IDACORP INC

IDACORP is a holding company incorporated in 1998 under the laws of the state of Idaho, and its principal operating subsidiary is Idaho Power, an electric utility engaged in the generation, transmission, distribution, sale, and purchase of electric energy and capacity. Idaho Power is regulated by the state regulatory commissions of Idaho and Oregon and by the FERC. The electric utility industry is highly regulated, with rates determined on a cost-of-service basis designed to provide an opportunity for Idaho Power to earn a reasonable return on investment after recovery of allowable operating expenses. Idaho Power's service area covers approximately 24,000 square miles with an estimated population of 1.4 million, and as of December 31, 2025, it provided electric utility service to approximately 664,000 retail customers in southern Idaho and eastern Oregon, of which approximately 561,000 are residential. The industry faces structural forces including weather variability, hydrological conditions affecting hydropower generation, commodity price volatility for fuel and purchased power, and the rapid addition of new industrial customer load.

Idaho Power's electric utility business has historically been recognized as a regulated monopoly, but it competes with fuel distribution companies, including natural gas providers, and faces competition from alternative methods of generation such as customer-owned solar and other forms of distributed generation. Idaho Power also participates in wholesale energy markets and electricity transmission markets regulated by the FERC. The company's competitive advantages include its diversified generation resources, regulatory cost recovery mechanisms such as power cost adjustment mechanisms and the FCA mechanism, and its focus on safe, reliable, and affordable energy. Idaho Power's residential and business customer satisfaction remains strong; in 2025, it was the highest ranked utility among peers in the segment for overall customer satisfaction in a third-party survey, and was the second highest in the segment for business customer satisfaction, and the second highest in the segment for residential customer satisfaction in a separate third-party survey.

IDACORP generates revenue primarily through Idaho Power's sale of electricity to retail and wholesale customers and the provision of transmission service. Approximately 95 percent of Idaho Power's retail revenue originates from customers located in Idaho, with the remainder originating from customers located in Oregon. Retail revenues are earned from residential, commercial, industrial, and irrigation customer classes, with weather, seasonal customer demand, energy efficiency, customer generation, customer growth, and economic conditions all impacting sales volumes. Wholesale energy sales depend largely on the availability of generation resources above the amount necessary to serve customer loads as well as market power prices. The company also generates revenue from transmission wheeling services under its FERC-approved OATT and from energy efficiency program revenues. IDACORP's other notable subsidiaries include IFS, an investor in affordable housing and other real estate tax credit investments, and Ida-West, an operator of small PURPA-qualifying hydropower generation projects.

Idaho Power's utility operations constitute nearly all of IDACORP's current business operations. For the year ended December 31, 2025, total electric utility operating revenues were $1,809,609,000 ¹, consisting of retail revenues of $1,556,358,000 ², wholesale energy sales of $55,989,000 ³, transmission wheeling-related revenues of $72,231,000 ⁴, energy efficiency program revenues of $30,480,000 ⁵, and other revenues of $94,551,000 ⁶. Retail revenues by customer class included residential $708,126,000 ⁷, commercial $394,313,000 ⁸, industrial $270,571,000 ⁹, and irrigation $198,468,000 ¹⁰, with deferred revenue related to HCC relicensing AFUDC of $(15,120,000) ¹¹. Total retail energy sales were 16,177,000 MWh ¹² and total energy sales were 19,074,000 MWh ¹³. Idaho Power primarily relies on company-owned hydropower, gas-fired, and coal-fired generation facilities, energy storage, and long-term PPAs to supply energy. Total system generation was 13,612,000 MWh ¹⁴, comprising hydropower 7,021,000 MWh ¹⁵, jointly-owned thermal 2,906,000 MWh ¹⁶, and natural gas-fired 3,685,000 MWh ¹⁷. Purchased power was 6,783,000 MWh ¹⁸. As of December 31, 2025, Idaho Power had 2,174 full-time employees ¹⁹, 2,166 of whom were employed by Idaho Power and 8 by Ida-West, and 11 part-time employees ²⁰.

