Good day, and thank you for standing by. Welcome to the Avista Corporation fourth quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one 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 Wenz, Investor Relations Manager. Please go ahead.

Thank you, and good morning. I'm happy to have you with us this morning on Avista Corporation's fourth quarter 2024 earnings conference call. Our earnings and 2024 Form 10-K were released pre-market this morning. You can find both on our website. Joining me this morning are Avista Corporation President and CEO, Heather Rosentrater, 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-Ks for 2024, which is 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 fourth quarter of 2024 were $0.84 per diluted share, compared to $1.08 for the fourth quarter of 2023. For the full year, consolidated earnings were $2.29 per diluted share compared to $2.24 last year. Now I'll turn the call over to Heather.

Thank you, Stacey, and good morning, everyone. I want to start by saying how proud I am of the performance and what we accomplished in 2024. Even with the headwinds we experienced from higher costs, including purchase power costs in 2024, our utility earnings were near the midpoint of our original expectations and improved nearly 5% from 2023. Our regulatory strategy has been central to our focus and critical to our success. Our Washington general rate cases concluded in December with a constructive order from the Washington Commission that provided balanced positive outcomes for our customers and shareholders. The commission also increased our return on equity to 9.8%. Our shareholders will see the benefit of increased margin related to timely capital and improved operations and maintenance cost recovery. The commission also continued its support for important deferral mechanisms like our balancing accounts for wildfire and insurance costs. Unfortunately, the commission did not support our request to modify the mechanics of the energy recovery mechanism. We will continue to look for opportunities to modify the mechanism so that in time, it appropriately reflects the changes we are experiencing in regional energy markets. And we plan to build on the constructive outcomes in the coming year as we work through the regulatory process in our general rate cases in Oregon and in Idaho. We laid a strong foundation in 2024 in more ways than one. Beyond constructive regulatory outcomes, we invested a record $510 million at Avista Utilities to better serve our customers. We entered a memorandum of understanding for the North Plains Connector, and we're excited about the potential opportunity from that project. Completion of the North Plains project will connect our region to generation and markets we previously have not been able to access, which is an important step to improve regional reliability and resource adequacy. The North Plains project was identified in the preferred resource strategy of our electric integrated resource plan or IRP, which we filed in December. As an outcome of the finalized IRP, we expect to issue an all-source request for proposal or RFP calling for bids for up to 375 megawatts of generation targeted to be online in 2029. We're optimistic about considering ownership options as part of the RFP process, through bill transfer agreement options, and through our own self-build options. We continue to lay the groundwork and are actively engaged in conversations with several potential large loads. Another example of the opportunity that 2025 presents. We continue to prioritize mitigating the risk of wildfire. In January, two bills were introduced in both branches of the Washington legislature. The first bill relates to approval of wildfire mitigation plans, and the second bill would enable securitization of the costs associated with large disasters such as a catastrophic wildfire. We're continuing to work with stakeholders on education around these critical legislative changes. In addition to these important legislative efforts, we made great progress in 2024 with our wildfire mitigation plan. We met or exceeded all targets for 2024 for distribution grid hardening, transmission hardening, vegetation management, and continued automation of fire safety mode. In particular, I want to highlight the success of the artificial intelligence-enabled cameras we've begun deploying throughout our service territory. When a fire was started in a remote part of our service territory, not near any of our facilities, the Washington Department of Natural Resources or DNR was notified immediately through the camera alert system. Information captured by the camera enabled the DNR to appropriately scale their response and quickly manage and contain the situation. We will continue hardening our systems, improving the reliability and resiliency of our grid, and keeping our community safe. Building on our success in 2024, we are initiating our consolidated earnings guidance for 2025 with a range of $2.52 to $2.72 per diluted share. The midpoint of this guidance range includes an expected $0.12 expense from the energy recovery mechanism and a zero contribution from our other businesses in 2025. Kevin will provide more detail on our guidance in a minute. Our dividend is an important component of the shareholder return, and for the twenty-third consecutive year, the board has increased the dividend for our shareholders just over 3% to $1.96 per share. We target a competitive dividend payout range of 65% to 75%. And over the last few years, we have been a bit above our average. We are as committed to the financial strength of our company as we are to the dividend, and we expect that our dividend growth rate will be less than the growth in our earnings per share until we reach our target payout range. Now, Kevin, I'll hand the call over to you for a discussion of our earnings.

