10q10k10q10k.net

What changed in AVISTA CORP's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of AVISTA CORP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+464 added−562 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-22)

Top changes in AVISTA CORP's 2023 10-K

464 paragraphs added · 562 removed · 385 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

113 edited+11 added−35 removed39 unchanged
Biggest changeAEL&P ELE CTRIC OPERATING STATISTICS Years Ended December 31, 2022 2021 2020 ELECTRIC OPERATIONS OPERATING REVENUES (Dollars in Thousands): Residential $ 19,667 $ 18,940 $ 18,618 Commercial and government 25,782 25,861 23,754 Public street and highway lighting 254 250 251 Total retail 45,703 45,051 42,623 Other 1 315 186 Total electric operating revenues $ 45,704 $ 45,366 $ 42,809 ENERGY SALES (Thousands of MWhs): Residential 163 160 157 Commercial and government 240 243 227 Public street and highway lighting 1 1 1 Total electric energy sales 404 404 385 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 15,036 14,919 14,840 Commercial and government 2,305 2,282 2,271 Public street and highway lighting 236 230 228 Total electric retail customers 17,577 17,431 17,339 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (KWh) 10,841 10,773 10,581 Revenue per KWh (in cents) 12.07 11.84 11.86 Annual revenue per customer $ 1,307.99 $ 1,269.52 $ 1,254.58 HEATING DEGREE DAYS: (1) Juneau, AK Actual 7,923 8,394 8,119 Historical average 8,337 8,335 8,351 % of average 95 % 101 % 97 % (1) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual heating degree days below historical average indicate warmer than average temperatures). 25 AVISTA CORPORATION OTHER BUS INESSES The following table shows our assets related to our other businesses, including intercompany amounts as of December 31 (dollars in thousands): Entity and Asset Type 2022 2021 Avista Capital Unconsolidated equity investments $ 147,809 $ 91,057 Note receivable – parent — 1,404 Real estate investments 7,852 7,895 Notes receivable – third parties 17,954 17,474 Other assets 2,865 4,294 Alaska companies (AERC and AJT Mining) 10,547 10,034 Total $ 187,027 $ 132,158 Avista Capital • Unconsolidated equity investments are primarily investments in emerging technology and biotechnology companies and venture capital funds, as well as investment in a joint venture focused on local real estate development and economic growth. • Real estate consists of commercial, retail office space and land. • Other assets consist primarily of income tax receivables, and cash Alaska companies • Includes AERC and AJT Mining, which is a wholly-owned subsidiary of AERC and is an inactive mining company holding certain real estate. 26 AVISTA CORPORATION
Biggest changeAEL&P ELE CTRIC OPERATING STATISTICS Years Ended December 31, 2023 2022 2021 ELECTRIC OPERATIONS OPERATING REVENUES (Dollars in Thousands): Residential $ 20,232 $ 19,667 $ 18,940 Commercial and government 27,026 25,782 25,861 Public street and highway lighting 267 254 250 Total retail 47,525 45,703 45,051 Other 614 1 315 Total electric operating revenues $ 48,139 $ 45,704 $ 45,366 ENERGY SALES (Thousands of MWhs): Residential 161 163 160 Commercial and government 249 240 243 Public street and highway lighting 1 1 1 Total electric energy sales 411 404 404 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 15,142 15,036 14,919 Commercial and government 2,327 2,305 2,282 Public street and highway lighting 248 236 230 Total electric retail customers 17,717 17,577 17,431 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (KWh) 10,633 10,841 10,773 Revenue per KWh (in cents) 12.54 12.07 11.84 Annual revenue per customer $ 1,336 $ 1,308 $ 1,270 HEATING DEGREE DAYS: (1) Juneau, AK Actual 7,550 7,923 8,394 Historical average 8,336 8,337 8,335 % of average 91 % 95 % 101 % (1) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual heating degree days below historical average indicate warmer than average temperatures). 24 AVISTA CORPORATION OTHER BUS INESSES The following table shows our assets related to our other businesses, including intercompany amounts as of December 31 (dollars in thousands): Entity and Asset Type 2023 2022 Avista Capital Equity investments $ 153,350 $ 147,809 Real estate investments 4,512 7,852 Notes receivable – third parties 20,380 17,954 Other assets 2,452 2,865 Alaska companies (AERC and AJT Mining) 10,971 10,547 Total $ 191,665 $ 187,027 Avista Capital equity investments are primarily investments in emerging technology and biotechnology companies and venture capital funds, as well as investment in a joint venture focused on local real estate development and economic growth.
Several of the co-owners of Colstrip, including us, have a coal contract that runs through December 10 AVISTA CORPORATION 31, 2025. See “Item 7. Management's Discussion and Analysis – Colstrip” for discussion regarding environmental and other issues surrounding Colstrip.
Several of the co-owners of Colstrip, including us, have a coal contract that runs through December 31, 2025. See 10 AVISTA CORPORATION “Item 7. Management's Discussion and Analysis – Colstrip” for discussion regarding environmental and other issues surrounding Colstrip.
In order to implement this process, we make continuing projections of: • electric loads at various points in time (ranging from intra-hour to multiple years) based on, among other things, estimates of customer usage and weather, historical data, contract terms, and emerging trends and climate modeling results, and • resource availability at these points in time based on, among other things, fuel choices and fuel markets, estimates of snowpack and streamflows, availability of generating units, historic and forward market information, contract terms and experience.
To implement this process, we make continuing projections of: • electric loads at various points in time (ranging from intra-hour to multiple years) based on, among other things, estimates of customer usage and weather, historical data, contract terms, and emerging trends and climate modeling results, and • resource availability at these points in time based on, among other things, fuel choices and fuel markets, estimates of snowpack and streamflows, availability of generating units, historic and forward market information, contract terms and experience.
Human Capital Our approach to people is a critical strategy and the priorities for this strategy include, among other things: • developing, retaining and attracting a diverse and skilled workforce, • providing opportunities for continuous learning, development, career growth, and movement within the Company, • supporting and rewarding our employees through competitive pay and benefits, • encouraging and supporting a community-minded Company culture, and • investing in the physical, emotional and financial health and safety of our employees.
Human Capital Our approach to people is a critical strategy and the priorities for this strategy include, among other things: • attracting, developing, and retaining a diverse, engaged and skilled workforce, • providing opportunities for continuous learning, development, career growth, and movement within the Company, • supporting and rewarding our employees through competitive pay and benefits, • encouraging and supporting a community-minded culture, and • investing in the physical, emotional and financial health and safety of our employees.
People Development, Retention and Attraction We strive to hire and retain talented people who are innovative and skilled so that we can continue to provide safe, reliable and affordable service to our customers and advance our Company at the same time. Retention of our talented people is a focal strategy addressed through employee engagement efforts and the pay equity project.
People Development, Retention and Attraction We strive to hire and retain talented people who are innovative and skilled so we can continue to provide safe, reliable and affordable service to our customers and advance the Company at the same time. Retention of our talented people is a focal strategy addressed through employee engagement efforts and the pay equity project.
Regional Transm ission Planning Beginning with FERC Order No. 888 and continuing with subsequent rulemakings and policies, the FERC has encouraged better coordination and operational consistency aimed to capture efficiencies that might otherwise be gained through the formation of a Regional Transmission Organization or an independent system operator (ISO).
Regional Transm ission Planning Beginning with FERC Order No. 888 and continuing with subsequent rulemakings and policies, the FERC has encouraged better coordination and operational consistency aimed to capture efficiencies that might otherwise be gained through the formation of a Regional Transmission Organization or an independent system operator.
The following graph shows Avista Utilities' thermal generation (in thousands of MWhs) during the year ended December 31: Wind Resources We have exclusive rights to all the capacity of Palouse Wind, a wind generation project developed, owned and managed by an unrelated third-party and located in Whitman County, Washington.
The following graph shows Avista Utilities' thermal generation (in thousands of MWhs) during the year ended December 31: Wind Resources We have exclusive rights to the capacity of Palouse Wind, a wind generation project developed, owned and managed by an unrelated third-party and located in Whitman County, Washington.
Coyote Springs 2, which is operated by Portland General Electric Company, is supplied with natural gas under a combination of term contracts and spot market purchases, including transportation agreements with bilateral renewal rights. Colstrip, which is operated by Talen Montana, is supplied with fuel from adjacent coal reserves under coal supply and transportation agreements.
Coyote Springs 2, which is operated by Portland General Electric Company, is supplied with natural gas under a combination of term contracts and spot market purchases, including transportation agreements with bilateral renewal rights. Colstrip, which is operated by Talen, is supplied with fuel from adjacent coal reserves under coal supply and transportation agreements.
Since Avista Corp. is a “holding company” (in addition to being itself an operating utility), we are also subject to the jurisdiction of the FERC under the Public Utility Holding Company Act of 2005, which imposes certain reporting and record-keeping requirements on Avista Corp. and its subsidiaries.
Since Avista Corp. is a “holding company” (in addition to being itself an operating utility), we are subject to the jurisdiction of the FERC under the Public Utility Holding Company Act of 2005, which imposes certain reporting and record-keeping requirements on Avista Corp. and its subsidiaries.
AEL&P owns four of these generation facilities (totaling 24.5 MW of capacity) and has a PPA for the entire output of the Snettisham hydroelectric project (totaling 78.2 MW of capacity). The Snettisham hydroelectric project is owned by the Alaska Industrial Development and Export Authority (AIDEA), a public corporation of the State of Alaska.
AEL&P owns four of these generation facilities (totaling 24.5 MW of capacity) and has a PPA for the output of the Snettisham hydroelectric project (totaling 78.2 MW of capacity). The Snettisham hydroelectric project is owned by the Alaska Industrial Development and Export Authority (AIDEA), a public corporation of the State of Alaska.
See “Note 5 of the Notes to Consolidated Financial Statements” for further discussion of the Snettisham finance lease obligation. AEL&P also has 107.5 MW of diesel generating capacity from four facilities to provide back-up service to firm customers when necessary.
See “Note 5 of the Notes to Consolidated Financial Statements” for further discussion of the Snettisham finance lease obligation. AEL&P has 107.5 MW of diesel generating capacity from four facilities to provide back-up service to firm customers when necessary.
AEL&P is also subject to the jurisdiction of the FERC with respect to permits and licenses necessary to operate certain of its hydroelectric facilities. One of these licenses (for the Lake Dorothy hydroelectric project) expires in 2053 while the other (for the Salmon Creek and Annex Creek hydroelectric projects) expires in 2058.
AEL&P is subject to the jurisdiction of the FERC with respect to permits and licenses necessary to operate certain of its hydroelectric facilities. One of these licenses (for the Lake Dorothy hydroelectric project) expires in 2053 while the other (for the Salmon Creek and Annex Creek hydroelectric projects) expires in 2058.
This optimization process includes entering into hedging transactions to manage risks. Transactions include both physical energy contracts and related derivative instruments, and the terms range from intra-hour up to multiple years. 8 AVISTA CORPORATION Avista Utilities' generation assets are interconnected through the regional transmission system and are operated on a coordinated basis to enhance load-serving capability and reliability.
This optimization process includes entering into hedging transactions to manage risks. Transactions include both physical energy contracts and related derivative instruments, and the terms range from intra-hour up to multiple years. Avista Utilities' generation assets are interconnected through the regional transmission system and are operated on a coordinated basis to enhance load-serving capability and reliability.
Properties - Avista Utilities - Generation Properties” for the present generating capabilities of the above hydroelectric resources. 9 AVISTA CORPORATION The following graph shows Avista Utilities' hydroelectric generation (in thousands of MWhs) during the year ended December 31: (1) “Normal” hydroelectric generation is determined by reference to the effect of upstream dam regulation on median natural water flow.
Properties - Avista Utilities - Generation Properties” for the present generating capabilities of the above hydroelectric resources. 9 AVISTA CORPORATION The following graph shows Avista Utilities' hydroelectric generation (in thousands of MWhs) during the year ended December 31: (1) Normal hydroelectric generation is determined by reference to the effect of upstream dam regulation on median natural water flow.
In general, requests for new retail rates are made on the basis of revenues, operating expenses and net investment for a test year that ended prior to the date of the request, subject to possible adjustments, which differ among the various jurisdictions, designed to reflect the expected revenues, operating expenses and net investment during the period new retail rates will be in effect.
In general, requests for new retail rates are made based on revenues, operating expenses and net investment for a test year that ended prior to the date of the request, subject to possible adjustments, which differ among the various jurisdictions, designed to reflect the expected revenues, operating expenses and net investment during the period new retail rates will be in effect.
Juneau’s economy is primarily driven by government activities, tourism, commercial fishing, and mining, as well as activities as the commercial hub of southeast Alaska. 23 AVISTA CORPORATION AEL&P owns and operates electric generation, transmission and distribution facilities located in Juneau. AEL&P operates five hydroelectric generation facilities with 102.7 MW of hydroelectric generation capacity.
Juneau’s economy is primarily driven by government activities, tourism, commercial fishing, and mining, as well as activities as the commercial hub of southeast Alaska. 22 AVISTA CORPORATION AEL&P owns and operates electric generation, transmission and distribution facilities located in Juneau. AEL&P operates five hydroelectric generation facilities with 102.7 MW of hydroelectric generation capacity.
Under normal streamflow and operating conditions, we estimate that we would be able to meet approximately one-half of our total average electric requirements (both retail and long-term wholesale) with the combination of our hydroelectric generation and long-term hydroelectric purchase contracts with certain PUDs in the state of Washington.
Under normal streamflow and operating conditions, we estimate that we would be able to meet approximately one-half of our total average electric requirements (both retail and long-term wholesale) with the combination of our hydroelectric generation and long-term hydroelectric purchase contracts (including those with certain PUDs in the state of Washington).
This includes, among other resources, hydroelectric projects, cogeneration projects and wind generation projects at rates approved by the WUTC and the IPUC. See “Avista Utilities Electric Operating Statistics – Electric Operations” below for annual quantities of purchased power, wholesale power sales and power from exchanges in 2022, 2021 and 2020.
This includes, among other resources, hydroelectric projects, cogeneration projects and wind generation projects at rates approved by the WUTC and the IPUC. See “Avista Utilities Electric Operating Statistics – Electric Operations” below for annual quantities of purchased power, wholesale power sales and power from exchanges in 2023, 2022 and 2021.
As of December 31, 2022, we have two reportable business segments as follows: • Avista Utilities – an operating division of Avista Corp., comprising the regulated utility operations in Washington, Idaho, Oregon and Montana. Avista Utilities provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho.
As of December 31, 2023, we have two reportable business segments as follows: • Avista Utilities – an operating division of Avista Corp., comprising the regulated utility operations in Washington, Idaho, Oregon and Montana. Avista Utilities provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho.
Under the terms of the PPA, we make the dispatch decisions, provide all natural gas fuel and receive all of the electric energy output. Therefore, we consider the Lancaster Plant to be a baseload resource. See “Note 6 of the Notes to Consolidated Financial Statements” for further discussion of this PPA.
Under the terms of the PPA, we make the dispatch decisions, provide all natural gas fuel and receive the electric energy output. Therefore, we consider the Lancaster Plant to be a baseload resource. See “Note 5 of the Notes to Consolidated Financial Statements” for further discussion of this PPA.
As of December 31, 2022, Avista Utilities' electric generation resource mix (including contracts for power purchases) was approximately 48 percent hydroelectric, 43 percent thermal and 9 percent other renewables. See “Item 2. Properties” for detailed information on Company-owned generating facilities.
As of December 31, 2023, Avista Utilities' electric generation resource mix (including contracts for power purchases) was approximately 48 percent hydroelectric, 43 percent thermal and 9 percent other renewables. See “Item 2. Properties” for detailed information on Company-owned generating facilities.
