Q3 2024 Avista Corp Earnings Call
Operator: Good day and thank you for standing by.
Good day, and thank you for standing by welcome.
Operator: Welcome to the Avista Corporation Q3 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during your session, you will need to press star 11 on your telephone. You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again.
Speaker Change: Welcome to the Avista Corporation Q3, 'twenty 'twenty four earnings conference call.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
To ask a question during your session you will need to press star one one on your telephone you'll then here an automated message advising to enhance is raised.
Withdraw your question. Please press star one again.
Operator: Please be advised that today's conference is being recorded.
Please be advised that today's conference is being recorded.
Stacey Wenz: I would now like to hand the conference over to your first speaker today, Stacey Wenz, Investor Relations Manager. Please go ahead.
Speaker Change: I would now like to hand, the conference over to your first speaker today, Stacy one Investor Relations manager. Please go ahead.
Stacey Wenz: Thank you, Therese.
Stacey Wenz: Good morning. Welcome to Avista's third quarter 2024 earnings conference call. Our earnings and third quarter Form 10-Q were released pre-market this morning. You can find both on our website.
Stacy One: Thank you Terry and good morning, welcome to the third quarter 'twenty 'twenty four earnings conference call.
Speaker Change: Our earnings and third 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 Crossell. 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 third quarter of 2024, which are available on our website for a full discussion of these risk factors.
Speaker Change: Joining me. This morning are Mr Corp, C E O Dennis Vermillion, President and C. O O had there rather than trader senior Vice President and CFO Treasurer, and regulatory Affairs Officer, Kevin Christie, and Vice President Controller, and principal accounting Officer, Ryan Russell.
Speaker Change: Okay.
Speaker Change: Today, we will make certain statements that are forward looking even bother 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 third quarter of 'twenty 'twenty, four which are available on our website for a full discussion of these risk factors.
Stacey Wenz: I'll begin with a recap of the financial results presented in today's press release. Our consolidated earnings for the third quarter of 2024 were $0.23 per diluted share, compared to $0.19 for the third quarter of 2023. Year-to-date, consolidated earnings were $1.44 per diluted share compared to $1.14 last year.
Speaker Change: I'll begin with a recap of the financial results presented in today's press release, our consolidated earnings for the third quarter of 2024 or 23 cents per diluted share compared to 19 cents for the third quarter of 2023.
Speaker Change: Year to date consolidated earnings were $1.44 per diluted share compared to $1.14 last year.
Dennis Vermillion: Now it's my pleasure to hand the call over to Dennis. Well, thanks, Stacey, and good morning, everyone. It's great to be here with all of you.
Dennis Vermillion: Now, it's my pleasure to hand, the call over to Dennis.
Dennis: Well, thanks, Stacy and good morning, everyone. It's great to be here with all of you. This is my final earnings call as CEO of a best at.
Dennis Vermillion: This is my final earnings call as CEO of Avista. As you know, Heather Rosentrater will be taking over as CEO on January 1st of next year, and I have every confidence in Heather. Throughout her career, she has demonstrated the values, the strength, acumen, and insights to position us for success. She is the right person to lead Avista into the future.
Dennis: As you know Heather wasn't trader will be taking over as CEO on January 1st of next year and I have every confidence in Heather throughout her career. She has demonstrated the values that the strength acumen and insights to position us for success. She is the right person to lead avista into there.
Future.
Dennis Vermillion: You know, I've been honored to lead this company and serve alongside exceptional and dedicated employees for nearly 40 years. Our employees make Avista such a special place to work, and witnessing firsthand our ability to rise to meet challenges together as a team is something I will truly miss as I retire. Throughout my five years as CEO, we've made significant progress with our regulatory strategy, making meaningful progress towards closing the gap of regulatory lag, even as we found creative ways to minimize the impact of rate increases for our customers. Serving customers is the heart of our business.
Dennis: I've been honored to lead this company and serve alongside exceptional and dedicated employees for nearly 40 years.
Dennis: Our employees make the best of such a special place to work in.
Dennis: Witnessing firsthand our ability to rise to meet challenges together as a team is something I will truly miss as I retire.
Speaker Change: Throughout my five years as CEO, we've made significant progress with our regulatory strategy.
Speaker Change: Making meaningful progress towards closing the gap a regulatory lag even as we found creative ways to minimize the impact of rate increases for our customers.
Speaker Change: Serving customers as the heart of our business and in the last five years. Our team has grown our programs for targeted energy assistance from a level of $11 million to nearly $40 million a year more importantly, we are providing that assistance to more customers than ever.
Dennis Vermillion: And in the last five years, our team has grown our programs for targeted energy assistance from a level of $11 million to nearly $40 million a year. More importantly, we are providing that assistance to more customers than ever. We've also invested more than $2 billion in our system on behalf of our customers in the last five years. The team has done a remarkable job seeking out state and federal funding for projects that matter to our customers. Avista has been awarded over $90 million in state and federal grants in the last five years. We continue to seek out these funding opportunities because it's the right thing to do for our customers.
