BOISE, Idaho, May 2, 2019 /PRNewswire/ -- IDACORP, Inc.
(NYSE: IDA) recorded first quarter 2019 net income attributable to
IDACORP of $42.7 million, or
$0.84 per diluted share, compared
with $36.1 million, or $0.72 per diluted share, in the first quarter of
2018.
"We continue to see strong customer growth in our service area,
increasing 2.4 percent over the past twelve months," said IDACORP
President and Chief Executive Officer Darrel Anderson.
"Idaho's business-friendly
environment and Idaho Power's low energy rates are attracting
customers to locate or expand in our service area. This growth,
combined with higher energy sales from a comparatively cold winter
and increased transmission wheeling-related revenue, led to a
strong start to 2019. We no longer expect to use additional
accumulated deferred investment tax credits under our Idaho regulatory stipulation," concluded
Anderson.
Assuming normal weather conditions for the remainder of the
year, IDACORP affirms its previously reported full year 2019
earnings guidance in the range of $4.30 to $4.45 per
diluted share.
Performance Summary
A summary of financial highlights for the quarter ended
March 31, 2019 is as follows (in thousands, except per share
amounts):
|
|
Three months
ended
March 31,
|
|
|
2019
|
|
2018
|
Net income
attributable to IDACORP, Inc.
|
|
$
|
42,686
|
|
$
|
36,142
|
Average outstanding
shares – diluted (000's)
|
|
50,518
|
|
50,463
|
IDACORP, Inc.
earnings per diluted share
|
|
$
|
0.84
|
|
$
|
0.72
|
The table below provides a reconciliation of net income
attributable to IDACORP for the three months ended March 31,
2019, from the same period in 2018 (items are in millions and are
before related income tax impact unless otherwise noted).
|
|
Three months
ended
|
Net income
attributable to IDACORP, Inc. - March 31, 2018
|
|
|
|
$
|
36.1
|
Increase
(decrease) in Idaho Power net income:
|
|
|
|
Customer growth, net
of associated power supply costs and power cost adjustment
mechanisms
|
|
4.1
|
|
|
|
Usage per retail
customer, net of associated power supply costs and power cost
adjustment mechanisms
|
|
1.9
|
|
|
|
Idaho fixed cost
adjustment (FCA) revenues
|
|
(2.3)
|
|
|
Retail revenues per
megawatt-hour (MWh), net of associated power supply costs and power
cost adjustment mechanisms
|
|
3.7
|
|
|
|
Transmission
wheeling-related revenues
|
|
4.0
|
|
|
|
Other operations and
maintenance (O&M) expenses
|
|
(2.7)
|
|
|
|
Other changes in
operating revenues and expenses, net
|
|
(1.1)
|
|
|
|
Increase in Idaho
Power operating income
|
|
7.6
|
|
|
|
Earnings of
equity-method investments
|
|
(1.9)
|
|
|
|
Non-operating income
and expenses
|
|
1.5
|
|
|
|
Additional
accumulated deferred investment tax credits (ADITC)
amortization
|
|
(0.5)
|
|
|
|
Income tax expense
(excluding additional ADITC amortization)
|
|
(1.0)
|
|
|
Total increase in
Idaho Power net income
|
|
|
|
5.7
|
Other
IDACORP changes (net of tax)
|
|
|
|
0.9
|
Net income
attributable to IDACORP, Inc. - March 31, 2019
|
|
|
|
$
|
42.7
|
IDACORP's net income increased $6.5
million for the first quarter of 2019 compared with the
first quarter of 2018, primarily due to higher net income at Idaho
Power.
