With full reservoirs, IDACORP Inc. anticipates a good year for hydroelectric power production, which will be necessary to keep up with steady growth in customers.
Operating income at Idaho Power Co. increased by $35.6 million in 2017, thanks to rapid customer growth that increased by 2% for the first time since 2007, IDACORP and Idaho Power CFO Steve Keen said Feb. 22 on the company's fourth-quarter 2017 earnings call. President and CEO Darrel Anderson added that according to U.S. Census Bureau figures, Idaho's population is growing at the fastest rate among states.
On the matter of cryptocurrency, Anderson said the company had a number of inquiries during 2017 by individual customers seeking low-cost power areas to run their cryptocurrency mining equipment. The company could see several megawatts of new cryptocurrency mining customer load by the second quarter.
The company is renewing the long-term federal operating license for its Hells Canyon hydroelectric power plant, its largest source of power. Idaho Power recently filed a settlement with the Idaho Public Utilities Commission to request about $216 million in hydropower relicensing costs for the power complex.
Snowpack so far this winter has been a bit below normal, Keen and Anderson said in response to questions, but reservoirs are full because the previous winter's snowpack was above normal. Because of that, they expect power production from hydro resources to be roughly equal to 2017's 8.9 million MWh.
IDACORP also expects to gain net income of about $5 million annually from a settlement related to the North Valmy coal-fired power plant, in which it owns a 50% interest, with a gradual decline through 2028. The settlement will pave the way for IDACORP to reduce coal-fired power production, which decreased to 12% in 2017 from just above 24% in 2016. North Valmy's two units are scheduled to be shut down in 2019 and 2025.
Fourth-quarter 2017 net income attributable to the company was reported at $38.9 million, or 77 cents per share, up from $33.2 million, or 66 cents per share, in the same period of 2016.
Net income was partially affected by the Tax Cuts and Jobs Act, which increased Idaho Power's 2017 income tax expense by $2 million over 2017 as certain unprotected deferred tax accounts were adjusted to reflect the new federal rate.
IDACORP expects earnings per diluted share during 2018 to be between $4.10 and $4.25.