Avista Corp. (
NYSE: AVA) today reported net income
of $17.5 million, or earnings of $0.23 per diluted share, for the
second quarter of 2023, compared to $11.5 million, or $0.16 per
diluted share, for the second quarter of 2022. For the six months
ended June 30, 2023, net income was $72.3 million, or $0.96
per diluted share, compared to $83.0 million, or $1.15 per diluted
share for the six months ended June 30, 2022.
“Our second quarter results are ahead of our expectations, and
I'm proud of how we are managing our costs. Our results show the
benefit of these efforts, and also reflect the impact of timing of
certain expenses and higher than expected costs under the Energy
Recovery Mechanism (ERM) in Washington resulting from poor hydro
conditions," said Avista President and CEO Dennis Vermillion.
"We have reached constructive outcomes in the settlement of our
Idaho general rate cases, and the settlement-in-principle of our
Oregon general rate case is in line with our expectations. These
results support our efforts to invest in and maintain our
infrastructure, allowing us to continue to provide reliable energy
to our customers and affording us the opportunity to move closer to
earning our allowed return.
“AEL&P met expectations and is on track to meet the full
year guidance. At our other businesses, we expect to meet our
guidance for the full year, although we experienced losses in the
first half of 2023.
"We are confirming our 2023 consolidated earnings guidance with
a range of $2.27 to $2.47 per diluted share, although we expect to
be in the lower end of our consolidated and utility guidance range
due to higher net costs under the ERM. The month of May brought
record-high temperatures to our service territory and caused the
snowpack to melt faster than expected. As a result, this has been
one of our worst years for hydroelectric generation," Vermillion
added.
Summary Results: Avista Corp.’s results for the
second quarter and year-to-date 2023 as compared to the same
periods of 2022 are presented in the table below (dollars in
thousands, except per-share data):
|
|
Second Quarter |
|
|
Year-to-Date |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net Income (Loss) by Business Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
Avista Utilities |
|
$ |
18,810 |
|
|
$ |
3,950 |
|
|
$ |
70,437 |
|
|
$ |
71,228 |
|
AEL&P |
|
|
1,359 |
|
|
|
771 |
|
|
|
5,401 |
|
|
|
4,064 |
|
Other |
|
|
(2,685 |
) |
|
|
6,732 |
|
|
|
(3,509 |
) |
|
|
7,726 |
|
Total net income |
|
$ |
17,484 |
|
|
$ |
11,453 |
|
|
$ |
72,329 |
|
|
$ |
83,018 |
|
Earnings (Loss) per Diluted Share by Business
Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
Avista
Utilities |
|
$ |
0.25 |
|
|
$ |
0.06 |
|
|
$ |
0.93 |
|
|
$ |
0.99 |
|
AEL&P |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.07 |
|
|
|
0.05 |
|
Other |
|
|
(0.04 |
) |
|
|
0.09 |
|
|
|
(0.04 |
) |
|
|
0.11 |
|
Total earnings per diluted share |
|
$ |
0.23 |
|
|
$ |
0.16 |
|
|
$ |
0.96 |
|
|
$ |
1.15 |
|
Analysis of 2023 Consolidated Earnings
The table below presents the change in net income and diluted
earnings per share for the second quarter and year-to-date 2023 as
compared to the same periods in 2022, as well as the various
factors, shown on an after-tax basis, that caused such change
(dollars in thousands, except per-share data):
|
|
Second Quarter |
|
|
Year-to-Date |
|
|
|
Net |
|
|
Earnings |
|
|
Net |
|
|
Earnings |
|
|
|
Income (a) |
|
|
per Share |
|
|
Income (a) |
|
|
per Share |
|
2022 consolidated earnings |
|
$ |
11,453 |
|
|
$ |
0.16 |
|
|
$ |
83,018 |
|
|
$ |
1.15 |
|
