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0001193125-08-191802.txt : 200809080001193125-08-191802.hdr.sgml : 2008090820080908112504ACCESSION NUMBER:0001193125-08-191802CONFORMED SUBMISSION TYPE:8-KPUBLIC DOCUMENT COUNT:26CONFORMED PERIOD OF REPORT:20080908ITEM INFORMATION:Regulation FD DisclosureITEM INFORMATION:Financial Statements and ExhibitsFILED AS OF DATE:20080908DATE AS OF CHANGE:20080908

FILER:

COMPANY DATA:COMPANY CONFORMED NAME:AVISTA CORPCENTRAL INDEX KEY:0000104918STANDARD INDUSTRIAL CLASSIFICATION:ELECTRIC & OTHER SERVICES COMBINED [4931]IRS NUMBER:910462470STATE OF INCORPORATION:WAFISCAL YEAR END:1231

FILING VALUES:FORM TYPE:8-KSEC ACT:1934 ActSEC FILE NUMBER:001-03701FILM NUMBER:081060137

BUSINESS ADDRESS:STREET 1:1411 E MISSION AVECITY:SPOKANESTATE:WAZIP:99202BUSINESS PHONE:5094890500

MAIL ADDRESS:STREET 1:1411 EAST MISSIONCITY:SPOKANESTATE:WAZIP:99202

FORMER COMPANY:FORMER CONFORMED NAME:WASHINGTON WATER POWER CODATE OF NAME CHANGE:19920703

8-K1d8k.htmFORM 8-K

Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):September8, 2008

AVISTA CORPORATION

(Exact name ofregistrant as specified in its charter)

Washington1-370191-0462470

(State or other jurisdiction

of incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

1411 East Mission Avenue, Spokane, Washington99202-2600

(Address of principal executive offices)(Zip Code)

Registrants telephone number, including area code: 509-489-0500

Web site: http://www.avistacorp.com

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section7 Regulation FD Disclosure

Item7.01 Regulation FD Disclosure.

The information in this report shall not be deemed filedfor purposes of Section18 of the Securities Exchange Act of 1934, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

On September8, 2008, management of Avista Corporation (Avista Corp.) will be participating in meetings with investors and analysts and will providea business update presentation at the Sidoti& Company, LLC Seventh Annual West Coast Institutional Investor Forum in San Francisco, California. A copy of the business update presentation is furnished as Exhibit 99.1.

As part of this update, Avista Corp. will be confirming earnings guidance for 2008. This 2008 earnings guidance was included in Avista Corp.s second quarter of2008 earnings release furnished on Form 8-K on July30, 2008.

Any reference to Avista Corp.s Internet address shall not, under anycircumstances, be deemed to incorporate the information available at such Internet address into this Current Report. The information available at Avista Corp.s Internet address is not part of this Current Report or any other report furnishedor filed by Avista Corp. with the Securities and Exchange Commission.

Section9 Financial Statements and Exhibits

Item9.01 Financial Statements and Exhibits.

(d)Exhibits

99.1Business update presentation dated September 2008, which is being furnished pursuant to Item7.01.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AVISTA CORPORATION

(Registrant)

Date: September 8, 2008

/s/ Marian M. Durkin

Marian M. Durkin

Senior Vice President, General Counsel

and Chief Compliance Officer

EX-99.12dex991.htmBUSINESS UPDATE PRESENTATION

Business update presentation

Business Update Sidoti & Company, LLC West Coast Institutional Investor Forum September 2008 Malyn Malquist Executive Vice President and CFO NYSE: AVA www.avistacorp.com Exhibit 99.1

2 Core business is the regulated utility Incorporated in the state of Washington in 1889 Headquartered in Spokane, Wash. Over 2,000 employees Investment-grade financial profile Market capitalization $1.1 billion Rapidly growing non-regulated subsidiary Advantage IQ Company Overview sound leadership | reliable energy Mission Statement: Avistas purpose is to improve lifes quality by providing energyand energy-related services. We do this by safely andreliably delivering these services at a competitive price and by helping our customers get the most value from their energy dollar, while providing our investors a fairreturn.

3 Generates, transmits and distributes electricity and distributes natural gas Electric customers: 352,000 Natural gas customers: 311,000 Distribution system totaling 17,800 miles Over 2,100 miles of transmission Natural gas distribution mains of 6,900 miles 15.6 billion cubic feet gas storage capacity at Jackson Prairie Total maximum generating capacity: 1,771 MW Utility Overview Utility Service Territory

4 Responsible Resources One of the smallest carbon footprints in the United States Resource Mix* Biomass 3% Wind/Other Contracts 8% Natural Gas 24% Coal 10% Hydro 55% *Based on Maximum Capacity

5 Responsible Resources Well positioned with long resources through 2017 * Includes the addition of Lancaster 270 MW CCCT PPA Annual Average Energy Resources vs Load 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Hydro Base Thermal Contracts Peakers Load

