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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| | | | | | | | | | | | | | | | | |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES | |
| EXCHANGE ACT OF 1934 | |
| For the quarterly period ended | September 30, 2024 | | |
| OR | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES | |
| EXCHANGE ACT OF 1934 | |
| For the transition period from __________ to __________ | |
| Exact name of registrants as specified | I.R.S. Employer |
Commission File | in their charters, address of principal | Identification |
Number | executive offices, zip code and telephone number | No. |
1-14465 | IDACORP, Inc. | 82-0505802 |
1-3198 | Idaho Power Company | 82-0130980 |
| | | | | | | | | | | | | | | | | | | | |
| 1221 W. Idaho Street | |
| Boise, | ID | 83702-5627 | |
| | (208) | 388-2200 | |
| | | | | | | | | | | | | | |
| State of Incorporation: | Idaho | | |
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None |
Former name, former address and former fiscal year, if changed since last report |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock | IDA | New York Stock Exchange |
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
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IDACORP, Inc.: | Yes | ☒ | No | ☐ | Idaho Power Company: | Yes | ☒ | No | ☐ |
Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files).
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IDACORP, Inc.: | Yes | ☒ | No | ☐ | Idaho Power Company: | Yes | ☒ | No | ☐ |
Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies, or emerging growth companies. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging growth company |
IDACORP, Inc.: | ☒ | ☐ | ☐ | ☐ | ☐ |
Idaho Power Company: | ☐ | ☐ | ☒ | ☐ | ☐ |
If an emerging growth company, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act.
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IDACORP, Inc.: | | ☐ | | | Idaho Power Company: | | ☐ | | |
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
IDACORP, Inc.: | Yes | ☐ | No | ☒ | Idaho Power Company: | Yes | ☐ | No | ☒ |
Number of shares of common stock outstanding as of October 25, 2024:
| | | | | | | | | | | | | | |
IDACORP, Inc.: | 53,269,814 | | Idaho Power Company: | 39,150,812, all held by IDACORP, Inc. |
This combined Form 10-Q represents separate filings by IDACORP, Inc. and Idaho Power Company. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Idaho Power Company makes no representations as to the information relating to IDACORP, Inc.’s other operations.
Idaho Power Company meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this report on Form 10-Q with the reduced disclosure format.
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TABLE OF CONTENTS |
| Page |
Commonly Used Terms | |
Cautionary Note Regarding Forward-Looking Statements | |
Available Information | |
| |
Part I. Financial Information | |
| | |
| Item 1. Financial Statements (unaudited) | |
| | IDACORP, Inc.: | |
| | | Condensed Consolidated Statements of Income | |
| | | Condensed Consolidated Statements of Comprehensive Income | |
| | | Condensed Consolidated Balance Sheets | |
| | | Condensed Consolidated Statements of Cash Flows | |
| | | Condensed Consolidated Statements of Equity | |
| | Idaho Power Company: | |
| | | Condensed Consolidated Statements of Income | |
| | | Condensed Consolidated Statements of Comprehensive Income | |
| | | Condensed Consolidated Balance Sheets | |
| | | Condensed Consolidated Statements of Cash Flows | |
| | Notes to Condensed Consolidated Financial Statements | |
| | Reports of Independent Registered Public Accounting Firm - Deloitte & Touche LLP | |
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | |
| Item 4. Controls and Procedures | |
| | | | |
Part II. Other Information | |
| | |
| Item 1. Legal Proceedings | |
| Item 1A. Risk Factors | |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | |
| Item 3. Defaults Upon Senior Securities | |
| Item 4. Mine Safety Disclosures | |
| Item 5. Other Information | |
| Item 6. Exhibits | |
| | |
Signatures | |
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| |
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COMMONLY USED TERMS | | |
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The following select abbreviations, terms, or acronyms are commonly used or found in multiple locations in this report: | | |
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2023 Annual Report | - | IDACORP's and Idaho Power's Annual Report on Form 10-K for the year ended December 31, 2023 | | Ida-West | - | Ida-West Energy Company, a subsidiary of IDACORP, Inc. | | |
2023 Settlement Stipulation | - | The settlement stipulation for Idaho Power's 2023 Idaho general rate case | | IDEQ | - | Idaho Department of Environmental Quality | | |
2024 Idaho Limited-Issue Rate Case | - | A limited-issue rate case Idaho Power filed with the IPUC in May 2024 | | IERCo | - | Idaho Energy Resources Co., a subsidiary of Idaho Power Company | | |
2024 Oregon Settlement Stipulations | - | Settlement stipulations approved by the OPUC in September 2024 settling Idaho Power's general rate case filed with the OPUC in December 2023 | | IFS | - | IDACORP Financial Services, Inc., a subsidiary of IDACORP, Inc. | | |
ADITC | - | Accumulated Deferred Investment Tax Credits | | IPUC | - | Idaho Public Utilities Commission | | |
AFUDC | - | Allowance for Funds Used During Construction | | IRP | - | Integrated Resource Plan | | |
AOCI | - | Accumulated Other Comprehensive Income | | Jim Bridger plant | - | Jim Bridger power plant | | |
APCU | - | Annual power cost update | | MD&A | - | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | |
ASU | - | Accounting Standards Update | | MMBtu | - | Million British Thermal Units | | |
B2H | - | Boardman-to-Hemingway, a planned 300-mile, high-voltage transmission line project between a substation near Boardman, Oregon, and the Hemingway substation near Boise, Idaho | | Moody's | - | Moody's Investors Service | | |
BCC | - | Bridger Coal Company, a jointly-owned investment of IERCo | | MW | - | Megawatt | | |
CAA | - | Clean Air Act | | MWh | - | Megawatt-hour | | |
CPCN | - | Certificate of Public Convenience and Necessity | | NAV | - | Net asset value | | |
CWA | - | Clean Water Act | | NEPA | - | National Environmental Policy Act | | |
EFSC | - | Energy Facility Siting Council | | North Valmy plant | - | Idaho Power’s jointly-owned coal-fired generating plant in Valmy, Nevada | | |
EIS | - | Environmental Impact Statement | | OATT | - | Open Access Transmission Tariff | | |
EPA | - | U.S. Environmental Protection Agency | | O&M | - | Operations and Maintenance | | |
ESA | - | Endangered Species Act | | OPUC | - | Public Utility Commission of Oregon | | |
Exchange Act | - | U.S. Securities Exchange Act of 1934, as amended | | PCA | - | Idaho-Jurisdiction Power Cost Adjustment | | |
FCA | - | Idaho Fixed Cost Adjustment | | PURPA | - | Public Utility Regulatory Policies Act of 1978 | | |
FERC | - | Federal Energy Regulatory Commission | | RFP | - | Request for proposals | | |
FSAs | - | Forward sale agreements | | SEC | - | U.S. Securities and Exchange Commission | | |
GAAP | - | Accounting principles generally accepted in the United States of America | | SIP | - | State Implementation Plan | | |
GWW | - | Gateway West, a high-voltage transmission line project between a substation located near Douglas, Wyoming, and the Hemingway substation located near Boise, Idaho | | SMSP | - | Security Plans for Senior Management Employees I and II | | |
HCC | - | Hells Canyon Complex, composed of the Brownlee, Oxbow, and Hells Canyon facilities | | USFWS | - | U.S. Fish and Wildlife Service | | |
IDACORP | - | IDACORP, Inc., an Idaho corporation | | WMP | - | Wildfire Mitigation Plan | | |