Our compliance with these standards has not had any substantive impact on the operation, maintenance and marketing of our transmission system or our ability to provide service to customers. See “Item 7. Management’s Discussion and Analysis – Competition” for further information.
Our compliance with these standards has not had a substantive impact on the operation, maintenance and marketing of our transmission system or our ability to provide service to customers. See “Item 7. Management’s Discussion and Analysis – Competition” for further information.
The Snettisham hydroelectric project is subject to regulation by the State of Alaska with respect to dam safety and certain aspects of its operations. In addition, AEL&P is subject to regulation with respect to air and water quality, land use and other environmental matters under both federal and state laws.
The Snettisham hydroelectric project is subject to regulation by the State of Alaska with respect to dam safety and certain aspects of its operations. AEL&P is subject to regulation with respect to air and water quality, land use and other environmental matters under both federal and state laws.
As both a balancing authority and transmission operator, the Company must operate under the oversight of a reliability coordinator per NERC reliability standards. RC West is the reliability coordinator of record for 41 balancing authorities and transmission operators in the Western Interconnection, including Avista Corp.
As both a balancing authority and transmission operator, we must operate under the oversight of a reliability coordinator per NERC reliability standards. RC West is the reliability coordinator of record for 41 balancing authorities and transmission operators in the Western Interconnection, including Avista Corp.
RC West oversees grid compliance with federal and regional grid standards, and can determine measures to prevent or mitigate system emergencies in day-ahead or real-time operations. Vulnerability to Cyberattack The energy sector, including electric and natural gas utility companies in the United States and abroad, have become the subject of cyberattacks and ransomware attacks with increased frequency.
RC West oversees grid compliance with federal and regional grid standards, and can determine measures to prevent or mitigate system emergencies in day-ahead or real-time operations. Vulnerability to Cyberattack The energy sector, including electric and natural gas utility companies, have become the subject of cyberattacks and ransomware attacks with increased frequency.
The Company’s administrative and operating networks are targeted by hackers on a regular basis. A successful attack on the Company’s administrative networks could compromise the security and privacy of data, including operating, financial and personal information.
Our administrative and operating networks are targeted by hackers on a regular basis. A successful attack on our administrative networks could compromise the security and privacy of data, including operating, financial and personal information.
These customers generally pay the same rates as other customers in the same class, without any charge for the cost of the natural gas delivered. Optimization transactions that we engage in throughout the year are included in our annual purchased gas cost adjustment filings with the various commissions and are subject to review for prudence during this process.
These customers generally pay the same rates as other customers in the same class, without charge for the cost of the natural gas delivered. 15 AVISTA CORPORATION Optimization transactions that we engage in throughout the year are included in our annual purchased gas cost adjustment filings with the various commissions and are subject to review for prudence during this process.
On the basis of these projections, we make purchases and sales of electric capacity and energy, fuel for electric generation, and related derivative contracts to match expected resources to expected electric load requirements and reduce our exposure to electricity (or fuel) market price changes.
Based on these projections, we make purchases and sales of electric capacity and energy, fuel for electric generation, and related derivative contracts to match expected resources to expected electric load requirements and reduce our exposure to electricity (or fuel) market price changes.
We work with our employees to reinforce personal responsibility regarding safety and health, and to implement measures to create and maintain a safe work environment. 7 AVISTA CORPORATION Additional Information Additional information highlighting the Company's commitments to corporate responsibility, including the Company’s commitments to our environment, our people, our customers and communities and ethical governance, is available on the Company’s website at www.avistacorp.com.
We work with our employees to reinforce personal responsibility regarding safety and health, and to implement measures to create and maintain a safe work environment. 7 AVISTA CORPORATION Additional Information Additional information highlighting our commitment to corporate responsibility, including our commitment to our environment, our people, our customers and communities and ethical governance, is available on our website at www.avistacorp.com/corporate-responsibility/our-commitment.
The following graph shows AEL&P's hydroelectric generation (in thousands of MWhs) during the time periods indicated below: (1) Normal hydroelectric generation is defined as the energy output of the plant during a year with average inflows to the reservoir. As of December 31, 2022, AEL&P served approximately 17,600 customers.
The following graph shows AEL&P's hydroelectric generation (in thousands of MWhs) during the time periods indicated below: (1) Normal hydroelectric generation is defined as the energy output of the plant during a year with average inflows to the reservoir. As of December 31, 2023, AEL&P served approximately 17,700 customers.
The following graph shows our forecast of our average annual energy requirements and our available resources for 2023 through 2026: (1) The combined maximum capacity of Boulder Park GS, Kettle Falls CT, Northeast CT and Rathdrum CT is 278 MW, with estimated available energy production as indicated for each year.
The following graph shows our forecast of our average annual energy requirements and our available resources for 2024 through 2027: (1) The combined maximum capacity of Boulder Park GS, Kettle Falls CT, Northeast CT and Rathdrum CT is 278 MW, with estimated available energy production as indicated for each year.
To achieve our clean energy goals, we expect energy storage and other technologies, which are either not currently available or are not cost-effective under the lowest reasonable cost regulatory standard, will advance such that it will allow us to meet our goals while also maintaining reliability and affordability for our customers.
To achieve our clean energy goals, we expect energy storage and other technologies, which are either not currently available or are not cost-effective under the lowest reasonable cost regulatory standard, will advance to allow us to meet our goals while maintaining reliability and affordability for our customers.
This PPA is a take-or-pay obligation, expiring in December 2038, to purchase all of the output of the project. AIDEA's bonds are payable solely out of the revenues received under the PPA. Amounts payable by AEL&P under the PPA are equal to the required debt service on the bonds plus operating and maintenance costs.
This PPA is a take-or-pay obligation, expiring in December 2038. AIDEA's bonds are payable solely out of the revenues received under the PPA. Amounts payable by AEL&P under the PPA are equal to the required debt service on the bonds plus operating and maintenance costs.
This load is highly variable and daily natural gas loads can differ significantly from the monthly forecasted load projections. We make continuing projections of our natural gas loads and assess 15 AVISTA CORPORATION available natural gas resources.
This load is highly variable and daily natural gas loads can differ significantly from the monthly forecasted load projections. We make continuing projections of our natural gas loads and assess available natural gas resources.
Building on prevention and response strategies that have been in place for many years, in 2020 we created a comprehensive 10-year Wildfire Resiliency Plan that includes improved defense strategies and operating practices for a more resilient system. This plan will be periodically updated and informed by observed experience as well as changes in observed landscape and climatic conditions.
Building on prevention and response strategies in place for many years, in 2020 we created a comprehensive 10-year Wildfire Resiliency Plan that includes improved defense strategies and operating practices for a more resilient system. This plan is periodically updated and informed by observed experience as well as changes in observed landscape and climatic conditions.
In 2021, our peak electric native load was 1,889 MW, which occurred during the summer, and in 2020, it was 1,721 MW, which occurred during the summer. Electric Resources Avista Utilities has a diverse electric resource mix of Company-owned and contracted hydroelectric, thermal and wind generation facilities, and other contracts for power purchases and exchanges.
In 2022, our peak electric native load was 1,860 MW, which occurred during the winter, and in 2021, it was 1,889 MW, which occurred during the summer. Electric Resources Avista Utilities has a diverse electric resource mix of Company-owned and contracted hydroelectric, thermal, wind and solar generation facilities, and other contracts for power purchases and exchanges.
AEL&P maintains separate rate tariffs for each of its customer classes, as well as seasonal rates. 24 AVISTA CORPORATION AEL&P’s operations are subject to regulation by the RCA with respect to rates, standard of service, facilities, accounting and certain other matters, but not with respect to the issuance of securities. Rate adjustments for AEL&P’s customers require approval by the RCA.
AEL&P maintains separate rate tariffs for each of its customer classes, as well as seasonal rates. 23 AVISTA CORPORATION AEL&P’s operations are subject to regulation by the RCA with respect to customer rates, standard of service, facilities, accounting and certain other matters, but not with respect to the issuance of securities.
Natural Gas Storage Avista Utilities owns a one-third interest in Jackson Prairie, an underground aquifer natural gas storage field located near Chehalis, Washington. Jackson Prairie has a total peak day deliverability of 12 million therms, with a total working natural gas capacity of 256 million therms.
Natural Gas Storage Avista Utilities owns a one-third interest in Jackson Prairie, an underground aquifer natural gas storage field located near Chehalis, Washington. Jackson Prairie has a total peak day deliverability of 12 million therms, with a total working natural gas capacity of 256 million therms. Our share is one-third of the peak day deliverability and total working capacity.
The Company meets its FERC requirements to coordinate transmission planning activities with other regional entities through NorthernGrid. Launched January 1, 2020, NorthernGrid is an association of all major transmission providers throughout the Pacific Northwest and Intermountain West, with facilities in California, Idaho, Montana, Oregon, Utah, Washington and Wyoming.
We meet our FERC requirements to coordinate transmission planning activities with other regional entities through NorthernGrid. Launched January 1, 2020, NorthernGrid is an association of all major transmission providers throughout the Pacific Northwest and Intermountain West, with facilities in California, Idaho, Montana, Oregon, Utah, Washington and Wyoming.
AIDEA issued revenue bonds in 1998 (which were refinanced in 2015) to finance its acquisition of the project. These bonds were outstanding in the amount of $45.7 million at December 31, 2022 and mature in January 2034. AEL&P has a PPA and operating and maintenance agreement with the AIDEA to operate and maintain the facility.
AIDEA issued revenue bonds in 1998 (which were refinanced in 2015) to finance its acquisition of the project. These bonds were outstanding in the amount of $42.5 million at December 31, 2023 and mature in January 2034. AEL&P has a PPA and operating and maintenance agreement with the AIDEA to operate and maintain the facility.
The Western EIM, among other things, facilitates regional load balancing by allowing certain generating plants to receive automated dispatch signals from the CAISO in five-minute intervals. Reliability Standards Among its other provisions, the U.S.
We commenced Western EIM operations in March 2022. The Western EIM, among other things, facilitates regional load balancing by allowing certain generating plants to receive automated dispatch signals from the CAISO in five-minute intervals. Reliability Standards Among its other provisions, the U.S.
This PPA is a finance lease and, as of December 31, 2022, the finance lease obligation was $45.7 million. Snettisham Electric Company, a non-operating subsidiary of AERC, has the option to purchase the Snettisham project at any time for a price equal to the principal amount of the bonds outstanding at that time.
This PPA is a finance lease and, as of December 31, 2023, the finance lease obligation was $42.5 million. Snettisham Electric Company, a non-operating subsidiary of AERC, has the option to purchase the Snettisham project at any time for a price equal to the principal amount of the bonds outstanding at that time.
See “Electric Operations” above for additional information with respect to the use of wholesale purchases and sales as part of our resource optimization process and also see “Future Resource Needs” below for the magnitude of these power purchase and sales contracts in future periods.
See “Electric Operations” above for additional information on the use of wholesale purchases and sales as part of our resource optimization process and see “Future Resource Needs” below for the magnitude of these power purchase and sales contracts in future periods.
Solar Resources We have exclusive rights to all the capacity of the Lind Solar Farm, a solar generation project developed, owned and managed by an unrelated third-party and located in Lind, Washington. The PPA expires in 2038 and requires us to acquire all the power and renewable attributes produced by the project at a fixed price per MWh.
Solar Resources We have exclusive rights to the capacity of the Lind Solar Farm, a solar generation project developed, owned and managed by an unrelated third-party and located in Lind, Washington. Under a PPA, which expires in 2038, we purchase the power and renewable attributes produced by the project at a fixed price per MWh.
Material on the Company’s website is not part of this report. AVISTA U TILITIES Gene ral At the end of 2022, Avista Utilities supplied retail electric service to approximately 411,000 customers and retail natural gas service to approximately 377,000 customers across its service territory. Avista Utilities' service territory covers 30,000 square miles with a population of 1.7 million.
Material on our website is not part of this report. AVISTA U TILITIES Gene ral At the end of 2023, Avista Utilities supplied retail electric service to approximately 416,000 customers and retail natural gas service to approximately 381,000 customers across its service territory. Avista Utilities' service territory covers 30,000 square miles with a population of 1.7 million.
Other Purchases, Exchanges and Sales In addition to the resources described above, we purchase and sell power under various long-term contracts, and we also enter into short-term purchases and sales. Further, pursuant to The Public Utility Regulatory Policies Act of 1978, as amended, we are required to purchase generation from qualifying facilities.
The project has a nameplate capacity of 28 MW. Other Purchases, Exchanges and Sales In addition to the resources described above, we purchase and sell power under various long-term contracts, and we enter into short-term purchases and sales. Further, pursuant to The Public Utility Regulatory Policies Act of 1978, as amended, we are required to purchase generation from qualifying facilities.
Our equity, inclusion, and diversity (EID) initiatives are focused on equity in our systems, employee recruitment, employee training and development, and employee engagement, including participation in employee resource groups. Employee resource groups are voluntary, employee-led groups that foster a diverse and inclusive workplace aligned with our organizational mission, values and goals and business practices.
Our equity, inclusion, and diversity (EID) initiatives are focused on equity in our systems and processes, employee recruitment, employee training and development, and employee 6 AVISTA CORPORATION engagement, including participation in employee resource groups. Employee resource groups are voluntary, employee-led groups fostering a diverse and inclusive workplace aligned with our organizational mission, values and goals and business practices.
Natural water flow is the flow of the rivers without the influence of dams, whereas regulated water flow takes into account any water flow changes from upstream dams due to releasing or holding back water. The calculation of “normal” varies annually due to the timing of upstream dam regulation throughout the year, as well as changes in PUD contracts.
Natural water flow is the flow of the rivers without the influence of dams, whereas regulated water flow reflects water flow changes from upstream dams due to releasing or holding back water. The calculation of normal varies annually due to the timing of upstream dam regulation throughout the year, as well as changes in PUD contracts.
Access to this diverse portfolio of natural gas resources allows us to make natural gas procurement decisions that benefit our natural gas customers. 16 AVISTA CORPORATION These interstate pipeline transportation rights provide the capacity to serve approximately 25 percent of peak natural gas customer demands from domestic sources and 75 percent from Canadian sourced supply.
Access to this diverse portfolio of natural gas resources allows for natural gas procurement decisions that benefit our natural gas customers. These interstate pipeline transportation rights provide the capacity to serve approximately 25 percent of peak natural gas customer demands from domestic sources and 75 percent from Canadian sources.
We sponsored four employee resource groups in 2022: Women of Avista, Veterans of Avista, Diversity Awareness, and Connections. Additional employee-focused EID efforts include active engagement in employment system and practice reviews to uncover and correct systemic inequities and/or barriers for a more fulsome approach to EID.
We continued to sponsor employee resource groups in 2023 which include: Women of Avista, Veterans of Avista, Diversity Awareness, Connections, and History of Avista. Additional employee-focused EID efforts include active engagement in employment system and practice reviews to uncover and correct systemic inequities and/or barriers for a more fulsome approach to EID.
Through its participation in NorthernGrid, the Company is able to meet the regional transmission planning requirements of FERC Order Nos. 890 and 1000, and their follow-on orders. NorthernGrid and its members also work with 19 AVISTA CORPORATION other western organizations, including WestConnect and the California Independent System Operator (CAISO), to address broader interregional planning.
Through our participation in NorthernGrid, we meet the regional transmission planning requirements of FERC Order Nos. 890 and 1000, and follow-on orders. NorthernGrid and its members also work with other western organizations, including WestConnect and the California Independent System Operator (CAISO), to address broader interregional planning.
Wholesale sales are delivered through wholesale market facilities outside of our natural gas distribution system. Natural gas resource optimization activities include, but are not limited to: • wholesale market sales of surplus natural gas supplies, • purchases and sales of natural gas to optimize use of pipeline and storage capacity, and • participation in the transportation capacity release market.
