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AVISTA CORP

AVISTA CORPAVAEarnings & Financial Report

NYSE · Utilities · Electric & Other Services Combined

Avista Corporation is an American energy company which generates and transmits electricity and distributes natural gas to residential, commercial, and industrial customers. Approximately 1,550 employees provide electricity, natural gas, and other energy services to 359,000 electric and 320,000 natural gas customers in three western states. The service territory covers 30,000 square miles (78,000 km2) in eastern Washington, northern Idaho, and parts of southern and eastern Oregon, with a popul...

What changed in AVISTA CORP's 10-K — 2024 vs 2025

Top changes in AVISTA CORP's 2025 10-K

398 paragraphs added · 353 removed · 285 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

78 edited+16 added−3 removed76 unchanged
A successful attack on our operating networks could impair the operation of our electric and/or natural gas utility facilities, possibly resulting in the inability to provide electric and/or natural gas service for extended periods of time. We continually reinforce and update our defensive systems and comply with the NERC’s reliability standards. See “Reliability Standards,” “Item 1A.
A successful attack on our operating networks could impair the operation of our electric and/or natural gas utility facilities, possibly resulting in our inability to provide electric and/or natural gas service for extended periods of time. We continually reinforce and update our defensive systems and comply with the NERC’s reliability standards. See “Reliability Standards,” “Item 1A.
There is no assurance that any existing license will be renewed upon its expiration or, if renewed, that the renewal would be without significant modifications. Future Reso urce Needs Avista Utilities has operational strategies to provide sufficient resources to meet our energy requirements under a range of operating conditions.
There is no assurance that any existing license will be renewed upon its expiration or, if renewed, that the renewal would be without significant modifications. Future Electric Reso urce Needs Avista Utilities has operational strategies to provide sufficient resources to meet our energy requirements under a range of operating conditions.
The following is an overview of some of our key human capital initiatives intended to inspire engaged and thriving employees and other stakeholders, such as our customers and business partners. 6 AVISTA CORPORATION Employee Attraction, Development and Retention We strive to hire and retain talented people who are innovative and skilled so we can continue to provide safe, reliable and affordable service to our customers and advance the Company at the same time.
The following is an overview of some of our key human capital initiatives intended to inspire engaged and thriving employees and other stakeholders, such as our customers and business partners. 7 AVISTA CORPORATION Employee Attraction, Development and Retention We strive to hire and retain talented people who are innovative and skilled so we can continue to provide safe, reliable and affordable service to our customers and advance the Company at the same time.
We generally have more pipeline and storage capacity than what is needed during periods other than a peak day. We optimize our natural gas resources by using market opportunities to generate economic value that helps mitigate fixed costs. Wholesale sales are delivered through wholesale market facilities outside of our natural gas distribution system.
We generally have more pipeline and storage capacity than is needed during periods other than on a peak day. We optimize our natural gas resources by using market opportunities to generate economic value that helps mitigate fixed costs. Wholesale sales are delivered through wholesale market facilities outside of our natural gas distribution system.
Based on these projections, we plan and execute a series of transactions to hedge a portion of our customers' projected natural gas requirements through forward market transactions and derivative instruments. These transactions may extend for multiple years into the future. We also leave a portion of our natural gas supply requirements unhedged for purchase in the short-term spot markets.
Based on these projections, we plan and execute a series of transactions to hedge a portion of our customers' projected natural gas requirements through forward market transactions and derivative instruments. These transactions may extend for multiple years. We also leave a portion of our natural gas supply requirements unhedged for purchase in the short-term spot markets.
Natural gas buyers identify opportunities to purchase lower cost natural gas in the immediate term to inject into storage, and then sell the gas in a forward market to be withdrawn later. The reverse of this type of transaction also occurs. 15 AVISTA CORPORATION These transactions lock in incremental value for customers.
Natural gas buyers identify opportunities to purchase lower cost natural gas in the immediate term to inject into 17 AVISTA CORPORATION storage, and then sell the gas in a forward market to be withdrawn later. The reverse of this type of transaction also occurs. These transactions lock in incremental value for customers.
Jackson Prairie is also used as a variable peaking resource, and to protect from extreme daily price volatility during cold weather or other events affecting the market. Future Resource Needs In March 2023, we filed our 2023 Natural Gas IRP with the WUTC, the IPUC and the OPUC.
Jackson Prairie is also used as a variable peaking resource, and to protect from extreme daily price volatility during cold weather or other events affecting the market. Future Gas Resource Needs In March 2025, we filed our 2025 Natural Gas IRP with the WUTC, the IPUC and the OPUC.
Properties - Avista Utilities” for the present generating capabilities of the above hydroelectric resources. 8 AVISTA CORPORATION The following graph shows Avista Utilities' hydroelectric generation (in thousands of MWhs) during the year ended December 31: (1) Normal hydroelectric generation is determined by reference to the effect of upstream dam regulation on median natural water flow.
Properties - Avista Utilities” for the present generating capabilities of the above hydroelectric resources. The following graph shows Avista Utilities' hydroelectric generation (in thousands of MWhs) during the year ended December 31: (1) Normal hydroelectric generation is determined by reference to the effect of upstream dam regulation on median natural water flow.
This includes, among other resources, hydroelectric projects, cogeneration projects and wind generation projects at rates approved by the WUTC and the IPUC. See “Avista Utilities Electric Operating Statistics – Electric Operations” below for annual quantities of purchased power, wholesale power sales and power from exchanges in 2024, 2023 and 2022.
This includes, among other resources, hydroelectric projects, cogeneration projects and wind generation projects at rates approved by the WUTC and the IPUC. See “Avista Utilities Electric Operating Statistics – Electric Operations” below for annual quantities of purchased power, wholesale power sales and power from exchanges in 2025, 2024 and 2023.
As of December 31, 2024, we have two reportable business segments as follows: • Avista Utilities – an operating division of Avista Corp., comprising the regulated utility operations in Washington, Idaho, Oregon and Montana. Avista Utilities provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho.
As of December 31, 2025, we have two reportable business segments as follows: • Avista Utilities – an operating division of Avista Corp., comprising the regulated utility operations in Washington, Idaho, Oregon and Montana. Avista Utilities provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho.
As part of the process of balancing natural gas retail load requirements with resources, we engage in the wholesale purchase and sale of natural gas. We plan for sufficient natural gas delivery capacity to serve our retail customers for a theoretical peak 14 AVISTA CORPORATION day event.
As part of the process of balancing natural gas retail load requirements with resources, we engage in the wholesale purchase and sale of natural gas. We plan for sufficient natural gas delivery capacity to serve our retail customers for a theoretical peak 16 AVISTA CORPORATION day event.
A variety of programs and initiatives are in place to help employees complete their work safely through heightened vigilance, hazard recognition, defensive strategies, lessons learned, human and organizational performance and other tools intended to ensure resilience in varying and unpredictable conditions.
A variety of programs and initiatives are in place to help employees complete their work safely through heightened vigilance, hazard recognition, defensive strategies, lessons learned, human and organizational performance and other tools intended to strengthen resilience in varying and unpredictable conditions.
Regional Capacity Issues Purchases of capacity and energy at any time are dependent upon the availability of excess capacity in the west region at that time. Many coal-fired electric generating stations throughout the western United States are scheduled for retirement in the next several years.
Purchases of capacity and energy at any time are dependent upon the availability of excess capacity in the west region at that time. Many coal-fired electric generating stations throughout the western United States are scheduled for retirement in the next several years.
In general, requests for new retail rates are made based on revenues, operating expenses and net investment for a test year that ended prior to the date of the request, subject to possible adjustments, which differ among the various jurisdictions, designed to reflect the expected revenues, 16 AVISTA CORPORATION operating expenses and net investment during the period new retail rates will be in effect.
In general, requests for new retail rates are made based on revenues, operating expenses and net investment for a test year that ended prior to the date of the request, subject to possible adjustments, which differ among the various jurisdictions, designed to reflect the expected revenues, operating expenses and net investment during the period new retail rates will be in effect.
See “Item 7. Management's Discussion and Analysis – Environmental Matters and Contingencies – Climate Change – Washington Legislation and Regulatory Actions – Clean Energy Transformation Act” and “Colstrip.” In addition to retirement of coal-fired generating stations, some hydroelectric and other generation plants in the region are being considered for possible closure due to environmental and other concerns.
Management's Discussion and Analysis – Environmental Matters and Contingencies – Climate Change – Washington Legislation and Regulatory Actions – Clean Energy Transformation Act” and “Colstrip.” In addition to the retirement of coal-fired generating stations, some hydroelectric and other generation plants in the region are being considered for possible closure due to environmental and other concerns.
Neither the costs nor requirements of participating in NorthernGrid’s coordinated transmission planning activities are expected to materially impact our operations or financial performance. Regional Ene rgy Markets The CAISO operates the Western Energy Imbalance Market (EIM) in the western United States. All investor-owned utilities in the Pacific Northwest are participants in the Western EIM.
Neither the costs nor requirements of participating in NorthernGrid’s coordinated transmission planning activities are expected to materially impact our operations or financial performance. Regional Ene rgy Markets The CAISO operates the Western Energy Imbalance Market (EIM) in the western United States. We are participants in the Western EIM, along with all investor-owned utilities in the Pacific Northwest.
Through our participation in NorthernGrid, we meet the regional transmission planning requirements of FERC Order Nos. 890 and 1000, and follow-on orders. NorthernGrid and its members also work with other western organizations, including WestConnect and the California Independent System Operator (CAISO), to address broader interregional planning.
Through our participation in NorthernGrid, we meet the regional transmission planning requirements of FERC Order Nos. 890 19 AVISTA CORPORATION and 1000, and follow-on orders. NorthernGrid and its members also work with other western organizations, including WestConnect and the California Independent System Operator (CAISO), to address broader interregional planning.
ALASKA ELECTRIC LIGH T AND POWER COMPANY AEL&P is the primary operating subsidiary of AERC, and the sole utility providing electrical energy in Juneau, Alaska. Juneau is a geographically isolated community with no electric interconnections with the transmission facilities of other utilities and no 21 AVISTA CORPORATION pipeline access to natural gas or other fuels.
ALASKA ELECTRIC LIGH T AND POWER COMPANY AEL&P is the primary operating subsidiary of AERC, and the sole utility providing electrical energy in Juneau, Alaska. Juneau is a geographically isolated community with no electric interconnections with the transmission facilities of other utilities and no pipeline access to natural gas or other fuels.
The purchase price is a fixed price per KW of in-service capacity with a fixed decline in the price per KW over the remaining term of the PPA. 10 AVISTA CORPORATION We have exclusive rights to the capacity of Rattlesnake Flat Wind project developed, owned and managed by an unrelated third party and located in Adams County, Washington.
The purchase price is a fixed price per KW of in-service capacity with a fixed decline in the price per KW over the remaining term of the PPA. We have exclusive rights to the capacity of Rattlesnake Flat Wind project developed, owned and managed by an unrelated third party and located in Adams County, Washington.
See “Item 7. Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion on clean energy, including applicable regulations. Wildfire Resiliency Plan We have a wildfire resiliency plan focused on four primary areas: transmission and distribution system hardening, enhanced vegetation management, situational awareness, and operations and response.
Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion on clean energy, including applicable regulations. Wildfire Resiliency Plan We have a wildfire resiliency plan focused on four primary areas: transmission and distribution system hardening, enhanced vegetation management, situational awareness, and operations and response.
Juneau’s economy is primarily driven by government activities, tourism, commercial fishing, and mining, as well as activities as the commercial hub of southeast Alaska. AEL&P owns and operates electric generation, transmission and distribution facilities located in Juneau. AEL&P operates five hydroelectric generation facilities with 102.7 MW of hydroelectric generation capacity.
Juneau’s economy is primarily driven by government activities, tourism, commercial fishing, and mining, as well as activities as the commercial hub of southeast Alaska. 23 AVISTA CORPORATION AEL&P owns and operates electric generation, transmission and distribution facilities located in Juneau. AEL&P operates five hydroelectric generation facilities with 102.7 MW of hydroelectric generation capacity.
AEL&P maintains separate rate tariffs for each of its customer classes, as well as seasonal rates. AEL&P’s operations are subject to regulation by the RCA with respect to customer rates, standard of service, facilities, accounting and certain other matters, but not with respect to the issuance of securities.
AEL&P maintains separate rate tariffs for each of its customer classes, as well as seasonal rates. 24 AVISTA CORPORATION AEL&P’s operations are subject to regulation by the RCA with respect to customer rates, standard of service, facilities, accounting and certain other matters, but not with respect to the issuance of securities.
The reduction of regional generating capacity will have to be offset by the addition of new generating resources and energy storage facilities. Hydroelectri c Licenses Avista Corp. is a licensee under the Federal Power Act (FPA) as administered by the FERC, which includes regulation of hydroelectric generation resources.
The reduction of regional generating capacity will have to be offset by the addition of new generating resources and energy storage facilities. Hydroelectri c Licenses Avista Corp. is a licensee under the FPA as administered by the FERC, which includes regulation of hydroelectric generation resources.
Natural water flow is the flow of the rivers without the influence of dams, whereas regulated water flow reflects water flow changes from upstream dams due to releasing or holding back water. The calculation of normal varies annually due to the timing of upstream dam regulation throughout the year, as well as changes in PUD contracts.
Natural water flow is the flow of the rivers without the influence of dams, whereas regulated water flow reflects water flow changes from upstream dams due to releasing or holding back water. The calculation of 10 AVISTA CORPORATION normal varies annually due to the timing of upstream dam regulation throughout the year, as well as changes in PUD contracts.
Its primary customers include city, state and federal governmental entities located in Juneau, as well as a mine located in the Juneau area. Most of AEL&P’s customers are 22 AVISTA CORPORATION served on a firm basis while certain of its customers, including its largest customer, are served on an interruptible sales basis.
Its primary customers include city, state and federal governmental entities located in Juneau, as well as a mine located in the Juneau area. Most of AEL&P’s customers are served on a firm basis while certain of its customers, including its largest customer, are served on an interruptible sales basis.
Alaska companies includes AERC and AJT Mining, which is a wholly-owned subsidiary of AERC and is an inactive mining company holding certain real estate. 24 AVISTA CORPORATION
Alaska companies includes AERC and AJT Mining, which is a wholly-owned subsidiary of AERC and is an inactive mining company holding certain real estate. 26 AVISTA CORPORATION
Human Capital On December 31, 2024, Avista Utilities employed 1,950 individuals with bargaining unit employees comprising 36 percent of our overall workforce. Our approach to people is a critical strategy to inspire engaged and thriving employees by empowering a high-performing organization where employees are valued, respected and have opportunities to grow.
Human Capital On December 31, 2025, Avista Utilities employed 1,929 individuals with bargaining unit employees comprising 36 percent of our overall workforce. Our approach to people is a critical strategy to inspire engaged and thriving employees by empowering a high-performing organization where employees are valued, respected and have opportunities to grow.
Our rates for retail electric and natural gas services (other than specially negotiated retail rates for industrial or large commercial customers, which are subject to regulatory review and approval) are generally determined on a “cost of service” basis.
Our rates for retail electric and natural gas services (other than specially negotiated retail rates for industrial or large commercial customers, which are subject to regulatory review and approval) are generally determined on a “cost of service” 18 AVISTA CORPORATION basis.
In 2023, our peak electric native load was 1,809 MW, which occurred during the summer, and in 2022, it was 1,860 MW, which occurred during the winter. Electric Resources Avista Utilities has a diverse electric resource mix of Company-owned and contracted hydroelectric, thermal, wind and solar generation facilities, and other contracts for power purchases and exchanges.
In 2024, our peak electric native load was 1,869 MW, which occurred during the winter, and in 2023, it was 1,809 MW, which occurred during the summer. Electric Resources Avista Utilities has a diverse electric resource mix of Company-owned and contracted hydroelectric, thermal, wind and solar generation facilities, and other contracts for power purchases and exchanges.
To implement this process, we make continuing projections of: 7 AVISTA CORPORATION • electric loads at various points in time (ranging from intra-hour to multiple years) based on, among other things, estimates of customer usage and weather, historical data, contract terms, and emerging trends and climate modeling results, • resource availability at these points in time based on, among other things, fuel choices and fuel markets, estimates of snowpack and streamflows, availability of generating units, historic and forward market information, contract terms and experience, and • carbon costs associated with emission reduction legislation and policy.