Idaho Power | - | Idaho Power Company, an Idaho corporation | | WPSC | - | Wyoming Public Service Commission | | |
Idaho ROE | - | Idaho-jurisdiction return on year-end equity | | | | | | |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS |
In addition to the historical information contained in this report, this report contains (and oral communications made by IDACORP and 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," 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 report, the 2023 Annual Report, particularly Part I, Item 1A - "Risk Factors" and Part II, Item 7 - MD&A of that report, subsequent reports filed by IDACORP and Idaho Power with the SEC, and the following important factors:
•decisions or actions by the Idaho and Oregon public utilities commissions and the FERC that impact Idaho Power's ability to recover costs and earn a return on investment;
•changes to or the elimination of Idaho Power's regulatory cost recovery mechanisms;
•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;
•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;
•the rapid addition of new industrial and commercial customer load and the volatility of such new load demand, resulting in increased risks and costs of power demand potentially exceeding supply and of purchasing energy and capacity in the market or acquiring or constructing additional capacity and energy resources, and the potential financial impacts of industrial customers not meeting forecasted power usage ramp rates or amounts;
•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 on the timing and extent of their power usage, and collection of receivables;
•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;
•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;
•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;
•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, public safety power shutoffs and de-energization, liability for damage caused by utility property, and the availability and cost of fuel for generation plants or purchased power to serve customers;
•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;
•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;
•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;
•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;
•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;
•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;
•increased costs associated with purchases of power mandated by PURPA from renewable energy sources;
•Idaho Power’s concentration in one industry and one region, and the resulting exposure to regional economic conditions and regional legislation and regulation;
•unaligned goals and positions with co-owners of Idaho Power's generation and transmission assets;
•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;
•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;
•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;
•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;
•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;
•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;
•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;
•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
•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.
Investors and others should note that IDACORP and Idaho Power announce material information about their business through a variety of means, including filings with the SEC, press releases, public conference calls, and webcasts. The companies use these channels to achieve broad, non-exclusionary distribution of information to the public and for complying with their disclosure obligations under Regulation FD. Therefore, IDACORP and Idaho Power encourage investors, the media, and others interested in the companies to review the information the companies make available through such channels. IDACORP's website is www.idacorpinc.com and Idaho Power's website is www.idahopower.com. The contents of these websites are not part of this report.
Investors, the media, and others interested in IDACORP and Idaho Power may also wish to refer to the websites of the IPUC and OPUC at puc.idaho.gov and oregon.gov/puc, respectively, to review documents filed by IDACORP, Idaho Power, and third parties with, and issued by, the respective commissions. No information on the IPUC and OPUC websites is incorporated by reference into this report or into IDACORP's or Idaho Power's other SEC filings.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
IDACORP, Inc.
Condensed Consolidated Statements of Income
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| | (in thousands, except per share amounts) | | (in thousands, except per share amounts) |
Operating Revenues: | | | | | | | | |
Electric utility revenues | | $ | 527,487 | | | $ | 509,635 | | | $ | 1,425,606 | | | $ | 1,351,700 | |
Other | | 1,040 | | | 1,271 | | | 2,896 | | | 2,703 | |
Total operating revenues | | 528,527 | | | 510,906 | | | 1,428,502 | | | 1,354,403 | |
| | | | | | | | |
Operating Expenses: | | | | | | | | |
Electric utility: | | | | | | | | |
Purchased power | | 114,578 | | | 142,851 | | | 321,860 | | | 405,404 | |
Fuel expense | | 73,471 | | | 71,723 | | | 188,411 | | | 191,917 | |
Power cost adjustment | | 20,779 | | | 5,899 | | | 102,297 | | | 4,191 | |
Other operations and maintenance | | 116,168 | | | 95,824 | | | 332,900 | | | 284,988 | |
Energy efficiency programs | | 5,283 | | | 10,498 | | | 16,699 | | | 22,265 | |
Depreciation | | 56,388 | | | 50,832 | | | 165,133 | | | 143,331 | |
Other electric utility operating expenses, net | | 7,453 | | | 6,297 | | | 12,482 | | | 23,169 | |
Total electric utility operating expenses | | 394,120 | | | 383,924 | | | 1,139,782 | | | 1,075,265 | |
Other | | 698 | | | 694 | | | 2,145 | | | 2,453 | |
Total operating expenses | | 394,818 | | | 384,618 | | | 1,141,927 | | | 1,077,718 | |
| | | | | | | | |
Operating Income | | 133,709 | | | 126,288 | | | 286,575 | | | 276,685 | |
| | | | | | | | |
Nonoperating (Income) Expense: | | | | | | | | |
Allowance for equity funds used during construction | | (15,179) | | | (11,044) | | | (39,610) | | | (32,125) | |
Earnings of unconsolidated equity-method investments | | (1,978) | | | (4,195) | | | (3,880) | | | (9,387) | |
Interest on long-term debt | | 35,432 | | | 29,361 | | | 102,048 | | | 82,908 | |
Other interest | | 6,353 | | | 5,572 | | | 17,895 | | | 14,935 | |
Allowance for borrowed funds used during construction | | (7,639) | | | (4,903) | | | (20,518) | | | (14,291) | |
Other income, net | | (13,478) | | | (7,924) | | | (40,188) | | | (24,890) | |
Total nonoperating expense, net | | 3,511 | | | 6,867 | | | 15,747 | | | 17,150 | |
| | | | | | | | |
Income Before Income Taxes | | 130,198 | | | 119,421 | | | 270,828 | | | 259,535 | |
| | | | | | | | |
Income Tax Expense | | 16,358 | | | 13,774 | | | 18,876 | | | 29,000 | |
| | | | | | | | |
Net Income | | 113,840 | | | 105,647 | | | 251,952 | | | 230,535 | |
Income attributable to noncontrolling interests | | (235) | | | (383) | | | (654) | | | (599) | |
Net Income Attributable to IDACORP, Inc. | | $ | 113,605 | | | $ | 105,264 | | | $ | 251,298 | | | $ | 229,936 | |
| | | | | | | | |
Weighted Average Common Shares Outstanding - Basic | | 53,386 | | | 50,726 | | | 52,112 | | | 50,713 | |
Weighted Average Common Shares Outstanding - Diluted | | 53,485 | | | 50,805 | | | 52,179 | | | 50,762 | |
Earnings Per Share of Common Stock: | | | | | | | | |
Earnings Attributable to IDACORP, Inc. - Basic | | $ | 2.13 | | | $ | 2.08 | | | $ | 4.82 | | | $ | 4.53 | |
Earnings Attributable to IDACORP, Inc. - Diluted | | $ | 2.12 | | | $ | 2.07 | | | $ | 4.82 | | | $ | 4.53 | |
The accompanying notes are an integral part of these statements.
