IDACORP (IDA) 2 Nov 202020 Q3 Earnings call transcript

Good afternoon. And welcome to the IDACORP’s Third Quarter 2020 Earnings Release Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. to conference like to now would turn over the Mr. I

and Director go of Forsberg, Treasury. Investor Justin Relations Please ahead.

earnings our Thank you, and quarter The website issued our accompany available today’s morning This Form call XXXX slides third are that and good posted afternoon, to everyone. release XX-Q. and on also we website. IDACORP’s

call will to slides those refer by today. We number throughout the

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

shown and Chief on As President Senior and Keen, Steve Financial Grow, Officer; Vice today’s have IDACORP’s Lisa Officer. on call, and Executive IDACORP’s Chief we three, President slide

a Slide after also in first XXXX XXXX answer also any estimate nine $X.XX third earnings Idaho we have are period to share last share quarter. $X.XX, in earnings share diluted regulatory not of full under to to year. same the support the share increase increase per have settlement $X.XX the stipulation available per Steve $X.XX our any to that any from revenue pandemic we by our $X.XX its Idaho year-end year an sharing months estimates impact financial of Lisa per to will last nor as for earnings tightened IDACORP’s between equity our shows diluted anticipate in year’s Idaho of a Idaho earn financial and help utilize the per and be upward COVID-XX guidance from available have as in credits IDACORP’s XXXX are share from of we range with share Power quarter X.X% expected net other modest diluted provide that need These Power may you the relatively do expectation an our We were diluted earnings IDACORP jurisdiction. per to-date. return $X.XX quarterly of per diluted on Today questions to company updates. results. four today, third representatives as seen XXXX of were is tax XX% $X.XX, its

to and this would as expect, impact that use Lisa. is tax Power’s the However, earnings customers Idaho evolving to it conditions how will and difficult significantly pandemic the quarter. if credits you of worsens or upper the turn suppliers, I end of of affect predict over economic guidance now range could call the the full on the

you, Justin, for joining on Thank us today’s call. and everyone thanks

our focus our the on seems and been employees it more This the been remains to talented, impacts expenses working now to continues managing pandemic, and Their Most care this been response have customers to office that energy dedicated have remotely an Given our such is success Idaho continue grateful of it responding the to the ingredient control their it appropriate I and have our commend the important In carry done adaptable so operations our job have so Power which provide workers long businesses managing safety, the and energy and to Cost than line communities our customers our reliable of for critical seven employees continue of our and daily and workforce. to crews on. magnified field for by is am start serve. has continued of lives ongoing customers, months, to a is nimble. turn, ever-changing been of situation our and we our public. of acknowledging the once again to extra to take to crisis. these incredible. precautions ensure has safety while times. outstanding work taking of we vigilance, to this I uncertain has our and allowed essential providing in employees able

nine Our months lower several prudent financial factors, focus will be months for over to employees us walk There the nine are management the with company’s compared and first maintenance XXXX, contributing which of minute. in expenses continues are Steve operating of our a COVID-XX, But on the XXXX. through a five, wheeling higher commercial deliver O&M have transmission slide as and and irrigation IDACORP growth, on than strategy XXXX targets. related to companies. offset from pandemic. Despite increased lower its costs and decreased noted revenues first resulting customer remains financial sales, more on any usage Customer track

irrigation experienced despite by fact, megawatts, taper service of begun in economy areas. normal our this a resiliency by our Eastern near-term the of record We optimistic cycle. date of to In cautiously X,XXX near goals the remain August off business long-term peak Power on the year, due having harvesting Idaho that both to and Oregon Idaho XXth and

square the lead us service Amazon of storage in has and two noting fastest business continued worth new for shopping was talked that indicated Beef’s new remains and businesses It’s to The September large incoming of Amazon While its of discussions potentially about formerly customers month million they uncertainty local True new centers, processing, the for, ready business for inquiries new virus only plant Baths. load energy phase relocate This lingers to holiday processing Finishing growing continues future availability growth. season. announcement foot service and in-migration point projects West on a markets, opportunities. over also last with additional center at of in from the Other our will Idaho continue build relocation our online facility one clean in the the food expansion manufacturing nation AFC Systems September from affordable, came be be and nation, include the the of with based in activity area California, dairy distribution officially or X-megawatt not Idaho area residents, processors. also Power’s Fiber area. to Power, manufacturers, $XXX the in in Notable other towards record fulfillment service examples new includes development the quarter Care healthcare food and additions. the several in active we new expand projects facility, housing and Frigitek’s in quarter sustained past cold groundbreaking but reliable, and impact, XXX,XXX of the

