Good day, everyone. Welcome to the IDACORP's Fourth Quarter and Year-End 2022 Earnings Conference Call. Today's call is being recorded and is on our webcast live. A 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 Mr.

Justin Forsberg, Director of Investor Relations and Treasury. Please go ahead, sir..

Thanks, Gallienne, and good afternoon, everyone. We appreciate you tuning in for our call. This morning, we issued and posted to IDACORP's website our fourth quarter and year-end 2022 earnings release and the associated Form 10-K. The slides that accompany today's call are also available on IDACORP's website.

We'll refer to those slides by number throughout the call today.

As noted on Slide 2, our discussion today includes forward-looking statements, including earnings guidance, spending forecasts and regulatory plans, which reflect our current views on what the future holds, but are subject to several risks and uncertainties, including uncertainties surrounding the impacts of future economic conditions.

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; and Brian Buckham, IDACORP's Senior Vice President and Chief Financial Officer. In addition to Lisa and Brian, we have other members of our management team available for a Q&A session following our prepared remarks.

Slide 4, shows our full year financial results. IDACORP's 2022 earnings per diluted share were $5.11, an increase of more than 5% or $0.26 per share from last year, reflecting the impacts of customer growth, weather and a mid-year regulatory order, partially offset by higher operating costs.

Both 2022 revenues and earnings are IDACORP's highest in the history of the company, and the 2022 earnings results were the 15th consecutive year in growth of earnings per share.

Today, we also initiated our full year 2023 IDACORP earnings guidance estimate in the range of $4.95 to $5.15 per diluted share, which includes our current expectation that Idaho Power will utilize approximately $15 million of additional tax credits that are available to support earnings at a 9.4% return on equity level in the Idaho jurisdiction under its Idaho regulatory settlement stipulation.

These estimates assume historically normal weather conditions throughout the year and a return to more normal power supply expenses. I'll now turn the call over to Lisa..

Thank you, Justin, and thanks to everyone for joining us on the call today. I want to begin my remarks by underscoring what Justin just mentioned that IDACORP completed its 15th consecutive year of growth in earnings per share, that you can see on Slide 5.

We believe this is a remarkable achievement among investor-owned utilities, and I want to thank our hard-working team of employees for their contributions to our sustained success.

These financial results have translated into a growing dividend, and we are also proud of our high customer satisfaction scores and excellent service reliability throughout 2022. As noted on Slide 6, customer growth remains strong across Idaho Power service area. Our customer base grew 2.4% during 2022, and we now serve nearly 620,000 customers.

Moody's most recent GDP calculation for our service area forecast strong growth of 3.9% in '23 and 4.5% in '24 as our local economy continues to outperform national trends.

In addition to being a great place to live and do business, we believe the reliable, affordable, clean energy Idaho Power provides is a key driver for growth across our service area. Robust residential growth has been a theme for many years.

And while single-family residential building permits have slowed in recent months as interest rates have increased, we expect overall economic activity to remain strong.

Unemployment in Idaho Power service area during the fourth quarter was 2.3% compared to 3.5% at the national level and employment has increased by 5.8% since the fourth quarter of 2021. We are also seeing a major uptick in Idaho Power's low growth forecast as a result of several large load projects.

And with the new meta data center coming to Idaho and Micron's major expansion of its Boise headquarters, including new microchip fabrication facilities, Idaho Power expects retail sales growth of 5.5% over the next five years. This growth is projected to come on top of the year when we saw the highest retail megawatt hour sales in our history.

As our customer base grows, you'll see on Slide 7 that we continue to add resources that will allow us to meet our increasing demand, while simultaneously moving away from our coal-fired resources. Large transmission projects, like Boardman to Hemingway, or B2H, for which we expect to break ground this year, will be critical.

We are also working with PacifiCorp on segments of the 1,000-mile gateway west transmission line project, which will help both companies meet rising demand and improve reliability. During the fourth quarter, Idaho Power began buying energy from the recently completed 120-megawatt Jackpot Solar project in Southern Idaho.

Meanwhile, we received preliminary approval from our regulators for our first utility-scale energy storage projects that totaled 120 megawatts of company-owned battery storage that is under construction, with an anticipated in-service date of summer of '23.

