IDACORP, Inc. (IDA) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects mixed sentiments. Basic financial performance and product development show growth, but concerns about interest expenses, depreciation, and hydropower generation persist. The Q&A reveals a strong pipeline and strategic plans for future growth, yet uncertainties linger due to credit downgrades and vague management responses. The market cap suggests moderate sensitivity, but the absence of strong catalysts or negative factors keeps the sentiment neutral, expecting a slight stock price fluctuation within the -2% to 2% range.
Key Financial Performance
Diluted Earnings Per Share (EPS) $1.21 compared with $1.10 last year, representing an increase. The increase was attributed to higher retail revenues from a January rate increase and customer growth, despite mild weather reducing residential and commercial usage.
Net Income Increased by over $8 million compared to last year. This was driven by higher retail revenues from customer growth and a January rate increase, offset partially by lower usage due to mild weather.
Industrial Energy Sales Grew by 5.7% year-over-year. The growth was attributed to ramp-up in loads and revenues from large industrial customers like Micron and Meta.
Customer Growth Overall customer increase of 2.3% since last year's first quarter, including a 2.4% increase in residential customers. This growth contributed to higher revenues.
O&M Expenses Increased by $13.1 million compared to the first quarter of 2025. The increase was primarily due to higher wildfire mitigation program expenses and amortization of deferred costs associated with the Jim Bridger plant, with much of these costs recovered in customer rates.
Depreciation and Amortization Expense Increased by around $6 million for the quarter, driven by ongoing infrastructure investment.
FCA Revenues Increased by over $19 million compared to the first quarter of 2025. This was due to updates in the FCA mechanism and lower usage per customer in residential and small commercial classes caused by mild weather.
Hydropower Generation Forecast Reduced to a range of 5.5 million to 7.0 million megawatt hours for the year. The reduction was due to low overall snowpack conditions, despite record wet April conditions helping to increase spring season stream flows.
Interest Expense Increased by about $4 million, driven by higher interest expense recorded on a new finance lease and other factors.
Additional Tax Credit Amortization (ADITC) $6.3 million amortized in the first quarter, $13 million less than the first quarter of 2025. This reduction indicates less reliance on ADITC to support earnings, reflecting stronger financial performance.
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Operating Highlights
New Gas Plants: Received CPCN for a 167-megawatt natural gas plant near Bennett Mountain, with an in-service date of summer 2028. Filed CPCNs for two additional plants: 222-megawatt South Hills project (2029) and 430-megawatt Peregrine project (2030).
Battery Storage and Solar Generation: 250 megawatts of company-owned battery storage to come online this quarter. Adding 125 megawatts of third-party-owned solar generation later this year.
Valmy Unit 2 Conversion: Conversion from coal to natural gas to be completed before summer peak this year.
Customer Growth: Overall customer increase of 2.3% since last year, with residential growth at 2.4%. Industrial energy sales grew by 5.7%.
Large Industrial Projects: Micron and Meta ramping up operations. Micron progressing on its first fabrication facility and preparing for a second. Meta's data center in testing and commissioning stage.
New Transmission Lines: Three major transmission lines (B2H, SWIP-North, Gateway West) expected to be operational by 2028, enhancing market access and reliability.
Affordability: Rates remain 20%-30% lower than the national average. Rates increased by 23% over the past decade compared to 41% nationally.
Wildfire Mitigation Plan: 2026 Wildfire Mitigation Plan approved by Idaho Commission, establishing a standard of care under the Wildfire Standard of Care Act.
Cost Management: Careful spending and growth-pays-for-growth system help offset higher depreciation, interest expenses, and wildfire mitigation costs.
Sale of Oregon Service Area: Progressing ahead with filings planned in the next couple of months for regulatory approval.
2032 RFP Approval: Received approval for 2032 RFP aimed at addressing a projected capacity deficit of at least 200 megawatts.
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Risk or Challenges
Hydropower Generation Forecast: The company reduced the top end of its hydropower generation forecast range due to low overall snowpack conditions, which could result in lower water supplies from spring snowmelt. This poses a risk to power supply and revenue.
Wildfire Mitigation Costs: Higher wildfire mitigation costs are expected, which could increase operational expenses and impact financial performance.
Infrastructure Build-Out Costs: Higher depreciation and interest expenses are associated with the company's infrastructure build-out, which could strain financial resources.
Regulatory Approval Deadlines: New legislation in Idaho established a 9-month deadline for the PUC's contract approval process, which could create challenges in meeting regulatory requirements for large load contracts.
Weather Conditions: Unusually mild weather reduced residential and commercial energy usage, negatively impacting revenues.
Interest Expense: Higher interest expenses, including those from new finance leases, could impact profitability.
Hydropower Operating Conditions: Low snowpack and water supply conditions could lead to reduced hydropower generation, affecting energy availability and costs.
Capital Expenditure and Financing Needs: The company anticipates significant capital expenditure needs, requiring $2 billion in equity and $2.9 billion in debt, which could increase financial risk.
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Guidance & Outlook
Earnings Guidance: Reaffirmed full year 2026 IDACORP earnings guidance estimate in the range of $6.25 to $6.45 diluted earnings per share, assuming historically normal weather conditions and normal power supply expenses for the rest of the year.
Hydropower Generation Forecast: Reduced the top end of the hydropower generation forecast range to 5.5 million to 7.0 million megawatt hours for the year due to low snowpack conditions, despite record wet April conditions.
Industrial Energy Sales Growth: Anticipates continued ramp-up in loads and revenues from large industrial customers like Micron and Meta, with acceleration expected during the year.
