AVA Utilities · Regulated utility · Dividend income · Pacific Northwest · Thesis updated July 2, 2026

Growth story now depends on regulators

Avista earns most of its money from regulated electric and gas service, where state commissions set customer rates.
Q1 2026 looked strong, with EPS of $1.11 versus $0.98 a year earlier.
Management kept 2026 non-GAAP utility EPS guidance at $2.52 to $2.72.
The biggest growth swing factor is a paused 500 MW data center project.
The Washington rate case is now the main test, because the state Attorney General challenged the proposed rate increase.
Avista plans $615 million of utility capital spending in 2026, which can grow rate base if regulators approve recovery.

01 Running thesis

A safer utility with new pressure

Avista is still a classic regulated utility. That means its best case is not based on a hit product. It is based on steady grid spending, fair rate orders, and customer growth across the Pacific Northwest.

The bull case has become harder. Management reaffirmed 2026 non-GAAP utility EPS guidance of $2.52 to $2.72 and raised the 2026 utility capital plan to $615 million. If the Washington rate case ends with a fair allowed ROE, meaning the return regulators let Avista earn on its equity, the company can keep aiming for its 4-6% long-term EPS growth target.

The bear case is now stronger. The 500 MW data center project was the clearest near-term growth catalyst, but talks were paused after the Q1 call. At the same time, the Washington Attorney General challenged the company’s multi-year rate plan. If either issue worsens, investors may have to lower growth expectations.

May 2026▼Q1 2026 earnings were strong, with EPS of $1.11 versus $0.98 a year earlier, and management reaffirmed 2026 guidance. The view still moved down because the 500 MW data center project was paused and the Washington rate case faced a formal Attorney General challenge.

Feb 2026▼Q4 2025 EPS of $0.87 missed the $1.04 estimate. Management started 2026 non-GAAP utility EPS guidance at $2.52 to $2.72, but the miss brought earnings volatility back into focus.

Nov 2025▲Q3 2025 EPS of $0.36 beat the $0.27 estimate. That helped offset concern from earlier losses in the non-regulated investment portfolio.

Aug 2025▼The core utility was tracking well, but Other Businesses posted a $0.12 per share loss tied to clean technology investment marks. Management pointed to up to $500 million of possible incremental capital opportunities from large-load customers and RFP projects between 2026 and 2029.

May 2025▲Avista reconfirmed 2025 EPS guidance of $2.52 to $2.72. Washington wildfire securitization progress and the 2025 All-Source RFP improved the long-term setup.

Feb 2025▲Management reset 2025 guidance around a clearer base year, including a $0.12 expected ERM expense and no assumed earnings from Other Businesses. The Washington order raised allowed ROE to 9.8%, but did not change the ERM mechanics.

Nov 2024→The company lowered 2024 consolidated EPS guidance because of Other Businesses losses, but raised the three-year capital plan to about $1.7 billion through 2027. A North Plains Connector memorandum of understanding added a possible long-term transmission option.

Aug 2024→The initial view framed Avista as a regulated utility driven by capital spending, wildfire mitigation, and state rate cases. Higher peak demand and possible transmission investment were the main long-term growth themes.

02 Business model

Rates turn grid spending into earnings

Avista sells electricity and natural gas to homes, businesses, and industrial customers. The key unit is Avista Utilities, which serves customers in Washington, Idaho, and Oregon. AEL&P serves Juneau, Alaska, and is much smaller.

The company makes money by investing in power plants, wires, pipes, meters, wildfire safety, and other system assets. Those assets become rate base, which is the pool of approved investment on which Avista can earn a regulated return. State utility commissions decide how much customers pay and what return Avista can earn.

This model can be steady, but it can break when regulators push back. If a rate case allows a lower return or delays cost recovery, Avista may spend money before it can earn enough on that spending. That is why the Washington General Rate Case matters so much right now.

The non-regulated investment portfolio is small, but it has caused noise. In 2025, losses in Other Businesses hurt consolidated earnings. Q1 2026 looked calmer, with no material unrealized gains or losses from that area.

