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Revenue | 3 Months Ended
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Mar. 31, 2024
Revenue from Contract with Customer [Abstract] |
Revenue | NOTE 4. REVENUE The core principle of the revenue recognition model is that an entity should identify the various performance obligations in a contract, allocate the transaction price among the performance obligations and recognize revenue when (or as) the entity satisfies each performance obligation. Utility Revenues Revenue from Contracts with Customers General The majority of Avista Corp.’s revenue is from rate-regulated sales of electricity and natural gas to retail customers, which has two performance obligations, (1) having service available for a specified period (typically a month at a time) and (2) the delivery of energy to customers. The total energy price generally has a fixed component (basic charge) related to having service available and a usage-based component, related to the delivery and consumption of energy. The commodity is sold and/or delivered to and consumed by the customer simultaneously, and the provisions of the relevant utility commission authorization determine the charges the Company may bill the customer. Since all revenue recognition criteria are met upon the delivery of energy to customers, revenue is recognized immediately. Revenues from contracts with customers are presented in the Condensed Consolidated Statements of Income in the line item "Utility revenues, exclusive of alternative revenue programs." Non-Derivative Wholesale Contracts The Company has certain wholesale contracts that are not accounted for as derivatives and are considered revenue from contracts with customers. Revenue is recognized as energy is delivered to the customer or the service is available for a specified period of time, consistent with the discussion of rate-regulated sales above. Alternative Revenue Programs (Decoupling) ASC 606 retained existing GAAP associated with alternative revenue programs, which specified alternative revenue programs are contracts between an entity and a regulator of utilities, not a contract between an entity and a customer. GAAP requires the presentation of revenue arising from alternative revenue programs separately from revenues arising from contracts with customers on the Condensed Consolidated Statements of Income. The Company's decoupling mechanisms (also known as a FCA in Idaho) qualify as alternative revenue programs. Decoupling revenue deferrals are recognized in the Condensed Consolidated Statements of Income during the period they occur (i.e. during the period of revenue shortfall or excess due to fluctuations in customer usage), subject to certain limitations, and a regulatory asset or liability is established which will be surcharged or rebated to customers in future periods. GAAP requires that for an alternative revenue program, like decoupling, the revenue must be expected to be collected from customers within 24 months of the deferral to qualify for recognition in the Condensed Consolidated Statements of Income. Amounts included in the Company's decoupling program that are not expected to be collected from customers within 24 months are not recorded in the financial statements until the period in which revenue recognition criteria are met. The amounts expected to be collected from customers within 24 months represents an estimate made by the Company on an ongoing basis due to it being based on the volumes of electric and natural gas sold to customers on a go-forward basis. The Company records alternative program revenues under the gross method, which is to amortize the decoupling regulatory asset/liability to the alternative revenue program line item on the Condensed Consolidated Statements of Income as it is collected from or refunded to customers. The cash passing between the Company and the customers is presented in revenue from contracts with customers since it is a portion of the overall tariff paid by customers. This method results in a gross-up to both revenue from contracts with customers and revenue from alternative revenue programs, but has a net zero impact on total revenue. Depending on whether the previous deferral balance being amortized was a regulatory asset or regulatory liability, and depending on the size and direction of the current year deferral of surcharges and/or rebates to customers, it could result in negative alternative revenue program revenue during the year. Derivative Revenue Most wholesale electric and natural gas transactions (including both physical and financial transactions), and the sale of fuel are considered derivatives, which are disclosed separately from revenue from contracts with customers. Revenue is recognized for these items upon the settlement/expiration of the derivative contract. Derivative revenue includes transactions entered into and settled within the same month. Other Utility Revenue Other utility revenue includes rent, sales of materials, late fees and other charges that do not represent contracts with customers. This revenue is excluded from revenue from contracts with customers, as this revenue does not represent items where a customer is a party that has contracted with the Company to obtain goods or services that are an output of the Company’s ordinary activities in exchange for consideration. As such, these revenues are presented separately from revenue from contracts with customers. Other Considerations for Utility Revenues Gross Versus Net Presentation Revenues and resource