IDACORP INC

AND RESULTS OF OPERATIONS

In MD&A in this report, the general financial condition and results of operations for IDACORP and its subsidiaries and Idaho Power Company and its subsidiary are discussed. While reading this MD&A, please refer to the accompanying condensed consolidated financial statements of IDACORP and Idaho Power. Also refer to "Cautionary Note Regarding Forward-Looking Statements" in this report for important information regarding forward-looking statements made in this MD&A and elsewhere in this report. This discussion updates the MD&A included in the 2023 Annual Report, and should also be read in conjunction with the information in that report. The results of operations for an interim period generally will not be indicative of results for the full year, particularly in light of the seasonality of Idaho Power's sales volumes, as discussed below.

INTRODUCTION

IDACORP is a holding company formed in 1998 whose principal operating subsidiary is Idaho Power. IDACORP’s common stock is listed and trades on the New York Stock Exchange under the trading symbol "IDA". Idaho Power is an electric utility whose rates and other matters are regulated by the IPUC, OPUC, and FERC. Idaho Power generates revenues and cash flows primarily from the sale and distribution of electricity to customers in its Idaho and Oregon service areas, as well as from the wholesale sale and transmission of electricity. Idaho Power experiences its highest retail energy sales during the summer irrigation and cooling season, with a lower peak in the winter that generally results from heating demand.

Idaho Power is the parent of IERCo, a joint-owner of BCC, which mines and supplies coal to the Jim Bridger plant owned in part by Idaho Power. IDACORP’s other notable subsidiaries include IFS, an investor in affordable housing and other real estate tax credit investments, and Ida-West, an operator of small hydropower generation projects that satisfy the requirements of the PURPA.

EXECUTIVE OVERVIEW

Management's Outlook and Company Objectives

In the 2023 Annual Report, IDACORP's and Idaho Power's management included a summary of their business objectives for the companies for 2024 and beyond, under the heading "Executive Overview" in the MD&A. As of the date of this report, management's outlook and strategy remain consistent with that discussion, as updated by some of the discussion in this MD&A. Notable developments that have occurred since that report include the following:

•Idaho Power continues to focus on timely recovery of costs and earning a reasonable return on investment. On March 29, 2024, Idaho Power provided notice to the IPUC of its intent to file a limited issue rate case in Idaho on or after May 31, 2024.

•Idaho Power's customer count grew 2.5 percent during the twelve months ended March 31, 2024, and Idaho Power reached a new winter peak demand of 2,719 MW on January 16, 2024. The prior highest winter peak demand was 2,604 MW, reached in December 2022.

•To help meet peak capacity and energy needs in 2026 and beyond, in March 2024, Idaho Power entered into an energy and capacity market purchase agreement with an energy marketer for the right to acquire 200 MW on a daily basis during summer months beginning in 2026 for a term of at least five years, and requested approval of the agreement from the IPUC. Also, in April 2024, Idaho Power filed a request for a CPCN in its Idaho jurisdiction for the acquisition of 150 MW of new battery storage assets with an expected in-service date in 2026 and useful life of approximately 20 years. As of the date of this report, IPUC decisions regarding these requests are pending. To help address the additional capacity deficits projected for 2026 and 2027, Idaho Power continues to evaluate its RFP for additional resources.

•The company’s long-range planning process has identified a potential need in 2028 for a combination of energy and capacity resources that provide approximately 138 MW of peak capacity and up to 555 MW of energy resources. In February 2024, Idaho Power filed an application with the OPUC to approve an RFP to procure these resources and a request for the OPUC to partially waive certain competitive bidding rules.

Summary of Financial Results

The following is a summary of Idaho Power's net income, net income attributable to IDACORP, and IDACORP's earnings per diluted share for the three months ended March 31, 2024 and 2023 (in thousands, except earnings per share amounts):

The table below provides a reconciliation of net income attributable to IDACORP for the three months ended March 31, 2024, from the same period in 2023 (items are in millions and are before related income tax impact unless otherwise noted).

IDACORP's net income decreased $7.9 million for the first quarter of 2024 compared with the first quarter of 2023 due primarily to lower net income at Idaho Power. At Idaho Power, customer growth increased operating income by $4.7 million in the first quarter of 2024 compared with the first quarter of 2023, as the number of Idaho Power customers grew by approximately 15,800, or 2.5 percent, during the twelve months ended March 31, 2024. The benefit from customer growth was more than offset by a decrease in usage per retail customer of $9.1 million in the first quarter of 2024 compared with the first quarter of 2023. While all retail customer classes saw a reduction in usage per customer, usage per residential customer decreased most significantly, as more moderate temperatures led residential customers to use less energy for heating purposes.

The net increase in retail revenues per MWh, net of associated power supply costs, and power cost adjustment and FCA mechanisms, increased operating income by $4.5 million in the first quarter of 2024 compared with the first quarter of 2023. This was due primarily to an overall increase in Idaho base rates, effective January 1, 2024, per the terms of the 2023 Settlement Stipulation. For more information on the 2023 Settlement Stipulation, see Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report.

Transmission wheeling-related revenues, net of PCA impacts, decreased $2.8 million during the first quarter of 2024 compared with the first quarter of 2023. Total revenues earned during the first quarter of 2024 increased 12 percent compared with the first quarter of 2023 due primarily to an increase in wheeling volumes; however, effective January 1, 2024, financial settlement of transmission line losses are subject to the PCA mechanism, as approved in the 2023 Settlement Stipulation, resulting in a smaller contribution to net income compared with the first quarter of 2023.

Total other O&M expenses increased $13.8 million in the first quarter of 2024 compared with the first quarter of 2023, primarily related to approximately $4 million of increased pension-related expenses and approximately $8 million of increase in wildfire mitigation program and related insurance expenses. Both of these increases in expenses are partially offset by increases in retail revenues, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation; however, revenues related to these increased costs are not collected at the same rate that the expenses are incurred in the interim periods throughout the year. Inflationary pressures on labor-related costs also contributed to the increase in other O&M expenses. On a full-year basis for 2024, Idaho Power expects other O&M expenses related to its employee pension plans and its wildfire mitigation program and related insurance to increase approximately $18 million and $30 million, respectively, compared with 2023, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation.

Depreciation expense increased $8.6 million during the first quarter of 2024 compared to the first quarter of 2023, due primarily to an increase in plant-in-service.

Other changes in operating revenues and expenses, net, increased operating income by $5.9 million in the first quarter of 2024 compared with the first quarter of 2023 due primarily to a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's power cost adjustment mechanisms. More moderate wholesale natural gas and power market prices in the western United States and increased wholesale energy sales decreased Idaho Power's net power supply expenses in the first quarter of 2024 compared with the first quarter of 2023.

Non-operating expense, net, increased $1.8 million in the first quarter of 2024 compared with the first quarter of 2023. Interest expense on long-term debt was higher in the first quarter of 2024 compared with the first quarter of 2023, due primarily to an increase in long-term debt. This increase was partially offset by an increase in AFUDC, as the average construction work in progress balance was higher. Also, interest income increased due to higher interest rates and higher average cash and cash equivalent balances.

The decrease in income tax expense was principally the result of lower income before income taxes, as well as an increase in additional ADITC amortization. Based on Idaho Power's current expectations of full-year 2024 results, Idaho Power recorded $12.5 million of additional ADITC amortization under its Idaho regulatory settlement stipulation during the first quarter of 2024, but only recorded $3.75 million of additional ADITC amortization during the same period in 2023.

Overview of General Factors and Trends Affecting Results of Operations and Financial Condition

IDACORP's and Idaho Power's results of operations and financial condition are affected by a number of factors, and the impact of those factors is discussed in more detail below in this MD&A. To provide context for the discussion elsewhere in this report, some of the more notable factors are as follows:

•Regulation of Rates and Cost Recovery; Rate Case Filings: The prices that Idaho Power is authorized to charge for its electric and transmission service is a critical factor in determining IDACORP's and Idaho Power's results of operations and financial condition. Those rates are established by state regulatory commissions and the FERC and are intended to allow Idaho Power an opportunity to recover its expenses and earn a reasonable return on investment. Idaho Power is focused on timely recovery of its costs through filings with its regulators, working to put in place innovative regulatory mechanisms, and prudent management of expenses and investments. The 2023 Settlement Stipulation provides for the accelerated amortization of ADITC to help achieve a minimum 9.12 percent Idaho ROE. The 2023 Settlement Stipulation also provides for the potential sharing between Idaho Power and its Idaho customers of Idaho-jurisdictional earnings in excess of a 9.6 percent Idaho ROE. The specific terms of the 2023 Settlement Stipulation are described in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report.