an output a The calls the with is In with GDP decline of X.X% of the in economic area monitor we entire X.X% As incorporated by in X% most been expected have six. approved projections on end for on basis. September X% September, impacted U.S. on the of was common and impact. Board cash same the GDP At indicated per new in current to them. rebound Moody’s area our unemployment of of annual period of service service our in X.X% dividend was per Directors employed course, the stock negative The September, numbers with quarterly now area flat nationally. X.X%, for an rate, the have, in $X.XX relatively compared in people number with economy. increase the of as IDACORP’s regular dividend the the $X.XX forecasted our compared of forecasts of or XXXX. continue These COVID-XX in projected current last share slide share, shown and data year. compare favorably XXXX service

has representing dividend period. IDACORP’s increase in now an increase Board an Our every quarterly since year of approved annual overall XXX% over that dividend XXXX,

XX% Idaho service the the provided could the the bear quarter, to expect the to Hemingway an portion transmission Boardman between customers customers. in transmission XX% allowed for change ratio Power -- Bonneville earnings. at as continue energy At of were the investments. acquiring the intent sustainable capital project customers. shareholders, same maximizing high-voltage aimed potential normal target We transmission all southeast earnings Idaho BPA to us would benefit arrangements to we of structure Idaho come to or and and and providing would own mentioned the investors recommend payout time, in its partner’s XXX-mile IDACORP several Our retail of customers funds keeping the of of growth our within to return each annual service of service of while project, expect some BPA. in include to on Power we Power Power would Under the a dividend could would partners exploring Power of and Idaho future our earn expect company and current nation. I to line the more scenario, Administration’s Last value customer dividend prices One XX% line from transmission currently the turn, its ownership increase cost in and share, arrangement, X% have from with increases lowest where to structure the this the that the not our up Idaho

our coal, ongoing to key front. of on are goal have and this to XXX% discussions seen path by slide XXXX related away component on Power’s provide energy Our a clean Idaho from seven. I updates two

by Power remaining Power capacity in First, Electric. goal. our Boardman Idaho operations Hemingway the owns month, coal-fired Transmission Oregon. of bringing of Portland an located from will clean with ceasing earlier the the end ceased generation this XX% operations owned General its projects the key generation ultimately to plant replacing be and in like facilitating lost energy Oregon Idaho to Boardman XX% Boardman to coal state

IRP, company participation and plant IRP in Idaho filed to The -- with pending Valmy of Secondly, plan as opposed the early North potentially XXXX recently as the resource commissions coal public the amended Idaho utility X XXXX. XXXX or Unit Power’s in ending is filed Oregon. as integration second recent shows

However, further not months. the a financial case Power cost as play crisis today. regulatory decide future a Steady XX to potential of on dates quarter, sense general customer, need will makes general customer and the where growth, case. I given closely. effective Oregon Idaho rate we plan monitor impact That situation constructive impacts roles the to file the serve, needed next in the range most to ongoing at But and we significant remains rate the that the analysis true in reliability did stated of and in continue that timing be and system of Last perspective. its or a from COVID-XX all Idaho management look outcomes and communities we economy will

our whose newest and strategic leadership board to and Health and across President leader, for slide system community Idaho in Odette and Bolano, Now and System, is a her tremendously a makeup make our is Saint see to we perfect was Oregon. of the of our oversight provides fit can member, Odette operational CEO like a Directors communities executive commitment Board five-hospital full Odette business on Alphonsus respected I’d appointed serve you September. she and eight. acknowledge who where for Board

nine, Administration. a range service Current slide the early shows precipitation a normal of it and to for XX% in weather weather on suggest fall normal chance remainder projections recent National Atmospheric XX% Finally, above of above winter Power’s of Idaho normal outlook and from and chance XX% the a area. and Oceanic to precipitation of for temperatures

results. As play operations us for now with through And levels financial Power’s clean always, storage in the quarter’s reliable, precipitation generating role will Idaho reservoir affordable, walk important and Steve weather that, hydropower. an and

