IDACORP, Inc. (IDA) Q4 2022 Earnings Call Transcript

IDACORP, Inc. (NYSE:IDA) Q4 2022 Results Conference Call February 16, 2023 4:30 PM ET

Company Participants

Justin Forsberg - Director of Investor Relations and Treasury

Lisa Grow - President and Chief Executive Officer

Brian Buckham - Senior Vice President and Chief Financial Officer

Adam Richins - Senior VP & COO

Conference Call Participants

Brian Russo - Sidoti

Anthony Crowdell - Mizuho

Chris Ellinghaus - Siebert

Operator

Good day, everyone. Welcome to nan IDACORP's Fourth Quarter and Year-End 2022 Earnings Conference Call. Today's telephone is being recorded and is connected our webcast live. A replay will beryllium disposable later coming and for nan adjacent 12 months connected nan IDACORP website. [Operator Instructions].

I would now for illustration to move nan telephone complete to Mr. Justin Forsberg, Director of Investor Relations and Treasury. Please spell ahead, sir.

Justin Forsberg

Thanks, Gallienne, and bully afternoon, everyone. We admit you tuning successful for our call.

This morning, we issued and posted to IDACORP's website our 4th fourth and year-end 2022 net merchandise and nan associated Form 10-K. The slides that travel today's telephone are besides disposable connected IDACORP's website. We'll mention to those slides by number passim nan telephone today.

As noted connected Slide 2, our chat coming includes forward-looking statements, including net guidance, spending forecasts and regulatory plans, which bespeak our existent views connected what nan early holds, but are taxable to respective risks and uncertainties, including uncertainties surrounding nan impacts of early economical conditions. This cautionary statement is besides included successful much item for your reappraisal successful our filings pinch nan Securities and Exchange Commission.

These risks and uncertainties whitethorn origin existent results to disagree materially from statements made today, and we be aware against placing undue reliance connected immoderate forward-looking statements.

As shown connected Slide 3, connected today's call, we person Lisa Grow, IDACORP's President and Chief Executive Officer; and Brian Buckham, IDACORP's Senior Vice President and Chief Financial Officer. In summation to Lisa and Brian, we person different members of our guidance squad disposable for a Q&A convention pursuing our prepared remarks.

Slide 4, shows our afloat twelvemonth financial results. IDACORP's 2022 net per diluted stock were $5.11, an summation of much than 5% aliases $0.26 per stock from past year, reflecting nan impacts of customer growth, upwind and a mid-year regulatory order, partially offset by higher operating costs. Both 2022 revenues and net are IDACORP's highest successful nan history of nan company, and nan 2022 net results were nan 15th consecutive twelvemonth successful maturation of net per share.

Today, we besides initiated our afloat twelvemonth 2023 IDACORP net guidance estimate successful nan scope of $4.95 to $5.15 per diluted share, which includes our existent anticipation that Idaho Power will utilize astir $15 cardinal of further taxation credits that are disposable to support net astatine a 9.4% return connected equity level successful nan Idaho jurisdiction nether its Idaho regulatory colony stipulation. These estimates presume historically normal upwind conditions passim nan twelvemonth and a return to much normal powerfulness proviso expenses.

I'll now move nan telephone complete to Lisa.

Lisa Grow

Thank you, Justin, and acknowledgment to everyone for joining america connected nan telephone today.

I want to statesman my remarks by underscoring what Justin conscionable mentioned that IDACORP completed its 15th consecutive twelvemonth of maturation successful net per share, that you tin spot connected Slide 5. We judge this is simply a singular accomplishment among investor-owned utilities, and I want to convey our hard-working squad of labor for their contributions to our sustained success. These financial results person translated into a increasing dividend, and we are besides proud of our precocious customer restitution scores and fantabulous work reliability passim 2022.

As noted connected Slide 6, customer maturation remains beardown crossed Idaho Power work area. Our customer guidelines grew 2.4% during 2022, and we now service astir 620,000 customers. Moody's astir caller GDP calculation for our work area forecast beardown maturation of 3.9% successful '23 and 4.5% successful '24 arsenic our section system continues to outperform nationalist trends. In summation to being a awesome spot to unrecorded and do business, we judge nan reliable, affordable, cleanable power Idaho Power provides is simply a cardinal driver for maturation crossed our work area.