To address the regulatory lag in recovery of costs primarily associated with Idaho Power’s current and anticipated significant infrastructure investments, including those that are intended to help meet projected near-term capacity deficits, Idaho Power plans to file a limited issue rate case in Idaho on or after May 31, 2024. Idaho Power expects the processing of a limited issue rate case in Idaho would span at least seven months before new rates would be in effect. In December 2023, Idaho Power made a general rate case filing in Oregon, which is described more fully in Note 3 - "Regulatory Matters" to the condensed consolidated financial statements included in this report. The outcome of the Oregon general rate case is pending. Idaho Power has reached a settlement in principle for the general rate case with the OPUC staff and other stakeholders. The settlement is not final and remains subject to completion of the related settlement stipulation, as well as approval by the OPUC.

•Rate Base Growth and Infrastructure Investment: The rates established by the IPUC, OPUC, and FERC are determined with the intent to provide an opportunity for Idaho Power to recover authorized operating expenses and depreciation and earn a reasonable return on “rate base.” Rate base is generally determined by reference to the original cost (net of accumulated depreciation) of utility plant in service and certain other assets, subject to various adjustments for deferred income taxes and other items. Over time, rate base is increased by additions to utility plant in service and reduced by depreciation of utility plant and write-offs as authorized by the IPUC and OPUC. Idaho Power is pursuing significant enhancements to its utility infrastructure in an effort to maintain system reliability, ensure an adequate supply of electricity, and provide service to new customers, including major ongoing transmission projects such as the B2H and GWW projects. Idaho Power's existing hydropower and thermal generation facilities also require continuing upgrades and equipment replacement, and the company is undertaking a significant relicensing effort for the HCC, its largest hydropower generation resource. Idaho Power intends to pursue timely inclusion of completed capital projects into rate base as part of future general rate cases or other appropriate regulatory proceedings.

Idaho Power expects its capital expenditures on infrastructure investments in the next five years or more will be considerable as it works to address projected energy and capacity deficits. For more information about forecasted capital expenditures and expected rate base growth, see the "Liquidity and Capital Resources" section of this MD&A.

•Economic Conditions and Loads: Economic conditions impact consumer demand for energy, revenues, collectability of accounts, the volume of wholesale energy sales, and the need to construct and improve infrastructure, purchase power, and implement programs to meet customer load demands. In recent years, Idaho Power has seen significant growth in the number of customers in its service area. Over the twelve months ended March 31, 2024, Idaho Power's customer count grew by 2.5 percent. While recessionary or volatile economic conditions could slow the rate of customer growth in the near-term, Idaho Power expects its number of customers and, to a greater extent its load due to anticipated commercial and industrial customer growth, to increase in the foreseeable future.

Idaho Power's 2023 IRP assumed a forecasted annual growth in retail MWh sales of 5.5 percent and a forecasted annual growth in peak-hour demand of 3.7 percent over the upcoming 5-year period. For more information on the 2023 IRP, refer to "Resource Planning" in Item 1 - "Business" of the 2023 Annual Report. Customer growth has contributed to increases in peak loads experienced in recent years. For example, Idaho Power's highest all-time winter peak demand of 2,719 MW occurred on January 16, 2024. Idaho Power believes that existing and sustained growth in customers, load, and peak demand for electricity, along with changes in the regional transmission markets that have constrained the availability of transmission outside Idaho Power’s service area to import energy during peak load periods, require Idaho Power to increase its investment in capacity resources, transmission, and distribution infrastructure. This includes the B2H and GWW transmission projects, along with other capacity, energy, and transmission resource procurements, as described in the "Liquidity and Capital Resources" in this MD&A.

•Weather Conditions: Weather and agricultural growing conditions have a significant impact on Idaho Power's energy sales. Relatively low winter and high summer temperatures result in greater energy use for heating and cooling, respectively. During the agricultural growing season, which in large part occurs during the second and third quarters of each year, irrigation customers use electricity to operate irrigation pumps, and weather conditions, such as a prolonged winter, can impact the timing and extent of use of those pumps. Idaho Power also has tiered rates and seasonal rates, which contribute to increased revenues during higher-load periods, most notably during the third quarter of each year when overall customer demand is highest. Much of the adverse or favorable impact of weather on sales of energy to residential and small commercial customers is mitigated through the FCA mechanism, which is described in Note 3 - "Regulatory Matters" to the condensed consolidated financial statements included in this report.

Further, as Idaho Power's hydropower facilities comprise over one-half of Idaho Power's nameplate generation capacity, precipitation levels impact the mix of Idaho Power's generation resources. When hydropower generation decreases, Idaho Power must rely on more expensive generation sources and purchased power. When favorable hydropower generating conditions exist for Idaho Power, they also may exist for other Pacific Northwest hydropower facility operators, lowering regional wholesale market prices and impacting the revenue Idaho Power receives from wholesale energy sales. Much of the adverse or favorable impact of this volatility is addressed through the Idaho and Oregon power cost adjustment mechanisms, which mitigate in large part the impact on earnings. For 2024, Idaho Power expects generation from its hydropower resources to be in the range of 6.5 million to 8.0 million MWh, compared with actual generation of 6.5 million MWh in 2023 and a 30-year average annual total of approximately 7.6 million MWh.

•Mitigation of Impact of Fuel and Purchased Power Expense: In addition to hydropower generation, Idaho Power relies significantly on natural gas and coal to fuel its generation facilities, long-term power purchase agreements (including PURPA agreements), and power purchases in the wholesale markets. Fuel costs are impacted by electricity sales volumes, the terms and conditions of contracts for fuel, Idaho Power's generation capacity, the availability of hydropower generation resources, transmission capacity, energy market prices, and Idaho Power's hedging program for managing fuel costs. Purchased power costs are impacted by the terms and conditions of contracts for purchased power, the rate of expansion of alternative energy generation sources such as wind or solar energy, generation resource maintenance outages, wholesale energy market prices, transmission availability, and the outcome of Idaho Power's hedging programs. The Idaho and Oregon power cost adjustment mechanisms mitigate in large part the potential adverse earnings impacts to Idaho Power of fluctuations in power supply costs. However, collection from customers or return to customers of most of the difference between actual power supply costs compared with those included in retail rates is deferred to a subsequent period, which can affect Idaho Power’s operating cash flow and liquidity until those costs are recovered from or returned to customers.

•Regulatory and Environmental Compliance Costs; Coal Plant Retirements: Idaho Power is subject to extensive federal and state laws, policies, and regulations, as well as regulatory actions and audits by agencies and quasi-governmental agencies, including the FERC, the North American Electric Reliability Corporation, and the Western Electricity Coordinating Council. Compliance with these requirements directly influences Idaho Power's operating environment and affects Idaho Power's operating costs. Moreover, environmental laws and regulations may increase the cost of constructing new facilities, may increase the cost of operating generation plants, may require that Idaho Power install additional pollution control devices at existing generating plants, may result in penalties for non-compliance, even where inadvertent, or may require that Idaho Power curtail or cease operating certain generation plants. Idaho Power expects to spend significant amounts on environmental compliance and controls for the foreseeable future. Due to economic factors in part associated with the costs of compliance with environmental regulation, Idaho Power accelerated the retirement date of its jointly-owned coal-fired generating plant in North Valmy, Nevada (North Valmy plant), ceasing coal-fired operations at one unit in 2019 and planning to cease its participation in coal-fired operations at the remaining unit by year-end 2025. Idaho Power's jointly-owned coal plant in Boardman, Oregon, ceased operations as planned in October 2020. In 2022, the IPUC approved Idaho Power's request to allow the coal-related assets at the Jim Bridger plant to be fully depreciated and recovered by end-of-year 2030. Idaho Power's 2023 IRP identified a preferred resource portfolio and action plan that includes the conversion from coal to natural gas of two units at the Jim Bridger plant in 2024, the two units at the North Valmy plant in 2026, and the remaining two units at the Jim Bridger plant in 2030. For more information on the 2023 IRP, refer to "Resource Planning" in Item 1 – "Business" of the 2023 Annual Report.

•Water Management and Relicensing of Hydropower Projects: Because of Idaho Power's reliance on stream flow in the Snake River and its tributaries, Idaho Power participates in numerous proceedings and venues that may affect its water rights, seeking to preserve the long-term availability of its rights for its hydropower projects. Also, Idaho Power is involved in renewing its long-term federal licenses for the HCC, its largest hydropower generation source, and for American Falls, its second largest hydropower generation source. Given the number of parties involved, Idaho Power's relicensing costs have been and are expected to continue to be substantial. As of the date of this report, Idaho Power cannot determine the ultimate terms of, and costs associated with, any resulting long-term licenses for the HCC or American Falls hydropower facilities.

