IDACORP, Inc.

Welcome to IDACorp's fourth quarter and year-end 2020 earnings conference call. Today's call is being recorded and our webcast is live. A complete replay will be available later today and in the next 12 months on the IDACorp website. If you need assistance at any time during the presentation, please press star then zero on your phone. I will now turn the call over to Justin Forsberg, Director of Investor Relations and Treasuries.

Thank you, Jason, and good afternoon, everyone. This morning, we issued and posted IDACorp's website our fourth quarter and full year 2020 earnings release and Form 10-K. 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 and spending forecasts, 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 for a Q&A session after Lisa and Steve provide updates. Slide four shows our quarterly and full-year financial results. IDACorp's 2020 Fourth quarter earnings per diluted share were $0.74, a decrease of $0.19 per share over last year's record fourth quarter. IdaCorp's earnings per diluted share for the full year 2020 were $4.69, an increase of $0.08 per diluted share from 2019. Today, we also issued our full year 2021 IdaCorp earnings guidance estimate to be in the range of $4.60 to $4.80 per diluted share, with our expectation that Idaho Power will not need to utilize in 2021 any of the additional tax credits that are available to support earnings in Idaho under its regulatory settlement stipulation. These, of course, are our estimates as of today, and those estimates assume normal weather conditions over the balance of the year and includes customer usage returning closer to pre-COVID-19 levels as we progress through the year. 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. I will now turn the call over to Lisa.

