What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-02-16 compared with 2022-02-17 · 94 added, 116 removed, 274 unchanged (43% of the section changed)

2 unchanged sentences

These risk factors, as well as additional risks and uncertainties either not known as of the date of this report or that are currently believed to not be material to the business, may have a material impact on the business, financial condition, or results of operations of IDACORP and Idaho Power and could cause actual results or outcomes to differ materially from those discussed in any forward-looking statements.

These risk factors, as well as other information in this report, including without limitation, in Part II - Item 7 - "Management’s Discussion and Analysis of Financial Condition and Results of Operations - Matters Impacting Future Results" in this report, and information in other reports the companies file with the SEC, may be important to understanding any statement in this 2021 Annual Report or elsewhere and should be considered carefully when making any investment decisions relating to IDACORP or Idaho Power.

IDACORP's and Idaho Power's businesses regularly face risks, many of which may cause future results to be different than anticipated as of the date of this report.

Below are certain important utility-specific regulatory, operational, legal and compliance, financial and investment, and general business risks.

IDACORP's and Idaho Power's reactions to material future developments as well as the utility industry's reactions to those developments may also impact the Companies' future results.

These risk factors, as well as other information in this report, including without limitation, in the "Cautionary Note Regarding Forward-Looking Statements" and Part II - Item 7 - "Management’s Discussion and Analysis of Financial Condition and Results of Operations" (MD&A), and in other reports the companies file with the SEC, should be considered carefully when making any investment decisions relating to IDACORP or Idaho Power.

Below are certain important utility-specific regulatory, operational, legal and compliance, financial and investment, and general business risks that may cause IDACORP's and Idaho Power's future business results to be different than anticipated as of the date of this report.

Utility-Specific Regulatory Risks

Utility-specific regulatory risk includes the risks that federal, state, or local regulators may impose additional requirements and costs on Idaho Power and the utility industry, reduce authorized rates of return or otherwise adversely affect recovery of costs and the opportunity to earn a return on investments, or require Idaho Power as a utility to make adverse changes to its business models, strategies, and practices.

State or federal regulators may not approve customer rates that provide timely or sufficient recovery of Idaho Power's costs or allow Idaho Power to earn a reasonable rate of return, which could cause IDACORP's and Idaho Power's financial condition and results of operations to be adversely affected .

The prices that the IPUC and OPUC authorize Idaho Power to charge customers for its retail services, and the tariff rate that the FERC permits Idaho Power to charge for its transmission services, are significant factors influencing IDACORP’s and Idaho Power’s business, results of operations, liquidity, and financial condition.

Idaho Power's ability to recover its costs and earn a reasonable rate of return can be affected by many regulatory factors, including the timing difference between when Idaho Power incurs costs and when Idaho Power recovers those costs in customers’ rates (often called "regulatory lag" in the utility industry), and differences between the costs included in rates and the amount of actual costs incurred.

Idaho Power expects to incur increasing costs, which is likely to occur before the IPUC, OPUC, or FERC approve the recovery of those costs, such as construction costs for new facilities and transmission resources, changes in the long-term cost-effectiveness or changes to the operating conditions of Idaho Power's assets that could result in early retirements of utility facilities, the costs of compliance with legislative and regulatory requirements, increased funding levels of Idaho Power's defined benefit pension plan, and the costs of damage from fires, climate change and weather-related events, and natural disasters.

The IPUC, OPUC, and FERC may not allow Idaho Power to recover some or all of those costs on the basis that they find Idaho Power did not reasonably or prudently incur those costs or for other reasons.

State or federal regulators may not approve customer rates that provide timely or sufficient recovery of Idaho Power's costs or allow Idaho Power to earn a reasonable rate of return, which could adversely affect IDACORP's and Idaho Power's financial condition and results of operations .

The prices that the Idaho Public Utilities Commission (IPUC) and Public Utility Commission of Oregon (OPUC) authorize Idaho Power to charge customers for its retail services, and the tariff rate that the FERC permits Idaho Power to charge for its transmission services, are significant factors influencing IDACORP’s and Idaho Power’s business, results of operations, liquidity, and financial condition.

Idaho Power's ability to recover its costs and earn a reasonable rate of return can be affected by many regulatory factors, including the time between when Idaho Power incurs costs and when Idaho Power recovers those costs in customers’ rates (often called "regulatory lag" in the utility industry), and differences between the costs included in rates and the amount of actual costs incurred.

Idaho Power expects to incur increasing costs, which is likely to occur before the IPUC, OPUC, or FERC approve the recovery of those costs, such as construction costs for new facilities and transmission resources, costs associated with changes in the long-term cost-effectiveness or operating conditions of Idaho Power's assets that could result in early retirements of utility facilities, costs of compliance with legislative and regulatory requirements, fuel and wholesale power costs, and increased funding levels of Idaho Power's defined benefit pension plan.

The IPUC, OPUC, and FERC may not allow Idaho Power to recover some or all of those costs or costs that have already been deferred as regulatory assets if they find Idaho Power did not reasonably or prudently incur those costs or for other reasons.

The IPUC and OPUC may adopt different methods of calculating the allocation of the total utility costs in their respective jurisdictions, resulting in certain costs excluded in both states.

4 unchanged sentences

In the past, Idaho Power has been denied recovery, or required to defer recovery pending the next general rate case, including denials or deferrals related to capital expenditures for long-term project expenses.

Adverse outcomes in regulatory proceedings, or significant regulatory lag, may cause Idaho Power to incur increased or unrecovered project costs or result in cancellation of projects, or to record an impairment of its assets or otherwise adversely affect cash flows and earnings.

Adverse outcomes in regulatory proceedings, or significant regulatory lag, may cause Idaho Power to incur unrecovered project costs or result in cancellation of projects, or to record an impairment of its assets or otherwise adversely affect cash flows and earnings.

This may also result in lower credit ratings, reduced access to capital, higher financing costs, and reductions or delays in planned capital expenditures.

For additional information relating to Idaho Power's state and federal regulatory framework and regulatory matters, see Part I - Item 1 - "Business - Utility Operations," Part II - Item 7 - "Management’s Discussion and Analysis of Financial Condition and

Results of Operations - Regulatory Matters," and Note 3 - "Regulatory Matters" to the consolidated financial statements of Part II - Item 8 in this report.

For additional information relating to Idaho Power's state and federal regulatory framework and regulatory matters, see Part I - Item 1 - "Business - Utility Operations," Part II - Item 7 - MD&A - "Regulatory Matters," and Note 3 - "Regulatory Matters" to the consolidated financial statements of Part II - Item 8 in this report.

Idaho Power's regulatory cost recovery mechanisms may not function as intended and are subject to change or elimination, which may adversely affect IDACORP's and Idaho Power's financial condition and results of operations.

Idaho Power has power cost adjustment mechanisms in its Idaho and Oregon jurisdictions and a fixed cost adjustment mechanism in Idaho.

