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.

Avista Utilities

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 $69 million (or 11.4 percent), effective January 1, 2026 (Rate Year 2). The Rate Year 2 increase includes $54 million related to higher authorized power supply costs resulting from the removal of Colstrip from our generation portfolio. This base increase is offset by decreases in capital and operating costs removed from customer rates of $43 million, effective January 1, 2026, as we are no longer recovering Colstrip related costs.

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), effective January 1, 2026.

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

2026 General Rate Cases

In January 2026, we filed an MYRP with the WUTC. The MYRP requests base rate relief over four years designed to produce the additional base revenues shown below (dollars in millions):

We requested an overall rate of return beginning in 2027 of 7.5 percent, with a 48.5 common equity ratio and a 10.2 percent return on equity. We requested an increase to the overall rate of return in 2029 to 7.67 percent, with a 48.5 common equity ratio and 10.5 percent return on equity.

Key drivers of the revenue requirement in Rate Year 1 (2027) are outlined below (dollars in millions):

In the MYRP, we propose certain changes to the calculation of authorized baseline power supply costs. These changes are designed to address the changing market dynamics which have led to significant volatility in actual power supply costs. The MYRP provides updates to our baseline power supply cost for rate years one and two; as required by Washington law, baseline power supply costs for Rate Years 3 and 4 will be established in later filings and as such are not included in the additional revenue requirements for those years shown above. In addition, we are proposing changes to the timing for recovery of costs deferred under the ERM.

In addition to requesting re-approval of existing insurance, wildfire, and decoupling deferral accounts, we are proposing an additional deferral mechanism for costs associated with employee benefits.

Washington law requires utilities to file MYRPs of a minimum of two and up to four years. The law allows utilities filing a rate plan of three or four years the option to file a new rate plan for the third year and fourth year. Under this provision, we have the opportunity to address the numerous unpredictable factors that could materially affect our financial position over a longer-term rate plan. These risks include, but are not limited to, inflation, interest rate volatility, labor and benefits challenges, escalating capital costs, and other unforeseen cost drivers.

The WUTC has up to eleven months to review the general rate case filings and issue a decision. The evidentiary hearing is scheduled for September 2026.

Idaho General Rate Cases

2025 General Rate Cases

In August 2025, the IPUC approved the all-party settlement agreement designed to increase annual base electric revenues by $20 million, or 6.3 percent, effective September 2025, and $15 million, or 4.5 percent, effective September 2026. For natural gas, the agreement was designed to increase annual base natural gas revenues by $5 million, or 9.2 percent, effective September 2025, and decrease annual base natural gas revenues by $0.2 million, or 0.4 percent, effective September 2026.

The settlement was based on an ROE of 9.6 percent with a common equity ratio of 50 percent and an ROR of 7.28 percent.

2027 General Rate Cases

We expect to file electric and natural gas general rate cases with the IPUC in the first quarter of 2027.

Oregon General Rate Case

2024 General Rate Case

In May 2025, the OPUC approved the all-party settlement agreement designed to increase annual base revenues by $4 million, or 5.0 percent, effective in September 2025. The settlement was 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.

Future Oregon General Rate Cases

In July 2025, the Governor of Oregon signed House Bill 3179 into law which modifies certain provisions of law that relate to general rate case filings and cost recovery. The law, among other things, extends the length of time for the OPUC to suspend rates from a proposed effective date from nine to ten months, does not allow residential rate increases of any kind between November 1 and March 31, does not allow new rates to take effect from a proceeding where the return on equity is at issue within eighteen months of the prior rate effective date, authorizes (but does not require) securitization of “capital investments” that will cause rates to “rise by more than five percent” under specific circumstances, and calls for the OPUC to establish rules requiring utilities to establish a multi-year rate plan for rate revisions where a company’s return on equity is reviewed. Such rate plans must be no less than three years and no more than seven years in length. Rulemakings to institute these provisions started in September 2025 and will continue through 2026. We are analyzing the possible effects of this legislation, including how it will impact the timing of future rate case filings.

Purchased Gas Adjustments, Power Cost Deferrals and Decoupling Mechanisms

See our 2025 Form 10-K for discussion of the various regulatory recovery mechanisms in each of our jurisdictions.

In 2025, we received approval from the WUTC to recover $32 million of the ERM deferred surcharge balance in Washington over a two-year period starting July 1, 2025. In 2026, we received approval from the WUTC to recover an additional $65 million of the ERM deferred surcharge balance in Washington over a two-year period starting July 1, 2026.

Alaska Electric Light and Power Company

Alaska General Rate Case

In May 2026, AEL&P filed an electric general rate case with the Regulatory Commission of Alaska (RCA). AEL&P's request for an interim base rate increase of 12.5 percent (designed to increase electric revenues by $5 million), was approved and took effect in June 2026. AEL&P is seeking a permanent base rate increase of an additional 12.6 percent (designed to increase electric revenues by $5 million), which, if approved, could take effect in August 2027. This represents a combined total rate increase of 25.1 percent (designed to increase electric revenues by $10.0 million). The proposed revenue increase request is based on a 13.2 percent ROE with a common equity ratio of 58.33 percent and a ROR of 9.75 percent.

The RCA must rule on permanent rate increases within 450 days (approximately 15 months) from the date of filing.