10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
FOR THE FISCAL YEAR ENDED December 31, 2025 OR
FOR THE TRANSITION PERIOD FROM TO
Commission file number 001-03701
AVISTA CORPORATION
(Exact name of Registrant as specified in its charter)
1411 East Mission Avenue, Spokane, WA99202-2600
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: 509-489-0500
Web site: http://www.avistacorp.com
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock AVA NYSE
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
Preferred Stock, Cumulative, Without Par Value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer ☒ Accelerated Filer ☐
Non-accelerated Filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
The aggregate market value of the Registrant’s outstanding Common Stock, no par value (the only class of voting stock), held by non-affiliates is $3,078,099,757 based on the last reported sale price thereof on the consolidated tape on June 30, 2025.
As of January 31, 2026, 82,251,245 shares of Registrant’s Common Stock, no par value (the only class of common stock), were outstanding.
Documents Incorporated By Reference
Document Part of Form 10-K into WhichDocument is Incorporated
AVISTA CORPORATION
INDEX
ItemNo. PageNo.
Acronyms and Terms iv
Forward-Looking Statements 1
Available Information 6
Part I
1 Business 7
Company Overview 7
Avista Utilities 8
General 8
Electric Operations 9
Electric Requirements 9
Electric Resources 9
Hydroelectric Licenses 13
Future Resource Needs 13
Natural Gas Operations 16
Utility Regulation 18
Federal Laws Related to Wholesale Competition 19
Regional Transmission Planning 19
Regional Energy Markets 20
Reliability Standards 20
Vulnerability to Cyberattack 20
Avista Utilities Operating Statistics 21
Alaska Electric Light and Power Company 23
Alaska Electric Light and Power Company Operating Statistics 25
Other Businesses 26
1A. Risk Factors 27
1B. Unresolved Staff Comments 37
1C. Cybersecurity 37
Avista Utilities 39
Alaska Electric Light and Power Company 41
3 Legal Proceedings 41
4 Mine Safety Disclosures 41
Part II
6 Removed and Reserved 42
Business Segments 43
Executive Overview 43
Regulatory Matters 45
Results of Operations - Overall 48
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Non-GAAP Financial Measures 50
Results of Operations - Avista Utilities 50
Results of Operations - Alaska Electric Light and Power Company 57
Results of Operations - Other Businesses 57
Accounting Standards to Be Adopted in 2026 57
Critical Accounting Policies and Estimates 57
Liquidity and Capital Resources 59
Overall Liquidity 59
Review of Consolidated Cash Flow Statement 60
Capital Resources 61
Utility Capital Expenditures 63
Non-Regulated Investments and Capital Expenditures 64
Pension Plan 64
Credit Ratings 64
Dividends 65
Competition 65
Environmental Issues and Other Contingencies 66
Colstrip 71
Enterprise Risk Management 72
7A. Quantitative and Qualitative Disclosures about Market Risk 78
8. Financial Statements and Supplementary Data 78
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) 79
Financial Statements 81
Consolidated Statements of Income 81
Consolidated Statements of Comprehensive Income 82
Consolidated Balance Sheets 83
Consolidated Statements of Cash Flows 84
Consolidated Statements of Equity 86
Notes to Consolidated Financial Statements 87
Note 1. Summary of Significant Accounting Policies 87
Note 2. New Accounting Standards 93
Note 3. Balance Sheet Components 94
Note 4. Revenue 95
Note 5. Leases 99
Note 6. Variable Interest Entities 102
Note 7. Equity Investments 102
Note 8. Derivatives and Risk Management 103
Note 9. Jointly Owned Electric Facilities 106
Note 10. Property, Plant and Equipment 107
Note 11. Asset Retirement Obligations 107
Note 12. Pension Plans and Other Postretirement Benefit Plans 108
Note 13. Accounting for Income Taxes 113
Note 14. Energy Purchase Contracts 116
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Note 15. Short-Term Borrowings 117
Note 16. Long-Term Debt 118
Note 17. Long-Term Debt to Affiliated Trusts 119
Note 20. Accumulated Other Comprehensive Loss 124
Note 21. Earnings per Common Share 125
Note 22. Commitments and Contingencies 125
Note 23. Regulatory Matters 129
Note 24. Information by Business Segments 133
9A. Controls and Procedures 135
9B. Other Information 137
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 137
Part III
10. Directors, Executive Officers and Corporate Governance 138
11. Executive Compensation 139
14. Principal Accounting Fees and Services 140
Part IV
15. Exhibits, Financial Statement Schedules 141
Exhibit Index 142
* = not an applicable item in the 2025 calendar year for Avista Corp.
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ACRONYMS AND TERMS
(The following acronyms and terms are found in multiple locations within the document)
Acronym/Term Meaning
ASC - Accounting Standards Codification
Avista Corp. - Avista Corporation, the Company
BPA - Bonneville Power Administration
CCA - Climate Commitment Act, Washington
CEIP - Clean Energy Implementation Plan, Washington
CETA - Clean Energy Transformation Act, Washington
CPP - Climate Protection Program, Oregon
Colstrip - The coal-fired Colstrip Generating Plant in southeastern Montana
CT - Combustion turbine
Ecology - The Washington State Department of Ecology
EIM - Energy Imbalance Market
EPA - Environmental Protection Agency
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FERC - Federal Energy Regulatory Commission
FPA - Federal Power Act
GAAP - Generally Accepted Accounting Principles
GHG - Greenhouse gas
GS - Generating station
IPUC - Idaho Public Utilities Commission
IRP - Integrated Resource Plan
kV - Kilovolt (1000 volts): a measure of capacity on transmission lines
MPSC - Public Service Commission of the State of Montana
MW, MWh - Megawatt: 1000 KW. Megawatt-hour: 1000 KWh
MYRP - Multi-year rate plan
NERC - North American Electricity Reliability Corporation
NorthWestern - NorthWestern Corporation
OPUC - The Public Utility Commission of Oregon
PGA - Purchased Gas Adjustment
PPA - Power Purchase Agreement
PUD - Public Utility District
RCA - The Regulatory Commission of Alaska
REC - Renewable energy credit
ROE - Return on equity
ROR - Rate of return on rate base
ROU - Right-of-use lease asset
SEC - U.S. Securities and Exchange Commission
Talen - Talen Montana, LLC, an indirect subsidiary of Talen Energy Corporation.
