IDACORP, Inc. (NYSE: IDA) reported second quarter 2024 net
income attributable to IDACORP of $89.5 million, or $1.71 per
diluted share, compared with $68.6 million, or $1.35 per diluted
share, in the second quarter of 2023.
“Higher than expected customer usage in the second quarter,
continued customer growth, and rate changes earlier this year
contributed to strong results in the second quarter," said IDACORP
President and Chief Executive Officer Lisa Grow. "As expected,
higher depreciation from our ongoing system investments to meet
customer and load growth partially offset those factors.”
IDACORP is increasing the lower-end of its previously reported
full-year 2024 earnings guidance to the range of $5.30 to $5.45 per
diluted share, with the expectation that Idaho Power will use
between $35 and $50 million of additional tax credits available
under the Idaho earnings support regulatory mechanism in 2024.
Approximately $25 million of those additional tax credits relate to
expected amortization of incremental tax credits generated from
Idaho Power's investment in 2023 battery storage projects, as
contemplated in the settlement stipulation for Idaho Power's 2023
Idaho general rate case (2023 Settlement Stipulation) approved by
the Idaho Public Utilities Commission in December 2023. The
earnings guidance also assumes normal weather conditions and normal
power supply expenses through the remainder of the year.
Summary of Financial Results
The following is a summary of net income attributable to IDACORP
and IDACORP's earnings per diluted share for the three and six
months ended June 30, 2024 and 2023 (in thousands, except earnings
per share amounts):
Three months ended
June 30,
Six months ended
June 30,
2024
2023
2024
2023
Net income attributable to IDACORP,
Inc.
$
89,520
$
68,574
$
137,693
$
124,672
Weighted average outstanding shares –
diluted
52,236
50,758
51,519
50,741
IDACORP, Inc. earnings per diluted
share
$
1.71
$
1.35
$
2.67
$
2.46
The table below provides a reconciliation of net income
attributable to IDACORP for the three and six months ended June 30,
2024, from the same periods in 2023 (items are in millions and are
before related income tax impact unless otherwise noted):
Three months ended
Six months ended
Net income attributable to IDACORP,
Inc. - June 30, 2023
$
68.6
$
124.7
Increase (decrease) in Idaho Power net
income:
Retail revenues per megawatt-hour (MWh),
net of associated power supply costs and power cost adjustment and
Idaho Fixed Cost Adjustment (FCA) mechanisms
19.6
24.4
Customer growth, net of associated power
supply costs and power cost adjustment mechanisms
5.1
9.8
Usage per retail customer, net of
associated power supply costs and power cost adjustment
mechanisms
6.2
(3.8
)
Transmission wheeling-related revenues
(2.5
)
(3.5
)
Other operations and maintenance (O&M)
expenses
(13.8
)
(27.6
)
Depreciation expense
(7.6
)
(16.2
)
Other changes in operating revenues and
expenses, net
13.9
18.6
Increase in Idaho Power operating
income
20.9
1.7
Non-operating expense, net
(0.4
)
(2.3
)
Additional accumulated deferred investment
tax credits (ADITC) amortization
3.8
12.5
Income tax expense, excluding additional
ADITC amortization
(4.0
)
—
Total increase in Idaho Power net
income
20.3
11.9
Other IDACORP changes (net of tax)
0.6
1.1
Net income attributable to IDACORP,
Inc. - June 30, 2024
$
89.5
$
137.7
Net Income - Second Quarter 2024
IDACORP's net income increased $20.9 million for the second
quarter of 2024 compared with the second quarter of 2023, due
primarily to higher net income at Idaho Power.
The net increase in retail revenues per MWh, net of associated
power supply costs and power cost adjustment and FCA mechanisms,
increased operating income by $19.6 million in the second quarter
of 2024 compared with the second quarter of 2023. This benefit was
due primarily to an overall increase in Idaho base rates, effective
January 1, 2024, per the terms of the 2023 Settlement
Stipulation.