We also signed agreements for a new 100-megawatt solar project PPA, paired with an additional 60 megawatts of company-owned battery storage that is scheduled to come online in the summer of '24.

We anticipate needing additional energy and capacity resources in '25 and '26, and we are in the bid evaluation process for the projects for 2025 and the RFP stage for the 2026 project to help us meet those future needs.

Our efforts to expand and improve Idaho Power's energy grid requires significant investment, and we currently anticipate growth and reliability-focused projects will drive more than $3 billion of capital expenditures over the next 5 years, and Brian will discuss more about that in a moment. We truly are building the future.

And it is a fascinating dynamic as we experience the convergence of historic growth, emerging technologies and our clean energy goal, all while safely delivering the reliable, affordable service our customers expect.

Along with reliability and customer service, top of mind is ensuring our investors continue to earn a fair and reasonable return on their investment in our company.

Turning to Slide 8, you will see that we are in the process of preparing a general rate case in Idaho that we currently plan to file on June 1, requesting that Idaho customer rates change on January 1, 2024, and then with an Oregon general rate case filing that will likely follow shortly thereafter.

We've invested over $1 billion in infrastructure for the communities and businesses we serve since Idaho Power's last general rate case over a decade ago, and we have considerable infrastructure investment ongoing during this year that we plan to include in the case.

Much of our investment was in response to rapid growth in our service area as we have seen our customer count increased by nearly 120,000 over the past decade, which is an increase of about 23%.

We've also made significant investments in maintaining and improving system reliability from our transmission, distribution and generation assets, which benefits everyone who lives and does business in our service area.

Customer growth has consumed the length we once had in our generation system, which over the past several years, has served to lessen the incremental costs associated with growth.

However, as I touched on a moment ago, our planning process has identified several additional energy and capacity needs to serve new record loads that are projected to accelerate going forward.

While the major driver generating the need for a rate case is the investments in property, plant and equipment to serve our customers' growing energy needs, there will be some inflationary factors contributing to the request in the case.

We have worked hard to keep our O&M low for the past decade, with an average annual rate -- growth rate through 2022 of only 1% since 2012 or an increase of just over $50 million to serve those nearly 120,000 new customers.

So we expect our upcoming case to be largely about rate base additions to reliably serve our customers and, to a lesser extent, about recovery of higher expenses. We believe the June 1 filing date also allows us to balance our need for timely cost recovery and our goal of affordability for our customers.

While we understand that any level of price increase can be impactful to customers, our experience over the years shows that smaller requests over a period of time rather than a single large request are generally more manageable.

That said, we expect more frequent cases in the coming years due to continued infrastructure investment including Hills Canyon relicensing, new energy and capacity resources and high-voltage transmission projects. Balancing the impacts on customers continues to be an important component of our efforts to control costs and to make prudent decisions.

We have established a very disciplined culture resulting in a strong record of managing our expenses.

It's our belief that our rate request will exhibit prudent spending and will demonstrate that our company made the necessary investments to continue providing safe, reliable electric service to our customers in responding to our state's economic development. Ideally, we are targeting a single-digit average percentage rate increase in our June filing.

As I mentioned, we've not been in for a general rate case in over a decade, but our regulators have demonstrated through interim regulatory proceedings and ability and desire to find constructive ways to balance fair returns for Idaho Power and its investors with the needs and cost of interests of our customers.

As examples, in recent years, the Idaho Commission has found constructive ways to address tax reform, the ADITC mechanism and the economic realities associated with exiting coal-fired generation.

We're on track with the early stages of preparing for this case, and we're confident that the case we plan to present -- and that -- we're confident in the case where we plan to present and that our constructive regulatory environment in Idaho stands firm.

As a reminder, the Idaho Commission requires Idaho Power to give a 60-day notice of its intent to file a general rate case, and we expect the proceeding would span about 7 months before new rates would be in effect. With that, I will hand things over to Brian for a financial overview of 2022 and our expectations going forward.

Brian?.

Thanks, Lisa. Good afternoon, everybody. Thanks for tuning in. I'll start on Slide 9, where you'll see a summary of our financial results in 2022 compared to our 2021 results. We saw continued strong customer growth. We had higher weather-related usage, and we had higher transmission wheeling revenues.

Also, the Jim Bridger order from the Idaho Commission last summer notably impacted our year-over-year results.

