IDACORP (IDA) 23 Feb 192018 Q4 Earnings call transcript

Welcome to IDACORP's Fourth Quarter and Year-end 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.

Allison. Thanks,

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

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

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

We after to and provide results. and over share were XXXX any of per help year's On decrease also our $X.XX updates. Darrel present X, fourth share Slide last we Steve earnings full you may quarter. year other per diluted have quarterly individuals questions available financial quarter have IDACORP's answer $X.XX, a fourth

$X.XX share $X.XX, diluted For per higher the the same full XXXX, year in were than period XXXX. earnings

X.X% opening in year call now per share, the of over will $X.XX range Steve. our our turn diluted initiated in guidance full roughly is to $X.XX have earnings XXXX I the estimate guidance We XXXX. which and above

our will walk return normal an this Strong Slide of consecutive company. which $XX.X transmission I and using for usage XXth X however, million IDACORP. degree Slide million. XXXX unprecedented added Overall achievement customer you sales, XXXX's very from to were shows income X% year of summer now cooling tax-related benefits growth Thanks, decreased degree reconciliation higher everyone. all operating and earnings lower welcome, income for X.X% XXXX Residential of to our contributed than more growth and by wheeling and accomplishment, irrigation through usage customer, Justin, days heating was to to operating in and there income fewer as $X.X in hot X. XXXX. Customer customer winter. is per by XXXX cold growth per

which cost will you $XX.X residential use. revenues table, lower increase note mostly offset fixed in related million the on residential to Next adjustment of the customers, an primarily

customers approximately we cycle the XX. in May to the higher and savings customer tax June In per general additional addition, Variations June began cost-adjustment power million well PCA will from over year resulted reductions was impacts until from through more starting each Idaho in consisted retail usage returned customers the revenues These bills normal a to irrigation as customer lower of of sales rates level. X% million irrigation customer each reform million which spans cycle of primarily returned XX-K, hour. amortization differences $XX million $XX.X Lower decrease in tax tax Form also table year, deferrals the a in in they as reductions customer expect from further years. per customers $XX megawatt the X through see rate expected mix reform. explained next $X are relates regulatory to case. in to Idaho the these noncash are our down The An over benefit decreases drier benefits between of as to to settle to XXXX. reform X

access decreased open variables. changes, annually a XX% from revenues, these reset wheeling and operating in related extent, rates In and, $XX.X to Wheeling lesser changes Idaho Power's benefited to with changes, income including or volumes. about tariff to million these transmission October a to on OATT rates retail align XXXX, addition increase X,

to we OATT continue rate could will in positive a activities as transmission changes renewable us, the the cautiously but be watch for updates with develop ahead, market. Looking energy and

compared and Excluding expense, distribution million Higher led of to reform-related benefit higher $X.X expenses. a prior increase an $XX.X variable $X and tax in amortization labor higher employee-related deferrals, noncash million other in year. and was led million costs to maintenance service transmission maintenance asset and the maintenance expense operating regulatory expense in the costs increase $X.X million XXXX with

the for in planning benefit to and currently change labor not are majority of recur the We XXXX.

are So despite revenue of above maintenance all XXXX The level items, sharing. years. including reductions, the and rate the income X to prior previous relatively to expecting these modestly flat operating by of only decreased operating we expenses $XX.X results increases, be million these

Finally, reduction exceeding expected $X on customers revenues XXXX. is based effect of This the full XXXX June recorded Idaho year XX%. Power a refunded through rate million take return to equity in jurisdiction provision on Idaho a to to as in against year-end sharing be

to relates change make-whole for income as in deferred the sharing. been share have customer in customers, customers and reduction $XX impact the sharing approximate benefits earnings to income by to tax $XXX deferred higher customer of have income the to as million taxes The million redemption well to than $X added the $X revenue would an of XXXX $X.X million relative able reform income adjustment early premium to $XX the in operating taxes, revenue more now the Tax obligations of XXXX. in XXXX Power's support pension including tax return, Idaho We the and decreased Idaho temporary mechanism on the bond reductions both has from differences million than rates remeasurement tax income of without and their been earnings. an rate since remeasurement with place. due million of million in XXXX income tax been which

recorded that related roughly XXXX. we recall may of a million remeasurements to in charge You $X

We tax events Power recorded largely flow-through XXXX. related occurred expect that last do first not a recur million Idaho The benefit rates. in early to statutory tax premium taxes redemption In make-whole $XX.X lower to lower, related half to $X.X were income million these year. a an remaining the for bond of during addition,

