2008Annual Report.pdf

Item 1: ~ An Initial (Original)
Submission
OR 0 Resubmission No.
Form 2 Approved
OMS No. 1902-0028
(Expires 6/30/2007)
F Form 3-Q: ApprovedOMS NO.1902-0205
"lqO" Y ~ v ""¿ 1 .,~ .~l';~ i,.~~es 6/30/2007)l.u,'1 nL i.~ Hi u: L;J
THIS FILING IS
FERC FINANCIAL REPORT
FERC FORM No.2: Annual Report of
Major Natural Gas Companies and
Supplemental Form 3-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 report to be of a confidential nature.
Exact Legal Name of Respondent (Company)
A vista Corporation
Year/Period of Report
End of 2008/04
FERC FORM No. 2/3Q (02-04)
FERC FORM No. 2/3-Q:
REPORT OF MAJOR ELECTRIC UTILITIES. LICENSEES AND OTHER
IDENTIFICATION
02 YearlPeriod of Report
End of 2008/Q4
01 Exact Legal Name of Respondent
Avista Corporation
03 Previous Name and Date of Change (if name changed during year)1 I
04 Address of Principal Ofce at End of Period (Street, City, Statei Zip Code)
1411 East Mission Avenue, Spokane, WA, 99202
05 Name of Contact Person
Christy Burmeister-Smith
07 Address of Contact Person (Streeti Cityi Statei Zip Code)
1411 East Mission Avenue, Spokane, WA, 99202
06 Title of Contact Person
VP and Controller
08 Telephone of Contact Person,lncluding
Area Code
[phone]
09 This Report Is
(1) 00 An Original (2) 0 A Resubmission
10 Date of Report
(Moi Da, Yr)
04/16/2009
ANNUAL CORPORATE OFFICER CERTIFICATION
The undersigned .offcer 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 ~
Mark T. Thies
02 TitleSr. VP and CFO Mark T. Thies I. pii ).iia
Title 18, U.S.C. 1001 makes it a crme for any person to knowingly and willngly to make to any Agency or Departent of the United States any
false. ficttious or frudulent statements as to any matter within its jurisdiction.
04 Date Signed
(Moi Da, Yr)
Page 1FERC FORM No.2/3-Q (REV. 02-04)
Name of Respondent Th report is:Date of Repor1 Yea Endig
Avita Corp.( Xl An Origi (Mo, Da, Yr)
(L A Resubmision April 16, 200 Dec. 31, 2008
List of Schedules (Natural Gas Company)
Enter in column (d) the term "none," "not applicable," or "NA" as appropnate, where no informtion or amounts have been reportd for
certn pages. Omit pages where the responses are "none," "not applicable," or "NA."
Lie Title of Schedule Reference Page No.Date Revised Remaks
No.
(a)(b)( c)(d)
GENER CORPRATE INFORMATION AN FINANCIA STATEENTS
1 Gener Inormtion 101
2 Control Over ResDondent 102 N/A
3 Coroorations Controlled bv Resoondent 103
4 Securty Holders and Voting Power 107
5 hnDortt Chages Durg the Yea 108-109
6 ComDartive Balce Sheet 110-113
7 Stament of Income for the Yea 114-116
8 Statement of Accumulted Comprehensive Income and HedW¡¡ Activities 117 shown as 122a1
9 Statement of Retaed Ea¡¡S for the Yea 118-119
10 Statements of Cash Flows 120-121
11 Notes to Fincia Statements 122-123
BAlCE SHEET SUPPORTING SCHEUL (Assets and Other Debits)
12 Summ of Utity Plat and Accumulate Provisions for Depreciation, Amortzation, and Depletion 200-201
13 Gas Plat in Service 204-209
14 Gas Proner and Canacitv Leed from Other 212 N/A
15 Gas ProDe and Canacitv Leed to Others 213 N/A
16 Gas Plant Held for Futue Use 214
17 Constrction Work in Prol!ess-Gas 216
18 Genera Descrntion of Constrction Overhead Procdure 218 N/A
19 Accumulated Proviion for DeDreciation of Gas Utity Plat 219
20 Ga Stoed 220
21 Investments 222-223 N/A
22 Investments in Subsidiar Companes 224-225
23 Prenavrents 230
24 Extraordi Prpert Losses 230 N/A
25 Unrecvered Plat and Reguto Studv Costs 230 N/A
26 Other Regutory Assets 232
27 Miscellaneons Deferred Debits 233
28 Accumulte Deferr Income Taxes 234-235
BAlCE SHEET SUPPORTIG SCHEUL (Liabilties and Other Credts)
29 Canita Stok 250-251
30 Capita Stock Subscrbe, Capita Stock Liabilty for Conversion, Premium on Capita Stok, and
Intaents Recived on Canita Stok 252 N/A
31 Other Paid-in Canita 253 N/A
32 Discount on Canita Stok 254 N/A
33 Canita Stok Exnense 254()
34 Securties issued or Assumed and Securties Refided or Reti Dur¡¡ the Year 255 N/A
35 Lol!-Term Debt 256-257
36 Unaort Debt Exnense, Premium, and Discount on Long-Term Debt 258-259 N/A
37 Unaort Loss and Gai on Reacauied Debt 260 N/A
FERC FORM NO.2 (12-96)Page 2
Name of Respondent Ths repor is:Date of Repor Yea Endig
Avista Corp.( Xl An Origina (Mo,Da, Yr)
(L A Resubmission Apri 16, 200 De. 31, 2008
List of Schedules (Natural Gas Company)
Enter in colum (d) the term "none," "not applicable," or "NA" as appropnate, where no information or amounts have been report for
certn pages. Omit pages where the responses are "none," "not applicable," or "NA."
Line Title of Schedule Reference Page No.Date Revied Remaks
No.(a)(b)( c)(d)
38 Recncilation of Reoor Net Income with Taxble Income for Feder Income Taxes 261
39 Taxes Accrued, Preoaid, and Chal!ed Durl! Yea 262-263
40 Accumulate Derered Investment Tax Credts 266-267
41 Miscelleous Curent and Accrued Liabilties 268
42 Other Deferred Credts 269
43 Accumulate Defered Income Taxes-Other Propert 274-275
44 Accumulte Deferred Income Taxes-Other 276-277
45 Other Rel!ulatorv Libilties 278
INCOME ACCOUNT SUPPORTIG SCHEULES
46 Gas Ooertil! Revenues 300301
47 Revenues from Tranoortion of Gas of Other Though Gatherinl! Facities 302-303 N/A
48 Revenues frm Traoorttion of Gas of Others Though Trausmission Facilties 304305 N/A
49 Revenues from Storal!e Ga of Other 306-307 N/A
50 Other Gas Revenues 308 N/A
51 Ga Operation and Mainteance Exneuses 320-325
52 Exchal!e and Imbalce Trasactions 328 N/A
53 Gas Used in Utity Ooerations 331 N/A
54 Tranmission and Comoression of Gas bv Others 332 N/A
55 Other Gas Suoo1v Exoenses 334
56 Miscellaneous Genera Exoens-Gas 335
57 Depreciation, Depletion, and Amorttion of Ga Plant 336-338
58 Parculars Concel! Cert Income Deducton and Inteest Chal!es Accounts 340
COMMON SECON
59 Re2utorv Commssion Exoenses 350-351
60 Distrbution of Salares and Wal!es 354-355
61 Charizes for Outside Profesional and Other Consultative Serces 357
GAS PLAT STATITICAL DATA
62 Comoressor Stations 508-509 N/A
63 Gas Storaize Proiects 512-513
64 Tramission Lies 514 N/A
65 Tramission SYStem Pea Deliveres 518 N/A
66 Auxliar Peaknl! Facilties 519
67 Ga Account-Natu Gas 520
68 SvstemMao 522 N/A
69 Footnote Reference 551 shown as 450
70 Footnote Text 552 shown as 450
71 Stokholder's Reoort (check aooroorite box)
(Xl Four copies wi be submittd
( L No anua report to stokholders is prepared
FEC FORM NO.2 (12-96)Page 3
This Page Intentionally Left Blank
Name of Respondent
Avista Corporation
This Report Is:
(1) 00 An Original
(2) 0 A Resubmission
Date of Report
(Mo,Da, Yr)
04/16/2009
YearlPeriod of Report
End of 2008/Q4
GENERAL INFORMATION
1. Provide name and title of officer having custody of the general corporate books of account and address of
offce where the general corporate books are kept, and address of offce where any other corporate books of account
are kept, if diferent from that where the general corporate books are kept.
c. Burmister-Smth, vice President and Controller
1411 E. Mission Avenue
Spokae, 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 Washingtoni Incorporated March 15, 1889
3. If at any time during the year the propert 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 utilty 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) ~ No
FERC FORM NO.2 (ED. 12-87)PAGE 101
Name of Respondent ThisWrtlS:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/04
(2) Fi A Resubmission 04/16/2009
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 part 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 part.
Line Name of Company Controlled Kind of Business Percent Voting Footnote
.No.Stock Owned Ref.
(a)(b)(c)(d)
1 Avista Capital, Inc.Parent company to the 100
2 Company's subsidiaries.
3
4 Advantage 10, Inc.Provider of utility bil 75.11 Subsidiary of
5 processing, payment and Avista Capital
6 information services to multi
7 site customers in North Amer.
8
9 Avista Communications, Inc.Inactive 100 Subsidiary of
10 Avista Capital
11
12 Avista Development, Inc.Maintains an investment 100 Subsidiary of
13 portolio of real estate and Avista Capital
14 other investments.
15
16 Avista Energy, Inc.Inactve 100 Subsidiary of
17 Avista Capital
18
19 Avista Power, LLC Inactive 100 Affliate of
20 Avista Capital
21
22 Avista Turbine Power, Inc.Receives assignments of 100 Subsidiary of
23 purchase power agreements.Avista Capital
24
25 Avista Ventures, Inc.Inactive 100 Subsidiary of
26 Avista Capital
27
FERC FORM NO.2 (ED. 12-96)Page 103
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) ri A Resubmission 04/16/2009
C )RPORATIONS CONTROLLED BY R SPONDENT
1. Report below the names of all corporations, business trsts, and similar organizations, controlled directly or indirectly by respondent
at any time during the year. If control ceased prior to end of year, give partculars (details) in a footnote.
2. If control was by other means than a direct holding of voting rights, stte 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 part 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)
1 Pentzer Corporation Parent company of Bay Area 100 Subsidiary of
2 Manufacturing and Pentzer Avista Capital
3 Venture Holdings.
4
5 Pentzer Venture Holdings Inactive 100 Subsidiary of
6 Pentzer Corpration
7
8 Bay Area Manufacturing Holding Company 100 Subsidiary of
9 Pentzer Corporation
10
11 Advanced Manufcturing and Development, Inc.Performs custom sheet metal 82.95 Subsidiary of
12 dba Metalfx manufacturing of electronic Bay Area
13 enclosures, parts and systems Manufacturing.
14 for the computer, telecom and
15 medical industries. AM&D
16 also has a wood products
17 division.
18
19 Avista Receivables Corporation Acquires and sells accunts 100 Subsidiary of
20 receivable of Avista Corp.Avista Corp.
21
22 Spokane Energy, LLC Marketing of energy.100 Affliate of
23 Avista Corp.
24
25 Avista Capital II An affliated business trust 100 Affliate of
26 formed by the Company.Avista Corp.
27 Issued Pref. Trust Securities
FERC FORM NO.2 (ED. 12-96)Page 103.1
Name of Respondent This l!0rt Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) FiA Resubmission 04/16/2009
CJRPORATIONS 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 arid 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 part 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 part.
Line Name of Company Controlled Kind of Business Percent Voting Footnote
No.Stock Owned Ref.
(a)(b)(c)(d)
1
2 AVA Capital Trust II An affliated business trust 100 Affliate of
3 formed by the Company.Avista Corp.
4 Issued Pref. Trust Securities
5
6 Steam Plant Square, LLC Commercial offce and retail 90 Affliate of
7 leasing.Avista Development
8
9 Courtard Offce Center Commercial offce and retail 100 Affliate of
10 leasing.Avista Development
11
12 AVA Formation Corp.Holding Company 100 Formed in 2006 for
13 the purpose of
14 completing proposed
15 statutory share
16 exchange and
17 holding company
18 structure. Currently
19 a subsidiary of
20 Avista Corp.
21
22 Coyote Springs 2, LLC Owed an interest in a 100 inactive
23 generation plant.
24
25
26
27
FERC FORM NO.2 (ED. 12-96)Page 103.2
This Page Intentionally Left Blank
Name of Respondent Ths fort Is:Date of Report Yea of Report
(l) X An Orgial (Mo, Da, Yr)
A vista Corp.(2) A Resubmission 04/16/2009 Dec. 31,20
Security Holders and Voti~ Powers
1. Give the names and addrses of the 10 seunty holders of the repondent who, at the date of the latest closing of the stok bok or
compilation of list of stockholders of the respondent, pnor to the end of the yea, had the highest voting powers in
2. If any security other than stock cares voting nghts, explain in a supplemental statement how such secunty became vested with voting nghts
and give other importt details concerning the voting nghts of such securty. State whether voting nghts
3. If any class or issue of securty has any speial privileges in the election of directors, trste or managers, or in the determination of
corprate action by any method, explain bnefly in a footnote.
4. Furish details concerning any options, warants, or nghts outstading at the end of the yea for others to purchase securties of the
respondent or any secunties or other assets owned by the respondent, including pnces, expiration dates, and other
i. Give date of the latest closing of the 2. State the tota number of votes cast at the latest general 3. Give the date and place of
stock book pnor to end of year, and in a meetig pnor to the end of year for election of directors of the such meeting:
footnote, state the purse of such closing:respondent and number of such votes cast by proxy.
December 4, 2008 to pay the Total:47,570,350 May 8, 2008
December 15, 2008 dividend By Proxy: 47,570,350 Spokane, WA
VOTING SECURTIES
4. Number of votes as of (date):12/4/2008
¡Line Name (Title) and Address of Security Holder Total Votes Common Stock Preferred Stock Other
No.(a)(b)(c)(d)(e)
5 TOTAL votes of all votig securities 53,026,750 53,026,750
6 TOTAL number of securty holders 12,888 12,888
7 TOTAL votes of seurty holders listed below 490,297 490,297
8
9 Gar Ely, Libert Lake, WA 162,858 162,858
10 DBH Propertes LP, Coeur d'Alene, il 77,646 77,646
II Gar Gail Elv, Libert Lae, WA 65,218 65,218
12 Margaret Ane Brosnan, Akon, OH 55,000 55,000
13 Alfred C. Glassell, Jr., Houston, TX 30,028 30,028
14 Kav Kobavashi, Los Angeles, CA 22,092 22,092
15 Jack W. Gustavel, Coeur d'Alene, il 21,207 21,207
16 Ernest C. Gosnay, Jr. & Marie K Gosnay TR, Spokane, WA 20,011 20,OLL
17 Robert Eugene Young, Washougal, WA 20,000 20,000
18 Freenck W. Schott TR, Santa Monica, CA 16,237 16,237
19
20
.
FERC FORM NO.2 (ED 12-96)Page 107
This Report Is:
(1 ) I2 An Onginal
(2) 0 A Resubmission
1M ORTANT CHANGES DURING THE QUARTERl EAR
Give partculars (details) conceming the matters indicated below. Make the statements
"explicit and precise, and number them in
accordance with the inquines. 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 nghts: Descnbe the actual consideration given therefore and state from whom the
frnchise nghts 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 authonzation.
3. Purchase or sale of an operating unit or system: Give a bnef descnption of the propert, and of the transactions relating thereto,
and reference to Commission authorization, if any was required. Give date journal entnes called for by the Uniform System of Accounts
were submitted to the Commission.
4. Importnt 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 authonzation.
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 authonzation, 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, penod 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 matunty of one year or less. Give reference to FERC or State Commission authonzation, as
appropnate, 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 dunng the year.
9. State bnefly the status of any matenally important legal proceedings pending at the end of the year, and the results of any such
proceedings culminated dunng the year.
10. Descnbe briefly any matenally important transactions of the respondent not disclosed elsewhere in this report in which an offcer,
director, security holder reported on Page 106, voting trustee, associated company or known associate of any of these persons was a
part or in which any such person had a matenal 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. Descnbe fully any changes in offcers, directors, major secunty holders and voting powers of the respondent that may have
occurred dunng the reporting penod.
14. In the event that the respondent participates in a cash management program(s) and its propnetary capital ratio is less than 30
percent please describe the significant events or transactions causing the propnetary 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 affliated companies through a
cash management program(s). Additionally, please describe plans, if any to regain at least a 30 percent propnetary ratio.
Name of Respondent
Avista Corporation
Date of Report Year/Penod of Report
End of 2008/Q404/16/2009
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 YearlPeriod of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/1612009 2008/04
IMPORTANT CHANGES DURING THE OUARTERIEAR (Continued)
1. ~one2. ~one
3. ~one4. ~one5. ~one
6. Avista Receivables Corporation (ARC) is a wholly owned, bankptcy-remote subsidiar of Avista Corp.
formed for the purose of acquirng or purchasing interests in certain accounts receivable, both biled and unbiled, of the
Company. On March 14,2008, Avista Corp., ARC and a third-party financial institution amended a Receivables
Purchase Agreement. The most significant amendment extended the termination date to March 13, 2009. Under the
Receivables Purchase Agreement, ARC can sell without recourse, on a revolving basis, up to $85.0 milion of those
receivables. ARC is obligated to pay fees that approxiate the purchaser's cost of issuing commercial paper equal in
value to the interests in receivables sold. The amount of such fees is included in other operating expenses of A vista
Corp. The Receivables Purchase Agreement has financial covenants, which are substatially the same as those of Avista
Corp. 's $320.0 millon commtted line of credit. As of December 31,2008, ARC had the abilty to sell up to $85.0
milion of receivables and there was $ 1 7.0 milion in accounts receivable sold under ths revolving agreement, a decrease
from the $85.0 milion available and sold as of December 31, 2007.
The Company has a committed line of credit agreement with various bans in the total amount of $320.0
millon with an expiration date of April 5, 2011. Under the credit agreement, the Company can request the issuance of up
to $320.0 millon in letters of credit. The Company had $250.0 millon of borrowings outstanding as of December 31,
2008 and no borrowings outstanding as of December 31,2007. Total letters of credit outstanding were $24.3 milion as
of December 31, 2008 and $34.8 millon as of December 31, 2007. The committed line of credit is secured by $320.0
milion of non-transferable First Mortgage Bonds of the Company issued to the agent ban 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 commtted
line of credit.
On ~ovember 26, 2008, the Company entered into a 364-day committed line of credit agreement with
varous bans in the total amount of $200.0 millon with an expiration date of~ovember 24,2009. The Company had no
borrowings outstanding as of December 31, 2008. The committed line of credit is secured by $200.0 milion 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.
This credit facility was approved by the respective regulatory commissions as follows: WUC (Docket ~o. UE-081842);
IPUC (A VU-U-08-02); and OPUC (N/A).
On April 3,2008, the Company issued $250.0 millon of 5.95 percent First Mortgage Bonds due in 2018.
The net proceeds from the issuance of $249.2 milion (net of issuance discount and before Avista Corp.'s expenses),
together with other available fuds, were used to pay the $272.9 milion of9.75 percent Unsecured Senior ~otes that
matured on June 1, 2008. This debt issuance was approved by the respective regulatory commissions as follows: WUC
(Docket ~o. U-080182 Order ~o. 1); IPUC (Case ~o. A VU-U-08-01 Order ~o. 30509); and OPUC (Docket UF 4246
Order~o. 08-143).
On December 16,2008, the Company issued $30.0 millon of7.25 percent First Mortgage Bonds due in
2013. The net proceeds from the issuance of $29.9 millon (net of placement agent fees and before Avista Corp.'s
expenses) were used to repay $25.0 millon of medium term notes that matured on December 10, 2008 and repay a
portion of the borrowings outstanding under the Company's $320.0 milion committed line of credit. Ths debt issuance
was approved by the respective regulatory commissions as follows: WUC (Docket ~o. UE-080182); IPUC
(A VU-U-08-03); and OPUC (O 4246).
On December 31,2008, $66.7 milion of the City of Forsyt, Montana Pollution Control Revenue Refunding
Bonds, Series 1999A (Avista Corporation Colstrip Project) due 2034 were remarketed. Avista Corp. purchased these
Pollution Control Bonds and expects that at a later date, subject to market conditions, these bonds wil be remarketed to
unaffliated investors or refuded by a new issue. Although A vista Corp. is now the holder of these Pollution Control
Bonds, the bonds wil not be cancelled but wil remain outstanding under the City of Forsyth's indentue. However, so
I FERC FORM NO.2 (ED. 12-96) Page 109.1
Name of Respondent This Report is:Date of Report Year/Period of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
IMPORT ANT CHANGES DURING THE QUARTERIEAR (Continued)
long as Avista Corp. is the holder, the bonds wil not be reflected as an asset or a liability on Avista Corp.'s Consolidated
Balance Sheet. This debt transaction was approved by the respective regulatory commissions as follows: WUTC (Docket
No. UE-081859); IPUC (AVU-U-08-03); and OPUC (U 4253).
On December 30, 2008, the City of Forsyt, Montaa issued $17.0 millon of its Pollution Control Revenue
Refuding Bonds, Series 2008 (Avista Corporation Colstrp Project) due 2034 on behalf of Avista Corp. The proceeds of
these bonds were used to refud $17.0 millon of Pollution Control Revenue Refudig Bonds, Series 1999B (Avista
Corporation Colstrp Project) issued by the City of Forsyt, Montana on behalf of Avista Corp. These bonds are included
in the current portion of long-term debt because they are subject to purchase at any time at the option ofthe bond holder.
This debt transaction was approved by the respective regulatory commssions as follows: WUC (Docket No.
UE-081859); IPUC (A VU-U-08-03); and OPUC (U 4253).
7. At the May 8, 2008 Anual Meeting, the shareholders of A vista Corporation approved a proposal for an
amendment of the Restated Aricles of Incorporation to change from a plurality voting standard to a majority voting
standard in uncontested elections of directors and to eliminate cumulative voting.-- For further details, see A vista
Corporation's Definitive Proxy Statement fied with the Securties and Exchange Commission on March 31, 2008.
As a result of the amendment to the Restated Aricles of Incorporation, a conforming amendment was made
to the bylaws of Avista Corporation on May 9, 2008. Specifically, section 5 of Aricle II and Section 11 of Aricle II of
the Bylaws of A vista Corporation was changed to eliminate references to cumulative voting.
8. Average anual wage increases were 3.4% for non-exempt employees effective March 1, 2008. Average
anual wage increases were 3.9% for exempt employees effective March 1,2008. Average anual wage increases were
7.4% for offcers effective March 1, 2008. Certain bargaining unit employees received increases ranging from 3.0% to
3.5% effective in March and April 2008.
9. Reference is made to Note 25 of the Notes to Financial Statements, page 123 ofthis Report.
10. None
1 i. Reserved
12. See page 123 of this Report.
13. Gary G. Ely, Chaian of the Board and Chief Executive Offcer of Avista Corp., retired from the Company and
the board, effective December 31, 2007. The ,Company's board of directors elected Scott L. Morrs to the positions of
Chaian of the Board, President and Chief Executive Officer of Avista Corp., effective Janua 1, 2008.
On Februar 15, 2008, An Wilson was appointed Vice President of Fince and Treasurer.
On Februar 15,2008, the Board of Directors appointed Brian W. Dunham to serve as a director on the board
effective March 1, 2008. Mr. Dunham is the president and chief executive officer of Northwest Pipe Company, which
manufactures welded steel water transmission lines.
On Februar 15, 2008, Lura J. Powell provided notification to Avista Corp. that she wil not stand for re-election
to the board when her term expires in May 2008 to focus on her professional commitments in technology and healthcare.
Mark Thies joined the Company as Senior Vice President and Chief Financial Offcer in September 2008. The
Chief Financial Officer position was previously held by Malyn Malquist. Malyn Malquist stayed on with the Company
as Executive Vice President and then retired from the Company effective March 31,2009.
On December 8, 2008, Dennis Vermilion was appointed President of Avista Utilities effective January 1,2009.
He wil remain Vice President of Avista Corp.
On December 8, 2008, Richard Storro was appointed Vice President of Energy Resources.
14. Proprietar capital is not less than 30 percent.
I FERC FORM NO.2 (ED. 12-96)Page 109.2
Name of Respondent This Report Is:Date of Report Year/Period of Report
Avista Corporation (1 )IZ An Original (Mo,Dal Yr)
(2)D A Resubmission 04/16/2009 End of 2008/Q4
COMPARATIVE BALANCE SHEET (ASSETS AND OTHER DEBITS)
Line Current Year Prior Year
Ref.End of QuarterlYear End Balance
No.Title of Account Page No.Balance 12/31
(a)(b)(c)(d)
1 UTILITY PLAT
2 Utilty Plant (101-106, 114)200-201 3,340,068,19S 3,131,916,272
3 Construction Work in Progress (107)200-201 75,568,224 75,679,838
4 TOTAL Utility Plant (Enter Total of lines 2 and 3)3,415,636,422 3,207,596,110
5 (Less) Accum. Provo for Depr. Amort. Depl. (108,110,111,115)200-201 1,142,578,137 1,090,037,407
6 Net Utilty Plant (Enter Total of line 4 less 5)2,273,058,285 2,117,558,703
7 Nuclear Fuel in Process of Ref., Conv.,Enrich., and Fab. (120.1)202-203 0 0
8 Nuclear Fuel Materials and Assemblies-Stock Accunt (120.2)0 0
9 Nuclear Fuel Assemblies in Reactor (120.3)0 0
10 Spent Nuclear Fuel (120.4)0 0
11 Nuclear Fuel Under Capital Leases (120.6)C 0
12 (Less) Accum. Provo for Amort. of Nucl. Fuel Assemblies (120.5)202-203 0 0
13 Net Nuçlear Fuel (Enter Total of lines 7-11 less 12)0 0
14 Net Utilty Plant (Enter Total of lines 6 and 13)2,273,058,285 2,117,558,703
15 Utility Plant Adjustments (116)122 0 0
16 Gas Stored Underground - Noncurrent (117)0 0
17 OTHER PROPERTY AND INVESTMENTS
18 Nonutility Propert (121)4,991,551 4,670,595
19 (Less) Accum. Provo for Depr. and Amort. (122)890,639 897,192
20 Investments in Associated Companies (123)13,903,000 13,903,000
21 Investment in Subsidiary Companies (123.1)224-225 77,487,962 71,371,272
22 (For Cost of Account 123.1, See Footnote Page 224, line 42)
23 Noncurrent Portion of Allowances 228-229 0 0
24 Other Investments (124)26,240,546 28,691,550
25 Sinking Funds (125)0 0
26 Depreciation Fund (126)0 0
27 Amortization Fund - Federal (127)0 0
28 Other Specal Funds (128)10,234,544 15,878,558
29 Special Funds (Non Major Only) (129)0 0
30 Long-Term Portion of Derivative Assets (175)49,312,59€55,312,881
31 Long-Term Porton of Derivative Assets - Hedges (176)C 0
32 TOTAL Other Propert and Investments (Lines 18-21 and 23-31)181,279,56C 188,930,664
33 CURRENT AND ACCRUED ASSETS
34 Cash and Working Funds (Non-major Only) (130)0 0
35 Cash (131)1,674,372 5,264,119
36 Special Deposits (132-134)1,600,000 5,668,267
37 Working Fund (135)619,853 679,537
38 Temporary Cash Investments (136)2,684,444 2,608,103
39 Notes Receivable (141)63,451 0
40 Customer Accounts Receivable (142)207,867,900 87,238,080
41 Other Accounts Receivable (143)6,188,617 9,920,307
42 (Less) Accum. Provo for Uncollectible Acct.-Credit (144)5,844,603 2,965,676
43 Notes Receivable from Associated Companies (145)0 0
44 Accounts Receivable from Assoc. Companies (146)120,021 502,535
45 Fuel Stock (151)227 3,673,039 2,213,923
46 Fuel Stock Expenses Undistributed (152)227 0 0
47 Residuals (Elec) and Extracted Products (153)227 0 0
48 Plant Materials and Operating Supplies (154)227 17,455,835 17,365,306
49 Merchandise (155)227 0 0
50 Other Materials and Supplies (156)227 0 0
51 Nuclear Materials Held for Sale (157)202-203/227 0 0
52 Allowances (158.1 and 158.2)228-229 0 0
FERC FORM NO.2 (REV. 12-03) Page 110
Name of Respondent This Report Is:Date of Report YearlPeriod of Report
Avista Corporation (1 )iz An Original (Mo,Da, Yr)
(2)0 A Resubmission 04/16/2009 End of 2008/Q4
COMPARATIVE BALANCE SHEET (ASSETS AND OTHER DEBITS¡Continued)
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)
53 (Less) Noncurrent Porton of Allowances 0 0
54 Stores Expense Undistributed (163)227 0 0
55 Gas Stored Underground - Current (164.1)30,720,371 13,414,238
56 Liquefied Natural Gas Stored and Held for Processing (164.2-164.3)0 0
57 Prepayments (165)8,415,670 6,38,702
58 Advances for Gas (166-167)0 0
59 Interest and Dividends Receivable (171)10,934 0
60 Rents Receivable (172)646,271 509,924
61 Accrued Utilty Revenues (173)0 0
62 Miscellaneous Current and Accrued Assets (174)194,919 6,153,636
63 Derivative Instrument Assets (175)60,546,323 67,390,448
64 (Less) Long-Term Portion of Denvative Instrument Assets (175)49,312,596 55,312,881
65 Denvative Instrument Assets - Hedges (176)874,944 0
66 (Less) Long-Term Portion of Denvative Instrment Assets - Hedges (176 0 0
67 Total Current and Accrued Assets (Lines 34 through 66)288,199,765 167,088,568
68 DEFERRED DEBITS
69 Unamortized Debt Expenses (181)15,852,599 11,576,174
70 Extraordinary Propert Losses (182.1)230 0 0
71 Unrecovered Plant and Regulatory Study Costs (182.2)230 C 0
72 Other Regulatory Assets (182.3)232 455,580,547 281,620,776
73 Prelim. Survey and Investigation Charges (Electnc) (183)3,088,816 234,518
74 Preliminary Natural Gas Survey and Investigation Charges 183.1)0 0
75 Other Preliminary Survey and Investigation Charges (183.2)0 0
76 Clearing Accounts (184)0 0
77 Temporary Facilties (185)0 0
78 Miscellaneous Deferred Debits (186)233 32,008,980 40,642,265
79 Def. Losses from Disposition of Utilty PIt. (187)0 0
80 Research, Devel. and Demonstration Expend. (188)352-353 0 0
81 Unamortized Loss on Reaquired Debt (189)17,151,84 20,965,705
82 Accmulated Deferred Income Taxes (190)234 131,055,525 90,823,103
83 Unrecovered Purchased Gas Costs (191)-18,646,016 2,374,110
84 Total Deferred Debits (lines 69 through 83)636,092,295 448,236,651
85 TOTAL ASSETS (lines 14-16,32,67, and 84)3,378,629,905 2,921,814,586
FERC FORM NO.2 (REV. 12-03)Page 111
Name of Respondent This Report is:Date of Report YearlPeriod of Report
Avista Corpration (1 )l!An Original (mo, da, yr)
(2)0 A Rresubmission 04/16/2009 end of 2008/Q4
COMPARATIVE BALANCE SHEET (LIABILITIES AND OTHER CREDITS)
Line Current Year Prior Year
No.Ref.End of QuarterlY ear End Balance
Title of Accunt Page No.Balance 12/31
(a)(b)(c)(d)
1 PROPRIETARY CAPITAL
2 Common Stock Issued (201)250-251 755,903,1H 727,945,794
3 Preferred Stock Issued (204)250-251 (0
4 Capital Stock Subscribed (202, 205)252 (0
5 Stock Liabilty for Conversion (203, 206)252 (0
6 Premium on Capital Stock (207)252 0 0
7 Other Paid-In Capital (208-211)253 19,170,532 2,281,868
8 Installments Received on Capital Stock (212)252 0 0
9 (Less) Discount on Capital Stock (213)254 0 0
10 (Less) Capital Stock Expense (214)254 87,39A 3,294,916
11 Retained Earnings (215, 215.1, 216)118-119 253,478,332 221,313,566
12 Unappropriated Undistrbuted Subsidiary Earnings (216.1)118-119 -25,488,891 -14,672,673
13 (Less) Reaquired Capital Stock (217)250-251 0 0
14 Noncorporate Proprietorship (Non-major only) (218)0 0
15 Accumulated Other Comprehensive Income (219)122(a)(b)-6,092,318 -19,607,486
16 Total Proprietary Capital (lines 2 through 15)996,883,37A 913,966,153
17 LONG-TERM DEBT
18 Bonds (221)256-257 824,970,979 671,733,175
19 (Less) Reaquired Bonds (222)256-257 0 0
20 Advances from Associated Companies (223)256-257 114,603,000 114,603,000
21 Other Long-Term Debt (224)256-257 0 273,010,231
22 Unamortized Premium on Long-Term Debt (225)239,850 248,733
23 (Less) Unamortized Discount on Long-Term Debt-Debit (226)1,752,25€1,328,472
24 Total Long-Term Debt (lines 18 through 23)938,061,573 1,058,2.66,667
25 OTHER NONCURRENT LIABILITIES
26 Obligations Under Capital Leases - Noncurrent (227)0 75,206
27 Accumulated Provision for Propert Insurance (228.1)C 0
28 Accumulated Provision for Injuries and Damages (228.2)1,579,821 344,000
29 Accmulated Provision for Pensions and Benefits (228.3)184,587,85C 90,554,881
30 Accumulated Miscellaneous Operating Provisions (228.4)2,936,173 1,826,000
31 Accumulated Provision for Rate Refunds (229)C 0
32 Long-Term Portion of Derivative Instrument Liabilties 7,140,857 1,899,098
33 Long-Term Portion of Derivative Instrment Liabilties - Hedges 0 10,501,880
34 Asset Retirement Obligations (230)4,208,327 3,990,011
35 Total Other Noncurrent Liabilties (lines 26 through 34)200,453,028 109,191,076
36 CURRENT AND ACCRUED LIABILITIES
37 Notes Payable (231 )250,000,000 0
38 Accounts Payable (232)153,032,40E 114,760,498
39 Notes Payable to Associated Companies (233)2,854,178 2,182,637
40 Accunts Payable to Associated Companies (234)737,71C 600,647
41 Customer Deposits (235)6,979,171 6,331,722
42 Taxes Accrued (236)262-263 6,105,571 -4,717,808
43 Interest Accrued (237)10,871,471 12,577,801
44 Dividends Declared (238)0 0
45 Matured Long-Term Debt (239)0 0
FERC FORM NO.2 (rev. 12-03)Page 112
Name of Respondent This Report is:Date of Report Year/Period of Report
Avista Corporation (1 )~An Original (mo, da, yr)
(2)D A Rresubmission 0411612009 end of 2oo81Q4
COMPARATIVE BALANCE SHEET (LIABILITIES AND OTHER CREDIT(Sntinued)
Line
Current Year Prior Year
No.
Ref.End of QuarterlY ear End Balance
Title of Accunt Page No.Balance 12131
(a)(b)(c)(d)
46 Matured Interest (240)0 0
47 Tax Collections Payable (241)0 252
48 Miscellaneous Current and Accrued Liabilties (242)32,188,393 41,016,254
49 Obligations Under Capital Leases-Current (243)75,206 295,029
50 Derivative Instrument Liabilties (244)78,603,554 21,148,085
51 (Less) Long-Term Portion of Derivative Instrument Liabilties 7,140,857 1,899,098
52 Derivative Instrument Liabilties - Hedges (245)0 10,501,880
53 (Less) Long-Term Portion of Derivative Instrument Liabilties-Hedges 0 10,501,880
54 Total Current and Accrued Liabilties (lines 37 through 53)534,306,811 192,296,019
55 DEFERRED CREDITS
56 Customer Advances for Construction (252)1,263,086 1,265,933
57 Accumulated Deferred Investment Tax Credits (255)266-267 373,728 423,036
58 Deferred Gains frm Disposition of Utilty Plant (256)0 0
59 Other Deferred Credits (253)269 24,985,882 18,072,332
60 Other Regulatory Liabilties (254)278 55,429,522 65,481,339
61 Unamortized Gain on Reaquired Debt (257)3,237,373 3,528,194
62 Accum. Deferred Income Taxes-Accel. Amort.(281)272-277 0 0
63 Accum. Deferred Income Taxes-Other Propert (282)334,892,041 320,049,323
64 Accum. Deferred Income Taxes-Other (283)288,743,487 239,274,514
65 Total Deferred Credits (lines 56 through 64)708,925,119 648,094,671
66 TOTAL LIABILITIES AND STOCKHOLDER EQUITY (lines 16,24,35,54 and 65)3,378,629,905 2,921,814,586
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 2008/Q4
(2) nA Resubmission 04/16/2009
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 utilty function; in column (h) the quarter to date amounts for gas utiity, and in Ol 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 utilty, 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 fourt quarter data in columns (e) and (f)
6. Report amounts for accounts 412 and 413, Revenues and Expenses from Utilty Plant Leased to Others, in another utilty columnin a similar manner to
a utiity 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 accunt 414, Other Utilty 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 404.1,404.2,404.3,407.1 and 407.2.
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.QuarterNear QuarterNear No 4th Quarter No 4th Quarter
(a)(b)(c)(d)(e)(f)
1 UTILITY OPERATING INCOME
2 Operating Revenues (400)300-301 1,657,671,994 1,321,662,326
3 Operating Expenses
4 Operation Expenses (401)320-323 1,278,636,823 965,325,057
5 Maintenance Expenses (402)320-323 47,636,921 45,512,775
6 Depreciation Expense (403)336-337 82,388,834 81,802,514
7 Depreciation Expense for Asset Retirement Costs (403.1)336-337
8 Amort. & Depl. of Utilty Plant (404-405)336-337 7,905,829 6,738,44
9 Amort. of Utilty Plant Acq. Adj. (406)336-337 99,047 99,047
10 Amort. Propert Losses, Unrecov Plant and Regulatory Study Cost (407)
11 Amort. of Conversion Expenses (407)
12 Regulatory Debits (407.3)382,274 2,979,998
13 (Less) Regulatory Credits (407.4)8,388,441 8,618,156
14 Taxes Other Than Income Taxes (408.1)262-263 72,057,352 72,43,295
15 Income Taxes - Federal (409.1)262-263 3,249,258 22,447,987
16 - Other (409.1)262-263 53,201 520,211
17 Provision for Deferred Income Taxes (410.1)234, 272.277 42,600,284 12,026,706
18 (Less) Provision for Deferred Income Taxes-Cr. (411.1)234, 272-277 4,970,670 4,122,957
19 Investment Tax Credit Adj. - Net (411.4)266 -49,308 -49,308
20 (Less) Gains from Disp. of Utility Plant (411.6)
21 Losses from Disp. of Utilty Plant (411.7)
22 (Less) Gains from Disposition of Allowances (411.8)
23 Losses from Disposition of Allowances (411.9)
24 Accretion Expnse (411.10)
25 TOTAL Utility Operating Expenses (Enter Total of lines 4 thru 24)1,521,601,404 1,197,105,613
26 Net Uti! Oper Inc (Enter Tot line 2 less 25) Carry to Pg117,line 27 136,070,590 124,556,713
FERC FORM NO. 2/3-0 (REV. 02-04)Page 114
This ~ort Is: Date of Report
(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/16/2009
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 utilty'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 utilty 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/quarter's figures are different from that reported in prior reports.
15. If the columns are insuffcient for reporting additional utilty departments, supply the appropriate account titles report the information in a footnote to
this schedule.
Name of Respondent
Avista Corporation
Year/Period of Report
End of 2008/Q4
ELECTRIC UTILITY
Current Year to Date Previous Year to Date
(in dollars) (in dollars)(g) (h)
GAS UTILITY
Current Year to Date Previous Year to Date
(in dollars) (in dollars)0) U)
OTHER UTILITY
Current Year to Date Previous Year to ate
(in dollars) (in dollars)(k) (I)
Line
No.
811,918,216
109,467,920
639,011,602
105,119,951
709,683,188
26,602,670
558,094,011
19,436,762
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
624,698,493 467,293,942 653,938,330 498,031,115
40,308,817 37,501,902 7,328,104 8,010,873
67,721,188 64,517,110 14,667,646 17,285,404
6,448,003 5,686,773 1,457,826 1,051,671
99,047 99,047
153,132 337,368 229,142 2,642,630
6,730,732 7,499,030 1,657,709 1,119,126
47,356,209 46,412,373 24,701,143 26,030,922
143,777 14,193,471 3,105,481 8,254,516
-192,188 378,906 245,389 141,305
36,623,690 13,472,601 5,976,594 -1,445,895
4,711,220 3,382,861 259,450 740,096
-49,308 -49,308
FERC FORM NO.2 (ED. 12-96)Page 115
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo. Da, Yr)End of 2008/Q4
(2) 0 A Resubmission 04/16/2009
STA EMENT OF INCOME FOR THE YEAR (continued)
Line TOTAL Current 3 Months pnor 3 Months
No.Ended Ended
(Ret)Quarterl Only Quarterly Only
Title of Account Page No.Current Year Previous Year No 4th Quarter No 4th Quarter
(a)(b)(c)(d)(e)(f)
27 Net Utility Operating Income (Carried forward from page 114)136,070,590 124,556,713
28 Oter 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)i
33 Revenues From Nonutilit Operations (417)
34 (Less) Expenses of Nonutility Operations (417.1)3,869,058 4,477,623
35 Nonoperating Rental Income (418)7,726 -18,512
36 Equity in Earnings of Subsidiary Companies (418.1)119 4,123,038 -4,595,749
37 Interest and Dividend Income (419)10,085,671 7,743,889
38 Allowance for Other Funds Used During Construction (419.1)5,692,491 4,736,330
39 Miscellaneous Nonoperating Income (421)16,00
40 Gain on Disposition of Propert (421.1)810,694 257,380
41 TOTAL Oter Income (Enter Total of lines 31 thru 40)16,866,562 3,645,715
42 Other Income Deductions
43 Loss on Disposition of Properl (421.2)2,289,978
44 Miscellaneous Amortzation (425)340 1,110,571 1,110,572
45 Donations (426.1)340 956,059 622,859
46 Life Insurance (426.2)2,100,235 2,557,490
47 Penalties (426.3)138,152 37,600
48 Exp. for Certain Civic, Poliical & Related Activites (426.4)1,211,097 1,097,891
49 Other Deductons (426.5)-1,891,457 3,799,017
50 TOTAL Other Income Deductions (Total of lines 43 thru 49)3,624,657 11,515,407
51 Taxes Applic. to Oter Income and Deductions
52 Taxes Other Than Income Taxes (408.2)262-263 547,911 251,464
53 Income Taxes-Federal (409.2)262-263 2,415,034 149,939
54 Income Taxes-Other (409.2)262-263 -288,122 -404,584
55 Provision for Deferred Inc. Taxes (410.2)234, 272-277 1,523,886 -257,145
56 (Less) Provision for Deferred Income Taxes-Cr. (411.2)234, 272-277 3,294,942 4,052,315
57 Investment Tax Credit Adj.-Net (411.5)
58 (Less) Investment Tax Credits (420)
59 TOTAL Taxes on Other Income and Deductions (Total of lines 52-58)903,767 -4,312,641
60 Net Other Income and Deductions (Total of lines 41, 50, 59)12,338,138 -3,557,051
61 Interest Charges
62 Interest on Long-Term Debt (427)62,954,659 69,538,504
63 Amort. of Debt Disc. and Expense (428)922,381 1,063,487
64 Amortization of Loss on Reaquired Debt (428.1)3,759,437 5,290,891
65 (Less) Amort. of Premium on Debt-Credit (429)8,885 8,885
66 (Less) Amortzation of Gain on Reaquired Debt-Credit (429.1)
67 Interest on Debt to Assoc. Companies (430)340 6,218,511 7,605,326
68 Other Interest Expense (431)340 5,554,756 2,899,617
69 (Less) Allowance for Borrowed Funds Used During Constructon-Cr. (432)4,611,851 3,864,363
70 Net Interest Charges (Total of lines 62 thru 69)74,789,008 82,524,577
71 Income Before Extraordinary Items (Total of lines 27, 60 and 70)73,619,720 38,475,085
72 Extraordinary Items
73 Extraordinary Income (434)
74 (Less) Extaordinary Deductions (435)
75 Net Extaordinary Items (Total of line 73 less line 74)
76 Income Taxes-Federal and Other (409.3)262-263
77 Extaordinary Items After Taxes (line 75 less line 76)
78 Net Income (Total of line 71 and 77)73,619,720 38,75,085
FERC FORM NO. 2/3-Q (REV. 02-04)Page 117
This Page Intentionally Left Blank
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) Fi A Resubmission 04/16/2009
STATEMENT OF RETAINED EARNINGS
1. Do not report Lines 49-53 on the quarterly version.
2. Report all changes in appropriated retained eamings, 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 eamings 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 Eamings, 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.
Current Previous
QuarterlYear QuarterlYear
Contra Primary Year to Date Year to Date
Line Item Account Affected Balance Balance
No.(a)(b)(c)(d)
UNAPPROPRIATED RETAINED EARNINGS (Account 216)
1 Balance-Beginning of Period 219,765,445 166,534,217
2 Changes
3 Adjustments to Retained Earnings (Account 439)
4
5 Tax Benefit Received from 401k (14,870)
6 Dividends received from Subsidiaries 48,260,105
;7 Prior period adjustment for benefit plan restatement (2,471,138)
8 Stock compensation dividend adjustment 15,913
9 TOTAL Credits to Retained Earnings (Acct. 439)45,790,010
10
11 Stock Options Exercised
12 Preferred Series K Reclass (1,334,004)
13 Debt Repurchase Adjustment (4,392,647)
14 Subsidiary Federal Tax Credits (Avista Energy)-796,180
15 TOTAL Debits to Retained Earnings (Acct. 439)-796,180 (5,726,651)
16 Balance Transferred from Income (Account 433 less Account 418.1)69,496,682 43,070,834
17 Appropriations of Retained Earnings (Acct. 436)
18
19
20
21
22 TOTAL Appropriations of Retained Earnings (Acet. 436)
23 Dividends Declared-Preferred Stock (Account 437)
24
25
26
27
28
29 TOTAL Dividends Declared-Preferred Stock (Acct. 437)
30 Dividends Declared-Common Stock (Accunt 438)
31 -37,070,823 (31,450,517)
32
33
34
35
36 TOTAL Dividends Declared-Common Stock (Acct. 438)~37,070,823 (31,450,517)
37 Transfers from Acct 216.1, Unapprop. Undistrib. Subsidiary Earnings 535,087 1,547,552
38 Balance - End of Period (Total 1,9,15,16,22,29.36,37)251.930,211 219,765,445
FERC FORM NO. 213-Q (REV. 02-04)Page 118
Name of Respondent
Avista Corporation
Year/Period of Report
End of 2008/Q4
This Report Is: Date of Report
(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/16/2009
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 unappropnated
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 appropnated. If such reservation or appropriation is to be
recurrent, state the number and annual amounts to be reserved or appropnated as well as the totals eventually to be accumulated.