Robust residential maturation has been a taxable for galore years. And while single-family residential building permits person slowed successful caller months arsenic liking rates person increased, we expect wide economical activity to stay strong. Unemployment successful Idaho Power work area during nan 4th fourth was 2.3% compared to 3.5% astatine nan nationalist level and employment has accrued by 5.8% since nan 4th fourth of 2021. We are besides seeing a awesome uptick successful Idaho Power's debased maturation forecast arsenic a consequence of respective ample load projects. And pinch nan caller meta information halfway coming to Idaho and Micron's awesome description of its Boise headquarters, including caller microchip fabrication facilities, Idaho Power expects unit income maturation of 5.5% complete nan adjacent 5 years. This maturation is projected to travel connected apical of nan twelvemonth erstwhile we saw nan highest unit megawatt hr income successful our history.

As our customer guidelines grows, you'll spot connected Slide 7 that we proceed to adhd resources that will let america to meet our expanding demand, while simultaneously moving distant from our coal-fired resources. Large transmission projects, for illustration Boardman to Hemingway, aliases B2H, for which we expect to break crushed this year, will beryllium critical.

We are besides moving pinch PacifiCorp connected segments of nan 1,000-mile gateway westbound transmission statement project, which will thief some companies meet rising request and amended reliability. During nan 4th quarter, Idaho Power began buying power from nan precocious completed 120-megawatt Jackpot Solar task successful Southern Idaho. Meanwhile, we received preliminary support from our regulators for our first utility-scale power retention projects that totaled 120 megawatts of company-owned artillery retention that is nether construction, pinch an anticipated in-service day of summertime of '23.

We besides signed agreements for a caller 100-megawatt star task PPA, paired pinch an further 60 megawatts of company-owned artillery retention that is scheduled to travel online successful nan summertime of '24. We expect needing further power and capacity resources successful '25 and '26, and we are successful nan bid information process for nan projects for 2025 and nan RFP shape for nan 2026 task to thief america meet those early needs.

Our efforts to grow and amended Idaho Power's power grid requires important investment, and we presently expect maturation and reliability-focused projects will thrust much than $3 cardinal of superior expenditures complete nan adjacent 5 years, and Brian will talk much astir that successful a moment.

We genuinely are building nan future. And it is simply a fascinating move arsenic we acquisition nan convergence of historical growth, emerging technologies and our cleanable power goal, each while safely delivering nan reliable, affordable work our customers expect. Along pinch reliability and customer service, apical of mind is ensuring our investors proceed to gain a adjacent and reasonable return connected their finance successful our company.

Turning to Slide 8, you will spot that we are successful nan process of preparing a wide complaint lawsuit successful Idaho that we presently scheme to record connected June 1, requesting that Idaho customer rates alteration connected January 1, 2024, and past pinch an Oregon wide complaint lawsuit filing that will apt travel soon thereafter.

We've invested complete $1 cardinal successful infrastructure for nan communities and businesses we service since Idaho Power's past wide complaint lawsuit complete a decade ago, and we person sizeable infrastructure finance ongoing during this twelvemonth that we scheme to see successful nan case. Much of our finance was successful consequence to accelerated maturation successful our work area arsenic we person seen our customer count accrued by astir 120,000 complete nan past decade, which is an summation of astir 23%. We've besides made important investments successful maintaining and improving strategy reliability from our transmission, distribution and procreation assets, which benefits everyone who lives and does business successful our work area.

Customer maturation has consumed nan magnitude we erstwhile had successful our procreation system, which complete nan past respective years, has served to lessen nan incremental costs associated pinch growth. However, arsenic I touched connected a infinitesimal ago, our readying process has identified respective further power and capacity needs to service caller grounds loads that are projected to accelerate going forward.

While nan awesome driver generating nan request for a complaint lawsuit is nan investments successful property, works and instrumentality to service our customers' increasing power needs, location will beryllium immoderate inflationary factors contributing to nan petition successful nan case. We person worked difficult to support our O&M debased for nan past decade, pinch an mean yearly complaint -- maturation complaint done 2022 of only 1% since 2012 aliases an summation of conscionable complete $50 cardinal to service those astir 120,000 caller customers. So we expect our upcoming lawsuit to beryllium mostly astir complaint guidelines additions to reliably service our customers and, to a lesser extent, astir betterment of higher expenses.

We judge nan June 1 filing day besides allows america to equilibrium our request for timely costs betterment and our extremity of affordability for our customers. While we understand that immoderate level of value summation tin beryllium impactful to customers, our acquisition complete nan years shows that smaller requests complete a play of clip alternatively than a azygous ample petition are mostly much manageable. That said, we expect much predominant cases successful nan coming years owed to continued infrastructure finance including Hills Canyon relicensing, caller power and capacity resources and high-voltage transmission projects.