At Idaho Power, customer growth increased operating income by
$5.1 million in the second quarter of 2024 compared with the second
quarter of 2023, as the number of Idaho Power customers grew by
approximately 16,200, or 2.6 percent, during the twelve months
ended June 30, 2024. Usage per retail customer increased operating
income by $6.2 million in the second quarter of 2024 compared with
the second quarter of 2023. While there was an increase in usage
per customer for all retail customer classes, usage per irrigation
customer increased most significantly at 17 percent, as higher
temperatures compared with last year's more moderate second quarter
weather led irrigation customers to run irrigation pumps more
frequently.
Transmission wheeling-related revenues, net of PCA impacts,
decreased $2.5 million during the second quarter of 2024 compared
with the second quarter of 2023. This decrease was due primarily to
the inclusion of financial settlement of transmission line losses
in the PCA mechanism, effective January 1, 2024, as approved in the
2023 Settlement Stipulation, resulting in a smaller contribution of
those revenues to net income compared with the second quarter of
2023 when the financial settlement of transmission line losses was
not subject to the PCA mechanism.
Total other O&M expenses in the second quarter of 2024 were
$13.8 million higher than in the second quarter of 2023, primarily
related to approximately $4 million of increased pension-related
expenses and approximately $8 million of increase in wildfire
mitigation program and related insurance expenses. Both of these
increases in expenses were partially offset by increases in retail
revenues, as more costs are now recovered in base rates pursuant to
the 2023 Settlement Stipulation. However, revenues related to these
increased costs are not collected at the same rate that the
expenses are incurred in the interim periods throughout the year
due to the impact of volume-based rates and associated revenues.
Inflationary pressures on labor-related costs also contributed to
the increase in other O&M expenses.
Depreciation expense increased $7.6 million in the second
quarter of 2024 compared with the second quarter of 2023 due
primarily to an increase in plant-in-service.
Other changes in operating revenues and expenses, net, increased
operating income by $13.9 million in the second quarter of 2024
compared with the second quarter of 2023, due primarily to the
timing of recording and adjusting regulatory accruals and
deferrals. In addition, a decrease in net power supply expenses
that were not deferred for future recovery in rates through Idaho
Power's power cost adjustment mechanisms increased operating
revenues and expenses, net, compared with the same period in 2023.
More moderate wholesale natural gas and power market prices in the
western United States and increased wholesale energy sales
decreased Idaho Power's net power supply expenses in the second
quarter of 2024 compared with the second quarter of 2023.
Non-operating expense, net, increased $0.4 million in the second
quarter of 2024 compared with the second quarter of 2023. Interest
expense on long-term debt was higher in the second quarter of 2024
compared with the second quarter of 2023, due primarily to an
increase in long-term debt. This increase was partially offset by
an increase in allowance for funds used during construction
(AFUDC), as the average construction work in progress balance was
higher. Also, interest income increased due to higher interest
rates and higher average cash and cash equivalent balances.
The increase in income tax expense was principally the result of
higher income before income taxes, partially offset by an increase
in additional ADITC amortization. Based on Idaho Power's current
expectations of full-year 2024 results, Idaho Power recorded $7.5
million of additional ADITC amortization under its Idaho regulatory
settlement stipulation during the second quarter of 2024, but only
recorded $3.75 million of additional ADITC amortization during the
same period in 2023.
Net Income - Year-To-Date 2024
IDACORP's net income increased $13.0 million for the first six
months of 2024 compared with the first six months of 2023, due
primarily to higher net income at Idaho Power.
The net increase in retail revenues per MWh, net of associated
power supply costs and power cost adjustment and FCA mechanisms,
increased operating income by $24.4 million in the first six months
of 2024 compared with the first six months of 2023. This benefit
was due primarily to an overall increase in Idaho base rates,
effective January 1, 2024, per the terms of the 2023 Settlement
Stipulation.
