8-K: IDACORP Boosts 2025 Earnings Outlook on Strong Second Quarter Performance and Customer Growth

IDACORP, Inc. reported a significant increase in second quarter 2025 net income and raised the lower end of its full-year earnings guidance, driven by robust customer growth, higher energy usage, and favorable rate adjustments.

Summary

• Net income attributable to IDACORP, Inc. for the second quarter of 2025 was $95.8 million, or $1.76 per diluted share, an increase from $89.5 million, or $1.71 per diluted share, in the second quarter of 2024.
• Year-to-date net income attributable to IDACORP, Inc. for the first six months of 2025 reached $155.4 million, or $2.87 per diluted share, up from $137.7 million, or $2.67 per diluted share, in the same period of 2024.
• The increase in net income was primarily driven by an $8.8 million rise in retail revenues per megawatt-hour due to an overall increase in Idaho base rates effective January 1, 2025.
• Customer growth contributed an additional $6.0 million to operating income, with approximately 16,000 new customers (2.5% growth) added during the twelve months ended June 30, 2025.
• Higher usage per retail customer, particularly irrigation usage due to lower precipitation, increased operating income by $5.5 million.
• Additional accumulated deferred investment tax credits (ADITC) amortization increased by $9.8 million in Q2 2025 compared to Q2 2024, totaling $17.2 million for the quarter.
• IDACORP is increasing the lower end of its full-year 2025 earnings guidance range to $5.70 to $5.85 per diluted share, up from the previous range of $5.65 to $5.85 per diluted share.
• The company broke ground in June 2025 on the Boardman-to-Hemingway 500kV transmission line project, with an expected in-service date in late-2027.
• Idaho Power filed an Idaho General Rate Case with the IPUC on May 30, 2025, requesting a $199.1 million (13.09%) increase in total Idaho-jurisdictional revenue, a 10.4% Idaho-jurisdiction ROE, and a 51% equity ratio, with rates requested to be effective January 1, 2026.

Sentiment

Score: 8

Explanation: The filing indicates strong financial performance with increased net income and diluted EPS, a raised earnings guidance, and significant progress on key strategic infrastructure projects like the Boardman-to-Hemingway transmission line. The robust customer growth and favorable regulatory outcomes contribute to a very positive outlook, despite some increases in operational and financing costs.

Positives

• Net income attributable to IDACORP increased by $6.3 million in Q2 2025 and $17.7 million year-to-date 2025 compared to the same periods in 2024.
• Diluted earnings per share increased to $1.76 in Q2 2025 from $1.71 in Q2 2024, and to $2.87 year-to-date 2025 from $2.67 year-to-date 2024.
• The lower end of the full-year 2025 earnings guidance range was increased to $5.70 per diluted share, reflecting strong performance.
• Customer growth added approximately 16,000 new customers, representing a 2.5% increase over the past twelve months, contributing $6.0 million to operating income.
• Higher retail revenues per MWh, driven by an overall increase in Idaho base rates effective January 1, 2025, boosted operating income by $8.8 million.
• Increased usage per retail customer, particularly irrigation usage due to lower precipitation, contributed $5.5 million to operating income.
• Additional ADITC amortization significantly increased, providing a $9.8 million benefit in Q2 2025 and $16.5 million year-to-date 2025.
• The Boardman-to-Hemingway 500kV transmission line project, a critical infrastructure development, broke ground in June 2025 after nearly two decades of permitting efforts.
• The 2025 Integrated Resource Plan (IRP) forecasts higher annual growth rates for retail sales (8.3%) and annual peak demand (5.1%) over the next five years compared to prior IRPs, indicating robust future demand.

Negatives

• Other operations and maintenance (O&M) expenses increased by $11.1 million in Q2 2025 and $18.2 million year-to-date 2025, primarily due to higher variable employee costs, inflationary pressures on labor and professional services, and increased wildfire mitigation program and related insurance expenses.
• Depreciation and amortization expense rose by $6.4 million in Q2 2025 and $12.2 million year-to-date 2025, mainly due to an increase in plant-in-service and the start of operations at a leased battery storage facility.
• Non-operating expense, net, increased by $7.0 million in Q2 2025 and $9.1 million year-to-date 2025, driven by higher long-term debt balances, increased transmission customer deposits, and interest on a new finance lease.
• Other changes in operating revenues and expenses, net, decreased operating income by $5.6 million in Q2 2025 and $3.7 million year-to-date 2025, primarily due to the timing of recording and adjusting regulatory accruals and deferrals in 2024 that did not reoccur in 2025.
• The upper end of the Idaho Power Hydropower Generation guidance for 2025 was slightly reduced from 8.5 million MWh to 8.0 million MWh.

