Last year was a busy one for Avista Corp.
The Spokane-based utility celebrated its 125th anniversary, bought an electric utility in Alaska and sold off a subsidiary.
The transactions are reflected in Avista’s 2014 earnings, which shot up 73 percent, the company reported Wednesday.
Avista reported income of $192 million, or $3.10 per share, for the year, compared to 2013 earnings of $111.1 million, or $1.85 per share.
The company’s 2014 income was bolstered by a one-time gain of nearly $70 million from the sale of Ecova, an energy management subsidiary. Avista also saw a small bump in income from the purchase of Alaska Electric Light and Power, which expands the utility’s customer base to the Juneau area.
High demand for electricity and natural gas during the first nine months of last year, along with lower energy costs and interest rates, also helped the company’s balance sheet. Avista officials said company earnings also benefit from rate increases to recover the cost of expensive capital investments.
However, warmer weather during late fall and early winter reduced demand for power during the fourth quarter, which led to lower-than-expected quarterly earnings, officials said.
For the fourth quarter, Avista reported earnings of $32.2 million, or 51 cents per share, compared to 2013 fourth-quarter earnings of $31.7 million, or 53 cents per share.
Weather continues to play a role in the company’s financial outlook.
Mild temperatures in January and February melted the region’s low-elevation snowpack, said Dennis Vermillion, an Avista vice president. But, so far, the outlook for hydropower generation is near normal for the Clark Fork River, he told analysts during a conference call.
Avista’s two largest dams are on the Clark Fork River, where flow forecasts are 101 percent of average for April through September. Cool spring nights should help preserve high-elevation snow in the watershed, Vermillion said. The Clark Fork dams generate about 75 percent of Avista’s hydropower.
For the Spokane River, where Avista also operates dams, the flow forecasts are 75 percent of average for April through September, Vermillion said.
Avista also continues to pursue annual rate increases. Earlier this month, the company filed a request with state regulators to raise Washington customers’ electric and natural gas rates in 2016.
The proposed increase would raise a typical household’s electric bill by $6.45 each month, and the typical household’s natural gas bill by $5.41 monthly.
The proposal also includes a steep hike in monthly basic charges, which customers pay in addition to their energy use. Instead of an $8.50 monthly basic charge for electricity, customers would pay $14. For natural gas customers, the monthly basic charge would increase from $9 to $12.
The company said the higher rates are needed to pay for $375 million in capital projects, including major upgrades at two dams, a new customer information system and replacing miles of natural gas lines.
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