Welcome to the IDACORP's Fourth Quarter 2017 Conference Call. Today's call is being recorded and webcast live. A complete replay will be available from the end of the day for a period of 12 months on the company's website at idacorpinc.com. [Operator Instructions]. Now I will turn the call over to Justin Forsberg, Director of Investor Relations. Please go ahead.

Thanks, Stephen. Before the markets open today, we issued and posted to the IDACORP website both our fourth quarter 2017 earnings release and our Annual Report on Form 10-K. The slides we'll be using to supplement today's call are also available on our website. We'll refer to those slides by number during the call. As noted on Slide 2, our presentation today will include forward-looking statements, which represent our current views on what the future holds. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today, some of which are listed on Slide 2, and are supplemented by information in our filings with the Securities and Exchange Commission, which we encourage you to review. We caution you against placing undue reliance on any forward-looking statements. As noted on Slide 3, on today's call, we have Darrel Anderson, our President and Chief Executive Officer; and Steve Keen, our Senior Vice President, Chief Financial Officer and Treasurer; along with other individuals available to help answer your questions during the question-and-answer period. On Slide 4, we present our quarterly and annual financial results. IDACORP's 2017 fourth quarter earnings per diluted share were $0.77, an increase of $0.11 per share from last year's fourth quarter. For the full year 2017, earnings per diluted share were $4.21, $0.27 higher than 2016. I will now turn the presentation over to Steve.

Thanks, Justin. We are pleased to announce that 2017 earnings exceeded our internal expectations and resulted in IDACORP's tenth consecutive year of earnings growth. We also note that the midpoint of our opening guidance for 2018 is $0.20 higher than where we opened last year, which is a 5% improvement. This is stronger year-over-year growth in that metric than we've seen recently and reflects our balanced regulatory outcomes and continued customer growth. I'll walk through the earnings drivers in a moment, but I want to take some time to reflect on how hard our team has worked for positive outcomes for all stakeholders over the past year. Throughout 2017, we worked with the staff at the Idaho and Oregon regulatory commissions and various interested parties on several challenging but important items. The collaborative outcomes of the North Valmy settlement stipulations of both states were positive. They allow us to prepare for an end to Idaho Power's participation in that coal-fired plant while ensuring the company receives a reasonable return on its investment. We also believe that the settlement stipulation we filed in relation to the Hells Canyon Complex prudence review in Idaho, if approved by the commission, adds more certainty for Idaho Power as we work towards completing the relicensing process over the next few years. It was a productive and challenging year, and I thank everyone for their efforts. Looking ahead, we will continue to work with the state regulatory commissions on a reasonable method to return the benefit of expected lower future federal income tax expense to our customers while ensuring Idaho Power's continued financial health. With that, let's review last year's earnings. On Slide 5, you'll see a reconciliation of income from 2016 to 2017. Operating income at Idaho Power increased by $35.6 million. This was partly…

Thanks, Steve, and thanks, everyone, for joining us on our call today. 2017 was a year filled with growth and success, both for Idaho Power and for our service area. I'd like to start with a few statistics to illustrate some of our encouraging growth trends. As Steve mentioned, Idaho Power saw customer growth in 2017 of 2%. As you can see in the U.S. Census Bureau map on Slide 8, Idaho's 2.2% population growth makes it the fastest-growing state in the nation. In addition, business and economic growth remained strong. Unemployment in our service area was 3% in December 2017 compared with 4.1% at the national level. Compared to this time last year, employment in our service area increased approximately 3.7%. Gross domestic product grew 4.5% over last year's fourth quarter in Idaho Power's service area, while Moody's Analytics projects 2018 and 2019 GDP growth to be 4.5% and 3.4%, respectively. National publications continue to recognize parts of our service area for actual and potential future growth. Milken Institute ranked Boise #3 for year-over-year job growth in its 200 best large cities index, while USA TODAY included Meridian, Idaho, one of the largest cities in our service area and the state, among its top 25 cities in America. Most recently, I'd like to point to an Idaho Statesman article highlighting how outside investors are driving growth and development in the greater Boise area. Outside investment, industrial construction, evolving office spaces and an uptick in hotels are just a few of the factors leading the Boise area real estate sector. Turning to Slide 9, economic development continues to bring great opportunities for new large-load projects. Currently, Capitol Distributing is constructing an approximately 200,000 square foot distribution center at Sky Ranch Business Park in Caldwell, Idaho, that will serve 234 Jacksons…

[Operator Instructions]. And our first question comes from Chris Ellinghaus with Williams Capital.

Steve, a couple -- can I get a couple of clarifications on things. You mentioned, $2.5 million was an adder to O&M. That $2.5 million, I presume, is the after tax amount from the Hells Canyon charge from the settlement?

That's a pretax charge.

Yes, the $2.5 million is pretax?