Changes in net income and
diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Avista Utilities |
|
|
|
|
|
|
|
|
|
|
|
|
Electric utility margin (including intracompany) (b) |
|
|
10,812 |
|
|
|
0.14 |
|
|
|
10,549 |
|
|
|
0.14 |
|
Natural gas utility margin (including intracompany) (c) |
|
|
2,060 |
|
|
|
0.03 |
|
|
|
6,713 |
|
|
|
0.09 |
|
Other operating expenses (d) |
|
|
1,187 |
|
|
|
0.01 |
|
|
|
(7,031 |
) |
|
|
(0.10 |
) |
Depreciation and amortization (e) |
|
|
(2,617 |
) |
|
|
(0.03 |
) |
|
|
(4,660 |
) |
|
|
(0.06 |
) |
Interest expense (f) |
|
|
(5,503 |
) |
|
|
(0.07 |
) |
|
|
(11,430 |
) |
|
|
(0.15 |
) |
Other (g) |
|
|
3,438 |
|
|
|
0.05 |
|
|
|
6,357 |
|
|
|
0.08 |
|
Income tax at effective rate (h) |
|
|
5,483 |
|
|
|
0.07 |
|
|
|
(1,289 |
) |
|
|
(0.02 |
) |
Dilution on earnings |
|
n/a |
|
|
|
(0.01 |
) |
|
n/a |
|
|
|
(0.04 |
) |
Total Avista Utilities |
|
|
14,860 |
|
|
|
0.19 |
|
|
|
(791 |
) |
|
|
(0.06 |
) |
AEL&P earnings |
|
|
588 |
|
|
|
0.01 |
|
|
|
1,337 |
|
|
|
0.02 |
|
Other businesses earnings (i) |
|
|
(9,417 |
) |
|
|
(0.13 |
) |
|
|
(11,235 |
) |
|
|
(0.15 |
) |
2023 consolidated
earnings |
|
$ |
17,484 |
|
|
$ |
0.23 |
|
|
$ |
72,329 |
|
|
$ |
0.96 |
|
(a) The tax impact of each line item
was calculated using Avista Corp.'s federal statutory tax rate of
21 percent.
(b) Electric utility margin
(operating revenues less resource costs) increased due to the
effects of our general rate cases and customer growth. These
increases were offset by lower hydroelectric generation and higher
costs under the ERM during the first half of the year. For the
first half of 2023, we had a $6.5 million pre-tax expense under the
ERM, compared to a $2.8 million pre-tax expense in the first half
of 2022. For the second quarter of 2023, we had a $1.0 million
pre-tax benefit under the ERM, compared to a $4.8 million pre-tax
expense in the second quarter of 2022.
(c) Natural gas utility margin
(operating revenues less resource costs) increased and was impacted
primarily by the effects of general rate cases and customer growth,
which contributed additional retail natural gas revenue.
(d) Other operating expenses
increased year to date primarily due to inflationary pressures
resulting in increased labor costs, as well as increased net
amortizations of previously deferred costs now included in customer
rates (resulting in no impact to net income). These increases were
offset by the $4.0 million write off of Dry Ash Disposal System
assets in the second quarter of 2022.
(e) Depreciation and amortization
increased primarily due to additions to utility plant.
(f) Interest expense increased due to
a higher level of debt outstanding for capital expenditures,
increased deferred resource costs and collateral requirements, and
an increase in interest rates compared to 2022.
(g) Other increased primarily due to
increased interest income compared to 2022, including additional
interest on deferred regulatory balances as well as increased
interest rates, and decreased property taxes.
(h) Our effective tax rate was
negative 49.8 percent for the second quarter of 2023, compared to
negative 9.6 percent for the second quarter of 2022. For the
year-to-date, our effective tax rate was negative 20.8 percent
compared to negative 16.6 percent in the prior year. Our tax
provision is spread throughout the year as a percentage of pre-tax
income, resulting in additional tax being allocated to the first
half of 2023.
(i) Earnings at our other businesses
decreased due to net investment losses recognized in 2023 compared
to net investment gains recognized in 2022.
