-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JmyQLJvgWTlL7GilSDDbrmNODmop1/KCPYH4YY4tzGPke5lgcJmgaSLCUia+ltAn eo1xXShJLuVErZCJzo3RjQ== 0000049648-00-000007.txt : 20000307 0000049648-00-000007.hdr.sgml : 20000307 ACCESSION NUMBER: 0000049648-00-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 20000303 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDAHO POWER CO CENTRAL INDEX KEY: 0000049648 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 820130980 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-03198 FILM NUMBER: 560408 BUSINESS ADDRESS: STREET 1: 1221 W IDAHO ST STREET 2: PO BOX 70 CITY: BOISE STATE: ID ZIP: 83702 BUSINESS PHONE: 2083882200 10-Q 1 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 June 30, 1999 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, state I.R.S. Employer Commission of incorporation, address of Identification File Number principal executive offices, and Number telephone 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 June 30, 1999: IDACORP, Inc.: 37,612,351 Idaho Power Company: 37,612,351 shares, all of which are held by IDACORP,Inc. INDEX Page Definitions 2 Part I. Financial Information: Item 1. Financial Statements IDACORP, Inc: Consolidated Statements of Income 3-4 Consolidated Balance Sheets 5-6 Consolidated Statements of Capitalization 7 Consolidated Statements of Cash Flows 8 Notes to Consolidated Financial Statements 9-13 Independent Accountants' Report 14 Idaho Power Company: Consolidated Statements of Income 15-16 Consolidated Balance Sheets 17-18 Consolidated Statements of Capitalization 19 Consolidated Statements of Cash Flows 20 Notes to Consolidated Financial Statements 21-22 Independent Accountants' Report 23 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24-31 Part II. Other Information: Item 4. Submission of Matters to a Vote of Security Holders 32-33 Item 6. Exhibits and Reports on Form 8-K 34-37 Signatures 38-39 DEFINITIONS FASB Financial Accounting Standards Board FERC Federal EnergyRegulatory Commission IPUC Idaho Public Utilities Commission KWh kilowatt-hour MAF Million Acre-Feet MMbtu Million British Thermal Units MWh Megawatt-hour OPUC Oregon PublicUtilities Commission PCA Power Cost Adjustment PUCN Public UtilityCommission of Nevada REA Rural Electrification Administration SFAS Statement ofFinancial Accounting Standards FORWARD LOOKING INFORMATION This Form 10-Q 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-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 and include, but are not limited to, statements under the heading "Other Matters" concerning the outcome of IDACORP, Inc.'s and Idaho Power Company's Year 2000 efforts. PART I - FINANCIAL INFORMATION Item 1. Financial Statements IDACORP, Inc. Consolidated Statements of Income Three Months Ended June 30, 1999 1998 (Thousands of Dollars except for per share amounts) REVENUES: General business $ 129,530 $ 120,997 Off-system sales 29,520 38,487 Other revenues 6,022 7,648 Total revenues 165,072 167,132 EXPENSES: Operation: Purchased power 22,527 25,242 Fuel expense 18,854 14,303 Power cost adjustment 6,192 13,814 Other 41,196 38,606 Maintenance 11,499 11,525 Depreciation 19,404 19,044 Taxes other than income taxes 5,676 5,501 Total expenses 125,348 128,035 INCOME FROM OPERATIONS 39,724 39,097 OTHER INCOME: Allowance for equity funds used during construction 230 24 Energy trading activities - Net 7,096 3,198 Other - Net 1,893 3,503 Total other income 9,219 6,725 INTEREST EXPENSE AND OTHER: Interest on long-term debt 13,758 13,060 Other interest 2,200 2,060 Allowance for borrowed funds used during construction (134) (279) Preferred dividends of Idaho Power Company 1,352 1,417 Total interest expense and other 17,176 16,258 INCOME BEFORE INCOME TAXES 31,767 29,564 INCOME TAXES 10,525 9,213 NET INCOME $ 21,242 $ 20,351 AVERAGE COMMON SHARES OUTSTANDING (000) 37,612 37,612 EARNINGS PER SHARE OF COMMON STOCK (basic and diluted) $ 0.56 $ 0.54 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Statements of Income Six Months Ended June 30, 1999 1998 (Thousands of Dollars except for per share amounts) REVENUES: General business $ 259,222 $ 233,220 Off-system sales 67,031 87,643 Other revenues 12,969 17,182 Total revenues 339,222 338,045 EXPENSES: Operation: Purchased power 40,415 52,977 Fuel expense 40,875 35,023 Power cost adjustment 15,198 14,289 Other 73,964 71,553 Maintenance 19,382 20,553 Depreciation 38,575 37,940 Taxes other than income taxes 11,259 10,844 Total expenses 239,668 243,179 INCOME FROM OPERATIONS 99,554 94,866 OTHER INCOME: Allowance for equity funds used during construction 387 24 Energy trading activities - Net 7,843 2,870 Other - Net 4,126 5,605 Total other income 12,356 8,499 INTEREST EXPENSE AND OTHER: Interest on long-term debt 27,153 26,097 Other interest 4,429 4,146 Allowance for borrowed funds used during construction (358) (440) Preferred dividends of Idaho Power Company 2,720 2,822 Total interest expense and other 33,944 32,625 INCOME BEFORE INCOME TAXES 77,966 70,740 INCOME TAXES 27,224 22,338 NET INCOME $ 50,742 $ 48,402 AVERAGE COMMON SHARES OUTSTANDING (000) 37,612 37,612 EARNINGS PER SHARE OF COMMON STOCK (basic and diluted)$ 1.35 $ 1.29 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Balance Sheets Assets June 30, December 31, 1999 1998 (Thousands of Dollars) ELECTRIC PLANT: In service (at original cost) $ 2,690,424 $ 2,659,441 Accumulated provision for depreciation (1,042,176) (1,009,387) In service - Net 1,648,248 1,650,054 Construction work in progress 75,915 59,717 Held for future use 1,742 1,738 Electric plant - Net 1,725,905 1,711,509 INVESTMENTS AND OTHER PROPERTY 139,280 129,437 CURRENT ASSETS: Cash and cash equivalents 14,671 22,867 Receivables: Customer 81,123 81,245 Allowance for uncollectible accounts (1,397) (1,397) Natural gas 33,120 21,426 Notes 4,679 4,643 Employee notes 4,487 4,510 Other 7,633 6,059 Energy trading assets 82,988 - Accrued unbilled revenues 33,586 34,610 Materials and supplies (at average cost) 31,995 30,157 Fuel stock (at average cost) 9,725 7,096 Prepayments 14,511 16,042 Regulatory assets associated with income taxes 2,965 2,965 Total current assets 320,086 230,223 DEFERRED DEBITS: American Falls and Milner water rights 31,585 31,830 Company-owned life insurance 43,672 35,149 Regulatory assets associated with income taxes 201,850 201,465 Regulatory assets - other 40,495 62,013 Other 50,625 49,994 Total deferred debits 368,227 380,451 TOTAL $ 2,553,498 $ 2,451,620 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Balance Sheets Capitalization and Liabilities June 30, December 31, 1999 1998 (Thousands of Dollars) CAPITALIZATION: Common stock equity: Common stock without par value (shares authorized 120,000,000; shares outstanding 37,612,351) $ 451,076 $ 451,564 Retained earnings 294,418 278,607 Accumulated other comprehensive income 226 226 Total common stock equity 745,720 730,397 Preferred stock of Idaho Power Company 105,919 105,968 Long-term debt 738,547 815,937 Total capitalization 1,590,186 1,652,302 CURRENT LIABILITIES: Long-term debt due within one year 86,193 6,029 Notes payable 48,150 38,524 Accounts payable 69,439 73,499 Accounts payable - natural gas 21,075 28,476 Energy trading liabilities 83,017 - Taxes accrued 27,374 24,785 Interest accrued 18,445 18,365 Deferred income taxes 2,965 2,965 Other 14,973 12,275 Total current liabilities 371,631 204,918 DEFERRED CREDITS: Regulatory liabilities associated with deferred investment tax credits 68,424 69,396 Deferred income taxes 421,271 422,196 Regulatory liabilities associated with income taxes 28,075 28,075 Regulatory liabilities - other 2,122 4,161 Other 71,789 70,572 Total deferred credits 591,681 594,400 COMMITMENTS AND CONTINGENT LIABILITIES TOTAL $ 2,553,498 $ 2,451,620 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Statements of Capitalization June 30, December 31, 1999 % 1998 % (Thousands of Dollars) COMMON STOCK EQUITY: Common stock $ 451,076 $ 451,564 Retained earnings 294,418 278,607 Accumulated other comprehensive income 226 226 Total common stock equity 745,720 47 730,397 44 PREFERRED STOCK OF IDAHO POWER COMPANY: 4% preferred stock 15,919 15,968 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 105,919 7 105,968 7 LONG-TERM DEBT OF IDAHO POWER COMPANY: First mortgage bonds: 8.65% Series due 2000 80,000 80,000 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 Maturing 2021 through 2031 with rates ranging from 7.5% to 9.52% 230,000 230,000 Total first mortgage bonds 557,000 557,000 Amount due within one year (80,000) - Net first mortgage bonds 477,000 557,000 Pollution control revenue bonds: 7 1/4% Series due 2008 4,360 4,360 8.30 % Series 1984 due 2014 49,800 49,800 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 Total pollution control revenue bonds 170,460 170,460 REA notes 1,452 1,489 Amount due within one year (75) (74) Net REA notes 1,377 1,415 American Falls bond guarantee 19,885 20,130 Milner Dam note guarantee 11,700 11,700 Debt related to investments in affordable housing with rates ranging from 6.03% to 8.59% due 1999 to 2009 65,095 62,103 Amount due within one year (6,118) (5,955) Net affordable housing debt 58,977 56,148 Unamortized premium/discount - Net (1,490) (1,539) Net Idaho Power Company debt 737,909 815,314 OTHER SUBSIDIARY DEBT 638 623 Total long-term debt 738,547 46 815,937 49 TOTAL CAPITALIZATION $ 1,590,186 100 $ 1,652,302 100 The accompanying notes are an integral part of these statements. IDACORP, Inc. Consolidated Statements of Cash Flows Six Months Ended June 30, 1999 1998 (Thousands of Dollars) OPERATING ACTIVITIES: Net income $ 50,742 $ 48,402 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 47,717 43,562 Deferred taxes and investment tax credits (2,282) (2,453) Accrued PCA costs 15,122 14,081 Change in: Accounts receivable and prepayments (11,628) 9,808 Accrued unbilled revenue 1,024 1,001 Materials and supplies and fuel stock (4,467) (1,057) Accounts payable (11,461) (27,383) Taxes accrued 2,589 3,232 Other current assets and liabilities 2,778 (289) Other - net (4,689) (672) Net cash provided by operating activities 85,445 88,232 INVESTING ACTIVITIES: Additions to utility plant (51,517) (43,659) Investments in affordable housing projects (10,591) (10,125) Investments in company-owned life insurance (6,749) - Other - net (1,915) (3,961) Net cash used in investing activities (70,772) (57,745) FINANCING ACTIVITIES: Issuance of long-term debt related to affordable housing projects 7,271 4,896 Retirement of long-term debt related to affordable housing projects (4,279) - Dividends on common stock (34,931) (34,979) Increase (Decrease) in short-term borrowings 9,626 (4,989) Other - net (556) 110 Net cash used in financing activities (22,869) (34,962) Net decrease in cash and cash equivalents (8,196) (4,475) Cash and cash equivalents beginning of period 22,867 6,905 Cash and cash equivalents at end of period $ 14,671 $ 2,430 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Income taxes $ 24,784 $ 27,132 Interest (net of amount capitalized) $ 30,095 $ 25,078 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), a holding company formed in 1998, is the parent of Idaho Power Company (IPC), Ida-West Energy Company, IDACORP Energy Solutions Co., IDACORP Energy Services Co. and IDACORP Technologies, Inc. On October 1, 1998 IPC's outstanding common stock was converted on a share-for-share basis into common stock of the Company. However, IPC's preferred stock and debt securities outstanding were unaffected and remain with IPC. IPC, a public utility, represents over 90% of the total assets of the Company and is its principal operating subsidiary. 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. 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 June 30, 1999, and its consolidated results of operations and cash flows for the three and six months ended June 30, 1999 and 1998. 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, 1998. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. 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. Accounting for Contracts Involved in Energy Trading and Risk Management Activities The Company adopted Emerging Issues Task Force 98-10 "Accounting for Contracts Involved in Energy Trading Activities," (EITF 98-10) effective January 1, 1999. The consensus establishes standards for designating between energy contracts and energy trading contracts and accounting for each. Energy trading contracts are reported at fair value as of the balance sheet date with the resulting gains and losses reported in the income statement. The resulting impact on net income of adoption was immaterial. Related to the adoption of EITF 98-10, the Company has begun reporting electricity trading activity net (netting revenues and expenses) in "Other Income-Energy trading activities-net" on the Consolidated Statements of Income. Prior periods have been reclassified to conform with the current period's presentation with no impact to net income. Derivative Financial Instruments The Company uses financial instruments such as commodity forwards, futures, options and swaps to hedge against exposure to commodity price risk in the electricity and natural gas markets as well as to optimize its energy trading portfolio. The accounting for derivative financial instruments 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 recently issued EITF 98-10. Gains and losses from derivative instruments designed to hedge energy trading contracts as defined by EITF 98-10 are recognized in income on a current basis along with the gains and losses of the hedged transaction. Additionally, gains and losses on derivative transactions not qualifying as a hedge are recognized currently in income. Cash flows from derivatives are recognized in the statement of cash flows as an operating activity. Comprehensive Income For the six-month periods ended June 30, 1999 and 1998, the Company's comprehensive income was not materially different from net income. The components of comprehensive income include net income, 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. Reclassifications Certain items previously reported for periods prior to June 30, 1999 have been reclassified to conform with the current period's presentation. Net income was not affected by these reclassifications. 2. INCOME TAXES: The Company's effective tax rate for the first six months increased from 31.6 percent in 1998 to 34.9 percent in 1999. Reconciliations between the statutory income tax rate and the effective rates for the six-month periods ended June 30, 1999 and 1998 are as follows: 1999 1998 Amount Rate Amount Rate Computed income taxes based on statutory federal income tax rate $ 27,288 35.0% $ 24,759 35.0% Changes in taxes resulting from: Current state income taxes 4,230 5.4 3,058 4.3 Net depreciation 2,662 3.4 2,677 3.8 Investment tax credits restored (1,481) (1.9) (1,462) (2.1) Removal costs (375) (0.5) (877) (1.2) Repair allowance (1,137) (1.5) (1,564) (2.2) Affordable housing credits (4,222) (5.4) (3,177) (4.5) Preferred dividends 952 1.2 988 1.4 Settlement of prior year tax returns - - (1,000) (1.4) Other (693) (0.8) (1,064) (1.5) Total $ 27,224 34.9% $ 22,338 31.6% 3. PREFERRED STOCK OF IDAHO POWER COMPANY: The number of shares of IPC preferred stock outstanding were as follows: June 30, December 31, 1999 1998 Cumulative, $100 par value: 4% preferred stock (authorized 215,000 shares) 159,190 159,680 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: 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 June 30, 1999, none had been issued. IPC currently has a $200.0 million shelf registration statement with a balance of $83.0 million remaining to be issued. This can be used for first mortgage bonds (including medium term notes) or preferred stock. 5. COMMITMENTS AND CONTINGENT LIABILITIES: Commitments under contracts and purchase orders relating to the Company's program for construction and operation of facilities amounted to approximately $6.6 million at June 30, 1999. The commitments are generally revocable by the Company subject to reimbursement of manufacturers' expenditures incurred and/or other termination charges. The Company is party to various legal claims, actions, and complaints, certain of which 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. 6. REGULATORY ISSUES: PCA IPC has a PCA mechanism that provides for annual adjustments to the rates charged to Idaho retail customers. These adjustments, which take effect annually on May 16, 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. For the 1999-2000 rate period, actual power supply costs have been less than forecast, due to better than forecast hydroelectric generating conditions. IPC has recorded a reduction to regulatory assets of $7.1 million as of June 30, 1999. The May 16, 1999 rate adjustment reduced Idaho general business customer rates by 9.2 percent. The decrease results from projected above-average hydroelectric generating conditions and the true-up of the 1998-99 rate period. Overall, IPC's annual general business revenues are expected to decrease by $40.4 million. Regulatory Settlement Under the terms of an IPUC Settlement in effect through 1999, when earnings in IPC's Idaho jurisdiction exceed an 11.75 percent return on year-end common equity, 50 percent of the excess is set aside for the benefit of Idaho retail customers. On April 7, 1999 IPC submitted the 1998 annual earnings sharing compliance filing to the IPUC. This filing indicated that there was almost $6.4 million in earnings before authorized deductions, or $3.3 million after authorized deductions, available for the benefit of IPC's Idaho customers. On June 16, 1999 IPC filed a supplement to the April 7, 1999 annual earnings sharing compliance filing requesting that the $3.3 million of remaining 1997 and 1998 revenue sharing be refunded to its customers. On July 19, 1999 the IPUC issued Order No. 28099 in Case IPC-E-99-2, refunding $0.7 million to special contract and large customers. The remaining balance of $2.6 million has been deferred with interest until May 2000. DSM (Conservation) Expenses IPC has obtained changes to the regulatory treatment of previously deferred DSM expenses in both Idaho and Oregon. In Idaho, 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. In its Order No. 27660 issued on July 31, 1998, the IPUC set a new amortization period of 12 years instead of the 24-year period previously adopted. The IPUC order reflects an increase in annual Idaho retail revenue requirements of $3.1 million for 12 years. Per Order No. 27660 issued July 31, 1998, IPC funded the 1998 annual revenue requirement with 1997 revenue sharing amounts from July 1998 until May 16, 1999. A group of industrial customers has appealed the IPUC order to the Idaho Supreme Court. In December 1998, IPC filed with the IPUC a request to recover remaining deferred DSM expenditures of approximately $2.1 million. The IPUC conducted a hearing on this matter in March 1999. In the filing IPC requested that the amount be applied against 1998 earnings sharing amounts. On May 11, 1999 IPC received Order No. 28041 allowing for $1.5 million recovery of existing and future DSM expenditures to be funded out of 1998 revenue sharing funds. In Oregon, the OPUC authorized a five-year amortization of the Oregon-allocated share of DSM expenditures incurred through 1997. The DSM charge replaces an expiring rate surcharge related to extraordinary power supply costs associated with past drought conditions. IPC anticipates that the charge will recover approximately $540,000 per year. 7. NEW ACCOUNTING PRONOUNCEMENT: In June 1998 the FASB issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative financial instruments and other similar instruments and for hedging activities. It was originally effective for fiscal years beginning after June 15, 1999. In June 1999 the FASB issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Standard No. 133", which defers the effective date of SFAS No. 133 one year. The Company is reviewing SFAS No. 133 to determine its effects on the Company's financial position and results of operations. 8. DERIVATIVE FINANCIAL INSTRUMENTS: The notional amount of open commodity derivative positions as of June 30, 1999 was a net long electricity position of 305 MW and a net long natural gas position of 98 BCF. The loss in fair value of commodity derivative positions (including natural gas and electricity forwards, futures, options and swaps) included in income before income taxes for the six months ended June 30, 1999 was $(2.2) million. 9. INDUSTRY SEGMENT INFORMATION: IDACORP's dominant operating segment is the regulated utility operations of IPC. IDACORP's non-utility operating segments do not individually constitute more than 10% of enterprise revenues, income or assets, nor in aggregate do they comprise more than 25% of enterprise revenues, income or assets. IPC's primary business is the generation, transmission, distribution, purchase and sale of electricity. Substantially all of the Company's revenue comes from the sale of electricity and related services, predominately in the United States. The Company also sells natural gas, solar electric products and systems, control systems integration services for substations and semiconductor manufacturing, and other miscellaneous services. Revenues from these operations are not significant. The following table summarizes the segment information for IPC utility operations, with a reconciliation to total enterprise information: IPC Total Utility Other Enterprise (Thousands of Dollars) Six months ended June 30, 1999: Revenues $ 339,222 $ - $ 339,222 Net income 46,097 4,645 50,742 Total assets at June 30, 1999 2,339,057 214,441 2,553,498 Six months ended June 30, 1998: Revenues $ 338,045 $ - $ 338,045 Net income 46,655 1,747 48,402 Total assets at December 31,1998 2,310,322 141,298 2,451,620 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 June 30, 1999, and the related consolidated statements of income for the three and six month periods ended June 30, 1999 and 1998 and consolidated statements of cash flows for the six month periods ended June 30, 1999 and 1998. 