ida-2024080100010578770000049648FALSEFALSE00010578772024-08-012024-08-010001057877ida:IdahoPowerCompanyMember2024-08-012024-08-010001057877ida:IdahoPowerMember2024-08-012024-08-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
_______________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 1, 2024
_______________________
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Exact name of registrants as specified in | |
| Commission | | their charters, address of principal executive | IRS Employer |
| File Number | | offices and registrants' telephone number | Identification Number |
| 1-14465 | | IDACORP, Inc. | 82-0505802 |
| 1-3198 | | Idaho Power Company | 82-0130980 |
| | | 1221 W. Idaho Street | |
| | | Boise, | Idaho | 83702-5627 | |
| | | | (208) | 388-2200 | |
| State or Other Jurisdiction of Incorporation: | Idaho | |
| Former name or former address, if changed since last report: | None | |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock | IDA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
□
Item 2.02 Results of Operations and Financial Condition.
On August 1, 2024, IDACORP, Inc. ("IDACORP”) issued a press release reporting its financial results for the quarter ended June 30, 2024. A copy of the press release is furnished herewith as Exhibit 99.1. As previously announced, on the same day, members of IDACORP’s management will hold a teleconference to discuss the financial results, and the presentation slides furnished herewith as Exhibit 99.2 will accompany management’s comments.
Item 7.01 Regulation FD Disclosure.
The information set forth in Item 2.02 above is hereby incorporated herein by reference.
______________
The information in Items 2.02 and 7.01 of this report, including the press release and presentation furnished as Exhibits 99.1 and 99.2 hereto, respectively, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. In addition, the exhibits furnished herewith contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in such exhibits.
The exhibits furnished with this report contain business segment information for Idaho Power Company. Accordingly, this report is also being furnished on behalf of such registrant.
______________
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being furnished as part of this report.
| | | | | | | | |
Exhibit
Number | | Description |
| | |
| 99.1 | | |
| 99.2 | | |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
Dated: August 1, 2024
IDACORP, INC.
By: /s/ Lisa A. Grow
Lisa A. Grow
President and Chief Executive Officer
IDAHO POWER COMPANY
By: /s/ Lisa A. Grow
Lisa A. Grow
President and Chief Executive Officer
DocumentExhibit 99.1
August 1, 2024
IDACORP, Inc. Announces Second Quarter 2024 Results, Increases Lower-End 2024 Earnings Guidance
BOISE, Idaho--IDACORP, Inc. (NYSE: IDA) reported second quarter 2024 net income attributable to IDACORP of $89.5 million, or $1.71 per diluted share, compared with $68.6 million, or $1.35 per diluted share, in the second quarter of 2023.
“Higher than expected customer usage in the second quarter, continued customer growth, and rate changes earlier this year contributed to strong results in the second quarter," said IDACORP President and Chief Executive Officer Lisa Grow. "As expected, higher depreciation from our ongoing system investments to meet customer and load growth partially offset those factors.”
IDACORP is increasing the lower-end of its previously reported full-year 2024 earnings guidance to the range of $5.30 to $5.45 per diluted share, with the expectation that Idaho Power will use between $35 and $50 million of additional tax credits available under the Idaho earnings support regulatory mechanism in 2024. Approximately $25 million of those additional tax credits relate to expected amortization of incremental tax credits generated from Idaho Power's investment in 2023 battery storage projects, as contemplated in the settlement stipulation for Idaho Power's 2023 Idaho general rate case (2023 Settlement Stipulation) approved by the Idaho Public Utilities Commission in December 2023. The earnings guidance also assumes normal weather conditions and normal power supply expenses through the remainder of the year.
