IDACORP (IDA) 21 Feb 202019 Q4 Earnings call transcript

Welcome to IDACORP's Fourth Quarter and Year-End 2019 Earnings Conference Call. Today's call is being recorded and webcast live. A complete replay will be available later today and for a period of 12 months on the company's website at idacorpinc.com. [Operator Instructions]

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

good and Thanks, afternoon, Gary, everyone.

Form markets and number the issued the year are earnings report also morning, today's our call. that quarter to we at IDACORP's XXXX those on annual and We'll this available posted release The website call throughout full slides accompany Before and opened XX-K. website. both refer on fourth our by slides

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

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

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

cumulative in per achieved X.X%, in XXXX. straight the year's an are On last XXXX fourth slide financial per highest quarter. an IDACORP year of $X.XX, history. present for increase earnings per is year were IDACORP's full earnings and and diluted These were full results represent XXXX of per over year results. quarterly IDACORP's fourth diluted share average annual the X, diluted we XXth XXXX. $X.XX our IDACORP's share earnings $X.XX, since share rate $X.XX over for share quarter increase share the earnings growth its per of growth

need will Commission. the expectation also support its of diluted Idaho earnings in in with Utilities be that credits stipulation to Power with under our earnings the Public of Idaho to our share, estimate utilize XXXX that full any Idaho $X.XX to $X.XX IDACORP tax the year Today, not in XXXX guidance range available we initiated per settlement are to

will to Darrel. over the now I turn call

call. Hey, for Xst announced Directors, Lisa as selected of In Boards the to President thanks June and would to year. XX IDACORP the her retire we last on week. decision after that company appointed both Board me effective today's Justin, thanks Xst with week, of years that, joining Directors of of our this Last us June connection everyone I and effective and with companies succeed and Grow Idaho Power CEO also effective of this

Idaho electrical grandfather at with She's Idaho XX and as long history training only also tenure does at has over with have into company for she joining contributed to earned was a experience XX she's financial operational becoming reins and of years long an years a lineman she significantly we got as an a company, Not since Power. engineer in the her the has by the company. She forward has take beyond. success the of prior the XXXX to Power, Lisa the She over opportunity officer move Idaho XXXX. and Power to

step forward you Board of to congratulating executive the new once roles. of met away to you in her of member my welcome to Lisa a in I me I from as Many join roles. have her serve look Directors, and I continuing

over now economic on introduction, activities. time short that updates well as I for the to turn as With some company will the ongoing Lisa

opportunity honored to am by and look to the I you, succeed forward you, I ahead. the exciting Thank Darrel. times

safety, of customer set reliability. Power our metrics: the by to noted addition records important financial success several In and Idaho satisfaction Justin, across

the in XXXX. On of safety employee record details X, company's slide we results see

to continue injuries see very as home. at and we are on at safety to and and emphasize our proud to safety importance time We work the excited an of spend at significant low, culture all-time

customer residential satisfaction on in and X. Slide results record-setting are Our shown business

to As customers' our overall business needs. customers at within Power the customers evolving – decrease in Idaho down Most price XXXX going consecutive population our Power Idaho experienced service the hard is to most grow, X%. continues rates meet year second experienced least area Idaho an customers' for with working by

the puzzle prices which overall the improve service Power's and paying customer key Idaho outstanding to as satisfaction a rank affordable and the efforts another shows on keep among metrics included also Reliability is list our is off, piece experience X, Slide the customer peer are near to satisfaction personal top customer of continue utilities. provide of year.

customers' on reliability to in of close time best kept was very company among Power and XXXX's lights in system the finishing results. history record XXXX the XX.XXX% Idaho overall

As X, Idaho area Slide noted to Power substantial service on growth. experience continues customer

X.X% in the state fastest-growing in XXXX, For a year row Power's third nation remains growth customer segment. customer our for a in rate the the residential including base Idaho grew X.X% Idaho and