WUTC - Washington Utilities and Transportation Commission
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Forward-Looking Statements
From time to time, we make forward-looking statements such as statements regarding projected or future:
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financial performance;
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cash flows;
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capital expenditures;
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dividends;
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capital structure;
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other financial items;
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strategic goals and objectives;
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business environment; and
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plans for operations.
These statements are based upon underlying assumptions (many of which are based, in turn, upon further assumptions). Such statements are made both in our reports filed under the Securities Exchange Act of 1934, as amended (including this Annual Report on Form 10-K), and elsewhere. Forward-looking statements are all statements except those of historical fact including, without limitation, those identified by the use of words that include “will,” “may,” “could,” “should,” “intends,” “plans,” “aspires,” “assumes,” “targets,” “seeks,” “anticipates,” “estimates,” “expects,” “forecasts,” “projects,” “predicts,” and similar expressions.
Forward-looking statements (including those made in this Annual Report on Form 10-K) are subject to a variety of risks, uncertainties and other factors. Most of these factors are beyond our control. Any of these factors may have a significant effect on our operations, results of operations, financial condition or cash flows, and could cause actual results to differ materially from those anticipated in our statements. Such risks, uncertainties and other factors include, among others:
Utility Regulatory Risk
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state and federal regulatory decisions or related judicial decisions that affect our ability to recover costs and earn a reasonable return, including, but not limited to, disallowance or delay in the recovery of capital investments, operating costs, commodity costs, the ordering of refunds to customers and discretion over allowed return on investment;
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the loss of regulatory accounting treatment, which could require the write-off of regulatory assets and the loss of regulatory deferral and recovery mechanisms;
Operational Risk
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weather conditions, which affect both energy demand and electric generating capability, including the impact of precipitation and temperature on hydroelectric resources, the impact of wind patterns on wind-generated power, weather-sensitive customer demand, and similar impacts on supply and demand in the wholesale energy markets;
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wildfires ignited, or allegedly ignited, by our equipment or facilities could cause significant loss of life and property or result in liability for resulting fire suppression costs and/or damages, thereby causing serious operational, reputational and financial harm;
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severe weather or natural disasters, including, but not limited to, avalanches, wind storms, wildfires, earthquakes, floods, extreme temperature events, snow and ice storms that could disrupt energy generation, transmission and distribution, as well as the availability and costs of fuel, materials, equipment, supplies and support services;
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political unrest and/or conflicts between foreign nation-states, which could disrupt the global, national and local economy, result in increases in operating and capital costs, impact energy commodity prices or our ability to access energy resources, create disruption in supply chains, disrupt, weaken or create volatility in capital markets, and
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increase cyber and physical security risks. In addition, any of these factors could negatively impact our liquidity and limit our access to capital, among other implications;
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explosions, fires, accidents, mechanical breakdowns or other incidents that could impair assets and may disrupt operations of our generation facilities, transmission, and electric and natural gas distribution systems or other operations and may require us to purchase replacement power or incur costs to repair our facilities;
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interruptions in the delivery of natural gas by our suppliers, including physical problems with pipelines themselves, can disrupt our service of natural gas to our customers and/or impair our ability to operate gas-fired electric generating facilities;
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explosions, fires, accidents or other incidents arising from or allegedly arising from our operations that could cause injuries to the public or property damage;
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dam failure at a company-owned hydroelectric facility;
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blackouts or disruptions of interconnected transmission systems (the regional power grid);
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terrorist attacks, cyberattacks or other malicious acts that could disrupt or cause damage to our utility assets or to the national or regional economy in general, including effects of terrorism, cyberattacks, ransomware, or vandalism that damage or disrupt information technology systems;
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pandemics, which could disrupt our business, as well as the global, national and local economy, resulting in a decline in customer demand, deterioration in the creditworthiness of our customers, increases in operating and capital costs, workforce shortages, losses or disruptions in our workforce due to vaccine mandates, delays in capital projects, disruption in supply chains, and disruption, weakness and volatility in capital markets. In addition, any of these factors could negatively impact our liquidity and limit our access to capital, among other implications;
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work-force issues, including changes in collective bargaining unit agreements, strikes, work stoppages, the loss of key executives, availability of workers in a variety of skill areas, and our ability to recruit and retain employees;
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changes in the availability and price of purchased power, fuel and natural gas, as well as transmission capacity;
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increasing costs of insurance, more restrictive coverage terms and our ability to obtain insurance;
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delays or changes in construction costs, and/or our ability to obtain required permits and materials for present or prospective facilities;
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increasing health care costs and cost of health insurance provided to our employees and retirees;
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increasing operating costs, including effects of inflationary pressures;
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third party construction of buildings, billboard signs, towers or other structures within our rights of way, or placement of fuel containers within close proximity to our transformers or other equipment, including overbuilding atop natural gas distribution lines;
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the loss of key suppliers for materials or services or other disruptions to the supply chain;
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adverse impacts to our Alaska electric utility (AEL&P) that could result from an extended outage of its hydroelectric generating resources or their inability to deliver energy, due to their lack of interconnectivity to other electrical grids and the availability or cost of replacement power (diesel);
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changing river or reservoir regulation or operations at hydroelectric facilities not owned by us, which could impact our hydroelectric facilities downstream;
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Climate Change Risk
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increasing frequency and intensity of severe weather or natural disasters resulting from climate change that could disrupt energy generation, transmission and distribution, as well as the availability and costs of fuel, materials, equipment, supplies and support services;
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change in the use, availability or abundancy of water resources and/or rights needed for operation of our hydroelectric facilities, including impacts resulting from climate change;
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changes in the long-term climate and weather could materially affect, among other things, customer demand, the volume and timing of streamflows required for hydroelectric generation, costs of generation, transmission and distribution. Increased or new risks may arise from severe weather or natural disasters, including wildfires as well as their increased occurrence and intensity related to changes in climate;
Cybersecurity Risk
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cyberattacks on the operating systems used in the operation of our electric generation, transmission and distribution facilities and our natural gas distribution facilities, and cyberattacks on such systems of other energy companies with which we are interconnected, which could damage or destroy facilities or systems or disrupt operations for extended periods of time and result in the incurrence of liabilities and costs;
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cyberattacks on the administrative systems used in the administration of our business, including customer billing and customer service, accounting, communications, compliance and other administrative functions, and cyberattacks on such systems of our vendors and other companies with which we do business, resulting in the disruption of business operations, the release of private information and the incurrence of liabilities and costs;
Technology Risk
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changes in technologies, possibly making some of the current technology we utilize obsolete or introducing new cybersecurity risks and other new risks inherent in the use, by either us or our counterparties, of new technologies in the developmental stage including, without limitation, generative artificial intelligence;