Speaker Change: We've also invested more than $2 billion in our system on behalf of our customers in the last five years. The team has done a remarkable job seeking out state and federal funding for projects that matter to our customers.
Speaker Change: That has been awarded over $90 million in state and federal grants in the last five years, we continue to seek out these funding opportunities because it's the right thing to do for our customers. It enables us to accomplish more work on their behalf without impacting the price that they pay for energy.
Dennis Vermillion: It enables us to accomplish more work on their behalf without impacting the price that they pay for energy. In the last five years, we've also made considerable progress towards achieving our clean energy goals. We've signed four PPAs for a total of 325 megawatts of clean, renewable energy, both hydropower and wind. We're already one of the lowest emitting electric power producers in the United States, and these agreements help ensure that by 2026, more than 70% of our peak generating capability will be from renewable, non-emitting sources. Our earnings continue to improve from 2023, although our third quarter results show that we still face some headwinds.
Speaker Change: The last five years, we've also made considerable progress towards achieving our clean energy goals, we've signed for Ppas for a total of 325 megawatts of clean renewable energy, both hydropower and wind we're already one of the lowest emitting electric power producers in the United States and these agreements help ensure that by.
Speaker Change: 2026, more than 70% of our peak generating.
Speaker Change: Capability will be from renewable and non emitting sources.
Speaker Change: Our earnings continue to improve from 2023, although our third quarter results show that we still face some headwinds and Kevin will talk about that.
Dennis Vermillion: And Kevin will talk about that in a few minutes. But we have the right team in place and we are well positioned to continue executing on our regulatory strategy and to deliver on our commitments to each one of our stakeholders now and into the future.
Speaker Change: In a few minutes, but we have the right team in place.
Speaker Change: And we are well positioned to continue executing on our regulatory strategy and to deliver on our commitments to each one of our stakeholders now and into the future.
Dennis Vermillion: You know, one of the one of the one constant in all 40 years of my career with Avista has been our capacity to adapt and consistently bring our best to the communities we serve. through innovation. through hard work, through investment, and through exemplary service. I know Avista will carry these values forward through the next 40 years with the right team and the right values. I have every confidence in Avista's success.
Speaker Change: One of the one of that.
Speaker Change: The one constant in all 40 years of my career with Avista has been our capacity to adapt and consistently bring our best to the communities we serve.
Speaker Change: Through innovation.
Speaker Change: Through hard work through investment and through exemplary service.
Speaker Change: No Avista will carry these values forward through the next 40 years with the right team and the right values I have every confidence in our business success.
Heather Rosentrater: Now I'll turn the call over to Heather. Thank you, Dennis. And I want to start by expressing my heartfelt thanks and gratitude to you, Dennis, for your leadership, guidance and unwavering support for our company. Your long tenured career is truly remarkable and we are all so fortunate to have had you at the helm during some of these unprecedented times. And as highlighted, the progress and successes achieved through your leadership are noteworthy and have benefited our customers, communities and investors, and you will definitely be missed.
Speaker Change: Now I'll turn the call over to Heather.
Heather: Thank you Dennis.
Heather: And I want to start by expressing my heartfelt, thanks, and gratitude to you Dennis for your leadership guidance and unwavering support for our company.
Heather: Your long tenured career is truly remarkable and we are also fortunate to have had you at the helm during some of these unprecedented times.
Heather: And as highlighted the progress and success is achieved through your leadership are noteworthy and have benefited our customers communities and investors.
Heather: Definitely be missed.
Heather Rosentrater: I also want to share that I'm honored to be stepping into this role. My family's roots in our service territory expand back to the founding of Avista over 135 years ago. So that makes it all the more meaningful to me.
Speaker Change: I also want to share that I'm honored to be stepping into this role my family's roots in our service territory expand back to the founding of the vest over a 135 years ago. So that makes it all the more meaningful to me.
Heather Rosentrater: And now turning to our operations, I'd like to share some updates. I'm pleased to announce that we are officially out of wildfire season. We've received significant rain in the last few weeks and took all of our circuits out of fire safety mode as of October 17. Public Safety Power Shutoffs, or PSPS, were added to our wildfire toolkit in 2024, and in late September, we experienced conditions that required the use of the PSPS tool on one of our circuits. All of our planning and work to establish coordination with community resources paid off. We successfully deployed resources to the affected area and once it was safe to do so, we were able to quickly restore service to our customers that same day.
Speaker Change: And now turning to our operations I'd like to share some updates.
Speaker Change: I'm pleased to announce that we are officially out of wildfire season, we've received significant rain in the last few weeks and took all of our circuits out of fire safety mode as of October 17th.
Speaker Change: Public safety power shutoff surplus Sps were added to our wildfire tool kit in 2024 and in late September we experienced conditions that required the use of the <unk> tool on one of our circuits.
Speaker Change: All of our planning and work to establish coordination with community resource has paid off.
Speaker Change: Excessively deployed resources to the affected area and once it was safe to do so we were able to quickly restore service to our customers that same day.