Risks

• Decisions or actions 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 investment.
• Changes to or the elimination of Idaho Power's regulatory cost recovery mechanisms.
• Expenses and risks associated with capital expenditures and contractual obligations for, and the permitting and construction of, utility infrastructure projects that may be unable to be completed, are delayed, have cost increases due to tariffs or other factors, or that may not be deemed prudent by regulators for cost recovery or return on investment.
• Expenses and risks associated with supplier and contractor delays and failure to satisfy project quality and performance standards on utility infrastructure projects, including as a result of tariffs and permitting, and the potential impacts of those delays and failures on Idaho Power's ability to serve customers and generate revenues.
• The rapid addition of new industrial and commercial customer load and the volatility and timing of such new load demand, resulting in increased risks and costs of power demand potentially exceeding available supply.
• Impacts of economic conditions, including an inflationary or recessionary environment and interest rates, on items such as operations and capital investments, supply costs and delivery delays, supply scarcity and shortages, 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 their ability to meet financial and operational commitments and on the timing and extent of counterparties power usage, and collection of receivables.
• Abnormal or severe weather conditions, wildfires, droughts, earthquakes, and other natural phenomena and natural disasters, which affect customer sales, hydropower generation, repair costs, service interruptions, public safety power shutoffs and de-energization, liability for damage caused by utility property, and the availability and cost of fuel for generation plants or purchased power to serve customers.
• 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 hydropower facilities and power supply costs.
• Ability to acquire equipment, materials, fuel, power, and transmission capacity on reasonable terms and prices, particularly in the event of unanticipated or abnormally high resource demands, price volatility (including as a result of new or increased tariffs), lack of physical availability, transportation constraints, outages due to maintenance or repairs to generation or transmission facilities, disruptions in the supply chain, or reduced credit quality or lack of counterparty and supplier credit.
• Disruptions or outages of Idaho Power's generation or transmission systems or of any interconnected transmission systems, which can result in liability for Idaho Power, increased power supply costs and repair expenses, and reduced revenues.
• Acts or threats of terrorism, acts of war, social unrest, cyber or physical security attacks, and other malicious acts of individuals or groups seeking to disrupt Idaho Power's operations or the electric power grid or compromise data, or the disruption or damage to the companies business, operations, or reputation resulting from such events.
• Ability to obtain debt and equity financing or refinance existing debt when necessary and on satisfactory terms, which can be affected by factors such as credit ratings, reputational harm, volatility or disruptions in the financial markets, interest rates, decisions by the Idaho, Oregon, or Wyoming public utility commissions, and the companies' past or projected financial performance.

Future Outlook

IDACORP has increased the lower end of its full-year 2025 earnings guidance to a range of $5.70 to $5.85 per diluted share, reflecting strong second-quarter results and continued positive trends. This guidance assumes normal weather conditions and power supply expenses for the remainder of 2025. The company expects Idaho Power to utilize between $60 million and $77 million of additional tax credits available under its Idaho regulatory mechanism in 2025. The updated 2025 Integrated Resource Plan (IRP) forecasts robust load growth, necessitating 450 MW of new gas resources by 2029-2030 and 355 MW of peak capacity resources by 2028-2029, alongside continued transmission infrastructure development.

Management Comments

• "IDACORP's strong second quarter results were driven by higher than anticipated customer usage, continued customer growth, rate changes, and the expected use of tax credits under the company's Idaho regulatory mechanism," stated Lisa Grow, IDACORP President and Chief Executive Officer.
• Grow added, "Partially offsetting those benefits were higher depreciation and financing costs, as Idaho Power continues to build infrastructure for reliability and to respond to rapidly growing customer needs."
• "This has been a busy year on a number of fronts, and I particularly want to highlight that after nearly 19 years of permitting efforts, last month we broke ground on our Boardman-to-Hemingway 500kV transmission line project. We are excited for the benefits this project will bring to our customers," Lisa Grow commented.

