IDACORP, Inc.

Good day, everyone. Welcome to the IdaCorp's fourth quarter and year-end 2020 earnings conference call. Today's call is being recorded and is on our webcast 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 would now like to turn the call over to Mr. Justin Forsberg, Director of Investor Relations and Treasury. Please go ahead, sir.

Thanks, Kellyanne, and good afternoon, everyone. We appreciate you tuning in for our call. This morning, we issued and posted IDACorp's website our fourth quarter and year-end 2022 earnings release and the associated Form 10-K. The slides that accompany today's call are also available on IDACorp's website. We'll 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, spending forecasts, and regulatory plans 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, Hydacorp's President and Chief Executive Officer, and Brian Buckham, Hydacorp'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 following our prepared remarks. Slide four shows our full year financial results. Hydacorp's 2022 earnings per diluted share were $5.11, an increase of more than 5% or 26 cents per share from last year, reflecting the impacts of customer growth, weather, and a mid-year regulatory order, partially offset by higher operating costs. Both 2022 revenues and earnings are IdaCorp's highest in the history of the company, and the 2022 earnings results were the 15th consecutive year in growth of earnings per share. Today, we also initiated our full year 2023 IDA Corp earnings guidance estimate in the range of $4.95 to $5.15 per diluted share, which includes our current expectation that Idaho Power will utilize approximately $15 million of additional tax credits that are available to support earnings at the 9.4% return on equity level in the Idaho jurisdiction under its Idaho regulatory settlement stipulations. These estimates assume historically normal weather conditions throughout the year and a return to more normal power supply expenses. I'll now turn the call over to Lisa.

