IDACORP, Inc. (NYSE: IDA) reported first quarter 2023 net income
attributable to IDACORP of $56.1 million, or $1.11 per diluted
share, compared with $46.3 million, or $0.91 per diluted share, in
the first quarter of 2022.
“Customer growth and economic activity in our service area
continue to be drivers of our success," said IDACORP President and
Chief Executive Officer Lisa Grow. "This growth, combined with
other factors such as an increase in transmission services revenue
and a regulatory order last June, benefited the quarter's
results."
"We are also pleased with the recent progress related to our
Boardman-to-Hemingway project and expect to move forward with
construction of that transmission line this summer," Grow added.
"Increased transmission capacity plays a key role in safely
providing reliable, affordable, clean energy to our customers and
to the region."
IDACORP affirms its previously reported full-year 2023 earnings
guidance to the range of $4.95 to $5.15 per diluted share, along
with the expectation that Idaho Power will use approximately $15
million of additional tax credits available under its Idaho
earnings support regulatory mechanism in 2023. The earnings
guidance also assumes normal weather conditions through the
remainder of the year.
Summary of Financial Results
The following is a summary of Idaho Power's net income, net
income attributable to IDACORP, and IDACORP's earnings per diluted
share for the three months ended March 31, 2023 and 2022 (in
thousands, except earnings per share amounts):
Three months ended
March 31,
2023
2022
Net income attributable to IDACORP,
Inc.
$
56,098
$
46,260
Weighted average outstanding shares –
diluted
50,723
50,660
IDACORP, Inc. earnings per diluted
share
$
1.11
$
0.91
The table below provides a reconciliation of net income
attributable to IDACORP for the three months ended March 31, 2023,
from the same period in 2022 (items are in millions and are before
related income tax impact unless otherwise noted):
Three months ended
Net income attributable to IDACORP,
Inc. - March 31, 2022
$
46.3
Increase (decrease) in Idaho Power net
income:
Customer growth, net of associated power
supply costs and power cost adjustment (PCA) mechanisms
2.7
Usage per retail customer, net of
associated power supply costs and PCA mechanisms
0.4
Idaho fixed cost adjustment revenues
(1.2
)
Retail revenues per megawatt-hour (MWh),
net of associated power supply costs and PCA mechanisms
8.5
Transmission wheeling-related revenues
5.1
Other operations and maintenance (O&M)
expenses
—
Other changes in operating revenues and
expenses, net
(7.8
)
Increase in Idaho Power operating
income
7.7
Non-operating expense, net
2.7
Additional accumulated deferred investment
tax credits (ADITC) amortization
3.8
Income tax expense, excluding additional
ADITC amortization
(4.7
)
Total increase in Idaho Power net
income
9.5
Other IDACORP changes (net of tax)
0.3
Net income attributable to IDACORP,
Inc. - March 31, 2023
$
56.1
IDACORP's net income increased $9.8 million for the first
quarter of 2023 compared with the first quarter of 2022, due
primarily to higher net income at Idaho Power. At Idaho Power,
customer growth increased operating income by $2.7 million in the
first quarter of 2023 compared with the first quarter of 2022, as
the number of Idaho Power customers grew by approximately 13,500,
or 2.2 percent, during the twelve months ended March 31, 2023.
Usage per customer was relatively consistent in the first quarter
of 2023 compared with the first quarter of 2022 as both periods
experienced comparable below-normal temperatures.
The net increase in retail revenues per MWh, net of associated
power supply costs and power cost adjustment mechanisms, increased
operating income by $8.5 million in the first quarter of 2023
compared with the first quarter of 2022. This was due partially to
changes in Idaho Power's customer sales mix, which includes
separate rate tariffs based on customer class. To a greater extent,
the net increase in retail revenues per MWh was due to the June 1,
2022 rate increase for Idaho Power’s Idaho retail customers related
to an order from the Idaho Public Utilities Commission that
authorized Idaho Power to accelerate the depreciation on and
recover through 2030 the net book value of coal-related assets at
Idaho Power's jointly-owned Jim Bridger plant as of December 31,
2020, plus forecasted plant investments.
Transmission wheeling-related revenues increased $5.1 million
during the first quarter of 2023 compared with the first quarter of
2022, resulting from Idaho Power's open access transmission tariff
rates being 1 percent higher during the quarter and due to elevated
energy prices in the western United States in the first quarter of
2023 compared with the first quarter of 2022.
