10-Q: IDACORP Q3 Earnings Rise Amid Rate Hikes & Growth

IDACORP reports increased net income and EPS for Q3 and YTD 2025, driven by customer growth and rate adjustments, while actively managing significant infrastructure investments and regulatory matters.

Summary

• IDACORP's net income attributable to shareholders increased by $10.8 million to $124.4 million for Q3 2025, and by $28.6 million to $279.9 million for the first nine months of 2025, compared to the same periods in 2024.
• Diluted earnings per share rose to $2.26 for Q3 2025 (from $2.12 in Q3 2024) and to $5.13 for the first nine months of 2025 (from $4.82 in 9M 2024).
• Customer count grew by approximately 15,000, or 2.3%, over the twelve months ended September 30, 2025, contributing $7.8 million to operating income in Q3 and $19.6 million in 9M 2025.
• Idaho Power filed a settlement stipulation on October 24, 2025, for its 2025 Idaho general rate case, proposing a $110.0 million (7.48%) annual retail revenue increase effective January 1, 2026, with a 9.6% authorized return on equity.
• The company recorded $39.0 million in additional Accumulated Deferred Investment Tax Credits (ADITC) amortization during the first nine months of 2025, compared to $22.5 million in the same period of 2024.
• Cash capital expenditures for Idaho Power, excluding AFUDC, were $799 million for the nine months ended September 30, 2025.
• The Jackalope Wind Project agreements, totaling approximately 600 MW of wind generation capacity, were terminated in September 2025 due to permitting delays and federal land use policy uncertainties, reducing contractual purchase obligations by approximately $2.5 billion.

Sentiment

Score: 8

Explanation: The company demonstrates strong financial performance with increased net income and EPS, driven by robust customer growth and successful rate adjustments. Proactive capital investments in infrastructure and renewable energy, coupled with effective regulatory engagement, position it well for future growth. While there are challenges like increased operating expenses and project delays (Jackalope Wind), the overall strategic direction and financial health appear solid for a regulated utility.

Positives

• Net income attributable to IDACORP, Inc. increased by $10.8 million for the third quarter of 2025 and by $28.6 million for the first nine months of 2025.
• Diluted earnings per share increased to $2.26 for Q3 2025 and $5.13 for the first nine months of 2025.
• Customer growth of 2.3% (approximately 15,000 new customers) over the past twelve months positively impacted operating income by $7.8 million in Q3 and $19.6 million in 9M 2025.
• Idaho base rates increased effective January 1, 2025, contributing $17.6 million to retail revenues in Q3 and $37.2 million in 9M 2025.
• The board of directors approved an increase in the regular quarterly cash dividend from $0.86 to $0.88 per share, marking a 193% increase over the last fourteen years.
• A settlement stipulation for the 2025 Idaho general rate case proposes a $110.0 million annual retail revenue increase and a 9.6% authorized return on equity, providing regulatory clarity and revenue growth.
• IPUC approved a $29.7 million increase in annual cash collection of incremental AFUDC for the Hells Canyon Complex (HCC) relicensing, effective October 1, 2025.
• 80 MW of company-owned battery storage facilities came online, and another 250 MW commenced construction, enhancing capacity.
• Construction began on the Boardman-to-Hemingway (B2H) transmission line in June 2025, with an expected in-service date of late 2027, improving transmission infrastructure.
• Idaho Power secured agreements for a 100 MW solar facility with 100 MW battery storage, an 80 MW solar facility, and an ownership interest in the SWIP-N transmission line, addressing future energy needs.

Negatives

• Operating revenues decreased by $4.1 million in Q3 2025 and $20.7 million in 9M 2025 compared to the same periods in 2024.
• Usage per retail customer decreased by $5.7 million in Q3 2025, primarily due to higher precipitation and moderate temperatures reducing irrigation and cooling demand.
• Other Operations and Maintenance (O&M) expenses increased by $4.2 million in Q3 and $22.5 million in 9M 2025, driven by inflationary pressures, professional services, and wildfire mitigation costs.
• Depreciation and amortization expense increased by $8.1 million in Q3 and $20.3 million in 9M 2025 due to increased plant-in-service and new leased assets.
• Non-operating expense, net, increased by $9.8 million in Q3 and $19.0 million in 9M 2025, primarily due to higher interest expense from increased long-term debt and transmission customer deposits.
• Wholesale energy revenues decreased by $20.3 million in the first nine months of 2025 due to lower wholesale market prices.
• The termination of the Jackalope Wind Project agreements resulted in a reduction of approximately $2.5 billion in contractual purchase obligations, indicating a loss of planned renewable capacity.

