IDACORP (IDA)

The entities that IDACORP and IPC consolidate consist primarily of the wholly-owned subsidiaries discussed above.  In addition, IDACORP consolidates one VIE, Marysville Hydro Partners (Marysville), which is a joint venture owned 50 percent by Ida-West.  Marysville has approximately $21 million of assets, primarily a hydroelectric plant, and approximately $17 million of intercompany long-term debt, which is eliminated in consolidation.  For this joint venture, Ida-West is considered the primary beneficiary because the ownership of the intercompany note results in it absorbing a majority of the expected losses of the entity.

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Prior to October 2008, IDACORP also consolidated IFS’ limited partnership investment in Empire Development Company, LLC, (Empire) an entity that earned historic tax credits through the rehabilitation of the Empire Building in Boise, Idaho.  In 2008 the partnership agreement for Empire was amended and as a result of the amendment Empire no longer met the criteria to be a VIE.  Empire was deconsolidated and is now accounted for under the equity method of accounting, resulting in an increase in investments of $2 million and reductions of $9 million of other property, plant and equipment and $7 million in long-term debt.

Through IFS, IDACORP also holds variable interests in VIEs for which it is not the primary beneficiary.  These VIEs are historic rehabilitation and affordable housing developments in which IFS holds limited partnership interests ranging from five to 99 percent.  IFS does not absorb a majority of the expected losses of these entities, either because of specific provisions in the partnership agreements or due to not owning a majority interest.  These investments were acquired between 1996 and 2008.  IFS’s maximum exposure to loss in these developments is limited to its net carrying value, which was $75 million at December 31, 2008.

The entities that IDACORP and IPC consolidate consist primarily of the wholly-owned subsidiaries discussed above.  In addition, IDACORP consolidates one VIE, Marysville Hydro Partners (Marysville), which is a joint venture owned 50 percent by Ida-West.  Marysville has approximately $21 million of assets, primarily a hydroelectric plant, and approximately $17 million of intercompany long-term debt, which is eliminated in consolidation.  For this joint venture, Ida-West is considered the primary beneficiary because the ownership of the intercompany note results in it absorbing a majority of the expected losses of the entity.

81

Prior to October 2008, IDACORP also consolidated IFS’ limited partnership investment in Empire Development Company, LLC, (Empire) an entity that earned historic tax credits through the rehabilitation of the Empire Building in Boise, Idaho.  In 2008 the partnership agreement for Empire was amended and as a result of the amendment Empire no longer met the criteria to be a VIE.  Empire was deconsolidated and is now accounted for under the equity method of accounting, resulting in an increase in investments of $2 million and reductions of $9 million of other property, plant and equipment and $7 million in long-term debt.

Through IFS, IDACORP also holds variable interests in VIEs for which it is not the primary beneficiary.  These VIEs are historic rehabilitation and affordable housing developments in which IFS holds limited partnership interests ranging from five to 99 percent.  IFS does not absorb a majority of the expected losses of these entities, either because of specific provisions in the partnership agreements or due to not owning a majority interest.  These investments were acquired between 1996 and 2008.  IFS’s maximum exposure to loss in these developments is limited to its net carrying value, which was $75 million at December 31, 2008.

The entities that IDACORP and IPC consolidate consist primarily of the wholly-owned subsidiaries discussed above.  In addition, IDACORP consolidates one VIE, Marysville Hydro Partners (Marysville), which is a joint venture owned 50 percent by Ida-West.  Marysville has approximately $21 million of assets, primarily a hydroelectric plant, and approximately $17 million of intercompany long-term debt, which is eliminated in consolidation.  For this joint venture, Ida-West is considered the primary beneficiary because the ownership of the intercompany note results in it absorbing a majority of the expected losses of the entity.

81

Prior to October 2008, IDACORP also consolidated IFS’ limited partnership investment in Empire Development Company, LLC, (Empire) an entity that earned historic tax credits through the rehabilitation of the Empire Building in Boise, Idaho.  In 2008 the partnership agreement for Empire was amended and as a result of the amendment Empire no longer met the criteria to be a VIE.  Empire was deconsolidated and is now accounted for under the equity method of accounting, resulting in an increase in investments of $2 million and reductions of $9 million of other property, plant and equipment and $7 million in long-term debt.

Through IFS, IDACORP also holds variable interests in VIEs for which it is not the primary beneficiary.  These VIEs are historic rehabilitation and affordable housing developments in which IFS holds limited partnership interests ranging from five to 99 percent.  IFS does not absorb a majority of the expected losses of these entities, either because of specific provisions in the partnership agreements or due to not owning a majority interest.  These investments were acquired between 1996 and 2008.  IFS’s maximum exposure to loss in these developments is limited to its net carrying value, which was $75 million at December 31, 2008.