To implement this process, we make continuing projections of: • electric loads at various points in time (ranging from intra-hour to multiple years) based on, among other things, estimates of customer usage and weather, historical data, contract terms, and emerging trends and climate modeling results, • resource availability at these points in time based on, among other things, fuel choices and fuel markets, estimates of snowpack and streamflows, availability of generating units, historic and forward market information, contract terms and our experience, and • carbon allowance costs and other emission fees associated with emission reduction legislation and policy.
See “Electric Operations” above for additional information on the use of wholesale purchases and sales as part of our resource optimization process and see “Future Resource Needs” below for the magnitude of these power purchase and sales contracts in future periods.
See “Electric Operations” above for additional 12 AVISTA CORPORATION information on the use of wholesale purchases and sales as part of our resource optimization process and see “Future Resource Needs” below for the magnitude of these power purchase and sales contracts in future periods.
(2) Estimated available energy production from Company-owned Boulder Park GS, Kettle Falls CT, Northeast CT and Rathdrum CT resources. (3) Other contracts for power purchases includes power purchase agreements for solar and wind energy. (4) The forecast assumes near normal hydroelectric generation. 12 AVISTA CORPORATION (5) Includes the Lancaster Plant PPA.
(2) Estimated available energy production from Company-owned Boulder Park GS, Kettle Falls CT, Northeast CT and Rathdrum CT resources. (3) Other contracts for power purchases include power purchase agreements for solar and wind energy. (4) The forecast assumes near normal hydroelectric generation. (5) Includes the Lancaster Plant PPA.
Regional Transm ission Planning Beginning with FERC Order No. 888 and continuing with subsequent rulemakings and policies, the FERC has encouraged better coordination and operational consistency aimed to capture efficiencies that might otherwise be gained through the formation of a Regional Transmission Organization or an independent system operator.
Regional Transm ission Planning Beginning with FERC Order No. 888 and continuing with subsequent rulemakings and policies, the FERC has encouraged better coordination and operational consistency aimed at capturing efficiencies that might otherwise be gained through the formation of a Regional Transmission Organization or an independent system operator.
AIDEA issued revenue bonds in 1998 (which were refinanced in 2015) to finance its acquisition of the project. These bonds were outstanding in the amount of $39 million as of December 31, 2024 and mature in January 2034. AEL&P has a PPA and operating and maintenance agreement with the AIDEA to operate and maintain the facility.
AIDEA issued revenue bonds in 1998 (which were refinanced in 2015) to finance its acquisition of the project. These bonds were outstanding in the amount of $36 million as of December 31, 2025 and mature in January 2034. AEL&P has a PPA and operating and maintenance agreement with the AIDEA to operate and maintain the facility.
The following graph shows AEL&P's hydroelectric generation (in thousands of MWhs) during the time periods indicated below: (1) Normal hydroelectric generation is defined as the energy output of the plant during a year with average inflows to the reservoir. As of December 31, 2024, AEL&P served approximately 17,800 customers.
The following graph shows AEL&P's hydroelectric generation (in thousands of MWhs) during the time periods indicated below: (1) Normal hydroelectric generation is defined as the energy output of the plant during a year with average inflows to the reservoir. As of December 31, 2025, AEL&P served approximately 17,600 customers.
This PPA is a finance lease and, as of December 31, 2024, the finance lease obligation was $39 million. Snettisham Electric Company, a non-operating subsidiary of AERC, has the option to purchase the Snettisham project at any time for a price equal to the principal amount of the bonds outstanding at that time.
This PPA is a finance lease and, as of December 31, 2025, the finance lease obligation was $36 million. Snettisham Electric Company, a non-operating subsidiary of AERC, has the option to purchase the Snettisham project at any time for a price equal to the principal amount of the bonds outstanding at that time.
If the required technology is not available or not affordable in the future, we may not meet our goals in the desired timeframe. Meeting our clean energy goals may also require accommodation 13 AVISTA CORPORATION from regulatory agencies. See the discussion under “Electric Resources” for more information on our existing clean electricity sources and efforts to achieve these goals.
If the required technology is not available or not affordable in the future, we may not meet our goals in the desired timeframe. Meeting our clean energy goals may also require accommodation from regulatory agencies. See the discussion under “Electric Resources” for more information on our existing clean electricity sources and efforts to achieve these goals. See “Item 7.
Focus areas for this strategy strive to: • Strengthen employee attraction, engagement, and retention, while building a sense of community and purpose, • Ensure safety and well-being through innovative programs, best practices, tools, and technology, • Expand innovation disciplines, capabilities, and mindsets with cross-departmental interactions and external networks to build the utility of the future.
Focus areas for this strategy strive to: • improve employee engagement, belonging, equity, attraction and retention while building a sense of community and purpose, • support safety and well-being through innovative programs, best practices, tools, and technology, and • expand innovation disciplines, capabilities, and mindsets with cross-departmental interactions and external networks to build the utility of the future.
Among other things, this strategy supports hiring talented people and equipping them with capabilities, tools and a culture that empowers them to pursue great ideas – ideas that engage the imagination, stretch us all and ensure we continue to provide exemplary and cost-effective service.
Among other things, this strategy supports hiring talented people and equipping them with capabilities, tools and a culture that empowers them to pursue great ideas. Such ideas engage the imagination, stretch us all as we continue to provide exemplary and cost-effective service to our customers.
See “Note 22 of the Notes to Consolidated Financial Statements” for further discussion on wildfires. Natural Gas Operations General Avista Utilities provides natural gas distribution services to retail customers in parts of eastern Washington, northern Idaho, and northeastern and southwestern Oregon. Market prices for natural gas, like other commodities, can be volatile.
See “Note 22 of the Notes to Consolidated Financial Statements” for further discussion on wildfire activity and related litigation proceedings. Natural Gas Operations General Avista Utilities provides natural gas distribution services to retail customers in parts of eastern Washington, northern Idaho, and northeastern and southwestern Oregon. Market prices for natural gas, like other commodities, can be volatile.
We work with our employees to reinforce personal responsibility regarding safety and health, and to implement measures to create and maintain a safe work environment. AVISTA U TILITIES Gene ral At the end of 2024, Avista Utilities supplied retail electric service to approximately 422,000 customers and retail natural gas service to approximately 383,000 customers across its service territory.
We work with our employees to reinforce personal responsibility regarding safety and health, and to implement measures to create and maintain a safe work environment. AVISTA U TILITIES Gene ral At the end of 2025, Avista Utilities supplied retail electric service to approximately 429,000 customers and retail natural gas service to approximately 386,000 customers across its service territory.
Examples of carbon emissions reduction strategies include the following: • Diversify or transition from fossil fuel-based natural gas to renewable natural gas, • Reduce natural gas consumption via conservation, energy efficiency and new technologies, and • Purchase carbon offsets as necessary. See “Item 7.
Examples of carbon emissions reduction strategies include the following: • diversify or transition from conventional fossil fuel natural gas to renewable natural gas, hydrogen, and other renewable biofuels, • reduce natural gas consumption via conservation, energy efficiency and new technologies, and • purchase carbon offsets as necessary. See “Item 7.
Our preferred resource strategy calls for the addition of approximately 490 MW of generating capacity by 2030 and a total of approximately 950 MW to be added through 2035. • Customer energy demand is expected to grow an average of 0.9 percent per year over the next 20 years and an average of winter peak demand by 1.12 percent per year over the next 20 years. • The 66 MW Northeast CT will be retired in 2030. • Energy efficiency reduces future demand growth by 32 percent over 20 years. • Demand response programs reduce peak demand by up to 4 percent. • Identifies the proposed North Plains Connector transmission line as a preferred resource alternative along with other transmission upgrades in the inland northwest. • We are projected to exceed CETA's requirements to be greenhouse gas neutral with Washington's electric supply by 2030. • Meeting CETA's 2045 targets will require significant energy transformation including maintaining our existing hydroelectric system and acquiring new energy resources which could include using hydrogen-based fuels, wind, solar and nuclear, and will include long term energy storage.
Our preferred resource strategy calls for the addition of approximately 490 MW of generating capacity by 2030 and a total of approximately 950 MW to be added through 2035. • Customer energy demand is expected to grow an average of 0.9 percent per year over the next 20 years and an average of winter peak demand by 1.12 percent per year over the next 20 years. • The 66 MW Northeast CT will be retired in 2030. 14 AVISTA CORPORATION • Energy efficiency reduces future demand growth by 32 percent over 20 years. • Demand response programs reduce peak demand by up to 4 percent. • Identifies the proposed North Plains Connector transmission line as a preferred resource alternative along with other transmission upgrades in the Inland Northwest. • We are projected to exceed CETA's requirements to be greenhouse gas neutral with Washington's electric supply by 2030. • Meeting CETA's 2045 targets will require significant energy transformation including maintaining our existing hydroelectric system and acquiring new energy resources which could include using hydrogen-based fuels, wind, solar and nuclear, and will include long-term energy storage. 2025 Request for Proposal (RFP) In May 2025, we issued an RFP requesting bids for up to 425 MW of capacity resources to meet modeled load growth needs and anticipated new large loads.
Avista Utilities' service territory covers 30,000 square miles with a population of 1.7 million. Electric O perations General Avista Utilities generates, transmits and distributes electricity, serving electric customers in eastern Washington and northern Idaho and a small number of customers in Montana.
Avista Utilities' service territory covers 34,000 square miles with a population of 1.5 million. 8 AVISTA CORPORATION Electric O perations General Avista Utilities generates, transmits and distributes electricity, serving electric customers in eastern Washington and northern Idaho and a small number of customers in Montana.
These operational strategies consider the amount of energy needed, which varies because of the factors that influence demand over intra-hour, hourly, daily, monthly and annual durations. Our average hourly load was 1,117 aMW in 2024, 1,115 aMW in 2023 and 1,142 aMW in 2022.
These operational strategies consider the amount of energy needed, which varies because of the factors 13 AVISTA CORPORATION that influence demand over intra-hour, hourly, daily, monthly and annual durations. Our average hourly load was 1,149 aMW in 2025, 1,117 aMW in 2024 and 1,115 aMW in 2023.
The following graph shows our forecast of our average annual energy requirements and our available resources for 2025 through 2028, as included in our 2025 Electric IRP: (1) Forecast system load does not include the addition of large load customers, which could increase system load and require additional resources, as contemplated in our 2025 Electric IRP.
The following graph shows our forecasted average annual energy requirements (in aMWs) and our available resources (in MWs) for 2026 through 2029: (1) Forecast system load does not include the addition of large load customers, which could increase system load and require additional resources, as contemplated in our 2025 Electric IRP.
Total Avista Corp. shareholders’ equity was $2.6 billion as of December 31, 2024, which includes a $139 million investment in Avista Capital and a $123 million investment in AERC. See “Note 24 of the Notes to Consolidated Financial Statements” for information with respect to the operating performance of each business segment (and other subsidiaries).
Total Avista Corp. shareholders’ equity was $2.7 billion as of December 31, 2025, which includes a $126 million investment in Avista Capital and a $129 million investment in AERC. See “Note 24 of the Notes to Consolidated Financial Statements” for information with respect to the operating performance of each business segment (and other subsidiaries).
The following graph shows Avista Utilities' thermal generation (in thousands of MWhs) during the year ended December 31: Wind Resources We have exclusive rights to the capacity of Palouse Wind, a wind generation project developed, owned and managed by an unrelated third-party and located in Whitman County, Washington.
Properties - Avista Utilities” for the present generating capabilities of the above thermal resources. 11 AVISTA CORPORATION The following graph shows Avista Utilities' thermal generation (in thousands of MWhs) during the year ended December 31: Wind Resources We have exclusive rights to the capacity of Palouse Wind, a wind generation project developed, owned and managed by an unrelated third-party and located in Whitman County, Washington.
We acquire both long-term and short-term transmission capacity to facilitate our energy and capacity transactions. We provide transmission and ancillary services in eastern Washington, northern Idaho and western Montana. Electric Re quirements Avista Utilities' peak electric native load requirement for 2024 was 1,869 MW, which occurred on January 13, 2024.
We acquire both long-term and short-term transmission capacity to facilitate our energy and capacity transactions. We provide transmission and ancillary services in eastern Washington, northern Idaho and western Montana. Peak Electric Re quirements Avista Utilities' peak electric native load requirement for 2025 was 1,837 MW, which occurred on September 2, 2025.
AEL&P ELE CTRIC OPERATING STATISTICS Years Ended December 31, 2024 2023 2022 ELECTRIC OPERATIONS OPERATING REVENUES (Dollars in Millions): Residential $ 22 $ 20 $ 20 Commercial and government 27 27 26 Total retail 49 47 46 Other 1 1 — Total electric operating revenues $ 50 $ 48 $ 46 ENERGY SALES (Thousands of MWhs): Residential 171 161 163 Commercial and government 255 249 240 Public street and highway lighting 1 1 1 Total electric energy sales 427 411 404 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 15,236 15,142 15,036 Commercial and government 2,338 2,327 2,305 Public street and highway lighting 249 248 236 Total electric retail customers 17,823 17,717 17,577 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (KWh) 11,192 10,633 10,841 Revenue per KWh (in cents) 12.66 12.54 12.07 Annual revenue per customer (in dollars) $ 1,417 $ 1,336 $ 1,308 HEATING DEGREE DAYS: (1) Juneau, AK Actual 8,139 7,550 7,923 Historical average 8,336 8,336 8,337 % of average 98 % 91 % 95 % (1) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual heating degree days below historical average indicate warmer than average temperatures). 23 AVISTA CORPORATION OTHER BUS INESSES The following table shows our assets related to our other businesses, including intercompany amounts as of December 31 (dollars in millions): Entity and Asset Type 2024 2023 Avista Capital Equity investments $ 157 $ 153 Notes receivable – third parties 18 20 Other assets 7 7 Alaska companies (AERC and AJT Mining) 12 11 Total $ 194 $ 191 Avista Capital equity investments are primarily investments in emerging technology and biotechnology companies and venture capital funds, as well as investment in a joint venture focused on local real estate development and economic growth.
AEL&P ELE CTRIC OPERATING STATISTICS Years Ended December 31, 2025 2024 2023 ELECTRIC OPERATIONS OPERATING REVENUES (Dollars in Millions): Residential $ 22 $ 22 $ 20 Commercial and government 25 27 27 Total retail 47 49 47 Other — 1 1 Total electric operating revenues $ 47 $ 50 $ 48 ENERGY SALES (Thousands of MWhs): Residential 169 171 161 Commercial and government 232 255 249 Public street and highway lighting 1 1 1 Total electric energy sales 402 427 411 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 15,330 15,236 15,142 Commercial and government 2,389 2,338 2,327 Public street and highway lighting 251 249 248 Total electric retail customers 17,970 17,823 17,717 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (KWh) 11,045 11,192 10,633 Revenue per KWh (in cents) 12.66 12.66 12.54 Annual revenue per customer (in dollars) $ 1,398 $ 1,417 $ 1,336 HEATING DEGREE DAYS: (1) Juneau, AK Actual 8,118 8,139 7,550 Historical average 8,336 8,336 8,336 % of average 97 % 98 % 91 % (1) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day is below 65 degrees Fahrenheit (annual heating degree days below historical average indicate warmer than average temperatures). 25 AVISTA CORPORATION OTHER BUS INESSES The following table shows our assets related to our other businesses, including intercompany amounts as of December 31 (dollars in millions): Entity and Asset Type 2025 2024 Avista Capital Equity investments $ 148 $ 157 Notes receivable – third parties 11 18 Other assets 6 7 Alaska companies (AERC and AJT Mining) 12 12 Total $ 177 $ 194 Avista Capital's equity investments are primarily investments in emerging technology and biotechnology companies and venture capital funds, as well as investment in a joint venture focused on local real estate development and economic growth.
Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion on clean energy, including applicable regulations. We have several contracts for RNG to purchase an expected output of approximately 9.7 million therms annually from various projects.
Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion on clean energy, including applicable regulations. We have several contracts for renewable natural gas to purchase an expected output of approximately 8.6 million therms annually from various projects.
We commenced Western EIM operations in March 2022. The Western EIM, among other things, facilitates regional load balancing by allowing certain generating plants to receive automated dispatch signals from the CAISO in five-minute intervals. 17 AVISTA CORPORATION Reliability Standards Among its other provisions, the U.S.
The Western EIM, among other things, facilitates regional load balancing by allowing certain generating plants to receive automated dispatch signals from the CAISO in five-minute intervals. Reliability Standards Among its other provisions, the U.S.