Capital Expenditures: Plans to spend between $1.3 billion and $1.5 billion on CapEx in 2026, with higher CapEx numbers expected in the 5-year forecast to support growth and infrastructure needs.
Major Infrastructure Projects: Progressing on three major transmission lines (B2H, SWIP-North, Gateway West) expected to be in service by 2027-2028, providing flexibility, reliability, and transmission wheeling revenues.
Natural Gas Plants: Plans to bring three new natural gas plants online between 2028 and 2030 to meet growing customer demand, including a 167-megawatt plant by 2028, a 222-megawatt plant by 2029, and a 430-megawatt plant by 2030.
Renewable Energy Projects: Adding 250 megawatts of company-owned battery storage this quarter and 125 megawatts of third-party owned solar generation later this year. Conversion of Valmy Unit 2 from coal to natural gas to be completed before summer peak this year.
2032 RFP and Capacity Deficit: Received approval for the 2032 RFP aimed at solving a projected capacity deficit of at least 200 megawatts, with additional details on potential resources to be provided in future updates.
Equity and Financing Plans: Plans to establish a new ATM program to meet equity needs, with $2 billion in equity and $2.9 billion in debt projected to maintain a 50-50 capital ratio over the 2026-2030 period.
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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 is the expected timing for the next general rate case?
A:The timing for the next general rate case is not fixed. It depends on factors such as the conversion of QIP plant in service becoming eligible for rate base treatment and the timing and magnitude of large load revenues. Management will assess the situation based on how the year shapes up and future projections.
Q:What is the current status of new large load inbounds and the ability to handle new large loads?
A:The pipeline for new large loads remains strong, with interest from various industries, including data centers, dairy, biodigesters, manufacturing, and warehousing. The company is at maximum capacity for projects between now and 2028 but sees a pipeline extending into the 2030s. Transmission lines and turbines are on track to meet future needs.
Q:How is the company addressing the credit outlook following Moody's downgrade?
A:The company is focused on maintaining a strong balance sheet with a 50-50 debt-to-equity structure. While Moody's downgraded Idaho Power to Baa2, the company is not aiming for an 18% CFO preworking capital to debt metric in the near term. Instead, it plans to blend debt and equity financing, with equity issuances planned for later in the year.
Q:What is the company's approach to the current CapEx cycle and rate relief?
A:The company takes a pragmatic approach, balancing spending and revenues. It will seek rate relief when necessary, especially during growth cycles, but aims to avoid large rate requests. Large load revenues help offset the need for frequent rate cases.
Q:What is the company's strategy for ITC recognition and monetization?
A:The company monetizes ITCs annually through federal income tax returns. It has a sizable balance of ITCs available for future use but does not plan to externally monetize them through sales.
Q:What are the expectations for irrigation sales given weather conditions?
A:Despite low water levels, the company expects irrigation sales to be closer to normal due to factors like warmer weather, average reservoir levels, and increased use of ground pumps. Historically, low water years have not correlated with lower sales.
Q:What is the status of the Micron Fab 2 project and its impact on the capital plan?
A:Ground preparations for Micron Fab 2 have begun, with initial wafer output for Fab 1 expected by mid-2027. The ESA for Fab 2 is still under negotiation. The capital plan includes some early expenditures for Fab 2 but does not fully account for its long-term needs.
Q:What is the company's approach to the 2032 RFP and resource ownership?
A:The company plans to bid on several projects in the 2032 RFP and aims to own as many resources as possible. Historically, it has won about 50% of its bids. The current capital plan does not include resources from the 2032 RFP, and any wins would be additive.
Q:What is the status of the company's equity financing plan?
A:The company plans to maintain a 50-50 debt-to-equity structure for incremental capital. Equity issuances are expected to be front-loaded, aligning with the CapEx profile. The company has executed an ATM program and plans further equity financing later in the year.
Q:What is the status of the company's pipeline for new projects and large loads?
A:The pipeline remains robust, with inquiries increasing since the fourth quarter. The company is updating its load growth rate and expects to reflect this in the next IRP update in Q4.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the timing of the ESA for Micron Fab 2, the exact load growth rate update for the IRP, and the specific impacts of the Iran situation on agricultural customers. Additionally, they used vague language regarding the potential win rate for the 2032 RFP and the exact timing of equity issuances.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ATM program
CFO Treasurer
CPCN Idaho
FCA
Idaho Commission
Meta
Micron
Oregon
SWIP North
Slide Idaho
Slide update
Wildfire
access
affordability
approval
authorization
average
capacity deficit
contractor
couple
deficit megawatt
flexibility
forward
gas plant
headwind
increase customer
industry
load contract
mechanism rate
pay
payment
place
ramp
remark
revenue OM
sale ATM
section
structure
summer
support
transmission line
transmission project
usage customer
use
IDA Transcript
IDACORP, Inc. (IDA) Q1 2026 Earnings Call Transcript
Unknown5-1
The earnings call reflects mixed sentiments. Basic financial performance and product development show growth, but concerns about interest expenses, depreciation, and hydropower generation persist. The Q&A reveals a strong pipeline and strategic plans for future growth, yet uncertainties linger due to credit downgrades and vague management responses. The market cap suggests moderate sensitivity, but the absence of strong catalysts or negative factors keeps the sentiment neutral, expecting a slight stock price fluctuation within the -2% to 2% range.
IDACORP, Inc. (IDA) Q4 2025 Earnings Call Transcript
Positive2-19
The earnings call highlights strong financial performance, increased earnings guidance, and significant customer growth. The Q&A section reveals positive sentiment towards large load projects and future growth, despite some uncertainties. The raised guidance and planned expansions, along with the positive response to regulatory developments, indicate a favorable outlook. Given the market cap, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
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.
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