AVISTA CORP

General Rate Cases

We regularly review the need for electric and natural gas rate changes in each state in which we provide service. We expect to continue to file for rate adjustments to:

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seek recovery of operating costs and capital investments, and

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seek the opportunity to earn reasonable returns as allowed by regulators.

With regard to the timing and plans for future filings, the assessment of our need for rate relief and the development of rate case plans takes into consideration short-term and long-term needs, as well as specific factors including, but not limited to, in-service dates of major capital investments and the timing of changes in major revenue and expense items.

Washington General Rate Cases

2024 General Rate Cases

In December 2024, the WUTC issued orders related to our multi-year electric and natural gas general rate cases filed with the WUTC in January 2024.

The approved rates within the orders are designed to increase annual electric base revenues by $12 million (or 2.0 percent), effective January 1, 2025 (Rate Year 1), and $44 million (or 7.5 percent) for Rate Year 2. The difference in approved rates for Rate Year 1 and those included in our original request of $77 million is primarily due to a $56 million decrease in power supply costs compared to those set forth in the original request, and also due to a lower approved return on equity than requested. The Rate Year 2 increase represents the effective increase to customers resulting from the $69 million approved in the order, partially offset by a $25 million decrease due to the expiration of a separate tariff in effect during Rate Year 1 to collect remaining Colstrip expenses by December 31, 2025 (see further discussion below).

The approved rates are also designed to increase annual natural gas base revenues by $14 million (or 11.2 percent), effective January 1, 2025, and $4 million (or 2.8 percent) for Rate Year 2.

The WUTC approved an ROE of 9.8 percent, based on a common equity ratio of 48.5 percent, and an ROR of 7.32 percent.

The WUTC did not approve our request to modify the ERM under which differences between actual net power supply costs and the amount reflected in base retail customer rates are tracked. Based on our forecast energy commodity costs in 2025 and 2026, we expect actual net power supply costs to exceed the level included in base rates. We plan to continue to address how net power supply costs are set in base rates in future regulatory proceedings.

The Commission continued its support for important recovery mechanisms such as wildfire and insurance balancing accounts, and decoupling.

Colstrip Tariff

In 2019, the Washington State Legislature passed the CETA, which, among other things, requires costs associated with coal-fired generation facilities to be removed from rates no later than December 31, 2025. The WUTC order approving the settlement of the 2022 general rate cases, required us to establish a tracker for our Colstrip-related costs, including operating and maintenance expense, depreciation and amortization expense, and a return on rate base. In October 2024, we filed a cost recovery tariff seeking to recover the costs associated with our ownership of Colstrip in 2025. In the filing, we requested an increase in annual Colstrip tariff revenues of $19 million – from $24 million in 2024 to $43 million in 2025, effective January 1, 2025. In its review, WUTC Staff raised three concerns related to (1) whether forecasted 2025 investments are allowed in rates; (2) whether the capital investment included in the filing will be used and useful for customers prior to the end of 2025; and (3) one major capital investment that will not be in service until 2027. In December 2024, the WUTC allowed our filed tariff to go into effect, but set the rates as subject to refund. The WUTC set the matter for adjudication in 2025, but also ordered us, WUTC Staff, and other interested parties to meet and resolve the issues. On March 6, 2025, the Commission held a prehearing conference for purposes of setting a procedural schedule. The issued schedule calls for a process that results in an Evidentiary Hearing on October 3, 2025, and a final order by the end of 2025.

Idaho General Rate Cases

2023 General Rate Cases

In August 2023, the IPUC approved the multi-party settlement agreement designed to increase annual base electric revenues by $22 million, or 8.0 percent, effective in September 2023, and $4 million, or 1.4 percent, effective in September 2024. The agreement was designed to increase annual base natural gas revenues by $1 million, or 2.7 percent, effective in September 2023, and a negligible increase effective in September 2024.

The settlement was based on an ROE of 9.4 percent, with a common equity ratio of 50 percent, and an ROR of 7.19 percent.

2025 General Rate Cases

In January 2025, we filed multi-year electric and natural gas general rate cases with the IPUC. If approved, new rates would be effective in September 2025 and September 2026. The proposed rates are designed to increase annual base electric revenues by $43 million, or 14.0 percent, effective in September 2025, and $18 million, or 5.0 percent, effective in September 2026. For natural gas, the proposed rates are designed to increase annual base natural gas revenues by $9 million, or 17.7 percent, effective September 2025, and $1 million, or 1.7 percent, effective September 2026. The proposed electric and natural gas revenue increase requests are based on an ROR of 7.68 percent, with a common equity ratio of 50 percent and an ROE of 10.4 percent. Ongoing capital infrastructure investment (including replacement of wood poles and natural gas distribution pipe, continued investment in the wildfire resiliency plan, and technology) and increases in operations, maintenance, and power supply costs are the main drivers of the proposed increases. The IPUC has up to nine months to review the general rate case filings and issue a decision.

Oregon General Rate Case

2024 General Rate Case

In March 2025, we reached an all-party settlement agreement, which has been submitted to the OPUC for its consideration.

If approved, the settlement agreement is designed to increase annual base revenues by $4 million, or 5.0 percent, effective in September 2025. The settlement is based on an ROE of 9.5 percent with a common equity ratio of 50 percent and an ROR of 7.22 percent.

To mitigate the overall impact of the revenue increases on customers, $5 million of tax customer credits will be accelerated and returned to customers over a three-year period.

Purchased Gas Adjustments, Power Cost Deferrals and Decoupling Mechanisms

See our 2024 Form 10-K for discussion of the various regulatory recovery mechanisms in each of our jurisdictions.

In March 2025, we filed to recover $32 million of the ERM deferred surcharge balance in Washington which, if approved by the WUTC, would be recovered over one year starting July 1, 2025.