Q4 2024 IDACORP Inc Earnings Call
Welcome to idle Corp's fourth quarter and year end 2024 earnings Conference call. Today's call is being recorded in our webcast is live.
A replay will be available later today and for the next 12 months on the article website. If you need assistance at any time during the presentation. Please press star zero on your phone.
Speaker Change: I will now turn the call over to Amy Schwalm, Vice President Finance compliance and risk. Please go ahead.
Amy Schwalm: Thank you good afternoon, everyone. We appreciate you joining our call. This morning, we issued and posted to our corporate website, our fourth quarter and year end 2024 earnings release, and our Form 10-K. The slides referenced during today's call are available on <unk> website as noted on slide two our discussion today includes forward looking statements.
Including earnings guidance spending forecast financing plans regulatory plans and actions in estimates and assumptions that reflect our current views on what the future holds all of which are subject to risks and uncertainties. These risks and uncertainties may cause actual results to differ materially from statements made today and we caution against placing any undue.
Speaker Change: Reliance on forward looking statements are cautionary note on forward looking statements and various risk factors are included in more detail for your review in our filings with the Securities and Exchange Commission as shown on slide three we have Lisa grow out of Corpus President and CEO and Brian block them adequate senior Vice President CFO and treasurer presenting today.
Speaker Change: I'm excited to introduce a new member of our Investor Relations team, who some of you have already met in December we promoted John Wunderlich to Investor Relations manager John has been with the company over 12 years in various roles within finance, including our financial planning and analysis team is depths with the company along with its strong technical background and it's impressive financial modeling abilities our fans.
Speaker Change: <unk> addition to our team. We also have other members of our management team available for Q&A session. Following our prepared remarks slide four shows a summary of our full year financial results aided group's diluted earnings per share were 550, compared with $5 14 last year. These results include additional tax credit amortization of $29 8 million for two.
Speaker Change: <unk> 24 compared to no additional tax credit amortization in 2023 today, we initiated our full year 2025 and of course earnings guidance estimate in the range of $5 65 to $5 85 diluted earnings per share, which includes our expectation that Idaho power will use between 60 and $77 million of additional tax credit amortization.
Speaker Change: Asian to support earnings these estimates assume historically normal weather conditions throughout the year and normal power supply expenses. It is important to note that approximately $25 million of our expected usage of additional tax credits related to amortization of incremental tax credits generated from Idaho Power's investment in 2023 battery storage project, which you may recall, we remove.
Speaker Change: From the revenue requirement as part of our 2023 general rate case in Idaho and was also not included in the 2020 for Idaho Limited scope case, now I will turn the call over to Lisa.
Lisa Grow: Thanks, Amy and thanks to everyone for joining our call.
Lisa Grow: We have many exciting updates for you and I will begin by celebrating our dedicated employees for their commitment to safety and for the great work, they did serving our customers and our owners well.
Lisa Grow: We're proud to share that we had our 17th consecutive year of earnings growth as shown on slide five.
Lisa Grow: And we kept our customers' lights on 90, 996% of the time, despite hot summer and increasing energy demand in fact, we set new summer and winter peaks last year.
Lisa Grow: As you can see on slide six customer growth remains strong for Idaho power at the end of 2024, we served nearly 650000 customers after experiencing two 6% customer growth.
Lisa Grow: We expect growth to stay robust as our local economy continues to outperform national trends as demonstrated by the major projects under development in our area meetings.
Lisa Grow: <unk> most recent GDP calculations for Idaho power service area, a forecast growth of four 5% in 2025 and three 7% in 2026. In addition, Idaho, Idaho as total Labor force surpassed 1 million workers for the first time in December 2024.
Lisa Grow: We continue to see strong interest from businesses looking to locate and expand within Idaho Power's service area.
Lisa Grow: In addition to projects in some of our core industry, the food processing manufacturing distribution and warehousing.
Lisa Grow: Fielded number numerous requests from large energy intensive customers.
Lisa Grow: These new projects would be in addition to our ongoing work with meta and Micron, Idaho powers work with those two customers is tracking ahead of schedule as we build substation and transmission infrastructure to support their needs.
Lisa Grow: Last quarter I referenced a couple of additional energy intensive projects that some generation in construction study agreements and we're considering executing service agreements with Idaho power.
Didn't include them in our load forecast that as an update while this specific megawatts online dates are confidential one of those potential projects signed an agreement with us and we're continuing discussions on the other project.
Lisa Grow: For the projects that did sign we've now included their early ramp in our load growth estimate although much of their load comes online after 2029.
