AVA - Earnings call transcript Q4 2019

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Operator

Welcome to the Q4 2019 Earnings Conference Call. My name is James, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session [Operator Instructions].

I'd now like to turn the call over to John Wilcox. begin. may you John,

John Wilcox

good fiscal And call. year and fourth to quarter and XXXX morning, James, welcome everyone. Avista's Thanks, earnings conference

earnings available Form morning XXXX at and released Our this pre-market avistacorp.com. XX-K and our on were both Web site are our

this External President CEO, Ryan Joining and Customer Kevin Affairs Executive and morning Dennis Thies; Mark Vice Avista and and Christie; Officer, Treasurer Chief Krasselt. President, CFO; are Principal President, Senior Vermillion; Corp me and Vice Vice Accounting Controller President, Officer,

would made statements some uncertainties, will assumptions, I change. remind the of that and to like everyone today to statements that which risks that be are subject forward-looking are involve

For is presentation, I differ results press our website. refer to actual to presented this various those available cause To XX-K today's begin call, could results materially XXXX, for the on please reference Form to recap financial in our which factors, discussed the would which from in to like release. today's

of per for fourth the Our $X.XX compared quarter of were the diluted XXXX fourth consolidated for to share XXXX. earnings quarter $X.XX

share full diluted were year, earnings compared year. XXXX, $X.XX consolidated $X.XX per the to For last for

Now, Dennis. I'll to the turn discussion over

Dennis Vermillion

and morning thanks, good Well, John everyone.

for Mark XXXX guidance later. and were forefront our our that a to were as further strong both our XXXX bit in we had on of achieve Financially, industry. little the provide half and as financial during we earnings of year details performance operational Our our being was while in upper goals able the will innovation on good a

of they energy better the deployment so in metering are more provide projects largest with our Operationally, Washington. this use. history, can capital that customers will infrastructure on data, with of the their advanced infrastructure real-time track manage we The development one of in

across and electric a in allow effectively will area. resources energy us to our XXXX, We Western share also our Imbalance integrate to renewable plans the expand into cost resource which additional mix generation ability to Market larger Energy more geographic join announced and

continued through to and on which zero cutting-edge be a new began of carbon zero In our When projects Spokane, the in are energy the system in partnership XXXX innovation McKinstry, for will our the two have Morris building, we Center XXXX, in XXX,XXX region. building is of along energy, We with catalyst Washington, square to industry innovation. and multiple with these a Scott completed energy eco-district. the centralized construction foot provide buildings

ultimate electricity electricity end Last with year, established target energy customers we the goals an by serving by XXXX. our carbon-free and XXXX carbon-neutral clean our with of of

million to years area to the $X also service youth small area communities support our over Foundation donated Avista support promote in communities to come. education the to success We prevent and homelessness, and

that We global by Ethical has our and the tremendous in communities and employees. been people a as were a proud advancing World's is a and Avista defining achievement, to Ethisphere, announce acknowledges one just XXXX it natural Companies business Avista as recognized with Most interacts business of the standards environment, how ethical and of yesterday This as leader practices.

we from rate built goals decision organizational We're of our general commissions and Idaho, employees mission-driven a reached cases. trust, receive our our in in our commitment are deliver which approvals with are rate corporate commitment our the ways recognition, achieving for in leadership and Avista's stakeholders. awaiting the Oregon the of cases all on ethical Washington actions general partial Commission this Our demonstrates values-based to to settlement respect. and in of the XXXX integrity and that XXXX, we agreement to value culture honored In with all the settlements for by on

remand case. for the on waiting the also decision XXXX We're

our we customers. and in current in that to on invest capital infrastructure Oregon provide our Idaho rates, and prudent services XXXX. are the to facilitate included investments recovery update and Looking continuing to and running maintain our To ahead, Washington, to great not timely expect capital our in we focused general a costs, cases file remain reliable of utility including energy rate

initiating consolidated approval X% to excluding $X.XX a of by range our of guidance, the which represents of original case our partial diluted earnings per share, from Commission. earnings our general guidance guidance This growth are Washington Hydro settlement of We XXXX the range with over effects the rate midpoint course, $X.XX assumes One. of

dividend by X.X% will this I earlier $X.XX this increased Lastly, over And to the this Board annual Mark. of share. per to month, dividend time, turn our an at presentation

