Q3 2023 IDACORP Inc Earnings Call
Welcome to Ita Corp's third quarter 2023 earnings conference call. Today's call is being recorded in our webcast is wise a replay will be available later today and for the next 12 months on the Ida Corp website.
Need assistance at any time during the presentation. Please press star zero on your phone.
I will now turn the call over to Amy Shaw director of Investor Relations compliance and risk.
Thank you good afternoon, everyone. We appreciate you joining our call. This morning, we issued and posted to IR website, our third quarter 2023 earnings release and the associated Form 10-Q, the slides that accompany today's call are also available, but I had a quick website, we'll refer to those slides by number throughout the call as noted on.
Slide two our discussion today includes forward looking statements, including earnings guidance spending forecast and regulatory plans that reflect our current views on what the future holds but are subject to 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 grow.
And Chief Executive Officer, and Bryan Buckler them, Idaho, Senior Vice President and Chief Financial Officer. In addition to Lisa and Brian We have other members of our management team available for Q&A session. Following our prepared remarks.
Slide four shows our quarterly financial results I, just want to third quarter of 2023 earnings per diluted share were $2 seven compared with 210 during last year's third quarter year to date earnings per diluted share were $4.53 compared with $4 28 for the first three quarters of 2000 and.
At least 2022.
The year to date results include a total of $7 5 million of additional tax credit amortization under the Idaho regulatory stipulation, which is the amount we reported in the first half of the year today, we raised the bottom end of our previously issued full year 2023 earnings guidance by 10 cents to a range of <unk>.
$5.05 to 515 per diluted share, which includes our current expectation that Idaho power will use up to 10 million of additional tax credits available to support earnings at the nine 4% return on equity level in the Idaho jurisdiction under our current Idaho regulatory settlement stipulation, which is down from the 15.
We anticipated at the end of the second quarter now I will turn the call over to Lisa.
Thanks, Amy and thanks to everyone for joining us today.
I want to begin by addressing three main areas. This afternoon customer growth infrastructure to address that growth and rate cases.
I'll start by highlighting the strong growth that continues across our region.
You can see on slide five we've had two 3% customer growth since last year's third quarter.
This growth is in line with our with the trends we've seen for several years now it is readily apparent throughout our service area. There continues to be a number of tower cranes visible near our headquarters in downtown Boise 26 throughout the treasure valley area to be exact and construction is booming.
Can see on the slide that Moody's GDP growth.
Their growth forecast is.
We're working hard to ensure we continue supplying our growing customer base with a safe reliable affordable clean energy they depend on every day.
On the large load frame the Stoke company's facility in Nampa went live in October and will ramp up operations over the next several months.
In addition, several dairy biogas projects in the Magic Valley completed construction and started operation in Q3.
Interest remained steady from customers across a range of industries, including food processing manufacturing and data centers.
We're continuing to work with meta on its innovative datacenter in kuna and on the Micron expansion, which had its first official concrete pour earlier this month.
Micron is also making a strong push to recruit its suppliers to locate facilities near their expansion, creating the potential for additional load.
I'm happy to provide an update on the general rate case, we filed in Idaho on June one.
Parties in the case of agreed to a settlement of all issues in the K, We filed a settlement stipulation last week with the Idaho Commission and some of the details are included on slide six.
If approved the stipulation would provide for an increase in annual retail revenues of $54 7 million.
We're 4% to 5% on average for Idaho customers effective January one of 2024.
That's in addition to moving the recovery of certain costs from other regulatory mechanisms into base rate and Brian will touch on the details of that in a moment.
We believe the settlement demonstrates our continued constructive regulatory environment in Idaho as a reminder, this is the first general rate case, we filed in 12 years.
Our case focused primarily on the it infrastructure investments we've made to serve our customer base, which has grown by 23% since our last rate case filing.
As we look forward to our capital investment plans over the next several years, we anticipate more frequent general rate case filing. We also expect to file a general rate case in Oregon next month.
In another positive regulatory outcomes, the Idaho Commission recently approved Idaho Power's clean energy Your way program. This program expands clean energy options available to our customers, including our construction offering that allows industrial customers to partner with Idaho power to develop new renewable resources through a long.
Term arrangement.
And micron have agreements in place to participate in this program, which will help them achieve their clean energy goals. While also complementing our goal of providing 100% clean energy by 2045.
We've also seen interest from others as well.
