IDACORP INC (IDA)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

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 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 2025 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 PURPA-qualifying hydropower generation projects.

EXECUTIVE OVERVIEW

Management's Outlook and Company Objectives

In the 2025 Annual Report, IDACORP's and Idaho Power's management included a summary of their business objectives for the companies for 2026 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 the discussion in this MD&A. Some notable developments that have occurred since that report include the following:

•Idaho Power continues to experience and forecast positive customer growth in its service area. During the twelve months ended June 30, 2026, Idaho Power's customer count grew by approximately 15,000 customers and the customer growth rate was 2.3 percent.

•So far in 2026, Idaho Power has taken important actions and several key projects achieved notable milestones, underscoring significant progress towards addressing Idaho Power's growing capacity and energy needs in 2026 and beyond:

◦In March, Idaho Power filed a CPCN request for a 222 MW natural gas-fueled facility, with an expected in-service date in 2029, and for a 430 MW natural gas-fueled facility, with an expected in-service date in 2030. As of the date of this report, the CPCN request remains subject to regulatory approval.

◦Also in March, the IPUC approved Idaho Power's agreement to purchase the output of an 80 MW solar facility, with a scheduled online date of June 2027, and Idaho Power's CPCN request for 167 MW of natural gas-fueled generating capacity next to the existing Bennett Mountain power plant, with an expected in-service date in 2028. Construction commenced at the Bennett Mountain power plant in May 2026.

◦In April, Idaho Power, jointly with co-owner PacifiCorp, filed a CPCN request for Segment E-8 for the GWW transmission line, with an expected in-service date for the entire segment in 2030 or later. As of the date of this report, the CPCN request remains subject to regulatory approval.

◦In June, Idaho Power filed an application with the IPUC for an order approving a 20-year PPA with Bluebird Solar Project LLC, supplying up to 200 MW of output to Idaho Power, along with a 20-year energy storage system tolling agreement for 100 MW of dispatchable energy storage capacity. Both are expected to be in-service by June 2028. As of the date of this report, the application remains subject to regulatory approval.

◦The conversion of unit 2 at the North Valmy power plant from coal to natural gas was completed in June, ending all coal-fired generation at the plant.

◦Also in June, the Hemingway expansion and Boise Bench battery energy storage systems became fully operational, adding 250 MW of energy storage.

◦Construction commenced in June on SWIP-N, a 285-mile high voltage transmission line, with an expected in-service date in 2028.

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◦In July, Idaho Power began stringing transmission line wire on B2H and continues to expect an in-service date for B2H in late 2027.

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 (in thousands of dollars or shares, except earnings per share amounts):

The table below provides a reconciliation of net income attributable to IDACORP for the three months and six months ended June 30, 2026, from the same periods in 2025 (items are in millions of dollars and are before related income tax impact unless otherwise noted):

Net Income - Second Quarter 2026

IDACORP's net income increased $6.8 million for the second quarter of 2026 compared with the second quarter of 2025, due primarily to higher net income at Idaho Power.

The net increase in retail revenues per MWh, excluding large contract customers, and net of power cost adjustment mechanisms, increased operating income by $27.5 million in the second quarter of 2026 compared with the second quarter of 2025. This benefit was due primarily to an overall increase in Idaho base rates, effective January 1, 2026, from the outcome of the 2025 Settlement Stipulation. For more information on the 2025 Settlement Stipulation, see Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2025 Annual Report.

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Customer growth, excluding large contract customers, and net of associated power supply costs and power cost adjustment mechanisms, increased operating income by $4.5 million in the second quarter of 2026 compared with the second quarter of 2025, as the number of Idaho Power customers grew by approximately 15,000, or 2.3 percent, during the twelve months ended June 30, 2026. Usage per retail customer, excluding large contract customers, and net of associated power supply costs and power cost adjustment mechanisms, was relatively consistent in the second quarter of 2026 compared with the second quarter of 2025, as a 2 percent decrease in usage per residential customer was mostly offset by an increase in usage per customer for irrigation customers. A decrease in the deferral of residential and small commercial customer revenues through the FCA mechanism positively affected retail revenues by $2.7 million.

Retail revenues from large contract customers, net of associated power supply costs and the PCA mechanism, increased operating income by $6.5 million in the second quarter of 2026 compared with the second quarter of 2025. This benefit was primarily due to an increase in usage per large contract customer, the overall increase in Idaho base rates effective January 1, 2026, and the addition of one new large contract effective June 1, 2026.

