IDACORP (IDA) 2 Aug 192019 Q2 Earnings call transcript

Welcome to IDACORP’s Second Quarter 2019 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 and Treasury.

everyone. welcome, and Carrie, Thanks,

be Before the to earnings issued posted our slides morning, and are today’s also available opened website both this on will The IDACORP’s XX-Q. XXXX corresponding we to out supplement our call and website. Form markets using second release quarter

during We slides the refer will those call. to

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

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

after also answer any have to have available Darrel Steve help and other provide may you We questions company updates. representatives

of our $X.XX year $X.XX range $X.XX, diluted of XXXX. earnings second our first a per were diluted financial estimate present IDACORP’s we $X.XX, we X, Slide months share On per XXXX decrease guidance six per results. quarter IDACORP’s for $X.XX first to diluted decrease $X.XX per XXXX quarterly Today, full year’s per quarter. last second XXXX over of raised of share. share earnings of months the a were share share over to six earnings also the the

call over now turn will I Steve. to the

have everyone. welcome, for our outlook and full improved Justin, we Thanks, quarter Despite year. some a the weather, good had challenging and

growth, annual Idaho X.X% partially lower growth resulting Power’s of has expenses strong performance the increase an rate over offset – This our with As weather with Power year’s from service only in cool Customer quarter, springtime last year. growth combined last earnings last Justin Idaho the decreases less revenues continued than area year-to-date, XX are along quarter mentioned, with first months. to wet and the conditions. the $X.XX in second

$XX.X Slide usage changes quarter reconciliation irrigation $X.X to our XXXX Turning year with sales, quarter in the customer the of by per growth income second of related mostly X, second million of income customer, to from quarter. decreased million. to starts Overall added the which operating to this operating

$X.X that customers. the and portion adjustment You usage to in see offsets an lower per most next cost relates of million revenues fixed on small general residential the increase can table customer which of of service

area last Boise and above for quarter normal the higher year. the in levels was Precipitation than XX% XX%

normal cooling the degree overall addition, below In XX% quarter XX% days less was XXXX. and than in during

decrease net in the of lower the to percentage greater amounts industrial we Next on by megawatt customers quarter’s decreased this items more sales lesser operating to settlement decreased as hour megawatt reform The income. a implementation a in customer classes. the tax expected June to To revenues the table, megawatt $XX.X net as stipulations quarter. a operating mix rate year’s changes income hour XXXX significantly per reflects with quarter $X revenues portion retail revenue year’s associated revenues These extent, the went reduced second retail in full on last X per sales ongoing per for million. million

XX% as October. or $X roughly Access Tariff declined wheeling-related million were the revenues rates Open Transmission last by about down Transmission XX%

remained revenue last relatively more saw the Wheeling quarter. year’s with volumes closely reset impacts. and As wheeling during second levels rates a align reminder, with annually consistent to cost we

hydro-generation O&M as income of income were included Idaho due XXXX million million largely decreased the $X.X otherwise quarter. table, projects $X.X tax and in Next of operating future primarily the decreased fewer at in regulatory liability last been year’s million that costs levels year variable related hydropower due to a to maintenance quarter related decrease $XX.X expenses over the in to costs, decrease second Labor of this second to deferrals items $X.X these locations benefit have other lower. quarter. $X.X a million reform noncash the O&M to Altogether, customers. and last would on of of amortization operating net million employee-related maintenance for of Other accruals

to more to Earnings $X.X Bridger earnings. Coal of quarter, a largely this resulting level from equity method in investments, consist of normal Company, a increase earnings which returned million

For year, and Power’s with second than line $X.X $X.X these were Idaho prior of years. million to earnings expect IDACORP’s Overall, last we lower the the respectively. and full be income quarter million year, net in

dividend sheets Power rating capital Idaho to payments. and to liquidity, IDACORP and us credit investment-grade including continue and fund ongoing strong maintain balance enabling expenditures sound

in Over has dividend in total increases dividend increase the the XXX% board a the the for years, several approved XXXX. of annualized past in September since

Board upper target continue annual expect of or of payout range and dividend more of XX% end X% to recommend dividend to our to increases Directors We of earnings. of to IDACORP between the sustainable XX% approach the

flows, on in facilities Slide XXXX X. partially issuing the than lower of $XX other cash X, not Power’s income, of from half operations of equity additional end million amounts first benefit show is working in time, and XXXX receipts the assets compensation in related anticipate and net under Slide of timing nominal and shown lower XXXX. than plan On with relatively timing we flows liabilities, as the available of this June we liquidity payments do of At by IDACORP’s and changes mostly to capital regulatory our along the positions Cash bottom The Idaho contributions. IDACORP’s the plans. changes approximately were operating liquidity offset credit under