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changes in the use, perception, or regulation of generative artificial intelligence technologies, which could limit our ability to utilize such technology, create risk of enhanced regulatory scrutiny, generate uncertainty around intellectual property ownership, licensing or use, or which could otherwise result in risk of damage to our business, reputation or financial results;
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changes in costs that impede our ability to implement new information technology systems or to operate and maintain current production technology;
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insufficient technology skills, which could lead to the inability to develop, modify or maintain our information systems;
Strategic Risk
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growth or decline of our customer base due to new uses for our services or decline in existing services, including, but not limited to, the effect of the trend toward distributed generation at customer sites;
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the potential effects of negative publicity regarding our business practices, whether true or not, which could hurt our reputation and result in litigation or a decline in our common stock price;
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changes in our strategic business plans, which could be affected by any or all of the foregoing, including the entry into new businesses and/or the exit from existing businesses and the extent of our business development efforts where potential future business is uncertain;
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wholesale and retail competition including alternative energy sources, growth in customer-owned power resource technologies that displace utility-supplied energy or may be sold back to the utility, and alternative energy suppliers and delivery arrangements;
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non-regulated activities may increase earnings volatility and result in investment losses;
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the risk of municipalization or other forms of service territory reduction;
External Mandates Risk
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changes in environmental laws, regulations, decisions and policies, including, but not limited to, regulatory responses to concerns regarding climate change, efforts to restore anadromous fish in areas currently blocked by dams, more stringent requirements related to air quality, water quality and waste management, present and potential environmental remediation costs and our compliance with these matters;
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the potential effects of initiatives, legislation or administrative rulemaking at the federal, state or local levels, including possible effects on our generating resources, prohibitions or restrictions on new or existing services, or restrictions on greenhouse gas emissions to mitigate concerns over climate changes, including future limitations on the usage and distribution of natural gas;
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restrictions or changes in government grant programs and/or availability of other public funding used for capital projects;
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political pressures or regulatory practices that could constrain or place additional cost burdens on our distribution systems through accelerated adoption of distributed generation or electric-powered transportation or on our energy supply sources, such as campaigns to halt fossil fuel-fired power generation and opposition to other thermal generation, wind turbines or hydroelectric facilities;
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failure to identify changes in legislation, taxation and regulatory issues that could be detrimental or beneficial to our overall business;
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policy and/or legislative changes in various regulated areas, including, but not limited to, environmental regulation, healthcare regulations and import/export regulations;
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increasing costs due to potential tariffs applied to energy commodities and/or equipment and materials;
Financial Risk
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our ability to obtain financing through the issuance of debt and/or equity securities and access to our funds held with financial institutions, which could be affected by various factors including our credit ratings, interest rates, other capital market conditions and global economic conditions;
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changes in interest rates that affect borrowing costs, variable interest rate borrowing and the extent to which we recover interest costs through retail rates collected from customers;
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volatility in energy commodity markets that affects our ability to effectively hedge energy commodity risks, including cash flow impacts and requirements for collateral;
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volatility in the carbon emissions allowances market that could result in increased compliance costs;
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changes in actuarial assumptions, interest rates and the actual return on plan assets for our pension and other postretirement benefit plans, which could affect future funding obligations, pension and other postretirement benefit expense and the related liabilities;
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the outcome of legal proceedings and other contingencies;
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economic conditions in our service areas, including the economy's effects on customer demand for utility services;
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AVISTA CORPORATION
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economic conditions nationally may affect the valuation of our unregulated portfolio companies;
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declining electricity demand related to customer energy efficiency, conservation measures and/or increased distributed generation and declining natural gas demand related to customer energy efficiency, conservation measures and/or increased electrification;
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industry and geographic concentrations which could increase our exposure to credit risks due to counterparties, suppliers and customers being similarly affected by changing conditions;
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deterioration in the creditworthiness of our customers;
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activist shareholders may result in additional costs and resources required in response to activist actions;
Energy Commodity Risk
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volatility and illiquidity in wholesale energy markets, including exchanges, the availability of willing buyers and sellers, changes in wholesale energy prices that could affect operating income, cash requirements to purchase electricity and natural gas, value received for wholesale sales, collateral required of us by individual counterparties and/or exchanges in wholesale energy transactions and credit risk from such transactions, and the market value of derivative assets and liabilities;
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default or nonperformance on the part of parties from whom we purchase and/or sell capacity or energy;
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potential environmental regulations or lawsuits affecting our ability to utilize or resulting in the obsolescence of our power supply resources;
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explosions, fires, accidents, pipeline ruptures or other incidents that could limit energy supply to our facilities or our surrounding territory, which could result in a shortage of commodities in the market that could increase the cost of replacement commodities from other sources;
Compliance Risk
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changes in laws, regulations, decisions and policies at the federal, state or local levels, which could materially impact both our electric and gas operations and costs of operations;
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the ability to comply with the terms of the licenses and permits for our hydroelectric or thermal generating facilities at cost-effective levels;
Resource Adequacy Risk
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the ability to source and deliver adequate energy to meet customer demand in periods of high demand or unplanned events; and
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the potential effects of regional wholesale market strains, including during extreme weather events.
Our expectations, beliefs and projections are expressed in good faith. We believe they are reasonable based on, without limitation, an examination of historical operating trends, our records and other information available from third parties. However, there can be no assurance that our expectations, beliefs or projections will be achieved. Furthermore, any forward-looking statement speaks only as of the date on which such statement is made. We undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances that occur after the date on which such statement is made or to reflect the occurrence of unanticipated events. New risks, uncertainties and other factors emerge from time to time, and it is not possible to predict all such factors, nor can we assess the effect of each such factor on our business or the extent that any such factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement.
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Available Information
We file annual, quarterly and current reports and proxy statements with the SEC. The SEC maintains a website that contains these documents at www.sec.gov. We make annual, quarterly and current reports and proxy statements available on our website, https://investor.avistacorp.com, as soon as practicable after electronically filing these documents with the SEC. Except for SEC filings or portions thereof specifically referred to in this report, information contained on these websites is not part of this report.
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AVISTA CORPORATION
PART I
ITEM 1. BUSINESS
COMPANY OVERVIEW
Avista Corp., incorporated in the territory of Washington in 1889, is primarily an electric and natural gas utility with certain other business ventures. Our corporate headquarters is in Spokane, Washington, the second-largest city in Washington. Spokane serves as the business, transportation, medical, industrial and cultural hub of the Inland Northwest region (eastern Washington and northern Idaho). Regional services include government and higher education, medical services, retail trade and finance. Through our subsidiary AEL&P, we also provide electric utility services in Juneau, Alaska.
