Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Avista Corp (AVA, Financial) reported an increase in consolidated earnings for Q3 2024, with $0.23 per diluted share compared to $0.19 in Q3 2023.
- The company has significantly increased its energy assistance programs from $11 million to nearly $40 million annually over the past five years.
- Avista Corp (AVA) has invested over $2 billion in its system, securing more than $90 million in state and federal grants for customer-beneficial projects.
- The company has made progress towards its clean energy goals, with 70% of its peak generating capability expected to come from renewable sources by 2026.
- Avista Corp (AVA) successfully deployed AI-enabled fire detection cameras, enhancing its wildfire mitigation efforts.
Negative Points
- Avista Corp (AVA) faced higher than expected power supply costs, impacting its financial performance.
- The company's other businesses segment reported a net loss due to periodic market valuations, affecting overall earnings guidance.
- Avista Corp (AVA) lowered its consolidated earnings guidance for 2024 by $0.10 due to ongoing financial challenges.
- The company recognized a pre-tax expense of $3.2 million under the energy recovery mechanism, indicating cost pressures.
- Avista Corp (AVA) anticipates additional capital expenditures, with $1.7 billion planned over the next three years, which may impact financial flexibility.
Q & A Highlights
Q: Can you provide details on the North Plains connector project and its significance in your integrated resource plan?
A: Heather Rosentrater, President and COO, explained that the North Plains connector is crucial for accessing additional markets and high-load factor wind facilities in the Midwest. The next steps include developing definitive agreements within the next 6 to 9 months. There will likely be some smaller payments before the project is operational, but the majority will be after it's energized.
Q: What are the expectations for the upcoming RFPs for new generation resources?
A: Heather Rosentrater stated that the RFP process will begin in early 2025. The tax implications have changed with the IRA, making ownership options more competitive. The RFP will include self-build and build transfer options, aiming to meet new generation needs by 2029.
Q: How is Avista addressing the volatility in power supply costs?
A: Kevin Christie, CFO, mentioned that Avista is optimizing its resources and has filed for changes to the energy recovery mechanism (ERM) to mitigate financial impacts. Owning more resources directly could help, but the primary focus is on modifying the ERM.
Q: Can you elaborate on the financial loss in the 'other' segment for 2024?
A: Kevin Christie explained that the loss is due to mark-to-market valuations in the unregulated business, which haven't improved as expected. Despite this, the investments are strategic and beneficial for positioning Avista as a utility of the future, with optimism for improved valuations in 2025 and beyond.
Q: What lessons were learned from the recent wildfire season, and are there any legislative initiatives planned?
A: Heather Rosentrater highlighted the successful implementation of public safety power shutoffs (PSPS) and coordination with agencies. Avista plans to add weather stations and focus on undergrounding and covered conductors. Legislative initiatives are being pursued in Washington and Idaho for the upcoming session.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
