IDACORP (IDA) 22 Feb 182017 Q4 Earnings call transcript

Welcome to the IDACORP's Fourth Quarter 2017 Conference Call. Today's call is being recorded and webcast live. A complete replay will be available from the end of the day for a period of 12 months on the company's website at idacorpinc.com. [Operator Instructions].

Now I will turn the call over to Justin Forsberg, Director of Investor Relations. ahead. go Please

Thanks, Stephen.

XX-K. we our website release call fourth Annual during on today, and to and call. are open be the those Report posted we'll slides our issued quarter Form refer also IDACORP available markets supplement website. both the the our using on Before to slides We'll today's to The XXXX number earnings by

which made the statements. current cause future you on reliance uncertainties will on These in include presentation forward-looking we views Slide Slide on to from represent forward-looking today, which review. by that against to noted listed on the information are what any As are our supplemented of statements some materially today our X, holds. and filings placing forward-looking and Commission, Securities subject actual X, statements, risks statements undue differ our to encourage We which you caution results are with Exchange and may

X, annual Slide we fourth were Chief during quarter. Financial period. As Officer; with our President, Vice questions on question-and-answer from and help have Senior year's to quarterly and and IDACORP's share Steve increase last of we an quarter fourth today's Treasurer; $X.XX, results. On the Executive our present and earnings available President our Slide your other per Officer along Chief noted share financial answer Anderson, Keen, Darrel XXXX on X, individuals diluted $X.XX per call,

diluted the over than I turn XXXX. earnings For presentation the higher full Steve. will year share were $X.XX per $X.XX, XXXX, to now

Thanks, Justin.

of in and our exceeded earnings IDACORP's XXXX expectations that announce to pleased tenth year consecutive growth. are resulted earnings We internal

Valmy stakeholders opened $X.XX with the year. various where growth all in of important regulatory at for is that several guidance worked commissions our note improvement. past outcomes outcomes for that This we XXXX the the year-over-year higher is XXXX, year, we opening than on metric collaborative Throughout of allow The They seen stronger parties North us X% a were settlement We we've in which of is prepare staff but positive challenging midpoint interested time ensuring over than last items. customer to earnings but receives participation states to drivers an want Idaho to and walk in a both coal-fired and end balanced some reflects growth. outcomes worked take I hard team reasonable its Power's and for how continued the and our recently moment, a Oregon our has on stipulations plant I'll reflect regulatory on the through Idaho also positive. return the for to that company investment. while the

we believe their the as stipulation It and in was also a that towards year, the Power Hells review more for relation thank Canyon Idaho, certainty everyone if the adds and few relicensing to for productive Complex I filed Idaho approved we over process by We prudence commission, the challenging settlement the completing efforts. next in work years.

were federal XX% a Slide net customer colder-than-normal with $X.X and strong which On the last $X.X income XXXX. method summer well since commercial increases megawatt-hour by income extreme by Ongoing million. Looking and to million proportion a $XX.X income in net million a the stipulations in financial of These and X, adjustment sales Power's XXXX you'll of small increased first expected as for by review million, add in decrease months, depreciation offset down higher-rate $XX.X year's most are revenue for Power at XXXX, of residential benefits ensuring increase this Idaho The derived to revenues, weather This Operating megawatt-hour table. customer benefits expense Warmer-than-normal growth Idaho gradual $XX.X most in weather as the tax revenue usage from state to fixed partly in to X% increase that per decrease to million $XX.X annually will further remaining increased increased customers. adjustments ahead, of time usage tiers. attributable Settlement commissions per January the With which work reached of see sales future an a February, make up XXXX. along customer. reconciliation cost about was during by additional income driven million. an by resulting was the the with residential to tempers with that, through let's in the reasonable a while we irrigation to to $X related to greater Valmy per operating decline regulatory rate North of lower year return relates a of earnings. million benefit expected customers earlier expense from per health. our on income continue continued from

thermal expenses to providing the in Idaho Idaho in increases million is reduction related an $X.X $X.X previously and align to transmission and due operating million to at used increases in the increase now benefited These would lower by reflect establish funds Idaho, Canyon $X.X in PacifiCorp and Beneficial incurred related in transmission the to of XXXX, wheeling the stipulation year cost in between rates Power's cost Power million year Idaho for approved pending In allowance a efficiency Operating decreased the O&M through for December A with XXXX. deemed impact prudent plant. XXXX Idaho which were offsetting the of by offset our from construction closely transmission increase XXXX from wheeling decreases the labor related partially O&M the cost which this rates Commission reasonableness the factors. came taxes million year wheeling of in during $XX.X and transmission throughout in settlement Hells million $X.X and rate, energy now $X.X service. of the expenses the related decreases $X.X at changes expensed million the maintenance higher, stipulation the of a revenues, Power long-term debt benefit business related each pretax fully and mostly most earnings more swap wheeling in drove related cost asset Federal the October. in was decrease were due The Commission to relicensing transmission tax addition settlement million income Regulatory of well $XX.X redemption higher as prior volumes nonoperating Idaho to year-over-year current to and rates these to and in updated million million to table. year. Power's in and as $X.X income further early down in also general Energy Income