In 2025, IDACORP achieved net income growth for an eighteenth consecutive year. Idaho Power's customer count grew 2.3 percent ²¹ in 2025 and MWh sales to retail customers were the highest in its history. In September 2025, IDACORP's board of directors approved an increase in the regular quarterly cash dividend on IDACORP's common stock from $0.86 per share to $0.88 per share ²², as part of a 193 percent increase in quarterly dividends approved over the last fourteen years. Idaho Power entered into several transactions to meet growing capacity and energy needs, including an agreement to purchase the output of a 100 MW solar facility coupled with a 100 MW battery energy storage agreement with a scheduled online date of June 2027, an agreement to acquire an ownership interest in 250 MW and rights to an additional 250 MW of northbound capacity on SWIP-N, and an agreement to purchase the output of an 80 MW solar facility with a scheduled online date of June 2027. During 2025, Idaho Power commenced construction on the B2H transmission line with an expected in-service date of late 2027, began receiving power under a 20-year agreement to utilize storage capacity from a third-party 150 MW battery storage facility, and 80 MW of company-owned battery storage facilities came online with another 250 MW of company-owned battery storage commencing construction. In September 2025, Idaho Power filed a CPCN request with the IPUC for 167 MW of natural gas-fueled generating capacity next to the existing Bennett Mountain power plant with an expected in-service date in 2028. On February 13, 2026, Idaho Power entered into a definitive agreement to sell its Oregon electric distribution business and associated distribution assets, as well as certain Oregon transmission assets, to OTEC.

IDACORP's net income attributable to IDACORP for the year ended December 31, 2025, was $323,472,000 ²³, compared to $289,174,000 ²⁴ in 2024 and $261,195,000 ²⁵ in 2023. Idaho Power net income was $315,862,000 ²⁶ in 2025, compared to $280,605,000 ²⁷ in 2024 and $256,810,000 ²⁸ in 2023. IDACORP earnings per diluted share were $5.90 ²⁹ in 2025, compared to $5.50 ³⁰ in 2024 and $5.14 ³¹ in 2023. Total operating revenues were $1,812,997,000 ³² in 2025, compared to $1,826,633,000 ³³ in 2024 and $1,766,356,000 ³⁴ in 2023. Operating income was $353,976,000 ³⁵ in 2025, compared to $327,839,000 ³⁶ in 2024 and $313,477,000 ³⁷ in 2023. Net cash provided by operating activities was $601,838,000 ³⁸ in 2025, compared to $594,417,000 ³⁹ in 2024 and $267,027,000 ⁴⁰ in 2023.

Idaho Power's primary growth vector is the significant increase in customer count and load in its service area, driven by population growth and the rapid addition of new industrial and commercial customers. The 2025 IRP load forecast assumptions include a 5-year forecasted annual growth rate for retail sales of 8.3% ⁴¹ and for annual peak demand of 5.1% ⁴², and a 20-year forecasted annual growth rate for retail sales of 2.7% ⁴³ and for annual peak demand of 1.9% ⁴⁴. The 2025 IRP preferred resource portfolio provided for 4,071 MW ⁴⁵ of additional resource capacity, including 1,161 MW ⁴⁶ of natural gas generation, 1,445 MW ⁴⁷ of solar, 700 MW ⁴⁸ of wind, 885 MW ⁴⁹ of storage, 344 MW ⁵⁰ of additional energy efficiency, and 20 MW ⁵¹ from demand response. Idaho Power is pursuing three significant transmission projects: the B2H project, a 300-mile high-voltage transmission line with total cost estimates between $1.5 billion and $1.7 billion ⁵² including AFUDC, expected in-service by late 2027; the GWW project, with Idaho Power's share of the Hemingway-to-Midpoint segment estimated between $900 million and $1.1 billion ⁵³ including AFUDC, expected in-service 2028 or later; and the SWIP-N project, a planned 285-mile high-voltage transmission line in which Idaho Power will purchase an approximate 11 percent ownership interest ⁵⁴, expected construction completion in 2028 or thereafter.