Non-Generally Accepted Accounting Principles (Non-GAAP)
Financial Measures
The tables above and below include electric utility margin and
natural gas utility margin, two financial measures that are
considered “non-GAAP financial measures.” Generally, a non-GAAP
financial measure is a numerical measure of a company's financial
performance, financial position or cash flows that excludes (or
includes) amounts that are included (or excluded) in the most
directly comparable measure calculated and presented in accordance
with GAAP, which for utility margin is utility operating
revenues.
The presentation of electric utility margin and natural gas
utility margin is intended to enhance the understanding of
operating performance. We use these measures internally and believe
they provide useful information to investors in their analysis of
how changes in loads (due to weather, economic or other
conditions), rates, supply costs and other factors impact our
results of operations. Changes in loads, as well as power and
natural gas supply costs, are generally deferred and recovered from
customers through regulatory accounting mechanisms. Accordingly,
the analysis of utility margin generally excludes most of the
change in revenue resulting from these regulatory mechanisms. We
present electric and natural gas utility margin separately below
for Avista Utilities since each business has different cost
sources, cost recovery mechanisms and jurisdictions, so we believe
that separate analysis is beneficial. These measures are not
intended to replace utility operating revenues as determined in
accordance with GAAP as an indicator of operating performance.
Reconciliations of operating revenues to utility margin are set
forth below.
The following table presents Avista Utilities' operating
revenues, resource costs and resulting utility margin (pre-tax and
after-tax) for the three and six months ended June 30 (dollars
in thousands):
|
|
|
|
|
|
|
|
Utility |
|
|
|
|
|
Utility |
|
|
|
Operating |
|
|
Resource |
|
|
Margin |
|
|
Income |
|
|
Margin |
|
|
|
Revenues |
|
|
Costs |
|
|
(Pre-Tax) |
|
|
Taxes (a) |
|
|
(Net of Tax) |
|
For the three months
ended June 30, 2023: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric |
|
$ |
283,130 |
|
|
$ |
100,291 |
|
|
$ |
182,839 |
|
|
$ |
38,396 |
|
|
$ |
144,443 |
|
Natural Gas |
|
|
93,529 |
|
|
|
47,781 |
|
|
|
45,748 |
|
|
|
9,607 |
|
|
|
36,141 |
|
Less: Intracompany |
|
|
(8,055 |
) |
|
|
(8,055 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
368,604 |
|
|
$ |
140,017 |
|
|
$ |
228,587 |
|
|
$ |
48,003 |
|
|
$ |
180,584 |
|
For the three months
ended June 30, 2022: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric |
|
$ |
281,633 |
|
|
$ |
112,480 |
|
|
$ |
169,153 |
|
|
$ |
35,522 |
|
|
$ |
133,631 |
|
Natural Gas |
|
|
102,919 |
|
|
|
59,778 |
|
|
|
43,141 |
|
|
|
9,060 |
|
|
|
34,081 |
|
Less: Intracompany |
|
|
(16,037 |
) |
|
|
(16,037 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
368,515 |
|
|
$ |
156,221 |
|
|
$ |
212,294 |
|
|
$ |
44,582 |
|
|
$ |
167,712 |
|
For the six months
ended June 30, 2023: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric |
|
$ |
540,427 |
|
|
$ |
185,035 |
|
|
$ |
355,392 |
|
|
$ |
74,632 |
|
|
$ |
280,760 |
|
Natural Gas |
|
|
303,919 |
|
|
|
162,719 |
|
|
|
141,200 |
|
|
|
29,652 |
|
|
|
111,548 |
|
Less: Intracompany |
|
|
(15,600 |
) |
|
|
(15,600 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
828,746 |
|
|
$ |
332,154 |
|
|
$ |
496,592 |
|
|
$ |
104,284 |
|
|
$ |
392,308 |
|
For the six months
ended June 30, 2022: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric |
|
$ |
549,558 |
|
|
$ |
207,519 |
|
|
$ |
342,039 |
|
|
$ |
71,828 |
|
|
$ |
270,211 |
|
Natural Gas |
|
|
293,431 |
|
|
|
160,728 |
|
|
|
132,703 |
|
|
|
27,868 |
|
|
|
104,835 |
|
Less: Intracompany |
|
|
(25,602 |
) |
|
|
(25,602 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
817,387 |
|
|
$ |
342,645 |
|
|
$ |
474,742 |
|
|
$ |
99,696 |
|
|
$ |
375,046 |
|
(a) Income taxes for 2023 and 2022
were calculated using Avista Corp.'s federal statutory tax rate of
21 percent.
