Idaho Power Co.

Mar. 13, 1996

INQUIRY LETTER 1

REID & PRIEST LLP

40 WEST 57TH STREET

NEW YORK, N.Y. 10019-4097

(212) 603-2000

February 25, 1996

Securities Exchange Act of 1934

Section 14(a) and

Rules 14a-8(a)(3)(i),

14a-4(c)(1) and 14a-4(c)(4)

Securities and Exchange Commission

450 Fifth Street, N.W.

Judiciary Plaza

Washington, D.C. 20549

Attention: Chief Counsel

Division of Corporation Finance

Re: Idaho Power Company -

Omission of Shareholder Proposal under

Rule 14a-8 and Request for Interpretation

under Rules 14a-4(c)(1) and 14a-4(c)(4)

Ladies and Gentlemen:

On behalf of Idaho Power Company (the "Company") we are writing to request the concurrence of the Staff (the "Staff") of the Securities and Exchange Commission (the "SEC") with our view that the shareholder proposal referred to below may be omitted pursuant to Rule 14a-8(a)(3)(i), as well as to request the Staffs concurrence with out interpretation of Rules 14a-4(c)(1) and 14a-4(c)(4) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as set forth below.

FACTS

January 12th Letter

On January 19, 1996, the Company received a letter, dated January 12, 1996, from William T. McDonough, President of the United Food and Commercial Workers Union Local 99R ("UFCW99") (the "January 12th Letter"). Mr. McDonough indicated that the UFCW99 intends to submit the following resolution at the Companys 1996 Annual Meeting:

"RESOLVED: That shareholders recommend the Company extend its policy of confidential shareholder voting to the situation where there is a proxy solicitation in opposition to the Board of Directors (exempted from the Companys current confidential voting policy)."

Mr. McDonough also stated:

"This proposal is not being submitted pursuant to Rule 14a-8; however, we request that you voluntarily print a statement in support of the proposal in the interests of informed shareholder voting and full disclosure. If you are agreeable to the concept let us know and we will supply you a draft statement."

Mr. McDonough then asked the Company to "confirm that you will provide shareholders an opportunity on the proxy card to direct your votes on this proposal, as required by SEC Rule 14a-4."

Companys Reply

Robert W. Stahman, General Counsel for the Company, replied on January 30, 1996 that the Company would not voluntarily put this proposal in its proxy materials and noted that, as Mr. McDonough was apparently aware, the request was not timely.

February 21st Letter

By letter dated February 21, 1996, the law firm of Davis, Cowell & Bowe, representing UFCW99, replied, stating that (i) UFCW99 was not making a Rule 14a-8 request and was, therefore, not governed by its time requirements; (ii) corporate by-laws often provide shorter periods for shareholder proposals to be submitted; and (iii) UFCW99 had given "reasonable notice of the proposal ... and thus shareholders have the right to vote on this proposal at the annual meeting."

David, Cowell & Bowe then stated that the Company was required to include the proposal on its proxy card under Rule 14a-4, citing United Mine Workers of America v. The Pittston Company, 1990 Fed.Sec.L.Rep. (CCH) 94,946 (D.D.C. Nov. 24, 1989) ("Pittston").

CONCLUSION

The UFCW99 shareholder proposal was not timely received under Rule 14a-8(a)(3)(i) under the Exchange Act so as to require that it be included in the Companys proxy materials for the 1996 Annual Meeting. Accordingly, in reliance upon the rule, the Company intends to omit the proposal from its proxy materials, which are to be mailed to shareholders on or about March 20, 1996.

In addition, in reliance on Rules 14a-4(c)(1) and 14a-4(c)(4) under the Exchange Act, the Companys proxy materials will confer discretionary authority to vote with respect to the proposal should it be presented at the Annual Meeting.

ANALYSIS

Rule 14a-8(a)(3)(i)

The UFCW99 shareholder proposal was received by the Company on January 19, 1996. Under Rule 14a-8(a)(3)(i), in order for a shareholder proponent to require that a proposal be included in the Companys proxy materials for the 1996 Annual Meeting, the proposal must have been received not less than 120 calendar days in advance of the date the Companys proxy statement was released to shareholders in connection with the 1995 Annual Meeting. The Companys proxy statement for its 1995 Annual Meeting was released to shareholders on March 20, 1995. Accordingly, a shareholder proposal must have been received by the Company on or before November 21, 1995 for the 1996 Annual Meeting. This date for receipt of shareholder proposals for inclusion in proxy materials for the 1996 Annual Meeting was stated in the Companys proxy statement for the 1995 Annual Meeting.

