UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Exact name of registrants as specified in their charters, I.R.S. Commission state of incorporation, address Employer File of principal executive offices, Identification Number and telephone number Number 1-14465 IDACORP, Inc. 82-0505802 1-3198 Idaho Power Company 82-0130980 1221 W. Idaho Street Boise, ID 83702-5627 Telephone: (208) 388-2200 State of Incorporation: Idaho Web site: www.idacorpinc.com None Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Number of shares of Common Stock outstanding as of March 31, 2001: IDACORP, Inc.: 37,412,351 Idaho Power Company: 37,612,351 shares, all of which are held by IDACORP, Inc. This combined Form 10-Q represents separate filings by IDACORP, Inc. and Idaho Power Company. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Idaho Power Company makes no representations as to the information relating to IDACORP, Inc.'s other operations. INDEX Page Definitions 2 Part I. Financial Information: Item 1. Financial Statements IDACORP, Inc.: Consolidated Statements of Income 3 Consolidated Balance Sheets 4-5 Consolidated Statements of Capitalization 6 Consolidated Statements of Cash Flows 7 Consolidated Statements of Comprehensive Income 8 Notes to Consolidated Financial Statements 9-14 Independent Accountants' Report 15 Idaho Power Company: Consolidated Statements of Income 16 Consolidated Balance Sheets 17-18 Consolidated Statements of Capitalization 19 Consolidated Statements of Cash Flows 20 Consolidated Statements of Comprehensive Income 21 Notes to Consolidated Financial Statements 22-23 Independent Accountants' Report 24 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25-34 Item 3. Quantitative and Qualitative Disclosures about Market Risk 34 Part II. Other Information: Item 2. Changes in Securities and Use of Proceeds 35 Item 6. Exhibits and Reports on Form 8-K 35-39 Signatures 40-41 DEFINITIONS FASB - Financial Accounting Standards Board FERC - Federal Energy Regulatory Commission IPUC - Idaho Public Utilities Commission kWh - kilowatt-hour MAF - Million Acre-Feet MMbtu - Million British Thermal Units MWH - Megawatt-hour OPUC - Oregon Public Utility Commission PCA - Power Cost Adjustment PUCN - Public Utility Commission of Nevada REA - Rural Electrification Administration SFAS - Statement of Financial Accounting Standards FORWARD LOOKING INFORMATION This Form 10-Q contains "forward-looking statements" intended to qualify for the 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-Q at Part I, Item 2. 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. PART I - FINANCIAL INFORMATION Item 1. Financial Statements IDACORP, Inc. Consolidated Statements of Income Three Months Ended March 31, 2001 2000 (Thousands of Dollars Except for Per Share Amounts) OPERATING REVENUES: Electric Utility: General business $133,121 $123,213 Off system sales 55,249 35,925 Other revenues 11,946 7,195 Total electric utility revenues 200,316 166,333 Diversified Operations: Energy marketing 82,632 11,253 Other 2,772 4,544 Total diversified operations revenues 85,404 15,797 Earnings of unconsolidated partnerships, joint ventures and subsidiaries 2,525 4,143 Total operating revenues 288,245 186,273 OPERATING EXPENSES: Electric Utility: Purchased power 125,287 12,890 Fuel expense 25,247 24,659 Power cost adjustment (58,246) 3,258 Other operations and maintenance 49,147 44,246 Depreciation 20,952 19,887 Taxes other than income taxes 5,235 5,427 Total electric utility expenses 167,622 110,367 Diversified Operations: Energy marketing 44,127 2,754 Other 8,659 7,350 Total diversified operations expenses 52,786 10,104 Total operating expenses 220,408 120,471 OPERATING INCOME 67,837 65,802 OTHER INCOME: Allowance for equity funds used during construction 225 456 Gain on sale of asset - 14,000 Other - net 2,109 2,117 Total other income 2,334 16,573 INTEREST EXPENSE AND OTHER: Interest on long-term debt 13,449 13,162 Other interest 4,373 2,697 Allowance for borrowed funds used during construction (1,164) (487) Preferred dividends of Idaho Power Company 1,461 1,428 Total interest expense and other 18,119 16,800 INCOME BEFORE INCOME TAXES 52,052 65,575 INCOME TAXES 17,282 23,496 NET INCOME $ 34,770 $ 42,079 AVERAGE COMMON SHARES OUTSTANDING (000's) 37,415 37,612 EARNINGS PER SHARE OF COMMON STOCK (basic and diluted) $ 0.93 $ 1.12 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Balance Sheets Assets March 31, December 31, 2001 2000 (Thousands of Dollars) CURRENT ASSETS: Cash and cash equivalents $ 30,263 $ 106,795 Receivables: Customer 263,839 243,647 Allowance for uncollectible accounts (43,253) (23,079) Employee notes 4,515 4,742 Other 15,848 15,611 Energy marketing assets 706,714 1,060,128 Derivative assets 128,304 - Taxes receivable 16,035 - Accrued unbilled revenues 29,857 44,825 Materials and supplies (at average cost) 30,513 29,731 Fuel stock (at average cost) 8,150 5,105 Prepayments 27,127 24,575 Regulatory assets associated with income taxes 12,823 8,672 Regulatory assets - derivatives 40,455 - Total current assets 1,271,190 1,520,752 INVESTMENTS AND OTHER ASSETS 154,437 157,068 PROPERTY, PLANT AND EQUIPMENT Utility plant in service 2,842,782 2,799,874 Accumulated provision for depreciation (1,163,037) (1,142,572) Utility plant in service - net 1,679,745 1,657,302 Construction work in progress 145,401 136,388 Utility plant held for future use 2,166 2,167 Other property, net of accumulated depreciation 11,918 9,179 Property, plant and equipment - net 1,839,230 1,805,036 DEFERRED DEBITS: American Falls and Milner water rights 31,585 31,585 Company-owned life insurance 39,625 39,554 Energy marketing assets - long- term 127,657 43,556 Regulatory assets associated with income taxes 202,462 204,880 Regulatory assets - PCA 179,847 119,905 Regulatory assets - long-term derivatives 42,503 - Regulatory assets - other 44,055 45,750 Other 68,808 71,620 Total deferred debits 736,542 556,850 TOTAL $4,001,399 $4,039,706 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Balance Sheets Liabilities and Capitalization March 31, December 31, 2001 2000 (Thousands of Dollars) CURRENT LIABILITIES: Current maturities of long-term debt $ 38,773 $ 39,774 Notes payable 216,800 120,600 Accounts payable 224,676 272,376 Energy marketing liabilities 613,950 1,060,180 Derivative liabilities 168,759 - Taxes accrued - 15,631 Interest accrued 19,881 16,985 Deferred income taxes 12,823 8,672 Other 24,495 28,104 Total current liabilities 1,320,157 1,562,322 DEFERRED CREDITS: Deferred income taxes 518,605 460,464 Energy marketing liabilities - long-term 102,425 46,769 Derivative liabilities - long- term 42,503 - Regulatory liabilities associated with deferred investment tax credits 66,409 66,050 Regulatory liabilities associated with income taxes 40,539 40,230 Regulatory liabilities - other 4,668 4,621 Other 67,548 69,259 Total deferred credits 842,697 687,393 LONG-TERM DEBT 905,024 864,114 COMMITMENTS AND CONTINGENT LIABILITIES PREFERRED STOCK OF IDAHO POWER 104,766 105,066 COMPANY COMMON STOCK EQUITY: Common stock, no par value (shares authorized 120,000,000; 37,612,351 shares issued) 452,122 453,102 Retained earnings 387,445 370,126 Accumulated other comprehensive income (loss) (2,768) (921) Treasury stock (200,000 and 44,425 shares at cost, respectively) (8,044) (1,496) Total common stock equity 828,755 820,811 TOTAL $4,001,399 $4,039,706 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Statements of Capitalization March 31, December 31, 2001 % 2000 % (Thousands of Dollars) COMMON STOCK EQUITY: Common stock $ 452,122 $ 453,102 Retained earnings 387,445 370,126 Accumulated other comprehensive income (loss) (2,768) (921) Treasury stock (8,044) (1,496) Total common stock equity 828,755 45 820,811 46 PREFERRED STOCK OF IDAHO POWER COMPANY: 4% preferred stock 14,766 15,066 7.68% Series, serial preferred stock 15,000 15,000 7.07% Series, serial preferred stock 25,000 25,000 Auction rate preferred stock 50,000 50,000 Total preferred stock 104,766 6 105,066 6 LONG-TERM DEBT: First mortgage bonds: 6.93% Series due 2001 30,000 30,000 6.85% Series due 2002 27,000 27,000 6.40% Series