Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Avista Corp (AVA, Financial) reported consolidated earnings of $0.29 per diluted share for Q2 2024, up from $0.23 in Q2 2023.
- Year-to-date consolidated earnings were $1.20 per diluted share, compared to $0.96 last year.
- The company confirmed its consolidated earnings guidance of $2.36 to $2.56 per diluted share for 2024.
- Avista Corp (AVA) is making significant investments in infrastructure to enhance reliability and mitigate wildfire risks.
- The Kettle Falls biomass generating station celebrated its 40th anniversary, showcasing Avista Corp (AVA)'s commitment to clean energy and environmental stewardship.
Negative Points
- Despite improvements, Avista Corp (AVA) anticipates ending the year with a negative impact on earnings of $0.07 per diluted share due to the Energy Recovery Mechanism.
- The company recognized a $0.03 loss per diluted share from periodic market valuations within its portfolio of investments.
- Avista Corp (AVA) is facing higher peak demand on its system due to extreme weather events, indicating a growing need for additional generation capacity.
- The company was unable to reach a settlement in its Washington general rate case, leading to a two-day hearing scheduled for September 30.
- Avista Corp (AVA) expects to issue approximately $70 million of common stock in 2024 to fund its capital spending, which may dilute existing shareholders.
Q & A Highlights
Q: 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, actually received the DOE grant the other day. Any thoughts on what your ownership structure might look like?
A: 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're -- we think it's very promising in terms of us being a part of it, and we're just continuing those conversations. (Heather Rosentrater, President, Chief Operating Officer)
Q: On the Washington rate cases, has the settlement window closed, or can you still meet with interveners and interested parties ahead of the hearing?
A: 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 over], we'll jump into those discussions. We'll let you know if something comes of it. (Kevin Christie, Chief Financial Officer, Treasurer, Senior Vice President - Regulatory Affairs)
Q: The previously disclosed large electric customer, right, that's offsetting the $0.07 of ERM 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 through '25 or even 2026, depending on the outcome of this rate case. Is that how we should look at it?
A: 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 will get pulled into and be considered part of the overall power supply outcome. (Kevin Christie, Chief Financial Officer, Treasurer, Senior Vice President - Regulatory Affairs)
Q: Just one on the nonregulated 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?
A: Well, the nonregulated 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. 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. (Kevin Christie, Chief Financial Officer, Treasurer, Senior Vice President - Regulatory Affairs)
Q: Can you provide more details on the wildfire mitigation efforts and how they are progressing?
A: 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. We're leveraging our fireweather 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. (Heather Rosentrater, President, Chief Operating Officer)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