Total other O&M expenses in the first quarter of 2023 were
consistent with the first quarter of 2022, as an increase in
expenses due to inflationary pressures on labor-related and other
costs were offset by lower expenses from planned maintenance
projects compared with the same period in 2022, the timing of
regulatory deferrals, and payment credits received related to a
jointly-funded project.
Other changes in operating revenues and expenses, net, decreased
operating income by $7.8 million in the first quarter of 2023
compared with the first quarter of 2022, due primarily to the
increase in net power supply expenses that were not deferred for
future recovery in rates through Idaho Power's PCA mechanisms.
Higher wholesale natural gas and power market prices in the western
United States increased Idaho Power's net power supply expenses in
the first quarter of 2023 compared with the first quarter of
2022.
Non-operating expense, net, decreased $2.7 million in the first
quarter of 2023 compared with the first quarter of 2022. Allowance
for funds used during construction (AFUDC) increased as the average
construction work in progress balance was higher throughout the
first quarter of 2023 compared with the first quarter of 2022.
Also, interest income and benefit plan rabbi trust income increased
due to higher market interest rates. These increases were partially
offset by higher interest expense on long-term debt in the first
quarter of 2023 compared with the first quarter of 2022.
The increase in income tax expense was principally the result of
higher income before income taxes, partially offset by additional
ADITC amortization. Based on Idaho Power's current expectations of
full-year 2023 results, Idaho Power recorded $3.8 million of
additional ADITC amortization under its Idaho regulatory settlement
stipulation during the first quarter of 2023. Idaho Power currently
expects to amortize up to $15 million of additional ADITC for the
full-year 2023, but did not record any additional ADITC
amortization in 2022.
2023 Annual Earnings Guidance and Key Operating and Financial
Metrics
IDACORP is affirming its earnings guidance estimate for 2023.
The 2023 guidance incorporates all of the key operating and
financial assumptions listed in the table that follows (in
millions, except per share amounts):
Current(1)
Previous(2)
IDACORP Earnings Guidance (per share)
No change
$ 4.95 - $ 5.15
Idaho Power Additional ADITCs
No change
Approximately $15
Idaho Power O&M Expense
No change
$ 385 – $ 395
Idaho Power Capital Expenditures,
Excluding AFUDC
No change
$ 650 – $ 700
Idaho Power Hydropower Generation
(MWh)
6.0 – 7.5
5.5 – 7.5
(1)
As of May 4, 2023.
(2)
As of February 16, 2023, the date of
filing IDACORP's and Idaho Power's Annual Report on Form 10-K for
the year ended December 31, 2022.
More detailed financial and operational information is provided
in IDACORP’s Quarterly Report on Form 10-Q filed today with the
U.S. Securities and Exchange Commission, which is also available
for review on IDACORP’s website at www.idacorpinc.com.
Web Cast / Conference Call
IDACORP will hold an analyst conference call today at 2:30 p.m.
Mountain Time (4:30 p.m. Eastern Time). All parties interested in
listening may do so through a live webcast on IDACORP's website
(www.idacorpinc.com), or by calling (855) 761-5600 for listen-only
mode. The passcode for the call is 3990987. The conference call
logistics are also posted on IDACORP's website and will be included
in IDACORP's earnings news release. Slides will be included during
the conference call. To access the slide deck, register for the
event just prior to the call at
www.idacorpinc.com/investor-relations/earnings-center/default.aspx.
A replay of the conference call will be available on the company's
website for 12 months and will be available shortly after the
call.
Background Information
IDACORP, Inc. (NYSE: IDA), Boise, Idaho-based and formed in
1998, is a holding company comprised of Idaho Power, a regulated
electric utility; IDACORP Financial, an investor in affordable
housing and other real estate tax credit investments; and Ida-West
Energy, an operator of small hydroelectric generation projects that
satisfy the requirements of the Public Utility Regulatory Policies
Act of 1978. Idaho Power, headquartered in vibrant and fast-growing
Boise, Idaho, has been a locally operated energy company since
1916. Today, it serves a 24,000-square-mile service area in Idaho
and Oregon. Idaho Power’s goal to provide 100% clean energy by 2045
builds on its long history as a clean-energy leader that provides
reliable service at affordable prices. With 17 low-cost hydropower
projects at the core of its diverse energy mix, Idaho Power’s
residential, business, and agricultural customers pay among the
nation's lowest prices for electricity. Its 2,000 employees proudly
serve more than 620,000 customers with a culture of safety first,
integrity always, and respect for all. To learn more about IDACORP
or Idaho Power, visit www.idacorpinc.com or www.idahopower.com.
