IDACORP, Inc. (IDA) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Diluted Earnings Per Share (Q3 2025) $2.26 compared with $2.12 for last year's third quarter, reflecting an increase due to higher retail revenues from rate changes and customer growth.
Diluted Earnings Per Share (First 3 Quarters 2025) $5.13 versus $4.82 for the first 3 quarters of 2024, driven by additional tax credit amortization of $39 million in 2025 compared to $22.5 million in 2024.
Customer Base Growth 2.3% overall growth since last year's third quarter, including 2.5% growth for residential customers, attributed to robust activity in sectors like manufacturing, food processing, and technology.
Net Income (Q3 2025) Increased by $10.8 million compared to Q3 2024, mainly driven by higher retail revenues from rate changes and customer growth, despite lower usage per customer and higher O&M expenses.
Retail Revenues Per Megawatt Hour Increased operating income by $17.6 million due to rate changes from the limited issue rate case filed last year.
Customer Growth Impact on Operating Income Increased operating income by $7.8 million, resulting from adding 15,000 customers over the last year.
Usage Per Customer Decreased operating income by $5.7 million due to lower irrigation usage caused by higher precipitation and lower temperatures compared to the abnormally hot and dry Q3 2024.
Other O&M Expenses Increased by $4.2 million due to inflationary pressures on labor and professional services, wildfire mitigation programs, and related insurance expenses.
Depreciation Expense Increased by $8.1 million quarter-over-quarter due to infrastructure development and additional assets placed into service.
Nonoperating Expense Increased by $9.8 million due to higher interest expenses from financing growth and a new finance lease related to a third-party energy storage agreement.
Operating Cash Flow (First 3 Quarters 2025) $464 million, $6 million higher than the same period last year, reflecting improved cash flows from rate cases and operational mechanisms.
Annual Revenue Increase from Rate Case Settlement $110 million or 7.48% effective January 1, driven by a settlement with a 9.6% ROE and a $4.9 billion Idaho jurisdictional rate base.
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Operating Highlights
Customer Growth: Customer base grew by 2.3% since last year's third quarter, including 2.5% growth for residential customers.
Infrastructure Development: Progress on Boardman-to-Hemingway transmission line project with several towers completed. Regulatory and permitting processes ongoing for Gateway West and Swift North transmission lines.
Energy Projects: Terminated agreements for 600-megawatt Jackalope Wind project due to policy changes. Planning a 167-megawatt expansion of the Bennett Mountain gas-fired power plant, with construction expected to begin in spring 2026 and completion by 2028.
Economic Expansion: Robust activity in manufacturing, food processing, distribution, warehousing, and technology sectors. Micron's 2 fab projects represent the largest private capital investment in Idaho's history.
New Customer Engagement: Engaging with Micron suppliers and new large customers like Perpetual Resources, which transitioned from permitting to development in its mining project.
Earnings Growth: Diluted earnings per share increased to $2.26 in Q3 2025 from $2.12 in Q3 2024. Full-year guidance raised to $5.80-$5.90 per share.
Revenue Increase: Annual revenues expected to increase by $110 million (7.48%) effective January 1, 2026, due to new rate case settlement.
Cost Management: O&M expenses increased due to inflationary pressures and wildfire mitigation efforts, but the company maintains a culture of measured spending.
Rate Case Settlement: Settlement includes a 9.6% ROE, 7.41% overall rate of return, and $4.9 billion Idaho jurisdictional rate base. Effective January 1, 2026.
Wildfire Mitigation: Filed 2026 Idaho Wildfire Mitigation Plan under the new Wildfire Standard of Care Act, outlining methods to mitigate wildfire risks.
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Risk or Challenges
Regulatory and Permitting Challenges: Recent policy changes impacted the permitting of the 600-megawatt Jackalope Wind project, leading to the termination of agreements for the project. This creates uncertainty in meeting future load growth and necessitates identifying alternative power supply solutions.
Inflationary Pressures: Higher O&M expenses driven by inflationary pressures on labor and professional services, as well as wildfire mitigation and related insurance expenses, could impact operational costs.
Interest Expense: Higher interest expenses due to financing growth and increased interest on transmission customer deposits could strain financial performance.
Customer Usage Variability: Lower usage per customer, particularly in the irrigation sector, due to weather variability, could impact revenue stability.
Wildfire Mitigation Costs: The implementation of the Idaho Wildfire Mitigation Plan and related system hardening efforts could increase operational costs.
Supply Chain and Resource Planning: The need to identify and secure alternative power supply solutions, including natural gas projects and renewable resources, to replace the terminated wind project agreements, adds complexity and potential delays to resource planning.
Economic and Load Growth Management: Balancing robust customer and economic growth with maintaining affordability and reliability poses strategic and operational challenges.
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Guidance & Outlook
Full Year Earnings Guidance: IDACORP raised its full-year diluted earnings per share guidance range to $5.80 to $5.90, reflecting strong operational performance. This assumes historically normal weather conditions and normal power supply expenses for the fourth quarter.
Tax Credit Amortization: Idaho Power expects to use between $50 million and $60 million of additional tax credit amortization for the full year, a reduction from the previous estimate.