9. If any notes appeanng in the report to stockholders are applicable to this statement, include them on pages 122-123.
Contra PrimaryLine Item Account Affected~. W ~
APPROPRIATED RETAINED EARNINGS (Account 215)
39
40
41
42
43
44
45 TOTAL Appropriated Retained Earnings (Account 215)
APPROP. RETAINED EARNINGS - AMORT. Reserve, Federal (Account 215.1)
46 TOTAL Approp. Retained Earnings-Amort. Reserve, Federal (Acct. 215.1)
47 TOTAL Approp. Retained Earnings (Acct. 215, 215.1) (Total 45,46)
48 TOTAL Retained Earnings (Acct. 215, 215.1, 216) (Total 38, 47) (216.1)
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 418.1)
51 (Less) Dividends Received (Debit)
52 Subsidiary Expense & Mise Subs Equity Comp
53 Balance-End of Year (Total lines 49 thru 52)
Current
QuarterlYear
Year to Date
Balance
(c)
Previous
QuarterlY ear
Year to Date
Balance
(d)
1,548,121 1,548,121
1,548,121 1,548,121
-14,939,262
-25,488,897
51,109,032
4,595,749)
48,260,105
12,925,851)
14,672,673)
-14,672,673
4,123,038
FERC FORM NO. 2!/3-Q (REV. 02-04)Page 119
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) Fi A Resubmission 04/16/2009
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) Identif separately such items as
investments, fixed assets, intangibles, etc.
(2) Information about noncash Investing and financing activities must be provided in th Notes to th Financial statements. Also provide a reconcilation between .Cash and Cash
Equivalents at End of Period. with related amounts on th Balanc Sheet
(3) Operating Activities - Oter. Include gains and losses pertining to operating actites only. Gains and losses pertaining to investing and financing actvities should be reported
in thse activities. Show in th Notes to the Financials the amounts of interest paid (net of amount capitlizd) and income taxes paid.
(4) Investing Actvities: Include at Oter (line 31) net cash outow to acquire othr companies. Provide a reconciliation of assets acquired wih liabilties assumed in the Notes to
the Financial Statements. Do not include on this statement the dollar amount of leases capitliz per the USofA General Instruction 20; instead provide a reconcilation of the
dollar amount of leases capitalized with the plant cost
Line Description (See Instrction NO.1 for Explanation of Codes)Current Year to Date Previous Year to Date
No.QuarterlYear QuarterlY ear
(a)(b)(c)
1 Net Cash Flow from Operating Activities:
2 Net Income (Line 78(c) on page 117)73,619,720 38,475,085
3 Noncash Charges (Credits) to Income:
4 Depreciation and Depletion 90,390,864 88,540,958
5 Amortzation of deferred power and natural gas costs 45,835,653 19,629,891
6 Amortzation of debt expense 4,672,935 6,345,495
7 Amortization of investment in exchange power 2,450,031 2,450,030
8 Deferred Income Taxes (Net)41,798,683 4,003,423
9 Investment Tax Credit Adjustment (Net)-49,308 -49,308
10 Net (Increase) Decrease in Receivables -116,961,581 1,881,714
11 Net (Increase) Decrease in Inventory -18,855,778 -3,940,327
12 Net (Increase) Decrease in Allowances Inventory
13 Net Increase (Decrease) in Payables and Accrued Expenses 2,228,853 -28,529,359
14 Net (Increase) Decrease in Other Regulatory Assets -20,468,183 -8,395,908
15 Net Increase (Decrease) in Other Regulatory Liabilties 2,372,800 1,888,830
16 (Less) Allowance for Other Funds Used During Construction 5,692,491 4,736,330
17 (Less) Undistributed Earnings from Subsidiary Companies 4,123,038 -4,595,749
18 Other (provide details in footnote):601,532 696,571
19 Write-down of asset 2,289,978
20 Change in other current assets and liabilties -10,063,226 -2,782,552
21 Net change in receivables allowance 2,878,927 235,324
22 Net Cash Provided by (Used in) Operating Activities (Total 2 thru 21)90,636,393 122,599,264
23
24 Cash Flows from Investment Activities:
25 Construction and Acquisition of Plant (including land):
26 Gross Additions to Utilty Plant (less nuclear fuel)-219,796,264 -196,772,585
27 Gross Additions to Nuclear Fuel
28 Gross Additions to Common Utilty Plant
29 Gross Additions to Nonutility Plant .
30 (Less) Allowance for Other Funds Used During Construction
.
31 Other (provide details in footnote):
32
33
34 Cash Outfows for Plant (Total of lines 26 thru 33)-219,796,264 -196,772,585
35
36 Acquisition of Other Noncurrent Assets (d)
37 Proceeds from Disposal of Noncurrent Assets (d)7,998,322
38
39 Investments in and Advances to Assoc. and Subsidiary Companies
40 Contributions and Advances from Assoc. and Subsidiary Companies 1,191,118 170,364,287
41 Disposition of Investments in (and Advances to)
42 Associated and Subsidiary Companies
43
44 Purchase of Investment Securities (a)
45 Proceeds from Sales of Investment Securities (a)
FERC FORM NO.2 (ED. 12-96)Page 120
Name of Respondent
Avista Corporation
This ~ort Is:
(1) ~An Original
(2) A Resubmission
STATEMENT OF CASH FLOWS
Date of Report
(Mo, Da, Yr)
04/16/2009
YearlPeriod of Report
End of 2008/Q4
(1) Codes to be used:(a) Net Proceeds or Payments;(b )Bonds. debentures and other long-term debt; (c) Include commercial paper; and (d) Identif separately such items as
investments. fixed assets, intangibles, etc.
(2) Information abou noncash investing and financing activitis must be provided in the Notes to the Anancial statements. Also provide a reonciliation between "Cash and Cash
Equivalents at End of Period" with related amounts on the Balance Sheet.
(3) Operating Activities _ Oter: Include gains and losses pertining to operating activities only. Gains and losses pertaining to investing and financing activities should be reportd
in those actvities. Show in the Notes to the Anancals the amounts of interest paid (net of amount capitlized) and income taxes paid.
(4) Investing Activities: Include at Other (line 31) net cash outow to acquire other copanies. Provide a recncilation of assets acquired wih liabilites assumed in the Notes to
the Anancial Statements. Do not include on this statement the dollar amount of leases capitlized per the USofA General Instruction 20; instead provide a reconcilation of the
dollar amount of leases capitalized wih the plant cost.
(a)
Current Year to Date
QuarterlY ear
(b)
Previous Year to Date
Quarter/Year
(c)
Line
No.
Description (See Instruction NO.1 for Explanation of Codes)
46 Loans Made or Purchased
47 Collections on Loans
48
49 Net (Increase) Decrease in Receivables
50 Net (Increase) Decrease in Inventory
51 Net (Increase) Decrease in Allowances Held for Speculation
52 Net Increase (Decrease) in Payables and Accrued Expenses
53 Other (provide details in footnote):
54 Changes in other propert and investments
55
56 Net Cash Provided by (Used in) Investing Activities
57 Total of lines .34 thru 55)
58
59 Cash Flows frm Financing Activities:
60 Proceeds from Issuance of:
61 Long-Term Debt (b)
62 Preferred Stock
63 Common Stock
64 Other (provide details in footnote):
65
66 Net Increase in Short-Term Debt (c)
67 Other (provide details in footnote):
68
69
70 Cash Provided by Outside Sources (Total 61 thru 69)
71
72 Payments for Retirement of:
73 Long-term Debt (b)
74 Preferred Stock
75 Common Stock
76 Other (provide details in footnote):
77 Long-term debt and short-term borrowing issuance costs
78 Net Decrease in Short-Term Debt (c)
79 Cash paid for settlement of interest rate swap agreements
80 Dividends on Preferred Stock
81 Dividends on Common Stock
82 Net Cash Provided by (Used in) Financing Activities
83 (Total of lines 70 thru 81)
84
85 Net Increase (Decrease) in Cash and Cash Equivalents
86 (Total of lines 22,57 and 83)
87
88 Cash and Cash Equivalents at Beginning of Period
89
90 Cash and Cash Equivalents at End of period
6,013 17,967
2,006,496 -2,942,625
296,165,000
28,564,671 4,977,331
250,000,000
574,729,671 4,977,331
-401,855,029 -26,156,580
-26,250,000
-5,023,987 -164,700
-4,000,000
-16,395,000
-37,070,823 -31,450,517
4,978,669 8,551,759
FERC FORM NO.2 (ED. 12-96)Page 121
Name of Respondent
Avista Corporation
Date of Report Year/Penod of Report
End of 2008/Q4
This Report Is:
(1) (2 An Original
(2) D A Resubmission
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 bnef explanation of
any action initiated by the Intemal Revenue Service involving possible assessment of additional income taxes of material amount, or of
a claim for refund of income taxes of a matenaJ amount initiated by the utility. Give also a bnef explanation of any dividends in arrears
on cumulative preferred stock.
3. For Account 116, Utility Plant Adjustments, explain the ongin of such amount, debits and credits dunng the year, and plan of
disposition contemplated, giving references to Cormmission orders or other authonzations 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
restnctions.
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 3Q disclosures, respondent must provide in the notes suffcient 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 3Q 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 appeanng in the annual report to the stockholders are
applicable and furnish the data required by the above instructions, such notes may be included herein.
04/16/2009
PAGE 122 INTENTIONALLY LEFT BLANK
SEE PAGE 123 FOR REQUIRED INFORMATION.
FERC FORM NO.2 (ED. 12-96)Page 122
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
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 distrbutes electrcity in part of eastern
Washington and nortern Idaho. In addition, Avista Corp. has electrc generatig facilities in western Montaa and nortern Oregon.
A vista Corp. also provides natual gas distrbution servce in par of eastern Washigton and nortern Idao, as well as par of
norteast and southwest Oregon. Avista Capital, Inc. (Avista Capital), a wholly owned subsidiar of Avista Corp., is the parent
company of all of the subsidiary companies in the non-utility businesses including Avista Energy, Inc. (A vista Energy) and Advantage
IQ, Inc. (Advantage IQ). A vista Energy was an electrcity and natual gas marketing, trading and resource maagement business. On
June 30, 2007, A vista Energy completed the sale of substantially all of its contracts and ongoing operations. See Note 3 for fuer
information. Advantage IQ is a provider of facility information and cost management services for multi-site customers throughout
Nort America.
The Company's operations are exposed to risks including, but not limited to:
. global financial and economic conditions (including the availability of credit) and their effect on the Company's ability to obtain
funding for working capital and long-term capital requirements on acceptable terms,
. economic conditions in the Company's service areas, including the effect on the demand for, and customers' ability to pay for, the
Company's utility services,
. streamflow and weather conditions that impact hydroelectrc generation, utility operations and customer demand,
. market prices and supply of wholesale energy, which the Company purchases and sells, including power, fuel and natural gas,
. regulatory disallowance of the recovery of power and natural gas costs, operating costs and capital investments and the allowance
of a reasonable rate of return on investment,
. the effects of changes in legislative and governental regulations, including restrctions on emissions from generating plants and
requirements for the acquisition of new resources,
. changes in regulatory requirements,
. availability of generation facilities,
. rate increases may change customer demand for electrcity and natural gas, and
. competition.
Also, like other utilities, the Company's facilities and operations are exposed to natual disasters and terrorism risks or other malicious
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 financial statements include the assets, liabilities, revenues and expenses of the Company and have been prepared in accordance
with the accounting requirements of the Federal Energy Regulatory Commssion as set fort in its applicable Uniform System of
Accounts and published accounting releases, which is a comprehensive basis of accounting other than accounting principles generally
accepted in the United States of America. 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, liabilities, revenues, and
expenses of these subsidiaries, as required by accounting principles generally accepted in the United States of America. The
accompanying financial statements include the Company's proportionate share of utility plant and related operations resulting from its
interests in jointly owned plants. In addition, under the requirements of the FERC, there are differences from accounting principles "
generally accepted in the United States of America in the presentation of (l) current portion of long-term debt (2) assets and liabilities
for cost of removal of assets, (3) assets held for sale, (4) regulatory assets and liabilities, (5) deferred income taxes, and (6)
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 fiancial statements. Significant
estimates include:
I FERC FORM NO.2 (ED. 12-88)Page 123.1
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
. determning the market value of energy commodity derivative assets and liabilities,
. pension and other postretirement benefit plan obligations,
. contigent liabilities,
. recoverability of regulatory assets,
. stock-based compensation, and
. unbiled revenues.
Changes in these estimates and assumptions are considered reasonably possible and may have a material effect on the fiancial
statements and thus actual results could differ from the amounts reported and disclosed herein.
System of Accounts
The accounting records of the Company's utility operations are maintained in accordance with the uniform system of accounts
prescribed by the FERC and adopted by the state regulatory commissions in Washington, Idaho, Montana and Oregon.
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
Operating revenues related to the sale of energy are generally recorded when servce 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 thoughout 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 unbiled revenue is estiated and recorded. Accounts receivable includes unbiled
energy revenues of $84.3 million (net of$l 1.4 milion of un biled receivables sold) as of December 31,2008 and $16.1 milion (net of
$57.2 million of unbiled receivables sold) as of December 31, 2007. See Note 6 for information related to the sale of accounts
receivable.
Advertising Expenses
The Company expenses advertising costs as incurred. Advertising expenses were not a material portion of the Company's operating
expenses in 2008, 2007 and 2006.
Taxes Other Than Income Taxes
Taxes other than income taes include state excise taxes, city occupational and franchise taxes, real and personal propert taxes and
certain other taxes not based on net income. These taes are generally based on revenues or the value of propert. Utility related taxes
collected from customers (primarily state excise taes and city utility taes) are recorded as operating revenue and expense and totaled
$53.9 milion in 2008, $51.0 million in 2007 and $48.3 milion in 2006.
Income Taxes
The Company accounts for income taxes under Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes." Under SFAS No. 109, a deferred tax asset or liability is determned based on the enacted tax rates that will be in
effect when the differences between the financial statement carring amounts and tax basis of existing assets and liabilities are
expected to be reported in the Company's income tax retus. The deferred tax expense for the period is equal to the net change in the
deferred tax asset and liability accounts from the begining to the end of the period. The effect on deferred taxes of a change in tax
rates is recognized in income in the period tht includes the enactment date. Deferred tax liabilities and regulatory assets are
established for tax benefits flowed though to customers as prescribed by the respective regulatory commssions.
Stock-Based Compensation
On January 1,2006, the Company adopted SFAS No. 123R, which supersedes APB No. 25 and SFAS No. 123 and their related
implementation guidance. The statement requires that the compensation cost relating to share-based payment tranactions be
recognized in financial statements based on the fair value of the equity or liability instrents issued. The Company adopted SF AS
No. 123R using the modified prospective method and, accordingly, financial statement amounts for prior periods presented were not
restated to reflect the fair value method of recognizing compensation expense relating to share-based payments. See Note 24 for
fuer information.
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
I FERC FORM NO.2 (ED. 12-88)Page 123.2
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
stock by diluted weighted average common shares outstanding during the period, including common stock equivalent shaes
outstanding using the treasur stock method, unless such shares are anti-dilutive. Common stock equivalent shaes include shares
issuable upon exercise of stock options and contingent stock awards. See Note 23 for earngs per common share calculations.
Cash and Cash Equivalents
For the puroses of the Statements of Cash Flows, the Company considers all temporar investments with a matuty of three months or
less when purchased to be cash equivalents. Cash and cash equivalents include cash deposits from counterparies. See Note 8 for
fuer information related to cash deposits from counterparies.
Allowance for Doubtful Accounts
The Company maintain an allowance for doubtful accounts to provide for estimated and potential losses on accounts receivable. The
Company determines the allowance for utility and other customer accounts receivable based on historical wrte-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 3 i
(dollars in thousands):
Allowance as of the beginng of the year
Additions expensed during the year
Net deductions
Allowance as ofthe end of the year
2008
$2,966
6,336
(3,457)
$5,845
2007
$2,730
3,078
(2,842)
$2,966
2006
$3,228
2,888
(3,386)
$2,730
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 utility plant in servce, including an allowance for funds used during constrction and replacements of unts of
propert and improvements, is capitalized. Costs of depreciable units of propert retied plus costs of removal less salvage are charged
to accumulated depreciation.
Allowance for Funds Used During Construction
The Allowance for Funds Used During Constrction (AFUDC) represents the cost of both the debt and equity fuds used to fiance
utility plant additions during the constrction 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 porton is credited currently againt total
interest expense in the Statements ofIncome. The Company generally is permtted, under established regulatory rate practices, to
recover the capitalized AFUDC, and a fair retu thereon, through its inclusion in rate base and the provision for depreciation after the
related utility plant is placed in servce. Cash inflow related to AFUDC generally does not occur until the related utility plant is placed
in service and included in rate base. The effective AFUDC rate was 8.2 percent in 2008, and 9. i i percent in 2007 and 2006. The
Company's AFUDC rates do not exceed the maximum allowable 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 composite rates for utilty
plant. Such rates are designed to provide for retirements of properties at the expiration of their service lives. For utility operations, the
ratio of depreciation provisions to average depreciable propert was 2.77 percent in 2008, 2.89 percent in 2007 and 2.89 percent in
2006.
The average service lives for the following broad categories of utility propert are:
. electrc thermal production - 32 years,
. hydroelectrc production - 77 years,
. electric transmission - 49 years,
. electrc distribution - 39 years, and
. natual gas distrbution propert - 5 i years.
I FERC FORM NO.2 (ED, 12-88) Page 123.3
Name of Respondent This Report is:Date of Report Year/Period of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Regulatory Deferred Charges and Credits
The Company prepares its financial statements in accordance with the provisions of SF AS NO.7 I, "Accounting for the Effects of
Certain Types of Regulation." The Company prepares its financial statements in accordance with SFAS No. 71 because:
. rates for regulated servces are established by or subject to approval by independent third-par regulators,
. 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 levels that will recover costs.
SFAS No. 71 requires the Company to reflect the impact of regulatory decisions in its fiancial statements. SFAS No. 71 requires that
certain costs and/or obligations (such as incured power and natural gas costs not currently recovered through rates, but expected to be
recovered in the futue) 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 durg which matching revenues are recognzed.
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 wrte off its regulatory assets, and
. precluded from the future deferral of costs not recovered though rates at the time such costs are incurred, even if the
Company expected to recover such costs in the futue.
The Company's primary regulatory assets include:
. power and natual gas deferrals,
. investment in exchange power,
. regulatory asset for deferred income taxes,
. unamortized debt expense,
. assets offsettng net utility energy conuodity derivative liabilities (see Note 7 for fuher information),
. expenditues for demand side management programs,
. expenditues for conservation programs,
. payments to the Coeur d'Alene Tribe for past water storage, and
. unfunded pensions and other postretirement benefits.
Regulatory liabilities include:
. natual gas deferrals, and
. liabilities offsetting net utility energy conuodity derivative assets (see Note 7 for fuer information).
Investment in Exchange Power-Net
The investment in exchange power represents the Company's previous investment in Washington Public Power Supply System Project
3 (WN-3), a nuclear project that was terminated prior to completion. Under a settlement agreement with the Bonnevile Power
Admstration in 1985, Avista Corp. began receiving power in 1987, for a 32.5-year period, related to its investment in WN-3.
Though a settlement agreement with the Washington Utilities and Tranporttion Conuission (WUTC) in the Washington
jurisdiction, Avista Corp. is amortizing the recoverable portion of its investment in WN-3 (recorded as investment in exchange
power) over a 32.5 year period beginning in 1987. For the Idaho jurisdiction, Avista Corp. fully amortzed the recoverable portion of
its investment in exchange power.
Unamortzed Debt Expense
Unamortized debt expense includes debt issuance costs that are amortized over the life of the related debt, as well as premiums paid to
repurchase debt. For the Company's primary regulatory jurisdiction and for any debt repurchases beginning in 2007 in all
jurisdictions, premiums paid to repurchase debt are amortized over the remaining life of the original debt that was repurchased or, if
new debt is issued in connection with the repurchase, these costs are amortzed over the life of the new debt. In the Company's other
regulatory jurisdictions, premiums paid to repurchase debt prior to 2007 are being amortized over the average remaining matuity of
outstanding debt when no new debt was issued in conncction with the debt repi¡chase. These costs are recovered though 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 futue review and recovery through retail
I FERC FORM NO.2 (ED. 12-88)Page 123.4
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
rates. The power supply costs deferred include certin differences between actul net power supply costs incured by A vista Corp. and
the costs included in base retail rates. This difference in net power supply costs primarily results from changes in:
. short-term wholesale market prices and sales and purchase volumes,
. the level of hydroelectrc generation,
. the level of thermal generation (including changes in fuel prices), and
. retail loads.
In Washigton, the Energy Recovery Mechanism (ERM) allows Avista Corp. to periodically increase or decrease electric rates
periodically with WUTC approval to reflect changes in power supply costs. The ERM is an accounting method used to track certain
differences between actul net power supply costs and the amount included in base retail rates for Washington customers. Avista
Corp. accrues interest on deferred power costs in the Washington jurisdiction at a rate, which is adjusted semi-annually, of6.7 percent
as of December 31,2008.
The initial amount of power supply costs in excess or below the level in retail rates, which the Company either incurs the cost of, or
receives the benefit from, is referred to as the deadband. The annual (calendar year) deadband amount is curently $4.0 million. The
Company will incur the cost of, or receive the benefit from, 100 percent of this initial power supply cost variance. The Company
shares annual power supply cost variances between $4.0 milion and $10.0 mil1on with its customers. Through December 31, 2008,
50 percent of the anual power supply cost variance in this range was deferred for future surcharge or rebate to customers and the
Company incurs the cost of, or receives the benefit from, the remaining 50 percent. To the extent that the annual power supply cost
variance from the amount included in base rates exceeds $10.0 mil1on, 90 percent of the cost variance is deferred for futue surcharge
or rebate. The Company incurs the cost of, or receives the benefit from, the remaining 10 percent of the annual varance beyond $10.0
mil1on without affecting curent or future customer rates. The following is a sumar of the ERM (though December 31,2008):
Deferred for Futue
Surcharge or Rebate
to Customers
0%
50%
90%
Anual Power Supply
Cost Varability
+/- $0 - $4 milion
+/- between $4 milion - $10 milion
+/- excess over $10 milion
Expense or Benefit
to the Company
100%
50%
10%
Effective January 1,2009, the ERM was adjusted for the sharing level for the anual power supply cost variance in the $4.0 million to
$10.0 milion band. The adjustment resulted in a 75 percent customers/25 percent Company sharing when actual power supply
expenses are lower (rebate to customers) than the amount included in base retail rates within this band. The 50 percent customers/50
percent Company sharng was maintained when actual power supply expenses are higher (surcharge to customers) tha the amount
included in base retail rates within ths band. The followig is a sumary of the revised ERM:
Anual Power Supply
Cost Varability
+/- $0 - $4 mil1on
+ between $4 milion - $10 million
- between $4 million - $10 milion
+/- excess over $10 milion
Deferred for Futue
Surcharge or Rebate
to Customers
0%
50%
75%
90%
Expense or Benefit
to the Company
100%
50%
25%
10%
Avista Corp. has a power cost adjustment (PCA) mechanism in Idaho that allows it to modify electric rates on October 1 of each year
with Idaho Public Utilities Commssion (IPUC) approval. Under the PCA mechanism, Avista Corp. defers 90 percent of the difference
between certain actual net power supply expenses and the amount included in base retail rates for its Idaho customers. In June 2007,
the IPUC approved contiuation of the PCA mechanism with an annual rate adjustment provision. These annual October i rate
adjustments recover or rebate power costs deferred durùlg the preceding July-June twelve-month period. Avista Corp. accrues interest
on deferred power costs in the Idao jurisdiction at a rate, which is adjusted annually, of 5.0 percent as of December 3 i, 2008.
The following table shows activity in deferred power costs for Washington and Idaho during 2006, 2007 and 2008 (dollars in
thousands) :
I FERC FORM NO.2 (ED.
12-88)
Washington
Page 123.5
Idaho Total
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2) A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Deferred power costs as of December 31, 2005 $96,191 $7,987 $104,178
Activity from January 1- December 31,2006:
Power costs deferred 5,718 5,718
Interest and other net additions 4,291 300 4,591
Recovery of deferred power costs though retail rates (30,323)(4,648)(34,971)
Deferred power costs as of December 31, 2006 $70,159 $9,357 $79,516
Activity from January 1 - December 31,2007:
Power costs deferred $16,344 $16,750 $33,094
Interest and other net additions 3,023 788 3,811
Recovery of deferred power costs though retail rates (31,002)(5,732)(36,734)
Deferred power costs as of December 31, 2007 58,524 21,163 79,687
Activity from January 1 - December 31,2008:
Power costs deferred 7,049 10,029 17,078
Interest and other net additions 2,231 1,153 3,384
Recovery of deferred power costs through retail rates (30,852)(11,690)(42,542)
Deferred power costs as of December 31,2008 $36,952 $20,655 $57,607
Unrecovered Purchased Gas Costs and Recovery Mechanisms
Avista Coip. files a purchased gas cost adjustment (PGA) in all three states it serves to adjust natural gas rates for: 1) estimated
commodity and pipeline transporttion costs to serve natual gas customers for the coming year, and 2) the difference between actul
and estimated commodity and transportation costs for the prior year. These anual PGA filings in Washington and Idaho provide for
the deferral, and recovery or refund, of 100 percent of the difference between actual and estimated commodity and pipeline
transporttion costs for the prior year, subject to applicable regulatory review. The anual PGA fiing in Oregon provides for deferral,
and recovery or refud, of 100 percent of the difference between actual and estiated pipeline transporttion costs and commodity
costs that are fixed though hedge transactions. Commodity costs that are not hedged for Oregon customers are subject to a sharing
mechanism whereby A vista Coip. defers, and recovers or refuds, 90 percent of the difference between these actual and estimated
costs.
NOTE 2. NEW ACCOUNTING STANDARDS
Effective January l, 2008, the Company adopted the provisions of SF AS No. 157, "Fair Value Measurements" related to its fiancial
assets and liabilities and nonfinancial assets and liabilities measured at fair value on a recurng basis. In February 2008, the F ASB
issued Staff Position No. 157-2, which deferred the effective date for certin portions of SF AS No. 157 related to nonrecurring
measurements of nonfinancial assets and liabilities. The Company will be required to adopt those provisions of SF AS No. 157 in
2009. The adoption of the provisions of SF AS No. 157 that became effective on January 1, 2008, did not have a material impact on
the Company's financial condition and results of operations. However, the Company expanded disclosures with respect to fair value
measurements. See Note 21 for the expanded disclosures.
Effective January 1, 2008, the Company adopted SFAS No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities." 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 is elected would be reported in net income. The Company did not
elect to use the fair value option under SF AS No. 159 for any fiancial assets and liabilities at implementation and as such the adoption
of SF AS No. 159 did not have any material impact on its financial condition and results of operations.
Effective December 31, 2006, SF AS No. 158, "Employers' Accountig for Defined Benefit Pension and Other Postretirement Plan -
an amendment of F ASB Statements No. 87, 88, 106, and 132 (R)" required the Company to recognize the overfnded or underfunded
status of defined benefit postretirement plans in the Company's Balance Sheet measured as the difference between the fair value of
plan assets and the benefit obligation. For a pension plan, the benefit obligation is the projected benefit obligation; for any other
postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation. Previously, the Company only
recognzed the underfuded status of defied 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 curently recovers its pension and other postretirement
benefit costs related to its regulated operations in retail rates, the Company records 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 plans under SFAS No. 158 resulted in the recogntion as of December 31,2006 of:
I FERC FORM NO.2 (ED. 12-88) Page 123.6
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 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
. a liability of $60.1 milion (associated deferred taxes of $21.0 milion) for pensions and other postretirement benefits,
. a regulatory asset of$54.2 milion (associated deferred taxes of$19.0 milion) for pensions and other postretirement benefits,
. an increase to accumulated other comprehensive loss of $3.7 million (net of taxes of $2.1 million), and
. the removal of the intangible pension asset of$3.7 milion (was included in other deferred charges).
As such, the total effect on the deferred income tax liability for the adoption of SF AS No. 158 was a net decrease of$2.1 millon. The
adoption of ths statement did not have any effect on the Company's net income.
In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations." This statement replaces SFAS No. 141 and
addresses the accounting for all transactions or other events in which an entity obtains control of one or more businesses. This
statement requires the acquiring entity in a business combination to recognize the assets acquired, the liabilities assumed, and any
noncontrolling interest in the transaction at the acquisition date, measured at their fair values as of that date, with limted exceptions.
The Company will be required to begin applying this statement to any business combinations in 2009.
In December 2007, the F ASB issued SF AS No. 160, "Noncontrolling Interests in Consolidated Financial Statements." This statement
amends Accounting Research Bulletin No. 51, "Consolidated Financial Statements," to establish accounting and reporting standards
for noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. This statement clarifies that a
noncontrolling interest in a subsidiary is an ownership in the consolidated entity that should be reported as equity in the consolidated
financial statements. The Company will be required to adopt SF AS No. 160 in 2009. The Company does not expect the adoption of
SF AS No. 160 to have any material impact on its financial condition and results of operations. The Company is stil in the process of
evaluating the full impact SFAS No. 160 will have on its fiancial statements.
In March 2008, the F ASB issued SF AS No. 161, "Disclosures about Derivative Instrments and Hedging Activities." This statement
will require disclosure of the fair value of derivative instrments and their gains and losses in a tabular format. The statement will also
require disclosure of derivative features that are related to credit risk. The Company will be required to adopt SF AS No. 161 in 2009.
The Company wil have expanded disclosures with respect to derivatives and hedging activities.
In December 2008, the FASB issued FSP FAS 132(R)-l, "Employers' Disclosures about Postretiement Benefit Plan Assets". This
FSP amends FASB statement No. 132(R) "Employer's Disclosures about Pensions and Other Postretirement Benefits." This statement
provides guidance on an employer's disclosures about plan assets of a defined benefit pension or other postretirement plan. The
Company will be required to adopt FSP FAS 132(R)-1 at the end of2009. The Company wil have expanded disclosures with respect
to its pension and other postretirement benefit plan assets.
NOTE 3. DISPOSITION OF AVISTA ENERGY
On June 30, 2007, A vista Energy and Avista Energy Canada completed the sale of substantially all of their contracts and ongoing
operations to Shell Energy Nort America (U.S.), L.P. (Shell Energy), formerly known as Coral Energy Holding, L.P., as well as to
certain other subsidiaries of Shell Energy. Proceeds from the transaction included cash consideration for the net assets acquired by
Shell Energy and the liquidation of the remaining net current assets of Avista Energy not sold to Shell Energy (primarly receivables,
restricted cash and deposits with counterparties).
Certain assets of Avista Energy with a net book value of approximately $30 millon were not sold or liquidated. These primarly
include natual gas storage and deferred tax assets. The Company expects that the natual gas storage wil ultimately be tranferred to
Avista Corp., subject to future regulatory approval. Avista Energy also has a power purchase agreement, related to a 270 MW natural
gas-fired combined cycle combustion tubine plant located in Idaho (Lancaster Plant). The Lancaster Plant is owned by an unelated
third-part and all of the output from the plant is contracted to Avista Energy though 2026. The majority of the rights and obligations
of the power purchase agreement were assigned to Shell Energy though the end of2009. The Company expects that the power
purchase agreement for the period 2010 though 2026 will be transferred to Avista Corp., subject to future regulatory approval.
In connection with the transaction, on June 30, 2007, Avista Energy and its affliates entered into an Indemnfication Agreement with
Shell Energy and its affiliates. Under the Indemnification Agreement, Avista Energy and Shell Energy each agree to provide
indemnfication of the other and the other's affliates for certain events and matters described in the purchase and sale agreement and
certain other transaction agreements. Such events and matters include, but are not limted to, the refud proceedings arsing out of the
western energy markets in 2000 and 2001 (see Note 25), existing litigation, tax liabilities, matters with respect to natual gas storage
rights, and any potential issues associated with the power purchase agreement for the Lancaster Plant. In general, such indemnfication
I FERC FORM NO.2 (ED. 12-88)Page 123.7
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 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
is not required unless and until a part's claim exceed $150,000 and is limted to an aggregate amount of$30 milion and a term of
thee years (except for agreements or transactions with terms longer than thee years). These limitations do not apply to certain third
part claims.
Avista Energy's obligations under the Indemnification Agreement are guaranteed by Avista Capital pursuant to a Guaranty dated June
30, 2007. This Guaranty is limted to an aggregate amount of $30 million plus certin fees and expenses. The Guaranty will terminate
April 30, 2011 except with respect to claims made prior to termination.
As of February 27,2009, neither part has made any claims under the Indemnfication Agreement or Guaranty.
NOTE 4. IMPAIRMENT OF ASSETS
During the third quarter of2007, the Company recorded an impairment charge of$2.3 milion for a tubine and related equipment.
The Company originally planned to use the turbine in a regulated utility generation project. At the end of the third quarter of 2007, the
Company reached a conclusion to sell the tubine and related equipment, which were classified as assets held for sale as of December
31, 2007, and included in other curent assets on the Balance Sheet. The impairment charge reduced the carng value of the assets to
the estimated fair value. The turbine was sold in 2008.
Pursuant to a settlement agreement in its Washigton general rate case entered into in October 2007 and approved by the WUTC in
December 2007, Avista Corp. agreed to write off$3.8 millon of unortized debt repurchase costs. These costs were for premiums
paid to repurchase debt prior to its scheduled matuty. In accordance with regulatory accountig practices, these premium were
recorded as a regulatory asset in unamortzed loss on reacquired debt on the Balance Sheet and were being amortized over the average
remaining matuty of outstanding debt.
NOTE 5. ADVANTAGE IQ ACQUISITION
Effective July 2,2008, Advantage IQ completed the acquisition of Cadence Network, a privately held, Cincinnati-based energy and
expense management company. As consideration, the owners of Cadence Network received a 25 percent ownership interest in
Advantage IQ. The total value of the transaction was $37 milion.
The acquisition of Cadence Network was fuded with the issuance of Advantage IQ common stock. Under the transaction agreement,
the previous owners of Cadence Network can exercise a right to redeem their shares of Advantage IQ common stock during July 2011
or July 2012 if Advantage IQ is not liquidated though either an initial public offering or sale of the business to a third part. Their
redemption rights expire July 31,2012. The redemption price would be determined based on the fair market value of Advantage IQ at
the time of the redemption election as determined by certin independent parties.
NOTE 6. ACCOUNTS RECEIVABLE SALE
Avista Receivables Corporation (ARC) is a wholly owned, banptcy-remote subsidiar of Avista Corp. formed for the purose of
acquiring or purchasing interests in certain accounts receivable, both billed and unbiled, of the Company. On March 14,2008, Avista
Corp., ARC and a third-part financial institution amended a Receivables Purchase Agreement. The most signficant amendment
extended the termination date to March 13,2009. Under the Receivables Purchase Agreement, ARC can sell without recourse, on a
revolving basis, up to $85.0 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. The amount of such fees is included in other operating expenses
of Avista Corp. The Receivables Purchase Agreement has fiancial covenants, which are substantially the same as those of Avista
Corp.'s committed lines of credit (see Note 14). At each of December 31,2008 and 2007, ARC had the ability to sell up to $85.0
milion of receivables under ths revolving agreement. There was $17.0 millon in accounts receivable sold as of December 31, 2008
and $85.0 milion in accounts receivable sold as of December 31,2007 under this revolving agreement.
NOTE 7. ENERGY COMMODITY DERIATIVES AND RISK MANAGEMENT
Avista Corp. is exposed to risks relating to changes in certain commodity prices. A vista Corp. utilizes derivative instrents, such as
forwards, futures, swaps and options in order to manage the various risks relating to these commodity price exposures. The Company
has an energy resources risk policy and control procedures to manage these risks, both qualitative and quantitative. The Company's
Risk Management Committee establishes the Company's energy resources risk policy and monitors compliance. The Risk
Management Committee is comprised of certain Company officers and other management. The Audit Committee of the Company's
Board of Directors periodically reviews and discusses risk assessment and risk management policies, including the Company's material
I FERC FORM NO.2 (ED. 12-88)Page 123.8
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) 2S An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/04
NOTES TO FINANCIAL STATEMENTS (Continued)
fincial and accounting risk exposures and the steps management has underten to control them.
Avista Corp. engages in an ongoing process of resource optimiation, which involves the economic selection from available energy
resources to serve A vista Corp.' s load obligations and using these resources to captue available economic value. Avista Corp. sells
and purchases wholesale electrc capacity and energy and fuel as par 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:
. electric 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 well as historical data and contract terms, and
. resource availability at these points in time based on, among other things, fuel choices and fuel markets, estimates of streamflows,
availability of generatig unts, historic and forward market information, contract term, and experience.
On the basis of these projections, Avista Corp. makes purchases and sales of energy to match expected resources to expected electric
load requirements. Resource optimization involves generating plant dispatch and scheduling available 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 wholesale transactions to captue the value of generation and transmission resources.
Avista 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 electric energy prices
by measuring and controlling the volume of energy imbalance between projected loads and resources and though the use of derivative
commodity instrents for hedging puroses. Load/resource imbalances within a planning horizon up to 36 months ahead are
compared against established volumetrc guidelines. Management determes the tig and actions to manage these energy
imbalances. Management also assesses available resource decisions and actions that are appropriate for longer-term planing periods.
Avista Corp. makes contiuing projections of its natual gas loads and assesses available natual gas resources. Forward natual gas
contracts are tyically for monthly delivery periods. However, daily variations in natual gas demad can be signficantly different
than monthly demand projections. On the basis of these projections, A vista Corp. plans and executes a series of tranactions to hedge
a significant portion of its projected natural gas requirements though forward market transactions and derivative instrments. These
transactions may extend as much as four years into the futue with the highest volumes hedged for the current and most immediately
upcoming gas operating year (November though October). Avista Corp. also purchases a significant portion of its gas supply
requirements in short~term and spot markets. Natural gas resource optimization activities include:
. wholesale market sales of surlus gas supplies,
. purchases and sales of natual gas to use under utilized pipeline capacity, and
. sales of excess natual gas storage capacity.
Avista Corp. enters into forward contracts to purchase or sell electrcity and natural gas. Under these forward contracts, Avista Corp.
commts to purchase or sell a specified amount of energy at a specified time, or during a specified period, in the futue. Certain of
these forward contraèts are considered derivative instruents. A vista Corp. also records derivative commodity assets and liabilities
for over-the-counter and exchange-traded derivative instrments as well as certain long-term contracts.
SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instrments, including certain derivative
instrents embedded in other contracts, and for hedging activities. It requires the recording of all derivatives as either assets or
liabilities on the balance sheet measured at estimated fair value and the recognition of the unrealized gains and losses. In certin
defined conditions, a derivative may be specifically designated as a hedge for a particular exposure. The accounting for derivatives
depends on the intended use of the derivatives and the resulting designation.
In conjunction with the provisions of SF AS No. 133, the WUTC and the IPUC issued accounting orders authorizing Avista Corp. to
offset any derivative assets or liabilities with a regulatory asset or liability. This accountig treatment is intended to defer the
recognition of mark-to-market gains and losses on energy commodity transactions until the period of settlement. The orders provide
for Avista Corp. to not recognze the unealized gain or loss on utility derivative commodity instrments in the Statements oflncome.
Realized gains or losses are recognzed in the period of settlement, subject to approval for recovery though retail rates. Realized
I FERC FORM NO.2 (ED. 12-88) Page 123.9
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
gains and losses, subject to regulatory approval, result in annual adjustments to retail rates though purchased gas cost adjustments, the
ERM and the PCA mechanism.
Substatially all forward contracts to purchase or sell power and natul gas are recorded as assets or liabilities at market value with an
offsettng regulatory asset or liability. Contracts that are not considered derivatives under SF AS No. 133 are generally accounted for
at cost until they are settled or realized, unless there is a decline in the fair value of the contract that is determned to be other than
temporar.
Market Risk
Market risk is, in general, the risk of fluctution 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 intrents. Market
risk may also be influenced to the extent that nonperformnce by market parcipants of their contractual obligations and commitments
affects the supply of, or demand for, the commodity.
Credit Risk
Credit risk relates to the potential losses that the Company would incur as a result of non-performance by counterparties of their
contractual obligations to deliver energy or make financial settlements. The Company often extends credit to counterparties and
customers and is exposed to the risk that they may not be able to collect amounts owed to them. Changes in market prices may
dramatically alter the size of credit risk with counterparties, even when conservative credit limits are established. Credit risk includes
potential counterpart default due to circumstances:
. relating directly to it,
. caused by market price changes, and
. relating to other market paricipants that have a direct or indirect relationship with such counterpart.
Should a counterpart, customer or supplier fail to perform, the Company may be required to honor the underlying commitment or to
replace existing contracts with contracts at then-current market prices. The Company seeks to mitigate credit risk by:
. entering into bilateral contracts that specify credit terms and protections against default,
. applying credit limits and duration criteria to existing and prospective counterparties, and
. actively monitoring current credit exposures, and
. conducting some of its transactions on exchanges with clearing arrangements that essentially eliminate counterpart default risk.
These credit policies include an evaluation of the financial condition and credit ratings of counterparies, collateral requiements or
other credit enhancements, such as letters of credit or parent company guarantees. The Company also uses standardized agreements
that allow for the netting or offsetting of positive and negative exposures associated with a single counterpar or affliated group.
The Company has concentrations of suppliers and customers in the electrc and natual gas industres including:
. electric utilties,
. electric generators and transmission providers,
. natual gas producers and pipelines,
. financial institutions, 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 positively or negatively, because the counterparties may be similarly affected by changes in conditions.
Credit risk also involves the exposure that counterparies perceive related to the ability of the Company to perform deliveries and
settlement under physical and financial energy contracts. These counterparties may seek assurances of performance in the form of
letters of credit, prepayment, or cash deposits.
In periods of price volatility, the level of exposure can change significantly. As a result, sudden and signficant demands may be made
against the Company's credit facilities and cash. The Company actively monitors the exposure to possible collateral calls and takes
steps to minimize capital requirements.
Other Operational and Event Risks
I FERC FORM NO.2 (ED. 12-88) Page 123.10
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) 2S An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
In addition to market and credit risk, the Company is subject to operational and event risks including, among others:
. blackouts or disruptions to distribution, transmission or transportation systems,
. forced outages at generating plants,
. fuel quality and availability,
. disruptions to information systems and other administrative resources required for normal operations, and
. weather conditions and natural disasters that can cause physical damage to propert, requiring repairs to restore utility servce.
Terrorism and other malicious theats are a risk to the entire utility industr. Potential disruptions to operations or destrction of
facilities from terrorism or other malicious acts are not readily determnable. The Company has taen various steps to mitigate
terrorism risks and prepare contingency plan in the event that its facilities are tageted.
NOTE 8. CASH DEPOSITS FROM COUNTERP ARTIES
As is common industr practice, Avista Corp. maintains magin agreements with certain counterparies. Margi calls are trggered
when exposures exceed predetermined contractual limits or when there are changes in a counterpar's creditwortiness. Price
movements in electricity and natual gas can generate exposure levels in excess of these contractual limts. From time to time, margin
calls are made and/or received by A vista Corp. Negotiating for collateral in the form of cash, letters of credit, or performance
guarantees is common industr practice.
Cash deposits from counterparties totaled $0.2 milion as of December 3 1,2008 and $12.5 milion as of December 31,2007. These
funds were held by Avista Corp. to mitigate the potential impact of counterpar default risk. These amounts are subject to return if
conditions warant because of continuing portfolio value fluctutions with those partes or substitution of non-cash collateraL.
NOTE 9. JOINTLY OWNED ELECTRIC FACILITIES
The Company has a 15 percent ownership interest in a twn-unit coal-fired generating facility, the Colstrip Generating Project
(Colstrp) located in southeastern Montana, and provides financing for its ownership interest in the project. The Company's share of
related fuel costs as well as operating expenses for plant in servce are included in the corresponding accounts in the Statements of
Income. The Company's share of utility plant in service for Colstrip was $330.9 millon and accumulated depreciation was $204.0
milion as of December 31, 2008.
NOTE 10. ASSET RETIREMENT OBLIGATIONS
The Company follows SFAS No. 143, "Accounting for Asset Retirement Obligations," and records the fair value ofa liability for an
asset retirement obligation in the period in which it is incured. When the liability is initially recorded, the associated costs of the asset
retirement obligation are capitalized as par of the carrng amount of the related long-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. The Company records
regulatory assets and liabilities for the difference between asset retirement costs curently recovered in rates and asset retirement
obligations recorded since asset retirement costs are recovered through rates charged to customers. The regulatory assets do not ear a
retu.
Specifically, the Company has recorded liabilities for futue asset retirement obligations to:
. restore ponds at Colstrip,
. cap a landfill at the Kettle Falls Plant,
. remove plant and restore the land at the Coyote Springs 2 site at the termination of the land lease,
. remove asbestos at the corporate offce building, and
. dispose of PCBs in certin 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
. abandoruent and decommissioning of certin hydroelectric generation and natual gas storage facilities.
The following table documents the changes in the Company's asset retirement obligation durng the years ended December 31 (dollars
I FERC FORM NO.2 (ED. 12-88) Page 123.11 I
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
in thousands):
Asset retirement obligation at begining of year
New liability recognized
Liability adjustment due to revision in estimted cash flows
Liability settled
Accretion expense
Asset retirement obligation at end of year
2008
$3,990
2007
$4,810
2006
$4,529
(29)
247
$4,208
(1,063)
(71)
314
$3,990
(51)
332
$4,810
NOTE 11. PENSION PLANS AND OTHER POSTRETIRMENT BENEFIT PLANS
The Company has a defined benefit pension plan covering substantially all regular full~time employees at A vista Corp. Individual
benefits under ths plan are based upon the employee's years of servce 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 fuded under the Employee Retirement
Income Security Act, but not more than the maximum amounts that are curently deductible for income tax purposes. The Company
contrbuted $28 milion in cash to the pension plan in 2008 and $15 million each of 2007 and 2006. The Company expects to
contribute $48 milion to the pension plan in 2009.
