Good day, and thank you for standing by. Welcome to the Avista Corporation Q2 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stacey Walters, Investor Relations Manager. Please go ahead.

Good morning. It's great to have you with us for Avista's Second Quarter 2025 Earnings Conference Call. Our earnings and second quarter 2025 Form 10-Q were released premarket this morning. You can find both on our website. Joining me today are Avista Corp. President and CEO, Heather Rosentrater; and Senior Vice President, CFO, Treasurer and Regulatory Affairs Officer, Kevin Christie. We will be making forward-looking statements during this call. These involve assumptions, risks and uncertainties, which are subject to change. Various factors could cause actual results to differ materially from the expectations we discuss in today's call. Please refer to our Form 10-K for 2024 and our Form 10-Q for the second quarter of 2025 for a full discussion of these risk factors. Both are available on our website. I'll begin with a recap of the financial results presented in today's press release. Our consolidated earnings for the first half of 2025 were $1.15 per diluted share compared to $1.20 for the first half of 2024. For the second quarter of 2025, our consolidated earnings were $0.17 per diluted share compared to $0.29 for the second quarter of 2024. Now I'll turn the call over to Heather.

Thanks, Stacey, and hello, everyone. The results we're sharing today reflect continued strategic progress at Avista Utilities, as well as headwinds from shifts in market sentiment related to clean technology. I'm happy to share that even with these headwinds, we are affirming our consolidated earnings guidance for 2025. At Avista Utilities, our year-to-date results of $1.25 per diluted share reflect a nearly 7% increase over 2024's year-to-date results, and highlight the continued strength of our strategic execution. We also continue to make progress in activities that set us up for success going forward. In the second quarter, our all-party, all-issue settlement in Oregon was approved by the commission, and we reached an all-party, all-issue settlement in Idaho. Both cases build on the constructive regulatory outcomes already in place through our Washington multiyear rate plan, and serve to raise our confidence in our expectations for Avista Utilities in 2025. However, market conditions in the clean energy sector weighed on our consolidated earnings performance in the second quarter. Valuations within our portfolio of investments, primarily those in clean technology-focused funds, were significantly impacted by shifts in public policy and sentiment. These valuations are disappointing, and Kevin will share more about our investments in a few minutes. I want to take time to highlight the strong fundamentals of our business. Our core utility operations continue to be strong, and our solid results at Avista Utilities reflects strong performance, underpinned by diligent cost management and constructive regulatory outcomes. I want to commend the efforts of each of our employees working hard each day to position us for this strategic success. We will continue to focus on doing what we do best, serving our customers and communities with compassion and optimism for the future, providing the reliable energy our customers count on us to provide.…

Thanks, Heather, and good morning, everyone. Like Heather said, Avista Utilities' performance continues to be strong and reflects our ongoing success with constructive regulatory outcomes as well as continuous cost management. As expected, Avista Utilities' earnings in the second quarter of 2025 are slightly below the same period from 2024. This is primarily due to the changes in the shape of authorized levels of resource costs year-over-year as well as how our operating costs are incurred on a more consistent basis throughout the year, while revenue is typically highest in the first and fourth quarters. Consolidated earnings were materially impacted by valuation losses of $0.12 per diluted share in the second quarter. These are disappointing results, and I want to discuss them directly. The majority of these changes in valuation were connected to our investments in clean technology-focused venture funds. Shifts in public policy and sentiment with regard to the role of clean energy in America's energy future have had a material impact on the value of these funds. As clarity is restored to public policy, we anticipate that the volatility in valuation will moderate. The value recorded in our financials represent our portion of the fund's value on a 1-quarter lag basis due to the timing of when we receive financial information from these investments. Uncertainties surrounding the impact of tariffs as well as the extent to which the highly anticipated tax reconciliation bill would prioritize investment in natural gas or fossil fuel generation over clean energy both negatively impacted values in the first quarter. In general, Clean Technology Funds and Indices reached their lowest valuation point in years right around the close of the first quarter of this year. The variety of the businesses within the Clean Technology Funds suggest that these valuations may have reached a relative…

[Operator Instructions] Our first question will come from Julien Dumoulin-Smith of Jefferies.

This is Brian Russo on for Julien. Just the 3,000 megawatts of large load that you're in discussions with, is there any way to kind of characterize that? Is it all data centers? Or could it be high-tech manufacturing or other type reshoring? And then how does that kind of tie into maybe the high end of that 100 to 400 megawatts in the RFP?