As of December 31, 2025, we have two reportable business segments as follows:
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Avista Utilities – an operating division of Avista Corp., comprising the regulated utility operations in Washington, Idaho, Oregon and Montana. Avista Utilities provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho. Avista Utilities also provides natural gas distribution service in parts of northeastern and southwestern Oregon. Avista Utilities has electric generating facilities in Washington, Idaho, Oregon and Montana. Avista Utilities also supplies electricity to a small number of customers in Montana. Avista Utilities also engages in wholesale purchases and sales of electricity and natural gas as an integral part of energy resource management and its load-serving obligation.
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AEL&P – a regulated utility providing electric services in Juneau, Alaska that is a wholly-owned subsidiary and the primary operating subsidiary of AERC.
We have other businesses, including venture fund investments, real estate investments, as well as certain other investments made by Avista Capital, which is a direct, wholly-owned subsidiary of Avista Corp. These activities do not represent a reportable business segment and are conducted by various direct and indirect subsidiaries of Avista Corp.
Total Avista Corp. shareholders’ equity was $2.7 billion as of December 31, 2025, which includes a $126 million investment in Avista Capital and a $129 million investment in AERC.
See “Note 24 of the Notes to Consolidated Financial Statements” for information with respect to the operating performance of each business segment (and other subsidiaries).
Human Capital
On December 31, 2025, Avista Utilities employed 1,929 individuals with bargaining unit employees comprising 36 percent of our overall workforce.
Our approach to people is a critical strategy to inspire engaged and thriving employees by empowering a high-performing organization where employees are valued, respected and have opportunities to grow. Among other things, this strategy supports hiring talented people and equipping them with capabilities, tools and a culture that empowers them to pursue great ideas. Such ideas engage the imagination, stretch us all as we continue to provide exemplary and cost-effective service to our customers. Focus areas for this strategy strive to:
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improve employee engagement, belonging, equity, attraction and retention while building a sense of community and purpose,
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support safety and well-being through innovative programs, best practices, tools, and technology, and
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expand innovation disciplines, capabilities, and mindsets with cross-departmental interactions and external networks to build the utility of the future.
The following is an overview of some of our key human capital initiatives intended to inspire engaged and thriving employees and other stakeholders, such as our customers and business partners.
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Employee Attraction, Development and Retention
We strive to hire and retain talented people who are innovative and skilled so we can continue to provide safe, reliable and affordable service to our customers and advance the Company at the same time. We are focused on innovative recruiting and educational outreach to organizations and schools to create greater awareness of the variety of career opportunities available in our industry and in the Company. We continue to think creatively about how we connect with our communities regarding employment opportunities, with a goal of attracting talented individuals who can help advance the Company's objectives.
All of our collective bargaining agreements are with local chapters of the International Brotherhood of Electrical Workers (IBEW). In 2025, the Company successfully negotiated a 4-year agreement for our largest collective bargaining agreement. In 2026, we have one agreement expiring and currently under negotiation for a successor contract, along with negotiations for a newly-organized bargaining unit. The partnership with IBEW is key to a holistic approach to employee attraction, engagement, and retention.
Continuous learning plays a large part in fostering collaboration and innovation among our employees and is pervasive throughout the Company. Development opportunities are created to prepare our employees at all levels to continue building their skills, knowledge and experience to perform today and in the future. Keeping our workforce equipped to succeed is imperative to meet the emerging challenges that lie ahead. We develop training that is relevant, necessary and in demand for our organization. Training is delivered through instructor-led courses, self-service topics, computer-based learning modules, and field-based, hands-on workshop models covering the range of our operations. Training programs include craft apprenticeship programs, engineering development programs, leadership development, communication skills, cross-functional learning and other topics. We also provide opportunities for our employees to attend industry events and certification programs, courses or programs offered through energy-related organizations such as the Western Energy Institute, the American Gas Association and the Edison Electric Institute, as well as through our local colleges and universities.
Competitive pay and benefits, or total rewards, are a key component of our strategy to attract and retain talented employees. The Company is committed to equitable and market-competitive compensation and has well-established practices to create competitive offers, reward performance, and support employee retention. The Company regularly monitors the benefits market and manages benefit costs through a comprehensive program that supports our employees’ physical, mental, and financial well-being.
In 2025, we conducted our biennial employee experience survey. The purpose of this survey is to provide employees at all levels of the organization with an opportunity to confidentially share their perspectives about their experiences working at Avista Corp., our workplace culture, and topics such as autonomy, enablement, growth opportunities, connection, leadership, safety, engagement and belonging, etc. The Company conducted many listening sessions to learn more about our employee needs and gain a better understanding of what actions might be taken to improve the employee experience.
Workplace Safety
Safety and well-being are an essential part of our Company’s mission and a key strategy to support our employees through innovative programs, best practices, tools and technology. A variety of programs and initiatives are in place to help employees complete their work safely through heightened vigilance, hazard recognition, defensive strategies, lessons learned, human and organizational performance and other tools intended to strengthen resilience in varying and unpredictable conditions. We work with our employees to reinforce personal responsibility regarding safety and health, and to implement measures to create and maintain a safe work environment.
AVISTA UTILITIES
General
At the end of 2025, Avista Utilities supplied retail electric service to approximately 429,000 customers and retail natural gas service to approximately 386,000 customers across its service territory. Avista Utilities' service territory covers 34,000 square miles with a population of 1.5 million.
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Electric Operations
General
Avista Utilities generates, transmits and distributes electricity, serving electric customers in eastern Washington and northern Idaho and a small number of customers in Montana.
Avista Utilities generates electricity from facilities that we own and purchases capacity, energy and fuel for generation under long-term and short-term contracts to meet customer load obligations. We also sell electric capacity and energy, as well as surplus fuel in the wholesale market in connection with our resource optimization activities as described below.
As part of Avista Utilities' resource procurement and management operations in the electric business, we engage in an ongoing process of resource optimization, which involves the selection from available energy resources to serve our load obligations and the use of these resources to capture economic value through wholesale market transactions. These include sales and purchases of electric capacity and energy, fuel for electric generation, and derivative contracts related to capacity, energy, fuel and fuel transportation. Such transactions are part of the process of matching available resources with load obligations and hedging a portion of the related financial risks. To implement this process, we make continuing projections of:
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electric loads at various points in time (ranging from intra-hour to multiple years) based on, among other things, estimates of customer usage and weather, historical data, contract terms, and emerging trends and climate modeling results,
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resource availability at these points in time based on, among other things, fuel choices and fuel markets, estimates of snowpack and streamflows, availability of generating units, historic and forward market information, contract terms and our experience, and
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carbon allowance costs and other emission fees associated with emission reduction legislation and policy.
