x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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AVISTA CORPORATION
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(Exact name of Registrant as specified in its charter)
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Washington
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91-0462470
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1411 East Mission Avenue, Spokane, Washington
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99202-2600
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(Address of principal executive offices)
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(Zip Code)
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None
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(Former name, former address and former fiscal year, if changed since last report)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Item No.
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Page
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 6.
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Acronym/Term
|
Meaning
|
|
aMW
|
-
|
Average Megawatt - a measure of the average rate at which a particular generating source produces energy over a period of time
|
AEL&P
|
-
|
Alaska Electric Light and Power Company, the primary operating subsidiary of AERC, which provides electric services in Juneau, Alaska
|
AERC
|
-
|
Alaska Energy and Resources Company, the Company's wholly-owned subsidiary based in Juneau, Alaska
|
AFUDC
|
-
|
Allowance for Funds Used During Construction; represents the cost of both the debt and equity funds used to finance utility plant additions during the construction period
|
ASC
|
-
|
Accounting Standards Codification
|
ASU
|
-
|
Accounting Standards Update
|
Avista Capital
|
-
|
Parent company to the Company’s non-utility businesses
|
Avista Corp.
|
-
|
Avista Corporation, the Company
|
Avista Utilities
|
-
|
Operating division of Avista Corp. (not a subsidiary) comprising the regulated utility operations in the Pacific Northwest
|
Capacity
|
-
|
The rate at which a particular generating source is capable of producing energy, measured in KW or MW
|
Cabinet Gorge
|
-
|
The Cabinet Gorge Hydroelectric Generating Project, located on the Clark Fork River in Idaho
|
Colstrip
|
-
|
The coal-fired Colstrip Generating Plant in southeastern Montana
|
Deadband or ERM deadband
|
-
|
The first $4.0 million in annual power supply costs above or below the amount included in base retail rates in Washington under the ERM in the state of Washington
|
EIM
|
-
|
Energy Imbalance Market
|
Energy
|
-
|
The amount of electricity produced or consumed over a period of time, measured in KWh or MWh. Also, refers to natural gas consumed and is measured in dekatherms
|
EPA
|
-
|
Environmental Protection Agency
|
ERM
|
-
|
The Energy Recovery Mechanism, a mechanism for accounting and rate recovery of certain power supply costs accepted by the utility commission in the state of Washington
|
FASB
|
-
|
Financial Accounting Standards Board
|
FCA
|
-
|
Fixed Cost Adjustment, the electric and natural gas decoupling mechanism in Idaho
|
FERC
|
-
|
Federal Energy Regulatory Commission
|
GAAP
|
-
|
Generally Accepted Accounting Principles
|
Hydro One
|
-
|
Hydro One Limited, based in Toronto, Ontario, Canada
|
IPUC
|
-
|
Idaho Public Utilities Commission
|
Juneau
|
-
|
The City and Borough of Juneau, Alaska
|
KW, KWh
|
-
|
Kilowatt (1000 watts): a measure of generating output or capability. Kilowatt-hour (1000 watt hours): a measure of energy produced
|
MPSC
|
-
|
Public Service Commission of the State of Montana
|
MW, MWh
|
-
|
Megawatt: 1000 KW. Megawatt-hour: 1000 KWh
|
Noxon Rapids
|
-
|
The Noxon Rapids Hydroelectric Generating Project, located on the Clark Fork River in Montana
|
OPUC
|
-
|
The Public Utility Commission of Oregon
|
PCA
|
-
|
The Power Cost Adjustment mechanism, a procedure for accounting and rate recovery of certain power supply costs accepted by the utility commission in the state of Idaho
|
PGA
|
-
|
Purchased Gas Adjustment
|
PPA
|
-
|
Power Purchase Agreement
|
RCA
|
-
|
The Regulatory Commission of Alaska
|
REC
|
-
|
Renewable energy credit
|
ROE
|
-
|
Return on equity
|
ROR
|
-
|
Rate of return on rate base
|
SEC
|
-
|
U.S. Securities and Exchange Commission
|
TCJA
|
-
|
The "Tax Cuts and Jobs Act," signed into law on December 22, 2017
|
Therm
|
-
|
Unit of measurement for natural gas; a therm is equal to approximately one hundred cubic feet (volume) or 100,000 BTUs (energy)
|
Watt
|
-
|
Unit of measurement for electricity; a watt is equal to the rate of work represented by a current of one ampere under a pressure of one volt
|
WUTC
|
-
|
Washington Utilities and Transportation Commission
|
•
|
financial performance;
|
•
|
cash flows;
|
•
|
capital expenditures;
|
•
|
dividends;
|
•
|
capital structure;
|
•
|
other financial items;
|
•
|
strategic goals and objectives;
|
•
|
business environment; and
|
•
|
plans for operations.
|
•
|
weather conditions, which affect both energy demand and electric generating capability, including the impact of precipitation and temperature on hydroelectric resources, the impact of wind patterns on wind-generated power, weather-sensitive customer demand, and similar impacts on supply and demand in the wholesale energy markets;
|
•
|
our ability to obtain financing through the issuance of debt and/or equity securities, which can be affected by various factors including our credit ratings, interest rates, other capital market conditions and global economic conditions;
|
•
|
changes in interest rates that affect borrowing costs, our ability to effectively hedge interest rates for anticipated debt issuances, variable interest rate borrowing and the extent to which we recover interest costs through retail rates collected from customers;
|
•
|
changes in actuarial assumptions, interest rates and the actual return on plan assets for our pension and other postretirement benefit plans, which can affect future funding obligations, pension and other postretirement benefit expense and the related liabilities;
|
•
|
deterioration in the creditworthiness of our customers;
|
•
|
the outcome of legal proceedings and other contingencies;
|
•
|
economic conditions in our service areas, including the economy's effects on customer demand for utility services;
|
•
|
declining energy demand related to customer energy efficiency, conservation measures and/or increased distributed generation;
|
•
|
changes in the long-term global climate and the long-term climate within our utilities' service areas, which can affect, among other things, customer demand patterns, the volume and timing of streamflows to our hydroelectric resources, as well as increased risk of severe weather or natural disasters, including wildfires;
|
•
|
industry and geographic concentrations which may increase our exposure to credit risks due to counterparties, suppliers and customers being similarly affected by changing conditions;
|
•
|
state and federal regulatory decisions or related judicial decisions that affect our ability to recover costs and earn a reasonable return including, but not limited to, disallowance or delay in the recovery of capital investments, operating costs, commodity costs, interest rate swap derivatives and discretion over allowed return on investment;
|
•
|
the loss of regulatory accounting treatment, which could require the write-off of regulatory assets and the loss of regulatory deferral and recovery mechanisms;
|
•
|
volatility and illiquidity in wholesale energy markets, including exchanges, the availability of willing buyers and sellers, changes in wholesale energy prices that can affect operating income, cash requirements to purchase electricity and natural gas, value received for wholesale sales, collateral required of us by individual counterparties and/or exchanges in wholesale energy transactions and credit risk to us from such transactions, and the market value of derivative assets and liabilities;
|
•
|
default or nonperformance on the part of any parties from whom we purchase and/or sell capacity or energy;
|
•
|
potential environmental regulations or lawsuits affecting our ability to utilize or resulting in the obsolescence of our power supply resources;
|
•
|
explosions, fires, accidents, pipeline ruptures or other incidents that may limit energy supply to our facilities or our surrounding territory, which could result in a shortage of commodities in the market that could increase the cost of replacement commodities from other sources;
|
•
|
severe weather or natural disasters, including, but not limited to, avalanches, wind storms, wildfires, earthquakes, snow and ice storms, that can disrupt energy generation, transmission and distribution, as well as the availability and costs of fuel, materials, equipment, supplies and support services;
|
•
|
explosions, fires, accidents, mechanical breakdowns or other incidents that may impair assets and may disrupt operations of any of our generation facilities, transmission, and electric and natural gas distribution systems or other operations and may require us to purchase replacement power;
|
•
|
explosions, fires, accidents or other incidents arising from or allegedly arising from our operations that may cause wildfires, injuries to the public or property damage;
|
•
|
blackouts or disruptions of interconnected transmission systems (the regional power grid);
|
•
|
terrorist attacks, cyberattacks or other malicious acts that may disrupt or cause damage to our utility assets or to the national or regional economy in general, including any effects of terrorism, cyberattacks or vandalism that damage or disrupt information technology systems;
|
•
|
work force issues, including changes in collective bargaining unit agreements, strikes, work stoppages, the loss of key executives, availability of workers in a variety of skill areas, and our ability to recruit and retain employees;
|
•
|
increasing costs of insurance, more restrictive coverage terms and our ability to obtain insurance;
|
•
|
delays or changes in construction costs, and/or our ability to obtain required permits and materials for present or prospective facilities;
|
•
|
increasing health care costs and cost of health insurance provided to our employees and retirees;
|
•
|
third party construction of buildings, billboard signs, towers or other structures within our rights of way, or placement of fuel containers within close proximity to our transformers or other equipment, including overbuild atop natural gas distribution lines;
|
•
|
the loss of key suppliers for materials or services or other disruptions to the supply chain;
|
•
|
adverse impacts to our Alaska electric utility that could result from an extended outage of its hydroelectric generating resources or their inability to deliver energy, due to their lack of interconnectivity to any other electrical grids and the cost of replacement power (diesel);
|
•
|
changing river regulation or operations at hydroelectric facilities not owned by us, which could impact our hydroelectric facilities downstream;
|
•
|
change in the use, availability or abundancy of water resources and/or rights needed for operation of our hydroelectric facilities;
|
•
|
compliance with extensive federal, state and local legislation and regulation applicable to us, including numerous environmental, health, safety, infrastructure protection, reliability and other laws and regulations that affect our operations and costs;
|
•
|
the ability to comply with the terms of the licenses and permits for our hydroelectric or thermal generating facilities at cost-effective levels;
|
•
|
cyberattacks on the operating systems that are used in the operation of our electric generation, transmission and distribution facilities and our natural gas distribution facilities, and cyberattacks on such systems of other energy companies with which we are interconnected, which could damage or destroy facilities or systems or disrupt operations for extended periods of time and result in the incurrence of liabilities and costs;
|
•
|
cyberattacks on the administrative systems that are used in the administration of our business, including customer billing and customer service, accounting, communications, compliance and other administrative functions, and cyberattacks on such systems of our vendors and other companies with which we do business, which could result in the disruption of business operations, the release of private information and the incurrence of liabilities and costs;
|
•
|
changes in costs that impede our ability to effectively implement new information technology systems or to operate and maintain current production technology;
|
•
|
changes in technologies, possibly making some of the current technology we utilize obsolete or introducing new cyber security risks;
|
•
|
insufficient technology skills, which could lead to the inability to develop, modify or maintain our information systems;
|
•
|
growth or decline of our customer base and the extent to which new uses for our services may materialize or existing uses may decline, including, but not limited to, the effect of the trend toward distributed generation at customer sites;
|
•
|
the potential effects of negative publicity regarding our business practices, whether true or not, which could hurt our reputation and result in litigation or a decline in our common stock price;
|
•
|
changes in our strategic business plans, which may be affected by any or all of the foregoing, including the entry into new businesses and/or the exit from existing businesses and the extent of our business development efforts where potential future business is uncertain;
|
•
|
entering into or growth of non-regulated activities may increase earnings volatility;
|
•
|
potential legal proceedings arising from the termination of the proposed acquisition of the Company by Hydro One;
|
•
|
changes in environmental laws, regulations, decisions and policies, including present and potential environmental remediation costs and our compliance with these matters;
|
•
|
the potential effects of initiatives, legislation or administrative rulemaking at the federal, state or local levels, including possible effects on our generating resources or restrictions on greenhouse gas emissions to mitigate concerns over global climate changes;
|
•
|
political pressures or regulatory practices that could constrain or place additional cost burdens on our distribution systems through accelerated adoption of distributed generation or electric-powered transportation or on our energy supply sources, such as campaigns to halt coal-fired power generation and opposition to other thermal generation, wind turbines or hydroelectric facilities;
|
•
|
wholesale and retail competition including alternative energy sources, growth in customer-owned power resource technologies that displace utility-supplied energy or that may be sold back to the utility, and alternative energy suppliers and delivery arrangements;
|
•
|
failure to identify changes in legislation, taxation and regulatory issues that are detrimental or beneficial to our overall business;
|
•
|
policy and/or legislative changes in various regulated areas, including, but not limited to, environmental regulation, healthcare regulations and import/export regulations; and
|
•
|
the risk of municipalization in any of our service territories.
