Avista: The Data-Center Pause Is the Real Earnings Call
A utility that spent quarters pitching gigawatt-scale load growth just took it out of the capital plan — leaving a Washington rate case and 85 megawatts to carry the story.
AVA · Earnings Call · 2026-11-04
The growth story just got smaller
Avista's third quarter was, on the surface, a steady utility report: consolidated EPS of $0.57 versus $0.36, non-GAAP utility EPS of $0.38 versus $0.37, and full-year utility guidance affirmed at $2.52-$2.72. But the strategic headline is not the penny of utility EPS growth. It is the pause on new large data-center applications. After several quarters of describing a queue measured in gigawatts, Avista has formally stopped processing requests that need significant new generation or transmission, and it has removed compute-related growth from its capital plan. That is a genuine change in the equity story.
For context, in May management said the large-load queue was still about 1.1 gigawatts: “we are at about 1.1 gigawatts now in the queue” — Heather Lynn Rosentrater, Executive (likely a senior executive or officer) · 2026-05-05. In February, the company was framing a potential $350 million large-load build as incremental capex, financed roughly 50-50: “we would expect a 50-50 capital structure or funding approach with incremental capital beyond what we have described here” — Kevin Christie, CFO · 2026-02-25. On Wednesday, CFO Kevin Christie said simply: “we do not include any compute related growth in our capital plan at this time” — Kevin Christie, Executive (likely CFO or similar senior finance role) · 2026-11-04. The keyword large load has gone from a top-of-mind growth lever to paused optionality.
we announced in September that we have paused processing new large data center applications that require significant new generation or transmission investments ... We expect the pause to last at least 12 months
This is not a withdrawal. But it is a delay of at least a year, and the company says it will not move forward unless a data center covers its own costs and provides 'meaningful additional support' for existing customers. That language is now central.
Affordability is the new growth governor
The reason for the pause is political and regulatory, not demand. Heather Rosentrater tied it directly to customer affordability and protection of the existing customer. Avista is exploring state-level tariffs or policy mechanisms to give customers stronger assurances that they will not absorb data-center costs. This is a local backlash story inside a global data-center boom. Globally, data centers remain a dominant earnings-call theme; Avista's data centers keyword is still near the top of its own list, but the meaning has inverted — from upside to risk management.
The replacement growth is smaller: about 85 megawatts of prospective load across commercial, manufacturing and mining customers, which management says would raise average day load by almost 10%. That is real, but it is not 1.1 gigawatts. The next resource catalyst is the 2027 Integrated Resource Plan and a follow-on all-source RFP for peak day resource needs. Demand response could contribute up to 35 megawatts toward a 40-megawatt distributed-energy goal by 2030. The North Plains Connector, a $6 billion transmission project where Avista would own roughly 10%, remains a post-plan opportunity, with a definitive agreement now expected in the first half of 2027 rather than year-end. Transmission is the new long-duration growth option — transmission investment — but it is slower and less certain than the data-center pipeline was.
The rate case is the bridge — and the report card
Near term, everything hinges on Washington. The company's first four-year multiyear rate case is awaiting a commission decision in mid-December. Management described the hearings as constructive but acknowledged the debate over four years versus two. Kevin Christie's framing was careful: “years 3 and 4 are relatively modest” — Kevin Christie, Executive (likely CFO or similar senior finance role) · 2026-11-04. The bigger prize is power-supply recovery. Guidance includes a $0.09 ERM drag; if the commission supports the company's filed power-supply costs, Christie said “we would see largely an elimination of that $0.09” — Kevin Christie, Executive (likely CFO or similar senior finance role) · 2026-11-04. That would be a meaningful EPS bridge without any data-center load.
But the long-term math is still 4%-6% EPS growth off a 9% utility ROE, including roughly 60 basis points of structural lag. That was the message in August too, when management said it did not expect a settlement and was prepared to litigate: “I don't believe we'll see a settlement take place” — Kevin Christie, Senior Vice President, CFO, Treasurer and Regulatory Affairs Officer · 2026-08-03. The difference now is that the rate case is no longer one of several growth levers; it is the main near-term lever, alongside 85 megawatts of industrial load and transmission.
The balance sheet matters more in this smaller-growth world. Capex is $176 million in the latest quarter, up 23% year over year, and management plans $615 million at Avista Utilities in 2026 and $3.6 billion of base capex in 2027-2031. Because of increased regulatory deferrals and delayed recovery, Avista plans a short-term loan of up to $100 million in Q4, then about $220 million of long-term debt and up to $110 million of equity in 2027. Interest coverage is 3.1x — better than a year ago, but not generous for a utility carrying a larger capital program.
The beat was not the utility
The quality of the headline EPS matters. Stacey Wenz noted that non-GAAP utility earnings were “$0.38 per diluted share compared to $0.37 per diluted share in the third quarter of 2025” — Stacey Wenz, Investor Relations Manager · 2026-11-04. The consolidated number jumped because other businesses swung to $29 million of net income from a $13 million loss, helped by the ERock IPO valuation. That is the same nonregulated volatility management has been trying to de-emphasize. In August, Christie warned that much of the expected gain could reverse with the public stock price: “Most of what will be the gain that we're expecting to recognize next quarter, if you look at current stock price, would then reverse” — Kevin Christie, Senior Vice President, CFO, Treasurer and Regulatory Affairs Officer · 2026-08-03. The Q3 beat is therefore not a clean utility beat; it is a mark-to-market assist.
Operationally, the utility is flat: total revenue $413 million, roughly unchanged year over year, while operating income $54 million, down 5%. That is why the rate case and ERM reset carry so much weight. The stock has reflected the ambiguity: Avista is down about 2% over the last 90 days and sits roughly 5% below its July high, a flat tape for a utility with a freshly deferred growth story.
The conclusion is not that Avista is broken. It is that the company just traded a large, controversial growth option for a smaller, cleaner one. If the Washington order is constructive, the ERM drag shrinks and the 4%-6% growth algorithm looks more credible. If it disappoints, Avista has removed its most exciting upside and will be left defending a 9% ROE and a 60-basis-point lag. The data-center pause is the report; the rate case is the next catalyst.