Industry Context

The filing highlights IDACORP's strong performance within the utility sector, particularly in a region experiencing significant population and economic growth. The reported 2.5% customer growth and increased load forecasts in the 2025 IRP underscore the robust demand for electricity in Idaho Power's service area. This growth necessitates substantial infrastructure investment, as evidenced by the ongoing capital expenditures and the groundbreaking of the Boardman-to-Hemingway transmission line. The company's focus on utilizing tax credits and navigating regulatory rate cases is typical for regulated utilities seeking to recover costs and ensure a fair return on investment while managing inflationary pressures and increasing operational costs, including those related to wildfire mitigation. The strategic resource planning, including the need for new gas and peak capacity resources, reflects the broader industry trend of balancing growing demand with evolving energy mixes and reliability requirements.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results from other utilities for direct benchmarking.
• Idaho Power's customer growth rate of 2.5% over the past twelve months is robust, indicating a service area experiencing above-average demographic and economic expansion compared to many mature utility markets in the U.S.
• The company's capital expenditure guidance of $1.0 billion to $1.1 billion for 2025 reflects significant investment in infrastructure, consistent with utilities in high-growth regions or those undergoing substantial grid modernization and resource integration.
• The 2025 IRP's forecasted 5-year annual growth rates for retail sales (8.3%) and annual peak demand (5.1%) are notably higher than the average for U.S. electric utilities, many of which project low single-digit growth, underscoring the unique demand dynamics in Idaho Power's service territory.
• The 10.4% requested Idaho-jurisdiction ROE in the general rate case filing is within the typical range sought by regulated utilities, balancing investor returns with ratepayer affordability, though actual approved ROEs can vary based on regulatory jurisdiction and prevailing economic conditions.

Stakeholder Impact

• Shareholders: Positive impact due to increased net income, higher diluted EPS, and an upward revision of the earnings guidance, suggesting potential for continued dividend stability and growth.
• Customers: Positive impact from continued infrastructure investments (e.g., Boardman-to-Hemingway transmission line) aimed at enhancing reliability and meeting growing demand, though they will bear the cost of rate increases and higher O&M expenses.
• Employees: Potential positive impact from higher variable employee costs based on expected achievement of performance-based targets, indicating a link between company performance and employee compensation.
• Creditors: The company's strong financial performance and liquidity profile, including available credit facilities and capital raise activities, suggest a stable financial position, which is favorable for creditors.

Next Steps

• Idaho Power's Idaho General Rate Case rates are requested to become effective January 1, 2026.
• The Boardman-to-Hemingway 500kV transmission line project is expected to be in-service in late-2027.
• Idaho Power's 2025 Integrated Resource Plan (IRP) identifies the need for 450 MW of new gas resources in 2029 and 2030, and 355 MW of peak capacity resources in 2028 and 2029.
• The company will continue to pursue resource acquisition through RFPs, with final shortlists for 2028 and 2029+ RFPs already submitted or acknowledged by regulators.
• IDACORP will hold an analyst conference call on July 31, 2025, to discuss the financial results.

Key Dates

Recommendation

The filing presents a compelling case for a 'strong buy' recommendation. IDACORP has demonstrated robust financial performance, exceeding prior expectations with increased net income and diluted EPS for both the quarter and year-to-date. The decision to raise the lower end of the full-year earnings guidance signals strong confidence in continued operational strength and favorable market conditions. Strategic investments, such as the groundbreaking of the Boardman-to-Hemingway transmission line, are critical for long-term growth and reliability in a rapidly expanding service territory, as evidenced by significant customer growth and elevated load forecasts in the latest IRP. While there are expected increases in O&M and depreciation, these are largely tied to growth and necessary infrastructure development. The proactive approach to capital raising through FSAs further strengthens the balance sheet, supporting future investments. This combination of strong current performance, positive future outlook, and strategic execution in a high-growth utility market makes IDACORP an attractive investment.

Keywords

IDACORP, Idaho Power, Utility, Electric Utility, Earnings Guidance, Financial Results, Customer Growth, Transmission Line, Boardman-to-Hemingway, Rate Case, Integrated Resource Plan, ADITC, Capital Expenditures, Hydropower, Renewable Energy, Battery Storage, Regulatory, NYSE: IDA