As part of our efforts to meet customer demand and keep up with growth. We recently filed our 2023 integrated resource plan, creating a long term resource plan is an increasingly complex process and we remain committed to developing a plan that keeps our system reliable, while minimizing price impact to our customers.
Filed in Idaho, and Oregon every other year. The IOP offers a 20 year forecast for energy demand in our preferred portfolio of resources to help us meet that demand.
Slide seven summarizes some of the notable changes from our 2021 to our 2023 IOP.
I think the IOP is worth that review and in particular, the preferred portfolio that came out of that process.
We've been busy with infrastructure development in the IOP illustrates what we expect to be focused on for energy and capacity in the coming years.
One infrastructure edition in particular I want to highlight is the gateway west transmission line.
And the 2023 IOP the need for at least one segment of the transmission line moved into our five year action planning window, and we're now working with our partner Pacific core to move that forward.
This is in addition to the Boardman to Hemingway transmission line, where we have pre construction and land acquisition activities happening and construction is expected to begin in the first half of 2024.
Believe both lines will be key to maintaining reliability across our system, particularly as we move towards a clean energy future.
Beyond transmission, we're making progress on our other energy and capacity resource procurement and we've included slide eight summarize our status.
For the Rfps for 2023 to 2025, we have installed 120 megawatts of the 293 megawatts of company owned storage that resulted from those RFP.
Evaluations continue on the Rfps, we issued to meet approximately 350 megawatts peak capacity needs in 2026, and 27, which we estimated could be met by up to 1100 megawatts of variable resources.
We expect some of that energy may be transmitted by <unk>.
We received over 180 proposals, including Idaho Power's own self build projects and are working to develop a short list we.
We expect to make the awards in the first quarter of next year.
Although quickly that FERC recently revised its schedule for issuing the supplemental environmental impact statement required for re licensing the Hells Canyon complex.
We continue to feel positive about the progress we've made toward re licensing, but this development likely pushes back of new long term ohanian license until 2025 or later.
And last but not least as I reflect on the summer I'd like to thank our teams for their great work, maintaining reliable service for our customers through a plenty of 100 degree day.
Our employees continue to drive positive results for our customers our owners and our company.
Been a very busy year with our typical workloads, increasing with the general rate cases transmission development reliability projects security enhancements and a host of other objectives, we've been pursuing our remarkable employees that powered through it and they continue to impressed and inspired.
With that I'll hand, the presentation over to Bryan for an overview of our financial results and some additional detail on our pending rate case settlement right.
Thanks, Lisa Hi, everybody.
On slide nine which has a reconciliation of the third quarter's results compared to last year's third quarter.
Customer growth of two 3% increased operating income by $4 6 million.
Our residential customer growth rate remains strong at two 4% over that time period, which is slightly up from a quarter ago.
Usage per customer decreased operating income by about $17 million in the third quarter compared with the third quarter of last year higher precipitation in more moderate temperatures led irrigation customers to use less energy to operate their pump and they cause residential and commercial customers to use less energy for customer for cooling.
The impact of the decrease in sales volumes per customer was partially offset by revenue from the fixed cost adjustment decoupling mechanism for residential and small commercial customers.
Transmission Wheeling related revenues decreased comparative operating income by $2 $8 million, mainly due to less volatile energy prices in the western U S, which reduce transmission system demand in revenues.
At the same time that reduce volatility help with power supply costs further down on the table.
O&M expenses were lower due to our ongoing focus on operating efficiently in a couple of other things one was the impact of lower expenses from scheduled cyclical plant maintenance with last year, having an ATM degree high amount of that maintenance. The other was the timing of regulatory deferrals.
Equally offsetting the O&M savings was depreciation expense, which increased by $4 9 million over last year's third quarter. This isn't surprising given our infrastructure work on the resulting increase in plant in service and we expect that to continue at an elevated rate with our increased capex going forward.
Other changes in operating revenues and expenses increased operating income by $5 $3 million.
Primarily due to lower property taxes, and a decrease in net power supply expenses that were not deferred for future recovery in rates through power cost adjustment mechanisms.
Lower wholesale power purchase volumes and prices decreased net power supply expenses compared to the third quarter of last year.
Nonoperating expenses increased slightly on a net basis the allowance for funds used during construction increased as the average construction work in progress balance was higher.
Also interest income increased due to higher interest rates on our cash and investments.