IDACORP, Inc.
Condensed Consolidated Statements of Comprehensive Income
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| | (in thousands) | | (in thousands) |
| | | | | | | | |
Net Income | | $ | 113,840 | | | $ | 105,647 | | | $ | 251,952 | | | $ | 230,535 | |
Other Comprehensive Income: | | | | | | | | |
| | | | | | | | |
Unfunded pension liability adjustment, net of tax of $99, $51, $296, and $153, respectively | | 285 | | | 146 | | | 853 | | | 439 | |
Total Comprehensive Income | | 114,125 | | | 105,793 | | | 252,805 | | | 230,974 | |
Income attributable to noncontrolling interests | | (235) | | | (383) | | | (654) | | | (599) | |
Comprehensive Income Attributable to IDACORP, Inc. | | $ | 113,890 | | | $ | 105,410 | | | $ | 252,151 | | | $ | 230,375 | |
The accompanying notes are an integral part of these statements.
IDACORP, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
| | (in thousands) |
Assets | | | | |
| | | | |
Current Assets: | | | | |
Cash and cash equivalents | | $ | 427,950 | | | $ | 327,429 | |
| | | | |
Receivables: | | | | |
Customer (net of allowance of $3,296 and $4,869, respectively) | | 152,452 | | | 107,256 | |
Other (net of allowance of $782 and $716, respectively) | | 21,563 | | | 44,661 | |
Income taxes receivable | | — | | | 24,574 | |
Accrued unbilled revenues | | 93,131 | | | 90,521 | |
Materials and supplies (at average cost) | | 179,693 | | | 140,515 | |
Fuel stock (at average cost) | | 39,873 | | | 19,952 | |
Prepayments | | 28,831 | | | 22,840 | |
Current regulatory assets | | 89,823 | | | 226,235 | |
Other | | 42 | | | 71 | |
Total current assets | | 1,033,358 | | | 1,004,054 | |
Investments | | 161,612 | | | 163,971 | |
Property, Plant and Equipment: | | | | |
Utility plant in service | | 7,669,083 | | | 7,291,532 | |
Accumulated provision for depreciation | | (2,673,078) | | | (2,557,744) | |
Utility plant in service - net | | 4,996,005 | | | 4,733,788 | |
Construction work in progress | | 1,302,148 | | | 985,502 | |
Utility plant held for future use | | 9,878 | | | 9,511 | |
Other property, net of accumulated depreciation | | 13,478 | | | 16,429 | |
Property, plant and equipment - net | | 6,321,509 | | | 5,745,230 | |
Other Assets: | | | | |
Company-owned life insurance | | 89,210 | | | 82,038 | |
Regulatory assets | | 1,435,335 | | | 1,426,815 | |
| | | | |
Other | | 64,094 | | | 53,810 | |
Total other assets | | 1,588,639 | | | 1,562,663 | |
Total | | $ | 9,105,118 | | | $ | 8,475,918 | |
The accompanying notes are an integral part of these statements.
IDACORP, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
| | (in thousands) |
Liabilities and Equity | | | | |
| | | | |
Current Liabilities: | | | | |
Current maturities of long-term debt | | $ | 69,685 | | | $ | 49,800 | |
| | | | |
Accounts payable | | 241,186 | | | 308,504 | |
Taxes accrued | | 38,281 | | | 6,854 | |
Interest accrued | | 32,935 | | | 38,292 | |
Accrued compensation | | 60,555 | | | 64,645 | |
Current regulatory liabilities | | 8,642 | | | 7,952 | |
Advances from customers | | 101,766 | | | 104,297 | |
Other | | 53,134 | | | 53,732 | |
Total current liabilities | | 606,184 | | | 634,076 | |
Other Liabilities: | | | | |
Deferred income taxes | | 863,783 | | | 882,724 | |
Regulatory liabilities | | 888,699 | | | 874,601 | |
Pension and other postretirement benefits | | 230,579 | | | 233,965 | |
Other | | 184,352 | | | 160,019 | |
Total other liabilities | | 2,167,413 | | | 2,151,309 | |
Long-Term Debt | | 3,053,948 | | | 2,775,790 | |
Commitments and Contingencies | | | | |
Equity: | | | | |
IDACORP, Inc. shareholders’ equity: | | | | |
Common stock, no par value (120,000 shares authorized; 53,270 and 50,615 shares issued and outstanding, respectively) | | 1,127,743 | | | 888,615 | |
Retained earnings | | 2,158,333 | | | 2,036,138 | |
Accumulated other comprehensive loss | | (16,331) | | | (17,184) | |
| | | | |
Total IDACORP, Inc. shareholders’ equity | | 3,269,745 | | | 2,907,569 | |
Noncontrolling interests | | 7,828 | | | 7,174 | |
Total equity | | 3,277,573 | | | 2,914,743 | |
Total | | $ | 9,105,118 | | | $ | 8,475,918 | |
| | | | |
The accompanying notes are an integral part of these statements. |
IDACORP, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| | | | | | | | | | | | | | |
| | Nine months ended September 30, |
| | 2024 | | 2023 |
| | (in thousands) |
Operating Activities: | | | | |
Net income | | $ | 251,952 | | | $ | 230,535 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
Depreciation and amortization | | 168,607 | | | 146,645 | |
Deferred income taxes and investment tax credits | | (34,699) | | | 300 | |
Changes in regulatory assets and liabilities | | 124,549 | | | 1,585 | |
Pension and postretirement benefit plan expense | | 34,359 | | | 20,390 | |
Contributions to pension and postretirement benefit plans | | (23,967) | | | (54,388) | |
Earnings of equity-method investments | | (3,880) | | | (9,387) | |
Distributions from equity-method investments | | 3,950 | | | 1,250 | |
Allowance for equity funds used during construction | | (39,610) | | | (32,125) | |
Other non-cash adjustments to net income, net | | 4,629 | | | 6,115 | |
Change in: | | | | |
Accounts receivable and unbilled revenues | | 658 | | | (10,691) | |
Prepayments | | (7,931) | | | (2,669) | |
Materials, supplies, and fuel stock | | (59,105) | | | (45,343) | |
Accounts and wages payable | | (33,044) | | | (116,417) | |
Taxes accrued/receivable | | 56,001 | | | 41,174 | |
Other assets and liabilities | | 15,513 | | | (14,943) | |
Net cash provided by operating activities | | 457,982 | | | 162,031 | |
Investing Activities: | | | | |
Additions to property, plant and equipment, net | | (823,969) | | | (427,211) | |
Payments received from transmission project joint funding partners | | 58,750 | | | 14,920 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Other | | 8,805 | | | 410 | |
Net cash used in investing activities | | (756,414) | | | (411,881) | |
Financing Activities: | | | | |
Issuance of long-term debt | | 300,000 | | | 872,000 | |
Discount on issuance of long-term debt | | (186) | | | (7,006) | |
Retirement of long-term debt | | — | | | (225,000) | |
Dividends on common stock | | (129,152) | | | (120,578) | |
| | | | |
Issuance of common stock | | 234,672 | | | — | |
Tax withholdings on net settlements of share-based awards | | (3,782) | | | (3,274) | |
| | | | |
Other | | (2,599) | | | 1,620 | |
Net cash provided by financing activities | | 398,953 | | | 517,762 | |
Net increase in cash and cash equivalents | | 100,521 | | | 267,912 | |
Cash and cash equivalents at beginning of the period | | 327,429 | | | 177,577 | |
Cash and cash equivalents at end of the period | | $ | 427,950 | | | $ | 445,489 | |
Supplemental Disclosure of Cash Flow Information: | | | | |
| | | | |
Cash paid for income taxes | | $ | 8,830 | | | $ | 1,900 | |
Cash paid for interest (net of amount capitalized) | | $ | 88,391 | | | $ | 82,614 | |
Non-cash investing activities: | | | | |
Additions to property, plant and equipment in accounts payable | | $ | 144,232 | | | $ | 127,076 | |
The accompanying notes are an integral part of these statements.