|
Avista Corporation
|
|
2019
|
|
2018
|
||||
Operating Revenues:
|
|
|
|
||||
Utility revenues:
|
|
|
|
||||
Utility revenues, exclusive of alternative revenue programs
|
$
|
393,241
|
|
|
$
|
408,356
|
|
Alternative revenue programs
|
(4,658
|
)
|
|
(5,939
|
)
|
||
Total utility revenues
|
388,583
|
|
|
402,417
|
|
||
Non-utility revenues
|
7,898
|
|
|
6,944
|
|
||
Total operating revenues
|
396,481
|
|
|
409,361
|
|
||
Operating Expenses:
|
|
|
|
||||
Utility operating expenses:
|
|
|
|
||||
Resource costs
|
137,347
|
|
|
154,618
|
|
||
Other operating expenses
|
83,978
|
|
|
77,298
|
|
||
Merger transaction costs
|
19,664
|
|
|
672
|
|
||
Depreciation and amortization
|
48,914
|
|
|
44,733
|
|
||
Taxes other than income taxes
|
31,943
|
|
|
30,829
|
|
||
Non-utility operating expenses:
|
|
|
|
||||
Other operating expenses
|
7,355
|
|
|
6,824
|
|
||
Depreciation and amortization
|
209
|
|
|
181
|
|
||
Total operating expenses
|
329,410
|
|
|
315,155
|
|
||
Income from operations
|
67,071
|
|
|
94,206
|
|
||
Interest expense
|
25,651
|
|
|
24,776
|
|
||
Interest expense to affiliated trusts
|
357
|
|
|
253
|
|
||
Capitalized interest
|
(928
|
)
|
|
(968
|
)
|
||
Merger termination fee
|
(103,000
|
)
|
|
—
|
|
||
Other expense (income)-net
|
(907
|
)
|
|
4,479
|
|
||
Income before income taxes
|
145,898
|
|
|
65,666
|
|
||
Income tax expense
|
30,017
|
|
|
10,710
|
|
||
Net income
|
115,881
|
|
|
54,956
|
|
||
Net income attributable to noncontrolling interests
|
(87
|
)
|
|
(66
|
)
|
||
Net income attributable to Avista Corp. shareholders
|
$
|
115,794
|
|
|
$
|
54,890
|
|
Weighted-average common shares outstanding (thousands), basic
|
65,733
|
|
|
65,639
|
|
||
Weighted-average common shares outstanding (thousands), diluted
|
65,941
|
|
|
65,931
|
|
||
|
|
|
|
||||
Earnings per common share attributable to Avista Corp. shareholders:
|
|
|
|
||||
Basic
|
$
|
1.76
|
|
|
$
|
0.84
|
|
Diluted
|
$
|
1.76
|
|
|
$
|
0.83
|
|
Avista Corporation
|
|
2019
|
|
2018
|
||||
Net income
|
$
|
115,881
|
|
|
$
|
54,956
|
|
Other Comprehensive Income:
|
|
|
|
||||
Change in unfunded benefit obligation for pension and other postretirement benefit plans - net of taxes of $43 and $55 respectively
|
160
|
|
|
204
|
|
||
Total other comprehensive income
|
160
|
|
|
204
|
|
||
Comprehensive income
|
116,041
|
|
|
55,160
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(87
|
)
|
|
(66
|
)
|
||
Comprehensive income attributable to Avista Corporation shareholders
|
$
|
115,954
|
|
|
$
|
55,094
|
|
Avista Corporation
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Assets:
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
14,861
|
|
|
$
|
14,656
|
|
Accounts and notes receivable-less allowances of $6,395 and $5,233, respectively
|
170,200
|
|
|
165,824
|
|
||
Materials and supplies, fuel stock and stored natural gas
|
61,354
|
|
|
63,881
|
|
||
Regulatory assets
|
41,566
|
|
|
48,552
|
|
||
Other current assets
|
60,948
|
|
|
54,010
|
|
||
Assets held for sale
|
15,874
|
|
|
—
|
|
||
Total current assets
|
364,803
|
|
|
346,923
|
|
||
Net utility property
|
4,626,054
|
|
|
4,648,930
|
|
||
Goodwill
|
52,426
|
|
|
57,672
|
|
||
Non-current regulatory assets
|
605,497
|
|
|
614,354
|
|
||
Other property and investments-net and other non-current assets
|
241,203
|
|
|
114,697
|
|
||
Total assets
|
$
|
5,889,983
|
|
|
$
|
5,782,576
|
|
Liabilities and Equity:
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
109,922
|
|
|
$
|
108,372
|
|
Current portion of long-term debt and capital leases
|
104,989
|
|
|
107,645
|
|
||
Short-term borrowings
|
119,000
|
|
|
190,000
|
|
||
Regulatory liabilities
|
55,464
|
|
|
113,209
|
|
||
Other current liabilities
|
175,454
|
|
|
120,358
|
|
||
Liabilities held for sale
|
1,813
|
|
|
—
|
|
||
Total current liabilities
|
566,642
|
|
|
639,584
|
|
||
Long-term debt and capital leases
|
1,701,207
|
|
|
1,755,529
|
|
||
Long-term debt to affiliated trusts
|
51,547
|
|
|
51,547
|
|
||
Pensions and other postretirement benefits
|
218,456
|
|
|
222,537
|
|
||
Deferred income taxes
|
501,928
|
|
|
487,602
|
|
||
Non-current regulatory liabilities
|
786,233
|
|
|
780,701
|
|
||
Other non-current liabilities and deferred credits
|
195,748
|
|
|
71,031
|
|
||
Total liabilities
|
4,021,761
|
|
|
4,008,531
|
|
||
Commitments and Contingencies (See Notes to Condensed Consolidated Financial Statements)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Avista Corporation Shareholders’ Equity:
|
|
|
|
||||
Common stock, no par value; 200,000,000 shares authorized; 65,749,932 and 65,688,356 shares issued and outstanding, respectively
|
1,140,242
|
|
|
1,136,491
|
|
||
Accumulated other comprehensive loss
|
(7,706
|
)
|
|
(7,866
|
)
|
||
Retained earnings
|
734,774
|
|
|
644,595
|
|
||
Total Avista Corporation shareholders’ equity
|
1,867,310
|
|
|
1,773,220
|
|
||
Noncontrolling Interests
|
912
|
|
|
825
|
|
||
Total equity
|
1,868,222
|
|
|
1,774,045
|
|
||
Total liabilities and equity
|
$
|
5,889,983
|
|
|
$
|
5,782,576
|
|
Avista Corporation
|
|
2019
|
|
2018
|
||||
Operating Activities:
|
|
|
|
||||
Net income
|
$
|
115,881
|
|
|
$
|
54,956
|
|
Non-cash items included in net income:
|
|
|
|
||||
Depreciation and amortization
|
49,123
|
|
|
45,823
|
|
||
Deferred income tax provision and investment tax credits
|
8,883
|
|
|
(5,049
|
)
|
||
Power and natural gas cost amortizations (deferrals), net
|
(48,084
|
)
|
|
72
|
|
||
Amortization of debt expense
|
669
|
|
|
815
|
|
||
Amortization of investment in exchange power
|
613
|
|
|
613
|
|
||
Stock-based compensation expense
|
4,845
|
|
|
1,963
|
|
||
Equity-related AFUDC
|
(1,485
|
)
|
|
(1,392
|
)
|
||
Pension and other postretirement benefit expense
|
9,084
|
|
|
8,170
|
|
||
Other regulatory assets and liabilities and deferred debits and credits
|
1,016
|
|
|
2,127
|
|
||
Change in decoupling regulatory deferral
|
4,471
|
|
|
5,703
|
|
||
Other
|
(1,943
|
)
|
|
3,778
|
|
||
Contributions to defined benefit pension plan
|
(7,300
|
)
|
|
(7,300
|
)
|
||
Changes in certain current assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable
|
(9,787
|
)
|
|
15,963
|
|
||
Materials and supplies, fuel stock and stored natural gas
|
(394
|
)
|
|
8,815
|
|
||
Collateral posted for derivative instruments
|
3,432
|
|
|
18,382
|
|
||
Other current assets
|
1,705
|
|
|
(473
|
)
|
||
Accounts payable
|
16,697
|
|
|
(21,997
|
)
|
||
Income taxes payable
|
19,360
|
|
|
15,432
|
|
||
Other current liabilities
|
30,095
|
|
|
38,374
|
|
||
Net cash provided by operating activities
|
196,881
|
|
|
184,775
|
|
||
|
|
|
|
||||
Investing Activities:
|
|
|
|
||||
Utility property capital expenditures (excluding equity-related AFUDC)
|
(93,615
|
)
|
|
(81,817
|
)
|
||
Issuance of notes receivable at subsidiaries
|
(200
|
)
|
|
(1,000
|
)
|
||
Repayments of notes receivable at subsidiaries
|
261
|
|
|
—
|
|
||
Equity and property investments made by subsidiaries
|
(3,504
|
)
|
|
(3,671
|
)
|
||
Distributions received from investments
|
149
|
|
|
—
|
|
||
Other
|
(755
|
)
|
|
(866
|
)
|
||
Net cash used in investing activities
|
(97,664
|
)
|
|
(87,354
|
)
|
Avista Corporation
|
|
2019
|
|
2018
|
||||
Financing Activities:
|
|
|
|
||||
Net decrease in short-term borrowings
|
$
|
(71,000
|
)
|
|
$
|
(55,398
|
)
|
Maturity of long-term debt and capital leases