The Company also has a Supplemental Executive Retirement Plan (SERP) that provides additional pension benefits to executive
offcers of the Company. The SERP is intended to provide benefits to executive offcers whose benefits under the pension plan are
reduced due to the application of Section 415 of the Internal Revenue Code of 1986 and the deferral of salar under deferred
compensation plans. The liability and expense for this plan are included as pension benefits in the tables included in ths Note.
The Company expects that benefit payments under the pension plan and the SERP will total $17.5 million in 2009, $18.1 million in
2010, $19.0 milion in 2011, $20.0 million in 2012 and $21.2 million in 2013. For the ensuing five years (2014 though 2018), the
Company expects that benefit payments under the pension plan and the SERP will total $127.0 millon.
The Finance Committee of the Company's Board of Directors:
. establishes investment policies, objectives and strategies that seek an appropriate retu for the pension plan, and
. reviews and approves changes to the investment and fuding policies.
The Company has contracted with an investment consultant who is responsible for managing/monitorig the individual investment
managers. The investment managers' performance and related individual fud performance is periodically reviewed by an internal
benefits committee and by the Finance Committee to monitor compliance with investment policy objectives and strategies. Pension
plan assets are invested primarily in marketable debt and equity securities. Pension plan assets may also be invested in real estate,
absolute return, venture capital/private equity and commodity fuds. In seekig to obtain the desired retu to fund the pension plan,
the investment consultant recommends allocation percentages by asset classes. These recommendations are reviewed by the internal
benefits committee, which then recommends their adoption by the Finance Commttee. The Finance Commttee has established
investment allocation 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 tyes 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 thee basic approaches:
. curent cost of reproducing a propert less deterioration and fuctional economic obsolescence,
. capitalization of the propert's net earings power, and
. value indicated by recent sales of comparable propertes in the market.
The market-related value of plan assets was determined as of December 31, 2008 and 2007.
In selecting a discount rate, the Company considers yield rates for highly rated corporate bond portolios with matuties simlar to that
of the expected term of pension benefits.
In 2008, the rates at which partcipants are assumed to retire by age were analyzed based upon historical trends and future projections.
The Company revised the rates to assume that a greater percentage of paricipants would retire between the ages of 55 and 65. The
assumed rates were revised to range from 5 percent to 40 percent and 100 percent at age 65. The previous rates ranged from 2 percent
I FERC FORM NO.2 (ED. 12-88) Page 123.12 I
Name of Respondent This Report is:Date of Report Year/Period of Report
(1 ) 2S An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
to 30 percent and 100 percent at age 65. The change resulted in an increase of$I1.0 milion to the pension benefit obligation as of
December 31, 2008. The change will also increase future years' pension costs.
The Company provides certin health care and life insurance benefits for substatially all of its retired employees. The Company
accrues the estimated cost of postretirement benefit obligations durig the years that employees provide servces. The Company
elected to amortize the transition obligation of$34.5 milion over a period of twenty years, begiing in 1993.
The Company established a Health Reimbursement Arangement to provide employees with tax-advantaged fuds to pay for allowable
medical expenses upon retirement. The amount eared by the employee is fixed on the retiement date based on employees' years of
service and the ending salar. The liability and expense of ths plan are included as other postretiement benefits.
The Company provides death benefits to beneficiaries of executive offcers who die durng their term of offce or after retirement.
Under the plan, an executive offcer's designted beneficiary will receive a payment equal to twce the executive offcer's anual base
salar at the time of death (or if death occurs after retirement, a payment equal to twce the executive offcer's total anual pension
benefit). The liability and expense for this plan are included as other postretiement benefits. Effective December 31, 2007, ths plan
was amended to eliminate a provision that allowed an executive officer to elect for their beneficiares to receive one quarer of such
payment each year over a ten~year period commencing within 30 days of the executive offcer's death. The plan was also amended to
provide that those who become executive officers after December 31, 2007 will no longer be eligible to receive benefits after
retirement. The amendments to the plan reduced the benefit obligation by $1.6 million as of December 31, 2007.
The Company expects that benefit payments under other postretirement benefit plans wil be $4.0 milion in 2009, $3.8 milion in
2010, $3.7 million in 2011, $3.6 milion in 2012 and $3.6 milion in 2013. For the ensuing five years (2014 though 2018), the
Company expects that benefit payments under other postretirement benefit plans wil total $16.6 milion. The Company expects to
contribute $4.0 million to other postretirement benefit plans in 2009, representing expected benefit payments to be paid during the
year.
The Company uses a December 31 measurement date for its pension and other postretirement plans. The following table sets forth the
pension and other postretirement plan disclosures as of December 31, 2008 and 2007 and the components of net periodic benefit costs
for the years ended December 31,2008,2007 and 2006 (dollars in thousands):
Pension Benefits
2008
Other Post-
retiement Benefits
2007 2008 2007
Change in benefit obligation:
Benefit obligation as of beginning of year $323,090 $315,691
Service cost 10,209 10,694
Interest cost 20,812 19,161
Plan amendment
Actuarial loss (gain)17,041 (5,245)
Transfer of accrued vacation
Benefits paid (17,580)(16,912)
Expenses paid (299)
Benefit obligation as of end of year $353.572 $323,090
Change in plan assets:
Fair value of plan assets as of begining of year $242,561 $225,079
Actual retu on plan assets (63,575)18,799
Employer contributions 28,000 15,000
Benefits paid (16,349)(16,018)
Expenses paid (299)
Fair value of plan assets as of end of year $190,637 $242.561
Funded statu $(162,935)$(80,529)
Unrecognized net actuarial loss 160,280 62,174
Unrecognized prior servce cost 2,444 3,098
I FERC FORM NO.2 (ED. 12-88) Page 123.13
$34,352 $33,632
772 672
2,371 2,159
(1,601)
5,611 2,612
365 585
(4,518)(3,707)
----
$38,953 $34.352
$22,718 $20,878
(6,670)1,840
$16,048 $22,718
$(22,905)
18,357
(1,452)
$(11,634)
4,472
(1,600)
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/04
NOTES TO FINANCIAL STATEMENTS (Continued)
Umecognzed net transition obligation
Accrued benefit cost
Additional liability
Accrued benefit liability
Accumulated pension benefit obligation
Accumulated postretirement benefit obligation:
For retirees
For fully eligible employees
FOr other participants
Included in accumulated comprehensive loss (income) (net of tax):
Umecognized net transition obligation $ $
Umecognized prior service cost 1,589 2,013
Umecognized net actuaral loss 104,182 40,414Total 105,771 42,427Less regulatory asset (98,850) (28,560)
Accumulated other comprehensive loss (income) $6,921 $13,867
Weighted-average asset allocations as of December 31:Equity securties 48%Debt securities 32%Real estate 6%Absolute return 1 1 %Other 3%
Target asset allocations as of December 31:
Equity securities
Debt securties
Real estate
Absolute return
Other
Weighted average assumptions as of December 31:
Discount rate for benefit obligation
Discount rate for annual expense
Expected long-term return on plan assets
Rate of compensation increase
Medical cost trend pre-age 65 - initial
Medical cost trend pre-age 65 ~ ultiate
Ultimate medical cost trend year pre-age 65
Medical cost trend post-age 65 - initial
Medical cost trend post-age 65 - ultimate
Ultimatè medical cost trend year post-age 65
2008
(211)
(162,724)
$(162,935)
$307.413
39-61%
27-33%
3-7%
10-14%
0-8%
6.25%
6.34%
8.50%
4.72%
2007
(15,257)
(65,272)
$(80.529)
$275,159
49%
31%
6%
11%
3%
39-61%
27~33%
3-7%
10-14%
0-8%
6.34%
6.15%
8.50%
4.66%
2006
2,021 2,526
(3,979)(6,236)
(18,926)..
$(22,905)$(11.634)
$18,821 $18,572
$8,903 $9,675
$11,229 $6,105
$1,313 $1,642
(943)(1,040)
11,932 2,907
12,302 3,509
(13,131)(4,594)
$(829)$(1.085)
51%62%
49%38%
52-72%
28-48%
52-72%
28-48%
6.25%
6.20%
8.50%
6.20%
6.15%
8.50%
9.00% 9.00%
5,00% 5.00%
2017 2012
9.00% 9.00%
6.00% 6.00%
2015 2011
2008 2007 2006
Components of net periodic benefi cost:
Service cost $10,209 $10,694 $ 9,963 $772 $672 $639
Interest cost 20,812 19,161 17,158 2,371 2,1591,956
Expected retu on plan assets (21,138)(19,217)(16,997)(1,931)(1,775)(1,562)
Transition obligation recognition 505 505 505
Amortization of prior servce cost 654 653 653 (149)
Net loss recognition 3,345 2,978 3,772 575 ---.
Net periodic benefit cost $13,882 $14.269 $14.549 $2,143 $1.754 $1,628
Assumed health care cost trend rates have a signficant effect on the amounts reported for the health 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 31,2008 by $2.1 milion and the service and interest cost by $0.2 milion. A one-percentage-point
I FERC FORM NO.2 (ED. 12-88)Page 123.14
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) 2S An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
decrease in the assumed health care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as
of December 31, 2008 by $1.8 million and the servce and interest cost by $0.2 milion.
The Company and its most signficant subsidiaries have salar deferral 401 (k) plan that are defined contrbution plans and cover
substantially all employees. Employees can make contrbutions to their respective accounts in the plan on a pre-tax basis up to the
maximum amount permitted by law. The respective company matches a portion of the salar deferred by each paricipant according to
the schedule in the respective plan. Employer matching contributions were $4.3 milion in 2008, $4.6 milion in 2007 and $4.4
milion in 2006.
The Company has an Executive Deferral Plan. This plan allows executive offcers and other key employees the opportity 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 fuds are held by the Company in a Rabbi Trust. At December 31, 2008 and 2007,
there were deferred compensation assets of $8.8 million and $12.1 milion included in other special funds and corresponding deferred
compensation liabilities of$8.8 milion and $12.1 million included in other deferred credits on the Balance Sheets.
NOTE 12. ACCOUNTING FOR INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrng amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax puroses and tax credit carrorwards. The realization of deferred
tax assets is dependent upon the ability to generate taxable income in future periods. The Company evaluated available evidence
supporting the realization of its deferred tax assets and determined it is more likely than not that deferred tax assets will be realized.
The Company and its eligible subsidiaries file consolidated federal income tax return. The Company also files state income tax
retus in certain jurisdictions, including Idaho, Oregon, Montana and California. Subsidiaries are charged or credited with the tax
effects of their operations on a stand-alone basis. The Internal Revenue Servce (IRS) has completed its examnation of the 2004 and
2005 ta years and all issues were resolved related to these years. The IRS is curently conducting an examination of the Company's
2006 and 2007 federal income tax retus. This examation could result in a change in the liability for uncertain tax positions.
However, an estimate of the range of any such possible change cannot be made at ths time. The Company does not believe that any
open tax years with respect to state income taxes could result in any adjustments that would be significant to the fiancial statements.
In August 2005, the Treasur Departent issued regulations and the IRS issued a revenue ruling tht affects the tax treatment by
Avista Corp. of certin indirect overhead expenses. A vista Corp. had previously made a ta election to curently deduct certain
indirect overhead costs, starting with the 2002 tax retu, that were capitalized for financial accounting puroses. Ths election
allowed A vista Corp. to take tax deductions resulting in a total reduction of approximately $40 milion in current tax liabilities for
2002,2003 and 2004. These current tax benefits were deferred on the balance sheet in accordance with the provisions of SF AS No.
109 and did not affect net income.
On the basis of the revenue ruling and related regulations, the IRS disallowed the tax deduction of indirect overhead expenses during
their examination of the Company's 2001,2002 and 2003 federal income tax returns. The Company believed that the tax deductions
claimed on tax retus were appropriate based on the applicable statutes and regulations in effect at the time. Avista Corp.
appealed the proposed IRS adjustment in April 2006. The Company repaid a portion of the previous tax deductions through tax
payments in 2005, 2006 and 2008.
On September 10, 2008, the Company entered into a Settlement Agreement with the Appeals Division of the IRS that resolved all
items noted during their audit of the Company's 2001 though 2003 tax years, including, among other thngs, indirect overhead
expenses. The agreement was reviewed and approved by the Joint Committee on Taxation, and a settlement payment was received in
December 2008. The original IRS disallowance and the Company's appeal of the indirect overhead issue caused a delay in associated
tax refunds for net operating losses that were carried back to several earlier years. The fial settlement with the IRS freed up the
refund years and set the amount owed for the 2001-2003 tax years. The net result was a refud to the Company of$14.7 milion, plus
interest of $5.7 million.
The Company had net regulatory assets of$115.0 millon at December 31,2008 and $117.5 millon at December 31,2007 related to
the probable recovery of certain deferred tax liabilities from customers though future rates.
NOTE 13. ENERGY PURCHASE CONTRACTS
I FERC FORM NO.2 (ED.
12-88) Page 123.15
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 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Avista Corp. has contracts for the purchase of fuel for thermal generation, natural gas for resale and various agreements for the
purchase 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, natual gas purchased, fuel for generation and other fuel costs, which are included in
operation expenses in the Statements of Income, were $951.4 milion in 2008, $733.5 million in 2007 and $682.5 milion in 2006. The
followig table details Avista Corp.'s futue contractual commtments for power resources (including transmission contracts) and
natual gas resources (including transportation contracts) (dollars in thousands):
Power resources
Natual gas resources
Total
2009
$246,114
164,323
$410.437
2010
$127,118
94,612
$221.730
2011
$95,029
68,038
$163,067
2012
$ 82,093
50,663
$132.756
2013
$68,928
44,175
$113,103
Thereafter
$390,303
474,329
$864.632
Total
$1,009,585
896,140
$1.905,725
All of the energy purchase contracts were entered into as par of A vista Corp. ' s obligation to serve its retail electrc and natual gas
customers' energy requirements. As a result, these costs are generally recovered either though base retail rates or adjustments to retail
rates as par of the power and natural 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 ofIncome. The following table details futue contractual commitments for these agreements (dollars in thousands):
Contractual obligations
2009
$24.546
2010
$27,805
2011
$26.353
2012
$29.116
2013
$29,987
Thereafter
$247,381
Total
$385,188
Avista Corp. has fixed contracts with certain Public Utility Districts (PUD) to purchase portons of the output of certin generating
facilities. Although Avista Corp. has no investment in the PUD generating facilities, 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 facilities are operating. The
cost of power obtained under the contracts, including payments made when a facility is not operating, is included in operation expenses
in the Statements ofIncome. Expenses under these PUD contracts were $14.9 milion in 2008, $18.0 milion in 2007 and $13.1
million in 2006. Information as of December 31, 2008 pertaining to these PUD contracts is sumarized in the following table (dollars
in thousands):
Company's Curent Share of
Debt Expira-
Kilowatt Anual Servce Bonds tion
Output Capability Costs 0)Costs (1)Outstading Date
Chelan County PUD:
Rocky Reach Project 2.9%37,000 $ 2,116 $1,026 $ 1,320 2011
Douglas County PUD:
Wells Project 3.5%30,000 1,791 793 4,411 2018
Grant County PUD:
Priest Rapids Project 3.3%28,000 5,253 727 8,485 2055
Wanapum Project (2)8.2%78,000 5,715 2,663 15,143 2055
Totals 173,000 $14,875 $5.209 $29,359
(1) The annual costs will change in proportion to the percentage of output allocated to Avista Corp. in a particular year. Amounts
represent the operating costs for the year 2008. Debt service costs are included in annual costs.
(2) The current contract expires October 31, 2009. A new contract was completed in 2001 with an expiration date of 2055.
Beginnng in November 2009, our rights to the output will be reduced to 3.3 percent. Under the new contract we will have the
rights to the output but not the obligation to take the output. In September of each year we wil be required to determne if we wil
take the output for the subsequent year.
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):
2009 2010 2011 2012 2013 Thereafter Total
I FERC FORM NO.2 (ED. 12-88)Page 123.16
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 04/16/2009 20081Q4
.NOTES TO FINANCIAL STATEMENTS (Continued)
Minum payments $4.527 $2,967 $2,910 $2.491 $2,427 $33,698 $49.020
In addition, Avista Corp. will be required to pay its proportionate share of the variable operating expenses of these projects.
Avista Energy's contractual commitments to purchase energy commodities as well as commitments related to transmission,
transportation and other energy-related contracts in future periods are as follows (dollars in thousands):
Energy purchase contracts
2009
$21.700
2010
$26,728
2011
$26,728
2012
$26.530
2013
$25,543
Thereafter Total
$290.482 $417,711
These contractual commitments of A vista Energy are primarily related to the power purchase agreement for the Lancaster Plant. The
majority of the rights and obligations of this agreement were assigned to Shell Energy though the end of2009. Beginng in 2010
though 2026, the rights and obligations of the power purchase agreement for the Lancaster Plant are contracted to A vista Energy. The
Company expects that these rights and obligations wil be transferred to Avista Corp., subject to future regulatory approval.
NOTE 14. COMMITTED LINE OF CREDIT AGREEMENTS
The Company has a commtted line of credit agreement with various bank in the total amount of $320.0 million with an expiration
date of April 5, 2011. Under the credit agreement, the Company can request the issuance of up to $320.0 million in letters of credit.
Total letters of credit outstanding were $24.3 milion as of December 31,2008 and $34.8 milion as of December 31,2007. The
committed line of credit is secured by $320.0 milion of non-transferable First Mortgage Bonds of the Company issued to the agent
ban tht 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.
Additionally, the Company has a committed line of credit agreement with various bank in the total amount of $200.0 milion with an
expiration date of November 24, 2009. The committed line of credit is secured by $200.0 milion 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.
The committed line of credit agreements contain customary covenants and default provisions, including a covenant requiing the ratio
of "earings before interest, taxes, depreciation and amortization" to "interest expense" of Avista Corp. for the preceding
twelve-month period at the end of any fiscal quarer to be greater than 1.6 to 1. As of December 31, 2008, the Company was in
compliance with this covenant with a ratio of 3.27 to 1. The committed line of credit agreements also have a covenant which does not
permit the ratio of" total debt" to" total capitalization" of Avista Corp. to be greater than 70 percent at any time. As of December 31,
2008, the Company was in compliance with this covenant with a ratio of 54.5 percent. If the proposed change in organization becomes
effective, the committed line of credit agreements wil remain at Avista Corp. The committed line of credit agreements also have a
covenant which requires the Company to maintain a minimum fuded ratio of the pension plan assets to liabilities. The Pension
Protection Act of2006 (that was implemented in 2008) modified the liability calculation utilized to calculate the funded ratio. Avista
Corp. amended the covenant related to the pension funded ratio, under its $320.0 million committed line of credit agreement, to
conform with the calculations under the Pension Protection Act of 2006.
Balances outstanding and interest rates of borrowigs (excluding letters 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):
Balance 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
2008 2007 2006
$ 250,000 $$ 4,000
$ 250,000 $48,000 $77,000
$ 48,426 $ 6,833 $16,740
3.04%7.91%6.07%
0.81%- %8.25%
NOTE 15. BONDS AND OTHER LONG-TERM DEBT
The following details the interest rate and matuty dates of bonds and other long-term debt outstanding as of December 31 (dollars in
thousands):
Maturity
I FERC FORM NO.2 (ED. 12-88)
Interest
Page 123.17
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Year Description Rate 2008 2007
2008 Secured Medium-Term Notes 6.06%-6.95%$$45,000
2010 Secured Medium-Term Notes 6.67%-8.02%35,000 35,000
2012 Secured Medium-Term Notes 7.37%7,000 7,000
2013 First Mortgage Bonds 6.13%45,000 45,000
2013 First Mortgage Bonds (1)7.25%30,000
2018 First Mortgage Bonds (2)5.95%250,000
2018 Secured Medium-Term Notes 7.39%-7.45%22,500 22,500
2019 First Mortgage Bonds 5.45%90,000 90,000
2023 Secured Medium-Term Notes 7.18%-7.54%13,500 13,500
2028 Secured Medium-Term Notes 6.37%25,000 25,000
2032 Secured Pollution Control Bonds (3)5.00%66,700
2034 Secured Pollution Control Bonds (4)1.20%17,000 17,000
2035 First Mortgage Bonds 6.25%150,000 150,000
2037 First Mortgage Bonds 5.70%150,000 150,000
Total secured bonds and other long-term debt 835,000 666,700
2008 Unsecured Senior Notes 9.75%272,860
2023 Unsecured Pollution Control Bonds 6.00%4,100 4,100
Total unsecured bonds and other long-term debt 4,100 276,960
Interest rate swaps (14,129)1,083
Total long-term debt $824,971 $944,743
(1) On December 16,2008, the Company issued $30.0 milion of7.25 percent First Mortgage Bonds due in 2013. The net
proceeds from the issuace of$29.9 millon (net of placement agent fees and before Avista Corp.'s expenses) were used to
repay $25.0 millon of medium term notes that matured on December 10, 2008 and repay a portion of the borrowings
outstanding under the Company's $320.0 milion committed line of credit.
On April 3, 2008, the Company issued $250.0 milion of5.95 percent First Mortgage Bonds due in 2018. The net proceeds from
the issuance of $249.2 milion (net of issuance discount and before Avista Corp.'s expenses), together with other available
fuds, were used to pay the $272.9 million of9.75 percent Unsecured Senior Notes that matued on June 1,2008.
On December 31, 2008, $66.7 milion of the City of Forsyt, Montana Pollution Control Revenue Refuding Bonds, Series 1999A
(Avista Corporation Colstrp Project) due 2034 were remarketed. Avista Corp. purchased these Pollution Control Bonds and
expects that at a later date, subject to market conditions, these bonds will be remarketed to unaffliated investors or refuded
by a new issue. Although Avista Corp. is now the holder of these Pollution Control Bonds, the bonds will not be cancelled
but will remain outstanding under the City of Forsyt's indentue. However, so long as Avista Corp. is the holder, the bonds
will not be reflected as an asset or a liability on Avista Corp.'s Balance Sheet.
On December 30,2008, the City of Forsyt, Montana issued $17.0 milion of its Pøllution Control Revenue Refuding Bonds,
Series 2008 (Avista Corporation Colstrp Project) due 2034 on behalf of Avista Corp. The proceeds of these bonds were used
to refund $l 7.0 million of Pollution Control Revenue Refuding Bonds, Series 1999B (Avista Corporation Colstrip Project)
issued by the City of Forsyt, Montana on behalf of Avista Corp.
The following table details future long-term debt maturities including long-term debt to affliated trsts (see Note 16) (dollars in
thousands):
Debt matuities
2009
$17,000
2010
$35.000
2011$ -2012 2013
$7.000 $75,000
Thereafter
$818.503
Total
$952,503
Substantially all utility properties owned by the Company are subject to the lien of the Company's various mortgage indentues.
Under the Mortgage and Deed of Tmst securng the Company's First Mortgage Bonds (including Secured Medium-Term Notes), the
Company may issue additional First Mortgage Bonds in an aggregate principal amount equal to the sum of: 1) 70 percent of the cost or
fair value (whichever is lower) of propert additions which have not previously been made the basis of any application under the
Mortgage, or 2) an equal principal amount of retired First Mortgage Bonds which have not previously been made the basis of any
application under the Mortgage, or 3) deposit of cash; provided, however, that the Company may not issue any additiona First
Mortgage Bonds (with certain exceptions in the case of bonds issued on the basis of retired bonds) uness the Company's "net
earnings" (as defined in the Mortgage) for any period of 12 consecutive calendar months out of the preceding 18 calendar month
were at least twce the annual interest requirements on all mortgage securities at the time outstanding, including the First Mortgage
I FERC FORM NO.2 (ED. 12-88) Page 123.18
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Bonds to be issued, and on all indebtedness of prior rank. As of December 31, 2008, propert additions and retired bonds would have
entitled the Company to issue $688.9 millon in aggregate principal amount of additional First Mortgage Bonds. However, using an
interest rate of 8 percent on additional First Mortgage Bonds, and based on net earings for the 12 months ended December 31, 2008,
the net earnings test would limit the principal amount of additional bonds the Company could issue to $545.9 milion.
See Note 14 for information regarding First Mortgage Bonds issued to secure the Company's obligations under its $320.0 million and
$200.0 milion commtted line of credit agreements.
NOTE 16. ADVANCES FROM ASSOCIATED COMPANIES
In 2004, the Company issued Junior Subordinated Debt Securities, with a principal amount of $61.9 millon to A V A Capital Trust II,
an affiiated business trst formed by the Company. Concurently, A V A Capital Trust II issued $60.0 milion of Preferred Trust
Securities to third parties and $1.9 million of Common Trut Securities to the Company. All of these securities have a fied interest
rate of 6.50 percent for five years (though March 31,2009). Subsequent to the initial five-year fied rate period, the securities will
either have a new fixed rate or an adjustable 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 pricipal amount of
$51.5 milion to Avista Capital II, an affiliated business trst formed by the Company. Avista Capital II issued $50.0 milion of
Preferred Trust Securities with a floating distrbution rate of LIB OR plus 0.875 percent, calculated and reset quarterly. The annual
distribution rate paid durng 2008 ranged from 3.06 percent to 6.00 percent. As of December 31,2008, the annual distribution rate
was 3.06 percent. Concurrent with the issuance of the Preferred Trust Securties, Avista 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. In December 2000, the Company purchased $10.0 million of these Preferred Trust Securities.
The Company has guaranteed the payment of distrbutions on, and redemption price and liquidation amount with respect to, the
Preferred Trust Securities to the extent that AVA Capital Trust II and Avista Capital II have funds available for such payments from
the respective debt securities. Upon maturity or prior redemption of such debt securities, the Preferred Trut Securities will be
mandatorily redeemed.
NOTE 17. INTEREST RATE SWAP AGREEMENTS
Avista Corp. enters into forward-staring interest rate swap agreements to manage the risk associated with changes in interest rates and
the impact on futue interest payments. These interest rate swap agreements relate to the interest payments for the anticipated
issuances of debt. These interest rate swap agreements are considered economic hedges against fluctuations in futue cash flows
associated with changes in interest rates.
In December 2006, Avista Corp. cash settled an interest rate swap agreement and paid $3.7 millon. In March 2008, the Company
cash settled two interest rate swap agreements and paid a total of $16.4 millon. These settlements were deferred as regulatory items
(part of long-term debt) and will be amortized as a component of interest expense over the remaining ten year terms of the interest rate
swap agreements (forecasted interest payments) in accordance with regulatory accounting practices.
In December 2008, the Company entered into two interest rate swaps totaling $50.0 milion. Under the terms of the outstanding
interest rate swap agreements as of December 31, 2008, the value of the interest rate swaps is determined based upon Avista Corp.
paying a fied rate and receiving a variable rate based on LIBOR for a term of ten years beginning in 2009. As of December 31, 2008,
Avista Corp. had a current derivative asset of$0.9 milion and offsetting regulatory liability on the Balance Sheets in accordance with
regulatory accounting practices. Upon settlement of the interest rate swaps, the regulatory asset or liability (included as par of
long-term debt) will be amortized as a component of interest expense over the life of the forecasted interest payments. The interest
rate swap agreements provide for mandatory cash settlement of these contracts in 2009.
In Januar 2009, the Company entered into two interest rate swaps totaling $50.0 milion. Under the terms of the outstanding interest
rate swap agreements, the value of the interest rate swaps is determined based upon A vista Corp. paying a fixed rate and receiving a
variable rate based on LIB OR for a term often years beginning in 2009. Upon settlement ofthe interest rate swaps, the regulatory
asset or liability (included as part oflong-term debt) wil be amortized as a component of interest expense over the life of the
forecasted interest payments. The interest rate swap agreements provide for mandatory cash settlement of these contracts in 2009.
NOTE 18. LEASES
I FERC FORM NO.2. (ED. 12-88)Page 123.19
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
The Company has multiple lease arangements involving varous assets, with minimum terms ranging from one to fort-five years.
Rental expense under operating leases was $4.8 million in 2008, $4.8 milion in 2007 and $5.4 milion in 2006. Future minimum lease
payments required under operating leases having initial or remaining noncancelable lease terms in excess of one year as of December
31,2008 were as follows (dollars in thousands):
Minimum payments required
2009
$1.95
2010
$425
2011
$209
2012
$125
2013
$118
Thereafter1U Total
$4.391
NOTE 19. GUARTEES
The Company has guaranteed the payment of distrbutions on, and redemption price and liquidation amount with respect to, the
Preferred Trust Securities issued by its affiliates, AVA Capital Trust II and Avista Capital II, to the extent that these entities have
fuds available for such payments from the respective debt securties.
The output from the Lancaster Plant is contracted to Avista Energy though 2026 under a power purchase agreement. Avista Corp. has
guaranteed the power purchase agreement for the performance of Avista Energy. The majority of the rights and obligations of this
agreement were assigned to Shell Energy though the end of2009. Beging in 2010, the Company expects that these rights and
obligations will be transferred to Avista Corp., subject to futue regulatory approval.
In connection with the transaction, on June 30, 2007, Avista Energy and its affliates entered into an Indemnfication Agreement with
Shell Energy and its affiliates. Under the Indemnification Agreement, Avista Energy and Shell Energy each agree to provide
indemnification of the other and the other's affliates for certin events and matters described in the purchase and sale agreement
entered into on April 16, 2007 and certain other transaction agreements. Such events and matters include, but are not limited to, the
refud proceedings arising out of the western energy markets in 2000 and 2001 (see Note 25), existing litigation, tax liabilities, matters
with respect to storage rights at Jackson Prairie, and any potential issues associated with the power purchase agreement for the
Lancaster Plant. In general, such indemnification is not required unless and until a part's claims exceed $150,000 and is limted to an
aggregate amount of$30 millon and a term of thee year (except for agreements or tranactions with terms longer than three years).
These limitations do not apply to certain thrd par claims.
Avista Energy's obligations under the Indemnification Agreement are guaranteed by Avista Capital pursuant to a Guaranty dated June
30,2007. This Guaranty is limited to an aggregate amount of $30 milion plus certin fees and expenses. The Guaranty will terminate
April 30, 2011 except with respect to claims made prior to termination.
NOTE 20. PREFERRED STOCK-CUMULATIVE (SUBJECT TO MANDATORY REDEMPTION)
The Company has 10 million authorized shares of preferred stock. The Company did not have any preferred stock outstanding as of
December 31, 2008 and 2007. In September 2007, the Company redeemed the 262,500 remainig outstanding shares of preferred
stock for $26.25 million. In September 2006, the Company made a mandatory redemption of 17,500 shares of preferred stock for
$1. 7 5 milion.
NOTE 21. FAIR VALUE
The carng values of cash and cash equivalents, restrcted cash, accounts and notes receivable, accounts payable and the committed
lines of credit are reasonable estimates of their fair values. Long-term debt and long-term debt to affliated trsts are reported at
carng value on the Balance Sheets. The followig table sets fort the carrg value and estimated fair value of the Company's
financial instrments not reported at estimated fair value on the Balance Sheets as of December 31, 2008 and 2007 (dollars in
thousands):
2008 2007
Long-term debt
Long-term debt to affiliated trsts
Carrng
Value
$839,100
113,403
Estimated
Fair Value
$875,451
102,027
Carrng
Value
$943,660
113,403
Estimated
Fair Value
$969,899
109,109
These estimates of fair value were primarily based on available market information.
I FERC FORM NO.2 (ED.
12-88) Page 123.20
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Energy commodity derivative assets and liabilities, deferred compensation assets, as well as derivatives related to interest rate swap
agreements, are reported at estiated fair value on the Balance Sheets. As disclosed in Note 2, on Januar 1,2008, the Company
adopted the provisions of SF AS No. 157 related to its financial assets and liabilities and nonfiancial assets and liabilities measured at
fair value on a recurng basis. SF AS No. 157 establishes a fair value hierarchy that priorities the inputs used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1
measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
The three levels of the fair value hierarchy defined by SFAS No. 157 are as follows:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities. Active markets are those in which
tranactions for the asset or liability occur with suffcient frequency and volume to provide pricing information on an ongoing
basis.
Level 2 - Pricing inputs are other than quoted prices in active markets included in Levell, which are either directly or
indirectly observable as of the reporting date. Level 2 includes those financial instrments that are valued using models or
other valuation methodologies. These models are primarily industry-standard models that consider various assumptions,
including quoted forward prices for commodities, time value, volatility factors, and curent market and contractul prices for
the underlying instrments, as well as other relevant economic measures. Substantially all of these assumptions are
observable in the marketplace throughout the full term of the instrment, can be derived from observable data or are
supported by observable levels at which transactions are executed in the marketplace.
Level 3 - Pricing inputs include significant inputs that are generally unobservable from objective sources. These inputs may
be used with internally developed methodologies that result in management's best estiate of fair value. Level 3 instrments
include those that may be more strctured or otherwse tailored to the Company's needs.
As required by SF AS No. 157, fiancial assets and liabilities are classified in their entirety based on the lowest level of input that is
signficant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value
measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair
value hierarchy levels.
The followig table discloses by level within the fair value hierarchy the Company's assets and liabilities measured and reported on the
Balance Sheet as of December 31,2008 at fair value on a recurring basis (dollars in thousands):
Counterpart
Levell Level 2 Level 3 Netting Total
Assets:
Energy commodity derivatives $$40,104 $68,047 $(47,604)$60,547
Deferred compensation assets 6,990 6,990
Interest rate swaps 875 875
Total $6,990 $40,979 $68,047 $(47,604)$68.412
Liabilties:
Energy commodity derivatives $ -$110,123 $16,085 $(47,604)$78,604
Avista Corp. enters into forward contracts to purchase or sell a specified amount of energy at a specified time, or during a specified
period, in the future. These contracts are entered into as part of our management of loads and resources and certin contracts are
considered derivative instrments. The difference between the amount of derivative assets and liabilities disclosed in respective levels
and the amount of derivative assets and liabilities disclosed on the Balance Sheets and at Note 7 is due to netting arangements with
certain counteipares. The Company uses quoted market prices and forward price curves to estimate the fair value of our utility
derivative commodity instruments included in Level 2. In particular, electric derivative valuations are pedormed using broker quotes,
adjusted for periods in between quotable periods. Natual gas derivative valuations are estimated using New York Mercantile
Exchange (NMEX) pricing for similar instrents, adjusted for basin differences, which are also quoted under NYEX. Where
observable inputs are available for substantially the full term of the contract, the derivative asset or liability is included in Level 2. The
Company also has certin contracts that, primarily due to the length of the respective contract, require the use of internally developed
forward price estimates, which include significant inputs that may not be observable or corroborated in the market. These derivative
I FERC FORM NO.2 (ED. 12-88)Page 123.21
Name of Respondent This Report is:Date of Report Year/Period of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/1612009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
contracts are included in Level 3. Refer to Note 7 for fuer discussion of the Company's energy commodity derivative assets and
liabilities.
Deferred compensation assets and liabilities represent fuds held by the Company in a Rabbi Trust for an Executive Deferral Plan.
These fuds consist of actively traded equity and bond fuds with quoted prices in active markets. The balance disclosed excludes
cash and cash equivalents of$1.8 million.
The following table presents activity for energy commodity derivative assets measured at fair value using significant unobservable
inputs for the year ended December 31 (dollars in thousands):
Balance as of January 1,2008
Total gains or losses (realized/unealized)
Included in net income
Included in other comprehensive income
Included in regulatory assets/liabilities (1)
Purchases, issuances, and settlements, net
Transfers to other categories
Balance as of December 31,2008
2008
$98,943
(22,586)
(8,310)
$68.047
The following table presents activity for energy commodity derivative liabilities measured at fair value using significant unobservable
inputs for the year ended December 31 (dollars in thousands):
Balance as ofJanuary 1,2008
Total gains or losses (realized/unealized)
Included in net income
Included in other comprehensive income
Included in regulatory assets/liabilities (1)
Purchases, issuances, and settlements, net
Transfers to other categories
Balance as of December 31, 2008
2008
$36,506
(18,715)
(1,706)
$16,085
(1) In conjunction with the provisions of SF AS No. 133, the WUTC and the IPUC issued accounting orders authorizing Avista Corp.
to offset any derivative assets or liabilities with a regulatory asset or liability. This accountig treatment is intended to defer the
recognition of mark-to-market gains and losses on energy commodity tractions until the period of settlement. As such, the
Company does not recognze unealized gains or losses on utility energy commodity derivative instrents in the Statements of
Income. The Company recognzes realized gains or losses in the period of contract settlement, subject to regulatory approval for
recovery though retail rates. Realized gains and losses, subject to regulatory approval, result in adjustments to retail rates though
purchased gas cost adjustments, the ERM and the PCA mechanism.
NOTE 22, COMMON STOCK
In November 1999, the Company adopted a shareholder rights plan pursuant to which holders 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, initially evidenced by and traded with the shares of common stock, entitles 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 wil 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
would 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) tht has a market value at that tie equal to twce the purchase price. In no event wil 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$O.OI per Right, by the Board of Directors of the Company at any time until any person or group has acquired 10
I FERC FORM NO.2 (ED. 12-88) Page 123.22
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
percent or more of the common stock. In connection with the proposed statutory share exchange (see Note 27), the shareholder rights
plan was amended to provide that the Rights wil expire upon the earlier of the effective time of the statutory share exchange or March
31, 2009 (the origially scheduled expiration date).
The Company has a Direct Stock Purchase and Dividend Reinvestment Plan under which the Company's shareholders may
automatically reinvest their dividends and make optional cash payments for the purchase of the Company's common stock at curent
market value.
The payment of dividends on common stock is restrcted by provisions of certain covenants applicable to preferred stock contained in
the Company's Aricles ofIncorporation, as amended.
In December 2006, the Company entered into a sales agency agreement with a sales agent, to issue up to 2 milion shares of its
common stock from time to time. In 2008, the Company issued 750,000 shares (total net proceeds of$16.6 million) under the sales
agency agreement.
NOTE 23. EARINGS PER COMMON SHA
The followig table presents the computation of basic and diluted earings per common share for the years ended December 31 (in
thousands, except per share amounts):
2008 2007 2006
Numerator:
Net income $73,620 $38,475 $72,941
Subsidiary earngs adjustment for dilutive securities --(349)
Adjusted net income for computation of
diluted earnings per common share $73.371 $38,126 $72,941
Denominator:
Weighted-average number of common shares
outstanding-basic 53,637 52,796 49,162
Effect of dilutive securties:
Contingent stock awards 213 168 371
Stock options ~~--
Weighted-average number of common shares
outstanding-diluted 54,028 53.263 49,897
Total earnings per common share, basic $1.7 $0.73 $1.48
Total earnings per common share, diluted $1.6 $0.72 $1.46
Total stock options outstanding that were not included in the calculation of diluted earnings per common share were 250,950 for 2008,
303,950 for 2007 and 26,200 for 2006. These stock options were excluded from the calculation 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.
NOTE 24. STOCK COMPENSATION PLANS
1998 Plan
In 1998, the Company adopted, and shareholders approved, the Long-Term Incentive Plan (1998 Plan). Under the 1998 Plan, certain
key employees, offcers and non-employee directors of the Company and its subsidiaries may be granted stock options, stock
appreciation rights, stock awards (including restricted stock) and other stock-based awards and dividend equivalent rights. The
Company has available a maximum of3.5 million shares of its common stock for grant under the 1998 Plan. As of December 31,
2008,0.7 milion shares were remaining for grant under this plan.
2000 Plan
In 2000, the Company adopted a Non-Officer Employee Long-Term Incentive Plan (2000 Plan), which was not required to be
approved by shareholders. The provisions of the 2000 Plan are essentially the same as those under the 1998 Plan, except for the
exclusion of non-employee directors and executive officers of the Company. The Company has available a maximum of2.5 milion
I FERC FORM NO.2 (ED. 12-88) Page 123.23
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
shares of its common stock for grant under the 2000 Plan. However, the Company curently does not plan to issue any fuer options
or securities under the 2000 Plan. As of December 31, 2008, 1.7 milion shares were remainng for grant under ths plan.
Stock Compensation
On January 1,2006, the Company adopted SFAS No. l23R, which supersedes APB No. 25 and SFAS No. 123 and their related
implementation guidance. The statement requires that compensation cost relating to share-based payment transactions be recognized
in the financial statements based on the fair value of the equity or liability instrents issued. The Company adopted SFAS No. l23R
using the modified prospective method and, accordingly, fmancial statement amounts for prior periods presented were not restated to
reflect the fair value method of recognzing compensation expense relating to share-based payments. The Company recorded
stock-based compensation expense of$3.0 millon for 2008, $2.7 milion for 2007 and $4.0 milion for 2006. The total income tax
benefit recognized in the Statements ofIncome was $1.1 million for 2008, $1.0 milion for 2007 and $1.5 milion for 2006.
Stock Options
The followig summarizes stock options activity under the 1998 Plan and the 2000 Plan for the years ended December 31:2008 2007 2006
Number of shares under stock options:
Options outstanding at beginning of year 1,411,911 1,541,045 2,095,211
Options granted
Options exercised (582,238)(123,134)(504,452)
Options canceled (81,000)(6,000)(49,714)
Options outstanding at end of year 748,673 1.411.911 1.541,045
Options exercisable at end of year 748,673 1.411.911 1.541.045
Weighted average exercise price:
Options granted $$$
Options exercised $13.91 $15.14 $16.12
Options canceled $21.70 $26.59 $20.77
Options outstading at end of year $15.85 $15.38 $15.41
Options exercisable at end of year $15.85 $15.38 $15.41
Intrnsic value of options exercised (in thousands)$4,248 $1,022 $3,520
Intrinsic value of options outstanding (in thousands)$2,643 $8,697 $15,256
Information for options outstanding and exercisable as of December 31, 2008 was as follows:
Range of
Exercise Prices
$10.1 7-$12.41
$15.88-$17.31
$19.34-$23.00
$26.59-$28.4 7
Total
Number
of Shares
393,323
104,400
230,750
20,200
748,673
Weighted
Average
Exercise
Price
$11.04
17.19
22.41
27.63
$15.85
Weighted
Average
Remaining
Life (in years)
3.4
1.
1.9
1.2
2.6
Total cash received from the exercise of stock options was $8.1 milion for 2008, $1.9 milion for 2007 and $9.9 milion for 2006. As
of December 31, 2008 and 2007, the Company's stock options were fully vested and expensed.
Restricted Shares
Restrcted shares vest in equal thids each year over a thee-year period and are payable in Avista Corp. common stock at the end of
each year if the servce condition is met. In addition to the servce condition, the Company must meet a retu on equity target in order
for the CEO's restrcted shares to vest. Durg the vesting period, employees are entitled to dividend equivalents which are paid when
dividends on the Company's common stock are declared. Restricted stock is valued at the close of market of the Company's common
stock on the grant date. The weighted average remaining vestig period for the Company's restrcted shares outstanding as of
December 31, 2008 was one year. The following table sumarzes restricted stock activity for the years ended December 31:
I FERC FORM NO.2 (ED. 12-88)Page 123.24
Name of Respondent This Report is:Date of Report Year/Period of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Unvested shares at begining of year
Shares granted
Shares cancelled
Shares vested
Unvested shares at end of year
Weighted average fair value at grant date
Unrecognzed compensation expense at end of year (in thousands)
Intric value, unvested shares at end of year (in thousands)
Intric value, shares vested durng the year (in thousands)
2008 2007 2006
28,137 36,180
43,400 31,860 36,260
(1,230)( 19,936)(80)
04,368)09,967)--
55,939 28,137 36,180
$20.05 $25.60 $21.2
$691 $517 $439
$1,084 $606 $916
$293 $461 $
Performance Shares
Performance share grants have vesting periods of thee years. Pedormance awards entitle the recipients to dividend equivalent rights,
are subject to forfeiture under certain circumstaces, and are 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 eventually vest.
Pedormance share awards entitle the grantee to shares of common stock or cash payable once the servce condition is satisfied. Based
on attainent of the performance condition, grantees may receive 0 to 150 percent of the original shares granted. The performance
condition used is the Company's Total Shareholder Return (TSR) performance over a three-year period as compared against other
utilities; under SFAS 123R this is considered a market based condition. Performance shares may be settled in common stock or cash
at the discretion of the Company. Historically, the Company has settled these awards though issuance of stock and intends to
continue this practice. These awards vest at the end of the thee-year period. Under Statement SF AS 123R, pedormance 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 measures (at the grant date) the estimated fair value of performance shares granted in accordance with the provisions of
SFAS No. 123R. The fair value of each performance share award was estimated on the date of grant using a statistical model that
incorporates the probability of meeting performance targets based on historical returns relative to a peer group. Expected volatility
was based on the historical volatility of Avista Corp. common stock over a thee-year period. The expected term of the performance
shares is thee years based on the performance cycle. The risk-free interest rate was based on the U.S. Treasur yield at the time of
grant. The compensation expense on these awards will only be adjusted for changes in forfeitues.
The following summarzes the weighted average assumptions used to determe the fair value of performance shares and related
compensation costs as well as the resultig estimated fair value of pedormance shares granted:
Risk-free interest rate
Expected life, in years
Expected volatility
Dividend yield
Weighted average grant date fair value (per share)
2008
2.2%
3
20.2%
2.8%
$16.96
The following sumarizes performance share activity:
The fair value includes both performance shares and dividend equivalent rights.
Opening balance of un vested performance shares
Performance shares granted
Performance shares canceled
Performance shares vested
Ending balance ofunvested performance shares
Intrnsic value ofunvested performance shares (in thousands)
FERC FORM NO.2 (ED. 12-88) Page 123.25
2008
207,841
170,100
(5,239)
019,779)
252,923
$4,902
2007
4.8%
3
19.4%
2.5%
$18.71
2007
300,406
114,640
(45,632)
061,73)
207,841
$4,477
2006
4.6%
3
21.9%
2.9%
$18.08
2006
318,331
138,710
(1,404)
055,231)
300.406
$7,603
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Unrecognized compensation expense (in thousands) $2,227 $2,058 $2,400
The weighted average remaining vesting period for the Company's performance shares outstading as of December 31, 2008 was 1.7
years. Unrecognzed compensation expense as of December 31,2008 will be recognzed durg 2009 and 2010. The followig
sumarizes the impact of the market condition on the vested performance shares:
2008 2007 2006
Performance shares vested 119,779 161,573 155,231
Impact of market condition on shares vested 21,560 (56,551) 34,151Shares of common stock earned 141.339 105,022 189,382
Intrinsic value of common stock earned (in thousands) $2,739 $2,262 $4,793
In 2008,2007 and 2006, the number of performance shares vested was adjusted by 18 percent, (35) percent and 22 percent due to the
performance condition achieved. Shares earned under this plan are distrbuted to participants in the quarter following vesting.
Awards 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 liability awards are
revalued on a quarerly basis taking into account the number of awards outstanding, historical dividend rate, and the change in the
value of the Company's common stock relative to an external benchmark. Over the life of these awards, the cumulative amount of
compensation expense recognzed will match the actul cash paid. As of December 31, 2008 and 2007, the Company had recognzed
compensation expense and a liability of$0.5 milion and $0.4 milion related to the dividend component of performance share grants.