Mark Thies

morning, everybody. Good Dennis. you, Thank

still are mathematically my a last last playoffs, about Central optimistic stated in but though. the am I for place. As Blackhawks Company I'm call, tough not In our in And very the road. alive stink, are we and optimistic. we quarter's Division, it's

And investment to expenditures, then related respect related In year. that to METALfx bump to the our the Hydro natural in we committed in necessary remain our that's XXXX, growth to the both businesses capital as benefited One related termination had mentioned, earnings we're electric. infrastructure. net gains half sale range big upper our and did was our investment utility strong non-regulated We guidance in primarily Dennis the receive of in capital on customer from fee of and early and the our earnings investing gas other With the to activity.

we continue AEL&P about $XXX expenditures XXXX. We we expect to to and With have and $XXX Avista $XX are about liquidity, of and for other $X respect $XX And expect due our XXXX in it's continue to with available of we sold we expect million Utilities be about XXXX to In bonds. XXXX, November we and million common to invest in million line businesses, XX-year million capital strong under to credit. through stock, have million. bonds liquidity about $XXX in million in our committed those bonds issued of in

our an structure. maturity $XXX capital expect debt approximately In capital long-term XXXX, planned fund we long-term $XX and million million of and to equity. maintain refinance, In order we $XX of million to issue expenditures to have debt appropriate

approval a rate are the we in the partial for range again of our initiating settlement per guidance Washington consolidated by As case diluted XXXX this be to And of earnings general Dennis assumes share. range Commission. to $X.XX $X.XX guidance our mentioned,

We XXXX we do our file experienced rate general XXXX in in Idaho and December effective lag during and X. that XXXX. we infrastructure an continue Washington, new to completed the through and rate fact we investment to rate electric-only with case continued due rates filed expect a regulatory didn't April, this case in In in case we

in that cases experiencing. we expect the to new been XX January rate were of also provide And XXXX year, in We have filed Oregon we those relief rates March. reducing lag those and start effective this and

from anticipate will the our annual more rate timing authorized we returns our XXXX X% of to have we original reduce to beyond XXXX, and following to we X% forward, to the XXXX lag to continue a try and forward midpoint those guidance. are X% And Going XXXX. of and again, XX% expect growth going continue to with regulatory growth then XXXX, we that earnings closely off an XXXX basing of by align to rate

rates based growth exclude XXXX, growth again but that original rates Hydro related the transaction. of the $X.XX midpoint necessary. are the These on earnings Our the really they One to are exclude

timely our and have jurisdictions. rate all appropriate We have relief to in of

XX XXXX guidance of of return the structural It's XXXX X.X% in and ROE. has now XX consistent our points Avista approximately reflects expected points. results lag. XXXX basis range basis range costs improved for approximately about and our That's unrecovered for and So for our guidance an Utilities

include Before not midpoint XXXX, we benefit any expect of does under ERM. of the expense Avista contribute and $X.XX range our in the guidance the Utilities to $X.XX to or

the customer, to a Our current expectation XX% $X.XX add XX% is for within band, ERM the which per sharing Company benefit is share. approximately expected

share. to $X.XX expect between $X.XX We per contribute AEL&P diluted and

normal and year. and normal hydroelectric Our other among variables, outlook for generation the precipitation assume Avista Utilities AEL&P for

our businesses to expect diluted earnings We share. $X.XX a $X.XX be between loss of per other of to

unusual operating conditions settlement again such the does as Our or and acquisitions items any guidance known. normal only effects until not or dispositions are transactions include includes

now to back John. I'll the turn call over

John Wilcox

would we the open like questions. for to now, call And

Operator

our begin Instructions]. now Q&A can We [Operator

Richard of Richard question first I Our Ciciarelli. from is from Bank America. Rich apologize --

Richard Ciciarelli

the and Congrats on guys. year, the quarter

question 'XX. utilities? quick the was curious top anything there specific of to Is what's looks had confidence X% increased driving Just increased of kind it you growth the like X% I the to a to there. X% just on, post X% rate from end the to

Dennis Vermillion

Well, earnings of come our most from again, the utilities.

