Welcome to IDACORP’s Fourth Quarter and Full-Year 2021 Earnings Conference Call. Today's call is being recorded and our webcast is live. A complete replay will be available later today and for the next 12 months on the IDACORP website. [Operator Instructions] I would now like to turn the call over to Justin Forsberg, Director of Investor Relations and Treasury.

Thanks, Savannah. And good afternoon, everyone. This morning, we issued and posted on IDACORP's website our fourth quarter and year-end 2021 earnings release and Form 10-K. The slides that accompany today's call are also available on IDACORP's website. We will refer to those slides by number throughout the call today. As noted on Slide 2, our discussion includes forward-looking statements, including earnings guidance and spending forecasts, which reflect our current views on what the future holds, but are subject to several risks and uncertainties. This cautionary note is also included in more detail for your review in our filings with the Securities and Exchange Commission. These risks and uncertainties may cause actual results to differ materially from statements made today, and we caution against placing undue reliance on any forward-looking statements. As shown on Slide 3, on today's call, we have Lisa Grow, IDACORP’s President and Chief Executive Officer, Steven Keen, IDACORP’s Senior Vice President and Chief Financial Officer, and Brian Buchanan, IDACORP’s Senior Vice President and General Counsel. As previously announced, Brian will assume the role of Chief Financial Officer on March 1. We also have other members of our management team available for a Q&A session after Lisa, Steve, and Brian provide updates. Slide 4 shows our quarterly and annual financial results. IDACORP’s of 2021, fourth quarter earnings per diluted share were $0.65. A decrease of $0.09 per share from last year's fourth quarter. 2021 full-year earnings per diluted share were $4.85, which were $0.16 above 2020. 2021 earnings are the highest in the history of the company and represent the 14th consecutive year of growth in IDACORP’s earnings per share. We believe this achievement is unprecedented among publicly traded electric utilities. Today, we also initiated our full-year 2022 IDACORP’s earnings guidance estimate to be in the range of $4.85 to $5.05 per diluted share. With our expectation that Idaho Power will again, not need to utilize in 2022 any of the additional tax credits that are available to support earnings under its Idaho regulatory settlement stipulation. These estimates assume normal weather conditions over the balance of 2022. I will now turn the call over to Lisa.

Thank you, Justin. And thanks to everyone for joining us on today's call. I'll begin my remarks today pointing to Slide 5 with the exciting news that IDACORP and Idaho Power just completed the safest year in our Company's history. We experienced record low totals for injury, vehicle accidents, and employee time lost due to injury. Our 15 employees received the President's Award for safety, an important recognition for employees whose actions exemplify our safety culture. Safety is one of our core values, and I'm very proud of our employees ' efforts to stay safe both at work and at home. Our Company's safety culture was also recognized by the Edison Electric Institute, which recently awarded Idaho Power its inaugural Thomas F. Farrell, II Safety Leadership and Innovation Award. Safety is such a vital component of our business and of our everyday lives. I commend our leaders and employees for their steadfast commitment to keep themselves, each other, and our communities safe. Safety allows -- or staying safe allows us to give our absolute best efforts to our customers and we continue to do just that in 2021. As noted on Slide 6, our customer satisfaction score tied the highest year-end score in our Annual [Indiscernible] Survey, while ranking at the top of the list among our peer utilities in a national survey. From working with customers on energy efficiency projects, to developing a new and improved online customer accounts tool, to expanding our menu of clean energy options, we continue to look for new and innovative ways to interact with our customers and improve our customers’ experience. Reliability also saw another outstanding year as Idaho Power kept customers lights-on over 99.9% of the time. Our yield cruise load-serving operators and employees across our organization stepped out throughout the year…

