IDACORP, Inc. 2022 Form 10-K Summary
Business context and reporting period
Combined annual filing for IDACORP, Inc. and Idaho Power Company for the fiscal year ended December 31, 2022—not a standalone fourth-quarter report. IDACORP is a holding company whose results are driven primarily by regulated electric utility Idaho Power, serving about 618,000 customers in southern Idaho and eastern Oregon.
Key financial metrics
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Operating revenue | $1.644 billion | $1.458 billion | +12.7% |
| Operating income | $327.2 million | $329.7 million | -0.8% |
| Net income attributable to IDACORP | $259.0 million | $245.6 million | +5.5% |
| Diluted EPS | $5.11 | $4.85 | +5.4% |
| Operating cash flow | $351.3 million | $363.3 million | -3.3% |
| Cash capital expenditures | $419 million | $288 million | +45.5% |
| Cash and cash equivalents, year-end | $177.6 million | $215.2 million | -17.5% |
| Long-term debt | $2.194 billion | $2.001 billion | +9.7% |
Operating margin was approximately 19.9% versus 22.6% in 2021; net margin was approximately 15.8% versus 16.8%. Cash flow from operations less reported cash capital spending was approximately negative $68 million. At year-end, unused short-term borrowing capacity was $100 million at IDACORP and $280.1 million at Idaho Power. Covenant leverage ratios were 45% and 46%, respectively.
Material changes versus 2021
- Retail electricity sales rose 3% to a company record 15.822 million MWh; customer count grew 2.4%. Retail revenue increased $120.4 million.
- Higher customer usage, customer growth, Idaho rate changes and transmission wheeling revenue supported results. A $12.7 million reduction in FCA revenue partly offset higher usage-related revenue.
- Purchased-power expense rose $150.7 million and fuel expense rose $49.7 million, reflecting elevated market prices and load. Below-average hydropower generation and increased coal generation also affected supply costs. Regulatory power-cost mechanisms defer most, but not all, earnings effects; timing of recovery can pressure cash flow.
- Other operations and maintenance expense rose $38.1 million, including inflation and scheduled plant maintenance. Operating income declined despite higher revenue, while lower non-operating expense helped lift net income.
- Net income attributable to IDACORP increased for the fifteenth consecutive year. The quarterly dividend was raised to $0.79 per share; 2022 dividends were 59.5% of earnings.
Outlook, commentary, risks and unusual items
- Investment and load: Management estimates capital expenditures of up to $3.3 billion for 2023–2027, including $650–700 million in 2023. Idaho Power expects capacity deficits in 2023–2027 and more than $600 million of resource additions over that period. Preliminary 2023 IRP assumptions project 5-year annual growth of 5.5% in retail sales and 3.7% in peak demand, including potential large commercial and industrial loads.
- Rates and earnings: Idaho Power said an Idaho general rate case was likely in 2023 and an Oregon case likely in 2024. The 2022 Jim Bridger regulatory order is estimated to add about $10 million to net income in 2023; the annual benefit is expected to decline through 2030. No company-wide 2023 EPS guidance is stated in the filing text provided.
- Resources and transition: 2022 hydropower generation was 5.3 million MWh, below the 30-year average of about 7.7 million. The 2023 estimate is 5.5–7.5 million MWh. Idaho Power plans to exit coal-fired operations at North Valmy by 2025 and Jim Bridger by 2028, subject to resource, regulatory and operational uncertainties; its clean-energy goal is 100% by 2045.
- Projects and contingencies: Hells Canyon relicensing costs were estimated at $30–40 million annually, including AFUDC, until a new license; issuance was expected in 2024 or later, with ultimate compliance costs unclear. The Boardman-to-Hemingway project faces pending appeals and approvals. Idaho Power paid a $1.1 million fine under a 2022 consent judgment concerning water-discharge permitting and must submit additional permit applications.
- Financial and operating risks: Key exposures include regulatory cost recovery and rate timing, inflation and interest rates, hydrology and drought, wholesale power and fuel prices, supply-chain constraints, wildfire liability and insurance, cybersecurity, large-load volatility, and execution and permitting of major capital projects. Moody’s downgraded both companies’ long-term issuer ratings in July 2022; ratings remained investment grade with stable outlooks. A downgrade below investment grade could trigger collateral demands.
Most important facts for investors to verify
- Progress and outcomes of Idaho and Oregon rate cases, including recovery of rising capital, operating and financing costs.
- Actual load growth and whether new large-customer demand translates into profitable, timely service and required capacity investment.
- Capital spending, battery-storage deployment, transmission-project approvals and schedules, and potential cost overruns.
- Hydropower conditions, deferred power-cost balances ($129.3 million at year-end), and timing of recovery through customer rates.
- Jim Bridger order benefits and the timetable and costs of coal exits and Hells Canyon relicensing.
- Liquidity, debt maturities and refinancing needs, rating-agency actions, and any collateral requirements.
Deloitte & Touche issued unqualified opinions on the financial statements and internal controls. The audit identified regulated-utility accounting and judgments about future regulatory recovery as a critical audit matter.