Summary of Financial Results
The following is a summary of net income attributable to IDACORP and IDACORP's earnings per diluted share for the three and six months ended June 30, 2024 and 2023 (in thousands, except earnings per share amounts):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended
June 30, | | Six months ended
June 30, |
| | | 2024 | | 2023 | | 2024 | | 2023 |
| Net income attributable to IDACORP, Inc. | | $ | 89,520 | | | $ | 68,574 | | | $ | 137,693 | | | $ | 124,672 | |
| Weighted average outstanding shares – diluted | | 52,236 | | | 50,758 | | | 51,519 | | | 50,741 | |
| IDACORP, Inc. earnings per diluted share | | $ | 1.71 | | | $ | 1.35 | | | $ | 2.67 | | | $ | 2.46 | |
The table below provides a reconciliation of net income attributable to IDACORP for the three and six months ended June 30, 2024, from the same periods in 2023 (items are in millions and are before related income tax impact unless otherwise noted):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Six months ended | | |
| Net income attributable to IDACORP, Inc. - June 30, 2023 | | | | $ | 68.6 | | | | | $ | 124.7 | | | | | |
Increase (decrease) in Idaho Power net income: | | | | | | | | | | | | |
Retail revenues per megawatt-hour (MWh), net of associated power supply costs and power cost adjustment and Idaho Fixed Cost Adjustment (FCA) mechanisms | | 19.6 | | | | | 24.4 | | | | | | | |
Customer growth, net of associated power supply costs and power cost adjustment mechanisms | | 5.1 | | | | | 9.8 | | | | | | | |
| | | | | | | | | | | | |
Usage per retail customer, net of associated power supply costs and power cost adjustment mechanisms | | 6.2 | | | | | (3.8) | | | | | | | |
| Transmission wheeling-related revenues | | (2.5) | | | | | (3.5) | | | | | | | |
| Other operations and maintenance (O&M) expenses | | (13.8) | | | | | (27.6) | | | | | | | |
| Depreciation expense | | (7.6) | | | | | (16.2) | | | | | | | |
Other changes in operating revenues and expenses, net | | 13.9 | | | | | 18.6 | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Increase in Idaho Power operating income | | 20.9 | | | | | 1.7 | | | | | | | |
| Non-operating expense, net | | (0.4) | | | | | (2.3) | | | | | | | |
| Additional accumulated deferred investment tax credits (ADITC) amortization | | 3.8 | | | | | 12.5 | | | | | | | |
| Income tax expense, excluding additional ADITC amortization | | (4.0) | | | | | — | | | | | | | |
| Total increase in Idaho Power net income | | | | 20.3 | | | | | 11.9 | | | | | |
| Other IDACORP changes (net of tax) | | | | 0.6 | | | | | 1.1 | | | | | |
| Net income attributable to IDACORP, Inc. - June 30, 2024 | | | | $ | 89.5 | | | | | $ | 137.7 | | | | | |
Net Income - Second Quarter 2024
IDACORP's net income increased $20.9 million for the second quarter of 2024 compared with the second quarter of 2023, due primarily to higher net income at Idaho Power.
The net increase in retail revenues per MWh, net of associated power supply costs and power cost adjustment and FCA mechanisms, increased operating income by $19.6 million in the second quarter of 2024 compared with the second quarter of 2023. This benefit was due primarily to an overall increase in Idaho base rates, effective January 1, 2024, per the terms of the 2023 Settlement Stipulation.
At Idaho Power, customer growth increased operating income by $5.1 million in the second quarter of 2024 compared with the second quarter of 2023, as the number of Idaho Power customers grew by approximately 16,200, or 2.6 percent, during the twelve months ended June 30, 2024. Usage per retail customer increased operating income by $6.2 million in the second quarter of 2024 compared with the second quarter of 2023. While there was an increase in usage per customer for all retail customer classes, usage per irrigation customer increased most significantly at 17 percent, as higher temperatures compared with last year's more moderate second quarter weather led irrigation customers to run irrigation pumps more frequently.
Transmission wheeling-related revenues, net of PCA impacts, decreased $2.5 million during the second quarter of 2024 compared with the second quarter of 2023. This decrease was due primarily to the inclusion of financial settlement of transmission line losses in the PCA mechanism, effective January 1, 2024, as approved in the 2023 Settlement Stipulation, resulting in a smaller contribution of those revenues to net income compared with the second quarter of 2023 when the financial settlement of transmission line losses was not subject to the PCA mechanism.
Total other O&M expenses in the second quarter of 2024 were $13.8 million higher than in the second quarter of 2023, primarily related to approximately $4 million of increased pension-related expenses and approximately $8 million of increase in wildfire mitigation program and related insurance expenses. Both of these increases in expenses were partially offset by increases in retail revenues, as more costs are now
recovered in base rates pursuant to the 2023 Settlement Stipulation. However, revenues related to these increased costs are not collected at the same rate that the expenses are incurred in the interim periods throughout the year due to the impact of volume-based rates and associated revenues. Inflationary pressures on labor-related costs also contributed to the increase in other O&M expenses.
Depreciation expense increased $7.6 million in the second quarter of 2024 compared with the second quarter of 2023 due primarily to an increase in plant-in-service.
