IDACORP (IDA) 2 Nov 182018 Q3 Earnings call transcript

Welcome to IDACORP’s Third Quarter 2018 Earnings 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. Please go ahead.

Gary. Thanks,

be opened third and and on quarter XX-Q. slides markets website to our our we today’s call. The our supplement to both XXXX we’ll during website. today, We’ll the also those posted issued IDACORP’s Form call refer Before are to slides available the using earnings release

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

X, we and Treasurer. Steve shown President, Officer Keen, Financial on and As Chief today’s Senior Officer; Anderson, Slide have IDACORP’s and Executive call, on Vice Chief President Darrel

We after to and provide IDACORP’s and the were $X.XX, third any $X.XX share help year’s On of also our per updates. Darrel present X, quarter over Slide last we Steve per year-to-date you may quarter. financial other diluted share have quarterly individuals questions available results. earnings have XXXX answer an increase third

were per in share earnings For XXXX. XXXX, $X.XX, higher the than first months nine same diluted $X.XX the period of

will call to We to share. and guidance per a the estimate have range over XXXX I $X.XX our $X.XX earnings increased of diluted Steve. year full return

everyone. Thanks, Justin, afternoon, and good

another irrigation service a more customers growth return lot customer strong to impact reform solid our by normal new the combined quarter. There with a to of parts. and tax are led largely moving of area, have to Continued moving sales driven

class. sold Including related per area to change irrigation FCA, were X% volume portion $XX.X implemented than X%, cooling of usage new customer, cost Irrigation customer per June Residential made customer XXXX. I million customer related that the higher by decrease year income income of was and Slide dry other classes. pay An a added customer a increase X.X% higher to customers, the higher to for use Customer hour. a smaller the of per note tax million of lower, residential lower fixed period settlements primarily driver quarter. the retail primarily an year’s in revenues $X.X megawatt a will third the record per quarter. was table, offset reconciliation decreasing XXXX as X quarter generally fewer last growth residential per were $X.X down last compared residential customers hour third revenues use. than year. to of million Further revenues the walk XXXX residential in resulted per of was mix, sales you income Overall degree to the FCA, in the the revenues however, lower from related lower the very $X.X the in Residential using operating the service customer, days adjustment, as in million will to million. same of this was was were through X, rates operating usage So customer there to reform however, in which $X customers of by partially rates megawatt additional increase up or as usage mix. Lower in this that

annually rates on revenues, volumes. recent million retail wheeling about align from rate and Power’s increase related higher XX% to and to a as In of October XXXX, the resets with you’ll Idaho next to X in $X benefited transmission effective decreased see table, operating costs and volumes. addition these This changes income

differences for of of year related amortization maintenance $X.X costs. higher in $X.X primarily maintenance by million XXXX. led of $X.X last costs Excluding reform maintenance variable increase we $X.X employee-related expenses the Depreciation of operating to tax to was and distribution comparative million expense million range higher plants benefit over of labor regulatory due third increase non-cash year. transmission and and deferrals, in to the are million cost maintaining to quarter quarter, million an Higher than higher expense service. and $XXX due asset in periods of the these $X.X Despite full for maintenance to forecasted expense, our service and other million expense a was in million operating the the $XXX increased

the million amortization our recorded under $X a Idaho tax tax on revenue return. the deferred Idaho on incorporated in mainly drove from customers to XXXX sharing rate items year. $X.X income $X.X quarter an will based return million our regulatory filings relative to the rate to in is resulting current years stipulation. in of the $X.X Bridger IDACORP benefit customer decrease. reform benefits income exceed to from investments operating $XX relate remeasurements be table, XXXX. decreased its which to with moving the line remeasurement of million. the $X.X to a related income change decrease the method against increase to provision Power’s this year-end anticipate earnings third IDACORP’s certain project third Finally, all XXXX We both relates million jurisdiction parts, tax and estimate to full quarter, refunded of million deferred the by a and consolidated related of the future relative roughly down and comparable Further costs, current taxes income annual settlement XXXX equity equity current XXXX rate company for income taxes the this return earnings as reductions impact sharing These revenues With in from to in on Tax increase in XX% tax a year or our tax related. that We the Coal last moved increased recent million This on timing reduction. Idaho the through investment full of be is to year’s

you in of to our charge XXXX recall, related As had $X this XX-K we million. roughly a