•Wildfire Mitigation Efforts: In recent years, the western United States has experienced an increasing number of wildfires of unprecedented severity. A variety of factors have contributed to this trend including climate change, increased wildland-urban interfaces, historical land management practices, and overall wildland and forest health. While Idaho Power has not experienced to-date the extent of catastrophic wildfires within its service area that have occurred in California and elsewhere in the western United States, Idaho Power is taking a proactive approach to wildfire risk in its service area and transmission corridors. Idaho Power has adopted a WMP that outlines actions Idaho Power is taking or is working to implement to reduce wildfire risk and to strengthen the resiliency of its transmission and distribution system to wildfires. Idaho Power's approach to achieve these objectives includes identifying areas subject to elevated risk; system hardening programs, vegetation management, and field personnel practices to mitigate wildfire risk; incorporating current and forecasted weather and field conditions into operational practices; public safety power shutoff protocols; and evaluating the performance and effectiveness of the strategies identified in the WMP through metrics and monitoring. Idaho Power has a regulatory mechanism that allows the company to defer, for future amortization, the Idaho jurisdictional share of certain actual incremental O&M expenses necessary to implement the WMP. In January 2024, the OPUC authorized Idaho Power's request to defer the Oregon jurisdictional share of costs associated with the WMP for the 12-month period beginning December 29, 2022, and ending on December 28, 2023.

The WMP regulatory deferrals are described in more detail in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report.

RESULTS OF OPERATIONS

This section of MD&A takes a closer look at the significant factors that affected IDACORP’s and Idaho Power’s earnings during the three months ended March 31, 2024. In this analysis, the results for the three months ended March 31, 2024, are compared with the same period in 2023.

The table below presents Idaho Power’s energy sales and supply (in thousands of MWh) for the three months ended March 31, 2024 and 2023.

Weather-related information for Boise, Idaho, for the three months ended March 31, 2024 and 2023, is presented in the table below. While Boise, Idaho weather conditions are not necessarily representative of weather conditions throughout Idaho Power's service area, the greater Boise area has the majority of Idaho Power's customers and is included for illustrative purposes.

(1) Heating and cooling degree-days are common measures used in the utility industry to analyze the demand for electricity and indicate when a customer would use electricity for heating and cooling. A degree-day measures how much the average daily temperature varies from 65 degrees. Each degree of temperature above 65 degrees is counted as one cooling degree-day, and each degree of temperature below 65 degrees is counted as one heating degree-day.

(2) Normal heating degree-days and cooling degree-days elements are, by convention, the arithmetic mean of the elements computed over 30 consecutive years. The normal amounts are the sum of the monthly normal amounts. These normal amounts are computed by the National Oceanic and Atmospheric Administration.

Sales Volume and Generation: Retail sales volumes decreased 2 percent in the first quarter of 2024 compared with the same period in 2023, primarily due to more moderate temperatures, which reduced the amount of energy per customer used for heating. The decrease in usage per customer was partially offset by customer growth, as the number of Idaho Power's customers grew by 2.5 percent over the prior twelve months.

Total system generation increased 24 percent for the first quarter of 2024 compared with the same period in 2023, primarily related to an increase in hydropower generation, coal generation, and natural gas generation. For more information on the changes in generation, see the "Operating Expenses" section below in this MD&A. The financial impacts of fluctuations in wholesale energy sales, purchased power, fuel expense, and other power supply-related expenses are addressed in Idaho

Power's Idaho and Oregon power cost adjustment mechanisms, which are described below in "Power Cost Adjustment Mechanisms."

Operating Revenues

Retail Revenues: The table below presents Idaho Power’s retail revenues (in thousands) and MWh sales volumes (in thousands) for the three months ended March 31, 2024 and 2023, and the number of customers as of March 31, 2024 and 2023.

(1) The FCA mechanism is an alternative revenue program and does not represent revenue from contracts with customers.

(2) The IPUC allows Idaho Power to recover a portion of the AFUDC on construction work in progress related to the HCC relicensing process, even though the relicensing process is not yet complete and the costs have not been moved to electric plant in service. Idaho Power is collecting approximately $8.8 million annually in the Idaho jurisdiction but is deferring revenue recognition of the amounts collected until the license is issued and the accumulated license costs approved for recovery are placed in service.

Changes in rates, changes in customer demand, customer growth, and changes in FCA mechanism revenues are the primary reasons for fluctuations in retail revenues from period to period. The primary influences on customer demand of electricity are weather, economic conditions, and energy efficiency. Extreme temperatures increase sales to customers who use electricity for cooling and heating, while moderate temperatures decrease sales. Precipitation levels and the timing of precipitation during the agricultural growing season also affect sales to customers who use electricity to operate irrigation pumps. Rates are also seasonally adjusted, providing for higher rates during peak load periods, and residential customer rates are tiered, providing for higher rates based on higher levels of usage. The seasonal and tiered rate structures contribute to seasonal fluctuations in revenues and earnings.

Retail revenues increased $12.4 million during the first quarter of 2024 compared with the same period in 2023. The factors affecting retail revenues during the period are discussed below.

•Rates: Average customer rates, excluding amounts related to the power cost adjustment and FCA mechanisms, increased retail revenues by $14.4 million for the first quarter of 2024 compared with the same period in 2023, due primarily to the January 1, 2024, rate increase for Idaho Power's retail customers related to the 2023 Settlement Stipulation. Customer rates also include the collection from customers of amounts related to the power cost adjustment mechanisms, which increased revenues by $15.6 million in the first quarter of 2024 compared with the same period of 2023. The amount collected from customers in rates under the power cost adjustment mechanisms has relatively little effect on operating income as a corresponding amount is recorded as expense in the same period it is collected through rates. FCA revenue accrued in the first quarter of 2024 decreased by $9.9 million compared with the same period in 2023, as the 2023 Settlement Stipulation moved a greater portion of recovery of fixed costs into customer base rates.

•Customers: Customer growth of 2.5 percent during the twelve months ended March 31, 2024, increased retail revenues by $8.8 million in the first quarter of 2024 compared with the same period of 2023.

•Usage: Lower usage (on a per customer basis), in all customer classes, decreased retail revenues by $16.5 million in the first quarter of 2024 compared with the same period of 2023. Milder temperatures during the first quarter of 2024 led residential customers to use less energy per customer for heating.

Wholesale Energy Sales: Wholesale energy sales consist primarily of long-term sales contracts, opportunistic sales of surplus system energy, and sales into the energy imbalance market in the western United States, and do not include derivative transactions. The table below presents Idaho Power’s wholesale energy sales for the three months ended March 31, 2024 and 2023 (in thousands, except for revenue per MWh amounts).

In the first quarter of 2024, wholesale energy revenues increased $7.9 million compared with the same period of 2023, as higher wholesale energy sales volumes were partially offset by lower wholesale market prices. Wholesale energy prices were lower during the first quarter of 2024 compared with 2023 as more moderate winter weather resulted in lower demand and lower natural gas fuel costs in the wholesale markets in the region. The financial impacts of fluctuations in wholesale energy sales are largely mitigated by Idaho Power's Idaho and Oregon power cost adjustment mechanisms, which are described below in this section of the MD&A under "Power Cost Adjustment Mechanisms."

Transmission Wheeling-Related Revenues: Transmission wheeling-related revenues increased $2.6 million, or 12 percent, during the first quarter of 2024 compared with the first quarter of 2023, primarily due to increased wheeling volumes. Effective January 1, 2024, financial settlement of transmission line losses are subject to the PCA mechanism, as approved in the 2023 Settlement Stipulation.

Operating Expenses

Purchased Power: The table below presents Idaho Power’s purchased power expenses and volumes for the three months ended March 31, 2024 and 2023 (in thousands, except for per MWh amounts).

Purchased power expense decreased $59.2 million during the first quarter of 2024 compared with the same period of 2023, primarily due to a 27 percent decrease in average cost per MWh driven by lower wholesale energy prices in the western United States. An increase in hydropower generation, natural gas generation, and coal generation during the first quarter of 2024 led to a 10 percent decrease in energy purchased from wholesale markets to help meet customer demand.

Fuel Expense: The table below presents Idaho Power’s fuel expenses and thermal generation for the three months ended March 31, 2024 and 2023 (in thousands, except for per MWh amounts).

