2006Annual Report.pdf

Avu- G
Form 2 Approved
OMB No. 1902-0028
(Expires 6/30/2007)
Form 3-0: Approved
OMB No.1902-0205
(Expires 6/30/2007)
THIS FILING IS
Item 1: ~ An Initial (Original)
Submission
OR 0 Resubmission No.
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FERC FINANCIAL REPORT
FERC FORM No.2: Annual Report of
Major Natural Gas Companies and
Supplemental Form Q: Quarterly
Financial Report
These reports are mandatory under the Natural Gas Act, Sections 10(a), and 16 and 18
CFR Parts 260.1 and 260.300. Failure to report may result in criminal fines, civil
penalties, and other sanctions as provided by law. The Federal Energy Regulatory
Commission does not consider these reports to be of a confidential nature.
Exact Legal Name of Respondent (Company)
A vista Corporation
Year/Period of Report
End 2006/04
FERC FORM No. 2/30 (02-04)
IDENTIFICATION
01 Exact Legal Name of Respondent 02 Year/Period of Report
Avista Corporation End of 2006/04
03 Previous Name and Date of Change (if name changed during year)
/ /
04 Address of Principal Office at End of Period (Street, City, State, Zip Code)
1411 East Mission Avenue, Spokane, W A, 99202
05 Name of Contact Person 06 Title of Contact Person
M. K. Malquist Executive VP and CFO
07 Address of Contact Person (Street, City, State, Zip Code)
1411 East Mission Avenue, Spokane, WA, 99202
08 Telephone of Contact Person lncluding 09 This Report Is 10 Date of Report
Area. Code (1) 00 An Original (2) 0 A Resubmission (Mo, Da, Yr)
[phone] 04/18/2007
ANNUAL CORPORATE OFFICER CERTIFICATION
The undersigned officer certifies that:
I have examined this report and to the best of my knowledge, information, and belief all statements of fact contained in this report are correct statements
of the business affairs of the respondent and the financial statements, and other financial information contained in this report, conform in all material
respects to the Uniform System of Accounts.
01 Name 03 Signature
j/tt/t,
/.d
/ //
04 Date Signed
M. K. Malquist ll/L//A/(Mo, Da, Yr)02 Title
Executive VP and CFO M. K. Malquist 04/18/2007
Title 18, U.C. 1001 makes it a crime for any person to knowingly and willingly to make to any Agency or Department of the United States any
false, fictitious or fraudulent statements as to any matter within its jurisdiction.
FERC FORM NO. 1/3-
REPORT OF MAJOR ELECTRIC UTILITIES LICENSEES AND OTHER
FERC FORM No.2/3-Q (REV. 02-04)Page 1
Name of Respondent This report is:Date of Repon Year Ending
Avista Corp.( X) An Original (Mo, Da, Yr)
J A Resubmission April 18, 2007 Dec. 31 2006
List of Schedules (Natural Gas Company)
Enter in column (d) the terms "none
" "
not applicable," or "NA" as appropriate, where no information or amounts have been reported for
certain pages. Omit pages where the responses are "none,
" "
not applicable," or "NA."
Line Title of Schedule Reference Page No.Date Revised Remarks
No.(a)(b)(c)(d)
GENERAL CORPORATE INFORMATION AND FINANCIAL STATEMENTS
1 Generallnfonnation 101
2 Control Over Respondent 102 N/A
3 Corporations Controlled by Respondent 103
4 SecuritY Holders and Votin2 Powers 107
5 Important Changes Durin2 the Year 108-109
6 Comparative Balance Sheet 110-113
7 StatementciIncome for the Year 114-116
8 Statement of Accumulated Comprehensive Income and Hed2in2 Activities 117 shown as 122a1b
9 Statement of Retained Earnings for the Year 118-119
Statements of Cash Flows 120-121
Notes to Financial Statements 122-123
BALANCE SHEET SUPPORTING SCHEDULES (Assets and Other Debits)
Summarv of UtilitY Plant and Accumulated Provisions for Depreciation, Amortization, and Depletion 200-201
Gas Plant in Service 204-209
Gas Propertv and CapacitY Leased from Others 212 N/A
Gas Propertv and CapacitY Leased to Others 213 N/A
Gas Plant Held for Future Use 214 N/A
Construction Work in PrOl!fess-Gas 216
General Description of Construction Overhead Procedure 218 N/A
Accumulated Provision for Deoreciation of Gas UtilitY Plant 219
Gas Stored 220
Investments 222-223 N/A
Investments in Subsidiary Companies 224-225
Prepayments 230
Extraordinary Property Losses 230 N/A
Unrecovered Plant and Re2u!atory Study Costs 230 N/A
Other Regulatory Assets 232
Miscellaneous Deferred Debits 233
Accumulated Deferred Income Taxes 234-235
BALANCE SHEET SUPPORTING SCHEDULES (Liabilities and Other Credits)
Capital Stock 250-251
Capital Stock Subscribed, Capital Stock Liability for Conversion, Premium on Capital Stock, and
Installments Received on Caoital Stock 252 N/A
Other Paid-in Capital 253 N/A
Discount on Capital Stock 254 N/A
Capital Stock Expense 254(b)
Securities issued or Assumed and Securities Refunded or Retired Durin!! the Year 255 N/A
Long-Tenn Debt 256-257
Unamortized Debt Expense, Premium, and Discount on Lon!!-Tenn Debt 258-259 N/A
Unamortized Loss and Gain on Reacquired Debt 260 N/A
FERC FORM NO.2 (12-96)Page 2
Name of Respondent This report is:Date of Reporl Year Ending
Avista Corp.( X) An Original (Mo, Da, Yr)
) A Resubmission April 18, 2007 Dec, 31, 2006
List of Schedules (Natural Gas Company)
Enter in column Cd) the tenus "none,
" "
not applicable," or "NA" as appropriate, where no infonnation or amounts have been reported for
certain pages. Omit pages where the responses are "none
" "
not applicable " or "NA."
Line Title of Schedule Reference Page No.Date Revised Remarks
No.(a)(b)(c)(d)
Reconciliation of Reported Net Income with Taxable Income for Federal Income Taxes 261
Taxes Accrued, Prepaid, and Charged During Year 262-263
Accumulated Dererred Investment Tax Credits 266-267
Miscellaneous Current and Accrued Liabilities 268
Other Deferred Credits 269
Accumulated Deferred Income Taxes-Other Propertv 274-275
Accumulated Deferred Income Taxes-Other 276-277
Other Regulatorv Liabilities 278
INCOME ACCOUNT SUPPORTING SCHEDULES
Gas Operating Revenues 300-301
Revenues from TransPOrtation of Gas of Others Through Gathering Facilities 302-303 N/A
Revenues from Transportation of Gas of Others Through Transmission Facilities 304-305 N/A
Revenues from Storage Gas of Others 306-307 N/A
Other Gas Revenues 308 N/A
Gas Operation and Maintenance Expenses 320-325
Exchange and Imbalance Transactions 328 N/A
Gas Used in Utility Operations 331 N/A
Transmission and Compression of Gas bv Others 332 N/A
Other Gas Supply Expenses 334
Miscellaneous General Expenses-Gas 335
Depreciation, Depletion, and Amortization of Gas Plant 336-338
Particulars Concerning Certain Income Deduction and Interest Charges Accounts 340
COMMON SECTION
Regulatory Commission Expenses 350-351
Distribution of Salaries and Wages 354-355
Charges for Outside Professional and Other Consultative Services 357
GAS PLANT STATISTICAL DATA
Compressor Stations 508-509 N/A
Gas Storage Projects 512-513
Transmission Lines 514
Transmission System Peak Deliveries 518 N/A
Auxiliary Peaking Facilities 519
Gas Account-Natural Gas 520
System Map 522 N/A
Footnote Reference 551 shown as 450
Footnote Text 552 shown as 450
Stockholder s Reports (check appropriate box)
(X) Four copies will be submitted
( ) No annual report to stockholders is prepared
FERC FORM NO.2 (12-96)Page 3
This Page Intentionally Left Blank
Name of Respondent This Report Is:
(1) 00 An Original(2) D A Resubmission
Date of Report
(Mo, Da, Yr)
04/18/2007
Year/Period of Report
A vista Corporation
End of 2006/04
GENERAL INFORMATION
1. Provide name and title of officer having custody of the general corporate books of account and address of
office where the general corporate books are kept, and address of office where any other corporate books of account
are kept, if different from that where the general corporate books are kept.
M. K. Malquist, Executive Vice President and Chief Financial Officer
1411 E. Mission Avenue
Spokane, WA 99202
2. Provide the name of the State under the laws of which respondent is incorporated, and date of incorporation.
If incorporated under a special law, give reference to such law. If not incorporated, state that fact and give the type
of organization and the date organized.
State of Washington, Incorporated March 15, 1999
3. If at any time during the year the property of respondent was held by a receiver or trustee, give (a) name of
receiver or trustee, (b) date such receiver or trustee took possession , (c) the authority by which the receivership or
trusteeship was created, and (d) date when possession by receiver or trustee ceased.
Not Applicable
4. State the classes or utility and other services furnished by respondent during the year in each State in which
the respondent operated.
Electric service in the states of Washington, Idaho and Montana
Natural gas service in the states of Washington, Idaho and Oregon
5. Have you engaged as the principal accountant to audit your financial statements an accountant who is not
the principal accountant for your previous year s certified financial statements?
(1) 0 Yes...Enter the date when such independent accountant was initially engaged:
(2) 00
F!;RC FORM NO. 21 (ED. 12-87)PAGE 101
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04
(2)DA Resubmisslon 04/18/2007
C )RPORATIONS CONTROLLED BY R SPONDENT
1. Report below the names of all corporations, business trusts, and similar organizations, controlled directly or indirectly by respondent
at any time during the year. If control ceased prior to end of year, give particulars (details) in a footnote.
2. If control was by other means than a direct holding of voting rights, state in a footnote the manner in which control was held, naming
any intermediaries involved.
3. If control was held jointly with one or more other interests, state the fact in a footnote and name the other interests.
Definitions
1. See the Uniform System of Accounts for a definition of control.
2. Direct control is that which is exercised without interposition of an intermediary.
3. Indirect control is that which is exercised by the interposition of an intermediary which exercises direct control.
4. Joint control is that in which neither interest can effectively control or direct action without the consent of the other, as where the
voting control is equally divided between two holders, or each party holds a veto power over the other. Joint control may exist by
mutual agreement or understanding between two or more parties who together have control within the meaning of the definition of
control in the Uniform System of Accounts , regardless of the relative voting rights of each party.
Line Name of Company Controlled Kind of Business Percent Voting Footnote
No.Stock Owned Ref.
(a)(b)(c)(d)
Avista Capital, Inc.Parent company to the 100
Company s subsidiaries.
Advantage 10, Inc. (formerly Avista Advantage)Provider of utility bill 99.Subsidiary of
processing, payment and Avista Capital
information services to multi
site customers in North Amer.
Avista Communications, Inc.Telecommunications 100 Inactive
Subsidiary of
Avista Capital
Avista Development, Inc.Nonoperating company which 100 Subsidiary of
maintains an investment Avista Ventures
portfolio of real estate and
other investments.
Avista Energy, Inc.Wholesale electricity and 99.Subsidiary of
natural gas trading,marketing Avista Capital
and resource management.
Avista Laboratories, Inc.Holds a cost based investment 100
in a fuel cell technology Inactive subsidiary
company.of Avista Capital.
FERC FORM NO.2 (ED. 12-96)Page 103
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04
(2) D A Resubmission 04/18/2007
C JRPORA TIONS CONTROLLED BY R SPONDENT
1. Report below the names of all corporations, business trusts, and similar organizations, controlled directly or indirectly by respondent
at any time during the year. If control ceased prior to end of year, give particulars (details) in a footnote.
2. If control was by other means than a direct holding of voting rights, state in a footnote the manner in which control was held, naming
any intermediaries involved.
3. If control was held jointly with one or more other interests, state the fact in a footnote and name the other interests.
Definitions
1. See the Uniform System of Accounts for a definition of control.
2. Direct control is that which is exercised without interposition of an intermediary.
3. Indirect control is that which is exercised by the interposition of an intermediary which exercises direct control.
4. Joint control is that in which neither interest can effectively control or direct action without the consent of the other, as where the
voting control is equally divided between two holders, or each party holds a veto power over the other. Joint control may exist by
mutual agreement or understanding between two or more parties who together have control within the meaning of the definition of
control in the Uniform System of Accounts, regardless of the relative voting rights of each party.
Line Name of Company Controlled Kind of Business Percent Voting Footnote
No.Stock Owned Ref.
(a)(b)(c)(d)
Avista Power, LLC Owns non-regulated generation 100 Subsidiary of
assets.Avista Capital
Avista Turbine Power, Inc.Receives assignments of 100 Subsidiary of
purchase power agreements.Avista Power
Avista Rathdrum, LLC Owned 49 percent of Rathdrum 100 Subsidiary of'
Power, LLC (sold 10/2006)Avista Power
Avista Ventures, Inc.Invests in emerging business.100 Subsidiary of
Parent of Avista Development Avista Capital
and Pentzer Corporation
Pentzer Corporation Parent company of Advanced 100 Subsidiary of
Manufacturing and Avista Ventures
Development.
Advanced Manufacturing and Development, Inc.Performs custom sheet metal Subsidiary of
manufacturing of electronic Pentzer Corporation
enclosures, parts and systems
for the computer, telecom and
medical industries. AM&D
also has a wood products
division.
Avista Receivables Corporation Acquires and sells accounts 100
FERC FORM NO.2 (ED. 12-96)Page 103.
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
C )RPORATIONS CONTROLLED BY R SPONDENT
1. Report below the names of all corporations, business trusts, and similar organizations, controlled directly or indirectly by respondent
at any time during the year. If control ceased prior to end of year, give particulars (details) in a footnote.
2. If control was by other means than a direct holding of voting rights, state in a footnote the manner in which control was held, naming
any intermediaries involved.
3. If control was held jointly with one or more other interests, state the fact in a footnote and name the other interests.
Definitions
1. See the Uniform System of Accounts for a definition of control.
2. Direct control is that which is exercised without interposition of an intermediary.
3. Indirect control is that which is exercised by the interposition of an intermediary which exercises direct control.
4. Joint control is that in which neither interest can effectively control or direct action without the consent of the other, as where the
voting control is equally divided between two holders, or each party holds a veto power over the other. Joint control may exist by
mutual agreement or understanding between two or more parties who together have control within the meaning of the definition of
control in the Uniform System of Accounts, regardless of the relative voting rights of each party.
Line Name of Company Controlled Kind of Business Percent Voting Footnote
No.Stock Owned Ref.
(a)(b)(c)(d)
receivable of Avista Corp.
Avista Energy Canada, Ltd.A wholly owned subsidiary of 100 Subsidiary of
Avista Energy, Inc. that Avista Energy
provides natural gas service
to approximately 250
individual customers in
British Columbia, Canada
Rathdrum Power, LLC Developed and owns an 49 (sold 10/2006)Sold in October 2006
electric generation asset.
Coyote Springs 2, LLC 100
Spokane Energy, LLC Marketing of energy.100
Avista Capital II An affiliated business trust 100
formed by the Company.
Issued Pref. Trust Securities
AVA Capital Trust III An affiliated business trust 100
formed by the Company.
Issued Pref. Trust Securities
FERC FORM NO.2 (ED. 12-96)Page 103.
Name of Respondent This (!Jort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
C RPORA TIONS CONTROLLED BY R SPONDENT
1. Report below the names of all corporations, business trusts, and similar organizations, controlled directly or indirectly by respondent
at any time during the year. If control ceased prior to end of year, give particulars (details) in a footnote.
2. If control was by other means than a direct holding of voting rights, state in a footnote the manner in which control was held, naming
any intermediaries involved.
3. If control was held jointly with one or more other interests, state the fact in a footnote and name the other interests.
Definitions
1. See the Uniform System of Accounts for a definition of control.
2. Direct control is that which is exercised without interposition of an intermediary.
3. Indirect control is that which is exercised by the interposition of an intermediary which exercises direct control.
4. Joint control is that in which neither interest can effectively control or direct action without the consent of the other, as where the
voting control is equally divided between two holders, or each party holds a veto power over the other. Joint control may exist by
mutual agreement or understanding between two or more parties who together have control within the meaning of the definition of
control in the Uniform System of Accounts, regardless of the relative voting rights of each party.
Line Name of Company Controlled Kind of Business Percent Voting Footnote
No.Stock Owned Ref.
(a)(b)(c)(d)
Steam Plant Square, LLC Commercial office and retail Subsidiary of
leasing.Avista Development
Courtyard Office Center Commercial office and retail 100 Subsidiary of
leasing.Avista Development
AVA Formation Corp.Holding Company 100 Formed in 2006 for th
purpose of completing
proposed statutory
share exchange and
holding company
structure. Currently
a subsidiary of
Avista Corp.
FERC FORM NO.2 (ED. 12-96)Page 103.
Name of Respondent Thi, oct Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
A vista Corp.(2) A Resubmission 04/18/07 Dec. 31, 2Qili!
Security Holders and Voting Powers
1. Give the names and addresses of the 10 security holders of the respondent who, at the date of the latest closing of the stock book or compilation
of list of stockholders of the respondent, prior to the end of the year, had the highest voting powers in the respondent, and state the number of
votes that each could cast on that date if a meeting were held. If any such holder held in trust, give in a footnote the known particulars of the trust
(whether voting trust, etc.), duration of trust, and principal holders of beneficiary interests in the trust. If the company did not close the stock book
or did not compiJe alist of stockholders within one year prior to the end of the year, or if since it compiled the previous list of stockholders, some
other class of security has become vested with voting rights, then show such 10 security holders as of the close of the year. Arrange the names of
the security holders in the order of voting power, commencing with the highest. Show in column (a) the titles of officers and directors included in
such list of 10 security holders.
2. If any security other than stock carnes voting rights, explain in a supplemental statement how such security became vested with voting rights
and give other important details concerning the voting rights of such security. State whether voting rights are actual or contingent; if contingent,
describe the contingency.
3. If any class or issue of security has any special privileges in the election of directors, trustees or managers, or in the determination of corporate
action by any method, explain briefly in a footnote.
4. Fumish details concerning any options, warrants, or rights outstanding at the end of the year for others to purchase securities of the respondent
or any securities or other assets owned by the respondent, including prices, expiration dates, and other material information relating to exercise of
the options, warrants or rights. Specify the amount of such securities or assets any officer, director, associated company, or any of the 10 largest
security holders is entitJed to purchase. This instruction is inapplicable to convertible securities or to any securities substantially all of which are
outstanding in the hands of the general public where the options, warrants, or rights were issued prorata basIs.
1. Give date of the latest closing of the 2. State the total number of votes cast at the latest general meeting 3. Give the date and place of such
stock book prior to end of year, and in a prior to the end of year for election of directors of the respondent meeting:
footnote, state the purpose of such closing:and number of such votes cast by proxy.
November 30, 2006 to pay the Total:42,419,290 May 11, 2006
December 15 2006 dividend.By Proxy:42,419,290 Spokane, Washington
VOTING SECURITIES
4. Number of votes as of (date):11/30/2006
L..ine Name (Title) and Address of Security Holder Total Votes Common Stock Preferred Stock Other
No.(a)(b)(c)(d)(e)
TOTAL votes of all voting securities 807,006 807 006
TOTAL number of security hoJders 270 270
TOTAL votes of security holders listed below 344 497 344,497
D&H Properties LP, Coeur d'Alene, ID 77,646 77,646
Gary Gail Ely, Liberty Lake, W A 218 218
Margaret Anne Bronson Trust, Akron, OH 55,000 55,000
Alfred C. Glassell, Jr., Houston, TX 028 028
David J. Meyer, Spokane, W A 23,098 23,098
Kay Kobayashi, Los Angeles, CA 092 092
Ernest C. Gosnay Jr. & Marie K. Gosnay TRS, Spokane, W A 20,011 011
Robert Eugene Young, Washougal, W A 20,000 20,000
Edmund M. Reeck Tr VIA Dtd 06/16/98 Salem, OR 962 962
Thomas A. Lowe & Kathleen B. Lowe , Satellite Beach, FL 442 15,442
FERC FORM NO.2 (ED 12-96)Page 107
Name of Respondent
A vista Corporation
Year/Period of Report
End of 2006/Q4
This Report Is: Date of Report
(1) (29 An Original(2) D A Resubmission 04/18/2007
IMI ORTANT CHANGES DURING THE QUARTERNEAR
Give particulars (details) concerning the matters indicated below. Make the statements explicit and precise, and number them in
accordance with the inquiries. Each inquiry should be answered. Enter "none
" "
not applicable " or "NA" where applicable. If
information which answers an inquiry is given elsewhere in the report, make a reference to the schedule in which it appears.
1. Changes in and important additions to franchise rights: Describe the actual consideration given therefore and state from whom the
franchise rights were acquired. If acquired without the payment of consideration, state that fact.
2. Acquisition of ownership in other companies by reorganization, merger, or consolidation with other companies: Give names of
companies involved, particulars concerning the transactions, name of the Commission authorizing the transaction , and reference to
Commission authorization.
3. Purchase or sale of an operating unit or system: Give a brief description of the property, and of the transactions relating thereto,
and reference to Commission authorization, if any was required. Give date journal entries called for by the Uniform System of Accounts
were submitted to the Commission.
4. Important leaseholds (other than leaseholds for natural gas lands) that have been acquired or given, assigned or surrendered: Give
effective dates, lengths of terms, names of parties, rents, and other condition. State name of Commission authorizing lease and give
reference to such authorization.
5. Important extension or reduction of transmission or distribution system: State territory added or relinquished and date operations
began or ceased and give reference to Commission authorization, if any was required. State also the approximate number of
customers added or lost and approximate annual revenues of each class of service. Each natural gas company must also state major
new continuing sources of gas made available to it from purchases, development, purchase contract or otherwise, giving location and
approximate total gas volumes available, period of contracts, and other parties to any such arrangements, etc.
6. Obligations incurred as a result of issuance of securities or assumption of liabilities or guarantees including issuance of short-term
debt and commercial paper having a maturity of one year or less. Give reference to FERC or State Commission authorization , as
appropriate, and the amount of obligation or guarantee.
7. Changes in articles of incorporation or amendments to charter: Explain the nature and purpose of such changes or amendments.
8. State the estimated annual effect and nature of any important wage scale changes during the year.
9. State briefly the status of any materially important legal proceedings pending at the end of the year, and the results of any such
proceedings culminated during the year.
10. Describe briefly any materially important transactions of the respondent not disclosed elsewhere in this report in which an officer
director, security holder reported on Page 106, voting trustee, associated company or known associate of any of these persons was a
party or in which any such person had a material interest.
11. (Reserved.
12. If the important changes during the year relating to the respondent company appearing in the annual report to stockholders are
applicable in every respect and furnish the data required by Instructions 1 to 11 above, such notes may be included on this page.
13. Describe fully any changes in officers, directors, major security holders and voting powers of the respondent that may have
occurred during the reporting period.
14. In the event that the respondent participates in a cash management program(s) and its proprietary capital ratio is less than 30
percent please describe the significant events or transactions causing the proprietary capital ratio to be less than 30 percent, and the
extent to which the respondent has amounts loaned or money advanced to its parent, subsidiary, or affiliated companies through a
cash management program(s). Additionally, please describe plans, if any to regain at least a 30 percent proprietary ratio.
PAGE 108 INTENTIONALLY LEFT BLANK
SEE PAGE 109 FOR REQUIRED INFORMATION.
FERC FORM NO.2 (ED. 12-96)Page 108
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubm ission 04/18/2007 2006/04
IMPORTANT CHANGES DURING THE OUARTER/YEAR (Continued)1. None.2. None.3. None.4. None.5. None.6. A vista Receivables Corporation (ARC) is a wholly owned, bankruptcy-remote subsidiary of A vista Corp.
formed for the purpose of acquiring or purchasing interests in certain accounts receivable, both billed and unbilled, of the
Company. On March 20,2006, Avista Corp., ARC and a third-party financial institution amended a Receivables
Purchase Agreement. The most significant amendment was to extend the termination date from March 21 2006 to March
20,2007. Under the Receivables Purchase Agreement, ARC can sell without recourse, on a revolving basis, up to $85.
million of those receivables. ARC is obligated to pay fees that approximate the purchaser s cost of issuing commercial
paper equal in value to the interests in receivables sold. On a consolidated basis, the amount of such fees is included in
other operating expenses of A vista Corp. At each of December 31 , 2006 and 2005, $85.0 million in accounts receivables
were sold under this revolving agreement.
On April 6, 2006, the Company amended its committed line of credit agreement with various banks. The
committed line of credit was originally entered into on December 17, 2004. Amendments to the committed line of credit
include a reduction in the total amount of the facility to $320.0 million from $350.0 million and an extension of the
expiration date to April 5, 2011 from December 16, 2009. The Company chose to reduce the facility based on forecasted
liquidity needs. Under the amended credit agreement, the Company can request the issuance of up to $320.0 million in
letters of credit, an increase from $150.0 million prior to the amendment. As of December 31,2006 and December 31,
2005, the Company had $4.0 million and $63.0 million, respectively, of borrowings outstanding. Total letters of credit
outstanding were $77.1 million as of December 31 2006 and $44.1 million as of December 31, 2005. The amended
committed line of credit is secured by $320.0 million of non-transferable First Mortgage Bonds of the Company issued to
the agent bank that would only become due and payable in the event, and then only to the extent, that the Company
defaults on its obligations under the committed line of credit.
During December 2006, the Company issued $150.0 million of 5.70 percent First Mortgage Bonds due in
2037. The proceeds from the issuance were used to legally defease $150.0 million of First Mortgage Bonds that were
scheduled to mature on January 1 2007. This debt issuance was approved by the respective regulatory commissions as
follows: WUTC (Docket No. UE-061688 Order No. 1); IPUC (Case No. A VU-06-02 Order No. 30150); and OPUC
(Docket UP 4230 Order No. 06-583).
In December 2006, the Company issued 3 162,500 shares of common stock through an underwriter and
received net proceeds of $77.7 million. This issuance was approved by the respective regulatory commissions as follows:
WUTC (Docket UE-060537 Order 01); OPUC (Docket UP 4225 Order No. 06-358); and IPUC (Case No. A VU-06-
Order No. 30036).
Also, in December 2006, the Company entered into a sales agency agreement with a sales agent, to issue up
to 2 million shares of its common stock from time to time.7. No changes in articles of incorporation or amendments to charter. On August 16,2006, the Bylaws of Avista
Corporation were amended. Specifically, section 2 of Article ill of the Bylaws of Avista Corporation has been changed
with respect to the number of directors of the Corporation. Section 2 of Article ill, which previously stated that "the
number of directors of the Corporation shall be eleven," has been amended to state "the number of directors of the
Corporation shall be no more than eleven.
On November 9,2006, the Bylaws of Avista Corporation were amended. Specifically, section 2 of Article
ill of the Bylaws of A vista Corporation has been changed with respect to the number of directors of the Corporation.
Section 2 of Article ill, which previously stated that "the number of directors of the Corporation shall be no more than
eleven " has been amended to state "the number of Directors of the Corporation shall be as fixed from time to time by
resolution of the Board of Directors, but shall not be more than eleven.8. Average annual wage increases were 2.4% during 2006 for non-exempt personnel. Average annual wage
increases were 3.1 % for exempt employees during 2006. Average annual wage increases were 4.0% for officers during
I FERC FORM NO.(ED. 12-96) Page 109.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
IMPORTANT CHANGES DURING THE OUARTER/YEAR (Continued)
2006. Bargaining unit employees increases were 3.0%.9. Reference is made to Note 23 of Notes to Financial Statements, page 123 of this Report.10. None.11. Reserved12. See page 123 of this Report.13. On January 6, 2006, Avista Corp. announced the appointment of Christy Bunneister-Smith as vice president
and treasurer and Ann Wilson as vice president and controller. Christy Bunneister-Smith previously was vice president
and controller of the Company since June 1999. Ann Wilson previously was vice president and controller of Avista
Energy, Inc., a subsidiary of the Company, since January 2000.
On May 12, 2006, the Board of Directors of A vista Corp. named Scott L. Morris as president and chief
operating officer of A vista Corp. Mr. Morris previously was A vista Corp. senior vice president and president of A vista
Utilities. Gary G. Ely previously president of A vista Corp., will remain as chainnan of the board and chief executive
officer. In addition, the board named senior vice president and chief financial officer Malyn K. Malquist to the position
of executive vice president and chief financial officer for the Company.
David A. Clack did not stand for re-election and retired at the annual meeting of shareholders on May 11
2006. Mr. Clack served on the Company s Board of Directors for 18 years and retired because he reached the mandatory
retirement age for directors as provided for in the Company s bylaws.
Heidi B. Stanley was elected as a director at the annual meeting of shareholders on May 11 2006 for a
three-year term to expire at the annual meeting of shareholders in 2009. Ms. Stanley has served as Director, Vice Chair
and Chief Operating Officer of Sterling Savings Bank since October 2003. In her 20-year career in banking, she has held
progressively responsible positions of leadership.
On June 22,2006, Jessie J. Knight, Jr. provided written notification to Avista Corp. of his resignation from
A vista Corp.' s board of directors due to the fact that Mr. Knight has accepted a position as an executive officer of another
public utility company.
James M. Kensok was named Vice President and Chief Information Officer effective January 1,2007. Mr.
Kensokjoined Avista in 1996 as an internal infonnation systems auditor. He has held positions as manager and director
of information systems and chie~ security officer, and he has been the Chief Information Officer since February 2001.
On February 9, 2007, Gary G. Ely, Chainnan of the Board and Chief Executive Officer of Avista Corp.,
announced to the Company s board of directors, that he will retire from the Company and the board effective December
, 2007. Following Mr. Ely s announcement, the Company s board of directors appointed Scott L. Morris, President
and Chief Operating Officer of Avista Corp., to serve as a director on the board. The Company s board of directors also
elected Mr. Morris to the positions of Chainnan of the Board and Chief Executive Officer of A vista Corp. effective
January 2008. 14. Proprietary capital is not less than 30 percent.
I FERC FORM NO.(ED. 12-96) Page 109.
Name of Respondent This Report Is:Date of Report Year/Period of Report
A vista Corporation (1)IZI An Original (Mo, Da, Yr)
(2)A Resubmission 04/18/2007 End of 2006/04
COMPARATIVE BALANCE SHEET (ASSETS AND OTHER DEBITS)
Line Current Year Prior Year
Ref.End of OuarterNear End BalanceNo.Title of Account Page No.Balance 12/31
(a)(b)(c)(d)
UTILITY PLANT
Utility Plant (101-106,114)200-201 938,456 395 847,042,774
Construction Work in Progress (107)200-201 89,177,799 55,887,059
TOTAL Utility Plant (Enter Total of lines 2 and 3)027,634 194 902,929,833
(Less) Accum. Provo for Depr. Amort. Depl. (108, 110, 111, 115)200-201 024 356,307 971,551,338
Net Utility Plant (Enter Total of line 4 less 5)003,277 887 931,378 495
Nuclear Fuel in Process of Ref., Conv.Enrich., and Fab. (120.202-203
Nuclear Fuel Materials and Assemblies-Stock Account (120.
Nuclear Fuel Assemblies in Reactor (120.
Spent Nuclear Fuel (120.
Nuclear Fuel Under Capital Leases (120.
(Less) Accum. Provo for Amort. of Nucl. Fuel Assemblies (120.202-203
Net Nuclear Fuel (Enter Total of lines 7-11 less 12)
Net Utility Plant (Enter Total of lines 6 and 13)003,277 887 931 378,495
Utility Plant Adjustments (116)122
Gas Stored Underground - Noncurrent (117)
OTHER PROPERTY AND INVESTMENTS
Nonutility Property (121)670 391 142 727
(Less) Accum. Provo for Depr. and Amort. (122)878 680 858,924
Investments in Associated Companies (123)13,903 000 13,903 000
Investment in Subsidiary Companies (123.224-225 247 190 561 237,737,798
(For Cost of Account 123., See Footnote Page 224, line 42)
Noncurrent Portion of Allowances 228-229
Other Investments (124)31,166,335 701 281
Sinking Funds (125)
Depreciation Fund (126)
Amortization Fund - Federal (127)
Other Special Funds (128)13,360 954 049 946
Special Funds (Non Major Only) (129)
Long-Term Portion of Derivative Assets (175)574 531 46,731 530
Long-Term Portion of Derivative Assets - Hedges (176)
TOTAL Other Property and Investments (Lines 18-21 and 23-31)334 987 092 349,407,358
CURRENT AND ACCRUED ASSETS
Cash and Working Funds (Non-major Only) (130)
Cash (131)021 873 602 512
Special Deposits (132-134)042,325 5,408,468
Working Fund (135)684 345 726,275
Temporary Cash Investments (136)667 445 513 042
Notes Receivable (141)569
Customer Accounts Receivable (142)325 500 101,478,486
Other Accounts Receivable (143)714 601 041 055
(Less) Accum. Provo for Uncollectible Acct.-Credit (144)730,352 227 916
Notes Receivable from Associated Companies (145)198 865 321 130
Accounts Receivable from Assoc. Companies (146)1,465,217
Fuel Stock (151)227 121 931 773,050
Fuel Stock Expenses Undistributed (152)227
Residuals (Elec) and Extracted Products (153)227
Plant Materials and Operating Supplies (154)227 019 070 006,429
Merchandise (155)227
Other Materials and Supplies (156)227
Nuclear Materials Held for Sale (157)202-203/227
Allowances (158.1 and 158.228-229
FERC FORM NO.2 (REV. 12-03)Page 110
Name of Respondent This Report Is:Date of Report Year/Period of Report
A vista Corporation (1)rzJ An Original (Mo, Da, Yr)
(2)A Resubmission 04/18/2007 End of 2006/04
COMPARATIVE BALANCE SHEET (ASSETS AND OTHER DEBITS)Continued)
Line Current Year Prior Year
Ref.End of Ouarter/Year End BalanceNo.Title of Account Page No.Balance 12/31
(a)(b)(c)(d)
(Less) Noncurrent Portion of Allowances
Stores Expense Undistributed (163)227
Gas Stored Underground - Current (164.11,905,320 12,469 887
Liquefied Natural Gas Stored and Held for Processing (164.164.006 819 006 819
Prepayments (165)6,467 948 745 002
Advances for Gas (166-167)
Interest and Dividends Receivable (171)259
Rents Receivable (172)327 042 361,071
Accrued Utility Revenues (173)
Miscellaneous Current and Accrued Assets (174)162 032 449,358
Derivative Instrument Assets (175)36,402 843 116,224 963
(Less) Long-Term Portion of Derivative Instrument Assets (17~)25,574 531 46,731,530
Derivative Instrument Assets - Hedges (176)
(Less) Long-Term Portion of Derivative Instrument Assets - Hedges (176
Total Current and Accrued Assets (Lines 34 through 66)154 188 806 254 002 646
DEFERRED DEBITS
Unamortized Debt Expenses (181)17,931,388 15,692,385
Extraordinary Property Losses (182.230
Unrecovered Plant and Regulatory Study Costs (182.230
Other Regulatory Assets (182.232 323 816 436 225 248 761
Prelim. Survey and Investigation Charges (Electric) (183)645 616 988 821
Preliminary Natural Gas Survey and Investigation Charges 183.
Other Preliminary Survey and Investigation Charges (183.2)
Clearing Accounts (184)046
Temporary Facilities (185)
Miscellaneous Deferred Debits (186)233 297 127 675 589
Def. Losses from Disposition of Utility PIt. (187)
Research, Devel. and Demonstration Expend. (188)352-353
Unamortized Loss on Reaquired Debt (189)622 766 829 288
Accumulated Deferred Income Taxes (190)234 602 315 647,400
Unrecovered Purchased Gas Costs (191)275 674 43,444 010
Total Deferred Debits (lines 69 through 83)484 199,368 403,526,254
TOTAL ASSETS (lines 14-, 32, 67, and 84)976,653,153 938,314,753
FERC FORM NO.2 (REV. 12-03)Page 111
Name of Respondent This Report is:Date of Report Year/Period of Report
A vista Corporation (1)!XI An Original (mo, da, yr)
(2)A Rresubmission 04/18/2007 end of 2006/Q4
COMPARATIVE BALANCE SHEET (LIABILITIES AND OTHER CREDITS)
Line Current Year Prior Year
No.Ref.End of QuarterlY ear End Balance
Title of Account Page No.Balance 12/31
(a)(b)(c)(d)
PROPRIETARY CAPITAL
Common Stock Issued (201)250-251 722 039,406 631,083,752
Preferred Stock Issued (204)250-251
Capital Stock Subscribed (202, 205)252
Stock Liability for Conversion (203, 206)252
Premium on Capital Stock (207)252
Other Paid-In Capital (208-211)253
Installments Received on Capital Stock (212)252
(Less) Discount on Capital Stock (213)254
(Less) Capital Stock Expense (214)254 6,419,099 10,485,244
Retained Earnings (215, 215.1, 216)118-119 168,082,338 132 024 036
Unappropriated Undistributed Subsidiary Earnings (216.118-119 51,109,032 804 777
(Less) Reaquired Capital Stock (217)250-251
Noncorporate Proprietorship (Non-major only) (218)
Accumulated Other Comprehensive Income (219)122(a)(b)965,585 23,299,148
Total Proprietary Capital (lines 2 through 15)916 846 092 771 128,173
LONG-TERM DEBT
Bonds (221)256-257 685 196 931 719 082 687
(Less) Reaquired Bonds (222)256-257
Advances from Associated Companies (223)256-257 115,203,000 115,203 000
Other Long-Term Debt (224)256-257 315 600,402 391 538 636
Unamortized Premium on Long-Term Debt (225)257 617 266,500
(Less) Unamortized Discount on Long-Term Debt-Debit (226)709,479 879 744
Total Long-Term Debt (lines 18 through 23)114 548,471 224 211 079
OTHER NONCURRENT LIABILITIES
Obligations Under Capital Leases - Noncurrent (227)394 921 983,184
Accumulated Provision for Property Insurance (228.
Accumulated Provision for Injuries and Damages (228.954,409 790,259
Accumulated Provision for Pensions and Benefits (228.83,419,511 47,353,587
Accumulated Miscellaneous Operating Provisions (228.4)
Accumulated Provision for Rate Refunds (229)
Long-Term Portion of Derivative Instrument Liabilities 174 378 272
Long-Term Portion of Derivative Instrument Liabilities - Hedges 144,457 956,479
Asset Retirement Obligations (230)809 738 528 823
Total Other Noncurrent Liabilities (lines 26 through 34)104 897,414 700 604
CURRENT AND ACCRUED LIABILITIES
Notes Payable (231)
Accounts Payable (232)112 367 144 139 804 777
Notes Payable to Associated Companies (233)
Accounts Payable to Associated Companies (234)980,544 769,180
Customer Deposits (235)463,634 264 115
Taxes Accrued (236)262-263 887 161 112 798
Interest Accrued (237)594,861 18,643,064
Dividends Declared (238)
Matured Long-Term Debt (239)
FERC FORM NO.(rev. 12-03)Page 112
Name of Respondent This Report is:Date of Report Year/Period of Report
A vista Corporation (1)An Original (mo, da, yr)
(2)A Rresubmission 04/18/2007 end of 2006/Q4
COMPARATIVE BALANCE SHEET (LIABILITIES AND OTHER CREDIT(S)ntinued)
Line Current Year Prior Year
No.Ref.End of QuarterNear End Balance
Title of Account Page No.Balance 12/31
(a)(b)(c)(d)
Matured Interest (240)
Tax Collections Payable (241)651 893
Miscellaneous Current and Accrued Liabilities (242)245 923 225 169
Obligations Under Capital Leases-Current (243)281 894 050,181
Derivative Instrument Liabilities (244)652 834 534 971
(Less) Long-Term Portion of Derivative Instrument Liabilities 10,174 378 88,272
Derivative Instrument Liabilities - Hedges (245)144,457 956,479
(Less) Long-Term Portion of Derivative Instrument Liabilities-Hedges 144,457 956,479
Total Current and Accrued Liabilities (lines 37 through 53)263 527 946 203 093 280
DEFERRED CREDITS
Customer Advances for Construction (252)087,069 820 898
Accumulated Deferred Investment Tax Credits (255)266-267 472 344 521 652
Deferred Gains from Disposition of Utility Plant (256)
Other Deferred Credits (253)269 280,631 304 164
Other Regulatory Liabilities (254)278 18,246,960 116 251 545
Unamortized Gain on Reaquired Debt (257)282 969 754 170
Accum. Deferred Income Taxes-Accel. Amort.(281)272-277
Accum. Deferred Income Taxes-Other Property (282)305 474 214 289 242 025
Accum. Deferred Income Taxes-Other (283)211 989 043 228,287 163
Total Deferred Credits (lines 56 through 64)576 833 230 675,181 617
TOTAL LIABILITIES AND STOCKHOLDER EQUITY (lines 16,35,54 and 65)976 653 153 938 314,753
FERC FORM NO.2 (rev. 12-03) Page 113
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2006/Q4
(2) Fi A Resubm ission 04/18/2007
STATEMENT OF INCOME
Quarterly
1. Enter in column (d) the balance for the reporting quarter and in column (e) the balance for the same three month period for the prior year.
2. Report in column (f) the quarter to date amounts for electric utility function; in column (h) the quarter to date amounts for gas utility, and in OJ the
quarter to date amounts for other utility function for the current year quarter.
3. Report in column (g) the quarter to date amounts for electric utility function; in column (i) the quarter to date amounts for gas utility, and in (k) the
quarter to date amounts for other utility function for the prior year quarter.
4. If additional columns are needed place them in a footnote.
Annual or Quarterly if applicable
5. Do not report fourth quarter data in columns (e) and (f)
6. Report amounts for accounts 412 and 413, Revenues and Expenses from Utility Plant Leased to Others, in another utility columnin a similar manner to
a utility department. Spread the amount(s) over lines 2 thru 26 as appropriate. Include these amounts in columns (c) and (d) totals.
7. Report amounts in account 414, Other Utility Operating Income, in the same manner as accounts 412 and 413 above.
8. Report data for lines 8, 10 and 11 for Natural Gas companies using accounts 404., 404., 404., 407.1 and 407.
Line Total Total Current 3 Months Prior 3 Months
No.Current Year to Prior Year to Ended Ended
(Ref.Date Balance for Date Balance for Quarterly Only Quarterly Only
Title of Account Page No.Quarter/Year Quarter/Year No 4th Quarter No 4th Quarter
(a)(b)(c)(d)(e)
1 UTILITY OPERATING INCOME
2 Operating Revenues (400)300-301 319,860 703 237 767,426
Operating Expenses
4 Operation Expenses (401)320-323 957 162 716 905,198,240
5 Maintenance Expenses (402)320-323 805 328 138 187
Depreciation Expense (403)336-337 637 110 085 675
Depreciation Expense for Asset Retirement Costs (403,336-337
8 Amort. & Depl. of Utility Plant (404-405)336-337 717 177 502 043
9 Amort. of Utility Plant Acq. Mj. (406)336-337 99,047 047
Amort. Property Losses, Unrecov Plant and Regulatory Study Costs (407)
Amort. of Conversion Expenses (407)
Regulatory Debits (407.637 368 184 236
(Less) Regulatory Credits (407.4)989,452 785 763
Taxes Other Than Income Taxes (408.262-263 881 930 044 198
Income Taxes - Federal (409.262-263 535 123 778 732
Other(409.262-263 155 970 017 492
Provision for Deferred Income Taxes (410.234, 272-277 330 636 077 269
(Less) Provision for Deferred Income Taxes-Cr. (411.234, 272-277 112 169 4,425,562
Investment Tax Credit Adj, - Net (411.4)266 308 308
(Less) Gains from Disp. of Utility Plant (411.
Losses from Disp. of Utility Plant (411.
(Less) Gains from Disposition of Allowances (411.
Losses from Disposition of Allowances (411.
Accretion Expense (411.10)
TOTAL Utility Operating Expenses (Enter Total of lines 4 thru 24)170 811,476 101 864,486
Net Util Oper Inc (Enter Tot line 2 less 25) Carry to Pg117 line 27 149,049,227 135 902 940
IFIERC FORM NO. 2/3-Q (REV. 02-04)Page 114
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
Avista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/04(2) riA Resubmission 04/18/2007
STATEMENT OF INCOME FOR THE YEAR (Continued)
9. Use page 122 for important notes regarding the statement of income for any account thereof.
10. Give concise explanations concerning unsettled rate proceedings where a contingency exists such that refunds of a material amount may need to be
made to the utility's customers or which may result in material refund to the utility with respect to power or gas purchases. State for each year effected
the gross revenues or costs to which the contingency relates and the tax effects together with an explanation of the major factors which affect the rights
of the utility to retain such revenues or recover amounts paid with respect to power or gas purchases.
11 Give concise explanations concerning significant amounts of any refunds made or received during the year resulting from settlement of any rate
proceeding affecting revenues received or costs incurred for power or gas purches, and a summary of the adjustments made to balance sheet, income
and expense accounts.
12. If any notes appearing in the report to stokholders are applicable to the Statement of Income, such notes may be included at page 122.
13. Enter on page 122 a concise explanation of only those changes in accounting methods made during the year which had an effect on net income
including the basis of allocations and apportionments from those used in the preceding year. Also, give the appropriate dollar effect of such changes.
14. Explain in a footnote if the previous year s/quarters figures are different from that reported in prior reports.
15. If the columns are insufficient for reporting additional utility departments, supply the appropriate account titles report the information in a footnote to
this schedule.
ELECTRIC UTILITY GAS UTILITY OTHER UTILITY
Current Year to Date Previous Year to Date Current Year to Date Previous Year to Date Current Year to Date Previous Year to Date Line
(in dollars)(in dollars)(in dollars)(in dollars)(in dollars)(in dollars)No.
(g)
(h) (i) OJ (k) (I)
514,013 824 535,268,030 443,148,892 369,930,210
34,489,049 30,159,167 316,279 979,020
61,477 791 591 752 159,319 15,493,923
912 961 285 954 804,216 216,089
047 047
337 368 184 236 300 000
989,452 785 763
176 981 205,269 704 949 21,838 929
758,428 567 999 776 695 789,267
847 436 101 948 308 534 915 544
067 991 917 531 737 355 994 800
689 311 566 602 422 858 141 040
49,308 308
672 502 113 683 193 506 498,309,363 418,670,980
125,052 970 111 357 723 23,996,257 545,217
FERC FORM NO.2 (ED. 12-96)Page 115
This ~ort Is: Date of Report(1) ~An Original (Mo, Da, Yr)(2) A Resubmission 04/18/2007
STATEMENT OF INCOME FOR THE YEAR (continued)
TOTAL
Name of Respondent
Avista Corporation
Line
No.
Title of Account
(a)
(Ref.
Page No.
(b)
27 Net Utility Operating Income (Carried forward from page 114)
28 Other Income and Deductions
29 Other Income
30 Nonutilty Operating Income
31 Revenues From Merchandising, Jobbing and Contract Work (415)
32 (Less) Costs and Exp. of Merchandising, Job, & Contract Work (416)
33 Revenues From Nonutility Operations (417)
34 (Less) Expenses of Nonutilily Operations (417.
35 Nonoperating Rental Income (418)
36 Equity in Earnings of Subsidiary Companies (418.
37 Interest and Dividend Income (419)
38 Allowance for Other Funds Used During Construction (419.
39 Miscellaneous Nonoperating Income (421)
40 Gain on Disposition of Property (421.
41 TOTAL Other Income (Enter Total of lines 31 thru40)
42 Other Income Deductions
43 Loss on Disposition of Property (421.
44 Miscellaneous Amortization (425)
45 Donations (426.
46 Life Insurance (426.47 Penalties (426.
48 Exp. for Certain Civic, Political & Related Activities (426.4)
49 Other Deductions (426.
50 TOTAL Other Income Deductions (Total of lines 43 thru 49)
51 Taxes Applic. to Other Income and Deductions
52 Taxes Other Than Income Taxes (408.
53 Income Taxes-Federal (409.
54 Income Taxes-Other (409.
55 Provision for Deferred Inc, Taxes (410.
56 (Less) Provision for Deferred Income Taxes-Cr. (411.
57 InvestmentTax Credit Adj.Net (411.5)
58 (Less) Investment Tax Credits (420)
59 TOTAL Taxes on Other Income and Deductions (Total of lines 52-58)
60 Net Other Income and Deductions (Total of lines 41,50,59)
61 Interest Charges
62 Interest on Long-Term Debt (427)
63 Amort. of Debt Disc. and Expense (428)
64 Amortization of Loss on Reaquired Debt (428.
65 (Less) Amort. of Premium on Debt-Credit (429)
66 (Less) Amortization of Gain on Reaquired Debt-Credit (429.
67 Interest on Debt to Assoc. Companies (430)
68 Other Interest Expense (431)
69 (Less) Allowance for Borrowed Funds Used During Construction-Cr. (432)
70 Net Interest Charges (Total of lines 62 thru 69)
71 Income Before Extraordinary Items (Total of lines 27, 60 and 70)
72 Extraordinary Items
73 Extraordinary Income (434)
74 (Less) Extraordinary Deductions (435)
75 Net Extraordinary Items (Total of line 73 less line 74)
76 Income Taxes-Federal and Other (409.
77 Extraordinary Items After Taxes (line 75 less line 76)
78 Net Income (Total of line 71 and 77)
119
340
340
262-263
262-263
262-263
234 272-277
234,272-277
340
340
262-263
Current Year
(c)
Previous Year
(d)
YearlPeriod of Report
End of 2006/04
Prior 3 Months
Ended
Quarterly Only
No 4th Quarter
237 712
21,998.967
398 103
179,185
",
i0;1 .~'22kii~1;iu~ !"kEH j!i0i (; \~1;0iLL_;i
--.
LE.Ed'! "2f2
~;,
..1Lt~fJ~E;j';i~ff';i.;2.~~)N;i!
~~,
~i0iZ:z~:iJBg;jQ;:!YJi~;, j ;:t;f::'!W&;;,iilid,
: ;
;g~;:i.0 5181.
FERC FORM NO. 21/3-0 (REV. 02-04)Page 117
149,049,227 135,902 940
756 573
127
16,839,461
11,267,952
2,429 542
984
052 579
625
611,524
11,041,049
388 777
138 153
120,288
368 086
972,456
500
052 120
059 980
716,583
160
182,975
874,169
686 972
530
893 627
537 552
159,925
153,385 878
584 900 853,876
912 325 376,668
874 146 853 172
087 684 761 854
387 578 641,404
16,669,962 622 144
938,550 268 237
020,316 509 307
729,883 252,219
884
116 429 202 703
724 805 569 331
934 769 689 303
586 330 112,494
132 859 168 302
132 859 45,168,302
This Page Intentionally Left Blank
Name of Respondent
A vista Corporation
This ~ort Is: Date of Report(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/18/2007
STATEMENT OF RETAINED EARNINGS
1 . Do not report Lines 49-53 on the quarterly version.
2. Report all changes in appropriated retained earnings, unappropriated retained earnings, year to date, and unappropriated
undistributed subsidiary earnings for the year.
3. Each credit and debit during the year should be identified as to the retained earnings account in which recorded (Accounts 433, 436
- 439 inclusive). Show the contra primary account affected in column (b)
4. State the purpose and amount of each reservation or appropriation of retained earnings.
5. List first account 439, Adjustments to Retained Earnings, reflecting adjustments to the opening balance of retained earnings. Follow
by credit, then debit items in that order.
6. Show dividends for each class and series of capital stock.
7. Show separately the State and Federal income tax effect of items shown in account 439, Adjustments to Retained Earnings.
8. Explain in a footnote the basis for determining the amount reserved or appropriated. If such reservation or appropriation is to be
recurrent, state the number and annual amounts to be reserved or appropriated as well as the totals eventually to be accumulated.
9. If any notes appearing in the report to stockholders are applicable to this statement, include them on pages 122-123.
Year/Period of Report
End of 2006/Q4
Line
No.
Item
(a)
UNAPPROPRIATED RETAINED EARNINGS (Account 216)
1 Balance-Beginning of Period
2 Changes
3 Adjustments to Retained Earnings (Account 439)
5 ESOP and Other Adjustment
6 Tax Benefit Received from 401 (k) Dividend Reinvestment Plan
7 Dividends Received from Subsidiaries
Current Previous
QuarterlY ear QuarterlY ear
Contra Primary Year to Date Year to Date
Account Affected Balance Balance
(b)(c)(d)
:; ;;--::",
CE.L, tel, Q"2LL1;d,, .0j8:
;\".~~;
\~~t~~'J;.R~
9 TOTAL Credits to Retained Earnings (Acct. 439)
12 Stock Options Exercised
15 TOTAL Debits to Retained Earnings (Acct. 439)
16 Balance Transferred from Income (Account 433 less Account 418.
17 Appropriations of Retained Earnings (Acct. 436)
22 TOTAL Appropriations of Retained Earnings (Acct. 436)
23 Dividends Declared-Preferred Stock (Account 437)
29 TOTAL Dividends Declared-Preferred Stock (Acct. 437)
30 Dividends Declared-Common Stock (Account 438)
36 TOTAL Dividends Declared-Common Stock (Acct. 438)
37 Transfers from Acct 216., Unapprop. Undistrib. Subsidiary Earnings
38 Balance - End of Period (Total 1 ,29,37)
790
415,237
989,256 15,095,863
6,404,493 15,133,653
160 637 788,018)
160 637 788,018)
293 398 51,779,826
liiiBC, 1i:it~:Z~;j8 j ;1,~2i~JD;!J;tI;.trLf";!UL_
Ui1tZiii:0Kti; '::i
, '
; it i ~.jl.Jt.2Llli;;;(llij;Y;~;!:~U.i;~;E1f
~; ;'
0, li,ts: Lt;. ;i~iLl.L:LL.5 jiLL. ~t.... CLI;f J;; ;,fLI.'i jUIi t.Z.
j"
to.
27,924 168 ( 26,443 242)
924 168
445 216
166,534 217
( 26 443,242)
699 526
130 475 915
FERC FORM NO. 2/3-Q (REV. 02-04)Page 118
Name of Respondent
A vista Corporation
Year/Period of Report
End of 2006/Q4
This ~ort Is: Date of Report(1) ~An Original (Mo, Da, Yr)(2) A Resubmission 04/18/2007
STATEMENT OF RETAINED EARNINGS
1. Do not report Lines 49-53 on the quarterly version.
2. Report all changes in appropriated retained earnings, unappropriated retained earnings, year to date and unappropriated
undistributed subsidiary earnings for the year.
3. Each credit and debit during the year should be identified as to the retained earnings account in which recorded (Accounts 433, 436
- 439 inclusive). Show the contra primary account affected in column (b)
4. State the purpose and amount of each reservation or appropriation of retained earnings.
5. List first account 439, Adjustments to Retained Earnings, reflecting adjustments to the opening balance of retained earnings. Follow
by credit, then debit items in that order.
6. Show dividends for each class and series of capital stock.
7. Show separately the State and Federal income tax effect of items shown in account 439, Adjustments to Retained Earnings.
8. Explain in a footnote the basis for determining the amount reserved or appropriated. If such reservation or appropriation is to be
recurrent, state the number and annual amounts to be reserved or appropriated as well as the totals eventually to be accumulated.
9. If any notes appearing in the report to stockholders are applicable to this statement, include them on pages 122-123.
Item
(a)
APPROPRIATED RETAINED EARNINGS (Account 215)
45 TOTAL Appropriated Retained Earnings (Account 215)
APPROP. RETAINED EARNINGS - AMORT. Reserve, Federal (Account 215.
46 TOTAL Approp. Retained Earnings-Amort. Reserve, Federal (Acct. 215.
47 TOTAL Approp. Retained Earnings (Acct. 215, 215.1) (Total 45,46)
48 TOTAL Retained Earnings (Acct. 215, 215., 216) (Total 38, 47) (216.
UNAPPROPRIATED UNDISTRIBUTED SUBSIDIARY EARNINGS (Account
Report only on an Annual Basis, no Quarterly
49 Balance-Beginning of Year (Debit or Credit)
50 Equity in Earnings for Year (Credit) (Account 418.
51 (Less) Dividends Received (Debit)
52 Subsidiary Expense & Misc Subs Equity Comp
53 Balance-End of Year (Total lines 49 thru 52)
Contra Primary
Account Affected
(b)
Current
QuarterNear
Year to Date
Balance
(c)
Line
No.
