IDACORP INC

Previous wording

•Idaho Power continues to experience and forecast positive customer growth in its service area. During the twelve months ended March 31, 2025, Idaho Power's customer count grew by over 16,500 customers and the customer growth rate was 2.6 percent.

Current wording

•Idaho Power continues to experience and forecast positive customer growth in its service area. During the first six months of 2025, Idaho Power's customer count grew by over 7,500 customers and for the twelve months ended June 30, 2025, the customer growth rate was 2.5 percent.

Previous wording

•Idaho Power's need to acquire additional power supply and transmission resources to meet growing demand continues. To help meet those growing capacity and energy needs in 2025 and beyond, in February 2025 Idaho Power entered into the following transactions:

Current wording

•To help meet growing capacity and energy needs in 2027 and beyond, Idaho Power entered into the following transactions in February 2025, which as of the date of this report remain subject to regulatory approval:

Previous wording

◦a 100MW solar facility PPA, coupled with a 100 MW energy storage agreement, with a scheduled online date of June 2027; and

Current wording

◦an agreement to purchase the output of a 100MW solar facility, coupled with a 100 MW battery energy storage agreement, with a scheduled online date of June 2027; and

Previous wording

◦an agreement to become a partial owner of SWIP-N, a planned 285-mile high-voltage transmission line, including an ownership of 250 MW and lease rights to an additional 250 MW of northbound capacity on the transmission line.

Current wording

◦an agreement to acquire an ownership interest in 250 MW and for rights to an additional 250 MW of northbound capacity on SWIP-N, a planned 285-mile high-voltage transmission line.

Previous wording

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, 2025 and 2024 (in thousands, except earnings per share amounts):

Current wording

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 and six months ended June 30, 2025 and 2024 (in thousands, except earnings per share amounts):

Previous wording

The table below provides a reconciliation of net income attributable to IDACORP for the three months ended March 31, 2025, from the same period in 2024 (items are in millions and are before related income tax impact unless otherwise noted):

Current wording

The table below provides a reconciliation of net income attributable to IDACORP for the three months and six months ended June 30, 2025, from the same periods in 2024 (items are in millions and are before related income tax impact unless otherwise noted):

Previous wording

IDACORP's net income increased $11.4 million for the first quarter of 2025 compared with the first quarter of 2024, due primarily to higher net income at Idaho Power.

Current wording

IDACORP's net income increased $6.3 million for the second quarter of 2025 compared with the second quarter of 2024, due primarily to higher net income at Idaho Power.

Previous wording

A net increase in retail revenues per MWh, net of power cost adjustment mechanisms, increased operating income by $11.3 million in the first quarter of 2025 compared with the first quarter of 2024. This benefit was due primarily to an overall increase in Idaho base rates, effective January 1, 2025, per the 2024 Idaho Limited-Issue Rate Case. For more information on the 2024 Idaho Limited-Issue Rate Case, see Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2024 Annual Report.

Current wording

A net increase in retail revenues per MWh, net of power cost adjustment mechanisms, increased operating income by $8.8 million in the second quarter of 2025 compared with the second quarter of 2024. This benefit was due primarily to an overall increase in Idaho base rates, effective January 1, 2025, from the outcome of the 2024 Idaho Limited-Issue Rate Case. For more information on the 2024 Idaho Limited-Issue Rate Case, see Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2024 Annual Report.

Previous wording

At Idaho Power, customer growth increased operating income by $7.3 million in the first quarter of 2025 compared with the first quarter of 2024, as the number of Idaho Power customers grew by approximately 16,500, or 2.6 percent, during the twelve months ended March 31, 2025. Usage per retail customer was relatively consistent in the first quarter of 2025 compared with the first quarter of 2024. Residential usage per customer increased, as lower temperatures in the first quarter of 2025 compared with the first quarter of 2024 led residential customers to use more energy for heating purposes, but the increase was offset by a slight decrease in industrial usage per customer and the effects of customer mix changes. An increase in the deferral of residential and small commercial customer revenues through the FCA mechanism negatively affected retail revenues by $1.5 million.