Other changes in operating revenues and expenses, net, increased operating income by $13.9 million in the second quarter of 2024 compared with the second quarter of 2023, due primarily to the timing of recording and adjusting regulatory accruals and deferrals. In addition, a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's power cost adjustment mechanisms increased operating revenues and expenses, net, compared with the same period in 2023. More moderate wholesale natural gas and power market prices in the western United States and increased wholesale energy sales decreased Idaho Power's net power supply expenses in the second quarter of 2024 compared with the second quarter of 2023.
Non-operating expense, net, increased $0.4 million in the second quarter of 2024 compared with the second quarter of 2023. Interest expense on long-term debt was higher in the second quarter of 2024 compared with the second quarter of 2023, due primarily to an increase in long-term debt. This increase was partially offset by an increase in allowance for funds used during construction (AFUDC), as the average construction work in progress balance was higher. Also, interest income increased due to higher interest rates and higher average cash and cash equivalent balances.
The increase in income tax expense was principally the result of higher income before income taxes, partially offset by an increase in additional ADITC amortization. Based on Idaho Power's current expectations of full-year 2024 results, Idaho Power recorded $7.5 million of additional ADITC amortization under its Idaho regulatory settlement stipulation during the second quarter of 2024, but only recorded $3.75 million of additional ADITC amortization during the same period in 2023.
Net Income - Year-To-Date 2024
IDACORP's net income increased $13.0 million for the first six months of 2024 compared with the first six months of 2023, due primarily to higher net income at Idaho Power.
The net increase in retail revenues per MWh, net of associated power supply costs and power cost adjustment and FCA mechanisms, increased operating income by $24.4 million in the first six months of 2024 compared with the first six months of 2023. This benefit was due primarily to an overall increase in Idaho base rates, effective January 1, 2024, per the terms of the 2023 Settlement Stipulation.
At Idaho Power, customer growth increased operating income by $9.8 million in the first six months of 2024 compared with the first six months of 2023. The benefit from customer growth was partially offset by a decrease in usage per retail customer of $3.8 million in the first six months of 2024 compared with the first six months of 2023. While there was a reduction in usage per customer for most retail customer classes, usage per residential customer decreased most significantly, as more moderate temperatures from January through May 2024 led residential customers to use less energy for heating purposes. However, warmer weather in June 2024 led to an increase in energy usage per residential customer for cooling purposes, as well as an increase in energy usage per irrigation customer, which partially offset the decrease in usage per residential customer from January through May 2024.
Transmission wheeling-related revenues, net of PCA impacts, decreased $3.5 million during the first six months of 2024 compared with the first six months of 2023. Total wheeling revenues earned during the first six months of 2024 increased 21 percent compared with the same period of 2023 due primarily to an increase in wheeling volumes. However, effective January 1, 2024, financial settlement of transmission line losses are subject to the PCA mechanism, as approved in the 2023 Settlement Stipulation, resulting in a smaller contribution of those revenues to net income compared with the first six months of 2023 when the financial settlement of transmission line losses was not subject to the PCA mechanism.
Total other O&M expenses in the first six months of 2024 were $27.6 million higher than the first six months of 2023, primarily related to approximately $9 million of increased pension-related expenses and an approximately $16 million increase in wildfire mitigation program and related insurance expenses. Both of these increases in expenses are partially offset by increases in retail revenues, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation; however, revenues related to these increased costs are not collected at the same rate that the expenses are incurred in the interim periods throughout the year. On a full-year basis for 2024, Idaho Power expects other O&M expenses related to its employee pension plans and its wildfire mitigation program and related insurance to increase approximately $18 million and $30 million, respectively, compared with 2023, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation. Inflationary pressures on labor-related costs also contributed to the increase in other O&M expenses.
Depreciation expense increased $16.2 million for the first half of 2024 compared with the first half of 2023 due primarily to an increase in plant-in-service.
Other changes in operating revenues and expenses, net, increased operating income by $18.6 million in the first six months of 2024 compared with the first six months of 2023, due primarily to the timing of recording and adjusting of regulatory accruals and deferrals. In addition, a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's power cost adjustment mechanisms increased operating revenues and expenses, net, compared to the same period in 2023. More moderate wholesale natural gas and power market prices in the western United States and increased wholesale energy sales decreased Idaho Power's net power supply expenses in the first six months of 2024 compared to the first six months of 2023.
Non-operating expense, net, increased $2.3 million in the first six months of 2024 compared with the first six months of 2023. Interest expense on long-term debt was higher in the first six months of 2024 compared with the first six months of 2023, due primarily to an increase in long-term debt. This increase was partially offset by an increase in AFUDC, as the average construction work in progress balance was higher. Also, interest income increased due to higher interest rates and higher average cash and cash equivalent balances.
