Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Avista Corporation fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star, then one on your telephone keypad. As a reminder, this conference call is being recorded. If you require any further assistance, please press star, then zero. At this time, I would like to turn the conference over to Ms. Stacey Wenz. Thank you. Ma'am, please begin. Thank you. Good morning, everyone. Welcome to Avista's fourth quarter and fiscal year 2021 earnings conference call. Our earnings and our 2021 Form 10-K were released pre-market this morning. Both are available on our website. Joining me this morning are Avista Corp. President and CEO Dennis Vermillion, Executive Vice President, Treasurer and CFO Mark Thies, Senior Vice President, External Affairs and Chief Customer Officer Kevin Christie, and Vice President, Controller and Principal Accounting Officer Ryan Krasselt. Some of the statements that will be made today are forward-looking statements that involve assumptions, risks and uncertainties which are subject to change. For reference to the various factors which could cause actual results to differ materially from those discussed in today's call, please refer to our 10-K for 2021, which is available on our website. I'll begin by recapping the financial results presented in today's press release. Our consolidated earnings for the fourth quarter of 2021 were $0.71 per diluted share, compared to $0.85 for the fourth quarter of 2020. For the full year, consolidated earnings were $2.10 per diluted share for 2021, compared to $1.90 last year. Now I'll turn the discussion over to Dennis. Well, thanks, Stacy, and good morning, everyone. I think we can all agree that 2021 was certainly a memorable year. It's hard to believe that we've been living through this pandemic for nearly two years now. Today we're seeing some signs that we're moving toward establishing a new normal, and we're very excited about that. We're certainly not out of the woods quite yet. As we reflect on these challenging times, I wanted to take a second just to applaud our employees for making it possible to achieve all that we accomplished in 2021. They've really done a nice job. On the financial front, our 2021 earnings were in the upper half of our guidance range, primarily due to significant gains in our other businesses. Mark is gonna get into some of the details on that in a little bit later. I'd like to focus on some of our achievements on the operations front. In 2021, we finished installing all of our smart electric meters and natural gas modules across Washington State. Now our customers are accessing more real-time data so they can better manage their energy use. We have proactive high bill alerts or high energy alerts, where customers are notified if they could exceed their set energy budgets, which of course helps them eliminate surprises when their bill arrives. The smart meter data also provides more visibility into our system, which helps us run a more reliable and efficient power grid, detect and restore power outages more quickly, and provide customers with a higher level of service. Customer benefits like these helped us receive full cost recovery on one of our largest capital projects in company history. On the clean energy front, we filed our Clean Energy Implementation Plan in Washington, which provides the framework for achieving our clean energy goals. Also in 2021, we set a new aspirational natural gas goal of being carbon neutral by 2045, with a 30% reduction of greenhouse gas emissions by 2030. Two new power purchase agreements with Chelan County Public Utility District were entered into during 2021 and will add more renewable hydropower to our electric generating portfolio starting in 2024. Of course, this will help move us closer to achieving our clean electricity goals. We also announced a request for proposals, seeking power generation and demand management proposals to meet our clean energy goals. We also recently published Avista's 2021 corporate responsibility report to our Avista Corp. website. In the report, we provide a broad look at our operations and how we're fulfilling our commitments to our people, our customers, communities, and our shareholders. The website also provides links to Avista's reporting on a series of environmental, social and governance disclosures or ESG disclosures. The information we've shared demonstrates Avista's long-standing commitment to corporate responsibility, and I urge you to check it out. We've done a nice job with that. Avista's new non-regulated subsidiary, Avista Edge, is rolling out an internet broadband pilot in the city of Cheney, Washington, which is about 20 mi outside of Spokane. The Avista Edge patented technology offers a new turnkey, reliable, secure, high-speed internet device that's easy and cost-effective to deploy. As we partner with other utilities and internet service providers to deploy this solution, we hope it will bridge the gap in a widening digital divide that exists in many rural communities that struggle with high-speed internet access and connectivity that is so essential in our daily lives, and we saw that more than ever during the pandemic. Avista Edge builds upon Avista's rich history of innovation. With respect to regulatory filings, in January, we filed multiyear general rate cases in Washington. In October of 2021, we filed a general rate case in Oregon and expect rate recovery in the second half of 2022. We continue to await the regulatory process in these jurisdictions. In Idaho, a two-year rate case went into effect around September 1, 2021, and we expect to file another rate case in the first quarter of 2023. Looking ahead, we remain focused on continuing to prudently invest capital to maintain and update our