Based on these projections, we make purchases and sales of electric capacity and energy, fuel for electric generation, and related derivative contracts to match expected resources to expected electric load requirements and reduce our exposure to electricity (or fuel) market price changes. The process of resource optimization involves scheduling and dispatching available resources as well as the following:
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purchasing fuel for generation,
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when economical, selling fuel and substituting wholesale electric purchases, and
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other wholesale transactions to capture the value of generating resources, transmission contract rights and fuel delivery (transport) capacity contracts.
This optimization process includes entering into hedging transactions to manage risks. Transactions include both physical energy contracts and related derivative instruments, and the terms range from intra-hour up to multiple years.
Avista Utilities' generation assets are interconnected through the regional transmission system and are operated on a coordinated basis to enhance load-serving capability and reliability. We acquire both long-term and short-term transmission capacity to facilitate our energy and capacity transactions. We provide transmission and ancillary services in eastern Washington, northern Idaho and western Montana.
Peak Electric Requirements
Avista Utilities' peak electric native load requirement for 2025 was 1,837 MW, which occurred on September 2, 2025. In 2024, our peak electric native load was 1,869 MW, which occurred during the winter, and in 2023, it was 1,809 MW, which occurred during the summer.
Electric Resources
Avista Utilities has a diverse electric resource mix of Company-owned and contracted hydroelectric, thermal, wind and solar generation facilities, and other contracts for power purchases and exchanges. As of December 31, 2025, Avista Utilities' electric
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generation resource mix (including contracts for power purchases) was approximately 48 percent hydroelectric, 37 percent thermal and 15 percent other renewables. On January 1, 2026, the Company transferred its ownership in Colstrip to NorthWestern, resulting in a generation resource mix (including contracts for power purchases) of approximately 53 percent hydroelectric, 32 percent thermal and 15 percent other renewables. See “Item 2. Properties” for detailed information on Company-owned generating facilities and a detailed list of our PPAs.
Hydroelectric Resources
Avista Utilities owns and operates Noxon Rapids and Cabinet Gorge on the Clark Fork River and six smaller hydroelectric projects on the Spokane River. Hydroelectric generation is typically our lowest cost source per MWh of electric energy and the availability of hydroelectric generation has a significant effect on total power supply costs. Under normal streamflow and operating conditions, we estimate that we would be able to meet approximately one-half of our total average electric requirements (both retail and long-term wholesale) with the combination of our hydroelectric generation and long-term hydroelectric purchase contracts (including those with certain PUDs in the state of Washington and Columbia Basin Hydropower). Normal and actual annual hydroelectric generation increased in 2025 as a result of increased output received from additional capacity under one of our PPA contracts. Our estimate of normal annual hydroelectric generation for 2026 (including resources purchased under long-term hydroelectric contracts with certain PUDs) is 648.3 aMW (or 5.68 million MWhs).
See “Item 2. Properties - Avista Utilities” for the present generating capabilities of the above hydroelectric resources.
The following graph shows Avista Utilities' hydroelectric generation (in thousands of MWhs) during the year ended December 31:
(1)
Normal hydroelectric generation is determined by reference to the effect of upstream dam regulation on median natural water flow. Natural water flow is the flow of the rivers without the influence of dams, whereas regulated water flow reflects water flow changes from upstream dams due to releasing or holding back water. The calculation of
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normal varies annually due to the timing of upstream dam regulation throughout the year, as well as changes in PUD contracts.
Thermal Resources
Avista Utilities owns the following thermal generating resources:
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the combined cycle natural gas-fired CT, known as Coyote Springs 2, located near Boardman, Oregon,
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a wood waste-fired boiler generating facility known as the Kettle Falls GS in northeastern Washington,
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a two-unit natural gas-fired CT generating facility in northeastern Spokane (Northeast CT),
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a two-unit natural gas-fired CT generating facility in northern Idaho (Rathdrum CT), and
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two small natural gas-fired generating facilities (Boulder Park GS and Kettle Falls CT).
Coyote Springs 2, which is operated by Portland General Electric Company, is supplied with natural gas under a combination of term contracts and spot market purchases, including transportation agreements with bilateral renewal rights.
The primary fuel for the Kettle Falls GS is wood waste generated as a by-product and delivered by trucks from forest industry operations within 100 miles of the plant. A combination of long-term contracts and spot purchases has provided, and is expected to meet, fuel requirements for the Kettle Falls GS.
The Northeast CT, Rathdrum CT, Boulder Park GS and Kettle Falls CT generating units are primarily used to meet peaking electric requirements. We also operate these facilities when marginal costs are below prevailing wholesale electric prices. These generating facilities have access to natural gas supplies that are adequate to meet their respective operating needs.
We previously held a 15 percent interest in Units 3 and 4 of Colstrip, a coal-fired generating facility located in southeastern Montana. We transferred our ownership interest to NorthWestern on January 1, 2026. See “Item 7. Management's Discussion and Analysis – Colstrip” and “Note 22 of the Notes to Consolidated Financial Statements” for discussion regarding environmental and other issues surrounding Colstrip.
In addition to the resources we own listed above, we have a PPA for the output from the Lancaster Plant through December 31, 2041. The Lancaster Plant is a 270 MW natural gas-fired combined cycle combustion turbine plant located in northern Idaho, owned by an unrelated third-party. Under the terms of the PPA, we make the dispatch decisions, provide all natural gas fuel and receive all electric energy output. Therefore, we consider the Lancaster Plant to be a baseload resource. See “Note 5 of the Notes to Consolidated Financial Statements” for further discussion of this PPA.
See "Natural Gas Operations - Natural Gas Supply" for information regarding our supply of natural gas for both fuel and delivery to natural gas customers.
See “Item 2. Properties - Avista Utilities” for the present generating capabilities of the above thermal resources.
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The following graph shows Avista Utilities' thermal generation (in thousands of MWhs) during the year ended December 31:
Wind Resources
We have exclusive rights to the capacity of Palouse Wind, a wind generation project developed, owned and managed by an unrelated third-party and located in Whitman County, Washington. Under the PPA, we purchase the power and renewable attributes produced by the project at a fixed price per MWh with a fixed escalation of the price over the term of the agreement. We have an annual option to purchase the wind project, which we have not exercised. The purchase price is a fixed price per KW of in-service capacity with a fixed decline in the price per KW over the remaining term of the PPA.