performance of the we With date raised our shows to X the IDACORP’s the of $X.XX $XX guidance estimates. and earnings Idaho expected range of diluted guidance earnings be that ADITC years. per outlook Slide as $XXX updated range and to capital operating share, expenditures million and to stipulation million expectation XXXX we $XXX will million the financial full to our well and O&M have our continue financial our million future $X.XX to additional to expect our $XXX as year, of for key reaffirm metrics We XXXX year between $XXX for our full under balance million. preserve and regulatory

hydroelectric Our generation forecasts the now X range current X be reservoir megawatt suggest and million million stream that storage of should hours. in to flow

return As conditions. to weather always, assumptions our reflect normal a guidance

over turn I’ll that, Darrel. to the With presentation

on we today’s And Steve. Thanks, appreciate joining everyone us call.

lower the second quarter mild a quarter. in progress spring year’s. substantial remains the and with have made Still our last important to second during lead company to energy noted, track sales financial did on wet several we for year, on Steve targets the meet compared As the initiatives

X.X% we customer first XX increase rate at end strong noted of at the X.X% of over see that This X, remains months. quarter. is an the the a growth Slide On past from the growth

driver growth Power As service opportunities. area, in company a move benefits our new to continued Idaho The economic development and affordable customers from our energy our sales reliable, for remains increased further clean, key provides region. energy business

of growth large – square-foot $XX online during the projects including particularly in a robust by me, technology business continues Syngenta’s Boise. of Several Nampa, finalized facility Syngenta most in second expansion a manufacturing corn Corp and of North will pipeline million Boise excuse notable it large peaking west load. processing, American east work, winter be conversion in the production and quarter, and food came the customers, Power manage sectors. to Idaho of experience new potential load XXX,XXX trade will

energized southern and service for city the that new region treatment Oak of our wastewater a a area of significant expansion has also load We the been Valley facility in Dairy of large business. project major recipient a in the increase Jerome, a in for Burley

service later expect additional We beyond. year this begin commercial to and projects also taking

product of year, service Idaho in forecast upward remains an this Power now service our X.X% region employed, last record. at trend. predicts Moody’s area Compared has current area also time with growth in on employment X.X% X.X% and people within Power in Idaho domestic within Employment grown new with XXXX another XXX,XXX XXXX. gross

quarter the to risk potential of plan X.X% IRP. filed line needs. transmission over XX the per sources megawatts a a the company resource service or identifies XX-year next the Power per Unemployment current and service average capacity second an with compared in integrated X.X% XX,XXX area plan Idaho the the a XXXX year. resource energy meeting to is its load expects XXX to IRP by Hemingway of recently the Idaho energy reliability at average The more IRP decades, demand. Power With moving was needed nationally. cost, two than projected end to Boardman resources that customers company’s of preferred additional serve the increase needs examines growing to XX each year area new for grow kilovolt and year megawatts The our peak as and

The future entire of an resource This interconnection modeling first find was system to interconnection simulates conditions. use economic a portfolio. range a to long-term western to Idaho expansion XXXX system capacity IRP portfolios IRP resource Power’s optimized under model the identify system Western

modeling about software, an inquiries Power-specific modeling by there to perform used XXXX to concluded to was we the a optimize need filing Idaho IRP, After and methodology the the we system. IRP the had additional that

and currently simulations to now, from results modeling Power the the IRP Power-specific optimization Idaho expect information analysis So further filed system and is view. conducting additional XXXX and with we Idaho supplement

alter If additions additional with which the it could retirements. portfolio, results the could identified timing of and XXXX the modeling, in planned modify we the differences identify anticipated in significant resource associated the IRP preferred

to end the We updated expect October. have information by of

Hells Canyon to continues relicensing progress.

the certifications both regarding earlier Act there XXX in issued filed filed signed Oregon of court Several by the Water Idaho. been fixed XXX though following were in parties settlement no year. and lawsuits assets in Idaho certifications state Oregon challenges agreement related Clean the Section Section Our to this have states Federal

progress Commission actively and to FERC Power in or the or continues Canyon progress long-term a new Regulatory process relicensing license Energy obtaining for monitor Hells Idaho make will as continues. from relicensing beyond. We to continue pursue XXXX FERC to the Federal

and line Hemingway continues final site of The which of the forward. order milestones or to order proposal a the BXH next major a which year Department are proposed anticipate XXXX we certificate order move later draft issuance transmission issued we in XXXX. early a to in this also expect The or Oregon Energy Boardman and project May,

in Idaho we As I energy in goal our Power play XXX% planning have significant BXH as as well its XXXX to clean calls, by process. achieve previous a long-term on expect mentioned role helping IRP

plan I at next the stated file play XX all remains growth that general roles constructive regulatory Oregon we timing significant case in expenses true combined months. did in we XX need Idaho Steady and months. the a load last our next the case. look with or That to next look not management as base, customer our prudent quarter rate and in of general increases as we rate outcomes operating at today

