IDACORP, Inc. (IDA) | The Buildout — AI Infrastructure
The Verdict
IDACORP is the holding company for Idaho Power, a regulated, vertically integrated electric utility that generates, transmits, and sells electric energy and capacity across southern Idaho and eastern Oregon. It does not make AI hardware, software, or compute. Its role in the buildout is to supply firm capacity, energy, and transmission service to large industrial customers in its territory, including Micron's Boise memory fab complex and a Meta data center. Because Idaho Power is a regulated monopoly, its return comes from the capital it invests rather than from pricing power on the AI compute layer.
| Market Cap | — |
| Revenue (TTM) | $1.8B |
| Revenue Growth | −0.5% |
| EBITDA Margin (TTM) | 36.3% |
| Net Debt | $3.9B |
| Earnings Beats | 5 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Large contract customers produced $6.5M of operating income in Q2 2026, the first quarter the company reported this line separately. Industrial revenues including large contracts rose 17.0% year-over-year.
- Reported earnings understate the improvement: first-half ADITC amortization fell to $6.3M from $36.5M, yet diluted EPS still rose to $3.00 from $2.87. Management guided full-year ADITC use down to less than $15M from less than $30M.
- The capital plan excludes Micron Fab 2, the 2032 RFP, and the annual long-term capital-budgeting refresh, and the load forecast is built on an 8.3% growth rate management calls stale. Management says 'there could be some upside to what is shown.'
- Loads are contracted rather than speculative: Micron's special contract carries take-or-pay obligations, and management says new large-load agreements will include termination payments, upfront payments, and strong credit requirements.
- Delivery has matched promises — 250 MW of company-owned batteries online as scheduled, the Valmy Unit 2 conversion completed before summer peak, and B2H transmission moving from about 15% of structures to more than 400 towers built in a quarter.
What We’re Watching
- Hydropower guidance has been trimmed twice, to 5.5-6.5M MWh, after dry conditions in May and June. The top end now sits below 2025 actual generation of 7.0M MWh and the approximately 7.3M MWh 20-year average.
- 2032 RFP shortlist expected in Q3 2026. Eight Idaho Power self-bid projects (six gas, two storage) are in the field, and the plan assumes no win rate against a historic self-build rate of about 50%.
- Updated load forecast due around November 2026 — the first revision to the 8.3% IRP growth rate the capital plan is built on.
- The decision on a June 2027 general rate case comes early in 2027, based on whether large-load revenue covers depreciation and interest from converting construction work in progress.
The thesis is strengthening at the operating level and unresolved at the financial level. The large-load ramp has moved from narrative to a reported line, guidance was raised at the low end, and the company used far less tax-credit support than planned — all signs of underlying earnings strength. Against that, capital spending is trending to the high end of its range, roughly $2B of equity content is planned over five years, and more than $1.8B of construction work in progress converts to plant in service in 2026-2027, starting depreciation and stopping AFUDC. The open question is whether large-load revenue grows fast enough to cover that step-up, or whether a June 2027 rate case becomes necessary.
Earnings Beat
IDACORP reported Q2 2026 revenue of $469.8M and a 28.0% gross margin, with net income of $102.6M and diluted EPS of $1.79 versus $1.76 in Q2 2025. The quarter's standout was the first separate reporting of large contract customer operating income, $6.5M, which contains just one month of Micron Fab 1 revenue and an early Meta ramp. Industrial revenues including large contracts rose 17.0% year-over-year.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $470M | $402M | $451M | +4.2% |
| Gross margin | 28.0% | 12.8% | 22.4% | +560bps |
| EBITDA | $197M | $119M | $163M | +20.5% |
| EPS | $1.79 | $1.21 | $1.76 | +1.9% |
| Large contract customer operating income | $6.5M | n/a | n/a | New reporting line in Q2 2026 |
| Additional ADITC amortization | $0 | $6.3M | ~$17M | Down about $17M |
We added a new line to our quarterly reconciliation table. It shows the financial impact from large contract customers… So when I quote changes from rates or customer growth generally, these exclude large contract customers because those will land on their own, new line.— Brian Buckham, Q2 2026 call, 2026-07-30
Management tone: Management's tone was more constructive quarter-over-quarter. Lisa Grow noted she had been providing updates on Micron's expansion and Meta's data center for years and said it was 'great to see this hard work come to fruition as these projects ramp up.' The company raised the low end of earnings guidance, halved its expected ADITC use, and added a new reporting line for large contract customers. At the same time, management was candid about strain: Grow described 'an absolute sprint' to keep up with growing load, and the company trimmed hydropower guidance for the second time. On items still in negotiation — Micron Fab 2 terms, individual large-load identities — management cited confidentiality and declined detail.
