AVISTA CORP Q4 FY2024 earnings call

• Regulatory strategy was central, with Washington general rate cases concluding in December with a constructive order, including increased return on equity to 9.8%, but not supporting modification of energy recovery mechanism. Plans to build on outcomes in Oregon and Idaho rate cases.
• Invested a record $510 million at Avista Utilities in 2024. Entered MOU for North Plains Connector, which is part of electric integrated resource plan filed in December, with plans to issue RFP for up to 375 MW of generation online in 2029.
• Prioritized wildfire mitigation, met/exceeded 2024 targets for distribution grid hardening, etc. AI-enabled cameras helped notify DNR of fires. Two wildfire-related bills introduced in Washington legislature.
• Dividend increased for the twenty-third consecutive year, by just over 3% to $1.96 per share, targeting 65%-75% payout range.

Consolidated earnings for the fourth quarter of 2024 were $0.84 per diluted share, compared to $1.08 for the fourth quarter of 2023. For the full year, consolidated earnings were $2.29 per diluted share compared to $2.24 last year. Avista Utilities delivered earnings near the midpoint of its original guidance range for the segment. AEL&P's results were right on target. Our other businesses recognized a $0.09 loss per diluted share in 2024, resulting from periodic market valuations, losses from early-stage joint venture investments, and borrowing costs. Revenue contributions: Avista Utilities' performance was a key part, AEL&P was on target, and other businesses had a loss.

• 2025 consolidated earnings guidance range $2.52 to $2.72 per diluted share. Avista Utilities expected range $2.43 to $2.61, including $0.12 expense from energy recovery mechanism. AEL&P expected $0.09 to $0.11 per diluted share in 2025. Other businesses expected zero contribution in 2025.
• Capital expenditures plan for 2025 is $525 million. Expect capital expenditures from 2025-2029 to be nearly $3 billion, annual growth 5%-6%.
• Expect to issue up to $120 million of long-term debt and up to $80 million of common stock in 2025.

• Regulatory outcomes in Oregon and Idaho rate cases could impact earnings. Energy market uncertainties due to extreme weather, resource adequacy, and carbon policies affecting power supply costs. Volatility in other businesses due to periodic market valuations and borrowing costs related to investments. Wildfire mitigation costs and associated legislative uncertainties.

Q: Just on the guidance for 2025, given past challenges including drag in other business, talk about where seen within range and 4%-6% CAGR?

A: Establishing guidance at midpoint $2.62. Took other to zero, considered O&M levels. Long-term growth rate of 4%-6% with 2025 as base year, expecting regulatory support and capital investments to drive growth.

Q: On Idaho rate case, detail on proceeding and key dates?

A: Very early in process, establishing procedural schedule. Technical hearing could be latter part of July, with settlement opportunities leading up to that date.

Q: On growth rate 4%-6%, expect to hit each year within range or volatility?

A: Generally plan to be in midpoint of range. Multiple jurisdictions can cause lumpy regulatory outcomes, but generally expect 4%-6% barring inflation or incremental investment opportunities.

Q: On not including non-utility business contribution in future, and base year rebase?

A: Going forward, other businesses expected near zero contribution due to past periodic gains/losses. Rebasing depends on rate cases and investments, will update as go from quarter to quarter.

Q: On including energy recovery mechanism negative impact in 2025 guidance, accuracy and quantification?

A: Shift from past practice due to Washington rate case outcome. Including $0.12 negative impact from energy recovery mechanism as no probable scenario to pull up significantly in 2025