20080403Press Release.pdf

Idaho PU~lic Utilities Commission
Office of the Secretary
RECEIVED
APR - 3 2008
Boise, Idaho
AVU-E-08-01 / AVU-G-08-01
EXHIBIT B-1
PRESS RELEASE
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Contact:
Media: Debbie Simock [phone], debbie.simockCâavistacorp.com
Investors: Jason Lang [phone] jason.langCâavistacorp.com
Avista 24/7 Media Access [phone]
Avista Requests Increase in Electric and Natural Gas Prices in Idaho
Increases necessary to meet growing energy demand and to upgrade system capacity and
reliabílty
SPOKANE, Wash. April 3, 2008,1 :15 p.m. PDT: Avista (NYSE: AVA) has filed a request with
the Idaho Public Utilities Commission (IPUC) that, if approved, would increase residential
electric bils by 15.9 percent and natural gas bils by 6.5 percent. An average residential
customer using 977 kilowatt hours of electricity per month would see a $10.70 per month
increase for a revised monthly bil of $78.08. The average natural gas customer who uses 65
therms per month would see a $4.91 increase, for a revised monthly bill of $80.05. The IPUC
generally has up to nine months to review a general rate case filing.
The requested electric rate increase is driven primarily by significant increases in fuel and
purchased power costs to meet growing customer demand and by investments made to
upgrade aging infrastructure to increase its capacity and reliability.
Significant investments in generation and delivery systems have been made since Idaho base
rates were last adjusted in fall 2004. The investments include upgrades to the Noxon Rapids
and Cabinet Gorge hydroelectric projects and Colstrip thermal projects to improve efficiency,
reliability and generating output. In the past five-years Avista has invested over $130 milion to
upgrade and reinforce the electric transmission system in northern Idaho and eastern
Washington. Upgrades to many transmission and distribution substations, power lines and
related equipment are ongoing.
Also since fall 2004, overall system power supply expenses have increased by $94.3 milion due
to growing customer demand and increased costs for generating, purchasing and delivering
electricity to customers.
Costs incurred in the seven-year public process to relicense Avista's hydroelectric projects on
the Spokane River are also included in the request. The projects annually generate a combined
105 average megawatts of renewable energy or enough energy to power about 68,000 homes
for a year. To date, Avista has invested $21 millon in the Spokane River relicensing process.
Scott Morris, Avista's chairman of the board, president and chief executive officer, said the
capital projects are part of the company's multi-year plan to increase the efficiency, reliability
and capacity of its aging infrastructure, to meet growing customer demand with responsible
energy resources, and to meet new environmental standards.
"Our priority is to cost effectively and safely deliver reliable energy to our customers. To do that,
we are focused on managing our costs by gaining more energy from our existing facilities and
by implementing efficiencies throughout our operations to benefi customers," said Morris.
"Avista, and the utility industry as a whole, is facing significant increases in the cost of doing
business due in part to major increases in the cost of steel, copper, aluminum and cement.
These materials, which are key components in utility equipment, have a major impact on our
construction and maintenance costs."
Driving the natural gas rate request is Avista's investment in upgrading the Jackson Prairie
Natural Gas Storage Facility. The ability to purchase and store more natural gas during the
summer months when prices are typically lower lessens the need to purchase natural gas
during the winter months when prices, and customer demand, tend to be higher.
In addition to working diligently to gain effciencies and control the cost of providing energy
service, Avista continues to provide a number of energy assistance programs to aid customers
who are most affected by rising energy costs. These include Project Share, CARES, energy
efficiency programs and level payment plans.
Avista offers numerous residential, commercial and industrial energy efficiency programs with
many specifically for qualifying low-income customers. In 2007, Avista provided $9.4 milion in
incentives to customers making energy efficiency improvements to their home or business in an
effort to reduce energy usage. Program information is available at www.everylittlebit.com.
The requested increases are designed to produce $32.3 million in additional revenue for electric
service and $4.7 million in revenue for natural gas service. This request is based on a proposed
rate of return on rate base of 8.74 percent, with a common equity ratio of 47.9 percent and a
10.8 percent return on equity.
Avista Corp. is an energy company involved in the production, transmission and distribution of
energy as well as other energy-related businesses. Avista Utilities is our operating division that
provides service to 352,000 electric and 311,000 natural gas customers in three Western states.
Avista's primary, non-regulated subsidiary is Advantage ia. Our stock is traded under the ticker
symbol "AVA." For more information about Avista, please visit www.avistacorp.com.
Avista Corp. and the Avista Corp. logo are trademarks of Avista Corporation. All other
trademarks mentioned in this document are the property of their respective owners.
This news release contains forward-looking statements regarding the company's current
expectations. Forward-looking statements are all statements other than historical facts. Such
statements speak only as of the date of the news release and are subject to a variety of risks
and uncertainties, many of which are beyond the company's control, which could cause actual
results to differ materially from the expectations. These risks and uncertainties include, in
addition to those discussed herein, all of the factors discussed in the company's Annual Report
on Form 10-K for the year ended Dec. 31, 2007.
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