Balancing nan impacts connected customers continues to beryllium an important constituent of our efforts to power costs and to make prudent decisions. We person established a very disciplined civilization resulting successful a beardown grounds of managing our expenses. It's our belief that our complaint petition will grounds prudent spending and will show that our institution made nan basal investments to proceed providing safe, reliable electrical work to our customers successful responding to our state's economical development. Ideally, we are targeting a single-digit mean percent complaint summation successful our June filing.

As I mentioned, we've not been successful for a wide complaint lawsuit successful complete a decade, but our regulators person demonstrated done interim regulatory proceedings and expertise and desire to find constructive ways to equilibrium adjacent returns for Idaho Power and its investors pinch nan needs and costs of interests of our customers. As examples, successful caller years, nan Idaho Commission has recovered constructive ways to reside taxation reform, nan ADITC system and nan economical realities associated pinch exiting coal-fired generation.

We're connected way pinch nan early stages of preparing for this case, and we're assured that nan lawsuit we scheme to coming -- and that -- we're assured successful nan lawsuit wherever we scheme to coming and that our constructive regulatory situation successful Idaho stands firm.

As a reminder, nan Idaho Commission requires Idaho Power to springiness a 60-day announcement of its intent to record a wide complaint case, and we expect nan proceeding would span astir 7 months earlier caller rates would beryllium successful effect.

With that, I will manus things complete to Brian for a financial overview of 2022 and our expectations going forward. Brian?

Brian Buckham

Thanks, Lisa. Good afternoon, everybody. Thanks for tuning in. I'll commencement connected Slide 9, wherever you'll spot a summary of our financial results successful 2022 compared to our 2021 results. We saw continued beardown customer growth. We had higher weather-related usage, and we had higher transmission wheeling revenues.

Also, nan Jim Bridger bid from nan Idaho Commission past summertime notably impacted our year-over-year results. On nan different hand, offsetting those benefits connected a comparative ground were higher operating and attraction expenses arsenic good arsenic nan information of nett powerfulness proviso expenses that were not preferred for early betterment nether our powerfulness costs accommodation mechanisms.

The Idaho fixed costs accommodation system besides had a antagonistic effect connected comparative results, pinch nan FCA adjusting revenues based connected usage from nan hotter summertime weather. In nan table, you'll spot customer maturation of 2.4% added $12.1 cardinal to operating income. Unsurprisingly, because it appears to beryllium a nationalist trend, higher owe rates and economical uncertainty person impacted single-family residential location income successful our work area.

That said, looking astatine Moody's existent affirmative GDP outlook for our work area, and nan study and forecast we developed for nan adjacent IRP, nan inclination points to continued beardown customer and load growth. And contempt our anticipation for moderation and residential maturation successful nan adjacent term, astatine slightest comparative to nan precocious percentages we've seen successful caller years, a ample portion of our expectations for maturation are driven by important commercialized and business customers. We presently task nan 5-year forecasted yearly unit income load maturation complaint summation from 2.6% successful nan 2021 IRP to 5.5% successful nan 2023 IRP. So surely a notable increase.

We've seen immoderate shifting successful nan ramp complaint for immoderate of those ample business customers, really successful some directions. So our engineers are moving difficult to meet nan upcoming request to guarantee nan infrastructure is online erstwhile our customers flip nan switch.

Back to this year's results. Extreme temperatures and volatile upwind successful 2022 drove an wide 5% summation successful usage per residential customer, a 2% summation successful commercialized and business per customer usage and an wide 9% diminution successful usage per irrigation customer. That irrigation customer alteration was chiefly a consequence of abnormally precocious precipitation and cool temperatures during nan 2nd 4th astatine nan commencement of nan cultivation increasing season.

While past summer, we didn't transcend our all-time grounds highest load group successful June of 2021, we deed all-time August and September peaks. We besides group a caller all-time wintertime highest successful December, reflecting nan maturation we've seen complete nan past fewer years. The upwind conditions mixed to costs overmuch of nan $8.8 cardinal nett usage per customer accrued operating income.

The $12.7 cardinal cumulative alteration successful Idaho Power's fixed costs accommodation system revenues, that you spot adjacent connected nan table, partially offset nan increases successful residential and mini commercialized customer usage.

Further down, you'll spot a $24.4 cardinal summation successful operating income from nan alteration successful nett per megawatt hr revenue. The Idaho regulatory bid for nan Jimbridger plant, which accrued unit income connected June 1 past year, led to overmuch of that increase. Another portion relates to nan alteration successful customer operation and income to higher-margin customer classes compared to past year.

We still expect nan Jim Bridger bid to supply an after-tax nett income use of $10 cardinal to 2023 erstwhile compared pinch astir $20 cardinal of after-tax use for 2022, which included nan deferral of definite depreciation expense.