Lisa Grow: On another front, we plan to start our work on upgraded infrastructure development for perpetuate resources recently permitted mine in Central Idaho, soon which will also be a large special contract customer.
Lisa Grow: We've included perpetua in our load forecast as well.
Lisa Grow: We will need to upgrade 75 miles 75 miles of transmission lines to support their operations and that's in progress.
Lisa Grow: As a reminder, our large load customers pay upfront for upgrades necessary to interconnect and we work closely with them to establish timeframe that will allow us to meet their energy needs, while mitigating impacts to the rest of our customers.
Lisa Grow: As our customers energy needs grow and we work to keep our infrastructure development on pace with that growth our regulatory strategy is vital to financing our operations being mindful of affordability for customers and continuing to achieve excellent results for our owners.
Lisa Grow: As seen on slide seven our Idaho limited issue rate case reached its conclusion right at the end of the year with the Idaho Commission approving an overall increase of $50 1 million or three 7% effective January one.
Lisa Grow: This increase will help us recover some of our costs associated with infrastructure investments in labor expenses not included in our 2023, Idaho General rate case. The Idaho Commission has also been supportive of our significant investment in the safety of our community through ongoing enhanced wildfire mitigation effort.
Lisa Grow: As a reminder, our 2020 for Oregon General rate case reached a settlement, resulting in an overall increase of $6 $7 million or $12. One 4% effective October 15, 2024. This was our first general rate case in Oregon since 2011.
Lisa Grow: We will need additional rate filings to collect the level of revenue necessary to finance, our operations and allow for a reasonable rate of return and to do that we plan to file another general rate case in Idaho in 2025 likely around the middle of the year with rates expected to go into effect in early 'twenty Sir.
At this point, we are preparing a full general rate case in 25 as opposed to the limited scope case, we filed in mid 'twenty for.
Lisa Grow: Customer affordability remains a focus as we grow and even with these recent rate increases are prices remained 20% to 30% below the national averages as sales growth offsets a large portion of the revenue requirement increases.
Lisa Grow: As we prepare our 2025 IRT the latest five year forecast for retail sales growth is eight 3% annually as shown on slide eight that's a notable increase from the already significant five 5% growth rate, we had in our 23 IOP and the seven 7% pro.
Lisa Grow: <unk> number we shared on the third quarter call last year.
Lisa Grow: That annual road that annual rate could continue growing if additional large load projects move forward within Idaho power service area, though they would likely come online in stages closer to 2030 based on the scale of the infrastructure needed to serve them.
Lisa Grow: With potential load growth of eight 3% were larger it's easy to see why we continue to need additional resources.
Lisa Grow: We brought nearly 200 megawatts of solar and battery storage capacity online during 2024 going forward as shown on slide nine we selected several wind solar and battery projects as well as power purchase agreements to meet projected low deficit through 2027.
Lisa Grow: This includes a 600 megawatt Wyoming wind project 300 megawatts of which will be our first company owned wind resource.
Lisa Grow: We have initiated an all source RFP for resources needed in 2008 and 2009. The short list for the 2008 RFP was published in early January and includes some Idaho power projects. We expect to have an update for you on our Q3 call if not sooner.
Lisa Grow: On the transmission topic as you can see on slide 10, we continue to make progress on the Boardman to Hemingway project and expect to break ground. This summer with an anticipated in service date of no earlier than 2007 as for Gateway West We continue to work with <unk> to coordinate the timing of next steps to best meet customer and system.
Lisa Grow: <unk>.
Lisa Grow: We anticipate a portion of the line in Idaho will be completed in 2008 or later.
Lisa Grow: Earlier this month, we entered into an agreement to become a partial owner of Swift North a high voltage line that will run from the Robinson summit substation near Ely, Nevada to our midpoint substation.
Lisa Grow: Once the project is in service, Idaho power plans to purchase an approximate 11% ownership interest. In addition, we entered into a capacity entitlement agreement for approximately 11% of additional capacity on the line over a 40 year term.
Lisa Grow: We expect construction to begin as early as this year and take approximately two years to complete.
Lisa Grow: Turning to slide 11, I am pleased to share that Scott Madison has been appointed to serve on the board of directors of <unk> and Idaho power. Scott recently retired as the executive Vice President of business development and gas supply for the MDU utilities group Dod has been with MDU since 1997, and he brings extensive board.
Lisa Grow: Experience and leadership in the areas of business strategy Finance and customer service is tied to Idaho and deep knowledge of public the public utility sector make him a great addition to our board.