Idaho Power has power cost adjustment mechanisms in its Idaho and Oregon jurisdictions and a fixed cost adjustment (FCA) mechanism in Idaho.

The power cost adjustment mechanisms track Idaho Power’s actual net power supply costs (primarily fuel and purchased power less wholesale energy sales) and compare these amounts to net power supply costs being recovered in retail rates.

3 unchanged sentences

When power costs rise above the level recovered in current retail rates, Idaho Power incurs the costs but recovery of those costs is deferred to a subsequent collection period, which can adversely affect Idaho Power’s operating cash flow and liquidity until those costs are recovered from customers.

The fixed cost adjustment mechanism is a decoupling mechanism that allows Idaho Power to charge Idaho residential and small commercial customers when it recovers less than the base level of fixed costs per customer that the IPUC authorized for recovery in the most recent general rate case.

The power cost and fixed cost adjustment mechanisms are generally subject to change at the discretion of applicable state regulators, who could decide to modify or eliminate either mechanism in a manner that adversely impacts IDACORP's and Idaho Power's financial condition, cash flows, and results of operations.

In December 2021, the IPUC approved Idaho Power's proposed modifications to the fixed cost adjustment mechanism (FCA) to institute separate, and reduced, fixed cost tracking for customers added to Idaho Power's system after December 31, 2021.

In January 2022, the IPUC approved Idaho Power's proposed modifications to the power cost adjustment mechanism (PCA), which would simplify the mechanism without impairing the intent or effectiveness of the PCA and have no material impact on overall cost recovery.

The FCA mechanism is a decoupling mechanism that allows Idaho Power to charge Idaho residential and small commercial customers when it recovers less than the base level of fixed costs per customer that the IPUC authorized for recovery in the most recent general rate case.

The power cost and FCA mechanisms are generally subject to change at the discretion of applicable state regulators, who could decide to modify or eliminate either mechanism in a manner that adversely impacts IDACORP's and Idaho Power's financial condition, cash flows, and results of operations.

Operational Risks

Operational risk relates to risks arising from the systems, assets, processes, people, and external factors that affect the operation of IDACORP's or Idaho Power's businesses.

The ongoing impacts of COVID-19 could adversely affect IDACORP's and Idaho Power's business functions, financial condition, and results of operations.

The COVID-19 public health crisis has had, and continues to have, widespread impacts on the global economy and on Idaho Power's employees, customers, contractors, and suppliers, and there is considerable uncertainty regarding the duration and intensity of the COVID-19 public health crisis.

At the peak of the public health crisis, authorities implemented various measures to reduce the spread of the virus, such as restrictive orders and mandates (including those in effect in Idaho Power's service area in the states of Idaho and Oregon), as well as business and government shutdowns.

While governmental authorities have eased restrictions and vaccines are available, it is possible that an increase in COVID-19 cases or variants or their severity could prompt a return to tighter restrictions in some or all of the states and countries in which Idaho Power and its contractors and suppliers operate.

Restrictions of this nature are difficult to predict and may cause Idaho Power or its contractors to miss milestones on construction and generation resource projects and experience operational delays, delay the delivery of electrical infrastructure and other supplies that it sources from around the globe, delay the connection of electric service to new customers, prolong the time period necessary to perform maintenance of infrastructure, and reduce the use of electricity by commercial and industrial customers.

For example, several suppliers and contractors have notified Idaho Power that they will be unable to timely perform services or deliver products due to supply chain and workforce disruptions associated with the public health crisis, and some have attempted to rely on force majeure provisions in their contracts with Idaho Power to permit a delay in performance.

These delays could result in untimely completion of infrastructure projects, which could adversely affect Idaho Power’s operations and financial condition.

The federal government has issued, and may continue to issue, mandates related to COVID-19 vaccines, testing, and other restrictions and requirements that may be applied to Idaho Power and its workforce.

Idaho Power is uncertain to what extent the requirements could disrupt the supply chain or result in Idaho Power losing skilled or specialized employees or limit Idaho Power’s ability to attract and retain skilled or specialized employees who are unwilling to abide by such restrictions, such as obtaining a vaccine or subjecting themselves to masking and weekly testing.

Idaho Power, based on discussions with employees, does believe that attrition of skilled workers could result from application of a mandate for COVID-19 vaccines and masking and testing requirements to Idaho Power's workforce.

If Idaho Power loses key portions of its skilled or specialized

workforce, or significant supply chain disruptions occur, those events could adversely impact Idaho Power's ability to provide reliable service to its customers and its business and results of operations.

Further, while Idaho Power has implemented numerous COVID-19-related safety measures, Idaho Power has a limited number of highly skilled operators for some of its critical power plants and its grid operations centers.

If a large portion of Idaho Power's employees in those critical facilities were to contract COVID-19 at the same time, Idaho Power would need to rely upon its business continuity plans in an effort to continue operations at those facilities.

There is no certainty that such measures will be sufficient to mitigate the adverse impact to its operations.

Additionally, the uncertainty around and impacts of COVID-19 on IDACORP’s and Idaho Power’s business operations and access to capital, on their customers, and on the utility industry and economy as a whole, could adversely impact IDACORP’s financial condition, and business operations.

For example, the costs related to Idaho Power's noncontributory defined benefit pension plan, as well as a defined benefit postretirement benefit plan (consisting of health care and death benefits) that covers eligible retirees, are based in part on the value of the plans’ assets and, therefore, adverse investment performance for these assets or the failure to maintain sustained growth in pension investments over time could increase its plan costs and funding requirements related to the plans.

Similarly, IDACORP and Idaho Power rely on access to the capital markets to fund capital requirements.

To the extent that access to the capital markets is adversely affected by COVID-19, IDACORP and Idaho Power may need to consider alternative sources of funding, such as existing or additional credit facilities, for its operations and for working capital, which may increase its cost of, as well as adversely impact its access to, capital.

Increased volatility or significant disruptions in the global financial markets due to COVID-19 could impact IDACORP's and Idaho Power's ability to comply with debt covenants.

These uncertain economic conditions may also result in the inability of Idaho Power's customers to pay for electric service, which could affect the collectability of its revenues and adversely affect its financial results.

The degree to which COVID-19 may continue to impact IDACORP's and Idaho Power's liquidity, financial condition, and results of operations is unknown at this time and will depend on future developments, including the continuing spread of the virus and variants, the severity of the disease, the duration of the outbreak, the effectiveness and deployment rate of vaccines, and actions that may be taken by governmental authorities.

Changes in customer growth and customer usage may negatively affect IDACORP's and Idaho Power's business, financial condition, and results of operations .

Changes in the number of customers and customers' use of electricity are affected by a number of factors, such as population growth or decline in Idaho Power's service area, expansion or loss of service area, changes in customer needs and expectations, adoption rates of energy efficiency measures, customer-generated power such as from solar panels and gas-fired generators, demand-side management requirements, regulation or deregulation, and adverse economic conditions.