Idaho customers our Power more has we key that customers. for to provides a affordable continuing energy new attract reliable, now clean XXX,XXX view driver and the as than company

and manufacturing, expanded The a projects for in technology new across economic calls commercial sectors industrial sales thriving In business sustained expansion mix distribution GDP Idaho economy and and within processing, sectors. – growth. is food XXXX, balanced its and Idaho and experienced through growth Power's Moody's service area the Power forecast of

in of X.X% X.X% the the end was forecast nationally. employment increased in of XXXX and rate XXXX Idaho X.X% another current X.X% of in Power's service compared X.X% area at unemployment GDP XXXX. growth and Meanwhile, with Moody's predicts

for X the integrated Bridger which by XXXX. Turning in resource Wyoming in path from located of its participation a coal. calls in to plant Jim work company In milestone early was ended XXXX, away in the unit-by-unit continued Unit Valmy significant toward North from exit Slide plant Power's X. a our Idaho recent the most Nevada, plan

In both agreement framework blueprint recovery Public support applied for in approach a to cases year. a X this useful XXXX. Oregon end Idaho similar by State of provide which Unit life, Commission's have for through is Boardman we believe Power cease also an be to Bridger. has a We scheduled cost to for operations the The could their also exit Utility plant

to continuing are the we Power's early published the with for six plant. showed dates coal-fired for Jim entire two explore Bridger overall IRP of last PacifiCorp, Bridger We fall for as plan as generation Idaho shutdown as the end-of-life PacifiCorp's co-owner consecutive years. decreased Bridger has well. units options

Today our XX%. source as recently is XXXX, our XX% coal around at energy As mix. number energy was total of that largest

Today, which Our clean XXX% driven of economics plan Tomorrow from by our by path XXXX. away provide the coal with aligns the Clean Cleaner to is plant energy

Tomorrow department is made to Boardman project transmission line XXXX. process order, of transmission authorizing this plan the progress the the The in approval a project to year. Department or which Hemingway the recommended expected BXH, release permitting XXX-mile key Cleaner Energy is the The in proposed Another which our is next line. of solid in step Oregon

the expect site If track, in on permitting issue remains XXXX. the process final Facility order Energy Oregon and we to Siting certificate a Council

activities, expected be to with early construction is XXXX preconstruction sometime XXXX begin to as the as Following or thereafter. in in line service expected

power megawatts pursue and for last constructive and months. case at the from amended us Jackpot expect purchase Idaho Power IRP cost to in project Solar solar do outcomes agreement. The include the elected the month plans also of purchasing of this next not new filed decision. XX Idaho management evaluated and customers, of We general not or we Power significant Oregon it. a to play the regulatory XXX end all influx Idaho rate to roles in effective in The file

time to turn results. will I go the Steve the that, through financial XXXX With who will

drivers Weather results. Thanks on were X. year excellent Lisa the more good through and I'll good afternoon you everyone. slide XXXX walk offset a challenges final through by We than had quarter. very year-over-year the

by added and sales XXXX. growth $XX.X summer spring moderate A irrigation per customer those X.X% the operating in class $XX.X net led customer lower use decline XX% year. to per operating in to customer million. of Greater precipitation decreased in to less and irrigation for mostly this agricultural million more temperatures Strong usage related income income

net by table, the down revenues operating income decreased hour Further megawatt $X.X per million. retail

with tax in reduced income associated more significantly stipulations reform settlement the revenues anticipated, As XXXX.

again, $X.X rates wheeling-related Idaho contributed lowering the with access transmission open wheeling by the volumes XX% XXXX, system. tariff These overall transmission to of XXXX, declined reset XX% each also revenues year by to October transmission cost in To a year. reduced extent, and by of transmission align Power's lower revenues million. October an rates this in lesser revenue

other of lower expenses related the amortization Next management reform. million economy team's areas. O&M maintenance table, bad a to of tax debt million XXXX of expense due deferrals non-recurrence $X and a Contributing several the $X.X to operating lower expense decrease a as to non-cash across for of on was continued in regulatory million, this decreased on $X.X focus our resulted and cost expenses strong

line the XXXX settlement X.X% Idaho Idaho return the level the year-end in customer on tax support between credit sharing Idaho stipulation. under and Power's regulatory equity landed XX%