03 Product portfolio

Power, gas, and load growth bets

Cash cow

Electric utility service

Avista sells and delivers electricity to regulated customers. This is the core of the business and depends on fair state rate orders.

Steady

Natural gas distribution

The company also distributes natural gas in its service areas. Gas adds steady customer demand, but rates still depend on regulators.

Steady

Owned generation

Avista uses generation assets such as hydroelectric resources and the Kettle Falls biomass plant. It is also moving toward an exit from coal exposure at Colstrip.

Growth engine

Grid and wildfire investment

Spending on wires, pipes, grid hardening, and safety can grow rate base. Wildfire work is also a needed cost of serving dry and windy areas.

Option

2025 All-Source RFP

Avista issued its 2025 All-Source RFP in May 2025 after its resource plan showed a possible energy shortfall within four years. The process could add new owned or contracted resources.

Option

Large-load customers

Data centers and other big power users could lift demand. The key 500 MW project is paused, so this option now carries real execution risk.

Steady

AEL&P

Alaska Electric Light and Power serves Juneau, Alaska. It is much smaller than Avista Utilities, but it adds regulated electric earnings.

04 Business segments

Mostly one utility

Avista Utilities98%modest

AEL&P2%flat

Other Businesses0%declining

Fiscal 2025 operating revenue was $1.964 billion. Avista Utilities produced $1.916 billion, so the company is highly concentrated in its main regulated utility.

05 Risk factors

What could go wrong

Washington rate case squeeze

High impact · Medium odds

Avista’s first 4-year Washington rate plan is in settlement talks. The Washington Attorney General has formally challenged the proposed rate increase. A weak order could lower the allowed ROE or delay recovery of spending, which would pressure earnings.

We watchThe final Washington General Rate Case order, especially the approved ROE and the structure of the multi-year plan.

500 MW data center delay

High impact · Medium odds

The paused 500 MW data center project removes the clearest large-load growth catalyst. Avista still has a 1.1 GW queue of potential large-load customers, but a queue is not the same as signed contracts. Without a revival of this project or new customers, growth above the 4-6% target range looks less likely.

We watchA signed memorandum of understanding, revised project terms, or public updates on other large-load customers in the 1.1 GW queue.

Wildfire and weather costs

Medium impact · Medium odds

Avista serves areas where heat, dry weather, and wind can create wildfire risk. The company has invested in grid hardening, vegetation work, and Public Safety Power Shutoffs. These tools help, but they do not remove the risk of outages, lawsuits, or emergency spending.

We watchWildfire mitigation plan approvals, major outage events, and any use of disaster cost securitization in Washington.

Capital plan execution

Medium impact · Medium odds

Avista now expects $615 million of utility capital spending in 2026. Spending that money on time and getting it into rates is central to the earnings plan. Higher project costs or regulatory delays would weaken the payoff from that spending.

We watchQuarterly capital spending updates and whether new investments are included in customer rates without long lag times.

Non-regulated investment losses

Medium impact · Low odds

Other Businesses hurt 2025 earnings through unrealized investment losses, especially in clean technology holdings. That pressure eased in Q1 2026, but the portfolio can still create quarter-to-quarter swings. This matters because investors value utilities for steady earnings.

We watchAny unrealized gains or losses reported in Other Businesses and management’s comments on clean technology valuations.

06 Quick answers

In one breath

Is Avista a growth stock or an income stock?

Avista is closer to an income and regulated utility stock. Growth depends on rate base investment, fair rate cases, and possible large-load customers such as data centers.

Why does the Washington rate case matter so much?

Washington is a major part of Avista’s regulated business. The rate case decides how much of the company’s spending can be recovered from customers and what return it can earn.

What is the data center issue at Avista?

Avista had been working with a prospective data center customer with up to 500 MW of incremental load. That project is now paused, which weakens the near-term growth story.

What does rate base mean for Avista?

Rate base is the approved value of utility assets that Avista can earn a return on. When Avista invests in the grid and regulators approve recovery, rate base can grow and support earnings.