The entities that IDACORP and
IPC consolidate consist primarily of the wholly-owned subsidiaries discussed
above.  In addition, IDACORP consolidates one VIE, Marysville Hydro Partners
(Marysville), which is a joint venture owned 50 percent by Ida-West. 
Marysville has approximately $21 million of assets, primarily a hydroelectric
plant, and approximately $17 million of intercompany long-term debt, which is
eliminated in consolidation.  For this joint venture, Ida-West is considered
the primary beneficiary because the ownership of the intercompany note results
in it absorbing a majority of the expected losses of the entity.

81

Prior to October 2008,
IDACORP also consolidated IFS’ limited partnership investment in Empire
Development Company, LLC, (Empire) an entity that earned historic tax credits
through the rehabilitation of the Empire Building in Boise, Idaho.  In 2008 the
partnership agreement for Empire was amended and as a result of the amendment
Empire no longer met the criteria to be a VIE.  Empire was deconsolidated and
is now accounted for under the equity method of accounting, resulting in an
increase in investments of $2 million and reductions of $9 million of other
property, plant and equipment and $7 million in long-term debt.

Through IFS, IDACORP also
holds variable interests in VIEs for which it is not the primary beneficiary. 
These VIEs are historic rehabilitation and affordable housing developments in
which IFS holds limited partnership interests ranging from five to 99 percent. 
IFS does not absorb a majority of the expected losses of these entities, either
because of specific provisions in the partnership agreements or due to not
owning a majority interest.  These investments were acquired between 1996 and
2008.  IFS’s maximum exposure to loss in these developments is limited to its
net carrying value, which was $75 million at December 31, 2008.

The entities that IDACORP and
IPC consolidate consist primarily of the wholly-owned subsidiaries discussed
above.  In addition, IDACORP consolidates one VIE, Marysville Hydro Partners
(Marysville), which is a joint venture owned 50 percent by Ida-West. 
Marysville has approximately $21 million of assets, primarily a hydroelectric
plant, and approximately $17 million of intercompany long-term debt, which is
eliminated in consolidation.  For this joint venture, Ida-West is considered
the primary beneficiary because the ownership of the intercompany note results
in it absorbing a majority of the expected losses of the entity.

81

Prior to October 2008,
IDACORP also consolidated IFS’ limited partnership investment in Empire
Development Company, LLC, (Empire) an entity that earned historic tax credits
through the rehabilitation of the Empire Building in Boise, Idaho.  In 2008 the
partnership agreement for Empire was amended and as a result of the amendment
Empire no longer met the criteria to be a VIE.  Empire was deconsolidated and
is now accounted for under the equity method of accounting, resulting in an
increase in investments of $2 million and reductions of $9 million of other
property, plant and equipment and $7 million in long-term debt.

Through IFS, IDACORP also
holds variable interests in VIEs for which it is not the primary beneficiary. 
These VIEs are historic rehabilitation and affordable housing developments in
which IFS holds limited partnership interests ranging from five to 99 percent. 
IFS does not absorb a majority of the expected losses of these entities, either
because of specific provisions in the partnership agreements or due to not
owning a majority interest.  These investments were acquired between 1996 and
2008.  IFS’s maximum exposure to loss in these developments is limited to its
net carrying value, which was $75 million at December 31, 2008.

Principles of Consolidation

IDACORP's and IPC's condensed consolidated financial statements include the accounts of each company and their consolidated subsidiaries.  IDACORP also consolidates two variable interest entities (VIEs) for which it is the primary beneficiary.  All significant intercompany balances have been eliminated in consolidation.  Investments in entities in which IDACORP and IPC are not the primary beneficiaries, but have the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method.

Through IFS, IDACORP also holds significant variable interests in VIEs for which it is not the primary beneficiary.  These VIEs are historic rehabilitation and affordable housing developments in which IFS holds limited partnership interests ranging up to 99 percent.  These investments were acquired between 1996 and 2008.  IFS' maximum exposure to loss in these developments was $80 million at June 30, 2008.

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In the opinion of IDACORP and IPC, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly their consolidated financial positions as of June 30, 2008, and consolidated results of operations for the three and six months ended June 30, 2008, and 2007, and consolidated cash flows for the six months ended June 30, 2008, and 2007.  These adjustments are of a normal and recurring nature.  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 should be read in conjunction with the audited consolidated financial statements included in IDACORP's and IPC's Annual Report on Form 10-K for the year ended December 31, 2007.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.