IDACORP, Inc.
Condensed Consolidated Statements of Equity
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| | (in thousands) | | (in thousands) |
Common Stock | | | | | | | | |
Balance at beginning of period | | $ | 1,123,745 | | | $ | 884,309 | | | $ | 888,615 | | | $ | 882,189 | |
Issuance | | 1,494 | | | — | | | 234,672 | | | — | |
Share-based compensation expense | | 2,709 | | | 1,920 | | | 8,280 | | | 7,224 | |
Tax withholdings on net settlements of share-based awards | | (88) | | | (19) | | | (3,782) | | | (3,274) | |
| | | | | | | | |
Other | | (117) | | | 33 | | | (42) | | | 104 | |
Balance at end of period | | 1,127,743 | | | 886,243 | | | 1,127,743 | | | 886,243 | |
Retained Earnings | | | | | | | | |
Balance at beginning of period | | 2,089,185 | | | 1,982,083 | | | 2,036,138 | | | 1,937,972 | |
Net income attributable to IDACORP, Inc. | | 113,605 | | | 105,264 | | | 251,298 | | | 229,936 | |
Common stock dividends ($0.83, $0.79, $2.49, and $2.37 per share, respectively) | | (44,457) | | | (40,218) | | | (129,103) | | | (120,779) | |
Balance at end of period | | 2,158,333 | | | 2,047,129 | | | 2,158,333 | | | 2,047,129 | |
Accumulated Other Comprehensive Loss | | | | | | | | |
Balance at beginning of period | | (16,616) | | | (12,629) | | | (17,184) | | | (12,922) | |
Unfunded pension liability adjustment (net of tax) | | 285 | | | 146 | | | 853 | | | 439 | |
Balance at end of period | | (16,331) | | | (12,483) | | | (16,331) | | | (12,483) | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Total IDACORP, Inc. shareholders’ equity at end of period | | 3,269,745 | | | 2,920,889 | | | 3,269,745 | | | 2,920,889 | |
Noncontrolling Interests | | | | | | | | |
Balance at beginning of period | | 7,593 | | | 7,592 | | | 7,174 | | | 7,376 | |
Net income attributable to noncontrolling interests | | 235 | | | 383 | | | 654 | | | 599 | |
Balance at end of period | | 7,828 | | | 7,975 | | | 7,828 | | | 7,975 | |
Total equity at end of period | | $ | 3,277,573 | | | $ | 2,928,864 | | | $ | 3,277,573 | | | $ | 2,928,864 | |
The accompanying notes are an integral part of these statements.
Idaho Power Company
Condensed Consolidated Statements of Income
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| | (in thousands) | | (in thousands) |
| | | | | | | | |
Operating Revenues | | $ | 527,487 | | | $ | 509,635 | | | $ | 1,425,606 | | | $ | 1,351,700 | |
| | | | | | | | |
Operating Expenses: | | | | | | | | |
Operation: | | | | | | | | |
Purchased power | | 114,578 | | | 142,851 | | | 321,860 | | | 405,404 | |
Fuel expense | | 73,471 | | | 71,723 | | | 188,411 | | | 191,917 | |
Power cost adjustment | | 20,779 | | | 5,899 | | | 102,297 | | | 4,191 | |
Other operations and maintenance | | 116,168 | | | 95,824 | | | 332,900 | | | 284,988 | |
Energy efficiency programs | | 5,283 | | | 10,498 | | | 16,699 | | | 22,265 | |
Depreciation | | 56,388 | | | 50,832 | | | 165,133 | | | 143,331 | |
Other operating expenses, net | | 7,453 | | | 6,297 | | | 12,482 | | | 23,169 | |
Total operating expenses | | 394,120 | | | 383,924 | | | 1,139,782 | | | 1,075,265 | |
| | | | | | | | |
Operating Income | | 133,367 | | | 125,711 | | | 285,824 | | | 276,435 | |
| | | | | | | | |
Nonoperating (Income) Expense: | | | | | | | | |
Allowance for equity funds used during construction | | (15,179) | | | (11,044) | | | (39,610) | | | (32,125) | |
Earnings of unconsolidated equity-method investments | | (841) | | | (3,007) | | | (1,936) | | | (7,402) | |
Interest on long-term debt | | 35,432 | | | 29,361 | | | 102,048 | | | 82,908 | |
Other interest | | 6,268 | | | 5,491 | | | 17,645 | | | 14,693 | |
Allowance for borrowed funds used during construction | | (7,639) | | | (4,903) | | | (20,518) | | | (14,291) | |
Other income, net | | (12,207) | | | (7,588) | | | (37,469) | | | (23,434) | |
Total nonoperating expense, net | | 5,834 | | | 8,310 | | | 20,160 | | | 20,349 | |
| | | | | | | | |
Income Before Income Taxes | | 127,533 | | | 117,401 | | | 265,664 | | | 256,086 | |
| | | | | | | | |
Income Tax Expense | | 16,444 | | | 14,379 | | | 19,885 | | | 30,274 | |
| | | | | | | | |
Net Income | | $ | 111,089 | | | $ | 103,022 | | | $ | 245,779 | | | $ | 225,812 | |
The accompanying notes are an integral part of these statements.
