BOISE, Idaho, Nov. 2, 2017
/PRNewswire/ -- IDACORP, Inc. (NYSE: IDA) recorded third quarter
2017 net income attributable to IDACORP of $90.6 million, or $1.80 per diluted share, compared with
$83.1 million, or $1.65 per diluted share, in the third quarter of
2016. For the first nine months of 2017, IDACORP recorded net
income attributable to IDACORP of $173.6
million, or $3.44 per diluted
share, compared with $165.1 million,
or $3.28 per diluted share, in the
first nine months of 2016.
"IDACORP's third quarter performance was driven primarily by
customer growth and weather conditions," said IDACORP President and
CEO Darrel Anderson. "Strong
economic activity throughout the service area increased sales
volumes for most customer classes, while warmer than normal summer
weather led to increased sales to residential customers when
compared with last year's third quarter. The increased sales
volumes combined with effective management of operating expenses
helped contribute to the growth in operating income.
"For the full year of 2017, we continue to expect that Idaho
Power will not need to use any additional tax credit amortization
under the Idaho regulatory
settlement," added Anderson. IDACORP is increasing its full year
2017 earnings guidance to $4.05 –
$4.15 per diluted share.
Performance Summary
A summary of financial highlights for the periods ended
September 30, 2017 and 2016 is as follows (in thousands,
except per share amounts):
|
|
Three months
ended September 30,
|
|
Nine months
ended
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income
attributable to IDACORP, Inc.
|
|
$
|
90,634
|
|
|
$
|
83,100
|
|
|
$
|
173,567
|
|
|
$
|
165,075
|
|
Average outstanding
shares – diluted (000's)
|
|
50,421
|
|
|
50,393
|
|
|
50,408
|
|
|
50,361
|
|
IDACORP, Inc.
earnings per diluted share
|
|
$
|
1.80
|
|
|
$
|
1.65
|
|
|
$
|
3.44
|
|
|
$
|
3.28
|
|
The table below provides a reconciliation of net income
attributable to IDACORP for the three and nine months ended
September 30, 2017, from the same periods in 2016 (items are
in millions and are before related income tax impact unless
otherwise noted).
|
|
Three months
ended
|
|
Nine months
ended
|
Net income
attributable to IDACORP, Inc. - September 30, 2016
|
|
|
|
$
|
83.1
|
|
|
|
|
$
|
165.1
|
|
Increase
(decrease) in Idaho Power net income:
|
|
|
|
|
|
|
|
|
Customer growth, net
of associated power supply costs and power cost adjustment
mechanism impacts
|
|
2.3
|
|
|
|
|
7.0
|
|
|
|
Usage per customer,
net of associated power supply costs and power cost adjustment
mechanism impacts
|
|
12.0
|
|
|
|
|
12.2
|
|
|
|
Fixed cost adjustment
(FCA) revenues
|
|
(7.4)
|
|
|
|
|
(13.7)
|
|
|
|
Increase in revenues
per MWh, net of associated power supply costs and power cost
adjustment mechanism impacts
|
|
14.3
|
|
|
|
|
30.3
|
|
|
|
Third-party use of
electric property, wheeling, and other revenue
|
|
2.1
|
|
|
|
|
9.1
|
|
|
|
Other operating and
maintenance expenses
|
|
2.9
|
|
|
|
|
0.4
|
|
|
|
Depreciation
expense
|
|
(4.2)
|
|
|
|
|
(14.8)
|
|
|
|
Other changes in
operating revenues and expenses, net
|
|
(0.4)
|
|
|
|
|
(0.8)
|
|
|
|
Increase in Idaho
Power operating income
|
|
21.6
|
|
|
|
|
29.7
|
|
|
|
Earnings of
unconsolidated equity-method investments
|
|
(7.0)
|
|
|
|
|
(6.5)
|
|
|
|
Non-operating income
and expenses
|
|
(0.7)
|
|
|
|
|
0.9
|
|
|
|
Additional
Accumulated Deferred Investment Tax Credits (ADITC)
amortization
|
|
(1.0)
|
|
|
|
|
(1.5)
|
|
|
|
Income tax expense
(excluding additional ADITC amortization)
|
|
(4.6)
|
|
|
|
|
(13.8)
|
|
|
|
Total increase in
Idaho Power net income
|
|
|
|
8.3
|
|
|
|
|
8.8
|
|
Other changes
(net of tax)
|
|
|
|
(0.8)
|
|
|
|
|
(0.3)
|
|
Net income
attributable to IDACORP, Inc. - September 30, 2017
|
|
|
|
$
|
90.6
|
|
|
|
|
$
|
173.6
|
|
Net Income - Third Quarter 2017
IDACORP's net income increased $7.5
million for the third quarter of 2017 compared with the
third quarter of 2016, primarily due to higher net income at Idaho
Power. Continued customer growth in Idaho Power's service area,
higher sales volumes resulting from warmer summer temperatures in
Idaho Power's service area, lower other operating and maintenance
expenses, and the net effects of the Valmy Plant settlement
stipulations in the third quarter of 2017 contributed to the
increase in net income.