Idaho Power's second major growth vector is the addition of generation and storage resources to address projected energy and capacity deficits. Through 2025, 307 MW ⁵⁵ of company-owned battery storage were installed, with another 250 MW ⁵⁶ expected to be in service by the end of 2026. Idaho Power commenced a 20-year agreement to utilize storage capacity from a 150 MW ⁵⁷ battery storage facility that came online in May 2025 and has a 20-year agreement to utilize storage capacity from a 100 MW ⁵⁸ battery storage facility scheduled to be online in April 2027. Idaho Power entered into four PPAs for a combined 625 MW ⁵⁹ output of planned third-party solar facilities. The company also entered into an energy and capacity market purchase agreement giving Idaho Power the right to acquire 200 MW ⁶⁰ on a daily basis during summer months beginning in 2026 for a term of at least five years. Idaho Power's 2025 IRP identified a preferred resource portfolio that includes the complete conversion from coal to natural gas generation by 2030, with the conversion of North Valmy unit 2 expected to be completed by mid-2026 and the conversion of the remaining two units at the Jim Bridger plant in 2030.

Other O&M expenses in 2025 were $9.6 million ⁶¹ higher than in 2024, driven primarily by inflationary pressures on labor-related costs, professional services, and increases in statutory fees assessed by regulators. Depreciation and amortization expense increased $27.7 million ⁶² in 2025 compared with 2024, due primarily to an increase in plant-in-service. Idaho Power expects to incur increasing costs for construction of new facilities and transmission resources, O&M, compliance with legal and regulatory requirements, and pension contributions, which is likely to occur before regulators approve recovery of those costs. The company's power cost adjustment mechanisms mitigate in large part the earnings impacts of volatile fuel and power costs, but collection from customers or return to customers of most of the difference between actual power supply costs compared with those included in retail rates is deferred to a subsequent period, affecting operating cash flow and liquidity.

Idaho Power's estimate of capital expenditures from 2026 to 2030 is in the range of $6.3 billion to $7.2 billion ⁶³. Expected capital expenditures excluding AFUDC for 2026 are $1.3 - 1.5 billion ⁶⁴, for 2027 are $1.4 - 1.6 billion ⁶⁵, and for 2028-2030 are $3.6 - 4.1 billion ⁶⁶. Idaho Power expects its capital expenditures on infrastructure investments in the next five years or more will be considerable as it works to address projected energy and capacity deficits. The level of investments that Idaho Power expects to make in capital improvements and expenditures for infrastructure projects over the next five years is over $1.2 billion per year on average ⁶⁷. Idaho Power contributed $20 million ⁶⁸ in 2025 and $20 million ⁶⁹ in 2024 to its defined benefit pension plan, and estimates that it has no minimum required contribution to be made during 2026, though it could contribute up to $30 million ⁷⁰ during 2026.

IDACORP's board of directors approved an increase in the regular quarterly cash dividend from $0.86 per share to $0.88 per share ⁷¹ in September 2025. IDACORP has a dividend policy that provides for a target long-term dividend payout ratio of between 60 percent and 70 percent ⁷² of sustainable IDACORP earnings, but in September 2025 adjusted the near-term target payout ratio to between 50 percent and 60 percent ⁷³ of IDACORP earnings, considering Idaho Power's financing needs. IDACORP's dividends during 2025 were 58.6 percent ⁷⁴ of actual 2025 earnings. IDACORP has over $600 million ⁷⁵ of FSAs outstanding from forward sales of its common stock. As of February 13, 2026, if IDACORP had elected to physically settle by delivering shares of common stock, aggregate cash proceeds from all outstanding FSAs would have been approximately $610 million ⁷⁶. IDACORP's ATM offering program had a remaining aggregate gross sales price of up to $155 million ⁷⁷ in shares of IDACORP common stock available for issuance as of February 13, 2026.

