee contributions to the plan. Matching contributions amounted to $3.4 million in 2000, $3.1 million in 1999 and $3.0 million in 1998.
Postretirement Benefits
The Company maintains a defined benefit postretirement plan (consisting of health care and death benefits) that covers all employees who were enrolled in the active group plan at the time of retirement, their spouses and qualifying dependents.
The net periodic postretirement benefit cost was as follows (in thousands of dollars):
2000 1999 1998 Service cost $ 851 $ 896 $ 720 Interest cost 3,374 2,867 2,913 Expected return on plan assets (2,522) (2,230) (1,761) Amortization of unrecognized transition obligation 2,040 2,040 2,040 Amortization of prior service cost (691) (691) (280) Amortization of unrecognized net - - (220) gains Net periodic post-retirement benefit cost $ 3,052 $ 2,882 $ 3,412
The following table summarizes the changes in benefit obligation and plan assets (in thousands of dollars): 2000 1999 1998 Change in accumulated benefit obligation: Benefit obligation at January 1 $ 41,139 $ 38,615 $ 43,459 Service cost 851 896 720 Interest cost 3,374 2,867 2,913 Plan amendments 1,200 - (9,071) Actuarial loss 5,635 1,859 3,483 Benefits paid (3,393) (3,098) (2,889) Benefit obligation at December 31 48,806 41,139 38,615 Change in plan assets: Fair value of plan assets at January 1 26,805 24,346 19,493 Actual (loss) return on plan assets (760) 2,389 4,853 Employer contributions 3,108 2,845 2,789 Benefits paid (3,082) (2,775) (2,789) Fair value of plan assets at December 31 26,071 26,805 24,346
Funded status (22,735) (14,334) (14,269) Unrecognized prior service cost (7,336) (9,227) (9,918) Unrecognized actuarial loss (gain) 3,361 (5,556) (7,256) Unrecognized transition obligation 24,480 26,520 28,560 Accrued benefit obligations included with other deferred credits $ (2,230) $ (2,597) $ (2,883)
The assumed health care cost trend rate used to measure the expected cost of benefits covered by the plan is 6.75%. A one-percentage point change in the assumed health care cost trend rate would have the following effect (in thousands of dollars):
1- 1- Percentage- Percentage- Point Point increase decrease Effect on total of service and interest cost components $ 320 $ (263) Effect on accumulated postretirement benefit obligation $2,876 $(2,452)
Postemployment Benefits
The Company provides certain benefits to former or inactive employees, their beneficiaries, and covered dependents after employment but before retirement. These benefits include salary continuation, health care and life insurance for those employees found to be disabled under our disability plans, and health care for surviving spouses and dependents. The Company accrues a liability for such benefits. In accordance with an IPUC order, the portion of the liability attributable to regulated activities in Idaho as of December 31, 1993, was deferred as a regulatory asset, and is being amortized over ten years. The following table summarizes postemployment benefit amounts included in the Company's consolidated balance sheet (in thousands of dollars):
2000 1999 1998 Included with regulatory assets - other $ 1,517 $ 1,889 $ 2,260 Included with other deferred credits $(3,040) $(3,282) $(3,372)
11. UTILITY PLANT IN SERVICE AND JOINTLY-OWNED PROJECTS: The following table sets out the major classifications of the IPC's utility plant in service, accumulated provision for depreciation and annual depreciation provisions as a percent of average depreciable balance for the years 2000, 1999 and 1998 (in thousands of dollars):
2000 1999 1998 Balance Avg Balance Avg Balance Avg Rate Rate Rate
Production $1,360,409 2.60% $1,348,531 2.60% $1,344,526 2.60% Transmission 410,315 2.30 403,010 2.30 389,011 2.30 Distribution 811,604 3.34 786,488 3.37 736,527 3.15 General and Other 217,546 5.42 187,997 5.46 189,377 5.45 Total in service 2,799,874 2.94% 2,726,026 2.94% 2,659,441 2.87% Accumulated provision for depreciation (1,142,572) (1,073,722) (1,009,387) In service - net $1,657,302 $1,652,304 $1,650,054
IPC is involved in the ownership and operation of three jointly- owned generating facilities. The Consolidated Statements of Income include IPC's proportionate share of direct operation and maintenance expenses applicable to the projects. Each facility and extent of IPC participation as of December 31, 2000 are as follows:
Company Ownership Accumulated Utility Provision Plant In for Name of Plant Location Service Depreciation % MW (Thousands of Dollars) Jim Bridger Rock Springs, Units 1-4 WY $393,786 $ 209,98 33 707 Boardman Boardman, OR 62,382 36,022 10 55 Valmy Units 1 and 2 Winnemucca, NV 300,852 148,115 50 261
IPC's wholly owned subsidiary, Idaho Energy Resources Company, is a joint venturer in Bridger Coal Company, which operates the mine supplying coal for the Jim Bridger steam generation plant. Coal purchased by IPC from the joint venture amounted to $43.7 million in 2000, $41.9 million in 1999 and $46.2 million in 1998.
IPC has contracts to purchase the energy from four PURPA Qualified Facilities that are 50 percent owned by Ida-West Energy Company, a wholly owned subsidiary of the Company. Power purchased from these facilities amounted to $8.1 million in 2000, $8.8 million in 1999 and $8.7 million in 1998.
12. INDUSTRY SEGMENT INFORMATION:
The Company has identified two reportable operating segments, Utility Operations and Energy Marketing.
The Utility Operations segment has two primary sources of revenue, the regulated operations of IPC and income from Bridger Coal Company, an unconsolidated joint venture also subject to regulation. IPC's regulated operations include the generation, transmission, distribution, purchase and sale of electricity.
Energy marketing consists of IPC's unregulated electricity marketing and IDACORP Energy's natural gas marketing operations.
IDACORP's other operations include:
Ida-West Energy Company - a developer and manager of independent power projects; IdaTech, LLC - a developer of integrated fuel cell systems; IDACORP Financial Services - an investor in affordable housing and other real estate; Rocky Mountain Communications, Inc. - provider of Internet services; IDACOMM - provider of telecommunication services; IDACORP Services - provider of energy-related products and services, home security, satellite television,and other services; Applied Power Company - manufacturer, supplier and distributor of solar photovoltaic systems (sold January 2001).
The following table summarizes the segment information for the Company's utility and energy marketing segments and the total of all other segments, and reconciles this information to total enterprise amounts.
