IDACORP's Q3 2025 Earnings Call: Contradictions Emerge in Renewable Projects, Rate Case Timing, and Customer Growth Strategies

Date of Call: October 30, 2025

Financials Results

• EPS: $2.26 per diluted share in Q3, up from $2.12 in Q3 2024; YTD $5.13 vs $4.82 prior year; full-year guidance raised to $5.80–$5.90

Guidance:

• Full-year diluted EPS raised to $5.80 to $5.90.
• Idaho Power expects to use $50M to $60M of additional ITC amortization for 2025.
• Full-year O&M expected $470M to $480M.
• 2025 CapEx expected between $1.0B and $1.1B.
• Hydropower generation expected 6.5M to 7.0M MWh; guidance assumes normal weather and normal power supply expenses.

Business Commentary:

* Financial Performance and Earnings Guidance: - IDACORP's diluted earnings per share were $2.26 in Q3 2025, compared to $2.12 in Q3 2024. - The guidance for full-year IDACORP's diluted earnings per share was raised to a range of $5.80 to $5.90. - This increase in earnings was despite a reduced expectation for additional tax credit amortization, reflecting strong operational performance.

• Customer Growth and Economic Expansion:
• Idaho Power reported a 2.3% increase in its customer base since the previous year's third quarter, with a 2.5% increase among residential customers.
• Continued robust activity in sectors like manufacturing, food processing, distribution, and technology is driving customer growth.

• Significant projects such as Micron's fab expansions are contributing to this growth.

• Load Forecasting and Large Load Pipeline:

• IDACORP maintains a conservative load forecasting methodology, only including new large projects after securing contracts and identifying viable serving methods.
• The company is committed to working on creative solutions to serve new large loads while ensuring reliability and affordability.

• The focus on maintaining customer affordability continues, with Idaho Power's rates remaining among the lowest in the country.

• Generation Resource Needs and Transitions:

• The termination of the 600-megawatt Jackalope Wind project led to a review of potential replacement resources.
• IDACORP is considering options such as short-term market purchases, natural gas projects, and solar-battery storage resources.
• These alternatives aim to meet future load growth needs and ensure a reliable mix of generation resources.

Sentiment Analysis:

Overall Tone: Positive

• Management reported stronger operating performance, raised full-year EPS guidance to $5.80–$5.90, noted customer growth (2.3% YOY meters) and increasing project execution (QIP $1.6B, assets >$10B). They described the rate-case settlement as 'constructive' and highlighted reduced additional ADITC amortization due to operational strength.

Q&A:

• Question from William Appicelli (UBS): Can you remind us what was in the capital plan for Jackalope, what are potential replacement solutions and timelines? Was Bennett included in prior capital stacks? Any color on customer growth trends (12-month trailing tick down)?
  Response: Jackalope (600 MW; 300 MW owned/300 MW PPA) was terminated; Bennett (167 MW gas) is moving forward (pre-permit approved; construction expected spring 2026; in service 2028) and is an incremental add since February; company is evaluating RFP outcomes and alternatives (market purchases, gas, solar+storage) and customer meter growth remains steady (~2.3%) with material load ramp expected from manufacturing.

• Question from Christopher Ellinghaus (Siebert Williams Shank): Residential customer growth slowed sequentially — is this staffing/construction-related or macro softening? Also, why were sales relatively strong despite lower cooling degree days, and what's the stand on irrigation trends?
  Response: No structural concern — residential/meter growth is stable (~2.3–2.4%); sales strength is driven by customer growth and increased manufacturing/construction loads despite wobbly weather; irrigation demand was steady year-to-date with only a modest Q3 downtick driven by precipitation timing.

• Question from Brian Russo (Jefferies): Given only one gas bidder in RFPs, is there an alternative to RFPs to expedite gas generation (turbine lead times)? With Bennett not online until 2028, would solar+storage or PPAs be preferred short-term replacements for Jackalope?
  Response: They are evaluating all options (competitive procurement, short-term market purchases, PPAs, gas, solar+storage) but have no definitive accelerated alternative today; IRP currently favors gas economically and they will provide updates next quarter as procurement clarity emerges.

• Question from Alex Herman (Morgan Stanley): What are priorities for the next rate case and potential tracking mechanisms; how important are trackers? As large loads come online, can you earn ROE above the 9.12% floor?
  Response: Timing and structure of the next case (traditional vs. trackers) are under early consideration; the company expects large-load revenues and rate-case outcomes to gradually increase earned ROE above the 9.12% floor over time.