Accordingly, the UFCW99 proposal was not timely received so as to require its inclusion in the Companys proxy materials for its 1996 Annual Meeting, and the Company may properly omit the proposal from its proxy materials.

Rule 14a-4(c)

Rule 14a-4(c) states that a proxy may confer discretionary authority upon the proxy holders to vote with respect to any of five matters, including

"(1) Matters which the persons making the solicitation do not know, a reasonable time before the solicitation, are to be presented at the meeting, if a specific statement to that effect is made in the proxy statement or form of proxy; . . .

and

(4) Any proposal omitted from the proxy statement and form of proxy pursuant to §240.14a-8 or §240.14a-9 of this chapter."

The issues raised here are (i) whether the UFCW99, by simply stating that its proposal is not being submitted pursuant to Rule 14a-8, can preclude the Company from relying upon Rule 14a-4(c)(4) and (ii) whether the UFCW99 can require the Company to include the proposal on the Companys proxy card or in its proxy statement (or deny the Company the power provided by the discretionary voting provisions under Rule 14a-4(c)(1)) by virtue of the fact the Company had notice of the matter "a reasonable time before the solicitation."

It is our opinion that the Company is able to obtain discretionary voting authority pursuant to Rule 14a-4(c)(4) despite the UFCW99s statement that it did not submit its proposal under Rule 14a-8. It is also our opinion that the notice of the UFCW99s intent to submit its resolution at the Annual Meeting is not, in and of itself, sufficient to require the Company to include the proposal either on its proxy card or in its proxy statement under Rule 14a-4(c)(1).

Rule 14a-8(a) states that:

"(a) If any security holder of a registrant notifies the registrant of his intention to present a proposal for action at a forthcoming meeting of the registrants security holders, the registrant shall set forth the proposal in its proxy statement and identify it in its form of proxy and provide means by which security holders can make the specification required by Rule 14a-4(b). Notwithstanding the foregoing, the registrant shall not be required to include the proposal in its proxy statement or form of proxy unless the security holder (hereinafter, the "proponent") has complied with the requirements of this paragraph and paragraphs (b) and (c) of this Section."

Rule 14a-8 makes clear that a registrant is not required to include a shareholder proposal either in its proxy statement or on its proxy card unless the proponent has complied with the provisions of Rule 14a-8. Nevertheless, counsel for the UFCW99 has cited the Pittston case as precedent for requiring the inclusion of the proposal on the Companys proxy card under Rule 14a-4.

The Pittston and Larkin Cases

In Pittston, plaintiff shareholder (the "Union") notified defendant registrant ("Pittston") on March 7, 1989 of certain resolutions that the Union wished to bring before the annual meeting scheduled for May 10, 1989. On March 13, Pittston informed the SEC of the Unions notice, stating that Rules 14a-4(c)(4) and 14a-8 did not require inclusion of the Unions proposals on Pittstons proxy card. Pittston also asked the Staff of the SEC to agree that Pittstons proxy card properly conferred discretionary authority to vote on the Union proposals, should they be presented at the meeting. In a response dated March 16, the Staff made no comment on Pittstons decision to omit the proposals from its proxy card and agreed with respect to discretionary authority.

The Union in the meantime prepared separate solicitation materials, which received clearance from the Staff and, pursuant to court order, were mailed by Pittston to shareholders. The Union provided a blue proxy card for Pittston to distribute to shareholders. Pittston mailed the blue proxy card, together with its own white proxy card, to shareholders. In its white card, Pittston sought authorization to vote for its two uncontested proposals (the election of three persons to the Board of Directors and the ratification of auditors) and authorization to vote in its discretion on any other matters properly coming before the annual meeting. No mention was made of the Union proposals. On the blue card, the Union included Pittstons two uncontested proposals as well as the Unions own three proposals.