Natural gas resource optimization activities include, but are not limited to: • wholesale market sales of surplus natural gas supplies, • purchases and sales of natural gas to optimize use of pipeline and storage capacity, and • participation in the transportation capacity release market.
Failure to comply with NERC reliability standards could result in substantial financial penalties. We have a robust internal compliance program in place to manage compliance activities and mitigate the risk of potential noncompliance with these standards. We do not expect the costs associated with compliance with these standards to have a material impact on our financial results.
We have a robust internal compliance program in place to manage compliance activities and mitigate the risk of potential noncompliance with these standards. We do not expect the costs associated with compliance with these standards to have a material impact on our financial results.
Total Avista Corp. shareholders’ equity was $2.3 billion as of December 31, 2022, which includes a $149.9 million investment in Avista Capital and a $110.9 million investment in AERC. See “Note 24 of the Notes to Consolidated Financial Statements” for information with respect to the operating performance of each business segment (and other subsidiaries).
Total Avista Corp. shareholders’ equity was $2.5 billion as of December 31, 2023, which includes a $145.6 million investment in Avista Capital and a $119.6 million investment in AERC. See “Note 24 of the Notes to Consolidated Financial Statements” for information with respect to the operating performance of each business segment (and other subsidiaries).
Neither the costs nor requirements of participating in NorthernGrid’s coordinated transmission planning activities are expected to materially impact the Company’s operations or financial performance. Regional Ene rgy Markets The CAISO operates the Western Energy Imbalance Market (EIM) in the western United States.
Neither the costs nor requirements of participating in NorthernGrid’s coordinated transmission planning activities are expected to materially impact our operations or financial performance. Regional Ene rgy Markets The CAISO operates the Western Energy Imbalance Market (EIM) in the western United States. All investor-owned utilities in the Pacific Northwest are participants in the Western EIM.
Properties - Avista Utilities - Generation Properties” for the present generating capabilities of the above thermal resources. The Lancaster Plant is a 270 MW natural gas-fired combined cycle combustion turbine plant located in northern Idaho, owned by an unrelated third-party. All of the output from the Lancaster Plant is contracted to us through October 31, 2026 under a PPA.
Properties - Avista Utilities - Generation Properties” for the present generating capabilities of the above thermal resources. The Lancaster Plant is a 270 MW natural gas-fired combined cycle combustion turbine plant located in northern Idaho, owned by an unrelated third-party. We have a PPA for the output from the Lancaster Plant through December 31, 2041.
On December 31, 2022, Avista Utilities employed 1,767 with an employee profile of: Women Under-Represented Groups (a) Bargaining Unit 3% 6% Non-bargaining Unit 44% 10% Executives (b) 14% 7% Overall 30% 9% (a) As defined by our Affirmative Action Plan and through employee self-identification. (b) Executive is defined as vice president or higher.
On December 31, 2023, Avista Utilities employed 1,858 individuals with an employee profile of: Women Under-Represented Groups (a) Bargaining Unit 3% 6% Non-bargaining Unit 45% 11% Executives (b) 17% 17% Overall 30% 9% (a) As defined by our Affirmative Action Plan and through employee self-identification. (b) Executive is defined as vice president or higher.
After December 31, 2025, we are prohibited by Clean Energy Transformation Act (CETA) from using energy produced by coal-fired plants to serve our retail customers in Washington. In order to comply, we entered into an agreement with NorthWestern to transfer our interest in Colstrip at the end of 2025.
After December 31, 2025, we are prohibited by Clean Energy Transformation Act (CETA) from using energy produced by coal-fired plants to serve our retail customers in Washington. We entered into an agreement with NorthWestern to transfer our interest in Colstrip at the end of 2025. To the extent necessary, we will obtain energy produced by other resources. See “Item 7.
The IRP details projected growth in demand for energy and the new resources needed to serve customers over the next 20 years. We regard the IRP as a tool for resource evaluation, rather than an acquisition plan for a particular project. The IPUC and OPUC have formally acknowledged our IRP; the WUTC is still processing the IRP.
The IRP details projected growth in demand for energy and the new resources needed to serve customers over the next 20 years. We regard the IRP as a tool for resource evaluation, rather than an acquisition plan for a particular project.
Approval of the issuance of securities is not required from the MPSC. We are also subject to the jurisdiction of the FERC for licensing of hydroelectric generation resources, and for electric transmission services and wholesale sales.
The retail electric and natural gas operations are subject to the jurisdiction of the WUTC, IPUC, OPUC and MPSC. Approval of the issuance of securities is not required from the MPSC. We are subject to the jurisdiction of the FERC for licensing of hydroelectric generation resources, and for electric transmission services and wholesale sales.
We develop training that is relevant, necessary and in demand for our organization. Training is delivered through instructor-led courses, self-service topics, computer-based learning modules, and field-based, hands-on workshop models that cover the range of our operations. Training programs include craft apprenticeship programs, engineering development programs, leadership development, communication skills, cross-functional learning and EID topics.
Training is delivered through instructor-led courses, self-service topics, computer-based learning modules, and field-based, hands-on workshop models covering the range of our operations. Training programs include craft apprenticeship programs, engineering development programs, leadership development, communication skills, cross-functional learning and EID topics.
We acquire both long-term and short-term transmission capacity to facilitate all of our energy and capacity transactions. We provide transmission and ancillary services in eastern Washington, northern Idaho and western Montana. Electric Re quirements Avista Utilities' peak electric native load requirement for 2022 was 1,860 MW, which occurred on December 22, 2022.
We acquire both long-term and short-term transmission 8 AVISTA CORPORATION capacity to facilitate our energy and capacity transactions. We provide transmission and ancillary services in eastern Washington, northern Idaho and western Montana. Electric Re quirements Avista Utilities' peak electric native load requirement for 2023 was 1,809 MW, which occurred on August 15, 2023.
The PPA expires in 2042 and requires us to acquire all of the power and renewable attributes produced by the project at a fixed price per MWh with a fixed escalation of the price over the term of the agreement. The project has a nameplate capacity of 105 MW.
Under the PPA, which expires in 2042, we purchase the power and renewable attributes produced by the project at a fixed price per MWh with a fixed escalation of the price over the term of the agreement. The project has a nameplate capacity of 105 MW.
Development opportunities are created to increase skill strength and prepare our employees at all levels to ensure they have the skills, knowledge and experience to perform today and well into the future. Keeping our workforce equipped to succeed is imperative in order to meet the emerging challenges that lay ahead.
Our development opportunities are created to prepare our employees at all levels to ensure they have the skills, knowledge and experience to perform today and well into the future. Keeping our workforce equipped to succeed is imperative to meet the emerging challenges that lay ahead. We develop training that is relevant, necessary and in demand for our organization.
In 2021, Washington enacted a multi-year rate plan and performance-based rate making regulations, and our 2022 general rate cases were our first filed under these new regulations. See “Item 7. Management’s Discussion and Analysis – Regulatory Matters – General Rate Cases” for further information.
In 2021, Washington enacted a multi-year rate plan and performance-based rate making regulations. See “Item 7. Management’s Discussion and Analysis – Regulatory Matters – General Rate Cases” for further information.
Avista Utilities also provides natural gas distribution service in parts of northeastern and southwestern Oregon. Avista Utilities has electric generating facilities in Washington, Idaho, Oregon and Montana. Avista Utilities also supplies electricity to a small number of customers in Montana, most of whom are employees who operate Avista Utilities' Noxon Rapids generating facility.
Avista Utilities also provides natural gas distribution service in parts of northeastern and southwestern Oregon. Avista Utilities has electric generating facilities in Washington, Idaho, Oregon and Montana. Avista Utilities also supplies electricity to a small number of customers in Montana.
Our estimate of normal annual hydroelectric generation for 2023 (including resources purchased under long-term hydroelectric contracts with certain PUDs) is 573.5 aMW (or 5.0 million MWhs). See “Item 2.
Our estimate of normal annual hydroelectric generation for 2024 (including resources purchased under long-term hydroelectric contracts with certain PUDs) is 563.1 aMW (or 4.95 million MWhs). See “Item 2.
We expect to spend approximately $330 million implementing the plan components over the life of the 10-year plan that began in 2020. The IPUC and WUTC approved deferral of certain costs of the wildfire resiliency plan, and we will seek recovery of those deferred costs in future rate filings.
We expect to spend $437 million ($124 million of which was spent through 2023) implementing the plan components over the life of the 10-year plan that began in 2020. The IPUC and WUTC approved deferral of certain costs of the wildfire resiliency plan, and we will continue to seek recovery of costs in future rate filings.
On the basis of these projections, we plan and execute a series of transactions to hedge a portion of our customers' projected natural gas requirements through forward market transactions and derivative instruments. These transactions may extend for multiple years into the future.
Based on these projections, we plan and execute a series of transactions to hedge a portion of our customers' projected natural gas requirements through forward market transactions and derivative instruments. These transactions may extend for multiple years into the future. We also leave a portion of our natural gas supply requirements unhedged for purchase in the short-term spot markets.
Examples of carbon emissions reduction strategies include the following: • Diversify or transition from fossil fuel-based natural gas to renewable natural gas, • Reduce natural gas consumption via conservation, energy efficiency and new technologies, and • Purchase carbon offsets as necessary. Achieving the carbon emission reductions for the natural gas system will involve various pathways.
Examples of carbon emissions reduction strategies include the following: • Diversify or transition from fossil fuel-based natural gas to renewable natural gas, • Reduce natural gas consumption via conservation, energy efficiency and new technologies, and • Purchase carbon offsets as necessary. See “Item 7.
The FERC requires electric utilities to transmit power and energy to or for wholesale purchasers and sellers, and requires electric utilities to enhance or construct transmission facilities to create additional transmission capacity for the purpose of providing these services.
Federal Laws Related to Wholesale Competition Federal law promotes practices that foster competition in the electric wholesale energy market. The FERC requires electric utilities to transmit power and energy to or for wholesale purchasers and sellers, and requires electric utilities to enhance or construct transmission facilities to create additional transmission capacity for the purpose of providing these services.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Enterprise Risk Management – Cyber and Technology Risks” for further information. 20 AVISTA CORPORATION AVISTA U TILITIES ELECTRIC OPERATING STATISTICS Years Ended December 31, 2022 2021 2020 ELECTRIC OPERATIONS OPERATING REVENUES (Dollars in Thousands): Residential $ 414,823 $ 394,717 $ 377,785 Commercial 338,656 326,173 303,972 Industrial 107,740 106,756 103,103 Public street and highway lighting 7,483 7,472 7,303 Total retail 868,702 835,118 792,163 Wholesale 179,316 89,768 77,277 Sales of fuel 84,256 63,673 28,773 Other 46,319 36,288 30,149 Alternative revenue programs (31,844 ) (19,525 ) (4,361 ) Deferrals and amortizations for rate refunds to customers 74 1,730 3,539 Total electric operating revenues $ 1,146,823 $ 1,007,052 $ 927,540 ENERGY SALES (Thousands of MWhs): Residential 4,154 3,955 3,807 Commercial 3,201 3,158 2,995 Industrial 1,699 1,666 1,615 Public street and highway lighting 17 17 18 Total retail 9,071 8,796 8,435 Wholesale 3,094 2,461 2,680 Total electric energy sales 12,165 11,257 11,115 ENERGY RESOURCES (Thousands of MWhs): Hydro generation (from Company facilities) 3,930 3,598 3,651 Thermal generation (from Company facilities) 4,055 3,635 3,474 Purchased power 5,065 4,954 4,922 Power exchanges (385 ) (398 ) (446 ) Total power resources 12,665 11,789 11,601 Energy losses and Company use (500 ) (532 ) (486 ) Total energy resources (net of losses) 12,165 11,257 11,115 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 361,564 356,387 350,669 Commercial 44,550 44,110 43,497 Industrial 1,193 1,205 1,277 Public street and highway lighting 681 666 639 Total electric retail customers 407,988 402,368 396,082 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (KWh) 11,487 11,098 10,857 Revenue per KWh (in cents) 9.99 9.98 9.92 Annual revenue per customer $ 1,147.17 $ 1,107.55 $ 1,077.33 AVERAGE HOURLY LOAD (aMW) 1,142 1,113 1,064 21 AVISTA CORPORATION AVISTA UTILITIES ELECTRIC OPERATING STATISTICS Years Ended December 31, 2022 2021 2020 RETAIL NATIVE LOAD at time of system peak (MW): Winter 1,860 1,696 1,613 Summer 1,810 1,889 1,721 COOLING DEGREE DAYS: (1) Spokane, WA Actual 758 946 546 Historical average 568 546 537 % of average 133 % 173 % 102 % HEATING DEGREE DAYS: (2) Spokane, WA Actual 6,811 6,124 6,187 Historical average 6,560 6,596 6,651 % of average 104 % 93 % 93 % (1) Cooling degree days are the measure of the warmness of weather experienced, based on the extent to which the average of high and low temperatures for a day exceeds 65 degrees Fahrenheit (annual degree days above historical average indicate warmer than average temperatures).
Cybersecurity” for further information. 19 AVISTA CORPORATION AVISTA U TILITIES ELECTRIC OPERATING STATISTICS Years Ended December 31, 2023 2022 2021 ELECTRIC OPERATIONS OPERATING REVENUES (Dollars in Thousands): Residential $ 425,258 $ 414,823 $ 394,717 Commercial 343,523 338,656 326,173 Industrial 109,689 107,740 106,756 Public street and highway lighting 7,976 7,483 7,472 Total retail 886,446 868,702 835,118 Wholesale 249,847 179,316 89,768 Sales of fuel (25,926 ) 84,256 63,673 Other 49,235 46,319 36,288 Alternative revenue programs 12,419 (31,844 ) (19,525 ) Deferrals and amortizations for rate refunds to customers 149 74 1,730 Total electric operating revenues $ 1,172,170 $ 1,146,823 $ 1,007,052 ENERGY SALES (Thousands of MWhs): Residential 4,020 4,154 3,955 Commercial 3,160 3,201 3,158 Industrial 1,671 1,699 1,666 Public street and highway lighting 17 17 17 Total retail 8,868 9,071 8,796 Wholesale 3,468 3,094 2,461 Total electric energy sales 12,336 12,165 11,257 ENERGY RESOURCES (Thousands of MWhs): Hydro generation (from Company facilities) 3,024 3,930 3,598 Thermal generation (from Company facilities) 5,084 4,055 3,635 Purchased power 5,121 5,065 4,954 Power exchanges (421 ) (385 ) (398 ) Total power resources 12,808 12,665 11,789 Energy losses and Company use (472 ) (500 ) (532 ) Total energy resources (net of losses) 12,336 12,165 11,257 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 366,450 361,564 356,387 Commercial 45,341 44,550 44,110 Industrial 1,188 1,193 1,205 Public street and highway lighting 690 681 666 Total electric retail customers 413,669 407,988 402,368 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (KWh) 10,971 11,487 11,098 Revenue per KWh (in cents) 10.58 9.99 9.98 Annual revenue per customer $ 1,160 $ 1,147 $ 1,108 AVERAGE HOURLY LOAD (aMW) 1,115 1,142 1,113 20 AVISTA CORPORATION AVISTA UTILITIES ELECTRIC OPERATING STATISTICS Years Ended December 31, 2023 2022 2021 RETAIL NATIVE LOAD at time of system peak (MW): Winter 1,771 1,860 1,696 Summer 1,809 1,810 1,889 COOLING DEGREE DAYS: (1) Spokane, WA Actual 811 758 946 Historical average 585 568 546 % of average 139 % 133 % 173 % HEATING DEGREE DAYS: (2) Spokane, WA Actual 6,012 6,811 6,124 Historical average 6,557 6,560 6,596 % of average 92 % 104 % 93 % (1) Cooling degree days are the measure of the warmness of weather experienced, based on the extent to which the average of high and low temperatures for a day exceeds 65 degrees Fahrenheit (annual degree days above historical average indicate warmer than average temperatures).