Risks

• Decisions or actions by regulatory commissions (IPUC, OPUC, FERC) could impact Idaho Power's ability to recover costs and earn a return on investment.
• Changes to or elimination of Idaho Power's regulatory cost recovery mechanisms could adversely affect financial performance.
• Expenses and risks associated with capital expenditures and contractual obligations for utility infrastructure projects, including potential delays, cost increases, or regulatory disapproval for cost recovery.
• Supplier and contractor delays, failure to meet project quality standards, and impacts of tariffs or permitting requirements on utility infrastructure projects.
• Rapid addition of new industrial and commercial customer load and its volatility could lead to power demand exceeding available supply, increasing risks and costs.
• Potential financial impacts if industrial customers do not meet forecasted power usage ramp rates or volumes.
• Impacts of economic conditions (inflation, recession, interest rates) on operations, capital investments, supply costs, delivery delays, supply scarcity, customer demand, and collection of receivables.
• Changes in residential, commercial, and industrial growth and demographic patterns affecting loads and load growth.
• Employee workforce factors, including unionization costs, ability to attract/retain skilled workers, cost of living impacts on recruiting, and fluctuations in labor costs.
• Changes in, failure to comply with, and costs of compliance with laws, regulations, policies, orders, and licenses, potentially leading to penalties and increased operational costs.
• Abnormal or severe weather conditions, wildfires, droughts, earthquakes, and other natural phenomena affecting customer sales, hydropower generation, repair costs, service interruptions, and liability for damages.
• Advancement and adoption of self-generation, energy storage, energy efficiency, and alternative energy sources that may reduce Idaho Power's sales or introduce operational vulnerabilities.
• Variable hydrological conditions and over-appropriation of water in the Snake River Basin impacting hydropower generation and power supply costs.
• Inability to acquire equipment, materials, fuel, power, and transmission capacity on reasonable terms and prices due to high demand, price volatility, lack of availability, or supply chain disruptions.
• Inability to timely obtain and the cost of obtaining governmental permits, approvals, licenses, rights-of-way, and siting for projects.
• Disruptions or outages of generation or transmission systems leading to liability, increased power supply costs, repair expenses, and reduced revenues.
• Accidents, fires, explosions, infrastructure failures, and other unplanned events causing outages, reduced output, asset damage, third-party claims, or fines.
• Acts or threats of terrorism, war, social unrest, cyber/physical security attacks, and other malicious acts disrupting operations or compromising data.
• Idaho Power's concentration in one region exposes it to regional economic conditions and legislation/regulation.
• Unaligned goals with co-owners of generation and transmission assets impacting construction and operation.
• Changes in tax laws, regulations, or interpretations, and the availability of expected tax credits or benefits.
• Ability to obtain debt and equity financing or refinance existing debt on satisfactory terms, affected by credit ratings, market volatility, interest rates, and regulatory decisions.
• Failure of financial and physical commodity hedges to work as intended, leading to potential losses and cash flow impacts.
• Changes in actuarial assumptions, interest rates, healthcare costs, and plan asset returns affecting pension and postretirement funding obligations and cash flows.
• Remediation costs associated with planned cessation of coal-fired operations and conversion to natural gas.
• Ability to continue paying dividends and achieve target payout ratios based on financial performance, capital requirements, credit ratings, and regulatory limitations.
• Adoption of or changes in accounting policies, estimates, and new SEC/NYSE requirements or interpretations.
• Uncertainty regarding the outcome, timing, and compliance plans for environmental matters, including EPA proposed regulatory actions and NEPA matters.
• Potential impact of the proposed rescission of the 'harm' definition under the Endangered Species Act.
• Increased O&M expenses and other adverse impacts from Quagga mussel infestations in the Snake River system.
• Uncertainty regarding the ultimate impact of executive orders from the current Presidential Administration on tariffs, the electric grid, the coal industry, and environmental regulations.

