Nearly 40 years after joining the company, and 11 years after becoming its chief executive, Scott Morris is retiring from Avista Corp.
Morris, the Spokane-based utility’s chairman and CEO, announced his plans to retire early next year, but will hand over the reins of the company in October to Dennis Vermillion, who was elected to replace Morris as CEO by the board of directors. Vermillion, who started at the company in 1985 and is currently its president, will take over Oct. 1, according to a news release.
Morris was unavailable for comment Monday.
Morris’s 11-year tenure as the company’s head most likely will be remembered by the ultimately unsuccessful sale to Hydro One Ltd., a large Canadian-based utility. Morris had lauded the proposed $5.3 billion takeover as a way to “preserve” and “enhance” Avista’s role in Spokane. But the agreement was scuttled by Washington and Idaho regulators, who said the Canadian utility wouldn’t serve the best interests of the Spokane company or its customers. They cited meddling by the province of Ontario in Hydro One’s management and state law that prevented the sale of electric utility assets to foreign governments.
His time as chief executive also may be remembered for the utility’s high-tech development at the south landing of the University District Gateway Bridge. When complete, the company’s $50 million Catalyst Building will house three degree programs and about 1,000 Eastern Washington University students. Both it and Avista’s adjoining four-story Hub facility, a 40,000-square-foot companion to the Catalyst that will house a central energy plant to power both buildings, are expected to be completed in early 2020.
Avista added wind and solar power as part of its energy mix during Morris’ time as CEO. In 2011, the company began purchasing power from the Palouse Wind project, and more recently entered into the Adams County-based Rattlesnake Flat Wind project power purchase agreement. Avista also buys power from two of the largest solar arrays in the state, which includes the 82,000 solar panels near Lind whose power Avista has agreed to buy for eight years and sell to 60 large commercial and industrial customers.
Morris also helped grow Avista’s subsidiary company, Ecova, which ended up producing more than $200 million in annual revenue. Avista sold the company to Engie in 2014 for $335 million. He also led the deal to purchase Alaska Electric Light and Power Co. in 2014, which expanded Avista’s presence into the far-flung state.
The company’s news release says the company’s dividend increased each year Morris was CEO.
Morris retires as the top-paid executive at the company, according to filings with the U.S. Securities and Exchange Commission. In 2018, his base salary was $840,000, but he was paid more than $3.8 million, which includes $2.1 million in stock awards and $852,000 in “non-equity incentive plan” pay, a type of compensation company executives receive usually tied to the company’s performance.
Morris’ total compensation was down compared to previous years. In 2016, he made nearly $4.5 million, the most he ever made as CEO. In his first year as CEO, he made more than $2.2 million.
According to the company’s most recent SEC filing about executive compensation, Morris’s retirement plan is valued at more than $8.3 million. In 2018, he put $12,375 into his 401K plan, which was matched by Avista. Given Avista’s complex postretirement compensation plan, which includes a retirement plan and supplemental executive retirement plan, or SERP, it is unclear how much Morris will make in retirement. Regardless, his retirement pay will be based on his highest paid years as CEO.
Morris will not receive the $10.6 million bonus that would’ve gone to him if he were fired or there was a change in control of the company.
During his 11-year tenure, the company sought increases in electric and gas utility rates 11 times, according to information from the Washington State Utilities and Transportation Commission. This includes a request last month to raise electric and gas rates by nearly 10% each, on average. Regulators have yet to make a decision on the request.
Morris came to power at Avista during a rough stretch for the utility. After a failed merger with Reno-based Sierra Pacific Resources in the 1990s, the board of directors of what was then called Washington Water Power hired a Texan named Tom Matthews as chairman and chief executive in June 1998, the first chairman hired from outside the company.
Within weeks, the company’s dividend was cut by 61% and WWP was rebranded as Avista.
In the spring of 2000, after an early snow runoff, Avista had to buy power on the wholesale market at a time when prices were soaring to 100 times normal and companies like Enron Corp. were being enriched. Avista ran up losses that ultimately exceeded $120 million.
The company was on the edge of bankruptcy, and Matthews was ousted.
During this time, Morris was first elected to leadership positions within the company.
Morris was born and raised in Spokane and attended Westview Elementary School, Salk Junior High School and Shadle Park High School. After graduating from Gonzaga University, he was hired by Washington Water Power in 1981 and worked in the utility marketing division, where he was put in charge of a water heater wrapping program. Soon, he was in charge of the company’s call center in Spokane before moving to Lewiston to do customer service work.
In 1991, the company purchased a natural gas utility in Oregon, and Morris was sent to Medford to run the new acquisition.
“I always kind of joke … where the company sent me was always the farthest place away from our home headquarters,” Morris said in a recent interview with The Spokesman-Review. “Whether it was Lewiston or Medford, I think they were trying to send me a message that maybe I needed to leave. But somehow I came back.”
He ran the company’s Oregon and California operations until 2000, when he was elected by the board to be a company vice president. In 2002, he became a senior vice president of Avista, and in 2006 he was named president and chief operations officer.
Morris will serve as the non-executive chairman of the board following his retirement. Vermillion will continue to serve on Avista’s board of directors.
Avista has 395,000 electric customers and 362,000 natural gas customers. Its service territory covers 30,000 square miles in Eastern Washington, northern Idaho and regions of southern and eastern Oregon. It was founded in 1889 and has about 1,500 employees.
The company’s largest source of power productionis hydroelectric, with nearly 48% of its energy mix coming from dams. Six percent of Avista’s power comes from wind. Nine percent comes from coal, the biggest contributor of CO2 emissions for electric facilities. Another 35% comes from natural gas, which also produces CO2 but not near the level of coal.
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