Avista Corporation

Ladies and gentlemen, thank you for standing by and welcome to VISTA Corporation first quarter 2025 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 this session, you would need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Stacey Walters, Investor Relations Manager. Please go ahead.

Thank you. It's great to have you with us for Avista's first quarter 2025 earnings conference call. Our earnings and first quarter 2025 Form 10-Q were released pre-market this morning. You can find both on our website. Joining me today are Avista Corp President and CEO, Heather Rosentrader, and Senior Vice President, CFO, Treasurer, and Regulatory Affairs Officer, Kevin Christie. Today, we will make certain statements that are forward-looking. These involve assumptions, risks, and uncertainties which are subject to change. Various factors could cause actual results to differ materially from the expectations we discussed in today's call. Please refer to our Form 10-K for 2024 and our Form 10-Q for the first quarter of 2025 for a full discussion of these risk factors. Both are available on our website. To begin, I'll recap the financial results presented in today's press release. Our consolidated earnings for the first quarter of 2025 were 98 cents for diluted share compared to 91 cents for the first quarter of 2024. Now I'll turn the call over to Heather.

Thank you, Stacey, and hello, everyone. Having just finished my first four months in the CEO role, I'm excited that we are off to a great start to 2025 and that we get to share the results of a strong first quarter. Strong performance at Avista Utilities drove almost 8% improvement in our first quarter consolidated results compared to the first quarter last year. And I'm happy to share that we are on track to meet our consolidated earnings targets for 2025. Our discussions with potential new large load customers, which we touched on in February, continue to advance. In addition to providing potential incremental investment, We're viewing these potential new loads as opportunities to bring a net benefit to existing Avista customers and the region through enhancements to the regional grid infrastructure, employment opportunities, future rate relief, and a significant boost to sales tax revenue. When we can share more details on these potential new loads, we will. These conversations do underscore the need for the resources identified in our 2025 Integrated Resource Plan. Our plan next step involves seeking bids through a request for proposal or RFP process. Our draft all source RFP was filed for approval with the Washington Commission and communicated to the Idaho Commission in March. The RFP calls for bids from 50 megawatts up to 400 megawatts of generation to meet the needs we've identified for 2029. We are working through the Commission staff comments as well as other public comments in support of this process. We plan to release the final RFP at the end of May. Bids will be due later in June, and we expect to issue a shortlist in August. Finalists will be selected by the end of this year. We're optimistic about ownership options as part of this RFP process through bill transfer agreement options and through self-billed options. In April, critical wildfire legislation was passed in both Washington and Idaho. Both states now have laws which provide for approval of wildfire mitigation plans, which is a significant step forward in addressing the risks associated with wildfire. On the Washington governor's desk to be signed is another bill which provides for the opportunity to securitize costs associated with disasters such as wildfire. Overwhelming support for these changes in both states demonstrates the legislature's recognition of wildfire as a critical issue. This is important positive progress that underpins our continued efforts to mitigate the risk of wildfire. I also want to share that we have reached a resolution in the litigation related to the Babb Road fire. This fire occurred in September 2020 when a severe windstorm blew a branch from a tree outside our right-of-way into a distribution line. The resulting fire caused significant damage to the towns of Malden and Pine City in Whitman County, Washington. The litigation involved claims against Avista and other parties responsible for maintaining the distribution lines and the vegetation around them. After negotiations and legal proceedings, we have agreed to a settlement in principle that we believe is fair and addresses substantially all the claims brought by the affected parties. The settlement will result in no impact earnings as we expect to receive insurance proceeds for settlement of our $21 million liability. We believe that resolving this matter is in the best interest of our company and the communities we serve. We remain dedicated to maintaining the highest standards of safety and reliability in our operations, and as we move forward, we'll continue to invest in infrastructure improvements and continue to enhance our safety measures to mitigate the risk of wildfires. Our focus remains on delivering reliable service to our customers while prioritizing the safety and well-being of our communities. I already covered some developments in regulation at the state level, but there's been a lot happening at the federal level as well. Tariffs proposed by the new administration have not had a material impact on our financial results to date. but we continue to closely follow this dynamic situation. We're working actively with our supply chain partners, the majority of whom are domestic, to understand the impact that tariffs may have on pricing, and to the extent possible, we are implementing risk mitigation activities. We worked with our supplier to redirect manufacturing of transformers from Canadian factories to factories located in the United States. We also worked out process changes with our wood pole supplier to ensure poles are sourced from the United States and we're working to secure price lists for committed periods of time to alleviate uncertainty and inform our own planning processes. These are just a few examples of the work we're doing to mitigate tariff risk. We source a significant portion of our natural gas supply from Canada. We believe that this gas is exempt from any tariff under the U.S.-Mexico-Canada agreement. It's important to note, too, that should that exemption be overridden by further action, any impact from an increase in resource costs would be substantially mitigated through our resource cost-sharing mechanisms, the IRM, our PCA, and PGAs. At this time, we do not anticipate a significant impact in 2025, but we will continue to monitor these ever-changing conditions. And now I'll hand the call over to Kevin for more discussion of our earnings.