Avista Corporation Q3 FY2025 earnings call

• Core utility operations show strength with year-to-date Avista Utilities results up nearly 15%. - Wildfire resiliency program progress: no public safety power shutoffs during 2025 season, completed pilot projects for undergrounding and covered conductor, installing weather stations and expanding AI-enabled cameras. - 2025 all-source RFP: received over 80 bids, narrowed to shortlist, with diverse options including supply-side and demand response projects, focusing on taking advantage of federal tax credits. - Washington MYRP filing: evaluating 2-, 3-, or 4-year plans with optionality to refile if needed and plans to reset power supply costs. - Capital expenditures: Avista Utilities had $363 million in first 3 quarters of 2025, expected $525 million in 2025, and $3.7 billion from 2025-2030 with 6% annual growth rate, with potential $500 million incremental capital from 2026-2029.

Consolidated earnings year-to-date in 2025 were $1.51 per diluted share compared to $1.44 year-to-date in 2024. For the third quarter of 2025, consolidated earnings were $0.36 per diluted share compared to $0.23 per diluted share for the third quarter of 2024. Year-to-date results at Avista Utilities were $1.63 per diluted share, a nearly 15% increase over 2024's year-to-date results. AEL&P continues to perform well and is expected to contribute $0.09 to $0.11 per diluted share. Avista Utilities' guidance range is $2.43 to $2.61 per diluted share, and consolidated earnings guidance is $2.52 to $2.72 per diluted share for 2025, with Avista Utilities contributing toward the upper end and consolidated expected at the low end due to investment portfolio losses.

• Confirmed consolidated earnings guidance for 2025 at $2.52 to $2.72 per diluted share, with Avista Utilities expected to be at the upper end of $2.43 to $2.61 per diluted share and consolidated at the low end due to investment portfolio losses. - Expect Avista Utilities' return on equity to be 8.8% going forward. - Expected long-term earnings growth of 4% to 6% from the midpoint of 2025 guidance. - 2025-2030 capital expenditures expected at $3.7 billion with 6% annual growth. - Anticipated debt and equity issuances: $120 million long-term debt and up to $80 million common stock in 2026.

• Uncertainties in regulatory procedures across multiple jurisdictions. - Exposure to external risks like inflation, interest rates, and power costs during Washington MYRP filing. - Volatility in the investment portfolio's mark-to-market values affecting consolidated earnings.

Q: On the $80 million equity needs for '26 and additional funding sources, would divestiture of other businesses be considered?

A: Yes, but we expect to use our periodic offering program and it's not significant enough to warrant dramatic actions like divestiture.

Q: On Washington MYRP filing and managing external risks like inflation and interest rates, how?

A: If filing a longer plan, we can refile as a 2-year plan if off track, and expect power supply resets each year. We don't plan to modify the ERM immediately but will see Puget's proceeding outcome.

Q: On other businesses' mark-to-market and quarter lag?

A: There's a quarter lag for some investments, this quarter reflects second quarter values, and we're optimistic but can't predict full turnaround.

Q: On mix of debt and equity financing for incremental CapEx?

A: Generally expect incremental capital to be roughly 50-50.