Current wording

Customer growth increased operating income by $6.0 million in the second quarter of 2025 compared with the second quarter of 2024, as the number of Idaho Power customers grew by approximately 16,000, or 2.5 percent, during the twelve months ended June 30, 2025. Usage per retail customer, net of associated power supply costs and power cost adjustment and FCA mechanisms, increased operating income by $5.5 million in the second quarter of 2025 compared with the second quarter of 2024. Irrigation usage per customer increased most significantly, as lower precipitation in the second quarter of 2025 compared with the second quarter of 2024 led irrigation customers to use more energy for operating irrigation pumps.

Previous wording

Other changes in operating revenues and expenses, net, increased operating income by $1.9 million in the first quarter of 2025 compared with the first quarter of 2024, due primarily to a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's PCA mechanism, which increased other changes in operating revenues and expenses, net, compared with the same period in 2024. More moderate and less volatile wholesale natural gas and power market prices in the western United States decreased Idaho Power's net power supply expenses in the first quarter of 2025 compared with the first quarter of 2024.

Current wording

Other changes in operating revenues and expenses, net, decreased operating income by $5.6 million in the second quarter of 2025 compared with the second quarter of 2024, due primarily to the timing of recording and adjusting regulatory accruals and deferrals during the second quarter of 2024 that did not reoccur in 2025. This was partially offset by a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's power cost adjustment mechanisms, which increased operating income compared with the second quarter of 2024.

Previous wording

Non-operating expense, net, increased $2.2 million in the first quarter of 2025 compared with the first quarter of 2024. Higher long-term debt balances and an increase in transmission customer deposits, on which Idaho Power must pay interest to the customer, led to an increase in interest expense. This increase was partially offset by an increase in AFUDC in the first quarter of 2025 compared with the first quarter of 2024, as the average construction work in progress balance was higher.

Current wording

Non-operating expense, net, increased $7.0 million in the second quarter of 2025 compared with the second quarter of 2024. Higher long-term debt balances and an increase in transmission customer deposits, on which Idaho Power must pay interest to the customer, led to an increase in interest expense. Interest on a new finance lease also contributed to the increase compared with the second quarter of 2024. This increase was partially offset by an increase in AFUDC in the second quarter of 2025 compared with the second quarter of 2024, as the average construction work in progress balance was higher. In addition, interest income increased due to higher cash and cash equivalent balances in the second quarter of 2025 compared with the second quarter of 2024.

Previous wording

The decrease in income tax expense was principally the result of an increase in additional ADITC amortization. Based on Idaho Power's current expectations of full-year 2025 financial results, Idaho Power recorded $19.3 million of additional ADITC amortization under its Idaho regulatory settlement stipulation during the first quarter of 2025, compared with $12.5 million of additional ADITC amortization during the same period in 2024.

Current wording

The decrease in income tax expense was principally the result of an increase in additional ADITC amortization and variances in flow-through tax adjustments. Based on Idaho Power's current expectations of full-year 2025 financial results, Idaho Power recorded $17.2 million of additional ADITC amortization under its Idaho regulatory settlement stipulation during the second quarter of 2025, compared with $7.5 million of additional ADITC amortization during the same period in 2024.

Previous wording

Other O&M expenses in the first quarter of 2025 were $7.2 million higher than the first quarter of 2024, partially related to an approximate $3.2 million increase in wildfire mitigation program and related insurance expenses. In addition, other O&M expenses increased $1.8 million due to a decrease in grant funding received for maintenance work in the first quarter of 2025 as compared to the first quarter of 2024. Inflationary pressures on labor-related costs also contributed to the increase in other O&M expenses.

