IDACORP, Inc. · NYSE:IDA
IDACORP — Investor Presentation (April 2005)
40 slides from IDACORP's investor presentation, Apr 1, 2005
Slide 1: Presentation to Neil Kalton, A G Edwards
Presentation to Neil Kalton A G Edwards April 1, 2005 Boise, Idaho
Slide 2: IDACORP Forward Looking Information
ms IDACORP Forward Looking Information id In comection with the safe habor provisions of the Private Securities Litigation Refonn Act of 1995 (Refoum Act), IDACORP andIPC ae hereby filing cautionary statements identifymg importat factors that could cause actual results to differ materially from thos
Slide 3: IDACORP Strategy
IDACORP Strategy Darrel Anderson Senior Vice President Administrative Services and Chief Financial Officer
Slide 4: IDACORP Organization Structure
SSSIDACORP Organization Structure Regulated —__| Non-Regulated | | =a IDAHO An IOACORP Company
Slide 5: IDACORP Strategy
me IDACORP IDACORP Strategy ¢ “Electricity Plus” — Back to basics strategy that emphasizes Idaho Power as IDACORP’s core business. — Modest investment in IdaTech and IDACOMM.
Slide 6: IDACORP Highlights
mSIDACORP 9004 IDACORP Highlights ¢ General rate case settled in Idaho. ¢ Five new FERC hydro licenses issued. ¢ Integrated Resource Plan filed in Idaho & Oregon. ¢ Continued strong customer growth with 13,809 new customer additions in 2004. ¢ Non-regulated milestones achieved.
Slide 7: IDACORP Outlook For 2005
me IDACORP Outlook For 2005 ¢ Bennett Mountain tracker rate filed. ¢ Complete Oregon general rate case. ¢ Test year for an Idaho & Oregon general rate case. ¢ Reinvestment in utility infrastructure. ¢ Unfavorable hydroelectric conditions. ¢ Critical milestones at IdaTech and IDACOMM.
Slide 8: Service Territory
1H An IDACORP Company Service Territory OREGON >. pas WASHINGTON IDAHO ‘Snake River MONTANA hells « Aeryy ct a NEVADA UTAH WYOMING 8 Lower Salmon Shoshone Falls Hydroclectric Facilities and Nameplate Capacities © 17 Facilites wah 1707 Mw Capacity There! Pacttities ant Nameptate Capacities & 5 Factit
Slide 9: Brownlee Reservoir Inflows
mS poner POWER —___ Brownlee Reservoir Inflows April to July (Million Acre-Feet) 10.0- 1999 2000 2001 2002 2003 2004 2005 (Est.)* 9 * Northwest River Forecast Center -- March 18, 2005
Slide 10: Idaho Power Overview
SS POWER Idaho Power Overview Idaho Power Competitive Retail Rates Strong Customer Growth (kWh) pon 450 10.0; 0.0 440 9.0} $.0| 7.9 430 7.0; | 410 6.0 5.0 5.0} 45 4.0) 3.4 ayy 3.0} 2.0; 370 1.0 r 0.0 is 350° Residential Commercial Industrial 2000 2001 2002 2003 2004 M8 Idaho Power Company National A
Slide 11: IdaTech 2004 Achievements
11 m@SIDATECH IdaTech 2004 Achievements ¢ IdaTech opened its European legal entity in Germany and hired sales leaders for North America and Europe. ¢ Shipped 20 EtaGenS natural gas & propane systems. ¢ Started development of a backup fuel cell system. ¢ Obtained second DOE award: $1.4 million. — Off
Slide 12: IdaTech
‘SSIDATECH IdaTech ~ = ft ONCORP Cempany Range of Solutions: «Remote & Portable * Military, Transportation APUs * Combined Heat & Power * Onsite Hp Generation idaTech's PEM Fuel Cell Stack Multi-Fuel Capability 2-3 kWe Diesel/Kerosene, Biodiesel 4.6 kWe Natural Gas, Propane 5.0 kWe Hydrogen 1-2 kWe
Slide 13: IDACOMM 2004 Achievements
13 IDACONMIM mS IDACOT 2004 Achievements ¢ IDACOMM 1s continuing its BPL trials to include data services, limited Voice Over Internet of service and has now begun some limited streaming video tnals within a lab environment, all over BPL equipment. ¢ IDACOMM continues to evaluate the commercial marke
Slide 14: IDACOMM