An economic downturn or recession, as a result of the COVID-19 public health crisis or otherwise, could also negatively impact customer use and reduce revenues and cash flows, thus adversely affecting results of operations.

Continued inflationary pressures, or a n economic downturn, or a recession could also negatively impact customer use and reduce revenues and cash flows, thus adversely affecting results of operations.

Many electric utilities, including Idaho Power, have experienced a decline in usage per customer, in part attributable to energy efficiency activities.

2 unchanged sentences

If customers choose to generate their own energy, discontinue a portion or all service from Idaho Power, or replace electric power for heating with natural gas, demand for Idaho Power's energy may decline and adversely impact the affordability of its services for remaining customers.

While Idaho Power has recently experienced a net growth in usage due to an increase in the number of customers, when adjusted for the impacts of weather, the average monthly usage on a per customer basis for Idaho Power's residential customers has declined from 1,042 kilowatt-hour (kWh) in 2011 t o 945 kWh in 2021.

Rate mechanisms, such as the Idaho fixed cost adjustment for residential and small commercial customers, are designed to address the financial disincentive associated with promoting energy efficiency activities, but there is no assurance that the mechanism will result in full or timely collection of Idaho Power's fixed costs, which are currently collected in large part through the company's volume-based energy rates that are based on historical sales volume.

Rate mechanisms, such as the Idaho FCA for residential and small commercial customers, are designed to address the financial disincentive associated with promoting energy efficiency activities, but there is no assurance that the mechanism will result in full or timely collection of Idaho Power's fixed costs, which are currently collected in large part through the company's volume-based energy rates that are based on historical sales volume.

Any undercollection of fixed costs would adversely impact revenues, earnings, and cash flows.

The formation of municipal utilities or similar entities for distribution systems within Idaho Power's service area could also result in a load decrease.

The loss of loads resulting from some of these events may result in excess infrastructure and stranded costs and require IDACORP and Idaho Power to modify or eliminate large generation or transmission projects.

This could in turn result in reduced revenues as well as write-downs or write-offs if regulators determine that the costs of the projects were incurred imprudently, which could have a material adverse impact on IDACORP's and Idaho Power's financial condition, results of operations, and cash flows.

Conversely, if Idaho Power were to experience an unanticipated increase in the demand for energy through, for example, the rapid addition of new industrial and commercial customers or population growth in the service area, Idaho Power may be required to rely on higher-cost purchased power to meet peak system demand and may need to accelerate investment in additional generation or transmission resources.

Idaho Power's 2021 IRP's preferred resource portfolio and action plan included a need to ac quire significant generation and storage resources to meet forecasted increasing energy and capacity needs.

Idaho Power issued requests for proposals in June 2021 and December 2021 for additional energy resources, including renewables or natural gas resource convertible to hydrogen gas power, as described in Part 1, Item 1 - "Resource Planning and Renewable Energy Projects" in this report .

Idaho Power's 2021 Integrated Resource Plan's (IRP) preferred resource

portfolio and action plan included a need to ac quire significant generation and storage resources to meet forecasted increasing energy and capacity needs.

There can be no assurance that these energy and capacity needs will not change or that the resources will be adequate to meet load demands, in which case Idaho Power would need to rely on wholesale power purchases and would be subject to the volatility of wholesale markets.

If the incremental costs associated with unanticipated changes in loads exceed the incremental revenue received from the s ales to the new customers, and Idaho Power is unable to secure timely and full rate relief to recover those increased costs, the resulting imbalance could have an adverse effect on IDACORP's and Idaho Power's financial condition, results of operations, and cash flows.

Changes in weather conditions, severe weather, and the impacts of climate change can adversely affect IDACORP's and Idaho Power's operating results and cause them to fluctuate seasonally.

Changes in weather conditions, severe weather, and the impacts of climate change can affect IDACORP's and Idaho Power's operating results and cause them to fluctuate seasonally.

Idaho Power's electric power sales are seasonal, with demand in Idaho Power's service area peaking during the hot summer months, with a secondary peak during the cold winter months.

8 unchanged sentences

Sustained drought conditions or decreased snow pack due to reduced precipitation or higher temperatures are likely to decrease power generation from hydropower plants.

The costs of repairing and replacing infrastructure or any costs related to Idaho Power liability for personal injury, loss of life, and property damage from utility equipment that fails, including as a result of significant weather and weather-related events and the increasing threat of fires, may not be covered in full by insurance.

Costs incurred in connection with such events might also not be recovered through customer rates if the costs incurred are greater than those allowed for recovery by regulators.

Idaho Power's customers' energy needs vary with weather and to the extent weather conditions are affected by climate change, customers' energy use could increase or decrease.

4 unchanged sentences

Idaho Power has in place mechanisms to help mitigate the effects of energy market price volatility, but there is no assurance these mechanisms will continue to be in place or function as intended.

The costs of repairing and replacing infrastructure or liability for personal injury, loss of life, and property damage from utility equipment that fails, including as a result of significant weather and weather-related events and the increasing threat of fires, may not be covered in full by insurance.

Costs incurred in connection with such events might also not be recovered through customer rates if the costs incurred are greater than those allowed for recovery by regulators.

In addition, state and federal legislation and regulations have been proposed in recent years and may be implemented in the future, intended to limit the severity and impact of climate change.

Proposals have included imposing mandatory reductions in GHG emissions, which could increase Idaho Power’s power supply and compliance costs or require generation facilities to be retired early, resulting in potential stranded costs and write-downs or write-offs if Idaho Power is unable to fully recover investments in such facilities.

If financial markets increasingly view climate change or GHG emissions as a financial or investment risk for electric utilities, it could negatively affect IDACORP's and Idaho Power's ability to access debt and equity

capital markets on favorable terms.

For additional information relating to legislation, regulations, and legal proceedings related to environmental matters, see Part II - Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Environmental Matters” in this report.

Proposals have included imposing mandatory reductions in greenhouse gas (GHG) emissions, which could increase Idaho Power’s power supply and compliance costs or require generation facilities to be retired early, resulting in potential stranded costs and write-downs or write-offs if Idaho Power is unable to fully recover investments in such facilities.

For additional information relating to legislation, regulations, and legal proceedings related to environmental matters, see Part II - Item 7 - MD&A - "Environmental Matters” in this report.

New advances in power generation, energy efficiency, alternative energy sources, or other technologies that impact the power utility industry could decrease customer energy demand and revenues, which could have implications for generation and system planning .

Advances in technology and changes in customer demand and preferences in the electric utility industry have encouraged the development of new technologies for power generation, renewable energy, energy storage, customer-owned generation, and energy efficiency.

In particular, in recent years the net cost of solar and wind generation and storage technology has decreased significantly, and there are federal and state regulations, laws, and other incentives in place to help further reduce the net cost of solar and wind facilities.

