BOISE, June 24, 2002 — IDACORP Inc. on Friday announced plans to wind down its power marketing business and reaffirmed its commitment to maintain a strong investment credit rating.
The company’s energy marketing subsidiary, IDACORP Energy, will not seek new customers and will limit its maximum value at risk limits to less than $3 million. In addition to minimizing its risk tolerance, IDACORP Energy anticipates staff reductions of approximately 50 percent over the next 18 months.
During this same time period, the company has targeted a reduction of working capital requirements for this business to less than $100 million.
“IDACORP Energy is committed to fulfilling its obligations under existing agreements,” said President and Chief Executive Officer Jan B. Packwood. “In keeping with our decision to wind down this portion of our business, IDACORP Energy will limit transactions to those necessary to meet obligations with existing customers and ensure the orderly settlement of the existing book of business.”
The changes in the business strategy are being driven by a number of factors that include changing liquidity requirements brought on by rating agencies, continued uncertainty in the regulatory and political environment, and the reduction of credit worthy counterparties.
The company expects the decision to wind down the energy marketing business will not impact the company’s 2002 annual earnings estimates of between $1.35 and $1.70 per share. “IDACORP is committed to maintaining its credit quality and consequently we need to take steps to reduce the Company’s overall risk profile,” stated Packwood.
The company will provide additional details on the company’s strategic direction during its second quarter analyst conference call scheduled for late July 2002.
Boise, Idaho-based IDACORP, formed in 1998, is a holding company comprised of: Idaho Power, a regulated electric utility; Ida-West Energy, an independent power project management and development arm; IDACORP Energy, a marketer of energy and energy related products and services; IDACORP Financial, an investment vehicle which makes investments primarily in affordable housing projects; IdaTech, a developer and producer of fully integrated fuel cell systems; and IDACOMM, a telecommunications subsidiary providing high-speed Internet access technologies.