due 2003 80,000 80,000 8 % Series due 2004 50,000 50,000 5.83% Series due 2005 60,000 60,000 7.38% Series due 2007 80,000 80,000 7.20% Series due 2009 80,000 80,000 6.60% Series due 2011 120,000 - Maturing 2021 through 2031 with rates ranging from 7.5% to 9.52% 155,000 230,000 Total first mortgage bonds 682,000 637,000 Amount due within one year (30,000) (30,000) Net first mortgage bonds 652,000 607,000 Pollution control revenue bonds: 8.30% Series 1984 due 2014 49,800 49,800 6.05% Series 1996A due 2026 68,100 68,100 Variable Rate Series 1996B due 2026 24,200 24,200 Variable Rate Series 1996C due 2026 24,000 24,000 Variable Rate Series 2000 due 2027 4,360 4,360 Total pollution control revenue bonds 170,460 170,460 REA notes 1,320 1,339 Amount due within one year (76) (77) Net REA notes 1,244 1,262 American Falls bond guarantee 19,885 19,885 Milner Dam note guarantee 11,700 11,700 Unamortized premium/discount - net (1,090) (1,330) Debt related to investments in affordable housing with rates ranging from 6.03% to 8.59% due 2001 to 2011 58,724 64,063 Amount due within one year (8,697) (9,697) Net affordable housing debt 50,027 54,366 Other subsidiary debt 798 771 Total long-term debt 905,024 49 864,114 48 TOTAL CAPITALIZATION $1,838,545 100 $1,789,991 100 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Statements of Cash Flows Three Months Ended March 31, 2001 2000 (Thousands of Dollars) OPERATING ACTIVITIES: Net income $ 34,770 $ 42,079 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Allowance for uncollectible accounts 20,174 - Unrealized gains from energy marketing activities (121,261) (3,971) Gain on sale of asset - (14,000) Depreciation and amortization 25,960 24,144 Deferred taxes and investment tax credits 62,307 182 Accrued PCA costs (59,710) 3,112 Change in: Accounts receivable and prepayments (22,754) (7,937) Accrued unbilled revenue 14,968 5,788 Materials and supplies and fuel stock (3,827) (1,272) Accounts payable (47,700) (18,523) Taxes accrued (31,666) 24,471 Other current assets and liabilities (713) (1,462) Other - net 2,519 (5,681) Net cash provided by (used in) operating activities (126,933) 46,930 INVESTING ACTIVITIES: Additions to property, plant and equipment (52,230) (24,826) Investments in affordable housing projects - (6,817) Proceeds from sale of asset - 17,500 Other - net (4,338) (368) Net cash used in investing activities (56,568) (14,511) FINANCING ACTIVITIES: Proceeds from issuance of: First mortgage bonds 120,000 - Treasury stock acquired (7,968) - Long-term debt related to affordable housing projects - 4,335 Retirement of: Long-term debt related to affordable housing projects (5,337) (2,736) First mortgage bonds (75,000) (80,000) Dividends on common stock (17,451) (17,456) Increase (decrease) in short- term borrowings 96,200 (7,828) Other - net (3,475) (379) Net cash provided by (used in) financing activities 106,969 (104,064) Net decrease in cash and cash equivalents (76,532) (71,645) Cash and cash equivalents at beginning of period 106,795 111,338 Cash and cash equivalents at end of period $ 30,263 $ 39,693 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash (received) paid during the period for: Income taxes $ (7,000) $ 2,424 Interest (net of amount capitalized) $ 13,207 $ 16,075 The accompanying notes are an integral part of these statements IDACORP, Inc. Consolidated Statements of Comprehensive Income Three Months Ended March 31, 2001 2000 (Thousands of Dollars) NET INCOME $34,770 $42,079 OTHER COMPREHENSIVE INCOME (LOSS): Unrealized gains (losses) on securities (net of tax of ($1,081) and $90) (1,847) 138 TOTAL COMPREHENSIVE INCOME $32,923 $42,217 The accompanying notes are an integral part of these statements IDACORP, Inc. Notes to Consolidated Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: 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 (RMC) - commercial and residential Internet service provider IDACOMM - provider of telecommunications services IDACORP Services - products and services for homes and businesses Financial Statements In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly its consolidated financial position as of March 31, 2001, and its consolidated results of operations for the three months ended March 31, 2001 and 2000 and consolidated cash flows for the three months ended March 31, 2001 and 2000. These financial statements do not contain the complete detail or footnote disclosure concerning accounting policies and other matters that would be included in full year financial statements and therefore they should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Planned Major Maintenance The Company records repair and maintenance costs associated with planned major maintenance activities as these costs are incurred. Regulatory Assets IPC has $5.5 million of regulatory assets that are not earning a return. These assets are predominately related to reorganization costs and postretirement benefits, and have remaining amortization periods of less than five years. 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. Reclassifications Certain items previously reported for periods prior to March 31, 2001 have been reclassified to conform with the current period's presentation. Net income and common stock equity were not affected by these reclassifications. 2. INCOME TAXES The Company's effective tax rate for the first three months decreased from 35.8 percent in 2000 to 33.2 percent in 2001. Reconciliations between the statutory income tax rate and the effective rates are as follows (in thousands of dollars): Three Months Ended March 31, 2001 2000 Amount Rate Amount Rate Computed income taxes based on statutory federal income tax rate $ 18,218 35.0% $ 22,951 35.0% Changes in taxes resulting from: Investment tax credits (776) (1.5) (771) (1.2) Repair allowance (700) (1.3) (700) (1.1) Pension expense (456) (0.9) (479) (0.7) State income taxes 2,272 4.4 2,993 4.6 Depreciation 1,823 3.5 1,693 2.6 Affordable housing tax credits (3,070) (5.9) (2,539) (3.9) Preferred dividends of IPC 511 1.0 500 0.8 Other (540) (1.1) (152) (0.3) Total provision for federal and state income taxes $ 17,282 33.2% $ 23,496 35.8% 3. PREFERRED STOCK OF IDAHO POWER COMPANY: The number of shares of IPC preferred stock outstanding were as follows: March 31, December 31, 2001 2000 Cumulative, $100 par value: 4% preferred stock (authorized 147,655 150,656 215,000 shares) Serial preferred stock, 7.68% Series (authorized 150,000 shares) 150,000 150,000 Serial preferred stock, cumulative, without par value; total of 3,000,000 shares authorized: 7.07% Series, $100 stated value, (authorized 250,000 shares) 250,000 250,000 Auction rate preferred stock, $100,000 stated value, (authorized 500 shares) 500 500 4. FINANCING: At March 31, 2001, IPC had regulatory authority to incur up to $500 million of short-term indebtedness. At March 31, 2001, IPC's short term borrowing totaled $128 million. The Company has credit facilities established at both IPC and IDACORP. IPC has a $120 million multi-year revolving credit facility under which it pays a facility fee on the commitment, quarterly in arrears, based on IPC's First Mortgage Bond rating. IPC also established on April 27, 2001, a new 364-day credit facility for up to $165 million to help support its ongoing operations. 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 $375 million 364-day credit facility that expires in March 2002. Under these facilities IDACORP 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. At March 31, 2001, short-term borrowing on these facilities totaled $89 million. 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 March 31, 2001, none had been issued. On March 23, 2000, IPC filed a $200.0 million shelf registration statement that could be used for First Mortgage Bonds (including medium term notes), unsecured debt, or preferred stock. On December 1, 2000, $80 million principal amount of Secured Medium Term Notes, Series C, 7.38% Series due 2007 were issued. Proceeds were used for the early redemption in January 2001 of the $75 million First Mortgage Bonds 9.50% Series due 2021. On March 2, 2001, $120 million principal amount of Secured Medium Term Notes, Series C, 6.60% Series due 2011 were issued, and proceeds from this issuance were used to reduce short- term borrowing incurred in support of ongoing long-term construction requirements. At March 31, 2001, no amount remained to be issued on this shelf. 