IDACORP, Inc. 2021 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone fourth-quarter earnings report. IDACORP is a holding company whose principal operating subsidiary, Idaho Power, is a regulated electric utility serving southern Idaho and eastern Oregon. The combined filing reports both entities; figures below are identified by entity where relevant.
Financial performance and position
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| IDACORP operating revenues | $1.458 billion | $1.351 billion | +7.9% |
| IDACORP operating income | $329.7 million | $309.5 million | +6.5% |
| Net income attributable to IDACORP | $245.6 million | $237.4 million | +3.4% |
| Diluted earnings per share | $4.85 | $4.69 | +3.4% |
| Operating cash flow, IDACORP | $363.3 million | $388.1 million | −6.4% |
| Capital expenditures, IDACORP | $300.0 million | $310.9 million | −3.5% |
IDACORP’s operating and net margins were approximately 22.6% and 16.8%, respectively, compared with 22.9% and 17.6% in 2020. The filing does not present these margins as reported metrics; percentages are calculated from reported figures. Idaho Power net income was $243.2 million, up from $233.2 million.
- Cash and liquidity: IDACORP ended 2021 with $215.2 million of cash and cash equivalents and $595.9 million of current assets versus $325.6 million of current liabilities. Idaho Power cash was $60.1 million. Neither company had commercial paper or credit-facility borrowings outstanding at year-end.
- Debt and capitalization: Long-term debt was approximately $2.001 billion. Covenant leverage ratios were 43% for IDACORP and 45% for Idaho Power; the companies reported compliance with their covenants. Credit facilities totaled $100 million for IDACORP and $300 million for Idaho Power.
- Regulatory balances: Idaho Power reported $1.534 billion in regulatory assets and $792.9 million in regulatory liabilities. Recovery or refund depends on regulatory treatment.
- Shareholder returns: IDACORP raised its quarterly dividend to $0.75 per share in 2021; dividends were 59.4% of 2021 earnings. Its stated target payout range is 60%–70% of sustainable earnings.
Material changes versus 2020
- Retail electricity sales rose 4% to 15.406 million MWh, with customer count up 2.8% to approximately 604,000. Growth, warmer weather, and increased irrigation demand contributed to higher revenues.
- Electric utility revenues increased to $1.455 billion from $1.347 billion. Transmission wheeling revenue rose $16.4 million, helped by new agreements, higher volumes, and increased tariff rates.
- Purchased-power expense increased $96.3 million to $393.7 million, as non-PURPA purchases rose amid lower hydropower output and increased use of Western EIM purchases. Total purchased power volume increased to 6.823 million MWh from 5.072 million MWh.
- Hydropower generation fell 23% to 5.382 million MWh due to drought, weaker snowpack, and lower reservoir carryover. Wholesale sales volume declined 50%, although higher market prices lifted wholesale revenue to $40.8 million from $33.7 million.
- Operating cash flow declined despite higher earnings, partly reflecting taxes and timing of working-capital and regulatory balances. IDACORP cash and cash equivalents fell to $215.2 million from $275.1 million.
Outlook, management commentary and key risks
- Capital and resources: Idaho Power estimated up to $2.8 billion of capital expenditures for 2022–2026. Its resource plan identified peak-capacity deficits of 101 MW in 2023, another 85 MW in 2024, and another 125 MW in 2025; it expects more than $400 million of resource additions from 2022–2025 to address near-term needs.
- Generation transition: The 2021 integrated resource plan targets conversion of two Jim Bridger units from coal to natural gas in 2024, exit from North Valmy Unit 2 by the end of 2025, and exit from remaining Jim Bridger coal units by the end of 2028. The plan anticipates substantial solar, wind, storage, transmission, and demand-response additions. Regulatory approvals, project timing, costs, and resource availability remain uncertain.
- Hydropower and relicensing: Idaho Power forecast 2022 hydropower generation of 5.5–7.5 million MWh, below its 30-year average of about 7.7 million MWh. Hells Canyon Complex relicensing costs were approximately $389 million in construction work in progress; annual costs to obtain a new license were estimated at $30–$40 million, with issuance considered more likely in 2024 or later. Future license requirements could add material costs or affect generation.
- Rate recovery and liquidity: Power-cost adjustment mechanisms recover or refund most power-cost fluctuations but may not eliminate timing-related cash-flow pressure. Regulatory lag, cost disallowances, or changes to recovery mechanisms could affect earnings, liquidity, and investment plans. Idaho Power stated that general rate cases in Idaho and Oregon may be approaching.
- Other risks and unusual items: Drought, extreme weather and wildfire exposure, supply-chain constraints, fuel and market-price volatility, cyber and physical security, environmental rules, and COVID-related customer and workforce impacts are among the principal risks. Moody’s outlook was negative for both entities, while S&P’s outlook was stable. A $4.7 million postretirement-plan expense related to a temporary deviation from plan cost-sharing contributed to higher non-operating expense in 2021.
- Contingencies and audit: Management said existing legal claims were not expected to have a material adverse effect and reported no material loss-contingency accruals; outcomes of proceedings remain uncertain. The Hells Canyon relicensing and major transmission projects involve ongoing regulatory and environmental processes. Deloitte issued unqualified opinions on the financial statements and internal controls.
The filing does not provide a clear numerical 2022 earnings or EPS guidance figure.
Important facts for investors to verify
- Whether regulators approve timely recovery of the substantial regulatory assets, capital investments, and power-supply costs.
- How the 2022 hydrology, market prices, and purchased-power requirements affect cash flows and customer rates.
- Progress, cost estimates, approvals, and financing for capacity additions and the Boardman-to-Hemingway and Gateway West transmission projects.
- The timing, conditions, and ultimate costs of Hells Canyon relicensing and planned coal-unit conversions and exits.
- Credit-rating outlooks, covenant headroom, capital spending, and dividend sustainability as investment needs increase.
- Potential exposure from wildfire, environmental, cyber, pension, and other legal or regulatory contingencies.