• Question from Anthony Crowdell (Mizuho): With Jackalope canceled, should we expect offsetting CapEx changes in the forecast or a dip for 2027? When will the settlement be approved? Given a large QIP balance and Moody's negative outlook, do you expect accelerated equity needs?
  Response: They will update the capital forecast when procurement concludes — Jackalope will be removed and Bennett added with additional generation to be included as projects are finalized; settlement approval is expected in December; near-term equity need may actually decline due to different payment timing and supportive regulatory cash actions.

Contradiction Point 1

Capacity Planning and Renewable Energy Projects

It involves changes in the company's capacity planning strategy, specifically regarding renewable energy projects, which can impact their environmental and financial sustainability goals.

Can you outline the capital plan for Jackalope and address potential solutions and timelines? - William Appicelli (UBS Investment Bank, Research Division)

2025Q3: We're considering gas and other options. Brian will discuss the capital plan for Jackalope. - Lisa Grow(CEO)

If the Jackalope Wind farm has issues with the tax bill, could it switch to gas? - Brian J. Russo (Jefferies)

2025Q2: Yes, one option is to look at gas builds in that time line if Jackalope doesn't move ahead. - Adam J. Richins(COO)

Contradiction Point 2

Large Load Customer Growth and Rate Case Timing

It involves changes in the company's strategy regarding large load customer growth and rate case timing, which can impact financial planning and regulatory strategy.

What are your priorities for the next rate case, particularly tracking mechanisms? - Unknown Analyst (Morgan Stanley)

2025Q3: We're expecting the procedural schedule in the coming weeks, maybe even as early as next week. - Timothy E. Tatum(Vice President of Regulatory Affairs)

When will you receive the procedural schedule for the rate case? - Christopher Ronald Ellinghaus (Siebert Williams Shank)

2025Q2: We're expecting the procedural schedule in the coming weeks, maybe even as early as next week. - Timothy E. Tatum(Vice President of Regulatory Affairs)

Contradiction Point 3

Jackalope Wind Project and Capital Plan

It involves changes in the company's capital plan and renewable energy strategies, which are crucial for long-term financial planning.

What is the capital plan for Jackalope and what are the potential solutions and timeline? - William Appicelli (UBS Investment Bank, Research Division)

2025Q3: The Jackalope Wind project was a 600 megawatt wind project, which won't be replaced megawatt for megawatt. We're considering gas and other options. Brian will discuss the capital plan for Jackalope. - Lisa Grow(CEO)

Should we consider this the normal cadence unless there's a breakthrough in trackers or other mitigating mechanisms? - Chris Ellinghaus (Sabre Williams Shank & Co.)

2025Q1: There's been a lot of activity around trying to secure the projects that will meet the IRP through the RFP process. And, as Lisa mentioned, we've been very successful in that effort. We've received projects above the 1,700 megawatts required by the IRP. - Adam Richins(COO)

Contradiction Point 4

Residential Customer Growth Trends

It pertains to the company's growth strategy and customer acquisition trends, which are essential for understanding future revenue expectations.

Why did residential customer growth slow recently? - Christopher Ellinghaus (Siebert Williams Shank & Co., L.L.C., Research Division)

2025Q3: Interest rates, economic softening, and seasonal effects may contribute to slower growth. The economy's uncertainty could be a factor. - Lisa Grow(CEO)

Regarding the rate case, are you considering filing for mechanisms or trackers, such as capital trackers or other mechanisms, to improve ROEs moving forward? - David Arcaro (Morgan Stanley)

2025Q1: We had significant growth in residential customers in the quarter. We ended the quarter with 38,000 customers, putting us at a 2.7% growth rate over the prior year. - Lisa Grow(CEO)

Contradiction Point 5

IDACORP's Renewable Energy Strategy

It highlights a shift in IDACORP's renewable energy strategy and the potential impact on future energy mix and investment decisions.

What are your plans for the IRP in a scenario with reduced renewables? - Christopher Ellinghaus (Siebert Williams Shank & Co., L.L.C., Research Division)

2025Q3: Policy changes impacted renewable economics. We'll see if shortlisted projects can meet their original terms. We're evaluating options beyond RFPs. - Lisa Grow(CEO)

What is the current status of your IRP? And when do you expect a renewable energy bottleneck due to gas overcapacity? - Brian Russo (Jefferies LLC, Research Division)

2024Q4: The IRP established that the most cost-effective resources over the long term continue to be gas-fired generation and wind resources. - Lisa Grow(CEO)