Heather Rosentrater: Another success story from our wildfire mitigation efforts in 2024 was the deployment of nine artificial intelligence enabled fire detection cameras. These cameras detect wildfire smoke up to 10 miles away and send alerts to appropriate resources. We've deployed them strategically throughout our service territory to maximize the views of several high risk geographic areas. And we've already seen success with these cameras identifying fires and notifying appropriate partner agencies and resources.
Speaker Change: Another success story from our wildfire mitigation efforts in 2024, whereas the deployment of nine artificial intelligence enabled fire detection cameras.
Speaker Change: These cameras detect wildfires smoke up to 10 miles away and send alerts to appropriate resources.
Speaker Change: We've deployed them strategically throughout our service territory to maximize the views of several high risk geographic areas.
Speaker Change: And we've already seen success with these cameras identifying fires and notifying appropriate partner agencies and resources.
Heather Rosentrater: We continue to make progress with our clean energy goals as well. The Clearwater Wind Project came online early, and we are already receiving power from the project to serve our customers. Clearwater directly supports meeting our goal of providing clean, reliable energy to our customers at a reasonable cost, while meeting Washington State's clean energy standards now and in the future. With this project added to our portfolio, Avista remains one of the lowest emitters of CO2 among the nation's energy producers, making the company among the greenest investor owned utilities in the nation.
Speaker Change: We continue to make progress with our clean energy goals as well.
Speaker Change: The Clearwater Wind project came online early and we are already receiving power from the project to serve our customers.
Speaker Change: Clearwater directly supports meeting our goal of providing clean reliable energy to our customers at a reasonable cost.
Speaker Change: Meeting, Washington state's clean energy standards now and in the future.
Speaker Change: With this project added to our portfolio of Vista remains one of the lowest in matters of <unk> among the nation's energy producers, making the company among the greenest investor owned utilities in the nation.
Heather Rosentrater: And earlier this week, we signed a memorandum of understanding to work toward an ownership share of the proposed North Plains Connector Transmission Project. The 415-mile high-voltage direct current transmission line would interconnect the Colstrick transmission system in eastern Montana to two locations in North Dakota. This project was identified as part of our preferred resource strategy in the draft integrated resource plan filed in October. Projects like this are crucial to meeting our customers' growing need for energy, as well as our own clean energy goals. And in addition to future transmission capacity needs, new generation resources will be needed as early as 2029 to ensure we can continue to meet our customers needs with reliable and low cost energy.
Speaker Change: And earlier this week, we signed a memorandum of understanding to work toward an ownership share of the proposed North Plains connector transmission project.
Speaker Change: 415 mile High voltage direct current transmission line with interconnect the closer transmission system in eastern Montana to two locations in North Dakota.
Speaker Change: This project was identified as part of our preferred resource strategy and the draft integrated resource plan filed in October.
Speaker Change: Projects like this are crucial to meeting our customers' growing need for energy as well as our own clean energy goals.
Speaker Change: And in addition to future transmission capacity needs new generation resources will be needed as early as 2029 to ensure we can continue to meet our customers' needs with reliable and low cost energy.
Heather Rosentrater: We expect to begin a request for proposal process shortly after finalizing our integrated resource plan in January of 2025. And as part of that request for proposal, we do expect to include ownership options through self-build and build transfer agreement options.
Speaker Change: We expect to begin a request for proposal process. Shortly after finalizing our integrated resource plan in January of 2025, and as part of that request for proposal. We do expect to include ownership options yourself build and build transfer agreement options.
Kevin Christie: And with that, I'll turn it over to Kevin for a discussion of financial results. Thanks Heather and good morning everyone.
Speaker Change: And with that I'll turn it over to Kevin for a discussion of financial results.
Kevin Christie: Thanks, Heather and good morning, everyone.
Kevin Christie: Dennis, I'd like to start by congratulating you and Mo on your retirement. It has been my extreme privilege to report to you for almost my entire 19-year career here at Avista. stepped into the CEO role right before the COVID pandemic. And wow, what a ride it's been. Dennis has been exactly the leader this company required during the pandemic and over the last several post-pandemic years. The investor community likely hasn't had the opportunity to see Dennis's belief in the importance of the right culture for the company. He's had a laser focus on both preserving the best parts of our culture while continuously improving it as well.
Kevin Christie: Dennis I'd like to start by congratulating, you and MAU on your retirement.
Kevin Christie: It has been my extreme privilege to report to you for almost my entire 19 year career here at Avista.
Speaker Change: You stepped into the CEO role right before the Covid pandemic and while what are right. It's been.
Speaker Change: Dennis has been exactly the leader of this company required during the pandemic and over the last several post pandemic years.
Speaker Change: The investor community likely hasn't had the opportunity to see Dennis his belief in the importance of the right culture for the company.
Speaker Change: He has had a laser focus on both preserving the best parts of our culture.
Speaker Change: We'll continuously improving that as well.