Current wording

Total other O&M expenses in the first six months of 2025 were $18.2 million higher than the first six months of 2024. This increase was primarily driven by higher variable employee costs based on the expected achievement level of performance-based targets, as well as inflationary pressures on labor-related costs, professional services, and an increase in wildfire mitigation program and related insurance expenses. In addition, a decrease in grant funding received for maintenance work in the first six months of 2025 increased other O&M expenses as compared to the first six months of 2024.

Previous wording

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, in March 2025 Idaho Power provided notice to the IPUC of its intent to file a general rate case in Idaho on or after May 30, 2025. Idaho Power expects the processing of a general rate case would span at least seven months before new rates would be in effect.

Current wording

To address the regulatory lag in recovery of costs primarily associated with Idaho Power’s current and anticipated significant infrastructure investments, in May 2025 Idaho Power filed a general rate case in Idaho. Idaho Power expects the processing of a general rate case would span at least seven months before new rates would be in effect.

Previous wording

•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, GWW, and SWIP-N 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 a 2025 general rate case and intends to continue to do so in future general rate cases or other appropriate regulatory proceedings.

Current wording

•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, GWW, and SWIP-N projects. Idaho Power's existing hydropower and thermal generation facilities also require continuing upgrades and equipment replacement, and the company continues a significant relicensing effort for the HCC, its largest hydropower generation resource. Idaho Power is pursuing timely inclusion of completed capital projects into rate base as part of the 2025 general rate case filing and intends to continue to do so in future general rate cases or other appropriate regulatory proceedings.

Previous wording

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.

Current wording

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

Previous wording

•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, 2025, Idaho Power's customer count grew by 2.6 percent. While recessionary or volatile economic conditions could slow the rate of customer growth, 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.

Current wording

•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 June 30, 2025, Idaho Power's customer count grew by 2.5 percent. While recessionary or volatile economic conditions could slow the rate of customer growth, 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.

Previous wording

Idaho Power is preparing its 2025 IRP, its 20-year forecast of load and power supply resource options. Included in the below table are the load forecast assumptions the company anticipates using in the 2025 IRP as of the date of this report, and for comparison purposes, the analogous average annual growth rates Idaho Power used in the prior two IRPs.

Current wording

Idaho Power filed its 2025 IRP, its 20-year forecast of load and power supply resource options, with the IPUC and OPUC in June 2025. Included in the below table are the load forecast assumptions the company used in the 2025 IRP and, for comparison purposes, the analogous average annual growth rates Idaho Power used in the prior two IRPs.

Previous wording

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, and on July 22, 2024, Idaho Power reached a new all-time summer peak demand of 3,793 MW. Idaho Power's prior all-time peak demand was 3,751 MW, set in June 2021. 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, GWW, and SWIP-N transmission projects, along with other capacity, energy, and transmission resource procurements, described in "Liquidity and Capital Resources" in this MD&A.

Current wording

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, and on July 22, 2024, Idaho Power reached a new all-time summer peak demand of 3,793 MW. Idaho Power believes that existing and sustained growth in customers, load, and peak demand for electricity, the obligation to maintain a safe and reliable system, 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, GWW, and SWIP-N transmission projects, along with other capacity, energy, and transmission resource procurements, described in "Liquidity and Capital Resources" in this MD&A.

Previous wording

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 2025, Idaho Power expects generation from its hydropower resources to be in the range of 7.0 million to 8.5 million MWh, compared with actual generation of 7.2 million MWh in 2024 and a 30-year average annual total of approximately 7.7 million MWh.

Current wording

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 2025, Idaho Power expects generation from its hydropower resources to be in the range of 7.0 million to 8.0 million MWh, compared with actual generation of 7.2 million MWh in 2024 and a 30-year average annual total of approximately 7.7 million MWh.

Previous wording

•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 North Valmy plant, ceasing participation in 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. Units 1 and 2 at the Jim Bridger plant were successfully converted to natural gas in the second quarter of 2024. In July 2024, Idaho Power executed an agreement with its co-owner to facilitate the planned conversion of the two units at the North Valmy plant from coal to natural gas by mid-2026.

