IDACORP (IDA) 1 May 212021 Q1 Earnings call transcript

Welcome to IDACORP's First Quarter 2021 Earnings Conference Call. Today's call is being recorded, and our webcast is live. A complete replay will be available later today and for the next 12 months on the IDACORP website. [Operator Instructions] I would now like to turn the call over to Justin Forsberg, Director of Investor Relations and Treasury.

Thank you, Kavita, and good afternoon, everyone. and release IDACORP's and issued quarter our we earnings XXXX Form morning, posted website to first This XX-Q. The are slides also call available on that our website. accompany today's number We'll the refer slides by to call those today. throughout

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

call, and Keen, Lisa Vice shown on have Financial Officer. Grow, on Steven and we Officer; President today's IDACORP's IDACORP's and Executive Chief X, Slide President As Senior Chief

last its balance over we from share customer and closer include pre-COVID-XX share, stipulation. be also have usage IDACORP the utilize first are provide earnings to We per Steve XXXX the estimates Q&A assume tax that $X.XX, as after support our quarter credits a estimates diluted as session with Idaho year today, an in earnings to of our normal of representatives Power XXXX through additional quarterly per $X.XX levels regulatory the weather to for $X.XX These expectation any year. are of returning conditions need results. settlement that available $X.XX not per and guidance the full under in year Idaho progress increase will of available those share to first the earnings in quarter. we and to our diluted Today, year's affirmed XXXX company shows IDACORP's Slide range Lisa of financial four updates. other our were also

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

thank everyone Thanks, to Justin, us and today's you on call. joining

XXXX. have start We had a great to

environment, As our looking work forward customers and of a reconnecting year possible. in normal we next with to move to person over more employees closer you the many when are

begun normal we conditions months. a in operations continue to company manner, to will Our some and allow trends are hopeful work our health resume the in has carefully working coming planned phased, normalize to

X.X%. For for rate this of service prove Idaho connections, year but the accelerated to as rate growth. continuation an In up they of March X, are annualized we strong employees up saw is customer of our that on quarter growth noted challenging as first the customer a task. we Slide continue saw alone, growth the keep Power, This with

to area service area and a below overall Power's expansions for now Idaho continue outperform Looking life X.X%, announced environment area large Power's X, our load within well publicly attractive. energy such in continues economy On load Idaho's Unemployment within remain factors of see projects. The remaining trends. we Idaho growth inquiries business-friendly suggests few and robust our Other you'll large to national as strong. expect service is ahead, highlighted Slide for down projects demand as remains quality in service XXXX, now even relative in to growth The forecast now our national XXXX of the growth XXXX. continued service employment total in robust has XXXX calls Moody's the decline modest in the a X% strengthened GDP X.X% average. projecting X.X% March rate X% and national forward and for after service its in level, our area since declined modest service our Moody's of economic for at experienced of strong a last area X.X% going reported area, growth year. predictions to

project. We cause and for need expect to That Power result expand as transmission reliability. sustained as Idaho the continue and serve its in need other procure to growth including distribution for customer may Boardman that the Hemingway maintain enhance new future to Idaho growth growing system and energy the and loads will system existing Power infrastructure, to sources of also well to capacity to

energy analyzing capacity time, of same procurement potential resource We at on resource options for are working our in the plan. while, and the integrated process the XXXX

process a IRP will little to that our length model near the and early early too for in planning seeing for results our other general are unit, timing in to the Bridger in tell North what Jim exit of coal-fired mean second of unit system project exit transmission declining We the tell the the -- at high-voltage showing for It's early timing of XXXX term. upgrades. line Valmy, plant expansion us system

estimate can the a we factors meet there energy are grow that While needs. projected that that in possibility expenditures beyond capacity the many required could capital February the to impact the results, there is ultimate shared and

items see X. highlighted on Slide You'll the I mentioned of some

Hells at reliability, with quarter, We for critical Last the at That the timing have as cost and our Power energy need does hard we significant Idaho XX challenges Idaho growth, as look we relicensing our a completion many and look stated not remains or there regulatory case. plan in and file general roles case project acquisitions future Canyon, rate exciting we of while of is next clean constructive XX sufficient need timing today months. all goals. in for and next the work play management such the effective outcomes, customers major Customer a the affordability we general rate energy Oregon ahead capacity resilience months. resource of to true ensure the dates as to as supply balancing