Lisa. you, Thank

will as had year. Despite us sales, Let’s now positions commercial impacts as months the believe to we our results XXXX. solid on quarter the of final we which last same well third pandemic the continued move customer overall you where large to we the XX, quarter into results, slide head of compared our see financial

usage of year-over-year operating changes, X.X% customer of to pandemic, to offset the customer the residential volumes added of see by helped which about will continued Higher and $X.X that X% irrigation the sales impacts to time per net was more X% higher many The overall On table decreased per growth modest our negative a than million year, result strong you to income. the home $X.X but was weather public due related quarter. variations, crisis. in health the customers customer usage also Residential relatively partly million at increase usage spent customer. last during commercial

offset see on table, the decrease you the $X.X adjustment was in cost the million a Next revenues. in sales residential will increase fixed by that

and offset rate, table, down partly million due in XX% market $X.X transmission revenues Moving by Power’s California. in tariff by the increased back heightened volumes southwest further Idaho U.S. which to activity October XXXX. increase declined wheeling-related in open This the of access was

X, the October by increased with rate Going beginning forward, tariff XXXX X.X%.

by from decreased resulted North expenses expected but the X compensation variable maintenance due related of period and year. operating the year, exit Valmy from plant this last decrease decrease with million, compared other accruals $X.X Unit table, a reduced the on labor Next, last the Idaho of costs was to portion lower from same Power’s also when

rate. from regulatory asset O&M, those vehicle in travel through $X.X authority the the expenses a utilities modest such Aside of net granting any bad Commission recovery net unanticipated savings those costs, training. future for estimated million in July, current To-date, emergency-related recorded savings, including and order of Idaho due cost expense, to Power higher employee as, COVID-related an savings COVID-XX, possible to its debt fuel Idaho issued of for defer and estimate associated

income adjustments, greater partially million Idaho income incurred led and in this collectively a The million costs by an changes year’s of the and expense deduction and of IDACORP’s decrease plant net taxes tax income related in other to statutory quarter resulted to third bond $XX.X Finally, on income tax offset increase quarter. $X.X respectively. this $XX.X million, for in Power’s tax redemption

amounts as to included and net XXXX sheets, was period the the sound nine including first and and for flows to from capital mostly the fund million and continue on of is At shown IDACORP under at flows, liquidity any cash along investment Power and facilities million While timing months this capital IDACORP’s fluctuations. normal our liabilities the to Cash our liquidity enable slide IDACORP’s same on additional year under strong of related to IDACORP. available other and middle than of us collections of slide XXXX. year operating ratings net Idaho third of liquidity, credit $X the The higher of similar which positions grade we this dividend are payments. was months decrease were regulatory operations compensation maintain $XX.X last of credit income The the quarter plan. Power’s balance equity with end time, XX. nine issuing the first Idaho don’t expenditures than ongoing assets XX. working anticipate

flows far, our to have support expected thus with backstop mechanisms liquidity by affected minimally operating our a and adjustment -- cash While combined expected regulatory our needs. pandemic annual along been from compliant is the capital substantial

earnings As no shows of year planned, our the metrics the which diluted plans our upward required million to additional share. contributed this year. per first to XXXX per its had earnings Justin mentioned share plan nine contributions now months $X.XX guidance, to Idaho this year and $X.XX pension tightened We has range full further IDACORP’s to been Power estimates. and operating plan $XX during in be XX XXXX key further the nor financial Slide of expect to diluted contribute and

of and tax guidance credits, for no Our of assume continues additional sharing conditions to revenue remaining no normal the months use year. weather the

if the be Of course, worsened our could impacted also pandemic significantly. guidance

year the that O&M for the million at the expected Idaho tax year and $XXX our credits of in of decade as equity These the full preserve forward. on going deferrals to quarter last is range current range our during plant preserved have minimum be support decrease Our maintenance consistent thermal million. expense deferrals jurisdictional noted sustained our million $XXX are X.X% to full results discretionary. of in return completed past continuing available of to now $XX cost account strong we the of I efforts are management financial plants to timing guidance, and of now most them the efforts the maintenance to XXXX Current of

