Good day, and thank you for standing by. Welcome to Avista Corporation Q4 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. 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.

Thank you for joining us for Avista Corporation's fourth quarter 2025 earnings conference call. Our earnings and 2025 Form 10-Ks were released pre-market this morning. You can find both documents on our website along with the presentation that accompanies our remarks this morning. Joining me today are Avista Corporation 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 what we discuss in today's call. Please refer to our Form 10-Ks for 2025 for a full discussion of these risk factors, which is available on our website. On this call, we will also discuss non-GAAP utility earnings. Our fourth quarter earnings presentation is posted on our website and includes definitions and reconciliations for all non-GAAP disclosures, including non-GAAP utility earnings. Our non-GAAP utility earnings are comprised of results from our Avista Utilities and AEL&P segments. The unrealized gains and losses that have historically made up the majority of our nonregulated other business earnings can be significant, but they are difficult to predict and outside management's control. The shift to discussion of non-GAAP utility results and earnings guidance reflects management's focus on the core utility business. Let me begin with a recap of the financial results presented in today's press release. Our 2025 consolidated earnings were $2.38 per diluted share compared to $2.29 in 2024. Our 2025 non-GAAP utility earnings were $2.55 per diluted share compared to $2.38 per diluted share in 2024. For the fourth quarter of 2025, our consolidated earnings were $0.87 per diluted share compared to $0.84 per diluted share for the fourth quarter of 2024. Our non-GAAP utility earnings were $0.88 per diluted share for the fourth quarter of 2025 compared to $0.89 per diluted share for the fourth quarter of 2024. I will now turn the call over to Heather.

Thank you, Stacey. And as I reflect on my first year as CEO of Avista Corporation, I am struck by how it combined opportunities for growth and investment with an unprecedented level of uncertainty. Yet, just as we have for the last 136 years, our teams leaned in and sustained their focus on executing our strategies. Before I get into the details, I want to start with how we are thinking about this last quarter. While our results were impacted by a few specific items, our sustained focus led to progress on key priorities. That includes progress on our request for proposal, or RFP; continued discussions with potential large load customers; and steady regulatory activity. All of this supports the strength of our utility over the long term. We remain committed to delivering safe, reliable energy to the communities we serve and creating value for our shareholders. As we close out 2025, Avista Utilities' results were impacted by both the one-time adjustment of Colstrip-related investments, which on its own decreased our earnings per share by $0.07, and other timing-related items. Even with those headwinds, we were able to land within the original utility guidance range. And excluding those factors, utility results would have been above the midpoint of our 2025 utilities earnings guidance. With 2025 concluded, we are excited to look ahead to 2026. Last month, we filed a four-year rate plan with the Washington Utilities and Transportation Commission. This filing reflects how we are thinking about supporting safe and reliable service over the long term. Among other considerations, our proposal addresses rising costs related to grid modernization, clean energy compliance, purchased power, hydropower infrastructure investments, and emerging risks such as wildfires and extreme weather. By filing a four-year case rather than a two-year case, we aim to reduce the…

Thank you, Heather, and good morning, everyone. In each of the last four quarters, I have shared with you how strong our utility performance is and how our utility earnings form the foundation of our business and future plans. And that is still true today. We are focused on delivering results at our utility. Of course, we are disappointed by the order we received late in December from the Washington Commission requiring us to adjust recovery of needed investments at Colstrip. Were it not for the impact of that order, Avista Utilities would have reported earnings above the midpoint of our 2025 earnings guidance for the segment. I want to emphasize that our utility earnings in 2025 reflect the strength of our operational execution and the continued diligence in the cost management that we have reported in each of our 2025 earnings calls, alongside constructive regulatory outcomes, with the exception of the Colstrip order in December. We have had a quiet fourth quarter in our nonregulated business results, and it appears that valuations have steadied from earlier in 2025. Alongside our other initiatives, regulatory outcomes are key to our success. As Heather mentioned, in January, we filed a four-year rate plan with the Washington Commission. The single largest driver of our requested rate increase in rate year one is power supply cost. Setting an appropriate baseline for power supply cost is pivotal to the success of our rate plan. We believe the workshops undertaken with the parties after our last rate case provided an understanding of the shifts in our regional power markets. We will continue to work through the regulatory process beginning with the initial settlement conference set for May 22 and the evidentiary hearings in September. We continue to invest in our utility and infrastructure to support customer…

Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press *11 on your telephone, wait for your name to be announced. To withdraw your question, please press *11 again. Our first question comes from the line of Shar Pourreza of Wells Fargo Securities. Your line is now open.

Hi. Good morning. This is Whitney Wutalama on for Shar. So, just to take a step back and think about the financing, there are just multiple moving pieces in 2026, from the customer departure to the headwind variability, and obviously, the Washington rate case. How are you sequencing financing decisions? What would cause you to pull forward or push out equity issuance? How much flexibility do you have to bridge with debt or hybrids without pressuring the credit profile?

Hi, Whitney.

Hi, Whitney.

Well, for the guidance that we have expressed here for 2026, we have incorporated the base plan that we have described. So that includes the capital investment. And to the extent that we had additional capital investment opportunities, we would need to reassess how much debt and equity we would issue. We issue our equity through a periodic offering program, and so you would see steady progress throughout the year towards that $90,000,000, again barring some kind of additional investment opportunity, which would be a positive thing if we had that opportunity.