Utility Energy Consolidated Operations Marketing Other Eliminations Total (Thousands of Dollars) Operating revenues $ 849,522 $ 145,400 $ 24,431 $ - $1,019,353 Operating income 182,020 94,589 (14,946) - 261,663 Other income 3,858 3,370 11,847 (3,115) 15,960 Interest expense 63,660 161 6,216 (3,115) 66,922 Income before income taxes 122,218 97,798 (9,315) - 210,701 Income taxes 48,174 38,355 (15,711) - 70,818 Net income 74,044 59,443 6,396 - 139,883 Total assets 2,530,312 1,911,597 197,349 - 4,639,258 Expenditures for long-lived assets 131,782 1,520 37,961 - 171,263
Operating revenues $ 669,761 31,368 30,023 - 731,152 Operating income 181,248 21,684 (3,882) - 199,050 Other income 5,586 121 490 (1,071) 5,126 Interest expense 62,250 518 5,458 (1,071) 67,155 Income before income taxes 124,584 21,287 (8,850) - 137,021 Income taxes 49,507 8,478 (12,313) - 45,672 Net income 75,077 12,809 3,463 - 91,349 Total assets 2,379,571 128,160 132,640 - 2,640,371 Expenditures for long-lived assets 112,772 312 26,880 - 139,964
Operating revenues $ 768,506 10,745 15,836 - 795,087 Operating income 186,723 7,963 (1,263) - 193,423 Other income 5,757 - 369 (308) 5,818 Interest expense 62,304 - 3,439 (308) 65,435 Income before income taxes 130,176 7,963 (4,333) - 133,806 Income taxes 49,893 2,787 (8,050) - 44,630 Net income 80,283 5,176 3,717 - 89,176 Total assets 2,266,055 59,245 131,519 - 2,456,819 Expenditures for long-lived assets 91,803 - 19,205 - 111,008
INDEPENDENT AUDITORS'REPORT
To The Board of Directors and Shareowners IDACORP, Inc. Boise, Idaho
We have audited the accompanying consolidated balance sheets and statements of capitalization of IDACORP,Inc. and its subsidiaries as of December 31, 2000,1999 and 1998, and the related consolidated statements of income, cash flows, retained earnings and comprehensive income for the years then ended. Our audits also include the consolidated financial statement schedule listed in the Index at Item 8. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of IDACORP, Inc. and subsidiaries at December 31, 2000, 1999 and 1998,and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Boise, Idaho February 1, 2001
Idaho Power Company Consolidated Statements of Income
Year Ended December 31, 2000 1999 1998 (Thousands of Dollars)
REVENUES: General business $ 565,357 $ 516,148 $ 514,856 Off system sales 229,986 119,785 214,418 Other revenues 40,319 22,403 27,136 Total revenues 835,662 658,336 756,410
EXPENSES: Operation: Purchased power 398,649 106,344 185,271 Fuel expense 94,215 86,617 86,237 Power cost adjustment (120,688) (502) 21,866 Other 146,424 151,800 145,374 Maintenance 46,973 42,067 41,872 Depreciation 80,287 77,833 74,481 Taxes other than income taxes 20,166 21,719 20,725 Total expenses 666,026 485,878 575,826
INCOME FROM OPERATIONS 169,636 172,458 180,584
OTHER INCOME: Allowance for equity funds used during construction 2,565 1,667 300 Energy marketing activities - net 92,637 23,206 7,429 Other - net 13,669 6,369 12,364 Total other income 108,871 31,242 20,093
INTEREST CHARGES: Interest on long-term debt 53,253 54,150 52,270 Other interest 4,544 7,864 8,323 Allowance for borrowed funds used during construction (2,346) (1,392) (900) Total interest charges 55,451 60,622 59,693
INCOME BEFORE INCOME TAXES 223,056 143,078 140,984
INCOME TAXES 85,568 45,550 45,065
NET INCOME 137,488 97,528 95,919
Dividends on preferred stock 5,929 5,572 5,658
EARNINGS ON COMMON STOCK $ 131,559 $ 91,956 $ 90,261
The accompanying notes are an integral part of these statements.
Idaho Power Company Consolidated Balance Sheets
Assets
December 31, 2000 1999 1998 (Thousands of Dollars)
ELECTRIC PLANT: In service (at original cost) $2,799,874 $2,726,026 $2,659,441 Accumulated provision for depreciation (1,142,572) (1,073,722) (1,009,387) In service - Net 1,657,302 1,652,304 1,650,054 Construction work in progress 131,214 88,348 58,904 Held for future use 2,167 1,742 1,738
Electric plant - Net 1,790,683 1,742,394 1,710,696
INVESTMENTS AND OTHER PROPERTY 21,884 117,759 105,600
CURRENT ASSETS: Cash and cash equivalents 83,494 95,038 20,029 Receivables: Customer 215,358 83,412 102,653 Allowance for uncollectible accounts (1,397) (1,397) (1,397) Notes 2,945 345 467 Employee notes 4,742 4,105 4,510 Related parties 311 195 3,164 Other 4,943 7,095 5,338 Energy marketing assets 1,572,619 29,096 - Accrued unbilled revenues 44,825 31,994 34,610 Materials and supplies (at average cost) 24,685 28,960 30,143 Fuel stock (at average cost) 5,105 9,329 7,096 Prepayments 24,145 16,054 16,011 Regulatory assets associated with income taxes 8,672 893 2,965
Total current assets 1,990,447 305,119 225,589
DEFERRED DEBITS: American Falls and Milner water rights 31,585 31,585 31,830 Company-owned life insurance 39,554 40,480 35,149 Regulatory assets associated with income taxes 204,880 214,782 201,465 Regulatory assets - PCA 119,905 - - Regulatory assets - other 45,750 56,137 67,212 Other 50,410 54,496 49,448
Total deferred debits 492,084 397,480 385,104
TOTAL $4,295,098 $2,562,752 $2,426,989
The accompanying notes are an integral part of these statements.
Idaho Power Company Consolidated Balance Sheets
Capitalization and Liabilities
December 31, 2000 1999 1998 (Thousands of Dollars) CAPITALIZATION: Common stock equity: Common stock, $2.50 par value (50,000,000 shares authorized; 37,612,351 shares outstanding) $ 94,031 $ 94,031 $ 94,031 Premium on capital stock 362,430 362,203 362,156 Capital stock expense (4,024) (3,819) (3,823) Retained earnings 313,800 274,181 252,137 Accumulated other comprehensive income (loss) (921) 1,534 226
Total common stock equity 765,316 728,130 704,727
Preferred stock 105,066 105,811 105,968
Long-term debt 808,977 821,558 815,937
Total capitalization 1,679,359 1,655,499 1,626,632
CURRENT LIABILITIES: Long-term debt due within one year 30,077 89,101 6,029 Notes payable 59,700 19,757 38,508 Accounts payable 250,673 95,125 101,108 Notes and accounts payable to related parties 4,212 10,076 28 Energy marketing liabilities 1,590,964 25,594 - Taxes accrued 12,983 21,773 25,164 Interest accrued 15,002 19,122 18,364 Deferred income taxes 8,672 893 2,965 Other 19,066 16,069 12,117
Total current liabilities 1,991,349 297,510 204,283
DEFERRED CREDITS: Deferred income taxes 452,404 428,923 420,268 Regulatory liabilities associated with deferred investment tax credits 66,050 67,433 69,396 Regulatory liabilities associated with income taxes 40,230 33,817 28,075 Regulatory liabilities - PCA - 3,378 5,199 Regulatory liabilities - other 4,621 3,363 4,161 Other 61,085 72,829 68,975
Total deferred credits 624,390 609,743 596,074
COMMITMENTS AND CONTINGENT LIABILITIES
TOTAL $4,295,098 $2,562,752 $2,426,989
The accompanying notes are an integral part of these statements.
Idaho Power Company Consolidated Statements of Capitalization December 31, 2000 % 1999 % 1998 % (Thousands of Dollars) COMMON STOCK EQUITY: Common stock $ 94,031 $ 94,031 $ 94,031 Premium on capital stock 362,430 362,203 362,156 Capital stock expense (4,024) (3,819) (3,823) Retained earnings 313,800 274,181 252,137 Accumulated other comprehensive income (loss) (921) 1,534 226 Total common stock equity 765,316 46 728,130 44 704,727 43
PREFERRED STOCK: 4% preferred stock 15,066 15,811 15,968 7.68% Series, serial preferred stock 15,000 15,000 15,000 7.07% Series, serial preferred stock 25,000 25,000 25,000 Auction rate preferred stock 50,000 50,000 50,000 Total preferred stock 105,066 6 105,811 6 105,968 7
LONG-TERM DEBT: First mortgage bonds: 8.65% Series due 2000 - 80,000 80,000 6.93% Series due 2001 30,000 30,000 30,000 6.85% Series due 2002 27,000 27,000 27,000 6.40% Series due 2003 80,000 80,000 80,000 8 % Series due 2004 50,000 50,000 50,000 5.83% Series due 2005 60,000 60,000 60,000 7.38% Series due 2007 80,000 - - 7.20% Series due 2009 80,000 80,000 - Maturing 2021 through 2031 with rates ranging from 7.5% to 9.52% 230,000 230,000 230,000 Total first mortgage bonds 637,000 637,000 557,000 Amount due within one year (30,000) (80,000) - Net first mortgage bonds 607,000 557,000 557,000 Pollution control revenue bonds: 7 1/4% Series due 2008 - 4,360 4,360 8.30 % Series 1984 due 2014 49,800 49,800 49,800 6.05 % Series 1996A due 2026 68,100 68,100 68,100 Variable Rate Series 1996B due 2026 24,200 24,200 24,200 Variable Rate Series 1996C due 2026 24,000 24,000 24,000 Variable Rate Series 2000 due 2007 4,360 - - Total pollution control revenue bonds 170,460 170,460 170,460 REA notes 1,339 1,415 1,489 Amount due within one year (77) (76) (74) Net REA notes 1,262 1,339 1,415 American Falls bond guarantee 19,885 19,885 20,130 Milner Dam note guarantee 11,700 11,700 11,700 Debt related to investments in affordable housing with rates ranging from 6.03% to 8.77% due 2000 to 2010 - 71,183 62,103 Amount due within one year - (9,025) (5,955) Net affordable housing debt - 62,158 56,148 Other subsidiary debt - 457 623 Unamortized premium/discount - Net (1,330) (1,441) (1,539)
Total long-term debt 808,977 48 821,558 50 815,937 50
TOTAL CAPITALIZATION $1,679,359 100 $1,655,499 100 $1,626,632 100
The accompanying notes are an integral part of these statements.