So not this any we for provision Idaho amortization record tax, additional or customers against year. credit with sharing revenues did

year, earnings of recur. revenues credits not Idaho $XX Power million sharing, full did recorded Last approved has we support $X years. provision which to a for against million the in available future

X.X% resulted reminder, These million. support items of As operating Power's in will be tax at XXXX. line to year-over-year for income Idaho collectively a the a credit $X.X increase

was to post-retirement did pre-tax in $X.X to and plan due Power's earnings and reflected anticipated income charge This several not million to a items. Non-operating netted million earnings in guidance to $X.X improvement prior related our recur. expenses A XXXX Idaho ranges.

our $X.X construction higher as progress construction million balance the throughout used equity average increased for Next, was allowance in during funds XXXX. work

the associated with to returns from nonqualified asset year $X.X pension investment higher stronger led benefit trust this Idaho Rabbi million Finally, income Power's of plans. defined

were costs deferred line, Idaho redemption million. last income such XXXX no tax bond at of taxes $X.X to XXXX. included from $XX.X remeasurement or that next redemption incurred benefits year. will income remeasurement There due million reform you in as $X.X the as well was of million by tax-deductible see bond On of Power Remember taxes higher

credits the to Amortization helped increases. year, of tax while investment the the contributed of lower primarily remainder income newly current pretax funded tax expense higher vintage in

to net housing the million IDACORP distributions that higher at Financial approximately Services Finally, at from properties subsidiary. income of $X sale low-income led

expect and significant amount timing and nature, of in are sales XXXX. as do the difficult be not underlying to by predict IFS the to them property at controlled parties, third we While are

IDACORP strong and to last $X.X to liquidity ongoing respectively. Power dividend IDACORP's Idaho payments. Overall million which sheets expenditures Idaho sound continue higher Power's ratings fund credit maintain and and net income than including enable balance were and capital investment-grade and year $X.X us million

in of sustainable of by earnings. our last XX% the also This to steady ratio that Directors Board increase note to to of increased XX% payout you'll dividend of dividends upward the dividend years dividend increases. the Regarding trajectory several IDACORP's target Board September, latest addition reflects X.X% announced of

Board the to to We coming Directors an of increase of recommend X% more expect dividend in annual the or year.

On to XXXX. million with of payments. slide were the as operating liabilities our IDACORP's liquidity power were of the mechanism resulting along lower flows show XXXX. positions capital changes These timing adjustment of those mostly from than related Cash XX, flows cost the cash $XXX receipts we regulatory like and from working in assets and end and operations

Power's not in anticipate issuing The XX. bottom IDACORP's and plans. liquidity relatively under the slide available on than time, facilities Idaho At additional shown equity the other of do credit this XXXX nominal under amounts compensation is we

Slide our key and shows metrics earnings full and at year our XX estimates. operating guidance first XXXX look financial

guidance use XXXX the under year no share range which up roughly weather of $X.XX IDACORP's initiating are We per diluted over to tax in and credits normal conditions. assumes additional X% $X.XX of is range guidance prior earnings

earnings record us sets years XX is growth something peers. from apart of our that Our

O&M range ninth $XXX would expenses which straight the million $XXX O&M expect of million the in We keep to relatively be flat year. for to

will somewhat the $XXX capital We million expenditures expect $XXX lift of to range to million.