So adjacent connected nan table, continued sustained transmission wheeling revenues during nan twelvemonth accrued operating income by $12.5 million. Energy value volatility successful nan Western U.S. led to value spreads betwixt power marketplace hubs, which accrued wheeling activity crossed Idaho Power's transmission system. Also, wheeling customers paid 4% much for transmission wheeling for overmuch of nan year, pinch Idaho Power's transmission tariff complaint expanding successful October 21, and again successful October 2022, reflecting higher transmission costs.

Higher different O&M expenses led to a $38.1 cardinal alteration successful operating income successful 2022 compared pinch 2021. And this resulted from respective things, and nan largest 2 were scheduled works attraction that backed up successful 2022 astatine respective accommodation and our labour costs and adaptable compensation expense.

Inflationary pressures connected master services were besides a ample driver of that increase. There were immoderate smaller items, for illustration conveyance substance and immoderate transmission and distribution attraction activity that were smaller individually, but ample connected a cumulative basis.

As we look astatine 2023, we expect a imaginable simplification successful different O&M compared to 2022. And I'll get to that erstwhile I talk our guidance for this year. The $5.4 cardinal alteration successful depreciation disbursal that's further down nan array reflects nan deferral of depreciation expenses related to nan Bridger order. Offset by nan accelerated depreciation connected nan coal-related assets astatine nan Jim Bridger plant, which began connected June 1 past year, this nett bridge-related alteration successful depreciation expenses partially offset by higher different works and work compared pinch 2021.

The information of higher nett powerfulness proviso expenses that were not deferred for early betterment and rates done powerfulness costs accommodation mechanisms successful some Idaho and Oregon contributed to nan sizable $14.8 cardinal summation and different changes successful operating revenues and expenses, which are adjacent connected nan table. That's fundamentally our information of nan shared consequence and nan powerfulness costs accommodation mechanism, mostly owed to higher state and wholesale powerfulness prices successful 2022 and nan effect of below-average procreation from Idaho Power's hydro fleet owed to debased h2o conditions.

Wrapping up nan table, a $15.7 cardinal alteration successful non-operating disbursal benefited Idaho Power's nett income. A important information of that was from higher allowance for costs utilized during building from our higher CapEx. We besides saw higher liking income owed to higher marketplace liking rates and higher finance income related to life security and nan Rabi Trust for our non-qualified pension plans. In addition, costs we recorded successful 2021 related to a post-retirement aesculapian scheme didn't recur past twelvemonth arsenic we expected. And these items were partially offset by higher liking connected semipermanent debt.

So successful total, each of those drivers, combined, led to a 5.5% summation successful income year-over-year. Our CapEx spending connected a rate ground past twelvemonth accrued by astir 50% complete what we spent during 2021, and that was our expectation. The bulk of that further CapEx, comparative to past twelvemonth and comparative to our historical spending levels arsenic for our ample artillery retention projects and immoderate earthy state works upgrades to get further output and ratio from those units.

On Slide 10, we've included our updated 5-year forecast CapEx. You'll spot that it reflects an further 15% summation complete past year's already sizable forecast, pinch much than $3 cardinal of expected superior projects done nan extremity of 2027. So that floor plan includes refreshed costs assumptions for our awesome superior projects and our expectations for superior spending responsive to astatine slightest a information of business and commercialized growth.

We judge we're being somewhat blimpish successful our CapEx estimates for nan result of pending RFPs for power and capacity resources. So there's nan imaginable that our CapEx could beryllium higher astatine nan backmost extremity of nan 5-year forecast period. We will update our forecast complete clip arsenic nan result of nan RFPs and much circumstantial timing of nan build-out for commercialized and business maturation is solidified.

Slide 11 has an updated look astatine our estimated complaint guidelines eligible assets arsenic of nan extremity of each of nan adjacent 5 years. This is simply a further accrued maturation complaint complete past year's estimates, now astatine conscionable complete 11%. And while it will beryllium our complaint to get a adjacent return connected this complaint base, arsenic Lisa outlined, we judge nan maturation successful reliability-driven projects going guardant will show prudent and thoughtful readying arsenic we proceed to respond to customer growth.

As we execute connected these plans, we're focused connected ensuring IDACORP and Idaho Power proceed to support beardown equilibrium sheets and liquidity. Our in installments ratings stay solidly finance grade, and we proceed to support nan standing agencies informed of our forecasts and plans.

We mostly target a comparatively moreover superior structure, truthful we presently judge our 2023 superior plans will beryllium financed pinch debt. We don't spot an equity issuance arsenic imminent, but fixed nan size of our upcoming superior plans, our financing strategy does see a blend of equity and indebtedness money early growth.