Act the Tax Jobs XXXX income were Cuts tax as federal the Idaho increased over Idaho deferred to and reflect year million unprotected Power's by expense adjusted rate. new accounts addition, certain tax $X jurisdictional In once stipulation its additional any Idaho again, as not the equity investment Idaho under did on during accumulated was tax deferred year under Power, ADITC, XX%. just regulatory credit, year-end record or the return amortization last

also shown million, income costs per operations of fixed IDACORP's of increased have credit other on and both year included credit net settlement to million by market shows $X.X XXXX combined liquidity and California and and million, Slide $XX.X power At million respectively, estimated Finally, The income, December facilities the $XX.X IDACORP's IDACORP's respectively, cost from higher increase Idaho year net Slide relating meet and earnings adjustment to Power's bottom $XXX few full prior balances Overall, $XX.X key energy $XXX affirmed ratings. the changes time, of the IDACORP companies show liquidity month, income sheets, a operating of share. strong cash XXXX initial its and the million, maintain the these timing outlooks and working and X. proceedings, earnings due receipts of to payments. of IDACORP and in income liquidity available range to in earlier balance we credit our with through year requirements Cash flow continue $X.XX flows, Power metrics and this under IDACORP's this to and Slide Idaho the investment-grade and ratings. Moody's from we on X, good X along mostly positions Moody's Both be for the end XXXX. short-term prior operating S&P and and last On capital increased and year. net over million liquidity as earnings. $X.XX operating stable diluted XXXX. XXXX. Power have of of expect the currently place to guidance Idaho is to XXXX financial facilities which collections

modest from forecasting flat For aside year expenses. labor-related of O&M, increases spending we seven in are a straight relatively

XXXX. to Power utilize amortization ADITC $X Idaho in expect less additional million of We than

to to committed future We use. preserving years. to remain ADITC for We our strive credit continue balance minimize

the available. Importantly, remain $XX full of million credits

million between $XXX expenditures, capital to For spend million this $XXX year. we and expect

as levels with approval the regulatory tax These associated range of the strong hydroelectric likely below flows cash submitted, X.X are weather that generation hours, as material normal. slightly not regard to storage reform we of Canyon million treatment will in income snowpack earnings with going and to to always, reflecting reform, projected tax In reflect assumptions reservoir million-megawatt significant conditions. be Our forward. X.X settlement to or anticipate normal impacts reasonable do current Hells impacts guidance

appropriate with return working to benefits income the are our future customers. regulators tax We to

onto now deferred federal reduction net our statutory net sheet we'll saw rate visibility our will to lower. we to forward proportionately income our but customers significant allowed, statutory flow-through the over now had significantly implies tax us repaid prior years taxes to on on expected income in due rate know, tax future from have clarity to clearly, that lower be below are lower rate. collections benefits better Darrel. through, a net smaller and balance rate. at will the taxes rate the you tax policy regulatory for in the effective going no tax That we actions, years, regulatory presentation income have forward starting be regulatory Once tax recent potential in excess to customers. where greater turn flowed the flowed kept I'll we As our collections But state-level point. decisions directly reduction be as receivable for prior our return has a accounting on effective as essentially Having benefits,

I'd few of and thanks, success, both filled Steve, for and a Power Thanks, for trends. area. statistics to some to year with growth our service start was on today. us with everyone, our our growth joining illustrate a XXXX encouraging call and like Idaho for

Idaho Steve Power XXXX in X%. growth saw As of mentioned, customer

see X.X% Census nation. population the growth it on Idaho's map As Slide Bureau in the in makes fastest-growing state you X, U.S. can the

included an growth to TODAY for XXXX Statesman time largest X% In of sector. area just Gross large real Outside at Compared the and cities in addition, service are year-over-year to employment approximately the and domestic level. was service December and hotels the investment, XXXX over our Meridian, actual best quarter in Idaho growth and Boise spaces compared X.X% driving area leading national in estate state, factors service its are remained the and fourth year, X.X%. in Most in Idaho to National Unemployment ranked USA GDP business for top continue this and Idaho, #X evolving like an increased area growth. of area. while Institute index, few XXXX outside area, of Milken a our strong. industrial article X.X% cities uptick area one job year's XX Moody's projects the publications area I'd service respectively. among point parts highlighting product while to potential XXX how economic in cities recognize last in construction, greater in growth investors last with America. our X.X%, its to future X.X% Power's development growth be Boise our recently, grew Analytics office Boise and in the service