NOTE 25. 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 ths 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 paricular matter because
litigation and other contested proceedings are inerently 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 though the rate making process.
With respect to matters discussed in this Note that affect Avista Energy (partcularly the Californa Refund Proceeding), any potential
liabilities or refuds remain at Avista Corp. and/or its subsidiaries and were not assumed by Shell Energy and/or its affliates.
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 A vista 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 A vista Corp. or A vista Energy knowingly
engaged in or facilitated any improper trading strategy; (2) no evidence that Avista Corp. or Avista Energy engaged in any efforts to
manipulate the western energy markets durng 2000 and 2001; and (3) that A vista Corp. and Avista Energy did not withold relevant
information from the FERC's inquiry into the western energy markets for 2000 and 2001. In April 2005 and June 2005, the California
Paries and the City of Tacoma, respectively, filed petitions for review of the FERC's decisions approving the Agreement in Resolution
with the United States Cour of Appeals for the Ninth Circuit (Ninth Circuit). Based on the FERC's order approving the Agreement in
Resolution and the FERC's denial of rehearg requests, the Company does not expect that this proceeding will have any material
adverse effect on its financial condition, results of operations or cash flows.
California Refund Proceeding
In July 2001, the FERC ordered an evidentiary hearig to determne the amount of refuds due to California energy buyers for
purchases made in the spot markets operated by the Californa Independent System Operator (CaUSO) and the Californa Power
Exchange (CalPX) during the period from October 2,2000 to June 20,2001 (Refund Period). The findings of the FERC
adminstrative 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 (MMCP) methodology. If the refuds required by the formula would cause a seller 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 limit its refund
liability commensurately. In September 2005, Avista Energy submitted its cost filing claim pursuant to the FERC's August 2005 order
and demonstrated an overall revenue shortfall for sales into the Californa spot markets during the Refund Period after the MMCP
methodology is applied to its transactions. That filing was accepted in orders issued by the FERC in January 2006 and November
I FERC FORM NO.2 (ED. 12-88)Page 123.26
Name of Respondent This Report is:Date of Report Year/Period of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
2006. In its February 2007 status report, the CaUSO stated that it intends to process Avista Energy's cost offset filing (see fuer
discussion regarding the California refud reru below).
In 2001, Pacific Gas & Electrc (PG&E) and Southern Californa Edison (SCE) defaulted on payment obligations to the CalPX and the
CaUSO. As a result, the CalPX and the CaUSO failed to pay varous energy sellers, including Avista Energy. Both PG&E and the
CalPX declared bankptcy in 2001. In March 2002, SCE paid its defaulted obligations to the CaIPX. In April 2004, PG&E paid its
defaulted obligations into an escrow fud in accordance with its banptcy reorganization. Funds held by the CalPX and in the
PG&E escrow fund are not subject to release until the FERC issues an order directing such release in the Californa refud proceeding.
As of December 31, 2008, Avista Energy's accounts receivable outstading related to defaulting parties in California were fully offet
by reserves for uncollected amounts and funds collected from defaulting parties.
In addition, in June 2003, the FERC issued an order to review bids above $250 per MW made by paricipants in the short-term energy
markets operated by the CalI SO and the CalPX from May 1, 2000 to October 2, 2000. In May 2004, the FERC provided notice that
Avista Energy was no longer subject to this investigation. In March and April 2005, the Californa Paries and PG&E, respectively,
petitioned for review of the FERC's decision by 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 were 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 fist round is limited to thee issues: (1) which pares are subject to the FERC's refund jurisdiction in light of the
exemption for governent-owned utilities in section 20I(f) of the Federal Power Act (FPA); (2) the temporal scope of refunds under
section 206 of the FPA; 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 refuds for sales made by municipal utilities in the California Refund Case. In its Order
on Remand, issued in October 2007, the FERC ordered the CaUSO and the CalPX to complete their refund calculations, including all
entities that participated in the CaUSO/CaIPX markets (including those amounts that would have been paid by muncipal utility entities
for their sales into the CaUSO and the CalPX spot markets during the refund period). The FERC then directed the CaUSO to reduce
refuds owed to refund recipients by the amounts attibutable to muncipal sales to the Californa markets.
In August 2006, the Ninth Circuit upheld October 2, 2000 as the refud effective date for the FP A section 206 Refud Proceeding, but
remanded to the FERC its decision not to consider a FP A section 309 remedy for tarff violations prior to October 2, 2000. The Ninth
Circuit also granted Californa's petition for review challenging the FERC's exclusion of the energy exchange transactions as well as
the FERC's exclusion offorward market transactions from the Californa refud proceedings. Petitions for rehearig were filed on
November 16,2007. 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.
The CaUSO continues to work on its compliance filing for the Refund Period, which will show "who owes what to whom." On
September 3,2008, the CaUSO filed its 42nd status report on the California recalculation process confirming that the preparatory and
the FERC refund recalculations are complete (as are calculations related to fuel cost allowance offsets, emission offsets, cost-recovery
offsets, and the majority of the interest calculations). The CaUSO states that there are eleven (l 1) open issues that the FERC must rule
on before any distrbution can be made. Once these issues are ruled on, the CaUSO states that it then intends to: (1) perform the
necessar adjustment to remove refuds associated with non~jurisdictional entities and allocate that shortfall to net refud recipients;
and (2) work with the parties to the various global settlements to make appropriate adjustments to the CalISO's data in order to
properly reflect those adjustments.
Any potential liabilities or refunds owed by or to Avista Energy in the California Refud Proceeding were retained by Avista Corp.
and/or its subsidiaries and have not been transferred to Shell Energy and/or its affliates.
Because the resolution of the California refud proceeding remains uncertain, legal counsel cannot express an opinion on the extent of
the Company's liability, if any. However, based on information currently lcown 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 primarly due to the fact that FERC orders have stated that any refuds wil be netted against unpaid amounts owed
to the respective paries and the Company does not believe that refuds would exceed unpaid amounts owed to the Company.
Pacifc Northwest Refund Proceeding
In July 2001, the FERC initiated a prelimnary evidentiary hearg to develop a factual record as to whether prices for spot market
sales of wholesale energy in the Pacific Nortwest between December 25, 2000, and June 20, 2001, were just and reasonable. Durng
the hearig, Avista Corp. and Avista Energy vigorously 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 Nortwest refud
proceedings, after finding that the equities do not justify the imposition of refunds. These equitable factors included the fact that the
I FERC FORM NO.2 (ED. 12-88) Page 123.27
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
paricipants in the Pacific Nortwest market include not only utilities and other entities that are subject to FERC jursdiction, but also a
very substantial number of goverrental entities that are not subject to FERC jurisdiction with respect to wholesale sales and thus
could not be ordered by the FERC to make refuds based on existing law. Seven petitions for review were filed with the Ninth Circuit
challenging the merits of the FERC's decision not to order refuds and raising procedural issues.
On August 24, 2007, the Ninth Circuit issued its opinon on the consolidated petitions for review of the Pacific Nortwest refud
proceeding. The Ninth Circuit found that the FERC, in denying the request for refuds, had failed to take into account new evidence
of market manipulation in the Californa energy market and its potential ties to the Pacific Nortwest energy market and that such
failure was arbitrary and capricious and, accordingly, remanded the case to the FERC, stating that the FERC's findings must be
reevaluated in light of the evidence. In addition, the Ninth Circuit concluded that the FERC abused its discretion in denying potential
relief for transactions involving energy that was purchased in the Pacific Nortwest and ultimately consumed in California. The Ninth
Circuit expressly declined to direct the FERC to grant refunds. Requests for rehearig were fied on December 17, 2007.
Both Avista Corp. and Avista Energy were buyers and sellers of energy in the Pacific Nortwest energy market during the period
between December 25, 2000, and June 20, 200 i, and, if refuds were ordered by the FERC, could be liable to make payments, but also
could be entitled to receive refuds from other FERC-jursdictional entities. The opportnity to make claims against non-jursdictional
entities may be limited based on existing law. The Company cannot predict the outcome of this proceeding or the amount of any
refunds that A vista Corp. or A vista Energy could be ordered to make or could be entitled to receive. Therefore, the Company cannot
predict the potential impact the outcome of ths matter could ultimately have on the Company's results of operations, fiancial
condition or cash flows.
California Attorney General Complaint
In May 2002, the FERC conditionally dismissed a complaint filed in March 2002 by the Attorney General of the State of California
(California AG) that alleged violations of the Federal Power Act by the FERC and all sellers (including Avista Corp. and its
subsidiaries) of electric power and energy into Californa. The complaint alleged that the FERC's adoption and implementation of
market-based rate authority was flawed and, as a result, individual sellers should 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 sellers to re-fie certain
transaction sumaries. It was not clear that Avista Corp. and its subsidiaries were subject to this directive but the Company took the
conservative approach and re-fied certain transaction sumaries in June and July of2002. In July 2002, the California AG requested
a rehearig on the FERC order, which request was denied in September 2002. Subsequently, the California AG fied a Petition for
Review of the FERC's decision with the Ninth Circuit. In September 2004, the Ninth Circuit upheld the FERC's market-based rate
authority, but held tht the FERC erred in ruling that it lacked authority to order refuds for violations of its reporting requirement.
The Court remanded the case for further proceedings, but did not order any refuds leaving it to the FERC to consider appropriate
remedial options. Nonetheless, the California AG has interpreted the decision as providing authority to the FERC to order refuds in
the California refud proceeding for an expanded refud period.
In March 2008, the FERC issued an order establishing a tral-tye hearing to address "whether any individual public utility seller's
violation of the Commission's market-based rate quarterly reportng requirement led to an unjust and unreasonable rate for that
particular seller in California during the 2000-2001 period." Purchasers in the California markets wil be allowed to present evidence
that "any seller that violated the quarerly reporting requirement failed to disclose an increased market share suffcient to give it the
ability to exercise market power and thus cause its market-based rates to be unjust and unreasonable." In partcular, the parties are
directed to address whether the seller at any point reached a 20 percent generation market share theshold, and if the seller did reach a
20 percent market share, whether other factors were present to indicate that the seller did not have the ability to exercise market power.
Based on information currently known to the Company's management, the Company does not expect that this matter wil have a
material adverse effect on its financial condition, results of operations or cash flows.
State of Montana Proceedings
The Attorney General of the State of Montana (Montana AG) 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, anti competitive or abusive practices"
and order refuds when consumers were forced to pay more than just and reasonable rates. In February 2004, the MPSC issued an
order initiating investigation of the Montana retail electrcity market for the purpose of determining whether there is evidence of
unlawfl manipulation of that market. The Montana AG requested specific information from A vista Energy and A vista Corp.
regarding their transactions within the state of Montana during the period from January 1, 2000 though December 31, 2001. In
December 2008, the MPSC closed the Docket and terminated the investigation, subject to the receipt of a final report from the
MontanaAG.
I FERC FORM NO.2 (ED.
12-88) Page 123.28
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Colstrip Generating Project Complaints
In May 2003, various parties (all of which are residents or businesses of Colstrip, Montana) filed complaints 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 alleged damages to buildings as a result offoundation settlement caused by seepage from Colstrip's freshwater surge
pond. Avista Corp.'s ownership interest in the freshwater surge pond is approximately 11 percent. The plaintiffs also alleged
contamination and trespass damages resulting from leakage from several of Colstrp's process ponds, most of which are for Units i &
2 ponds of which Avista Corp. has no ownership interest. In April 2008, the owners of Colstrip reached a settlement with the
plaintiffs. Under the settlement, Avista Corp.'s portion of the payment to the plaintiffs was $2.1 milion. Avista Corp. may be able to
recover a portion of this payment through insurance. The Company filed petitions with the WUTC and the IPUC to defer any
payments as a regulatory asset, in order to allow for potential futue recovery through future rates. On September 12, 2008, the IPUC
issued its order approving the Company's petition. The WUTC petition was subsequently withdrawn and the portion related to the
Washigton jurisdiction of$1.3 milion was expensed in 2008.
In March 2007, two families that own propert near the holding ponds from Units 3 & 4 of Colstrp fied a complaint againt the
owners of Colstrp and Hydrometrcs, Inc. in Montana Distrct Cour. The plaintiffs allege that the holding ponds and remediation
activities have adversely impacted their propert. They allege contamination, decrease in water tables, reduced flow of streams on
their propert and other similar impacts to their propert. They also seek puntive damages, attorney's fees and other relief simlar to
that asserted in the litigation described above. No tral date has been set. Because the resolution of this complaint remain uncertin,
legal counsel caiiot express an opinion on the extent, if any, of the Company's liability. However, based on information curently
known to the Company's management, the Company does not expect this complaint will have a material adverse effect on its fiancial
condition, results of operations or cash flows.
Colstrip Royalty Claim
Western Energy Company (WECO) supplies coal to the owners of Colstrp Units 3 & 4 under a Coal Supply Agreement and a
Transportation Agreement. Avista Corp. own a 15 percent interest in Colstrip Units 3 & 4. The Minerals Management Servce
(MMS) of the United States Departent of the Interior has issued orders, going back to 199 i, to WECO to pay additional royalties
concerning coal delivered to Colstrip Units 3 & 4 via the conveyor belt. The owners of Colstrp Units 3 & 4 take delivery of the coal
at the begining of the conveyor belt.
The orders assert that additional royalties are owed to MMS as a result of WECO not paying royalties in coiiection with revenue
received by WECO from the owners of Colstrip Units 3 & 4 under the Transportation Agreement durig the period October 1, 1991
though December 31, 2007.
The state of Montana also filed claims assessing additional coal production taxes on Coal Transportation Agreement revenues
collected by WECO from the owners of Colstrip Units 3 & 4. Settlement of production tax claims has recently occured between
WECO and the Montana Departent of Revenue.
WECO and the owners of Colstrip Units 3 & 4 have agreed to a cost sharg agreement for the payment of the settements owed to the
Montaa Departent of Revenue for coal production taxes and for the MMS royalty claims as they are determed though litigation
or settlement. Avista Corp. estimates that its share of the royalties, taxes and interest alleged would be $2.1 milion including payment
for the calendar year 2008.
Based on information curently known to the Company's management, the Company does not expect that ths 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, though the ratemakng process, of any amounts paid.
Harbor Oil Inc. Site
Avista Corp. used Harbor Oil Inc. (Harbor Oil) for the recycling of waste oil and non-PCB transformer oil in the late 1980s and early
1990s. In June 2005, the Environmental Protection Agency (EPA) Region 10 provided notification to A vista Corp. and several other
parties, as customers of Harbor Oil, that the EPA had determined that hazardous substances were released at the Harbor Oil site in
Portland, Oregon and that Avista Corp. and several other parties may be liable for investigation and cleanup of the site under the
Comprehensive Environmental Response, Compensation, and Liability Act, commonly referred to as the federal "Superfnd" law,
which provides for joint and several liability. The initial indication from the EPA is that the site may be contaminated with PCBs,
I FERC FORM NO.2 (ED. 12-88) Page 123.29
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1 ) LÇ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
petroleum hydrocarbons, chlorinated solvents and heavy metals. Six potentially responsible paries, including Avista Corp., signed an
Admistrative Order on Consent with the EPA on May 31, 2007 to conduct a remedial investigation and feasibility study (RIS).
The total cost of the RIS is estimated to be $1.2 millon and will take approximately 2 1/2 years to complete. The actul cleanup, if
any, will not occur until the RIS is complete. Based on the review of its records related to Harbor Oil, the Company does not believe
it is a major contributor to ths potential environmental contamation based on the de minimus volume of waste oil it delivered to the
Harbor Oil site. However, there is curently not enough informtion to allow the Company to assess the probability or amount of a
liability, if any, being incured. As such, it is not possible to make an estimate of any liability at ths time.
Lake Coeur d'Alene
In July 1998, the United States District Cour for the Distrct of Idaho issued its finding that the Tribe own, among other things,
portions of the bed and bank of Lake Coeur d Alene (Lake) lying within the current boundaries of the Tribe's reservation lands. This
action had been brought by the United States on behalf of the Tribe against the state ofIdaho. Avista Corp. was not a par to this
action. The United States District Court decision was affrmed by the United States Cour of Appeals for the Ninth Circuit. The
United States Supreme Cour affrmed ths decision in June 2001. This ownership decision resulted in, among other thngs, A vista
Corp. being liable to the Tribe for water storage on the Tribe's land and for Section 1O(e) payments.
The Company's Post Falls Hydroelectrc Generating Station (Post Falls), a facility constrcted in 1906 with annual generation of 10
average megawatts controls the water level in the Lake for portions of the year (including portions of the lakebed owned by the Tribe).
The Company has other hydroelectrc generating facilities on the Spokane River downstream of Post Falls.
In December 2008, Avista Corp., the Tribe and the United States DOl finalized an agreement regarding a range of issues related to
Post Falls and the Lake. The agreement establishes the amount of past and futue compensation Avista Corp. will pay for the use of
the Tribe's reservation lands under Section 10(e) of the Federal Power Act (Section 1O(e) payments) and issues related to licensing of
the Company's hydroelectrc generating facilities located on the Spokane River (see Spokane River Relicensing below).
Avista Corp. agreed to compensate the Tribe a total of$39 million ($25 milion paid in 2008, $10 milion paid in 2009 and $4 milion
paid in 2010) for trespass and Section 1 O( e) payments for past storage of water for the period from 1907 though 2007. A vista Corp.
agreed to compensate the Tribe for futue storage of water though Section 1 O( e) payments of $0.4 milion per year beginning in 2008
and continuing through the first 20 years of a new license and $0.7 milion per year though the remaining term of the license.
In addition to Section 1 O( e) payments, A vista Corp. agreed to make anual payments over the life of a new FERC license to fud a
variety of protection, mitigation and enhancement measures on the Coeur d Alene Reservation required under Section 4(e) of the
Federal Power Act. These payments involve creation of a Coeur d Alene resource protection trst fud (the Trut Fund). Anual
payments from the Company to the Trust Fund for protection, mitigation and enhancement measurements would commence with the
issuance of a new FERC license and are expected to total approximately $100 milion over an assumed 50-year license term.
In September 2008, as par of the settlement of the Company's general rate case the IPUC approved deferral of the Idaho jurisdictional
allocation of amounts paid to the Tribe, the Trust Fund or related to the licensing of its hydroelectrc generating facilities for later
recovery though rates in a subsequent general rate filing. Avista Corp. included these items in its general rate case fied in January
2009. In December 2008, the WUTC approved a settlement of the Company's general rate case filing which provides similar
treatment of the Washington jurisdictional allocation of amounts paid to the Tribe, the Trust Fund or related to the licensing of its
hydroelectric generating facilities.
On January 27,2009, the Public Counsel Section of the Washigton Attorney General's Offce (Public Counsel) filed a Petition for
Judicial Review of the WUTC's recent order approving the settlement of the Company's general rate case. Public Counsel raised a
number of issues that were previously argued before the WUTC. These include whether settlement costs associated with resolving the
dispute with the Tribe were prudent and whether recovery ofsuch costs would constitute ilegal "retroactive ratemaking." The appeals
process may take several months and a decision is not expected until later in 2009. The cour wil either affrm the decision of the
WUTC in its entirety or reverse the decision, in whole or in par, and remand the matter back to the WUTC for furter consideration,
which could possibly result in refunds.
Spokane River Relicensing
The Company owns and operates six hydroelectric plants on the Spokane River, and five of these (Long Lake, Nine Mile, Upper Falls,
Monroe Street and Post Falls, which have a total present capability of 144.1 MW) are under one FERC license and are referred to as
I FERC FORM NO.2 (ED. 12-88) Page 123.30
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
the Spokane River Project. The sixth, Little Falls, is operated under separate Congressional authority and is not licensed by the FERC.
Since the FERC was unable to issue new license orders prior to the August 1,2007 (and subsequent August 1, 2008) expiration of the
current license, an annual license was issued for all five plants, in effect extending the current license and its conditions until August 1,
2009. The Company has no reason to believe that Spokane River Project operations will be interrpted in any maner relative to the
timing of the FERC's actions.
The Company filed a Notice ofIntent to Relicense in July 2002. The formal consultation process involving plannng and inormation
gathering with stakeholder groups lasted though July 2005, when the Company filed its new license applications with the FERC. The
Company intially requested the FERC to consider a license for Post Falls, which has a present capability of 18 MW, separately from
the other four hydroelectric plants due to the complexity of issues related to the Post Falls development. 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. FERC licenses are granted for terms of30 to 50 years.
Since the Company's July 2005 filing of applications to relicense the Spokane River Project, the FERC has continued various stages
of processing the applications. In May 2006, the FERC issued a notice requesting other paries to provide terms and conditions
regarding the two license applications. In response to that notice, a number of paries including the Tribe, the state of Idaho,
Washington state agencies, and the United States DOl filed either recommended terms and conditions, pursuant to Sections 1O(a) and
10(j) of the Federal Power Act (FP A), or mandatory conditions related to the Post Falls application, pursuant to Section 4( e) of the
FP A. In Januar 2007, the FERC issued a draft Environmental Impact Statement (EIS). After review of comments, the FERC issued
a final EIS in July 2007. This was the last administrative step for the FERC before the issuance oflicense orders; however, the FERC
was unable to move forward prior to Federal Clean Water Act 401 Water Quality Certifications (Certifications) being issued by the
states of Idaho and Washington.
The states ofIdaho and Washington issued Certifications for the Project on June 5, 2008 and June 10,2008, respectively. The Idaho
Certification was based on a Settlement Agreement between Avista Corp., Idaho Departent of Envionmental Quality and the Idaho
Deparent ofFish and Game, and is finaL. The Washington Certification, which was issued by the Washigton Departent of
Ecology (Ecology); however, was appealed by Avista Corp., Inland Empire Paper and the Sierra Club/Center for Environmental Law
and Policy. All issues, with the exception of one appealed by the Sierra Club/Center for Environmental Law and Policy (aesthetic
spils at the Upper Falls plant) were resolved though a four-part Settlement Agreement. Avista Corp. is continuing negotiations on
the remaining issue. A hearing is scheduled before the Washington Pollution Control Hearing Board in August 2009 to address the
remaining issue under appeaL.
On December 16, 2008 Avista, the United States DOl, and the Tribe reached agreement resolvig Federal Power Act Section 4(e)
conditions, as well as the payment of anual charges under Section 10(e) of the FPA regarding Post Falls, which stores water on a
portion of the Coeur d Alene Indian Reservation. The thee parties submitted a request to the FERC on Januar 29,2009 to
incorporate the agreed-upon terms and conditions in a new single 50-year license for all five Spokane River hydroelectrc plants.
The United States Departent ofFish and Wildlife concurred, via a letter to FERC on July 31, 2008, that the Spokane River Project is
not likely to adversely affect any listed or theatened endangered species.
Avista Corp. can not determine exactly when the FERC will complete action on the applications. Once granted, a new license will
describe the final conditions Avista Corp. will be responsible to implement, and the term for a new license.
The Company's estimate of the potential cost of the conditions proposed for the Spokane River Project, based on estimates of what it
would cost to implement the recommendations and conditions included in the FERC's FEIS and the numerous Settlement Agreements,
total approximately $305 milion over a 50-year period.
In addition, the December 16, 2008 settlement agreement between the Company and the Tribe resolved FPA Section 10(e), or storage
payments related to the Post Falls hydroelectric facility. Under the Agreement, Avista Corp. wil pay the Tribe $0.4 milion annually
for the first 20 years of a new FERC license and $0.7 million annually for the remainder of the license term for section 1O(e) chages.
The WUTC approved, for futue recovery, costs incurred in relicensing the Spokane River project, as well as the costs related to
settlement with the Tribe. The WUTC approved deferred accounting treatment, with a carrng cost, until these costs are reflected in
I FERC FORM NO.2 (ED. 12-88)Page 123.31
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
future retail rates. The IPUC approved simlar deferred accountig treatment. Ou general rate cases, filed in Januar 2009, reflect
recovery of both the direct and deferred costs. The Company will continue to seek recovery, though the ratemakng process, of all
operating and capitalized costs related to the relicensing of the Spokane river plants.
Clark Fork Settlement Agreement
Dissolved atmospheric gas levels exceed state of Idaho and federal water quality standards downstream of the Cabinet Gorge
Hydroelectrc Generating Project (Cabinet Gorge) durng periods when excess river flows must be diverted over the spilway. 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 developed the Gas Supersaturation Control Program (GSCP). The Idaho Departent of
Environmental Quality and the USFWS 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, potentially, both of the two existing diversion tunnels built when
Cabinet Gorge was originally constrcted. When river flows exceed the capacity of the powerhouse tubines, the excess flows would
be diverted to the tuels rather than released over the spilway. The Company has undertken physical and computer modeling
studies to confirm the feasibility and likely effectiveness of the tunnel solution. Analysis of the predicted total dissolved gas
performance indicates that the tunnels will not meet the performance criteria anticipated in the GSCP. In August 2007, the Gas
Supersatuation Subcommittee concluded that the tuel project does not meet the expectations of the GSCP and is not an acceptable
project. As a result, the Company has met and will contiue meeting with key stakeholders to review and amend the GSCP which
includes developing alternatives to the constrction of the tuels. The Company has expended $5.0 millon on the tuel project.
The WUTC and IPUC have accepted the recovery of these costs though rates.
The USFWS has listed bull trout as theatened under the Endangered Species Act. The Clark Fork Settlement Agreement describes
programs intended to restore bull trout populations in the project area. Using the concept of adaptive management and working closely
with the USFWS, the Company is evaluating the feasibility offish passage at Cabinet Gorge and Noxon Rapids. The results of these
studies will help the Company and other parties determine the best use of fuds toward continuing fish passage efforts or other bull
trout population enhancement measures.
Air Quality
The Company must be in compliance with requirements under the Clean Air Act and Clean Air Act Amendments for its thermal
generating plants. The Company continues to monitor legislative developments at both the state and national level for the potential of
furter restrictions on sulfur dioxide, nitrogen oxide and carbon dioxide, as well as other greenhouse gas and mercur emissions.
In 2006, the Montana Departent of Environmental Quality (Montana DEQ) adopted final rules for the control of mercur emissions
from coal-fired plants. The new rules set strct mercury emission limits by 2010, and put in place a recurring ten-year review process
to ensure facilities are keeping pace with advancing technology in mercury emission control. The rules also provide for temporar
alternate emission limits provided certain provisions are met, and they allocate mercur emission credits in a manner that rewards the
cleanest facilities.
Compliance with new and proposed requirements and possible additional legislation or regulations will result in increases to capital
expenditures and operating expenses for expanded emission controls at the Company's thermal generating facilities. The Company,
along with the other owners of Colstrp, completed the first phase of testing on two mercury control technologies. The joint owners of
Colstrip were encouraged by preliminar results and believe that we will be able to comply with the Montana law without utilizing the
temporar alternate emission limit provision. Prelimnar estiates indicate that the Company's share of installation capital costs will
be $ 1.5 million and anual operating costs wil increase by $2.9 millon (beginng in late-2009). The Company will contiue to seek
recovery, though the ratemaking process, of the costs to comply with various air quality requirements.
Residential Exchange Program
The residential exchange program is intended to provide access to the benefits of low-cost federal hydroelectrcity to residential and
small-farm customers of the region's private (investor owned) and public (governental or customer owned) utilities. The Bonneville
Power Administration (BPA) administers the residential exchange program under the Nortwest Power Act. Previously, Avista Corp.
and other private utilities in the Pacific Nortwest executed settlement agreements with BP A to resolve each part's rights and
obligations under the residential exchange program. These settlements covered payment of benefits for the period October 1, 2001,
though September 30,2011. On May 3,2007, the Ninth Circuit ruled that the BPA exceeded its authority when it entered into the
settlement agreements with private utilities (including Avista Corp.) for the period from 2001 through 2011.
I FERC FORM NO.2 (ED. 12-88)Page 123.32
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
In Februry 2008, the BP A initiated its WP-07 Supplemental rate case (WP-07S) to, among other thgs, determe the level of
benefits for customers served by private utilities (including Avista Corp.) for its fiscal year 2009. In addition to resolving residential
exchange issues for the long-term, the BPA also proposed an interim payout to private utilities for its fiscal year 2008, which included
$9.6 milion for customers of Avista Corp. Rate adjustments to pass though the interim payment to Avista Corp.'s customers were
approved by the WUC and IPUC in April 2008. In September 2008, the BPA issued its fial Record of Decision in WP-07S. Avista
Corp. is evaluating the BPA's finl Record of Decision, and may tae steps to challenge the BPA's final Record of Decision. Avista
Corp. has executed new Residential Exchange contracts with the BP A, for customer benefits in 2009. Rate adjustments to pass
though the payments in the amount of $2.4 milion for the period November 1, 2008 though October 31, 2009 have been approved by
the WUTC and IPUC.
Since the residential exchange settlement payments are passed through to A vista Corp.' s customers as adjustments to electric bils,
there is no effect on Avista Corp.'s net income or cash flows.
Other Contingencies
In the normal course of business, the Company has various other legal claims and contingent matters outstanding. The Company
believes that any ultimate liability arising from these actions wil not have a material adverse impact on its financial condition, results
of operations or cash flows. It is possible that a change could occur in the Company's estimates of the probability or amount of a
liability being incurred. Such a change, should it occur, could be significant.
The Company routinely assesses, based on in-depth studies, expert analyses and legal reviews, its contingencies, obligations and
commitments for remediation of contaminated sites, including assessments of ranges and probabilities of recoveries from other
responsible parties who have and have not agreed to a settlement and recoveries from insurance carriers. The Company's policy is to
accrue and charge to curent expense identified exposures related to environmental remediation sites based on estimates of
investigation, cleanup and monitoring costs to be incured.
The Company has potential liabilities under the Federal Endangered Species Act for species of fish that have either already been added
to the endangered species list, been listed as "theatened" or been petitioned for listing. Thus far, measures adopted and implemented
have had minimal impact on the Company.
Under the federal licenses for its hydroelectrc projects, the Company is obligated to protect its propert rights, including water rights.
The state of Montana is examining the status of all water right claims within state boundaries. Claims withn the Clark Fork River
basin could potentially adversely affect the energy production of the Company's Cabinet Gorge and Noxon Rapids hydroelectrc
facilities. The Company is participating in ths extensive adjudication process, which is unikely to be concluded in the foreseeable
futue.
As of December 3 i, 2008, the Company's collective bargaining agreement with the International Brotherhood of Electrical Workers
represented approximately 50 percent of all of A vista 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 2010. Two local
agreements in Oregon, which cover approximately 50 employees, expire in April 2010.
NOTE 26. REGULATORY MATTERS
The following is a sumary of the Company's authorized rates ofretu in each jurisdiction:
Jursdiction and service
Washington electrc and natural gas
Idaho electric and natual gas
Oregon natural gas
Implementation
Date
January 2009
October 2008
April 2008
Authorized
Overall Rate
ofRetu
8.22%
8.45%
8.21%
Authorized
Retu on
Equity
10.2%
10.2%
10.0%
Authorized
Equity
Level
46%
48%
50%
Washington General Rate Cases
As approved by the WUC, on January 1, 2008, electrc rates for the Company's Washigton customers increased by an average of
9.4 percent, which was designed to increase annual revenues by $30.2 milion. As par of ths general rate increase, the base level of
power supply costs used in the ERM calculations was updated. Also, on January 1,2008, natual gas rates increased by an average of
I FERC FORM NO.2 (ED.
12-88) Page 123.33
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
1.7 percent, which was designed to increase annual revenues by $3.3 million.
In September 2008, the Company entered into a settlement stipulation with respect to its general rate case that was fied with the
WUC in March 2008. Other paries to the settlement stipulation are the staff of the WUC, Nortwest Industrial Gas Users, and the
Energy Project. The Industral Customers of Nortwest Utilities (lCND joined in portions of the settlement and the Public Counel
Section of the Washington Attorney General's Offce (Public Counsel) did not join in the settlement stipulation. This settlement
stipulation was approved by the WUTC in December 2008. The new electrc and natual gas rates became effective on Januar 1,
2009. As agreed to in the settlement, base electrc rates for the Company's Washington customers increased by an average of9.1
percent, which is designed to increase anual revenues by $32.5 millon. Base natual gas rates for the Company's Washington
customers increased by an average of 2.4 percent, which is designed to increase anual revenues by $4.8 milion.
On January 27,2009, Public Counsel fied a Petition for Judicial Review of the WUTC's recent order approving the Company's
multipart settlement. Public Counsel raised a number of issues that were previously argued before the WUTC. These include
whether settement costs associated with resolving the dispute with the Coeur d Alene Tribe were prudent and whether recovery of
such costs would constitute ilegal "retroactive ratemaking." Public Counel also questioned whether the WUC's decision to
entertain supplemental testimony by the Company to update its fiing for power supply costs durg the course of the proceedings was
appropriate. Finally, Public Counsel argued that the settlement improperly included advertising costs, dues and donations, and certain
other expenses.
The appeal itself does not prevent the new rates from going into effect. The appeals process may take several months and a decision is
not expected until later in 2009. The court wil either affirm the decision of the WUTC in its entirety or reverse the decision, in whole
or in part, and remand the matter back to the WUTC for fuher consideration, which could possibly result in refunds.
In Januar 2009, the Company fied a general rate case with the WUTC requesting to increase base electrc rates for the Company's
Washigton customers. In the general rate sase fiing, the Company requested a net electrc rate increase of 8.6 percent. The net
electrc rate increase is based on a requested 16.0 percent increase in biled rates with an offsetting 7.4 percent reduction in the curent
ERM surcharge. The Company also requested a 2.4 percent increase in natual gas rates. The fiing is designed to increase annual base
electrc servce revenues by $69.8 million ($37.5 millon net after considerig the reduction in the current ERM surchage) and
increase annual natual gas servce revenues by $4.9 million. The Company's request is based on a proposed rate of retu on rate base
of 8.68 percent, with a common equity ratio of 47.5 percent and an 11.0 percent retu on equity. The WUTC generally has up to 11
months to review a general rate case fiing.
As part of the general rate case settlement agreement that was modified and approved by the WUTC in December 2005, the Company
agreed to increase the utility equity component to 35 percent by the end of 2007 and 38 percent by the end of2008. The utility equity
component met this target as it was approximately 47.6 percent as of December 31,2008.
Idaho General Rate Cases
In August 2008, the Company entered into an all-part settlement stipulation with respect to its general rate case that was filed with the
IPUC in April 2008. This settlement stipulation was approved by the IPUC in September 2008. The new electric and natual gas rates
became effective on October 1,2008. As agreed to in the settlement, base electrc rates for the Company's Idaho customers increased
by an average of 12.0 percent, which is designed to increase annual revenues by $23.2 milion. Base natual gas rates for the
Company's Idaho customers increased by an average of 4.7 percent, which is designed to increase annual revenues by $3.9 million.
In January 2009, the Company filed a general rate case with the IPUC requesting to increase base electric rates for its Idaho customers.
In the general rate case filing, the Company requested a net electric rate increase of7.8 percent. The net electric rate increase is based
on a requested 12.8 percent increase in billed rates with an offsetting 5.0 percent reduction in the current PCA surcharge. The
Company also requested a 3.0 percent increase in natural gas rates. The fiing is designed to increase annual base electric service
revenues by $31.2 millon ($18.9 milion net after considering the reduction in the current PCA surcharge) and increase annual natual
gas service revenues by $2.7 milion. The Company's request is based on a proposed rate of retu on rate base of8.8 percent, with a
common equity ratio of 50 percent and an 11.0 percent retu on equity. The IPUC generally has up to seven months to review a
general rate case filing.
Oregon General Rate Case
As approved by the OPUC in March 2008, natural gas rates for the Company's Oregon customers increased 0.4 percent effective April
I FERC FORM NO.2 (ED. 12-88) Page 123.34
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
1,2008 (designed to increase anual revenues by $0.5 million) and increased an additional 1. percent effective November 1,2008
(designed to increase anual revenues by an additional $1.4 milion).
NOTE 27, POTENTIAL HOLDING COMPANY FORMATION
At the Anual Meeting of Shareholders in May 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 strcture. The holding company, curently
named AVA Formation Corp. (AVA), would become the parent of Avista Corp. After the contemplated dividend to AVA of the
capital stock of Avista Capital (Avista Capital Dividend) now held by Avista Corp., AVA would then also be the parent of Avista
CapitaL. The A vista Capital Dividend would effect the strctual separation of A vista Corp.' s non-utility businesses from its regulated
utility business.
Avista Corp. received approval from the FERC in April 2006 (conditioned on approval by the state regulatory agencies), the IPUC in
June 2006 and the WUTC in Februar 2007. Avista Corp. also filed for approval from the utility regulators in Oregon and Montana
and proceedings are pending in each of these jursdictions. The statutory share exchange is subject to the receipt of the remainng
regulatory approvals and the satisfaction of other conditions. The Company canot predict when the remainig regulatory approvals
wil be obtained or if they will be on term acceptable to the Company.
The IPUC accepted a stipulation entered into between A vista Corp. and the IPUC Staff that sets fort a varety of conditions, which
would serve to segregate the Company's utilty operations from the other businesses conducted by the holding company. The
stipulation among other things would require A vista Corp. to maintain certin common equity levels as par of its capital strctue.
Avista Corp. committed to increase its actual utility common equity component to 35 percent by the end of2007 and 38 percent by the
end of2008, which is consistent with provisions of the Company's Washington general rate case implemented on January 1, 2006.
The calculation of the utility equity component is essentially the ratio of A vista Corp.' s total common equity to total capitalization
excluding, in each case, Avista Corp.'s investment in Avista CapitaL. The utility equity component was approximately 47.6 percent as
of December 31, 2008. In addition, IPUC approval would be required for any dividend from Avista Corp. to the holding company that
would reduce utility common equity below 25 percent of total capitalization which, for this purpose, includes long and short-term debt,
capitalized lease obligations and preferred and common equity.
The WUTC accepted a similar stipulation entered into between Avista Corp. and the WUTC staff. WUTC approval would be required
for any dividend from Avista Corp. to the holding company that would reduce utility common equity below 30 percent of total
capitalization.
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 AVA common stock, no par value, so that holders of A vista Corp. common stock
would become holders of AVA common stock and Avista Corp. would become a subsidiary of AVA. The other outstanding securities
of Avista Corp. would not be affected by the statutory share exchange, with limited exceptions for stock options and other securties
outstanding under equity compensation and employee benefit plans.
NOTE 28, INFORMATION SERVICES CONTRACTS
The Company has information servces contracts that expire at various times though 2013. Total payments under these contracts were
$15.4 million in 2008, $15.4 million in 2007 and $12.5 milion in 2006. The majority of the costs are included in operation expenses
in the Statements of Income. Minimum contractual obligations under the Company's information services contracts are $15.1 milion
in 2009, $15.4 million in 2010, $14.5 millon in 2011, $14.5 milion in 2012 and $14.9 milion in 2013. The largest of these contracts
provides for increases due to changes in the cost ofliving index and fuer provides flexibility in the annual obligation from
year-to-year subject to a thee-year tre-up cycle.
NOTE 29, SUPPLEMENTAL CASH FLOW INFORMATION
(dollars in thousands)
Cash paid for interest
Cash paid for income taxes
2007
$76,434
$8, 116
2007
$78,705
$28,947
Other Cash Flows from Operating Activities:
Power and natural gas deferrals $(2,736)$(3,899)
I FERC FORM NO.2 (ED. 12-88) Page 123.35
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
Change in special deposits
Change in other curent assets
Non-cash stock compensation
ESOP dividends
Gain on sale of assets
Regulatory disallowance of debt repurchase costs
$4,068
$(2,149)
$2,541
$-
$(1,123)
$-
$(1,626)
$(141)
$2,512
$1
$-
$3,850
I FERC FORM NO.2 (ED. 12-88) Page 123.36
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 2008/Q4
(2) Fi A Resubmission 04/16/2009
STATEMENTS OF ACCUMULATED COMPREHENSIVE INCOME, COMPREHENSIVE INCOME, At 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 accunted 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-Liabilty adjustment Hedges Adjustments
for-Sale Securities (net amount)
(a)(b)(c)(d)(e)
1 Balance of Account 219 at Beginning of
Preceding Year (15,981,101)1,368,559
2 Preceding QtrlYr to Date Reclassifications
from Acct 219 to Net Income (2,379,000)
3 Preceding QuarterlYear to Date Changes in
Fair Value 3.199,837 1,010,441
4 Total (lines 2 and 3)3,199,837 (1.368,559)
5 Balance of Account 219 at End of
Preceding QuarterlYear (12,781,264)
6 Balance of Account 219 at Beginning of
Current Year (12,781,264)
7 Current Qtr/Yr to Date Reclassifications
from Acct 219 to Net Income
8 Current QuarterlYear to Date Changes in
Fair Value 6,688,946
9 Total (lines 7 and 8)6,688,946
10 Balance of Account 219 at End of Current
QuarterlYear (6,092,318)
FERC FORM NO.2 (NEW 06-02)Page 122a
Name of Respondent
Avista Corporation
This Report Is: Date of Report
(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/16/2009
STATEMENTS OF ACCUMULATED COMPREHENSIVE INCOME, COMPREHENSIVE INCOME, A
Year/Period of Report
End of 2008/Q4
D HEDGING ACTIVITIES
Other Cash Flow Other Cash Flow Totals for each Net Income (Carried Total
Line Hedges Hedges category of items Forward from Comprehensive
No.Interest Rate Swaps (Specify)recorded in Page 117, Line 78)Income
Account 219
(f)(g)(h)(i)Ol
1 (3,346,361)6,682)(17,965,585)
2 609,000 (1,770,000)
3 3,479,861)602,318)128,099
4 3,479,861)6,682 (1,641,901)
5 6,826,222)(19,607,486)
6 6,826,222)(19,607,486)
7 10,656,750 10,656,750
8 3,830,528)2,858,418
9 6,826,222 13,515,168
10 6,092,318)
FERC FORM NO.2 (NEW 06-02)Page 122b
Name of Respondent TIs Report Is:Date of Report Yea of Report
(l)~An Orgi (Moi Da, Yr)
A vista Corporation (2)DA Resubmision Apri 17, 200 Dec. 31, 2008
SUMMARY OF UTILITY PLANT AND ACCUMULATED PROVISIONS
FOR DEPRECIATION, AMORTIZATION AN DEPLETION
Line Item Tota Electrc
No.
(a)(b)c)
1 UTILITY PLANT
2 In Service
3 Plant in Service (Classified)3,313,806,232 2,534,598,235
4 Propertv Under Caita Leases 2,419,182
5 Plant Puchased or Sold 0
6 Completed Construction not Qassified
7 EXDerienta Plat Unclassifed 0
8 TOTAL (Eter Tota of lies 3 tb 7)3,316,225,414 2,534,598,235
9 Leaed to Others
10 Held for Futur Use 1,631,351 1,457,302
11 Constrction Work in Proexess 75,568,224 61,824,355
12 Acquisition Adjustments 22,211,433
13 TOTAL Utiity Plant (Enter Tota of lines 8 tb 12)3,415,636,422 2,597,879,892
14 Accum. Prov. for Depr., Amort., & DepL 1,142,578,137 862,999,350
15 Net Utilty Plant (Eter tota of lie 13 less 14)~DETAIL OF ACCUMATE PROVISIONS FOR
16 DEPRECIATION, AMORTITION AN DEPLETION
17 In Serice:
18 Depreciation 1,105,346,502~
19 Amort. and DepL of Producini; Nat. Ga Lad and Lad Rights
20 0
21 Amort. of Other Utility Plant 17,851,932 6,426,642
22 TOTAL in Service (Enter Tota of lines 18 tb 21)1,123,198,434 862,999,349
23 Leased to Others
24 Depreciation
25 Amortzation and Depletion
26 TOTAL Leased to Oters (Eter Tota of lines 24 and 25)-27 Held for Future Use
28 Depreciation
29 Amortition
30 TOTAL Held for Futur Use (Et. Tot. of lines 28 and 29)
31 Abandonent of Lees (Natural Gas)~32 Amort. of Plant Acquiition Adjustment 19,379,703
TOTAL Accumulate Provisions (Should agee with lie 14 above)
33 (Enter Tota of lines 22, 26, 30, 31, and 32)1,142,578,137 862,999,349
FERC FORM NO.2 (ED. 12-89)Page 200
Name 0 Respondent Year 0 Report
A vista Corporation
Date of ReportT 'sR~rtIs:
(1) Q9 AnOngin
(2) D AResubmission Apri 17, 2009 Dec. 31, 2008
SUMMARY OF UTILITY PLAN AND ACCUMULATE PROVISIONS
FOR DEPRECIATION, AMORTIATION AN DEPLETION (Continued)
Gas Other (Specify)Other (Specify)Other (Specify)Line
No.
Common
656,008,542
1,619,845
657,628,387
174.049
6,080,717
22,211,433
686,094,586
248,348,881
437,745,705
19,379,703
248,348,881
1
2
123,199,455 3
799,337 4
5
6
7
123,998,792 8
9
10
7,663,152 11
. 12
131,661,944 13
31,229,906 14
100,432,038 15
31,229,907 33
FERC FORM NO.2 (ED. 12-89)Page 201
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Da, Yr)
Avista Corp.(1 A Resubmission Feb. 16, 2009 Dec. 31, 2008
GAS PLANT IN SERVICE (ACCOUNTS 101,102,103, AND 106)
1. Report below the original cost of gas plant in service accrding estmated 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 (Classifed),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 Unclassifed, and not been classified to primary accounts at the end of the year, include
Account 106, Completed Construction Not Classifed-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. Attch 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
Line Account Beginning of Year Additions
No.(a)(b)(c)
1 INTANGIBLE PLANT
2 301 Oraanization 0 0
3 302 Franchises and Consents 0 0
4 303 Miscellaneous Intanaible Plant 1,325,630 279,897
5 TOTAL Intanaible Plant (Enter Total of lines 2 thru 4)1,325,630 279,897
6 PRODUCTION PLANT
7 Manufactured Gas Prouction Plant
8 304 Lad and land Riahts 7,628 0
9 305 Structures and Improvements 0 0
10 306 Boiler Plant Eauipment 0 0
11 307 Other Power Eauipment 0 0
12 308 Coke Ovens 0 0
13 309 Producer Gas Eauipment 0 0
14 310 Water Gas generating equipment 0 0
15 311 Uauefied oetroleum aas eauipment 0 693
16 312 Oil aas aeneratina eauipment 0 0
17 313 Generatina eauipment-other processes 0 0
18 314 Coal, coke, and ash handling equipment 0 0
19 315 Catalytic Crackina equipment 0 0
20 316 Other reformina eauipment 0 0
21 317 Punfication eauipment 0 0
22 318 Residual refinina equipment 0 0
23 319 Gas mixina eauipment 0 0
24 320 Other Equipment 0 0
25
26 TOTAL (Manufactured Gas Production Plant (Enter total of lines 8-24)7,628 693
27 PRODUCTS EXRACTION PLANT
28 340 land and land Rights 0 0
29 341 Structures and Improvements 0 0
30 342 Extraction and Refinina Eauipment 0 0
31 34 Pipe Unes 0 0
32 34 Extracted Products Storaae Equipment 0 0
33 345 Compressor Equipment 0 0
FERC FORM NO.2 (ED. 12-96)Page 204
Name of Respondent This report is:
( Xl An Original
Date of Report
(Moi Da, Yr)
Year Ending
Avista Corp.1 A Resubmission Feb. 16, 2009 Dec. 31, 2008
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 debit or credits to
distributons of these amounts. Careful observance of the primary account classifications.
above instructions and the text of Account 101 and 106 wil 7. For Account 399, state the nature and use of plant included in
avoid serious omissions of respondent's reported amount for this accunt and if substantial in amount submit a suplementary
plant 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.
utilty 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 propert purchased or sold, name of
distribution of amounts initially recorded in Account 102. In vendor or purchaser, and date of transaction. If proposed joumal
showing the clearance of Account 102, include in column (e) entries have been fied with the Commission as required by the
the amounts with respect to accumulated provision for Uniform System of Accounts, give date of such filng.
depreciation, acquisition adjustments, etc.,
Retirements Adjustments Transfers Balance at End of Year Une
d (e (f (No.
