Welcome to IDACORP's First Quarter 2024 Earnings Conference Call. Today's call is being recorded and our webcast is live. A replay will be available later today and for the next 12 months on the IDACORP website. I will now turn the call over to Amy Shaw, Vice President of Finance Compliance and Risk. Please go ahead.

Thank you. Good afternoon, everyone. We appreciate you joining our call. This morning, we issued and posted to IDACORP's website our first quarter 2024 earnings release and the Form 10-Q. The slides you will reference during today's call are available at IDACORP's website. As noted on Slide 2, our discussion today includes forward-looking statements including earnings guidance, spending, forecasts and regulatory plans that reflect our current views on what the future holds, but 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 undue reliance on any forward-looking statements. This cautionary note is included in more detail for your review in our filings with the Securities and Exchange Commission. As shown on Slide 3, Lisa Grow, IDACORP's President and CEO; and Brian Buckham, IDACORP's Senior Vice President, CFO and Treasurer, will be presenting today. In addition to Lisa and Brian, we have other members of our management team available for a Q&A session following our prepared remarks. Slide 4 shows our first quarter financial results. IDACORP's first quarter 2024 diluted earnings per share were $0.95 compared with $1.11 for last year's first quarter. Our key metrics and guidance for 2024 remain unchanged, except for our hydropower generation forecast, which has improved. We're reforming our full year IDACORP earnings guidance range in the range of $5.25 to $5.45 diluted earnings per share. This includes our existing expectation that Idaho Power will use $35 million to $60 million of additional tax credits available to support earnings at the 9.12% return on equity in the Idaho jurisdiction. These estimates assume historically normal weather conditions and normal power supply expenses for the remainder of the year.

Thanks, Jamie, and thanks to everyone for joining us. We're off to a good start in 2024. We had some great spring skiing this year with late storms and snow in the mountains, which has the added benefit of setting us up nicely from a hydro generation perspective. Overall, despite some good snowstorms, weather was generally mild to start the year, and we saw that in our financial results compared to last year. Still, our first quarter results were on plan and we're on target for the remainder of the year on our financial guidance, as Amy mentioned. Our first quarter isn't typically one of our largest revenue quarters due to seasonality, but it does help set us up for the year. Brian will address the financial drivers for the quarter and a financial look ahead in a few minutes. I want to spend some time discussing growth, project development, our regulatory strategy and investments we're making in our system. It's an understatement to say this is an exciting time for our company and we're energized to address the challenges and capitalize on our opportunities. We continue to see customer growth and economic expansion across Idaho Power's service area. As shown on Slide 5, our customer base has grown 2.5% since last year's first quarter. Moody's is forecasting GDP growth in our region of 4.6% in 2024 and 3.6% in 2025. We believe our low electric rates and reliability continue to help our regional economy outperform national trends. As evidence of that, in its recent best states ranking, U.S. News and World Report ranked Idaho in the top 3 for growth and economic climate. Idaho Power continues to see significant interest from large projects. In terms of scale, several of them are well over 100 megawatts, and our pipeline of prospective customers is as robust as ever and on a multiple gigawatt scale. This is a great time for our economy and for our company as we work to serve incremental loads of that potential magnitude, particularly when considering our already high customer and load growth rate. Our challenge is to balance realistic timelines for building infrastructure with customers' desired in-service date given the permitting and supply chain constraints the industry has been experiencing. As we build infrastructure to reliably meet our growing customer base, we're also focused on maintaining affordability for our customers. Some potential new large load customers have recently paid for their construction studies. Those studies help ensure incremental loads bear the cost of new interconnection facilities required to serve them, which helps facilitate the growth pace for growth approach that helps from an affordability perspective for all of our customers. As noted on Slide 6, we've had productive conversations with Oregon Commission staff and with other key stakeholders as part of our general rate case in Oregon. We recently filed a motion to suspend the case as we've reached a settlement in principle with the Oregon Commission staff and other parties to the case. Details of the settlement aren't public yet. We continue to expect the resulting price changes to go into effect this October. During our last call, I mentioned our notice of intent to file for a rate case proceeding in Idaho in 2024. After what I described as positive discussions with the Idaho Commission staff and other key stakeholders, Idaho Power has decided to file a limited scope rate case on May 31 that will only look at capital additions through the end of 2024 plus labor increases. Also on the regulatory front, our annual spring rate adjustments call for price decreases in both Idaho and Oregon, mostly due to lower actual and forecasted power supply costs.