$X.X that of plan is billion our now $X.X over time. our updated from to billion capital range than note forecast X-year also higher that expenditures forecasted to You'll previous

does infrastructure due the This the license exact forecast costs to spend. timing of not the to as or with Canyon that the the Boardman new still projects compliance and of uncertainty to costs Hells Hemingway associated major such include majority build increased

hydropower stream X.X to megawatt million and in storage of generation X.X suggests reservoir flow current the range forecast our Finally should that be hours. million

to With that the I'll Darrel. turn time back

employees the Thank their thank throughout be There XXXX. you another support and is results our want I as record-setting work to much outstanding proud year. their dedication on of continued Steve. and to look investors back for our for hard of we

delivering while industry customers While continues rapidly the energy unparalleled opportunities meet IDACORP alike. evolving, to is and and for results challenges investors

a of the look financial targets future. sustain strategy will to with I our believe From into energy precipitation employees Slide a and above to or striving latest close at future, for temperatures normal Oceanic of XX% chance chance levels meeting our and from ongoing that May. projections cleaner success XX% will normal XX. our we weather help business suggests on the and to below a Administration equal National The March Atmospheric an from above

seen normal levels low and conditions recent should in snow clean have in throughout of welcome above provide XXXX. and showing reservoir generating system, lot cost weeks. precipitation continue We storage hydropower to slightly with for the snowpack along rain dispatchable a The favorable currently strong

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

answer be Steve, today that here and Lisa, I you happy to will With have. and others questions may

Williams. Please question-and-answer session. Instructions] ahead. The to is Chris first Siebert Ellinghaus from question [Operator now with go We're the ready begin

How Hey, are everybody. you?

Chris, are Hey you? how

had that net you of quarter that $XX to What taxes. in fourth change mentioned some for helped benefit? the number the tax think I tax Steve benefited that the million that was credits credit vintage offset Good.

just to K me spot there. get in let you point the and you the to think best will the No, be way it I

that line item you you don't happen But to have investment tax X If a know Note to under with for X Note credits. go there's you. I if

Okay.

You didn't book much about…

there is you'll what see difference And Chris. million a about $X

around XX-K. it on you have if in of you Chris, it's front the page XX

Okay.

were that's amount and this than looking And we change of a not kind little that it's you consumed Yes. wouldn't from we're time-to-time, at. return after item from Idaho to certainly you came tax saw out occur level we our purchase expect actually same have in change we parent Power. That able -- year won't that be could the that tax that the done of got and we of normal credits next see an larger what then but to

Okay.

much. sizable on You address Have seeing you're business customers? very development what color you guys C&I any didn't got new for

activity would still see Chris, in seen taking more this times. a I have is you I've lines of a service you that in amount than drive place Darrel. We across significant the would lot actually have territory. a our if -- mean across probably sky of is cranes

don't So, announcements definitely right there have some that but are of to on big of lot there now we say is activity. some going a those

be these talk and across. I As days continue always be and Lisa shared much there seem doesn't we slowing around we in driving down and country had that to as they who's the state anybody fastest-growing detour look having are to to everywhere. because you here the mean to of construction

there's see. which as not the coming entity a still now So, necessarily nice couple next there's years any it's just perspective, look of healthy what's by news activity. our -- from lot. level large good And at is thing right the we pretty and But is one over a that to driven then online

know if And I don't us. here to… know I Adam don't with he Richins is wants

seeing. I in Yes, it's we're diverse that just would Chris very what add

processing. We're food technology, seeing seeing So, manufacturing, we're dairies, mining.

is growth things think only to it's territory. I but service in is of there the the diverse see So, growth, out not nice one our that

X% the growth Okay. range. the of we sort slowdown Steve of you stipulation -- EPS about talked year? a for gate function step growth slightly I'm sort down a guidance I'm Can implied correct making of this out of causing here. or in as wrong, assume the Is by trend the ROE assumption if of that in me onetime that's sort the this below the

were closer year X.X% year anything was looked up year we couple and Chris, had a at XXXX, under X% only then at X% X% -- was back back it's we it's to down. had that about if X%. modest that this going to I one one

fairly larger ranges was And to science, ago. moved pennies, of that they that off And it's the it perfect up. move we $X.XX years. it's tend a march it's -- nickels a this than by move couple years is granted on most because steady today, So, a tend range don't $X.XX a is move but guidance of we what here $X.XX to as sit in a not number

do slightly. that we down is as continuing accounting. the view really positive percentage But trend the probably for So, coming

one get You because number actuals always -- come actuals as sometimes. and can And actual a of Those it little that over-perform projections have the gate that prior little the tended X%. look is up bit two just little as gives maybe at number. a year, number doesn't one to good even out few a actual low with under times of our the and earnings trend that look we to against a be we have more. better us years, and we X% beat that But above ranges been X% the was one a interesting was even over against

both little in a So we against lot do moving and beat whether bit. it we plan how by flow ebb they're along a together, little a or

