IDA Q1 2025: Proposes Rate Case Trackers to Accelerate Cost Recovery
- Robust customer and load growth: Executives indicated steady inquiries and interconnection requests from large load customers and generation resources, which signal continued demand and potential for revenue expansion in the future.
- Proactive regulatory strategies: Management is actively exploring creative rate case mechanisms and cost recovery methods—including reducing regulatory lag—to support timely funding of significant infrastructure investments, an initiative expected to improve future cash flow.
- Favorable wildfire risk management: The Q&A highlighted the positive impact of recently enacted wildfire mitigation legislation and solid risk management practices, which help limit potential litigation exposure and provide a more predictable operating environment.
- Regulatory and Rate Case Uncertainty: There is uncertainty over the effectiveness of proposed mechanisms (like trackers to reduce regulatory lag) and the overall timing of rate case filings, which could delay cost recovery for new infrastructure investments.
- Delayed Dispatchable Resource Timeline: The projection that new dispatchable resources may not come online until 2029 or 2030 raises concerns about meeting near-term demand and the risk of revenue shortfalls.
- Execution and Contract Negotiation Risks: Ongoing negotiations—such as for large load customers and data center contracts—and ambiguities around the outcomes of upcoming RFPs point to potential challenges in executing growth projects and realizing planned capital expenditures.
-
Rate Case
Q: What trackers will improve ROE?
A: Management is evaluating several mechanisms, including reducing regulatory lag and using specific filings like the Health Canyon adjustment to help cash flow while keeping earnings neutral, all aimed at improving the company’s overall return (e.g., via cost and timing adjustments). -
Transmission Recovery
Q: How will transmission costs be recovered?
A: The team is considering a mix of approaches—including aligning transmission project recoveries with the rate case and employing one-off tracking mechanisms—to ensure timely recovery of these investments (all options remain on the table). -
Dispatchable Timing
Q: When will new dispatchable resources come online?
A: Management expects dispatchable resources to be available by 2029 and 2030, with the possibility of additional capacity as further studies are conducted. -
Large Load Growth
Q: Are large load interconnections growing?
A: There continues to be a steady and robust flow of inquiries from large load customers, supporting the company’s growth and the necessary infrastructure investments. -
Data Center Contracts
Q: What’s the status on data center deals?
A: Contract negotiations with key data center customers are ongoing, with no material updates to report at this time. -
Multi-Year Mechanism
Q: Will you pursue a multi‐year rate mechanism?
A: While management is open to creative solutions to ease regulatory workload, a multi-year mechanism is not currently being proposed as a primary focus. -
Agricultural Impact
Q: Are market shifts affecting agriculture?
A: It’s still early; most agricultural planting decisions have been finalized, and any market impact on crops or exports remains unmeasurable at this stage. -
Short List Capacity
Q: What capacity is in the 2028 short list?
A: Although exact figures aren’t provided, management indicates the short list includes several hundred megawatts of capacity. -
Wildfire Legislation
Q: Does the wildfire law miss key protections?
A: The management is satisfied with the legislative outcome, noting that the law has effectively set the standard of care without missing any critical elements. -
Wildfire Fund
Q: Will there be a dedicated wildfire fund?
A: Considering Idaho’s smaller scale, creating a dedicated wildfire fund isn’t feasible; alternative strategies such as options in captive insurance remain under discussion.
Research analysts covering IDACORP.