On the other hand, offsetting those benefits on a comparative basis were higher operating and maintenance expenses as well as the portion of net power supply expenses that were not preferred for future recovery under our power cost adjustment mechanisms.

The Idaho fixed cost adjustment mechanism also had a negative impact on comparative results, with the FCA adjusting revenues based on usage from the hotter summer weather. In the table, you'll see customer growth of 2.4% added $12.1 million to operating income.

Unsurprisingly, because it appears to be a national trend, higher mortgage rates and economic uncertainty have impacted single-family residential home sales in our service area.

That said, looking at Moody's current positive GDP outlook for our service area, and the analysis and forecast we developed for the next IRP, the trend points to continued strong customer and load growth.

And despite our expectation for moderation and residential growth in the near term, at least relative to the high percentages we've seen in recent years, a large part of our expectations for growth are driven by significant commercial and industrial customers.

We currently project the 5-year forecasted annual retail sales load growth rate increase from 2.6% in the 2021 IRP to 5.5% in the 2023 IRP. So certainly a notable increase. We've seen some shifting in the ramp rate for some of those large industrial customers, actually in both directions.

So our engineers are working hard to meet the upcoming demand to ensure the infrastructure is online when our customers flip the switch. Back to this year's results.

Extreme temperatures and volatile weather in 2022 drove an overall 5% increase in usage per residential customer, a 2% increase in commercial and industrial per customer usage and an overall 9% decline in usage per irrigation customer.

That irrigation customer decrease was primarily a result of abnormally high precipitation and cool temperatures during the second quarter at the start of the agricultural growing season. While last summer, we didn't exceed our all-time record peak load set in June of 2021, we hit all-time August and September peaks.

We also set a new all-time winter peak in December, reflecting the growth we've seen over the past few years. The weather conditions combined to cost much of the $8.8 million net usage per customer increased operating income.

The $12.7 million cumulative decrease in Idaho Power's fixed cost adjustment mechanism revenues, that you see next on the table, partially offset the increases in residential and small commercial customer usage. Further down, you'll see a $24.4 million increase in operating income from the change in net per megawatt hour revenue.

The Idaho regulatory order for the Jimbridger plant, which increased retail sales on June 1 last year, led to much of that increase. Another piece relates to the change in customer mix and sales to higher-margin customer classes compared to last year.

We still expect the Jim Bridger order to provide an after-tax net income benefit of $10 million to 2023 when compared with roughly $20 million of after-tax benefit for 2022, which included the deferral of certain depreciation expense.

So next on the table, continued sustained transmission wheeling revenues during the year increased operating income by $12.5 million. Energy price volatility in the Western U.S. led to price spreads between energy market hubs, which increased wheeling activity across Idaho Power's transmission system.

Also, wheeling customers paid 4% more for transmission wheeling for much of the year, with Idaho Power's transmission tariff rate increasing in October 21, and again in October 2022, reflecting higher transmission costs. Higher other O&M expenses led to a $38.1 million decrease in operating income in 2022 compared with 2021.

And this resulted from several things, and the largest two were scheduled plant maintenance that backed up in 2022 at several facilities and our labor costs and variable compensation expense. Inflationary pressures on professional services were also a large driver of that increase.

There were some smaller items, like vehicle fuel and some transmission and distribution maintenance work that were smaller individually, but large on a cumulative basis. As we look at 2023, we expect a potential reduction in other O&M compared to 2022. And I'll get to that when I discuss our guidance for this year.

The $5.4 million decrease in depreciation expense that's further down the table reflects the deferral of depreciation expenses related to the Bridger order.

Offset by the accelerated depreciation on the coal-related assets at the Jim Bridger plant, which began on June 1 last year, this net bridge-related decrease in depreciation expenses partially offset by higher other plant and service compared with 2021.

The portion of higher net power supply expenses that were not deferred for future recovery and rates through power cost adjustment mechanisms in both Idaho and Oregon contributed to the sizable $14.8 million increase and other changes in operating revenues and expenses, which are next on the table.

That's basically our portion of the shared risk and the power cost adjustment mechanism, mostly due to higher gas and wholesale power prices in 2022 and the impact of below-average generation from Idaho Power's hydro fleet due to low water conditions.