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 making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, 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 generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet and statement of capitalization of IDACORP, Inc. and subsidiaries as of December 31, 1998, 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 January 29, 1999, 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, 1998 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 July 30, 1999 Idaho Power Company Consolidated Statements of Income Three Months Ended June 30, 1999 1998 (Thousands of Dollars) REVENUES: General business $ 129,530 $ 120,997 Off-system sales 29,520 38,487 Other revenues 6,022 7,648 Total revenues 165,072 167,132 EXPENSES: Operation: Purchased power 22,527 25,242 Fuel expense 18,854 14,303 Power cost adjustment 6,192 13,814 Other 41,196 38,606 Maintenance 11,499 11,525 Depreciation 19,404 19,044 Taxes other than income taxes 5,676 5,501 Total expenses 125,348 128,035 INCOME FROM OPERATIONS 39,724 39,097 OTHER INCOME: Allowance for equity funds used during construction 230 24 Energy trading activities - Net 7,860 3,198 Other - Net 788 3,503 Total other income 8,878 6,725 INTEREST CHARGES: Interest on long-term debt 13,720 13,060 Other interest 1,741 2,060 Allowance for borrowed funds used during construction (134) (279) Total interest charges 15,327 14,841 INCOME BEFORE INCOME TAXES 33,275 30,981 INCOME TAXES 10,479 9,213 NET INCOME 22,796 21,768 Dividends on preferred stock 1,352 1,417 EARNINGS ON COMMON STOCK $ 21,444 $ 20,351 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Income Six Months Ended June 30, 1999 1998 (Thousands of Dollars) REVENUES: General business $ 259,222 $ 233,220 Off system sales 67,031 87,643 Other revenues 12,969 17,182 Total revenues 339,222 338,045 EXPENSES: Operation: Purchased power 40,415 52,977 Fuel expense 40,875 35,023 Power cost adjustment 15,198 14,289 Other 73,964 71,553 Maintenance 19,382 20,553 Depreciation 38,575 37,940 Taxes other than income taxes 11,259 10,844 Total expenses 239,668 243,179 INCOME FROM OPERATIONS 99,554 94,866 OTHER INCOME: Allowance for equity funds used during construction 387 24 Energy trading activities - Net 8,586 2,870 Other - Net 2,739 5,605 Total other income 11,712 8,499 INTEREST CHARGES: Interest on long-term debt 27,080 26,097 Other interest 3,903 4,146 Allowance for borrowed funds used during construction (358) (440) Total interest charges 30,625 29,803 INCOME BEFORE INCOME TAXES 80,641 73,562 INCOME TAXES 27,061 22,338 NET INCOME 53,580 51,224 Dividends on preferred stock 2,720 2,822 EARNINGS ON COMMON STOCK $ 50,860 $ 48,402 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Balance Sheets Assets June 30, December 31, 1999 1998 (Thousands of Dollars) ELECTRIC PLANT: In service (at original cost) $ 2,690,424 $ 2,659,441 Accumulated provision for depreciation (1,042,176) (1,009,387) In service - Net 1,648,248 1,650,054 Construction work in progress 73,834 58,904 Held for future use 1,742 1,738 Electric plant - Net 1,723,824 1,710,696 INVESTMENTS AND OTHER PROPERTY 110,207 105,600 CURRENT ASSETS: Cash and cash equivalents 5,508 20,029 Receivables: Customer 80,974 81,227 Allowance for uncollectible accounts (1,397) (1,397) Natural gas - 21,426 Notes 361 467 Employee notes 4,487 4,510 Other (including $1,040 and $3,164 from related parties in 1999 and 1998 respectively) 8,657 8,502 Energy trading assets 66,459 - Accrued unbilled revenues 33,586 34,610 Materials and supplies (at average cost) 31,781 30,143 Fuel stock (at average cost) 9,725 7,096 Prepayments 14,440 16,011 Regulatory assets associated with income taxes 2,965 2,965 Total current assets 257,546 225,589 DEFERRED DEBITS: American Falls and Milner water rights 31,585 31,830 Company-owned life insurance 43,672 35,149 Regulatory assets associated with income taxes 201,850 201,465 Regulatory assets - other 40,495 62,013 Other 50,028 49,448 Total deferred debits 367,630 379,905 TOTAL $ 2,459,207 $ 2,421,790 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Balance Sheets Capitalization and Liabilities June 30, December 31, 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 Premium on capital stock 362,169 362,156 Capital stock expense (3,821) (3,823) Retained earnings 268,017 252,137 Accumulated other comprehensive income 226 226 Total common stock equity 720,622 704,727 Preferred stock 105,919 105,968 Long-term debt 738,547 815,937 Total capitalization 1,565,088 1,626,632 CURRENT LIABILITIES: Long-term debt due within one year 86,193 6,029 Notes payable 17,276 38,508 Accounts payable 69,246 72,660 Accounts payable-natural gas - 28,476 Energy trading liabilities 70,744 - Taxes accrued 27,406 25,164 Interest accrued 18,435 18,364 Deferred income taxes 2,965 2,965 Other 14,415 12,117 Total current liabilities 306,680 204,283 DEFERRED CREDITS: Regulatory liabilities associated with deferred investment tax credits 68,424 69,396 Deferred income taxes 419,520 420,268 Regulatory liabilities associated with income taxes 28,075 28,075 Regulatory liabilities - other 2,122 4,161 Other 69,298 68,975 Total deferred credits 587,439 590,875 COMMITMENTS AND CONTINGENT LIABILITIES TOTAL $ 2,459,207 $ 2,421,790 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Capitalization June 30, December 31, 1999 % 1998 % (Thousands of Dollars) COMMON STOCK EQUITY: Common stock $ 94,031 $ 94,031 Premium on capital stock 362,169 362,156 Capital stock expense (3,821) (3,823) Retained earnings 268,017 252,137 Accumulated other comprehensive income 226 226 Total common stock equity 720,622 704,727 46 43 PREFERRED STOCK: 4% preferred stock 15,919 15,968 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 105,919 7 105,968 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 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 Maturing 2021 through 2031 with rates ranging from 7.5% to 9.52% 230,000 230,000 Total first mortgage bonds 557,000 557,000 Amount due within one year (80,000) - Net first mortgage bonds 477,000 557,000 Pollution control revenue bonds: 7 1/4% Series due 2008 4,360 4,360 8.30 % Series 1984 due 2014 49,800 49,800 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 Total pollution control revenue bonds 170,460 170,460 REA notes 1,452 1,489 Amount due within one year (75) (74) Net REA notes 1,377 1,415 American Falls bond guarantee 19,885 20,130 Milner Dam note guarantee 11,700 11,700 Debt related to investments in affordable housing with rates ranging from 6.03% to 8.59% due 1999 to 2009 65,095 62,103 Amount due within one year (6,118) (5,955) Net affordable housing debt 58,977 56,148 Other subsidiary debt 638 623 Unamortized premium/discount - Net (1,490) (1,539) Total long-term debt 738,547 47 815,937 50 TOTAL CAPITALIZATION $ 1,565,088 100 $ 1,626,632 100 The accompanying notes are an integral part of these statements. Idaho Power Company Consolidated Statements of Cash Flows Six Months Ended June 30, 1999 1998 (Thousands of Dollars) OPERATING ACTIVITIES: Net income $ 53,580 $ 51,224 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 47,592 43,562 Deferred taxes and investment tax credits (2,105) (2,453) Accrued PCA costs 15,122 14,081 Change in: Accounts receivable and prepayments 1,798 9,808 Accrued unbilled revenue 1,024 1,001 Materials and supplies and fuel stock (4,267) (1,057) Accounts payable (3,414) (27,383) Taxes accrued 2,242 3,232 Other current assets and liabilities 2,369 (289) Other - net (7,681) (672) Net cash provided by operating activities 106,260 91,054 INVESTING ACTIVITIES: Additions to utility plant (50,249) (43,659) Investments in affordable housing projects (10,591) (10,125) Investments in company owned life insurance (6,749) - Other - net 2,803 (3,961) Net cash used in investing activities (64,786) (57,745) FINANCING ACTIVITIES: Issuance of long-term debt related to affordable housing projects 7,271 4,896 Retirement of long-term debt related to affordable housing projects (4,279) - Dividends on common stock (34,979) (34,979) Dividends on preferred stock (2,720) (2,822) Decrease in short-term borrowings (21,232) (4,989) Other - net (56) 110 Net cash used in financing activities (55,995) (37,784) Decrease in cash and cash equivalents (14,521) (4,475) Cash and cash equivalents beginning of period 20,029 6,905 Cash and cash equivalents at end of period $ 5,508 $ 2,430 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Income taxes (including amounts paid to parent) $ 23,844 $ 27,132 Interest (net of amount capitalized) $ 29,466 $ 25,078 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 its subsidiaries (IPC). At that time IPC's ownership interests in two subsidiaries were transferred to IDACORP at book value. IPC's Statement of Consolidated Income for the six months ending June 30, 1998 includes $1.8 million of net income attributable to the transferred subsidiaries. In 1999 the gas trading operations of IPC were transferred to another subsidiary of IDACORP. The subsidiary assumed the accounts receivable and accounts payable related to gas trading operations, and IPC recorded the transfer as a reduction of accounts receivable from the subsidiary. IPC's Consolidated Balance Sheet as of December 31, 1998 included $21.4 million of assets and $28.4 million of liabilities related to gas operations. Except as modified below, the Notes to the Consolidated Financial Statements of IDACORP also contained in this 10-Q Report 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 - New Accounting Pronouncement 2. INCOME TAXES: IPC's effective tax rate for the first six months increased from 30.3 percent in 1998 to 33.6 percent in 1999. Reconciliations between the statutory income tax rate and the effective rates for the six-month periods ended June 30, 1999 and 1998 are as follows: 1999 1998 Amount Rate Amount Rate Computed income taxes based on statutory federal income tax rate $ 28,224 35.0% $ 25,747 35.0% Changes in taxes resulting from: Current state income taxes 4,230 5.2 3,058 4.2 Net depreciation 2,662 3.3 2,677 3.6 Investment tax credits restored (1,481) (1.8) (1,462) (2.0) Removal costs (375) (0.5) (877) (1.2) Repair allowance (1,137) (1.4) (1,564) (2.1) Affordable housing credits (4,222) (5.2) (3,177) (4.3) Settlement of prior year tax returns - - (1,000) (1.4) Other (840) (1.0) (1,064) (1.5) Total $ 27,061 33.6% $ 22,338 30.3% 8. DERIVATIVE FINANCIAL INSTRUMENTS: The notional amount of open commodity derivative positions as of June 30, 1999 was a net long electricity position of 305 MW. The loss in fair value of commodity derivative positions (including electricity forwards, futures, options and swaps) included in income before income taxes for the six months ended June 30, 1999 was $(5.2) million. 9. INDUSTRY SEGMENT INFORMATION: IPC's dominant operating segment is its regulated utility operations. IPC's non-utility operating segments do not individually constitute more than 10% of enterprise revenues, income or assets, nor in aggregate do they comprise more than 25% of enterprise revenues, income or assets. IPC's primary business is the generation, transmission, distribution, purchase and sale of electricity. Substantially all of IPC's revenue comes from the sale of electricity and related services, predominately in the United States. IPC subsidiaries also sell solar electric products and systems, control systems integration services for substations and semiconductor manufacturing, and miscellaneous other services. These revenues, however, are not significant. The following table summarizes the segment information for the regulated electric operations, with a reconciliation to total enterprise information: Regulated Electric Total Operations Other Enterprise (Thousands of Dollars) Six months ended June 30, 1999: Revenues $ 339,222 $ - $ 339,222 Net income 46,097 7,483 53,580 Total assets at June 30, 1999 2,339,057 120,150 2,459,207 Six months ended June 30, 1998: Revenues $ 338,045 $ - $ 338,045 Net income 46,655 4,569 51,224 Total assets at December 31, 1998 2,312,919 108,871 2,421,790 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 June 30, 1999, and the related consolidated statements of income for the three and six month periods ended June 30, 1999 and 1998 and consolidated statements of cash flows for the six month periods ended June 30, 1999 and 1998. 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 making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, 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 generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet and statement of capitalization of Idaho Power Company and subsidiaries as of December 31, 1998, 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 January 29, 1999, 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, 1998 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 July 30, 1999 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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). IPC, an electric utility, is IDACORP's principal operating subsidiary, accounting for over 90 percent of IDACORP's assets, revenue and net income. Unless we indicate otherwise, this discussion explains the material changes in results of operations and the financial condition of both the Company and IPC. This discussion should be read in conjunction with the accompanying consolidated financial statements of both IDACORP and IPC. This discussion updates the discussion that we included in our Annual Report on Form 10-K for the year ended December 31, 1998. This discussion should be read in conjunction with the discussion in the annual report. We have reclassified our electricity trading activities from "Off- system sales" and "Purchased power" to "Energy trading activities - net" on the Consolidated Statements of Income for all periods presented. This change was made to more clearly report the results of our utility operations and our energy trading activities. 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, 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); 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; Year 2000 issues; 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: Earnings per Share and Book Value Earnings per share of common stock (basic and diluted) was $0.56 for the quarter ended, and $1.35 per share for the six months ended June 30, 1999, increases of $0.02 (3.7 percent) from the same quarter last year, and $0.06 (4.7 percent) for the six-month period. At June 30, 1999, the book value per share of IDACORP common stock was $19.83, compared to $19.27 at the same date in 1998. General Business Revenue Our general business revenue is dependent on many factors, including the number of customers we serve, the rates we charge, and weather conditions (temperature and precipitation) in our service territory. Compared to the same periods in 1998, the number of general business customers we served increased 3.0 percent for the second quarter and 3.1 percent year-to-date. This increase was due primarily to economic growth in our service territory. Our revenue per MWh increased 1.7 percent for the quarter and 5.9 percent year-to-date, compared to 1998. Changes in revenue per MWh result primarily from the annual rate adjustments authorized by regulatory authorities. These adjustments are discussed below in "PCA" and "Regulatory Settlement." Temperatures in the first half of 1999 were more extreme than in 1998, which contributed to increased sales of energy. Combined, heating degree days and cooling degree days, common measures used in the utility industry to analyze demand, were above 1998 levels by 27.6 percent for the quarter and 15.4 percent year-to-date. Compared to 1998, the average kWh's sold per general business customer increased 2.1 percent for the quarter and 1.9 percent year-to-date. The combination of these factors resulted in general business revenue increases of $8.5 million (7.1 percent) for the quarter and $26.0 million (11.1 percent) year-to-date compared to 1998. Off-System Sales Off-system sales are comprised of long-term sales contracts and opportunity sales made when we have surplus energy available. The decreases of $9.0 million (23.3 percent) for the quarter and $20.6 million (23.5 percent) year-to-date are due primarily to decrease in MWhs sold of 14.1 percent for the quarter and 16.1 percent year-to-date. Decreased sales resulted primarily from reduced market opportunities. Expenses Purchased power expenses decreased $2.7 million (10.8 percent) for the quarter and $12.6 million (23.7 percent) year-to-date. These decreases are due primarily to reduced system requirements in 1999. Fuel expenses increased $4.6 million (31.8 percent) for the quarter and $5.9 million (16.7 percent) year-to-date. These increases are due primarily to 37.1 percent and 15.7 percent respective increases in MWh generated at our coal-fired power plants to meet operating requirements. The PCA component of expenses decreased $7.6 million for the quarter. The PCA 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 the second quarter of 1999, actual power supply costs were below what had been forecast, but not to the extent that costs were below forecast in the second quarter of 1998. The 1998-99 forecast used to set the 1998-99 PCA rate adjustment, anticipated near-normal streamflow conditions. Actual conditions have been better than forecasted and are discussed below in "Streamflow Conditions." We discuss the PCA in more detail below in "PCA." Other operating expenses increased $2.6 million (6.7 percent) for the quarter and $2.6 million (3.4 percent) year-to-date. This increase is due primarily to increased MWh generation at our coal- fired generating facilities. Other Other income increased $2.5 million (37.1 percent) for the quarter and $3.9 million (45.4 percent) year to date, due primarily to improved results from energy marketing activities. Income taxes increased $1.3 million (14.2 percent) for the quarter and $4.9 million (21.9 percent) due primarily to increased net income before taxes and the impact of a tax settlement which reduced expenses in 1998. LIQUIDITY AND CAPITAL RESOURCES: Cash Flow For the six months ended June 30, 1999, IDACORP generated $85.4 million in net cash from operations. After deducting for dividends, net cash generation from operations provided approximately $50.5 million for our construction program and other capital requirements. Cash Expenditures We estimate that our total cash construction expenditures for 1999 will be approximately $115.5 million. This estimate is subject to revision in light of changing economic, regulatory, and environmental factors. During the first six months of 1999, we spent approximately $51.5 million for construction. Our primary financial commitments and obligations are related to contracts and purchase orders associated with ongoing construction programs. To the extent required, we expect to finance these commitments and obligations by using both internally generated funds and externally financed capital. At June 30, 1999, our short-term borrowings totaled $48.2 million. Financing Program IDACORP 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 June 30, 1999, none had been issued. IPC has a $200.0 million shelf registration statement that can be used for both First Mortgage Bonds (including Medium Term Notes) and Preferred Stock of which $83.0 million remains available at June 30, 1999. Our objective is to maintain capitalization ratios of approximately 45 percent common equity, 5 to 10 percent preferred stock, and the balance in long-term debt. For the twelve-month period ended June 30, IDACORP's consolidated pre-tax interest coverage was 2.89 times. REGULATORY ISSUES: 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 on May 16, 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. For the 1999 - 2000 rate year, actual power costs have been less than forecast, due to better than forecast hydroelectric generating conditions. For the rate period we have recorded a reduction to regulatory assets of $7.1 million as of June 30, 1999. Our May 16, 1999 rate adjustment reduced Idaho customer rates by 9.2 percent. The decrease results from projected above-average hydroelectric generating conditions and the true-up of the 1998- 99 rate period. Overall, IPC's annual general business revenues are expected to decrease by $40.4 million. Regulatory Settlement IPC has a settlement agreement with the IPUC that remains in effect through 1999. Under the terms of the settlement, when earnings in our Idaho jurisdiction exceed 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. On April 7, 1999 we submitted our 1998 annual earnings sharing compliance filing to the IPUC. This filing indicated that there was almost $6.4 million in earnings before authorized deductions, or $3.3 million after authorized deductions, available for the benefit of our Idaho customers. On June 16, 1999 IPC filed a supplement to the April 7, 1999 annual earnings sharing compliance filing requesting that the $3.3 million of remaining 1997 and 1998 revenue sharing be refunded to its customers. On July 19, 1999 the IPUC issued Order No. 28099 in Case IPC-E-99-2, refunding $0.7 million to special contract and large customers. The remaining balance of $2.6 million has been deferred with interest until May 2000. OTHER MATTERS: Energy Trading Energy trading activity, which includes both electricity and natural gas, is reported on a fair value basis with gains and losses recorded in other income. Inherent in the energy trading business are risks related to market movements and the creditworthiness of counterparties. When buying and selling energy, the high volatility of energy prices can have a significant impact on profitability if not managed. Also, counterparty creditworthiness is key to ensuring that transactions entered into withstand dramatic market fluctuations. To mitigate these risks while implementing our business strategy, the Board of Directors gave approval for executive management to form a Risk Management Committee, comprised of officers of IDACORP and subsidiaries, to oversee a risk management program. The program is intended to minimize fluctuations in earnings while managing the volatility of energy prices. Embedded within the Risk Management policy and procedures is a credit policy requiring a credit evaluation of all counterparties. The objective of our risk management program is to mitigate commodity price risk, credit risk, and other risks related to the energy trading business. Streamflow Conditions We monitor the effect of streamflow conditions on Brownlee Reservoir, the water source for our three Hells Canyon hydroelectric projects. 