Welcome to IDACORP's First Quarter 2021 Earnings Conference Call. Today's call is being recorded, and our webcast is live. A complete replay will be available later today and for the next 12 months on the IDACORP website. I would now like to turn the call over to Justin Forsberg, Director of Investor Relations and Treasury.

Thank you, Kavita, and good afternoon, everyone. This morning, we issued and posted to IDACORP's website our first quarter 2021 earnings release and Form 10-Q. The slides that accompany today's call are also available on our website. We'll refer to those slides by number throughout the call today. As noted on Slide 2, our discussion includes forward-looking statements, including earnings guidance and spending forecasts, which reflect our current views on what the future holds but are subject to several risks and uncertainties, including those related to the impact of the ongoing COVID-19 pandemic. 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 3, on today's call, we have Lisa Grow, IDACORP's President and Chief Executive Officer; and Steven Keen, IDACORP's Senior Vice President and Chief Financial Officer. We also have other company representatives available for a Q&A session after Lisa and Steve provide updates. Slide four shows our quarterly financial results. IDACORP's 2021 first quarter earnings per diluted share were $0.89, an increase of $0.15 per share from last year's first quarter. Today, we also affirmed our full-year 2021 IDACORP earnings guidance to be in the range of $4.60 to $4.80 per diluted share, with our expectation that Idaho Power will not need to utilize in 2021 any of the additional tax credits that are available to support earnings in Idaho under its regulatory settlement stipulation. These are our estimates as of today, and those estimates assume normal weather conditions over the balance of the year and include customer usage returning closer to pre-COVID-19 levels as we progress through the year. However, as you would expect, it is difficult to predict the full impact of evolving economic conditions on Idaho Power's customers and suppliers and how that could affect the upper end of the earnings guidance range or the use of tax credits. I will now turn the call over to Lisa.