Lisa Grow: I'll close with some good news on hydropower conditions, our current snowpack above brownlee is over 120% of average and the other significant basins are trending above average as well and we're expecting the snowpack to improve as snow continues to accumulate a.
Lisa Grow: A strong finish to the winter season will bode well for our hydropower operations and has so far been great for skiing as well.
Lisa Grow: With that I'll turn the time over to Brian.
Brian Block: Thanks, Hi, everybody I'm going to start on slide 12, with a reconciliation of year end result.
Brian Block: I had to pick three primary drivers for last year's results and highlight strong customer growth the rate changes and the Idaho Avid's, the regulatory mechanism, which we actually use on the credit amortization side instead of on the sharing side for the first time last year.
Brian Block: Looking ahead I'd highlight those same items with some of our expected primary drivers of the results for this year as well.
Brian Block: Getting into the details the last year added quarters net income increased $28 million compared to 2023 that was due to higher net income at Idaho power from the January rate increase and customer growth.
Brian Block: Customer growth continues to stand out in the reconciliation that you can see our usage on a per customer basis below that was relatively flat for most customer classes with the exception of an increase for irrigation customers.
Brian Block: Overall usage was relatively high cooling degree days were 37% higher than normal and heating degree days roaming 9% below normal last year.
Brian Block: <unk> situation played out in 2023 with higher than normal cooling degree days and slightly lower heating degree days, which is why usage per customer was high but relatively consistent between the years.
Brian Block: Total other O&M expenses increased $61 $1 million well that initially seems high context matters for that that increase was primarily from roughly $18 million of increased pension related expenses and $30 million in increased wildfire mitigation unrelated insurance expenses and remember those costs were mostly offset by.
Brian Block: Increases in revenues because they were included in the 2023, Idaho General rate case for recovery through base rates after formerly being recorded as deferrals.
Brian Block: Labor related expenses also contributed to the increase in other O&M expenses. These increases were partially offset by an $8 $5 million increase in deferral of other O&M expenses for the conversion of coal to natural gas for two units at the Jim Bridger power plant.
Brian Block: Depreciation expense increased $28 $1 million for the year, which was an expected increase from the system investments that we've been making.
Brian Block: On a net basis other changes in operating revenues and expenses increased operating income by $38 million.
Brian Block: This resulted in part from a decrease in net power supply expenses that werent deferred for future recovery in rates through the power cost adjustment mechanisms.
Brian Block: More moderate wholesale natural gas and power market prices in the Western region.
Brian Block: In combination with higher wholesale energy sales decrease Idaho Power's net power supply expenses last year also property tax and this contributed to the change mostly from the successful conclusion of multiyear litigation efforts challenging, Idaho, and Oregon property tax valuation, which resulted in refunds of prior year taxes being finalized.
Brian Block: 2024, and the change was also partially due to the timing of reporting and adjusting regulatory accruals on deferrals.
Brian Block: Non operating expenses increased $2 $2 million in 2024 on that basis, mainly driven by an increase in interest expense because of our long term debt balances increase.
Brian Block: Idaho Power's earnings from its investment in Bridger coal company decreased due to a decrease in the amount recovered in base rates under the 2023, Idaho rate case settlement and then partially offsetting those items were increased as you can see from higher construction work in progress balance and also increased interest income from higher interest rates on our cash and investments.
Brian Block: Historically, we've showed a $127 million with our customers under the Idaho regulatory mechanism last year for the first time since that mechanism has been in place Idaho power amortize additional tax credits to reach the $9 one 2% floor level of Idaho return on yearend equity we ended up recording $29 8 million.
Brian Block: Additional Adi Adi's, the amortization, which was mostly the result of regulatory lag in our high Capex environment.
Brian Block: Also related to the tax was $18 6 million relative increase in income tax expense, excluding the <unk> amortization I mentioned was due to higher income before income taxes and also variances in flow through tax adjustments.
Brian Block: Moving on to slide 13.
Brian Block: Updated our five year Capex forecast, we're currently forecasting spending $1 $1 billion per year on average over the 2025 to 29 2029 forecast period and a total five year capex amount of $5 6 billion.
Brian Block: So that's basically a doubling of our average annual spend of $554 million during.
Brian Block: During the past five years.
Brian Block: If you look at the cash flow statement Youll see additions to PP&E in 2024 exceeded $1 billion for the first time and quip on the balance sheet is over $1 $2 billion I think thats indicative of how busy we have been over the past couple of years and it's not flowing down I'd say to the contrary, we expect our spending to only increase to meet growth from.
