IDA

Business Context and Reporting Period

IDACORP, Inc. is a holding company whose principal operating subsidiary is Idaho Power Company, a regulated electric utility serving approximately 664,000 retail customers in southern Idaho and eastern Oregon. The filing covers the fiscal year ended December 31, 2025. Idaho Power operates a diverse generation portfolio including hydropower, natural gas, and coal-fired plants, with a strategic focus on converting coal assets to natural gas and expanding renewable resources and battery storage to meet growing load demands.

Key Financial Metrics (Year Ended Dec 31, 2025)

Material Changes vs. Prior Period

• Net Income Growth: Net income attributable to IDACORP increased by $34.3 million (11.9%) compared to 2024. This was driven primarily by higher net income at Idaho Power.
• Revenue Drivers: Retail revenues increased by $3.6 million. A $49.6 million increase in operating income was attributed to higher retail revenues per MWh (due to rate increases effective Jan 1, 2025), partially offset by a $6.5 million decrease due to lower usage per customer (milder weather) and a $9.6 million increase in O&M expenses.
• Power Supply Costs: Purchased power expense decreased by $32.6 million (8%) due to lower wholesale market prices. Fuel expense decreased by $6.0 million despite higher thermal generation, as lower natural gas market prices offset the volume increase.
• Depreciation: Depreciation and amortization expense increased by $27.7 million due to increased plant-in-service.
• Dividends: The quarterly dividend was increased to $0.88 per share in September 2025 (from $0.86 in 2024).

Guidance, Outlook, and Management Commentary

• Capital Requirements: Idaho Power estimates capital expenditures of $6.3 billion to $7.2 billion for the period 2026–2030. This is driven by the need to acquire power supply and transmission resources to meet growing demand.
• Load Growth: The 2025 Integrated Resource Plan (IRP) forecasts a 5-year annual retail sales growth rate of 8.3% and a 20-year rate of 2.7%, significantly higher than prior forecasts, driven by large commercial and industrial additions.
• Regulatory Matters: The Idaho Public Utilities Commission (IPUC) approved the 2025 Settlement Stipulation in December 2025, increasing annual Idaho-jurisdictional retail revenue by approximately $110.0 million (7.48%) effective January 1, 2026.
• Asset Sales: On February 13, 2026, Idaho Power entered a definitive agreement to sell its Oregon electric distribution business and certain transmission assets to OTEC for a base purchase price of $154 million.
• Generation Strategy: The company is converting coal-fired units at the North Valmy plant to natural gas (Unit 1 completed Dec 2025; Unit 2 expected mid-2026) and plans to convert remaining Jim Bridger units by 2030.
• Risks: Key risks include regulatory lag in cost recovery, volatility in hydropower generation due to weather, wildfire liability, and the ability to recover costs associated with significant infrastructure investments.

Investor Verification Checklist

• Rate Case Outcomes: Verify the implementation and financial impact of the 2025 Idaho general rate case settlement effective Jan 1, 2026.
• Capital Expenditure Execution: Monitor the progress and cost management of major transmission projects (B2H, GWW, SWIP-N) and resource additions to ensure they align with the $6.3B–$7.2B forecast.
• Hydropower Variability: Track water conditions in the Snake River Basin, as hydropower generation (approx. 52% of system generation in 2025) significantly impacts power supply costs and wholesale sales.
• Coal-to-Gas Conversion: Confirm the timely completion and cost recovery of the North Valmy Unit 2 conversion and the long-term plan for Jim Bridger.
• Regulatory Asset Recovery: Assess the probability of recovering the $1.6 billion in regulatory assets, particularly those related to HCC relicensing and wildfire mitigation.
• Debt Covenants: Monitor the leverage ratio (currently 52%) against the 65% covenant limit in credit facilities.