We are connected to multiple supply basins in the western United States and Canada through firm capacity transportation rights on six different pipeline networks.
Natural Gas Supply We purchase natural gas, for both fuel for generation and delivery to natural gas customers, in wholesale markets and are connected to multiple supply basins in the western United States and Canada through firm capacity transportation rights on six different pipeline networks.
(2) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual degree days below historical averages indicate warmer than average temperatures). 22 AVISTA CORPORATION AVISTA UTILITIES NATURAL GAS OPERATING STATISTICS Years Ended December 31, 2022 2021 2020 NATURAL GAS OPERATIONS OPERATING REVENUES (Dollars in Thousands): Residential $ 284,452 $ 221,405 $ 213,612 Commercial 139,923 100,819 94,937 Interruptible 6,474 4,781 4,285 Industrial 3,997 3,015 2,843 Total retail 434,846 330,020 315,677 Wholesale 133,235 113,277 104,910 Transportation 8,627 8,547 7,917 Other 8,156 7,325 5,034 Alternative revenue programs (1,513 ) 12,890 547 Deferrals and amortizations for rate refunds to customers 134 1,254 1,797 Total natural gas operating revenues $ 583,485 $ 473,313 $ 435,882 THERMS DELIVERED (Thousands of Therms): Residential 242,452 219,835 219,988 Commercial 147,059 130,399 127,659 Interruptible 14,166 16,013 14,854 Industrial 5,606 5,402 5,424 Total retail 409,283 371,649 367,925 Wholesale 280,154 356,891 542,372 Transportation 171,785 172,260 180,361 Interdepartmental and Company use 618 479 369 Total therms delivered 861,840 901,279 1,091,027 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 337,073 332,187 327,125 Commercial 36,753 36,448 36,164 Interruptible 44 42 40 Industrial 188 190 225 Total natural gas retail customers 374,058 368,867 363,554 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (therms) 719 662 672 Revenue per therm (in dollars) $ 1.17 $ 1.01 $ 0.97 Annual revenue per customer $ 843.88 $ 666.51 $ 653.00 HEATING DEGREE DAYS: (1) Spokane, WA Actual 6,811 6,124 6,187 Historical average 6,560 6,596 6,651 % of average 104 % 93 % 93 % Medford, OR Actual 4,408 4,107 4,181 Historical average 4,248 4,254 4,281 % of average 104 % 97 % 98 % (1) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual degree days below historic indicate warmer than average temperatures).
(2) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual degree days below historical averages indicate warmer than average temperatures). 21 AVISTA CORPORATION AVISTA UTILITIES NATURAL GAS OPERATING STATISTICS Years Ended December 31, 2023 2022 2021 NATURAL GAS OPERATIONS OPERATING REVENUES (Dollars in Thousands): Residential $ 325,631 $ 284,452 $ 221,405 Commercial 164,048 139,923 100,819 Interruptible 12,747 6,474 4,781 Industrial 4,568 3,997 3,015 Total retail 506,994 434,846 330,020 Wholesale 55,295 133,235 113,277 Transportation 8,172 8,627 8,547 Other 6,773 8,156 7,325 Alternative revenue programs (7,520 ) (1,513 ) 12,890 Deferrals and amortizations for rate refunds to customers 876 134 1,254 Total natural gas operating revenues $ 570,590 $ 583,485 $ 473,313 THERMS DELIVERED (Thousands of Therms): Residential 225,665 242,452 219,835 Commercial 138,719 147,059 130,399 Interruptible 20,158 14,166 16,013 Industrial 4,914 5,606 5,402 Total retail 389,456 409,283 371,649 Wholesale 262,188 280,154 356,891 Transportation 165,066 171,785 172,260 Interdepartmental and Company use 413 618 479 Total therms delivered 817,123 861,840 901,279 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 340,655 337,073 332,187 Commercial 37,193 36,753 36,448 Interruptible 50 44 42 Industrial 187 188 190 Total natural gas retail customers 378,085 374,058 368,867 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (therms) 662 719 662 Revenue per therm (in dollars) $ 1.44 $ 1.17 $ 1.01 Annual revenue per customer $ 956 $ 844 $ 667 HEATING DEGREE DAYS: (1) Spokane, WA Actual 6,012 6,811 6,124 Historical average 6,557 6,560 6,596 % of average 92 % 104 % 93 % Medford, OR Actual 4,295 4,408 4,107 Historical average 4,248 4,248 4,254 % of average 101 % 104 % 97 % (1) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual degree days below historic indicate warmer than average temperatures).
A successful attack on the Company’s operating networks could impair the operation of the Company’s electric and/or natural gas utility facilities, possibly resulting in the inability to provide electric and/or natural gas service for extended periods of time. The Company continually reinforces and updates its defensive systems and is in compliance with the NERC’s reliability standards.
A successful attack on our operating networks could impair the operation of our electric and/or natural gas utility facilities, possibly resulting in the inability to provide electric and/or natural gas service for extended periods of time. We continually reinforce and update our defensive systems and comply with the NERC’s reliability standards. See “Reliability Standards,” “Item 1A.
The following is an overview of some of our key human capital initiatives intended to foster the overall well-being of our employees and other stakeholders, such as our customers and business partners. Equity, Inclusion and Diversity We strive to create a workplace culture that values trust and respect.
The following is an overview of some of our key human capital initiatives intended to foster the overall well-being of our employees and other stakeholders, such as our customers and business partners.
We plan for sufficient natural gas delivery capacity to serve our retail customers for a theoretical peak day event. We generally have more pipeline and storage capacity than what is needed during periods other than a peak day. We optimize our natural gas resources by using market opportunities to generate economic value that helps mitigate fixed costs.
We generally have more pipeline and storage capacity than what is needed during periods other than a peak day. We optimize our natural gas resources by using market opportunities to generate economic value that helps mitigate fixed costs. Wholesale sales are delivered through wholesale market facilities outside of our natural gas distribution system.
The PPA is a 20-year agreement that began in December 2020 and requires us to acquire all of the power and renewable attributes produced by the project at a fixed price per MWh with a fixed escalation of the price over the term of the agreement.
The facility has a nameplate capacity of 144 MW. The 20-year PPA began in December 2020 and we purchase the power and renewable attributes produced by the project at a fixed price per MWh with a fixed escalation of the price over the term of the agreement.
Once approval is received, the plan is implemented and monitored by our gas supply and risk management groups. The plan’s progress is also presented to the WUTC and IPUC staff in semi-annual meetings, and updates are given to the OPUC staff quarterly. The RMC is provided with an update on plan results and changes in their monthly meetings.
The plan’s progress is presented to the WUTC and IPUC staff in semi-annual meetings, and updates are given to the OPUC staff quarterly. The RMC is provided with an update on plan results and changes in their monthly meetings. These activities provide transparency for the natural gas supply procurement plan.
Five of our six hydroelectric projects on the Spokane River (Long Lake, Nine Mile, Upper Falls, Monroe Street and Post Falls) are under one 50-year FERC license expiring in 2059 and are referred to collectively as the Spokane River Project. The license includes numerous natural and cultural resource protection measures that are subject to ongoing regulatory interpretation.
This license embodies a settlement agreement relating to project operations and resource protection and mitigation efforts over the license term. Five of our six hydroelectric projects on the Spokane River (Long Lake, Nine Mile, Upper Falls, Monroe Street and Post Falls) are under one 50-year FERC license expiring in 2059 and are referred to collectively as the Spokane River Project.

… 79 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

42 edited+9 added−5 removed64 unchanged
Biggest changeOur generation, transmission and distribution assets and the systems that monitor and operate these assets are critical infrastructure for providing service to our customers. Security threats are continuing to evolve, and our industry has been subject to, and will likely continue to be subject to, attempts to disrupt operations.
Biggest changePhysical attacks on our assets could have a negative impact on our business and our results of operations. 27 AVISTA CORPORATION Our generation, transmission and distribution assets and the systems that monitor and operate these assets are critical infrastructure for providing service to our customers.
Any default on the lines of credit or other financing arrangements of Avista Corp. or any of our “significant subsidiaries,” if any, could result in cross-defaults to other agreements of such entity, and/or to the line of credit or other financing arrangements of any other of such entities. Any defaults could also induce vendors and other counterparties to demand collateral.
Any default on the lines of credit or other financing arrangements of Avista Corp. or our “significant subsidiaries,” if any, could result in cross-defaults to other agreements of such entity, and/or to the line of credit or other financing arrangements of any other of such entities. Defaults could also induce vendors and other counterparties to demand collateral.
Our operations are subject to operational and event risks that include: • severe weather or natural disasters, including, but not limited to, avalanches, wind storms, wildfires, earthquakes, snow and ice storms, and heat waves due to normal weather variations as well as the impacts of climate change which could disrupt energy generation, transmission and distribution, as well as the availability and costs of materials, equipment, supplies, support services and general business operations, • blackouts or disruptions of interconnected transmission systems (the regional power grid), • unplanned outages at generating plants, • changes in the availability and cost of purchased power, fuel and natural gas, including delivery constraints, • explosions, fires, accidents, or mechanical breakdowns that could occur while operating and maintaining our generation, transmission and distribution systems, • property damage or injuries to third parties caused by our generation, transmission and distribution systems, • natural disasters that can disrupt energy generation, transmission and distribution, and general business operations, • terrorist attacks or other malicious acts that may disrupt or cause damage to our utility assets or the vendors we utilize, and • Increased costs or delay of capital projects associated with the ability of suppliers, vendors or contractors to perform, • general workforce problems, including decreased employee engagement, which may impact strategy execution and negatively affect retention, ability to attract workers, and result in challenges in collective bargaining, possible work stoppages, and strikes.
Our operations are subject to operational and event risks that include: • severe weather or natural disasters, including, but not limited to, avalanches, wind storms, wildfires, earthquakes, snow and ice storms, and heat waves due to normal weather variations as well as the impacts of climate change which could disrupt energy generation, transmission and distribution, as well as the availability and costs of materials, equipment, supplies, support services and general business operations, • blackouts or disruptions of interconnected transmission systems (the regional power grid), • unplanned outages at generating plants, • changes in the availability and cost of purchased power, fuel and natural gas, including delivery constraints, which can disrupt service to customers, • explosions, fires, accidents, or mechanical breakdowns that could occur while operating and maintaining our generation, transmission and distribution systems, • property damage or injuries to third parties caused by our generation, transmission and distribution systems, • natural disasters that can disrupt energy generation, transmission and distribution, and general business operations, • terrorist attacks or other malicious acts that may disrupt or cause damage to our utility assets or the vendors we utilize, and • increased costs or delay of capital projects associated with the ability of suppliers, vendors or contractors to perform, • general workforce problems, including decreased employee engagement, which may impact strategy execution and negatively affect retention, ability to attract workers, and result in challenges in collective bargaining, possible work stoppages, and strikes.
The hedges we enter into are reviewed for prudence by our various regulators and any deferred costs (including those as a result of our hedging transactions) are subject to review for prudence and potential disallowance by regulators. Generation plants may become obsolete.
The hedges we enter into are reviewed for prudence by our various regulators and deferred costs (including those as a result of our hedging transactions) are subject to review for prudence and potential disallowance by regulators. Generation plants may become obsolete.
The price of natural gas as fuel for natural gas-fired electric generation also tends to increase during periods of high demand which are often related to temperature extremes. We may need to purchase natural gas fuel in these periods of high prices to meet electric demands.
The price of natural gas as fuel for natural gas-fired electric generation tends to increase during periods of high demand which are often related to temperature extremes. We may need to purchase natural gas fuel in these periods of high prices to meet electric demands.
Also, wildfires could lead to extended operational outages of our equipment while we wait for the wildfire to be extinguished before restoring power, and the cost to implement rapid response or any repair to such facilities could be significant.
Also, wildfires could lead to extended operational outages of our equipment while we wait for the wildfire to be extinguished before restoring power, and the cost to implement rapid response or repair to such facilities could be significant.
Any such legislation could direct and/or restrict the operation and raise the costs of our power generation resources and energy delivery infrastructure as well as the distribution of natural gas to our customers.
Such legislation could direct and/or restrict the operation and raise the costs of our power generation resources and energy delivery infrastructure as well as the distribution of natural gas to our customers.
If we could no longer apply regulatory accounting principles, we could be: • required to write off our regulatory assets, and be • precluded from the future deferral of costs or decoupled revenues not recovered through rates at the time such amounts are incurred, even if we are expected to recover these amounts from customers in the future.
If we could no longer apply regulatory accounting principles, we could be: • required to write off our regulatory assets, and be • precluded from the future deferral of costs or decoupled revenues not recovered through rates at the time such amounts are incurred, even if we expect to recover these amounts from customers in the future.
The cost of natural gas supply is impacted by both supply-side factors (amount of natural gas production, level of natural gas in storage, volumes of natural gas imports and exports, regulatory restraints or costs on natural gas production and delivery) and demand-side factors (variations in winter and summer weather, level of economic growth, availability and prices of other fuels).
The cost of natural gas supply is impacted by both supply-side factors (amount of natural gas production, level of natural gas in storage, volumes of natural gas imports and exports, regulatory restraints or costs on natural gas production and delivery) and demand-side factors (variations in weather, level of economic growth, availability and prices of other fuels).
Please also see “Forward-Looking Statements” for additional factors which could have a significant impact on our operations, results of operations, financial condition or cash flows and could cause actual results to differ materially from those anticipated in such statements.
See “Forward-Looking Statements” for additional factors which could have a significant impact on our operations, results of operations, financial condition or cash flows and could cause actual results to differ materially from those anticipated in such statements.
Strategic Risk Factors Our strategic business plans, which may be affected by any or all of the foregoing, may change, including the entry into new businesses and/or the exit from existing businesses and/or the curtailment of our business development efforts where potential future business is uncertain.
Strategic Risk Factors Our strategic business plans, which may be affected by the foregoing, may change, including the entry into new businesses and/or the exit from existing businesses and/or the curtailment of our business development efforts where potential future business is uncertain.
When we enter into fixed price energy commodity transactions for future delivery, we are subject to credit terms that may require us to provide collateral to wholesale counterparties related to the difference between current prices and the agreed upon fixed prices. These collateral requirements can place significant demands on our cash flows or borrowing arrangements.
When we enter into fixed price energy commodity transactions for future delivery, we are subject to credit terms that may require us to provide collateral to wholesale counterparties related to the difference between current prices 33 AVISTA CORPORATION and the agreed upon fixed prices. These collateral requirements can place significant demands on our cash flows or borrowing arrangements.
Any issues that negatively affect AEL&P's ability to generate or transmit power or any decrease in the demand for the power generated by AEL&P could negatively affect our results of operations, financial condition and cash flows.
Issues that negatively affect AEL&P's ability to generate or transmit power or a decrease in the demand for the power generated by AEL&P could negatively affect our results of operations, financial condition and cash flows.
However, insurance or indemnification agreements may not be adequate to protect us against liability, extra expenses and operating disruptions from all of the operational and event risks described above. In addition, we are subject to the risk that insurers and/or other parties will dispute or be unable to perform on their obligations.
However, insurance or indemnification agreements may not be adequate to protect against liability, extra expenses and operating disruptions from the operational and event risks described above. In addition, we are subject to the risk that insurers and/or other parties will dispute or be unable to perform on their obligations.
In addition, regionally, there are a number of regulatory and legislative initiatives that have been passed which are designed to limit greenhouse gas emissions and increase the use of renewable sources of energy.