Thanks, Justin, and thank you to everyone joining us on today's call. We have had a great start to 2021. As our customers and employees move closer to a more normal work environment, we are looking forward to reconnecting with many of you in person over the next year when possible. Our company has begun to resume some normal work operations in a phased, carefully planned manner, and we are hopeful health trends will continue to allow our working conditions to normalize in the coming months. For Idaho Power, as noted on Slide 5, the first quarter of this year saw a continuation of the strong customer growth. In March alone, we saw an annualized customer growth rate of 3.5%. This accelerated growth rate is challenging as we keep up with service connections, but our employees continue to prove that they are up for the task. Looking ahead, we expect robust growth to continue as Idaho's quality of life and business-friendly environment remain attractive. Other factors such as inquiries for large load projects suggest demand for our energy in our service area remains strong. On Slide 6, you'll see highlighted a few publicly announced large load expansions and projects. The economy within Idaho Power's overall service area continues to outperform national trends. Unemployment within Idaho Power's service area is now down to 3.7%, remaining well below the 6% rate reported at the national level, and total employment in our service area declined a modest 0.3% since March of last year. Moody's has strengthened its predictions for our service area, now projecting robust economic growth going forward even after our service area experienced a modest GDP decline in 2020 relative to the national average. The Moody's forecast now calls for growth of 8% in 2021, 8.1% in 2022, and continued strong growth of 6.8% in 2023. We expect that existing and sustained future customer growth will cause the need for Idaho Power to continue to enhance and expand its distribution and transmission system infrastructure, including the Boardman to Hemingway project. That growth may also result in the need for Idaho Power to procure other new sources of energy and capacity to serve growing loads as well as to maintain system reliability. We are in the process of analyzing options for potential energy and capacity resource procurement while, at the same time, working on our 2021 integrated resource plan. We are seeing early model results in our 2021 IRP planning process showing declining length in our system in the near term. It's a little too early to tell what that will mean for the timing of early exit of Jim Bridger coal-fired plant unit, the timing of the exit for the second unit at North Valmy, high-voltage transmission line expansion project, and for other general system upgrades. While there are many factors that can impact the ultimate results, there is a possibility that the capital expenditures that we shared in February could grow beyond the estimate to meet the required projected energy and capacity needs. You'll see some of the items I mentioned highlighted on Slide 7. We have many exciting challenges ahead as we work hard to ensure there is sufficient energy and capacity supply for our customers while balancing the critical need for reliability, resilience, and affordability with our clean energy goals. Last quarter, we stated Idaho Power does not plan to file a general rate case in Idaho or Oregon in the next 12 months. That remains true today as we look at the next 12 months. Customer growth, constructive regulatory outcomes, major project completion dates such as the relicensing of Hells Canyon, the timing of resource acquisitions, and effective cost management all play significant roles as we look at the need and timing of a future general rate case. As part of our overall regulatory strategy, I'll briefly highlight an update that Idaho Power received in its case with the Idaho Public Utilities Commission. We requested authorization to defer the Idaho portion of O&M expenses, including vegetation management, specified insurance costs, and depreciation expense for certain capital investments expected to be necessary to implement its recently enhanced Wildfire Mitigation Plan or WMP. The comments published earlier this month were generally supportive of our efforts to enhance and protect our infrastructure from some of the devastation that has been prevalent in other Western states in the past few years. As a reminder, we expect to spend approximately $47 million in incremental O&M and $35 million in incremental capital expenses for wildfire-related infrastructure work over the next five years. The case is still pending at the IPUC, and we are currently awaiting a commission order. As you all know, weather is an important factor in wildfire risk as well as in other aspects of Idaho Power's overall operations. We rely on a healthy snowpack to meet our customers' needs reliably and affordably. This winter, our mountains accumulated below-average precipitation. However, we entered the upcoming spring and summer seasons with strong reservoir storage, so we expect relatively healthy water conditions for irrigation customers, though it is likely that hydropower generation will be lower than our 30-year average. You will see on Slide eight that the most recent projections from the National Oceanic and Atmospheric Administration suggest dry and hot conditions from May through July. Preparations for summer readiness, when our system is most stretched, are underway, and we expect to be able to balance the reliable system and to meet customer demands. As a reminder, our power cost adjustment mechanisms in Idaho and Oregon significantly reduce earnings volatility related to changes in our resource mix and associated power supply costs that can fluctuate greatly due to weather. And with that, I will hand things over to Steve for an overview of the first quarter's financial performance.

Thank you, Lisa. Let's now move to Slide 9, where you'll see our first quarter 2021 financial results as compared to the same period in 2020. Overall, we had a strong start to the year with accelerating customer growth and positive impacts from transmission revenues. Altogether, IDACORP's first quarter 2021 net income was higher by $7.3 million. On the table of quarter-over-quarter changes, you'll see customer growth added $3.7 million to operating income. Lower usage per commercial customer down 2%, partly due to COVID-19 impact, was largely offset by higher residential usage due to colder weather this year versus last. The net result was a relatively modest $1.3 million decrease in overall usage per customer. The next change on the table shows that transmission wheeling-related revenues increased $4.1 million. This was partly due to a 20% increase in wheeling volumes as well as a 10% increase in Idaho Power's open access transmission tariff rate last October to reflect higher transmission costs. Colder winter weather in the Southwest U.S. contributed to the increased wheeling volumes this quarter. Next on the table, other operating and maintenance expenses decreased by $4.2 million. This was primarily due to the timing of cloud-seeding activities and cost-saving initiatives at our jointly owned coal plant. A portion of the savings also related to Idaho Power's exit from the Boardman plant in 2020 as both O&M costs and corresponding revenues were reduced due to the regulatory mechanism in place that's associated with its shutdown. We continue to see decreases in employee travel and training costs related to COVID-19 while our allowance for bad debt remains above recent levels and will likely take longer to collect. Our net deferral impact, however, remained nominal. We will continue to monitor the impacts by state to determine whether we ultimately seek recovery for any net increased cost. Finally, our higher pre-tax earnings led to an increase in income tax expense of $1.5 million this quarter. The changes collectively resulted in an increase to Idaho Power's net income of $7.6 million. IDACORP and 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 distribute dividends to shareholders. IDACORP's operating cash flows along with our liquidity positions as of the end of March are included on Slide 10. Cash flows from operations were about $50 million higher than last year's first quarter. The increase was mostly related to working capital fluctuations, the timing of pension contributions, and the timing of net collections of regulatory assets and liabilities. The liquidity available under IDACORP's and Idaho Power's credit facilities is shown in the middle of Slide 10. At this time, we do not anticipate raising any equity capital in 2021. While cash flows have been minimally affected by the pandemic thus far, our combined liquidity, along with expected regulatory support from our annual adjustment mechanisms, is a substantial backstop to our expected capital and operating needs. Slide 11 shows our affirmed full year 2021 earnings guidance and our current year financial and operating metrics estimates. We continue to expect IDACORP's 2021 earnings to be in the range of $4.60 to $4.80 per diluted share as we assume normal weather and operating conditions for the remaining nine months of the year. We also assume pandemic impacts continue to moderate as the year progresses. Our guidance still assumes Idaho Power will use no additional tax credits in 2021. Of course, our guidance could be negatively impacted if the economy or the pandemic worsens significantly or for other reasons. Our expected full-year O&M expense guidance remains in the range of $345 million to $355 million, so we're off to a good start. It's fair to say that this goal to keep O&M relatively flat for the ninth straight year is being challenged by the level of growth we are expecting. We also affirm our capital expenditures forecast for this year, which we increased a bit in February to the range of $320 million to $330 million. Our expectation of hydro generation has softened somewhat given the conditions Lisa presented earlier and is now expected to be in the range of 5.5 million to 7.5 million megawatt hours. With that, Lisa and I and others on the call will be happy to answer your questions.

