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Jun 30, 2022
Avista Q2 2022 Earnings Report
Reported net income for the second quarter of 2022 and confirmed 2022 and 2023 consolidated guidance.
Key Takeaways
Avista Corp. reported a net income of $11.5 million, or $0.16 per diluted share, for Q2 2022, compared to $14.1 million, or $0.20 per diluted share, for Q2 2021. The company is confirming its 2022 consolidated earnings guidance with a range of $1.93 to $2.13 per diluted share and confirming its 2023 consolidated earnings guidance range of $2.42 to $2.62 per diluted share.
Second quarter consolidated earnings met expectations, and the company is on track to meet full year consolidated earnings guidance.
A settlement was reached in the multiyear Washington general rate cases, providing a positive framework for Washington operations if approved.
Earnings at Avista Utilities were lower than expected due to a write-off of the Dry Ash Disposal project and increased costs from rising interest rates and inflation.
Results from other businesses exceeded expectations due to increased net investment gains.
Avista
Avista
Forward Guidance
Avista Corp. is confirming its 2022 consolidated earnings guidance with a range of $1.93 to $2.13 per diluted share and confirming its 2023 consolidated earnings guidance range of $2.42 to $2.62 per diluted share.
Positive Outlook
- Timely and appropriate rate relief in all jurisdictions is assumed.
- A settlement was reached in Washington general rate cases, expected to provide the opportunity to earn the allowed return in 2023 if approved.
- General rate cases are expected to be filed in Idaho in 2023, with adequate rate relief expected in the second half of 2023.
- AEL&P filed a general rate case in July 2022, with an interim and refundable base rate increase of 4.5 percent expected in September 2022.
- Normal precipitation, temperatures, hydroelectric generation, and other operating conditions are assumed for Avista Utilities and AEL&P.
Challenges Ahead
- The company expects to be near the lower end of the 2022 consolidated earnings guidance range primarily due to higher net power supply costs.
- Avista Utilities' contribution is expected to decrease due to a $4.0 million write-off associated with the 2022 Washington rate case settlement, rising interest rates and inflation.
- The 2022 forecast for the ERM is an expense position within the 90 percent customer/10 percent Company sharing band, which is expected to reduce earnings by $0.09 per diluted share.
- Guidance does not include the effect of unusual or non-recurring items until the effects are known and certain.
- The Public Counsel Unit of the Washington Attorney General's Office did not agree to the settlement in Washington general rate cases.