Idacorp (IDA) Q3 2026 earnings review
Idacorp's industrial profit grows fast, while new shares slow per-share gains
Idacorp, the parent of electric utility Idaho Power, is turning new industrial power contracts into profit while issuing new shares to fund its grid expansion. Third-quarter net income rose 29%, driven by higher January base rates and a jump in revenue from large contract customers. Chief executive Lisa Grow raised the full-year profit per share outlook, though by our math the plan points to 69 cents in the fourth quarter, down 12% from a year ago.
| Net income | $160.2M +28.8% from a year ago |
|---|---|
| Profit per share | $2.73 +20.8% from a year ago (diluted shares +6.5%) |
| Large contract customer profit change | +$11.8M +$6.5M in Q2 (pre-tax operating income) |
| Full-year profit per share outlook | Raised to $6.40–6.50 middle of the range: +9.3% growth |
⚖️ Verdict: 🟢 Bullish
The story got better because the industrial power ramp accelerated enough for the utility to raise its profit plan while cutting its reliance on tax credits. Idaho Power booked zero additional tax credit support in the quarter and lowered its full-year tax credit ceiling to less than $10 million. One caution: a 7% rise in the share count absorbed a quarter of the net income growth, and maintenance costs forced a $10 million increase to the annual expense plan.
The question now is whether growing revenue from semiconductor and data center customers can keep outrunning the new shares and depreciation costs from the $7.35 billion build-out. Either the industrial ramp covers the costs as unfinished plants enter service, or dilution and depreciation force a 2027 rate case and hold back per-share growth. Fourth-quarter share settlements and the final 2032 power plant contracts at year-end will tell.
🐂 Bull Case
New Rates and Industrial Loads Lifted Profit
Idacorp, the parent of electric utility Idaho Power, is connecting semiconductor plants and data centers to its grid. President and chief executive Lisa Grow said results "were driven by continued customer growth and additional revenues from current base rates and from large contract customers as they continue to ramp-up operations". The company requires minimum demand commitments in these contracts so new industrial buyers pay for the grid upgrades they need.
That industrial ramp accelerated in the third quarter following the "commencement of Idaho Power earning revenue under a large customer contract on June 1, 2026". A full quarter of that contract, higher usage by large customers, and the January 2026 Idaho rate increase pushed Idaho Power's operating profit up by $32.9 million before tax.
- Large contract customers: added $11.8 million to Q3 operating profit, up from $6.5 million in Q2
- Standard retail rates per megawatt-hour: added $38.1 million to Q3 operating profit, up from $27.5 million in Q2
- New retail customers: added $5.8 million to Q3 operating profit on 15,000 additions over 12 months
The jump from $6.5 million to $11.8 million matters because it proves the contracted industrial load is turning into profit faster than the company's mid-year plan assumed. Because these revenues helped cover rising grid expenses, Idacorp raised its full-year profit outlook without filing a 2026 general rate case.
What to watch: the large contract customer profit line in the fourth quarter. A reading that stays near $12 million outside the summer peak will show that minimum billing rules, rather than warm weather, drive the industrial gain.
Higher Rates Removed the Need for Tax Credits
Under its state regulatory agreement, Idaho Power can draw down accumulated deferred investment tax credits (ADITC), a reserve of tax benefits that supports profit when utility earnings fall short. Last year the utility relied heavily on this reserve, using $40.3 million across the full year to reach its profit target.
In the third quarter Idaho Power booked zero additional ADITC amortization, compared with $2.5 million a year ago, leaving nine-month usage at $6.3 million against $39.0 million in the prior year. Because power sales and new base rates carried the quarter on their own, the utility now expects to use "less than $10 million of additional tax credits available under the Idaho regulatory mechanism in 2026", down from its prior $15 million ceiling.
What to watch: fourth-quarter tax credit usage in the full-year report. Finishing the year at $6.3 million would preserve the remaining tax credit reserve to buffer new power plant costs in 2027.