And our first question comes from Ryan Greenwald with Bank of America.

Hi, good morning everyone. Appreciate the time. So maybe to start, just kind of coming off a strong quarter here, seasonality would imply you're comfortably kind of above guidance, and you got this accelerating customer growth and things starting to normalize a bit seemingly. Can you guys just kind of talk about the puts and takes of the remaining quarters and the decision to keep guidance intact at this range?

Sure, Ryan. If you look at our historic earnings, the pattern varies a little bit quarter by quarter, but the pattern has always been that the third quarter is our biggest quarter. The second quarter often leads into it a bit, and so you get better timing. So while we're happy with a good first quarter from a weather perspective and things that we maybe don't control so much, we really need to get into summer before we have a lot of confidence that all of that holds together. So it's pretty normal for us to be waiting on boldness that way until we get into summer.

Got it. And then I know it's a bit early, but in terms of potential for additional energy procurement against the back half of this robust growth, can you guys kind of dive a bit deeper in terms of how you're thinking about potential timeline of opportunities and potential to rate base and magnitude of what would come in the years ahead?

Yes. This is Lisa. Adam, could you please address that question?

Sounds good. Ryan, you mentioned that significant growth is a big part of it. One of the things we're also seeing is some transmission constraints outside our borders. And I think based on what we know today, it appears these two things will likely cause us to have to need some generation resources earlier than we expected in the 2019 IRP. We're still running the models, so this is not a for-sure thing. But additional generation sources maybe in the 24 range looks like it may occur. With the transmission constraints, we're also continuing to see the need for transmission investments like B2H and Gateway West. So we're keeping an eye on those. Right now, B2H is scheduled for 2026, as you know. And again, we'll just keep an eye on growth in some of these transmission constraints to see if we need a resource earlier.

Yes, Ryan, since our last Integrated Resource Plan was finalized about a year ago, you might not realize that our new plan will be released later this year, and I believe it won't be long before we have more reliable numbers that can help provide a better estimate.

Great. Thanks for the time.

And our next question comes from Chris Ellinghaus with Siebert Williams.

Hey, what caused the sort of further acceleration in customer growth in March versus the earlier part of the quarter?

