Avista’s new CEO Heather Rosentrater’s path to success began as a barista in Millwood

Heather Rosentrater was working in 1996 in her parent’s coffee shop in Millwood when a Gonzaga professor, who doubled as Washington Water Power’s chief technical services engineer, verbally complained about losing his engineering student.

A regular customer at the shop, who knew Rosentrater, spoke up and told the professor, Bill Fuglevand, that Rosentrater was a valedictorian from West Valley High School and was studying engineering at Gonzaga University.

Fuglevand gave Rosentrater his card and invited her to come visit his lab for a tour.

“Being an introvert, that was probably one of the hardest things for me to do: pick up the phone and call him,” Rosentrater said.

Somewhere she found the courage.

“I did end up getting a job as a student engineer from taking that tour,” she said. “You know, it’s been amazing ever since.”

That phone call 28 years ago began a run that led to the announcement Monday by Avista Corp. that the former barista and Pizza Hut employee would become the first woman CEO in the company’s 135-year history.

Rosentrater’s great-great-grandfather homesteaded land near Hillyard.

Her 100-year-old grandmother, Bessie, who lives in Spokane Valley, still gets her monthly Avista bills just like 411,000 other electricity customers and 377,000 natural gas customers the utility serves in four states.

“I went to school to become an engineer. I liked being an engineer and I liked solving problems,” Rosentrater said. “That is what led me here. I can make a big difference here and support a lot of people in this role. So, I look forward to that.”

Rosentrater, 47, takes over on Jan. 1 for outgoing CEO Dennis Vermillion, 62, who assumed that role in 2019 after working a decade behind previous CEO Scott Morris.

Another West Valley High School graduate, Vermillion started in 1985 working at Washington Water Power, which was renamed Avista Corp. in 1999. Like Rosentrater, Vermillion has worked for only one parent company after graduating from college.

Both worked for subsidiaries before joining the larger utility later in their careers.

“I have been incredibly fortunate to be given the opportunity to work here and the opportunity to do different things … and work for some really great leaders,” Vermillion said.

The national energy implosions of the early 2000s

Vermillion worked years for a subsidiary called Avista Energy, which served as an energy broker and wholesaler until it was sold in 2007.

During his four decades, Vermillion has either helped guide or shepherded the utility through the energy crisis in the early 2000s that included spiking oil prices and chaos caused by the deregulation of the energy industry in California that culminated with the collapse in 2003 of energy wholesaler Enron.

“The whole industry was in turmoil and I was at this startup company,” Vermillion said. “I really had an opportunity, in hindsight, to step up and prove myself … and lead through a very difficult time.”

Once Avista Energy sold, Vermillion went to work for the utility and served under CEO Gary Ely, who is largely credited with keeping the utility afloat amid the energy crisis before handing Avista over to Morris.

During Vermillion’s time, the utility and entire country were hit with the Great Recession. And it was under Morris, that Avista sought approval for the $5.3 billion sale to large Canadian-based utility Hydro One Ltd., which was scuttled in December 2018 by Washington and Idaho regulators.

Vermillion took over as CEO just weeks later.

“We were trying to look over the horizon,” Vermillion said of the Hydro One deal. “We thought that it would do that in a way that would set us up for success and allow for the ability for us to remain independent.”

The deal would have allowed Avista to operate and invest in the community despite giving up overall control, he said.

“I still believe that it was a good idea,” Vermillion said. “But for reasons that ended up being kind of out of our control, the whole thing came apart. And, not unlike other things that happened in the last 40 years … you move forward and you do it with the confidence that you work with really great people.”

But it was the last crisis for which Vermillion considered himself the most proud. Not long after becoming CEO, the world was introduced to something called COVID-19.

“That was an enormous challenge for us,” Vermillion said. “It just seemed like the volume was turned up on everything. And again, it was a team effort. Heather and the rest of the team, we pulled together.”

Much of society was told to shelter at home. But Avista employees had to figure out how to keep themselves safe while providing the power needed to heat homes and businesses.