Customer growth increased operating income by $2.3 million in the third quarter of 2017, as the
number of Idaho Power customers grew by 1.8 percent over the twelve
months ended September 30, 2017.
Warmer summer temperatures in Idaho Power's service area in the
third quarter of 2017 led to an increase in sales volumes on a
per-customer basis, primarily for residential customers using
energy for cooling, compared with the third quarter of 2016, while
higher levels of commercial and industrial activity also led to an
increase in sales volumes on a per customer basis for commercial
and industrial customers. The increases in sales volumes on a
per-customer basis increased operating income by $12.0 million in the third quarter of 2017
compared with the third quarter of 2016. The increase in revenues
from increased sales volumes was partially offset by the FCA
mechanism which reduced revenues by $7.4
million during the third quarter of 2017 compared with the
third quarter of 2016. The warmer summer temperatures also caused
an increase in the proportion of residential sales in higher rate
categories in Idaho Power's tiered rate structure, partially
contributing to a $14.3 million
increase in operating income.
In the second quarter of 2017, the IPUC and OPUC each approved
settlement stipulations related to Idaho Power's plan to end its
participation in coal-fired operations at the Valmy Plant by the
end of 2025. The settlement stipulations resulted in increased
general business revenue collections and general business revenue
accruals in the third quarter of 2017 (included in the $14.3 million "Increase in revenues per MWh, net
of associated power supply costs and power cost adjustment
mechanism impacts" in the table above), increased net depreciation
expense (included in the $4.2 million
increase in "Depreciation expense" in the table above), and
increased associated income tax expenses for the quarter, including
plant-related flow-through tax adjustments.
For both the third quarter and nine months ended September 30, 2017, the settlement stipulations
increased general business revenue collections, general business
revenue accruals, net depreciation expense, and income tax expense.
The ongoing annual benefit to net income from the Valmy Plant
settlement stipulations is expected to decline slightly each year
through 2028, primarily due to the annual decline in Valmy
Plant-related rate base, which is expected to be fully depreciated
by December 31, 2028. Compared with
Idaho Power's estimate of what ongoing net income would have been
without the settlement stipulations, the settlement stipulations
increased after-tax net income for the first nine months of 2017 by
$3.8 million, of which $1.3 million was recorded during the third
quarter of 2017. Idaho Power estimates the Valmy Plant settlement
stipulations will increase after-tax net income by approximately
$1.4 million during the last three
months of 2017 for a full-year 2017 increase to after-tax net
income of approximately $5.2
million.
During the third quarter of 2017, Idaho Power benefited from a
$2.1 million increase in third-party
use of electric property, wheeling, and other revenue. This change
was largely due to an increase in wheeling volumes and an increase
in Idaho Power's Open Access Transmission Tariff (OATT) rates that
became effective in October 2016.