I wish we had a clear answer. The in-migration seems to be driven by several factors. Some people are moving due to the business climate or to escape certain conditions. We’ve heard that some might be political refugees relocating to Idaho. The milder weather likely makes it more appealing for those who were hesitating to move, especially avoiding the winter months. It appears to be a mix of factors. Additionally, with COVID numbers decreasing and schools reopening, this might have impacted people's timing for relocating. It's certainly remarkable to witness this shift. I can't recall anything like this in my experience, making it both exciting and challenging.

Yes. Chris, I've spoken with a few individuals who moved here six to eight months ago, and now they have relatives or friends considering a visit. The cost of living in their previous areas is quite significant. They discover they can sell their homes for a good profit, come here, and have extra money to spend while enjoying a nicer living situation than before. This person seems to be enthusiastically sharing their positive experiences with family and friends, which might be contributing to an increase in interest through word of mouth.

I believe growth was occurring even before COVID, and I think all of these factors are contributing to that.

Okay. The cloud-seeding aspect of the O&M reduction for the quarter, can we assume that that's something that gets picked up in the second quarter, particularly with sort of the dry forecast?

No, that only happens in the winter. So we don't seed unless there's a possibility for snow.

Yes, I believe this will resolve itself over the course of the year. There is a portion of the savings that I wouldn’t consider something we are holding onto, as it relates to the fluctuations in expenses. Additionally, we have others contributing to some of the costs associated with cloud seeding. I think the situation was mainly due to the timing of inflows matching outflows, so it isn't a significant change in our plan.

Okay. The precipitation during the quarter was actually above normal, but Lisa, you noted that the snowpack was not. How should we consider your reservoir system in relation to the precipitation, particularly in comparing the actual rainfall captured by your reservoirs to the snowpack, as we assess your current hydrological situation?

Yes, that’s a great question. We experienced a really dry March and April, which meant we didn't receive the usual rainfall. The rate at which the snow melts is also influenced by weather conditions. Currently, it's cold, causing the snow we do have to melt slower. As it became drier, irrigation increased, leading to reductions in water flow since the snow remains in the mountains. We're closely monitoring how this will unfold. Fortunately, we have reservoir storage, which we're thankful for. We'll see how the rest of the season develops. There have been instances where May brings significant rainfall that helps improve the situation, but we're not overly optimistic about that. I’m hopeful and putting that positive energy out there. For now, we're primarily preparing for a dry season with lower hydro availability and making necessary adjustments for our customers.

Okay. One last.

Chris, I know you've focused a lot on our irrigation side. But from that perspective, then needing to pump the water, pull it out of the reserves is actually the part that usually gives us some lift in the summer. So it's setting up right now. It doesn't appear that there would be shortages for them and that they wouldn't get water. Certainly, we can't say for sure how the rest of the spring rolls out. But assuming there's plenty there, they should be using water hopefully earlier than some years. We've had a couple of kind of disappointing seasons where they really didn't start irrigating until June, and it's not looking like that this year.

Okay. Yes, I was going to ask you about this. Ag prices are quite extraordinary at the moment. So I assume that farmers are being aggressive in their planting and with the dry outlook. Is there any reason we shouldn't expect irrigation to be strong again for the summer?

We certainly think it's shaping up that way.

Yes, we've felt let down. There have been instances where May has been rainy from start to finish. When it rains, there’s no need for electrically powered pumps. However, currently, it seems to be returning to normal. We’ve experienced a few wet springs that have hindered us, but this spring feels dry, and usually, springs in Idaho are quite pleasant, almost like summer in San Diego.

One more thing. Last year, the first quarter was kind of a weak transmission wheeling quarter, and you did end up getting some kind of benefit from the February storminess. But they sort of seem to offset a little bit. Would you call this quarter normal for transmission wheeling? Or do you think it was extraordinary?

Maybe not extraordinary, that would probably be too much to say. But Adam and I visited about this just yesterday, I believe. And it feels like every year, there's been something. So there is another thing this year. It was kind of that imbalance that happened when Texas had its issues, the really cold weather down there. And when it happens, people see differences in prices in different areas, they decide to move that power, and that's when we get some business out of that we maybe didn't plan. But it's kind of feeling like there's something most years, I guess. So maybe we just don't know for sure what this new normal is. But at least for the last three years, there's been different sorts of interruptions that have caused us to show up somewhere during the year.

