Avista Corporation (AVA) | The Buildout — AI Infrastructure
The Verdict
Avista is a regulated electric and natural gas utility serving eastern Washington, northern Idaho, Oregon, Montana, and Juneau, Alaska. It earns returns by investing in rate base and recovering costs through regulated rates. Its AI relevance is indirect: if a large data-center developer locates in its service territory, Avista would sell regulated electric supply and grid interconnection. That optionality is real but paused; the business itself is the utility.
| Market Cap | — |
| Revenue (TTM) | $1.9B |
| Revenue Growth | −1.5% |
| EBITDA Margin (TTM) | 33.8% |
| Net Debt | $3.3B |
| Earnings Beats | 3 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- 2026 utility EPS guidance of $2.52–$2.72 has been held from February through August 2026.
- FY2025 non-GAAP utility earnings rose to $207 million from $187 million, with non-GAAP utility EPS up to $2.55 from $2.38.
- Q1 2026 Avista Utilities utility margin rose to $349 million from $347 million, with segment net income up to $87 million from $78 million.
- $3.4 billion five-year base capital plan maintained, with 2026 capex raised $30 million to $615 million.
- Approved Idaho and Oregon rate settlements provide rate relief through 2026: Idaho electric $20 million effective September 2025 and $15 million effective September 2026; Oregon $4 million effective September 2025.
What We’re Watching
- Washington GRC now expected to be litigated; hearing September 17–18, 2026, order expected mid-December.
- Spokane wildfire restoration and cost recovery remain unquantified; distribution restoration timing to be determined.
- Large-load pipeline narrowed from roughly 1.7 GW to 1.1 GW, with the 500 MW data-center project paused.
- Nonregulated EIP/ERock gain expected next quarter, with most likely to reverse, according to management.
The base regulated-utility thesis is intact but the growth overlay has weakened. Core guidance held through Q2, capex was maintained, and long-term targets were reaffirmed. What slipped was optionality: the 500 MW data-center project is paused and removed from capital-plan upside, the Washington rate case moved toward litigation, and wildfire costs are unquantified. The open question is whether the Washington UTC workshop and December rate order restore a path for the data-center project and the four-year plan.
Earnings
Avista reported Q1 2026 consolidated EPS of $1.11 versus $0.98 a year earlier, and non-GAAP utility EPS of $1.10 versus $1.01. Revenue was $570 million against $617 million in Q1 2025, with gross margin at 63.9%, on lower pass-through commodity costs and the Colstrip exit. Avista Utilities utility margin was $349 million, up $2 million from the year-ago quarter.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $570M | $533M | $617M | −7.6% |
| Gross margin | 63.9% | 26.6% | 58.5% | +540bps |
| EBITDA | $201M | $185M | $196M | +2.6% |
| EPS | $1.12 | $0.87 | $0.98 | +13.5% |
| Avista Utilities utility margin (non-GAAP) | $349M | n/a | $347M | +$2M |
Our facilities were not involved in starting any of these fires in the Spokane area.— Heather Rosentrater, CEO, August 3, 2026
Management tone: Management's tone shifted from disciplined and constructive in Q1 to more serious and guarded in Q2, opening with wildfire response rather than financial results. It was direct on operational facts but acknowledged the Washington settlement is unlikely and described the data-center pause as time to work through internal and external processes.
Management Guidance
Management affirmed 2026 non-GAAP utility EPS guidance of $2.52–$2.72 on May 5, and the Q2 press release confirms 2026 utility earnings guidance. The guide embeds a negative $0.10 ERM impact and a $0.12 EPS headwind from a large industrial customer departure. 2026 Avista Utilities capex was raised to $615 million from $585 million, and the $3.4 billion five-year capital plan was unchanged.
Trajectory
Avista's reported revenue is decelerating, with Q1 2026 revenue down year over year from $617 million to $570 million. The company attributes the move to pass-through commodity costs and the Colstrip exit; Avista Utilities utility margin rose from $347 million to $349 million. Code-computed margin trends show gross margin compressing while operating and EBITDA margins expand. Earnings quality is weak on free cash flow conversion of -74% of net income.
The Model
The model projects fiscal year 2027 revenue of $1,970 million and EBITDA of $680 million at a 34.5% margin, then fiscal 2028 revenue of $2,070 million and EBITDA of $722 million at a 34.9% margin. The near term is anchored by the $3.4 billion five-year base capital plan and approved Idaho and Oregon rate relief; the projected step-up carries no contribution from the paused data-center project. The fiscal 2028 figure assumes continued rate-base investment and customer growth.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $2.0B | $2.0B | $2.1B |
| YoY Growth | — | +0.3% | +5.1% |
| EBITDA | $643M | $680M | $722M |
| EBITDA Margin | 32.7% | 34.5% | 34.9% |
Projections are the median of 5 independent model runs. The model’s revenue sits 0.3% above analyst consensus.
Management affirmed 2026 non-GAAP utility EPS guidance of $2.52–$2.72 on May 5, and the Q2 press release confirms 2026 utility earnings guidance. The guide embeds a negative $0.10 ERM impact and a $0.12 EPS headwind from a large industrial customer departure. 2026 Avista Utilities capex was raised to $615 million from $585 million, and the $3.4 billion five-year capital plan was unchanged.