Future Outlook

Management's outlook and strategy remain consistent with the 2024 Annual Report, focusing on timely cost recovery, reasonable return on investment, and addressing growing capacity and energy needs. Idaho Power forecasts positive customer growth and expects its number of customers and load to increase. The 2025 Integrated Resource Plan (IRP) identifies significant resource needs for the next 20 years, with forecasted annual retail sales growth of 8.3% over 5 years and 2.7% over 20 years. The company plans substantial capital expenditures on infrastructure investments in the next five years or more, including resource additions and transmission projects. Idaho Power anticipates the FERC will issue a new license for the American Falls facility in 2025 and for the Hells Canyon Complex (HCC) in 2027 or thereafter. The company is evaluating the impact of new accounting pronouncements and environmental regulations, and actively monitoring actions from executive orders.

Management Comments

• Management's outlook and strategy remain consistent with the 2024 Annual Report, focusing on timely recovery of costs and earning a reasonable return on investment.
• Idaho Power continues to experience and forecast positive customer growth in its service area.
• The company believes that existing and sustained growth in customers, load, and peak demand for electricity, the obligation to maintain a safe and reliable system, along with changes in the regional transmission markets, require increased investment in capacity resources, transmission, and distribution infrastructure.
• Idaho Power is pursuing alternative capacity and energy resources to meet the power generation deficit resulting from the termination of the Jackalope Wind Project agreements.
• Idaho Power will continue to actively monitor EPA proposals and any other pending or potential environmental regulations related to environmental matters that may have an impact on its future operations.
• Idaho Power is uncertain whether and to what extent the executive orders, any future executive orders, and their implementation could affect its business, results of operations, and financial condition.

Industry Context

The utility sector is undergoing a significant transformation driven by customer growth, the need for grid modernization, and the transition to cleaner energy sources. IDACORP's focus on substantial infrastructure investments, including high-voltage transmission lines (B2H, GWW, SWIP-N) and battery storage facilities, aligns with industry trends to enhance reliability and integrate renewable energy. The company's proactive engagement in rate cases and cost recovery mechanisms reflects the ongoing challenge for regulated utilities to balance capital-intensive projects with regulatory frameworks. The termination of the Jackalope Wind Project highlights the permitting and policy uncertainties inherent in large-scale renewable development, a common hurdle across the industry. The increased IRP load forecasts indicate a robust demand environment in Idaho Power's service area, potentially outpacing national averages, necessitating aggressive resource procurement. The emphasis on wildfire mitigation also reflects a growing industry-wide concern and regulatory focus in regions prone to such events.

Comparison to Industry Standards

• The filing does not provide specific comparisons to other companies, projects, or global benchmarks. However, Idaho Power's customer growth rate of 2.3% over the last twelve months is robust for a utility, often exceeding the average customer growth rates seen in more mature utility markets.
• The forecasted annual peak demand growth of 5.1% over five years in Idaho Power's 2025 IRP is significantly higher than typical utility load growth projections in many other U.S. regions, indicating a unique and rapidly expanding service territory.
• The authorized return on equity of 9.6% proposed in the 2025 Settlement Stipulation is generally in line with, or slightly above, the average authorized ROEs for regulated electric utilities in the U.S., which typically range from 9% to 10.5%.

Corporate Governance

Legal Proceedings

• IDACORP and Idaho Power are involved in various claims, controversies, disputes, and other contingent matters, including litigation and regulatory proceedings, in the ordinary course of business.
• Accruals for loss contingencies are established when matters are probable and reasonably estimable; as of the report date, these accruals are not material to the financial statements as a whole.
• Idaho Power is subject to claims for damages related to personal injury, property damage, and economic losses from its electric service provision and operation of facilities, including claims related to electrical contacts, service quality, property damage, and wildfires.
• Utilities in the western U.S. have faced significant liability for wildfires originating from utility property; Idaho Power has regularly received such claims.
• Idaho Power intends to seek recovery through the ratemaking process for costs incurred in matters affecting its operations, though recovery is not assured.
• Two parties filed complaints with the OPUC in June 2025 seeking reconsideration of the Certificate of Public Convenience and Necessity (CPCN) granted for the Boardman-to-Hemingway (B2H) transmission line; the case is pending.

