Welcome to IDACORP’s Third Quarter 2018 Earnings 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, Gary. Before the markets opened today, we issued and posted to IDACORP’s website both our third quarter 2018 earnings release and our Form 10-Q. The slides we’ll be using to supplement today’s call are also available on our website. We’ll refer to those slides 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, some of which are listed on Slide 2 and are also laid out in more detail in our filings with the Securities and Exchange Commission, which you should review. These risks and uncertainties may cause actual results to differ materially from statements made today. We caution against placing undue reliance on any forward-looking statements. As shown on Slide 3, on today’s call, we have Darrel Anderson, IDACORP’s President and Chief Executive Officer; and Steve Keen, Senior Vice President, Chief Financial Officer and Treasurer. We also have other individuals available to help answer any questions you may have after Darrel and Steve provide updates. On Slide 4, we present our quarterly and year-to-date financial results. IDACORP’s 2018 third quarter earnings per diluted share were $2.02, an increase of $0.22 per share over the last year’s third quarter. For the first nine months of 2018, earnings per diluted share were $3.97, $0.53 higher than the same period in 2017. We have increased our full year 2018 earnings guidance estimate to a range of $4.40 and $4.50 per diluted share. I will return the call over to Steve.

Thanks, Justin, and good afternoon, everyone. Continued strong customer growth largely driven by new customers moving to our service area, combined with a return to more normal irrigation sales and the impact of tax reform have led to another solid quarter. There are a lot of moving parts. So using Slide 5, I will walk through a reconciliation of income from the third quarter of 2017 to the same period of 2018. Customer growth of 2.2% added $2.9 million to operating income this quarter. Overall usage per customer, however, was lower, decreasing operating income by $2 million. Residential usage per customer was lower by 7%, as there were fewer cooling degree days in 2018 than in last year’s new record third quarter. Further down the table, you will note an increase of $5.1 million in fixed cost adjustment, or FCA, revenues related primarily to residential customers, which partially offset the lower residential use. Irrigation usage per customer, however, was 6% higher as the service area was very dry compared to last year. Including the increase in the FCA, the revenues related to per customer use were $3.1 million higher for the residential and irrigation class. Lower customer rates related primarily to the tax reform settlements that were implemented June 1 of this year resulted in a $10.2 million decrease in retail revenues per megawatt hour. An additional driver of the lower revenues per megawatt hour was a change in the customer sales mix, as volume sold to residential customers made up a smaller portion of that mix. Residential customers generally pay higher rates than other customer classes. In addition to these changes in retail revenues, as you’ll see next on the table, Idaho Power’s operating income benefited from a $7 million increase related to higher transmission wheeling rates and volumes.…

Thanks, Steve, and thanks, everyone for being on the call today. It sounds like you guys have had a very busy day. The growth trend continued in the third quarter for Idaho Power and IDACORP as new residential and business customers continue to drive higher loads. We also saw progress on the Boardman to Hemingway transmission project in addition to the productive regulatory outcomes that guide our path forward. We are executing on our business strategy, and our shareholders and customers are both benefiting from our efforts. On Slide 8, we see the customer growth remains strong at 2.2% over the last 12 months. Our service area continues to earn national recognition as one of America’s most desirable regions to live and work. CNBC and MagnifyMoney included Boise in recent articles listing 15 cities, where jobs are plentiful and business is booming as well as America’s biggest boomtowns. We saw load growth in food processing over last year and economic activity is projected to bring additional large load customers onto our system over the next couple of years. I’ll provide a couple of examples. Last quarter, I told you about NewCold’s plans to build to a cold storage facility in Burley, Idaho. As reported, an additional cold storage facility has chosen to cite a new 280,000 square-foot, $40 million facility on property surrounding the Pocatello Idaho airport to support area farmers and food processors in the region. The facility is expected to support up to 80 full-time jobs and their project is expected to be completed by the fall of 2019. Our existing customer, Simplot, has broken ground for its new 11-story, cold storage operation in Caldwell, Idaho. The facility will be highly automated, utilizing their latest in cold storage technology. It is our understanding that the Food Safety Modernization…

Thank you. Ladies and gentlemen, we’re ready to begin the question-and-answer session. [Operator Instructions] Our first question comes from Julien Dumoulin-Smith with Bank of America Merrill Lynch. Please go ahead.

Hey, good morning. With respect to the IRP update, just can you clarify a little bit how are you seeing Bitcoin miners and some of the other growth. I suppose, candidly 1.3% versus the 1.1% in 2017. I was thinking maybe it might be a little bit better. Are there any offsets to that number that we should be thinking about or any other moving pieces?

As it relates – Julien, this is Darrel. So as it relates to – the 29 IRP assumptions, we are – for the retail sales growth in the near term five years, we are using 1.3%; for peak, we’re using 1.4%. And obviously, you have to take a look at that over the long-term. You referenced the Bitcoin miners and cryptocurrency folks, and I will tell you, as we talk about before, we saw a lot of interest in the crypto, Bitcoin marketplace, but that is actually pretty well dried up as we’ve seen it. Now we still have some interest, but we have – a lot of that what we thought was coming really hasn’t materialized at this point for probably a lot of different reasons. But so when we look at the 1.3% and the 1.4%, respectively, that’s really based on long-term sustainable growth. We weren’t really sure the sustainability of some of the crypto and blockchain – or the crypto and the Bitcoin markets to begin with. We had heard from others in the region that to be cautious and to begin with. And so the good news is, I think we’ve been, and so these numbers really don’t factor that in. These factor more the things that I have talked about with respect to the more sustainable businesses and the manufacturing that we’ve been focused on in the food processing, dairy side of things, the technical side of things. So that’s really what those growth numbers are focused on.