|
(665
|
)
|
|
(3,037
|
)
|
||
Issuance of common stock, net of issuance costs
|
190
|
|
|
232
|
|
||
Cash dividends paid
|
(25,615
|
)
|
|
(24,634
|
)
|
||
Other
|
(896
|
)
|
|
(4,483
|
)
|
||
Net cash used in financing activities
|
(97,986
|
)
|
|
(87,320
|
)
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents, including cash classified within current assets held for sale
|
1,231
|
|
|
10,101
|
|
||
Less: Net increase in cash and cash equivalents classified within current assets held for sale (see Note 18 of Notes to Condensed Consolidated Financial Statements)
|
1,026
|
|
|
—
|
|
||
Net increase in cash and cash equivalents
|
205
|
|
|
10,101
|
|
||
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
14,656
|
|
|
16,172
|
|
||
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
14,861
|
|
|
$
|
26,273
|
|
Avista Corporation
|
|
2019
|
|
2018
|
||||
Common Stock, Shares:
|
|
|
|
||||
Shares outstanding at beginning of period
|
65,688,356
|
|
|
65,494,333
|
|
||
Shares issued
|
61,576
|
|
|
174,144
|
|
||
Shares outstanding at end of period
|
65,749,932
|
|
|
65,668,477
|
|
||
Common Stock, Amount:
|
|
|
|
||||
Balance at beginning of period
|
$
|
1,136,491
|
|
|
$
|
1,133,448
|
|
Equity compensation expense
|
4,452
|
|
|
1,798
|
|
||
Issuance of common stock, net of issuance costs
|
190
|
|
|
232
|
|
||
Payment of minimum tax withholdings for share-based payment awards
|
(891
|
)
|
|
(3,929
|
)
|
||
Balance at end of period
|
1,140,242
|
|
|
1,131,549
|
|
||
Accumulated Other Comprehensive Loss:
|
|
|
|
||||
Balance at beginning of period
|
(7,866
|
)
|
|
(8,090
|
)
|
||
Other comprehensive income
|
160
|
|
|
204
|
|
||
Reclassification of excess income tax benefits
|
—
|
|
|
(1,742
|
)
|
||
Balance at end of period
|
(7,706
|
)
|
|
(9,628
|
)
|
||
Retained Earnings:
|
|
|
|
||||
Balance at beginning of period
|
644,595
|
|
|
604,470
|
|
||
Net income attributable to Avista Corporation shareholders
|
115,794
|
|
|
54,890
|
|
||
Cash dividends paid on common stock
|
(25,615
|
)
|
|
(24,634
|
)
|
||
Reclassification of excess income tax benefits
|
—
|
|
|
1,742
|
|
||
Balance at end of period
|
734,774
|
|
|
636,468
|
|
||
Total Avista Corporation shareholders’ equity
|
1,867,310
|
|
|
1,758,389
|
|
||
Noncontrolling Interests:
|
|
|
|
||||
Balance at beginning of period
|
825
|
|
|
656
|
|
||
Net income attributable to noncontrolling interests
|
87
|
|
|
66
|
|
||
Cash dividends paid to subsidiary noncontrolling interests
|
—
|
|
|
(540
|
)
|
||
Balance at end of period
|
912
|
|
|
182
|
|
||
Total equity
|
$
|
1,868,222
|
|
|
$
|
1,758,571
|
|
Dividends declared per common share
|
$
|
0.3875
|
|
|
$
|
0.3725
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Materials and supplies
|
$
|
47,705
|
|
|
$
|
47,403
|
|
Fuel stock
|
4,930
|
|
|
4,869
|
|
||
Stored natural gas
|
8,719
|
|
|
11,609
|
|
||
Total
|
$
|
61,354
|
|
|
$
|
63,881
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Collateral posted for derivative instruments after netting with outstanding derivative liabilities
|
$
|
37,347
|
|
|
$
|
26,809
|
|
Prepayments
|
16,647
|
|
|
17,536
|
|
||
Other
|
6,954
|
|
|
9,665
|
|
||
Total
|
$
|
60,948
|
|
|
$
|
54,010
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Utility plant in service
|
$
|
6,202,942
|
|
|
$
|
6,209,968
|
|
Construction work in progress
|
165,725
|
|
|
160,598
|
|
||
Total
|
6,368,667
|
|
|
6,370,566
|
|
||
Less: Accumulated depreciation and amortization
|
1,742,613
|
|
|
1,721,636
|
|
||
Total net utility property
|
$
|
4,626,054
|
|
|
$
|
4,648,930
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Operating lease ROU assets
|
$
|
70,834
|
|
|
$
|
—
|
|
Finance lease ROU assets
|
53,711
|
|
|
—
|
|
||
Non-utility property
|
29,557
|
|
|
31,355
|
|
||
Equity investments
|
32,967
|
|
|
29,257
|
|
||
Investment in affiliated trust
|
11,547
|
|
|
11,547
|
|
||
Notes receivable
|
11,161
|
|
|
11,073
|
|
||
Deferred compensation assets
|
8,675
|
|
|
8,400
|
|
||
Other
|
22,751
|
|
|
23,065
|
|
||
Total
|
$
|
241,203
|
|
|
$
|
114,697
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Accrued taxes other than income taxes
|
$
|
49,206
|
|
|
$
|
36,858
|
|
Income taxes payable
|
20,368
|
|
|
141
|
|
||
Employee paid time off accruals
|
21,813
|
|
|
20,992
|
|
||
Accrued interest
|
30,315
|
|
|
16,704
|
|
||
Current portion of pensions and other postretirement benefits
|
9,503
|
|
|
9,151
|
|
||
Operating lease liabilities
|
4,120
|
|
|
—
|
|
||
Finance lease liabilities
|
2,695
|
|
|
—
|
|
||
Utility energy commodity derivative liabilities
|
4,035
|
|
|
3,908
|
|
||
Other current liabilities
|
33,399
|
|
|
32,604
|
|
||
Total other current liabilities
|
$
|
175,454
|
|
|
$
|
120,358
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Operating lease liabilities
|
$
|
67,635
|
|
|
$
|
—
|
|
Finance lease liabilities
|
53,850
|
|
|
—
|
|
||
Deferred investment tax credits
|
31,383
|
|
|
29,725
|
|
||
Asset retirement obligations
|
18,455
|
|
|
18,266
|
|
||
Derivative liabilities
|
10,861
|
|
|
10,300
|
|
||
Other
|
13,564
|
|
|
12,740
|
|
||
Total
|
$
|
195,748
|
|
|
$
|
71,031
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Current
|
|
Non-Current
|
|
Current
|
|
Non-Current
|
||||||||
Regulatory Assets
|
|
|
|
|
|
|
|
||||||||
Energy commodity derivatives
|
$
|
28,159
|
|
|
$
|
11,862
|
|
|
$
|
41,428
|
|
|
$
|
16,866
|
|
Decoupling surcharge
|
6,782
|
|
|
8,395
|
|
|
3,408
|
|
|
17,501
|
|
||||
Pension and other postretirement benefit plans
|
—
|
|
|
224,805
|
|
|
—
|
|
|
228,062
|
|
||||
Interest rate swaps
|
—
|
|
|
138,327
|
|
|
—
|
|
|
133,854
|
|
||||
Deferred income taxes
|
—
|
|
|
93,646
|
|
|
—
|
|
|
91,188
|
|
||||
Settlement with Coeur d'Alene Tribe
|
—
|
|
|
42,316
|
|
|
—
|
|
|
42,643
|
|
||||
Demand side management programs
|
—
|
|
|
15,064
|
|
|
—
|
|
|
19,674
|
|
||||
Utility plant to be abandoned
|
—
|
|
|
24,477
|
|
|
—
|
|
|
24,334
|
|
||||
Other regulatory assets
|
6,625
|
|
|
46,605
|
|
|
3,716
|
|
|
40,232
|
|
||||
Total regulatory assets
|
$
|
41,566
|
|
|
$
|
605,497
|
|
|
$
|
48,552
|
|
|
$
|
614,354
|
|
|
|
|
|
|
|
|
|
||||||||
Regulatory Liabilities
|
|
|
|
|
|
|
|
||||||||
Income tax related liabilities
|
$
|
29,401
|
|
|
$
|
421,216
|
|
|
$
|
27,997
|
|
|
$
|
425,613
|
|
Deferred natural gas costs
|
1,253
|
|
|
—
|
|
|
40,713
|
|
|
—
|
|
||||
Deferral power costs
|
12,555
|
|
|
26,106
|
|
|
25,072
|
|
|
16,933
|
|
||||
Decoupling rebate
|
1,061
|
|
|
4,664
|
|
|
6,782
|
|
|
204
|
|
||||
Utility plant retirement costs
|
—
|
|
|
300,373
|
|
|
—
|
|
|
297,379
|
|
||||
Interest rate swaps
|
—
|
|
|
20,396
|
|
|
—
|
|
|
28,078
|
|
||||
Other regulatory liabilities
|
11,194
|
|
|
13,478
|
|
|
12,645
|
|
|
12,494
|
|
||||
Total regulatory liabilities
|
$
|
55,464
|
|
|
$
|
786,233
|
|
|
$
|
113,209
|
|
|
$
|
780,701
|
|
|
2019
|
|
2018
|
||||
Utility-related taxes
|
$
|
19,089
|
|
|
$
|
19,167
|
|
|
2019
|
|
2018
|
||||
Avista Utilities
|
|
|
|
||||
Revenue from contracts with customers
|
$
|
354,301
|
|
|
$
|
354,162
|
|
Derivative revenues
|
24,127
|
|
|
58,392
|
|
||
Alternative revenue programs
|
(4,658
|
)
|
|
(5,939
|
)
|
||
Deferrals and amortizations for rate refunds to customers
|
2,135
|
|
|
(19,822
|
)
|
||
Other utility revenues
|
1,797
|
|
|
1,961
|
|
||
Total Avista Utilities
|
377,702
|
|
|
388,754
