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Stepping Forward Entering a new era for energy. 2009 Annual Report $2.64 $2.51 $2.17 $1.86 IDACORP is stepping forward on $1.50 all fronts ensuring your company is positioned to succeed in a new era for energy. 2005 2006 2007 2008 2009 Earnings Per Share (Diluted) Current Annual Dividend $1.20 2009 Highlights Thousands of Dollars, Except Per Share Amounts 2009 2008 % Change 9.5% 8.9% 7.5% 6.8% Electric Utility Revenues $1,045,996 $956,076 9.4 6.2% Other Revenue $3,804 $4,338 <12.3> Total Operating Revenues $1,049,800 $960,414 9.3 Net Income $124,350 $98,414 26.4 Earnings Per Diluted Common Share $2.64 $2.17 21.7 2005 2006 2007 2008 2009 Dividends Paid Per Common Share $1.20 $1.20 -- Return on Total Assets $4,238,727 $4,022,845 5.4 Year-End Equity Number of Employees (full time) 1,994 2,073 <3.8> 36.4% 20.8% IDACORP, Inc.—Boise, Idaho-based and formed in 1998—is a holding 16.5% 16.1% 13.6% company comprised of Idaho Power Company, a regulated electric 10.7% utility; IDACORP Financial, a holder of affordable housing projects and other real estate investments; and Ida-West Energy, an operator of small hydroelectric generation projects that satisfy the requirements 2005 2006 2007 2008 2009 of the Public Utility Regulatory Policies Act of 1978. IDACORP’s origins -0.1% -5.6% -13.0% lie with Idaho Power and operations beginning in 1916. Today, Idaho Power employs 1,994 people to serve a 24,000 square-mile service area -25.9% in southern Idaho and eastern Oregon. With 17 low-cost hydroelectric Total Return projects as the core of its generation portfolio, Idaho Power’s 490,000 IDACORP residential, business and agricultural customers pay some of the nation’s lowest prices for electricity. To learn more about Idaho Power or EEI Electric Utilities Index IDACORP, Inc., visit www.idahopower.com or www.idacorpinc.com. 1 To Our Fellow Shareowners: 2009 was a year full of challenge and opportunity. IDACORP Financial and Ida-West Energy—who continue IDACORP’s commitment to our mission—to prosper by to do more with the same or fewer resources. Deliberate providing reliable, responsible, fair-priced energy services and diligent focus on controlling expenses and capital today and tomorrow—focused us in uncertain economic expenditures from our near-2,000 employees ensures times and resulted in a strong earnings year. As the nation prudent stewardship of your company. And our corporate looks to emerge from the economic crisis, IDACORP is values of integrity, safety and respect keep us focused positioned for another year of sustained performance in on the right way of operating your business. a time of change. We are entering a new era for energy. How electricity is produced, priced, delivered and In 2009, we continued to evaluate and refine our three-part consumed is changing. As we have in the past, IDACORP strategy—responsible planning, responsible development is stepping forward on all fronts, ensuring your company and protection of resources, and responsible energy use— and our customers are prepared for this transformation. to ensure coordination among and integration of all func- tional areas of the business. During 2009, our Board of Directors and leader- ship team guided us through difficult conditions. Powered in part by improved water conditions, IDACORP We are proud of our achievements, balancing the health experienced stronger earnings in 2009. Net income and financial strength of the business with sensitivity to was up, $124.4 million compared to $98.4 million in 2008. customers impacted by the downturn. Earnings per diluted share increased to $2.64 from $2.17 in 2008. Our positive financial performance demonstrates Our accomplishments are due to the exceptional efforts our resourcefulness and ability to successfully manage of the men and women of IDACORP—Idaho Power, uncertainties. Powered in part by improved water conditions, IDACORP experienced strong earnings in 2009. 2 Generation from our 17 hydroelectric plants totaled 8.1 million megawatt hours, up from 6.9 million megawatt hours in 2008. Under median water conditions, annual hydroelectric generation is approximately 8.5 million megawatt hours. And as a result of our regulatory initiatives, Idaho Power, IDACORP’s core business, is not as susceptible as it once was to the whims of Mother Nature, yet we still benefit from our hydroelectric base—a clean, green, low-cost resource. Our financial liquidity position is strong, with nearly $400 million available to fund our daily operations. Additionally, our credit ratings position us to access debt capital markets for infrastructure investments needed for future economic development. The growth prospects of our service area remain positive over the longer term, and we are making the investments necessary to support our communities. Public perception and environmental concerns are shifting how we produce electricity, with greater emphasis on renewable and clean sources. We also are exploring new ways of enhancing our existing resources. Putting more water into our rivers through cloud seeding and water leasing helps optimize our hydroelectric fleet. Creating efficiencies in how we deliver power continues to be a focus. New high-capacity transmission projects will increase reliability to customers, enable greater loads into the communities we serve and strengthen the regional grid. Idaho Power continues to collaborate with community mem- bers to site the Gateway West and Boardman to Hemingway 500-kilovolt transmission line projects, which will be a founda- tion for regional economic growth for the next half century. Idaho Power continues to adapt to changes in how customers consume electricity. Energy efficiency is our first resource to offset the need to build After a rewarding 2009, we are looking forward to greater strides in 2010. 