IDACORP, Inc.

Good afternoon and welcome to the IDACORB third quarter 2020 earnings release conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your questions, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Justin Forsberg, Director of Investor Relations and Treasuries. Please go ahead.

Thank you, and good afternoon, everyone. This morning, we issued and posted IDACorp's website, our third quarter 2020 earnings release and Form 10-Q. The slides that accompany today's call are also available on our website. We'll refer to those slides by number throughout the call today. As noted on slide two, our discussion includes forward-looking statements, including earnings guidance, which reflect our current views on what the future holds, but are subject to several risks and uncertainties, including those related to the COVID-19 pandemic. This cautionary note is also included in more detail for your review in our filings with the Securities and Exchange Commission. These risks and uncertainties may cause actual results to differ materially from statements made today, and we caution against placing undue reliance on any forward-looking statements. As shown on slide three, on today's call we have Lisa Groh, IDACorp's President and Chief Executive Officer, and Steve Keen, IDACorp's Senior Vice President and Chief Financial Officer. We also have other company representatives available to help answer any questions you may have after Lisa and Steve provide updates. Slide 4 shows our quarterly financial results. IdaCorp's 2020 third quarter earnings per diluted share were $2.02, an increase of 24 cents per share from last year's third quarter. IdaCorp's earnings per diluted share for the first nine months of 2020 were $3.95, an increase of 27 cents per diluted share from the same period last year. Today, we also tightened our full year 2020 IDA Corp earnings guidance estimate upward by 10 cents to be in the range of $4.55 to $4.65 per diluted share with our expectation that Idaho Power will not need to utilize any of the tax credits in 2020 that are available to support earnings in Idaho under its regulatory settlement stipulation nor do we anticipate any revenue sharing, as Idaho Power is expected to earn a return on year-end equity between 9.4 and 10% in its Idaho jurisdiction. These are our estimates as of today, as we have seen a relatively modest net financial impact from the COVID-19 pandemic to date. However, as you would expect, it is difficult to predict the full impact of evolving economic conditions on Idaho Power's customers and suppliers, and how that could affect the upper end of the earnings guidance range or the use of tax credits if the pandemic worsens significantly this quarter. I will now turn the call over to Lisa.