5. COMMITMENTS AND CONTINGENT LIABILITIES: Commitments under contracts and purchase orders relating to IPC's program for construction and operation of facilities amounted to approximately $12.9 million at March 31, 2001. Additionally, Ida-West Energy has commitments totaling $33.1 million. The commitments are generally revocable by the Company subject to reimbursement of manufacturers' expenditures incurred and/or other termination charges. From time to time the Company is party to various legal claims, actions, and complaints, certain of which may involve material amounts. Although the Company is 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 operation, or cash flows. IPC also has approximately $7 million in receivables from less-tahn-investment grade entities at March 31, 2001. California Energy Situation With regard to the Company's 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 the Company 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. The Company made this payment. On January 24, 2001, the Company terminated the 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, Pacific Gas and Electric Company (PG&E), and others. However, because the CalPX owed the Company $11.3 million for power sold to the CalPX in November and December 2000, the Company 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. The Company believes that the default invoices were not proper and that it owes no further amounts to the CalPX. The Company intends to pursue all available remedies in its efforts to collect amounts owed to it by the CalPX. On February 20, 2001, the Company 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. 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. In April 2001, PG&E filed for bankruptcy. The CalPX and California Independent System Operator (Cal ISO) were also creditors of PG&E. To the extent that PG&E's bankruptcy filing affects the collectibility of our receivables from the CalPX and Cal ISO our receivables from these entities are at greater risk. IPC has retained California counsel to represent the Company's interests in the ongoing CalPX and PG&E bankruptcies and discontinued energy trading with California entities in December 2000. At March 31, 2001, the CalPX and the Cal ISO owe $29 and $13 million respectively for energy sales made to them by IPC in November and December 2000. IPC has accrued a reserve of $44 million against these receivables balances and the $7 million of receivables from less-than-investment grade entities noted above. These reserves were calculated taking into account the continued deterioration of the California energy markets and for the less-than- investment grade receivables, by using a model that estimates the probability of default and the estimated recovery amounts of such receivables. 6. REGULATORY ISSUES: Power Cost Adjustment (PCA) IPC has a PCA mechanism that provides for annual adjustments to the rates IPC charges to Idaho retail customers. These adjustments, which take effect annually in May, are based on forecasts of net power supply expenses. During the year, the difference between actual and forecasted costs is deferred with interest. This balance of this deferral, called a true-up, is then included in the calculation of the next year's PCA adjustment. In the 2001 PCA, the IPUC authorized IPC to recover approximately $168 million of costs through rate increases effective May 1, 2001, representing 74 percent of IPC's $227 million request. The increase reflects an average 31.6 percent increase to rates. The IPUC has deferred recovery of the remaining $59 million pending a formal hearing of issues involving IPC's operating and non-operating energy transactions. An expedited review process commenced May 10, 2001 and resolution is expected by August 23, 2001. The IPUC order does not address, and IPC is not accruing, a return on the deferred $59 million, but IPC has earned or paid a return on all previous PCA deferrals and intends to request a return on the deferred portion of this year's PCA. Although the Company is unable to predict the outcome of the IPUC's decision in this matter, the Company expects to be allowed recovery of the deferred $59 million. Of the $227 million requested by IPC, $185 million related to the true-up of power supply costs incurred in the 2000- 2001 PCA year and $42 million was for recovery of excess power supply costs forecasted in the 2001-2002 PCA year. The forecast amount, however, underestimates expected power supply costs in light of current water and market conditions; reservoir water is lower than and electricity market prices are higher than the assumptions used in the forecast. As part of the May 2001 PCA, the IPUC required IPC to implement a three-tiered rate structure for Idaho residential customers. The IPUC determined that the approved rates for residential customers should increase as a customer's electricity consumption increases. The residential rate increases are 14.4 percent for the first 800 kWh of usage, 28.8 percent for the next 1,200 kWh, and 62 percent for usage over 2,000 kWh. Oregon IPC filed an application with the OPUC to begin recovering extraordinary power supply costs in its Oregon jurisdiction. On May 2, 2001, new rates went into effect that will recover $0.8 million over the next year. 7. 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 electricity and natural gas 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 Emerging Issues Task Force (EITF) 98-10, "Accounting for Contracts Involved in Energy Trading Activities," and SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" as amended by SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Activities." Energy Trading Contracts All contracts classified as energy trading contracts under the guidance provided by EITF 98-10 that have an open short or long position are marked to market and the resulting change in fair value from the previous period is reflected on the Consolidated Statement of Income in "Energy marketing revenues" for IDACORP and "Other Income-Energy marketing activities-net" for IPC. The same accounting treatment is applied for all energy trading contracts, regardless of whether they are anticipated to be physically scheduled for delivery or net settled. In the settlement month, of these contracts, the fair value is derecognized with the resulting change in fair value from the prior period booked as a gain or loss in income; the revenues or expenses resulting from settlement are booked in the current period as a gain or loss in current month income as well. The fair value of positions recorded on the balance sheet is dependent 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. Derivative Assets and Liabilities The Company adopted SFAS 133, as amended, effective January 1, 2001. Contracts company-wide were evaluated based upon the SFAS No. 133 derivative definitions and requirements. Most of the Company's contracts that meet the derivative definition are the energy trading contracts that are already recorded at fair value under EITF 98-10 as discussed above. Most of the remaining energy contracts meet the definition of a normal purchase or sale as described in SFAS No. 138 and therefore are not considered derivatives. However, the Company has certain electricity contracts that are periodically net settled with the counterparty (booked out). Booking out of electricity contracts is a normal business transaction within the electrical utility industry, however the FASB and the Derivative Implementation Group (DIG) have interpreted that book outs do not qualify for the normal purchase and sales exclusion. Accordingly the fair market value of the booked out system electricity contracts has been established and recorded within the financial statements as Derivative Assets and Derivative Liabilities. Such assets and liabilities at January 1 and March 31, 2001 are as follows: January 1, 2001 March 31, 2001 (in thousands) Assets $ 108,909 $128,304 Liabilities (207,407) (211,262) Net $ (98,498) $(82,958) The electricity contracts identified above are subject to IPC regulatory processes. Accordingly, SFAS No. 71, "Accounting for the Effects of Certain Types of Regulation" allows the net amount of these Derivative Assets and Liabilities to be offset by regulatory assets or liabilities. The IPUC has granted approval of this use of SFAS No. 71 regulatory assets or liabilities in its Order 28661 issued March 12, 2001. IPC is closely monitoring and participating in the ongoing discussions with the FASB and DIG in regards to the accounting for derivatives. As a result of the items discussed above, the Company's adoption of SFAS No. 133, as amended, did not have a material effect on its financial position, results of operations, or cash flows. 