1
0 0 0 0 2
0 0 0 0 3
125,571 0 0 1,479,956 4
125,571 0 0 1,479,956 5
6
7
0 0 0 7,628 8
0 0 0 0 9
0 0 0 0 10
0 0 0 0 11
0 0 0 0 12
0 0 0 0 13
0 0 0 0 14
693 0 0 0 15
0 0 0 0 16
0 0 0 0 17
0 0 0 0 18
0 0 0 0 19
0 0 0 0 20
0 0 0 0 21
0 0 0 0 22
0 0 0 0 23
0 0 0 0 24
25
693 0 0 26
27
0 0 0 0 28
0 0 0 0 29
0 0 0 0 30
0 0 0 0 31
0 0 0 0 32
0 0 0 0 33
FERC FORM NO.2 (ED. 12-96)Page 205
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Dai Yr)
Avista Corp.(L A Resubmission Feb. 16, 2009 Dec. 31, 2008
GAS PLANT IN SERVICE (ACCOUNTS 101,102, 103, AND 106) (Continued)
Balance at
Line Accunt Beginning ot Year Additions
No.(a)(b)(c)
34 346 Gas MeasurinQ and ReQulatinQ Eauipment 0 0
35 347 Other Equipment 0 0
36 TOTAL Products Extraction Plant (Enter Total of lines 28 thru 35)0 0
37 TOTAL Natural Gas Production Plant (Enter Total of line 36)0 0
38 Manufactured Gas Production Plant (Submit Supplementary Statement)7,628 693 I
39 TOTAL Production Plant (Enter Total of lines 37 and 38)7,628 693
40 NATURAL GAS STORAGE AND PROCESSING PLANT
41 Underground Storage Plant
42 350.1 Land 412,611 0
43 350.2 Rights-ot-Way 59,812 0
44 351 Structures and Improvements 1,124,630 4,536
45 352 Wells 6,197,634 3,734,335
46 352.1 Storage Leaseholds and Rights 254,354 0
47 352.2 Reservoirs 203,330 0
48 352.3 Non-recoverable Natural Gas 5,971,926 0
49 353 Lines 819,546 247,470
50 354 Compressor Station Equipment 2,001,664 13,031,771
51 355 Measuring and RegulatinQ Equipment 173,784 0
52 356 Purification Equipment 407,618 0
53 357 Other Equipment 1,709,611 9,500
54 TOTAL Underground Storage Plant (Enter Total ot lines 42 thru 53)19,336,519 17,027,612
55 Other Storage Plant
56 360 Land and Land Rights 0 0
57 361 Structures and Improvements 0 0
58 362 Gas Holders 0 0
59 363 Purification Equipment 0 0
60 363.1 liquefaction Equipment 0 0
61 363.2 Vaporizing Equipment 0 .0
62 363.3 Compressor Equipment 0 0
63 363.4 MeasurinQ and ReQulatinQ Equipment 0 0
64 363.5 Other Equipment 0 0
65 TOTAL Other Storage Plant (Enter Total of lines 56 thru 64)0 0
66 Base Load Liquefied Natural Gas Terminaling and Processing Plant
67 364.1 Land and Land Rights 0 0
68 364.2 Structures and Improvements 0 0
69 364.3 LNG Processing Terminal Equipment 0 0
70 364.4 LNG Transporation Equipment 0 0
71 364.5 Measuring and Regulating Equipment 0 0
72 364.6 Compressor Station Equipment 0 0
73 364.7 Communications Equipment 0 0
74 364.8 Other Equipment 0 0
75 TOTAL Base Load LiQ Nat'l Gas, Terminal and Processing Plant (lines 67-7 0 0
76 TOTAL Nat'l Gas Storage and Processing Plant (Total of lines 54,65 and 7 19,336,519 17,027,612
77 TRANSMISSION PLANT
78 365.1 Land and Land Rights 0 0
79 365.2 Rights-ot-Way 0 0
80 366 Structures and Improvements 0 0
FERC FORM NO.2 (ED. 12-96)Page 206
Name of Respondent This report is:
( Xl An Original
Date of Report
(Moi Da, Yr)
Year Ending
Avista Corp.( 1 A Resubmission Feb. 16, 2009 Dec. 31, 2008
Retirements Adjustments Transfers Balance at End of Year Line
d e (f)( )No.
0 0 0 0 34
0 0 0 0 35
0 0 0 0 36
0 0 0 0 37
693 0 0 7,628 38
693 0 0 7,628 39
40
41
0 0 0 412,611 42
0 0 0 59,812 43
0 0 0 1,129,166 44
0 0 0 9,931,969 45
0 0 0 254,354 46
0 0 0 203,330 47
0 0 0 5,971,926 48
0 0 0 1,067,016 49
0 0 0 15,033,435 50
0 0 0 173,784 51
0 0 0 407,618 52
8,757 0 0 1,710,354 53
8,757 0 0 36,355,374 54
55
0 0 °0 56
0 0 0 0 57
0 0 0 0 58
0 0 0 0 59
0 0 0 0 60
0 0 0 °61
0 0 0 0 62
0 0 0 0 63
0 0 0 0 64
0 0 0 0 65
66
0 0 0 0 67
0 0 0 0 68
0 °0 0 69
0 0 0 0 70
0 0 0 0 71
0 0 0 0 72
0 0 0 0 73
0 0 0 0 74
0 0 0 0 75
8,757 0 0 36,355,374 76n
0 0 0 0 78
0 0 0 0 79
0 0 0 0 80
FERC FORM NO.2 (ED. 12-96)Page 207
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Dai Yr)
Avista Corp.() A Resubmission Feb. 16, 2009 Dec. 31, 2008
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
81 367 Mains 0 0
82 368 Compressor Station Equipment 0 0
83 369 Measuring and Regulatina Eauipment 0 0
84 370 Communications Equipment 0 0
85 371 Other Equipment 0 0
86 TOTAL Transmission Plant (Enter Totals of lines 78 thru 85)0 0
87 DISTRIBUTION PLANT
88 374 Land and Land Rights 102,907 0
89 375 Structures and Improvements 770,058 74,470
90 376 Mains 284,824,979 29,679,642
91 377 Compressor Station Equipment 0 0
92 378 Measuring and Regulating Equipment-General 5,184,752 1,124,054
93 379 Measuring and Regulating Equipment-City Gate 2,892,018 3,308,147
94 380 Services 177 ,856,325 6,722,831
95 381 Meters 72,228,415 13,214,858
96 382 Meter Installations °°
97 383 House Regulators 0 0
98 384 House Regulator Installations 0 0
99 385 Industrial Measuring and Regulating Station Eauipment 3,253,546 256,734
100 386 Other Propert on Customers' Premises 0 0
101 386 Other Eauipment 539 0
102 TOTAL Distribution Plant (Enter Totals of lines 88 thru 101)547,113,538 54,380,736
103 GENERAL PLANT
104 389 Land and Land Rights 260,131 0
105 390 Structures and Improvements 2,793,934 807,743
106 391 Office Furniture and Equipment 378,871 0
107 392 Transportation Equipment 5,032,890 1,002,081
108 393 Stores Equipment 138,852 3,438
109 394 Tools, Shop, and Garage Equipment 3,143,024 584,070
110 395 Laboratory Equipment 913,631 0
111 396 Power Operated Equipment 3,761,742 1,650
112 397 Communication Equipment 2,191,693 23,365
113 398 Miscellaneous Equipment 31,332 0
114 Subtotal (Enter Totals of lines 104 thru 113)18,646,099 2,422,347
115 399 Other Tangible Property 0 0
116 TOTAL General Plant (Enter Totals of lines 114 and 115)18,646,099 2,422,347
117 TOTAL (Accounts 101 and 106)586,429,415 74,111,285
118 Gas Plant Purchased (See Instruction 8)o 0
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)586,429,415 I 74,111,285
FERC FORM NO.2 (ED. 12-96)Page 208
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Da, Yr)
Avista Corp.() A Resubmission Feb. 16, 2009 Dec. 31, 2008
Retirements Adjustments Transfers Balance at End of Year Line
Cd)(e)(f)(g)No.
0 0 0 0 81
0 0 0 0 82
0 0 0 0 83
0 0 0 0 84
0 0 0 0 85
0 0 0 0 86
87
0 0 0 102,907 88
0 0 0 844,528 89
791,997 0 0 313,712,624 90
0 0 0 0 91
63,343 0 0 6,245,463 92
1,294 0 0 6,198,871 93
473,537 0 0 184,105,619 94
741,129 0 0 84,702,144 95
0 0 0 0 96
0 0 0 0 97
0 0 0 0 98
1,387 0 0 3,508,893 99
0 0 0 0 100
0 0 0 539 101
2,072,687 0 0 599,421,587 102
103
0 0 0 260,131 104
30,499 0 0 3,571,178 105
0 0 0 378,871 106
101,356 0 0 5,933,615 107
792 0 0 141,498 108
71,858 0 0 3,655,236 109
312,450 0 0 601,181 110
0 0 0 3,763,392 111
156,318 0 0 2,058,740 112
31,332 0 0 0 113
704,605 0 0 20,363,841 114
0 0 0 0 115
704,605 0 0 20,363,841 116
2,912,313 0 0 657,628,387 117
0 0 0 118
0 0 0 0 119
0 0 0 0 120
2,912,313 0 0 657,628,387 121
FERC FORM NO.2 (ED. 12-96)Page 209
Name of Respondent This report is:Year Ending
( Xl An Original
Avista Corp.(1 A Resubmissior Feb. 16, 2009 Dec. 31, 2008
Gas Plant Held For Future Use (Accunt 105)
1. Report separately each propert held for future use at the end of the year having an original cost of $1,000,000 or more.Group other items of
propert held for future use.2. For
propert having an original cost of $1,000,000 or more previously used in utility operations, now held for fuure use, give in column
(a), in additon to other required information, the date that utilty use of such propert was discontinued, and the date the original cost was transferred
to Account 105.
Descrption and Location Date Originally Included Date Expected to be Used Balance at
of Propert in this Account (b)in Utility Service End of Year
Line (a)(c)(d)
No..
1 Gas Distrbution Mains and Services, Coeur d'Alene, Idaho March 2007 Unknown 174,049
2 .
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45 Total 174,049
FERC FORM NO.2 (ED. 12-96)Page 214
Name of Respondent This report is: Date of Report Year Ending
r Xl An Original (Mo,Da, Yr)
Avista Corp. ( 1 A Resubmission April 17, 2009 Dec. 31,2008
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 project (less than $1,000,000) may be grouped.
demonstration" projects last, under a caption Research,
Line Description of ProjectNo. (a)
1 STATE OF WASHINGTON
2 9 Mile Gate Station and 12inch HP
3 Minor Projects (30) Under $1,000,000
4 Total
5
6 STATEOFIDAHO
7 Minor Projects (17) Under $1,000,000
8 Total
9
10 STATE OF OREGON
11 Minor Projects (42) under $1,000,000
12 Total
13
14
15 COMMON-WAIID
16 Minor Projects (4) under $1,000,000
17 Total
18
19 COMMON-WA/ID/OR
20 Minor Projects (1) under $1,000,000
21 Total
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42 TOTAL
Construction Work in Progress-Gas
(Account 107)
(b)
Estimated Additional
Cost of Project
(c)
1,155,571
1,187,617
2,34,188
295,096
1,861,637
496,327
496,327
784,925
2,913,108
2,913,108
2,743,062
299,895
299,895
30,324
28,200
28,200
o
6,080,717 5,715,04
FERC FORM NO.2 (ED. 12-96)Page 216
Name of Respondent Ths Reprt Is:Date of Report Yea of Reprt
(1)1! An Ongi (Mo, Da, Yr)
A vista Coiporation
(2)0 A Resubmission 17-Ap-09 December 31, 200
ACCUMATE PROVISION FOR DEPRECIATION OF GAS UT PLA (Accunt 108)
1. Explain in a footnote any importt adjustments th repodent has a signcant amount of plat reti at
dung yea.yea end which ha not bee rerded and/or classified to
2. Expla in a footnote any dierce betee the amount the varous reere fuction classifcations, make
for book cost of plant retied lie 11, colum (c), and tht prliar closing entres to tetatively fuctionae the
reported for gas plant in service, pages 204-209, colum (d),book cost of th plant reed. In addition, include all costs
excluding retiements of non-depeciable proper.included in rement work in prgress at yea end in the
3. The provisions of Account 108 in the Uniform System appropnate fuctional classifcations.
of Accounts require tht retiements of depreciable plant 4. Show separtely intest creits under a sing fund
be recorded when such plant is removed from service. If or simlar method of depreiation accountig.
Section A. Balances and Chi:es Duni: Yea
Line Ite Tota Gas Plat in Gas Plat Held Gas Plat Leased
No.(c+d+e)Service for Futur Use to Others
(a)(b)(c)(d)(e)
1 Balance Be~mr~ of Yea 218,127,944 218,127,944
2 Depreciation Prvisions for Yea,
Clied to
3 (403) Depreciation EXDe 12,852,059 12,852,059
4 (413) Exp. of Gas Pit. Les. to Others
5 Trasporttion Expenses-Cleae:268,901 268,901
6 Other Cleanii Accounts
7 Other Accunts (Speifv):
8 Trafer to common (trporation clea)0
9 TOTAL Dep. Prov. for Yea 13,120,960 13,120,960
(Ente Tota of lines 3 th 8)
10 Net Chariies for Plant Retied:
11 Book Cost of Plant Retied 2,786,742 2,786,742
12 Cost of Removal 535280 535,280
13 Salvaiie (Credt)58,432 58,432
14 TOTAL Net Chrs. for Plant Ret .3,263,590 3,263,590
(Ente Total oflines 11 th 13)
15 Other Debit or Cret Ites (Descnbe)188,865 188,865
16
17 Balance End of Yea (Eter
Tota of lies 1, 9, 14, 15, and 16)228,174,179 228,174,179 0 0
Section B. Balances at End of Yea Accordi/! to Functional Classifications
18 Production~Maufactured Gas 0
19 Prd. and Gatheriii-Natur Gas
20 Prducts Extraction-Natual Gas
21 Underground Gas Storal!e 10,681,838 10,681,838
22 Other Storae:e Plat
23 Base Load LNG Ter and Prc. Pit.
24 Tranmission 0
25 Dis1rbution 168,874,084 168,874084
26 General 48,618,257 48,618,257
27 TOTAL (Eter Total of l~es 18 228,174,179 228,174,179 0 0
th26)
FERC FORM NO.2 (ED. 12-87)Page 219
Name of Respondent 1 /l -.eport Is uae 01 Keport Yea of Report
lI An Origina (1i, Da, Yr)
Avlsl Corporation o A Resmlslon ApU 17, 2009 Dec. 31, 20
GAS STORED (ACCOUNT 117.1 117.2, 117.3, 117.4 164.1 164.2 AND 164.3)
1 If durring the year adjusments were made to the stored gas inventory 3 S1e in a lootne th ba 01 segregation oIlnvert beenreported in colum (d), (I), (g), an (h) (su as to coec cumlative current an noncrenl protions Als sle in a loole the
inacuracies 01 gas meaements), exlain In a footnoe th rean lor meho usd to report storag (I.e. fixed ast metho orthe adjusments, th Dt an dollar amou of adjusmen an acun Inventor metho).
chaged or credited.
2 Report In coiumn (e) all encroachmnts durng th yea upn th volumes
deslgnaed as ba gas, column (b), and syem balanng gas, colum
( c ), an gas proprt recrdable in the plan acouns.
(Account (Acun Noncrenl (Accoun l'urrent LJu ~ü
Una ~~ftion 1~~jl)1~:.2)(Accoun 117.3)117.4)(Acourl64.1)(Accoun 164.2)(Accoun 164.3)Tot
No.e)(dJ (e)m (q)(h)m
1 Bae at Bøaimiri 01 ea 13,414,2 13,414,23
2 as Delivered to Storae 60,77,745 6O,n8,745
3 as wnhdrawn rom ö'traoe 43,247,748 43247,748
4 100her Debits an Credit 1224,863 224,863
5 IBance at End 01 Yea 3072,371 30,72,371
8 Dlh 3,9320 3,93220
7 Amount Per Dekah9rm $7.8125 $7.8125
8 Storage IS reported using the inventory method.
FERC FORM NO.2 (REV 04-4)Page 220
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) CiA Resubmission 04/16/2009
INVESTM NTS IN SUBSIDIARY COMPANIES Accunt 123.1)
1.Report below investments in Accunts 123.1, 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 descrbe 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 advance 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 accunt. List each note_ giving date of issuance, maturity
date, and specifying whether note is a renewl.
3. Report separately the equity in undistrbuted subsidiary eamings since acquisition. The TOTAL in column (e) should equal the amount entered for
Accunt 418.1.
ine Description ófnvestment Date Acquired Date Of Amount Of Investment at
No.Ma&)ity Beginning of Year
(a)(b)(d)
1
2 Avista Capital - Common Stock 1997 184,251,609
3 Avista Capital - Equity in Eamings -103,783,905
4 OCI Investment in Subs
5 Avista Capital - Other Changes in Net Investment -11,378,300
6 Avista Capital- Other Changes in Net Investment 2,281,868
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42 Total Cost of Account 123.1 $01 TOTAL 71,371,272
FERC FORM NO.2 (ED. 12-89)Page 224
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) nA Resubmission 04/16/2009
INVESTMENT IN SUBSIDIARY COMPANIES (Account 123.1) (Continued)
4. For any securities, notes, or accounts that were pledged designate such securities, notes, or accunts 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 sellng price thereof, not including interest adjustment includible
in column (f).
8. Report on Line 42, column (a) the TOTAL cost of Accunt 123.1
Equity in Subsidiary Kevenues tor Year Amount ot investment at Gain or Loss from Investment Line
Eamin~s of Year End rif Year DiSP~Wtd of No.e)(f)g)
1
184,251,609 2
4,123,038 -99,660,867 3
4
3,629,762 -7,748,538 5
-1,636,110 645,758 6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
4,123,038 1,993,652 77,487,962 42
FERC FORM NO.2 (ED. 12-89)Page 225
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo,Da, Yr)
Avista Corp.(L A Resubmission April 17 , 2009 Dec. 31, 2008
PREPAYMENTS (ACCOUNT 165)
1. Report below the particulars (details) on each preayment.
Line Nature of Prepayment Balance at End of
No.Year(in dollars)
(a)(b)
1 Prepaid Insurance 4,808,486
2 Prepaid Rents -
3 Prepaid Taxes -
4 Prepaid Interest -
5 Miscellaneous Prepayments 3,607,184
6 TOTAL 8,415,670
FERC FORM NO.2 (ED. 12-96)Page 230
Form 2-Pg-230 200812.xls
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) FiA Resubmission 04/16/2009
OTHER REGULATORY ASSETS (Accunt 182.3)
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 amortzation.
Line Descrption and Purpose of Balance at Debits CREDITS Balance at end of
No.Other Regulatory Assets Beginning of vvrmn on uunng Wrien on IJunng Currnt QuarterNear
Current th QuarterNear th Period
QuarterNear Accunt Charged Amount
(a)(b)(c)(d)(e)(f)
1 Regulatory Asset FAS 106 2,363,760 9261107 472,752 1,891,008
2 Guaranteed Residual Value-Airplane 1,826,00 1,110,173 2,936,173
3 Reg Assel Post Ret Liab 51,00,123 121,271,624 172,277,747
4 Regulatory Asset FAS109 Utilty Plant 102,061,458 283 2,596,433 99,465,025
5 Regulatory Asset FAS109 DSIT Non Plant 3,050,796 256,09 3,306,888
6 Regulatory Asset FAS109 DFIT Stale Tax Cr 3,972,764 595,466 4,568,230
7 Regulatory Asset FAS1 09 WNP3 8,603,769 283 737,482 7,866,287
8 Reg Assets- Decouplings Surcharge 22,167 254,42 479,593
9
10 Regulatory Asset AMR 23,387,754 Various 23,640,523 -252,769
11 Regulatory Asset RTO Deposit- ID 263,223 Various 70,806 212,417
12 Regulatory Asset B P A Residential Exchange 3,836,996 Various 3,587,7õl 249,229
13 Regulatory Asset BPA Residential Exch Interest 161,862 Various 161,86
14 Regulatory Asset ERM Approved for Recovery 41,958,848 Various 12,230,66 29,728,184
15
16 ID Wind Gen AFUOC 35,194 35,194
17
18 Regulatory Asset Wartsila Unit 3,343,865 Vaious 1,018,612 2,325,253
19 MTM St Regulatory Asst 7,17,420 53,057,55 60,228,970
20 MTM L T Regulatory Asset
21 Regulatory Asset FAS 143 Asset Retirement Obligation 3,085,123 250,158 3,335,279
22
23 Reg Asset AN- CDA Lake Settlement 41,733,385 41,733,385
24
25 Regulatory Asset Workers Comp 2.851,024 246,144 3,097,168
26 CS2LevRet 1,267,775 174,580 1,442,335
27 Regulatory Asset 10 PCA Deferral 1 7.516,287 Various 7,516.287
28 Regulatory Asset ID PCA Deferral 2 13.64,762 3,43,232 17,080,994
29 Regulatory Asset ID PCA Deferral 3 3,573,957 3,573,957
30
31
32
33
34
35
36
37
38
39
40
41
.A2
43
44 TOTAL 281,620,776 225,992,959_52,033,188 455,580,547
FERC FORM NO. 2/3-Q (REV. 02-04)Page 232
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Onginal (Mo, Da, Yr)End of 2008/Q4
(2) EiA Resubmission 04/16/2009
M SCELLANEOUS DEFFERED DEBITS (Accunt 186)
1.Report below the partculars (details) called for conc~ming miscellaneous deferred debits.
2.For any deferred debit being amortized, show penod of amortization in column (a)
3. Minor item (1% of the Balance at End ofYearfor 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 ~çcunt.Amount End of YearChar~ed
(a)(b)(c)(d (e)(f)
1
2 Colstrip Common Fac.1,110,999 1,110,999
3 Regulatory Asset-Decoupling def 594;442 4,505 589,937
4 WA Deferred Power Costs 16,564,895 9,341,072 7,223,823
5 WA ERM YTD Company Band 8,482,641 4,482,641 4,000,000
6 WA ERM YTD Contra Account -8,482,641 4,482,641 -4,000,000
7 Regulatory Asset ROT Deposit 553,747 158,213 395,534
8 Regulatory Asset-Mt lease pymt 1,366,800 1,428,501 2,795,301
9 Regulatory Asset-Mt lease pymt 2,633,200 2,779,808 5,413,008
10 Colstrp Common Fac.2,355,642 2,355,642
11 Regulatory Asset- COLS 738,101 738,101
12
13
14
15 Payroll Accrual 14,022 14,022
16
17 Plant Allocation of clearing jr 1,038,165 1,133,859 2,172,024
18
19 Mise Error Suspense -1,038 13,495 12,457
20
21
22 Mise susp acct-non w/o 200,000 171,673 28,327
23 Unamortized AiR sale 8,103 17,664 25,767
24
25 Intangible Pension Asset
26
27 Nez Perce Settement 186,809 5,212 181,597
28 Mise Deferred Debit Centralia 656,829 19,161 675,990
29
30
31
32 ID Panhandle Forest Use Permit 207,424 16,913 224,337
33 Metro-Sunset 115KV TE 351,506 351,506
34
35 UPRR Permit Conv 333,585 16,578 350,163
36 Insurance Recvy CDA Lake 161,991 161,991
37 Corp reorg stk iss. costs 118,086 118,086
38
39
40
41 Nez Perce Permit Conversion -964 964
42
43 PG & E Canada to N Cal trans 44,051 449,556 493,607
44 Mise Work Orders ~$50,OOO 83,795 31,935 115,730
45 Subsidiary Billngs 2,125,708 57,883 2,067,825
46 "Null" Projects directly to 186 4,458 350,163 -345,705
47 Misc. Work in Progress
48 ueterred Reguiatory Comm.
Expenses (See pages 350 - 351)
49 TOTAL 40,642,265 32,008,980
FERC FORM NO.2 (ED. 12-94)Page 233
Name of Respondent This Report Is:Date of Report Year/Period of Report
Avista Corporation (1) ~An Original (Mo, Da, Yr)End of 2008/Q4
(2) Fi A Resubmission 04/16/2009
MISCELLANEOUS DEFFERED DEBITS (Account 186)
1.Report below the particulars (details) called for concerning miscellaneous deferred debits.
2.For any deferred debit being amortized, show penod 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 ~ç;um.Amount End of Year
Char~ed
(a)(b)(c)(d (e)(f)
1
2 Regulatory Assets Consv 2,564,057 1,280,292 1,283,765
3 Oregon Gas Comm Consvt 40,060 24,096 15,964
4
5 Oregon Common Gas Eft 414,778 272,477 142,301
6 WPNG HE Wtr Htrs-Oregon 260,525 258,779 1,746
7 WPNG HE Furnaces 2,121,880 2,081,157 40,723
8
9 WPNG OR Res Low 1 342,978 191,262 151,716
10
11 Oregon DSM Gen admin 9,073 9,073
12 Tankless Water Heater Rebate 7,194 7,194
13 Chimney Damper Rebate 594 594
14 Programmable Thermostat Rebate 8,843 8,843
15 High eff Space Heater Rebate 675 675
16
17 Oregon DSM Program Amort 2,536,269 2,536,269
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32 Energy Star Homes 275,659 275,563 96
33 Energy Star Manufactored Homes 16,225 16,205 20
34 HE Washing Machines 95,701 95,617 84
35 Regulatory Assets Consv 354,695 101,144 253,551
36 Regulatory Assets Consv 784,023 336,413 447,610
37
38
39 Regulatory Assets Conservation 154,919 154,919
40
41 Dry Creek Transport 364,432 1,774 366,206
42 Glendale Cust Premises Equip 183,654 183,654
43 Lake CDA Issues 1,950,624 1,950,624
44 Shareholder Lawsuit 2002 5,800 5,800
45
46
47 Misc. Work in Progress
48 I Deterred Reguiatory --mm.
Expenses (See pages 350 - 351)
49 TOTAL 40,642,265 32,008,980
FERC FORM NO.2 (ED. 12-94)Page 233.1
Name of Respondent ThSR~S:Date of Report Year of Report
(1) X An Orgial (M,D, Y)
AvistaCorp (2)D A Resubmission 411812008 121311008
ACCUATED DEFRR INCOME TAXS (ACCOUN 190)
1. Report the information caled for below concerng the 3. At lies 4 and 6, add rows as necessar to report
respondent's accountig for deferred income taxes.al data. Number the additional rows in sequence
2. At Other (Specify), include deferrals relatig to 4.01,4.02, etc. and 6.01, 6.02, etc.
other income and deductions.
CHAGES DURG YEAR
Line Balance at Amounts Amounts
No.Account Subdivisions Beginning of Year credted to Credted to
Account 410.1 Account 411.1
(a)(b (c)(d)
1 Account 190
2 Electnc 13,791,782 2,103,517 4,234,612
3 Gas 3,123,263 1,391,041 724,528
4 Other (Define)0
5 Tota (Tota of lies 2 th 4)16,915,045 3.494,558 4,959,140
6 Other (Specify)73,908,058 8,750,785 (1,833,945)
6
6.01 SFAS 123R True Up
6.02 FAS 109 BETC ITC 0 0
6.03 Relieve Stock OP 0 0
6.04 Interest Rate Swap 0 0
6.05 FAS 106 0 0
6.06 Mark-To-Market 0 0
6.07 Colstnp Generation
6.08 SFAS 158 0 0
7 TOTAL Account 190 (Total of lines 5 th 6)90,823,103 12,245,343 3,125,195
8 Classification of TOTAL
9 Federal Income Tax
10 State Income Tax 0
11 Local Income Tax 0
FERC FORM NO.2 (12-96)Page 234
Name of Respondent Th~ortIs:
(1) WAn Original
(2) DA Resubmission
Date of Report Year of Report
(Mo. Da, Yr)
AvistaCorp 4/18/2008 121311008
ACCUATE DEFRR INCOME TAXS (ACCOUN 190) (Continued)
4. If more space is neeed, use separate pages
as requied.
5. In the space provided below, identify by amount
and classification, signficant items for which
deferred taxes are being provided. Indicate
insignificant amounts liste under "Other."
CHANGES DURING YEAR ADJUSTMNTS
Amounts Amounts Debits to 190 Credts to 190 Balance at
End of Year
Line
No.Debited to Credted to
Account 4 1 0.2 Account 411.2 Account No.Amount Account No.Amount
27,983
(5,085)o 254010/283010
1
70,642 15,824,252 2
254180 206,183 2,255,652 3
0 4
0 276,825 18,079,90 5
63,402,537 6
176100 874,944 (874 44)6
2140001236000 3,956,685 (3,956,685)6.01
1,234,857 1,234,857 6.02
214050 116,695 (116,695)6.03
7,394,935 219000/253170 10,501,880 (3,106,945)6.04
63,575 63,575 6.05
16,757,037 283740 16,757,037 6.06
729,555 729,555 6.07
38,843,329 38,843,329 6.08
65,023 88 131055,525 7
8
9
0 10
0 11
22,898
(142,054)
o
(62,845)
0 0 254005
0 0
0 0 245100
0 0 283150
0 0 283740
283366
0 Varous
FERC FORM NO.2 (12-96)Page 235
Name of Respondent This wort Is:Date of Report YeadPeriod of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) n A Resubmission 04/16/2009
CAPITAL STOCKS (Accunt 201 and 2 4)
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
2 No Par Value 200,000,000
3 Restricted shares
4 TOTAL COM 200,000,000
5
6
7 Accunt 204 - Preferred Stock Issued 10,000,000
8
9
10 Cumulative
11
12
13 TOTAL_PRE 10,000,000
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
FERC FORM NO.2 (ED. 12-91)Page 250
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) riA Resubmission 04/16/2009
CAPITAL STOCKS (Accunt 201 and 2 4) (Continued)
3. Give particulars (details) conceming 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)
Sl1ares Amount Sl1ares ~ost Shares Amount
(e)(f)(g)(h)(i)ül
1
54,487,574 755,903,119 2
55,939 1,121,577 3
54,487,574 755,903,119 55,939 1,121,577 4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
,31
32
33
34
35
36
37
38
39
40
41
42
FERC FORM NO.2 (ED. 12-88)Page 251
Name of Respondent This Report Is:Date of Report Year/Period of Report
Avista Corporation (1) ~An Original (Mo, Da, Yr)End of 2008/Q4
(2) Fi A Resubmission 04116/2009
CAPITAL STOCK EXPENSE (Accunt 214)
1.Report the balance at end of the year of discount on capital stock for each class and series of capitl 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 capitl stock expense and specify the account charged.
-
..ine Class and Series of Stock 13alance at t:nd or Year
No.(a)(b)
1 Common Stock - Public Issue 87,394
2
3
4
5
6
7
8
9
10 ;
11
12
13
14
15
16
17
18
19
20
21
22 TOTAL 87,394
FERC FORM NO.2 (ED. 12-87)Page 254b
This Page Intentionally Left Blank
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) n A Resubmission 04/16/2009
LONG-TERM DEBT (Accunt 221,222,223 and 224)
1. Report by balance sheet accunt 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 autorization 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 tile 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)
1 Acct. 221 - Bonds:
2
3
4 Secured Medium Term Notes A 250,000,000 787,692
5 Discount 50,200
6 Secured Medium Term Notes B 161,000,000 788,947
7 Secured Medium Term Notes C 109,000,000 969,770
8 FMB's 6.125%45,000,000 825,301
9 Discount 204,750
10 FMB's 5.45%90,000,000 1,054,153
11 Discount 239,400
12 FMB's 6.25%150,000,000 1,812,935
13 (Premium)-266,500
14 Discount 634,000
15 FMB's 5.70%150,000,000 4,702,304
16 Discount 222,000
17 FMB's 5.95%250,000,000 2,246,419
18 835,000
19 FMB's 7.25%30,000,000 420,306
20 Pollution Control Revenue Bonds
21 6% Series due 2023 4,100,000 115,355
22 Colstrip 1999A due 2032 66,700,000 2,700,582
23 Discount 20,500
24 Colstrip 1999B due 2034 17.000,000 954,386
25 .
26 Acct. 222
27 Acct. 223 Advances from associated companies 1,200,000
28 LTD - AVA Trust II 61,856,000 1,658,634
29 LTD - AVA Trust II 51,547,000 3,633,783
30 Acct. 224 Other
31 Senior Notes 400,000,000 9,128,000
32 Discount 2,716,000
33 TOTAL 1,837,403,000 36,453,917
FERC FORM NO.2 (ED. 12-96)Page 256
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) n A Resubmission 04/16/2009
LONG-TERM DEBT (Account 221, 222, 22 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. Ifthe 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 UL!tstanÇlln~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?h\dent)
(i)
1
2
3
Var.Var.Var.Var.48,000,000 4,099,869 4
5
6-9-1995 7-1-2010 6-9-1995 7-1-2010 5,000,000 345,000 6
Var.Var.Var.Var.50,000,000 5,024,125 7
9-8-2003 9-1-2013 9-8-2003 9-1-2013 45,000,000 2,756,250 8
9
11-18-2004 12-1-2019 11-18-2004 12-1-2019 90,000,000 4,905,000 10
11
11-17-2005 12-1-2035 11-17-2005 12-1-2035 153,989,418 9,375,000 12
13
14
12-15-2006 7-1-2037 12-15-2006 7-1-2037 147,067,09A 8,550,000 15
16
4-3-2008 6-1-2018 4-3-2008 6-1-2018 234,814,467 11,073,611 17
18
12~16-2008 12-16-2013 12-16-2008 12-16-2013 30,000,000 90,625 19
20
12-18-1984 12-1-2023 12-18-1984 12-1-2032 4,100,000 246,000 21
9-1-1999 10-1-2032 9-1-1999 10-1-2032 66,700,000 3,345,934 22
23
9-1-1999 3-1-2034 9-1-1999 3-1-2034 17,000,000 872,388 24
25
26
1,200,000 27
4-5-2004 4-1-2034 4-30-2004 3-31-2034 61,856,000 4,020,640 28
6-3-1997 6-1-2037 6-30-1997 5-31-2037 51,547,000 2,120,149 29
30
4-3-2001 6-1-2008 5-1-2001 6-1-2008 11,084,938 31
32
1,006,273,979 67,909,529 33
FERC FORM NO.2 (ED. 12-96)Page 257
This Page Intentionally Left Blank
Name of Respondent This l!0rt Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) n A Resubmission 04/1612009
RECONCILIATION OF REP( RTED NET INCOME WITH TAXBU INCOME FOR FEDERAL INCOME TAXES
1. Report the recncilation of reported net income for the year with taxable income used in computing Federal income tax accals and show
computation of such tax accruals. Include in the reconcilation, as far as practicable, the same detail as furnished on Schedule M-1 of the tax retum for
the year. Submit a reconciliation even though there is no taxable income for the year. Indicate clearly the nature of each reconcilng 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 partcular 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.
Line Particulars (Details)Amount
No.(a)(b)
1 Netlncome for the Year (Page 117)73,619,720
2
3
4 axable Income Not Reported on Books
5 9,501,848
6
7
8
9 Deductions Recorded on Books Not Deducted for Return
10 91,483,730
11 Federal Income Tax 5,376,170
12 Deferred Income Tax 35,858,558
13 Investment Tax Credit & State Income Tax 3,893
14 Income Recorded on Books Not Included in Return
15 59,774,306
16 Equity in Sub Earnings (Income)/Loss -4,123,038
17 Corporate Overhead Unallocated Subs 823,208
18
19 Deductions on Return Not Charged Against Book Income
20 -262,942,348
21
22
23
24
25
26
27 Federal Tax Net Income 9,376,046
28 Show Computation of Tax:
29
30 Federal Tax Net Income 9,376,046
31 State Tax 171,437
32 Federal Tax Net Income including State Tax 9,547,483
33
34 Federal Tax ~ 35%3,341,619
35
36
37 Prior Years Tax Return, Revenue Agent Report & Misc True Ups 3,865,437
38 Kettle Falls & Cabinet Gorge Tax Credits -1,830,887
39
40 Total Federal Tax Expense (agrees to line 11)5,376,169
41
42
43
44
FERC FORM NO.2 (ED. 12-96)Page 261 - /--"
Name of Respondent: Date of Report Year/Penod of Report
(Mo, Da, Yr) End of: 2008lQ4Avista Co oration 3/101200
Taxes Accrued. Pre aid and Char ed Dun Year, Distbuton of Taxes Char d Show utI' de where a Iicable and aec cha ed
1. Give details of the combined prepaid and acced tax accunts and show the total taxes charged to operations and other accunts during
the year. Do not include gasoline and other sales taxes which have been charged to the accunts to which the taxed material was charged. If the
actal or estimated amounts of such taxes are know, show the amounts in a footnote and designate whether estimated or actal amounts.
2. Include on this page, taxes paid during the year and charged direc to final accunts, (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) accals credited to taxes accrued,
(b) amounts credited to the porton of prepaid taxes charged to current year, and (c) taxes paid and charged direct to operations or accounts other
than accrued and prepaid tax accunts.
4. List the aggregate of each kind of tax in such manner that the total tax for each State and subdivision can readily be ascertined.
BALNCE AT BEGINNING OF YEAR
Line Kina or iax Taxes Accrued Taxes Charged Taxes Paid During Adjustments
No.(See Instruction 5)(ACCr~t 203)Prepaid Taxes Duri~~)Year ~~~r
(a)(e)(f
1 FEDERAL:
2 Income Tax 2005 & Older -19,767,521 16,011,211 )
3 Income Tax 2006 (23,161,363\5,020,161 -
4 Income Tax 2007 1,535,388 13,835,702 -
Income Tax (Current)
.
5 3,195,302 14,227,203
6 Retained Earninas ( 1,850,177\-
7 Retained Earninas (3,163,344\--
Póor Retained Earninas (2,127,838\--
8 Current Retained Earninas 12,374,114 1938,493\
9 Total Federal (28,767,334).21,773,168 7,277,499 -
10
11 STATE OF WASHINGTON:
12 Properl Tax 2006 (556\--556
13 Propert Tax 2007 10,692,000 (3,157,737.00)7,533,707 (556
14 Properl Tax 2008 -7,771,834.00 660 (0
15 Excise Tax 2005 & 2006 90,988 --
16 Excise Tax 2007 2,614,792 353,169.00 2,567,961 0
17 Excise Tax 2008 -24,034,759.00 21,549,461
18 Natural Gas Use Tax 34,707 93,266.00 94,757 (1
19 Municipal Occupation Tax 2,695,522 21,642,563.00 21,723,299 0
20 Sales & Use Tax (2005 & 2006)(7,943 ---
21 Sales & Use Tax (2007)60,189 -46,546
22 Sales & Use Tax (2008)-763,350 713,084
23 Motor Vehicle Tax 2008 -11,090 11,090
24 Total Washington 16,179,699 -51,512,294 54,240,566 (1)
25
26 STATE OF IDAHO:
27 Income Tax 2006 487,826 ---
28 Income Tax 2007 (180,121 (100,628)(176,233'-
29 Income Tax 2008 -41,224 485,000 -
30 Propert Tax 2006 0 ---
31 Prooert Tax 2007 2,121,077 18,245)2,112,832 -
32 Properl Tax 2008 -3,737,222 1,225,086 -
33 Motor Vehicle Tax 2008 -10,098 10,098
34 Sales & Use Tax 2005 436 ---
35 Sales & Use Tax 2007 5,173 -5,186 -
36 Sales & Use Tax 2008 -75,499 52,263 -
37 Irriaation Credits 2007 (470)(470
38 KWH Tax 2006 (0 --
39 KWH Tax 2007 34,357 (9,496\24,862 -
40
FERC FORM NO.2 (ED. 12-96) Page 262.1
Name of Respondent: This Report Is: Year/Penod of Report(1) (XJ An Onginal End of: 2008/04Avista Corpration 2 A Resubmission
Taxes Accrued, Pre aid and Cha ed Dunn Year, Distribution of Taxes Cha ed Show utili de t where a Iicable and acct char ed
5. If any tax (exclude Federal and State income taxes) covers more than one year, show the required information separately for
each tax year, identifyng the year in column (a).
6. Enter all adjustments of the accrued and prepaid tax accunts in column (f) and explain each adjustment in a footnote.
Designate debit adjustments by parentheses.
7. Do not include on this page entres with respect to deferred income taxes or taxes collected through payroll deductons or
otherwise pending transmittl of such taxes to the taxing authority.
8. Show in columns (i) thru (p) how the taxes accounts were distrbuted. Show both the utility departent and number of account charged.
For taxes charged to utilty plant, show the number of the appropriate balance sheet plant accunt or subaccunt.
9. For any tax apportoned to more than one utilty departent or accunt, state in a footnote the basis (necessity) of apportoning such tax.
10. Items under $250,000 may be grouped.
BALANCE AT END OF YEAR
Taxes Accrued Electric Gas Non-Operating Other Adjustments Line
(Account 236)Prepaid Taxes (ACCOUm 408.1.(ACCOUm 408.2.(Account 408.2.No.
(Q)(h)(k)(I
1
25,778,732 3,742,962 1,476,240 2,216,994 12,3a1,325 2
(18,141,202 ---5,020,161 3
(2,300,314 213,585 (3,936'(3,885,763\(159,588\4
(11,031,901 (2,617,399)2,098,966 2,134,521 1,579,214 5
(1,850,177 -6
(3,163,344 -7
(2,127,838 -
(1,435,621 (2,374,114'8
(14,271,665).1,339,148 3,571,270 465,752 16,396,998 9
10
11
-----12
(0)(2,392,149'(778,099 12,856 (345 13
7,771,174 6,258,500 1,476,746 36,000 588 14
90,988 ----15
400,000 (48,417'(4,981 406,567 (0 16
2,485,298 15,767,570 8,178,424 91,342 (2,577 17
33,215 --93,266 18
2,614,786 13,959,887 7,633,614 49,062 19
(7,943 --20
13,643 -21
50,265 763,350 22
-11,090 23
13,451,426 .33,545,391 16,505,704 546,765 914,434 24
25
26
487,826 -27
(104,516'(54,969 (45,659'-28
(443,776 (49,822 91,046 -29
0 ---30
0 10 (3.00'(8,118)(134\31
2,512,135 3,043,418 706,000 9,264 (21,460'32
---10,098 33
436 --34
(13\----35
23,236 75,499 36
--(470'37
(0'-38
-(9,495\(1 39
40
FERC FORM NO.2 (ED. 12-96) Page 263.1
Name of Respondent: Date of Report Year/Penod of Report
(Mo, Da, Yr) End of: 2008/Q4Avista Co oration 3110/200
Taxes Acrued, Pre aid and Cha ed Durin Year, Distributon of Taxes Cha Show utir de t where a licble and acc cha d
1. Give details of the combined prepaid and acced tax accunts and show the total taxes charged to operations and other accunts during
the year. Do not include gasoline and other sales taxes which have been charged to the accunts to which the taxed materal was charged. If the
actual or estimated amounts of such taxes are known, 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 accunts, (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) accrals credited to taxes accrued,
(b) amounts credited to the porton of prepaid taxes charged to current year, and (c) taxes paid and charged direct to operations or accunts 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 ascertined.
BALANCE AT BEGINNING OF YEAR
Line KinO ot iax Taxes Acced Taxes Charged Taxes Paid During Adjustments
No.(See Instrction 5)(ACco~~t 203)Prepaid Taxes Durina Year Year
(a)(c)Cd)(e)(f
1 KWH Tax 2008 -338,468 317,213 -
2 Franchise Tax 2006 (2,346 --2,346
3 Franchise Tax 2007 1,619,792 6 1,617,452 (2,346'
4 Franchise Tax 2008 -4,107,494 2,433,731 ~
5 Total Idaho 4,086,194 -8,191,172 8,107,020 -
6
7 STATE OF MONTANA:
8 Income Tax (2006)516,192 -(4,053\
9 Income Tax (2007)(9,721\(181,898 (132,184'
10 Income Tax (2008)-27,219 375,000
11 Propert Tax (2006)5,672 (5,672)-
12 Prooert Tax (2007)3,084,105 (2,990)3,081,115
13 ProoertTax (2008)6,676,978 3,340,662
14 Colstrp Generation Tax 4,228 4,228
15 KWH Tax 2005 ---
16 KWH Tax 2006 ---
17 KWH Tax 2007 240,285 -240,285
18 KWH Tax 2008 -1,183,035 915,808 -
19 Motor Vehicle Tax (2008)3,287 3,287
20 Consumer Council Tax 4,865 46,489 26,904
21 Public Commission Tax 8 24 26
22 Total Montana 3,841,406 .7,750,700 7,851,078 .
23
24 STATE OF OREGON:
25 Income Tax (2006)266,087 --
26 Income Tax (2007)(528,274\151,254 (377,015)
27 Income Tax (2008)(214,586 335,000
28 PropertTax (2005 & 2006)2,891 (2,891 -
29 Propert Tax (2007)(759,157'759,157 -
30 Prooert Tax (2008)900,406 1,910,406
31 Motor Vehicle Tax (2008)1,807 1,807
32 BETC Credit (2000)(387,653'--387,653
33 BETC Credit (2001)163,940 --(163,940
34 BETC Credit (2002)(46,118\--46,118
35 BETC Credit (2003)25,292 --(25,292
36 BETC Credit (2004)37,086 --(37,086
37 BETC Credit (2005)(82,896 --82,896
38 BETC Credit (2006)(208,108 --(290,349
39 BETC Credit (2007)17,786 191,873 -
40 BETC Credit (2008)-(46,847'-
FERC FORM NO.2 (ED. 12-96) Page 262.2
This Report Is: Year/Period of Report(1) (X An Onginal End of: 2008/Q4Avis!a Cor oration 2 A Resubmission 3110/2009
Taxes Accrued, Pre aid and Char ed Dunn Year, Distribution of Taxes Char ed Show utilt de ! where a ¡¡cable and acc! char ed
5. If any tax (exclude Federal and State income taxes) covers more than one year, show the required information separately for
each tax year, identifyng the year in column (a).
