Pension Plans and Other Postretirement Benefit Plans

6 Months Ended

Jun. 30, 2024

Retirement Benefits, Description [Abstract]

Pension Plans and Other Postretirement Benefit Plans

NOTE 6. PENSION PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS

Avista Utilities

The Company contributed $6.7 million in cash to the pension plan for the six months ended June 30, 2024, and expects to contribute $10.0 million in total for 2024.

The Company uses a December 31 measurement date for its defined benefit pension and other postretirement benefit plans. The following table sets forth the components of net periodic benefit costs for the three and six months ended June 30 (dollars in thousands):

	Pension Benefits						Other Postretirement Benefits
	2024			2023			2024			2023
Three months ended June 30:
Service cost	$	3,947		$	3,100		$	661		$	532
Interest cost		8,217			8,521			1,726			1,909
Expected return on plan assets		(11,356	)		(10,922	)		(974	)		(891	)
Curtailment loss		169			—			—			—
Amortization of prior service cost (credit)		126			123			(263	)		(263	)
Net loss recognition		569			1,185			88			(8	)
Net periodic benefit cost	$	1,672		$	2,007		$	1,238		$	1,279
Six months ended June 30:
Service cost	$	7,709		$	7,994		$	1,281		$	1,350
Interest cost		16,582			15,753			3,472			2,953
Expected return on plan assets		(22,584	)		(21,844	)		(1,948	)		(1,782	)
Curtailment loss		169			—			—			—
Amortization of prior service cost (credit)		249			246			(526	)		(526	)
Net loss recognition		1,359			2,024			179			525
Net periodic benefit cost	$	3,484		$	4,173		$	2,458		$	2,520

Total service costs in the table above are recorded to the same accounts as labor expense. Labor and benefits expense is recorded to various projects based on whether the work is a capital project or an operating expense. Approximately 40 percent of all labor and benefits is capitalized to utility property and 60 percent is expensed to utility other operating expenses.

The non-service portion of costs in the table above are recorded to other expense below income from operations in the Condensed Consolidated Statements of Income or capitalized as a regulatory asset. Approximately 40 percent of the costs are capitalized to regulatory assets and 60 percent is expensed to the income statement.

In 2024, the Company offered pension participants an election to leave the pension plan for an alternative defined contribution 401(k) plan. In April 2024, it was determined that due to the number of participants electing to leave the pension plan, as well as the resulting decrease in expected future service, this event resulted in a curtailment of the pension plan, and an associated gain of $1.4 million for the reduction in the benefit obligation. This gain was offset against the unrecognized net actuarial loss (and recorded within a regulatory asset). There was also a $0.2 million loss recognized for the acceleration of unrecognized prior service costs. The curtailment triggered a remeasurement of pension plan. The impact of the remeasurement was not material to the Company's condensed consolidated financial statements.