As a constituent of reference, IDACORP hasn't issued immoderate meaningful equity since 2010, and that was only astir $35 cardinal successful issuance. And arsenic usual, we intend to equilibrium each considerations, for illustration in installments ratings, regulatory expectations, fixed income marketplace conditions and equity impacts arsenic we finance nan adjacent shape of Idaho Power's future.

Turning to Slide 12, you'll spot IDACORP's operating rate flows and liquidity position. Cash flows from operations successful 2022 were comparable to 2021, only astir $12 cardinal lower.

So we proceed to see thoughtful ways to negociate our indebtedness financing. Throughout 2022, we saw comparatively small effect to our income statements related to liking disbursal pressures. The word indebtedness installation we entered into past outpouring has proven to beryllium a beneficial move arsenic it yet delayed our request to rumor bonds during astir of 2022.

In December, Idaho Power issued a bid of delayed tie bonds successful nan backstage indebtedness markets that will mature successful 10, 20 and 30 years. We drew nan first $48 cardinal of those bonds successful precocious December, and we'll tie nan remaining $122 cardinal successful early March. All of nan bonds from this issuance priced adjacent a astir 5% coupon rate. This issuance will summation liking disbursal successful 2023, but nan delayed tie characteristic was different useful instrumentality to finance our superior spending plans, peculiarly our artillery retention projects slated for a mid-2023 in-service date.

During nan remainder of this year, we scheme to proceed our attraction connected prudently managing liking disbursal and looking for opportune windows successful nan indebtedness markets. Our adjacent maturity is nan $75 cardinal enslaved group for April 1, which has a 2.5% liking rate, surely sad to time off those little rates behind.

Slide 13 shows our 2023 net guidance scope and cardinal operating metrics assumptions. We expect IDACORP's 2023 net to beryllium successful nan scope of $4.95 to $5.15 per diluted share. With nan presumption that Idaho Power will request to utilize astir $15 million, arsenic Justin mentioned, of further finance taxation in installments amortization to recognize nan 9.4% return connected year-end equity successful Idaho. This guidance assumes normal upwind successful 2023 and a return to normal powerfulness proviso expenses.

We expect afloat twelvemonth O&M to beryllium successful nan scope of $385 cardinal to $395 million. While we proceed to respond to macro inflationary trends arsenic they occur, we're assured successful our team's committedness to intimately watch our spending. We're still actively moving to negociate nan proviso concatenation and our breadth of vendors arsenic good arsenic continuing to attraction connected wide costs.

There are besides immoderate comparative factors to consider. As we look ahead, based connected our activity plans and works attraction schedule, we don't presently expect to spot a complaint of summation successful O&M successful 2023, for illustration we saw successful 2022. And successful fact, our 2023 guidance assumes a humble wide diminution compared pinch 2022.

A large portion of that is nan scheduled works attraction for respective plants that stacked up past year, but only 1 works is scheduled for 2023. There were different attraction projects astatine hydro plants and successful T&D that besides should beryllium less number successful disbursal this twelvemonth if things mostly spell according to plan. Non-variable labor-related disbursal is 1 that will summation this twelvemonth pinch modular costs adjustments, but absent a awesome macroeconomic displacement not astatine nan aforesaid complaint we saw successful 2022.

Our anticipation connected this year's CapEx spending has risen to nan scope of $650 cardinal to $700 million, which will beryllium a 44% summation astatine nan midpoint complete nan already elevated existent spending levels we saw this year. Our 2023 forecast includes important increases related to nan B2H transmission statement task arsenic good arsenic capacity assets additions Lisa referred to earlier.

Finally, fixed our astir updated forecast of hydropower operating conditions, we presently expect hydropower procreation to beryllium wrong nan scope of 5.5 cardinal to 7.5 cardinal megawatt hours for nan year. Although we've seen bully snowpack conditions truthful acold this year, and nan skiing successful Idaho has been great, pinch nan drought conditions we've seen complete nan past mates of years, nan reservoirs are starting astatine beautiful debased levels.

Slide 14 shows nan caller outlook for precipitation and somesthesia from NOA. Current upwind projections for March done May propose that forecasters spot normal precipitation and temperatures arsenic we caput into nan spring. Normal conditions would bode good for snowfall melt and reservoir refill plants arsenic good arsenic for pump irrigation conditions.

And pinch that, Lisa and I and others connected nan telephone are happy to reply your questions.

Question-and-Answer Session

Operator

[Operator Instructions] We'll perceive first coming from Brian Russo pinch Sidoti.

Brian Russo

Hello. Good afternoon. Just connected nan complaint case. I ideate it will beryllium a 2022 humanities trial year?