Mitigation expected received Idaho As to in capital part its expenses, requested including the that to case generally costs expense recently necessary protect O&M of I'll has investments Plan WMP. of enhanced of vegetation management, defer earlier from depreciation of and our Utilities in that Wildfire comments Idaho briefly portion published its authorization few Public be past Power Idaho month in update our the The and overall devastation supportive enhance implement prevalent with specified for insurance infrastructure highlight been regulatory to to the other years. our Commission. We some were the efforts this states strategy, or certain an Western

at expect to currently five approximately the expenses years. a are As in IPUC, awaiting we and million in next and incremental work $XX pending order. a is case commission capital $XX we over reminder, wildfire-related The infrastructure incremental million O&M spend for the still

As rely accumulated as you in to Power's factor other a well weather below-average aspects in customers' operations. We is all our important meet know, needs Idaho our snowpack and healthy precipitation. overall on an reliably mountains affordably. wildfire winter, of risk This as

with it will the summer and reservoir is we average. seasons hydropower relatively our upcoming likely entered that so we spring expect be conditions lower However, than generation customers, water XX-year strong healthy storage irrigation though for

customer expect able through the You stretched, be see readiness, Administration is will system and our dry summer on most balance Oceanic from from the the and most conditions that demands. hot suggest recent to when system way, reliable we Preparations to May for July. National Slide are under to and Atmospheric meet and eight projections

of Oregon resource overview changes reminder, over reduce significantly As our Idaho weather. that in Steve power our for will the costs in related quarter's financial and supply greatly associated to mechanisms things adjustment a an and with that, volatility can due earnings to I mix fluctuate performance. to cost power And hand first

Lisa. you, Thank

year first XXXX Altogether, period accelerating you'll impacts growth Let's now by move and the financial Overall, transmission in quarter a $X.X first the to start our customer positive compared strong from X, Slide to we to as higher was results net see quarter income where had XXXX revenues. IDACORP's XXXX. with same million.

to million see wheeling-related you'll usage in a modest due changes, net income. usage Idaho was winter on overall colder higher in XX% last. to due tariff revenues growth open Lower to The quarter-over-quarter down weather volumes well customer last in largely contributed October customer per Southwest Colder a in as table wheeling transmission result increased quarter. increased weather the customer. operating transmission versus partly was increase million that was Power's $X.X increase as this access $X.X of to residential impact, table due shows by change The this the next volumes to relatively rate transmission decrease costs. to partly a the U.S. added commercial higher X%, COVID-XX usage XX% wheeling million. This year reflect per offset $X.X On the

table, in shutdown. plant coal Boardman the from our place the by to other regulatory maintenance due corresponding costs cost-saving activities plant. mechanism million. and the $X.X exit Power's timing cloud-seeding Idaho as at of to decreased was the due owned expenses related were jointly This portion also on revenues A O&M and of initiatives savings associated Next primarily reduced that's the both with its to XXXX in and operating

to travel recent above will costs see levels our take continue and in to We remains training related for to debt COVID-XX allowance and collect. bad decreases while likely employee longer

impact, Our deferral net however, remained nominal.

net to we cost. impacts monitor continue state the will recovery whether for seek We increased ultimately any by determine to

to of to flows first middle increase raising XX. us collections share ratings resulted this Power's do ongoing Idaho led are income pre-tax of higher we of regulatory $X.X were Idaho with $XX pension sheets, under timing last assets investment-grade Finally, Cash mostly to fund the this liabilities. on The IDACORP related was an Idaho in liquidity collectively quarter. expenditures capital about increase equity Slide to including fluctuations, dividends March $X.X as IDACORP's included XXXX. continue of contributions positions IDACORP's and and capital balance end and tax which net our enables capital increase year's facilities time, million The million net higher an our available and liquidity the cash any liquidity, to income of and than working owners. not Slide XX. on anticipate in of earnings Power's of is and million. maintain operations strong The timing operating distribute quarter. expense of flows along the in Power to credit shown credit At changes from sound the

operating backstop and have combined Slide guidance earnings our expected support and and regulatory annual from cash been current with metrics shows needs. substantial affirmed our XX financial affected liquidity, operating is expected a our by estimates. our far, pandemic full our along mechanisms, adjustment While capital XXXX year year thus flows minimally to the

in to We be IDACORP's for months the XXXX as conditions share operating the year. normal we the expect $X.XX nine and range weather to continue remaining $X.XX to of of earnings diluted assume per

the to We year also progresses. impact continue assume moderate pandemic as

credits use tax still XXXX. guidance no Our in assumes Power additional Idaho will

negatively course, pandemic the could impacted guidance worsens or Of significantly our reason. economy the for or be if other