Previous
QuarterNear
Year to Date
Balance
(d)
548,121 548,121
548,121
~lffil~C0i;;2222i,B:?lt8~~548,121
548,121
168,082 338
548 121
132 024 036
~~J5~~~~~~~J
804,777
839,461
989,256
545,950
109,032
FERC FORM NO.2 /3-0 (REV. 02-04)Page 119
211 690
611,524)
15,095 863
699,526)
41,804 777
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
Avista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/Q4(2) DA Resubmission 04/18/2007
STATEMENT OF CASH FLOWS
(1) Codes to be used:(a) Net Proceeds or Payments;(b)Bonds, debentures and other long-term debt; (c) Include commercial paper; and (d) Identify separately such items as
investments, fixed assets, intangibles, etc.
(2) Information about noncash investing and financing activities must be provided in the Notes to the Financial statements. Also provide a reconciliation between 'Cash and Cash
Equivalents at End of Period" with related amounts on the Balance Sheet.
(3) Operating Activities - Other: Include gains and losses pertaining to operating activities only. Gains and losses pertaining to investing and financing activities should be reported
in those activities. Show in the Notes to the Financials the amounts of interest paid (net of amount capitalized) and income taxes paid.
(4) Investing Activities: Include at Other (line 31) net cash outflow to acquire other companies. Provide a reconciliation of assets acquired with liabilities assumed in the Notes to
the Financial Statements. Do not include on this statement the dollar amount of leases capitalized per the USofA General Instruction 20; instead provide a reconciliation of the
dollar amount of leases capitalized with the plant cost.
Line Description (See Instruction No.1 for Explanation of Codes)Current Year to Date Previous Year to Date
No.QuarterlY ear QuarterlY ear
(a)(b)(c)
Net Cash Flow from Operating Activities:
Net Income (Line 78(c) on page 117)73,132,859 168,302
Noncash Charges (Credits) to Income:
Depreciation and Depletion 354,287 79,158 362
Amortization of deferred power and natural gas costs 326 822 629,580
6 Amortization of debt expense 741 314 761 526
Amortizaton of investment in exchange power 2,450 031 2,450 031
8 Deferred Income Taxes (Net)465 046 594 223
9 Investment Tax Credit Adjustment (Net)308 49,308
Net (Increase) Decrease in Receivables 519 009 54,565,111
Net (Increase) Decrease in Inventory 203,045 674,661
Net (Increase) Decrease in Allowances Inventory
Net Increase (Decrease) in Payables and Accrued Expenses 118,183 447 322
Net (Increase) Decrease in Other Regulatory Assets 061,549 8,426,825
Net Increase (Decrease) in Other Regulatory Liabilities 175 736 618 782
(Less) Allowance for Other Funds Used During Construction 429 542 078,080
(Less) Undistributed Earnings from Subsidiary Companies 839 461 611 523
Other (provide details in footnote):376 700 816,795
Gain on sale of property 99.559 398,103
Net change in receivables allowance 497,564 504,630
Change in other noncurrent assets and liabilities 672 181 269.258
Net Cash Provided by (Used in) Operating Activities (Total 2 thru 21)172,942,538 154 967 092
Cash Flows from Investment Activities:
Construction and Acquisition of Plant (including land):
Gross Additions to Utility Plant (less nuclear fuel)156,952 633 259 675,718
Gross Additions to Nuclear Fuel
Gross Additions to Common Utility Plant
Gross Additions to Nonutility Plant
(Less) Allowance for Other Funds Used During Construction
Other (provide details in footnote):
Cash Outflows for Plant (Total of lines 26 thru 33)156 952 633 259 675,718
Acquisition of Other Noncurrent Assets (d)
Proceeds from Disposal of Noncurrent Assets (d)657,770 014 769
Investments in and Advances to Assoc. and Subsidiary Companies
Contributions and Advances from Assoc. and Subsidiary Companies 36,646,304 785,415
Disposition of Investments in (and Advances to)
Associated and Subsidiary Companies
Purchase of Investment Securities (a)
Proceeds from Sales of Investment Securities (a)
FERC FORM NO.2 (ED. 12-96)Page 120
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
STATEMENT OF CASH FLOWS
(1) Codes to be used:(a) Net Proceeds or Payments;(b)Bonds, debentures and other long-term debt; (c) Include commercial paper; and (d) Identify separately such items as
investments, fixed assets, intangibles, etc.
(2) Information about noncash investing and financing activities must be provided in the Notes to the Financial statements. Also provide a reconciliation between "Cash and Cash
Equivalents at End of Period" with related amounts on the Balance Sheet.
(3) Operating Activities - Other: Include gains and losses pertaining to operating activities only. Gains and losses pertaining to investing and financing activities should be reported
in those activities, Show in the Notes to the Financials the amounts of interest paid (net of amount capitalized) and income taxes paid.
(4) Investing Activities: Include at Other (line 31) net cash outflow to acquire other companies. Provide a reconciliation of assets acquired with liabilities assumed in the Notes to
the Financial Statements. Do not include on this statement the dollar amount of leases capitalized per the USofA General Instruction 20; instead provide a reconciliation of the
dollar amount of leases capitalized with the plant cost.
Line Description (See Instruction No.1 for Explanation of Codes)Current Year to Date Previous Year to Date
No.OuarterNear OuarterN ear
(a)(b)(c)
Loans Made or Purchased
Collections on Loans 15,263 678
Net (Increase) Decrease in Receivables
Net (Increase) Decrease in Inventory
Net (Increase) Decrease in Allowances Held for Speculation
Net Increase (Decrease) in Payables and Accrued Expenses
Other (provide details in footnote):
Changes in other property and investments 763,324 540 127
Proceeds from sale of utility property claim 5,483,780
Net Cash Provided by (Used in) Investing Activities
Total of lines 34 thru 55)114 912 840 222 320 729
Cash Flows from Financing Activities:
Proceeds from Issuance of:
Long-Term Debt (b)149 778 000 149,632 500
Preferred Stock
Common Stock 393 784 570 795
Other (provide details in footnote):
Net Increase in Short-Term Debt (c)
Other (provide details in footnote):
Cash received in interest rate swap agreement 4,445,000
Cash Provided by Outside Sources (Total 61 thru 69)238,171 784 155 648 295
Payments for Retirement of:
Long-term Debt (b)197 231 550 440,903
Preferred Stock 750 000 750 000
Common Stock
Premiums paid for the redemption of long-term debt 425 996 826 430
Long-term debt and short-term borrowing issuance costs 5,435 618 152 802
Net Decrease in Short-Term Debt (c)59,000 000 000,000
Cash paid in interest rate swap agreement 738 000
Dividends on Preferred Stock
Dividends on Common Stock 927 206 -26,443 249
Net Cash Provided by (Used in) Financing Activities
(Total of lines 70 thru 81)
Net Increase (Decrease) in Cash and Cash Equivalents
(Total of lines 22 57 and 83)693 112 318 726
Cash and Cash Equivalents at Beginning of Period 363 195 955,531
Cash and Cash Equivalents at End of period 670 083 363 195
FERC FORM NO.2 (ED. 12-96)Page 121
Name of Respondent
Avista Corporation
Date of Report
04/18/2007
Year/Period of Report
End of 2006104
This Report Is:
(1) 129 An Original(2) D A Resubmisslon
NOTES TO FINANCIAL STATEMENTS
1. Use the space below for important notes regarding the Balance Sheet, Statement of Income for the year, Statement of Retained
Earnings for the year, and Statement of Cash Flows, or any account thereof. Classify the notes according to each basic statement,
providing a subheading for each statement except where a note is applicable to more than one statement.
2. Furnish particulars (details) as to any significant contingent assets or liabilities existing at end of year, including a brief explanation of
any action initiated by the Internal Revenue Service involving possible assessment of additional income taxes of material amount, or of
a claim for refund of income taxes of a material amount initiated by the utility. Give also a brief explanation of any dividends in arrears
on cumulative preferred stock.
3. For Account 116, Utility Plant Adjustments, explain the origin of such amount, debits and credits during the year, and plan of
disposition contemplated, giving references to Cormmission orders or other authorizations respecting classification of amounts as plant
adjustments and requirements as to disposition thereof.
4. Where Accounts 189, Unamortized Loss on Reacquired Debt, and 257, Unamortized Gain on Reacquired Debt, are not used, give
an explanation, providing the rate treatment given these items. See General Instruction 17 of the Uniform System of Accounts.
5. Give a concise explanation of any retained earnings restrictions and state the amount of retained earnings affected by such
restrictions.
6. If the notes to financial statements relating to the respondent company appearing in the annual report to the stockholders are
applicable and furnish the data required by instructions above and on pages 114-121 , such notes may be included herein.
7. For the 30 disclosures, respondent must provide in the notes sufficient disclosures so as to make the interim information not
misleading. Disclosures which would substantially duplicate the disclosures contained in the most recent FERC Annual Report may be
omitted.
8. For the 30 disclosures, the disclosures shall be provided where events subsequent to the end of the most recent year have occurred
which have a material effect on the respondent. Respondent must include in the notes significant changes since the most recently
completed year in such items as: accounting principles and practices; estimates inherent in the preparation of the financial statements;
status of long-term contracts; capitalization including significant new borrowings or modifications of existing financing agreements; and
changes resulting from business combinations or dispositions. However were material contingencies exist, the disclosure of such
matters shall be provided even though a significant change since year end may not have occurred.9. Finally, if the notes to the financial statements relating to the respondent appearing in the annual report to the stockholders are
applicable and furnish the data required by the above instructions, such notes may be included herein.
PAGE 122 INTENTIONALLY LEFT BLANK
SEE PAGE 123 FOR REOUIRED INFORMATION.
FERC FORM NO.2 (ED. 12-96)Page 122
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Avista Corporation (Avista Corp. or the Company) is an energy company engaged in the generation, transmission and distribution of
energy as well as other energy-related businesses. A vista Corp. generates, transmits and distributes electricity in parts of eastern
Washington and northern Idaho. In addition, Avista Corp. has electric generating facilities in western Montana and northern Oregon.
Avista Corp. also provides natural gas distribution service in parts of eastern Washington and northern Idaho, as well as parts of
northeast and southwest Oregon. Avista CapitaJ, Inc. (A vista Capital), a wholly owned subsidiary of Avista Corp., is the parent
company of all of the subsidiary companies in the non-utiJity business segments.
The Company s operations are exposed to risks including, but not limited to:
price and supply of purchased power, fuel and natural gas
regulatory recovery of power and natural gas costs and capital investments,
streamflow and weather conditions
effects of changes in JegisJative and governmental regulations
changes in regulatory requirements,
availability of generation facilities,
. competition
technoJogy, and
avaiJabiJity of funding.
Also, like other utilities, the Company s facilities and operations are exposed to telTorism risks or other maJicious acts. In addition, the
energy business exposes the Company to the financial, liquidity, credit and price risks associated with wholesale purchases and sales of
energy commodities.
Basis of Reporting
The financiaJ statements include the assets, liabiJities, revenues and expenses of the Company. As required by the Federal Energy
Regulatory Commission (FERC), the Company accounts for its investment in majority-owned subsidiaries on the equity method rather
than consolidating the assets, liabiJities, revenues, and expenses of these subsidiaries, as required by accounting principJes generally
accepted in the United States of America. The accompanying financial statements include the Company s proportionate share of utility
pJant and related operations resulting from its interests in jointly owned pJants. In addition, under the requirements of the FERC, there
are differences from accounting principJes generaIJy accepted in the United States of America in the presentation of (1) CUlTent
portions of long-term debt, short-term bolTowings, and prefelTed stock, (2) assets and JiabiJities for cost of removaJ of assets, (3) assets
held for sale, (4) regulatory assets and liabilities, and (5) comprehensive income.
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect amounts reported in the financial statements. Significant
estimates include:
determining the market value of energy commodity assets and liabilities,
pension and other postretirement benefit plan obligations
contingent Jiabilities
recoverability of regulatory assets
stock-based compensation, and
unbilled revenues.
Changes in these estimates and assumptions are considered reasonabJy possible and may have a material effect on the financial
statements and thus actuaJ results could differ from the amounts reported and disclosed herein.
System of Accounts
The accounting records of the Company s utiJity operations are maintained in accordance with the uniform system of accounts
prescribed by the FederaJ Energy Regulatory Commission (FERC) and adopted by the appropriate state regulatory commissions.
I FERC FORM NO.(ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
Regulation
The Company is subject to state regulation in Washington, Idaho, Montana and Oregon. The Company is also subject to federal
regulation by the FERC.
Operating Revenues
Revenues related to the sale of energy are generally recorded when service is rendered or energy is delivered to customers. The
determination of the energy sales to individual customers is based on the reading of their meters, which occurs on a systematic basis
throughout the month. At the end of each calendar month, the amount of energy delivered to customers since the date of the last meter
reading is estimated and the corresponding unbilJed revenue is estimated and recorded. Accounts receivable incJudes unbilJed energy
revenues of $21.7 milJion (net of $51.6 million of unbilJed receivables sold) as of December 31 , 2006 and $13.1 milJion (net of $57.
million ofunbilJed receivables soJd) as of December 31 , 2005. See Note 3 for information related to the saJe of accounts receivable.
Advertising Expenses
The Company expenses advertising costs as incurred. Advertising expenses were not a materiaJ portion of the Company s operating
expenses in 2006, 2005 and 2004.
Taxes Other Than Income Taxes
Taxes other than income taxes incJude state excise taxes, city occupational and franchise taxes, real and personal property taxes and
certain other taxes not based on net income. These taxes are generally based on revenues or the vaJue of property. Utility related taxes
collected from customers (primarily state excise taxes and city utility taxes) are recorded as operating revenue and expense and totaled
$48.3 milJion in 2006, $43.1 milJion in 2005 and $35.0 milJion in 2004.
Income Taxes
The Company and its eligible subsidiaries file consolidated federal income tax returns. Subsidiaries are charged or credited with the
tax effects of their operations on a stand-alone basis. The Internal Revenue Service (IRS) has examined the Company s 2001, 2002
and 2003 federal income tax returns. Despite those tax years stilJ remaining open, all issues have been resolved with the exception of
certain indirect overhead costs (see Note 10).
The Company accounts for income taxes under SFAS No. 109, "Accounting for Income Taxes." Under SFAS No. 109, a deferred tax
asset or liabiJity is determined based on the enacted tax rates that wilJ be in effect when the differences between the financial statement
carrying amounts and tax basis of existing assets and liabiJities are expected to be reported in the Company s consoJidated income tax
returns. The deferred tax expense for the period is equal to the net change in the deferred tax asset and liability accounts from the
beginning to the end of the period. The effect on deferred taxes of a change in tax rates is recognized in income in the period that
incJudes the enactment date. Deferred tax liabiJities and regulatory assets have been established for tax benefits flowed through to
customers as prescribed by the respective regulatory commissions.
Stock-Based Compensation
Prior to January 1 2006, the Company followed the discJosure onJy provisions of SFAS No. 123
, "
Accounting for Stock-Based
Compensation." Accordingly, employee stock options were accounted for under Accounting Principle Board Opinion (APB) No. 25
Accounting for Stock Issued to Employees." Stock options are granted at exercise prices not less than the fair value of common stock
on the date of grant. Avista Corp. has not granted any stock options since 2003. Under APB No. 25, no compensation expense was
recognized pursuant to the Company s stock option plans. However, the Company recognized compensation expense related to
performance-based share awards. The Company adopted SFAS No. 123R
, "
Share-Based Payment " on January 1,2006, which has
resulted in changes to stock compensation expense recognition. See Note 2 and Note 22 for further information. The Company
adopted SFAS No. 123R using the modified prospective method and, accordingly, financial statement amounts for prior periods
presented have not been restated to reflect the fair vaJue method of recognizing compensation expense relating to share-based
payments.
If compensation expense for the Company s stock-based employee compensation plans were determined consistent with SF AS No.
123, net income and earnings per common share would have been the following pro forma amounts for the years ended December 31
(prior to the adoption of SFAS No. 123R):
I FERC FORM NO.2 (ED. 12-88)Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
2005 2004
Net income (dollars in thousands):
As reported
Add: Total stock-based employee compensation
expense induded in net income, net of tax
Deduct: Total stock-based employee compensation
expense determined under the fair value
method for all awards, net of tax
Pro forma
Basic and diluted earnings per common share:
Basic as reported
Diluted as reported
Basic pro forma
Diluted pro forma
$45,168 $35,154
211
ibWl (2,033)
121
$0.
$0.
$0.
$0.
$0.
$0.
$0.
$0.
Earnings Per Common Share
Basic earnings per common share is computed by dividing income available for common stock by the weighted average number of
common shares outstanding for the period. Diluted earnings per common share is calculated by dividing income available for common
stock by diluted weighted average common shares outstanding during the period, induding common stock equivaJent shares
outstanding using the treasury stock method, unless such shares are anti-dilutive. Common stock equivalent shares indude shares
issuable upon exercise of stock options and contingent stock awards. See Note 21 for earnings per common share calcuJations.
Cash and Cash Equivalents
For the purposes of the Statements of Cash Flows, the Company considers all temporary investments with a maturity of three months or
less when purchased to be cash equivalents. Cash and cash equivalents indude cash deposits from counterparties. See Note 6 for
further information related to cash deposits from counterparties.
Allowance for Doubtful Accounts
The Company maintains an allowance for doubtful accounts to provide for estimated and potentiaJ losses on accounts receivable. The
Company determines the allowance for utility and other customer accounts receivable based on historicaJ write-offs as compared to
accounts receivable and operating revenues. Additionally, the Company establishes specific allowances for certain individual
accounts. The following table presents the activity in the allowance for doubtful accounts during the years ended December 31
(dollars in thousands):
Allowance as of the beginning of the year
Additions expensed during the year
Net deductions
Allowance as of the end of the year
2006
228
888
(3,386)
$2.730
2005
810
752
(2,334)
$3.228
2004
281
3,195
666)
$2.810
Materials and Supplies, Fuel Stock and Natural Gas Stored
Inventories of materials and supplies, fuel stock and natural gas stored are recorded at the lower of cost or market, primarily using the
average cost method.
Utility Plant in Service
The cost of additions to utiJity plant in service, induding an allowance for funds used during construction and replacements of units of
property and improvements, is capitalized. Costs of depreciable units of property retired plus costs of removal Jess salvage are charged
to accumulated depreciation.
Allowance for Funds Used During Construction
The AJlowance for Funds Used During Construction (AFUDC) represents the cost of both the debt and equity funds used to finance
utility plant additions during the construction period. In accordance with the uniform system of accounts prescribed by regulatory
authorities, AFUDC is capitalized as a part of the cost of utility plant and the debt related portion is credited currently as a non-cash
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubm ission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
item in the Statements of Income. The Company generally is permitted, under established regulatory rate practices, to recover the
capitalized AFUDC, and a fair return thereon, through its inclusion in rate base and the provision for depreciation after the related
utility plant is placed in service. Cash inflow related to AFUDC generally does not occur until the related utility plant is placed in
service and incJuded in rate base. The effective AFUDC rate was 9.11 percent in 2006 and 9.72 percent for 2005 and 2004. The
Company s AFUDC rates do not exceed the maximum allowabJe rates as determined in accordance with the requirements of regulatory
authorities.
Depreciation
For utility operations, depreciation expense is estimated by a method of depreciation accounting utilizing unit rates for generation
pJants and composite rates for other utility plant. Such rates are designed to provide for retirements of properties at the expiration of
their service lives. The rates for hydroelectric plants incJude annuity and interest components, in which the interest component is 9
percent. For utility operations, the ratio of depreciation provisions to average depreciable property was 2.89 percent in 2006,
percent in 2005 and 2.92 percent in 2004.
The average service lives for the following broad categories of utility property are:
electric thermal production - 28 years
hydroelectric production - 77 years,
electric transmission - 42 years
electric distribution - 47 years, and
natural gas distribution property - 36 years.
The Company recovers certain asset retirement costs through rates charged to customers as a portion of its depreciation expense for
which the Company has not recorded asset retirement obligations (see Note 8). These costs do not represent legal or contractual
obligations.
Regulatory Deferred Charges and Credits
The Company prepares its financial statements in accordance with the provisions of SPAS No. 71
, "
Accounting for the Effects of
Certain Types of Regulation." The Company prepares its financial statements in accordance with SPAS No. 71 because:
rates for regulated services are established by or subject to approvaJ by an independent third-party regulator
the regulated rates are designed to recover the cost of providing the regulated services, and
in view of demand for the regulated services and the level of competition, it is reasonable to assume that rates can be charged
to and collected from customers at leveJs that wiJI recover costs.
SPAS No. 71 requires the Company to reflect the impact of regulatory decisions in its financiaJ statements. SPAS No. 71 requires that
certain costs and/or obligations (such as incurred power and natural gas costs not currently recovered through rates, but expected to be
recovered in the future) are reflected as deferred charges or credits on the Balance Sheets. These costs and/or obligations are not
reflected in the statement of income until the period during which matching revenues are recognized.
If at some point in the future the Company determines that it no longer meets the criteria for continued application of SF AS No. 71 for
all or a portion of its regulated operations, the Company could be:
required to write off its regulatory assets, and
precJuded from the future deferral of costs not recovered through rates at the time such costs are incurred, even if the
Company expected to recover such costs in the future.
The Company s primary regulatory assets incJude:
power and natural gas deferrals
investment in exchange power
regulatory asset for deferred income taxes
unamortized debt expense
demand side management programs,
conservation programs, and
unfunded pensions and other postretirement benefits.
I FERC FORM NO.(ED. 12-88)Page 123.4
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
Regulatory liabiJities include utility plant retirement costs, liabilities created when the Centralia Power Plant was soJd
liabilities offsetting net utiJity energy commodity derivative assets (see Note 4 for further information), and the gain on the generaJ
office building salelleaseback.
Investment in Exchange Power-Net
The investment in exchange power represents the Company s previous investment in Washington Public Power Supply System Project
3 (WNP-3), a nuclear project that was terminated prior to completion. Under a settlement agreement with the BonnevilJe Power
Administration in 1985, Avista Corp. began receiving power in 1987, for a 32.year period, related to its investment in WNP-
Through a settlement agreement with the Washington Utilities and Transportation Commission (WUTC) in the Washington
jurisdiction, A vista Corp. is amortizing the recoverable portion of its investment in WNP-3 (recorded as investment in exchange
power) over a 32.5 year period beginning in 1987. For the Idaho jurisdiction, Avista Corp. has fulJy amortized the recoverable portion
of its investment in exchange power.
Unamortized Debt Expense and Unamortized Loss on Reacquired Debt
Unamortized debt expense includes debt issuance costs that are amortized over the life of the related debt, as welJ as premiums paid to
repurchase debt, which are amortized over the average remaining maturity of outstanding debt in accordance with regulatory
accounting practices under SFAS No. 71. These costs are recovered through retail rates as a component of interest expense.
Power Cost Deferrals and Recovery Mechanisms
Deferred power supply costs are recorded as a deferred charge on the Balance Sheets for future review and the opportunity for
recovery through retaiJ rates. The power supply costs deferred include certain differences between actuaJ power supply costs incurred
by Avista Corp. and the costs included in base retail rates. This difference in power supply costs primarily results from changes in:
. short-term wholesale market prices,
the level of hydroeJectric generation, and
the level of thermal generation (including changes in fuel prices).
In Washington, the Energy Recovery Mechanism (ERM) alJows Avista Corp. to increase or decrease electric rates periodicalJy with
WUTC approval to reflect changes in power supply costs. The ERM is an accounting method used to track certain differences
between actual power supply costs and the amount included in base retail rates for Washington customers. The initiaJ amount of
power suppJy costs in excess or below the JeveJ in retail rates, which the Company either incurs e cost o , or receIves enetIt
from, is referred to as the deadband. Avista Corp. accrues interest on deferred power costs in the Washington jurisdiction at a rate,
which is adjusted semi-annualJy, of 8.25 percent as of December 31, 2006. Total deferred power costs for Washington customers
were $70.2 million as of December 31, 2006 and $96.2 million as of December 31, 2005.
In June 2006, the WUTC approved a settlement agreement between the Company, the staff of the WUTC, the Industrial Customers of
Northwest Utilities and the office of Public Counsel Section of the Washington Attorney General's Office, representing alJ parties in
the Company s ERM proceeding. The settlement agreement provides for the continuation of the ERM with certain agreed-upon
modifications and is effective as of January 1 2006. The settling parties have agreed to review the ERM after five years.
The settlement agreement modified the ERM such that the Company s annual deadband was reduced from $9.0 million to $4.0 million
and the Company will incur the cost of, or receive the benefit from, 100 percent of this initial power suppJy cost variance. Annual
power supply cost variances between $4.0 million and $10.0 miJlion are shared equalJy between the Company and its customers. As
such, 50 percent of the annual power supply cost variance in this range is deferred for future surcharge or rebate to the Company
customers and the remaining 50 percent is an expense of, or benefit to, the Company. Once the annual power supply cost variance
from the amount included in base rates exceeds $10.0 miJlion, 90 percent of the cost variance is deferred for future surcharge or rebate.
The remaining 10 percent of the variance beyond $10.0 million is an expense of, or benefit to, the Company without affecting current
or future customer rates. The folJowing table summarizes the historicaJ (prior to January 1 2006) and modified ERM (effective
January 1 2006):
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
Annual Power Supply
Cost Variability
Historical ERM:
+/- $0 - $9 million
+/- excess over $9 million
Modified ERM:
+/- $0 - $4 million
+/- between $4 million - $10 million
+/- excess over $10 million
Deferred for Future
Surcharge or Rebate
to Customers
Expense or Benefit
to the Co
90%
100%
10%
50%
90%
100%
50%
10%
Under the ERM, Avista Corp. makes an annual filing to provide the opportunity for the WUTC and other interested parties to review
the prudence of and audit the ERM deferred power cost transactions for the prior calendar year. The ERM provides for a 90-day
review period for the filing; however, the period may be extended by agreement of the parties or by WUTC order. In June 2006, the
WUTC issued an order, which approved the recovery of the $4.1 million of deferred power costs incurred for 2005.
Avista Corp. has a power cost adjustment (PCA) mechanism in Idaho that allows it to modify electric rates periodically with Idaho
Public Utilities Commission (IPUC) approval. Under the PCA mechanism, A vista Corp. defers 90 percent of the difference between
certain actual net power supply expenses and the amount included in base retail rates for Idaho customers. Avista Corp. accrues
interest on deferred power costs in the Idaho jurisdiction at a rate, which is adjusted annually, of 3.0 percent on current year deferrals
and 5.0 percent on carryover balances as of December 31 , 2006. TotaJ deferred power costs for Idaho customers were $9.4 miJlion
of December 31 , 2006 and $8.0 million as of December 31,2005.
Natural Gas Cost Deferrals and Recovery Mechanisms
Natural gas commodity costs in excess of, or which fall below, the amount recovered in current retail rates are deferred and recovered
or refunded as a pass-through to customers in future periods, subject to applicable regulatory review and approvaJ, through adjustments
to rates. Currently, purchased gas adjustments provide for the deferral and future recovery or refund of 100 percent of the difference
between actuaJ commodity costs and the amount recovered in current retail rates in Washington and Idaho. In Oregon, Avista Corp.
receives recovery of 100 percent of the cost of natural gas for which the price is fixed through hedge transactions, and included in retail
rates through the annual purchased gas cost adjustment filing. With respect to the unhedged portion of customer loads in Oregon
A vista Corp. defers 90 percent of the difference between actuaJ prices and the amount recovered in current retail rates. Total deferred
natural gas costs were $18.3 million as of December 31, 2006 and $43.4 million as of December 31 2005.
Reclassifications
Certain prior period amounts were reclassified to conform to current statement format. These reclassifications were made for
comparative purposes and have not affected previously reported totaJ net income or stockholders' equity.
NOTE 2. NEW ACCOUNTING STANDARDS
In December 2004, the FASB issued SF AS No. 123R
, "
Share-Based Payment " which supersedes APB No. 25 and SF AS No. 123 and
their related implementation guidance. This statement establishes revised standards for the accounting for transactions in which the
Company exchanges its equity instruments for goods or services with a primary focus on transactions in which the Company obtains
employee services in share-based payment transactions. The statement requires that the compensation cost relating to share-based
payment transactions be recognized in financial statements based on the fair value of the equity or liability instruments issued. The
Company implemented the provisions of this statement effective January 1 , 2006 using the modified prospective method and
accordingly, financial statement amounts for prior periods presented have not been restated to reflect the fair value method of
recognizing compensation expense relating to share-based payments. Under the modified prospective approach, SPAS 123R applies to
all of the Company s unvested stock-based payment awards beginning January 1, 2006 and all prospective awards. For 2006, the
Company recorded $4.0 million (pre-tax) of stock-based compensation expense. As a result of implementing SF AS No. 123R, the
Company s income before income taxes increased $1.5 million and net income increased $1.0 million as compared to the amounts that
the Company would have recorded for stock-based compensation expense under prior accounting rules. The impact on basic and
diluted earnings per share was an increase of $0.02 per share. In addition, SF AS No. 123R requires the Company to classify tax
benefits resulting from tax deductions in excess of stock-based compensation expense recognized as a financing activity. This amount
was not significant to cash flows and is included in the line item proceeds from issuance of common stock on the Statement of Cash
I FERC FORM NO.(ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
FJows. See Note 22 for further information related to stock compensation plans.
In June 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes-an Interpretation of FASB
Statement No. 109," (FIN 48) which provides guidance for the recognition and measurement of a tax position taken or expected to be
taken in a tax return. FIN 48 requires the evaluation of a tax position as a two-step process. First, the Company wiJI be required to
determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related
appeaJs or litigation processes, based on the technicaJ merits of the position. If the tax position meets the "more likely than not"
recognition threshold, it is then measured and recorded at the largest amount of benefit that is greater than 50 percent JikeJy of being
realized upon ultimate settlement. The Company wiJI be required to adopt FIN 48 in the fJIst quarter of 2007. The Company does not
expect the adoption of FIN 48 to have a material effect on its fmanciaJ condition and resuJts of operations.
In September 2006, the FASB issued SPAS No. 157, "Fair Value Measurements " which provides enhanced guidance for using fair
value to measure assets and liabilities. This statement also expands disclosures about fair value measurements. This statement applies
under other accounting pronouncements that require or permit fair value measurements. . However, the statement does not require any
new fair value measurements. This statement emphasizes that fair value is a market-based measurement and not an entity-specific
measurement. Therefore a fair value measurement should be determined based on the assumptions that market participants would use
in pricing an asset or liabiJity. The statement establishes a fair value hierarchy that prioritizes the information used to develop those
assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to
unobservable data. The Company wiJI be required to adopt SPAS No. 157 in 2008. The Company is evaluating the impact SPAS No.
157 wiJI have on its financial condition and results of operations.
In September 2006, the FASB issued SPAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement
Plans - an amendment ofFASB Statements No. 87, 88 , 106, and 132 (R)." SPAS No. 158 required the Company to recognize the
overfunded or underfunded status of defined benefit postretirement plans in the Company s Balance Sheet measured as the difference
between the fair value of pJan assets and the benefit obligation as of December 31 , 2006. For a pension pJan, the benefit obligation is
the projected benefit obligation; for any other postretirement benefit plans, the benefit obJigation is the accumulated postretirement
benefit obligation. Previously, the Company only recognized the underfunded status of defined benefit pension plans as the difference
between the fair value of plan assets and the accumulated benefit obligation. As the Company has historically recovered and currentJy
recovers its pension and other postretirement benefit costs related to its reguJated operations in retail rates, the Company has recorded
a regulatory asset for that portion of its pension and other postretirement benefit funding deficiency. As such, the underfunded status
of the Company s pension and other postretirement benefit pJans under SPAS No. 158 has resulted in the recognition as of December
2006 of:
a liability of $60.1 million (associated deferred taxes of $21.0 miJIion) for pensions and other postretirement benefits
a reguJatory asset of $54.2 million (associated deferred taxes of $19.0 million) for pensions and other postretirement benefits
an increase to accumulated other comprehensive loss of $3.8 million (net of taxes of $2.1 miJIion), and
the removal of the intangible pension asset of $3.7 million (was included in other deferred charges).
As such, the total effect on the deferred income tax liability for the adoption of SPAS No. 158 was a net decrease of $2.1 million. The
adoption of this statement did not have any effect on the Company s net income.
In September 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 108, "Considering
the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year FinanciaJ Statements." SAB No. 108
addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year
financial statements. SAB No. 108 requires companies to quantify misstatements using a balance sheet and income statement approach
and to evaluate whether either approach results in quantifying an error that is materiaJ in Jight of relevant quantitative and qualitative
factors. The adoption of SAB No. 108 in the fourth quarter of 2006 did not have any effect on the Company s resuJts of operations or
financial condition.
In February 2007, the FASB issued SPAS No. 159, "The Fair Value Option for Financial Assets and FinanciaJ LiabiJities." This
statement permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses
on items for which the fair value option has been elected wouJd be reported in net income. The Company wiJI be required to adopt
SPAS No. 159 in 2008. The Company is evaluating the impact SPAS No. 159 wiJI have on its financial condition and resuJts of
operations.
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubm ission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 3. ACCOUNTS RECEIVABLE SALE
Avista ReceivabJes Corporation (ARC) is a wholJy owned, bankruptcy-remote subsidiary of Avista Corp. formed for the purpose of
acquiring or purchasing interests in certain accounts receivabJe, both billed and unbilled, of the Company. On March 20, 2006, A vista
Corp., ARC and a third-party financial institution amended a Receivables Purchase Agreement. The most significant amendment was
to extend the termination date from March 21, 2006 to March 20, 2007. Under the Receivables Purchase Agreement, ARC can selJ
without recourse, on a revolving basis, up to $85.0 million of those receivabJes. ARC is obligated to pay fees that approximate the
purchaser s cost of issuing commercial paper equal in value to the interests in receivables soJd. The amount of such fees is included in
other operating expenses of Avista Corp. The Receivables Purchase Agreement has financiaJ covenants, which are substantially the
same as those of Avista Corp.'s $320.0 million committed line of credit (see Note 12). At each of December 31 , 2006 and 2005
$85.0 million in accounts receivables were soJd under this revolving agreement.
NOTE 4. ENERGY COMMODITY DERIVATIVE ASSETS AND LIABILITIES
SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires the recording of alJ derivatives as either assets or
liabilities on the balance sheet measured at estimated fair value and the recognition of the umealized gains and Josses. In certain
defined conditions, a derivative may be specificalJy designated as a hedge for a particular exposure. The accounting for derivatives
depends on the intended use of the derivatives and the resulting designation.
Avista Corp. enters into forward contracts to purchase or sell eJectricity and natural gas. Under these forward contracts, Avista Corp.
commits to purchase or selJ a specified amount of energy at a specified time, or during a specified period, in the future. Certain of
these forward contracts are considered derivative instruments. Avista Corp. also records derivative commodity assets and liabilities
for over-the-counter and exchange-traded derivative instruments as welJ as certain Jong-term contracts. These contracts are entered
into as part of A vista Corp. ' s management of its Joads and resources as discussed in Note 5. In conjunction with the issuance of SF
No. 133, the WUTC and the IPUC issued accounting orders authorizing Avista Corp. to offset any derivative assets or liabiJities with
a regulatory asset or liability. This accounting treatment is intended to defer the recognition of mark- to-market gains and losses on
energy commodity transactions untiJ the period of settJement. The orders provide for Avista Corp. to not recognize the umealized
gain or loss on utility derivative commodity instruments in the Statements of Income. Realized gains or losses are recognized in the
period of settlement, subject to approval for recovery through retail rates. Realized gains and Josses, subject to regulatory approval
result in adjustments to retaiJ rates through purchased gas cost adjustments, the ERM and the PCA mechanism.
SubstantialJy alJ forward contracts to purchase or sell power and natural gas are recorded as assets or liabilities at market value with an
offsetting regulatory asset or liability. Contracts that are not considered derivatives under SFAS No. 133 are generalJy accounted for
at cost until they are settled or realized, unJess there is a decline in the fair value of the contract that is determined to be other than
temporary.
NOTE 5. ENERGY COMMODITY TRADING
The Company is exposed to risks relating to, but not limited to:
changes in certain commodity prices
interest rates,
foreign cUITency, and
counterparty performance.
Avista Corp. utilizes derivative instruments, such as forwards, futures, swaps and options in order to manage the various risks relating
to these exposures. A vista Corp. uses a variety of techniques to manage risks for their energy resources and whoJesale energy market
activities. The Company has risk management policies and procedures to manage these risks, both quaJitative and quantitative. The
Company s Risk Management Committee establishes the Company s risk management policies and procedures and monitors
compliance. The Risk Management Committee is comprised of certain Company officers and other individuals and is overseen by the
Audit Committee of the Company s Board of Directors.
A vista Corp. engages in an ongoing process of resource optimization, which involves the economic selection from available resources
to serve Avista Corp.'s load obligations and uses its existing resources to capture available economic vaJue. Avista Corp. sells and
purchases wholesale electric capacity and energy and fuel as part of the process of acquiring resources to serve its load obligations.
These transactions range from terms of one hour up to multiple years. Avista Corp. makes continuing projections of:
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmisslon 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
loads at various points in time (ranging from one hour to multiple years) based on, among other things, estimates of factors
such as customer usage and weather, as welJ as historicaJ data and contract terms, and
resource avaiJability at these points in time based on, among other things, estimates of streamflows, avaiJability of generating
units, historic and forward market information and experience.
On the basis of these projections, A vista Corp. makes purchases and sales of energy to match expected resources to expected electric
load requirements. Resource optimization involves generating pJant dispatch and scheduling avaiJable resources and also includes
transactions such as:
purchasing fuel for generation
when economic, selling fuel and substituting wholesale purchases for the operation of A vista Corp. 's resources, and
other wholesaJe transactions to capture the value of generation and transmission resources.
A vista Corp. 's optimization process includes entering into hedging transactions to manage risks.
As part of its resource optimization process described above, A vista Corp. manages the impact of fluctuations in eJectric energy prices
by measuring and controlling the volume of energy imbalance between projected loads and resources and through the use of derivative
commodity instruments for hedging purposes. Load/resource imbalances within a rolling 18-month planning horizon are compared
against established volumetric guidelines and management determines the timing and specific actions to manage the imbalances.
Management also assesses availabJe resource decisions and actions that are appropriate for longer-term planning periods. Prior to
April I, 2005, Avista Energy was responsible for the daiJy management of naturaJ gas supplies to meet the requirements of Avista
Corp.'s customers in the states of Washington , Idaho and Oregon. Effective April I, 2005, the management of natural gas procurement
functions was moved from Avista Energy back to Avista Corp. This was required for Washington customers by WUTC orders issued
in February 2004, and Avista Corp.'s resulting transition plan was approved by the WUTC in April 2004. The Company aJso elected
to move these functions back to Avista Corp. for Idaho and Oregon natural gas customers. The natural gas procurement process
includes entering into financial and physical hedging transactions as a means of managing risks. Avista Corp. aJways managed natural
gas procurement for its California operations, which the Company sold in April 2005 (see Note 26).
Market Risk
Market risk is, in general, the risk of fluctuation in the market price of the commodity being traded and is influenced primarily by
supply and demand. Market risk includes the fluctuation in the market price of associated derivative commodity instruments. Market
risk is influenced to the extent that the perfonnance or nonperformance by market participants of their contractual obligations and
commitments affect the supply of, or demand for, the commodity. Avista Corp. manages the market risks inherent in its activities
according to risk policies established by the Risk Management Committee.
Credit Risk
Credit risk relates to the risk of loss that A vista Corp. would incur as a result of non-performance by counterparties of their contractuaJ
obligations to deJiver energy or make financial settlements. Avista Corp. often extends credit to counterparties and customers and is
exposed to the risk that it may not be able to colJect amounts owed to them. Changes in market prices may dramaticalJy alter the size
of credit risk with counterparties, even when conservative credit Jimits have been established. Credit risk includes the risk that a
counterparty may default due to circumstances:
relating directly to it
caused by market price changes, and
relating to other market participants that have a direct or indirect relationship with such counterparty.
Should a counterparty, customer or supplier fail to perform, A vista Corp. may be required to replace existing contracts with contracts
at then-current market prices or to honor the underJying commitment.
A vista Corp. seeks to mitigate credit risk by:
applying specific eligibility criteria to existing and prospective counterparties, and
actively monitoring current credit exposures.
These policies incJude an evaluation of the financiaJ condition and credit ratings of counterparties, collateral requirements or other
credit enhancements, such as letters of credit or parent company guarantees. A vista Corp. also uses standardized agreements that allow
for the netting or offsetting of positive and negative exposures associated with a single counterparty.
I FERC FORM NO.(ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
The Company has concentrations of suppliers and customers in the electric and naturaJ gas industries including:
electric utilities
natural gas distribution companies, and
energy marketing and trading companies.
In addition, the Company has concentrations of credit risk related to geographic location as it operates in the western United States and
western Canada. These concentrations of counterparties and concentrations of geographic location may impact the Company s overall
exposure to credit risk, either positiveJy or negativeJy, because the counterparties may be similarly affected by changes in conditions.
Credit risk also involves the exposure that counterparties perceive reJated to the ability of Corp. to perform deliveries and settlement
under physical and fmanciaJ energy contracts. These counterparties may seek assurances of performance in the form of:
letters of credit,
prepayments, and
cash deposits
In periods of price volatility, the level of exposure can change significantly. As a result, sudden and significant demands may be made
against the Company s credit facilities and cash.' Avista Corp. activeJy monitors the exposure to possible collateral calls and take steps
to minimize capital requirements.
Other Operational and Event Risks
In addition to market and credit risk, the Company is subject to operational and event risks including, among others:
increases or decreases in load demand
blackouts or disruptions to transmission or transportation systems
fuel quaJity and availabiJity,
forced outages at generating plants,
disruptions to information systems and other administrative tools required for normal operations, and
weather conditions and natural disasters that can cause physical damage to property, requiring repairs to restore utility service.
Terrorism threats, both domestic and foreign, are a risk to the entire utiJity industry. Potential disruptions to operations or destruction
of facilities from terrorism or other malicious acts are not readily determinable. The Company has taken various steps to mitigate
terrorism risks and prepare contingency pJans in the event that its facilities are targeted.
NOTE 6. CASH DEPOSITS FROM COUNTERP ARTIES
Cash deposits from counterparties totaled $39.4 million as of December 31 , 2006 and $9.0 milJion as of December 31,2005. These
funds are held by A vista Corp. to mitigate the potential impact of counterparty default risk. These amounts are subject to return if
conditions warrant because of continuing portfolio value fluctuations with those parties or substitution of non-cash collateral.
As is common industry practice, Avista Corp. maintains margin agreements with certain counterparties. Margin calls are triggered
when exposures exceed predetermined contractual limits or when there are changes in a counterparty's creditworthiness. Price
movements in electricity and natural gas can generate exposure levels in excess of these contractual limits. From time to time, margin
calls are made and/or received by Avista Corp. Negotiating for collateraJ in the form of cash or letters of credit is a common industry
practice.
NOTE 7. JOINTLY OWNED ELECTRIC FACILITIES
The Company has a IS percent ownership interest in a twin-unit coal-fired generating faciJity, the Colstrip Generating Project
(Colstrip) located in southeastern Montana, and provides financing for its ownership interest in the project. The Company s share of
reJated fuel costs as well as operating expenses for pJant in service are included in the corresponding accounts in the Statements of
Income. The Company s share of utiJity plant in service for Colstrip was $329.0 million and accumulated depreciation was $192.
milJion as of December 31 , 2006.
NOTE 8. ASSET RETIREMENT OBLIGATIONS
The Company follows SF AS No. 143
, "
Accounting for Asset Retirement Obligations " which requires the recording of the fair value of
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the associated
costs of the asset retirement obJigation are capitalized as part of the carrying amount of the reJated Jong-lived asset. The liability is
accreted to its present value each period and the related capitalized costs are depreciated over the useful life of the related asset. Upon
retirement of the asset, the Company either settles the retirement obligation for its recorded amount or incurs a gain or loss. As asset
retirement costs are recovered through rates charged to customers, the Company records regulatory assets and liabilities for the
difference between asset retirement costs currentJy recovered in rates and asset retirement obligations recorded under SFAS 143. The
regulatory assets do not earn a return.
The Company adopted FIN 47, "Accounting for ConditionaJ Asset Retirement Obligations, an interpretation ofFASB Statement No.
143 " as of December 31 , 2005, which resulted in the recording of additional asset retirement obligations under SFAS No. 143.
Specifically, the Company recorded liabilities for future asset retirement obligations to:
restore ponds at Colstrip,
remove plant and restore the land at the Coyote Springs 2 site at the termination of the land lease
remove asbestos at the corporate office building, and
dispose of PCBs in certain transformers.
Due to an inability to estimate a range of settlement dates, the Company cannot estimate a liability for the:
removal and disposal of certain transmission and distribution assets, and
abandonment and decommissioning of certain hydroelectric generation and natural gas storage facilities.
The following table documents the changes in the Company s asset retirement obligation during the years ended December 31 (dollars
in thousands):
Asset retirement obligation at beginning of year
New liabiJity recognized
Liability settled
Accretion expense
Asset retirement obligation at end of year
2006
529
2005
191
243
(28)
--.rn
$4.529
(51)
332
$4.810
The pro forma asset retirement obligation liability balance as if FIN 47 had been adopted on January 1 2005 (rather than December
31,2005) is as follows (dollars in thousands):
Pro forma asset retirement obligation as of January 1 2005 246
NOTE 9. PENSION PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS
The Company has a defined benefit pension plan covering substantially all regular full-time employees at A vista Corp. and A vista
Energy. Individual benefits under this plan are based upon the employee s years of service and average compensation as specified in
the plan. The Company s funding policy is to contribute at least the minimum amounts that are required to be funded under the
Employee Retirement Income Security Act, but not more than the maximum amounts that are currentJy deductible for income tax
purposes. The Company made $15 million in cash contributions to the pension plan in each of 2006 2005 and 2004. The Company
expects to contribute $15 million to the pension plan in 2007.
The Company also has a Supplemental Executive Retirement PJan (SERP) that provides additional pension benefits to executive
officers of the Company. The SERP is intended to provide benefits to executive officers whose benefits under the pension pJan are
reduced due to the application of Section 415 of the Internal Revenue Code of 1986 and the deferral of salary under deferred
compensation pJans.
The Company expects that benefit payments under the pension plan and the SERP will total $14.0 million in 2007, $14.2 million in
2008, $14.5 million in 2009, $15.8 million in 2010 and $16.4 miJIion in 2011. For the ensuing five years (2012 through 2017), the
Company expects that benefit payments under the pension plan and the SERP wiJI total $102.6 million.
The Finance Committee of the Company s Board of Directors:
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
establishes investment policies, objectives and strategies that seek an appropriate return for the pension plan, and
reviews and approves changes to the investment and funding policies.
The Company has contracted with an investment consultant who is responsible for managing/monitoring the individuaJ investment
managers. The investment managers' performance and reJated individual fund performance is periodicalJy reviewed by the Finance
Committee to ensure compliance with investment policy objectives and strategies. Pension plan assets are invested primariJy in
marketable debt and equity securities. Pension pJan assets may also be invested in real estate, absolute return, venture capital/private
equity and commodity funds. In seeking to obtain the desired return to fund the pension plan, the Finance Committee has established
investment alJocation percentages by asset classes as indicated in the table in this Note.
The expected long-term rate of return on plan assets is based on past performance and economic forecasts for the types of investments
held by the plan. The market-related value of pension plan assets invested in debt and equity securities was based primarily on fair
value (market prices).
The market-related value of pension plan assets invested in real estate was determined based on three basic approaches:
current cost of reproducing a property less deterioration and functional economic obsolescence
capitaJization of the property's net earnings power , and
value indicated by recent sales of comparable properties in the market.
The market-related value of plan assets was determined as of December 31 , 2006 and 2005.
In 2006, the form of payment election assumption was analyzed based upon historical trends and future projections. The Company
revised the form of payment ejection to assume that 5 percent of retirees and 50 percent of vested terminated participants wilJ elect a
lump sum payment, based upon the analysis. The form of payment election assumption previously assumed that 50 percent of retirees
and vested terminated participants wouJd eject a lump sum payment. The change resulted in an increase of $13.2 milJion to the
pension benefit obligation as of December 31 , 2006. The change wilJ also increase future years' pension costs.
As of December 31, 2006 and 2005, the pension and other postretirement benefit plans had assets with a market -reJated vaJue that was
less than th~ present value of the benefit obligation under the pJans. In 2006, the Company adopted SF AS No. 158, which resulted in
the recording of adjustments to the Balance Sheet as disclosed in Note 2.
The Company provides certain health care and life insurance benefits for substantialJy alJ of its retired employees. The Company
accrues the estimated cost of postretirement benefit obligations during the years that employees provide services. The Company
elected to amortize the transition obligation of $34.5 milJion over a period of twenty years, beginning in 1993. The Company expects
that benefit payments under the postretirement benefit plan will be $2.9 milJion in 2007, $2.8 milJion in 2008, $2.7 million in 2009,
$2.5 million in 2010 and $2.5 mimon 2011. For the ensuing five years (2012 through 2016), the Company expects that benefit
payments under the postretirement benefit pJan wilJ total $10.9 miJlion. The Company expects to contribute $2.9 million to the
postretirement benefit plan in 2007, representing expected benefit payments to be paid during the year.
The Company established a Health Reimbursement Arrangement to provide employees with tax-advantaged funds to pay for alJowable
medical expenses upon retirement. The amount earned by the employee is fixed on the retirement date based on employees' years of
service and the ending saJary. The Jiability and expense of this plan are included as postretirement benefits.
The Company uses a December 31 measurement date for its pension and postretirement plans. The folJowing tabJe sets forth the
pension and other postretirement pJan disclosures as of December 31 , 2006 and 2005 and the components of net periodic benefit costs
for the years ended December 31 , 2006, 2005 and 2004 (dolJars in thousands):
I FERC FORM NO.(ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Other
Pension Benefits Postretirement Benefits
2006 2005 2006 2005
Change in benefit obligation:
Benefit obligation as of beginning of year $301 746 $285,738 $28 963 $31 868
Service cost 963 9,480 544 566
Interest cost 158 228 755 652
Plan amendment
Actuarial loss (gain)2,524 352 386 (1,800)
Benefits paid (15 521)(14 932)(3,557)293)
Expenses paid (179)(120)-----DID ----DID
Benefit obligation as of end of year $315.691 $301.746 $30.061 $28.963
Change in plan assets:
Fair value of plan assets as of beginning of year $199,163 $186,579 $18 378 $16,862
Actual return on plan assets 737 763 530 236
Employer contributions 000 15,000 183
Benefits paid (14 642)(14 059)(873)
Expenses paid (179)(120)-D.Ql
Fair value of plan assets as of end of year $225.079 $199.163 $20.878 $18.378
Funded status $(90,612)$(102,583)$(9,183)$(10,585)
Unrecognized net actuariaJ loss 69,679 79,667 318 973
Unrecognized prIor serVIce cost 751 4,405
Unrecognized net transition obligation/(asset)031 3.536
Accrued benefit cost (17,182)(18 511)(3,834)076)
AdditionalliabiJity 349
Accrued benefit liability $(90.612)$(53.106)$(9.183)$(6.076)
Accumulated pension benefit obligation $264.647 $252.269
Accumulated postretirement benefit obligation:
For retirees $18,548 $14 662
For fully eligible empJoyees $5,401 $5,980
For other participants $6,112 321
Weighted-average asset allocations as of December 31:
Equity securities 53%63%64%62%
Debt securities 28%27%33%36%
Real estate
Other 14%
Target asset allocations as of December 31:
Equity securities 39-61 %54-68%52-72%52- 72%
Debt securities 27-33%22-28%28-48%28-48%
Real estate
Other 10-22%13%
Weighted average assumptions as of December 31:
Discount rate for benefit obligation 15%75%15%75%
Discount rate for annual expense 75%75%75%75%
Expected long-term return on plan assets 8.50%8.50%50%8.50%
Rate of compensation increase 84%84%
MedicaJ cost trend pre-age 65 - initial 00%00%
Medical cost trend pre-age 65 - ultimate 00%00%
Ultimate medical cost trend year pre-age 65 2011 2010
Medical cost trend post-age 65 - initial 00%00%
Medical cost trend post-age 65 - ultimate 00%00%
Ultimate medical cost trend year post-age 65 2010 2009
FERC FORM NO.ED. 12-88 Page 123.13
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubm Ission 04/18/2007 2006/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
2006 2005 2004 2006 2005 2004
Components of net periodic benefit cost:
Service cost $9,963 $ 9,480 $ 8,914 544 $ 566 $ 480
Interest cost 17,158 228 16,406 755 652 019
Expected return on pJan assets (16,997)(15,917)(13,436)(1,562)(1,368)(1,106)
Transition (asset)/obJigation recognition (499)(1,086)505 505 505
Amortization of prior service cost 653 654 654
Net loss recognition 772 442 447 ---2Q 245
Net periodic benefit cost $14.549 $13.388 $14,899 $1.332 $1.355 $2.143
Assumed health care cost trend rates have a significant effect on the amounts reported for the heaJth care plans. A
one-percentage-point increase in the assumed health care cost trend rate for each year would increase the accumulated postretirement
benefit obligation as of December 31 , 2006 by $1.4 million and the service and interest cost by $0.1 million. A one-percentage-point
decrease in the assumed health care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as
of December 31, 2006 by $1.2 million and the service and interest cost by $0.1 million.
The Company has a salary deferraI401(k) plans that is a derIDed contribution plan covers substantially all employees. Employees can
make contributions to their respective accounts in the plans on a pre-tax basis up to the maximum amount permitted by law. The
Company matches a portion of the salary deferred by each participant according to the schedule in the plan. Employer matching
contributions were $4.4 million in 2006, $4.1 miJIion in 2005 and $3.9 milJion in 2004.
The Company has an Executive Deferral Plan. This pJan allows executive officers and other key employees the opportunity to defer
until the earlier of their retirement, termination, disability or death, up to 75 percent of their base salary and/or up to 100 percent of
their incentive payments. Deferred compensation funds are heJd by the Company in a Rabbi Trust. At December 31, 2006 and 2005,
there were deferred compensation assets of $12.6 miJIion and $11.3 million included in other special funds and corresponding deferred
. compensation liabilities of $12.6 milJion and $11.3 miJIion included in other deferred credits on the Balance Sheets.
NOTE 10. ACCOUNTING FOR INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabiJities for
financial reporting purposes and the amounts used for income tax purposes and tax credit carryforwards.
The realization of deferred tax assets is dependent upon the ability to generate taxable income in future periods. The Company
evaluated avaiJabJe evidence supporting the realization of its deferred tax assets and determined it is more Jikely than not that deferred
tax assets will be realized.
In August 2005 , the IRS and Treasury Department issued a revenue ruling, and related regulations that affect the tax treatment by
A vista Corp. of certain indirect overhead expenses. A vista Corp. had previously made a tax election to deduct certain indirect
overhead costs, starting with the 2002 tax return, that were capitaJized for financial accounting purposes. This election allowed A vista
Corp. to acceJerate tax deductions resulting in a reduction of approximately $40 miJIion in current tax Jiabilities. The current tax
benefit was deferred on the balance sheet in accordance with provisions of SPAS No. 109 and did not have an effect on net income.
Due to the revenue rulings and related regulations, the IRS has disallowed the accelerated tax deductions during their recent exam.
The Company believes that the tax deductions c1aimed on tax returns were appropriate based on the applicabJe statutes and regulations
in effect at the time. Avista Corp. has appealed the proposed IRS adjustment on April 19, 2006. The Company s appeaJ has been
received, but has not yet been scheduJed for review by the IRS Appeals Division. The Company repaid a portion of the accelerated tax
deduction through tax payments in 2005 and 2006. There can be no assurance that the Company s position wiIJ prevail. However, it is
not expected to have a significant effect on the Company s net income.
