XML 88 R55.htm IDEA: XBRL DOCUMENT

Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Regulatory Assets and Liabilities

The following table presents the Company’s regulatory assets and liabilities as of December 31, 2023 (dollars in thousands):


				Receiving Regulatory Treatment						2023				2022
	Remaining Amortization Period			(1) Earning A Return		Not Earning A Return		(2) Expected Recovery or Refund		Current		Non- current		Current		Non- current
Regulatory Assets:
Deferred income tax	(3) (16)			$	—	$	244,303	$	—	$	—	$	244,303	$	—	$	240,325
Pensions and other postretirement benefit plans		(4	)		—		117,658		—		—		117,658		—		135,337
Climate Commitment Act		(14	)		46,022		—		—		—		46,022		—		—
Energy commodity derivatives		(5	)		—		69,139		—		51,419		17,720		112,090		18,185
Unamortized debt repurchase costs		(6	)		5,701		—		—		—		5,701		—		6,177
Settlement with Coeur d’Alene Tribe	2059				36,692		—		—		—		36,692		—		37,809
Demand side management programs		(3	)		—		10,033		—		—		10,033		—		3,683
Decoupling surcharge	2025				10,107		—		—		4,638		5,469		6,250		5,449
Utility plant abandoned		(7	)		34,852		3,422		—		—		38,274		—		24,389
Interest rate swaps		(8	)		178,898		—		591		—		179,489		—		185,919
Deferred power costs		(3	)		49,844		—		—		29,190		20,654		23,356		24,043
Deferred natural gas costs		(3	)		60,667		—		—		60,667		—		52,091		—
AFUDC above FERC allowed rate		(11	)		49,985		—		—		—		49,985		—		51,649
COVID-19 deferrals		(12	)		—		—		12,142		—		12,142		—		9,793
Advanced meter infrastructure		(13	)		29,345		—		—		—		29,345		—		32,381
Other regulatory assets		(3	)		41,072		35,793		4,229		413		80,681		—		58,189
Total regulatory assets				$	543,185	$	480,348	$	16,962	$	146,327	$	894,168	$	193,787	$	833,328
Regulatory Liabilities:
Deferred natural gas costs		(3	)	$	9,296	$	—	$	—	$	9,296	$	—	$	—	$	—
Deferred power costs		(3	)	$	4,000	$	—	$	—	$	—	$	4,000	$	—	$	—
Utility plant retirement costs		(9	)		417,027		—		—		—		417,027		—		376,817
Excess deferred income taxes		(10	)		307,539		—		—		14,510		293,029		15,310		314,096
Other income tax related liabilities	(3) (15)				—		81,711		—		25,129		56,582		57,957		76,638
Climate Commitment Act		(14	)		37,231		—		—		—		37,231		—		—
Interest rate swaps		(8	)		12,216		—		11,536		—		23,752		—		24,204
Decoupling rebate	2025				25,024		—		—		18,680		6,344		9,469		20,476
COVID-19 deferrals		(12	)		—		8		10,164		—		10,172		—		11,874
Other regulatory liabilities		(3	)		4,298		12,623		—		8,392		8,529		12,929		16,732
Total regulatory liabilities				$	816,631	$	94,342	$	21,700	$	76,007	$	856,666	$	95,665	$	840,837

(1)

Earning a return includes either interest on the regulatory asset/liability or a return on the investment as a component of rate base at the allowed rate of return.

(2)

Expected recovery is pending regulatory treatment including regulatory assets and liabilities with prior regulatory precedence.

(3)

Remaining amortization period varies depending on timing of underlying transactions.

(4)

As the Company has historically recovered and currently recovers its pension and other postretirement benefit costs related to its regulated operations in retail rates, the Company records a regulatory asset for that portion of its pension and other postretirement benefit funding deficiency.

(5)

The WUTC and the IPUC issued accounting orders authorizing Avista Corp. to offset energy commodity derivative assets or liabilities with a regulatory asset or liability. This accounting treatment is intended to defer the recognition of mark-to-market gains and losses on energy commodity transactions until the period of delivery. Realized benefits and losses result in adjustments to retail rates through PGAs, the ERM in Washington, the PCA mechanism in Idaho and periodic general rates cases. The resulting regulatory assets associated with energy commodity derivative instruments have been concluded to be probable of recovery through future rates.