Income tax expense in the first six months of 2024 was consistent with the first six months of 2023 as increased taxes from higher pre-tax income was offset by $20.0 million of additional ADITC amortization. Idaho Power recorded $7.5 million of additional ADITC amortization during the same period in 2023.
2024 Annual Earnings Guidance and Key Operating and Financial Metrics
IDACORP is increasing the lower-end of its earnings guidance estimate for 2024 and adjusting its expectation for the use of ADITCs. The 2024 guidance incorporates all of the key operating and financial assumptions listed in the table that follows (in millions, except per share amounts):
| | | | | | | | | | | | | | |
| | | Current(1) | | Previous(2) |
| IDACORP Earnings Guidance (per diluted share) | | $ 5.30 – $ 5.45 | | $ 5.25 – $ 5.45 |
Idaho Power Additional ADITCs(3) | | $ 35 – $ 50 | | $ 35 – $ 60 |
Idaho Power O&M Expense(4) | | No change | | $ 440 – $ 450 |
| Idaho Power Capital Expenditures, Excluding AFUDC | | No change | | $ 925 – $ 975 |
Idaho Power Hydropower Generation (MWh) | | 7.0 – 8.0 | | 6.5 – 8.0 |
| | | | |
(1) As of August 1, 2024. Assumes normal weather conditions and normal power supply expenses through the remainder of 2024.
(2) As of May 2, 2024, the date of filing IDACORP's and Idaho Power's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.
(3) Approximately $25 million of additional ADITCs relates to amortization of incremental tax credits generated from Idaho Power's investment in 2023 battery storage projects, as contemplated in the 2023 Settlement Stipulation, effective January 1, 2024. The 2023 Settlement Stipulation removed the existing $25 million annual cap on the amount of accelerated amortization of ADITCs.
(4) Approximately $48 million of the expected increase in other O&M expense relates to pension and wildfire mitigation plan expenses, approved for recovery in the 2023 Settlement Stipulation effective January 1, 2024. The increased other O&M expense is expected to be offset by collection through tariff-based retail revenues.
More detailed financial and operational information is provided in IDACORP’s Quarterly Report on Form 10-Q filed today with the U.S. Securities and Exchange Commission, which is also available for review on IDACORP’s website at www.idacorpinc.com.
Web Cast / Conference Call
IDACORP will hold an analyst conference call today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time). All parties interested in listening may do so through a live webcast on IDACORP's website (www.idacorpinc.com), or by calling (888) 596-4244 for listen-only mode. The passcode for the call is 2921833. The conference call logistics are also posted on IDACORP's website. Slides will be included during the conference call. To access the slide deck, please visit www.idacorpinc.com/investor-relations. A replay of the conference call will be available on the company's website for 12 months and will be available shortly after the call.
Background Information
IDACORP, Inc. (NYSE: IDA), Boise, Idaho-based and formed in 1998, is a holding company comprised of Idaho Power, a regulated electric utility; IDACORP Financial, an investor in affordable housing and other real estate tax credit investments; and Ida-West Energy, an operator of small hydroelectric generation projects that satisfy the requirements of the Public Utility Regulatory Policies Act of 1978. Idaho Power, headquartered in vibrant and fast-growing Boise, Idaho, has been a locally operated energy company since 1916. Today, it serves a 24,000-square-mile service area in Idaho and Oregon. Idaho Power’s goal to provide 100% clean energy by 2045 builds on its long history as a clean-energy leader that provides reliable service at affordable prices. With 17 low-cost hydropower projects at the core of its diverse energy mix, Idaho Power’s residential, business, and agricultural customers pay among the nation's lowest prices for electricity. Its 2,100 employees proudly serve more than 640,000 customers with a culture of safety first, integrity always, and respect for all. To learn more about IDACORP or Idaho Power, visit www.idacorpinc.com or www.idahopower.com.