Thank you, Justin. And thanks, everyone, for joining us on today's call. Given the ongoing impacts of this pandemic, it seems appropriate to start by once again acknowledging the outstanding job our employees have done managing and responding to this crisis. Their focus on safety, taking care of our customers and managing expenses has been incredible. Idaho Power continues to provide reliable energy to our customers, and I am so grateful to have such a talented, adaptable and dedicated workforce. This situation is ever-changing, and so our response to it remains nimble. Most of our office employees have now been working remotely for more than seven months. while our line and field crews continue to take extra precautions to ensure the safety of our employees and the public. I commend our workers for their continued vigilance, which has allowed our operations to carry on. In turn, we've been able to continue our essential work of providing the energy that is critical to the daily lives of the customers, businesses, and communities we serve. Cost control has long been an important ingredient of our success. and it is magnified in these uncertain times. Our company's operating and maintenance expenses are lower over the first nine months of 2020 compared with the first nine months of 2019. There are several contributing factors, which Steve will walk us through in a minute, but prudent financial management continues to be a focus for our employees and company. Despite COVID-19, IDACOR remains on track to deliver on its 2020 strategy and financial targets. Customer growth, as noted on slide 5, higher irrigation sales, increased transmission wheeling-related revenues, and lower O&M costs have more than offset any decreased commercial customer usage resulting from the pandemic. In fact, on August 18th of this year, Idaho Power experienced a near-record peak of 3,408 megawatts despite irrigation having begun to taper off by that date due to the normal harvesting cycle. We remain cautiously optimistic by both our near-term business goals and the long-term resiliency of the economy in our Idaho and eastern Oregon service areas. While uncertainty lingers from the virus and its impacts, our service area remains one of the fastest growing in the nation. Local housing markets, Incoming businesses and the continued availability of reliable, affordable, clean energy point toward future sustained growth. Idaho Power Service Area continues to lead the nation for not only in migration of new residents, but also in new business opportunities. Notable examples of business development activity in the past quarter include the groundbreaking on Frigitech's new 280,000 square foot cold storage facility, the announcement of True West Beef's $200 million processing plant, and the relocation of two new customers formerly based in California, AFC Finishing Systems and Fiber Care Bath. The new Amazon Fulfillment Center we talked about last quarter officially came online in September, and Amazon has indicated they will be ready for the holiday shopping season. It's also worth noting that September was a record month for new large load inquiries at Idaho Power. with several projects over one megawatt in active discussions with us to potentially expand or relocate in our service area. This includes manufacturers, distribution centers, dairy, and other food processors. Other projects continue to be in the build phase from additional food processing, healthcare facility expansion, and manufacturing additions. As of the end of September, unemployment in our service area was 6.6%. compared with 2.8% in September of 2019 and the current 7.9% nationally. The number of people employed in our service area was relatively flat compared with the same period last year. Moody's forecasted GDP now calls for decline in output of negative 3.8% with a projected rebound of 5% in 2021. These numbers compare favorably with the projections for the entire U.S. economy. The economic data in our service area have, of course, been impacted by COVID-19, and we continue to monitor them. GDP forecasts have incorporated the most current expected impact. In September, the Board of Directors approved an increase in regular quarterly cash dividend on IDACOR's common stock, of 6% or 71 cents per share, as shown on slide six. At the new rate, the indicated dividend is $2.84 per share on an annual basis. Our board has now approved an annual dividend increase every year since 2012, representing an overall increase of 137% in IDACOR's quarterly dividend over that period. Our customer and earnings growth have allowed us to increase the dividend to shareholders all while Idaho Power customers continue to benefit from some of the lowest energy prices in the nation. We currently expect to recommend future annual increases in the dividend of 5% or more with the intent of keeping the company within our current target payout ratio of between 60% and 70% of sustainable IdaCorp earnings. Last quarter, I mentioned Idaho Power and its partners in the Boardman to Hemingway $350 mile high voltage transmission line project were exploring several service arrangements aimed at maximizing the value for each partner's customers. One potential change could include Idaho Power acquiring Bonneville Power Administration's ownership share and in turn providing transmission service to BPA and its southeast Idaho customers. Under this scenario, Idaho Power could own up to 45% of the transmission line and we would expect the structure We would expect to structure an arrangement where our investors earn a normal return on the capital investment. At the same time, our retail customers would not bear the cost of that portion of the project, as funds would come from the transmission service provided to BPA. Our discussions are ongoing on this front. I have two updates related to Idaho Power's Path Away from Coal, a key component of our goal to provide 100% clean energy by 2045, and seen on slide 7. First, the Boardman plant located in Oregon ceased operations earlier this month, bringing an end to coal-fired generation in the state of Oregon. Idaho Power owned 10% of Boardman, with the remaining 90% owned by Portland General Electric. Transmission projects like Boardman to Hemingway will be key to replacing the lost generation capacity from Idaho Power ultimately ceasing its coal operations and facilitating our clean energy goal. Secondly, Idaho Power's recently filed Second Amended Integration Resource Plan, or IRP, shows the company potentially ending participation in Unit 2 of the North Balmy coal plant as early as 2022 as opposed to 2025. The 2019 IRP is pending with the public utility commissions in Idaho and Oregon. However, further analysis will be needed to decide where in that range of dates makes the most sense from a customer, financial, and system reliability perspective. Last quarter, I stated Idaho Power did not plan to file a general rate case in Idaho or Oregon in the next 12 months. That remains true today. but given the ongoing impacts of the COVID-19 crisis and its potential impact on the economy and the communities we serve, we will continue to monitor that situation closely. Steady customer growth, constructive regulatory outcomes, and effective cost management all play significant roles as we look at the need and timing of a future general rate case. Now I'd like to acknowledge our newest board member, Odette Bolano, who was appointed in September. Odette is president and CEO of St. Alphonse's Health System, where she provides executive leadership and strategic and operational oversight for a five-hospital system across Idaho and Oregon. Odette is a tremendously respected business and community leader whose commitment to the communities we serve make her a perfect fit for our board of directors. And you can see our full board makeup on slide eight. Finally, on slide nine, It shows a recent outlook of precipitation and weather from the National Oceanic and Atmospheric Administration. Current weather projections for the remainder of fall and early winter suggest a 33 to 50% chance for above normal temperatures and a range of normal to 40% chance of above normal precipitation in Idaho Power's service area. As always, weather and precipitation play an important role in Idaho Power's operations and reservoir storage levels for generating reliable, affordable, clean hydropower. And with that, Steve will now walk us through the quarter's financial results.