IDACORP(US:IDA)2022-02-17 13:02Part I Business IDACORP, via Idaho Power, is a regulated utility serving 604,000 customers, focused on clean energy and infrastructure - IDACORP is a holding company with Idaho Power Company as its principal operating subsidiary, an electric utility serving approximately 604,000 retail customers in southern Idaho and eastern Oregon as of December 31, 2021192023 - IDACORP's business strategy is centered on Idaho Power's regulated utility operations, focusing on growing financial strength, improving the core business, enhancing the brand, and ensuring employee safety and engagement28 Idaho Power Operating Revenues and Energy Sales (2019-2021) | | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Total Electric Utility Operating Revenues (Thousands of US Dollars) | $1,455,410 | $1,347,340 | $1,342,940 | | Total Retail Energy Sales (Thousands of MWh) | 15,406 | 14,828 | 14,537 | | Total Energy Sales (Thousands of MWh) | 16,745 | 16,715 | 17,388 | Idaho Power Power Supply Mix (2019-2021) | Power Source | 2021 (% of Total) | 2020 (% of Total) | 2019 (% of Total) | | :--- | :--- | :--- | :--- | | Hydropower plants | 48% | 54% | 62% | | Coal-fired plants | 27% | 29% | 22% | | Natural gas-fired plants | 25% | 17% | 16% | - The 2021 Integrated Resource Plan (IRP) outlines a strategy to meet growing demand, including adding 1,685 MW of storage, 1,405 MW of solar, and 700 MW of wind capacity over 20 years, while exiting all coal-fired generation by the end of 202863 - IDACORP and Idaho Power are focused on Environmental, Social, and Governance (ESG) initiatives, including a goal to provide 100% clean energy by 2045 and reduce CO2 emissions intensity676870 - As of December 31, 2021, IDACORP had 1,992 full-time employees, with 1,983 employed by Idaho Power The company emphasizes a strong safety culture, ranking in the top 30% of US utilities for safety performance8284 Risk Factors The company faces regulatory, operational, legal, and financial risks, encompassing cost recovery, supply chain, climate, and security - Regulatory Risks: State or federal regulators may not approve customer rates that provide timely or sufficient recovery of Idaho Power's costs or allow it to earn a reasonable rate of return, which could adversely affect financial condition101 - Operational Risks: The ongoing impacts of COVID-19 could disrupt the supply chain, cause operational delays, and lead to attrition of skilled workers due to vaccine or testing mandates, potentially impacting service reliability107108109 - Climate & Weather Risks: Changes in weather, severe storms, droughts, and wildfires associated with climate change can damage facilities, cause service interruptions, decrease hydropower generation, and increase costs and liability115116 - Security Risks: Acts of terrorism, social unrest, and cyber or physical security attacks on generation, transmission, or IT systems could disrupt operations, compromise sensitive data, and adversely impact financial results122123 - Capital Project Risks: Significant capital expenditures for infrastructure are subject to risks including permitting delays, cost overruns, and the inability to recover costs in rates if projects are canceled or deemed imprudent by regulators128131 - Legal & Compliance Risks: The business is subject to extensive and changing environmental laws regarding climate change, air/water quality, and endangered species, which could increase compliance costs, render some generating units uneconomical, and delay major projects147148 - Financial Risks: Volatility in financial markets, a downgrade in credit ratings, or failure to meet debt covenants could negatively affect the ability to access capital, increase the cost of borrowing, and require posting additional collateral with counterparties157160 Unresolved Staff Comments The company reports that there are no unresolved staff comments from the SEC - There are no unresolved staff comments169 Properties Idaho Power's properties include generation, transmission, and distribution facilities, with 3,486 MW total capacity from diverse sources - As of December 31, 2021, Idaho Power's system includes approximately 4,843 pole-miles of high-voltage transmission lines and 28,570 pole-miles of distribution lines171 Idaho Power Generating Facilities and Nameplate Capacity | Facility Type | Nameplate Capacity (Kilowatts (kW)) | | :--- | :--- | | Total Hydropower | 1,798,914 | | Total Steam and Other | 1,687,339 | | Total Generation | 3,486,253 | Legal Proceedings