Development opportunities are created to prepare our employees at all levels to ensure they have the skills, knowledge and experience to perform today and well into the future. Keeping our workforce equipped to succeed is imperative to meet the emerging challenges that lay ahead. We develop training that is relevant, necessary and in demand for our organization.
Development opportunities are created to prepare our employees at all levels to continue building their skills, knowledge and experience to perform today and in the future. Keeping our workforce equipped to succeed is imperative to meet the emerging challenges that lie ahead. We develop training that is relevant, necessary and in demand for our organization.
The retail electric and natural gas operations are subject to the jurisdiction of the WUTC, IPUC, OPUC and MPSC. Approval of the issuance of securities is not required from the MPSC. We are subject to the jurisdiction of the FERC for licensing of hydroelectric generation resources, and for electric transmission services and wholesale sales.
Approval of the issuance of securities is not required from the MPSC. We are subject to the jurisdiction of the FERC for licensing of hydroelectric generation resources, and for electric transmission services and wholesale sales.
Coyote Springs 2, which is operated by Portland General Electric Company, is supplied with natural gas under a combination of term contracts and spot market purchases, including transportation agreements with bilateral renewal rights. 9 AVISTA CORPORATION Colstrip, which is operated by Talen, is supplied with fuel from adjacent coal reserves under coal supply and transportation agreements.
Coyote Springs 2, which is operated by Portland General Electric Company, is supplied with natural gas under a combination of term contracts and spot market purchases, including transportation agreements with bilateral renewal rights.
Cybersecurity” for further information. 18 AVISTA CORPORATION AVISTA U TILITIES ELECTRIC OPERATING STATISTICS Years Ended December 31, 2024 2023 2022 ELECTRIC OPERATIONS OPERATING REVENUES (Dollars in Millions): Residential $ 473 $ 425 $ 415 Commercial 369 344 339 Industrial 131 110 108 Public street and highway lighting 9 8 7 Total retail 982 887 869 Wholesale 225 250 179 Sales of fuel 13 (26 ) 84 Other 58 49 46 Alternative revenue programs 23 12 (32 ) Total electric operating revenues $ 1,301 $ 1,172 $ 1,146 ENERGY SALES (Thousands of MWhs): Residential 4,018 4,020 4,154 Commercial 3,166 3,160 3,201 Industrial 1,785 1,671 1,699 Public street and highway lighting 17 17 17 Total retail 8,986 8,868 9,071 Wholesale 3,740 3,468 3,094 Total electric energy sales 12,726 12,336 12,165 ENERGY RESOURCES (Thousands of MWhs): Hydroelectric generation (from Company facilities) 3,168 3,024 3,930 Thermal generation (from Company facilities) 4,995 5,084 4,055 Purchased power 4,965 5,121 5,065 Power exchanges (14 ) (421 ) (385 ) Total power resources 13,114 12,808 12,665 Energy losses and Company use (388 ) (472 ) (500 ) Total energy resources (net of losses) 12,726 12,336 12,165 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 371,076 366,450 361,564 Commercial 45,794 45,341 44,550 Industrial 1,175 1,188 1,193 Public street and highway lighting 739 690 681 Total electric retail customers 418,784 413,669 407,988 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (KWh) 10,827 10,971 11,487 Revenue per KWh (in cents) 11.78 10.58 9.99 Annual revenue per customer (in dollars) $ 1,276 $ 1,160 $ 1,147 AVERAGE HOURLY LOAD (aMW) 1,117 1,115 1,142 19 AVISTA CORPORATION AVISTA UTILITIES ELECTRIC OPERATING STATISTICS Years Ended December 31, 2024 2023 2022 RETAIL NATIVE LOAD at time of system peak (MW): Winter 1,869 1,771 1,860 Summer 1,831 1,809 1,810 COOLING DEGREE DAYS: (1) Spokane, WA Actual 903 811 758 Historical average 596 585 568 % of average 152 % 139 % 133 % HEATING DEGREE DAYS: (2) Spokane, WA Actual 5,875 6,012 6,811 Historical average 6,569 6,557 6,560 % of average 89 % 92 % 104 % (1) Cooling degree days are the measure of the warmness of weather experienced, based on the extent to which the average of high and low temperatures for a day exceeds 65 degrees Fahrenheit (annual degree days above historical average indicate warmer than average temperatures).
Cybersecurity” for further information. 20 AVISTA CORPORATION AVISTA U TILITIES ELECTRIC OPERATING STATISTICS Years Ended December 31, 2025 2024 2023 ELECTRIC OPERATIONS OPERATING REVENUES (Dollars in Millions): Residential $ 550 $ 473 $ 425 Commercial 402 369 344 Industrial 142 131 110 Public street and highway lighting 9 9 8 Total retail 1,103 982 887 Wholesale 187 225 250 Sales of fuel 20 13 (26 ) Other 34 81 61 Total electric operating revenues $ 1,344 $ 1,301 $ 1,172 ENERGY SALES (Thousands of MWhs): Residential 4,114 4,018 4,020 Commercial 3,216 3,166 3,160 Industrial 1,912 1,785 1,671 Public street and highway lighting 15 17 17 Total retail 9,257 8,986 8,868 Wholesale 4,457 3,740 3,468 Total electric energy sales 13,714 12,726 12,336 ENERGY RESOURCES (Thousands of MWhs): Hydroelectric generation (from Company facilities) 3,195 3,168 3,024 Thermal generation (from Company facilities) 4,815 4,995 5,084 Purchased power 6,040 4,965 5,121 Power exchanges (13 ) (14 ) (421 ) Total power resources 14,037 13,114 12,808 Energy losses and Company use (323 ) (388 ) (472 ) Total energy resources (net of losses) 13,714 12,726 12,336 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 376,349 371,076 366,450 Commercial 45,959 45,794 45,341 Industrial 1,159 1,175 1,188 Public street and highway lighting 761 739 690 Total electric retail customers 424,228 418,784 413,669 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (KWh) 10,931 10,827 10,971 Revenue per KWh (in cents) 13.37 11.78 10.58 Annual revenue per customer (in dollars) $ 1,462 $ 1,276 $ 1,160 AVERAGE HOURLY LOAD (aMW) 1,149 1,117 1,115 21 AVISTA CORPORATION AVISTA UTILITIES ELECTRIC OPERATING STATISTICS Years Ended December 31, 2025 2024 2023 RETAIL NATIVE LOAD at time of system peak (MW): Winter 1,832 1,869 1,771 Summer 1,837 1,831 1,809 COOLING DEGREE DAYS: (1) Spokane, WA Actual 845 903 811 Historical average 607 596 585 % of average 139 % 152 % 139 % HEATING DEGREE DAYS: (2) Spokane, WA Actual 5,782 5,875 6,012 Historical average 6,521 6,569 6,557 % of average 89 % 89 % 92 % (1) Cooling degree days are the measure of the warmness of weather experienced, based on the extent to which the average of high and low temperatures for a day is above 65 degrees Fahrenheit (annual degree days above historical average indicate warmer than average temperatures).
(2) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual degree days below historical averages indicate warmer than average temperatures). 20 AVISTA CORPORATION AVISTA UTILITIES NATURAL GAS OPERATING STATISTICS Years Ended December 31, 2024 2023 2022 NATURAL GAS OPERATIONS OPERATING REVENUES (Dollars in Millions): Residential $ 317 $ 326 $ 284 Commercial 163 164 140 Interruptible 9 13 6 Industrial 4 4 4 Total retail 493 507 434 Wholesale 61 55 133 Transportation 11 8 9 Other 29 8 8 Alternative revenue programs 12 (7 ) (2 ) Total natural gas operating revenues $ 606 $ 571 $ 582 THERMS DELIVERED (Thousands of Therms): Residential 217,808 225,665 242,452 Commercial 137,972 138,719 147,059 Interruptible 20,682 20,158 14,166 Industrial 4,347 4,914 5,606 Total retail 380,809 389,456 409,283 Wholesale 271,803 262,188 280,154 Transportation 178,236 165,066 171,785 Interdepartmental and Company use 391 413 618 Total therms delivered 831,239 817,123 861,840 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 343,267 340,655 337,073 Commercial 37,353 37,193 36,753 Interruptible 52 50 44 Industrial 185 187 188 Total natural gas retail customers 380,857 378,085 374,058 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (therms) 635 662 719 Revenue per therm (in dollars) $ 1.46 $ 1.44 $ 1.17 Annual revenue per customer (in dollars) $ 925 $ 956 $ 844 HEATING DEGREE DAYS: (1) Spokane, WA Actual 5,875 6,012 6,811 Historical average 6,569 6,557 6,560 % of average 89 % 92 % 104 % Medford, OR Actual 3,963 4,295 4,408 Historical average 4,282 4,248 4,248 % of average 93 % 101 % 104 % (1) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual degree days below historic indicate warmer than average temperatures).
(2) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day is below 65 degrees Fahrenheit (annual degree days below historical averages indicate warmer than average temperatures). 22 AVISTA CORPORATION AVISTA UTILITIES NATURAL GAS OPERATING STATISTICS Years Ended December 31, 2025 2024 2023 NATURAL GAS OPERATIONS OPERATING REVENUES (Dollars in Millions): Residential $ 291 $ 317 $ 326 Commercial 137 163 164 Interruptible 9 9 13 Industrial 3 4 4 Total retail 440 493 507 Wholesale 52 61 55 Transportation 13 11 8 Other 79 41 1 Total natural gas operating revenues $ 584 $ 606 $ 571 THERMS DELIVERED (Thousands of Therms): Residential 209,200 217,808 225,665 Commercial 132,932 137,972 138,719 Interruptible 25,503 20,682 20,158 Industrial 4,732 4,347 4,914 Total retail 372,367 380,809 389,456 Wholesale 228,646 271,803 262,188 Transportation 156,883 178,236 165,066 Interdepartmental and Company use 389 391 413 Total therms delivered 758,285 831,239 817,123 NUMBER OF RETAIL CUSTOMERS (Average for Period): Residential 346,048 343,267 340,655 Commercial 37,481 37,353 37,193 Interruptible 51 52 50 Industrial 184 185 187 Total natural gas retail customers 383,764 380,857 378,085 RESIDENTIAL SERVICE AVERAGES: Annual use per customer (therms) 605 635 662 Revenue per therm (in dollars) $ 1.39 $ 1.46 $ 1.44 Annual revenue per customer (in dollars) $ 840 $ 925 $ 956 HEATING DEGREE DAYS: (1) Spokane, WA Actual 5,782 5,875 6,012 Historical average 6,521 6,569 6,557 % of average 89 % 89 % 92 % Medford, OR Actual 4,169 3,963 4,295 Historical average 4,252 4,282 4,248 % of average 98 % 93 % 101 % (1) Heating degree days are the measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day is below 65 degrees Fahrenheit (annual degree days below historic indicate warmer than average temperatures).
It is the subject of a 50-year agreement with the Spokane Tribe, expiring in 2044. 11 AVISTA CORPORATION The FERC grants hydroelectric licenses, and relicenses, only after a multi-year process involving public hearings and input from multiple federal, state and local government agencies, tribes, non-governmental organizations, private landowners and other stakeholders.
The FERC grants hydroelectric licenses, and relicenses, only after a multi-year process involving public hearings and input from multiple federal, state and local government agencies, tribes, non-governmental organizations, private landowners and other stakeholders.
Situational awareness is designed to help us identify and respond to risk, including the fire risk maps, a fire weather dashboard, and installation of wildfire identification cameras and localized weather stations.
We also had a third-party study the effectiveness of this program and the preferred inspection cycle. Situational awareness is designed to help us identify and respond to risk, including the fire risk maps, a fire weather dashboard, and installation of wildfire identification cameras and localized weather stations.
We also invest at the transmission level, replacing wood poles with steel or wrapping them with a fire-resistant protective cover in high fire risk areas. We are also developing an enhanced grid hardening program which may involve undergrounding high fire risk sections of the distribution system.
We also invest at the transmission level, replacing wood poles with steel or wrapping them with a fire-resistant protective cover in high fire risk areas.
The decision as to ownership will be made as to each project at the appropriate time and will depend on, among other things, the type of project and the related economics, including tax and ratemaking treatment. Electric Clean Energy Goals We have an aspirational goal to serve our customers with 100 percent clean electricity by 2045.
The decision as to ownership will be made as to each project at the appropriate time and will depend on, among other things, the type of project and the related economics, including tax and ratemaking treatment.
We are required to file a natural gas IRP every two years and we anticipate our next IRP to be filed in 2025. Utility Regulation General As a public utility, Avista Corp. is subject to regulation by state utility commissions for retail electric and natural gas rates, accounting, the issuance of securities and other matters.
Utility Regulation General As a public utility, Avista Corp. is subject to regulation by state utility commissions for retail electric and natural gas rates, accounting, the issuance of securities and other matters. The retail electric and natural gas operations are subject to the jurisdiction of the WUTC, IPUC, OPUC and MPSC.
Our estimate of normal annual hydroelectric generation for 2025 (including resources purchased under long-term hydroelectric contracts with certain PUDs) is 621.5 aMW (or 5.44 million MWhs). See “Item 2.
Normal and actual annual hydroelectric generation increased in 2025 as a result of increased output received from additional capacity under one of our PPA contracts. Our estimate of normal annual hydroelectric generation for 2026 (including resources purchased under long-term hydroelectric contracts with certain PUDs) is 648.3 aMW (or 5.68 million MWhs). See “Item 2.
Workplace Safety Safety and well-being are an essential part of our Company’s mission and a key strategy to support our employees through innovative programs, best practices, tools and technology.
The Company conducted many listening sessions to learn more about our employee needs and gain a better understanding of what actions might be taken to improve the employee experience. Workplace Safety Safety and well-being are an essential part of our Company’s mission and a key strategy to support our employees through innovative programs, best practices, tools and technology.
As of December 31, 2024, Avista Utilities' electric generation resource mix (including contracts for power purchases) was approximately 44 percent hydroelectric, 43 percent thermal and 13 percent other renewables. See “Item 2. Properties” for detailed information on Company-owned generating facilities and a detailed list of our PPAs.
On January 1, 2026, the Company transferred its ownership in Colstrip to NorthWestern, resulting in a generation resource mix (including contracts for power purchases) of approximately 53 percent hydroelectric, 32 percent thermal and 15 percent other renewables. See “Item 2. Properties” for detailed information on Company-owned generating facilities and a detailed list of our PPAs.
The sixth, Little Falls, is operated under separate Congressional authority and is not licensed by the FERC.
The sixth, Little Falls, is operated under separate Congressional authority and is not licensed by the FERC. It is the subject of a 50-year agreement with the Spokane Tribe, expiring in 2044.
We are focused on innovative recruiting and educational outreach to organizations and schools to create greater awareness of the variety of career opportunities available in our industry and at the Company.
We are focused on innovative recruiting and educational outreach to organizations and schools to create greater awareness of the variety of career opportunities available in our industry and in the Company. We continue to think creatively about how we connect with our communities regarding employment opportunities, with a goal of attracting talented individuals who can help advance the Company's objectives.
The IRP details projected growth in demand for energy and the new resources needed to serve customers over the next 20 years. We regard the IRP as a tool for resource evaluation, rather than an acquisition plan for a particular project.
The IRP outlines a preferred resource portfolio which is designed to meet the forecast for system energy demand and comply with emissions legislation over the next 20 years. We regard the IRP as a tool for resource evaluation, rather than an acquisition plan for a particular project.
After December 31, 2025, we are prohibited by Clean Energy Transformation Act (CETA) from using energy produced by coal-fired plants to serve our retail customers in Washington. We entered into an agreement with NorthWestern to transfer our interest in Colstrip at the end of 2025. To the extent necessary, we will obtain energy produced by other regional resources.
After December 31, 2025, we are prohibited by the Clean Energy Transformation Act (CETA) from using energy produced by coal-fired plants to serve our retail customers in Washington (with some exceptions for coal generated short-term purchases), and we transferred our interest in Colstrip to NorthWestern on January 1, 2026.
In 2024, we spent $34 million in capital and $18 million in operating expenses on wildfire resiliency and we expect similar levels of expenditures in 2025. The IPUC and WUTC approved deferral and recovery of certain operating expenses of the wildfire resiliency plan, and we will continue to seek recovery of costs in future rate filings.
The IPUC and WUTC approved deferral and recovery of certain operating expenses of the wildfire resiliency plan, and we will continue to seek recovery of costs in future rate filings. Wildfire Mitigation Legislation In April 2025, Idaho enacted the Wildfire Standard of Care Act, which became effective in July 2025.