Idaho Power Company
Condensed Consolidated Statements of Comprehensive Income
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| | (in thousands) | | (in thousands) |
| | | | | | | | |
Net Income | | $ | 111,089 | | | $ | 103,022 | | | $ | 245,779 | | | $ | 225,812 | |
Other Comprehensive Income: | | | | | | | | |
| | | | | | | | |
Unfunded pension liability adjustment, net of tax of $99, $51, $296, and $153, respectively | | 285 | | | 146 | | | 853 | | | 439 | |
Total Comprehensive Income | | $ | 111,374 | | | $ | 103,168 | | | $ | 246,632 | | | $ | 226,251 | |
The accompanying notes are an integral part of these statements.
Idaho Power Company
Condensed Consolidated Balance Sheets
(unaudited)
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
| | (in thousands) |
Assets | | | | |
| | | | |
Current Assets: | | | | |
Cash and cash equivalents | | $ | 356,699 | | | $ | 271,791 | |
Receivables: | | | | |
Customer (net of allowance of $3,296 and $4,869, respectively) | | 152,452 | | | 107,256 | |
Other (net of allowance of $782 and $716, respectively) | | 21,051 | | | 44,335 | |
Income taxes receivable | | — | | | 22,926 | |
Accrued unbilled revenues | | 93,131 | | | 90,521 | |
Materials and supplies (at average cost) | | 179,693 | | | 140,515 | |
Fuel stock (at average cost) | | 39,873 | | | 19,952 | |
Prepayments | | 28,708 | | | 22,710 | |
| | | | |
Current regulatory assets | | 89,823 | | | 226,235 | |
Other | | 42 | | | 71 | |
Total current assets | | 961,472 | | | 946,312 | |
Investments | | 90,108 | | | 93,037 | |
Property, Plant and Equipment: | | | | |
Utility plant in service | | 7,669,083 | | | 7,291,532 | |
Accumulated provision for depreciation | | (2,673,078) | | | (2,557,744) | |
Utility plant in service - net | | 4,996,005 | | | 4,733,788 | |
Construction work in progress | | 1,302,148 | | | 985,502 | |
Plant held for future use | | 9,878 | | | 9,511 | |
Other property | | 1,718 | | | 4,310 | |
Property, plant and equipment, net | | 6,309,749 | | | 5,733,111 | |
Other Assets: | | | | |
Company-owned life insurance | | 89,210 | | | 82,038 | |
Regulatory assets | | 1,435,335 | | | 1,426,815 | |
Other | | 52,722 | | | 42,218 | |
Total other assets | | 1,577,267 | | | 1,551,071 | |
Total | | $ | 8,938,596 | | | $ | 8,323,531 | |
The accompanying notes are an integral part of these statements.
Idaho Power Company
Condensed Consolidated Balance Sheets
(unaudited)
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
| | (in thousands, except par value) |
Liabilities and Equity | | | | |
| | | | |
Current Liabilities: | | | | |
Current maturities of long-term debt | | $ | 69,685 | | | $ | 49,800 | |
| | | | |
Accounts payable | | 240,522 | | | 307,538 | |
Accounts payable to affiliates | | 40,332 | | | 16,456 | |
Taxes accrued | | 46,773 | | | 6,834 | |
Interest accrued | | 32,882 | | | 38,292 | |
| | | | |
Accrued compensation | | 60,358 | | | 64,408 | |
Current regulatory liabilities | | 8,642 | | | 7,952 | |
Advances from customers | | 101,766 | | | 104,297 | |
Other | | 32,595 | | | 44,907 | |
Total current liabilities | | 633,555 | | | 640,484 | |
Other Liabilities: | | | | |
Deferred income taxes | | 861,784 | | | 881,050 | |
Regulatory liabilities | | 888,699 | | | 874,601 | |
Pension and other postretirement benefits | | 230,579 | | | 233,965 | |
Other | | 170,329 | | | 135,468 | |
Total other liabilities | | 2,151,391 | | | 2,125,084 | |
Long-Term Debt | | 3,053,948 | | | 2,775,790 | |
Commitments and Contingencies | | | | |
Equity: | | | | |
Common stock, $2.50 par value (50,000 shares authorized; 39,151 shares issued and outstanding) | | 97,877 | | | 97,877 | |
Premium on capital stock | | 912,258 | | | 712,258 | |
Capital stock expense | | (2,097) | | | (2,097) | |
Retained earnings | | 2,107,995 | | | 1,991,319 | |
Accumulated other comprehensive loss | | (16,331) | | | (17,184) | |
Total equity | | 3,099,702 | | | 2,782,173 | |
Total | | $ | 8,938,596 | | | $ | 8,323,531 | |
| | | | |
The accompanying notes are an integral part of these statements. |
Idaho Power Company
Condensed Consolidated Statements of Cash Flows
(unaudited)
| | | | | | | | | | | | | | |
| | Nine months ended September 30, |
| | 2024 | | 2023 |
| | (in thousands) |
Operating Activities: | | | | |
Net income | | $ | 245,779 | | | $ | 225,812 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
Depreciation and amortization | | 168,150 | | | 146,203 | |
Deferred income taxes and investment tax credits | | (39,823) | | | (1,828) | |
Changes in regulatory assets and liabilities | | 124,549 | | | 1,585 | |
Pension and postretirement benefit plan expense | | 34,322 | | | 20,373 | |
Contributions to pension and postretirement benefit plans | | (23,930) | | | (54,371) | |
Earnings of equity-method investments | | (1,936) | | | (7,402) | |
Distributions from equity-method investments | | 3,100 | | | 550 | |
Allowance for equity funds used during construction | | (39,610) | | | (32,125) | |
Other non-cash adjustments to net income, net | | (3,843) | | | (1,056) | |
Change in: | | | | |
Accounts receivable and unbilled revenues | | 1,094 | | | (11,107) | |
Prepayments | | (7,938) | | | (2,677) | |
Materials, supplies, and fuel stock | | (59,105) | | | (45,343) | |
Accounts and wages payable | | 4,644 | | | (156,644) | |
Taxes accrued/receivable | | 48,753 | | | 70,947 | |
Other assets and liabilities | | 15,545 | | | (14,844) | |
Net cash provided by operating activities | | 469,751 | | | 138,073 | |
Investing Activities: | | | | |
Additions to utility plant, net | | (823,855) | | | (427,191) | |
| | | | |
Payments received from transmission project joint funding partners | | 58,750 | | | 14,920 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Other | | 11,999 | | | 9,099 | |
Net cash used in investing activities | | (753,106) | | | (403,172) | |
Financing Activities: | | | | |
Issuance of long-term debt | | 300,000 | | | 872,000 | |
Discount on issuance of long-term debt | | (186) | | | (7,006) | |
Retirement of long-term debt | | — | | | (225,000) | |
Dividends on common stock | | (129,268) | | | (80,698) | |
| | | | |
Capital contribution from parent | | 200,000 | | | — | |
| | | | |
Other | | (2,283) | | | 1,751 | |
Net cash provided by financing activities | | 368,263 | | | 561,047 | |
Net increase in cash and cash equivalents | | 84,908 | | | 295,948 | |
Cash and cash equivalents at beginning of the period | | 271,791 | | | 108,933 | |
Cash and cash equivalents at end of the period | | $ | 356,699 | | | $ | 404,881 | |
Supplemental Disclosure of Cash Flow Information: | | | | |
Cash (received from) paid to IDACORP related to income taxes | | $ | (15,483) | | | $ | 15,333 | |
Cash paid for interest (net of amount capitalized) | | $ | 88,193 | | | $ | 82,372 | |
Non-cash investing activities: | | | | |
Additions to utility plant in accounts payable | | $ | 144,232 | | | $ | 127,076 | |
The accompanying notes are an integral part of these statements.