Idaho Power Company Consolidated Statements of Cash Flows Year Ended December 31, 2000 1999 1998 (Thousands of Dollars)
OPERATING ACTIVITIES: Net income $137,488 $ 97,528 $ 95,919 Adjustments to reconcile net income to net cash: Unrealized (gains) losses from energy marketing activities 21,847 (3,502) - Depreciation and amortization 92,677 95,154 87,044 Deferred taxes and investment tax credits 44,911 (1,747) (10,127) Accrued PCA costs (122,353) (891) 21,658 Change in: Receivables and prepayments (144,077) (489) 1,985 Accrued unbilled revenue (12,831) 2,616 (1,298) Materials and supplies and fuel stock 5,544 (1,050) (911) Accounts payable 156,932 28,397 (10,658) Taxes accrued (8,326) (3,391) 1,312 Other current assets and liabilities (3,572) 4,710 (857) Other - net (6,843) (3,490) (10,340) Net cash provided by operating activities 161,397 213,845 173,727
INVESTING ACTIVITIES: Additions to utility plant (131,711) (108,498) (89,644) Investments in affordable housing projects - (19,554) (19,139) Investments in company - owned life insurance - (5,862) - Net cash of affiliates transferred to parent (4,737) - - Other - net 838 (3,066) 867 Net cash used in investing activities (135,610) (136,980) (107,916)
FINANCING ACTIVITIES: Proceeds from issuance of: First mortgage bonds 80,000 80,000 60,000 Pollution control revenue bonds 4,360 - - Long-term debt related to affordable housing projects - 18,730 20,556 Retirement of: First mortgage bonds (80,000) - (30,000) Pollution control revenue bonds (4,360) - - Long-term debt related to affordable housing projects - (9,650) (4,838) Subsidiary debt - (165) (3,316) Dividends on common stock (69,850) (69,912) (69,889) Dividends on preferred stock (5,929) (5,572) (5,658) Increase (decrease) in short- term borrowings 39,943 (14,607) (18,992) Other - net (1,495) (680) (550) Net cash used in financing activities (37,331) (1,856) (52,687)
Net increase (decrease) in cash and cash equivalents (11,544) 75,009 13,124
Cash and cash equivalents at 95,038 20,029 6,905 beginning of period
Cash and cash equivalents at end of period $ 83,494 $ 95,038 $ 20,029
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Income taxes $ 47,732 $ 50,532 $ 55,527 Interest (net of amount capitalized) $ 58,090 $ 55,186 $ 53,806 Net non-cash assets of affiliates transferred to parent $ 17,353 $ - $ 27,534
The accompanying notes are an integral part of these statements.
Idaho Power Company Consolidated Statements of Retained Earnings
Year Ended December 31, 2000 1999 1998 (Thousands of Dollars)
RETAINED EARNINGS, BEGINNING OF YEAR $274,181 $252,137 $259,299
NET INCOME 137,488 97,528 95,919
Total 411,669 349,665 355,218
DIVIDENDS: Common stock ($1.86 per share) (69,850) (69,912) (69,889) Preferred stock (5,929) (5,572) (5,658)
TRANSFER TO IDACORP, INC. (22,090) - (27,534)
RETAINED EARNINGS, END OF YEAR $313,800 $274,181 $252,137
The accompanying notes are an integral part of these statements.
Consolidated Statements of Comprehensive Income
Year Ended December 31, 2000 1999 1998 (Thousands of Dollars)
NET INCOME $137,488 $ 97,528 $ 95,919
OTHER COMPREHENSIVE INCOME (LOSS): Unrealized gains on securities (net of tax of ($1,713), $677 and $2,185) (2,335) 1,017 3,385 Minimum pension liability adjustment (net of tax of ($78),$189 and ( $2,054)) (119) 291 (3,159)
TOTAL COMPREHENSIVE INCOME $135,034 $ 98,836 $ 96,145
The accompanying notes are an integral part of these statements.
Idaho Power Company
Notes to the Consolidated Financial Statements On October 1, 1998, IDACORP, Inc. (IDACORP)became the parent of Idaho Power Company and subsidiaries (IPC). At that time ownership interests in two of IPC's subsidiaries were transferred to IDACORP at book value. IPC's financial statements include $3.0 million of net income attributable to the transferred subsidiaries for the year ended December 31, 1998.
On January 1, 2000 IPC's ownership interests in two additional subsidiaries were transferred to IDACORP at book value. IPC's financial statements include the following amounts attributable to these transferred subsidiaries for the periods prior to January 1,2000:
As of/Year Ended December 31, 1999 1998
Total assets $107,996 $ 90,029 Net assets 22,090 19,706 Net income 2,385 2,216
Except as modified below,the Notes to the Consolidated Financial Statements of IDACORP included in this 2000 Annual Report on Form 10-K are incorporated herein by reference insofar as they relate to Idaho Power Company.
Note 1 - Summary of Significant Accounting Policies Note 3 - Common Stock Note 4 - Preferred Stock of Idaho Power Company Note 5 - Long-Term Debt Note 7 - Notes Payable Note 8 - Commitments and Contingent Liabilities Note 9 - Stock-Based Compensation Note 10 - Benefit Plans Note 11 - Utility Plant in Service and Jointly-Owned Projects
Note 1 - Derivative Financial Instruments The following table shows a summary of the notional amounts of IPC's forward exposure (including both sales and purchases) as of December 31, 2000 and 1999. The maximum term related to any forward position is ten years.
December 31,2000 December 31,1999 Electricity MWh's
Total gross notional volume 34,453 10,818
The following table displays the fair value ofIPC's energy marketing assets and liabilities (all electricity) at December 31, 2000 and 1999 and the average values for the twelve months ended December 31, 2000 (in thousands of dollars):
Balance at December Twelve Months Balance at December 31, 2000 Average Balance 31, 1999 Assets Liabilities Assets Liabilities Assets Liabilities $1,572,619 $1,590,964 $ 401,956 $ 397,914 $ 29,096 $ 25,594
The gain in fair value of energy trading contract positions (including electricity forwards, futures, options and swaps)included in the income before income taxes for the years ended December 31,2000 and 1999 were $140.3 million and $29.7 million respectively.
Note 2 - Income Taxes IPC has settled Federal and Idaho tax liabilities on all open years through the 1996 tax year except for amounts related to a partnership which have been, in management's opinion, adequately accrued.