Liquidity and Capital Resources
Liquidity
As of June 30, 2023, we had $292 million of available liquidity
under the Avista Corp. committed line of credit, and $34 million of
available liquidity under our letter of credit facility. During
June 2023, we increased the capacity of our committed line of
credit from $400 million to $500 million, extended the expiration
to June 2028, and terminated our $100 million revolving line of
credit. During the second quarter of 2023, AEL&P also extended
their committed line of credit expiration to June 2028, and had $25
million of available liquidity as of June 30, 2023.
In March 2023, we issued $250 million of long-term debt. We do
not expect to issue any additional long-term debt in 2023.
During 2023, we expect to issue $120 million of common stock
(including $60 million of common stock issued during the first half
of 2023).
Capital Expenditures and Other Investments
Avista Utilities’ capital expenditures were $220 million for the
six months ended June 30, 2023, and we expect Avista Utilities’
capital expenditures to total $475 million in 2023. We expect
AEL&P’s capital expenditures to total $19 million in 2023.
In addition, we expect to invest $15 million in 2023 at our
other businesses related to non-regulated investment opportunities
and economic development projects in our service territory.
2023 Earnings Guidance and Outlook
Avista Corp. is confirming its 2023 consolidated earnings
guidance with a range of $2.27 to $2.47 per diluted share, with
Avista Utilities contributing in the range of $2.15 to $2.31 per
diluted share. We expect to be in the lower end of these ranges as
a result of higher costs under the ERM. For the full year, we
expect to be in the 90 percent customer/10 percent Company sharing
band, resulting in a decrease to earnings of $0.08 per diluted
share. Our guidance assumes timely and appropriate rate relief in
all of our jurisdictions.
Our Washington and Idaho general rate cases implemented in 2021
offset the bill impact of rate increases with customer tax credits.
The tax credits that started in 2021 will be fully returned to
customers by the end of the third quarter of 2023, and will no
longer reduce both customer bills and income tax expense. In the
third and fourth quarters of 2023, we expect there will be an
increase in utility margin. However, income tax is spread
throughout the year as a percentage of pre-tax income based on the
estimated annual effective tax rate, changing the shape of our
quarterly earnings as compared to recent years. Our earnings for
the first half of the year represent 45 percent of our forecast
annual utility earnings. We expect the distribution of the
remaining annual utility earnings to be approximately 5 percent and
50 percent in the third and fourth quarters, respectively. This
distribution excludes the impact of the ERM.
We expect AEL&P to contribute in the range of $0.08 to $0.10
per diluted share.
We expect the other businesses to contribute in the range of
$0.04 to $0.06 per diluted share.
Our outlook for Avista Utilities and AEL&P assumes, among
other variables, normal precipitation, temperatures, and other
operating conditions. For Avista Utilities, our outlook expects
lower than normal hydroelectric generation for the year. Our
guidance does not include the effect of unusual or non-recurring
items until the effects are known and certain.
NOTE: We will host a conference call with
financial analysts and investors on Aug. 2, 2023, at 10:30 a.m. ET
to discuss this news release. This call can be accessed on Avista’s
website at investor.avistacorp.com. You must register for the call
via the link at Avista’s website (investor.avistacorp.com) to
access the call-in details for the webcast. A replay of the webcast
will be available for one year on the Avista Corp. web site at
investor.avistacorp.com.
Avista Corp. is an energy company involved in the production,
transmission and distribution of energy as well as other
energy-related businesses. Avista Utilities is our operating
division that provides electric service to 413,000 customers and
natural gas to 377,000 customers. Our service territory covers
30,000 square miles in eastern Washington, northern Idaho and parts
of southern and eastern Oregon, with a population of 1.7 million.