On income Idaho assumes in continued Overall, than the million varies last we some flows the extent pro risks payments. when respectively, along with quarter, and credit and show liquidity IDACORP's and tax forma from receipts expense higher cash settled to including As benefits Idaho the sheet, $XX.X end working balances sound both increased IDACORP's Slide IDACORP positions due strong XXXX, and operating we maintain XXXX. tax investment-grade to million rating X, from with capital of of mostly net indicated Power regulatory approximately December the last million and and IDACORP $XX compared of our to flow to as reform income the operations level the agreed actual year. $XX Power's Cash higher net liquidity. were, proceeding. the and timing of

credit shows expect bottom available the to a operating timing forward, more more is look in under relatively changes XXXX compensation to operating capital we earnings this first X normal nominal The key the not that XXXX. related year liquidity other of under X. balances estimated equity guidance Slide on amounts of will additional At metrics do than Slide plans. cash and our anticipate return mechanisms cash of the a and flows Power's return financial flows time, facilities the forecasted any combination regulatory to for Going and the we normal and currently Idaho level. IDACORP's working at shown issuing full in

the in in preserved the guidance of earnings We $XX $X.XX Idaho includes expectation full Remember be that less share. mechanism. is expect $X IDACORP's ADITC additional million per than XXXX of diluted has to million XXXX. the under been to future available years $X.XX range for to and use our This

to expenses We should higher far range of with Weather And expect be IDACORP's X.X million conditions $XXX forecast in between to slightly we hours. $XXX reservoir capital $XXX than be forecast XXXX suggest and generation lower range of XXXX, the and in with expenditures a million the operating storage X.X million that to be in current million. slightly million. so hydroelectric and $XXX million also maintenance megawatt combined to

our forward. With to conditions that, Darrel. guidance going reflect I'll presentation the over weather As turn always, normal assumptions

thanks Thanks for you want all going my a have to guys I for you to know a I Steve. growth begin with add of lot once want to to call. again being I Idaho Power. continued remarks on on. today's my nod

that months. driving at steady combined a see up to customers is as our the XXXX. you company, which customer to sales on strategy, This Milken clip, coming assertion moved This and for are our and of XX places execution trend, up increased New on business strong and On assets into growth at Slide remains initiatives XX to to on low are fair X the cost have living, XXXX price the driving City to direct of cities cities. the among business the cost list supports since energy, ties Milken, number Institute's best-performing in biggest last we head X.X% higher customers several our Boise major year's shareholders growth X, will loads. job growth. survey. affordable X list continues with contributing of our on the service our both growth over According which progress past and our Boise's benefit area is moving of and Boise

emissions diverse energy clean, is prices source attract XX% nation customers. makes of for portfolio which comes Power's in lowest Idaho new also Nearly reducing reliable help the carbon from that helping We a our the our energy plants, our customers. hydroelectric stable, find business energy while providing and among

believe that of percentage the United the row, in year second service most Lines recently in We Census in Idaho State the country. nation. Idaho Bureau the published the For stated of occurred had rate that moves growth Idaho third-highest in December Power area. United that fastest had the Van in inbound of a has States growth the

time remains processing growth large X.X%, and the include gross employment X.X% new cited also and record. at now Mexican in in in several in of business nearly Power latest operation past, processing XXXX of within center Power state-of-the-art compared within projects in potato favorable that quarter conditions, Union's have has and service Sticking in the and Unemployment Foods' the new Fresca XXX,XXX Moody's X.X% Moody's Compared grow during end region data Pocatello. states notable area to fourth in grown service area with domestic Idaho service predicted XXXX. forecast area Idaho Power Burley, forecast with came upward in a These area. product Idaho Idaho Employment XXXX new Foods' is load facility was Credit Idaho online in with theme Caldwell X.X% McCain nationally. Central trend. our new on X.X% Power this We people year, an service employed, last the

to a the spread are or to you service moving of at our not area. several and just as see that we need customer in one see the play I file new we and rate you our continue geographic the operations area. particular base, mentioned, If XX quarter significant across look expect next a today expanding growth that were small, instead, outcomes would begin to of general considering as effective all That to remains of who stated last map our within Oregon growth in case. projects area well, I increases interest are There next is locations and roles that in or our is isolated from XX in large businesses and at to months. to service XXXX that but look regulatory with months. management plan combined we the our expenses case timing as Idaho upcoming look not true we operating we load at rate did Steady general constructive