Legal proceedings information is detailed in Note 11, 'Contingencies,' with a $1 million disclosure threshold for environmental sanctions - Information regarding legal proceedings is detailed in Note 11 – "Contingencies" of the consolidated financial statements180 Mine Safety Disclosures Mine safety disclosures, as required by the Dodd-Frank Act, are included in Exhibit 95.1 of the report - Mine safety disclosures required by Section 1503(a) of the Dodd-Frank Act are included in Exhibit 95.1 of this report183 Part II Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities IDACORP's common stock trades on NYSE under 'IDA', with 7,747 holders as of Feb 2022, and no Q4 2021 repurchases - IDACORP's common stock is traded on the NYSE under the symbol "IDA" As of February 11, 2022, there were 7,747 holders of record185 Five-Year Cumulative Total Shareholder Return Comparison (Value of $100 Invested on 12/31/2016) | | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | IDACORP | $100.00 | $116.43 | $121.74 | $143.27 | $132.57 | $161.01 | | S&P 500 | $100.00 | $121.82 | $116.47 | $153.14 | $181.30 | $233.30 | | EEI Electric Utilities Index | $100.00 | $111.72 | $115.82 | $145.69 | $144.00 | $168.65 | Management's Discussion and Analysis of Financial Condition and Results of Operations IDACORP's 2021 net income increased to $245.6 million due to customer growth, with $2.8 billion in planned capital expenditures IDACORP Financial Summary (2019-2021) | | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Total Operating Revenues (Thousands of US Dollars) | $1,458,084 | $1,350,729 | $1,346,383 | | Operating Income (Thousands of US Dollars) | $329,651 | $309,521 | $298,326 | | Net Income Attributable to IDACORP, Inc. (Thousands of US Dollars) | $245,550 | $237,417 | $232,854 | | Earnings Per Share - Diluted (US Dollars) | $4.85 | $4.69 | $4.61 | - The $8.2 million increase in IDACORP's 2021 net income was primarily driven by a $16.0 million increase from customer growth and a $13.4 million increase from higher usage per customer, partially offset by a $13.4 million decrease from lower retail revenues per MWh and a $9.2 million increase in O&M expenses202203204 - Idaho Power set a new all-time system peak demand of 3,751 MW on June 30, 2021, driven by a 2.8% growth in customer count and a heat wave195212 - The company plans significant capital expenditures estimated at up to $2.8 billion over the 2022-2026 period to enhance infrastructure, maintain reliability, and serve new customers244 - Idaho Power's 2021 IRP indicates a near-term resource capacity deficit, prompting plans to acquire 120 MW of battery storage and issue RFPs for additional resources to meet needs for 2023-2025, with potential capital investment over $400 million210280 - The company is actively pursuing two major transmission projects: the Boardman-to-Hemingway line (expected in-service no earlier than 2026) and the Gateway West project281289 - Idaho Power is engaged in the significant and costly relicensing process for the Hells Canyon Complex (HCC), its largest hydropower source, with annual costs estimated at $30-$40 million until a new license is issued, likely in 2024 or later291343 Quantitative and Qualitative Disclosures About Market Risk IDACORP and Idaho Power face interest rate, commodity, credit, and equity price risks, managed through various mitigation strategies - The company is exposed to interest rate risk, commodity price risk (electricity and fuel), credit risk, and equity price risk418 - Commodity price risk is largely mitigated by power cost adjustment mechanisms in Idaho and Oregon, as well as an energy risk management program that uses physical and financial forward contracts422424 - If Idaho Power's credit rating were to fall below investment grade, it could be required to post additional collateral of approximately $25.7 million based on its portfolio and market conditions as of December 31, 2021275428 - Equity price risk exposure comes primarily from assets held in Idaho Power's defined benefit pension plan and a mine reclamation trust fund431 Financial Statements This section presents consolidated financial statements for IDACORP and Idaho Power, including income, balance sheets, cash flows, equity, and auditor reports IDACORP, Inc. Consolidated Statements of Income (Thousands of US Dollars) | | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Total operating revenues | $1,458,084 | $1,350,729 | $1,346,383 | | Operating Income | $329,651 | $309,521 | $298,326 | | Net