BOISE, Idaho, Aug. 1, 2019 /PRNewswire/ -- IDACORP, Inc. (NYSE:
IDA) reported second quarter 2019 net income attributable to
IDACORP of $53.2 million, or
$1.05 per diluted share, compared
with $62.3 million, or $1.23 per diluted share, in the second quarter of
2018. For the first six months of 2019, IDACORP reported net income
attributable to IDACORP of $95.8
million, or $1.90 per diluted
share, compared with $98.4 million,
or $1.95 per diluted share, in the
first six months of 2018.
"Continued customer growth of 2.5 percent and prudent management
of operating expenses helped offset the impact of cool and wet
weather across Idaho Power's service area compared with last year's
second quarter," said IDACORP President and Chief Executive Officer
Darrel Anderson. "Despite the
impacts of weather on sales, we recorded the fourth highest second
quarter ever at IDACORP.
"With financial performance to-date and our outlook for the
balance of the year, we have increased the earnings guidance range
for 2019 to $4.35 to $4.50 per diluted share, and we continue to
expect to preserve the full $45
million of tax credits for future use under our earnings
support and sharing mechanism," concluded Anderson.
Performance Summary
A summary of financial highlights for the quarter ended
June 30, 2019 and 2018 is as follows (in thousands, except per
share amounts):
|
|
Three months
ended June 30,
|
Six months
ended June 30,
|
|
|
2019
|
|
2018
|
2019
|
|
2018
|
Net income
attributable to IDACORP, Inc.
|
|
$
|
53,156
|
|
|
$
|
62,288
|
|
$
|
95,842
|
|
|
$
|
98,430
|
|
Average outstanding
shares – diluted (000's)
|
|
50,507
|
|
|
50,481
|
|
50,512
|
|
|
50,472
|
|
IDACORP, Inc.
earnings per diluted share
|
|
$
|
1.05
|
|
|
$
|
1.23
|
|
$
|
1.90
|
|
|
$
|
1.95
|
|
The table below provides a reconciliation of net income
attributable to IDACORP for the three and six months ended
June 30, 2019, from the same period in 2018 (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, 2018
|
|
|
|
$
|
62.3
|
|
|
|
|
$
|
98.4
|
|
Increase (decrease)
in Idaho Power net income:
|
|
|
|
|
|
|
|
|
Customer growth, net
of associated power supply costs and power cost adjustment
mechanisms
|
|
4.2
|
|
|
|
|
8.2
|
|
|
|
Usage per retail
customer, net of associated power supply costs and power cost
adjustment mechanisms
|
|
(13.4)
|
|
|
|
|
(10.4)
|
|
|
|
Idaho fixed cost
adjustment (FCA) revenues
|
|
1.8
|
|
|
|
|
(0.5)
|
|
|
|
Retail revenues per
megawatt-hour (MWh), net of associated power supply costs and power
cost adjustment mechanisms
|
|
(7.0)
|
|
|
|
|
(4.3)
|
|
|
|
Transmission
wheeling-related revenues
|
|
(2.0)
|
|
|
|
|
2.0
|
|
|
|
Other operations and
maintenance (O&M) expenses
|
|
5.3
|
|
|
|
|
2.6
|
|
|
|
Other changes in
operating revenues and expenses, net
|
|
0.2
|
|
|
|
|
(0.9)
|
|
|
|
Decrease in Idaho
Power operating income
|
|
(10.9)
|
|
|
|
|
(3.3)
|
|
|
|
Earnings of
equity-method investments
|
|
1.4
|
|
|
|
|
(0.6)
|
|
|
|
Non-operating income
and expenses
|
|
—
|
|
|
|
|
1.7
|
|
|
|
Income tax
expense
|
|
—
|
|
|
|
|
(1.5)
|
|
|
|
Total decrease in
Idaho Power net income
|
|
|
|
(9.5)
|
|
|
|
|
(3.7)
|
|
Other IDACORP
changes (net of tax)
|
|
|
|
0.4
|
|
|
|
|
1.1
|
|
Net income
attributable to IDACORP, Inc. - June 30, 2019
|
|
|
|
$
|
53.2
|
|
|
|
|
$
|
95.8
|
|
Net Income - Second Quarter 2019
IDACORP's net income decreased $9.1
million for the second quarter of 2019 compared with the
second quarter of 2018, primarily due to lower net income at Idaho
Power.
