Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 3, 2026 · Beat 3 of last 7 quarters
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Avista's wildfire response highlights the critical role of grid resilience and hardening in the AI infrastructure buildout, as utilities must maintain reliable power for data centers. The company's cautious approach to large load customers, requiring net benefits for existing customers, could influence how other utilities negotiate data center interconnections. The removal of the 500 MW project from capital upside signals potential delays in data center load growth in the region.
Avista reported Q2 EPS of $0.43, beating consensus, on revenue of $413.0M, slightly below estimates. The quarter was overshadowed by multiple wildfires near Spokane that damaged transmission and distribution infrastructure, leaving ~7,300 electric and ~5,300 natural gas customers without service. Management emphasized that Avista facilities were not involved in starting the fires and that proactive measures like public safety power shutoffs were effective. The company is assessing damage and planning restoration, with a key transmission line already repaired. On the data center front, the MOU pause continues, and the 500 MW project was removed from capital upside; management is working with regulators and stakeholders on protections for existing customers.
Management's near-term focus is on assessing wildfire damage to transmission and distribution infrastructure in the Spokane area and restoring service. They noted that the transmission system is being repaired and that distribution restoration will take longer, with full assessment still pending. On the data center front, they reiterated that they will not move forward with new large load customers unless there is a clear net benefit to existing customers, and they are engaging with regulators and stakeholders on processes to ensure protections. They expect to file rebuttal testimony in the Washington GRC on August 7, with a hearing in mid-September and an order expected in mid-December; they do not anticipate a settlement. They affirmed that the 4-year rate plan remains appropriate, with an off-ramp to refile if extreme events occur. Nonregulated earnings benefited from a gain related to an EIP investment (ERock) that went public, with another gain expected next quarter but subject to reversal based on current stock price.
“Our facilities were not involved in starting any of these fires in the Spokane area.”
on Wildfire liability
“We will not move forward with a new large data center customer unless we're confident that they will make significant contributions to support affordability for existing customers.”
on Data center policy
“We think the commission is in a good spot there. Staff's perspective on power supply, again, a little bit of a discrepancy on how we get there, but it's relatively close to where the company is at.”
on Washington rate case
Can you give us a sense of the extent of the damage to the transmission system? How are you thinking about the cost recovery and insurance treatment while this cause is still under investigation?
Heather noted that some transmission lines have been repaired, but a couple remain out, with crews starting repairs. Kevin added that many assets are long-lived, so regulatory lag impact should be limited, and they may file a petition with the UTC once assessment is complete.
On the wildfires, I was going back to the cost recovery. I was just wondering, the legislation in the state allows for securitization of wildfire-related costs, correct? Just wondering, anything you could share about that would be helpful.
Kevin confirmed that securitization legislation exists but noted it would be for much more impactful events; from a monetary perspective on infrastructure, they would not be remotely close to needing it. He also addressed the data center pause, reiterating the need for net benefit to existing customers and ongoing engagement with regulators.
Do you have any sense from what you've been able to ascertain so far, how long you think it will take to normalize your infrastructure?
Heather said it's hard to tell, as they are still gaining access to affected areas. Transmission restoration should be near-term, but distribution damage is significant and restoration time is still to be determined. Kevin added that nonregulated earnings benefited from an EIP investment gain (ERock IPO) with another gain expected next quarter but subject to reversal.