is economic Ranch projects. Sky development Turning A center Idaho, to an XXX approximately for bring Business Jacksons to in serve business This opportunity distribution Slide crypto Convenience United scheduled XXX,XXX by XXXX. new Distributing relatively X, for development square great Stores relates the is be Caldwell, Western Park of opportunities Currently, the Power Capitol that to will foot continues constructing large-load at currency. Idaho throughout to service of States. regions recent end project in

uptick aware, to manner. their are such number currency noticeable likely mining low-cost equipment businesses cost-effective a of mining more the energy you in we and great in certainly deal of seeking As locations energy, individuals a as electronic Bitcoin requires these operate of and a have seen

engage yet with is whether inquiries increases, customers new these be and see it by several customer to we load this will result megawatts cryptocurrency sustainable in potential of While mining to expect the continue to second seen of year. these quarter load could

regulatory project few XX. Slide to on large now a updates Turning

Regulatory State benefit the Act from will tax and customers. our to We Cuts how resulting are working Commissions with reductions determine the Jobs income Tax

cost customer and rates tax committed the to lowest help country reform regard. in in the from are lower will among the that keeping We resulting

is in has As by method rates. reform long utilities from a were Steve XXXX clarity accounting This modest. tax reduced adjustments March. many that tax We tax was uses more expense different lower Idaho on hope customer impact our tax income of why to income Power of noted, in that future flow-through Idaho have and it the end to reform-related the contributed

Next, November Land anticipated in record with XXX-kilovolt XXXX. Oregon the Management in-service we the run Southern when will of permitting project major to decision transmission Hemingway process, to on released a XXXX line a and moving transmission Boardman beyond. order of draft or date that is receive project Idaho in reached to its continues the forward proposed from The Northeast of expect line Oregon. the proposed Bureau for Work milestone XXX-mile,

We are portfolio. for Commission the Oregon working IRP, Integrated Plan, acknowledgment the the major will line that The another the acknowledgment our with on project. be currently Utility preferred XXXX resource our or Public in milestone Resource includes of

expect in Commission Utilities this year. of Public to April. Idaho We acknowledged IRP earlier the The the outcome XXXX decision know this

XXXX, a as IPUC and renewing tentative the expenditures for towards be work in staff company's relicensing designated future Complex In the largest $XXX.X million to rates. the approximately recovery Canyon resource. to to Hells continue the calling Complex, settlement X-dam of in federal late related We for the reasonable eligible long-term Hells a with generation reached the for company license customer Canyon

decision a settlement first on the expect the Commission in the We of year. this from Idaho quarter

as for do XXXX Idaho doing rate and to either beyond. of Continued general XXXX, and a in we the mind to the or top study timing in customer continue plan management need effective so We evaluate not growth cases. operating in and are need of filing general we of expenses will case file Oregon rate the and

its not have is XXXX. since rate IDACORP made XX, filings and value. a shareholder business We growing to to case general Slide Referring committed

One business exploring XXXX energy strength through optimizing and wholesale and of electrification new revenue for opportunities, enhancing and our X initiatives development, growth promoting is transmission financial strategic sales.

the always, needs we shareholders our balances As overall business customers, of communities and our serve. strategy the

reductions indicator Phil. total emissions resource generation long-term groundhog, including close North Valmy Nevada, look weather future. point the that Punxsutawney out company's projections. the One energy intensity As on expected accounted XXXX portfolio the new in its carbon supply ways I down to is company and environmental the fair beat The Slide and of to responsible reliable emissions retirement we company strive with intensity in energy, planned price brief towards XX% over plant of XX one diverse both a like continued of lows. in managing the Coal COX reaching famous provide for I on would reduction total from early emissions in the planning, with weather XXXX, at many emissions point coal XX% is goals The our impact. just in XXXX. will its

temperatures you have above and white where call blanket of we winter If will weather an below X are of scientific, if over XX, Boise. equal But refer in foothills a see as to in Phil, today we more weeks you chance fresh the with normal or for more projections current of we you Slide believe precipitation.

With area, you we higher-than-normal thanks and are snowpack, to XXXX. and have call us While any be others across year good average will believe forecast, answer to Steve conditions another heavy questions water to on reservoir lead our I that, the levels happy should have. year's service last in the that

Capital. Ellinghaus our Williams with question And from comes Chris first Instructions]. [Operator

a on -- I of Steve, get things. couple a clarifications can couple

is was You million, the O&M. mentioned, settlement? $X.X $X.X from to million I adder charge Hells That Canyon after an presume, the the amount tax from

charge. pretax a That's

Yes, the $X.X million pretax? is

Yes, pretax, yes.

happened What the from X-K? to the was $X.X that Okay. million

AFUDC? [Indiscernible]

Hells talking you there's -- Canyon. Are two or AFUDC impacted just from were that the portions whole

X-K pretax the be in quarter? the fourth from $X.X said Just a recollection, there my will expense million

costs Yes. included that estimate just It's set and think I it some aside. that and specifically an were O&M

$X that get two the So I to believe, million. it's portions,

Okay.