Thank you, Heather, and good morning, everyone. Turning to our earnings, our consolidated results demonstrate the strength of our utility operations. Avista Utilities delivered earnings near the midpoint of our original guidance range for the segment. In 2024, we recognized a pre-tax expense of $8 million under the energy recovery mechanism because of poor hydro and power supply costs. AEL&P's results were right on target, and we continue to be pleased with their performance. At our other businesses, we recognized a $0.09 loss per diluted share in 2024. This loss is the result of periodic market valuations within our portfolio of investments, losses from early-stage joint venture investments, and borrowing costs. We pursue these investments because they provide us with an opportunity to learn about innovations related to the utility of the future and the future of energy technology, and because they provide for the economic development of our service territories. There's a value that comes from these investments beyond any formal contribution to our earnings. Our regulatory strategy is critical to our success, and the constructive outcomes from our 2024 Washington general rate cases provide a crucial foundation for further execution in 2025. We filed general rate cases in Oregon in November and Idaho earlier this year. In both cases, we are primarily seeking to bring our capital invested in these service territories up to date, as well as set costs at an appropriate level for both jurisdictions. Power supply cost is also an important component of our case in Idaho. We requested to modify Idaho's sharing mechanism, the PCA, to a 95/5 split, as well as include power purchase agreements associated with certain renewable resources into authorized power supply costs. These resources serve our Idaho customers, and we believe it's appropriate that authorized levels of power supply cost reflect that. We are committed to investing the necessary capital in our utility infrastructure. Capital expenditures at Avista Utilities were $510 million in 2024 to support customer growth and maintain our system for the benefit of our customers. At AEL&P, capital expenditures were $23 million, and we invested $10 million at our other businesses in 2024. The capital plan we've shared with you for 2025 of $525 million does not include any incremental capital that would result from our planned RFP process, the opportunity that might arise from the transmission projects like the North Plains Connector, or securing new large load customers. Without considering these potential opportunities, we expect capital expenditures from 2025 through 2029 to be nearly $3 billion, resulting in an annual growth rate of between 5% and 6%. On the liquidity front, as of year-end, we had $153 million of available liquidity under our committed line and $38 million available under our letter of credit facility. In 2024, we remarketed $84 million of tax-exempt bonds and issued $68 million of common stock. We expect to issue up to $120 million of long-term debt and up to $80 million of common stock in 2025. As Heather mentioned, we are initiating our earnings guidance of $2.52 to $2.72 per diluted share. We expect Avista Utilities to contribute within a range of $2.43 to $2.61 per diluted share. The midpoint of our guidance range from Avista Utilities includes an expected negative impact from the energy recovery mechanism of $0.12 in the 90% customer, 10% company sharing band. Including the impact of the energy recovery mechanism in our guidance is a change in practice, and I want to share some background on why we're making that change now. Based upon our projections, and given the Washington Commission's denial of our proposed modification to the energy recovery mechanism, there is no probable scenario in which the energy recovery mechanism can turn around in 2025. Current hydro forecasts show our generation at approximately 94% of normal, and even if we were above normal, there would be no material improvement in the energy recovery mechanism. As you may be aware, the energy recovery mechanism tracks the difference between authorized and actual power supply costs. The increasing frequency of unpredictable extreme weather events, rising concerns around regional resource adequacy as thermal resources are retired and more renewables are integrated into the system, and new carbon emission policy have resulted in forward market uncertainty and associated price premiums. When we calculate the level of power supply cost included in a multi-year rate filing, we use forecast market prices as much as 35 months prior to the actual operating day that have this embedded forward premium. This results in a significant forward calculated value of excess generating capacity. Unfortunately, as we've gotten closer to the operating period, where we are able to sell our long positions, whether due to the collapse of regional energy market prices from forecast levels or having less excess power than we forecast, or both, we are unable to fully capture the forecast value of our excess resource stack, which results in higher net power supply costs than those included in base customer rates. Our guidance assumes approximately $470 million of O&M expense, and is up from 2024 by about 15%. Approximately 40% of this increase is due to amortizations, and base levels of wildfire mitigation and insurance costs with corresponding increases to revenue which result in no impact to earnings. This also reflects higher levels of base cost such as labor and benefits, for which we now have recovery in Washington, and expect the same in Idaho and Oregon, again with no impact to earnings. Going forward, we expect annual increases in O&M to be closer to 4%. We expect our earnings to be split evenly in either half of the year with the first and fourth quarters being the most significant. We expect roughly half of the anticipated $0.12 energy recovery mechanism expense will be absorbed in the first quarter. Due to the staggered timing of rate cases throughout our multiple jurisdictions, going forward, our expected return on equity at Avista Utilities is 8.8%. AEL&P continues to perform well, and we expect it to contribute in the range of $0.09 to $0.11 per diluted share in 2025. For our other businesses, we are changing our approach to providing guidance. We expect our other businesses to have zero contribution to earnings in 2025. There will likely be volatility from one year to the next and even one quarter to the next as we recognize valuation adjustments to these investments and also incur ongoing borrowing costs to fund these investments. These costs may be offset by more variable gains. Over the long term, we expect to see a return on these investments as well as economic development in our service territory. Assuming constructive outcomes in our Idaho and Oregon general rate cases, and without any incremental generation ownership resulting from our upcoming RFP or large load opportunities, we expect that our earnings will grow 4% to 6% over the long term from a forecast 2025 base year. We will be happy to take some questions.

Thank you. As a reminder, to ask a question, please press star one one on your telephone. To withdraw your question, please press star one one again. And our first question comes from Shar Pareza of Guggenheim Partners. Your line is open.