$XXX the the It's so of to range say being the in a to to remains ninth $XXX off guidance that good expense million, year million fair for level start. is the relatively challenged O&M year by keep full O&M growth to straight are of we expecting. goal expected Our we're flat this

bit expenditures $XXX of also range the We capital this our million to we forecast year, in affirm February to which million. increased for a $XXX

has to With X.X million expectation the Lisa earlier Our in answer will somewhat I to the on to expected presented of and happy now be your conditions megawatt given generation be questions. hours. of Lisa hydro million the is that, range and softened others call and X.X

question of comes Bank America. first Greenwald from our And Instructions] with Ryan [Operator

everyone. morning good Hi, the time. Appreciate

customer and keep start, you coming quarters a you about guys guidance, kind seemingly. seasonality here, at of quarter would and off Can takes got you're the the comfortably kind to and remaining and guidance intact of to to accelerating imply maybe the kind just a of puts things just this range? starting talk this decision of normalize bit above strong growth So

Sure, Ryan.

quarter little you but look quarter. it quarter, historic biggest always pattern earnings a pattern by is varies has and that our been third the bit at quarter If our the --

quarter leads timing. get a so and it often bit, into Second better you

that and summer need So we while of into weather before of confidence we're together. from things control really to with all lot so we quarter we first a that have happy that don't holds good a a get much, perspective maybe

for get summer. into to way on So we us that until it's be pretty normal boldness waiting

what of Got terms line it's of deeper potential of potential in terms to of the base for and half it. can and know of time bit robust potential And back how thinking ahead? dive but of then you're a bit growth, additional in rate you come opportunities I years about energy guys early, a procurement in the this against magnitude kind would

that Why is you why we Yes. -- don't Lisa. this Adam, don't question? take

it. Sounds good. big that significant is Ryan, you growth a part mentioned of

need resources based think transmission two to cause to some us And One is seeing it outside I of the our these will borders. what we have models, also in appears on generation things so it today, XXXX in a running sources IRP. constraints occur. range, We're some not we're things this the likely still know earlier maybe than looks additional is like thing. expected XX generation it we But may for-sure the the

constraints, also transmission to Gateway the continuing for transmission the we're investments like West. and BXH With need see

XXXX, So Right we'll an those. And we we're in for is these growth know. scheduled as an need keep keeping again, eye just resource a now, on eye see BXH constraints to transmission earlier. if you some of on

have I probably last new just not ago, rely better numbers IRP not a be will year a it's really be away estimate. you year, IRP firm to later finalized can Yes. -- on Ryan, think our you got far give that because that we more may that this out we and our before thinking

Great. time. Thanks the for

Ellinghaus And Williams. from Siebert our next question Chris with comes

caused versus acceleration further in customer of March part quarter? the in the what sort earlier the growth of Hey,

wish Boy, knew. I we

a -- been think been several a lot things. by it I driven what in-migration of is has there's lot the --

it a refugees been sort have out are middle some were Idaho. move, weather, that or of told of getting make it's people certainly coming the is winter. -- that that easier, nicer to it's not political somewhere. to business moving waiting somewhere, of away in The Some might We of it estimate from climate, maybe

there's think the of down, then, And of combination reopening. just just going I course, having COVID, a schools So numbers things.

don't of a It's making move. people that like of anything I we to incredible an this can think my actually timing of think some thing been time. though. just have haven't influenced I -- might that seen watch I in

for challenging and exciting sure. been it's So

I have some of anecdotal say, but this are moved people talked to now the eight comment, that friends coming. in, relatives from ago few and cost those months X, or Chris, is areas. an of think And Yes. who pretty I've is a living had dramatic

out what find and and profit have dollars spreading they had nice really here be so a where -- they here nicer than come where a And friends a to just they place they this can seemed to. was to person come of he extra news make family place and come they're at, nice they that maybe the to It can have sold. found lot really to be

be could magnification from So word mouth, of I think it little a too.

Sure, yes.