There is potential that customer-owned solar power generation systems, could become sufficiently cost-effective and efficient that an increasing number of Idaho Power's customers choose to install such systems on their homes or businesses, which in turn could require changes in the way Idaho Power builds and manages its distribution systems and substantial grid infrastructure costs, and at the same time reduce the demand for and sale of energy.

8 unchanged sentences

Idaho Power's generation and transmission facilities and its grid operations are potential targets for terrorist acts and threats, acts of war, social unrest, cyber and physical security attacks, and other disruptive activities of individuals or groups, including by nation states or nation state-sponsored groups.

There have been cyber and physical attacks within the energy industry on energy infrastructure such as electric substations and pipelines in the past, and there are likely to be additional attacks in the future.

There have been cyber and physical attacks within the energy industry on energy infrastructure such as electric substations and fuel pipelines in the past with notable reports in the media of electric industry infrastructure specifically being targeted for and impacted by physical attacks more recently, and there are likely to be additional attacks in the future.

Idaho Power and its vendors have been subject to, and will likely continue to be subject to, attempts to gain unauthorized access to systems and confidential information, or to disrupt operations.

2 unchanged sentences

Some of Idaho Power's facilities are deemed "critical infrastructure" under federal standards, in that incapacity or destruction of the facilities could have a debilitating impact on security, reliability or operability of the bulk electric power system, national economic security, and public health and safety.

The fact that infrastructure facilities, such as power generation facilities and electric transmission or distribution facilities, are direct targets of, or potential indirect casualties of, an act of terror or cyber or physical attack (whether originating internal to Idaho Power or externally), may affect Idaho Power's operations by limiting the ability to generate, purchase, or transmit power.

The fact that infrastructure facilities, such as power generation facilities and electric transmission or distribution facilities, are direct targets of, or potential indirect casualties of, an act of terror or war or cyber or physical attack (whether originating internal to Idaho Power or externally), may affect Idaho Power's operations by limiting the ability to generate, purchase, or transmit power.

Idaho Power's electric transmission systems are part of an interconnected regional grid, and therefore, it faces the risk of causing or being subject to a long-term power outage due to grid disturbances or disruptions on a neighboring interconnected grid system.

3 unchanged sentences

Idaho Power's business operations require the continuous availability of information technology systems and network infrastructure, and in the normal course of business, Idaho Power or its vendors collect and store sensitive and confidential customer and employee information and proprietary information of Idaho Power.

Idaho Power’s technology systems are

dependent upon connectivity to the internet and third-party vendors to host, maintain, modify, and update its systems, which may experience significant system failures or cyber attacks that could compromise the security of Idaho Power’s assets and information.

During 2020 and into 2021, as just one example, a sophisticated security breach of the SolarWinds software platform used by Idaho Power and broadly across industry sectors, including the utility industry and many of the industry’s vendors, created a cyber security vulnerability for thousands of companies in the United States as well as a number of governmental entities.

All information technology systems are vulnerable to disability, unauthorized access, unintentional defects, user error, errors in system changes, and cybersecurity incidents.

Idaho Power’s technology systems are dependent upon connectivity to the internet and third-party vendors to host, maintain, modify, and update its systems, which may experience significant system failures or cyber attacks that could compromise the security of Idaho Power’s assets and information.

All information technology systems are vulnerable to disability, unauthorized access, unintentional defects, user

error, errors in system changes, and cybersecurity incidents.

Idaho Power is in the process of pursuing complex business system upgrades, and these significant changes increase the risk of system interruption.

6 unchanged sentences

Idaho Power actively monitors developments in the area of cybersecurity and is involved in various related government and industry groups, and the company’s board receives security updates at least quarterly.

Although Idaho Power continues to make investments in its cybersecurity program, including personnel, technologies, cyber insurance and training of personnel, there can be no assurance that these systems or their expected functionality will be implemented, maintained, or expanded effectively;

Although Idaho Power continues to make investments in its cybersecurity program, including personnel, technologies, and training of personnel, there can be no assurance that these systems or their expected functionality will be implemented, maintained, or expanded effectively;

nor can security measures completely eliminate the possibility of a cybersecurity breach.

Further, the implementation of security guidelines and measures has resulted in, and Idaho Power expects to continue to result in, increased costs.

Idaho Power maintains insurance related to many forms of cyber and physical security events;

however, such insurance is subject to exclusions and may be insufficient in amount to offset any losses, costs, or damage experienced, particularly given the potential significant magnitude of a security incident like those reported broadly in the media, and further, any such insurance may become unreasonably expensive or unavailable in the future.

Terrorist attacks, acts of war, social unrest, cyber and physical security attacks, and similar incidents can also have indirect impacts by creating political, economic, social, or financial market instability, and can cause damage to or interference with Idaho Power’s operating assets, customers, or suppliers.

5 unchanged sentences

Also, short-term and long-term anticipated increases in both the number of customers and the demand for energy require expansion and reinforcement of that infrastructure as described in Idaho Power's 2021 IRP.

Idaho Power is not only in the permitting process for two high-voltage transmission line projects, but has issued requests for proposals for new capacity reso urces, and utility-scale battery storage, which a re intended to help meet increasing customer energy demands.

Idaho Power is not only in the permitting process for two high-voltage transmission line projects, but has also entered into contracts to purchase, own, and operate 180 megawatts of battery storage assets as well as issued a request for proposals for new resources, which are intended to help meet increasing customer energy demands.

Idaho Power expects significant investment in capital improvements and expenditures for infrastructure projects that are subject to usual permitting and construction risks that can adversely affect project costs and the completion time.

2 unchanged sentences

• defaults and delays by suppliers and contractors, including delays for specialty equipment that require significant lead times;

• increases in price and limitations on availability of commodities, materials, and equipment;

• imposition of tariffs on commodities, materials, and equipment sourced by foreign providers;

• equipment, engineering, and design failures;

• credit quality of counterparties and suppliers and their ability to meet financial and operational commitments;

• unexpected environmental and geological problems;

• the effects of adverse weather conditions;

• catastrophic events, natural disasters, pandemics and other public health events;

• catastrophic events, natural disasters, epidemics, pandemics and other public health or disruptive events that could result in supply chain disruptions, as well as permitting and construction delays;

• availability of financing;

8 unchanged sentences

Thus, termination of a project could negatively affect IDACORP's and Idaho Power's financial condition and results of operations.

Demand for power during peak periods could exceed forecasted supply, resulting in deliverability risks and increased costs for purchasing capacity in the market or acquiring or constructing additional generation resources and battery storage facilities .

Demand for power could exceed forecasted supply, resulting in deliverability risks and increased costs for purchasing capacity in the market or acquiring or constructing additional generation resources and battery storage facilities .

