Good day and thank you for standing by. Welcome to the Avista Corporation Q3 2024 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Stacey Wenz, Investor Relations Manager. Please go ahead.

Thank you, Therese. Good morning. Welcome to Avista's third quarter 2024 earnings conference call. Our earnings and third quarter Form 10-Q were released pre-market this morning. You can find both on our website. Joining me this morning are Avista Corp’s CEO, Dennis Vermillion, President and COO, Heather Rosentrater, Senior Vice President and CFO, Treasurer and Regulatory Affairs Officer, Kevin Christie, and Vice President, Controller, and Principal Accounting Officer, Ryan Krasselt. 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 2023 and our Form 10-Q for the third quarter of 2024, which are available on our website for a full discussion of these risk factors. I'll begin with a recap of the financial results presented in today's press release. Our consolidated earnings for the third quarter of 2024 were $0.23 per diluted share, compared to $0.19 for the third quarter of 2023. Year-to-date, consolidated earnings were $1.44 per diluted share, compared to $1.14 last year. Now, it's my pleasure to hand the call over to Dennis.

Well thanks, Stacey, and good morning, everyone. It's great to be here with all of you. This is my final earnings call as CEO of Avista. As you know, Heather Rosentrater will be taking over as CEO on January 1st of next year, and I have every confidence in Heather. Throughout her career, she has demonstrated the values, the strength, acumen, and insights to position us for success. She is the right person to lead Avista into the future. I've been honored to lead this company and serve alongside exceptional and dedicated employees for nearly 40 years. Our employees make Avista such a special place to work, and witnessing firsthand our ability to rise to meet challenges together as a team is something I will truly miss as I retire. Throughout my five years as CEO, we've made significant progress with our regulatory strategy, making meaningful progress towards closing the gap of regulatory lag, even as we found creative ways to minimize the impact of rate increases for our customers. Serving customers is the heart of our business, and in the last five years, our team has grown our programs for targeted energy assistance from a level of $11 million to nearly $40 million a year. More importantly, we are providing that assistance to more customers than ever. We've also invested more than $2 billion in our system on behalf of our customers in the last five years. The team has done a remarkable job seeking out state and federal funding for projects that matter to our customers. Avista has been awarded over $90 million in state and federal grants in the last five years. We continue to seek out these funding opportunities because it's the right thing to do for our customers. It enables us to accomplish more work on their behalf without impacting the price that they pay for energy. In the last five years, we've also made considerable progress towards achieving our clean energy goals. We've signed four PPAs for a total of 325 megawatts of clean, renewable energy, both hydropower and wind. We're already one of the lowest-emitting electric power producers in the United States, and these agreements help ensure that by 2026, more than 70% of our peak generating capability will be from renewable, non-emitting sources. Our earnings continue to improve from 2023, although our third-quarter results show that we still face some headwinds, and Kevin will talk about that in a few minutes. But we have the right team in place, and we are well-positioned to continue executing on our regulatory strategy and to deliver on our commitments to each one of our stakeholders, now and into the future. One constant in all 40 years of my career with Avista has been our capacity to adapt and consistently bring our best to the communities we serve through innovation, hard work, investment, and exemplary service. I know Avista will carry these values forward through the next 40 years with the right team and the right values. I have every confidence in Avista's success. Now I'll turn the call over to Heather.

