Avista Corporation

Good day and thank you for standing by. Welcome to the Avista Corporation second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate, simply press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Stacey Wentz, Investors Relations Manager. The floor is yours.

Good morning, everyone. Welcome to Avista's second quarter 2022 earnings conference call. Our earnings and our second quarter 10Q were released pre-market this morning. Both are available on our website. Joining me this morning are Avista Corp President and CEO, Dennis Vermillion, Executive Vice President, Treasurer and CFO, Mark Thies, and Senior Vice President, External Affairs and Chief Customer Officer, Kevin Christie. Today, we will make certain statements that are forward-looking. These involve assumptions, risks, and uncertainties, which are subject to change. For reference to the various factors which could cause actual results to differ materially from those discussed in today's call, please refer to our 10-K for 2021 and 10-Q for the second quarter of 2022, which are available on our website. I'll begin by recapping the financial results presented in today's press release. Our consolidated earnings for the second quarter of 2022 were $0.16 per diluted share compared to $0.20 for the second quarter of 2021. For the year to date, consolidated earnings were $1.15 per diluted share for 2022 compared to $1.18 last year. Now, I'll turn the discussion over to Dennis.

Well, thanks, Stacey, and good morning, everyone. I hope you are enjoying your summer so far. You know, after a cool, wet spring, summer finally hit our region with a vengeance, actually, here recently. We had triple-digit temperatures across the entire Pacific Northwest region, and it made national news. Of course, the ongoing investments we've made to our system helped keep our customers safe and cool during the excessive heat, and we were relieved to see these temperatures give way to a more normal summer weather pattern this week. as the heat wave moved eastward to share with everybody else across the country. Our second quarter consolidated earnings met our expectations. We continue to be on track to meet our full-year consolidated guidance. Our performance was primarily the result of increased net investment gains by our other businesses. Through the second quarter, the utility continued to be challenged by higher costs, particularly rising interest rates and inflation. We are very pleased to have reached a multi-party settlement in our multi-year Washington general rate cases, both electric and gas. If approved by the Washington Commission, this outcome provides a positive framework for our Washington operations that benefits both our customers and our shareholders. As part of the settlement, we wrote off $4 million in costs related to the dry ash disposal project at Coal Strip during the second quarter. We expect inflation to decrease from current levels in 2023. That, combined with the rate release and cost management efforts, positions us to earn our allowed return in 2023. We're proud to be the first investor-owned utility to reach approval of our Clean Energy Implementation Plan with the Washington Commission. We did that in June of this year. Avista's plan is a roadmap of specific actions we expect to take over the next four years to make progress towards goals established by the Clean Energy Transformation Act, or CETA, and of course our own clean energy goals. As we work towards achieving these goals, We are committed to balancing reliability and affordability while meeting our long-standing commitment to environmental sustainability. The benchmarks that are included in the plan were created with customer input, and we also work very closely with Commission staff and other stakeholders to develop and strengthen the plan. We recently completed a permanent fish passage facility at our Cabinet Gorge Dam. that will help restore and expand bull trout populations in the Clark Fork River Basin, reflecting our ongoing commitment to environmental stewardship. This $60 million multi-year project also fulfills elements of our FERC licensing obligations and is the culmination of over 20 years of study, negotiations, planning, and collaboration with Native American tribes, state and federal agencies, and other stakeholders. We're very excited to have this facility up and running, and our team just did a great job. In June, we opened Upriver Park, which incorporates a portion of the Washington Centennial Trail along the Spokane River in the heart of the city. Like the fish passage project, the park fulfills elements of our FERC licensing obligations as it contributes to an ecologically healthy shoreline and provides river access and water-based recreation. The project also provides a neighborhood park and river access for a disadvantaged, low-income neighborhood and has increased safety along the very popular Centennial Trail by removing vehicle traffic. Moving to rate cases, as I mentioned, we are pleased to have reached the settlement for our 2022 Washington general rate cases, and we expect that rate relief in December of 2022. In Idaho, we expect to file rate cases in the first quarter of 2023. And then you saw, I'm sure in Alaska, we filed our general rate case in July. We expect an interim and refundable rate base rate increase of four and a half percent effective in September of 22. For guidance, we are confirming our 2022 earnings guidance with a consolidated range of $1.93 to $2.13. and are revising our segment earnings guidance for 2022 to decrease the contribution from Avista Utilities and increase the contribution from our other businesses by 10 cents per diluted share each. We expect to be near the lower end of the consolidated range primarily due to higher power supply costs. We are confirming our 2023 consolidated earnings guidance range of $2.42 to $2.62 per diluted share. At this time, I'll turn the presentation over to Mark.