Wrapping up the table, a $15.7 million decrease in non-operating expense benefited Idaho Power's net income. A significant portion of that was from higher allowance for funds used during construction from our higher CapEx.

We also saw higher interest income due to higher market interest rates and higher investment income related to life insurance and the Rabi Trust for our non-qualified pension plans. In addition, costs we recorded in 2021 related to a post-retirement medical plan didn't recur last year as we expected.

And these items were partially offset by higher interest on long-term debt. So in total, all of those drivers, combined, led to a 5.5% increase in income year-over-year. Our CapEx spending on a cash basis last year increased by about 50% over what we spent during 2021, and that was our expectation.

The bulk of that additional CapEx, relative to last year and relative to our historic spending levels as for our large battery storage projects and some natural gas plant upgrades to obtain additional output and efficiency from those units. On Slide 10, we've included our updated 5-year forecast CapEx.

You'll see that it reflects an additional 15% increase over last year's already sizable forecast, with more than $3 billion of expected capital projects through the end of 2027.

So that chart includes refreshed cost assumptions for our major capital projects and our expectations for capital spending responsive to at least a portion of industrial and commercial growth. We believe we're being somewhat conservative in our CapEx estimates for the outcome of pending RFPs for energy and capacity resources.

So there's the potential that our CapEx could be higher at the back end of the 5-year forecast period. We will update our forecast over time as the outcome of the RFPs and more specific timing of the build-out for commercial and industrial growth is solidified.

Slide 11 has an updated look at our estimated rate base eligible assets as of the end of each of the next 5 years. This is a further increased growth rate over last year's estimates, now at just over 11%.

And while it will be our charge to obtain a fair return on this rate base, as Lisa outlined, we believe the growth in reliability-driven projects going forward will demonstrate prudent and thoughtful planning as we continue to respond to customer growth.

As we execute on these plans, we're focused on ensuring IDACORP and Idaho Power continue to maintain strong balance sheets and liquidity. Our credit ratings remain solidly investment grade, and we continue to keep the rating agencies informed of our forecasts and plans.

We generally target a relatively even capital structure, so we currently believe our 2023 capital plans will be financed with debt. We don't see an equity issuance as imminent, but given the size of our upcoming capital plans, our financing strategy does include a blend of equity and debt fund future growth.

As a point of reference, IDACORP hasn't issued any meaningful equity since 2010, and that was only around $35 million in issuance. And as usual, we intend to balance all considerations, like credit ratings, regulatory expectations, fixed income market conditions and equity impacts as we finance the next phase of Idaho Power's future.

Turning to Slide 12, you'll see IDACORP's operating cash flows and liquidity position. Cash flows from operations in 2022 were comparable to 2021, only about $12 million lower. So we continue to consider thoughtful ways to manage our debt financing.

Throughout 2022, we saw relatively little impact to our income statements related to interest expense pressures. The term loan facility we entered into last spring has proven to be a beneficial move as it ultimately delayed our need to issue bonds during most of 2022.

In December, Idaho Power issued a series of delayed draw bonds in the private debt markets that will mature in 10, 20 and 30 years. We drew the first $48 million of those bonds in late December, and we'll draw the remaining $122 million in early March. All of the bonds from this issuance priced near a roughly 5% coupon rate.

This issuance will increase interest expense in 2023, but the delayed draw feature was another useful tool to finance our capital spending plans, particularly our battery storage projects slated for a mid-2023 in-service date.

During the rest of this year, we plan to continue our focus on prudently managing interest expense and looking for opportune windows in the debt markets. Our next maturity is the $75 million bond set for April 1, which has a 2.5% interest rate, certainly sad to leave those lower rates behind.

Slide 13 shows our 2023 earnings guidance range and key operating metrics assumptions. We expect IDACORP's 2023 earnings to be in the range of $4.95 to $5.15 per diluted share.

With the assumption that Idaho Power will need to utilize approximately $15 million, as Justin mentioned, of additional investment tax credit amortization to realize the 9.4% return on year-end equity in Idaho. This guidance assumes normal weather in 2023 and a return to normal power supply expenses.

We expect full year O&M to be in the range of $385 million to $395 million. While we continue to react to macro inflationary trends as they occur, we're confident in our team's commitment to closely watch our spending. We're still actively working to manage the supply chain and our breadth of vendors as well as continuing to focus on overall costs.