|
|
||
AEL&P
|
|
|
|
||||
Revenue from contracts with customers
|
10,736
|
|
|
14,650
|
|
||
Deferrals and amortizations for rate refunds to customers
|
(48
|
)
|
|
(1,122
|
)
|
||
Other utility revenues
|
193
|
|
|
135
|
|
||
Total AEL&P
|
10,881
|
|
|
13,663
|
|
||
Other
|
|
|
|
||||
Revenue from contracts with customers
|
7,647
|
|
|
6,729
|
|
||
Other revenues
|
251
|
|
|
215
|
|
||
Total other
|
7,898
|
|
|
6,944
|
|
||
Total operating revenues
|
$
|
396,481
|
|
|
$
|
409,361
|
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
Avista Utilities
|
|
AEL&P
|
|
Total Utility
|
|
Avista Utilities
|
|
AEL&P
|
|
Total Utility
|
||||||||||||
ELECTRIC OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
$
|
115,392
|
|
|
$
|
5,852
|
|
|
$
|
121,244
|
|
|
$
|
114,753
|
|
|
$
|
6,538
|
|
|
$
|
121,291
|
|
Commercial and governmental
|
79,245
|
|
|
4,821
|
|
|
84,066
|
|
|
78,909
|
|
|
8,044
|
|
|
86,953
|
|
||||||
Industrial
|
25,248
|
|
|
—
|
|
|
25,248
|
|
|
25,119
|
|
|
—
|
|
|
25,119
|
|
||||||
Public street and highway lighting
|
1,903
|
|
|
63
|
|
|
1,966
|
|
|
1,859
|
|
|
68
|
|
|
1,927
|
|
||||||
Total retail revenue
|
221,788
|
|
|
10,736
|
|
|
232,524
|
|
|
220,640
|
|
|
14,650
|
|
|
235,290
|
|
||||||
Transmission
|
5,152
|
|
|
—
|
|
|
5,152
|
|
|
3,830
|
|
|
—
|
|
|
3,830
|
|
||||||
Other revenue from contracts with customers
|
8,194
|
|
|
—
|
|
|
8,194
|
|
|
6,291
|
|
|
—
|
|
|
6,291
|
|
||||||
Total electric revenue from contracts with customers
|
$
|
235,134
|
|
|
$
|
10,736
|
|
|
$
|
245,870
|
|
|
$
|
230,761
|
|
|
$
|
14,650
|
|
|
$
|
245,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
NATURAL GAS OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
$
|
77,336
|
|
|
$
|
—
|
|
|
$
|
77,336
|
|
|
$
|
80,653
|
|
|
$
|
—
|
|
|
$
|
80,653
|
|
Commercial
|
36,595
|
|
|
—
|
|
|
36,595
|
|
|
37,373
|
|
|
—
|
|
|
37,373
|
|
||||||
Industrial and interruptible
|
1,627
|
|
|
—
|
|
|
1,627
|
|
|
1,683
|
|
|
—
|
|
|
1,683
|
|
||||||
Total retail revenue
|
115,558
|
|
|
—
|
|
|
115,558
|
|
|
119,709
|
|
|
—
|
|
|
119,709
|
|
||||||
Transportation
|
2,484
|
|
|
—
|
|
|
2,484
|
|
|
2,567
|
|
|
—
|
|
|
2,567
|
|
||||||
Other revenue from contracts with customers
|
1,125
|
|
|
—
|
|
|
1,125
|
|
|
1,125
|
|
|
—
|
|
|
1,125
|
|
||||||
Total natural gas revenue from contracts with customers
|
$
|
119,167
|
|
|
$
|
—
|
|
|
$
|
119,167
|
|
|
$
|
123,401
|
|
|
$
|
—
|
|
|
$
|
123,401
|
|
|
2019
|
||
Operating lease cost:
|
|
||
Fixed lease cost (Other operating expenses)
|
$
|
1,103
|
|
Variable lease cost (Other operating expenses)
|
243
|
|
|
Total operating lease cost
|
$
|
1,346
|
|
|
|
||
Finance lease cost:
|
|
||
Amortization of ROU asset (Depreciation and amortization)
|
$
|
910
|
|
Interest on lease liabilities (Interest expense)
|
699
|
|
|
Total finance lease cost
|
$
|
1,609
|
|
|
March 31,
|
||
|
2019
|
||
Operating Leases
|
|
||
Operating lease ROU assets (Other property and investments-net and other non-current assets)
|
$
|
70,834
|
|
|
|
||
Other current liabilities
|
$
|
4,120
|
|
Other non-current liabilities and deferred credits
|
67,635
|
|
|
Total operating lease liabilities
|
$
|
71,755
|
|
|
|
||
Finance Leases
|
|
||
Finance lease ROU assets (Other property and investments-net and other non-current assets) (a)
|
$
|
53,711
|
|
|
|
||
Other current liabilities (b)
|
$
|
2,695
|
|
Other non-current liabilities and deferred credits (b)
|
53,850
|
|
|
Total finance lease liabilities
|
$
|
56,545
|
|
|
|
||
Weighted Average Remaining Lease Term
|
|
||
Operating leases
|
27.32 years
|
|
|
Finance leases
|
9.64 years
|
|
|
|
|
||
Weighted Average Discount Rate
|
|
||
Operating leases
|
3.82
|
%
|
|
Finance leases
|
4.85
|
%
|
(a)
|
At December 31, 2018, the finance lease ROU assets were included in "Net utility property" on the Condensed Consolidated Balance Sheet. Due to the adoption of ASC 842 on January 1, 2019, the Company has reclassified these amounts to "Other property and investments-net and other non-current assets" on the Condensed Consolidated Balance Sheet such that their presentation as of March 31, 2019 is consistent with operating leases.
|
(b)
|
At December 31, 2018, the finance lease liabilities were included in "Current portion of long-term debt" and "Long-term debt and capital leases" on the Condensed Consolidated Balance Sheet. Due to the adoption of ASC 842 on January 1, 2019, the Company has reclassified these amounts to "Other current liabilities" and "Other non-current liabilities and deferred credits" on the Condensed Consolidated Balance Sheet such that their presentation as of March 31, 2019 is consistent with operating leases.
|
|
Operating Leases
|
|
Finance Leases
|
||||
Remainder 2019
|
$
|
4,272
|
|
|
$
|
4,091
|
|
2020
|
4,364
|
|
|
5,462
|
|
||
2021
|
4,367
|
|
|
5,457
|
|
||
2022
|
4,375
|
|
|
5,460
|
|
||
2023
|
4,383
|
|
|
5,456
|
|
||
Thereafter
|
95,923
|
|
|
54,574
|
|
||
Total lease payments
|
$
|
117,684
|
|
|
$
|
80,500
|
|
Less: imputed interest
|
(45,929
|
)
|
|
(23,955
|
)
|
||
Total
|
$
|
71,755
|
|
|
$
|
56,545
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
2019
|
$
|
4,995
|
|
|
$
|
5,455
|
|
2020
|
4,876
|
|
|
5,462
|
|
||
2021
|
4,859
|
|
|
5,457
|
|
||
2022
|
4,782
|
|
|
5,460
|
|
||
2023
|
4,780
|
|
|
5,456
|
|
||
Thereafter
|
102,389
|
|
|
54,574
|
|
||
Total lease payments
|
$
|
126,681
|
|
|
$
|
81,864
|
|
Less: imputed interest
|
—
|
|
|
(24,654
|
)
|
||
Total
|
$
|
126,681
|
|
|
$
|
57,210
|
|
|
Purchases
|
|
Sales
|
||||||||||||||||||||
|
Electric Derivatives
|
|
Gas Derivatives
|
|
Electric Derivatives
|
|
Gas Derivatives
|
||||||||||||||||
Year
|
Physical (1)
MWh
|
|
Financial (1)
MWh
|
|
Physical (1)
mmBTUs
|
|
Financial (1)
mmBTUs
|
|
Physical (1)
MWh |
|
Financial (1)
MWh |
|
Physical (1)
mmBTUs |
|
Financial (1)
mmBTUs |
||||||||
Remainder 2019
|
30
|
|
|
596
|
|
|
4,640
|
|
|
81,438
|
|
|
109
|
|
|
2,280
|
|
|
669
|
|
|
35,913
|
|
2020
|
—
|
|
|
—
|
|
|
1,138
|
|
|
53,388
|
|
|
123
|
|
|
959
|
|
|
1,430
|
|
|
16,378
|
|
2021
|
—
|
|
|
—
|
|
|
—
|
|
|
15,290
|
|
|
—
|
|
|
246
|
|
|
1,049
|
|
|
4,100
|
|
2022
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2023
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Purchases
|
|
Sales
|
||||||||||||||||||||
|
Electric Derivatives
|
|
Gas Derivatives
|
|
Electric Derivatives
|
|
Gas Derivatives
|
||||||||||||||||
Year
|
Physical (1)
MWh |
|
Financial (1)
MWh |
|
Physical (1)
mmBTUs |
|
Financial (1)
mmBTUs |
|
Physical (1)
MWh |
|
Financial (1)
MWh |
|
Physical (1)
mmBTUs |
|
Financial (1)
mmBTUs |
||||||||
2019
|
206
|
|
|
941
|
|
|
10,732
|
|
|
101,293
|
|
|
197
|
|
|
2,790
|
|
|
2,909
|
|
|
54,418
|
|
2020
|
—
|
|
|
—
|
|
|
1,138
|
|
|
47,225
|
|
|
123
|
|
|
959
|
|
|
1,430
|
|
|
14,625
|
|
2021
|
—
|
|
|
—
|
|
|
—
|
|
|
9,670
|
|
|
—
|
|
|
—
|
|
|
1,049
|
|
|
4,100
|
|
2022
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2023
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Physical transactions represent commodity transactions in which Avista Corp. will take or make delivery of either electricity or natural gas; financial transactions represent derivative instruments with delivery of cash in the amount of the benefit or cost but with no physical delivery of the commodity, such as futures, swap derivatives, options, or forward contracts.