Yes, pretax, yes.

Okay. What happened to the $4.3 million that was from the 8-K?

[Indiscernible] AFUDC?

Are you talking just AFUDC or the whole -- there's two portions that were impacted from Hells Canyon.

Just from my recollection, the 8-K said there will be a $4.3 million pretax expense in the fourth quarter?

Yes. It's an estimate and I think it included that and some O&M costs that were just specifically set aside. So it's two portions, I believe, that get to the $4 million.

Okay. You go with the $2.5 million pretax?

It's roughly $4 million in total as I recall.

Okay. What was the -- there was another item. You said something about there was an offset right after that, I didn't quite catch what you were talking about.

We also had a positive benefit to the O&M in that we got allowed roughly $2 million, $2.5 million for the labor cost related to our demand-side management program. And this is something that had been looked at in the past, hadn't been specifically disallowed, but we had expensed those items as we went along, and that underwent a review this year and we were allowed to take that and basically, the funds were funded by the rider. So it replaced them all.

And then you said tax reform was about a $2 million hit in the quarter?

Yes. That was the effect on Idaho Power, and it related to what we needed to do at the end of the year, trueing up balances. When the tax reform was adopted in '17, we had to make sure the balance sheet got corrected. And just a little guidance there with -- as you know, for the most part, we don't have as many unprotected balances. But all of our, really, short-term timing differences, for instance, our -- the mechanisms for the PCA and that sort of items that turn within a real short time, those do carry deferred taxes and they had to be corrected.

Right. Okay. As far as hydro goes, you were talking about a couple of things that seem to be a little bit opposed in terms of snowpack versus where reservoirs are. How would you characterize your current standing versus this time last year?

Chris, I'll give you the -- my sight is that I believe we aren't seeing the phenomenal year in terms of snowpack that we had last year, is extremely strong, but the difference is we have a very strong reservoir storage this year and the snowpack, while it's not quite normal, is looking pretty good and it is still coming, so I think it's a little early to judge it as a problem at all. And the reservoirs are very full such that the carryover alone probably takes care of most of needs this year and really, you're looking for a snowpack to replenish it so that you're looking good going into next year as well.

Chris, this is Darrel. If you look the numbers Steve shared on estimated hydro gen for -- in the guidance we gave you, which is 7.5 million to 9.5 million megawatt-hours, and you look at the actual numbers that we did, which is 8.9 million megawatt-hours in this last year with the snowpack that we did have. So if you look in and around the midpoint of that number, we're not that far off of where we ended up this year and mainly benefiting from the significant carryover. And another thing is, again, we just got a big dumping of snow last night and today, and so we're still in that snow accumulation period. So while we -- I would say, we started out the year slow, we still have another month or two of snow accumulation potential that's out there that could continue to help enhance that, which is why we have that range of 7.5 million megawatt-hours to 9.5 million megawatt-hours. So there's -- but we are -- as Steve said, we have really good reservoir carryover where we sit today, and better than what we've seen in a long time.

Darrel, I think you said you were slightly below normal snowpack-wise. Do you remember where you were last year relative to normal?

We were quite a bit above normal last year at this time. But didn't -- but also last year, we didn't have that reservoir carryover that we have this year. So you kind of have -- you've got last year's -- this year benefiting from last year's snowpack, whereas the year prior, we didn't have the carryover. So that's why when you look at our hydro generation range, we are -- we still can -- we can still touch what we did this last year.

Okay. One more thing, Darrel. You're sort of running really high at the moment in terms of customer growth and that might have some implications in the future about load growth. Are you thinking at this point that maybe there's some pressure on sort of your load forecast vis-à-vis where you reflected your expectations in the IRP most recently?

I think that we take a long-term look on as it relates to the IRP and the low growth that's there. And so last year, customer growth, we are at 1.8%. This year, we're at 2%. And for the near term, I think we still feel pretty positive about where it is. But when you start looking at the 5-year and 10-year numbers, they -- those are probably still pretty reasonable, and we'll look at that as we gear up for our 2019 IRP and see if those modify. But we still have some pretty good numbers in the IRP when you take a look at that -- at what those numbers are. So I think overall, I would tell you, it's a -- we'll wait and see how it continues to go. But if you look on in our 10-K the information that we provided in there, we have -- we're talking about peak demand growing at 1.6%, retail sales growing at 1.1%. So -- and we are pretty close on our customer growth numbers in 2017. I think we're up by 0.1% of what we were forecasting on that 2% number, so we're pretty close.

[Operator Instructions]. And that concludes the question-and-answer session for today. Mr. Anderson, I will turn the call back over to you.

Thank you, Stephen. Thank you. And thanks for all that were on the call this afternoon. We appreciate your continued interest in IDACORP, and we hope you have a great day. Thank you.

This concludes today's conference. Thank you for your participation. You may now disconnect.