COVID pre happening as was growth think I well.

yes, I all And things so of I think those -- think combined.

of the O&M something can quarter, gets the for reduction quarter, The aspect dry assume the we of Okay. cloud-seeding second with the that that that's picked forecast? in sort up particularly

the happens only that No, in winter.

So we seed possibility there's don't unless snow. for

Yes.

attribute that think over piece. the was course it's pay to on going a the cloud I seeding. some the others going we a think some have the has to savings year I get we it that outs there's I match to that it we piece with itself on I of outflows. of do work to And it's inflows And some the -- just that bit that. issue, I we're of out the wouldn't for think as timing think and to Yes, think how extent, little And a do of then of -- expenses. ins of hang

it's a major not plan in So anything. shift or the

Okay.

the you snowpack the actually the quarter normal, mentioned not. above So that was was Lisa, precipitation but in

hydro precipitation at comparing by and when captured actual, the the snowpack sort think versus situation sort do are where system rainfall reservoirs hydrological about the you're or that say, gets we you how of sort we with reservoir -- think of looking about in? the your So of that in your

great another Yes, question.

March dry had actually we and a So April. really

the -- rain often form we we of didn't sort of so the additional precipitation that do. And in get that

off, snow function had nature off -- so it And we the so the that's and as well. how cold, got Right a now, mother of comes didn't really quickly. as it come that snow

still the up So picked snow reductions when and did in -- was because hills, irrigation we dry, got the if it you up, the we saw in will. flows

dry -- hydro not kind day, putting I'm of That's that sort grateful -- -- May the And There's customers. the and serve for we're and again, so adjustments hopeful. watching. our that. out the that and in comes my timing that for do, hoping my saves how the times making see just season real in period when been all lower that. that's have we or but in storage, we're for wet super But rest now, come how of it's preparing think optimistic. time, it's just are the we'll of right But it we're necessary to I a universe will we what reservoir really brings. So still off certainly we're with and

Okay. last. One

I is that out needing summer. perspective, our lift lot irrigation reserves know then pump of on to part the you've gives Chris, the that some side. focused the it actually usually a the But pull water, from us in

setting they short it's wouldn't So earlier where years. doesn't using of plenty for until they than some can't June, say the looking it's seasons appear had water a they But for didn't be right sure rolls get there, not kind -- like Certainly up irrigating of that rest how now. hopefully water. it shortages assuming that should of disappointing year. start this that would there's them, really out. be that and We've It the couple spring

Ag Okay. the Yes, was at ask you quite extraordinary prices going I are moment. to about this.

are the the to shouldn't dry that we again So in Is irrigation their expect for summer? I assume reason with and any aggressive outlook. being farmers there planting strong be

way. it's We that up think shaping certainly

they it when see. That's like have right But Yes. it to the feels pump with electricity. that the that's It now. May from sky, Occasionally, we'll like end. been kind need a rains back of falls a to we've really. we'll from -- that doesn't feel then disappointed. normal don't It powered -- the And start

We like spring, have a Idaho think of feels had and dry slowed wet where like And us that often summer, springs it's Diego. beautiful a are San couple I kind in of this it down. feels springs

quarter, transmission was from you sort of February they Last the this But wheeling? first little seem benefit think quarter it bit. thing. extraordinary? weak end offset getting you more wheeling a for call and year, transmission the up of storminess. to One of kind Would a do normal did was kind quarter some Or you

Adam too every be there's like feels But probably would something. and I visited yesterday, that extraordinary, year, And not about just much it believe. to say. Maybe this been I

this in there move prices that happened that maybe So there's was is weather and the But get issues, feeling didn't really down Texas another most of kind thing kind decide happens, imbalance in areas, cold its that it's we that out different like something year. people when power, differences I see It business had of of years, when there. it And we they to that's some plan. guess. when

we last But the have to So year. just sorts for maybe of interruptions during caused least been don't up years, for is. show that new this like different sure normal us what somewhere at know three the there's

Yes.

to whether it's it's fundamental really say a So hard that or is driven.