We have exclusive rights to the capacity of Rattlesnake Flat Wind project developed, owned and managed by an unrelated third party and located in Adams County, Washington. We purchase the power and renewable attributes produced by the project at a fixed price per MWh with a fixed escalation of the price over the term of the agreement.
See “Item 2. Properties” for a detailed list of our PPAs.
Solar Resources
We have exclusive rights to the capacity of the Lind Solar Farm, a solar generation project developed, owned and managed by an unrelated third-party and located in Lind, Washington. Under a PPA, we purchase the power and renewable attributes produced by the project at a fixed price per MWh.
See “Item 2. Properties” for a detailed list of our PPAs.
Other Purchases, Exchanges and Sales
In addition to the resources described above, we purchase and sell power under various long-term contracts, and we enter into short-term purchases and sales. Further, pursuant to The Public Utility Regulatory Policies Act of 1978, as amended, we are required to purchase generation from qualifying facilities. This includes, among other resources, hydroelectric projects, cogeneration projects and wind generation projects at rates approved by the WUTC and the IPUC.
See “Avista Utilities Electric Operating Statistics – Electric Operations” below for annual quantities of purchased power, wholesale power sales and power from exchanges in 2025, 2024 and 2023. See “Electric Operations” above for additional
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information on the use of wholesale purchases and sales as part of our resource optimization process and see “Future Resource Needs” below for the magnitude of these power purchase and sales contracts in future periods.
Regional Capacity Issues
The northwest region is experiencing increased load growth, more frequent extreme weather events, and a transition to more variable energy resources. Both the region’s electric and natural gas delivery systems are also reaching full utilization during peak load conditions. Purchases of capacity and energy at any time are dependent upon the availability of excess capacity in the west region at that time. Many coal-fired electric generating stations throughout the western United States are scheduled for retirement in the next several years. Depending upon a variety of factors, these retirements could have an impact upon the availability and price of purchased power in, and the dynamics of, the market in which we conduct our wholesale purchases and sales. After December 31, 2025, we are prohibited by the Clean Energy Transformation Act (CETA) from using energy produced by coal-fired plants to serve our retail customers in Washington (with some exceptions for coal generated short-term purchases), and we transferred our interest in Colstrip to NorthWestern on January 1, 2026. To the extent necessary, we will obtain energy produced by other regional resources. See “Item 7. Management's Discussion and Analysis – Environmental Matters and Contingencies – Climate Change – Washington Legislation and Regulatory Actions – Clean Energy Transformation Act” and “Colstrip.”
In addition to the retirement of coal-fired generating stations, some hydroelectric and other generation plants in the region are being considered for possible closure due to environmental and other concerns. The reduction of regional generating capacity will have to be offset by the addition of new generating resources and energy storage facilities.
Hydroelectric Licenses
Avista Corp. is a licensee under the FPA as administered by the FERC, which includes regulation of hydroelectric generation resources. Excluding the Little Falls Hydroelectric Generating Project (Little Falls), our other seven hydroelectric plants are regulated by the FERC through two project licenses.
Cabinet Gorge and Noxon Rapids are under one 45-year FERC license expiring in 2046. This license embodies a settlement agreement relating to project operations and resource protection and mitigation efforts over the license term.
Five of our six hydroelectric projects on the Spokane River (Long Lake, Nine Mile, Upper Falls, Monroe Street and Post Falls) are under one 50-year FERC license expiring in 2059 and are referred to collectively as the Spokane River Project. The license includes numerous natural and cultural resource protection measures that are subject to ongoing regulatory interpretation. The sixth, Little Falls, is operated under separate Congressional authority and is not licensed by the FERC. It is the subject of a 50-year agreement with the Spokane Tribe, expiring in 2044.
The FERC grants hydroelectric licenses, and relicenses, only after a multi-year process involving public hearings and input from multiple federal, state and local government agencies, tribes, non-governmental organizations, private landowners and other stakeholders. The FERC must find that the proposed project will be best adapted to a comprehensive plan for the waterway, taking into account the needs of power development, fish and wildlife, irrigation, flood control, water supply, recreation and other competing uses, and licenses (and relicenses) must be conditioned on appropriate protection, mitigation and enhancement measures.
Generally, upon the expiration of a license, (1) the FERC could grant a new licenses upon terms determined at that time, (2) the United States could take over the project, or the FERC could issue a new license to a new licensee, upon payment to the licensee of the lesser of the licensee's "net investment" in, or the "fair value" of, the project, plus severance damages, or (3) under the FERC's interpretation of the FPA, the FERC could order the decommissioning of the project. There is no assurance that any existing license will be renewed upon its expiration or, if renewed, that the renewal would be without significant modifications.
Future Electric Resource Needs
Avista Utilities has operational strategies to provide sufficient resources to meet our energy requirements under a range of operating conditions. These operational strategies consider the amount of energy needed, which varies because of the factors
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that influence demand over intra-hour, hourly, daily, monthly and annual durations. Our average hourly load was 1,149 aMW in 2025, 1,117 aMW in 2024 and 1,115 aMW in 2023.
The following graph shows our forecasted average annual energy requirements (in aMWs) and our available resources (in MWs) for 2026 through 2029:
(1)
Forecast system load does not include the addition of large load customers, which could increase system load and require additional resources, as contemplated in our 2025 Electric IRP.
(2)
Estimated available energy production from Company-owned Boulder Park GS, Kettle Falls CT, Northeast CT and Rathdrum CT resources.
(3)
Other contracts for power purchases include power purchase agreements for solar and wind energy.
(4)
The forecast assumes near normal hydroelectric generation.
(5)
Includes the Lancaster Plant PPA. Excludes Boulder Park GS, Kettle Falls CT, Northeast CT and Rathdrum CT, as these are considered peaking facilities and are generally not used to meet our base load requirements.
We are required to file an Integrated Resource Plan (IRP) or Washington Progress Report with the WUTC and IPUC every two years. The WUTC and IPUC review the IRP and give the public the opportunity to comment. The WUTC and IPUC do not approve or disapprove of the content in the IRP; rather, they acknowledge that the IRP was prepared in accordance with applicable standards if that is the case. The IRP details projected growth in demand for energy and the new resources needed to serve customers over the next 20 years. We regard the IRP as a tool for resource evaluation, rather than an acquisition plan for a particular project.