Brian Block: Reliability requirements.
Lisa Grow: Consistent with what we've stated in the past we take a conservative approach to reporting our Capex expectations. We don't include capital in our forecast until we are relatively certain that will materialize and because of that there is still potential upside to our forecast as Lisa mentioned, we recently developed the final shortlist for the 2028 RFP.
Lisa Grow: <unk> then we've also begun evaluating bids for the 2029 RFP projects, we have Idaho power projects on the shortlist for the 2028 RFP, but because we havent made final selections. We don't include any of those RFP projects in our capex forecast or in our rate base forecast.
Lisa Grow: So depending on the results from the Rfps, we could see additional spend in the forecast period.
Lisa Grow: Lisa also mentioned that Idaho power signed an agreement with an additional large load project at the end of last year and also one with a mining company perpetua.
Lisa Grow: And that our discussions are ongoing with the potential additional large projects in our pipeline. The results of the 28% 29, Rfps will be helpful. In certain bulk loads and they can offer culminate into additional capex further out in the window for us.
Lisa Grow: Building the needed infrastructure is just one element, we also need the converted into rate base to keep the utility financially healthy and to provide returns to the debt and equity holders funding that growth.
Lisa Grow: We rolled forward our rate base forecast for $2025 to 2029 period, which you can see on slide 14.
Lisa Grow: Coming out of our most recent Idaho case, our rate base at the end of 2024 was about $4 6 billion.
Lisa Grow: When we roll forward to 2025 until 2029 into the forecast window, we estimated rate base, increasing by around $5 $1 billion by the end of 2029, which is more than doubling our rate base in that five year span when.
Lisa Grow: When we layer on our updated estimated rate base additions from 2025 through 2029 aligning with the outcome of our last Idaho rate case, our current projected rate base CAGR of 16, 1% and Thats again before factoring in potential additional rate base from pending RFP outcomes.
Lisa Grow: That's not a tremendous amount of growth and for that we will need growth capital. We have a strong balance sheet now and we intend to keep it that way through this long growth cycle with an average 50 50 debt equity capital ratio target that we've mentioned in the past.
Lisa Grow: Related to that moving to slide 15.
Lisa Grow: Amount of external financing, we estimate we need for 2025 through 2029, just for the capital already in the plan, it's about $1 4 billion and equity and about $2 2 billion and debt to stay at that ratio.
Lisa Grow: Over a five year period, and the amounts needed in each year arent likely to be equivalent, but we do have a degree of optionality on the timing and the nature of our issuances.
Lisa Grow: We still expect to see a step down in the amount of our external capital needs further out when revenues from large special contract customers increases.
The one caveat on that and not a bad thing, we expect incremental financing would be necessary for any company owned projects in the pending rfps, probably weighted towards the out years and that forecast window.
Lisa Grow: For the equity side, we have an ATM program in place and Thats been a cost effective and efficient method for us to issue equity, we can potentially use ATM programs to fund the considerable amount of our equity needs over the next several years and.
Lisa Grow: And as we noted on slide 16, we sold around $92 million of equity on a forward basis under the ATM in the fourth quarter will plan to draw on that sometime this year.
Lisa Grow: Also on slide 16 cash flow from operations improved substantially from last year nearly $600 million of operating cash flows in 2024, which was close to a net $325 million comparative increase.
Lisa Grow: The June 23 power supply cost rate change the revenue benefit of the Idaho General rate case outcome and a notable moderation in power supply costs, all contributed to that and those cash flows also help reduce our financing needs and leaves either corp, with a strong cash position as of today.
Lisa Grow: I'm going to wrap up by reiterating two key points I mentioned last quarter first the importance of maintaining affordability for customers through this capex cycle, just as a reminder, the thoughtful and constructive regulatory construct in Idaho looks to allocate appropriate cost special contract customers for whom we are developing some of our infrastructure and customer.
Lisa Grow: Growth in the denominator of our regulatory equation helps to absorb what might otherwise be larger rate increases for existing customers.
Lisa Grow: <unk> long lived assets and being efficient stewards of the company's capital are obviously also helpful.
Lisa Grow: And second as I said on the last call, we expect to see what we believe to be among the leading earnings growth earnings quality profiles in the industry over our forecast window that gives its genesis from a demonstrated capex need for our growing customer base with the steel and already in the ground and a path to affordable conversion to rate base. It is not necessarily linear.