These increases were partially offset by higher interest expense on long term debt.
Finally, we didn't report any additional amortization of accumulated deferred investment tax credits in the third quarter and based on our current expectation for the full year. As a reminder, we have a regulatory mechanism that allows us to use a portion of Idaho Power's tax credit balance to help lift Idaho Power's earnings up to a nine 4% return on yearend book equity.
In the Idaho jurisdiction.
At the end of the second quarter, we recorded $7 5 million of additional A&D ITC and as Amy mentioned, we now expect to use up to 10 for the full year. So we didn't report any additional tax credit amortization in the third quarter, we already had it on the books.
Combined with nominal impacts from other added Corp subsidiaries, we saw $1 $1 million decrease in net income over last year's third quarter, but for the year to date, we saw $13 million increase in net income over the first nine months of last year.
Idaho Power's group closer to the company's target debt to equity ratio compared to where we were at year end as I've mentioned before our goal is to maintain our current stable credit ratings as well as the capital structure near 50 or 51% equity.
All in the face of our Capex plans over the coming years.
And to do that we are still planning to blend debt and equity issuances, we don't have any sizeable maturities to address in the next few years, which helps on the debt side and also with our credit ratings.
Also our September debt issuance enhanced our cash cash position for the near term and our rate settlement. If approved would help with cash flows and that increases our flexibility and our ability to act opportunistically on our equity issuance timing and approach.
Turning to slide 10 cash flow from operations improved after starting the year seeing the effects of regulatory lag from abnormally high power and fuel costs as we discussed on the last call. Starting on June 1st we received approval from the Idaho Commission to collect a $200 million increase in power supply cost from customers.
Higher power and gas costs over the past year with collection from June <unk> of this year through May of 2025 that rate change has helped improved cash flows from operations as has moderation in power supply cost volatility as the year has gone on.
Again, the ratio from the Idaho rate case settlement, assuming it's approved would also benefit cash flows.
Looking back in September at a Corp, 's Board of directors approved a roughly 5% increase in recorded quarterly cash dividend.
<unk> common stock from 79 to 83 per share they have approved a 177% increase in quarterly dividends over the last 12 years, I think thats reflective of our company's commitment to its owners while at the same time, we've maintained some of the lowest energy prices in the nation for our customers.
As Lisa mentioned relating to our Idaho General rate case filing parties in the case of agreed to a settlement of all issues. If you joined us late or summary of the pending settlement is on slide six.
The stipulation provides for an increase to annual retail revenues of $54 7 million.
Effective this upcoming January one.
That's net of some transfers of cost recovery of base rates, including $168 $3 million from current PPA rates and $3 5 million from the energy efficiency rider.
The settlement includes an ROE of nine 6%, which was that our overall rate of return at around seven to four 7% with the non specified capital structure cost of debt.
The mass the vast majority of the additional reduction from our original ask as regulatory lag so not capital disallowances, but instead delayed collection that results from Idaho to use of a historic test year with only certain known and measurable adjustments, including using a 13 month average on rate base and a retrospective look at labor costs.
A part of it is also moving certain items mechanisms like riders and deferrals for certain costs.
That lag and collection given our Capex outlook is what will likely put us in front of the commission with another general rate case or another form of rate request potentially as soon as 2024.
There is no stay out provision in the settlement. So it can accommodate an upcoming request.
One important attributes to the settlement that I want to highlight pertains to the ITC mechanism. The sharing line for the mechanism will now be at nine 6% in the ADC usage, Mark will be reset to 95% of that which is a 91, 2% return on yearend equity in the Idaho jurisdiction.
Under the settlement the investment tax credits generated by the batteries were installing in 2023 would be added to the existing mechanism, that's probably around $50 million and new itc's added to the mechanism as.
As we contemplated in our original filing a portion of those credits are intended to cover the revenue requirement for those batteries as the rate mitigation measure.
Then under the settlement, which is a notable change from our original applications. The mechanism would no longer have a cap on the amount of credits that Idaho power could use in any particular year. So the current cap of $25 million of additional <unk> per year would be removed.
To accommodate the battery storage revenue requirement and also that help provide stability to earnings as we continue our elevated capex and work through the regulatory cycle to recover on that Capex, all while feeling the effects of higher depreciation and financing costs and the regulatory lag on it is by the historic test year.
We view the ITC mechanism component is a particularly constructive outcome from the settlement.