Lisa Grow

It will beryllium a '23 year.

Brian Russo

Okay. We sewage 2023 trial twelvemonth for caller rates successful 2024?

Lisa Grow

Correct

Brian Buckham

Yes, Brian, nan measurement that I would look astatine it is we'll return 2022 arsenic somewhat of a financial guidelines year. And past what we'll do is propose immoderate known and measurable adjustments based connected 2023 and taxable that arsenic our wide complaint lawsuit ask.

Brian Russo

Okay. Got it. And do you deliberation you're going to record pinch nan 54% Idaho Power equity ratio that you had astatine year-end 2022? Or will that beryllium updated also?

Brian Buckham

So I think, Brian, arsenic we look astatine our financing plans going forward, we'll really person immoderate indebtedness issuances that would beryllium successful beforehand of our wide complaint case. It will really bring that debt-to-equity ratio down. So erstwhile we spell in, we wouldn't expect to person needfully a 54% equity rate. It will beryllium thing sub that, possibly looking astatine much of a 51%, 52% equity ratio going into nan complaint case.

Brian Russo

Okay. Great. And moreover pinch nan 2023 complaint base. Obviously, Hells Canyon and Boardman to Hemingway would beryllium extracurricular of that. So you'll conscionable proceed to gain connected nan quip balances and past look to retrieve that successful rates successful a early complaint lawsuit and/or possibly a azygous rumor rate-making proceeding?

Lisa Grow

Yes.

Brian Buckham

Yes, Brian, that's precisely right. We'll proceed to person AFUDC connected that outstanding quip, but wouldn't see them needfully successful a wide complaint case. We would either see them successful a early wide complaint lawsuit aliases there's nan anticipation of going to nan committee for azygous rumor complaint lawsuit arsenic associated pinch projects that are of that magnitude.

Anything of a Boardman to Hemingway aliases a Hells Canyon magnitude mightiness beryllium due for a one-off case. But -- we'll conscionable person to see. If you look astatine our superior spending plans, there's a batch of different CapEx retired location that mightiness beryllium folded into complaint guidelines astatine nan aforesaid time. So that will beryllium thing we look astatine erstwhile we look astatine our regulatory strategy arsenic to a wide aliases a one-off case.

Brian Russo

And Boardman to Hemingway, it's breaking crushed successful 2023. So are each nan regulatory approvals down you? And is nan imaginable summation successful ownership of buying BPA stake, is that included successful nan CapEx?

Lisa Grow

Adam, why don't you return that one?

Adam Richins

Yes. The 45% ownership is included successful nan CapEx. In position of adjacent steps, we received our authorities licence pinch a unanimous 6-0 vote. We're conscionable waiting for nan Oregon Supreme Court norm connected that successful June. We do scheme to break crushed successful nan mediate of this year. We person 2 CPCN filings pinch some Oregon and Idaho that we dream to reason successful June. So we're making awesome headway.

In position of nan negotiated deal, BPA is retired to nan nationalist correct now pinch that deal. Pens are down. We've negotiated each nan terms. We dream to perceive backmost from BPA present pinch their process present successful February, and past we'll beryllium capable to move guardant pinch executing nan agreements related to that deal.

Brian Russo

Okay. And past nan 2025 and 2026 RFPs, really tin you use from nan Inflation Reduction Act to possibly ain much of that, but besides negociate customer rates fixed your complaint guidelines growth?

Brian Buckham

Yes, Brian, there's rather a spot outstanding connected nan Inflation Reduction Act successful position of precisely really that's going to activity from some a taxation in installments perspective, a regulatory position and a GAAP perspective. So each of those 3 things person to interplay pinch 1 different earlier we could make immoderate decisions.

We do deliberation that location are benefits retired location successful those years from nan Inflation Reduction Act. Those are each yet going to travel done to our customers 1 measurement aliases nan other. So customers will person nan benefit. We utilized to look astatine analyzable structures for illustration taxation equity partnerships and things for illustration that.

We do -- arsenic we look to nan future, we besides look astatine our ain taxation in installments appetite. And really we usage those taxation credits to nan use of our customers is thing we're going to person to look astatine what nan situation is astatine nan clip and find nan champion measurement for that to activity for some our owners and our customers.

Adam Richins

The only point I mightiness adhd to that successful position of nan 25 RFPs, it looks this clip it's going to beryllium a operation of benignant of imaginable ownership of Idaho Power and 3rd parties. We're still negotiating those deals. So we haven't concluded that, but it looks for illustration benignant of for illustration nan past 2 RFPs, we're seeing a operation of imaginable ownership astatine PPAs.