Management Guidance
Management guided FY2026 diluted EPS to $6.30-$6.45, raising the low end by $0.05. Idaho Power O&M is guided to $525-$535M, and capital expenditure to $1.3-$1.5B, which management says is trending to the high end. Additional ADITC amortization is guided to less than $15M, halved from the prior guide of less than $30M. Hydropower generation is guided to 5.5-6.5M MWh after the top end was trimmed twice. The guidance assumes historically normal weather for the rest of 2026, and management said the raise does not bank on a warm July.
Trajectory
Revenue has been roughly flat over the trailing year — $524M in Q3 2025, $405M in Q4 2025, $402M in Q1 2026, and $470M in Q2 2026 — while margins expanded. Gross margin rose 240 basis points, operating margin 240 basis points, and EBITDA margin 380 basis points in the latest read. The mix is shifting toward industrial and large-contract load, and the Q1 comparison was helped by a power cost adjustment line that moved from $47.7M of expense in Q1 2025 to a $9.3M credit in Q1 2026. Management describes the ramp as a staircase, not a curve: Micron's load 'is step up… They are certainly not linear,' and data-center volumes depend on when server racks are installed and turned on. Cash conversion is the weak point — trailing-twelve-month free cash flow against net income is deeply negative as the construction program runs.
The Model
The model projects FY+1 revenue of $1,863.0M and EBITDA of $722M, a 38.75% margin, and FY+2 revenue of $1,995.0M and EBITDA of $780M, a 39.1% margin. The near-term anchor is the large-load ramp already under way: Micron Fab 1 revenue that began in June 2026 and a Meta data center management expects to ramp steadily through the second half of 2026. FY+2 depends more on the capital plan converting — 2032 RFP awards, whether Micron Fab 2 moves into the load forecast and capital plan, and the three gas plants and three transmission lines scheduled for 2028 through 2030.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $1.8B | $1.9B | $2.0B |
| YoY Growth | — | +2.8% | +7.1% |
| EBITDA | $618M | $722M | $780M |
| EBITDA Margin | 34.1% | 38.8% | 39.1% |
Projections are the median of 4 independent model runs. The model’s revenue sits 7.7% below analyst consensus.
Management guided FY2026 diluted EPS to $6.30-$6.45, raising the low end by $0.05. Idaho Power O&M is guided to $525-$535M, and capital expenditure to $1.3-$1.5B, which management says is trending to the high end. Additional ADITC amortization is guided to less than $15M, halved from the prior guide of less than $30M. Hydropower generation is guided to 5.5-6.5M MWh after the top end was trimmed twice. The guidance assumes historically normal weather for the rest of 2026, and management said the raise does not bank on a warm July.
What Could Go Right — and Wrong
- Micron Fab 2 converts from confidential negotiation to a signed energy service agreement and is pulled into the load forecast and capital plan.
- The updated load forecast, due around November 2026, revises the 8.3% IRP growth rate upward, supporting management's view that the plan is understated.
- Idaho Power self-bid projects win a share of the 2032 RFP; the plan currently assumes a zero win rate against a historic rate of about 50%.
- Continued low ADITC usage — $6.3M in the first half of 2026 against a $55M annual cap — keeps earnings more self-funding and extends the period without a general rate case.
- B2H, SWIP-North, and the Gateway West portion come online on schedule by 2028, adding transmission wheeling revenue and system flexibility.
- More than $1.8B of construction work in progress converts to plant in service in 2026-2027, starting depreciation and stopping AFUDC, which contributed $30.6M of pre-tax income in Q1 2026 alone.
- Hydropower generation has been trimmed twice, to a 5.5-6.5M MWh range whose top end sits below both 2025 actual generation of 7.0M MWh and the roughly 7.3M MWh 20-year average.
- Roughly $2B of equity content is planned over five years, capital spending is trending to the high end of its range, and credit metrics sit in a 13-15% FFO/debt zone management says it is not racing to raise.
- Larger peers are locking up long-lead gas turbines, transformers, and batteries, and no neighbor confirmed Idaho Power has secured equivalent equipment for its 2028-2030 gas plants.