Other O&M expenses in the second quarter of 2026 were $11.7 million higher than the second quarter of 2025. This increase was primarily the result of previously deferred costs related to the conversion of generating units at the Jim Bridger plant from coal to natural gas, much of which is recovered in customer rates and reflected in revenues pursuant to the 2025 Settlement Stipulation. The amortization of previously deferred wildfire mitigation program expenses, which are also recovered in customer rates and reflected in revenues for both the Idaho and Oregon jurisdictions, also contributed to the increase from the second quarter of 2025.

Depreciation and amortization expense increased $5.2 million in the second quarter of 2026 compared with the second quarter of 2025, due primarily to an increase in plant-in-service.

Other changes in operating revenues and expenses, net, increased operating income by $6.3 million in the second quarter of 2026 compared with the second quarter of 2025, due primarily to a decrease in net power supply expenses that were not accrued for future refund in rates through Idaho Power's power cost adjustment mechanisms. Also contributing to the increase in other changes in operating revenues and expenses, net, was a decrease in property tax expense due to property tax legislative changes in Idaho.

Non-operating expense, net, increased $0.5 million in the second quarter of 2026 compared with the second quarter of 2025. Higher long-term debt balances led to an increase in interest expense, while lower interest-bearing cash investments led to a decrease in interest income. This increase was mostly offset by an increase in AFUDC in the second quarter of 2026 compared with the second quarter of 2025, as the average construction work in progress balance was higher.

The increase in income tax expense for the second quarter of 2026, compared with the second quarter of 2025, was primarily due to a decrease in add

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

In this MD&A section of this report, the general financial condition and results of operations for IDACORP and its subsidiaries and Idaho Power and its subsidiary are discussed. The discussion of IDACORP's and Idaho Power's general financial condition and results of operations for 2024 compared with 2023 can be found in their Annual Report on Form 10-K for the year ended December 31, 2024. See Part II - Item 7 - MD&A in that report for further information on the companies' prior period results of operations. While reading this MD&A, please refer to the accompanying consolidated financial statements of IDACORP and Idaho Power. Also refer to "Cautionary Note Regarding Forward-Looking Statements" and Part I - Item 1A - "Risk Factors" in this report for important information regarding forward-looking statements made in this MD&A section and elsewhere in this report.

INTRODUCTION

IDACORP is a holding company 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. On February 13, 2026, Idaho Power entered into a definitive agreement to sell its Oregon electric distribution business and associated distribution assets, as well as certain Oregon transmission assets, to OTEC. The closing of the transaction is subject to various conditions, including approvals of the OPUC, IPUC, and FERC. For further information regarding the proposed transaction, see Note 22 - "Sale of Oregon Assets" to the consolidated financial statements included in this report.

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 PURPA-qualifying hydropower generation projects.

EXECUTIVE OVERVIEW

IDACORP is committed to its focus on competitive total returns and generating long-term value for shareholders. IDACORP’s business strategy emphasizes Idaho Power as IDACORP’s core business, since Idaho Power’s regulated electric utility operations are the primary driver of IDACORP’s operating results. This strategy is described in Part I, Item 1 - "Business - Business Strategy" of this report. Examples of IDACORP's and Idaho Power's achievements, notable events, and milestones during 2025 include the following:

•IDACORP achieved net income growth for an eighteenth consecutive year in 2025.

•Idaho Power continues to focus on timely recovery of costs and earning a reasonable return on investment. In December 2025, the IPUC approved a settlement stipulation (2025 Settlement Stipulation) related to the Idaho general rate case that Idaho Power had filed in May 2025, with new rates effective January 1, 2026. The 2025 Settlement Stipulation is described more fully in Note 3 - "Regulatory Matters" to the consolidated financial statements included in this report and in "Regulatory Matters" in this MD&A.

•Idaho Power's customer count grew 2.3 percent in 2025 and Idaho Power's MWh sales to retail customers in 2025 were the highest in its history, surpassing the previous record set in 2024, reflecting continued growth in its service area.

•In 2025, Idaho Power’s reliability metrics continued to be among the best in company history, as Idaho Power provided uninterrupted service to its retail customers 99.97 percent of the time.