Lisa Grow: Just as our annual financing needs arent necessarily equal or linear nor our large customer ramp rates.
Lisa Grow: We're building and financing much of the infrastructure ahead of the time revenues from use of that infrastructure come in the door as.
Lisa Grow: As you see in the regulatory process has an element of lag, particularly in this environment of high Capex and high interest rates.
Lisa Grow: Use the phrase earnings horsepower last quarter. When I described the vertically integrated infrastructure that we're building for our current and future customers and that horsepower is most certainly intact and my prior comments today reflect that.
Lisa Grow: Keep focusing on solid execution in this period of enormous growth in what we expect to be a continued constructive regulatory environment.
Lisa Grow: With that I'm going to turn it over to John is that through our 2025 guidance and estimated key operating metrics.
John Wunderlich: Brian I am excited to join the IR team and I look forward to meeting many of you in person in the coming weeks as we will be out and about.
Speaker Change: Brian and Amy asked me to share an interesting fact about myself as part of my introduction.
So I wanted to share that I am a third grade assistant basketball coach.
Speaker Change: Which is a fantastic opportunity for me to develop patience persistence and positivity.
Speaker Change: Slide 17 shows our 2025 full year earnings guidance and key operating metrics.
Speaker Change: This guidance assumes normal weather throughout 2025 and normal power supply expenses.
Speaker Change: We expect <unk> diluted earnings per share this year to be in the range of $5 65 to $5 85.
Speaker Change: With the assumption that Idaho power will use $60 million to $77 million of additional investment tax credit amortization.
Speaker Change: That $77 million top end is what we currently have remaining in the mechanism.
Speaker Change: Though we could file an application requesting that the Idaho PUC allow Idaho power to add additional credits to the mechanism legacy credits on our balance sheet or credits from current battery projects.
Speaker Change: We expect full year O&M expense to be in the range of $465 million to $475 million.
Speaker Change: Yes.
Speaker Change: We anticipate spending between one and $1 $1 billion on Capex in 2025.
Speaker Change: As the five year forecast showed we expect to see these higher capex numbers for the next few years as we continue to respond to growth in our service area.
Speaker Change: Finally, given our current forecast of hydro power operating conditions, we expect hydro power generation to be within the range of six five to $8 5 million megawatt hours for the year we.
Speaker Change: We have solid carryover from our prior year and Snowpack. So far this year has been favorable.
Speaker Change: With the storms that have been rolling through lately.
Speaker Change: With that we're happy to address any questions you might have.
Speaker Change: Thank you.
Speaker Change: Now we're ready to begin the question and answer session for attendees here I'm showing the Q&A line. If you would like to ask a question. Please do so by pressing star one on your phone.
Speaker Change: Please ensure that your mute function is turned off before you ask your question.
We will take as many questions as time permits on a comp basis. Once again that is part one on your phone to ask a question now.
Speaker Change: One moment. Please for your first question.
Speaker Change: Your first question comes from the line of Alex Mark Marron Mizuho Securities. Please go ahead.
Speaker Change: Hi, good afternoon team.
Speaker Change: Hi Ali.
Speaker Change: So you mentioned.
Speaker Change: A couple of seconds ago, you mentioned the potential filing to replenish the ITC mechanism can you just discuss a little bit of what that process would potentially look like.
Speaker Change: Well I think Theres a couple of ways that we could do that if we included it in our general rate case request or if it would be a separate filing we are still working through those details.
Speaker Change: Okay. Thank you and then I guess turning to the SFO to debt side can.
Speaker Change: Can you say, where you ended the year from a credit metric perspective, and then how you think.
Speaker Change: Let's be tracking in the future given that it seems like period period end rate base treatment kind of seems unlikely given how the last case win.
Speaker Change: And then finally, just any conversations you've had with rating agencies. Following the conclusion of the rate case.
Brian Block: Yes, Alex this is Brian so just to give you.
Speaker Change: To answer your first question, where we ended up for 2024 on Moody's I would say we ended up nearly 18%.
Speaker Change: On cash flow pre working capital or debt at either Corp, maybe 17% at Idaho power is usually slightly lower RASM would be the numbers were a little lower probably around 14, five on <unk> to debt at that level for Ida Corp.
So as we look ahead on those.
Speaker Change: Do see at least some diminishment for 2025, if you think about cash flow from operations for 2024 coming in at $600 million.