X, Slide temperatures or of Oceanic current XX% the from equal chance the Atmospheric National to and head below the and present normal of Administration above summer we above and that levels normal fall. into XX% precipitation of projections as suggests chance a On remainder an for we

the earlier, Steve reservoir hydropower. storage provide for low-cost generation of indicated should As levels favorable conditions

power As in our to costs a our volatility greatly supply Oregon fluctuate earnings Idaho resource power cost adjustment and and related due mix mechanisms that changes significantly can in weather. reminder, associated to reduced

the for I Idaho recent and less mid-sized score among Residential Utility a Electric Customer among XXXX the Power results. We achieved wanted utilities places Satisfaction closing, acknowledge to J.D. our the utilities. top that nationally second record Power company In

emphasis to reliability, customers. our citizenship impacts corporate continued have positive and continues service of on price, in Our areas customer

be Steve you any questions happy and and that, call to I may on would others With the have. answer

from you. of question will Thank Capital. Instructions] Our [Operator first Williams come Chris Ellinghaus

are How you? guys. Hey,

Hey, you Chris. How are doing?

Chris. Hey,

said I million? and there the which you $XX impact the the the irrigation, expect would that you adjustments, million, with Steve, FCA look I FCA. Good. Can is was at $XX what irrigation if primarily think impute usage we like that’s something

the think year this. we majority it’s as of close kind taking was number, year, might and it normal. But been look at close if slightly like would thing The actually And the as is really to certainly is temperatures you about at but fairly be of we that, look been and yes. a a you get. one anticipated unique off I normal year. have this little a It’s up It’s to back close precip last weather that

at where look a of proxy, million, this so if that you that’s that And adjustment of portion XXX% are kind not decent off good a of it. we of but year, of $XX it’s

of… netting against thinking be would I FCA that Yes, was the Okay. sort

Yes.

piece either, counter FCA an it’s that pretty and yes, relates residential. need, to it’s but the XXX% You business, commercial close. the And small not small

million. of in you gives that of that an So the $XX what’s idea magnitude

take did you You close. that, is math the pretty

July’s like? it What Okay. weather was NOAA’s expectations? Did meet

heard exact, know I but… if know expectations it’s but don’t an hit NOAA I don’t – their I if

is Chris, warm as year We Darrel. were this as last in not July. this

last if riding – look – come of as so and of think than it not not pretty a a just XXs, but precip, we it’s it don’t couple just may But was days, normal. a It’s And as here year. sit the up we was as at high relates you triple-digit last next bit little as warm warm it So it XX have it was a from to lot you comparative tell on numbers I’ll was but we’re days the summer later year-over-year coming year. still be have basis, today, warm. I and we

– heating that electricity it’s good here So business. in the a trend

one it’s the the item like at comforting to as Chris, it Darrel if the, all wasn’t precipitation there’s a anything – was it, earlier. mentioned,

off was. So the don’t was irrigation, that the on we really season it’s we irrigation But had moves earlier it would does on. probably was didn’t taper think that as moist biggest that wetness I did that the still have thing but that how an impact going impacted It through. have

you Darrel, you in some mentioned was business Right. give the pipeline. of seeing? that about us color you’re there development any other of what sort sort Can

continues of companies have that the are are – from series actually I a actually look us as or now. entities them but be any may of that have actually to are new to generating I couple So online, I just energy I coming We’ve tell in pipeline. got taking pipeline mentioned a robust that. refer at that that can’t directly today, will our you

by couple mentioned my things. driven And of comments, a it’s again, as – in I it’s really

clean is – already entities perspective. clean are place as One position that we price, from looking good know affordability energy, of side are of them – for see the land clean always the a a they for is also But it. a energy, they in

enhances just some so. respect that so of I with these least scorecard at to And think enterprises our

the what mark question to to growth was inquiries the �� IRP related referred the led modeling? modeling it you suspect some that or suspect And in additional doing that from customers? forecast that you was IRP, that more the Or was to led to a load that

what Idaho-specific up – west-wide remember, this run So applications. a we that that is – Chris, this scenarios really was about some around the on Idaho-specific. modeling the year. it came what system out needed was versus it used new really west-wide we was And of were And versus the question additional to – came just

process. IRP of So that I normal up these kind ask main the the inquiries came think And that’s as are thing. just people about questions the part standard of as

that focused additional should wasn’t special there appeared So that we Idaho-specific. anything on we scenarios But some that it particularly. run noted

the Okay. Thanks, guys. details. I appreciate

Chris. Thanks,

Thanks, Chris.

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

and hope appreciate all interest IDACORP. much. your you, on thank thanks the And enjoy of the in continued We you the Carrie, Thanks rest call week. were that we for today.

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

may disconnect. Have now great You a day.