Q2 2024 Avista Corp Earnings Call

Operator: Good day, and thank you for standing by. Welcome to the Avista Corporation Q2 2024 Earnings Conference Call. At this time, the participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Stacey Wenz, Investor Relations Manager. Please go ahead.

Operator: Good day, and thank you for standing by.

Operator: Welcome to the Avista Corporation Q2 2024 earnings conference call. At this time, our participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star 11 on your telephone. You would then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker Change: Good day, and thank you for standing by. Welcome to the Avista Corporation Q2 2024 earnings conference call. At this time, our participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session.

Speaker Change: To ask a question during this session, you will need to press star one, one on your telephone. You would then hear an automated message advising your hand is raised.

Speaker Change: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Operator: I would now like to hand a conference over to you for a speaker today.

Stacey Wenz: Stacey Wenz, investor-relations manager, please go ahead. Good morning. Welcome to Avista's second quarter 2024 earnings conference call. Our earnings and second quarter Form 10-Q were released pre-market this morning. You can find both on our website.

Speaker Change: I would now like to hand the conference over to your first speaker today, Stacey Wenz, Investor Relations Manager. Please go ahead.

Stacey Wenz: Good morning. Welcome to Avista's second quarter 2024 earnings conference call. Our earnings and second quarter Form 10-Q were released pre-market this morning. You can find both on our website. Joining me this morning are Avista Corp. CEO, Dennis Vermillion, President and COO, Heather Rosentrater, Senior Vice President, CFO, Treasurer, and Regulatory Affairs Officer, Kevin Christie, and Vice President, Controller, and Principal Accounting Officer, Ryan Crossell

Stacey Wenz: Good morning. Welcome to Avista's second quarter 2024 earnings conference call. Our earnings and second quarter Form 10-Q were released pre-market this morning. You can find both on our website.

Stacey Wenz: Joining me this morning are Avista Corp CEO, Dennis Vermillion, President and COO, Heather Rosentrater. Senior Vice President, CFO, Treasurer, and Regulatory Affairs Officer, Kevin Christie, and Vice President, Controller, and Principal Accounting Officer, Ryan Krassel. Today, we will make certain statements that are forward looking. These involve assumptions, risks, and uncertainties, which are subject to change. Various factors could cause actual results to differ materially from the expectations we discussed in today's call.

Speaker Change: Joining me this morning are Avista Corp CEO Dennis Vermillion, President and COO Heather Rosentrater,

Speaker Change: Senior Vice President, CFO , Treasurer, and Regulatory Affairs Officer, Kevin Christie, and Vice President, Controller, and Principal Accounting Officer, Ryan Krasil.

Stacey Wenz: Today, we will make certain statements that are forward-looking. These involve assumptions, risks, and uncertainties, which are subject to change. Various factors could cause actual results to differ materially from the expectations we discussed in today's call. Please refer to our Form 10-K for 2023 and our Form 10-Q for the second quarter of 2024, which are available on our website for a full discussion of these risk factors. I'll begin with a recap of the financial results presented in today's press release. Our consolidated earnings for the second quarter of 2024 were $0.29 per diluted share compared to $0.23 for the second quarter of 2023. Year-to-date, consolidated earnings were $1.20 per diluted share compared to $0.96 last year.

Speaker Change: Today we will make certain statements that are forward-looking. These involve assumptions, risks, and uncertainties which are subject to change.

Speaker Change: Various factors could cause actual results to differ materially from the expectations we discussed in today's call.

Stacey Wenz: Please refer to our Form 10-K for 2023 and our Form 10-Q for the second quarter of 2024, which are available on our website for a full discussion of these risk factors. I'll begin with a recap of the financial results presented in today's press release. Our consolidated earnings for the second quarter of 2024 were 29 cents per diluted share compared to 23 cents for the second quarter of 2023. Year to date, consolidated earnings were $1.20 per diluted share compared to 96 cents last year.

Speaker Change: Please refer to our Form 10-K for 2023 and our Form 10-Q for the second quarter of 2024 which are available on our website for a full discussion of these risk factors.

Speaker Change: I'll begin with a recap of the financial results presented in today's press release.

Dennis Vermillion: Now, I'll turn the call over to Dennis.

Dennis Vermillion: Now I'll turn the call over to Dennis. Well, thanks, Dacey, and good morning, everyone. Wherever you're listening to this call, I sure hope you're having a good summer. It's certainly been a warm one around here recently. For the second quarter of this, utilities delivered earnings in line with our expectations. Our financial results for the quarter and the year and year to date speak to our core strength, our utility operations. Because of the work we do every day, we're positioned well to deliver on our commitments to our customers and our shareholders. We're making the right investments in our infrastructure through enhanced reliability.

Dennis Vermillion: Well, thanks, Stacey, and good morning, everyone. Wherever you're listening to this call, I sure hope you're having a good summer. It's certainly been a warm one around here recently.

Speaker Change: Now, I'll turn the call over to Dennis.