The Company had net regulatory assets of $105.9 miJIion as of December 31 2006 and $114.1 miJIion as of December 31, 2005
related to the probable recovery of certain deferred tax liabiJities from customers through future rates.
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 11. ENERGY PURCHASE CONTRACTS
A vista Corp. has contracts for the purchase of fueJ for thermal generation, naturaJ gas and various agreements for the purchase, sale or
exchange of electric energy with other entities. The termination dates of the contracts range from one month to the year 2055. Total
expenses for power purchased, natural gas purchased, fuel for generation and other fuel costs, which are induded in operation
expenses in the Statements of Income, were $682.5 minion in 2006, $652.2 million in 2005 and $482.2 miJlion in 2004. The
following table details Avista Corp.'s future contractual commitments for power resources (induding transmission contracts) and
natural gas resources (induding transportation contracts) (dollars in thousands):
Power resources
Natural gas resources
Total
2007
$109,915
215,668
$325.583
2008
$103,526
96,054
$199.580
2009
$102 898
83,625
$186.523
2010
$103,003
57,901
$160.904
2011 Thereafter Total
$ 74 785 $ 463 737 $ 957 86456,563 719,503 1,229,314
$131.348 $1.183.240 $2.187.178
All of the energy purchase contracts were entered into as part of A vista Corp.' s obligation to serve its retail naturaJ gas and eJectric
customers' energy requirements. As a result, these costs are generally recovered either through base retaiJ rates or adjustments to retail
rates as part of the power and naturaJ gas cost deferral and recovery mechanisms.
In addition, Avista Corp. has operational agreements, settlements and other contractual obligations for its generation, transmission and
distribution facilities. The expenses associated with these agreements are reflected as operation expenses and maintenance expenses in
the Statements of Income.
The following table detaiJs future contractual commitments for these agreements (dollars in thousands):
Contractual obligations
2007
$15.438
2008
$15.463
2009
$15.611
2010
637
2011
666
Thereafter
863
Total
$274.678
A vista Corp. has fixed contracts with certain Public Utility Districts (PUD) to purchase portions of the output of certain generating
faciJities. Although Avista Corp. has no investment in the PUD generating faciJities, the fIXed contracts obligate Avista Corp. to pay
certain minimum amounts (based in part on the debt service requirements of the PUD) whether or not the faciJities are operating. The
cost of power obtained under the contracts, induding payments made when a facility is not operating, is induded in operation expenses
in the Statements ofIncome. Expenses under these PUD contracts were $13.1 million in 2006, $9.0 million in 2005 and $7.3 million
in 2004.
Information as of December 31 , 2006 pertaining to these PUD contracts is summarized in the following table (dollars in thousands):
Company s Current Share of
DebtService Bonds
Costs (1 ) Outstanding
Kilowatt
abili
Annual
Costs (1)
Expira-
tion
Date
Chelan County PUD:
Rocky Reach Project 000 $ 2 031 984 $ 2 179 2011
Douglas County PUD:
Wells Project 30,000 218 809 724 2018
Grant County PUD:
Priest Rapids Project 000 898 561 876 2055
Wanapum Project 75,000 932 1,870 12,938 2055
Totals 197.000 $13.079 $4.224 $27.717
(1) The annual costs will change in proportion to the percentage of output allocated to Avista Corp. in a particuJar year. Amounts
represent the operating costs for the year 2006. Debt service costs are induded in annual costs.
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
The estimated aggregate amounts of required minimum payments (A vista Corp.s share of existing debt service costs) under these PUD
contracts are as follows (dollars in thousands):
Minimum payments
2007
$3.519
2008
$3.594
2009
$3.620
2010
$2.738
2011
$2.683
Thereafter TotaJ
$44.116
In addition, A vista Corp. wilJ be required to pay its proportionate share of the variable operating txpenses of these projects.
NOTE 12. COMMITTED LINE OF CREDIT
On April 6, 2006, the Company amended its committed line of credit agreement with various banks. The committed line of credit was
originally entered into on December 17, 2004. Amendments to the committed line of credit incJude a reduction in the total amount of
the faciJity to $320.0 milJion from $350.0 miJlion and an extension of the expiration date to ApriJ 5, 2011 from December 16,2009.
The Company chose to reduce the facility based on forecasted liquidity needs. Under the amended credit agreement, the Company can
request the issuance of up to $320.0 million in letters of credit, an increase from $150.0 million prior to the amendment. Total letters
of credit outstanding were $77.1 million as of December 31 , 2006 and $44.1 miJlion as of December 31 , 2005. The amended
committed line of credit is secured by $320.0 miJlion of non-transferable First Mortgage Bonds of the Company issued to the agent
bank that would onJy become due and payable in the event, and then only to the extent, that the Company defaults on its obligations
under the committed line of credit.
The amended committed line of credit agreement contains customary covenants and default provisions, incJuding a covenant requiring
the ratio of "earnings before interest, taxes, depreciation and amortization" to "interest expense" of A vista Corp. for the preceding
twelve-month period at the end of any fiscaJ quarter to be greater than 1.6 to 1. As of December 31 , 2006, the Company was in
compliance with this covenant with a ratio of 2.56 to 1. The committed line of credit agreement also has a covenant which does not
permit the ratio of "consoJidated total debt" to "consolidated total capitalization" of A vista Corp. to be greater than 70 percent at the
end of any fiscal quarter. Under the amendment, this ratio limitation wilJ be increased to 75 percent during the period between the
compJetion of the proposed change in the Company s corporate organization (see Note 24) and December 31 , 2007. As of December
, 2006, the Company was in compliance with this covenant with a ratio of 53.7 percent. If the proposed change in organization
becomes effective, the committed line of credit agreement will remain at A vista Corp.
BaJances outstanding and interest rates of borrowings (excJuding Jetters of credit) under the Company s revolving committed lines of
credit were as follows as of and for the years ended December 31 (dollars in thousands):
BaJance outstanding at end of period
Maximum balance outstanding during the period
Average balance outstanding during the period
Average interest rate during the period
Average interest rate at end of period
2006
000
000
740
07%
8.25%
2005
$63 000
167,000
181
4.45%
5.48%
2004
$68 000
170 000
858
3.14%
52%
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 13. BONDS AND OTHER LONG-TERM DEBT
The following details the interest rate and maturity dates of bonds and other Jong-term debt outstanding as of December 31 (dollars in
thousands):
MaturityYear Description
2006 Secured Medium-Term Notes
2007 First Mortgage Bonds (1)
2007 Secured Medium-Term Notes
2008 Secured Medium-Term Notes
2010 Secured Medium-Term Notes
2012 Secured Medium-Term Notes
2013 First Mortgage Bonds
2018 Secured Medium-Term Notes
2019 First Mortgage Bonds
2023 Secured Medium-Term Notes
2028 Secured Medium-Term Notes
2032 Pollution Control Bonds
2034 Pollution Control Bonds
2035 First Mortgage Bonds
2037 First Mortgage Bonds (1)
Total secured long-term debt
Unsecured Medium-Term Notes
Unsecured Medium-Term Notes
Unsecured Senior Notes
Pollution Control Bonds
TotaJ unsecured long-term debt
Interest rate swaps
Committed line of credit
Preferred stock
Total long-term debt
(1) During December 2006, the Company issued $150.0 million of 5.70 percent First Mortgage Bonds due in 2037. The proceeds from
the issuance were used to legally defease $150.0 million of First Mortgage Bonds that were scheduled to mature on January 1 2007.
2006
2007
2008
2023
Interest
Rate 2006 2005
89%-90%000
75%150 000
99%13,850 13,850
06%-95%45,000 000
67%-02%35,000 35,000
7.37%000 000
6.13%45,000 45,000
7.39%-7.45%500 22,500
5.45%000 90,000
18%-54%13,500 13,500
6.37%000 25,000
00%700 700
5.13%17,000 17,000
25%150,000 150,000
70%150,000
680,550 710,550
8.14%000
90%-94%000 000
75%272,860 279,735
00%4.100 4.100
288,960 303,835
1.037 5.236
000 63,000
26,250 28,000
$1.000,797 $1.110.621
The following table details future long-term debt maturities, not including interest rate swaps, the committed line of credit or preferred
stock (dollars in thousands):
Year
Debt maturities
2007
$25,850
2008
$317,860
2009 2010 2011
$35.000 $
Thereafter
$590.800
Total
$969.510
Substantially all utility properties owned by the Company are subject to the lien of the Company s various mortgage indentures. The
Mortgage and Deed of Trust securing the Company s First Mortgage Bonds (including Secured Medium-Term Notes) contains
limitations on the amount of First Mortgage Bonds, which may be issued based on, among other things, a 70 percent debt-to-collateral
ratio, and/or retired First Mortgage Bonds, and a 2 to 1 net earnings to First Mortgage Bond interest ratio. As of December 31 , 2006,
the Company could issue $429.5 million of additional First Mortgage Bonds under the Mortgage and Deed of Trust. See Note 12 for
information regarding First Mortgage Bonds issued to secure the Company s obligations under its $320.0 million committed line of
credit.
NOTE 14. ADVANCES FROM ASSOCIATED COMPANIES
In 2004, the Company issued Junior Subordinated Debt Securities, with a principal amount of $61.9 million to A V A Capital Trust III,
an affiliated business trust formed by the Company. Concurrently, A V A Capital Trust III issued $60.0 million of Preferred Trust
Securities to third parties and $1.9 million of Common Trust Securities to the Company. All of these securities have a fixed interest
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmlssion 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
rate of 6.50 percent for five years (through March 31, 2009). Subsequent to the initial five-year fixed rate period, the securities will
either have a new fixed rate or an adjustabJe rate. These debt securities may be redeemed by the Company on or after March 31, 2009
and will mature on April 1 , 2034.
In 1997, the Company issued Floating Rate Junior Subordinated Deferrable Interest Debentures, Series B, with a principaJ amount of
$51.5 million to Avista Capital II, an affiliated business trust formed by the Company. Avista Capital II issued $50.0 million of
Preferred Trust Securities with a floating distribution rate of LIBOR plus 0.875 percent, caJculated and reset quarterly. The annual
distribution rate paid during 2006 ranged from 5.285 percent to 6.275 percent. As of December 31, 2006, the annual distribution rate
was 6.244 percent. Concurrent with the issuance of the Preferred Trust Securities, A vista Capital II issued $1.5 million of Common
Trust Securities to the Company. These debt securities may be redeemed at the option of Avista Capital II on or after June 1,2007 and
mature on June 1 2037; however, this is limited by an agreement under the Company s 9.75 percent Senior Notes that mature in 2008.
In December 2000, the Company purchased $10.0 million of these Preferred Trust Securities.
The Company has guaranteed the payment of distributions on, and redemption price and liquidation amount with respect to, the
Preferred Trust Securities to the extent that A V A Capital Trust ill and A vista Capital II have funds available for such payments from
the respective debt securities. Upon maturity or prior redemption of such debt securities, the Preferred Trust Securities will be
mandatorily redeemed.
NOTE 15. INTEREST RATE SWAP AGREEMENTS
In 2004, A vista Corp. entered into three forward-starting interest rate swap agreements, totaling $200.0 million, to manage the risk
associated with changes in interest rates and the impact on future interest payments. These interest rate swap agreements relate to the
interest payments for the anticipated issuances of debt to fund debt that matures in 2007 and 2008. In 2005, the Company cash settled
an interest rate swap and received $4.4 million. In December 2006, Avista Corp. cash settled an interest rate swap agreement (totaling
$75.0 million) and paid $3.7 million. These settlements have been deferred as reguJatory items (part of long-term debt) and will be
amortized over the remaining terms of the interest rate swap agreements (forecasted interest payments) in accordance with regulatory
accounting practices. '
Under the terms of the two remaining agreements (totaling $125.0 million), the value of the interest rate swaps is determined based
upon Avista Corp. paying a fixed rate and receiving a variable rate based on LIBOR for a term of ten years beginning in 2008.
These interest rate swap agreements are considered hedges against fluctuations in future cash flows associated with changes in interest
rates in accordance with SFAS No. 133. As of December 31 2006, A vista Corp. had a long-term derivative liability of $5.1 million
and a net umealized Joss of $3.3 million recorded as accumulated other comprehensive loss on the Balance Sheets. The interest rate
swap agreements provide for mandatory cash settlement of these contracts in 2009. The amount induded in accumuJated other
comprehensive income or Joss at the cash settlement date will be redassified to a regulatory asset or liability (part of long-term debt) in
accordance with regulatory accounting practices under SFAS No. 71. This regulatory asset or Jiability will be amortized as a
component of interest expense over the life of the forecasted interest payments.
NOTE 16. LEASES
The Company has muJtiple lease arrangements involving various assets, with minimum terms ranging from one to forty-five years.
Rental expense under operating leases was $2.5 million in 2006, $8.0 million in 2005 and $12.0 million in 2004.
Future minimum lease payments required under operating leases having initiaJ or remaining noncancelable lease terms in excess of one
year as of December 31 , 2006 were as follows (dollars in thousands):
Year endin December 31:
Minimum payments required
2007 2008
$1.491 $1.380
2009
$1.237
2010
$286
2011
$201
Thereafter
$2.915
TotaJ
$7.510
NOTE 17. GUARANTEES
The Company has guaranteed the payment of distributions on, and redemption price and liquidation amount with respect to, the
Preferred Trust Securities issued by its affiliates, AVA Capital Trust ill and Avista Capital II, to the extent that these entities have
funds available for such payments from the respective debt securities.
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
Avista Power LLC (Avista Power), through its equity investment in Rathdrum Power, LLC (RP LLC), was a 49 percent owner of the
Lancaster Project, which commenced commercial operation in September 2001. In October 2006, Avista Power completed the sale of
its investment in RP LLC for cJose to book value. Commencing with commercial operations, all of the output from the Lancaster
Project is contracted to Avista Energy through 2026 under a power purchase agreement. Avista Corp. has guaranteed the power
purchase agreement for the performance of Avista Energy.
NOTE 18. PREFERRED STOCK-CUMULATIVE (SUBJECT TO MANDATORY REDEMPTION)
In September 2006 2005 and 2004, the Company made mandatory redemptions of 17 500 shares of preferred stock for $1.75 million.
The 262 500 remaining shares must be redeemed on September 15,2007 for $26.25 million. Upon involuntary liquidation, all
preferred stock will be entitled to $100 per share plus accrued dividends.
NOTE 19. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of cash, special deposits, working funds, temporary cash investments, accounts and notes receivable, accounts
payable and the committed line of credit are reasonabJe estimates of their fair values. Energy commodity derivative assets and
liabilities, as well as derivatives related to interest rate swap agreements, are reported at estimated fair value on the Balance Sheets.
The following tabJe sets forth the estimated fair value and carrying value of the Company s bonds and other long-term debt, long-term
debt to affiliated trusts (incJuded in advances from associated companies and excJuding $3.4 milJion of debt that is considered common
equity by the affiJiated trusts) and preferred stock subject to mandatory redemption as of December 31 , 2006 and 2005 (dolJars in
thousands):
Bonds and other long-term debt
Long-term debt to affiliated trusts
Preferred stock
2006
Carrying EstimatedValue Fair Value
$969,510 $976 548
110 000 106,744250 26,622
2005
Carrying EstimatedValue Fair VaJue
014 385 $1 063 018
110 000 104 595
000 28 636
These estimates of fair value were primarily based on avaiJable market information.
NOTE 20. COMMON STOCK
In November 1999, the Company adopted a shareholder rights plan pursuant to which hoJders of common stock outstanding on
February 15, 1999, or issued thereafter, were granted one preferred share purchase right (Right) on each outstanding share of common
stock. Each Right, initialJy evidenced by and traded with the shares of common stock, entitJes the registered holder to purchase one
one-hundredth of a share of preferred stock of the Company, without par value, at a purchase price of $70, subject to certain
adjustments, regulatory approval and other specified conditions. The Rights will be exercisable only if a person or group acquires 10
percent or more of the outstanding shares of common stock or commences a tender or exchange offer, the consummation of which
wouJd result in the beneficial ownership by a person or group of 10 percent or more of the outstanding shares of common stock. Upon
any such acquisition, each Right will entitle its holder to purchase, at the purchase price, that number of shares of common stock or
preferred stock of the Company (or, in the case of a merger of the Company into another person or group, common stock of the
acquiring person or group) that has a market value at that time equal to twice the purchase price. In no event will the Rights be
exercisable by a person that has acquired 10 percent or more of the Company s common stock. The Rights may be redeemed, at a
redemption price of $0.01 per Right, by the Board of Directors of the Company at any time until any person or group has acquired 10
percent or more of the common stock. In connection with the proposed statutory share exchange (see Note 24), the shareholder rights
plan was amended to provide that the Rights will expire upon the earlier of the effective time of the statutory share exchange or March
, 2009 (the originally scheduled expiration date).
The Company has a Dividend Reinvestment and Stock Purchase Plan under which the Company s sharehoJders may automatically
reinvest their dividends and make optional cash payments for the purchase of the Company s common stock at current market value.
The payment of dividends on common stock is restricted by provisions of certain covenants applicable to preferred stock and
long-term debt contained in the Company s ArticJes of Incorporation and various mortgage indentures. Covenants under the
Company s 9.75 percent Senior Notes that mature in 2008 limit the Company s ability to increase its common stock cash dividend to
o more than 5 percent over the previous quarter, unless certain conditions are met related to restricted payments. As of December 31,
I FERC FORM NO.2 (ED. 12-88) Page 123.19
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) XAn Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
2006, the Company is meeting the conditions that would aJlow it to increase the common stock cash dividend in excess of 5 percent
over the previous quarter.
In December 2006, the Company issued 3,162 500 shares of common stock through an underwriter and received net proceeds of $77.
million. Also, in December 2006, the Company entered into a sales agency agreement with a sales agent, to issue up to 2 million
shares of its common stock from time to time.
NOTE 21. EARNINGS PER COMMON SHARE
The following table presents the computation of basic and diluted earnings per common share for the years ended December 31 (in
thousands, except per share amounts):
2006 2005 2004
Numerator:
Net income before cumulative effect of accounting change $73 133 $45,168 $35,614
Cumulative effect of accounting change
Net income $73.133 168 $35.154
Denominator:
Weighted-average number of common shares
outstanding-basic 49,162 523 48,400
Effect of dilutive securities:
Contingent stock awards 371 198 209
Stock options --IrL
Weighted-average number of common shares
outstanding-diluted 49.897 48.979 48.886
Earnings per common share, basic:
Earnings before cumulative effect of accounting change $1.49 $0.$0.
Loss from cumulative effect of accounting ,?hange (0.01)
Total earnings per common share, basic $1.$0.$0.
Earnings per common share, diluted:
Earnings before cumuJative effect of accounting change $1.47 $0.$0.
Loss from cumulative effect of accounting change (0.01)
Total earnings per common share, diluted $1.47 $0.$0.
Total stock options outstanding that were not induded in the caJculation of diluted earnings per common share were 26 200 for 2006
695 500 for 2005 and 730,100 for 2004. These stock options were exduded from the caJculation because they were antidilutive based
on the fact that the exercise price of the stock options was higher than the average market price of A vista Corp. common stock during
the respective period. In addition, contingent stock awards of 318,900 were outstanding as of December 31, 2005 , which were not
induded in basic or diluted shares because the performance conditions were not satisfied.
NOTE 22. STOCK COMPENSATION PLANS
1998 Plan
In 1998, the Company adopted, and sharehoJders approved, the Long-Term Incentive Plan (1998 Plan). Under the 1998 Plan, certain
key employees, officers and non-employee directors of the Company and its subsidiaries may be granted stock options, stock
appreciation rights, stock awards (induding restricted stock) and other stock-based awards and dividend equivalent rights. The
Company has available a maximum of 3.5 miJlion shares of its common stock for grant under the 1998 Plan. As of December 31
2006 9 miJlion shares were remaining for grant under this plan.
2000 Plan
In 2000, the Company adopted a Non-Officer Employee Long-Term Incentive PJan (2000 Plan), which was not required to be
approved by sharehoJders. The provisions of the 2000 Plan are essentiaJly the same as those under the 1998 Plan, except for the
exdusion of non-employee directors and executive officers of the Company. The Company has availabJe a maximum of 2.5 million
shares of its common stock for grant under the 2000 Plan. However, the Company currently does not plan to issue any further options
or securities under the 2000 Plan. As of December 31, 2006, 1.7 million shares were remaining for grant under this plan.
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
Stock Compensation
Prior to January 1 2006, the Company accounted for stock based compensation using APB No. 25, which required the recognition of
compensation expense on the excess, if any, of the market price of the stock at the date of grant over the exercise price of the option.
As the exercise price for options granted under the 1998 and 2000 PJans was equal to the market price at the date of grant, there was
no compensation expense recorded by the Company. However, the Company recognized compensation expense reJated to
performance-based share awards. For periods presented prior to January 1 2006, the Company is required to disclose pro forma net
income and earnings per common share as if the Company had adopted the fair value method of accounting for stock-based
compensation.
On January 1,2006, the Company adopted SFAS No. 123R, which supersedes APB No. 25 and SFAS No. 123 and their reJated
implementation guidance. The statement requires that the compensation cost relating to share-based payment transactions be
recognized in financial statements based on the fair value of the equity or liability instruments issued. The Company adopted SFAS
No. 123R using the modified prospective method and, accordingly, fmancial statement amounts for prior periods presented have not
been restated to reflect the fair value method of recognizing compensation expense relating to share-based payments. For 2006 , the
Company recorded $4.0 million (pre-tax) of stock-based compensation expense.
Stock Options
The fair value of stock option awards was calculated using the Black Scholes option pricing model. This model requires the use of
subjective assumptions, including stock price volatility, dividend yield, risk-free interest rate and expected time to exercise. See Note
1 for disclosure of pro forma net income and earnings per common share for 2005 and 2004. Avista Corp. has not granted any stock
options since 2003. The following summarizes stock options activity under the 1998 Plan and the 2000 Plan for the years ended
December 31:
2006 2005 2004
Number of shares under stock options:
Options outstanding at beginning of year 095 211 332 198 2,481 886
Options granted
Options exercised (504 452)(192 377)(99,138)
Options canceled 714 (44,610)(50,550)
Options outstanding at end of year 045 095.211 2.332.198
Options exercisable at end of year 1.5 045 968.629 896.648
Weighted average exercise price:
Options granted
Options exercised $16.$13.50 $13.
Options canceled $20.$20.42 $18.46
Options outstanding at end of year $15.41 $15.$15.
Options exercisable at end of year $15.41 $16.$16.
Information for options outstanding and exercisable as of December 31, 2006 was as follows:
Weighted Weighted
Average Average
Range of Number Exercise Remaining
Exercise Prices of Shares Price Life (in years)
$10.17-$11.68 388 695 $10.
$11.69-$14.398 375 11.82
$14.62-$17.274 900 17.
$17.54-$20.45 155 625 18.
$20.46-$26.297 250 22.
$26.30-$28.200 27.
Total 045 $15.41
FERC FORM NO.ED. 12-Page 123.
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(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
The aggregate intrinsic value of options outstanding and exercisabJe was $15.3 milJion as of December 31 2006. The aggregate
intrinsic value represents the difference between A vista Corp. 's cJosing price on the last trading day of the period and the exercise
price, multiplied by the number of in-the-money options. This is the value that would have been received by the option holders had aU
options holders exercised their options on December 31 , 2006. The intrinsic value of options exercised during 2006 was $3.5 million
and total cash received from the exercise of stock options was $9.9 million. At December 31, 2005, the Company had approximately
125 000 unvested stock options outstanding with a weighted average grant date fair value of $3.28 per share. As of December 31
2006, the Company s stock options were fully vested and expensed.
Restricted Shares
Restricted shares vest in equal thirds each year over a three-year period and are payable in Avista Corp. common stock at the end of
each year if the service condition is met. In addition to the service condition, the Company must meet a return on equity target in order
for the CEO's restricted shares to vest. During the vesting period, employees are entitJed to dividend equivalents which are paid when
dividends on the Company s common stock are decJared. Restricted stock is vaJued at the average of the high and low market of the
Company s common stock on the grant date. As of December 31, 2006, the restricted shares had unrecognized compensation expense
of $0.4 milJion and an intrinsic value of $0.9 million. The intrinsic value represents the total market value of restricted shares as of
December 31, 2006. The foUowing table summarizes restricted stock activity:
Unvested Shares at December 31, 2005
Shares granted
Shares cancelled
Shares vested
Unvested Shares at December 31 , 2006
36,260
(80)
Weighted average fair value at grant date
36.180
$21.
073 ofrestricted shares vested on January 3, 2007 that were granted in 2006.
Performance Shares
Performance share grants have vesting periods of three years. Performance awards entitJe the recipients to dividend equivalent rights,
are subject to forfeiture under certain circumstances, and subject to meeting specific performance conditions. Based on the attainment
of the performance condition, the amount of cash paid or common stock issued will range from 0 to 150 percent of the performance
shares granted depending on the change in the value of the Company s common stock relative to an external benchmark. Dividend
equivalent rights are accumulated and paid out only on shares that eventuaUy vest.
Performance share awards entitle the grantee to shares of common stock or cash payabJe once the service condition is satisfied. Based
on attainment of the performance condition, grantees may receive 0 to 150 percent of the original shares granted. The performance
condition used benchmarks the Company s Total Shareholder Return (TSR) performance over a three-year period against other
utilities; under SPAS 123R this is considered a market based condition. Performance shares may be settled in common stock or cash
at the discretion of the Company. HistoricaUy, the company has settled these awards through issuance of stock and intends to continue
this practice. These awards vest at the end of the three-year period. Under Statement SPAS 123R, performance shares are equity
awards with a market based condition, which results in the compensation cost for these awards being recognized over the requisite
service period, provided that the requisite service period is rendered, regardless of when, if ever, the market condition is satisfied.
The Company measured (at the grant date) the estimated fair value of performance shares granted in 2006, 2005 and 2004 in
accordance with the provisions of SPAS No. 123R. The fair value of each performance share award was estimated on the date of
grant using a Monte Carlo valuation model. Expected voJatility was based on the historical voJatility of Avista Corp. common stock
over a three-year period. The expected term of the performance shares is three years based on the performance cycJe. The risk-free
interest rate was based on the u.S. Treasury yield at the time of grant. The compensation expense on these awards will only be
adjusted for changes in forfeitures. The following summarizes the weighted average assumptions used to determine the fair value of
performance shares and related compensation costs:
Risk-free interest rate
Expected life, in years
Expected volatility
Dividend yieJd
I FERC FORM NO.2 (ED. 12-88)
2006
21.9%
2005
3.4%
34.
2004
2.4%
38.
3.4%
Page 123.
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(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
The fair value of performance shares granted was estimated to be the following in the year ended December 31:
Weighted average grant date fair value (per share)
2006
$18.
2005
$16.
2004
$17.
The fair value includes both performance shares and dividend equivalent rights.
During 2006, the Company granted 138,340 performance shares of which 138 042 were outstanding and unvested as of December 31
2006, to certain officers and other key employees. In 2005, the Company granted 163,600 performance shares to certain officers and
other key employees, of which 162 364 awards were outstanding and unvested as of December 31 , 2006.
The Company granted 156 800 performance shares in 2004. Based on the Company s TSR as compared to the benchmark during the
year performance cycle, the Company issued 189,382 shares of common stock in January 2007 related to the performance shares
granted in 2004. The Company issued 183 497 shares of common stock in the rust quarter of 2006 reJated to the performance shares
granted in 2003.
Unrecognized compensation expense for performance share awards was $2.4 miJIion as of December 31 , 2006, of which $1.6 million
and $0.8 million is expected to be expensed during 2007 and 2008. The aggregate intrinsic vaJue of all performance share awards
outstanding as of December 31, 2006 was $11.5 miJIion, which represents the total market vaJue of all performance shares outstanding.
This is the value that would have been received by the share recipients had an performance shares been vested and paid out at 100
percent on December 31 , 2006.
A wards outstanding under the performance share grants include a dividend component that is paid in cash. This component of the
performance share grants is accounted for as a liability award under the guidance of SF AS No. 123R. These JiabiJity awards are
revalued on a quarterly basis taking into account the number of awards outstanding, historicaJ dividend rate, and the change in the
value of the Company s common stock reJative to an externaJ benchmark. Over the life of these awards, the cumulative amount of
compensation expense recognized wiJI match the actual cash paid. As of December 31, 2006, the Company had recognized
compensation expense and a liability of $0.7 million related to the dividend component of performance share grants.
NOTE 23. COMMITMENTS AND CONTINGENCIES
In the course of its business, the Company becomes involved in various claims, controversies, disputes and other contingent matters
including the items described in this Note. Some of these claims, controversies, disputes and other contingent matters involve
litigation or other contested proceedings. With respect to these proceedings, the Company intends to vigorously protect and defend its
interests and pursue its rights. However, no assurance can be given as to the ultimate outcome of any particular matter because
Jitigation and other contested proceedings are inherently subject to numerous uncertainties. With respect to matters that affect Avista
Corp.s operations, the Company intends to seek, to the extent appropriate, recovery of incurred costs through the rate making process.
Federal Energy Regulatory Commission Inquiry
On April 19, 2004, the FERC issued an order approving the contested Agreement in Resolution of Section 206 Proceeding (Agreement
in Resolution) reached by Avista Corp., Avista Energy and the FERC's Trial Staff with respect to an investigation into the activities of
Avista Corp. and Avista Energy in western energy markets during 2000 and 2001. In the Agreement in Resolution, the FERC Trial
Staff stated that its investigation found: (1) no evidence that any executives or employees of Avista Corp. or Avista Energy knowingJy
engaged in or faciJitated any improper trading strategy; (2) no evidence that A vista Corp. or A vista Energy engaged in any efforts to
manipulate the western energy markets during 2000 and 2001; and (3) that Avista Corp. and Avista Energy did not withhold relevant
information from the FERC's inquiry into the western energy markets for 2000 and 2001. In April 2005 and June 2005, the California
Parties and the City of Tacoma, respectively, filed petitions for review of the FERC's decisions approving the Agreement in Resolution
with the United States Court of Appeals for the Ninth Circuit. Based on the FERC's order approving the Agreement in Resolution and
the FERC's denial of rehearing requests, the Company does not expect that this proceeding wiJI have any material adverse effect on its
financiaJ condition, results of operations or cash flows.
Class Action Securities Litigation
On November 10, 2005, an amended class action complaint was filed in the United States District Court for the Eastern District of
Washington against Avista Corp., Thomas M. Matthews, the former Chairman of the Board, President and Chief Executive Officer of
I FERC FORM NO.(ED. 12-88) Page 123.
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(1) X An Original (Mo, Da, Yr)
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NOTES TO FINANCIAL STATEMENTS (Continued)
Avista Corp., Gary G. Ely, the current Chairman of the Board and Chief Executive Officer of Avista Corp., and Jon E. Eliassen, the
former Senior Vice President and Chief FinanciaJ Officer of Avista Corp. Several class action complaints were originally filed in
September through November 2002 in the same court against the same parties. In February 2003, the court issued an order, which
consolidated the complaints and in August 2003 , the plaintiffs filed a consolidated amended class action complaint. On June 13, 2005
the Company filed a motion for reconsideration of its earlier motion to dismiss this complaint, based, in part, on a recent United States
Supreme Court decision with respect to the pleading requirements surrounding a sufficient showing of loss causation. On October 19,
2005, the Court granted the Company s motion to dismiss this complaint. The order to dismiss was issued without prejudice, which
allowed the pJaintiffs to amend their complaint. The amended compJaint filed on November 10, 2005 alleges damages due to the
decrease in the total market value of the Company s common stock during the class period, alleged to be approximately $2.6 biJIion.
These alJeged Josses stemmed from alleged violations of federaJ securities Jaws through alleged misstatements and omissions of
material facts with respect to the Company s energy trading practices in western power markets. The pJaintiffs assert that alleged
misstatements and omissions regarding these matters were made in the Company s filings with the Securities and Exchange
Commission and other information made publicly available by the Company, including press reJeases. The class action complaint
asserts claims on behalf of alJ per~ons who purchased, converted, exchanged or otherwise acquired the Company s common stock
during the period between November 23 1999 and August 13 2002. On January 6, 2006, the Company filed a motion to dismiss the
November 10,2005 complaint, asserting deficiencies in the amended compJaint, including that the plaintiffs failed to adequately allege
loss causation. On June 2, 2006, the u.S. District Court entered an order denying the Company s motion to dismiss the complaint.
The U.S. District Court s order denying the Company s motion to dismiss is not a decision on the merits of the lawsuit. On September
16,2006, the plaintiffs filed a motion for class certification. On February 13 2007, the pJaintiffs' motion for class certification was
heard before the court. Also, pending before the court is defendants' motion for summary judgment seeking to dismiss pJaintiffs
claims on the ground that they are barred by the applicable statute of limitations. The matter is expected to proceed in the normal
course of Jitigation and a trial date is currently scheduled for November 13, 2007. Because the resolution of this Jawsuit remains
uncertain, Jegal counsel cannot express an opinion on the extent, if any, of the Company s liability. However, based on information
currently known to the Company s management, the Company does not expect that this lawsuit wiJI have a material adverse effect on
its financial condition, results of operations or cash flows.
California Refund Proceeding
In July 2001, the FERC ordered an evidentiary hearing to determine the amount of refunds due to California energy buyers for
purchases made in the spot markets operated by the California Independent System Operator (CanSO) and the California Power
Exchange (CaIPX) during the period from October 2, 2000 to June 20, 2001 (Refund Period) in the California spot power market. The
findings of the FERC administrative law judge were largely adopted in March 2003 by the FERc. The refunds ordered are based on
the development of a mitigated market clearing price methodology. If the refunds required by the formuJa would cause a selJer to
recover less than its actual costs for the refund period, the FERC has held that the seller would be allowed to document these costs and
Jimit its refund Jiability commensurateJy. In September 2005, Avista Energy submitted its cost filing claim pursuant to the FERC'
August 2005 order and demonstrated an overall revenue shortfalJ for sales into the California spot markets during the Refund Period
after the mitigated market clearing price methodology is applied to its transactions. That filing was accepted in orders issued by the
FERC in January 2006 and November 2006. In February 2007, the CanSO filed a status report at the FERC stating that it will take
approximately 10 weeks to complete the financiaJ adjustment phase reJated to transactions in its markets during the Refund Period.
The report also stated that the CanSO intends to process Avista Energy s cost claim. The CanSO states that its efforts related to cost
filing offsets will require five business weeks to complete. In January 2007, Avista Energy joined in a settlement filed at the FERC by
participants in markets operated by the Automated Power Exchange (APX). The settlement, if approved by the FERC, provides for a
comprehensive resolution of all disputes and other matters with respect to the APX related claims.
In 2001 , Pacific Gas & Electric (PG&E) and Southern California Edison (SCE) defaulted on payment obligations to the CalPX and the
CanSO. As a resuJt, the CalPX and the CanSO faiJed to pay various energy seIJers, including Avista Energy. Both PG&E and the
CalPX declared bankruptcy in 2001. In March 2002, SCE paid its defaulted obJigations to the CaIPX. In ApriJ 2004, PG&E paid its
defaulted obligations into an escrow fund in accordance with its bankruptcy reorganization. Funds held by the CaJPX and in the
PG&E escrow fund are not subject to release until the FERC issues an order directing such release in the CaJifornia refund proceeding.
As of December 31 , 2006, Avista Energy s accounts receivable outstanding related to defaulting parties in CaJifornia were fully offset
by reserves for uncollected amounts and funds colJected from defaulting parties.
In addition, in June 2003, the FERC issued an order to review bids above $250 per MW made by participants in the short-term energy
markets operated by the CanSO and the CaJPX from May I, 2000 to October 2, 2000. Market participants with bids above $250 per
MW during the period described above have been required to demonstrate why their bidding behavior and practices did not violate
I FERC FORM NO.(ED. 12-88) Page 123.
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(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
appJicable market rules. If violations were found to exist, the FERC would require the refund of any unjust profits and could also
enforce other non-monetary penalties, such as the revocation of market-based rate authority. Avista Energy was subject to this review.
In May 2004, the FERC provided notice that Avista Energy was no longer subject to this investigation. In March and ApriJ 2005, the
California Parties and PG&E, respectiveJy, petitioned for review of the FERC's decision by the United States Court of Appeals for the
Ninth Circuit. In addition, many of the other orders that the FERC has issued in the California refund proceedings are now on appeal
before the Ninth Circuit. Some of those issues have been consolidated as a result of a case management conference conducted in
September 2004. In October 2004, the Ninth Circuit ordered that briefing proceed in two rounds. The flISt round is limited to three
issues: (I) which parties are subject to the FERC's refund jurisdiction in light of the exemption for government-owned utilities
section 201 (f) of the FederaJ Power Act (FP A); (2) the temporaJ scope of refunds under section 206 of the FP A; and (3) which
categories of transactions are subject to refunds. In September 2005, the Ninth Circuit held that the FERC did not have the authority to
order refunds for sales made by municipal utilities in the California Refund Case. In August 2006, the Ninth Circuit upheld October 2
2000 as the refund effective date for the FP A section 206 Refund Proceeding, but remanded to the FERC its decision not to consider a
FPA section 309 remedy for tariff violations prior to October 2, 2000. The Ninth Circuit also granted California s petition for review
chalJenging the FERC's exclusion of the energy exchange transactions as welJ as the FERC's exclusion of forward market transactions
from the California refund proceedings. The Ninth Circuit has extended until ApriJ 29, 2007, the time for filing petitions for rehearing.
It is unclear at this time what impact, if any, the Court's remand might have on Avista Energy. The second round of issues and their
corresponding briefing schedules have not yet been set by the Ninth Circuit Court of Appeals.
Because the resolution of the California refund proceeding remains uncertain, legaJ counsel cannot express an opinion on the extent, if
any, of the Company s liability. However, based on information currently known to the Company s management, the Company does
not expect that the California refund proceeding will have a material adverse effect on its financial condition, results of operations or
cash flows. This is primarily due to the fact that FERC orders have stated that any refunds will be netted against unpaid amounts owed
to the respective parties and the Company does not believe that refunds would exceed unpaid amounts owed to the Company.
Pacific Northwest Refund Proceeding
In July 2001 , the FERC initiated a preliminary evidentiary hearing to develop a factual record as to whether prices for spot market
sales in the Pacific Northwest between December 25,2000 and June 20,2001 were just and reasonable. During the hearing, Avista
Corp. and Avista Energy vigorousJy opposed claims that rates for spot market sales were unjust and unreasonable and that the
imposition of refunds would be appropriate. In June 2003, the FERC terminated the Pacific Northwest refund proceedings, after
finding that the equities do not justify the imposition of refunds. Seven petitions for review, including one filed by Puget Sound
Energy, Inc. (puget), are now pending before the United States Court of Appeals for the Ninth Circuit. Opening briefs were filed in
January 2005. Petitioners other than Puget chalJenged the merits of the FERC's decision not to order refunds. Puget's brief is directed
to the procedural flaws in the underlying docket. Puget argues that because its complaint was withdrawn as a matter of law in JuJy
2001 , the FERC erred in reJying on it to serve as the basis to initiate the preliminary investigation into whether refunds for individualJy
negotiated bilateral transactions in the Pacific Northwest were appropriate. In February 2005, intervening parties, including A vista
Energy and Avista Corp., filed in support ofPuget and aJso filed in opposition to the other six petitioners. Briefing was completed in
May 2005 and oraJ arguments were heard on January 8, 2007. Because the resolution of the Pacific Northwest refund proceeding
remains uncertain, legal counsel cannot express an opinion on the extent, if any, of the Company s liabiJity. However, based on
information currently known to the Company s management, the Company does not expect that the Pacific Northwest refund
proceeding will have a materiaJ adverse effect on its financial condition, results of operations or cash flows.
California Attorney General Complaint
In May 2002, the FERC conditionalJy dismissed a complaint filed in March 2002 by the Attorney General of the State of California
(CaJifornia AG) that alJeged violations of the Federal Power Act by the FERC and alJ selJers (including A vista Corp. and its
subsidiaries) of electric. power and energy into California. The complaint alJeged that the FERC's adoption and implementation of
market-based rate authority was flawed and, as a resuJt, individual seJlers shouJd refund the difference between the rate charged and a
just and reasonable rate. In May 2002, the FERC issued an order dismissing the complaint but directing selJers to re-file certain
transaction summaries. It was not clear that A vista Corp. and its subsidiaries were subject to this directive but the Company took the
conservative approach and re-filed certain transaction summaries in June and July of 2002. In JuJy 2002, the California AG requested
a rehearing on the FERC order, which request was denied in September 2002. Subsequently, the California AG filed a Petition for
Review of the FERC's decision with the United States Court of Appeals for the Ninth Circuit. In September 2004, the United States
Court of Appeals for the Ninth Circuit upheld the FERC's market-based rate authority, but found the requirement that alJ sales at
market-based rates be contained in quarterJy reports filed with the FERC to be integral to a market-based rate tariff. The California
AG has interpreted the decision as providing authority to the FERC to order refunds in the CaJifornia refund proceeding for an
I FERC FORM NO.2 (ED. 12-88) Page 123.
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(1) ~ An Original (Mo, Da, Yr)
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NOTES TO FINANCIAL STATEMENTS (Continued)
expanded refund period. The Court's decision Jeaves to the FERC the determination as to whether refunds are appropriate. In October
2004, A vista Energy joined with others in seeking rehearing of the Court s decision to remand the case back to the FERC for further
proceedings. The Court denied the request without explanation on July 31, 2006. Based on its current schedule, the Ninth Circuit wilJ
issue the mandate on this decision on April 29, 2007, which wilJ return the case to the FERC for further proceedings. On December
, 2006 certain parties filed a petition for a writ of certiorari at the Supreme Court, which is currently pending. Based on information
currently known to the Company s management, the Company does not expect that this matter wilJ have a material adverse effect on its
financial condition, results of operations or cash flows.
Wah Chang Complaint
In May 2004, Wah Chang, a division ofTDY Industries, Inc. (a subsidiary of Allegheny TechnoJogies, Inc.), filed a complaint in the
United States District Court for the District of Oregon against numerous companies, incJuding A vista Corp., A vista Energy and A vista
Power. This complaint is similar to the Port of Seattle compJaint (which has been dismissed by the United States District Court and the
United States Court of AppeaJs for the Ninth Circuit) and seeks compensatory and treble damages for alleged violations of the
Sherman Act, the Racketeer Influenced and Corrupt Organization Act, as welJ as violations of Oregon state law. According to the
complaint, from September 1997 to September 2002, the plaintiff purchased eJectricity from PacifiCorp pursuant to a contract that was
indexed to the spot whoJesale market price of electricity. The plaintiff alleges that the defendants, acting in concert among themselves
and/or with Enron Corporation and certain affiliates thereof (colJectively, Enron) and others, engaged in a scheme to defraud electricity
customers by transmitting false market information in interstate commerce in order to artificialJy increase the price of electricity
provided by them, to receive payment for services not provided by them and to otherwise manipulate the market price of electricity,
and by executing wash trades and other forms of market manipulation techniques and sham transactions. The plaintiff also alJeges that
the defendants, acting in concert among themselves and/or with Enron and others, engaged in numerous practices involving the
generation, purchase, sale, exchange, scheduling and/or transmission of eJectricity with the purpose and effect of causing a shortage (or
the appearance of a shortage) in the generation of electricity and congestion (or the appearance of congestion) in the transmission of
electricity, with the ultimate purpose and effect of artificially and ilJegally fixing and raising the price of electricity in California and
throughout the Pacific Northwest. As a result of the defendants' alJeged conduct, the plaintiff alJegedly suffered damages of not Jess
than $30 milJion through the payment of higher electricity prices. In September 2004, this case was transferred to the United States
District Court for the Southern District of CaJifornia for consolidation with other pending actions. In February 2005, the Court granted
the defendants ' motion to dismiss the complaint because it determined that it was without jurisdiction to hear the plaintiffs complaint
based on, among other things, the excJusive jurisdiction of the FERC and the filed-rate doctrine. In March 2005, Wah Chang filed an
appeal with the United States Court of Appeals for the Ninth Circuit. The appeal of Wah Chang is stilJ pending before the Ninth
Circuit and oraJ argument is set for April 10, 2007. Because the resolution of this lawsuit remains uncertain, Jegal counseJ cannot
express an opinion on the extent, if any, of the Company s Jiability. However, based on information currently known to the Company
management, the Company does not expect that this lawsuit wilJ have a materiaJ adverse effect on its financial condition, results of
operations or cash flows.
City of Tacoma Complaint
In June 2004, the City of Tacoma, Department of Public Utilities, Light Division, a Washington municipal corporation (Tacoma
Power), filed a complaint in the United States District Court for the Western District of Washington against over fifty companies,
incJuding Avista Corp., Avista Energy and Avista Power. According to the complaint, Tacoma Power distributes electricity to
customers in Tacoma, and Pierce County, Washington, generates electricity at several facilities in western Washington and purchases
power under supply contracts and in the Northwest spot market. Tacoma Power s complaint is similar to the Port of Seattle complaint
(which has been dismissed by the United States District Court and the United States Court of Appeals for the Ninth Circuit) and seeks
compensatory and treble damages from alJeged violations of the Sherman Act. Tacoma Power alJeges that the defendants, acting in
concert, engaged in a pattern of activities that had the purpose and effect of creating the impressions that the demand for power was
higher, the supply of power was lower, or both, than was in fact the case. This alJegedJy resulted in an artificial increase of the prices
paid for power sold in California and elsewhere in the western United States during the period from May 2000 through the end of
2001. Due to the alJeged unlawful conduct of the defendants, Tacoma Power alJegedly paid an amount estimated to be $175.0 milJion
in excess of what it wouJd have paid in the absence of such alJeged conduct. In September 2004, this case was transferred to the
United States District Court for the Southern District of CaJifornia for consolidation with other pending actions. In February 2005, the
Court granted the defendants' motion to dismiss this complaint for similar reasons to those expressed by the Court in the Wah Chang
complaint described above. In March 2005, Tacoma Power filed an appeaJ with the United States Court of Appeals for the Ninth
Circuit. The appeal of Tacoma Power is stilJ pending before the Ninth Circuit and oraJ argument is set for ApriJ 10, 2007. Because
the resolution of this lawsuit remains uncertain, legal counsel cannot express an opinion on the extent, if any, of the Company
liability. However, based on information currently known to the Company s management, the Company does not expect that this
I FERC FORM NO.(ED. 12-88) Page 123.
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(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
lawsuit will have a materiaJ adverse effect on its financial condition, resuJts of operations or cash flows.
State of Montana Proceedings
In June 2003, the Attorney General of the State of Montana (Montana AG) fiJed a complaint in the Montana District Court on behalf of
the peopJe of Montana and the Flathead Electric Cooperative, Inc. against numerous companies, incJuding A vista Corp. The complaint
alleges that the companies illegally manipulated western electric and naturaJ gas markets in 2000 and 2001. This case was
subsequentJy moved to the United States District Court for the District of Montana; however, it has since been remanded back to the
Montana District Court.
The Montana AG aJso petitioned the Montana Public Service Commission (MPSC) to fine public utilities $1,000 a day for each day it
finds they engaged in alleged "deceptive, fraudulent, anticompetitive or abusive practices" and order refunds when consumers were
forced to pay more than just and reasonabJe rates. In February 2004, the MPSC issued an order initiating investigation of the Montana
retail electricity market for the purpose of determining whether there is evidence of unlawful manipulation of that market. The
Montana AG has requested specific information from Avista Energy and Avista Corp. regarding their transactions within the State of
Montana during the period from January 1 2000 through December 31 2001.
Because the resolution of these proceedings remains uncertain, legal counsel cannot express an opinion on the extent, if any, of the
Company s liability. However, based on information currently known to the Company s management, the Company does not expect
that these proceedings will have a materiaJ adverse effect on its financial condition, results of operations or cash flows.
Montana Public School Trust Fund Lawsuit
In October 2003, a lawsuit was originalJy fiJed by two residents of the State of Montana in the United States District Court for the
District of Montana against all private owners of hydroelectric dams in Montana, incJuding A vista Corp. The lawsuit alJeged that the
hydroeJectric facilities are located on state-owned riverbeds and the owners of the dams have never paid compensation to the state
public school trust fund. The lawsuit requests lease payments dating back to the construction of the respective dams and also requests
damages for trespassing and unjust emichment. In February 2004, the Company fiJed its motion to dismiss this lawsuit; PacifiCorp
and PPL Montana, the other named defendants, also fiJed a motion to dismiss, or joined therein. In May 2004, the Montana AG fiJed a
complaint on behalf of the state in the District Court to join in this lawsuit to allegedly protect and preserve state lands/school trust
lands from use without compensation. In July 2004, the defendants (incJuding Avista Corp.) filed a motion to dismiss the Montana
AG's complaint. In September 2004, the motion to dismiss the Montana AG's compJaint was denied, rejecting the defendants
argument, among other things, that the FERC has excJusive jurisdiction over this matter. In September 2005, the U.S. District Court
issued an order vacating its prior decision based on Jack of jurisdiction.
In November 2004, the defendants (including Avista Corp.) fiJed a petition for decJaratory reJief in Montana State Court requesting the
resolution of the controversy that the plaintiffs raised in federaJ court, as discussed above, and the Montana AG filed an answer
counterclaim and motion for summary judgment. In June 2005, Avista Corp. moved for leave to amend its complaint to, inter aJia, add
two causes of action relating to breach of contract and negligent misrepresentation arising out of its Clark Fork SettJement Agreement
that was entered into in 1999 with the State of Montana relating to the reJicensing of A vista Corp.' s Noxon Rapids Hydroelectric
Generating Project. On April 14, 2006, the Montana State Court granted the Montana AG's motion for summary judgment and denied
Avista Corp.'s motion to amend its complaint to add its breach of contract and negligent misrepresentation cJaims. However , the
Montana State Court granted Avista Corp.'s motion to amend its complaint to contend that the Clark Fork River is not navigable. The
Company contends that if the Clark Fork River was not navigable at the time of statehood in 1889, the State of Montana never
acquired ownership of the riverbeds under the equal footing doctrine. The Court determined that the Montana AG's cJaims for
compensation were not preempted by the Federal Power Act because it was not, on its face, in conflict with Montana law, nor were
they preempted by a federal navigational right for purposes of interstate commerce. The Court aJso rejected defenses based on
estoppel, waiver, and the statute of Jimitations. The Court did not relieve the Montana AG, however, of its obligation to prove that the
State of Montana actuaIJy owns the riverbeds or that the land is part of a school trust under the Montana Constitution. In addition, the
question of whether there is federal preemption under the Federal Power Act, not on its face, but as actually appJied in these
circumstances, and the question of compensation, still remain open issues in the case. On May 16, 2006, the State of Montana fiJed a
motion for summary judgment on the question of Jiability. On October 6, 2006, the Company fiJed several motions, which addressed,
among other things, the question of navigability of the Clark Fork River arguing that since the Clark Fork River was not navigabJe at
the time of statehood, the State of Montana never acquired ownership of the riverbeds under the equal footing doctrine. Oral
arguments on the Company s motions were heard in December 2006. The Company expects this matter to proceed in the normaJ
course of litigation and a trial date is currently scheduled for October 2007. Because the resolution of this lawsuit remains uncertain~c FORM NO.2 (ED.12-88) Page 123.
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NOTES TO FINANCIAL STATEMENTS (Continued)
legal counsel cannot express an opinion on the extent, if any, of the Company s Jiability. However, the Company intends to seek
recovery, through the rate making process, of any amounts paid.
Colstrip Generating Project Complaint
In May 2003, various parties (aU of which are residents or businesses of Colstrip, Montana) filed a consolidated complaint against the
owners of the Colstrip Generating Project (Colstrip) in Montana District Court. Avista Corp. owns a 15 percent interest in Units 3 & 4
of Colstrip. The plaintiffs aUege damages to buildings as a result of rising ground water, as wen as damages from contaminated waters
leaking from the lakes and ponds of Colstrip. The plaintiffs are seeking punitive damages, an order by the court to remove the Jakes
and ponds and the forfeiture of aU profits earned from the generation of Colstrip. The owners of Colstrip have undertaken certain
groundwater investigation and remediation measures to address groundwater contamination. These measures include improvements to
the lakes and ponds of Colstrip. The Company intends to continue to work with the other owners of Colstrip in defense of this
complaint. Because the resolution of this Jawsuit remains uncertain, legal counsel cannot express an opinion on the extent, if any, of
the Company s Jiability. However, based on information currently known to the Company s management, the Company does not
expect that this lawsuit win have a material adverse effect on its financial condition, results of operations or cash flows.
Environmental Protection Agency Administrative Compliance Order
In December 2003, PPL Montana, LLC, as operator of Colstrip, received an Administrative Compliance Order (ACO) from the
Environmental Protection Agency (BPA) pursuant to the Clean Air Act (CM). In January 2006, the EPA issued a draft settlement
agreement related to the ACO. The ACO aUeges that Colstrip Units 3 & 4 have been in violation of the CAA permit at Colstrip since
the units came on- Jine in the 1980s. The permit required the CoJstrip project operator to submit for review and approvaJ by the EP
an analysis and proposal for reducing emissions of nitrogen oxides to address visibility concerns if, and when, EP A promuJgates Best
Available Retrofit TechnoJogy requirements for nitrogen oxide emissions. The EP A is asserting that reguJations it promulgated in
1980 triggered this requirement. A vista Corp. and the other owners of Colstrip believe that the ACO is unfounded. The owners of
CoJstrip are discussing the proposed settlement agreement with the EPA, the Department of Environmental Quality (Montana DEQ)
and the Northern Cheyenne Tribe. The draft settlement agreement would resolve the potentialliabiJity related to this issue and would
result in the instaUation of additional nitrogen oxide emissions control equipment at Colstrip. Because the resolution of this issue
remains uncertain, legal counseJ cannot express an opinion on the extent, if any, of the Company s liability. However, the Company
intends to seek recovery, through the rate making process, of any amounts paid (including capitalized costs).
Colstrip Royalty Claim
Western Energy Company (WECO) supplies coal to the owners of Colstrip Units 3 & 4 under a Coal Supply Agreement and a
Transportation Agreement. Avista Corp. owns a 15 percent interest in Colstrip Units 3 & 4. The Minerals Management Service
(MMS) of the United States Department of the Interior issued an order to WECO to pay additional royalties concerning coal delivered
to Colstrip Units 3 & 4 via the conveyor beJt (4.46 miles Jong). The owners of CoJstrip Units 3 & 4 take delivery of the coaJ at the
western end (beginning) of the conveyor belt. The order asserts that additional royalties are owed MMS as a resuJt of WECO not
paying royalties in connection with revenue received by WECO from the owners of CoJstrip Units 3 & 4 under the Transportation
Agreement during the period October 1 , 1991 through December 31 , 2001. WECO's appeal to the MMS was substantiaUy denied in
March 2005; WECO has now appealed the order to the Board of Land Appeals of the u.S. Department of the Interior. The entire
appeal process could take several years to resolve. The owners of Colstrip Units 3 & 4 are monitoring the appeal process between
WECO and MMS. WECO has indicated to the owners of Colstrip Units 3 & 4 that if WECO is unsuccessful in the appeal process
WECO will seek reimbursement of any royalty payments by passing these costs through the CoaJ SuppJy Agreement. The owners of
Colstrip Units 3 & 4 advised WECO that their position wouJd be that these claims are not aUowabJe costs per the Coal Supply
Agreement nor the Transportation Agreement in the event the owners of Colstrip Units 3 & 4 were invoiced for these claims.
Presumably, royalty and tax demands for periods of time after the years in dispute and future years will be determined by the outcome
of the pending proceedings. Because the resolution of this issue remains uncertain, legal counsel cannot express an opinion on the
extent, if any, of the Company s liability. Based on information currentJy known to the Company s management, the Company does
not expect that this issue will have a material adverse effect on its financial condition, results of operations or cash flows. However
the Company would most likely seek recovery, through the rate making process, of any amounts paid.