Yes. Thanks, Brian. I appreciate the question. And the 3,000 megawatts in the pipeline is a wide variety of different types of load. And so there's not necessarily one specific one that's significant out of that. And then like I mentioned, it's really nice to have the responses of the RFP because we can better inform those conversations with potential customers because, as you can imagine, the supply cost is a big portion of their consideration. And so now that we have -- over the next month or 2, we'll have much better information around the potential type of generation, cost of generation and time line of generation to be able to inform those conversations. And so we're looking forward to be able to advance those with that additional information.

Right. Okay. So I guess, are you comfortable with the high end of the RFP of 400 megawatts? Or could you conceptually need even more on any kind of normal type win rate on this large customer load?

Right. Fortunately, with the 80 bids that we received and the broad range of type of generation that we feel like with the bids we've received, we have plenty of opportunity to support any of -- support those conversations.

Okay. Great. And then just on the other businesses, I'm just curious, and I appreciate the commentary before despite noncash volatility it creates in earnings. I'm just wondering like longer term, I think you've already lowered kind of the annual business investment allocation I think to $5 million or somewhat more a year ago or 2. And I'm just wondering, would you possibly look for exit or monetization opportunities when they present themselves in the near and intermediate term?

Yes. Brian, thanks for the question. It's Kevin. We, of course, are analyzing what to do as we move forward with these. As I mentioned, we get the strategic benefit, and we don't want to lose that as we look forward. We are going to moderate the budgets a bit as we see how the dust settles, what happens with clean energy, clean tech. And, in particular, I want to point out that within the funds we have, there's this broad brush name of clean technology that's being applied, and those are the indexes that we're often comparing to. But the types of investments within the portfolio is, it's quite broad and many of which aren't even really related to clean technology. And so it will be interesting to see how this all plays out. Some of the -- what needs to transpire as I've mentioned a call or 2 ago is the ability for the IPO market to open up for our ability to see exits from the funds of the investments that the funds have made. And we think there are several opportunities that will help things turn around a bit here. But again, we're not going to rest on our heels and just see how it plays out. We have some strategies we're reviewing and trying to see if we should be making some changes how we think about our nonregulated businesses.

All right. Great. And then just lastly, it's nice that you're at the higher end of the Avista Utilities' guidance range now. But it seems like you're still maintaining that 8.8% earned ROE. Is there potential upside to further close that regulatory gap considering the success or achievements you've had to date to get to the high end of this year's range?

I think that we want to make sure that we place a number out there for you all that's achievable, and we think that the 8.8% is achievable. If we are successful, and I'd like to think that we will be, as you think about what Heather shared that we have opportunities for additional investments that could benefit us and some growth that could benefit us. That would really drive additional EPS growth. I think the ROE at the utilities, 8.8% is a number that's achievable, and we'll stick there for now.

[Operator Instructions] Our next question will be coming from Sophie Karp of KBCM.

Maybe you can talk a little bit about the RFPs here. I don't know if I missed it in the prepared remarks. Are there any thermal resources in there?

Are there any thermal resources in the RFP? We did have natural gas as one of the resources that we received with solar and wind and battery storage and others.

And how you guys feel about like, I guess, your prospective win rate in this round? I don't know if it's too early to talk about that, but like with thermal resource being in there, maybe it's a little easier for you to win that versus a renewable resource because of like accounting legalization issue. But can you discuss that a little bit?

I don't know if I caught all of that in terms of the -- we're working with a third-party evaluator to look at all of the 80 bids and assess the cost, the time frames, the feasibility of them and also folding that into our compliance requirements in Washington State specifically. And so we're looking at all of the above. The -- I'm not sure if that covers it.

I was just wondering if you could share whether you bid into the thermal resource with a pure bid or a third party? And is it easier for Avista Utilities to win a thermal resource versus a renewable plant?

So at this time, with the evaluation underway, we're not sharing specifically what the self-bid options that we put in, but we do think that our bids will be competitive. That's why we put them in, but that's all I can share.

Got it. Got it. Okay. And then I was just wondering if you could talk a little bit about the outlook for wildfires in your region, like how is it shaping up so far? What are you guys seeing on the ground because it's been a pretty dry summer in the West?

Yes. The fire activity has been, I think, above normal. But for us, it's been good so far. We haven't seen significant starts, yes, so in August, we'll see. But it is drier than normal, the summer. So we're using all of our mitigation tactics to minimize that risk going forward.

And I'm showing no further questions. I would now like to turn the conference back to Stacey for closing remarks.

Thank you all for joining us today and for your interest in Avista. Have a great day.

And this concludes today's conference call. Thank you for participating. You may now disconnect.