Thank you, Lisa. And thank you to everyone who has helped me work for the success of this company over the years. Our finance organization has been truly outstanding and Brian will be leading a skilled team with the likes of Tim Peterson and our talented group of finance leaders. While I'm excited for what lies ahead, I will sincerely miss my interactions with all of you. I can't walk through a hotel lobby without remembering our many great discussions about this industry. So, here's a virtual toast to each of you for your interest in IDACORP and also for your friendship. Now let's move to Slide 14, where you'll see our full-year 2021 financial results as compared to 2020. We had a very good year boosted by positive weather impacts, continued strong customer growth, and more typical operating and maintenance expenses, allowing IDACORP to achieve its highest earnings ever recorded with more than $245 million in net income. On the table of quarter-over-quarter changes, you'll see our continuing customer growth added $16 million to operating income. Cooling degree days were 28% higher than 2020, and the hot and dry conditions lead to a respective 6%, and 1% higher irrigation and residential per customer usage. While more normal operating conditions lead to 3% higher usage per commercial and industrial customer. You'll note on the table that the combined usage changes lead to at $13.4 million increase to operating income. Right below this, you'll see a decrease in operating income of $13.4 million that relates to the charge for change in the per megawatt hour revenue net of power supply costs, and power cost adjustment impacts year-to-year. The partial driver of this relates to the decrease in annual customer rates, reflecting the full depreciation of all Boardman power plant investments after…

Thanks, Steve. As Lisa noted, you have a tremendous legacy with this company and I'm grateful to have a few more months to work with you and gather more of your knowledge before you retire. I've been with IDACORP for nearly a dozen years, but for some of you, I'm a new face. Over the past few months, I've met some of you who are on the call and I'm looking forward to spending more time with all of you going forward. I'll start on Slide 15, which shows our initial full-year 2022 earnings guidance and our current key financial and operating metrics estimates. As Justin noted earlier, we expect IDACORP’s 2022 earnings to be in the range of $4.85 to $5.05 per diluted share. This guidance assumes normal weather and economic conditions for the year, and it also assumes Idaho Power will use no additional tax credits in 2022 under the Idaho regulatory stipulation, which provides support in the Idaho jurisdiction of the 9.4% return on year-end $355 million to $365 million. And as we've accomplished in the past, we will be driving keep O&M relatively flat with last year. It's fair to say this goal will be challenged by the level of customers and load growth we're experiencing in our service area, as well as the associated cost pressures. I will discuss the five-year CAPEX forecast in a moment, but I'll mention we currently expect the 2022 capital expenditures to significantly increase from our actual 2021 Capex to the new range of $480 million to $500 million, reflecting the capital spending Lisa outlined earlier. And finally, we expect hydro power generation to fall within the range of 5.5 million megawatt hours to 7.5 million megawatt hours. Moving to Slide 16, you'll see our five-year Capex forecast has grown…

We are now ready to begin the question-and-answer session. [Operator Instructions] We'd like to remind you to ensure that your mute function is turned off just before you asked your question. We will take as many questions as time permits on a first-come basis. [Operator Instructions] And our first question will come from Julien Dumoulin-Smith of Bank of America. Please go ahead.

Hi, Julien.

Hey, afternoon team. Thank you. Again, Steve, talk about leaving on a high note here. Wow, what an incredible year you guys just had. It's really top-notch. Absolutely. Wow. Maybe to that point actually, can we go back to your comments in the remarks on rate case timing? I just want to understand a little bit more on the relative merits of timing. What are the factors here that you're thinking about? Obviously capital, but what else? I mean tax credits? What else could be driving the timing of this? Is it looms over us in the next few years?

I can start and then I'll hand it off to Steve. Certainly, the things that you mentioned, our capital plan, our financing of that cost increases with materials and the wage pressure there. There's a lot of things that are coming together for that, that are changing and we're watching very carefully. Steve, what else would you add?

Yes, Julien, would say it's really that -- if we can deliver earnings that make you and the other analysts and all of our share owners happy and we can do that without having to go to the customer. We prefer to do that and it's been a pretty successful run that we had with that. And I think the things that are looming now are substantially more capital expenditure. We had a little more O&M expense this year, but I think it was more of a return to what we expected maybe had we not gone through the pandemic anyway. And so, we're still feeling we can been be we're hopeful that we can hold a line on what we've put out there as a goal this year, it will have some challenges, but it's more really that we look at if we can get to an earnings result that is going to be good for shareowners without having to go to the customer, we do that. It's just we can see that convergence of a point when we put out too many dollars on these -- the new things we're required to put in, both to handle growth and bring on these new cleaner resources, that at some point you have to get paid for those things and that line is going to across. And it's looking closer as we get there. And we will keep evaluating that. We've said that we do that really every year and have for some time, so we'll just be watching that and be closer. Things like Health Canyon also are looming not too far in the future. So, something is going to be the item that trips that wire we need to come in and go with the general.