Julien, this is Steve. I would just say, too, that as you looked at – we were moving up on the actual retail growth from 1.1% to 1.3%, so that’s about not quite 20%, a 15% increase. And then it’s a five-year number. So it didn’t necessarily going to come out exactly that every year, there could be a shape to that, and it could be a little higher earlier. But if we do those in increments of years, so you get one change for the first five, and then we have a different change that we use over the 20 years.

And I think the other part, as you know, I think, we probably have – when you look at over 20 years, that’s a long period of time. And the near-term, we have – we know we have a little bit more intelligence on what’s going on in the marketplace versus necessarily what’s really going to happen in 20 years, but I will just tell you, I think, the one thing we do know for sure – relatively sure and that is, the people – Idaho has been discovered, and we’re getting a lot of people coming here for a lot of different reasons. And so I think, the in-migration side of this and it’s just the 2.2% customer growth side of that, is a really positive message, and we still see customer growth strong. The question is going to be, how much juice are they going to use? Energy efficiency, as they noted earlier, has had an impact, obviously, as we see more efficient appliances, smaller footprints on residences and where people live. And so all those things come into play. So to still have the 1.3% number out there despite all those things, I think, it’s a pretty strong message.

Got it. In fact, let me just make sure I’m reading between the lines appropriately. Are you kind of suggesting that the near years might be better than the 1.3% and that this might be a conservative kind of five-year view?

I’m not basing that exactly on the IRP, but when we look at other projections, whether it’s Moody’s or someone else, it’s usually a curve, seldom is it a flat number for five years. And so in the IRP, we use – they use these inputs that are over periods of time. So you have to factor in the fact that it may not come exactly that amount every one of those five years. It’s – and it’s – as Darrel said, we’re stronger in the early years that we are in the 20, but both of them actually went up from a use standpoint. So that’s a good thing from our perspective.

Got it. And then returning to the other side of capital investment. I believe you have something like around $100 million give or take to replace scrubbers at Bridger by 2021. Are you still more likely to run the plant at a lower rate than spend that capital? How do you think about the merits of that? And how are you thinking about acceleration of end of life of units more broadly?

So Julien, Bridger, that’s an ongoing conversation we’re having right now with our partners. So we’re going to look at what’s in the best interest for our customers, what’s in the best interest for our resource portfolio, along with staying tied to where our partners are headed. So – but I can tell you there, that’s ongoing conversations, and we will – as that unfolds, we will have the opportunity to share that in subsequent calls. But right now, all I can tell you right now we’re just working closely with our partners as to determine what the ultimate course of action is going to be there. As you know, we’ve got – two of the units are scrubbed, two of the units aren’t scrubbed, and we’re assessing what the best course is as we go forward. But as...

There’s a time line for approval – sorry.

And I would just say – I would say when we have this year-end call, when we have our call in February, we’ll likely have an opportunity to give you an update then.

Last quick one from me on just Boardman to Hemingway, good stuff in terms of the execution in the quarter here. Anything that you’re keen to get done by the end of the year, given some of the political changes out of the elections, et cetera? Or are you pretty satisfied in terms of the successes, milestones achieved thus far?

Well, we’re in the middle of that process now. So from a political perspective, it’s more in the process standpoint as it relates to Oregon. We are expecting – we’re hoping there is an exact decision by sometime early 2019. So I am not sure the elections should have an impact on that because it’s – now it’s within the agencies, working to the agency process. So I think that’s – we have to trust the process as it stands right now. And given where we stand right now, I think we’re confident that it’s moving on pace.

Excellent. All right, I’ll leave it there. Thank you all very much.

Thanks, Julien.

Thanks, Julien.

The next question comes from Paul Ridzon with KeyBanc. Please go ahead.

Good afternoon.

Hey, Paul.

Hi, Paul.

Darrell, I kind of missed what you said about the rate case outlook. Could you just repeat that?

Yes. As we sit here today, as we look forward for the next 12 months, we don’t see – we have no plans to file a general rate case in either Idaho or Oregon. And that’s really based on, as we look on the horizon, continued load growth that’s coming. Steve talked about our cost management that we’ve been successful on. Those two things are going to continue to drive that. And we have other mechanisms that are in place that helps us continue to manage the business, and we’re going to do everything that we can to try to manage that and not have to go in if we don’t have to. And so that, as we look on the horizon today, we don’t expect to have to do that in the next 12 months. And then a remind – just as a reminder, our regulatory process in Idaho, remember, so it’s a seven-month process basically. So you think about that a year from now and if we haven’t filed – let’s just say, we were hypothetically to file something in a year from now, that’s basically 19 months out before we likely see a rate change.

And from a practical standpoint, you typically file mid-year. So can we assume that you’re not thinking about a rate case at least until mid-2020?

I’m just going to say right now, we have no plans for the next 12 months because you know – historically, you’re right. What we’ve generally done is synced up those cases, so that – so we would generally have a price change that would take place in and around June 1 when we adjust our power supply costs, but that’s not always a hard and fast as you’ve noticed with – well I guess, Langley was similarly scheduled up, but that’s sort of the idea. But we’re going to look at it as it relates to what the needs are and determine our filings schedule based on need.

It was my only question. Thank you.

Thanks, Paul.

Thanks, Paul.

[Operator Instructions] That concludes our question-and-answer session for today. Mr. Anderson, I will turn the conference back to you.

Well, thank you, and thanks, everybody, for participating. We know you’ve had a hectic day. We’d like to thank you for your continued support in IDACORP. And we look forward to seeing many of you at the financial conference later this month in San Francisco, and we hope you guys all have a great rest of your day. Thank you very much.

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