Core Insights - Avista Corporation is a utility company providing electric and natural gas services primarily in the Pacific Northwest, competing with other regional utility companies [1] Rate Adjustments - Avista has submitted annual rate adjustment requests to the Washington Utilities and Transportation Commission, proposing a decrease in natural gas rates by 8.6% and an increase in electric rates by 1.7%, effective November 1, 2025 [3] - The Idaho Public Utilities Commission has approved Avista's settlement agreement for electric and natural gas rate cases, with new electric rates increasing annual base revenues by $19.5 million (6.3%) in 2025 and $14.7 million (4.5%) in 2026, while natural gas revenues will rise by $4.6 million (9.2%) in 2025 [4] Financial Metrics - Avista's capital structure includes a 9.6% return on equity and a common equity ratio of 50%, with a rate of return on rate base of 7.28% [5] - The stock has experienced a 52-week high of $43.09 and a low of $34.80, with a current market cap of approximately $2.97 billion [2][5]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - NVIDIA reported earnings that exceeded both top and bottom line estimates, yet the stock price declined, indicating market limitations even for high-growth stocks [2] Group 2 - The article emphasizes the importance of due diligence and encourages readers to draw their own conclusions before making investment decisions [3] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the opinions of the platform as a whole [4]

Core Viewpoint - Avista has received approval for new electric and natural gas rates from the Idaho Public Utilities Commission, which will take effect on September 1, 2025, and September 1, 2026, aimed at increasing revenue and supporting infrastructure investments [1][2][4]. Rate Changes - The approved electric rates will increase annual base electric revenues by $19.5 million or 6.3% starting September 1, 2025, and by $14.7 million or 4.5% starting September 1, 2026 [2]. - For natural gas, the rates will increase annual base natural gas revenues by $4.6 million or 9.2% effective September 1, 2025, and will decrease base revenues by $0.2 million or 0.4% effective September 1, 2026 [2]. Financial Structure - The settlement includes a capital structure with a 9.6% return on equity (ROE), a common equity ratio of 50%, and a rate of return (ROR) on rate base of 7.28% [3]. Company Perspective - The decision by the Commission is viewed as fair and reasonable for Idaho customers, the company, and shareholders, supporting Avista's capital investments and infrastructure maintenance [4]. Customer Base - Avista serves over 145,000 electric customers and 93,000 natural gas customers in Idaho, with a broader service area covering 30,000 square miles and a total customer base of 422,000 for electric and 383,000 for natural gas [5][6].

Leadership Changes - Avista announced leadership changes effective October 1, 2025, as part of a succession strategy aimed at enhancing operational capabilities and promoting future growth [1][7] - Jason Thackston has been promoted to Senior Vice President of Growth, Energy Policy, and External Relations, expanding his responsibilities to include company-wide growth initiatives [2] - Wayne Manuel has been promoted to Senior Vice President, Operations and Technology, overseeing energy delivery operations and technology initiatives [3] - Alexis Alexander will succeed Manuel as Vice President, Chief Information Officer/Chief Security Officer, leading Avista's information systems and cybersecurity strategy [5] Background of Key Leaders - Wayne Manuel joined Avista in 2023 and has a diverse background in Information Technology, Strategy, and Operations [4] - Alexis Alexander has been with Avista since 2007, holding various leadership roles, including Director of Applications, and has a strong track record in managing high-impact projects [6][7] Company Overview - Avista Corp. is involved in the production, transmission, and distribution of energy, serving 423,000 electric customers and 383,000 natural gas customers across a service territory of 30,000 square miles [8]

Financial Performance - The consolidated earnings for the first half of 2025 were $1.15 per diluted share, a decrease from $1.20 for the first half of 2024 [4] - For the second quarter of 2025, consolidated earnings were $0.17 per diluted share, down from $0.29 for the second quarter of 2024 [4] Conference Call Details - The Q2 2025 Earnings Conference Call was hosted by Stacey Walters, Investor Relations Manager, with participation from President and CEO Heather Rosentrater and CFO Kevin Christie [2] - The earnings and Form 10-Q for Q2 2025 were released premarket and are available on the company's website [2]

