IDACORP (IDA) 1 Nov 192019 Q3 Earnings call transcript

Welcome to IDACORP’s Third 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. ahead. go Please

everyone. Good afternoon,

call markets throughout to opened earnings issued the those accompany morning, and website. on We’ll refer call. this website both posted to today’s that IDACORP’s slides XXXX by XX-Q. and also our available Form our number Before slides The we are the third release quarter

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

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

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

first last a XXXX. share the share we the XXXX were quarter. On third for diluted decrease $X.XX months third decrease nine $X.XX, of were XXXX diluted months share year’s of per per Slide per present earnings a over X, $X.XX our nine quarterly IDACORP’s financial $X.XX, of IDACORP’s over quarter results. first share of earnings per

to raised year’s Today, highest second exceeded the its share. range history, IDACORP’s to per estimate $X.XX XXXX of diluted only we by end are record $X.XX last Year-to-date, bottom guidance full-year our in of earnings earnings achieved results. the the

of $X the our both range expenses by estimate decreased million. and operating We maintenance of also ends of

over to now the turn Steve. will I call

effects despite Overall, quarter our other saw tax some flat drivers reform year’s everyone. income relatively Halloween, you I’ll lower on the last over Happy and income to to that, return operating Slide quarter year income. nonrecurring With through X. net we and challenging Justin, led Thanks, of weather, tax The walk last quarter. adjustments positive third

service Customer to at rate last greater milder resulting in from Power of and decrease service Idaho along growth months. regional has our weather with of transmission and a lower in offset continued nearly This over combination rise area expenses, area. XX growth, the retail X.X% the in the precipitation revenues

per small lower the inch from quarter customer of year. an this a to operating million $X.X in million. lower quarter. Net and usage by income growth table, service year inch customer, in Boise adjustment Precipitation added sales to weather, on the in next mostly cost fixed the overall general went the income the last about million operating An in nearly revenues, of decrease An increase $X.X full to most and residential the $X.X customer categories. offsets in usage decreased per irrigation related area for of X.X

addition, degree cooling overall X% year. were In days last below

$X.X megawatt resulted reform tax net Transmission year. anticipated. Pacific region the income. moderate temperatures the Northwest a down with million. the this revenues more items hydropower operating year, decrease reduced lower wheeling-related on revenues per wheeling and or stipulations to significantly settlement retail in $X.X million as generation were table, the net hour The associated volumes Lower income about together Next million. operating $X income to revenues more by in XX% decreased this These throughout

with The XX% the XX% an Regulatory rate X, effective the filed over rates tariff period. In open-access XXXX. additional October Commission tariff addition, about the Energy declined Federal by comparable declined

$X.X a expenses deferrals in maintenance the due regulatory tax noncash in to on labor of benefit not XXXX expense other and that continue. XXXX and operating and to O&M $X.X in Next amortization a table, by million million related decreased decrease million costs reform $X.X did

last as provision under sharing mechanism. with and for the revenues third million recorded earnings sharing Idaho a during Idaho earnings of $X.X Power against year’s Finally, support customers quarter,

As year, we collectively These operating currently Power anticipate provision than return year-end quarter. year’s with not has Idaho income equity third to to last less recorded comparable in be jurisdictional an is XXXX. XX% such on that this items Idaho any net

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

be income line and A prior we change earnings offset expense million expect year, these in full years. much positive with $X.X the the of decrease. to nonoperating For in this

compared included taxes, at income of XXXX benefits such There taxes from for updates due income and increased in expense of income no year Idaho deferred $X.X return XXXX. Also, tax tax remeasurement remeasurement quarter. Idaho to the year’s third third in of to decrease tax reform. a tax quarter to third-quarter million typical last this was deferred plant-related Power Power’s income tax adjustments As

$XX.X Overall, expenditures Power the million dividend to were and payment. income million enabling liquidity, fund to maintain including continue Idaho strong investment-grade and and and third respectively. IDACORP’s quarter Idaho ongoing than Power’s IDACORP of credit sound us lower $XX.X and balance net ratings capital sheets, last year,

increase of the dividend Directors the from total quarterly Regarding September, This to approved a IDACORP Board dividend that X.X% XXX% annualized dividends, latest since XXXX. a $X.XX. of by has increase means in in $X.XX the increased

our additional annual more to recommend in later Darrel color policy or of of Board an increase We Directors the also expect on the be and X% the coming call. year, dividend to dividend on will providing

due to $XXX.X in XXXX rates. with from decreased on of term bond purchased in control X.XX% due These interest from interest the Power August, X.XX%, term outcome. a bond with outstanding million about $XX.X pollution the X.XX% two on bonds were of the this bonds totaling but million great same series rate remarketed remarketed million lower and $XXX The interest terms its with and market tax-exempt two to decreased rate remaining Idaho addition, substantially XXXX the X.X%. In