Dennis Vermillion: For the second quarter, Avista Utilities delivered earnings in line with our expectations. Our financial results for the quarter and year to date speak to our core strength, our utility operations. Because of the work we do every day, we're positioned well to deliver on our commitments to our customers and our shareholders. We're making the right investments in our infrastructure to enhance reliability. We're mitigating risk through the execution of our wildfire mitigation plan, and we're keeping our focus on achieving our clean energy goals. And Heather is going to have some more on these in a moment.

Dennis Vermillion: Because of the work we do every day, we're positioned well to deliver on our commitments to our customers and our shareholders.

Dennis Vermillion: We're mitigating risk through execution of our wildfire mitigation plan.

Dennis Vermillion: We're making the right investments in our infrastructure to enhance reliability. We're mitigating risk through execution of our wildfire mitigation plan, and we're keeping our focus on achieving our clean energy goals. And Heather's going to have some more on these in a moment.

Dennis Vermillion: And we're keeping our focus on achieving our clean energy goals, and Heather is going to have some more on these in a moment.

Dennis Vermillion: In June, we celebrated the 40th anniversary of our Kettle Falls biomass generating station. This award-winning power plant produces energy from wood waste. When we brought the facility online, it was the first utility-owned generating station of its kind in the United States. The Kettle Falls facility embodies our innovative spirit and our commitment to stewardship of the environment, while contributing to our mission of providing reliable, affordable energy. It's a showcase of the exceptional partnerships established four decades ago between Avista, the timber industry, and the communities we serve.

Dennis Vermillion: In June, we celebrated the 40th anniversary of our Kettle Falls biomass generating station. This award-winning power plant produces energy from wood waste. When we brought the facility online, it was the first utility-owned generating station of its kind in the United States. The Kettle Falls Facility embodies our innovative spirit and our commitment to stewardship of the environment while contributing to our mission of providing reliable, affordable energy. It's a showcase of the exceptional partnerships established four decades ago between Avista, the timber industry, and the communities we serve.

Heather Rosentrater: In June , we celebrated the 40th anniversary of our Kettle Falls biomass generating station.

Heather Rosentrater: This award-winning power plant produces energy from wood waste.

Heather Rosentrater: When we brought the facility online, it was the first utility-owned generating station of its kind in the United States. The Kettle Falls facility embodies our innovative spirit and our commitment to stewardship of the environment while contributing to our mission of providing reliable, affordable energy.

Dennis Vermillion: Around the same time as Kettle Falls Coal Strip, the coal-fired generating plant in eastern Montana was brought online. And in 2023, as you know, we entered into an agreement to transfer our interest in the plant to Northwestern. We hand over the keys to Northwestern, so to speak, at midnight on December 31st, 2025. And that transaction remains on track in light of the recent deal between Puget Sound Energy and Northwestern. Coal Strip's exit from our generation portfolio is included in our ongoing Washington general rate case, one of the many important considerations impacting power supply costs through the proposed rate effective period.

Dennis Vermillion: Around the same time as Kettle Falls, Colstrip, the coal-fired generating plant in eastern Montana was brought online. And in 2023, as you know, we entered into an agreement to transfer our interest in the plant to Northwestern. We'd be handing over the keys to Northwestern, so to speak, at midnight on December 31, 2025. And that transaction remains on track in light of the recent deal between Pigeon Sound Energy and Northwestern. Colstrip's exit from our generation portfolio was included in our ongoing Washington General Rake case. One of the many important considerations impacting power supply costs through the proposed rate effective period.

Heather Rosentrater: And in 2023, as you know, we entered into an agreement to transfer our interest in the plant to Northwestern.

Heather Rosentrater: We hand over the keys to Northwestern, so to speak, at midnight on December 31st, 2025, and that transaction remains on track in light of the recent deal between Puget Sound Energy and Northwestern.

Heather Rosentrater: Colstrip's exit from our Generation Portfolio is included in our ongoing Washington General Rate Case, one of the many important considerations impacting power supply costs through the proposed rate effective period. And Kevin will have a bit more on power supply in his portion of the call.

Dennis Vermillion: And Kevin will have a bit more on power supply in his portion of the call. We continue to be on track to meet our consolidated earnings targets for 2024. I'm proud of the diligence of our team as we work to achieve these results. Today, we are confirming our consolidated earnings guidance of $2.36 to $2.56 per diluted share for 2024.

Dennis Vermillion: And Kevin will have a bit more on power supply in his portion of the call. We continue to be on track to meet our consolidated earnings targets for 2024. I'm proud of the diligence of our team as we work to achieve these results. Today, we are confirming our consolidated earnings guidance of $2.36 to $2.56 per diluted share for 2024. Now, I'll turn the call over to Heather.

Kevin: We continue to be on track to meet our consolidated earnings targets for 2024. I'm proud of the diligence of our team as we work to achieve these results.