Northeast Combustion Turbine Site
In August 2005 , a diesel fuel spill occurred at the Company s Northeast Combustion Turbine generating facility (Northeast CT)
located in Spokane, Washington. The Northeast CT site had fuel storage facilities that were leased to Co-op Supply, Inc., an affiliate
of Cenex Cooperative (Co-op). The fuel spill occurred when Co-op made a delivery of diesel to a tank that was already nearly fun
causing excess fuel to overflow into a containment area. It is estimated that approximately 26 000 gaUons of fuel escaped the
I FERC FORM NO.(ED. 12-88) Page 123.
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NOTES TO FINANCIAL STATEMENTS (Continued)
containment area and leaked into the soil beJow it. An investigation, supervised by the DOE, detennined the fueJ was, for the most
part, uniformly present in the soiJ to a depth of 30-35 feet. Groundwater below the site is at a depth of 170 feet. The Company
immediately commenced remediation efforts, incJuding the removal of contaminated soil and the related fuel storage faciJities.
Options to dispose of the contaminated soil are currentJy being evaluated. The Company accrued the estimated cJeanup costs during
2005 , which was not materiaJ to the Company s financial condition or results of operations. During the fourth quarter of 2005, the
Company filed a complaint against Co-op and an engineering fum to recover a substantial portion of the cJeanup costs. Through
mediation the Company recovered a substantial portion of the cJeanilp costs from Co-op and the engineering fmn in the fourth quarter
of 2006. Because of uncertainties related to the disposal of the contaminated soil, the Company s estimate of its liability couJd change
in future periods. Based on infonnation currentJy known to the Company s management, the Company does not believe that such a
change would be material to its financial condition, resuJts of operations or cash flows.
Harbor Oil Inc. Site
A vista Corp. used Harbor Oil Inc. (Harbor OiJ) for the recycJing of waste oiJ and non-PCB transformer oil in the late 1980s and early
1990s. In June 2005, EPA Region 10 provided notification to Avista Corp., as a customer of Harbor Oil, that the EPAhad determined
that hazardous substances were reJeased at the Harbor OiJ site in PortJand, Oregon and that Avista Corp. may be liable for investigation
and cJeanup of the site under the Comprehensive Environmental Response, Compensation, and Liability Act, commonJy referred to as
the federaJ "Superfund" law. Harbor OiJ's primary business was the collection and blending of used oil for sale as fuel to ships at sea.
The initiaJ indication from the EPA is that the site may be contaminated with PCBs, petroleum hydrocarbons, chlorinated solvents and
heavy metals. Thirteen other companies received a similar notice, incJuding current and former owners of the site, the Bonneville
Power Administration, PortJand General EJectric Company, Northwestern Energy and UnocaJ Oil. Several meetings have been held
with the EP A and certain of the Potentially ResponsibJe Parties (pRPs) to ask questions of the EP A regarding the Harbor Oil site, as
well as drafting an administrative compliance order reJated to conducting a remedial investigation and feasibiJity study for the site.
Based on the review of its records reJated to Harbor Oil, the Company does not believe it is a major contributor to this potentiaJ
environmental contamination based on the reJative volume of waste oil delivered to the Harbor Oil site. However, there is currentJy
not enough information to allow the Company to assess the probability or amount of a liability, if any, being incurred. As such, it is
not possible to make an estimate of any liability at this time.
Lake Coeur d'Alene
In July 1998, the United States District Court for the District of Idaho issued its finding that the Coeur d' Alene Tribe of Idaho (Tribe)
owns, among other things, portions of the bed and banks of Lake Coeur d' Alene (Lake) lying within the current boundaries of the
Coeur d' Alene Reservation. This action had been brought by the United States on behaJf of the Tribe against the state of Idaho. The
Company was not a party to this action. The United States District Court decision was affirmed by the United States Court of Appeals
for the Ninth Circuit. The United States Supreme Court affirmed this decision in June 2001. This ownership decision will result in
among other things, the Company being liable to the Tribe for compensation for the use of reservation lands under Section 10( e) of the
Federal Power Act.
The Company s Post Falls Hydroelectric Generating Station (post Fans), a facility constructed in 1906 with annuaJ generation of 10
aMW, utilizes a dam on the Spokane River downstream of the Lake which controls the water level in the Lake for portions of the year
(incJuding portions of the lakebed owned by the Tribe). The Company has other hydroeJectric facilities on the Spokane River
downstream of Post Fans, but these facilities do not affect the water level in the Lake. The Company and the Tribe are engaged in
discussions related to past and future compensation (which may incJude interest) for use of the portions of the bed and banks of the
Lake, which are owned by the Tribe. If the parties cannot agree on the amount of compensation, the matter could resuJt in Jitigation.
The Company cannot predict the amount of compensation that it wiJI ultimately payor the terms of such payment. The Company
intends to seek recovery, through the rate making process, of any amounts paid.
Spokane River Relicensing
The Company owns and operates six hydroelectric plants on the Spokane River, and five of these (Long Lake, Nine MiJe, Upper Falls
Monroe Street and Post Fans, which have a total present capability of 155.7 MW) are under one FERC license and are referred to as
the Spokane River Project. The sixth, LittJe Fans, is operated under separate Congressional authority and is not Jicensed by the FERc.
The license for the Spokane River Project expires on August 1 2007; the Company filed a Notice of Intent to Relicense in July 2002.
The formal consultation process involving pJanning and information gathering with stakeholder groups has been underway since that
time. The Company filed its new license applications with the FERC in July 2005. The Company has requested the FERC to consider
a license for Post Fans, which has a present capabiJity of 18 MW, that is separate from the other four hydroelectric plants because Post
Falls presents more complex issues that may take longer to resolve. than those dealing with the rest of the Spokane River Project.
I FERC FORM NO.(ED. 12-88) Page 123.
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NOTES TO FINANCIAL STATEMENTS (Continued)
granted, new licenses would have a term of 30 to 50 years. In the license applications, the Company proposed a number of measures
intended to address the impact of the Spokane River Project and enhance resources associated with the Spokane River.
Since the Company s July 2005 filing of appJications to relicense the Spokane River Project, the FERC has continued various stages
of processing the applications. In May 2006, the FERC issued a notice calling for terms and conditions regarding the two license
appJications. In response to that notice, a number of parties (including the Coeur d' Alene Tribe, the state of Idaho, Washington State
agencies, and the United States Department of Interior (DOl)) filed either recommended terms and conditions, pursuant to Sections
lO(a) and IOU) of the Federal Power Act (FPA), or mandatory conditions reJated to the Post Falls application, pursuant to Section 4(e)
of the FPA. The Company s initial estimate of the potential cost of the conditions proposed for Post Falls totaJ between $400 million
and $500 minion over a 50-year period. This assumes all conditions, both mandatory and recommended, as well as the Company
proposed conditions, wouJd be included in a final license issued by the FERC, which the Company beJieves to be unlikeJy. For the
rest of the Spokane River Project, which is Jocated in Washington, the Company s initial estimate of the cost of meeting the
recommended conditions, should they be included in a final license, totals between $175 miJlion and $225 miJlion over a 50-year
period. These cost estimates are based on the preliminary conditions and recommendations and wiJl be updated based on the outcome
of the FERC proceedings.
The Company requested a triaJ-type hearing on facts in front of a (ALJ) reJated to the DOl's mandatory conditions for Post Falls. In
January 2007, the ALJ issued his ruling regarding the Company s challenge of the facts. The Company believes that the ALJ's factuaJ
findings support, in several key areas, its analysis of the facts at hand. The ALl's factual findings also support the DOl's anaJysis in
certain areas as well.
The Bureau of Indian Affairs, which is part of the DOl and is charged with protecting project-related resources on the Coeur d' Alene
Indian Reservation and has authority to set conditions for the Company s license, is now expected to use the ALl's findings to
formulate final mandatory conditions for the operation of Post Falls.
The broader relicensing process continues under the jurisdiction of the FERC. The FERC issued a draft environmental impact
statement (DEIS) in December 2006 that is open for public review and comment untiJ March 6,2007. This document includes the
FERC's initial analysis of the applications , along with analysis of proposed recommended and mandatory terms and conditions. While
the FERC's analysis leads the Company to believe the ultimate cost of relicensing may be less than its earlier projections as disclosed
above, the Company is unable to base specific new cost estimates on it.
The relicensing process aJso triggers review under the Endangered Species Act. The Company prepared a draft BioJogical Assessment
in 2005. In the DEIS, the FERC anaJyzed potential project impacts on listed and threatened endangered species, and has determined
that the proposed action and continued operation of the Post Falls and Spokane River projects, is not likely to adversely effect any
threatened or endangered species. The FERC has issued a Biological Assessment and formally requested concurrence from the United
States Department of Fish and Wildlife Service (USFWS). The USFWS may either concur or request formaJ consultation. Should
they request formal consultation, additional evaluation win be required.
Following the comment period, the FERC will request final terms and conditions from agencies, the Coeur d'Alene Tribe and others.
After that time, the FERC would issue a finaJ environmental impact statement and, ultimately, license orders on Post Falls and the
Spokane River Project. In addition, the Company must receive Clean Water Act Certifications from the states of Idaho and
Washington for the Projects. AppJications for such certification were filed last JuJy with each state; the FERC is precluded from
issuing a license order untiJ such certification has been issued, or waived, by the states. The Company cannot predict the schedule for
these final phases of relicensing.
If the FERC is unable to issue new license orders prior to the August 1 , 2007 expiration of the current license, an annuaJ license wiJl
be issued, in effect extending the current Jicense and its conditions. The Company has no reason to believe that Spokane River Project
operations wouJd be interrupted in any manner reJative to the timing of the FERC's actions.
The totaJ annual operating and capitalized costs associated with the reJicensing of the Spokane River Project wiJl become better
known and estimable as the process continues. The Company intends to seek recovery, through the rate making process, of all such
operating and capitalized costs.
Clark Fork Settlement Agreement
DissoJved atmospheric gas levels exceed state of Idaho and federal water quality standards downstream of the Cabinet Gorge
I FERC FORM NO.(ED. 12-88) Page 123.
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NOTES TO FINANCIAL STATEMENTS (Continued)
Hydroelectric Generating Project (Cabinet Gorge) during periods when excess river flows must be diverted over the spillway. Under
the terms of the Clark Fork Settlement Agreement, the Company developed an abatement and mitigation strategy with the other
signatories to the agreement and compJeted the Gas Supersaturation Control Program (GSCP). The Idaho Department
Environmental QuaJity and the u.s. Fish and Wildlife Service approved the GSCP in February 2004 and the FERC issued an order
approving the GSCP in January 2005.
The GSCP provides for the opening and modification of one and, potentiaJly, both of the two existing diversion tunneJs buiJt when
Cabinet Gorge was originaJly constructed. When river flows exceed the capacity of the powerhouse turbines, the excess flows would
be diverted to the tunnels rather than reJeased over the spiJ1way. The Company has undertaken physicaJ and computer modeling
studies to confirm the feasibility and Jikely effectiveness of its tunnel solution. The Company has completed its preliminary design
development efforts (which incJude additional computer modeJ studies, some site investigation, and preliminary engineering design)
and the cost estimates have been updated. An analysis of the predicted total dissolved gas (TDG) performance indicates that it would
not meet the standards anticipated in the GSCP. The costs of modifying the flfSt tunneJ are now estimated to be $58 million (using
2006 doJlars with inflation projected at 5 percent) with the majority of these costs to be incurred in 2008 through 2011 , an increase
from prior estimates of $38 miJ1ion and an extension of the scheduJe of at least one year. The ca1cuJated updated cost estimates to
modify the second tunneJ are $39 million, an increase from prior estimates of $26 million. The second tunneJ would be modified only
after evaluation of the performance of the fust tunnel and such modifications wouJd commence no Jater than 10 years foJlowing the
completion of the fust tunneL The increases in costs are mainly due to inflation and large increases in materials costs, such as concrete
and steeL As a result of the predicted TDG performance, the new cost estimates and extension of the schedule, the Company is
meeting with stakehoJders to explore possibJe alternatives to the construction of the tunnels. The Company intends to seek recovery,
through the rate making process, of the costs to address the dissoJved atmospheric gas levels, incJuding the mitigation payments.
The U.S Fish and WiJdlife Service has Jisted buJi trout as threatened under the Endangered Species Act. The Clark Fork SettJement
Agreement describes programs intended to restore buJi trout populations in the project area. Using the concept of adaptive
management and working cJoseJy with the u.S. Fish and WildJife Service, the Company is evaluating the feasibility of fish passage at
Cabinet Gorge and Noxon Rapids. The results of these studies will heJp the Company and other parties determine the best use of funds
toward continuing fish passage efforts or other buJi trout population enhancement measures.
Air Quality
The Company must be in compliance with requirements under the CJean Air Act and CJean Air Act Amendments for its thermal
generating plants. The Company continues to monitor legislative deveJopments at both the state and national level for the potential of
further restrictions on sulfur dioxide, nitrogen oxide, carbon dioxide (incJuding cap and trade emission reduction programs), as weJl as
other greenhouse gas and mercury emissions. In particular, the EPA has finalized mercury emission regulations that will affect
coal-fued generation pJants, incJuding Colstrip. The new EP A regulations estabJish an emission trading program to take effect
beginning in January 2010, with a second phase to take effect in 2018. In addition, in 2006, the Montana DEQ adopted final rules for
the controJ of mercury emissions from coal-fued pJants that are more restrictive than EP A regulations. The new rules set strict
mercury emission limits by 2010, and put in pJace a recurring 1O-year review process to ensure facilities are keeping pace with
advancing technology in mercury emission controL The ruJes also provide for temporary alternate emission limits provided certain
provisions are met, and they aJlocate mercury emission credits in a manner that rewards the cJeanest faciJities. Avista Corp. owns a 15
percent interest in CoJstrip Units 3 & 4, located in Montana. Compliance with these new and proposed requirements and possible
additionaJ legislation or reguJations wiJl result in increases to capital expenditures and operating expenses for expanded emission
controls at the Company s thermal generating faciJities. The Company, aJong with the other owners of Colstrip, are in the process of
computing estimates for the amount of these costs and the impact the restrictions wiJ1 have on the operation of the faciJities. The
Company wiJ1 continue to seek recovery, through the rate making process, of the costs to comply with various air quality requirements.
Other Contingencies
In the normal course of business, the Company has various other legal cJaims and contingent matters outstanding. The Company
believes that any ultimate liability arising from these actions wiJ1 not have a material adverse impact on its financial condition, results
of operations or cash flows. It is possible that a change couJd occur in the Company s estimates of the probability or amount of a
liabiJity being incurred. Such a change, should it occur, could be significant.
The Company routinely assesses, based on in-depth studies, expert analyses and Jegal reviews, its contingencies, obligations and
commitments for remediation of contaminated sites, incJuding assessments of ranges and probabiJities of recoveries from other
responsibJe parties who have and have not agreed to a settlement and recoveries from insurance carriers. The Company s poJicy is to
I FERC FORM NO.(ED. 12-88) Page 123.
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NOTES TO FINANCIAL STATEMENTS (Continued)
accrue and charge to current expense identified exposures related to environmental remediation sites based on estimates of
investigation, cleanup and monitoring costs to be incurred.
The Company has potentiaJ Jiabilities under the Federal Endangered Species Act for species of fish that have either already been added
to the endangered species list, been listed as "threatened" or been petitioned for Jisting. Thus far, measures adopted and impJemented
have had minimaJ impact on the Company.
Under the federal Jicenses for its hydroelectric projects, the Company is obJigated to protect its property rights, including water rights.
The State of Montana is examining the status of aJI water right claims within state boundaries. Claims within the Clark Fork River
basin couJd potentiaJIy adversely affect the energy production of the Company s Cabinet Gorge and Noxon Rapids hydroelectric
facilities. The Company is participating in this extensive adjudication process, which is unlikeJy to be concluded in the foreseeable
future.
. As of December 31 , 2006, the Company s collective bargaining agreement with the International Brotherhood of EJectrical Workers
represented approximateJy 50 percent of aJI of Avista Corp.'s employees. The agreement with the local union in Washington and
Idaho representing the majority (approximately 90 percent) of the bargaining unit employees expires in March 2009. Two 10caJ
agreements in Oregon, which cover approximately 50 employees, expire in Apri1201O. Another local agreement in Oregon is up for
negotiations in 2007.
NOTE 24: POTENTIAL HOLDING COMPANY FORMATION
At the 2006 Annual Meeting of Shareholders on May 11,2006, the shareholders of Avista Corp. approved a proposal to proceed with
a statutory share exchange, which would change the Company s organization to a holding company structure. The hoJding company,
currently named A V A Fonnation Corp. (A V A), would become the parent of A vista Corp. After the contempJated dividend to A V A
the capital stock of A vista CapitaJ now held by A vista Corp. (A vista Capital Dividend), A V A would then also be the parent of A vista
Capital. The Avista Capital Dividend wouJd effect the structuraJ separation of Avista Corp.'s non-utility businesses from its regulated
utility business. Since the company s 9.75 percent Senior Notes due June 1,2008 contain a restriction that would prohibit the Avista
Capital Dividend (but not the hoJding company structure), the dividend wouJd not be distributed until the Senior Notes are retired.
A vista Corp. received approval from the FERC in April 2006 (conditioned on approval by the state regulatory agencies) and from the
IPUC in June 2006. A vista Corp. also has fiJed for approval from the utiJity reguJators in Washington, Oregon and Montana. The
statutory share exchange is subject to the receipt of the remaining regulatory approvals and the satisfaction of other conditions. If the
statutory share exchange and the implementation of the holding company structure are approved by regulators on terms acceptable to
the Company, it may be completed sometime after mid-2007.
The IPUC accepted a stipulation entered into between A vista Corp. and the IPUC Staff that sets forth a variety of conditions, which
would serve to segregate the Company s utility operations from the other businesses conducted by the hoJding company. The
stipulation would require A vista Corp. to maintain certain common equity levels as part of its capital structure. A vista Corp. has
committed to increase its actual utiJity common equity component to 35 percent by the end of 2007 and 38 percent by the end of 2008
which is consistent with provisions of the Company s Washington general rate case implemented on January 1 2006. The caJculation
of the utility equity component is essentiaJIy the ratio of Avista Corp.s total common equity to total capitalization excluding, in each
case, Avista Corp.'s investment in Avista Capital. In addition, IPUC approvaJ would be required for any dividend from Avista Corp.
to the holding company that wouJd reduce utility common equity beJow 25 percent of totaJ capitalization which, for this purpose
includes long and short-term debt, capitalized lease obligations and preferred and common equity.
In January 2007, Avista Corp. entered into a similar stipulation with the WUTC staff. As of February 26 2007, the stipulation is
subject to approval by the WUTe. The stipuJation would require Avista Corp. to increase its actual utility common equity component
to 40 percent by June 30, 2008. In addition, WUTC approval would be required for any dividend from A vista Corp. to the hoJding
company that would reduce utility common equity below 30 percent of total capitaJization.
Pursuant to the Plan of Share Exchange, a statutory share exchange would be effected whereby each outstanding share of A vista Corp.
common stock would be exchanged for one share of A V A common stock, no par value, so that hoJders of Avista Corp. common stock
would become holders of A V A common stock and Avista Corp. would become a subsidiary of A V A. The other outstanding securities
of Avista Corp. would not be affected by the statutory share exchange, with limited exceptions for stock options and other securities
outstanding under equity compensation and empJoyee benefit plans.
I FERC FORM NO.2 (ED. 12-88) Page 123.
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(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubm ission 04/18/2007 2006/04
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 25. INFORMATION SERVICES CONTRACTS
The Company has information services contracts that expire between 2007 and 2012. Total payments under these contracts were $12.
million in 2006, $12.8 million in 2005 and $12.8 million in 2004. The majority of these costs are included in operation expenses in the
Statements of Income. Minimum contractual obJigations under the Company s information services contracts are $12.2 million in
2007, $12.6 million in 2008, $13.0 million in 2009, $13.4 million in 2010, $13.8 minion in 2011 and $14.2 million in 2012. The most
significant of these contracts provides for increases due to changes in the cost of Jiving index and further provides flexibiJity in the
annual obligation from year-to-year subject to a three-year true-up cycle.
NOTE 26. DISPOSITION OF SOUTH LAKE TAHOE PROPERTIES
In April 2005, A vista Corp. completed the saJe of its South Lake Tahoe, CaJifornia natural gas properties to Southwest Gas
Corporation as part of Avista Corp.'s strategy to focus on its business in the northwestern United States. This was the Company s only
reguJated utiJity operation in California" The cash proceeds received during 2005 were approximately $16.6 miJlion. The total pre-tax
gain for 2005 was $4.1 million related to the Company s disposition of its South Lake Tahoe natUral gas properties. TotaJ revenues for
2004 from the South Lake Tahoe region were approximately $20.3 million (or 6 percent of total natural gas revenues) and
approximately 22.1 million therms (or 4 percent of totaJ therms) were delivered to South Lake Tahoe customers.
NOTE 27. SUPPLEMENTAL CASH FLOW INFORMATION
Other Cash Flows from Operating Activities:
Power and naturaJ gas deferraJs
Change in special deposits
Change in other current assets
Non-cash stock compensation
ESOP Dividends
2006 2005
$94 827 987 $81 029,276
$63,361 034 $26,405,411
$(6,497,199)$(7 451 146)
366 143 $(3 235 855)
$( 1 ,405,850)$(1,167,585)
744 610
$415 596 $37 791
Cash paid for interest
Cash paid for income taxes
I FERC FORM NO.2 (ED. 12-88) Page 123.
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
Avista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
STATEMENTS OF ACCUMULATED COMPREHENSIVE INCOME, COMPREHENSIVE INCOME, Ai' D HEDGING ACTIVITIES
1. Report in columns (b),(c),(d) and (e) the amounts of accumulated other comprehensive income items, on a net-of-tax basis, where appropriate.
2. Report in columns (f) and (g) the amounts of other categories of other cash flow hedges.
3. For each category of hedges that have been accounted for as "fair value hedges , report the accounts affected and the related amounts in a footnote.
Line Item Unrealized Gains and Minimum Pension Foreign Currency Other
No.Losses on Available-Liability adjustment Hedges Adjustments
for-Sale Securities (net amount)
(a)(b)(c)(d)(e)
1 Balance of Account 219 at Beginning of
Preceding Year 16,944 388)
2 Preceding Otr/Yr to Date Reclassifications
from Acct 219 to Net Income
3 Preceding Ouarter/Year to Date Changes in
Fair Value 63,702)681,415)1,407,305
4 Total (lines 2 and 3)702)681,415)1 ,407 305
5 Balance of Account 219 at End of
Preceding Ouarter/Year 63,702)19,625,803)1 ,407 305
6 Balance of Account 219 at Beginning
Current Year 702)625 803)407 305
7 Current Otr/Yr to Date Reclassifications
from Acct 219 to Net Income 80,309
8 Current Ouarter/Year to Date Changes in
Fair Value 16,607)644 702 38,746)
9 Total (lines 7 and 8)63,702 644 702 746)
Balance of Account 219 at End of Current
Ouarter/Year 981 101)368 559
FERC FORM NO.(NEW 06-02)Page 122a
Name of Respondent This ~ort Is: Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr) End 2006/04A vista Corporation (2) DA Resubmission 04/18/2007
STATEMENTS OF ACCUMULATED COMPREHENSIVE INCOME, COMPREHENSIVE INCOME, A D HEDGING ACTIVITIES
Other Cash Flow Other Cash Flow Totals for each Net Income (Carried Total
Line Hedges Hedges category of items Forward from Com prehensive
No.Interest Rate Swaps Energy Commodity Derivatives recorded in Page 117, Line 78)Income
Account 219
(f)
(g)
(h)(i)
213,530)21,157 918)
889,250)667,900)557,150)
517,227 236,505 2,415,920
372 023)568 605 141 230)
585 553)568 605 299 148)
585,553)568 605 23,299,148)
2,429,700 , 546,000)964 009
809 492 029,287)369 554
239,192 575 287)333 563
346 361)682)965 585)
FERC FORM NO.2 (NEW 06-02)Page 122b
IS ~o s: a e 0 epo(1) ~An Original (Mo, Da, Yr)(2) DA Resubmission 04/18/2007
SUMMA Y OF UTILITY PLANT AND ACCUM LATED PROVISIONS
FOR DEPRECIATION. AMORTIZATION AND DEPLETION
Report in Column (c) the amount for electric function, in column (d) the amount for gas function, in column (e), (f), and (g) report other (specify) and in
column (f) common function.
End of
(a)
Total Company for the
Current Year/Quarter Ended
(b)
Electric
(c)
Line
No.
Classification
1 Utility Plant
2 In Service
3 Plant in Service (Classified)
4 Property Under Capital Leases
5 Plant Purchased or Sold
6 Completed Construction not Classified
7 Experimental Plant Unclassified
8 Total (3 thru 7)
9 Leased to Others
10 Held for Future Use
11 Construction Work in Progress
12 Acquisition Adjustments
13 Total Utility Plant (8 thru 12)
14 Accum Prov for Depr, Amort, & Depl
15 Net Utility Plant (13 less 14)
16 Detail of Accum Prov for Depr, Amort & Depl
17 In Service:
910,719,671
525,291
282 217 637
916 244 962 282 217,637
89,177,799
211 433
027,634 194
024 356,307
003 277 887
76,081 096
358,298,733
778,218,995
580 079 738
18 Depreciation
19 Amort & Depl of Producing Nat Gas Land/Land Right
20 Amort of Underground Storage Land/Land Rights
21 Amort of Other Utility Plant
22 Total In Service (18 thru 21)
23 Leased to Others
24 Depreciation
25 Amortization and Depletion
26 Total Leased to Others (24 & 25)
27 Held for Future Use
28 Depreciation
29 Amortization
30 Total Held for Future Use (28 & 29)
31 Abandonment of Leases (Natural Gas)
32 Amort of Plant Acquisition Adj
33 Total Accum Prov (equals 14) (22 26,30,32)
158 560
024 356 307 778 218 995
FERC FORM NO.2 (ED. 12-89)Page 200
Gas
This ~ort Is: Date of Report(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/18/2007
SUMMARY OF UTILITY PLANT AND ACCUMULATED PROVISIONS
FOR DEPRECIATION. AMORTIZATION AND DEPLETION
Other (Specify) Other (Specify) Other (Specify)
Year/Period of Report
End of 2006/04
Name of Respondent
A vista Corporation
Common
(d)(e)(f)
(g)
(h)
Line
No.
539.273,194
619,845
89,228,840
905,446
540 893,039 93.134 286
6,476 151
211,433
569 580 623
222 788,960
346,791 663
620,552
754 838
23,348 352
76,406,486
158 560
222 788 960 348,352
FERC FORM NO.2 (ED. 12-89)Page 201
Name of Respondent This report is:
( X) An Original
Date of Report
(Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007
Year Ending
Dec. 31 2006
GAS PLANT IN SERVICE ACCOUNTS 101 102,103, AND 106
1. Report below the original cost of gas plant in service according estimated basis if necessary, and include the entries in column (c).to the prescribed accounts. Also to be included in column (c) are entries for reversals of tentative
2. In addition to Account 101 Gas Plant in Service (Classified), distributions of prior year reported in column (b). Likewise, if the
this page and the next include Account 102, Gas Plant Purchased respondent has a significant amount of plant retirements which have
or Sold Account 103 Experimental Gas Plant Unclassified, and not been classified to primary accounts at the end of the year, include
Account 106, Completed Construction Not Classified-Gas. in column (d) a tentative distribution of such retirements, on an
3. Include in column (c) and (d), as appropriate, corrections of estimated basis, with appropriate contra entry to the account for
additions and retirements for the current or preceding year. accumulated depreciation provision. Include also in column (d)
4. Enclose in parenthesis credit adjustments of plant accounts to reversals of tentative distributions of prior year's unclassified
indicate the negative effect of such accounts. retirements. Attach supplemental statement showing the account
5. Classify Account 106 according to prescribed accounts, on an distributions of these tentative classifications in columns (c) and (d).
Balance at
Beginning of Year Additions
217,422 120 037
217,422 120,037
628
290 730
918 730
Account
INTANGIBLE PLANT
TOTAL Manufactured Gas Production Plant Enter tolal of lines 8-
PRODUCTS EXTRACTION PLANT
FERC FORM NO.2 (ED. 12-96)Page 204
Name of Respondent This report is:
( XJ An Original
Date of Report
(Mo, Da, Yr)
Year Ending
Avista Corp.J A Resubmission April 18, 2007 Dec. 31 , 2006
GAS PLANT IN SERVICE ACCOUNTS 101 , 102, 103, AND 106 Continued
including the reversals of the prior years tentative account and show in column (f) only the offset to the debits or credits to
distributions of these amounts. Careful observance of the primary account classifications.
above Instructions and the texts of Account 101 and 106 will 7. For Account 399, state the nature and use of plant included in
avoid serious omissions of respondent's reported amount for this account and if substantial in amount submit a suplementaryplant actually in service at end of year. statement'showing subaccount classification of such plant
6. Show in column (f) reclassifications or transfers within conforming to the requirements of these pages.
utility plant accounts. include also in column (f) the additions 8. For each amount comprising the reported balance and changes
or reductions of primary account classifications arising from in Account 102, state the property purchased or sold, name of
distribution of amounts initially recorded in Account 102. In vendor or purchaser, and date of transaction. If proposed journal
showing the clearance of Account 102, include in column (e) entries have been filed with the Commission as required by the
the amounts with respect to accumulated provision for Uniform System of Accounts, give date of such filing.
depreciation, acquisition adjustments, etc.
Retirements Adjustments Transfers Balance at End of Year Line
No.
212 598 124 861
212 598 124,861
628
618 60,402
618 68,030
FERC FORM NO.2 (ED. 12-96)Page 205
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 , 2006
GAS PLANT IN SERVICE (ACCOUNTS 101 , 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
346 Gas Measuring and Regulating Equipment
347 Other Equipment
TOTAL Products Extraction Plant (Enter Total of lines 28 thru 35)
TOTAL Natural Gas Production Plant (Enter Total of line 36)
Manufactured Gas Production Plant (Submit Supplementary Statement)918 730 I
TOTAL Production Plant (Enter Total of lines 37 and 38)918 730
NATURAL GAS STORAGE AND PROCESSING PLANT
Underground Storage Plant
350.1 Land 412 611
350.2 Rights-of-Way 874 35,938
351 Structures and Improvements 063 700 061
352 Wells 779 157 259
352.1 Storage Leaseholds and Rights 254 354
352.2 Reservoirs 203,330
352.3 Non-recoverable Natural Gas 971 926
353 Lines 823,423
354 Compressor Station Equipment 016,984 (15 320\
355 Measuring and Regulating Equipment 171 919
356 Purification Equipment 407 251
357 Other Equipment 1 ,675 980 931
TOTAL Underground Storage Plant (Enter Total of lines 42 thru 53)804 509 121 ,868
Other Storage Plant
360 Land and Land Rights
361 Structures and Improvements
362 Gas Holders
363 Purification Equipment
363.1 Liquefaction Equipment
363.2 Vaporizing Equipment
363.3 Compressor Equipment
363.4 Measuring and Regulating Equipment
363.5 Other Equipment
TOTAL Other Storage Plant (Enter Total of lines 56 thru 64)
Base Load Liquefied Natural Gas Terminaling and Processing Plant
364.1 Land and Land Rights
364.2 Structures and Improvements
364.3 LNG Processing Terminal Equipment
364.4 LNG Transporation Equipment
364.5 Measuring and Regulating Equipment
364.6 Compressor Station Equipment
364.7 Communications Equipment
364.8 Other Equipment
TOTAL Base Load Liq Nat'l Gas, Terminal and Processing Plant (lines 67-
TOTAL Nat'l Gas Storage and Processing Plant (Total of lines 54, 65 and 7 18,804 509 121 868
TRANSMISSION PLANT
365.1 Land and Land Rights
365.2 Rights-of-Way
366 Structures and Improvements
FERC FORM NO.2 (ED. 12-96)Page 206
Name of Respondent This report is:Date of Report Year Ending
( XJ An Original (Mo, Os, Yr)
Avista Corp.J A Resubmission April 18. 2007 Dec. 31 2006
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)(f)
(g)
No.
618 030
618 68,030
412,611
812
1 ,075,761
858 416
254,354
203,330
971 ,926
823,423
001 ,664
171 919
407 251
685,911
926,377
18,926,377
IFERC FORM NO.2 (ED. 12-96)Page 207
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.J A Resubmission April 18, 2007 Dec. 31,2006
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 06\(Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b\(c)
367 Mains
368 Compressor Station Eauipment
369 Measurina and Reaulatina Eauipment
370 Communications Eauipment
371 Other Equipment
TOTAL Transmission Plant (Enter Totals of lines 78 thru 85)
DISTRIBUTION PLANT
374 Land and Land Riahts 113,224 240)
375 Structures and Improvements 689,559 898
376 Mains 234 294,331 239,075
377 Compressor Station Equipment
378 Measuring and Regulating Equipment-General 4,443,473 533 726
379 Measuring and Regulating Equipment-City Gate 070,053 182 327
380 Services 166 958 877 139,927
381 Meters 990 248 223,416
382 Meter Installations
383 House Regulators
384 House Regulator Installations
385 Industrial Measuring and Regulating Station Eauipment 014 219 081
100 386 Other Property on Customers' Premises
101 386 Other Equipment 539
102 TOTAL Distribution Plant (Enter Totals of lines 88 thru 101)471 574 523 33,443,211
103 GENERAL PLANT
104 389 Land and Land Riahts 261 685
105 390 Structures and Improvements 373 535 299,928
106 391 Office Furniture and Equipment 378 871 685
107 392 Transportation Equipment 160 725 341 004
108 393 Stores Equipment 908 537
109 394 Tools, Shop, and Garaae Equipment 368 662 373 539
110 395 Laboratorv Equipment 914,508
111 396 Power Operated Equipment 3,496,452 194 735
112 397 Communication Equipment 553,568 845,449
113 398 Miscellaneous Equipment 31,332
114 Subtotal (Enter Totals of lines 104 thru 113)639 246 103 877
115 399 Other Tanaible Property
116 TOTAL General Plant (Enter Totals of lines 114 and 115)15,639 246 103 877
117 TOTAL (Accounts 101 and 106)507,310,618 36,794 722
118 Gas Plant Purchased (See Instruction 8\
119 (Less) Gas Plant Sold (See Instruction 8\
120 Experimental Gas Plant Unclassified
121 TOTAL Gas Plant in Service (Enter Totals of Iines 117 thru 120\507,310,618 I 36,794 722
FERC FORM NO.2 (ED. 12-96)Page 208
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Oa, Yr)
Avista Corp.) A Resubmission April 18,2007 Dec. 31, 2006
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)
(g)
No.
, ..
077 102,907
864 734 594
881 956 253,651,450
265 949,934
208 247 173
1 ,363,689 171 735,115
483 767 65,729,898
237 085,063
100
539 101.102
103554 0 260,131 104
820 665,643 105
388,556 106
513 5,435,216 107
139,445 108
588 714 613 109
487 914,021 110
691,187 111
102 062 296 955 112
332 113
206 025 18,537 098 114
115
206 025 18,537 098 116
212 302 540,893,038 117
118
119
120
212 302 540 893 038 121
FERC FORM NO.2 (ED. 12-96)Page 209
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmisslon April 18, 2007 Dec. 31 2006
CONSTRUCTION WORK IN PROGRESS-GAS (ACCOUNT 107
1. Report below descriptions and balances at end of year of and Demonstration (see Account 107 of the Uniform System of
projects in process of construction (Account 107).Accounts).
2. Show items relating to "research, development, and 3. Minor projects (less than $1 000,000) may be grouped.
demonstration" projects last, under a caption Research,
Construction Work in Progress-Gas Estimated Additional
Line Description of Project (Account 107)Cost of Project
No.(a)(b)(c)
STATE OF WASHINGTON
Minor Projects (97) Under $1,000,000 504 132 685,816
STATE OF IDAHO
Minor Projects (54) Under $1 ,000 000 1 ,260,333 658
STATE OF OREGON
Minor Projects (77) under $1 ,000,000 873 875 218,618
Shady Cove HP Main extension 651 239 360 982
COMMON-W AIID
Minor Projects (2) under $1 000 000 126 737 480,765
COMMON-WAIl D/OR
Minor Projects (2) under $1 ,000,000 835
TOTAL 6,476 151 19,751 838
FERC FORM NO.2 (ED. 12-96)Page 216
Name of Respondent This Report Is:Date of Report Year of Report
(l)1KI An Original (Mo, Va, Yr)
A vista Corporation
(2)0 A Resubmission 18/Apr/07 December 31 2006
ACCUMULATED PROVISION FOR DEPRECIATION OF GAS UTILITY PLANT (Account 108)
1. Explain in footnote any important adjustments the respondent has a significant amount of plant retired at
during year.year end which has not been recorded anellor classified to
2. Explain in a footnote any difference between the amount the various reserve functional classifications, make
for book cost of plant retired, line 11, column (c), and that preliminary closing entries to tentatively functionalize the
reported for gas plant in service, pages 204-209, column (d),book cost of the plant retired. In addition, include all costs
excluding retirements of non-depreciable property.included in retirement work in progress at year end in the
3. The provisions of Account 108 in the Uniform System appropriate functional classifications.
of Accounts require that retirements of depreciable plant 4. Show separately interest credits under a sinking fund
be recorded when such plant is removed from service.or similar method of depreciation accounting.
Section A. Balances and Changes During Year
Line Item Total Gas Plant in Gas Plant Held Gas Plant Leased
No.(c+d+e)Service for Future Use to Others
(a)(b)(c)(d)(e)
Balance Beginning of Year 191 900,186 191 900 186
Depreciation Provisions for Year
Charged to
(403) Demeciation Expense 970 239 970,239
(413) Exp. of Gas PIt. Leas. to Others
Transportation Expenses-Clearing 263 360 263,360
Other Clearing Accounts
Other Accounts (Specify):
Transfer to common (transporation clear)
TOTAL Deprec. Prov. for Year 233 599 15,233 599
(Enter Total of lines 3 thru 8)
Net Charges for Plant Retired:
Book Cost of Plant Retired 925,588 925 588
Cost of Removal 240,042 240 042
Salvage (Credit)993 993
TOTAL Net Chrgs. for Plant Ret.153,637 3,153 637
(Enter Total oflines 11 thru 13)
Other Debit or Credit Items (Describe)086,357 086,357
Balance End of Year (Enter
Total of lines 1, 9, 14, 15, and 16)205 066 505 205,066,505
Section B. Balances at End of Year According to Functional Classifications
Production-Manufactured Gas (79 365)(79,365)
Prod. and Gathering-Natural Gas
Products Extraction-Natural Gas
Underground Gas Storage 863,887 863,887
Other Storage Plant
Base Load LNG Term and Proc. Pit.
Transmission
Distribution 187 384 072 187 384 072
General 897 911 897 911
TOTAL (Enter Total of lines 18 205 066 505 205 066 505
thru 26)
FERC FORM NO.2 (ED. 12-87)Page 219
Name of Respondent This Report Is:Date of Report Year of Report
~ An Original (Mo, Da, Yr)
Avista Corporation 0 A Resubmission April 18, 2007 Dec, 31 , 2006
GAS STORED (ACCOUNT 117.117.117.117.4 164.164., AND 164.
If durring the year adjustments were made to the stored gas inventory State in a footnote the basis of segregation of inventory between
reported in columns (d), (f), (g), and (h) (such as to correct cumulative current and noncurrent protions. Also state in a footnote the
inaccuracies of gas measurements), explain in a footnote the reason for method used to report storage (I.e. fixed asset method or
the adjustments, the Dth and dollar amount of adjustment, and account inventory method).
charged or credited.
2 Report in column (e) all encroachments during the year upon the volumes
designated as base gas, column (b), and system balancing gas, column
( c ), and gas property recordable in the plant accounts.
(Account (Account Noncurrent (Account Current LNG LNG
ine Description 117,117.(Account 117,117.4)(Account 164.(Account 164.(Account 164.Total
No,(a)(b)(c)(d)(e)(f)
(g)
(h)(i)
Balance at Beginning of Year 469,887 006,819 13,476,706
Gas Delivered to Storage 10.336,898 10,336,898
Gas Withdrawn from Storage 10,901 466 10,901 466
Other Debijs and Credits
Balance at End of Year 905,319 006,819 12,912,138
Dth 032 819 325,715 358,534
Amount Per Dekatherm $5.8566 $3.0911 $5.4746
State basis of segregation of inventory between current and noncurrent portions:
Current portion is gas expected to be sold within a 24 month period. All other gas is considered non-current.
FERC FORM NO.2 (REV 04-04)Page 220
This Page Intentionally Left Blank
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
Avista Corporation
(1) An Original (Mo, Da, Yr)
End of 2006/04(2) DA Resubmission 04/18/2007
INVESTM NTS IN SUBSIDIARY COMPANIES Account 123.
1. Report below investments in Accounts 123., investments in Subsidiary Companies.
2. Provide a subheading for each company and List there under the information called for below. Sub - TOTAL by company and give a TOTAL in
columns (e),(f),(g) and (h)
(a) Investment in Securities - List and describe each security owned. For bonds give also principal amount, date of issue, maturity and interest rate.
(b) Investment Advances - Report separately the amounts of loans or investment advances which are subject to repayment, but which are not subject to
current settlement. With respect to each advance show whether the advance is a note or open account. List each note giving date of issuance, maturity
date, and specifying whether note is a renewal.
3. Report separately the equity in undistributed subsidiary earnings since acquisition.The TOTAL in column (e) should equal the amount entered for
Account 418.
I,-me Descnptlon of Investment Date Acquired Date Of Amount of _Investment at
No.(a)(b)l~rity
Beginning of Year
(d)
2 Avista Capital - Common Stock 1997 184 251 609
3 Avista Capital- Equity in Earnings 50,827 604
4 OCI Investment in Subs 658,585
Total Cost of Account 123.1 $TOTAL 237 737 798
FERC FORM NO.2 (ED. 12-89)Page 224
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)
End of 2006/04(2) DA Resubmission 04/18/2007
INVESTMENTS IN SUBSIDIARY COMPANIES (Account 123.1) (Continued)
4. For any securities, notes, or accounts that were pledged designate such securities, notes, or accounts in a footnote, and state the name of pledgee
and purpose of the pledge.
5. If Commission approval was required for any advance made or security acquired, designate such fact in a footnote and give name of Commission
date of authorization, and case or docket number.
6. Report column (f) interest and dividend revenues form investments, including such revenues form securities disposed of during the year.
7. In column (h) report for each investment disposed of during the year, the gain or loss represented by the difference between cost of the investment (or
the other amount at which carried in the books of account if difference from cost) and the selling price thereof, not including interest adjustment includible
in column (f).
8. Report on Line 42, column (a) the TOTAL cost of Account 123.
~qUlty In buDsidiary Revenues for Year Amount of Investment at Gain or Loss from Investment LineEarnin~s of Year
(f)
End ~f Year Disp~sed of No.
184 251 609
16,738 728 989,256 577 075
296,708 361,877
442 020 989,256 247 190,561
FERC FORM NO.2 (ED. 12-89)Page 225
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 2006
PREPAYMENTS (ACCOUNT 165)
1. Report below the particulars (details) on each prepayment.
Line Nature of Prepayment Balance at End of
No.Year(in dollars)
(a)(b)
Prepaid Insurance 908 731
Prepaid Rents
Prepaid Taxes
Prepaid Interest
Miscellaneous Prepayments 091 722
TOTAL 000,453
FERC FORM NO.(ED. 12-96)Page 230
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
0 HER REGULATORY ASSETS (Account 182.
1. Report below the particulars (details) called for conc~rning other regulatory assets, including rate order docket number, if applicable.
2. Minor items (5% of the Balance in Account 182.3 at end of period, or amounts less than $50 000 which ever is less), may be grouped
by classes.
3. For Regulatory Assets being amortized, show period of amortization.
Line Description and Purpose of Balance at Debits CREDITS Balance at end of
No.Other Regulatory Assets Beginning of vvrluen on uunng vvrluen on uurlng Current QuarterNear
Current the QuarterNear the Period
QuarterNear Account Charged Amount
(a)(b)(c)(d)(e)(f)
FAS 106 - Post Retirement Benefits (182300)309264 926400 472 752 836,512
Amortization period is 1996-2012
FAS 158 - Post Retirement Liability (182305)54,192 195 192 195
FAS 109 (182310 & 182320)114390454 283170/180 201 214 106,189,240
Idaho AMR (182330)8,404214 669 175 16,073,389
RTO Deposit - Grid West (182340)354 029 354 029
BPA Residential Exchange (182345 & 182346)454 297 923 979 378 276
WA ERM Deferral (182350)052 195 557290/419 824 960 70,227,235
WA Amortization (182360)342 601 557162/419 342 601
New Generation Installation (182370)368 472 407370 184236 184 236
Wartsilla Units (182372)271 705 378,424 407380 153 132 3,496 997
Mark-To-Market Short-Term (182374)650 144 650 144
FAS 143 - ARO (182376)968,560 323 434 291,994
OR DSM Lost Margin (182380)( 1 131 560)Various 341 297 1,472 857
Workers Compensation (182383)199,404 225 159 424 563
CS2 Levelized Return (182384)619 155 371 328 990,483
TOTAL 225 248 761 130 087 867 520,192 323,816,436
FERC FORM NO.2 /3-0 (REV. 02-04)Page 232
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04
(2) CIA Resubmission 04/18/2007
M SCELLANEOUS DEFFERED DEBITS (Account 186)
1. Report below the particulars (details) called for conc~rning miscellaneous deferred debits.
2. For any deferred debit being amortized, show period of amortization in column (a)
3. Minor item (1 % of the Balance at End of Year for Account 186 or amounts less than $50 000, whichever is less) may be grouped by
classes.
Line Description of Miscellaneous Balance at Debits CREDITS Balance at
No.Deferred Debits Beginning of Year ~9coum Amount End of Year
Char~ed
(a)(b)(c)(e)(f)
Colstrip Common Fac.110 999 406 110,999
W A Deferred Power Costs 138 618 206,864 68,246
WA ERM YTD Company Band 000,000 398,336 601 664
WA ERM YTD Contra Account 000,000 398,336 601,664
Regulatory Asset ROT Deposit 711 960 711,960
Colstrip Common Fac.355,642 406 355,642
ID Deferred Power 90,403 623 019,274 VAR 96,422 897
ID Accumulated Surcharge Am 416 882 557 648,736 065,618
Payroll Accrual 938 970 VAR 39,262 899,708
Payroll Loading Clearing 290 803 290 803
Plant Allocation of clrg jrls 025,687 025 687
Misc Error Suspense 93,765 VAR 274 577 180,812
. 22
Unamortized AIR Sale 21,937 750 187
Intangible Pension Asset 4,404 832 4,404 832
Nez Perce Settlement 197 233 557 212 192 021
Misc Deferred Debit Centralia 596,927 576 623,503
Centralia Mine Env Balance
Opportunity Sub Sale Proceeds 188,758 188 758
ID Panhandle Forest Use Permit 153,881 730 182,611
Metro-Sunset 115KV TE 309,756 242 312 998
Incremental trans costs 129 374 107 383 236
UPRR Permit Conv 331,696 1,412 333,108
Insurance Recw CDA Lake 118,287 26,803 145,090
Corp reorg stk iss. costs 118 086 118 086
Nez Perce Permit Conversion 108 211 454,237 562 448
Misc Work Orders -::$50,000 150,111 111 155 956
Subsidiary Billings 109,613 615 273 VAR 724 886
Null" Projects directly to 186 208,472 587 250 378,778
Misc. Work in Progress
ueferred Regulatory Comm.
Expenses (See pages 350 - 351)
TOTAL 675 589 297 127
FERC FORM NO.2 (ED. 12-94)Page 233
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
MISCELLANEOUS DEFFERED DEBITS (Account 186)
1. Report below the particulars (details) called for conc~rning miscellaneous deferred debits.
2. For any deferred debit being amortized, show period of amortization in column (a)
3. Minor item (1% of the Balance at End of Year for Account 186 or amounts less than $50 000, whichever is less) may be grouped by
classes.
Line Description of Miscellaneous Balance at Debits CREDITS Balance at
No.Deferred Debits Beginning of Year ~9count Amount End of YearChar
(a)(b)(c)(e)(f)
Conservation
Regulatory Assets Consv 5,124,643 1 ,280,293 844,350
Oregon Gas Comm Consvt 25,811 573 384
Oregon Common Gas Eff 357,732 703 412 435
WPNG HE Wtr Htrs-Oregon 522 183 046 572 229
WPNG HE Furnaces 388 705 447 692 836 397
WPNG OR Res Low 1 339,876 19,870 908 359,746
Oregon DSM 085 085
Consv. & Renewable Disco 644 618 908 644 618
Energy Star Homes 136 212 136,212
Energy Star Manufactored Homes 062 062
HE Washing Machines 312 55,312
Regulatory Assets Consv " 556,983 101,144 455,839
Regulatory Assets Consv 456,849 336,413 120,436
Conservation Rate Credit 286,095 286 095
Conservation Rate Credit CRC 122 612 122,612
Hamilton Street Bridge Site 600 VAR 600
Easy Pay Billing CS 402 3,402
Lake CDA Issues 142 242 483 835 626,077
Shareholder Lawsuit 2002 63,214 48,468 14,746
NE Oil Spill Cleanup 748 675 748 675
Misc. Work in Progress
I Deferred Regulatory Comm.
Expenses (See pages 350 - 351)
TOTAL 40,675,589 297,127
FERC FORM NO.2 (ED. 12-94)Page 233.
Name of Respondent This Re~s:
(1) W
A vista Corp (2)
An Original
A Resubmission
Date of Report
(M, D,
Year of Report
4/18/2007 12/31/2006
ACCUMULATED DEFERRED INCOME TAXES (ACCOUNT 190)
1. Report the infonnation called for below concerning the
respondent's accounting for deferred income taxes.
2. At Other (Specify), include deferrals relating to
other income and deductions.
Line
No.Account Subdivisions
(a)
Account 190
Electric
03 SFAS 15804 Various
TOTAL Account 190 (Total of lines 5 thru 6)
Classification of TOTAL
Federal Income Tax
10 State Income Tax
11 Local Income Tax
Gas
Other (Define)
Total (Total of lines 2 thru 4)
Other (S eci )
FERC FORM NO.2 (12-96)
3. At lines 4 and 6, add rows as necessary to report
all data. Number the additional rows in sequence
, etc. and 6., 6., etc.
Balance at
Beginning of Year
CHANGES DURING YEAR
Amounts
Debited to
Account 410.
Amounts
Credited to
Account 411.1
10,500,018
516,068
016,086
631,314
647 400
726 414 866,301
653,657 072,336
380,071 938,637
(3,084 074)429,128)
704,003)509,509
152 935)509,509
448,932
34,198,468
448,932
Page 234
Name of Respondent Thi~ort Is:
(1) WAn Original
(2) DA Resubmission
Date of Report
(Mo, Da, Yr)
Year of Report
Avista Corp 4/18/2007 12/31/2006
ACCUMULATED DEFERRED INCOME TAXES (ACCOUNT 190) (Continued)
4. If more space is needed, use separate pages
as required.
5. In the space provided below, identify by amount
and classification, significant items for which
defeITed taxes are being provided. Indicate
insignificant amounts listed under "Other.
CHANGES DURING YEAR ADJUSTMENTS
Amounts
Debited to
Amounts
Credited to
Debits to 190 Credits to 190 Balance at
End of Year
Line
No.
Account 410.Account 411.2 Account No.Amount Account No.Amount
(2,510)190xxx / Var 190,196 13,452,219
0 190xxx Reclass 45,500 254180 557 953,690
510)45,500 216,753 405,909
(693,839)284 953 190xxx Reclass 117 255,935
236000 243 516 243 516
219000/245100 684 208 (1,684 208) 6.
228.3/253.2/219.006 062 006 062
Various 624 899 (624,899) 6.
(696,349)284,953 18,295 078 534 977 55,602 315
(696 349)284 953 18,295,078 534 977 55,602 315
FERC FORM NO.2 (12-96)Page 235
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
CAPITAL STOCKS (Account 201 and 204)
1. Report below the particulars (details) called for concerning common and preferred stock at end of year, distinguishing separate
series of any general class. Show separate totals for common and preferred stock. If information to meet the stock exchange reporting
requirement outlined in column (a) is available from the SEC 10-K Report Form filing, a specific reference to report form (i.e., year and
company title) may be reported in column (a) provided the fiscal years for both the 10-K report and this report are compatible.
2. Entries in column (b) should represent the number of shares authorized by the articles of incorporation as amended to end of year.
Line Class and Series of Stock and Number of shares Par or Stated Call Price at
No.Name of Stock Series Authorized by Charter Value per share End of Year
(a)(b)(c)(d)
1 Account 201 - Common Stock Issued
No Par Value 200 000,000
Restricted shares
4 TOTAL COM 200 000 000
7 Account 204 - Preferred Stock Issued 000 000
Cumulative
TOTAL PRE 10,000 000
FERC FORM NO.2 (ED. 12-91)Page 250
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/Q4(2) nA Resubmission 04/18/2007
CAPITAL STOCKS (Account 201 and 204) (Continued)
3. Give particulars (details) concerning shares of any class and series of stock authorized to be issued by a regulatory commission
which have not yet been issued.
4. The identification of each class of preferred stock should show the dividend rate and whether the dividends are cumulative or
non-cumulative.
5. State in a footnote if any capital stock which has been nominally issued is nominally outstanding at end of year.
Give particulars (details) in column (a) of any nominally issued capital stock, reacquired stock, or stock in sinking and other funds which
is pledged, stating name of pledgee and purposes of pledge.
OUTSTANDING PER BALANCE SHEET HELD BY RESPONDENT Line
(Total amount outstanding without reduction AS REACQUIRED STOCK (Account 217)IN SINKING AND OTHER FUNDS No.for amounts held by respondent)
Sl'Jares Amount Sl'Jares ~~st Shares Amount
(e)(f)
(g)
(h)(i)
550,506 722,039,406
, .
7'36,180 771 358
550,506 722,039,406 180
, '
771,358
FERC FORM NO.2 (ED. 12-88)Page 251
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
CAPITAL STOCK EXPENSE (Account 214)
1. Report the balance at end of the year of discount on capital stock for each class and series of capital stock.
2. If any change occurred during the year in the balance in respect to any class or series of stock, attach a statement giving particulars
(details) of the change. State the reason for any charge-off of capital stock expense and specify the account charged.
I line Class and Series of Stock Balance at End 01 Year
No.(a)(b)
Common Stock - Public Issue 085 094
$6.95 Preferred Stock, Series K 334 005
22 TOTAL 6,419,099
FERC FORM NO.2 (ED. 12-87)Page 254b
This Page Intentionally Left Blank
Name of Respondent This (!1ort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04(2) nA Resubmission 04/18/2007
LONG-TERM DEBT (Account 221 222,223 and 224)
1. Report by balance sheet account the particulars (details) concerning long-term debt included in Accounts 221 , Bonds, 222
Reacquired Bonds, 223, Advances from Associated Companies, and 224, Other long-Term Debt.
2. In column (a), for new issues, give Commission authorization numbers and dates.
3. For bonds assumed by the respondent, include in column (a) the name of the issuing company as well as a description of the bonds.
4. For advances from Associated Companies, report separately advances on notes and advances on open accounts. Designate
demand notes as such. Include in column (a) names of associated companies from which advances were received.
5. For receivers, certificates, show in column (a) the name of the court -and date of court order under which such certificates were
issued.
6. In column (b) show the principal amount of bonds or other long-term debt originally issued.
7. In column (c) show the expense , premium or discount with respect to the amount of bonds or other long-term debt originally issued.
8. For column (c) the total expenses should be listed first for each issuance, then the amount of premium (in parentheses) or discount.
Indicate the premium or discount with a notation , such as (P) or (D). The expenses, premium or discount should not be netted.
9. Furnish in a footnote particulars (details) regarding the treatment of unamortized debt expense, premium or discount associated with
issues redeemed during the year. Also, give in a footnote the date of the Commission s authorization of treatment other than as
specified by the Uniform System of Accounts.
