Business Overview: A Storied Legacy of Powering the West
IDACORP Inc. (IDA) is an electric utility holding company that has been powering homes and businesses in the western United States for over a century. Founded in 1915 and headquartered in Boise, Idaho, IDACORP's principal operating subsidiary is Idaho Power Company, which serves nearly 650,000 customers across southern Idaho and eastern Oregon. Through its unwavering commitment to innovation, reliability, and sustainable practices, IDACORP has established itself as a leader in the utility industry, consistently delivering value to its shareholders and the communities it serves.
IDACORP's origins can be traced back to 1915 when Idaho Power Company was first incorporated as a Maine corporation. The company began operations in 1916, providing electric utility service to customers in southern Idaho and eastern Oregon. Over the decades, Idaho Power faced various challenges and achieved significant milestones as it grew to become a major player in the region's energy sector.
In 1998, IDACORP was established as the holding company for Idaho Power, allowing the utility to focus on its core electric operations while IDACORP pursued other business opportunities. This organizational change led to the creation of subsidiaries such as IFS, which invests in affordable housing and other real estate tax credit investments, and Ida-West, an operator of small PURPA-qualifying hydropower generation projects.
Throughout its history, IDACORP and Idaho Power have had to navigate a complex regulatory environment at both the state and federal levels. The companies have worked closely with the Idaho Public Utilities Commission, the Oregon Public Utility Commission, and the Federal Energy Regulatory Commission to secure approvals for infrastructure investments, rate changes, and other operational matters. One significant ongoing regulatory proceeding has been the relicensing of Idaho Power's Hells Canyon hydropower complex, an effort that began in 2003 and continues to this day.
Environmental compliance has been another key focus area for IDACORP and Idaho Power. The companies have made substantial investments to upgrade pollution control equipment and have had to adapt to evolving environmental regulations, particularly those related to air and water quality standards. These challenges have influenced major operational decisions, such as the cessation of coal-fired operations at certain plants, including the Boardman plant in 2020.
Financial Performance: Consistent Growth and Shareholder Value
IDACORP's financial performance has been marked by consistent growth and a steadfast commitment to creating shareholder value. In the fiscal year 2024, the company reported revenue of $1.82 billion and net income of $289.2 million, or $5.50 per diluted share, compared to $261.2 million, or $5.14 per diluted share, in 2023. This strong financial performance was driven by several key factors, including robust customer growth, effective rate changes, and the strategic use of tax credits under IDACORP's regulatory mechanisms.
For the fourth quarter of 2024, IDACORP reported revenue of $460 million and net income of $37.9 million. The company's year-over-year growth in Q4 2024 revenue was 10.8% compared to Q4 2023, primarily driven by higher retail rates and continued customer growth.
Liquidity and Balance Sheet Strength
IDACORP's balance sheet remains solid, with a debt-to-equity ratio of 0.92 as of December 31, 2024. The company's operating cash flow for the year ended December 31, 2024, was $594.4 million, while free cash flow stood at -$414.9 million, reflecting the company's significant capital investment initiatives to support its growing customer base and aging infrastructure.
As of December 31, 2024, IDACORP had $368.9 million in cash and cash equivalents. The company maintains strong liquidity with a $100 million revolving credit facility, while Idaho Power has a $400 million revolving credit facility. Both facilities were undrawn at the end of 2024. IDACORP's current ratio stands at 1.41, with a quick ratio of 1.06, indicating a healthy short-term financial position.
Operational Highlights: Embracing the Future of Energy
IDACORP's commitment to innovation and sustainable practices is evident in its operational achievements. In 2024, the company added nearly 200 MW of solar and battery storage capacity to its generation fleet, further diversifying its energy mix and reducing its carbon footprint. Additionally, IDACORP made significant progress on major transmission projects, such as the Boardman-to-Hemingway line and the Gateway West project, which will enhance the reliability and resilience of its electric grid.
One of the most notable operational highlights was IDACORP's ability to meet the growing energy demands of its service area, which experienced a 2.6% increase in customer growth in 2024. The company's proactive approach to resource planning, as evidenced by its 2023 Integrated Resource Plan, has positioned it to meet this rising demand through a combination of renewable energy, energy efficiency programs, and strategic infrastructure investments.
