AVA - Earnings call transcript Q3 2021

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Operator

Good day, and thank you for standing by. Welcome to the Avista Corporation Q3 2021 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Stacey Wenz. Please go ahead.

Stacey Wenz

you. Thank and Third everyone, Conference XXXX to Call. welcome morning, Quarter Avista’s Earnings Good introduction, with have working way I By of been accounting in group. Avista our XXXX, since first over I’m working to of coming John be excited the all and taking in very for look to with my year. earnings you forward call, I from

were released and Our this earnings are available morning pre-market on our website.

Principal to risks, statements assumptions, Accounting some forward-looking Treasurer, Officer, that and Vice are Ryan everyone the Avista involve change. Krasselt. Christie; President, that Dennis and Customer I Vice uncertainties, President, CEO, President, Kevin are would Corp., of today Vermillion; Senior Thies; statements remind Affairs and morning like and President which will this and Mark are me made be Controller Chief Joining to that Officer, and subject External CFO, Executive Vice

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

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

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

over Dennis. discussion to turn the Now I’ll

Dennis Vermillion

up the us. Stacey, welcome team. for and for to team you, thank heading IR Well, the Thanks

too. As call she’s this role, be and at with to so you and in heard, her is have happy this Stacey’s first EEI to just today, going we’re us

bit. know to meet Stacey a you’ll So a and Stacey chance have get will -- to little everybody

that looks morning more to conversation we this it’s X.X unfortunately, still since And a this pandemic I’d start So years go. like good to by everyone. started like we been have ways morning, journey. than our acknowledging

challenges as forward. face doubt, we We will, move no more

continue challenge. ready the to concern I’m of our and whatever and of that we’re so demonstrated no region employees, and and Our resiliency be this, just the we the bring. they that And the resolve for and flexibility And and rebuilding matter proud may recovering for customers team. takes all the future proud and through then from our I’m I just it fantastic. have they’ve we’re and our communities future nation, displayed. the so confident brings, for extremely they’ve grateful we commitment what just team have to the have and what our manage that really

results at Now, let me Avista to our earnings Utilities. turn

primarily full had we’ve taxes. in our with remain due the to guidance. XXXX, produced to timing at a so earnings in track pleased meet and AEL&P, exceeding expectations. year great of the we year above expectations are recognition Our far, income our They significant other And earnings of were And gains the investments. over on their business,

respectively. We to per cases Washington continue regards forward. third September to diluted and X quarter, the concluded and contribute $X.XX to X, $X.XX with to general regulatory expect effective these during investments going Idaho rates rate we October matters our In share

serves immediately We safe with both our and with reliable infrastructure are the in us affordable and offers of investments support and opportunity provide customer customers continue that our pleased energy Commissions’ to to ongoing bills. without our the customers impacting

filed in case general of did not we through certain our get rate general Oregon. operating recovery get Washington we October, rate cases. did In we However, expenses -- the

will we quarter file tax in seek X-year period Washington, and will period the Commission base increase we gas. offset with earn and expect investments for its electric with law, in the new that customer We be general an allowed of in resulting revenues case be to the rate the bills. utility have proposed They expected rate cases end same our both in the amount, XXXX, of multi-year customer of effort expenses credits to rates impact Early rate in plans the the a by included first were first filings, to in in fully rate Plan include Energy the file no the Clean and to return plan October. Implementation through capital all In regulatory under other we to operating required as XXXX. Washington in

X equitable Our under specific tab, established plan website there is available interest map Clean or there’s sets actions you the plan goals provides a out. to to Future energy the the if by and good show the Energy Transformation road be progress Energy that clean a achieving over have summary clean we’re CETA. the for making course in next and transition And on for that years an Clean to taken towards checking our Act executive energy

for on per to $X.XX per earnings, share consolidated XXXX. back our confirming and are $X.XX Focusing diluted for XXXX, guidance XXXX share XXXX we earnings and $X.XX $X.XX of to diluted for

share We $X.XX XXXX to $X.XX diluted to share. guidance per by of in are range consolidated our per $X.XX lowering diluted a

So this with I’ll turn that, over to Mark. presentation

Mark Thies

the welcome talking forward Thank company, which our everyone, well about. Stacey you, about morning, Good to team. EEI seeing and look Dennis. as everybody We to and down we’re at excited

say at a For reference, only us, game quarter But has year. Blackhawks this third tough won been the a on quarter game Avista, had winning start. that for We’ve a streak. because are for it’s us. everybody’s I one good they only the can the

be and we really to fourth performance the to for a compared we Avista we’ve energy As recovery the it compared years. to million have And normal ERM, for The a the year. offset year-to-date, to full expect $X.XX of to an of benefit Utilities. we expect record this $X.X Avista quarter the income for in benefit we had compared we the $X.X is Utilities million. year it mechanism of taxes a expense prior be quarter-over-quarter, of But to expense timing the in and a a Washington last pre-tax look quarter such $X.XX year how $X.XX, due mentioned, to share $X.X up, income in expected taxes, we in the we in compared outperformance primarily But is for third at and negative back $X.XX. recognized negative to quarter, the currently when prior to million a the that