Line Class and Series of Obligation, Coupon Rate Principal Amount Total expense,
No.(For new issue, give commission Authorization numbers and dates)Of Debt issued Premium or Discount
(a)(b)(c)
Acct. 221 - Bonds:
Secured Medium Term Notes $1 185,000,000 023,850,000 794 892
Discount 320,700
(Premium)266,500
Pollution Control Revenue Bonds:
6% Series due 2023 100 000 115,355
Colstrip 1999A due 2032 66,700,000 700,581
Discount 500
Colstrip 1999B due 2034 000,000 954 386
SUBTOTAL 111 650,000 15,639 914
Acct. 222 - Reacquired Bonds
Acct. 223 - Advances from Associated Companies-A. Advantage $1 ,200k; A. Energy $60 800 000
Long Term Debt to Affiliated Trusts-AVA Capital Trust III 856 000 658,634
Long Term Debt to Affiliated Trusts-Avista Capital II 547 000 633,783
Acct. 224 - Other Long-term Debt
Series K Preferred Stock 35,000,000 089,391
Notes Payable - Banks (local) $320,000 000 2,406 216
Commercial Paper
Unsecured Senior Notes 400,000,000 128 000
(Discount)716 000
Medium Term Notes $1 000 000 000 683,000 000 700,797
TOTAL 344 853,000 39,972 735
FERC FORM NO.2 (ED. 12-96)Page 256
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/Q4
(2) D A Resubmission 04/18/2007
LONG-TERM DEBT (Account 221 222 223 and 224) (Continued)
10. Identify separate undisposed amounts applicable to issues which were redeemed in prior years.
11. Explain any debits and credits other than debited to Account 428, Amortization and Expense, or credited to Account 429, Premium
on Debt - Credit.
12. In a footnote, give explanatory (details) for Accounts 223 and 224 of net changes during the year. With respect to long-term
advances, show for each company: (a) principal advanced during year, (b) interest added to principal amount, and (c) principle repaid
during year. Give Commission authorization numbers and dates.
13. If the respondent has pledged any of its long-term debt securities give particulars (details) in a footnote including name of pledgee
and purpose of the pledge.
14. If the respondent has any long-term debt securities which have been nominally issued and are nominally outstanding at end of
year, describe such securities in a footnote.
15. If interest expense was incurred during the year on any obligations retired or reacquired before end of year, include such interest
expense in column (i). Explain in a footnote any difference between the total of column (i) and the total of Account 427 , interest on
Long-Term Debt and Account 430, Interest on Debt to Associated Companies.
16. Give particulars (details) concerning any long-term debt authorized by a regulatory commission but not yet issued.
AMORTIZATION PERIOD UUtstandln Line
Nominal Date Date of (Total amount outstan ing without Interest for Year No.of Issue Maturity Date From Date To reduction for amounts held by Amount
(d)(e)(f)
(g)
resP?Mdent)(i)
597 396;931 339,181
12/18/1984 12/01/2023 12/18/1984 12/01/2023 100,000 246 000
9/01/1999 10/01/2032 9/01/1999 10/01/2032 700 000 335 000
9/01/1999 3/01/2034 9/01/1999 3/01/2034 000 000 871 250
685 196 931 791 431
800 000
4/5/2004 4/1/2034 4/30/2004 3/31/2034 856,000 020,640
6/3/1997 6/1/2037 6/30/1997 5/31/2037 547 000 095,789
9/15/1992 9/15/2007 9/15/1992 9/15/2007 250,000 915 594
12/17/2004 3/15/2011 12/13/2004 3/15/2001 000,000 704 788
4/03/2001 6/01/2008 4/03/2001 6/01/2008 273,350,402 26,949,853
1/22/1992 1/22/2007 2/1/1992 2/1/2007 000 000 576,884
116,000,333 054 979
FERC FORM NO.2 (ED. 12-96)Page 257
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04(2) nA Resubmission 04/18/2007
RECONCILIATION OF REP~ RTED NET INCOME WITH TAXABL INCOME FOR FEDERAL INCOME TAXES
Report the reconciliation of reported net income for the year with taxable income used in computing Federal income tax accruals and show
computation of such tax accruals. Include in the reconciliation, as far as practicable, the same detail as furnished on Schedule M-1 of the tax return for
the year. Submit a reconciliation even though there is no taxable income for the year. Indicate clearly the nature of each reconciling amount.
2. If the utility is a member of a group which files a consolidated Federal tax return, reconcile reported net income with taxable net income as if a
separate return were to be field, indicating, however, intercompany amounts to be eliminated in such a consolidated return. State names of group
member, tax assigned to each group member, and basis of allocation, assignment, or sharing of the consolidated tax among the group members.
3. A substitute page, designed to meet a particular need of a company. may be used as Long as the data is consistent and meets the requirements of
the above instructions. For electronic reporting purposes complete Line 27 and provide the substitute Page in the context of a footnote.
I LIne I-'artlculars (Details)Amount
No.(a)(b)
1 Net Income for the Year (Page 117)
axable Income Not Reported on Books
; 5;~?6,1O0
9 Deductions Recorded on Books Not Deducted for Return
9~,6~!:),4H! ,
Federal Income Tax 207 698
Deferred Income Tax 995,071
Investment Tax Credit & State Income Tax 106,662
Income Recorded on Books Not Included in Return
5~,61t;,1~~"
Equity in Sub Earnings (Income) / Loss 16,839,461
Corporate Overhead Unallocated Subs 606 646
Deductions on Return Not Charged Against Book Income
'-'
c1,10 p7i057
, ,
Federal Tax Net Income
Show Computation of Tax:
Federal Tax Net Income 137 140 918
State Tax ~ 2%, Less Idaho ITC 063 970
Federal Tax Net Income, Less State Tax 135 076 947
Federal Tax ~ 35%($135 076 947' 35%)276 931
2005 1 O-k & Mixed Service Cost Adj.225 061
2006 Mixed Service Cost Adj.539 814
Prior Years Tax Return, Revenue Agent Report & Misc True-ups 183 093
Kettle Falls Tax Credit 200,894
rt"otal Federal Tax Expense (agrees to line 11)207,697
FERC FORM NO.2 (ED. 12-96)Page 261
This Page Intentionally Left Blank
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/Q4
(2) CiA Resubmission 04/18/2007
TAXES ACCRUED, PREPAID AND CHA GED DURING YEAR
1. Give particulars (details) of the combined prepaid and accrued tax accounts and show the total taxes charged to operations and other accounts during
the year. Do not include gasoline and other sales taxes which have been charged to the accounts to which the taxed material was charged. If the
actual, or estimated amounts of such taxes are know, show the amounts in a footnote and designate whether estimated or actual amounts.
2. Include on this page, taxes paid during the year and charged direct to final accounts, (not charged to prepaid or accrued taxes.
Enter the amounts in both columns (d) and (e). The balancing of this page is not affected by the inclusion of these taxes.
3. Include in column (d) taxes charged during the year, taxes charged to operations and other accounts through (a) accruals credited to taxes accrued,
(b)amounts credited to proportions of prepaid taxes chargeable to current year, and (0) taxes paid and charged direct to operations or accounts other
than accrued and prepaid tax accounts.
4. List the aggregate of each kind of tax in such manner that the total tax for each State and subdivision can readily be ascertained.
1L.lne Kind of Tax BALANCE AT BEGINNING OF YEAR ~~xes
~~~
Adjust-C argedNo.(See instruction 5)1axes Accru~p ~repai.d Taxes ~nng ~ring ments(Account 236)(Include In Account 165)ear ear
(a)(b)(c)(d)(e)(f)
1 FEDERAL:
2 Income Tax (2003)298,448 298,448
3 Income Tax (2004)750 020 1,472 305 253,958
4 Income Tax (2005)619 962 486 674 841 089
5 Income Tax (2006)51,427 073 345,130
6 Unemployment Ins 2003
7 FICA (2006)858.817 193,094 334,277
8 Retained Earnings (2004)1 ,463,362
9 Retained Earnings (2005) 386,815
Retained Earnings (2006)618,425
Total Federal 921,711 47,708,486 55,538,224 622,960
STATE OF WASHINGTON:
Property Tax (2003)023 023
Property Tax (2004)741 741
Property Tax (2005)279,127 977,904 242 311
Property Tax (2006)152,000
Excise Tax (2002)202 688 202,688
Excise Tax (2004)40,060 204,464 164,404
Excise Tax (2005)560,432 100 595 269,952
Excise Tax (2006)20,766,337 18,909,992
Natural Gas Use Tax 877 736 128,907
Muni Utility & Occupation Tax 470,945 775 855 19,601,315
Sales & Use Tax (2005)40,333 91,697 173
Sales & Use Tax (2006)043 048 956 747
Motor Vehicle (2006)817 817
Total Washington 15,475 958 779 788 378 142 173
STATE OF IDAHO:
Income Tax (1997-2000)343,399 343,399
Income Tax (2001)080,088 102 358 269
Income Tax (2002)470,075 209 108 260,967
Income Tax (2003)191 571 839 219,410
Income Tax (2004)15,501 348 19,849
Income Tax (2005)116 763 258 235 689 522 495
Income Tax (2006)815,653 961,000
Property Tax (2005)603 487 593,774
Property Tax (2006)355,208 678,097
Excise Tax (2004)142 142
Motor Vehicle Ins. (2006)941 941
TOTAL 112 797 121,414 718 131 812 045 622 960
FERC FORM NO.2 (ED. 12-96)Page 262
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04
(2) Fi A Resubmission 04/18/2007
TAXES ACCRUED, PREPAID AND CHARGED DU ING YEAR (Continued)
5. If any tax (exclude Federal and State income taxes)- covers more then one year, show the required information separately for each tax year
identifying the year in column (a).
6. Enter all adjustments of the accrued and prepaid tax accounts in column (f) and explain each adjustment in a foot- note. Designate debit adjustments
by parentheses.
7. Do not include on this page entries with respect to deferred income taxes or taxes collected through payroll deductions or otherwise pending
transmittal of such taxes to the taxing authority.
8. Report in columns (i) through (I) how the taxes were distributed. Report in column (I) only the amounts charged to Accounts 408.1 and 409.
pertaining to electric operations. Report in column (I) the amounts charged to Accounts 408.1 and 109.1 pertaining to other utility departments and
amounts charged to Accounts 408.2 and 409.2. Also shown in column (I) the taxes charged to utility plant or other balance sheet accounts.
9. For any tax apportioned to more than one utility department or account, state in a footnote the basis (necessity) of apportioning such tax.
BALANCE AT END OF YEAR DISTRIBUTION OF TAXES CHARGED Line
(Taxes accrued Prepaid Taxes Electric Extraordinary Items AC!justments to 'ReI. Other No.
Acco~nt 236)(Incl. in Account 165)(Account 408.1, 409.(Account 409.Earnings (Account 439)
(h)(i)(k)(I)
30,476,283 1,472,305
734 453 353,506 133,168
081 943 36,704,095 14,722,978
858 817
463,362
386,815
618,425 618,425
27,128,489 350,589 357 897
019
595 16,147
58,913 745 000 232 904
10,152 000 896 000 256,000
202 688
40,769 245,233
189,884 038 74,557
856,345 143 449 622,888
706 743 70,993
645,486 260 508 515,348
141 202
301 043,045
12,817
868 433 510 484 18,269,303
343,399
102 358
27,839
348
345,334 258 235
145,347 571 847 243 806
691
677 111 768 000 587,208
142
941
887 161 700,334 46,714 387
FERC FORM NO.2 (ED. 12-96)Page 263
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
Avista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
TAXES ACCRUED, PREPAID AND CHAI GED DURING YEAR
1. Give particulars (details) of the combined prepaid and accrued tax accounts and show the total taxes charged to operations and other accounts during
the year. Do not include gasoline and other sales taxes which have been charged to the accounts to which the taxed material was charged. If the
actual, or estimated amounts of such taxes are know, show the amounts in a footnote and designate whether estimated or actual amounts.
2. Include on this page, taxes paid during the year and charged direct to final accounts, (not charged to prepaid or accrued taxes.
Enter the amounts in both columns (d) and (e). The balancing of this page is not affected by the inclusion of these taxes.
3. Include in column (d) taxes charged during the year, taxes charged to operations and other accounts through (a) accruals credited to taxes accrued,
(b)amounts credited to proportions of prepaid taxes chargeable to .current year, and (c) taxes paid and charged direct to operations or accounts other
than accrued and prepaid tax accounts.
4. List the aggregate of each kind of tax in such manner that the total tax for each State and subdivision can readily be ascertained.
,-me Kind of Tax BALANCE AT BEGINNING OF YEAR ~h~xes ~~raS Adjust-C argedNo.(See instruction 5)Taxes -Accru~9 ~repai.d Taxes ~nng ~ring ments(Account 236)(Include In Account 165)ear ear
(a)(b)(c)(d)(e)(f)
1 Sales & Use Tax (2005)666 084 173
2 Sales & Use Tax (2006)223,991 206,023
Irrigation Credits (2002)333 333
Irrigation Credits (2003)333 332
Irrigation Credits (2004)
6 Irrigation Credits (2005)155 155
7 Irrigation Credits (2006)
8 KWH Tax (2004)
9 KWH Tax (2005)094 21,004
KWH Tax (2006)368,491 343 828
Franchise Tax (2003)
Franchise Tax (2004)
Franchise Tax (2005)357,511 357,510
Franchise Tax (2006)808 938 244,071
Totalldaho 013,866 131 802 660,129 173
STATE OF MONTANA:
Income Tax (1996-2000)184,932 184 932
Income Tax (2001)415,419 676,617 261,198
Income Tax (2002)24,496 24,496
Income Tax (2003)134 687 125,102 232 823 223 238
Income Tax (2004)196 156,335 165 531
Income Tax (2005)503 508 106,823 157 723 227 987
Income Tax (2006)797 694 856,000
Property Tax (2000)384 81,384
Property Tax (2001)166 988 166,988
Property Tax (2002)468 132,520 166 988
Property Tax (2003)572 572
Property Tax (2004)994 994
Property Tax (2005)641 973 447 641,973
Property Tax (2006)960 973 983 792
Colstrip Generation Tax 667 667
KWH Tax (2004)483 81,484
KWH Tax (2005)258 214 256 938
KWH Tax (2006)165,439 903 532
Motor Vehicle (2006)545 545
Consumer Council Tax 452
Public Commission Tax 790 10,288
Total Montana 313 807 418,884 051,303
TOTAL 112,797 121,414 718 131,812 045 622 960
FERC FORM NO.2 (ED. 12-96)Page 262.
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
Avista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/04(2) nA Resubmission 04/18/2007
TAXES ACCI UED, PREPAID AND CHARGED DU ING YEAR (Continued)
5. If any tax (exclude Federal and State income taxes)- covers more then one year, show the required information separately for each tax year
identifying the year in column (a).
6. Enter all adjustments of the accrued and prepaid tax accounts in column (f) and explain each adjustment in a foot- note. Designate debit adjustments
by parentheses.
7. Do not include on this page entries with respect to deferred income taxes or taxes collected through payroll deductions or otherwise pending
transmittal of such taxes to the taxing authority.
8. Report in columns (i) through (I) how the taxes were distributed. Report in column (I) only the amounts charged to Accounts 408.1 and 409.
pertaining to electric operations. Report in column (I) the amounts charged to Accounts 408.1 and 109.1 pertaining to other utility departments and
amounts charged to Accounts 408.2 and 409.2. Also shown in column (I) the taxes charged to utility plant or other balance sheet accounts.
9. For any tax apportioned to more than one utility department or account, state in a footnote the basis (necessity) of apportioning such tax.
BALANCE AT END OF YEAR DISTRIBUTION OF TAXES CHARGED Line
(Taxes accrued Prepaid Taxes Electric Extraordinary Items Adjustments to ReI.Other No.
ACCO
~9J 236)
(Incl. in Account 165)(Account 408.1 , 409.(Account 409.Earnings (Account 439)
(h)(I)(k)(I)
423
968 223,991
333
332
155
14,779 315
663 373,656 165
564 867 192,415 616 522
3,494 711 921,434 210,367
184,932
676,617
125,102
156 335
466,950 106 823
58,306 500 022 297 672
384
132 520
572
993
31,447 312 135
977 181 960,973
667
81,484
276 780 780
261 908 165,439
545
431 452
503 463 328
681,391 670,439 251 553
887 161 700,334 46,714 387
FERC FORM NO.2 (ED. 12-96)Page 263.
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
TAXES ACCRUED, PREPAID AND CHA GED DURING YEAR
1. Give particulars (details) of the combined prepaid and accrued tax accounts and show the total taxes charged to operations and other accounts during
the year. Do not include gasoline and other sales taxes which have been charged to the accounts to which the taxed material was charged. If the
actual, or estimated amounts of such taxes are know, show the amounts in a footnote and designate whether estimated or actual amounts.
2. Include on this page, taxes paid during the year and charged direct to final accounts, (not charged to prepaid or accrued taxes.
Enter the amounts in both columns (d) and (e). The balancing of this page is not affected by the inclusion of these taxes.
3. Include in column (d) taxes charged during the year, taxes charged to operations and other accounts through (a) accruals credited to taxes accrued,
(b)amounts credited to proportions of prepaid taxes chargeable to current year, and (c) taxes paid and charged direct to operations or accounts other
than accrued and prepaid tax accounts.
4. List the aggregate of each kind of tax in such manner that the total tax for each State and subdivision can readily be ascertained.
Kind of Tax BALANCE AT BEGINNING OF YEAR ~~xes Adjust-C arged
No.(See instruction 5)Taxes Accrueq t-:repa~a I axes ~nng ~ring ments
(Account 236)(Include In Account 165)ear ear
(a)(b)(c)(d)(e)(f)
1 STATE OF OREGON:
2 Income Tax (1999 & Older)700 75,700
3 Income Tax (2000)621 55,621
4 Income Tax (2001)298 330 148,595 149,735
5 Income Tax (2002)121 729 254 129 375,858
6 Income Tax (2003)17,501 30,861 13,360
7 Income Tax (2004)144,455 70,785 73,670
8 Income Tax (2005)86,357 135,043 313,153
9 Income Tax (2006)405,202 368,000
Property Tax (2003)
Property Tax (2004)273 273
Property Tax (2005)475 874 158 767 156 533
Property Tax (2006)315 695 524 642
Motor Vehicle (2006)4,413 4,413
Busn Energy Tax Credit 431 020
Busn Energy Tax Credit 244
Busn Energy Tax Credit 55,790
Busn Energy Tax Credit 865
Busn Energy Tax Credit 44,059 333
Busn Energy Tax Credit 164 041 196 186
Busn Energy Tax Credit 104 808
Franchise Tax (2004)67,261 094
Franchise Tax (2005)128 382 198 063,999
Franchise Tax (2006)158,085 019 571
Total Oregon 980 400,174 137 158
STATE OF CALIFORNIA:
Income Tax (1996-2000)55,448 55,448
Income Tax (2001)850 75,684 25,834
Income Tax (2002)9,402 9,402
Income Tax (2003)33,400 25,225 625
Income Tax (2004)36,326 051 33,275
Income Tax (2005)137 098 29,924 886
Income Tax (2006)200
Property Tax (2004)
Property Tax (2005)
Total California 063 138 124
MISCELLANEOUS STATES:
Income Tax (2004 and older)057 057
TOTAL 112 797 121,414 718 131 812 045 622 960
FERC FORM NO.2 (ED. 12-96)Page 262.
Name of Respondent This ~ort Is:Date of Report YearlPeriod of Report
Avista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
TAXES ACCI UED, PREPAID AND CHARGED DU ING YEAR (Continued)
5. If any tax (exclude Federal and State income taxes)- covers more then one year, show the required information separately for each tax year
identifying the year in column (a).
6. Enter all adjustments of the accrued and prepaid tax accounts in column (f) and explain each adjustment in a foot- note. Designate debit adjustments
by parentheses.
7. Do not include on this page entries with respect to deferred income taxes or taxes collected through payroll deductions or otherwise pending
transmittal of such taxes to the taxing authority.
8. Report in columns (i) through (I) how the taxes were distributed. Report in column (I) only the amounts charged to Accounts 408.1 and 409.
pertaining to electric operations. Report in column (I) the amounts charged to Accounts 408.1 and 109.1 pertaining to other utility departments and
amounts charged to Accounts 408.2 and 409.2. Also shown in column (I) the taxes charged to utility plant or other balance sheet accounts.
9. For any tax apportioned to more than one utility department or account, state in a footnote the basis (necessity) of apportioning such tax.
BALANCE AT END OF YEAR DISTRIBUTION OF TAXES CHARGED Line
(Taxes accrued Prepaid Taxes Electric Extraordinary Items AdjUstments to "Ret.Other No.
Acco
~af 236)
(Incl. in Account 165)(Account 408., 409.(Account 409.Earnings (Account 439)
(h)(i)(k)(I)
700
55,621
148,595
254 129
30,861
70,785
264,467 135,042
202 100,894 304 308
273
473 640 158,767
208 947 315 695
4,413
431 020
244
790
865
274 333
32,145 196 186
104 808 104 808
62,168 094
60,185 198
138 514 158,086
213,035 247 388 152 788
448
75,684
225
051
000 34,098
200
15,200 138
058
887 161 700 334 714 387
FERC FORM NO.2 (ED. 12-96)Page 263.
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
Avista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/04(2) DA Resubmission 04/18/2007
TAXES ACCRUED, PREPAID AND CHA GED DURING YEAR
1. Give particulars (details) of the combined prepaid and accrued tax accounts and show the total taxes charged to operations and other accounts during
the year. Do not include gasoline and other sales taxes which have been charged to the accounts to which the taxed material was charged. If the
actual, or estimated amounts of such taxes are know, show the amounts in a footnote and designate whether estimated or actual amounts.
2. Include on this page, taxes paid during the year and charged direct to final accounts, (not charged to prepaid or accrued taxes.
Enter the amounts in both columns (d) and (e). The balancing of this page is not affected by the inclusion of these taxes.
3. Include in column (d) taxes charged during the year, taxes charged to operations and other accounts through (a) accruals credited to taxes accrued,
(b)amounts credited to proportions of prepaid taxes chargeable to current year, and (c) taxes paid and charged direct to operations or accounts other
than accrued and prepaid tax accounts.
4. List the aggregate of each kind of tax in such manner that the total tax for each State and subdivision can readily be ascertained.
Ine Kind of Tax BALANCE AT BEGINNING OF YEAR ;1~xes
~~&
Adjust-C argedNo.(See instruction 5)1axes Ac;:cru~f:I F:repatd Taxes ~nng ~ring ments(Account 236)(Include In Account 165)ear ear
(a)(b)(c)(d)(e)(f)
Income Tax (2005)
Income Tax (2006)096 058
Total Misc States -5,095 153 058
5 COUNTY & MUNICIPAL
Forrest Fire Protection
7 Greenacres Irrigation
8 City of Spokane PBIA 470 125 346
9 WA Renewable Energy 044
Spokane Utility Tax
Columbia Irrigation
Misc.175 738 11,561
Total County 295 569 11,907
TOTAL 112 797 121,414 718 131,812 045 622,960
FERC FORM NO.2 (ED. 12-96)Page 262.
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04
(2)DA Resubmission 04/18/2007
TAXES ACCRUED, PREPAID AND CHARGED DU ING YEAR (Continued)
5. If any tax (exclude Federal and State income taxes)- covers more then one year, show the required information separately for each tax year,
identifying the year in column (a).
6. Enter all adjustments of the accrued and prepaid tax accounts in column ~f) and explain each adjustment in a foot- note. Designate debit adjustments
by parentheses.
7. Do not include on this page entries with respect to deferred income taxes or taxes collected through payroll deductions or otherwise pending
transmittal of such taxes to the taxing authority.
B. Report in columns (i) through (I) how the taxes were distributed. Report in column (I) only the amounts charged to Accounts 408.1 and 409.
pertaining to electric operations. Report in column (I) the amounts charged to Accounts 408.1 and 109.1 pertaining to other utility departments and
amounts charged to Accounts 408.2 and 409.2. Also shown in column (I) the taxes charged to utility plant or other balance sheet accounts.
9. For any tax apportioned to more than one utility department or account, state in a footnote the basis (necessity) of apportioning such tax.
BALANCE AT END OF YEAR DISTRIBUTION OF TAXES CHARGED Line
(Taxes accrued Prepaid Taxes Electric Extraordinary Items AdjUstments to ReI.Other No.Acco~nt 236)(Incl. in Account 165)(Account 408., 409.(Account 409.Earnings (Account 439)
(h)(i)(k)(I)
096
154
125
044 044
738
042 569
887 161 700 334 46,714 387
IFIEIRC !FORM NO.2 (ED. 12-96)Page 263.
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04
(2)D A Resubmission 04/1 8/2007
ACCUMULA ED DEFERRED INVESTMENT TAX REDITS (Account 255)
Report below information applicable to Account 255. Where appropriate, segregate the balances and transactions by utility and
nonutility operations. Explain by footnote any correction adjustments to the account balance shown in column (g).lnclude in column (i)
the average period over which the tax credits are amortized.
Account
No.SUbd~X\SionS
of Year Deferred for Year Current Year s Income Adjustments(b) ACCOUIJI NO. Amount nAccoUlJtNo. Amount
( )
(c) (d) (e) (f)
1 Electric Utility
23%
34%
47%
510%
8 TOTAL
9 Other (List separately
and show 3%, 4%, 7%,
10% and TOTAL)
Gas Propertry (100%521 652 411400 3Of
TOTAL PROPERTY 521,652 49,30f
FERC FORM NO.2 (ED. 12-89)Page 266
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
Avista Corporation
(1) An Original (Mo, Da, Yr)End of 2006/04
(2)DA Resubmission 04/18/2007
ACCUMULATED D FER RED INVESTMENT TAX CRED is (Account 255) (continued)
ADJUSTMENT EXPLANATION Lineof Year of AI ocatlon No.to Income
472 344
472 344
FERC FORM NO.2 (ED. 12-89)Page 267
Name of Respondent This Report Is:Date of Report Year of Report
(I)(2g An Original (Mo, Da, Yr)
A vista Corp.(2)0 A Resubmission ApriJ 18,2007 December 31, 2006
MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES (Account 242)
1. Describe and report the amount of other CUITent and accrued liabilities at the end of year.
2. Minor items (less than $250 000) may be grouped under appro prate title.
Balance at
Line Item End of Year
No.
(a)(b)
Margin CalJ Deposit (242050)39,440,000
Forest Use Permits (242060)182,081
FERC Administrative Fee Accrual (242300 & 242310)514 740
Non-monetary Power Exchange (242500)206,992
Demand Side Mgmt Tariff Rider (242600)(3,405 621)
Payroll Equalization (242700)033,845
Low Income Energy Assistance (242770)824 624
Workers Compensation Reg Liab (242830)2,424 563
Accounts Payable - Inventory Accrual (242900)831,518
Accounts Payable - Expense Accrual (242910)006 547
Gas Imbalances 467,495
Customer Accounts 333,026
Payroll Tax Clearing 386 113
4.1
TOTAL 245 923
Page 268
FERC FORM NO.2 (ED. 12-96)
Name of Respondent This (!Jort Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04
(2) 0 A Resubmission 04/18/2007
0 HER DEFFERED CREDITS (Account 253)
1. Report below the particulars (details) called for concerning C?ther deferred credits.
2. For any deferred credit being amortized, show the period of amortization.
3. Minor items (5% of the Balance End of Year for Account 253 or amounts less than $10 000, whichever is greater) may be grouped by classes.
Line Description and Other Balance at DEBITS Balance at
No.Deferred Credits Beginning of Year Contra Amount Credits End of Year
(b)Account
(a)(c)(d)(e)(f)
CSS Install & Interest (253000)419000 092 092
Deferred Revenue Prepayment -802 456/143/146 372 23,430
Pacific Walla Walla/Enterprise
Amort = 19 yrs (253080)
CIT Oper Lease (253090) 9/2006 29,457 931110 29,457
BPA C&RD Receipts (253100)319,061 Various 210 191 108,870
Trust Fund - Centralia (253110)913 437 186870 327 935 764
Rathdrum Refund (253120)476 332 550000 33,823 442 509
Amort =25 years, through 1/2020
NE Tank Spill (253130)000 000 552/186200 789,375 210 625
CS2 GE Long Term Service 938 883 232/154 938,883
Agreement (253150)
Supplemental Executive Retire 737,423 426290 845,324 892 099
Plan (SERP) (253290)
SERP - SFAS 158 Unfunded Various 772,012 772 012
Unfunded (253291)
Gain on Sale and leaseback 568,736 931900 261 456 307 280
of Building (Amortization period
is 25 years) (253850)
ID Clark Fork Relicense (253890)462,387 419000 218 831 681 218
Deferred Compensation 11,870,416 128/431 158,363 13,028 779
(253900, 253910, 253920)
Amort. Unbilled Revenue Add-ons 880 004 908/557/407 343,385 223,389
(253990)
TOTAL 36,304 164 336 712 313,179 36,280,631
FERC FORM NO.2 (ED. 12-94)Page 269
Name of Respondent
Avista Corporation
Year/Period of Report
End of 2006/04
This ~ort Is: Date of Report(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/18/2007
ACCUMULATE DEFFERED INCOME TAXES - OTHER PROPERTY (Account 282)
1. Report the information called for below concerning the respondent's accounting for deferred income taxes rating to property not
subject to accelerated amortization
2. For other (Specify),include deferrals relating to other income and deductions.
CHANGES DURING YEARLine
No.
Account Balance at
Beginning of Year
(a)(b)
Amounts Debited
to Account 410.
(c)
Amounts Credited
to Account 411.
(d)
1 Account 282
2 Electric
3 Gas
4 Other
225 798 912
59,715 278
727 835
289,242 025
684 084
750 063
257 744
691 8915 TOTAL (Enter Total of lines 2 thru 4)
9 TOTAL Account 282 (Enter Total of lines 5 thru
10 Classification of TOTAL
11 Federal Income Tax
289,242 025 20,691 891
1; ~
,- ~.
l..ibj,:LJ
"'. '... '
l,
,--.--.:," .".' ,'. ,, ,
Z~.,
""--
:l..,ii,-0JS ':;2 L--_
j).:
L. L12
12 State Income Tax
13 Local Income Tax
280,628 857
613 168
163 783
528 108
NOTES
FERC FORM NO.2 (ED. 12-96)Page 274
Name of Respondent
Avista Corporation
This ~ort Is: Date of Report(1) ~An Original (Mo, Da, Yr)(2) DA Resubmission 04/18/2007
ACCUMULATED DEFERRED INCOME TAXES - OTHER PROPERTY (Account 282) (Continued)
3. Use footnotes as required.
Year/Period of Report
End of 2006/04
CHANGES DURING YEAR
Amounts Debited Amounts Credited
to Account 410.to Account 411.
ADJUSTMENTS
Amount
Balance at
End of Year
Line
No.
Debits
NOTES (Continued)
FERC FORM NO.2 (ED. 12-96)Page 275
Name of Respondent
Avista Corporation
This ~ort Is: Date of Report
(1) ~ An Original (Mo, Da, Yr)
(2) D A Resubmission 04/18/2007
ACCUMULATED DEFFERED INCOME TAXES - OTHER (Account 283)
1. Report the information called for below concerning the respondent's accounting for deferred income taxes relating to amounts
recorded in Account 283.
2. For other (Specify),include deferrals relating to other income and deductions.
Year/Period of Report
End of 2006/04
(a)
Balance at
Beginning of Year
(b)
Line
No.
Account
1 Account 283
2 Electric
Electric 564 581 222,170 046,314
9 TOTAL Electric (Total of lines 3 thru 8)
10 Gas
11 Gas
56,564 581 222,170 046 314
575 034 343,758
17 TOTAL Gas (Total of lines 11 thru 16)
18 Other
19 TOTAL (Acct 283) (Enter Total of lines 9,17 and 18)
20 Classification of TOTAL
21 Federal Income Tax
575,034
155 147 548
343,758
601 985
228,287,163 18,167 913 046 314
22 State Income Tax
23 Local Income Tax
224 523,245
763,918
403,995
763 918
046 314
NOTES
FERC FORM No.2 (ED. 12-96)Page 276
Name of Respondent
Avista Corporation
Year/Period of Report
End of 2006/04
This ~ort Is: Date of Report(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/18/2007
ACCUMULATED EFERRED INCOME TAXES - OTHE (Account 283) (Continued
3. Provide in the space below explanations for Page 276 and 277. Include amounts relating to insignificant items listed under Other.
4. Use footnotes as required.
CHANGES DURING YEAR
Amounts Debited Amounts Credited
to Account 410.to Account 411.
ADJUSTMENTS
Balance at
End of Year
(k)
Line
No.
639,101 182320 836,673 190xxx 589 47,102 114
639,101 836 673 589 102 114
780 546 190xxx/2 667 792 679 614
780,546
2,419 647
802 731 190/182/
802 731
502 785182/219/
339,458
667,792
967,268
638 649
679,614
156 207,315
211 989,043
2,419 647 802 731 12,339,458 19,638,649 211 989,043
NOTES (Continued)
FERC FORM No.2 (ED. 12-96)Page 277
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2006/Q4
(2)DA Resubmission 04/18/2007
0 HER REGULATORY LIABILITIES (Account 254)
1. Report below the particulars (details) called for conc~rning other regulatory liabilities, including rate order docket number, if
applicable.
2. Minor items (5% of the Balance in Account 254 at end of period, or amounts less than $50 000 which ever is less),may be grouped
by classes.
3. For Regulatory Liabilities being amortized, show period of amortization.
Balance at Begining DEBITS Balance at End
Line Description and Purpose of of Current of Current
No.Other Regulatory Liabilities QuarterlY ear Account Amount Credits QuarterlY earCredited
(a)(b)(c)(d)(e)(f)
Centralia Sale (254110)407,452 407410 2,407,452
2 FAS109-Acctg for Inc. Taxes (254180)280 908 190180 556 254 352
3 Nez Perce - Reg Liability (254220)836 420 557200 008 814,412
Senate Bill 408 - Oregon (254250)407330 300,000 300 000
5 BPA Residential Exch (254346 ED WA)406 182.34/407 406
6 BPA Residential Exch (254346 ED ID)367 182.34/407 367
7 OPUC Investigate Reserve (254680)805680 478,043 478,D43
8 Mark to MarketFAS133 (254740)112 689 992 175.7/244.112 689992
9 Mark to Market F AS 133 (254750)175/244750 15,400 153 15,400,153
TOTAL 116 251 545 115 182 781 178,196 246,960
FERC FORM NO. 21/3-0 (REV 02-04)Page 278
This Page Intentionally Left Blank
Name of Respondent This R~ort Is:(1) ~ An Original
Year of ReportDate of Report
(Mo, Da, Yr)
Avista Corporation (2) D A Resubmission April 18, 2007 Dec. 31 , 2006
GAS OPERATING REVENUES (Account 400)
1. Report below natural gas operating revenues for each
prescribed account, and manufactured gas revenues in total.
2. Natural gas means either natural gas unmixed or any
mixture of natural and manufactured gas.
3. Report number of customers, columns (f) and (g), on
the basis of meter, in addition to the number of flat rate ac-
counts; except that where separate meter readings are
added for billing purposes, one customer should be counted
Line
No.
Title of Account
FERC FORM NO.2 (ED. 12-86)
for each group of meters added. The average number of
customers means the average of twelve figures at the close
of each month.
4. Report quantities of natural gas sold in Mcf (14.73 psia
at 60 degrees F). If billings are on a therm basis, give the Btu con-
tents of the gas sold and the sales converted to Mcf.
5. If increases or decreases from previous year (col-
umns (c), (e) and (g), are not derived from previously
OPERATING REVENUES
Amount for
Amount for Year Previous Year
146 581 144
676,035
491 509
416 501 ,288
971 ,782
511,473 070
126,647 601
11,867 199
424 720
368 676,141
085 081
431 761 222
118 750
6,498,720
203 038
601 297
060
200,020
10,832 550
522 305,620
15,060
635 580
11,454 975
443 216,197
522,305 620
404 333,744
676 035
971 ,782
491 509
511,473,070
Page 300
Name of Respondent This R~ort Is:(1) ~ An Original
Date of Report
(Mo, Da, Yr)
Year of Report
Avista Corporation (2)A Resubmission April 18,2007 Dec. 31 2006
GAS OPERATING REVENUES (Account 400) (Continued)
reported figures, explain any inconsistencies in a foot-
note.
6. Commercial and Industrial Sales, Account 481, may be
classified according to the basis of classification (Small or
Commercial, and Large or Industrial) regularly used by the
respondent if such basis of classification is not generally
greater than 200 000 Mcf per year or approximately 800 Mcf
per day of normal requirements. (See Account 481 of the
Uniform System of Accounts. Explain basis of classification
in a footnote.
7. See page 108, Important Changes During Year
for important new territory added and important rate increases
or decreases.
Quantity for Year
THERMS OF NATURAL GAS SOLD
Quantity for
Previous Year
AVG. NO. OF NAT. GAS CUSTRS. PER MO.
Number for Line
Number for Year Previous Year No.
442 701
325,304 361 2
157,426 570
482 730 931
465,790
336,414 106
961 354
416 375,460
299,437
299,437
297,304
297 317
NOTES
Quantities of natural gas expressed in therms:
to convert therms to MCF, divide therms by a
BTU factor of 10.
(1) Includes $1 737 638 unbilled revenues.
(2) Includes 323 946 therms relating to unbilled revenues.
FERC FORM NO.2 (ED. 12-86)Page 301
Name of Respondent This R~ort Is:Date of Report Year of Report
(I) X An Original (Mo, Va, Yr)
Avista Corp.(2)A Resubmission April 18 2007 December 31, 2006
GAS OPERATION AND MAINTENANCE EXPENSES
If the amount for previous year is not derived from previously reported figures, explain in footnotes.
Amount for Amount for
Line Amount Current Year Previous Year
No.(a)
1. PRODUCTION EXPENSES
A. Manufactured Gas Production
Manufactured Gas Production (Submit Supplemental Statement)
B. Natural Gas Production
B I. Natural Gas Production and Gathering
Operation
750 Operation Supervision and Engineering
751 Production Maps and Records
752 Gas Wells Expenses
753 Field Lines Expenses
754 Field Compressor Station Expenses
755 Field Compressor Station Fuel and Power
756 Field Measuring and Regulating Station Expenses
757 Purification Expenses
758 Gas Well Royalties
759 Other Expenses
760 Rents
TOTAL Operation (Enter Total of lines 7 thru 17)
Maintenance
761 Maintenance Supervision and Engineering
762 Maintenance of Structures and Improvements
763 Maintenance of Producing Gas Wells
764 Maintenance of Field Lines
765 Maintenance of Field Compressor Station Eauipment
766 Maintenance of Field Meas. and Reg, Sta, Eauipment
767 Maintenance of Purification Equipment
768 Maintenance of Drilling and Cleaninl! Eauipment
769 Maintenance of Other Eauipment
TOTAL Maintenance (Enter Total of lines 20 thru 28)
TOTAL Natural Gas Production and Gathering (Total of lines 18 and 29)
B2. Products Extraction
Operation
770 Operation Supervision and Engineering
771 Operation Labor
772 Gas Shrinkal!e
773 Fuel
774 Power
775 Materials
776 Operation Supplies and Expenses
777 Gas Processed by Others
778 Royalties on Products Extracted
779 Marketing Expenses
780 Products Purchased for Resale
781 Variation in Products Inventory
(Less) 782 Extracted Products Used by the Utility-Credit
783 Rents
TOTAL Operation (Enter Total of Lines 33 thru 46)
FERC FORM NO.2 (ED 12-88)Page 320
Name of Respondent This R
iRlort Is:
Date of Report Year of Report
(1) X An Original (Mo. Da, Yr)
A vista Corp,(2)A Resubmission April 18,2007 December 31, 2006
GAS OPERA nON AND MAINTENANCE EXPENSES
Line Amount Current Year Previous Year
No.(a)(b) (c)
B2. Products Extraction (Continued)
Maintenance
784 Maintenance Supervision and Engineering
785 Maintenance of Structures and Improvements
786 Maintenance of Extraction and Refining Eauipment
787 Maintenance of Pipe Lines
788 Maintenance of Extracted Products Storage Equipment
789 Maintenance of Compressor Eauipment
790 Maintenance of Gas Measuring and Reg, Equipment
791 Maintenance of Other Eauipment
TOTAL Maintenance (Enter Total of lines 49 thru 56)
TOTAL Products Extraction (Enter Total of lines 47 and 57)
C. Exploration and Development
Operation
795 Delay Rentals
796 Nonproductive Well Drilling
797 Abandoned Leases
798 Other Exploration
TOTAL Exploration and Development (Enter Total of lines 61 thru 64)
D. Other Gas Supply Expenses
Operation
800 Natural Gas Well Head Purchases
800.1 Natural Gas Well Head Purchases, Intracompany Transfers
801 Natural Gas Field Line Purchases
802 Natural Gas Gasoline Plant Outlet Pruchases
803 Natural Gas Transmission Line Purchases
804 Natural Gas Citv Gate Purchases 372 079 169 352 974 203
804.1 Liquefied Natural Gas Purchases
805 Other Gas Purchases 727 550 805 315
(Less) 805.1 Purchased Gas Cost Adjustments 947 717 502 240)
TOTAL Purchased Gas (Enter Total of lines 67 to 76)400,754 436 I 339 277 278 I
806 Exchange Gas
Purchased Gas Expenses
807.1 Well Expenses-Purchased Gas
807,2 Operation of Purchased Gas Measuring Stations
807.3 Maintenance of Purchased Gas Measuring Stations
807.4 Purchased Gas Calculations Expenses
807.5 Other Purchased Gas Expenses
TOTAL Purchased Gas Expenses (Enter Total of lines 80 thru 84)
808.1 Gas Withdrawn from Storage-Debit 865 084 500 964
87 (Less) 808.2 Gas Delivered to Storage-Credit (10,300,517)(15 883,491)
809.1 Withdrawals of Liauefied Natural Gas for Processing-Debit
89 (Less) 809.2 Deliveries of Natural Gas for Processing-Credit
Gas Used in Utility Operations-Credit
810 Gas Used for Compressor Station Fuel-Credit
811 Gas Used for Products Extraction-Credit
812 Gas used for Other UtilitY Operations-Credit
TOTAL Gas Used in Utility Operations-Credit (fota! of lines 91 thru 93)
813 Other Gas Supply Expenses 387 137 353,413
TOTAL Other Gas Supplv Exp (Total of lines 77 86 thru 89 95)402 706 140 328 248 164
TOTAL Production Expenses (Enter Total of lines 3,58,, and 96)402,706 140 328 248 164
FERC FORM NO.2 (ED 12-88)Page 321
Name of Respondent This R
lIDon Is:
Date of Repon Year of Repon
(I) X An Original (Mo, Va, Yr)
Avista Corp,(2)A Resubmission April 18,2007 December 31 , 2006
GAS OPERATION AND MAINTENANCE EXPENSES
Amount for Amount for
Line Amount Current Year Previous Year
No.(a)(b)(c)
2. NATURAL GAS STORAGE, TERMINALING AND
PROCESSING EXPENSES
A, Underground Storage Expenses
100 Operation
101 814 Operation Supervision and Engineering 625 259
102 815 Maps and Records
103 816 Wells Expenses
104 817 Lines Expense
105 818 Compressor Station Expenses
106 819 Compressor Station Fuel and Power
107 820 Measuring and Regulating Station Expenses
108 821 Purification Expenses
109 822 Exploration and Development
110 823 Gas Losses
III 824 Other Expenses 249 723 270 603
112 825 Storage Well Rovalties
113 826 Rents
114 TOTAL Operation (Enter Total of lines 101 thru 113)344 348 III115Maintenance
116 830 Maintenance Supervision and Engineering
117 831 Maintenance of Structures and Improvements
118 832 Maintenance of Reservoirs and Wells
119 833 Maintenance of Lines
120 834 Maintenance of Compressor Station Eauipment
121 835 Maintenance of Measuring and Regulating Station Eauipment
122 836 Maintenance of Purification Equipment
123 837 Maintenance of Other Eauipment 326,277 301 538
124 TOTAL Maintenance (Enter Total of lines 116 thru 123)326 277 301 538
125 TOTAL Underground Storage Expenses (Total of lines 114 and 124)670 625 616,400
126 B. Other Storage Expenses
127 Operation
128 840 Operation Supervision and Engineering
129 841 Operation Labor and Expenses
130 842 Rents
131 842,1 Fuel
132 842.2 Power
133 842.3 Gas Losses
134 TOTAL Operation (Enter Total of lines 128 thru 133)
135 Maintenance
136 843.1 Maintenance Supervision and Engineering
137 843.2 Maintenance of Structures and Improvements
138 843.3 Maintenance of Gas Holders
139 843.4 Maintenance of Purification EQuipment
140 843.5 Maintenance of Liauefaction EQuipment
141 843.6 Maintenance of Vaporizing Equipment
142 843.7 Maintenance of Compressor EQuipment
143 843.8 Maintenance of Measuring and Regulating Eauipment
144 843.9 Maintenance of Other Equipment
145 TOTAL Maintenance (Enter Total of lines 136 thru 144)
146 TOTAL Other Storage Expenses (Enter Total of lines 134 and 145)
FERC FORM NO.2 (ED 12-88)Page 322
Name of Respondent This R~ort Is:Date of Report Year of Report
(I) X An Original (Mo, Do., Yr)
A vista Corp.(2)A Resubmission April 18, 2007 December 31 2006
GAS OPERATION AND MAINTENANCE EXPENSES
Line Amount CuITent Year Previous Year
No.(a)(b) (e)
147 C. LiQuefied Natural Gas Terminaling; and Processing; Expenses
148 Operation
149 844.1 Operation Supervision and Enl!;ineerinl!;
150 844.2 LNG Processing Terminal Labor and Expenses
151 844.3 LiQuefaction Processing Labor and Expenses
152 844.4 LiQuefaction Transportation Labor and Expenses
153 844.5 Measuring and Regulating Labor and Expenses
154 844.6 Compressor Station Labor and Expenses
155 844.7 Communication System Expenses
156 844.8 Svstem Control and Load Dispatching
157 845.1 Fuel
158 845.2 Power
159 845.3 Rents
160 845.4 Demurrage Charges
161 (Less) 845.5 Wharfal!;e Receipts-Credit
162 845.6 Processing LiQuefied or Vaporized Gas bv Others
163 846.1 Gas Losses
164 846.2 Other Expenses
165 TOTAL Operation (Enter Total of lines 149thru 164)
166 Maintenance
167 847.1 Maintenance Supervision and Eng;ineering;
168 847.2 Maintenance of Structures and Improvements
169 847.3 Maintenance of LNG Processinl!; Terminal EQuipment
170 847.4 Maintenance of LNG Transportation EQuipment
171 847.5 Maintenance of Measurinl!; and Rel!;ulatinl!; EQuipment
172 847.6 Miantenance of Compressor Station EQuipment
173 847.7 Maintenance of Communication EQuipment
174 847,8 Maintenance of Other EQuipment
175 TOTAL Maintenance (Enter Total of lines 167thru 174)
176 TOTAL LiQuefied Nat Gas Terminaling and Processing Exp (Lines 165 & 175)
177 TOTAL Natural Gas storal!;e (Enter Total of lines 125, 146, and 176)670 625 616 400
178 3, 1RANSMISSION EXPENSES
179 Operation
180 850 Operation Supervision and Enl!;ineerinl!;
181 851 Svstem Control and Load Dispatching
182 852 Communication System Expenses
183 853 Compressor Station Labor and Expenses
184 854 Gas for Compressor Station Fuel
185 855 Other Fuel and Power for Compressor Stations
186 856 Mains Expenses
187 857 Measurinl!; and Rel!;ulatinl!; Station Expenses
188 858 Transmission and Compression of Gas by Others
189 859 Other Expenses
190 860 Rents
191 TOTAL Operation (Enter Total of lines 180 thru 190)
FERC FORM NO.2 (ED 12-88)Page 323
Name of Respondent This R~ort Is:Date of Report Year of Report
(I) X An Original (Mo, Da, Yr)
Avista Corp.(2)A Resubmission April 18,2007 December 31 , 2006
GAS OPERA nON AND MAINTENANCE EXPENSES
Line Amount Current Year Previous Year
No.(a)(b) (c)
3. TRANSMISSION EXPENSES (Continued)
192 Maintenance
193 861 Maintenance Supervision and Engineering
194 862 Maintenance of Structures and Improvements
195 863 Maintenance of Mains
196 864 Maintenance of Compressor Station Equipment
197 865 Maintenance of Measuring and Reg. Station Equipment
198 866 Maintenance of Communication Equipment
199 867 Maintenance of Other Equipment
200 TOTAL Maintemince (Enter Total of lines 193 thru 199)
201 TOTAL Transmission Expenses (Enter Total of lines 191 and 200)
202 4. DISTRIBUTION EXPENSES
203 Operation
204 870 Operation Supervision and Engineering 737 851 809 468
205 871 Distribution Load Dispatching
206 872 Compressor Station Labor and Expenses
207 873 Compressor Station Fuel and Power
208 874 Mains and Services Expenses 786.644 704 167
209 875 Measuring and Regulating Station Expenses-General 227 853 205 208
210 876 Measuring and Relrulating Station Expenses-Industrial 022 814
211 877 Measuring and Relrulating Station Expenses-City Gate Check Station 114 141 157 945
212 878 Meter and House Regulator Expenses 088,249 866 590
213 879 Customer Installations Expenses 688 697 740,276
214 880 Other Expenses 088,789 130771
215 881 Rents 706 25,167
216 TOTAL Operation (Enter Total of lines 204 thru 215)II 7"07 Q,\,642405
217 Maintenance
218 885 Maintenance Supervision and Engineering 261 703 232 841
219 886 Maintenance of Structures and Improvements
220 887 Maintenance of Mains 484 051 310 578
221 888 Maintenance of Compressor Station Equipment
222 889 Maintenance of Meas. and Reg. Sta. Equip.General 243 518 314 981
223 890 Maintenance of Meas. and Reg. Sta. Equip.Industrial 835 133,875
224 891 Maintenance of Meas. and Reg. Sta. Equip,City Gate Check Station 139 378
225 892 Maintenance of Services 981 794 936 679
226 893 Maintenance of Meters and House Regulators 932 785 925,246
227 894 Maintenance of Other Equipment 132 932 804
228 TOTAL Maintenance (Enter Total of lines 218 thru 227)157 758 970.383
229 TOTAL Distribution Expenses (Enter Total of lines 216 and 228)13,915,711 612 787
230 5. CUSTOMER ACCOUNTS EXPENSES
231 Operation
232 901 Supervision 449 520 593 279
233 902 Meter Reading Expenses 1,471 320 699 998
234 903 Customer Records and Collection Expenses 777 774 5,492 147
235 904 Uncollectible Accounts 350,865 291 166
236 905 Miscellaneous Customer Accounts Expenses 160 003 458,803
237 TOTAL Customer Accounts Expenses (Enter Total of lines 232 thru 236)209,482 535 393
FERC FORM NO.2 (ED 12-88)Page 324
Name of Respondent This R~ort Is:
(I) 129 An Original
A vista Corp.A Resubmission
GAS OPERA nON AND MAINTENANCE EXPENSES
(2)
If the amount for ear is not derived from
Amount
(a)
6. CUSTOMER SERVICE AND INFORMATIONAL EXPENSES
Date of Report
(Mo, Da, fr)
Year of Report
April 18 2007 December 31, 2006
Amount for
Previous Year
(c)
511 720 240 819
143 098)
138,156 229 064
401 262 972 489
074 067 769,748
832 244 707 099
906 311 476 847
450 465 171 376 909 231
NUMBER OF GAS DEPARTMENT EMPLOYEES
I. The data on number of employees should be reported construction employees in a footnote.
for the payroll period ending nearest to October 31, or 3, The number of employees assignable to the gas
any payroll period ending 60 days before or after Octo-department from joint function of combination utilities
ber 31.may be determined by estimate, on the basis of employee
2. If the respondents payroll for the reporting period equivalents.Show the estimated number of equivalent
includes any special constrction personnel, include such employees attributed to the gas department from joint
emolovees on line 3, and show the number of such soecial functions.
1. Pavroll Period Ended (Date)December 31 2006
2. Total Re~ular Full-Time Emolovees 193 361
3. Total Part-Time and Temnorarv Emnlovees allocation of General EmDlovees
Allocation of General EmDlovees 337
5. Total EmDlovees 540 394
FERC FORM NO, 2 (ED 12-88)Page 325
Name of Respondent This ~ort Is:
129 An Original
A Resubmission
Date of Report
(Mo, Da, Yr)
April 18, 2007
Year of Report
Avista Corporation Dec. 31 2006
Other Gas Supply Expenses (Account 813)
1 Report other gas supply expenses by descriptive titles that and losses on settlements of imbalances and gas lossesclearly indicate the nature of such expenses. Show not associated with storage separately. Indicate the
maintenance expenses, revaluation of functional classification and purpose of property to which
monthly encroachments recorded in Account 117.4 any expenses relate. List separately items of $250,000
or more.
Line
No.
Description Amount
(in Dollars)
(bJfa)
Gas Resource Management
Labor
Other Expenses (Phone Bills, Professional Services, Gas Reports, Travel, Training Etc.
Amortization of Gas Operations Database
Credit Exposure Reserve
39 TOTAL
540,827
409,828
175,322
107,480
Regulatory Affairs
Labor
Other Expenses (Phone Bills, Professional Services, Gas Reports, Travel, Etc.
757
289,883
387 137
FERC FORM NO.2 (ED 12-96)Page 334
Name of Respondent This report is:
(1) (X)An Original
Date of Report
(Mo, Da Yr)
MISCELLANEOUS GENERAL EXPENSES (Account 930.2) (Gas)
1. Provide the information requested below on miscellaneous general expenses.
2. For Other Expenses, show the (a) purpose, (b) recipient and (c) amount of such itmes. List separately amounts of $250,000 or
more however, amounts less that $250,000 mav be arouped if the number of items of so croup is shown.
Year of Report
Avista Corp.(2) ( ) A Resubmission April 18,2007 Dec. 2006
Line
No.
Description
(a)
Industry Association Dues
Experimental and General Research Expenses
a. Gas Research Institute (GRI)
b. Other
Publishing and Distributing Information and Reports to Stockholders; Trustee, Registrar and Transfer
Agent Fees and Expenses, and Other Expenses of Servicing Outstanding Securities of the
Respondent
Directors Fees and Expenses
Miscellaneous General Expenses
Community Relations
Educational - Informational
Other Miscellaneous General Expenses
Other Miscellaneous Labor
TOTAL
FERC FORM NO.2 (ED. 12-96)Page 335
Amount
(b)
259,460
928
158,794
491 122
102,999
192
70,661
138 156
Name of Respondent This R~rt Is:
(1 ) IKJ An Original
Date of Report
(Mo, Da, Yr)
Year of Report
A vista Corporation (2) A Resubmission April 18,2007 December 31 2006
DEPRECIATION, DEPLETION, AND AMORTIZATION OF GAS PLANT (Accounts 403 404.404.404.3,404.405)
(Exce t Amortization of Ac uisition Ad'ustments)
Line
No.
1. Report in Section A the amounts of depreciation between the report years (1971,1974 and every fifth year
expense, depletion and amortization for the accounts in- thereafter).
dicated and classified according to the plant functional Report in column (b) all depreciable plant balances togroups shown. which rates are applied and show a composite total. (If
2. Report all available information called for in Sec- more desirable, report by plant account, sub account or
tion B for the report year 1971, 1974 and every fifth year functional classifications other than those pre-printed in
thereafter. R oft on! annual chan es in the intervals column (a). Indicate at the bottom of Section B the
Section A. Summ of De reciation, De letion, and Amortization Char es
Amortization and Deple-
tion of Producing Natural
Gas Land and Land
Rights (Account 404.
Functional Classification
Depreciation
Expense
(Account 403)
Amortization of Under-
ground Storage, Land
Land Rights and Misc.
Intang (Account 404.