infrastructure and provide reliable energy service to our customers. We are confirming our 2022 and 2023 earnings guidance with consolidated ranges of $1.93-$2.13 in 2022, and $2.42-$2.62 in 2023. This puts us on track to earning our allowed return in 2023. Lastly, earlier this month, the board increased our dividend by 4.1% to an annual dividend of $1.76 per share. This dividend increase, approved by the board of directors, marks the twentieth consecutive year the board has raised the dividend for our shareholders, and I believe it demonstrates the board's commitment to maximizing shareholder value. With that, at this time, I'll turn this presentation over to Mark. Thank you, Dennis, and good morning, everyone. Thanks for joining us this morning. Those of you that will see me coming up, either in person or on video, I have shaved off my playoff beard because there's a very slim chance that the Blackhawks will have any chance of making the playoffs this year. That's sad for me, but that's all right. For 2021, Avista Utilities contributed $1.79 per diluted share compared to $1.83 in 2020. This met our expectations, even though it was slightly below our guidance range for the utility. Our earnings decreased primarily due to increased operating expenses and depreciation expense. Those operating expenses really represented increased insurance costs, and IT costs and labor and benefits. Depreciation increased primarily just due, again, Dennis, as Dennis mentioned, we continue to invest in our system. It was really plant additions during the period. We have seen an economic recovery resulting in increased loads for non-decoupled customers, increased loads for everybody, but non-decoupled customers affect the earnings. We've also experienced increased power supply costs. We had, last year, lower hydro conditions. We had some drought conditions, and we also had extended hot weather and power price increases that caused our ERM in Washington to end up at a pre-tax expense of $7.7 million versus a benefit in 2020 of $6.2 million, which is a significant change year over year. With better-than-expected earnings at our other businesses, as Dennis mentioned, our consolidated earnings were consistent with our expectations and in the upper half of our guidance. Those businesses contributed $0.21 of earnings in 2021 compared to a $0.05 loss in 2020. Our earnings expectations, you know, included investment gains, and we just had stronger gains through a variety of our investments in those businesses. Going forward, we expect, as we've said over the last couple of times, you know, we expect those businesses to make money. We're investing in those, and we expect them to make money. We look for them to be in $0.04-$0.06 a share. We don't expect $0.21 a share consistently. We expect it to be more of, you know, a $0.05 per share earnings over the next couple of years, including the, you know, the investment we're making in the pilot that Dennis mentioned. We are gonna have some costs associated with that pilot that's included in our expectations. For our forecasted capital expenditures, you know, we expect to spend about $445 million in each of 2022 and 2023 in Avista Utilities. We expect AEL&P to be $14 million in 2022 and $13 in 2023. We expect to invest $15 million in our other businesses in 2022 and $14 million in 2023, so we continue to invest in those other businesses. Moving on to liquidity. At December 31, we had $82 million of available liquidity under our committed line of credit. In 2021, we issued $140 million of long-term debt and about $90 million in common stock. In the first quarter of 2022, we expect to issue $400 million of long-term debt because on April 1, we have a $250 million maturity. We also expect throughout 2022 to issue $120 million of stock. In 2023, adding some guidance to 2023, we expect to issue $110 million of long-term debt, we have a small maturity, and $110 million of equity of common stock to fund our expenditures. Moving on to guidance. You know, as Dennis mentioned, we're confirming our 2022 and 2023 consolidated guidance ranges of $1.93-$2.13 in 2022 and $2.42-$2.62 in 2023. Our guidance does assume timely and appropriate rate relief in all our jurisdictions in which we're filing cases that Dennis kind of walked through just a few minutes ago. Our 2022 and 2023 guidance ranges reflect the expected rate relief as a result of the Washington general rate cases and the Oregon general rate cases. In the second half of the year, Washington, really, it's an 11-month process. It'll be December before we'd have any expected impact there. In Idaho, we expect in the second half of 2023, really after 9/1 for 2023, rates can go into effect for Idaho. As he mentioned, we have a two-year rate case there. In addition to our rate relief, our guidance range reflects improved customer growth of about 1%-1.5% annually. We previously had been about 0.5%-1%, so a slight improvement in our customer growth, as well as we are seeing inflationary pressures. We see, you know, just over 5% of some cost increases in 2022, and we expect to return to a more normal level of inflation in 2023, and we'll have to manage our costs to get there, and we expect to do that. We expect Avista Utilities to contribute in the range of $1.81-$1.97 per share in 2022 and $2.30-$2.46 a share in 2023. The midpoint of our guidance range does not include any expense or benefit under the energy recovery mechanism. Our expectation for the ERM is in the expense position to a negative within the 50% customer and 50% company sharing band, which is expected to reduce earnings by about 7% in 2022. We expect authorized power supply costs for the ERM to reset in 2023 through the regulatory process and approximate actual power supply costs. We expect AEL&P to contribute