Thank you, Dennis. And I want to start by expressing my heartfelt thanks and gratitude to you, Dennis, for your leadership, guidance, and unwavering support for our company. Your long tenured career is truly remarkable, and we are all so fortunate to have had you at the helm during some of these unprecedented times. And as highlighted, the progress and successes achieved through your leadership are noteworthy and have benefited our customers, communities, and investors. You will definitely be missed. I also want to share that I'm honored to be stepping into this role. My family's roots in our service territory extend back to the founding of Avista over 135 years ago, so that makes it all the more meaningful to me. And now turning to our operations, I'd like to share some updates. I'm pleased to announce that we are officially out of wildfire season. We've received significant rain in the last few weeks and took all of our circuits out of fire safety mode as of October 17th. Public Safety Power Shutoffs, or PSPS, were added to our wildfire toolkit in 2024. In late September, we experienced conditions that required the use of the PSPS tool on one of our circuits. All of our planning and work to establish coordination with community resources paid off. We successfully deployed resources to the affected area. Once it was safe to do so, we were able to quickly restore service to our customers that same day. Another success story from our wildfire mitigation efforts in 2024 was the deployment of nine artificial intelligence-enabled fire detection cameras. These cameras detect wildfire smoke up to 10 miles away and send alerts to appropriate resources. We've deployed them strategically throughout our service territory to maximize the views of several high-risk geographic areas, and we've already seen success with these cameras identifying fires and notifying appropriate partner agencies and resources. We continue to make progress towards our clean energy goals as well. The Clearwater Wind Project came online early, and we are already receiving power from the project to serve our customers. Clearwater directly supports meeting our goal of providing clean, reliable energy to our customers at a reasonable cost while meeting Washington State's clean energy standards now and in the future. With this project added to our portfolio, Avista remains one of the lowest emitters of CO2 among the nation's energy producers, making the company among the greenest investor-owned utilities in the nation. Earlier this week, we signed a Memorandum of Understanding to work toward an ownership share of the proposed North Plains Connector Transmission Project. The 415-mile high voltage direct current transmission line would interconnect the cold strip transmission system in Eastern Montana to two locations in North Dakota. This project was identified as part of our preferred resource strategy in the draft integrated resource plan filed in October. Projects like this are crucial to meeting our customers' growing need for energy, as well as our own clean energy goals. In addition to future transmission capacity needs, new generation resources will be needed as early as 2029 to ensure we can continue to meet our customers' needs with reliable and low-cost energy. We expect to begin a request for proposal process shortly after finalizing our integrated resource plan in January of 2025. As part of that request for proposal, we do expect to include ownership options through self-build and build transfer agreement options. With that, I'll turn it over to Kevin for a discussion of financial results.

Thanks, Heather, and good morning, everyone. Dennis, I'd like to start by congratulating you on your retirement. It has been my extreme privilege to report to you for almost my entire 19-year career here at Avista. You stepped into the CEO role right before the COVID pandemic, and wow, what a ride it's been. Dennis has been exactly the leader this company required during the pandemic and over the last several post-pandemic years. The investor community likely hasn't had the opportunity to see Dennis's belief in the importance of the right culture for the company. He's had a laser focus on both preserving the best parts of our culture while continuously improving it as well. That focus has made such a positive difference. Dennis is also incredibly thoughtful, warm, easy to talk to, and above all, loyal. He's loyal to our investors, customers, communities, and employees, and has strived for the best outcomes for all. I wish you the very best, and you will be greatly missed. I'm also extraordinarily excited for Heather as we move into a new era. We are in very good hands, and she is the perfect choice to replace Dennis as we look toward the future. Now, turning to our earnings, Avista Utilities results for the third quarter and year-to-date show continued improvement from 2023. This is largely due to the effects of our general rate cases. In the third quarter, we recognized a pre-tax expense of $3.2 million under the Energy Recovery Mechanism, or ERM. Power supply costs came in a little higher than we expected, and year-to-date, we recognized a $7.8 million pre-tax expense under the ERM. AEL&P's results for the third quarter were in line with our expectations, and they're once again on track to meet their full-year earnings targets. Year-to-date, at our other businesses, we've recognized a $0.03 loss per diluted share due to the result of periodic market valuations within our portfolio of investments. We expected that the M&A and IPO activity in the private equity markets, along with public clean-tech market comparables, which in part drive valuations in our other businesses, would improve in the latter half of 2024. That improvement has not yet materialized as we expected. Even so, I'm quite optimistic about the future opportunities within our investment portfolio. You've heard me say before, and it's still true today, that our regulatory strategy is critical to our success. We expect a constructive rate order from our Washington general rate cases in mid-December, and earlier this month, we filed a general rate case in Oregon. We plan to file our next case in Idaho in the first quarter of 2025. We are committed to investing the necessary capital in our utility infrastructure. Capital expenditures at Avista Utilities were $389 million in the first three quarters of 2024. Our planned capital expenditures are about $515 million for the year. We just finalized our capital plan for 2027, and over the next three years, we expect to spend about $1.7 billion in capital to ensure that we can continue to support customer growth and maintain our system to provide safe and reliable energy to our customers. That includes investments of $525 million in 2025, $575 million in 2026, and now $600 million in 2027. We expect capital expenditures at AEL&P to be $21 million, and investments at our other businesses to be $10 million in 2024. On the liquidity front, as of September 30, we had $212 million available under our committed line of credit, and $43 million available under our letter of credit facility. We expect to issue approximately $70 million of common stock in 2024 to fund our capital spending. Through September 30, we've issued $35.7 million of common stock. In April, we remarketed $84 million of tax-exempt bonds, and we do not expect to issue additional long-term debt in 2024. Turning to our earnings guidance, as I mentioned, we expected that the private equity markets would recover through the latter half of 2024, which has not yet occurred. As a result, we now expect our other businesses to have a net loss in the range of $0.04 to $0.06 per diluted share in 2024, and because of that expectation, we are lowering our consolidated earnings guidance for 2024 by $0.10 to a range of $2.26 to $2.46 per diluted share. As a result of higher-than-expected power supply costs, as well as maintenance of thermal generation assets, medical, bad debt, and ongoing legal costs, we expect Avista Utilities to contribute near the low end of the range in 2024. This includes the expected ERM impact of a negative $0.08 per diluted share, which is partially offset by the impact of the new large customer we added earlier this year. We continue to expect AEL&P to contribute in the range of $0.09 to $0.11 per diluted share in 2024. Following our rate case decision in December, we expect to give 2025 guidance in February on our fourth quarter earnings call. Now we'll be happy to take your questions.