Forward-Looking Statements
In addition to the historical information contained in this
press release, this press release contains (and oral communications
made by IDACORP, Inc. (IDACORP) and Idaho Power Company (Idaho
Power) may contain) statements that relate to future events and
expectations, such as statements regarding projected or future
financial performance, cash flows, capital expenditures, dividends,
capital structure or ratios, load forecasts, strategic goals,
challenges, objectives, and plans for future operations. Such
statements constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Any
statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions, or future
events or performance, often, but not always, through the use of
words or phrases such as "anticipates," "believes," "could,"
"estimates," "expects," "intends," "potential," "plans,"
"predicts," "preliminary," "projects," "may," "may result," "may
continue," or similar expressions, are not statements of historical
facts and may be forward-looking. Forward-looking statements are
not guarantees of future performance and involve estimates,
assumptions, risks, and uncertainties that may differ materially
from actual results, performance, or outcomes. In addition to any
assumptions and other factors and matters referred to specifically
in connection with such forward-looking statements, factors that
could cause actual results or outcomes to differ materially from
those contained in forward-looking statements include those factors
set forth in this press release, IDACORP's and Idaho Power's most
recent Annual Report on Form 10-K, particularly Part I, Item 1A -
"Risk Factors" and Part II, Item 7 - "Management’s Discussion and
Analysis of Financial Condition and Results of Operations" of that
report, subsequent reports filed by IDACORP and Idaho Power with
the U.S. Securities and Exchange Commission (SEC), and the
following important factors: (a) decisions by the Idaho and Oregon
public utilities commissions and the Federal Energy Regulatory
Commission that impact Idaho Power's ability to recover costs and
earn a return on investment; (b) changes to or the elimination of
Idaho Power's regulatory cost recovery mechanisms; (c) expense and
risks associated with capital expenditures for, and the permitting
and construction of, utility infrastructure projects that Idaho
Power may be unable to complete or that may not be deemed prudent
by regulators for full cost recovery or full return on investment;
(d) expenses and risks associated with supplier and contractor
delays on utility infrastructure projects and the potential impacts
of those delays on Idaho Power's ability to serve customers; (e)
power demand exceeding supply, and the rapid addition of new
industrial and commercial customer load and the volatility of such
new load demand, resulting in increased costs for purchasing energy
and capacity in the market, if available, or acquiring or
constructing additional generation and transmission resources, and
battery storage facilities; (f) impacts of economic conditions,
including an inflationary or recessionary environment and
increasing interest rates, on items such as operations and capital
investments, supply costs and delivery delays, supply scarcity and
shortages, population growth or decline in Idaho Power's service
area, changes in customer demand for electricity, revenue from
sales of excess power, credit quality of counterparties and
suppliers and their ability to meet financial and operational
commitments, and collection of receivables; (g) changes in
residential, commercial, and industrial growth and demographic
patterns within Idaho Power's service area, and the associated
impacts on loads and load growth; (h) abnormal or severe weather
conditions (including conditions and events associated with climate
change), wildfires, droughts, earthquakes, and other natural
phenomena and natural disasters, which affect customer sales,
hydropower generation, repair costs, service interruptions,
liability for damage caused by utility property, and the
availability and cost of fuel for generation plants or purchased
power to serve customers; (i) advancement of self-generation,
energy storage, energy efficiency, alternative energy sources, and
other technologies that may reduce Idaho Power's sale or delivery
of electric power or introduce operational vulnerabilities to the
power grid; (j) variable hydrological conditions and
over-appropriation of surface and groundwater in the Snake River
Basin, which may impact the amount of power generated by Idaho
Power's hydropower facilities; (k) ability to acquire fuel, power,
electrical equipment, and transmission capacity on reasonable terms
and prices, particularly in the event of unanticipated or
abnormally high resource demands, price volatility, lack of
physical availability, transportation constraints, outages due to
maintenance or repairs to generation or transmission facilities,
disruptions in the supply chain, or credit quality or lack of
counterparty and supplier credit; (l) disruptions or outages of
Idaho Power's generation or transmission systems or of any
interconnected transmission systems, which can result in liability
for Idaho Power, increase power supply costs and repair expenses,