A reconciliation between the statutory federal income tax rate and the effective rate is as follows:
2000 1999 1998 (Thousands of Dollars)
Computed income taxes based on statutory federal income tax rate $78,070 $50,077 $49,344 Change in taxes resulting from: AFDC (1,719) (1,071) (420) Investment tax credits (3,083) (3,032) (2,934) Repair allowance (4,550) (2,800) (2,800) Settlement of prior years 2 (478) (1,965) tax returns State income taxes (net of 10,060 6,070 7,630 Federal reduction) Depreciation 8,243 7,292 5,237 Affordable housing tax - (8,934) (6,504) credits Other (1,455) (1,574) (2,523) Total provision for federal and state income taxes $85,568 45,550 45,065 Effective tax rate 38.4% 31.8% 32.0%
The provision for income taxes consists of the following:
2000 1999 1998 (Thousand of Dollars)
Income taxes currently payable: Federal $35,259 $38,169 $45,909 State 5,398 9,128 9,283 Total 40,657 47,297 55,192 Income taxes deferred - Net of amortization: Federal 38,887 2,246 (8,006) State 7,407 (2,030) (1,321) Total 46,294 216 (9,327) Investment tax credits: Deferred 1,700 1,069 2,134 Restored (3,083) (3,032) (2,934) Total (1,383) (1,963) (800) Total provision for income taxes $85,568 $45,550 $45,065
The tax effects of significant items comprising the Company's net deferred tax liability are as follows:
2000 1999 1998 (Thousands of Dollars)
Deferred tax assets: Regulatory liabilities $ 40,230 $ 33,817 $ 28,075 Advances for construction 9,224 9,646 10,401 Other 22,273 18,456 20,457 Total 71,727 61,919 58,933 Deferred tax liabilities: Electric plant 249,546 249,597 247,270 Regulatory assets 213,551 215,675 204,430 Conservation programs 13,561 17,396 16,866 PCA 47,189 (1,826) (2,543) Other 8,955 10,893 16,143 Total 532,802 491,735 482,166
Net deferred tax liabilities $461,075 $429,816 $423,233
Note 6 - Fair Value of Financial Instruments The estimated fair value of the Company's financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
Cash and cash equivalents, customer and other receivables, notes payable, accounts payable, interest accrued, and taxes accrued are reported at their carrying value as these are a reasonable estimate of their fair value. The estimated fair values for long-term debt and investments are based upon quoted market prices of the same or similar issues or discounted cash flow analyses as appropriate.
The total estimated fair value of the Company's debt was approximately $866.3 million in 2000, $898.1 million in 1999, and $877.4 million in 1998.
Note 12- Industry Segment Information The Company has identified two reportable operating segments, Utility Operations and Energy Marketing. The Utility Operations segment has two primary sources of income, the regulated operations of IPC and income from Bridger Coal Company, an unconsolidated joint venture also subject to regulation. IPC's regulated operations include the generation, transmission, distribution purchase and sale of electricity. Energy marketing consists of the Company's unregulated electricity marketing operations and, through December 1998, natural gas marketing.
The Company's other operations include: Ida-West Energy Company - a developer and manager of independent power projects (ownership transferred to parent October 1998); IDACORP Financial Services - an investor in affordable housing (ownership transferred to parent January 2000); Applied Power Company - manufacturer, supplier and distributor of solar photovoltaic systems (ownership transferred to parent January 2000).
The following table summarizes IPC's segment information and reconciles this information to total enterprise amounts:
Utility Energy Consolidated Operations Marketing Other Eliminations Total (Thousands of Dollars) Revenues $ 835,662 $ - $ - $ - $ 835,662 Income from operations 169,636 - - - 169,636 Other income 16,242 94,917 (8) (2,280) 108,871 Interest expense 57,731 - - (2,280) 55,451 Income before income taxes 128,147 94,917 (8) - 223,056 Income taxes 48,174 37,397 (3) - 85,568 Net income 79,973 57,520 (5) - 137,488 Total assets 2,530,312 1,761,611 3,175 - 4,295,098 Expenditures for long-lived assets 131,782 - 299 - 132,081
Revenues $ 658,336 $ - $ - $ - $ 658,336 Income from operations 172,458 - - - 172,458 Other income 14,377 23,206 (6,341) - 31,242 Interest expense 56,679 - 3,943 - 60,622 Income before income taxes 130,156 23,206 (10,284) - 143,078 Income taxes 49,507 9,143 (13,100) - 45,550 Net income 80,649 14,063 2,816 - 97,528 Total assets 2,379,571 72,023 111,158 - 2,562,752 Expenditures for long-lived assets 112,772 - 22,685 - 135,457
Revenues $ 756,410 $ - $ - $ - $ 756,410 Income from operations 180,584 - - - 180,584 Other income 11,897 7,963 233 - 20,093 Interest expense 56,646 - 3,047 - 59,693 Income before income taxes 135,835 7,963 (2,814) - 140,984 Income taxes 49,893 2,787 (7,615) - 45,065 Net income 85,942 5,176 4,801 - 95,919 Total assets 2,266,055 59,245 101,689 - 2,426,989 Expenditures for long-lived assets 91,803 - 19,197 - 111,000
INDEPENDENT AUDITORS' REPORT
To The Board of Directors and Shareowner of Idaho Power Company Boise, Idaho
We have audited the accompanying consolidated balance sheets and statements of capitalization of Idaho Power Company and its subsidiaries as of December 31, 2000, 1999 and 1998, and the related consolidated statements of income, cash flows, retained earnings, and comprehensive income for the years then ended. Our audits also included the consolidated financial statement schedule listed in the Index at Item 8. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Idaho Power Company and subsidiaries at December 31, 2000, 1999 and 1998, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Boise, Idaho February 1, 2001
SUPPLEMENTAL FINANCIAL INFORMATION, UNAUDITED
QUARTERLY FINANCIAL DATA: The following unaudited information is presented for each quarter of 2000, 1999 and 1998 (in thousands of dollars, except for per share amounts). In the opinion of the Companies, all adjustments necessary for a fair statement of such amounts for such periods have been included. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Accordingly, earnings information for any three- month period should not be considered as a basis for estimating operating results for a full fiscal year. Amounts are based upon quarterly statements and the sum of the quarters may not equal the annual amount reported.
IDACORP, INC. Quarter Ended March 31 June 30 September 30 December 31
Revenues $186,273 $254,582 $301,014 $277,483 Income from operations 65,802 64,767 82,379 48,716 Income taxes 23,496 16,211 21,839 9,272 Net income 42,079 32,522 41,561 23,721 Earnings per share of common stock 1.12 0.86 1.11 0.63
Revenues $183,652 $184,427 $182,884 $180,190 Income from operations 62,007 47,474 48,971 40,598 Income taxes 16,700 10,525 10,574 7,874 Net income 29,501 21,242 22,019 18,588 Earnings per share of common stock 0.78 0.56 0.59 0.49
Revenues $177,336 $176,360 $240,329 $201,062 Income from operations 56,843 43,865 48,124 44,591 Income taxes 13,125 9,213 12,392 9,900 Net income 28,050 20,351 22,305 18,468 Earnings per share of common stock 0.75 0.54 0.59 0.49
Idaho Power Company Quarter Ended March 31 June 30 September 30 December 31
Revenues $123,213 $213,081 $231,539 $267,829 Income from operations 55,966 36,139 39,959 37,572 Income taxes 21,024 19,341 28,429 16,774 Net income 33,725 32,154 43,095 28,514 Dividends on preferred stock 1,428 1,484 1,511 1,506 Earnings on common stock 32,297 30,670 41,584 27,008
Revenues $174,149 $165,072 $161,978 $157,136 Income from operations 59,829 39,724 39,942 32,963 Income taxes 16,582 10,479 10,419 8,071 Net income 30,784 22,796 23,371 20,576 Dividends on preferred stock 1,368 1,352 1,401 1,451 Earnings on common stock 29,416 21,444 21,970 19,125
Revenues $170,913 $167,132 $230,200 $188,164 Income from operations 55,769 39,097 44,037 41,681 Income taxes 13,125 9,213 12,392 10,335 Net income 29,455 21,768 23,715 20,979 Dividends on preferred stock 1,405 1,417 1,410 1,426 Earnings on common stock 28,050 20,351 22,305 19,553
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III Part III has been omitted because the registrants will file a definitive proxy statement pursuant to Regulation 14A, which involves the election of Directors, with the Commission within 120 days after the close of the fiscal year portions of which are hereby incorporated by reference (except for information with respect to executive officers which is set forth in Part I hereof).