(a)(c)
6,453
244
419,535
lant- Allocated
13,941 699
607 761
189,080
TOTAL 159,319 453
Section B .
1. Plant balances listed in Section C, Column b are derived at by taking the beginning plant balance plus the ending plant balance
divided by two.
FERC FORM NO.2 (ED. 12-86)Page 336
Name of Respondent This R~OrtIs:Date of Report Year of Report (1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission April 18, 2007 December 31 2006
DEPRECIATION, DEPLETION, AND AMORTIZATION OF GAS PLANT (Accounts 403, 404., 404., 404., 404., 405)
(Except Amortization of Acquisition Adjustments) (Continued)
manner in which column (b) balances are obtained.depreciation charges, show at the bottom of Section B
average balances, state the method of averaging used.any revisions made to estimated gas reserves.
For column (c) report available infoIIDation for each plant If provisions for depreciation were made during the
functional classification listed in column (a). If composite year in addition to depreciation provided by application
depreciation accounting is used.Report available infor-of reported rates, state at the bottom of Section B the
mation called for in columns (b) and (c) on this basis.amounts and nature of the provisions and the plant items
Where the unit-of-production method is used to determine to which related.
Section A. Summary of Depreciation, Depletion, and Amortization Charges
Amortization of Amortization of
Other Limited-teIID Leasehold Amortization of Total Line
Gas Plant Improvements Other Gas Plant (btog)Functional Classification No.
(Account 404.3)(Account 404.(Account 405)
and 404.75)
(el (lid (h)(a)
177 039 183,492 Intangible plant
244 Production plant, manufactured !:!as
Production and gathering plant
natural gas
Products extraction plant
419 535 Underground gas storage Plant
Other storage plant
Base load LNG terminating and
I processing plant
Transmission plant
13,941 699 Distribution plant
842 612 603 General plant
393,168 222 714 804 962 Common general plant-Allocated
570 207 227 556 16,963 535 TOTAL
FERC FORM NO.2 (ED. 12-86)Page 337
Name of Respondent This R
iEJrt Is:
Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
complete
A vista Corporation (2)A Resubmission April 18, 2007 December 31, 2006
Section C.
Depreciable Applied
Line Functional Classification:Plant Base Depr. Rate(s)
No.(Thousands)(percent)
(a)(b)(c)
Underground Gas Storage Plant: (2)
350
351 070 1.75%
352 819 00%
352.203 22%
352.1 (Leasehold Improvements)254
352.972 54%
353 823 06%
354 009 2.32%
355 172 66%
356 407 97%
357 681 77%
Total 18,452
Production - Manufactured Gas:
2305 80%
2311 80%
Total
Distribution lant:
375.712 19%
376 243,973 2.38%
378 693 13%
379 163 24%
380 169,347 67%
381 860 1.94%
385 050 2.43%
387
Total 486,799
General Plant:
390.2,468 61%
390.
391 379 53%
391.1 6.30%
392 765
393 120 51%
394 542 24%
395 914 27%
396 594
397 925 82%
398 1.28%
Total 16,795
Total Depreciable Gas Plant 522 110
FERC FORM NO.2 (ED. 12-H6)Page 338-
This Page Intentionally Left Blank
Name of Respondent This report is:Date of Report Year of Report
(1) (X)An Original (Mo, Da, Yr)
Avista Corp.(2) ( ) A Resubmission April 18, 2007 Dec. 31 , 2006
Particulars Concerning Certain Income Deduction and Interest Charaes Accounts
Report the information specified below, in the order given, for the respective income deduction and interest charges accounts.(a) Miscellaneous Amortization
(Account 425) - Describe the nature of items included in this account, the contra account charged, the total of amortization charges for the year, and the period of
amortization. (b) Miscellaneous Income Deductions-Report the nature, payee, and amount of other income deductions for the yearas required by Accounts 426.
Donations; 426., Life Insurance; 426.3, Penalties; 426.4, Expenditures for Certain Civic, Political and Related Activities; and 426.5, Other Deductions, of the
Uniform System of Accounts. Amounts of less the $250 000 may be grouped by classes within the above accounts. (c) Interest on Debt to Associated Companies
(Account 430)-For each associated company that incurred interest on debt during the year, indicate the amount and interest rate respectively for (a) advances on
notes, (b) advances on open account, (c) notes payable, (d) accounts payable and (e) other debt, and total interest. Explain the nature of other debt on which
interest was incurred during the year.
Line Description Amount
No.(a)(b)
Acct. 425.00 - MISCELLANEOUS AMORTIZATIONS
Gas plant acquisition adj. Applicable to purchase of CP National
OreQon & California distribution system. Contra account 115.00.120,288
Total - 425.120,288
Acct. 426.10 - DONATIONS
Avista Foundation 750,000
Project Share 217 034
Items Under $50,000 401 052
Total 426.368,086
Acct. 426.20 - LIFE INSURANCE
Officers Life 224 338
SERP 748,118
Total 426.1 ,972 456
Acct. 426.30 - PENAL TIES
All Items Under $10,000 500
Total 426.30 500
Acct. 426.40 - EXPENDITURES FOR CERTAIN CIVIC, POLITICAL
AND RELATED ACTIVITIES
Items Under $100,000 052,120
Total 426.40 052,120
Acct. 426.50 - OTHER DEDUCTIONS
Other (160,044)
Coyote SprinQs 2 Reserve Amortization (235,825)
Kettle Falls Reserve Amortization (53,138)
Executive Deferred Compensation 1,420,862
Cash Reduction for PGE Monetization 88,125
Total 426.50 059,980
FERC FORM NO.2 (ED. 12-87)Page 340
Name of Respondent This report is:Date of Report Year of Report
(1) (X)An Original (Mo, Da, Yr)
Avista Corp.(2) ( ) A Resubmission April 18, 2007 Dec. 31 , 2006
Particulars Concerning Certain Income Deduction and Interest Charges Accounts
Report the information specified below, in the order given, for the respective income deduction and interest charges accounts.(a) Miscellaneous Amortization
(Account 425) - Describe the nature of items included in this account, the contra account charged, the total of amortization charges for the year, and the period of
amortization. (b) Miscellaneous Income Deductions-Report the nature, payee, and amount of other income deductions for the year as required by Accounts 426.
Donations; 426., Life Insurance; 426., Penalties; 426.4, Expenditures for Certain Civic, Political and Related Activities; and 426.5, Other Deductions, of the
Uniform System of Accounts. Amounts of less the $250 000 may be grouped by classes within the above accounts. (c) Interest on Debt to Associated Companies
(Account 430)-For each associated company that incurred interest on debt during the year, indicate the amount and interest rate respectively for (a) advances on
notes, (b) advances on open account, (c) notes payable, (d) accounts payable and (e) other debt, and total interest. Explain the nature of other debt on which
interest was incurred during the year.
Line Description Amount
No.(a)(b)
Acct. 430.00 - INTEREST ON DEBT TO ASSOC. COMPANIES
Avista Capital II (long-term debt) (variable rate ranged from 5.285 to 6.275 percent)095,789
AVA Capital Trust III (interest rate of 6.5 percent)020,640
Total 430.116,429
Acct. 431.00 - OTHER INTEREST EXPENSE
Interest on collateral deposits from counterparties 052 325
All items less than $250,000 672,480
Total 431.724,805
FERC FORM NO.2 (ED. 12-87)Page 340.
Name of Respondent This 0ort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2006/04(2) nA Resubmission 04/18/2007
REGULATORY COMMISSION EXPEN
1. Report particulars (details) of regulatory commission expenses incurred during the current year (or incurred in previous years, if
being amortized) relating to format cases before a regulatory body, or cases in which such a body was a party.
2. Report in columns (b) and (c), only the current year s expenses that are not deferred and the current year s amortization of amounts
deferred in previous years.
Line Description Assessed by Expenses Total , u~Terrea
No.(Furnish name of regulatory commission or body the Regulatory ' Expense for In Account
Commission Current Year 18;2.3 adocket or case number and a description of the case)Utility (b) + (c)Beginning 0 Year
(a)(b)(c)(d)(e)
1 Federal Energy Regulatory Commission
2 Charges include annual fee and license fees
3 for the Spokane River Project, the Cabinet
4 Gorge Project and the Noxon Rapids Project.
5 Fees assessed were a net credit for 2006 due
6 to credits from Other Federal Agencies
7 assessed by the FERC 294 628 047 220,581
9 Washington Utilities and Transportation
Commission: includes annual fee and various
other electric dockets 624,517 366 355 990 872
Includes annual fee and various other natural
gas dockets 349,147 171 097 520,244
Idaho Public Utilities Commission
Includes annual fee and various other electric
dockets 465,237 135 612 600,849
Includes annual fee and various other natural
gas dockets 184 558 354 238,912
Public Utility Commission of Oregon
Includes annual fees and various other natural
gas dockets 392 282 174 713 566,995
Not directly assigned electric 515 809 515,809
Not directly assigned natural gas 185,570 185,570
TOTAL 721 113 677,557 398,670
FERC FORM NO.2 (ED. 12-96)Page 350
Name of Respondent This
wort
Is:Date of Report Year/Period of Report
A vista Corporation (1) An Original (Mo, Da, Yr)End of 2006/Q4(2) DA Resubmission 04/18/2007
REG JLA TORY COMMISSION EXPENSES (Continued)
3. Show in column (k) any expenses incurred in prior years which are being amortized. List in column (a) the period of amortization.
4. List in column (f), (g), and (h) expenses incurred during year which were charged currently to income, plant, or other accounts.
5. Minor items (less than $25 000) may be grouped.
EXPENSES INCURRED DURING YEAR AMORTIZED DURING YEAR
CURRENTLY CHARGED TO Deferred to Contra Amount Deferred in Line
Department f\c~~~m Amount Account 182.Account Account 182.No.End of Year
(f)(0)(h)(i)(k)(I)
Electric 928 220,581
Electric 928 990 872
Gas 928 520 244
Electric 928 600,849
Gas 928 238,912
Gas 928 566,995
Electric 928 515,809
Gas 928 185 570
398 670
FERC FORM NO.2 (ED. 12-96)Page 351
Name of Respondent
Avista Corporation
Year/Period of Report
End of 2006/04
This ~ort Is: Date of Report(1) ~An Original (Mo, Da, Yr)
(2) D A Resubmission 04/18/2007
DISTRIBUTION OF SALARIES AND AGES
Report below the distribution of total salaries and wageS! for the year. Segregate amounts originally charged to clearing accounts to
Utility Departments, Construction, Plant Removals, and Other Accounts, and enter such amounts in the appropriate lines and columns
provided. In determining this segregation of salaries and wages originally charged to clearing accounts, a method of approximation
giving substantially correct results may be used.
(a)
858,729
329,149
300 182
428 000
299,946
40,412 037
Line
No.
Classification Direct PayrollDistribution Total
Electric
Operation
Production
Transmission
Regional Market
Distribution
7 Customer Accounts
8 Customer Service and Informational
Sales
10 Administrative and General
11 TOTAL Operation (Enter Total of lines 3 thru 10)
12 Maintenance
13 Production
14 Transmission
15 Regional Market
16 Distribution
17 Administrative and General
18 TOTAL Maintenance (Total of lines 13 thru 17)
19 Total Operation and Maintenance
20 Production (Enter Total of lines 3 and 13)
21 Transmission (Enter Total of lines 4 and 14)
22 Regional Market (Enter Total of Lines 5 and 15)
23 Distribution (Enter Total of lines 6 and 16)
24 Customer Accounts (Transcribe from line 7)
25 Customer Service and Informational (Transcribe from line 8)
26 Sales (Transcribe from line 9)
27 Administrative and General (Enter Total of lines 10 and 17)
28 TOTAL Oper. and Main!. (Total of lines 20 thru 27)
29 Gas
30 Operation
31 Production-Manufactured Gas
32 Production-Na!. Gas (Including Expl. and Dev.
33 Other Gas Supply
34 Storage, LNG Terminaling and Processing
35 Transmission
36 Distribution
37 Customer Accounts
38 Customer Service and Informational
39 Sales
40 Administrative and General
41 TOTAL Operation (Enter Total of lines 31 thru 40)
42 Maintenance
43 Production-Manufactured Gas
44 Production-Natural Gas (Including Exploration and Development)
45 Other Gas Supply
46 Storage, LNG Terminaling and Processing
47 Transmission
622 963
118 112
107 851
229,011
976 260
695 170
FERC FORM NO.2 (ED. 12-88)Page 354
Name of Respondent
Avista Corporation
This ~rt Is: Date of Report(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/18/2007
DIST IBUTION OF SALARIES AND WAG S (Continued)
Year/Period of Report
End of 2006/04
Line
No.
Classification
(a)
Direct PayrollDistribution
(b)
Total
48 Distribution
49 Administrative and General
50 TOTAL Main!. (Enter Total of lines 43 thru 49)
51 Total Operation and Maintenance
52 Production-Manufactured Gas (Enter Total of lines 31 and 43)
53 Production-Natural Gas (Including Expl. and Dev.) (Total lines 32
54 Other Gas Supply (Enter Total of lines 33 and 45)
55 Storage, LNG Terminaling and Processing (Total of lines 31 thru
56 Transmission (Lines 35 and 47)
57 Distribution (Lines 36 and 48)
58 Customer Accounts (Line 37)
59 Customer Service and Informational (Line 38)
60 Sales (Line 39)
61 Administrative and General (Lines 40 and 49)
62 TOTAL Operation and Main!. (Total of lines 52 thru 61)
63 Other Utility Departments
64 Operation and Maintenance
65 TOTAL All Utility Dep!. (Total of lines 28, 62, and 64)
66 Utility Plant
67 Construction (By Utility Departments)
68 Electric Plant
69 Gas Plant
70 Other (provide details in footnote):
71 TOTAL Construction (Total of lines 68 thru 70)
72 Plant Removal (By Utility Departments)
73 Electric Plant
74 Gas Plant
75 Other (provide details in footnote):
76 TOTAL Plant Removal (Total of lines 73 thru 75)
77 Other Accounts (Specify, provide details in footnote):
78 Stores Expense (163)
79 Regulatory assets (182)
80 Preliminary Survey and Investigation (183)
81 Small tools expense (184)
82 Miscellaneous Deferred Debits (186)
83 Non-operating expenses (417)
84 Expenditures of Certain Civic, Political and Related Activiti
85 Employee Incentive Plan (232380)
86 DSM Tariff Rider and Payroll Equalization (242600, 242700)
95 TOTAL Other Accounts
96 TOTAL SALARIES AND WAGES
619,584
389
405,430
893 587
118,112
107 851
229,011
976,260
13,371 224
20,789,909
810,892
307,960
042,614
28,097 869
853 506
600,801 350,574 951 375
l;J;.J1b.GEL:jE:' CF :_18~...
-- -. .._
2 .cJjLLI_,_j-,-.;2~, ~ '
,-
L1..:LL.L.. LLLkG Sl.:2L,.
:..
977 111 231 323 208,434
80,663 19,097 760
057 774 250,420 308 194
1 ,455,434 1 ,455,434
322 343 322,343
48,931 48,931
761 334 761,334
21,374 771 374 771
782,046 782,046
224 544 224 544
113 207 113 207
069,403 167,465 901,938
46,054,151
127 495,987
22,497,440 23,556,711
127,495 990
FERC FORM No.2 (ED. 12-88)Page 355
-----
Name of Respondent This report is:
( X) An Original
Date of Report Year Ending
(Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31, 2006
CHARGES FOR OUTSIDE PROFESSIONAL AND OTHER CONSULTATIVE SERVICES
1. Report the information specified below for all charges made during the year any kind, or individual (other than for services as an employee or for
included in any account (including plant accounts) for outside consultative and payments made for medical and related services) amounting to
other professional services. These services include rate, management, more than $250 000, including payments for legislative services
construction, engineering, research, financial, valuation, legal , accounting, except those which should be reported in Account 426.4
purchasing, advertising, labor relations, and public relations, rendered for the Expenditures for Certain Civic, Political and Related Activities.
respondent under written or oral arrangement, for which aggregate payments were (a) Name of person or organization rendering services.
made during the year to any corporation partnership, organization of (b) Total charges for the year.
2. Designate associated companies with an asterisk in column (b).
Line
No.
Ascentium
Booz Allen & Hamilton Inc
Davis Wright Tremaine LLP
Dewey Ballantine LLP
Deloitte & Touchee LLP
Dorsey & Whitney LLP
Goldman Sachs & Co
Harbor Fisheries Inc
Hatch Acres Corporation
10 Heller Ehrman White &...
11 Idaho Dept of Fish & Game
12 Paine Hamblen Coffin Brooke
13 Rapidigm Inc
14 Van Ness Feldman
Description
(a)
Amount
(in dollars)
(c)(b)
416 552
613 800
634 978
080 877
211,400
582 125
314 999
354 650
973 124
063 482
354 145
1,489,181
418,242
360,892
FERC FORM NO.2 (ED. 12-96)Page 357 (Next page is 512)
This Page Intentionally Left Blank
Name of Respondent Year of Report
Avista Corporation
This ~ort Is:(1) ~ An Original
(2) 0 A Resubmission
Date of Report
(Mo, Da, Yr)
April 18, 2007 Dec. 31,2006
GAS STORAGE PROJECTS
1. Report injections and withdrawals of gas for all storage projects used by respondent.
Item
Line
No.
Gas
Belonging to
Respondent
(Dth)
Gas
Belonging to
Others
(Dth)
Total
Amount
(Dth)b.
712
301 ,979
457 883
375 505
294 585
310,060
33,971
788,695
272 152
885,366
194
580
258
748
368
477
25,662
232,603
325 118
830,526
712
301 979
457 883
375,505
294,585
310,060
33,971
788 695
272 152
885 366
194
580
258
748
368
477
25,662
232 603
325,118
830,526
FERC FORM NO.2 (ED 12-96)Page 512
Name of Respondent This ~ort Is:Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
vista Corporation (2)A Resubmission April 18, 2007 Dec. 31 , 2006
GAS STORAGE PROJECTS (Continued)
1. On Line 4, enter the total storage capacity certificated by FERC.
Report total amount in Dth or other unit as applicable on lines 2 , 7.
If quantity is converted from Mcf to Dth, provide conversion factor in a footnote.
Line Item Total
No.Amount
(a)(bTStoraQe Operations (In Dth)
Top or Workina Gas End of Year (Note)151 835
Cushion Gas (Includina Native Gas)321 035
Total Gas in Reservoir (Enter Total of Line 1 and 2)13,472 870
Certificated Storage Capacity 814 188
Number of Injection - Withdrawal Wells
Number of Observation Wells
Maximum Dav s Withdrawal from Storage 282 038
Date of Maximum Davs' Withdrawal November 28, 2006
LNG Terminal Companies (In Dth)(1)
Number of Tanks
Capacity of Tanks
LNG Volumes
Received at "Ship Rail"
Transferred to Tanks
Withdrawn from Tanks
Boil Off" Vaporization Loss
Notes:
The above information represents the company s one-third share of the Jackson Prairie Underground Storage Project.
The factor to convert Met to Dth is 1 .026.
(1) Respondent is a participant in the facilities, not an owner and is charged a fee for demand deliverability and capacity.
FERC FORM NO.2 (ED 12-96)Page 513
Name of Respondent This ~ort Is:Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
A vista Corp.(2)A Resubmission April 18,2007 Dec. 31, 2006
TRANSMISSION MAINS
Show particulars Called for Concerning Transmission Mains
Total Length in Taken up or Total Length
~ine Kind of Material Diameter of Use Beginning of Laid During Abandoned During in Use End
No.Pipe, Inches Year, Feet Year, Feet Year, Feet of Year, Feet
(a)(b)(c)(d)(e)if)
(Moved to Distribution)
Steel Coated Over 4" through 10"723 360 21,120 744,480
Steel Coated 4" or Less 21,120 120
TOTALS 120
* Show separately and Identify lines held under a title other than full ownership.
FERC FORM NO.2 (ED 12-87)Page 514
Name of Respondent
Avista Corp.
ine Kind of Material
No.
(a)
Steel Wrapped
Steel Wrapped
Steel Wrapped
Steel Wrapped
Steel Wrapped
Plastic
Plastic
Plastic
Plastic
Plastic
TOTALS
This ~ort Is:(1) I2S.J An Original
(2) A Resubmission
DISTRIBUTION MAINS
Date of Report
(Mo, Da, Yr)
April 18 2007
Diameter of
Pipe, Inches
(b)
Show particulars Called for Concerning Distribution Mains
Total Length in
Use Beginning of
Year Feet
(c)
Laid During
Year, Feet
(d)
I Taken up or Total Length
Abandoned Durin in Use End
Year Feet of Year Feet(e) (f)
Less than 2"
2" to 4"
4" to 8"
8" to 12"
Over 12"
Less than 2"
2" to 4"
4" to 8"
8" to 12"
Over 12"
801 760
719,200
328 480
179,520
800
612 960
967 360
559 680
Note: WP Natural Gas laid pipe is net of retirements.
221 760
FERC FORM NO.Page 514-
499,520
105 600
564,960
120
180 640
612,480
174 240
158 560
21,120
120
Year of Report
Dec. 31 2006
10,301,280
803,680
893,440
200,640
800
793 600
579 840
733,920
359 200
Name of Respondent This Report Is:Date of Report Year of Report
(1)1Rj An Original (Mo, Da, Yr)
Avista Corp.(2)0 A Resubmission April 18 2007 Dec. 31 , 2006
SERVICE PIPES GAS
Show the particulars called for concerning the line service pipe in possession of the respondent at the close of the year.
Number at Number ~umber Remove Number Average
Line Type Diameter Beginning Added or Abandoned at Close Length
No.in Inches of Year During Year During Year of Year in Feet
(a)(b)(e)(d)(e)(f)
(g)
Steel Wrapped l' or Less 086 328 071 343 Not
Steel Wrapped 1" thru 2"753 776 2,480 Available
Steel Wrapped 2" thru 4"111 203
Steel Wrapped 4" thru 8"
Steel Wrapped Over 8"
Plastic l' or Less 198,218 250 824 258 644
Plastic 1" thru 2"685 075 760
Plastic 2" thru 4"167 228
Plastic 4" thru 8"
Plastic Over 8"
TOTALS 295 007 632 946 359 693
FERC FORM NO.Page 514-
Name of Respondent This R
iKlort Is:
Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
A vista Corp.(2)A Resubmission April 18,2007 Dec. 31,2006
CUSTOMER'S METERS
Owned
Line Size Type Make Capacity Beginning Added Retired Owned
No.of Year During Year During Year End of Year
(a)(b)(c)(d)(e)(f)
(/?)
(h)
Detailed information not available.
TOTAL 317,187 13,159 117 324,229
FERC FORM NO.Page 514-
Name of Respondent
Avista Corporation
This f32port Is:(1) ~ An Original
(2) D A Resubmission
Date of Report
(Mo, Da, Yr)
April 18, 2007
Year of Report
Dec. 31 2006
AUXILIARY PEAKING FACILITIES
1. Report below auxiliary facilities of the respondent for meeting seasonal peak demands on the respondent's system,such as underground storage projects, liquefied petroleum installations, gas liquefaction plants, oil gas sets, etc.
2. For column (c), for underground storage projects, report the delivery capacity on February 1 of the heating
season overlapping the year-end for which this report is submitted. For other facilities , report the rated maximum
daily delivery capacities.
3. For column (d), include or exclude (as appropriate) the cost of any plant used jointly with another facility on the basis
of predominant use, unless the auxiliary peaking facility is a separate plant as contemplated by general instruction
12 of the Uniform System of Accounts.
(c)
Cost
Facility
(In dollars)
(d)
Was Facility Operated
on Day of Highest
Transmission Peak
Deliverv?Line
No,
Location of
Facility
Type of Facility
Maximum Daily
Delivery Capacity
of Facility.
Dth
(a)(b)
Yes
(e)(f)
2 Chehalis, Washington
Chehalis, Washington
10 Plymouth, Washington
14 Plymouth, Washington
23 Notes:
25 (1) Respondent is a participant in the facilities, not an owner and is charged a fee for demand deliverability and capacity.
Underground Natural Gas
Storage Field
Washington & Idaho Supply
112 667 926 377
Underground Natural Gas
Storage Field
Oregon Supply
654 (1 )
Liquefied Natural Gas
Storage Tanks
Washington & Idaho Supply
22,000 (1 )
Liquefied Natural Gas
Storage Tanks
Oregon Supply
19,200 (1 )
FERC FORM NO.2 (ED 12-96)Page 519
Name of Respondent This Report Is:Date of Report Year of Report
An Original (Mo, Da, Yr)
Avista Corporation A Resubmission April 18, 2007 Dec. 31 , 2006
GAS ACCOUNT - NATURAL GAS
The purpose of this schedule is to account for the quantity or intrastate facilities and which the reporting pipeline received
of natural gas received and delivered by the respondent.through gathering facilities or intrastate facilities, but not through any
Natural gas means either natural gas unmixed or any of the interstate portion of the reporting pipeline, and (3) the gathering
mixture of natural and manufactured gas,line quantities that were not destined for interstate market or that were
Enter in column ( c ) the Dth as reported in the not transported through any interstate portion of the reporting
schedules indicated for the items of receipts and pipeline.
deliveries.7 Also indicate in a footnote (1) the system supply quantities of gas
Indicated in a footnote the quantities of bundled sales that are stored by the reporting pipeline, during the reporting year and
and transportation gas and specify the line on which also reported as sales, transportation, and compression volumes by
such quantities are listed,the reporting pipeline during the same reporting year, (2) the system
If the respondent operates two or more systems which supply quantities of gas that are stored by the reporting pipeline during
are not interconnected, submit separate pages for this the reporting year which the reporting pipeline intends to sell or
purpose. Use copies of pages 520,transport in a future reporting year, and (3) contract storage
Also indicate by footnote the quantities of gas not subject quantities.
to Commission regulation which did not incur FERC B Also indicate the volumes of pipeline production field sales that are
regulatory costs by showing (1) the local distribution included in both the companys total sales figure and the company's
volumes another jurisdictional pipeline delivered to the total transportation figure, Add additional rows as necessary to
local distribution company portion of the reporting report all data, numbered 14,14,, etc.
pipeline (2) the quantities the reporting pipeline
transported or sold through its local distribution facilities
01 NAME OF SYSTEM
Line Ref.
No.Item Page No.Amount of Dth (1)
(a)(b)(e)
GAS RECEIVED
Gas Purchases (Accounts 800-805)212 568
Gas of Others Received for Gatherinc (Account 489.303
Gas of Others Received for Transmission (489.305
Gas of Others Received for Distribution (Account 489.301 14,971 733
Gas of Others Received for Contract Storace (Account 489.4)307
Exchanced Gas Received from Others (Account 806)328
Gas Received as Imbalances (Account 806)328
Receipts pf Respondent's Gas Transported by Others (Account 858)332
Other Gas Withdrawn from Storace (Explain)
Gas Received from Shippers as compressor Station Fuel
Gas Received from Shippers as Lost and Unaccounted for
Other Receipts (Specify):
Total Receipts (Total lines 3 thru 14.184 301
(;;A~ ,~I
Gas Sales (Accounts 480 - 484)530,437
Deliveries of Gas Gathered for Others (Account 489.303
Deliveries of Gas Transported for Others (Account 489.305
Deliveries of Gas Distributed for Others (Account 489.301 971 733
Deliveries of Contract Storace Gas (Account 489.4)307
Exchance Gas Delivered to Others (Account 806)328
Gas Delivered as Imbalances (Account 806)328
Deliveries of Gas to Others for Transportation (Account 858)332
Other Gas Delivered to Storage (Explain)
Gas Used for Compressor Station Fuel 509
Other Deliveries (Specify): Sales for Resale 742 657
Total Deliveries (Total lines 17 thru 27.63,244 827
GAS II\ITED FOR
Production Svstem Losses
Gatherinc System Losses
Transmission System Losses
Distribution Svstem Losses 939,474
Storace Svstem Losses
Other Losses (Specify)
Total Unaccounted For (Total lines 30 thru 35)939,474
Total Deliveries & Unaccounted For (Total lines 28 thru 36)184 301
FERC FORM NO.2 (REV 04-04)Page 520
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo , Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
FOOTNOTE DATA
ISchedule Page: 103.Line No.13 Column:
All assets owned by Coyote Springs 2, LLC were transfered to Avista Utilities during 2006.
I FERC FORM NO.(ED. 12-87) Page 450.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
FOOTNOTE DATA
ISchedule Page: 104 Line No.Column:
Effective January 6, 2006 named Senior Vice President and Chief Financial Officer
ISchedule Page: 104 Line No.22 Column:
On January 6, 2006 named Vice President and Treasurer. Ann Wilson was named Vice
President and Controller.
I FERC FORM NO.2 (ED. 12-87) Page 450.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
FOOTNOTE DATA
ISchedule Page: 118 Line No.52 Column:
Line 52 - Subsidiary Expense & Misc Subs Equity Comp Consists of:
($1 445,216)
($ 100,734)
($1,545,950)
Transfers from Account #216150 related to Subsidiary Expenses (agrees to line 37)
Subsidiary (Avista Advantage) Equity Compensation booked to #216150
Line 52 - Subsidiary Expense & Misc Subs Equity Comp
I FERC FORM NO.2 (ED. 12-87) Page 450.
Name of Respondent This Report is:Date of Report YearIPeriod of Report
(1) An Original (Mo, Da, Yr)
A vista Corporation (2)A Resubmission 04/1712006 2oo6/Q4
FOOTNOTE DATA
'Schedule Page: 219 Line No.:15 Column: c
Includes: Reverse 2005 RemovaJ Work in Progress - $175,761, 2006 Removal Work in Progress - .:::$99,910::.;
Correction 2005 software retire from 108000 to 111000 - $1 000,821;
Add back depreciation on OR asset retired prematurely - $9,685
IFERC FORM NO.2 (ED. 12-87)e 450.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
FOOTNOTE DATA
!schedule Page: 224 Line No.Column:
Line 2 - Avista Capital - Equity in Earnings Consists of:
$16,839,462 Avista Capital YTD Net Income
($ 100,734)Subsidiary (Avista Advantage) Equity Compensation
$16,738,728 Line 2 - Avista Capital - Equity in Earnings
!schedule Page: 224 Line No.Column:
Line 4 - OCI Investment in Subs:
booked to #123120
Represents the change in accumulated other comprehensive loss for subsidiary companies.
Amount is not included in account 418.1. Offsetting amount is reflected in account 219.
I FERC FORM NO.2 (ED. 12-87) Page 450.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/Q4
FOOTNOTE DATA
!schedule Page: 233.Line No.Column: b
With the implementation of a new financial system the following lines were combined
equal to the balance on line 2 page 233.1: lines 10,11,12,13,15,16,20,21,23,28,& 31
ISchedule Page: 233.Line No.35 Column: b
Footnote Linked. See note on 233.1, Row: 2, col/item:
!schedule Page: 233.Line No.36 Column: b
With the implementation of a new financial system Conservation program balances for lines
14,17,18,19,24 and 25 were combined to equal balances on lines 35 & 36.
I FERC FORM NO.2 (ED. 12-87) Page 450.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
FOOTNOTE DATA
'Schedule Page: 250 Line No.Column: i
Restricted Shares
Restricted shares vest in equal thirds each year over a three-year period and are payable in A vista Corp. common stock at the end of
each year if the service condition is met. In' addition to the service condition, the Company must meet a return on equity target in order
for the CEO's restricted shares to vest. During the vesting period, employees are entitJed to dividend equivalents which are paid when
dividends on the Company s common stock are declared. Restricted stock is valued at the average of the high and low market of the
Company s common stock on the grant date. As of December 31 , 2006, the restricted shares had unrecognized compensation expense
of $0.4 million and an intrinsic value of $0.9 milJion. The intrinsic value represents the total market value of restricted shares as of
December 31 , 2006. The following table summarizes restricted stock activity:
Un vested Shares at December 31, 2005
Shares granted
Shares cancelled
Shares vested
Unvested Shares at December 31 , 2006
36,260
(80)
Weighted average fair vaJue at grant date
36.180
$21.32
!Schedule Page: 250 Line No.Column: j
Restricted Shares
Restricted shares vest in equaJ thirds each year over a three-year period and are payable in A vista Corp. common stock at the end of
each year if the service condition is met. In addition to the service condition, the Company must meet a return on equity target in order
for the CEO's restricted shares to vest. During the vesting period, employees are entitJed to dividend equivalents which are paid when
dividends on the Company s common stock are decJared. Restricted stock is valued at the average of the high and low market of the
Company s common stock on the grant date. As of December 31, 2006, the restricted shares had unrecognized compensation expense
of $0.4 million and an intrinsic value of $0.9 million. The intrinsic value represents the total market value of restricted shares as of
December 31 , 2006. The following table summarizes restricted stock activity:
Unvested Shares at December 31 , 2005
Shares granted
Shares cancelled
Shares vested
Unvested Shares at December 31, 2006
36,260
(80)
Weighted average fair value at grant date
36.180
$21.32
I FERC FORM NO.2 (ED. 12-87)Page 450.
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
FOOTNOTE DATA
ISchedule Page: 261 Line No.Column: b
Taxable Income Not Reported on Books:
BETC Interest - Perm Diff
BP A C&RD Receipts
Contributions in Aid of Construction (CIACs)
CSS Temp Service Fees
Customer Uncollectibles - SaJes for Resale
Customer Uncollectibles
Transportation Tax Depreciation Capitalized
TOTAL
(10 792)
(210,191)
801,597
225,122
(339,277)
(158,285)
517,926
826,100
'Schedule Page: 261 Line No.: 10 Column: b
Deductions Recorded on Books Not Deducted for Return:
AirpJane Lease Payments
Amortization of Centra1ia Gain
Book Depreciation
CIT Operating Lease
DSM - Old Program Amortization
FAS 1 06 & HRA (68.6% O&M only) 228300 ZZ ZZ & 228330 ZZ ZZ
FASB 1O6-Def Amort-Postretirement Benefits
Hamilton Street Bridge
Meal Disallowances - Perm Diff
Non-monetary Purchased Power
Paid Time Off Equalization
Political Contributions - Perm Diff
Preferred Dividend Requirement - Perm Diff
Rathdrum Turbine Sales Tax Refund
Redemption Expense Amortization
SERP-SupplementaJ Execitive Retirement PJan
Transportation Book Depreciation
WNP3 - Investment Exchange Power
TOTAL
272,353
(2,407,452)
003 303
(39 276)
717 848
361 703)
394 920
(247,187)
329,217
386 545
246 025
052 120
915,594
(33,815)
735,325
814 154
417 417
2,450,028
93,645 416
ISchedule Page: 261 Line No.15 Column: b
Income Recorded on Books Not Included in Return:
AFUDC
Boulder Park Disallowance IPUC Order October 2004
Clark Fork PMEs
CS2 Retention
Deferred Compensation
II) Deferred Gas Costs & Interest
W A Deferred Gas Costs & Interest
Equity Stock Comp
FASB 87 (68.6% O&M)
Gain General Office Building
Grid WestJRTO Funding - ED II) & W A
Idaho PCA & Interest
Injury & Damages
Kettle Falls Disallowance
I FERC FORM NO.2 (ED. 12-87)
(1,460,893)
(103,656)
(218,832)
(371 328)
875 785
714 760
672 197
092,122
(1,476 124)
(261,456)
065,989)
(1,186,302)
164 148
(323,401)
Page 450.
Name of Respondent This Report is:Date of Report Year/period of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/18/2007 2006/04
FOOTNOTE DATA
Liability Stock Camp
NE Tank Spill
Nez Perce SettJement ED ill & W
Officers Life Insurance - Perm Diff
OR Deferred Gas & Interest
OR DSM Deferred & Interest
Oregon Senate Bill 408 (SB 408)
PGE Monetization (Contract Amort & Spokane Energy Net Income)
Section 199 Manufacturing Deduction - Perm Diff
Unbilled Revenue Add-ons
W A Deferred Power Costs & Interest
Wartsilla Units
TOTAL
652,489
(45,700)
(16,796)
(706 105)
317,142
(713 714)
300 000
007,807
(2,100,000)
343,385
26,374,425
153 162
56,617 126
ISchedule Page: 261 Line No.20 Column: b
Deductions on Return Not Charged Against Book Income:
Basic American Foods - Non-Utility
BP A Residential Exchange - ED ill & W
DSM Tariff Rider
Removal/Salvage
Tax Depreciation - Common
WPNG Acquisition OR
TOTAL
788
(1,960 752)
957,346)
(967,967)
(105,409,069)
120,289
(110,167 057)
I FERC FORM NO.2 (ED. 12-87) Page 450.
AiJU
(;;
A vista Corp.
2006 Form 2
State Supplements
, , ~: '.- ..
1 "
i ; ,;
/ - ;'. (
1;). I "~II" .
)' ,:;:!! '
!r!!jii~::;
:" "
WASHINGTON
Name of Respondent This R~ort Is:
(1) 129 An Original
Date of Report
(Mo, Da, Yr)
State of Wash in ton
Year of Report
Avista Corp (2) 0 A Resubmission Dec. 31, 2006
STATEMENT OF INCOME FOR THE YEAR
Apr. 18, 2007
I. Report amounts for accounts 412 and 413, Revenue
and Expenses from Utility Plant Leased to Others, in another
utility column (i,o) in a similar manner to a utility depart-
ment. Spread the amount(s) over lines 01 thru 20 as ap-
propriate, Include these amounts in columns (c) and (d)
totals.
2. Report amounts in account 414, Other Utility Operating
Income, in the same manner as accounts 412 and413 above.
3. Report data for lines 7,, and 10 for Natural Gas com-
panies using accounts 404,, 404., 404.3, 407.1, and
407,
4. Use page 122 for important notes regarding the state-
ment of income or any account thereof.
Line
No.
Account
(a)
FERC FORM NO.2 (REVISED 12-96)
(Ref.
Page
No.
(b)
300-301
320-325
320-325
336-338
336-338
336-338
262-263
262-263
262-263
234,272-277
234 272-277
266
Page 114
5. Give concise explanations concerning unsettled rate
proceedings where a contingency exists such that refunds
of a material amount may need to be made to the utility'
customers or which may result in a material refund to the
utility with respect to power or gas purchases. State for each
year affected the gross revenues or costs to which the con-
tingency relates and the tax effe
tion of the major factors which affect the rights of the utility
to retain such revenues or recover amounts paid with respect
to power and gas purchases,
6. Give concise explanations concerning significant
amounts of any refunds made or received during the year
TOTAL
Current Year Previous Year
(c)
$830,746 352 $724,016,704
Name of Respondent This R~ort Is:
(1) 129 An Original
Date of Report
(Mo, Da, Yr)
State of Washin ton
Year of Report
Avista Corp (2) D A Resubmission Apr. 18, 2007 Dec. 31, 2006
STATEMENT OF INCOME FOR THE YEAR
resulting from settlement of any rate proceeding affecting
revenues received or costs incurred for power or gas pur-
chases, and a summary of the adjustments made to balance
sheet, income, and expense accounts.
7. If any notes appearing in the report to stockholders are
applicable to this Statement of Income, such notes may be at-
tached at page 122.
8. Enter on page 122 a consise explanation of only those
changes in accounting methods made during the year which
had an effect on net income, including the basis of allocations
and apportionments from those used in the preceding year.
Also give the approximate dollar effect of such changes.
9. Explain in a foonote if the previous year s figures are
different from that reported in prior reports.
10. If the columns are insufficient for reporting additional
utility departments, supply the appropriate account titles, lines
1 to 19, and report the information in the blank space on page
122 or in a supplemental statement.
ELECTRIC UTILITY
Current Year Previous Year
GAS UTILITYCurrent Year Previous Year
OTHER UTILITY
Current Year Previous Year Line
No.
$564,491,589 $509,490 290 $266,254 763 $214 526,414
FERC FORM NO.2 (REVISED 12-96)Page 115
Avista Corp.
State of Washin ton
This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
) A Resubmission April 18, 2007 Dec. 31 , 2006
Name of Respondent
GAS PLANT IN SERVICE ACCOUNTS 101, 102, 103, AND 106
1. Report below the original cost of gas plant in service according to estimated basis if necessary, and include the entries in column (c).the prescribed accounts. Also to be included in column (c) are entries for reversals of tentative
2. In addition to Account 101, Gas Plant in Service (Classified), this distributions of prior year reported in column (b). Likewise, if the
page and the next include Account 102 Gas Plant Purchased or respondent has a significant amount of plant retirements which have
Sold Account 103 Experimental Gas Plant Unclassified, and not been classified to primary accounts at the end of the year, include
Account 106 Completed Construction Not Classified-Gas. in column (d) a tentative distribution of such retirements, on an
3. Include in column (c) and (d), as appropriate, corrections of estimated basis, with appropriate contra entry to the account for
additions and retirements for the current or preceding year. accumulated depreciation provision. Include also in column (d)
4. Enclose in parenthesis credit adjustments of plant accounts to reversals of tentative distributions of prior year's unclassifiedindicate the negative effect of such accounts. retirements. Attach supplemental statement showing the account
5. Classify Account 106 according to prescribed accounts, on an distributions of these tentative classifications in columns (c) and (d).
Account
INTANGIBLE PLANT
Balance at
Beginning of Year Additions
301 Or anization
302 Franchises and Consents
303 Miscellaneous Intan ible Plant
TOTAL Intan ible Plant Enter Total of lines 2 thru 4
PRODUCTION PLANT
TOTAL Manuafactured Gas Production Plant Enter Total of lines 8 thru 24
PRODUCTS EXTRACTION PLANT
FERC FORM NO.2 (ED. 12-96)Page 204
Name of Respondent This report is:
r Xl An Original
Date of Report
(Mo, Da, Yr)
State of Washin ton
Year Ending
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 , 2006
GAS PLANT IN SERVICE ACCOUNTS 101 102 103, AND 106 Continued
including the reversals of the prior years tentative account and show in column (f) only the offset to the debits or credits to
distributions of these amounts. Careful observance of the primary account classifications.
above instructions and the texts of Account 101 and 106 will 7. For Account 399, state the nature and use of plant included in this
avoid serious omissions of respondent's reported amount for account and if substantial in amount submit a suplementaryplant actually in service at end of year. statement showing subaccount classification of such plant
6. Show in column (f) reclassifications or transfers within utility conforming to the requirements of these pages.
plant accounts. include also in column (f) the additions or 8. For each amount comprising the reported balance and changes in
reductions of primary account classifications arising from Account 102, state the property purchased or sold, name of vendor
distribution of amounts initially recorded in Account 102. In or purchaser, and date of transaction. If proposed journal entries
showing the clearance of Account 102, include in column (e) have been filed with the Commission as required by the Uniform
the amounts with respect to accumulated provision for System of Accounts, give date of such filing.
depreciation, acquisition adjustments, etc.
Retirements Adjustments Transfers Balance at End of Year Line
No.
Page 205FERC FORM NO. :2 (ED. 12-96)
tate 0 Washlnaton
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 2006
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
346 Gas MeasurinQ and ReQulatinQ EQuioment
347 Other Equipment
TOTAL Products Extraction PlantlEnterTotal of lines 28 thru 35)
TOTAL Natural Gas Production Plant (Enter Total of lines 26 and 36)
Manufactured Gas Production Plant (Submit Supplementary Statement)
TOTAL Production Plant (Enter Total of lines 37 and 38)
NATURAL GAS STORAGE AND PROCESSING PLANT
Underaround Storace Plant
350.1 Land 412 611
350.2 Richts-of-Wav 874 35,938
351 Structures and Improvements 063 700 061
352 Wells 779 157 259
352.1 Storace Leaseholds and RiQhts 254,354
352.2 Reservoirs 203,330
352.3 Non-recoverable Natural Gas 971 926
353 Lines 823,423
354 Compressor Station Equipment 016 984 (15 320)
355 Measurina and Reaulatinc Equipment 171,919
356 Purification Equipment 407 251
357 Other Equipment 675,980 931
TOTAL Underaround StoraQe Plant (Enter Total of lines 42 thru 53)804 509 121 868
Other Storace Plant
360 Land and Land Riahts
361 Structures and Improvements
362 Gas Holders
363 Purification Eauipment
363.1 Liauefaction Eauipment
363.2 Vaporizina Equipment
363.3 Compressor Equipment
363.4 Measurina and Reaulatina Equipment
363.5 Other Equipment
TOTAL Other Storace Plant (Enter Total of lines 56 thru 64)
Base Load Liauefied Natural Gas Terminalina and Processina Plant
364.1 Land and Land Rights
364.2 Structures and Improvements
364.3 LNG Processina Terminal Equipment
364.4 LNG Transporation Eauipment
364.5 Measurina and ReaulatinQ Equipment
364.6 Compressor Station Eauipment
364.7 Communications Equipment
364.8 Other Equipment
TOTAL Base Load Liq Nat'l Gas, Terminal and Processing Plant (lines 67-74)
TOTAL Nat'l Gas Storace and Processinc Plant (Total of lines 54, 65 and 75)18,804 509 121 868
TRANSMISSION PLANT
365.1 Land and Land Richts
365.2 Rights-of-Wav
366 Structures and Improvements
FERC FORM NO.2 (ED. 12-96)Page 206
tate 0 as InQton
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 , 2006
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)(f)(Q)No.
412 611
812
075,761
858,416
254,354
203,330
971,926
823,423
001 664
171 919
407 251
685,911
926,377
18,926,377
fW
FERC FORM NO.2 (ED. 12-96)Page 207
tate 0 as InQton
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Da, Yr)
Avista Corp.J A Resubmission April 18, 2007 Dec. 31, 2006
GAS PLANT IN SERVICE (ACCOUNTS 101 , 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
367 Mains
368 Compressor Station Equipment
369 Measuring and Regulating Equipment
370 Communications Equipment
371 Other Equipment
TOTAL Transmission Plant (Enter Totals of lines 78 thru 85)
DISTRIBUTION PlANT
374 Land and Land Rights 300
375 Structures and Improvements 386,221 358
376 Mains 105,770 169 003 613
377 Compressor Station Equipment
378 Measuring and Regulating Equipment-General 331 863 117 745
379 Measuring and Regulating Equipment-City Gate 720,941 604
380 Services 271,376 128,441
381 Meters 26,638 212 060 356
382 Meter Installations
383 House Regulators
384 House Regulator Installations
385 Industrial Measuring and Regulating Station Equipment 766,487 553
100 386 Other Property on Customers' Premises
101 386 Other Equipment
102 TOTAL Distribution Plant (Enter Totals of lines 88 thru 101)215,945,569 364,669
103 GENERAL PLANT
.. --,
104 389 Land and Land Rights
105 390 Structures and Improvements 594 709 162 333
106 391 Office Fumiture and Equipment
107 392 Transportation Equipment 830,186 746 031
108 393 Stores Equipment 735 537
109 394 Tools, Shop, and Garage Equipment 776 312 (8,293)
110 395 Laboratory Equipment 180 237
111 396 Power Operated Equipment 399 014 153 169
112 397 Communication Equipment 434 986 151 127
113 398 Miscellaneous Equipment
114 Subtotal (Enter Totals of lines 104 thru 113)260,179 243 903
115 399 Other Tanaible Property
116 TOTAL General Plant (Enter Totals of lines 114 and 115)260,179 243,903
117 TOTAL (Accounts 101 and 106)241,285 191 12,704,956
118 Gas Plant Purchased (See Instruction 8)
119 (Less) Gas Plant Sold (See Instruction 8)
120 Experimental Gas Plant Unclassified
121 TOTAL Gas Plant in Service (Enter Totals of lines 117 thru 120 241 285,191 704 956 I
fW
FERC FORM NO.2 (ED. 12-96)Page 208
tate 0 ashinoton
Name of Respondent This report is:Date of Report Year Ending
( XJ An Original (Mo, Da, Yr)
Avista Corp.J A Resubmisslon April 18, 2007 Dec. 31 2006
GAS PLANT IN SERVICE (ACCOUNTS 101,102,103, AND 106) (Continued)
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)(f)(0)No.
60,272
774 399 805
329,991 501 111 529 291
021 582 2,424 169
275 724 270
035 855 79,363,962
133 320 160 570,408
580 797,460
100
101
532 844 243 225 869 636 102
...."- = ... .. ._-~ ,,..",
103
104
757 042 105
106
070 555 147 107
272 108
992 759,026 109
159 180,078 110
552 183 111
712 574,401 112
113
933 462 149 114
115
933 7,462 149 116
574 777 243 252 507 612 117
,..
118
119
120
574 777 243 252 507 612 121
FERC FORM NO.2 (ED. 12-96)Page 209
This Page Intentionally Left Blank
Name of Respondent This Report Is:Date of Report Year of Report
~ An Original (Mo, Da, Yr)
Avista Corporation D A Resubmission April 18 2007 Dec, 31, 2006
GAS STORED (ACCOUNT 117.1, 117.2, 117.3, 117.4, 164.1, 164., AND 164.
durring the year adjustments were made to the stored gas Inventory State in a footnote the basis of segregation of Inventory between
reported in columns (d), (f), (g), and (h) (such as to correct cumulative current and noncurrent protions. Also state in a footnote the
inaccuracies of gas measurements), explain in a footnote the reason for method used to report storage (I,e. fixed asset method or
the adjustments, the Dth and dollar amount of adjustment, and account inventory method).
charged or credited.
Report in column (e) all encroachments during the year upon the volumes
designated as base gas, column (b), and system balancing gas, column
( c ), and gas property recordable in the plant accounts.
(Account (Account Noncurrent (Account Current LNG LNG
UnE Description 117.117.(Account 117.117.(Account 164,(Account 164.(Account 164.Total
No.(a)(b)(c)(d)(e)(I)
(g)
(h)(i)
Balance at Beginning of Year 572 455 336,884 909,339
Gas Delivered to Storage 884 747 884,747
Gas Withdrawn from Storage 379 673 379 673
Other Debits and Credits 337 337
Balance at End of Year 077,529 338,221 415750
Dth 395 020 112 457 507477
Amount Per Dekatherm $5.7903 $3.0076 $5.5827
State basis of segregation of inventory between current and noncurrent portions:
Current portion is gas expected to be sold within a 24 month period, All other gas is considered non-current.
State of Washington
FERC FORM NO.(REV 04-04)Page 220
Name of Respondent This R~ort Is:(1) ~ An Original
Date of Report
(Mo Da, Yr)
Avista Corporation (2) D A Resubmission April 18, 2007
State of Washin ton
Year of Report
Dec. 31,2006
GAS OPERATING REVENUES (Account 400)
1. Report below natural gas operating revenues for each for each group of meters added. The average number of
prescribed account, and manufactured gas revenues in tota customers means the average of twelve figures at the close
2. Natural gas means either natural gas unmixed or any of each month.
mixture of natural and manufactured gas. 4. Report quantities of (latural gas sold in Mcf (14.73 psia
3. Report number of customers, columns (f) and (g), on at 60 degrees F). If billings are on a therm basis, give the Btu con-
the basis of meter, in addition to the number of flat rate ac- tents of the gas sold and the sales converted to Mcf.counts; except that where separate meter readings a 5. If increases or decreases from previous year (col-added for billing purposes, one customer should be countel umns (c), (e) and (g), are not derived from previously
Line
No.
OPERATING REVENUES
Amount for
Amount for Year Previous Year
Title of Account
973,137 339,411
143,795 995,813
420,604 364,959
208 962,472 180 189,509
50,986 936 28,031 362
259,949 408 208,220,871
259,949,408 208,220 871
11,127
085,653
208,575
305,355
266,254 763
266,254 763
204 398,073
143 795
50,986 936
420 604
259,949,408
FERC FORM NO.2 (ED. 12-86)Page 300
73,980
521 ,509
710 054
305,543
214 526,414
Name of Respondent This R~ort Is:(1) ~ An Original
Date of Report
(Mo, Da, Yr)
State of Washin ton
Year of Report
Avista Corporation (2)A Resubmission April 18,2007 Dec. 31, 2006
GAS OPERATING REVENUES (Account 400) (Continued)
reported figures, explain any inconsistencies in a foot-
note.
6. Commercial and Industrial Sales, Account 481 , may be
classified according to the basis of classification (Small or
Commercial, and Large or Industrial) regularly used by the
respondent if such basis of classification is not generally
greater than 200 000 Mcf per year or approximately 800 Mcf
per day of normal requirements. (See Account 481 of the
Uniform System of Accounts. Explain basis of classification
in a footnote.
7. See page 108, Important Changes During Year
for important new territory added and important rate increases
or decreases.
THERMS OF NATURAL GAS SOLD
Quantity forQuantity for Year Previous Year
AVG. NO. OF NAT. GAS CUSTRS. PER MO.
Number for Line
Number for Year Previous Year No.
382 804
168,203,346 2
88,020 723
256,224 069
405,848
170 065,649
513,928
205 579,577
138,644
138,644
135,108
135,112
NOTES
(1) Includes $295 780 unbilled revenues.
(2) Includes (310,491) therms relating to unbilled revenues.
FERC FORM NO.2 (ED. 12-86)Page 301
State of Washington
Name of Respondent This R~ort Is:Date of Report Year of Report
(1) X An Original (Mo. Da, Yr)
A vista Corp.(2)A Resubmission April 18, 2007 December 31 , 2006
GAS OPERATION AND MAINTENANCE EXPENSES
If the amount for previous year is not derived from previously reported figures, explain in footnotes.
