Avista Q1 Earnings Call Highlights

Key Points

• Avista reported higher Q1 results with consolidated EPS of $1.11 (vs. $0.98 a year earlier) and non‑GAAP utility EPS of $1.10 (vs. $1.01), and reaffirmed 2026 non‑GAAP utility guidance of $2.52–$2.72 per share (including an expected $0.10 ERM headwind).
• The company is negotiating with a prospective data‑center customer that could add up to 500 MW (targeting an MOU by May 31), while its vetted large‑load pipeline has narrowed to about 1.1 GW from 1.7 GW.
• Avista is prioritizing grid hardening and wildfire mitigation (citing faster storm restorations in March) and plans significant investment — $615M in 2026 and $3.4B from 2026–2030 — with financing plans including $230M of long‑term debt and up to $90M of equity in 2026 and regulatory outcomes (Washington rate‑case conference on the 22nd) key to cost recovery.

Avista NYSE: AVA reported higher first-quarter 2026 earnings and reiterated its full-year outlook as executives pointed to grid resilience work, ongoing regulatory proceedings, and continued discussions with prospective large-load customers as key themes shaping the year.

First-quarter results and utility-focused reporting

Investor Relations Manager Stacey Walters said Avista’s consolidated first-quarter 2026 earnings were $1.11 per diluted share, up from $0.98 in the first quarter of 2025. On a non-GAAP utility basis—defined as results from the Avista Utilities and AEL&P segment—Walters said first-quarter 2026 earnings were $1.10 per diluted share, compared to $1.01 a year earlier.

Walters noted the company’s non-GAAP utility earnings presentation reflects management’s focus on its “core utility business,” and excludes certain unrealized gains and losses in non-regulated other businesses that can be “significant,” difficult to predict, and outside management’s control.

Grid hardening, wildfire mitigation, and storm response

President and CEO Heather Rosentrater said Avista entered 2026 with “real momentum,” highlighting ongoing investments to “strengthen reliability and resilience,” pursue growth opportunities, and support long-term resource adequacy.

Rosentrater emphasized that the company’s grid hardening and resilience efforts—particularly vegetation management tied to wildfire mitigation programs—have delivered broader benefits beyond wildfire season. She said predictive tools originally developed to monitor wildfire weather conditions have improved the company’s ability to anticipate other weather-related outage risks, enabling earlier staging of crews and materials and customer outreach when appropriate.

Rosentrater pointed to a March wind event as an example of operational improvements. “In March, nearly 60,000 customers were impacted by outages from high winds,” she said, adding that preparation through predictive tools and material pre-staging helped support faster restoration. She commended employees and partners involved in restoration efforts, including replacing poles and rebuilding infrastructure.

Large-load negotiations and resource planning

Rosentrater said Avista remains optimistic about load growth opportunities and is planning for growth identified in its most recent Integrated Resource Plan, as well as potential new large-load customer demand, with an emphasis on affordability, reliability, and compliance with clean energy requirements.

She said negotiations are ongoing with a prospective data center developer that could add “up to 500 MW” of incremental load. Rosentrater said customer protections are a key element of those talks, and the company expects a large-load customer to make “a significant contribution to support affordability for our existing customers.” Avista is targeting a signed memorandum of understanding with the customer by May 31, she said.

In response to a Barclays question about timing beyond an MOU, Rosentrater said the next-step timeline would be identified through the agreement, adding, “I don't think we have a clear understanding of what that next step will be, but we're looking towards that May 31st date.”

Rosentrater also provided an update on Avista’s broader large-load pipeline. While the company previously referenced 1.7 gigawatts in its queue, she said it is now “about 1.1 GW” as the company continues to vet opportunities and build confidence in what demand may ultimately materialize. She also said Avista is evaluating geographic locations with available capacity and working to be more proactive in identifying “curated opportunities for customers.”

On the supply side, Rosentrater said Avista continues work toward final contracts for a project selected from a recent request for proposal process, including a build-transfer battery energy storage project in the base capital plan targeted to come online in 2028. She added that work has begun on the 2027 electric Integrated Resource Plan, and noted that the company’s Clean Energy Implementation Plan was recently updated and approved by the Washington Commission.