Customer growth increased operating income by $4.2 million in the second quarter of 2019
compared with the second quarter of 2018, as the number of Idaho
Power customers grew by 2.5 percent during the twelve months ended
June 30, 2019. Sales volumes on a
per-customer basis decreased operating income by $13.4 million in the second quarter of 2019
compared with the second quarter of 2018. Greater precipitation in
Idaho Power's service area led agricultural irrigation customers to
use 20 percent less energy per customer to operate irrigation
pumps. Also, residential and commercial customers used less energy
per customer for cooling purposes, primarily due to cooler
temperatures. The decrease in residential sales volumes per
customer was mostly offset by the FCA mechanism (applicable to
residential and small general service customers), which increased
revenues by $1.8 million.
The net decrease in retail revenues per MWh decreased operating
income by $7.0 million in the second
quarter of 2019 compared with the second quarter of 2018. The
settlement stipulations approved by the IPUC and OPUC during the
second quarter of 2018 relating to income tax reform reduced
revenues in the second quarter of 2019 more significantly than in
the second quarter of 2018. To a lesser extent, changes in the
customer sales mix decreased the retail revenues per MWh as volumes
sold to residential, commercial, and irrigation customers made up a
lesser portion of the customer sales mix than industrial customers
in the second quarter of 2019 compared with the second quarter of
2018. Residential, commercial, and irrigation customers generally
pay a higher per-MWh rate than industrial customers.
During the second quarter of 2019, transmission wheeling-related
revenues decreased $2.0 million
compared with the second quarter of 2018, largely due to a decrease
in Idaho Power's open access transmission tariff (OATT) rates that
became effective in October 2018.
Other O&M expenses were $5.3
million lower in the second quarter of 2019 compared with
the second quarter of 2018. Other O&M expenses related to Idaho
Power's hydropower generation decreased $1.1
million due primarily to fewer maintenance projects at
hydropower locations in the second quarter of 2019 compared with
the second quarter of 2018. Labor and benefit costs decreased
$1.5 million, primarily related to
the levels of accruals for variable employee-related costs. As
provided by the settlement stipulation approved by the IPUC in 2018
related to income tax reform, O&M expenses in the second
quarter of 2018 included $1.1 million
of non-cash amortization expense of regulatory deferrals that would
otherwise be a future liability of Idaho customers.
Net Income - Year-to-Date 2019
IDACORP's net income decreased $2.6
million for the first half of 2019 compared with the same
period of 2018, primarily due to lower net income at Idaho
Power.
Customer growth increased operating income by $8.2 million in the first half of 2019 compared
with the first half of 2018. Sales volumes on a per-customer basis
decreased operating income by $10.4
million in the first half of 2019 compared with the first
half of 2018, primarily due to lower irrigation, residential, and
commercial revenues in the second quarter of 2019, as described
above. The lower sales volumes on a per-customer basis in the
second quarter of 2019 were partially offset by a 3 percent
increase in sales volumes per residential customer in the first
quarter of 2019 compared with the first quarter of 2018, as colder
temperatures led residential customers to use more energy for
heating.
The net decrease in retail revenues per MWh decreased operating
income by $4.3 million in the first
half of 2019 compared with the first half of 2018 due primarily to
the effects of the settlement stipulations approved by the IPUC and
OPUC during the second quarter of 2018 related to income tax reform
noted above.
During the first half of 2019, Idaho Power benefited from a
$2.0 million increase in transmission
wheeling-related revenue, compared with the first half of 2018.
This change was largely due to an increase in wheeling-related
volumes driven by regional wholesale energy market activity in the
first quarter of 2019, partially offset by a decrease in Idaho
Power's OATT rates that became effective in October 2018.
Other O&M expenses were $2.6
million lower in the first half of 2019 compared with the
first half of 2018. Other O&M expenses related to Idaho Power's
hydropower generation decreased $2.3
million due primarily to fewer maintenance projects at
hydropower locations in the first half of 2019. As provided by the
settlement stipulation approved by the IPUC in 2018 related to
income tax reform, O&M expenses in the first half of 2018
included $1.1 million of non-cash
amortization expense of regulatory deferrals that would otherwise
be a future liability of Idaho
customers.
Based on its estimate of full-year 2019 return on year-end
equity in the Idaho jurisdiction
(Idaho ROE), in the first half of 2019, Idaho Power recorded no
additional accumulated deferred investment tax credits amortization
under the Idaho regulatory
settlement stipulation approved in October
2014.