Forward-Looking Statements
In addition to the historical information contained in this press release, this press release contains (and oral communications made by IDACORP, Inc. (IDACORP) and Idaho Power Company (Idaho Power) may contain) statements that relate to future events and expectations, such as statements regarding projected or future financial performance, power generation, cash flows, capital expenditures, regulatory filings, dividends, capital structure or ratios, load forecasts, strategic goals, challenges, objectives, and plans for future operations. Such statements constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, or future events or performance, often, but not always, through the use of words or phrases such as "anticipates," "believes," "could," "estimates," "expects," "intends," "potential," "plans," "predicts," "preliminary," "projects," "targets," "may," "may result," "may continue," or similar expressions, are not statements of historical facts and may be forward-looking. Forward-looking statements are not guarantees of future performance, involve estimates, assumptions, risks, and uncertainties, and may differ materially from actual results, performance, or outcomes. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in forward-looking statements include those factors set forth in this press release, IDACORP's and Idaho Power's most recent Annual Report on Form 10-K, particularly Part I, Item 1A - "Risk Factors" and Part II, Item 7 - "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of that report, subsequent reports filed by IDACORP and Idaho Power with the U.S. Securities and Exchange Commission (SEC), and the following important factors: (a) decisions by the Idaho and Oregon public utilities commissions and the Federal Energy Regulatory Commission that impact Idaho Power's ability to recover costs and earn a return on investment; (b) changes to or the elimination of Idaho Power's regulatory cost recovery mechanisms; (c) expenses and risks associated with capital expenditures for, and the permitting and construction of, utility infrastructure projects that Idaho Power may be unable to complete, are delayed, or that may not be deemed prudent by regulators for cost recovery or return on investment; (d) expenses and risks associated with supplier and contractor delays and failure to satisfy project quality and performance standards on utility infrastructure projects, and the potential impacts of those delays and failures on Idaho Power's ability to serve customers; (e) power demand exceeding supply, and the rapid addition of new industrial and commercial customer load and the volatility of such new load demand, resulting in increased risks and costs for purchasing energy and capacity in the market or acquiring or constructing additional capacity and energy resources; (f) impacts of economic conditions, including an inflationary or recessionary environment and increased interest rates, on items such as operations and capital investments, supply costs and delivery delays, supply scarcity and shortages, population growth or decline in Idaho Power's service area, changes in customer demand for electricity, revenue from sales of excess power, credit quality of counterparties and suppliers and their ability to meet financial and operational commitments, and collection of receivables; (g) changes in residential, commercial, and industrial growth and demographic patterns within Idaho Power's service area, and the associated impacts on loads and load growth; (h) employee workforce factors, including the operational and financial costs of unionization or the attempt to unionize all or part of the companies' workforce, the cost and ability to attract and retain skilled workers and third-party contractors and suppliers, the cost of living and the related impact on recruiting employees, and the ability to adjust to fluctuations in labor costs; (i) changes in, failure to comply with, and costs of compliance with laws, regulations, policies, orders, and licenses, which may result in penalties and fines, increase compliance and operational costs, and impact recovery associated with increased costs through rates; (j)
abnormal or severe weather conditions (including conditions and events associated with climate change), wildfires, droughts, earthquakes, and other natural phenomena and natural disasters, which affect customer sales, hydropower generation, repair costs, service interruptions, liability for damage caused by utility property, and the availability and cost of fuel for generation plants or purchased power to serve customers; (k) advancement and adoption of self-generation, energy storage, energy efficiency, alternative energy sources, and other technologies that may reduce Idaho Power's sale or delivery of electric power or introduce operational vulnerabilities to the power grid; (l) variable hydrological conditions and over-appropriation of surface and groundwater in the Snake River Basin, which may impact the amount of power generated by Idaho Power's hydropower facilities and power supply costs; (m) ability to acquire equipment, materials, fuel, power, and transmission capacity on reasonable terms and prices, particularly in the event of unanticipated or abnormally high resource demands, price volatility, lack of physical availability, transportation constraints, outages due to maintenance or repairs to generation or transmission facilities, disruptions in the supply chain, or reduced credit quality or