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Number of contracts
|
22
|
|
|
31
|
|
||
Notional amount (in United States dollars)
|
$
|
6,681
|
|
|
$
|
4,018
|
|
Notional amount (in Canadian dollars)
|
8,917
|
|
|
5,386
|
|
Balance Sheet Date
|
|
Number of Contracts
|
|
Notional Amount
|
|
Mandatory Cash Settlement Date
|
||
March 31, 2019
|
|
6
|
|
$
|
70,000
|
|
|
2019
|
|
|
6
|
|
60,000
|
|
|
2020
|
|
|
|
2
|
|
25,000
|
|
|
2021
|
|
|
|
8
|
|
90,000
|
|
|
2022
|
|
December 31, 2018
|
|
6
|
|
$
|
70,000
|
|
|
2019
|
|
|
6
|
|
60,000
|
|
|
2020
|
|
|
|
2
|
|
25,000
|
|
|
2021
|
|
|
|
7
|
|
80,000
|
|
|
2022
|
|
|
Fair Value
|
||||||||||||||
Derivative and Balance Sheet Location
|
|
Gross
Asset
|
|
Gross
Liability
|
|
Collateral
Netted
|
|
Net Asset
(Liability)
on Balance
Sheet
|
||||||||
Foreign currency exchange derivatives
|
|
|
|
|
|
|
|
|
||||||||
Other current liabilities
|
|
$
|
15
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap derivatives
|
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
|
2,587
|
|
|
(530
|
)
|
|
—
|
|
|
2,057
|
|
||||
Other property and investments-net and other non-current assets
|
|
2,503
|
|
|
(1,754
|
)
|
|
—
|
|
|
749
|
|
||||
Other current liabilities
|
|
—
|
|
|
(524
|
)
|
|
—
|
|
|
(524
|
)
|
||||
Other non-current liabilities and deferred credits
|
|
—
|
|
|
(12,402
|
)
|
|
2,860
|
|
|
(9,542
|
)
|
||||
Energy commodity derivatives
|
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
|
262
|
|
|
(12
|
)
|
|
—
|
|
|
250
|
|
||||
Other current liabilities
|
|
26,875
|
|
|
(55,284
|
)
|
|
24,374
|
|
|
(4,035
|
)
|
||||
Other non-current liabilities and deferred credits
|
|
4,349
|
|
|
(16,211
|
)
|
|
10,543
|
|
|
(1,319
|
)
|
||||
Total derivative instruments recorded on the balance sheet
|
|
$
|
36,591
|
|
|
$
|
(86,732
|
)
|
|
$
|
37,777
|
|
|
$
|
(12,364
|
)
|
|
|
Fair Value
|
||||||||||||||
Derivative and Balance Sheet Location
|
|
Gross
Asset
|
|
Gross
Liability
|
|
Collateral
Netted |
|
Net Asset
(Liability) on Balance Sheet |
||||||||
Foreign currency exchange derivatives
|
|
|
|
|
|
|
|
|
||||||||
Other current liabilities
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
Interest rate swap derivatives
|
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
|
5,283
|
|
|
—
|
|
|
—
|
|
|
5,283
|
|
||||
Other property and investments-net and other non-current assets
|
|
5,283
|
|
|
(440
|
)
|
|
—
|
|
|
4,843
|
|
||||
Other non-current liabilities and deferred credits
|
|
—
|
|
|
(7,391
|
)
|
|
530
|
|
|
(6,861
|
)
|
||||
Energy commodity derivatives
|
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
|
400
|
|
|
(130
|
)
|
|
—
|
|
|
270
|
|
||||
Other current liabilities
|
|
31,457
|
|
|
(73,155
|
)
|
|
37,790
|
|
|
(3,908
|
)
|
||||
Other non-current liabilities and deferred credits
|
|
4,426
|
|
|
(21,292
|
)
|
|
13,427
|
|
|
(3,439
|
)
|
||||
Total derivative instruments recorded on the balance sheet
|
|
$
|
46,849
|
|
|
$
|
(102,453
|
)
|
|
$
|
51,747
|
|
|
$
|
(3,857
|
)
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Energy commodity derivatives
|
|
|
|
||||
Cash collateral posted
|
$
|
72,264
|
|
|
$
|
78,025
|
|
Letters of credit outstanding
|
56,100
|
|
|
6,500
|
|
||
Balance sheet offsetting (cash collateral against net derivative positions)
|
34,917
|
|
|
51,217
|
|
||
|
|
|
|
||||
Interest rate swap derivatives
|
|
|
|
||||
Cash collateral posted
|
2,860
|
|
|
530
|
|
||
Balance sheet offsetting (cash collateral against net derivative positions)
|
2,860
|
|
|
530
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Energy commodity derivatives
|
|
|
|
||||
Liabilities with credit-risk-related contingent features
|
$
|
1,406
|
|
|
$
|
2,193
|
|
Additional collateral to post
|
1,415
|
|
|
2,193
|
|
||
|
|
|
|
||||
Interest rate swap derivatives
|
|
|
|
||||
Liabilities with credit-risk-related contingent features
|
15,210
|
|
|
7,831
|
|
||
Additional collateral to post
|
10,064
|
|
|
6,579
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost (a)
|
$
|
4,874
|
|
|
$
|
5,450
|
|
|
$
|
772
|
|
|
$
|
804
|
|
Interest cost
|
7,138
|
|
|
6,466
|
|
|
1,372
|
|
|
1,197
|
|
||||
Expected return on plan assets
|
(7,815
|
)
|
|
(8,250
|
)
|
|
(718
|
)
|
|
(500
|
)
|
||||
Amortization of prior service cost
|
75
|
|
|
75
|
|
|
(275
|
)
|
|
(815
|
)
|
||||
Net loss recognition
|
2,415
|
|
|
2,088
|
|
|
1,246
|
|
|
1,655
|
|
||||
Net periodic benefit cost
|
$
|
6,687
|
|
|
$
|
5,829
|
|
|
$
|
2,397
|
|
|
$
|
2,341
|
|
(a)
|
Total service costs in the table above are recorded to the same accounts as labor expense. Labor and benefits expense is recorded to various projects based on whether the work is a capital project or an operating expense. Approximately
40 percent
of all labor and benefits is capitalized to utility property and
60 percent
is expensed to utility other operating expenses.
|
|
2019
|
|
2018
|
||||||||
Federal income taxes at statutory rates
|
$
|
30,639
|
|
21.0
|
%
|
|
$
|
13,790
|
|
21.0
|
%
|
Increase (decrease) in tax resulting from:
|
|
|
|
|
|
||||||
Tax effect of regulatory treatment of utility plant differences
|
(2,080
|
)
|
(1.4
|
)
|
|
(1,018
|
)
|
(1.6
|
)
|
||
State income tax expense
|
1,659
|
|
1.1
|
|
|
964
|
|
1.5
|
|
||
Acquisition costs
|
(1,824
|
)
|
(1.2
|
)
|
|
46
|
|
0.1
|
|
||
Settlement of equity awards
|
612
|
|
0.4
|
|
|
(990
|
)
|
(1.5
|
)
|
||
Other
|
1,011
|
|
0.7
|
|
|
(2,082
|
)
|
(3.2
|
)
|
||
Total income tax expense
|
$
|
30,017
|
|
20.6
|
%
|
|
$
|
10,710
|
|
16.3
|
%
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Balance outstanding at end of period (1)
|
$
|
119,000
|
|
|
$
|
190,000
|
|
Letters of credit outstanding at end of period
|
$
|
60,103
|
|
|
$
|
10,503
|
|
Average interest rate at end of period
|
3.31
|
%
|
|
3.18
|
%
|
(1)
|
As of
March 31, 2019
and
December 31, 2018
, the balance outstanding was classified as short-term borrowings on the Condensed Consolidated Balance Sheet.