Customer Growth and Economic Expansion: The customer base has grown by 2.3% year-over-year, with robust activity in sectors like manufacturing, food processing, and technology. New large projects, including Micron's fab expansions and Perpetual Resources' mining project, are expected to contribute to future load growth.
Transmission Line Projects: Progress continues on the Boardman-to-Hemingway transmission line project, with several towers completed. Regulatory and permitting processes for the Gateway West and Swift North transmission lines are ongoing, with construction expected to begin soon.
Power Supply Solutions: Following the termination of the Jackalope Wind project agreements, Idaho Power is exploring alternative power supply solutions, including short-term market purchases, natural gas projects, and additional solar and battery storage resources.
Bennett Mountain Gas-Fired Power Plant Expansion: Idaho Power is planning a 167-megawatt expansion of the Bennett Mountain gas-fired power plant, with construction expected to begin in spring 2026 and completion by 2028.
General Rate Case Settlement: A settlement was reached to increase annual revenues by $110 million (7.48%) effective January 1, with a 9.6% ROE and a $4.9 billion Idaho jurisdictional rate base. Approval by the Idaho Public Utilities Commission is expected by December.
Wildfire Mitigation Plan: Idaho Power filed its 2026 Wildfire Mitigation Plan, outlining methods to mitigate wildfire risk and harden the system. Approval by the Idaho Commission is expected within six months.
Capital Expenditures: IDACORP expects to spend between $1 billion and $1.1 billion on CapEx in 2025.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What was in the capital plan for Jackalope and what are the potential solutions and timeline for its replacement?
A:The Jackalope Wind project was planned for 600 megawatts, with 300 megawatts owned and 300 megawatts as PPA. The spend was consolidated in 2026 and 2027. Replacement options are being reviewed, including gas and other resources through the RFP process. The Bennett project is one potential replacement, but it won't be a megawatt-for-megawatt replacement. The effective load carrying capability of Jackalope was about 90 megawatts.
Q:Was the Bennett project included in the capital stack in February?
A:A resource was included as a proxy in the most recent capital update, but it did not fully reflect the '28 and '29 RFPs. The Bennett project is an incremental addition since February.
Q:What are the customer growth trends and any notable changes?
A:Customer growth is consistent at 2.3%-2.4% year-over-year. Manufacturing growth is expected to ramp up in the next few years. Total load growth is projected at 8.3% annually over the next five years.
Q:Why did residential customer growth slow sequentially, and what factors contributed to sales growth despite lower cooling degree days?
A:Residential customer growth slowed due to factors like interest rates, seasonal impacts, and potential economic softening. Sales growth was driven by customer growth and manufacturing load increases, despite lower cooling degree days.
Q:What factors influenced irrigation loads and how did they perform?
A:Irrigation loads were influenced by weather patterns, with a warm and dry start to the year followed by rain in July and August. Overall, irrigation loads were slightly up for the year, with steady demand reported by agricultural representatives.
Q:What is the company's approach to replacing Jackalope's capacity and the role of gas in the future?
A:The company is considering all options, including gas, solar, and battery storage. The IRP shows gas plants in 2029 and 2030, but only one gas bid was received in the 2029 RFP. Transmission projects like B2H and Gateway West will also help bring resources to market.
Q:What are the priorities for the next rate case and the potential for tracking mechanisms?
A:The company is evaluating the timing and need for the next rate case, considering elements like tracking mechanisms. The plan is in early stages and will be reported on later.
Q:Could the company earn an ROE above the minimum level of 9.12% as large load customers come online?
A:Yes, as revenues from large load customers increase, the company expects to earn an ROE above 9.12%, reducing the need for rate cases and ADITC support.
Q:How will the loss of the Jackalope project impact the capital plan and CapEx forecast?
A:The Jackalope project will be removed from the capital stack, and the Bennett project will be added. Additional generation resources will also be included in future updates, potentially as early as this year.
Q:What is the expected timeline for the approval of the settlement?
A:The settlement is expected to be approved in December, as has been historically done.
Q:How does the company plan to address its QIP balance and potential equity needs?
A:The company expects near-term equity needs to decrease due to the removal of Jackalope and the timing of payments for replacement projects. Credit metrics are expected to improve with the rate case outcome and the Hells Canyon AFUDC case.
Q:Review of Unclear Management Responses
A:Management avoided giving direct answers or lacked clarity on several topics, including the specific costs of the Jackalope project due to competitive information, the exact alternatives being considered for replacing Jackalope's capacity, and the detailed plans for the next rate case and tracking mechanisms. Additionally, responses about the impact of economic softening on customer growth and the timeline for incremental generation resources were vague.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AFUDC basis
CFO Treasurer
Care Act
Idaho Commission
Idaho Wildfire
Micron
Power tax
Slide customer
Standard Care
VP
Wildfire Standard
affordability
agreement
average
cash side
collection
commission
comparability
development
fab
ground
law
lease
line project
manufacturing
mining
mitigation plan
order
phase
plan Idaho
plant
pre
price
project service
purchase
quarter
rate change
return
sector
settlement
solution
technology
transmission line
usage customer
utility
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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