At Idaho Power, customer growth increased operating income by
$9.8 million in the first six months of 2024 compared with the
first six months of 2023. The benefit from customer growth was
partially offset by a decrease in usage per retail customer of $3.8
million in the first six months of 2024 compared with the first six
months of 2023. While there was a reduction in usage per customer
for most retail customer classes, usage per residential customer
decreased most significantly, as more moderate temperatures from
January through May 2024 led residential customers to use less
energy for heating purposes. However, warmer weather in June 2024
led to an increase in energy usage per residential customer for
cooling purposes, as well as an increase in energy usage per
irrigation customer, which partially offset the decrease in usage
per residential customer from January through May 2024.
Transmission wheeling-related revenues, net of PCA impacts,
decreased $3.5 million during the first six months of 2024 compared
with the first six months of 2023. Total wheeling revenues earned
during the first six months of 2024 increased 21 percent compared
with the same period of 2023 due primarily to an increase in
wheeling volumes. However, effective January 1, 2024, financial
settlement of transmission line losses are subject to the PCA
mechanism, as approved in the 2023 Settlement Stipulation,
resulting in a smaller contribution of those revenues to net income
compared with the first six months of 2023 when the financial
settlement of transmission line losses was not subject to the PCA
mechanism.
Total other O&M expenses in the first six months of 2024
were $27.6 million higher than the first six months of 2023,
primarily related to approximately $9 million of increased
pension-related expenses and an approximately $16 million increase
in wildfire mitigation program and related insurance expenses. Both
of these increases in expenses are partially offset by increases in
retail revenues, as more costs are now recovered in base rates
pursuant to the 2023 Settlement Stipulation; however, revenues
related to these increased costs are not collected at the same rate
that the expenses are incurred in the interim periods throughout
the year. On a full-year basis for 2024, Idaho Power expects other
O&M expenses related to its employee pension plans and its
wildfire mitigation program and related insurance to increase
approximately $18 million and $30 million, respectively, compared
with 2023, as more costs are now recovered in base rates pursuant
to the 2023 Settlement Stipulation. Inflationary pressures on
labor-related costs also contributed to the increase in other
O&M expenses.
Depreciation expense increased $16.2 million for the first half
of 2024 compared with the first half of 2023 due primarily to an
increase in plant-in-service.
Other changes in operating revenues and expenses, net, increased
operating income by $18.6 million in the first six months of 2024
compared with the first six months of 2023, due primarily to the
timing of recording and adjusting of regulatory accruals and
deferrals. In addition, a decrease in net power supply expenses
that were not deferred for future recovery in rates through Idaho
Power's power cost adjustment mechanisms increased operating
revenues and expenses, net, compared to the same period in 2023.
More moderate wholesale natural gas and power market prices in the
western United States and increased wholesale energy sales
decreased Idaho Power's net power supply expenses in the first six
months of 2024 compared to the first six months of 2023.
Non-operating expense, net, increased $2.3 million in the first
six months of 2024 compared with the first six months of 2023.
Interest expense on long-term debt was higher in the first six
months of 2024 compared with the first six months of 2023, due
primarily to an increase in long-term debt. This increase was
partially offset by an increase in AFUDC, as the average
construction work in progress balance was higher. Also, interest
income increased due to higher interest rates and higher average
cash and cash equivalent balances.
Income tax expense in the first six months of 2024 was
consistent with the first six months of 2023 as increased taxes
from higher pre-tax income was offset by $20.0 million of
additional ADITC amortization. Idaho Power recorded $7.5 million of
additional ADITC amortization during the same period in 2023.
2024 Annual Earnings Guidance and Key Operating and Financial
Metrics
IDACORP is increasing the lower-end of its earnings guidance
estimate for 2024 and adjusting its expectation for the use of
ADITCs. The 2024 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 diluted
share)
$ 5.30 – $ 5.45
$ 5.25 – $ 5.45
Idaho Power Additional ADITCs(3)
$ 35 – $ 50
$ 35 – $ 60
Idaho Power O&M Expense(4)
No change
$ 440 – $ 450
Idaho Power Capital Expenditures,
Excluding AFUDC
No change
$ 925 – $ 975
Idaho Power Hydropower Generation
(MWh)
7.0 – 8.0
6.5 – 8.0
(1)
As of August 1, 2024. Assumes normal
weather conditions and normal power supply expenses through the
remainder of 2024.