Kevin Christie: and that focus has made such a positive difference. Dennis is also incredibly thoughtful, warm, easy to talk to, and above all, loyal. He's loyal to our investors, customers, communities, and employees, and has strived for the best outcomes for all.
Speaker Change: And that focus has made such a positive difference.
Speaker Change: And this is also incredibly thoughtful war easy to talk to and above all loyal.
Speaker Change: These loyal to our investors customers communities and employees that strive for the best outcomes for all.
Kevin Christie: I wish you the very best, and you will be greatly missed.
Speaker Change: I wish you the very best and you will be greatly missed.
Kevin Christie: I'm also extraordinarily excited for Heather as we move into a new era. We are in very good hands and she is the perfect choice to replace Dennis as we look toward the future.
Speaker Change: I'm also extraordinarily excited for Heather as we move into a new era.
Speaker Change: We are in very good hands and she is the perfect choice to replace Dennis as we look towards the future.
Kevin Christie: Now turning to our earnings, Avista Utilities. Results for the third quarter and year-to-date show continued improvement from 2023. This is largely due to the effects of our general rate In the third quarter, we recognized a pre-tax expense of $3.2 million under the Energy Recovery Mechanism, or ERM. Power supply costs came in a little higher than we expected, and year-to-date, we've recognized a $7.8 million pre-tax expense under the ERM. AAL&P's results for the third quarter were in line with our expectations, and they're once again on track to meet their full-year earnings target.
Speaker Change: Now turning to our earnings Avista utilities.
Speaker Change: Our results for the third quarter and year to date show continued improvement from 2023. This.
Speaker Change: This is largely due to the effects of our general rate cases.
Speaker Change: In the third quarter, we recognized a pre tax expense of $3 2 million under the energy recovery mechanism or <unk>.
Speaker Change: Power supply costs came in a little higher than we expected and year to date, we've recognized a $7 8 million pre tax expense under the <unk>.
Speaker Change: <unk> results for the third quarter were in line with our expectations and they're once again on track to meet their full year earnings targets.
Kevin Christie: Year to date at our other businesses, we've recognized a three cent loss per diluted share due to the result of periodic market valuations within our portfolio of investment. We expected that the M&A and IPO activity in the private equity market along with Public Clean Tech Market Comparables, which, in part, drive valuations in our other businesses. would improve in the latter half of 2024. That improvement has not yet materialized as we expected.
Speaker Change: Year to date at our other businesses, we've recognized the <unk> <unk> loss per diluted share due to the result of periodic market valuations within our portfolio of investments.
Speaker Change: We expected that the M&A and IPO activity in the private equity markets.
Speaker Change: Long with public clean tech market, Comparables, which in part drive valuations in our other businesses.
Speaker Change: Would improve in the latter half of 2024.
Speaker Change: That improvement has not yet materialized as we expected even so I'm quite optimistic about the future opportunities within our investment portfolio.
Kevin Christie: Even so, I'm quite optimistic about the future opportunities within our investment portfolio. You've heard me say before, and it's still true today, that our regulatory strategy is critical to our success. We expect a constructive rate order from our Washington General Rate Cases in mid-December, and earlier this month we filed a General Rate Case in Oregon. We plan to file our next case in Idaho in the first quarter of 2025. We are committed to investing the necessary capital in our utility infrastructure. Capital expenditures at Avista Utilities were $389 million in the first three quarters of 2024.
Speaker Change: You've heard me say before and it's still true today.
Speaker Change: Our regulatory strategy is critical to our success.
Speaker Change: We expect a constructive rate order from our Washington General rate cases in mid December and earlier. This month, we filed a general rate case in Oregon, we.
Speaker Change: We plan to file our next case in Idaho in the first quarter of 2025.
Speaker Change: We are committed to investing the necessary capital in our utility infrastructure.
Speaker Change: Capital expenditures at Avista utilities were $389 million in the first three quarters of 2024.
Kevin Christie: Our planned capital expenditures are about $515 million for the year.
Speaker Change: Our planned capital expenditures are about $515 million for the year.
Kevin Christie: We just finalized our capital plan for 2027. And over the next three years, we expect to spend about $1.7 billion in capital to ensure that we can continue to support customer growth and maintain our system to provide safe and reliable energy to our customers. That includes investments of $525 million in 2025, $575 million in 2026, and now $600 million in 2027. We expect capital expenditures at AEL&P to be $21 million and investments at our other businesses to be $10 million in 2024. On the liquidity front, as of September 30, we had $212 million available under our committed line of credit, and $43 million available under our letter of credit facility.
Speaker Change: We just finalized our capital plan for 2027 and over the next three years, we expect to spend about $1 7 billion.
Speaker Change: And capital to ensure that we can continue to support customer growth and maintain our system to provide safe and reliable energy to our customers.
Speaker Change: That includes investments of $525 million in 2025 $575 million in 2026, and now $600 million in 2027.
Speaker Change: We expect capital expenditures at <unk> to be $21 million in investments at our other businesses to be $10 million in 2024.