8. INDUSTRY SEGMENT INFORMATION: The Company has identified two reportable operating segments, Utility Operations and Energy Marketing. 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) Three months ended March 31, 2001 Revenues $ 203,106 $ 82,632 $ 2,507 $ - $ 288,245 Net income 13,681 23,184 (2,095) - 34,770 Total assets at March 31, 2001 $2,906,892 $ 907,155 $ 187,352 $ - $4,001,399 Three months ended March 31, 2000 Revenues $ 170,523 $ 11,253 $ 4,497 $ - $ 186,273 Net income 27,534 5,540 9,005 - 42,079 Total assets at December 31, 2000 $2,530,312 $1,312,045 $ 197,349 $ - $4,039,706 INDEPENDENT ACCOUNTANTS' REPORT IDACORP, Inc. Boise, Idaho We have reviewed the accompanying consolidated balance sheet and statement of capitalization of IDACORP, Inc. and subsidiaries as of March 31, 2001, and the related consolidated statements of income, comprehensive income, and cash flows for the three-month periods ended March 31, 2001 and 2000. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet and statement of capitalization of IDACORP, Inc. and subsidiaries as of December 31, 2000, and the related consolidated statements of income, comprehensive income, retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated February 1, 2001, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet and statement of capitalization as of December 31, 2000 is fairly stated, in all material respects, in relation to the consolidated balance sheet and statement of capitalization from which it has been derived. DELOITTE & TOUCHE LLP Boise, Idaho May 3, 2001 Idaho Power Company Consolidated Statements of Income Three Months Ended March 31, 2001 2000 (Thousands of Dollars) REVENUES: General business $ 133,121 $ 123,213 Off system sales 55,249 35,925 Other revenues 11,946 7,195 Total revenues 200,316 166,333 EXPENSES: Operation: Purchased power 125,287 12,890 Fuel expense 25,247 24,659 Power cost adjustment (58,246) 3,258 Other 37,466 35,236 Maintenance 11,681 9,010 Depreciation 20,952 19,887 Taxes other than income taxes 5,235 5,427 Total expenses 167,622 110,367 INCOME FROM OPERATIONS 32,694 55,966 OTHER INCOME: Allowance for equity funds used during construction 225 456 Energy marketing activities - Net 38,125 7,724 Other - Net 4,788 4,726 Total other income 43,138 12,906 INTEREST CHARGES: Interest on long-term debt 13,423 13,132 Other interest 2,216 1,478 Allowance for borrowed funds used during construction (1,164) (487) Total interest charges 14,475 14,123 INCOME BEFORE INCOME TAXES 61,357 54,749 INCOME TAXES 23,132 21,024 NET INCOME 38,225 33,725 Dividends on preferred stock 1,461 1,428 EARNINGS ON COMMON STOCK $ 36,764 $ 32,297 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Balance Sheets Assets March 31, December 31, 2001 2000 (Thousands of Dollars) ELECTRIC PLANT: In service (at original cost) $2,842,782 $2,799,874 Accumulated provision for depreciation (1,163,037) (1,142,572) In service - Net 1,679,745 1,657,302 Construction work in progress 140,118 131,214 Held for future use 2,166 2,167 Electric plant - Net 1,822,029 1,790,683 INVESTMENTS AND OTHER PROPERTY 19,767 21,884 CURRENT ASSETS: Cash and cash equivalents 9,774 83,494 Receivables: Customer 245,818 215,358 Allowance for uncollectible accounts (43,253) (23,079) Notes 2,933 2,945 Employee notes 4,515 4,742 Related parties 391 311 Other 6,157 4,943 Energy marketing assets 614,732 951,193 Derivative assets 128,304 - Taxes receivable 21,359 - Accrued unbilled revenues 29,857 44,825 Materials and supplies (at average cost) 26,063 24,685 Fuel stock (at average cost) 8,150 5,105 Prepayments 26,458 24,145 Regulatory assets associated with income taxes 12,823 8,672 Regulatory assets - derivatives 40,455 - Total current assets 1,134,536 1,347,339 DEFERRED DEBITS: American Falls and Milner water rights 31,585 31,585 Company-owned life insurance 39,625 39,554 Energy marketing assets - long- term 127,657 43,556 Regulatory assets associated with income taxes 202,462 204,880 Regulatory assets - PCA 179,847 119,905 Regulatory assets - long-term derivatives 42,503 - Regulatory assets - other 44,055 45,750 Other 52,869 50,410 Total deferred debits 720,603 535,640 TOTAL $3,696,935 $3,695,546 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Balance Sheets Capitalization and Liabilities March 31, December 31, 2001 2000 (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 Premium on capital stock 362,509 362,430 Capital stock expense (4,051) (4,024) Retained earnings 333,100 313,800 Accumulated other comprehensive income (loss) (2,768) (921) Total common stock equity 782,821 765,316 Preferred stock 104,766 105,066 Long-term debt 854,199 808,977 Total capitalization 1,741,786 1,679,359 CURRENT LIABILITIES: Long-term debt due within one year 30,076 30,077 Notes payable 127,800 59,700 Accounts payable 201,618 250,673 Notes and accounts payable to related parties 29,491 4,212 Energy marketing liabilities 526,951 944,643 Derivative liabilities 168,759 - Taxes accrued - 12,983 Interest accrued 16,969 15,002 Deferred income taxes 12,823 8,672 Other 17,078 19,066 Total current liabilities 1,131,565 1,345,028 DEFERRED CREDITS: Regulatory liabilities associated with deferred investment tax credits 66,409 66,050 Deferred income taxes 509,933 452,404 Energy marketing liabilities - long-term 102,425 46,769 Derivative liabilities - long- term 42,503 - Regulatory liabilities associated with income taxes 40,539 40,230 Regulatory liabilities - other 4,668 4,621 Other 57,107 61,085 Total deferred credits 823,584 671,159 COMMITMENTS AND CONTINGENT LIABILITIES TOTAL $3,696,935 $3,695,546 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Capitalization March 31, December 31, 2001 % 2000 % (Thousands of Dollars) COMMON STOCK EQUITY: Common stock $ 94,031 $ 94,031 Premium on capital stock 362,509 362,430 Capital stock expense (4,051) (4,024) Retained earnings 333,100 313,800 Accumulated other comprehensive income (loss) (2,768) (921) Total common stock equity 782,821 45 765,316 46 PREFERRED STOCK: 4% preferred stock 14,766 15,066 7.68% Series, serial preferred stock 15,000 15,000 7.07% Series, serial preferred stock 25,000 25,000 Auction rate preferred stock 50,000 50,000 Total preferred stock 104,766 6 105,066 6 LONG-TERM DEBT: First mortgage bonds: 6.93% Series due 2001 30,000 30,000 6.85% Series due 2002 27,000 27,000 6.40% Series due 2003 80,000 80,000 8 % Series due 2004 50,000 50,000 5.83% Series due 2005 60,000 60,000 7.38% Series due 2007 80,000 80,000 7.20% Series due 2009 80,000 80,000 6.60% Series due 2011 120,000 - Maturing 2021 through 2031 with rates ranging from 7.5% to 9.52% 155,000 230,000 Total first mortgage bonds 682,000 637,000 Amount due within one year (30,000) (30,000) Net first mortgage bonds 652,000 607,000 Pollution control revenue bonds: 8.30% Series 1984 due 2014 49,800 49,800 6.05% Series 1996A due 2026 68,100 68,100 Variable Rate Series 1996B due 2026 24,200 24,200 Variable Rate Series 1996C due 2026 24,000 24,000 Variable Rate Series 2000 due 2007 4,360 4,360 Total pollution control revenue bonds 170,460 170,460 REA notes 1,320 1,339 Amount due within one year (76) (77) Net REA notes 1,244 1,262 American Falls bond guarantee 19,885 19,885 Milner