IDACORP, INC. AND IDAHO POWER COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This Quarterly Report on Form 10-Q is a combined report of IDACORP and Idaho Power. Therefore, these Notes to the Condensed Consolidated Financial Statements apply to both IDACORP and Idaho Power. However, Idaho Power makes no representation as to the information relating to IDACORP’s other operations.
Nature of Business
IDACORP is a holding company formed in 1998 whose principal operating subsidiary is Idaho Power. Idaho Power is an electric utility engaged in the generation, transmission, distribution, sale, and purchase of electric energy and capacity with a service area covering approximately 24,000 square miles in southern Idaho and eastern Oregon. Idaho Power is regulated primarily by the state utility regulatory commissions of Idaho and Oregon and the FERC. Idaho Power is the parent of IERCo, a joint-owner of BCC, which mines and supplies coal to the Jim Bridger plant owned in part by Idaho Power.
IDACORP’s other notable subsidiaries include IFS, an investor in affordable housing and other real estate tax credit investments, and Ida-West, an operator of small PURPA-qualifying hydropower generation projects.
Regulation of Utility Operations
As a regulated utility, many of Idaho Power's fundamental business decisions are subject to the approval of governmental agencies, including the prices that Idaho Power is authorized to charge for its electric service. These approvals are a critical factor in determining IDACORP's and Idaho Power's results of operations and financial condition.
IDACORP's and Idaho Power's financial statements reflect the effects of the different ratemaking principles followed by the jurisdictions regulating Idaho Power. The application of accounting principles related to regulated operations sometimes results in Idaho Power recording expenses and revenues in a different period than when an unregulated entity would record such expenses and revenues. In these instances, the amounts are deferred or accrued as regulatory assets or regulatory liabilities on the balance sheet. Regulatory assets represent incurred costs that have been deferred because it is probable they will be recovered from customers through future rates. Regulatory liabilities represent obligations to make refunds to customers for previous collections, or represent amounts collected in advance of incurring an expense. The effects of applying these regulatory accounting principles to Idaho Power's operations are discussed in more detail in Note 3 - "Regulatory Matters."
Financial Statements
In the opinion of management of IDACORP and Idaho Power, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly each company's condensed consolidated balance sheets as of September 30, 2024, condensed consolidated statements of income for the three months and nine months ended September 30, 2024 and 2023, and condensed consolidated cash flows for the nine months ended September 30, 2024 and 2023. These adjustments are of a normal and recurring nature. These financial statements do not contain the complete detail or note disclosures concerning accounting policies and other matters that would be included in full-year financial statements and should be read in conjunction with the audited consolidated financial statements included in the 2023 Annual Report. The statements of income for the interim period are not necessarily indicative of the results to be expected for the full year. A change in management's estimates or assumptions could have a material impact on IDACORP's or Idaho Power's respective balance sheets and statements of income during the period in which such change occurred.
Management Estimates
Management makes estimates and assumptions when preparing financial statements in conformity with GAAP. These estimates and assumptions include, among others, those related to rate regulation, retirement benefits, contingencies, asset impairment, income taxes, unbilled revenues, and the allowance for uncollectible accounts. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates involve judgments with respect to, among other things, future economic factors that are difficult to predict and are beyond management's control. Accordingly, actual results could differ from those estimates.
New and Recently Adopted Accounting Pronouncements
Recently Adopted Accounting Pronouncements
There have been no recently adopted accounting pronouncements that have had a material impact on IDACORP's or Idaho Power's condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024, with early adoption permitted. The amendments in this ASU will be applied retrospectively. IDACORP and Idaho Power are currently evaluating the impact that adoption of this ASU will have on the notes to their respective financial statements, but the companies do not believe adoption of the new standard will have a material impact.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which expands the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments in this ASU are required to be applied prospectively and are allowed to be applied retrospectively. IDACORP and Idaho Power are currently evaluating the impact that adoption of this ASU will have on the notes to their respective financial statements.
There have been no other recent accounting pronouncements not yet adopted that are expected to have a material impact on IDACORP's or Idaho Power's condensed consolidated financial statements.
2. INCOME TAXES
In accordance with interim reporting requirements, IDACORP and Idaho Power use an estimated annual effective tax rate for computing their provisions for income taxes. An estimate of annual income tax expense (or benefit) is made each interim period using estimates for annual pre-tax income, income tax adjustments, and tax credits. The estimated annual effective tax rates do not include discrete events such as tax law changes, examination settlements, accounting method changes, or adjustments to tax expense or benefits attributable to prior years. Discrete events are recorded in the interim period in which they occur or become known. The estimated annual effective tax rate is applied to year-to-date pre-tax income to determine income tax expense (or benefit) for the interim period consistent with the annual estimate. In subsequent interim periods, income tax expense (or benefit) for the period is computed as the difference between the year-to-date amount reported for the previous interim period and the current period's year-to-date amount.
Income Tax Expense
The following table provides a summary of income tax expense for the nine months ended September 30, 2024 and 2023 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | IDACORP | | Idaho Power |
| | 2024 | | 2023 | | 2024 | | 2023 |
Income tax at statutory rates (federal and state) | | $ | 69,543 | | | $ | 66,650 | | | $ | 68,382 | | | $ | 65,916 | |
| | | | | | | | |
Excess deferred income tax reversal | | (7,535) | | | (8,013) | | | (7,535) | | | (8,013) | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Income tax return adjustments | | 1,875 | | | (8,227) | | | 1,865 | | | (7,732) | |
Other(1) | | (22,507) | | | (13,910) | | | (20,327) | | | (12,397) | |
Income tax expense before additional ADITC amortization | | $ | 41,376 | | | $ | 36,500 | | | $ | 42,385 | | | $ | 37,774 | |
Additional ADITC amortization | | (22,500) | | | (7,500) | | | (22,500) | | | (7,500) | |
Income tax expense | | $ | 18,876 | | | $ | 29,000 | | | $ | 19,885 | | | $ | 30,274 | |
Effective tax rate | | 7.0 | % | | 11.2 | % | | 7.5 | % | | 11.8 | % |
(1) "Other" primarily consists of the net tax effect of Idaho Power's regulatory flow-through tax adjustments.
3. REGULATORY MATTERS
Included below is a summary of Idaho Power's most recent general rate cases and base rate changes, as well as other recent or pending notable regulatory matters and proceedings.