Speaker Change: On the liquidity front as of September 30, we had $212 million available under our committed line of.
Speaker Change: Credit and $43 million available under a letter of credit facility.
Kevin Christie: We expect to issue approximately $70 million of common stock in 2024 to fund our capital spending. Through September 30, we've issued $35.7 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. Turning to our earnings guidance, as I mentioned, we expected that the private equity markets would recover through the latter half of 2024, which has not yet occurred. As a result, we now expect our other businesses to have a net loss in the range of $0.04 to $0.06 per diluted share in 2024.
Speaker Change: We expect to issue approximately $70 million of common stock in 2024 to fund our capital spending through September 30, we've issued $35 7 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.
Speaker Change: Turning to our earnings guidance as I mentioned, we expected that the private equity markets would recover through the latter half of 2024, which has not yet occurred as a result, we now expect our other businesses to have a net loss in the range of $4 <unk> per diluted share in 2024 and because of that expectation.
Kevin Christie: And because of that expectation, we are lowering our consolidated earnings guidance for 2024 by $0.10 to a range of $2.26 to $2.46 per diluted share. as a result of higher than expected power supply costs, as well as maintenance of thermal generation assets. medical, bad debt, and ongoing legal costs, we expect Avista utilities to contribute near the low end of the range in 2024. This includes the expected IRM impact of a negative 8 cents per diluted share, which is partially offset by the impact of the new large customer we added earlier this year. We continue to expect AEL&P to contribute in the range of $0.09 to $0.11 per diluted share in 2024.
Speaker Change: We're lowering our consolidated earnings guidance for 2024 by 10.
Speaker Change: To a range of $2 26.
Speaker Change: The $2 46 per diluted share.
Speaker Change: As a result of higher than expected power supply costs as well as maintenance of thermal generation assets.
Speaker Change: Medical bad debt and ongoing legal costs, we expect avista utilities to contribute near the low end of the range in 2024.
Speaker Change: This includes the expected impact of a negative eight cents per diluted share, which is partially offset by the impact of the new large customer we added earlier this year.
Speaker Change: We continue to expect <unk> to contribute in the range of nine <unk> to <unk> 11 per diluted share and 24.
Kevin Christie: Following our rate case decision in December, we expect to give 2025 guidance in February on our fourth quarter earnings call.
Speaker Change: Following a rate case decision in December we expect to give 2025 guidance in February on our fourth quarter earnings call.
Operator: Now we'll be happy to take your questions. Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your questions, please press star 11 again. Please stand by while we compile the Q&A roster. One moment.
Speaker Change: Now, we'll be happy to take your questions.
Speaker Change: Thank you as a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Yeah.
Speaker Change: One moment.
Brian Rousseau: Our first question comes from Jillian DeMolin-Smith from Jeffrey. Your line is open.
Speaker Change: Our first question comes from Julien Dumoulin Smith from Jefferies. Your line is open.
Brian Rousseau: Yeah, it's actually Brian Rousseau at Jeffries. Good morning.
Speaker Change: Yeah, Hi, it's actually Brian Russo at Jefferies. Good morning.
Heather Rosentrater: Hey Brian. Hey just on the announcement of your participation in the North Plains Connector, what are the upcoming milestones that we should be aware of for you to finalize?
Speaker Change: Good morning, Brian.
Brian Russo: Hey, just on the announcement of your participation.
Speaker Change: In the North claims connector.
Speaker Change: What are the upcoming milestones that we should be aware of for you to finalize.
Heather Rosentrater: the non-binding MOU, and then just More specifically, how does that fit in with the integrated resource plan you just filed, you know, in terms of longer term capacity needs, reliability, et cetera?
Speaker Change: The nonbinding.
Speaker Change: Mou and then just.
Speaker Change: More specifically, how does that fit in with the.
Speaker Change: The integrated resource plan, you just filed in terms of.
Speaker Change: Longer term capacity needs reliability et cetera.
Heather Rosentrater: Great, thanks, Brian. I'm happy to answer that. And yeah, we're very excited about taking this next step.
Speaker Change: Great. Thanks, Brian I'm happy to answer that and yes, we're very excited about taking this next step.
Heather Rosentrater: That is an important piece of our integrated resource plan and having access to additional markets and high load factor wind facilities in the Midwest. So it is a key piece of our future resource needs. And the next steps include development of definitive agreements, probably in the next six to nine months. And then we will continue identifying next steps from there. So that's the next near term step.
Speaker Change: That is an important piece of our integrated resource plan and having access to additional markets and high load factor wind facilities in the Midwest. So it is a key piece of our future resource needs and the next steps include development of definitive agreements probably in the next.
Speaker Change: Six to nine months.
Speaker Change: And and then we will continue identifying next steps from there. So that's the next near term step.
Heather Rosentrater: Okay, and I think according to your press release, it doesn't seem like there's any financial commitment from Avista until the, um... The project is operational, is that correct? There will likely be some payments earlier, smaller, but the majority would be potentially after it's energized.