Heather Rosentrater: Now, I'll turn the call over to Heather. Thank you, Dennis. I look forward to sharing some updates about our operations. As Dennis said, I hope everyone is enjoying the summer. It's definitely been warm and dry out here. In fact, July was the hottest month on record for the SOCAN area and many other locations nearby. We set a record for having 20 straight days above 90 degrees. The fact that it's been hot and dry underscores the importance of our wildfire mitigation efforts. We're making great progress towards this year's goals for good hardening and vegetation management, as well as completing our survey of 100 percent of identified risk trees, something we do every year.

Heather Rosentrater: Thank you, Dennis. I look forward to sharing some updates about our operations. As Dennis said, I hope everyone is enjoying the summer. It's definitely been warm and dry out here.

Kevin: Thank you, Dennis. I look forward to sharing some updates about our operations.

Heather Rosentrater: In fact, July was the hottest month on record for the Spokane area and many other locations nearby. We set a record for having 20 straight days above 90 degrees. The fact that it's been hot and dry underscores the importance of our wildfire mitigation efforts. We're making great progress towards this year's goals for grid hardening and vegetation management, as well as completing our survey of 100% of identified risk trees, something we do every year.

Kevin: As Dennis said, I hope everyone is enjoying the summer. It's definitely been warm and dry out here. In fact, July was the hottest month on record for the Spokane area and many other locations nearby. We set a record for having 20 straight days above 90 degrees.

Kevin: The fact that it's been hot and dry underscores the importance of our wildfire mitigation efforts.

Speaker Change: We're making great progress towards this year's goals for grid hardening and vegetation management, as well as completing our survey of 100% of identified risk trees, something we do every year.

Heather Rosentrater: We're leveraging our fire weather dashboard to implement progressively more sensitive levels of fire safety mode as weather conditions warrant. And again, if extreme conditions are forecasted, we have the systems in place to implement a public safety power shutoff as a tool of last resort. We're prepared, and we're making great progress. Our risk mitigation and proactive operations are just two prongs of our strategy to address wildfire risk. Legislative support is also critical.

Heather Rosentrater: We're leveraging our fire weather dashboard to implement progressively more sensitive levels of fire safety mode as weather conditions warrant. And again, if extreme conditions are forecasted, we have the systems in place to implement a public safety power shop as a tool of last resort. We're prepared and we're making great progress. Our risk mitigation and proactive operations are just two prongs of our strategy to address wildfire risk. Legislative support is also critical. In both Washington and Idaho, we expect to advance legislation addressing wildfire risk in the upcoming legislative sessions. I'm happy to share that our system performed well during the recent heat wave.

Speaker Change: We're leveraging our fire weather dashboard to implement progressively more sensitive levels of fire safety mode as weather conditions warrant. And again, if extreme conditions are forecasted, we have the systems in place to implement a public safety power shutoff as a tool of last resort.

Speaker Change: We're prepared and we're making great progress.

Speaker Change: Our risk mitigation and proactive operations are just two prongs of our strategy to address wildfire risk. Legislative support is also critical. In both Washington and Idaho, we expect to advance legislation addressing wildfire risk in the upcoming legislative sessions.

Heather Rosentrater: In both Washington and Idaho, we expect to advance legislation addressing wildfire risk in the upcoming legislative session. I'm happy to share that our system performed well during the recent heat wave. The investments we've made in our grid since 2021's heat dome event helped us to ensure strong and stable performance of our system throughout the prolonged. Whether we're talking about periods of extreme cold like we experienced in January or the extreme heat in our region this last month, these weather events are happening more often in both winter and summer.

Heather Rosentrater: The investments we've made in our grid since the 2021 heat dome event helped us to ensure strong and stable performance of our system throughout the prolonged heat. Whether we're talking about periods of extreme cold likely experienced in January or the extreme heat in our region this last month, these weather events are happening more often in both winter and summer. These events have resulted in a higher peak demand on our system than previously forecasted. And demonstrate the growing need for additional generation on our system and throughout the Pacific Northwest. We're committed to meeting the growing energy needs of our customers, and I'm excited about the opportunities that we have.

Speaker Change: I'm happy to share that our system performed well during the recent heat wave. The investments we've made in our grid since 2021's heat dome event helped us to ensure strong and stable performance of our system throughout the prolonged heat.

Speaker Change: Whether we're talking about periods of extreme cold like we experienced in January or the extreme heat in our region this last month, these weather events are happening more often in both winter and summer.

Heather Rosentrater: These events have resulted in higher peak demand on our system than previously forecast and demonstrate the growing need for additional generation on our system and throughout the Pacific Northwest. We're committed to meeting the growing energy needs of our customers, and I'm excited about the opportunities that we have. Taking the entire system peaks into account, we're in the process of developing our next integrated resource plan, or IRP. We shared the first draft of our preferred resource strategy in July, and we expect to finalize our IRP in January 2025.

Speaker Change: These events have resulted in higher peak demand on our system than previously forecasted.

Speaker Change: and demonstrate the growing need for additional generation on our system and throughout the Pacific Northwest. We're committed to meeting the growing energy needs of our customers, and I'm excited about the opportunities that we have.