(6)

Premiums paid or discounts received to repurchase debt are amortized over the remaining life of the original debt repurchased or, if new debt is issued in connection with the repurchase, these costs are amortized over the life of the new debt. These costs are recovered through retail rates as a component of interest expense.

(7)

The WUTC approved recovery of AMI project costs through the 2020 general rate case settlements, including amortization of retired meters replaced through the project through 2033. The IPUC approved deferral accounting treatment for the Idaho AMI project, which will be included in a future rate case. In addition, the IPUC approved the depreciation of Colstrip through 2027, and as such the remaining depreciation after our exit of Colstrip in 2025 is included in this balance. There are additional smaller projects included in the balance the Company expects to fully recover, which have not yet been through the regulatory process.

(8)

For interest rate swap derivatives, Avista Corp. records all mark-to-market gains and losses in each accounting period as assets and liabilities, as well as offsetting regulatory assets and liabilities, such that there is no income statement impact. The interest rate swap derivatives are risk management tools similar to energy commodity derivatives. Upon settlement of interest rate swap derivatives, the regulatory asset or liability is amortized as a component of interest expense over the term of the associated debt. The Company records an offset of interest rate swap derivative assets and liabilities with regulatory assets and liabilities, based on the prior practice of the commissions to provide recovery through the ratemaking process. Settled interest rate swap derivatives which have been through a general rate case proceeding are classified as earning a return in the table above, whereas all unsettled interest rate swap derivatives and settled interest rate swap derivatives which have not been included in a general rate case are classified as expected recovery.

(9)

This amount is dependent upon the cost of removal of underlying utility plant assets and the life of utility plant.

(10)

This balance represents amounts due back to customers and resulted from the Tax Cuts and Jobs Act signed into law in December 2017, which changed the federal income tax rate from 35 percent to 21 percent. The Company revalued all deferred income taxes as of December 31, 2017. The Company expects the amounts for utility plant items for Avista Utilities to be returned to customers over a period of approximately 33 years. The Company expects the AEL&P amounts to be returned to customers over a period of approximately 22 years. Prior to 2022, for depreciation-related temporary differences under the normalized tax accounting method, the Company utilized the average rate assumption method to compute the amounts returned to customers. Beginning in 2022, the Company changed to the alternative method, to comply with revenue procedures and private letter rulings.

(11)

This amount is being amortized based on the underlying utility plant assets and the life of utility plant.

(12)

The WUTC, IPUC and OPUC issued accounting orders allowing the Company to defer certain costs, net of benefits, related to the COVID-19 pandemic. The Company has recorded all benefits on a gross basis as a regulatory liability to customers and all additional allowed costs are a regulatory asset. The ratemaking treatment will be determined in future general rate cases in each jurisdiction.

(13)

This amount represents the deferral of the depreciation expense of the Company’s AMI project in Washington state. Recovery of these amounts was approved by WUTC in the 2021 general rate case order, and the asset will be amortized through 2033.

(14)

Regulatory assets related to the Climate Commitment Act represent costs incurred to comply with the program. Regulatory liabilities related to the Climate Commitment Act represent proceeds from the required sale of allowances, which will be returned to customers. The Company will submit filings periodically to receive approval to include these items in customer rates.

(15)

The majority of this amount represents the remaining tax customer credits being returned to customers and the tax gross-up on tax customer credits and investment tax credits, which have a corresponding deferred tax asset within Note 13.

(16)

The majority of this balance represents flow-through income tax accounting differences and the related tax gross-up which have a corresponding deferred tax liability within Note 13.

Summary of Energy Recovery Mechanism

The following is a summary of the ERM:


Annual Power Supply Cost Variability	Deferred for Future Surcharge or Rebate to Customers	Expense or Benefit to the Company
within +/- $0 to $4 million (deadband)	0%	100%
higher by $4 million to $10 million	50%	50%
lower by $4 million to $10 million	75%	25%
higher or lower by over $10 million	90%	10%

Schedule of Decoupling and Earnings Sharing Mechanisms

As of December 31, 2023 and December 31, 2022, the Company had the following cumulative balances outstanding related to decoupling and earnings sharing mechanisms in its various jurisdictions (dollars in thousands):


	December 31,			December 31,
	2023			2022
Washington
Decoupling rebate	$	(3,232	)	$	(13,210	)
Idaho
Decoupling rebate	$	(7,961	)	$	(7,889	)
Provision for earnings sharing rebate		(572	)		(686	)
Oregon
Decoupling (rebate) surcharge	$	(3,724	)	$	2,853