as our for million expectations Recall highest amortization fourth the benefited not we distributions to QX finish fourth the investments, X the from years’ significant well results credits, affordable five quarter XXXX. quarter earnings to on to the power range company If were the and continues we of prior of comment a expectation Our I boosted year the as quarters hours. we the perform and brief to million guidance than others where with higher weather on average in current questions. of as this we of the items to average within from during fourth XXXX, we heightened to range. vintage generation hydro are will end tax of call that X.X answer in the recur started Those and normal remains I of XX% and expected year. CapEx quarter, housing XXXX of time. an your similarly guidance megawatt refined Lisa to line that and With if would happy that, expect history those the to with fourth

with first Please Your Instructions] today ahead. Russo comes Sidoti. from question [Operator you. go Thank Brian

Brian. Hi,

are How Hey. afternoon. Good you? Hi.

Brian. Hi,

Hey.

Just curious entities you interesting transmission that it I maybe the just your when dynamic incremental power share shortages the wholesale to system could hoping Is an and during power insight. you is were time east the was more August and transmission of utilizing move revenues wheeling period? west some to there of

great Lisa. this just a it’s hot. This had Brian, got summer. as whole Really, west at We a the happened question. market It when you what and look is disruptions. really some

it really one not so direction. And was generally

opportunity wherever So was the it occurred. arbitrage price

whether it of and in to or middle to sit east the the was So north west we interconnection. south

flowing opportunities, markets kinds have across see you systems. directions as So will transactions in of our many those

then Got Boardman on? the working are transmission Northwest, Pacific dynamics Gateway that projects to the then Okay. question, even maybe of related unfolding currently in you enhance does And Hemingway a the that it. West and value

I Officer answer am Chief Adam that. to Operating have going Richins, our

a It’s great Brian. Hey, Yeah. question.

see these to around intermittent benefits see you going more from huge resources, of decarbonization and transmission. move become popular as are renewable think see absolutely the you you some I need to

in market of the Palo additional were transmission critical the if at Hemingway transmission to having through California Verde look that the would have to In energy the western we States of system. constrained. mid-sea the move and United the Northwest and heat been and between large absolutely our spreads Boardman There kind key fact, whole been experienced during because a would was capacity have region, up lot to you price wave

hitting think I key point. a you So are on

are why in that absolutely to be for critical it’s that’s Boardman Hemingway think we so going matter. to future I West Gateway and on the and bullish

on if the ix of cash just increase it dollars was X%? on month the months, lot million not sheet, a than as the before, why just evaluation hundred month And seems got more it Great. several or for some Okay. you liquidity, balance have details last of what curious

out the dividend? you Brian, a Were asking there minute. about you cut

The your strength Yes. balance increase dividend increase, it given X% why not the and X%? liquidity in more sheet, than

you. do you that want Thank Okay. take one? to Steve,

Sure. looked That’s you you question, reasonable all moment, great, I at I’d Lisa. it’s Brian, ask I at say sit and not would that, where surprised we it. if say, at a this am

have with on road. that. down away we changes continual and And we seen that that and the moved keeping haven’t back capital we from started projected when I amount large sticking that the guess, on You eye our meaningful we to like a in of the provide wanted kind to ‘XX we slope we really are are plan and an of dividend

when you at that look think I current liquidity.

if we industry. in year You short-term a for need we the seeking like year, for And gone, some factor the did. others in near-term, rates. amazing were debt, long-term was options everybody advantage at issues. and would of preferred the next of of turns year know took really have after it some the us, just some not response We options just we the secured the to We which some our probably were certainly to out and of of COVID-XX we inside but that wasn’t it in have it a looked

is an on little ahead. I if It’s dividend I sorry. I a line, on to But everybody hearing side. more question. the hope that, your a are we else getting apologize sticking And the plan answers echo that So of bit am our

Yes. Thank It does. you much. very

Thanks, Brian.

Thank you.

Thank Brian. you,

next ahead. Bank Your question [Operator Julien America. go Please Dumoulin-Smith Instructions] with of comes from

Hi, Julien.

is actually This on Greenwald Ryan Julien. Good for afternoon, everyone.