Heather Rosentrater: Taking these higher system peaks into account, we're in the process of developing our next integrated resource plan, our IRP. We shared the first draft of our preferred resource strategy in July, and expect to finalize our IRP in January 2025. We're continuing to work through the planning process, and I'd like to share a few of the highlights we've identified so far. As clean energy projects are constructed, transmission is needed to move that energy around. We, along with other utilities in the area, are in conversation with Grid United regarding part ownership of the plan transmission line connecting North Dakota to Kohlstrip, Montana.

Speaker Change: Taking entire system peaks into account, we're in the process of developing our next integrated resource plan, or IRP.

Speaker Change: We shared the first draft of our preferred resource strategy in July , and expect to finalize our IRP in January 2025.

Heather Rosentrater: We're continuing to work through the planning process, and I'd like to share a few of the highlights we've identified so far. We, along with other utilities in the area, are in conversation with Grid United regarding part ownership of the planned transmission line connecting North Dakota to Coal Strip, Montana. We already own transmission from Coal Strip into our service territory, and we designed our Coal Strip exit to keep these transmission rights.

Speaker Change: We're continuing to work through the planning process, and I'd like to share a few of the highlights we've identified so far.

Speaker Change: As clean energy projects are constructed, transmission is needed to move that energy around.

Speaker Change: We, along with other utilities in the area, are in conversation with Grid United regarding part ownership of the planned transmission line connecting North Dakota to Coal Strip, Montana.

Heather Rosentrater: We already own transmission from Kohlstrip into our service territory, and we designed our Kohlstrip exit to keep these transmission rights. Our draft preferred resource strategy identifies this line as a key transmission opportunity. In addition to transmission capacity requirements beginning in 2030, new renewable resources will be needed as early as 2029 to ensure we can continue to meet our customers' needs with low-cost renewable energy. We expect to begin a request for proposal process shortly after finalizing our integrated resource plan in January of 2025.

Speaker Change: We already own transmission from Coal Strip into our service territory, and we designed our Coal Strip exit to keep these transmission rights.

Heather Rosentrater: Our draft preferred resource strategy identifies this line as a key transmission opportunity. In addition to transmission capacity requirements beginning in 2030, new renewable resources will be needed as early as 2029 to ensure we can continue to meet our customers' needs with low-cost renewable energy. We expect to begin a request for proposal process shortly after finalizing our integrated resource plan in January of 2025. As part of that request for proposal, we expect to include ownership options through self-build and build-transfer options. And with that, I'll turn it over to Kevin for a discussion of the financial results. Thank you.

Speaker Change: Our draft preferred resource strategy identifies this line as a key transmission opportunity.

Speaker Change: In addition to transmission capacity requirements beginning in 2030, new renewable resources will be needed as early as 2029 to ensure we can continue to meet our customers' needs with low-cost renewable energy.

Speaker Change: We expect to begin a Request for Proposal process shortly after finalizing our Integrated Resource Plan in January of 2025. As part of that Request for Proposal, we expect to include ownership options through self-build and build transfer options.

Heather Rosentrater: As part of that request for proposal, we expect to include ownership options, filled and built transfer options.

Kevin Christie: And with that, I'll turn it over to Kevin for a discussion of the financial results. Thank you, Heather. I want to begin by reinforcing what Dennis said earlier. Our earnings are on track, both on a consolidated basis and at Avista Utilities. Our second quarter of 2024 earnings increased compared to the second quarter of 2023. At Avista Utilities, our utility margin increased due to the effects of our general ray cases. In the second quarter, we recognized a pre-tax benefit of 1.3 million under the energy recovery mechanism. And as a result, our year-to-date position improved to a 4.7 million pre-tax expense.

Kevin Christie: Thank you, Heather. I want to begin by reinforcing what Dennis said earlier. Our earnings are on track. Both on a consolidated basis and at Avista Utilities, our second quarter 2024 earnings increased compared to the second quarter of 2023. At Avista Utilities, our utility margin increased due to the effects of our general rate cases. In the second quarter, we recognized a pre-tax benefit of $1.3 million under the Energy Recovery Mechanism. And as a result, our year-to-date position improved to $4.7 million pre-tax expense.

Speaker Change: And with that, I'll turn it over to Kevin for a discussion of the financial results.

Kevin: Thank you, Heather. I want to begin by reinforcing what Dennis said earlier. Our earnings are on track. Both on a consolidated basis and at Avista Utilities, our second quarter 2024 earnings increased compared to the second quarter of 2023.

Kevin: At Avista Utilities, our utility margin increased due to the effects of our general rate cases.

Kevin: In the second quarter, we recognized a pre-tax benefit of $1.3 million under the Energy Recovery Mechanism and as a result, our year-to-date position improved to a $4.7 million pre-tax expense.

