AVISTA CORP

The following provides an overview of changes in our Condensed Consolidated Statements of Income and Comprehensive Income. More detailed explanations are provided, particularly for operating revenues and operating expenses, in the business segment discussions (Avista Utilities, AEL&P, and the other businesses) that follow this section.

The balances included below for utility operations reconcile to the Condensed Consolidated Statements of Income and Comprehensive Income.

Three months ended March 31, 2026 compared to the three months ended March 31, 2025

The following graph shows the total change in net income for the first quarter of 2026 compared to the first quarter of 2025, as well as the factors that caused such change (dollars in millions):

Electric utility revenues decreased primarily as a result of decreased wholesale revenues associated with lower market prices, and a reduction of revenues associated with the recovery of Colstrip costs, which were partially offset by other increases in retail rates associated with our general rate cases. Natural gas revenues decreased due to decreased rates associated with the PGAs and the CCA (which do not impact utility margin or net income), as well as decreased wholesale revenues, transportation revenues and an increased provision for rate refunds associated with overearnings in Washington.

Electric utility resource costs decreased primarily due to decreased purchased power costs associated with decreased wholesale prices, as well as decreased fuel for generation costs partially due to the removal of Colstrip from our generation portfolio. These decreases were partially offset by a decrease in deferrals under the ERM. Natural gas utility resource costs decreased due to decreases in the amortization of costs associated with the CCA and net deferrals and amortizations of costs under PGAs, as well as a decrease in volumes of natural gas purchased.

Other operating expenses remained unchanged, with decreased expenses from Colstrip offset by expected increases in other expenses.

Utility depreciation and amortization decreased primarily due to our exit from Colstrip in 2026. In anticipation of the exit, we had accelerated depreciation, as we were required to recover costs from Washington customers by the end of 2025.

Increases in earnings from other activity are primarily due to net investment gains, compared to net investment losses in the first quarter of 2025.