Q1 2020 Earnings Call

April 30, 2020

lock phone

Dead dead dead loss.

welcome to out. Of course, first quarter 2020 earnings conference call today is call is being recorded and is recording. Our webcast is live a complete replay will be available later today, and for a period of twelve months on the company's website at your bank. If you need assistance, and any time during the presentation, please press star and zero on your phones.

At this time, I'd like to turn the conference call over to Justin forsberg director of investor relations and Treasury.

Thanks, Jamie and good afternoon. Everyone before the market is open this morning. We issued and posted idacorp website our first quarter 2020 earnings release and quarterly report on form 10-q off the slides that accompany today's call are also available on our website will refer to those slides by number throughout the call.

Welcome to the first quarter 2020 earnings conference call today's call is being recorded and is recording our webcast is live a complete replay with it later today, and for a period of twelve months on the company's website at your bank. If you need assistance at any time during the presentation, please press star and zero on your phones at this time. I'd like to turn the conference call over to Justin forsberg director of investor relations and Treasury.

Thanks, Jamie and good afternoon everyone before the markets open this morning. We issued and posted idacorp website our first quarter 2020 earnings release and quarterly report on form 10-q. The slides that accompany today's call are also available on our website will refer to those slides by number throughout the call.

And we cautioned against placing undue Reliance on any forward-looking statements.

We we are on that schedule. We continue to be on that schedule as we go into September and we will have that conversation with them at that point.

It's showing on flight 3 on today's call. We have Darrel Anderson idacorp president and chief executive officer Lisa grow president of Idaho Power Company and Steve Kean senior vice president's Chief Financial Officer of both companies. We also have other company Representatives available to help answer any questions. You may have after Daryl Steve and Lisa provide updates on 5:00 for we present our quarterly Financial results. I had a 2020 first quarter earnings per diluted share were $0.74 a decrease of ten cents per share from last year's first quarter off the 2020 first quarter results or idacorp second-highest first quarter earnings in almost twenty years.

Okay, great. I'll let others ask questions. Thank you very much. I appreciate it.

As noted on slide to our discussion today includes forward-looking statements including earnings guidance, which reflect our current views on what the future holds but are subject to her several risks and uncertainties including those related to the covid-19 Public Health crisis. 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 Thursday. We have Darrel Anderson idacorp president and chief executive officer Lisa grow president of Idaho Power Company and Steve King senior vice president and Chief Financial Officer of both companies. We also have other company Representatives.

In our next question comes from Chris only house from cyber Williams, please go ahead with your question. Hey everybody. How are you today? Good. Good. Hey, Darryl. Thanks for all your help Through The Years or really appreciate it. Thank you Chris. Obviously, you're very oriented or service-oriented is is that where you're really seeing some firmness is because of the egg and and the importance of those Industries.

Today, we also affirmed our full year twenty-twenty either earning his guidance estimate to be in the range of $4.45 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 settlement stipulation with the Idaho Public Utilities Commission.

As shown on slide three on today's call. We have Darrel Anderson idacorp president and chief executive officer Lisa grow president of Idaho Power Company and Steve King senior vice president and Chief Financial Officer of both companies. We also have other company Representatives available to help answer any questions. You may have after Daryl Steve and Lisa provide updates off and slide for we present our quarterly Financial results either corpse 2020 first quarter earnings per diluted share were $0.74 a decrease of ten cents per share from last year's first quarter of the 2020 first quarter results or idacorp second-highest first quarter earnings in almost twenty years.

I'm going to let bullet Adam kind of kind of just try him in on that cuz he's been staying pretty close to this. So Adam you want to chat about that? Yeah hate Chris. Yeah. No, I think you're right. We we feel pretty good about the food processing and packaging companies the ones we've been able to chat with or moving ahead and most of them kind of full steam ahead. And as I mentioned before or the Egg looks strong to you know, the farmers planted their crops optimistically so we view this is is positive for us. I mentioned before the season actually starting a bit early and we think the water is there and and they're out there growing the crops. In fact, I just had a call yesterday with some of our customer a graps and kind of across-the-board across the region and again, they they felt good about where we were at. So I think you're right from our perspective. It's a it's a strong point.

These are estimates as of today as we have seen only a relatively small impact from the covid-19 pandemic to date. However, as you would expect it is difficult to predict the full long-term impact of Europe economic conditions on Idaho power's customers and suppliers and how that could impact the upper end of the earnings guidance range or the use of tax credits if the pandemic worsens, whereas prolonged I will now take the call over to Darryl. Thanks, Justin and thanks everyone for joining us on today's call. I want to start out. I'm going to talk about some comments around covid-19 pandemic off as a follow-up to Justin's remarks. But before I do that, I just want to acknowledge a couple of things. First of all, I hope all of you on this call have have safely kind of navigate me through these crises. I know it's impacted many of you and your families and the organizations that you work for and so on behalf of our organization. I hope that you guys were all hanging in there throughout all this chaos.

Okay, Lisa. You mentioned that the irrigation draw is part of your reduced Hydro expectations for the year. How does a hydro get communicated to your irrigation customers? Are they primarily just keeping an eye on the the reservoir reporting websites or do you guys contribute to that to communicate to those customers where you're at in terms of having adequate resources? How does that work? That is that is not Thursday is the Bureau of Reclamation that in the state that runs all the water. We're just basically a taker know certainly we share a lot of modeling information and whatnot. But we don't often dictate the allocation in any way but as far as the farmers knowing that there's a really, you know, there's a a high-quality resources available to them.

And so we're glad that you can can make it on on the call baby. I think I'm just going to give you heads up. We have a pretty good raging storm going on outside right now, and I'm pretty good with under storm. That's uh, that's that's happening. So we're hoping the system hangs in there. Like it normally does but you just never know but it's a we had a really warm spell yesterday and that warm spell has translated into English a few Thunder bumpers out there. But so many of you on this call have lived through many much worse situations than that. And so and the other thing is for the first time we're doing this fairly dispersed month. So what you'll see will try to move through this without much Interruption, but we will maybe calling on in the Q&A some folks who are remotely so we're hoping the technology package things in there on that.

These are estimates as of today as we have seen only a relatively small impact from the covid-19 pandemic to date. However, as you would expect it is difficult to predict the full long-term impact of Europe economic conditions on Idaho power's customers and suppliers and how that could impact the upper end of the earnings guidance range or the use of tax credits if the pandemic worsens, whereas prolonged I will now take the call over to Darryl. Thanks, Justin and thanks everyone for joining us on today's call. I want to start out. I'm going to talk about some comments around covid-19 pandemic off and the follow-up to Justin's remarks. But before I do that, I just want to acknowledge a couple of things. First of all, I hope all of you on this call have have safely kind of navigate me through these crises. I know it's impacted many of you and your families and the organizations that you work for and so on behalf of our organization. I hope that you guys were all hanging in there throughout all this chaos.

and so we're glad that

They just picking that up from the reporting websites that they can look at or you know, how do they understand what the irrigation potential is?

in terms

Of water how much is available I think water or or energy water water. Yeah, that's that's the state and the Bureau of Reclamation. There's an incredible amount of communication that takes takes place in the egg and the state on a on a very regular basis communicating them to what the projections are. The forecasts are for water. So and it's done early on everybody's focusing on one that looks like across the basins that that were the snake collects from and so the ad guys are doing this early on in constant communication with the state and they've been doing this for a long time. So those channels are pretty good are really good actually as to how they communicate back and forth so they get an idea as to what they're going to have the opportunity which to do which drives what what you know, partially drives what time they're going to put in what they're going to plant year-over-year. There's a lot a lot of communication that goes on between the state and the and and the community and Darryl, this is Adam also sad that communication wage.