See "Natural Gas Operations - Natural Gas Supply" for information regarding our supply of natural gas for both fuel and delivery to natural gas customers. See “Item 2. Properties - Avista Utilities” for the present generating capabilities of the above thermal resources.
See “Note 5 of the Notes to Consolidated Financial Statements” for further discussion of this PPA. See "Natural Gas Operations - Natural Gas Supply" for information regarding our supply of natural gas for both fuel and delivery to natural gas customers. See “Item 2.
Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” and “Colstrip” for information related to existing and proposed laws and regulations, and issues relating to Colstrip. Additional generating resources required will either be owned by us or be owned by other parties who will sell us the capacity and energy under PPAs.
See further information on the RFP within “Item 7. Management's Discussion and Analysis – Executive Overview”. Additional generating resources required will either be owned by us or be owned by other parties who will sell us the capacity and energy under PPAs.
Enhanced vegetation management involves risk tree inspection in non-urban areas, the addition of digital data collection, fuel reduction partnerships, and safe tree programs. We also had a third-party study the effectiveness of this program and the preferred inspection cycle.
We are also developing an enhanced grid hardening program which may involve undergrounding high fire risk sections of the distribution system. 15 AVISTA CORPORATION Enhanced vegetation management involves risk tree inspection in non-urban areas, the addition of digital data collection, fuel reduction partnerships, and safe tree programs.
Thermal Resources Avista Utilities owns the following thermal generating resources: • the combined cycle natural gas-fired CT, known as Coyote Springs 2, located near Boardman, Oregon, • a 15 percent interest in Units 3 and 4 of Colstrip, a coal-fired boiler generating facility located in southeastern Montana.
Thermal Resources Avista Utilities owns the following thermal generating resources: • the combined cycle natural gas-fired CT, known as Coyote Springs 2, located near Boardman, Oregon, • a wood waste-fired boiler generating facility known as the Kettle Falls GS in northeastern Washington, • a two-unit natural gas-fired CT generating facility in northeastern Spokane (Northeast CT), • a two-unit natural gas-fired CT generating facility in northern Idaho (Rathdrum CT), and • two small natural gas-fired generating facilities (Boulder Park GS and Kettle Falls CT).
Under the terms of the PPA, we make the dispatch decisions, provide all natural gas fuel and receive all electric energy output. Therefore, we consider the Lancaster Plant to be a baseload resource. See “Note 5 of the Notes to Consolidated Financial Statements” for further discussion of this PPA.
The Lancaster Plant is a 270 MW natural gas-fired combined cycle combustion turbine plant located in northern Idaho, owned by an unrelated third-party. Under the terms of the PPA, we make the dispatch decisions, provide all natural gas fuel and receive all electric energy output. Therefore, we consider the Lancaster Plant to be a baseload resource.
We continue to think creatively about how we reach out to our communities regarding employment opportunities, with a goal of attracting talented individuals who can ultimately help advance the Company's objectives. Continuous learning plays a large part in fostering collaboration and innovation among our employees and is pervasive throughout the Company.
The partnership with IBEW is key to a holistic approach to employee attraction, engagement, and retention. Continuous learning plays a large part in fostering collaboration and innovation among our employees and is pervasive throughout the Company.
We monitor these assumptions on an on-going basis and adjust our resource requirements accordingly. See “Item 7. Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion of environmental laws, including impacts to our business.
Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion of environmental laws, including impacts to our business. We are required to file a natural gas IRP every two years and we anticipate our next IRP to be filed in 2027.
Several of the co-owners of Colstrip, including us, have a coal contract that runs through December 31, 2025. See “Item 7. Management's Discussion and Analysis – Colstrip” for discussion regarding environmental and other issues surrounding Colstrip.
Management's Discussion and Analysis – Colstrip” and “Note 22 of the Notes to Consolidated Financial Statements” for discussion regarding environmental and other issues surrounding Colstrip. In addition to the resources we own listed above, we have a PPA for the output from the Lancaster Plant through December 31, 2041.
Removed
We have an agreement to transfer our ownership to NorthWestern at the end of 2025; see “Note 22 of the Notes to Consolidated Financial Statements” for discussion of our Colstrip agreement with NorthWestern, • a wood waste-fired boiler generating facility known as the Kettle Falls GS in northeastern Washington, • a two-unit natural gas-fired CT generating facility in northeastern Spokane (Northeast CT), • a two-unit natural gas-fired CT generating facility in northern Idaho (Rathdrum CT), and • two small natural gas-fired generating facilities (Boulder Park GS and Kettle Falls CT).
Added
All of our collective bargaining agreements are with local chapters of the International Brotherhood of Electrical Workers (IBEW). In 2025, the Company successfully negotiated a 4-year agreement for our largest collective bargaining agreement. In 2026, we have one agreement expiring and currently under negotiation for a successor contract, along with negotiations for a newly-organized bargaining unit.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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The EIM collateral posting requirements are based on established credit criteria, but there is no assurance the collateral will be sufficient to cover obligations that counterparties may owe each other in the EIM and credit losses could be allocated among all EIM participants, including us.
The EIM collateral requirements are based on established credit criteria, but there is no assurance the collateral will be sufficient to cover obligations that counterparties may owe each other in the EIM, and credit losses could be allocated among all EIM participants, including us.
A significant failure of a participant in the EIM to make payments when due on its obligations could have a ripple effect on our counterparties in the power and gas markets if those counterparties experience ancillary liquidity issues, and could result in a decline in the ability of our counterparties to perform on their obligations.
A significant failure of a participant in the EIM to make payments when its obligations are due could have a ripple effect on our counterparties in the power and gas markets if those counterparties experience ancillary liquidity issues, and could result in a decline in the ability of our counterparties to perform on their obligations.
A combination of factors exposes our operations to commodity price risks, including: • our obligation to serve our retail customers at rates set through the regulatory process - we cannot decline to serve our customers and we cannot change retail rates to reflect current energy prices unless and until we receive regulatory approval, • customer demand, which is beyond our control because of weather, customer choices, prevailing economic conditions and other factors, • some of our energy supply cost is fixed by the nature of the energy-producing assets or through contractual arrangements (however, a significant portion of our energy resource costs are not fixed), and 32 AVISTA CORPORATION • the potential non-performance by commodity counterparties, which could lead to replacement of the scheduled energy or natural gas at higher prices.
A combination of factors exposes our operations to commodity price risks, including: • our obligation to serve our retail customers at rates set through the regulatory process - we cannot decline to serve our customers and we cannot change retail rates to reflect current energy prices unless and until we receive regulatory approval, • customer demand, which is beyond our control because of weather, customer choices, prevailing economic conditions and other factors, • some of our energy supply cost is fixed by the nature of the energy-producing assets or through contractual arrangements (however, a significant portion of our energy resource costs are not fixed), and • the potential non-performance by commodity counterparties, which could lead to replacement of the scheduled energy or natural gas at higher prices.
When we enter into fixed price energy commodity transactions for future delivery, we are subject to credit terms that may require us to provide collateral to wholesale counterparties related to the difference between current prices and the agreed upon fixed prices. These collateral requirements can place significant demands on our cash flows or borrowing arrangements.
When we enter into fixed price energy commodity transactions for future delivery, we are subject to credit terms that may require us to provide collateral to wholesale counterparties related to the difference between forward prices and the agreed upon fixed prices. These collateral requirements can place significant demands on our cash flows or borrowing arrangements.
Our operations are subject to operational and event risks that include: • severe weather or natural disasters, including, but not limited to, avalanches, wind storms, wildfires, earthquakes, floods, snow and ice storms, and heat waves due to normal weather variations as well as the impacts of climate change which could disrupt energy generation, transmission and distribution, as well as the availability and costs of materials, equipment, supplies, support services and general business operations, • blackouts or disruptions of interconnected transmission systems (the regional power grid), • unplanned outages at generating plants, • changes in the availability and cost of purchased power, fuel and natural gas, including delivery constraints and restrictions imposed by the transition to renewable and/or non-emitting energy sources, which can disrupt service to customers, • explosions, fires, accidents, or mechanical breakdowns that could occur while operating and maintaining our generation, transmission and distribution systems, including, but not limited to, increased risk associated with emerging renewable technologies as these technologies continue to mature, • property damage or injuries to third parties caused by our generation, transmission and distribution systems, • natural disasters that can disrupt energy generation, transmission and distribution, and general business operations, • terrorist attacks or other malicious acts that may disrupt or cause damage to our utility assets or the vendors we utilize, and • increased costs or delay of capital projects associated with the ability of suppliers, vendors or contractors to perform, • general workforce problems, including decreased employee engagement, which may impact strategy execution and negatively affect retention, ability to attract workers, and result in challenges in collective bargaining, possible work stoppages, and strikes.
Our operations are subject to operational and event risks that include: • severe weather or natural disasters, including, but not limited to, avalanches, wind storms, wildfires, earthquakes, floods, snow and ice storms, and heat waves due to normal weather variations as well as the impacts of climate change which could disrupt energy generation, transmission and distribution, as well as the availability and costs of materials, equipment, supplies, support services and general business operations, • blackouts or disruptions of interconnected transmission systems (the regional power grid), • unplanned outages at generating plants, • changes in the availability and cost of purchased power, fuel and natural gas, including delivery constraints and restrictions imposed by the transition to renewable and/or non-emitting energy sources, which can disrupt service to customers, • explosions, fires, accidents, or mechanical breakdowns that could occur while operating and maintaining our generation, transmission and distribution systems, including, but not limited to, increased risk associated with emerging renewable technologies as these technologies continue to mature, • property damage or injuries to third parties caused by our generation, transmission and distribution systems, • dam failure at a company-owned hydroelectric facility, • natural disasters that can disrupt energy generation, transmission and distribution, and general business operations, • terrorist attacks or other malicious acts that may disrupt or cause damage to our utility assets or the vendors we utilize, and • increased costs or delay of capital projects associated with the ability of suppliers, vendors or contractors to perform, • general workforce problems, including decreased employee engagement, which may impact strategy execution and negatively affect retention, ability to attract workers, and result in challenges in collective bargaining, possible work stoppages, and strikes.
The cost to implement rapid response or repair to such facilities can be significant. Overhead electric lines are most susceptible to damage caused by severe weather and are not covered by insurance. Physical attacks on our assets could have a negative impact on our business and our results of operations.
The cost of implementing rapid response or repair to such facilities can be significant. Overhead electric lines are most susceptible to damage caused by severe weather and are not covered by insurance. Physical attacks on our assets could have a negative impact on our business and our results of operations.
If regulators do not grant rate increases or grant substantially lower rate increases than our requests in the future or if recovery of deferred expenses is disallowed, or if regulators do not allow us to recover costs associated with assets required to be retired or divested, such as Colstrip, to comply with emerging laws and regulations, it could have a negative effect on our financial condition, results of operations or cash flows.
If regulators do not grant rate increases or grant substantially lower rate increases than our requests in the future or if recovery of deferred expenses is disallowed, or if regulators do not allow us to recover costs associated with assets required to be retired or divested to comply with emerging laws and regulations, it could have a negative effect on our financial condition, results of operations or cash flows.
As such, the state of financial markets and credit availability in the global, United States and regional economies impacts our financial condition. We could experience increased borrowing costs or limited access to capital on reasonable terms.
As such, the state of financial markets and credit availability in the global, United States and regional economies impact our financial condition. We could experience increased borrowing costs or limited access to capital on reasonable terms.
Price volatility can cause collateral requirements to change quickly and significantly. Cash flow deferrals related to energy commodities can be significant. We are permitted to collect from customers only amounts approved by regulatory commissions. However, our costs to provide energy service can be much higher or lower than the amounts currently billed to customers.
Price volatility can cause collateral requirements to change quickly and significantly. 35 AVISTA CORPORATION Cash flow deferrals related to energy commodities can be significant. We are permitted to collect from customers only amounts approved by regulatory commissions. However, our costs to provide energy service can be much higher or lower than the amounts currently billed to customers.
Significant destruction or interruption of 26 AVISTA CORPORATION these assets and systems could prevent us from fulfilling our critical business functions, including delivering energy to customers. This could result in experiencing a loss of revenues and/or additional costs to replace or restore assets and systems, and may increase costs associated with heightened security requirements.
Significant destruction or interruption of these assets and systems could prevent us from fulfilling our critical business functions, including delivering energy to customers. This could result in experiencing a loss of revenues and/or additional costs to replace or restore assets and systems, and may increase costs associated with heightened security requirements.
Wildfire risks may be exacerbated by increasing temperatures and/or decreasing precipitation due to climate change. 25 AVISTA CORPORATION We are subject to various operational and event risks.
Wildfire risks may be exacerbated by increasing temperatures and/or decreasing precipitation due to climate change. 27 AVISTA CORPORATION We are subject to various operational and event risks.
In addition, credit rating downgrades could reduce the number of counterparties willing to do business with us or result in the termination of outstanding regulatory authorizations for certain financing activities. 31 AVISTA CORPORATION Credit risk may be affected by industry concentration and geographic concentration.
In addition, credit rating downgrades could reduce the number of counterparties willing to do business with us or result in the termination of outstanding regulatory authorizations for certain financing activities. Credit risk may be affected by industry concentration and geographic concentration.
In addition, tariffs and trade 29 AVISTA CORPORATION restrictions could have a similar impact on our suppliers and certain customers, which could have a negative impact on our financial condition, results of operations and cash flows. See “Item 7.
In addition, tariffs and trade restrictions could have a similar impact on our suppliers and certain customers, which could have a negative impact on our financial condition, results of operations and cash flows. See “Item 7.
The electric and natural gas utility industries are frequently affected by proposals to curb greenhouse gas and other air emissions. Various regulatory and legislative proposals have been made to limit or further restrict byproducts of combustion, including that resulting from the use of natural gas by our customers.
The electric and natural gas utility industries are frequently affected by proposals to curb greenhouse gas and other air emissions. Various regulatory and legislative proposals have been made to limit or further restrict byproducts of combustion, including those resulting from the use of natural gas by 31 AVISTA CORPORATION our customers.
Therefore, an event caused by cyberattacks, ransomware or other malicious act at an interconnected third party could impact our business and facilities similarly.
Therefore, an event caused by cyberattacks, ransomware or other malicious act at an interconnected third 29 AVISTA CORPORATION party could impact our business and facilities similarly.
Our strategic business plans could be affected by or result in the following: • disruptive innovations in the marketplace may outpace our ability to compete or manage our risk (including the transition to renewable and/or non-emitting energy resources), • customers may have a choice in the future over the sources from which to receive their energy and we may not be able to compete, • potential difficulties in integrating acquired operations and in realizing expected opportunities, diversions of management resources and losses of key employees, challenges with respect to operating new businesses and other unanticipated risks and liabilities, • reduced control over generation resources resulting from reliance on contract power from third-party owners of generation assets, which could limit our ability to balance resources with demand, • non-regulated investments in businesses outside of our core utilities operations may increase earnings volatility, • market or other conditions that could adversely affect our operations or require changes to our business strategy and could result in reduced assets and net income, • affordability of electric and/or gas services may be a challenge for customers resulting in increased delayed payment for utility services, • potential reputational risk arising from repeated general rate case filings, degradation in the quality of service, or from failed strategic investments and opportunities, which could erode shareholder, customer and community satisfaction with the Company, and • the risk of municipalization or other form of service territory reduction. 28 AVISTA CORPORATION External Mandates Risk Factors External mandate risk involves forces outside the Company, which may include significant changes in customer expectations, disruptive technologies that result in obsolescence of our business model and government action that could impact the Company.
Our strategic business plans could be affected by or result in the following: • disruptive innovations in the marketplace may outpace our ability to compete or manage our risk (including the transition to renewable and/or non-emitting energy resources), • customers may have a choice in the future over the sources from which to receive their energy, and we may not be able to compete, • potential difficulties in integrating acquired operations and in realizing expected opportunities, diversions of management resources and losses of key employees, challenges with respect to operating new businesses and other unanticipated risks and liabilities, • reduced control over generation resources resulting from reliance on contract power from third-party owners of generation assets, which could limit our ability to balance resources with demand, • market or other conditions that could adversely affect our operations or require changes to our business strategy and could result in reduced assets and net income, • affordability of electric and/or gas services may be a challenge for customers resulting in increased delayed payment for utility services, • potential reputational risk arising from repeated general rate case filings, degradation in the quality of service, or from failed strategic investments and opportunities, which could erode shareholder, customer and community satisfaction with the Company, and • the risk of municipalization or other form of service territory reduction.
