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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Summary of Ratio of Depreciation to Average Depreciable Property and Average Service Lives for Utility Plan in Service

For utility operations, the ratio of depreciation provisions to average depreciable property was as follows for the years ended December 31:


	2023			2022			2021
Avista Utilities		3.52	%		3.50	%		3.54	%
Alaska Electric Light and Power Company		2.78	%		2.78	%		2.77	%

The average service lives for the following broad categories of utility plant in service are (in years):


	Avista Utilities		Alaska Electric Light and Power Company
Electric thermal/other production		26		41
Hydroelectric production		79		42
Electric transmission		50		43
Electric distribution		40		39
Natural gas distribution property		44	N/A
Other shorter-lived general plant		8		18

The gross balances of the major classifications of property, plant and equipment are detailed in the following table as of December 31 (dollars in thousands):


	2023		2022
Avista Utilities:
Electric production	$	1,498,398	$	1,593,795
Electric transmission		1,059,389		994,709
Electric distribution		2,383,201		2,236,376
Electric construction work-in-progress (CWIP) and other		394,711		376,981
Electric total		5,335,699		5,201,861
Natural gas underground storage		59,994		58,072
Natural gas distribution		1,539,467		1,452,637
Natural gas CWIP and other		91,492		88,264
Natural gas total		1,690,953		1,598,973
Common plant (including CWIP)		759,498		744,173
Total Avista Utilities		7,786,150		7,545,007
AEL&P:
Electric production		118,817		106,390
Electric transmission		22,827		22,856
Electric distribution		32,322		29,269
Electric CWIP and other		8,552		12,295
Electric total		182,518		170,810
Common plant		10,340		10,018
Total AEL&P		192,858		180,828
Total gross utility property		7,979,008		7,725,835
Other (1)		6,425		16,631
Total	$	7,985,433	$	7,742,466

(1)

Included in other property and investments-net and other non-current assets on the Consolidated Balance Sheets. Accumulated depreciation was less than $0.1 million as of December 31, 2023 and $2.4 million as of December 31, 2022 for the other businesses.

Summary of Effective AFUDC Rate

The effective AFUDC rate was the following for the years ended December 31:


	2023			2022			2021
Avista Utilities		7.03	%		7.12	%		7.19	%
Alaska Electric Light and Power Company		8.61	%		8.08	%		8.90	%

Stock-Based Compensation

The Company recorded stock-based compensation expense (included in other operating expenses) and income tax benefits in the Consolidated Statements of Income of the following amounts for the years ended December 31 (dollars in thousands):


	2023		2022			2021
Stock-based compensation expense	$	7,144	$	7,567		$	4,713
Income tax benefits		1,500		1,589			990
Excess tax benefits (expenses) on settled share-based employee payments		84		(19	)		(909	)

The following table summarizes the number of grants, vested and unvested shares, earned shares (based on market metrics), and other pertinent information related to the Company's stock compensation awards for the years ended December 31:


	2023		2022		2021
Restricted Shares
Shares granted during the year		76,806		115,746		62,594
Shares vested during the year		75,007		44,829		34,854
Unvested shares at end of year		152,140		157,860		96,127
Unrecognized compensation expense at end of year (in thousands)	$	3,477	$	3,923	$	2,215
TSR Awards
TSR shares granted during the year		34,912		69,814		64,910
TSR shares vested during the year		61,456		43,730		77,174
TSR shares earned based on market metrics		44,863		48,890		58,652
Unvested TSR shares at end of year		96,915		130,567		107,854
Unrecognized compensation expense at end of year (in thousands)	$	2,235	$	3,533	$	2,653
CEPS Awards
CEPS shares granted during the year		104,685		69,814		64,910
CEPS shares vested during the year		61,456		43,730		38,590
CEPS shares earned based on performance metrics		33,801		—		26,627
Unvested CEPS shares at end of year		161,235		130,567		107,854
Unrecognized compensation expense at end of year (in thousands)	$	2,439	$	2,471	$	1,223

Other Expense (Income) - Net

Other income - net consisted of the following items for the years ended December 31 (dollars in thousands):


	2023			2022		2021
Interest income	$	5,949		$	1,957	$	1,943
Interest on regulatory deferrals		8,713			1,914		1,206
Equity-related AFUDC		6,886			6,704		7,004
Non-service portion of pension and other postretirement benefit expenses		630			3,037		(1,386	)
Earnings (losses) on investments		(3,227	)		48,492		21,402
Other income		575			613		3,129
Total	$	19,526		$	62,717	$	33,298

Allowance for Doubtful Accounts

The following table presents the activity in the allowance for doubtful accounts during the years ended December 31 (dollars in thousands):


	2023			2022			2021
Allowance as of the beginning of the year	$	6,473		$	10,465		$	11,387
Additions expensed during the year		6,865			149			9,279
Net deductions (1)		(8,351	)		(4,141	)		(10,201	)
Allowance as of the end of the year	$	4,987		$	6,473		$	10,465

(1)

The higher balance in 2021 is related to COVID-19 forgiveness program. The Company received support from various government agencies in 2023 and 2022 in the amounts of $1.5 million and $6.1 million, respectively, which were applied to overdue customer accounts.

Estimated Retirement Costs Collected from Customers

The Company records the amount of estimated retirement costs collected from customers (that do not represent legal or contractual obligations) and includes them as a non-current regulatory liability on the Consolidated Balance Sheets in the following amounts as of December 31 (dollars in thousands):


	2023		2022
Regulatory liability for utility plant retirement costs	$	417,027	$	376,817

Summary of Appropriated Retained Earnings Amount Included in Retained Earnings

The appropriated retained earnings amounts included in retained earnings were as follows as of December 31 (dollars in thousands):


	2023		2022
Appropriated retained earnings	$	59,118	$	57,231