Thank you. Our first question comes from Julien Dumoulin-Smith from Jefferies. Your line is open.

Yeah. Hi, it's actually Brian Russo at Jefferies. Good morning.

Good morning, Brian.

Hey, just on the announcement of your participation in the North Plains Connector, what are the upcoming milestones that we should be aware of for you to finalize the non-binding MoU? And then just more specifically, how does that fit in with the integrated resource plan you just filed in terms of longer-term capacity needs, reliability, et cetera?

Great. Thanks, Brian. I'm happy to answer that. And yeah, we're very excited about taking this next step. That is an important piece of our integrated resource plan and having access to additional markets and high load factor wind facilities in the Midwest. So it is a key piece of our future resource needs. The next steps include development of definitive agreements, probably in the next six to nine months. We will continue identifying next steps from there. So that's the next near-term step.

Okay. And I think according to your press release, it doesn't seem like there's any financial commitment from Avista until the project is operational. Is that correct?

There will likely be some payments earlier, smaller, but the majority would be potentially after it's energized.

Okay, great. And then the upcoming RFPs for new generation, I think you referenced 2029 and the scenarios of self-build, build on transfer, et cetera. Is there anything different in this RFP versus past RFPs where there seemed to be limited outcomes for Avista-owned generation relative to the PPAs that the company has signed in the past? Just trying to get a sense of maybe what the size of these RFPs are and when will final bids be due, et cetera?

I don't think we have the details related to when final bids will be due in the RFP, but it will be in early 2025 is when we'll go out for it. Related to self-build and build transfer options, the tax implications have changed with the IRA, and so we do feel that there'll be more competitive options related to us having ownership in certain projects.

Okay, great. And then lastly, just on the ERM and the volatility and the expense year-to-date, just bigger picture, are there ways for Avista to optimize the generation portfolio more going forward and possibly adding more company-owned generation? Is that one solution to managing what seems to be ongoing volatility with your power supply costs?

Hey, Brian, it's Kevin. Thanks for the question. I'm happy to take that one. I'll start by talking about the ERM itself and our regulatory proceeding. As you know, we have filed for and we made some modifications during the pendency of the case to significantly change the ERM and the financial impact that would have on us. I think our team does a great job of optimizing our resources to the best of our ability. And at the same time, power supply dynamic in the Pacific Northwest has changed significantly. With that change, I think a change of the ERM is appropriate. They'll keep optimizing our resources. If we have more resources that we directly own, that would help too. I think the biggest impact is the change to the ERM.