|
|
March 31,
|
|
December 31,
|
||
|
2019
|
|
2018
|
||
Low distribution rate
|
3.50
|
%
|
|
2.36
|
%
|
High distribution rate
|
3.61
|
%
|
|
3.61
|
%
|
Distribution rate at the end of the period
|
3.50
|
%
|
|
3.61
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
||||||||
Long-term debt (Level 2)
|
$
|
1,053,500
|
|
|
$
|
1,155,199
|
|
|
$
|
1,053,500
|
|
|
$
|
1,142,292
|
|
Long-term debt (Level 3)
|
767,000
|
|
|
734,742
|
|
|
767,000
|
|
|
734,742
|
|
||||
Snettisham finance lease obligation (Level 3)
|
56,545
|
|
|
56,900
|
|
|
57,210
|
|
|
55,600
|
|
||||
Long-term debt to affiliated trusts (Level 3)
|
51,547
|
|
|
38,145
|
|
|
51,547
|
|
|
38,145
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Counterparty
and Cash Collateral Netting (1) |
|
Total
|
||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Energy commodity derivatives
|
$
|
—
|
|
|
$
|
31,363
|
|
|
$
|
—
|
|
|
$
|
(31,113
|
)
|
|
$
|
250
|
|
Level 3 energy commodity derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
Natural gas exchange agreement
|
—
|
|
|
—
|
|
|
123
|
|
|
(123
|
)
|
|
—
|
|
|||||
Foreign currency exchange derivatives
|
—
|
|
|
15
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|||||
Interest rate swap derivatives
|
—
|
|
|
5,090
|
|
|
—
|
|
|
(2,284
|
)
|
|
2,806
|
|
|||||
Deferred compensation assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mutual Funds:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed income securities (2)
|
1,758
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,758
|
|
|||||
Equity securities (2)
|
6,456
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,456
|
|
|||||
Total
|
$
|
8,214
|
|
|
$
|
36,468
|
|
|
$
|
123
|
|
|
$
|
(33,535
|
)
|
|
$
|
11,270
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Energy commodity derivatives
|
$
|
—
|
|
|
$
|
68,668
|
|
|
$
|
—
|
|
|
$
|
(66,030
|
)
|
|
$
|
2,638
|
|
Level 3 energy commodity derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
Natural gas exchange agreement
|
—
|
|
|
—
|
|
|
2,227
|
|
|
(123
|
)
|
|
2,104
|
|
|||||
Power exchange agreement
|
—
|
|
|
—
|
|
|
612
|
|
|
—
|
|
|
612
|
|
|||||
Foreign currency exchange derivatives
|
—
|
|
|
15
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|||||
Interest rate swap derivatives
|
—
|
|
|
15,210
|
|
|
—
|
|
|
(5,144
|
)
|
|
10,066
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
83,893
|
|
|
$
|
2,839
|
|
|
$
|
(71,312
|
)
|
|
$
|
15,420
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Counterparty
and Cash Collateral Netting (1) |
|
Total
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Energy commodity derivatives
|
$
|
—
|
|
|
$
|
36,252
|
|
|
$
|
—
|
|
|
$
|
(35,982
|
)
|
|
$
|
270
|
|
Level 3 energy commodity derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
Natural gas exchange agreement
|
—
|
|
|
—
|
|
|
31
|
|
|
(31
|
)
|
|
—
|
|
|||||
Interest rate swap derivatives
|
—
|
|
|
10,566
|
|
|
—
|
|
|
(440
|
)
|
|
10,126
|
|
|||||
Deferred compensation assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mutual Funds:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed income securities (2)
|
1,745
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,745
|
|
|||||
Equity securities (2)
|
6,157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,157
|
|
|||||
Total
|
$
|
7,902
|
|
|
$
|
46,818
|
|
|
$
|
31
|
|
|
$
|
(36,453
|
)
|
|
$
|
18,298
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Energy commodity derivatives
|
$
|
—
|
|
|
$
|
89,283
|
|
|
$
|
—
|
|
|
$
|
(87,199
|
)
|
|
$
|
2,084
|
|
Level 3 energy commodity derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
Natural gas exchange agreement
|
—
|
|
|
—
|
|
|
2,805
|
|
|
(31
|
)
|
|
2,774
|
|
|||||
Power exchange agreement
|
—
|
|
|
—
|
|
|
2,488
|
|
|
—
|
|
|
2,488
|
|
|||||
Power option agreement
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Foreign currency exchange derivatives
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
Interest rate swap derivatives
|
—
|
|
|
7,831
|
|
|
—
|
|
|
(970
|
)
|
|
6,861
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
97,159
|
|
|
$
|
5,294
|
|
|
$
|
(88,200
|
)
|
|
$
|
14,253
|
|
(1)
|
The Company is permitted to net derivative assets and derivative liabilities with the same counterparty when a legally enforceable master netting agreement exists. In addition, the Company nets derivative assets and derivative liabilities against any payables and receivables for cash collateral held or placed with these same counterparties.
|
(2)
|
These assets are included in other property and investments-net and other non-current assets on the Condensed Consolidated Balance Sheets.
|
|
|
Fair Value (Net) at
|
|
|
|
|
|
|
||
|
|
March 31, 2019
|
|
Valuation Technique
|
|
Unobservable
Input
|
|
Range
|
||
Power exchange agreement
|
|
$
|
(612
|
)
|
|
Surrogate facility
pricing
|
|
O&M charges
|
|
$40.05-$52.59/MWh (1)
|
|
|
|
|
Transaction volumes
|
|
28,860 MWhs
|
||||
Natural gas exchange
agreement
|
|
$
|
(2,104
|
)
|
|
Internally derived
weighted average cost of gas |
|
Forward purchase
prices
|
|
$1.70 - $2.98/mmBTU
|
|
|
|
|
|
||||||
|
|
|
|
Forward sales prices
|
|
$1.63 - $4.11/mmBTU
|
||||
|
|
|
|
Purchase volumes
|
|
270,000 - 310,000 mmBTUs
|
||||
|
|
|
|
Sales volumes
|
|
60,000 - 310,000 mmBTUs
|
|
Natural Gas Exchange Agreement
|
|
Power Exchange Agreement
|
|
Total
|
||||||
Three months ended March 31, 2019:
|
|
|
|
|
|
||||||
Balance as of January 1, 2019
|
$
|
(2,774
|
)
|
|
$
|
(2,488
|
)
|
|
$
|
(5,262
|
)
|
Total gains or (losses) (realized/unrealized):
|
|
|
|
|
|
||||||
Included in regulatory assets/liabilities (1)
|
8,977
|
|
|
(1,018
|
)
|
|
7,959
|
|
|||
Settlements
|
(8,307
|
)
|
|
2,894
|
|
|
(5,413
|
)
|
|||
Ending balance as of March 31, 2019 (2)
|
$
|
(2,104
|
)
|
|
$
|
(612
|
)
|
|
$
|
(2,716
|
)
|
|
Natural Gas Exchange Agreement
|
|
Power Exchange Agreement
|
|
Total
|
||||||
Three months ended March 31, 2018:
|
|
|
|
|
|
||||||
Balance as of January 1, 2018
|
$
|
(3,164
|
)
|
|
$
|
(13,245
|
)
|
|
$
|
(16,409
|
)
|
Total gains or (losses) (realized/unrealized):
|
|
|
|
|
|
||||||
Included in regulatory assets/liabilities (1)
|
203
|
|
|
(1,877
|
)
|
|
(1,674
|
)
|
|||
Settlements
|
156
|
|
|
4,959
|
|
|
5,115
|
|
|||
Ending balance as of March 31, 2018 (2)
|
$
|
(2,805
|
)
|
|
$
|
(10,163
|
)
|
|
$
|
(12,968
|
)
|
|
|
|
|
|
|
(1)
|
All gains and losses are included in other regulatory assets and liabilities. There were no gains and losses included in either net income or other comprehensive income during any of the periods presented in the table above.
|
(2)
|
There were no purchases, issuances or transfers from other categories of any derivatives instruments during the periods presented in the table above.
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Unfunded benefit obligation for pensions and other postretirement benefit plans - net of taxes of $2,048 and $2,091, respectively
|
$
|
7,706
|
|
|
$
|
7,866
|
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Loss
|
|
|
||||||
Details about Accumulated Other Comprehensive Loss Components
|
|
2019
|
|
2018
|
|
Affected Line Item in Statement of Income
|
||||
Amortization of defined benefit pension items
|
|
|
|
|
|
|||||
Amortization of net prior service cost
|
|
$
|
(200
|
)
|
|
$
|
(228
|
)
|
|
(a)
|
Amortization of net loss
|
|
3,661
|
|
|
2,995
|
|
|
(a)
|
||
Adjustment due to effects of regulation
|
|
(3,258
|
)
|
|
(2,508
|
)
|
|
(a)
|
||
|
|
203
|
|
|
259
|
|
|
Total before tax
|
||
|
|
(43
|
)
|
|
(55
|
)
|
|
Tax expense
|
||
|
|
$
|
160
|
|
|
$
|
204
|
|
|
Net of tax
|
(a)
|
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 7 for additional details).
|
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to Avista Corp. shareholders
|
$
|
115,794
|
|
|
$
|
54,890
|
|
Denominator:
|
|
|
|
||||
Weighted-average number of common shares outstanding-basic
|
65,733
|
|
|
65,639
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Performance and restricted stock awards
|
208
|
|
|
292
|
|
||
Weighted-average number of common shares outstanding-diluted
|
65,941
|
|
|
65,931
|
|
||
Earnings per common share attributable to Avista Corp. shareholders:
|
|
|
|
||||
Basic
|
$
|
1.76
|
|
|
$
|
0.84
|
|
Diluted
|
$
|
1.76
|
|
|
$
|
0.83
|
|
•
|
Fink v. Morris, et al.,
No. 17203616-6 (filed September 15, 2017, amended complaint filed October 25, 2017).
|
|
Avista
Utilities
|
|
Alaska Electric Light and Power Company
|
|
Total Utility
|
|
Other
|
|
Intersegment
Eliminations
(1)
|
|
Total
|
||||||||||||
For the three months ended March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating revenues
|
$
|
377,702
|
|
|
$
|
10,881
|
|
|
$
|
388,583
|
|
|
$
|
7,898
|
|
|
$
|
—
|
|
|
$
|
396,481
|
|
Resource costs
|
138,712
|
|
|
(1,365
|
)
|
|
137,347
|
|
|
—
|
|
|
—
|
|
|
137,347
|
|
||||||
Other operating expenses (2)
|
100,583
|
|
|
3,059
|
|
|
103,642
|
|
|
7,355
|
|
|
—
|
|
|
110,997
|
|
||||||
Depreciation and amortization
|
46,507
|
|
|
2,407
|
|
|
48,914
|
|
|
209
|
|
|
—
|
|
|
49,123
|
|
||||||
Income from operations
|
60,224
|
|
|
6,513
|
|
|
66,737
|
|
|
334
|
|
|
—
|
|
|
67,071
|
|
||||||
Interest expense (3)
|
24,264
|
|
|
1,596
|
|
|
25,860
|
|
|
588
|
|
|
(440
|
)
|
|
26,008
|
|
||||||
Income taxes
|
28,544
|
|
|
1,363
|
|
|
29,907
|
|
|
110
|
|
|
—
|
|
|
30,017
|
|
||||||
Net income attributable to Avista Corp. shareholders
|
111,901
|
|
|
3,552
|
|
|
115,453
|
|
|
341
|
|
|
—
|
|
|
115,794
|
|
||||||
Capital expenditures (4)
|
92,309
|
|
|
1,306
|
|
|
93,615
|
|
|
162
|
|
|
—
|
|
|
93,777
|
|
||||||
For the three months ended March 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating revenues
|
$
|
388,754
|
|
|
$
|
13,663
|
|
|
$
|
402,417
|
|
|
$
|
6,944
|
|
|
$
|
—
|
|
|
$
|
409,361
|
|
Resource costs
|
151,665
|
|
|
2,953
|
|
|
154,618
|
|
|
—
|
|
|
—
|
|
|
154,618
|
|
||||||
Other operating expenses (2)
|
75,139
|
|
|
2,831
|
|
|
77,970
|
|
|
6,824
|
|
|
—
|
|
|
84,794
|
|
||||||
Depreciation and amortization
|
43,267
|
|
|
1,466
|
|
|
44,733
|
|
|
181
|
|
|
—
|
|
|
44,914
|
|
||||||
Income (loss) from operations
|
88,145
|
|
|
6,122
|
|
|
94,267
|
|
|
(61
|
)
|
|
—
|
|
|
94,206
|
|
||||||
Interest expense (3)
|
23,965
|
|
|
894
|
|
|
24,859
|
|
|
335
|
|
|
(165
|
)
|
|
25,029
|
|
||||||
Income taxes
|
10,417
|
|
|
1,464
|
|
|
11,881
|
|
|
(1,171
|
)
|
|
—
|
|
|
10,710
|
|
||||||
Net income (loss) attributable to Avista Corp. shareholders
|
55,540
|
|
|
3,772
|
|
|
59,312
|
|
|
(4,422
|
)
|
|
—
|
|
|
54,890
|
|
||||||
Capital expenditures (4)
|
81,176
|
|
|
641
|
|
|
81,817
|
|
|
214
|
|
|
—
|
|
|
82,031
|
|
||||||
Total Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of March 31, 2019: (5)
|
$
|
5,524,962
|
|
|
$
|
275,488
|
|
|
$
|
5,800,450
|
|
|
$
|
107,398
|
|
|
$
|
(17,865
|
)
|
|
$
|
5,889,983
|
|
As of December 31, 2018:
|
$
|
5,458,104
|
|
|
$
|
272,950
|
|
|
$
|
5,731,054
|
|
|
$
|
87,050
|
|
|
$
|
(35,528
|
)
|
|
$
|
5,782,576
|
|
(1)
|
Intersegment eliminations reported as interest expense represent intercompany interest.
