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Pension Plans and Other Postretirement Benefit Plans
 3 Months Ended
Mar. 31, 2024
Retirement Benefits, Description [Abstract]  
Pension Plans and Other Postretirement Benefit Plans

NOTE 6. PENSION PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS

Avista Utilities

The Company contributed $3.3 million in cash to the pension plan for the three months ended March 31, 2024, and expects to contribute $10.0 million in 2024.

The Company uses a December 31 measurement date for its defined benefit pension and other postretirement benefit plans. The following table sets forth the components of net periodic benefit costs for the three months ended March 31 (dollars in thousands):

 

 

Pension Benefits

 

 

Other Postretirement Benefits

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Service cost

 

$

3,762

 

 

$

4,894

 

 

$

620

 

 

$

818

 

Interest cost

 

 

8,365

 

 

 

7,232

 

 

 

1,746

 

 

 

1,044

 

Expected return on plan assets

 

 

(11,228

)

 

 

(10,922

)

 

 

(974

)

 

 

(891

)

Amortization of prior service cost (credit)

 

 

123

 

 

 

123

 

 

 

(263

)

 

 

(263

)

Net loss recognition

 

 

790

 

 

 

839

 

 

 

91

 

 

 

533

 

Net periodic benefit cost

 

$

1,812

 

 

$

2,166

 

 

$

1,220

 

 

$

1,241

 

Total service costs in the table above are recorded to the same accounts as labor expense. Labor and benefits expense is recorded to various projects based on whether the work is a capital project or an operating expense. Approximately 40 percent of all labor and benefits is capitalized to utility property and 60 percent is expensed to utility other operating expenses.

The non-service portion of costs in the table above are recorded to other expense below income from operations in the Condensed Consolidated Statements of Income or capitalized as a regulatory asset. Approximately 40 percent of the costs are capitalized to regulatory assets and 60 percent is expensed to the income statement.

In 2024, the Company offered pension participants an election to leave the pension plan for an alternative defined contribution 401(k) plan. In April 2024, it was determined that due to the number of participants that elected to leave the pension plan, as well as the resulting decrease in expected future

service, this event resulted in a curtailment of the pension plan, and an associated gain of $1.4 million. This gain will be offset against the unrecognized net actuarial loss (and recorded within a regulatory asset). The curtailment triggered a remeasurement of pension plan. The impact of the remeasurement is not material to the Company's condensed consolidated financial statements.