On the effective date of Jan. 27, 2016, Fitch Ratings will downgrade the short-term rating to 'F1' from 'F1+' assigned to the Intermountain Power Agency commercial paper notes $50,000,000 tax-exempt series B-1 and $50,000,000 tax-exempt series B-2 (notes). A combined maximum of $100,000,000 aggregate principal amount of authorized notes may be outstanding at any given time.

The rating action is in connection with (i) the substitution of the current credit agreement provided by JPMorgan Chase Bank, N.A. (rated 'AA-/F1+'/Stable Outlook) supporting the notes, with a credit agreement to be provided by Bank of America, N.A. (rated 'A+/F1'/Stable Outlook); and (ii) the reoffering of the notes as non-callable commercial paper.

KEY RATING DRIVERS:

On the effective date, the 'F1' rating on the series B-1 and B-2 notes will be downgraded based on the support to be provided by a credit agreement of Bank of America, N.A., which has a stated expiration date of Jan. 25, 2019, unless extended or earlier terminated. The Bank of America substitute credit agreement covers principal only. The Intermountain Power Agency remains obligated to pay interest upon maturity of all notes. Intermountain Power Agency's long-term rating is 'AA-'/Stable Outlook.

The Bank of New York Mellon will continue as the Issuing and Paying Agent for the notes, and as IPA, is directed to request an advance under the substitute credit agreement whenever proceeds of the sale of rollover notes and other funds are insufficient to pay maturing notes. The substitute credit agreement provides sufficient coverage for the principal amount of notes and the issuer is obligated to pay interest on the notes.

All notes will be issued at par, with interest due at maturity. Following the occurrence of an event of default under the credit agreement, Bank of America, N.A. may direct the IPA to immediately stop the issuance of any additional notes. In such event, the substitute credit agreement will expire after all the notes supported by it mature and have been paid from funds drawn on it. In addition, the substitute credit agreement may be terminated by Bank of America, N.A. upon the occurrence of specified immediate termination events. The dealers for the notes continue to be J.P. Morgan Securities LLC & Morgan Stanley & Co. LLC.

RATING SENSITIVITIES

The rating reflects the short-term rating that Fitch maintains on the substitute bank providing liquidity support and will be adjusted upward or downward in conjunction with changes to the short-term rating of the bank and in some cases, the long-term rating of the Intermountain Power Agency.

Additional information is available at www.fitchratings.com.

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