Speaker Change: Okay. Thank you.
Speaker Change: <unk> press release doesn't seem like there's any financial commitment from our best.
Speaker Change: Included.
Speaker Change: Yes.
Speaker Change: The project is operational is that correct.
Speaker Change: There will likely be some payments earlier smaller.
Speaker Change: But the majority would be potentially after after its energized.
Heather Rosentrater: Okay, great.
Heather Rosentrater: And then the upcoming RFPs for new generation, I think you referenced 2029 and the scenarios of self-build, build on transfer, etc. Is there anything different in this RFP versus past RFPs where There seem to be limited outcomes for Avista-owned generation relative to the PPAs that the company has signed in the past, just trying to get a sense of maybe what the size of these RFPs are and what are the, you know, when will final bids be due, etc.
Speaker Change: Okay, Great and then the.
Speaker Change: Upcoming Rfps for new generation I think.
Speaker Change: You referenced 2029.
Speaker Change: And the scenarios of self build built on transfer.
Speaker Change: Et cetera.
Speaker Change: Is there anything different in this RFP versus past Rfps, where.
Speaker Change: There seem to be limited.
Speaker Change: Comes for Avista owned generation.
Speaker Change: Relative to the PPA.
Speaker Change: The company has signed in the past just trying to get a sense of maybe what the size of these rfps are and what are the.
Speaker Change: When will final bids <unk> et cetera.
Heather Rosentrater: I don't think we have the details related to when final bids will be due in the RFP, but it will be in early 2025 is when we'll go out for it. And with related to self-build and build transfer options, the tax implications have changed with the IRA, and so we do feel that there'll be more competitive options related to us having ownership in certain projects.
Speaker Change: I don't think we have the details related to when final bids will be due in the RFP, but it will be in early 2025 is when we will go out for it.
Speaker Change: And the with related to yourself build and build transfer options.
Speaker Change: Tax.
Speaker Change: Applications have changed with the IRS and so we do feel that there'll be more.
Speaker Change: Mark competitive options related to us having ownership in certain projects.
Heather Rosentrater: Okay, great.
Kevin Christie: And then lastly, just, you know, on the RM and the volatility, and the expense year to date, just bigger picture, are there ways for Avista to, you know, optimize the generation portfolio more going forward and possibly adding more company owned generation? Is that one solution to managing, you know, what seems to be ongoing volatility with your power supply costs?
Speaker Change: Okay, Great and then lastly, just on the ERM and the volatility there.
Speaker Change: And the expense year to date.
Speaker Change: Bigger picture.
Speaker Change: Are there ways for this to.
Speaker Change: Optimize the generation portfolio more going forward and possibly adding more company owned generation is that one.
Speaker Change: Solution to managing.
Speaker Change: It seems to be ongoing volatility with your power supply cost.
Kevin Christie: Hey, Brian, it's Kevin. Thanks for the question. I'm happy to take that one.
Kevin Christie: Hey, Brian its Kevin Thanks for the question I'm happy to take that one and I'll start by talking about the arm itself in a regulatory proceeding.
Kevin Christie: And I'll start by talking about the arm itself and our regulatory proceeding. As you know, we have filed for and we made some modifications during the pendency of the case to significantly change the IRM and the financial impact that would have on us. I think our team does a great job of optimizing our resources to the best of our ability. And at the same time, power supply dynamic in the Pacific Northwest has changed significantly. And with that change, I think a change of the IRM is appropriate. They'll keep optimizing our resources. And I think if we have more resources that we directly own, that would help, too.
Kevin Christie: As you know we have filed for and we made some modifications during the pendency of the case to significantly change the harmony financial impact that would have on us.
Speaker Change: I think our team does a great job of uptime, optimizing our resources to the best of our ability and at the same time power supply dynamic in the Pacific Northwest has changed significantly and with that change I think a change of the arm as appropriate they'll keep optimizing our resources and I think if we have more resources that we directly own that would help too.
Kevin Christie: But I think the biggest impact is the change to the IRM.
Speaker Change: But I think the biggest impact is the change to the year.
Kevin Christie: Okay, great.
Brian Rousseau: And good luck in the future, Dennis. Appreciate it. Thank you.
Speaker Change: Okay great.
Speaker Change: Good luck in the future Dennis I appreciate it thank you.
Brian Rousseau: Thanks, Brian. Appreciate it.
Dennis Vermillion: Okay. Thanks, Brian appreciate it.
Operator: Thank you.
Operator: Again, to ask a question, you need to press star one one on your telephone and wait for your name to be announced.
Dennis Vermillion: Thank you.
Speaker Change: Again to ask a question you need to press star one on your telephone and wait for your name to be announced.
Anthony Crowdell: Our next question comes from Anthony Crowdell with Mizzouho.
Speaker Change: Our next question comes from Anthony <unk> with Mizuho. Your line is open.
Anthony Crowdell: Your line is open. Hey, good morning. And Dennis, I echo Brian's comments.
Speaker Change: Okay, Hey, good morning.
