Avista Corporation

Good day and thank you for standing by. Welcome to the Avista Corporation first quarter 2023 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 ask a question during the session, you'll need to press star 1 1 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stacey Wentz, Investor Relations Manager. Please go ahead.

Good morning. Welcome to Avista's first quarter 2023 earnings conference call. Our earnings and our first 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, Senior Vice President, External Affairs, and Chief Customer Officer, Kevin Christie, and Vice President, Controller, and Principal Accounting Officer, Ryan Crosselt. 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 2022 and 10-Q for the first quarter of 2023, 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 first quarter of 2023 were 73 cents per diluted share, compared to 99 cents for the first quarter of 2022. Now I'll turn the call over to Dennis.

Well, thanks, Stacey, and good morning, everyone. Before we discuss our earnings, I'd like to say congratulations to Mark. You may have seen the press release we issued this morning announcing Mark's upcoming retirement. You know, it's an important decision, and we're so happy, Mark, for you and your family. Mark's responsibilities will transition next week on May 11th following our annual meeting Even though he'll stay on as executive vice president until his official retirement on October 1st, today will be his last earnings call. I'd like to thank you, Mark, for your 15 years of dedicated service to Avista. You joined the company in 2008 during, I'm looking at some war wounds here, but during the Great Recession. You helped us successfully navigate through that global financial crisis and, of course, the recent pandemic during your tenure. You know, those are some pretty significant achievements to bookend your time into this, and I could go on and on, all the great things in the middle of that, but we will save that for another time in the interest of time. Throughout the years, you've earned the respect of many in our industry, and I've watched you, Mark, as you've applied all your experience in finance and in the utility sector to build and lead a strong finance team at Avista that will carry on your legacy long after you've retired. You know, Mark is always the voice in the room that's advocating for our investors. And, Mark, you've built trusted relationships with bankers and investors to ensure that that Avista has access to the capital necessary to fund our business and ongoing investments, the investments that we need to make to maintain and upgrade our utility as we serve our customers. You've also been instrumental in overseeing the financial success of our other businesses, including the sale of our subsidiary, Acova, and there's so much more in that space as well. Your actions have helped build Avista's financial strength and flexibility to position us for the future as we transition this role. So Mark, we are grateful for everything that you've done and we wish you all the best in your retirement as you begin your next chapter in your life. So with Mark retiring, you saw that we've named Kevin Christie to become our new CFO, Treasurer and Senior Vice President of Regulatory Affairs. He'll assume these responsibilities next Thursday at the close of our annual meeting on May 11th. So congratulations, Kevin. Many of you already know Kevin from his participation on these earnings calls. He's been on them for a while, ever since he stepped into his role as Senior Vice President of External Affairs, which included the regulatory affairs portion and then also as Chief Customer Officer for the company. Kevin has extensive experience in finance and the energy industry. After earning a Bachelor of Arts degree in accounting from Washington State University, go Cougs, He joined GTN, or Gas Transmission Northwest, as an accountant and then progressed into leadership. Since joining Avista in 2005, Kevin has held numerous leadership roles, including Senior Director of Finance in 2012, Vice President in 2015, and Senior Vice President in 2019. In addition to his finance experience, Kevin brings expertise from across our business Kevin, in one of your more recent accomplishments while leading our regulatory affairs team, you worked effectively with regulators to secure the approval and implementation of our multi-year rate cases to help provide long-term financial stability and success for the company. Your experience and credibility in the regulatory arena, along with the trusted relationships that you've built with our commissions over the last several years, these are obviously critical assets as you step into the CFO role. As part of this leadership transition, we made some strategic organizational changes that leverage our relationship and trust. Kevin and his regulatory team have established with our commissions and other key external stakeholders. At the same time, it also formalizes the alignment between our internal functions of regulatory affairs, finance, and accounting, and we're grateful for how effectively these teams already work together because they play a vital role in Avista's ongoing success as we strive to achieve our allowed return. In the coming days and weeks, we'll be reaching out to all of you to introduce you to Kevin. And if you plan to attend the AGA Financial Conference in a couple weeks, the American Gas Association Financial Forum, you'll get an opportunity to spend some time with Kevin and all of us. So we look forward to that. So congratulations, Kevin. You have our full support. Now moving on, in April we announced the results of our 2022 All-Source RFP, a 30-year agreement for 100 megawatts of wind. When combined with our recent agreements with the Chelan County PUD that we assigned at the end of 2021 and our 2022 agreement with Columbia Basin Hydro, more than 70% of our peak generating capability will be produced from non-emitting resources in 2026. We also announced two renewable natural gas contracts and the extension of our power purchase agreement with the Lancaster Generating Facility. The RNG projects contribute to our aspirational clean energy goals within our natural gas operations, and the extension of the Lancaster deal meets an important need for our cost-effective reliable generation and ensuring adequate resource supply during a dynamic energy market, which we have been seeing lately. Each of these agreements contribute to achieving our clean energy goals and implementing our clean energy implementation plan. So with rate cases, our strategy to return to earning our allowed return includes filing timely rate cases, and we are executing on that strategy with a multi-year rate plan that's been filed in the Idaho Commission. We did that in February. and a general rate case that we filed in Oregon in March. And we continue to work our way through the regulatory processes for both of those proceedings. With respect to earnings, we are off to a solid start in 2023. Our results are slightly ahead of our expectations for the first quarter as we work to manage our costs. You know, we always do a good job of that, and we continue to, especially in the face of continuing inflation and increasing interest rates. We expected commodity prices to remain elevated throughout the winter, and they did. So as a result, our net power supply costs were high in the first quarter of the year. We expect lower net power supply costs for the rest of the year, resulting in a net benefit under the IRM for 2023. So we are confirming our annual consolidated guidance for 2023 with a range of $2.27 to $2.47 share. However, on a quarterly basis, our earnings will differ from recent years. And, you know, Mark's going to get into that and share a little bit more about what that will look like for us. So with that, I'd like to now turn this presentation over to Mark one last time. Mark, take it away.