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. Our current projection for April-July 1999 inflow into Brownlee Reservoir, Idaho Power's key water storage facility, is 8.0 MAF, compared to the 70-year median of 4.9 MAF and 1998's 8.8 MAF. Year 2000 Many existing computer systems use only two digits to identify a year in the date field. These programs were designed and developed without considering the impact of the upcoming change in the century. Unless proper modifications are made, the program logic in many of these systems will start to produce erroneous results because, among other things, the systems will read the date "01/01/00" as being January 1 of the year 1900 or another incorrect date. In addition, the systems may fail to detect that the year 2000 is a leap year. Similar problems could arise prior to the year 2000 as dates in the next millennium are entered into systems that are not Year 2000 compliant. We recognize the Year 2000 problem as a serious threat to the Company and our customers. Our Year 2000 effort has been underway for over two years and is being addressed at the highest levels within the Company. IPC's Vice President of Corporate Services is responsible for coordinating the corporate effort. IPC vice presidents and other IDACORP subsidiary presidents are responsible for addressing the problem within their respective business units and each has assigned a Year 2000 Project Leader to execute the project plan. Each subsidiary President is responsible for addressing the problem within their subsidiary in coordination with the corporate effort. In addition, we have appointed a full-time Year 2000 Project Manager to direct the project. Additional staff has been committed to complete the conversion and implementation needed to bring non-compliant items into compliance. This staff consists of a mix of end users, IPC Information Services staff and contract programmers. Currently, there are over 20 full-time employees devoted to the project with dozens of others involved to varying degrees. We have retained third parties that have completed technical and legal audits of our plan. With respect to the technical audit, we have implemented the recommendations as recommended by the Y2K Steering Committee. The legal audit recommendations are also being implemented. We originally targeted July 1999 as the date by which we expect to be ready for the Year 2000. This means that all critical systems are expected to be capable of handling the century rollover and that we will be able to continue servicing our customers without interruption. It also means that we expect to have identified all of the less critical systems and that contingency and/or repair plans are expected to be in place for dealing with the change of century. At this time, all but one of our critical systems has met this target, with the lone exception scheduled for completion in August. We are following a detailed project plan. The methodology is modeled after those used by some of the top companies in the world and has been adapted to meet our unique requirements. This process includes all the phases and steps commonly found in such plans, including the (I) identification and analysis of critical systems, key manufacturers, service providers, embedded systems, generation plants (parts of which are owned by IPC but are operated by another electric utility), (ii) remediation and testing, (iii) education and awareness and (iv) contingency planning. With respect to that key component of the methodology related to the identification of critical systems, we have identified those critical systems that must be Year 2000 compliant in order to continue operations. Many are already compliant or are in the process of vendor upgrades to become compliant. The largest of these critical systems and their status regarding compliance are set forth below: System Description Status Business The business systems include the PeopleSoft and Systems financial and administrative functions PassPort are common to most companies. Business both compliant systems include accounts payable, vendor general ledger, accounts receivable, packages. labor entry, inventory, purchasing, Testing to cash management, budgeting, asset verify management, payroll, and financial compliance is reporting. complete. Customer This system is used to bill customers, In-house Information log calls from customers and create system has System service or work requests and track been repaired; them through completion, among other testing to things. At this time, the Company verify uses an in-house developed, mainframe- compliance is based Customer Information System to complete accomplish these tasks. Energy The most critical function the Company The packages Management offers is the delivery of electricity comprising the System from the source to the consumer. This EMS are fully must be done with minimal interruption compliant with in the midst of high demand, weather the latest anomalies and equipment failures. To releases. accomplish this, the Company relies on Testing and a server-based energy management rollout are system provided by Landis & Gyr. This over 95% system monitors and directs the complete and delivery of electricity throughout the will be Company's service area. completed in August 1999. Metering The Company relies on several In-house code Systems processes for metering electricity has been usage, including some hand-held repaired and devices with embedded chips. It is tested. critical for metering systems to Vendor operate without interruption so as not packages have to jeopardize the Company's revenue been upgraded. stream. Testing of critical components is complete. Embedded There is a category of systems on Testing is Systems which the Company is highly reliant complete. called embedded systems. These are typically computer chips that provide for automated operations within some device other than a computer such as a relay or a security system. The Company is highly reliant on these systems throughout its generation and delivery systems to monitor and allow manual or automatic adjustments to the desired devices. Those devices with chips that were not Year 2000 compliant, where the chip affected the application of the device, were replaced. Other The Company also relies on a number of In various Systems other important systems to support stages of engineering, human resources, safety repair and and regulatory compliance, etc. testing. Regarding third parties, the plan methodology has required us to identify those third parties with which we have a material relationship. We have identified as material (1) our ownership interest in thermal generating facilities which are operated and maintained by third party electric utilities; (2) our fuel suppliers for those thermal generating facilities; and (3) our telecommunication providers. In addition, we have identified 93 key manufacturers that provide materials and supplies to us. With respect to the thermal plants, fuel suppliers and telecommunication providers, the plan methodology includes a process wherein some members of the Year 2000 team meet periodically with the third parties to assess the status of their efforts. This is an ongoing process and will continue until such time as the third party has completed compliance testing and certified to us that they are compliant. Regarding the 93 key manufacturers we have contacted all via mail and requested they complete a survey indicating the extent and status of their Year 2000 efforts. The survey is followed up with contact by telephone if necessary. We are over 95% complete with that effort. Finally, we are connected to an electric grid that connects utilities throughout the western portion of North America. This interconnection is essential to the reliability and operational integrity of each connected utility. This also means that failure of one electric utility in the interconnected grid could cause the failure of others. In the context of the Year 2000 problem, this interconnectivity compounds the challenge faced by the electric utility industry. Our Company could do a very thorough and effective job of becoming Year 2000 compliant and yet encounter difficulties supplying services and energy because another utility in the interconnected grid failed to achieve Year 2000 compliance. In this regard, we are working closely with other electric industry organizations concerned with reliability issues and technical collaboration. As part of this collaboration we participated and successfully completed our roles in a nationwide Y2K drill for electric utilities, held on April 9, 1999 and plan to participate in a similar drill in September 1999. Our estimate of the cost of our Year 2000 plan remains at approximately $5.3 million. This includes costs incurred to date of approximately $2.9 million and estimated costs through the year 2000. This level of expenditure is not expected to have any material effect on our operations or our financial position. Funds to cover Year 2000 costs in 1999 have been budgeted by business entity and within the Information Services Department with approximately 10 percent of the Information Services budget used for remediation. No information services department projects have been deferred due to the Company's year 2000 efforts. The Year 2000 issue poses risks to our internal operations due to the potential inability to carry on our business activities and from external sources due to the potential impact on the ability of our customers to continue their business activities. The major applications that pose the greatest risks internally are those systems, embedded or otherwise, which impact the generation, transmission and distribution of energy and the metering and billing systems. The potential risks related to these systems are electric service interruptions to customers and associated reduction in loads and revenue and interrupted data gathering and billing and the resultant delay in receipt of revenues. All of this would negatively impact our relationship with our customers that may enhance the likelihood of losing customers in a restructured industry. Externally, those customers that inadequately prepare for the Year 2000 issue may be unable to continue their business activities. This would affect us in a number of ways. Our loads and revenue would be reduced because of the lost load from discontinued business activities, and customers who lose jobs because of discontinued business activities may face difficulties in paying their power bills. The impact of this on us is dependent upon the number and the size of those businesses that are forced to discontinue business activities because of the Year 2000 issue. As part of our Year 2000 plan, we have developed and are finalizing our contingency plans, which should be completed by the end of August 1999. New Accounting Pronouncement In June 1998 the FASB issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative financial instruments and other similar instruments and for hedging activities. It was originally effective for fiscal years beginning after June 15, 1999. In June 1999 the FASB issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Standard No. 133" which defers the effective date of SFAS No. 133 one year. We are reviewing SFAS No. 133 to determine its effects on our financial position and results of operations. Item 4. Submission of Matters to a Vote of Security Holders (a) Regular annual meeting of IDACORP'S stockholders, held May 5, 1999 in Boise, Idaho. (b) Directors elected at the meeting for a three-year term: Roger L. Breezley John B. Carley Jack K. Lemley Evelyn Loveless Directors elected at the meeting for a two-year term: Rotchford L. Barker Robert D. Bolinder Jon H. Miller Robert A. Tinstman Directors elected at the meeting for a one-year term: Jan B. Packwood Peter T. Johnson Joseph W. Marshall Peter S. O'Neill (c)(1)a) To elect twelve Director Nominees; and b) To ratify the selection of Deloitte & Touche LLP (D&T) as independent auditors for the fiscal year ending December 31, 1999. (2) Director Nominees Class of Stock For Withhold Total Voted Common 32,778,990 460,854 33,239,844 (3) Proposal to Ratify Selection of D&T as Independent Auditors Class of Stock For Against Abstain Total Voted Common 32,760,864 166,853 312,127 33,239,844 (4) Election of Directors Name Votes For Votes Withheld Rotchford L. Barker 32,820,115 419,729 Robert D. Bolinder 32,805,195 434,649 Roger L. Breezley 32,805,773 434,071 John B. Carley 32,817,616 422,228 Peter T. Johnson 32,820,366 419,478 Jack K. Lemley 32,823,498 416,346 Evelyn Loveless 32,809,426 430,418 Jon H. Miller 32,782,809 457,035 Joseph W. Marshall 32,799,548 440,296 Peter S. O'Neill 32,784,937 454,907 Jan B. Packwood 32,820,250 419,594 Robert A. Tinstman 32,778,990 460,854 Item 4. Submission of Matters to a Vote of Security Holders (a) Regular annual meeting of Idaho Power Company's stockholders, held May 5, 1999 in Boise, Idaho. (b) Directors elected at the meeting for a three-year term: Roger L. Breezley John B. Carley Jack K. Lemley Evelyn Loveless Continuing Directors: Rotchford L. Barker Jan B. Packwood Robert D. Bolinder Peter T. Johnson Jon H. Miller Joseph W. Marshall Robert A. Tinstman Peter S. O'Neill (c)(1)a) To elect four Director Nominees; and b) To ratify the selection of Deloitte & Touche LLP (D&T) as independent auditors for the fiscal year ending December 31, 1999. (2) Director Nominees Class of Stock For Withhold Total Voted Common 37,612,351 - 37,612,351 4% Preferred 2,133,120 42,420 2,175,540 7.68% Preferred 130,555 315 130,870 Total 39,876,026 42,735 39,918,761 (3) Proposal to Ratify Selection of D&T as Independent Auditors Class of Stock For Against Abstain Total Voted Common 37,612,351 - - 37,612,351 4% Preferred 2,141,100 17,340 17,100 2,175,540 7.68% Preferred 130,460 200 210 130,870 Total 39,883,911 17,540 17,310 39,918,761 (4) Election of Directors Name Votes For Votes Withheld Roger L. Breezley 39,876,026 42,735 John B. Carley 39,876,026 42,735 Jack K. Lemley 39,876,026 42,735 Evelyn Loveless 39,876,026 42,735 PART II - OTHER INFORMATION 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(b) 33-41166 4(b) Waiver resolution to Restated Articles of Incorporation of IPC adopted by Shareholders on May 1, 1991. 3(c) By-laws of IPC amended on July 8, 1999, and presently in effect. *3(d) 33-56071 3(d) Articles of Share Exchange of IDACORP, Inc. 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) Amended Bylaws of IDACORP, Inc. as of July 8, 1999. *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: IPC 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 16, 1993 1-3198 4 Thirty-fourth December 1, 1993 Form 8-K Dated 12/17/93 4(b) Agreement of IPC to furnish certain debt instruments. *4(c) 33-65720 4(e) Rights Agreement dated January 11, 1990, between IPC and First Chicago Trust Company of New York, as Rights Agent (The Bank of New York, successor Rights Agent). *4(c)(I) 1-3198 4(e)(I) Amendment dated as of January 30, Form 10-K 1998, related to agreement filed as for 1997 Exhibit 4(c). *4(d) 1-14465 4 Rights Agreement, dated as of Form 8-K September 10, 1998, between dated IDACORP, Inc. and the Bank of New September York as Rights Agent. 15, 1998 *10(a)1 1-3198 10(n)(I) The Revised Security Plan for Form 10-K Senior Management Employees - a non- for 1994 qualified, deferred compensation plan effective August 1, 1996. *10(b)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(c)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(d)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 For 1998 effective August 1, 1996, revised March 2, 1999. 10(e)1 IDACORP, Inc. Non-Employee Directors Stock Compensation Plan *10(f) 1-3198 10(y) as of May 17, 1999. Form 10-K for 1997 Executive Employment Agreement dated November 20, 1996 between IPC and Richard R. Riazzi. 10(g) Exective Employment Agreement dated April 12, 1999 between IPC and Marlene Williams. 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. 27(a) Financial Data Schedule for IDACORP, Inc. 27(b) Financial Data Schedule for IPC. 1Compensatory plan (b) Reports on Form 8-K. No reports on Form 8-K were filed during the three-month period ended June 30, 1999. * 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 August 6, 1999 By: /s/ J LaMont Keen J LaMont Keen Senior Vice President Administration and Chief Financial Officer (Principal Financial Officer) Date August 6, 1999 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 August 6, 1999 By: /s/ J LaMont Keen J LaMont Keen Senior Vice President Administration and Chief Financial Officer (Principal Financial Officer) Date August 6, 1999 By: /s/ Darrel T. Anderson Darrel T. Anderson Vice President Finance and Treasurer (Principal Accounting Officer) EX-3 2 Effective July 8, 1999 Exhibit 3(c) Idaho Power B Y - L A W S of IDAHO POWER COMPANY As Amended ___________________ SECTION 1. The annual meeting of the shareholders of the Company for the election of Directors and the transaction of such other corporate business as may properly come before such meeting, shall be held at Boise, Idaho, or at such other place as the Board of Directors may designate, such place to be stated in the notice of meeting, on the first Wednesday in May in each year, unless such day is a legal holiday, in which case such meeting shall be held on the day following. SECTION 2. Special meetings of the shareholders of the Company may be called only by the Chairman of the Board of Directors, the President, a majority of the Board of Directors, or the holders of not less than four-fifths of the shares entitled to vote at the meeting, at such time, and at Boise, Idaho, or such other place, as may be stated in the call and notice. SECTION 3. Notice of the time and place of every meeting of shareholders shall be mailed by the Secretary at least ten days previous thereto, to each shareholder of record at his last known post office address, but meetings may be held without notice if all shareholders are present, or if notice is waived before or after the meeting by those not present. The Board of Directors are hereby authorized to fix a day, not more than fifty days prior to the day of holding any meeting of shareholders, as the day as of which shareholders entitled to notice and to vote at such meetings shall be determined and only shareholders of record at the close of business on such day shall be entitled to notice of or to vote at such meeting. SECTION 4. The holders of shares of the capital stock entitling them to exercise a majority of the voting power must be present in person or by proxy at each meeting of the shareholders to constitute a quorum, less than a quorum having power to adjourn. SECTION 5. Certificates of stock shall be of such form and device as the Board of Directors may elect, and shall be signed by the President or a Vice President and by the Secretary or Assistant Secretary, but where any such certificate is manually signed by a transfer agent or by a registrar other than the Company itself or an employee of the Company serving in either of those capacities, the signatures of any such officer or officers and the seal of the Company upon such certificate may be facsimiles, engraved or printed. The stock of the Company shall be transferable or assignable on the books of the Company by the holders in person or by attorney or surrender of the certificates therefor. The Board of Directors may appoint one or more transfer agents and registrars of the stock. The books for the transfer of the stock of the Company may be closed for such periods before and during the payment of dividends, not to exceed thirty days, and the holding of meetings of shareholders, not to exceed forty days, as the Board of Directors may from time to time determine, and no transfer of stock made during such a period shall be binding upon the Company. SECTION 6A. The number of Directors constituting the Board of Directors of the Company shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by affirmative vote of two-thirds of the Continuing Directors (as defined in Article 8 of the Restated Articles of Incorporation), but the number of Directors shall be no less than 9 and no greater than 15. The number of Directors may be increased or decreased, beyond the limits set forth above, only by an amendment to the Restated Articles of Incorporation of the Company pursuant to Article 10 