So beginning with the onset of the of the covid-19 has our company took.

Swift action to ensure that we continue to safely provide reliable energy to our communities and to ensure the safety of our employees and our customers. We are an essential business and not work for us is deemed essential to maintaining and operating the capital infrastructure the critical infrastructure that powers our economy extra safety measures have been in place at our facilities and in the field with special precautions being taken for our public-facing colleagues as well as our power plants and other critical work areas. We have been proactively communicating with our customers to let them know we remain committed to SafeLink guiding reliable energy.

You can can make it on on the call. The other thing. I'm just going to give you a heads up. We have a pretty good raging storm going on outside right now and pretty good little thunderstorm. That's that's happening. So we're hoping the system hangs in there. Like it normally does but you just never know but it's a we had a really warm spell yesterday and that warm spell has translated into a few Thunder bumpers out there. But so many of you may have lived through many much worse situations than that. And so and the other thing is for the first time we're doing this fairly dispersed. So what you'll see is dead try to move through this without much Interruption, but we will maybe calling on in the Q&A some folks who are remotely so we're hoping the technology kind of hangs in there on that.

As we navigate this crisis, we are drawing on our robust business continuity and dynamic response and Emergency Management plans. I am proud to report that is noted on Slide Five Our Generation transmission and distribution operations continued largely uninterrupted in order to provide these essential Services while protecting both our employees and our communities. We have closed all Idaho Power facilities and Recreation sites. However, some of those will be reopening effective tomorrow May 1st. We have upgraded it capabilities to facilitate remote not working for over half of our Workforce. We've eliminated large in-person meetings and non-essential work travel. We've continued to monitor cyber and physical security threat. We've tested critical systems for business continuity purposes be closely monitored our supply chain enhanced cleaning procedures at all, our facilities and encourage employees to to practice responsible Social Club.

So beginning with the onset of the of the covid-19 has our company took Swift action to ensure that we continue to safely provide reliable energy to our communities and to ensure the safety of our employees and our customers. We are an essential business in our Workforce is deemed essential to maintaining and operating the capital infrastructure the critical infrastructure that power Zone. Nanami extra safety measures have been in place at our facilities and in the field with special precautions being taken for our public-facing colleagues as well as our power plants and other critical work. We have been proactively communicating with our customers to let them know we remain committed to safely providing reliable energy.

And made to the farmers this year and that again, they feel pretty good about where they're at from a water perspective.

and one last thing

as far as the guidance goes

about what you're anticipating in terms of the fourth quarter, and if you reflected in your your guidance some sort of expectation that there's a flare up in the 4th.

No, I don't I guess I don't I know we've had some issues in the past with how people are where they estimate, you know, as far as you guys do your quarters. I'm always kept our guidance to annual guidance and I'll fully admit. We have some nuances that that impact that for instance. It's odd the Oddity of it one of them when we are having think that we're going to be in the lower end our earnings band. We may end we have booked credits in in first quarter that will skew the rest of the year because Jo's credit's come in earlier and they actually make first quarter earnings a little higher and higher up. Are you talking about coming back in the second half of the Year two-thousand reflecting in the guidance, you know, you're talking about one that your percent for load. Is that incorporating some kind of assumption about a week or fourth quarter coming up?

kissing and other effective prevention measures

We also understand the economic hardships facing many of our customers in response. We have temporarily suspended disconnections and waved Associated late fees.

kissing and other effective prevention measures

Our company strong emphasis on safety is a particular importance during times of Crisis and I would like to thank and commend our employees for the efforts they have made to keep themselves each other of our customers and communities across our service area safe.

We also understand the economic hardships facing many of our customers in response. We have temporarily suspended disconnections and waved Associated late fees.

Like most if not all companies. We remain somewhat uncertain how significantly covid-19 will ultimately impact Idaho power's 2020 operations and financial performance.

You know at this point not not particularly, I would say it's it's more that we are on a steady, you know, we we do this rollout we factored it in Georgia taking longer probably than what the minimums are. But I guess if I had to find held to me that maybe you were asking about the there was talk just I think today that would be the recovery the W and it goes down and comes back and then goes down. I think we're more factoring in just what we've seen in Prior events and how we would cope with those sort of items with particular focus on the quarters cuz I don't know if that would hit I don't know when that hits you know it maybe that's fourth quarter for us. As you know, the bulk of our earnings money are in the summer month. We do get a lift at the end of the year. And in that sense. It's the end of fourth quarter and we have a pretty good list at the beginning of phone number.

We have yet to see a significant decrease in our overall loads during the stay-at-home orders, but we acknowledge it may soften if the crisis is prolonged certainly some building across our service area have been closed or slowed down in recent weeks overall. We saw a 5% or less than 1 million dollar decrease in commercial sales during the month of March and a portion of that was due to mild weather.

Like most if not all companies. We remain somewhat uncertain how significantly covid-19 will ultimately impact Idaho power's 2020 operations and financial performance.

On July 6th, you can see the actual sales vs are forecasted and whether adjusted sales showing March and much of April.

We have yet to see a significant decrease in our overall loads during the stay-at-home orders, but we acknowledge it may soften if the crisis is prolonged certainly some big box is across our service area have been closed or slowed down in recent weeks overall. We saw a 5% or less than 1 million dollar decrease in commercial sales during the month of March and a portion of that was due to mild weather.

With many of our large customers operating in the Agriculture and food industry a sizeable number of those businesses continue to operate as the most industrial Arts commercial companies in our service area along with more people working from their home offices residential load could uptick however given at April and May or off-peak months. We do not expect a significant increase unless the Chrome extensions in the summer when customers run their air conditioners, we will continue to monitor these impacts and update you if conditions and expectations change.

On 5 6 you can see the actual sales vs are forecasted and whether adjusted sales showing March and much of April.

if the weather treat this right with the

Pretty mild shoulders in the middle. So it would really depend on not only just the quarter but the timing of the quarter there and and I think in terms of people hitting or predicting our fourth quarter of that's been more of a function of of missing earlier quarters in some way that we didn't get the the spread of our earnings and trying to find a normal year that you can look at to say what what should it be in it in a thermal year if we have a hot summer it's going to make the summer quarters bigger and you know, we've the years when we've hit sharing and giving money back to customers fourth-quarter can be really awful low because we kind of stock accruing a lot on the shareowners side and it starts to all go to customers. So we have some anomalies there with our the spread between quarters. But at this point we're just suck. We still feel like our guidance is the right guidance were reaffirming what we we came out with at the end of the year.

interstate

Idaho Governor Brad little announced on April 23rd that the state had entered a new phase and the virus response and launched a carefully crafted for stage process focused on an economic rebound.

Each stage requires certain criteria and conditions be met with Stage One to begin opening up businesses after May 1st, and if metrics are continued to be met stage four would begin on June 13th with the state expected to be completely open by June 26th.

In the state of Idaho Governor Brad little announced on April 23rd that the state had entered a new phase and the virus response and launched a carefully crafted for stage process focused on an economic rebound.

We are cautiously optimistic the plan will enable Idaho's economy to recover in a measured fashion.

Oregon has made no such announcement yet, but is coordinating with other states in the region to develop its reopening plan. And as a reminder our Oregon jurisdiction account for approximately five page of our business.

We are cautiously optimistic the plan will enable Idaho's economy to recover in a measured fashion.

Okay, great. That's helpful. They're all hope you get to take a retirement vacation at some point in the future canceled one so far has gotten canceled. We'll see some day off. All right. Well, thank you guys. Appreciate it. Thank you Chris. Thank you.

And with that I would like to hand things off to Steve who will walk us through our liquidity position and our first-quarter financial results.