Idaho Power's 2021 IRP identified a low-cost preferred resource portfolio and action plan for the next 20-year period that includes adding substantial renewable resources and ending participation in the remaining coal-fired units by the end of 2028.

6 unchanged sentences

Idaho Power derives a significant portion of its power supply from its hydropower facilities.

During 2020 and 2021, 54 percent and 48 percent, respectively, of Idaho Power's electric power from Idaho Power-owned generation was from hydropower facilities.

During both 2022 and 2021, 48 percent o f Idaho Power's electric power from Idaho Power-owned generation was from hydropower facilities.

Due to Idaho Power’s heavy reliance on hydropower generation, the impacts of climate change and factors such as precipitation and snowpack, the timing of run-off, and the availability of water in the Snake River Basin can significantly affect its operations.

7 unchanged sentences

Idaho Power’s use of coal and natural gas to fuel power generation facilities exposes it to commodity availability and price risk, which can adversely affect IDACORP's and Idaho Power's results of operations and financial condition .

As part of its

normal business operations, Idaho Power purchases coal and natural gas in the open market or under short-term or long-term contracts, often with variable pricing terms.

A s part of its normal business operations, Idaho Power purchases coal and natural gas in the open market or under short-term or long-term contracts, often with variable pricing terms.

Market prices for coal and natural gas are volatile and influenced by factors impacting supply and demand such as weather conditions, the adequacy and type of generating capacity, fuel transportation availability, economic conditions, regulations related to GHG emissions, changes in technology, moratoriums on federally leased coal, and increases in coal lease costs.

Natural gas transportation to Idaho Power's three natural gas plants is limited to one primary p ipeline, presenting a heightened possibility of supply constraint and disruptions separate from the risk of counterparty default.

Most of Idaho Power's coal supply arrangements are under long-term contracts for coal originating in Wyoming, and thus Idaho Power is exposed to risk of disruption of coal production in, or transportation from, that region.

Idaho Power may from time to time enter into new, or renegotiate, these long-term contracts but can provide no assurance that such contracts will be negotiated or renegotiated on satisfactory terms, or at all.

counterparty default.

Idaho Power's current coal supply arrangements are under long-term contracts for coal originating in Wyoming, Utah, and Colorado, and thus Idaho Power is exposed to risk of disruption of coal production in, or transportation from, those regions.

Idaho Power may from time to time enter into new, or renegotiate, these contracts but can provide no assurance that such contracts will be negotiated or renegotiated on satisfactory terms, or at all.

There also can be no assurance that counterparties to the natural gas or coal supply agreements will fulfill their obligations to supply natural gas or coal, and they may experience regulatory, financial, or technical problems or unforeseeable events that inhibit their ability to deliver natural gas or coal.

3 unchanged sentences

Idaho Power’s power supply, transmission, and distribution facilities are subject to numerous operational risks unique to it and its industry, including circumstances causing power outages, injuries and property damage, loss of life, and fires .

Operating risks associated with Idaho Power's power supply, transmission, and distribution facilities include equipment failures, volatility in fuel and transportation pricing, interruptions in fuel supplies, increased regulatory compliance costs, changes necessitated by environmental legislation or litigation, labor disputes or attrition, accidents and workforce safety matters, environmental damage, property damage, wildfires, acts of terrorism or sabotage (both cyber and asset-based), the loss of cost-effective disposal options for solid waste such as coal ash, operator error, and the occurrence of catastrophic events at the facilities.

Operating risks associated with Idaho Power's power supply, transmission, and distribution facilities include equipment failures, volatility in fuel and transportation pricing, interruptions in fuel supplies, increased regulatory compliance costs, changes necessitated by environmental legislation or litigation, labor disputes or attrition, accidents and workforce safety matters, environmental damage, property damage, wildfires, acts of terrorism or war or sabotage (both cyber and asset-based), the loss of cost-effective disposal options for solid waste such as coal ash, operator error, and the occurrence of catastrophic events at the facilities.

Diminished availability or performance of those facilities could result in reduced customer satisfaction, reputational harm, liability to third parties (including tort liability), and regulatory inquiries and fines.

4 unchanged sentences

Idaho Power also enters into agreements with third-party contractors to perform work on its power supply, transmission, and distribution facilities, and may in some circumstances retain liability for the quality and completion of those contractors’ work, potentially subjecting Idaho Power to penalties, liability for personal injury, loss of life, or property damage, reputational harm, or enforcement actions or liability if a contractor violates applicable laws, rules, regulations, or orders.

Accidents, terrorist acts, electrical contacts, fires, explosions, catastrophic failures, general system damage or dysfunction, intentional acts of destruction, uncontrolled release of water from hydropower dams, and other unplanned events related to Idaho Power's infrastructure would increase repair costs and may expose Idaho Power to liability for personal injury, loss of life, and property damage.

Accidents, acts of terrorism or war, electrical contacts, fires, explosions, catastrophic failures, general system damage or dysfunction, intentional acts of destruction, uncontrolled release of water from hydropower dams, and other unplanned events related to Idaho Power's infrastructure would increase repair costs and may expose Idaho Power to liability for personal injury, loss of life, and property damage.

Fires alleged to have been caused by Idaho Power's transmission, distribution, or generation infrastructure, or that allegedly result from Idaho Power’s or its contractors’ operating or maintenance practices, could also expose Idaho Power to claims for fire suppression and clean-up costs, evacuation costs, fines and penalties, and liability for economic damages, personal injury, loss of life, property damage, and environmental pollution, whether based on claims of negligence, trespass, or otherwise.

3 unchanged sentences

Idaho Power maintains insurance coverage for such operating and event risks, but insurance coverage is subject to the terms and limitations of the available policies and may not be sufficient in amount to cover Idaho Power’s ultimate liability.

Coverage limits within wildfire insurance policies could result in material self-insured costs in the event there are fires that are deemed to be separate occurrences covered by self-insured retention

amounts under the terms of Idaho Power’s insurance policies.

Idaho Power or its contractors and customers could also experience coverage reductions and increased wildfire insurance costs in future years.

4 unchanged sentences

Idaho Power is generally obligated under federal law to purchase power from certain renewable energy projects, regardless of the then-current load demand, availability of lower cost generation resources, or wholesale energy market prices.

As of December 31, 2021, Idaho Power had federally-mandated contracts to purchase energy fro m 129 on-line projects with third parties.

As of December 31, 2022, Idaho Power had federally-mandated contracts to purchase energy from 129 on-line projects with third parties.

This increases the likelihood and frequency that Idaho Power will be required to reduce output from its lower-cost hydropower and fossil fuel-fired generation resources, which in turn increases power purchase costs and customer rates and impacts Idaho Power's ability to invest in additional generation and earn a reasonable return on rate base in the future.

3 unchanged sentences

IDACORP and Idaho Power do not have diversified operations or sources of revenue.

Idaho Power comprises the bulk of IDACORP's operations, and Idaho Power's business is concentrated solely in the electricity industry.