Thank you, Justin, and thanks to everyone for joining us on the call today. I want to begin my remarks by underscoring what Justin just mentioned, that IDACOR completed its 15th consecutive year of growth in earnings per share that you can see on slide five. We believe this is a remarkable achievement among investor-owned utilities, and I want to thank our hardworking team of employees for their contributions to our sustained success. These financial results have translated into a growing dividend, and we are also proud of our high customer satisfaction scores and excellent service reliability throughout 2022. As noted on slide six, customer growth remains strong across the Idaho Power service area. Our customer base grew 2.4% during 2022, and we now serve nearly 620,000 customers. Moody's most recent GDP calculation for our service area forecast strong growth of 3.9% in 23 and 4.5% in 24 as our local economy continues to outperform national trends. In addition to being a great place to live and do business, we believe the reliable, affordable, clean energy Idaho Power provides is a key driver for growth across our service area. Now, robust residential growth has been a theme for many years, and while single-family residential building permits have slowed in recent months as interest rates have increased, we expect overall economic activity to remain strong. Unemployment in Idaho Power's service area during the fourth quarter was 2.3% compared to 3.5% at the national level, and employment has increased by 5.8% since the fourth quarter of 2021. We are also seeing a major uptick in Idaho Power's load growth forecast as a result of several large load projects. And with the new meta data center coming to Idaho and Micron's major expansion of its Boise headquarters, including new microchip fabrication facilities, Idaho Power expects retail sales growth of 5.5% over the next five years. This growth is projected to come on top of the year when we saw the highest retail megawatt-hour sales in our history. As our customer base grows, you'll see on slide seven that we continue to add resources that will allow us to meet our increasing demand while simultaneously moving away from our coal-fired resources. Large transmission projects like Boardman to Hemingway or B2H, for which we expect to break ground this year, will be critical. We are also working with Pacificor on segments of the 1,000 mile Gateway West transmission line project, which will help both companies meet rising demand and improve reliability. During the fourth quarter, Idaho Power began buying energy from the recently completed 120 megawatt jackpot solar project in southern Idaho. Meanwhile, we received preliminary approval from our regulators for our first utility scale energy storage project that total 120 megawatts of company-owned battery storage that is under construction with an anticipated in-service date of summer of 23. We also signed agreements for a new 100 megawatt solar project PPA paired with an additional 60 megawatts of company-owned battery storage that is scheduled to come online in the summer of 24. We anticipate needing additional energy and capacity resources in 25 and 26 And we are in the bid evaluation process for the projects for 2025 and the RFP stage for the 2026 project to help us meet those future needs. Our efforts to expand and improve Idaho Power's energy grid requires significant investment. And we currently anticipate growth and reliability-focused projects will drive more than $3 billion of capital expenditures over the next five years. And Brian will discuss more about that in a moment. We truly are building the future, and it is a fascinating dynamic as we experience the convergence of historic growth, emerging technologies, and our clean energy goal, all while safely delivering the reliable, affordable service our customers expect. Along with reliability and customer service, top of mind is ensuring our investors continue to earn a fair and reasonable return on their investment in our company. Turning to slide eight, you will see that we are in the process of preparing a general rate case in Idaho that we currently plan to file on June 1st, requesting that Idaho customer rates change on January 1st, 2024, and then with an Oregon general rate case filing that will likely follow shortly thereafter. We've invested over a billion dollars in infrastructure for the communities and businesses we serve since Idaho Power's last general rate case over a decade ago. and we have considerable infrastructure investment ongoing during this year that we plan to include in the case. Much of our investment was in response to rapid growth in our service area, as we have seen our customer count increase by nearly 120,000 over the past decade, which is an increase of about 23%. We have also made significant investments in maintaining and improving system reliability from our transmission, distribution, and generation assets, which benefits everyone who lives and does business in our service area. Customer growth has consumed the length we once had in our generation system, which over the past several years has served to lessen the incremental costs associated with growth. However, as I touched on a moment ago, our planning process has identified several additional energy and capacity needs to serve new record loads that are projected to accelerate going forward. While the major driver generating the need for a rate case is the investment in property, plant, and equipment to serve our customers' growing energy needs, there will be some inflationary factors contributing to the request in the case. We have worked hard to keep our O&M low for the past decade, with an average annual growth rate through 2022 of only 1% since 2012. or an increase of just over $50 million to serve those nearly 120,000 new customers. So we expect our upcoming case to be largely about rate-based additions to reliably serve our customers and to a lesser extent about recovery of higher expenses. We believe the June 1 filing date also allows us to balance our need for timely cost recovery and our goal of affordability for our customers. While we understand that any level of price increase can be impactful to customers. Our experience over the years shows that smaller requests over a period of time, rather than a single large request, are generally more manageable. That said, we expect more frequent cases in the coming years due to continued infrastructure investments, including Hills Canyon relicensing, new energy and capacity resources, and high voltage transmission projects. Balancing the impacts on customers continues to be an important component of our efforts to control costs and to make prudent decisions. We have established a very disciplined culture resulting in a strong record of managing our expenses. It's our belief that our rate request will exhibit prudent spending and will demonstrate that our company made the necessary investments to continue providing safe, reliable electric service to our customers in responding to our state's economic development. Ideally, we are targeting a single-digit average percentage rate increase in our June filing. As I mentioned, we've not been in for a general rate case in over a decade, but our regulators have demonstrated through interim regulatory proceedings an ability and desire to find constructive ways to balance fair returns for Idaho Power and its investors with the needs and interests of our customers. As examples, in recent years, the Idaho Commission has found constructive ways to address tax reform, the ADITC mechanism, and the economic realities associated with exiting full-fired generation. We're on track with the early stages of preparing for this case, and we're confident that the case we plan to present, and that we're confident in the case we plan to present, and that our constructive regulatory environment in Idaho stands firm. As a reminder, the Idaho Commission requires Idaho Power to give a 60-day notice of its intent to file a general rate case, and we expect the proceeding would span about seven months before new rates would be in effect. With that, I will hand things over to Brian for a financial overview of 2022 and our expectations going forward. Brian.