Avista Corporation · NYSE:AVA
Avista — 2019 AGA Financial Forum
31 slides from Avista's conference presentation, May 20, 2019
Slide 1: Positioned for performance: 2019 and beyond
Exhibit 99.1 Positioned for performance: 2019 and beyond 2019 AGA Financial Forum Fort Lauderdale, Florida May 21-23, 2019 NYSE: AVA www.avistacorp.com
Slide 2: Disclaimer
Disclaimer All forward-looking statements in this presentation are based on underlying assumptions (many of which are based, in turn, upon further assumptions). These statements are subject to a variety of risks, uncertainties and other factors. Most of these factors are beyond our control and may h
Slide 3: Avista at a glance
Avista at a glance . Incorporated in the territory of Washington in 1889 . Primarily an electric and natural gas utility . At the end of 2018, employed 1,766 people at Avista Utilities and 260 in our subsidiary businesses (including Alaska Electric Light & Power) . 2018 Operating revenue: $1.4 billi
Slide 4: Our focus in 2019
Our focus in 2019 . Avista Corp and Hydro One filed termination of Merger Agreement on Jan. 23, 2019 . Received termination fee of $103 million from Hydro One . Remain focused on running a great utility and providing reliable energy service to our customers . Invest prudent capital in our utility in
Slide 5: Resetting expectations that drive performance
Resetting expectations that drive performance . Annual earnings growth* □ Approximately 9% to 10% annually from 2020 through 2022 □ Projecting long-term earnings growth of 4% to 5% following 2022 . Avista Utilities expected return on equity (ROE) approximately 7.5% for 2019 . 2019 structural costs a
Slide 6: Net Income (Loss) and Diluted EPS
Net Income (Loss) and Diluted EPS ($ in thousands, except per-share data) Q1 2019 Q1 2018 Net Income (Loss) by Business Segment attributable to Avista Corp. Shareholders Avista Utilities $111,901 $55,540 Alaska Electric Light and Power Company $3,552 $3,772 Other $341 $(4,422) Total Net Income attri
Slide 7: Investments to upgrade our systems
Investments to upgrade our systems 5% to 6% rate base growth $428 $21 $405 $405 $405 $405 Failed Plant & $15 $14 $17 $16 Operations $48 $89 $69 $53 $49 Customer Requested $53 $73 $63 $51 $57 Performance & $54 $49 Capacity $37 $46 $66 $68 Customer Service, Quality $79 $94 $72 & Reliability $89 Mandat
Slide 8: Driving effective regulatory outcomes
Driving effective regulatory outcomes Timely and adequate recovery of costs and capital investments Washington Idaho Oregon . March 15, 2019, filed request designed to . Dec. 28, 2017, the Idaho Commission increase annual base revenues by $6.7 . Apr. 30, 2019, filed two-year rate plan approved a mul
Slide 9: Avista's commitment to renewable energy
Avista’s commitment to renewable energy Our Commitment . Carbon-neutral supply of electricity by the end of 2027 . Serve customers with 100% clean electricity by 2045 Our History . Among the lowest carbon emitting utilities in the nation* Long history of commitment to . Founded on clean, renewable h
Slide 10: Western Energy Imbalance Market
Western Energy Imbalance Market . Real-time energy market should allow Avista to further integrate renewable generation on the system. . Avista estimates the total cost of joining the EIM to be approximately $25 million for both capital and operating expense over the three-year implementation period
Slide 11: Washington Senate Bill 5116 (Clean Energy) Status
Washington Senate Bill 5116 (Clean Energy) Status . Part of the Governor’s “Clean Energy” legislation, along with several other measures intended to reduce greenhouse gas emissions . Signed into law by the Governor on May 7, 2019 Energy Resources . Must eliminate the allocation of coal-fired resourc
Slide 12: 2019 Earnings Guidance
2019 Earnings Guidance 2019 Earnings Guidance Avista Utilities $2.72 $2.86 AEL&P $0.09 $0.13 Other $(0.03) $(0.01) Consolidated $2.78 $2.98 Guidance Assumptions . Our guidance for Avista Utilities includes $1.01 per diluted share for the termination fee received from Hydro One and the paymen
Slide 13: A solid investment
A solid investment . Strong and responsible core utility □ Investing substantially to modernize infrastructure and upgrade systems □ Committed to reducing current regulatory timing lag by 2022 □ Steady returns and attractive dividend yield Better energy for life…. □ Committed to renewable energy and
Slide 14: We welcome your questions
We welcome your questions Company Contact John Wilcox, Investor Relations Manager 509-495-4171 john.wilcox@avistacorp.com www.avistacorp.com Photo: Huntington Park, Spokane, Wash. 14