Thanks, Darryl and good afternoon everyone today. I'll first address where idacorp and Idaho Power are from a liquidity standpoint as well as provide you reminders of some of our regulatory mechanism that I had a corporate Idaho Power continue to maintain strong balance sheets, including investment-grade credit ratings and sound liquidity, which enables us to fund ongoing Capital expenditures and dividend payment.

And a final opportunity to press star and one to sing for a question will pause just for a moment.

And with that I would like to hand things off to Steve who will walk us through our liquidity position and our first-quarter financial results.

And ladies and gentlemen that concludes our question-and-answer session for today. Mr. Anderson. I'll turn the call back over to you. Thank you, and thank you all for participating on our call today. I would like to invite all of you to participate in the 2020 annual meeting of shareholders, which will be held on Thursday, May 21st at 10 a.m. Mountain time to safely practice social distancing. This year's meeting will be conducted virtually a formal notice has been sent out to shareholders with instructions on how to attend virtually and we also plan to issue a press release in a couple of weeks with instructions on how to listen online via our website. We look forward to sharing updates from 2019 and listening to and responding to our shareholders questions and comments. We appreciate your continued interest in I Corp we have found you guys. Have a great rest of your day and stay safe. Thank you.

At the beginning of April despite the volatile market conditions at the time. We successfully closed the bond offering that brought approximately 260 million dollars of cash proceeds to pull up our we issued 230 million dollars the first mortgage bonds from an existing series of nearly 30-year medium-term notes at a 13% premium to the 4.2% coupon rate, which resulted in a re offer yield of 3.42%

Thanks, Darryl and good afternoon everyone today. I'll first address where idacorp and Idaho Power are from a liquidity standpoint as well as provide you reminders of some of our regulatory mechanisms. I had a corporate Idaho Power continue to maintain strong balance sheet including investment-grade credit ratings and sound liquidity, which enables us to fund ongoing Capital expenditures and dividend payment.

A bond issuances this approximate size and tenure had been planned during 2020 even before the development of the covid-19 crisis to address long-term liquidity needs as well as to retire it 100 million dollar Bond set to mature later this year. We are pleased with the outcome and filled both Idaho Power and idacorp are now in a strong liquidity position to whether the potential impact from stay-at-home orders on Idaho power's revenues bad debts and Associated cash collections.

a bond issuances

Ladies and gentlemen that concludes today's conference call we do thank you for participating. You may now disconnect your lines.

Idacorp operating cash flows along with our liquidity positions as of the end of the first quarter are included on slide seven.

This approximate size and tenure had been planned during 2020 even before the development of the covid-19 crisis to address long-term liquidity needs as well as to retire a $100,000 bond set to mature later this year. We are pleased with the outcome and filled both Idaho Power and idacorp are now in a strong liquidity position to whether the potential impact from back home orders on Idaho power's revenues bad debt and Associated cash collections.

Dead dead dead.

Cash flows from operations were about $23 lower than the first quarter of 2019. The decrease was mostly related to the timing of net collections of regulatory assets and liabilities, especially those resulting from the power cost adjustment mechanism.

Idacorp operating cash flows along with our liquidity positions as of the end of the first quarter are included on slide seven.

The liquidity available and ride a corpse in Idaho power's credit facilities is shown on the middle of slide seven at this time. We do not anticipate issuing additional Equity this year other than relatively nominal amount under a Compensation Plan.

You'll note that.

Including the current cash positions that both idacorp and Idaho Power as of April 24th. We have access to liquidity of approximately 200 million and 507 $570 million dollars respectively while cash flows have been minimally affected. Thus far are combined liquidity along with expected regulatory support from our annual adjustment mechanisms is a substantial backstop took a capital and operating needs.

The liquidity available and dried a corpse in Idaho power's credit facilities is shown on the middle of slide seven at this time. We do not anticipate issuing additional Equity this year other than relatively nominal amount of compensation plans.

Dead dead dead dead dead.

I'll also briefly remind you of the funded status and Regulatory treatment of Idaho power's employee pension plan annually, Idaho Power collects, approximately nineteen dollars of pension expenses from customers across jurisdictions in Idaho, Idaho Power accounts for its pension contributions on a cash basis and any contributions above or below the amount currently collected and rates is dead bird or a crude as a regulatory asset or liability, Idaho Power contributed $10 to its Pension Plan during the first quarter of this year and is only required to make less than 5 million dollars in additional contributions during 2020. We currently plan to contribute up to an additional 30 million dollars to the plan but have flexibility depending on market conditions cash flows and effects of the help, correct.

You'll note that including the current cash positions that both idacorp and Idaho Power as of April 24th. We have access to liquidity of approximately 200 million and 507 $500 million dollars respectively while cash flows have been minimally affected. Thus far are combined liquidity along with expected regulatory support from our annual adjustment mechanisms. Is. To our capital and operating needs.

I'll also briefly remind you of the funded status of regulatory treatment of Idaho Power is employee pension plan annually, Idaho Power collects, approximately nineteen dollars of pension expenses from customers across jurisdictions in Idaho, Idaho Power accounts for its pension contributions on a cash basis and any contributions above or below the amount currently collected and rates is dead bird or a crude as a regulatory asset or liability, Idaho Power contributed $10 to its Pension Plan during the first quarter of this year and is only required to make less than 5 million dollars in additional contributions during 2020.

Another point you to flight eight where I will address the financial performance.

We currently plan to contribute up to an additional 30 million dollars to the plan but have flexibility depending on market conditions cash flows and effects of the Health crisis.

Despite the mild winter weather. We had excellent first quarter results, and we feel well positioned as we move forward into the rest of 2020 are strong consistent Financial results and cost management efforts during the past decade have preserved the 45 million dollars of tax credits available to support our current minimum Idaho jurisdictional return on Equity of 9.4% off our continuing our efforts to preserve as many of those credits as possible going forward.

Well now point you to flight eight where I will address the financial performance.

On the table of year-over-year changes, you'll see that strong customer growth of 2.6% added three point six million dollars to operating income in the first quarter.

Despite the mild winter weather. We had excellent first quarter results, and we feel well positioned as we move forward into the rest of 2020 are strong consistent Financial results and cost management efforts during the past decade have preserved the 45 million dollars of tax credits available to support our current minimum Idaho jurisdictional return on Equity of 9.4% off continuing our efforts to preserve as many of those credits as possible going forward.

on the

They declined and usage per customer. Mostly related to mild weather that impacted residential and Commercial Energy used for heating purposes and to a lesser extent due to a stay-at-home. Mom declines in sales to commercial customers decreased operating income by six point 1 million dollars as Daryl noted. We estimated the effect of covid-19 on Commercial customer revenues was less than 1 million dollars in this past quarter. The weather related declined for residential and small commercial customers was largely offset by four point five million dollar increase in fixed cost adjustment rep is next on the table.

A table of year-over-year changes, you'll see that strong customer growth of 2.6% added three point six million dollars to operating income in the first quarter.

They Decline and usage per customer. Mostly related to mild weather that impacted residential and Commercial Energy used for heating purposes and to a lesser extent due to a stay-at-home related to clubs in sales to commercial customers decreased operating income by six point 1 million dollars as Daryl noted. We estimated the effect of covid-19 on Commercial customer revenues was less than $1,000 in this past quarter.

Retail revenues per megawatt-hour decreased operating income by two point 1 million dollars partially caused by changes in customer mix as volume sold to residential customers in the first quarter of 2018 made up a smaller portion of the customer sales mix and then the same period last year also the Idaho jurisdiction TCA mechanism includes a cost-benefit ratio that allocates the DVR wage in certain net power supply expenses between customers 95% and Idaho Power 5%

The weather related declined for residential and small commercial customers was largely offset by four point five million dollar increase in fixed cost adjustment revenues next on the table.