Dam note guarantee 11,700 11,700 Unamortized premium/discount (1,090) (1,330) - Net Total long-term debt 854,199 49 808,977 48 TOTAL CAPITALIZATION $1,741,786 100 $1,679,359 100 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Cash Flows Three Months Ended March 31, 2001 2000 (Thousands of Dollars) OPERATING ACTIVITIES: Net income $ 38,225 $ 33,725 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Allowance for uncollectible accounts 20,174 - Unrealized gains from energy marketing activities (109,676) (4,223) Depreciation and amortization 23,236 22,638 Deferred taxes and investment tax credits 61,695 (34) Accrued PCA costs (59,710) 3,112 Change in: Accounts receivable and prepayments (33,828) (10,435) Accrued unbilled revenue 14,968 5,788 Materials and supplies and fuel stock (4,423) (484) Accounts payable (49,054) (14,226) Taxes accrued (34,342) 22,041 Other current assets and liabilities (21) (2,483) Other - net (1,566) (7,230) Net cash provided by (used in) operating activities (134,322) 48,189 INVESTING ACTIVITIES: Additions to utility plant (52,123) (24,826) Net cash of affiliates transferred to parent - (4,737) Other - net 10 (39) Net cash used in investing activities (52,113) (29,602) FINANCING ACTIVITIES: Issuance of first mortgage bonds 120,000 - Retirement of first mortgage bonds (75,000) (80,000) Dividends on common stock (17,464) (17,456) Dividends on preferred stock (1,461) (1,428) Increase (decrease) in short-term borrowings 90,528 (8,017) Other - net (3,888) (112) Net cash provided by (used in) financing activities 112,715 (107,013) Net decrease in cash and cash equivalents (73,720) (88,426) Cash and cash equivalents at beginning of period 83,494 95,038 Cash and cash equivalents at end of period $ 9,774 $ 6,612 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Income taxes $ - $ 2,424 Interest (net of amount capitalized) 11,960 16,026 Net assets of affiliates transferred to parent - 22,090 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Comprehensive Income Three Months Ended March 31, 2001 2000 (Thousands of Dollars) NET INCOME $ 38,225 $ 33,725 OTHER COMPREHENSIVE INCOME (LOSS): Unrealized gains (losses) on securities (net of tax ($1,081) and $90) (1,847) 138 TOTAL COMPREHENSIVE INCOME $ 36,378 $ 33,863 The accompanying notes are an integral part of these statements Idaho Power Company Notes to the Consolidated Financial Statements On January 1, 2000 IPC's ownership interests in two subsidiaries were transferred to IDACORP at book value, total assets of $108 million and net assets of $22 million. Except as modified below, the Notes to the Consolidated Financial Statements of IDACORP also contained in this Form 10-Q are incorporated herein by reference insofar as they relate to IPC. Note 1 - Summary of Significant Accounting Policies Note 3 - Preferred Stock of Idaho Power Company Note 4 - Financing Note 5 - Commitments and Contingent Liabilities Note 6 - Regulatory Issues Note 7 - Derivative Financial Instruments 2. INCOME TAXES: IPC's effective tax rate for the first three months decreased from 38.4 percent in 2000 to 37.8 percent in 2001. Reconciliations between the statutory income tax rate and the effective rates are as follows (in thousands of dollars): Three Months Ended March 31, 2001 2000 Amount Rate Amount Rate Computed income taxes based on statutory federal income tax rate $ 21,475 35.0% $ 19,162 35.0% Changes in taxes resulting from: Investment tax credits (776) (1.3) (771) (1.4) Repair allowance (700) (1.1) (700) (1.3) Pension expense (456) (0.7) (479) (0.9) State income taxes 2,607 4.3 2,508 4.6 Depreciation 1,823 3.0 1,693 3.1 Other (841) (1.4) (389) (0.7) Total provision for federal and state income taxes $ 23,132 37.8% $ 21,024 38.4% 8. 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. 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) Three months ended March 31, 2001 Revenues $ 200,316 $ - $ - $ - $ 200,316 Net income 15,141 23,098 (14) - 38,225 Total assets at March 31, 2001 $2,906,892 $ 786,807 $ 3,236 $ - $3,696,935 Three months ended March 31, 2000 Revenues $ 166,333 $ - $ - $ - $ 166,333 Net income 28,962 4,763 - - 33,725 Total assets at December 31,2000 $2,530,312 $1,162,059 $ 3,175 $ - $3,695,546 INDEPENDENT ACCOUNTANTS' REPORT Idaho Power Company Boise, Idaho We have reviewed the accompanying consolidated balance sheet and statement of capitalization of Idaho Power Company and subsidiaries as of March 31, 2001, and the related consolidated statements of income, comprehensive income, and cash flows for the three-month periods ended March 31, 2001 and 2000. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet and statement of capitalization of Idaho Power Company and subsidiaries as of December 31, 2000, and the related consolidated statements of income, comprehensive income, retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated February 1, 2001, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet and statement of capitalization as of December 31, 2000 is fairly stated, in all material respects, in relation to the consolidated balance sheet and statement of capitalization from which it has been derived. DELOITTE & TOUCHE LLP Boise, Idaho May 3, 2001 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERTIONS In Management's Discussion and Analysis we explain the general financial condition and results of operations for IDACORP, Inc. and subsidiaries (IDACORP or the Company) and for Idaho Power Company and subsidiaries (IPC). IDACORP is a holding company formed in 1998 as the parent of IPC and several other entities. IPC is an electric utility with a service territory covering over 20,000 square miles 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 (RMC) - commercial and residential Internet service provider IDACOMM - provider of telecommunications services IDACORP Services - products and services for homes and businesses Except where we indicate otherwise, this discussion explains the material changes in results of operations and the financial condition of both IDACORP and IPC. This MD&A should be read in conjunction with the accompanying consolidated financial statements of both IDACORP and IPC. This discussion updates our MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2000. This discussion should be read in conjunction with the discussion in the annual report. 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 and IPC in this 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 FERC, the IPUC, the OPUC, and the PUCN, with respect to allowed rates of return, industry and rate structure, acquisition and disposal of assets and facilities, operations 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. 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 the factors that affected our earnings, beginning with a general overview, then discussing results for each of our operating segments. Earnings per share 2001 2000 Electric utility $ 0.37 0.73 Marketing 0.62 0.15 Other (0.06) 0.24 Total $ 0.93 1.12 EPS from utility operations decreased due to increased power supply costs resulting from a decline in hydroelectric generating conditions and increased market prices for purchased power. These increased costs are partially offset by increased general business revenues resulting from rate increases, customer growth and weather conditions, and the deferral of expenses related to our power cost adjustment mechanism. Our net income from energy marketing activities increased $18 million in the first quarter of 2001, reflecting the expansion of marketing activities in terms of both volume and geographic area. EPS from IDACORP's other businesses decreased due to the sale of our Hermiston project in 2000, which contributed approximately $0.22 per share in 2000 and due to increased losses at IdaTech and RMC. Utility Operations This section discusses IPC's utility operations, which are subject to regulation by, among others, the state regulatory commissions of Idaho, Oregon, Nevada and the FERC. General Business Revenue The following table presents IPC's general business revenue for the quarters ended March 31, 2001 and 2000: $ in thousands