As far as using other mechanisms, again, we would likely stick with our periodic offering program unless we had a much more significant investment opportunity, and then we would have to reassess whether we would visit other mechanisms or vehicles.

Got it. Okay. Understood. And then just following up on the incremental CapEx, I think it is $250,000,000 to integrate a new large load customer. So what is the internal go-or-no-go threshold before you commit to that type of incremental build? How do you ensure existing customers are insulated if the large load does not fully materialize?

I would start by saying that the next step now that we have a significant deposit on board from that potential customer is moving towards an MOU. And we would expect to move towards that MOU in the next 90 or so days. And as we work forward there, we would likely have ongoing conversations with the customer. And again, I want to emphasize a point: to the extent that we are able to add this customer, they would make a significant contribution back to the system and our existing customers such that it would help with affordability. And we would ensure that those same customers would not be negatively impacted to the extent that the customer were to start conversations with us, maybe even go to construction, and then walk away. We would have in place, in addition to the deposit, collateral and security to protect our business and our customers. Significant amounts such that we would expect no impact if they were to walk away. Now that is not the intent. We would expect them to go forward and contribute revenue to the system on an ongoing basis for many years into the future.

Well said. Thank you.

Thank you.

Our next question comes from the line of Julien Dumoulin-Smith of Jefferies. Hi. Good morning. It is Brian Russo on for Julien.

Good morning. Hey, just to follow up on the financing plan for the potential $350,000,000 upside CapEx. Should we kind of generally model that as a 50-50 debt and equity? And would you possibly consider hybrids?

Yeah. To be clear, we would expect that spending to start maybe in earnest to the extent that we are able to proceed sometime later this year, but really in 2027–2028 and into 2029. And we would expect a 50-50 capital structure or funding approach with incremental capital beyond what we have described here. And to your question around hybrids, we would consider that option if we were able to move forward with that much additional capital beyond the base plan.

Okay. And would you also consider monetizing the other businesses, which according to the 10-K, have an equity interest value of $148,000,000 as of December 2025? I am wondering because of, you know, your shift in reporting, it just seems that there is a much bigger focus on the utility. And are any of those investments considered noncore, so to speak?

Yeah. I appreciate you noticing all of that, Brian, and that is exactly the intent here. We would look to monetize some of our nonregulated investments to the extent that there is an opportunity to do so with a material gain, and if that were to take place, that would help offset equity, meaning that we would issue less equity on a go-forward basis. That would be the likely plan.

Okay. Great. And one more question. Just to be clear, the 4% to 6% long-term EPS CAGR correlates to the 5% rate base CAGR. Therefore, this 12% hypothetical rate base CAGR would, in theory, be accretive to the 4% to 6%. Correct?

Yeah. Let me walk you through that. So the way I think about it is the 5% CAGR on our capital investment plan over the next five years, you will notice from the graphic that we were displaying that we have an increase in the middle due to the RFP. And so to call it 5%, I would say that is a bit conservative. We have a significant increase from, you know, year one through three when we execute on the investments related to the RFP in 2028. And then in the back end, we would expect to have additional investment opportunities, hopefully the large load and more, and then that would pull us up to the 12% rate base CAGR. If we had that opportunity and all those investments came to fruition, that would help pull us up to the top end of the 4% to 6% range. I do not have exact figures, and we do not know yet all the investment opportunities that we might have in subsequent quarters, whether we could get above the 6%, but we would talk to you about that in subsequent quarters.

Okay. Great. Thank you very much.

Thank you. Thank you, Brian. As a reminder, to ask a question, you will need to press *11 on your telephone and wait for your name to be announced. Our next question comes from the line of Chris Hark of Mizuho. Your line is now open.

Hi. Good morning, everybody. How are you?

Good. Good morning, Chris.

I just have a follow-up question on the CAGR there. Just given the low result in 2025, do you still expect to be in a 4% to 6% range? And then what kind of ROE are you using to get to the midpoint of 2026 guidance?

Yeah. We certainly believe that we can get to our 4% to 6% growth. 2025 was our baseline, and although we fell short there, over the next three, four, or five years, we would expect to be in that 4% to 6% range. So that is the plan, and we think we can get there. What was your second question, Chris?

And then the ROE that you are using to get to 2026 guidance.

Assumed ROE? Well, again, we have expressed here that we expect to be at, on a long-run basis, 9%, which is an increase from 8.8%, and that incorporates the ER—or does not include the ER, I should say. So in 2026, as we have described to you here, we are going to have pressure on that 9% due to the fact that we are likely to be, as we have said here, $0.10 or so negative. And then we continue to have structural lag around 60 basis points. We also lost that large customer which has an impact. So overall, we would expect to be in the low to mid 8s in 2026 from a utility ROE.

Okay. Thank you. Super helpful. And then just one last thing. Just looking for some clarity on the rate base CAGR. Have you included that upside CapEx in the CAGR at all?

The upside CapEx is not included. We are using the incremental $350,000,000 related to a potential large load for how it could help from an overall investment opportunity. And to the extent that we are able to pull forward additional items or investments from the RFP, and we have the opportunity to invest in additional transmission, that would all be incremental to that base.

Okay. Thank you. That is it for me. Have a good one, guys.

Great. Thanks, Chris.

Thank you. I am 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 Corporation. Have a great day.

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