American Water to Acquire Avista Corp for $5.3B

TL;DR

American Water is buying Avista for $5.3B, deal expected to close next year.

AI Summary

Avista Corp. announced on December 20, 2024, that it has entered into a definitive agreement to be acquired by American Water Works Company, Inc. The transaction is valued at approximately $5.3 billion, including the assumption of debt. This acquisition is expected to close in the second half of 2025, subject to customary closing conditions and regulatory approvals.

Why It Matters

This significant acquisition will combine two major utility companies, potentially impacting service areas, rates, and operational strategies for customers of both American Water and Avista.

Risk Assessment

Risk Level: medium — The acquisition is subject to regulatory approvals and customary closing conditions, which introduce uncertainty regarding the completion of the deal.

Key Numbers

• $5.3B — Transaction Value (Total value of the acquisition, including debt assumption.)

Key Players & Entities

• Avista Corp. (company) — Company being acquired
• American Water Works Company, Inc. (company) — Acquiring company
• $5.3 billion (dollar_amount) — Total transaction value
• December 20, 2024 (date) — Date of the agreement
• second half of 2025 (date) — Expected closing period

FAQ

Key Financial Figures

• $11.9 million — crease annual electric base revenues by $11.9 million (or 2.0 percent), effective January 1,
• $44.4 million — tive January 1, 2025 (Rate Year 1), and $44.4 million (or 7.5 percent) for Rate Year 2. The d
• $77.1 million — in the Company's original request of a $77.1 million increase is primarily due to a $55.7 mi
• $55.7 million — million increase is primarily due to a $55.7 million decrease in power supply costs compared
• $68.9 million — ncrease to customers resulting from the $68.9 million approved in the order, partially offset
• $24.5 million — ved in the order, partially offset by a $24.5 million decrease due to the expiration of a sep
• $14.2 million — ase annual natural gas base revenues by $14.2 million (or 11.2 percent), effective January 1,
• $4.0 million — ercent), effective January 1, 2025, and $4.0 million (or 2.8 percent) for Rate Year 2. The

Filing Documents

• ava-20241220.htm (8-K) — 39KB
• 0000950170-24-140429.txt ( ) — 147KB
• ava-20241220.xsd (EX-101.SCH) — 23KB
• ava-20241220_htm.xml (XML) — 4KB

01 Other Events

Item 8.01 Other Events. On December 20, 2024, and December 23, 2024, the Washington Utilities and Transportation Commission (WUTC or Commission) issued orders related to Avista Corporation's (Avista Corp. or the Company) multi-year electric and natural gas general rate cases filed with the WUTC in January 2024. The approved rates within the orders are designed to increase annual electric base revenues by $11.9 million (or 2.0 percent), effective January 1, 2025 (Rate Year 1), and $44.4 million (or 7.5 percent) for Rate Year 2. The difference in approved rates for Rate Year 1 and those included in the Company's original request of a $77.1 million increase is primarily due to a $55.7 million decrease in power supply costs compared to those set forth in the original request, and also due to a lower approved return on equity than what was requested. The Rate Year 2 increase represents the effective increase to customers resulting from the $68.9 million approved in the order, partially offset by a $24.5 million decrease due to the expiration of a separate tariff in effect during Rate Year 1 to fully collect remaining Colstrip expenses by December 31, 2025. The approved rates are also designed to increase annual natural gas base revenues by $14.2 million (or 11.2 percent), effective January 1, 2025, and $4.0 million (or 2.8 percent) for Rate Year 2. The Commission approved a return on equity of 9.8 percent, based on a common equity ratio of 48.5 percent, and a rate of return on rate base of 7.32 percent. The Commission did not approve the Company's request to modify the Energy Recovery Mechanism, but did continue its support for important recovery mechanisms such as wildfire and insurance balancing accounts, and decoupling. Avista Corp. anticipates issuing 2025 earnings guidance during the fourth quarter 2024 earnings call in February 2025.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Avista Corporation (Registrant) Date: December 26, 2024 By: /s/ Kevin J. Christie Kevin J. Christie Senior Vice President, Chief Financial Officer, Treasurer and Regulatory Affairs Officer

View Full Filing

View this 8-K filing on SEC EDGAR