UNITED STATES | ||
SECURITIES AND EXCHANGE COMMISSION | ||
Washington D.C. 20549 | ||
FORM 8-K | ||
CURRENT REPORT | ||
PURSUANT TO SECTION 13 OR 15(d) OF | ||
THE SECURITIES EXCHANGE ACT OF 1934 | ||
Date of Report (Date of earliest event reported): December 12, 2016 | ||
AVISTA CORPORATION | ||
(Exact name of registrant as specified in its charter) | ||
Washington | 1-3701 | 91-0462470 |
(State of other jurisdiction of incorporation) | (Commission file number) | (I.R.S. Employer Identification No.) |
1411 East Mission Avenue, Spokane, Washington | 99202-2600 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant's telephone number, including area code: | 509-489-0500 | |
Web site: http://www.avistacorp.com | ||
(Former name or former address, if changed since last report) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 7 – Regulation FD Disclosure
Item 7.01 Regulation FD Disclosure.
On December 13, 2016 and December 14, 2016, management of Avista Corporation (Avista Corp. or the Company) will be participating in meetings with investors and analysts in New York, New York. The same business update presentation will be used at all of the meetings. A copy of the business update presentation is furnished as Exhibit 99.1 and is available in the “Investors” section of Avista Corp.'s website at http://investor.avistacorp.com/phoenix.zhtml?c=97267&p=irol-calendarpast.
As part of this update, Avista Corp. expects to confirm earnings guidance for 2016. The 2016 earnings guidance was included in Avista Corp.'s third quarter of 2016 earnings release furnished on Form 8-K on November 1, 2016. The 2016 earnings guidance is subject to the risks, uncertainties and other factors set forth or referred to in such earnings release, the Company's annual report on Form 10-K for the year ended December 31, 2015 and the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2016.
The information in this report, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Business update presentation dated December 2016, which is being furnished pursuant to Item 7.01.
The inclusion in this Current Report or in Exhibit 99.1 of a reference to Avista Corp.'s Internet address shall not, under any circumstances, be deemed to incorporate the information available at such Internet address into this Current Report. The information available at Avista Corp.'s Internet address is not part of this Current Report or any other report furnished or filed by Avista Corp. with the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
AVISTA CORPORATION | ||
(Registrant) | ||
Date: | December 12, 2016 | /s/ Marian M. Durkin |
Marian M. Durkin | ||
Senior Vice President, General Counsel, | ||
Corporate Secretary and Chief Compliance Officer | ||
Positioned for performance:
An overview of Q3 2016 and beyond
December 2016
NYSE: AVA www.avistacorp.com
All forward-looking statements are Avista management’s present expectations of future
events and are subject to a number of factors and uncertainties that could cause actual
results to differ materially from those described in the forward-looking statements.
For more information on such factors and uncertainties, consult Avista’s most recent form
10-K and 10-Q, which are available on our website at www.avistacorp.com
Disclaimer
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Strong and stable utility core
Regulated electric and natural gas operations
Serves customers in Washington, Idaho and Oregon
Contributes about 95% of earnings
Regulated electric operations
Serves customers in City and Borough of Juneau
Avista Utilities
Alaska Electric Light
& Power Company
(AEL&P)
Long history of service, trust,
innovation and collaboration
Photo: Spokane River Upper Falls
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Steadily building long-term value
Reliably building value for our customers,
investors, communities and employees
Projecting long-term earnings and dividend growth of 4% to 5%
Avista Utilities
AEL&P
Strategic
Investments
5% to 6% rate base growth through utility capital investments
□ Upgrading infrastructure
□ Grid modernization
Customer and load growth ~1%
Strong near-term rate base growth through investment in generation
Customer and load growth ~1%
Planning to bring natural gas to Juneau
Developing platforms for future growth