Thanks, Justin, and thanks to everyone joining us on today's call. As we look back on 2020, we acknowledge it has been a challenging year in so many ways. The COVID-19 pandemic created unforeseen difficulties for our customers and our employees. Economic uncertainty and interruptions to our daily lives became the norm. Our nearly 2,000 employees were challenged daily as we continued to carry out our mission as an essential service provider. And yet, through it all, IDACOR and Idaho Power continued to achieve tremendous results. As noted on slide five, 2019 and 2020 were our two safest years in company history. I am so grateful for the continued focus of our employees on safety despite all the distractions surrounding their daily routine. Turning to slide six, we also saw some of our best third-party customer satisfaction ratings being the top-ranking utility among peers in the segment for overall customer satisfaction and fifth highest in the nation for business customer satisfaction. And our reliability numbers remained among the best in the industry as we kept the lights on 99.96% of the time. The success we achieved in the continuation of our operations without significant interruption over the past year serve as testament to our great people. Whether they were adapting to remote or hybrid work, finding innovative ways to serve our customers, meeting company goals, or implementing additional measures to keep themselves, our customers, and our community safe. Our dedicated employees rose to the occasion and powered through it together. I can't thank them enough for their contribution, their perseverance, and the support they gave me as I transitioned into my new role last year. In addition to outstanding operating results, I am happy to report that IDACOR marked its 13th consecutive year of growth in earnings per share, as detailed on slide 7. We believe this achievement is unparalleled among investor-owned utilities in the U.S. in recent history, and it is particularly noteworthy in a year filled with economic headwinds and uncertainties. IDACOR and Idaho Power continue to benefit from strong customer growth and effective cost management, allowing us to preserve the full $45 million of additional accumulated deferred investment tax credits for future earnings support. We're pleased to continue to share the successes of the company with our owners by increasing IDACOR's quarterly common stock dividend again in 2020 from $0.67 to $0.71 per share. marking our ninth consecutive year with an increase to the dividend. As noted on slide 8, Idaho Power's service area continues to experience substantial customer growth. According to U.S. News & World Report and the United States Census Bureau, Idaho was once again the fastest-growing state in the country during 2020, and Idaho Power's customer base grew 2.7%. A national study by United Van Lines also ranks Boise as the number three metropolitan area for inbound moves during 2020. Idaho Power now serves more than 587,000 customers, and we view the reliable, affordable, clean energy our company provides as an important factor in continuing to attract business and residential customers to southern Idaho and eastern Oregon. It did not seem that long ago that we crossed the 500,000 customer mark. Looking ahead at future loads, inquiries for large load projects came in at a strong pace during 2020. On slide nine, you'll see the highlighted notable milestones, including the announcement of a 240,000 square foot TrueWest beef facility, the opening of Amazon's 2.5 million square foot fulfillment center, and the announcement of a 90,050,000 square foot expansion to an existing lamb western potato processing plant. Amidst the global pandemic, the economy within Idaho Power Service Area continues to outperform national trends. Moody's predicts sustained economic growth going forward. After experiencing a GDP decrease of 1.7% in 2020, the Moody's forecast calls for growth of 6.1% in 2021 and 6.8% in 2022. Unemployment within Idaho Power Service Area is at 4.7%. and increased over recent years, but still well below the 6.7% reported at the national level. As I mentioned earlier, IDACOR was pleased to announce a dividend increase of 6% this past fall. Going forward, management expects to recommend to the Board of Directors future annual increases in the dividend of 5% or more, with the intent of keeping the company within our target payout ratio of between 60 and 70% of sustainable IDACOR earnings. As outlined on slide 10, Idaho Corps continues its strategy into 2021, striving toward our cornerstone goals of growing financial strength, improving the core business, enhancing Idaho Power's brand, and keeping employees safe and engaged. As we execute on these goals, we work to balance the interests of our owners, customers, employees, and other stakeholders. We are committed to working for sustainable financial results and strong credit ratings by continuing to provide safe, reliable, affordable service to customers from an already clean and increasingly cleaner, reliable mix of generation resources. Idaho Power's goal to achieve 100% clean energy by 2045 fits well into our overall strategy, as we expect it to lead to new investment and system improvements that will enhance the customer experience. You'll see highlighted on slide 11 that the Borgman to Hemingway project, or B2H, continues to advance. This project is a key energy pathway that will allow us to buy, transport, and sell more clean energy across the Northwest. Last July, the Oregon Department of Energy issued a proposed order recommending authorization of the transmission line. Idaho Power anticipates finalizing B2H permitting in 2022. with the line plan to be in service in 2026 or later. Discussions are ongoing about the ownership structure of the line, with Idaho Power exploring with the partners both its planned share of ownership as well as the potential additional investment opportunities. Our path towards a cleaner tomorrow continued in 2020 as the jointly-owned Boardman Coal Fire Power Plant in Oregon ceased operations in October. Idaho Power had previously ended its participation in one unit at the North Balmy Coal Fire Plant in Nevada at the end of 2019. And depending on further analysis on economics and system reliability, the remaining Balmy unit could follow with exit plans as early as next year, but no later than 2025. We also continue to explore options with our partner for the appropriate end of life of the Jim Bridger Coal Fire Plant in Wyoming. which will be our final coal plant in the Idaho-Powers energy mix. Our most recent integrated resource plan calls for a full exit from coal-fired generation by 2030. Receiving a new long-term federal license for the Three Dam-Hill Canyon complex is another top priority to help ensure Idaho-Powers' clean energy future. Significant steps in 2020 include filing a supplement to Idaho-Powers' final license application, with the Federal Energy Regulatory Commission, or FERC, and preparing draft biological assessments in consultation with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service that were also filed with the FERC. The FERC could issue the license as early as 2022, but as of today, we believe issuance is more likely in 2023 or thereafter. The FERC also recently formally initiated the relicensing proceeding for the American Falls Hydropower Facility, which is Idaho Power's largest hydropower facility outside of the Health Canyon. Idaho Power currently expects the FERC to issue a new license for this facility prior to the 2025 expiration. Last quarter, we 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 as we look at 2021. Customer growth, constructive regulatory outcome, major project completion dates, and effective cost management all play significant roles as we look at the need and timing of a future general rate take. As part of our overall regulatory strategy, I'll highlight that Idaho Power filed an application last month with the Idaho Public Utilities Commission requesting authorization to defer the Idaho portion of O&M expenses, including insurance costs and depreciation expense of certain capital investments expected to be necessary to implement its recently enhanced wildfire mitigation plan, or WMP. This WMP outlines actions Idaho Power is taking or plans to implement in the future to reduce wildfire risk and to strengthen the resiliency of its transmission and distribution systems to wildfire. These enhancements are, in part, a response to the degree of annual destruction from wildfires that the Western U.S. has experienced in recent years. We expect to spend approximately $47 million in incremental WMP and wildfire-related O&M expenses and $35 million in incremental capital expenses over the next five years. The case is now pending at the Idaho Public Utilities Commission. Next, I'd like to highlight our newest board member, Dr. Mark Peters, who was appointed last week. Dr. Peters is currently the Executive Vice President for the Laboratory Operations at Battelle Memorial Institute, with responsibilities for governance and oversight of U.S. Department of Energy and U.S. Department of Homeland Security National Laboratories, for which Battelle has a significant lab management role. Previously, he was the Director of the Idaho National Laboratory since 2015. Mark is a highly respected leader in our Idaho community, as well as an internationally recognized expert in his field, including energy and security. We're excited to welcome him to our board of directors. I will close with a look at weather on slide 12. The most current projections from the National Oceanic and Atmospheric Administration suggest normal conditions from March to May. Our mountain regions have received some good precipitation in recent weeks, and we are hopeful the resulting snowpack should provide decent conditions for generating low-cost hydropower and to provide irrigation customers with enough water to operate in 2021. As a reminder, our power cost adjustment mechanisms in Idaho and Oregon significantly reduce earnings volatility related to changes in our resource mix and associated power supply costs that can fluctuate greatly due to weather. With that, I will hand things over to Steve for an overview of last year's financial performance.