IDA

IDACORP, Inc. and Idaho Power Company - Q1 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026, for IDACORP, Inc. (IDA) and its principal subsidiary, Idaho Power Company. IDACORP is a holding company whose primary operations are conducted through Idaho Power, a regulated electric utility serving southern Idaho and eastern Oregon. The filing includes unaudited condensed consolidated financial statements for both entities.

Key Financial Metrics

Note: Idaho Power reported Net Income of $66.7 million for Q1 2026 compared to $58.1 million in Q1 2025.

Material Changes vs. Prior Period

• Revenue Decline: Total operating revenues decreased by approximately $29 million (6.7%) year-over-year. This was primarily driven by a decrease in retail energy sales volumes due to more moderate temperatures reducing heating demand, partially offset by customer growth (2.3% increase in customer count) and higher base rates effective January 1, 2026.
• Profitability Increase: Despite lower revenues, Net Income increased by $8.4 million. Key drivers included:
  • Rate Increases: Higher Idaho base rates from the 2025 Settlement Stipulation added $18.0 million to operating income.
  • Fixed Cost Adjustment (FCA): A favorable change in the FCA mechanism contributed $19.1 million to operating income.
  • Lower Power Supply Costs: Decreased purchased power and fuel expenses, net of adjustments, improved margins.
• Operating Expenses: Other operations and maintenance (O&M) expenses increased by $13.1 million, largely due to wildfire mitigation costs and amortization of deferred costs related to the Jim Bridger plant conversion.
• Capital Expenditures: Cash capital expenditures were $361 million in Q1 2026, significantly higher than the prior year, reflecting continued investment in transmission and generation infrastructure.

Guidance, Outlook, and Risks

• Regulatory Filings: Idaho Power has filed several pending rate cases, including a request for a $51.6 million increase in Power Cost Adjustment (PCA) revenues for Idaho (effective June 2026) and a $5.1 million increase in Fixed Cost Adjustment (FCA) revenues. Oregon filings include requests for $1.9 million (PCAM) and $1.5 million (APCU) increases.
• Capital Projects: The company is advancing major infrastructure projects to meet load growth, including the Boardman-to-Hemingway (B2H) transmission line (expected in-service late 2027) and new natural gas generation facilities (167 MW, 222 MW, and 430 MW) with in-service dates ranging from 2028 to 2030.
• Asset Sale: On February 13, 2026, Idaho Power signed an agreement to sell its Oregon electric distribution business and certain transmission assets to OTEC for a base price of $154 million. These assets are classified as "held for sale" on the balance sheet.
• Key Risks:
  • Weather Dependency: Hydropower generation and customer demand are highly sensitive to precipitation and temperature variations.
  • Regulatory Lag: Delays in regulatory approval for cost recovery could impact cash flows.
  • Wildfire Liability: Exposure to liability for wildfires originating from utility infrastructure remains a significant risk, though mitigation costs are being deferred for future recovery.
  • Interest Rates: Rising interest rates increase the cost of capital for significant infrastructure investments.

Investor Verification Checklist

• Rate Case Outcomes: Monitor the status of the pending PCA and FCA filings with the Idaho Public Utilities Commission (IPUC) and Oregon Public Utility Commission (OPUC) to confirm revenue recovery.
• Hydrological Conditions: Verify actual hydroelectric generation volumes against the forecasted range of 5.5 to 7.0 million MWh for 2026, as this significantly impacts fuel costs and wholesale sales.
• Capital Project Timelines: Track progress on the B2H transmission line and new gas generation plants to ensure they meet in-service dates and cost estimates.
• Debt Covenants: Confirm continued compliance with leverage ratios (currently 54% for IDACORP and 53% for Idaho Power) which limit dividend payments.
• Forward Sale Agreements (FSAs): Review the settlement terms of outstanding FSAs, which could impact share count and dilution upon settlement.