6. Enter all adjustments of the acced and prepaid tax accunts in column (f) and explain each adjustment in a footnote.
Designate debit adjustments by parentheses.
7. Do not include on this page entres with respect to deferred income taxes or taxes collected through payroll deductions or
otherwse pending transmittal of such taxes to the taxing authority.
8. Show in columns (i) thru (p) how the taxes accounts were distributed. Show both the utility departent and number of accunt charged.
For taxes charged to utility plant, show the number of the appropriate balance sheet plant accunt or subaccunt
9. For any tax apportoned to more than one utiity departent or accunt, state in a footnote the basis (necessity) of apportoning such tax.
10. Items under $250,000 may be grouped.
BALANCE AT END OF YEAR
Taxes Accrued Electric Gas Non-Operating Other Adjustments Line
(Account 236)Prepaid Taxes (Account 408.1.(ACCUm 408.2.(ACCOU(~\ 408.2.No.
(a)(h)(i (I
21,254 338,468 --1
--2
(0)6 -3
1,673,762 2,544,119 1,558,955 4,419 4
4,170,346 -5,811,735 2,310,339 1,146 67,952 5
6
7
520,245 ---8
(59,435\(181,898\-9
(347,781\27,219 -10
-(5,672\(0.4200 11
(0'(2,990 (0.2000 12
3,336,316 6,676,978 0.0100 13
0 4,228 0.2000 14
---15
---16
(0 --17
267,227 1,183,035 (0.4200\18
(0)-3,287 19
24,450 46,489 -20
6 24 0.3600 21
3,741,028 -7,747,413 ..3,287 22
23
24
266,087 -25
(5 (70,944 222,198 --26
(549,586 (53,647 (160,939\-27
(0 (2,891 --28
-(76,843 836,000 0 29
(1,010,000\71,933 828,473 °30
-1,807 31
--32
--33
--34
--35
--36
--37
(498,457 -38
209,659 191,873 (0 39
(46,847 -(46,847 40
FERC FORM NO.2 (ED. 12-96) Page 263.2
Name of Respondent: Date of Report
(Me, Da, Yr)Avista Co oration . 3110/2009
Taxes Accrued, Pre aid and Cha ed Durin Year, Distribution of Taxes Cha ad Show utI' de I where a I¡cable and acct cha ed
1. Give details of the combined prepaid and accred tax accunts and show the total taxes charged to operations and other accunts during
the year. Do not include gasoline and other sales taxes which have been charged to the accunts to which the taxed material was charged. If the
actual or estimated amounts of such taxes are known, 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 accunts, (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 the porton of prepaid taxes charged 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 ascertined.
BALNCE AT BEGINNING OF YEAR
Line Kind of I ax Taxes Accrued Taxes Charged Taxes Paid During Adjustments
No.(See Instruction 5)(ACcor~t 203)Prepaid Taxes DUri~~)Year Year
(a)(c)(e)(f
1 STATE OF OREGON:
2 Glendale Reoulatorv Tax Cr.-(351,469.00\-
3 Franchise Tax (2004)(62,168)--62,168
4 Franchise Tax 2005 60,185 --(60,185
5 Franchise Tax 2006 37,494 -32,123 (4,616
6 Franchise Tax 2007 1,413,741 -1,416,374 2,633
6 Franchise Tax 2008 4,293,223 3,296,833 -
7 Total Oregon (49,872)-5,681,927 6,615,528 -
8
9 STATE OF CALIFORNIA:
10 Income Tax (2005)(10,400 -(8,531
11 Income Tax (2006)(800 ~(486 -
12 Income Tax (2007)(1,838 1,362
13 Total California (11,200)-(1,838)(7,655)-
14
15 MISC. STATES
16 Income Tax (2007)0 0 0
17 Income Tax (2008)0 -1125 -1124
18 Total Misc States --(1,125)(1,124)-
19
20 COUNTY & MISCELLANEOUS
21 Forrest Fire Protection
22 Greenacres Irrioation
23 City of Spokane PBIA ---
24 Spokane UtilitVTax --
25 Quincv Basin/Columbia lrroation
26 City of Sookane Bus. License
27 WA Renewable Enerav -(9,614'(9,614\
28 Misc.lDistrbution 3,299 19,310 19,310
29 Total Miscellaneous 3,299 -9,696 9,696 .
30
31
32
33
34
35
36
37
38
39
40 TOTALS (4,717,808)-94,915,994 84,092,608 (1)
FERC FORM NO.2 (ED. 12~96) Page 262.3
This Report Is:
(1) (X An Original2 A Resubmission 3/10/2009
Taxes Accrued, Pre aid and Cha ed Durin Year, Distribution of Taxes Char ed Show utiI' de t where a I¡cable and acct char ee
5. If any tax (exclude Federal and State income taxes) covers more than one year, show the required information separately for
each tax year, identifyng the year in column (a).
6. Enter all adjustments of the accrued and prepaid tax accunts in column (f) and explain each adjustment in a footnote.
Designate debit adjustments by parentheses.
7. Do not incluäe on this page entres with respect to deferred income taxes or taxes colleced through payroll deductions or
otherwise pending transmittl of such taxes to the taxing authority.
8. Show in columns (i) thru (p) how the taxes accounts were distributed. Show both the utility departent and number of account charged.
For taxes charged to utility plant, show the number of the appropriate balance sheet plant account or subaccount
9. For any tax apportoned to more than one utility departent or account, state in a footnote the basis (necessity) of apportioning such tax.
10. Items under $250,000 may be grouped.
BALANCE AT END OF YEAR
Taxes Accrued Electrc Gas Non-Operating Other Adjustments Line
(ACco~t 236)Prepaid Taxes (Account 408.1.(ACCUm 408.2.(Account 408.2.No.
(h)(i)(k)(I
1
(351,469.00 140,580.00 -(492,049 2
---3
---4
755 -5
--6
996,390 4,266,014 27,209 6
(983,473).59,481 6,132,327 .(509,881)7
8
9
(1,869 --10
(314 --11
(3,200 (1,838 -12
(5,383)--(1,838)--13
14
15
---16
(1 0 0 (1,125\17
(1)-.--(1,125)18
19
20
--21
~-22
--23
--24
--25
--26
0 (9,614)27
3,299 19,310 28
3,299 -.--9,696 29
30
31
32
33
34
35
36
37
38
39
6,105,577 -48,503,169 28,517,801 1,013,663 16,881,361 40
FERC FORM NO.2 (ED. 12-96) Page 263.3
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) nA Resubmission 04/16/2009
ACCUMULA ED DEFERRED INVESTMENT TAX REDITS (Accunt 255)
Report below information applicable to Account 255. Where appropriate, segregate the balances and transactions by utilty and
non utility operations. Explain by footnote any correction adjustments to the accunt balance shown in column (g).Include in column (i)
the average period over which the tax credits are amortized.
ine Accunt Balance ~t Beginning Defered for Year -Aiiocations to
of Year Current Year's Income AdjustmentsNo.SUbdl~~sions ~~ ~ ~ ro 9
1 Electric Utiity
23%
34%
4 7%
510%
6
7
8 TOTAL
9 Other (List separately
and show 3%, 4%, 7%,
10% and TOTAL)
10 Gas Propertry (100%423,036 411400 49,30E
11
12 TOTAL PROPERTY 423,036 49,30E
13
14
15
16
17
1E
19
20
21
22
23
24
25
26
27
28
3C
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
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 2008/Q4
(2) n A Resubmission 04/16/2009
ACCUMULATED D FERRED INVESTMENT TAX CRED S (Account 255) (continuèd)
~ADJUSTMENT EXPLANATION Lineof Year of AI ocation No.to Incomeh i ..
1
2
3
4
5
6
7
8
9
373,728 10
11
373,728 12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
FERC FORM NO.2 (ED. 12-89)Page 267
Name of Respondent This Report Is:Date of Report Yea of Report
(1)~ An Orginal (Mo,Da, Yr)
Avist Corp.(2)0 A Resbmission Decmber 31, 2008
MISCELLAOUS CU AN ACCRUED LIAILITS (Accunt 242)
1. Descnbe and report the amount of other curent and accrued liabilities at the end of year.
2. Minor items (less than $250,000) may be grouped under approprate title.
.
Balance at
Line Item End of Yea
No.
(a)(b)
1 Margin Call Deposit (242050)220,000
2
3 Titus (242050)57,000
4
5 Forest Use Permits (242060)182,081
6
7 Settlement Payable (242090)1,799,906
8
9 Audit Exp Acc (242200)(132,208)
10
11 FERC Administrative Fee Accrual (242300 & 242310)531,499
12
13 Montana Lee Payments (242375)4,171,200
14
15 Non-monetar Power Exchange (242500)186,600
16
17 Demand Side Mgmt Tarff Rider (242600)(11,137,180)
18
19 Payroll Equalization (242700)12,730,817
20
21 Low Income Energy Assistance (242770)2,449,973
22
23 A vista Grts Eng Sustain WSU-ASL 407,924
24
25 Mobius (242790)450,000
26
27 Workers Compensation Reg Liab (242830)3,097,168
28
29 Accounts Payable - Inventory Accrual (242900)359,299
30
31 Accounts Payable - Expense Accrual (242910)2,011,019
32
33 Benefit Liability, Current Portion (242999)3,918,854
34
35 Gas Imbalance Account 943,137
36
37 Customer Liabilty Accounts 8,714,072
38
39 Curent Porton of Oregon SB 408 1,001,777
40
41 Cleang Liabilty Account 225,457
42
43
44 TOTAL 32,188,393
Page 268
FERC FORM NO.2 (ED. 12-96)
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) FiA Resubmission 04/16/2009
0 HER DEFFERED CREDITS (Account 253)
1.Report below the particulars (details) called for concerning e: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 Accunt 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)
1 CCS Install (253000)164 419000 164
2 Pacifcorp Capacitor (253080)14,058 456100 9,372 4,686
3
4 Centralia Environmental (253110)965,260 232650 1,374 963,886
5 Rathdrum Refund (253120)408,686 550000 33,822 374,864
6 NE Tank Spil (253130)135,540 186200 36,933 98,607
7 Bils Pole Rentals (253140)202,867 8,753 211,620
8 CR-CS2 GE LTSA (253150)4,739,221 4,739,221
9 IR Swaps (254170)568,713 568,713
10 Sale/Leaseback on Bldg (253850)1,045,824 931000 261,456 784,368
11 Clark Fork Relicensing (253890)-949,317 184999 274,403 -1,223,720
12 Defer Comp Retired Execs (253900)236,392 431100 55,944 180,448
13 Defer Comp Active Execs (253910)12,114,655 128250 3,306,934 8,807,721
14 Executive Incent Plan (253920)140,000 140,000
15 Unbiled Revenue (253990)3,758,203 1,577,265 5,335,468
16 Regulatory Accruals (253650)4,000,000 4,000,000
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47 TOTAL 18,072,332 3,980,402 10,893,952 24,985,882
FERC FORM NO.2 (ED. 12-94)Page 269
Name of Respondent
Avista Corporation
Year/Period of Report
End of 2008/Q4
This ~ort Is: Date of Report
(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/1612009
ACCUMULATE DEFFERED INCOME TAXES - OT ER PROPERTY (Accunt 282)
1. Report the information called for below concerning the respondent's accounting for deferred income taxes rating to propert not
subject to accelerated amortization
2. For other (Specify),include deferrls relating to other income and deductions.
CHANGES DURING YEAR
Line
No.
Account Balance at
Beginning of Year Amounts Debited
to Accunt 410.1
(c)
Amounts Credited
to Account 411.1
(d)(a)(b)
1 Account 282
2 Electric
3 Gas
4 Other
5 TOTAL (Enter Total of lines 2 thru 4)
6
7
8
9 TOTAL Account 282 (Enter Total of lines 5 thru
10 Classification of TOTAL
11 Federal Income Tax
12 State Income Tax
13 Local Income Tax
243,603,622
65,325,660
11,120,041
320,049,323
20,991,257
9,585,595
1,257,180
31,834,032
320,049,323 31,834,032
309,404,482
10,644,841
31,412,550
421,482
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) A Resubmission 04/16/2009
E TAXES - OTHER PROPERTY (Account 282) (Continued)
Year/Period of Report
End of 2008/Q4
ACCUMULATED DEFERRED INCO
3. Use footnotes as required.
CHANGES DURING YEAR
Amounts Debited Amounts Credited
to Accunt 410.2 to Account 411.2
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) A Resubmission 04/1612009
ACCUMU TED DEFFERED INCOME TAXES - OTHER (Accunt 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 deferrls relating to other income and deductions.
Year/Period of Report
End of 2008/Q4
1 Account 283
2 Electric
3 Electric
4
5
6
7
8
9 TOTAL Electric (Total of lines 3 thru 8)
10 Gas
11 Gas
12
13
14
15
16
17 TOTAL Gas (Total oflines 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
22 State Income Tax
23 Local Income Tax
(a)
Line
No.
Account
47,772,530 842,539 1,068,560
3.246,029 -9,824,248 -285,262
3,246,029 -9,824,248 -285.262
188,255,955 4.301,642 -3,620
239,274,514 -4,680,067 779,678
236.223,718 -4,680,067 779,678
3,050,796
NOTES
FERC FORM NO.2 (ED. 12-96)Page 276
This ~ort Is: Date of Report
(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/16/2009
ACCUMULATED DEFERRED INCOME TAXES - OTHER (Accunt 283) (Continue
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.
Name of Respondent
Avista Corporation
Year/Period of Report
End of 2008/Q4
CHANGES DURING YEAR
Amounts Debited Amounts Credited
to Accunt 410.2 to Accunt 411.2
ADJUSTMENTS Line
No.
480,536 182 737,483 190 729,555 48,019,117 3
407 46,569 191 78,414 31,845 4
236 402,332 402,332 5
6
7
480,536 784,052 1,210,301 48,453,294
-60,649 16,366 182 69,457 -6,439,429
-60,649 16,366 69,457 -6,439,429
3,357,882 182 1,745,275 190/283 59,271,562 246,729,622
419,887 3,374,248 2,598,784 60,481,863 288,743,487
419,887 3,374,248 2,598,784 53,868,087 279,078,915
6,613,716 9,664,572
NOTES (Continued)
FERC FORM NO.2 (ED. 12-96)Page 277
Name of Respondent This ~ort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) FiA Resubmission 04/16/2009
o HER REGULATORY LIABILITIES (Accunt 254)
1. Report below the particulars (details) called for conceming other regulatory liabilties, 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 Liabilties 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 Liabilties QuarterlY ear ~ccunt Amount Credits QuarterlYearCredited
(a)(b)(c)(d)(e)(f)
1 Idaho Investmnt Tax Credit (254005)7,120,00 1,234,857 8,354,865
2 Oregon BETC Credit (254010)257,98 190 128,99 128,992
3 Oeffered Gas Exchange (254028)495028 494,565 -494,565
4 FAS 109 Invest Tax Credit (254180)227,796 190180 6,639 221,157
5 Nez Perce (254220)792,40 various 5,502 786,902
6 Oregon Senate Bil (254250)3,63,488 407431 1,118,862 2,519,626
7 Reg liabilit CCX CR 10 (254300)754,4S 754,484
8 BPA Res Exch Regulatory Liab (254345)407450 1,62,929 -1,629,929
9 Unrealized Currency Exchange (254399)30,876 49,75f 80,633
10 Mark to Market FAS133 (254750)53,413,783 8,706,426 44,707,357
11
12
13
14
15
16
17
18
19
20
..
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41 TOTAL 65,481,339 12,090,915 2,039,098 55,429,522
FERC FORM NO. 2/3-Q (REV 02-04)Page 278
This Page Intentionally Left Blank
Name of Respondent This R~ort Is:Date of Report Year of Report
(1) X An Original (Mo,Oa, Yr)
Avista Corporation (2)0 A Resubmission April 18, 2009 Dec. 31, 2008
GAS OPERATING REVENUES (Account 400)
1. Report below natural gas operating revenues for each for each group of meter added.The average number of
prescnbed account, and manufactured gas revenues in total.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 Met (14.73 psia
3. Report number of customers, columns (f) and (g), on at 60 degrees F). If billngs 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 are 5. If increases or decreases from previous year (col-
added for biling purposes, one customer should be counted umns (c),(e)and (g),are not derived from previously
OPERATING REVENUES
Line Title of Account Amount for
No.Amount for Year Previous Year
faJ b)~ø1GAS SERVICE REVENUES
2 480 Residential Sales 2'':QI'
3 1(481) Commercial and Industrial Sales ,.,'.'''.....'/...'t ..'.;;.."..,....)"...'.....;......,... .;....,.,'..
4 Small (or Comm.) (See Instr. 6)1 ':n(151,908,092
5 Laroe (or Ind.) (See Instr. 6)7,996,232 7,792,244
6 482) Other Sales to Public Authorities
7 484) Interdeoartmental Sales 562,758 490,070
8 TOTAL Sales to Ultimate Consumers 441,254,739 (1 424,736,310
9 483) Sales for Resale 283,746,846 142,464,487
10 TOTAL Nat. Gas Service Revenues 725,001,585 567,200,797
11 Revenues from Manufactured Gas
12 TOTAL Gas Service Revenues 725,001,585 567~
13 OTHER OPERATING REVENUES
14 485 Intracompanv Transfers
15 487 Forfeited Discounts
16 488 Misc. Service Revenues 165,749 111,420
17 (489 Rev. from Trans. of Gas of Others 6,326,968 6,638,317
18 490) Sales of Prod. Ext. from Nat. Gas
19 491 Rev. from Nat. Gas Proc. bv Others
20 492 Incidental Gasoline and Oil Sales
21 493 Rent from Gas Propertv 24,703 15,060
22 (494 Interdepartmental Rents
23 (495 Other Gas Revenues 4,766,853 3,565,179
24 TOTAL Other Ooeratino Revenues 11,284,273 10,329,976
25 TOTAL Gas Operatini: Revenues 736,285,858 577,530,773
26 Less) (496) Provision for Rate Refunds
27 TOTAL Gas Operating Revenues Net of 736,285,858 ..,. ... ",.'.
Provision for Refunds "'ii.'¡-..,,;
28 Dis. Type Sales by States (Inc!. Main Line 432,695,749 ......
Sales to Resid. and Comm. Custrs.)
"..
29 Main Line Industrial Sales (Inc!. Main 7,996,232 :,:
Line Sales to Pub. Authorities)
30 Sales for Resale 283,746,846 ..,.)"'./"
31 Other Sales to Pub. Auth. (Local Dist. Only).'
32 Interdepartmental Sales 562,758 ...,,,.'.'
't'.',.:;:,33 TOTAL (Same as Line 10, Columnslb)and (d))725,001,585
FERC FORM NO.2 (ED. 12-86)Page 300
Name of Respondent Date of Report
(Mo, Da, Yr)
Year of ReportThis R~ort Is:
(1 ) 12 An Original
Avista Corporation (2) D A Resubmission April 18,2009 Dec. 31, 2008
GAS OPERATING REVENUES (Account 400) (Continued)
reported figures, explain any inconsistencies in a foot-
note.
6. Commercial and Industrial Sales, Accunt 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 Accunt 481 of the
Uniform System of Accounts. Explain basis of classification
in a footnote.)
7. See page 108, Importnt Changes During Year,
for important new terrory added and important rate increases
or decreases.
jf
THERMS OF NATURAL GAS SOLD
Quantity for
Previous Year
(e)
AVG. NO. OF NAT. GAS CUSTRS. PER MO.
Number for Line
Previous Year No.
(a)
Quantity for Year
(d)
Number for Year
(f
", ';,','" ,. .,' i."""
195,756,484".., ',",. . ..',
125,041,383
7,348,725
':d.,~'G'
"
.........,..,.'.,..
277.B92
.. ..;'.'i
32,928
270
210, ~4,75',',., ';i.... .., ..',': .' ,
132,632,391
7,788,215
526,078
351,071,445 (2
348,969,400
700,040,845I" ':,' , .,.;, .. ' ., ;,.,:,. ,,;". "',,',.,, '..",:.' ". '", .':.' .,'
. .:. '..'.: , ' .' ',:' "':,;,.. .,""."':'.
.: ,..; . , ~;:l;¡'N"':;",:.: :,. '.",
"
i"'!''.,:" ".
i,"".' " ,," ','I",.' .," .. . . " d ." ,d.
.:..; " . "'". ","'.,
437,882
328,584,474
223,615,011
552,199,485
54
311,144
311,144
NOTES
Quantities of natural gas expressed in therms:
to convert therms to MCF, divide therms by a
BTU factor of 10.25
(1) Includes $11,927,340 unbiled revenues.
(2) Includes 10,759.965 therms relating to un billed revenues.
.,
'.
.,.:''",';,'" ,:,.: : :::;.
, :: ",i;" ",.:'
, ". '.
';'~':;;,:;1:;,; 1
3,415 2
,',,' 3
32,353 4
276 5
6
52 7
306,096 8
9
306,096 10..1213141516171119202122232425126
"2
128
129
130~132~
FERC FORM NO.2 (ED. 12-86)Page 301
Nam of Respondent Th R~ort Is:Date of Rep Yea of Report
:(1) X An Orgi (Mo, Da, Yr)
Avista Corp.(2)0 A Rebmission Apri 17,209 Decer 31, 2008
GAS OPERTION AN MATENANCE EXENSES
If the amoun for previous yea is not deved frm prvious1 fiin, expla in footnotes.
Amount for Amount for
Line Amount Cuen Yea Prious Yea
No.(a)
1 1. PRODUCTION EXENSES
2 A. Manufact Gas Prcton --
3 Manufactued Gas Prduction (Submit Supplemental Statent)
4 B. Natual Gas Production
5 B 1. N atu Gas Producton and Gatherig
6 Operation -.
7 750 OPeration Suueision and Engieeg --
8 751 Production Maps and Record --
9 752 Gas Wells Expenses --
10 753 Field Lines Expenses -.
11 754 Field Compressor Station Expenses .-
12 755 Field Comprssor Station Fuel and Power --
13 756 Field Meaurg and Re!!atg Staon Exuenses --
14 757 Pucation Expenses --
15 758 Gas Well Rovalties --
16 759 Other Expenes --
17 760 Rents --
18 TOTAL ODraon (Enter Tota of lies 7 tb 17)--
19 Maitence
20 761 Maitence Suiirvision and Engineeg --
21 762 Matence of Strctues and lmprovements --
22 763 Matenace of Prcing Gas Well --
23 764 Maitenance of Field Lies --
24 765 Matenance of Field Compressor Station Equipmet --
25 766 Maintece of Field Meas. and Reg. Sta. Eauipment --
26 767 Maiteance of Pufication Eauipment --
27 768 Maitece of Drig and Cleag Equipment --
28 769 Maitenace of Other Eauipment --
29 TOTAL Maitenace (Enter Tota of lines 20 tb 28)--
30 TOTAL Natu Gas Production and Gatherig (Tota of lies 18 and 29)--
31 B2. Product Extrction
32 Jieration
33 770 OPtion Suiirvision and Engineeg --
34 771 Operation Labor --
35 772 Gas Shrge --
36 773 Fuel --
37 774 Power --
38 775 Mateals --
39 776 Operation Supplies and Exiises --
40 777 Gas Procesed by Others --
41 778 Rovalties on Products Extracted --
42 779 Maketiii Expenes --
43 780 Products Puchaed for Resale --
44 781 Vartion in Pructs Inventorv --
45 (Lss) 782 Extrcted Products Used by the Utity-Credt --
46 783 Rents --
47 TOTAL Operation (Eter Tota of Lines 33 tb 46)--
FERC FORM NO.2 (ED 12.88)Page 320
Name of Respondent TIs R~ort Is:Date of Report Year of Report
(1) X An Orgin (Mo, Da, Yr)
Avista Corp.(2)D A Resubmision Apri 17, 2009 Decembe 31, 2008
GAS OPERA nON AND MAITEANCE EXENSES
~Line Amount Cunt Yea Previous Yea
No.(a)(b) , (c)
B2. Products Extrction (Contiued)
48 Maitence
49 784 Matenance Supervision and Eniteel!--
50 785 Maitenace of Strctes an Imrovements --
51 786 Matenace of Extrtion and Refining Equipment --
52 787 Maitenace of Pipe Lines --
53 788 Maitenance of Extracte Product Storal!e Equipment --
54 789 Maitenace of Compresor Equipment --
55 790 Maitenance of Gas Meaurl! and ReI!. Eauipment --
56 791 Maitece of Oter Equipment --
57 TOTAL Maitence (Enter Tota of lines 49 th 56)--
58 TOTAL Products Extrction (Enter Total of lies 47 and 57)--
59 C. Exploration and Development
60 Doeration
61 795 Delay Rens --
62 796 Nonproductve Well Driling --
63 797 Abandoned Leaes --
64 798 Other Exploraon --
65 TOTAL Exploration and Development (Eter Tota of lies 61 th 64)--
D. Oter Gas Supply Expenses
66 Operation
67 800 Natu Gas Well Head Purchaes --
68 800.1 Natu Gas Well Head Puches, Intrcompany Trafers --
69 801 Natu Gas Field Line Puchaes --
70 802 Natu Gas Gasoline Plant Outlet Pruchases --
71 803 Nat Gas Tramission Line Puchaes --
72 804 Natu Gas Citv Gat Puchaes 60,873,113 434,093,210
73 804.1 LiQuefied Natu Gas Puches --
74 805 Other Gas Puchases -167,566
75 (Lss) 805.1 Puched Gas Cost Adïustments 20,372,022 If¡ si,,~ 1'1
76
77 TOTAL Puchaed Gas (Eter Tota of lies 67 to 76)I 621,245,135 I 451,113,897
78 806 Exchage Gas I -I -I
79 Puchased Gas Expenses
80 807.1 Well Expenes-Puchaed Gas --
81 807.2 Ooeraon of Puchaed Gas Meaurg Stations --
82 807.3 Maitence of Puchaed Gas Meaurl! Staons --
83 807.4 Puchased Gas Caculations Expenses --
84 807.5 Other Puchaed Gas Expenes --
85 TOTAL Puhaed Gas Expenses (Eter Tota of lies 80 th 84)--
86 808.1 Gas Withdrwn frm Storage-Debit 42,570,383 15,273,047
87 (Lss) 808.2 Gas Delivered to Storal!e-Credt (60,553,881 (16,073,809
88 809.1 Withdrwals of Liquefied Natu Gas for Procsing-Debit --
89 (Ls) 809.2 Deliveries of Natu Gas for Processing-Credt --
90 Gas Used in Utiity Opertions-Credt
91 810 Gas Used for Compresor Station Fuel-Credt --
92 811 Gas Used for Products Extrcton-Credt 0,563,044 -
93 812 Gas used for Other Utility Operations-Cret --
94 TOTAL Gas Used in Utiity Operaons-Credt (Total of lines 91 th 93)0,563,044 -
95 813 Othr Gas Supplv Expenses 1,709,497 1,696,768
96 TOTAL Other Gas Supply Exp (Total of lines 77,78,85,86 th 89,94,95)603,408,090 452,009,904
97 TOTAL Production Expenses (Enter Tota of lines 3,30,58,65, and 96\603,408,090 452,009,904
FERC FORM NO.2 (ED 12-88)Page 321
Name of Respondet Th Roo0rt Is:Date of Reprt Yea of Reprt
(1) X An Orgi (Mo, Da, Yr)
Avista Corp.(2)D A Resubmision Apri 17, 2009 Dec 31, 2008
GAS OPERATION AND MAINANCE EXENSES
Amount for Amoun for
Line Amount Cuent Yea Previous Yea
No.(a)b (c
98 2. NATUR GAS STORAGE, TENAL1NG AN
PROCSING EXENSES
99 A. Undergroun Storae:e Exoenes
100 Operation
101 814 Ooertion Supesion an Ene:ineee:20,862 25,088
102 815 Maos and Records --
103 816 Wells Expenses --
104 817 Lines Exoene --
105 818 Comoresor Station Expees --
106 819 Compressor Station Fuel an Power --
107 820 Measure: and Ree:ati Station Exoenses --
108 821 Pufication Exoenses .-
109 822 Exploration and Development --
110 823 Gas Losses --
111 824 Other Exoenes 322,129 303,177
112 825 Storae:e Wel Royalties --
113 826 Rents --
114 TOTAL Ootion ænter Total of lies 101 th 113)-328,265
115 Maitenance
116 830 Maitenace Supervision and Engineee:--
117 831 Maintenance of Strcrs and Imoroveients --
118 832 Maitence of Reservoir and Wels --
119 833 Maitenance of Lines --
120 834 Maitence of Comoresor Station EQuioment --
121 835 Maitenance of Meaurg an Ree:tie: Staton EQuipment --
122 836 Maitenance of Pufication EQuioment --
123 837 Maitece of Other EQuiomnt 272,007 297,109
124 TOTAL Maitenance (Ente Tota of lines 116 th 123)272,00 297,109
125 TOTAL Underground Storae:e Exoeses (Tota of lies 114 and 124)614,999 625,374
126 B. Oter Storae:e Exoenses
127 Opertion
128 840 Ooertion Suoesion and Ene:ineerie:--
129 841 Ootion Labor and Expees --
130 842 Rents --
13 842.1 Fuel --
132 842.2 Power --
133 842.3 Gas Losses --
134 TOTAL Operation (Eter Tota of lies 128 th 133)--
135 Maitence
136 843.1 Maitenace Suoeision and Ene:ineerie:--
137 843.2 Maitence of Strctus and Improvements --
138 843.3 Maitence of Gas Holde --
139 843.4 Maitence of Pufication Elauioment --
140 843.5 Maitenace of LiquefactionEqipment --
141 843.6 Matence of Vaporizig Equipmt --
142 843.7 Maitenace of Comoressor ~uioment --
143 843.8 Maitece of Meaure: and Ree:late: EQuipmt --
144 843.9 Maitence of Oter Equipment --
145 TOTAL Maitenace (Eter Tota of lies 136 th 144)--
146 TOTAL Oter Storal!e Expenses (Enter Total of lies 134 and 145)--
PEC FORM NO.2 (E 12-88)Page 322
Nam of Respondet Th Roort Is:Date of Report Yea of Report
(1) X An Orgina (Mo, Da, Yr)
Avista Corp.(2)D A Resubmission Apri 17, 2009 Decmb 31, 2008
GAS OPERATION AND MATENANCE EXENSES
~Line Amoun Cuent Yea Prvious Yea
No.(aJ ~) c
147 C. LiQuefied Natur Gas Teialinl! and Processinl! Expees
148 Opration
149 844.1 Ooeration Superision and Engieerg --
150 844.2 LNG Processinl! Ter Laor and Exoenses --
151 844.3 LiQuefaction ProcesinJ( Labor and Exoenses --
152 844.4 LiQuefaction Tranporttion Labor and Expenses --
153 844.5 Measurig and Reguatg Laor and Expenses --
154 844.6 Compresor Station Labor and Expenes --
155 844.7 Communcation System Expenses --
156 844.8 System Contrl and Load Disoatchil!--
157 845.1 Fuel --
158 845.2 Power --
159 845.3 Rents --
160 845.4 DemurrJ(e ChaJ(es --
161 (Lss) 845.5 Whal!e Reciots-Credt --
162 845.6 ProcessinJ( LiQuefied or Vaoorize Gas bv Other --
163 846.1 Gas Losses --
164 84.2 Other Exoenses --
165 TOTAL Ooeration (Enter Total of lines 149 tI 164)--
166 Maitence
167 847.1 Maitenace Suoeision and Enl!ineeril!--
168 847.2 Maitenance of Strctus and Imorovements --
169 847.3 Maitenance of LNG Processing Term Equipment --
170 847.4 Maitence of LNG Trasoorton Ecuioment --
171 847.5 Maitenace of Measu.i and Re.iu1ati.i EQioment --
172 847.6 Miatence of Compresor Station Equipmet --
173 847.7 Maitence of Communcation Ecuioment --
174 847.8 Maitence of Oter Equioment --
175 TOTAL Maitenance (Enter Tota of lies 167 tI 174)-. -
176 TOTAL LiQuefied Nat Gas Tennall! and Procesinl! Exo (Lines 165 & 175)--
177 TOTAL Natu Gas stora.ie (Enter Total of lies 125, 146, and 176)614,999 625,374
178 3. TRSMISSION EXENSES
179 Ooeration
180 850 Operation Supervision and En.iineerig --
181 851 System Control and Load Disoatchil!--
182 852 Communcation System Exoenses --
183 853 Compressor Station Lar and Expenses --
184 854 Gas for Comoressor Station Fuel --
185 855 Oter Fuel and Power for Comoressor Statons --
186 856 Mains Expees --
187 857 Meaurl! and Rel!latil! Station Exoenses --
188 858 Tramission and Comoression of Gas bv Oters --
189 859 Other Expenses --
190 860 Rents --
191 TOTAL Ooeration (Eter Tota of lies 180 tI 190)--
PEC FORM NO.2 (ED 12-88)Page 323
Nam of Respondt Th R~ort Is:Date of Reprt Yea of Repo
(1) X An Orgi (Mo, Da, Yr)
A vista Corp.(2)D A Rebmion Apr 17, 20 Decber 31, 200
GAS OPERATION AND MANANCE EXENSES
.
~Line Amount Cuent Year Previous Yea
No.(a)(b c
3. TRSMISSION EXPENSES (Contiued)
192 Matenance
193 861 Maintenance Supervision and En¡¡inee¡¡--
194 862 Mateance of Strctues and lmDrovements --
195 863 Matence of Mai --
196 864 Matece of Compresor Station Ecuipint --
197 865 Maitenance of Meaunl! and Rel!. Staon EouiDment --
198 866 Matenance of Communcation Eouinment --
199 867 Maiteance of Ot Ecuipint --
200 TOTAL Matece (Eter Tota of lies 193 th 199)--
201 TOTAL Trasmision ExDenes (Eter Tota of lies 191 and 200)--
202 4. DISTRUTON EXPENSES
203 Operation
204 870 Operation Supervsion and En¡¡ineeri¡¡939,535 853,853
205 871 Distrbution Load Dispatchig --
206 872 ComDresor Station Labor and Exnenses --
207 873 Compresor Station Fuel and Power --
208 874 Main and Serice Expenses 2.866,257 2,838,125
209 875 Meaunl! and Re!!til! Station ExDenes-General 439,736 235,910
210 876 Measunl! and Reimlatil! Station Expenses-Industral 36,822 7,762
211 877 Meaun¡¡ and Reimlati¡¡ Station Expenses-City Gate Chk Station 221,031 97,236
212 878 Mete and House Reimlator EXDenses 1,641,297 2,024,058
213 879 Custome Intalatons Expenes 2,111,891 1,775,093
214 880 Other EXDenes 2,113,941 2,102,151
215 881 Rents 28,691 23,991
216 TOTAL Opration (Enter Total of lines 204 th 215)9,958,179
217 Maitenance
218 885 Maitenance Supervision and En!!eerl!156,885 246,526
219 886 Maitenace of Strctes and lmprovements --
220 887 Maitenance of Mais 1,976,738 2,751,258
221 888 Maitenace of ComDresor Station uiDment --
222 889 Maitenace of Mea. and Reg. Sta.¡¡p.-Gener 207,875 261,794
223 890 Maintenance of Meas. and Rel!. Sta.uiD.-Industral 231,212 161,525
224 891 Maitenace of Meas. and Rel!. Sta.ouiD.-Citv Gate Check Station 29,819 76,876
225 892 Maitenace of Serices 897,764 1,017,281
226 893 Maitece of Meters and House Re!!ators 1,036,861 796,312
227 8~ Maitenace mOther EouiDmem 143,651 131,608
228 TOTAL Maitenance (Eter Tota of lin 218 th 227)4,680,806 5,443,180
229 TOTAL Distrbution EXDenes (Ete Tota of lies 216 and 228)15,080,007 15,401,359
230 5. CUSTOMER ACCOUNTS EXENSES
231 ODeration
232 901 Superision 433,739 470,638
233 902 Mete Readi¡¡ Expenses 1,523,098 1,401,730
234 903 Cutomer Records and Collection ExDenes 5,989,706 5,888,220
235 904 Uncollectible Accounts 1,703,343 1,442,353
236 905 Miscellaneous Customer Accounts Expenses 130,303 167,628
237 TOTAL Customer Accounts ExDenes ffnter Total of lies 232 th 236)9,780,190 9,370,570
PEC FORM NO.2 (ED 12-88)Page 324
Nam of Respondent 1b Roo0rt Is:Date of Report Yea of Reprt
(1) X An Orgina (Mo, Da. Yr)
Avista Corp.(2)D A Resubmission Apr 17 , 2009 December 31, 2008
GAS OPERATION AN MAITENANCE EXENSES
If the amount for previous vear is not derived from previous1v reDOrt fiires, exolai in footnote.
~Line Amount Cuent Yea Previous Yea
No.(a)(b (c)
238 6. CUSTOME SERVICE AN INORMTIONAL EXPENSES
239 100ertion24907 Superision --
241 908 Cutomer Assistace Exoenes 9,408,812 8,199,066
242 909 Inormtiona and Instrctional Exoenes 211,834 3,566
243 910 Micellaneous Custome Serice and Inormationa Exoenes 91,139 71,454
24 TOTAL Customer Serice and Inormtion Exoenses u-ines 24 th 243)9,711,784 8,274,085
245 7. SALS EXPENSES
246 Operation
247 911 Superision --
248 9 I 2 Demonstratin!! and Selli!! Expenses 455,305 667,884
249 9 i 3 Adversin!! Expenses 144,271 204,901
250 9 i 6 Miscellaeous Sales Exuenses 131,256 115,494
251 TOTAL Sales Expenes (Eter Tota of lines 247 th 250)730,832 988,279
252 8. ADMINlSTRTNE AN GENERA EXENSES
253 Ootion
254 920 Admstrative and Gener Salares 7,455,414 6,996,590
255 921 Offce Supnlies and Exnenses 1,493,583 1,40,098
256 (Lss) (922) Admstrative Expenses Trasfered-Cr.(24,846)(17,993
257 923 Outside Services Employed 4,208,920 4,175,631
258 924 Property Insurce 335,230 338,376
259 925 Iniures and Dama!!es 2,179,076 734,709
260 926 Employee Pensions and Benefits 304,978 251,683
261 927 Frachise Renuiements --
262 928 Rel!larorv Commsion Exuenses 2,00,112 1,795,583
263 (Ls) (929) Duplicate Ch!!es-Cr.--
264 930. i Genera Advertisinl! Expenses 1,060 2,258
265 930.2 Miscellaneous Gene Exoenses 1,371,393 1,145,940
266 931 Rents 236,320 269,960
267 TOTAL Ooeron (Eter Tota of lies 254 th 266)~17,101,834
268 Maitence
269 935 Maitenace of General Plant I 2,375,291 I 2,270,5841
270 TOTAL Admstrtive and Genera Exp (Tota of lies 267 and 269)I 21,940,531-1 19,372,419 I
271 TOTAL Gas O. andM. Exp (Lines 97,177,201,229,237,244,25I,and 270)I 661,266,434 I 506,04 i ,988 I
NUBER OF GAS DEPARTMENT EMLOYE
i. The data on number of employees should be report constrcton employee in a footnote.
for the payroll perod endig neast to Octobe 3 I, or 3. The number of employee assignble to the gas
any payrll perod endig 60 days before or afr Octo-deparent from joint fuction of combination utilities
ber 31.may be deed by estite, on the basis of employee
2. If the respondent's payroll for the reportg peod eqvalents. Show the esti numer of equivalent
includes any specia constrcton personnel, includ such employees attbuted to the gas deparent frm joint
employees on line 3, and show the number of such speial functions.
i. Payrll Perod Ende /Date)Decemer 3 i, 2007
2. Tota Re!!ar Full-Time Employees 194 194
3. Total Par-Time and Temnora Employees alocation of Generl Emnlovee 9 18
4. Aloction of General Emplovee 369 337
5. Total Employees 572 549
FEC FORM NO.2 (E 12-88)Page 325
Name or Hesponcent Tfs~rtIS:I Date or Heport Year of Report
An Original (Mo, Da, Yr)
Avista Corporation 0 A Resubmission April 17, 2009 Dec. 31, 2008
Other Gas Supplv Exoenses (Account 813)
1 Report other gas supply expenses by descnptive ties that and losses on settlements óflmbaJances anci gas iosses
clearly indicate the nature of such expenses. Show not associated wih storage separately. Indicate the
maintenance expenses, revaluation of functonal classifiation and purpose of propert to which
monthly encroachments recorded in Account 117.4 any expenses relate. List separately items of $250,000
or more.
Line Description Amount
No.(in Dollars)
(a)(b)
1 Gas Resource Management
2 Labor 705,725
3 Labor Loading 460,997
4 Other Expenses (Professional Services, Travel, Training etc.)232,752
5
6 Amortization of Gas Operations Database 97,733
7
8 Credit Exposure Reserve 10,000
9
10
11 Regulatory Affairs
12 Labor 76,477
13 Labor Loading 55,989
14 Oter Expenses (Professional Services, Travel, Training etc.)69,824
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39 TOTAL 1,709,497
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)
Year of Report
Avista Corp.(2) ( ) A Resubmission April 17, 2009 Dec. 31, 2008
MISCELLANEOUS GENERAL EXENSES (Accunt 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 may be grouped if the number of items of so croup is shown.
Line Description~. ~
1 Industry Association Dues
2 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
3 Respondent
4 Directors fees and expenses
5 Miscellaneous General Expenses
6 Community Relations
7 Educational - Informational
8 Other Miscellaneous General Expenses
9 Other Miscellaneous Labor
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43 TOTAL
Amount
(bJ
308,497
o
o
39,924
183,128
614,017
129,098
8,473
88,256
1,371,393
FERC FORM NO.2 (ED. 12-96)Page 335
Name of Respondent TI R¡gr Is:Dat of Reprt Yea of Reprt
(1) X An Ongi (Mo, Va, Yr)
A vista Corpration (2)D A Resubmision Aprl 17, 200 Decembe 31,208
DEPREATION, DEPLETION, AN AMORTIATION OF GAS PLA (Accounts 403, 404.1, 404.2, 404.3, 404.6, 405)
(Ecept Amorttion of Acauisition Adiustments)
1. Report in Section A the amounts of depreiation betwee the reort yeas (1971, 1974 and every fith yea
expen, depletion and amortzation for the accounts in-therea).
dicate aid classified accordig to the plat fuctiona Report in colum (b) all depreiable plant balce to
groups shown.which rate are applied and show a composite tota.(I
2. Reprt al avaible inormtion caed for in Sec-more deirble, rert by plat acunt, sub accunt or
tion B for the report yea 1971,1974 and ever fi yea fuctiona clasifcations other th those preprite in
thereaftr. Reoort onÍv anua ch2es in th inteals colum (a). Indicate at the bottom of Section B the
Section A. Sumar of Depreciation, Depletion, and Amorttion Ch2es
Amortzation and Deple-Amortzation of Under-
Line Depreciation tion of Prducing Natur ground Storage, Lad,
No.Functiona Classification Expene Gas Lad and Lad Lad Rights and Misc.
(Account 403)Rights (Accunt 404.1)Intang (Accunt 404.2)
(a)(b)(c)(d)
1 Intacible plant 227
2 Prduction plant, maufactur 2as
3 Prduction and gatherng plat,
natur2as
4 Prducts extrction Dlant
5 Unde2lund 285 stora2e plat 416,672
6 Other stora2e Dlat
7 Base load LNG termtig and
, orcessin2 plant
8 Tranission Dlat
9 Distrbution plat 11,785,738
10 General plant 649,649 -11 Common Generl plant-Allocate 1,815,587
12
13
14
15
16
17
18
19
20
21
22
23
24
25 TOTAL 14,667,646 0 227
SectionB.
1. Plat balances lite in Section C, Colum b are derived at by tag the begig plat balace plus the endig plant balance
divided by two.
FERe FORM NO.2 (ED. 12-86)Page 336
Name of Respondent Ths RIË0rt Is:Date of Report Yea of Reprt
(1) X An Origil (Mo, Da, Yr)
A vista Corpration (2)0 A Resubmission April 17, 200 Decbe 31, 2008 I
DEPREIATION, DEPLETION, AN AMORTITION OF GAS PLA (Accunts 403, 404.1, 404.2, 404.3, 40.6, 40)
(Ecept Amorttion of Acquiitin Adiuslments) (Contiued)
maner in which colum (b) balces ar obtaed.If depreciation chages, show at the bottom of Section B
average balces, state the method of averaging used.any revisions made to estited gas reserves.
For colum (c) report available inormation for each plat 3.If provision for depreiation were made durg the
functiona classification liste in colum (a). If composite yea in addition to depeciation provide by application
depeciation acuntig is used.Report available inor-of reort rates, state at the bottm of Section B the
mation caled for in colum (b) and (c) on ths basis.amounts and natur of the provisions and the pla ite
Where the unt-of-production method is used to detee to which relate.
Section A. Sumar of Deoreciation, Depletion, and Amortization Chal!es
Amortzation of Amortization of
Other Limte-te Leehold Amortzation of Total Lie
Gas Plat Imrovements Other Gas Plat (b to g)Function Classifcation No.
(Account 404.3)(Account 404.6 (Account 405)
and 40.75)
(e)m (g)(h)(a)
176,148 176,375 Intal!ible plant 1
0 Production plant, maufactur gas 2
Production and gatherg plant,3
natural gas
Prducts extrction plant 4
416,672 Underground I!as storal!e plat 5
Other storage plat
.6
Base load LNG termtig and 7
I procesing plant
0 Tramision nlat 8
11,785,738 Distrbution nlat 9
5,660 655,309 Gener plat 10
1,272,902 2,889 -!¡!!il~3,091,378 Common gener plat-Alocate 11
12
13
14
15
16
17
18
19
20
21
22
23
24
1,449,050 8,549 0 16,125,472 'TTAL 25
FERC FORM NO.2 (ED. 12-86)Page 337
Name of Respondent Th RlRrt Is:Date of Report Year of Report
(1) X An Orgi (Mo, Do, Yr)
complete
A vista Cororaton (2)D A Resubmsion Apn 17, 200 December 31, 2008
SectionC.