Going five $X.X smaller interest shareholders years next rates This long-life to annually and customers. forward, million the matures bonds. both the the annually successful for and the we expect the for final thereafter by interest benefits transaction expense until approximately of million lower reduce years two $X.X bond

XXXX show Slide cash On and to and in we positions credit lower and tax the the months receipts not X. lower bottom with amounts regulatory and the capital were XXXX. IDACORP’s flows mostly is nine payments Cash operations additional income XXXX, working about income. available from first Idaho along end X, related The on September the over changes of Slide balances facilities well as liabilities, operating this the than shown time, of our of issuing as compensation anticipate of $XX under Power’s assets timing nominal we remainder net liquidity million At of and in relatively liquidity plans. under the flows IDACORP’s equity of as do

our per and Slide XXXX $X.XX guidance of have diluted estimates. outlook year, range full-year guidance share. metrics and our to for the lifted With and to IDACORP’s performance earnings the earnings X shows updated balance of financial $X.XX end date lower XXXX financial to our key of operating the the we

Idaho available on if equity, forecasting In Power allocated the return are our year-end currently with $XX above a support needed. jurisdiction, full we of tax X.X% at to still Idaho or million be credit

expenditures $XXX $XXX lower capital not expected We have million to of our also $XXX also our O&M be expectation but will only which million in the last expenses close year’s million. reaffirm to $XXX range We to that keep eighth million, to would level year. million for than O&M range the the changed O&M straight $XXX be

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

weather for an the remainder our of assumption metrics As year. of conditions normal always, reflect the

this Power revenue-sharing fourth of quarter, that year’s Coal keep in to the and ahead Bridger from in of mind Company recorded were Looking earnings Idaho $X.X fourth XXXX, negative. quarter the million

Assuming normal adjustments Company we expect typical to and revenue-sharing we results not weather years. expect quarter full prior to Idaho this to sharing expect year it more line include the we in do under Coal year’s Bridger because be be earnings fourth conditions, with mechanism

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

a for my break long-term begin joining our that Thanks, planning some changes organizational thanks today’s format reflect and succession today call. acknowledging efforts. bit to Steve, by everyone little and remarks I will

and President effective show as we Lisa on in October X, we Slide September, As Idaho Directors Xst. Grow named announced Power’s of Board

she in Lisa Her as Lisa served operational of and Power our for deep has brings President Most been continue this tremendous Power. within President and level I a experience company, industry as engineering role of a during and financial an primarily leadership Idaho Idaho Operating passion to CEO over held CEO demonstrated Officer. the Senior time success. leadership a has of and during operations. Power’s and career unprecedented key recently, and Idaho with deep Chief IDACORP. has outstanding many Vice XX-year she important positions as roles of years, has

Lisa’s and the also Vice as the both in President President recently Idaho Customer and to new key as leadership as to and Power’s Business With new most Richins since his and company legal Officer. promotion Vice unique positions, Senior counsel named background President, Operations brings Chief Adam engineering role. Adam joined XXXX a has served Operating board of He several in Development. law in

and on and among changes and several are more team X, our promotions effective on executive IDACORP’s October details These Idaho Power’s changes websites. X. were posted Lisa to Adam’s highlighted on are Slide

that, the With to I President, like Power’s to Lisa turn over Idaho new next portion Grow. call the now would of

with to for thrilled I Darrel, of the to serve and are excited walk some With the team, outstanding an trends with business. to our I’m Darrel. I you, company group, executive would like Thank to be as Board I’m of that serve and leadership high-level and Idaho helping today, grateful them drive Directors, honored opportunity – President and Power. our serve the through of entire the am them. our everyone here has

shown X. is on growth at as the Slide Customer forefront,

an of in of and and region. We Steve customers are the – customers in the expanding many hear economic upward customers from is decisions for our that these drivers months. clean with new they one area. be rate affordable, a to the we many It reliable, growth XX these key time the in hear that moving continued of customer growth Power Idaho, continues service to live making X.X% kinds our all energy As provides with Idaho of noted, over work of exciting past into

Mill South major the area that continues Idaho agricultural see Tamarack and the area in far and activity processing, to projects few that goes, have customers the the quarter business Notable third load large I the today. distribution Central to a the of include a products in Northern highlight expansion milk during large from of to part expansion sectors, As Idaho particularly food manufacturing our online as an in large service came located growth.