of the Restated Articles of Incorporation of the Company. Six members of the Board of Directors shall constitute a quorum for the transaction of all business except (1) the election of members of the Executive Committee, for which purpose a majority of all of the Directors shall constitute a quorum, and (2) the filling of vacancies in the Board of Directors, which provision is set forth below. The Board of Directors shall be divided into three classes as nearly equal in number as may be. The initial term of office of each Director in the first class shall expire at the annual meeting of shareholders in 1990; the initial term of office of each Director in the second class shall expire at the annual meeting of shareholders in 1991; and the initial term of office of each Director in the third class shall expire at the annual meeting of shareholders in 1992. At each annual election commencing at the annual meeting of shareholders in 1990, the successors to the class of Directors whose term expires at that time shall be elected to hold office for a term of three years to succeed those whose term expires, so that the term of one class of Directors shall expire each year. Each Director shall hold office for the term for which he is elected or appointed and until his successor shall be elected and qualified or until his death, or until he shall resign or be removed; provided, however, that no person who will be seventy (70) years of age or more on or before the annual meeting shall be nominated to the Board of Directors, and any Directors who reach the age of seventy (70) shall be automatically retired from the Board. In the event of any increase or decrease in the authorized number of Directors, (i) each Director then serving as such shall nevertheless continue as a Director of the class of which he is a member until the expiration of his current term, or his earlier resignation, removal from office or death, and (ii) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the three classes of Directors so as to maintain such classes as nearly equal in number as may be. Newly created directorships resulting from any increase in the authorized number of Directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled by a two-thirds vote of the Directors then in office, or a sole remaining Director, although less than a quorum, and Directors so chosen shall hold office for a term expiring at the annual meeting of shareholders at which the term of the class to which they have been elected expires. If one or more Directors shall resign from the Board effective as of a future date, such vacancy or vacancies shall be filled pursuant to the provisions hereof, and such new directorship(s) shall become effective when such resignation or resignations shall become effective, and each Director so chosen shall hold office as herein provided in the filling of other vacancies. At a special meeting of shareholders called expressly for that purpose, the entire Board of Directors or any individual Directors may be removed (i) without cause, by the unanimous vote of the outstanding shares entitled to vote for Directors, and (ii) for cause, by the affirmative vote of two-thirds of the outstanding shares entitled to vote for Directors. Except as may otherwise be provided by law, cause for removal shall be construed to exist only if: (x) the Director whose removal is proposed has been convicted, or granted immunity to testify where another has been convicted, of a felony by a court of competent jurisdiction and such conviction is no longer subject to appeal; (y) such Director has been grossly negligent in the performance of his duties to the Company; or (z) such Director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects his ability as a Director of the Company, and such adjudication is no longer subject to appeal. Any Directors elected pursuant to special voting rights of the 4% Preferred Stock or Serial Preferred Stock, without par value, voting as a separate class, shall be excluded from, and for no purpose be counted in, the scope and operation of the foregoing provisions. B.(i) Obligation to Indemnify. The Company shall indemnify any person (and his heirs, executors, administrators or other legal representatives) who was or is party to (or is threatened to be made a party to) or was or is a witness in (or is threatened to be made a witness in) any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including without limitation any suit, action or proceeding by or in the right of the Company to procure a judgment in its favor) by reason of the fact that he (or his testator or intestate) is or was a Director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a Director, officer, trustee, partner, fiduciary, employee or agent of another corporation, of any type or kind, domestic or foreign, or any partnership, joint venture, trust, pension or other employee benefit plan or any other entity or enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding or any appeal therein; provided, however, that no indemnification shall be made pursuant to this Subsection (i) (a) if a judgment or other final adjudication adverse to such person shall have established that such person did not act honestly or in the reasonable belief that his actions were in or not opposed to the Company's or its shareholders' best interests; or (b) in an action or proceeding by or in the right of the Company to procure a judgment in its favor in which that person is finally adjudicated to be liable to the Company; however, the Company will indemnify that person in the suits described in (b) for such amounts as the court in which the action, suit or proceeding was brought shall determine in view of all the circumstances of the case the person to be fairly and reasonably entitled. (ii) Advancement of Expenses. The Company shall pay any expenses incurred by a Director, officer, agent or employee of the Company in defending any such action, suit or proceeding in advance of the final disposition thereof if a majority vote of a quorum of disinterested Directors or a board-designated independent counsel determines that the person seeking indemnification has not acted dishonestly, or without a reasonable belief that his actions were in or not opposed to the Company's or its shareholders' best interests and upon receipt of (a) an undertaking by or on behalf of such person to repay such advances to the extent of the amount to which such person shall ultimately be determined not to be entitled, and (b) an affirmation that the person has met the standard of conduct set forth above. (iii) Nonexclusivity. The rights to indemnification and to the advancement of expenses and any other benefits provided by, or granted pursuant to, Subsections (i) and (ii) of this Section shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be or hereafter become entitled whether contained in (a) a resolution of the shareholders of the Company, (b) a resolution of the Board of Directors, or (c) an agreement, duly authorized by the Board of Directors, providing for such indemnification; provided, however, that no indemnification contemplated by this Subsection (iii) may be made if such indemnification would be unlawful. (iv) Insurance. The Company may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a Director, officer, trustee, partner, fiduciary, employee or agent of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or any other entity or enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Company would have the power to indemnify him against such liability under this Section 6B. (v) Insurance Offset Against Indemnity. The Company's indemnity of any person who is or was a Director, officer, agent or employee of the Company, or is or was serving in any capacity in any other entity or enterprise at the request of the Company, shall be reduced by any amounts such person may collect as indemnification (a) under any policy of insurance purchased and maintained on his behalf by the Company, and (b) from such other entity or enterprise. (vi) Affiliates; Mergers; Etc. For the purposes of this Section, references to the "Company" shall include any subsidiary or affiliated corporation, any predecessor of the Company and all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a Director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a Director, officer, trustee, partner, fiduciary, employee or agent of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or other entity or enterprise shall stand in the same position under the provisions of this Section 6B with respect to the resulting or surviving corporation as he would if he had served the resulting or surviving corporation in the same capacity. (vii) Contract Right. All rights to indemnification and to the advancement of expenses granted under Subsections (i), (ii) and (iii) of this Section 6B shall be deemed to arise out of a contract between the Company and the Director, officer, agent or employee of the Company who serves in such capacity at any time while these By-laws are in effect. No repeal or modification of these By-laws shall affect any rights or obligations theretofore existing. (viii) Limitation. Nothing contained in this Section 6B, or elsewhere in these By-laws, shall operate to require the Company to indemnify any person if such indemnification shall be for any reason contrary to applicable law. C. The provisions of each paragraph or subsection of 6A or 6B of these By-laws shall be separable and if any provision or portion thereof shall for any reason be inapplicable or ineffective, this shall not affect any other provision or portion or the application, validity or effectiveness thereof. SECTION 7. Meetings of the Board of Directors shall be held at the time fixed by resolution of the Board or upon call of the President or Vice President or Chairman of the Board. The Secretary or officer performing his duties shall give five days' notice of all meetings of Directors, provided that a meeting may be held without notice immediately after the annual election, and notice need not be given of regular meetings held at times fixed by resolution of the Board. Meetings may be held at any time without notice if all the Directors are present, or if those not present waive notice, either before or after the meeting. SECTION 8. The Chairman of the Board shall be selected by and from the members of the Board of Directors. He shall conduct all meetings of the Board of Directors and shall perform all duties incident thereto. The Board of Directors shall also select a President, a Vice President, a Secretary and a Treasurer and such additional Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers and agents as the Board of Driectors from time to time may deem advisable. If the Board of Directors wishes, it may also elect as an officer of the Company the Chairman of the Board. SECTION 9. The Board of Directors, as soon as may be after the election in each year, shall appoint an Executive Committee to consist of the Chairman of the Board, the President and such number of Directors as the Board may from time to time determine. Such Committee shall have and may exercise all of the powers of the Board during the intervals between its meetings, which may be lawfully delegated, subject to such limitations as may be provided by resolution of the Board. The Board shall have the power at any time to change the membership of such Committee and to fill vacancies in it. The Executive Committee may make rules for the conduct of its business and may appoint such Committees and assistants as it may deem necessary. The Board may from time to time determine by resolution the number of members of such Committee required to constitute a quorum. The Chairman of the Board shall be the Chairman of the Executive Committee. During the intervals between the meetings of the Executive Committee, the Chairman of the Board shall possess and may exercise such of the powers vested in the Executive Committee as from time to time may be conferred upon him by resolution of the Board of Directors or the Executive Committee. SECTION 10. A Director of this Company shall not be disqualified by his office from dealing or contracting with the Company, either as vendor, purchaser or otherwise, nor shall any transactions or contract of this Company be void or voidable by reason of the fact that any Director, or any firm of which any Director is a member, or any corporation of which any Director is a shareholder or Director, is in any way interested in such transaction or contract, PROVIDED that any such transaction or contract is or shall be authorized, ratified or approved either (1) by vote of a majority of a quorum of the Board of Directors or of the Executive Committee, without counting in such majority or quorum any Director so interested, or being a member of a firm so interested, or a shareholder or a Director of a corporation so interested, or (2) by vote at a shareholders' meeting of the holders of shares of the capital stock entitling them to exercise a majority of the voting power, or by a writing or writings signed by such holders; nor shall any Director be liable to account to the Company for any profit realized by him from or through any transaction or contract of this Company, authorized, ratified or approved as aforesaid, by reason of the fact that he, or any firm of which he is a member, or any corporation of which he is a shareholder or Director, was interested in such transaction or contract. Nothing herein contained shall create any liability in the events above described or prevent the authorization, ratification or approval of such contracts or transactions in any other manner provided by law. SECTION 11. The term of office of all officers shall be one year, or until their respective successors are chosen and qualified, but any officer may be removed from office at any time by the Board of Directors. SECTION 12. The officers of the Company shall have such duties as usually pertain to their offices respectively, as well as such power and duties as may from time to time be conferred by the Board of Directors. SECTION 13. The shareholders may alter or amend these By-laws (except as set forth in the next sentence) by affirmative vote of the holders of shares of the capital stock entitling them to exercise a majority of the voting power, irrespective of class, at any annual meeting or upon notice at any special meeting. However, Section 2 of these By-laws may be altered, amended, changed or repealed only by the affirmative vote of the holders of at least four-fifths of the voting power of the then outstanding voting stock of the Company, provided that such four- fifths vote shall not be required for any amendment, alteration, change or repeal recommended to the shareholders by two-thirds of the Continuing Directors (as defined in Article 8 of the Company's Restated Articles of Incorporation). SECTION 14. In the event of emergency conditions following a catastrophe or disaster, the following provisions shall apply, other provisions of these by-laws notwithstanding: In the case of any vacancy or vacancies in the Board of Directors, the remaining Directors, although less than a majority or a quorum, by affirmative majority vote, may elect a successor or successors to hold office until the next annual meeting of the shareholders of the Company and until his or their successors shall be elected and qualified. If only one Director remains, he shall forthwith appoint two additional Directors, and the three shall thereupon fill the remaining vacancies. The Directors so appointed and elected shall fill any vacancies which may exist among the officers of the Company, including the President, a Vice President, Treasurer and Secretary, and shall also fill any vacancies which may exist on the Executive Committee. When deemed necessary during any such emergency conditions, notices may be given and Directors and members of the Executive Committee may vote and act by telephone, mail or other means of direct communication, but meetings shall be held and Directors and the Executive Committee shall vote and act in the regular manner if reasonably practicable. In the event that a quorum of either the Board of Directors or the Executive Committee cannot readily be convened, then all the powers and duties of the Board of Directors shall vest in an Emergency Management Committee which shall consist of all readily available members of the Board of Directors and the officers of the Company who are not Directors, but the Emergency Management Committee shall act only when necessary, at times when the Board of Directors or Executive Committee cannot readily be convened or act as hereinabove set forth; provided, however, that if the Emergency Management Committee shall take action in good faith, such action shall be valid as if taken by the Board of Directors or Executive Committee although it may subsequently develop that at the time such action was taken the conditions requisite for action by the Emergency Management Committee did not in fact exist. EX-3 3 Exhibit 3(h) IDACORP Amended Bylaws of IDACORP, Inc. Boise, Idaho July 8, 1999 Article I Office Section 1.1. Principal Office. The Company shall maintain its principal office in Boise, Idaho. Section 1.2. Registered Office. The Company shall maintain a registered office in the State of Idaho, as required by the Idaho Business Corporation Act (the "Act"). Article II Shareholders Section 2.1. Annual Meeting of Shareholders. An annual meeting of the shareholders shall be held on the first Wednesday of May or such other time as may be designated by the Board of Directors. Section 2.2. Special Meetings. A special meeting of the shareholders may be called at any time by the President, a majority of the Board of Directors or the Chairman of the Board. A special meeting of the shareholders also may be called by the holders of not less than twenty percent (20%) of all the shares entitled to vote on any issue proposed to be considered at the proposed special meeting if such holders sign, date and deliver to the Secretary of the Company one (1) or more written demands for the meeting describing the purpose or purposes for which it is to be held. Upon receipt of one (1) or more written demands for such proposed special meeting by the holders of not less than twenty percent (20%) of all the shares entitled to vote on any issue proposed to be considered at the proposed special meeting, the Secretary of the Company shall be responsible for determining whether such demand or demands conform to the requirements of the Act, the Restated Articles of Incorporation and these Bylaws. After making an affirmative determination, the Secretary shall prepare, sign and deliver the notices required for such meeting. The shareholders' demand may suggest a time and place for the meeting but the Board of Directors shall, by resolution, determine the time and place of any such meeting. Section 2.3. Place of Meetings. All meetings of the shareholders shall be held at the Company's principal office or at such other place as shall be designated in the notice of such meetings. Section 2.4. Notice of Shareholders' Meeting. Written notice of the time and place of a meeting of the shareholders shall be mailed to each shareholder entitled to receive notice under the Act: (a) not less than 10 days nor more than 60 days prior to the date of an annual or special meeting of the shareholders; or (b) if applicable, within 30 days after the date on which a shareholder demand satisfying the requirements of Section 2.2 is delivered to the Secretary of the Company. Every notice of an annual or special meeting of shareholders shall be deemed duly served when the notice is deposited in the United States mail or with a private overnight courier service, with postage prepaid and addressed to the shareholder at the shareholder's address as it appears on the Company's records or if a shareholder shall have filed with the Secretary of the Company a written request that the notice be sent to some other address, then to such other address. If an annual or special shareholders' meeting is adjourned to a different date, time or place, notice need not be given of the new date, time or place if such new date, time or place is announced at the meeting before adjournment. In any event, if a new record date for the adjourned meeting is or must be determined, notice of the adjourned meeting shall be given to persons who are shareholders as of the new record date. Section 2.5. Waiver of Notice. Any shareholder may waive any required notice of the time, place and purpose of any meeting of the shareholders by telegram, telecopy, confirmed facsimile or other writing, either before or after such meeting has been held. Such waiver must be signed by the shareholder entitled to the notice and be delivered to the Company for inclusion in the minutes or filing with the corporate records. The attendance of any shareholder at any shareholders' meeting shall constitute a waiver of: (a) any objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and (b) any objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented. Section 2.6. Quorum of Shareholders. Unless the Restated Articles of Incorporation or the Act provide otherwise, a majority of the outstanding shares entitled to vote on a particular matter at a meeting shall constitute a quorum for purposes of action on that matter at the meeting. A share may be represented at a meeting by the record holder thereof in person or by proxy. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting. Whether or not a quorum is present, the meeting may be adjourned by a majority vote of the shareholders present or represented. At any adjourned meeting where a quorum is present, any business may be transacted that could have been transacted at the meeting originally called. Section 2.7. Record Date for Determination of Shareholders. The Board of Directors shall establish a record date for determining shareholders entitled to notice of a shareholders' meeting, to vote or to take any other action, which date shall not be more than 70 days before the meeting or action requiring a determination of shareholders. A determination of shareholders is effective for any adjournment of the meeting, unless a new record date is or must be set. Section 2.8. Shareholders' List for Meeting. The officer or agent in charge of the stock transfer books for shares of the Company shall prepare an alphabetical list of the names of all shareholders who are entitled to notice of a shareholders' meeting. The list shall be arranged by voting group, and within each voting group by class or series of shares, and show the address of and number of shares held by each shareholder. The list shall be made available for inspection by any shareholder, at least 10 days before the meeting for which the list was prepared and continuing through the meeting, at the Company's principal office or at a place identified in the meeting notice in the city where the meeting will be held. The Company also shall make the list available at the shareholders' meeting, and any shareholder is entitled to inspect the list at any time during the meeting or any adjournment. Section 2.9. Transaction of Business at Shareholders' Meetings. 2.9.1 Transaction of Business at Annual Meeting. Business transacted at an annual meeting of shareholders may include all such business as may properly come before the meeting. Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders: (a) pursuant to the Company's notice of meeting; (b) by or at the direction of the Board of Directors; or (c) by any shareholder who was a shareholder of record at the time of giving of notice of the meeting, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.9.1. For nominations or other business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Company and such other business must otherwise be a proper matter for shareholder action. To be timely, a shareholder's notice shall be delivered to the Secretary at the principal executive offices of the Company not earlier than the close of business on the 90th day nor later than the close of business on the 60th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a shareholder's notice as described above. Such shareholder's notice shall set forth: (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such shareholder, as they appear on the Company's books, and of such beneficial owner and (ii) the class and number of shares of the Company which are owned beneficially and of record by such shareholder and such beneficial owner. 2.9.2 Transaction of Business at Special Meeting. Business transacted at a special meeting of the shareholders shall be limited to the purposes set forth in the notice of the special meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Company's notice of meeting: (a) by or at the direction of the Board of Directors; or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any shareholder of the Company who is a shareholder of record at the time of giving of notice of the meeting, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.9.2. In the event the Company calls a special meeting of shareholders for the purpose of electing one or more directors to the Board of Directors, any such shareholder may nominate a person or persons, as the case may be, for election to such position or positions as specified in the Company's notice of meeting, if the shareholder's notice required by this Section 2.9.2 shall be delivered to the Secretary at the principal executive offices of the Company not earlier than the close of business on the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a shareholder's notice as described above. Such shareholder's notice shall set forth: (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act and Rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (i) the name and address of such shareholder, as they appear on the Company's books, and of such beneficial owner and (ii) the class and number of shares of the Company which are owned beneficially and of record by such shareholder and such beneficial owner. 2.9.3 General. Only such persons who are nominated in accordance with the procedures set forth in this Section 2.9 shall be eligible to serve as directors and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.9. The chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.9 and, if any proposed nomination or business is not in compliance with this Section 2.9, to declare that such defective proposal or nomination shall be disregarded, unless otherwise provided by any applicable law. For purposes of this Section 2.9, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. Notwithstanding the foregoing provisions of this Section 2.9, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.9. Nothing in this Section 2.9 shall be deemed to affect any rights of: (a) the shareholders to request inclusion of proposals in the Company's proxy statement pursuant to Rule 14a-8 under the Exchange Act; or (b) the holders of any series of Preferred Stock to elect directors under specified circumstances. Section 2.10. Action by Written Consent. Any action required or permitted by the Act to be taken at an annual or special meeting of shareholders may be taken without a meeting, without prior notice, and without a vote, if consents in writing, setting forth the action so taken, are signed by the holders of all of the outstanding shares of stock entitled to vote on the matter. Section 2.11. Presiding Officer. The Chairman of the Board shall act as chairman of all meetings of the shareholders. In the absence of the Chairman of the Board, the President, or in his absence, any Vice President designated by the Board of Directors shall act as the chairman of the meeting. Section 2.12. Procedure. At each meeting of shareholders, the chairman of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the shareholders will vote at the meeting and shall determine the order of business and all other matters of procedure. Except to the extent inconsistent with any such rules and regulations as adopted by the Board of Directors, the chairman of the meeting may establish rules, which need not be in writing, to maintain order and safety and for the conduct of the meeting. Without limiting the foregoing, the chairman of the meeting may: (a) determine and declare to the meeting that any business is not properly before the meeting and therefore shall not be considered; (b) restrict attendance at any time to bona fide shareholders of record and their proxies and other persons in attendance at the invitation of the chairman of the meeting; (c) restrict dissemination of solicitation materials and use of audio or visual recording devices at the meeting; (d) adjourn the meeting without a vote of the shareholders, whether or not there is a quorum present; and (e) make rules governing speeches and debate, including time limits and access to microphones. The chairman of the meeting acts in his absolute discretion and his rulings are not subject to appeal. Article III Board of Directors Section 3.1. Authority. The Board of Directors shall have the ultimate authority over the conduct and management of the business affairs of the Company. Section 3.2. Number. The number of directors of the Company shall be not less than nine (9) nor more than 15, as determined from time to time by the vote of a majority of the Board of Directors. Unless otherwise provided by the Act, the number of directors may be increased or decreased, beyond the limits set forth above, only by an amendment to these Bylaws. To the extent permitted by the Act, any newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the then existing classes of directors so as to maintain such classes as nearly equal in number as possible. No change in the number of directors shall shorten the term of any director then in office. Section 3.3. Term. Each director shall hold office from the date of his or her election and qualification until his or her successor shall have been duly elected and qualified or until his or her earlier removal, resignation, death or incapacity. Section 3.4. Eligibility for Elections. No person who will be 70 years of age or more on or before an annual meeting shall be nominated to the Board of Directors, and any directors who reach the age of 70 shall be automatically retired from the Board of Directors. Section 3.5. Regular Meetings of the Board. Regular meetings of the Board of Directors may be held at times and places agreed on by a majority of the directors at any meeting of the Board of Directors, and such regular meetings may be held at such times and places without any further notice of the date, time, place or purposes of such regular meetings. Section 3.6. Special Meetings of the Board. Special meetings of the Board of Directors may be called: (a) by, or at the request of, the Chairman of the Board; or (b) by the Secretary of the Company at the written request of a majority of the directors then in office. Special meetings of the Board of Directors may be called on not less than 12 hours notice to each director, given orally or in writing, either personally, by telephone (including by message or by recording device), by facsimile transmission, by telegram or by telex, or on not less than three (3) calendar days' notice to each director given by mail. Notice of the special meeting of the Board of Directors shall specify the date, time and place of the meeting. Actions taken at any such meeting shall not be invalidated because of lack of notice if notice is waived as provided in Section 3.7. Section 3.7. Waiver of Notice. A director may waive any required notice before or after the date and time stated in the notice by written waiver signed by the director entitled to the notice and filed with the minutes or corporate records. In addition, a director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless the director at the beginning of the meeting, or promptly upon the director's arrival, objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting. Section 3.8. Participation by Telecommunication. Any director may participate in any meeting of the Board of Directors through the use of any means of communication by which all directors participating in the meeting may simultaneously hear each other during the meeting. A director participating in a meeting by this means shall be deemed to be present in person at the meeting. Section 3.9. Quorum of Directors. A majority of the directors in office immediately before the meeting begins shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. Section 3.10. Action. If a quorum is present when the vote is taken, the Board of Directors shall take actions pursuant to resolutions adopted by the affirmative vote of: (a) a majority of the directors present at the meeting of the Board of Directors; or (b) such greater number of the directors as may be required by the Restated Articles of Incorporation, these Bylaws or the Act. Section 3.11. Action by Unanimous Written Consent. Any action required or permitted to be taken at a Board of Directors' meeting may be taken without a meeting if the action is taken by all members of the Board of Directors. The action shall be evidenced by one (1) or more written consents describing the action taken, signed by each director, and included in the minutes or filed with the corporate records reflecting the action taken. Section 3.12. Selection of the Chairman of the Board and Officers. The Chairman of the Board shall be selected by and from the members of the Board of Directors. He or she shall conduct all meetings of the Board of Directors and shall perform all duties incident thereto. The Board of Directors shall also select a President, a Vice President, a Secretary and a Treasurer and such additional Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers and agents as the Board of Directors from time to time may deem advisable. If the Board of Directors wishes, it may also elect as an officer of the Corporation the Chairman of the Board. Section 3.13 Powers and Duties of Officers and Agents. The powers and duties of the officers and agents shall be determined by the Board of Directors and these Bylaws. Section 3.14. Delegation of Powers. For any reason deemed sufficient by the Board of Directors, whether occasioned by absence or otherwise, the Board may delegate all or any of the powers and duties of any officer to any other officer or director, but no officer or director shall execute, verify or acknowledge any instrument in more than one capacity unless specifically authorized by the Board of Directors. Section 3.15. Appointment of Executive Committee. At the same meeting at which the Board of Directors selects the Chairman of the Board, the Board of Directors shall appoint an Executive Committee consisting of two (2) or more members, who shall serve at the pleasure of the Board of Directors. Such appointments shall be made by a majority of all the directors in office when the action is taken. Unless otherwise provided by the Act or further limited by a resolution of the Board of Directors, the Executive Committee may exercise all of the powers of the Board of Directors. Section 3.16. Power to Appoint Additional Committees of the Board. The Board of Directors shall have the power to designate, by resolution, one (1) or more additional committees and appoint members of the Board of Directors to serve on them. To the extent provided in such resolution, such committees may manage the business and affairs of the Company, unless otherwise provided by the Act. Each committee shall have two (2) or more members, who shall serve at the pleasure of the Board of Directors. A majority of the members of any committee of the Board of Directors will constitute a quorum for any committee action. Section 3.17. Compensation. The Board of Directors may, by resolution, authorize the payment to directors of compensation for the performance of their duties. No such payment shall preclude any director from serving the Company in any other capacity and receiving compensation therefor. The Board of Directors may also, by resolution, authorize the reimbursement of expenses incurred by directors in the performance of their duties. Section 3.18 Conflicting Interest Transaction. Any conflicting interest transaction shall be governed by Sections 30- 1-860 through 30-1-863 of the Act. Article IV Officers Section 4.1. General. The officers of the Corporation shall consist of a President, a Vice President, a Secretary, a Treasurer and such additional Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers and agents as the Board of Directors from time to time may deem advisable. If the Board of Directors wishes, it may also elect as an officer of the Corporation the Chairman of the Board. Each such officer shall hold office for such term, if any, as may be established by the Board of Directors or set forth in an employment agreement, if any, or until his or her successor shall have been duly elected and qualified or until his or her earlier resignation, retirement, removal from office, incapacity or death. The Board of Directors may remove any officer or agent at any time, with or without cause, unless otherwise provided by the Act or the Articles of Incorporation. One person may hold two or more offices, except the offices of President and Secretary. Section 4.2. President. The President shall have general and active management of the business of the Company and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall have the general powers and duties of supervision and management usually vested in the office of president of a corporation. Section 4.3. Vice Presidents. Each Vice President shall serve under the direction of the President and shall perform such other duties as the Board of Directors shall from time to time direct. Section 4.4 Secretary. The Secretary of the Company shall serve under the direction of the President and shall perform such other duties as the Board of Directors shall from time to time direct, unless otherwise provided by these Bylaws or determined by the Board of Directors. The Secretary shall be responsible for preparing minutes of the directors' and shareholders' meetings and for authenticating records of the Company. The Secretary shall safely keep in his custody the seal of the Company and shall have authority to affix the same to all instruments where its use is required. The Secretary shall give all notices required by the Act, these Bylaws or any resolution of the Board of Directors. Section 4.5. Treasurer. The Treasurer shall serve under the direction of the President and shall perform such other duties as the Board of Directors shall from time to time direct. The Treasurer shall have custody of all corporate funds and securities and shall keep in books belonging to the Company full and accurate accounts of all receipts and disbursements. The Treasurer shall deposit all monies, securities and other valuable effects in the name of the Company in such depositories as may be designated for that purpose by the Board of Directors and shall disburse the funds of the Company as may be ordered by the Board of Directors. The Treasurer shall upon request report to the Board of Directors on the financial condition of the Company. Section 4.6. Assistant Secretary and Assistant Treasurer. The Assistant Secretary, in the absence or disability of the Secretary, shall perform the duties and exercise the powers of the Secretary. The Assistant Treasurer, in the absence or disability of the Treasurer, shall perform the duties and exercise the powers of the Treasurer. Article V Stock and Transfers Section 5.1. Certificates for Shares. Subject to the provisions of Section 5.2, every shareholder shall be entitled to a certificate of the shares to which the shareholder has subscribed, and each certificate shall be signed, either manually or by facsimile, by any two (2) of the following: the Chairman of the Board (if he or she is an officer), the President, the Treasurer and the Secretary. Such certificate may bear the seal of the Corporation or a facsimile thereof, Each certificate shall state the name of the Corporation, the number and class of shares and designation of the series, if any, that the certificate represents. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person or entity were such officer, transfer agent or registrar at the date of issue. Section 5.2. Shares Without Certificates. The Company shall have the power to authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization shall not affect shares already represented by certificates until they are surrendered to the Company. Within a reasonable time after the issue or transfer of shares without certificates, the Company shall send the shareholder a written statement of the information required on certificates by the Act. Section 5.3. Transferable Only on Books of the Company. Shares of the capital stock of the Company shall be transferred on the books of the Company only by the holder of the shares in person or by an attorney lawfully appointed in writing and upon surrender of the certificates, if any, for the shares. A record shall be made of every such transfer and issue. Whenever any transfer is made for collateral security and not absolutely, the fact shall be so expressed in the entry of such transfer. Section 5.4. Stock Ledger. The Company shall maintain a stock ledger that contains the name and address of each shareholder and the number of shares of each class of the capital stock that the shareholder holds. The stock ledger may be in written form or in any other form that can be converted within a reasonable time into written form for visual inspection. Section 5.5. Registered Shareholders. The Company shall have the right to treat the registered holder of any share of its capital stock as the absolute owner of such share and shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not the Company shall have express or other notice thereof, unless otherwise required by any applicable law. Article VI Indemnification Section 6.1. Defined Terms. Capitalized terms used in this Article VI that are defined in Section 30-1-850 of the Act shall have the meaning given to such terms under Section 30-1-850 of the Act. Section 6.2. Insurance. The Company shall have the power to purchase and maintain insurance, in such amounts as the Board of Directors may deem appropriate, on behalf of any person who is a Director, Officer, employee or agent against Liability and Expenses in connection with any Proceeding, to the extent permitted under any applicable law. Section 6.3. Agreements. The Company may enter into an indemnification agreement with any Director, Officer, employee or agent, to the extent permitted under any applicable law. Section 6.4. Amendments. Any amendment or repeal of this Article VI shall not be retroactive in effect. Section 6.5. Severability. In case any provision in this Article VI shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances. Article VII Amendment of Bylaws Section 7.1. Amendment by the Board of Directors. These Bylaws may be amended, altered, changed, added to, repealed or substituted by the affirmative vote of a majority of the Board of Directors, unless the Restated Articles of Incorporation, these Bylaws or the Act provide otherwise. Section 7.2. Amendment by the Shareholders. Subject to the provisions of Section 7.3, these Bylaws may be amended, altered, changed, added to, repealed or substituted by the affirmative vote of a majority of all shares entitled to vote thereon, if notice of the proposed amendment, alteration, change, addition, repeal or substitution is contained in the notice of the meeting. Section 7.3. Amendment of Certain Provisions. Notwithstanding any other provision of these Bylaws, (i) any amendment, alteration, change, addition, repeal or substitution of this Section 7.3, Section 2.9 or Article III of these Bylaws by the shareholders shall require the affirmative vote of two- thirds of all shares entitled to vote thereon; and (ii) no change of the date for the annual meeting of the shareholders shall be made by the shareholders within the 30-day period preceding the date designated for the annual meeting pursuant to Section 2.l, unless consented to in writing, as provided in Section 2.10, or approved at any meeting of the shareholders by a majority of all shares entitled to vote thereon. EX-4 4 Exhibit 4(b) IDAHO POWER COMPANY P.O. Box 70 Boise, ID 83707 August 6, 1999 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 Ladies and Gentlemen: Pursuant to the exemption afforded by Item 601 of Regulation S-K, the Company has not filed as exhibits to its quarterly Report on Form 10-Q instruments with respect to its long-term debt set forth below. The Company agrees to furnish a copy of each such instrument to the Securities and Exchange Commission upon request. Guaranty Agreement, dated as of March 1, 1990 between Idaho Power Company and West One Bank, as Trustee, relating to $21,425,000 American Falls Replacement Dam Bonds of the American Falls Reservoir District, Idaho. Guaranty Agreement, dated as of August 30, 1974 between Idaho Power Company and Pacific Power & Light Company. Guaranty Agreement, dated February 10, 1992, between Idaho Power Company and New York Life Insurance Company, as Note Purchaser, relating to $11,700,000 Guaranteed Notes due 2017 of Milner Dam Inc. Instruments relating to pollution control revenue bonds, 7.25% Series due 2008, 8.30% Series 1984 due 2014, 6.05% Series 1996A due 2026, Variable Rate Series 1996B due 2026 and Variable Rate Series 1996C due 2026. REA Notes. Debt related to investment in affordable housing due 1999 to 2009. Sincerely yours, J. LaMont Keen EX-10 5 Exhibit 10(e) IDACORP, INC. NON-EMPLOYEE DIRECTORS STOCK COMPENSATION PLAN I. Purpose The purpose of the IDACORP, Inc. Non-Employee Directors Stock Compensation Plan is to provide ownership of the Company's stock to non-employee members of the Board of Directors and to strengthen the commonality of interest between directors and shareholders. II. Definitions When used herein, the following terms shall have the respective meanings set forth below: "Annual Retainer" means the annual retainer payable by the Company to Non-Employee Directors and shall include, for purposes of this Plan, meeting fees, cash retainers and any other cash compensation payable to Non-Employee Directors by the Company for services as a Director. "Annual Meeting of Shareholders" means the annual meeting of shareholders of the Company at which directors of the Company are elected. "Board" or "Board of Directors" means the Board of Directors of the Company. "Committee" means a committee whose members meet the requirements of Section IV(A) hereof, and who are appointed from time to time by the Board to administer the Plan. "Common Stock" means the common stock, without par value, of the Company. "Company" means IDACORP, Inc., an Idaho corporation, and any successor corporation. "Effective Date" means May 17, 1999. "Employee" means any officer or other common law employee of the Company or of any Subsidiary. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Non-Employee Director" or "Participant" means any person who is elected or appointed to the Board of Directors of the Company and who is not an Employee. "Plan" means the Company's Non-Employee Directors Stock Compensation Plan, adopted by the Board on May 5, 1999, as it may be amended from time to time. "Plan Year" means the period commencing on June 1 and ending the next following May 30. "Stock Payment" means that portion of the Annual Retainer to be paid to Non-Employee Directors in shares of Common Stock rather than cash for services rendered as a director of the Company, as provided in Section V hereof. "Subsidiary" means any corporation that is a "subsidiary corporation" of the Company, as that term is defined in Section 424(f) of the Internal Revenue Code of 1986, as amended. III. Shares of Common Stock Subject to the Plan Subject to Section VII below, the maximum aggregate number of shares of Common Stock that may be delivered under the Plan is 10,500 shares. The Common Stock to be delivered under the Plan will be made available from treasury stock or shares of Common Stock purchased on the open market. IV Administration A. The Plan will be administered by a committee appointed by the Board, consisting of two or more persons. Members of the Committee need not be members of the Board. The Company shall pay all costs of administration of the Plan. B. Subject to and not inconsistent with the express provisions of the Plan, the Committee has and may exercise such powers and authority of the Board as may be necessary or appropriate for the Committee to carry out its functions under the Plan. Without limiting the generality of the foregoing, the Committee shall have full power and authority (i) to determine all questions of fact that may arise under the Plan, (ii) to interpret the Plan and to make all other determinations necessary or advisable for the administration of the Plan and (iii) to prescribe, amend and rescind rules and regulations relating to the Plan, including, without limitation, any rules which the Committee determines are necessary or appropriate to ensure that the Company and the Plan will be able to comply with all applicable provisions of any federal, state or local law. All interpretations, determinations and actions by the Committee will be final and binding upon all persons, including the Company and the Participants. V. Determination of Annual Retainer and Stock Payments A. The Board shall determine the Annual Retainer payable to all Non-Employee Directors of the Company. B. Each director who is a Non-Employee Director immediately following the date of the Company's Annual Meeting of Shareholders shall receive as a portion of the Annual Retainer, payable to such director on June 1, or on the first business day thereafter, a Stock Payment of $6,000 in value of Common Stock. The number of shares granted shall be determined based on (i) for treasury stock, the closing price of the Common Stock on the consolidated transaction reporting system on the business day immediately preceding the date of payment, and (ii) for open market purchases, the actual price paid to purchase the shares. A certificate evidencing the shares of Common Stock constituting the Stock Payment shall be registered in the name of the Participant and issued to each Participant. The cash portion of the Annual Retainer shall be paid to Non- Employee Directors at such times and in such manner as may be determined by the Board of Directors. C. No Non-Employee Director shall be required to forfeit or otherwise return any shares of Common Stock issued as a Stock Payment pursuant to the Plan notwithstanding any change in status of such Non-Employee Director which renders him ineligible to continue as a Participant in the Plan. Any person who is a Non- Employee Director immediately following the Company's Annual Meeting of Shareholders shall be entitled to receive a Stock Payment as a portion of the applicable Annual Retainer. VI. Adjustment For Changes in Capitalization If the outstanding shares of Common Stock of the Company are increased, decreased or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Common Stock or other securities, through merger, consolidation, sale of all or substantially all of the property of the Company, reorganization or recapitalization, reclassification, stock dividend, stock split, reverse stock split, combinations of shares, rights offering, distribution of assets or other distribution with respect to such shares of Common Stock or other securities or other change in the corporate structure or shares of Common Stock, the maximum number of shares and/or the kind of shares that may be issued under the Plan shall be appropriately adjusted by the Committee. Any determination by the Committee as to any such adjustment will be final, binding and conclusive. The maximum number of shares issuable under the Plan as a result of any such adjustment shall be rounded down to the nearest whole share. VII. Amendment and Termination of Plan The Board will have the power, in its discretion, to amend, suspend or terminate the Plan at any time. VIII. Effective Date and Duration of the Plan The Plan will become effective upon the Effective Date and shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Section VIII, until all shares subject to the Plan have been purchased or acquired according to the Plan's provisions. IX. Miscellaneous Provisions A. Continuation of Directors in Same Status Nothing in the Plan or any action taken pursuant to the Plan shall be construed as creating or constituting evidence of any agreement or understanding, express or implied, that the Company will retain a Non-Employee Director as a director or in any other capacity for any period of time or at a particular retainer or other rate of compensation, as conferring upon any Participant any legal or other right to continue as a director or in any other capacity, or as limiting, interfering with or otherwise affecting the right of the Company to terminate a Participant in his capacity as a director or otherwise at any time for any reason, with or without cause, and without regard to the effect that such termination might have upon him as a Participant under the Plan. B. Compliance with Government Regulations Neither the Plan nor the Company shall be obligated to issue any shares of Common Stock pursuant to the Plan at any time unless and until all applicable requirements imposed by any federal and state securities and other laws, rules and regulations, by any regulatory agencies or by any stock exchanges upon which the Common Stock may be listed have been fully met. As a condition precedent to any issuance of shares of Common Stock and delivery of certificates evidencing such shares pursuant to the Plan, the Board or the Committee may require a Participant to take any such action and to make any such covenants, agreements and representations as the Board or the Committee, as the case may be, in its discretion deems necessary or advisable to ensure compliance with such requirements. The Company shall in no event be obligated to register the shares of Common Stock deliverable under the Plan pursuant to the Securities Act of 1933, as amended, or to qualify or register such shares under any securities laws of any state upon their issuance under the Plan or at any time thereafter, or to take any other action in order to cause the issuance and delivery of such shares under the Plan or any subsequent offer, sale or other transfer of such shares to comply with any such law, regulation or requirement. Participants are responsible for complying with all applicable federal and state securities and other laws, rules and regulations in connection with any offer, sale or other transfer of the shares of Common Stock issued under the Plan or any interest therein including, without limitation, compliance with the registration requirements of the Securities Act of 1933, as amended (unless an exemption therefrom is available), or with the provisions of Rule 144 promulgated thereunder, if applicable, or any successor provisions. Certificates for shares of Common Stock may be legended as the Committee shall deem appropriate. C. Nontransferability of Rights No Participant shall have the right to assign the right to receive any Stock Payment or any other right or interest under the Plan, contingent or otherwise, or to cause or permit any encumbrance, pledge or charge of any nature to be imposed on any such Stock Payment (prior to the issuance of stock certificates evidencing such Stock Payment) or any such right or interest. D. Severability In the event that any provision of the Plan is held invalid, void or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of the Plan. E. Governing Law To the extent not preempted by Federal law, the Plan shall be governed by the laws of the State of Idaho, without regard to the conflict of law provisions of any state. EX-10 6 EMPLOYMENT AGREEMENT - 1 Exhibit 10(g) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT, dated the 12th day of April, 1999, is by and between IDAHO POWER COMPANY, an Idaho corporation with its principal place of business at 1221 West Idaho Street, Boise, Idaho (the "Company") and MARLENE WILLIAMS, an individual residing in Glendale, Arizona (the "Executive"). WITNESSETH WHEREAS, the Company desires to retain the services of Executive as the Vice President of Human Resources, and Executive desires to perform such services for the Company on the terms and conditions set forth herein; WHEREAS, Executive represents and Company acknowledges that Executive is fully qualified, without the benefit of any further training or experience, to perform the responsibilities and duties, with commensurate authorities, of the position of Vice President of Human Resources of the Company; and WHEREAS, Executive agrees to devote her full time and business effort, attention and energies to the diligent performance of her duties hereunder; NOW, THEREFORE, Company and Executive, intending to be legally bound, covenant and agree as follows: 1. TERMS OF EMPLOYMENT (a) Subject to satisfactory completion of pre- employment drug testing and background verification, the Company hereby agrees to employ the Executive, and the Executive hereby agrees to serve the Company, on the terms and conditions set forth herein. (b) The employment of the Executive by the Company shall be for a three (3) year term for the period commencing on April 12, 1999 ("Date of Hire") and continuing until April 11, 2002 (the "Term") unless sooner terminated as provided in Section 4. Following the completion of the Term, this Agreement will be extended on a year to year basis unless and until the Company gives notice to the Executive to terminate upon not less than thirty days notice prior to the end of a contract year or the Agreement is sooner terminated as provided in Section 4. Under this Agreement, following the completion of the Term, a Contract Year shall be a calendar year except for the first calendar year which will commence on April 12, 2002, and end on December 31, 2002. The second calendar year will commence on January 1, 2003. (c) The duties of Executive shall be as determined by the Board, by executive management, including the President and Chief Executive Officer and the Senior Vice President - Administration and in accordance with this Employment Agreement. Without limiting the generality of the foregoing, Executive shall report to and advise the Senior Vice President - Administration regarding the Human Resource matters of the Company. Executive agrees to devote her full time business efforts, attention and energies to the diligent performance of her duties hereunder and will not, during the term hereof, accept employment from any other person, firm, corporation, governmental agency or other entity, provided, however, Executive may devote reasonable amounts of time to activities of a public service, civic, or not-for-profit nature. The Executive shall perform and discharge, faithfully, diligently, and to the best of her ability her duties and responsibilities. The Executive shall adhere to all policies and working rules of the Company, IDACORP and applicable policies of Affiliates. (d) Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty, fidelity and allegiance to and shall act at all times in the best interests of the Company and to do no act which would injure the Company's business, its interests, or its reputation. It is agreed that any direct or indirect interest in, connection with or benefit from any outside activities, particularly commercial activities, which interest might in any way adversely affect the Company, or any of its Affiliates, involves a possible conflict of interest. In keeping with Executive's fiduciary duties to the Company, Executive agrees that Executive shall not knowingly become involved in a conflict of interest with the Company, or its Affiliates, and upon discovery of any conflict, shall not allow such a conflict to continue. Moreover, Executive agrees that Executive shall disclose to the Company's General Counsel any facts which might involve such a conflict of interest. The Company and Executive recognize that it is impossible to provide an exhaustive list of actions or interests which constitute a "conflict of interest", including the definition set forth in the Company's Business Conduct Guide or Ethics Policy. Moreover, the Company and Executive recognize there are many borderline situations. In some instances, full disclosure of facts by Executive to the Company's General Counsel may be all that is necessary to enable the Company or its Affiliates to protect their interests. In others, if no improper motivation appears to exist and the interests of the Company, or its Affiliates have not suffered, prompt elimination of the outside interest will suffice. In still others, it may be necessary for the Company to terminate the employment relationship with Executive. The Company and Executive agree that the Company's determination as to whether a conflict of interest exists shall be conclusive. The Company reserves the right to take such action as, in its judgment, will end the conflict of interest. 2. COMPENSATION, EXPENSES AND OTHER PAYMENTS Company shall pay, or provide, and Executive shall accept as full consideration for her services to be rendered hereunder, and as a reimbursement or provision for expenses incurred by her, the following: (a) Base Salary An annual salary of $125,000, payable in twenty-six (26) equal payments during each year of this Employment Agreement, provided, however, that effective January 1 of each year beginning in 2000, Executive's annual compensation may be increased in accordance with the provisions for salary increases set forth in subsection b. below. Executive's minimum total compensation, which in no event may be reduced in whole or in part, shall be the annual salary at the rate of compensation received by Executive for any given period of time or at the time of Executive's termination. (b) Annual Adjustments - Base Salary Annual performance reviews will determine annual salary increases to which Executive will be entitled effective January 1, 2000, based upon Company's then current Executive Compensation programs as approved by the Compensation Committee of the Board of Directors. (c) Incentive Compensation - Annual (i) 1999 Executive shall participate in the 1999 Executive Incentive plan. The Target Incentive percentage is 15 percent of Executive's Base Salary with a potential maximum of 30 percent. Because Executive will not have worked for the entire calendar year 1999, Executive's award determination under the 1999 Executive Incentive Plan will be made on a pro-rata basis. (ii) Term of Agreement During the Term of this Agreement, unless sooner terminated, Executive shall be entitled to participate in the Company's Executive Incentive Plan and any successor Plans thereto, in accordance with the terms thereof. (d) Incentive Compensation - Long Term (i) 1999 The Company implemented a Restricted Stock Plan in 1995 as an equity-based long-term incentive plan. A grant under the Plan was made to all officers in January of 1999 with a three- year restricted period beginning January 1, 1999 and ending December 31, 2001, with a single financial goal of Cumulative Earnings Per Share ("CEPS"). The restricted stock grant percentage (a percentage of base salary converted into shares of stock based upon the closing price for a share of IDACORP common stock on December 31, 1998) for the position of Vice President - Human Resources is a target percentage of 20 percent. However, under the terms of the Plan, to be eligible to receive a final share award, each officer must be employed as an officer during the entire restricted period. Because Executive will not have been employed during the entire restricted period, the Company shall establish a Stock Equivalent equal to the grant Executive would have received under the Plan for 1999 based upon a Base Salary of $125,000 with a target percentage of 20 percent as follows: RESTRICTED STOCK PLAN EQUIVALENT 1999-2001 RESTRICTED PERIOD MARLENE WILLIAMS 1999 Grant Shares Title Name Target Base Salary Min Target Max V.P.