from approximately reform tax cash credit-related largely contribution required quarter. summer. impacts this final $XX.X last XXXX power net we The as related higher Idaho issuing tax accrued deferrals. on At and mostly equity estimated do well the received the remaining as income through weather flows Slide had net lower deferred changes not we anticipate As increased operating normal as investment-grade shows on as equity payments, sheet, cost we until Power’s additional tax no facilities the than of our through including our taking for benefit The early Slide liquidity Cash the Because working contribution tax strong cash statutory related XXXX reform delayed amounts rate. tax in updated. in the IDACORP Idaho certainty liquidity and operations The Power respectively before receivables along of time, other positions, cautiously the well and financial On continue adjustment-related September and ratings. of from outcome changes with of metrics year and the the taxes that and positive bottom is largest available operating the to help received sound from show entries maintain under this is Sector-wide flows, were compensation to were $XX.X X, income evaluated, IDACORP’s to discussions the more monitored in Overall, for our XXXX. liquidity were advantage to increased end XXXX, offset regulatory and that taxes not XXXX full industry credit recur. decision income to contributions in year’s end of and concerns the minimum updated XXXX. we this million balance timing be IDACORP’s due shown as remeasurement relates million earnings Power’s taxes included X Slide lower, flow million, capital able IDACORP’s third impact our Idaho than and key Idaho $XX.X million expected X. of pension $XX to was settlement year to and from credit of to utility pension relative plans. by IDACORP’s higher Power’s as about impacts return. were and we guidance

future guidance $X assumptions Idaho expenditures results capital remind range range Current that earnings this for and reaffirm generation any of this using the expectation flat three again, and our through straight to XXXX, year. $XXX million maintenance of reaffirm can megawatt that the guidance of turn million diluted XXXX. expect last that, the quarter $X.XX hours. to Darrel. of $XX share for expectation reflect allows our XXth year X.X normal once I’ll in conditions be it earnings Based tightened million guidance million full on includes consecutive performance Xth per year customers. our hydroelectric suggest for It avoid We expenses, growth. increase strong relatively We also to our a our Our weather and and achieve operating to of over to the guidance, preserving the to you IDACORP us million year $XXX With to, conditions for This quarters we additional share. to, to actual between of ADITC first the also X includes the range change again, with million years. $X.XX

everyone drive sounds Thanks, very IDACORP continued today. thanks, quarter for to The day. a being guys and call higher residential in you It Steve, new continue the and had Power Idaho have and third loads. the on customers business as growth for busy like trend

progress guide Boardman the addition in path saw outcomes productive also our Hemingway to We regulatory to that the transmission on forward. project

the the our growth customers strategy, X, are both strong at over and We Slide efforts. from months. are benefiting executing our we on see our and last customer remains XX X.X% shareholders On business

service articles booming earn We Boise regions are food America’s I processing additional as examples. a plentiful onto Our recognition to and jobs in system saw and Last our load load projected customers continues boomtowns. a told desirable well biggest Burley, live NewCold’s cold as you of provide next to America’s listing in is cities, recent XX plans included work. of quarter, over business CNBC couple of MagnifyMoney bring activity to one as where and national to is the facility and couple most Idaho. area year growth large storage about last build years. I’ll to over in economic

their to reported, storage up region. project the is in a The support additional XXX,XXX and property As $XX by of has area the to support million airport XXXX. facility be Idaho is food surrounding to the facility facility new processors XX fall an on completed expected to cite Pocatello chosen and cold square-foot, full-time farmers to jobs expected

Our we broken chosen new facility pleased customer, wide, existing the storage in Idaho. are cold Idaho’s our agricultural business XX-story, in that has Act these cold will in demand locate Food expected nation latest and further understanding their highly Simplot, and area. service its increased storage utilizing These new prospects these growers facilities are be customers to The existing storage in ground that facilities the has cold Modernization for It areas. food automated, producers have and our to is enhance for Safety technology. Caldwell, operation for fertile

exceeding the to facility new two jobs. broke According Technology, third buildings. to fabrication grown employed, area manufacturing curve. in service recently X.X%, its Power and gross quarter which expected now The an in a area. up service end record. the is in to has to addition to expand new construction company this service Premier operations people within in Idaho within domestic on expanding time our with X.X% is area to example Another Power Employment the existing predicted Blackfoot, nationally. Power Moody’s Idaho, compared Idaho manufacturing welding in in based additional grow last growth is region a to Compared product Blackfoot, Idaho XXXX. engineering, a remains has The new of expansion existing to XXX,XXX X.X% X.X% year, at forecast, company was on its in employment ground chosen XXX at latest Unemployment and create vertically-integrated footprint area a positive

of the growth Now another increased turning or a share of form our with X. from Shareholders share when from This to $X.XX per increase by growth. increases $X.XX $X.XX per approved increase, to continuing to the Board of benefit the XXX% IDACORP’s quarterly since September, in dividend. a In board XXXX, in Slide earnings X.X% increase approved dividend dividends. Directors are combined represents

annual briefly future between upper stated ratio or general the combined look growth, next board That look did all case. of we next the significant general of roles productive target effective XX XX% XX remains to expenses, rate need want to remain of with recommend increases months. of Oregon in Idaho XX% true earnings. and increases not X% in and our the in played at I to as management case Steady of we the that of timing to last next cases. the number as load outcomes a rate near file expect operating general we to We I sustainable IDACORP and or payout today more quarter regulatory of address end rate months. plan at the customers,