Current wording

•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 North Valmy plant, ceasing participation in 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 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 2025 IRP identified a preferred resource portfolio and action plan that includes the conversion from coal to natural gas of the two units at the North Valmy plant in 2026 and the remaining two units at the Jim Bridger plant in 2030. Units 1 and 2 at the Jim Bridger plant were successfully converted to natural gas in the second quarter of 2024. In June 2024, Idaho Power executed an agreement with its co-owner to facilitate the planned conversion of the two units at the North Valmy plant from coal to natural gas by mid-2026.

Previous wording

•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 increased wildland-urban interfaces, historical land management practices, climate change, and overall wildland and forest health. Idaho Power is taking a proactive approach to wildfire risk in its service area and transmission corridors. Idaho Power has developed and 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. In April 2025, Idaho enacted the Wildfire Standard of Care Act, and Idaho Power plans to file a new Idaho-specific WMP with the IPUC based upon that statute after it becomes effective on July 1, 2025. Idaho Power's approach to wildfire mitigation 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 its approach through metrics and monitoring. Idaho Power has regulatory authorization in both Idaho and Oregon to defer, for potential future amortization, certain actual incremental O&M expenses necessary to implement the WMP. The WMP regulatory deferrals are described in more detail in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2024 Annual Report and the condensed consolidated financial statements included in this report.

Current wording

•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 increased wildland-urban interfaces, historical land management practices, climate change, and overall wildland and forest health. Idaho Power is taking a proactive approach to wildfire risk in its service area and transmission corridors. Idaho Power has developed and 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 wildfire mitigation 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 its approach through metrics and monitoring. Idaho Power has regulatory authorization in both Idaho and Oregon to defer, for potential future amortization, certain actual incremental O&M expenses necessary to implement the WMP. The WMP regulatory deferrals are described in more detail in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2024 Annual Report and the condensed consolidated financial statements included in this report. In July 2025, the Idaho Wildfire Standard of Care Act became effective. Once the IPUC establishes the schedule for submission of WMPs under the Act, Idaho Power plans to file a new Idaho-specific WMP with the IPUC in accordance with that schedule.

Previous wording

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, 2025. In this analysis, the results for the three months ended March 31, 2025, are compared with the same period in 2024.

Current wording

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 and six months ended June 30, 2025. In this analysis, the results for the three months and six months ended June 30, 2025, are compared with the same periods in 2024.

Previous wording

The table below presents Idaho Power’s energy sales and supply (in thousands of MWh) for the three months ended March 31, 2025 and 2024.

Current wording

The table below presents Idaho Power’s energy sales and supply (in thousands of MWh) for the three months and six months ended June 30, 2025 and 2024.

Previous wording

Weather-related information for Boise, Idaho, for the three months ended March 31, 2025 and 2024, 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.

Current wording

Weather-related information for Boise, Idaho, for the three months and six months ended June 30, 2025 and 2024, 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.

Previous wording

Sales Volume and Generation: Retail sales volumes increased 3 percent in the first quarter of 2025 compared with the same period in 2024, primarily due to growth in the number of Idaho Power customers and an increase in usage per residential customer. The number of Idaho Power customers grew by 2.6 percent over the prior twelve months. For more information on the changes in sales volume, see the "Operating Revenues" section below in this MD&A.

Current wording

Sales Volume and Generation: Retail sales volumes increased 5 percent and 4 percent in the second quarter and first six months of 2025, respectively, compared with the same periods in 2024, primarily due to growth in the number of Idaho Power customers and an increase in usage per irrigation customer. The number of Idaho Power customers grew by 2.5 percent over the prior twelve months, and lower precipitation in the second quarter of 2025, compared with the second quarter of 2024, led irrigation customers to operate irrigation pumps more frequently, contributing to the higher volumes. For more information on the changes in sales volume, see the "Operating Revenues" section below in this MD&A.