lack of counterparty and supplier credit; (n) disruptions or outages of Idaho Power's generation or transmission systems or of any interconnected transmission systems, which can result in liability for Idaho Power, increased power supply costs and repair expenses, and reduced revenues; (o) accidents, electrical contacts, fires (either affecting or caused by Idaho Power facilities or infrastructure), explosions, infrastructure failures, general system damage or dysfunction, and other unplanned events that may occur while operating and maintaining assets, which can cause unplanned outages; reduce generating output; damage company assets, operations, or reputation; subject Idaho Power to third-party claims for property damage, personal injury, or loss of life; or result in the imposition of fines and penalties; (p) acts or threats of terrorism, acts of war, social unrest, cyber or physical security attacks, and other malicious acts of individuals or groups seeking to disrupt Idaho Power's operations or the electric power grid or compromise data, or the disruption or damage to the companies’ business, operations, or reputation resulting from such events; (q) increased costs associated with purchases of power mandated by the Public Utility Regulatory Policies Act of 1978 from renewable energy sources; (r) Idaho Power's concentration in one industry and one region, and the resulting exposure to regional economic conditions and regional legislation and regulation; (s) unaligned goals and positions with co-owners of Idaho Power’s generation and transmission assets; (t) changes in tax laws or related regulations or interpretations of applicable laws or regulations by federal, state, or local taxing jurisdictions, and the availability of tax credits; (u) inability to timely obtain and the cost of obtaining and complying with required governmental permits and approvals, licenses, rights-of-way, and siting for transmission and generation projects and hydropower facilities; (v) ability to obtain debt and equity financing or refinance existing debt when necessary and on satisfactory terms, which can be affected by factors such as credit ratings, reputational harm, volatility or disruptions in the financial markets, interest rates, decisions by the Idaho, Oregon, or Wyoming public utility commissions, and the companies' past or projected financial performance; (w) ability to enter into financial and physical commodity hedges with creditworthy counterparties to manage price and commodity risk for fuel, power, and transmission, and the failure of any such risk management and hedging strategies to work as intended, and the potential losses the companies may incur on those hedges, which can be affected by factors such as the volume of hedging transactions and degree of price volatility; (x) changes in actuarial assumptions, changes in interest rates, increasing health care costs, and the actual and projected return on plan assets for pension and other postretirement plans, which can affect future pension and other postretirement plan funding obligations, costs, and liabilities and the companies' cash flows; (y) remediation costs associated with planned cessation of coal-fired operations at Idaho Power's co-owned coal plants and conversion of the plants to natural gas; (z) ability to continue to pay dividends and achieve target dividend payout ratios based on financial performance and capital requirements, and in light of credit rating considerations, contractual covenants and restrictions, and regulatory limitations; (aa) adoption of or changes in accounting policies and principles, changes in accounting estimates, and new SEC or New York Stock Exchange requirements or new interpretations of existing requirements; and (ab) changing market dynamics due to the emergence of day ahead or other energy and transmission markets in the western United States. Any forward-looking statement speaks only as of the date on which such statement is made. New factors emerge from time to time and it is not possible for the companies to predict all such factors, nor can they assess the impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. IDACORP and Idaho Power disclaim any obligation to update publicly any forward-looking information, whether in response to new information, future events, or otherwise, except as required by applicable law.
| | | | | |
| Investor and Analyst Contact | Media Contact |
| |
| Amy I. Shaw | Jordan Rodriguez |
| VP of Finance, Compliance & Risk | Corporate Communications |
| Phone: (208) 388-5611 | Phone: (208) 388-2460 |
| AShaw@idahopower.com | JRodriguez@idahopower.com |
###
a2024-q2idacorpconferenc
Earnings Conference Call 2nd Quarter 2024 August 1, 2024 Exhibit 99.2