In December 2024, we filed our 2025 Electric IRP with the WUTC and the IPUC.
Highlights of the 2025 Electric IRP include the following expectations and/or assumptions:
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Due to customer growth and loss of capacity resources, the Company will need to acquire additional electricity generation to serve peak loads. Our preferred resource strategy calls for the addition of approximately 490 MW of generating capacity by 2030 and a total of approximately 950 MW to be added through 2035.
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Customer energy demand is expected to grow an average of 0.9 percent per year over the next 20 years and an average of winter peak demand by 1.12 percent per year over the next 20 years.
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The 66 MW Northeast CT will be retired in 2030.
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Energy efficiency reduces future demand growth by 32 percent over 20 years.
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Demand response programs reduce peak demand by up to 4 percent.
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Identifies the proposed North Plains Connector transmission line as a preferred resource alternative along with other transmission upgrades in the Inland Northwest.
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We are projected to exceed CETA's requirements to be greenhouse gas neutral with Washington's electric supply by 2030.
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Meeting CETA's 2045 targets will require significant energy transformation including maintaining our existing hydroelectric system and acquiring new energy resources which could include using hydrogen-based fuels, wind, solar and nuclear, and will include long-term energy storage.
2025 Request for Proposal (RFP)
In May 2025, we issued an RFP requesting bids for up to 425 MW of capacity resources to meet modeled load growth needs and anticipated new large loads. See further information on the RFP within “Item 7. Management's Discussion and Analysis – Executive Overview”.
Additional generating resources required will either be owned by us or be owned by other parties who will sell us the capacity and energy under PPAs. The decision as to ownership will be made as to each project at the appropriate time and will depend on, among other things, the type of project and the related economics, including tax and ratemaking treatment.
We are subject to the Washington State Energy Independence Act, which requires us to obtain a portion of our electricity from qualifying renewable resources or through purchase of RECs and acquiring all cost effective energy efficiency measures. Future generation resource decisions will be affected by legislation for restrictions on greenhouse gas emissions and renewable energy requirements.
See “Item 7. Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for information related to existing and proposed laws and regulations that impact our resource availability.
Electric Clean Energy Goals
We have an aspirational goal to serve our customers with 100 percent clean electricity by 2045. To help achieve this goal and add to our clean electricity portfolio, we have implemented renewable energy projects, including entering into various PPAs for solar, wind and hydroelectric resources. These resources are in addition to our existing clean hydroelectric generation, biomass generation, and additional wind and solar projects.
To achieve our clean energy goals, we expect energy storage and other technologies, which are either not currently available or are not cost-effective under the lowest reasonable cost regulatory standard, will advance to allow us to meet our goals while maintaining reliability and affordability for our customers. If the required technology is not available or not affordable in the future, we may not meet our goals in the desired timeframe. Meeting our clean energy goals may also require accommodation from regulatory agencies. See the discussion under “Electric Resources” for more information on our existing clean electricity sources and efforts to achieve these goals. See “Item 7. Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion on clean energy, including applicable regulations.
Wildfire Resiliency Plan
We have a wildfire resiliency plan focused on four primary areas: transmission and distribution system hardening, enhanced vegetation management, situational awareness, and operations and response.
Grid hardening involves investing in electric infrastructure to reduce spark-ignition outage events and to protect critical assets from the impact of wildfires at the distribution level, including replacing wood crossarms with fiberglass, replacing small wire, adding protective devices, undergrounding, and more. We also invest at the transmission level, replacing wood poles with steel or wrapping them with a fire-resistant protective cover in high fire risk areas. We are also developing an enhanced grid hardening program which may involve undergrounding high fire risk sections of the distribution system.
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Enhanced vegetation management involves risk tree inspection in non-urban areas, the addition of digital data collection, fuel reduction partnerships, and safe tree programs. We also had a third-party study the effectiveness of this program and the preferred inspection cycle.
Situational awareness is designed to help us identify and respond to risk, including the fire risk maps, a fire weather dashboard, and installation of wildfire identification cameras and localized weather stations.
Operations and response measures are focused on automating our system to allow remote control and operation of key equipment including fire safety mode automation devices as well as fire safety mode and Public Safety Power Shutoff operations during critical fire weather, as well as expedited response agreements and other partnerships and relationships with external agencies such as first responders.
In 2025, we spent $36 million in capital and $15 million in operating expenses on wildfire resiliency efforts. In 2026, we expect to spend approximately $45 million in capital and $20 million in operating expenses related to the program. The IPUC and WUTC approved deferral and recovery of certain operating expenses of the wildfire resiliency plan, and we will continue to seek recovery of costs in future rate filings.
Wildfire Mitigation Legislation
In April 2025, Idaho enacted the Wildfire Standard of Care Act, which became effective in July 2025. This act requires public utilities in Idaho to prepare and submit to the IPUC for approval a wildfire mitigation plan on an annual basis. Once approved, the plan establishes the utility’s duty to stakeholders to mitigate wildfire risk. In September 2025, the IPUC issued an order establishing a filing schedule. We filed our initial wildfire mitigation plan in December 2025. The plan focuses on grid hardening, vegetation management, situational awareness and operations and emergency response. The IPUC has up to six months to review and approve.
Also in April 2025, Washington enacted House Bill 1522, which became effective in July 2025. This bill requires electric utilities to file a wildfire mitigation plan with the WUTC, which must be approved or rejected within 60 days of submission. We, along with other stakeholders, are currently participating in the rulemaking process related to this legislation.
See “Note 22 of the Notes to Consolidated Financial Statements” for further discussion on wildfire activity and related litigation proceedings.
Natural Gas Operations
General
Avista Utilities provides natural gas distribution services to retail customers in parts of eastern Washington, northern Idaho, and northeastern and southwestern Oregon.
Market prices for natural gas, like other commodities, can be volatile. Our natural gas procurement strategy is to provide a reliable supply to our customers with some level of price certainty. We procure natural gas from various supply basins and over varying time periods. The resulting portfolio is a diversified mix of forward fixed price purchases, index and spot market purchases, and utilizing physical and financial derivative instruments. We also use natural gas storage to support high demand periods and the procurement of natural gas when prices may be lower. Securing prices throughout the year and even into subsequent years provides a level of price certainty and can mitigate price volatility to customers between years.