The majority of the fuel for Idaho Power’s jointly-owned coal-fired plants is purchased through long-term contracts, including purchases from BCC, a one-third owned investment of IERCo. The price of coal from BCC is subject to fluctuations in mine operating expenses, geologic conditions, and production levels. BCC supplies the majority of the coal used by the Jim Bridger plant and BCC does not have significant sales to third parties. Natural gas is mainly purchased on the regional wholesale spot market at published index prices. In addition to commodity (variable) costs, both natural gas and coal expenses include costs that are more fixed in nature for items such as capacity charges, transportation, and fuel handling. Period to period variances in fuel expense per MWh are noticeably impacted by these fixed charges when generation output is substantially different between the periods.

Fuel expense increased $3.2 million, or 4 percent, in the first quarter of 2024 compared with the first quarter of 2023, primarily due to increases of 21 percent and 19 percent in coal and natural gas generation, respectively, and an increase in the average cost per MWh of coal generation. These increases were partially offset by a 25 percent decrease in the average costs per MWh of natural gas generation.

Included in fuel expense are losses and gains on settled financial gas hedges entered into in accordance with Idaho Power's energy risk management policy. For the first quarter of 2024, losses on financial gas hedges of $24.1 million increased natural gas fuel expense, while in the first quarter of 2023, gains on financial gas hedges of $23.5 million reduced natural gas fuel expense. Most of these realized hedging losses and gains are passed on to customers through the power cost adjustment mechanisms described below.

Power Cost Adjustment Mechanisms: Idaho Power's power supply costs (primarily purchased power and fuel expense, less wholesale energy sales) can vary significantly from year to year. Volatility of power supply costs arises from factors such as weather conditions, wholesale market prices, volumes of power purchased and sold in the wholesale markets, Idaho Power's hydropower and thermal generation volumes and fuel costs, generation plant availability, and retail loads. To address the volatility of power supply costs, Idaho Power's power cost adjustment mechanisms in the Idaho and Oregon jurisdictions allow Idaho Power to recover from customers, or refund to customers, most of the fluctuations in power supply costs. In the Idaho jurisdiction, the PCA includes a cost or benefit sharing ratio that allocates the deviations in net power supply expenses between customers (95 percent) and Idaho Power (5 percent), with the exception of PURPA power purchases and demand response program incentives, which are allocated 100 percent to customers. The Idaho deferral period, or PCA year, runs from April 1 through March 31. Amounts deferred during the PCA year are primarily recovered or refunded during the subsequent June 1 through May 31 period. However, the IPUC directed Idaho Power to spread recovery of the March 31, 2023, PCA deferral balance over a two-year period from June 1, 2023, to May 31, 2025. Because of the power cost adjustment mechanisms, the primary financial impact of power supply cost variations is that cash is paid out but recovery from customers does not occur until a future period, or cash that is collected is refunded to customers in a future period, resulting in fluctuations in operating cash flows from year to year.

The table that follows presents the components of the Idaho and Oregon power cost adjustment mechanisms for the three months ended March 31, 2024 and 2023 (in thousands).

The power supply accruals (deferrals) represent the portion of the power supply cost fluctuations accrued (deferred) under the power cost adjustment mechanisms. When actual power supply costs are lower than the amount forecasted in power cost adjustment rates, most of the difference is accrued as an increase to a regulatory liability or decrease to a regulatory asset. When actual power supply costs are higher than the amount forecasted in power cost adjustment rates, most of the difference is deferred as an increase to a regulatory asset or decrease to a regulatory liability. During the first quarter of 2024, purchased power costs led to lower actual power supply costs compared with the forecasted amount, which resulted in an accrual of power supply costs by the mechanism. The amortization of the prior year’s balances represents the offset to the amounts being collected or refunded in the current power cost adjustment year that were deferred or accrued in the prior PCA year (the balancing adjustment component of the power cost adjustment mechanism).

Other O&M Expenses: Total other O&M expenses increased $13.8 million in the first quarter of 2024 compared with the first quarter of 2023, primarily related to approximately $4 million of increased pension-related expenses and approximately $8 million of increased wildfire mitigation program and related insurance expenses. Both of these increases in expenses are partially offset by increases in retail revenues, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation; however, revenues related to these increased costs are not collected at the same rate that the expenses are incurred in the interim periods throughout the year. Inflationary pressures on labor-related costs also contributed to the increase in other O&M expenses.

Income Taxes

IDACORP's and Idaho Power's income tax expense decreased $12.6 million for the three months ended March 31, 2024, when compared with the same period in 2023, primarily due to lower pre-tax income and increased ADITC amortization from the regulatory mechanism described in Note 3 – “Regulatory Matters” to the condensed consolidated financial statements included in this report. For information relating to IDACORP's and Idaho Power's computation of income tax expense, see Note 2 - "Income Taxes" to the condensed consolidated financial statements included in this report.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Idaho Power funds its liquidity needs for capital expenditures through cash flows from operations, debt offerings, commercial paper markets, credit facilities, and capital contributions from IDACORP. Idaho Power periodically files for rate adjustments for recovery of operating costs and capital investments to provide the opportunity to align Idaho Power's earned returns with those allowed by regulators.

As of April 26, 2024, IDACORP's and Idaho Power's access to debt, equity, and credit arrangements included:

•their respective $100 million and $400 million revolving credit facilities;

•IDACORP's shelf registration statement filed with the SEC on May 16, 2022, which may be used for the issuance of debt securities and common stock;

•Idaho Power's shelf registration statement filed with the SEC on May 16, 2022, which may be used for the issuance of first mortgage bonds and other debt securities; $1.2 billion remains available for issuance pursuant to state regulatory authority;

•IDACORP's and Idaho Power's issuance of commercial paper, with program sizes of $100 million and $300 million, respectively. Idaho Power's commercial paper program may be increased up to the $400 million capacity of its credit facility; and

•IDACORP's FSAs, which may be physically settled with common stock in exchange for net proceeds, which as of April 26, 2024, would have been approximately $293 million.

IDACORP and Idaho Power monitor capital markets with a view toward favorable debt and equity transactions, taking into account current and potential future long-term needs. As a result, IDACORP may issue debt securities or common stock, and Idaho Power may issue first mortgage bonds or other debt securities, if the companies believe terms available in the capital markets are favorable and that issuances would be financially prudent. Idaho Power also periodically analyzes whether partial or full early redemption of one or more existing outstanding series of first mortgage bonds is desirable, and in some cases, may refinance indebtedness with new indebtedness. In January 2024, IDACORP began using original issuances of shares for the IDACORP, Inc. Dividend Reinvestment and Stock Purchase Plan and also intends to use original issuances for share purchases within the Idaho Power Company Employee Savings Plan beginning in the second half of 2024. IDACORP may discontinue using original issuances of shares for these plans at any time.

Based on planned capital expenditures and other O&M expenses, the companies believe they will be able to meet capital and debt service requirements and fund corporate expenses during at least the next twelve months and thereafter for the foreseeable future with a combination of existing cash, operating cash flows generated by Idaho Power's utility business, availability under existing credit facilities, access to commercial paper, short-term, and long-term debt markets, and equity issuances.

IDACORP and Idaho Power generally seek to maintain capital structures of approximately 50 percent debt and 50 percent equity. Maintaining this ratio influences IDACORP's and Idaho Power's debt and equity issuance decisions. As of March 31, 2024, IDACORP's and Idaho Power's capital structures, as calculated for purposes of applicable debt covenants, were as follows:

IDACORP and Idaho Power generally maintain their cash and cash equivalents in highly liquid investments, such as U.S. Treasury Bills, money market funds, and bank deposits.

At March 31, 2024, IDACORP and Idaho Power believed they were in compliance with all credit facility and long-term debt covenants. Further, IDACORP and Idaho Power do not anticipate they will be in violation or breach of their respective debt covenants during 2024.

Operating Cash Flows

IDACORP's and Idaho Power's principal sources of cash flows from operations are Idaho Power's sales of electricity and transmission capacity. Significant uses of cash flows from operations include the purchase of fuel and power, other operating expenses, interest, income taxes, and plan contributions. Operating cash flows can be significantly influenced by factors such as weather conditions, rates and the outcome of regulatory proceedings, and economic conditions. As fuel and purchased power are significant uses of cash, Idaho Power has regulatory mechanisms in place that provide for the deferral and recovery of the majority of the fluctuation in those costs. However, if actual costs rise above the level currently allowed in retail rates, deferral balances increase (reflected as a regulatory asset), negatively affecting operating cash flows until such time as those costs, with interest, are recovered from customers.