Got it. Thank you for that. Maybe if I can ask you another question around the culminate this a little bit further. How are you thinking about the longer-term EPS trajectory here? You've got a lot of different pieces moving, obviously a lot higher Capex. But perhaps if you think about getting visibility on these various investments. At what point in time do you actually get a more formal update in the long-term target?

Yes, I would say, and Lisa out this way and then you can take it if you'd like. But I think these are formulating pretty quickly right now. I mean, this growth that we had in 2021, it was a step-up from '20 and then you put in the bigger customers with the one that was just announced. Those are big shifts and as we roll that in, I think you'll see a better projection and we've talked about the fact that the way you predict our future earnings is going to likely shift over to the rate base look the way you've done in most of the industry. It will be a little less on how much new customer growth and how past control work and a little bit more on where that's driving us as a company in size and I think that when that switch happens, you'll get a better deal in the future because it will be based on those projections, we're giving you on capital.

Super cool. Last quick detail on equity. I know you made some comments in the prepared remarks there, but just across the full-year or the multi-year outlook rather than just '22 here.

Yes. I would just say we're going to go to debt first would be my think Brian concurs with that, but we have some room that we can do growth and really funded all with the lowest cost capital which is the debt. When we get to the point that we do need to issue both, I think we'll be assessing options there on what's the best way to do that. But I think it's out a little way, we have some room. And the good earnings years actually give us more room before we have to do that, so each year that we've had positive results helps us out a little bit with that.

Yeah. What's the metric you're targeting, just as you think about that, what estimate is that? You say the emphasis on funding with them?

Were mainly target, I think, but when we get to a rate case, we will probably be in and around 50-50. Our FFO from debt, we haven't actually always put that out, but partly is because I think we're with our really long lines of our assets, our collection is slightly slower than some, if you have all gas assets or non-production. We have production assets that have been around for 100 years, so it slows things down where you're getting paid over a really long time. But needless to say, our cash flows when really strong and that we feel very good about where we sit there. It's more in line but I think we'll be watching that debt equity ratio and wanting to keep them approaching and locked in around that 50-50. That's probably our optimal place when we get back to the rig planning.

Right. Excellent. So those two sounds like there'll be tied up one next to the other eventually.

Excellent.

Awesome, guys. I'll leave it there. Thank you for your patience. Again, congratulations, Steve and team.

Thanks, Julien.

Thanks, Julien.

Thank you.

And our next question will come from Brian Russo with Sidoti. Please go ahead.

Hi, good afternoon. Can you hear me?

Yes, we can hear you.

Hey. So just on Boardman to Hemingway line in the development there on the regulatory side, I think we're awaiting a final order from the Energy Facilities Siting Council in Oregon in the second half of 2022, is that still kind of the timeline? And then we're also expecting a conditional use permit in Idaho maybe just if you could add some clarity on the timeline there. And then I think there's still some pending litigation or contested case that's ongoing. If you could just address that as well.

Sure. You're correct that we're expecting to have that process to complete at the end of -- towards the end of this year. And then I'll -- Adam, I'll hand that over to you.

Yeah. That's correct. We're in the middle of doing pre -construction activities as well, which we hope to have our 30% design here coming out in the next couple of months. We've had an RFP out to builders who will construct line. We're doing geotech work as well. So, in addition to the state permitting, we're making good progress at another pre -construction side too. I think when you mentioned CUPs, I think you might be referring to Gateway West mainly. With Gateway, we continue to keep an eye on that. It's being built by a specific core, kind of the east working its way west. We continue to put it in our Integrated Resource Plan it shows up as being a solid benefit. But probably after B2H is when that would come into place.

And he might -- to make sure I understood, Brian. Are you asking about the CPCN for working with Hemingway?

Yeah. What's the next -- also the regulatory approvals?

Sorry. I thought you said CUP. So CPCN. Yeah. As soon as we get the state permitting process through, we would file, hopefully, a CPCN towards the end of this year.