14 m=SIDACOMM IDACOMM * Competitive Local Exchange Carner (CLEC) providing private fiber network solutions and broadband services for the small to medium-sized enterprise business market. ¢ Broadband-Over-Power Line (BPL) technical trials currently underway in Boise. Audio / Video Set Top Box for BP
Slide 15: IDACORP Long-Term Total Return Projection
mSIDACORP Long-Term Total Return Projectiona) (%) 12; 23% $—10% IdaTech & } Plus IDACOMM 10+ 8- 2-3% 6- Reinvest in Infrastructure 4+ is ok = fo Yield Ge Customer Growth Reinvest in Infrastructure > Plus: IdaTech and IDACOMM (1) Assumes successful regulatory strategy and retum to normal water condit
Slide 16: Integrated Resource Plan
8 IDAHO POWER. An IDACORP Company Integrated Resource Plan Karl Bokenkamp General Manager, Power Supply Planning
Slide 17: Goals of the 2004 IRP
mS Power Geais-of.the 20041? ¢ Acquire sufficient resources to reliably serve the growing demand for electricity throughout the 10- year planning period (2004-2013). ¢ Ensure that the porttolio of resources selected balance cost, risk and environmental concerns. ¢ Give equal and balanced considerati
Slide 18: Results of the 2004 IRP: Conclusions
REPOWER Results of the 2004 IRP An IDAEORP Company Conclusions ¢ Significant peak-hour deficiencies exist. — High in magnitude. — Typically short in duration. ¢ Combustion turbines are run for energy. — Predominately during the summer months early in the planning period, mcreasing in fall/winter lat
Slide 19: Additional Resource Requirements
REPOWER Results of the 2004 IRP Ar IDACORP Company Additional Resource Requirements ¢ The preferred portfolio 1s a balanced portfolio consisting of the following: — 350 MW wind (PPA) — 48 MW combined heat and power (CHP) — 100 MW geothermal (PPA) — 88 MW peaking resource — 62 MW peaking resource/DG
Slide 20: Idaho Power System
= SPOWER Idaho Power System Existing Generation Resources (2004) Projected Generation Resources (2013) Geothermal Natural Gas 1OOMW SOoMWw Wind 350MW Natural Gas ar: 450MW 10% Coal 1,.710MW Coal 1,.771MW Hydro 1,610MW 1,707MW 20
Slide 21: Timing of Resource Additions
mS rover Timing of Resource Additions 2005 — 2013 "= 124MWDRE& efficiency 2006 = 100 MW wind 2007 = 88 MW peaking resource =» 100 MW wind =» 12 MW CHP 2008 = 100 MW geothermal 2010 » 150 MW wind = 36 MW CHP = 62 MW peaking resource/DG 2011 = 500 MW coal (seasonal)
Slide 22: Preferred Portfolio: Summary of Advantages
REPOWER Preterred Portfolio An IDAEORP Company Summary of Advantages * Lowest risk adjusted portfolio power supply costs. * Diversifies IPC’s resource portfolio. * Positions IPC to meet potential public policy changes (CO2 tax, RPS). * Reduced resource commitment early in the planning period. * Resu
Slide 23: Near-term Action Plan
An IDACORE Soria Near-t erm Acti on Plan 2005 Issue RFP for 88 MW peaking resource. Select winning proposal(s) from wind RFP. DSM programs funding, final design & implementation. Issue RFP for 12 MW CHP projects. Issue RFP for 100 MW geothermal project. Partner(s) identified for 500 MW seasonal-owne
Slide 24: Regulatory Landscape
8 IDAHO POWER. An IDACORP Company Regulatory Landscape Ric Gale Vice President Regulatory Affairs
Slide 25: Power Cost Adjustment Mechanism
me POWER Power Cost Adjustment Mechanism ¢ What Is It? — An annual adjustment to Idaho Jurisdictional rates to create a revenue stream that more closely matches power supply expenses. ¢ What are the Power Supply Expenses? — Fuel — Purchased Power — Surplus Sales
Slide 26: How the PCA Works
mS POWER _ How the PCA Works ¢ 2 Major Components: * Forecast of future power supply expenses. ¢ True-up of previous power supply expenses. ¢ Adjustment to Idaho rates equivalent to 90° of variation in Idaho jurisdiction power supply expenses.
