Avista Corp. (AVA) delivered a third quarter that kept its 2026 plan intact but left the growth story weaker. Non-GAAP utility earnings came in at $0.38 per share, 13.6% below the $0.44 consensus, although earnings still grew 5.6% from a year earlier. Revenue of $421.0 million edged past the $418.5 million estimate by 0.6% and rose 4.5% year over year. Management reaffirmed 2026 utility EPS guidance of $2.52 to $2.72 and said it still expects to land at the midpoint. The near-term earnings path looks stable. The central tension is that the large-load, data-center opportunity that fueled optimism earlier in the year has now been paused outright.

The quality of the quarter deserves scrutiny. GAAP EPS jumped to $0.57 from $0.36, but that gain came almost entirely from the non-regulated portfolio. Equity-method investment gains tied to the EROC IPO contributed $0.19 per share, compared with a $0.01 loss a year ago. The utility itself improved by only a penny, to $0.38 from $0.37. Beneath that penny, retail rate increases added $0.14 of electric revenue, but higher purchased-power volumes and prices consumed all of it. Lower operating expenses and other items supplied the rest, while interest expense and share dilution each cost $0.02. Year to date, utility EPS stands at $1.76 versus $1.67, which supports the midpoint call. Even so, the consensus miss shows that rate relief is being absorbed by power costs, financing and dilution rather than flowing cleanly to the bottom line.

The conference call is where the setup changed most. Avista has paused all new large data-center applications for at least 12 months, and the existing 500 MW memorandum of understanding remains on hold amid local moratoria in Spokane city and county and a Washington Commission proceeding. The capital plan now includes no compute-driven growth. The erosion has been steady:

• **Q4:** a 1.7 GW queue and a deposit from a 125-500 MW prospect.
• **Q1:** the queue had shrunk to 1.1 GW.
• **Q2:** the $350 million upside case was removed.
• **Q3:** applications are now paused entirely.

Management's tone shifted accordingly, moving from talk of real momentum earlier in the year to an affordability-first, defensive framing. Long-term targets of 4% to 6% EPS growth and roughly a 9% ROE were held, not raised.

The call did preserve a credible, if more modest, growth path. Base capex rolled forward to $3.6 billion for 2027-2031, up from $3.4 billion for the prior five-year window. The draft 2027 IRP adds peaking resources, with a new all-source RFP expected to follow. Management also disclosed roughly 85 MW of prospective commercial, manufacturing and mining load. The nearest catalyst is the Washington rate case order expected in mid-December. Staff was described as constructive on power-cost forecasting, which could largely eliminate the roughly $0.09 Energy Recovery Mechanism drag in 2027. Equity issuance is also tracking lighter, at about $73 million versus up to $90 million guided, and an eventual EROC exit could reduce future equity needs.

Bears have legitimate ammunition, however. Avista plans a short-term loan of up to $100 million in the fourth quarter because regulatory deferrals are building and recovery is being delayed. The Washington case remains litigated, with disputes over a four-year versus two-year term, ROE, provisional capital and tracker mechanisms. The North Plains Connector definitive agreement has slipped to the first half of 2027. Separately, the Spokane wildfire rebuild may delay customer reconnections for years, although management said impacts to its facilities were not material.

Investor sentiment improved modestly ahead of the report, moving from slightly negative (-0.07) to slightly positive (+0.04). That is a mild shift rather than a conviction move. Price action has been less forgiving. At $38.11, the shares are down 4.0% since opening at $39.70 after the prior report and sit about 4.1% below the 200-day moving average. They have rebounded 10.6% from a 52-week low of $34.46 set on October 1 but remain 5.0% below the August high. The trend signals are mixed: price trend is negative while AVWAP is positive, consistent with a stock recovering from its lows without having reclaimed its longer-term trend.

The bottom line is that Avista remains a steady, rate-base-driven utility with intact 2026 guidance and a rising capex roll-forward. Third-quarter utility earnings missed expectations, and the headline GAAP gain came from investment marks rather than operations. With data-center upside now off the table, the investment case rests on regulatory execution, especially the December Washington order, rather than load-growth optionality.