Hey, guys. This is Alex Afrechar. Good morning.

Good morning.

Just on the guidance for 2025, just given some of the past challenges including the drag in the other business, can you just talk about where you see yourself within the range for the year and same with the 4% to 6% CAGR given the increased visibility around the five-year plan?

Well, we're establishing guidance at a midpoint of $2.62. And we've taken other to zero for the reasons that I mentioned as well as embedded the energy recovery mechanism. So we think with that combined with the O&M levels that we've set and I've described here, that we've given ourselves a very good chance of meeting our guidance range and certainly being towards the midpoint. There will be a few variations that happen throughout the year, and we'd like to think we have a chance to beat the midpoint, but we'll see how that plays out. On the long-term growth rate side of 4% to 6%, again, 2025 is the base year. We haven't been able to say that for a while. And we think that with this base year and the way we've set it up and the regulatory support we received in Washington, we expect in our other jurisdictions and the potential growth beyond with the capital I've described, we think we've got a good opportunity to grow at that 4% to 6% and maybe more, but we'll describe that later if we have those opportunities to invest additional capital.

Got it. Thanks. That's helpful. And just on the Idaho rate case, I know we're, you know, somewhat in the early innings, but can you just go into more detail on how the proceeding's going and just sort of any key dates that we should be looking out for? Thanks.

Yeah. Great. Thanks for that question as well. We're very early in the process. We're establishing the procedural schedule. We think if we go all the way to a technical hearing, it would occur in the latter part of July. We have settlement opportunities leading up to that date or the date that will be established. In the past, we've had good success settling in that jurisdiction in particular. So we'll work towards the settlement. If we can't get there due to some of the headwinds that we've had, then we'll move towards a hearing.

Got it. Thanks. I'll leave it there. Thank you.

Hello. Next question comes from Anthony Crowdell of Mizuho. Your line is open.

Hey. Hey. Good morning. Nice job here. Just a couple of cleanup questions from the earlier one. When you talk about the growth rate 4% to 6%, you talked about you're targeting or you have a bias this year towards the midpoint and whether that's maybe the base $2.62. But do you expect to hit it each year of your forecast that you'll be within that 4% to 6% range, or there could be volatility above or below that range as we move forward?

Good morning, Anthony, and thanks for the question. Yeah. Good question. We would, of course, generally plan to be in the midpoint of the range as we go forward or in the midpoint of the 4% to 6%. We do have multiple jurisdictions, and so those regulatory outcomes can be, and I'm using a technical term here, a little bit lumpy. But generally speaking, we'd expect to be in the range of 4% to 6% barring inflation, barring some kind of incremental investment opportunity on the capital side. So, you know, those things can move us outside, but again, generally in the 4% to 6% range.

Do you expect to rebase off of actual, say, you know, as we move a year from now, does that base move to the actual number of 2025 or what's the company's plan, I guess, as you update it moving forward? Or are you thinking we're just going to keep this and maybe every several years, we'll re-strike the ground?

We'd like to be able to rebase every year, and it will depend on our ability to move forward with the rate cases as well as make these other investments. We have another investment opportunity that would cause us to rebase a bit. If we're, for example, moving forward with the next Washington case, depending upon what that case looks like, that might create the ability to rebase. And so it'll be those factors that we'll have to watch. So I can't give you a clear answer at the moment, but we'll be able to update you as we go from quarter to quarter.

Great. And I think you said in 2025, you're not including any contribution from your non-utility businesses. Can I make the assumption that you're not going to include any of those contributions also as we move forward? I think this year, maybe you said it's zero? But if in 2026 or 2027, if you had, you know, positive contribution from those non-utility businesses, that you're also going to exclude them from the 4% to 6%?

Yeah. I think on a go-forward basis, given what we know. We went back and looked at the data over the last ten or fifteen years, and we have these periodic gains at other. And more often than not, the results are near zero or negative. And when we look at the average, it's closer to zero. So it feels like that's the right place to be right now. We're not seeing exits in those types of investments. And without exits, it's hard to see a valuation increase. If that were to start to happen in the future, then we'll reassess. But right now, I think our run rate and the expectation around other would be near zero.

Great. And just my last one, and I apologize. I may have missed some of your comments, but you talked about, I think, in the base year in 2025, you are including some of, like, that firm or the power prices, I guess, a negative for you and you're including that in it, in the base year. Is that accurate? And could you quantify that?

Yeah. Again, that's a shift from past practice for us. And we're doing that because of the outcome in the Washington rate case. That case was very, very constructive with the one exception, that being the energy recovery mechanism. And what we're telling you now, again, different than the past, is we are including $0.12 of negative impact of the energy recovery mechanism. And there really isn't a situation that we can see right now that would pull us significantly up from there, and that's why we're including it.

Great. Thanks so much for taking my questions.

You bet. Thank you, Anthony.

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

Thank you all for joining us today and for your interest in Avista Corporation. Have a great day. This concludes today's conference call. Thank you for participating, and you may now disconnect.