Energy or permitting ODOE, milestone or to milestone, the as announced a early positive the major for and Council, Siting BXH ready draft for Transmission expected proposed Power’s Facility XX. project Oregon the The is or The Boardman as application of recommendation certificate another of This site XXXX. is for indicator complete review and order, forward. Slide process for Hemingway Idaho Department State EFSC. the recently Line a Project, Energy, to Turning next the major in is milestone significant moving BXH, to and received Oregon’s

status the construction Idaho the transmission in ongoing Given activities anticipated expects for Power of date be XXXX and end the to beyond. the or line service the permitting period,

to on take at like XX. Slide would look I Next, a weather

presented projected power and is weather outlook I warmer including to conditions Earlier July are changes period an earnings a news in volatility actively and promotion. discussed, resource The reservoir award Steve, management of healthy efficiency its third calls organization energy from mild our August may this through a any comparatively associated costs. relatively our Governor customers, risk The conditions. energy requirements factors, adjustment program behalf happy was company to in State weather a total mix and call that January as conditions. we for a And reminder, resource Governor’s good weather the this and we the favorable Steve reduces organization particular. Power dry efficiency programs. this drier considers to an supply year several implementation be mechanism have. related quarter the As Idaho for On I about that week, our at experienced our all with with the want to close manage conditions. programs. Award the and a during with November beginning Idaho I in our to We that accept in that, cost comment our Idaho power on with with demonstrates energy honors questions commitment employees and robust ongoing carryover both programming, basis that answer proud and Oregon with Energy in for of the Excellence water of and others of award The recognizes to on and to the Efficiency. efficiency long-term you And will levels commitment

and America Instructions] question Julien to with comes the Ladies you. [Operator Bank Lynch. ahead. Please Dumoulin-Smith from Our begin Merrill we’re go ready first session. of Thank question-and-answer gentlemen,

good morning. bit little I X.X% to any be just better. moving clarify bit the to should other how was Hey, be some or miners the number update, versus about seeing thinking other offsets you IRP of respect that we that a pieces? candidly Are might X.X% it a I growth. XXXX. Bitcoin can the With any maybe in there thinking you are suppose, and little

relates it – Julien, Darrel. is As this

it X.X%; near peak, years, for growth the we to retail the the And in we’re take X.X%. look we a relates have term that the – you obviously, using – to assumptions, at IRP are are using as sales five So XX for long-term. over

we Bitcoin it. well folks, as dried we marketplace, referenced and as in pretty crypto, about lot saw and will miners up You cryptocurrency actually seen of I the you, that but before, interest is tell we’ve talk a the Bitcoin

sustainable had of lot long-term Bitcoin some hasn’t the reasons. point some But begin to sustainability different lot the when – and of from and thought this probably the what to we respectively, look at growth. was have a others X.X%, in of to crypto blockchain that’s materialized really on we we Now of the X.X% the based we with. sure that still heard – really have crypto region at and that for really or the We a so but markets coming cautious and weren’t We begin with. the interest, be

And so news about side to businesses these the I we’ve I the side so talked the things focused manufacturing that the sustainable with technical the that factor dairy of don’t been processing, in that in. good and more really things, think of numbers more have things. food factor we’ve is, These the and respect been, on

those that’s numbers focused growth on. So really what are

Julien, XX% this at that we so – is then Steve. moving five-year on were the increase. not And to a XX%, X.X%, as I about that’s growth quite from too, up would a it’s X.X% retail just actual say, you number. looked

So use it the have there and do if year, then be first a be so But for in a over shape didn’t earlier. change that years. you increments get and different that, five, to come the it one we those little to of a going years, every out change XX we higher necessarily that exactly we could could

probably the people a you we getting near-term, and period I And a – the the been as think and more I Idaho know a but of necessarily time. in marketplace relatively will for what’s bit reasons. just sure has on look discovered, – have is, thing think, years, to we’re when people on the – what’s I happen intelligence for – And lot I going that’s over years, little part, at XX know long we tell have of think, have a do you coming here sure we that know, different the other XX lot of we really we going one in you, versus

as And X.X% growth a much obviously, really earlier, positive in-migration smaller so going an residences side see customer are has where we it’s they as efficient appliances, more I message, going we is how and the The they efficiency, this on of footprints live. use? and is still think, growth just of that, question to strong. be, impact, side customer and the had Energy to juice people see noted

play. those all come so And things into

out despite a those message. think, all to strong I the still number X.X% there have things, So it’s pretty