“People have asked me, ‘What do you think of your legacy?’ ” he said. “I didn’t plan to have to run the company through a pandemic, but it happened. So, you know, navigating us through that period of time is something I’m proud of and I’m glad it’s over.

“It seems like we’re through it and it’s clean sailing for Heather.”

Reacting to natural disasters

Just months after Rosentrater began as a student engineer in 1996, the region was hit by an ice storm on Nov. 19 that knocked out power to about 100,000 homes, some for as long as 13 days. Four people died and transportation became nearly impossible.

“I was a fly on the wall. I had no skills,” Rosentrater said of the time. “That’s one of the things that created such loyalty to Avista and the employees. Everyone just dropped everything and we had a clear, united goal as a company to work towards. And, it didn’t matter what people’s normal day job was, they did whatever they could.”

Fast forward 19 years later and a wind storm on Nov. 17, 2015, knocked out power to 250,000 customers in Eastern Washington and North Idaho. Of those, Avista reported 180,000 outages. It was the worst storm in recent memory, slightly outpacing the damage caused by the ice storm in 1996.

Just prior to that storm, Avista leadership had promoted Rosentrater to vice president of energy delivery, which is one of the 12 top officer positions for the company.

“It wasn’t even official yet,” Rosentrater said of her promotion. “I did feel accountable and responsible for managing us through that.”

Managers created lists of new kinds of tasks and asked employees if they had any skills that could help accomplish what needed to happen.

“That’s what makes our communities who they are and what they are, and creating safety for our neighbors and our family members,” she said. “Everyone has such an understanding that when we have a big emergency like this, it’s just all hands on deck.

“And that was a pretty amazing way to start in that role, to have that experience.”

Rising costs of energy

Rosentrater has four children – two boys and two girls – in a blended family with her husband, Eric Rosentrater.

Her aunt called her to congratulate her this week on her promotion to CEO after reading it in the newspaper.

She and Vermillion said they understand the impact of rising energy bills at the same time consumers are dealing with near record inflation as the economy continues to deal with problems created by the pandemic and supply breakdowns.

For example, the utility announced earlier this year that it is seeking rate adjustments that would raise the bill of the average user, based on the kilowatts used, to $110.20 in December 2024 and $117.07 in 2025.

That same customer was paying $85.52 in December 2022. That means in a period of three years, customers will be paying $31.55 more a month for electricity, while the costs of groceries and gas also remain high.

“We take it very seriously,” Vermillion said of rate increases. “We do view ourselves as the stewards of our customers.”

Avista is working to meet state requirements, including the 2025 mandate to stop using coal, hardening the grid against expanding fire dangers, and it faces the same inflationary pressures as consumers for the equipment it needs to maintain the grid, he said.

“And I think this is the challenge for Heather and the team going forward. We are trying to meet our climate, our carbon reduction goals, but yet we need to … be mindful of affordability and what the impacts are for our customers,” he said.

For example, Rosentrater said the cost of a basic transformer that is used for a new house has increased 400%.

“We know we’re managing those things on our customers’ behalfs and trying our very best to minimize the cost impact that our customers experience from those kinds of things that we’re experiencing,” she said.

Both highlighted several Avista programs and rebates that help low-income residents pay their monthly bills.

“And so when we’re making decisions about things that affect affordability and reliability, it’s an honor for me to be able to serve a community that I’ve grown up in. I have a lot of friends and families and neighbors that I know I’m supporting and I’m impacting their lives every day,” Rosentrater said.

Vermillion said he’s looking forward to spending more time with his wife, Marlene, and their two adult children, who both live in the area.

“I’m just so fortunate to have been given the opportunity to be associated with great people,” he said. “What I hope that people will say about me is I supported that mission that is so crucial and led through some tough times and cared about the right things, you know, people and community.”

Rosentrater, who was promoted to president last year , said she hopes to continue the legacy started by Morris, Vermillion and teams of other managers who work for Avista.

“I’m excited to be in the role. I’m honored,” she said. “I see a lot of opportunity even though are headwinds. There are risks that are changing and increasing. But, there are also a lot of exciting opportunities ahead of us, too.”