Customer growth increased operating income by $4.1 million in the first quarter of 2019
compared with the first quarter of 2018, as the number of Idaho
Power customers grew by 2.4 percent during the twelve months ended
March 31, 2019. Sales volumes on a
per-customer basis increased operating income by $1.9 million in the first quarter of 2019
compared with the first quarter of 2018. Colder temperatures in the
first quarter of 2019 compared with the first quarter of 2018
caused residential customers to use 3 percent more electricity per
customer for heating. The increase in residential sales volumes was
offset by the FCA mechanism (applicable to residential and small
commercial customers), which decreased revenues by $2.3 million during the first quarter of 2019
compared with the first quarter of 2018. The colder weather also
caused an increase in the proportion of residential sales in higher
rate categories under Idaho Power's tiered rate structure. These
higher tiered rates were the primary reason for the $3.7 million net increase in retail revenues per
MWh in the first quarter of 2019 compared with the first quarter of
2018. To a lesser extent, changes in the customer sales mix
increased the retail revenues per MWh as volumes sold to
residential customers made up a greater portion of the customer
sales mix in the first quarter of 2019 compared with the first
quarter of 2018. Residential customers generally pay a higher
per-MWh rate than other customers.
During the first quarter of 2019, Idaho Power benefited from a
$4.0 million increase in transmission
wheeling-related revenue, compared with the first quarter of 2018.
This change was largely due to an increase in wheeling-related
volumes, partially offset by a decrease in Idaho Power's open
access transmission tariff (OATT) rates that became effective in
October 2018. Wheeling-related
volumes increased due to regional wholesale energy market activity
in the first quarter of 2019.
Other O&M expenses were $2.7
million higher in the first quarter of 2019 compared with
the first quarter of 2018. O&M expenses related to Idaho
Power's thermal generation increased $1.5
million due primarily to increased generation at the
jointly-owned North Valmy coal-fired power plant (Valmy Plant), for
which a corresponding amount was recorded as revenues pursuant to
the June 2017 Idaho Public Utilities
Commission-approved settlement stipulation relating to the Valmy
Plant. The remaining $1.2 million net
increase in other O&M expenses was primarily due to various
inflationary cost increases.
Based on its estimate of full-year 2019 return on year-end
equity in the Idaho jurisdiction,
in the first quarter of 2019, Idaho Power recorded no additional
ADITC amortization under the Idaho
regulatory settlement stipulation approved in October 2014. During the first quarter of 2018,
Idaho Power recorded $0.5 million of
additional ADITC amortization, which was reversed in the second
quarter of 2018. Excluding additional ADITC amortization, Idaho
Power income tax expense increased $1.0
million in the first quarter of 2019 compared with the first
quarter of 2018, due primarily to higher pre-tax income.
2019 Annual Earnings Guidance and Key Operating and Financial
Metrics
IDACORP is affirming its earnings guidance estimate for 2019.
The 2019 guidance incorporates all of the key operating and
financial assumptions listed in the table that follows (in
millions, except per share amounts):
|
|
Current(1)
|
|
Previous(2)
|
IDACORP Earnings
Guidance (per share)
|
|
No Change
|
|
$ 4.30 – $
4.45
|
Idaho Power Operating
& Maintenance Expense
|
|
No Change
|
|
$ 350 – $
360
|
Idaho Power
Additional Amortization of Accumulated Deferred Investment Tax
Credits
|
|
None
|
|
Less than
$5
|
Idaho Power Capital
Expenditures, Excluding Allowance for Funds Used During
Construction
|
|
No Change
|
|
$ 280 – $
290
|
Idaho Power
Hydroelectric Generation (MWh)
|
|
7.0 – 9.0
|
|
6.5 – 8.5
|
(1)
As of May 2, 2019.
|
(2)
As of February 21, 2019, the date of filing IDACORP's and Idaho
Power's Annual Report on Form 10-K for the year ended December 31,
2018.
|
More detailed financial information is provided in IDACORP's
Quarterly Report on Form 10-Q filed today with the U.S. Securities
and Exchange Commission and posted to the IDACORP Web site at
www.idacorpinc.com.
Web Cast / Conference Call
IDACORP will hold an analyst conference call today at
2:30 p.m. Mountain Time (4:30 p.m. Eastern Time). All parties interested
in listening may do so through a live webcast on the company's
website (www.idacorpinc.com), or by calling (800) 242-0681 for
listen-only mode. There is no passcode required; simply request to
be connected to the "IDACORP, Inc." call. The conference call
logistics are also posted on the company's website and will be
included in the company's earnings news release. Slides will be
included during the conference call. To access the slide deck,
register for the event just prior to the call at
www.idacorpinc.com/investor-relations/earnings-center/conference-calls.