Other O&M expenses were $2.9
million lower in the third quarter of 2017 compared with the
third quarter in 2016, as lower generation at Idaho Power's thermal
plants and the timing of an annual maintenance outage at the Jim
Bridger coal-fired plant resulted in lower O&M costs.
Income from Idaho Power's unconsolidated investment in Bridger
Coal Company (BCC) decreased non-operating income by $7.0 million in the third quarter of 2017
compared with the same quarter in 2016, primarily due to a decrease
in coal sales prices and volumes at BCC.
Idaho Power income tax expense increased $5.6 million in the third quarter of 2017
compared with the third quarter of 2016, due mostly to higher
pre-tax income and tax benefits from distributions from
fully-amortized affordable housing investments that were recorded
during the third quarter of 2016. There were no significant
distributions from fully-amortized affordable housing investments
in the third quarter of 2017. Also, based on Idaho Power's current
expectations of full-year 2017 results, Idaho Power did not record
any additional ADITC amortization under its Idaho regulatory settlement stipulation during
the third quarter of 2017 and does not expect additional ADITC
amortization for the full-year 2017. During the third quarter of
2016, Idaho Power recorded $1.0
million of additional ADITC amortization.
Net Income - Year-to-Date 2017
IDACORP's net income increased $8.5
million, primarily from higher net income at Idaho Power,
for the first nine months of 2017 compared with the same period in
2016. Customer growth added $7.0
million to Idaho Power operating income compared with the
first nine months of 2016. Higher usage per customer in the first
nine months of 2017 compared with the same period in 2016
contributed $12.2 million to
operating income, due mostly to higher usage per customer in the
third quarter of 2017 described above. Warmer summer temperatures
and colder winter temperatures during the first nine months of 2017
compared with the same period in 2016 led to a greater proportion
of residential sales in higher rate categories under Idaho Power's
tiered rate structure. These residential sales contributed to the
$30.3 million increase in operating
income from the increase in revenues per MWh. The FCA mechanism
reduced operating income by $13.7
million during the first nine months of 2017 compared with
the first nine months of 2016. As noted above, the settlement
stipulations related to the Valmy Plant approved in the second
quarter of 2017 added $3.8 million to
after-tax net income for the first nine months of 2017. During the
first nine months of 2017, Idaho Power benefited from a
$9.1 million increase in third-party
use of electric property, wheeling, and other revenue. This change
was largely due to an increase in wheeling volumes, an increase in
Idaho Power's OATT rates that became effective in October 2016, and a new long-term wheeling
agreement that became effective in July
2016.
A decrease in income from Idaho Power's unconsolidated
investment in BCC decreased non-operating income by $6.5 million in the first nine months of 2017
compared with the first nine months in 2016, primarily due to a
decrease in coal sales prices and higher expenses at BCC. Idaho
Power anticipates that higher coal sales prices will increase
income from BCC in the fourth quarter of 2017 compared with the
fourth quarter of 2016. Despite the expected fourth quarter
increase in income from BCC this year, Idaho Power expects income
from BCC for the full year of 2017 to be slightly below the income
from BCC in 2016.
Idaho Power's income tax expense was $15.3 million higher primarily due to higher
pre-tax income, the $5.6 million
flow-through benefit of tax deductible make-whole premiums that
Idaho Power paid in connection with the early redemption of
long-term debt in the first nine months of 2016, and tax benefits
from distributions from fully-amortized affordable housing
investments that were also recorded in 2016. There were no early
redemptions of long-term debt or significant distributions from
fully-amortized affordable housing investments in the first nine
months of 2017. Also, based on Idaho Power's current expectations
of full-year 2017 results, Idaho Power did not record any
additional ADITC amortization under its Idaho regulatory settlement stipulation during
the first nine months of 2017. During the first nine months of
2016, Idaho Power recorded $1.5
million of additional ADITC amortization.
