IDACORP, Inc. (IDA) Q2 2025 Earnings Call Transcript

IDACORP reported strong Q2 2025 diluted EPS of $1.76, up from $1.71 year-over-year, driven by higher retail revenues, customer growth, increased usage, and significant tax credit amortization. Consequently, the company raised its full-year diluted EPS guidance to $5.70-$5.85. The utility is experiencing robust customer growth, notably with Micron's second fab announcement, and a prospective customer pipeline exceeding its all-time peak load, suggesting potential for accelerated future demand. To support this growth, IDACORP is advancing major infrastructure projects like the Boardman-to-Hemingway transmission line, its 2025 IRP recommends more gas-fired resources, and it has secured $720 million in equity financing to fund capital needs into 2027 while filing a general rate case seeking a $199 million increase and mechanisms to address regulatory lag.

Analysis

IDACORP reported strong second-quarter 2025 results, with diluted EPS rising to $1.76 from $1.71 year-over-year, leading the company to raise the low end of its full-year EPS guidance to a new range of $5.70 to $5.85. The performance was driven by a 2.5% increase in customer count, higher usage from warmer and drier weather that boosted irrigation demand, and the strategic use of $17.2 million in additional tax credit amortization. The primary long-term catalyst is an exceptional acceleration in load growth visibility, highlighted by Micron's announcement of a second high-volume fabrication plant and a prospective customer pipeline that now exceeds the company's all-time peak load of 3,800 MW. Management explicitly noted this demand, which is not yet factored into the 2025 Integrated Resource Plan (IRP), will create upward pressure on its capital expenditure plan, which is already set at $1.0 billion to $1.1 billion for 2025. To manage this growth, IDACORP has de-risked its medium-term financing by securing forward sale agreements for approximately $720 million in equity, sufficient to fund needs into 2027 under the current plan. Concurrently, the company is proactively addressing regulatory needs by filing a $199 million general rate case in Idaho and proposing a novel depreciation and interest expense tracking mechanism to mitigate regulatory lag on its substantial investments.

Key Decisions for Investors

• The investment thesis is further strengthened by accelerating long-term load growth visibility from the second Micron fab and a data center pipeline that significantly exceeds current forecasts, underpinning a multi-year rate base growth narrative.
• Monitor the Idaho general rate case for the approval of the proposed depreciation and interest expense tracking mechanism, as its success would materially reduce regulatory lag and improve earnings quality during this high-CapEx cycle.
• While equity needs are funded into 2027, anticipate upward revisions to long-term CapEx forecasts and future financing needs as the company incorporates the full scale of its prospective customer load, including the second Micron fab.
• Note the strategic shift towards gas-fired generation in the 2025 IRP and 2029 RFP shortlist, which may offer more reliable capacity and returns amid uncertainty surrounding renewable project timelines like Jackalope Wind.