A replay of the conference call will be available on the company's
website for a period of 12 months and will be available shortly
after the call.
Background Information
IDACORP, Inc. (NYSE: IDA), Boise,
Idaho-based and formed in 1998, is a holding company
comprised of Idaho Power, a regulated electric utility; IDACORP
Financial, a holder of affordable housing projects and other real
estate investments; and Ida-West Energy, an operator of small
hydroelectric generation projects that satisfy the requirements of
the Public Utility Regulatory Policies Act of 1978. Idaho Power
began operations in 1916 and employs approximately 2,000 people to
serve a 24,000-square-mile service area in southern Idaho and eastern Oregon. With 17 low-cost hydroelectric
projects as the core of its generation portfolio, Idaho Power's
more than 560,000 residential, business and agricultural customers
pay some of the nation's lowest prices for electricity. To learn
more about Idaho Power or IDACORP, visit www.idahopower.com or
www.idacorpinc.com.
Forward-Looking Statements
In addition to the historical information contained in this
press release, this press release contains (and oral communications
made by IDACORP, Inc. and Idaho Power Company may contain)
statements, including, without limitation, earnings guidance and
estimated key operating and financial metrics, that relate to
future events and expectations and, as such, constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any statements that
express, or involve discussions as to, expectations, beliefs,
plans, objectives, outlook, assumptions, or future events or
performance, often, but not always, through the use of words or
phrases such as "anticipates," "believes," "continues," "could,"
"estimates," "expects," "guidance," "intends," "potential,"
"plans," "predicts," "projects," "targets," or similar expressions,
are not statements of historical facts and may be
forward-looking. Forward-looking statements are not
guarantees of future performance and involve estimates,
assumptions, risks, and uncertainties. Actual results,
performance, or outcomes may differ materially from the results
discussed in the statements. In addition to any assumptions
and other factors and matters referred to specifically in
connection with such forward-looking statements, factors that could
cause actual results or outcomes to differ materially from those
contained in forward-looking statements include the following: (a)
the effect of decisions by the Idaho and Oregon public utilities commissions and the
Federal Energy Regulatory Commission that impact Idaho Power's
ability to recover costs and earn a return on investments; (b) the
expense and risks associated with capital expenditures for utility
infrastructure, and the timing and availability of cost recovery
for such expenditures through customer rates, including the
potential for the write-down or write-off of expenditures if not
deemed prudent by regulators; (c) changes in residential,
commercial, and industrial growth and demographic patterns within
Idaho Power's service area, the loss or change in the business of
significant customers, or the addition of new customers, and their
associated impacts on loads and load growth, and the availability
of regulatory mechanisms that allow for timely cost recovery
through customer rates in the event of those changes; (d) the
impacts of economic conditions, including inflation, interest
rates, regulatory authorized returns on equity, supply costs,
population growth or decline in Idaho Power's service area, changes
in customer demand for electricity, revenue from sales of excess
power, credit quality of counterparties and suppliers, and the
collection of receivables; (e) unseasonable or severe weather
conditions, wildfires, drought, and other natural phenomena and
natural disasters, including conditions and events associated with
climate change, which affect customer demand, hydroelectric
generation levels, repair costs, liability for damage caused by
utility property, and the availability and cost of fuel for
generation plants or purchased power to serve customers; (f)
advancement of self-generation, energy storage, and energy
efficiency technologies that may affect Idaho Power's sale or
delivery of electric power or introduce new cyber security risks;
(g) changes in tax laws or related regulations or new
interpretations of applicable laws by federal, state, or local
taxing jurisdictions, the availability of tax credits, and the tax
rates payable by IDACORP shareholders on common stock dividends;
(h) adoption of, changes in, and costs of compliance with laws,
regulations, and policies relating to the environment, natural
resources, and threatened and endangered species, and the ability
to recover associated increased costs through rates; (i) variable
hydrological conditions and over-appropriation of surface and
groundwater in the Snake River Basin, which may impact the amount
of power generated by Idaho Power's hydroelectric facilities; (j)
the ability to acquire fuel, power, and transmission capacity under
reasonable terms, particularly in the event of unanticipated power
demands, lack of physical availability, transportation constraints,
or a credit downgrade; (k) accidents, fires (either affecting or