The settlement also the rate design element to it where the residential service charge will increase from $5 to $15 per month over two years.
And the small general service charge will increase from $5 to $25 per month on January one this Jamie change helps with more timely and accurate recovery of our fixed costs.
The settlement went to the commission earlier this week during our scheduled decision meeting to reset the case schedule. The next steps in the process include testimony from the parties in the middle of this month with the opportunity to reapply if necessary.
Additionally, the commission scheduled customer and technical hearings for the last week of this month, we still expect the case will conclude by the end of this year and new rates would be effective January one of 2024.
Slide 11 shows our updated full year earnings guidance and key operating metrics as Amy noted, we expect <unk> earnings this year to be in the range of $5 <unk> to $5 50 per diluted share with the assumption that Idaho power will use up to $10 million of additional investment tax credit amortization, that's down from our estimate of $15 million last.
<unk>.
We expect results from the final quarter of the year to benefit from continuing customer growth O&M O&M expense management, and hopefully a sustained moderation in power supply cost.
On the other hand as I alluded to earlier, we expect higher interest and depreciation expense to continue through the end of the year from our Capex investments and plant going into service.
We can also see potentially lower transmission wheeling related revenues compared to the fourth quarter of last year. When we saw the western energy markets with some abnormal volatility.
We continue to expect full year O&M expense to be in the range of $385 to $395 million with much of the expected savings related to less scheduled plant maintenance compared to last year and our typical cost management efforts, we're on track with our lower O&M, thus far this year.
We expect this year's capex spending to be slightly higher than the than our initial expectations. So we've increased our estimate by $25 million to a range of 675 to 725 million.
And then looking past this year, we will give a longer term capex forecast update on the fourth quarter call in February but our current Capex budget for 2024 is trending higher than we anticipated in February of this year and we're expecting it to be in the range of $850 to $950 million as of now which is up from our earlier estimate of 800 to 800.
$50 million.
We think that theme of higher Capex will continue in subsequent years as we address growth in our service area. We're currently estimating that our Capex for 2025 through 2027 will land in the range of two to $2 $5 billion over that three year period, which is a pretty significant increase in what we included in our estimate last quarter.
Which was one five to $1 $7 billion for that three year period.
Earlier estimates don't include the upcoming RFP results for 2026, and 2027, so any owned resources coming out of those rfps would be incremental to the amounts I mentioned booking.
We'll continue to refine our plans and budgets during the fourth quarter and into early next year and plan to provide an update on our Q4 earnings call, which is our usual cadence.
Finally, given our most recent forecast of hydro power operating conditions, we've tightened our hydro range as we move further into the final quarter of the year.
So that's a lot and I'll stop there and we're happy to address questions you might have.
We are now ready to begin the question and answer session. If you'd like to ask a question. Please do so by pressing star one on your phone. Please ensure your mute function is turned off before you ask your question and we will take as many questions as time permits on a first time basis once again that is.
Star one on your phone to ask a question now.
Do you have a question and Nick you are we ready to take our first question.
Sure we are.
Alright, great. So your first question comes from the line of Paul Zimbardo with Bank of America.
Paul Please go ahead.
Hi, good afternoon, Tim.
First very well done on the salmon are nice to see and.
Just a quick fashion as well.
You'd want to probe into that a little bit and I think Brian you mentioned related to the kind of the.
Nine one level for amortization is that kind of what we should expect on an earned return basis.
Execute on the high build cycle and more lag.
Or are you able to use the sharing credits alright, sorry, the Ada ITC to push you up towards that nine sharing level, which is if you could help unpack kind of expectations, there and how that mechanism works with lag.
Yes, <unk> got depreciation and interest expense caused by Capex. It does in fact create some lag there.
The 80 ITC mechanism function such that we can use the tax credits to get up to the $9, 1%, 2% level. If we're above that there is a bit of a dead band until you get to the sharing level at nine six.
So we will come out with guidance in February but in a year like this one where we suggested that we may be using additional 80 ITC.
It would look like we would be trending towards that lower end because of the use of 80 itc's. So if we if we come out next year with guidance that includes the use of any eight eight ITC. It means we're targeting that nine 1%, 2% level remember that 91, 2% level moves with year end book equity from a modeling perspective for you.
To look at that when trying to estimate year end results.
Yes, Okay. That's what I thought just wanted to be clear on it.