Speaker Change: That's unlikely to be repeated because it includes the collection of some power supply costs from a prior year. So I would expect cash flow to fall somewhat and then also we do have a debt financing need during 2025, our guests an issue on somewhere in the order of $350 million to $450 million. So so a little reduction in the numerator and then some addition to the.
Speaker Change: Or will have an impact on our.
Speaker Change: Credit metrics for 2025, we do have a downgrade thresholds around 13% and 14% for S&P and so I think for the next couple of years, you can expect us to be hovering around those thresholds.
Speaker Change: Near our target, which is typically 200 basis points above our downgrade thresholds.
Speaker Change: In terms of guidance.
Speaker Change: We're actually meeting with the rating agencies next week for an update.
Speaker Change: <unk> had conversations about the rate case outcome with them. It wasn't good rate case outcome and you have seen in their reports that some of the things that they want to see our improvements and reductions of regulatory lag whether it be through mechanisms or frequent rate filings.
As I mentioned, we would file a general rate case, this year and that's to help with the reduction in regulatory lag and help shore up credit metrics.
Speaker Change: Wonderful. Thank you so much I'll leave it there congrats on a great year.
Speaker Change: Thanks, Alex.
Speaker Change: Yes.
Speaker Change: Our next question comes from the line of David Arcaro Morgan Stanley. Please go ahead.
David Arcaro: Hi, David Hi, David.
Speaker Change: We can't hear you David if you tell it looks like sorry about that.
Speaker Change: Are you asking myself there. Thanks, so much for taking my question.
Speaker Change: Reflecting on the regulatory backdrop here and the outcome of the rate case I was wondering do you still see an opportunity to shift to a period end rate based framework with the commission in the future.
Speaker Change: Or should we be thinking potentially the capital trackers might be another avenue.
Speaker Change: To pursue curious your latest thoughts.
Speaker Change: Well I think we're looking at all options and the commission was open in their.
Speaker Change: Order for mechanisms or some other.
Speaker Change: Wave two to narrow the regulatory lag.
Speaker Change: I think we continue to explore all those options.
Speaker Change: Yes. This is Brian I would just add to that as Lisa mentioned everything's on the table I wouldn't say that period on rate base is off the table.
Speaker Change: The commission has a mindset of a healthy utility.
Speaker Change: For us and as we've looked at the case from last time, I think we made a pretty reasonable Alaska, what we needed on a conservative basis and a limited scope case, our period end rate base wasn't something that necessarily what's going to go from that but in a more general broad rate case. It can be a different outcome. So we will be exploring that as we go forward.
Speaker Change: In there it also doesn't prevent us from filing some one off rate cases also that have some form of cash benefit for us.
Okay got it understood that makes sense.
Speaker Change: And then I was wondering if you could maybe elaborate a bit more on the incremental load growth that youre seeing are there.
Speaker Change: You mentioned a couple of customers.
Speaker Change: And even some more large load customers in the works and what are you seeing from any data center activity in your in your service area and are there certain industry verticals, where you're seeing particularly strong incremental new projects looking to site in your service territory from here certainly doesn't sound like growth is slowing down.
Speaker Change: Yes, I would say.
Speaker Change: The good challenge to have for sure.
Speaker Change: And we're seeing it across a lot of industry, but yet.
Speaker Change: We've been talking a lot about it on.
Speaker Change: Meta data center.
Speaker Change: Under construction and there is there is interest in others.
Speaker Change: From that scene.
Speaker Change: Industry. So I think there are sort of everywhere asking all utilities, what they can do.
But I think as far as agriculture mining healthcare and Theres been some very large projects that are that are.
Speaker Change: Going in all around our service area and what would you add I think you covered most of it maybe two additional ones. We're seeing a fair amount of inquiries on the dairy side, but also on the bio digester side. It really is based manufacturing in general So I think.
Speaker Change: Data centers and the low juicy there are the largest but we're seeing a steady inquiry of the variety of different industries, Idaho was popular and people are coming here.
Speaker Change: Okay, great Yeah definitely sounds broad based much appreciate it.
David Arcaro: Thank you David.
Speaker Change: Your next question comes from the line of Chris <unk> of Siebert Williams Chen. Please go ahead.
Speaker Change: Hey, good afternoon, everybody Hi, Chris.
Speaker Change: Lisa could you address.
Speaker Change: Thoughts on the executive orders from Washington, So far and do any of the orders.
Speaker Change: Sorry change your thoughts on.
Speaker Change: Generation mix going forward at all.
Speaker Change: Well as everyone is trying to do.
Speaker Change: We're waiting to see sort of which ones go into effect and which ones don't we're actively monitoring all of them.
