IDACORP, Inc. (IDA) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Diluted Earnings Per Share (Q2 2025) $1.76 compared with $1.71 for last year's second quarter, a year-over-year increase driven by strong operational results and additional tax credit amortization.
Diluted Earnings Per Share (First Half 2025) $2.87 versus $2.67 in 2024, reflecting additional tax credit amortization of $36.5 million in the first half of 2025 compared to $20 million in the first half of last year.
Additional Tax Credit Amortization (Q2 2025) $17.2 million compared with $7.5 million in the second quarter of last year, driven by the Idaho regulatory mechanism.
Customer Base Growth 2.5% since last year's second quarter, including 2.7% for residential customers, attributed to new investments in technology, food processing, mining, and distribution warehousing sectors.
Net Income (Q2 2025) Increased by $6.3 million compared to the second quarter last year, driven by higher retail revenues, customer growth, and increased customer usage due to warm and dry weather.
Retail Revenues Per Megawatt Hour Increased operating income by $8.8 million, primarily due to the increase in Idaho base rates from the limited issue rate case filed last year.
Customer Growth Impact on Operating Income Increased operating income by $6 million quarter-over-quarter.
Usage Per Retail Customer Increased operating income by $5.5 million, driven by 49% higher cooling degree days than normal and low precipitation leading to higher energy use for irrigation pumps.
Other O&M Expenses Increased by $11.1 million, primarily due to higher labor costs, wildfire mitigation programs, and related insurance expenses.
Depreciation Expense Increased by $6.4 million quarter-over-quarter, reflecting continued and accelerated capital investment.
Net Nonoperating Expense Increased by $7 million in the second quarter, driven by higher interest on long-term debt and transmission customer deposits, partially offset by higher interest income and AFUDC.
Operating Cash Flows (First Half 2025) $301 million, which was $45 million higher than the first half of last year, attributed to strong operational performance.
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Operating Highlights
Battery Project: Brought a company-owned 80-megawatt battery project online, along with batteries for a 150-megawatt energy storage agreement.
Gas-fired Resources: 2025 IRP recommends more gas-fired resources to provide additional system flexibility and dispatchable capacity.
Customer Growth: Idaho Power's customer base grew 2.5% year-over-year, with residential customers growing by 2.7%. Significant new customer investments in technology, food processing, mining, and distribution warehousing sectors.
Micron Expansion: Micron announced a second high-volume fabrication plant in Boise, similar in size to the first fab under construction.
ValorC3 and Tesla: ValorC3 data centers announced a second location in Boise, and Tesla energized 6 new large EV fast charging stations in Idaho Power's service area.
Transmission Projects: Broke ground on the Boardman-to-Hemingway transmission line and progressing on Gateway West and Swift North transmission lines.
Regulatory Filing: Filed a general rate case in Idaho requesting a $199 million rate increase, a 51% equity ratio, and a 10.4% ROE.
Sustainable Growth: Focus on sustainable and responsible growth, ensuring reliability and affordability for existing customers.
Regulatory Mechanism: Proposed a new depreciation and interest expense tracking mechanism to address regulatory lag and support capital investments.
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Risk or Challenges
Regulatory and Permitting Challenges: Recent legislation and executive orders have introduced new hurdles and uncertainty around the constructability of renewable projects, such as the Jackalope Wind project. These regulatory challenges could delay or prevent the completion of critical energy projects, impacting the company's ability to meet load growth demands.
Load Growth and Infrastructure Demands: The company is experiencing significant load growth, with new customer investments and projects like Micron's second fabrication plant. However, the infrastructure and resources needed to serve this growth are not yet included in the current CapEx plan, creating potential risks of underinvestment and service reliability issues.
Regulatory Lag: The company faces substantial regulatory lag due to its historic test year approach in rate cases. This lag could impact earnings and credit metrics, especially during periods of heightened capital investment.
Economic and Financial Pressures: Higher O&M expenses, including labor costs and wildfire mitigation programs, along with increased depreciation and interest expenses from infrastructure projects, are pressuring financial performance. Additionally, the company is exposed to volatility in tariffs, which could further strain financial resources.
Energy Resource Planning Risks: The company's 2025 IRP forecasts significant load growth but may underestimate future demand, particularly with projects like Micron's second fab not included. This underestimation could lead to resource shortages and higher costs if not addressed promptly.
Hydropower Generation Variability: Dry weather conditions have reduced the high-end forecast for hydropower generation, which could increase reliance on more expensive energy sources and impact cost management.