and reduce revenues; (m) accidents, electrical contacts, fires
(either affecting or caused by Idaho Power facilities or
infrastructure), explosions, infrastructure failures, general
system damage or dysfunction, and other unplanned events that may
occur while operating and maintaining assets, which can cause
unplanned outages; reduce generating output, damage company assets,
operations, or reputation; subject Idaho Power to third-party
claims for property damage, personal injury, or loss of life; or
result in the imposition of fines and penalties for which Idaho
Power may have inadequate insurance coverage; (n) acts or threats
of terrorist incidents, acts of war, social unrest, cyber or
physical security attacks, and other malicious acts of individuals
or groups seeking to disrupt Idaho Power's operations or the
electric power grid or compromise data, or the disruption or damage
to the companies’ business, operations, or reputation resulting
from such events; (o) increased purchased power costs and
operational and reliability challenges associated with purchasing
and integrating intermittent renewable energy sources into Idaho
Power's resource portfolio; (p) Idaho Power's concentration in one
industry and one region, and the resulting exposure to regional
economic conditions and regional legislation and regulation; (q)
employee workforce factors, including the operational and financial
costs of unionization or the attempt to unionize all or part of the
companies' workforce, the cost and ability to attract and retain
skilled workers and third-party contractors and suppliers, the cost
of living and the related impact on recruiting employees, and the
ability to adjust to fluctuations in labor costs; (r) changes in,
failure to comply with, and costs of compliance with laws,
regulations, policies, and orders, including those relating to the
environment, climate change, natural resources, and threatened and
endangered species, which may result in penalties and fines,
increase compliance and operational costs, and impact recovery
associated with increased costs through rates; (s) changes in tax
laws or related regulations or interpretations of applicable laws
by federal, state, or local taxing jurisdictions, and the
availability of tax credits; (t) inability to timely obtain and the
cost of obtaining and complying with required governmental permits
and approvals, licenses, rights-of-way, and siting for transmission
and generation projects and hydropower facilities; (u) failure to
comply with reliability and cyber and physical security
requirements, which may result in penalties, reputational harm, and
operational changes; (v) ability to obtain debt and equity
financing or refinance existing debt when necessary and on
favorable terms, which can be affected by factors such as credit
ratings, reputational harm, volatility or disruptions in the
financial markets, interest rate fluctuations, decisions by the
Idaho or Oregon public utility commissions, and the companies' past
or projected financial performance; (w) ability to enter into
financial and physical commodity hedges with creditworthy
counterparties to manage price and commodity risk for fuel, power,
and transmission, and the failure of any such risk management and
hedging strategies to work as intended, and the potential losses
the companies may incur on those hedges, which can be affected by
factors such as the volume of hedging transactions and degree of
price volatility; (x) changes in actuarial assumptions, changes in
interest rates, increasing health care costs, and the actual and
projected return on plan assets for pension and other
post-retirement plans, which can affect future pension and other
postretirement plan funding obligations, costs, and liabilities and
the companies' cash flows; (y) remediation costs associated with
planned exits from participation in Idaho Power's co-owned coal
plants; (z) ability to continue to pay dividends and achieve target
dividend payout ratios based on financial performance, capital
requirements, and in light of credit rating considerations,
contractual covenants and restrictions, and regulatory limitations;
and (aa) adoption of or changes in accounting policies and
principles, changes in accounting estimates, and new SEC or New
York Stock Exchange requirements, or new interpretations of
existing requirements. Any forward-looking statement speaks only as
of the date on which such statement is made. New factors emerge
from time to time and it is not possible for management to predict
all such factors, nor can it assess the impact of any such factor
on the business or the extent to which any factor, or combination
of factors, may cause results to differ materially from those
contained in any forward-looking statement. IDACORP and Idaho Power
disclaim any obligation to update publicly any forward-looking
information, whether in response to new information, future events,
or otherwise, except as required by applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20230504005325/en/
Investor and Analyst Contact Justin
S. Forsberg Director of Investor Relations & Treasury Phone:
(208) 388-2728 JForsberg@idacorpinc.com
Media Contact Jordan Rodriguez
Corporate Communications Phone: (208) 388-2460
JRodriguez@idahopower.com
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