Okay. you Lisa led what where asset the to to that got bit Can you conclusion that decision. that you solar you are? or you talked about PPA little elaborate about on the a

I would plan with say risk was fit just and the just investments. generally, of really it economics the didn't our the

all Well, Appreciate for the right. color thanks Okay, guys. it.

Thanks, Chris

Chris Thanks,

next go Russo The Sidoti. is ahead. from question Please with Brian

Hi, good afternoon.

Hi Brian.

Hi Brian.

interest expense management curious the the help next ongoing O&M related to units of And have had excellent guys O&M quite going on et shutdown O&M I'm in savings could facilities you done bit plan decade. there's will cetera. when a got I these your support the that at you through slide end the or job to that X, the Obviously are retire plant trends? coal of an over look -- these to of retire be managing plants And ownership that

more say it's the bit and give bag take. plant would of mixed in Valmy it's a -- I this a -- -- there's a would little particularly. just it's There a of I Brian, Steve. is

-- So savings in of are giving O&M we it. out will with back we also what trickle part that's It back of spend. the the and some balances

getting trade-off O&M as the you're base process it gets through can as rate grow and offset against the have then So that some we but you go may disappears.

doesn't same is have mechanism. that Boardman little different. a It

serve And by have so there absorbed -- you load once they're that with are that some likely there had as same will costs it. be to some still other costs that you gone the

be would costs else. to those reallocate So somewhere available

exactly they're not same. the So

it. got ownership have in Okay, me Remind percentage you what do Boardman?

XX%.

Boardman. XX% is

on your EIM? comments great. any Okay, participation in the And

to continued do it Brian our -- back via And adjustment it It what better. mechanism. benefits power flow to those customers it's would somewhat thought even do we the cost

and been it's advertised bit working as So a little better.

so participants more bigger as think sort ways that I to of footprint lot and clean us would the joined, And coming I just it that utilize as what it and -- starts allows as over out renewables the a for online to argue allows energy in spreads a this energy. better the of area

to Boardman Okay, into line mean, et got preferred member in that And short the terms play the a any you EIM? of cetera? and/or are there's be XXXX net I does Hemingway of But happens how permitting what know position out control IRP. to your I your it. the I that scenario if what's have delays in in further of criteria might

This is Lisa.

every do we our years. all, of First two IRP

We into that? at far future, would delay running and than where add both be -- a would out the scenarios we process. plant. you Mitch load with was are as to looking we to something If I it have our serve it we going too likely Hemingway happened know So do couldn't more what would we're be down it to that you'd gas Boardman throughout anything constantly -- don't to look in next and without that figure portfolio.

add... would I

is kind with This also. of us line is Mitch today who Colburn our processes the IRP runs on here

BXH. years Also we BXH. have Lisa's comment alternate are looking we IRP our with produce that the second and futures two Bridger would IRP. I unit at echo we every that's exit We look that connected that unit with in without

get second that need of So when resource replacement we out we unit. do

is So that's associated. of that so the identified to time BXH

would we that as at So well. unit look second

technologies. the years but out that doesn't can to you're It's going talking watch technologies as few as all well say to today fair a and Battery change. well maybe Brian we're work things

system be will the But we to resources. all work. at the So we of have line looking those make bottom is

well. what we So probably in we'll ship this as time do to need plan do will That's typically with happened. and what time

