Avista's Mixed Fortunes: Utility Growth Tempered by Investment Losses

SPOKANE, WA – February 25, 2026 – Avista Corp. presented a picture of strategic divergence today, reporting robust growth in its core utility operations for 2025 while simultaneously revealing significant losses in its non-regulated investment portfolio and navigating a complex, evolving customer landscape.

The energy company announced GAAP net income of $193 million, or $2.38 per diluted share, for 2025, a solid increase from $180 million, or $2.29 per share, in the prior year. Its non-GAAP utility earnings, which strip out the volatile non-regulated businesses, painted an even stronger picture, rising to $207 million ($2.55 per share) from $187 million ($2.38 per share) in 2024.

These results were powered by what the company described as strong operational execution, favorable regulatory outcomes, and steady customer growth. “The core of our operations – our utility – is strong,” said Heather Rosentrater, President and CEO of Avista. “Our utility earnings were up from 2024, but were negatively impacted by the late-December Washington order regarding our exit from Colstrip. Throughout the year, our team remained focused on execution of our key initiatives.”

However, the company also initiated 2026 earnings guidance that includes a notable setback and detailed losses in its venture investments, highlighting the delicate balancing act between its stable, regulated business and its higher-risk diversification efforts.

Utility Strength Fueled by Rates and Growth

The engine of Avista's financial performance remains its regulated utility division, which provides electricity and natural gas to over 800,000 customers. The increase in 2025 utility earnings was primarily driven by the positive effects of general rate cases, which allow the company to recover costs and earn a return on its infrastructure investments.

In a move to secure future financial stability, Avista filed a new four-year rate plan in Washington state in January 2026. The plan is designed to fund critical grid modernization projects, ensure compliance with the state's clean energy laws, and cover rising operational and power purchase costs. If approved, the plan would see rates for residential customers climb incrementally through 2030, with a more significant initial increase in 2027 to account for past investments and updated power supply costs not yet reflected in current rates. For an average residential electric customer, this could mean a monthly bill increase from around $124 to nearly $158 by 2030.

This forward-looking regulatory strategy is central to funding the utility's ambitious capital plans and maintaining the reliability that underpins its strong performance.

A Tale of Two Portfolios: Non-Regulated Ventures Falter

In stark contrast to the stability of its utility arm, Avista's non-regulated businesses posted a $14 million loss in 2025, doubling the $7 million loss from 2024. These losses cast a shadow on the company's diversification strategy and have prompted a strategic re-evaluation.

Approximately 75% of the 2025 losses stemmed from investments in the clean technology sector. According to the company, this area was hit hard by “shifting public policy and sentiment,” which led to a decline in the value of its holdings. The remaining 25% of the loss was attributed to the dilution of Avista's ownership stake in a biotechnology investment.

Faced with these persistent headwinds, Avista is now reportedly considering monetizing its portfolio of non-regulated investments, which held an equity value of $148 million at the end of 2025. Such a move would signal a strategic pivot back toward its core utility operations, potentially reducing earnings volatility and limiting the need for future equity issuances to fund its primary business.

The Evolving Customer Landscape

Avista's 2026 forecast revealed another challenge: the early departure of a large industrial customer. The company's initial guidance for 2026 non-GAAP utility earnings, set at a range of $2.52 to $2.72 per diluted share, already bakes in a negative impact of $0.12 per share due to this loss. The industrial client, leveraging its own transmission rights, opted to procure power independently after a decline in market prices made self-sourcing more economical.

While the departure creates a near-term revenue gap, Avista is simultaneously positioning itself to attract a new wave of large-scale energy users. The company confirmed it has received a significant deposit from a data center developer planning a massive new facility in its service area. This single project is expected to have an initial load of 125 megawatts (MW) with the potential to scale up to 500 MW by 2030. This development is part of a larger trend, with Avista managing a queue of prospective large-load customers that totals approximately 1,700 MW, signaling a dramatic potential shift in regional energy demand.

Building the Future Grid Amid Regulatory Scrutiny

To meet the needs of a modernizing economy and a changing energy mix, Avista is embarking on a massive infrastructure investment program. The utility spent $553 million on capital projects in 2025 and has budgeted another $585 million for 2026. Its long-term base capital plan through 2030 totals a staggering $3.41 billion.

These funds are earmarked for grid modernization, wildfire mitigation, and upgrades to its hydropower facilities. Recently approved projects stemming from a Request for Proposal include a 100 MW battery storage facility in Eastern Washington and a 200 MW wind power purchase agreement, demonstrating a clear commitment to integrating new technologies and renewable resources. Financing this overhaul will involve issuing approximately $230 million in long-term debt and up to $90 million in common stock in 2026.

This spending occurs against a backdrop of intense regulatory oversight, exemplified by the company’s recent exit from the Colstrip coal-fired power plant. To comply with Washington's Clean Energy Transformation Act, Avista transferred its ownership stake in the plant at the start of 2026. However, in a late-December 2025 ruling, the Washington Utilities and Transportation Commission (WUTC) denied Avista full cost recovery for recent capital investments in the plant, ordering a $5.86 million revenue decrease to be refunded to customers. The decision underscored the financial risks utilities face as they transition away from fossil fuels under legislative mandates.

This multi-faceted strategy highlights the utility's complex task of balancing immediate financial performance with the long-term, capital-intensive investments required to build a resilient and clean energy grid for the region's future.