Speaker Change: Dennis Echo Brian's comments best of luck.
Anthony Crowdell: Best of luck in your next endeavor.
Speaker Change: And your next endeavor.
Kevin Christie: Just one question I was having was just on the other segment. I think it's now flipped to a loss for the year for 2024. Just to give us more detail on the four to six cent loss. Is that mainly a mark to market on the unregulated business there?
Speaker Change: Okay.
Anthony: One question I was having was just on the other segment.
Anthony: Yes.
Speaker Change: It is now flipped to a loss for the year for 2024.
Speaker Change: If you give us more detail on the 4% to six cent loss is that mainly a mark to market on the unregulated business there.
Kevin Christie: Yeah, that that's correct. Anthony, it's Kevin. Nice to chat with you.
Speaker Change: Yes, that's correct Anthony it's Kevin.
Kevin Christie: And I think I think it takes it's worth taking a minute to talk about that other segment given the change in the guidance that we have there. It is around mark to market and the valuations haven't materialized as we discussed in our comments. I think it's important to also remember that it's a very small but important piece of our business. When we look at that other segment, it's just 2% when you compare original guidance for utility versus the non-reg side. The cleantech market has improved. It's a little bit more volatile, certainly, but I'm seeing some pretty good signs that we could see exits and improved valuation down the road.
Speaker Change: With you.
Speaker Change: And I think I think it's worth taking a minute to talk about that other segment given the.
Speaker Change: The change in the guidance that we have there it is around mark to market and the valuations haven't materialized as we discussed in our comments.
Speaker Change: It's important to also remember that it's a very small but important piece of our business. When we look at that other segment. It is just 2% when you compare our original guidance for utility versus the non Reg side. The cleantech market Hasnt improved it's a little bit more volatile certainly, but I've seen some pretty good sign.
Speaker Change: That we could see exits and improve valuation down the road it.
Kevin Christie: It's also important to remember how strategic the investments are and the benefit that it brings back to the utility. We really do think that this is a strong investment for us as we're better positioned to be that utility of the future.
Speaker Change: Also important to remember how strategic the investments are in the benefit that it brings back to the utility we really do think that this is <unk>.
Speaker Change: Strong investment for us as we're better positioned to be that utility of the future. So although there were some headwinds this quarter.
Kevin Christie: So although there were some headwinds this quarter and this year thus far, we think that 2025 and beyond look pretty good.
Speaker Change: And this year that thus far we think that 2025 and beyond look pretty good.
Anthony Crowdell: Great, and then last question I have, I guess, is on the state itself, on Washington, and I just don't know the results. I think there were two initiatives, or ballot initiatives, maybe the right description on maybe bringing gas into homes, and I apologize, I forgot the other one. Do you know how those fared in the election yesterday?
Speaker Change: Great and then.
Speaker Change: Last question I have I guess is on the on the state itself on Washington.
Speaker Change: And I just don't know the results I think there were two initiatives.
Speaker Change: Ballot initiatives right.
Speaker Change: Description on maybe.
Speaker Change: Bringing gas into homes.
Speaker Change: And I apologize I forgot the other one.
Speaker Change: How those fared in the election yesterday.
Kevin Christie: Yeah, yeah, Anthony. The two were I-2117 and I-2066. So the 2117 was the or is the repeal of the CCA, the Climate Commitment Act, and that one has failed. So the the Climate Commitment Act will. which is the carbon trading, cap and trade program in the state of Washington that will stay in place. The other one, the 2066 is the. The Energy Choice one that you're referring to, and that one is, it has a slight lead. And so, you know, but it's too early to, it's too close to call. There's still a lot of un...
Speaker Change: Yes Anthony.
Speaker Change: The two were I 21, 2017, and <unk> 2066, so the 21 17 was.
Speaker Change: Or is the repeal of the CCA the climate commitment Act.
Speaker Change: And.
Speaker Change: That one has failed so the the climate commitment Act will.
Speaker Change: Which is the.
Speaker Change: The carbon trading.
Speaker Change: Cap and trade program in the state of Washington that will we will stay in place.
Speaker Change: The other one the 2066 is the.
Speaker Change: The energy choice, one that youre, referring to and that one is it has a slight lead.
Speaker Change: And so.
Speaker Change: But it's too early to it's too close to call.
Speaker Change: Theres still a lot of.
Kevin Christie: uncounted votes in the state and so we really don't have a sense for where it's going to end up.
Speaker Change: Uncounted votes in the state.
Speaker Change: So we really we really don't have a sense for where its going to end up.
Kevin Christie: Should know probably by the end of the week I would guess but it's pretty close and there's still I think there's still like 700,000 ballots last I heard that still to be counted in the state of Washington. So stay tuned on that one.
Speaker Change: Should know probably by the end of the week I would guess, but it's pretty close and there is still I think theres still like 700000 ballots last I heard that still to be counted in the state of Washington.
Speaker Change: So stay tuned on that one.
Anthony Crowdell: Stay tuned. Well, thanks so much. Appreciate your time and looking forward to seeing you guys in Florida. Great, thanks.