Slide 15: Avista Corporation Appendix
Avista Corporation Appendix 15
Slide 16: Our Values
Our Values trustworthy Our word is reliable; we do what is right. We continuously improve and find better innovative ways to get things done. We are respectful and we are at our best collaborative when working together to achieve results. 16
Slide 17: Strong and stable utility core
Strong and stable utility core Avista Utilities . Regulated electric and natural gas operations . Serves customers in Washington, Idaho and Oregon . Contributes about 95% of earnings Alaska Electric Light & Power Company Our Customers | Our People (AEL&P) Perform | Invent . Regulated electric operat
Slide 18: Avista Utilities
Avista Utilities Significant investments in utility infrastructure 18
Slide 19: Avista Utilities Rate Base
Avista Utilities Rate Base Estimated Rate Authorized Authorized Base as of Overall Authorized Common March 2019 Rate of Return on Equity Jurisdiction and service ($ in millions) (1) Return Equity Ratio Washington electric (2) $1,627 7.50% 9.5% 48.5% Washington natural gas (2) 363 7.50% 9.5% 48.5% Id
Slide 20: Solid foundation and continued commitment to innovation
Solid foundation and continued commitment to innovation Providing safe and reliable service for 130 years . Diverse customer base □ 30,000 square mile service territory □ Service area population 1.7 million – 395,000 retail electric customers – 362,000 retail natural gas customers . Strong customer
Slide 21: A responsible mix of generation
A responsible mix of generation Founded on clean, renewable hydropower . Strategy is to control a portfolio of resources that responsibly and affordably meet our long-term energy needs with carbon neutral by 2027 and 100% clean by 2045 . Filed last electric Integrated Resource Plan in August 2017, p
Slide 22: Alaska Electric Light & Power Company
Alaska Electric Light & Power Company Growing the utility core 22
Slide 23: Diversifying our utility footprint
Diversifying our utility footprint Oldest regulated electric utility in Alaska, founded in 1893 . Serves 16,000 electric customers in the City and Borough of Juneau, meeting nearly all of its energy needs with hydropower . One of the lowest-cost electric utilities in the state . Approved capital str
Slide 24: Growth outside core utility
Growth outside core utility Strategic Investments Developing platforms for future growth 24
Slide 25: Creating new growth platforms
Creating new growth platforms . Targeted investments □ Overall plan to invest $19 million in 2019, $9 million in 2020 and $11 million in 2022 □ Energy Impact Partners – Private equity fund that invests in emerging technologies, services, and business models throughout electric supply chain with a co
Slide 26: Financial Performance Metrics
Avista Corporation Financial Performance Metrics 26
Slide 27: Financial Performance
Financial Performance Total Earnings per Diluted Share Attributable to Avista Corporation $3.10 $2.15 $1.97 $2.07 $1.79 $1.76 2014 2015 2016 2017* 2018* Q1 2019** Continuing Operations Ecova (DiscOp) *2018 earnings reduced by $0.04 per diluted share and 2017 earnings reduced by $0.19 per diluted sha
Slide 28: Prudent Balance Sheet and Liquidity
Prudent Balance Sheet and Liquidity $220.9 million of available liquidity at Avista Corp. as of March 31, 2019 . In 2019, we expect to issue approximately $165 million of long-term debt and up to $50 million of common stock Upcoming debt maturities Consolidated Capital Structure ($ millions) March 3
Slide 29: Attractive and growing dividend
Attractive and growing dividend Targeting 60%-70% Payout Ratio by 2022 $1.55* 1.49 $1.43 $1.37 $1.32 2015 2016 2017 2018 2019 *Current quarterly dividend of $0.3875 annualized 29
Slide 30: Risks, Uncertainties and Other Factors That Could Affect Future Results
Risks, Uncertainties and Other Factors That Could Affect Future Results Forward-looking statements are subject to a variety of risks, uncertainties and other factors. Most of these factors are beyond our control and may have a significant effect on our operations, results of operations, financial co
Slide 31: Risks, Uncertainties and Other Factors That Could Affect Future Results
Risks, Uncertainties and Other Factors That Could Affect Future Results work force issues, including changes in collective bargaining unit agreements, strikes, work stoppages, the loss of key executives, availability of workers in a variety of skill areas, and our ability to recruit and retain emplo