AVISTA CORP 8-K

What Happened

• Avista Corporation (AVA) filed an 8‑K on January 16, 2026 announcing it submitted a multi-year rate plan (MYRP) to the Washington Utilities and Transportation Commission (WUTC). The MYRP requests base rate relief over four years to produce additional base revenues in 2027–2030 for its Washington electric and natural gas operations.
• The company seeks additional base revenues (dollars in millions): Year 1 (2027) Electric $111 (13.9%), Gas $12 (4.7%); Year 2 (2028) Electric $43 (4.7%), Gas $7 (2.4%); Year 3 (2029) Electric $34 (3.5%), Gas $6 (2.1%); Year 4 (2030) Electric $28 (2.8%), Gas $3 (1.1%). Avista requests an overall rate of return of 7.50% in 2027 (48.5% common equity ratio; 10.2% ROE) and seeks an increase to a 7.67% overall rate of return in 2029 (48.5% common equity ratio; 10.5% ROE).

Key Details

• Primary drivers of the 2027 electric revenue request ($111M): electric resource costs $46M, capital additions $29M, employee benefits $7M, insurance $7M, regulatory amortizations $5M, wildfire costs $4M, other $13M.
• 2027 natural gas drivers ($12M): capital additions $5M, regulatory amortizations $4M, employee benefits $1M, other $2M.
• Avista proposes changes to how baseline power supply cost is calculated (to address market volatility) and changes to timing for recovery under the Energy Recovery Mechanism; baseline power supply cost updates included for years 1–2 only (years 3–4 to be set in later filings).
• The company seeks re‑approval of existing deferral accounts (insurance, wildfire, decoupling) and proposes a new deferral mechanism for employee benefit costs. The WUTC has up to 11 months to review and issue a decision.

Why It Matters

• If approved, the MYRP would increase Avista’s regulated base revenues beginning in 2027, with the largest impact in the first year (electric +$111M). That can affect the company’s future revenue, cash flow and regulatory earnings stability.
• The request includes specific return and capital structure assumptions (overall ROR and ROE) that determine authorized earnings — these are material inputs for investor models. The filing also seeks mechanism and accounting changes (power supply baseline, deferrals) that could affect timing and volatility of recovered costs.
• There is regulatory risk and timing uncertainty: the WUTC review can take up to 11 months and outcomes (amounts approved, timing, and allowed returns) can differ from the company’s request.