Kevin Christie: Despite this, we still anticipate ending the year in the 90% customer, 10% company sharing band, with a negative impact on earnings of $0.7 per diluted share. Last quarter, we mentioned we were in the process of finalizing agreements with a new large electric customer. Effective August 1, we began serving this customer. We continue to expect this load to offset higher power supply costs in 2024. AEMP's results for the second quarter were also right in line with our expectations. At our other businesses, we recognized a 3-cent loss per diluted share due to the result of periodic market valuations within our portfolio of investments.

Kevin Christie: Despite this, we still anticipate ending the year in the 90% customer, 10% company sharing ban with a negative impact on earnings of $0.07 per diluted share. Last quarter, we mentioned we were in the process of finalizing agreements with a new large electric customer. Effective August 1, we began serving this customer. We continue to expect this load to offset higher power supply costs in 2024. AALP's results for the second quarter were also in line with our expectations.

Kevin: Despite this, we still anticipate ending the year in the 90% customer, 10% company sharing ban with a negative impact on earnings of 7 cents per diluted share.

Kevin: Last quarter, we mentioned we were in the process of finalizing agreements with a new large electric customer.

Kevin: Effective August 1, we began serving this customer.

Kevin: We continue to expect this load to offset higher power supply costs in 2024.

Kevin: AALP's results for the second quarter were also right in line with our expectations.

Kevin Christie: At, or other businesses, we recognized a $0.03 loss per diluted share due to the result of periodic market valuations within our portfolio of investments. These investments create opportunities for learning, contribute to economic development within our service territory, and help propel us toward energy innovation and the transformation necessary for meeting our strategic goals. Turning to the regulatory front, we are currently working through our general rate cases in Washington, which we filed earlier this year.

Kevin: At our other businesses, we recognized a three cent loss per diluted share due to the result of periodic market valuations within our portfolio of investments.

Kevin Christie: These investments create opportunities for learning, contribute to economic development within our service territory, and help propel us toward energy innovation and the transformation necessary for meeting our strategic goals.

Kevin: These investments create opportunities for learning, contribute to economic development within our service territory.

Kevin: and help propel us toward energy innovation and the transformation necessary for meeting our strategic goals.

Kevin Christie: Turning to the regulatory front, we are currently working through our general ray cases in Washington, which we filed earlier this year. In response to our testimony, the parties to our proceeding filed their first round of testimony in early July. We will file rebuttal testimony in mid-August, responding to the parties and updating our case accordingly. In addition, all parties met in May and July to see if we could settle some or all of the issues. After good faith negotiations by all parties, we simply were not able to reach terms. After reviewing the position of the parties, we believe that our case, on rebuttal, should be supported by the Commission.

Kevin: Turning to the regulatory front, we are currently working through our general rate cases in Washington, which we filed earlier this year. In response to our testimony, the parties to our proceeding filed their first round of testimony in early July .

Kevin Christie: In response to our testimony, the parties to our proceeding filed their first round of testimony in early July. We will file rebuttal testimony in mid-August, responding to the parties and updating our case accordingly. In addition, all parties met in May and July to see if we could settle some or all of the issues. After good faith negotiations by all parties, we simply were not able to reach terms after reviewing the positions of the parties.

Kevin: We will file rebuttal testimony in mid-August, responding to the parties and updating our case accordingly.

Kevin: In addition, all parties met in May and July to see if we could settle some or all of the issues.

Kevin: After good-faith negotiations by all parties, we simply were not able to reach terms.

Kevin Christie: We believe that our case, on rebuttal, should be supported by the commission. The two-day hearing before the Commission will start on September 30, and we expect an order in mid-December. As a reminder, we expect to file our next general rate case in Oregon in the fourth quarter of this year and our next general rate case in Idaho in the first quarter of 2025. We are committed to investing the necessary capital in our utility infrastructure.

Kevin: After reviewing the positions of the parties,

Kevin Christie: The two day adhering before the commission will start on September 30th, and we expect an order in mid-December.

Kevin: We believe that our case, on rebuttal, should be supported by the Commission.

Kevin: The two-day hearing before the Commission will start on September 30, and we expect an order in mid-December.

Kevin Christie: As a reminder, we expect to file our next general rate case in Oregon in the fourth quarter of this year and our next general rate case in Idaho in the first quarter of 2025. We are committed to investing the necessary capital and our utility infrastructure. Capital expenditures that Avista Utilities were $245 million in the first half of 2024. Our planned capital expenditures are $500 million for the year. This investment ensures we can continue to support customer growth and maintain our system to provide safe, reliable energy to our customers. We expect capital expenditures at AEL and P to be $21 million, and investments at our other businesses to be about $11 million in 2024.

Kevin: As a reminder, we expect to file our next general rate case in Oregon in the fourth quarter this year, and our next general rate case in Idaho in the first quarter of 2025.

Kevin Christie: Capital expenditures at Avista Utilities were $245 million in the first half of 2024. Our planned capital expenditures are $500 million for the year. This investment ensures we can continue to support customer growth and maintain our system to provide safe, reliable energy to our customers. We expect capital expenditures at AEL&P to be $21 million, and investments at our other businesses to be about $11 million in 2024. On the liquidity front, as of June 30, we had $251 million of available liquidity under our committed line of credit and $44 million available under our letter of credit facility.