$X.X You million with go the pretax?

It's $X total recall. as million I roughly in

-- Okay. What was was item. another the there

something about were was you offset catch said after right quite an talking that, what there about. You didn't I

We items hadn't review related were funded year we that allowed past, we in along, $X.X basically, the and O&M as the we a by but a cost the that underwent also $X looked to management had the specifically been to expensed that those to been had that our we million And and were got the had program. this funds million, rider. disallowed, benefit take allowed positive and went labor roughly for in demand-side something is this at

So them all. replaced it

about And then quarter? $X reform was you in the a tax said million hit

effect real we the you to at be the was Yes. That Power, turn there adopted up on year, timing they most our, of had unprotected And part, needed corrected. the to the really, instance, tax corrected. just with differences, what for sure know, had do that in it was for that make to a guidance -- we the carry do items the balances. sort of balance have related and end trueing PCA Idaho of sheet mechanisms we taxes the and all to 'XX, and little time, for got When a But deferred as balances. as short our those within short-term -- don't many the reform

Right.

Okay.

terms where characterize hydro of How things versus standing little as were seem last this you talking goes, opposed are. far a bit couple time would be year? a of current versus in reservoirs your you that As to about snowpack

still aren't is it a reservoirs think good terms is we extremely the this very year have coming, as believe little Chris, alone care to into not normal, storage we I'll had looking the a reservoir early year strong but is in and it's needs a to give And it this my going we judge pretty of that the year the takes is probably strong, the it are snowpack very looking you're full it's that year a so good so sight and snowpack -- well. year, difference you're snowpack, while carryover I at of next as looking seeing that such all. is quite you that of last most I replenish the phenomenal really, problem and for

this Chris, is Darrel.

you in gave you, for on megawatt-hours, estimated X.X did Steve numbers million have. is which we which look to look -- megawatt-hours the shared that you the in numbers hydro did, snowpack that we the with this last we X.X million guidance and If gen actual the million X.X year at is

got So look in mainly of if that from up and is, we and we thing in that just today, that period. not big the you benefiting we're accumulation year carryover. midpoint dumping again, this of snow we're around ended snow night last another and off a number, so and where of the far And significant still

-- the out have of that's that, out we to two another say, of we accumulation help X.X megawatt-hours. enhance is we why megawatt-hours that slow, million that potential while still range snow I year there started million we would X.X have or month which continue So could to

as long -- time. reservoir in a really So we carryover said, there's -- we we are have and good we've better sit seen what today, than where but Steve

below normal? you were last remember slightly you you where Darrel, you to Do normal year relative said think snowpack-wise. I were

normal didn't that have bit year, a also year. year time. we carryover we quite didn't -- But but this that last reservoir above this at were have We last

we you've year's prior, whereas -- carryover. last you this of So last year from have benefiting have year's got snowpack, didn't the -- year the kind

you touch last look still our So -- at we we are still this can did we that's range, when year. what can we hydro generation -- why

Okay. One Darrel. more thing,

of running and maybe sort you where the load recently? that sort future the vis-à-vis really customer expectations might You're implications of this Are you some point thinking on the forecast terms in at pressure in your there's your of reflected IRP load most growth. that have high moment in growth at some about

look the a take low relates I growth long-term it there. IRP and think we that's to as on that the

are that a customer looking what we're it about those have near probably at year, see at those we last growth, and as And still where is. XXXX numbers term, we'll year, at This some XX-year numbers the when so But take and IRP we look -- And we gear our pretty are. you that reasonable, feel for still still the up at pretty start modify. -- for we positive and when IRP numbers, look But if the X%. those I X.X%. in X-year are they at pretty at good you think

that see talking So tell have provided I our would if at how at we'll we think -- a -- I X.X%. sales growing XX-K wait look continues in go. to on X.X%, it we're But demand peak it's the overall, and about you, retail you there, in we information growing

and So are numbers pretty we -- close customer on in growth our XXXX.

think I we X% on were forecasting what we're X.X% by pretty close. up number, that we're so of

Mr. Instructions]. Anderson, session for to today. the And question-and-answer the call turn back over [Operator will concludes I you. that

Thank Thank call on you. hope you IDACORP, for thanks appreciate all the afternoon. a were you, you. continued interest We this Thank have we great that and day. your Stephen. in And

participation. Thank This you conference. for concludes today's your

disconnect. may You now