Idaho Power comprises the bulk of IDACORP's operations, and Idaho Power's business is concentrated solely in the electric power industry.

Furthermore, Idaho Power's provision of electric service to retail customers is conducted exclusively in its southern Idaho and eastern Oregon service area.

3 unchanged sentences

Many of these positions, such as linemen, grid operators, engineering and design personnel, and generation plant operators, require extensive, specialized training.

At December 31, 2021, approximately 16 percent of Idaho Power's employees were eligible for regular or early retirement under Idaho Power's defined benefit pension plan.

This will require Idaho Power to attract, train, and retain new employees to help prevent a loss of institutional knowledge and avoid a skills gap.

Idaho Power does not have employment contracts with its officers or key employees and cannot guarantee that any member of its management or any key employee at the IDACORP parent or any subsidiary level will continue to serve in any capacity for any particular period of time.

Employee retention and recruitment may also be negatively impacted by more flexible remote work opportunities, higher pay offered by other employers, or lower cost of living in other areas.

The loss of skills and institutional knowledge of experienced employees, the failure to foster an innovative, inclusive, equitable, and diverse environment in order to hire appropriately qualified employees, the costs associated with attracting, training, and retaining such employees to replace an aging and skilled workforce or the inability to do so, a nd the operational and financial costs of unionization or the attempt to unionize all or part of the companies’ workforce, could hav e a negative effect on IDACORP's and Idaho Power's financial condition and results of operations.

6 unchanged sentences

Changes in legislation, regulation, and government policy may have a material adverse effect on IDACORP’s and Idaho Power’s business in the future.

Specific legislative and regulatory proposals and recently enacted legislation that could have a material impact on IDACORP and Idaho Power include, but are not limited to, tax reform, utility regulation, carbon-reduction initiatives, infrastructure renewal programs, climate change and environmental regulation, and modifications to accounting and public company reporting requirements.

Specific legislative and regulatory proposals and recently enacted legislation that could have a

material impact on IDACORP and Idaho Power include, but are not limited to, tax reform, utility regulation, carbon-reduction initiatives, infrastructure renewal programs, climate change and environmental regulation, and modifications to accounting and public company reporting requirements.

Further, the proposals and new legislation could have an impact on the rate of growth of Idaho Power’s customers and their willingness to expand operations and increase electric service requirements.

15 unchanged sentences

In recent years, state regulatory mechanisms with income tax-related provisions (such as Idaho Power's May 2018 Idaho tax reform settlement stipulation approved by the IPUC), have significantly impacted IDACORP's and Idaho Power's results of operations.

Due to the current Presidential Administration, IDACORP and Idaho Power expect tax reform legislation could be enacted that may increase the companies' federal and state tax rates and reporting obligations.

The outcome of potential future income tax proceedings or laws, or the state public utility commissions' treatment of those outcomes, could differ materially from the amounts IDACORP and Idaho Power record prior to conclusion of those proceedings, and the difference could negatively affect IDACORP’s and Idaho Power’s earnings and cash flows.

3 unchanged sentences

IDACORP's and Idaho Power's operations are subject to a number of federal, state, and local environmental statutes, rules, and regulations relating to climate change, air and water quality, natural resources, endangered species and wildlife, renewable energy, and health and safety.

Many of these laws and regulations are described in Part II - Item 7 - “Management’s Discussion and Analysis of Financial

Condition and Results of Operations - Environmental Matters” in this report.

Many of these laws and regulations are described in Part II - Item 7 - MD&A - "Environmental Matters” in this report.

These laws and regulations generally require IDACORP and Idaho Power to obtain and comply with a wide variety of environmental licenses, permits, and other approvals, including through substantial investment in pollution controls, and may be enforced by both public officials and private individuals.

4 unchanged sentences

Compliance with environmental regulations can significantly increase capital spending, operating costs, and plant outages, and can negatively affect the affordability of Idaho Power's services for customers.

Idaho Power cannot predict with certainty the amount and timing of all future expenditures necessary to comply with these environmental laws and regulations, although Idaho Power expects the expenditures will be substantial.

In some cases, the costs to obtain permits and ensure facilities are in compliance may be prohibitively expensive.

1 unchanged sentence

Furthermore, Idaho Power may not be able to obtain or maintain all environmental regulatory approvals necessary for operation of its existing infrastructure or construction of new infrastructure.

The utility industry is also facing increasing stakeholder scrutiny related to its environmental, social, and governance (ESG) programs.

Recently, Idaho Power has seen a rise in certain stakeholders, suc h as investors, customers, employees, and lenders placing increasing importance on the impact and social cost of their investments.

Emissions of GHGs, including, most significantly CO 2 , could be further restricted in the future in response to additional state and federal regulatory requirements, increased scrutiny and changing stakeholder expectations with respect to environmental and climate change programs, judicial decisions and international accords.

If new emissions reduction rules were to be come effective, they could result in significant additional compliance costs that would affect Idaho Power's future financial position, results of operations, and cash flows if such costs are not timely recovered through regulated rates.

Moreover, the possibility exists that stricter laws, regulations, or enforcement policies could significantly increase compliance costs and the cost of any remediation that may become necessary.

In addition, some environmental regulations are currently subject to litigation and not yet final.

As a result of this uncertainty, approaches to comply with the regulations, including available control technologies or other allowed compliance measures, are unpredictable and Idaho Power cannot foresee the potential impacts these regulations would have on Idaho Power's operations or financial condition.

In 2019, Idaho Power announced its commitment to serve customers with 100 percent clean energy by 2045, and Idaho Power has short-term and medium-term targets for CO 2 emission reductions, which could impact infrastructure resource decisions and costs.

In 2019, Idaho Power announced its long-term goal to serve customers with 100 percent clean energy by 2045, and Idaho Power has short-term and medium-term goals for CO 2 emission reductions, which could impact infrastructure resource decisions and costs.

Idaho Power's ability to achieve these targets are subject to a number of risks and uncertainties, including the company's regulatory obligation to serve its customers, the availability and cost of new generation resources, legal and permitting requirements, system operation and energy integration, grid balancing, among others.

1 unchanged sentence

If there is a delay in obtaining any required environmental regulatory approval or if Idaho Power fails to obtain, maintain, or comply with any such approval, construction and/or operation of Idaho Power's generation or transmission facilities could be delayed, halted, terminated, or subjected to additional costs.

For further discussion of environmental matters that may affect Idaho Power, see "Environmental Matters" in Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report.

For further discussion of environmental matters that may affect Idaho Power, see "Environmental Matters" in Item 7 - MD&A in this report.

Obligations imposed in connection with hydropower license renewals and permitting may require large capital expenditures, increase operating costs, reduce hydropower generation, and negatively affect IDACORP's or Idaho Power's results of operations and financial condition .