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Guidance & Outlook
Earnings Guidance: IDACORP raised the lower end of its full-year diluted earnings per share guidance to a range of $5.70 to $5.85, driven by strong operational results in the second quarter. This assumes Idaho Power will use $60 million to $77 million of additional tax credit amortization for the full year, with expectations of historically normal weather conditions and power supply expenses.
Customer Growth and Load Projections: Idaho Power's customer base has grown by 2.5% year-over-year, with significant investments from sectors like technology, food processing, mining, and distribution warehousing. The company anticipates incremental load growth well into the 2030s, driven by projects like Micron's second high-volume fabrication plant and ValorC3 data center expansions. However, the infrastructure and resources needed to serve these prospective customers are not yet included in the current CapEx plan.
Capital Expenditures (CapEx): IDACORP expects to spend between $1 billion and $1.1 billion on CapEx in 2025. This does not account for potential adjustments due to tariffs or additional infrastructure needs for new customer projects.
Energy Infrastructure Projects: The company has initiated construction on the Boardman-to-Hemingway transmission line and brought online an 80-megawatt battery project and a 150-megawatt energy storage agreement. It is also progressing on the Gateway West and Swift North transmission lines, though regulatory and permitting challenges remain. The Jackalope Wind project in Wyoming faces uncertainties due to federal actions, and alternative resources are being identified in case the project does not proceed.
Integrated Resource Plan (IRP): The 2025 IRP forecasts significant load growth between 2025 and the early 2030s, recommending more gas-fired resources to provide system flexibility and dispatchable capacity. The IRP assumes current laws remain unchanged, but the resource portfolio could adapt to regulatory changes.
Regulatory Developments: Idaho Power filed a general rate case in Idaho, requesting a $199 million rate increase, a 51% equity ratio, and a 10.4% ROE. The case also proposes a new depreciation and interest expense tracking mechanism to address regulatory lag and includes a request to incorporate $200 million of additional ADITCs into the tax credit mechanism.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you talk about how many potential connections are in the 3,800 megawatts pipeline?
A:Management did not have the exact number of projects in the pipeline. They mentioned it is mostly data centers with some smaller projects. One data center is included in the IRP numbers, but most of the load is beyond the 5-year window and not included in the IRP forecast.
Q:Is it conceivable that there could be another step-up in the 2027 IRP comparable to previous progressions?
A:Yes, management agreed it is a fair assumption. They explained that the IRP process involves frequent updates with large load customers, and economic activity continues to evolve, which could lead to higher forecasts.
Q:Are you currently thinking of upsizing and pulling forward more of the gas expectation given the tax bill?
A:Management stated that this is one of the scenarios they are analyzing.
Q:Do you have any idea when you'll get a procedural schedule on the rate case?
A:Management expects the procedural schedule to be finalized in the coming weeks, possibly as early as next week.
Q:What are the irrigation impacts in the second quarter?
A:Irrigation load increased by about 15% year-over-year due to low precipitation and high temperatures. On a weather-adjusted basis, the increase was slight. Management noted that irrigation load is very weather-sensitive and not adjusted by mechanisms like FCA.
Q:What is the timeline for Micron Phase 2, and will it start before Phase 1 ends?
A:Management is working through the details with Micron and could not provide specific timing. They confirmed it would be an upside scenario in the 2025 IRP.
Q:Does the '28 and '29 RFPs shown in the slide correlate to the '23 IRP, and how does it relate to the 2025 IRP?
A:Management explained that the RFP process involves evaluating projects and load needs at the time of the RFP. The 2025 IRP indicates a need for over 200 megawatts of perfect capacity annually, which could be met by renewables or natural gas.
Q:Could the Jackalope Wind farm issues lead to a shift to gas?
A:Yes, management stated that if Jackalope is not built due to permitting issues, they would consider gas builds as an alternative.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer to the exact number of potential connections in the 3,800 megawatts pipeline, citing a lack of specific data. They also did not provide a clear timeline for Micron Phase 2, stating they are still working through the details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ADITCs
Boardman Hemingway
CFO Treasurer
IRP Slide
Idaho mechanism
LLC Research
Micron
Oregon PUC
PCA rate
RFP shortlist
Research Division
Senior VP
Slide Idaho
Treasurer Wonderlich
beginning
capital investment
case rate
cost risk
credit mechanism
depreciation interest
energy storage
equity transaction
fab
factor
follow offering
lease accounting
legislation
load IRP
progress
ratio
resource IRP
resource RFPs
sale agreement
treatment
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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