This could result in higher commodity costs to replace the lost generation, as well as higher costs to retire the generation source before the end of its expected life. This also includes costs (including replacement of lost generation) associated with our transfer of Colstrip 33 AVISTA CORPORATION ownership to NorthWestern at the end of 2025. See “Item 7.
This could result in higher commodity costs to replace the lost generation, as well as higher costs to retire the generation source before the end of its expected life. This also includes costs (including replacement of lost generation) associated with our transfer of Colstrip ownership to NorthWestern as of January 1, 2026. See “Item 7.
Weather impacts are described in the following subtopics: • certain retail electricity and natural gas sales, • the cost of natural gas supply, and • the cost of power supply. Certain retail electricity and natural gas sales volumes vary directly with changes in temperatures.
These effects could increase as climate changes occur. Weather impacts are described in the following subtopics: • certain retail electricity and natural gas sales, • the cost of natural gas supply, and • the cost of power supply. Certain retail electricity and natural gas sales volumes vary directly with changes in temperatures.
Our generation, transmission and distribution assets and the systems that monitor and operate these assets are critical infrastructure for providing service to our customers. Security threats are continuing to evolve, and our industry has been subject to, and will likely continue to be subject to, attempts to disrupt operations.
Our generation, transmission and distribution assets and the systems that monitor and operate these assets are critical infrastructure for providing service to our customers. Security threats are continuing to evolve, and our industry is subject to 28 AVISTA CORPORATION attempts to disrupt operations.
Strategic Risk Factors Our strategic business plans, which may be affected by the foregoing, may change, including the entry into new businesses and/or the exit from existing businesses and/or the curtailment of our business development efforts where potential future business is uncertain.
Not advancing the understanding and use of AI may compromise the operational and financial progress of the Company. 30 AVISTA CORPORATION Strategic Risk Factors Our strategic business plans, which may be affected by the foregoing, may change, including the entry into new businesses and/or the exit from existing businesses and/or the curtailment of our business development efforts where potential future business is uncertain.
Management's Discussion and Analysis – Environmental Issues and Contingencies” and “Forward-Looking Statements” for discussion of or reference to additional external mandates which could have a material adverse effect on our results of operations, financial condition and cash flows.
Management's Discussion and Analysis – Environmental Issues and Contingencies” and “Forward-Looking Statements” for discussion of or reference to additional external mandates which could have a material adverse effect on our results of operations, financial condition and cash flows. 32 AVISTA CORPORATION Financial Risk Factors Weather (temperatures, precipitation levels, wind patterns and storms) has a significant effect on our results of operations, financial condition and cash flows.
To the extent that power supply costs are above the amount allowed currently in retail rates, the difference is partially absorbed by the 30 AVISTA CORPORATION Company in current expense and is partially deferred or shared with customers through regulatory mechanisms.
To the extent that power supply costs are above the amount allowed currently in retail rates, the difference is partially absorbed by the Company in current expense and is partially deferred or shared with customers through regulatory mechanisms. However, these deferred costs require cash outflows from the time of power purchases until the costs are later recovered through retail rates.
In the event of any such default, it would be difficult to obtain financing on reasonable terms to pay creditors or fund operations. We would also likely be prohibited from paying dividends on our common stock. We may hedge a portion of our interest rate risk with financial derivative instruments, which may require the posting of collateral.
In the event of any such default, it would be difficult to obtain financing on reasonable terms to pay creditors or fund operations. We would also likely be prohibited from paying dividends on our common stock.
As a result of these combined factors, our net cost of power supply – the difference between our costs of generation and market purchases, reduced by our revenue from wholesale sales – varies significantly because of weather.
In extreme situations, we may be required to sell excess energy at negative prices. 33 AVISTA CORPORATION As a result of these combined factors, our net cost of power supply – the difference between our costs of generation and market purchases, reduced by our revenue from wholesale sales – varies significantly because of weather.
These cyberattacks have become more common and sophisticated and, as such, we could be required to incur costs to strengthen our systems and respond to emerging concerns. 27 AVISTA CORPORATION There are various risks associated with technology systems such as hardware or software failure, communications failure, data distortion or destruction, unauthorized access to data, misuse of proprietary or confidential data, unauthorized control through electronic means, programming mistakes and other deliberate or inadvertent human errors.
There are various risks associated with technology systems such as hardware or software failure, communications failure, data distortion or destruction, unauthorized access to data, misuse of proprietary or confidential data, unauthorized control through electronic means, programming mistakes and other deliberate or inadvertent human errors.
We have concentrations of credit risk related to our geographic location in the western United States and western Canada energy markets. These concentrations of counterparties and concentrations of geographic location may affect our overall exposure to credit risk because the counterparties may be similarly affected by changes in conditions.
We have concentrations of credit risk related to our geographic location in the western United States and western Canada energy markets.
Finally, there is the risk that we ultimately do not complete a project and will incur contract cancellation or other costs, which could be significant.
Finally, there is the risk that we ultimately do not complete a project and will incur contract cancellation or other costs, which could be significant. Problems with the transition, design or implementation of our new enterprise resource planning system could interfere with our business and operations, and adversely affect our financial condition.
The FERC, the NERC and the WECC perform periodic audits of the Company. Failure to comply with the FERC, the NERC, or the WECC requirements can result in financial penalties. Future legislation, administrative rules or Executive Orders could have a material adverse effect on our operations, results of operations, financial condition and cash flows.
The FERC, the NERC and the WECC perform periodic audits of the Company. Failure to comply with the FERC, the NERC, or the WECC requirements can result in financial penalties.
However, these deferred costs require cash outflows from the time of power purchases until the costs are later recovered through retail rates. The price of power tends to be lower during periods with excess supply, such as the spring when hydroelectric conditions are usually at their maximum and various facilities are required to operate to meet environmental mandates.
The price of power tends to be lower during periods with excess supply, such as the spring when hydroelectric conditions are usually at their maximum and various facilities are required to operate to meet environmental mandates. Oversupply can be exacerbated when intermittent resources such as wind generation produce output that may be supported by price subsidies.
We are a participant in the EIM, and engage in direct and indirect power purchase and sale transactions in connection with that participation.
These concentrations of counterparties and concentrations of geographic location may affect our overall exposure to credit risk because the counterparties may be similarly affected by changes in conditions. 34 AVISTA CORPORATION We are a participant in the EIM, and engage in direct and indirect power purchase and sale transactions in connection with that participation.
Removed
Financial Risk Factors Weather (temperatures, precipitation levels, wind patterns and storms) has a significant effect on our results of operations, financial condition and cash flows. These effects could increase as climate changes occur.
Added
Lack of control over facilities under PPAs could impact power supply costs Generating facilities not owned by us, whose output we acquire under a PPA, could be foreclosed on by creditors of the owner, even though we are performing under the terms of the PPA.
Removed
Oversupply can be exacerbated when intermittent resources such as wind generation are producing output that may be supported by price subsidies. In extreme situations, we may be required to sell excess energy at negative prices.
Added
This could result in either an increase in the price to be paid by us, or the output of the facilities being diverted from us and sold to other parties.
Removed
If market interest rates decrease below the interest rates we have locked in, this will result in a liability related to our interest rate swap derivatives, which can be significant. We may be required to post cash or letters of credit as collateral depending on fluctuations in the fair value of the derivative instruments.
Added
These cyberattacks have become more common and sophisticated and, as such, we could be required to incur costs to strengthen our systems and respond to emerging concerns.
Removed
Settlement of interest rate swap derivative instruments in a liability position could require a significant amount of cash, which could negatively impact our liquidity and short-term credit availability and increase interest expense over the term of the associated debt.
Added
We are in the process of planning for the implementation of a new cloud-based enterprise resource planning system, which will take multiple years to complete. See further information on the enterprise resource planning system within “Item 7. Management's Discussion and Analysis – Executive Overview”.
Added
There are transitional risks associated with the implementation, which may include loss of data in the conversion from on-premises systems to the cloud, difficulty compiling data for external reporting requirements, costs increasing throughout the project, or other challenges in our business operations.
Added
Difficulties faced during the transition could have a material adverse effect on our business, financial condition, and results of operations. The expanded adoption of artificial intelligence has the potential to increase exposure to cyberattacks and negatively impact business operations.
Added
The adoption of artificial intelligence (AI) is driving demand for energy while also presenting opportunities and unique risks to the utility business. AI enabled tools are proving to increase efficiency and add value to daily work processes as the use and adoption continues to expand.
Added
While use cases to drive efficiencies through AI develop, cyber attackers are targeting the tools and systems used to create the efficiencies, requiring enhanced analytics and monitoring. Reliance on AI generated information and data may enhance the exposure risk over time.
Added
AI driven solutions will be essential to compete in the marketplace, whether it be for material or energy procurement, or financial transactions, AI will accelerate data driven decision making. Therefore, AI literacy is essential.
Added
Non-regulated investments in businesses outside of our core utilities operations may increase earnings volatility and can be difficult to sell due to their illiquid nature. The fair values of our respective equity investments fluctuate from period to period, and such changes in fair value directly affect our net income.
Added
While we make these investments after prudent analysis and with the expectation of eventual financial gains, there is no assurance these investments will ultimately be successful. A significant portion of our investment portfolio consists of equity interests in privately held companies, which are inherently illiquid due to a lack of established market.
Added
Liquidity events are largely outside of our control, and may not occur on a timely basis (or may never occur). In addition, it is likely the value of these investments will continue to fluctuate as the businesses continue to mature, causing corresponding changes in our net income.
Added
The risks faced by these businesses may differ from the risks faced by our utility operations. External Mandates Risk Factors External mandate risk involves forces outside the Company, which may include significant changes in customer expectations, disruptive technologies that result in obsolescence of our business model and government action that could impact the Company.
Added
Future legislation, administrative rules or Executive Orders could have a material adverse effect on our operations, results of operations, financial condition and cash flows. 36 AVISTA CORPORATION Resource Adequacy Risk Factors Multiple factors are influencing the ability to source and deliver adequate energy to meet customer demand, which could lead to power and gas market liquidity risks.
Added
Local and regional factors may occur and impact our ability to meet energy needs during periods of high demand or unplanned events.
Added
Locally, some combination of factors such as unanticipated load growth, unforeseen localized climatic changes, decreases in water availability for hydro generation, and prolonged unplanned generation outages could result in being short the energy we need to meet customer demand.
Added
External to localized conditions and events, the regional wholesale market, to which we would turn to purchase energy to meet short-term shortfalls, has become strained during regional events.
Added
If the northwest region does not build sufficient new generation capacity and additional transmission and gas transport, there is a risk that we will not be able to depend on excess energy market purchases to meet customer demand during extreme weather events.
Added
These factors are increasing the risk of potential regional energy supply shortages and the ability for us to access additional energy during periods of high demand or unplanned events.

Item 2. Properties

Properties — owned and leased real estate

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We have an electric transmission system of approximately 700 miles of 230 kV line and approximately 1,600 miles of 115 kV line. We also own an 11 percent interest in approximately 500 miles of a 500 kV line between Colstrip, Montana and Townsend, Montana.
We have an electric transmission system of approximately 700 miles of 230 kV line and approximately 1,600 miles of 115 kV line. We also own an 11 percent interest in approximately 600 miles of a 500 kV line between Colstrip, Montana and Townsend, Montana.
The 115 kV lines provide for transmission of energy and the integration of smaller generation facilities with our service-area load centers, including the Spokane River hydroelectric projects, the Kettle Falls projects, Rathdrum CT, Boulder Park GS and the Northeast CT.
The 115 kV lines provide for transmission of energy and the integration of smaller generation facilities with our service-area load centers, including the Spokane River hydroelectric projects, the Kettle Falls projects, Rathdrum CT, Boulder Park GS and Northeast CT.
Avista Utilities' electric properties, located in the states of Washington, Idaho, Montana and Oregon, include the following: Company-Owned Generation Properties Present Capability (MW) (1) Hydroelectric Generating Stations (River) Washington: Long Lake (Spokane) 88 Little Falls (Spokane) 48 Nine Mile (Spokane) 41 Upper Falls (Spokane) 10 Monroe Street (Spokane) 15 Idaho: Cabinet Gorge (Clark Fork) (2) 273 Post Falls (Spokane) 12 Montana: Noxon Rapids (Clark Fork) 562 Total Hydroelectric 1,049 Thermal Generating Stations (cycle, fuel source) Washington: Kettle Falls GS (combined-cycle, wood waste) (3) 53 Kettle Falls CT (combined-cycle, natural gas) (3) 7 Northeast CT (simple-cycle, natural gas) 65 Boulder Park GS (simple-cycle, natural gas) 25 Idaho: Rathdrum CT (simple-cycle, natural gas) 166 Montana: Colstrip Units 3 and 4 (simple-cycle, coal) (4) 222 Oregon: Coyote Springs 2 (combined-cycle, natural gas) 322 Total Thermal 860 Total Generation Properties 1,909 (1) Present capability is the maximum capacity of the plant under standard test conditions without exceeding specified limits of temperature, stress and environmental conditions.
Avista Utilities' electric properties, located in the states of Washington, Idaho, Montana and Oregon, include the following: Company-Owned Generation Properties Present Capability (MW) (1) Hydroelectric Generating Stations (River) Washington: Long Lake (Spokane) 88 Little Falls (Spokane) 48 Nine Mile (Spokane) 41 Upper Falls (Spokane) 10 Monroe Street (Spokane) 15 Idaho: Cabinet Gorge (Clark Fork) (2) 273 Post Falls (Spokane) 12 Montana: Noxon Rapids (Clark Fork) 562 Total Hydroelectric 1,049 Thermal Generating Stations (cycle, fuel source) Washington: Kettle Falls GS (combined-cycle, wood waste) (3) 53 Kettle Falls CT (combined-cycle, natural gas) (3) 7 Northeast CT (simple-cycle, natural gas) 65 Boulder Park GS (simple-cycle, natural gas) 25 Idaho: Rathdrum CT (simple-cycle, natural gas) 166 Montana: Colstrip Units 3 and 4 (simple-cycle, coal) (4) — Oregon: Coyote Springs 2 (combined-cycle, natural gas) 322 Total Thermal 638 Total Generation Properties 1,687 (1) Present capability is the maximum capacity of the plant under standard test conditions without exceeding specified limits of temperature, stress and environmental conditions.
These lines interconnect with the BPA, Chelan County PUD, the Grand Coulee Project Hydroelectric Authority, Grant County PUD, NorthWestern, PacifiCorp and Pend Oreille County PUD. Both the 115 kV and 230 kV interconnections with the BPA are used to transfer energy to facilitate service to each other’s customers that are connected through the other’s transmission system.
These lines interconnect with the BPA, Chelan County PUD, the Grand Coulee Project Hydroelectric Authority, Grant County PUD, NorthWestern, PacifiCorp and Pend Oreille County PUD. Both the 115 kV and 230 kV interconnections with the BPA are used to transfer energy to facilitate service to each other’s customers that are connected through the other’s 40 AVISTA CORPORATION transmission system.
We hold a long-term transmission agreement with the BPA that allows us to serve our native load customers that are connected through the BPA’s transmission system. 36 AVISTA CORPORATION Natural Gas Plant Avista Utilities has natural gas distribution mains of approximately 3,600 miles in Washington, 2,200 miles in Idaho and 2,400 miles in Oregon.
We hold a long-term transmission agreement with the BPA that allows us to serve our native load customers that are connected through the BPA’s transmission system. Natural Gas Plant Avista Utilities has natural gas distribution mains of approximately 3,600 miles in Washington, 2,300 miles in Idaho and 2,400 miles in Oregon.
(3) Our output from this contract is expected to increase to a total of 147 MW by 2030 as we receive additional capacity under this contract. Electric Distribution and Transmission Plant Avista Utilities owns and operates approximately 19,900 miles of primary and secondary electric distribution lines providing service to retail customers.
(3) Our output from this contract is expected to increase to a total of 147 MW by 2030 as we receive additional capacity under this contract. Electric Distribution and Transmission Plant Avista Utilities owns and operates approximately 20,000 miles of primary and secondary electric distribution lines providing service to retail customers.
The following is a summary of PPAs as of December 31, 2024: Generating Source Present Capability (MW) (1) Expiration of Contract Hydroelectric Douglas County PUD 16 2028 Grant County PUD 76 2052 Chelan County PUD (2) 175 2045 Columbia Basin Hydro (3) 11 2045 Total Hydroelectric 278 Thermal Lancaster 270 2041 Wind Clearwater Wind 100 2055 Palouse Wind 105 2042 Rattlesnake Flat Wind 144 2040 Total Wind 349 Solar Lind Solar 28 2038 Total Power Purchase Agreements 925 (1) Present capability is the maximum capacity of the plant under standard test conditions without exceeding specified limits of temperature, stress and environmental conditions.