IDACORP’s and Idaho Power’s operating cash inflows for the three months ended March 31, 2024, were $110 million and $107 million, respectively, an increase in cash flows from operations of $200 million for IDACORP and Idaho Power, when compared with the same period in 2023. With the exception of cash flows related to income taxes, IDACORP's operating cash flows are principally derived from the operating cash flows from Idaho Power. Significant items that affected the companies' operating cash flows in the first three months of 2024 when compared with the same period in 2023 were as follows:

•an $8 million decrease in IDACORP and Idaho Power net income, respectively;

•changes in regulatory assets and liabilities, mostly related to the relative amounts of costs deferred and collected under the PCA, FCA, and energy efficiency program cost mechanisms, increased operating cash flows by $89 million; and

•changes in working capital balances due primarily to timing, including fluctuations as follows:

◦the timing of collections of accounts receivable and unbilled revenues increased operating cash flows by $44 million and $45 million for IDACORP and Idaho Power, respectively;

◦the changes in accounts and wages payable increased operating cash flows by $50 million for IDACORP and Idaho Power, which was primarily due to a decrease in power supply costs and associated timing of payments; and

◦the changes in other assets and liabilities increased operating cash flows by $27 million for IDACORP and Idaho Power, which was primarily related to performance assurance collateral activity for margin agreements relating to wholesale commodity contracts.

Investing Cash Flows

Investing activities consist primarily of capital expenditures related to new construction of, and improvements to, Idaho Power’s power supply, transmission, and distribution facilities. IDACORP’s and Idaho Power’s net investing cash outflows for the three months ended March 31, 2024, increased to $235 million and $234 million, respectively, decreasing cash $126 million for IDACORP and $125 million for Idaho Power, when compared with the same period in 2023. Investing cash outflows for 2024 and 2023 were primarily for construction of utility infrastructure needed to address Idaho Power’s customer growth and peak resource needs, aging plant and equipment, and environmental and regulatory compliance requirements. This was partially offset in 2024 and 2023 by reimbursements from a B2H project joint permitting participant relating to a portion of the permitting expenditures.

Financing Cash Flows

Financing activities primarily provide supplemental cash for both day-to-day operations and capital requirements, as needed. IDACORP's and Idaho Power's net financing cash outflows for the three months ended March 31, 2024, were $45 million and $43 million, respectively, a decrease of $425 million for IDACORP and $466 million for Idaho Power, when compared with the same period in 2023. IDACORP and Idaho Power financing cash outflows for 2024 and 2023 were primarily related to dividend payments. This was offset in 2023 by Idaho Power's net proceeds from issuances and repayment of long-term debt. Idaho Power funds liquidity needs for capital investment, working capital, managing commodity price risk, dividends, and other financial commitments through cash flows from operations, debt offerings, commercial paper markets, credit facilities, and capital contributions from IDACORP. IDACORP funds its cash requirements, such as payment of taxes, payment of dividends, capital contributions to Idaho Power, and non-utility expenses allocated to IDACORP, through cash flows from operations, commercial paper markets, credit facilities, and sales of common stock.

Available Short-Term Borrowing Liquidity

The table below outlines available short-term borrowing liquidity as of the dates specified (in thousands).

(1) American Falls bonds that Idaho Power could be required to purchase prior to maturity under the optional or mandatory purchase provisions of the bonds, if the remarketing agent for the bonds were unable to sell the bonds to third parties.

(2) Holding company only.

On April 26, 2024, IDACORP had no loans outstanding under its revolving credit facility and no commercial paper outstanding, and Idaho Power had no loans outstanding under its revolving credit facilities and $10 million of commercial paper outstanding.

Impact of Credit Ratings on Liquidity and Collateral Obligations

IDACORP’s and Idaho Power’s access to capital markets, including the commercial paper market, and their respective financing costs in those markets, depend in part on their respective credit ratings. There have been no changes to IDACORP's or Idaho Power's ratings by Standard & Poor’s Ratings Services or Moody’s from those included in the 2023 Annual Report. However, any rating can be revised upward or downward or withdrawn at any time by a rating agency if it decides that the circumstances warrant the change. In April 2024, Moody's rating outlook for IDACORP and Idaho Power was modified to negative, from stable. As of the date of this report, Idaho Power's and IDACORP's issuer credit ratings at Moody's were Baa1 and Baa2, respectively. Moody's credit ratings of Baa3 and above are widely considered to be investment grade, or prime, ratings. These security ratings reflect the views of Moody's. An explanation of the significance of these ratings may be obtained from Moody's. Such ratings are not a recommendation to buy, sell, or hold securities.

Idaho Power maintains margin agreements relating to its wholesale commodity contracts that allow performance assurance collateral to be requested of and/or posted with certain counterparties, which are discussed further in Part I - Item 3 "Quantitative and Qualitative Disclosures About Market Risk" included in this report.

Capital Requirements

Idaho Power's cash capital expenditures, excluding AFUDC, were $254 million during the three months ended March 31, 2024. The table below presents Idaho Power's estimated accrual-basis additions to property, plant, and equipment for 2024 (including amounts incurred to-date) through 2028 (in millions of dollars). The amounts in the table exclude AFUDC but include net costs of removing assets from service that Idaho Power expects would be eligible to be included in rate base in future rate case proceedings. Given the uncertainty associated with the timing of infrastructure projects and associated expenditures, actual expenditures and their timing could deviate substantially from those set forth in the table. The timing and amount of actual constructed projects and capital expenditures could be affected by Idaho Power’s ability to timely obtain labor or materials at reasonable costs, supply chain disruptions and delays, project timing, permitting, regulatory determinations, inflationary pressures, macroeconomic conditions, or other issues, including those described below.

Major Infrastructure Projects: Idaho Power is engaged in the development of a number of significant projects and has entered into arrangements with third parties concerning joint infrastructure development. The discussion below provides a summary of developments in certain of those projects since the discussion of these matters included in Part II, Item 7 - MD&A - "Capital Requirements" in the 2023 Annual Report. The discussion below should be read in conjunction with that report.

Resource Additions to Address Projected Energy and Capacity Deficits: As noted previously, Idaho Power's existing and sustained growth in customers, load, and peak demand for electricity, along with transmission constraints, has created the need for Idaho Power to acquire significant generation, transmission, and storage resources to meet energy and capacity needs over the next several years.

To help meet peak needs in 2024 through 2027, Idaho Power entered into:

•contracts or plans to purchase, own, and operate 323 MW of battery storage assets with expected useful lives of approximately 20 years;

•a 20-year agreement to purchase the storage capacity from a 150 MW battery storage facility;

•an energy and capacity market purchase agreement with an energy marketer for the right to acquire 200 MW on a daily basis during summer months beginning in 2026 for a term of at least five years; and

•three power purchase agreements for the combined 425 MW output of planned third-party solar facilities with 20- to 25-year terms. Idaho Power plans to sell the output of two of these solar power purchase agreements totaling 325 MW exclusively to a large industrial customer pursuant to an agreement under Idaho Power’s Clean Energy Your Way program.

The capital requirements table above includes capital expenditures of more than $380 million from 2024 through 2026 for resource additions to address projected energy and capacity deficits in those years. To help address the additional capacity deficits projected for 2026 and 2027, Idaho Power continues to evaluate its RFP for additional resources. Depending on factors such as RFP results, the timing of project in-service dates, estimated load and resource balances and customer growth, the nature and quantity of resources owned versus acquired under power purchase agreements or similar agreements, and the outcome of regulatory proceedings, actual expenditures and their timing could deviate substantially from Idaho Power's expected expenditures.

Boardman-to-Hemingway Transmission Line: The B2H line, a planned 300-mile, high-voltage transmission project between a substation near Boardman, Oregon, and the Hemingway substation near Boise, Idaho, is expected to provide transmission service to meet future resource needs. Material procurement and construction subcontract bid events are in progress. As a result of delays in issuing notices to proceed from state and federal agencies and obtaining right-of-way easements, Idaho Power expects construction will begin no sooner than late 2024. Given those delays and the construction period, Idaho Power expects the in-service date for the transmission line will be no earlier than 2027.

As more fully described in the 2023 Annual Report, Idaho Power's ownership interest in the project is approximately 45 percent. Idaho Power has spent approximately $268 million, including Idaho Power's AFUDC, on the B2H project through March 31, 2024. Pursuant to the terms of the joint funding arrangements, Idaho Power has received $145 million in reimbursement as of March 31, 2024, from project co-participants for their share of costs and continues to receive reimbursement as costs are incurred. PacifiCorp is obligated to reimburse Idaho Power for its share of any future project permitting expenditures or agreed upon early construction expenditures incurred by Idaho Power under the terms of the joint funding agreement. Idaho Power and PacifiCorp operate under a construction funding agreement filed with the FERC.