Idaho and Oregon Rate Cases
Idaho Power's current base rates result from the IPUC order described in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report and the September 2024 OPUC order described below related to Idaho Power's general rate case filed with the OPUC in December 2023.
In May 2024, Idaho Power filed its 2024 Idaho Limited-Issue Rate Case and proposed rate schedules with the IPUC. The filing requested an increase in annual Idaho jurisdictional revenue of $99.3 million, to become effective January 1, 2025. If approved as filed, this request would result in an overall increase to adjusted base revenue of 7.31 percent.
The 2024 Idaho Limited-Issue Rate Case focuses on revenue requirements for approximately $730 million of incremental plant additions as of December 31, 2024, and incremental O&M labor costs. In the 2024 Idaho Limited-Issue Rate Case, Idaho Power did not request any changes to other aspects of the 2023 Settlement Stipulation approved by the IPUC for Idaho Power's 2023 Idaho general rate case. Additionally, the 2024 Idaho Limited-Issue Rate Case application:
•applies the overall rate of return approved in the 2023 Settlement Stipulation;
•does not seek to adjust any other revenue requirement components such as non-labor O&M expense, net power supply costs, or other revenue;
•does not propose changes to any other Idaho regulatory mechanisms, such as the power cost adjustment, fixed cost adjustment, or energy efficiency rider; and
•continues to reflect the 2023 Settlement Stipulation amounts for categories other than incremental plant and O&M labor costs.
Written testimony from the Staff of the IPUC and intervenors in the 2024 Idaho Limited-Issue Rate Case and Idaho Power's rebuttal testimony are due in November 2024. Technical hearings before the IPUC are scheduled for December 2024. Idaho Power is unable to predict the outcome of the 2024 Idaho Limited-Issue Rate Case. Idaho Power anticipates that new rates, if approved by the IPUC, would become effective on or after January 1, 2025.
In December 2023, Idaho Power filed a general rate case with the OPUC. In September 2024, the OPUC issued an order approving the 2024 Oregon Settlement Stipulations, which are settlement stipulations among Idaho Power and intervening parties settling the general rate case. The OPUC order and the 2024 Oregon Settlement Stipulations contain the following significant terms, among other items:
•Idaho Power will implement revised tariff schedules designed to increase annual Oregon-jurisdiction revenue by $6.7 million, or 12.14 percent; and
•A 9.5 percent Oregon-jurisdiction return on year-end equity and a 7.302 percent Oregon-jurisdiction authorized rate of return based on a 5.104 percent cost of debt and capital structure of 50 percent debt and 50 percent equity, applied to an Oregon-jurisdictional rate base of approximately $188.9 million.
Rate changes from the 2024 Oregon Settlement Stipulations became effective on October 15, 2024. The 2024 Oregon Settlement Stipulations do not preclude Idaho Power from filing another general rate case or other limited issue proceeding in Oregon at any time in the future.
Idaho ADITC Mechanism
The May 2018 Idaho settlement stipulation related to tax reform (2018 Settlement Stipulation) and the 2023 Settlement Stipulation are each described in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report. The 2023 Settlement Stipulation modifies the 2018 Settlement Stipulation in part. The 2023 Settlement Stipulation includes provisions for the accelerated amortization of ADITC to help achieve a minimum 9.12 percent Idaho ROE.
Based on its estimate of full-year 2024 Idaho ROE, in the three months and nine months ended September 30, 2024, Idaho Power recorded $2.5 million and $22.5 million, respectively, in additional ADITC amortization under the 2023 Settlement Stipulation. Accordingly, at September 30, 2024, approximately $87.5 million of additional ADITC remained available for
future use. Idaho Power recorded zero and $7.5 million, respectively, of additional ADITC amortization during the three months and nine months ended September 30, 2023, based on its then-current estimate of full-year 2023 Idaho ROE.
Power Cost Adjustment Mechanisms
In both its Idaho and Oregon jurisdictions, Idaho Power's power cost adjustment mechanisms address the volatility of power supply costs and provide for annual adjustments to the rates charged to its retail customers. The power cost adjustment mechanisms compare Idaho Power's actual net power supply costs (primarily fuel and purchased power less wholesale energy sales) against net power supply costs being recovered in Idaho Power's retail rates. Under the power cost adjustment mechanisms, certain differences between actual net power supply costs incurred by Idaho Power and costs being recovered in retail rates are recorded as a deferred charge or credit on the balance sheet for future recovery or refund. The power supply costs deferred primarily result from changes in contracted power purchase prices and volumes, changes in wholesale market prices and transaction volumes, fuel prices, and the levels of Idaho Power's own generation.
In May 2024, the IPUC issued an order approving a $35.7 million net decrease in PCA revenues, effective for the PCA collection period from June 1, 2024, to May 31, 2025. The net decrease in PCA revenues reflects forecasted improved hydropower generation during the April 2024 to March 2025 PCA deferral period.
In May 2024, the OPUC approved a settlement stipulation between Idaho Power and intervening parties for its APCU in Oregon. The APCU includes both an October update and a March forecast. The results of the October update are reflected as an update to base rates and the results of the March forecast are reflected as an update to APCU rates. The settlement resulted in an overall rate decrease of $6.9 million effective June 1, 2024.
Idaho Fixed Cost Adjustment Mechanism
The FCA mechanism, applicable to Idaho residential and small commercial customers, is designed to remove a portion of Idaho Power’s financial disincentive to invest in energy efficiency programs by separating (or decoupling) the recovery of fixed costs from the variable kilowatt-hour charge and linking it instead to a set amount per customer. Under Idaho Power's current rate design, Idaho Power recovers a portion of fixed costs through the variable kilowatt-hour charge, which may result in over-collection or under-collection of fixed costs. To return over-collection to customers or to collect under-collection from customers, the FCA mechanism allows Idaho Power to accrue, or defer, the difference between the authorized fixed-cost recovery amount per customer and the actual fixed costs per customer recovered by Idaho Power during the year. The IPUC has discretion to cap the annual increase in the FCA recovery at 3 percent of base revenue, with any excess deferred for collection in a subsequent year. In May 2024, the IPUC issued an order approving an $11.7 million increase in recovery from the FCA from $25.1 million to $36.8 million for the 2023 FCA deferral, with new rates effective for the period from June 1, 2024, to May 31, 2025.