|
(2)
|
Other operating expenses for Avista Utilities for the
three months ended March 31
, 2019 include merger transaction costs of
$19.7 million
, which are separately disclosed on the Condensed Consolidated Statements of Income. The
three months ended March 31
, 2018 include merger transaction costs of
$0.7 million
, which are also separately disclosed.
|
(3)
|
Including interest expense to affiliated trusts.
|
(4)
|
The capital expenditures for the other businesses are included in other investing activities on the Condensed Consolidated Statements of Cash Flows.
|
(5)
|
The total assets for Other as of March 31, 2019 includes
$15.9 million
in assets held for sale related to the sale of METALfx. See Note 18 for further discussion.
|
|
March 31, 2019
|
||
Assets:
|
|
||
Current Assets:
|
|
||
Cash and cash equivalents
|
$
|
1,026
|
|
Accounts and notes receivable-less allowances of $5
|
3,048
|
|
|
Materials and supplies
|
2,922
|
|
|
Other current assets
|
159
|
|
|
Total current assets
|
7,155
|
|
|
Goodwill
|
5,247
|
|
|
Deferred income taxes (1)
|
1,598
|
|
|
Other property and investments-net and other non-current assets
|
1,874
|
|
|
Total assets
|
$
|
15,874
|
|
Liabilities:
|
|
||
Current Liabilities:
|
|
||
Accounts payable
|
$
|
760
|
|
Other current liabilities
|
901
|
|
|
Total current liabilities
|
1,661
|
|
|
Other non-current liabilities
|
152
|
|
|
Total liabilities
|
$
|
1,813
|
|
(1)
|
On a standalone basis, METALfx has a deferred tax asset; however, on a consolidated basis, Avista Corp. has a net deferred tax liability which does not include the deferred tax asset above.
|
|
2019
|
|
2018
|
||||
Avista Utilities
|
$
|
111,901
|
|
|
$
|
55,540
|
|
AEL&P
|
3,552
|
|
|
3,772
|
|
||
Other
|
341
|
|
|
(4,422
|
)
|
||
Net income attributable to Avista Corp. shareholders
|
$
|
115,794
|
|
|
$
|
54,890
|
|
•
|
seek recovery of operating costs and capital investments, and
|
•
|
seek the opportunity to earn reasonable returns as allowed by regulators.
|
|
|
Electric
|
|
Natural Gas
|
||||||||||
Effective Date
|
|
Revenue
Increase |
|
Base
Rate Increase |
|
Revenue
Increase
|
|
Base
Rate Increase
|
||||||
April 1, 2020
|
|
$
|
45.8
|
|
|
9.1
|
%
|
|
$
|
12.9
|
|
|
13.8
|
%
|
April 1, 2021
|
|
$
|
18.9
|
|
|
3.5
|
%
|
|
$
|
6.5
|
|
|
6.1
|
%
|
•
|
The upgrade of generating units and other equipment at our Little Falls Dam, which will provide more generating capacity.
|
•
|
Our distribution grid modernization program that rebuilds and upgrades electric feeders in the system, replacing old equipment like poles, conductor, and transformers to improve service reliability, capture energy efficiency savings and improve operational ability.
|
•
|
Ongoing management and replacement of electric distribution wood poles through our wood pole management program.
|
•
|
The ongoing project to systematically replace portions of natural gas distribution pipe in our service area that were installed prior to 1987, as well as replacement of other natural gas service equipment.
|
•
|
The rebuild of a high voltage transmission line, including the installation of steel poles and crossarms.
|
•
|
Technology upgrades that support necessary business processes and operational efficiencies.
|
|
|
Electric
|
|
Natural Gas
|
||||||||||
Effective Date
|
|
Revenue
Increase |
|
Base
Rate Increase |
|
Revenue
Increase
|
|
Base
Rate Increase
|
||||||
January 1, 2018
|
|
$
|
12.9
|
|
|
5.2
|
%
|
|
$
|
1.2
|
|
|
2.9
|
%
|
January 1, 2019
|
|
$
|
4.5
|
|
|
1.8
|
%
|
|
$
|
1.1
|
|
|
2.7
|
%
|
(1)
|
This balance includes public street and highway lighting, which is considered part of retail electric revenues, and deferrals/amortizations to customers related to federal income tax law changes.
|
|
Electric Operating
Revenues |
||||||
|
2019
|
|
2018
|
||||
Current year decoupling deferrals (a)
|
$
|
(2,681
|
)
|
|
$
|
4,012
|
|
Amortization of prior year decoupling deferrals (b)
|
1,076
|
|
|
(4,880
|
)
|
||
Total electric decoupling revenue
|
$
|
(1,605
|
)
|
|
$
|
(868
|
)
|
(a)
|
Positive amounts are increases in decoupling revenue in the current year and will be surcharged to customers in future years. Negative numbers are decreases in decoupling revenue in the current year and will be rebated to customers in future years.
|
(b)
|
Positive amounts are increases in decoupling revenue in the current year and are related to the amortization of rebate balances that resulted in prior years and are being refunded to customers (causing a corresponding decrease in retail revenue from customers) in the current year. Negative numbers are decreases in decoupling revenue in the current year and are related to the amortization of surcharge balances that resulted in prior years and are being surcharged to customers (causing a corresponding increase in retail revenue from customers) in the current year.
|
•
|
a
$1.1 million
increase in retail electric revenue due to an increase in total MWhs sold (increased revenues
$8.1 million
), partially offset by a decrease in revenue per MWh (decreased revenues
$7.0 million
).
|
◦
|
The increase in total retail MWhs sold was the result of weather that was cooler than the prior year (which increased electric heating loads) and customer growth. Compared to the
first quarter
of
2018
, residential electric use per customer increased
5 percent
and commercial use per customer increased
1 percent
. Heating degree days in Spokane were
14 percent
above normal and
17 percent
above the
first quarter
of
2018
.
|
◦
|
The decrease in revenue per MWh was primarily due to a decrease in decoupling rates (as our decoupling surcharges were larger in prior years, which resulted in higher surcharge rates in 2018 as compared to 2019) and decreases associated with the lower corporate tax rate. This was partially offset by general rate increases in Washington (effective May 1, 2018) and Idaho (effective January 1, 2019).
|
•
|
a
$19.2 million
decrease in wholesale electric revenues due to a decrease in sales volumes (decreased revenues
$15.1 million
) and a decrease in sales prices (decreased revenues
$4.1 million
). The fluctuation in volumes and prices was primarily the result of our optimization activities.
|
•
|
a
$1.2 million
decrease in sales of fuel due to a decrease in sales of natural gas fuel as part of thermal generation resource optimization activities.
|
•
|
a
$0.7 million
decrease in electric decoupling revenue. Weather was cooler than normal in the
first quarter
of
2019
, which resulted in decoupling deferral rebates related to the current year. This was partially offset by the amortization of decoupling rebates from prior years.
|
•
|
the
$14.1 million
increase in other electric revenues was primarily related to federal income tax law changes that lowered the corporate tax rate from 35 percent to 21 percent. As our customers' rates had the 35 percent corporate tax rate built in from prior general rate cases, we deferred the impact of the change in the first quarter of 2018. Effective May 1, 2018 in Washington and June 1, 2018 in Idaho, base rates reflect the lower 21 percent corporate tax.
|
(1)
|
This balance includes interruptible and industrial revenues, which are considered part of retail natural gas revenues, and deferrals/amortizations to customers related to federal income tax law changes.
|
|
Natural Gas Operating
Revenues |
||||||
|
2019
|
|
2018
|
||||
Current year decoupling deferrals (a)
|
$
|
(6,106
|
)
|
|
$
|
149
|
|
Amortization of prior year decoupling deferrals (b)
|
3,053
|
|
|
(5,220
|
)
|
||
Total natural gas decoupling revenue
|
$
|
(3,053
|
)
|
|
$
|
(5,071
|
)
|
(a)
|
Positive amounts are increases in decoupling revenue in the current year and will be surcharged to customers in future years. Negative numbers are decreases in decoupling revenue in the current year and will be rebated to customers in future years.
|
(b)
|
Positive amounts are increases in decoupling revenue in the current year and are related to the amortization of rebate balances that resulted in prior years and are being refunded to customers (causing a corresponding decrease in retail revenue from customers) in the current year. Negative numbers are decreases in decoupling revenue in the current year and are related to the amortization of surcharge balances that resulted in prior years and are being surcharged to customers (causing a corresponding increase in retail revenue from customers) in the current year.
|
•
|
a
$4.2 million
decrease in natural gas retail revenues due to lower retail rates (decreased revenues
$20.0 million
), partially offset by an increase in volumes (increased revenues
$15.8 million
).
|
◦
|
We sold more retail natural gas in the
first quarter
of
2019
as compared to the
first quarter
of
2018
primarily due to colder weather and partially due to customer growth. Compared to
first quarter
of
2018
, residential use per customer increased
13 percent
and commercial use per customer increased
16 percent
. Heating degree days in Spokane were
14 percent
above normal, and
17 percent
above the
first quarter
of
2018
. Heating degree days in Medford were
10 percent
above normal, and
7 percent
above the
first quarter
of
2018
.