In letters to shareholders dated April 20 and May 2, Pittston noted the existence of the Unions proposals and Pittstons opposition thereto, although neither of these letters disclosed either the text or the substance of the proposals. The substance of the proposals was, however, mentioned in the March 27 proxy statement.

Pittston sought Staff review of its initial March 27 proxy mailing as well as the subsequent April 20 and May 2 letters. The May 2 letter included language to the effect that Pittstons white card would be voted against the Unions proposals and only the Union blue card could be voted for the Unions proposals. Pittston was not asked by the Staff to change its white proxy card to provide shareholders with an opportunity to vote directly on the Union proposals. The Union then filed suit to obtain a temporary restraining order to either postpone the annual meeting or block Pittston from using its white proxy to vote against the Union proposals. This was denied. On June 7, the Staff informed Pittston that the Staff now did not support Pittstons claim of discretionary authority to vote against the Unions proposals, that reliance on Rule 14a-4(c)(4) was misplaced because the Union did not seek to have the proposals included in the Companys proxy material under Rule 14a-8 and that the only other possible basis for Pittston to have discretionary authority was Rule 14a-4(c)(1). The Staff continued with its view that Rule 14a-4(c)(1) presented only two options to Pittston where management was made aware of the proposals in sufficient time before the meeting: Pittston must either (i) set forth the three Union proposals on a new proxy card, with the shareholders given the opportunity to revoke any previously given discretionary authority, or (ii) not cast discretionary votes against the Union proposals.

Larkin v. Baltimore Bancorp, 769 F.Supp. 919 (D. Md. 1991), involved a proxy contest for control of Baltimore Bancorp (the "Bank") between a group of shareholders (the "Dissidents") and the Banks management. The issue that is relevant to the Companys situation relates to the Dissidents proposal to amend the Banks bylaws to increase the number of directors. Management received discretionary proxies and voted them against the proposed bylaw amendments.

The Banks annual meeting was scheduled for May 22, 1991, and management mailed out standard proxy materials, including a general discretionary voting provision, on April 9, 1991. Although publicity was given to the Dissidents goal of gaining control of the Bank prior to April 9th, no filing was made by them with the SEC until May 10th, when they filed their own proxy solicitation materials. The Bank then asked the Staff if the Bank could exercise the discretionary authority received from shareholders to vote against the Dissidents proposals. The Staff replied that:

"Consistent with Rule 14a-4, a solicitor may not exercise discretionary authority granted by a proxy with respect to matters known a reasonable time prior to the meeting. Exercising discretionary authority with respect to matters known twelve days prior to the meeting does not appear consistent with the requirements of the rule .... Consequently, if the Company wishes to retain discretionary authority in its WHITE card to vote on the Amendment of the Bylaws relating to a change in the number of directors and/or increase the number of directors from 18 to 28, shareholders must be provided with a new card which enables shareholders to vote with respect to each of these matters and clearly discloses the manner in which any previously obtained proxies will be voted."

The facts of Pittston and Larkin can be readily distinguished from the Companys situation. In both Pittston and Larkin, the proponents prepared their own proxy materials, cleared them with the Staff and caused them to be distributed to the shareholders. The proponents were not attempting to require the registrant to include their shareholder proposals in the registrants proxy materials. The Companys situation is quite different. The UFCW99 has not given any indication that it intends to prepare its own proxy solicitation materials or conduct its own solicitation. The UFCW99 has indicated only that it intends to introduce its resolution at the Companys annual meeting and has requested the Company to include the resolution in the Companys proxy materials.

A shareholder has several avenues pursuant to which he can make his concerns known to management or to other shareholders. First, the shareholder may notify the registrant that he intends to present a proposal at the shareholder meeting, in which case, if the requirements of Rule 14a-8 are met, the registrant must include the proposal in its proxy materials. Second, a shareholder may communicate with an unlimited number of fellow shareholders under Rule 14a-2(b)(1) so long as, among other things, no proxy is being solicited. Third, a shareholder may prepare and cause to be distributed to an unlimited number of shareholders his own proxy solicitation materials in compliance with the SEC proxy rules. Finally, of course, a shareholder may present a matter directly at the shareholder meeting without notifying the registrant in advance, either without engaging in any solicitation at all or by soliciting proxies only from no more than ten other shareholders without preparing, filing and disseminating proxy materials that comply with the SEC proxy rules.