The following is a summary of PPAs as of December 31, 2025: Generating Source Present Capability (MW) (1) Expiration of Contract Hydroelectric Douglas County PUD 16 2028 Grant County PUD 76 2052 Chelan County PUD (2) 263 2045 Columbia Basin Hydro (3) 103 2045 Total Hydroelectric 458 Thermal Lancaster 276 2041 Wind Clearwater Wind 98 2055 Palouse Wind 105 2042 Rattlesnake Flat Wind 144 2040 Total Wind 347 Solar Lind Solar 20 2038 Total Power Purchase Agreements 1,100 (1) Present capability is the maximum capacity of the plant under standard test conditions without exceeding specified limits of temperature, stress and environmental conditions.
(4) Jointly owned; data refers to our 15 percent interest. See “Item 7. Management’s Discussion and Analysis of Financial Condition – Colstrip” for information related to Colstrip Units 3 and 4. Electric Power Purchase Agreements Avista Utilities enters into long-term PPAs to purchase a portion or all of the output of specific generation assets.
(4) Our 15 percent interest in Colstrip was transferred to NorthWestern on January 1, 2026. See “Item 7. Management’s Discussion and Analysis of Financial Condition – Colstrip” for information related to Colstrip Units 3 and 4. Electric Power Purchase Agreements Avista Utilities enters into long-term PPAs to purchase a portion or all of the output of specific generation assets.
These generating assets are owned by other parties, not the Company, and are not subject to the lien of Avista Corp.'s mortgage 35 AVISTA CORPORATION indenture. See further discussion of certain of these PPAs in “Part 1 – Item 1. Business – Avista Utilities – Electric Operations”.
These generating assets are owned by other parties, not the Company, and are not subject to the lien of Avista Corp.'s mortgage 39 AVISTA CORPORATION indenture. However, these assets are subject to the liens securing the indebtedness of the respective owners. See further discussion of certain of these PPAs in “Part 1 – Item 1.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The OPUC's AERC acquisition order requires Avista Utilities to maintain a capital structure of no less than 35 percent common equity (inclusive of short-term debt). This limitation may be revised upon request by the Company with approval from the OPUC.
The OPUC's AERC acquisition order requires Avista Utilities to maintain a capital structure of no less than 35 percent common equity (including short-term debt). This limitation may be revised upon request by the Company with approval from the OPUC.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Avista Corp. Market Information and Dividend Policy Avista Corp.'s common stock is listed on the New York Stock Exchange under the ticker symbol “AVA.” As of January 31, 2025, there were 5,781 registered shareholders of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Avista Corp. Market Information and Dividend Policy Avista Corp.'s common stock is listed on the New York Stock Exchange under the ticker symbol “AVA.” As of January 31, 2026, there were 5,541 registered shareholders of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

166 edited+78 added−61 removed136 unchanged
Negative amounts are decreases in decoupling revenue in the current year and will be rebated to customers in future years.
Negative amounts are decreases in decoupling revenue in the current year and will be rebated to customers in future years.
(b) Positive amounts are increases in decoupling revenue in the current year and are related to the amortization of rebate balances that resulted in prior years and are being refunded to customers (causing a corresponding decrease in retail revenue from customers) in the current year.
(b) Positive amounts are increases in decoupling revenue in the current year and are related to the amortization of rebate balances that resulted in prior years and are being refunded to customers (causing a corresponding decrease in retail revenue from customers) in the current year.
This reduction in usage and demand would reduce our revenue and negatively impact our financial condition including possibly leading to our inability to fully recover our investments in generation, transmission and distribution assets. Similarly, our natural gas distribution operations compete with other energy sources including heating oil, propane and other fuels.
This reduction in usage and demand would reduce our revenue and negatively impact our financial condition, possibly leading to our inability to fully recover our investments in generation, transmission and distribution assets. Similarly, our natural gas distribution operations compete with other energy sources including heating oil, propane and other fuels.
Executing this extended hedging program may increase our credit risk and demands on us for collateral. Our credit risk management process is designed to mitigate such credit risks through limit setting, contract protections and counterparty diversification, among other practices. Credit risk affects demands on our capital.
Executing this extended hedging program may increase our credit risk and demands on us for collateral. Our credit risk management process is designed to mitigate such risks through limit setting, contract protections and counterparty diversification, among other practices. Credit risk affects demands on our capital.
In its review, WUTC Staff raised three concerns related to (1) whether forecasted 2025 investments are allowed in rates; (2) whether the capital investment included in the filing will be used and useful for customers prior to the end of 2025; and (3) one major capital investment that will not be in service until 2027.
In its review, WUTC Staff raised concerns related to (1) whether forecasted 2025 investments are allowed in rates; (2) whether the capital investment included in the filing will be used and useful for customers prior to the end of 2025; and (3) one major capital investment that will not be in service until 2027.
Our energy resources risk policy includes a wholesale energy markets credit policy and control procedures to manage energy commodity price and credit risks. Nonetheless, adverse changes in commodity prices, generating capacity, customer loads, regulation and other factors may result in losses of earnings, cash flows and/or fair values.
Our energy resources risk policy includes a wholesale energy markets credit policy and control procedures to manage energy commodity price and credit risks. Nonetheless, adverse changes in commodity prices, generating capacity, customer loads, regulation, weather, and other factors may result in losses of earnings, cash flows and/or fair values.
We intend to seek recovery of costs related to requirements through the ratemaking process. Clean Air Act (CAA) The CAA creates numerous requirements for our thermal generating plants. Colstrip, Kettle Falls GS, Coyote Springs and Rathdrum CT all require CAA Title V operating permits.
We intend to seek recovery of costs related to requirements through the ratemaking process. Clean Air Act (CAA) The CAA creates numerous requirements for our thermal generating plants. Kettle Falls GS, Coyote Springs and Rathdrum CT all require CAA Title V operating permits.
We may hedge a portion of our interest rate risk with financial derivative instruments, particularly to manage risk associated with significant concentrations of forecasted debt issuances. The Finance Committee of the Board of Directors periodically reviews and discusses interest rate risk management processes and the steps management has undertaken to control interest rate risk.
We may hedge a portion of our interest rate risk with derivative instruments, particularly to manage risk associated with significant concentrations of forecasted debt issuances. The Finance Committee of the Board of Directors periodically reviews and discusses interest rate risk management processes, and the steps management has undertaken to control interest rate risk.
In addition to the above, we enter into derivative instruments to hedge exposure to certain risks, including fluctuations in commodity prices, foreign exchange rates and interest rates (for purposes of issuing long-term debt in the future).
In addition to the above, we enter into derivative instruments to hedge exposure to certain risks, including fluctuations in commodity prices and foreign exchange rates (for purposes of issuing long-term debt in the future).
The following accounting policies represent those that management believes are particularly important to the consolidated financial statements and require the use of estimates and assumptions: • Regulatory accounting , in accordance with ASC Topic 980, Regulated Operations , among other things, requires that costs and/or obligations that, in our judgement, are probable of recovery through rates charged to customers, but are not yet reflected in rates, not be reflected in our Consolidated Statements of Income until the period in which they are reflected in rates and matching revenues are recognized.
The following accounting policies represent those that management believes are particularly important to the consolidated financial statements and require the use of estimates and assumptions: • Regulatory accounting , in accordance with ASC Topic 980, Regulated Operations , among other things, requires that costs and/or obligations that, in our judgment, are probable of recovery through rates charged to customers, but are not yet reflected in rates, not be reflected in our Consolidated Statements of Income until the period in which they are reflected in rates and matching revenues are recognized.
Environmental laws and regulations may restrict or impact our business activities in many ways, including, but not limited to: 61 AVISTA CORPORATION • increasing the operating costs of generating plants, natural gas and electric transmission and distribution facilities and other assets, • increasing the lead time and capital costs for the construction of new generating plants, natural gas and electric transmission and distribution facilities and other assets, • requiring modification of existing generating plants, natural gas and electric transmission and distribution facilities, • requiring existing generating plant, natural gas and/or operations to be curtailed or shut down, • reducing the amount of energy available from generating plants, • restricting the types of generating plants that can be built or contracted with, • requiring construction of specific types of generation plants at higher cost, and • increasing costs of distributing, or limiting our ability to distribute, electricity and/or natural gas.
Environmental laws and regulations may restrict or impact our business activities in many ways, including, but not limited to: • increasing the operating costs of generating plants, natural gas and electric transmission and distribution facilities and other assets, • increasing the lead time and capital costs for the construction of new generating plants, natural gas and electric transmission and distribution facilities and other assets, • requiring modification of existing generating plants, natural gas and electric transmission and distribution facilities, • requiring existing generating plant, natural gas and/or operations to be curtailed or shut down, • reducing the amount of energy available from generating plants, • restricting the types of generating plants that can be built or contracted with, • requiring construction of specific types of generation plants at higher cost, and • increasing costs of distributing, or limiting our ability to distribute, electricity and/or natural gas.
This Executive Order led to the Oregon Department of Environmental Quality developing cap and reduce rules known as the CPP. The CPP, which became effective in January 2022, outlines GHG emissions reduction goals of 50 percent by 2035 and 90 percent by 2050 from the 1990 baseline. The first three-year compliance period is 2022 through 2024.
This Executive Order led to the Oregon Department of Environmental Quality developing cap and reduce rules known as the CPP. The CPP, which became effective in January 2022, outlines GHG emissions reduction goals of 50 percent by 2035 and 90 percent by 2050 from the 1990 baseline. The first three-year compliance period was 2022 through 2024.
The approved rates are also designed to increase annual natural gas base revenues by $14 million (or 11.2 percent), effective January 1, 2025, and $4 million (or 2.8 percent) for Rate Year 2. The WUTC approved an ROE of 9.8 percent, based on a common equity ratio of 48.5 percent, and an ROR of 7.32 percent.
The approved rates were also designed to increase annual natural gas base revenues by $14 million (or 11.2 percent), effective January 1, 2025, and $4 million (or 2.8 percent) for Rate Year 2. The WUTC approved an ROE of 9.8 percent, based on a common equity ratio of 48.5 percent, and an ROR of 7.32 percent.
To prevent the threat of municipalization, we work to build strong relationships with the communities we serve through, among other things: • communicating and being involved with local business leaders and community organizations, • providing customers with a multitude of limited income initiatives, including energy fairs, senior outreach, low income workshops, mobile outreach strategy and a Low Income Rate Assistance Plan, 68 AVISTA CORPORATION • tailoring internal company initiatives to focus on choices for customers, to increase their overall satisfaction with the Company, and • engaging in the legislative process in a manner that fosters the interests of our customers and the communities we serve.
To prevent the threat of municipalization, we work to build strong relationships with the communities we serve through, among other things: • communicating and being involved with local business leaders and community organizations, • providing customers with a multitude of limited income initiatives, including energy fairs, senior outreach, low income workshops, mobile outreach strategy and a Low Income Rate Assistance Plan, • tailoring internal initiatives to focus on choices for customers, to increase their overall satisfaction with the Company, and • engaging in the legislative process in a manner that fosters the interests of our customers and the communities we serve.
Business Segments As of December 31, 2024, we have two reportable business segments, Avista Utilities and AEL&P. We also have other businesses which do not represent a reportable business segment and are conducted by various direct and indirect subsidiaries of Avista Corp. See “Part I, Item 1. Business – Company Overview” for further discussion of our business segments.
Business Segments As of December 31, 2025, we have two reportable business segments, Avista Utilities and AEL&P. We also have other businesses which do not represent a reportable business segment and are conducted by various direct and indirect subsidiaries of Avista Corp. See “Part I, Item 1. Business – Company Overview” for further discussion of our business segments.
Actual expenditures may vary from our estimates due to factors such as changes in business conditions or strategic plans. See “Liquidity” for information regarding other material cash requirements for 2025 and thereafter. Pensio n Plan We contributed $10 million to the pension plan in 2024.
Actual expenditures may vary from our estimates due to factors such as changes in business conditions or strategic plans. See “Liquidity” for information regarding other material cash requirements for 2026 and thereafter. Pensio n Plan We contributed $10 million to the pension plan in 2025.
Each security rating agency has its own methodology for assigning ratings, and, accordingly, each rating should be considered in the context of the applicable methodology, independent of all other ratings. The rating agencies provide ratings at the request of Avista Corp. and charge fees for their services. Divid ends See “Item 5.
Each security rating agency has its own methodology for assigning ratings, and, accordingly, each rating should be considered in the context of the applicable methodology, independent of all other ratings. The rating agencies provide ratings at the request of Avista Corp. and charge fees for their services. 64 AVISTA CORPORATION Divid ends See “Item 5.
Credit Risk Counterparty Non-Performance Risk We enter into bilateral transactions with various counterparties. We also trade energy and related derivative instruments through clearinghouse exchanges. Counterparty non-performance risk relates to potential losses that we would incur due to non-performance of contractual obligations by counterparties to deliver energy or make financial settlements.
Credit Risk Counterparty Non-Performance Risk We enter into bilateral transactions with various counterparties. We also trade energy and related derivative instruments through clearinghouses and exchanges. Counterparty non-performance risk relates to potential losses that we would incur due to non-performance of contractual obligations by counterparties to deliver energy or make financial settlements.
Discussion of 2022 financial statement items and comparisons between 2023 and 2022 not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Conditions and Results of Operations” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
Discussion of 2023 financial statement items and comparisons between 2024 and 2023 not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Conditions and Results of Operations” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
In conjunction with the oversight committees, our management team develops hedging strategies, detailed resource procurement plans, resource optimization strategies and long-term integrated resource planning to mitigate some of the risk associated with energy commodities. The various plans and strategies are monitored daily and developed with quantitative methods.
In conjunction with the oversight committees, our management team develops hedging strategies, detailed resource procurement plans, resource optimization strategies and long-term integrated resource planning to mitigate some of the risks associated with energy commodities. The various plans and strategies are monitored daily and developed with quantitative methods.
Our resource optimization transactions can take the form of physical sales and purchases of electric capacity and energy and fuel for electric generation, purchases and sales of natural gas to optimize use of pipeline and storage capacity, as well as financial derivative contracts related to capacity, energy, fuel and fuel transportation. See Item 1.
Our resource optimization transactions can take the form of physical sales and purchases of electric capacity and energy and fuel for electric generation, purchases and sales of natural gas to optimize use of pipeline and storage capacity, as well as derivative transactions related to capacity, energy, fuel and fuel transportation. See Item 1.
The ERM, PCA and PGAs are based on net supply costs and consider all transactions related to resource procurement and optimization (both physical and financial). 45 AVISTA CORPORATION 2024 compared to 2023 Utility Operating Revenues The following graphs present Avista Utilities' electric operating revenues and MWh sales for 2024 and 2023, respectively (dollars in millions and MWhs in thousands): (1) This balance includes public street and highway lighting, which is considered part of retail electric revenues, and deferrals/amortizations to customers related to federal income tax law changes.
The ERM, PCA and PGAs are based on net supply costs and consider all transactions related to resource procurement and optimization (both physical and financial). 50 AVISTA CORPORATION 2025 compared to 2024 Utility Operating Revenues The following graphs present Avista Utilities' electric operating revenues and MWh sales for 2025 and 2024, respectively (dollars in millions and MWhs in thousands): (1) This balance includes public street and highway lighting, which is considered part of retail electric revenues, and deferrals/amortizations to customers related to federal income tax law changes.
Avista Corp. has a committed line of credit in the total amount of $500 million and an expiration date of June 2028, with the option to extend for an additional one year period (subject to customary conditions).
Avista Corp. has a committed line of credit in the total amount of $500 million and an expiration date of June 2029, with the option to extend for an additional one-year period (subject to customary conditions).
The approved rates within the orders are designed to increase annual electric base revenues by $12 million (or 2.0 percent), effective January 1, 2025 (Rate Year 1), and $44 million (or 7.5 percent) for Rate Year 2.
The approved rates within the orders were designed to increase annual electric base revenues by $12 million (or 2.0 percent), effective January 1, 2025 (Rate Year 1), and $44 million (or 7.5 percent) for Rate Year 2.
Factors that could cause purchased power and natural gas costs to exceed the levels currently recovered 54 AVISTA CORPORATION from customers under base rates include, but are not limited to, higher prices in wholesale markets and/or an increased need to purchase power in the wholesale markets, and a lack of regulatory approval for higher authorized net power supply costs.
