• Consolidated Earnings (Q4 2024): $0.84 per diluted share, down from $1.08 in Q4 2023.
• Consolidated Earnings (Full Year 2024): $2.29 per diluted share, up from $2.24 in 2023.
• Return on Equity: Increased to 9.8% by the Washington Commission.
• Capital Expenditures (2024): $510 million at Avista Utilities, $23 million at AEL&P, and $10 million at other businesses.
• Available Liquidity (Year-End 2024): $153 million under committed line of credit, $38 million under letter of credit facility.
• Dividend Increase: Over 3% to $1.96 per share.
• 2025 Earnings Guidance: Consolidated range of $2.52 to $2.72 per diluted share.
• 2025 Capital Plan: $525 million, excluding potential RFP process and transmission projects.
• O&M Expense (2025): Approximately $470 million, up 15% from 2024.
• Expected Return on Equity (Avista Utilities): 8.8% for 2025.

• Warning! GuruFocus has detected 11 Warning Signs with AVA.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Avista Corp (NYSE:AVA) achieved a 5% improvement in utility earnings from 2023, despite higher costs.
• The Washington General rate cases concluded with a constructive order, increasing the return on equity to 9.8%.
• Avista Corp (NYSE:AVA) invested a record $510 million in 2024 to enhance customer service and infrastructure.
• The company is optimistic about the North Plains connector project, which will improve regional reliability and resource adequacy.
• Avista Corp (NYSE:AVA) has initiated a 2025 earnings guidance range of $2.52 to $2.72 per diluted share, indicating confidence in future performance.

Negative Points

• Consolidated earnings for Q4 2024 were $0.84 per diluted share, down from $1.08 in Q4 2023.
• The Washington Commission did not support the modification of the energy recovery mechanism (ERM), impacting financial outcomes.
• Avista Corp (NYSE:AVA) recognized a $0.09 loss per diluted share in 2024 from other businesses due to market valuations and joint venture investments.
• The company faces challenges with unpredictable extreme weather events affecting power supply costs.
• Avista Corp (NYSE:AVA) expects a negative impact of $0.12 from the ERM in 2025, with no probable scenario for improvement.

Q & A Highlights

Q: Can you discuss the guidance for 2025, considering past challenges and the impact of other businesses? A: Kevin Christie, CFO, explained that the guidance is set at a midpoint of $2.62 per share, with other businesses contributing zero. The guidance includes the Energy Recovery Mechanism (ERM) impact. They are confident in meeting the guidance range and potentially exceeding the midpoint. The long-term growth rate is projected at 4% to 6%, with 2025 as the base year, supported by regulatory outcomes and potential growth opportunities.

Q: Could you provide more details on the Idaho rate case proceedings and any key dates? A: Kevin Christie noted that the Idaho rate case is in the early stages, with a procedural schedule being established. A technical hearing could occur in late July if necessary. They aim for a settlement, as they have had success in the past, but will proceed to a hearing if needed.

Q: Regarding the 4% to 6% growth rate, do you expect to hit this range each year, or could there be volatility? A: Kevin Christie stated that they generally plan to be within the 4% to 6% range, though regulatory outcomes can be variable. Factors like inflation and capital investment opportunities could affect this, but they aim to stay within the range.

Q: Will the base year for growth projections be updated annually, or will it remain fixed? A: Kevin Christie mentioned that they would like to rebase annually, depending on rate case progress and investment opportunities. The ability to rebase will be influenced by regulatory outcomes and capital investments.

Q: Are non-utility business contributions excluded from the 4% to 6% growth projection? A: Kevin Christie confirmed that non-utility businesses are expected to contribute zero in 2025, and this approach will likely continue unless there are significant changes. Historically, these businesses have not consistently contributed positively.

Q: Is the ERM impact included in the 2025 base year, and can you quantify it? A: Kevin Christie explained that the ERM impact is included in the 2025 base year, marking a shift from past practices. They are including a $0.12 negative impact from the ERM, with no foreseeable scenario for significant improvement.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.