IDACORP, Inc.

Welcome to IdaCorp's second quarter 2022 earnings conference call. Today's call is being recorded and a webcast is live. A replay will be available later today and for the next 12 months on the IdaCorp website. If you need assistance at any time during the presentation, please press star zero on your phone. I will now turn the call over to Justin Forsberg, Director of Investor Relations and Treasury.

Thank you, Julie. And good afternoon, everyone. This morning, we issued and posted IDACorp's website our second quarter 2022 earnings release and Form 10-Q. The slides that accompany today's call are also available on IDACorp's website. We will refer to those slides by number throughout the call today. As noted on slide two, our discussion today 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 uncertainties surrounding the impacts of future economic conditions. 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 Brian Buckham, IDACorp's Senior Vice President and Chief Financial Officer. In addition to Lisa and Brian, we have other members of our management team available for a Q&A session after Lisa and Brian provide updates. Slide four shows our quarterly financial results. IDACorp's second quarter 2022 earnings per diluted share were $1.27, a decrease of 11 cents per share from last year's second quarter, primarily reflecting the impacts of weather and partially offset by the accounting impacts related to a regulatory order. Since we plan for normal weather, a portion of the weather impacts compared to last year were expected, and it is important to acknowledge that the Jim Bridger regulatory proceeding was also included in our original guidance for the year. Recall that last year's spring was very hot and dry, and that did not repeat this year. This spring was cooler and wetter, which impacted irrigation and air conditioning loads. Year to date, earnings per diluted share were $2.18, a decrease of $0.09 per share from the first half of last year's weather-assisted record results. Our results over the first six months of 2022 reflect Idacorp's second highest first half in the history of the company. Today, we also raised the bottom end of our previously issued full year 2022 IDA Corp earnings guidance estimate by 10 cents to the range of $4.95 to $5.05 per diluted share, which would result in the 15th consecutive year of growth in earnings per share. We also affirm that we believe Idaho Power will not need to utilize any of the additional tax credits that are available to support earnings under its Idaho regulatory settlement stipulation. These estimates assume historically normal weather conditions over the balance of the year. I'll now turn the call over to Lisa.

Thanks, Justin, and thanks to everyone joining us on the call today. I hope you are all having a wonderful summer. I'd like to begin with a high-level overview of some of the headlines for this quarter, specifically growth, infrastructure projects, economic conditions, and weather in our service area. These factors create both opportunities and challenges for our company. Growth continues to be a key differentiator for us. As you can see on slide 5, Idaho Power's growth stayed steady at 2.6% this quarter and remains quite strong. We believe our competitive prices, outstanding reliability, and strong customer satisfaction help make our service area attractive for business and residential customers. We continue to see a robust pipeline of future projects, including speculative industrial development, existing customer expansion, and new customers in most of our customer classes. As noted on the bottom of that same slide, slide five, the economy in Idaho Power's service area continues to outperform national trends. Moody's predicts sustained economic growth for our service area, calling for GDP growth of 3.3% in 2022, and 4.8% in 2023. And note that the 2022 GDP growth figure is a notable increase over Moody's estimate at the time of our first quarter earnings call. Also, unemployment within our service area is at 2.9%, below the 3.6% national average. More importantly, employment in our region has grown 6.7% since Q2 of last year. And perhaps not surprising, with the rapid increase in interest rates, we are seeing an easing in the record pace of building in some areas. But like Moody's, we remain bullish regarding our continued overall customer growth. Many of you may have seen the Wall Street Journal article last week about the Boise housing market prices cooling off. However, residential building permits remain historically high and requests for new service are still robust. We believe lower housing costs may be a net positive for companies and individuals looking to relocate in the area. The affordable cost and high quality of living have been important reasons people historically have wanted to move to our service area. We have also felt the impacts of the global supply chain challenges as growth is increasing demand on already strained supplies. But we've been working hard to mitigate delays on important items like transformers and cable. We are seeing some positive signs of easing supply chain pressures in some areas. Inflation is another economic challenge we are monitoring closely. Essential expenses like housing, food, gasoline represent much of the increase in inflation nationwide, and our service area is not immune to these trends. They create challenges for our customers, communities, and employees, as well as for our company. We remain focused on attracting and retaining skilled staff and are actively working to ensure our workforce continues to receive competitive wages and benefits and maintain our status as an employer of choice in an increasingly competitive job market. While we have felt the pressures on O&M that are pervasive in the macro economy, we remain committed to our efforts to control expenses like we've always done. and we are confident in our team's ability to remain focused on controlling costs throughout the second half of the year. As we address growth, an emphasis on reliable, affordable, clean energy to serve our growing customer base highlights the importance of ongoing projects like the Boardman to Hemingway transmission line. That line will serve as a clean energy highway across the West and also provides both reliability and resilience to the system. We're still on track to receive a permit from the state of Oregon by the end of this year, and the line is currently planned to go into service in 2026. As I mentioned last quarter, we're also planning to bring two large battery storage projects totaling 120 megawatts online next year to meet our capacity needs, pending approval by the Idaho Public Utilities Commission. Recall that these batteries will be the first of their kind in Idaho. We're working to address additional capacity needs in 24 and 25 through an ongoing RFP process. And we should have updates on that topic later this year, as right now we're still working through the process. And finally, the weather. The weather in the first two quarters has definitely given us mixed results. Results for Q1 benefited from cold weather, yet results for Q2 were challenged by a wet, cool spring. And Brian will give more details on that in a moment. The summer finally arrived in late June and temperatures have been unseasonably warm, and we've seen a strong demand since then. And so we're feeling optimistic about Q3 thus far. Recall that the third quarter is generally our highest sales quarter as we serve our peak summer demand. So when you combine weather, growth, infrastructure, the regional economy, and positive regulatory outcomes, we are forecasting a strong finish to 2022. Now, we've mentioned general rate case timing on prior calls, and at this point, I'd say we are continuing to analyze the timing of a case in a very dynamic environment, and we will keep you posted. With that, I will hand things over to Brian for some more details of this quarter and our expectations for the rest of the year.