In the first quarter of 2019 that power supply expenses were partially offset by a significant amount of wholesale energy sales due to Regional wholesale energy market conditions Regional wholesale Energy prices were elevated due to a combination of whether import constraints and natural gas pipeline disruptions. This led to Greater wholesale energy sales during the first quarter of 2019 volt power and approximately 5% of that benefit was retained for the company through the PCA.

Net revenues per megawatt-hour decreased operating income by two point 1 million dollars partially caused by changes in customer mix as volume sold to residential customers in the first quarter of two thousand off made up a smaller portion of the customer sales mix and then the same period last year also the Idaho jurisdiction TCA mechanism includes a cost-benefit ratio that allocates the deviation in certain net power supply expenses between customers 95% and Idaho Power 5%

Next Idaho Power is open access transmission tariff rates declined by 13% in October of 2019. This rate decreased combined with the decrease in wholesale Market activity, which was not expected lowered transmission Wheeling related revenues by five point four million dollars. Remember transmission Wheeling volumes in the first quarter last year were also higher than typical due to Regional any conditions stemming in part from a gas pipeline explosion in Canada.

In the first quarter of 2019 that power supply expenses were partially offset by a significant amount of wholesale energy sales due to Regional wholesale energy market conditions Regional Home Energy prices were elevated due to a combination of weathered import constraints and natural gas pipeline disruptions. This led to Greater wholesale energy sales during the first quarter of 2019, Idaho Power and approximately 5% of that benefit was retained for the company through the PCA.

Next on the table other operating and maintenance expenses increased by only nine million dollars primarily due to a slight increase in labor and benefit costs over last year's first-quarter. You'll know. We continue to expect full-year own and expenses to be in line with 2019.

Next Idaho Power is open access transmission tariff rates declined by 13% in October of 2019. This rate decreased combined with the decrease in wholesale Market activity, which was expected lowered transmission Wheeling related revenues by five point four million dollars. Remember transmission Wheeling volumes in the first quarter last year were also higher than typical due to Regional energy condition stemming in part from a gas pipeline explosion in Canada.

These items collectively knitted to a quarter-over-quarter decreased Idaho power's operating income of 6.6 million dollars overall, Idaho power's and Hyde, of course debt income were four point eight million dollars ninety-five point two million dollars lower than last year respectively.

Next on the table other operating and maintenance expenses increased by only nine million dollars primarily due to a slight increase in labor and benefit costs over last year's first-quarter, you'll notice that we continue to expect full-year own and expenses to be in line with 2019.

Flight nine shows are affirmed full year 2020 earnings guidance and our key financial and operating metrics estimates while it is difficult to predict the full long-term impact of evolved economic conditions on Idaho power's customers and the associated potential impact on our earnings guidance. We continue to expect idacorp 2020 earnings to be in the range of $4.55 to $4.65 per diluted share our guidance continues to assume no use of additional tax credit and normal weather conditions.

These items collectively needed to a quarter-over-quarter decrease Idaho power's operating income of 6.6 million dollars overall. Idaho power's a night. Of course debt income were four point five million dollars and five point two million dollars lower than last year respectively.

Other than a slightly lowered expectation of hydropower generation to the range of 68 million megawatt-hours the remaining full year financial and operating metric forecast are consistent with what was provided back in February with that. I'll turn the time to Lisa. Thank you Steve.

other than

You'll see our customer growth trajectory through the end of March on slide ten.

Slightly lowered expectation of hydropower generation to the range of 68 million megawatt-hours the remaining full year financial and operating metric forecast are consistent with what with divided back in February with that. I'll turn the time to Lisa. Thank you Steve.

You'll see our customer growth trajectory through the end of March on slide ten.

notable large

Slow projects that came online during the first quarter include an expansion for new yogurt lines at Chobani in Twin Falls and an expansion by River Rocks and grass in Western Idaho, despite covid-19, most projects under construction continue to move forward with minimal delays so far.

Steve mentioned we saw 2.6% customer growth during the twelve months ending March 31st, which continues the trajectory we've seen over the last couple of years while employment and unemployment numbers in our service area have of course been negatively impacted by covid-19. We continue to monitor the long-term economic impact of the crime on our customers forecasted GDP for our service area, which now have Incorporated the most current expected impacts of covid-19 calls for a 0.7% growth in 2020 and a 5% in 2021.

Idaho power's pipeline for business development remains strong with a diverse number of potential projects throughout our service area on March 30th, Idaho Governor Brad little scientist removing sales tax on data center equipment that meets certain criteria effective July one opening the doors for Idaho to compete for large-scale Enterprise data centers, Idaho offer competitive prices along with Idaho's positive business climate low-risk or natural disasters in arid climate make our state well positioned to attract data center activities page power is actively engaging with companies that operate in this space notable large load projects that came online during the first quarter include an expansion for New Year's alert lines at Chobani in Twin Falls and an expansion by river rock Sand and Gravel in Western, Idaho, despite covid-19, most projects under construction continue to move for Thursday.

With minimal delays so far.

Despite hardships caused by the pandemic we expect Idaho to remain one of the fastest-growing states in the country going forward as many of the drivers for growth including reliable affordable clean energy remain intact in February. We stated Idaho Power did not plan to file a general rate case in Idaho or Oregon in the next twelve months that remains true today 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. May I would like to Echo Daryl comments on in commending our employees for their work during the covid-19 crisis. I cannot thank them enough for continuing to show their commitment to safety package to our customers and for their flexibility and adaptability that they have demonstrated keeping our operations running smoothly to their credit. We remain on track to execute our twenty-twenty strategies.

As Steve mentioned we saw 2.6% customer growth during the twelve months ending March 31st, which continues the trajectory we've seen over the last couple of years while employment and unemployment numbers in our service area have of course been negatively impacted by covid-19. We continue to monitor the long-term economic impact of the crisis on our customers forecasted GDP for our service area, which now have Incorporated the most current expected impacts of covid-19 calls for a 0.7% growth in 2020 and a 5% in 2021.

And continue to expect to meet our goals despite the onset of this pandemic and Mild winter weather.

Despite hardships caused by the pandemic we expect Idaho to remain one of the fastest-growing states in the country going forward as many of the drivers for growth including reliable affordable clean energy remain intact in February. We stated Idaho Power did not plan to file a general rate case in Idaho or Oregon in the next twelve months that remains true today 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 off. I would like to Echo Daryl's comments on in commending our employees for their work during the covid-19 crisis. I cannot thank them enough for continuing to show their commitment to safety package to our customers and for their flexibility and adaptability that they have demonstrated keeping our operations running smoothly to their credit. We remain on track to execute our twenty-twenty strategies.

Flight eleven shows a recent Outlook of precipitation and whether from the National Oceanic and Atmospheric Administration current projections for the May to July weather outlook suggests a month to seventy percent chance for above-normal temperatures and a forty to fifty percent chance of below-normal precipitation in Idaho and Idaho Power service area. So things looked nice ending hot and dry over a large portion of our irrigation season, if this weather materializes, it could help irrigation sales return closer to a more normal level following the impact of last year's second quarter our snowpack conditions and Reservoir storage levels remain favorable for generating reliable affordable clean hydropower to the benefit of all customers as we head into the the summer.

and continue to expect

To meet our goals despite the onset of this pandemic and Mild winter weather.

as of April 29th

No pack above Brownlee Reservoir was a hundred and 3% of normal and the reservoirs in the system are entering the season in a strong position are slightly lowered hydropower for calling reflect higher irrigation drawers and lower April precipitation than than had been forecasted. And with that I will turn it back to you Darryl Banks Lisa home you can see and and we believe we are well-positioned for the Times ahead as most of you know, I'll be retiring effective on June first. So this will be my last quarterly earnings call as CEO. I have enjoyed working with you throughout the years and I appreciate all the support and feedback you and our owners and investment Community have provided as we have worked to make and keep them in Idaho Power such great companies.