a Hells to the Slide reintroduction reached when late above salmon dam. over and into of the and milestone XXXX, the of relicensing proposed on Idaho we agreed spring In Oregon to Oxbow River Chinook States Canyon steelhead XX. Snake Complex Turning settlement important an

in license agreement our this remove achieving Hells significant a hydroelectric X federal long-term new dams We for expect Canyon. a will obstacle towards

the over company for key of the an federal components stream settlement, improvements, the of term Clean Act. our Water $XX million additional meeting part to our license spend As under research, the and water obligations quality total committed of

and before Regulatory we expect While federal a significant to required, Energy XXXX. not achievement, are receive from Federal a several governmental still license do Commission the new approvals

geotechnical of line investigation update Boardman brief the continues the to in or the of draft forward. by Idaho to followed Transmission this anticipates date than Oregon project Department a which Energy proposed BXH, a no in-service quarter to year earlier move we to Power but early in second XXXX, issue to this Line order for expect Hemingway the Moving XXXX. be on

the While be have continue to that resource for the we before to BXH the will energy published, we cleaner a a Resource future supporting months still believe is valuable to prove Integrated region. few project XXXX Plan

Atmospheric on Projections the weather below above of Slide chance normal in for National from normal the to slightly temperatures XX. Administration chances calls Turning above of precipitation months. levels equal Oceanic as today or and X next and warmer

service that a that Given of story are most this say our forecasted week would develop. across area, seeing snow is we continues the for next to I

recent the above-normal of With snow, Payette in levels. in the to storage precipitation Snake, Boise systems rain reservoir the upper form and recently and move

conditions. men As changes I in related in and supply and what to resource weather Eastern Oregon in of been Oregon these on with our lights significantly mechanisms have some conditions. the both the reduced costs. same and There want our weather cost-adjustment experienced volatility the keep shout-out to a and who throughout has power power and we country, trying reminder, can close Idaho here be to mix a crazy very some Idaho women associated during earnings

challenged Over we the last the have seen times, that, has frigid operations. temperatures snowfall service across and significant area at month,

have for be been conditions. committed the have. on I proud our happy customers people, of you with am a dedicated and that, such to have up work to Steve of regardless people opportunity group I are others serving questions will the Our who challenge. safely and answer the call may With to to

from Bank America. [Operator today Instructions] Julien Our of first will question Dumoulin-Smith come of

to in for I just ask This about rate cases. Julien. wanted Morgan calling is Alex

So that you to commitment benefits good environment. and have strong a at and you've structures very you a operating clear and constructive keeping see flat, growth costs, through a job number it's regulatory done of cost load your managing

drive Given of the could not actually And sense rate in next back for one? that is would a in XX when you mentioned a months, you're what case possibly going be? there for this you

Tim need where now good the which as little on of of me, year, This said let going I is we number Tatum, and factors, XXXX. this number up that, this at managing bit last regulatory that our about got we've I So don't a as we the growth, to heads first and But go is biggest in don't look expenses. our years, constantly we We're reoccur that associated done one Steve growth in We've costs of one, Darrel. strong group with comments all, in time. XXXX. us. the with of we expenses start to I'll were on labor our a has some variable been to part job we've of said, over and why on key drivers that have at the also look our, feel expect for who also with all something right we is The to what's talked file. really my this number of assess, a had increase and

the so relatively for from X expense flat. an adjusting last that, if And years it's you perspective look after over

the spend manage program, spend this we also growth. safe again continue as and meet so, a to need and in for our to to ensure what we our is on part system order and that of reliable capital continue to And and we other

and look or So file. totality have all in to makes whether go in it sense and at determine of to not factors we those

months, look first on And we it update but assess of the take landscape will so end to all and as next do to will we it's, said, that, the on for continue quarter at there. we're so at we not a depending that the planning the you XX and

that, issue where have though is lose over too, in instance provided for cases. issues cost return done to, we've last years, you sight the settlement there to one regulatory of, and of had thing you other one-off some specific fact off it couple filings and can't of the address a The the did in that case one-off Valmy case. some has We recovery a those

of And we beyond can, then we look we and at sort holistically things one-off picked where so it those that.

we you the you Tim, when had can't we the be update fact next doing it, are would that we you to if call, right just for we be? anything told now. would planning what one not now. that one I we're is going But add. XX I the will, So, tell have next to And months. next we inclined, When And

Nothing to more add.

Okay. Hopefully. That's level high helpful at a least from perspective.

