Good day, and thank you for standing by. Welcome to the Avista Corporation Q3 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Stacey Walters, Investor Relations Manager. Please go ahead.

Good morning. It's great to have you with us for Avista's Third Quarter 2025 Earnings Conference Call. Our earnings and third quarter Form 10-Q were released premarket this morning. You can find both documents on our website. Joining me today are Avista Corp. President and CEO, Heather Rosentrater; and Senior Vice President, CFO, Treasurer and Regulatory Affairs Officer, Kevin Christie. We will be making forward-looking statements during this call. These involve assumptions, risks and uncertainties, which are subject to change. Various factors could cause actual results to differ materially from the expectations we discuss in today's call. Please refer to our Form 10-K for 2024 and our Form 10-Q for the third quarter of 2025 for a full discussion of these risk factors. Both are available on our website. I'll begin with a recap of the financial results presented in today's press release. 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, our consolidated earnings were $0.36 per diluted share compared to $0.23 per diluted share for the third quarter of 2024. Now I'll turn the call over to Heather.

Thank you, Stacey. I want to start by highlighting that our third quarter results underscore the strength of our core utility operations and our disciplined approach to cost management. Year-to-date results at Avista Utilities of $1.63 per diluted share reflects a nearly 15% increase over 2024's year-to-date results. This reflects the constructive regulatory outcomes and diligent capital deployment that continue to enhance our financial performance and advance our long-term strategy. As we pursue our strategic initiatives, including the project shortlisted in our 2025 request for proposals or RFP, we remain firmly committed to supporting reliable and affordable customer service, community investment and shareholder value. Today, we are affirming our earnings guidance with Avista Utilities expected to be at the upper end of its guidance range and consolidated results expected at the lower end of the range due to valuation losses in our other businesses during the first half of the year. The 2025 wildfire season has ended, and I'm pleased with the significant progress we've made with our wildfire resiliency program. We concluded the season without needing to initiate a public safety power shutoff, fortunately, but we were well prepared to elevate our system into risk responsive levels as conditions warranted. This success is the direct result of strategic grid and process improvements, continued collaboration with communities and first responders and the dedication of our team. This summer, we completed pilot projects for both strategic undergrounding and installation of covered conductor. We'll be building on this work going forward. With the lessons learned and forming our key decision-making about where and how to deploy these technologies as we advance towards our grid hardening goals. In addition, we began installation of weather stations throughout our service territory. These stations bring critical real-time data to our operations team and inform future system…

Thank you, Heather. I'm pleased to report a beat to market expectations with our third quarter financial results. Our third quarter results reflect significant growth from the same period in 2024. The strength of our consistent operational execution, including constructive regulatory outcomes, customer load growth and our continuing commitment to cost discipline drive our success. Alongside our other initiatives, regulatory outcomes are key to our progress. And in the third quarter, we implemented constructive, approved settlements of both our Oregon and Idaho general rate cases. We expect to file our next Washington general rate case in the first quarter of 2026. In Washington, we were required to file multiyear rate plans of at least 2 and up to 4 years. While many of the details of the case are still in development, we are evaluating whether we file a 2-year, 3-year or 4-year rate plan. With good regulatory alignment, we are confident that a longer rate plan can be beneficial for us and our customers. The law also provides us with the ability to file a new plan during a 3- or a 4-year rate plan, if necessary. We continually invest in our utility infrastructure to support customer growth and maintain our systems so that we can safely and reliably serve our customers. Capital expenditures at Avista Utilities were $363 million in the first 3 quarters of 2025. We expect capital expenditures of $525 million in 2025. From 2025 through 2030, we expect capital expenditures of $3.7 billion, resulting in an annual growth rate of 6%. In addition to this base capital, our current estimate of the potential capital opportunity for both our RFP and the addition of a potential large load customer is up to $500 million from 2026 through 2029. If these opportunities materialize, we expect the potential…

[Operator Instructions] Our first question comes from the line of Shar Pourreza with Wells Fargo.

It's actually Alex on for Shar. So just on the $80 million equity needs you have out there for '26, you have a lot of incremental CapEx opportunities you've highlighted. So I just want to get a sense on additional funding sources. Would you look at other avenues? And maybe what about a divestiture of your other business to fund the growth at the utility? Is that something you'd consider?

Yes. Thanks for the question, Alex. Yes, we're indicating that an expectation of up to $80 million for 2026 as we mentioned. And if we are fortunate enough to have additional spending opportunity or capital investment opportunity for the RFP, large customer or both, then that might change the equity needs, but not significantly so. And I would continue to expect that we would use our periodic offering program as the vehicle. It's not a significant enough increase in equity needs that we would need to do something more dramatic by making a sale of some business or something like that.