Flight eleven shows a recent Outlook of precipitation and whether from the National Oceanic and Atmospheric Administration current projections for the May to July weather outlook suggests a fifty to seventy percent chance for above-normal temperatures and a forty to fifty percent chance of below-normal precipitation in Idaho and Idaho Power service area. So things looked up sending hot and dry over a large portion of our irrigation season, if this weather materializes, it could help irrigation sales return closer to a more normal level following the impact of last year's second quarter our snowpack conditions and Reservoir storage levels remain favorable for generating reliable affordable clean hydropower to the benefit of all customers as we head into the office.

Our success would not be possible without your continued dialogue and support.

Also, I think as you're aware upon my retirement Lisa will take over as president and CEO of I-84 in Idaho Power as you have seen from her work over the years. The company is in great hands. I could not ask for a better partner to hand the reins over to lead this great organization. She is supported by an outstanding group of officers and other leaders that are committed to the continued overall success of the organization.

As of April 29th, 2020 no pack above Brownlee Reservoir was a hundred and 3% of normal and the reservoirs in the system are entering the season in a strong position are slightly lowered hydropower forecast reflects higher irrigation drawers and lower April precipitation than than had been forecasted. And with that I will turn it back to you Darryl. Thanks Lisa. Hopefully you can see and and we believe we are well-positioned for the Times ahead as most of you know, I'll be retiring effective on June first. So this will be my third quarter earnings call i c e o. I have enjoyed working with you throughout the years and I appreciate all the support and feedback you and our owners and investment Community have provided as Thursday at work to make and keep in Idaho Power such great companies.

Our success would not be possible without your continued dialogue and support.

With that Lisa Steve, and I know there's on the call will be happy to answer any questions that you may have.

Ladies and gentlemen, we are now ready to begin the question-and-answer session. If you would like to ask a question, assuming you have dialed the queue a line. Please do so by pressing the star and one on your phone's dead. We remind you to ensure your mute function is turned off before you ask your question will take as many questions as time permits on a first-come basis. Once again, that is star and then one on your phone ask a question now.

With that Lisa Steve, and I know there's on the call will be happy to answer any questions that you may have.

And the first question today comes from Julian dumoulin-smith from Bank of America, please go ahead with your question.

Ladies and gentlemen, we are now ready to begin the question-and-answer session. If you would like to ask a question, assuming you have dialed the Q&A line. Please do so by pressing the star and one on your phone's dead. We remind you to ensure your mute function is turned off before you ask your question will take as many questions as time permits on a first-come basis. Once again, that is star and then one on your phone ask a question now.

Hi, good afternoon. This is Alex Morgan calling in for Julian. Congrats. Alex Alex.

And the first question today comes from billion dumoulin-smith from Bank of America, please go ahead with your question.

I wanted to specifically asked about owing from my understanding your 2020 guidance assumes flat cost going from 2019 and 2020. I was wondering how many levers you might have just in case, you know, the covid-19 demek were sense a little bit more than current expectations could potentially how much onam cost savings could you factor in? And then also to think of supporter of operations would be expect to see Cost Cuts before you would pursue to some of the the itc's

Hi, good afternoon. This is Alex Morgan calling in for Julian congrats. Could I have you?

Okay, let me give that a shot Alex. This is Steve L. Anthem answer them in reverse order. I would say absolutely we would look to pull levers that we have in order to preserve wage. I think depending on which levers they are. I mean we've used o&m before 2 to hit our targets and to exceed Target. I mean it would depend on which levers that we were pulling but say as we sit here today, I don't think we're ready to give a quantification of the number but we have identified sort of our own series of of choices that we have and some I would say are going to be probably exercise regardless because for instance we all know that travels gone down we have positions were not hiring right this moment because we don't think it's it's the the right environment Tire into we've been able to function remotely and and we're capturing some savings even as we go off.

I wanted to specifically asked about owing from my understanding your 2020 guidance assumes flat cost going from 2019 to 2020. I was wondering how many levers you might have just in case, you know, the covid-19 demek were sense a little bit more than current expectations from potentially how much own and cost-savings could you factor in? And then also to think of this order of operations would we expect to see cost cut before you would pursue suck the itc's?

We don't plan to turn around and let those savings disappear. There are further levers. We can hold positions longer. We can make further cuts that probably aren't remember what you would do you're in you're out forever, but they are things that we can do in the middle of of a challenging year and we've we've identified a lot of those we know generally what it's coming at us in Idaho at least it in terms of the initial plan and the rollout we think Oregon will be similar. It's safe to say we've identified things that we think cover that sort of an approach wedge. There are levers that go beyond that as you say, if if it if it worsens. I don't think we have even feel good about trying to say where we think the absolute might be dead cuz we don't know as we look at a a crisis like this. You've got the president involved the governor involved every mayor across our service territory involved the community businesses.

Okay, let me give that a shot Alex. This is Steve L. Answer answer them in reverse order. I would say absolutely we would look to pull levers that we have in order to preserve wage. I think depending on which leverage they are. I mean we've used o&m before 2 to hit our targets and to exceed Target. I mean it would depend on which life if we were pulling I'd say as we sit here today. I don't think we're ready to give a quantification of the number but we have identified sort of our own series of of choices that we have and some I would say are going to be probably exercise regardless because for instance we all know that travels gone we had options were not hiring right this moment because we don't think it's it's the the right environment to hire into we've been able to function remotely and and we're capturing some savings even as we go wage.

We're looking at all that and as you know, we approach things conservatively anyway, so we're planning for things that we think could be worse. But to try to put a hang a number on that exactly that's hard to do. I think we're going to leave that to everyone else until we've got more real data as we sit here today. It's just really early and we don't have much indication of what that impact might be. But be assured we will look to use those levers to preserve credits and hopefully also deliver earnings as in as good a spot on that range as we can accomplish with Alex, this is Daryl. I have to add a couple of things to a Steve said first of all, I think one of the overarching premises we have is if we manage On Em is we're not we're not going to sacrifice safety or reliability. I think those are two key points that that everybody needs to understand so they you know, things are associated with safety. We're not going to cut corners on where I can do those things as it relates to reliability. We're going to continue with birth.

The plan to turn around and let those savings disappear. There are further lovers we can hold positions longer. We can make further cuts that probably aren't reflective of what you would do you're in you're out forever, but they are things that we can do in the middle of of a challenging year and we've we've identified a lot of those we know generally what is coming at us in Idaho at least in terms of the initial plan and the rollout we think Oregon will be similar. It's safe to say we've identified things that we think cover that sort of an approach and there are jobs that go beyond that as you say if if it worsens. I don't think we have even feel good about trying to say where we think the absolute might be cuz we may know as we look at it a crisis like this. You've got the president involved the governor involved every mayor across our service territory involved the community businesses.

we're looking at all that and

Vegetation management programs that we have schedules on those we're going to continue those. Um, so those are things that we absolutely have to do what we will look at is where do we have discretionary?