Financial Data and Key Metrics Changes - Consolidated earnings for 2025 were $1.15 per diluted share, down from $1.20 in 2024, with year-to-date results at $1.25 per diluted share, reflecting a nearly 7% increase over 2024 [5][7] - Consolidated earnings for the second quarter of 2025 were $0.17 per diluted share, compared to $0.29 in the same period of 2024 [5][6] - Valuation losses of $0.12 per diluted share in the second quarter materially impacted consolidated earnings [13][14] Business Line Data and Key Metrics Changes - Avista Utilities' year-to-date results showed strong performance, underpinned by diligent cost management and constructive regulatory outcomes [7][8] - Capital expenditures at Avista Utilities were $236 million in 2025, with expectations of overall capital expenditures of $525 million for the year [17] - From 2025 through 2029, capital expenditures are expected to reach nearly $3 billion, resulting in an annual growth of 56% [18] Market Data and Key Metrics Changes - The clean energy sector faced headwinds due to shifts in market sentiment and public policy, negatively impacting valuations within the company's investment portfolio [6][8][14] - The company received over 80 bids in its RFP process, indicating a broad range of resource options including wind, solar, battery storage, and natural gas [9][10] Company Strategy and Development Direction - The company is focused on serving customers and communities while ensuring reliable energy provision, with an RFP issued to meet identified needs by 2029 [9][10] - The company is optimistic about future opportunities, particularly in discussions with potential large load customers, with over 3,000 megawatts of requests in the pipeline [11][12] - The company plans to continuously invest in utility infrastructure to support customer growth and maintain system reliability [17] Management's Comments on Operating Environment and Future Outlook - Management affirmed consolidated earnings guidance for 2025, expecting a range of $2.52 to $2.72 per diluted share, with Avista Utilities contributing toward the upper end of $2.43 to $2.61 per diluted share [19][20] - The company anticipates that clarity in public policy will moderate valuation volatility in clean technology investments [14][15] - Management expressed confidence in achieving an expected return on equity of 8.8% at Avista Utilities, while acknowledging potential for additional growth [21][35] Other Important Information - The company has available liquidity of $106 million under its committed line of credit and $42 million under its letter of credit facility as of June 30 [18] - S&P removed the negative watch from the company's credit rating, indicating strength in its balance sheet and business plans [19] Q&A Session Summary Question: Characterization of the 3,000 megawatts of large load in discussions - Management indicated that the 3,000 megawatts in the pipeline includes a variety of load types, not limited to data centers or high-tech manufacturing, and that the RFP responses will help inform these discussions [27][28] Question: Comfort with the high end of the RFP of 400 megawatts - Management expressed confidence in having sufficient opportunities to support conversations with potential customers based on the 80 bids received [29] Question: Outlook on exit or monetization opportunities for non-regulated businesses - Management is analyzing future strategies for non-regulated businesses and is considering moderating budgets while assessing the clean energy landscape [30][31] Question: Potential upside to close the regulatory gap for ROE - Management stated that while the 8.8% ROE is achievable, they are focused on ensuring that the number is realistic and based on current opportunities for growth [35]