2019 Annual Earnings Guidance and Key Operating and Financial
Metrics
IDACORP is increasing its earnings guidance estimate for
2019. The 2019 guidance incorporates all of the key operating and
financial assumptions listed in the table that follows (in
millions, except per share amounts):
|
|
Current(1)
|
|
Previous(2)
|
IDACORP Earnings
Guidance (per share)
|
|
$ 4.35 – $
4.50
|
|
$ 4.30 – $
4.45
|
Idaho Power
Additional Amortization of Accumulated Deferred Investment Tax
Credits
|
|
No Change
|
|
None
|
Idaho Power Operating
& Maintenance Expense
|
|
No Change
|
|
$ 350 – $
360
|
Idaho Power Capital
Expenditures, Excluding Allowance for Funds Used During
Construction
|
|
No Change
|
|
$ 280 – $
290
|
Idaho Power
Hydroelectric Generation (MWh)
|
|
8.0 – 9.0
|
|
7.0 – 9.0
|
(1)
|
As of August 1,
2019.
|
(2)
|
As of May 2, 2019,
the date of filing IDACORP's and Idaho Power's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2019.
|
More detailed financial information is provided in IDACORP's
Quarterly Report on Form 10-Q filed today with the U.S. Securities
and Exchange Commission and posted to the IDACORP Web site 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 the company's
website (www.idacorpinc.com), or by calling (800) 242-0681 for
listen-only mode. There is no passcode required; simply request to
be connected to the "IDACORP, Inc." call. The conference call
logistics are also posted on the company's website and will be
included in the company's earnings news release. Slides will be
included during the conference call. To access the slide deck,
register for the event just prior to the call at
www.idacorpinc.com/investor-relations/earnings-center/conference-calls.
A replay of the conference call will be available on the company's
website for a period of 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, a holder of affordable housing projects and other real
estate 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
began operations in 1916 and employs approximately 2,000 people to
serve a 24,000-square-mile service area in southern Idaho and eastern Oregon. With 17 low-cost hydroelectric
projects as the core of its generation portfolio, Idaho Power's
more than 560,000 residential, business and agricultural customers
pay some of the nation's lowest prices for electricity. To learn
more about Idaho Power or IDACORP, visit www.idahopower.com or
www.idacorpinc.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. and Idaho Power Company may contain)
statements, including, without limitation, earnings guidance and
estimated key operating and financial metrics, that relate to
future events and expectations and, as such, 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, outlook, assumptions, or future events or
performance, often, but not always, through the use of words or
phrases such as "anticipates," "believes," "continues," "could,"
"estimates," "expects," "guidance," "intends," "potential,"
"plans," "predicts," "projects," "targets," or similar expressions,
are not statements of historical facts and may be
forward-looking. Forward-looking statements are not
guarantees of future performance and involve estimates,
assumptions, risks, and uncertainties. Actual results,
performance, or outcomes may differ materially from the results
discussed in the statements. 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 the following: (a)
the effect of 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 investments; (b) the
expense and risks associated with capital expenditures for utility
infrastructure, and the timing and availability of cost recovery
for such expenditures through customer rates, including the
potential for the write-down or write-off of expenditures if not
deemed prudent by regulators; (c) changes in residential,
commercial, and industrial growth and demographic patterns within
Idaho Power's service area, the loss or change in the business of
significant customers, or the addition of new customers, and their
associated impacts on loads and load growth, and the availability
of regulatory mechanisms that allow for timely cost recovery
through customer rates in the event of those changes; (d) the
impacts of economic conditions, including inflation, interest
rates, regulatory authorized returns on equity, supply costs,
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 the
collection of receivables; (e) unseasonable or severe weather
conditions, wildfires, droughts, and other natural phenomena and
natural disasters, including conditions and events associated with
climate change, which affect customer demand, hydropower generation
levels, repair costs, liability for damage caused by utility
property, including from wildfires, and the availability and cost
of fuel for generation plants or purchased power to serve
customers; (f) advancement of self-generation, energy storage, and
energy efficiency technologies that may affect Idaho Power's sale
or delivery of electric power or introduce new cyber security
risks; (g) changes in tax laws or related regulations or new
interpretations of applicable laws by federal, state, or local
taxing jurisdictions, the availability of tax credits, and the tax
rates payable by IDACORP shareholders on common stock dividends;
(h) adoption of, changes in, and costs of compliance with laws,
regulations, and policies relating to the environment, natural
resources, and threatened and endangered species, and the ability