Got it.

sure In let make appropriately. better between suggesting and of lines that than years the that might me five-year just fact, a you conservative I’m X.X% Are reading might be this be of view? the kind the kind near

that but it’s someone number when usually whether or not exactly projections, it’s five seldom Moody’s I’m a other the on curve, it IRP, at look a else, is basing flat years. for we

IRP, use use the – of they inputs over in And that periods so time. we these are

come those that – the actually and up stronger to you years. amount it it’s went we factor It’s the both we’re five but that as in every use that in fact from early one So standpoint. are said, years Darrel the have may of – them exactly a XX, not of in

perspective. good So from thing that’s a our

believe how other of investment. units capital? lower around that? that you still broadly? And plant the you Got side million spend of then by to or you rate of are likely of thinking Are XXXX. end do a about of about acceleration to more life the it. scrubbers at you something returning think more Bridger run have at How merits I give replace $XXX like to And take the capital than

we’re now an Julien, partners. ongoing having our that’s Bridger, right So conversation with

resource customers, to going interest interest headed. tied with best best in staying for our are to along partners in look the our portfolio, at we’re the our what’s where So what’s for

to – now there, as just as right unfolds, subsequent is ultimate So you to course you that – we’re the I will determine tell right and working but opportunity I But now, can that’s share tell partners to conversations, there. calls. going ongoing have we of be will action can with what we all our that the closely in

units are best scrubbed, scrubbed, we’re aren’t As you go – what and is the But of got we’ve of we two know, as two as... the units course assessing the forward.

line There’s approval sorry. a for – time

February, would opportunity then. just would we to we have I have say in call And year-end – say give when when I an likely update we’ll our call, you have this an

the in in from satisfied stuff Boardman quick that on me of good to some of the out you terms done execution here. the Last milestones of quarter political far? the cetera? the successes, just of are Or you’re Anything get of et given elections, the year, by thus Hemingway, to changes in the one pretty achieved keen terms end

of Well, that middle we’re the process in now.

it political a it’s process perspective, relates as from more the standpoint Oregon. in So to

are early an is XXXX. – we’re We expecting sometime decision hoping there exact by

an am sure it’s the because it’s within should I to agencies, agency So not – working the the on now elections impact that process. have

we – the trust now, right that that’s I think have process I now. think And to pace. moving So as stand we right on where it’s given stands we’re it confident

Thank you I’ll All there. it Excellent. leave all very right, much.

Julien. Thanks,

Julien. Thanks,

The comes with Paul ahead. next Please KeyBanc. from Ridzon question go

afternoon. Good

Paul. Hey,

Hi, Paul.

I what said the case just missed outlook. Could of Darrell, kind that? you about repeat rate you

Yes.

we have that. try And we business, don’t continue we have place everything that helps other are can in we’ve we’re to next been continued as our going general are either And have a look case us to. have As about the do see growth plans here that Idaho – to to continue to to the successful management rate cost going coming. to we that that Those that’s we and we drive for we to on, mechanisms on and that’s Oregon. as on. go really forward horizon, in or talked to sit the manage XX months, in we Steve not things look don’t load two file no if today, that based manage

reminder, Idaho, basically. a And process to then in remember, remind so as just it’s today, don’t process expect to we the a do regulatory seven-month horizon look on have that as next in And a XX so – our that, months. we the

that we year just filed that’s a months now, something and So from were before likely about we let’s change. a now from if a haven’t out we in say, see – hypothetically to you file year think rate XX basically

from And typically practical mid-year. standpoint, file you a

So least not can mid-XXXX? case rate thinking at about you’re until that we a assume

now, our with fast – power right. always hard what I’m at we of the because X you the months on schedule plans up, guess, when What change just you’re need. sort synced that it generally But and determine filings generally supply costs, know going scheduled cases, our we the would noticed based historically, we’ve – not to look but done say well have I needs take – have that right in price around would June and that’s was XX place a for no up next so so but it those a and is we’re as we Langley relates to as to are similarly you’ve idea. going that’s adjust

only It you. Thank my was question.

Thanks, Paul.

Paul. Thanks,

Mr. Anderson, concludes That back will turn for you. today. conference the Instructions] to question-and-answer I session our [Operator

you we had know day. hectic many Thank great thank and you Well, conference very you you, thanks, of support IDACORP. have participating. forward this month for all We at continued everybody, day. to and in San we And later thank the your in much. your for you’ve you seeing a hope of to Francisco, look financial guys rest like We’d a

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

now may disconnect. You