Kevin: We are committed to investing the necessary capital in our utility infrastructure.

Kevin: Capital expenditures at Avista Utilities were $245 million in the first half of 2024. Our planned capital expenditures are $500 million for the year.

Kevin: This investment ensures we can continue to support customer growth and maintain our system to provide safe, reliable energy to our customers.

Kevin: We expect capital expenditures at AEL&P to be $21 million and investments at our other businesses to be about $11 million in 2024.

Kevin Christie: On the liquidity front, as of June 30, we had $251 million of available liquidity under a committed line of credit and $44 million available under our letter of credit facility. We expect to issue approximately $70 million in common stock in 2024 to fund our capital spending. Through June 30, we issued $17.6 million of common stock. In April, we remarketed $84 million of tax-exempt bonds, and we do not expect to issue additional long-term debt in 2024.

Kevin: On the liquidity front, as of June 30, we had $251 million of available liquidity under our committed line of credit and $44 million available under our letter of credit facility.

Kevin Christie: We expect to issue approximately $70 million of common stock in 2024 to fund our capital spending. Through June 30, we issued $17.6 million of common stock. In April, we remarketed $84 million of tax-exempt bonds, and we do not expect to issue additional long-term debt in 2024.

Kevin: We expect to issue approximately $70 million of common stock in 2024 to fund our capital spending.

Kevin: Through June 30, we issued $17.6 million of common stock.

Kevin: In April , we remarketed $84 million of tax-exempt bonds, and we do not expect to issue additional long-term debt in 2024.

Kevin Christie: We are confirming our earnings guidance for 2024 with a consolidated range of $2.36 to $2.56 per diluted share, and we expect Avista Utilities to contribute within a range of $2.23. $2.39 per diluted share. As mentioned previously, we expect the impact of the energy recovery mechanism on the full year for 2024 to be a negative $0.07 per diluted share in the 90% customer, 10% company sharing band. As previously mentioned, we expect the impact of the new customer to offset substantially all of the forecast impact higher power supply costs in 2024.

Kevin Christie: We are confirming our earnings guidance for 2024 with a consolidated range of $2.36 to $2.56 per diluted share. We expect Avista Utilities to contribute within a range of $2.23 to $2.39 per diluted share. As mentioned previously, we expect the impact of the energy recovery mechanism on the full year for 2024 to be a negative $0.7 per diluted share in the 90% and customer 10% company sharing band. As also previously mentioned, we expect the impact of the new customer to offset substantially all of the forecast impact power, higher power supply costs in 2024. Our guidance for Avista Utilities in 2024 reflects unrecovered structural costs, which we estimate will reduce the return on equity by 70 basis points.

Kevin: We expect Avista utilities to contribute within a range of $2.23.

Kevin: to $2.39 per diluted share. As mentioned previously, we expect the impact of the energy recovery mechanism on the full year for 2024 to be a negative $0.07 per diluted share in the 90% customer, 10% company sharing band.

Kevin: As also previously mentioned, we expect the impact of the new customer to offset substantially all of the forecast impact higher power supply costs in 2024.

Kevin Christie: Our guidance for Avista utilities in 2024 reflects unrecoverable structural costs, which we estimate will reduce the return on equity by 70 basis points. Additionally, we expect the continuing effect of regulatory timing lag will further reduce our return on equity by 60 basis points for the year.

Kevin: Our guidance for Avista utilities in 2024 reflects unrecovered structural costs, which we estimate will reduce the return on equity by 70 basis points.

Kevin Christie: We expect the continuing effect of regulatory timing lag will further reduce our return on equity by 60 basis points for the year. This results in an expected return on equity at Avista Utilities of 8.1% in 2024. We also expect AELP to contribute in the range of $0.9 to $0.11 per diluted share. As we move through the remainder of the year, we expect to see improvement in the private equity markets. And as a result, we continue to expect our other businesses to contribute in the range of $0.46 per diluted share in 2024.

Kevin: We expect the continuing effect of regulatory timing lag will further reduce our return on equity by 60 basis points for the year. This results in an expected return on equity at Avista utilities of 8.1% in 2024.

Kevin Christie: This results in an expected return on equity at Avista utilities of 8.1% in 2024. We also expect AELP to contribute in the range of $0.09 to $0.11 per diluted share. As we move through the remainder of the year, we expect to see improvement in the private equity markets, and as a result, we continue to expect our other businesses to contribute in the range of $0.04 to $0.06 per diluted share in 2024.

Kevin: We also expect AEL&P to contribute in the range of $0.09 to $0.11 per diluted share.

Kevin: As we move through the remainder of the year, we expect to see improvement in the private equity markets, and as a result, we continue to expect our other businesses to contribute in the range of $0.04 to $0.06 per diluted share in 2024.