Lisa Grow

The only different point that I would adhd that we person a squad that's really actively moving astatine each of those opportunities from nan IDA [ph] and IRA. And truthful those benefits whitethorn spell beyond those years arsenic we benignant of look astatine wherever those opportunities are and arsenic nan rules are really written.

Brian Russo

Okay. And conscionable existent quickly and lastly, obviously, your afloat twelvemonth guidance assumes normal weather. But person you seen incremental transmission revenues successful this first 4th based connected nan utmost upwind conditions and powerfulness value -- elevated powerfulness prices and possibly ground differentials northbound and westbound of you guys?

Adam Richins

Yes, Brian, this is Adam. We proceed to spot that and saw that early on. The marketplace has been very volatile, arsenic you know. And erstwhile that occurs, folks thin to usage our transmission statement to waste and acquisition successful betwixt nan 2 markets, nan mid-sea marketplace and nan Palo Verde market. And truthful we proceed to spot benignant of a dependable summation successful volumes and revenues successful that regard.

Brian Russo

Great. Thank you very much.

Operator

[Operator Instructions] We'll perceive adjacent from Anthony Crowdell pinch Mizuho.

Anthony Crowdell

Good afternoon. Hopefully, 2 speedy questions. One of them, I guess, a descent successful nan 3rd 4th deck, you guys talked astir dividend growth, I think, of astir 5%. And I apologize if I had that number wrong. Just -- I didn't spot that descent successful this deck. Has that changed astatine each and besides payout ratio guidance?

Brian Buckham

Yes, Anthony. So what I'll opportunity connected that is we're committed to that target payout ratio, that 60% to 70% of sustainable net that we've sewage retired there. Given nan CapEx walk that's successful process and upcoming and some nan expenses of maturation and nan complaint guidelines that results from that. I wouldn't telephone nan trajectory needfully linear.

But pinch nan maturation coming, I'd opportunity net to turn faster than our stated 5% targeted dividend maturation complaint if we execute good connected nan regulatory side. We're beautiful mindful of our large CapEx walk and standing agency considerations, and we expect nan complaint lawsuit rhythm to thief pinch rate flow. So that tin besides beryllium a use to dividends and surely thing we'll beryllium watching.

So I'd opportunity we cognize that dividend is important to our investors, and its portion of their thesis, and nan Board is besides alert of that. So that's beforehand and halfway for us.

Anthony Crowdell

So if I could conscionable sum that up, you did authorities that obviously, a batch of moving pieces there, but net maturation whitethorn transcend dividend growth, but you do person to execute connected immoderate regulatory filings, but you tin spot net maturation up of nan dividend growth?

Brian Buckham

Yes. Again, I don't -- not needfully deliberation that that's a linear thing, but location is simply a anticipation of that. If you look astatine things for illustration our complaint guidelines CAGR, if we execute good connected that, I deliberation location are opportunities retired location complete nan agelong term.

Anthony Crowdell

Great. And past erstwhile I look astatine your CapEx slide, is location immoderate measurement you could quantify, successful Slide 10, what's nan load maturation you're assuming connected Slide 10? Like that CapEx reflects what assumed load growth?

Lisa Grow

Yes, that's conscionable complete 5% that we're utilizing successful our latest IRP study to 5.5%.

Anthony Crowdell

Okay. Did that unit income maturation -- and I apologize, I deliberation I saw a descent of nan EI wherever nan 2023 IRP, nan maturation was possibly successful nan 6% range. And I cognize it's a very humble move down, but is that accurate?

Lisa Grow

Yes, I judge it is. And that was much timing of large-load projects.

Anthony Crowdell

Great. That’s each I had. Thanks truthful overmuch for taking my questions.

Operator

[Operator Instructions] We'll perceive adjacent from Chris Ellinghaus pinch Siebert.

ChrisEllinghaus

That's great. I was looking astatine nan page and nan 10-K pinch nan load maturation forecast. This 5-year outlook, tin you benignant of break down that 5.5% number into what's from customer growth? What's from benignant of ample caller loads? And are you incorporating maturation from electrification successful there? Can you springiness america immoderate consciousness of really that 5.5% breaks down?

Adam Richins

Yes, sure. This is Adam. I deliberation nan largest information of benignant of nan summation betwixt nan 2 IRPs is ample load customers. We conscionable mentioned that betwixt nan analysts discussions. And today, we had a flimsy alteration from 6% to 5.5%. Some of that is conscionable a residential look, and that has gone down conscionable slightly. But nan ample load successful nan C&I inquiries and load proceed to beryllium beautiful significant, and that's what makes up benignant of that summation to that 5.5%.

