On July 5, 2002, approximately 0720 mountain daylight time, a Head Balloons, Inc. AX8-88, N4522E, registered to and being operated by a commercial pilot, sustained substantial damage when it impacted power lines while landing approximately one mile southwest of Victor, Idaho. The pilot and two passengers were uninjured. Visual meteorological conditions existed and no flight plan had been filed. The flight, which was personal, was operated under 14 CFR 91, and originated from the Teton Springs Resort, Victor, Idaho, approximately 0700. The pilot reported that about 20 minutes after departure he encountered westerly winds of 10 mph increasing and selected an alternate landing site. During his approach one of the passengers called "power lines." The pilot was already applying burner however, about 5-10 seconds later the upper supports of the basket contacted the power lines. The pilot indicated that at this time there was a flash and one of the three wires fell away. He applied several more short bursts of burner in an attempt to hold in place and then secured the fuel shutting the burner down. The basket came to rest on a highway in an upright attitude (refer to Attachment GI-I) and all three occupants exited. The aviation surface weather observation taken at 0753 at Idaho Falls and located 42 nautical miles west-southwest reported winds from 200 degrees magnetic at 11 knots with winds gradually increasing in strength during the morning.