- Management says execution capacity is maxed out through about 2028 — 'an absolute sprint' — while three transmission lines and three gas plants sit on the same schedule.
Looking Ahead
Over the next twelve months the story turns on dated events. The 2032 RFP shortlist is expected in Q3 2026. The revised load forecast — the first revision to the 8.3% growth rate the capital plan is built on — is due around November 2026. Early in 2027, management decides whether to file a June 2027 general rate case, a call that turns on whether large-load revenue covers the depreciation and interest step-up from converting construction work in progress. Micron Fab 2 remains the largest visible item outside both the load forecast and the capital plan: negotiations are described as active but confidential, with no timing given.
- Q3 20262032 RFP shortlist — Eight Idaho Power self-bids (six gas, two storage) are in the field.
- ~November 2026Updated load forecast — First revision to the 8.3% IRP growth rate the plan is built on.
- Early 2027Rate-case decision — Whether Idaho Power files a June 2027 general rate case.
- Spring 2027Oregon asset sale close — Sale of Oregon distribution and transmission assets to OTEC.
- Late 2027B2H in service — Energization of the Boardman-to-Hemingway transmission line.
- 2028SWIP-North complete — Completion of SWIP-North; final BLM authorization pending.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $1.8B | $1.8B | $1.8B | -0.8% |
| Gross Margin | 17.6% | 19.7% | 21.7% | +210bps |
| EBITDA | $556M | $618M | $654M | +11.1% |
| EBITDA Margin | 30.4% | 34.1% | 36.3% | +365bps |
| Net Income | $289M | $323M | $339M | +11.8% |
| Free Cash Flow | −$415M | −$578M | −$1.1B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)21.7%
- EBITDA Margin (TTM)36.3%
- Net Margin (TTM)18.8%
- ROIC4.0%
- FCF Conversion-169.0%
- SBC / Revenue0.0%
The Company
IDACORP is a holding company whose principal subsidiary, Idaho Power, is a regulated, vertically integrated electric utility. It generates, transmits, distributes, and sells electric energy and capacity across southern Idaho and eastern Oregon, serving about 664,000 retail customers as of December 31, 2025. Its AI-infrastructure role is indirect: rather than selling compute or equipment, it supplies electricity, firm capacity, and transmission service to large industrial customers in its territory, including Micron's Boise memory fab complex and a Meta data center. Management describes the pipeline behind those loads as 'strong at multiple gigawatts,' running 'well into the 2030s.'
Idaho Power owns its own generation and grid. The 10-K lists 17 hydropower plants in southern Idaho and eastern Oregon, three natural gas plants in southern Idaho, interests in the Jim Bridger coal and gas plant in Wyoming and the North Valmy gas plant in Nevada, and 1,228 MWh of battery storage across nine facilities. It holds a one-third interest in Bridger Coal Company, which supplies coal to Jim Bridger units 3 and 4. To serve new load it is building: more than 550 MW of company-owned batteries added since 2023, three gas plants filed or under construction, and three transmission lines targeting 2027-2028.
Business Segments
Competitive Landscape
Idaho Power is a regulated monopoly in its service territory, so it does not compete with another electricity provider for these large loads — Micron's Boise fabs and Meta's Idaho data center cannot buy power from a neighboring utility without transmission. The 10-K's own competitive framing is about fuel substitution rather than rival utilities: 'Idaho Power competes with fuel distribution companies, including natural gas providers, in serving the energy needs of customers for space heating, water heating, and appliances.' Supply-chain wiring separately lists regional utilities as peers — Avista, NorthWestern Energy, and Portland General — alongside PacifiCorp, which is also a transmission partner on Gateway West.
- Natural gas and fuel distribution companies10-K framing: Idaho Power competes with these for space heating, water heating, and appliance load.
- Avista (AVA)Named in supply-chain wiring; not discussed.
- NorthWestern Energy (NWE)Named in supply-chain wiring; not discussed.
- Portland General (POR)Named in supply-chain wiring; not discussed.
- PacifiCorpTransmission partner on Gateway West and also listed as a peer in supply-chain wiring.
Supply Chain
Idaho Power sits at the delivery end of the energy chain. It contracts for gas transportation, storage, and coal to run its plants, then sells power and transmission to industrial customers. No neighbor transcript in the source set named Idaho Power.
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