3 new generation resources or purchase power from times. Our dedicated employees step forward each and wholesale markets—often at a premium. Our energy every day to ensure the success of your company. 2009 was efficiency and demand response programs give customers a rewarding year. We step forward with equal confidence options and control, and enable the company to better into 2010. manage loads during summer peaks. Pricing our product is an evolving science. Time-of-use rates, tiered rates and other dynamic pricing mechanisms are examples of how the business is changing. Idaho Power has been an industry leader with several of Jon Miller, Chairman of the Board our regulatory mechanisms, including the Fixed Cost Adjustment decoupling mechanism, the Power Cost Adjustment and our Energy Efficiency Rider. As we have in 2009, we continue to pursue innovative regulatory mechanisms that more accurately reflect program costs J. LaMont Keen, President & Chief Executive Officer and achieve timely cost recovery. Perhaps the chief regulatory successes of the year were the settlement agreements Idaho Power forged with Idaho and Oregon customer groups and regulators. These agreements enable us to recover costs that otherwise may have gone uncollected and better position us to earn our allowed rate of return for investors. Additionally, the Idaho Public Utilities Commission approved Idaho Power’s application for a Certificate of Public Convenience and Necessity, authorizing construction of the 300-megawatt Langley Gulch Power Plant. The order included advanced rate determinations of $397 million in project construction costs to be collected when the project achieves commercial operation. As we close out one decade and open another, our commitment to our vision—to be regarded as an exceptional utility—is unwavering. Our stability and success over the last two years of economic volatility demonstrates our ability to manage through uncertain Our commitment to our vision is unwavering. 4 Three-Part Strategy: Our Guide IDACORP’s business strategy emphasizes Idaho Power Responsible as IDACORP’s core business. In our 2008 annual report, Planning we provided an overview of this blueprint as a way to effectively ensure adequate energy supplies. As IDACORP continued to evaluate and refine its business approach, we looked to our three-part strategy to provide greater Responsible Development coordination and integration. The business strategy & Protection refinements balance the interests of owners, customers Responsible of Resources and employees while maintaining the company’s financial Energy Use stability and flexibility. Our three-part strategy ensures coordination with and integration among all functional areas of your company. IDACORP and 5 Idaho Power Officers (shown below—left to right) Darrel T. Anderson (14) Executive Vice President, Administrative RESPONSIBLE PLANNING: Idaho Power’s planning Services, and Chief Financial Officer process ensures appropriate generation and transmission resources to meet population growth and increasing Luci McDonald (5) Vice President, Human Resources electricity demand. This piece has been expanded to integrate regulatory strategy and financial planning, Jeffrey L. Malmen (2) meaningful public involvement and consideration of Vice President, Public Affairs regional economic development. Naomi Shankel (9) RESPONSIBLE DEVELOPMENT AND Vice President, Audit and Compliance PROTECTION OF RESOURCES: Our business strategy includes the development and protection of generation, Steven R. Keen (27) Vice President and Treasurer transmission, distribution and associated infrastructure, and the natural resources Idaho Power and our communities Vern Porter (20) depend upon. The strategy now includes specific consider- Vice President, Engineering and Operations* ation of workforce planning, development and retention. Lisa A. Grow (22) Senior Vice President, Power Supply* RESPONSIBLE ENERGY USE: IDACORP’s business strategy includes energy efficiency and demand response Dennis C. Gribble (31) programs, as well as sustainability initiatives related to public Vice President and Chief Information Officer carbon-emission intensity and reduction targets, and how we, as a company, look at our own operations. Daniel B. Minor (24) Executive Vice President, Operations* Ric Gale (26) Vice President, Regulatory Affairs* Lori D.