Forward-Looking Statements This presentation (and oral statements relating to this presentation) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical facts, that express or involve discussions of expectations, beliefs, plans, objectives, outlooks, assumptions, or future events or performance are forward-looking. Forward-looking statements are not guarantees of future performance, involve estimates, assumptions, risks, and uncertainties, and may differ materially from actual results, performance, or outcomes. Factors that may cause actual results or outcomes to differ materially from those contained in forward-looking statements include those listed in IDACORP, Inc.'s and Idaho Power Company's most recently filed periodic reports on Form 10-K and Form 10-Q, including (but not limited to) the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections, and in other reports the companies file with the U.S. Securities and Exchange Commission. Those factors also include the following, among others: Decisions by state and federal regulators affecting Idaho Power's ability to recover costs and earn a return on investment; Changes to or elimination of Idaho Power’s regulatory cost recovery mechanisms; Ability to timely obtain permits and construct, and expenses and risks of capital expenditures for, utility infrastructure, including the impacts of inflation, price volatility, supply chain constraints, and supplier and contractor delays and failure to satisfy project quality and performance standards; Impacts of economic conditions, including an inflationary or recessionary environment and increased interest rates, on items such as operations and capital investments and changes in customer demand; Power demand exceeding supply, and the rapid addition of new industrial and commercial customer load and the volatility of such new load demand, resulting in increased risks and costs for purchasing energy and capacity in the market or acquiring or constructing additional capacity and energy resources; Risks of operating an electric utility system, including compliance with regulatory obligations and potential liability for fires, outages, and personal injury or property damage; Acts or threats of terrorism, cyber or physical security attacks, and other acts seeking to disrupt Idaho Power's operations or the electric power grid or compromise data; Abnormal or severe weather conditions, wildfires, droughts, earthquakes, and other natural phenomena and natural disasters; Ability to acquire equipment, materials, fuel, power, and transmission capacity on reasonable terms and prices; Impacts of current and future governmental regulation and ability to timely obtain, and the cost of obtaining and complying with, government permits and approvals, licenses, and rights-of-way and siting for transmission and generation projects; Ability to obtain debt and equity financing when necessary and on satisfactory terms; Ability to continue to pay dividends and achieve target dividend-payout ratios, and contractual and regulatory restrictions on those dividends; and Changing market dynamics due to the emergence of day ahead or other energy and transmission markets in the western United States. New factors emerge from time to time, and it is not possible for the companies to predict all such factors, nor can they assess the impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. IDACORP and Idaho Power disclaim any obligation to update publicly any forward-looking information, whether in response to new information, future events, or otherwise, except as required by applicable law. 2
Presenting Today Lisa Grow IDACORP President & Chief Executive Officer Amy Shaw IDACORP Vice President of Finance, Compliance & Risk Brian Buckham IDACORP Senior Vice President, Chief Financial Officer & Treasurer 3
IDACORP Earnings Performance Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Net income (thousands) $ 89,520 $ 68,574 $ 137,693 $ 124,672 Weighted average common shares outstanding – diluted (thousands) 52,236 50,758 51,519 50,741 Diluted earnings per share $ 1.71 $ 1.35 $ 2.67 $ 2.46 4
Growth and Economic Expansion Moody’s GDP Growth Projections for Idaho Power’s Service Area: • 2024: 4.3% • 2025: 3.8% 5 2.6% (Year-over-year) Idaho Power Customer Growth 580,000 590,000 600,000 610,000 620,000 630,000 640,000 650,000 2020 2021 2022 2023 Twelve Months Ended June 30, 2024
Oregon General Rate Case • Filed with the OPUC on December 15, 2023 • Settlement stipulations filed in May and June 2024 with the OPUC, awaiting final approval • Requests approval of rates effective October 15, 2024 – Increase of $6.7 million, or 12.14%, in total Oregon jurisdictional revenue – 9.5% Oregon-jurisdiction ROE – 7.302% Oregon-jurisdiction overall rate of return • Settlement stipulations do not preclude Idaho Power from filing another general rate case or other limited issue proceeding in Oregon at any time in the future Idaho and Oregon Rate Case Activity 6 Idaho Limited-Issue Rate Case • Filed with the IPUC on May 31, 2024 • Targeting rate increase effective January 1, 2025 • Idaho Power requested an increase of $99.3 million, or 7.31%, in annual Idaho jurisdictional revenue • The limited-issue request focuses on revenue requirements for forecasted annual year-end 2024 incremental plant additions and incremental O&M labor costs • Idaho Power did not request any changes to other aspects of the settlement stipulation approved by the IPUC for Idaho Power's 2023 Idaho general rate case
RFP Update(1)(2) Resource Owned or Contracted 2023 Battery Storage Solar 120 MW Owned 40 MW PPA(3) 2024 Battery Storage Solar 96 MW Owned 100 MW PPA 2025 Battery Storage 77 MW Owned; 150 MW ESA 2026(4) Battery Storage Energy and Capacity 200 MW Owned 200 MW Market Purchase 2027 Evaluating Bids TBD 2028 and later RFP Under PUC Review TBD 7 (1)Distribution site battery storage is excluded. (2)Although not included in Idaho Power’s RFP process, solar PPA's for 200 MW and 125 MW are scheduled to come online in 2025 and 2026, respectively. Both projects have been allocated to customers as part of the Clean Energy Your Way (CEYW) program. (3)Allocated to customers as part of the CEYW program. (4) Idaho Power continues to evaluate additional bids to meet its energy and capacity needs.