AERC is an Avista subsidiary that, through its subsidiary
AEL&P, provides retail electric service to 18,000 customers in
the city and borough of Juneau, Alaska. Our stock is traded under
the ticker symbol “AVA”. For more information about Avista, please
visit www.avistacorp.com.
Avista Corp. and the Avista Corp. logo are trademarks of Avista
Corporation.
This news release contains forward-looking statements, including
statements regarding our current expectations for future financial
performance and cash flows, capital expenditures, financing plans,
our current plans or objectives for future operations and other
factors, which may affect the company in the future. Such
statements are subject to a variety of risks, uncertainties and
other factors, most of which are beyond our control and many of
which could have significant impact on our operations, results of
operations, financial condition or cash flows and could cause
actual results to differ materially from those anticipated in such
statements.
The following are among the important factors that could cause
actual results to differ materially from the forward-looking
statements:
Utility Regulatory Risk
state and federal regulatory decisions or related judicial
decisions that affect our ability to recover costs and earn a
reasonable return including, but not limited to, disallowance or
delay in the recovery of capital investments, operating costs,
commodity costs, interest rate swap derivatives, the ordering of
refunds to customers and discretion over allowed return on
investment; the loss of regulatory accounting treatment, which
could require the write-off of regulatory assets and the loss of
regulatory deferral and recovery mechanisms;
Operational Risk
political unrest and/or conflicts between foreign nation-states,
which could disrupt the global, national and local economy, result
in increases in operating and capital costs, impact energy
commodity prices or our ability to access energy resources, create
disruption in supply chains, disrupt, weaken or create volatility
in capital markets, and increase cyber security risks. In addition,
any of these factors could negatively impact our liquidity and
limit our access to capital, among other implications; wildfires
ignited, or allegedly ignited, by our equipment or facilities could
cause significant loss of life and property or result in liability
for resulting fire suppression costs, thereby causing serious
operational and financial harm; severe weather or natural
disasters, including, but not limited to, avalanches, wind storms,
wildfires, earthquakes, extreme temperature events, snow and ice
storms that could disrupt energy generation, transmission and
distribution, as well as the availability and costs of fuel,
materials, equipment, supplies and support services; explosions,
fires, accidents, mechanical breakdowns or other incidents that
could impair assets and may disrupt operations of any of our
generation facilities, transmission, and electric and natural gas
distribution systems or other operations and may require us to
purchase replacement power or incur costs to repair our facilities;
explosions, fires, accidents or other incidents arising from or
allegedly arising from our operations that could cause injuries to
the public or property damage; blackouts or disruptions of
interconnected transmission systems (the regional power grid);
terrorist attacks, cyberattacks or other malicious acts that could
disrupt or cause damage to our utility assets or to the national or
regional economy in general, including any effects of terrorism,
cyberattacks, ransomware, or vandalism that damage or disrupt
information technology systems; pandemics, which could disrupt our
business, as well as the global, national and local economy,
resulting in a decline in customer demand, deterioration in the
creditworthiness of our customers, increases in operating and
capital costs, workforce shortages, losses or disruptions in our
workforce due to vaccine mandates, delays in capital projects,
disruption in supply chains, and disruption, weakness and
volatility in capital markets. In addition, any of these factors
could negatively impact our liquidity and limit our access to
capital, among other implications; work-force issues, including
changes in collective bargaining unit agreements, strikes, work
stoppages, the loss of key executives, availability of workers in a
variety of skill areas, and our ability to recruit and retain
employees; changes in the availability and price of purchased
power, fuel and natural gas, as well as transmission capacity;
increasing costs of insurance, more restrictive coverage terms and
our ability to obtain insurance; delays or changes in construction
costs, and/or our ability to obtain required permits and materials
for present or prospective facilities; increasing health care costs
and cost of health insurance provided to our employees and
retirees; increasing operating costs, including effects of
inflationary pressures; third party construction of buildings,
billboard signs, towers or other structures within our rights of
way, or placement of fuel containers within close proximity to our
transformers or other equipment, including overbuilding atop
