Avista reports earnings drop in first quarter

Avista Corp. reported a drop in first-quarter earnings Wednesday, with income of $54.9 million or 83 cents per share.

The results compared to $62.1 million in income, or 96 cents per share, during the first quarter of 2017.

Scott Morris, the company’s chairman and CEO, said the company had a solid quarter. Abundant hydropower and lower natural gas costs helped Avista’s bottom line, he said in a news release. Utility customers also benefited from the lower gas costs through rate reductions, he said.

The Washington Utilities and Transportation Commission last week approved a 2.7 percent increase in electric rates for Avista’s residential customers and a 1.2 percent decrease in natural gas rates.

Avista had asked for three years of rate increases, which the UTC turned down. But Morris said the new rates allow the utility to earn a fair return and recover part of the cost of its capital investments.

Avista’s savings from the 2017 federal tax reform bill tempered the impact of the electric rate increase and contributed to the natural gas decrease. The UTC told utilities they had to pass tax-related savings on to customers.

“We are also pleased to be able to return to our customers benefits resulting from the federal Tax Cuts and Jobs Act through their rates,” Morris said.

Avista issued earnings guidance of $1.90 to $2.10 per share for the year, excluding the costs of the company’s acquisition by Hydro One Ltd., of Toronto. The acquisition costs are expected to be in the 80 cents- to 85 cents-per-share range.