So and really, and forward top at end going this our as rate we growth at have need was our in looked improvement customer in forecast believe our our it relief that it still jurisdictions. was fair the and warranted. base, forecast in each believe ability rate continued again, slight some is looked just we growth we as timely But our of and to we

beyond. that's And really added we So this for and that 'XX quarter.

Richard Ciciarelli

I What's guess of businesses. throughout on And the pointing and of a breakeven wanted to to base there I you're is outlook? continue touch to kind drag driving the a the been and other of there midpoint just improve has the that there guidance. expected factor now, historically, at the bit

Dennis Vermillion

them we Well, continue the from our earnings generate of businesses, invest expect as we income. some to expect had to then, do and factor had we driving other the investments and in for METALfx earnings do sale other XXXX, we that these we

be always the $X.XX invest it expect a is We We get for continues the of we continue, the to three to next but Richie and can this get we've would haven't But as beyond earnings five at as really the it as positive levels change, seen what start us those to out year. continue we mentioned -- forward. $X.XX generating that to share go forward the you the midpoint we in we expect do guidance be be we over that improvement given out we breakeven. performance expect to as you've investing, on years, would to a that in if investments a been

Operator

question Our Brian next Sidoti. of from is Russo

Brian Russo

in later-than-usual go given upcoming effect or you case targeting out when Is XXXX? that that the new filing? are will in or second for rate quarter would be that rates third filing April With X the pushed still into Washington quarter

Dennis Vermillion

is historically, and used they the have entire Brian, an process, Washington XX-month months. XX

be we So months XX when it will from filed.

Brian Russo

will looked can assume then be benchmark two revenue on, kind that $XX a like the what to $XX that just kind of and new in settled good to test rate increase the what request might million of year about historical year? upcoming as we million? file And you was this not totaled revenue case then Is

Dennis Vermillion

I is what think get best benchmark a to look we at the way to file.

every we're file to reevaluate for. going to have what We time

Idaho our first our deployment third case. expenses Oregon with we second and the capital So our in in where quarter half second Washington, quarter be in the year the are are that file here and we we will of in then, in evaluating or then, constantly and

to going be. one second you're Brian, half I year best, that's second to what the question. I think going apologize, So And prior-year the your have a of use as it's forgot wouldn't you I

Brian Russo

Is year? it test

Dennis Vermillion

Yes, we might will the when year, on test year if move be two or forward file later quarter at that we XXXX, depending least file. a we the the in

Brian Russo

And in AMI that this be mentioned for upcoming deferral rate the XX-K, case? in that recovery will is included

Kevin Christie

Brian, case the this can't this analyzing and say sure though. time, Christie. this that We're or in will will we true. be still at either for next is It Kevin point case the be

Brian Russo

on and where close would rate XX% compare XX% how one XX% last the the XXXX with year-end last equity for, be I file then debt? to to capitalization And you ended optimal that case what at that case, was at think, does look you the to

Dennis Vermillion

jurisdictional we equity we issue close. where Washington When do regulated the times. in Well, of not close are structure at. capital that's we're be way that maintain the structure that looking consolidated again on, very look XX.X% but the at to currently gets may structure, we jurisdictional exactly we very on approved That's our at the are all at cap by commission. assuming again why We is cap basis it you're we the settlement

Brian Russo

what $XX but then your refund change the also, top which that there. charge trying what equity in of potential there I'm the you a million, are to for the of remand such to And end get million. relative might how for on the And any guys and outcome scenarios sense 'XX, is wide a just $X.X a range needs K took

Dennis Vermillion

know. a is have parties Well, beliefs I the yes, the commission wide is decides on mean, when going it because the have we're our they we'll what in case. each at, on other that, When or would we be they in options to range diverse We our to one-time favor, at a issues are different then could That's look that don't our also equity the in and would they they that. customers what We'll that would very be favor needs to to number gets could look one-time. evaluate look recorded. of evaluate is. determine selected number parties because how what that's on somewhere have decide decision is between. We'll And their and believe with to our a commission there would evaluate reasonable respect returned that then, whatever we've We adjustment. that's needs at if and when are than the a what there based