MWH (in thousands) 2001 2000 2001 2000 Residential $ 69,734 $ 60,862 1,349 1,238 Commercial (including street lighting) 32,714 30,089 834 811 Industrial 30,533 31,708 1,064 1,269 Irrigation 148 554 2 12 Total $133,121 $123,213 3,248 3,331 Our general business revenue is dependent on many factors, including the number of customers we serve, the rates we charge, and economic and weather conditions. The change in revenues in 2001 is due primarily to the following: our annual power cost adjustment increased average rates from customers subject to the PCA by 7.1 percent, resulting in increased revenues of $7 million. We discuss the PCA in more detail below in "Regulatory Issues - PCA." population growth in our service territory increased our customer count by 2.6 percent, resulting in a $2 million increase in revenues. colder weather increased sales to residential customers by $4 million. Heating degree-days, a common measure used in the utility industry to analyze demand, were above 2000 levels by 14.5 percent. the changes in contract provisions with certain large industrial customers decreased revenues $3 million. Off-system sales Off-system sales consist primarily of long-term sales contracts and opportunity sales of surplus system energy. The increase in 2001 is due to substantial increases in electricity prices in the IPC region, offset by the decreased availability of excess energy due to poor hydroelectric generating conditions. $ (in thousands) MWHs (in thousands) Revenue per MWH 2001 2000 2001 2000 2001 2000 $55,249 $35,925 495 1,544 $111.64 $23.27 Power Supply Power supply components of income from operations include off-system sales (described above) and purchased power, fuel, and PCA expenses (analyzed below). The impact of the changes in net power supply costs was an increase in power supply expense of $32 million in 2001. 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) MWHs (in thousands) Cost per MWH 2001 2000 2001 2000 2001 2000 $125,287 $12,890 579 300 $216.39 $42.96 Purchased power expenses increased $112 million in 2001, due primarily to an increase of over 400 percent in the average cost per MWH purchased, and a 93 percent increase in MWHs purchased. The price increases are the result of the volatile western United States electricity markets. Purchase power volumes have increased because poor hydroelectric generating conditions have reduced hydro generation by 1.3 million MWH. Fuel expense Fuel expenses were essentially unchanged from 2000, as generation at our coal-fired plants was also essentially unchanged. Thermal MWHs generated $ (in thousands) (in thousands) 2001 2000 2001 2000 $25,247 $24,659 1,951 1,960 PCA The PCA decreased expenses $62 million. The PCA expense component is related to our PCA regulatory mechanism, which increases expense when actual power supply costs are below the costs forecasted in the annual PCA filing, and decreases expense when actual power supply costs are above the forecast. In 2001, actual power supply costs have been significantly greater than forecasted, resulting in a large PCA credit. We discuss the PCA in more detail below in "Regulatory Issues - PCA." Other expenses Other operating and maintenance expenses increased $5 million due primarily to $2.7 million in maintenance at the Company's thermal and distribution operations, and $2.0 million of customer expenses, primarily for our new customer information system. Energy Marketing Energy marketing revenues increased $71 million in 2001 due primarily to increased marketing activity and increased prices in the energy markets. These increases reflect the expansion of the marketing activities in both volume and geographic reach. Power marketing volumes increased by 39 percent over the prior year, primarily attributable to expansion into markets in Canada and the midwestern and southwestern United States. Energy marketing is now doing business in twenty states and two Canadian provinces. Energy marketing expenses increased $42 million in 2001, due primarily to $20 million in reserves recorded in 2001 related to trading activities conducted with California entities in 2000. In addition, we recorded $11 million of expenses related to our exposure to losses from non-California trading counterparties, and a $10 million increase in general and administrative costs. We discuss the ongoing California energy situation, including its effect on operations and liquidity, below in "California Energy Situation." Other Diversified Operations Other diversified operations include the results of operations of IDACORP's diversified subsidiaries, including Ida-West Energy, IdaTech, IDACORP Financial Services, RMC, and IDACORP Services. Revenues Revenues from other diversified operations decreased $2 million, due to a $4 million reduction resulting from the sale of Applied Power Company (APC) in January 2001, offset by $2 million in revenues at RMC, which we acquired in August 2000. Expenses Other diversified operating expenses increased due to $3 million of expenses at RMC, which was acquired in August 2000, and $2 million from increased production activities at IdaTech, our fuel cell technology subsidiary. These increases were offset by a $4 million decrease resulting from the sale of APC in January 2001. Other Income IDACORP's other income decreased for the quarter because in 2000 we recorded a pre-tax gain of $14 million on the sale of our interest in the Hermiston Power Project, a 536-MW, gas-fired cogeneration project located near Hermiston, Oregon. Income Taxes Income taxes decreased for the quarter, due primarily to the decreases in net income before taxes. IDACORP's income taxes were also affected by an increase in tax credits from affordable housing projects. LIQUIDITY AND CAPITAL RESOURCES: Cash Flow Our net cash used by operations totaled $127 million for the quarter ended March 31, 2001. Significant factors affecting cash flows include: the growth in our PCA regulatory asset balance, reflecting increased power supply expenditures that we have not yet recovered through PCA rate adjustments. Recovery of this regulatory asset commenced in May 2001 (see PCA discussion below); payments to energy trading counterparties exceeded receipts due to unpaid receivables from the CalPX and Cal ISO and other California-based entities; increased margin deposit requirements established for our energy marketing business; net power supply costs absorbed by the Company and not recovered under the PCA mechanism. We anticipate that our cash flows from operations will be positively affected when we begin realizing increased revenues from the May 2001 PCA adjustment (see "PCA" below). However, we also expect that poor water conditions and high wholesale energy prices in the Northwest will result in power supply costs that continue to exceed the amounts we are recovering in rates in the 2001-2002 PCA rate year. These conditions could have an adverse effect on our operating cash flows and require additional short-term borrowing or other financing options. Working Capital The change in Customer Receivables and Accounts Payable is attributed primarily to trading volumes and prices on settled energy trading contracts. Accounts Payable also decreased due to an incentive accrual of $19 million at December 31, 2000 that was paid in the first quarter of 2001. The increase in the Allowance for Uncollectible Accounts of $20 million is due to additional reserves against settled energy trading contracts related to trading activities in the California markets. The net income in current Energy Marketing Assets over Energy Marketing Liabilities, is attributed to changes in unrealized gains recorded at March 31, 2001. The remaining changes in working capital are attributed to timing and normal business activity. Cash Expenditures We forecast that internal cash generation after dividends will provide approximately 34 percent of total capital requirements in 2001 and 109 percent during the four-year period 2002-2005. We expect to finance our utility construction programs and other capital requirements with both internally generated funds and, to the extent necessary, externally financed capital. Financing Program At March 31, 2001, IPC had regulatory authority to incur up to $500 million of short-term indebtedness. At March 31, 2001, IPC's short term borrowing totaled $128 million. 