Financial Data and Key Metrics Changes - Consolidated earnings for Q2 2025 were $1.15 per diluted share, down from $1.20 in Q2 2024, reflecting a decrease of approximately 4.17% [4] - Year-to-date results for Avista Utilities showed earnings of $1.25 per diluted share, representing a nearly 7% increase over the same period in 2024 [5] - Consolidated earnings were impacted by valuation losses of $0.12 per diluted share in Q2 2025, primarily due to investments in clean technology focused funds [11][12] Business Line Data and Key Metrics Changes - Avista Utilities' performance remained strong, supported by constructive regulatory outcomes and diligent cost management [11] - The company expects capital expenditures of $525 million in 2025, with a projected total of nearly $3 billion from 2025 to 2029, indicating an annual growth of 56% [16][17] Market Data and Key Metrics Changes - The clean energy sector faced headwinds, affecting consolidated earnings performance in Q2 2025 [5] - Valuations within the clean technology investment portfolio were significantly impacted by shifts in public policy and market sentiment [6][12] Company Strategy and Development Direction - The company is focused on serving customers and communities while ensuring reliable energy provision, as evidenced by the issuance of an RFP for 100 to 425 megawatts of generation [7] - The RFP process received over 80 bids, including various resource options such as wind, solar, and natural gas, indicating a broad approach to meeting future energy needs [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future opportunities, particularly in relation to large load customers, with over 3,000 megawatts of requests in the pipeline [9] - The company confirmed its consolidated earnings guidance for 2025, expecting a range of $2.52 to $2.72 per diluted share, with Avista Utilities contributing toward the upper end of $2.43 to $2.61 per diluted share [18][19] Other Important Information - The company has available liquidity of $106 million under its committed line of credit and $42 million under its letter of credit facility as of June 30 [17] - S&P removed the negative watch from the company's credit rating, indicating strength in its balance sheet and business plans [18] Q&A Session Summary Question: Characterization of the 3,000 megawatts of large load in discussions - The 3,000 megawatts in the pipeline includes a variety of load types, not limited to data centers or high-tech manufacturing, and the RFP responses will help inform these discussions [25][26] Question: Potential for exit or monetization opportunities in other businesses - The company is analyzing its non-regulated businesses and considering moderation of budgets while maintaining strategic benefits from clean technology investments [28][30] Question: Outlook for wildfires in the region - Fire activity has been above normal, but the company has not seen significant starts in August and is employing mitigation tactics to minimize risks [42][44]

Financial Performance - Q2 2025 earnings per diluted share were $0.17, compared to $0.29 in Q2 2024[8] - Year-to-date 2025 earnings per diluted share were $1.15, compared to $1.20 year-to-date 2024[8] - Avista Utilities Q2 2025 earnings per diluted share were $0.28, compared to $0.31 in Q2 2024[8] - AEL&P Q2 2025 earnings per diluted share were $0.01, same as Q2 2024[8] - The company expects to be at the low end of its consolidated guidance range due to $0.15 per diluted share of losses at its other businesses recorded in the first half of the year[24] Regulatory Outcomes - Washington: Base electric revenue increase of $11.9 million (2%) in year 1 and $68.9 million (11.6%) in year 2; Base gas revenue increase of $14.2 million (11.2%) in year 1 and $4.0 million (2.8%) in year 2[12] - Idaho: Base electric revenue increase of $19.5 million (6.3%) in year 1 and $14.7 million (4.5%) in year 2; Base gas revenue increase of $4.6 million (9.2%) in year 1 and $0.2 million (0.4%) in year 2[15] Capital Investments and Liquidity - Avista Utilities expects to spend between $525 million and $650 million annually on capital projects from 2025-2029[17] - The company issued $35 million in common stock through June 30, 2025[22] - The company has $148 million in available liquidity as of June 30, 2025[22] Earnings Guidance - The company provides 2025 earnings guidance for Avista Utilities of $2.43-$2.61 per share and for AEL&P of $0.09-$0.11 per share, resulting in consolidated earnings guidance of $2.52-$2.72 per share[23]

Core Insights - Avista Corp. reported a net income of $14 million for Q2 2025, a decrease from $23 million in Q2 2024, and year-to-date net income of $93 million, slightly down from $94 million in the same period last year [1][2][3] - Earnings per diluted share for Q2 2025 were $0.17, down from $0.29 in Q2 2024, while year-to-date earnings per diluted share were $1.15, compared to $1.20 in 2024 [1][2][3] - The company expressed disappointment over lower valuations in its investment portfolio, particularly in clean technology, due to shifting public policy and sentiment [1] Financial Performance - Avista Utilities contributed $23 million to net income in Q2 2025, down from $24 million in Q2 2024, and $101 million year-to-date, up from $91 million [1][2] - AEL&P's net income remained stable at $1 million for both Q2 2025 and Q2 2024, but year-to-date income decreased from $5 million in 2024 to $4 million in 2025 [1][2] - The other non-reportable segment incurred a loss of $10 million in Q2 2025, compared to a loss of $2 million in Q2 2024, and a loss of $12 million year-to-date, up from $2 million in 2024 [1][2] Revenue and Margins - Electric utility margin increased by $14 million in Q2 2025, attributed to general rate cases, customer growth, and non-decoupled load growth [4] - Natural gas utility margin rose by $5 million in Q2 2025, also due to general rate cases and customer growth [4] - Other operating expenses increased by $11 million in Q2 2025, driven by higher employee salaries, benefits, and thermal generation costs [5] Capital Expenditures and Investments - Avista Utilities' capital expenditures for the first half of 2025 were $236 million, with expectations of approximately $525 million for the full year [11][12] - AEL&P's capital expenditures were $10 million in the first half of 2025, with a projected total of $21 million for the year [12] - The company plans to invest $5 million in non-regulated investment opportunities and economic development projects in 2025 [13] Guidance and Outlook - Avista Corp. confirmed its 2025 consolidated earnings guidance in the range of $2.52 to $2.72 per diluted share, expecting to be at the low end due to losses in other businesses [14] - Avista Utilities is projected to contribute earnings between $2.43 and $2.61 per diluted share, supported by strong performance and regulatory outcomes [15] - AEL&P is expected to contribute earnings in the range of $0.09 to $0.11 per diluted share in 2025 [16]

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) Avista Corp. reported decreased Q2 2025 net income and diluted EPS due to losses in other non-reportable segments, with year-to-date results showing similar trends [Q2 and YTD 2025 Consolidated Results](index=1&type=section&id=Q2%20and%20YTD%202025%20Consolidated%20Results) Avista Corp. reported Q2 2025 net income of $14 million and diluted EPS of $0.17, down from Q2 2024, with year-to-date figures also showing a decline in diluted EPS | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------ | :------ | :------ | :------- | :------- | | **Net Income (Loss) ($M):** | | | | | | Avista Utilities | $23 | $24 | $101 | $91 | | AEL&P | $1 | $1 | $4 | $5 | | Other non-reportable loss | $(10) | $(2) | $(12) | $(2) | | **Total net income** | **$14** | **$23** | **$93** | **$94** | | **EPS (Diluted):** | | | | | | Avista Utilities | $0.28 | $0.31 | $1.25 | $1.17 | | AEL&P | $0.01 | $0.01 | $0.05 | $0.06 | | Other non-reportable loss | $(0.12) | $(0.03) | $(0.15) | $(0.03) | | **Total diluted EPS** | **$0.17** | **$0.29** | **$1.15** | **$1.20** | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO noted strong core utility operations offsetting investment portfolio losses, expecting consolidated earnings at the low end of guidance and Avista Utilities at the upper end - Core utility operations showed strength, but investment portfolio valuations, especially in clean technology, were negatively impacted by shifting public policy and sentiment[1](index=1&type=chunk) - Recent multiyear rate plans in Washington, Oregon, and Idaho increase confidence in Avista Utilities' earnings, which are expected to be toward the upper end of guidance[1](index=1&type=chunk) - Consolidated earnings are expected to be at the low end of the 2025 guidance range due to unrealized losses on investments[1](index=1&type=chunk) [Analysis of Consolidated Earnings](index=2&type=section&id=Analysis%20of%20Consolidated%20Earnings) This section details the factors influencing Avista Corp.'s net income and EPS for Q2 and YTD 2025, highlighting utility margin gains offset by increased operating expenses and other business losses [Factors Affecting Net Income and EPS (Q2 2025 vs 2024)](index=2&type=section&id=Factors%20Affecting%20Net%20Income%20and%20EPS%20(Q2%202025%20vs%202024)) Q2 2025 saw increased utility margins from rate cases and customer growth, largely offset by higher operating expenses, depreciation, interest, and significant losses from other businesses | Factor (After-Tax) | Net Income Change ($M) | EPS Change | | :-------------------------- | :--------------------- | :--------- | | **2024 consolidated earnings** | **$23** | **$0.29** | | Avista Utilities: | | | | Electric utility margin | $14 | $0.17 | | Natural gas utility margin | $5 | $0.06 | | Other operating expenses | $(11) | $(0.14) | | Depreciation & amortization | $(3) | $(0.04) | | Interest expense | $(1) | $(0.01) | | Other | $(2) | $(0.03) | | Income tax at effective rate | $(3) | $(0.04) | | Total Avista Utilities | $(1) | $(0.03) | | AEL&P earnings | $0 | $0 | | Other businesses earnings | $(8) | $(0.09) | | **2025 consolidated earnings** | **$14** | **$0.17** | - Electric utility margin increased by **$14 million** (after-tax) due to general rate cases, customer growth, and non-decoupled load growth[2](index=2&type=chunk)[3](index=3&type=chunk) - Natural gas utility margin increased by **$5 million** (after-tax) primarily from rate cases and customer growth[2](index=2&type=chunk)[3](index=3&type=chunk) - Other operating expenses increased by **$11 million** (after-tax) due to higher employee costs, thermal generation costs, and increased amortizations and wildfire mitigation/insurance costs (with corresponding revenue increases)[2](index=2&type=chunk)[3](index=3&type=chunk) [Factors Affecting Net Income and EPS (YTD 2025 vs 2024)](index=2&type=section&id=Factors%20Affecting%20Net%20Income%20and%20EPS%20(YTD%202025%20vs%202024)) Year-to-date, Avista Utilities' margins grew significantly, but increased operating expenses and substantial losses from other businesses led to a slight consolidated net income decrease and a larger EPS decline | Factor (After-Tax) | Net Income Change ($M) | EPS Change | | :-------------------------- | :--------------------- | :--------- | | **2024 consolidated earnings** | **$94** | **$1.20** | | Avista Utilities: | | | | Electric utility margin | $42 | $0.52 | | Natural gas utility margin | $12 | $0.15 | | Other operating expenses | $(24) | $(0.30) | | Depreciation & amortization | $(5) | $(0.07) | | Interest expense | $(1) | $(0.01) | | Other | $(5) | $(0.07) | | Income tax at effective rate | $(9) | $(0.11) | | Dilution on earnings | n/a | $(0.03) | | Total Avista Utilities | $10 | $0.08 | | AEL&P earnings | $(1) | $(0.01) | | Other businesses earnings | $(10) | $(0.12) | | **2025 consolidated earnings** | **$93** | **$1.15** | - The effective tax rate for the first half of 2025 was **12.3%**, up from **2.9%** in the prior year, primarily due to a decrease in tax customer credits[9](index=9&type=chunk) - Losses at other businesses increased by **$10 million** (after-tax) year-to-date due to higher net investment losses from fair value changes and recognition of equity method investment losses[2](index=2&type=chunk)[9](index=9&type=chunk) [Liquidity and Capital Resources](index=3&type=section&id=Liquidity%20and%20Capital%20Resources) Avista Corp. maintained adequate liquidity as of June 30, 2025, and outlined debt and equity issuances along with significant capital expenditure plans for Avista Utilities and AEL&P [Liquidity Position](index=3&type=section&id=Liquidity%20Position) As of June 30, 2025, Avista Corp. had $106 million in available liquidity under its committed line of credit and $42 million under its letter of credit facility | Entity | Available Liquidity (as of June 30, 2025) | | :-------------------- | :---------------------------------------- | | Avista Corp. (committed line of credit) | $106 million | | Avista Corp. (letter of credit facility) | $42 million | | AEL&P (line of credit) | $9 million | [Debt and Equity Issuances](index=3&type=section&id=Debt%20and%20Equity%20Issuances) Avista Corp. issued $120 million in long-term debt in July 2025 and expects to issue up to $80 million in common stock for the year - Issued **$120 million** of long-term debt in July 2025 to repay committed line of credit borrowings; no further long-term debt issuances expected in 2025[5](index=5&type=chunk) - AEL&P entered into a **$20 million** term loan in July 2025 to repay its line of credit and fund capital expenditures[5](index=5&type=chunk) - Expects to issue up to **$80 million** of common stock in 2025, including **$35 million** issued in the first half[5](index=5&type=chunk) [Capital Expenditures and Investments](index=3&type=section&id=Capital%20Expenditures%20and%20Investments) Avista Utilities' capital expenditures were $236 million in H1 2025, with $525 million expected for the year and $3 billion over five years | Entity | H1 2025 Capital Expenditures | 2025 Expected Capital Expenditures | 5-Year (2025-2029) Expected Capital Expenditures | | :-------------------- | :--------------------------- | :--------------------------------- | :----------------------------------------------- | | Avista Utilities | $236 million | ~$525 million | $3 billion (5-6% annual growth) | | AEL&P | $10 million | $21 million | N/A | | Other businesses | N/A | $5 million | N/A | [Earnings Guidance and Outlook](index=3&type=section&id=Earnings%20Guidance%20and%20Outlook) Avista Corp. confirmed its 2025 consolidated earnings guidance at the low end of the range, while Avista Utilities is expected to perform at the upper end, and AEL&P has its own specific guidance [2025 Consolidated Guidance](index=3&type=section&id=2025%20Consolidated%20Guidance) Avista Corp. confirmed its 2025 consolidated earnings guidance of $2.52 to $2.72 per diluted share, expecting to be at the low end due to investment losses - Confirmed 2025 consolidated earnings guidance range of **$2.52 to $2.72 per diluted share**[9](index=9&type=chunk) - Expects to be at the low end of the consolidated range due to **$0.15 per diluted share** of losses from other businesses in the first half of 2025[9](index=9&type=chunk) [Avista Utilities Guidance](index=4&type=section&id=Avista%20Utilities%20Guidance) Avista Utilities is projected to contribute towards the upper end of its $2.43 to $2.61 per diluted share guidance for 2025, despite an anticipated ERM impact - Avista Utilities is expected to contribute toward the upper end of a range of **$2.43 to $2.61 per diluted share** in 2025[10](index=10&type=chunk) - Guidance for Avista Utilities includes an expected **$0.12 negative impact** from the ERM in 2025, with **$0.08** already absorbed in the first half[10](index=10&type=chunk) [AEL&P Guidance and Long-Term Growth](index=4&type=section&id=AEL%26P%20Guidance%20and%20Long-Term%20Growth) AEL&P is expected to contribute $0.09 to $0.11 per diluted share in 2025, with long-term earnings growth projected at 4-6 percent - AEL&P is expected to contribute in the range of **$0.09 and $0.11 per diluted share** in 2025[11](index=11&type=chunk) - Long-term earnings growth is expected in the **4-6 percent range** from the forecast 2025 base year[11](index=11&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) This section defines utility margin as a non-GAAP measure to enhance understanding of operating performance and provides a reconciliation to GAAP operating revenues [Utility Margin Definition and Purpose](index=4&type=section&id=Utility%20Margin%20Definition%20and%20Purpose) Electric and natural gas utility margin are non-GAAP measures used to clarify operating performance by illustrating the impact of loads, rates, and supply costs - Electric and natural gas utility margin are non-GAAP financial measures[13](index=13&type=chunk) - These measures enhance understanding of operating performance by showing the impact of changes in loads, rates, and supply costs[14](index=14&type=chunk) - They are not intended to replace utility operating revenues as determined in accordance with GAAP[14](index=14&type=chunk) [Reconciliation of Utility Operating Revenues to Utility Margin](index=4&type=section&id=Reconciliation%20of%20Utility%20Operating%20Revenues%20to%20Utility%20Margin) Avista Utilities' total utility margin, net of tax, increased for both Q2 and YTD 2025 compared to 2024, primarily driven by electric utility margin growth | Metric (After-Tax, $M) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :----------------------- | :------ | :------ | :------- | :------- | | **For the three months ended June 30:** | | | | | | Operating revenues | $400 | $391 | N/A | N/A | | Resource costs | $129 | $143 | N/A | N/A | | Income taxes | $56 | $52 | N/A | N/A | | **Utility margin, net of tax** | **$215** | **$196** | N/A | N/A | | **For the six months ended June 30:** | | | | | | Operating revenues | N/A | N/A | $1,004 | $986 | | Resource costs | N/A | N/A | $385 | $436 | | Income taxes | N/A | N/A | $131 | $116 | | **Utility margin, net of tax** | N/A | N/A | **$488** | **$434** | - Total utility margin, net of tax, increased from **$196 million** in Q2 