Definitely. Thank you much. so

Our will of ahead. Ridzon next go Please question come from Paul KeyBanc.

we in in pickup EIM? were What do you that, Is had prices know, afternoon. is still down, volumes? a from wheeling benefit drove have Good that but that, the the that? what's I dynamic

my the on that of came picked of it prior head, had remember on two we but in only that the few year, last XX% increase strong there, about increase, but we have large, don't There up was regardless, things I a rate guess a certainly for top that, months the at there's was volumes October. It is impact the through is, year. XX%, pretty number about a would start really, sure I stayed weren't volumes, an the year, whether the that

influenced I So causing big is think, I think about we're that lift. to mentioned went that where XX% renewables changing now that script, to again. And place a move from do there's lot It more need I rate that. in my October. activity pretty watching one another, nature was dropping to close. lot this the a that of has is down down power that The with market

just we so EIM mentioned, under either. an you are a rolls a volumes year forward, on out, full is of take what just belt, game it it balance rates. EIM, account going prior they to into rates a but our old don't guessing have the bit happened the what and As in relative of the we did do And year as to get

another And little if that's to other us. I the things system is go drove year. years. that strong was place time there our on, impact course that will coming a But that not us too, few of power in give could we what we occasional predict should think peaks maybe clarity But a activities, certainly move and better that so some much. do have in of bizarre will So more a was that, a job it

what flat revenues. And guidance does kind assume of

modest the do looked think, and I with pretty yeah, the in close. I to prior take approach What would didn't we probably I at we low use current Well, and, year cautious higher. I is take that it higher it this say word that, around year run way think

I kind hold. of it's think you as

I in looked to increase may think it, we we didn't price, expected the at we be We volumes price lower have a volumes, pulled with lot a truthful. slight a with down. but do

the out and over annual last true-up at or... volumes more of kind widgets To year's spreads looks

It's really a cost.

true-up I'm doing not to related happening it's amount against consider this, explain maybe your think of you one I a equipment somewhat a the that you to better... give cost to perfect the just of the of but sales that's

of the costs toward portion a cost the and load takes of the point-to-point it at are what rate. remaining out system, Looked and maintaining into portion goes transition those then the a

they're cost. get So back, credited that as revenues you against back

rate revenues good the a you reduced that year. you year, cost. a from may have those The following get lower off So year, year really X previous because total that of have

for in any an 'XX? what rate tax for guidance to look on effective And

a... have you Gene,

Low teens.

Gene's is teens, what low -- Yes, saying. Gene

The Khan will of come next question Verition. from Ashar

was now million right, the on just gives think I know huge basis. around I $XXX million, CapEx, million, and if I'm million you, $XXX and million, if your was $XXX I run like balance million. running $XXX of operating I that you million. of perspective it's I'm And looking do $XXX dividends XX-K, at year about -- very have right, you Can $XXX flow, you like good over cash and you million. cash a normalized flow $XXX of if so rate is this $XXX And a But ask the was I cash a mentioned very looking just

seems it extra cash in and cash you're So this cow position, lying very like around. have a you

get what's dividend something me And or tell of just use the you cash? some special this kind can't a we can of that? like So why

you borrow with Well, -- O&M. X have see out a tend next use back X that kind year, to if the aligned we some -- is to can cash years Ashar, fund will will of then type. additional you a of refinancing look in it's we typically what typically pull will But construction years, and you'll of and few we we and

the last And it year. the being some that more so year away to from refer there's the operations. not liquidity we for gone it started use of from We just year. in we're I all our We up than didn't -- adjustments and April. more a we the end that, brought by the instance, in discussion didn't And ins normal to believe in reform out. tax some

Some of January. benefits started the in

out So that's jumps down there's in back and PCA and to be continue come it following been year. back cash then over settles the to has actually around that XX. year the the paid I believe

and the that with the to earnings line cash up And it thing. does tend So of always sort true-up. doesn't

as So the don't balance, have minute, basic operations. out walk need look could and that at we dollars it's cash we I you we to this not probably going right there flexibility see don't And just -- our lay all that. for but I through we're guess, to sit

cash can This operations? give your high, me You mentioned it's But flow normalized million. right? you -- is year, you from this year, very Yes. what $XXX got

are your million. $XXX your dividend needs mentioned, I As and CapEx needs,

$XXX got XXXX. your million cash you operations extra this year from So of in

huge to -- borrowing to nothing a this So just that's produced flow business with what cash of that. got more the year. or do That's like it than anything do amount nothing consumed that's got