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. We also established on April 27, 2001, a new 364-day credit facility for up to $165 million to help support IPC's ongoing operations. 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 $375 million 364-day credit facility that expires in March 2002. 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. At March 31, 2001, short-term borrowing on these facilities totaled $89 million. IDACORP currently has a $300 million shelf registration statement that can be used for the issuance of unsecured debt securities (including medium-term notes) and preferred or common stock. At March 31, 2001 none had been issued. In March 2000 IPC filed a $200 million shelf-registration statement that could be used for both first mortgage bonds (including medium-term notes), unsecured debt or preferred stock. In December 2000, $80 million of Secured Medium Term Notes were issued by IPC. Proceeds from this issuance were used in early January 2001 for the early redemption of $75 million of First Mortgage Bonds originally due in 2021. In March 2001, $120 million of Secured Medium Term Notes were issued by IPC. Proceeds were used to reduce short-term borrowing incurred in support of ongoing long-term construction requirements. At March 31, 2001, no amount remained to be issued on this shelf. OTHER MATTERS: 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 May, are based on forecasts of net power supply expenses. During the year, the difference between actual and forecasted costs is deferred with interest. This balance of this deferral, called a true-up, is then included in the calculation of the next year's PCA adjustment. In the 2001 PCA, the IPUC authorized IPC to recover approximately $168 million of costs through rate increases effective May 1, 2001, representing 74 percent of IPC's $227 million request. The increase reflects an average 31.6 percent increase to rates. The IPUC has deferred recovery of the remaining $59 million pending a formal hearing of issues involving IPC's operating and non-operating energy transactions. An expedited review process commenced May 10, 2001 and resolution is expected by August 23, 2001. The IPUC order does not address, and IPC is not accruing, a return on the deferred $59 million, but IPC has earned or paid a return on all previous PCA deferrals and intends to request a return on the deferred portion of this year's PCA. Although we are unable to predict the outcome of the IPUC's decision in this matter, we expect to be allowed recovery of the deferred $59 million. Of the $227 million requested by IPC, $185 million related to the true-up of power supply costs incurred in the 2000- 2001 PCA year and $42 million was for recovery of excess power supply costs forecasted in the 2001-2002 PCA year. The forecast amount, however, underestimates expected power supply costs in light of current water and market conditions; reservoir water is lower than and electricity market prices are higher than the assumptions used in the forecast. As part of the May 2001 PCA, the IPUC required IPC to implement a three-tiered rate structure for Idaho residential customers. The IPUC determined that the approved rates for residential customers should increase as a customer's electricity consumption increases. The residential rate increases are 14.4 percent for the first 800 kWh of usage, 28.8 percent for the next 1,200 kWh, and 62 percent for usage over 2,000 kWh. Oregon IPC filed an application with the OPUC to begin recovering extraordinary power supply costs in its Oregon jurisdiction. On May 2, 2001, new rates went into effect that will recover $0.8 million over the next year. New Idaho Legislation Idaho Senate Bill No. 1255, chapter 15, title 61, Idaho Code (the "Act"), was signed into law on April 10, 2001. It authorizes the IPUC to allow public utilities or their assignees to issue energy cost recovery bonds to finance, among other things, significant increases in the cost of electricity resulting from shortfalls in available hydroelectric power for which higher-cost replacement power must be substituted. The legislative intent of the Act is to provide utilities with a mechanism for recovery of these increased costs while leveling the rate impact of such increases on the utilities' customers. Energy cost recovery bonds must have an expected maturity date no later than five years after issuance and a legal maturity date no later than seven years after issuance. Under the Act, the IPUC may issue an energy cost financing order in favor of the utility, pursuant to which a charge, known as an energy cost bond charge, would be included on the bills of the utility's Idaho customers. The Act requires the energy cost bond charge to remain in effect until the energy cost recovery bonds are paid in full. In addition, the charge is subject to periodic adjustment to ensure the timely payment of principal and interest on the energy cost recovery bonds and the recovery of certain related expenses. An energy cost financing order creates energy cost property, which includes the right to receive revenues arising from the energy cost bond charge. Energy cost property may be sold or otherwise transferred to, among others, the assignee of the public utility that issues energy cost recovery bonds, and it may be pledged as security for such bonds. The Act requires that, before it issues an energy cost financing order, the IPUC must find that the public interest would be better served if increased costs reflected in a fuel or power cost adjustment and related expenses were recovered through the issuance of energy cost recovery bonds than if these amounts were recovered over a one-year period assuming a conventional financing. California Energy Situation 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, becasue the CalPX owed 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. On February 20, 2001, 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. 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. In April 2001, PG&E filed for bankruptcy. The CalPX and California Independent System Operator (Cal ISO) were also creditors of PG&E. To the extent that PG&E's bankruptcy filing affects the collectibility of our receivables from the CalPX and Cal ISO our receivables from these entities are at greater risk. IPC has retained California counsel to represent the Company's interests in the ongoing CalPX and PG&E bankruptcies and discountinued energy trading with California entities in December 2000. At March 31, 2001, the CalPX and Cal ISO owe $29 million and $13 million respectively for energy sales made to them by IPC in November and December 2000. IPC has accrued a reserve of $44 million against these receivable balances and $7 million of receivables from other less-than-investment grade entities. These reserves were calculated taking into account the continued deterioration of the California energy markets and for the less- than-investment grade receivables, by using a model that estimates the probability of default and the estimated recovery amounts of such receivables. Based on the reserves that we have recorded as of March 31, 2001, we believe that the future collectibility of these receivables would not have a significant adverse impact on operations or liquidity. Energy Marketing When buying and selling energy, the high volatility of energy prices can have a significant impact on profitability. Also, counterparty creditworthiness is key to ensuring that transactions entered into withstand dramatic market fluctuations. To manage these risks while implementing our business strategy, the Company has a Risk Management Committee, comprised of Company officers, to oversee the risk management program as defined in the risk management policy. The program is intended to minimize fluctuations in earnings while managing the volatility of energy prices by mitigating