Avista(US:AVA)2026-02-25 16:32Financial Data and Key Metrics Changes - The company's consolidated earnings for 2025 were $2.38 per diluted share, an increase from $2.29 in 2024 [3] - Non-GAAP utility earnings for 2025 were $2.55 per diluted share, compared to $2.38 per diluted share in 2024 [4] - For Q4 2025, consolidated earnings were $0.87 per diluted share, up from $0.84 per diluted share in Q4 2024 [4] - Non-GAAP utility earnings for Q4 2025 were $0.88 per diluted share, slightly down from $0.89 per diluted share in Q4 2024 [4] Business Line Data and Key Metrics Changes - Avista Utilities' results were impacted by a one-time adjustment related to Colstrip investments, which decreased earnings per share by $0.07 [6] - Despite headwinds, utility results were within the original guidance range, and excluding specific factors, results would have exceeded the midpoint of the 2025 utilities earnings guidance [6] Market Data and Key Metrics Changes - The company filed a four-year rate plan with the Washington Utilities and Transportation Commission, addressing rising costs related to grid modernization and clean energy compliance [6][10] - A significant deposit was received from a data center developer for a potential load of 125 MW, expected to ramp up to 500 MW by 2030 [8] Company Strategy and Development Direction - The company aims to reduce the frequency of regulatory proceedings and provide greater stability in cost recovery and shareholder returns through the four-year rate plan [6] - Selected projects from the RFP process include upgrades to natural gas turbines, a battery energy storage system, and a power purchase agreement for wind energy [7] - The company is exploring early acquisition of resources to capitalize on tax credit opportunities and enhance flexibility until more load is needed [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the combination of growth opportunities and uncertainty in the operating environment [5] - The long-term earnings growth expectation is set at 4%-6% from the midpoint of 2025 consolidated earnings guidance [21] - The company is targeting a competitive payout range of 60%-70% for dividends, with a commitment to shareholder returns [11] Other Important Information - Capital expenditures for Avista Utilities were $553 million in 2025, expected to rise to $585 million in 2026, with a five-year projection of $3.4 billion [15][16] - The board raised the dividend to $1.97 per share, marking 24 consecutive years of dividend increases [11] Q&A Session Summary Question: Financing decisions for 2026 - Management indicated that financing decisions would be sequenced based on capital investment opportunities and would likely follow a periodic offering program unless significant investment opportunities arise [26][28] Question: Integration of new large load customer - Management confirmed that a significant deposit from a potential customer would lead to an MOU, ensuring existing customers are insulated from any negative impacts if the customer does not materialize [30][31] Question: Financing plan for potential $350 million CapEx - Management expects a 50/50 debt and equity structure for the potential additional capital, considering hybrids if necessary [38][40] Question: Monetizing non-regulated investments - Management expressed intent to monetize non-regulated investments if opportunities arise, which could reduce the need for equity issuance [42] Question: Long-term EPS growth correlation with rate base CAGR - Management confirmed that the expected 4%-6% EPS growth correlates with a 5% rate base CAGR, with potential for higher growth if additional investments materialize [43][44]