Pending and to the extent we have discretionary spending. We will focus really hard on those things part of this is going to be driven by the how long how long will it take from an employee and consumer confidence level to get back to business as normal and and I I have the opportunity. I was taught by the governor to sit on to chair the the the the state's economic recovery committee. And so one of the key drivers to to the state reopening is how do you enhance consumer confidence and employee confidence coming back into the workplace? So we have taken internally we have to manage that ourselves as we potentially look to bring people back over a period of time when it's safe to in which to do that. We have a lot of people working from home. So what we offer what we will be doing is looking at at all of those costs as Steve pointed to the things we're we're we have you know, we're we're looking on the downward side. I will tell you that we have upward pressures also that we will be managing and a dog

You know, we approach things conservatively anyway, so we're planning for things that we think could be worse. But to try to put a hang a number on that exactly is really hard to do and I think we're going to leave that everyone else until we've got more real data as we sit here today. It's just really early and we don't have much indication of what that impact might be. But be assured we will look to use those levers to preserve credits and hopefully also deliver earnings is in as good a spot on that range as we can accomplish Alex, this is Daryl. I had a couple of things to a Steve said first of all, I think are one of the overarching premises we have is if we manage On Em is we're not we're not going to sacrifice safety or reliability. I think those are two key points that everybody needs to understand so thing, you know, things are associated with safety. We're not going to cut corners on where I can do those things that relates to reliability. We're going to continue with our vegetation management program.

We have schedules on those. We're going to continue those. Um, so those are things that we absolutely have to do what we will look at is where do we have discretionary spending and to the extent? We have discretionary spending we will focus really hard on those things part of this is going to be driven by the how long how long will it take from an employee and consumer confidence level to get back to business as normal and that and I I have the opportunity. I was taught by the governor to sit on to chair the the the the state's economic recovery committee. And so one of the key drivers to to the state reopening is how do you enhance consumer confidence and employee confidence coming back into the workplace? So we have to internally we have to manage that ourselves as we potentially look to bring people back over a period of time when it's safe to in which to do that. We have a lot of people working from home. So what we are what we will be doing is looking at at all of those call log.

All utilities are facing today with a deferral of disconnects is bad debts. And so we are actively looking at how do we manage that? And the other thing if you see in the same Q we also offer made a filing with the Oregon and Idaho commissions around the potential to recover any excess costs that we might incur as a result of this covet. So we're looking at all different types of levers here in which to manage that and if you look at our track record of the last six or seven years, I know an M. It's been it's been pretty unbeatable as it relates to how we have managed that so I think the the leaders are looking every Rock to find ways to manage manage the upward pressure that's already there on o&m. I'm trying to still stay within or beat the the onm targets that Steve just talked about wage. We we have all hands on deck on this because we actually understand the value of the credits.

Alex one other thing is you guys have seen the last couple of years where we've had milder weather than we maybe would like to have had particularly in the summer months and if off if it turns out to be a hot summer which we haven't had for a while that will bring some positives. So there's there's income that comes with that but it will also be harder to control the onm because usually those kinds of Summers written more fires and and response things that we have to do just generally because what the heat does and I think those net to a positive anyway, but when we say we're going to watch those levers there will be some that you just girl says that you've we won't sacrifice safety or risk to anything but if it's caused by the weather and and again, we're just a normal summer would be really nice to have if it's a really hot summer. We haven't seen that for a few years you go back to about thirteen I think is one of the last really big summer was usually there's some coughing

Fifty Point it to the things we're we're we have you know, we're we're looking on the downward side. I will tell you that we have upward pressures also that we will be managing and and one that all utilities are facing today with a deferral of disconnected bad debts. And so we are actively looking at how do we manage that? And the other thing if you see in the same Q we also made a filing with the Oregon and Idaho commission off around the potential to recover any excess costs that we might incur as a result of this covet. So we're looking at all different types of levers here in which to manage that if you look on our track record or the last six or seven years, I know an M. It's been it's been pretty unbeatable as it relates to how we have managed that so I think the the leaders are looking under every Rock to find ways to manage manage the upward pressure that's already there on o&m. I'm trying to still stay within or beat the the onm targets that Steve just talked about. So we we have all hands on deck on this Thursday.

We actually understand the value of the credits.

Alex one other thing is you guys have seen the last couple of years where we've had.

Along with with having those extra sales then too. So so we'll watch all that and balances for the best outcome.

Thank you. That's very very comprehensive and helpful. I really appreciate it. My last question is just about your customer both in terms of irrigation and electric sales for the industrial side when thinking about the Agriculture and dairy businesses. It's it's clear like in the media. There's a couple of calls about dumping and and crops being killed over. Would you be able to share how you might not be as impacted in terms of electric details and edit and irrigation sales as well and thanks so much again, sir Alex, this is Daryl. I'm going to start it but we're going to we're going to have to add and richest it's going to talk a little bit about this assuming he's still on and heading out. The call. I hope but the notion there is is that we have spent a lot of time on this as we have moved through this the pandemic considerations as we look forward.

Milder weather than we maybe would like to have had particularly in the summer month and if if it turns out to be a hot summer which we haven't had for a while that will bring some positives. So there's there's income that comes with that but it will also be harder to control the onm because usually those kinds of Summers written more fires and and response things that we have to do is generally because of what the he does and I think those net to a positive anyway, but when we say we're going to watch those levers there will be some that you just is Daryl says that you've we woke up by safety or risk to anything but if it's caused by the weather and and again, we're just a normal summer would be really nice to have if it's a really hot summer. We haven't seen that in a few years you go back to about thirteen I think is when the last really big summer was usually there's some costs that come along with with having those extra sales then too. So so we'll watch all that wage.

And and we have done a lot of outrage to our customers kind of find out how they're doing what they're doing with our customer reps to to going to be this is a a time in particular where it really matters to understanding what your customers are doing. And and so we've done a lot that until have Adam riches kind of give you a brief update as to what we know today and it ever evolving climber.

For the best outcome. Thank you. That's very very comprehensive and helpful. I really appreciate it. My last question is just about your customer both in terms of irrigation and electric sales for the industrial side when thinking about the Agriculture and dairy businesses wage, it's clear like in the media. There's a couple of articles about milk dumping and and crops being killed over. Would you be able to share how you might not be as if she passed it in terms of electricity sales and and irrigation sales as well and thanks so much. Again. This is Daryl. I'm going to start it but we're going to we're going to have to add and richest it's going to talk a little bit about this month assuming he's still on and hadn't got dropped off the call. I hope but the notion there is is that we have spent a lot of time on this as we have moved through this the pig.

Adam you're there. Yeah, and they're hey, thanks Darryl. And thanks for the question Alex. Yeah, Gerald mention. I've been reaching out to field personnel and customer folks and I'll just say anecdotally r t e r. I think the best word is cautiously optimistic on the front we've received mostly good news from our customers. We had a dry spring. So the AG actually started a couple of weeks early the water conditions appear to be favorable to sustain a full season and we believe most Farmers have planted their crops. They're pretty optimistic in that regard. So the big I know there is always weather, but for the most part again, we believe the news has been has been positive and favorable on the industrial side. I think you mentioned that to page Alex. It's not surprising that we experienced a decline in loads in April and some customers float operations, but based on kind of my discussions with our key account advisors and and

Considerations as we look forward and and we have done a lot of outrage to our customers kind of find out how they're doing what they're doing with our customer reps to to going to be this is a long time in particular where it really matters to understanding what your customers are doing. And and so we've done a lot that until have Adam riches kind of give you a brief update as to what we know today in a ever-evolving climate Adam you're there. Yeah, and they're hey, thanks Darryl and thanks for the question Alex. Yeah Gerald mention. I've been reaching out to field personnel and comb her folks and I'll just say anecdotally our teams are I think the best word is cautiously optimistic on the front we've received mostly good news from our customers. We had to drop off Spring. So the AG actually started a couple of weeks early the water conditions appeared to be favorable to sustain a full season and we believed dead.

Most Farmers have planted their crops. They're pretty optimistic in that regard. So the big gun know there is always weather but for the most

General our major customers have provided positive outlooks as well in terms of the food processing and and packaging facilities in general. They continue to move forward in a Thursday pays one area. That's a little less optimistic that you mentioned is Darius because of the reduction in restaurant in school lunches. So we're keeping an eye on them. But I I would say generally again talking to the dead zone ground both on the side and on the industrial side. We remain again just cautiously optimistic about the next couple of months.