Preliminary 2027 Plan Raises Five-Year Sales Growth
Every two years Idaho Power files an Integrated Resource Plan (IRP), a long-term schedule of power demand and the generation projects needed to meet it. Ahead of the formal 2027 filing, the utility released its preliminary forecast in the presentation slides and published the final short list for its 2032 resource bidding process.
The preliminary 2027 plan lifts five-year annual retail sales growth to 8.9%, up from 8.3% in the 2025 plan and 5.5% in the 2023 version, while five-year peak demand growth steps up to 5.4% from 5.1%. On the supply side, the 2032 short list contains 11 projects totaling 1,830 megawatts of generation and market purchases plus 300 megawatts of storage, including three utility-owned natural gas plants totaling 1,029 megawatts by our math. The company noted that "Idaho Power is unlikely to contract with or construct all listed projects".
What to watch: signed contracts from the 2032 bidding list by year-end. Any utility-owned gas plant wins will add to the $7.35 billion five-year capital budget and expand the rate base.
🐻 Bear Case
New Shares Absorbed a Quarter of Profit Growth
Idacorp's five-year capital budget of $7.35 billion is nearly double the $4.05 billion of cash the utility expects its operations to generate between 2026 and 2030. To pay for the gap without overloading its balance sheet, management sells new common stock through at-the-market (ATM) stock programs and forward sale agreements, which are contracts to deliver shares for cash at a later date.
Those share deliveries accelerated between May and October. Idacorp settled forward contracts for $373 million of cash under its May 2025 offering, up from $262 million as of July, and locked in new forward contracts under its $600 million 2026 program.
- Net income: $160.2 million in Q3, up 28.8% from a year ago by our math
- Diluted share count: 58.7 million shares, up 6.5% from a year ago by our math
- Diluted profit per share: $2.73, up 20.8% from a year ago by our math
- Unsettled forward stock proceeds available: $873 million across three programs as of October 23 by our math
While management highlights the industrial profit ramp, the expanding share count took 8 percentage points off per-share profit growth this quarter. Because $187 million of the May 2025 forward contracts mature on November 9, 2026, and another $686 million of ATM forwards remain open through early 2028, per-share dilution will keep rising as construction bills come due.
What to watch: fourth-quarter diluted share count after the November 9 forward maturity. It will show how much of next year's rate and customer growth goes to new shares before 2027 begins.
Operating Costs Broke Through the Annual Plan
For three quarters Idacorp held its full-year operations and maintenance (O&M) expense plan at $525 million to $535 million, even as first-half spending ran $24.8 million above last year. At the same time, finished grid projects move into active service, which starts depreciation charges and stops construction financing credits.
In the third quarter, other O&M expenses jumped $22.5 million from a year ago, nearly double the $11.7 million increase in the second quarter, while depreciation and amortization rose $7.4 million on new plant in service. Idacorp said the O&M rise came from amortizing deferred costs for the "conversion of generating units at the Jim Bridger and North Valmy plants from coal to natural gas and higher wildfire mitigation costs". That forced a $10 million increase in the full-year O&M outlook to $535–545 million. Although regulatory rate riders offset most of the O&M jump, the $7.4 million depreciation increase has no automatic rider.
What to watch: whether Idaho Power files a notice for a 2027 Idaho general rate case. A filing will show that rising depreciation on new plants is outpacing revenue from new industrial customers.
Risks this quarter didn't answer
Five standing risks from prior quarters depend on details in the quarterly filing or conference call that do not appear in the earnings release or slides.
- Cash flow and credit buffers: the release omits the cash flow statement and Moody's cash-flow-to-debt ratio, which the quarterly filing will update.
- Unapproved battery and gas permits: certificates for the South Hills and Peregrine projects remain pending with Idaho regulators.
- Unsigned expansion contracts: the release gives no update on a power contract for Micron's second fab or standalone customer concentration.
- Wildfire investigation: the release notes higher wildfire mitigation spending but gives no legal update on the Mountain Home fire.
- Snake River water rights: the release trims the 2026 hydro forecast again but gives no cost estimate for the March 2027 Swan Falls water plan.