in the range of $0.08-$0.10 per share for 2022 and 2023, and our other businesses to contribute $0.04-$0.06 per share in 2022 and 2023 as well. Our guidance generally includes only normal operating conditions and does not include unusual or non-recurring items until the effects are known and certain. For Avista Utilities and AEL&P, we also consider normal precipitation and hydroelectric generation for the year. Now I'll turn the call back to Stacey. Thank you. We are open for questions. Our first question or comment comes from the line of Julien Dumoulin-Smith from Bank of America. Your line is open. Hey, it's actually Cody Clark on for Julian. Good morning. Morning, Cody. Hi, Cody. Just to start, just wanted to confirm that earning your authorized ROE in 2023 minus structural lag assumes you receive full ask in the Washington rate case and others. Is that correct, or is there some percentage of ask that you're assuming in that 2023 number? Just a second part to that question is focusing on the ROE that was requested in the Washington rate case. You know, we've seen authorized in the 9.4%-9.5% range, even for some of the multi-year rate plans that have been filed to this point. Just wondering what gets you comfortable with that 10.25% ask. Yeah. Great. Thanks, Cody. This is Kevin Christie. Good morning. First question that you asked was what gets us comfortable with- The percentage of our total ask. The percentage of total ask. Thank you, Mark. We typically file and then find ourselves at either a settling point or a litigated point in that 60%-65%. We do not need, we do not expect to receive our full ask, and that's not what is required for us to get to our authorized return. That's the typical number, and I would expect to be somewhere in that range in the first year of the rate plan, and the second year will be something a little bit higher because of how the rate plans work now in Washington. Closer to the mid-70s is what we'll need to get to our authorized return in the second year. Got it. Okay. The 242-262 assumes, you know, somewhere typically 60%-65% of the total ask, therefore Yeah. Yeah, that's what we've mentioned in the past. Okay. I would say that's true again this time around. Got it. Okay. Just thinking about the bridge from 2022 - 2023 guidance, is there anything else that I should be thinking of outside of rate relief that kind of gets you to that consolidated 242-262 number? Or is it really just, you know, rate relief? Well, there's a couple of things. Kevin just walked through the Washington case. We also expect to get into 2023. We will file in the first quarter or expect to file in the first quarter or late second quarter in Idaho because our current Idaho case rolls off September 1, 2023. What we would expect as we continue to deploy capital and to serve our customers' growth rate, we will file in Idaho, and we do have an Oregon case as well. It's not just Washington. It's not solely Washington. We still have to file in Idaho, and we have to complete the Oregon case as well. For Avista Utilities, we'll file in Alaska, and that's already incorporated in there for the Alaska case we'll file in August. Also, Cody, you know, we do also have customer growth. We do also have some inflation pressures. Those are working against each other as customer growth is good, you know, for the earnings, and that helps us, and then inflationary pressures are negative. We will have to, you know, implement some cost management as, you know, depending on how high inflation is. We do expect to manage our cost, you know, to have a reasonable level of cost for our customers that we filed in our rate case. It's not just solely- Okay. Got it. It's not solely rate relief. There are a couple other items that help us out there. Right. Okay. Okay. Just the last one, if I can. Just curious, you know, if you were to receive an order, come to a settling point in the rate cases that, you know, you'll have in front of you, is there any levers that you could pull? Kind of in the interim during the multi-year rate plan that would allow you to earn your authorized. For example, if you got maybe a little bit less than your assumption around 60%-65%, is there anything that you could do to get back to that authorized ROE? Or is it kind of, you know, the next shot we should be thinking about is when you file for the next multi-year rate plan? Again, you're looking solely at Washington. We have other jurisdictions that, you know, if all of the jurisdictions come in slightly lower, you know, we would have to look at that. Can we look at, you know, managing our costs? We try to do that regularly anyway. That's not a new thing for us. We try to manage our costs all the time to reasonable levels. But we could look at, you know, we could look at that as a potential. We also have other, you know, other opportunities as we move forward. We expect to, you know, join the Energy Imbalance Market here in the first quarter of this year. As that moves forward, we've seen other parties. We have an amount embedded in our rates that we need to recover for our customers or benefit our customers. Above that, it can, if we are successful, it can, you know, go through power supply costs and through the ERM, which can benefit earnings and customers depending on what level of sharing we have. There are other things we can do to manage, but most of it is cost management. We do that consistently, you know, every year. That's not a new thing for us. If we were to get an order that was, you know, less, if it was significantly less, then no, we would just have to report out we have challenges because we didn't get a fair recovery of our costs. We don't anticipate that at all. We expect and we've seen the past, you know, orders we've gotten, we believe have been fair