And just going to the the IRB for one second I know you kind of characterize that Ms tire Kickers in the past given how fast the.
The backdrop of an evolving.
Would you anticipate a need for an acceleration of the next IOP just kind of how how current is the latest IR ERP. If you get the question.
Well certainly if you recall that we delayed the submission from June to September really for that very reason is to make sure. We had the most current information given how quickly things are changing I will also say that it never really seems like we ever stop.
Planning.
It seems like we are in constant analysis for one issue or another so I don't see that the cycle, which we submitted to the PUC will change, but ongoing analysis of needs that come up in between IOP, We certainly do that frequently.
It's Adam anything you would add to that no I agree I mean in the past when we would file these they would kind of be good for a couple of years now.
<unk> growth is looking and the way our resource needs are looking.
Our updated honestly monthly feels like sometimes even weekly depending on what we're seeing in the market.
The other thing to deny or PV, you might have noticed as we had kind of a large load scenario, where we added what might happen from a load and resource perspective, if certain loads came to fruition and so I think thats something to look at too as we start to see these loads come about we're going to need to make.
Some changes we've also had a fair amount of inquiries on the data center side of things as you know these are pretty large loads.
If any one of them come into play it will change the way, we're looking at our resorts future.
Okay, Yes, I did notice that one great and then the last one kind of big picture pulling it together assuming rate cases approved is settled.
Do you have any plans to finally move towards our longer term EPS CAGR.
That's a question we get frequently and it's one that that we will look at we certainly haven't really.
So we were able to do that but Brian any color you would add yes, I'd say one thing to look at is when we published in February we had a rate base CAGR in there when we had our capex forecast put out.
And we looked at that rate base, CAGR and really executing in the regulatory arena on that as an avenue towards looking at what the prospects are for the future of the company.
We would rely on that more so than our long term EPS forecast, what we what we're tasked with doing is going through the regulatory cycle and really getting fair results out of that so for now we will execute on our capex plans and work to get that into rates as we've talked about in the past, we're probably headed into a series of cases or a series of cases with.
Certain types of mechanisms, whether they'd be trackers or otherwise the doors are open for those types of things at this point to at least have conversations and as we do.
We will start to look more like a normal utility in the rate cycle and really execute on that.
And for in the interim we do still have the mechanism out there that points to the year end GAAP book equity and Thats another way to look at forecasting.
Growth in the company's EPS.
Okay, Yes, all very good and again, thank you for at the time well done across the board.
Thanks, Paul.
Your next question comes from the line of Chris Allen with Siebert Williams.
Chris. Please go ahead, hey, everybody how are you.
Hi, Chris Hi, Greg.
<unk>.
The increase in the guidance does that tell us that.
Third quarter was above expectations, and what kind of ways.
Actually it was it was a little lower than planned and it's been a series of other things for the full year to date.
It is higher than expected and Brian do you want to hit some of those details.
Yes, I can touch on that I mean, as we look at as we look at the third quarter. If you saw your irrigation loads. They didn't really come in where they typically would and if you compare them to last year's third quarter last year's third quarter was also low so from a from a sales perspective to that customer class.
It wasn't a strong year.
Were bolstered by a few other things like customer growth the bridger rate change from a year to date perspective has been been beneficial and we thought transmission Wheeling.
Yeah.
<unk> is in a good spot and you think you can see there were lower year to date O&M than we were last year and that was one of the things we mentioned a while back that we would really be focused on this year. So that has been materializing for us, but the uplift in the guidance.
Some of those factors just outweighed the lower sales to industrial customers. We did have some positive results on the tax side as well one thing to note, though is that our results for this year do you have $7 $5 million of Adi Itc's. So from a comparable year over year basis didn't have don't have comparability there. So.
If you take an average fourth quarter just as an example, it does get you sort of into the range that we have out there.
Right now.
Okay.
The IOP has.
A very significant.
Resource requirement and their preferred portfolio can you give us any insights or what's your philosophy is today in terms of thinking about one versus procured resources.
Out of that preferred portfolio.
Yes, great question.
We have certainly.
There's a number of things that drive our selection of our preferred portfolio, obviously lease risk lease cost.
And certainly we look to own some of that.
I am not sure we expect to own all of it. So that's why we do competitive bidding and as required by our regulators and so we try to compete in those and we've been.
Successful with some of them and some of them we have not been the winner of those so we let that process really sorted out once we've decided that our preferred portfolio looks like anything that U S.