Factors that could cause purchased power and natural gas costs to exceed the levels currently recovered from customers under base rates include, but are not limited to, higher prices in wholesale markets and/or an increased need to purchase power in the wholesale markets, and a lack of regulatory approval for higher authorized net power supply costs.
The emissions performance standard prevents utilities from constructing or purchasing generation facilities, or entering into power purchase agreements of five years or longer duration to purchase energy produced by plants that have emission levels higher than 925 pounds of GHG per MWh. The Washington State Department of Commerce reviews the standard every five years.
The emissions performance standard prevents utilities from constructing or purchasing generation facilities, or entering into power purchase agreements of five years or longer duration to purchase energy produced by plants that have emission levels higher than 925 pounds of GHG 67 AVISTA CORPORATION per MWh. The Washington State Department of Commerce reviews the standard every five years.
The Oregon 64 AVISTA CORPORATION Department of Environmental Quality did not appeal the decision, but instead went back through the rulemaking process. The result of that process was a new version of the CPP that is very similar to the original. We are reviewing the new rules, and considering what legal action, if any, may be taken.
The Oregon Department of Environmental Quality did not appeal the decision, but instead went back through the rulemaking process. The result of that process was a new version of the CPP that is very similar to the original. We are reviewing the new rules, and considering what legal action, if any, may be taken.
The AOC requires MDEQ to review Remedy and Closure plans for all parts of the Colstrip plant through an ongoing public process. The AOC also requires the Colstrip owners to provide financial assurance, primarily in the form of surety bonds, to secure each owner’s pro rata share of various anticipated closure and remediation obligations.
The AOC requires MDEQ to review Remedy and Closure plans for all parts of the Colstrip plant through an ongoing public process. The AOC also requires the Colstrip owners to provide financial assurance, primarily in the form of surety bonds, to 71 AVISTA CORPORATION secure each owner’s pro rata share of various anticipated closure and remediation obligations.
Our primary identified categories of risk exposure are: • Utility regulatory • Strategic • Operational • External mandates • Climate Change • Financial • Cybersecurity • Energy commodity • Technology • Compliance Our primary categories of risks are described in “Item 1A.
Our primary identified categories of risk exposure are: • Utility regulatory • External mandates • Operational • Financial • Climate change • Energy commodity • Cybersecurity • Compliance • Technology • Resource adequacy • Strategic Our primary categories of risks are described in “Item 1A.
See further discussion at “Capital Resources.” We regularly file for rate adjustments for recovery of operating costs and capital investments and to seek the opportunity to earn reasonable returns. We have regulatory mechanisms in place that provide for the deferral and recovery of the majority of power and natural gas supply costs.
See further discussion at “Capital Resources.” 59 AVISTA CORPORATION We regularly file for rate adjustments for recovery of operating costs and capital investments and to seek the opportunity to earn reasonable returns. We have regulatory mechanisms in place that provide for the deferral and recovery of the majority of power and natural gas supply costs.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” for a detailed discussion of our dividend policy and the factors which could limit the payment of dividends. 59 AVISTA CORPORATION Compet ition Our electric and natural gas distribution utility business has historically been recognized as a natural monopoly.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” for a detailed discussion of our dividend policy and the factors which could limit the payment of dividends. Compet ition Our electric and natural gas distribution utility business has historically been recognized as a natural monopoly.
See further discussion of the energy resources risk policy below. Oversight of the operational risk management process is performed by the Environmental, Technology and Operations Committee of the Board of Directors and from senior management with input from each operating department. 67 AVISTA CORPORATION Climate Change Risk Multiple departments work to mitigate risks related to climate change.
See further discussion of the energy resources risk policy below. Oversight of the operational risk management process is performed by the Environmental, Technology and Operations Committee of the Board of Directors and from senior management with input from each operating department. Climate Change Risk Multiple departments work to mitigate risks related to climate change.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section of this Annual Report on Form 10-K generally discusses financial statement items and comparisons between 2024 and 2023.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section of this Annual Report on Form 10-K generally discusses financial statement items and comparisons between 2025 and 2024.
Direct impacts of climate changes include, without limitation, variations in the amount and timing of energy demand throughout the year, variations in the level and timing of precipitation throughout the year, as well as variations in temperature, and the resulting impact on the availability of hydroelectric resources at times of peak demand as well as an increased risk of wildfire and other impacts of extreme weather.
Direct impacts of climate changes include, without limitation, variations in the amount and timing of energy demand throughout the year, variations in the level and timing of precipitation throughout the year, as well as variations in temperature, and the resulting impact on the availability of hydroelectric resources at times of peak demand as 66 AVISTA CORPORATION well as an increased risk of wildfire and other impacts of extreme weather.
The difference in approved rates for Rate Year 1 and those included in our original request of a $77 million increase is primarily due to a $56 million decrease in power supply costs compared to those set forth in the original request, and also due to a lower approved return on equity than what was requested.
The difference in approved rates for Rate Year 1 and those included in our original request of $77 million is primarily due to a $56 million decrease in power supply costs compared to those set forth in the original request, and also due to a lower approved return on equity than requested.
Meanwhile, these costs and/or obligations are deferred and reflected on our Consolidated Balance Sheets as regulatory assets or liabilities. We generally receive regulatory orders before deferring costs as regulatory assets and liabilities; however, in certain instances in which we have regulatory precedent, we may not request an order before deferring the costs.
Meanwhile, these costs and/or obligations are deferred and reflected on our Consolidated Balance Sheets as regulatory assets or liabilities. We generally receive regulatory orders before deferring costs as regulatory assets and liabilities; however, in certain instances in which 57 AVISTA CORPORATION we have regulatory precedent, we may not request an order before deferring the costs.
See “Enterprise Risk Management – Credit Risk Liquidity Considerations” and “Note 8 of the Notes to Consolidated Financial Statements.” The following table summarizes our credit ratings as of February 25, 2025: Standard & Poor's (1) Moody's (2) Corporate/Issuer rating BBB Baa2 Senior Secured Debt A- A3 Senior Unsecured Debt BBB Baa2 (1) Standard & Poor’s lowest “investment grade” credit rating is BBB-.
See “Enterprise Risk Management – Credit Risk Liquidity Considerations” and “Note 8 of the Notes to Consolidated Financial Statements.” The following table summarizes our credit ratings as of February 24, 2026: Standard & Poor's (1) Moody's (2) Corporate/Issuer rating BBB Baa2 Senior Secured Debt A- A3 Senior Unsecured Debt BBB Baa2 (1) Standard & Poor’s lowest “investment grade” credit rating is BBB-.
The most directly comparable GAAP 44 AVISTA CORPORATION financial measure to electric and natural gas utility margin is utility operating revenues as presented in “Note 24 of the Notes to Consolidated Financial Statements.” The presentation of electric utility margin and natural gas utility margin is intended to enhance understanding of our operating performance.
The most directly comparable GAAP financial measure to electric and natural gas utility margin is utility operating revenues as presented in “Note 24 of the Notes to Consolidated Financial Statements.” The presentation of electric utility margin and natural gas utility margin is intended to enhance understanding of our operating performance.
See “Notes 1, 4 and 23 of the Notes to Consolidated Financial Statements” for further discussion of our regulatory accounting policy and mechanisms. • Pension plans and other postretirement benefit plans , discussed in further detail below. • Equity investments, specifically valuations performed to determine the fair value of certain investment holdings, require judgement in the selection of assumptions used to estimate fair value of investments for which there is not a 52 AVISTA CORPORATION quoted active market price.
See “Notes 1, 4 and 23 of the Notes to Consolidated Financial Statements” for further discussion of our regulatory accounting policy and mechanisms. • Pension plans and other postretirement benefit plans , discussed in further detail below. • Equity investments, specifically valuations performed to determine the fair value of certain investment holdings, require judgment in the selection of assumptions used to estimate fair value of investments for which there is not a quoted active market price.
When direct or indirect impacts of climate change lead to increased operational costs or capital investments, we intend to recover such costs through the ratemaking process.
When direct or indirect impacts of climate change cause increased operational costs or capital investments, we intend to recover such costs through the ratemaking process.
The following chart reflects the sensitivities associated with a change in certain actuarial assumptions by the indicated percentage (dollars in millions): Actuarial Assumption Change in Assumption Effect on Projected Benefit Obligation Effect on Pension Cost Expected long-term return on plan assets (0.5 )% $ — * $ 3 Expected long-term return on plan assets 0.5 % — * (3 ) Discount rate (0.5 )% 31 3 Discount rate 0.5 % (28 ) (3 ) * Changes in the expected return on plan assets would not affect our projected benefit obligation.
The following chart reflects the sensitivities associated with a change in certain actuarial assumptions by the indicated percentage (dollars in millions): Actuarial Assumption Change in Assumption Effect on Projected Benefit Obligation Effect on Pension Cost Expected long-term return on plan assets (0.5 )% $ — * $ 3 Expected long-term return on plan assets 0.5 % — * (3 ) Discount rate (0.5 )% 33 3 Discount rate 0.5 % (30 ) (3 ) * Changes in the expected return on plan assets would not affect our projected benefit obligation.
Negative amounts are decreases in decoupling revenue in the current year and are related to the amortization of surcharge balances that resulted in prior years and are being surcharged to customers (causing a corresponding increase in retail revenue from customers) in the current year. Total electric revenues increased $129 million for 2024 as compared to 2023.
Negative amounts are decreases in decoupling revenue in the current year and are related to the amortization of surcharge balances that resulted in prior years and are being surcharged to customers (causing a corresponding increase in retail revenue from customers) in the current year. Total electric revenues increased $43 million for 2025 as compared to 2024.
We manage our capital structure to maintain a financial risk profile that we believe these parties will deem prudent. We forecast cash requirements to determine liquidity needs, including sources and variability of cash flows that may arise from spending plans or from external forces, such as changes in energy prices or interest rates.
We manage our capital structure to maintain a financial risk profile that we believe will be deemed prudent. We forecast cash requirements to determine liquidity needs, including sources and variability of cash flows that may arise from spending plans or from external forces, such as changes in energy prices or interest rates.
We seek to mitigate credit risk by: • transacting through clearinghouse exchanges, • entering into bilateral contracts that specify credit terms and protections against default, 70 AVISTA CORPORATION • applying credit limits and duration criteria to existing and prospective counterparties, • actively monitoring credit exposures, • asserting collateral rights with counterparties, and • carrying out transaction settlements timely and effectively.
We seek to mitigate counterparty credit risk by: • transacting through clearinghouses and exchanges, • entering into bilateral contracts that specify credit terms and protections against default, • applying credit limits and duration criteria to existing and prospective counterparties, • actively monitoring credit exposures, 75 AVISTA CORPORATION • asserting collateral rights with counterparties, and • carrying out transaction settlements timely and effectively.
The events of default under each of the credit facilities also include a cross default from other indebtedness (as defined) and in some cases other obligations. Some of these agreements also include a covenant which does not permit our ratio of “consolidated total debt” to “consolidated total capitalization” to be greater than 65 percent at any time.
The events of default under each of the credit facilities also include a cross default from other indebtedness (as defined) and in some cases other obligations. The committed line of credit also includes a covenant which does not permit our ratio of “consolidated total debt” to “consolidated total capitalization” to be greater than 65 percent at any time.
In addition, in November 2022, the SBCC approved 63 AVISTA CORPORATION new building and energy codes for residential housing, requiring new residential buildings in Washington to use electricity as the primary heat source.
In addition, in November 2022, the SBCC approved new building and energy codes for residential housing, requiring new residential buildings in Washington to use electricity as the primary heat source.
Regulatory lag can be mitigated to some extent by the incorporation of reasonably expected forward-looking information into an authorization of increased rates. However, there is no protection against unexpected inflation and increased interest rates, as experienced in 2022 and 2023. See “Regulatory Matters” for additional discussion of the general rate cases.
Regulatory lag can be mitigated to some extent by the incorporation of reasonably expected forward-looking information into an authorization of increased rates. However, there is no protection against unexpected inflation and increased interest rates. See “Regulatory Matters” for additional discussion of the general rate cases.
Gains and losses on financial derivative contracts in certain line items below (such as wholesale sales and purchases of power and natural gas, sales of fuel, and other fuel costs).
Gains and losses on derivative contracts are included in certain line items below (such as wholesale sales and purchases of power and natural gas, sales of fuel, and other fuel costs).
These include: • Greenhouse gas regulations for new natural gas-based turbines and existing coal-based units, pursuant to section 111 of the Clean Air Act .
These include: 69 AVISTA CORPORATION • Greenhouse gas regulations for new natural gas-based turbines and existing coal-based units, pursuant to section 111 of the Clean Air Act .
We not only focus on whether opportunities are financially viable, but also consider whether these opportunities fall within our core policies and our core business strategies.
We not only focus on whether opportunities are financially viable, but also consider whether these opportunities fall within our core policies and our core 73 AVISTA CORPORATION business strategies.
We also have an Emergency Operating Center, which is a team of employees that plan for and train to deal with potential emergencies or unplanned outages at our facilities, resulting from natural disasters or other events. To prevent unauthorized access to our facilities, we have both physical and cyber security in place.
We also have an Emergency Operating Center, which is a team of employees that plan for and train to deal with potential emergencies or unplanned outages at our facilities, resulting from 72 AVISTA CORPORATION natural disasters or other events. To prevent unauthorized access to our facilities, we have both physical and cybersecurity in place.
Negative amounts are decreases in decoupling revenue in the current year and are related to the amortization of surcharge balances that resulted in prior years and are being surcharged to customers (causing a corresponding increase in retail revenue from customers) in the current year. Total natural gas revenues increased $35 million for 2024 as compared to 2023.
Negative amounts are decreases in decoupling revenue in the current year and are related to the amortization of surcharge balances that resulted in prior years and are being surcharged to customers (causing a corresponding increase in retail revenue from customers) in the current year. Total natural gas revenues decreased $22 million for 2025 as compared to 2024.
Total electric operating revenues in the graph above include intracompany sales of $4 million and $6 million for 2024 and 2023, respectively. 46 AVISTA CORPORATION The following table presents the current year decoupling deferrals and the amortization of prior year decoupling balances reflected in utility electric operating revenues for the years ended December 31 (dollars in millions): Electric Decoupling Revenues 2024 2023 Current year decoupling deferrals (a) $ 5 $ (3 ) Amortization of prior year decoupling deferrals (b) 18 15 Total electric decoupling revenue $ 23 $ 12 (a) Positive amounts are increases in decoupling revenue in the current year and will be surcharged to customers in future years.
Total electric operating revenues in the graph above include intracompany sales of $3 million and $4 million for 2025 and 2024, respectively. 51 AVISTA CORPORATION The following table presents the current year decoupling deferrals and the amortization of prior year decoupling deferrals reflected in utility electric operating revenues for the years ended December 31 (dollars in millions): Electric Decoupling Revenues 2025 2024 Current year decoupling deferrals (a) $ — $ 5 Amortization of prior year decoupling deferrals (b) (1 ) 18 Total electric decoupling revenue $ (1 ) $ 23 (a) Positive amounts are increases in decoupling revenue in the current year and will be surcharged to customers in future years.
In November 2024, Washington voters approved Initiative 2066, which would prohibit state and local governments from restricting access to natural gas, prohibit the SBCC from discouraging or penalizing the use of natural gas, and prohibit the WUTC from approving any multi-year rate plan that requires or incentivizes natural gas companies to terminate or limit natural gas service.
This lawsuit remains pending. 68 AVISTA CORPORATION In November 2024, Washington voters approved Initiative 2066, which would prohibit state and local governments from restricting access to natural gas, prohibit the SBCC from discouraging or penalizing the use of natural gas, and prohibit the WUTC from approving any multi-year rate plan that requires or incentivizes natural gas companies to terminate or limit natural gas service.
The following chart reflects the assumptions used each year for the pension discount rate (exclusive of the SERP), the expected long-term return on plan assets and the actual return on plan assets and their impacts to the pension plan associated with the change in assumption (dollars in millions): 2024 2023 2022 Discount rate (exclusive of SERP) Pension discount rate 6.13 % 5.86 % 6.10 % Increase/(decrease) to projected benefit obligation $ (17 ) $ 14 $ (198 ) Return on plan assets (a) Expected long-term return on plan assets 7.80 % 8.30 % 5.80 % Increase/(decrease) to pension costs $ 3 $ (13 ) $ (3 ) Actual return on plan assets, net of fees 7.30 % 15.00 % (21.80 )% Actual gain (loss) on plan assets $ 42 $ 79 $ (164 ) (a) The SERP has no plan assets.