We're hopeful that that maybe some of the permitting and siting Mike.
Speaker Change: Might get a little bit easier going forward that has certainly been a very big challenge for any kind of infrastructure and.
Speaker Change: Anything that would streamline those processes.
Speaker Change: Would be very helpful as far as the mix certainly we use the lease risk lease cost.
<unk> analysis.
Speaker Change: And what gets chosen in the preferred portfolio for our IOP.
Speaker Change: At this point in time, we don't necessarily see that it would change what we're planning but.
Speaker Change: Depending on sort of how the tax credits and some of the funding and through the <unk> with ends up happening there could.
Speaker Change: Could change some of that.
Speaker Change: ERP planning for sure.
Speaker Change: Okay.
Speaker Change: Maybe Chris as I think you covered the main.
Speaker Change: Issues lease I do think there is maybe going to be fewer restrictions on the thermal side or is that a fair amount of talk about that and then obviously potentially changing in position on the clean Air Act.
We're keeping an eye on those.
Speaker Change: So far they look like they may be beneficial at the end of the day from a resource perspective, and I don't think we've seen the last of all of them either so we will continue to monitor.
Speaker Change: Okay. That's helpful.
Speaker Change: Can you characterize your fourth quarter weather, a little bit for us.
Speaker Change: It was it seems like it's been warm for a while and then it got really cold so.
Speaker Change: I think it was also a little bit surprising that we had snow.
Speaker Change: Right after Thanksgiving, which was.
Speaker Change: Kind of not forecasted and pleasant surprise for those of us like to recreate out there so.
Speaker Change: I think in general.
Speaker Change: I don't know that it historically it was a wide variation itself sort of like a normal.
Speaker Change: Winter.
Speaker Change: And late summer.
Speaker Change: Okay.
Speaker Change:
When you put together the.
Speaker Change: 2.7% 20 year.
Load growth forecast do you include anything in that number for some of the large loads.
Main sort of in the pipeline or are they only defined contract jewel.
Speaker Change: Loads to this point.
Speaker Change: Yes, we are very conservative before we add.
Speaker Change: Prospective loads into our into our load forecast. So generally it's a signed agreement or one that's really close to being signed.
Speaker Change: Usually our fleet.
Speaker Change: Have historically put only loads in that have a very high degree of certainty yes. Chris. This is Adam at the end of the five year period kind of going in five to six year period of that 20 years, you'll see a little bit of that just because some of these large loans extended to that period, but beyond that it's typically more of a forecast.
Speaker Change: Our load forecast look.
Speaker Change: Okay.
Speaker Change: Sort of I don't know how many years last 345 years, you've seen an acceleration to a degree in your customer growth.
Speaker Change:
Speaker Change: Ken can you separate out.
Speaker Change: Can you tell which portions of customer growth are coming from say in migration versus <unk>.
Speaker Change: New customers coming in to support the business development in the region did you get any sort of clarity.
Speaker Change: What's the source of your new customer growth is.
Speaker Change: So I would say, it's heavily skewed to the large commercial and industrial some of it coming from out of state.
Speaker Change: Some of it is current customers expanding.
Speaker Change: The in migration of residential customers is it's actually fairly modest when you compare it against the sort of oversized impact of the large commercial industrial customers. There are hundreds of megawatts. So it just.
Speaker Change: Takes a lot of single family homes to make that up in five percentage.
al: Yes, Chris this is al.
al: Typically if you look at that eight 3% over that five year period, it's around 1% or less on the residential side.
al: Might give you a little bit of an idea of what Lisa just mentioned a lot of it is C&I growth in some of these large loads.
Speaker Change: Okay, Great and one last thing Brian you were talking about.
Speaker Change: And the one line item property tax refunds from some litigation I think you said.
Speaker Change: Hum.
Speaker Change: Was that in a particular period and can you give us any kind of sense of the magnitude of what that look like.
Speaker Change: Yes, Chris that was over a three year historic property tax period, if I remember correctly sort of a onetime event that we litigated the valuation methodology for those.
Speaker Change: Based on that I think pre tax number was around $10 million.
Speaker Change: That we recorded in the 2024.
Speaker Change: Great. That's very helpful. Alright, Thanks, a bunch I appreciate it guys.
Chris: Hey, Chris.
Speaker Change: Your next question comes from the line of Julien Dumoulin Smith of Jefferies. Please go ahead.
Chris: Hi, good afternoon, its actually Brian Russo on for Julien.