In addition, regionally, there are regulatory and legislative initiatives that have been passed which are designed to limit greenhouse gas emissions and increase the use of renewable sources of energy.
The FERC, the NERC and the WECC perform periodic audits of the Company. Failure to comply with the FERC, the NERC, or the WECC requirements can result in financial penalties. Future legislation, administrative rules or Executive Orders could have a material adverse effect on our operations, results of operations, financial condition and cash flows.
The FERC, the NERC and the WECC perform periodic audits of the Company. Failure to comply with the FERC, the NERC, or the WECC requirements can result in financial penalties. Future legislation, administrative rules or Executive Orders could have a material adverse effect on our operations, results of operations, financial condition and cash flows. 34 AVISTA CORPORATION
We could experience increased borrowing costs or limited access to capital on reasonable terms. 32 AVISTA CORPORATION We access long-term capital markets to finance capital expenditures, repay maturing long-term debt and obtain additional working capital, including needs related to power and natural gas purchases and sales, from time-to-time.
We could experience increased borrowing costs or limited access to capital on reasonable terms. We access long-term capital markets to finance capital expenditures, repay maturing long-term debt and obtain additional working capital, including needs related to power and natural gas purchases and sales, from time-to-time.
Amounts that are not allowed for deferral or which are not approved to become part of customer rates affect our results of operations. Even if our regulators ultimately allow us to recover deferred power and natural gas costs, our operating cash flows can be negatively affected until these costs are recovered from customers.
Amounts that are not allowed for deferral or which are not approved to become part of customer rates affect our results of operations. Even if our regulators ultimately allow the recovery of deferred power and natural gas costs, our operating cash flows can be negatively affected until these costs are recovered from customers.
Management's Discussion and Analysis – Environmental Issues and Contingencies.” Cyber and Technology Risk Factors Cyberattacks, ransomware, terrorism or other malicious acts could disrupt our businesses and have a negative impact on our results of operations and cash flows.
Management's Discussion and Analysis – Environmental Issues and Contingencies.” Cybersecurity Risk Factors Cyberattacks, ransomware, terrorism or other malicious acts could disrupt our businesses and have a negative impact on our results of operations and cash flows.
Any of the above could also result in the loss or release of confidential customer and/or employee information or other proprietary data that could adversely affect our reputation and competitiveness, could result in costly litigation and negatively impact our results of operations.
Any of the above could also result in the loss or release of confidential 28 AVISTA CORPORATION customer and/or employee information or other proprietary data that could adversely affect our reputation and competitiveness, could result in costly litigation and negatively impact our results of operations.
In addition, regulatory and 30 AVISTA CORPORATION legislative initiatives may restrict customers' access to natural gas and/or require or limit natural gas infrastructure in buildings other initiatives may seek to promote social interests expressed as energy equity, environmental justice or similar frameworks.
In addition, regulatory and legislative initiatives may restrict customers' access to natural gas and/or require or limit natural gas infrastructure in buildings other initiatives may seek to promote social interests expressed as energy equity, environmental justice or similar frameworks.
In addition, tariffs and trade restrictions could have a similar impact on our suppliers and certain customers, which could have a negative impact on our financial condition, results of operations and cash flows. See “Item 7.
In addition, tariffs and trade restrictions could have a similar impact on our suppliers and certain customers, which could have a negative impact on our financial condition, results of operations and cash flows. 30 AVISTA CORPORATION See “Item 7.
If market prices decrease compared to the prices we have locked in with our energy commodity derivatives, this will result in a liability related to these derivatives, which 34 AVISTA CORPORATION can be significant.
If market prices decrease compared to the prices we have locked in with our energy commodity derivatives, this will result in a liability related to these derivatives, which can be significant.
Technology failures could result in significant adverse effects on our operations, results of operations, financial condition and cash flows. We may be adversely affected by our inability to successfully implement certain technology projects. There are inherent risks associated with replacing and changing systems, which could have a material adverse effect on our results of operations, financial condition and cash flows.
We may be adversely affected by our inability to successfully implement certain technology projects. There are inherent risks associated with replacing and changing systems, which could have a material adverse effect on our results of operations, financial condition and cash flows.
In the event of any such default, it would be difficult for us to obtain financing on reasonable terms to pay creditors or fund operations. We would also likely be prohibited from paying dividends on our common stock. We hedge a portion of our interest rate risk with financial derivative instruments that may require us to post collateral.
In the event of any such default, it would be difficult to obtain financing on reasonable terms to pay creditors or fund operations. We would also likely be prohibited from paying dividends on our common stock. We may hedge a portion of our interest rate risk with financial derivative instruments, which may require the posting of collateral.
Our strategic business plans could be affected by or result in any of the following: • disruptive innovations in the marketplace may outpace our ability to compete or manage our risk, • customers may have a choice in the future over the sources from which to receive their energy and we may not be able to compete, • potential difficulties in integrating acquired operations and in realizing expected opportunities, diversions of management resources and losses of key employees, challenges with respect to operating new businesses and other unanticipated risks and liabilities, • non-regulated investments in businesses outside of our core utilities operations may increase earnings volatility, • market or other conditions that could adversely affect our operations or require changes to our business strategy and could result in reduced assets and net income, • Affordability of electric and/or gas services may be a challenge for customers resulting in increased delayed payment for utility services, • potential reputational risk arising from repeated general rate case filings, degradation in the quality of service, or from failed strategic investments and opportunities, which could erode shareholder, customer and community satisfaction with the Company, and • the risk of municipalization or other form of service territory reduction.
Our strategic business plans could be affected by or result in the following: • disruptive innovations in the marketplace may outpace our ability to compete or manage our risk, • customers may have a choice in the future over the sources from which to receive their energy and we may not be able to compete, • potential difficulties in integrating acquired operations and in realizing expected opportunities, diversions of management resources and losses of key employees, challenges with respect to operating new businesses and other unanticipated risks and liabilities, • non-regulated investments in businesses outside of our core utilities operations may increase earnings volatility, • market or other conditions that could adversely affect our operations or require changes to our business strategy and could result in reduced assets and net income, • affordability of electric and/or gas services may be a challenge for customers resulting in increased delayed payment for utility services, • potential reputational risk arising from repeated general rate case filings, degradation in the quality of service, or from failed strategic investments and opportunities, which could erode shareholder, customer and community satisfaction with the Company, and • the risk of municipalization or other form of service territory reduction. 29 AVISTA CORPORATION External Mandates Risk Factors External mandate risk involves forces outside the Company, which may include significant changes in customer expectations, disruptive technologies that result in obsolescence of our business model and government action that could impact the Company.
In the normal course of our business, we have matters that are the subject of ongoing litigation, mediation, investigation and/or negotiation. We cannot predict the ultimate outcome or potential impact of any particular issue, including the extent, if any, of insurance coverage or that amounts payable by us may be recoverable through the ratemaking process.
In the normal course of our business, we have matters that are the subject of ongoing litigation, mediation, investigation and/or negotiation. We cannot predict the ultimate outcome or potential impact of any issue, including the extent, if any, of insurance coverage or recovery through the ratemaking process.
We hedge a portion of our energy commodity risk with physical and financial derivative instruments that may require us to post collateral.
We hedge a portion of our energy commodity risk with physical and financial derivative instruments that may require the posting of collateral.
Wildfire risks may be exacerbated by increasing temperatures and/or decreasing precipitation due to climate change experienced in the region. 27 AVISTA CORPORATION We are subject to various operational and event risks.
Wildfire risks may be exacerbated by increasing temperatures and/or decreasing precipitation due to climate change. We are subject to various operational and event risks.
There are various risks associated with technology systems such as hardware or software failure, communications failure, data distortion or destruction, unauthorized access to data, misuse of proprietary or confidential data, unauthorized control through electronic means, programming mistakes and other deliberate or inadvertent human errors. 29 AVISTA CORPORATION Our technology may become obsolete or we may not have sufficient resources to manage our technology.
There are various risks associated with technology systems such as hardware or software failure, communications failure, data distortion or destruction, unauthorized access to data, misuse of proprietary or confidential data, unauthorized control through electronic means, programming mistakes and other deliberate or inadvertent human errors.
In addition, wildfires caused by our equipment could lead to increased litigation and insurance costs, loss of insurance coverage, the need to be self-insured or the need to consider non-traditional insurance coverage or other risk mitigation procedures.
Wildfires caused by our equipment could cause significant damage to our reputation, which could erode shareholder, customer and 26 AVISTA CORPORATION community satisfaction. In addition, wildfires caused by our equipment could lead to increased litigation and insurance costs, loss of insurance coverage, the need to be self-insured or the need to consider non-traditional insurance coverage or other risk mitigation procedures.
We have concentrations of suppliers and customers in the electric and natural gas industries including: • electric and natural gas utilities, • electric generators and transmission providers, • oil and natural gas producers and pipelines, • financial institutions including commodity clearing exchanges and related parties, and • energy marketing and trading companies.
We have concentrations of suppliers and customers in the electric and natural gas industries including: • electric and natural gas utilities, • electric generators and transmission providers, • oil and natural gas producers and pipelines, • financial institutions including commodity clearing exchanges and related parties, and • energy marketing and trading companies. 32 AVISTA CORPORATION We have concentrations of credit risk related to our geographic location in the western United States and western Canada energy markets.
Management's Discussion and Analysis – Environmental Issues and Contingencies” and “Forward-Looking Statements” for discussion of or reference to additional external mandates which could have a material adverse effect on our results of operations, financial condition and cash flows.
Management's Discussion and Analysis – Environmental Issues and Contingencies” and “Forward-Looking Statements” for discussion of or reference to additional external mandates which could have a material adverse effect on our results of operations, financial condition and cash flows. Financial Risk Factors Certain retail electricity and natural gas sales volumes vary directly with changes in temperatures.
The cost to implement rapid response or any repair to such facilities can be significant. Overhead electric lines are most susceptible to damage caused by severe weather and are not covered by insurance. Physical attacks on our assets could have a negative impact on our business and our results of operations.
The cost to implement rapid response or repair to such facilities can be significant. Overhead electric lines are most susceptible to damage caused by severe weather and are not covered by insurance.
Our technology may become obsolete before the end of its useful life. In addition, custom technology that is heavily relied upon by us may not be maintained and updated appropriately due to resource restraints, or other factors, which could cause technology failures or give rise to additional operational or security risks.
In addition, custom or new technology (including potential generative artificial intelligence) that is heavily relied upon may not be maintained and updated appropriately due to resource restraints, or other factors, which could cause technology failures or give rise to additional operational or security risks.
Financial Risk Factors Weather (temperatures, precipitation levels, wind patterns and storms) has a significant effect on our results of operations, financial condition and cash flows. These effects could increase as climate changes occur.
See further discussion at “Note 1 of the Notes to Consolidated Financial Statements – Regulatory Deferred Charges and Credits.” Operational Risk Factors Weather (temperatures, precipitation levels, wind patterns and storms) has a significant effect on our results of operations, financial condition and cash flows. These effects could increase as climate changes occur.
Significant destruction or interruption of these assets and systems could prevent us from fulfilling our critical business functions, including delivering energy to customers.
Security threats are continuing to evolve, and our industry has been subject to, and will likely continue to be subject to, attempts to disrupt operations. Significant destruction or interruption of these assets and systems could prevent us from fulfilling our critical business functions, including delivering energy to customers.
This could result in experiencing a loss of revenues and/or additional costs to replace or restore assets and systems, and may increase costs associated with heightened security requirements. 28 AVISTA CORPORATION Adverse impacts to AEL&P could result from an extended outage of its hydroelectric generating resources or its inability to deliver energy, due to its lack of interconnectivity to any other electrical grids and the cost of replacement power (diesel).
Adverse impacts to AEL&P could result from an extended outage of its hydroelectric generating resources or its inability to deliver energy, due to its lack of interconnectivity to other electrical grids and the cost of replacement power (diesel).
As such, the state of financial markets and credit availability in the global, United States and regional economies impacts our financial condition.
Access to capital markets is critical to our operations and our capital structure. We have significant capital requirements that we expect to fund, in part, by accessing capital markets. As such, the state of financial markets and credit availability in the global, United States and regional economies impacts our financial condition.
In extreme situations, we may be required to sell excess energy at negative prices. As a result of these combined factors, our net cost of power supply – the difference between our costs of generation and market purchases, reduced by our revenue from wholesale sales – varies significantly because of weather.
As a result of these combined factors, our net cost of power supply – the difference between our costs of generation and market purchases, reduced by our revenue from wholesale sales – varies significantly because of weather. 31 AVISTA CORPORATION We rely on regular access to financial markets but we cannot assure favorable or reasonable financing terms will be available when we need them.
These concentrations of counterparties and concentrations of geographic location may affect our overall exposure to credit risk because the counterparties may be similarly affected by changes in conditions. 33 AVISTA CORPORATION Energy Commodity Risk Factors Energy commodity price changes affect our cash flows and results of operations. Energy commodity prices can be volatile.
These concentrations of counterparties and concentrations of geographic location may affect our overall exposure to credit risk because the counterparties may be similarly affected by changes in conditions. We are a participant in the EIM, and engage in direct and indirect power purchase and sale transactions in connection with that participation.
See further discussion at “Note 1 of the Notes to Consolidated Financial Statements – Regulatory Deferred Charges and Credits.” Operational Risk Factors Wildfires ignited, or allegedly ignited, by Avista Corp. equipment or facilities, could cause significant loss of life and property, thereby causing serious operational and financial harm.
Weather impacts are described in the following subtopics: • certain retail electricity and natural gas sales, • the cost of natural gas supply, and • the cost of power supply. Wildfires ignited, or allegedly ignited, by Avista Corp. equipment or facilities, could cause significant loss of life and property, thereby causing serious operational and financial harm.
Removed
Any wildfires caused by our equipment could cause significant damage to our reputation, which could erode shareholder, customer and community satisfaction with our Company.
Added
This could result in experiencing a loss of revenues and/or additional costs to replace or restore assets and systems, and may increase costs associated with heightened security requirements.
Removed
External Mandates Risk Factors External mandate risk involves forces outside the Company, which may include significant changes in customer expectations, disruptive technologies that result in obsolescence of our business model and government action that could impact the Company.
Added
Technology Risk Factors Our technology may become obsolete, development of new technologies could create additional risk, or we may not have sufficient resources to manage our technology. Our technology may become obsolete before the end of its useful life.
Removed
Weather impacts are described in the following subtopics: • certain retail electricity and natural gas sales, • the cost of natural gas supply, and • the cost of power supply. 31 AVISTA CORPORATION Certain retail electricity and natural gas sales volumes vary directly with changes in temperatures.
Added
Generative artificial intelligence could also create additional regulatory scrutiny and generate uncertainty around intellectual property ownership and/or licensing or use. Technology (including artificial intelligence) is also subject to intentional misuse (by criminals, terrorists or other bad actors). Technology failures or incidents of misuse could result in significant adverse effects on our operations, results of operations, financial condition and cash flows.
Removed
We rely on regular access to financial markets but we cannot assure favorable or reasonable financing terms will be available when we need them. Access to capital markets is critical to our operations and our capital structure. We have significant capital requirements that we expect to fund, in part, by accessing capital markets.
Added
In extreme situations, we may be required to sell excess energy at negative prices.
Removed
We have concentrations of credit risk related to our geographic location in the western United States and western Canada energy markets.
Added
The EIM collateral posting requirements are based on established credit criteria, but there is no assurance the collateral will be sufficient to cover obligations that counterparties may owe each other in the EIM and credit losses could be allocated among all EIM participants, including us.
Added
A significant failure of a participant in the EIM to make payments when due on its obligations could have a ripple effect on our counterparties in the power and gas markets if those counterparties experience ancillary liquidity issues, and could result in a decline in the ability of our counterparties to perform on their obligations.