Depreciable Applied
Line Functional Clasication Plant Base Depr. Rate(s)
No.(Tousands)(Percent)
(a)(b)(c)
Undergrund Gas Stora&e Plant (2)
1
2 350 60 2.05%
3 351 1,129 1.75%
4 352 8,914 2.00%
5 352.1 (Lasehold Imprvements)254 2.22%
6 352.2 245 2.53%
7 352.3 6,948 2.54%
8 353 1,067 2.06%
9 354 15,033 2.32%
10 355 174 2.66%
11 356 408 2.97%
12 357 1,711 2.77%
13 Tota 35,943
14
15 Production - Manufactud Gas:
16 2305 0
17 2311 0
18 Tota 0
19
20 Distrbution Plant:
21 375 845 2.19%
22 376 313,721 2.38%
23 378 6,237 2.13%
24 379 6,207 2.24%
25 380 184,097 2.67%
26 381 84,702 1.94%
27 385 3,509 2.43%
28 387 1
29 Tota 599,319
30
31 General Plant:
32 390.1 3,511 2.61%
33 390.2 60 20.00%
34 391 379 4.53%
35 391.0 6.30%
36 392 5,430
37 393 141 2.51%
38 394 3,655 4.24%
39 395 601 3.27%
40 396 1,910
41 397 2,059 9.28%
42 398 0 1.28%
43 Tota 17,746
44
45 Tota Depreciable Ga Plant 653,008
FERC FORM NO.2 (ED. 12-S6)Page 338-A
This Page Intentionally Left Blank
Name of Respondent This report is:Date of Report Year of Report
(1) (X)An Original (Moi OBi Yr)
Avista Corp.(2) ( ) A Resubmission April 18, 2009 Dec. 31, 2008
Particulars Concern ina Certin 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 Amrtzation
(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 penod of
amortization. (b) Miscellaneous Income Deductions.Report the nature, payee, and amount of other income deductions for the year as required by Accounts 426.1,
Donations; 426.2, 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. Amunts 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)
1 Acct. 425.00 - MISCELLANEOUS AMORTIZATIONS
2 Gas plant acquisition adi. Applicable to purchase of CP National,
3 Oregon & California distribution system. Contra account 115.00.1,110,571
4 Total- 425.00 1,110,571
5
6 Acct. 426.10 - DONATIONS
7
8
9 Brett Sports and Entertainment 80,000
10 Proiect Share 218,100
11 Items Under $50,000 657,959
12
13 Total 426.10 956,059
14
15 Acct. 426.20 - LIFE INSURANCE
16 Officers Life 181,955
17 SERP 1,918,280
18 Total 426.20 2,100,235
19
20 Acct. 426.30 - PENALTIES
21 Emission Penaltv 58,000
22 WUTC non-compliance terms of order 50,000
23 All Items Under $20,000 30,152
24 Total 426.30 138,152
25
26 Acct. 426.40 - EXPENDITURES FOR CERTAIN CiViC, POLITICAL,
27 AND RELATED ACTIVITIES
28 Items Under $250,000 1,211,097
29 Total 426.40 1,211,097
30
31 Acct. 426.50 - OTHER DEDUCTIONS
32
33
34 Kettle Falls Reserve Amortization (53,066)
35 Executive Deferred Comoensation (2,394,079)
36 Cash Reduction for PGE Monetization 88,125
37 Acquisition Costs 169,563
38 RatinQs Assessment Service Fees 250,000
39 Misc items 48,000
40 Total 426.50 -1,891,457
41
42
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 (Moi Oai Yr)
Avista Corp.(2) ( ) A Resubmission April 18, 2008 Dec. 31, 2007
Particulars Concern ina 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) - Descnbe the nature of items included in this account, the contra account charged, the total of amortization charges for the year, and the penbd of
amortization. (b) Miscellaneous Income Deductions-Report the nature, payee, and amount of other income deductions for the year as required by Accounts 426.1,
Donations; 426.2, Life Insurance; 426.3, Penalties; 426.4, Expenditures for-Certin 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 dunng 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 dunng the year.
Line Description Amount
No.(a)(b)
1 Acct. 430.00 - INTEREST ON DEBT TO ASSOC. COMPANIES
2
3 Avista Capital II (Iona-term debt) (variable rate ranged from 5.999 to 6.455 percent)2,120,149
4 AVA Capital Trust III (interest rate of 6,5 percent)4,020,640
5 Avista Capital, Inc.77,722
6
7 Total 430.00 6,218,511
8
9
10
11
12
13
14
15 Acct. 431.00 - OTHER INTEREST EXPENSE
16 Other 114,391
17 Interest on collateral deposits from counterparties 607,804
18 Interest on power and natural aas deferrals 1,191,895
19 Interest on committed line of credit 1,956,478
20 Interest on BPA residential exchange 91,417
21 Interest on customer deposits 186,319
22 Interest on amount due to IRS 1,406,452
23 Total 431.00 5,554,756
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
FERC FORM NO.2 (ED. 12-87)Page 340.1
Name of Respondent This wort Is:Date of Report Year/Period of Report
Avista Corporation (1) An Original (Mo, Da, Yr)End of 2008/Q4
(2) n A Resubmissioh 04/16/2009
R GULATORY COMMISSION EXPEN ES
1. Report particulars (details) of regulatory commission expenses incurrd during the currnt 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 part.
2. Report in columns (b) and (c), only the current year's expenses that are not deferred and the current year's amortzation of amounts
deferred in previous years.
Line Description Assessed by Expenses Total . Deterreci.
No.(Furnish name of regulatory commission or body the Regulatory of Expense for in Accunt
Current Year .18~.3 aidocket or case number and a descrption of the case)Comission 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.1,886,187 344,169 2,230,356
5
6
7
8
9 Washington Utiities and Transporttion
10 Commission: includes annual fee and various
11 other electric dockets 746,339 333,218 1,079,557
12
13 Includes annual fee and various other natural
14 gas dockets 438,327 226,012 664,339
15
16 Idaho Public Utilties Commission
17 Includes annual fee and various other electric
18 dockets 509,718 240,302 750,020
19
20 Includes ànnual fee and various other natural
21 gas dockets 218,450 114,501 332,951
22
23 Public Utilty Commission of Oregon
24 Includes annual fees and various other natural
25 gas dockets 544,741 180,056 724,797
26
27 Not directly assigned electric 723,772 723,772
28 Not directly assigned natural gas 282,026 282,02€
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46 TOTAL 4,343,762 2,444,056 6,787,818
FERC FORM NO.2 (ED. 12-96)Page 350
Name of Respondent This Report Is:Date of Report Year/Period of Report
Avista Corporation (1) ~An Original (Mo, Da. Yr)End of 2008/Q4
(2) Fi A Resubmission 04/16/2009
REGULATORY COMMISSION EXPENSES (Continued)
3.Show in column (k) any expenses incurred in pnor 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 Une
uepartment f'if~1I Amount Account 182.3 Accunt Accunt 182.3 No.End of Year
(f)(g)(h)(i)ul (k)(I)
1
2
3
Electrc 928 2,230,356 4
5
6
7
8
9
10
Electric 928 1,079,557 11
12
13
Gas 928 664,339 14
15
16
17
Electric 928 750,020 18
19
20
Gas 928 332,951 21
22
23
24
Gas 724,791 25
26
Electric 928 723,772 27
Gas 928 282,026 28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
6,787,818 46
FERC FORM NO.2 (ED. 12-96)Page 351
Name of Respondent
Avista Corporation
Year/Period of Report
End of 2008/Q4
This ~ort Is: Date of Report
(1) ~An Original (Mo, Da, Yr)
(2) A Resubmission 04/16/2009
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
Utilty 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.
1 Electric
2 Operation
3 Production
4 Transmission
5 Regional Market
6 Distribution
7 Customer Accounts
8 Customer Service and Informational
9 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 oflines 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 Maint. (Total oflines 20 thru 27)
29 Gas
30 Operation
31 Production-Manufactured Gas
32 Production-Nat. 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
(a)
Direct PayrollDistrbution
(b)
TotalLine
No.
Classification
4,626,264
5,449,349
339,599
389,128
12,012,969
34,285,840
8,867,403
5,449,349
339,599
389,128
12,012,969
41,740,897
3,864,070
2,411,740
162,D3
151,966
4,649,383
12,000,114
FERC FORM NO.2 (ED. 12-88)Page 354
Name of Respondent
Avista Corporation
This Report Is:
(1) ~An Original
(2) A Resubmission
IBUTION OF SALARIES AND WAG
Date of Report
(Mo, Da, Yr)
04/16/2009
S (Continued)
Year/Period of Report
End of 2008/Q4
DIST
Line Classifcation Total
No.
(a)
48 Distribution
49 Administrative and General
50 TOTAL Maint. (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)752,515
55 Storage, LNG Terminaling and Processing (Total of lines 31 thru 8,397
56 Transmission (Lines 35 and 47)499,826
57 Distribution (Lines 36 and 48)5,932,248
58 Customer Accunts (Line 37)2,411,740
59 Customer Service and Informational (Line 38)162,043
60 Sales (Line 39)151,966
61 Administrative and General (Lines 40 and 49)4,649,383
62 TOTAL Operation and Maint. (Total of lines 52 thru 61)14,568,118
63 Other Utilty Departments
64 Operation and Maintenance
65 TOTAL All Utility Dept. (Total of lines 28, 62, and 64)
66 Utilty Plant
67 Construction (By Utility Departments)
68 Electric Plant
69 Gas Plant
70 Other (provide details in footnote):
71 TOTAL Constrction (Total of lines 68 thru 70)
72 Plant Removal (By Utilty Departents)
73 Electrc Plant 908,961 171,862 1,080,823
74 Gas Plant 83,692 15,824 99,516
75 Other (provide details in footnote):
76 TOTAL Plant Removal (Total of lines 73 thru 75)992,653 187,686 1,180,339
77 Other Accunts (Specify, provide details in footnote):
78 Stores Expense 1,594,474 -1,594,474
79 Regulatory Assets 214,454 214,454
80 Preliminary Survey and Investigation -3,566 -3,566
81 Small Tool Expense 2,424,013 -2,424,013
82 Miscellaneous Deferred Debits 23,023,863 23,023.863
83 Non-operating Expenses 396,265 396,265
84
85 Expenditures of Certain Civic, Political and Related 238.729 238,729
86 Employee Incentive 3,015,100 -3,015,100
87 DSM Tarrif Rider and Payroll Equilzation Liabilty 15,086,274 -13,720,024 1,366,250
88 Incentive/ Stock Compensations 42,804 42,804
89
90
91
92
93
94
95 TOTAL Other Accounts 46,032,410 -20,753,611 25,278,799
96 TOTAL SALARIES AND WAGES 134,543,229 -3,731,231 130,811,998
FERC FORM NO.2 (ED. 12-88)Page 355
Name of Respondent This rep is:
( Xl An Qngina
Date of Report
(Mo,Oal Yr)
Yea Ending
Avista Corp.( ) A Resubmission Apnl 17, 200 Dembe 31, 2008
CHARGES FOR OUTSIDE PROFESSIONA AND OTHER CONSULTATIV SERVICES
1. Report Ui Irat spe be fo aD chrges ma durng Ui yer an ki. or inlvua (otr th fo se as an employ or fo paent mad for
Incuded In an accunt (Incuding plant acc) fo out coulti and mek: and re serv) amoting to mo thn $2,00,
Including paymen for
oter prssional serv. Thse serv include ra, magem le se, ex !h wh shld be report in Acunt 426.4constnon, enginering, rerc financl, valuation, lel , acntng, Ex fo Ce CI Poll an Relat ActMs.
purhasing, advesing. labor relatins, and pulic relati, rere for th (a) Nam of pe or oa reng seces.
respoen under wr or oral alTngement fo wh agate pay we (bJ Tot ch fo th ye.
made during Ui year to any corpra part, organ of 2. Desi assate conies wi an astersk In coum (bJ.
Amount (in
Une
No.
1 AT&T
2 Advance Engineng Corp
3 Cerium Netwrk
4 Davis Wright Tremaine LLP
5 Dey & Leboeuf LLP
6 Deloit & Toucee LLP
7 Fujits Consung Inc
8 GEl Consultnt Inc
9 Heller Ehrman
10 James A Carothrs
11 Pacic Gas & Electc Company
12 Paine Hamblen Coffn Broke
13 Reulas Integrated Solutns LLC
14 The Ultate Softre Group Inc
15 Thmson Propert Tax Servics
16 US Fish & Wildlife servce
17 Van Ness Feldman
18 Westm Electci
19 Winston & Strwn LLP
20 Golder Associated Inc
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Descrption
(a)(b)
dollars)
(c)
286,379
341,185
357,196
766,968
659,622
1,452,858
500,677
291,905
663,621
286,000
365,859
738,553
366,009
317,486
613,710
299,445
449,234
502,705
429,617
280,319
FERC FORM NO.2 (ED. 12-96)Page 357 (Next page is 512)
This Page Intentionally Left Blank
Avista Corporation
i nrs ~ort IS: Date of Report I Year of Report
(1) ~ An Onginal (Mo, Da, Yr)
(2) 0 A Resubmission April 17, 200 Dec. 31, 208
Name of Respondent
GAS STORAGE PROJECTS
1. I Report inJections and WíthdrawaTs õT gas lOr air storage project used by respondent.
(; as De ivered to StoraQe
anuaiv
eoruaiv
~arch
,pril
~ay
une
i ulv
9 UQust
10 eptember11 Ictobér
12 ovemOer
1 ;: lJecember
14 lOTAI (Enter Total of Lines 2 Thru 13)
15 as Withdrawn from StoraQe
16 anuaiv
17 ebruaiv
Hi arcn19 pnl2 ay
2 une
2 u:y
2 UQust
4 eptember
5 tober
6 ovemOer
7 ecemDer
28 TDTAL (Enter Total of Lines 16 Thru 27)
29
30
31
32
33
34
35
36
in IJtnl
üas Gas i otaiBelonging to Belonging to AmountRespondent Oters (Dth)(Dt) (Dth)
4,914 4,Y1 ¿
(
108,71
1,211, ¡2¿
1,11:;:,
1, ,1, ,2,4 ,1, ,
1,233,780
22,46
1;:4
13,497, ,
(1,184.
(1,16,559
(
o
o
o
o
, ,1, ,
1,~6i,
22,1
834
13,249
7,622,689
Item
Line
No.
(a)
,7,7
1,0
,5
,
a ,
(~,
1 , 10
I ,/;:0
(1,,707
(6,,830
(1,11:4,1:99
(1,;:11;,55
(453,68
(4 ,(ö( ,I
',!7
,
(5 ,131
(Y. 5,
(12,11
(187,735
(1,1:43,707
(ö,ö11,I:;:U
FERC FORM NO.2 (ED 12-96)Page 512
I Name ot Hesponaent This ~ort Is:I Date ot Heport Year of Report
(1) An Original (Mo, Da, Yr)
Avista Corporation (2)0 A Resubmission April 17, 2009 Dec. 31, 2008
GAS STORAGE PROJECTS (Continued)
1. On Line 4, enter the total storage capacity certlticatea oy i-l:H(;.
2. Report total amount in Dth or other unit as applicable on lines 2, 3, 4, 7.
If Quantit is converted from Mcf to Dth, provide conversion factor in a footnote.
Line Item Total
No.Amount
ia)(0)
storage Operations (In Dth)
1 Top or Workina Gas End of Year (Note)6,078,789
2 Cushion Gas (Includina Native Gas)7,36,462
3 Total Gas in Reservoir (Enter Total of Line 1 and 2)13,447,251
4 Certificated Storage Capacity 15,353,156
5 Number of Injection - Withdrawal Wells 54
6 Number of Observation Wells 48
7 Maximum Dav's Withdrawal from Storaae 236,572
8 Date of Maximum Days' Withdrawal December 15, 2008
9 LNG Terminal Companies (In Dth)
10 Number of Tanks
11 Capacity of Tanks
12 LNG Volumes
13 Received at "Ship Rail"
14 Transferred to Tanks
15 Withdrawn from Tanks
16 "Boil Of" Vaporization Loss
17 ¡Notes:
18
19 The above information represents the company's one-third share of the Jackson Prairie Underground Storage Project.
20
21 The factor to convert Mcf to Dth is 1.0400
22
23
24
FERC FORM NO.2 (ED 12-96)Page 513
Name of Respondent Year of Report
Avista Corp.
This ~ort Is:
(1) l2 An Original
(2) 0 A Resubmission
Date of Report
(Moi Da, Yr)
April 17, 2009 Dec. 31, 2008
DISTRIBUTION MAINS
ine
No.
Kind of Material
fa)
Show particulars Called for Concerning Distribution Mains
Total Length in
Use Beginning of
Year, Feet
(e)
Diameter of
Pipe, Inches
(b)
Laid During
Year, Feet
(d)
I Taken up or
Abandoned Durin
Year, Feet
(e)
Total Length
in Use End
of Year, Feet
(f
1
2 Steel Wrapped
3 Steel Wrapped
4 Steel Wrapped
5 Steel Wrapped
6 Steel Wrapped
7
8 Plastic
9 Plastic
10 Plastic
11 Plastic
12 Plastic
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
3637 TOTALS
Less than 2"
2"t04"
4" to 8"
8" to 12"
Over 12"
Less than 2"
2" to 4"
4" to 8"
8" to 12"
Over 12"
10,301,280
2,803,680
2,893,440
200,640
52,800
17,793,600
3,579,840
733,920
o
o
10,560
26,400
21,120
10,560
o
692,894
290,030
371,131
2,851
o
258,720
58,080
63,360
o
52,800
10,053,120
2,772,000
2,851,200
211,200
o
o
o
o
o
o
18,486,494
3,869,870
1,105,051
2,851
o
38,359,200 1,425,546 432,960 39,351,786
Note: WP Natural Gas laid pipe is net of retirements.
FERC FORM NO.2 Page 514-A
Name of Respondent This Report Is:Date of Report Year of Report
(1)(K An Original (Mo, Da, Yr)
Avista Corp.(2)0 A Resubmission April 17, 2009 December 31, 2008
SERVICE PIPES GAS
Show the particulars called for concemin! the line service pipe in pOssessiol" of the rest: ondent 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 Yea During Year of Year in Feet
(a)(b)(c)(d)(e)m (g)
1
2 Steel Wrapped l' or Less 87,156 153 0 87,309 Not
3 Steel Wrapped 1" thru 2"1,852 9 25 1,836 Available
4 Steel Wrapped 2" thru 4"65 6 3 68
5 Steel Wrapped 4" thru 8"10 0 0 10
6 Steel Wrapped Over 8" 1 0 0 1
7
8 Plastic l' or Less 219,803 16,491 0 236,294
9 Plastic 1" thru 2"2,969 123 0 3,092
10 Plastic 2" thru 4"104 5 0 109
11 Plastic 4" thru 8"5 0 0 5
12 Plastic Over 8"0 0 0 0
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27 TOTALS 311,965 16,787 28 328,724
FERC FORM NO.2 Page 514-8
Name of Respondnt Th RlËrt Is:Date of Rert Yea of Repo
(1) X An Orgi (Mo, Da, Yr)
Avista Corp.(2)D A Resubmission Apr 17 , 20 Dec. 31,2008
CUSTOME'S MElERS
Owned
Line Siz Type Mak Capacity Begig Added Retied Owned
No.of Yea Durg Yea DugYear End of Yea
(a)(b)(c)(d)(e)(f (J!)(h)
1 Detaed inormation not avaiable.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16 TOTAL 333,823 14,168 7,879 34,112
.
FERC FORM NO.2 Page 514-C
Avista Corporation
This '!ort Is:
(1) L? An Original
(2) 0 A Resubmission
I Date of Report
(Mo, Da, Yr)
April 17, 2009
Year of ReportName of Respondent
Dec. 31, 2008
AUXILIARY PEAKING FACILITIES
1. Report below auxiliary facilties of the respondent for meeting seasonal peak demands on tne respondent s system,
such as underground storage project, liquefied petroleum installations, gas liquefacton plants, oil gas sets, etc.
2. For column (e), for underground storage projects, report the delivery capaci on February 1 of the heating
season overlapping the year-end for which this report is submitted. For other facilties, report the rated maximum
daily delivery caacities.
3. For column (d), include or exclude (as appropriate) the cost of any plant used jointly with another facilty on the basis
of predominant use, unless the auxilary peaking facilty is a separate plant as contemplated by genera instruction
12 of the Uniform System of Accounts.
(a)
¡Was i-aciity uperatea
Maximum Daily Cost on Day of Highest
Type of Facilty Delivery Capacity of Transmission Peak
of Facilty.Facilty Delivery
Dth (In dollars)Yes No
(b)(c)(d)(e)(f
Underground Natural Gas 268,667 31,294,474 X
Storage Field
Washington & Idaho Supply
Underground Natural Gas 26,000 5,060,898 X
Storage Field
Oregon Supply
Underground Natural Gas 2,623 (1 )X
Storage Field
Oregon Supply
Underground Natural Gas 15,000 (1 )X
Storage Field
Oregon Supply
Underground Natural Gas 186,125 (1 )X
Storage Field
Washington & Idaho Supply
Underground Natural Gas 63,875 (1 )X
Storage Field
Oregon Supply
Location of
Facilty
Line
No.
1
2 Chehalis, Washington
3
4
5
6 Chehalis, Washington
7
8
9
10 Chehalis, Washington
11
12
13
14 Mist, Oregon
15
16
17
18 Rock Springs, Wyoming
19
20
21
22 Rock Springs, Wyoming
23
24
25
26
27 Notes:
28
29 (1) Respondent is a participant in the facilties, not an owner and is charged a fee for demand deliverabilty and capacity.
30
31
32
33
34
35
36
37
FERC FORM NO.2 (ED 12-96)Page 519
Name of Respondent This ~eport Is:Date of Report Year of Report
(2 An Onginal (Mo, Da, Yr)
Avista Coration 0 A Resubmission Apn117, 200 Dec. 31, 2008
GAS ACCOUNT - NATURA GAS
1 Th purp of th schedul is to ac fo th qu or intr lí an wh th re pi I8
of natral gas reiv and de by th repo th ga lí or Intst facU, but no th any
2 Natul gas means eier nara ga unix or an of th in po of th reg plpin, an (3) Uie gatg
mlxtre of natural and manufre ga.Hne qunt tht_ no de fo Intrs market or th were
3 Enter in coumn ( c ) th Dt as re in Uie notrnsp Uirogh any Intete poon of th rertng
scedules indica fo th itms of repts end pipein.
deives.7 Also Indicate in a fotn (1) th sysm supp quanUt of ga
4 Indicate in a foote th qua of bundle sales tht are st by Uie reng pipeline, during th reng yer and
and trnspotion gas and spe th line on whic als repo as sale. trnstion, and copreion voume by
such quenti are listed.th rert pipein during th same repo yer, (2) Uie sym
5 If Uie repondent oprate two or mo sy whic suppl quanti of gas Uiat are stor by Uie reportng pipeline durng
are notintercnnec, submit separate paes fo Uiis th repong yer which Uie repong pipeline intends to sell or
purpos. Use copies of pages 520.trnspo in a fure reportng year, and (3) coct stge
6 Also Indicate by foot Uie quanles of gas not subjec quantities.
to Commisio reulation whic did not incur FERC 8 Alo indica th volmes of pipene pructon fild sales Uiat are
regulato cots by shong (1) th loc disbbuton Included in bo Uie copans lo saes fiure and Uie copany's
voumes anoter jurisdictonal pipein deiv to th total trnspoon fire. Add addital ro as nery to
lol distuton company po of th reng repo all data, numbere 14.01, 14.02, etc.
pipeine (2) Uie quanties Uie repong pie
trnspo or sold throuah it lol distributon facilites
01 NAME OF SYSTEM
Line
No.Item Amount of DU
faJ (c)
2 GAS RECEIVED
3 Gas Purcases (Accunts 800-05\72,536,091
4 Gas of Oters Recived for Gathennc (Accunt 489.1 )
5 Gas of Oters Recived for Transmission (489.2)
6 Gas of Others Received for Distrbuton (Acunt 489.3)14,872,326
7 Gas of Others Received fo Cotrct Storaae (Acunt 489.4\
8 Exchanged Gas Recived frm Oters (Acnt 806\
9 Gas Recived as Imbalances (Acunt 806\
10 Reciots of Resoondents Gas Transortd bY Oters (Acunt 858)
11 Other Gas Withdrawn from Storace (Exolain\
12 Gas Received frm Shiooers as coDressr Sttion Fuel
13 Gas Recived from Shiooers as Lost and Unaccnte for
14 Other Receiots (Soeifv:
15 Total Receipts CTotallines 3 ~87,408,417
16 r.'A~ 'li:II\,
17 Gas Sales (Accunts 480 - 484 \35,107,144
18 Delivenes of Gas Gathere for Oters (Acunt 489,1 )
19 Delivenes of Gas Transoorted for Others-(Acunt 489.2)
20 Delivenes of Gas Distnbuted for Others (Accunt 489.3)14,872,326
21 Delivenes of Contrct Storaae Gas (Accnt 489.4)
22 Exchange Gas Delivered to Otrs (Acnt 80\
23 Gas Delivered as Imbalances (Accnt 806\
24 Delivenes of Gas to Oters for TransDOrttion (Acunt 858)
25 Other Gas Delivered to Storace lExl:ainl
26 Gas Used for Comoressor Station Fuel 2,532,007
27 Othr Deliveries (SoeciM: Sales for Resale 34,896,940
28 Total Delivenes CTotallines 17 thru 27.7)87,408,417
29 GAS !1t:U FOR
30 Producton System Losss
31 Gathenng Sysem Loss
32 Transmission System Losses
33 Distrbution SyStem Losses
34 Storage SYStem Losses
35 Oter Losses (SoeiM
36 Total Unaccunte For lTotallines 30 thru 35)0
37 Total Delivenes & Unaccunted For (Total lines 28 thru 36\87,408,417
FERC FORM NO.2 (REV 04-04)Page 520
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) 2Ç An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
FOOTNOTE DATA
¡Schedule Page: 224 Line No.: 5 Column: f
Line 5 - Avista Capital - Other changes in Net Investment:
Represents the liability to non-controlling interest at Advantage IQ
¡Schedule Page: 224 Line No.: 6 Column: f
Line 6 - Avista Capital - Other changes in Net Investment:
Represents the change in controlling ownership of Advantage IQ
I FERC FORM NO.2 (ED. 12-87)Page 450.1
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) 2Ç An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 0416/2009 2008/Q4
FOOTNOTE DATA
!Schedule Page: 256 Line No.: 22 Column: h
Background
On December 31, 2008, the City of Forsyt, Montana Pollution Control Revenue Refuding Bonds, Series
1999A (Avista Corporation Colstrp Project) due 2034 were remarketed on behalf of Avista Corp. in the amount
of $66.7 milion. A vista Corp, purchased the Bonds and expects that at a later date, subject to market
conditions, the bonds wil be refuded or remarketed to unaffiliated investors.
The trut Indenture indicates the following:
THE BONDS SHAL NOT BE DEEMD TO CONSTITUTE A DEBT, LIABILITY OR GENERA
OBLIGATION OF THE ISSUER, THE STATE OR OF AN POLITICAL SUBDIVISION THEREOF,
OR A PLEDGE OF THE FAITH AN CREDIT OF THE ISSUER, THE STATE OR OF AN SUCH
POLITICAL SUBDIVISION, BUT SHAL BE PAYABLE SOLELY FROM THE REVNUS AN
PROCEEDS PROVIDED THEREFOR. THE ISSUER SHAL NOT BE OBLIGATED TO PAY THE SAM
NOR INTEREST THEREON EXCEPT FROM THE REVENUES AN PROCEEDS PLEDGED THEREFOR,
AN NEITHER THE FAITH AN CREDIT NOR THE TAXING POWER OF THE ISSUER, THE STATE
OR OF AN POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMT OF THE
PRINCIPAL OF OR THE INTEREST ON THE BONDS.
Accountig Guidance
SF AS 140 paragraph 16 indicates that there are specific criteria that must be met in order to remove a liability
from the financial statements.
Paragraph 16 - A debtor shall derecognize a liability if and only if it has been extinguished. A liabilty
has been extinguished if either of the following conditions is met:
a. The debtor pays the creditor and is relieved of its obligation for the liability. Paying the
creditor includes delivery of cash, other financial assets, goods, or services or reacquisition by the
debtor of its outstanding debt securties whether the securties are canceled or held as so-called
treasury bonds.
b. The debtor is legally released from being the primar obligor under the liability, either
judicially or by the creditor.
Conclusion
The $66.7 milion of pollution control bonds should be excluded from Avista Corp's balance sheet based upon
the following:
A vista Corp. has effectively paid the creditors by purchasing the outstanding Bonds, which meets the
requirements of paragraph i 6a.
I FERC FORM NO.2 (ED. 12-87)Page 450.1 .1
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/04
FOOTNOTE DATA
Although the Bonds are not in Avista Corp's name, the trst indenture indicates that the Bonds shall not
be deemed to be an obligation of the issuer (the City of Forsyt). The bonds are effectively a "conduit
bond" which indicates they are the obligation of Avista Corp. Therefore, the reacquisition of bonds that
A vista Corp is the primar obligor would meet the requirements of paragraph 16a to extinguish the
bonds.
¡Schedule Page: 256 Line No.: 31 Column: h
The $272,860,000 Senior Notes matued June 1,2008.
I FERC FORM NO.2 (ED. 12-87)Page 450.2
Name of Respondent This Report is:Date of Report Year/Period of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 041612009 2008/04
FOOTNOTE DATA
!Schedule Page: 261 Line No.: 8 Column: a
Schedule Page: 261 Line No: 5 Column: b
Taxable Income Not Reported on Books
Tax NOT Book Income BPA C&R Receipts
Tax NOT Book Income
Tax NOT Book Income
Tax NOT Book Income
Tax NOT Book Income
Tax NOT Book Income
Tax NOT Book Income
Tax NOT Book Income
Tax NOT Book Income
Tax NOT Book Income
Tax NOT Book Income
Tax NOT Book Income
Contrbutions in Aid of Constrction - Electrc 6,259,362
CSS Temp Servce Fees - il 54,920
CSS Temp Service Fees - W A 73,800
Customer Uncollectibles - Sales for Resale - ED AN 2,705,100
Contrbutions In Aid of Constrction - Gas Nort 304,971
BETC - Oregon Purchased Tax Credits (~ 87%)
Contrbutions in Aid of Constrtion - OR
(96,870)
32,762
Customer Uncollectibles (excludig ED AN 125,086
Customer Uncollectibles (excluding ED AN 33,340
Customer Uncollectibles (excluding ED AN 15,401
BETC Interest - Perm Diff
(6,023)
9,501,848
Schedule Page: 261 Line No:10 Column: b
Deductions Recorded on Books Not deducted for Return
Book NOT Tax Expense Book Depreciation - Electrc
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
71,818,207
DSM - Old Electrc Program Amort 1,280,293
F AS 106 - Deferred Amort Postretie Benefits - ED il 88,782
F AS 106 - Deferred Amort Postretire Benefits - ED W A 250,574
Montaa Settlement - ED il
Monta Settement - ED W A
(1,428,501)
(2,779,808)
(277,615)
(33,828)
194,949
Non-moneta Purchaed Power
Rathdr Turbine Sales Tax Refud
Redemption Expense Amort - PCBs
WN3 - Investment Exchange Power 2,450,031
Book Depreciation - Gas Nort 11,614,556
I FERC FORM NO.2 (ED. 12-87)Page 450.1
Name of Respondent This Report is:Date of Report Year/Period of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
FOOTNOTE DATA
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
Book NOT Tax Expense
DSM - Old Gas Program Amort 437,557
F AS 106 - Deferred Amort Postretie Benefits - GD W A 55,561
Book Depreciation - Gas South 4,510,915
Transporttion Book Depreciation 113,228
Ailane Lease Payments 215,186
FAS 106 (68.6% O&M)
Meal Disallowaces
(955,212)
272,755
Paid Time Off Equalization 427,699
Redemption Expense Amort 2,394,894
Transportation Book Depreciation 999,769
Airplane Lease Payments 57,355
FAS 106 (68.6% O&M)
Meal Disallowances
(254,599)
72,699
Paid Time Off Equaliation 113,998
Redemption Expense Amort 638,328
Transportation Book Depreciation 263,810
Airplane Lease Payments 26,495
FAS 106 (68.6% O&M)
Meal Disallowances
(117,609)
33,583
Paid Time Off Equalization 52,660
Redemption Expense Amort 294,869
401(k) ESOP Dividend Deduction
AVA Holding Co - Corporate Restrctue
(1,044,570)
7,921
Impaient on LM 2500
Political Contrbutions
(2,289,978)
1,211,098
Preferred Dividend Requiement
SERP - Supplemental Executive Retirement Plan 629,528
Page 450.2I FERC FORM NO.2 (ED. 12-87)
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) ~ An Original (Mo, Da, Yr)
Avista Corporation I (2) A Resubmission 0411612009 2008/04
FOOTNOTE DATA
Book NOT Tax Expense Penalties 138,152
91,483,730
Schedule Page:261 Line No:15 Column b
Income Recorded on Books Not Included in Return
Book NOT Tax Income AFC - Electrc
(1,934,908)
Book NOT Tax Income Boulder Park Disallow - IPUC Order 10/2004
(103,530)
Book NOT Tax Income Clark Fork PMEs - ED ID
(274,403)
Book NOT Tax Income CS2 Retention - ED ID
(174,560)
Book NOT Tax Income Gain General Offce Building - ED
(196,092)
Book NOT Tax Income Grid WestlTO Funding - ED.ID 70,806
Book NOT Tax Income Grid WestlTO Funding - ED.WA 158,213
Book NOT Tax Income Idaho PCA 1,660,797
Book NOT Tax Income Injur & Damges - Electrc 135,500
Book NOT Tax Income Kettle Falls Disallowance - ED W A
(134,954)
Book NOT Tax Income NE Tan Spil
(36,933)
Book NOT Tax Income Nez Perce Settement - ED ID 5,212
Book NOT Tax Income Nez Perce Settlement - ED W A
(22,008)
Book NOT Tax Income Unbiled Revenue Add-ons - ED ID 598,226
Book NOT Tax Income Unbiled Revenue Add-ons - ED W A 747,631
Book NOT Tax Income W A Deferred Power Costs 23,802,834
Book NOT Tax Income Warila Units 233,428
Book NOT Tax Income Warila Units 785,184
Book NOT Tax Income AFUDC - Gas Nort
(295,526)
Book NOT Tax Income Decoupling Mechansm - W A Gas
(249,921)
Book NOT Tax Income Deferred Gas - GD ID 3,217,554
Book NOT Tax Income Deferred Gas - GD W A 8,749,580
Book NOT Tax Income Deferred Gas - GD AN 1,597,806
Book NOT Tax Income Gain General Offce Building - GD
I FERC FORM NO.2. (ED. 12-87) Page 450.3
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) 2Ç An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 20081Q4
FOOTNOTE DATA
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Book NOT Tax Income
Injur & Damges - Gas Nort
(65,364)
1,100,321
Unbiled Revenue Add-ons - GD ID 48,717
Unbiled Revenue Add-ons - GD WA 182,690
AFUDC - Gas South
Deferred Gas - OR
(119,981)
8,148,345
DSM OR - Additions - 186700 - GD OR 2,628,336
DSM OR - Amortzation - 495600
DSM OR - Amortzation - 908250
(38,608)
1,263,423
DSM OR - Amortzation Accrual - 908250 (DJ 235)50,056
Injur & Damges - Oregon
Deferred Gas - ID - Interest 201,846
Deferred Gas - W A - Interest 540,412
DFIT on Equity Stock Comp 2,411,528
DFIT on Liability Stock Comp 284,319
Idaho PCA - Interest
(1,152,699)
Kettle Falls Nonoperating - ED ID
Offcers Life Inurce (Cash Surender)
(53,066)
(960,878)
(11,007)
9,593,949
Offcer Life Inurance Benefit Accrual
PGE Monetiation (Spokane Energy)
W A Deferred Power Costs - Interest
Tax-Exempt Interest Income
(2,231,098)
(317,272)
162,390OR Deferred Gas - Interest
OR DSM Deferred - Interest
Wind Generation AFUDC
(213,177)
(35,194)
(738,101)
Colstrip Settement - ED ID
Colstrip Settlement - ED W A
I FERC FORM NO.2 (ED. 12-87) Page 450.4
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1 ) ~ An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/1612009 2008/Q4
FOOTNOTE DATA
Book NOT Tax Income
Book NOT Tax Income
Chicago Cliate Exchage - ED ID 754,484
Chicago Cliate Exchage - ED W A
59,774,306
Schedule Page:261 Line No: 20 Column b
Deductions on Return Not Charged Against Book Income
Tax NOT Book Expense BPA Residential Exchange - ED ID
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
Tax NOT Book Expense
609,223
BP A Residential Exchange - ED W A 3,140,406
Cost of Removal 1 Salvage - Electrc
DSM Tarff Rider - ED ID
(1,760,187)
(1,768,539)
DSM Tarff Rider - ED W A
DSM Tarff Rider - ED AN
(1,587,898)
320,000
Tax Depreciation - Electrc
Tax Depreciation - Rathdr Turbine
(132,192,708)
(3,836,432)
(117,163)
(627,887)
Cost of Removal i Salvage - Gas Nort
DSM Tar Rider - GD ID
DSM Tarff Rider - GD W A
DSM Tarff Rider - GD AN
(1,273,972)
o
Tax Depreciation - Gas Nort
(29,658,937)
Cost of Removal 1 Salvage - Oregon
(359,686)
Tax Depreciation - OR Gas
Tax Depreciation - Basic American Foods Non-Utility
(15,594,413)
(12,785)
(458,114)
1,110,571
Tax Depreciation - Sandpoint Acquisition Adjustment
WPNG Acquisition OR - Book
Tax Amortization WPNG Acquisition - OR
Section 199 Manufactug Deduction
(631,039)
(2,830,350)
(1,186,711)
(4,856,348)
Oregon Senate Bil 408 (SB 408)
Deferred Compensation Accrual
F ASB 87 & Retiement Pay Accrual (68.6% O&M)
I FERC FORM NO.2 (ED.
12-87) Page 450.5
Name of Respondent This Report is:Date of Report YearlPeriod of Report
(1) X An Original (Mo, Da, Yr)
Avista Corporation (2)A Resubmission 04/16/2009 2008/Q4
FOOTNOTE DATA
Tax NOT Book Expense Interest Rate Swaps - Amortization
(17,760,785)
(10,838,756)
(1,294,396)
(4,733,906)
(2,888,929)
(597,933)
(2,186,778)
Tax NOT Book Expense Deferred Compensation Accrual
Tax NOT Book Expense FASB 87 & Retiement Pay Accrual (68.6% O&M)
Tax NOT Book Expense Interest Rate Swaps - Amrtzation
Tax NOT Book Expense Deferred Compensation Accru
Tax NOT Book Expense F ASB 87 & Retiement Pay Accrul (68.6% O&M)
Tax NOT Book Expense Interest Rate Swaps - Amortation
(1,334,511)
Tax NOT Book Expense CDA Lake Settlement ED ID
Tax NOT Book Expense CDA Lae Settement ED W A
Tax NOT Book Expense CDA Lake Settement ED AN
(27,733,385)
(262,942,348)
I FERC FORM NO.2 (ED. 12-87) Page 450.6
Name of Respondent This report is:Date of Report Year of Report
(1) (X)A Original (Mo, Da, Yr)
Avista Corp.(2) ( ) A Resubmission April 17, 2009 Decmber 31,2008
MISCELlEOUS GENERA EXPENSES (Acunt 930.2) (Gas)
FOOTNOTE DATA
¡Schedule Page: 335 Line No.: 5
Direct 2008
Vendor Nsme
HEIDI B STANLEY
BRIAN W DUNHAM
ERIK J ANDERSON
KRISTIANNE BLAE
JOHNFKELLY
MICHAEL L NOEL
R JOHN TAYLOR
JACK W GUSTAVEL
LURA J POWEl
ROYEIGUREN
Expenses
$9,00
$16,041
$27,373
$25,875
$30,024
$20,960
$10,172
$8,90
$8,678
$26,095
¡Schedule Page: 335 Line No.: 6
Vendor
Vendors Under $5000
ADVENTURS IN ADVERTISING
BOARDVANT AGE INC
BOWNE OF LOS ANGEES INC
BROADRlDGE
CITBANKNA
CITY OF SPOKANE
CORP CREDIT CARD
DEWEY & LEBOEUF UP
EDISON ELECIC INST
EXECUTVE MBA PROGRAM
FIH RATINGS
KORN FERRY INTATIONAL
MELON INVR SERVICES LLC
MOODYS INESRS SEVICE
NYSE MAKE INC
OEDA
PAT NEWMANN
STVE L VINCE
TH BANK OF NE YORK
TIE COEUR D AL
TH COEUR D AL RERT
TH LAURE HI ADVISORY GROUP LLC
Purpose Amount
Pay Stations
Sub.~ciption~
Professional Serice
Gene Serice
Mio;llaneous
Miscellanus
Sub5ciptions
Geeta Serices
Donatons
Employee Mise Expense
Miscllaneous
Misclaneous
Miscellaneus
Miscllanus
Geer SericeMiscllan
Prfesion Seric
Employee Mise Expens
Miscllanus
Misllaneous
Employee Loging
Gener Serice
117,815
599.22
8050.97
7744.32
14087.81
13693.69
5393.07
28321. I
12425.56
6598.28
7010
11917
49958.59
403.89
26357.6
1380.9750
10336.9
11524.42
79rn.74
5923.11
1057.12
6198.44
2GUgìîr\ Y 21 M~ 10= 26
2008 Forni 2
State Supplements
o;",..,r::ir \. ;.,,~_;'¡,,/ :l... ;
I,PY"7 IP," in. "5LA t: i'j;'1 i~,. t.
IDAHO
~
Name of Respondent Ths Report Is:
(1)~An Orginl
A vista Corporation.(2)DA Resubmission
Date of Report
(Mo, Da, Yr)
State of Idaho
Year of Report
April 17, 2009 December 3 i, 2008
SUMMAY OF UTILITY PLANT AND ACCUMULATED PROVISIONS
FOR DEPRECIATION, AMORTIZATION AND DEPLETION
Line Item Total Electric
No.
(a)
i UTILITY PLANT
2 In Service
3 Plant in Service (Classified)796,823,282 670,684,893
4 Pro ert Under Ca ital Leases 1,633,474
5 Plant Purchased or Sold
6 Com leted Constrction not Classified
7 Investment in Kettle Falls
8 TOTAL (Enter Total of lines 3 thru 7)798,456,756 670,684,893
9 Leased to Others
10 Held for Future Use 39,828
1l Constrction Work in Progress 3,583,492 3,037,585
12 Ac uisition Adjustments 0 0
13 TOTAL Utilty Plant (Eter Total of lines 8 th 12)802,080,076 673,722,478
14 Accum. Prov. for De r., Amort., & De i.0 0
15 Net Utility Plant (Enter total of line 13 less 14)802,080,076 673,722,478
DETAIL OF ACCUMUATED PROVISIONS FOR
16 DEPRECIATION, AMORTIZATION AND DEPLETION
17 In Service:
18 De reciation
19 Amort. and De i. of Producin Nat. Gas Land and Land Rights
20 Accumulated Depreciation - Kettle Falls
21 Amort. of Other Utility Plant
22 TOTAL in Service (Enter Total of lines 18 th 21)
23 Leased to Others
24 De reciation
25 Amortization and De letion
26 TOTAL Leased to Others (Enter Total of lines 24 and 25)
27 Held for Future Use
28 De reciation
29 Amortization
30 TOTAL Held for Future Use (Ent. Tot. of lines 28 and 29)
31 Abandonment of Leases (Natural Gas)
32 Amort. of Plant Ac uisition Ad'ustment 0 0
TOTAL Accumulated Provisions (Should agree with line 14 above)
33 (Enter Total of lines 22, 26, 30, 31, and 32)0 0
FERC FORM NO.2 (ED. 12-89)Page 200
J
Name of Respondent This R~ort Is:
(1) 12 An Orginal
Date of Report
State of Idao
Year of Report
A vista Corporation (2) D A Resubmission April 17, 2009 December 31, 2008
SUMY OF UTITY PLAN AN ACCUMATE PROVISIONS
FOR DEPRECIATION, AMORTIATION AN DEPLETION (Continued)
Gas Other (Specify)Other (Specify)Other (Specify)Common Line
No.
39,828
495,965
1
2
5,353,066 3
1,230,285 4
5
6
7
6,583,351 8
9
10
49,942 11
12
6,633,293 13
14
15
120,785,323
403,189
121,188,512
o o 33
FERC FORM NO.2 (ED. 12-89)Page 201
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo,Da, Yr)
Avista Corp.(1 A Resubmission Feb. 16, 2009 Dec. 31, 2008
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. Attch 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
Line Account Beginning of Year Additions
No.(a)(b)(c
1 INTANGIBLE PLANT
2 301 OrQanization 0
3 302 Franchises and Consents 0
4 303 Miscellaneous IntanQible Plant 168,450 0
5 TOTAL IntanQible Plant (Enter Total of lines 2 thru 4)168,450 0
6 PRODUCTION PLA
7 Manufactured Gas Production Plant
8 304 Land and Land Rights 0
9 305 Structures and Improvements 0
10 306 Boiler Plant Equipment 0
11 307 Other Power Equipment 0
12 308 Coke Ovens 0
13 309 Producer gas equipment 0
14 310 Water Gas Generating Equipment 0
15 311 Liquefied Petroleum Gas Equipment 0
16 312 Oil Gas GeneratinQ Equipment 0
17 313 GeneratinQ Equipment-Other Processes 0
18 314 Coal, Coke, and ash handlina eauioment 0
19 315 Catalvtic CrackinQ Equipment 0
20 316 Other reformina equipment 0
21 317 Purification equipment 0
22 318 Residual refining equipment 0
23 319 Gas mixing equipment 0
24 320 Other EQuioment 0
25
26 TOTAL Manuafactured Gas Production Plant (Enter Total of lines 8 thru 24)0 0
27 PRODUCTS EXTRACTION PLAT
28 340 Land and Land Riahts 0
29 341 Structures and Imorovements 0
30 342 Extraction and Refining Equipment 0
31 343 Pipe Línes 0
32 344 Extracted Products Storage Equipment 0
33 345 Compressor Equipment 0
State of Idaho
FERC FORM NO.2 (ED. 12-96)Page 204
State of Idaho
Name of Respondent This report is:
( XJ An Original
Date of Report
(Mo,Dal Yr)
Year Ending
Avista Corp.J A Resubmission Feb. 16, 2009 Dec. 31, 2008
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 wil 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 suplementary
plant actually in service at end of year. statement showing subaccount classification of such plant
6. Show in column (f) reclassifications or transfers within utilty 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 propert 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 fied with the Commission as required by the Uniform
the amounts with respect to accumulated provision for System of Accounts, give date of such filng.
depreciation, acquisition adjustments, etc.,
Transfers Balance at End of Year Line
( )No.
