Idacorp’s earnings fell during the second quarter due to lower demand from customers. However, continued customer growth and lower operating expenses buoyed the company’s quarterly earnings reported on Aug. 1.
The company, which wholly owns utility Idaho Power, reported second-quarter net income of $53.2 million, or $1.05 per diluted share, compared with $62.3 million, or $1.23 per diluted share, during the same period last year.
Through the first six months of 2019, the company posted net income of $95.8 million, or $1.90 per diluted share, compared with $98.4 million, or $1.95 per diluted share, for the first half of 2018.
“Continued customer growth of 2.5 percent and prudent management of operating expenses helped offset the impact of cool and wet weather across Idaho Power’s service area compared with last year’s second quarter,” Idacorp President and CEO Darrel Anderson said in a press release.
The sustained growth added $4.2 million to operating income in the quarter. That lessened the drop in revenue from overall usage per customer, which decreased operating income by $13.4 million. The decline came largely from lower irrigation sales, which fell due to above average rainfall. Revenue from irrigation customers during the quarter was $48,954, down from $65,065 during the second quarter in 2018.
Retail sales to residential and commercial customers also decreased. Most of that decline was offset by a $1.8 million increase in fixed cost adjustment revenue, which was nearly $7.6 million for the quarter. During the second quarter, Idaho Power recorded 3,409 MWh from retail energy sales and 1,042 MWh from wholesale.
Wheeling revenue declined by $2 million compared to the same quarter last year, largely due to an 11 percent reduction in Idaho Power’s open access transmission tariff FERC approved in October.
“Wheeling volumes remained relatively consistent with the levels we saw during last year’s second quarter,” Idaho Power CFO Steve Keen said during an Aug. 1 conference call with financial analysts.
In terms of power supply the utility generated 3,591 MWh in the quarter, most of it from hydropower. The supply exceeded the amount generated in Q2 2018 by 161 MWh, most of the increase came from hydroelectric generation, which at 3,032 MWh was up from last year’s 2,847 MWh.
Purchased power for the quarter was 1,195 MWh, 202 MWh less than during the same period in 2018. Most of those purchases—881 MWh—came from PURPA contracts.
The remaining 314 MWh from other sources in the quarter was less than the 496 MWh bought during the second quarter of 2018. The decrease in other-source purchases was largely due to higher regional energy costs; the average cost per megawatt-hour rose from $30.47 during last year’s second quarter to $38.72 this year, according to the company’s earnings report.
Idacorp raised its full-year guidance for 2019 by 5 cents to a range of $4.35 to $4.50 per diluted share. It also raised the floor for the full-year forecast for hydroelectric generation to 8 million MWh, but kept the ceiling at 9 million MWh.