The permitting phase of the B2H project was subject to federal review and approval by various federal agencies. Federal agency records of decision have been received and all lawsuits challenging the federal rights-of-way have been resolved. However, Idaho Power has not yet received the required notices to proceed from the applicable federal agencies.

In the separate State of Oregon permitting process, the state's Energy Facility Siting Council (EFSC) approved Idaho Power's site certificate in September 2022. The Oregon Department of Energy subsequently issued a final order and site certificate. Idaho Power is pursuing two amendments to the site certificate to accommodate route changes and enhance constructability. In September 2023, EFSC approved Idaho Power's first amendment request. One party in Union County Circuit Court contested the EFSC's approval of the first amendment, which Idaho Power is seeking to dismiss. The Oregon Department of Energy issued its Draft Proposed Order in April 2024 recommending approval of the second amendment. Finally, during the second quarter of 2023, the IPUC, OPUC, and WPSC granted Idaho Power and PacifiCorp their respective CPCNs related to the construction of the B2H project.

Total cost estimates for the project are between $1.5 billion and $1.7 billion, including Idaho Power's AFUDC. The capital requirements table above includes approximately $550 million of Idaho Power's share of estimated costs (excluding AFUDC) related to the remaining permitting phase, design, material procurement, and construction phases of the project. Actual construction costs could differ from Idaho Power's estimates based upon Idaho Power's or its contractors' ability to timely obtain labor or materials at reasonable costs, supply chain disruptions and delays, inflationary pressures, macroeconomic conditions, or other issues.

Gateway West Transmission Line: Idaho Power and PacifiCorp are pursuing the joint development of the GWW project, a high-voltage transmission lines project between a substation located near Douglas, Wyoming, and the Hemingway substation located near Boise, Idaho. In 2012, Idaho Power and PacifiCorp entered into a joint funding agreement for permitting of the project. Idaho Power has expended approximately $61 million, including Idaho Power's AFUDC, for its share of the permitting phase of the project through March 31, 2024. As of the date of this report, Idaho Power estimates the total cost for its share of the project (including both permitting and construction) to be between $900 million and $1.1 billion, including Idaho Power's AFUDC. The estimated cost range is based on assumptions about Idaho Power participation levels in the construction of certain project segments and any changes in those assumptions or in Idaho Power's actual participation could affect future estimates and actual project costs. The capital requirements table above includes approximately $300 million of Idaho Power's share of estimated costs (excluding AFUDC) for the permitting phase of the project and early construction costs, based on Idaho Power's current estimate that it may commence construction of applicable segments during that time period. Actual construction costs could differ from Idaho Power's estimates based upon the ability of Idaho Power, PacifiCorp, or their respective contractors to timely obtain labor or materials at reasonable costs, supply chain disruptions and delays, inflationary pressures, macroeconomic conditions, or other issues.

The permitting phase of the GWW project was subject to review and approval of the Bureau of Land Management (BLM). The BLM has published its records of decision for all segments of the transmission line. In late 2020, PacifiCorp completed construction and commissioned a 140-mile segment of its portion of the project in Wyoming. In March 2023, PacifiCorp initiated the pre-construction phase of 620 miles of 500-kV transmission line from the Populus substation near Downey, Idaho, to the Hemingway substation near Boise, Idaho. Idaho Power and PacifiCorp continue to coordinate the timing of next steps to best meet customer and system needs including potentially modifying the ownership structure of a few segments of the project.

Defined Benefit Pension Plan Contributions

Idaho Power has no minimum contribution requirement to its defined benefit pension plan in 2024 and during the three months ended March 31, 2024, Idaho Power made no contributions. Idaho Power is considering contributing up to $30 million to its pension plan during 2024 in a continued effort to balance the regulatory collection of these expenditures with the amount and timing of contributions and to mitigate the cost of being in an underfunded position. The primary impact of pension contributions is on the timing of cash flows, as the timing of cost recovery lags behind contributions.

Contractual Obligations

IDACORP’s and Idaho Power’s contractual cash obligations have not materially changed during the three months ended March 31, 2024, except as disclosed in Note 5 – “Long-Term Debt” and Note 8 – “Commitments” to the condensed consolidated financial statements included in this report.

Dividends

The amount and timing of dividends paid on IDACORP’s common stock are within the discretion of IDACORP’s board of directors. IDACORP's board of directors reviews the dividend rate periodically to determine its appropriateness in light of IDACORP’s current and long-term financial position and results of operations, capital requirements, rating agency considerations, contractual and regulatory restrictions, legislative and regulatory developments affecting the electric utility industry in general and Idaho Power in particular, competitive conditions, and any other factors the board of directors deems relevant. The ability of IDACORP to pay dividends on its common stock is generally dependent upon dividends paid to it by its subsidiaries, primarily Idaho Power.

For additional information relating to IDACORP and Idaho Power dividends, including restrictions on IDACORP’s and Idaho Power’s payment of dividends, see Note 6 - “Common Stock” to the condensed consolidated financial statements included in this report.

Off-Balance Sheet Arrangements

IDACORP's and Idaho Power's off-balance sheet arrangements have not changed materially from those reported in the MD&A in the 2023 Annual Report.

REGULATORY MATTERS

Introduction

Idaho Power is under the jurisdiction (as to rates, service, accounting, and other general matters of utility operation) of the IPUC, the OPUC, and the FERC. The IPUC and OPUC determine the rates that Idaho Power is authorized to charge to its retail customers. Idaho Power is also under the regulatory jurisdiction of the IPUC, the OPUC, and the WPSC as to the issuance of debt and equity securities. As a public utility under the Federal Power Act, Idaho Power has authority to charge market-based rates for wholesale energy sales under its FERC tariff and to provide transmission services under its Open Access Transmission Tariff. Additionally, the FERC has jurisdiction over Idaho Power's sales of transmission capacity and wholesale electricity, hydropower project relicensing, and system reliability, among other items.

Idaho Power develops its regulatory filings taking into consideration short-term and long-term needs for rate relief and several other factors that can affect the structure and timing of those filings. These factors include in-service dates of major capital investments, the timing and magnitude of changes in major revenue and expense items, and customer growth rates, as well as other factors.

Idaho Power's most recent general rate cases in Idaho and Oregon were filed during 2023. The IPUC approved a settlement stipulation (2023 Settlement Stipulation) in December 2023 for rates that went into effect for Idaho-jurisdiction customers on January 1, 2024. In March 2024, Idaho Power provided notice to the IPUC of its intent to file a limited issue rate case in Idaho on or after May 31, 2024.

The general rate case in Oregon is ongoing. As of the date of this report, Idaho Power is unable to predict the outcome of the general rate case. While Idaho Power has reached a settlement in principle for the general rate case with the OPUC staff and other stakeholders, the settlement is not final and remains subject to completion of the related settlement stipulation, as well as approval by the OPUC. If approved by the OPUC, new rates for Oregon-jurisdiction customers would become effective in October 2024 or later. Refer to Note 3 - "Regulatory Matters" to the condensed consolidated financial statements included in this report for additional information relating to the Oregon general rate case.

Between general rate cases, Idaho Power relies upon customer growth, an FCA mechanism, power cost adjustment mechanisms, tariff riders, limited issue rate proceedings, and other mechanisms to mitigate the impact of regulatory lag, which refers to the period of time between making an investment or incurring an expense and recovering that investment or expense and earning a return.

The outcomes of significant proceedings are described in part in this report and further in the 2023 Annual Report. In addition to the discussion below, which includes notable regulatory developments since the discussion of these matters in the 2023 Annual Report, refer to Note 3 - "Regulatory Matters" to the condensed consolidated financial statements included in this report for additional information relating to Idaho Power's regulatory matters and recent regulatory filings and orders.

Notable Pending Retail Rate or Revenue Changes

During 2024, Idaho Power filed applications requesting orders authorizing the rate or revenue changes summarized in the table below.

(1) The annual amount collected in rates is typically not recovered on a straight-line basis (i.e., 1/12th per month), and is instead recovered in proportion to retail sales volumes.

Idaho Earnings Support and Sharing from Idaho Settlement Stipulation

A May 2018 Idaho settlement stipulation related to tax reform (2018 Settlement Stipulation) and the 2023 Settlement Stipulation are each described in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report. The 2023 Settlement Stipulation modified the 2018 Settlement Stipulation in part. IDACORP and Idaho Power believe that the terms allowing additional amortization of ADITC in the settlement stipulations provide the companies with a greater degree of earnings stability than would be possible without the terms of the stipulations in effect. Based on its estimate of full-year 2024 Idaho ROE, in the first quarter of 2024, Idaho Power recorded $12.5 million in additional ADITC amortization under the settlement stipulations. Accordingly, at March 31, 2024, $73.5 million of additional ADITC remains available for future use.