$XXX there's Could you I rate refinance I million. the interest you think us we're Okay. to you that assume And in going think expecting you're be long-term And got XXXX. that current savings. And -- is? sometime debt what to just of remind some I

it's Yes, million... $XXX

a XX-year tranche. There's

was not improvement. going of refinance. to me our here it one not tax second. -- it's I to It's a one back higher to some Yes we flip But -- have of let our would not be rate expect It's see bonds the deduction... going

at It's X.X%.

time. That we've seen some

today we at Brian owe X.X% It's $XXX Yes. that million.

yes. $XXX million

it's there rate. keep today on So in to

Okay.

we And a then on. when those, also and we'll re-up -- we going look for capital we take other need if sometimes see anything else

finance So comes size probably on it. we to And not exactly of when a it might full how array pass. look it we'll be at options that

Options mortgage in bonds of like bonds maybe? terms what green or first

and Well, I can that not it's the green bonds remember, are think you now to up We'd there. probably look -- have to typically that $XXX to it's going be looking that most tenors. the in at size the buying it we But for bigger are million range -- get market. I those like all in see -- people tranches those the got to the are to not it's be was above

counter. longer. wide We as bring a open have We could in XX as or things short. go We long can years

we really be and have works. seeing we'll available, looking the everything at what So rates

people talk had us have We categories. about higher into to our bond getting some issuances

in. to market would else that index pull that bond other road down can the with years few a such in try bonds eligible do a coming buyers you and that -- go layering it you So, short maybe then bring people something have

So we're looking at all options. those

works. We haven't made that up one our pick we'll mind and

also, the new policy. dividend And Okay.

Looking sheet very at strong balance liquidity. your

XXXX. million $XXX of You got at cash year-end over

to the X% target XX% example going to to in to should going or that. the at of more? gradual, be recommending X% increased payout dividend kind to X.X% that of least increasing the is How you XX% we payout all increase. While target? you're while profile triangulate trying September, only midpoint your Just recommend or Is stated the for

dividends. have a Yes. had as goes Brian pretty the she to steady we approach

more X%. We done the than have

we'll that's but I in of spot amount. been really kind look at safer to steady expect out to And say, how gauge we've wouldn't I I it's really how been a little just think over range future earnings. we've the out goal well. our a been it's rolling give oversized whether growth increase of of be the say, the year a delivering the going in doing. through we'll But would dividend what has our X% is to or as return and like playing been is a that

them something you So actually from year. sort to be count we overdoing and on both can of want which there be one in you discourages

steady a time. over want You delivery

Okay.

be announced next dividend September of expect to XXXX? So we in should increase the

board the That's what been... has

XXXX.

XXXX. In

be the we Yes to take a one the it shaped good to -- September has Board. up meeting to

pleasure And with great. to a luck Darrel working you was you. Okay the It future. in good

Brian. Thank I you, very that. appreciate Thank much. you

Thanks.

is question ahead. Please Khan with Ashar next Verition. go The from

to to I back Good I afternoon. XXXX congratulate and... association you. Long to just going Darrel think wanted

you, Right. Thank Ashar.

lot. a thanks And

the And congratulations -- think Lisa under spot. a forward new so on you. I did the step company huge

Thank you.

is I I around X% think some from -- that just average And I so CAGR challenges, say we the don't UTS. would know but have

this my work is step with as the be would investor. be days you would start or it new you X% great towards an us I think advice is as my be which around Lisa can you So split, getting -- would towards that these everyone CAGR so if

that for you Thank advice.

to get work. We will

that Ashar you up have something reminding sure like CAGR that been to off I've because everybody year. there many coming gone of aren't is be every

a are it's is fact, off peers. to not you And of I'm a when our down, lot a In down here in have up. off go it better continual easier any a than sure there CAGR

looking too. So do be math your back sure and

people That's look going you We will. compare what are I will I to forward, right? with. Okay.

not to want to the So -- at below be I be want average I average. least us

Ashar. Thanks,

Ashar. you, Thank

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

today. our you and Gary appreciate you, participating hope your IDACORP. in We on for of a great have Thank call We the thank day. continued all Thank we interest much. rest you

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

You disconnect. now may