just So in slight a within over though. big it’s our recognition quarter the expectations we really a move and had the year, year, in the

of maintain currently as mentioned, spend XXXX continue Utilities capital necessary For to and expenditures, about Avista to infrastructure. stock we to in long-term Dennis debt $XXX been safe, $XXX to issued September. and to million and committed To system to to provide debt customer capital, that has customers. support XXXX. $XXX our expect issued issue energy fund in $XX We reliable issued. the approximately million continue that already we the $XX through ‘XX also been our million investing million and expect to equity be has ‘XX in common $XX and of million We the utility in million of capital, our in growth,

we will a capital $XXX is million prudent maturity million expect debt, capital really which which million fund issue expenditures also common us to During of and stock, and our covering of $XX help maintain long-term XXXX, then structure. a $XXX

our ‘XX. at we ‘XX confirming there And mentioned, a lowering ‘XX, ‘XX few factors. for look we’re it, and as Dennis are we As guidance, are but lowering

but We fair capital, rate to our the way, the fair we’ll Idaho As and believe order We got believe didn’t we be recover. had we rate be able had order recovery. Washington all questions we next had a he mentioned in we we that that that answer and projects earlier, allowed expenses believe big we our didn’t but we in able we were our case, in on in our Kevin case Washington, case. get will to a -- in some many operating so not

the the capital we period in timing to expect and mentioned, our end expect in get case file the if and of expenses first to be -- completed rate quarter works. we We our able, our operating of for be as ‘XX we’ll case next we in that the And Dennis to early normal believe per due Avista ‘XX, by the of respect earlier we range my down expect ‘XX, in range I share. comments, be $X.XX. rate to case. expect to primarily guidance Avista the diluted contribute Utilities for we to mentioned Avista about -- the expect impact $X.XX in of our as With ERM, $X.XX to And that at to

bottom range Avista the be of Utilities. at expect We near the to

Our which band, current surcharge is to expectation is expected position by $X.XX. company a earnings in XX% be in customer/XX% decrease to the

top Dennis mentioned, In to we and just end range. investing above for end the significant expect of different had, in We number results, the been we several addition, strong performance above different of be of other as gains. to with be the investments. We’ve our we’ve range our not had number that of had respect years. investments positives, investments our A one, a our to based on year-to-date the top investments, last expect

add So range their that of XXXX, the with middle for be negative our matching near when you impact we the expectations, the expect including AEL&P together ERM. of to

include be to to a and those and in new in due required costs, costs, it seen we law, recovery Dennis our period labor of increases planned expect as by rate included the the file For seek certain other guidance allow have mentioned, to to costs really do capital are inflationary the return and and our to allowed operating lowering -- lower projected quarter we IT ‘XX, XXXX. impacting to all us earn costs. of certain we the costs. in our costs XXXX, and of our expenses general Early our Colstrip-related will case, pressures will, as multi-year And by plan for opportunity we’ve labor insurance first as

as other call any all As not jurisdictions of like to things, or to now. they’re the in always, turn our non-recurring certain. normal unusual guidance items does our relief appropriate operating among include until and conditions known as Stacey timely rate and well I’d assumes, back and

Stacey Wenz

Mark. Thanks,

for questions. we open will the Now, call

Operator

Bank first [Operator the line of comes question of Instructions] from Kody of Clark America. Your

Kody Clark

growth So large confidence step-up in is rates in implying first, gives your with which cost increasing backdrop. supply just You’re wondering guidance? XX% year-over-year, power XXXX reiterating what this paired a you

color provide rate to So minus specific would assuming Or assuming what you helpful. would just sort kind of Any you allowed structural ROE you’re be get some there your relief are of lag? in ‘XX? assumptions can on you

Kevin Christie

effective we do X-year do will we from know the the the if effective in And us will X-year, capital in date. the case through we the which rate have rate period, XXXX, bring case. a move that up requirement. fact from But rate XXXX with This the for to point the as we Kevin important to we’re, question. best the is Commission we consider it’s with to formulating saying we’re them case out how visiting still that I’ll formulate But and as of Thanks we forward. the by course, date start consulting include all to period, file Christie.

might include you up year commission rate are effective period. of that that spent that X years well. the methodology to what into plan we the a ‘XX, As absolutely spend periods take capture allow have properly rate the that approach worked and with legislation again, X the and we formulate our for spend from to period we effective our capital first case. recall expect or And of ‘XX, and still analyzing or through us rate that. we’re rate through we X-year expenses in including at the to all move file the will, advantage as in And from also legislation to those to subsequent legislation rate the on election, the an will will parties and within other We’ll we the

our the So you last the at case, us Mark the leaning are look back as good legislation. highlighted. Commission we for We capital, gives this support offered it if think on And opportunity.

optimize And the with we very that, as I possible very legislation. so, plan Commission it’s or will that along think very the with we should utilize that rephrase come likely. viable, it’s us

Kody Clark

step case? Okay. be operating of implied is some assuming so But that with that disallowed clear, expenses in to up? this that that were the Is recovery rate is what

Kevin Christie

up offer bit. disallowed. a that were -- me me expenses placed not into weren’t rates let They The yet. clear Let

rates into forward. the placed just weren’t we that look as items well expenses as described as the in bring to expect We I

Kody Clark

Kevin. Thanks, Okay.

