IDACORP, Inc.

Welcome to Out of Court's first quarter 2021 earnings conference call. Today's call is being recorded and our webcast is live. A complete replay will be available later today and for the next 12 months on the Out of Court website. If you need assistance at any time during the presentation, please press star zero on your phone. I would now like to turn the call over to Justin Forsberg, Director of Investor Relations and Treasury.

Thank you, Kavita, and good afternoon, everyone. This morning, we issued and posted to IDACorp's website our first quarter 2021 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 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 impact of the ongoing 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 financial results. IdaCorp's 2021 first quarter earnings per diluted share were 89 cents, an increase of 15 cents per share from last year's first quarter. Today, we also affirmed our full year 2021 IDA Corp earnings guidance to be in the range of $4.60 to $4.80 for 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 stipulations. These are our estimates as of today, and those estimates assume normal weather conditions over the balance of the year and include 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 thank you to everyone joining us on today's call. We have had a great start to 2021. As our customers and employees move closer to a more normal work environment, we are looking forward to reconnecting with many of you in person over the next year when possible. Our company has begun to resume some normal work operations in a phased, carefully planned manner, and we are hopeful health trends will continue to allow our working conditions to normalize in the coming months. For Idaho Power, as noted on slide five, the first quarter of this year saw a continuation of the strong customer growth. In March alone, we saw an annualized customer growth rate of 3.5%. This accelerated growth rate is challenging us to keep up with service connections, but our employees continue to prove that they are up for the task. Looking ahead, we expect robust growth to continue as Idaho's quality of life and business-friendly environment remain attractive. Other factors, such as inquiries for large load projects, suggest demand for our energy in our service area remains strong. On slide six, you'll see highlighted a few publicly announced large load expansions and projects. The economy within Idaho Power's overall service area continues to outperform national trends. Unemployment within Idaho Power's service area is now down to 3.7%, remaining well below the 6% rate reported at the national level. and total employment in our service area declined a modest 0.3% since March of last year. Moody's has strengthened its predictions for our service area, now projecting robust economic growth going forward, even after our service area experienced a modest GDP decline in 2020 relative to the national average. The Moody forecast now calls for growth of 8% in 2021, 8.1% in 2022, and continued strong growth of 6.8% in 2023. We expect that existing and sustained future customer growth will cause the need for Idaho Power to continue to enhance and expand its distribution and transmission system infrastructure, including the Boardman to Hemingway project. That growth may also result in the need for Idaho Power to procure other new sources of energy and capacity to serve growing loads, as well as to maintain system reliability we are in the process of analyzing options for the potential energy and capacity resource procurement while at the same time working on our 2021 integrated resource plan we are seeing early model results in our 2021 irp planning process showing declining length in our system in the near term it's a little too early to tell us to tell what that will mean for the timing of early exit of jim bridger coal-fired plant unit, the timing of the exit for the second unit at North Galmy, high voltage transmission line expansion project, and for other general system upgrades. While there are many factors that can impact the ultimate result, there is a possibility that the capital expenditures that we shared in February could grow beyond the estimate to meet the required projected energy and capacity needs. You'll see some of the items I mentioned highlighted on slide 7. We have many exciting challenges ahead as we work hard to ensure there is efficient energy and capacity supply for our customers, while balancing the critical need for reliability, resilience, and affordability with our clean energy goals. 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 the next 12 months. Customer growth, constructive regulatory outcomes, major project completion dates, such as the relicensing of Hell's Canyon, the timing of resource acquisitions, and effective cost management all play significant roles as we look at the need and timing of a future general rate case. As part of our overall regulatory strategy, I'll briefly highlight an update that Idaho Power received in its case with the Idaho Public Utilities Commission. We requested authorization to defer the Idaho portion of O&M expenses, including vegetation management, specified insurance costs, and depreciation expense for certain capital investments expected to be necessary to implement its recently enhanced wildfire mitigation plan, or WMP. The comments published earlier this month were generally supportive of our efforts to enhance and protect our infrastructure from some of the devastation that has been prevalent in other Western states in the past few years. As a reminder, we expect to spend approximately $47 million in incremental O&M and $35 million in incremental capital expenses for wildfire-related infrastructure work over the next five years. The case is still pending at the ICUC, and we are currently awaiting a commission order. As you all know, weather is an important factor in wildfire risk, as well as in other aspects of Idaho Power's overall operation. We rely on a healthy snowpack to meet our customers' needs reliably and affordably. This winter, our mountains accumulated below average precipitation. However, we entered the upcoming spring and summer seasons with strong reservoir storage. So we expect relatively healthy water conditions for irrigation customers, though it is likely that hydropower generation will be lower than our 30-year average. You will see on slide 8 that the most recent projections from the National Oceanic and Atmospheric Administration suggest dry and hot conditions from May through July. Preparations for summer readiness, when our system is most stretched, are underway, and we expect to be able to balance a reliable system and to meet customer demand. 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. And with that, I will hand things over to Steve for an overview of the first quarter's financial performance.