Change in Deferred (Accrued) Net Power Supply Costs and the Power Cost Adjustment Mechanisms

Deferred (accrued) power supply costs represent certain differences between Idaho Power's actual net power supply costs and the costs included in its retail rates, the latter being based on annual forecasts of power supply costs. Deferred (accrued) power supply costs are recorded on the balance sheets for future recovery or refund through customer rates.

Idaho Power's power cost adjustment mechanisms in its Idaho and Oregon jurisdictions address the volatility of power supply costs and provide for annual adjustments to the rates charged to retail customers. The power cost adjustment mechanisms and associated financial impacts are described in "Results of Operations" in this MD&A and in Note 3 - "Regulatory Matters" to the condensed consolidated financial statements included in this report. With the exception of power supply expenses incurred under PURPA and certain demand response program costs that are passed through to customers substantially in full, the PCA mechanism allows Idaho Power to pass through to customers 95 percent of the differences in actual net power supply expenses as compared with base net power supply expenses, whether positive or negative. Thus, the primary financial statement impact of power supply cost deferrals or accruals is that the timing of when cash is paid out for power supply expenses differs from when those costs are recovered from customers, impacting operating cash flows from year to year.

As noted in the table above, in April 2024, Idaho Power filed an application with the IPUC requesting a $35.7 million net decrease in PCA revenues, effective for the 2024-2025 PCA collection period from June 1, 2024, to May 31, 2025. The net decrease in PCA revenues reflects improved hydropower generation. As of the date of this report, the IPUC has not yet issued an order on the application.

The following table summarizes the change in deferred (accrued) net power supply costs during the three months ended March 31, 2024 (in millions).

Integrated Resource Plan and Resource Procurement Filings

Idaho Power filed its most recent IRP with the IPUC and OPUC in September 2023, as described in the 2023 Annual Report.

The State of Oregon has competitive bidding rules regarding a public utility's procurement of resources. However, as allowed by the rules in certain cases, Idaho Power is pursuing exceptions for its identified 2024 and 2025 resource needs. In July 2023, the OPUC issued an order approving issuance of Idaho Power's RFP to procure resources for its anticipated energy and capacity needs in 2026 and 2027. Following issuance of the RFP and evaluation of bids received, in February 2024, the OPUC issued an order acknowledging Idaho Power's shortlist of bids for the RFP.

In March and April 2024, Idaho Power filed applications with the IPUC for two of the bids from the RFP. In the March 2024 application, Idaho Power requested that the IPUC approve a market purchase agreement with an energy marketer. to purchase 200 MW of firm capacity for specified periods of time. In the April 2024 application, Idaho Power applied for a CPCN to acquire and own 150 MW of battery storage with an expected useful life of 20 years. As of the date of this report, the IPUC's decisions in these matters are pending.

In addition, in February 2024, Idaho Power filed an application with the OPUC to approve an RFP to procure resources for Idaho Power's anticipated energy and capacity needs in 2028 and a request for the OPUC to partially waive certain competitive bidding rules. As of the date of this report, the OPUC's decision is pending.

Large Customer Rate Proceedings

Brisbie, LLC (Brisbie) Data Center: In April 2023, the IPUC approved an arrangement under the Clean Energy Your Way program through which a new large load customer, Brisbie, a wholly-owned subsidiary of Meta Platforms, Inc., would purchase from Idaho Power energy for a new 960,000 square-foot enterprise data center. The energy to be purchased by Brisbie is anticipated to be generated by a to-be-constructed 200 MW solar facility pursuant to a long-term power purchase agreement between Idaho Power and a third party, as well as additional renewable resource projects to be developed. The 200 MW solar facility is scheduled to begin operating as early as March 2025. In January 2024, Idaho Power filed for IPUC approval of an additional contract with a 125 MW solar project to be online in December 2026. As of the date of this report, the IPUC's decision in this matter is pending.

Relicensing of Hydropower Projects

HCC Relicensing: In connection with Idaho Power's major efforts to relicense the HCC, Idaho Power's largest hydropower complex, as described in more detail in the 2023 Annual Report in Part II, Item 7 - MD&A – "Liquidity and Capital Resources" and "Regulatory Matters," in July 2020, Idaho Power submitted to the FERC its supplement to the final license application, incorporating the settlement agreement reached between Idaho and Oregon on the CWA Section 401 certifications. The supplement included feedback on proposed modifications of the 2007 final EIS for the HCC, as well as an updated cost analysis of the HCC and a request that the FERC issue a 50-year license and initiate a supplemental NEPA process at the FERC. In June 2022, the FERC issued a notice of intent to prepare a supplemental EIS in accordance with NEPA. The FERC also reinstated informal consultation with the USFWS and the National Marine Fisheries Service under section 7 of the ESA. In October 2023, the FERC issued a notice revising the schedule for completing the supplemental EIS. Under the revised schedule, the draft supplemental EIS was targeted to be published in February 2024 and the final supplemental EIS in November 2024. On April 29, 2024, the FERC notified Idaho Power that it is the FERC's intention to revise the schedule such that the draft and final supplemental EIS would be issued no later than July 2024 and February 2025, respectively.

Relicensing costs of $469 million (including AFUDC) for the HCC were included in construction work in progress at March 31, 2024. As of the date of this report, the IPUC has authorized Idaho Power to include in its Idaho-jurisdiction rates approximately $8.8 million annually of AFUDC relating to the HCC relicensing project. Collecting these amounts currently will reduce future collections when the HCC relicensing costs are approved for recovery in base rates. As of March 31, 2024, Idaho Power's regulatory liability for collection of AFUDC relating to the HCC was $234 million.

As of the date of this report, Idaho Power believes issuance of a new HCC license by the FERC will be in 2025 or thereafter. Idaho Power is unable to predict the exact timing that the FERC will issue a new license order or the ultimate capital investment and ongoing operating and maintenance costs Idaho Power will incur in complying with a new license. Idaho Power estimates that the annual costs it will incur to obtain a new long-term license for the HCC, including AFUDC but excluding costs expected to be incurred for complying with the license after issuance, are likely to range from $35 million to $45 million until issuance of the license. Upon issuance of a long-term license, Idaho Power expects that the annual capital expenditures and operating and maintenance expenses associated with compliance with the terms and conditions of the long-term license could also be substantial. In December 2016, Idaho Power filed an application with the IPUC requesting a determination that Idaho Power's expenditures of $220.8 million through year-end 2015 on relicensing of the HCC were prudently incurred, and thus eligible for future inclusion in retail rates in a future rate proceeding. In April 2018, the IPUC issued an order approving a settlement stipulation signed by Idaho Power, the IPUC staff, and a third-party intervenor recognizing that a total of $216.5 million in expenditures were reasonably incurred, and therefore should be eligible for inclusion in customer rates at a later date.

American Falls Relicensing: In April 2020, the FERC formally initiated the relicensing of the American Falls hydropower facility, which is Idaho Power's largest hydropower facility outside of the HCC, with a generating capacity of 92.3 MW. Idaho Power owns the generation facility but not the structural dam or reservoir, which is owned by the U.S. Bureau of Reclamation. In February 2023, following the filing of a draft license application and public comment period, Idaho Power filed a final license application with the FERC. In July 2023, the FERC accepted Idaho Power’s final license application for filing. In September 2023, the FERC issued a request for comments to determine the resource issues that should be addressed in the environmental analysis and identify reasonable alternatives to the proposed action that the FERC should evaluate under the NEPA framework. In February 2024, the FERC issued a Notice of Ready for Environmental Analysis. Idaho Power's reply comments are due in May 2024. In April 2024, the FERC also issued a Notice of Intent to prepare an Environmental Assessment, signaling that the FERC staff does not anticipate that licensing the project will constitute a major federal action that would significantly affect the quality of the human environment. The relicensing has begun the process of informal ESA Section 7 consultation with the USFWS and Section 106 of the National Historic Preservation Act consultation with the Idaho State Historic Preservation Office. The next major milestone in relicensing is the FERC's issuance of the Environmental Assessment, for which the expected date of issuance is unknown as of the date of this report.

In September 2023, Idaho Power filed an application for CWA Section 401 water quality certification with the IDEQ. In March 2024, the IDEQ denied Idaho Power's certification request, citing a need for the FERC to issue its NEPA documents (the Environmental Assessment) in order to process Idaho Power's CWA 401 application. In April 2024, Idaho Power filed a petition to initiate a contested case with the Idaho Board of Environmental Quality to challenge IDEQ’s denial of Idaho Power’s application for certification. A delay in issuance of the CWA 401 certification is not anticipated to cause operational problems. Idaho Power's current license at American Falls expires in February 2025. As of the date of this report, Idaho Power anticipates the FERC will issue a new license for this facility in 2025. If the license expires before the new license is ordered, Idaho Power expects to continue to operate its American Falls facility on an annual license issued by the FERC with the same conditions as the current license.