Previous wording

Total system generation increased 8 percent for the first quarter of 2025 compared with the same period in 2024, which consists of an increase in hydropower generation and steam generation, partially offset by decreased natural gas generation. For more information on the changes in generation, see the "Operating Expenses" section below in this MD&A.

Current wording

Total system generation decreased 3 percent for the second quarter of 2025 compared with the second quarter of 2024, due primarily to lower hydropower generation, offset partially by an increase in steam and natural gas generation. Total system generation increased 2 percent in the first six months of 2025 compared with the same period in 2024, which consists of an increase in steam generation, partially offset by decreased hydropower generation and natural gas generation. For more information on the changes in generation, see the "Operating Expenses" section below in this MD&A.

Previous wording

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, 2025 and 2024, and the number of customers as of March 31, 2025 and 2024.

Current wording

Retail Revenues: The table below presents Idaho Power’s retail revenues (in thousands) and MWh sales volumes (in thousands) for the three months and six months ended June 30, 2025 and 2024, and the number of customers as of June 30, 2025 and 2024.

Previous wording

Retail revenues increased $13.1 million during the first quarter of 2025 compared with the same period in 2024. The factors affecting retail revenues during the periods are discussed below.

Current wording

Retail revenues increased $11.8 million and $24.8 million during the second quarter and first six months of 2025, respectively, compared with the same periods in 2024. The factors affecting retail revenues during the periods are discussed below.

Previous wording

•Rates: Customer rates, excluding revenues related to power cost adjustment mechanisms, increased retail revenues by $11.3 million for the first three months of 2025 compared with the same period in 2024, due primarily to an overall increase in Idaho base rates, effective January 1, 2025, per the 2024 Idaho Limited-Issue Rate Case. Customer rates also include the collection from customers of amounts related to the power cost adjustment mechanisms, which decreased revenues by $8.3 million in the first quarter of 2025 compared with the same period of 2024. 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.

Current wording

•Rates: Customer rates, excluding revenues related to power cost adjustment mechanisms, increased retail revenues by $8.8 million and $20.3 million, respectively, for the three months and six months ended June 30, 2025, compared with the same periods in 2024, due primarily to an overall increase in Idaho base rates, effective January 1, 2025, from the outcome of the 2024 Idaho Limited-Issue Rate Case. Customer rates also include the collection from customers of amounts related to the power cost adjustment mechanisms, which decreased revenues by $15.1 million and $23.4 million, in the second quarter and first six months of 2025, respectively, compared with the same periods of 2024. 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.

Previous wording

•Customers: Customer growth of 2.6 percent during the twelve months ended March 31, 2025, increased retail revenues by $10.8 million in the first quarter of 2025 compared with the same period of 2024.

Current wording

•Customers: Customer growth of 2.5 percent during the twelve months ended June 30, 2025, increased retail revenues by $7.2 million and $18.0 million in the second quarter and first six months of 2025, respectively, compared with the same periods of 2024.

Previous wording

•Usage: Overall usage (on a per customer basis) was relatively consistent between the first quarters of 2025 and 2024. Residential usage per customer increased, as lower temperatures in the first quarter of 2025 compared with the first quarter of 2024 led to residential customers to use more energy for heating purposes, but the increase was partially offset by a decrease in industrial usage per customer and the effects of customer mix changes.

Current wording

•Usage: Higher usage (on a per customer basis), primarily related to irrigation customers, increased retail revenues by $11.7 million and $12.2 million in the second quarter and first six months of 2025 compared with the same periods of 2024. Drier summer weather in June 2025 led to a 15 percent increase in energy usage per irrigation customer to operate irrigation pumps during the second quarter of 2025 compared with the same period in 2024. Also, residential usage per customer increased, but the increase was offset by a decrease in industrial usage per customer.

Previous wording

•FCA Mechanism: An increase in the deferral of residential and small commercial customer revenues through the FCA mechanism negatively affected retail revenues by $1.5 million.

Current wording

•FCA Mechanism: An increase in the deferral of residential and small commercial customer revenues through the FCA mechanism negatively affected retail revenues by $0.8 million and $2.3 million in the second quarter and first six months of 2025, respectively, compared with the same periods in 2024.