With both Idaho and Oregon.

With both Idaho and Oregon, yeah.

Okay. Great. And then also on Boardman to Hemingway, the transmission agreement that you're likely to sign with BPA, is that incremental revenue and margin relative to the $500 million of incremental rate base that you've earned a return on?

Go ahead, Ken.

Brian, it'll become bifurcated, so retail customers would be paying a portion of that and then BPA paying a portion of the revenue requirement associated with the $500 million.

Okay. Got it. Understood. Just on the O&M forecast. Basically, over 10 years of flat annual growth in O&M and with the inflationary environment that we're in, what were the assumptions made in that forecast, that made you comfortable to actually convey, incorporate the relatively flat O&M in your guidance?

Well, I'll start. It is certainly something that we have been laser-focused on for more than a decade. It's really finding efficiencies and looking for ways to take costs out of how we serve our customers. But it's true that we're seeing cost increases as just about everybody is, whatever industry you are in and certainly in our industry. So, we continue to try to balance our cost management with these increased costs. But again, as we mentioned, there's not an infinite capacity to do that. So, we're going to do everything we can and then that will be part -- I think one of the triggers that would lead us to a rate case. Anything that you guys would add?

The only thing I might add to Brian, is the growth has just been focused floats up here than as we've grown more, we have more to maintain. And so, you start to see a little bit of increase in O&M just based on the amount of customers that we're seeing out there, which is a good thing. But at the end of the day, sometimes that puts a little bit of stress and pressure on O&M as well.

Just on the guidance. It seems that your initial guidance for many years now has been relatively conservative and as you move through the year, that the point increases. I'm just wondering, what should we look for this year for a same type of guidance update trends, is it just weather in the third quarter or is it just sales versus costs? Just a little bit more insight there. And then does the range -- is that book end by the 9.4 floor and the 10% a bit sharing band?

Again, I'll start here. I think it's sort of all of the above. We are conservative as we like to deliver on what we say and so we're watching growth, we're watching weather. We do tend to -- third quarter is our biggest quarter for sure. I would say I don't see anything particularly unique that's in front of us. It's how our businesses has been going over the last few years, but growth sort of the prices last year too in addition to historic fee, so we'll be watching for those things.

Okay. Got it. And is there any regular --

Brian, I might just add to --

Yes, Steve.

-- if you don't mind the -- if you look at last year's guidance, we opened at 460 to 480, so we're full -- we're $0.25 above that at both the bottom and the top. It doesn't look quite as robust when you look at where we finished because we had a really strong finish, but we have said over the years that it's hard to grow up of growth and we're 14 years in a row that we haven't had any kind of a reset. And so, we probably are a little modest at the start but, just like last year, we moved that guidance up a couple of times. I think as we got into summer, we moved it a bit and then we tightened it later in the year. So, we'll look for those opportunities and that's what we hope, is that we have good news and we can pass that on.

Understood. And then just on the regulatory cap structure target of 50-50 is there any regulatory appetite to maintain a higher regulatory equity ratio? Is there any recent precedent in any regulatory outcomes where you've been granted a higher equity ratio than 50?

Brian, we don't have a whole lot of recent activity at all point to. We have seen some of our peers get slightly over the 50% in equity. So, I don't know if that it would be impossible to be a little bit off. It's just -- I think we do longer-term and planning directionally that 50-50 is a good marker that remember what we'll try and be in and around it.

Okay, great. Thank you very much. Steve, thank you for the help over the years. Best of luck.

You bet. Thanks a lot, Brian, I've really enjoyed our time together.

Thanks, Brian.

Our next question will come from Chris Ellinghaus with Siebert Williams.

Hi everybody.

Hi, Chris.

How are you?

Hi, Chris.

Congratulations to Brian Buchanan and especially you, Steve. I do hope you enjoy your retirement. Brian, as far as looking at this Capex slide and your discussion about equity in the cap structure. Can I assume that within this timeline, this time horizon that you do imagine some equity?