to recover associated increased costs through rates; (i) 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; (j) the
ability to acquire fuel, power, and transmission capacity under
reasonable terms, particularly in the event of unanticipated power
demands, lack of physical availability, transportation constraints,
or a credit downgrade; (k) accidents, fires (either affecting or
caused by Idaho Power facilities or infrastructure), explosions,
and mechanical breakdowns that may occur while operating and
maintaining Idaho Power assets, which can cause unplanned outages,
reduce generating output, damage the companies' assets, operations,
or reputation, subject the companies to third-party claims for
property damage, personal injury, or loss of life, or result in the
imposition of civil, criminal, and regulatory fines and penalties,
for which the companies may have inadequate insurance coverage; (l)
the increased purchased power costs and operational challenges
associated with purchasing and integrating intermittent renewable
energy sources into Idaho Power's resource portfolio; (m)
disruptions or outages of Idaho Power's generation or transmission
systems or of any interconnected transmission systems may constrain
resources or cause Idaho Power to incur repair costs and purchase
replacement power at increased costs; (n) the ability to obtain
debt and equity financing or refinance existing debt when necessary
and on favorable terms, which can be affected by factors such as
credit ratings, volatility or disruptions in the financial markets,
interest rate fluctuations, decisions by the Idaho or Oregon public
utility commissions, and the companies' past or projected financial
performance; (o) reductions in credit ratings, which could
adversely impact access to debt and equity markets, increase
borrowing costs, and require the posting of additional collateral
to counterparties pursuant to credit and contractual arrangements;
(p) the ability to enter into financial and physical commodity
hedges with creditworthy counterparties to manage price and
commodity risk, and the failure of any such risk management and
hedging strategies to work as intended; (q) changes in actuarial
assumptions, changes in interest rates, and the return on plan
assets for pension and other post-retirement plans, which can
affect future pension and other postretirement plan funding
obligations, costs, and liabilities and the company's cash flows;
(r) the ability to continue to pay dividends based on financial
performance and in light of contractual covenants and restrictions
and regulatory limitations; (s) employee workforce factors,
including the operational and financial costs of unionization or
the attempt to unionize all or part of the companies' workforce,
the impact of an aging workforce and retirements, the cost and
ability to attract and retain skilled workers, and the ability to
adjust the labor cost structure when necessary; (t) failure to
comply with state and federal laws, regulations, and orders,
including new interpretations and enforcement initiatives by
regulatory and oversight bodies, which may result in penalties and
fines and increase the cost of compliance, the nature and extent of
investigations and audits, and the cost of remediation; (u) the
inability to obtain or 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) the cost and outcome of litigation,
dispute resolution, and regulatory proceedings, and the ability to
recover those costs or the costs of resulting operational changes
through insurance or rates, or from third parties; (w) the
companies' failure to secure data or to comply with privacy laws or
regulations, security breaches, or the disruption or damage to the
companies' business, operations, or reputation resulting from
cyber-attacks and related litigation or penalties, terrorist
incidents or the threat of terrorist incidents, or other malicious
acts, and acts of war; (x) unusual or unanticipated changes in
normal business operations, including unusual maintenance or
repairs, or the failure to successfully implement new technology
solutions; and (y) adoption of or changes in accounting policies
and principles, changes in accounting estimates, and new U.S.
Securities and Exchange Commission or New York Stock Exchange
requirements, or new interpretations of existing requirements. Any
forward-looking statement speaks only as of the date on which such
statement is made. New factors emerge from time to time and
it is not possible for management to predict all such factors, nor
can it assess the impact of any such factor on the business or the
extent to which any factor, or combination of factors, may cause
results to differ materially from those contained in any
forward-looking statement. Readers should also review the
risks and uncertainties listed in IDACORP, Inc.'s and Idaho Power
Company's most recent Annual Report on Form 10-K and other reports
the companies file with the U.S. Securities and Exchange
Commission, including (but not limited to) Part I, Item 1A - "Risk
Factors" in the Form 10-K and Management's Discussion and Analysis
of Financial Condition and Results of Operations and the risks
described therein from time to time. IDACORP and Idaho Power
disclaim any obligation to update publicly any forward-looking
information, whether in response to new information, future events,
or otherwise, except as required by applicable law.
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SOURCE IDACORP, Inc.