-Human Marlene Williams 20% $125,000 345 691 1,036 Resources Goal - 1999-2001 Restricted Period (Cumulative Earnings Per Share) $6.90 $7.05 $7.20 Based upon IDACORP Common Stock closing price on December 31, 1998 of $36.1875. Effective on the Date of Hire, the Company shall establish, in Executive's name, a Stock Equivalent of 691 shares of IDACORP Common Stock. Executive shall be entitled, during the three-year restricted period, to receive dividend equivalents on such Stock Equivalents, which is the right to be paid an amount equal to any and all cash dividends declared on an equal number of outstanding shares of IDACORP common stock (Dividend Equivalent). Such Dividend Equivalent shall be paid to Executive in cash at the same time cash dividends are paid to IDACORP common shareholders. At the conclusion of the three-year restricted period, Executive shall be paid in cash an amount equal to the Stock Equivalents awarded to Executive under the terms of the Restricted Stock Plan. This allocation shall be unfunded, and the interest of Executive therein is unsecured and shall be subject to the general creditors of the Company. The payment of Stock Equivalents and Dividend Equivalents is subject to the condition that Executive be, on the date of payment, in the employ of the Company, except that Executive shall receive payment if Executive's employment is terminated by reason of death or Disability. (ii) Term of Agreement During the Term of this Agreement, unless sooner terminated, Executive shall be entitled to participate in the Company's Restricted Stock Plan and any successor Plans thereto in accordance with the terms thereof. (e) Expenses Company agrees to reimburse Executive for ordinary and necessary expenses incurred by her in performing services for Company pursuant to the terms of this Employment Agreement and in accordance with established Company policies. (f) Other Payments (i) Signing Bonus On the date of hire (April 12, 1999) the Company will pay Executive the sum of $15,000 as consideration for executing this Employment Agreement. (ii) Stock Buy Out On or about December 31, 1999, the Company will pay Executive, if Executive is still employed by Company, the sum of $15,000 for the opportunity Executive lost to receive a restricted stock award of 400 shares at approximately $37.00 per share for the calendar year 1999. On or about December 31, 2000, the Company will pay Executive, if Executive is still employed by Company, the sum of $7,500 for the opportunity Executive lost to receive a restricted stock award for the year 2000. 3. OTHER BENEFIT MATTERS (a) Flexible Time Off Flexible Time Off (FTO) hours are accrued each bi- weekly pay period. These hours provide compensated time off for vacation, personal illness, illness of a family member or other personal business. The accrual rate is based on length of service. New employees are entitled to accrue at the rate of three weeks per year. The Company will front load four weeks of FTO for Executive, and Executive shall, beginning on the Date of Hire, accrue FTO at the rate of 4.62 hours per bi-weekly pay period (120 hours per year) with a maximum accumulation of 360 hours. (b) Relocation. The following relocation expenses will be paid by the Company: (i) One preview trip with spouse and child, and one house-hunting trip with family, for a combined maximum of eight days allowed for the two trips. One-time transportation for the entire family from Glendale, Arizona to Boise, Idaho. (ii) Moving of household goods, including two vehicles, plus packing and unpacking. Boats, campers, bulk foods, livestock, building materials, etc. are not included. Storage of household goods not to exceed 90 days. (iii) Temporary housing as required for up to 90 days, or a $4,500 moving allowance. Family meal expenses will be paid during travel to Boise and for a period of one week upon arrival in Boise. Subsequent meal expenses are not covered. Meal expenses do not include, tobacco, alcoholic beverages, barbecue grills, propane, medicine, or similar non-food related expenses. (iv) Reimbursement of closing costs on the sale of current residence and on the purchase of a residence in Boise. Closing costs include Realtor's fees, loan origination fees and related closing expenses only. Gains and losses on the sale (market value) of an existing home, loan "points" paid, and similar non-closing related costs are not covered. In the event Executive has been unable to sell her home in Glendale within 90 days of putting it up for sale, the Company will turn the property over to the company with which it has home purchase arrangements. (v) Expenses not specifically outlined above are not covered by the Company. The employee's wages will be "grossed up" for income taxes on all relocation expenses which may impact the employees taxable income. (c) Retirement Benefits Annual retirement benefits for officers are payable under the Company Retirement Plan (a qualified defined benefit pension plan for all regular employees) and under the Company Security Plan for Senior Management Employees (a non-qualified defined benefit plan for senior management employees). Generally, total retirement benefits from the Retirement Plan and Security Plan will range from 60 percent to 75 percent (after ten to fifteen years of employment at a senior manager or officer level) of participant's average salary plus short-term incentive bonus in the highest five consecutive years in the last ten years of employment before retirement with a normal retirement coming at age 62. The principal element in the retirement benefits at the Company is the Security Plan. Eligibility in the Security Plan is limited to key employees that are designated by the Company. The Company shall designate Executive as a participant in the Security Plan upon the Date of Hire. Under the Security Plan, the retirement percentage equals six percent for each year of the first ten years and one percent for each year thereafter with a maximum retirement percentage of 75 percent. Each participant in the Security Plan is immediately vested. As further consideration for entering into this Agreement Executive shall, upon the Date of Hire, be credited with one year of service under the Security Plan. As a result, at the completion of the three year term of this Employment Agreement, Executive will have a retirement percentage of 24 percent (6 percent for each year of the three year term plus the 6 percent credit). (d) Nothing contained herein shall affect the Company's ability to alter, amend, modify, add to, delete or terminate any of the Company's employee benefit plans, policies or programs; provided, however, that the Company may take no such action which would have the effect of reducing or eliminating any benefit, right or feature which the Executive shall have as of the time of such action unless the Company's action applies equally to all executive officers participating in such plan, policy or program. 4. TERMINATION OF EMPLOYMENT Unless terminated in accordance with the following provisions of this Section 4, the Company shall continue to employ Executive and Executive shall continue to work for the Company, during the Term of this Agreement. (a) Death or Disability Executive's employment shall terminate automatically upon Executive's death during the Term of this Agreement. The Company shall be entitled to terminate Executive's employment because of Executive's Disability during the Term of this Agreement in accordance with the Company's long-term disability plan as in effect immediately prior to the Hire Date ("Disability"). (b) By the Company (i) The Company may terminate Executive's employment during the Term of this Agreement for Cause or without Cause. (ii) Cause shall mean (A) a material default or other material breach by Executive of her obligations under this Agreement, (B) failure by Executive diligently and competently to perform Executive's duties under this Agreement, or as prescribed by the Company, (other than any such failure resulting form Executive's incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by Executive pursuant to Subsection 4(d) after a written demand for substantial performance is delivered to Executive by the Senior Vice President - Administration, which demand specifically identifies the manner in which Company management believes that Executive has not substantially performed Executive's duties) (C) misconduct, dishonesty, insubordination, (D) any act by Executive detrimental to the good will of the Company or damaging to the Company's relationships with its customers, suppliers or employees, (E) Executive's final conviction of a felony or of a misdemeanor involving moral turpitude, or (F) Executive's involvement in a conflict of interest as referenced in Subsection 1(d) for which the Company makes a determination to terminate Executive's employment. (c) By Executive (i) Executive may terminate employment for Good Reason or, upon six months' prior written notice, without Good Reason. (ii) "Good Reason" means the occurrence (without Executive's express written consent) of any one of the following acts by the Company, or failures by the Company to act, unless such act or failure to act is corrected within thirty days of the Notice of Termination given in respect thereof: (A) the Company assigns any duties to Executive which are materially inconsistent with Executive's position, duties, offices, responsibilities or reporting requirements immediately prior to a Change in Control; or (B) the Company reduces Executive's base salary as in effect immediately prior to a Change in Control; or (C) the Company discontinues any bonus or other compensation plan or any other benefit, stock ownership plan, restructured stock plan, stock option plan, life insurance plan, health plan, disability plan or similar plan (as the same existed immediately prior to the Change in Control) in which Executive participated or was eligible to participate in immediately prior to the Change in Control and in lieu thereof does not make available plans providing at least comparable benefits; or (D) the Company takes action which adversely affects Executive's participation in, or eligibility for, or materially reduces Executive's benefits under, any of the plans described in (C) above, or deprives Executive of any material fringe benefit enjoyed by Executive immediately prior to the Change in Control, or fails to provide Executive with the number of paid vacation days to which Executive was entitled in accordance with this Employment Agreement immediately prior to the Change in Control; or (E) the Company requires Executive to be based at any office or location other than one within a 50-mile radius of the office or location at which Executive was based immediately prior to the Change in Control; or (F) the Company purports to terminate Executive's employment otherwise than as expressly permitted by this Agreement; or (G) any purported termination of Executive's employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Subsection 4(d); for purposes of this Agreement, no such purported termination shall be effective. Executive's right to terminate employment for Good Reason shall not be affected by Executive's incapacity due to physical or mental illness. Except as provided below, Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. No such event described hereunder shall constitute Good Reason unless Executive has given written notice to the Company specifying the event relied upon for such termination within two (2) months, (but in no event beyond the Term of this Agreement) from the occurrence of such event. (d) Termination Procedures. (i) Notice of Termination. Any purported termination of Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Subsection 11(a) hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's em ployment under the provision so indicated. (A) Terminations for Cause. A Notice of Termi nation for Cause shall specify in reasonable detail the specific provision(s) in this Agreement and the event(s) and/or performance matters relied upon as the basis for such termination. (B) Termination for Good Reason. A Notice of Termination for Good Reason shall specify in reasonable detail the specific provision(s) in this Agreement and the event(s) relied upon as the basis for such termination. (ii) Date of Termination. Except as otherwise provided in Section 9 of this Agreement, "Date of Termination," with respect to any purported termination of Executive's employment during the Term of this Agreement, shall mean (A) if Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that Executive shall not have returned to the full-time performance of Executive's duties during such thirty (30) day period), and (B) if Executive's employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company for other than Cause, shall not be less than thirty (30) days and, in the case of a termination by Executive other than for Good Reason, shall not be less than six (6) months, from the date such Notice of Termination is given). (iii) No Waiver. The failure to set forth any fact or circumstance in a Notice of Termination shall not constitute a waiver of the right to assert, and shall not preclude the party giving notice from asserting, such fact or circumstance in an attempt to enforce any right under or provision of this Agreement. 5. OBLIGATIONS OF THE COMPANY UPON TERMINATION (a) By the Company other than for Cause, Death or Disability, or by Executive for Good Reason. (i) If, during the Term of this Agreement, the Company terminates Executive's employment other than for Cause, death, or Disability, or Executive terminates her employment for Good Reason, (A) the Company shall pay or provide to Executive within 5 business days the Accrued Obligations (as that term is defined in subsection 5(b) below); (B) the Company shall continue to pay or provide to Executive, commencing with the month in which the Date of Termination shall have occurred and ending on the last day of the Term of the Agreement (the "Severance Period") (paid in the same form and at the same time as would have been paid had Executive's employment not terminated), (1) Executive's Annual Base Salary (at the same level that was being paid to Executive on the Date of Termination or, if higher, at the time of the Change in Control) and (2) an annual Incentive Compensation equal to the highest earned by Executive over the three years preceding the Date of Termination (or, if higher, over the three years preceding the date of the Change in Control); and (C) during the Severance Period, Executive shall be entitled to all health and welfare benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if Executive were still employed during such period, at the same level of benefits and at the same dollar cost to Executive as is available to all of the Company's officers generally. If and to the extent that equivalent benefits shall not be payable or provided under any such plan(s), the Company shall pay or provide equivalent benefits on an individual basis. The health and welfare benefits provided in accordance with this subsection shall be reduced by any comparable benefits provided by another employer. (ii) In lieu of the benefits provided under 5(a)(i), if, within the 36-month period following a Change in Control, the Company terminates Executive's employment, other than for Cause, death, or Disability, or Executive terminates her employment for Good Reason, (A) the Company shall pay or provide to Executive the payments and benefits set forth in subparagraph 5(a)(i); provided, however, that for purposes of subsections 5(a)(i)(B) and (C), the Severance Period shall terminate 18 months following the month in which the Date of Termination shall have occurred rather than on the last day of the Term of the Agreement; and (B) the Company shall pay Executive a severance benefit, payable in eighteen equal monthly installments, equal to eighteen months' base salary, plus the greater of (i) one and one- half times the most recent annual incentive compensation or (ii) one and one-half times the average annual incentive compensation for the three prior years. In addition, Executive will be entitled to continue participation in the Company's benefit plans for an eighteen month period, provided, however, that such benefit continuation will terminate upon Executive's coverage under comparable plans. The payments and benefits continuation provided to Executive by the Company pursuant to this subsection will be in full and complete satisfaction (except as provided in subsection (C) below) of any and all obligations owing to Executive pursuant to this Agreement. (C) It is the intention of the parties to this Agreement that no severance benefits hereunder will be paid to the extent that such benefits (either alone or when aggregated with other benefits contingent on a Change in Control paid to or for benefit of Executive) constitute "excess parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, under the circumstances set forth below, severance benefits payable under this Agreement shall be subject to the following ceiling notwithstanding anything in this Agreement to the contrary: The "aggregate present value" of severance benefits payable under this Agreement which, together with all other payments to Executive or for Executive's benefit, would be "parachute payments" if their "aggregate present value" equaled or exceeded 300% of Executive's "base amount" shall in no event exceed 295% of Executive's "base amount" (within those terms' meaning under Section 280G of the Code). (D) The determination of any reduction in the payments under this Agreement or in payments made other than pursuant to this Agreement, pursuant to the foregoing proviso, including apportionment among specific payments and benefits, shall be made by Executive in good faith, and such determination shall be conclusive and binding on the Company. The Company shall make the calculations referred to above within thirty days following the termination of Executive's employment and shall provide such calculations and the basis therefor to Executive within such period. In the event the foregoing limit is exceeded, Executive shall give notice to the Company within 20 days of Executive's receipt of such calculations and related information of Executive's determination of the reduction of benefits. The payments and benefits provided pursuant to Subsection (a) of Section 5 are intended as liquidated damages for a termination of Executive's employment by the Company other than for Cause, death, or Disability or for the actions of the Company leading to a termination of Executive's employment by Executive for Good Reason, and shall be the sole and exclusive remedy therefor. (ii) For purposes of this Agreement, "Change in Control" shall mean the earlier of the following to occur: (A) the dissolution or liquidation of the Company; (B) a reorganization, merger or consolidation of the Company with one or more unrelated corporations, if immediately after the consummation of such transaction less than a majority of the board of directors of the surviving corporation is comprised of Continuing Directors. Continuing Director shall mean (i) each member of the Board of Directors of the Company, while such person is a member of the Board, who is not the other party to the transaction, an Affiliate or Associate (as these terms are defined in the Exchange Act) of such other party to the transaction, or a representative of such other party or of any such Affiliate or Associate, and was a member of the Board immediately prior to the initial public announcement of a proposal relating to a reorganization, merger or consolidation involving such other party, or an Affiliate or Associate of such other party or (ii) any person who subsequently becomes a member of the Board, while such person is a member of the Board, who is not the other party to the transaction, or an Affiliate or Associate thereof, or a representative of such other party to the transaction or of any such Affiliate or Associate, if such person's nomination for election to the Board is recommended or approved by two-thirds of the Continuing Directors then in office; (C) the sale, exchange, transfer or other disposition of shares of the common stock of the Company (or shares of the stock of any person that is a shareholder of the Company) in one or more transactions, related or unrelated, to one or more Persons unrelated to the Company if, as a result of such transactions, any Person (or any Person and its affiliates) owns more than twenty percent (20%) of the voting power of the outstanding common stock of the Company; or (D) the sale of all or substantially all the assets of the Company. (iii) The Company is in the process of preparing Severance Agreements for Company officers. To the extent that the provision(s) of such Severance Agreements are more beneficial to Executive than the corresponding provision(s) of this Employment Agreement, Executive shall be entitled to be offered and to execute the Severance Agreement. (b) Death or Disability. If Executive's employment is terminated by reason of Executive's death or Disability during the Term of this Agreement, the Company shall pay to Executive or, in the case of Executive's death, to Executive's designated beneficiaries (or, if there is no such beneficiary, to Executive's estate or legal representative) in a lump sum in cash within 30 days after the Date of Termination, the sum of the following amounts (the "Accrued Obligations"): (1) any portion of Executive's Annual Base Salary through the Date of Termination that has not yet been paid; (2) with respect to Incentive Compensation (i) Incentive Compensation - Annual - set forth in Subsection 2(c) of this Agreement, an amount representing the Annual Incentive Compensation for the year that would otherwise vest and/or become payable within the year in which the Date of Termination occurs, computed by assuming that the amount of all such Incentive Compensation would be equal to the amount of such Incentive Compensation that Executive would have been eligible to earn for such period, and multiplying that amount by a fraction, the numerator of which is the number of days in such period through the Date of Termination, and the denominator of which is the total number of days in the relevant period and incentives under the Plan shall be governed by the rules of the Plan; (ii) Incentive Compensation - Long Term - set forth in Subsection 2(d) of this Agreement, the shares will vest, if at all, at the conclusion of the Restricted Period in accordance with the provisions of the Plan with the number of shares reduced pro rata based on the number of whole months having elapsed during the Restricted Period before the death or disability; (3) any accrued but unpaid Incentive Compensation and vacation pay; and the Company shall have no further obligations under this Agreement, except as specified in Section 6 below. (c) By the Company for Cause or by Executive other than for Good Reason. If Executive's employment is terminated by the Company for Cause during the Term of this Agreement, the Company shall pay Executive the Annual Base Salary through the Date of Termination to the extent not yet paid, and the Company shall have no further obligations under this Agreement, except as specified in Section 6 below. If Executive voluntarily terminates employment during the Term of this Agreement other than for Good Reason, the Company shall pay the Accrued Obligations to Executive in a lump sum in cash within 30 days of the Date of Termination, and the Company shall have no further obligations under this Agreement, except as specified in Section 6 below. (d) Notwithstanding any provision herein to the contrary, the Company shall not have any obligation to pay any amount or provide any benefit under this Section 5 unless and until the Executive executes a release of the Company, its affiliates and related parties, in such form as the Company may reasonably request, of all claims against the Company, its affiliates and related parties relating to the Executive's employment and termination thereof. 