Fitch Affirms IDA & IPC's Ratings; Outlook Stable.

NEW YORK -- Fitch Ratings has affirmed the ratings of IDACORP, Inc. and its primary subsidiary, Idaho Power Company as follows:

IDACORP:

--Long-term Issuer Default Rating (IDR) at 'BBB';

--Short-term Issuer Default Rating (IDR) at 'F2';

--Commercial paper rating at 'F2'.

Idaho Power Co.

--Long-term Issuer Default Rating (IDR) at 'BBB';

--Short-term Issuer Default Rating (IDR) at 'F2';

--Senior secured debt rating at 'A-';

--Senior unsecured debt rating affirmed at 'BBB+';

--Commercial paper rating affirmed at F2.

The Rating Outlook is Stable. Approximately $1.2 billion of debt securities are affected by the rating action.

The IDA and IPC ratings affirmation and Stable Rating Outlook reflect IPC's earnings and cash flow prospects, the beneficial effects of the utility's power cost adjustment mechanism and a reasonable regulatory environment in Idaho. Fitch assumes constructive rate treatment of IPC's 2007 - 2009 capital investment in utility infrastructure, normal precipitation in 2008 and 2009 and that external funding of its relatively large capital investment program will be supplied through a balanced mix of new debt and equity.

While the negative effects of below-normal water conditions in five of the past six years and anticipated drought conditions in 2007 are a source of concern, the impact is partially mitigated by the utility's power cost adjustment (PCA) mechanism. IPC's PCA mechanism passes through 90% of net power supply costs/benefits to ratepayers, which has, and is expected to continue to, offset a significant proportion of the negative impact of higher production costs during periods of below normal hydrogeneration output.

The primary concern for IDA and IPC fixed income investors is potential lower earnings and cash flow as the result of regulatory disallowance of investment in utility plant in pending and anticipated rate proceedings and/or significant cost over-runs. A continuation of prolonged drought conditions in the region is also a concern for investors on a secular basis. Fitch expects IDA will reach a reasonable settlement in the company's appeal of the IRS disallowance of approximately $45 million of tax deductions related to the capitalized cost methodology.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.