Income Attributable to IDACORP, Inc. | $245,550 | $237,417 | $232,854 | | Earnings Per Share - Diluted | $4.85 | $4.69 | $4.61 | Idaho Power Company Consolidated Statements of Income (Thousands of US Dollars) | | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Operating Revenues | $1,455,410 | $1,347,340 | $1,342,940 | | Operating Income | $329,568 | $308,780 | $297,652 | | Net Income | $243,225 | $233,235 | $224,437 | IDACORP, Inc. Consolidated Balance Sheets - Assets (Thousands of US Dollars) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total current assets | $595,873 | $642,401 | | Property, plant and equipment - net | $4,901,822 | $4,709,510 | | Total assets | $7,210,515 | $7,095,244 | IDACORP, Inc. Consolidated Balance Sheets - Liabilities and Equity (Thousands of US Dollars) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total current liabilities | $325,624 | $287,571 | | Long-Term Debt | $2,000,640 | $2,000,414 | | Total equity | $2,675,234 | $2,566,456 | | Total Liabilities and Equity | $7,210,515 | $7,095,244 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting principles, financial disclosure, or auditing scope - None reported694 Controls and Procedures IDACORP and Idaho Power's disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management of both IDACORP and Idaho Power concluded that their disclosure controls and procedures were effective as of December 31, 2021696709 - Based on the COSO framework, management concluded that internal control over financial reporting was effective as of December 31, 2021 for both entities699712 - The independent registered public accounting firm issued an unqualified opinion on the effectiveness of internal control over financial reporting for both IDACORP and Idaho Power700713 - No changes in internal control over financial reporting occurred during the fourth quarter of 2021 that materially affected, or are reasonably likely to materially affect, internal controls721 Other Information The company reports no other information for this item - None723 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable724 Part III Directors, Executive Officers, and Corporate Governance Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 proxy statement - This section incorporates by reference information from the company's definitive proxy statement for the 2022 annual meeting of shareholders726 Executive Compensation Information regarding executive compensation is incorporated by reference from the 2022 proxy statement - This section incorporates by reference information from the company's definitive proxy statement for the 2022 annual meeting of shareholders728 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security ownership information is incorporated by reference from the 2022 proxy statement, detailing outstanding and available equity awards Equity Compensation Plan Information (as of Dec 31, 2021) | Plan Category | Securities to be issued upon exercise | Securities remaining available for future issuance | | :--- | :--- | :--- | | Equity compensation plans approved by shareholders | 211,519 | 443,663 | | Equity compensation plans not approved by shareholders | — | — | | Total | 211,519 | 443,663 | Certain Relationships and Related Transactions, and Director Independence Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2022 proxy statement - This section incorporates by reference information from the company's definitive proxy statement for the 2022 annual meeting of shareholders733 Principal Accountant Fees and Services Principal accountant fees for Idaho Power totaled $1.56 million in 2021, with the Audit Committee pre-approving all services for independence Idaho Power Principal Accountant Fees (Thousands of US Dollars) | Fee Type | 2021 | 2020 | | :--- | :--- | :--- | | Audit fees | $1,526,750 | $1,531,235 | | Tax fees | $19,885 | $16,121 | | All other fees | $12,050 | $1,895 | | Total | $1,558,685 | $1,549,251 | - The Audit Committee has a pre-approval policy for all audit and non-audit services to ensure the independence of the independent registered public accounting firm738 Part IV Exhibits and Financial Statement Schedules This section lists all exhibits and financial statement schedules included with or incorporated by reference into the Form 10-K - This section provides a comprehensive list of all exhibits and financial statement schedules included with or incorporated by reference into the Form 10-K744746 Form 10-K Summary The company reports no summary for this item - None762