IDACORP, Inc. (IDA) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call revealed strong financial performance with a 15.8% increase in EPS and significant net income growth. Despite increased expenses, retail revenue growth and customer expansion are promising. The Q&A highlighted management's proactive approach to challenges like wildfire mitigation and infrastructure funding. Although there were uncertainties in some responses, overall financial health and future growth prospects suggest a positive sentiment. Given the $4.7 billion market cap, the stock price is likely to rise by 2% to 8% over the next two weeks.
Key Financial Performance
Diluted Earnings Per Share (EPS) $1.10 compared to $0.95 last year, a year-over-year increase of 15.8%. This increase was driven by higher retail revenues from a rate case increase, customer growth, and incremental tax credits.
Net Income Increased by $11.4 million compared to the first quarter last year, primarily due to higher retail revenues from the January 1 rate case increase, customer growth, and recording incremental tax credits.
Retail Revenues per Megawatt Hour Increased operating income by $11.3 million, mainly from the increase in Idaho base rates from the limited issue rate case.
Customer Growth Increased by 2.6% year-over-year, including 2.9% for residential customers, contributing an additional $7.3 million to operating income.
Depreciation Expense Increased by $5.8 million due to continued investment in infrastructure.
Other O&M Expenses Increased by $7.2 million, driven by a $3 million increase in wildfire mitigation program expenses and a $1.8 million decrease in grant funding for maintenance work.
Income Tax Expense Decreased due to an increase in additional ADITC amortization, with $19.3 million recorded this quarter compared to $12.5 million last year.
Capital Expenditures (CapEx) Forecasted to be $5.6 billion over the next 5 years, double the amount spent in the prior 5 years.
Debt Issuance $400 million issued during the quarter, contributing to a slightly debt-heavy balance sheet.
Cash on Balance Sheet Significant cash balance primarily from the March debt issuance, intended for funding infrastructure projects.
External Financing Needs Estimated at $1.4 billion in equity and $2.2 billion in debt over the next 5 years to maintain target capital ratios and fund projects.
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Operating Highlights
Battery Projects: Our 80-megawatt 2025 battery project is on track to be operational later this spring, along with a 150-megawatt storage agreement.
Wind Project: Agreements on the 600-megawatt Jackalope wind project, 300 megawatts of which will become our first company-owned wind resource, are pending approval from the Idaho Commission.
Solar PPA Project: A solar PPA project associated with our Clean Energy program also came online.
Customer Growth: Our customer base has grown 2.6% since last year's first quarter, including 2.9% for residential customers.
Chobani Expansion: Chobani announced a $500 million expansion of its facility in Southern Idaho, increasing production by 50%.
Tractor Supply Company: Tractor Supply Company broke ground on a new distribution center in Nampa, representing an investment of nearly $225 million.
Hydropower Generation: The hydropower generation forecast has improved, with expectations of 7 million to 8.5 million megawatt hours for 2025.
Rate Case Filing: We submitted a notice of intent to file a general rate case in Idaho as early as the end of May, expected to take approximately 7 months.
CapEx Forecast: We expect to spend $5.6 billion on CapEx over the next 5 years, double what we spent in the prior 5 years.
Regulatory Strategy: We are considering requesting the Idaho PUC to allow Idaho Power to add additional investment tax credits to the mechanism.
Wildfire Mitigation Plan: Idaho Power has had a wildfire mitigation plan in place for several years, actively enhancing it with new technologies.
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Risk or Challenges
Regulatory Risks: Idaho Power submitted a notice of intent to file a general rate case, which is expected to take approximately 7 months, with rates effective no earlier than January 2026. This filing is necessary to recover substantial capital investments, indicating potential regulatory challenges.
Tariff Monitoring: Idaho Power is actively monitoring tariffs and executive orders, particularly concerning battery storage assets, which could impact ongoing projects.
Supply Chain Challenges: The company is reviewing countries of origin for supplies and potential impacts of tariffs on battery storage assets, indicating supply chain vulnerabilities.
Economic Factors: The company noted that customer growth and economic expansion are driving the need for additional system investments and power purchases, which could be affected by broader economic conditions.
Capital Expenditure Risks: IDACORP plans to spend $5.6 billion on CapEx over the next 5 years, which is double the previous 5 years. This significant investment carries risks related to financing and execution.
Debt Management: The company has a slightly debt-heavy balance sheet due to a recent $400 million debt issuance, which could pose risks if not managed properly.
Wildfire Mitigation Costs: Increased expenses related to wildfire mitigation programs and insurance could impact overall operational costs.
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Guidance & Outlook
Customer Growth: IDACORP's customer base has grown 2.6% since last year's first quarter, including 2.9% for residential customers.
Capital Expenditure (CapEx): IDACORP plans to spend $5.6 billion on CapEx over the next 5 years, which is double the amount spent in the previous 5 years.
Hydropower Generation: The hydropower generation forecast has improved, with expectations ranging from 7 million to 8.5 million megawatt hours for 2025.
Infrastructure Projects: IDACORP is actively working on several infrastructure projects, including a 80-megawatt battery project and a 600-megawatt wind project.
Regulatory Filings: IDACORP plans to file a general rate case with the Idaho Commission by the end of May, expecting rates to be effective no earlier than January 2026.
Earnings Per Share Guidance: IDACORP reaffirms its full year diluted earnings per share guidance range of $5.65 to $5.85.