Okay. Got it. And just sort of just the messaging just around looks like the rate base outlook from 5% to 6%, you're now expecting that 6% at the utility. Can you just remind us if that includes the incremental CapEx opportunities you've highlighted or would that push you past that 6%? And can you just walk us through what that means to your 4% to 6% earnings range over the long term?

As we continue to have opportunity to add to our capital plan and if it comes in the form of the items we highlighted and/or additional transmission, that would help take us towards the top end of our growth range that we stated at 4% to 6%. I don't believe it would take us above that, but let's see what happens with large loads. And there's -- as Heather indicated, there's a lot of great conversation going on with potential developers.

[Operator Instructions] Our next question comes from the line of Julian Dumoulin-Smith with Jefferies.

It's Brian Russo on for Julian. Just on the upcoming Washington MYRP filing. You mentioned that you're evaluating the 2- or 3- or 4-year plan. Just curious, how do you manage around external risks of inflation and interest rates and even power costs while under more than the 2-year plan that you're currently in. Would you need to seek ERM modifications to kind of insulate yourself from power costs?

Well, there's a few aspects here that I want to get into with you, Brian. First, after a 2-year period. So let's say, hypothetically speaking, that we file a 4-year. And we move our way through the first couple of years or even just the first year, and we find that we're off track either because of inflation or we've had additional investment opportunities that aren't reflected in the case. Then we have the opportunity to refile, so that case then becomes a 2-year and you, in essence, start over. So we've got a wonderful set of optionality to move forward if we need to by, in essence, cutting that case back from 3 or 4 years to a 2-year case. In addition, as we think about how we would proceed, and again, these pieces are all coming together. So it's all preliminary. We would expect to have power supply resets in each subsequent year, at least that would be our objective as we go into the case. So when you ask about the ERM, that's how we would address that. Now I'll just proactively answer a question about the ERM. We have talked about how the outcome from the last case wasn't quite what we had hoped it would be in Washington. And we've gone through that workshop process that we felt we were obligated to do. We had great conversations with the parties that involve -- get involved in these workshops. And our approach going into this next case is to likely not try to modify the ERM itself. And that's because of the order that we heard from or in our last case in the commission, the words that they used and Puget is still out working on a proceeding that comes well I think, towards the middle of next year, we'll have a better idea of whether or not Puget had success modifying their ERM-like mechanism. So we're going to set the ERM aside for now, and then we're going to look to see if Puget has success and if they do, then we'll try to move forward with something similar. And what we're going to focus on is resetting power supply cost at a more appropriate level. And we think we have a path to setting power supply at that more appropriate level. And if we're able to do that, then the impact of the ERM is somewhat muted.

Okay. Great. I think are we still assuming a power cost drag in 2026 per your most recent disclosures?

Yes. We're -- I think our disclosures have covered that pretty well. I'll reinforce that without a change to the ERM and given how power supply was set in the last case that we would expect a drag from the ERM. Now hopefully, because of weather and other factors, it won't be as severe as it is in 2025. but it's too soon to be able to predict that.

Okay. Great. And just can you remind us again on the other businesses, how the mark-to-market works. I think there's a quarter lag, right? So this September quarter actually reflected June mark-to-market values. So it's possible, hypothetically, in your year-end update that could capture September clean -- mark-to-market clean energy investment values, which arguably were well off their lows following the old BBB and executive order, et cetera.

Yes, you're following it pretty well, Brian. And yes, there is a quarter lag for some of our investments, a fairly significant amount of the investments. And so this quarter reflects second quarter for those investments, and we'll see how it turns out for the rest of the year. We're, as we've mentioned before, not able to call the bottom, but we're encouraged that we saw the impacts in the first half of the year. And then this quarter, it flattened out to some extent. And the dust seems to be settling around some of the clean energy narrative that had been out there. So we're optimistic. But again, it's hard for us to be able to call whether or not that will completely turn around by the time we are talking to you next quarter.

Okay. Great. And then just lastly, on the increment -- potential incremental CapEx. How should we think about kind of the mix of debt and equity financing? Is it 50-50 or something different than that?

Well, our base capital plan that we've described and the amount of debt versus equity for base capital for this year and as now we're describing for next year is $120 million debt, $80 million equity and then if we have incremental spending opportunities after that, there's, of course, a lot of complexities that we would have to work our way through. But generally speaking, I'd expect incremental capital to be in roughly 50-50.

I'm showing no further questions at this time. I would now like to turn it back to Stacey Walters for closing remarks.

Thank you all for joining us today and for your interest in Avista. Have a great day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.