Brian Russo

obviously, And then, but low can on the on for for midpoint driven balance, outlook XX% be you're comment a XX%. current guidance or is conditions? the that forecasting you to XXXX, the the to and/or by Is zero in gas prices a hydro

Dennis Vermillion

our expect the supply in supply based our then, Washington. that's Well, our amount to that power rates costs on what And forecast of be. determined we in of costs embedded power do are

with some hydro we we we're combination, it slightly hydro, XXX% primarily are favorable we and basins, but bit gas our that's a melt right how but early, little about conditions. still comes do then normal it is, in It's prices, snowpack but it a lower it's now so now XXX% yes, are. off our is expect right right. recognized the where is expectation, the where depends in We're different where So, about

Brian Russo

on then Difficulty] And the [Technical …

Dennis Vermillion

Brian, a breaking Difficulty] bit are speaker? you do little have you [Technical on up

Brian Russo

you on the headset. hear Can now? I'm No, me

Dennis Vermillion

A little better…

Brian Russo

that guidance. Difficulty] guidance, Yes, the just the original of on Wwhat the base? the midpoint XXXX was [Technical

Mark Thies

$X.XX. was to the $X.XX $X.XX midpoint,

to Hydro Now so that's take excluded the -- you $X, out got One.

$X.XX it being the midpoint. Hydro $X.XX, was to fee, termination excluding One the $X.XX So

Brian Russo

decision participate your PPA in outlook the change that your EIM, further anymore might integrated roll-offs. resource on color planning And to and how

in the think I mid mid-XX XXs. -- in

Dennis Vermillion

This is Dennis.

helps EIM allow both better join at renewables of as our as over to the costs we're the first area. I and would to system XXXX. As to onto I part mentioned, will the that us hard larger market expect and renewables clean the us move we work plan internally we access mentioned, to in future our Having existing we to forward meet our add it And goals. electricity integrate that spread

you're larger in So the of are the in like we're of the members with West are if market, or or that players on either track us most familiar process joining.

on see so come our week to that that short later and manage what We'll online. Idaho, in believe integrate will that I available meet IRP, our be our enhance actually are system So ability moving and plans we think only the and our manage website you'll filing that to cost forward to our latest forward. going new renewables be this will in able our be our both the term and goals long will

Brian Russo

just Commission comments paper work that? CX any by did the Washington policy lastly, on statement legislation, then And on issued

Dennis Vermillion

could have but how that is helps in policy Well, point. all digesting we're mechanism indicates work Obviously, we but this think forward, details at optimistic through work, to are statement. it's the that read how constructive utilities the to opportunity still us going a the us commission an the that plans our and multi-year a early devils rate giving

Operator

of question Ellinghaus Siebert next from is Our Williams. Chris

Chris Ellinghaus

you the what's you that? color in income. the Mark, about investment improvement to goal that moving are sort of what a today us Can other of and little you bit you're expecting $X.XX any that give $X.XX for looking on over sort timeframe talked

Mark Thies

those with have investments investments again, we Three years and continue to believe with that. investments, and some prudent I income some to expect to make five we

to some period. five again do towards the to five $X.XX Impact were $XX $X.XX were three end both out see and share to next joined per of that. commitments, expect we we So that get income Fund amount started And Number specific Number Partners We I over as years to in the we growing a years out to Those Fund growth I. the million through come we II. earnings just all some Fund Energy investments, of three

and of not make we that slight in get believe that us District will that the I and earnings overall. those money because I'm to expect Fund have believe investments our don't will start will to to we We and making at invest we University And improvement but continue numbers. II, innovation some will the case. believe specifics, giving other continue in we we specifics some we're the have you and again, that with that be

Chris Ellinghaus

of any year? you make this you filings your us Can timing general give color on to when expect

