Avista (AVA) Q2 FY26 earnings call: the analyst Q&A

Earnings call· Jun 2026 (Q2 FY26)· Utilities· Aug 3, 2026

Source: earnings call transcript

Executive summary

Avista Q2 FY26 — Wildfire Impact and Data Center Negotiations Dominate Call

This earnings call was primarily dedicated to discussing the impact of recent wildfires near Spokane and the ongoing negotiations regarding large data center projects, with financial results referred to the company's filings. Management highlighted the effectiveness of its wildfire mitigation strategies despite the tragic events. The company is actively assessing infrastructure damage and engaging with regulators and stakeholders to ensure new large loads provide net benefits to existing customers, while also navigating a challenging Washington rate case.

Highlights

Wildfire mitigation measures, including public safety power shutoffs (PSPS), demonstrated effectiveness in preventing fire starts, with several trees found fallen into proactively de-energized lines.
Non-regulated segment had a good quarter, including a gain recognized from an investment that went public, with another gain expected next quarter.

Concerns

Multiple wildfires near Spokane caused significant damage to transmission and distribution infrastructure, resulting in approximately 7,300 electric customers and 5,300 natural gas customers without service.
Uncertainty regarding the full extent of wildfire damage and the timeline for infrastructure restoration.
Data center negotiations are paused, and a 500-megawatt project was removed as upside to the capital plan, pending assurances for existing customer affordability and reliability.
Washington rate case settlement is proving difficult due to fundamental differences in views on the 4-year term and other key issues.

Risks & headwinds

Wildfire damage and restoration uncertainty Ongoing, immediate to near-term

Approximately 7,300 electric and 5,300 natural gas customers without service; significant damage to transmission and distribution infrastructure.

Mitigation:Crews are assessing damage and planning restoration; one key transmission line already repaired. Focus on safety and coordination with emergency responders.

Cost recovery for wildfire damage Near-term to long-term

Unquantified, but securitization is unlikely for this event.

Mitigation:Regulatory lag for long-lived assets should not be significant; potential to file a petition with the UTC for cost recovery.

Data center negotiation pause and policy uncertainty Ongoing

500-megawatt project removed from capital plan upside.

Mitigation:Engaging with regulators and local partners to develop policies (hybrid tariffs, special contracts, state-level policy) that ensure net benefits and protections for existing customers.

Washington rate case settlement difficulty Decision expected mid-December

Fundamental differences in views on the 4-year term and other issues.

Mitigation:Company believes it has a strong case based on data; will file rebuttal case and proceed to hearing. Option to refile years 3 and 4 if extreme events occur during a 4-year plan.

Volatility in non-regulated investment gains Next quarter and beyond

Expected gain for next quarter from EROC is subject to stock price volatility.

Mitigation:Acknowledged that the investment is publicly traded; net-net expected to be beneficial and alleviate equity needs when EIP can exit.

What to watch in Q3 FY26

Wildfire damage assessment and restoration timeline

Next quarter

Current 7,300 electric, 5,300 gas customers out; one key transmission line repaired, full extent of damage still being assessed.

Target Detailed assessment of damage, estimated restoration timelines for distribution system.

Why it matters

The extent and duration of outages and infrastructure damage will impact operational costs, capital expenditures, and customer relations.

we are still assessing the full extent of the damage as emergency responders provide access to impacted neighborhoods and fire conditions allow. We will work to provide additional information as it becomes available.

Find out whether AVA delivers this. Inve re-checks your case every morning.

Q&A highlights

What is the extent of the wildfire damage to the transmission system, and how is Avista thinking about cost recovery and insurance treatment?

Repairs have been made to one critical transmission line and a couple of others, but some lines are still out. Crews are now accessing damaged areas for repair, with transmission repairs expected to be quicker than distribution. Cost recovery for long-lived assets should not have significant regulatory lag. Securitization is unlikely for this event, as it's reserved for much more impactful events, but a petition to the UTC could be filed if needed.

“from a regulatory lag perspective, there shouldn't be a significant impact there and as we look forward and once the assessment is complete, we can make some determination of whether we file a petition with the UTC if that ends up making sense, we'll let you know.”

asked by Whitney Mutalemwa · answered by Kevin Christie

2 min read 4 chapters

Detailed narrative

Wildfire Impact and Response

Multiple wildfires near Spokane, fueled by dry and windy conditions, have caused significant damage to Avista's transmission and distribution infrastructure. Approximately 7,300 of 429,000 electric customers and 5,300 of 386,000 natural gas customers are currently without service due to damaged infrastructure, evacuation restrictions, and ongoing safety concerns. While one key transmission line has been repaired and energized, the full extent of the damage and restoration timeline for the distribution system is still being assessed. The company emphasized that its public safety power shutoffs (PSPS) were effective in preventing fire starts, noting several trees found fallen into proactively de-energized lines.

Data Center Negotiations and Policy

Avista has paused negotiations with large data center customers and removed a 500-megawatt project from its capital plan upside. The company is focused on ensuring any new large data center customer makes significant contributions to support affordability for existing customers and maintains or enhances current customers' reliability. Management is participating in workshops with Washington regulators and engaging with local partners to develop appropriate planning and coordination processes for these unprecedented scale projects. Efforts include considering updates to potential tariffs, hybrid tariffs, or special contracts at the regulatory level, and working on state-level policy to provide additional assurances for existing customers.

Washington Rate Case Update

The Washington rate case is progressing, with management noting fundamental differences in views on the proposed 4-year term, making a settlement difficult. Despite this, the company believes its case is strong, particularly given that staff positions are not significantly far from the company's, and Public Counsel's position on return levels is deemed unacceptable and inconsistent with past commission practice. The company plans to file its rebuttal case on August 7th, with a hearing scheduled for September 17-18, and an order expected around mid-December. The ability to refile and replace years 3 and 4 of a 4-year plan in case of extreme events was highlighted.

Non-Regulated Segment Performance

The non-regulated segment experienced a good quarter, including a gain recognized from an investment within its Energy Innovation Partners (EIP) fund that went public. Another gain is expected to be recognized next quarter due to reporting lag. Management noted that this particular investment (EROC) is now publicly traded, introducing volatility, and that while the expected gain for next quarter could reverse based on current stock prices, the net effect is beneficial and could help alleviate future equity needs.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.