👓 Other Themes
Dry Weather and Rate Rules Moved the Bill
Warmer third-quarter weather lifted energy usage per irrigation customer by 3% and per residential customer by 1%, reversing a mild first half. Because higher residential use reduced fixed-cost adjustment (FCA) deferrals, a rate rule that smooths weather swings, FCA revenues fell $3.7 million. Meanwhile, dry river conditions prompted a third cut to the 2026 hydropower forecast, while Idaho property tax law changes lowered tax expense and helped lift other net operating profit by $10.6 million.
💲 Other KPIs
Customer count grew 2.2% over the past 12 months, adding about 15,000 customers to pass 670,000 in total. That edged down from the 2.3% pace recorded in each of the prior four quarters. Even with the slight dip, new residential and commercial meters added $5.8 million to third-quarter operating profit, up from $4.5 million last quarter.
Construction on the high-voltage Boardman-to-Hemingway transmission line moved from 400 completed towers at the end of June to 780 by the third quarter, reaching 60% completion by our math. Crews have finished about 1,200 of the 1,300 foundation pads and strung 100 miles of wire, keeping the line on track to enter service in late 2027.
Net non-operating expenses rose $1.1 million from a year ago in the third quarter and $5.7 million over the first nine months, after a $0.5 million increase in the second quarter. Higher long-term debt balances raised interest costs and lower cash balances reduced interest income, though financing credits on unfinished construction projects offset most of the third-quarter rise.
🔮 Guidance
Raised. The utility lifted the bottom of its full-year profit per share plan by 10 cents and the top by 5 cents, putting the middle of the range at $6.45, or 9.3% growth by our math. Because nine-month profit per share is already $5.76, the full-year midpoint leaves 69 cents for the fourth quarter by our math, down 11.5% from 78 cents a year ago under normal weather.
Cut. Idaho Power lowered the ceiling on additional investment tax credit usage by $5 million after recording zero in the second and third quarters. It is the second reduction this year, down from less than $30 million in the spring and $40.3 million used in 2025. With $6.3 million booked in the first quarter, the plan leaves less than $3.7 million for the fourth quarter by our math.
Raised. After holding the range flat for three quarters, the company added $10 million to its annual operations and maintenance cost plan. At the $540 million middle of the range, spending will rise 14.6% from $471.0 million in 2025 by our math, driven by the amortization of coal-to-gas plant conversion costs and wildfire mitigation programs that are mostly recovered through customer rates.
Unchanged. The capital spending plan excluding construction financing credits stays at $1.3 billion to $1.5 billion for a fourth straight quarter. At the $1.4 billion middle of the range, spending grows 29.3% from $1,083 million in 2025 by our math, matching the $1.42 billion annual average needed across the five-year grid expansion plan.
Cut. The utility trimmed another 0.5 million megawatt-hours off the top of its hydroelectric generation outlook. It is the third cut in three quarters, moving the middle of the range down from 6.5 million to 5.75 million megawatt-hours, or 17.9% below last year's 7.0 million by our math. Power cost adjustment rules pass most of the replacement power cost to customers.
❓ Key Questions
What was nine-month capital spending in the 10-Q?
The release holds the full-year capital budget at $1.3–1.5 billion but omits third-quarter cash capital spending. With $786 million spent in the first half, the nine-month figure will show whether construction is pushing the top of the annual range.
How much of the 1,029 MW gas short list wins?
The 2032 resource short list includes three utility-owned gas plants totaling 1,029 megawatts, and Idacorp expects final contracts by year-end. Any self-build wins will increase the $7.35 billion five-year capital plan and require more debt and stock issuance.
Why does the outlook imply a lower fourth quarter?
By our math, the raised full-year profit outlook leaves 69 cents per share for the fourth quarter, down from 78 cents a year ago. Management has not said how much of that drop comes from share dilution versus higher depreciation.
When will Idacorp settle the $686 million in ATM forwards?
After settling $373 million of 2025 forwards through October, Idacorp still holds $187 million due November 9 plus $686 million in 2024 and 2026 ATM forwards. The draw schedule will determine how fast the share count rises in 2027.