Mark Thies

thing that. to one Kody, add to

that thing at. will little clarity. one add what for file, obviously, you we’re Just When which size to will a and we looking to sense, be in XXXX, that give of a early

you’ll of with we working And prior expect a Washington to But this expect an ‘XX, by of to have the we’re mentioned, the So we we we’re normal to so Well, case. it, order we a it. give XX the it and adjudication a end timing going By out will ‘XX, will If end or as early that. number number through too. months ‘XX, go of you there, clear Kevin on it in of expect it. in come sense. have a file, not

Kody Clark

it. And of forward. other $X.XX $X.XX you stated Got expect Okay. to that going you then contribution

I assets, but from can know I previously you increasing breakeven it in to over gain up, was think you other this rate is some if be contemplated for remind ‘XX? $X.XX you’re sale remember change that clear, this commentary. for run the us I of that and ‘XX are would and prior guidance embedding consolidated XXXX what assuming was clear time. you to a could just previously that seem to great. And But contribution? given be

Mark Thies

of expect we I $X.XX to I this We I statement. have started in I $X.XX have so -- be -- to exact the to earnings. remember years, time said X said it X don’t

that period in We’re now.

$X.XX we investments -- produce other $X.XX on those are We’ve been last to So earnings. to $XX number million it’s investments earnings. and starting and of be category, different XX the between between mature been and years, investments million and I’ll in a say, making the to several expect over $XX and in

expect forward. to investments continue to as we We make go similar

we so, those have to And we investments, expect do make -- expect do when earnings. we

expectation our going it’s -- I a don’t So it’s $X.XX -- earnings. in not to change. is forward believe $X.XX It’s

positive, cycle no of better, and question the is not case. outperformance. to now. have significantly be the through This investments done that’s year. There’s always Those moving was which just we’re this going We’re there timing, an but a

have to our to we businesses. for those continue capital on expectation a want return in reasonable as we capital So deploy

Kody Clark

‘XX? Thank And you as driver it Can was just sneak can you. What one, of same? here on the Okay. last the in the kind I CapEx equity if in there. touch needs increased stayed

Mark Thies

but is next we’ve we’re appropriate larger Oregon, slightly XX.X% in in it’s our and Not a currently regulatory, to separate, under-equitized in debt. equity case case which not material significantly a Alaska and structure XX-XX. overly it’s -- allowed, we’re this what’s And we to want been that. to Washington, be overall. file Idaho and from to expecting XX.X% capital multiyear, And is Well, and in our

equity to we our to have So to slightly did increase get that level.

currently the equity would we have our but a we get cap allowed structure we gives that, to structure. and we’re to to just us get allow. period, when rate match So case trying where cap -- having our If are our effective we Commission are additional to to higher, and our our raise

past. So it’s slightly higher than it has been in the

Operator

[Operator of Instructions] of Ciciarelli comes from next question line Your Richie Schonfeld. the

Richie Ciciarelli

Just following Kody’s question. up on

your given business, Just what that be this does expecting relative guess, to Utility to imply other growth per that for year. I the $X.XX guidance year-over-year year? to you’re $X.XX

Mark Thies

expect out. haven’t our We’ll in our come out. we file case Washington next to Well, come When we first case, early the quarter. Rich, file we

we’ve call, next our guidance. in the So typically given segment

call. we and February our first follow the in expect guidance that to history, with we’ll out in So our quarter, segment come

we’ve back -- earning you case, with of guidance We’ll color how consolidated to out we’re to get sense that allowed we a more segment trying then. haven’t ‘XX once file give given come we’ll forward and return. to we So our for our have guidance going

Richie Ciciarelli

Okay. clear, then return your expecting you’re you are just Thanks. And be ‘XX? to to in earn -- still allowed

Mark Thies

Yes.

Richie Ciciarelli

that Okay. a ‘XX And from terms I what of imply step-up rates in to does ‘XX? in guess,

Mark Thies

have in number for. offset. out our ask sense some come we we commission we’re case, what rate haven’t file with We a that we a doesn’t When our rate everything always Again, filing allow you’ll for. The have case. of

period to however But offset. the Kevin calling rate get we’re capital earlier, some the expenses or said need effective the -- rate that to like plan period it. and have we’ll need We we’ll

structural Kody our is our me. we’ve of gets earning So return. exact The give XX%, it under -- you going in but back front the earnings, number increase to significant I see increase around said, That in that number. per as XX%, an But a not absent is to I’m a been over absent you earning. number in earnings us share, right have allowed don’t lag

Operator

Please [Operator no at questions further There time. are this continue. audio Instructions]

Stacey Wenz

today. Have thank day. to to a of everyone we for joining you in a seeing number forward and great want appreciate your look EEI. our company, interest I us We at

Operator

today’s you call. participating. concludes This conference Thank for

You disconnect. may now

Avista (AVA) 3 Nov 212021 Q3 Earnings call transcript