There are also some comparative factors to consider. As we look ahead, based on our work plans and plant maintenance schedule, we don't currently expect to see a rate of increase in O&M in 2023, like we saw in 2022. And in fact, our 2023 guidance assumes a modest overall decline compared with 2022.

A big piece of that is the scheduled plant maintenance for several plants that stacked up last year, but only one plant is scheduled for 2023. There were other maintenance projects at hydro plants and in T&D that also should be fewer number in expense this year if things generally go according to plan.

Non-variable labor-related expense is one that will increase this year with standard wage adjustments, but absent a major macroeconomic shift not at the same rate we saw in 2022.

Our expectation on this year's CapEx spending has risen to the range of $650 million to $700 million, which will be a 44% increase at the midpoint over the already elevated actual spending levels we saw this year.

Our 2023 forecast includes significant increases related to the B2H transmission line project as well as capacity resource additions Lisa referred to earlier.

Finally, given our most updated forecast of hydropower operating conditions, we currently expect hydropower generation to be within the range of 5.5 million to 7.5 million megawatt hours for the year.

Although we've seen good snowpack conditions so far this year, and the skiing in Idaho has been great, with the drought conditions we've seen over the last couple of years, the reservoirs are starting at pretty low levels. Slide 14 shows the recent outlook for precipitation and temperature from NOA.

Current weather projections for March through May suggest that forecasters see normal precipitation and temperatures as we head into the spring. Normal conditions would bode well for snow melt and reservoir refill plants as well as for pump irrigation conditions. And with that, Lisa and I and others on the call are happy to answer your questions..

[Operator Instructions] We'll hear first today from Brian Russo with Sidoti..

Hello. Good afternoon. Just on the rate case.

I imagine it will be a 2022 historical test year?.

It will be a '23 year..

Okay.

We got 2023 test year for new rates in 2024?.

Correct.

Yes, Brian, the way that I would look at it is we'll take 2022 as somewhat of a financial base year. And then what we'll do is propose some known and measurable adjustments based on 2023 and submit that as our general rate case ask..

Okay. Got it.

And do you think you're going to file with the 54% Idaho Power equity ratio that you had at year-end 2022? Or will that be updated also?.

So I think, Brian, as we look at our financing plans going forward, we'll actually have some debt issuances that would be in advance of our general rate case. It will actually bring that debt-to-equity ratio down. So when we go in, we wouldn't expect to have necessarily a 54% equity rate.

It will be something sub that, maybe looking at more of a 51%, 52% equity ratio going into the rate case..

Okay. Great. And even with the 2023 rate base. Obviously, Hells Canyon and Boardman to Hemingway would be outside of that.

So you'll just continue to earn on the quip balances and then look to recover that in rates in a future rate case and/or maybe a single issue rate-making proceeding?.

Yes..

Yes, Brian, that's exactly right. We'll continue to have AFUDC on that outstanding quip, but wouldn't include them necessarily in a general rate case. We would either include them in a future general rate case or there's the possibility of going to the commission for single issue rate case as associated with projects that are of that magnitude.

Anything of a Boardman to Hemingway or a Hells Canyon magnitude might be appropriate for a one-off case. But -- we'll just have to see. If you look at our capital spending plans, there's a lot of other CapEx out there that might be folded into rate base at the same time.

So that will be something we look at when we look at our regulatory strategy as to a general or a one-off case..

And Boardman to Hemingway, it's breaking ground in 2023.

So are all the regulatory approvals behind you? And is the potential increase in ownership of buying BPA stake, is that included in the CapEx?.

Adam, why don't you take that one?.

Yes. The 45% ownership is included in the CapEx. In terms of next steps, we received our state permit with a unanimous 6-0 vote. We're just waiting for the Oregon Supreme Court rule on that in June. We do plan to break ground in the middle of this year. We have 2 CPCN filings with both Oregon and Idaho that we hope to conclude in June.

So we're making great headway. In terms of the negotiated deal, BPA is out to the public right now with that deal. Pens are down. We've negotiated all the terms. We hope to hear back from BPA here with their process here in February, and then we'll be able to move forward with executing the agreements related to that deal..