Okay, great. And good luck in the future, Dennis. Appreciate it. Thank you.

Thanks, Brian.

Appreciate it.

Thank you. Our next question comes from Anthony Crowdell with Mizuho. Your line is open.

Hey, good morning. And Dennis, I echo Brian's comments. Best of luck in your next endeavor. Just one question I was having was just on the other segment. I think it's now flipped to a loss for the year for 2024. Just if you can give us more detail on the $0.04 to $0.06 loss, is that mainly a mark-to-market on the unregulated business there?

Yeah, that's correct. Anthony, it's Kevin. Nice to chat with you. It's worth taking a minute to talk about that other segment given the change in the guidance that we have there. It is around mark-to-market and the valuations haven't materialized as we discussed in our comments. It's important to also remember that it's a very small but important piece of our business. When we look at that other segment, it's just 2% when you compare original guidance for utility versus the non-reg side. The clean-tech market has improved. It's a little bit more volatile, certainly, but I'm seeing some good signs that we could see exits and improve valuation down the road. It's also important to remember how strategic the investments are and the benefit it brings back to the utility. We think that this is a strong investment for us as we're better positioned to be that utility of the future. Although there were some headwinds this quarter and this year thus far, we think that 2025 and beyond look pretty good.

Great. And then the last question I have, I guess, is on the state itself, on Washington. And I just don't know the results. I think there were two initiatives or ballot initiatives, maybe the right description, on maybe bringing gas into homes. And I apologize, I forgot the other one. Do you know how those fared in the election yesterday?

Yeah, Anthony. The two were I-2117 and I-2066. The 2117 was or is the repeal of the Climate Commitment Act. That one has failed, so the Climate Commitment Act, which is the carbon trading cap-and-trade program in the state of Washington, will stay in place. The other one, the 2066, is the energy choice one that you're referring to. It has a slight lead, but it's still too close to call. There are still a lot of uncounted votes in the state. We should have a better sense of where it will end up by the end of the week, but it's pretty close. There are still about 700,000 ballots that need to be counted in the state of Washington, so stay tuned on that one.

Stay tuned. Well, thanks so much. Appreciate your time and looking forward to seeing you guys in Florida.

Great. Thanks.

Thank you. Our next question is from Sophie Karp with KBCM. Your line is open.

Hi, guys. Good morning. Thank you for taking my question.

Good morning.

Yeah. So maybe could you talk a little bit about the wildfire season now that it's kind of in the rearview mirror? Lessons learned, like did you have to do PSPS and kind of what you learned from that? And also, are there any legislative initiatives with respect to wildfire response liabilities that you could be pursuing in the upcoming legislative session in Washington? Thank you.

Yeah, Sophie. This is Heather, I'm happy to answer that one for you. We had to do a lot of work in the off-season preparing for wildfire season. We prepared with the public safety power shutoff tool in our toolkit. In late September, we did have a condition that caused us to move one of our circuits. It was about 1500 customers on that circuit that experienced a public safety power shutoff. All of the work we had done to coordinate with our agencies to communicate and make customers aware of that and just internal planning resulted in us being able to restore customers that same day once conditions were safe. We learned a lot and were able to minimize the impact to customers through that, so we felt like we had a pretty successful wildfire season this year in implementing the additional tools and resources that we put into place. Now we're back into that planning season and looking forward. Some of the things that we're focused on are adding weather stations in our higher risk areas. We used manual weather stations to support us during this last wildfire season. A lot of focus is also on undergrounding and covered conductors as well. On the legislative side, we have a team that's been putting a lot of work in to move that forward, working with other utilities and stakeholders in Washington and Idaho. We plan on moving forward legislation in both states in this upcoming legislative session.

Great. Thank you so much. Very helpful. Appreciate it.

Thanks.

I'm showing no further questions at this time. I would now like to turn it back to Stacey Wenz for closing remarks.

Thank you all for joining us today and for your interest in Avista. Have a great day.

This does conclude the program. You may now disconnect.