Previous wording

Wholesale Energy Sales: Wholesale energy sales consist primarily of long-term sales contracts, opportunity 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, 2025 and 2024 (in thousands, except for revenue per MWh amounts).

Current wording

Wholesale Energy Sales: Wholesale energy sales consist primarily of long-term sales contracts, opportunity 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 and six months ended June 30, 2025 and 2024 (in thousands, except for revenue per MWh amounts).

Previous wording

In the first quarter of 2025, wholesale energy revenues decreased $18.5 million compared with the same period of 2024, due primarily to lower wholesale market prices. Wholesale energy prices were lower during the first three months of 2025 compared with 2024 as more moderate winter weather resulted in lower power prices 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."

Current wording

In the second quarter and the first six months of 2025, wholesale energy revenues decreased $5.4 million and $23.9 million, respectively, compared with the same periods of 2024, due primarily to decreased wholesale energy volumes sold. Also, wholesale energy prices were lower during the first six months of 2025 compared with 2024 as more moderate winter weather resulted in lower power prices 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."

Previous wording

Purchased Power: The table below presents Idaho Power’s purchased power expenses and volumes for the three months ended March 31, 2025 and 2024 (in thousands, except for per MWh amounts).

Current wording

Purchased Power: The table below presents Idaho Power’s purchased power expenses and volumes for the three months and six months ended June 30, 2025 and 2024 (in thousands, except for per MWh amounts).

Previous wording

Purchased power expense decreased $37.8 million, or 34 percent, during the first quarter of 2025 compared with the same period of 2024, primarily due to lower wholesale energy market prices in the region. Also, increased system generation led to a decrease in total MWh purchased of 13 percent compared to 2024.

Current wording

Purchased power expense decreased $6.6 million, or 7 percent, and $44.4 million, or 21 percent, during the second quarter and first six months of 2025, respectively, compared with the same periods of 2024, primarily due to lower wholesale energy market prices in the region. Also, increased system generation led to a decrease in total MWh purchased to serve load of 5 percent and 9 percent for the second quarter and first six months of 2025, respectively, compared with the same periods of 2024.

Previous wording

Fuel Expense: The table below presents Idaho Power’s fuel expenses and thermal generation for the three months ended March 31, 2025 and 2024 (in thousands, except for per MWh amounts).

Current wording

Fuel Expense: The table below presents Idaho Power’s fuel expenses and thermal generation for the three months and six months ended June 30, 2025 and 2024 (in thousands, except for per MWh amounts).

Previous wording

(1) "Steam" is composed of expenses and generation from steam plants that are fueled only by coal or by both coal and natural gas.

Current wording

(1) "Steam" is composed of expenses and generation from steam plants that are fueled by only coal or by both coal and natural gas.

Previous wording

Fuel expense decreased $22.8 million, or 25 percent, in the first quarter of 2025 compared with the same period of 2024, primarily due to a 19 percent decrease in the total average cost per MWh from all sources and a 7 percent decrease in MWh generated from steam and natural gas generation. Hydropower generation increased 21 percent during the first three months of 2025, compared with the same period of 2024, which reduced utilization of steam and natural gas generation to serve load and provide power for wholesale energy sales.

Current wording

Fuel expense increased $12.1 million, or 54 percent, in the second quarter of 2025, but decreased $10.7 million, or 9 percent, in the first six months of 2025 compared with the same periods of 2024. The increase in fuel expense in the second quarter of 2025 compared with the second quarter of 2024 was primarily due to a 19 percent decrease in hydroelectric generation, which increased Idaho Power's utilization of steam and natural gas generation to serve load. The decrease in fuel expense in the first six months of 2025 compared with the same period of 2024, was primarily due to a 19 percent decrease in the total average cost per MWh from all sources and partially offset by a 12 percent increase in MWh generated from steam and natural gas generation.