Speaker Change: Hi, Bryan Bret.
Speaker Change: Just to clarify the new rate base disclosures that are illustrated on the slide.
Speaker Change: As each year now, we average rebase versus year end.
Speaker Change: Two.
Speaker Change: Quarterly with the rate case order in the 2024.
Speaker Change: Rate base that Youre, showing which I believe is average, but as every year average rate base.
Speaker Change: Yes, Brian This is Brian so the 2024 number that we're practicing in on is the outcome of the rate case, which used an average methodology and then as you go on a go forward basis, we did assume more conservatively and averaging approach for each of the subsequent years out through 2029.
Speaker Change: Okay. So you have now switched to an average rate base approach great. Okay. Thank you.
Speaker Change: And then I'm just curious with.
Speaker Change: The increased load forecast of eight 3%.
Does the 28 and 29 Rfps.
Speaker Change: Enough for that or should we expect.
Speaker Change: By 2030 RFP to follow.
Speaker Change: Brian It's a good question. This is Adam we received a fair amount of projects in the 2008 2009, Rfps. So we were pretty pleased with.
Speaker Change: With the results there, including some power projects, we are still evaluating 2030.
Speaker Change: We will know probably in the next couple of months, whether we need to go out again.
Speaker Change: At this time it is kind of in the evaluation stages.
Speaker Change: Okay.
Speaker Change: <unk> either proposed bids in 2029 Rfps.
Speaker Change: That baseload generation.
Speaker Change: Generation.
Speaker Change: Project.
Speaker Change: So in the 28 no.
The 29, I Wouldnt call Baseload, but there is reciprocating engines in that bid.
Speaker Change: The more <unk> type facilities dispatch full facilities.
Speaker Change: Okay, Great and then you mentioned the sweep north.
Speaker Change: Interest of 11% I think it's a 1 billion dollar project are there any milestones left before.
Speaker Change: Construction begins and then when would I.
Speaker Change: Of course financial commitments, bringing necessary and then I assume that is incremental to the capex forecast.
Adam: Yes. This is Adam again, you are right. The public figure I think is 123 billion, although we're still evaluating that ends up being around $4 billion plus a mile.
Adam: They've received a record of decision it's actually a permit that we owned Idaho power back in the day and we sold it.
Adam: And what he did when we did see the growth and now we're seeing the growth again, so we're getting back involved.
Adam: 285 miles.
Adam: To start construction this year, maybe late this year early next year and the contract works is we actually don't pay until the in service date is that still the capex.
Adam: Expenditure would be at that time. So starts in 2025 26 two years after that.
Yes, Brian.
Brian: The last part of your question, we do have that transmission line Anr Capex forecast.
Brian: Okay, and the Capex and then just while we're on transmission I know boardman to Hemingway.
Speaker Change: As a preferred resource.
Brian: <unk>.
Brian: Is there a risk of.
Brian:
Brian: Further delays.
Brian: Not just construction, but the actual start date.
Speaker Change: Gordon to Hemingway, how do you mitigate the risk of.
Speaker Change: The capacity that that transmission line was going to provide.
Speaker Change: Could that be done in another RFP or would you just sort of sit on the wholesale markets.
Speaker Change: It's a great question, yes, it would probably be through another RFP the wholesale markets have been pretty tight.
Speaker Change: And so we look at the 2028 2029 rfps.
Speaker Change: We start to get concerned that <unk> will get held up we would pull the trigger and look at additional resources in those rfps.
Speaker Change: But we are feeling good about and working our way through this.
Speaker Change: Construction date to get this this line started after.
Speaker Change: Along along the journey. So we feel good about the project we've had some pretty key federal permitting milestones.
Speaker Change: Close to hitting another key state milestone materials are coming in and they're coming to our staging area and so construction in the summer is looking pretty good at this point.
Speaker Change: Alright understood great. Thank you very much.
Brian: Brian Thanks.
Speaker Change: And a final opportunity press star one to signal for a question and we will pause for a moment.
Brian: There are no further questions at this time.
Lisa Grow: That concludes the question and answer session for today, Yes grow I will turn the conference back over to you.
Lisa Grow: Well, thanks to everyone again for joining us today and for your continued interest in <unk> I Hope you all have a great evening. Thank you.
Lisa Grow: Okay.
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Lisa Grow: Yes.
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Lisa Grow: Yes.
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Lisa Grow: Okay.
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Lisa Grow: Okay.
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Lisa Grow: Yes.
Lisa Grow: Thank you.
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