commodity price risk, credit risk, and other risks related to the energy trading business. The aggregate potential daily loss in earnings from our energy trading activity as of March 31, 2001 is estimated to be $4.4 million at a 95 percent confidence interval and for a holding period of one business day (common industry parameters). This 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 option-implied volatilities as of March 31, 2001. The value-at-risk is understood to be a statistical calculation of potential loss and not a forecast of expected loss and as such, is not guaranteed to occur. The confidence level and holding period imply that there is a five percent chance that the daily loss could exceed $4.4 million. The primary factors causing the increase in our value-at- risk since December 31, 2000 are increases in electricity and natural gas prices and volatility since the beginning of the year. The daily value-at-risk estimate is managed within acceptable limits and is reported daily to the Risk Management Committee. In August 2000 IPC submitted an application to the IPUC to move our non-operating electricity marketing activity to another IDACORP subsidiary, IDACORP Energy (IES). These non- operating transactions do not involve sales from IPC's resources and are not related to system reliability. The IPUC approved this application but has since indicated a desire to review some of the previously approved formulas for pricing transactions between IES and IPC. We expect that hearings will be scheduled for this summer 2001. IPC and IES filed a joint application with the FERC to obtain market-based pricing authority for IES. The FERC, with one modification, accepted for filing IES's request. The proposed rate schedules were made effective as of April 28, 2001. The FERC required IES and IPC to modify the proposed transfer pricing for real-time transactions between IPC and IES. We will file our concurrence with the Commission order, including compliance with the real-time pricing adjustment, on May 14, 2001. Power supply and demand management Our utility operations are being affected by the electricity market and generation 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. We monitor the effect of streamflow conditions on Brownlee Reservoir, the water source for our three Hells Canyon hydroelectric facilities. In a typical year, these three projects combine to produce about half of our generated electricity. Inflows into Brownlee result from a combination of precipitation, storage and ground water conditions. The current mountain snowpack above Brownlee was at 32 percent of normal at May 10, 2001 and our most recent forecast for inflows into Brownlee during the April- July runoff period is 2.2 million acre-feet (MAF). This compares to the 73-year median of 5.0 MAF and last year's 4.4 MAF. Hydro generation on IPC's system decreased 47 percent or 1.3 million MWH in the first quarter of 2001 compared to 2000 because of these poor generating conditions. These conditions are expected to continue through this water year. These conditions have set in motion a number of programs to decrease our reliance on expensive wholesale power. These programs are designed to reduce overall energy use, decrease peak demand levels, and increase generation within our service territory. Significant programs include the following: IPC filed to site a 90-MW simple-cycle, natural gas- fired combustion turbine near Mountain Home, Idaho, targeting completion in August 2001. IPC is also in the process of installing 25 temporary generators at various locations in Boise. These generators, which will be on-site until November 2001, will supply 40 MW during the summer peak usage. The IPUC approved a two-year agreement through which IPC will compensate its largest industrial customer, Astaris, for reducing its load by 50 MW. The load reduction, effective in April 2001, should provide IPC an additional 300,000 MWHs in 2001. In March 2001, the IPUC and OPUC approved a program that compensates large customers who voluntarily reduce load by at least one MW when requested to do so by IPC. The IPUC and OPUC have also approved a program that compensates irrigation customers capable of reducing usage by at least 100 MWh. The program is projected to reduce usage by 500,000 MWh, more than 25 percent of normal irrigation load. As part of the May 2001 PCA discussed above, the IPUC required IPC to implement a tiered rate structure for Idaho residential customers. This rate structure increases rates as a customer's usage increases. IPC is also studying residential and commercial conservation programs, e.g. fluorescent light bulbs, AC heat pump servicing, and methods of funding such programs. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this item is included in Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations" under "Other Matters - Energy Marketing". PART II - OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds On November 6, 2000, IDACORP issued $154,500 shares of common stock to certain key shareholder of Rocky Mountain Communications in connection with IDACORP'S acquisition of Rocky Mountain Communications. The IDACORP stock was issued in exchange for 3,047,453 shares of common stock of Rocky Mountain Communications held by these shareholders. The issuance of the shares was exempt from registration pursuant to Section 4 (2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder. The transaction involved fewer than 35 purchasers, information was provided to such purchasers as required by Regulation D, and the applicable form was filed with the Commission. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 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) 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(c) 33-56071 3(d) Articles of Share Exchange, as filed with the Secretary of State of Idaho on September 29, 1998. *3(d) 333-64737 3.1 Articles of Incorporation of IDACORP, Inc. *3(e) 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(f) 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(g) 1-14465 3(c) Amended Bylaws of IDACORP, Inc. as of Form 10-Q 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 4 Thirty-fifth November 1, 2000 Form 8-K Dated 11/21/0 *4(b) 33-65720 10(c) Instruments relating to IPC American Falls bond guarantee. (see Exhibit 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 15, Rights Agent. 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) 33-65720 10(c) Guaranty Agreement, dated March 1, 1990, between IPC and West One Bank, as Trustee, relating to $21,425,000 American Falls Replacement Dam 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- for 1994 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 14465 10(e) IDACORP, Inc. Non-Employee Directors Form 10-Q Stock Compensation Plan as of May 17, for 6/30/99 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) 15 Letter Re: Unaudited Interim Financial information. 21 Subsidiaries of IDACORP, Inc. and IPC. 1 Compensatory plan (b) Reports on Form 8-K. The following reports on Form 8-K were filed for the three months ended March 31, 2001. Items Reported Date of Report Filed By Item 5 - Other events and FD disclosure and February 23, 2001 IPC and IDACORP, Inc. Item 7 - Financial statements and exhibits Item 7 - Financial statements and exhibits February 28, 2001 IDACORP, Inc. * Previously filed and Incorporated herein by Reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IDACORP, Inc. (Registrant) Date May 15, 2001 By: /s/ J LaMont Keen J LaMont Keen Senior Vice President Administration and Chief Financial Officer (Principal Financial Officer) Date May 15, 2001 By: /s/ Darrel T Anderson Darrel T Anderson Vice President-Finance and Treasurer (Principal Accounting Officer) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IDAHO POWER COMPANY (Registrant) Date May 15, 2001 By: /s/ J LaMont Keen J LaMont Keen Senior Vice President Administration and Chief Financial Officer (Principal Financial Officer) Date May 15, 2001 By: /s/ Darrel T Anderson Darrel T Anderson Vice President-Finance and Treasurer (Principal Accounting Officer)