PART IV
ITEM 14. EXHIBITS,FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K (a) Please refer to Item 8, "Financial Statements and Supplementary Data" for a complete listing of all consolidated financial statements and financial statement schedules. (b) Reports on SEC Form 8-K. The following Report on Form 8-K was filed for the three months ended December 31, 2000
Items Reported Date of Report Filed by Item 7 - Financial Statements and November 21, 2000 IPC Exhibits (c) Exhibits.
*Previously Filed and Incorporated Herein by Reference
Exhibit File Number As Exhibit *2 333-48031 2 Agreement and Plan of Exchange between IDACORP, Inc., and IPC dated as of February 2, 1998.
*3(a) 33-00440 4(a)(xiii) Restated Articles of Incorporation of IPC as filed with the Secretary of State of Idaho on June 30, 1989.
*3(a)(i) 33-65720 4(a)(ii) Statement of Resolution Establishing Terms of Flexible Auction Series A, Serial Preferred Stock, Without Par Value (cumulative stated value of $100,000 per share) of IPC, as filed with the Secretary of State of Idaho on November 5, 1991.
*3(a)(ii) 33-65720 4(a)(iii) Statement of Resolution Establishing Terms of 7.07% Serial Preferred Stock, Without Par Value (cumulative stated value of $100 per share) of IPC, as filed with the Secretary of State of Idaho on June 30, 1993.
*3(a)(iii) 1-3198 3(a)(iii) Articles of Amendment to Restated Form 10-Q Articles of Incorporation of IPC as for 6/30/00 filed with the Secretary of State of Idaho on June 15, 2000.
*3(b) 33-41166 4(b) Waiver resolution to Restated Articles of Incorporation of IPC adopted by Shareholders on May 1, 1991.
*3(c) 1-3198 3(c) By-laws of IPC amended on September Form 10-Q 9, 1999, and presently in effect. for 9/30/99
*3(d) 33-56071 3(d) Articles of Share Exchange, as filed with the Secretary of State of Idaho on September 29, 1998.
*3(e) 333-64737 3.1 Articles of Incorporation of IDACORP, Inc.
*3(f) 333-64737 3.2 Articles of Amendment to Articles of Incorporation of IDACORP, Inc. as filed with the Secretary of State of Idaho on March 9, 1998.
*3(g) 333-00139 3(b) Articles of Amendment to Articles of Incorporation of IDACORP, Inc. creating A Series Preferred Stock, without par value, as filed with the Secretary of State of Idaho on September 17, 1998.
*3(h) 1-14465 3(c) Amended Bylaws of IDACORP, Inc. as Form 10-Q of July 8, 1999. for 6/30/99
*4(a)(i) 2-3413 B-2 Mortgage and Deed of Trust, dated as of October 1, 1937, between IPC and Bankers Trust Company and R. G. Page, as Trustees.
*4(a)(ii) IPC Supplemental Indentures to Mortgage and Deed of Trust: Number Dated 1-MD B-2-a First July 1, 1939 2-5395 7-a-3 Second November 15, 1943 2-7237 7-a-4 Third February 1, 1947 2-7502 7-a-5 Fourth May 1, 1948 2-8398 7-a-6 Fifth November 1, 1949 2-8973 7-a-7 Sixth October 1, 1951 2-12941 2-C-8 Seventh January 1, 1957 2-13688 4-J Eighth July 15, 1957 2-13689 4-K Ninth November 15, 1957 2-14245 4-L Tenth April 1, 1958 2-14366 2-L Eleventh October 15, 1958 2-14935 4-N Twelfth May 15, 1959 2-18976 4-O Thirteenth November 15, 1960 2-18977 4-Q Fourteenth November 1, 1961 2-22988 4-B-16 Fifteenth September 15, 1964 2-24578 4-B-17 Sixteenth April 1, 1966 2-25479 4-B-18 Seventeenth October 1, 1966 2-45260 2(c) Eighteenth September 1, 1972 2-49854 2(c) Nineteenth January 15, 1974 2-51722 2(c)(i) Twentieth August 1, 1974 2-51722 2(c)(ii) Twenty-first October 15, 1974 2-57374 2(c) Twenty-second November 15, 1976 2-62035 2(c) Twenty-third August 15, 1978 33-34222 4(d)(iii) Twenty-fourth September 1, 1979 33-34222 4(d)(iv) Twenty-fifth November 1, 1981 33-34222 4(d)(v) Twenty-sixth May 1, 1982 33-34222 4(d)(vi) Twenty-seventh May 1, 1986 33-00440 4(c)(iv) Twenty-eighth June 30, 1989 33-34222 4(d)(vii) Twenty-ninth January 1, 1990 33-65720 4(d)(iii) Thirtieth January 1, 1991 33-65720 4(d)(iv) Thirty-first August 15, 1991 33-65720 4(d)(v) Thirty-second March 15, 1992 33-65720 4(d)(vi) Thirty-third April 1, 1993
1-3198 4 Thirty-fourth December 1, 1993 Form 8-K Dated 12/17/93
1-3198 Thirty-fifth November 1, 2000 Form 8-K Dated 11/21/00
*4(b) 1-3198 4(b) Instruments relating to IPC American Form 10-Q Falls bond guarantee (see Exhibit for 6/30/00 10(c)).
*4(c) 33-65720 4(f) Agreement of IPC to furnish certain debt instruments.
*4(d) 33-00440 2(a)(iii) Agreement and Plan of Merger dated March 10, 1989, between Idaho Power Company, a Maine Corporation, and Idaho Power Migrating Corporation.
*4(e) 1-14465 4 Rights Agreement, dated as of Form 8-K September 10, 1998, between IDACORP, dated Inc. and the Bank of New York as September Rights Agent. 15, 1998
*10(a) 2-49584 5(b) Agreements, dated September 22, 1969, between IPC and Pacific Power & Light Company relating to the operation, construction and ownership of the Jim Bridger Project.
*10(a)(i) 2-51762 5(c) Amendment, dated February 1, 1974, relating to operation agreement filed as Exhibit 10(a).
*10(b) 2-49584 5(c) Agreement, dated as of October 11, 1973, between IPC and Pacific Power & Light Company.
*10(c) 1-3198 10(c) Guaranty Agreement, dated April 11, Form 10-Q 2000, between IPC and Bank One Trust for 6/30/00 Company, N.A., as Trustee, relating to $19,885,000 American Falls Replacement Dam Refinancing Bonds of the American Falls Reservoir District, Idaho.
*10(d) 2-62034 5(r) Guaranty Agreement, dated as of August 30, 1974, between IPC and Pacific Power & Light Company.
*10(e) 2-56513 5(i) Letter Agreement, dated January 23, 1976, between IPC and Portland General Electric Company.
*10(e)(i) 2-62034 5(s) Agreement for Construction, Ownership and Operation of the Number One Boardman Station on Carty Reservoir, dated as of October 15, 1976, between Portland General Electric Company and IPC.
*10(e)(ii) 2-62034 5(t) Amendment, dated September 30, 1977, relating to agreement filed as Exhibit 10(e).
*10(e)(iii) 2-62034 5(u) Amendment, dated October 31, 1977, relating to agreement filed as Exhibit 10(e).
*10(e)(iv) 2-62034 5(v) Amendment, dated January 23, 1978, relating to agreement filed as Exhibit 10(e).
*10(e)(v) 2-62034 5(w) Amendment, dated February 15, 1978, relating to agreement filed as Exhibit 10(e).
*10(e)(vi) 2-68574 5(x) Amendment, dated September 1, 1979, relating to agreement filed as Exhibit 10(e).
*10(f) 2-68574 5(z) Participation Agreement, dated September 1, 1979, relating to the sale and leaseback of coal handling facilities at the Number One Boardman Station on Carty Reservoir.
*10(g) 2-64910 5(y) Agreements for the Operation, Construction and Ownership of the North Valmy Power Plant Project, dated December 12, 1978, between Sierra Pacific Power Company and IPC.