natural gas distribution lines; the loss of key suppliers for
materials or services or other disruptions to the supply chain;
adverse impacts to our Alaska electric utility (AEL&P) that
could result from an extended outage of its hydroelectric
generating resources or their inability to deliver energy, due to
their lack of interconnectivity to any other electrical grids and
the availability or cost of replacement power (diesel); changing
river or reservoir regulation or operations at hydroelectric
facilities not owned by us, which could impact our hydroelectric
facilities downstream;
Climate Change Risk
increasing frequency and intensity of severe weather or natural
disasters resulting from climate change, that could disrupt energy
generation, transmission and distribution, as well as the
availability and costs of fuel, materials, equipment, supplies and
support services; change in the use, availability or abundancy of
water resources and/or rights needed for operation of our
hydroelectric facilities, including impacts resulting from climate
change;
Cyber and Technology Risk
cyberattacks on the operating systems used in the operation of
our electric generation, transmission and distribution facilities
and our natural gas distribution facilities, and cyberattacks on
such systems of other energy companies with which we are
interconnected, which could damage or destroy facilities or systems
or disrupt operations for extended periods of time and result in
the incurrence of liabilities and costs; cyberattacks on the
administrative systems used in the administration of our business,
including customer billing and customer service, accounting,
communications, compliance and other administrative functions, and
cyberattacks on such systems of our vendors and other companies
with which we do business, resulting in the disruption of business
operations, the release of private information and the incurrence
of liabilities and costs; changes in costs that impede our ability
to implement new information technology systems or to operate and
maintain current production technology; changes in technologies,
possibly making some of the current technology we utilize obsolete
or introducing new cyber security risks and other new risks
inherent in the use, by either us or our counterparties, of new
technologies in the developmental stage including, without
limitation, generative artificial intelligence; changes in the use,
perception, or regulation of generative artificial intelligence
technologies, which could limit our ability to utilize such
technology, create risk of enhanced regulatory scrutiny, generate
uncertainty around intellectual property ownership, licensing or
use, or which could otherwise result in risk of damage to our
business, reputation or financial results; insufficient technology
skills, which could lead to the inability to develop, modify or
maintain our information systems;
Strategic Risk
growth or decline of our customer base due to new uses for our
services or decline in existing services, including, but not
limited to, the effect of the trend toward distributed generation
at customer sites; the potential effects of negative publicity
regarding our business practices, whether true or not, which could
hurt our reputation and result in litigation or a decline in our
common stock price; changes in our strategic business plans, which
could be affected by any or all of the foregoing, including the
entry into new businesses and/or the exit from existing businesses
and the extent of our business development efforts where potential
future business is uncertain; wholesale and retail competition
including alternative energy sources, growth in customer-owned
power resource technologies that displace utility-supplied energy
or may be sold back to the utility, and alternative energy
suppliers and delivery arrangements; entering into or growth of
non-regulated activities may increase earnings volatility and
result in investment losses; the risk of municipalization or other
forms of service territory reduction;
External Mandates Risk
changes in environmental laws, regulations, decisions and
policies, including, but not limited to, regulatory responses to
concerns regarding climate change, efforts to restore anadromous
fish in areas currently blocked by dams, more stringent
requirements related to air quality, water quality and waste
management, present and potential environmental remediation costs
and our compliance with these matters; the potential effects of
initiatives, legislation or administrative rulemaking at the
federal, state or local levels, including possible effects on our
generating resources, prohibitions or restrictions on new or
existing services, or restrictions on greenhouse gas emissions to
mitigate concerns over global climate changes, including future
limitations on the usage and distribution of natural gas; political
pressures or regulatory practices that could constrain or place
additional cost burdens on our distribution systems through
accelerated adoption of distributed generation or electric-powered
transportation or on our energy supply sources, such as campaigns
to halt fossil fuel-fired power generation and opposition to other
thermal generation, wind turbines or hydroelectric facilities;
