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IDAHO POWER CO. $25 MILLION PREFERRED STOCK RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, June 22 /PRNewswire/ -- Idaho Power Co.'s (IPC) proposed new offering of $25 million preferred stock is rated 'A' by Fitch. The company's $471 million 'A+' first mortgage bonds, $108 million 'A' preferred stock, and 'F-1' commercial paper are affirmed. The credit trend is improving.
 Idaho Power, one of very few investor-owned utilities with a predominantly hydroelectric generating base, continues to be among the nation's lowest cost investor-owned electricity providers. In a normal hydro year, 58 percent of electric power supply is provided by hydro, 38 percent coal, and 4 percent purchased power.
 Prior to 1993, however, the company's hydro system had not experienced normal stream flows for some years. In 1992, IPC's worst water year on record, hydro supplied only 35 percent of power supply, with higher cost coal and purchased power increasing to 52 percent and 13 percent, respectively. Hydro conditions are showing considerable improvement in 1993, reflecting this year's close to normal snowpack and the above-normal April-June runoff. Although stream flows are not anticipated to fully return to normal this year, the supply mix is projected to improve substantially.
 Before 1993, Idaho Power did not have an adjustment mechanism to automatically recover increases in power costs. In November 1992, management requested implementation of a Power Cost Adjustment (PCA) mechanism, which was approved by the Idaho Public Utility Commission on March 29, 1993. Under the PCA terms, rates will be adjusted annually to reflect net power supply costs based on forecast supply costs. When the PCA is fully implemented, 90 percent of these costs will be passed through to customers, with shareholders absorbing the remaining 10%. Conversely, shareholders would benefit to the extent of 10% of any reduction in costs. Adoption of this adjustment mechanism will enhance credit quality by substantially reducing the impact of poor water years.
 To meet forecast load growth of about 1.4% per year, some 600 megawatts of resource additions will be required. While capital expenditures for 1988-1992 totaled $437 million, outlays for 1993-1997 will increase to about $700 million. Even so, internal cash is expected to fund 75 percent - 80 percent of capital outlays over this period.
 Idaho Powers' capital structure should remain comparatively strong, with common equity rising slightly to 45% of capitalization from 43.0 percent at March 31, 1993; preferred stock and total debt are expected to range between 8 percent - 9 percent and 46 percent - 47 percent, respectively, compared with 7.5 percent and 49.5 percent. Pretax interest coverage, which at 2.50 times (x) for 1992, was substantially below that normally expected for 'A+' electric utilities, will recover to over 3.0x in 1993, with further improvement to around 3.25x expected in 1994-1995.
 -0- 6/22/93
 /CONTACT: Ken Alterman of Fitch, 212-908-0563/
 (IDA)


CO: Idaho Power Co. ST: Idaho IN: UTI SU: RTG

SH -- NY024 -- 4472 06/22/93 10:10 EDT
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Publication:PR Newswire
Date:Jun 22, 1993
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