What the UFCW99 seems to be suggesting is that it can:

(i) submit a shareholder proposal anytime it wants;

(ii) state that the proposal is not intended to fall under Rule 14a-8;

(iii) not prepare any proxy soliciting materials of its own; and

(iv) require the Company to include the proposal in its proxy materials under Rule 14a-4(c)(1) because Rule 14a-4(c)(4) would not be applicable.

It is our opinion that Rule 14a-4(c)(1) and the court decisions in Pittston and Larkin do not permit shareholders to require registrants to include shareholder proposals that are properly excludable under Rule 14a-8 unless the proponents first disseminate their own solicitation materials. Rule 14a-4(c)(1) does not mean that all a shareholder must do is to give untimely notice to a registrant of its intention to introduce a proposal at the meeting, without more, in order to force the registrant into a choice between (i) discussing the shareholder proposal in its materials and soliciting (or resoliciting) proxies with respect to the shareholder proposal and (ii) losing discretionary voting authority with respect to the proposal under Rule 14a-4(c)(4). There can be no "backdoor" approach that enables a shareholder to force a registrant to discuss its proposal in the registrants proxy materials by simply asserting that Rule 14a-8 does not apply to the proponent. Rule 14a-8 does apply even though the proponent may suggest that it does not. The proponent must either comply with Rule 14a-8 in order to have the proposal included or initiate its own solicitation by preparing and disseminating his own solicitation materials in compliance with the proxy rules.

The Pittston and Larkin decisions support the correctness of this conclusion. In both of these cases, the registrants sought to retain discretionary voting authority after the proponents had prepared their own proxy materials and the proponents proxy materials had been broadly disseminated to the shareholders. Indeed, in Pittston, precisely as in the Companys situation at this time, the SEC Staff concluded in its March 16, 1989 letter to Pittston that Pittston retained discretionary authority to vote proxies with respect to the Unions resolutions when all the Union had done was give notice of "four resolutions that it wished to bring before the Annual Meeting of Shareholders." Pittston at page 95,267. If the UFCW99 does nothing more than advise of its intent to present a resolution at the Companys 1996 Annual Meeting, the facts are identical to the facts presented to the Staff in Pittston. The Companys proxy statement and proxy card should not be required to discuss the UFCW99 proposal because there is nothing for the Company to discuss. UFCW99 will have presented nothing to the Companys shareholders for them to consider.

The Staff has in the past permitted registrants to use their discretionary voting authority in situations where the proponent of a proposal excluded under Rule 14a-8 presents the resolution at a shareholder meeting. Pacific Enterprises (March 9, 1990) and Consolidated Freightways (March 8, 1995). The Staff in Pacific Enterprises stated that:

"Proxy statements will frequently state that the board knows of no other matters to come before the meeting. When a shareholder proposal has been excluded pursuant to the provisions of rule 14a-8, the proposal may still be presented at the meeting. Thus, issuers proxy statements should disclose the possibility that proposals omitted pursuant to rule 14a-8 may be raised at the meeting and the proxies will be voted in the discretion of the proxy holders."

The Company does intend to include in its proxy statement disclosure to the following effect:

"Neither the Board of Directors nor management intends to bring before the meeting any business other than the matters referred to in the Notice of Meeting and this Proxy Statement. The Board of Directors is aware that a shareholder may present a proposal at the meeting. This shareholder proposal was excluded from this Proxy Statement pursuant to Rule 14a-8 under the Securities and Exchange Act of 1934. If the proposal is properly brought before the meeting, or any adjournment thereof, it is intended that the persons named in the proxy will use their discretionary authority to vote against such proposal. If any other business should properly come before the meeting, or any adjournment thereof, the persons named in the proxy will vote on such matters according to their best judgment."

REQUEST

We respectfully request that the Staff concur with our opinion that Idaho Power Company may omit the proposal under Rule 14a-8(a)(3)(i) and that it may seek discretionary proxies in accordance with either Rule 14a-4(c)(1) or Rule 14a-4(c)(4). We also respectfully request a waiver of the 80 day requirement of Rule 14a-8(d), since the receipt of the shareholder proposal was less than 80 calendar days before the date the proxy is expected to be filed under Rule 14a-6. The Company intends to mail proxy materials to its shareholders commencing March 20, 1996. Should the Staff disagree with our conclusions, we request the opportunity to discuss the reasons for the Staffs disagreement prior to the issuance of the Staffs response.