What Could Go Right — and Wrong
- Washington commission approves the four-year MYRP with an acceptable ROE and power supply adjustment.
- The paused 500 MW data-center project signs; up to $350 million integration capex returns to the plan and supports 8% rate-base growth.
- The roughly 1.1 GW large-load pipeline converts into additional projects under tariffs or special contracts that satisfy affordability and reliability tests.
- Idaho and Oregon approved settlements flow through as expected: Idaho electric $20 million effective September 2025 and $15 million effective September 2026; Oregon $4 million effective September 2025.
- Spokane wildfire costs are quantified and recovered through ordinary ratemaking, with management saying securitization is not close to being needed.
- Washington GRC produces a litigated outcome that weakens the four-year plan, lowers ROE, or omits a power supply adjustment.
- The 500 MW data-center project stays paused and the large-load pipeline continues to shrink or is captured by NWE or other regional utilities.
- Spokane wildfire damage assessment comes in above expectations, or the cause determination creates liability risk for the company.
- Cost inflation pushes capex above the raised $615 million for 2026 without timely regulatory recovery.
- The nonregulated EIP/ERock gain reverses, adding consolidated earnings volatility while up to $90 million of planned 2026 equity is issued.
Looking Ahead
The next twelve months turn on regulatory and wildfire outcomes rather than booked data-center load. The Washington UTC workshop, the GRC hearing and December order, and the wildfire damage assessment will determine cost recovery and whether the multiyear rate plan survives. The company has begun its 2027 IRP and continues vetting the roughly 1.1 GW large-load queue, but no new MOU date has been set.
- Week of Aug 10, 2026Washington UTC data-center workshop — Whether a tariff or special-contract framework lets the paused MOU resume.
- Sept 17–18, 2026Washington GRC hearing — Litigated path on four-year plan, ROE, and power supply adjustment.
- Mid-December 2026Washington GRC order — Commission decision on multiyear plan and return parameters.
- Q3 2026Nonregulated EIP/ERock results — Expected gain likely to reverse, flagged by management.
- 2028Battery storage build-transfer online — Targeted commercial operation for RFP-selected storage project.
- Late 2027Oregon multiyear plan filing — Potential filing for 2028 rates; not firmly committed.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $1.9B | $2.0B | $1.9B | +1.4% |
| Gross Margin | 59.8% | 56.2% | 56.1% | 350bps |
| EBITDA | $581M | $643M | $4.9B | +10.7% |
| EBITDA Margin | 30.0% | 32.7% | 33.8% | +276bps |
| Net Income | $180M | $193M | $206M | +7.4% |
| Free Cash Flow | $1M | −$101M | −$870M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)56.1%
- EBITDA Margin (TTM)33.8%
- Net Margin (TTM)10.7%
- ROIC4.7%
- FCF Conversion-23.6%
- SBC / Revenue0.5%
The Company
Avista is a regulated electric and natural gas utility headquartered in Spokane, Washington. It provides electric distribution and transmission and natural gas distribution through Avista Utilities in eastern Washington, northern Idaho, Oregon and Montana, and electric service through AEL&P in Juneau, Alaska. The 10-K describes the company as "primarily an electric and natural gas utility with certain other business ventures." Its earnings are driven by allowed returns on rate base, capital investment, cost management, regulatory outcomes, and customer load growth. As of August 2026 the company disclosed roughly 429,000 electric customers and 386,000 natural gas customers.
The company owns and operates generation including hydro plants such as Noxon Rapids at 562 MW and Cabinet Gorge at 273 MW, plus natural gas facilities, and it holds contracted resources via power purchase agreements. Avista exited its Colstrip coal stake effective January 1, 2026, when NorthWestern Energy acquired the 222 MW Avista portion. The company also has a nonregulated portfolio, including an EIP investment relationship and a bioscience investment management called noncore.
Business Segments
Competitive Landscape
Avista is a regulated incumbent with a territorial franchise, making it hard to replace for retail customers and for large loads that locate within its territory. For site-selectable data centers, however, it is one of several regional utilities competing for the same load. NorthWestern Energy is the most direct competitor: NWE disclosed a Quantica development agreement ramping to 1.1 GW and filed a large-load tariff in Montana. The intel file states Avista is not uniquely positioned in that market.
- NorthWestern EnergyDirect regional competitor; disclosed Quantica development agreement ramping to 1.1 GW and filed large-load tariff in Montana; directly interconnected with Avista and buyer of the 222 MW Colstrip stake.
- Named in Wiring and neighbor calls; not discussed in the supplied source material.
- Named as competitor; also listed as O&M provider for Avista's 322 MW Coyote Springs II plant.
- PacifiCorpNamed in Wiring and neighbor calls; not discussed in the supplied source material.
- Puget Sound EnergyNamed in Wiring and neighbor calls; not discussed in the supplied source material.
Supply Chain
Avista operates between contracted generators and grid technology vendors on one side and a retail customer base on the other. The most concretely verified counterparty named in the record is NorthWestern Energy; most supplier and PPA relationships are inferred from the Wiring extract.
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