Idaho Power's utility operations segment is the primary driver of IDACORP's business and financial results. In 2024, Idaho Power's retail energy sales volumes increased 3% compared to 2023. Residential customers make up the largest portion at around 547,000, followed by commercial, industrial, and irrigation customers. Residential sales represented the largest portion at 5.96 million MWh, followed by commercial, industrial, and irrigation sales.
Idaho Power derives a significant portion of its power supply from its own hydropower facilities, which provided 54% of its total system generation in 2024. The company's total system generation increased 13% compared to 2023, due primarily to higher natural gas and hydropower generation. Idaho Power continues to reduce its reliance on coal-fired generation, with plans to convert or retire its jointly-owned coal plants by 2030 as part of its strategy to provide 100% clean energy by 2045.
Regulatory Landscape: Navigating the Complexities of the Utility Industry
As a regulated utility, IDACORP operates in a highly complex and ever-evolving regulatory environment. The company's ability to effectively navigate this landscape has been crucial to its success. In 2024, IDACORP secured several favorable regulatory outcomes, including the approval of a limited-issue rate case in Idaho, which increased annual Idaho-jurisdictional retail revenue by $50.1 million, or 3.7%, effective January 1, 2025.
Additionally, the company's 2024 Oregon general rate case resulted in a $6.7 million, or 12.14%, increase in annual Oregon-jurisdiction revenue, effective October 15, 2024. These rate adjustments have helped IDACORP maintain its position as a low-cost provider, with residential and commercial rates that are 20-30% below the national average.
Looking Ahead: Powering the Future with Confidence
As IDACORP looks to the future, the company remains focused on executing its strategic priorities and delivering value to its shareholders and customers. The company's robust capital investment plan, which includes an estimated $5.6 billion in spending over the next five years, will enable it to accommodate its rapidly growing customer base, modernize its infrastructure, and further diversify its energy portfolio.
IDACORP's 2025 earnings guidance reflects the company's confidence in its ability to navigate the challenges and opportunities ahead. The company has initiated a full-year 2025 earnings guidance range of $5.65 to $5.85 per diluted share, which includes the expected use of $60 million to $77 million in additional investment tax credit amortization to support earnings. This guidance assumes normal weather conditions and power supply expenses throughout 2025.
For 2025, IDACORP expects full-year operations and maintenance expenses to be in the range of $465 million to $475 million. The company anticipates spending between $1 billion and $1.1 billion on capital expenditures in 2025. Additionally, IDACORP expects 2025 hydropower generation to be within the range of 6.5 million to 8.5 million MWh.
Conclusion: A Utility Leader Poised for Continued Success
IDACORP's long-standing history, consistent financial performance, and unwavering commitment to innovation and sustainability have positioned the company as a leader in the utility industry. As it continues to power the growth and development of the western United States, IDACORP remains well-equipped to navigate the evolving regulatory landscape, meet the changing energy needs of its customers, and deliver superior value to its shareholders.
The company's diversified business model, with the regulated utility operations as the primary driver, has supported IDACORP's consistent financial performance. With approximately 95% of its retail revenue originating from customers located in Idaho, IDACORP benefits from the state's strong economic growth and increasing population. The electric utility industry has seen a compound annual growth rate of 2-3% in recent years, driven by moderate customer growth and rate increases to support infrastructure investments, and IDACORP is well-positioned to capitalize on these trends.
IDACORP's subsidiary, IFS, continues to contribute to the company's financial performance through its investments in real estate tax credit projects. In 2024, IFS generated $7.5 million in tax credits, providing additional financial benefits to the company. Another subsidiary, Ida-West Energy, operates and has a 50% ownership interest in nine small hydropower projects with a total nameplate capacity of 44 MW, further diversifying IDACORP's energy portfolio.
As IDACORP moves forward, its strong financial position, strategic investments in clean energy, and commitment to customer service position the company for continued success in the evolving energy landscape. With a clear vision for the future and a proven track record of delivering value, IDACORP remains a compelling investment opportunity in the utility sector.