Dennis Vermillion

Well, we Washington. in plans analyzing We're said can we first put details second how for and of second third quarter to Washington, as half the That's the all Oregon, year as specific quarter of and at policy the for us statement possibilities Idaho. multi-year affects any and allowed or looking get. for

go -- that that our take case we So in file. we policy get also to rate jurisdiction, and each by about and individually we're to are, make to talk with when to and sure get what rate their have the make meet we try before and sure commissioners with once want not we're a over cases is we ability commissions our practice, adjudicated with staff we to thinking we once that as an discuss time our we then plans

So that we have happens, will details until of don't file. of all when the exactly we

Chris Ellinghaus

I missed part. that must have

Dennis Vermillion

we number uncertainty consistent you've rate go commission or far the our to you the as do for might see X. ATM and by you will a what that might rates on -- in to to do? terms basis have using wait the want general the be that effect again, good order do into goes Well, planning expect are remand their for case April year, what of on remand you obviously, as a Are more equity the got

So the around there, we think may. commission

all of get that, these no We have in to orders. try insight may

there the We of them have same out a time. at together couple

We'll will we'll because then and do, the bills. that one change waited is out what have that customer is get we will have to our go We do And begin. if don't case, just But need they more they wait. pondering we we that, forward. even equity. if find So if to our

ATM to the have We that to if additional will tell and us will you equities, we at significant begin get time. causes number use and that's a we

Chris Ellinghaus

Can we number? equity assume that the based guidance on your your on your and remand best is proposal expectation

Dennis Vermillion

booked number. that X.X% we It's on our just based already 'XX. The in

really assumed forward any to We come We make don't an other ability not out. anything have that they going have assumption.

Chris Ellinghaus

operating 'XX from on haven't I what's it but the in the for yet, seen XX-K METALfx 'XX to delta earnings?

Mark Thies

METALfx is is want a I an be $X.XX 'XX. gain say not 'XX. slightly estimate, There might in in I to If was off there.

a -- that that was gain and It to they were our in So recall, guidance wasn't if about $X the I the sale, earnings earnings. be was $X.XX may a was have I but back. a level significant in 'XX. go I'd that not earnings, what they're their wasn't prior but exact, operating year. year close. for diluted 'XX, mean not I'm to it It's I I million know about

Dennis Vermillion

They a were is thing. good positive earnings, which

Chris Ellinghaus

to investment, income, $X.XX back to Investment? based Impact Partners Energy that going the And is to on first just other the $X.XX

Mark Thies

all three No, the not make investment, our continue money. go as five to that, forward. to get to some just invest we next We're we making in to investments earnings the not and out it's of of going expect Chris, years, and

Chris Ellinghaus

period well. incremental want investments that I to make No, I includes understand, as that over sure five-year

Dennis Vermillion

does. It

Chris Ellinghaus

roughly of $XX At million that number? kind

Mark Thies

to $XX yes. million, Somewhere million $XX

Operator

Avon. Our next Murti question from Vedula of

Vedula Murti

recall? always structural guide, lag you basis basis you and XX XX the of that two, that's lag I in structural -- Can I to outside think XXXX I have. that points the that the you of, still just indicated points double want has I hear terms check is correctly lag

Dennis Vermillion

and Yes, yes.

Operator

is question next from Covello ExodusPoint. of Our Phil

Phil Covello

already, of exhaustive, answered and out step my Thanks. pretty I'll the actually queue. Brian still Chris questions so

Operator

again. question a Russo And from Brian

Brian Russo

can dividend quickly, you your what us real is? policy remind Just

Mark Thies

dividend the stay that that back to to grow we range to into range try high forward, of X% into, point, in the where as to we in earnings and back we to with grow expect X% our get X% to earnings we range in be XX% grow we're as we at tend this we slightly Well, XX% historically. have our XX% but as

to grew our $X.XX. as just we year X.X% mentioned, dividend Dennis this we just about to So get

Operator

Instructions] more questions. John, no it [Operator looks like there's And

John Wilcox

want certainly in today. Okay. us I day. your our joining everyone to a interest great thank for Company. We appreciate Have

Operator

Thank concludes This Thank and you, ladies participating. conference. our for you gentlemen.

You may now disconnect.

Avista (AVA) 26 Feb 202019 Q4 Earnings call transcript