Okay.

And then the 2025 and 2026 RFPs, how can you benefit from the Inflation Reduction Act to maybe own more of that, but also manage customer rates given your rate base growth?.

Yes, Brian, there's quite a bit outstanding on the Inflation Reduction Act in terms of exactly how that's going to work from both a tax credit perspective, a regulatory perspective and a GAAP perspective. So all of those 3 things have to interplay with one another before we could make some decisions.

We do think that there are benefits out there in those years from the Inflation Reduction Act. Those are all ultimately going to flow through to our customers one way or the other. So customers will receive the benefit. We used to look at complicated structures like tax equity partnerships and things like that.

We do -- as we look to the future, we also look at our own tax credit appetite. And how we use those tax credits to the benefit of our customers is something we're going to have to look at what the environment is at the time and find the best way for that to work for both our owners and our customers..

The only thing I might add to that in terms of the 25 RFPs, it looks this time it's going to be a mix of kind of potential ownership of Idaho Power and third parties. We're still negotiating those deals. So we haven't concluded that, but it looks like kind of like the last 2 RFPs, we're seeing a mix of potential ownership at PPAs..

The only other thing that I would add that we have a team that's really actively working at all of those opportunities from the IDA [ph] and IRA. And so those benefits may go beyond those years as we kind of look at where those opportunities are and as the rules are actually written..

Okay. And just real quickly and lastly, obviously, your full year guidance assumes normal weather.

But have you seen incremental transmission revenues in this first quarter based on the extreme weather conditions and power price -- elevated power prices and maybe basis differentials north and west of you guys?.

Yes, Brian, this is Adam. We continue to see that and saw that early on. The market has been very volatile, as you know. And when that occurs, folks tend to use our transmission line to trade in between the two markets, the mid-sea market and the Palo Verde market.

And so we continue to see kind of a steady increase in volumes and revenues in that regard..

Great. Thank you very much. .

[Operator Instructions] We'll hear next from Anthony Crowdell with Mizuho..

Good afternoon. Hopefully, two quick questions. One of them, I guess, a slide in the third quarter deck, you guys talked about dividend growth, I think, of roughly 5%. And I apologize if I had that number wrong. Just -- I didn't see that slide in this deck.

Has that changed at all and also payout ratio guidance?.

Yes, Anthony. So what I'll say on that is we're committed to that target payout ratio, that 60% to 70% of sustainable earnings that we've got out there. Given the CapEx spend that's in process and upcoming and both the expenses of growth and the rate base that results from that. I wouldn't call the trajectory necessarily linear.

But with the growth coming, I'd say earnings to grow faster than our stated 5% targeted dividend growth rate if we execute well on the regulatory side. We're pretty mindful of our big CapEx spend and rating agency considerations, and we expect the rate case cycle to help with cash flow.

So that can also be a benefit to dividends and certainly something we'll be watching. So I'd say we know that dividend is important to our investors, and its part of their thesis, and the Board is also aware of that. So that's front and center for us..

So if I could just sum that up, you did state that obviously, a lot of moving pieces there, but earnings growth may exceed dividend growth, but you do have to execute on some regulatory filings, but you can see earnings growth ahead of the dividend growth?.

Yes. Again, I don't -- not necessarily think that that's a linear thing, but there is a possibility of that. If you look at things like our rate base CAGR, if we execute well on that, I think there are opportunities out there over the long term..

Great.

And then when I look at your CapEx slide, is there any way you could quantify, in Slide 10, what's the load growth you're assuming on Slide 10? Like that CapEx reflects what assumed load growth?.

Yes, that's just over 5% that we're using in our latest IRP analysis to 5.5%..

Okay. Did that retail sales growth -- and I apologize, I think I saw a slide of the EI where the 2023 IRP, the growth was maybe in the 6% range.

And I know it's a very modest move down, but is that accurate?.

Yes, I believe it is. And that was more timing of large-load projects..

Great. That’s all I had. Thanks so much for taking my questions. .

[Operator Instructions] We'll hear next from Chris Ellinghaus with Siebert..

That's great. I was looking at the page and the 10-K with the load growth forecast.

This 5-year outlook, can you sort of break down that 5.5% number into what's from customer growth? What's from sort of large new loads? And are you incorporating growth from electrification in there? Can you give us any sense of how that 5.5% breaks down?.

