LEASES:

12 Months Ended

Dec. 31, 2025

LEASES

Recognition of Lease Assets and Liabilities

A lease exists when an arrangement allows the lessee to control the use of an identified asset for a stated period in exchange for payments. Idaho Power determines if an arrangement is a lease and its classification at the lease commencement date. All leases must be recognized as a lease right-of-use (ROU) asset and a lease liability on the balance sheet of the lessee. The ROU asset represents the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments. Idaho Power has elected the practical expedient to not separate non-lease components from lease components and instead account for both as a single lease component.

Lease ROU assets and lease liabilities are estimated and recognized at the lease commencement date based on the net present value of fixed lease payments over the lease term. Variable lease payments are expensed as incurred. If the lease does not provide an implicit rate, Idaho Power uses its collateralized incremental borrowing rate based on the information available at the commencement date to determine the present value of fixed lease payments. The implicit rate is used when it is readily determinable. Idaho Power recovers 100 percent of the Idaho-jurisdiction portion of lease payments on all existing arrangements classified as finance leases through the PCA, and recovers the Oregon-jurisdiction portion of lease payments through the APCU. Idaho Power recognizes lease expenses consistent with regulatory cost recovery, so lease expenses in excess of amounts recovered through the PCA and APCU are deferred as a regulatory asset.

IDACORP does not record leases with a term of 12 months or less in the consolidated balance sheets. Total short-term lease expense was not material for the years ended 2025, 2024, and 2023.

Finance Leases

Finance leases are included in finance lease ROU assets, other current liabilities, and finance lease liabilities recognized on the consolidated balance sheets upon the lease commencement date. Amortization of the lease ROU asset is included in depreciation and amortization, and the interest expense associated with the finance lease liabilities is included in interest on long-term debt and finance leases on the consolidated statements of income. Variable lease payments are not recognized on the consolidated balance sheets and are recorded as incurred in other O&M expense on the consolidated statements of income and

in operating activities in the consolidated statements of cash flows. Idaho Power’s finance lease ROU assets and liabilities relate to the lease discussed below.

Kuna BESS: On April 26, 2023, Idaho Power executed an Energy Storage Agreement with Kuna BESS LLC to utilize the storage capacity of a 150 MW battery storage facility over a 20-year term. The term began May 19, 2025, and has been classified as a finance lease.

The following table provides a summary of the components of total lease cost included in the consolidated statements of income for the year ended December 31 (in thousands of dollars):


	2025
Finance lease cost:
Amortization of ROU asset (Depreciation and amortization)	$	3,762
Interest on lease liabilities (Interest on long-term debt and finance leases)(1)	8,586
Total finance lease cost	12,348
Variable lease cost (Other O&M)	973
Total lease cost	$	13,321

(1) Included in operating activities in the consolidated statements of cash flows as cash paid for amounts included in the measurement of lease liabilities.

The following table presents the classification of certain lease amounts included in the consolidated balance sheets as of December 31 (in thousands of dollars):


	2025
Finance leases:
Other current liabilities	$	6,161

The following table presents the weighted-average remaining lease term and weighted-average discount rate as of December 31:


	2025
Finance leases:
Weighted average remaining lease term	19.38 years
Weighted average discount rate	6.17	%

The following table presents the maturities of future fixed lease payments and a reconciliation of undiscounted cash flows to lease liabilities recognized on the consolidated balance sheets as of December 31, 2025 (in thousands of dollars):


	Finance Leases
2026	$	19,751
2027	19,751
2028	19,751
2029	19,751
2030	19,751
Thereafter	283,907
Total future fixed lease payments	382,662
Less: amounts representing interest	(159,806)
Total present value of lease liabilities	222,856