IDACORP Sets Second Quarter Earnings Record

Quarter Highlights:

• Earnings per share: 86 cents in 2000 vs. 56 cents in 1999
• Energy marketing contribution increases $21 million
• IdaTech delivers fuel cell systems to BPA

IDACORP (the Company) reported earnings of 86 cents per share, up 30 cents per share or 53 percent over last year's second quarter results. The Boise-based holding company also reported total revenues of $213.1 million, a $48.0 million increase over last year's second quarter. Net income increased $11.3 million to $32.5 million in the period and increased $23.9 million to $74.6 million for the first six months.

Year-to-date earnings are $1.98 per share or 63 cents per share over last year. This year's performance includes a 22-cent contribution from the sale of the Hermiston Power Project reported during the first quarter.

"With such a strong performance midway through the year, we should exceed our goal of 8 to 10 percent annual earnings growth even without the contribution from the sale of Hermiston," said President and CEO Jan B. Packwood. "This growth puts IDACORP in the upper quartile of our industry."

The Company reported $28.0 million in income from energy marketing activities for the quarter, a $20.9 million increase. The 295 percent increase over the same period a year ago is largely due to the Company's success in managing its energy marketing activities for itself and its customers in a period of unprecedented price volatility in the region.

"We've established our Company as skilled and successful energy traders and risk managers in this unique period in our industry's history," said Packwood. "Unprecedented economic expansion and unusual weather patterns throughout the West are pressuring limited supplies of transmission and generation. This has caused energy markets to become quite volatile. While this volatility has had a negative impact on some of the utilities in our region, we've demonstrated our ability to manage through these times."

The Company's principal subsidiary, Idaho Power, recorded strong results for the period; however weather-related factors that include a decrease in streamflow conditions into Brownlee Reservoir, the water source for the Company's three Hells Canyon hydroelectric projects, caused the utility's contributions to earnings to fall short of last year's results. Income from operations was down $3.6 million in the second quarter and $7.4 million for the year-to-date.

Higher prices on the energy market, increased customer demand for energy and Power Cost Adjustment (PCA) rate adjustments contributed to operating revenues of $213.1 million for the second quarter, $48.0 million greater than the second quarter 1999. General business revenues were up $9.6 million when compared to 1999 due primarily to a 41 percent increase in irrigation revenue and the PCA rate increase that took effect May 16. Though off-system sales volumes were nearly unchanged from last year's second quarter, revenues were more than twice that of 1999 because of the 117 percent increase in prices received for off-system power. However, these prices also adversely affected the Company's expenses.

Power supply costs were up more than $52 million over the same period last year. Power supply costs increased due to less favorable hydro conditions in the second quarter this year causing Idaho Power to increase reliance on its more costly thermal plants and open market purchases to meet native load requirements. Open market purchases increased substantially in the quarter, most notably in June, as a result of unanticipated generation facility outages and increased loads due to warmer-than-normal weather. 
These costs are offset by off-system sales in determining the amount of costs to be passed through the PCA.

"While the PCA mitigates much of the increase in net power supply costs, nearly 25 percent of net power supply-related expenses still affect the bottom line," Packwood said. The Company's share of net power supply-related expenses in the second quarter were $5.4 million. Other operating expenses were nearly unchanged from last year's second quarter.

Idaho Power added 10,478 general business customers over the past 12 months -- a 2.8 percent growth rate. As of June 30, Idaho Power had 388,296 general business customers.

IDACORP Financial continues to provide solid earnings contributing three cents per share in the second quarter and six cents per share for the six month ended period. The bulk of its investment portfolio is in affordable housing projects, though it is also expanding into projects that provide historical tax credits. IDACORP Financial recently closed on a historical tax credit project in San Diego, Calif., the El Cortez project, that is expected to be accretive to earnings beginning in the third quarter.

The Company's independent power project developer, Ida-West Energy, added two cents per share during the quarter and 27 cents per share so far this year. Included is the 22-cent gain on the Hermiston Power Project recorded in the first quarter. Ida-West also announced its intention to respond to a request for proposals (RFP) that Idaho Power has indicated it will issue this year to acquire additional energy and capacity in 2004. If Ida-West is selected in the RFP process, it intends to develop the 250-megawatt Garnet Energy Facility - a combined cycle natural gas turbine facility in southwest Idaho. As planned, this unit could be online in mid 2004 and could meet the longer term energy requirements of Idaho Power as reported in the Integrated Resource Plan filed in June with the Idaho and Oregon public utility commissions.

In early June, IdaTech delivered the first of 110 fuel cell systems to Bonneville Power Administration. Since then, two additional units have been delivered with the final seven "alpha" units scheduled to go out by the end of 2000. IdaTech also received an additional patent on its fuel processor. This patent covers the process that will help reduce the cost of the materials used in the hydrogen purification module. IdaTech is on schedule to demonstrate a natural gas fuel cell system later this summer and it continues to work on key alliances to meet the goal of commercializing fuel cell systems for home and small commercial applications by 2003.

This news release may contain forward-looking statements regarding the company's current expectations. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from the expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in the company's Annual Report on Form 10-K for the year 1999 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2000. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.