Structural headwinds include the potential for state or federal regulators to not approve customer rates that provide timely or sufficient recovery of Idaho Power's costs or allow Idaho Power to earn a reasonable rate of return. The ratemaking process typically involves multiple intervening parties with the common objective of limiting rate increases or even reducing rates. Idaho Power's regulatory cost recovery mechanisms may not function as intended and are subject to change or elimination. The power cost adjustment mechanisms do not eliminate the cash flow impact of power supply cost volatility; when power costs rise above the level recovered in current retail rates, Idaho Power incurs the costs but recovery is deferred to a subsequent collection period, adversely affecting operating cash flow and liquidity. Changes in weather conditions, severe weather, and the impacts of climate change can affect operating results, including increased frequency and severity of wildfires, droughts, and extreme weather events that could damage facilities and increase costs. Liability from fires could adversely impact business, financial condition, and results of operations, and Idaho Power's WMP and other protocols may not prevent such liability.

Geographic and regulatory constraints include Idaho Power's concentration in one region, exposing it to risks from lack of diversification, regional economic conditions, and regional legislation and regulation. Following completion of the Oregon Sale, Idaho Power's provision of electric service to retail customers will be conducted exclusively in its southern Idaho service area. The company faces risks related to the rapid addition of new industrial customer load and the volatility of such new load demand, which could result in excess infrastructure and stranded costs if the new load does not meet forecasted power usage ramp rates or amounts. Conversely, unanticipated increases in demand could require Idaho Power to rely on higher-cost purchased power and accelerate investment in additional resources. Idaho Power's heavy reliance on hydropower generation exposes it to variable hydrological conditions; the company estimates 2026 annual generation from its hydropower facilities will be between 5.5 million MWh and 7.5 million MWh ⁷⁸, compared with 7.0 million MWh ⁷⁹ in 2025 and average total annual hydropower generation of approximately 7.3 million MWh ⁸⁰ over the last 20 years.

State or federal regulators may not approve customer rates that provide timely or sufficient recovery of Idaho Power's costs or allow Idaho Power to earn a reasonable rate of return, which could adversely affect financial condition and results of operations. The IPUC and OPUC may not allow Idaho Power to recover some or all costs if they find Idaho Power did not reasonably or prudently incur those costs. Idaho Power's regulatory cost recovery mechanisms, including the power cost adjustment mechanisms and FCA mechanism, are subject to change or elimination at the discretion of applicable state regulators. Liability from fires could adversely impact business, financial condition, and results of operations; Idaho Power maintains insurance coverage for such risks, but coverage limits within its wildfire insurance policies could result in material self-insured costs. The company faces risks related to the rapid addition of new industrial customer load; if the new load does not meet forecasted power usage ramp rates or amounts, the loss of load may result in excess infrastructure and stranded costs and require Idaho Power to modify or eliminate large generation, storage, or transmission projects. Idaho Power's heavy reliance on hydropower generation exposes it to variable hydrological conditions; during 2025 and 2024, 52 percent ⁸¹ and 54 percent ⁸², respectively, of Idaho Power's electric power from Idaho Power-owned generation was from hydropower facilities. Changes in weather conditions, severe weather, and the impacts of climate change can affect operating results, including increased frequency and severity of wildfires, droughts, and extreme weather events that could damage facilities and increase costs.

Management's message emphasizes IDACORP's commitment to competitive total returns and generating long-term value for shareholders, with a business strategy focused on four areas: keeping employees safe and engaged, growing financial strength, improving Idaho Power's core business, and enhancing Idaho Power's brand. Key themes include achieving net income growth for an eighteenth consecutive year in 2025, customer count growth of 2.3 percent ⁸³, and record MWh sales to retail customers. Management highlights the approval of the 2025 Settlement Stipulation by the IPUC in December 2025, providing for revised tariff schedules designed to increase annual Idaho-jurisdictional retail revenue by approximately $110.0 million ⁸⁴, or 7.48 percent ⁸⁵, effective January 1, 2026. Strategic priorities emphasized for the period ahead include timely recovery of costs and earning a reasonable return on investment through regular rate case filings, significant infrastructure investments to address growth and reliability needs including the B2H, GWW, and SWIP-N transmission projects and resource additions, and maintaining a focus on safety, reliability, and customer satisfaction. Management also notes the adjustment of the near-term target dividend payout ratio to between 50 percent and 60 percent ⁸⁶ of IDACORP earnings, considering Idaho Power's financing needs to fund its capital investments and ongoing operations.