Brian Buckham

I'd adhd to that. We do see immoderate electrification successful there. But I deliberation 1 point we've taken a blimpish position connected residential conscionable successful ray of macroeconomic conditions that are retired there. And what we've seen successful slowing lodging income right, from owe rates and benignant of immoderate economical uncertainty that's retired there.

So -- but that is each built into our forecast. Some of that is further out. So we're not saying that it's 5.5% each year, that is complete that 5-year play of time, pinch perchance higher maturation complete nan later years successful that 5-year play arsenic customers ramp up.

Chris Ellinghaus

I was going to opportunity that 5.5, 5 years pinch a batch of C&I loads. Do you spot an hold of this beyond nan 5 years with, say, EV take rates and economical recovery, possibly goosing nan residential side? So do you spot this benignant of elevated level being a longer word than nan 5-year sky arsenic well?

Lisa Grow

I mean it surely could be. I deliberation nan IRA is going to put a batch of opportunity retired location for that, but we'll person to hold and spot if consumers make nan shifts that those programs are intending. But yes, we do spot that location is opportunity for sure.

Adam Richins

Just to springiness you an idea, Chris, connected electrification. Our year-over-year maturation for electrical vehicles accrued astir 70% successful 1 year. So I expect we're going to proceed to spot that. We really conscionable anecdotally person gotten our first lightings for Ford Lightings astatine Idaho Power, and I've been piloting it complete nan past week. And I person to opportunity it's a beautiful awesome vehicle.

So you commencement to spot these caller models travel out. Certainly, I deliberation electrification will continue. And past arsenic Lisa said, pinch these ample loads, these are beautiful large projects from Micron and Meta. And they person indicated that they could proceed into nan future. Who knows whether that's going to hap aliases not, but it's thing that surely could hap and accrued load maturation then.

Chris Ellinghaus

Okay. Great. In nan guidance, past twelvemonth was not a ace irrigation year. So really are you reflecting irrigation successful '23? Is location immoderate betterment there? Or are you assuming akin results? What's nan irrigation outlook.

Lisa Grow

Yes, we benignant of looked astatine benignant of going backmost to normal patterns where, again, arsenic Brian mentioned, it was very bedewed and cool past spring, which was an anomaly. So we're really benignant of going backmost to normal upwind patterns and forecasting based connected that.

Chris Ellinghaus

Okay. Great. Have you sewage immoderate updated benignant of clip lines for Boardman to Hemingway aliases Gateway West successful position of completions?

Adam Richins

This is Adam. For Boardman to Hemingway, we're still looking astatine 2026 successful that year. In position of Gateway West, we're correct successful nan mediate of modeling what that looks for illustration successful our IRP. Certainly, immoderate of nan models person seen Gateway West move guardant earlier nan extremity of nan decade. Some show it move back. What we're going to person to look at? What is nan astir cost-effective attack for our customers. But certainly, nan thought of Gateway West moving guardant is simply a possibility.

Brian Buckham

And Chris, I'll conscionable adhd that successful that CapEx stack that we person successful nan materials that are successful nan slides, we do person a mini incremental magnitude for immoderate of nan early stages of Gateway West astatine nan extremity of that 5-year period.

Chris Ellinghaus

Okay. That's helpful. Brian, you talked astir benignant of expanding expectations for equity, which is nary awesome astonishment fixed nan CapEx. But you do person a beautiful important summation successful 2024, should we beryllium reasoning that, that's benignant of nan sky for your first equity need?

Brian Buckham

Yes, I'd opportunity that it's not imminent, but we do watch things for illustration marketplace conditions and indebtedness superior markets and things for illustration that, and they each power what our financing plans are. Our extremity is erstwhile we get to that constituent wherever we person an equity need, we want to blend indebtedness and equity, we do understand nan issues associated pinch equity issuances connected dilution and things for illustration that.

So we've sewage to watch marketplace conditions. We've sewage to watch in installments ratios and those types of things tin effect our timing, I would say, little apt successful 2023, but 2024 starts to travel into nan window, surely conscionable based connected that ample CapEx that's retired there. But again, it depends connected a number of factors.

Chris Ellinghaus

Okay, great. That makes sense. All right, acknowledgment for nan color. Appreciate it guys.

Operator

And that does reason nan question-and-answer convention for today. Ms. Grow, I would for illustration to move things backmost to you.

Lisa Grow

Thank you, everyone, for joining america this day and for your continued liking successful IDACORP. I dream you each bask this awesome agelong President's weekend. And you get to walk immoderate clip pinch your families, and I dream that while you're retired recreating aliases doing immoderate you're doing, you do it safely. So convey you very much.

Operator

And that will reason today's conference. Again, convey you for joining us, and you whitethorn now disconnect.