(2)
As of May 2, 2024, the date of filing
IDACORP's and Idaho Power's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2024.
(3)
Approximately $25 million of additional
ADITCs relates to amortization of incremental tax credits generated
from Idaho Power's investment in 2023 battery storage projects, as
contemplated in the 2023 Settlement Stipulation, effective January
1, 2024. The 2023 Settlement Stipulation removed the existing $25
million annual cap on the amount of accelerated amortization of
ADITCs.
(4)
Approximately $48 million of the expected
increase in other O&M expense relates to pension and wildfire
mitigation plan expenses, approved for recovery in the 2023
Settlement Stipulation effective January 1, 2024. The increased
other O&M expense is expected to be offset by collection
through tariff-based retail revenues.
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 (888) 596-4244 for listen-only
mode. The passcode for the call is 2921833. The conference call
logistics are also posted on IDACORP's website. Slides will be
included during the conference call. To access the slide deck,
please visit www.idacorpinc.com/investor-relations. 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 2,100 employees proudly
serve more than 640,000 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, power generation, cash flows, capital
expenditures, regulatory filings, 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," "targets," "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, involve estimates, assumptions, risks, and
uncertainties, and 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) expenses and risks
associated with capital expenditures for, and the permitting and
construction of, utility infrastructure projects that Idaho Power
may be unable to complete, are delayed, or that may not be deemed
prudent by regulators for cost recovery or return on investment;
(d) expenses and risks associated with supplier and contractor
delays and failure to satisfy project quality and performance
standards on utility infrastructure projects, and the potential
impacts of those delays and failures 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 risks
and costs for purchasing energy and capacity in the market or
acquiring or constructing additional capacity and energy resources;
(f) impacts of economic conditions, including an inflationary or
recessionary environment and increased 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) 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; (i) changes in,
failure to comply with, and costs of compliance with laws,
regulations, policies, orders, and licenses, which may result in
penalties and fines, increase compliance and operational costs, and
impact recovery associated with increased costs through rates; (j)
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; (k) advancement and
adoption 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; (l) 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 and power
supply costs; (m) ability to acquire equipment, materials, fuel,
power, 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 reduced credit quality or lack of counterparty and
supplier credit; (n) 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, increased power supply costs and repair expenses, and
reduced revenues; (o) 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; (p) acts or
threats of terrorism, 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; (q) increased costs associated with purchases of power
mandated by the Public Utility Regulatory Policies Act of 1978 from
renewable energy sources; (r) Idaho Power's concentration in one
industry and one region, and the resulting exposure to regional
economic conditions and regional legislation and regulation; (s)
unaligned goals and positions with co-owners of Idaho Power’s
generation and transmission assets; (t) changes in tax laws or
related regulations or interpretations of applicable laws or
regulations by federal, state, or local taxing jurisdictions, and
the availability of tax credits; (u) 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; (v)
ability to obtain debt and equity financing or refinance existing
debt when necessary and on satisfactory terms, which can be
affected by factors such as credit ratings, reputational harm,
volatility or disruptions in the financial markets, interest rates,
decisions by the Idaho, Oregon, or Wyoming 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 postretirement 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 cessation of coal-fired
operations at Idaho Power's co-owned coal plants and conversion of
the plants to natural gas; (z) ability to continue to pay dividends
and achieve target dividend payout ratios based on financial
performance and capital requirements, and in light of credit rating
considerations, contractual covenants and restrictions, and
regulatory limitations; (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; and (ab) changing market dynamics due to
the emergence of day ahead or other energy and transmission markets
in the western United States. 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 the companies
to predict all such factors, nor can they 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801198553/en/
Investor and Analyst Contact Amy I.
Shaw VP of Finance, Compliance & Risk Phone: (208) 388-5611
AShaw@idahopower.com
Media Contact Jordan Rodriguez
Corporate Communications Phone: (208) 388-2460
JRodriguez@idahopower.com
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