The following chart reflects the assumptions used each year for the pension discount rate (exclusive of the SERP), the expected long-term return on plan assets and the actual return on plan assets and their impacts to the pension plan associated with the change in assumption (dollars in millions): 2025 2024 2023 Discount rate (exclusive of SERP) Pension discount rate 5.96 % 6.13 % 5.86 % Increase/(decrease) to projected benefit obligation $ 11 $ (17 ) $ 14 Return on plan assets (a) Expected long-term return on plan assets 7.40 % 7.80 % 8.30 % Increase/(decrease) to pension costs $ 2 $ 3 $ (13 ) Actual return on plan assets, net of fees 13.20 % 7.30 % 15.00 % Actual gain (loss) on plan assets $ 80 $ 42 $ 79 (a) The SERP has no plan assets.
The following table presents net income (loss) for each of our business segments and the other businesses, for the year ended December 31 (dollars in millions): 2024 2023 2022 Avista Utilities $ 179 $ 167 $ 118 AEL&P 8 9 7 Other non-reportable segment income (loss) (7 ) (5 ) 30 Net income $ 180 $ 171 $ 155 Executive Overview Overall Results Net income increased primarily due to the effects of general rate cases.
The following table presents net income (loss) for each of our business segments and the other businesses, for the year ended December 31 (dollars in millions): 2025 2024 2023 Avista Utilities $ 201 $ 179 $ 167 AEL&P 6 8 9 Other non-reportable segment loss (14 ) (7 ) (5 ) Net income $ 193 $ 180 $ 171 Executive Overview Overall Results Net income increased primarily due to the effects of general rate cases.
The following table presents the current year decoupling deferrals and the amortization of prior year decoupling balances reflected in natural gas operating revenues for the years ended December 31 (dollars in millions): Natural Gas Decoupling Revenues 2024 2023 Current year decoupling deferrals (a) $ 15 $ — Amortization of prior year decoupling deferrals (b) (3 ) (7 ) Total natural gas decoupling revenue $ 12 $ (7 ) 48 AVISTA CORPORATION (a) Positive amounts are increases in decoupling revenue in the current year and will be surcharged to customers in future years.
The following table presents the current year decoupling deferrals and the amortization of prior year decoupling balances reflected in natural gas operating revenues for the years ended December 31 (dollars in millions): Natural Gas Decoupling Revenues 2025 2024 Current year decoupling deferrals (a) $ 30 $ 15 Amortization of prior year decoupling deferrals (b) (6 ) (3 ) Total natural gas decoupling revenue $ 24 $ 12 53 AVISTA CORPORATION (a) Positive amounts are increases in decoupling revenue in the current year and will be surcharged to customers in future years.
As of December 31, 2024, AEL&P complied with this covenant with a ratio of 49.7 percent. As of December 31, 2024, Avista Corp. and its subsidiaries complied with the covenants of their financing agreements, and none of Avista Corp.'s subsidiaries constituted a “significant subsidiary” as defined in Avista Corp.'s committed line of credit.
As of December 31, 2025, AEL&P complied with this covenant with a ratio of 50.0 percent. As of December 31, 2025, Avista Corp. and its subsidiaries complied with the covenants of their financing agreements, and none of Avista Corp.'s subsidiaries constituted a “significant subsidiary” as defined in Avista Corp.'s committed line of credit.
The impact of an increase in resource costs on our results of operations from the tariffs would be partially mitigated by various deferral and recovery mechanisms (ERM, PCA, and PGAs), but there could be an immediate impact on our cash flow.
The impact of an increase in resource costs on our results of operations (directly or indirectly resulting from tariffs) would be substantially mitigated by various deferral and recovery mechanisms (ERM, PCA, and PGAs), but there could be an immediate impact on our cash flow.
If we no longer met the criteria to apply regulatory accounting or no longer allowed recovery of these costs, we would be required to recognize significant write-offs of regulatory assets and liabilities in the Consolidated Statements of Income.
If, due to changed circumstances, we no longer met the criteria to apply regulatory accounting or if we were no longer allowed to recover these costs, we would be required to recognize significant write-offs of regulatory assets and liabilities in the Consolidated Statements of Income.
Review of Consolidate d Cash Flow Statement 2024 compared to 2023 Consolidated Operating Activities Net cash provided by operating activities was $534 million for 2024 compared to $447 million for 2023.
Review of Consolidate d Cash Flow Statement 2025 compared to 2024 Consolidated Operating Activities Net cash provided by operating activities was $469 million for 2025 compared to $534 million for 2024.
We expect to contribute a total of $50 million to the pension plan in the period 2025 through 2029, with an annual contribution of $10 million.
We expect to contribute a total of $50 million to the pension plan in the period 2026 through 2030, with an annual contribution of $10 million.
Total natural gas operating revenues in the graph above include intracompany sales of $16 million and $33 million for 2024 and 2023, respectively.
Total natural gas operating revenues in the graph above include intracompany sales of $9 million and $16 million for 2025 and 2024, respectively.
This rule finalizes (a) the repeal of the Affordable Clean Energy rule; (b) guidelines for GHG emissions from existing fossil fuel-fired steam generating electric generating units; and (c) revisions to existing performance standards for new, reconstructed or heavily modified fossil fuel-fired stationary combustion turbine electric generating units. • Supplemental Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (ELG Rule) .
This rule finalizes (a) the repeal of the Affordable Clean Energy rule; (b) guidelines for GHG emissions from existing fossil fuel-fired steam generating electric generating units; and (c) revisions to existing performance standards for new, reconstructed or heavily modified fossil fuel-fired stationary combustion turbine electric generating units.
The extent of transactions conducted through exchanges has increased, as many market participants have shown a preference toward exchange trading and have reduced bilateral transactions. We actively monitor the collateral required by such exchanges to effectively manage capital requirements.
The extent of transactions conducted through clearinghouses and exchanges has increased, as many market participants have shown a preference for trading through these entities and have reduced bilateral transactions. We actively monitor the collateral required by clearinghouses and exchanges to effectively manage capital requirements.
Capital R esources Capital Structure Our consolidated capital structure, including the current portion of long-term debt and short-term borrowings consisted of the following as of December 31, 2024 and 2023 (dollars in millions): December 31, 2024 December 31, 2023 Amount Percent of total Amount Percent of total Current portion of long-term debt and leases $ 8 0.1 % $ 22 0.4 % Short-term borrowings 354 6.2 % 349 6.3 % Long-term debt to affiliated trusts 52 0.9 % 52 0.9 % Long-term debt and leases 2,711 47.4 % 2,618 47.4 % Total debt 3,125 54.7 % 3,041 55.0 % Total Avista Corporation shareholders’ equity 2,591 45.3 % 2,485 45.0 % Total $ 5,716 100.0 % $ 5,526 100.0 % Our shareholders’ equity increased $106 million during 2024 primarily due to net income and the issuance of common stock, partially offset by dividends paid.
Capital R esources Capital Structure Our consolidated capital structure, including the current portion of long-term debt and short-term borrowings consisted of the following as of December 31, 2025 and 2024 (dollars in millions): December 31, 2025 December 31, 2024 Amount Percent of total Amount Percent of total Current portion of long-term debt and leases $ 9 0.1 % $ 8 0.1 % Short-term borrowings 388 6.5 % 354 6.2 % Long-term debt to affiliated trusts 52 0.9 % 52 0.9 % Long-term debt and leases 2,846 47.4 % 2,711 47.4 % Total debt 3,295 54.9 % 3,125 54.7 % Total Avista Corporation shareholders’ equity 2,709 45.1 % 2,591 45.3 % Total $ 6,004 100.0 % $ 5,716 100.0 % Our shareholders’ equity increased $118 million during 2025 primarily due to net income and the issuance of common stock, partially offset by dividends paid.
The interest rate on $52 million of long-term debt to affiliated trusts is adjusted quarterly, reflecting current market rates. Amounts borrowed under our committed line of credit agreements have variable interest rates.
Our Risk Management Committee (RMC) also reviews the interest rate risk management plan. The interest rate on $52 million of long-term debt to affiliated trusts is adjusted quarterly, reflecting current market rates. Amounts borrowed under our committed line of credit agreements have variable interest rates.
We make estimates and assumptions as to many of these factors. In accordance with accounting standards, changes in pension plan obligations associated with these factors may not be immediately recognized as pension costs in our Consolidated Statements of Income, but we generally recognize the change in future years over the remaining average service period of pension plan participants.
In accordance with accounting standards, changes in pension plan obligations associated with these factors may not be immediately recognized as pension costs in our Consolidated Statements of Income, but we generally recognize the change in future years over the remaining average service period of 58 AVISTA CORPORATION pension plan participants.
Our exposure to risks attributable to counterparties' credit profile is dynamic in normal markets and may change significantly in more volatile markets. The amount of potential default risk from each counterparty depends on the extent of forward contracts, unsettled transactions, interest rates and market prices.
Our exposure to risks attributable to counterparties' credit profile is dynamic in normal markets and may change significantly in more volatile markets. The amount of potential default risk from each counterparty depends on the duration and volume of our obligations under forward contracts, unsettled transactions, interest rates and market prices, as well as other factors.
Washington Legislation and Regulatory Actions Clean Energy Transformation Act In 2019, the Washington State Legislature passed the CETA, which effectively prohibits sales of energy produced by coal-fired generation to Washington retail customers after December 31, 2025.
Washington Legislation and Regulatory Actions Clean Energy Transformation Act In 2019, the Washington State Legislature passed the CETA, which effectively prohibits sales of energy produced by coal-fired generation to Washington retail customers after December 31, 2025 (with some exceptions for coal generated short-term purchases).
For our Washington natural gas operations, we have additional financial burdens associated with compliance which are being deferred and recovered from customers in accordance with our regulatory accounting order in Washington (see "Executive Overview" for discussion of the CCA).
For our Washington natural gas operations, we have additional financial burdens associated with compliance which are being deferred and recovered from customers in accordance with our regulatory accounting order in Washington.
Regulatory Lag Regulatory “lag” is inherent in utility ratemaking; a result of the delay between the investment in utility plant and/or the increase in costs and the receipt of an order of a public utility commission authorizing an increase in rates sufficient to recover such investment or costs.
We expect capital expenditures between $100 million to $130 million. Regulatory Lag Regulatory lag is inherent in utility ratemaking; a result of the delay between the investment in utility plant and/or the increase in costs and the receipt of an order of a public utility commission authorizing an increase in rates sufficient to recover such investment or costs.
Our hydroelectric and biomass generation facilities can be used to comply with the CETA’s clean energy standards. We intend to seek recovery of costs associated with the clean energy legislation and regulations through the regulatory process. In compliance with the CETA, we filed our first CEIP in October 2021, that was approved by the WUTC in June 2022.
We intend to seek recovery of costs associated with the clean energy legislation and regulations through the regulatory process. In compliance with the CETA, we filed our first CEIP in October 2021, that was approved by the WUTC in June 2022.
The following table summarizes our actual and expected investments and capital expenditures at our other businesses as of and for the year ended December 31, 2024 (dollars in millions): Other 2024 Actual investments and capital expenditures Investments and capital expenditures $ 10 Expected total annual investments and capital expenditures (by year) 2025 $ 9 2026 4 2027 3 These estimates of investments and capital expenditures are subject to continuing review and adjustment.
The following table summarizes our actual and expected investments at our other businesses as of and for the year ended December 31, 2025 (dollars in millions): Other 2025 Actual investments Investment expenditures $ 4 Expected future annual investments (by year) 2026 $ 7 2027 6 2028 6 These estimates of investments are subject to continuing review and adjustment.
The following table shows long-term debt and related weighted-average interest rates, by expected maturity dates as of December 31, 2024 (dollars in millions): 2025 2026 2027 2028 2029 Thereafter Total Fair Value Fixed rate long-term debt (1) $ — $ — $ — $ 25 $ 15 $ 2,594 $ 2,634 $ 2,101 Weighted-average interest rate — — — 6.37 % 5.92 % 3.64 % 4.35 % Variable rate long-term debt to affiliated trusts — — — — — $ 52 $ 52 $ 47 Weighted-average interest rate — — — — — 5.64 % 5.64 % (1) These balances include the fixed rate long-term debt of Avista Corp., AEL&P and AERC.
The following table shows long-term debt and related weighted-average interest rates, by expected maturity dates as of December 31, 2025 (dollars in millions): 2026 2027 2028 2029 2030 Thereafter Total Fair Value Fixed rate long-term debt (1) $ — $ — $ 25 $ 15 $ 20 $ 2,714 $ 2,774 $ 2,279 Weighted-average interest rate — — 6.37 % 5.92 % 5.49 % 4.40 % 4.43 % Variable rate long-term debt to affiliated trusts — — — — — $ 52 $ 52 $ 46 Weighted-average interest rate — — — — — 4.93 % 4.93 % (1) These balances include the fixed rate long-term debt of Avista Corp., AEL&P and AERC.
Of our pension cost (excluding the SERP), approximately 55 percent is expensed and 45 percent is capitalized consistent with labor charges. The cost related to the SERP is expensed. Our cost for the pension plan is determined in part by actuarial formulas that are dependent upon numerous factors resulting from actual plan experience and assumptions of future experience.
The cost related to the SERP is expensed. Our cost for the pension plan is determined in part by actuarial formulas that are dependent upon numerous factors resulting from actual plan experience and assumptions of future experience.
More detailed explanations are provided, particularly for operating revenues and operating expenses, in the business segment discussions (Avista Utilities, AEL&P and the other businesses) that follow this section. 43 AVISTA CORPORATION 2024 compared to 2023 The following graph shows the total change in net income for 2024 to 2023, as well as the various factors that caused such change (dollars in millions): Utility revenues increased at Avista Utilities primarily due to increased electric retail rates (due to the effects of general rate cases), and increased sales of fuel.
More detailed explanations are provided, particularly for operating revenues and operating expenses, in the business segment discussions (Avista Utilities, AEL&P and the other businesses) that follow this section. 48 AVISTA CORPORATION 2025 compared to 2024 The following graph shows the total change in net income for 2025 to 2024, as well as the various factors that caused such change (dollars in millions): Utility revenues increased as a result of the effects of general rate cases and customer and load growth.
During 2024, we paid $533 million for utility capital expenditures, compared to $499 million for 2023. 55 AVISTA CORPORATION Consolidated Financing Activities Net cash provided by financing activities was $0 million for 2024 compared to $85 million for 2023.
During 2025, we paid $570 million for utility capital expenditures, compared to $533 million for 2024. 60 AVISTA CORPORATION Consolidated Financing Activities Net cash provided by financing activities was $84 million for 2025 compared to $0 million for 2024.
There are no expected deliveries of energy commodity derivatives after 2027: Purchases Sales Electric Derivatives Gas Derivatives Electric Derivatives Gas Derivatives Year Physical (1) Financial (1) Physical (1) Financial (1) Physical (1) Financial (1) Physical (1) Financial (1) 2025 $ — $ — $ (23 ) $ (19 ) $ 10 $ 7 $ (3 ) $ — 2026 — — (9 ) (3 ) — — — — 2027 — — (2 ) — — — — — The following table presents energy commodity derivative fair values as a net asset or (liability) as of December 31, 2023 that were expected to settle in each respective year (dollars in millions).
As of December 31, 2025, there are no energy commodity derivative contracts outstanding with expected deliveries after 2028: Purchases Sales Electric Derivatives Gas Derivatives Electric Derivatives Gas Derivatives Year Physical (1) Financial (1) Physical (1) Financial (1) Physical (1) Financial (1) Physical (1) Financial (1) 2026 $ — $ — $ (17 ) $ (10 ) $ 8 $ 4 $ (3 ) $ — 2027 — — (3 ) (1 ) — — (4 ) — 2028 — — — — — — (3 ) — 77 AVISTA CORPORATION The following table presents energy commodity derivative fair values as a net asset or (liability) as of December 31, 2024 that were expected to settle in each respective year (dollars in millions).
In 2024, 1.8 million shares were issued under these agreements. 2025 Liquidity Expectations During 2025, we expect to issue up to $120 million of long-term debt and up to $80 million of common stock to fund planned capital expenditures.
In 2025, 2.0 million shares were issued under these agreements and plans. 2026 Liquidity Expectations During 2026, we expect to issue up to $230 million of long-term debt and up to $90 million of common stock to fund planned capital expenditures.

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