AVISTA CORP

Overall Results

Net income for the three and nine months ended September 30, 2026 increased compared to the three and nine months ended September 30, 2025, primarily due to net investment gains at our other businesses. For the three months ended September 30, 2026, equity method earnings were $23 million, compared to $1 million for the three months ended September 30, 2025. For the nine months ended September 30, 2026, equity method earnings were $46 million, compared to losses of $10 million for the nine months ended September 30, 2025. See “Note 5 of the Notes to Condensed Consolidated Financial Statements” for additional information regarding the gains recorded in 2026, as well as expected loss during the remainder of 2026.

The effects of our general rate cases at Avista Utilities also increased net income in 2026.

When comparing results from the three quarters of 2026 to the same period of 2025, the transfer of our ownership of Colstrip (effective January 1, 2026) has resulted in fluctuations in multiple line items on the income statement, which ultimately net to an immaterial impact on net income. The removal of Colstrip from our generation portfolio resulted in an increase in authorized power supply cost and increases in both electric utility revenues and electric resource costs (resulting in no impact on net income). In addition, other operating costs and depreciation expense have decreased, with a corresponding decrease in electric utility revenues associated with recovery of these costs.

More detailed explanations of the fluctuations in revenues and expenses are provided in the results of operations and business segment discussions (Avista Utilities, AEL&P, and the other businesses) that follow this summary.

See the summary of key developments and issues that are the focus of management under the heading “Executive Overview” in the MD&A of our 2025 10-K. The following developments have occurred since that report:

2026 Wildfire Events

Spokane Complex Fires

On August 1, 2026, multiple fires started in the Spokane, Washington area, within our service territory, forming the Spokane Complex Fires. We are confident that our facilities were not involved in starting these fires.

Electric and natural gas operating costs associated with the fires were less than $3 million and we will not seek incremental recovery for those items. The fires caused damage to Company infrastructure, and costs associated with rebuilding this infrastructure are expected to be included in our future capital expenditure plans. Costs associated with vegetation management from the aftermath of the wildfires will flow through the wildfire expense balancing deferral and recovery mechanism.

Other 2026 Wildfire Events

A number of other wildfires have occurred within our service territory in 2026, impacting our operations. In June 2026, two fires ignited near our facilities. One fire damaged a small storage facility near Kellogg, Idaho. No structures were impacted by the other fire, near Coulee City, Washington. In the case of the fire near Kellogg, Idaho, the Idaho Department of Lands issued an investigative report asserting the fire originated with the Company’s facilities. The Company believes that it was substantially in compliance with its approved Wildfire Mitigation Plan, triggering protection under the Idaho Standard of Care Act. We believe any potential losses related to these events, individually and in the aggregate, would not be material.

Potential Large Load Growth

In May 2026, we entered into a non-binding memorandum of understanding (MOU) with a data center developer seeking interconnection and energy supply in our Washington service territory. The developer is seeking an initial load demand of 125 MW starting in 2029, with a pathway to expand to 500 MW by 2032.

In June 2026, we announced that we will take additional time to evaluate the processing of energy requests from data center developers, and have paused negotiations associated with the MOU. This decision followed community interest and concern surrounding the MOU. We are seeking to partner with governmental agencies on creating a clear and coordinated planning process as we consider additional stakeholder feedback associated with large load requests.

In September 2026, we paused the processing of large data center applications. The pause applies to projects that require significant new transmission or generation infrastructure. The pause is expected to last at least 12 months while statutory guidelines are debated and established. Within our service territory, certain local government agencies have instituted moratoriums or pauses restricting data centers. During this time, we will be a participant with others in community, local government and state-level discussions to help shape the policies and the regulatory framework that may guide future development for large data centers.