ENVIRONMENTAL MATTERS

Overview

Idaho Power is subject to a broad range of federal, state, regional, and local laws and regulations designed to protect, restore, and enhance the environment, including the Clean Air Act, the CWA, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Comprehensive Environmental Response, Compensation and Liability Act, and the ESA, among other laws. These laws are administered by a number of federal, state, and local agencies. In addition to imposing continuing compliance obligations and associated costs, these laws and regulations provide authority to regulators to levy substantial penalties for noncompliance, injunctive relief, and other sanctions. Idaho Power's two co-owned coal-fired power plants and three wholly-owned natural gas-fired combustion turbine power plants are subject to many of these regulations. Idaho Power's 17 hydropower projects are also subject to a number of water discharge standards and other environmental requirements.

Compliance with current and future environmental laws and regulations may:

•increase the operating costs of generating plants;

•increase the construction costs and lead time for new facilities;

•require the modification of existing generating plants, which could result in additional costs;

•require the curtailment, fuel-switching, or shut-down of existing generating plants;

•reduce the output from current generating facilities; or

•require the acquisition of alternative sources of energy or storage technology, increased transmission wheeling, or construction of additional generating facilities, which could result in higher costs.

Current and future environmental laws and regulations could significantly increase the cost of operating fossil fuel-fired generation plants and constructing new generation and transmission facilities, in large part through the substantial cost of permitting activities and the required installation of additional pollution control devices. In many parts of the United States, some higher-cost, high-emission coal-fired plants have ceased operation or the plant owners have announced a near-term cessation of operation, as the cost of compliance makes the plants uneconomical to operate. The decision to cease operation of the Boardman power plant in 2020 was based in part on the significant cost of compliance with environmental laws and regulations. The decision to end participation in coal-fired operations at the North Valmy plant was also based in part on the economics of continuing coal-fired generation at the plant. Beyond increasing costs generally, these environmental laws and regulations could affect IDACORP's and Idaho Power's results of operations and financial condition if the costs associated with these environmental requirements and early plant retirements cannot be fully recovered in rates on a timely basis.

Part I - "Business - Utility Operations - Environmental Regulation and Costs" in the 2023 Annual Report includes a summary of Idaho Power's expected capital and operating expenditures for environmental matters during the period from 2024 to 2026. Given the uncertainty of future environmental regulations and technological advances, Idaho Power cannot make near-term estimates with certainty and is also unable to predict its environmental-related expenditures beyond 2026, though they could be substantial.

A summary of notable environmental matters (including conditions and events associated with climate change) impacting, or expected to potentially impact, IDACORP and Idaho Power is included in Part II, Item 7 - MD&A - "Environmental Matters" and MD&A - "Liquidity and Capital Resources - Capital Requirements - Environmental Regulation Costs" in the 2023 Annual Report. Recent developments in certain environmental matters relevant to Idaho Power are described below.

April 2024 Fossil Fuel-Fired Power Plant Rules

In April 2024, the EPA released a suite of final rules that could potentially impact generation at Idaho Power’s fossil fuel-fired power plants, including a requirement for carbon capture and storage with 90 percent capture as the best system of emission reduction for existing coal-fired plants without a planned retirement and new natural gas-fired plants, updated water treatment standards for effluent discharge at coal-fired plants, updated mercury and air toxic standards for coal-fired plants, and changes to coal combustion residual regulations, among other things.

Each of these rules becomes effective 60 days after publication in the Federal Register. However, Idaho Power expects some or all of these rules to be subject to legal challenges, which could have an impact on when and whether they become or remain effective. As of the date of this report, Idaho Power is evaluating the rules and anticipates that they could have an adverse impact on the operation and costs of operation of its fossil fuel-fired power plants, and on the cost, timing, and viability of the construction of new gas-fired power plants.

Endangered Species Act Matters

Reinstatement of "Blanket Rule" for Threatened Species: The listing of a species, or changes to the critical habitat designations, of fish, wildlife, or plants as threatened or endangered under the ESA and the associated mitigation policies may have an adverse impact on Idaho Power's ability to construct power supply, transmission, or distribution facilities or relicense or operate its hydropower facilities. In March 2024, the USFWS published a final rule, which among other items, reinstated the “blanket rule” that allows the USFWS to treat threatened species the same (or similar) as endangered species under Section 4(d) of the ESA. Idaho Power is evaluating the rule, which could have an impact on several of its projects. As of the date of this report, Idaho Power is uncertain whether any such impacts will be significant.

Clean Air Act Matters

Regional Haze: In April 2024, EPA proposed to approve revisions to the Wyoming Regional Haze SIP. The proposed SIP replaces Wyoming’s previously approved source-specific nitrogen oxide (NOx) determination for Idaho Power’s jointly owned Jim Bridger facility. Specifically, the SIP finds that conversion of Units 1 and 2 from coal-firing to natural gas-firing, together with NOx emission and heat input limits of 0.12 lb/MMBtu (30-day rolling average), 1,314 tons/year, and 21,900,000 MMBtu/year, respectively, allows for identical reasonable progress during the first planning period as would the installation of selective catalytic reduction controls (as required by the 2014 Wyoming SIP). The EPA comment period ends in May 2024, and Idaho Power plans to submit comments in support of the proposed SIP. Idaho Power does not expect the proposed SIP, if approved, to require any changes to current operations at the Jim Bridger facility.

Clean Water Act Matters

CWA Permitting: Idaho Power's hydropower generation facilities are subject to compliance and permitting obligations under the CWA. Idaho Power has been engaged for several years with the EPA, and is now engaged with the IDEQ, regarding Idaho Power's CWA permitting obligations and compliance status for those facilities. Idaho Power has in the past, and expects in the future, to incur costs associated with those permitting and compliance obligations, but as of the date of this report, Idaho Power is unable to estimate with any reasonable certainty those costs. Idaho Power also expects to incur additional costs associated with the relicensing of its hydropower facilities, as discussed elsewhere in this report.

In June 2022, Idaho Power and the IDEQ entered into a consent judgment in the Idaho state district courts to resolve a National Pollutant Discharge Elimination System permitting issue related to 15 of Idaho Power’s hydropower projects that required Idaho Power to pay a $1.1 million fine, implement interim measures for compliance, and ultimately submit applications for new permits at each of the dams subject to the consent judgment. Due to a misinterpretation of law, the EPA cancelled water discharge permits in the mid-1990’s, which Idaho Power subsequently determined were applicable for operation of the dams. Idaho Power believes that the dams would have been in compliance with the earlier permits had they remained in place. As of the date of this report, Idaho Power has submitted new permit applications for 14 of the dams and anticipates completing allsubmissions by June 2024.

Climate-Related Disclosures

In March 2024, the SEC issued a final rule on the enhancement and standardization of climate-related disclosures for investors. In April 2024, the SEC voluntarily stayed the effectiveness of the rule, pending the resolution of litigation challenging the rule in the U.S. Court of Appeals for the Eighth Circuit. If the rule becomes effective, it could require IDACORP and Idaho Power to make various additional climate-related disclosures, including regarding its Scope 1 and Scope 2 greenhouse gas emissions, if material. As of the date of this report, IDACORP and Idaho Power are evaluating the potential impacts of the final rule.

OTHER MATTERS

Critical Accounting Policies and Estimates

IDACORP's and Idaho Power's discussion and analysis of their financial condition and results of operations are based upon their condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires IDACORP and Idaho Power to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, IDACORP and Idaho Power evaluate these estimates, including those estimates related to rate regulation, retirement benefits, contingencies, asset impairment, income taxes, unbilled revenues, and bad debt. These estimates are based on historical experience and on other assumptions and factors that are believed to be reasonable under the circumstances, and are the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. IDACORP and Idaho Power, based on their ongoing reviews, make adjustments when facts and circumstances dictate.

IDACORP’s and Idaho Power’s critical accounting policies are reviewed by the audit committees of the boards of directors. These policies have not changed materially from the discussion of those policies included under "Critical Accounting Policies and Estimates" in the 2023 Annual Report.

Recently Issued Accounting Pronouncements

For discussion of new and recently adopted accounting pronouncements, see Note 1 - "Summary of Significant Accounting Policies" to the notes to the condensed consolidated financial statements included in this report.