Speaker Change: No.
Speaker Change: Thanks, So much I appreciate your time and now looking forward to seeing you guys in Florida.
Speaker Change: Great. Thanks.
Speaker Change: Thanks.
Operator: Thank you.
Speaker Change: Thank you.
Sophie Karp: Our next question is from Sophie, excuse me, Sophie Karp with KBCM. Your line is open.
Speaker Change: Our next question is from Sophie excuse me Sophie Karp KBC Ann Your line is open.
Sophie Karp: Hi, guys. Good morning. Thank you for taking my question. Good morning.
Sophie Karp: Hi, guys. Good morning, Thank you for taking my question.
Speaker Change: Hi, Good morning, Good morning, Yes, so maybe could you talk a little bit about the wildfire season, now that it's kind of in there.
Heather Rosentrater: Yeah, so maybe could you talk a little bit about the wildfire season now that it's kind of in the rearview mirror, lessons learned, like did you have to do PSPS and kind of what you learned from that?
Speaker Change: Miro.
Speaker Change: Lessons learned like did you have to the PSP ads and kind of what you learn from that.
Heather Rosentrater: And also, you know, the tackle on that, are there any legislative initiatives with respect to wildfire? response liabilities that you could be pursuing in the upcoming legislative session in Washington. Thank you.
Speaker Change: And also now with <unk>.
Speaker Change: Are there any legislative initiatives with respect to wildfire.
Speaker Change: Response liabilities that you could be pursuing in the upcoming legislative session in Washington. Thank you.
Heather Rosentrater: Yeah, Sophie, Heather, I'm happy to answer that one for you. And we had do a lot of work in the off-season preparing for wildfire season. And so we had prepared with public safety power shutoff tool in our toolkit. And in late September, we did have a condition that caused us to move one of our circuits. It was about 1500 customers on that circuit that experienced a public safety power shutoff. But all of the work that we had done to coordinate with our agencies to communicate and make customers aware of that and just internal planning resulted in us being able to restore customers that same day once conditions were safe.
Speaker Change: Yeah.
Speaker Change: I'm happy to answer that one for you and.
Speaker Change: We do a lot of work in the off season preparing for wildfire season, and so we had prepared with.
Speaker Change: Public safety power shutoff tool in our tool kit and in late September we did have a condition that caused us to move one of our circuits. It was about 1500 customers on that circuit that.
Speaker Change: Experienced at public safety power shutoff, but all of the work that we had done to coordinate with our agencies to communicate to make customers aware of that and just internal planning resulted in us being able to restore our customers that same day once conditions, where say itself, we were able to learn a lot and.
Heather Rosentrater: So we were able to learn a lot and and be able to minimize the impact to customers through that. So we felt like we had a pretty successful wildfire season this year and implementing the additional tools and resources that we put into place.
Speaker Change: And be able to minimize the impact to customers through that so we felt like we had a pretty successful wildfire season, this year and implementing the additional tools and resources.
Heather Rosentrater: And now we're back into that planning season and looking forward. And some of the things that we're focused on are adding weather stations in our higher risk areas. We use manual weather stations to to support us during this last wildfire season, and then a lot of focus on undergrounding and covered conductors as well. On the legislative side, we have a team that's been putting a lot of work in to move that forward and working with other utilities and other partners, stakeholders in Washington and in Idaho. And we are planning on moving forward legislation in both states in this upcoming legislative session.
Speaker Change: And now we're back into that planning season, and looking forward and some of the things that we're focused on are adding weather stations and our higher risk areas we used.
Speaker Change: Manual weather stations Q.
Speaker Change: To support us during the last wildfire season, and then a lot of focus on under grounding and covered conductors as well on the legislative side, we have a team that's been putting a lot of work in <unk>.
Speaker Change: Can move that forward and working with other utilities and other partners to take holders in Washington, and Idaho, and we are planning on moving forward legislation in both states.
Speaker Change: The legislative session.
Heather Rosentrater: Great, thank you so much. Very helpful, appreciate it.
Speaker Change: Great. Thank you so much very helpful. I appreciate it.
Speaker Change: Thanks.
Heather Rosentrater: Thanks.
Speaker Change: Yes.
Operator: If you still would like to ask a question, you can press star 11 on your telephone and wait for your name to be announced. One moment. for our next question.
Speaker Change: You still would like to ask a question you can press star one on your telephone and wait for your name to be announced.
Speaker Change: One moment.
Speaker Change: Our next question.
Stacey Wenz: I'm showing no further questions at this time, so I would now like to turn it back to Stacey Wenz for closing remarks. Thank you all for joining us today and for your interest in Avista. Have a great day.
Speaker Change: I am showing no further questions at this time, so I'd now like to turn it back to Stacy Wang for closing remarks.
Speaker Change: Thank you all for joining us today and for your interest in Vista have a great day.
Operator: This does conclude the program. You may now disconnect.
Speaker Change: This does conclude the program you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].