Q2 2023 to Q2 2024 IDACORP, Inc. Net Income (in millions and before related income tax impact unless otherwise noted) 8 Net Income – For the Three Months Ended June 30, 2023 $ 68.6 Increase (decrease) in Idaho Power net income: Retail revenues per megawatt-hour, net of associated power supply costs and power cost adjustment and Idaho Fixed Cost Adjustment mechanisms 19.6 Customer growth, net of associated power supply costs and power cost adjustment mechanisms 5.1 Usage per retail customer, net of associated power supply costs and power cost adjustment mechanisms 6.2 Transmission wheeling-related revenues (2.5) Other operations and maintenance expenses (13.8) Depreciation expense (7.6) Other changes in operating revenues and expenses, net 13.9 Increase in Idaho Power operating income 20.9 Non-operating expense, net (0.4) Additional accumulated deferred investment tax credits amortization 3.8 Income tax expense, excluding additional accumulated deferred investment tax credits amortization (4.0) Total increase in Idaho Power net income 20.3 Other IDACORP changes (net of tax) 0.6 Net Income – For the Three Months Ended June 30, 2024 $ 89.5
Liquidity (millions) As of June 30, 2024 IDACORP(1) Idaho Power Net balance available(2) $ 100.0 $ 380.1 Operating Cash Flows and Liquidity (1) Holding company only. (2) IDACORP’s and Idaho Power’s respective $100 million and $400 million revolving credit facilities, expiring in December 2028, net of commercial paper outstanding and amounts identified for other use. As of June 30, 2024, there was no commercial paper outstanding. Idaho Power could be required to purchase $19.8 million of American Falls Bonds prior to maturity under the optional or mandatory purchase provisions of the bonds, if the remarketing agent for the bonds were unable to sell the bonds to third parties. (3) IDACORP entered two forward sale agreements (FSAs) with a forward counterparty on November 7 & 8, 2023. On May 14, 2024, IDACORP partially settled the FSAs with physical delivery of 2,542,442 shares of common stock to the counterparty in exchange for cash of $230.0 million. At June 30, 2024, IDACORP could have settled the remainder of the FSAs with physical delivery of 679,540 shares of common stock to the counterparty in exchange for cash of $61.8 million. The FSAs provide for settlement on a date or dates to be specified at IDACORP’s discretion, the first of which occurred on May 14, 2024. The settlement of the remaining shares under the FSAs is expected to occur on a settlement date or dates on or prior to November 7, 2024. (4) IDACORP entered into an Equity Distribution Agreement (EDA) on May 20, 2024, pursuant to which it may issue, offer, and sell, from time to time, up to an aggregate gross sales price of $300 million of shares of its common stock through an at-the-market offering program, which includes the ability to enter into FSAs. During the six months ended June 30, 2024, IDACORP did not issue common stock, nor did it enter into any FSAs, pursuant to the EDA. 9 IDACORP Cash Flows (millions) Six Months Ended June 30, 2024 2023 Net Cash Provided by Operating Activities $ 256.0 $ 6.8 IDACORP Equity Financing (millions) Remaining as of June 30, 2024 Settled To-Date Forward Sale Agreements(3) $ 61.8 $ 230.0 At-the-Market Offering Program(4) $ 300.0 –
2024 Earnings Per Share Guidance and Estimated Key Operating Metrics Current(1) Previous(2) IDACORP Earnings Guidance (per diluted share) $ 5.30 – $ 5.45 $ 5.25 – $ 5.45 Idaho Power Additional Amortization of Accumulated Deferred Investment Tax Credits (ADITCs) (millions)(3) $ 35 – $ 50 $ 35 – $ 60 Idaho Power Operations & Maintenance (O&M) Expense (millions)(4) No change $ 440 – $ 450 Idaho Power Capital Expenditures, Excluding Allowance for Funds Used During Construction (millions) No change $ 925 – $ 975 Idaho Power Hydropower Generation (millions megawatt-hours) 7.0 – 8.0 6.5 – 8.0 (1) As of August 1, 2024. Assumes normal weather and normal power supply expenses for the remainder of 2024. (2) As of May 2, 2024, the date of filing IDACORP's and Idaho Power's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. (3) Approximately $25 million of additional ADITCs relates to amortization of incremental tax credits generated from Idaho Power's investment in 2023 battery storage projects, as contemplated in the settlement stipulation for the 2023 Idaho general rate case (2023 Settlement Stipulation), effective January 1, 2024. The 2023 Settlement Stipulation removed the existing $25 million annual cap on the amount of accelerated amortization of ADITCs. (4) Approximately $48 million of the expected increase in other O&M expense relates to pension and wildfire mitigation plan expenses, approved for recovery in the 2023 Settlement Stipulation effective January 1, 2024. The increased other O&M expense is expected to be offset by collection through tariff-based retail revenues. 10
Contact Information Amy I. Shaw Vice President of Finance, Compliance & Risk (208) 388-5611 AShaw@idahopower.com Investors & Analysts Jordan Rodriguez Corporate Communications (208) 388-2460 JRodriguez@idahopower.com Media