Added
Activist shareholder actions could have a negative impact on our business and operations. Shareholder activism can take many forms and arise in a variety of situations. Actions by activist shareholders could include engaging in proxy solicitations, making or advancing shareholder proposals, or otherwise attempting to assert influence on our board of directors and/or management.
Added
Response to these actions could result in substantial costs, require significant attention from our board of directors and management, and divert resources from the execution of our strategy and business operations. Shareholder activism could result in perceived uncertainties, negatively affect our business opportunities, our ability to access capital markets, and relationships with our customers and employees.
Added
These actions could have a material adverse effect on our financial condition and results of operations, and could result in significant fluctuations in the trading price of our common stock based on market perceptions or other factors. Energy Commodity Risk Factors Energy commodity price changes affect our cash flows and results of operations. Energy commodity prices can be volatile.

Item 2. Properties

Properties — owned and leased real estate

8 edited+0 added−0 removed11 unchanged
Biggest change(3) These generating stations can operate as separate single-cycle plants or combined-cycle with the natural gas plant providing exhaust heat to the wood boiler to increase efficiency. (4) Jointly owned; data refers to our 15 percent interest. See “Item 7. Management’s Discussion and Analysis of Financial Condition – Colstrip” for information related to Colstrip Units 3 and 4.
Biggest change(4) Jointly owned; data refers to our 15 percent interest. See “Item 7. Management’s Discussion and Analysis of Financial Condition – Colstrip” for information related to Colstrip Units 3 and 4. Electric Distribution and Transmission Plant Avista Utilities owns and operates approximately 19,700 miles of primary and secondary electric distribution lines providing service to retail customers.
(2) AEL&P does not own this generating facility but has a PPA under which it has the right to purchase, and the obligation to pay for (whether or not energy is received), all of the capacity and energy of this facility. See further information at “Part 1. Item 1.
(2) AEL&P does not own this generating facility but has a PPA under which it has the right to purchase, and the obligation to pay for the capacity and energy of this facility. See further information at “Part 1. Item 1.
Plant 23.5 Total Diesel 107.5 Total Generation Properties 210.2 37 AVISTA CORPORATION (1) Present capability is the maximum capacity of the plant under standard test conditions without exceeding specified limits of temperature, stress and environmental conditions. Information is provided as of December 31, 2022.
Plant 23.5 Total Diesel 107.5 Total Generation Properties 210.2 37 AVISTA CORPORATION (1) Present capability is the maximum capacity of the plant under standard test conditions without exceeding specified limits of temperature, stress and environmental conditions.
These lines also provide a means for us to optimize resources by entering into short-term purchases and sales of power with entities within and outside of the Pacific Northwest.
These lines also provide a means to optimize resources through short-term purchases and sales of power with entities within and outside of the Pacific Northwest.
Information is provided as of December 31, 2022. (2) For Cabinet Gorge, we have water rights permitting generation up to 265 MW. However, if natural stream flows will allow for generation above our water rights, we are able to generate above our water rights.
(2) For Cabinet Gorge, we have water rights permitting generation up to 265 MW. However, if natural stream flows will allow for generation above our water rights, we are able to generate above our water rights. If natural stream flows only allow for generation at or below 265 MW, we are limited to generation of 265 MW.
We also own an 11 percent interest in approximately 500 miles of a 500 kV line between Colstrip, Montana and Townsend, Montana. Our transmission and distribution systems also include numerous substations with transformers, switches, monitoring and metering devices and other equipment.
Our transmission and distribution systems also include numerous substations with transformers, switches, monitoring and metering devices and other equipment.
Electric Distribution and Transmission Plant Avista Utilities owns and operates approximately 19,600 miles of primary and secondary electric distribution lines providing service to retail customers. We have an electric transmission system of approximately 700 miles of 230 kV line and 36 AVISTA CORPORATION approximately 1,600 miles of 115 kV line.
We have an electric transmission system of approximately 700 miles of 230 kV line and 36 AVISTA CORPORATION approximately 1,600 miles of 115 kV line. We also own an 11 percent interest in approximately 500 miles of a 500 kV line between Colstrip, Montana and Townsend, Montana.
If natural stream flows only allow for generation at or below 265 MW, we are limited to generation of 265 MW. The present capability disclosed above represents the capability based on maximum stream flow conditions when we are allowed to generate above our water rights.
The present capability disclosed above represents the capability based on maximum stream flow conditions when we are allowed to generate above our water rights. (3) These generating stations can operate as separate single-cycle plants or combined-cycle with the natural gas plant providing exhaust heat to the wood boiler to increase efficiency.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+0 added−0 removed6 unchanged
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Avista Corp. Market Information and Dividend Policy Avista Corp.'s common stock is listed on the New York Stock Exchange under the ticker symbol “AVA.” As of January 31, 2023, there were 6,339 registered shareholders of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Avista Corp. Market Information and Dividend Policy Avista Corp.'s common stock is listed on the New York Stock Exchange under the ticker symbol “AVA.” As of January 31, 2024, there were 6,110 registered shareholders of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

221 edited+59 added−137 removed69 unchanged
Biggest changeThe following table summarizes our interest rate swap derivatives outstanding as of December 31, 2022 and December 31, 2021 (dollars in thousands): December 31, December 31, 2022 2021 Number of agreements 5 16 Notional amount $ 50,000 $ 170,000 Mandatory cash settlement dates 2023 to 2024 2022 to 2024 Short-term derivative assets (1) $ 8,536 $ — Long-term derivative assets (1) 2,648 1,149 Short-term derivative liability (1) (52 ) (24,026 ) Long-term derivative liability (1) — (78 ) (1) There are offsetting regulatory assets and liabilities for these items on the Consolidated Balance Sheets in accordance with regulatory accounting practices.
Biggest changeThe following table summarizes interest rate swap derivatives outstanding as of December 31, 2023 and December 31, 2022 (dollars in thousands): December 31, December 31, 2023 2022 Number of agreements 3 5 Notional amount $ 30,000 $ 50,000 Mandatory cash settlement dates 2024 to 2025 2023 to 2024 Short-term derivative assets (1) $ 3,667 $ 8,536 Long-term derivative assets (1) — 2,648 Short-term derivative liability (1) — (52 ) Long-term derivative liability (1) (182 ) — (1) There are offsetting regulatory assets and liabilities for these items on the Consolidated Balance Sheets in accordance with regulatory accounting practices. 70 AVISTA CORPORATION We estimate that a 10 basis point increase in forward variable interest rates as of December 31, 2023 would increase the interest rate swap derivative net liability by $0.5 million, while a 10 basis point decrease would decrease the interest rate swap derivative net liability by $0.5 million.
Negative amounts are decreases in decoupling revenue in the current year and will be rebated to customers in future years.
Negative amounts 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.
(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.
We consider the management of these risks an integral part of managing our core businesses and a key element of our approach to corporate governance. Risk management includes identifying and measuring various forms of risk that may affect the Company. We have an enterprise risk management process for managing risks throughout our organization.
We consider the management of these risks an integral part of managing our core businesses and a key element of our approach to corporate governance. Risk management includes identifying and measuring various forms of risk that may affect the Company. We have an enterprise risk management process for managing risks throughout the organization.
We manage our capital structure to maintain a financial risk profile that we believe these parties will deem prudent. We forecast cash requirements to determine liquidity needs, including sources and variability of cash flows that may arise from our spending plans or from external forces, such as changes in energy prices or interest rates.
We manage our capital structure to maintain a financial risk profile that we believe these parties will deem prudent. We forecast cash requirements to determine liquidity needs, including sources and variability of cash flows that may arise from spending plans or from external forces, such as changes in energy prices or interest rates.
To address the impact on our operations of energy market price volatility, our hedging practices for electricity (including fuel for generation) and natural gas extend beyond the current operating year. Executing this extended hedging program may increase our credit risks.
To address the impact on our operations of energy market price volatility, our hedging practices for electricity (including fuel for generation) and natural gas extend beyond the current operating year. Executing this extended hedging program may increase credit risks.
Our credit risk management process is designed to mitigate such credit risks through limit setting, contract protections and counterparty diversification, among other practices. Our projected retail natural gas loads and resources are regularly reviewed by operating management and the RMC.
Our credit risk management process is designed to mitigate such credit risks through limit setting, contract protections and counterparty diversification, among other practices. Projected retail natural gas loads and resources are regularly reviewed by operating management and the RMC.
Oversight of our compliance risk strategy is performed by senior management, including our Chief Compliance Officer, and the Environmental, Technology and Operations Committee and the Audit Committee of our Board of Directors. See “Item 1. Business, Regulatory Issues” through “Item 1. Business, Reliability Standards” and “Environmental Issues and Contingencies” for further discussion of compliance issues that impact our Company.
Oversight of compliance risk strategy is performed by senior management, including the Chief Compliance Officer, and the Environmental, Technology and Operations Committee and the Audit Committee of the Board of Directors. See “Item 1. Business, Regulatory Issues” through “Item 1. Business, Reliability Standards” and “Environmental Issues and Contingencies” for further discussion of compliance issues that impact our Company.
In addition, CETA establishes the policy of Washington State that all retail sales of electricity to Washington customers must be carbon-neutral by January 1, 2030 and requires that each electric utility demonstrate compliance with this standard by using electricity from renewable and other non-emitting resources for 100 percent of the utility’s retail electric load over consecutive multi-year compliance periods; provided, however, that through December 31, 2044 the utility may satisfy up to 20 percent of this requirement with specified payments, credits and/or investments in qualifying energy transformation projects.
In addition, the CETA establishes the policy of Washington State that retail sales of electricity to Washington customers must be carbon-neutral by January 1, 2030 and requires that each electric utility demonstrate compliance with this standard by using electricity from renewable and other non-emitting resources for 100 percent of the utility’s retail electric load over consecutive multi-year compliance periods; provided, however, that through December 31, 2044 the utility may satisfy up to 20 percent of this requirement with specified payments, credits and/or investments in qualifying energy transformation projects.
Under the Avista Corp. and the AEL&P Mortgages and Deeds of Trust securing Avista Corp.'s and AEL&P's first mortgage bonds (including Secured Medium-Term Notes), respectively, each entity may issue additional first mortgage bonds in an aggregate principal amount equal to the sum of: • 66-2/3 percent of the cost or fair value (whichever is lower) of property additions of that entity which have not previously been made the basis of any application under that entity's Mortgage, or • an equal principal amount of retired first mortgage bonds of that entity which have not previously been made the basis of any application under that entity's Mortgage, or • deposit of cash.
Under the Avista Corp. and the AEL&P Mortgages and Deeds of Trust securing Avista Corp.'s and AEL&P's first mortgage bonds (including Secured Medium-Term Notes), respectively, each entity may issue additional first mortgage bonds in an aggregate principal amount equal to the sum of: • 66-2/3 percent of the cost or fair value to the company (whichever is lower) of property additions of that entity which have not previously been made the basis of any application under that entity's Mortgage, or • an equal principal amount of retired first mortgage bonds of that entity which have not previously been made the basis of any application under that entity's Mortgage, or • deposit of cash.
We have to make estimates and assumptions as to many of these factors. In accordance with accounting standards, changes in pension plan obligations associated with these factors may not be immediately recognized as pension costs in our Consolidated Statements of Income, but we generally recognize the change in future years over the remaining average service period of pension plan participants.
We make estimates and assumptions as to many of these factors. In accordance with accounting standards, changes in pension plan obligations associated with these factors may not be immediately recognized as pension costs in our Consolidated Statements of Income, but we generally recognize the change in future years over the remaining average service period of pension plan participants.
We measure the volume of monthly, quarterly and annual energy imbalances between projected power loads and resources. The measurement process is based on expected loads at fixed prices (including those subject to retail rates) and expected resources to the extent that costs are essentially fixed by virtue of known fuel supply costs or projected hydroelectric conditions.
We measure the volume of monthly, quarterly and annual energy imbalances between projected power loads and resources. The measurement process is based on expected loads at fixed prices (including those subject to retail rates) and expected resources to the extent costs are essentially fixed by virtue of known fuel supply costs or projected hydroelectric conditions.
To the extent that expected costs are not fixed, either because of volume mismatches between loads and resources or because fuel cost is not locked in through fixed price contracts or derivative instruments, our risk policy guides the process to manage this open forward position over a period of time.
To the extent expected costs are not fixed, either because of volume mismatches between loads and resources or because fuel cost is not locked in through fixed price contracts or derivative instruments, our risk policy guides the process to manage this open forward position over a period of time.
The parties agreed to an overall ROR of 7.05 percent based on a 50 percent common equity ratio and ROE of 9.4 percent. In March 2022, a second settlement stipulation was filed with the OPUC that addressed, and resolved, all other remaining issues, and was subsequently approved by the OPUC.
The parties agreed to an ROR of 7.05 percent based on a 50 percent common equity ratio and ROE of 9.4 percent. In March 2022, a second settlement stipulation was filed with the OPUC that addressed, and resolved, all other remaining issues, and was subsequently approved by the OPUC.
The law has direct, specific impacts on Colstrip, which are unique to those owners of Colstrip who serve Washington customers. See “Colstrip” section and “Note 22 of the Notes to Consolidated Financial Statements” for further details on the impacts of CETA on Colstrip and our plans to exit Colstrip through our agreement with NorthWestern.
The law has direct, specific impacts on Colstrip, which are unique to those owners of Colstrip who serve Washington customers. See “Colstrip” section and “Note 22 of the Notes to Consolidated Financial Statements” for further details on the impacts of the CETA on Colstrip and our plans to exit Colstrip through an agreement with NorthWestern.
Our energy resources risk policy includes our wholesale energy markets credit policy and control procedures to manage energy commodity price and credit risks. Nonetheless, adverse changes in commodity prices, generating capacity, customer loads, regulation and other factors may result in losses of earnings, cash flows and/or fair values.
Our energy resources risk policy includes a wholesale energy markets credit policy and control procedures to manage energy commodity price and credit risks. Nonetheless, adverse changes in commodity prices, generating capacity, customer loads, regulation and other factors may result in losses of earnings, cash flows and/or fair values.
To address the risk related to fuel cost, availability and delivery restraints, we have an energy resources risk policy, which includes our wholesale energy markets credit policy and control procedures to manage energy commodity price and credit risks. Development of the energy resources risk policy includes planning for sufficient capacity to meet our customer and wholesale energy delivery obligations.
To address the risk related to fuel cost, availability and delivery restraints, we have an energy resources risk policy, which includes a wholesale energy markets credit policy and control procedures to manage energy commodity price and credit risks. Development of the energy resources risk policy includes planning for sufficient capacity to meet our customer and wholesale energy delivery obligations.
Executing this extended hedging program may increase credit risk and demands for collateral. Our credit risk management process is designed to mitigate such credit risks through limit setting, contract protections and counterparty diversification, among other practices. Credit risk affects demands on our capital.
Executing this extended hedging program may increase our credit risk and demands on us for collateral. Our credit risk management process is designed to mitigate such credit risks through limit setting, contract protections and counterparty diversification, among other practices. Credit risk affects demands on our capital.
For all material contingencies, we have made a judgment as to the probability of a loss occurring and as to whether or not the amount of the loss can be reasonably estimated. However, no assurance can be given as to the ultimate outcome of any particular contingency.
For all material contingencies, we have made a judgment as to the probability of a loss occurring and as to whether or not the amount of the loss can be reasonably estimated. However, no assurance can be given as to the ultimate outcome of any contingency.
In selecting a discount rate, we consider yield rates at the end of the year for highly rated corporate bond portfolios with cash flows from interest and maturities similar to that of the expected payout of pension benefits.