*10(h)(i)1 1-3198 10(n)(i) The Revised Security Plan for Senior Form 10-K Management Employees- a non-qualified, deferred compensation plan effective August 1, 1996.
*10(h)(ii)1 1-3198 10(n)(ii) The Executive Annual Incentive Plan Form 10-K for senior management employees of for 1994 IPC effective January 1, 1995.
*10(h)(iii)1 1-3198 10(n)(iii) The 1994 Restricted Stock Plan for Form 10-K officers and key executives of for 1994 IDACORP, Inc. and IPC effective July 1, 1994.
*10(h)(iv)1 1-14465 10(h)(iv) The Revised Security Plan for Board 1-3198 of Directors - a non-qualified, Form 10-K deferred compensation plan effective for 1998 August 1, 1996, revised March 2, 1999.
*10(h)(v)1 1-14465 10(e) IDACORP, Inc. Non-Employee Directors Form 10-Q Stock Compensation Plan as of May for 6/30/99 17, 1999.
*10(h)(vi) 1-3198 10(y) Executive Employment Agreement dated Form 10-K November 20, 1996 between IPC and for 1997 Richard R. Riazzi.
*10(h)(vii) 1-3198 10(g) Executive Employment Agreement dated Form 10-Q April 12, 1999 between IPC and for 6/30/99 Marlene Williams.
*10(h)(viii) 1-14465 10(h) Agreement between IDACORP, Inc. and Form 10-Q Jan B. Packwood, J. LaMont Keen, for 9/30/99 James C. Miller, Richard Riazzi, Darrel T. Anderson, Bryan Kearney, Cliff N. Olson, Robert W. Stahman and Marlene K. Williams.
*10(h)(ix)1 1-14465 10(h)(ix) IDACORP, Inc. 2000 Long-Term Form 10-K Incentive and Compensation Plan. for 1999
*10(i) 33-65720 10(h) Framework Agreement, dated October 1, 1984, between the State of Idaho and IPC relating to IPC's Swan Falls and Snake River water rights.
*10(i)(i) 33-65720 10(h)(i) Agreement, dated October 25, 1984, between the State of Idaho and IPC relating to the agreement filed as Exhibit 10(i).
*10(i)(ii) 33-65720 10(h)(ii) Contract to Implement, dated October 25, 1984, between the State of Idaho and IPC relating to the agreement filed as Exhibit 10(i).
*10(j) 33-65720 10(m) Agreement Regarding the Ownership, Construction, Operation and Maintenance of the Milner Hydroelectric Project (FERC No. 2899), dated January 22, 1990, between IPC and the Twin Falls Canal Company and the Northside Canal Company Limited.
*10(j)(i) 33-65720 10(m)(i) Guaranty Agreement, dated February 10, 1992, between IPC and New York Life Insurance Company, as Note Purchaser, relating to $11,700,000 Guaranteed Notes due 2017 of Milner Dam Inc.
12 Statement Re: Computation of Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(a) Statement Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(b) Statement Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(c) Statement Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(d) Statement Re: Computation of Ratio of Earnings to Fixed Charges. (IPC)
12(e) Statement Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IPC)
12(f) Statement Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
12(g) Statement Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
21 Subsidiaries of IDACORP, Inc. and IPC.
23 Independent Auditors' Consent.
________________________ 1 Compensatory plan
IDACORP, Inc. SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2000, 1999 and 1998
Column A Column B Column C Column D Column E Additions Balance Charged At Charged (Credited) Balance Beginning to to Other At End Classification Of Period Income Accounts Deduction(1) Of Period (Thousands of Dollars) 5319: 2000: Reserves Deducted From Applicable Assets: Reserve for uncollectible accounts and assets $1,397 $21,682 $ 1,658(2) $ 1,658 $23,079 Other Reserves: Rate refunds $8,893 $ 3,505 $ - $12,398 $ - Injuries and damages reserve $1,500 $ - $ - $ - $ 1,500 Miscellaneous operating reserves $8,473 $ 306 $ - $ 4,123 $ 4,656 5332: 1999: Reserves Deducted From Applicable Assets: Reserve for uncollectible accounts $1,397 $ - $ 3,162(2) $ 3,162 $ 1,397 Other Reserves: Rate refunds $5,356 $10,543 $ - $ 7,006 $ 8,893 Injuries and damages reserve $1,500 $ - $ - $ - $ 1,500 Miscellaneous operating reserves $6,907 $ 3,242 $ - $ 1,676 $ 8,473
1998: Reserves Deducted From Applicable Assets: Reserve for uncollectible accounts $1,397 $ - $ 3,299(2) $ 3,299 $ 1,397 Other Reserves: Rate refunds $8,740 $ 4,188 $ - $ 7,572 $ 5,356 Injuries and damages reserve $1,500 $ - $ - $ - $ 1,500 Miscellaneous operating reserves $8,388 $ 512 $ - $ 1,993 $ 6,907 5359:
Notes: (1) Represents deductions from the reserves for purposes for which the reserves were created. (2) Represents collections of accounts previously written off.
IDAHO POWER COMPANY SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2000, 1999 and 1998
Amounts for Idaho Power Company are same as the above Schedule II for IDACORP, Inc.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IDACORP, Inc. (Registrant)
March 16, 2001 By: /s/Jan B. Packwood Jan B. Packwood President and Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:/s/ Jon H. Miller Chairman of the Board March 16, Jon H. Miller
By:/s/ Jan B. Packwood President and Chief " Executive Officer Jan B. Packwood and Director
By:/s/ J. LaMont Keen Senior Vice President - " Administration J. LaMont Keen and Chief Financial Officer (Principal Financial Officer)
By:/s/ Darrel T. Anderson Vice President - Finance " and Treasurer Darrel T. Anderson (Principal Accounting Officer)
By:/s/ Rotchford L. Barker By:/s/ Jack K. Lemley "
Rotchford L. Barker Jack K. Lemley Director Director
By:/s/ Robert D. Bolinder By:/s/ Evelyn Loveless "
Robert D. Bolinder Evelyn Loveless Director Director
By:/s/ John B. Carley By:/s/ Peter S. O'Neill "
John B. Carley Peter S. O'Neill Director Director
By:/s/ Peter T. Johnson By:/s/ Robert A. Tinstman "
Peter T. Johnson Robert A. Tinstman Director Director
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IDAHO POWER COMPANY (Registrant)
March 16, 2001 By:/s/Jan B. Packwood Jan B. Packwood President and Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:/s/ Jon H. Miller Chairman of the Board March 16, Jon H. Miller
By:/s/ Jan B. Packwood President and Chief " Executive Jan B. Packwood Officer and Director
By:/s/ J. LaMont Keen Senior Vice President - " Administration J. LaMont Keen and Chief Financial Officer (Principal Financial Officer)
By:/s/ Darrel T. Anderson Vice President - Finance " and Treasurer Darrel T. Anderson (Principal Accounting Officer)
By:/s/ Rotchford L. Barker By:/s/ Jack K. Lemley "
Rotchford L. Barker Jack K. Lemley Director Director
By:/s/ Robert D. Bolinder By:/s/ Evelyn Loveless "
Robert D. Bolinder Evelyn Loveless Director Director
By:/s/ John B. Carley By:/s/ Peter S. O'Neill "
John B. Carley Peter S. O'Neill Director Director
By:/s/ Peter T. Johnson By:/s/ Robert A. Tinstman "
Peter T. Johnson Robert A. Tinstman Director Director
EXHIBIT INDEX
Exhibit Page Number Number 10(h)(ix) IDACORP, Inc. 2000 Long-Term Incentive and Compensation Plan.
12 Statements Re: Computation of Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(a) Statements Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(b) Statements Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(c) Statements Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(d) Statements Re: Computation of Ratio of Earnings to Fixed Charges. (IPC)
12(e) Statements Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IPC)
12(f) Statements Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
12(g) Statements Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
21 Subsidiaries of IDACORP, Inc. and IPC
23 Independent Auditors' Consent.
ITEM 14. EXHIBITS,FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K (a) Please refer to Item 8, "Financial Statements and Supplementary Data" for a complete listing of all consolidated financial statements and financial statement schedules. (b) Reports on SEC Form 8-K. The following Report on Form 8-K was filed for the three months ended December 31, 2000
Items Reported Date of Report Filed by Item 7 - Financial Statements and November 21, 2000 IPC Exhibits (c) Exhibits.