understand gets that? on how you CFO Can run year? to rate what a used of trying is up. normal for that And And the so I'm elaborate

last which, year additional we million $XXX in fund said, activities the borrow did in, or I intended is We to XXXX. cash of and as year, this have and this roughly year

your on a until all the we XXXX really more to and go the lines were, that And would out then wait where... negative it's somewhat into respected actually even rating if old rather you from perspective, a you're and of really keep in arrears. cash, would short-term and undrawn matter ahead agency finance. a because in we days, we you finance that's utilities And XXXX rang fairly used we lot of, of than So

why understand with that. $XXX Steve, But I by Are that's your balance million up $XXX cash No, went not like me? Because... you million. but

they're guess, we'll that on get It's I we not, timing back. do go not bound into think the to reform permanent was But items that. a seeing X all if into to a wouldn't year money don't so from have wouldn't, some and year lined gone, policy are us see strong some only Ashar, amounts. we're tax doesn't I need that out as dividend drive our But And a details, the PCA up the to that I it I that the changes we come or is I really borrow change. there give of think I mean, be would what what and playing a seeing. you're have and year, anywhere. away think of go are the new we we're and additional seeing

on that. wanted get average feedback a I'll of any I to better would okay. is CFO appreciate okay, follow-up number sense Okay, a for what offline. year. I an

more year. the regulatory little see Well, bit we a it that goal. year company. It's I just is accumulated it was to been the grow our that's has with cash. mechanism-related keep And drain again to It's mostly it over next not this a down that flat. mean, you're to going growing. have It

next will from Our Williams of come Ellinghaus question Chris Capital.

midpoint's pension? Is like that more looks us O&M It Keen, your on Mr. some give can of million. about detail down $XX expectations? the part you

really, back primarily to that as we to a Darrel were was and more think kind we going It run mentioned, higher a that of down rate. some that are costs levelized to settle No. payroll had related benefits

look really of you our compared we're last to uptake If X.X%. about what an projecting year, at number is

to that close said consistent don't can. we that's are completely I flat perpetuity, that as think we to and we what hold know as but is we aiming flat So, we can into with be

our be a we what can. predicting like forward go the aiming we'll for think O&M rise we're I So extent to something 'XX. is modest And in that for the on

year. correctly, Okay. filed the IRP that? If I When this gets is recall

Chris, this to is June. in Darrel. file expect that We would

Okay. direction other in were all? Does Darrel, data the you recent or you range your precipitation. at recent lead talking hydro about one

and yesterday long hard just looked with of all and the to given range forecast the on how around moving up precip that the we So showed. side way kind were on, things what

the it moving we could So so. I mean, of gave indication of span mean, the a think probably above went below land. we give normal normal that range you to fair we pretty does we're good where seeing, Again, in is we right XX a amount now. I from days or

key So it was, it's drainages. our been across a lot of over precip and all

now, right of also we've the the every how too, because So but sort is something of same of kind and so some that's the, beginning pretty is at range year move. fluid can wide, had like the the this it's I that pretty it of of much said range

give can color... And you little Okay. a us

just me you've the lot on too that that's it because could up heats is comes and of this a for thing, but really of you thing mention snow always And quickly, depends a necessarily. lot a off have it comes when it if I great hard and is water mean, let it not the us know off. lot you lot a this, Chris, we other other watched of how know

versus that water lot a warming of trend. if gradual a of flush have sort it's You way

sure. chance a as warmer So saw you from for charts those they're in potentially than really don't slightly know of you normal. today, projecting But, higher NOAA as of so

runs call a we healthy number. when So come it a it's of now, end on likely lot we're of where news range how is up. And the a hydrogen better again, But this right perspective it's timing pretty get we'll on again, that first having if if midpoint is, that off. probably of good how quarter little we sets have the

recent new the bit talk But customers can pipeline? talk Right. the in Can you you about about of little some that also you began operations. a what's mentioned

Actually call. to before info not good a sorts talked were kind of things. about we thought spot of those of right the we now. about in and customer those And Sensitivity talk we that really all

and we're it, as we to it. in the they position about come going from where talk So share we're a we online will. customers get to not if okay But

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

interest as all IDACORP. And this And Allison, a to questions the of out and call the may that that always, Thanks rest hope we our further afternoon. please you on call any participate to a have thank time Thanks, lot. free you We have. in feel great your for you with appreciate continued taking us absolutely day.

you today's and participation. concludes for conference, your That thank