Regulatory updates, capital plan, and financing

Senior Vice President, CFO, Treasurer, and Regulatory Affairs Officer Kevin Christie said the company’s first-quarter performance reflected “discipline cost management,” and he framed regulatory outcomes as central to Avista’s progress. Christie said the first settlement conference for Avista’s Washington general rate case is scheduled for the 22nd of the month.

Asked about the likelihood of settlement in Washington—where Avista has filed a four-year plan—Christie said the company is “deep in the discovery process” and preparing for settlement. “I'd like to think there's an opportunity for us to settle at least some, if not all, of the case,” he said, while adding that the four-year structure introduces issues that parties are still working through. “I can't give you a probability of settlement, but I think everybody's gonna give it a shot,” Christie said.

Christie also addressed how Avista plans to manage risk in the four-year framework. He said the company can file a replacement for years three and four after the first year, given the 11-month process, if inflation or incremental investment levels warrant changes. Christie pointed to deferral mechanisms established in Washington in recent years and said Avista is requesting a new mechanism related to employee benefits, which he described as “one of the remaining more volatile, harder to control items.”

On Oregon, Christie said it was difficult to prioritize among issues surrounding the FAIR Act transition and the shift toward a multi-year rate plan, calling interim rate relief, a strong first-year starting point, and the ability to earn a fair shareholder return all important considerations.

For capital spending, Christie said Avista now expects $615 million of capital expenditures at Avista Utilities in 2026, based on updated project costs. He said the company expects $3.4 billion of capital expenditures from 2026 through 2030. Christie added that Avista continues to estimate potential incremental capital investment of up to $350 million associated with integrating a new large-load customer, separate from the $3.4 billion five-year plan, and said incorporating that investment would result in “rate-based growth of 8%.”

Regarding financing, Christie said Avista expects to issue $230 million of long-term debt and up to $90 million of common stock in 2026, including $14 million issued in the first quarter.

Guidance reaffirmed; ERM and long-term growth targets

Christie said Avista is affirming its 2026 non-GAAP utility earnings guidance of $2.52 to $2.72 per diluted share. He said guidance assumes a negative $0.10 impact from the energy recovery mechanism (ERM) under a “90% customer, 10% company sharing band.” With current hydro forecasts showing above-normal generation, Christie said the company does not expect a material change to its ERM position. He said the ERM resulted in $0.01 expense in the first quarter, and the remaining $0.09 is expected to be recognized evenly over the second and third quarters.

Christie said expected long-term return on equity at Avista Utilities is approximately 9%, excluding ERM impacts, and said this reflects expected structural lag of 0.6%. Over the long term, he reiterated expectations that earnings will grow 4% to 6% from the midpoint of 2025 earnings guidance.

In the Q&A, Christie also addressed “other business” results, saying it was “nice to see that things have leveled off” compared to roughly a year ago and that he would expect relatively minor adjustments overall with calmer market conditions. He also said the company would consider exiting a “non-core investment” in a bioscience company when it makes sense, and that any value created could help with equity needs and potentially reduce equity issuance for a period of time.

Separately, Rosentrater said the company continues to look for future regional transmission investment opportunities, noting broader recognition of increased transmission needs and Avista’s geographic position between load growth and new resources. She added that the North Plains Connector opportunity discussed previously is likely beyond the five-year capital budget.

About Avista NYSE: AVA

Avista Corporation operates as an integrated energy company providing electric and natural gas delivery services to residential, commercial and industrial customers in the Pacific Northwest. Through its regulated utility operations, the company maintains and upgrades an extensive transmission and distribution network, delivering reliable energy to approximately 400,000 electric customers and 324,000 natural gas customers across Washington, Oregon and Idaho. In addition to its core utility business, Avista invests in owned generation assets, including hydroelectric, natural gas–fired, coal and wind facilities, to support system reliability and long-term supply planning.

Founded in 1889 as the Spokane and Inland Empire Water Power Company, the business adopted the Avista name in 1999 to reflect its growing energy portfolio and strategic focus on innovation.

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