□ Targeting expanded natural gas services via LNG*
□ Exploring data science and advanced analytics
□ Investing in emerging technologies
*LNG: Liquefied natural gas
Avista Utilities
Significant investments in utility infrastructure
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Diverse customer base
□ 30,000 square mile service territory
□ Service area population 1.6 million
– 375,000 electric customers
– 335,000 natural gas customers
Strong customer focus
□ 90% percent or better customer satisfaction
ratings every year since 1999
□ Developing key customer initiatives
Invested in our communities
□ More than $1.5 million per year in charitable
donations and over 48,000 volunteer hours
from our employees
Providing safe and reliable service for 127 years
Solid foundation and continued commitment to innovation
Information as of Dec. 31, 2015
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A responsible mix of generation
Hydro
48%
Biomass
2%
Wind
6%
Coal
9%
Natural Gas
35%
Avista Utilities Electricity Generation Resource Mix*
Dec. 31, 2015
Strategy is to control a portfolio of resources that responsibly meet our long-term
energy needs
Long resources through 2020; plan to add 96 MW natural gas peaker by the end of 2020
Exceeds Washington state’s 15% Renewable Portfolio Standard for the next 20 years
Founded on clean, renewable hydropower
*Based on maximum capacity
Excludes AEL&PPost Falls Dam, Idaho
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$136 $131
$151
$178
$71
$52
$54
$33
$55
$51
$53 $56
$50
$43
$43 $42
$49
$47
$56 $45
$48
$29
$30 $39
$6
$22
$18 $12
$415
$375
$405 $405
2015 2016 2017 2018
Avista Utilities Capital Expenditures**
($ millions)
Environmental
Other*
Gas
Customer Growth
Enterprise Technology
Generation
T&D
Projected
Significant investments to upgrade all systems
* Other includes Facilities and Fleet
** Excludes capital expenditures at AEL&P of $13 million in 2015, and projected capital
expenditures of $17 million in 2016, $5.3 million in 2017 and $5.5 million in 2018
5% to 6% rate base growth
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Investing in our utility
Nine Mile Falls Rehab
Little Falls Plant Upgrade
Grid Modernization
Aldyl A Natural Gas
Pipe Replacement
Advanced Metering
Infrastructure (AMI)
Preserving and enhancing service reliability
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Driving effective regulatory outcomes
Continued recovery of costs and capital investments
Washington
Feb. 19, 2016, filed an electric and
natural gas rate request with a
proposed 18-month rate plan designed
for new rates effective Jan. 1, 2017,
and Jan. 1, 2018. Under this plan, we
would not file a rate case for new rates
to be effective prior to July 1, 2018.
Request designed to increase annual
electric revenues by 7.6% or
$38.6 million, and annual natural gas
revenues by 2.8% or $4.4 million
effective Jan. 1, 2017.
The request also includes a second-
step increase on Jan. 1, 2018,
designed to increase electric revenues
by 3.9% or $10.3 million, and natural
gas revenues by 1.0% or $0.9 million,
for the January through June 2018
period.
Request based on 48.5% equity ratio
and a 9.9% return on equity.
Idaho
Oct. 24, 2016, filed an all-party
settlement agreement designed to
increase annual electric base revenues
by 2.5% or $6.3 million; plus continued
recovery of $4.1 million of costs related
to Palouse Wind Project through the
PCA mechanism.
Based on a 9.5% return on equity with
a 50.0% common equity ratio.
New rates would be effective
Jan. 1, 2017.
Oregon
Nov. 30, 2016, filed a natural gas rate
request to increase revenues by 9% or
$8.5M .
Request based on 50% equity ratio and
9.9% return on equity.
The PUC has up to 10 months to
review and rule; if approved, new rates
would take effect no later than
Oct. 1, 2017.
Alaska
Sept. 16, 2016, filed an electric general
rate request to increase revenues by
8.1% or $2.8 million.
An interim rate increase of 3.86% or
$1.3 million was effective
Nov. 23, 2016.
An additional $2.9 million annually from
interruptible service was approved to
reduce overall revenue requirement
from $5.7 million to $2.8 million.
Request based on a 58% equity ratio
and a 13.8% return on equity.
The RCA has approximately 15 months
to rule on the permanent rate increase.
