Pension Plans and Other Postretirement Benefit Plans

9 Months Ended

Sep. 30, 2020

General Discussion Of Pension And Other Postretirement Benefits [Abstract]

PENSION PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS

NOTE 6. PENSION PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS

Avista Utilities

Avista Utilities’ maintained the same pension and other postretirement plans during the nine months ended September 30, 2020 as those described as of December 31, 2019. The Company’s funding policy is to contribute at least the minimum amounts that are required to be funded under the Employee Retirement Income Security Act, but not more than the maximum amounts that are currently deductible for income tax purposes. The Company contributed $22 million in cash to the pension plan for the nine months ended September 30, 2020 and does not expect any further contributions in 2020.

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 and nine months ended September 30 (dollars in thousands):

	Pension Benefits						Other Postretirement Benefits
	2020			2019			2020			2019
Three months ended September 30:
Service cost	$	5,549		$	4,948		$	982		$	754
Interest cost		6,968			7,134			1,524			1,140
Expected return on plan assets		(8,625	)		(7,913	)		(590	)		(616	)
Amortization of prior service cost		75			75			(275	)		(275	)
Net loss recognition		1,678			2,553			1,243			1,299
Net periodic benefit cost	$	5,645		$	6,797		$	2,884		$	2,302
Nine months ended September 30:
Service cost	$	16,645		$	14,770		$	2,941		$	2,279
Interest cost		20,906			21,372			4,563			3,676
Expected return on plan assets		(26,375	)		(23,681	)		(1,810	)		(1,945	)
Amortization of prior service cost		225			225			(825	)		(825	)
Net loss recognition		5,011			7,394			3,729			3,874
Net periodic benefit cost	$	16,412		$	20,080		$	8,598		$	7,059

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.