Yes. So it's really hard to say whether it's fundamental or is that driven.

And our next question comes from Brian Russo with Sidoti.

So just back on the potential need for new energy resource. Is it too early to discuss what size of a resource you might need? And if Boardman to Hemingway keeps getting pushed out, does that need in size grow?

I think I will have Adam take this one as he's the expert on the IRP.

Absolutely, Brian, it seems a bit early to determine the size of the new energy resource. We are still working through the 2021 Integrated Resource Plan. However, the need is becoming apparent. The size will depend on several factors, including the significant load growth we are experiencing. It's uncertain if this trend will continue. Additionally, we typically rely on imports during the summer to meet peak demand. Currently, the transmission market indicates that our ability to import energy is declining due to scarcity. We plan to assess the market and evaluate the available transmission capacity, which will help us understand the size of resource we will require moving forward. If the Boardman to Hemingway project were to be delayed, it would indeed increase our need for generation resources.

Okay. Great. And then just back on the transmission question. You mentioned the dynamics, obviously, the higher tariff rate, the volumes and wheeling power into the Southwest. Is there a scenario with dry, hot conditions west of you, in California, that you could set up a same sort of dynamic this summer where you transport power west and volumes can increase? And did that happen last summer?

I'm happy to answer that.

Yes, go ahead.

That did happen last summer from our perspective. You had the heat wave kind of in the August time frame. And when you have those high market prices and a spread between the Southern market, which is the Palo Verde market, and the MidC, people tend to use our transmission to sell between those markets. So if you saw some extreme heat again this summer, some dry conditions, it feels like, again, our transmission system would be pretty valuable for people to trade between the two markets.

Okay. Great. And then lastly, just on the guidance again. With the increasing load growth, you have reaffirmed your operating and maintenance expense guidance. It appears that the forecast is for dry and hot conditions. Is the weather the only factor preventing you from adjusting your guidance at this time?

Brian, I would consider this the most significant point. The third quarter usually accounts for about half of our earnings, making it a critical period. Factors like irrigation and overall demand play a role here. If we experience increased in-migration, it could positively affect our results if the weather is hot, as more people would likely be using air conditioning. However, this is a delicate situation; if the weather shifts negatively, it could have a substantial impact, and unfortunately, we haven't been particularly accurate in forecasting the weather historically. That's why this quarter is so important. Typically, the first and fourth quarters do not drive substantial results for us, so we don't generally rely on a strong first quarter to make predictions. Additionally, considering the pandemic, things seem to be improving and opening up, but we didn't anticipate the initial changes, which makes the future uncertain. Overall, we’ve had a good quarter, and we hope to maintain that momentum in the next three.

Yes. And it's in our nature to try to be conservative.

Okay. Understood. And then just lastly, you mentioned you were bullish on transmission earlier. You have B2H in development, Gateway West obviously longer term. Is it a long shot to ask if there's anything in pending infrastructure build that could potentially accelerate the development or ease of permitting on Boardman to Hemingway and/or Gateway West?

Potentially, having ITCs makes it interesting. I'm not sure if the permitting process will change, though there are discussions suggesting it might. We're approaching the end of that process anyway, so it shouldn't significantly impact the timing based on permitting. I'm pleased that many policymakers are recognizing the essential need for transmission to achieve the clean futures everyone, including this administration, wants. I believe that's a positive development. I'm hopeful this will help facilitate some of our projects that are permitted or close to being permitted. As for any other projects we might consider, we don't have those outlined in the IRP right now, but it's always possible.

Great. Thank you very much.

And that concludes the question-and-answer session for today. Ms. Grow, I will turn the conference back over to you.

Great. Thank you. Well, we thank all of you for the continued interest in IDACORP and Idaho Power, and I wish you all my very best. We're certainly enjoying a beautiful spring day here in Boise, which means it will snow tomorrow. But I hope you are enjoying whatever season you're having where you are. So thank you very much.

And that concludes today’s conference call. Thank you for your participation.