IDACORP, Inc. 2026 Q3 Earnings Call

Thank you. Good afternoon, everyone. We appreciate joining our call. The slides we'll reference during today's call are available on IDACORP's website. As noted on slide 2, our discussion today includes forward-looking statements, including things like earnings guidance, spending forecasts, financing plans, regulatory plans and actions, and estimates and assumptions that reflect our current views on what the future holds. These are all subject to risks and uncertainties. Those risks and uncertainties may cause actual results to differ materially from statements made today, and we caution against placing undue reliance on any forward-looking statements. We've included our cautionary note on forward-looking statements and various risk factors in more detail for your review in our filings with the Securities and Exchange Commission. As shown on slide 3, also presenting today we have Lisa Grow, President and CEO, Brian Buckham, CFO, and John Wonderlich, Investor Relations Manager.

Slide 4 has a summary of our third quarter financial results. IDACORP's diluted earnings per share were $2.73, compared with $2.26 for last year's third quarter. For the first nine months of 2026, diluted earnings per share were $5.76 versus $5.13 in 2025. Those results only include additional tax credit amortization of $6.3 million in the first nine months of 2026 versus $39 million in the first nine months of last year, which showcases the strong performance so far for 2026. For our key operating metrics, we're raising our full year IDACORP diluted earnings per share guidance range by $0.10 on the bottom and $0.05 at the top of the range. Our new range is $6.40 to $6.50 per share. This increase is driven by our strong operational results in the third quarter.

It includes our expectation that Idaho Power will use less than $10 million of additional tax credit amortization for the full year, which is a reduction from the less than $15 million in our prior guidance. These estimates also assume historically normal weather conditions for the rest of the year. Now I'll turn the call over to Lisa.

Thank you, Amy. Thanks to everyone for joining us today. I will start by highlighting the impressive growth we continue to see across our service area. This growth is diverse, happening across all customer types in a wide variety of industries. As you can see on slide 5, our customer count has increased 2.2% since last year's third quarter, including 2.4% growth in the residential segment. Of particular note for this quarter are industrial revenues, which increased by an incredible 27% since last year's third quarter. After years of diligent planning and project execution, we are seeing significant revenues coming in from large contract customers as they construct their facilities and come online. We are excited to be part of their success.

Meta officially began operations at its data center south of Boise in September and is now ramping up, while Micron Fab 1 and Fab 2 expansions in Boise continue to make impressive progress. We have included photos on slide 6, so you can see the scale of these projects as well as a couple others. Our preliminary load growth CAGR for the 2027 IRP is 8.9% for retail sales for the next five years. That increase includes the higher base year load in the calculation. While this is still preliminary, you can see the substantial growth on slide 7. To put this in perspective, that is a load forecast of about 19,000 gigawatt hours in 2027, growing to about 29,000 gigawatt hours by 2032. This growth is substantial, and we are working hard to ensure Idaho Power stays ready to meet it and that we do so responsibly.

As a reminder, for large contract customers, our preliminary load projections only include the customers who have signed contracts or made significant financial commitment to Idaho Power for infrastructure build-out. In addition to large customers that we have already discussed, there is a diverse group of new and expanding customers interested in investing in our service area, including manufacturing, mining, food processing, transportation, data centers, and other energy-intensive industries. To date, in 2026, we have received 76 inquiries from projects with energy needs greater than one megawatt, which is on pace for another year of historically high project activity. These projects have the potential to bring new jobs, investment, and long-term economic opportunities. They also reinforce the importance of thoughtful planning to ensure we continue providing affordable and reliable service to our customers.

To highlight a few other projects, Idaho Power broke ground this month on transmission facilities needed to provide electric service to Perpetua Resources' Dibbie Creek project, which will support domestic production of critical minerals and strengthen U.S. supply chains. We also recently celebrated the grand opening of Tractor Supply Company's new distribution center in Nampa, another great example of economic growth and business investment happening across our service area. Idaho Power is focused on affordability as we grow, and we are proud that our prices remain 20%-30% lower than the national average. As shown on slide 8, since 2016, average national electric rates have increased 41%. Rents in Boise have increased 85%, and CPI inflation has grown 39%, while Idaho Power residential rates have increased 24% over that same period, an average of just 2.2% a year.

We're strong advocates of Idaho's growth pays for growth regulatory approach, and our contracts with large contract customers seek to protect Idaho Power and our existing customers from risk and cost shifting. On slide 9, you can see some of the contract protections we target in energy services agreements with large contract customers. As I mentioned on last quarter's call, the substantial increase in revenues we're seeing from these customers was a key driver for Idaho Power not filing a rate case in 2026, which helps demonstrate the benefit of the growth pays for growth model in Idaho. We're moving full speed ahead, executing on projects to serve our growing customer base and enhance our grid. As shown on slide 10, we're making great progress on the Boardman-to-Hemingway transmission line.

To date, more than 1,200 structure pads have been built, 1,100 foundations have been installed, and about 780 towers have gone up, which represents about 60% of the project total. Additionally, we've installed around 100 miles of conductor. B2H remains on schedule for an in-service date in late 2027. In addition, construction in Nevada continues on the SWIP North Transmission Project, which we expect to be completed in 2028. On Gateway West Transmission Project, we continue to make progress, and we have the transmission line construction out for bid. Moving to slide 11, we're continuing to make progress on three company-owned natural gas-fueled projects. Construction is underway on a 167-megawatt resource we're building next to our existing Bennett Mountain gas plant. The new Bennett facility has a scheduled in-service date of 2028, and we have a CPCN air permit and EPC contract in place.

We have CPCN applications filed for South Hills, a 222-megawatt project scheduled for operation in 2029, as well as the 430-megawatt Peregrine project, which is slated for 2030. We've executed equipment supply agreements for all three projects. Additionally, we signed an EPC contract for the Peregrine project, and we're negotiating a contract for the South Hills project. The dispatchable energy from these plants will help us meet our projected load deficits and serve our customers with the least cost, least risk resources. Looking ahead to additional capacity and energy needs, our evaluation team received more than 100 bids for our 2032 RFP and has developed a final shortlist of 11 projects, as shown on slide 12. As has been the case in past RFPs, Idaho Power has multiple company-owned projects on the final shortlist, and we were pleased to have competitive bids.

In fact, the 2031 South Hills project on the slide is the top-ranked project. The list also includes third-party owned solar, wind, and battery facilities, along with a few market purchase bids. We don't intend to contract with every project on the list as of now. It's a substantial number of megawatts in total, more megawatts than in our updated load forecast through 2032. However, consistent with what we've done previously, our final shortlist can accommodate potential incremental growth, and it's good to have that optionality. We're working to get contracts in place and expect to move forward with the selected projects by the end of this year. So keep an eye out for CPCN filings. Finally, as the Oregon sale goes, we continue to expect the sale to close in the spring of 2027, pending successful regulatory outcomes.

We recently received FERC's approval and the Oregon and Idaho State regulatory processes continue. With that, I will turn the time over to Brian.

Hi, everybody. Thanks for joining. I am going to jump right into the drivers of the quarter's results on slide 13. You can see the biggest driver was higher retail revenues resulting from a combination of incremental benefits from current base rates and customer growth. Those were nearly a $44 million benefit for the quarter, and they were about $90 million year to date combined. Overall, per-customer usage was essentially flat for the quarter. The fixed cost adjustment mechanism decreased retail revenues for the quarter. That was a result of slightly higher sales to the residential and small commercial customer classes. The new line we added in the second quarter, revenues from large contract customers, increased operating income by almost $12 million for the quarter. From a year-to-date perspective, it was around $20 million, which illustrates the ramp-up.