6. NON-EXCLUSIVITY OF RIGHTS Except as provided in Sections 1 and 3 of this Agreement, nothing in this Agreement shall prevent or limit Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its Affiliates for which Executive may qualify, nor shall anything in this Agreement limit or otherwise affect such rights as Executive may have under any contract or agreement with the Company or any of its Affiliates. Vested benefits and other amounts that Executive is otherwise entitled to receive under any other plan, policy, practice, or program of, or any contract or agreement with, the Company or any of its Affiliates on or after the Date of Termination shall be payable in accordance with the terms of each such plan, policy, practice, program, contract, or agreement, as the case may be, except as explicitly modified by this Agreement. 7. FULL SETTLEMENT The Company's obligation to make the payments provided for in, and otherwise to perform its obligations under, this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action that the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and the amount of any payment or benefit provided for in this Agreement shall not be reduced by any compensation earned by Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by Executive to the Company, or otherwise. 8. NON-COMPETITION PROVISION AND CONFIDENTIAL INFORMATION (a) Without prior written consent of the Company, during the period of Executive's employment with the Company and for 12 months thereafter, Executive shall not, as a shareholder, officer, director, partner, consultant, or otherwise, engage directly or indirectly in any business or enterprise which is "in competition" with the Company or its successors or assigns or Affiliates thereof or undertake any action which would be injurious to the Company or its Affiliates or assist the Company's or its Affiliates' competitors; provided, however, that Executive's ownership of less than five percent of the issued and outstanding voting securities of a publicly traded company shall not be deemed to constitute such competition. A business or enterprise is deemed to be "in competition" if it is engaged in any material business in any state of the United States in which the Company or any of its Affiliates operates at the "applicable time." "Applicable time" means (i) during the period of Executive's employment hereunder, the specific date, and (ii) after the Date of Termination, the Date of Termination. (b) Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its Affiliates and their respective businesses that Executive obtains during Executive's employment by the Company or any of its Affiliates and that is not public knowledge (other than as a result of Executive's violation of this Section 8) ("Confidential Information"). Executive shall not communicate, divulge, or disseminate Confidential Information at any time during or after Executive's employment with the Company, except with the prior written consent of the Company or as otherwise required by law or legal process. In no event shall any asserted violation of the provisions of this Section 8 constitute a basis for deferring or withholding any amounts otherwise payable to Executive under this Agreement. (c) (i) Executive acknowledges that if Executive shall breach or threaten to breach any provision of this Section 8, the damages to the Company and its Affiliates may be substantial, although difficult to ascertain, and money damages will not afford the Company and its Affiliates an adequate remedy. Therefore, if the provisions of this Section 8 are violated, in whole or in part, the Company and its Affiliates shall be entitled to specific performance and injunctive relief, without prejudice to other remedies the Company and/or its Affiliates may have at law or in equity. (ii) If any term or provision of this Section 8, or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Section 8, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Section 8 shall be valid and enforceable to the fullest extent permitted by law. Moreover, if a court of competent jurisdiction deems any provision hereof to be too broad in time, scope, or area, it is expressly agreed that such provision shall be reformed to the maximum degree that would not render it unenforceable.] 9. SUCCESSORS; BINDING AGREEMENT The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform. As used in this Agreement, the "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 10. ARBITRATION Any dispute or controversy between the parties relating to this Agreement (except any dispute relating to Section 8 hereof) or relating to or arising out of Executive's employment with the Company, shall be settled by binding arbitration in the City of Boise, State of Idaho, pursuant to the governing rules of the American Arbitration Association and shall be subject to the provisions of the Uniform Arbitration Act, Idaho Code, Sections 7- 901, et. seq. Judgment upon the award may be entered in any court of competent jurisdiction. Notwithstanding anything herein to the contrary, if any dispute arises between the parties under Section 8 hereof, or if the Company makes any claim under paragraph 6, the Company shall not be required to arbitrate such dispute or claim but shall have the right to institute judicial proceedings in any court of competent jurisdiction with respect to such dispute or claim. If such judicial proceedings are instituted, the parties agree that such proceedings shall not be stayed or delayed pending the outcome of any arbitration proceedings hereunder. 11. MISCELLANEOUS (a) Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and delivered personally or sent by certified mail, postage prepaid, addressed as follows: If to the Company: J. LaMont Keen Senior Vice President - Administration Idaho Power Company P. O. Box 70 Boise, Idaho 83707 If to Executive: Marlene Williams (Address to be provided at a later date) or to such other address as either party may designate by notice to the other, and shall be deemed to have been given upon receipt. (b) This Agreement constitutes the entire agreement between the parties hereto with respect to Executive's employment by the Company, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to Executive's employment with the Company. (c) This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed by the party or parties against whom or which enforcement of such waiver is sought. The failure of either party hereto at any time to require the performance by the other party hereto of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by either party hereto of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or a waiver of the provision itself or a waiver of any other provision of this Agreement. (d) This Agreement is binding on and is for the benefit of the parties hereto and their respective successors, heirs, executors, administrators and other legal representatives. Neither this Agreement nor any right or obligation hereunder may be assigned by the Company (except to an Affiliate) or by Executive. (e) If any provision of this Agreement, or portion thereof, is so broad, in scope or duration, so as to be unenforceable, such provision or portion thereof shall be interpreted to be only so broad as is enforceable. (f) This Agreement shall be governed by and construed in accordance with the laws of the State of Idaho. (g) This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. (h) Executive represents and warrants that Executive is not party to any agreement which would prohibit Executive from entering into this Agreement or performing fully Executive's obligations hereunder. (i) The obligations of Executive set forth in Section 8 represent independent covenants by which Executive is and will remain bound notwithstanding any breach by the Company, and shall survive the termination of this Agreement. IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the date first written above. IDAHO POWER COMPANY By:_________________________________ Senior Vice President - Administration MARLENE WILLIAMS _________________________________ Name:______________________________ EX-12 7
Exhibit 12 IDACORP, Inc Consolidated Financial Information Ratio of Earnings to Fixed Charges Twelve Months Twelve Months Ended December 31, Ended (Thousand of Dollars) June 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $101,775 $127,342 $135,247 $133,570 $133,806 $141,032 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (7,074) Equity in loss of equity method investments 0 0 0 0 458 674 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (143) Fixed charges, as below 66,324 70,215 70,418 69,634 69,923 71,303 Total earnings, as defined $168,425 $195,499 $204,252 $199,261 $199,365 $205,792 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,677 $ 62,017 Preferred stock dividends of subsidiaries-gross up-Idacorp rate 11,097 12,834 12,079 7,891 8,445 8,344 Rental interest factor 794 925 991 982 801 942 Total fixed charges, as defined $ 66,324 $ 70,215 $ 70,418 $ 69,634 $ 69,923 $ 71,303 Ratio of earnings to fixed charges 2.54x 2.78x 2.90x 2.86x 2.85x 2.89x
EX-12 8
Exhibit 12a IDACORP, Inc Consolidated Financial Information Supplemental Ratio of Earnings to Fixed Charges Twelve Months Twelve Months Ended December 31, Ended (Thousand of Dollars) June 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $101,775 $127,342 $135,247 $133,570 $133,806 $141,032 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (7,074) Equity in loss of equity method investments 0 0 0 0 458 674 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (143) Supplemental fixed charges, as below 68,946 72,826 73,018 72,208 72,496 73,868 Total earnings, as defined $171,047 $198,110 $206,852 $201,835 $201,938 $208,357 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,677 $ 62,017 Preferred stock dividends of subsidiaries-gross up-Idacorp rate 11,097 12,834 12,079 7,891 8,445 8,344 Rental interest factor 794 925 991 982 801 942 Total fixed charges 66,324 70,215 70,418 69,634 69,923 71,303 Supplemental increment to fixed charges* 2,622 2,611 2,600 2,574 2,573 2,565 Total supplemental fixed charges $ 68,946 $ 72,826 $ 73,018 $ 72,208 $ 72,496 $ 73,868 Supplemental ratio of earnings to fixed charges 2.48x 2.72x 2.83x 2.80x 2.79x 2.82x *Explanation of increment - Interest on the guaranty of American Falls Reservoir District bonds and Milner Dam, Inc. notes which are already included in operation expenses
EX-12 9
Exhibit 12b IDACORP, Inc Consolidated Financial Information Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements Twelve Months Twelve Months Ended December 31, Ended (Thousand of Dollars) June 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $101,775 $127,342 $135,247 $133,570 $133,806 $141,032 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (7,074) Equity in loss of equity method investments 0 0 0 0 458 674 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (143) Fixed charges, as below 66,324 70,215 70,418 69,634 69,923 71,303 Total earnings, as defined $168,425 $195,499 $204,252 $199,261 $199,365 $205,792 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,677 $ 62,017 Preferred stock dividends of subsidiaries-gross up-Idacorp rate 11,097 12,834 12,079 7,891 8,445 8,344 Rental interest factor 794 925 991 982 801 942 Total fixed charges 66,324 70,215 70,418 69,634 69,923 71,303 Preferred dividends requirements 0 0 0 0 0 0 Total combined fixed charges and preferred dividends $ 66,324 $ 70,215 $ 70,418 $ 69,634 $ 69,923 $ 71,303 Ratio of earnings to combined fixed charges and preferred dividends 2.54x 2.78x 2.90x 2.86x 2.85x 2.89x
EX-12 10
Exhibit 12c IDACORP, Inc Consolidated Financial Information Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements Twelve Months Twelve Months Ended December 31, Ended (Thousand of Dollars) June 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $101,775 $127,342 $135,247 $133,570 $133,806 $141,032 Adjust for distributed income of equity Investees 326 (2,058) (1,413) (3,943) (4,697) (7,074) Equity in loss of equity method investments 0 0 0 0 458 674 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (143) Supplemental fixed charges and preferred dividends, as below 68,946 72,826 73,018 72,208 72,496 73,868 Total earnings, as defined $171,047 $198,110 $206,852 $201,835 $201,938 $208,357 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,677 $ 62,017 Preferred stock dividends of subsidiaries-gross up-Idacorp rate 11,097 12,834 12,079 7,891 8,445 8,344 Rental interest factor 794 925 991 982 801 942 Total fixed charges 66,324 70,215 70,418 69,634 69,923 71,303 Supplemental increment to fixed charges* 2,622 2,611 2,600 2,574 2,573 2,565 Supplemental fixed charges 68,946 72,826 73,018 72,208 72,496 73,868 Preferred dividends requirements 0 0 0 0 0 0 Total combined supplemental fixed charges and preferred dividends $ 68,946 $ 72,826 $ 73,018 $ 72,208 $ 72,496 $ 73,868 Supplemental ratio of earnings to combined fixed charges and preferred dividends 2.48x 2.72x 2.83x 2.80x 2.79x 2.82x *Explanation of increment - Interest on the guaranty of American Falls Reservoir District bonds and Milner Dam Inc. notes which are already included in operation expenses
EX-12 11
Exhibit 12d Idaho Power Company Consolidated Financial Information Ratio of Earnings to Fixed Charges Twelve Months Twelve Months Ended December 31, Ended (Thousand of Dollars) June 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $109,173 $135,333 $142,710 $138,746 $140,984 $148,063 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (7,074) Equity in loss of equity method investments 0 0 0 0 476 476 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (115) Fixed charges, as below 55,227 57,381 58,339 61,743 61,394 62,275 Total earnings, as defined $164,726 $190,656 $199,636 $196,546 $198,032 $203,625 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,593 $ 61,333 Rental interest factor 794 925 991 982 801 942 Total fixed charges, as defined $ 55,227 $ 57,381 $ 58,339 $ 61,743 $ 61,394 $ 62,275 Ratio of earnings to fixed charges 2.98x 3.32x 3.42x 3.18x 3.23x 3.27x
EX-12 12
Exhibit 12e Idaho Power Company Consolidated Financial Information Supplemental Ratio of Earnings to Fixed Charges Twelve Months Twelve Months Ended December 31, Ended (Thousand of Dollars) June 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $109,173 $135,333 $142,710 $138,746 $140,984 $148,063 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (7,074) Equity in loss of equity method investments 0 0 0 0 476 476 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (115) Supplemental fixed charges, as below 57,849 59,992 60,939 64,317 63,967 64,840 Total earnings, as defined $167,348 $193,267 $202,236 $199,120 $200,605 $206,190 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,593 $ 61,333 Rental interest factor 794 925 991 982 801 942 Total fixed charges 55,227 57,381 58,339 61,743 61,394 62,275 Supplemental increment to fixed charges* 2,622 2,611 2,600 2,574 2,573 2,565 Total supplemental fixed charges $ 57,849 $ 59,992 $ 60,939 $ 64,317 $ 63,967 $ 64,840 Supplemental ratio of earnings to fixed charges 2.89x 3.22x 3.32x 3.10x 3.14x 3.18x *Explanation of increment - Interest on the guaranty of American Falls Reservoir District bonds and Milner Dam, Inc. notes which are already included in operation expenses
EX-12 13
Exhibit 12f Idaho Power Company Consolidated Financial Information Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements Twelve Months Twelve Months Ended December 31, Ended (Thousand of Dollars) June 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $109,173 $135,333 $142,710 $138,746 $140,984 $148,063 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (7,074) Equity in loss of equity method investments 0 0 0 0 47 476 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (115) Fixed charges, as below 55,227 57,381 58,339 61,743 61,394 62,275 Total earnings, as defined $164,726 $190,656 $199,636 $196,546 $198,032 $203,625 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,593 $ 61,333 Rental interest factor 794 925 991 982 801 942 Total fixed charges 55,227 57,381 58,339 61,743 61,394 62,275 Preferred stock dividends-gross up Idaho Power rate 10,682 12,392 12,146 7,803 8,275 8,857 Total combined fixed charges and preferred dividends $ 65,909 $ 69,773 $ 70,485 $ 69,546 $ 69,669 $ 71,132 Ratio of earnings to combined fixed charges and preferred dividends 2.50x 2.73x 2.83x 2.83x 2.84x 2.86x
EX-12 14
Exhibit 12g Idaho Power Company Consolidated Financial Information Supplemental Ratio of Earnings to Combined Fixed Charges and Preferred Dividends Requirements Twelve Months Twelve Months Ended December 31, Ended (Thousand of Dollars) June 30, 1994 1995 1996 1997 1998 1999 Earnings, as defined: Income before income taxes $109,173 $135,333 $142,710 $138,746 $140,984 $148,063 Adjust for distributed income of equity investees 326 (2,058) (1,413) (3,943) (4,697) (7,074) Equity in loss of equity method investments 0 0 0 0 476 476 Minority interest in losses of majority owned subsidiaries 0 0 0 0 (125) (115) Supplemental fixed charges and preferred dividends, as below 57,849 59,992 60,939 64,317 63,967 64,840 Total earnings, as defined $167,348 $193,267 $202,236 $199,120 $200,605 $206,190 Fixed charges, as defined: Interest charges $ 54,433 $ 56,456 $ 57,348 $ 60,761 $ 60,593 $ 61,333 Rental interest factor 794 925 991 982 801 942 Total fixed charges 55,227 57,381 58,339 61,743 61,394 62,275 Supplemental increment to fixed charges* 2,622 2,611 2,600 2,574 2,573 2,565 Supplemental fixed charges 57,849 59,992 60,939 64,317 63,967 64,840 Preferred stock dividends-gross up-Idaho Power rate 10,682 12,392 12,146 7,803 8,275 8,857 Total combined supplemental fixed charges and preferred dividends $ 68,531 $ 72,384 $ 73,085 $ 72,120 $ 72,242 $ 73,697 Supplemental ratio of earnings to combined fixed charges and preferred dividends 2.44x 2.67x 2.77x 2.76x 2.78x 2.80x *Explanation of increment - Interest on the guaranty of American Falls Reservoir District bonds and Milner Dam Inc. notes which are already included in operation expenses
EX-15 15 Exhibit 15 August 6, 1999 IDACORP, Inc. Idaho Power Company Boise, Idaho We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of IDACORP, Inc. and subsidiaries and Idaho Power Company and subsidiaries for the periods ended June 30, 1999 and 1998, as indicated in our reports dated July 30, 1999; because we did not perform an audit, we expressed no opinion on that information. We are aware that our reports referred to above, which are included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, are incorporated by reference in Idaho Power Company's Registration Statement No. 33-51215 on Form S-3 and IDACORP, Inc.'s Registration Statement Nos. 333-00139 and 333-64737 on Form S-3 and Registration Statement Nos. 33-56071 and 333-65157 on Form S-8. We also are aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, are not considered a part of the Registration Statements prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. DELOITTE & TOUCHE LLP Boise, Idaho EX-27 16 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT Ex-27a This schedule contains summary financial information extracted from IDACORP, Inc. and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1998 JUN-30-1999 PER-BOOK 1,725,905 139,280 320,086 368,227 0 2,553,498 451,076 0 294,644 745,720 0 105,919 724,832 0 13,715 48,150 86,193 0 0 0 828,969 2,553,498 339,222 27,224 239,668 266,892 72,330 12,356 84,686 33,944 50,742 0 50,742 34,931 0 85,445 1.35 1.35
EX-27 17
UT Ex-27b This schedule contains summary financial information extracted from Idaho Power Company and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1998 JUN-30-1999 PER-BOOK 1,723,824 110,207 257,546 367,630 0 2,459,207 94,031 358,348 268,243 720,622 0 105,919 724,832 0 13,715 17,276 86,193 0 0 0 790,650 2,459,207 339,222 27,061 239,668 266,729 72,493 11,712 84,205 30,625 53,580 2,720 50,860 34,979 0 106,260 0 0
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