2017 Annual Earnings Guidance and Key Operating and Financial
Metrics
IDACORP is increasing its full year earnings guidance estimate
for 2017. The 2017 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)
|
|
$4.05-$4.15
|
|
$3.95-$4.05
|
Idaho Power Operating
& Maintenance Expense
|
|
No Change
|
|
$345-$355
|
Idaho Power
Additional Amortization of ADITC
|
|
No Change
|
|
None
|
Idaho Power Capital
Expenditures (excluding allowance for funds used during
construction)
|
|
No Change
|
|
$290-$300
|
Idaho Power
Hydroelectric Generation (MWh)
|
|
8.5-9.0
|
|
8.5-9.5
|
(1)
As of November 2, 2017.
|
(2)
As of August 3, 2017, the date of filing IDACORP's and Idaho
Power's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2017.
|
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
nearly 542,000 residential, business and agricultural customers pay
some of the nation's lowest prices for electricity. To learn more
about IDACORP or Idaho Power, visit www.idacorpinc.com or
www.idahopower.com.
Forward-Looking Statements
In addition to the historical information contained in this
press release, this press release contains (and oral communications
made by IDACORP, Inc. and Idaho Power Company may contain)
statements, including, without limitation, earnings guidance, 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,"
"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, the
Federal Energy Regulatory Commission, and other regulators that
impact Idaho Power's ability to recover costs and earn a return,
including the impact of settlement stipulations; (b) the expense
and risks associated with capital expenditures for infrastructure,
and the timing and availability of cost recovery for such
expenditures; (c) changes in residential, commercial, and
industrial growth and demographic patterns within Idaho Power's
service area and the loss or change in the business of significant
customers, and their associated impacts on loads and load growth,
and the availability of regulatory mechanisms that allow for timely
cost recovery in the event of those changes; (d) the impacts of
economic conditions, including inflation, the potential for changes
in customer demand for electricity, revenue from sales of excess
power, financial soundness of counterparties and suppliers, and the
collection of receivables; (e) unseasonable or severe weather
conditions, wildfires, drought, and other natural phenomena and
natural disasters, which affect customer demand, hydroelectric
generation levels, repair costs, and the availability and cost of
fuel for generation plants or purchased power to serve customers;
(f) advancement of generation or energy efficiency technologies
that reduce loads or reduce Idaho Power's sale of electric power;
(g) 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 resulting increased costs through rates; (h) 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 hydroelectric facilities; (i)
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; (j) accidents, fires (either at or caused by
Idaho Power's facilities), explosions, and mechanical breakdowns
that may occur while operating and maintaining Idaho Power's
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; (k) the
increased power purchased costs and operational challenges
associated with purchasing and integrating intermittent renewable
energy sources into Idaho Power's resource portfolio; (l)
disruptions or outages of Idaho Power's generation or transmission
systems or of any interconnected transmission system may cause
Idaho Power to incur repair costs and purchase replacement power at
increased costs; (m) 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 in the financial markets, interest rate
fluctuations, decisions by the Idaho or Oregon public utility
commissions, and the companies' past or projected financial
performance; (n) reductions in credit ratings, which could
adversely impact access to capital markets, increase costs of
borrowing, and would require the posting of additional collateral
to counterparties pursuant to credit and contractual arrangements;
(o) 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; (p) 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; (q) the ability to continue to
pay dividends based on financial performance and in light of
contractual covenants and restrictions and regulatory limitations;
(r) 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;
(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 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 hydroelectric facilities; (v) the cost and outcome of
litigation, dispute resolution, and regulatory proceedings, and the
ability to recover those costs or the costs of operational changes
through insurance or rates, or from third parties; (w) the failure
of information systems or the failure to secure data, failure to
comply with privacy laws, security breaches, or the direct or
indirect effect on the companies' business or operations resulting
from cyber-attacks, terrorist incidents or the threat of terrorist
incidents, 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.
View original content with
multimedia:http://www.prnewswire.com/news-releases/idacorp-inc-announces-third-quarter-results-increases-full-year-2017-earnings-guidance-300548186.html
SOURCE IDACORP, Inc.