Alaska Electric Light & Power Company
(AEL&P)
Growing the utility core
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Oldest regulated electric utility in Alaska, founded in 1893
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Serves 17,000 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 structure of 53.8% equity and an authorized
return on equity of 12.875%
Diversifying our utility footprint
Juneau, Alaska
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Opportunity to drive additional growth in Alaska
Planning to bring natural gas to Juneau
Continuing to work through the key issues
□ Seek low-cost debt financing through mechanisms
provided by Alaska Industrial Development & Export
Authority (AIDEA)
□ Exploring alternative ways to pay for customers’
conversion costs
Next Step
□ File and obtain from the regulatory commission of
Alaska a non-conditional Certificate of Public
Convenience and Necessity Juneau, Alaska
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Strategic Investments
Developing platforms for future growth
Expand natural gas services via LNG
□ Salix (subsidiary)
– Generation – diesel substitution
– Marine fueling
– Rail fueling
Targeted investments
□ Energy Impact Partners
– Private equity fund that invests in emerging technologies,
products, services, and business models throughout
electricity supply chain with a collaborative, strategic
investment approach
□ Plum Energy
– Small LNG project investments
□ TROVE
– Leverage AMI, consumer and other data through predictive
analytics
Creating new growth platforms
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Financial
Performance Metrics
Prudent balance sheet and liquidity
Debt
52.7%
Equity
47.3%
Consolidated Capital Structure
Sept. 30, 2016
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Additional long-term debt maturities beyond 2026 not shown
*In connection with this pricing, we cash-settled seven interest rate swap contracts
(notional aggregate amount of $125 million) and paid a total of $54 million.
$139.8 million of available liquidity at Avista Corp. as of Sept. 30, 2016
Executed a $70.0 million term loan agreement with an expiration date of Dec. 30, 2016, which was used
to repay a portion of $90.0 million bond maturity in August
In August priced $175 million of Avista Corp. first mortgage bonds with a coupon of 3.54%* and maturity
date of December 2051. Expect to issue December 2016
Issued 1.6 million shares of common stock under our sales agency agreements for total net proceeds of
approximately $66 million as of Sept. 30, 2016
$90
$273
$90
$52
$250
$14
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
No significant maturities until 2018
($ millions)
$1.32
$1.85
$3.10
$1.97
2012 2013 2014 2015 2016
Guidance
Continuing Operations Ecova (DiscOp)
$1.96-$2.16
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Continued long-term earnings growth
Total Earnings per Diluted Share
Attributable to Avista Corporation
Business Segments Q3 2016 Q3 2015
Avista Utilities $0.20 $0.20
AEL&P $0.01 $0.01
Other $(0.02) -
TOTAL Diluted EPS $0.19 $0.21
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2016 Earnings Guidance
Avista Utilities $1.91 - $2.05
AEL&P $0.09 - $0.13
Other $(0.04) - $(0.02)
Consolidated $1.96 - $2.16
Guidance Assumptions
Our outlook for Avista Utilities assumes, among other variables, normal precipitation and temperatures for the
remainder of the year.
Our outlook for AEL&P assumes, among other variables, normal precipitation, temperatures and hydroelectric
generation for the remainder of the year.
Our guidance range for Avista Utilities encompasses expected variability in power supply costs and the
application of the ERM to that power supply cost variability.
The midpoint of our guidance range for Avista Utilities does not include any benefit or expense under the ERM.
In 2016 we expect to be in a benefit position under the ERM.
Growth for 2016
*Current quarterly dividend of $0.3425 annualized
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Dividend growth expected to keep pace with long-term earnings growth
Stable and growing dividend
$1.16
$1.22
$1.27
$1.32
$1.37
2012 2013 2014 2015 2016*
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An attractive investment
Strong and responsible core utility
□ Investing substantially to modernize infrastructure and
upgrade systems
□ Steady returns and attractive dividend yield*
□ One of the greenest utilities in the U.S.**
Focus on utility growth
□ Selective acquisitions
□ Developing new products and services and supporting
economic development throughout service area
□ LDC opportunity in Juneau
Positioning for the future
□ Strategically investing in ways to extend access to
natural gas via LNG, leverage AMI data through
applied analytics, gain insight into leading-edge
energy solutions
□ Track record of innovation (e.g. Itron, ReliOn, Ecova)
* Dividend yield 3.3% based on stock price as of Sept. 30, 2016
** Source: Benchmarking Air Emissions of the 100 Largest Power Producers in the United States, NRDC, July 2015
LDC: Local distribution company
Photo: Cabinet Gorge Dam
Reliably building value for
our customers, investors,
communities and employees
We welcome your questions
Company Contact
Lauren Pendergraft, Investor Relations Manager
509-495-2998
Lauren.pendergraft@avistacorp.com
www.avistacorp.com
Photo: Huntington Park, Spokane, Wash.
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