All you. right. Appreciate it. Thank

Yes.

is five forward. goes our least Chris, moving direction perspective. only going a for in an trend too, add, the last be right how have increase But this is area, summers we'll might tell it's to happen that's see to in at the volumes. But what I to it seems the we will Adam. it this thing so from The difficult experienced

Thanks. Okay.

what -- that that, thing other we transmission I we're why to general. in a as would on bullish signal add the And is is

Thanks okay. so much. Right,

you. Thank

Brian with from next Russo our question Sidoti. And comes

resource. what grow? new So need discuss need? on size out, Boardman pushed it resource getting need too a that in to the might keeps potential for size Hemingway of And to does if just back energy early you Is

will I under well is think as -- this his... have Adam as one I he's take IRP the

significant like Absolutely. need running seeing it a at feels load we're determination is, a on IRP. things. The this the might growth. early. it couple little point, of there. But still One bit XXXX is different I of Brian, again, this we're depend the the size feels Like said, through

decreasing the one does during that do is we to think of the meet transmission continue? on into scarcity. is seeing summer we the peak. things in is the of I help we're what the other that because transmission to So energy And those imports ability to tend our lines -- and market the borders import rely thing our is

forward. see a So to our that, If market, on yes, test transmission to were then in increase available, out, that would need of the we'll generation resource. is we're size going good we'll what moving understanding and based have what move a BXH need

transmission on then Great. the And question. Okay. back just

in last sort power where mentioned dynamics, And a the there the rate, up of the hot of tariff volumes scenario you Is and did You this could dry, and the set volumes power west summer? you, can you conditions obviously, into that a higher wheeling with transport west that dynamic Southwest. increase? happen same California, summer

answer that. to happy I'm

Yes, ahead. go

That did happen last summer from our perspective.

You And kind is wave when had the between transmission MidC, use time spread high to and our people tend Southern sell a between market which of the to market, those those the market, have the August you frame. Verde prices markets. the heat Palo and in

the conditions, pretty to two heat if between dry saw people would some markets. feels our trade summer, some you again valuable it system transmission So for again, be like, this extreme

back guidance like now dry adjusting Okay. It -- reaffirmed and the for growth, your right O&M Is holding only on you that from is forecast looks is Great. the weather? then just guidance lastly, variable expense your With hot. you again. least And at accelerating it's guidance. load the

our mean I think that's I of biggest -- one, half it's you quarter Brian, typically, about the being third the when earnings. probably would say.

it So -- that one a is quarter. all crucial mean I quarter

load. the Some is of of it's some it irrigation, just

we all hot it that in-migration here over could have it I there good it a be in and way but lot. may show to wish if could impact more the and we a positive people happens such a warm, goes -- that that haven't predict way But granted dramatic impact and the it this think there's will if in up think great at they're higher Now sit because weather been can that conditioning tiers it if because is time. I air other a they're

this quarter four are if just quarters, pushing us. usually answer is not that you -- the probably the reason look at the sizing one for back the go and So and of for

we're usually first quarter. positive a So not on just out jumping

is main reason. that the So

pandemic you of didn't can looks in throw think first -- are really knows. that up. change the all this too. the we of opening good the And year, I In it now. good, improving and kind but see things And right feels coming and who

I under more. So it's belt, got just to we going think get -- we we're our good and a one hope three

Yes. to And nature to try it's our conservative. in be

yes. Exactly,

Okay. Understood. transmission lastly, were And just then earlier. on mentioned you you bullish

it in You Is Gateway on pending development, and/or ease to infrastructure or a the shot term. obviously development ask potentially could is Gateway anything permitting accelerate have in West of that Boardman long there to build Hemingway BXH longer West?

discussion Potentially, it that change, it certainly, if there's could. some having know ITCs interesting. permitting will maybe although necessarily make the don't I

part, it most end make based to the significant permitting. process the on change we're so the a For that wouldn't anyway, timing getting of to

policymakers we're So that the I to desires. needed are that to and to many to get going fact futures now is administration everybody the certainly fact absolutely up like clean that this transmission -- be waking desires so the

those other facilitate don't never certainly the And take some we that we would look nearly not And or but projects whether then part so we is these know. I have it hopeful -- there's that indicated permitted you we in think that good. or I'm at, have will moment, of permitted. projects the at IRP really a that And

Great. Thank much. you very

the to concludes the for [Operator Ms. over session back question-and-answer Instructions] Grow, And will that conference today. you. turn I

interest you and Power, We're I day a But you thank best. you you. it -- very season and continued we certainly my means you Idaho you're here enjoying IDACORP snow in the all hope beautiful which whatever Boise, of I wish all having are Thank tomorrow. will Well, are. where for Great. interest in spring enjoying

very So thank you much.

concludes for participation. call. your that you And Thank conference today’s