For the last several years, Idaho Power has been engaged in an effort to renew its federal license for its largest hydropower generation source, the HCC.

For the last several years, Idaho Power has been engaged in an effort to renew its federal license for its largest hydropower generation source, the Hells Canyon Complex (HCC).

Relicensing and ongoing permitting requirements include an extensive public review process that involves numerous natural resource issues and environmental conditions.

1 unchanged sentence

In addition, new interpretations of existing laws and regulations could be adopted or become applicable to hydropower facilities, which could further increase required expenditures for marine life recovery and endangered species protection and reduce the amount of hydropower generation available to meet Idaho Power’s generation requirements.

Idaho Power cannot predict the requirements that might be imposed during the relicensing and permitting process, the financial impact of those requirements,

whether a new multi-year license will ultimately be issued, and whether the IPUC or OPUC will allow recovery through rates of the substantial costs incurred in connection with the licensing process and subsequent compliance.

Idaho Power cannot predict the requirements that might be imposed during the relicensing and permitting process, the financial impact of those requirements, whether a new multi-year license will ultimately be issued, and whether the IPUC or OPUC will allow recovery through rates of the substantial costs incurred in connection with the licensing process and subsequent compliance.

Imposition of onerous conditions in the relicensing and permitting processes could result in Idaho Power incurring significant capital expenditures, increase operating costs (including power purchase costs), and reduce hydropower generation, which could negatively affect results of operations and financial condition.

7 unchanged sentences

Adverse publicity could harm the reputations of IDACORP and Idaho Power;

may make state legislatures, utility commissions, and other regulatory authorities less likely to view the companies in a favorable light;

may make state legislatures, utility commissions, and other regulatory authorities less likely to view the

companies in a favorable light;

and may cause Idaho Power to be subject to less favorable legislative and regulatory outcomes or increased regulatory oversight.

8 unchanged sentences

Changes in accounting standards or rules may impact IDACORP's and Idaho Power's financial results and disclosures.

The Financial Accounting Standards Board (FASB) and the SEC have made and may continue to make changes to accounting standards that impact presentation and disclosures of financial condition and results of operations.

The Financial Accounting Standards Board and the U.S.

Securities and Exchange Commission have made and may continue to make changes to accounting standards that impact presentation and disclosures of financial condition and results of operations.

Further, new accounting orders issued by the FERC could significantly impact IDACORP's and Idaho Power's reported financial condition.

IDACORP and Idaho Power do not have any control over the impact these changes may have on their financial conditions or results of operations nor the timing of such changes.

Idaho Power meets the requirements under GAAP to reflect the impact of regulatory decisions in its financial statements and to defer certain costs as regulatory assets until those costs are collected in rates, and to defer some items as regulatory liabilities.

Idaho Power meets the requirements under accounting principles generally accepted in the United States of America to reflect the impact of regulatory decisions in its financial statements and to defer certain costs as regulatory assets until those costs are collected in rates, and to defer some items as regulatory liabilities.

If recovery of these amounts ceases to be probable, if Idaho Power determines that it no longer meets the criteria for applying regulatory accounting or if accounting rules change to no longer provide for regulatory assets and liabilities, Idaho Power could be required to eliminate some or all of those regulatory assets or liabilities.

2 unchanged sentences

Financial and investment risks relate to IDACORP's and Idaho Power's ability to meet financial obligations and mitigate exposure to market risks, including liquidity risks and the ability to raise capital and cost of funding, risks related to credit ratings, credit risk, liquidity, interest rates, and commodity prices.

Volatility or disruptions in the financial markets, failure of IDACORP or Idaho Power to satisfy conditions necessary for obtaining loans or issuing debt securities, and denial of regulatory authority to issue debt or equity securities, may negatively affect IDACORP’s and Idaho Power’s ability to access capital and/or increase their cost of borrowing and ability to execute

on their strategic plans .

IDACORP and Idaho Power use credit facilities, commercial paper markets, and long-term debt as significant sources of liquidity and funding for operating and capital requirements and debt maturities not satisfied by operating cash flow.

The credit facilities represent commitments by the participating banks to make loans and issue letters of credit.

Credit facilities represent commitments by the participating banks to make loans and issue letters of credit.

However, the ability and obligation of the participating banks to make those loans and issue letters of credit is subject to specified conditions and volatility or disruptions in the financial markets could affect the companies' ability to obtain debt financing or draw upon or renew existing credit facilities on favorable terms and comply with debt covenants.

4 unchanged sentences

Also, while the credit facilities represent a contractual obligation to make loans, one or more of the participating banks may default on their obligations to make loans under, or may withdraw from, the credit facilities.

Idaho Power is required to obtain regulatory approval in Idaho, Oregon, and Wyoming in order to borrow money or to issue securities and is therefore dependent on the public utility commissions of those states to issue favorable orders in a timely manner to permit them to finance their operations, capital expenditures, and debt maturities.

IDACORP's and Idaho Power's credit facilities include financial covenants that limit the amount of debt that can be outstanding as a percentage of total capital, and Idaho Power's long-term debt has also been issued under an indenture that contains a number of financial covenants.

The companies must also make specified representations in connection with request for loans and it is possible that they may be unable to do so at the time of such request, which would limit or eliminate the obligation of the banks to provide loans.

manner to permit them to finance their operations, capital expenditures, and debt maturities.

IDACORP's and Idaho Power's credit facilities consist of revolving lines of credit not to exceed an aggregate principal amount outstanding at any one time of $100 million and $300 million, respectively (Credit Facilities).

The Credit Facilities include financial covenants that limit the amount of debt that can be outstanding as a percentage of total capital, and Idaho Power's long-term debt has also been issued under an indenture that contains a number of financial covenants.

The companies must also make specified representations in connection with requests for loans and it is possible that they may be unable to do so at the time of such request, which would limit or eliminate the obligation of the banks to provide loans.

Failure to maintain these representations and covenants could preclude IDACORP and Idaho Power from issuing commercial paper, borrowing under their Credit Facilities, or issuing long-term debt, and could trigger a default and repayment obligation under debt instruments, which could limit their ability to pursue certain projects, acquisitions, or improvements, to support future growth, and adversely impact IDACORP's and Idaho Power's financial condition, results of operations, and liquidity.

6 unchanged sentences

If access to capital were to become significantly constrained or costs of capital increased significantly due to lowered credit ratings, prevailing industry conditions, regulatory constraints, the volatility of the capital markets or other factors, IDACORP's and Idaho Power's ability to pursue improvements or acquisitions (including generating capacity and transmission assets, which may be necessary for future growth), liquidity, financial condition, and results of operations could be adversely affected.

Idaho Power’s energy risk management policy and programs relating to economically hedging commodity exposures and credit risk may not always perform as intended, and as a result, IDACORP and Idaho Power may suffer economic losses .