Weather is a key component of our natural gas customer load. This load is highly variable and daily natural gas loads can differ significantly from the monthly forecasted load projections. We make continuing projections of our natural gas loads and assess available natural gas resources. Based on these projections, we plan and execute a series of transactions to hedge a portion of our customers' projected natural gas requirements through forward market transactions and derivative instruments. These transactions may extend for multiple years. We also leave a portion of our natural gas supply requirements unhedged for purchase in the short-term spot markets.
As part of the process of balancing natural gas retail load requirements with resources, we engage in the wholesale purchase and sale of natural gas. We plan for sufficient natural gas delivery capacity to serve our retail customers for a theoretical peak
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day event. We generally have more pipeline and storage capacity than is needed during periods other than on a peak day. We optimize our natural gas resources by using market opportunities to generate economic value that helps mitigate fixed costs. Wholesale sales are delivered through wholesale market facilities outside of our natural gas distribution system. Natural gas resource optimization activities include, but are not limited to:
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wholesale market sales of surplus natural gas supplies,
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purchases and sales of natural gas to optimize use of pipeline and storage capacity, and
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participation in the transportation capacity release market.
We also provide distribution transportation service to qualified, large commercial and industrial natural gas customers who purchase natural gas through third-party marketers. For these customers, we receive their purchased natural gas from such third-party marketers into our distribution system and deliver it to the customers’ premises. These customers generally pay the same rates as other customers in the same class, without charge for the cost of the natural gas delivered.
Optimization transactions that we engage in throughout the year are included in our annual purchased gas cost adjustment filings with the various commissions and are subject to review for prudence during this process.
Natural Gas Clean Energy Goals
We have an aspirational goal for our natural gas operations to be carbon neutral by 2045. Examples of carbon emissions reduction strategies include the following:
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diversify or transition from conventional fossil fuel natural gas to renewable natural gas, hydrogen, and other renewable biofuels,
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reduce natural gas consumption via conservation, energy efficiency and new technologies, and
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purchase carbon offsets as necessary.
See “Item 7. Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion on clean energy, including applicable regulations.
We have several contracts for renewable natural gas to purchase an expected output of approximately 8.6 million therms annually from various projects.
Natural Gas Supply
We purchase natural gas, for both fuel for generation and delivery to natural gas customers, in wholesale markets and are connected to multiple supply basins in the western United States and Canada through firm capacity transportation rights on six different pipeline networks. Access to this diverse portfolio of natural gas resources allows for natural gas procurement decisions that benefit our natural gas customers. These interstate pipeline transportation rights provide the capacity to serve approximately 25 percent of peak natural gas customer demands from domestic sources and 75 percent from Canadian sources. Natural gas prices in the Pacific Northwest are affected by global energy markets, as well as supply and demand factors in other regions of the United States and Canada. Future prices and delivery constraints may cause our resource mix to vary.
Natural Gas Storage
Avista Utilities owns a one-third interest in Jackson Prairie, an underground aquifer natural gas storage field located near Chehalis, Washington. Jackson Prairie has a total peak day deliverability of 12 million therms, with a total working natural gas capacity of 256 million therms. Our share is one-third of the peak day deliverability and total working capacity. We also contract for additional storage capacity and delivery at Jackson Prairie from Northwest Pipeline for a portion of their one-third share of the storage project.
We optimize our natural gas storage capacity throughout the year by executing transactions that capture favorable market price spreads. Natural gas buyers identify opportunities to purchase lower cost natural gas in the immediate term to inject into
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storage, and then sell the gas in a forward market to be withdrawn later. The reverse of this type of transaction also occurs. These transactions lock in incremental value for customers. Jackson Prairie is also used as a variable peaking resource, and to protect from extreme daily price volatility during cold weather or other events affecting the market.
Future Gas Resource Needs
In March 2025, we filed our 2025 Natural Gas IRP with the WUTC, the IPUC and the OPUC. The IRP outlines a preferred resource portfolio which is designed to meet the forecast for system energy demand and comply with emissions legislation over the next 20 years. We regard the IRP as a tool for resource evaluation, rather than an acquisition plan for a particular project.
Highlights of the 2025 Natural Gas IRP include the following expectations and/or assumptions:
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Customer usage estimates are increasingly difficult to forecast due to the variety of rules and codes passed by Oregon, Washington, and federal administrations. The Washington building codes are assumed to remain in effect. See “Item 7. Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion of Washington building codes, including impacts to our business.
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The IRP focuses on greenhouse gas emissions compliance program constraints of the CCA in Washington and the CPP in Oregon.
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The Oregon preferred resource strategy assumes the utilization of renewable natural gas resources and energy efficiency investments, as well as emissions reductions after 2029 and carbon capture starting in 2035 as the primary tools to meet customer energy needs and comply with the CPP program requirements.
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The Washington preferred resource strategy assumes the utilization of conventional natural gas and energy efficiency, along with allowance offsets that are provided by the state or purchased by the Company and emissions reductions to meet the requirements under the CCA.
The state of Idaho currently does not have any greenhouse gas emissions reduction policies, and as such the preferred resource strategy continues to utilize natural gas from existing access to supply basins, and our existing storage.
See “Item 7. Management’s Discussion and Analysis of Financial Condition – Environmental Issues and Contingencies” for further discussion of environmental laws, including impacts to our business.
We are required to file a natural gas IRP every two years and we anticipate our next IRP to be filed in 2027.
Utility Regulation
General
As a public utility, Avista Corp. is subject to regulation by state utility commissions for retail electric and natural gas rates, accounting, the issuance of securities and other matters. The retail electric and natural gas operations are subject to the jurisdiction of the WUTC, IPUC, OPUC and MPSC. Approval of the issuance of securities is not required from the MPSC. We are subject to the jurisdiction of the FERC for licensing of hydroelectric generation resources, and for electric transmission services and wholesale sales.
Since Avista Corp. is a “holding company” (in addition to being itself an operating utility), we are subject to the jurisdiction of the FERC under the Public Utility Holding Company Act of 2005, which imposes certain reporting and record-keeping requirements on Avista Corp. and its subsidiaries. We and our subsidiaries are required to make books and records available to the FERC and the state utility commissions. In addition, upon the request of any jurisdictional state utility commission, the FERC would have the authority to review assignment of costs of non-power goods and administrative services among us and our subsidiaries. The FERC has the authority generally to require that rates subject to its jurisdiction be just and reasonable and, in this context, would continue to be able to, among other things, review transactions of an affiliated company.
Our rates for retail electric and natural gas services (other than specially negotiated retail rates for industrial or large commercial customers, which are subject to regulatory review and approval) are generally determined on a “cost of service”
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