AVISTA CORP

Regional Resource Adequacy

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. These factors are increasing the risk of potential regional energy supply shortages. Historically, we have had excess capacity as compared to peak load, but during some extreme events we have had to purchase short-term energy from the wholesale market to meet demand when our energy resources were not operating at full capacity or were otherwise unavailable. The availability of excess capacity and energy in the regional wholesale market is becoming more limited during stressed system conditions. Accordingly, we are taking these conditions into account as we optimize our current electric and natural gas resources and consider our need for new resources.

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. During the third quarter, we selected a list of projects to move to the detailed proposal stage.

After reviewing initial project proposals received in June, twenty supply resources were selected for the detailed proposal stage, including thermal, wind, solar and stand-alone and hybrid storage. Project structures include options for self-build, build transfer agreements and power purchase agreements. Selected renewable projects also include developer plans to meet tax credit eligibility. It is expected that a combination of projects will be recommended to meet our capacity and environmental goals consistent with those highlighted in our CEIP (see discussion below).

We expect to begin contract negotiations with final selected projects by the end of 2025. Resources selected in the RFP process will be subject to approval in future regulatory proceedings.

2025 Clean Energy Implementation Plan (CEIP)

In October 2025, the Company filed its 2025 CEIP with the WUTC in compliance with the Clean Energy Transformation Act. The CEIP proposes targets and specific actions to meet Washington State’s clean energy goals and the equitable distribution of benefits and reduction of burdens to all customers.

The 2025 CEIP includes analysis over system resource selection, which is only being used to develop demand response targets. Actual generation resource selection will be determined through the 2025 RFP, as discussed above.

Some highlights of the 2025 CEIP include:

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Updated clean energy targets: Avista proposes increasing the amount of clean energy delivered to Washington customers from 66 percent in 2026 to 76.5 percent by 2029.

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Modern energy management: Between 2026 and 2029, the Company plans to launch new demand response programs that could reduce electricity usage by up to 55 MW during peaks. These programs may include smart thermostats, battery storage, and other tools that help customers shift or lower their energy use when demand is highest.

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Energy efficiency programs: The Company will grow its energy-saving programs to help customers use less electricity without giving up comfort or convenience.

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Community engagement: The CEIP emphasizes meaningful engagement with all communities, especially named communities, which are populations disproportionately affected by environmental, financial and societal factors, among others.

2025 Natural Gas Integrated Resource Plan (IRP)

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.

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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.

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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.