caused by Idaho Power facilities or infrastructure), explosions,
and mechanical breakdowns that may occur while operating and
maintaining Idaho Power assets, which can cause unplanned outages,
reduce generating output, damage the companies' assets, operations,
or reputation, subject the companies to third-party claims for
property damage, personal injury, or loss of life, or result in the
imposition of civil, criminal, and regulatory fines and penalties,
for which the companies may have inadequate insurance coverage; (l)
the increased purchased power costs and operational challenges
associated with purchasing and integrating intermittent renewable
energy sources into Idaho Power's resource portfolio; (m)
disruptions or outages of Idaho Power's generation or transmission
systems or of any interconnected transmission systems may constrain
resources or cause Idaho Power to incur repair costs and purchase
replacement power at increased costs; (n) the ability to obtain
debt and equity financing or refinance existing debt when necessary
and on favorable terms, which can be affected by factors such as
credit ratings, volatility or disruptions in the financial markets,
interest rate fluctuations, decisions by the Idaho or Oregon public
utility commissions, and the companies' past or projected financial
performance; (o) reductions in credit ratings, which could
adversely impact access to debt and equity markets, increase
borrowing costs, and require the posting of additional collateral
to counterparties pursuant to credit and contractual arrangements;
(p) the ability to enter into financial and physical commodity
hedges with creditworthy counterparties to manage price and
commodity risk, and the failure of any such risk management and
hedging strategies to work as intended; (q) changes in actuarial
assumptions, changes in interest rates, and the return on plan
assets for pension and other post-retirement plans, which can
affect future pension and other postretirement plan funding
obligations, costs, and liabilities and the company's cash flows;
(r) the ability to continue to pay dividends based on financial
performance and in light of contractual covenants and restrictions
and regulatory limitations; (s) employee workforce factors,
including the operational and financial costs of unionization or
the attempt to unionize all or part of the companies' workforce,
the impact of an aging workforce and retirements, the cost and
ability to attract and retain skilled workers, and the ability to
adjust the labor cost structure when necessary; (t) failure to
comply with state and federal laws, regulations, and orders,
including new interpretations and enforcement initiatives by
regulatory and oversight bodies, which may result in penalties and
fines and increase the cost of compliance, the nature and extent of
investigations and audits, and the cost of remediation; (u) the
inability to obtain or cost of obtaining and complying with
required governmental permits and approvals, licenses,
rights-of-way, and siting for transmission and generation projects
and hydroelectric facilities; (v) the cost and outcome of
litigation, dispute resolution, and regulatory proceedings, and the
ability to recover those costs or the costs of resulting
operational changes through insurance or rates, or from third
parties; (w) the companies' failure to secure data or to comply
with privacy laws or regulations, security breaches, or the
disruption or damage to the companies' business, operations, or
reputation resulting from cyber-attacks and related litigation or
penalties, terrorist incidents or the threat of terrorist
incidents, or other malicious acts, and acts of war; (x) unusual or
unanticipated changes in normal business operations, including
unusual maintenance or repairs, or the failure to successfully
implement new technology solutions; and (y) adoption of or changes
in accounting policies and principles, changes in accounting
estimates, and new U.S. Securities and Exchange Commission or New
York Stock Exchange requirements, or new interpretations of
existing requirements. Any forward-looking statement speaks only as
of the date on which such statement is made. New factors
emerge from time to time and it is not possible for management to
predict all such factors, nor can it assess the impact of any such
factor on the business or the extent to which any factor, or
combination of factors, may cause results to differ materially from
those contained in any forward-looking statement. Readers
should also review the risks and uncertainties listed in IDACORP,
Inc.'s and Idaho Power Company's most recent Annual Report on Form
10-K and other reports the companies file with the U.S. Securities
and Exchange Commission, including (but not limited to) Part I,
Item 1A - "Risk Factors" in the Form 10-K and Management's
Discussion and Analysis of Financial Condition and Results of
Operations and the risks described therein from time to time.
IDACORP and Idaho Power disclaim any obligation to update publicly
any forward-looking information, whether in response to new
information, future events, or otherwise, except as required by
applicable law.
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SOURCE IDACORP, Inc.