After soaring 149%, this stock is back in our AI’s favor - & already +25% in July
Avista Corporation (NYSE:AVA), a $3.06 billion utility company with a robust 60.89% gross margin and "GOOD" financial health according to InvestingPro, has announced a settlement agreement related to its general rate cases in Idaho, a regulatory filing showed Wednesday. If approved by the Idaho Public Utilities Commission (IPUC), the proposed rate adjustments for electric and natural gas services will go into effect on September 1, 2025, and September 1, 2026.
The settlement, filed on Monday, outlines a multi-year rate plan that includes increases in electric and natural gas revenue requirements for both years. The IPUC’s staff or other parties’ recommendations for the approval of this multiparty settlement are not binding on the commission.
Under the terms of the agreement, Avista’s annual base electric revenues would increase by approximately $19.5 million, or 6.3%, starting September 2025, followed by an additional $14.7 million, or 4.5%, the subsequent year. The agreement also proposes a $4.6 million, or 9.2%, increase in annual base natural gas revenues effective September 2025, with a slight decrease of $0.2 million, or 0.4%, in September 2026.
The settlement is based on a return on equity of 9.6% with a common equity ratio of 50% and a rate of return on rate base of 7.28%. This agreement reflects a lower return on equity than Avista initially requested, as well as longer amortization periods, a reduction in power supply expense, and changes in property tax calculations.
Avista’s original request was for a $43.0 million increase in base electric revenues and an $8.8 million increase in base natural gas revenues for September 2025. The figures for September 2026 were initially set at $17.7 million for electric and $1.0 million for natural gas. The adjustments in the settlement are primarily due to the reduced return on equity and other financial considerations.
The information contained in this article is based on Avista Corporation’s recent SEC filing. With a P/E ratio of 16 and stable financial metrics, investors can access comprehensive analysis and additional insights through InvestingPro’s detailed research reports, which cover over 1,400 US stocks including Avista Corporation.
In other recent news, Avista Corporation reported its first-quarter earnings for 2025, showing an 8% increase in revenue year-over-year, reaching $603 million. However, the earnings per share (EPS) of $0.98 fell slightly short of the analysts’ forecast of $1. Despite this, Avista reaffirmed its 2025 earnings guidance, projecting EPS between $2.52 and $2.72. In a strategic move, Avista issued a request for proposals (RFP) to secure additional energy resources, aiming to meet peak demand and comply with Washington’s Clean Energy Transformation Act. This initiative is part of Avista’s plan to provide carbon-neutral electricity by 2030. Meanwhile, Jefferies revised Avista’s stock price target to $40 from $44, maintaining a Hold rating due to market conditions and the company’s exposure to wildfire risks. Avista’s ongoing efforts to address wildfire risks include recent legislative changes in Washington and Idaho to approve wildfire mitigation plans. These developments reflect Avista’s commitment to enhancing energy reliability and sustainability.
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