*Previously Filed and Incorporated Herein by Reference
Exhibit File Number As Exhibit *2 333-48031 2 Agreement and Plan of Exchange between IDACORP, Inc., and IPC dated as of February 2, 1998.
*3(a) 33-00440 4(a)(xiii) Restated Articles of Incorporation of IPC as filed with the Secretary of State of Idaho on June 30, 1989.
*3(a)(i) 33-65720 4(a)(ii) Statement of Resolution Establishing Terms of Flexible Auction Series A, Serial Preferred Stock, Without Par Value (cumulative stated value of $100,000 per share) of IPC, as filed with the Secretary of State of Idaho on November 5, 1991.
*3(a)(ii) 33-65720 4(a)(iii) Statement of Resolution Establishing Terms of 7.07% Serial Preferred Stock, Without Par Value (cumulative stated value of $100 per share) of IPC, as filed with the Secretary of State of Idaho on June 30, 1993.
*3(a)(iii) 1-3198 3(a)(iii) Articles of Amendment to Restated Form 10-Q Articles of Incorporation of IPC as for 6/30/00 filed with the Secretary of State of Idaho on June 15, 2000.
*3(b) 33-41166 4(b) Waiver resolution to Restated Articles of Incorporation of IPC adopted by Shareholders on May 1, 1991.
*3(c) 1-3198 3(c) By-laws of IPC amended on September Form 10-Q 9, 1999, and presently in effect. for 9/30/99
*3(d) 33-56071 3(d) Articles of Share Exchange, as filed with the Secretary of State of Idaho on September 29, 1998.
*3(e) 333-64737 3.1 Articles of Incorporation of IDACORP, Inc.
*3(f) 333-64737 3.2 Articles of Amendment to Articles of Incorporation of IDACORP, Inc. as filed with the Secretary of State of Idaho on March 9, 1998.
*3(g) 333-00139 3(b) Articles of Amendment to Articles of Incorporation of IDACORP, Inc. creating A Series Preferred Stock, without par value, as filed with the Secretary of State of Idaho on September 17, 1998.
*3(h) 1-14465 3(c) Amended Bylaws of IDACORP, Inc. as Form 10-Q of July 8, 1999. for 6/30/99
*4(a)(i) 2-3413 B-2 Mortgage and Deed of Trust, dated as of October 1, 1937, between IPC and Bankers Trust Company and R. G. Page, as Trustees.
*4(a)(ii) IPC Supplemental Indentures to Mortgage and Deed of Trust: Number Dated 1-MD B-2-a First July 1, 1939 2-5395 7-a-3 Second November 15, 1943 2-7237 7-a-4 Third February 1, 1947 2-7502 7-a-5 Fourth May 1, 1948 2-8398 7-a-6 Fifth November 1, 1949 2-8973 7-a-7 Sixth October 1, 1951 2-12941 2-C-8 Seventh January 1, 1957 2-13688 4-J Eighth July 15, 1957 2-13689 4-K Ninth November 15, 1957 2-14245 4-L Tenth April 1, 1958 2-14366 2-L Eleventh October 15, 1958 2-14935 4-N Twelfth May 15, 1959 2-18976 4-O Thirteenth November 15, 1960 2-18977 4-Q Fourteenth November 1, 1961 2-22988 4-B-16 Fifteenth September 15, 1964 2-24578 4-B-17 Sixteenth April 1, 1966 2-25479 4-B-18 Seventeenth October 1, 1966 2-45260 2(c) Eighteenth September 1, 1972 2-49854 2(c) Nineteenth January 15, 1974 2-51722 2(c)(i) Twentieth August 1, 1974 2-51722 2(c)(ii) Twenty-first October 15, 1974 2-57374 2(c) Twenty-second November 15, 1976 2-62035 2(c) Twenty-third August 15, 1978 33-34222 4(d)(iii) Twenty-fourth September 1, 1979 33-34222 4(d)(iv) Twenty-fifth November 1, 1981 33-34222 4(d)(v) Twenty-sixth May 1, 1982 33-34222 4(d)(vi) Twenty-seventh May 1, 1986 33-00440 4(c)(iv) Twenty-eighth June 30, 1989 33-34222 4(d)(vii) Twenty-ninth January 1, 1990 33-65720 4(d)(iii) Thirtieth January 1, 1991 33-65720 4(d)(iv) Thirty-first August 15, 1991 33-65720 4(d)(v) Thirty-second March 15, 1992 33-65720 4(d)(vi) Thirty-third April 1, 1993
1-3198 4 Thirty-fourth December 1, 1993 Form 8-K Dated 12/17/93
1-3198 Thirty-fifth November 1, 2000 Form 8-K Dated 11/21/00
*4(b) 1-3198 4(b) Instruments relating to IPC American Form 10-Q Falls bond guarantee (see Exhibit for 6/30/00 10(c)).
*4(c) 33-65720 4(f) Agreement of IPC to furnish certain debt instruments.
*4(d) 33-00440 2(a)(iii) Agreement and Plan of Merger dated March 10, 1989, between Idaho Power Company, a Maine Corporation, and Idaho Power Migrating Corporation.
*4(e) 1-14465 4 Rights Agreement, dated as of Form 8-K September 10, 1998, between IDACORP, dated Inc. and the Bank of New York as September Rights Agent. 15, 1998
*10(a) 2-49584 5(b) Agreements, dated September 22, 1969, between IPC and Pacific Power & Light Company relating to the operation, construction and ownership of the Jim Bridger Project.
*10(a)(i) 2-51762 5(c) Amendment, dated February 1, 1974, relating to operation agreement filed as Exhibit 10(a).
*10(b) 2-49584 5(c) Agreement, dated as of October 11, 1973, between IPC and Pacific Power & Light Company.
*10(c) 1-3198 10(c) Guaranty Agreement, dated April 11, Form 10-Q 2000, between IPC and Bank One Trust for 6/30/00 Company, N.A., as Trustee, relating to $19,885,000 American Falls Replacement Dam Refinancing Bonds of the American Falls Reservoir District, Idaho.
*10(d) 2-62034 5(r) Guaranty Agreement, dated as of August 30, 1974, between IPC and Pacific Power & Light Company.
*10(e) 2-56513 5(i) Letter Agreement, dated January 23, 1976, between IPC and Portland General Electric Company.
*10(e)(i) 2-62034 5(s) Agreement for Construction, Ownership and Operation of the Number One Boardman Station on Carty Reservoir, dated as of October 15, 1976, between Portland General Electric Company and IPC.
*10(e)(ii) 2-62034 5(t) Amendment, dated September 30, 1977, relating to agreement filed as Exhibit 10(e).
*10(e)(iii) 2-62034 5(u) Amendment, dated October 31, 1977, relating to agreement filed as Exhibit 10(e).
*10(e)(iv) 2-62034 5(v) Amendment, dated January 23, 1978, relating to agreement filed as Exhibit 10(e).
*10(e)(v) 2-62034 5(w) Amendment, dated February 15, 1978, relating to agreement filed as Exhibit 10(e).
*10(e)(vi) 2-68574 5(x) Amendment, dated September 1, 1979, relating to agreement filed as Exhibit 10(e).
*10(f) 2-68574 5(z) Participation Agreement, dated September 1, 1979, relating to the sale and leaseback of coal handling facilities at the Number One Boardman Station on Carty Reservoir.
*10(g) 2-64910 5(y) Agreements for the Operation, Construction and Ownership of the North Valmy Power Plant Project, dated December 12, 1978, between Sierra Pacific Power Company and IPC.
*10(h)(i)1 1-3198 10(n)(i) The Revised Security Plan for Senior Form 10-K Management Employees- a non-qualified, deferred compensation plan effective August 1, 1996.