Operating and Maintenance Expense: Full-year O&M expense is expected to be in the range of $465 million to $475 million.
CapEx Guidance: IDACORP anticipates spending between $1 billion and $1.1 billion on CapEx in 2025.
Tax Credit Amortization: Idaho Power will use between $60 million and $77 million of additional tax credit amortization.
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Shareholder Return Plan
Shareholder Return Plan: IDACORP has not announced any specific share buyback program or dividend program during this conference call.
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Key Q&A
Q:Do you expect any changes to your wildfire mitigation plans on the back of that legislation?
A:We don't anticipate any changes in the program. We are hard at work at deploying that now.
Q:What kind of mechanisms or trackers might you be contemplating filing for to improve earned ROEs?
A:We're considering a number of different options, but the details are still sort of in flux.
Q:Have you noticed any effects on the agricultural community due to the chaotic period?
A:It's a little bit too early to tell, but there are concerns due to uncertainty.
Q:Can you give us any thoughts on the mitigation efforts you might put into the filing?
A:We need to spend to meet our customers' needs, so we will continue to file rate cases more frequently.
Q:Do you have any capacity to propose anything along the lines of a multi-year mechanism?
A:We're willing to talk with them about any sort of creative solutions.
Q:Would you be hopeful for another step at the legislature to codify more direct limitations on potential litigants?
A:We feel like this has been a good step to define what a standard of care plan looks like.
Q:Have you revised your thinking on when you need your next dispatchable resource?
A:We're in the process of doing that right now.
Q:Are you seeing additional or incremental large load customers seeking interconnection?
A:We are still seeing the same inquiries.
Q:If there are new large load customers, would that be captured in the 28 and 29 RFPs?
A:It would depend on what year they would start.
Q:What is the status of contract negotiations with another data center?
A:Yes, that is still ongoing.
Q:How should we think about the timely recovery of transmission projects?
A:We're looking at the rate case and other potential mechanisms to help provide more timely cost recovery.
Q:How much capacity is in the short list acknowledged by the OPUC for the 2028 RFP?
A:It's several hundred megawatts, maybe even more than that.
Q:Was there anything in the wildfire legislation that you were hoping to get but was not included?
A:I can't think of anything off hand that we wanted that we ultimately didn't get.
Q:Do you see the company looking to push for a fund for wildfire mitigation?
A:It's something we could certainly think about, but it's also important to remember we do have insurance.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific details of the mechanisms or trackers they might be contemplating for the rate case, stating that the details are still in flux. Additionally, they did not provide a clear timeframe for the next dispatchable resource, indicating that they are still in the process of determining that.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ADITC amortization
AFUDC
Investor Relations
Officer
Power service
President Chief
Relations Manager
agreement
amount capital
balance sheet
capital plan
commitment
country
customer demand
debt amount
decrease Idaho
energy capacity
expectation result
factor
foot
holder
increase Idaho
infrastructure project
intent
megawatt wind
mode
permitting
plan Slide
price
proceeds
production
progress
project Slide
project megawatt
rate decrease
result Slide
sheet debt
speed
spring
steel ground
wildfire mitigation
year plan
IDA Transcript
IDACORP, Inc. (IDA) Q3 2025 Earnings Call Transcript
Positive10-30
The earnings call highlights strong financial performance, including a raised earnings guidance and significant customer growth. Despite challenges like the Jackalope project, the company is actively seeking replacements, indicating proactive management. The Q&A section reveals optimism about future ROE and improved credit metrics. While some management responses were vague, the overall sentiment remains positive, driven by strategic growth plans and increased revenues from rate cases. Considering the company's market cap, the stock price is likely to experience a positive movement, potentially in the 2% to 8% range.
IDACORP, Inc. (IDA) Q2 2025 Earnings Call Transcript
Positive8-1
The earnings call showed strong financial performance with EPS and net income growth, supported by customer base expansion and increased retail revenues. Despite some uncertainties in project timelines and hydropower generation, management provided optimistic guidance. The Q&A revealed potential for further growth, particularly with data centers and gas projects. The market cap suggests moderate volatility, aligning with a positive stock price movement prediction of 2% to 8% over the next two weeks.
IDACORP, Inc. (IDA) Q1 2025 Earnings Call Transcript
Positive5-1
The earnings call revealed strong financial performance with a 15.8% increase in EPS and significant net income growth. Despite increased expenses, retail revenue growth and customer expansion are promising. The Q&A highlighted management's proactive approach to challenges like wildfire mitigation and infrastructure funding. Although there were uncertainties in some responses, overall financial health and future growth prospects suggest a positive sentiment. Given the $4.7 billion market cap, the stock price is likely to rise by 2% to 8% over the next two weeks.
IDACORP, Inc (IDA) Q3 2024 Earnings Call Transcript
Positive10-31
The earnings call reflects positive financial performance with EPS and net income growth, increased cash flow, and raised guidance. There are strategic investments in infrastructure and renewable energy, alongside regulatory rate increases. The Q&A indicates a focus on growth, with potential for double-digit earnings growth and a positive trajectory for tax credit usage. Despite some unclear responses, the overall sentiment is positive, with a raised earnings guidance and substantial capital projects. Given the market cap, a positive stock price movement of 2% to 8% is expected over the next two weeks.
IDA Slides
IDA Report
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