|
◦
|
Lower retail rates were due to PGAs and rate decreases associated with the lower corporate tax rate and decoupling rate decreases (as our decoupling surcharges were larger in prior years, which resulted in higher surcharge rates in 2018 as compared to 2019), partially offset by general rate increases in Washington (effective May 1, 2018) and Idaho (effective January 1, 2019).
|
•
|
a
$16.1 million
increase in wholesale natural gas revenues due to an increase in prices (increased revenues
$13.1 million
) and an increase in volumes (increased revenues
$3.0 million
). Differences between revenues and costs from sales of resources in excess of retail load requirements and from resource optimization are accounted for through the PGA mechanisms.
|
•
|
a
$2.0 million
increase in natural gas decoupling revenue. Weather was cooler than normal in the
first quarter
of
2019
, which resulted in decoupling deferral rebates related to the current year. This was partially offset by the amortization of decoupling rebates from prior years.
|
•
|
the
$7.4 million
increase in other natural gas revenues was primarily related to federal income tax law changes that lowered the corporate tax rate from 35 percent to 21 percent. As our customers' rates had the 35 percent corporate tax rate built in from prior general rate cases, we deferred the impact of the change in the first quarter of 2018. Effective May 1, 2018 in Washington, June 1, 2018 in Idaho and March 1, 2019 in Oregon, base rates reflect the lower 21 percent corporate tax.
|
|
Electric
Customers
|
|
Natural Gas
Customers
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Residential
|
343,938
|
|
|
339,218
|
|
|
319,483
|
|
|
313,247
|
|
Commercial
|
42,874
|
|
|
42,624
|
|
|
35,707
|
|
|
35,506
|
|
Interruptible
|
—
|
|
|
—
|
|
|
42
|
|
|
38
|
|
Industrial
|
1,314
|
|
|
1,321
|
|
|
239
|
|
|
248
|
|
Public street and highway lighting
|
601
|
|
|
588
|
|
|
—
|
|
|
—
|
|
Total retail customers
|
388,727
|
|
|
383,751
|
|
|
355,471
|
|
|
349,039
|
|
•
|
a
$6.1 million
decrease in purchased power costs due to a decrease in the volume of power purchases (decreased costs
$10.5 million
), partially offset by an increase in wholesale prices (increased costs
$4.4 million
). The fluctuation in volumes and prices was primarily the result of our optimization activities during the quarter.
|
•
|
a
$7.9 million
increase in fuel for generation primarily due to an increase in thermal generation, as well as an increase in natural gas fuel prices.
|
•
|
a
$0.8 million
increase in other fuel costs. This represents fuel and the related derivative instruments that were purchased for generation but were later sold when conditions indicated that it was more economical to sell the fuel as part of the resource optimization process. When the fuel or related derivative instruments are sold, that revenue is included in sales of fuel.
|
•
|
an
$11.0 million
decrease from net amortizations and deferrals of power costs.
|
•
|
a
$3.4 million
net increase from other regulatory amortizations and other electric resource costs.
|
•
|
a
$52.2 million
increase in natural gas purchased due to an increase in the price of natural gas (increased costs
$39.3 million
) and an increase in total therms purchased (increased costs
$12.9 million
).
|
•
|
a
$35.7 million
decrease from net amortizations and deferrals of natural gas costs, primarily reflecting higher natural gas prices.
|
•
|
a
$1.8 million
increase from other regulatory amortizations.
|
|
Electric
|
|
Natural Gas
|
|
Intracompany
|
|
Total
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
Operating revenues
|
$
|
256,467
|
|
|
$
|
262,477
|
|
|
$
|
164,677
|
|
|
$
|
143,448
|
|
|
$
|
(43,442
|
)
|
|
$
|
(17,171
|
)
|
|
$
|
377,702
|
|
|
$
|
388,754
|
|
Resource costs
|
93,881
|
|
|
98,890
|
|
|
88,273
|
|
|
69,946
|
|
|
(43,442
|
)
|
|
(17,171
|
)
|
|
138,712
|
|
|
151,665
|
|
||||||||
Utility margin
|
$
|
162,586
|
|
|
$
|
163,587
|
|
|
$
|
76,404
|
|
|
$
|
73,502
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
238,990
|
|
|
$
|
237,089
|
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating revenues
|
$
|
10,881
|
|
|
$
|
13,663
|
|
Resource costs
|
(1,365
|
)
|
|
2,953
|
|
||
Utility margin
|
$
|
12,246
|
|
|
$
|
10,710
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Amount
|
|
Percent
of total
|
|
Amount
|
|
Percent
of total
|
||||||
Current portion of long-term debt and capital leases
|
$
|
104,989
|
|
|
2.7
|
%
|
|
$
|
107,645
|
|
|
2.8
|
%
|
Short-term borrowings
|
119,000
|
|
|
3.1
|
%
|
|
190,000
|
|
|
4.9
|
%
|
||
Long-term debt to affiliated trusts
|
51,547
|
|
|
1.3
|
%
|
|
51,547
|
|
|
1.3
|
%
|
||
Long-term debt and capital leases
|
1,701,207
|
|
|
44.3
|
%
|
|
1,755,529
|
|
|
45.3
|
%
|
||
Total debt
|
1,976,743
|
|
|
51.4
|
%
|
|
2,104,721
|
|
|
54.3
|
%
|
||
Total Avista Corporation shareholders’ equity
|
1,867,310
|
|
|
48.6
|
%
|
|
1,773,220
|
|
|
45.7
|
%
|
||
Total
|
$
|
3,844,053
|
|
|
100.0
|
%
|
|
$
|
3,877,941
|
|
|
100.0
|
%
|
|
2019
|
|
2018
|
||||
Borrowings outstanding at end of period
|
$
|
119,000
|
|
|
$
|
50,000
|
|
Letters of credit outstanding at end of period
|
$
|
60,103
|
|
|
$
|
35,420
|
|
Maximum borrowings outstanding during the period
|
$
|
190,000
|
|
|
$
|
111,000
|
|
Average borrowings outstanding during the period
|
$
|
113,404
|
|
|
$
|
76,211
|
|
Average interest rate on borrowings during the period
|
3.30
|
%
|
|
2.30
|
%
|
||
Average interest rate on borrowings at end of period
|
3.31
|
%
|
|
2.56
|
%
|
|
March 31, 2019
|
||
Additional collateral taking into account contractual thresholds
|
$
|
6,900
|
|
Additional collateral without contractual thresholds
|
8,500
|
|
|
Purchases
|
|
Sales
|
||||||||||||||||||||||||||||
|
Electric Derivatives
|
|
Gas Derivatives
|
|
Electric Derivatives
|
|
Gas Derivatives
|
||||||||||||||||||||||||
Year
|
Physical (1)
|
|
Financial (1)
|
|
Physical (1)
|
|
Financial (1)
|
|
Physical (1)
|
|
Financial (1)
|
|
Physical (1)
|
|
Financial (1)
|
||||||||||||||||
Remainder 2019
|
$
|
(607
|
)
|
|
$
|
7,354
|
|
|
$
|
(1,124
|
)
|
|
$
|
(7,539
|
)
|
|
$
|
144
|
|
|
$
|
(20,818
|
)
|
|
$
|
(494
|
)
|
|
$
|
254
|
|
2020
|
—
|
|
|
—
|
|
|
(740
|
)
|
|
(577
|
)
|
|
(680
|
)
|
|
(8,893
|
)
|
|
(1,119
|
)
|
|
(2,769
|
)
|
||||||||
2021
|
—
|
|
|
—
|
|
|
—
|
|
|
(549
|
)
|
|
—
|
|
|
(1,065
|
)
|
|
(483
|
)
|
|
(315
|
)
|
||||||||
2022
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
2023
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Purchases
|
|
Sales
|
||||||||||||||||||||||||||||
|
Electric Derivatives
|
|
Gas Derivatives
|
|
Electric Derivatives
|
|
Gas Derivatives
|
||||||||||||||||||||||||
Year
|
Physical (1)
|
|
Financial (1)
|
|
Physical (1)
|
|
Financial (1)
|
|
Physical (1)
|
|
Financial (1)
|
|
Physical (1)
|
|
Financial (1)
|
||||||||||||||||
2019
|
$
|
(2,238
|
)
|
|
$
|
7,289
|
|
|
$
|
(991
|
)
|
|
$
|
(32,285
|
)
|
|
$
|
34
|
|
|
$
|
(19,047
|
)
|
|
$
|
(443
|
)
|
|
$
|
6,252
|
|
2020
|
—
|
|
|
—
|
|
|
(1,266
|
)
|
|
(7,797
|
)
|
|
(28
|
)
|
|
(4,044
|
)
|
|
(1,517
|
)
|
|
(240
|
)
|
||||||||
2021
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,393
|
)
|
|
—
|
|
|
—
|
|
|
(629
|
)
|
|
47
|
|
||||||||
2022
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
||||||||
2023
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Physical transactions represent commodity transactions where we will take or make delivery of either electricity or natural gas; financial transactions represent derivative instruments with delivery of cash in the amount of the benefit or cost but with no physical delivery of the commodity, such as futures, swap derivatives, options, or forward contracts.
|
|
|
|
AVISTA CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 1, 2019
|
|
/s/ Mark T. Thies
|
|
|
|
Mark T. Thies
|
|
|
|
Senior Vice President,
Chief Financial Officer, and Treasurer
(Principal Financial Officer)
|
1.
|
I have reviewed this report on Form 10-Q of Avista Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 1, 2019
|
/s/ Scott L. Morris
|
|
|
Scott L. Morris
|
|
|
Chairman of the Board
|
|
|
and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this report on Form 10-Q of Avista Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 1, 2019
|
/s/ Mark T. Thies
|
|
|
Mark T. Thies
|
|
|
Senior Vice President,
|
|
|
Chief Financial Officer, and Treasurer
|
|
|
(Principal Financial Officer)
|
|
/s/ Scott L. Morris
|
|
Scott L. Morris
|
|
Chairman of the Board
and Chief Executive Officer
|
|
|
|
/s/ Mark T. Thies
|
|
Mark T. Thies
|
|
Senior Vice President,
|
|
Chief Financial Officer, and Treasurer
|