I think one thing that Steve mentioned or reiterated that we do have quite a bit of room on the debt side, quite a bit and room there if you look at a 50-50 cap structure compared to where we are today. We do have some pretty sizable capital projects in the mix. There is possibility that equity comes into our window in the next few years, certainly. But again, we're going to target that 50-50 and try to use that lower cost debt headroom first.

Sure. Lisa, you talked about the additional capacity needs. Can you just talk about what the company's philosophy is versus ownership and PPAs right now?

Sure. We certainly would like to own as much as we can, not just because we're for-profit entity, but I just believe that the business model of being regulated monopoly and having the obligation to serve is -- it incentives to make those longer-term investments and we built this system so that we can really survive the extreme. At that, you can look at taxes and some of the works more merchant base where that's not always the case. Now having said that, I think it's a little bit of all of the above where I think PPAs have a place in our portfolio, if you will, and so we're not trying to make it all one thing, but we're very careful. We've had cases where people have said that they want to bid in to an RP and then they pull out because they decide they don't want to do that and that's really hard to build a system based on that. And then finally, as our system changes and we're shifting into our clean portfolio, the way you operate that, we haven't done that in our history, and so we're learning and it maybe really hard to contract for the services that we might need that we haven't experienced yet. And so having ownership and that capability to run the system, the way we need to, to keep our reliability in focus and keep cost down. I think all of that together is how we're viewing it. So short version is all of the above, long-version is we think there is an advantage to the utility owning it, so that we can fulfill our obligation to serve.

You talked about the gas conversions as sort of I guess, sort of a stopgap measure. What are your thoughts strategically for future capacity batteries, solar, wind, whatever? What do you envision your future additions mix looking like and do contracts like Meta sort of skew your thought process a little bit about what types of resources you do want?

Well, I think that again, we are moving forward in cleaning up our portfolio by removing coal. So, there's this shorter-term view of what we need to do something now. And what's available is when solar and storage. I don't feel like we're getting anything skewed by having Meta have their requirements and you could argue that it sort of enhances our move towards that goal. But when you think about how do we get there, all the way to 20%, 45% and 100% there got to be something else. We talked about it before that I think hydrogen is very interesting, small modular reactors are interesting. I think there is going to have to be some other technology. I don't think that wind and solar and short duration -- shorter duration batteries are the full answer. So, we've got time to really evaluate what that fits in to our portfolio. In the meantime, to your point of gas conversion, that helps us lower our carbon footprint and keep the system reliable and affordable. So, I think that's just a great example of how this transition is going to look. Anything that you would add, Adam?

No, just that in addition to that. Obviously, transmission is a big part of our diversified as well and having two projects that are close to being permitted is something that we think is pretty special on the industry and we're going to continue to focus on diversifying how we bring energy to us through transmission as well.

Great point, Adam. Thanks for that.

You talked about the long stretch that you're looking at, the long window, 2045 plus. Are you thinking that over time, longer duration storage technologies as part of that expectation of what we'll fill in as well?

Absolutely. Absolutely.

I think we'll start to see it dropping out a little bit is in the winter time when you start to look into 20-30, 20-35 timeframe. You know, that's when you really need to have longer duration storage. And so, we're hopeful that this technologies progress will get there.

Sure. Lastly, as you start to approach that next general rate case, have you got any thoughts about on how you might envision adjustments to your mechanism through that case?

We have some adjustments that we just went through. And, Ken, you have some down there?

Well, the ADIPEC is -- I have agreed and carries through to for the next rate case, if we actually have the credit still available. So, if we're able to save them that mechanism we'll just move forward. The other mechanisms that we have would also move forward, there will be updated, but the FCA would have new fixed costs if they would put into it. PCA would have new power supply cost pick into us. So those are all natural movements that occur in a rate case.

Okay, great. Thanks. Best of luck to you.

Thank you very much, Chris.

[Operator Instructions] And with no further questions, that will conclude the question-and-answer session for today. Ms. Grow, I will turn the conference back to you.

Thank you all for your continued interest in IDACORP and we look forward to seeing some of you at the upcoming conferences that we plan to attend over the next several weeks. I continue to wish you all good health and I hope you have a great afternoon or evening, depending on where you are. Thank you very much.

And that will conclude today's conference. Thank you for your participation and you may now disconnect.