1
2
3
4
5
6
7
0 8
0 9
0 10
0 11
0 12
0 13
0 14
0 15
0 16
0 17
0 18
0 19
0 20
0 21
0 22
0 23
0 24
25
0 0 0 0 26
27
0 28
0 29
0 30
0 31
0 32
0 33
FERC FORM NO.2 (ED. 12-96)Page 205
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Moi OBi Yr)
Avista Corp.(1 A Resubmission Feb. 16, 2009 Dec. 31, 2008
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
34 346 Gas Measurini: and Rei:ulatini: Equipment 0
35 347 Other EQuipment 0
36 TOTAL Products Extraction Plant (Enter Total of lines 28 thru 35)0 0
37 TOTAL Natural Gas Production Plant (Enter Total of lines 26 and 36)0 0
38 Manufactured Gas Production Plant (Submit SUOlJ/ementarv Statement)
39 TOTAL Production Plant (Enter Total of lines 37 and 38)0 0
40 NATURAL GAS STORAGE AND PROCESSING PLANT
41 UnderQround Storai:e Plant
42 350.1 Land 0
43 350.2 Rights-of-Way 0
44 351 Structures and Improvements 0
45 352 Wells 0
46 352.1 Storage Leaseholds and Rii:hts 0
47 352.2 Reservoirs 0
48 352.3 Non-recoverable Natural Gas 0
49 353 Lines 0
50 354 Compressor Station Equipment 0
51 355 Measurini: and Rei:ulatini: Equipment 0
52 356 Purification Equipment 0
53 357 Other EQuipment 0
54 TOTAL Underground StoraQe Plant (Enter Total of lines 42 thru 53)0 0
55 Other Storage Plant
56 360 Land and Land Rights 0
57 361 Structures and Improvements 0
58 362 Gas Holders 0
59 363 Purification Equipment 0
60 363.1 Liquefaction Equipment 0
61 363.2 VaPOrizini: Equipment 0
62 363.3 Compressor Equipment 0
63 363.4 Measuring and Regulating Equipment 0
64 363.5 Other Equipment 0
65 TOTAL Other Storai:e Plant (Enter Total of lines 56 thru 64)0 0
66 Base Load Liquefied Natural Gas Terminalini: and Procssini: Plant
67 364.1 Land and Land Rii:hts 0
68 364.2 Structures and Improvements 0
69 364.3 LNG Processini: Terminal EQuipment 0
70 364.4 LNG Transporation Equipment 0
71 364.5 Measuring and Regulating Equipment 0
72 364.6 Compressor Station Equipment 0
73 364.7 Communications Equipment 0
74 364.8 Other Equipment 0
75 TOTAL Base Load Liq Nat'l Gas, Terminal and Processing Plant (lines 67-74)0 0
76 TOTAL Nat'l Gas Storai:e and Processini: Plant (Total of lines 54, 65 and 75)0 0
77 TRANSMISSION PLANT
78 365.1 Land and Land Rii:hts 0
79 365.2 Rights-of-Wav 0
80 366 Structures and Improvements 0
State of Idaho
FERC FORM NO.2 (ED. 12-96)Page 206
State of Idaho
Name of Respondent This report is:
( Xl An Original
Date of Report
(Mo,Da, Yr)
Year Ending
Avista Corp. ( ) A Resubmission Feb. 16, 2009 Dec. 31, 2008
Retirements Adjustments Transfers Balance at End of Year Line
d e f (No.
0 34
0 35
0 0 0 0 36
0 0 0 0 37
0 38
0 39
40
41
0 42
0 43
0 44
0 45
0 46
0 47
0 48
0 49
0 50
0 51
0 52
0 53
0 0 54
55
0 56
0 57
0 58
0 59
0 60
0 61
0 62
0 63
0 64
0 65
66
0 67
0 68
0 69
0 70
0 71
0 72
0 73
0 74
0 0 0 0 75
0 0 0 0 76
77
0 78
0 79
0 80
FERC FORM NO.2 (ED. 12-96)Page 207
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo,Dal Yr)
Avista Corp.(J A Resubmission Feb. 16, 2009 Dec. 31, 2008
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.(a)(b)(c)
81 367 Mains 0
82 368 Compressor Station Equipment 0
83 369 Measunng and Regulating Equipment 0
84 370 Communications Equipment 0
85 371 Other Equipment 0
86 TOTAL Transmission Plant (Enter Totals of lines 78 thru 85)0 0
87 DISTRIBUTION PLANT
88 374 Land and Land RiQhts 24,670
89 375 Structures and Improvements 130,150 31,419
90 376 Mains 63,795,110 8,563,747
91 377 Compressor Station Equipment 0
92 378 Measunng and Regulating Equipment-General 1,146,355 396,396
93 379 Measunng and Regulating Equipment-City Gate 1,014,203 3,146,228
94 380 Services 41,575,050 2,326,735
95 381 Meters 10,455,280 7,412,072
96 382 Meter Installations 0
97 383 House Regulators 0
98 384 House Regulator Installations 0
99 385 Industnal Measuring and Regulating Station Equipment 523,538 54,274
100 386 Other Propert on Customers' Premises 0
101 386 Other Equipment 0
102 TOTAL Distribution Plant (Enter Totals of lines 88 thru 101)118,664,356 21,930,871
103 GENERAL PLANT
104 389 Land and Land Rights 0
105 390 Structures and Improvements 0
391 Office Furniture and Equipment 0
107 392 Transportation Equipment 775,347 152,412
108 393 Stores Equipment 0
109 394 Tools, Shop, and GaraQe Equipment 436,906 22,622
110 395 Laboratory Equipment 58,689
111 396 Power Operated Equipment 763,033 0
112 397 Communication Equipment 321,734 2,719
113 398 Miscellaneous Equipment 0
114 Subtotal (Enter Totals of lines 104 thru 113)2,355,707 177,753
115 399 Other Tangible Property 0
116 TOTAL General Plant (Enter Totals of lines 114 and 115)2,355,707 177,753
117 TOTAL (Accounts 101 and 106)121,188,512 22,108,624 I
118 Gas Plant Purchased (See Instruction 8)
119 (Less) Gas Plant Sold (See Instruction 8)
120 Expenmental Gas Plant Unclassified
121 TOTAL Gas Plant in Service (Enter Totals of lines 117 thru 120)121,188,512 I 22,108,624 I
State of Idaho
FERC FORM NO.2 (ED. 12-96)Page 208
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Moi Dai Yr)
Avista Corp.(1 A Resubmission Feb. 16, 2009 Dec. 31, 2008
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.
0 81
0 82
0 83
0 84
0 85
0 0 0 0 86
87
0 24,670 88
0 161,569 89
413,266 0 71,945,591 90
0 91
15,995 0 1,526,756 92
4,160,431 93
61,897 0 43,839,888 94
0 17,867,352 95
0 96
0 97
0 98
577,812 99
0 100
0 101
491,158 0 0 140,104,069 102
103
0 104
0 105
0 106
0 927,759 107
0 108
4,826 454,702 109
24,837 33,852 110
.763,033 111
46,423 278,030 112
0 113
76,086 0 0 2,457,374 114
0 115
76,086 0 0 2,457,374 116
567,244 0 0 142,729,892 117
0 118
0 119
0 120
567,244 0 0 142,729,892 121
State of Idaho
FERC FORM NO.2 (ED. 12-96)Page 209
This Page Intentionally Left Blank
lIame of Respondent rhis Report Is:Date of Report IYear of Report
~ An Original (Mo,Da, Yr)
Avlsta Corporation o A Resubmisslon April 17, 2009 Dec. 31, 2008
GAS STORED (ACCOUNT 117.1,117.2 117.3 117.4 164.1 164.2 AND 164.3)
1 ø during the year adjustments were made to the stored gas Inventory 3 State in a footnote the basls of segregation of Inventory beeen
reported in columns (d), (f), (g), and (h) (such as to correct cumulative current and noncurrent protlons. 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 adjusments, 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 propert recordable In the plan accounts.
(Account (Account Noncurrent (Account Current l1(j l1(j
Une Description 117.1)1~;j2)(Account 117.3)117.4)(Account 164.1)(Account 164.2)(Account 164.3)T%ai
No.raj (b)(d)(e)'f)(g)(h)
1 Balance at 8eainnina of Year 3,53,721 3,53,721
2 as Delivered to storaoe 16,858,958 16,858,958
3 as Withdrawn from Storaae 11,934,494 11,934,494
4 (lther Debits and Credits 39,283)39,283
5 Balance at End of Year 8,415,902 8,415,902
6 Dth 1,093,250 1,093,25
7 Amount Per Dekatherm $7.6981 $7.6981
8 Storage Is reported using the inventory method.
State of Idaho
FERC FORM NO.2 (REV 04-04)Page 220
Name of Respondent This R~ort Is:
(1 ) 12 An Original
Date of Report
(Mo,Da, Yr)
State of Idaho
Year of Report
Avista Corporation (2) 0 A Resubmission April 18,2009 Dec. 31, 2008
GAS OPERATING REVENUES (Accunt 400)
1. Report below natural gas operating revenues for each
prescribed accunt, 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 billng purpses, one customer should be counted
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 Met (14.73 psia
at 60 degrees F). If bilings are on a therm basis, give the Btu con-
tents of the gas sold and the sales converted to Met.
5. If increases or decreases from previous year (col-
umns (c), (e) and (g), are not derived from previously
OPERATING REVENUES
Amount for
Previous Year
c
Line
No.
Title of Account
a
Amount for Year
b
53,195
92,102,358
92,102,358
51,399
84,985,312
84,985,312
14
15
16 12,673 12,145
17 455,756 1 794,474
18
19
20
21
22
23 18,397 14,676
24 486,826 821,295
25 92,589,184 85,8 6,607
26
27 92,589,184
28 89,752,274
29 2,296,889
0
53,195
92,102,358
FERC FORM NO.2 (ED. 12-86)Page 300
Name of Respondent This ~ort Is:
(1) Il An Original
Date of Report
(Mo,Dal Yr)
State of Idaho
Year of Report
Avista Corporation (2) 0 A Resubmission April 18,2009 Dec. 31, 2008
GAS OPERATING REVENUES (Account 400) (Continued)
reported figures, explain any inconsistencies in a foot-
note.
6. Commercial and Industrial Sales, Account 481, may be
classifed 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 Met per year or approximately 800 Met
per day of normal requirements. (See Account 481 ofthe
Uniform System of Accunts. Explain basis of classification
in a footnote.)
7. See page 108, Importnt Changes During Year,
for importnt new terrtory added and importnt rate increases
or decreases.
THERMS OF NATURAL GAS SOLD
Quantity for
Previous Year
e
AVG. NO. OF NAT. GAS CUSTRS. PER MO.
Number for Line
Number for Year Previous Year No.Quantity for Year
d
50,207
78,754,101 2
78,754,101
47,342
71,854,822
71,854,822
7
72,265
72,265
6
70,309
70,309
NOTES
(1) Includes $3,458,370 unbiled revenues.
(2) Includes 2,102,090 therms relating to unbiled revenues.
28
29
30
31
32
33
FERC FORM NO.2 (ED. 12-86)Page 301
Idaho
Nam of Respondent Th R~ort Is:Date of Rep Yea of Repo
(1) X An Orgi (Mo, Da, Yr)
A vista Corp.(2)D A Resbmission Apri 17, 20 Dec 31, 208
GAS OPERATION AN MAINANCE EXENSES
If th amount for Drevious vea is not derved from Dreviously reported figues, explai in footnote.
Amount for Amount for
Line Amount Cuent Yea Previous Yea
No.(aJ
1 1. PRODUCTION EXPENSES
2 A. Manufactd Gas Prodction --
3 Manufactued Gas Production (Submit SUDDlementa Staent)
4 B. Natu Gas Pruction
5 B I. Natur Gas Prction and Gathg
6 ODeration --
7 750 Opertion Superision and Eniteerig --
8 751 Production MaDS and Recrd --
9 752 Gas Wells EXDenses --
10 753 Field Lines EXDenses --
11 754 Field Compressor Station Expenes --
12 755 Field ComDressor Station Fuel and Power --
13 756 Field Measurig and Regulating Station EXDenses --
14 757 Pucation ExDenses --
15 758 Gas Wel Rovalties --
16 759 Other Expees --
17 760 Rents --
18 TOTAL ODeration (Eter Total of lies 7 th 171 --
19 Maitence .11~~IIIi~!~I~lmllmiilrl~l:i!mll¡liilll~rr~I~~~~.~l:~~!III:~lli~~i!i~~t¡rnl!l!lillli~~l¡rrrml:im
20 761 Maitenance Suoervsion and Enl!ineel!--
21 762 Matenance of Strct and ImDrovements --
22 763 Maitenace of Prducing Gas Well --
23 764 Maitenance of Field Lines --
24 765 Maintenace of Field ComDresor Station EaDmet --
25 766 Maitence of Field Meas. and Reg. Sta. Ecuipmet --
26 767 Maitenace of Pufication EcuiDment --
27 768 Maitenance of Drig and Cleag EcuiDment --
28 769 Maintenace of Other Ecuipment --
29 TOTAL Matenance (Eter Tota of lies 20 th 28)--
30 TOTAL Natu Gas Production and Gatherg (Tota of lies 18 and 29)--
31 B2. Products Extrction
32 Ooeraon
33 770 Ootion Supersion and Eniteerig --
34 771 Ootion Laor --
35 772 Gas Shrge --
36 773 Fuel --
37 774 Power --
38 775 Mateals --
39 776 ODeration SUDDlies and Expenes --
40 777 Gas Procesed bv Oters --
41 778 Rovalties on Product Extracted --
42 779 Marketil! EXDenes --
43 780 Products Puchaed for Resale --
44 781 Varation in Product Inventory --
45 (Ls) 782 Extrcted Products Used bv the Utilitv-Credt --
46 783 Rents --
47 TOTAL Ooetion (Eter Total of Lines 33 th 46)--
FERC FORM NO.2 (ED 12-88)Page 320
Idaho
Name of Respondent Ths Roo0rt Is:Date of Report Yea of Report
(1) X An Orgial (Mo, Da, Yr)
Avista Corp.(2)0 A Resubmision Apri 17, 209 Decmber 31, 2008
GAS OPERA nON AND MANANCE EXENSES
~Line Amount Cuent Year Previous Yea
No.(a)(b) cB2. Product Extrcton (Contiued)
48 Maitenace
49 784 Maintenace Supervision and En¡¡inee¡¡--
50 785 Manace of Strctes and Improvements --
51 786 Matenace of Extrction and Refinl! Eauipment --
52 787 Maitence of Pipe Lines --
53 788 Maice of Extracte Prducts Stora¡¡e EQuipment --
54 789 Matenace of Compressor Eauioment --
55 790 Manace of Gas Measung and ReI!. EQuipment --
56 791 Maitece of Other Eqpment --
57 TOTAL Matenace (Enter Tota of lines 49 th 56)--
58 TOTAL Prduct Extrction (Enter Tota of lies 47 and 57)--
59 C. Exploration and Development
60 Operation
61 795 Delay Rentas --
62 796 Nonproductive Well Driling --
63 797 Abandoned Leases --
64 798 Other Exploration --
65 TOTAL Exploration and Development (Enter Tota of lies 61 th 64)--
D. Oter Gas Supply Expenses
66 OPeration
67 800 Nat Gas Well Head Puchaes --
68 800.1 Nani Gas Well Head Puchaes, Intrcompany Trasfers --
69 801 Natur Gas Field Line Puchases --
70 802 Nat Gas Gasoline Plant Outlet Prchaes --
71 803 Nani Gas Tranmission Lie Puchses --
72 804 Natura Gas City Gate Puchses 134,315,561 87,313,213
73 804.1 Liquefed Nani Gas Puchases --
74 805 Othr Gas Puchaes --
75 (Lss) 805.1 Puchaed Gas Cost Adiustments .554 2,601,001
76
77 TOTAL Puchaed Gas (Enter Tota of lies 67 to 76)I 137,533,115 I 89,914,214 I
78 806 Exchal!e Gas I -I -I
79 Puchaed Gas Expenses
80 807.1 Well Expenes-Puchaed Gas --
81 807.2 Operaon of Puchased Gas Measun¡¡ Stations --
82 807.3 Maitenance of Puhaed Gas Measung Stations --
83 807.4 Puchaed Gas Caculations Exoenses --
84 807.5 Other Puchaed Gas Expenes --
85 TOTAL Puhaed Gas Expees (Enter Tota of lies 80 th 84)--
86 808.1 Gas Withdrwn frm Stora¡¡e-Debit 11,823,573 4,134,151
87 (Less) 808.2 Gas Delivered to Storal!e-Credt (16,003,035 (4,098,585
88 809.1 Withwals of Liquefied Nani Gas for Processing.Debit --
89 (Ls) 809.2 Deliveries of Natura Gas for Processing-Credt --
90 Gas Used in Utiity Ooertions-Crt
91 810 Gas Used for Compressor Station Fuel-Credt --
92 811 Gas Used for Products Extrcton-Credt (36,544 -
93 812 Gas used for Othr Utitv OPtions-Cret --
94 TOTAL Gas Used in Utiity Ooerons-Credt (Tota of lies 91 th 93)(336,544)-
95 813 Other Gas Supply Expees 381,910 383,007
%TOTAL Oth Gas Supplv Exp (Total of lies 77,78,85,86 th 89,94,95)133,399,020 90,332,787
97 TOTAL Prction Expenses (Eter Tota of lines 3,30,58,65, and 96)133,399,020 90,332,787
FERC FORM NO.2 (ED 12.88)Page 321
Idaho
Name of Respondent Date of Reprt
(Mo.Da, Yr)
Yea of ReprtTh R,.0rt Is:
(1) I! An Orgi
Avista Corp.(2) 0 A Resubmission Apr 17, 2009 Decmber 31, 2008
GAS OPERATION AND MATENANCE EXENSES
Line
No.
98
Amount for
Cuent Yea
b
Amount
(a)2. NA ru GAS STORAGE, TEALING AN
PROCESING EXENSES
A. Undeiround Storae:e Exoenses99
100 Operation
101 814 OPertion Superision and Ene:ineerie:
102 815 Maps and Records
103 816 Wells Exoenses
104 817 Lines Expense
105 818 Compressor Station Expees
106 819 Compresor Station Fuel and Power
107 820 Measurie: and Ree:atie: Station Expenses
108 821 Pucation Exoenses
109 822 Exploraion and Development
11 ° 823 Gas Losses
1 i 1 824 Othr Expeses
112 825 Storae:e Well Rovalties11 3 826 Rents J
114 TOTAL OPeration (Eter Tota of lies 101 tb 113)
US Maitenance
1 16 830 Maitence Supeision and Enlteee:
1 17 831 Maitenace of Strctues and Imorovements
118 832 Maitenace of Reservoir and Wels
11 9 833 Maitence of Lines
120 834 Maitence of Comoressor Station Eouipment
121 835 Maitence of Measurie: and Regulate: Staton Eouipment
122 836 Maitenace of Pufication Equipment
123 837 Maitence of Other Eouipment
124 TOTAL Maitenance (Eter Tota of lies 116 tb 123)
125 TOTAL Underiound Storae:e Expees (Tota of lies 114 and 124)126 B. Oter St01'e Exoenses
127 Ooeration
128 840 Opration Supeision and Enlteee:
129 841 OPertion Labor and Exoenses
130 842 Rents
131 842.1 Fuel
132 842.2 Power
133 842.3 Gas Losses
134 TOTAL Ootion ænter Total of lies 128 tb 133)
135 Maitence
136 843.1 Maitence Superision and Ene:ineerine:
137 843.2 Maitence of Strctues and Improvements
138 843.3 Maitence of Gas Holders
139 843.4 Maitenance of Pucation Equipment
140 843.5 Maitenance of Liiiuefacton Eouipment
141 843.6 Maitence of Vaporizie: Equipment
142 843.7 Maitence of Comoressor Eouioment
143 843.8 Maitenance of Meaure: and Ree:ulate: Eouipment
144 843.9 Maitence of Oter Equipment
145 TOTAL Matenance ænterTota of lies 136tb 144)
146 TOTAL Oth Storae:e Expenes (Ete Tota of lies 134 and 145)
PERC FORM NO.2 (ED 12-88)Page 322
Amount for
Previous Yea
(c
6,065 7,002
--
--
--
--
--
--
--
--
--
93,643 84,617
--
--..91,619
--
--
--
--
--
--
--
79,072 82,923
79,072 82,923
178,780 174,542
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
Idaho
Nam of Respondent Th R~ort Is:Date of Report Yea of Repor
(1) X An Ongin (Mo, Da, Yr)
Avista Corp.(2)0 A Resubmission Aprl 17 , 209 Decmber 31, 2008
GAS OPERATION AND MATENANCE EXPENSES
~Line Amount Cuent Year Previous Yea
No.(a)b c
147 C. Liquefied Natur Gas Terii and Prcessin Expenses
148 Operation
149 844.1 OPeron Superision and Eniiineerii --
150 84.2 LNG Procsinii Tem Labor and Expenses --
151 844.3 Liouefaction Processinl! Labor and Exnees --
152 844.4 Liquefacton Trasporttion Laor and Expenes --
153 844.5 Meaurg and Regulatg Labor and Expeses .-
154 844.6 Compressor Staon Labor and Exnenses --
155 844.7 Communcation Svstem Expenes --
156 84.8 System Control and Load Dispatchiii --
157 845.1 Fuel --
158 845.2 Power --
159 845.3 Rents --
160 845.4 Demuriie Chariies --
161 (Ls) 845.5 Wbaæ Receipts-Credt --
162 845.6 Processinii Liquefied or Vaponzed Gas by Oth --
163 846.1 Gas Losses --
164 846.2 Oter Expenses --
165 TOTAL OPration (Eter Tota oflines 149 th 164)--
166 Maitenance
167 847.1 Maitenance Supervision and Eniteeii --
168 847.2 Maitence of Strctus and Imnrovements --
169 847.3 Maitece of LNG Procesinii Termal EQuipment --
170 847.4 Matence of LNG Trasporttion EQuipment --
17 847.5 Maitenance of Meaurl! and Reilatiii EQuinmet --
172 847.6 Miantence of Compressor Station EQuipment --
173 847.7 Maitece of Communcation EQuipment --
174 847.8 Maienance of Oter EQuinmet --
175 TOTAL Maitence (Eter Tota oflines 167 th 174)--
176 TOTAL Liquefied Nat Gas Ternalii and Processinl' Exn (Les 165 & 175)--
177 TOTAL Natura Gas storal!e (Eter Total of lies 125, 146, and 176)178,780 174,542
178 3. TRSMISSION EXPENSES
179 Opration
180 850 OPertion Sunervision and Eniiineennii --
181 851 System Control and Load Dispatchiii --
182 852 Communcation System Exnenses --
183 853 Comnrsor Station Labr and Expenses --
184 854 Gas for Compresor Station Fuel --
185 855 Other Fuel and Power for Compressor Statons --
186 856 Mai Exnees --
187 857 Meaurii and Rel!latiii Station Expenses --
188 858 Trasmission and Comnression of Gas bv Oter --
189 859 Othr Expenses --
190 860 Rents --
191 TOTAL Opertion ffnter Total oflines 180 th 190)--
FERC FORM NO.2 (ED 12.88)Page 323
Idaho
Name of Respondet Th Roo0rt Is:Date of Rep Yea of Report
(l) X An Orgi (Mo, Da, Yr)
Avita Corp.(2)0 A Reubmiion Apn17,2O Decer 31.208
GAS OPER nON AN MANANCE EXENSES
~Line Amount Cunt Yea Previous Yea
No.(a)b) c)
3. TRSMISSION EXPENSES (Contiued) .
192 Maitence
193 861 Maitenance Supervision and Eniiineeii --
194 862 Matenace of Strctes and lmnrovements --
195 863 Matenace of Mais --
196 864 Maitenace of Compresor Station Equipment --
197 865 Maienace of Meauril! and ReI!. Station Eauinment --
198 866 Matenance of Coinuncaton Equinment --
199 867 Maitence of Oter Equipment --
20 TOTAL Maitenance (Eter Tota of lines 193 th 199)--
201 TOTAL Tranmission Exnenses (Ente Tota of lies 191 and 200)--
202 4. DISTRUTION EXENSES
203 Oneration
204 870 Opertion Supeision and Eniiineeriii 228,281 160,782
205 871 Distrbution Load Dispatchig --
206 872 Comnressor Station Laor an Exnenses --
207 873 Compressor Station Fuel and Power --
208 874 Mais and Services Expenses 572,145 680,485
209 875 Measurii and Reimlatil! Station Exnenses-Gener 91,449 49,04
210 876 Measurl! and Reimlatil! Station Exnenses-Industral 1,497 2,414
211 877 Meaurii and Reiiatiii Station Expenes-Citv Gate Check Staon 65,412 39,483
212 878 Meter and House Reimlator Exnenes 625,492 335,654
213 879 Cutomer Intalations Exnenes 538,010 417,412
214 880 Oth Exnenses 554,353 506,972
215'881 Rents 7,911 5,346
216 TOTAL Oneration (Enter Total of lies 204 th 215)2,684,549 ..217 Maitence
218 885 Matenace Suneision and Enl!ineel!11,989
219 886 Matece of Strcts and Improvements --
220 887 Maitenace of Mai 187,300 542,333
221 888 Maitenace of Comnrsor Station iunmet --
222 889 Maitenace of Mea. and Reii. Sta.uip.-General 68,814 93,336
223 890 Maitence of Mea. and ReI!. Sta.uin.-Industr 117,759 60,547
224 891 Maitenace of Mea. and ReI!. Sta.uin.-Citv Gate Chk Station 13,090 43,210
225 892 Matenance of Serices 260,467 243,106
226 893 Matenace of Meters and House Reimlators 276,775 162,679
227 894 Matenace of Other Eauinment 8,861 19,067
228 TOTAL Maitenance (Eter Tota of lies 218 th 227)945,055 1,192,677
229 TOTAL Distrbution Exnenes (Ente Tota of lies 216 and 228)3,629,604 3,390,270
230 5. CUSTOME ACCOUNS EXPENSES
231 Operation
232 901 Superision 100,364 108,514
233 902 Meter Readiii Expenses 144,938 168,212
234 903 Costomer Recrds and Collection Exnenses 1,295,628 1,298,40
235 904 Uncollectible Accounts 394,139 332,562
236 905 Miscellaneous Customer Accounts Exnenes 30,151 38,650
237 TOTAL Cutomer Accounts Exnees (Enter Tota of lies 232 th 236\1,965,220 1,946,338
FERC FORM NO.2 (ED 12-88)Page 324
Idaho
Nam of Respondent 1bs RiE0rt Is:Date of Report Yea of Report
(1) X An Orgin (Mo, Da, Yr)
Avista Corp.(2)D A Resubmission Apnl17,2oo9 December 31, 2008
GAS OPERTION AND MAINTENANCE EXENSES
If the amount for previous yea is not derived frm previously reported fiires, exnla in footnotes.~Line Amount Cuent Year Previous Yea
No.(a)b) (e)
238 6. CUSTOMER SERVICE AN INFORMTIONAL EXPENSES
239 Operation
240 907 Sunerision --
241 908 Customer Assistace Exnenses 1,770,146 1,633,286
242 909 Inormtional and Intrctional Expenses 9,671 927
243 910 Miscellaneous Customer Service and Inormtiona Exnenses 30,426 23,816
24 TOTAL Customer Serice and Inormtion Exnenses (l ines 240 tb 243)1,810,243 1,658,030
245 7. SALS EXPENSES
246 Operation
247 911 Sunerision --
248 912 Demonstratie: and Selle: Expenes 137,142 156,639
249 913 Advertine: Expenses 24,186 51,290
250 916 Miscellaneous Sales Expenses 13 5
251 TOTAL Sales Exoees (Enter Tota of lies 247 tb 250)161,340 207,934
252 8. ADMISTRTIVE AN GENERA EXPENSES
253 Operation
254 920 Admstrative and Genera Salares 1,706,522 1,556,771
255 921 Office Sunplies and Exnenses 331,787 283,821
256 (Lss) (922) Admstrve Expenes Trafered-Cr.(8,395)(5,817)
257 923 Outside Services Employed 973,034 933,491
258 924 Property Insurance 77,466 75,649
259 925 1niures and Dame:es 406,250 168,023
260 926 Employee Pensions and Benefits 57,688 43,139
261 927 Frachse ReQuirements --
262 928 Regularory Commsion Exnenses 398,134 314,531
263 (Lss) (929) Duplicate Charges-Cr.--
264 930. 1 General Advertisinii Expenses --
265 930.2 Miscellaneous General Expenses 308,157 247,280
266 931 Rents 48,005 56,678
267 TOTAL Operation (Enter Tota of lines 254 tb 266)A ",no ""0 1.
268 Maitence
269 935 Maitenace of Genera Plant I 591,077 I
270 TOTAL Admnistratve and Gener Exp (Tota of lines 267 and 269)I 4,889,725 I 4,197,223 I
271 TOTAL Gas O. andM. Exp (Lines 97,177,201,229,237,24,251,and 270)I 146,033,932 I 101,907,1241
NUMBER OF GAS DEPARTM EMPLOYE
1. The data on number of employees should be reported constrction employee in a foonote.
for the payroll period endig neast to October 31, or 3. The number of employee assignble to the gas
any payroll perod endig 60 days before or afer Octo-deparent from joint fuction of combintion utilities
ber 31.may be detered by estiate, on the basis of employee
2. If the respondent's payrll for the reportg period eqnivalents. Show the estiated num of equivalent
includes any special constrcton peronnel, include such employees attbuted to the gas deparent from joint
emp10vees on lie 3, and show the numbe of such soeial fuctions.
1. Payroll Period Ende (Date)Decmber 31,2007
2.Tota Regular Full-Time Employee I 281 26
3.Total Par-Time and Tempora Emplovees alocation of Genera Emplovees I jT 5
4.Total Employees I 291 31
FERC FORM NO.2 (ED U-88)Page 325
Name of Respondent This Rel8rt Is:Date of Report Year of Report
(1) X An Original (Mo, Da, Yr)
Avista Corp.(2)0 A Resubmission April 17, 2009 Dec. 31, 2008
DISTRIBUTION MAINS
Show Particulars Called for Concerninci Distribution Mains
Total Length in I Taken up or Total Length
ine Kind of Material Diameter of Use Beginning of Laid During Abandoned Durin in Use End
No.Pipe, Inches Year, Feet Year, Feet Year, Feet of Year, Feet
(a)(b)(e)(d)fe). (f
1 Steel Wrapped Less than 2"1,911,360 137,280 1,774,080
2 Steel Wrapped 2" to 4"654,720 5,280 649,440
3 Steel Wrapped 4" to 8"364,320 21,120 385,440
4 Steel Wrapped 8" to 12"5,280 5,280
5 Steel Wrapped Over 12"0
6
7
8 Plastic Less than 2"5,132,160 221,760 5,353,920
9 Plastic 2"t04"1,341,120 121,440 1,462,560
10 Plastic 4" to 8"337,920 200,640 538,560
11 Plastic 8" to 12"0 0
12 Plastic Over 12"0 0
13
14
15
16
17
18
19
20
21
22
23 TOTALS 9,746,880 564,960 142,560 10,169,280
State of Idaho
FERC FORM NO.2 Page 514-A
Name of Respondent This Report Is:Date of Report Year of Report
(1)l2 An Original (Moi Dai Yr)
Avista Corp.(2) D A Resubmission 4/17/2009 12/31/2008
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 Yea During Year of Year in Feet
ra)(b)(c)(d)(e)(f)(g)
1 Steel Wrapped l' or Less 12,350 40 12,390 Not
2 Steel Wrapped 1" thru 2"174 2 176 Available
3 Steel Wrapped 2" thru 4"4 4
4 Steel Wrapped 4" thru 8"0 0
5 Steel Wrapped Over 8" 0 0
6
7
8 Plastic l' or Less 56,041 4,286 60,327
9 Plastic 1" thru 2"194 35 229
10 Plastic 2" thru 4"5 2 7
11 Plastic 4" thru 8"0 0
12 Plastic Over 8" 0 0
13
14 Other Unknown 0 580
15
16
17 TOTALS 68,768 4,365 0 73,713
State of Idaho
FERC FORM NO.2 Page 514-8
Name of Respondent This RlËrt Is:Date of Report Yea of Report
(1) X An Orginal (Mo, Da, Yr)
Avista Corp.(2)D A Resubmission Apri 17, 200 Dec. 31,2008
CUSTOMER'S METERS
Owned
Line Size Type Make Capacity Beginning Added Retied Owned
No.of Year Durng Year Durng Year End of Year
(a)(b)(c)(d)(e)(f (~)(h)
1 Detaled information not available.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16 TOTAL 72,066 1,710 73,776
State of Idaho
FERC FORM NO.2 Page 514-C
Name of Respondent This Report Is:Date of Report Year of Report
~ An Original (Mo, Da, Yr)
Avista Corporation D A Resubmission April 17, 2009 Dec. 31, 2008
GAS ACCOUNT - NATURAL GAS
1 The purpse of this schedule is to accunt for the quantity or intrstate facilitis and which the reportng pipeline received
of natural gas reived and delivered by the respondent.through gathering facilities or intrstate facilties, but not through any
2 Natural gas means either natural gas unmixed or any of the interstate portion of the reportng pipeline, and (3) the gathering
mixture of natural and manufactured gas.line quantities that were not destined for interstate market or that were
3 Enter in column ( c ) the Dth as reported in the not transpod through any interstate porton of the reportng
scedules indicated for the items of reeipts and pipeline.
deliveries.7 Also indicate in a footnote (1 ) the system supply quantities of gas
4 Indicated in a footnote the quanties of bundled sales that are store by the reporting pipeline, during the reporting year and
and trnsporttion gas and specify the line on which also reported as sales, transporttion, and compression volumes by
such quantities are listed.the reportng pipeline during the same reportng year, (2) the system
5 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 reportng year which the reportng pipeline intends to sell or
purpose. Use copies of pages 520.trnsport in a future reporting year, and (3) contrct storage
6 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 locl distribution included in both the company's total sales figure and the company's
volumes another jurisdictional pipeline delivered to the total transporttion figure. Add additional rows as necessary to
locl distrbution company porton of the reporting report all data, numbered 14.01, 14.02, etc.
pipeline (2) the quantities the reporting pipeline
transported or sold through it locl distribution facilities
01 NAME OF SYSTEM
Line
No.Item Amount of Dth (1 )
(a)(c)
2 GAS RECEIVED
3 Gas Purchases (Accounts 800-805)16,488,276
4 Gas of Others Received for Gatherino (Account 489.1)
5 Gas of Others Received for Transmission (489.2)
6 Gas of Others Received for Distribution (Accunt 489.3)4,593,277
7 Gas of Others Received for Contract Storaoe (Account 489.4)
8 ExchanQed Gas Received from Others (Account 806)
9 Gas Received as Imbalances (Account 806)
10 Receipts pf Respondent's Gas Transported bv Others (Account 858)
11 Other Gas Withdrawn from StoraQe (Explain)
12 Gas Received from Shippers as compressor Station Fuel
13 Gas Received from Shippers as Lost and Unaccounted for
14 Other Receipts (Specify:
15 Total Receipts (Total lines 3 thru 14.?)21,081,553
16 GAsni;1 LJ
17 Gas Sales (Accounts 480 - 484)7,875,410
18 Deliveries of Gas Gathered for Others (Account 489.1)
19 Deliveries of Gas Transported for Others (Account 489.2)
20 Deliveries of Gas Distributed for Others (Account 489.3)4,593,277
21 Deliveries of Contract Storaoe Gas (Account 489.4)
22 ExchanQe Gas Delivered to Others (Account 806)
23 Gas Delivered as Imbalances (Account 806)
24 Deliveries of Gas to Others for Transporttion (Account 858)
25 Other Gas Delivered to StoraQe (Explain)
26 Gas Used for Compressor Station Fuel 610,521
27 Other Deliveries (Specify: Sales for Resale 8,002,345
28 Total Deliveries (Total lines 17 thru 27.?)21,081,553
29 GAS.li IN I t:u FOR
30 Production Svstem Losses
31 Gatherino SYStem Losses
32 Transmission Svstem Losses
33 Distribution System Losses
34 Storaoe Svstem Losses
35 Other Losses (SpeciÑ)
36 Total Unaccounted For lTotallines 30 thru 35)0
37 Total Deliveries & Unaccounted For (Total lines 28 thru 36)21,081,553
State of Idaho
FERC FORM NO.2 (REV 04-04)Page 520
This Page Intentionally Left Blank
F:::ci~
2009 Ma \1'7 ¡¡l,1 l i: 12.n.. l ;._ HI I
NOT DIRECTLY ASSIGNED
TO STATES
0 irec :IY ssigne 0 aes
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Da, Yr)
Avista Corp.(J A Resubmission Feb. 16, 2009 Dec. 31, 2008
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).
Balance at
Line Account Beginning of Year Additions
No.(a)(b c)
1 INTANGIBLE PLANT
2 301 Organization 0
3 302 Franchises and Consents 0
4 303 Miscellaneous Intanoible Plant 723,251 0
5 TOTAL Intangible Plant (Enter Total of lines 2 thru 4)723,251 0
6 PRODUCTION PLANT
7 Manufactured Gas Production Plant
8 304 Land and Land Rights 0
9 305 Structures and Improvements 0
10 306 Boiler Plant EQuipment 0
11 307 Other Power EQuipment 0
12 308 Coke Ovens 0
13 309 Producer gas equipment 0
14 310 Water Gas Generating EQuipment 0
15 311 Liquefied Petroleum Gas EQuipment 0
16 312 Oil Gas Generating EQuipment 0
17 313 Generatino Equipment-Other Procsses 0
18 314 Coal, Coke, and ash handling equipment 0
19 315 Catalytic Cracking Equipment 0
20 316 Other reforming equipment 0
21 317 Purification equipment 0
22 318 Residual refining equipment 0
23 319 Gas mixing equipment 0
24 320 Other Equipment 0
25
26 TOTAL Manuafactured Gas Production Plant (Enter Total of lines 8 thru 24)0 0
27 PRODUCTS EXTRACTION PLANT
28 340 Land and Land Riohts 0
29 341 Structures and Improvements 0
30 342 Extraction and Refining Equipment 0
31 343 Pipe Lines 0
32 344 Extracted Products Storage Equipment 0
33 345 Compressor Equipment 0
N t D' tl A' d t St t
FERC FORM NO.2 (ED. 12-96)Page 204
Name of Respondent This report is:
( Xl An Original
Date of Report
(Mo, Da, Yr)
Not Directl Assi ned to States
Year Ending
Avista Corp.1 A Resubmission Feb. 16, 2009 Dec. 31, 2008
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 wil 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 suplementary
plant actually in service at end of year. statement showing subaccount classification of such plant
6. Show in column (f) reclassifications or transfers within utilty 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 propert 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 fied with the Commission as required by the Uniform
the amounts with respect to accumulated provision for System of Accounts, give date of such filng.
depreciation, acquisition adjustments, etc.,
Balance at End of Year Line( No.
1
2
3
4
5
6
7
o 8
o 9
o 10
o 11
o 12
o 13
o 14
o 15
o 16
o 17
o 18
o 19
o 20
o 21
o 22
o 23
o 24
o o o o 26
27
o 28
o 29
o 30
o 31
o 32
o 33
FERC FORM NO.2 (ED. 12-96)Page 205
Not Directlv Assigned to tates
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Da, Yr)
Avista Corp.(J A Resubmission Feb. 16, 2009 Dec. 31, 2008
GAS PLANT IN SERVICE (ACCOUNTS 101, 102, 103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.la)lb)(c)
34 346 Gas Measurina and Reaulatina Eauioment 0
35 347 Other EQuipment 0
36 TOTAL Products Extraction Plant (Enter Total of lines 28 thru 35)0 0
37 TOTAL Natural Gas Production PlantlEnter Total of lines 26 and 36)0 0
38 Manufactured Gas Production Plant (Submit Supplementary Statement)
39 TOTAL Production Plant (Enter Total of lines 37 and 38)0 0
40 NATURAL GAS STORAGE AND PROCESSING PLANT
41 Underground Storage Plant
42 350.1 Land 0
43 350.2 Riiihts-of-Wav 0
44 351 Structures and Improvements 0
45 352 Wells 0
46 352.1 Storaae Leaseholds and Riahts 0
47 352.2 Reservoirs 0
48 352.3 Non-recoverable Natural Gas 0
49 353 Lines 0
50 354 Compressor Station Equioment 0
51 355 Measurinii and Reiiulatinii Equipment 0
52 356 Purification Equioment 0
53 357 Other Equioment 0
54 TOTAL Underground Storace Plant (Enter Total of lines 42 thru 53)0 0
55 Other Storaoe Plant
56 360 Land and Land Riohts 0
57 361 Structures and Improvements 0
58 362 Gas Holders 0
59 363 Purification Equipment 0
60 363.1 Liauefaction Eauioment 0
61 363.2 Vaporizina Eauipment 0
62 363.3 Comoressor Eauioment 0
63 363.4 Measuring and Reaulatina Eauipment 0
64 363.5 Other Equipment 0
65 TOTAL Other StoraQe Plant (Enter Total of lines 56 thru 64)0 0
66 Base Load Liquefied Natural Gas Terminaling and Processing Plant
67 364.1 Land and Land Riahts 0
68 364.2 Structures and Imorovements 0
69 364.3 LNG Processing Terminal Eauipment 0
70 364.4 LNG Transporation Eauioment 0
71 364.5 Measurino and Reaulatinc Equioment 0
72 364.6 Compressor Station Equipment 0
73 364.7 Communications Equipment 0
74 364.8 Other Equipment 0
75 TOTAL Base Load Liq Nat'l Gas, Terminal and Processing Plant (lines 67-74)0 0
76 TOTAL Nat'l Gas Storaae and Processina Plant (Total of lines 54,65 and 75)0 0
77 TRANSMISSION PLANT
78 365.1 Land and Land RiQhts 0
79 365.2 Riiihts-of-Wav 0
80 366 Structures and Improvements 0
s
FERC FORM NO.2 (ED. 12-96)Page 206
Name of Respondent This report is:
( Xl An Original
Date of Report
(Mo, Da, Yr)
Not Directl Assi ned to States
Year Ending
Avista Corp. ( J A Resubmission Feb. 16. 2009 Dec. 31 , 2008
Retirements Adjustments Transfers Balance at End of Year Line
(d e f)(No.
0 34
0 35
0 0 0 0 36
0 0 0 0 37
0 38
0 0 0 0 39
40
41
0 42
0 43
0 44
0 45
0 46
0 47
0 48
0 49
0 50
0 51
0 52
0 53
0 0 0 0 54
55
0 56
0 57
0 58
0 59
0 60
0 61
0 62
0 63
0 64
0 0 0 0 65
66
0 67
0 68
0 69
0 70
0 71
0 72
0 73
0 74
0 0 0 0 75
0 0 0 0 76
77
0 78
0 79
0 80
FERC FORM NO.2 (ED. 12-96) Page 207
Not Directlv Assigned to States
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Da, Yr)
Avista Corp.(J A Resubmission Feb. 16, 2009 Dec. 31, 2008
GAS PLANT IN SERVICE (ACCOUNTS 101,102,103, AND 106) (Continued)
Balance at
Line Account Beginning of Year Additions
No.la)(b)(c)
81 367 Mains 0
82 368 Compressor Station EQuipment 0
83 369 Measurino and Reoulating EQuipment 0
84 370 Communications EQuipment 0
85 371 Other EQuioment 0
86 TOTAL Transmission Plant (Enter Totals of lines 78 thru 85)0 0
87 DISTRIBUTION PLANT
88 374 Land and Land Rights 0
89 375 Structures and Improvements 0
90 376 Mains 0
91 377 Compressor Station Equipment 0
92 378 Measurinii and Reoulatinii EQuipment-General 0
93 379 Measuring and Regulatina Eauioment-City Gate 0
94 380 Services 0
95 381 Meters 0
96 382 Meter Installations 0
97 383 House Reiiulators 0
98 384 House Regulator Installations 0
99 385 Industrial Measuring and Regulating Station Equipment 0
100 386 Other Propert on Customers' Premises 0
101 386 Other Equipment 0
102 TOTAL Distribution Plant (Enter Totals of lines 88 thru 101)0 0
103 GENERAL PLANT
104 389 Land and Land Riohts 0
105 390 Structures and Imorovements 133,370 0
106 391 Offce Furniture and Eauioment 378,871
107 392 Transportation Equipment 331,529 83,036
108 393 Stores Equipment 0
109 394 Tools, Shop, and Garage EQuipment 840,375 414,623
110 395 Laboratorv Equipment 331,601
111 396 Power Operated Equipment 368,144
112 397 Communication Equipment 949,816 0
113 398 Miscellaneous Equipment 31,332
114 Subtotal (Enter Totals of lines 104 thru 113)3,365,038 497,659 .1
115 399 Other Tanaible Prooert 0
116 TOTAL General Plant (Enter Totals of lines 114 and 115)3,365,038 497,659
117 TOTAL (Accounts 101 and 106)4,088,289 497,659
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)4,088,289 I 497,6591
FERC FORM NO.2 (ED. 12-96)Page 208
Not Directly Assigned to States
Name of Respondent This report is:Date of Report Year Ending
( Xl An Original (Mo, Da, Yr)
Avista Corp.(J A Resubmission Feb. 16, 2009 Dec. 31, 2008
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.
0 81
0 82
0 83
0 84
0 85
0 0 0 0 86
87
0 88
0 89
0 90
0 91
0 92
0 93
0 94
0 95
0 96
0 97
0 98
0 99
0 100
0 101
0 0 0 0 102
103
0 104
133,370 105
378,871 106
23,910 390,655 107
0 108
4,551 1,250,447 109
141,774 189,827 110
368,144 111
29,145 920,671 112
31,332 0 113
230,712 0 0 3,631,985 114
0 115
230,712 0 0 3,631,985 116
356,283 0 0 4,229,665 117
0 118
0 119
0 120
356,283 0 0 4,229,665 121
FERC FORM NO.2 (ED. 12-96)Page 209
~
This Page Intentionally Left Blank
.~