Our next question comes from Brian Brian Russo from today, please go ahead with your question. Yeah. Hi. Good afternoon. Hi, Brian, Brian Hayes Thursday. So, you know with the assumption that the the lower end of your affirmed guidance range, you know supported by the the 9.4% return meant your shareholders Equity. You have a quite a strong track record of feeding, you know, even the midpoint of your original guidance and just curious, you know, volt Bowen Em, which maybe what you just discussed and and sales, I guess, you know, what are the other, you know assumptions that that you you can repeat that track record with uh, you know, cheer and and and going forward.

Part again, we believe the news has been has been positive and favorable on the industrial side. I think you mentioned that to Alex. It's not surprising that we experienced a decline in loads in a hospital and some customers float operations, but based on kind of my discussions with our key account advisors and in general, our major customers have provided positive outlooks as well in terms of the food processing and and packaging facilities in general. They continue to move forward in a steady Pace one area. That's a little less optimistic. The ignition is Darius because of the reduction in restaurant in school lunches. So we're keeping an eye on them, but I I would say generally again talking to the boots on ground both on the side and on the industrial side. We remain again just cautiously optimistic about the next couple of months.

Yeah, I think the good news is I don't know is still experiencing all of this growth. And when that is going on we are building a lot of capital assets and that keeps our home or workplace Force deployed on the capital which does I guess take some pressure off on them. As you know, we've got a good amount of money Alec a l m as well, but it it the fact that that's continuing to go and it we hopefully bring some Revenue growth that we have some in our plan. We hope it brings a little more money. It also relieves that what happens sometimes in these sort of disruption Cycles is you have to pause your your capital or you have to make a change their birth. And and unless you make it also the changing Workforce that often ships your costs into own em, we we don't really see that right now. We think that the pressure of in-migration is really strong.

Our next question comes from Brian Brian Russo from today, please go ahead with your question. Yeah. Hi. Good afternoon. Hi, Brian, Brian Hayes Thursday. So, you know with the assumption that the the lower end of your affirmed guidance range, you know supported by the the 9.4% return moment. You're in shareholder Equity. You have a quite a strong track record of feeding, you know, even the midpoint of your original guidance and just curious, you know wage Bowen Em, which maybe what you just discussed at and sales, I guess, you know, what are the other, you know assumptions that that you you can repeat that track record with uh, you know, cheer and and and going forward.

We've seen some articles that indicate Idaho still the place to be real estate prices up. And even if you look back in our long history when I have hit in the past, they often are delayed. What's to get here and sometimes don't get here when we've been in the major growth spurts, but certainly the initial response if people around us are struggling is they often seems like it picks up the pace of who's coming here. So I think that's probably our biggest maybe differentiator between some other places across country is to have that growth continuing and to be eating really where our focus is should be a good help through the year.

And again, the weather weather is one that it could go either way on you but at least how it sets up right now or we would take some there if it happens it. Yeah, you know Lisa's comment, you know as awful weather outlook when you take a look at that with lower lower than normal precip in a higher probability of warmer-than-normal temperatures set this up. I mean potentially again for for potential good weather outcomes, depending on how it plays out which again as we go into this this irrigation season at that potentially both. Well, especially when we're hearing from the folks on the ground the folks that are planting are are still being optimistic on the Outlook even just find some of the dairy related issues and other things so there's still an optimism out there in the farming Community long as as demonstrated by what they've been planting.

and again, the weather weather is one that

God it's so hot dry will help your irrigation sales and at the same time it will it could help the

Condition load for the residential customer in the summertime where you have higher rates or or tiered rates that accurate got it home. Okay, and that's a good point Brian Eno as well. That that shift. It is an interesting bonus that we get in that if when you do have the super hot weather and Thursday, it's a sometimes a hardship on the customer side because as the volume really grows up, it jumps them into that third. And then those rates are higher and there's some tr3e in our normal plan, but there's room for it to get bigger in a hot year for sure got and and should be clear on the on the what what is your sales forecast for June 2020. Is it the negative 2% that we saw from mid-march mid-april? And if not, what is it? And how does that triangulate to wage?

It could go either way on you but at least how it sets up right now or we would take some there if it happens it. Yeah, right. If you saw you know, Lisa's comment, you know on the weather outlook and you take a look at that with a lower lower than normal precept in a higher probability of warmer-than-normal temperatures set this up. I mean potentially again for for potentially good weather outcomes, depending on how it plays out again as we go into this this irrigation season at that potentially both. Well, especially when we're hearing from the folks on the ground the folks that are planting our our our sale be an optimistic on the Outlook even just find some of the dairy related issues and other things so there's still an optimism out there in the farming Community as as demonstrated by what they've been planting bulbs.

God it's so hot dry will help your irrigation sales and at the same time it will it could help the air conditioning load for the residential customer in the summertime you have higher rates or or tiered rates that accurate correct? God and and Brian, you know as well that that shift p it is an interesting bonus that we get in that if when you do have the super hot weather and it's it's it's sometimes a hardship on the customer side because I am volume really grows up. It jumps them into that third. And then those rates are higher and there's some tier-three that's in our normal plan, but there's room for it to get bigger in a hot year for sure.

Uh, the the Moody's Outlook that that was quoted earlier in the in the comments.

Well from a planning phase that that number that's north of two is more customers coming in and and certainly customer growth is clipping right along as you see it doesn't appear to be slowing on the load side. It's more in the between 1 and 2 range, you know say 1 and 1/2 or just in terms of planning wage it that's the part where we have had a lot of growth we have put in a lot of installations. We have a lot of everything from homes to businesses that have come in and I think we feel like there's a little we've always the last few years done what we expected and maybe a little bit better but it feeling like at some point this has to jump above our line. So that would be another break out liar that if this is the year we get more on than we maybe had any original our original plan that that could be a help to

Got and and to be clear on the on the what what is your sales forecast for 2020? Is it the negative 2% that we saw from this month March mid-april? And if not, what is it? And how does that triangulate to the the Moody's Outlook that that was quoted earlier in the engine comments. Well from a planning phase that that number that's north of two is more customers coming in and and certainly customer growth is clipping right along as you see it doesn't appear to be slowing down on the load side. It's more in the between 1 and 2 range, you know say 1 and 1/2 or

Got it. You clearly the the the Idaho Power rate structure in mechanism differentiate you from from your Regional peers, but what about you know, a bad debt expense and other sensitivity that you know, some of your peers have been exciting as as headwinds, you know, the guidance or margin wage, you know relative to to you guys. It doesn't seem too bad or even you know through June you have a full reopening at that time.

Just in terms of planning. That's the part where we have had a lot of growth. We have put in a lot of installations. We have a lot of everything from homes to businesses that have come in and I think we feel like there's a little we've always in the last few years done what we expected and maybe a little bit better but it feeling like at some point this has to jump above or line. So that would be another outlier that if this is the year we get more on than we maybe had any original our original plan, that could be a help to

Got it, you clearly?

Brian it has certainly what we've seen through March and the initial indications of of what who's using power and everything in April. We're not seeing numbers there. We would not say that we don't believe it could get higher certainly during the 08 recession. It took a lot longer because it was a drawn-out recession, but it off our bad debt screw a lot and they were they would be several million above what we we have in our current plan. And those are the kind of things as we look at what levers might we we employ we can find things to help offset some of those if it goes to some unprecedented level that we haven't seen that that's why we filed those orders with the the states that we you know, we wouldn't be Beyond looking for help if if those kinds of things happen, I mean, I think even our commission appreciates that we don't initially look at that as the the answer if we can solve it ourselves off.