Yes, Chris this is Dan.
<unk>.
One of the things you've seen over the last three years from 2023 to 2025, we've got about 443 megawatts of energy storage projects that have come into play. We've competed for each of those and at the end of the day, we have been successful for 293 of those megawatts.
As you look at the 2006.
<unk>, we have three benchmark.
We put into that that hopefully we will find out if we were successful there over the next couple of months. So our goal absolutely is to compete where we can with these rfps I think another thing to keep in mind is it's not just resource growth that youre seeing in the IRB.
Our transmission is a big part of that too and you probably noticed the gateway West moved forward from really the 2035 ish timeframe to the 2029 timeframe for one of the segments, which is a pretty notable investment and then you have segments at nine and 10 also midway through that decade.
You also have a project called southwest entered tie them within our RFP that the transmission project that we're also evaluating and looking to see if there is opportunities for us there. So I think when you look at in terms of our growth you look not only at the batteries in the solar and the wind as it could come to fruition, but also the transmission, which one of our goals.
To be a major player in the transmission game, we're well situated sitting in the middle of the market and feel like this is a good opportunity for us as we move forward.
One thing I'll add Chris and I mentioned this in my in my remarks earlier when you look at the 26 2027 timeframe.
We don't have any owned resources from the RFP as shown in that new updated capital stack that we have in the 10-Q.
The two five to $2 $7 billion number so there's a lot of capex. There is diversified across the board as to what that Capex is comprised of but any incremental additions from winning those rfps would add to that capex out in the future.
And then I began.
Just reminding me to that what I, just mentioned and Chris does not include the conversion of coal to Bridger units, one through four and all units one through too as well so you'll see those in the IRB to and also have.
And growth benefits there.
And that was my next question relative to the.
Q4 rate base number of 11 plus percent that you guys quoted.
Brian you just sort of added to the near term Capex outlook.
You put out the IRB.
Should we be expecting or.
Is it reasonable to expect that your updated rate base growth when you come out with your updated capex is going to be on the higher side.
If you look at it from a CAGR perspective, what we put out in February had lower numbers in it. They also had some additions more on the front end and the backend so a lot of what we're talking about.
We will add additional incremental spend in 'twenty six 'twenty seven and then will be tacking on 28, we'll do that in February.
The ultimate CAGR on that will depend on what the numbers are in 2028, but there is a good possibility that that CAGR could actually be larger when we update our numbers in February we're going through the capital budgeting process as we speak.
Okay, that's great.
Thank you so much I appreciate it.
Alright, Thank you Chris.
Your next question comes from the line of Brian Russo with Sidoti and company.
Ryan go ahead.
Hi, Brian.
Hi, good afternoon.
Hey, just to follow up on the.
Rate base CAGR or.
The capex.
25 through 27.
If you now.
On average for those through use of $2 to $5 billion versus the prior $1 6 billion I mean, that's a 40% increase.
So I suspect.
Yes.
But the easy math.
Like there is quite a bit of upside to that 11% rate.
The rate base CAGR and then I'm curious what is the what's the what's the incremental capex for.
Yes, I think Youre right I think youre right on that growth rate and the Capex comes from a number of different areas. So it's things like the batteries.
Transmission construction.
Some gas plant work a number of other projects. One is as you saw in the AARP potentially accelerating gateway west into the near term window. That's an adder to that there may be other transmission projects that get built into that so really it's a pretty diverse mix of projects that add that up some of it is actually from price increases.
This project scope changes that we have for projects that were originally contemplated and then a lot of that is also from additional projects. When we do our capital budgeting budgeting, we usually have a pretty good look out for three years.
So we're updating that and now bringing in some of the further years out so years four and five in our in our window are starting to fill up dramatically, including from some of the items that I mentioned.
That's a great list this is Adam.
Also you have to.
Keep in mind that the 'twenty one <unk> did not include some of the large loads that we're seeing now so everything that Brian mentioned is just really needs to be put in place to serve those those loads and others. So the growth has been significant from a large load standpoint.
Okay, Great and then just thoughts on micron.
It was nice to see the press release, a couple weeks ago I guess.
Clearly broke ground or are these two on schedule.
In relation to what your forecasts are and the IOP.
<unk> on micron trying to.
Truck suppliers it seems like that could create a nice multiplier effect, which could probably increase your residential customer growth forecasts.