*10(h)(ii)1 1-3198 10(n)(ii) The Executive Annual Incentive Plan Form 10-K for senior management employees of for 1994 IPC effective January 1, 1995.
*10(h)(iii)1 1-3198 10(n)(iii) The 1994 Restricted Stock Plan for Form 10-K officers and key executives of for 1994 IDACORP, Inc. and IPC effective July 1, 1994.
*10(h)(iv)1 1-14465 10(h)(iv) The Revised Security Plan for Board 1-3198 of Directors - a non-qualified, Form 10-K deferred compensation plan effective for 1998 August 1, 1996, revised March 2, 1999.
*10(h)(v)1 1-14465 10(e) IDACORP, Inc. Non-Employee Directors Form 10-Q Stock Compensation Plan as of May for 6/30/99 17, 1999.
*10(h)(vi) 1-3198 10(y) Executive Employment Agreement dated Form 10-K November 20, 1996 between IPC and for 1997 Richard R. Riazzi.
*10(h)(vii) 1-3198 10(g) Executive Employment Agreement dated Form 10-Q April 12, 1999 between IPC and for 6/30/99 Marlene Williams.
*10(h)(viii) 1-14465 10(h) Agreement between IDACORP, Inc. and Form 10-Q Jan B. Packwood, J. LaMont Keen, for 9/30/99 James C. Miller, Richard Riazzi, Darrel T. Anderson, Bryan Kearney, Cliff N. Olson, Robert W. Stahman and Marlene K. Williams.
*10(h)(ix)1 1-14465 10(h)(ix) IDACORP, Inc. 2000 Long-Term Form 10-K Incentive and Compensation Plan. for 1999
*10(i) 33-65720 10(h) Framework Agreement, dated October 1, 1984, between the State of Idaho and IPC relating to IPC's Swan Falls and Snake River water rights.
*10(i)(i) 33-65720 10(h)(i) Agreement, dated October 25, 1984, between the State of Idaho and IPC relating to the agreement filed as Exhibit 10(i).
*10(i)(ii) 33-65720 10(h)(ii) Contract to Implement, dated October 25, 1984, between the State of Idaho and IPC relating to the agreement filed as Exhibit 10(i).
*10(j) 33-65720 10(m) Agreement Regarding the Ownership, Construction, Operation and Maintenance of the Milner Hydroelectric Project (FERC No. 2899), dated January 22, 1990, between IPC and the Twin Falls Canal Company and the Northside Canal Company Limited.
*10(j)(i) 33-65720 10(m)(i) Guaranty Agreement, dated February 10, 1992, between IPC and New York Life Insurance Company, as Note Purchaser, relating to $11,700,000 Guaranteed Notes due 2017 of Milner Dam Inc.
12 Statement Re: Computation of Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(a) Statement Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(b) Statement Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(c) Statement Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(d) Statement Re: Computation of Ratio of Earnings to Fixed Charges. (IPC)
12(e) Statement Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IPC)
12(f) Statement Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
12(g) Statement Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
21 Subsidiaries of IDACORP, Inc. and IPC.
23 Independent Auditors' Consent.
________________________ 1 Compensatory plan
IDACORP, Inc. SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2000, 1999 and 1998
Column A Column B Column C Column D Column E Additions Balance Charged At Charged (Credited) Balance Beginning to to Other At End Classification Of Period Income Accounts Deduction(1) Of Period (Thousands of Dollars) 5319: 2000: Reserves Deducted From Applicable Assets: Reserve for uncollectible accounts and assets $1,397 $21,682 $ 1,658(2) $ 1,658 $23,079 Other Reserves: Rate refunds $8,893 $ 3,505 $ - $12,398 $ - Injuries and damages reserve $1,500 $ - $ - $ - $ 1,500 Miscellaneous operating reserves $8,473 $ 306 $ - $ 4,123 $ 4,656 5332: 1999: Reserves Deducted From Applicable Assets: Reserve for uncollectible accounts $1,397 $ - $ 3,162(2) $ 3,162 $ 1,397 Other Reserves: Rate refunds $5,356 $10,543 $ - $ 7,006 $ 8,893 Injuries and damages reserve $1,500 $ - $ - $ - $ 1,500 Miscellaneous operating reserves $6,907 $ 3,242 $ - $ 1,676 $ 8,473
1998: Reserves Deducted From Applicable Assets: Reserve for uncollectible accounts $1,397 $ - $ 3,299(2) $ 3,299 $ 1,397 Other Reserves: Rate refunds $8,740 $ 4,188 $ - $ 7,572 $ 5,356 Injuries and damages reserve $1,500 $ - $ - $ - $ 1,500 Miscellaneous operating reserves $8,388 $ 512 $ - $ 1,993 $ 6,907 5359:
Notes: (1) Represents deductions from the reserves for purposes for which the reserves were created. (2) Represents collections of accounts previously written off.
IDAHO POWER COMPANY SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2000, 1999 and 1998
Amounts for Idaho Power Company are same as the above Schedule II for IDACORP, Inc.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IDACORP, Inc. (Registrant)
March 16, 2001 By: /s/Jan B. Packwood Jan B. Packwood President and Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:/s/ Jon H. Miller Chairman of the Board March 16, Jon H. Miller
By:/s/ Jan B. Packwood President and Chief " Executive Officer Jan B. Packwood and Director
By:/s/ J. LaMont Keen Senior Vice President - " Administration J. LaMont Keen and Chief Financial Officer (Principal Financial Officer)
By:/s/ Darrel T. Anderson Vice President - Finance " and Treasurer Darrel T. Anderson (Principal Accounting Officer)
By:/s/ Rotchford L. Barker By:/s/ Jack K. Lemley "
Rotchford L. Barker Jack K. Lemley Director Director
By:/s/ Robert D. Bolinder By:/s/ Evelyn Loveless "
Robert D. Bolinder Evelyn Loveless Director Director
By:/s/ John B. Carley By:/s/ Peter S. O'Neill "
John B. Carley Peter S. O'Neill Director Director
By:/s/ Peter T. Johnson By:/s/ Robert A. Tinstman "
Peter T. Johnson Robert A. Tinstman Director Director
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IDAHO POWER COMPANY (Registrant)
March 16, 2001 By:/s/Jan B. Packwood Jan B. Packwood President and Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:/s/ Jon H. Miller Chairman of the Board March 16, Jon H. Miller
By:/s/ Jan B. Packwood President and Chief " Executive Jan B. Packwood Officer and Director
By:/s/ J. LaMont Keen Senior Vice President - " Administration J. LaMont Keen and Chief Financial Officer (Principal Financial Officer)
By:/s/ Darrel T. Anderson Vice President - Finance " and Treasurer Darrel T. Anderson (Principal Accounting Officer)
By:/s/ Rotchford L. Barker By:/s/ Jack K. Lemley "
Rotchford L. Barker Jack K. Lemley Director Director
By:/s/ Robert D. Bolinder By:/s/ Evelyn Loveless "
Robert D. Bolinder Evelyn Loveless Director Director
By:/s/ John B. Carley By:/s/ Peter S. O'Neill "
John B. Carley Peter S. O'Neill Director Director
By:/s/ Peter T. Johnson By:/s/ Robert A. Tinstman "
Peter T. Johnson Robert A. Tinstman Director Director
EXHIBIT INDEX
Exhibit Page Number Number 10(h)(ix) IDACORP, Inc. 2000 Long-Term Incentive and Compensation Plan.
12 Statements Re: Computation of Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(a) Statements Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IDACORP, Inc.)
12(b) Statements Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(c) Statements Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IDACORP, Inc.)
12(d) Statements Re: Computation of Ratio of Earnings to Fixed Charges. (IPC)
12(e) Statements Re: Computation of Supplemental Ratio of Earnings to Fixed Charges. (IPC)
12(f) Statements Re: Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
12(g) Statements Re: Computation of Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements. (IPC)
21 Subsidiaries of IDACORP, Inc. and IPC
23 Independent Auditors' Consent.