AVA

• Wildfire Response and Infrastructure Status:

  • Multiple fast-spreading wildfires near Spokane, Washington have displaced thousands of people, including many Avista employees, as of the call. Avista facilities were not responsible for igniting any of the fires.
  • 7,300 out of 429,000 total electric customers and 5,300 out of 386,000 total natural gas customers remain without service, mostly due to fire-damaged infrastructure, evacuation restrictions, and ongoing safety risks, after service was restored to customers affected only by the public safety power shutoff (PSPS).
  • Multiple transmission lines sustained damage, reducing system capacity; a key damaged transmission line was repaired and re-energized the morning of the call, lowering the risk of new outages from capacity constraints. Full damage assessments are still ongoing as emergency responders grant access to impacted areas.
  • Avista's top priority is the safety of customers, employees, contractors, and the affected community. The company is focused on coordinating with emergency responders, supporting impacted people, assessing damage, and completing safe, timely restoration of service.
  • Avista's proactive wildfire mitigation measures, including vegetation management, real-time situational awareness, and PSPS, proved effective during this event: fallen trees were found on a proactively de-energized line, demonstrating that PSPS prevented additional fire ignitions that could have worsened the situation.

• Large Data Center Development Strategy:

  • Avista paused negotiations for a proposed 500 megawatt data center project and removed it as upside from its capital plan to address customer, community, and local leader concerns, primarily around customer affordability and service reliability.
  • Avista will only move forward with large new data center customers if two conditions are met: the project delivers a clear net benefit for existing customers (including significant data center contributions to customer affordability), and current customer reliability is maintained or enhanced.
  • The company is participating in regulatory workshops hosted by Washington state regulators, updating internal processes, and exploring potential regulatory frameworks (including hybrid special contract tariffs and potential state-level policy updates) to add further assurances that existing customers will not be responsible for any data center project costs.

• Washington Rate Case Update:

  • Avista filed the first four-year rate plan in Washington state; fundamental differences of opinion on the four-year term make a full settlement very unlikely, per management. Most parties' positions are not far apart on overall numbers outside of two key issues: the proposed return on equity and a power supply cost adjustment. Management believes Avista's position on both issues is well-supported by data and past regulatory practice. The rebuttal case is scheduled for filing on August 7, hearings will be held September 17-18, and a final order from the commission is expected by mid-December.

• Non-Regulated Business Update:

  • Non-regulated operations delivered a strong quarter this period, after experiencing headwinds in the prior year that management expected would level out. A gain was recognized this quarter from an investment held via the Energy Impact Partners (EIP) fund that went public; an additional expected related gain will be recognized next quarter due to accounting lags. Post-IPO lockup restrictions prevent immediate exit, but eventual exit will generate positive cash flow that will reduce Avista's future equity needs. Volatility from public market price moves is expected for this holding.

No formal quantitative financial or operational guidance for future periods, including revisions to prior guidance, was provided in this transcript. The only forward-looking updates provided are procedural timelines for the Washington rate case: rebuttal testimony is due August 7, 2026, evidentiary hearings are scheduled for September 17-18, 2026, and a final commission order is expected by mid-December 2026.

Segment-level financial results for Avista's product/operating segments are not provided in this transcript. The call focused primarily on the recent Spokane-area wildfires and strategic updates; detailed quarterly financial performance by segment was referenced to be available in the pre-market filed earnings press release and 10-Q filing.

• Wildfire-related risks: Large active wildfires in Avista's Spokane service territory have caused significant, but still not fully quantified, damage to the company's transmission and distribution infrastructure, leading to ongoing customer outages and unestimated restoration and replacement costs. The situation remains dynamic as fires are not yet contained.
• Regulatory risk: There is significant disagreement over the proposed four-year rate plan structure in Washington's current rate case, creating uncertainty around the final outcome of the proceeding.
• Market volatility risk: Non-regulated investments via the EIP fund are exposed to public equity market volatility, which will create earnings volatility in coming quarters.
• Stakeholder opposition risk: Large-scale data center projects have generated significant community and stakeholder concerns around customer affordability and reliability, creating delays and uncertainty for future projects.

Q: What is the extent of wildfire-related transmission damage, and how will Avista approach cost recovery and insurance while the cause is under investigation? / A: Most damaged transmission lines have already been repaired, with only a small number remaining out; crews have now gained access to affected areas and are completing repairs. Full distribution damage is still being assessed, with more details expected in coming days. From a regulatory perspective, most impacted assets are long-lived, so there should not be a major impact from regulatory lag. After the damage assessment is complete, Avista will decide whether to file a cost recovery petition with the Washington UTC. / Q: Washington state legislation allows securitization of wildfire-related costs — do you expect to use this framework for current damage? / A: While securitization is authorized by prior legislation, it is intended for far larger, more impactful wildfire events than what Avista is currently experiencing. Management does not see any need for securitization at this time, given the current scale of damage. / Q: Can you update on the paused negotiations for the 500 MW data center project, and progress on addressing stakeholder concerns? / A: Avista's core requirements for any large data center project remain unchanged: the project must deliver a net benefit to existing customers, with the data center covering its own costs to protect existing customer affordability, and current customer reliability must be maintained or improved. The pause has allowed time to engage in ongoing regulatory workshops, update internal processes, and explore new tariff structures and policy changes to strengthen customer protections. / Q: How likely is a settlement in the Washington four-year rate case, given it is the first multi-year plan filed in the state? / A: Fundamental disagreements over the four-year term structure make a full settlement very unlikely. However, outside of the return on equity and power supply adjustment differences, most parties' positions are relatively close to Avista's. Management expects the proceeding will move to a commission decision after the September hearings, with an order expected in mid-December, and believes Avista has a strong case supported by data. / Q: Has the wildfire changed management's view on pursuing a four-year rate plan? / A: It is too early to draw any conclusions, and based on current information, the four-year plan still makes sense for Avista. The four-year plan includes built-in flexibility: if an extreme unforeseen event occurs during the term, Avista can refile to replace the third and fourth years of the plan if needed.