•Idaho Power’s residential and business customer satisfaction remain strong – in 2025, it was the highest ranked utility among peers in the segment for overall customer satisfaction in a third-party survey, and was the second highest in the segment for business customer satisfaction, and the second highest in the segment for residential customer satisfaction in a separate third-party survey.

•In September 2025, IDACORP's board of directors approved an increase in the regular quarterly cash dividend on IDACORP’s common stock from $0.86 per share to $0.88 per share, as a part of a 193 percent increase in quarterly dividends approved over the last fourteen years.

•To help meet growing capacity and energy needs in 2027 and beyond, Idaho Power entered into the following transactions in 2025:

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

◦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; and

◦an agreement to purchase the output of an 80 MW solar facility, with a scheduled online date of June 2027.

•During 2025, several key projects achieved notable milestones, underscoring significant progress towards Idaho Power addressing peak capacity and energy needs in 2025 and beyond, including the following:

◦Idaho Power commenced construction on the B2H transmission line, with an expected in-service date of late 2027;

◦Idaho Power began receiving power under a 20-year agreement to utilize storage capacity from a third-party 150 MW battery storage facility;

◦80 MW of company-owned battery storage facilities came online, with another 250 MW of company-owned battery storage commencing construction; and

◦Idaho Power filed a CPCN request with the IPUC for 167 MW of natural gas-fueled generating capacity next to the existing Bennett Mountain power plant, with an expected in-service date in 2028.

•In June 2025, Idaho Power filed with the Idaho and Oregon public utility commissions its 2025 IRP, its forecast of load and resources for the next 20 years, including the preferred portfolio of resources necessary to meet predicted demands.

•Idaho Power's estimate of capital expenditures from 2026 to 2030 is in the range of $6.3 billion to $7.2 billion. Part of the magnitude of capital expenditures is driven by Idaho Power's need to acquire additional power supply and transmission resources to meet growing demand.

Summary of 2025 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 years ended December 31, 2025, 2024, and 2023 (in thousands of dollars and shares, except earnings per share amounts):

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The table below provides a reconciliation of net income attributable to IDACORP for the year ended December 31, 2025, from the year ended December 31, 2024 (items are in millions of dollars and are before tax unless otherwise noted):

IDACORP's net income increased $34.3 million for 2025 compared with 2024, due primarily to higher net income at Idaho Power.

The net increase in retail revenues per MWh, net of power cost adjustment mechanisms, increased operating income by $49.6 million in 2025 compared with 2024. This benefit was primarily due 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 this report.

Idaho Power's customer growth of 2.3 percent added $25.2 million to Idaho Power's operating income in 2025 compared with 2024. Usage per retail customer, net of associated power supply costs and power cost adjustment and FCA mechanisms, decreased operating income by $6.5 million in 2025 compared with 2024. During 2025, usage per customer decreased for most customer classes. Milder temperatures during the year reduced the demand for both space heating and air conditioning. This decrease was partially offset by an increase in irrigation usage per customer, as lower precipitation during the summer led irrigation customers to run irrigation pumps more frequently. Partially offsetting the revenue impact of decreased usage per customer, a decrease in the deferral of residential and small commercial customer revenues through the FCA mechanism positively impacted retail revenues by $6.8 million.

Other O&M expenses in 2025 were $9.6 million higher than in 2024. This increase was primarily driven by inflationary pressures on labor-related costs, professional services, and increases in statutory fees assessed by regulators.

Depreciation and amortization expense increased $27.7 million in 2025 compared with 2024, due primarily to an increase in plant-in-service. Additionally, the start of operations at a leased battery storage facility in the second quarter of 2025 contributed modestly to the increase through amortization of a related right-of-use asset.

Other changes in operating revenues and expenses, net, decreased operating income by $3.8 million in 2025 compared with 2024, due primarily to the successful conclusion of multi-year litigation efforts challenging Idaho and Oregon property tax valuations, which resulted in refunds of prior year taxes being finalized in 2024, which did not reoccur in 2025. In addition, the timing of recording and adjusting regulatory accruals and deferrals positively impacted 2024 results, but did not reoccur in 2025. These decreases were partially offset by recovery of costs of a new finance lease through Idaho Power's power cost adjustment mechanism rates and a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's power cost adjustment mechanisms.

Non-operating expense, net, increased $22.8 million in 2025 compared with 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 increased interest expense compared with 2024. This

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