Related Party Transactions

• Idaho Power's subsidiary, IERCo, owns a one-third interest in Bridger Coal Company (BCC), which mines and supplies coal to the Jim Bridger plant, owned in part by Idaho Power.
• Idaho Power guarantees its portion of reclamation activities and obligations at BCC, amounting to $51.9 million at September 30, 2025, representing IERCo's one-third share of BCC's total reclamation obligation of $155.6 million. BCC's reclamation trust fund exceeds this guarantee.

Stakeholder Impact

• **Shareholders**: Benefit from increased net income and diluted EPS, a higher quarterly dividend, and strategic investments aimed at long-term growth and stability. Potential for dilution from Forward Sale Agreements (FSAs) exists.
• **Customers**: Face proposed rate increases from the 2025 Idaho general rate case and increased AFUDC collection for HCC relicensing, but also benefit from rate decreases/refunds through PCA and FCA mechanisms and Oregon APCU. Investments in infrastructure aim to ensure reliable service and meet growing demand.
• **Employees**: Experience inflationary pressures on labor-related costs, but also higher variable compensation based on performance metrics. The company's growth and infrastructure projects suggest continued employment opportunities.
• **Suppliers and Contractors**: May face delays and cost increases on utility infrastructure projects due to various factors, but also benefit from significant capital expenditure plans for new projects and upgrades.
• **Regulatory Bodies**: Actively engaged in reviewing rate cases, resource procurement, and wildfire mitigation plans, influencing the company's operations and financial recovery.

Next Steps

• IPUC decision pending on the 2025 Settlement Stipulation for Idaho Power's general rate case, with proposed rates effective January 1, 2026.
• Idaho Power is pursuing alternative capacity and energy resources to meet the power generation deficit resulting from the termination of the Jackalope Wind Project agreements.
• IPUC decision pending on Idaho Power's petition to withdraw the CPCN and PPA approval for the Jackalope Wind Project.
• IPUC decision pending on Idaho Power's application for a CPCN for ownership interest and capacity rights in the SWIP-N transmission line.
• IPUC decision pending on Idaho Power's application for approval of a 20-year PPA and ESA with Crimson Orchard Solar LLC.
• IPUC decision pending on Idaho Power's application for approval of a 25-year PPA with Blacks Creek Energy Center, LLC.
• IPUC decision pending on Idaho Power's application for a CPCN for the expansion of the Bennett Mountain power plant.
• IPUC decision pending on Idaho Power's application for approval of a special contract for electric service for Micron Idaho Semiconductor Manufacturing (Triton) LLC.
• FERC is expected to issue the draft supplemental EIS for HCC relicensing in September 2025 and the final in May 2026, with a new license expected in 2027 or thereafter.
• FERC is anticipated to issue a new license for the American Falls hydropower facility in 2025.
• Idaho Power will continue to actively monitor EPA proposed regulatory actions and other pending or potential environmental regulations.
• IPUC decision pending on Idaho Power's Wildfire Mitigation Plan (WMP) filed on October 10, 2025, in accordance with the Idaho Wildfire Standard of Care Act.
• Idaho Power intends to use original issuances for share purchases within the Idaho Power Company Employee Savings Plan beginning in the fourth quarter of 2025.
• Idaho Power is currently evaluating the impact of ASU 2024-03 (Disaggregation of Income Statement Expenses) and ASU 2025-06 (Accounting for Internal-Use Software) on its financial statements.

Key Dates

Recommendation

IDACORP demonstrates solid financial performance with increased net income and EPS, driven by strong customer growth in its service area. The company is proactively addressing future energy needs through significant capital investments in transmission and battery storage, supported by favorable regulatory outcomes like the proposed Idaho rate increase and ADITC amortization. While there are challenges such as increased operating expenses and the termination of the Jackalope Wind Project, the overall strategic direction, robust demand forecasts, and commitment to cost recovery through regulatory mechanisms suggest a positive long-term outlook for this regulated utility. The dividend increase further enhances shareholder value.

Keywords

Utility, Electric Power, IDACORP, Idaho Power, SEC Filing, 10-Q, Earnings, Financial Results, Regulatory Affairs, Rate Case, Infrastructure Investment, Transmission Lines, Renewable Energy, Battery Storage, Wildfire Mitigation, Customer Growth, Dividend, Capital Expenditures, Energy Policy, Environmental Regulation, Hydropower Relicensing, ADITC, FCA, PCA, SWIP-N, B2H, GWW