In selecting a discount rate, we consider yield rates at the end of the year for highly rated corporate bond portfolios with cash flows from interest and maturities similar to the expected payout of pension benefits.
See “Notes 1, 4 and 23 of the Notes to Consolidated Financial Statements” for further discussion of our regulatory accounting policy and mechanisms. • Pension plans and other postretirement benefit plans , discussed in further detail below. 55 AVISTA CORPORATION • Equity investments, specifically valuations performed to determine the fair value of certain investment holdings, require judgement in the selection of assumptions used to estimate fair value of investments for which there is not a quoted active market price.
See “Notes 1, 4 and 23 of the Notes to Consolidated Financial Statements” for further discussion of our regulatory accounting policy and mechanisms. • Pension plans and other postretirement benefit plans , discussed in further detail below. • Equity investments, specifically valuations performed to determine the fair value of certain investment holdings, require judgement in the selection of assumptions used to estimate fair value of investments for which there is not a 53 AVISTA CORPORATION quoted active market price.
We are also attempting to enhance the effectiveness and ease of our customer interactions with us by tailoring our internal initiatives to focus on choices for our customers to increase their overall satisfaction with the Company.
We are also attempting to enhance the effectiveness and ease of our customer interactions by tailoring internal initiatives to focus on choices for customers to increase their overall satisfaction with the Company.
Oversight of our pension plan investment strategies is performed by the Finance Committee of the Board of Directors, which approves investment and funding policies, objectives and strategies that seek an appropriate return for the pension plan.
Oversight of pension plan investment strategies is performed by the Finance Committee of the Board of Directors, which approves investment and funding policies, objectives and strategies that seek an appropriate return for the pension plan.
Pension costs are affected by among other things: • employee demographics (including age, compensation and length of service by employees), • the amount of cash contributions we make to the pension plan, • the actual return on pension plan assets, • expected return on pension plan assets, • discount rate used in determining the projected benefit obligation and pension costs, • assumed rate of increase in employee compensation, • life expectancy of participants and other beneficiaries, and • expected method of payment (lump sum or annuity) of pension benefits.
Pension costs are affected by among other things: • employee demographics (including age, compensation and length of service by employees), • the amount of cash contributions to the pension plan, • the actual return on pension plan assets, • expected return on pension plan assets, • discount rate used in determining the projected benefit obligation and pension costs, • assumed rate of increase in employee compensation, • life expectancy of participants and other beneficiaries, and • expected method of payment (lump sum or annuity) of pension benefits.
Financial Risk Our financial risk is impacted by many factors. Several of these risks include regulation and rates, weather, access to capital markets, interest rate risk, credit risk, and foreign exchange risk.
Financial Risk Financial risk is impacted by many factors. Several of these risks include regulation and rates, weather risk, access to capital markets, interest rate risk, credit risk, and foreign exchange risk.
We have a Treasury department that monitors our daily cash position and future cash flow needs, as well as monitoring market conditions to determine the appropriate course of action for capital financing and/or hedging strategies. Oversight of our financial risk mitigation strategies is performed by senior management and the Finance Committee of our Board of Directors.
We have a Treasury department that monitors our daily cash position and future cash flow needs, as well as monitoring market conditions to determine the appropriate course of action for capital financing strategies. Oversight of financial risk mitigation strategies is performed by senior management and the Finance Committee of the Board of Directors.
To manage the impacts of volatile natural gas prices, we seek to procure natural gas through a diversified mix of spot market purchases and forward fixed price purchases from various supply basins and time periods. We have an active hedging program that extends into future years with the goal of reducing price volatility in our natural gas supply costs.
To manage the impacts of volatile natural gas prices, we procure natural gas through a diversified mix of spot market purchases and forward fixed price purchases from various supply basins and time periods. We have an active hedging program that extends into future years with the goal of reducing price volatility in natural gas supply costs.
Business Segments As of December 31, 2022, we have two reportable business segments, Avista Utilities and AEL&P. We also have other businesses which do not represent a reportable business segment and are conducted by various direct and indirect subsidiaries of Avista Corp. See “Part I, Item 1. Business – Company Overview” for further discussion of our business segments.
Business Segments As of December 31, 2023, we have two reportable business segments, Avista Utilities and AEL&P. We also have other businesses which do not represent a reportable business segment and are conducted by various direct and indirect subsidiaries of Avista Corp. See “Part I, Item 1. Business – Company Overview” for further discussion of our business segments.
See “Notes 1 and 22 of the Notes to Consolidated Financial Statements” for further discussion of our commitments and contingencies. Pension Plans and Other Postretirement Benefit Plans - Avista Utilities We have a defined benefit pension plan covering substantially all regular full-time employees at Avista Utilities that were hired prior to January 1, 2014.
See “Notes 1 and 22 of the Notes to Consolidated Financial Statements” for further discussion of our commitments and contingencies. Pension Plans and Other Postretirement Benefit Plans - Avista Utilities We have a defined benefit pension plan covering substantially all regular full-time employees at Avista Utilities hired prior to January 1, 2014.
A key area of focus for the Perform Council is potential risks and opportunities associated with long-term global climate change.
A key area of focus for the Perform Council is potential risks and opportunities associated with long-term climate change.
Compliance Risk Compliance risk is mitigated through separate Regulatory and Environmental Compliance departments that monitor legislation, regulatory orders and actions to determine the overall potential impact to our Company and develop strategies for complying with the various rules and regulations. We also engage outside attorneys and consultants, when necessary, to help ensure compliance with laws and regulations.
Compliance Risk Compliance risk is mitigated through separate Regulatory and Environmental Compliance departments that monitor legislation, regulatory orders and actions to determine the overall potential impact and develop strategies for complying with the various rules and regulations. We also engage outside attorneys and consultants, when necessary, to help ensure compliance with laws and regulations.
The expectations regarding retail load growth are also based upon various assumptions, including: • assumptions relating to weather and economic and competitive conditions, • internal analysis of company-specific data, such as energy consumption patterns, • internal business plans, • an assumption that we will incur no material loss of retail customers due to self-generation or retail wheeling, and • an assumption that demand for electricity and natural gas as a fuel for mobility will for now be immaterial.
The expectations regarding retail load growth are also based upon various assumptions, including: • assumptions relating to weather and economic and competitive conditions, • internal analysis of company-specific data, such as energy consumption patterns, 62 AVISTA CORPORATION • internal business plans, • an assumption that we will incur no material loss of retail customers due to self-generation or retail wheeling, and • an assumption that demand for electricity and natural gas as a fuel for mobility will for now be immaterial.
Factors beyond our control that could result in an increased need to purchase power in the wholesale markets include, but are not limited to: • increases in demand (due to either weather (possibly due to climate change) or customer growth), • reduced snowpack or lower streamflows (due to weather (possibly due to climate change)) for hydroelectric generation, • unplanned outages at generating facilities, and • failure of third parties to deliver on energy or capacity contracts.
Factors beyond our control that could result in an increased need to purchase power in the wholesale markets include, but are not limited to: • increases in demand (due to either weather or customer growth), • reduced snowpack or lower streamflows (due to weather) for hydroelectric generation, • unplanned outages at generating facilities, and • failure of third parties to deliver on energy or capacity contracts.
Our annual net cash flows from operating activities usually do not fully support the amount required for annual utility capital expenditures. As such, from time-to-time, we need to access capital markets in order to fund these needs as well as fund maturing debt.
Our annual net cash flows from operating activities usually do not fully support the amount required for annual utility capital expenditures. As such, from time-to-time, we need to access capital markets to fund these needs as well as fund maturing debt.
There is a risk that we do not obtain sufficient additional collateral from counterparties that are unable or unwilling to provide it. 76 AVISTA CORPORATION Credit Risk Liquidity Considerations To address the impact on our operations of energy market price volatility, our hedging practices for electricity (including fuel for generation) and natural gas extend beyond the current operating year.
There is a risk that we do not obtain sufficient additional collateral from counterparties that are unable or unwilling to provide it. Credit Risk Liquidity Considerations To address the impact on our operations of energy market price volatility, our hedging practices for electricity (including fuel for generation) and natural gas extend beyond the current operating year.
Rates are designed to provide, after recovery of allowable operating expenses and capital investments, an opportunity for us to earn a reasonable return on investment as allowed by our regulators. In retail markets, we compete with various rural electric cooperatives and public utility districts in and adjacent to our service territories in the provision of service to new electric customers.
In theory, rates are designed to provide, after recovery of allowable operating expenses and capital investments, an opportunity to earn a reasonable return on investment as allowed by our regulators. In retail markets, we compete with various rural electric cooperatives and public utility districts in and adjacent to our service territories in the provision of service to new electric customers.
This Executive Order led to the Oregon Department of Environmental Quality developing cap and reduce rules known as the Climate Protection Program (CPP). The CPP, which became effective in January 2022, outlines GHG emissions reduction goals of 50 percent by 2035 and 90 percent by 2050 from the 1990 baseline. The first three-year compliance period is 2022 through 2024.
This Executive Order led to the Oregon Department of Environmental Quality developing cap and reduce rules known as the CPP. The CPP, which became effective in January 2022, outlines GHG emissions reduction goals of 50 percent by 2035 and 90 percent by 2050 from the 1990 baseline. The first three-year compliance period is 2022 through 2024.
The events of default under each of the credit facilities also include a cross default from other indebtedness (as defined) and in some cases other obligations. Some of these agreements also include a covenant which does not permit our ratio of “consolidated total debt” to “consolidated total capitalization” to be greater than 65 percent at any time.
The events of default under each of the credit facilities also include a cross default from other indebtedness (as defined) and in some cases other obligations. Some of these agreements also include a covenant which does not permit our 57 AVISTA CORPORATION ratio of “consolidated total debt” to “consolidated total capitalization” to be greater than 65 percent at any time.
The Oregon Energy Facility Siting Council issues rules periodically to update the standard, as more efficient power plants are built in other states. The standard can be met by any combination of efficiency, cogeneration, and offsets from carbon dioxide mitigation measures. We have thermal generation located in Oregon, and as such this standard applies to that facility.
The Oregon Energy Facility Siting Council issues rules periodically to update the standard, as more efficient power plants are built. The standard can be met by combination of efficiency, cogeneration, and offsets from carbon dioxide mitigation measures. We have thermal generation located in Oregon, and as such this standard applies to that facility.
Further information for derivatives and fair values is disclosed at “Note 8 of the Notes to Consolidated Financial Statements” and “Note 18 of the Notes to Consolidated Financial Statements.” 77 AVISTA CORPORATION Energy Commodity Risk We mitigate energy commodity risk primarily through our energy resources risk policy, which includes oversight from the RMC and oversight from the Audit Committee and the Environmental, Technology and Operations Committee of our Board of Directors.
Further information for derivatives and fair values is disclosed at “Note 8 of the Notes to Consolidated Financial Statements” and “Note 18 of the Notes to Consolidated Financial Statements.” Energy Commodity Risk We mitigate energy commodity risk primarily through our energy resources risk policy, which includes oversight from the RMC and oversight from the Audit Committee and the Environmental, Technology and Operations Committee of the Board of Directors.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section of this Annual Report on Form 10-K generally discusses 2022 and 2021 financial statement items and year-to-year comparisons between 2022 and 2021.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 financial statement items and year-to-year comparisons between 2023 and 2022.
See further discussion at “Capital Resources.” We regularly file for rate adjustments for recovery of operating costs and capital investments and to seek the opportunity to earn reasonable returns. We have regulatory mechanisms in place that provide for the deferral and recovery of the majority of power and natural gas supply costs.
See further discussion at “Capital Resources.” We regularly file for rate adjustments for recovery of operating costs and capital investments and to seek the opportunity to earn reasonable returns. 55 AVISTA CORPORATION We have regulatory mechanisms in place that provide for the deferral and recovery of the majority of power and natural gas supply costs.
In December 2019, a proposed revision to the rule was published in the Federal Register to address the D.C. Circuit's decision. The rule includes technical requirements for CCR landfills and surface impoundments under Subtitle D of the Resource Conservation and Recovery Act, the nation's primary law for regulating solid waste.
In December 2019, a proposed revision to the rule 66 AVISTA CORPORATION was published in the Federal Register to address the D.C. Circuit's decision. The rule includes technical requirements for CCR landfills and surface impoundments under Subtitle D of the Resource Conservation and Recovery Act, the nation's primary law for regulating solid waste.
Included in our 2022 pension costs is $11.8 million of settlement costs, which were deferred as a regulatory asset and therefore do not impact our net income for the year. See “Note 12 of the Notes to Consolidated Financial Statements” for further discussion of pension settlement accounting treatment.
Included in our 2022 pension costs is $11.8 million of settlement costs, which were deferred as a regulatory asset and therefore did not impact our net income in 2022. See “Note 12 of the Notes to Consolidated Financial Statements” for further discussion of pension settlement accounting treatment.
Our hydroelectric and biomass generation facilities can be used to comply with the CETA’s clean energy standards. We intend to seek recovery of any costs associated with the clean energy legislation and regulations through the regulatory process. As required under CETA, in October 2021 we filed our first Clean Energy Implementation Plan (CEIP).
Our hydroelectric and biomass generation facilities can be used to comply with the CETA’s clean energy standards. We intend to seek recovery of costs associated with the clean energy legislation and regulations through the regulatory process. As required under the CETA, in October 2021 we filed our first CEIP.
To prevent the threat of municipalization, we work to build strong relationships with the communities we serve through, among other things: • communication and involvement with local business leaders and community organizations, • providing customers with a multitude of limited income initiatives, including energy fairs, senior outreach, low income workshops, mobile outreach strategy and a Low Income Rate Assistance Plan, • tailoring our internal company initiatives to focus on choices for our customers, to increase their overall satisfaction with the Company, and • engaging in the legislative process in a manner that fosters the interests of our customers and the communities we serve.
To prevent the threat of municipalization, we work to build strong relationships with the communities we serve through, among other things: • communicating and being involved with local business leaders and community organizations, • providing customers with a multitude of limited income initiatives, including energy fairs, senior outreach, low income workshops, mobile outreach strategy and a Low Income Rate Assistance Plan, • tailoring internal company initiatives to focus on choices for customers, to increase their overall satisfaction with the Company, and • engaging in the legislative process in a manner that fosters the interests of our customers and the communities we serve.
Regulatory lag can be mitigated to some extent by the incorporation of reasonably expected forward-looking information into an authorization of increased rates. However, there is no protection against unexpected inflation and increased interest rates, as were experienced in 2022 and are continuing into 2023.
Regulatory lag can be mitigated to some extent by the incorporation of reasonably expected forward-looking information into an authorization of increased rates. However, there is no protection against unexpected inflation and increased interest rates, as experienced in 2022 and 2023.
In each regulatory jurisdiction, our rates for retail electric and natural gas services (other than specially negotiated retail rates for industrial or large commercial customers, which are subject to regulatory review and approval) are generally determined on a 63 AVISTA CORPORATION “cost of service” basis.
In each regulatory jurisdiction, our rates for retail electric and natural gas services (other than specially negotiated retail rates for industrial or large commercial customers, which are subject to regulatory review and approval) are generally determined on a “cost of service” basis.
See “Enterprise Risk Management – Credit Risk Liquidity Considerations” and “Note 8 of the Notes to Consolidated Financial Statements.” The following table summarizes our credit ratings as of February 21, 2023: Standard & Poor's (1) Moody's (2) Corporate/Issuer rating BBB Baa2 Senior Secured Debt A- A3 Senior Unsecured Debt BBB Baa2 (1) Standard & Poor’s lowest “investment grade” credit rating is BBB-.