4. REVENUES
The following table provides a summary of electric utility operating revenues for IDACORP and Idaho Power for the three months and nine months ended September 30, 2024 and 2023 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
Revenue from contracts with customers | | $ | 532,477 | | | $ | 496,632 | | | $ | 1,393,006 | | | $ | 1,267,527 | |
Alternative revenue programs and other revenues | | (4,990) | | | 13,003 | | | 32,600 | | | 84,173 | |
Total electric utility operating revenues | | $ | 527,487 | | | $ | 509,635 | | | $ | 1,425,606 | | | $ | 1,351,700 | |
Revenues from Contracts with Customers
The following table presents revenues from contracts with customers disaggregated by revenue source for the three months and nine months ended September 30, 2024 and 2023 (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
Retail revenues: | | | | | | | | |
Residential (includes $(6,193), $5,583, $(8,982), and $20,170, respectively, related to the FCA)(1) | | $ | 195,291 | | | $ | 181,736 | | | $ | 525,353 | | | $ | 505,158 | |
Commercial (includes $(66), $328, $(158), and $900, respectively, related to the FCA)(1) | | 112,323 | | | 107,971 | | | 303,031 | | | 283,478 | |
Industrial | | 71,908 | | | 67,522 | | | 203,990 | | | 181,312 | |
Irrigation | | 109,861 | | | 104,645 | | | 191,671 | | | 168,358 | |
| | | | | | | | |
Deferred revenue related to HCC relicensing AFUDC(2) | | (2,881) | | | (2,815) | | | (6,913) | | | (6,861) | |
| | | | | | | | |
Total retail revenues | | 486,502 | | | 459,059 | | | 1,217,132 | | | 1,131,445 | |
Less: FCA mechanism revenues(1) | | 6,259 | | | (5,911) | | | 9,140 | | | (21,070) | |
Wholesale energy sales | | 6,946 | | | 5,065 | | | 65,759 | | | 50,461 | |
Transmission wheeling-related revenues | | 19,419 | | | 20,090 | | | 60,142 | | | 61,701 | |
Energy efficiency program revenues | | 5,283 | | | 10,498 | | | 16,699 | | | 22,265 | |
Other revenues from contracts with customers | | 8,068 | | | 7,831 | | | 24,134 | | | 22,725 | |
Total revenues from contracts with customers | | $ | 532,477 | | | $ | 496,632 | | | $ | 1,393,006 | | | $ | 1,267,527 | |
(1) The FCA mechanism is an alternative revenue program in the Idaho jurisdiction and does not represent revenue from contracts with customers.
(2) The IPUC allows Idaho Power to recover a portion of the AFUDC on construction work in progress related to the HCC relicensing process, even though the relicensing process is not yet complete and the costs have not been moved to utility plant in service. Idaho Power is collecting $8.8 million annually in the Idaho jurisdiction but is deferring revenue recognition of the amounts collected until the license is issued and the accumulated license costs approved for recovery are placed in service.
Alternative Revenue Programs and Other Revenues
While revenues from contracts with customers make up most of Idaho Power’s revenues, the IPUC has authorized the use of an additional regulatory mechanism, the FCA mechanism, which may increase or decrease tariff-based customer rates. The FCA mechanism is described in Note 3 - "Regulatory Matters." The FCA mechanism revenues include only the initial recognition of FCA revenues when they meet the regulator-specified conditions for recognition. Revenue from contracts with customers excludes the portion of the tariff price representing FCA revenues that Idaho Power initially recorded in prior periods when revenues met regulator-specified conditions. When Idaho Power includes those amounts in the price of utility service and billed to customers, Idaho Power records such amounts as recovery of the associated regulatory asset or liability and not as revenues.
Derivative revenues include gains from settled electricity swaps and sales of electricity under forward sales contracts that are bundled with renewable energy credits. Related to these forward sales, Idaho Power simultaneously enters into forward purchases of electricity for the same quantity at the same location, which are recorded in purchased power on the condensed consolidated statements of income. For more information on settled electricity swaps, see Note 11 - "Derivative Financial Instruments."
The table below presents the FCA mechanism revenues and other revenues for the three months and nine months ended September 30, 2024 and 2023 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
FCA mechanism revenues | | $ | (6,259) | | | $ | 5,911 | | | $ | (9,140) | | | $ | 21,070 | |
Derivative revenues | | 1,269 | | | 7,092 | | | 41,740 | | | 63,103 | |
Total alternative revenue programs and other revenues | | $ | (4,990) | | | $ | 13,003 | | | $ | 32,600 | | | $ | 84,173 | |
Receivables and Allowance for Uncollectible Accounts
The following table provides a rollforward of the allowance for uncollectible accounts related to customer receivables for the nine months ended September 30, 2024 and 2023 (in thousands):
| | | | | | | | | | | | | | |
| | Nine months ended September 30, |
| | 2024 | | 2023 |
Balance at beginning of period | | $ | 4,869 | | | $ | 5,034 | |
Additions to the allowance | | 1,744 | | | 2,040 | |
Write-offs, net of recoveries | | (3,317) | | | (2,939) | |
Balance at end of period | | $ | 3,296 | | | $ | 4,135 | |
Allowance for uncollectible accounts as a percentage of customer receivables | | 2.2 | % | | 3.0 | % |
5. LONG-TERM DEBT
Idaho Power First Mortgage Bonds
On August 12, 2024, Idaho Power issued $300 million in aggregate principal amount of 5.20% first mortgage bonds, secured medium-term notes, Series M, maturing on August 15, 2034.
Idaho Power's issuance of long-term indebtedness is subject to the approval of the IPUC, OPUC, and WPSC. In February and March 2024, Idaho Power received orders from the IPUC, OPUC, and WPSC authorizing the company to issue and sell from time to time up to $1.2 billion in aggregate principal amount of debt securities and first mortgage bonds, subject to conditions specified in the orders. Authority from the IPUC is effective through December 31, 2026, subject to extensions upon request to the IPUC. The OPUC's and WPSC's orders do not impose a time limitation for issuances, but the OPUC order does impose a number of other conditions, including a requirement that the interest rates for the debt securities or first mortgage bonds fall within either (a) designated spreads over comparable U.S. Treasury rates or (b) a maximum interest rate limit of 8 percent. At September 30, 2024, $900 million remained available for debt issuance under the regulatory orders.
6. COMMON STOCK
IDACORP Common Stock
During the nine months ended September 30, 2024, IDACORP issued an aggregate of 2,654,577 shares of common stock using original issuances of shares. IDACORP granted 103,771 restricted stock unit awards to employees and issued 61,997 shares of common stock pursuant to the IDACORP, Inc. 2000 Long-Term Incentive and Compensation Plan, including 10,571 shares of common stock issued to members of the board of directors. IDACORP issued 50,138 shares of common stock pursuant to its IDACORP, Inc. Dividend Reinvestment and Stock Purchase Plan.
Effective January 1, 2024, IDACORP instructed the plan administrator of the IDACORP, Inc. Dividend Reinvestment and Stock Purchase Plan to use original issuance of common stock from IDACORP, as opposed to market purchases of IDACORP common stock, to acquire shares of IDACORP common stock for the plan. However, IDACORP may determine at any time to resume market purchases of common stock under the plan. As directed by IDACORP, the plan administrator of the Idaho Power Company Employee Savings Plan used market purchases of IDACORP common stock to acquire shares of IDACORP common stock for the plan.
At-the-Market Offering Program: On May 20, 2024, IDACORP entered into an Equity Distribution Agreement (EDA) pursuant to which it may issue, offer, and sell, from time to time, up to an aggregate gross sales price of $300