Thanks, Lisa. Hi, everybody. Thanks for tuning in for the call. Like usual, I'll start on Slide 9 as our reconciliation. IDACORP's net income decreased $7.9 million in the first quarter of this year compared to the first quarter of last year. Recall that last year's first quarter was a record quarter, and it was bolstered by weather-related higher usage and from atypically high transmission line loss revenues. Next, customer growth increased operating income by $4.7 million in the first quarter. Lisa noted that Idaho Power's customer count grew by 2.5% over the past 12 months. I'll add that the residential customer growth rate was a robust 2.8% over that period as well. We're seeing the impact of industrial growth on our system, having hit a new winter peak load in January and seeing weather normalized quarter-over-quarter growth in industrial sales volumes of 3.4% and that's despite a notable temporary decrease from one special contract customer during the quarter. Also, the net increase in retail revenues per megawatt hour, net of the various adjustments and mechanisms shown on the slide, increased operating income by $4.5 million compared to the first quarter of last year. This benefit was mostly due to the increase in base rates from the 2023 Idaho general rate case settlement, which was effective on January 1 of this year. So going the other way, the benefit from customer growth was offset by a $9.1 million decrease in usage per retail customer, which is about $0.19 of EPS compared with the first quarter of last year. While some customer classes saw a reduction in usage, usage per residential customer decreased most significantly as more moderate temperatures led residential customers to use less energy for heating purposes. And for some context on that, heating degree days were 6% below normal for the period and about 13% lower compared to last year's first quarter. So the bulk of the $0.19 comparable decline is weather-related. Next up, transmission wheeling-related revenues, net of the power cost adjustment impacts decreased $2.8 million on a relative basis. Total revenues earned during the first quarter of this year increased 12% compared with last year, which was mostly due to an increase in wheeling volumes. However, effective January 1, financial settlement of transmission line losses is subject to the PCA mechanism by virtue of the Idaho general rate case settlement, and that results in a smaller overall contribution of transmission revenues to net income compared with the first quarter of last year.

So as part of our 2026, 2027 RFP process, we procured energy through a long-term purchase agreement and we recently filed for a certificate of public convenience and necessity for a large Idaho Power-owned battery storage project. Beyond this, we continue to work through the process to negotiate with a shortlist of bidders, including our own submissions. As we look beyond 2027, we've initiated the RFP process for 2028 resources and additional RFP processes will likely be necessary to build future anticipated deficits and potentially to incorporate additional new large loads. Transmission remains vital to helping us meet demand, improve reliability and optimize the movement of energy in the West. We've experienced regulatory permitting delays on the Boardman to Hemingway project that will likely push the in-service date to 2027. We're continuing to work with our Gateway West partner on the timing and allocation of some segments and the overall configuration of the project. We're also pursuing an arrangement with interested parties in the Southwest Intertie project, which would create additional transmission capacity to the Desert Southwest. As we continue to work on these projects, we are evaluating the need for a dispatchable resource to address load growth.

In addition, Idaho Power is planning to convert its remaining coal-fired units to natural gas, which will reduce the carbon emissions of those units by about half while maintaining their generating capacity. We recently completed the conversion of 2 units at the Jim Bridger power plant in Wyoming. Those units are operational and will be available to help us serve peak load this summer. We're working with our partners to convert Valmy and address the remaining Bridger units over the next several years. This is a low-cost solution that reduces our carbon emissions while keeping dispatchable energy resources available to serve our customers. Of course, we're hard at work digesting the EPA's final rules issued last week, and we'll evaluate the impact in our analysis. It's early and we expect the rules will face legal challenges. Battery storage has already started to help us maintain reliability and affordability. The 100-megawatt Franklin solar project in Southern Idaho is scheduled to come online soon and it will include an additional 60 megawatts of company-owned battery storage. These batteries, along with the 36 megawatts of batteries coming online soon at the Hemingway substation will add to our portfolio of storage projects, which are already instrumental in integrating intermittent renewable resources onto our system.

In closing, I'll point out that as warmer weather approaches, our team and system are ready to respond; protecting our existing system is essential to maintaining safety, reliability and resilience. As highlighted on Slide 8, our Wildfire Mitigation Plan is helping us harden our system, expand our situational awareness capabilities and enhance our vegetation management program. This year, we've expanded our public safety power shutoff program zone and enhanced how we alert customers and communities about wildfire risk. We're proud of our mitigation program and we're continuously making improvements. We also continue to work with industry, federal, state and local partners in that journey. The summer brings our highest mandates of the year. And with current hydro conditions, our balanced generation portfolio, our enhanced wildfire mitigation plan and our talented employees, we feel ready to safely and reliably serve our customers with the energy they rely on.