The the the Idaho Power rate structure and mechanism differentiate you from from your Regional peers, but what about you know, a bad debt expense wage and other sensitivity that you know, some of your peers have been a sighting as as headwinds, you know, the guidance or margin I should say, you know relatively to you guys. It doesn't seem too bad or even you know through June assuming you have a full reopening at that time.

Do that. So I

we want we filed for the opportunities on some of those things but

That's the part. It's it's really hard to say that we know exactly where it is. Cuz we just don't Brian to your point your point like you've heard from others. We have headwinds with bad debts off, but we just don't know right now what the extent of that had went is, you know, as we saw through the first quarter it was not really, uh, didn't hit didn't really register on the Range but we we we do expect that they'll be some some headwinds there, but we just can't tell you what it is right now.

Do that. So we want we filed for the opportunities on some of those things but

And and it just on the deferral mechanism other than the staff, I guess letter or filing to set up a procedure schedule an Idaho there been any movement in Oregon yet.

That's the part. It's it's really hard to say that we know exactly where it is. Cuz we just don't Brian to your point of view points. Like you've heard from others. We have headwinds with bad debts off, but we just don't know right now what the extent of that had went is, you know, we're you know, as we saw through the first quarter it was not really, uh, didn't hit didn't really register on the Range but we we we do expect that they'll be some some headwinds there, but we just can't tell you what it is right now.

We we we you know, we filed in both States and Tim is here. You give us an update on the Oregon fees no movement on that but faith is important to note that in Oregon Data. The filing is is the trigger for when the the deferral can begin. And so that that starts the clock in Oregon office. But as far as the process, Idaho as you pointed out

And and they're just on the deferral mechanisms other than the staff, I guess letter or filing to set up a procedure schedule an Idaho there been any movement in Oregon home yet.

We we we you know, we filed in both States and Tim is here. You give us an update on the Oregon piece no movement on that but faith is important to note that in Oregon Data. The filing is is the trigger for when the the deferral can begin. And so that that starts the clock in Oregon month. But as far as the process Idaho, as you pointed out has adopted a procedural schedule yet to see one from Oregon. Okay, God and it just left off the dividend policy. Is that unchanged, you know recommending to the board greater than 5% increases and the board usually makes that decision in September of each year. Yeah. We we we are on that schedule we continue to be on that schedule as we go into September and we will have that conversation with them at that point.

Okay, great.

I'll let others ask questions. Thank you very much. I appreciate it.

In our next question comes from Chris only house from cyber Williams, please go ahead with your question. Hey everybody. How are you today? Chris good. Hey Darrell, Thanks for all your help through the years. They're really appreciate it. Thank you, Chris. Obviously, you're very oriented or service-oriented is is that where you're really seeing some firmness is because of the egg and and the importance of those Industries. I'm going to let bullet Adam kind of kind of just try him in on that cuz he's been staying pretty close to this. So Adam you want to chat about that? Yeah hate Chris. Yeah. No, I think you're right. We we feel pretty good about the food processing and packaging companies the ones we've been able to chat with or moving ahead and most of them kind of full steam ahead and as I mentioned before

The tag looks strong to you know, the farmers planted their crops optimistically so we view this is is positive for us. I mentioned before the season actually started off early and we think the water is there and and they're out there growing the crops. In fact, I just had a call yesterday with some of our customer a grabs and kind of across-the-board across the region again, they they felt good about where we were at. So I think you're right from our perspective. It's a it's a strong point.

They just picking that up from the reporting websites that they can look at or you know, how do they understand what the irrigation potential is?

In terms of water. How much is available? I think or or Energy Water? Yeah, that's that's the state and the Bureau of Reclamation. There's an incredible amount of communication that takes takes place between the egg and the state on a on a very regular basis communicating them to what the projections are. The forecasts are for water. So and it's done early on everybody's focusing on what snowpack looks like across the basins that that were the snake collects from and so the ad guys are doing this early on in constant communication with the state and they've been doing this a long time. And so those channels are pretty good are really good actually as to how they communicate back and forth so they get an idea as to what they're going to have the opportunity which to do which drives what what you know, that drives what it is. They're going to put in what they're going to plant year-over-year. There's a lot a lot of communication that goes on between the state and the and and the community and Darryl, this is Adam also sad that wage.

Education has been made to the farmers it.

Here and again, they feel pretty good about where they're at from a water perspective.

and one last thing

as far as the guidance goes

caller about what you're anticipating in terms of the fourth quarter and have you reflected in your your guidance some sort of expectation that there's a flare up in the fourth quarter off.

No, I don't I guess I don't I know we've had some issues in the past with how people are where they estimate. You know, how long you guys do your quarters? We've always kept our guidance to annual guidance and I'll fully admit. We have some nuances that that impact that for instance odd Oddity of it. One of them is that when we are having think that we're going to be in the lower in our earnings band we may end we have booked credits in in first quarter that will suck the rest of the year because those credits come in earlier and they actually make first quarter earnings a little higher and higher up. Are you talking about coming back in the second half of the time I'm thinking about are you reflecting in the guidance? You know, you're talking about one to two percent for load. Is that incorporating some kind of assumption about a week or fourth quarter?

Coming up.

You know at this point not not particularly, I would say it's it's more that we are on a steady, you know, we we do this rollout we factored it. In fact taking longer probably than what the minimums are. But I guess if I had to find held to me that maybe you were asking about the there was talk just I think today that would be the recovery the W and it goes down and comes back and then goes down. I think we're more factoring in just what we've seen in Prior events and at how we would cope with those sort of items with particular focus on the quarters cuz I don't know if that would hit I don't know when that hits you know it maybe that's fourth quarter for us. As you know, the bulk of our earnings wage are in the summer month. We do get a lift at the end of the year. And in that sense. It's the end of fourth quarter and we have a pretty good list at the beginning of phone number.

If the weather treat this right with some pretty mild shoulders in the middle, so it would really depend on not only just the quarter but the timing of the corner there and and I think in terms of people hitting predicting our fourth-quarter some of that's been more of a function of of missing earlier quarters in some way that we didn't get the the spread of our earnings and trying to find a normal year that you can look up to say what what should it be in it in a normal year if we have a hot summer it's going to make the summer quarters bigger and you know, we've years when we've hit sharing and giving money back to customers fourth quarter can be really really low because we kind of stopped accruing a lot on the shareowners side and it starts to all go to customers. So we have some anomalies there with our bread between quarters. But at this point we're just saying we still feel like our guidance is the right guidance. We're reaffirming what we we came out with at the end of the year.

Okay, great. That's helpful Darrell. Hope you get to take a retirement vacation at some point in the future canceled one so far.

One's gotten canceled will see someday. All right. Well, thank you guys. Appreciate it. Thank you Chris. Thank you.

Add a final opportunity to press star and 1/2 signal for a question will pause just for a moment.

And ladies and gentlemen that concludes our question-and-answer session for today. Mr. Anderson. I'll turn the call back over to you. Thank you, and thank you all for participating on our call today. I would like to invite all of you to participate in the 2020 annual meeting of shareholders, which will be held on Thursday, May 21st at 10 a.m. Mountain time to safely practice social distancing. This year's meeting will be conducted virtually. April notice has been sent out to shareholders with instructions on how to attend virtually and we also plan to issue a press release in a couple of weeks with instructions on how to listen online via our website. We look forward to sharing updates from 2019 and listening to and responding to our shareholders questions and comments. We appreciate your continued interest in our Corp. We have found you guys. Have a great rest of your day and stay safe. Thank you.

Ladies and gentlemen that concludes today's conference call we do thank you for participating. You may now disconnect your lines.

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