Yeah, It certainly could and we're hopeful that it does it's Chris.
And as far as their schedules of certain parts of kind of continue to move around there.
Are exposed to the same sort of construction challenges that everyone is.
At this point, though.
As far as we know things are on track.
We haven't this is Adam I guess, a couple of things on that one is a lot of jobs I think 17000 indirect jobs 2000 jobs related to this specific facility $15 billion of fuel. If you go out there and the project is absolutely massive and they're doing a ton of work right now and frankly, we have a team dedicated to them because we.
We're doing a ton of work to support it so.
I've always said their production was going to start up in 2025 and will ramp up over time and frankly, if you go out there and thats, what it looks like Theyre doing theyre, making a ton of progress and we're just excited to be part of it.
Okay and then it's my understanding that the site excavation has already begun.
So I think that that project Hudson.
And stops over the last year, but that seems to be moving forward.
According to your plan and the RFP.
Yes, yes, and if you maybe you noticed this they recently had a social media post that just indicated in October that they are ramping up our construction kind of full bore now so.
They took a little bit of rate for a redesign in the facility and now they look like they're going ahead pretty quickly. They've also entered into some of the solar contracts that we've mentioned, which just shows that our commitment I think to this area.
Okay, Great and then just maybe lastly, the boardman to Hemingway.
I think you mentioned earlier that you looked to break ground or start construction in the first half of 2024, I think thats being pushed back from maybe a prior target by year end 2023.
I'm just curious are you running up.
Yes.
Deadlines.
<unk>.
Further delays in this project.
<unk>.
What type of capacity that can be brought into your service territory.
Serve your customers included in the RFP.
Yes. This is Doug we'd hope you are right to break ground in October.
At the end of the day, what we're seeing is a little bit of delays, we have the permits but along the way you have to get notice to proceed and you have to get those from both the department of energy in Oregon, and the BLM and we've seen a little bit of delays in terms of their review of those items and so we're meeting with them weekly or trying to get that to move ahead, we've been <unk>.
<unk> for this June 2026 deadline.
Deadline tablets in service right now.
Optimistic for sure we're working towards that goal.
It is possible that it could be pushed out.
And our more than November timeframe based on some of these changes at the end of the day, we have a 2026 RFP 2027, RFP that were evaluating and if we feel like that push from June to November is a possibility that we will increase what we need in 2006 2027.
I think it's beneficial is the conversion of <unk> is right around that same timeframe. So that will give us some help in terms of unneeded megawatts there.
Okay got it great. Thank you very much.
Thanks, Brian Thanks, Brian.
Our next question comes from the line of Ross Sandler with UBS go.
Go ahead.
Hi, Ross.
Hey, Ralph Hi afternoon.
So I just I just wanted to poke at this 25 to 27, Capex increase a little bit more.
Just on the base plan increase and then if you have a lot of success in the RFP process and get a lot of owned generation in the plan out there how do I, how do we think about the balance sheet. How do we think about funding that capex increase.
Go ahead, Brent yes, so some of that depends on the nature of the awards that we would receive if we were to get some of those <unk>.
If they were Bta's for example, sometimes the payments or lump sum near the back end or have smaller milestones along the way if theyre self builds we're funding it along the way so thats going to impact the type of capital and timing of the capital that we'll need for those projects and frankly, even just the larger capex that we have out there now we're going to have to finance and lower.
Looking to do is you see that our debt equity ratio is down to about 50% we want to keep it in that zone, maybe 51% equity. So we're just going to have to blend debt and equity going forward to stay there and into that range.
And.
I think thats, where.
We'll just have to keep.
Credit ratings and check with some of those issuances.
And then you can do that.
Update sort of on the Rfps and those ones come in.
And sort of blend that financing plans as the capex.
Yes, yes, Sir right as I mentioned, we expect to have those awards out the first part of next year or so.
We'll be talking more about that.
Okay. Thank you very much.
Thanks, Rob.
And our final opportunity. Please press star one to signal for a question and well pause for just a moment.
Alright, it looks like that is all the questions that we have in our queue.
So at this point I will hand, the conference back to you Ms Graff.
Thank you. Thank you everyone for joining us this afternoon and for your continued interest in <unk>, we'll be seeing many of you in Arizona coming up in the next week or so so we always look forward to that and I hope you all have a great weekend. Thank you.
That concludes today's conference. Thank you again for your participation.
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