Yes, sure. This is Adam. I think the largest portion of kind of the increase between the 2 IRPs is large load customers. We just mentioned that between the analysts discussions. And today, we had a slight decrease from 6% to 5.5%. Some of that is just a residential look, and that has gone down just slightly.

But the large load in the C&I inquiries and load continue to be pretty significant, and that's what makes up kind of that increase to that 5.5%..

I'd add to that. We do include some electrification in there. But I think one thing we've taken a conservative view on residential just in light of macroeconomic conditions that are out there. And what we've seen in slowing housing sales right, from mortgage rates and kind of some economic uncertainty that's out there.

So -- but that is all built into our forecast. Some of that is further out. So we're not saying that it's 5.5% every year, that is over that 5-year period of time, with potentially higher growth over the later years in that 5-year period as customers ramp up..

I was going to say that 5.5, 5 years with a lot of C&I loads.

Do you see an extension of this beyond the 5 years with, say, EV adoption rates and economic recovery, maybe goosing the residential side? So do you see this kind of elevated level being a longer term than the 5-year horizon as well?.

I mean it certainly could be. I think the IRA is going to put a lot of opportunity out there for that, but we'll have to wait and see if consumers make the shifts that those programs are intending. But yes, we do see that there is opportunity for sure..

Just to give you an idea, Chris, on electrification. Our year-over-year growth for electric vehicles increased about 70% in one year. So I anticipate we're going to continue to see that. We actually just anecdotally have gotten our first lightings for Ford Lightings at Idaho Power, and I've been piloting it over the last week.

And I have to say it's a pretty impressive vehicle. So you start to see these new models come out. Certainly, I think electrification will continue. And then as Lisa said, with these large loads, these are pretty big projects from Micron and Meta. And they have indicated that they could continue into the future.

Who knows whether that's going to happen or not, but it's something that certainly could happen and increased load growth then..

Okay. Great. In the guidance, last year was not a super irrigation year. So how are you reflecting irrigation in '23? Is there some recovery there? Or are you assuming similar results? What's the irrigation outlook..

Yes, we kind of looked at sort of going back to normal patterns where, again, as Brian mentioned, it was very wet and cool last spring, which was an anomaly. So we're really kind of going back to normal weather patterns and forecasting based on that..

Okay. Great.

Have you got any updated sort of time lines for Boardman to Hemingway or Gateway West in terms of completions?.

This is Adam. For Boardman to Hemingway, we're still looking at 2026 in that year. In terms of Gateway West, we're right in the middle of modeling what that looks like in our IRP. Certainly, some of the models have seen Gateway West move forward before the end of the decade. Some show it move back.

What we're going to have to look at? What is the most cost-effective approach for our customers. But certainly, the idea of Gateway West moving forward is a possibility..

And Chris, I'll just add that in that CapEx stack that we have in the materials that are in the slides, we do have a small incremental amount for some of the early stages of Gateway West at the end of that 5-year period..

Okay. That's helpful. Brian, you talked about sort of increasing expectations for equity, which is no great surprise given the CapEx.

But you do have a pretty significant increase in 2024, should we be thinking that, that's kind of the horizon for your first equity need?.

Yes, I'd say that it's not imminent, but we do watch things like market conditions and debt capital markets and things like that, and they all influence what our financing plans are.

Our goal is when we get to that point where we have an equity need, we want to blend debt and equity, we do understand the issues associated with equity issuances on dilution and things like that. So we've got to watch market conditions.

We've got to watch credit ratios and those types of things can impact our timing, I would say, less likely in 2023, but 2024 starts to come into the window, certainly just based on that large CapEx that's out there. But again, it depends on a number of factors..

Okay, great. That makes sense. All right, thanks for the color. Appreciate it guys..

And that does conclude the question-and-answer session for today. Ms. Grow, I would like to turn things back to you..

Thank you, everyone, for joining us this afternoon and for your continued interest in IDACORP. I hope you all enjoy this wonderful long President's weekend. And you get to spend some time with your families, and I hope that while you're out recreating or doing whatever you're doing, you do it safely. So thank you very much..

And that will conclude today's conference. Again, thank you for joining us, and you may now disconnect..