Enclosed please find seven copies of this letter. A copy of Mr. McDonoughs letter of January 12th, which includes the proposal, the Companys reply and the Davis, Cowell & Bowe letter are attached, as well as copies of the Pittston and Larkin decisions.

If you have any questions regarding this matter or if I can be of any assistance to you in any way, please do not hesitate to telephone me.

Very truly yours,

Elizabeth W. Powers

EWP/lml

Enclosures

INQUIRY LETTER 2

UNITED FOOD AND COMMERCIAL WORKERS UNION LOCAL 99R

2501 WEST DUNLAP AVENUE, SUITE 240

PHOENIX, ARIZONA 85201

TELEPHONE(602) 997-8000

January 12, 1996

Mr Robert W Stahman

Corporate Secretary

Idaho Power Company

1221 West Idaho Street

Boise, ID 83707

Dear Mr. Stahman:

We are a shareholder of record of 100 shares of common stock in the Company. We hereby advise you of our intent to submit the following resolution at the next annual shareholders meeting:

RESOLVED: That shareholders recommend the Company extend its policy of confidential shareholder voting to the situation where there is a proxy solicitation in opposition to the Board of Directors (exempted from the Companys current confidential voting policy).

This proposal is not being submitted pursuant to Rule 14a-8; however, we request that you voluntarily print a statement in support of the proposal in the interests of informed shareholder voting and full disclosure. If you are agreeable to the concept let us know and we will supply you a draft statement.

Please confirm that you will provide shareholders an opportunity on the proxy card to direct your votes on this proposal, as required by SEC Rule 14a-4.

To eliminate the possibility of any disputes over the completeness and accuracy of any remarks you may make in the proxy statement in opposition to this proposal, please supply us a draft of those remarks before filing with the SEC so that we may alert you to any problems before the proxy statements are printed.

Please supply us with a copy of the company bylaws and advise us of the exact date of the meeting as soon as it is set so we can meet all bylaw requirements for submission of proposals.

Sincerely,

Bill McDonough

UFCW 99

INQUIRY LETTER 3

IDAHO POWER COMPANY

P.O. BOX 70

BOISE, IDAHO 83707

TELEPHONE(208) 388-2676

January 30, 1996

Mr. William T. McDonough, President

United Food and Commercial Workers Union Local 99R

2501 West Dunlap Avenue, Suite 240

Phoenix, Arizona 85201

Dear Mr. McDonough:

This is in response to your letter dated January 12, 1996, wherein you request that the Company voluntarily include in its Proxy Statement for the 1996 Annual Meeting of Shareholders a resolution extending confidential voting to proxy solicitations in opposition to the Board of Directors.

I have enclosed a copy of the Companys By-laws, the 1995 Proxy Statement and the Securities and Exchange Commission rules under the Exchange Act of 1934 (Rule 14a-8) governing shareowner proposals. As you are apparently aware, your submission is not timely. The rules provide that proposals be received 120 days in advance of that date the Proxy Statement was released to shareholders in connection with the previous years (1995) Annual Meeting (March 20, 1995). As indicated in the Companys 1995 Proxy Statement, any shareholder proposal which is presented for inclusion in the Companys 1996 Proxy Statement must have been received on or before November 21, 1995. The rule contemplates reasonable notice to facilitate adequate discussion and preparation of materials. At this point, the Company is well into the preparation of the 1996 Proxy Statement; in fact, parts have already been approved by a Board committee. As a result, the Company has chosen not to comply with your request.

If you have any questions after reviewing the enclosed materials, or if you desire to discuss this matter, please contact me.