Kevin Christie: Assuming a constructive outcome in our 2024 general race case filings, we expect our earnings to grow over the long term in the range of 4 to 6% from a 2025 base year.

Kevin: Assuming a constructive outcome in our 2024 general rate case filings, we expect our earnings to grow over the long term in the range of 4 to 6 percent from a 2025 base year.

Kevin Christie: Assuming a constructive outcome in our 2024 general rate case filings, we expect our earnings to grow over the long term in the range of 4-6% from a 2025 base year. Now, we'll be happy to take your questions.

Operator: Now we'll be happy to take your questions. Thank you. At this time, we'll conduct a question-and-answer session. As a reminder, to ask a question, you need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while I compile the Q&A roster.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while I compile the Q&A roster. Our first question comes from Julian Dueling Smith from Jeffries. Please go ahead.

Kevin: Now we'll be happy to take your questions.

Speaker Change: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question, please press star one one again. Please stand by while I compile the Q&A roster

Brian Russo: Our first question comes from Julian, Dueling Smith, from Jeffries. Please go ahead. Hi, it's actually Brian Russo on for Julian. Good morning. Hi, Brian. Hey, just the commentary on the regional transmission and the grid United North Plains connector. Where are you in that discussion process? Should we expect any sort of MOU? Soon, it's a very large project; I think it's $3.2 billion. I actually received the Dueling Grant the other day. Any thoughts on what your, you know, ownership structure might look like. Yeah, we're working through that right now, so we're working with the other utilities that are in conversations with them, and as I noted, it fits well with our plans that are identified in our integrated resource plan, and so we think it's very promising in terms of us being a part of it, and we're just continuing those conversations.

Speaker Change: Our first question comes from Julian Dueling-Smith from Jeffries. Please go ahead.

Brian Russo: Hi, it's actually Brian Russo on for Julian. Good morning. Hi Brian.

Speaker Change: Hi, it's actually Brian Russo on for Julian. Good morning.

Speaker Change: Hi Brian . Hi Brian .

Heather Rosentrater: Hey, just the commentary on the regional transmission and the Grid United North Plains Connector. Where are you in the discussion process? Should we expect any sort of MOU soon? It's a very large project. I think it's $3.2 billion. I actually received the DOE grant the other day. Any thoughts on what your ownership structure might look like?

Speaker Change: Hey, just the commentary on the regional transmission and the Grid United North Plains Connector.

Brian Russo: Where are you in that discussion process? Should we expect any sort of MOU soon? It's a very large project. I think it's $3.2 billion. I actually received the DOE grant the other day. Any thoughts on what you're...

Heather Rosentrater: Yeah, we're working through that right now. So we're working with the other utilities that are in conversations with them. And as I noted, it fits well with our plans that are identified in our integrated resource plan. And so we think it's very promising in terms of us being a part of it. And we're just continuing those conversations.

Speaker Change: you know, ownership structure might look like.

Speaker Change: Yeah, we're working through that right now. So we're working with the other utilities that are in conversations with them and as I noted it fits well with our plans that are identified in our integrated resource plan And so we think it's very promising in terms of us being a part of it and we're just continuing those conversations

Brian Russo: Okay, great. And then just on the Washington ray cases, has the settlement window closed, or can you still meet with interveners and interested parties ahead of the hearing? Now, thanks for the question, Brian. Well, the window certainly hasn't closed. We could continue to have some dialogue as we move towards filing our rebuttal case, but I will tell you that it seems unlikely at this point in time, given how close we are to filing that rebuttal. If, after that rebuttal, the parties and the company become more engaged or potentially become more engaged to go first, we'll jump into those discussions; we'll let you know if something comes of it.

Brian Russo: And then just on the Washington... Ray Cases. Has the settlement window closed, or can you still meet with interveners and interested parties ahead of the hearing?

Speaker Change: Okay, great. And then just on the Washington...

Speaker Change: Ray cases. Has the the settlement window closed or

Speaker Change: You know, can you still meet with, uh, with interveners and...

Dennis Vermillion: Now, thanks for the question, Brian. Well, the window certainly hasn't closed.

Speaker Change: and.

Speaker Change: and other interested parties ahead of the hearing.

Dennis Vermillion: We could continue to have some dialogue as we move towards filing our rebuttal case, but I will tell you that it seems unlikely at this point in time, given how close we are to filing that rebuttal. If, after that rebuttal, the parties and the company become more engaged or potentially become more engaged, of course, we'll jump into those discussions. We'll let you know if something comes of it.

Speaker Change: Thanks for the question, Brian .

Speaker Change: Well, the window certainly hasn't closed. We could continue to have some dialogue as we move towards filing our rebuttal case. But I will tell you that it seems unlikely at this point in time, given how close we are to filing that rebuttal, if after that rebuttal, the parties

Speaker Change: and the company become more engaged, or potentially become more engaged, of course. We'll jump into those discussions. We'll let you know if something comes of it.