costs from Avista Utilities’ settled energy contracts “booked out” (not physically delivered) are reported on a net basis as part of derivative revenues. Utility-related taxes collected from customers (primarily state excise taxes and city utility taxes) are imposed on Avista Utilities as opposed to being imposed on customers; therefore, Avista Utilities is the taxpayer and records these transactions on a gross basis in revenue from contracts with customers and operating expense (taxes other than income taxes). The utility-related taxes collected from customers at AEL&P are imposed on the customers rather than AEL&P; therefore, the customers are the taxpayers and AEL&P is acting as their agent. As such, these transactions at AEL&P are presented on a net basis within revenue from contracts with customers. Utility-related taxes included in revenue from contracts with customers were as follows for the three months ended March 31 (dollars in thousands):
| 2024 |  |  | 2023 |
Utility-related taxes | $ | 26,581 |  |  | $ | 25,739 |
Significant Judgments and Unsatisfied Performance Obligations The only significant judgments involving revenue recognition are estimates surrounding unbilled revenue and receivables from contracts with customers and estimates surrounding the amount of decoupling revenues that will be collected from customers within 24 months (discussed above). The Company has certain capacity arrangements, where the Company has a contractual obligation to provide either electric or natural gas capacity to its customers for a fixed fee. Most of these arrangements are paid for in arrears by the customers and do not result in deferred revenue and only result in receivables from the customers. The Company has one capacity agreement where the customer makes payments throughout the year. As of March 31, 2024, the Company estimates it had unsatisfied capacity performance obligations of $5.9 million, which will be recognized as revenue in future periods as the capacity is provided to the customers. These performance obligations are not reflected in the financial statements, as the Company has not received payment for these services. Disaggregation of Total Operating Revenue The following table disaggregates total operating revenue by segment and source for the three months ended March 31 (dollars in thousands):
|  | 2024 |  |  | 2023 |
Avista Utilities |  |  |  |  |  |
Revenue from contracts with customers |  | $ | 499,382 |  |  | $ | 478,775 |
Derivative revenues |  |  | 89,580 |  |  |  | (3,062 | )
Alternative revenue programs |  |  | 2,883 |  |  |  | (19,038 | )
Deferrals and amortizations for rate refunds to customers |  |  | 365 |  |  |  | 417 |
Other utility revenues |  |  | 2,726 |  |  |  | 3,050 |
Total Avista Utilities |  |  | 594,936 |  |  |  | 460,142 |
AEL&P |  |  |  |  |  |
Revenue from contracts with customers |  |  | 14,302 |  |  |  | 14,211 |
Other utility revenues |  |  | 156 |  |  |  | 152 |
Total AEL&P |  |  | 14,458 |  |  |  | 14,363 |
Other non-utility revenues |  |  | 22 |  |  |  | 126 |
Total operating revenues |  | $ | 609,416 |  |  | $ | 474,631 |
Utility Revenue from Contracts with Customers by Type and Service The following table disaggregates revenue from contracts with customers associated with the Company's electric operations for the three months ended March 31 (dollars in thousands):
|  | 2024 |  |  | 2023 |
|  | Avista Utilities |  |  | AEL&P |  |  | Total Utility |  |  | Avista Utilities |  |  | AEL&P |  |  | Total Utility |
ELECTRIC OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenue from contracts with customers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential |  | $ | 142,029 |  |  | $ | 7,154 |  |  | $ | 149,183 |  |  | $ | 122,823 |  |  | $ | 6,881 |  |  | $ | 129,704 |
Commercial |  |  | 92,792 |  |  |  | 7,082 |  |  |  | 99,874 |  |  |  | 81,226 |  |  |  | 7,266 |  |  |  | 88,492 |
Industrial |  |  | 28,066 |  |  |  | — |  |  |  | 28,066 |  |  |  | 25,167 |  |  |  | — |  |  |  | 25,167 |
Public street and highway lighting |  |  | 2,164 |  |  |  | 66 |  |  |  | 2,230 |  |  |  | 1,955 |  |  |  | 64 |  |  |  | 2,019 |
Total retail revenue |  |  | 265,051 |  |  |  | 14,302 |  |  |  | 279,353 |  |  |  | 231,171 |  |  |  | 14,211 |  |  |  | 245,382 |
Transmission |  |  | 9,592 |  |  |  | — |  |  |  | 9,592 |  |  |  | 7,947 |  |  |  | — |  |  |  | 7,947 |
Other revenue from contracts with customers |  |  | 16,061 |  |  |  | — |  |  |  | 16,061 |  |  |  | 17,293 |  |  |  | — |  |  |  | 17,293 |
Total electric revenue from contracts with customers |  | $ | 290,704 |  |  | $ | 14,302 |  |  | $ | 305,006 |  |  | $ | 256,411 |  |  | $ | 14,211 |  |  | $ | 270,622 |
The following table disaggregates revenue from contracts with customers associated with the Company's natural gas operations for the three months ended March 31 (dollars in thousands):
|  | 2024 |  |  | 2023 |
|  | Avista Utilities |  |  | Avista Utilities |
NATURAL GAS OPERATIONS |  |  |  |  |  |
Revenue from contracts with customers |  |  |  |  |  |
Residential |  | $ | 132,970 |  |  | $ | 140,836 |
Commercial |  |  | 67,999 |  |  |  | 72,325 |
Industrial and interruptible |  |  | 3,965 |  |  |  | 5,528 |
Total retail revenue |  |  | 204,934 |  |  |  | 218,689 |
Transportation |  |  | 2,338 |  |  |  | 2,269 |
Other revenue from contracts with customers |  |  | 1,406 |  |  |  | 1,406 |
Total natural gas revenue from contracts with customers |  | $ | 208,678 |  |  | $ | 222,364 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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