Amount for Amount for
Line Amount Current Year Previous Year
No.(a)
1. PRODUCTION EXPENSES
A. Manufactured Gas Production
Manufactured Gas Production (Submit Supplemental Statement)
B. Natural Gas Production
B 1. Natural Gas Production and Gathering
Operation
750 Ooeration Suoervision and Engineering
751 Production Maps and Records
752 Gas Wells Expenses
753 Field Lines Expenses
754 Field Compressor Station Expenses
755 Field Compressor Station Fuel and Power
756 Field Measuring and Regulating Station Expenses
757 Purification Expenses
758 Gas Well Royalties
759 Other Expenses
760 Rents
TOTAL Operation (Enter Total of lines 7 thru 17)
Maintenance
761 Maintenance Supervision and Engineering
762 Maintenance of Structures and Improvements
763 Maintenance of Producing Gas Wells
764 Maintenance of Field Lines
765 Maintenance of Field Compressor Station Eauipment
766 Maintenance of Field Meas. and Reg. Sta, Eauipment
767 Maintenance of Purification Equipment
768 Maintenance of Drilling and Cleaning Eauipment
769 Maintenance of Other Equipment
TOTAL Maintenance (Enter Total of lines 20 thru 28)
TOTAL Natural Gas Production and Gathering (Total of lines 18 and 29)
B2. Products Extraction
Operation
770 Operation Supervision and Engineering
771 Operation Labor
772 Gas Shrinkage
773 Fuel
774 Power
775 Materials
776 Operation Supplies and Expenses
777 Gas Processed bv Others
778 Royalties on Products Extracted
779 Marketing Expenses
780 Products Purchased for Resale
781 Variation in Products Inventory
(Less) 782 Extracted Products Used by the Utility-Credit
783 Rents
TOTAL Operation (Enter Total of Lines 33 thru 46)
FERC FORM NO.2 (ED 12-88)Page 320
State of Washington
Name of Respondent This R~ort Is:Date of Report Year of Report(I) X An Original (Mo. Da, fr)
A vista Corp.(2)A Resubmission April 18, 2007 December 31 2006
GAS OPERATION AND MAINTENANCE EXPENSES
Line Amount Current Year Previous Year
No,(a)(b) (c)
B2, Products Extraction (Continued)
Maintenance
784 Maintenance Supervision and EnJ1;ineerinJ1;
785 Maintenance of Structures and Improvements
786 Maintenance of Extraction and Refininl! Eouipment
787 Maintenance of Pipe Lines
788 Maintenance of Extracted Products StoraJ1;e Equipment
789 Maintenance of Compressor EQuioment
790 Maintenance of Gas MeasurinJ1; and ReI!. Equipment
791 Maintenance of Other Equipment
TOTAL Maintenance (Enter Total of lines 49 thru 56)
TOTAL Products Extraction (Enter Total of lines 47 and 57)
C. Exploration and Development
Operation
795 Delav Rentals
796 Nonoroductive Well Drillinl!
797 Abandoned Leases
798 Other Exploration
TOTAL Exploration and Development (Enter Total of lines 61 thru 64)
D. Other Gas Supplv Expenses
Operation
800 Natural Gas Well Head Purchases
800.1 Natural Gas Well Head Purchases, 1ntracompanv Transfers
801 Natural Gas Field Line Purchases
802 Natural Gas Gasoline Plant Outlet Pruchases
803 Natural Gas Transmission Line Purchases
804 Natural Gas Citv Gate Purchases 173 074 085 175 191 246
804,1 Liquefied Natural Gas Purchases
805 Other Gas Purchases 070 886
(Less) 805.1 Purchased Gas Cost Adjustments '~27A2~~
TOTAL Purchased Gas CEnter Total of lines 67 to 76)186 948,918 I
806 ExchanJ1;e Gas
Purchased Gas Expenses
807.1 Well Expenses-Purchased Gas
807.2 Operation of Purchased Gas Measurinl! Stations
807.3 Maintenance of Purchased Gas MeasurinJ1; Stations
807.4 Purchased Gas Calculations Expenses
807.5 Other Purchased Gas Expenses
TOTAL Purchased Gas Expenses (Enter Total of lines 80 thru 84)
808.1 Gas Withdrawn from Storal!e-Debit 353,178 408 307
87 (Less) 808.2 Gas Delivered to StoraJ1;e-Credit 955 129 880 761
809.1 Withdrawals of Liquefied Natural Gas for Processing-Debit
89 (Less) 809.2 Deliveries of Natural Gas for Processinl!-Credit
90 Gas Used in Utilitv Operations-Credit
810 Gas Used for Compressor Station Fuel-Credit
811 Gas Used for Products Extraction-Credit
812 Gas used for Other Utilitv Operations-Credit
TOTAL Gas Used in Utilitv Operations-Credit (Total of lines 91 thru 93)
813 Other Gas Supply Expenses 652 979 627 144
TOTAL Other Gas Supplv Exo (Total of lines 77 78,86 thru 89 95)187 999 945 155 825 842
TOTAL Production Expenses (Enter Total of lines 3 , and 96)187 999 945 155 825 842
FERC FORM NO.2 (ED 12-88)Page 321
State of Washington
Name of Respondent This R~ort Is:Date of Report Year of Report
(1) ,An Original (Mo. Da, fr)
A vista Corp.(2)A Resubmission April 18, 2007 December 31, 2006
GAS OPERATION AND MAINTENANCE EXPENSES
Amount for Amount for
Line Amount CUITent Year Previous Year
No,(a)(b)(c)
2, NATURAL GAS STORAGE, TERMINALING AND
PROCESSING EXPENSES
A, Underground Storage ExDenses
100 Operation
101 814 Operation Supervision and Engineering 69,408 274
102 815 Maos and Records
103 816 Wells Expenses
104 817 Lines Expense
105 818 Compressor Station Expenses
106 819 Compressor Station Fuel and Power
107 820 Measuring and Regulating Station Expenses
108 821 Purification ExDenses
109 822 ExDloration and DeveloDment
110 823 Gas Losses
111 824 Other ExDenses 183,172 197 323
112 825 Storage Well Rovalties
113 826 Rents
114 TOTALODeration (Enter Total of lines 101 thru 113)252 579 229 597
115 Maintenance
116 830 Maintenance Supervision and Engineering
117 831 Maintenance of Structures and ImDrovements
118 832 Maintenance of Reservoirs and Wells
119 833 Maintenance of Lines
120 834 Maintenance of Compressor Station EauiDment
121 835 Maintenance of Measuring and Regulating Station Equipment
122 836 Maintenance of Purification EQuipment
123 837 Maintenance of Other EQuiDment 239 324 219 881
124 TOTAL Maintenance (Enter Total of lines 116 thru 123)239 324 219 881
125 TOTAL Underground Storage ExDenses (Total of lines 114 and 124)491 904 449 479
126 B. Other Storage ExDenses
127 Operation
128 840 Operation SuDervision and Engineering
129 841 Operation Labor and Expenses
130 842 Rents
131 842.1 Fuel
132 842.2 Power
133 842.3 Gas Losses
134 TOTAL Operation (Enter Total of lines 128 thru 133)
135 Maintenance
136 843.1 Maintenance Supervision and Engineering
137 843.2 Maintenance of Structures and ImDrovements
138 843.3 Maintenance of Gas Holders
139 843.4 Maintenance of Purification EauiDment
140 843.5 Maintenance of Liquefaction EQuiDment
141 843.6 Maintenance of Vaporizinl!: Equipment
142 843.7 Maintenance of Compressor EauiDment
143 843.8 Maintenance of Measuring and Regulating Equipment
144 843.9 Maintenance of Other EauiDment
145 TOTAL Maintenance (Enter Total of lines 136 thru 144)
146 TOTAL Other Storage Expenses (Enter Total of lines 134 and 145)
FERC FORM NO, 2 (ED 12-88)Page 322
State of Washington
Name of Respondent This R
rmort Is:
Date of Report Year of Report
(1) X An Original (Mo Da, Yr)
Avista Corp.(2)A Resubmission April 18 2007 December 31 , 2006
GAS OPERA nON AND MAINTENANCE EXPENSES
Line Amount Current Year Previous Year
No.(a)(b)
147 C. Liauefied Natural Gas Tenninaling and Processing Expenses
148 Operation
149 844.1 Operation Suoervision and Engineering
150 844.2 LNG Processing Tenninal Labor and Expenses
151 844.3 Liauefaction Processing Labor and Expenses
152 844.4 Liauefaction Transoortation Labor and Expenses
153 844.5 Measuring and Regulating Labor and Expenses
154 844.6 Compressor Station Labor and Expenses
155 844.7 Communication System Exoenses
156 844,8 Svstem Control and Load Dispatching
157 845.1 Fuel
158 845.2 Power
159 845.3 Rents
160 845.4 Demurrage Charges
161 (Less) 845.5 Wharfage Receipts-Credit
162 845.6 Processing Liauefied or Vaporized Gas by Others
163 846,1 Gas Losses
164 846.2 Other Expenses
165 TOTAL Operation (Enter Total of lines 149 thru 164)
166 Maintenance
167 847.1 Maintenance Supervision and Engineering
168 847.2 Maintenance of Structures and Improvements
169 847.3 Maintenance of LNG Processing Tenninal Eauipment
170 847.4 Maintenance of LNG Transportation Eauipment
171 847.5 Maintenance of Measuring and Regulating Equipment
172 847.6 Miantenance of Compressor Station Eauipment
173 847.7 Maintenance of Communication Equipment
174 847.8 Maintenance of Other Eauioment
175 TOTAL Maintenance (Enter Total of lines 167 thru 174)
176 TOTAL Liquefied Nat Gas Tenninaling and Processing Exp (Lines 165 & 175)
177 TOTAL Natural Gas storage (Enter Total of lines 125, 146, and 176)491 904 449 478.
178 3. TRANSMISSION EXPENSES
179 Operation
180 850 Ooeration Supervision and Engineering
181 851 Svstem Control and Load Dispatching
182 852 Communication System Exoenses
183 853 Compressor Station Labor and Expenses
184 854 Gas for Compressor Station Fuel
185 855 Other Fuel and Power for Compressor Stations
186 856 Mains Expenses
187 857 Measuring and Regulating Station Expenses
188 858 Transmission and Compression of Gas bv Others
189 859 Other Expenses
190 860 Rents
191 TOTAL Operation (Enter Total of lines 180 thm 190)
FERC FORM NO, 2 (ED 12-88)Page 323
State of Washington
Name of Respondent This R
rRjort Is:
Date of Report Year of Report
(I) X An Original (Mo, Da, fr)
A vista Corp.(2)A Resubmission April 18,2007 December 31 2006
GAS OPERATION AND MAINTENANCE EXPENSES
Line Amount Current Year Previous Year
No.(a)(b) (c)
3. 1RANSMISSION EXPENSES (Continued)
192 Maintenance
193 861 Maintenance Supervision and EnJ1;ineerinJ1;
194 862 Maintenance of Structures and Improvements
195 863 Maintenance of Mains
196 864 Maintenance of Compressor Station EQuipment
197 865 Maintenance of Measurinl! and Reg. Station EQuipment
198 866 Maintenance of Communication EQuipment
199 867 Maintenance of Other EQuipment
200 TOTAL Maintenance (Enter Total of lines 193 thru 199)
201 TOTAL Transmission Exoenses (Enter Total of lines 191 and 200)
202 4. DIS1RIBUTION EXPENSES
203 Operation
204 870 Operation Supervision and EnJ1;ineerinJ1;281 883 353 098
205 871 Distribution Load Dispatching
206 872 Compressor Station Labor and Expenses
207 873 Compressor Station Fuel and Power
208 874 Mains and Services Expenses 1,412 731 198,467
209 875 Measurinl! and Rel!Ulating Station Expenses-General 298 327
210 876 MeasurinJ1; and Rel!Ulatinl! Station Expenses-Industrial 584 259
211 877 Measuring and ReJ1;ulating Station Expenses-Citv Gate Check Station 064 99,563
212 878 Meter and House Rel!Ulator Expenses 424 929 313 870
213 879 Customer Installations Expenses 645,396 689,942
214 880 Other Expenses 989 892 034 944
215 881 Rents 10,676 863
216 TOTAL Operation (Enter Total of lines 204 thru 215)912 454
217 Maintenance '!:!ii~:m!ililmmii!i!i!ii!!!j!:!'~~mi!i!m!ii!'!!!!'i!mj;ml~ilmi!I!!i!:I!1~!!!!!m
218 885 Maintenance Supervision and Enl!ineering 101 779 63,746.
219 886 Maintenance of Structures and Improvements
220 887 Maintenance of Mains 261 429 114 543
221 888 Maintenance of Compressor Station EQuipment
222 889 Maintenance of Meas. and Reg. Sta. EQuip.General 97,477 118 365
223 890 Maintenance of Meas. and ReI!. Sta. EQuip.Industrial 372 48,236
224 891 Maintenance of Meas. and Reg. Sta. EQuip.Citv Gate Check Station 808 29,471
225 892 Maintenance of Services 441 785 506 047
226 893 Maintenance of Meters and House Rel!Ulators 473,086 430,406
227 894 Maintenance of Other EQuipment 622 196.
228 TOTAL Maintenance (Enter Total of lines 218 thru 227)446 358 325 011
229 TOTAL Distribution Expenses (Enter Total of lines 216 and 228)358,812 104,343
230 5. CUSTOMER ACCOUNTS EXPENSES
231 Operation
232 901 Supervision 207 194 271 992
233 902 Meter Reading Expenses 004 946 995 842
234 903 Customer Records and Collection Expenses 652 228 526 692
235 904 Uncollectible Accounts 622 645 589 713
236 905 Miscellaneous Customer Accounts Expenses 73,749 209,156
237 TOTAL Customer Accounts Expenses (Enter Total of lines 232 thru 236)560 764 593 395
FERC FORM NO.2 (ED 12-88)Page 324
Name of Respondent This R~on Is:
(1) 129 An Original
A vista Corp.A Resubmission
GAS OPERATION AND MAINTENANCE EXPENSES
(2)
If the amount for ear is not derived from
Amount
6, CUSTOMER SERVICE AND INFORMATIONAL EXPENSES
Operations Expense
Maintenance Expense
State of Washington
Date of Repon
(Mo, Da, Yr)
Year of Report
April 18 2007 December 31, 2006
Amount for
Previous Year
(e)
607 459 536 818
207 829 933
514 852
211 344 784
176 342 720
311 032
179,653 752
NUMBER OF GAS DEPARTMENT EMPLOYEES
1. The data on number of employees should be reponed construction employees in a foonote,
for the payroll period ending nearest to October 31, or 3. The number of employees assignable to the gas
any payroll period ending 60 days before or after Octo-depanment from joint function of combination utilities
ber 31.may be detennined by estimate, on the basis of employee
2, If the respondent's payroll for the reporting period equivalents.Show the estimated number of equivalent
includes any special constrction personnel, include such employees attributed to the gas depanment from joint
emnlovees on line 3, and show the number of such special functions,
Pavroll Period Ended (Date)December 31, 2006
Total Re!!Ular Full-Time Emnloyees 100 180
Total Part-Time and Temnorary Emplovees allocation of General Employees
Total Emnlovees 105 192
FERC FORM NO.2 (ED 12-88)Page 325
State of Washington
Name of Respondent This
wort
Is:Date of Report Year of Report(I) X An Original (Mo, Da, Yr)
A vista Corp.(2)A Resubmission April 18 2007 Dec. 31, 2006
TRANSMISSION MAINS
Show particulars Called for Concerning Transmission Mains
Total Length in Taken up or Total Length
Line Kind of Material Diameter of Use Beginning of Laid During Abandoned During in Use End
No.Pipe, Inches Year, Feet Year, Feet Year, Feet of Year, Feet
(a)(b)(c)(d)(e)
(Moved to Distribution)
Steel 4" or Less
Steel 4" to 10"390,720 390,720
TOTALS
* Show separately and Identify Jmes held under a tItle other than full ownership.
FERC FORM NO.2 (ED 12-87)Page 514
Name of Respondent
Avista Corp.
ine Kind of Material
No.
(a)
Steel VVrapped
Steel VVrapped
Steel VVrapped
Steel VVrapped
Steel VVrapped
Plastic
Plastic
Plastic
Plastic
Plastic
TOTALS
FERC FORM NO.
This Report Is:
(1) ,An Original
(2) D A Resubmission
DISTRIBUTION MAINS
Date of Report
(Mo, Da, Yr)
April 18, 2007
Diameter of
Pipe, Inches
(b)
Less than 2"
2" to 4"
4" to 8"
8" to 12"
Over 12"
Show particulars Called for Concerning Distribution MainsTotal Length in I Taken up
Use Beginning of Laid During Abandoned Durin
Year, Feet Year, Feet Year, Feet(c) (d) (e)
4,408,800 235,520
272,480 52 800
224 960 475,200158,400 21,120
800
Less than 2"
2" to 4"
4" to 8"
8" to 12"
Over 12"
309,600
024 320
216,480
667 840
Page 514-
119,360
390,720
105,600
3,400 320
State of VVashington
Year of Report
Dec. 31 2006
Total Length
in Use End
of Year, Feet
(f)
644,320
325,280
700,160
179,520
800
428,960
1,415,040
322 080
18,068,160
State of Washington
Name of Respondent This Report Is:Date of Report Year of Report
(1)(29 An Original (Mo, Da, Yr)
Avista Corp.(2)0 A Resubmission April 18,2007 Dec. 31 , 2006
SERVICE PIPES GAS
Show the particulars called for concernin~ the line service pipe in possession of the respondent at the close of
Number at Number umber Remove Number Average
Line Type Diameter Beginning Added or Abandoned at Close Length
No.in Inches of Year During Year During Year of Year in Feet
(a)(b)(c)(d)(e)(f)
(g)
Steel Wrapped l' or Less 43,827 292 48,119 Not
Steel Wrapped 1" thru 2"081 546 627 Available
Steel Wrapped 2" thru 4"168
Steel Wrapped 4" thru 8"
Steel Wrapped Over 8"
Plastic l' or Less 237 45,317 126 554
Plastic 1" thru 2"700 812 512
Plastic 2" thru 4"131
Plastic 4" thru 8"
Plastic Over 8"
TOTALS 127 006 135 179,141
In 199640,000 1" services were dropped from the report.
FERC FORM NO.Page 514-
ta e 0 as mgton
Name of Respondent This R
tRJort Is:
Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
Avista Corp.(2)A Resubmission April 18 2007 Dec. 31,2006
CUSTOMER'S METERS
Owned
Line Size Type Make Capacity Beginning Added Retired Owned
No.of Year During Year During Year End of Year
(a)(b)(c)(d)(e)(1)
(g)
(h)
Detailed information not availabJe.
TOTAL 143,519 370 394 147,495
S t fW
FERC FORM NO.Page 514-
State of Washington
Name of Respondent This Report Is:Date of Report Year of Report
129 An Original (Mo, Da, Yr)
Avista Corporation A Resubmission April 18, 2007 Dec. 31 , 2006
GAS ACCOUNT - NATURAL GAS
The purpose of this schedule is to account for the quantity or intrastate facilities and which the reporting pipeline received
of natural gas received and delivered by the respondent.through gathering facilities or intrastate facilities, but not through any
Natural gas means either natural gas unmixed or any of the interstate portion of the reporting pipeline, and (3) the gathering
mixture of natural and manufactured gas.line quantities that were not destined for interstate market or that were
Enter in column ( c ) the Dth as reported in the not transported through any interstate portion of the reporting
schedules indicated for the items of receipts and pipeline,
deliveries,7 Also indicate in a footnote (1) the system supply quantities of gas
Indicated in a footnote the quantities of bundled sales that are stored by the reporting pipeline, during the reporting year and
and transportation gas and specify the line on which also reported as sales, transportation, and compression volumes by
such quantities are listed,the reporting pipeline during the same reporting year, (2) the system
If the respondent operates two or more systems which supply quantities of gas that are stored by the reporting pipeline during
are not interconnected, submit separate pages for this the reporting year which the reporting pipeline intends 10 sell or
purpose, Use copies of pages 520.transport in a future reporting year, and (3) contract storage
Also indicate by footnote the quantities of gas not subject quantities.
to Commission regulation which did not incur FERC 8 Also indicate the volumes of pipeline production field sales that are
regulatory costs by showing (1) the local distribution included in both the company s total sales figure and the company
volumes another jurisdictional pipeline delivered to the total transportation figure. Add additional rows as necessary to
local distribution company portion of the reporting report all data, numbered 14., 14., etc.
pipeline (2) the quantities the reporting pipeline
transported or sold through its local distribution facilities
01 NAME OF SYSTEM
Line Ref.
No.Item Page No.Amount of Dth (1)
(a)(b)(a)
GAS RECEIVED
Gas Purchases (Accounts 800-805)23,537 520
Gas of Others Received for Gathering (Account 489.303
Gas of Others Received for Transmission (489.305
Gas of Others Received for Distribution (Account 489.301 646 429
Gas of Others Received for Contract Storage (Account 489.4)307
Exchanged Gas Received from Others (Account 806)328
Gas Received as Imbalances (Account 806)328
Receipts pf Respondent's Gas Transported by Others (Account 858)332
Other Gas Withdrawn from Storage (Explain)
Gas Received from Shippers as compressor Station Fuel
Gas Received from Shippers as Lost and Unaccounted for
Other Receipts (Specify):
Total Receipts (Total lines 3 thru 14.183 949
GAS DELIVERED
Gas Sales IAccounts 480 - 484)820,335
Deliveries of Gas Gathered for Others (Account 489.303
Deliveries of Gas Transported for Others (Account 489.305
Deliveries of Gas Distributed for Others (Account 489.301 646,429
Deliveries of Contract Storace Gas (Account 489.4)307
Exchange Gas Delivered to Others (Account 806)328
Gas Delivered as Imbalances (Account 806)328
Deliveries of Gas to Others for Transportation (Account 858)332
Other Gas Delivered to Storage (Explain)
Gas Used for Compressor Station Fuel 509
Other Deliveries (Specify): Sales for Resale 164 882
Total Deliveries (Total lines 17 thru 27.631 646GA~ INA(~(~f1UNTED FOR
Production System Losses
Gatherina Svstem Losses
Transmission System Losses
Distribution Svstem Losses 552 303
Storace Svstem Losses
Other Losses (SpeciN)
Total Unaccounted For (Total lines 30 thru 35)552 303
Total Deliveries & Unaccounted For ITotallines 28 thru 36)183,949
FERC FORM NO.2 (REV 04-04)Page 520
Data Request for Statistics Report - 2006
RESIDENTIAL SALES
COMMERCIAL SALES
INDUSTRIAL SALES
OTHER SALES
SALES FOR RESALE
TRANSPORTATION OF GAS OF OTHERS
OTHER OPERATING REVENUES
257,752,600 229,736,621 129,424,936 112,489,326
146,581 144 126 647 601 973,137 63,339,411
11,676,035 11,867 199 143,795 995 813
491 509 424,720 420,604 364,959
94,971 782 63,085 081 50,986,936 28,031 362
498,720 601,297 085,653 521,509
333 830 853,678 219,702 784 034
~EmmmiJIBImmJ~
EEmI!I IIiDImIm
TOTAL GAS SERVICE REVENUES
RESIDENTIAL SALES
COMMERCIAL SALES
INDUSTRIAL SALES
OTHER SALES
SALES FOR RESALE
TRANSPORTATION OF GAS OF OTHERS
192 832 941
120,988,742
039 977
442 701
157,426 570
149 717 330
199,433,556
122 980 835
13,533,925
465 790
961 354
169,024,680
100,085,153
868 710
866,679
382 804
88,020,723
66,464,290
Line No
GAS SERVICE REVENUES
13 THERMS OF GAS SOLD.TRANSPORTED
22 TOTAL THERMS OF GAS SOLD-TRANSPORTED
AVERAGE NUMBER OF GAS CUSTOMERS PER MONTH
RESIDENTIAL SALES
COMMERCIAL SALES
INDUSTRIAL SALES
OTHER SALES
TRANSPORTATION OF GAS OF OTHERS
267 345
746
295
265,294
31,652
306
125,230
238
145
101 323 534
63,953,081
383,186
405 848
35,513,928
526 230
121,859
064
155
GAS Data,xls
This Page Intentionally Left Blank
IDAHO
Name of Respondent This R~rt Is:
(1) (2g An Origffial
Avista Corp (2)
STATEMENT OF INCOME FOR THE YEAR
1. Report amounts for accounts 412 and 413, Revenue
and Expenses from Utility Plant Leased to Others, in another
utility column (i,o) in a similar manner to a utility depart-
ment. Spread the amount(s) over lines 01 thru 20 as ap-
propriate. Include these amounts in columns (c) and (d)
totals.
2. Report amounts in account 414, Other Utility Operating
Income. in the same manner as accounts 412 and413 above.
3. Report data for lines 7 aOO 10 for Natural Gas com-
panies using accounts 404.1, 404.2, 404., 407.1, and
407.
4. Use page 122 for important notes regarding the state-
ment of income or any account thereof.
Line
No.
Account
(a)
FERC FORM NO.2 (REVISED 06-04)
A Resubmission
(Ref.
Page
No.
(b)
300-301
320-325
320-325
336-338
336-338
336-338
262-263
262-263
262-263
234,272-277
234 272-277
266
Page 114
Date of Report
(Mo, Da, Yr)
State of Idaho
Year of Report
Apr. 18,2007 Dec. 31, 2006
5. Give concise explanations concerning unsettled rate
proceedings where a contingency exists such that refunds
of a material amount may need to be made to the utility
customers or which may result in a material refund to the
utility with respect to power or gas purchases. State for each
year affected the gross revenues or costs to which the con-
tingency relates and the tax effects together with an expIa-
tion of the major factors which affect the rights of the utility
to retain such revenues or recover amounts paid with respect
to power and gas purchases.
6. Give concise explanations concerning significant
amounts of any refunds made or received during the year
TOTAL
CWTent Year Previous Year
$285,679,270 $280,597 321
Name of Respondent This R~rt Is:
(1) j2g An Original
Avista Corp (2)A Resubmission Apr. 18,2007 Dec. 31, 2006
Date of Report
(Mo, Da, Yr)
State of Idaho
Year of Report
ST A TEIvlENT OF INCOIvIE FOR THE YEAR
resulting from settlement of any rate proceeding affecting
revenues received or costs incurred for power or gas pur-
chases. and a summary of the adjustments made to balance
sheet, income, and expense accounts.
7. If any notes appearing in the report to stockholders are
applicable to this Statement of Income, such notes may be at-
tached at page 122.
8. Enter on page 122 a consise explanation of only those
changes in accounting methods made during the year which
had an effect on net income, including the basis of allocations
and apportionments from those used in tbe preceding year.
Also give tbe approximate dollar effect of such manges.
9. Explain in a foonote if tbe previous years figures are
different from that reported in prior reports.
10. If the columns are insufficient for reporting additional
utility departments, supply the appropriate account titles, lines
1 to 19, and report the infonnation in the blank space on page
122 or in a supplemental statement
OTHER UTILITYELECTRIC UTILITY
CUlTent Year Previous Year
GAS UTILITY
CUlTent Year Previous Year CUlTent Year Previous Year Line
No.
$199,286,135 $194 621,447 $86,393,135
FERC FORM NO.2 (REVISED 06-04)
$85,975,874
Page 115
Name of Respondent This Report Is:
(l)!29An OriginaJ
(2)DA ResubmissionA vista Corporation
Date of Report
(Mo, Da, Yr)
State of Idaho
Year of Report
April 18 2007 December 31, 2006
SUMMARY OF UTILITY PLANT AND ACCUMULATED PROVISIONS
FOR DEPRECIATION, AMORTIZATION AND DEPLETION
Line
No.
Item
(a)
UTILITY PLANT
In Service
PJant in Service (Classified)
Pro eft Under Ca ital Leases
Plant Purchased or Sold
Com Jeted Construction not Classified
Investment in Kettle Falls
TOTAL (Enter Total of lines 3 thru 7)
Leased to Others
10 HeJd for Future Use
11 Construction Work in Pro ress
12 Ac uisition Ad'ustments13 TOTAL Utili Plant (Enter Total of lines 8 thru 12 )
14 Accum. Prov. for De f., Amort., & De 15 Net Utilit Plant (Enter totaJ of line 13 less 14)
DETAIL OF ACCUMULATED PROVISIONS FOR
16 DEPRECIATION, AMORTIZATION AND DEPLETION
17 In Service:18 De reciation19 Amort. and De 1. of Producin N at. Gas Land and Land Ri hts20 Accumulated De reciation - KettJe Falls21 Amort. of Other Utilit Plant22 TOTAL in Service (Enter TotaJ oflines 18 thru 21)
23 Leased to Others24 De reciation25 Amortization and De letion26 TOTAL Leased to Others (Enter Total of lines 24 and 25)
27 Held for Future Use28 De reciation29 Amortization30 TOTAL Held for Future Use (Ent. Tot. of Jines 28 and 29)31 Abandonment of Leases (NaturaJ Gas)
32 Amort. of Plant Ac uisition Ad'ustment
TOTAL Accumulated Provisions (Should agree with line 14 above)
(Enter Total of lines 22, 26 30, 31, and 32)
FERC FORM NO.2 (ED. 12-89)Page 200
Total Electric
742,055,194
654 635
628 051 134
743,709,829 628 051 134
827,584
752 537,413
752 537,413
329,879
635,381,013
635 381 013
Name of Respondent This R~ort Is:
(1) 129 An Original
Date of Report
State of Idaho
Year of Report
A vista Corporation (2) D A Resubmission April 18,2007 December 31, 2006
SUMMARY OF UTILITY PLANT AND ACCUMULATED PROVISIONS
FOR DEPRECIATION, AMORTIZATION AND DEPLETION (Continued)
Gas Other (Specify)Other (Specify)Other (Specify)Common Line
No.
334 933
137,659 3
251 446 4
389,105
162 772
551 877
551 877
108,866,401
403 189
109,269,590
110 604,523
110,604,523
FERC FORM NO.2 (ED. 12-89)Page 201
Avista Corp.
State of Idaho
This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
) A Resubmisslon April 18, 2007 Dec. 31 2006
Name of Respondent
GAS PLANT IN SERVICE ACCOUNTS 101,102,103, AND 106
1. Report below the original cost of gas plant in service according to estimated basis if necessary, and include the entries in column (c).the prescribed accounts. Also to be included in column (c) are entries for reversals of tentative
2. In addition to Account 101 Gas Plant in Service (Classified). this distributions of prior year reported in column (b). Likewise, if the
page and the next include Account 102 Gas Plant Purchased or respondent has a significant amount of plant retirements which have
Sold; Account 103, Experimental Gas Plant Unclassified, and not been classified to primary accounts at the end of the year, include
Account 106 Completed Construction Not Classified-Gas. in column (d) a tentative distribution of such retirements, on an
3. Include in column (c) and (d), as appropriate, corrections of estimated basis, with appropriate contra entry to the account for
additions and retirements for the current or preceding year. accumulated depreciation provision. Include also in column (d)
4. Enclose in parenthesis credit adjustments of plant accounts to reversals of tentative distributions of prior year's unclassifiedindicate the negative effect of such accounts. retirements. Attach supplemental statement showing the account
5. Classify Account 106 according to prescribed accounts, on an distributions of these tentative classifications in columns (c) and (d).
Account
INTANGIBLE PLANT
Balance at
Beginning of Year Additions
TOTAL Manuafactured Gas Production Plant Enter Total of lines 8thru 24
PRODUCTS EXTRACTION PLANT
FERC FORM NO.2 (ED. 12-96)Page 204
State of Idaho
Name of Respondent This report is:
r X) An Original
Date of Report
(Mo, Da, Yr)
Year Ending
Avista Corp.J A Resubmission April 18, 2007 Dec. 31 2006
GAS PLANT IN SERVICE ACCOUNTS 101 , 102, 103, AND 106 Continued
including the reversals of the prior years tentative account and show in column (f) only the offset to the debits or credits to
distributions of these amounts. Careful observance of the primary account classifications.
above instructions and the texts of Account 101 and 106 will 7. For Account 399, state the nature and use of plant included in this
avoid serious omissions of respondent's reported amount for account and if substantial in amount submit a suplementaryplant actually in service at end of year. statement showing subaccount classification of such plant
6. Show in column (f) reclassifications or transfers within utility conforming to the requirements of these pages.
plant accounts. include also in column (f) the additions or 8. For each amount comprising the reported balance and changes in
reductions of primary account classifications arising from Account 102, state the property purchased or sold, name of vendor
distribution of amounts initially recorded in Account 102. In or purchaser, and date of transaction. If proposed journal entries
showing the clearance of Account 102, include in column (e) have been filed with the Commission as required by the Uniform
the amounts with respect to accumulated provision for System of Accounts, give date of such filing.
depreciation, acquisition adjustments, etc.
Retirements Adjustments Balance at End of Year Line
No.
FERC FORM NO.2 (ED. 12-96)Page 205
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.J A Resubmission April 18, 2007 Dec. 31 , 2006
GAS PLANT IN SERVICE (ACCOUNTS 101 , 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
346 Gas Measurina and Reaulatinc Equipment
347 Other Equipment
TOTAL Products Extraction Plant (Enter Total of lines 28 thru 35)
TOTAL Natural Gas Production Plant (Enter Total of lines 26 and 36)
Manufactured Gas Production PlanttSubmit Supp/ementarv StatementJ
TOTAL Production Plant/Enter Total of lines 37 and 38)
NATURAL GAS STORAGE AND PROCESSING PLANT
Undercround Storace Plant
350.1 Land
350.2 Richts-of-Way
351 Structures and Improvements
352 Wells
352.1 Storace Leaseholds and Richts
352.2 Reservoirs
352.3 Non-recoverable Natural Gas
353 Lines
354 Compressor Station Eauipment
355 Measuring and Reaulatina EQuipment
356 Purification Equipment
357 Other Equipment
TOTAL Undercround Storace Plant/Enter Total of lines 42 thru 53)
Other StoraQe Plant
360 Land and Land Riahts
361 Structures and Improvements
362 Gas Holders
363 Purification Equipment
363.1 liquefaction Eauiament
363.2 Vaporizinc Eauipment
363.3 Compressor Equipment
363.4 Measurinc and Reculatina Eauipment
363.5 Other EQuipment
TOTAL Other Storace Plant (Enter Total of lines 56 thru 64)
Base Load liQuefied Natural Gas Terminalina and Processina Plant
364.1 Land and Land Riahts
364.2 Structures and Improvements
364.3 LNG Processina Terminal Eauipment
364.4 LNG Transporation Eauipment
364.5 Measurina and Reaulatino Equipment
364.6 Compressor Station Eauipment
364.7 Communications Eauipment
364.8 Other Equipment
TOTAL Base Load Liq Nat'l Gas, Terminal and Processing Plant (lines 67-74)
TOTAL Nat'l Gas StoraQe and Processina Plant (Total of lines 54, 65 and 75)
TRANSMISSION PLANT
365.1 Land and Land Riahts
365.2 Riahts-of-Wav
366 Structures and Improvements
State of Idaho
FERC FORM NO.2 (ED. 12-96)Page 206
Name of Respondent This report is:Date of Report Year Ending
( XJ An Original (Mo, Da, Yr)
Avista Corp.J A Resubmission April 18 , 2007 Dec. 31 , 2006
GAS PLANT IN SERVICE (ACCOUNTS 101 , 102, 103, AND 106) (Continued)
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)
(g)
No.
66,
State of Idaho
FERC FORM NO.2 (ED. 12-96)Page 207
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Da, Yr)
Avista Corp.1 A Resubmission April 18, 2007 Dec. 31 , 2006
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b) ,(c)
367 Mains
368 Compressor Station Equipment
369 Measurino and Reoulatino Equipment
370 Communications Equipment
371 Other Equipment
TOTAL Transmission Plant (Enter Totals of lines 78 thru 85)
DISTRIBUTION PLANT
374 Land and Land Rights 29,392
375 Structures and Improvements 125 248 788
376 Mains 542 197 128 268
377 Compressor Station Equipment
378 MeasurinQ and ReQulatinQ Equipment-General 117 708 866
379 Measuring and Regulating EQuipment-City Gate 769,288 570
380 Services 081 863 828 955
381 Meters 496,582 863,957
382 Meter Installations
383 House Reoulators
384 House Reoulator Installations
385 Industrial Measurino and Reculatinc Station Equipment 489 324
100 386 Other Property on Customers' Premises
101 386 Other Equipment
102 TOTAL Distribution Plant (Enter Totals of lines 88 thru 101)99,651 602 864,404
103 GENERAL PLANT
104 389 Land and Land Richts
105 390 Structures and Improvements
391 Office Furniture and Equipment
107 392 Transportation Equipment 726 924 395
108 393 Stores Equipment
109 394 Tools, Shop, and Garaoe Equipment 370 729 22,408
110 395 Laboratory Equipment 782
111 396 Power Operated Equipment 723 979 047
112 397 Communication Equipment 272 468 328
113 398 Miscellaneous Equipment
114 Subtotal (Enter Totals of lines 104 thru 113)152,882 207,177
115 399 Other Tanaible Property
116 TOTAL General Plant (Enter Totals of lines 114 and 115)152 882 207 177
117 TOTAL (Accounts 101 and 106)101 907,846 071 581 I
118 Gas Plant Purchased (See Instruction 8)
119 (Less) Gas Plant Sold (See Instruction 8)
120 Experimental Gas Plant Unclassified
121 TOTAL Gas Plant in Service (Enter Totals of lines 117 thru 120 101 907 846 I 10,071,581 I
State of Idaho
FEAt FOAM NO.2 (ED. 12-96)Page 208
State of Idaho
Name of Respondent This report is:Date of Report Year Ending
( XJ An Original (Mo, Da, Yr)
Avista Corp.J A Resubmission April 18, 2007 Dec. 31,2006
GAS PLANT IN SERVICE (ACCOUNTS 101 , 102, 103, AND 106) (Continued)
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)(f)(0)No.
722 670
131 036
347 086 239,170\55,084 209
154 574
769 858
111 387 39,799,432
360 539
489 324
100
101.102
, -" -
c '103
104
105
106
815,319 107
108
999 389,137 109
58,730 110
727 026 111
3,422 362 374 112
113
7,473 352 587 114
115
473 352 587 116
470,667 239 170)109 269 591 117
118
119
120
470 667 239 170)109 269,591 121
FERC FORM NO.2 (ED. 12-96)Page 209
This Page Intentionally Left Blank
Name of Respondent This Report Is:Date of Report Year of Report
~ An Original (Mo , Yr)
Avista Corporation 0 A Resubmission April 18,2007 Dec. 31, 2006
GAS STORED (ACCOUNT 117., 117.2, 117.3, 117.4, 164.1, 164.2, AND 164.
If durring the year adjustments were made to the stored gas inventory State in a footnote the basis of segregation of inventory between
reported in columns (d), (f), (g), and (h) (such as to correct cumulative current and noncurrent protions, Also state in a footnote the
inaccuracies of gas measurements), explain in a footnote the reason for method used to report storage (I,e, fixed asset method or
the adjustments, the Dth and dollar amount of adjustment, and account inventory method),
charged or credited,
2 Report in column (e) all encroachments during the year upon the volumes
designated as base gas, column (b), and system balancing gas, column
( c ), and gas property recordable in the plant accounts.
(Account (Account Noncurrent (Account Current LNG LNG
ine Description 117.117,(Account 117.117.4)(Account 164.(Account 164.(Account 164,Total
No.(a)(b)(c)(d)(a)(f)
(g)
(h)(i)
Balance at Beginning of Year 320,879 124 221 445,100
Gas Delivered to Storage 909,521 909,521Gas Withdrawn from Storage 973,049 973,049
Other Debits and Credits (1.336)336)
Balance at End of Year 257 351 122 885 380,236
Dth 550,196 40.858 591 054
Amount Per Dekatherm $5.9203 $3.0076 $5.7190
State basis of segregation of inventory between current and noncurrent portions:
Cu~rent portion is gas expected to be sold within a 24 month period. All other gas is considered non-current.
State of Idaho
FERC FORM NO.2 (REV 04-04)Page 220
Name of Respondent This R~ort Is:
(1) l29 An Original
Date of Report
(Mo, Da, Yr)
State of Idaho
Year of Report
Avista Corporation (2) D A Resubmission April18 2007 Dec. 31, 2006
GAS OPERATING REVENUES (Account 400)
1. Report below natural gas operating revenues for each
prescribed account, and manufactured gas revenues in total.
2. Natural gas means either natural gas unmixed or any
mixture of natural and manufactured gas.
3. Report number of customers, columns (f) and (g), on
the basis of meter, in addition to the number of flat rate ac-
counts; except that where separate meter readings are
added for billing purposes, one customer should be counted
Line
No.
Title of Account
FERC FORM NO.2 (ED. 12-86)
for each group of meters added. The average number of
customers means the average of twelve figures at the close
of each month.
4. Report quantities of natural gas sold in Mcf (14.73 psia
at 60 degrees F). If billings are on a therm basis, give the Btu con-
tents of the gas sold and the sales converted to Mcf.
5. If increases or decreases from previous year (col-
umns (c), (e) and (g), are not derived from previously
OPERATING REVENUES
Amount for
Amount for Year Previous Year
28,804 772 303,913
2,474 958 150,723
300 37,010
85,510,059 73,305 901
11,432 755
85,510,059 84,738,656
85,510,059 738,656
673
863,512 254
925 944
891
883,076
86,393 135
86,393,135
304 020
237 218
85,975 874
987 801
2,474 958
300
85,510 059
Page 300
Name of Respondent This ~ort Is:(1) ~ An Original
Date of Report
(Mo, Da, Yr)
State of Idaho
Year of Report
Avista Corporation (2)A Resubmission April 18 2007 Dec. 31 , 2006
GAS OPERATING REVENUES (Account 400) (Continued)
reported figures, explain any inconsistencies in a foot-
note.
6, Commercial and Industrial Sales, Account 481 , may be
classified according to the basis of classification (Small or
Commercial, and Large or Industrial) regularly used by the
respondent if such basis of classification is not generally
greater than 200,000 Mcf per year or approximately 800 Mcf
per day of normal requirements. (See Account 481 of the
Uniform System of Accounts. Explain basis of classification
in a footnote.
7. See page 108, Important Changes During Year
for important new territory added and important rate increases
or decreases.
THERMS OF NATURAL GAS SOLD
Quantity forQuantity for Year Previous Year
AVG. NO. OF NAT. GAS CUSTRS. PER MO.
Number for Line
Number for Year Previous Year No.
879,096
324 647
42,307
70,371 298 2
70,371 298
39,602
69,470,664
14,484 563
83,955 227
68,423
68,423
65,679
65,681
NOTES
(1) Includes $27 648 unbilled revenues.
(2) Includes 177 332 therms relating to unbilled revenues.
FERC FORM NO.2 (ED. 12-86)Page 301
State of Idaho
Name of Respondent This R
lEjort Is:
Date of Report Year of Report
(1) X An Original (Mo, Da, fr)
Avista Corp,(2)A Resubmission April 18, 2007 December 31, 2006
GAS OPERATION AND MAINTENANCE EXPENSES
If the amount for previous year is not derived from nreviouslv reported fllrores, explain in footnotes.
Amount for Amount for
Line Amount Current Year Previous Year
No,(a)
1. PRODUCTION EXPENSES
A. Manufactured Gas Production
Manufactured Gas Production (Submit Supplemental Statement)
B, Natural Gas Production
B I, Natural Gas Production and Gathering
Operation
750 Operation Supervision and En~ineerin~
751 Production Maps and Records
752 Gas Wells Expenses
753 Field Lines Exnenses
754 Field Compressor Station Expenses
755 Field Compressor Station Fuel and Power
756 Field Measuring and Regulating Station Expenses
757 Purification Expenses
758 Gas Well Royalties
759 Other Expenses
760 Rents
TOTAL Operation (Enter Total of lines 7 thru 17)
Maintenance
761 Maintenance Supervision and Engineering
762 Maintenance of Structures and Improvements
763 Maintenance of Producing Gas Wells
764 Maintenance of Field Lines
765 Maintenance of Field ComDressor Station Equinment
766 Maintenance of Field Meas. and Reg. Sta. EQuinment
767 Maintenance of Purification Equipment
768 Maintenance of Drilling and Cleaning Equipment
769 Maintenance of Other EQuipment
TOTAL Maintenance (Enter Total of lines 20 thru 28)
TOTAL Natural Gas Production and Gathering (Total of lines 18 and 29)
B2. Products Extraction
Operation
770 Ooeration Supervision and Engineering
771 Operation Labor
772 Gas Shrinkage
773 Fuel
774 Power
775 Materials
776 Operation Supplies and Expenses
777 Gas Processed bv Others
778 Rovalties on Products Extracted
779 Marketin~ Expenses
780 Products Purchased for Resale
781 Variation in Products Inventory
(Less) 782 Extracted Products Used by the Utility-Credit
783 Rents
TOTAL Operation (Enter Total of Lines 33 thru 46)
FERC FORM NO.2 (ED 12-88)Page 320
State of Idaho
Name of Respondent This R~ort Is:Date of Report Year of Report
(1) X An Original (Mo, Da, Yr)
Avista Corp.(2)A Resubmission April 18, 2007 December 31, 2006
GAS OPERA nON AND MAINTENANCE EXPENSES
Line Amount Current Year Previous Year
No.(a)(b) (e)
B2. Products Extraction (Continued)
Maintenance
784 Maintenance Supervision and En,::ineerin,::
785 Maintenance of Structures and Improvements
786 Maintenance of Extraction and Refining Equipment
787 Maintenance of Pipe Lines
788 Maintenance of Extracted Products Storage Equipment
789 Maintenance of Compressor Equipment
790 Maintenance of Gas Measurin,:: and Re,::, Equipment
791 Maintenance of Other Equipment
TOTAL Maintenance (Enter Total of lines 49 thru 56)
TOTAL Products Extraction (Enter Total of lines 47 and 57)
C. Exploration and Development
Operation
795 Delay Rentals
796 Nonproductive Well Drilling
797 Abandoned Leases
798 Other Exploration
TOTAL Exploration and Development (Enter Total of lines 61 thru 64)
D. Other Gas Supply Expenses
Operation
800 Natural Gas Well Head Purchases
800.1 Natural Gas Well Head Purchases, Intracompany Transfers
801 Natural Gas Field Line Purchases
802 Natural Gas Gasoline Plant Outlet Pruchases
803 Natural Gas Transmission Line Purchases
804 Natural Gas Citv Gate Purchases 199 682 116 666
804.1 Liquefied Natural Gas Purchases
805 Other Gas Purchases 175,575
(Less) 805.1 Purchased Gas Cost Adiusttnents 850 652
TOTAL Purchased Gas (Enter Total of lines 67 to 76)050 334 I
806 Exchange Gas
Purchased Gas Expenses
807.1 Well Expenses-Purchased Gas
807.2 Operation of Purchased Gas Measuring Stations
807.3 Maintenance of Purchased Gas Measuring Stations
807.4 Purchased Gas Calculations Expenses
807.5 Other Purchased Gas Expenses
TOTAL Purchased Gas Expenses (Enter Total of lines 80 thru 84)
808.1 Gas Withdrawn from Storage-Debit 963,162 972 390
(Less) 808.2 Gas Delivered to Storage-Credit 802 758)393 269)
809.1 Withdrawals of Liquefied Natural Gas for Processing-Debit
(Less) 809.2 Deliveries of Natural Gas for Processinl!;-Credit
Gas Used in Utility Operations-Credit
810 Gas Used for Compressor Station Fuel-Credit
811 Gas Used for Products Extraction-Credit
812 Gas used for Other Utilitv Ooerations-Credit
TOTAL Gas Used in Utility Operations-Credit (Total of lines 91 thru 93)
813 Other Gas Supply Expenses 316,422 328 853
TOTAL Other Gas Supplv Exp ITotal of lines 77 86 thru 89 95)527 160 379 132
TOTAL Production Expenses (Enter Total of lines 3 , and 96)527 160 379 132
FERC FORM NO.2 (ED 12-88)Page 321
State of Idaho
Name of Respondent This R
iRlort Is:
Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
A vista Corp,(2)A Resubmission April 18 2007 December 31, 2006
GAS OPERATION AND MAIN1ENANCE EXPENSES
Amount for Amount for
Line Amount Current Year Previous Year
No,(a)(b)
2, NATURAL GAS STORAGE, TERMINALING AND
PROCESSING EXPENSES
A, UnderlITound Storage Expenses
100 Operation
101 814 Operation Supervision and Engineering 25,218 985
102 815 Maps and Records
103 816 Wells Expenses
104 817 Lines Expense
105 818 ComPressor Station Expenses
106 819 Compressor Station Fuel and Power
107 820 Measuring and Regulating Station Expenses
108 821 Purification Expenses
109 822 Exploration and Development
110 823 Gas Losses
III 824 Other Expenses 551 279
112 825 Storage Well Rovalties
113 826 Rents
114 TOTAL Operation (Enter Total of lines 101 thru 113)769 265
115 Maintenance
116 830 Maintenance Supervision and Engineering
117 831 Maintenance of Structures and Improvements
118 832 Maintenance of Reservoirs and Wells
119 833 Maintenance of Lines
120 834 Maintenance of Compressor Station Equipment
121 835 Maintenance of Measuring and Regulating Station Equipment
122 836 Maintenance of Purification Equipment
123 837 Maintenance of Other Equipment 953 656
124 TOTAL Maintenance (Enter Total of lines 116 thru 123)953 656
125 TOTAL Underground Storage Expenses (Total of lines 114 and 124)178 722 166 921
126 B. Other Storage Expenses
127 Operation
128 840 Operation Supervision and Engineering
129 841 Operation Labor and Expenses
130 842 Rents
131 842.1 Fuel
132 842,2 Power
133 842.3 Gas Losses
134 TOTAL Operation (Enter Total of lines 128 thru 133)
135 Maintenance
136 843.1 Maintenance Supervision and Engineering
137 843.2 Maintenance of Structures and Improvements
138 843.3 Maintenance of Gas Holders
139 843.4 Maintenance of Purification Equipment
140 843.5 Maintenance of Liquefaction Equipment
141 843.6 Maintenance of Vaporizing Equipment
142 843.7 Maintenance of Compressor Equipment
143 843,8 Maintenance of Measuring and Regulating Equipment
144 843.9 Maintenance of Other Equipment
145 TOTAL Maintenance (Enter Total of lines 136 thru 144)
146 TOTAL Other Storage Expenses (Enter Total of lines 134 and 145)
FERC FORM NO.2 (ED 12-88)Page 322
State of Idaho
Name of Respondent This R
tEjOn Is:
Date of Repon Year of Repon
(I) X An Original (Mo, Da, Yr)
Avista Corp.(2)A Resubmission April 18 2007 December 31, 2006
GAS OPERA nON AND MAINTENANCE EXPENSES
Line Amount Current Year Previous Year
No.(a)(b) (e)
147 C. Liouefied Natural Gas Terminaling and Processing Expenses
148 Operation
149 844.1 Operation Supervision and Engineering
150 844.2 LNG Processing Terminal Labor and Exoenses
151 844.3 LiouefactionProcessing Labor and Expenses
152 844.4 Liouefaction TranspOr1ation Labor and Expenses
153 844.5 Measuring and Regulating Labor and Expenses
154 844.6 Comoressor Station Labor and Expenses
155 844.7 Communication System Expenses
156 844.8 Svstem Control and Load Dispatching
157 845.1 Fuel
158 845.2 Power
159 845.3 Rents
160 845.4 Demurrage Charges
161 (Less) 845.5 Wharfage Receiots-Credit
162 845,6 Processing Liouefied or Vaporized Gas bv Others
163 846.1 Gas Losses
164 846.2 Other Exoenses
165 TOTAL Operation (Enter Total of lines 149 thru 164)
166 Maintenance
167 847.1 Maintenance Suoervision and Engineering
168 847.2 Maintenance of Structures and Improvements
169 847.3 Maintenance of LNG Processing Terminal Equipment
170 847.4 Maintenance of LNG Transpor1ation Eouioment
171 847.5 Maintenance of Measuring and Regulating Equipment
172 847.6 Miantenance of Compressor Station Equipment
173 847.7 Maintenance of Communication Eouipment
174 847.8 Maintenance of Other Equipment
175 TOTAL Maintenance (Enter Total of lines 167 thru 174)
176 TOTAL Liouefied Nat Gas Terminaling and Processing Exp (Lines 165 & 175)
177 TOTAL Natural Gas storage (Enter Total of lines 125, 146, and 176)178 722 166,921
178 3. TRANSMISSION EXPENSES
179 Operation
180 850 Operation Supervision and Engineering
181 851 System Control and Load Dispatching
182 852 Communication System Expenses
183 853 Comoressor Station Labor and Expenses
184 854 Gas for Compressor Station Fuel
185 855 Other Fuel and Power for Compressor Stations
186 856 Mains Expenses
187 857 Measuring and Regulating Station Expenses
188 858 Transmission and Compression of Gas bv Others
189 859 Other Expenses
190 860 Rents
191 TOTAL Operation (Enter Total of lines 180 thru 190)
FERC FORM NO.2 (ED 12-88)Page 323
State 01 Idaho
Name of Respondent This R
iRlort Is:
Date of Report Year of Report
(I) X An Original (Mo, Va, Yr)
Avista Corp.(2)A Resubmission April 18, 2007 December 31 2006
GAS OPERATION AND MAINTENANCE EXPENSES
Line Amount Current Year Previous Year
No.(a)(b) (e)
3. TRANSMISSION EXPENSES (Continued)
192 Maintenance
193 861 Maintenance Supervision and Engineering
194 862 Maintenance of Structures and Improvements
195 863 Maintenance of Mains
196 864 Maintenance of Compressor Station Equipment
197 865 Maintenance of Measuring and Reg, Station Equipment
198 866 Maintenance of Communication Equipment
199 867 Maintenance of Other Equipment
200 TOTAL Maintenance (Enter Total of lines 193 thru 199)
201 TOTAL Transmission Expenses (Enter Total of lines 191 and 200)
202 4, DISTRIBUTION EXPENSES
203 Operation
204 870 Operation Supervision and Engineering 129 321 121 297
205 871 Distribution Load Dispatching
206 872 Compressor Station Labor and Expenses
207 873 Compressor Station Fuel and Power
208 874 Mains and Services Expenses 573 922 606 551
209 875 Measuring and Regulating Station Expenses-Genera)66,847 922
210 876 Measuring and Regulating Station Expenses-Industrial 1,458 (16)
211 877 Measuring and Regulating Station Expenses-Citv Gate Check Station 171 942
212 878 Meter and House Regulator Expenses 262 001 153 940
213 879 Customer Installations Expenses 359 225 399,925
214 880 Other Expenses 453 729 462 908
215 881 Rents 618 977
216 TOTAL Operation (Enter Total of lines 204 thru 2 I RR(; ?OO 843 445
217 Maintenance
218 885 Maintenance Supervision and Engineering 629 424
219 886 Maintenance of Structures and Improvements
220 887 Maintenance of Mains 347 794 341 354
221 888 Maintenance of Compressor Station Equipment
222 889 Maintenance of Meas, and Reg, Sta. EQuip.General 742 253
223 890 Maintenance of Meas. and Reg. Sta. Equip.Industrial 33,418 139
224 891 Maintenance of Meas. and Reg. Sta. EQuip.Citv Gate Check Station 922 270
225 892 Maintenance of Services 220 776 200 289
226 893 Maintenance of Meters and House Regulators 188 187 144 604
227 894 Maintenance of Other Equipment 409 064
228 TOTAL Maintenance (Enter Total of lines 218 thru 227)879 876 848 396
229 TOTAL Distribution Expenses CEnter Total of lines 216 and 228)766,166 691 841
230 5. CUSTOMER ACCOUNTS EXPENSES
231 Operation
232 901 Supervision 102 606 131 713
233 902 Meter Reading Expenses 287 295 412 132
234 903 Customer Records and Collection Expenses 273 653 175,169
235 904 Uncollectible Accounts 308 344 285 570
236 905 Miscellaneous Customer Accounts Expenses 522 101 284
237 TOTAL Customer Accounts Exoenses (Enter Total of lines 232 thru 236)008,420 105 868
FERC FORM NO.2 (ED 12-88)Page 324
Name of Respondent This R~ort Is:
(1) 129 An Original
Avista Corp,A Resubmission
GAS OPERA nON AND MAINTENANCE EXPENSES
(2)
If the amount for ear is not derived from
Amount
(a)
6. CUSTOMER SERVICE AND INFORMATIONAL EXPENSES
State of Idaho
Date of Report
(Mo, Da, Yr)
Year of Report
April 18 2007 December 31, 2006
Amount for
Previous Year
(c)
280 634 226 191
121)
278 108
217 170
878 576
390 311
268 886
293,968
NUMBER OF GAS DEPARTMENT EMPLOYEES
1. The data on number of employees should be reported construction employees in a foonote.
for the payroll period ending nearest to October 3 I, or 3. The number of employees assignable to the gas
any payroll period ending 60 days before or after Octo-department from joint function of combination utilities
ber31.may be detennined by estimate, on the basis of employee
2. If the respondent's payroll for the reporting period equivalents,Show the estimated number of equivalent
includes any special constrction personnel, include such employees attributed to the gas department from joint
emplovees on line 3, and show the number of such special functions.
Payroll Period Ended (Date)December 31 , 2006
Total Regular Full-Time Employees 231
Total Part-Time and Temporary Employees allocation of General Emplovees
Total EmDlovees 251
FERC FORM NO.2 (ED 12-88)Page 325
State of Idaho
Name of Respondent This (KJort Is:Date of Report Year of Report(1) X An Original (Mo. Da, fr)
A vista Corp.(2)A Resubmission April 18 2007 Dec. 31, 2006
TRANSMISSION MAINS
Show particulars Called for Concerning Transmission Mains
Total Length in Taken up or Total Length
L...ine Kind of Material Diameter of Use Beginning of Laid During Abandoned During in Use End
No.Pipe, Inches Year, Feet Year, Feet Year, Feet of Year, Feet
(a)(b)(c)(d)(e)if)
None
TOTALS
* Show separately and identify lines held under a titJe other than full ownership.
FERC FORM NO.2 (ED 12-87)Page 514
Name of Respondent
Avista Corp.
p..-
ine Kind of Material
No.
(a)
Steel VV rapped
Steel VVrapped
Steel VVrapped
Steel VVrapped
Steel VV rapped
Plastic
Plastic
Plastic
Plastic
Plastic
TOTALS
FERC FORM NO.