Idaho Power enters into transactions to buy and sell power, natural gas, and transmission service, enters into transactions to hedge its positions in coal, natural gas, power, and other commodities, and enters into financial hedge transactions to mitigate in part exposure to variable commodity prices.

IDACORP and Idaho Power could recognize financial losses as a result of volatility in the market value of these contracts or if a counterparty fails to perform.

The derivative instruments used for hedging might not offset the underlying exposure being mitigated as intended, due to pricing inefficiencies or other terms of the derivative instruments, and any such failure to mitigate exposure could result in financial losses.

Stakeholder actions and increased regulatory activity related to ESG matters, particularly global climate change and reducing GHG emissions, could negatively impact IDACORP and Idaho Power.

The power and gas utility industry is facing increasing stakeholder scrutiny related to ESG matters.

Recently, Idaho Power has seen a rise in certain stakeholders, such as investors, customers, employees, and lenders, placing increasing importance on the impact and social cost associated with climate change.

GHG emissions, including, most significantly CO 2 , could be further restricted in the future in response to additional state and federal regulatory requirements, increased scrutiny, and changing stakeholder expectations with respect to environmental and climate change programs, judicial decisions, and international accords.

If new emissions reduction rules were to become effective, they could result in significant additional compliance costs that could negatively impact Idaho Power's future financial position, results of operations, and cash flows if such costs are not timely recovered through regulated rates.

Moreover, the possibility exists that stricter laws, regulations, or enforcement policies could significantly increase compliance costs and the cost of any remediation that may become necessary.

In addition, the increasing focus on climate change and stricter regulatory and legal requirements may result in Idaho Power facing adverse reputational risks associated with certain of its operations producing GHG emissions.

If Idaho Power is unable to satisfy the increasing climate-related expectations of certain stakeholders, IDACORP and Idaho Power may suffer reputational harm, which could cause IDACORP’s stock price to decrease or cause certain investors and financial institutions not to purchase the companies’ debt securities or otherwise provide the companies with capital or credit on favorable terms, which may cause IDACORP’s and Idaho Power’s cost of capital to increase.

Idaho Power enters into transactions to buy and sell power, natural gas, and transmission service, enters into transactions to hedge its positions in coal, natural gas, power, and other commodities, and enters into economic hedge transactions to mitigate in part exposure to variable commodity prices.

IDACORP and Idaho Power could recognize losses as a result of volatility in the market value of these contracts or if a counterparty fails to perform.

Certain of Idaho Power's purchase or sale, hedging, and derivative agreements may result in the receipt of, or posting of, collateral with counterparties.

Fluctuations in commodity prices that lead to the posting of collateral with counterparties negatively impact liquidity, and downgrades in Idaho Power's credit ratings may lead to additional collateral posting requirements.

Idaho Power has additional indirect credit exposures to financial institutions in the form of letters of credit provided as security by power suppliers under

various purchased power contracts and by vendors for infrastructure development projects.

If any of the credit ratings of the letter of credit issuers were to drop below investment grade, the vendor or supplier would need to replace the security with an acceptable substitute, which may be impracticable and may expose Idaho Power to losses resulting from a vendor or supplier default.

If the security were not replaced, the party could be in default under the contract and Idaho Power's remedies for default may be inadequate to fully compensate Idaho Power for its losses.

Fluctuations in commodity prices that lead to the posting of collateral with counterparties negatively impact liquidity, and downgrades in Idaho

Power's credit ratings may lead to additional collateral posting requirements.

In 2022, Idaho Power recorded gains on economic hedges of $68.5 million, compared with $12.1 million of gains in 2021.

The change in the magnitude of the gain is reflective of an increased volume of transactions, as well as high volatility in prices.

At times, Idaho Power’s energy risk management policy results in Idaho Power entering into economic hedges in an environment where prices are high, and if prices are lower at the time the economic hedge settles, Idaho Power will record losses on the economic hedges.

Depending on the volume of economic hedges and the degree of price volatility, those losses can be substantial, and the power cost adjustment mechanisms generally provide that Idaho Power will incur a portion of those losses.

Forecasts of future fuel needs and loads and available resources to meet those loads are inherently uncertain and may cause Idaho Power to over- or under-hedge actual resource needs, exposing the company to market risk on the over- or under-hedged position.

2 unchanged sentences

As a result, risk management actions, or the failure or inability to manage commodity availability and price and counterparty risk, may adversely affect IDACORP’s and Idaho Power’s financial condition and results of operations.

Idaho Power has additional indirect credit exposures to financial institutions in the form of letters of credit provided as security by power suppliers under various purchased power contracts and by vendors for infrastructure development projects.

If the security were not replaced, the party could be in default under the contract and Idaho Power's remedies for default may be inadequate to fully compensate Idaho Power for its losses.

Further, the bankruptcy or insolvency of a counterparty to commodity or other transactions could impair Idaho Power’s ability to collect amounts receivable from those counterparties, potentially including the ability to collect or retain collateral posted by a counterparty.

Idaho Power is a participant in the energy markets, including the Western EIM, and engages in direct and indirect power purchase and sale transactions in connection with that participation.

Idaho Power is a participant in the energy markets, including the energy imbalance market in the western United States (Western EIM), and engages in direct and indirect power purchase and sale transactions in connection with that participation.

The Western EIM has collateral posting requirements based on established credit criteria, but there is no assurance the collateral will be sufficient to cover obligations that counterparties may owe each other in the Western EIM and any such credit losses could be socialized to all Western EIM participants, including Idaho Power.

13 unchanged sentences

If the assumptions underlying coal mine reclamation at Bridger Coal Company and related forecast trust fund growth are materially inaccurate, Idaho Power’s costs could be greater than anticipated or be incurred sooner than anticipated .

Bridger Coal Company (BCC), a subsidiary of Idaho Power located in the state of Wyoming, uses both surface and underground methods to mine coal to be used for power generation at the Jim Bridger power plant.

Bridger Coal Company (BCC), a subsidiary of Idaho Power located in the state of Wyoming, uses surface mining to extract coal to be used for power generation at the Jim Bridger power plant.

The federal Surface Mining Control and Reclamation Act and state laws and regulations establish operational, reclamation, bonding, and closure obligations and standards for mining of coal.

2 unchanged sentences

The trust funds are invested in debt and equity securities and poor performance of these investments would reduce the amount of funds available for their intended purpose, which could require Idaho Power to make additional cash contributions.

If actual costs related to those

obligations exceed estimates, government regulations relating to those obligations change significantly or unexpected cash funding obligations are required, IDACORP’s and Idaho Power’s results of operations and financial condition could be adversely affected.

If actual costs related to those obligations exceed estimates, government regulations relating to those obligations change significantly or unexpected cash funding obligations are required, IDACORP’s and Idaho Power’s results of operations and financial condition could be adversely affected.

As a holding company, IDACORP does not have its own operating income and must rely on the cash flows from its subsidiaries to pay dividends and make debt payments .

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors