Avista (NYSE:AVA) reported higher full-year 2025 earnings and outlined a utility-focused strategy that management said is intended to reduce noise from non-regulated business volatility, while highlighting new resource selections, an updated capital plan, and a multi-year rate filing in Washington.
2025 earnings results and utility focus
Investor Relations Manager Stacy Walters said Avista’s 2025 consolidated earnings were $2.38 per diluted share, up from $2.29 in 2024. On a non-GAAP basis focused on the core utility segments (Avista Utilities and AEL&P), 2025 non-GAAP utility earnings were $2.55 per diluted share, compared to $2.38 in 2024.
Management emphasized that the shift toward discussing non-GAAP utility results reflects a focus on core operations. Walters noted that unrealized gains and losses in non-regulated businesses can be significant but are difficult to predict and largely outside management’s control.
Colstrip-related impact and regulatory backdrop
President and CEO Heather Rosentrater said 2025 Avista Utilities results were affected by “the one-time adjustment of Colstrip-related investments,” which reduced earnings per share by $0.07, along with other timing-related items. Despite those headwinds, Rosentrater said results landed within the company’s original utility guidance range. She added that excluding those items, utility results would have been above the midpoint of the 2025 utilities earnings guidance.
CFO Kevin Christie also addressed the issue, calling the late-December Washington Commission order requiring an adjustment to recovery of Colstrip investments a disappointment. He said that absent the order, Avista Utilities would have reported earnings above the midpoint of 2025 guidance for the segment.
On the regulatory front, Christie said Avista filed a four-year rate plan with the Washington Utilities and Transportation Commission in January. He said the “single largest driver” of the requested rate increase in the first rate year is power supply cost, and he emphasized that establishing an appropriate baseline for power supply costs is central to the plan’s success. Avista expects the initial settlement conference on May 22 and evidentiary hearings on September 17 and 18.
Resource selections from RFP and large-load developments
Rosentrater highlighted projects selected from Avista’s resource request for proposals, describing them as additions intended to bring “valuable, resilient energy solutions” to the portfolio. The selections included:
- An upgrade to existing natural gas turbines, adding 14 MW of capacity without increasing carbon emissions
- A 100 MW battery energy storage system in eastern Washington under a build-transfer agreement
- A 200 MW wind power purchase agreement from Montana
- Approximately 40 MW of demand response programs across Avista’s service territory
Rosentrater also said the company received a “significant deposit” from a data center developer planning to locate in Avista’s Washington service territory. The initial load is expected to be 125 MW, “quickly ramping up” to a maximum of 500 MW, with initial load expected online by 2030. Including that customer, Rosentrater said approximately 1,700 MW remain in Avista’s queue of potential large-load customers, and the company continues to receive inbound interest.
During the Q&A, management said the next step for the data center customer is moving toward a memorandum of understanding, with an expectation to progress toward an MOU in the next “90 or so days.” Christie said Avista would seek protections for existing customers, including collateral and security in addition to the deposit, to avoid customer impacts if a large-load project did not move forward.
Christie also said Avista would likely pursue a “special contract” filing with commissions in both Washington and Idaho for large customers, describing the approach as standard in those states.
Capital plan, financing updates, and 2026 utility earnings guidance
Christie said capital expenditures at Avista Utilities were $553 million in 2025 and are expected to be $585 million in 2026. From 2026 through 2030, the company expects capital expenditures of $3.4 billion, which he described as a base capital compound growth rate of 5%. He said this includes an additional $164 million in the capital plan tied to the self-build natural gas combustion turbine upgrades and the build-transfer battery storage project selected in the RFP.
Separately, Christie said Avista continues to estimate up to $350 million of incremental capital investment to integrate a new large customer, which would be additional to the five-year plan. If included, he said the compound capital growth rate would be 12%. In response to analyst questions, Christie said incremental capital beyond the base plan would be funded with an expected 50/50 approach between debt and equity, and he said the company would consider hybrids if additional capital opportunities materialize.
On financing, Christie said Avista issued $120 million of long-term debt and $78 million of common stock in 2025. For 2026, the company now expects to issue approximately $230 million of long-term debt and up to $90 million of common stock, an increase from the figures disclosed in the third quarter. Christie attributed the update to higher capital expenditures and the need for additional liquidity given the timing of deferral recoveries, while maintaining a prudent capital structure.
Avista initiated 2026 non-GAAP utility earnings guidance of $2.52 to $2.72 per diluted share. Christie said the guidance reflects a one-time $0.12 decrease tied to a large industrial customer’s planned return to procuring power independently sooner in 2026 than Avista had expected. He also said guidance includes an expected negative impact from the company’s Energy Recovery Mechanism of about $0.10 at the midpoint, based on the 90% customer/10% company sharing band. He added that the current hydro forecast shows normal generation levels and that being above or below normal would not materially change the company’s ERM position.
Dividend update and longer-term targets
Rosentrater said Avista’s board increased the dividend to $1.97 per share and noted that the company has raised its dividend for 24 consecutive years. She said the company is targeting a payout range of 60% to 70%, compared with a prior target range of 65% to 75%, and expects dividend growth to run below earnings-per-share growth until the company reaches its target payout range.
Looking longer term, Christie reiterated an expectation for earnings to grow 4% to 6% from the midpoint of Avista’s 2025 consolidated earnings guidance. He also said the company is raising its long-term expected return on equity at Avista Utilities to approximately 9% (excluding ERM impacts), reflecting expected structural lag of 60 basis points. For 2026, Christie said Avista expects utility ROE “in the low to mid 8s” when including ERM impacts, given the forecast headwinds described.
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.
