SPOKANE, Wash. - The U.S. Department of Energy has awarded Avista (NYSE:AVA) and Idaho Power an $85.6 million grant to upgrade the Lolo-Oxbow 230-kV transmission line, enhancing grid flexibility and wildfire resilience in the Pacific Northwest. This funding, part of the Grid Resilience and Innovation Partnerships (GRIP) program, will support the reconstruction of the line, which extends from the Oxbow Dam on the Oregon-Idaho border to Lewiston, Idaho.
The project includes the construction of Idaho Power's new Pallette Junction Station, which will boost interregional transfer capacity by approximately 635 megawatts. This increase will benefit the region's customers, including the Nez Perce Tribe, by supporting renewable energy interconnection on their reservation.
Avista and Idaho Power will match the DOE's contribution, investing around $86 million over the next five years. The modernization effort will employ innovative technologies, such as drones, to minimize outages during construction.
Josh DiLuciano, Avista Vice President of Energy Delivery, emphasized the project's importance for meeting customer needs, integrating renewable energy, and enhancing grid resilience. Mitch Colburn, Idaho Power Vice President of Planning, Engineering, and Construction, highlighted the project's role in continuing to provide safety, reliability, and affordability.
The GRIP program, established under the Bipartisan Infrastructure Law, represents a $10.5 billion investment aimed at improving the resilience of the power system against extreme weather and ensuring reliable electricity access.
Avista Utilities, serving 418,000 electric and 382,000 natural gas customers, and Idaho Power, serving more than 640,000 customers, are undertaking this initiative as part of their commitment to a resilient and sustainable energy grid. The project is expected to create job opportunities and promote workforce development in collaboration with the International Brotherhood of Electrical Workers (IBEW).
This initiative is part of the second round of GRIP funding administered by the DOE's Grid Deployment Office. The information is based on a press release statement.
In other recent news, IDACORP, Inc. has been the focus of recent analyst attention. Mizuho maintains a Neutral stance on the company, expecting forthcoming updates to show increased growth in energy demand and rate base compound annual growth rates. BofA Securities has also initiated coverage on IDACORP with a Neutral rating, forecasting IDACORP's earnings per share for the fiscal years 2024, 2025, and 2026 to be $5.41, $5.76, and $6.04, respectively.
In recent financial developments, IDACORP reported a significant increase in diluted earnings per share to $1.71 in the second quarter of 2024, up from $1.35 in the same quarter of the previous year. This performance led to a rise in net income by almost $21 million, primarily due to customer growth and higher usage. Consequently, IDACORP has raised the lower end of its full-year earnings guidance to a range of $5.30 to $5.45 per diluted share.
In other company news, IDACORP is investing in a 200-megawatt battery storage system and is in negotiations for additional resources for 2026. Despite increased operating expenses related to pension costs and wildfire mitigation, the company maintains strong system reliability. Analysts note that IDACORP has been proactive in managing its financing needs, with a $300 million ATM program in place. These recent developments highlight IDACORP's strategic moves in response to ongoing trends and challenges.
InvestingPro Insights
Idaho Power's parent company, IDACORP, Inc. (IDA), demonstrates strong financial health and a commitment to shareholder value, aligning well with the company's involvement in this significant infrastructure project. According to InvestingPro data, IDACORP has a market capitalization of $5.52 billion and a P/E ratio of 19.31, indicating a reasonable valuation for a utility company.
An InvestingPro Tip reveals that IDACORP has raised its dividend for 13 consecutive years, showcasing its financial stability and dedication to returning value to shareholders. This consistent dividend growth complements the company's investment in grid modernization and expansion projects like the Lolo-Oxbow transmission line upgrade.
Another relevant InvestingPro Tip highlights that IDACORP's stock generally trades with low price volatility. This characteristic is particularly appealing for investors seeking stability in the utility sector, especially as the company embarks on large-scale infrastructure projects that could drive long-term growth.
IDACORP's revenue growth of 2.15% over the last twelve months and a more robust 8.99% growth in the most recent quarter (Q2 2024) suggest that the company is on a positive trajectory. This growth, coupled with the $85.6 million government grant and matching investment, positions Idaho Power well for future expansion and improved service delivery.
For investors interested in a deeper analysis, InvestingPro offers 5 additional tips that could provide further insights into IDACORP's investment potential and financial outlook.
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