failure to identify changes in legislation, taxation and regulatory
issues that could be detrimental or beneficial to our overall
business; policy and/or legislative changes in various regulated
areas, including, but not limited to, environmental regulation,
healthcare regulations and import/export regulations;
Financial Risk
weather conditions, which affect both energy demand and electric
generating capability, including the impact of precipitation and
temperature on hydroelectric resources, the impact of wind patterns
on wind-generated power, weather-sensitive customer demand, and
similar impacts on supply and demand in the wholesale energy
markets; our ability to obtain financing through the issuance of
debt and/or equity securities and access to our funds held with
financial institutions, which could be affected by various factors
including our credit ratings, interest rates, other capital market
conditions and global economic conditions; changes in interest
rates that affect borrowing costs, our ability to effectively hedge
interest rates for anticipated debt issuances, variable interest
rate borrowing and the extent to which we recover interest costs
through retail rates collected from customers; volatility in energy
commodity markets that affect our ability to effectively hedge
energy commodity risks, including cash flow impacts and
requirements for collateral; changes in actuarial assumptions,
interest rates and the actual return on plan assets for our pension
and other postretirement benefit plans, which could affect future
funding obligations, pension and other postretirement benefit
expense and the related liabilities; the outcome of legal
proceedings and other contingencies; economic conditions in our
service areas, including the economy's effects on customer demand
for utility services; economic conditions nationally may affect the
valuation of our unregulated portfolio companies; declining energy
demand related to customer energy efficiency, conservation measures
and/or increased distributed generation; changes in the long-term
climate and weather could materially affect, among other things,
customer demand, the volume and timing of streamflows required for
hydroelectric generation, costs of generation, transmission and
distribution. Increased or new risks may arise from severe weather
or natural disasters, including wildfires as well as their
increased occurrence and intensity related to changes in climate;
industry and geographic concentrations which could increase our
exposure to credit risks due to counterparties, suppliers and
customers being similarly affected by changing conditions;
deterioration in the creditworthiness of our customers;
Energy Commodity Risk
volatility and illiquidity in wholesale energy markets,
including exchanges, the availability of willing buyers and
sellers, changes in wholesale energy prices that could affect
operating income, cash requirements to purchase electricity and
natural gas, value received for wholesale sales, collateral
required of us by individual counterparties and/or exchanges in
wholesale energy transactions and credit risk to us from such
transactions, and the market value of derivative assets and
liabilities; default or nonperformance on the part of any parties
from whom we purchase and/or sell capacity or energy; potential
environmental regulations or lawsuits affecting our ability to
utilize or resulting in the obsolescence of our power supply
resources; explosions, fires, accidents, pipeline ruptures or other
incidents that could limit energy supply to our facilities or our
surrounding territory, which could result in a shortage of
commodities in the market that could increase the cost of
replacement commodities from other sources;
Compliance Risk
changes in laws, regulations, decisions and policies at the
federal, state or local levels, which could materially impact both
our electric and gas operations and costs of operations; and the
ability to comply with the terms of the licenses and permits for
our hydroelectric or thermal generating facilities at
cost-effective levels.
For a further discussion of these factors and other important
factors, please refer to our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2023. The forward-looking statements
contained in this news release speak only as of the date hereof. We
undertake no obligation to update any forward-looking statement or
statements to reflect events or circumstances that occur after the
date on which such statement is made or to reflect the occurrence
of unanticipated events. New risks, uncertainties and other factors
emerge from time to time, and it is not possible for management to
predict all of such factors, nor can it assess the impact of each
such factor on our business or the extent to which any such factor,
or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking
statement.
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reply message to lena.funston@avistacorp.com.
Contact:Media: Laurine Jue (509) 495-2510
laurine.jue@avistacorp.comInvestors: Stacey Wenz (509) 495-2046
stacey.wenz@avistacorp.comAvista 24/7 Media Access (509)
495-4174
Issued by: Avista Corporation
Avista (NYSE:AVA)
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