2024 to **$215 million** in Q2 2025[15](index=15&type=chunk) - Total utility margin, net of tax, increased from **$434 million** in YTD 2024 to **$488 million** in YTD 2025[15](index=15&type=chunk) [Company Overview](index=5&type=section&id=Company%20Overview) Avista Corp. is an energy company serving approximately 423,000 electric and 383,000 natural gas customers across a 30,000 square mile service territory, with AEL&P serving Juneau, Alaska - Avista Corp. is an energy company providing electric service to approximately **423,000 customers** and natural gas to approximately **383,000 customers**[17](index=17&type=chunk) - Service territory covers **30,000 square miles** in eastern Washington, northern Idaho, and parts of southern and eastern Oregon, with a population of **1.7 million**[17](index=17&type=chunk) - AEL&P, an Avista subsidiary, provides retail electric service to **18,000 customers** in Juneau, Alaska[17](index=17&type=chunk) [Forward-Looking Statements and Risk Factors](index=5&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section outlines various risks, including regulatory, operational, climate change, cybersecurity, technology, strategic, external mandates, financial, energy commodity, and compliance risks, that could materially affect future results [General Disclaimer](index=5&type=section&id=General%20Disclaimer) The news release contains forward-looking statements subject to numerous risks and uncertainties that could cause actual results to differ materially from expectations - The news release contains forward-looking statements about future financial performance, cash flows, capital expenditures, and operational plans[18](index=18&type=chunk) - These statements are subject to risks, uncertainties, and factors, many beyond the company's control, that could cause actual results to differ materially[18](index=18&type=chunk) [Utility Regulatory Risk](index=5&type=section&id=Utility%20Regulatory%20Risk) Risks include adverse regulatory decisions impacting cost recovery, return on investment, disallowance of costs, and potential loss of regulatory accounting treatment - Regulatory decisions affecting cost recovery and reasonable return, including disallowance or delay in recovery of capital investments, operating costs, and commodity costs[19](index=19&type=chunk) - Risk of losing regulatory accounting treatment, which could require write-offs of regulatory assets and loss of deferral/recovery mechanisms[19](index=19&type=chunk) [Operational Risk](index=5&type=section&id=Operational%20Risk) Operational risks include weather impacts, wildfires, natural disasters, geopolitical conflicts, infrastructure disruptions, workforce issues, and increasing costs - Weather conditions impacting energy demand, electric generating capability (hydroelectric, wind), and wholesale energy markets[20](index=20&type=chunk) - Wildfires ignited by equipment, severe weather, natural disasters, political unrest, and conflicts disrupting energy generation, transmission, and distribution[20](index=20&type=chunk) - Workforce issues (collective bargaining, key executive loss, worker availability), increasing costs of insurance, and delays/changes in construction costs[21](index=21&type=chunk) [Climate Change Risk](index=6&type=section&id=Climate%20Change%20Risk) Climate change risks involve increased severe weather, changes in water resources for hydroelectric facilities, and long-term shifts affecting demand and costs - Increasing frequency and intensity of severe weather or natural disasters (e.g., wildfires) disrupting energy infrastructure and affecting fuel/material costs[22](index=22&type=chunk) - Changes in water resource use, availability, or rights needed for hydroelectric operations[22](index=22&type=chunk) - Long-term climate and weather changes affecting customer demand, streamflows for hydroelectric generation, and costs of generation, transmission, and distribution[22](index=22&type=chunk) [Cybersecurity Risk](index=6&type=section&id=Cybersecurity%20Risk) Cybersecurity risks include attacks on operational and administrative systems, potentially causing damage, disruptions, data breaches, and significant liabilities - Cyberattacks on operating systems for electric generation, transmission, and distribution facilities, potentially causing damage, disruption, liabilities, and costs[23](index=23&type=chunk) - Cyberattacks on administrative systems (customer billing, accounting) or systems of vendors, leading to business disruption, release of private information, and associated costs[23](index=23&type=chunk) [Technology Risk](index=6&type=section&id=Technology%20Risk) Technology risks encompass obsolescence, new cybersecurity threats from AI, changes in IT system costs, and insufficient workforce technology skills - Changes in technologies potentially rendering current technology obsolete or introducing new cybersecurity risks, especially with developmental technologies like generative AI[24](index=24&type=chunk) - Changes in the use, perception, or regulation of generative AI technologies, which could limit utilization, increase regulatory scrutiny, or create intellectual property uncertainties[24](index=24&type=chunk) - Changes in costs impeding the implementation of new IT systems or the operation/maintenance of current production technology[24](index=24&type=chunk) [Strategic Risk](index=6&type=section&id=Strategic%20Risk) Strategic risks include changes in customer base, negative publicity, shifts in business plans, competition, increased earnings volatility from non-regulated activities, and municipalization - Growth or decline of customer base due to new uses or decline in existing services, including the trend toward distributed generation[25](index=25&type=chunk) - Potential effects of negative publicity on business practices, reputation, and common stock price[25](index=25&type=chunk) - Wholesale and retail competition, alternative energy sources, customer-owned power resource technologies, and non-regulated activities increasing earnings volatility and investment losses[25](index=25&type=chunk) [External Mandates Risk](index=8&type=section&id=External%20Mandates%20Risk) Risks from external mandates include changes in environmental laws, initiatives impacting generating resources or natural gas usage, political pressures, and increasing costs from tariffs - Changes in environmental laws, regulations, decisions, and policies, including responses to climate change concerns and more stringent requirements for air/water quality[26](index=26&type=chunk) - Potential effects of federal, state, or local initiatives/legislation, including restrictions on greenhouse gas emissions or natural gas usage[26](index=26&type=chunk) - Political pressures or regulatory practices that could constrain or add cost burdens to distribution systems (e.g., accelerated adoption of distributed generation) or energy supply sources[26](index=26&type=chunk) [Financial Risk](index=8&type=section&id=Financial%20Risk) Financial risks include financing ability, interest rate changes, commodity market volatility, actuarial assumptions, legal outcomes, economic conditions, and declining demand - Ability to obtain financing through debt/equity securities, affected by credit ratings, interest rates, capital market, and global economic conditions[27](index=27&type=chunk) - Volatility in energy commodity markets affecting hedging, cash flow, collateral requirements, and credit risk[27](index=27&type=chunk) - Economic conditions in service areas affecting customer demand, and declining electricity/natural gas demand due to energy efficiency, conservation, or increased electrification[27](index=27&type=chunk) [Energy Commodity Risk](index=8&type=section&id=Energy%20Commodity%20Risk) Energy commodity risks involve market volatility, counterparty default, environmental regulations affecting power supply, and incidents limiting energy supply or increasing replacement commodity costs - Volatility and illiquidity in wholesale energy markets, impacting operating income, cash requirements, wholesale sales value, and collateral[28](index=28&type=chunk) - Default or nonperformance by parties from whom capacity or energy is purchased/sold[28](index=28&type=chunk) - Potential environmental regulations or lawsuits affecting the ability to utilize or causing obsolescence of power supply resources[28](index=28&type=chunk) [Compliance Risk](index=8&type=section&id=Compliance%20Risk) Compliance risks include changes in laws and regulations impacting operations and costs, and the ability to meet license and permit terms cost-effectively - Changes in laws, regulations, decisions, and policies at federal, state, or local levels impacting electric and gas operations and costs[29](index=29&type=chunk) - Ability to comply with terms of licenses and permits for hydroelectric or thermal generating facilities at cost-effective levels[29](index=29&type=chunk)