you of not in milk-producing Some Idaho state third largest actually but the aware, the might be country. is

We taking to several forecasted also and has X,XXX square XXX,XXX Boise announced beyond, The XXXX. industrial including the begin center have and Valley. to date September jobs expected a the distribution service is large later recently foot center, XXXX in Amazon projects of to scheduled area, in-service which commercial bring a in

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

Resource lost identified XXXX, units respectively, exits third represents supporting Turning the in ending early Idaho two with our for are while working chapter new timing and With result. our customers In for Boardman capacity path in its of interested Jim Jim the to our plant both options ensure to replace already of timing parties goal. to all Bridger prudent and the coal Integrated and planned the make that the will from recently Plan, Slide exit clean participation coal-fired that XXXX filed closing we at sure most and Valmy Bridger make XX. shareholders XXXX and away along by Power coal, plants, investment the to committed sense will the looking – exit to

the within year and XX-year done of additional IRP modeling of XXXX. earlier results plan for the Bridger As XXXX planning The a a which timing process, power the collaboration unit, and additional be a majority information potential exits end facility. or agreement this this Jim purchase currently supplement that recall Idaho solar co-owner in the effort with we integrated plant. reminder, ultimately some filed another resource results change from PacifiCorp, signed generation we the have planned On issue, been Power by in would modeling XXX-megawatt of with providing the early to could our

right the The rate quarter, Power the state the that a exercised we agreement of general we not This Idaho true acquisition acquisition That case XX the Last month, in toward look Idaho to quarter its next facility. subject today next Darrel during XX stated to negotiate the the months. fourth contractual are regulatory in purchase to approvals. in agreement and file or as did Oregon months. remains plan power

Steady load management our timing the we increases significant general in combined roles of play customer of rate regulatory our all case. as outcomes next growth, look effective operating constructive with expenses, need base, at and and

we we where Power’s will we see provide base Next rate plan growth. potential some to rate IDACORP’s as financial base explore and publicly context as X-Ks in today, forecasted further website for week, some in future EEI surrounding scenarios Idaho an file well connection on with conference, the

turning the would to presentation have the work to over customer done the recognize employees back like Before I for front. they Darrel, experience great on our

that rankings last traditionally have – You scores been are on over strong, in strides will while Slide see improve. Power over made have two other the J.D. Idaho great and past and to the Power continuing years national we XX

the the forward. something Idaho for record-high service, our and focus an this showed role virtually and in and of on of, our is are on has From energy fact, third in a XXXX to it nation. outstanding study bar experience In the the website reliability Idaho satisfaction residential every employee scores company, results measuring for Power customer put Power enterprise-wide going It customer a highest-scoring bill which the very played the better we among companies during redesigned raises proud success. a customer quarter,

time the that, And to turn Darrel. I will over with back

excellent Steve done are briefly Thank Lisa’s employees help topic. job as remarks I want the and ensure as success. good to doing financial to and to of some a job have facing, the well today our you, the is Lisa. opportunities here dividend outlining company continued our our operational return

than and can XXXX. As on Steve to since you mentioned, XX, as customer quarterly our more double success enabled us Slide financial has see and the growth dividend

We sustainable continue range expect stay XX% our IDACORP earnings. payout upper to between to the current end and target of of of near dividend XX%

we with utility discuss recognize ago, We the in appropriate years expect dividend set target target ratio began about payout median mid-November. the with raising the payout We the peers we eight to board further in the that when ratio our of mind.

our payout peers target. recognize the we than and also of the target now higher is over We level many median have increased ratios that years their currently the

its most those for normal early into the evening be throughout to month. area precipitation since October suggests days a range. and inform Atmospheric for fact October statistics potential of above to think XX normal with target XXth look above with in winter next look a end Administration or our below a our brisk consider National early increase it slide showing about outlook. and to our The treaters month currently of Of above-normal looks XX% Oceanic we trick a tonight the with Halloween, XX% will the meeting is note, the appropriate degree chance service slides, Power’s This the area. equal an use at it projected board levels coldest It service ratio heating weather I the payout at chance for will XX% and discussion Since temperatures at months. XXXX, recommended of only or is weather the to as indicate it was we Idaho

provide should hydropower continue to into Reservoir generation low-cost for year. conditions favorable next of continuing this storage snow year’s season levels

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

and changes small the mechanism fixed addition, for In classes. some Idaho residential reduces of adjustment temperature volatility the cost of commercial customer in

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

ahead. The Please Russo you. Thank from Sidoti. with Brian instructions] first go [Operator is question

afternoon. Good Hi.

from you. to Brian. hear Hey, Good

Hi, Brian.