Thanks, Lisa. Hi, everybody. Thanks for tuning in for the call. Like usual, I'll start on Slide 9 as our reconciliation. IDACORP's net income decreased $7.9 million in the first quarter of this year compared to the first quarter of last year. Recall that last year's first quarter was a record quarter, and it was bolstered by weather-related higher usage and from atypically high transmission line loss revenues. Next, customer growth increased operating income by $4.7 million in the first quarter. Lisa noted that Idaho Power's customer count grew by 2.5% over the past 12 months. I'll add that the residential customer growth rate was a robust 2.8% over that period as well. We're seeing the impact of industrial growth on our system, having hit a new winter peak load in January and seeing weather normalized quarter-over-quarter growth in industrial sales volumes of 3.4% and that's despite a notable temporary decrease from one special contract customer during the quarter.

So you've been clear in the past about maybe your reluctance to issue an EPS CAGR, but is there any forms of additional guidance or disclosures just maybe a forward financing plan even in a range form that you'll be open to initiating at some point to provide additional clarity?

Yes. I think one thing that we'll likely do going forward is when we update our capital plan, our CapEx forecast with results of the RFP and other changes that we have in terms of project timing, we'll likely reissue a rate base CAGR on that as well. And this quarter, we also included QIP so you can see the changes in the QIP balance over time for the next 5 years. And you can use that with estimates of regulatory and structural lag in that order to come up with a forecast of potential growth over time. In terms of an actual EPS forecast, our plan is to execute well in the regulatory arena and see where that takes us.

Understood. And then quickly just to tie out the CapEx updates. How should we think about the cadence of these updates? I know you mentioned in the second quarter call, should we expect that that's sort of the entire update for the year? Or I know last year, you had the third quarter and then the fourth quarter update. Can you just provide sort of any clarity on what the timing of updates throughout the year might look like?

This is Lisa. I think it will depend on how the negotiations go from the RFPs that we're currently involved with. So our hope is that an update would be available in the second quarter, but I don't know that we have a specific cadence that we're getting ready to roll out a 2028 RFP that would be sometime probably not until early next year, I would imagine that we would be making announcements there. Anything that you would add, Adam?

I think you covered it.

And Alex, what I'd add is our typical cadence was to do it only on the fourth quarter update. We did a third quarter update last year because the amount had increased so substantially remember, our CapEx adjustment, we increased our CapEx forecast by about 21% from our 2023 estimate to our 2024 estimate. So there was already a large increase. And so as we updated the 10-Q, we had a disclosure we made on the increase in CapEx there. So the update we would make in the second quarter was one we'd hope to make earlier. But just based on the timing of RFPs, I don't feel comfortable doing that yet. So looking ahead, I would expect it on an annual basis on the fourth quarter call, generally, without interim updates unless there's material changes.

Understood. Can you provide any detail on what motivated the decision to file a limited scope case instead of a full case this time? Could we possibly see this approach used more frequently in the coming years with maybe larger matters every few years? Or any additional detail on what the regulatory strategy might look like going forward?

We certainly take each year and then look at what our needs are. But in this case, since we had just finished the 2023 rate case and used a 13-month average on the capital investments, we felt like we had to come back and to shore that up. And then, of course, like all utilities, we're seeing some upward pressure on labor. So we felt like it was more sort of a true-up and then, of course, given the capital plan that we have, we'll evaluate what's needed in the next one. That, of course, depends on really what's going on in our jurisdictions at the time. So I don't know that we have a particular cadence on one than the other. It's really situational. But we're feeling good about the approach we're taking, and of course, affordability is something that we're really thinking carefully about.

Alex, what I would add to that is one thing that you've seen our track record of managing O&M pretty good that we had a 1% CAGR for quite a while. And part of that is when we look at our case going forward, there's certainly incremental L&M, but our mantra is to control that going forward. So if you look at what the building blocks of the rate case would be so long as we continue to be really prudent on our own in spending that helps with the design of the case. Also in terms of just regulatory life, we're seeing it mostly in depreciation and interest expense, as I mentioned a while ago, and so a rate base related case to focus on the assets that are in service while they're serving customers, getting recovery on those is one of our focuses for this particular case.

There are no further questions at this time. That concludes the question-and-answer session for today. Ms. Grow, I will turn the conference back to you.

Thank you all for joining us this afternoon and for your continued interest in IDACORP. I hope you all have a great evening. Thank you.

That concludes today's conference. Thank you for your participation.