orders from our commissions most recently, you know, just last fall in Washington. Got it. Understood. Thanks for the time. I'll jump back in the queue. Thanks, Cody. Thank you. Our next question or comment comes from the line of Brian Russo from Sidoti. Your line is open. Hi. Good morning. Hi, Brian. Brian. Hey, just you know on the ERM and you know what are you seeing in the marketplace right now you know that you'd call out you know $0.07 of expense or the 50/50 you know sharing? Is it just higher gas prices or below normal hydro conditions? Gas prices to power prices, Brian. It's, you know, it's a complicated formula. I can't give you the specifics, but generally higher gas prices. We've seen slightly lower on the hydroelectric generation, but not much. We're in the mid-90s on snowpack, and so it's hard to say that that's going to come off any different at this point. We don't know. As you remember, you know, as you followed us a long time, it depends how it melts off, right? We won't know that till later in the spring. You know, our snowpack seems reasonable. It's primarily gas prices and power prices that spark spread differential. Mm-hmm. Understood. Just to be clear, the rate increase that you're requesting with the multi-year rate increases you're requesting in Washington, these exclude any changes in power costs, right? Because that is a totally separate docket. Or do they kind of get wrapped up and rolled up together? Yeah. Brian, let me jump in there. This is Kevin. Thanks for the question. What we do with our rate cases is we file with a power supply update with the case. What's typical in Washington is 60 days prior to the effective date of the new rates, we do a reset based on what we know then for power supply costs. What we've asked for in this case, since we have our first multi-year under the legislation, is the ability to do a reset in advance of the second year of the rate plan if we're outside a 10% range. That's a proposal for the commission. We don't know that they'll accept that, but we've asked for that in this case, given the uncertainty of power supply costs. Got it. Remind me also, are customers in a position for a refund based on, you know, prior years of being in a benefit position in the ERM? Or has that all been settled out and, you know, refunded and balanced out, so to speak? Yeah, we continue to recalculate periodically. At this point in time, given the situation that Mark describes, I believe that customers owe us. The accounting is such that there's been a deferral and that will go back through rates as we move forward. This is just a technicality in this rate case, but it seems as if you need separate approval by the commission to authorize the utilization of the credits to offset, you know, customer bills and that, you know, Avista cash flows and credit metrics would also be considered by the commission in that decision. Is that just kind of a formality similar to the last rate case? Yeah. It's very similar. The commission can use at their discretion those tax credits that we've made available for customers. If we settle the case, for example, we would expect to make a recommendation through the parties that settle with us on how to best use those tax credits to hopefully help lower the impact of the case to our customers. If we are unable to settle and it goes through a litigated case, they would do similar to what they did last time, is make a decision. They are very well informed on how those decisions could impact our credit metrics, et cetera. Okay. Then quickly on the 2023 guidance of $0.20 range. I mean, it's fairly wide, obviously, because of the scenarios and outcomes of the rate case. Is a way to look at it like your full ask is the high end, your midpoint is kind of that, you know, 60%-65% range and a more, you know, comparable or current, you know, ROE in the 9.4% range? No, I wouldn't look at it that way at all. Our range is really built more on the variability of power supply in the ERM, and the ERM can fluctuate up and down and then, you know, managing our earnings. Yes, I would say at the midpoint level, we expect to get a fair recovery. I mean, Kevin's boxed out or laid out the 60%-65%. It could be anywhere, you know, it, you know, even higher. We've had results in, you know, 70% range too, and that's okay. That's encompassed in our range. But I wouldn't say the top end is the ask and the bottom end is if we got, you know, a bad order at all. That's not. It's more guiding to the midpoint. Then we have some variability around the ERM and some variability around the recovery of our cost in the rate case. We can again offset some of that with our cost management. Then the other thing I wanna make sure that I reference, you know, with respect to those tax customer credits, we don't believe if they take everything that we offered for tax customer credits, it does not hurt. We don't believe it hurts our cash flows to where it would change our rating agency metrics at all. We believe we still have strong credit metrics. This is just an opportunity to offset some of the impact in an interim period for the, you know, for in a short period for customer bills. We believe that if the commission accepted 100% of what we offered, that our credit metrics are still fine. Brian. Okay, and one. Sorry, Brian, I need to jump in and real quick correct something I said before. We are in the net liability position in the ERM still. I had mentioned that customers owe us, but we're in the net liability position. I just want to make sure that's clear. Okay. Yeah. Thank you for that. Just in the past, I think you've kind of projected, I think a 4%-6% EPS growth rate off of, you know, whatever the 2023, you know, earnings power settles out to, and that would match up to your 5% rate base CAGR. Is that still kind of the way to look at the long-term growth? We didn't put that in there necessarily, but yes, we would expect that to continue. Once we get to earning our allowed return, assuming we still have the opportunities to deploy the capital that we've seen, and we don't see any reason why that wouldn't be the case at this point, we would expect to grow that 4%-6% for earnings. From 2024- Got it. Thank you very much. Brian. Thank you. Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star then one on your telephone keypad. Our next question or comment comes from the line of Sophie Karp from KeyBanc. Your line is open. Hi. Good morning, guys. Thank you for taking my question. Good morning, Sophie. I have a couple of questions. Thanks. You left your CapEx forecast unchanged for a few years out, right? Given the rampant inflation we are seeing, can you describe maybe your level of confidence in that particular number, right? And how can it move up or down? Or kind of what can we expect there if the inflationary pressures persist as they are? Well, you know, from a CapEx perspective, to the extent the inflationary pressures, we have seen some in steel and some of our other materials. We've seen inflationary pressure. What it will mean is we would expect to try to get to our CapEx number, spend our CapEx number, but we may get a little bit less work done, you know. With the supply chain issues, we, you know, they would still be projects that we believe make sense, right? That for our customers and benefit our customers overall. It may be slightly less work for some of the inflation. With the supply chain, we really haven't. It's just caused us to really forecast out our ask for the materials with just a longer lead time. We have not really seen that we've not been able to do projects. I would say we have a fairly strong confidence level that we'll be able to, you know, get the capital projects done at a reasonable level, you know, consistent with the expectations we put out dollar-wise. If I'm hearing you right, what you're saying is that you're going to manage to that number, and if you have to, trim maybe your plans to fit in that number, that's what you would do. That would be our expectation. Again, we want to make sure that the projects, if there's a higher cost basis, that it still makes sense for the customer. We may evaluate a certain project and not do it if it had too much cost, it wasn't economic for the customers. For the most part, we haven't really seen that. I don't anticipate that being an issue. Okay. Thank you. My other question was on kind of the ERM mechanism that you're looking to I guess reset, right? Also you're joining the Energy Imbalance Market where you, at the same time, if I'm hearing your comment correctly, expect to benefit from it in the framework of the existing ERM mechanism, right? Can you help us maybe reconcile these positions? What kind of a benefit should you realistically expect from joining the EIM? We're just really starting that market. I'm, I-- you know, what we have seen, we have an embedded benefit in our regulatory authorization of being able to join the ERM that we need to provide a benefit through that process to our customers. That's really the target that we expect to get. That doesn't necessarily impact earnings at all. You know, if we don't achieve it could be negative that would run through the ERM. You know, we have seen other companies in our region join that market and have been able to demonstrate some benefit. It's a pretty efficient market, and we think there'd be an opportunity there. That's completely different than resetting the ERM, as Kevin described, when we do our power supply update in a general rate case, we reset our power supply cost. As part of that, as we go forward, we will look at. You know, a track record of what we've done in the Energy Imbalance Market, and the commission may update that from time to time. We haven't even started yet. We don't start until March of this year, so I can't really predict or we can't predict that we're gonna have any increased benefit or not with respect to the ERM. So that's still an unknown, Sophie. I can't really give you- Mm-hmm. any impact there, but it'll be part of our process as we move forward. Got it. Very helpful. Thank you. The last one, if I may. With the multi-year rate case now going on right in one of your largest jurisdiction, would you eventually, like assuming you have that resolved, either through settlement or litigation, be open to giving guidance beyond three years outlook, I guess? Maybe some of your peers are given longer-term horizon outlook, five years out, et cetera. Is that something that you think you would be able to do if you have more certainty on the rate? I think what we would like to do is first get to earning our allowed return. I mean, we've had a little bit of a road here to get there, and we wanna make sure that we get there. As well as this is, as Kevin mentioned, this is our first go with the new legislation on the multi-year rate cases. To the extent that we get through these processes in a reasonable fashion and we have a little bit more certainty, we can consider looking out for further guidance. At this point, all we've done is say, once we get beyond earning our allowed return, we would expect to grow kind of that 4%-6% range without giving specific guidance. We have given an expectation of growth there beyond 2023. All right. We'll just have to see how we can work through those processes. Thanks so much. Thanks, Sophie. Of course. Thank you. Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks. Thank you. I want to thank you all for joining us today, and we appreciate your interest in Avista. Have a great day. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.