Thanks. yes. Yes,

any of? Just more are remarketing be – there opportunities we aware that should PCB

No is pollution the Brian, our the no, control that’s outstanding. set end I’m sorry. That more only that we’ve still – of got bonds.

won’t So be there. another set there no,

those. monitor could we are, rest be the on of were we do majority will stands, depend all to think it’ll our And we But I refinance not. interest portfolio. if continue and rates the of or to where early like to there continue where that there’s felt opportunities interest they opportunities. think bond I through stay rates whether

the the just that earlier I on option megawatts? but Any of And would it to about first more more are of and number or Got guess. offer, any like it. actual your onto solar detail the project, PPA be – comments then anything insight off-taker, I you purchase right guess solar that great.

XXX-megawatt Darrel. a is this It’s Brian, project.

it’s size. the So good be largest a in Idaho. pretty It’d

Okay. needs point, to at add it want you’re base? going that to And some so rate regulatory to it approval assumes

so a Brian, a is it structured it’s of power. as PPA purchase

entered I we an sort constructed be it, envision would really we whether a purchase rate that into think true right could it it I pricing as – – owner, be becoming pursue would the in position, agreement now. of a may be it put same what’s it us some that into asset base don’t the power look or way that it’s if consideration. a in around

investment Idaho – become could It Power. of an outside Brian, it could

Could be non-reg.

us. investment non-reg A for

Right.

looking things of some at the are are we that Those right now.

of considered key even it’s pricing. being say, Brian, component would why just is the I a

that on that provide to thing – approve If is commission we they And or based price that’s commission what the they the price in is or that make would IRP. the be it. – an and like so be need make believe still as a a whether would things information will road that to for you say, attractive that them good a going be to commitment, the feel that might be an will it choice around – what would other delivering it not guess, deciding down it opportunity investment I that against take, other lower-cost might

prudent. will a just in more that in nature would make So lock an and something at price a little it put look They’ll it’s that of than determine rate of and they base. on it if to we have asset probably

Understood. it. Got

current not base then for And EEI. ahead Okay. rate base, expectation at disclosures to far, rate the too but jump

are balance Just to Canyon? that how out? treat insight just curious, going going mean you Or is Hells the there. carved CWIP on to I any be

I think to the in what of couple of in you the maybe a over different we envision an periods time, buckets term of spend five-year is that’s of that longer. giving idea are kind bulk reviewed of it. We’ve from our one window spend standpoint continued near and been at amount little prudency, That least dollars. has largely a of the the some its of

prudency what some went So what there’s beyond – was through review. the

it some you But as an as extend in is But likely And to without that. near time that we at looking need does give that because, and in nearing future, plan you future. start beyond been have the at where know, window be specifics a that year of when base rate idea to it’s – it item hit. a the it isn’t difficult to we’ll to will close has the

new obligations a much spending the – the be other we’ve that’s the come I and one think will that you with talked don’t that license piece about. think closed, with also news yes. obtaining I very new road, along that introduce to once piece it’s say down the I’d So will

is construct that comment Okay. where the your in see it just going? And just you actually EIM? And costs? on EIM do lastly, in reducing future? whole How going then Is that the participation you could –

going we’re group, effort Park, instrumental team. Brian, sort to Power with So, and our and EIM her with was up Tess she at is us – who heads Supply her today, of

briefly perspective. ask regional maybe comment EIM a how on is will to just us working Tess we for So, and

benefits So that. ISO the for Idaho and benefits posts regional continues the EIM Power Cal to to region, provide the

continue As and the some lower in level total question territory buy dispatch always, we as in to to the of opportunities the we local see service well as about at cost could our value, market, than there’s benefits dispatch. what at units but increases supplying

help the look of way. reminder, our price – of And, customers, EIM Brian, as at to which which the back real kind going manage a a you us picture when regulatory, impacts the that end up benefits that’s customers, the does bigger positive to

So join it more good, been it’s to And scheduled coming Bonneville been continues and we today, some down. larger get others now it’s participants on – got to coming and with on.

So it’s a getting much footprint. larger

Great. Thank much. you very

Brian. you, Thank

Thank you.

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

We look EEI in your you on so you week in thank appreciate Gary, seeing we much, company, a in and at interest and participating of call Conference all for many to thank our you forward a the so. Orlando continued on our over or today. little

thanks Halloween. So much. Happy very

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

You may now disconnect.