IDACORP's Large-Contract Ramp Turns the Corner – and the Stock Dipped

Industrial revenue surge, half-cut ADITC guidance, and a new disclosure line signal the large-load story is finally hitting the income statement.

IDA · Earnings Call · 2026-07-30

A New Line on the Income Statement

The headline from IDACORP's second-quarter call wasn't a dramatic guidance jump or a surprise rate case—it was a quiet but telling addition. CFO Brian Buckham walked analysts through a new line in the quarterly reconciliation table: large contract customer revenue. “On our new line, revenues from our large contract customers increased operating income by $6.5 million for the quarter,” he noted. That line—and the $6.5 million—is the clearest evidence yet that the years of chasing Micron, Meta, and a pipeline of data centers and industrial loads is finally showing up in the P&L. “Industrial revenues, including large contracts, were up a staggering 17.0% compared with the second quarter of last year,” — Lisa A. Grow, President and Chief Executive Officer · 2026-07-30 CEO Lisa Grow added, calling out the ramp from projects that have been under construction for years. This is a genuine inflection. The prior quarter's call (April 2026) was still framed around negotiations and “ground preparations.” Now the revenue is real, and management is deliberately carving it out so investors can track it. It's a company-specific development—not sector boilerplate—and it explains why the company felt confident enough to raise the low end of full-year EPS guidance to $6.30–$6.45 and slash the expected use of large load revenues-supporting ADITC (additional investment tax credit) amortization from <$30 million to <$15 million.

The Resource Build: Batteries, Gas, and the Long Game

The revenue ramp is backed by a massive capital program. Lisa Grow highlighted that they recently brought 250 MW of new company-owned battery storage online, making it the fourth straight year of battery additions, and mentioned that Battery storage now totals over 550 MW. But she was clear that batteries alone aren't the answer: “It is not a great source for the winter,” she said, pointing to the need for dispatchable gas. Indeed, the company is building three natural gas plants (Bennett Mountain, South Hills, and Peregrine) with in-service dates through 2030, and the 2032 RFP shortlist is heavy on gas. On the transmission front, Boardman-to-Hemingway is 70% constructed, and SWIP-North recently broke ground. The gas projects and transmission build-out are the backbone of serving a load pipeline that management says is “multiple gigawatts” and now stretches well into the 2030s.

We did not report any additional tax credits under the Idaho earnings support mechanism in the second quarter. That was about $17 million less than what we recorded in the same quarter last year.
Brian R. Buckham, Chief Financial Officer · 2026-07-30

That quote from Brian Buckham underscores the financial strength: the lower ADITC usage is a direct result of higher underlying earnings, even as operating income rose 48% year-over-year. The company is now generating enough revenue to cover more of its costs without relying on the regulatory mechanism—a positive sign for credit quality and a potential precursor to fewer rate cases in the medium term.

Rate Case Timing and the ADITC Flexibility

Management continues to signal a likely June 2027 general rate case, but the calculus has shifted. Lisa Grow said on the call, “At this point, we are not really looking at a depreciation or interest tracker... the revenues of these large loads are helping to cover those costs.” This echoes the prior quarter's sentiment—“large load revenues—the timing of those coming in and the magnitude of those revenues—can both dictate timing of rate cases” — Brian R. Buckham, Unknown · 2026-04-30—but now the revenue is actually flowing. The company also has a $156 million ADITC balance available as a buffer, giving it flexibility on when to file. Brian Buckham explained the decision framework: they'll evaluate whether to use the ADITC mechanism or file a rate case depending on how large-load revenues land in 2028. That optionality is a meaningful shift from the more defensive posture of earlier calls. The market, however, hasn't rewarded the progress yet. The stock is down about 7% over the last 90 days from its July peak, a drawdown that likely reflects profit-taking after a strong run and broad utility weakness. But the fundamentals are improving: capital expenditure is running at a record pace—$372 million in the latest quarter, up 85% YoY—and the company is funding it with a balanced debt/equity approach, having executed $260 million of forward sales in Q2 and roughly $1 billion of the planned $2 billion equity content through 2027. “We now expect that Idaho Power will use less than $15 million of additional investment tax credit amortization in 2026” — John R. Wonderlich, Vice President and Chief Financial Officer · 2026-07-30—a stark contrast to the $40 million used in 2025.

Conclusion

IDACORP's second-quarter call marks the moment when its multi-year bet on large customers began to pay off quantitatively. The new disclosure line, the 17% industrial revenue surge, and the halved ADITC guidance all point to a company whose earnings quality is improving. The challenge now is execution: building the gas plants, completing the transmission lines, and managing the financing of a $1.3–$1.5 billion annual CapEx program without diluting shareholders. If the large load ramp continues, the 2027 rate case may be more about resetting rate base than plugging a hole—and that would be a positive for the equity story. As Lisa Grow said, “We have been providing updates on Micron's expansion and Meta's new data center for years. It is great to see this hard work come to fruition.”