Okay. Oh!

Ryan. Hi,

our Thanks for questions. taking

to back the… maybe So

Yeah.

nation are kind … updated the nuances you there? load the spiking reads again Can into COVID’s seeing you across the as there just of guidance, and XQ any of I trends color talk kind and early appreciate about here.

is one to This Yeah. obviously sort of Lisa. is hard That predict.

was normal our continue commercial residential weather We get in off We little, -- that be sort see back our interesting that’s great levels, loads more increases Small sort had a a normalcy. are but trying we continues to a have to season. some for related. reason, more too coming lot historic irrigation coming as to will. that We believe levels, if to large a of back commercial you people to of commercial seen good back

be we know don’t if wildcard appetite that whatever It’s I happens there’s trying of what But happens. but into certainly keeps I economic it it, the sort to really, will the virus have we it. that don’t with never other shutdown, is growth So go political for think, foresee back the and some be of for just stopped. side the are story we to coming. ready if

and And both residential that’s businesses. so in

are place every for really and very going would growing -- will excited, it fastest be is we believe see out that anything the again, we that you there report nation that and we add? Adam, way So Idaho is the some showing comes in time. that as

No.

it I think you hit perfectly.

surprised that necessarily fact these movement sectors by under centers do the education lodging pretty have our in the think building few There’s and the have from office data been terms sectors, are of industrials, we well steady in maybe seen the a dairies I continue pleasantly on of some and to there industrials that pretty aren’t that’s sectors, In the food But well. we and our processing, side. everything conditions. majority large doing healthcare, to

service your Got jurisdiction? regulatory it. suppression a That’s the And you treatment seasons how talk going in helpful. wildfire can and territories, efforts about bit in guys

one I his this I will Adam and Presidents. of hand Vice -- or off to then start will I Yeah. it

our west, had not really impacted is nearly ones you badly have that to -- say because we smaller are -- fairly been there’s hate that, a to our through one few to we now to all almost not the as But season been beyond and here been us it out there. have as large neighbors It’s We has just and and west. fire it, the yet.

certainly we So watching are carefully.

We we sparks risk looking like equipment are operate, off vegetation some mitigation not throw they management, together that. things looks at at and those have when are other areas equipment -- does put that plan a and monitoring high we that

we So are that? regulatory to good. making then are on as to everything sure I as will treatment really doing Adam, we and fires prevent are mitigate an so so that goes, with let where both update -- can And and take far, far that we give we want do you one,

you that file Yeah. going to comprehensive and are your consequence. what in have it what finalizing It’s with Oregon approach Idaho similar is, of some probability plan I comments done I it mean mentioned, neighbors Lisa, management very are and -- think neighboring in there we have that based our utilities. we to management to essentially considers and point, to risk plan through and wildfire our and at some we walks approach a relates do wildlife do Commissions, you California our utilizes with as it wildfires, seen a

of so we there. the And will that’s kind approach take

wildly but As to had replace fire respond on to we knock year, poles year Lisa and wood. out. some from have responded have by to been normal pretty distribution fires, outages what again, to nothing had year in small it’s caused We a different and several mentioned,

been the strategic curious framing valuation have pivots obviously large any across are guys M&A kind there’s developments and bunch actions? thoughts potential you lastly, how space and just of just seen maybe we discrepancies, then kind And a about strategic of it. of Got

Well, -- comment we don’t history has on been we our M&A. that really

that would our comment. So think I be

the all time. Appreciate enough. Fair

Thank you.

Thank you.

Ryan. Thanks,

conference Lisa I session. back for any turn closing question-and-answer our would Grow like remarks. to concludes the This over to

Thank speaking we but hope We many you. continued Conference on as It will November seeing these on wish Florida, EEI interest a you I and Thank -- and you again. what have you we forward during if certainly good do as participating to in our we all the of call with nearly you look today. evening. great Virtual Financial in not and you all to and have you XXth. IDACORP is guess, for Xth health in appreciate seeing I all Thank really circumstances. fun do I your

attending has concluded. Thank for This conference today’s now you presentation.

disconnect now may lines. your You