This Re~rt Is:(1) 129 An Original
(2) D A Resubmission
DISTRIBUTION MAINS
Date of Report
(Mo, Da, Yr)
April 18, 2007
Diameter of
Pipe, Inches
(b)
Less than 2"
2" to 4"
4" to 8"
8" to 12"
Over 12"
Show Particulars Called for Concerninq Distribution Mains
Total Length in
Use Beginning of
Year, Feet
(c)
652 640
601 920
332 640
280
Less than 2"
2" to 4"
4" to 8"
8" to 12"
Over 12"
334 880
166 880
279 840
374 080
Page 514-
Laid During
Year, Feet
(d)
258 720
800
31,680
797 280
174 240
080
1 ,372 800
I Taken up
Abandoned Durin
Year, Feet
(e)
State of Idaho
Year of Report
Dec. 31 , 2006
Total Length
in Use End
of Year, Feet
(f)
911,360
654 720
364 320
280
132 160
1 ,341 ,120
337 920
746 880
Name of Respondent This Report Is:Date of Report Year of Report
(1) An Original (Mo, Da, Yr)
Avista Corp.(2) D A Resubmission Apri118,2007 Dec. 31 , 2006
SERVICE PIPES GAS
Show the particulars called for concerning the line service pipe in possession of the respondent at the close of
Number at Number umber Remove Number Average
Line Type Diameter Beginning Added or Abandoned at Close Length
No.in Inches of Year During Year During Year of Year in Feet
(a)(b)(c)(d)(e)(f)
(g)
Steel Wrapped l' or Less 16,136 957 13,179 Not
Steel Wrapped 1" thru 2"230 264 Available
Steel Wrapped 2" thru 4"
Steel Wrapped 4" thru 8"
Steel Wrapped Over 8"
Plastic l' or Less 49,112 933 66,045
Plastic 1" thru 2"167 250 417
Plastic 2" thru 4"
Plastic 4" thru 8"
Plastic Over 8"
TOTALS 452 17,447 957 79,942
State of Idaho
FERC FORM NO.Page 514-
State of Idaho
Name of Respondent This R
IKJort Is:
Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
Avista Corp.(2)A Resubmission April 18,2007 Dec. 31,2006
CUSTOMER'S METERS
Owned
Line Size Type Make Capacity Beginmng Added Retired Owned
No.of Year During Year During Year End of Year
(a)(b)(c)(d)(e)(f)
(g)
(h)
Detailed information not available.
TOTAL 67,814 2,195 70,009
FERC FORM NO.Page 514-
Name of Respondent This Report Is:Date of Report Year of Report
(8J An Original (Mo, Da, Yr)
Avista Corporation A Resubmlssion April 18, 2007 Dec. 31 2006
GAS ACCOUNT - NATURAL GAS
The purpose of this schedule is to account for the quantity or intrastate facilities and which the reporting pipeline received
of natural gas received and delivered by the respondent.through gathering facilities or intrastate facilities, but not through any
Natural gas means either natural gas unmixed or any of the interstate portion of the reporting pipeline, and (3) the gathering
mixture of natural and manufactured gas.line quantities that were not destined for interstate market or that were
Enter in column ( c ) the Dth as reported in the not transported through any interstate portion of the reporting
schedules indicated for the items of receipts and pipeline.
deliveries.7 Also indicate in a footnote (1) the system supply quantities of gas
Indicated in a footnote the quantities of bundled sales that are stored by the reporting pipeline, during the reporting year and
and transportation gas and specify the line on which also reported as sales, transportation, and compression volumes by
such quantities are listed.the reporting pipeline during the same reporting year, (2) the system
If the respondent operates two or more systems which supply quantities of gas that are stored by the reporting pipeline during
are not interconnected, submit separate pages for this the reporting year which the reporting pipeline intends to sell or
purpose. Use copies of pages 520,transport in a future reporting year, and (3) contract storage
Also indicate by footnote the quantities of gas not subject quantities.
to Commission regulation which did not incur FERC B Also indicate the volumes of pipeline production field sales that are
regulatory costs by showing (1) the local distribution included in both the company's total sales figure and the company
volumes another jurisdictional pipeline delivered to the total transportation figure. Add additional rows as necessary to
local distribution company portion of the reporting report all data, numbered 14., 14.02, etc,
pipeline (2) the quantities the reporting pipeline
transported or sold through its local distribution facilities
01 NAME OF SYSTEM
Line Ref.
No.Item Page No.Amount of Dth (1)
(a)(b)(e)
GAS RECEIVED
Gas Purchases (Accounts 800-805)693,484
Gas of Others Received for Gathering (Account 489.303
Gas of Others Received for Transmission (489.305
Gas of Others Received for Distribution (Account 489.301 4,496 941
Gas of Others Received for Contract Storage (Account 489.307
Exchanaed Gas Received from Others (Account 806)328
Gas Received as Imbalances (Account 806)328
Receipts pf Respondent's Gas Transported by Others (Account 858)332
Other Gas Withdrawn from Storaae (Explain)
Gas Received from Shippers as compressor Station Fuel
Gas Received from Shippers as Lost and Unaccounted for
Other Receipts (Speciw):
Total Receipts (Total lines 3 thru 14.190,425
GAS DELIVERI::LJ
Gas Sales (Accounts 480 - 484)037 130
Deliveries of Gas Gathered for Others (Account 489.303
Deliveries of Gas Transported for Others Account 489.305
Deliveries of Gas Distributed for Others (Account 489.301 4,496 941
Deliveries of Contract Storaae Gas (Account 489.4)307
Exchanae Gas Delivered to Others (Account 806)328
Gas Delivered as Imbalances (Account 806)328
Deliveries of Gas to Others for Transportation (Account 858)332
Other Gas Delivered to Storaae (Explain)
Gas Used for Compressor Station Fuel 509
Other Deliveries (Specifv): Sales for Resale 538,890
Total Deliveries (Total lines 17 thru 27.072 961GAS UNN ~nl )I\ITED FOR
Production System Losses
Gatherina Svstem Losses
Transmission Svstem Losses
Distribution System Losses 117,464Storaae System Losses
Other Losses (Speciw)
Total Unaccounted For (Total lines 30 thru 35\117,464
Total Deliveries & Unaccounted For (Total lines 28 thru 36)190,425
State of Idaho
FERC FORM NO.2 (REV 04-04)Page 520
OREGON
Name of Respondent This R~rt Is:
(1 ) 119 An Original
Avista Corp (2)A Resubmission
Date of Report
(Mo, Da, Yr)
State of Ore on
Year of Report
Apr. 18,2007 Dec. 31 , 2006
STATEMENT OF INCOME FOR THE YEAR
1. Report amounts for accounts 412 and 413, Revenue
and Expenses from Utility Plant Leased to Others, in another
utility column (i,k,m,o) in a similar manner to a utility depart-
ment. Spread the amount(s) over lines 01 thru 20 as ap-
propriate. Include these amounts in columns (c) and Cd)
totals.
2. Report amounts in account 414, Other Utility Operating
Income, in the same manner as accounts 412 and413 above.
3. Report data for lines 7 9, and 10 for Natural Gas com-
panies using accounts 404.1; 404.2, 404.3, 407., and
407.
4. Use page 122 for important notes regarding the state-
ment of income or an account thereof.
Line
No.
Account
(a)
TOTAL Utility Operating Expenses
(Enter Total of lines 4 thru 18)
Net Utility Operating Income (Enter Total of
line 2 less 19) (Carry forward to page 117
line 21)
(Ref.
Page
No.
(b)
300-301
320-325
320-325
336-338
336-338
336-338
262-263
262-263
262-263
234 272-277
234 272-277
266
5. Give concise explanations concerning unsettled rate
proceedings where a contingency exists such that refunds
of a material amount may need to be made to the utility
customers or which may result in a material refund to the
utility with respect to power or gas purchases. State for each
year affected the gross revenues or costs to which the con-
tingency relates and the tax effects together with an expIa-
tion of the major factors which affect the rights of the utility
to retain such revenues or recover amounts paid with respect
to power and gas purchases.
6. Give concise explanations concerning significant
amounts of any refunds made or received during the year
TOTAL
Current Year Previous Year
$188,675,613 $212,417 865
Note: (1) Information other than operating revenue not available by state.
FERC FORM NO.1 (REVISED 06-04)Page 114
Name of Respondent This R~rt Is:
(1 ) An Original
Date of Report
(Mo, Da, Yr)
State of Ore on
Year of Report
Avista Corp (2)D A Resubmission Apr. 18,2007 Dec. 31, 2006
STATEMENT OF INCOME FOR THE YEAR
resulting from settlement of any rate proceeding affecting
revenues received or costs incurred for power or gas pur-
chases, and a summary of the adjustments made to balance
sheet, income, and expense accounts.
7. If any notes appearing in the report to stockholders are
applicable to this Statement of Income, such notes may be at-
tached at page 122.
8. Enter on page 122 a consise explanation of only those
changes in accounting methods made during the year which
had an effect on net income, including the basis of allocations
and apportionments from those used in the preceding year.
Also give the approximate dollar effect of such changes.
9. Explain in a foonote if the previous year s figures are
different from that reported in prior reports.
10. If the columns are insufficient for reporting additional
utility departments, supply the appropriate account titles, lines
1 to 19, and report the infonnation in the blank space on page
122 or in a supplemental statement
ELECTRIC UTll..1TY
Current Year Previous Year
GAS UTll..1TYCurrent Year Previous Year
OTHER UTll..1TY
Current Year Previous Year Line
No.
$169,657 722 $132 856,140
FERC FORM NO.1 (REVISED 06-04)Page 115
Avista Corp.
State of Ore on
This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
) A Resubmission April 18, 2007 Dec. 31 , 2006
Name of Respondent
GAS PLANT IN SERVICE ACCOUNTS 101, 102, 103, AND 106
1. Report below the original cost of gas plant in service according to estimated basis if necessary, and include the entries in column (c).the prescribed accounts. Also to be included in column (c) are entries for reversals of tentative
2. In addition to Account 101 , Gas Plant in Service (Classified), this distributions of prior year reported in column (b). Likewise, if the
page and the next include Account 102, Gas Plant Purchased or respondent has a significant amount of plant retirements which have
Sold Account 103 Experimental Gas Plant Unclassified and not been classified to primary accounts at the end of the year, include
Account 106 Completed Construction Not Classified-Gas. in column (d) a tentative distribution of such retirements, on an
3. Include in column (c) and (d), as appropriate, corrections of estimated basis, with appropriate contra entry to the account for
additions and retirements for the current or preceding year. accumulated depreciation provision. Include also in column (d)
4. Enclose in parenthesis credit adjustments of plant accounts to reversals of tentative distributions of prior year's unclassified
indicate the negative effect of such accounts. retirements. Attach supplemental statement showing the account
5. Classify Account 106 according to prescribed accounts, on an distributions of these tentative classifications in columns (c) and (d).
Account
INTANGIBLE PLANT
Balance at
Beginning of Year
(b)
Additions
628
290 730
TOTAL Manuafactured Gas Production Plant Enter Total of lines 8 thru 24
PRODUCTS EXTRACTION PLANT
918 730
FERC FORM NO.2 (ED. 12-96)Page 204
State of Ore on
Name of Respondent This report is:
( X) An Original
Date of Report
(Mo, Da, Yr)
Year Ending
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 , 2006
GAS PLANT IN SERVICE ACCOUNTS 101, 102, 103, AND 106 Continued
including the reversals of the prior years tentative account and show in column (f) only the offset to the debits or credits to
distributions of these amounts. Careful observance of the primary account classifications.
above instructions and the texts of Account 101 and 106 will 7. For Account 399, state the nature and use of plant included in this
avoid serious omissions of respondent's reported amount for account and if substantial in amount submit a suplementaryplant actually in service at end of year. statement showing subaccount classification of such plant
6. Show in column (f) reclassifications or transfers within utility conforming to the requirements of these pages.
plant accounts. include also in column (f) the additions or 8. For each amount comprising the reported balance and changes in
reductions of primary account classifications arising from Account 102, state the property purchased or sold, name of vendor
distribution of amounts initially recorded in Account 102. In or purchaser, and date of transaction. If proposed journal entries
showing the clearance of Account 102 , include in column (e) have been filed with the Commission as required by the Uniform
the amounts with respect to accumulated provision for System of Accounts, give date of such filing.
depreciation, acquisition adjustments, etc.
Retirements Adjustments Balance at End of Year
618
628
60,402
12,618 030
FERC FORM NO.2 (ED. 12-96)Page 205
Line
No.
a e 0 regon
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.1 A Resubmission April 18, 2007 Dec. 31 2006
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
346 Gas Measuring and Regulating Equipment
347 Other Equipment
TOTAL Products Extraction Plant (Enter Total of lines 28 thru 35)
TOTAL Natural Gas Production Plant (Enter Total of lines 26 and 36)
Manufactured Gas Production Plant (Submit Supplementary Statement)918 730
TOTAL Production Plant (Enter Total of lines 37 and 38)918 730
NATURAL GAS STORAGE AND PROCESSING PLANT
Underground Storage Plant
350.1 Land
350.2 RiQhts-of-Wav
351 Structures and Improvements
352 Wells
352.1 Storage Leaseholds and Rights
352.2 Reservoirs
352.3 Non-recoverable Natural Gas
353 Lines
354 Compressor Station Equipment
355 Measuring and Regulating Equipment
356 Purification Equipment
357 Other Equipment
TOTAL Underground Storage Plant (Enter Total of lines 42 thru 53)
Other StoraQe Plant
360 Land and Land RiQhts
361 Structures and Improvements
362 Gas Holders
363 Purification Equipment
363.1 liquefaction Equipment
363.2 VaporizinQ Equipment
363.3 Compressor Equipment
363.4 Measurina and Reaulatina Equipment
363.5 Other Equipment
TOTAL Other Storaae Plant (Enter Total of lines 56 thru 64)
Base Load liquefied Natural Gas TerminalinQ and ProcessinQ Plant
364.1 Land and Land Rights
364.2 Structures and Improvements
364.3 LNG ProcessinQ Terminal Equipment
364.4 LNG Transporation Equipment
364.5 Measuring and Regulating Equipment
364.6 Compressor Station Equipment
364.7 Communications Equipment
364.8 Other Equipment
TOTAL Base Load Liq Nat'l Gas, Terminal and Processing Plant (lines 67-74)
TOTAL Nat'l Gas StoraQe and Processing Plant (Total 01 lines 54, 65 and 75)
TRANSMISSION PLANT
365.1 Land and Land Riahts
365.2 Rights-ol-Way
366 Structures and Improvements
8t t
FERC FORM NO.2 (ED. 12-96)Page 206
tate 0 reQon
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 2006
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)(1)
(g)
No.
618
68,030
12,618 030
,, --- -
FERC FORM NO.2 (ED. 12-96)Page 207
tate 0 reoon
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31, 2006
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
367 Mains
368 Compressor Station Equipment
369 Measuring and Regulating Equipment
370 Communications Equipment
371 Other Equipment
TOTAL Transmission Plant (Enter Totals of lines 78 thru 85)
DISTRIBUTION PLANT
374 Land and Land Rights 23,532 240)
375 Structures and Improvements 178 090 752
376 Mains 77,981 965 107,195
377 Compressor Station Equipment
378 Measuring and ReQulatinQ Equipment-General ' 993,902 379 115
379 Measuring and Regulating Equipment-City Gate 579,824 175 154
380 Services 50,605,638 182 531
381 Meters 855,454 299 104
382 Meter Installations
383 House ReQulators
384 House ReQulator Installations
385 Industrial Measuring and ReQulatinQ Station Equipment 758,408 40,528
100 386 Other Property on Customers' Premises
101 387 Other Equipment 539
102 TOTAL Distribution Plant (Enter Totals of lines 88 thru 101)155,977 352 12,214,138
103 GENERAL PLANT
104 389 Land and Land Rights 261 685
105 390 Structures and Improvements 778 826 226
106 391 Office Furniture and Equipment 685
107 392 Transportation Equipment 158 023 504 757
108 393 Stores Equipment 55,173
109 394 Tools, Shop, and Garage Equipment 741 798 110,217
110 395 Laboratory Equipment 343 390
111 396 Power Operated Equipment 315 519
112 397 Communication Equipment 140 197 356,789
113 398 Miscellaneous Equipment
114 Subtotal (Enter Totals of lines 104 thru 113)484,407 024 192
115 399 Other Tangible Property
116 TOTAL General Plant (Enter Totals of lines 114 and 115)4,484 407 024 192
117 TOTAL (Accounts 101 and 106)160 733 308 260,781
118 Gas Plant Purchased (See Instruction 8)
119 (Less) Gas Plant Sold (See Instruction 8)
120 Experimental Gas Plant Unclassified
121 TOTAL Gas Plant in Service (Enter Totals of lines 117 thru 120)160 733,308 I 13,260,781
FERC FORM NO.2 (ED. 12-96)Page 208
tate 0 Oregon
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 2006
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)(f)(0)No.
~ ,
327 965
089 203,753
204 879 153 669 037 949
244 582 371,191
933 753 045
216,447 571 722
350 446 160)798 952
657 798 279
100
539 101
785,022 0 2 146 927 169,553 394 102.103
554 260 131 104
820 775 232 105
685 106
706 640 074 107
173 108
825 841 190 109
343 390 110
834 111
33,754 463 232 112
113
76,660 5,431 939 114
115
76,660 5,431 939 116
038 854 146 927 175 102 161 117
118
119
120
038 854 146 927 175 102 161 121
FERC FORM NO.(ED. 12-96)Page 209
This Page Intentionally Left Blank
Name of Respondent This Report Is:Date of Report Year of Report
~ An Original (Mo , Yr)
Avista Corporation 0 A Resubmission April 18, 2007 Dec, 31, 2006
GAS STORED (ACCOUNT 117., 117.2, 117.3, 117.4, 164., 164.2, AND 164.
If durring the year adjustments were made to the stored gas inventory State in a footnote the basis of segregation of inventory between
reported in columns (d), (f), (g), and (h) (such as to correct cumulative current and noncurrent protions. Also state in a footnote the
inaccuracies of gas measurements), explain in a footnote the reason for method used to report storage (I.e. fixed asset method or
the adjustments, the Dth and dollar amount of adjustment, and account inventory method).
charged or cred~ed.
2 Report in column (e) all encroachments during the year upon the volumes
designated as base gas, column (b), and system balancing gas, column
( c ), and gas property recordable in the plant accounts.
(Account (Account Noncurrent (Account Current LNG LNG
ine Description 117.117,(Account 117.117.4)(Account 164.(Account 164.(Account 164.Total
No,(a)(b)(c)(d)(e)(f)
(g)
(h)(i)
Balance at Beginning of Year 576,553 545,714 122 267
Gas Delivered to Storage 542,630 542 630
Gas Withdrawn from Storage 548,744 548,744
Other Debits and Credits
Balance at End of Year 570,439 545,714 116,153
Dth 603 172,400 260,003
Amount Per Dekatherm $6.5116 $3.1654 $4.2928
State basis of segregation of inventory between current and noncurrent portions:
Current portion is gas expected to be sold within a 24 month period, All other gas is considered non-current.
State of Oregon
FERC FORM NO.2 (REV 04-04)Page 220
Name of Respondent This R~ort Is:
(1) l29 An Original
Date of Report
(Mo, Da, Yr)
Avista Corporation (2) 0 A Resubmission April 18,2007
State of Ore on
Year of Report
Dec. 31 2006
GAS OPERATING REVENUES (Account 400)
1. Report below natural gas operating revenues for each for each group of meters added. The average number of
prescribed account, and manufactured gas revenues in tot, customers means the average of twelve figures at the close
2. Natural gas means either natural gas unmixed or any of each month.
mixture of natural and manufactured gas. 4. Report quantities of natural gas sold in Mcf (14.73 psia
3. Report number of customers, columns (f) and (g), on at 60 degrees F). If billings are on a therm basis, give the Btu con-
the basis of meter, in addition to the number of flat rate aCtents of the gas sold and the sales converted to Mcf.
counts; except that where separate meter readings, 5. If increases or decreases from previous year (col-
added for billing purposes , one customer should be counte umns (c), (e) and (g), are not derived from previously
Line
No.
OPERATING REVENUES
Amount for
Amount for Year Previous Year
Title of Account
23,605
122 028 757
43,984 846
166 013,603
166,013 603
14 (485 Intracom an Transfers
15 487 Forfeited Discounts
16 488 Misc. Service Revenues
17 (489) Rev. from Trans. of Gas of Others18 490) Sales of Prod. Ext. from Nat. Gas
19 (491) Rev. from Nat. Gas Proc. b Others
20 492 Incidental Gasoline and Oil Sales
21 493 Rent from Gas Pro e22 (494) Interdepartmental Rents
23 (495 Other Gas Revenues24 TOTAL Other 0 eratin Revenues25 TOTAL Gas 0 eratin Revenues
26 (Less (496 Provision for Rate Refunds27 TOTAL Gas Operating Revenues Net of
Provision for Refunds28 Dis. Type Sales by States (Inc!. Main Line
Sales to Resid. and Comm. Custrs.
29 Main Line Industrial Sales (Inc!. Main
Line Sales to Pub. Authorities
30 Sales for Resale
31 Other Sales to Pub. Auth. Local Dist. Onl32 Interdepartmental Sales
33 TOTAL Same as Line 10, Columns (b and (d))
950
549,555
15,060
981 554
644 119
169,657 722
169 657 722
116,947 870
057 282
984 846
605
166 013,603
FERC FORM NO.2 (ED. 12-86)Page 300
36,245 803
720 663
19,206
105,483 538
23,506 946
128 990,484
128,990,484
362
053,653
060
709 580
865,655
132 856 139
Name of Respondent This ~ort Is:(1) 129 An Original
Date of Report
(Mo, Da, Yr)
State of Ore on
Year of Report
Avista Corporation (2)A Resubmission April 18,2007 Dec. 31 2006
GAS OPERATING REVENUES (Account 400) (Continued)
reported figures, explain any inconsistencies in a foot-
note,
6. Commercial and Industrial Sales, Account 481 , may be
classified according to the basis of classification (Small or
Commercial, and Large or Industrial) regularly used by the
respondent if such basis of classification is not generally
greater than 200 000 Mcf per year or approximately 800 Mcf
per day of normal requirements. (See Account 481 of the
Uniform System of Accounts. Explain basis of classification
in a footnote.
7. See page 108, Important Changes During Year,
for important new territory added and important rate increases
or decreases.
Quantity for Year
THERMS OF NATURAL GAS SOLD
Quantity for
Previous Year
AVG. NO. OF NAT. GAS CUSTRS. PER MO.
Number for Line
Number for Year Previous Year No.
16,996
247,139
29,762 863
118,010 002
370
370
16 7
249 8
90,256
240 936
848,651
NOTES
(1) Includes $1 414 210 unbilled revenues.
(2) Includes 457 105 therms relating to unbilled revenues,
FERC FORM NO.2 (ED. 12-86)Page 301
State of Oregon
Name of Respondent This R~ort Is:Date of Report Year of Report
(I) X An Original (Mo, Da, Yr)
Avista Corp.(2)A Resubmission April 18, 2007 December 31 2006
GAS OPERA nON AND MAINTENANCE EXPENSES
If the amount for previous vear is not derived from previouslv reported fi!(Ures, explain in footnotes.
Amount for Amount for
Line Amount CulTent Year Previous Year
No,(a)
I. PRODUCTION EXPENSES
A. Manufactured Gas Production
Manufactured Gas Production (Submit Supplemental Statement)
B. Natural Gas Production
B I. Natural Gas Production and Gathering
Operation
750 Operation Supervision and Engineering
751 Production Maps and Records
752 Gas Wells Expenses
753 Field Lines Expenses
754 Field Compressor Station Expenses
755 Field Compressor Station Fuel and Power
756 Field Measuring and Regulating Station Expenses
757 Purification Expenses
758 Gas Well Royalties
759 Other Expenses
760 Rents
TOTAL Operation (Enter Total of lines 7 thru 17)
Maintenance
761 Maintenance Supervision and Emdneerine:
762 Maintenance of Structures and Improvements
763 Maintenance of Producine: Gas Wells
764 Maintenance of Field Lines
765 Maintenance of Field Compressor Station EQuipment
766 Maintenance of Field Meas, and Ree:. Sta, EQuipment
767 Maintenance of Purification EQuipment
768 Maintenance of Drilling and Cleaning EQuipment
769 Maintenance of Other Eouipment
TOTAL Maintenance (Enter Total of lines 20 thru 28)
TOTAL Natural Gas Production and Gathering (Total of lines 18 and 29)
B2, Products Extraction
Operation
770 Operation Supervision and Ene:ineering
771 Operation Labor
772 Gas Shrinkage
773 Fuel
774 Power
775 Materials
776 Operation Supplies and Expenses
777 Gas Processed by Others
778 Rovalties on Products Extracted
779 Marketine: Expenses
780 Products Purchased for Resale
781 Variation in Products Inventorv
(Less) 782 Extracted Products Used bv the Utilitv-Credit
783 Rents
TOTAL Operation (Enter Total of Lines 33 thru 46)
FERC FORM NO.2 (ED 12-88)Page 320
State of Oregon
Name of Respondent This R
rRjort Is:
Date of Report Year of Report
(1 ) An Original (Mo, Da, fr)
Avista Corp.(2)A ResubmisslOn April 18, 2007 December 31, 2006
GAS OPERA nON AND MAINTENANCE EXPENSES
Line Amount CulTent Year Previous Year
No,(a)(b) (c)
H2. Products Extraction (Continued)
Maintenance
784 Maintenance Supervision and Engineering
785 Maintenance of Structures and Improvements
786 Maintenance of Extraction and Refining Equipment
787 Maintenance of Pipe Lines
788 Maintenance of Extracted Products Storage Equipment
789 Maintenance of Compressor Equipment
790 Maintenance of Gas Measuring and Reg. Equipment
791 Maintenance of Other Equipment
TOTAL Maintenance (Enter Total of lines 49 thru 56)
TOTAL Products Extraction (Enter Total of lines 47 and 57)
C. Exploration and Development
Operation
795 Delav Rentals
796 Nonproductive Well Drilling
797 Abandoned Leases
798 Other Exploration
TOTAL Exploration and Development (Enter Total of lines 61 thru 64)
D. Other Gas Suoplv Expenses
Operation
800 Natural Gas Well Head Purchases
800.1 Natural Gas Well Head Purchases, Intracomoanv Transfers
801 Natural Gas Field Line Purchases
802 Natural Gas Gasoline Plant Outlet Pruchases
803 Natural Gas Transmission Line Purchases
804 Natural Gas City Gate Purchases 126,805,403 98,970,263
804.1 Liquefied Natural Gas Purchases
805 Other Gas Purchases 727 550 498 520
(Less) 805.1 Purchased Gas Cost Adjustments 222,232 (709,947)
TOTAL Purchased Gas (Enter Total of lines 67 to 76)133 755 185 I 758 836 I
806 Exchange Gas
Purchased Gas Expenses
807.1 Well Expenses-Purchased Gas
807.2 Operation of Purchased Gas Measuring Stations
807.3 Maintenance of Purchased Gas Measuring Stations
807.4 Purchased Gas Calculations Expenses
807.5 Other Purchased Gas Expenses
TOTAL Purchased Gas Expenses (Enter Total of lines 80 thru 84)
808, I Gas Withdrawn from Storage-Debit 548 744
(Less) 808.2 Gas Delivered to Storage-Credit (542;630)(576 553)
809,1 Withdrawals of Liquefied Natural Gas for Processing-Debit
(Less) 809,2 Deliveries of Natural Gas for Processing-Credit
Gas Used in Utilitv Operations-Credit
810 Gas Used for Compressor Station Fuel-Credit
81 I Gas Used for Products Extraction-Credit
8 I 2 Gas used for Other Utility Operations-Credit
TOTAL Gas Used in Utility Operations-Credit (Total of lines 91 thru 93)
813 Other Gas Suoplv Expenses 417 736 397 416
TOTAL Other Gas Supplv Exp (Total of lines 77 85,86 thru 89,95)134 179 035 579,700
TOTAL Production Expenses (Enter Total of lines 3 , and 96)134 179,035 579.700
FERC FORM NO.2 (ED 12-88)Page 321
State of Oregpn
Name of Respondent This R
iIDon Is:
Date of Repon Year of Repon
(I) X An Original (Mo, Da, fr)
Avista Corp,(2)A Resubmission April 18, 2007 December 31 , 2006
GAS OPERA nON AND MAINTENANCE EXPENSES
Amount for Amount for
Line Amount CulTent Year Previous Year
No,(a)(b)
2. NATURAL GAS STORAGE, TERMINALING AND
PROCESSING EXPENSES
A. Underj(round Storaj(e Expenses
100 Operation
101 814 Operation Supervision and Engineering
102 815 Maps and Records
103 816 Wells Expenses
104 817 Lines Expense
105 818 Compressor Station Expenses
106 819 Compressor Station Fuel and Power
107 820 Measuring and Regulating Station Expenses
108 821 Purification Expenses
109 822 Exploration and Development
110 823 Gas Losses
III 824 Other Expenses
112 825 Storage Well Royalties
113 826 Rents
114 TOTAL Operation (Enter Total of lines 101 thru 113)
liS Maintenance
116 830 Maintenance Supervision and Engineering
117 831 Maintenance of Structures and Improvements
118 832 Maintenance of Reservoirs and Wells
119 833 Maintenance of Lines
120 834 Maintenance of Compressor Station Equipment
121 835 Maintenance of Measuring and Regulating Station Equipment
122 836 Maintenance of Purification Equipment
123 837 Maintenance of Other Equipment
124 TOTAL Maintenance (Enter Total of lines 116 thru 123)
125 TOTAL Underground Storaj(e Expenses (Total of lines 114 and 124)
126 B. Other Storage Expenses
127 Operation
128 840 Operation Supervision and Enj(ineerinj(
129 841 Operation Labor and Expenses
130 842 Rents
131 842.1 Fuel
132 842,2 Power
133 842.3 Gas Losses
134 TOTAL Operation (Enter Total of lines 128 thru 133)
135 Maintenance
136 843.1 Maintenance Supervision and Enj(ineerinj(
137 843.2 Maintenance of Structures and Improvements
138 843.3 Maintenance of Gas Holders
139 843.4 Maintenance of Purification Equipment
140 843.5 Maintenance of Liquefaction Equipment
141 843.6 Maintenance of Vaporizing Equipment
142 843,7 Maintenance of Compressor Equipment
143 843.8 Maintenance of Measuring and Regulating Eauioment
144 843,9 Maintenance of Other Equipment
145 TOTAL Maintenance (Enter Total of lines 136 thm 144)
146 TOTAL Other Storage Expenses (Enter Total of lines 134 and 145)
FERC FORM NO.2 (ED 12-88)Page 322
State of Oregon
Name of Respondent This R~on Is:Date of Repon Year of Report
(1) X An Original (Mo, Da, Yr)
A vista Corp.(2)A Resubmission April 18 2007 December 31 , 2006
GAS OPERA nON AND MAINTENANCE EXPENSES
Line Amount CulTent Year Previous Year
No.(a)(b) (c)
147 C. LiQuefied Natural Gas Tenninalin~ and Processin~ Expenses
148 Operation
149 844.1 Ooeration Supervision and Engineering
150 844.2 LNG Processin~ Tenninal Labor and Exoenses
151 844.3 LiQuefaction Processing Labor and Expenses
152 844.4 LiQuefaction Transportation Labor and Expenses
153 844.5 Measuring and Regulating Labor and Expenses
154 844.6 Compressor Station Labor and Expenses
155 844.7 Communication Svstem Expenses
156 844.8 Svstem Control and Load Dispatchin~
157 845.1 Fuel
158 845.2 Power
159 845.3 Rents
160 845.4 DemulTage Charges
161 (Less) 845.5 Wharfa~e Receiots-Credit
162 845.6 Processing LiQuefied or Vaporized Gas bv Others
163 846.1 Gas Losses
164 846.2 Other Expenses
165 TOTAL Operation (Enter Total of lines 149 thru 164)
166 Maintenance
167 847.1 Maintenance Supervision and En~ineerin~
168 847.2 Maintenance of Structures and Improvements
169 847.3 Maintenance of LNG Processing Tenninal EQuipment
170 847.4 Maintenance of LNG Transportation EQuipment
171 847.5 Maintenance of Measuring and Regulating EQuipment
172 847.6 Miantenance of Compressor Station EQuipment
173 847.7 Maintenance of Communication EQuipment
174 847.8 Maintenance of Other EQuipment
175 TOTAL Maintenance (Enter Total of lines 167 thru 174)
176 TOTAL LiQuefied Nat Gas Tenninaling and Processing Exp (Lines 165 & 175)
177 TOTAL Natural Gas stora~e (Enter Total of lines 125, 146, and 176)
178 3. TRANSMISSION EXPENSES
179 Operation
180 850 Operation Supervision and En~ineerin~
181 851 Svstem Control and Load Dispatchin~
182 852 Communication System Expenses
183 853 Compressor Station Labor and Expenses
184 854 Gas for Compressor Station Fuel
185 855 Other Fuel and Power for ComPressor Stations
186 856 Mains Expenses
187 857 Measuring and Regulating Station Expenses
188 858 Transmission and ComPression of Gas bv Others
189 859 Other Expenses
190 860 Rents
191 TOTAL Operation (Enter Total of lines 180 thru 190)
FERC FORM NO.2 (ED 12-88)Page 323
State of Oregon
Name of Respondent This R
lRlort Is:
Date of Report Year of Report
(I) X An Original (Mo, Da, Yr)
Avista Corp.(2)A Resubmission April 18 2007 December 31 , 2006
GAS OPERATION AND MAINTENANCE EXPENSES
Line Amount CuITent Year Previous Year
No.(a)(b) (c)
3. TRANSMISSION EXPENSES (Continued)
192 Maintenance
193 861 Maintenance SuDervision and Engineering
194 862 Maintenance of Structures and ImDrovements
195 863 Maintenance of Mains
196 864 Maintenance of Compressor Station Equipment
197 865 Maintenance of Measurinl! and ReI!. Station EauiDment
198 866 Maintenance of Communication EauiDment
199 867 Maintenance of Other Equipment
200 TOTAL Maintenance (Enter Total of lines 193 thru 199)
201 TOTAL Transmission Expenses (Enter Total of lines 191 and 200)
202 4, DISTRIBUTION EXPENSES
203 ODeration
204 870 Operation Supervision and Engineering 326,647 327 856
205 871 Distribution Load Dispatching
206 872 Comoressor Station Labor and ExDenses
207 873 ComDressor Station Fuel and Power
208 874 Mains and Services Expenses 799,991 880 732
209 875 Measuring and Resrulatinl! Station Exnenses-General 708 308
210 876 Measuring and Resrulating Station ExDenses-Industrial 981 570
211 877 Measurinl! and Regulating Station Expenses-City Gate Check Station 906 453
212 878 Meter and House Resrulator ExDenses 401 319 379 517
213 879 Customer Installations Expenses 684 077 618 026
214 880 Other ExDenses 645 169 605 119
215 881 Rents 7,411 327
216 TOTAL Operation (Enter Total of lines 204 thru 215)959 208 909.909
217 Maintenance
218 885 Maintenance SuDervision and Engineering 151 295 154 960
219 886 Maintenance of Structures and Improvements
220 887 Maintenance of Mains 874 829 852 708
221 888 Maintenance of Compressor Station EQuiDment
222 889 Maintenance of Meas, and Reg. Sta. EQuip.General 298 123 234
223 890 Maintenance of Meas, and ReI!. Sta. EauiD.Industrial 045 544
224 891 Maintenance of Meas. and Reg. Sta, EQuiD.Citv Gate Check Station 410 651
225 892 Maintenance of Services 319,233 228 760
226 893 Maintenance of Meters and House Rel!ulators 271 512 342 233
227 894 Maintenance of Other Equipment 105 901 685
228 TOTAL Maintenance (Enter Total of lines 218 thru 227)831 524 785 776
229 TOTAL Distribution ExDenses (Enter Total of lines 216 and 228)790732 695,685
230 5. CUSTOMER ACCOUNTS EXPENSES
231 ODeration
232 901 SuDervision 139 720 ) 89 574
233 902 Meter Readinl! ExDenses 179 078 251 939
234 903 Customer Records and Collection Exoenses 851 892 777 724
235 904 Uncollectible Accounts 419 876 415 884
236 905 Miscellaneous Customer Accounts ExDenses 732 148 363
237 TOTAL Customer Accounts ExDenses (Enter Total of lines 232 thru 236)640299 783 484
FERC FORM NO.2 (ED 12-88)Page 324
Name of Respondent This R,.!:j;ort Is:(I) ~ An Original
A vista Corp.A Resubmission
GAS OPERA nON AND MAINTENANCE EXPENSES
(2)
If the amount for ear is not derived from
Amount
(a)
6. CUSTOMER SERVICE AND INFORMATIONAL EXPENSES
State of Oregon
Date of Report
(Mo, Da, fr)
Year of Report
April 18, 2007 December 31, 2006
Amount for
Previous Year
(c)
080 415 087 049
107 906 249
354 605 469 485
589 388
623 639 448 222
046)
312 771 348,045
133 819 307 951
734 279
594 588 544 176
847 314 278 454
148 708,415 113 232 294
NUMBER OF GAS DEPARTMENT EMPLOYEES
I. The data on number of employees should be reported construction employees in a foonote.
for the payroll period ending nearest to October 31, or 3. The number of employees assignable to the gas
any payroll period ending 60 days before or after Octo-department from joint function of combination utilities
ber31.may be detennined by estimate, on the basis of employee
2. If the respondent's payroll for the reporting period equivalents,Show the estimated number of equivalent
includes any special constrction personnel, include such employees attributed to the gas department from joint
employees on line 3, and show the number of such special functions.
Pavroll Period Ended (Date)December 31, 2006
Total Regular Full-Time Employees 701 133
Total Part-Time and Temporarv Emplovees allocation of General Employees
Total Emplovees 731 154
FERC FORM NO.2 (ED 12-88)Page 325
tate 0 regon
Name of Respondent This :ooort Is:Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
Avista Corp.(2)A Resubmtssion April 18,2007 Dec. 31, 2006
TRANSMISSION MAINS
Show particulars Called for Concerning Transmission Mains
Total Length in Taken up or TotaJ Length
Line Kind of MateriaJ Diameter of Use Beginning of Laid During Abandoned During in Use End
No.Pipe, Inches Year, Feet Year, Feet Year, Feet of Year, Feet
(a)(b)(c)(d)(e)(f)
(Moved to Distribution)
Steel Coated Over 4" through 10"332 640 21,120 353 760
Steel Coated 4" or Less 120 21120
TOTALS 353,760 120
* Show separately and identify lines held under a title other than full ownership.
FERC FORM NO.(ED 12-87)Page 514
Name of Respondent This Report Is:(1) 129 An Original
(2) 0 A ResubmissionAvista Corp.
DISTRIBUTION MAINS
Show Particulars Called for Concerning Distribution MainsTotal Length in t Taken up Use Beginning of Laid During Abandoned Durin
Year, Feet Year, Feet Year, Feet(c) (d) (e)
740,320 5,280
844 800
770,880
15,840
ine Kind of Material
No.
Diameter of
Pipe, Inches
(b)
Less than 2"
2" to 4"
4" to 8"
8" to 12"
Over 12"
(a)
Steel Wrapped
Steel Wrapped
Steel Wrapped
Steel Wrapped
Steel Wrapped
19 Change in footage relects additions net of retirements.
Plastic
Plastic
Plastic
Plastic
Plastic
Less than 2"
2" to 4"
4" to 8"
8" to 12"
Over 12"
TOTALS
FERC FORM NO.
968,480
776,160
63,360
10,179,840
Page 514-
Date of Report
(Mo, Da, Yr)
April 18, 2007
21,120
58,080
264,000
520
10,560
385,440 120
State of Oregon
Year of Report
Dec. 31 2006
Total Length
in Use End
of Year, Feet
(f)
745,600
823,680
828,960
15,840
232,480
823,680
73,920
10,544,160
State of Oreaon
Name of Respondent This Report Is:Date of Report Year of Report
(1)~ An Original (Mo, Da, Yr)
Avista Corp.(2)0 A Resubmission April 18,2007 Dec. 31 , 2006
SERVICE PIPES GAS
Show the particulars called for concern in!:; the line service pipe in possession of the respondent at the close of the
Number at Number Number Removed Number Average
Line Type Diameter Beginning Added or Abandoned at Close Length
No.in Inches of Year During Year During Year of Year in Feet
(a)(b)(c)(d)(e)(f)(0)
Steel Wrapped l' or Less 123 114 045 Not
Steel Wrapped 1" thru 2"638 589 Available
Steel Wrapped 2" thru 4"
Steel Wrapped 4" thru 8"
Steel Wrapped Over 8"
Plastic l' or Less 67,869 824 66,045
Plastic 1" thru 2"818 831
Plastic 2" thru 4"
Plastic 4" thru 8"
Plastic Over 8"
Number added is net of retirements
TOTALS 102,549 989 100,610
FERC FORM NO.Page 514-
State 0 Orel!:on
Name of Respondent This R
iIDort Is:
Date of Report Year of Report(1) X An Original (Mo, Da, Yr)
Avista Corp.(2)A Resubmission April 18,2007 Dec. 31,2006
CUSTOMER'S METERS
Owned
Line Size Type Make Capacity Beginning Added Retired Owned
No.of Year During Year During Year End of Year
(a)(b)(c)(d)(e)(f)(1!)(h)
Detailed information not available.
TOTAL 105 854 594 723 106 725
FERC FORM NO.Page 514-
tate 0 reaonName of Respondent This Report Is:Date of Report Year of Report
An Original (Mo, Da, Yr)
Avista Corporation A Resubmission April 18 2007 Dec. 31,2006
GAS ACCOUNT - NATURAL GAS
The purpose of this schedule is to account for the quantity or intrastate facilities and which the reporting pipeline received
of natural gas received and delivered by the respondent.through gathering facilities or intrastate facilities, but not through any
Natural gas means either natural gas unmixed or any of the interstate portion of the reporting pipeline, and (3) the gathering
mixture of natural and manufactured gas.line quantities that were not destined for interstate market or that were
Enter in column ( c ) the Dth as reported in the not transported through any interstate portion of the reporting
schedules indicated for the items of receipts and pipeline.
deliveries.7 Also indicate in a footnote (1) the system supply quantities of gas
Indicated in a footnote the quantities of bundled sales that are stored by the reporting pipeline, during the reporting year and
and transportation gas and specify the line on which also reported as sales, transportation, and compression volumes by
such quantities are listed,the reporting pipeline during the same reporting year, (2) the system
If the respondent operates two or more systems which supply quantities of gas that are stored by the reporting pipeline during
are not interconnected, submit separate pages for this the reporting year which the reporting pipeline intends to sell or
purpose. Use copies of pages 520,transport in a future reporting year, and (3) contract storage
Also indicate by footnote the quantities of gas not subject quantities,
to Commission regulation which did not incur FERC 8 Also indicate the volumes of pipeline production field sales that are
regulatory costs by showing (1) the local distribution included in both the companys total sales figure and the company
volumes another jurisdictional pipeline delivered to the total transportation figure. Add additional rows as necessary to
local distribution company portion of the reporting report all data, numbered 14., 14., etc,
pipeline (2) the quantities the reporting pipeline
transported or sold through its local distribution facilities
01 NAME OF SYSTEM
Line Ref.
No.Item Page No.Amount of Dth (1)
(a)(b)(c)
GAS RECEIVED
Gas Purchases (Accounts 800-805)15,981 564
Gas of Others Received for Gatherino (Account 489.1 \303
Gas of Others Received for Transmission (489.305
Gas of Others Received for Distribution (Account 489.301 828,363
Gas of Others Received for Contract Storaoe (Account 489.4\307
Exchanaed Gas Received from Others (Account 806\328
Gas Received as Imbalances (Account 806)328
Receiots of Respondent's Gas Transported by OtherslAccount 858\332
Other Gas Withdrawn from Storage (Explain)
Gas Received from Shippers as compressor Station Fuel
Gas Received from Shippers as Lost and Unaccounted for
Other Receiots (Speciw):
Total Receipts (Total lines 3 thru 14.809,927
GA::; LJELIVERED
Gas Sales (Accounts 480 - 484)672 972
Deliveries of Gas Gathered for Others (Account 489.303
Deliveries of Gas Transoorted for Others Account 489.305
Deliveries of Gas Distributed for Others (Account 489.301 828 363
Deliveries of Contract Storaoe Gas (Account 489.4\307
Exchanae Gas Delivered to Others (Account 806)328
Gas Delivered as Imbalances (Account 806)328
Deliveries of Gas to Others for Transportation (Account 858f 332
Other Gas Delivered to Storaae (Explain)
Gas Used for Compressor Station Fuel 509
Other Deliveries (SpeciM: Sales for Resale 038,885
Total Deliveries (Total lines 17 thru 27.19,540 220
GAS UNArrnl II\ITEIT FOR
Production System Losses
Gatherino System Losses
Transmission Svstem Losses
Distribution System Losses 269 707
Storaae Svstem Losses
Other Losses (SpeciM
Total Unaccounted For (Total lines 30 thru 35\269,707
Total Deliveries & Unaccounted For (Total lines 28 thru 36\19,809,927
f 0
FERC FORM NO.2 (REV 04-04)Page 520
MONTANA
Name of Respondent This R~rt Is:
(1 ) 129 An Original
Date of Report
(Mo, Da. Yr)
State of Montana
Year of Report
Avista Corp (2)A Resubmission Apr. 18,2007 Dec. 31, 2006
STATEMENT OF INCOME FOR THE YEAR
1. Report amounts for accounts 412 and 413, Revenue
and Expenses from Utility Plant Leased to Others, in another
utility column (i,o) in a similar manner to a utility depart-
ment. Spread the amount(s) over lines 01 thru 20 as ap-
propriate. Include these amounts in columns (c) and (d)
totals.
2. Report amounts in account 414, Other Utility Operating
Income, in the same manner as accounts 412 and413 above.
3. Report data for lines 7 and 10 for Natural Gas com-
parnes using accounts 404.1, 404.2, 404.3, 407.1, and
407.
4. Use page 122 for important notes regarding the state-
ment of income or an account thereof.
Line
No.
Account
(a)
FERC FORM NO.2 (REVISED 06-04)
(Ref.
Page
No.
(b)
300-301
320-325
320-325
336-338
336-338
336-338
262-263
262-263
262-263
234 272-277
234,272-277
266
Page 114
5. Give concise explanations concerning unsettled rate
proceedings where a contingency exists such that refunds
of a material amount may need to be made to the utility
customers or which may result in a material refund to the
utility with respect to power or gas purchases. State for each
year affected the gross revenues or costs to which the con-
tingency relates and the tax effects together with an expIa-
tion of the major factors which affect the rights of the utility
to retain such revenues or recover amounts paid with respect
to power and gas purchases.
6. Give com;:ise explanations concerning significant
amountS of any refunds made or recei,:,ed dJIring the year
TOTAL
CUlTent Year Previous Year
$14 759,468 $10,877,767
Name of Respondent This R~rt Is:
(1) Qg An Original
Date of Report
(Mo, Da, Yr)
State of Montana
Year of Report
Avista Corp (2)A Resubrnission Apr. 18,2007 Dec. 31, 2006
STATEMENT OF INCOME FOR THE YEAR
resulting from settlement of any rate proceeding affecting
revenues received or costs incurred for power or gas pur-
chases, and a summary of the adjustments made to balance
sheet, income, and expense accounts.
7. If any notes appearing in the report to stockholders are
applicable to this Statement of Income, such notes may be at-
tached at page 122.
8. Enter on page 122 a consise explanation of only those
changes in accounting methods made during the year which
had an effect on net income, including the basis of allocations
and apportionments from those used in the preceding year.
Also give the approximate dollar effect of such changes.
9. Explain in a foonote if the previous year s figures are
different from that reported in prior reports.
10. If the columns are insufficient for reporting additional
utility departments, supply the appropriate account titles, lines
1 to 19. and report the infonnation in the blank space on page
122 or in a supplemental statement.
ELECTRIC UTILITYCurrent Year Previous Year
GAS UTILITYCurrent Year Previous Year
OTHER UTILITY
Current Year Previous Year Line
No.
$14,759,468 $10,877,767
FERC FORM NO.2 (REVISED 06-04)Page 115
This Page Intentionally Left Blank
NOT DIRECTLY ASSIGNED
TO STATES
Avista Corp.
Not Directl Assi ned to States
This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
) A Resubmission April 18, 2007 Dec. 31 2006
Name of Respondent
GAS PLANT IN SERVICE ACCOUNTS 101, 102, 103, AND 106
1. Report below the original cost of gas plant in service according to estimated basis if necessary, and include the entries in column (c).the prescribed accounts. Also to be included in column (c) are entries for reversals of tentative
2. In addition to Account 101 Gas Plant in Service (Classified), this distributions of prior year reported in column (b). Likewise, if the
page and the next include Account 102 Gas Plant Purchased or respondent has a significant amount of plant retirements which have
Sold Account 103, Experimental Gas Plant Unclassified and not been classified to primary accounts at the end of the year, include
Account 106 Completed Construction Not Classified-Gas. in column (d) a tentative distribution of such retirements, on an
3. Include in column (c) and (d), as appropriate, corrections of estimated basis, with appropriate contra entry to the account for
additions and retirements for the current or preceding year. accumulated depreciation provision. Include also in column (d)
4. Enclose in parenthesis credit adjustments of plant accounts to reversals of tentative distributions of prior year's unclassified
indicate the negative effect of such accounts. retirements. Attach supplemental statement showing the account
5. Classify Account 106 according to prescribed accounts, on an distributions of these tentative classifications in columns (c) and (d).
Account
INTANGIBLE PLANT
Balance at
Beginning of Year Additions
TO I AL Manuafactured Gas Production Plant Enter Total of lines 8 thru 24)
PRODUCTS EXTRACTION PLANT
FERC FORM NO.2 (ED. 12-96)Page 204
Not Direct! Assi ned to States
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 2006
GAS PLANT IN SERVICE ACCOUNTS 101 , 102, 103, AND 106 Continued
including the reversals of the prior years tentative account and show in column (f) only the offset to the debits or credits to
distributions of these amounts. Careful observance of the primary account classifications.
above instructions and the texts of Account 101 and 106 will 7. For Account 399, state the nature and use of plant included in this
avoid serious omissions of respondent's reported amount for account and if substantial in amount submit a suplementaryplant actually in service at end of year. statement showing subaccount classification of such plant
6. Show in column (f) reclassifications or transfers within utility conforming to the requirements of these pages.
plant accounts. include also in column (f) the additions or 8. For each amount comprising the reported balance and changes in
reductions of primary account classifications arising from Account 102, state the property purchased or sold, name of vendor
distribution of amounts initially recorded in Account 102. In or purchaser, and date of transaction. If proposed joumal entries
showing the clearance of Account 102, include in column (e) have been filed with the Commission as required by the Uniform
the amounts with respect to accumulated provision for System of Accounts, give date of such filing.
depreciation, acquisition adjustments, etc.
Adjustments Transfers Balance at End of Year Line
No.
Page 205
Retirements
FERC FORM NO.2 (ED. 12-96)
Not Directly Assione to States
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.J A Resubmission April 18, 2007 Dec. 31, 2006
GAS PLANT IN SERVICE (ACCOUNTS 101 102 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
346 Gas MeasurinQ and ReQulatinQ Equipment
347 Other Equipment
TOTAL Products Extraction Plant (Enter Total of lines 28 thru 35)
TOTAL Natural Gas Production Plant (Enter Total of lines 26 and 36)
Manufactured Gas Production Plant (Submit Supplementary Statement)
TOTAL Production Plant (Enter Total of lines 37 and 38)
NATURAL GAS STORAGE AND PROCESSING PLANT
UnderQround Storace Plant
350.1 Land
350.2 Rights-of-Way
351 Structures and Improvements
352 Wells
352.1 StoraQe Leaseholds and RiQhts
352.2 Reservoirs
352.3 Non-recoverable Natural Gas
353 Lines
354 Compressor Station Equipment
355 Measuring and Regulating Equipment
356 Purification Equipment
357, Other Equipment
TOTAL Undercround StoraQe Plant (Enter Total of lines 42 thru 53)
Other Storage Plant
360 Land and Land Rights
361 Structures and Improvements
362 Gas Holders
363 Purification Equipment
363.1 liquefaction Equipment
363.2 VaporizinQ Equipment
363.3 Compressor Equipment
363.4 Measuring and Regulating Equipment
363.5 Other Equipment
TOTAL Other Storage Plant (Enter Total of lines 56 thru 64)
Base Load liquefied Natural Gas Terminaling and Processing Plant
' ,.. .,.,
364.1 Land and Land RiQhts
364.2 Structures and Improvements
364.3 LNG Processinc Terminal Equipment
364.4 LNG Transporation Equipment
364.5 Measuring and Regulating Equipment
364.6 Compressor Station Equipment
364.7 Communications Equipment
364.8 Other Equipment
TOTAL Base Load Liq Nat'l Gas, Terminal and Processing Plant (lines 67-74)
TOTAL Nat'l Gas Storace and ProcessinQ Plant (Total of lines 54, 65 and 75)
TRANSMISSION PLANT
365.1 Land and Land Rights
365.2 Rights-of-Way
366 Structures and Improvements
FERC FORM NO.2 (ED. 12-96)Page 206
IrectlY, sslQne tates
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 , 2006
GAS PLANT IN SERVICE (ACCOUNTS 101 , 102, 103, AND 106) (Continued)
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)(f)
(g)
No.
- ~-_.' ._,_..'- ",
.77mu, ..
... - . ,,..
I A .
FERC FORM NO.2 (ED. 12-96)Page 207
Not Directly Assianed to States
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31 2006
GAS PLANT IN SERVICE (ACCOUNTS 101, 102,103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
367 Mains
368 Compressor Station Equipment
369 Measuring and Regulating Equipment
370 Communications Equipment
371 Other Equipment
TOTAL Transmission Plant (Enter Totals of lines 78 thru 85)
DISTRIBUTION PLANT
374 Land and Land Riohts
375 Structures and Improvements
376 Mains
377 Compressor Station Equipment
378 Measurinq and Regulating Equipment-General
379 Measuring and Regulating Equipment-City Gate
380 Services
381 Meters
382 Meter Installations
383 House Reoulators
384 House Regulator Installations
385 Industrial Measuring and Reoulating Station Equipment
100 386 Other Property on Customers' Premises
101 386 Other Equipment
102 TOTAL Distribution Plant (Enter Totals of lines 88 thru 101)
GENERAL PLANT103
104 389 Land and Land Rights
105 390 Structures and Improvements 133 370
106 391 Office Fumiture and Equipment 378 871
107 392 Transportation Equipment 445 592 821
108 393 Stores Equipment
109 394 Tools, Shop, and Garaoe Equipment 479 823 249 208
110 395 Laboratory Equipment 332 099
111 396 Power Operated Equipment 368 144
112 397 Communication Equipment 705,917 244 206
113 398 Miscellaneous Equipment 332
114 Subtotal (Enter Totals of lines 104 thru 113)741 778 628 605 I
115 399 Other Tanoible Property
116 TOTAL General Plant (Enter Totals of lines 114 and 115)741 778 628,605
117 TOTAL (Accounts 101 and 106)384 273 757,404
118 Gas Plant Purchased (See Instruction 8)
119 (Less) Gas Plant Sold (See Instruction 8)
120 Experimental Gas Plant Unclassified
121 TOTAL Gas Plant in Service (Enter Totals of lines 117 thru 120)384 273 757,404 I
FERC FORM NO.2 (ED. 12-96)Page 208
Not Directly AssiQned to States
Name of Respondent This report is:Date of Report Year Ending
( X) An Original (Mo, Da, Yr)
Avista Corp.) A Resubmission April 18, 2007 Dec. 31, 2006
GAS PLANT IN SERVICE (ACCOUNTS 101 , 102, 103, AND 106) (Continued)
Retirements Adjustments Transfers Balance at End of Year Line
(d)(e)(f)
(g)
No.
100
101
102
~ ~--.-' ' ,
103
104
133 370 105
378,871 106
737 424 676 107
108
772 725,260 109
277 331 822 110
368 144 111
174 896,948 112
332 113
959 290,423 114
115
959 290,423 116
128,003 013 674 117
118
119
120
128 003 013 674 121
FERC FORM NO.2 (ED. 12-96)Page 209
This Page Intentionally Left Blank