See “Enterprise Risk Management – Credit Risk Liquidity Considerations” and “Note 8 of the Notes to Consolidated Financial Statements.” The following table summarizes our credit ratings as of February 20, 2024: Standard & Poor's (1) Moody's (2) Corporate/Issuer rating BBB Baa2 Senior Secured Debt A- A3 Senior Unsecured Debt BBB Baa2 (1) Standard & Poor’s lowest “investment grade” credit rating is BBB-.
These derivative instruments periodically require us to post collateral (in the form of cash or letters of credit) or other credit enhancements or to reduce or terminate a portion of the contract through cash settlement, in the event of a downgrade in our credit ratings or changes in market prices.
These derivative instruments periodically require the posting of collateral (in the form of cash or letters of credit) or other credit enhancements or to reduce or terminate a portion of the contract through cash settlement, in the event of a downgrade in our credit ratings or changes in market prices.
Regulatory Lag Regulatory “lag” is inherent in utility ratemaking due to the delay between the investment in utility plant and/or the increase in costs and the receipt of an order of a public utility commission authorizing an increase in rates sufficient to recover such investments or costs.
Regulatory Lag Regulatory “lag” is inherent in utility ratemaking; a result of the delay between the investment in utility plant and/or the increase in costs and the receipt of an order of a public utility commission authorizing an increase in rates sufficient to recover such investment or costs.
Actual expenditures may vary from our estimates due to factors such as changes in business conditions or strategic plans. See “Liquidity” for information regarding other material cash requirements for 2023 and thereafter. Pensio n Plan We contributed $42.0 million to the pension plan in 2022.
Actual expenditures may vary from our estimates due to factors such as changes in business conditions or strategic plans. See “Liquidity” for information regarding other material cash requirements for 2024 and thereafter. Pensio n Plan We contributed $10.0 million to the pension plan in 2023.
Discussion of 2020 financial statement items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Conditions and Results of Operations” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2021.
Discussion of 2021 financial statement items and year-to-year comparisons between 2022 and 2021 not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Conditions and Results of Operations” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
Natural gas utility margin increased primarily due to customer growth. Intracompany revenues and resource costs represent purchases and sales of natural gas between our natural gas distribution operations and our electric generation operations (as fuel for our generation plants).
Natural gas utility margin increased primarily due to customer growth and our general rate cases. Intracompany revenues and resource costs represent purchases and sales of natural gas between our natural gas distribution operations and our electric generation operations (as fuel for our generation plants).
See “Note 12 of the Notes to Consolidated Financial Statements” for further discussion of these individual plans. Pension costs (including the SERP) were $22.8 million for 2022, $19.3 million for 2021 and $22.3 million for 2020.
See “Note 12 of the Notes to Consolidated Financial Statements” for further discussion of these individual plans. Pension costs (including the SERP) were $9.3 million for 2023, $22.8 million for 2022 and $19.3 million for 2021.
Among other things, the Perform Council: • facilitates internal and external communications regarding climate change and related issues, • analyzes policy effects, anticipates opportunities and evaluates strategies for the Company, • develops recommendations on climate related policy positions and action plans, and • provides direction and oversight with respect to the Company's clean energy goals.
Among other things, the Perform Council: • facilitates internal and external communications regarding climate change and related issues, • analyzes policy effects, anticipates opportunities and evaluates strategies, • develops recommendations on climate related policy positions and action plans, and • provides direction and oversight with respect to our clean energy goals.
Oregon Legislation and Regulatory Actions Climate Protection Plan In March 2020, Oregon Governor Kate Brown issued Executive Order No. 20-04, “Directing State Agencies to Take Actions to Reduce and Regulate Greenhouse Gas Emissions.” The Executive Order launched rulemaking proceedings for every Oregon agency with jurisdiction over greenhouse gas (GHG)-related matters, with the aim of reducing Oregon’s overall GHG emissions to 80 percent below 1990 levels by 2050.
The State Action remains pending. 65 AVISTA CORPORATION Oregon Legislation and Regulatory Actions Climate Protection Plan In March 2020, Oregon Governor Kate Brown issued Executive Order No. 20-04, “Directing State Agencies to Take Actions to Reduce and Regulate Greenhouse Gas Emissions.” The Executive Order launched rulemaking proceedings for every Oregon agency with jurisdiction over GHG-related matters, with the aim of reducing Oregon’s overall GHG emissions to 80 percent below 1990 levels by 2050.
The following chart reflects the sensitivities associated with a change in certain actuarial assumptions by the indicated percentage (dollars in millions): Actuarial Assumption Change in Assumption Effect on Projected Benefit Obligation Effect on Pension Cost Expected long-term return on plan assets (0.5 )% $ — * $ 3.8 Expected long-term return on plan assets 0.5 % — * (3.8 ) Discount rate (0.5 )% 28.8 5.0 Discount rate 0.5 % (26.2 ) 3.4 * Changes in the expected return on plan assets would not affect our projected benefit obligation.
The following chart reflects the sensitivities associated with a change in certain actuarial assumptions by the indicated percentage (dollars in millions): Actuarial Assumption Change in Assumption Effect on Projected Benefit Obligation Effect on Pension Cost Expected long-term return on plan assets (0.5 )% $ — * $ 2.6 Expected long-term return on plan assets 0.5 % — * (2.6 ) Discount rate (0.5 )% 31.4 2.5 Discount rate 0.5 % (28.5 ) (2.5 ) * Changes in the expected return on plan assets would not affect our projected benefit obligation.
Our primary identified categories of risk exposure are: • Utility regulatory • External mandates • Operational • Financial • Climate Change • Energy commodity • Cyber and Technology • Compliance • Strategic Our primary categories of risks are described in “Item 1A.
Our primary identified categories of risk exposure are: • Utility regulatory • Strategic • Operational • External mandates • Climate Change • Financial • Cybersecurity • Energy commodity • Technology • Compliance Our primary categories of risks are described in “Item 1A.
As of December 31, 2022, property additions and retired bonds would have allowed, and the net earnings test would not have prohibited, the issuance of $1.4 billion in aggregate principal amount of additional first mortgage bonds at Avista Corp. and $40.4 million at AEL&P, at an assumed interest rate of 8 percent in each case.
As of December 31, 2023, property additions and retired bonds would have allowed, and the net earnings test would not have prohibited, the issuance of $1.2 billion in aggregate principal amount of additional first mortgage bonds at Avista Corp. and $51.4 million at AEL&P, at an assumed interest rate of 8 percent in each case.
Coal Ash Management/Disposal In 2015, the EPA issued a final rule regarding coal combustion residuals (CCRs), also termed coal combustion byproducts or coal ash (Colstrip produces this byproduct). The CCR rule has been the subject of ongoing litigation. In August 2018, the D.C. Circuit struck down provisions of the rule.
Coal Ash Management/Disposal In 2015, the EPA issued a final rule regarding coal combustion residuals (CCRs), also termed coal combustion byproducts or coal ash (Colstrip produces this byproduct). The CCR rule has been the subject of ongoing litigation. In August 2018, U.S. Court of Appeals for the D.C. Circuit struck down provisions of the rule.
As such, our costs recorded in any period may not reflect the actual level of cash benefits provided to pension plan participants. 56 AVISTA CORPORATION We revise the key assumption of the discount rate each year.
As such, our costs recorded in a period may not reflect the actual level of cash benefits provided to pension plan participants. 54 AVISTA CORPORATION We revise the key assumption of the discount rate each year.
We estimate that a 10 basis point increase in forward variable interest rates as of December 31, 2022 would increase the interest rate swap derivative net liability by $1.0 million, while a 10 basis point decrease would decrease the interest rate swap derivative net liability by $0.7 million.
We estimated that a 10 basis point increase in forward variable interest rates as of December 31, 2022 would have increased the interest rate swap derivative net liability by $1.0 million, while a 10 basis point decrease would decrease the interest rate swap derivative net liability by $0.7 million.
Price movements and/or a downgrade in our credit ratings could impact further the amount of collateral required. See “Credit Ratings” for further information.
Price movements and/or a downgrade in our credit ratings or other established credit criteria could impact further the amount of collateral required. See “Credit Ratings” for further information.
Environmental laws and regulations may restrict or impact our business activities in many ways, including, but not limited to, by: • increasing the operating costs of generating plants and other assets, • increasing the lead time and capital costs for the construction of new generating plants and other assets, • requiring modification of our existing generating plants, • requiring existing generating plant operations to be curtailed or shut down, • reducing the amount of energy available from our generating plants, • restricting the types of generating plants that can be built or contracted with, • requiring construction of specific types of generation plants at higher cost, and • increasing costs of distributing, or limiting our ability to distribute, electricity and/or natural gas. 66 AVISTA CORPORATION Compliance with environmental laws and regulations could result in increases to capital expenditures and operating expenses.
Environmental laws and regulations may restrict or impact our business activities in many ways, including, but not limited to, by: • increasing the operating costs of generating plants and other assets, • increasing the lead time and capital costs for the construction of new generating plants and other assets, • requiring modification of existing generating plants, • requiring existing generating plant operations to be curtailed or shut down, • reducing the amount of energy available from generating plants, • restricting the types of generating plants that can be built or contracted with, • requiring construction of specific types of generation plants at higher cost, and • increasing costs of distributing, or limiting our ability to distribute, electricity and/or natural gas.
The emissions performance standard prevents utilities from constructing or purchasing generation facilities, or entering into power purchase agreements of five years or longer duration to purchase energy produced by plants that, in any case, have emission levels higher than 1,100 pounds of GHG per MWh. The Washington State Department of Commerce reviews the standard every five years.
The emissions performance standard prevents utilities from constructing or purchasing generation facilities, or entering into power purchase agreements of five years or longer duration to purchase energy produced by plants that have emission levels higher than 925 pounds of GHG per MWh. The Washington State Department of Commerce reviews the standard every five years.
These transactions are eliminated in the presentation of total results for Avista Utilities and in the consolidated financial statements but are included in the separate results for electric and natural gas presented above. 54 AVISTA CORPORATION Results of Operations - Alaska E lectric Light and Power Company 2022 compared to 2021 Net income for AEL&P was $7.5 million for the year ended December 31, 2022, compared to $7.2 million for 2021.
These transactions are eliminated in the presentation of total results for Avista Utilities and in the consolidated financial statements but are included in the separate results for electric and natural gas presented above. 52 AVISTA CORPORATION Results of Operations - Alaska E lectric Light and Power Company 2023 compared to 2022 Net income for AEL&P was $8.9 million for the year ended December 31, 2023, compared to $7.5 million for 2022.
However, when power and natural gas costs exceed the levels currently recovered from customers, net cash flows 57 AVISTA CORPORATION are negatively affected.
However, when power and natural gas costs exceed the levels currently recovered from customers, net cash flows are negatively affected.
See further discussion of the energy resources risk policy below. Oversight of the operational risk management process is performed by the Environmental, Technology and Operations Committee of our Board of Directors and from senior management with input from each operating department. 72 AVISTA CORPORATION Climate Change Risk Multiple departments at the Company work to mitigate risks related to climate change.
See further discussion of the energy resources risk policy below. Oversight of the operational risk management process is performed by the Environmental, Technology and Operations Committee of the Board of Directors and from senior management with input from each operating department. Climate Change Risk Multiple departments work to mitigate risks related to climate change.
Negative amounts 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. Total electric revenues increased $139.7 million for 2022 as compared to 2021.
Negative amounts 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. Total electric revenues increased $25.3 million for 2023 as compared to 2022.
As of December 31, 2022, we had interest rate swap agreements outstanding with a notional amount totaling $50.0 million and we had deposited no cash as collateral for these interest rate swap derivatives.
As of December 31, 2023, we had interest rate swap agreements outstanding with a notional amount totaling $30.0 million and we had deposited no cash as collateral for these interest rate swap derivatives.
We believe that we have adequate capacity to issue first mortgage bonds to meet our financing needs over the next several years. 61 AVISTA CORPORATION Utility Capita l Expenditures We are making capital investments at our utilities to enhance service and system reliability for our customers and replace aging infrastructure.
We believe that we have adequate capacity to issue first mortgage bonds to meet our financing needs over the next several years. Utility Capita l Expenditures We make capital investments at our utilities to enhance service and system reliability for our customers and replace aging infrastructure.
The Company's Board of Directors has established a committee to oversee environmental issues and to assess and manage environmental risk. We monitor legislative and regulatory developments at different levels of government for environmental issues, particularly those with the potential to impact the operation of our generating plants and other assets.
The Company's Board of Directors has established a committee to oversee environmental issues and to assess and manage environmental risk. We monitor legislative and regulatory developments at different levels of government for environmental issues, particularly those with the potential to impact the operation of our generating plants and other assets, and our ability to provide service to natural gas customers.
Policies Related to Climate Change Legal and policy changes responding to concerns about long-term global climate changes, and the potential impacts of such changes, could have a significant effect on our business.
Policies and Other Impacts Related to Climate Change Legal and policy changes responding to concerns about climate changes, and the potential impacts of such changes, could have a significant effect on our business.
Oversight of our regulatory strategies and policies is performed by senior management and our Board of Directors. See “Regulatory Matters” for further discussion of regulatory matters affecting our Company.
Oversight of our 67 AVISTA CORPORATION regulatory strategies and policies is performed by senior management and the Board of Directors. See “Regulatory Matters” for further discussion of regulatory matters affecting the Company.
The approved rates are designed to increase annual base electric revenues by $38.0 million (or 6.9 percent), effective in December 2022, and $12.5 million (or 2.1 percent), effective in December 2023.
The approved rates were designed to increase annual base electric revenues by $38.0 million, or 6.9 percent, effective in December 2022, and $12.5 million, or 2.1 41 AVISTA CORPORATION percent, effective in December 2023.
Climate change adds uncertainty to existing risks that we have historically managed and mitigated. These efforts are reflected in electric and gas operations, investments in assets and asset reliability and resiliency across the Company’s operations. Power Supply staff, as a regular course of business, monitor items such as snowpack and broader precipitation conditions, patterns and modeled or predicted climate change.
Climate change adds uncertainty to existing risks that we have historically managed and mitigated. These efforts are reflected in electric and gas operations, investments in assets and asset reliability and resiliency across our operations. Power Supply staff monitor items such as snowpack and broader precipitation conditions, patterns and modeled or predicted climate change.
Idaho General Rate Cases and Other Proceedings 2021 General Rate Cases In September 2021, the IPUC approved the all party settlement agreement designed to increase annual base electric revenues by $10.6 million, or 4.3 percent, effective September 1, 2021, and $8.0 million, or 3.1 percent, effective September 1, 2022.
In September 2021, the IPUC approved the all party settlement agreement designed to increase annual base electric revenues by $10.6 million, or 4.3 percent, effective September 1, 2021, and $8.0 million, or 3.1 percent, effective September 1, 2022.
Washington State Building Codes In April 2022, the Washington State Building Code Council (SBCC) approved a revised energy code that requires most new commercial buildings and large multifamily buildings to install all-electric space heating. However, an amendment to the code does allow for natural gas to supplement electric heat pumps.
Washington State Building Codes In April 2022, the Washington State Building Code Council (SBCC) approved a revised energy code requiring most new commercial buildings and large multifamily buildings to install all-electric space heating. An amendment to the code allows for natural gas to supplement electric heat pumps.
The total estimated benefits of this credit, $27.6 million for electric customers and $12.5 million for natural gas customers, will be returned over a two-year period from December 2022 to December 2024. In addition, the order approved a separate tracking mechanism and tariff for purposes of recovering existing and prospective Colstrip costs.
The total estimated benefits of these credits, $27.6 million for electric customers and $12.5 million for natural gas customers, are being returned over a two-year period from December 2022 to December 2024. In addition, the order approved a separate tracking mechanism and tariff for purposes of recovering existing and prospective Colstrip costs.

… 337 more changes not shown on this page.

Other AVA 10-K year-over-year comparisons