Slide 27: Power Cost Adjustment Mechanism
mEPoWeR Power Cost Adjustment Mechanism * Annual adjustment to Idaho jurisdictional rates to create a revenue stream that more closely matches power supply expenses including fuel and purchased power net of off-system sales. * PCA allows Idaho Power to set annual power costs in Idaho and pass 90% of
Slide 28: Bennett Mountain Power Project
sSrov _ Bennett Mountain Power Project ¢ Filed tracker on March 2, 2005. ¢ Total investment - $58.0 million. ¢ Overall rate of return — 7.852 percent. ¢ Revenue requirement - $9.4 million. ¢ Requested effective date — June 1, 2005.
Slide 29: IDACORP Financial Review
=e IDACORP GS FINANCIAL An IDACORP Company IDACORP Financial Review Steve Keen President and Chief Executive Officer ACORP Financial Services
Slide 30: Forms of tax credit investments
ssw SHIDACORP Commiany What form do tax credit investments take? Please comment on directindirect, diversified projects, etc., and the pros and cons of each. * We have both direct and indirect investments. Direct investments have a local GP responsible for primary oversight, with our company respons
Slide 31: Mechanics of affordable housing investments
31 SHIDACORPE Cosnoeny Explain the mechanics of affordable housing investments. An equity mvestment is made by IF - typically funded within the first 18 months. The return comes primarily from tax credits and the tax benefits associated with tax losses (from depreciating the asset). Additional benef
Slide 32: Section 42 credit expiration and risks
SHIDACORPE Cosnoeny When do Section 42 credits expire and what are the associated risks? * Currently there is no expiration date on Section 42 credits. ¢ The largest risk is that the property invested in does not survive economically, and is lost to foreclosure at some point — to retain the credits
Slide 33: Returns generated on these investments
33 What type of return is generated on these investments? Have prices increased . over the last 10 years? Current yields on cash investments are around 6% to 7% for fund investments and slightly higher for direct investments. Historically our cash yields have ranged from 8°%0-15%. We also have utili
Slide 34: Need to invest incremental dollars to maintain EPS
34 As tax credits roll off, is there a need to invest incremental dollars to maintain EPS power? ¢ Earnings result from the flow of credits and tax loss benefits being greater than the book loss recognition as the investment is retired. If no future investment occurred, eventually the earnings would
Slide 35: Financial Review
Financial Review Lori Smith Vice President Finance & Chief Risk Officer Dennis Gribble Vice President & Treasurer
Slide 36: Earnings Per Share
i? IDACORP IDACORP Earnings Per Share $2.50 5 $1.90 2002 2003 2004 36
Slide 37: Subsidiary Contributions
a 37 IDACORP IDACORP Subsidiary Contributions 2002 2003 2004 Idaho Power Company cet eee ae SS (1.7) IDACORP Energy $ (0.39) $ (0.25) $ 0.06 IDACORP Financial $ 023 $ O27 $ 0.35 Ida West Energy $ (0.14) $ (0.13) $ 0.08 Ida-Tech, DACOMM, etc $ (0.31) $ (0.11) $ (0.30) Total $ 1.63 $ 22) we 1.90
Slide 38: IDACORP Financial Highlights
a 38 Revenues (Millions) Customer Growth EPS (Basic & Diluted) Return on Equity (YE) Pre-Tax Interest Payout Ratio Book Value Per Share IDACORP Financial Highlights 2002 2003 2004 929 823 844 2.6% 2.8% 3.2% 1.63 1.22 1.90 7.1% 5.4% 7.2% 1.2X 14X 18x 114.0% 139.0% 63.0% 22.98 22.61 23.88
Slide 39: IDACORP Credit Ratings
mS IDACORP Credit Ratings Standard and Poor's Moody's Fitch IBCA Idaho IDACORP Idaho IDACORP Idaho IDACORP Power Power Power Corporate Credit Rating BBBt BBBt+ Baal Baaz None None Senior Secured Debt A- None AB None A- None Senior Unsecured Debt BBB BBB Baal Baaz BBB+ BBB Commercial Paper A-2 A-2 P-
Slide 40: 2005 Financing Plans
a 40 IDACORP IDACORP 2005 Financing Plans ¢ Extend Current Line of Credit Facilities from 3 to 5 Years - Apmil 05. * Hedge Interest Rate on $60M, 5.83% FMB, due Sept ‘05 — April °05. ¢ Enhance current variable rate PC bonds with Letters of Credit — May °05. ¢ Change current DRIP plan to orginal issu