Brian Russo: Okay, great. And then lastly, the previously disclosed large electric customer, right, that's offsetting the set in sense of an IRM expense, I assume that's about $5 million in margin. Is that outside of this ray case? So you retain that margin in the future, or at least through 25 or even 2026 depending on the outcome of this ray case, is that how we should look at it? Well, certainly it's incremental revenue for this year. And then, as you know, with the ray case timing and the fact that power supply is a very significant part of that case, that'll get pulled into and be considered part of the overall power supply outcome.

Brian Russo: Okay, great. And then lastly, the previously disclosed large electric customer, right, that's offsetting the seven cents of RM expense. I assume that's about 5 million in margin. Is that outside of this rate case? So you retain that margin in the future, or at least, you know, through 25, or even 2026, depending on the outcome of this rate case. Is that how we should look at it?

Speaker Change: Okay, great. And then lastly, the previously disclosed...

Speaker Change: large electric customer.

Speaker Change: that's offsetting the 7 cents of ERM expense, I assume that's about $5 million in margin. Is that outside of...

Speaker Change: This rate case so you retain that margin in the future or at least, you know through 25 or even 2026 depending on the outcome of this rate case. Is that how we should look at it?

Kevin Christie: Well, certainly, it's incremental revenue for this year, and then, as you know, with the rate case timing and the fact that power supply is a very significant part of that case, that'll get pulled into and be considered part of the overall power supply outcome.

Speaker Change: Well, certainly it's incremental revenue for this year, and then, as you know, with the rate case timing and the fact that power supply is a very significant part of that case, that'll get pulled into and be considered part of the overall power supply outcome.

Brian Russo: Okay, got it. Understandable. Thank you very much. Thanks, Brian.

Brian Russo: Thank you very much. Thanks, Brian. Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from Willard Grainger from Mizzou. I hope you'll go ahead.

Speaker Change: Okay, got it. Understood. Thank you very much.

Operator: One more for our next question.

Brian Russo: Thanks, Brian .

Speaker Change: Thank you. One moment for our next question.

Willard Grainger: Our next question comes from Willard Grainger from the Zooho. Please go ahead. Hi, good morning, everybody. Good morning. Thanks for taking my question. Just one on the non-regulated business that you have. Is there an opportunity to monetize that in some form or fashion to help offset any equity needs in your capital plan? Well, the non-regulated side of our business, or what we call "other," is actually several different investments. And with that, of course, as we mentioned here in the earnings call, to the extent that markets open up, then we could see a monetization event at some point in time in the future for some of those investments.

Speaker Change: Our next question comes from Willard Grainger from Mizzou. Please go ahead.

Willard Grainger: Hi, good morning, everybody.

Unidentified: Morning. Good morning.

Willard Grainger: Thanks for taking my question. Just one on the non-regulated business that you have. Is there an opportunity to monetize that in some form or fashion to help offset any equity needs in your capital plan?

Willett Granger: Hi, good morning, everybody.

Speaker Change: Morning. Good morning.

Willard Grainger: Thanks for taking my question. Just one on the non-regulated business that you have. Is there an opportunity to monetize that in some form or fashion to help offset any equity needs in your capital plan?

Kevin Christie: Well, the non-regulated side of our business, or what we call the other side, is actually several different investments. And with that, of course, as we mentioned here in the earnings call, to the extent that markets open up, then we could see a monetization event at some point in time in the future for some of those investments. And to the extent that that happens, that will certainly help out. But, overall, it's a relatively small part of our business. The utility is our core. Thanks for watching. Bye.

Willard Grainger: Understandable. I appreciate that. Most of my questions have been answered, so I'll get back in queue.

Speaker Change: Well, the non-regulated side of our business, or what we call other, is actually several different investments. And with that, of course, as we mentioned here in the earnings call, to the extent that markets open up...

Willard Grainger: And to the extent that happens, that will certainly help out. But it's overall, it's a relatively small part of our business. The utility is our core. Understood. I appreciate that. Most of my questions have been answered. So I'll get back in queue. Thank you.

Speaker Change: then we could see a monetization event at some point in time in the future for some of those investments and to the extent that happens that will certainly help out but it's it's overall it's a relatively small part of our business the utility is our core

Speaker Change: Understood. I appreciate that. Most of my questions have been answered, so I'll get back in queue.

Operator: I am showing no further questions at this time.

Operator: I am showing no further questions at this time. I will now turn it back over to Stacey Wenz for closing remarks.

Speaker Change: Thank you.

Stacey Wenz: I will now turn it back over to Stacy Wins for closing remarks. Thank you all for joining us today and for your interest in the VISTA.

Speaker Change: I am showing no further questions at this time. I will now turn it back over to Stacey Wenz for closing remarks.

Stacey Wenz: Thank you all for joining us today and for your interest in Avista. Have a great day.

Operator: Have a great day. Thank you.

Stacey Wenz: Thank you all for joining us today and for your interest in Avista. Have a great day.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Operator: For your participation in today's conference, this does conclude the program. You may now disconnect. Thank you.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.