Very truly yours,

Robert W. Stahman

RWS:slc

Enclosures

INQUIRY LETTER 4

DAVIS, COWELL & BOWE

100 VAN NESS AVENUE

SAN FRANCISCO, CALIFORNIA ORIGINAL TEXT ILLEGIBLE

TELEPHONE(415) 626-1880

February 21, 1996

By fax and regular mail

(208-388-6936)

Robert Stahman

General Counsel

Idaho Power Company

P.O. Box 70

Boise, ID 83707

Re: UFCW Shareholder Proposal

Dear Mr. Stahman:

This office represents Idaho Power shareholder UFCW Local 99. Your letter to UFCW of January 30, 1996 is not correct in claiming UFCWs proposal to be untimely, as the bylaws available from the SEC contain no advance notice requirement. UFCW is not making a 14a-8 request and hence is not governed by its time requirements in making a proposal. Indeed, it is routine for company bylaws to provide a window period for submitting proposals which is long after the deadline for requesting inclusion of the 500-word supporting statement under Rule 14a-8, usually 30-60 days before the meeting. Any company bylaw or rule requiring the 160-day notice you suggest would be unreasonable and hence unenforceable.

UFCW has given reasonable notice of the proposal in advance of the proxy statement being printed and thus shareholders have a right to vote on this proposal at the annual meeting. If you plan to rule it out of order, please advise me within 10 days so I can seek judicial relief for such bad faith. See, e.g. Lerman v. Diagnostic Data, 421 A. 2d 906 (Del. Ch. 1980).

UFCWs initial letter asked for confirmation that managements card would give shareholders the opportunity to direct managements vote on this proposal. Both the SEC staff and courts hold this is required by Rule 14a-4, incorporating a fundamental notion of corporate democracy: shareholders have a right to direct a proxy holders vote as to each matter on which the proxy holder will likely vote. I enclose a copy of the court ruling to this effect in the Pittston case (where again, a proposal not made under 14a-8 was held not subject to its restrictions).

Please advise me within 10 days of your position on the 14a-4 issue so as to obviate the necessity of our seeking relief through the SEC and/or courts. As you know, prevailing plaintiffs in actions to enforce SEC proxy rules are generally entitled to recover their fees. We do not wish for shareholders to have the bear the expense of management making a mistake on these issues and then having to reprint the cards and/or resolicit.

Respectfully,

Andrew J. Kahn

Attorney for Shareholder

AJK:jm

Enc.

STAFF REPLY LETTER

March 13, 1996

RESPONSE OF THE OFFICE OF CHIEF COUNSEL

DIVISION OF CORPORATION FINANCE

Re: Idaho Power Company (the "Company")

Incoming letter dated February 25, 1996

This is in response to your letter of February 25, 1996 requesting our concurrence that the submission of United Food and Commercial Workers Union Local 99R (the "Union") can be excluded from the Companys proxy materials pursuant to Rule 14a-8(a)(3).

As the proponent expressly disclaimed reliance on Rule 14a-8, we are not responding to your Rule 14a-8 request. You have asked the Division to consider the ability of a company to exercise discretionary authority under Exchange Act Rule 14a-4(c)(1) to vote on a matter to be raised at an annual meeting by a shareholder, when the company receives adequate notice of the proposal pursuant to the companys notice by-law provision. The Divisions views are as follows.

The Division generally has concerns regarding the ability of a company to exercise discretionary authority under Rule 14a-4(c)(1) to vote on a matter raised at an annual meeting by a shareholder, when the company either received adequate notice of the proposal pursuant to the companys by-law notice provision or, in the absence of such a provision, a reasonable time before the solicitation ("Adequate Notice").

However, and subject to the exception noted below, the Division generally would not object to a companys exercise of discretionary authority with respect to matters that are to be presented at the annual meeting and for which the company receives Adequate Notice, so long as shareholders are advised by the company of the nature of the proposal and how the company intends to vote with respect to the proposal.

Assuming Adequate Notice, a company could not, however, exercise discretionary authority under Rule 14a-4(c)(1) with respect to voting on any matter that is the subject of an opposing proxy solicitation so long as the proponent delivers a proxy statement and form of proxy to holders of a majority of the shares entitled to vote on the matter or, if a greater percentage is required under applicable law to carry the proposal, holders of the minimum required. In this circumstance, it is the Divisions view that the matter should be reflected on the companys proxy card. If not, discretionary authority would not apply to the matter.

Because this position is based upon representations made to the Division in your letter, it should be noted that any different facts or conditions might require a different conclusion.

Sincerely,

Vincent W. Mathis

Special Counsel