Renewable Portfolio Standard Requires a percentage of qualified renewables (wind, solar, geothermal, biomass, landfill and sewage gas, wave, ocean, tidal and hydro upgrades) Requirements are 3% in 2012, 9% in 2016 and 15% in 2020 Only affects Washington loads Only Washington sets geographic limits, has an energy efficiency standard and recognizes less existing hydro and other renewable resources 124 74 69 23 21 0 Required Renewables (aMW) 15% 9% 9% 3% 3% 0% I-937 Requirement 2020 2019 2016 2015 2012 2010 6

7 New Generation by 2017 350 MW of natural gas-fired plants 300 MW of wind 87 MW of conservation 38 MW of hydro plant upgrades 35 MW of other renewables Timing of Preferred Resource Strategy in MW 35 5 10 20 Other Renewables 38 9.5 9.5 9.5 9.5 Hydro Upgrades 87 11 10 10 10 10 9 7 7 7 6 Conservation 300 200 100 Wind 350 80 270 CCCT Total 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Preferred Resource Strategy

Investment in Wind Planning to develop 50 MW wind facility in Reardan, Wash. Estimated cost $125 Million Expected be completed in 2011 Received regulatory approval in Idaho to include the cost of land, turbine down payments and other preliminary costs in CWIP. We are waiting for regulatory approval in Washington Wind Projects could be delayed by I-937 updates 8

9 Utility Capital Expenditures Were focused on our core utility business and plan on investing over $200 million into the utility in 2008 and in subsequent years 2009-2010 Forecasted Capital Expenditures* $0 $25 $50 $75 $100 $125 $150 $175 $200 $225 2009 2010 Environmental Gas Generation Growth IS/IT Other Electric T&D * Excludes any capital expenditures for wind Projected Rate Base* ($ millions) $1,636 $1,705 $1,817 $1,923 $2,023 2006 2007 2008 2009 2010

10 Authorized 50.00% 10.00% 8.20% Oregon Natural Gas 47.94% 46.00% Common Equity Level Return on Equity Rate of Return Jurisdiction and Service 10.20% 8.45% Idaho Electric and Natural Gas (All party settlement agreement August 8, 2008) 10.20% 8.20% Washington Electric and Natural Gas (implemented in January 2008) $89 million $73 million $502 million $151 million $890 million Gas Gas Electric Gas Electric Oregon Idaho Washington Rate Base by Jurisdiction December 31, 2007 Regulatory Update

11 Washington Electric and Gas General Rate Case Primary Electric Revenue Requirement Factors Hydro Relicensing & Compliance Issues 30% Distribution & Other Expense 13% Increased Net Plant Investment (1) 36% Production & Transmission Expense 21% Increased Loads Mid Columbia Purchase Expenses Colstrip & Kettle Falls Thermal Fuel Expenses Distribution Operation & Maintenance Costs Administrative & General Expenses (1) Includes return on investment, depreciation and taxes, offset by the tax benefit of interest Spokane River Relicensing Montana Riverbed lease Settlement 46.3% 46.3% Common Equity Ratio 10.8% 10.8% Return on Equity 8.4% 8.4% Rate of Return 3.3% 10.3% % Increase $6.6 M $36.6 M Amount Natural Gas Electric Filed March 4, 2008 Regulatory Update

12 Idaho Electric and Gas General Rate Case $3.9M $23.2M 47.94% 10.20% 8.45% All-party Settlement Agreement $4.7M $32.3M 47.94% 10.80% 8.74% Original Rate Request April 3, 2008 N/A N/A 42.59% 10.40% 9.25% Current Capital Structure Revenue Requirement Electric Gas Equity Ratio ROE ROR All-party settlement agreement reached on August 8, 2008 Settlement provided deferred accounting for future recovery (including carrying charges) for costs related to relicensing the hydroelectric facilities on the Spokane River Subject to final approval by the Idaho Public Utilities Commission New rates effective October 1, 2008 Regulatory Update

13 Advantage IQ

14 Advantage IQ Overview Founded in 1995 by five employees from Avista Located in Spokane, Wash. and has 600+ employees Provides invoice processing, auditing, payment services and comprehensive reporting to multi-site companies throughout North America Management services include electricity, natural gas, water/sewer, waste and telecom expenses June 30, 2008 acquired Cadence Network EPA recognized Advantage IQ with 2007 Sustained Excellence Award in recognition of its continued leadership in protecting our environment through energy efficiency.

15 Advantage IQ Services Processes and pays Receives, enters and scans invoices, allocates costs and issues vendor payments Auditing and Reporting Validates invoices, identifies and resolves errors, optimizes services Strategic Services Post-payment analysis, leverages data and develops executive strategies We save clients money by: Catching billing errors such as duplicate invoices and overcharges Drastically reducing costly late payment charges Optimizing cash flow Spotting improper meter reads for electricity, natural gas and water Saved clients more than 200% of their service fees each year

16 Advantage IQ Clients Manages over 500+ clients (70+ Fortune 500 clients) Processes and pays over 1 million bills per month, supporting 425,000+ sitesnationwide Manages about $13 billion in expenses 96% retention rate

Average Revenue Growth rate of 26% over the last three years Revenue $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 2005 2006 2007 YTD 6/30/08 Net Income $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 2005 2006 2007 YTD 6/30/08 Advantage IQ Financial

Financial

19 $0.72 $0.92 $1.46 $0.72 $0.91 -$0.05 $0.15 $0.35 $0.55 $0.75 $0.95 $1.15 $1.35 $1.55 $1.75 2004 2005 2006 2007 YTD 6/30/08 Consolidated Earnings ROE moving towards authorized Financial

20 Fitch, Inc. Moodys Standard & Poors Rating Agency BB+ Baa3 BBB- Corporate Positive BBB Stable Baa2 Stable BBB+ Outlook Secured Financial Debt Maturities by Year (proforma December 31, 2008) 6% 3% 13% 1% 25% 8% 2% 2% 6% 2% 14% 19% $0 $50 $100 $150 $200 $250 $300 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 Long-term debt outstanding Proposed 2008 debt issuances Target BBB+ Rating $320.0 million committed line of credit $85.0 million revolving A/R receivable sales facility Sales agency agreement to issue up to 2 million shares Modest maturities Capital expenditures funded with appropriate capital structure 52% Debt to Equity as of June 30, 2008

21 $0.12 $0.125 $0.130 $0.135 $0.140 $0.145 $0.150 $0.165 $0.180 $0.100 $0.110 $0.120 $0.130 $0.140 $0.150 $0.160 $0.170 $0.180 $0.190 Dividend Increase Occurred Dividend Payment Trend $0.12 per share dividend initially paid Dec. 15, 1998 Dividend History Targeting 60% 70% payout ratio

22 2008 Earnings Guidance $(0.03)-$0.00 $0.10-$0.12 $1.20-$1.40 $1.35-$1.55 Other Advantage IQ Avista Utilities Consolidated

23 This presentation contains forward-looking statements, includingstatements regarding our current expectations for future financial performance and cash flows, capital expenditures, our current plans or objectives for future operations, future hydroelectricgeneration projections and other factors, which may affect the company in the future. Such statements are subject to a variety of risks, uncertainties and other factors, most of which are beyond our control and many of which could have significant impact on our operations, results of operations, financial condition or cash flows and could cause actual results to differ materially from those anticipated in such statements. The following are among the important factors that could cause actualresults to differ materially from the forward-looking statements: weather conditions, including the effect of precipitation and temperatures on the availability of hydroelectric resources and the effect of temperatures on customer demand; changes in wholesale energy prices that can affect, among other things, cash needed to purchase electricity, natural gas for ourretail customers and natural gas fuel for electric generation, and the value of surplus energy sold, volatility and illiquidity in wholesale energy markets, including the availability andprices of purchased energy and demand for energy sales; the effect of state and federal regulatory decisions affecting our ability to recover costs and/or earn a reasonable return including, butnot limited to, the disallowance of costs that we have deferred; the potential effects of any legislation or administrative rulemaking, including the possible adoption of national orstate laws requiring resources to meet certain standards and placing restrictions on greenhouse gas emissions to mitigate concerns over global warming; the outcome of pending regulatory and legal proceedings arising out of the western energy crisis of 2000 and 2001, and including possible retroactive price caps and resulting refunds; the outcome of legalproceedings and other contingencies; changes in, and compliance with, environmental and endangered species laws, regulations, decisions and policies, including present and potentialenvironmental remediation costs; wholesale and retail competition including, but not limited to, electric retail wheeling and transmission costs; the ability to relicense and maintain licenses forour hydroelectric generating facilities at cost-effective levels with reasonable terms and conditions; unplanned outages at any of our generating facilities or the inability of facilitiesto operate as intended; unanticipated delays or changes in construction costs, as well as our ability to obtain required operating permits for present or prospective facilities; natural disasters that can disrupt energy production or delivery, as well as theavailability and costs of materials and supplies and supportservices; blackouts or disruptions of interconnected transmission systems; the potential for future terrorist attacks or other malicious acts, particularly with respect to our utility assets; changes in the long-term climate of the Pacific Northwest, whichcan affect, among other things, customer demand patterns and the volume and timing of streamflows to our hydroelectric resources; changes in future economic conditions in ourservice territory and the United States in general, including inflation or deflation; changes in industrial, commercial and residential growth and demographic patterns in our service territory;the loss of significant customers and/or suppliers; default or nonperformance on the part of any parties from which we purchase and/or sell capacity or energy; deterioration in the creditworthiness of our customers and counterparties; our ability to obtainfinancing through the issuance of debt and/or equity securities,which can be affected by various factors including our credit ratings, interest rates and other capital market conditions; the effect of any change in our credit ratings; changes in actuarial assumptions, the interest rate environment and theactual return on plan assets for our pension plan, which canaffect future funding obligations, costs and pension plan liabilities; increasing health care costs and the resulting effect on healthinsurance provided to our employees and retirees; increasing costs of insurance, changes in coverage terms and our ability to obtain insurance; employee issues, including changes incollective bargaining unit agreements, strikes, work stoppages or the loss of key executives, as well as our ability to recruit and retain employees; the potential effects of negative publicity regarding business practices, whether true or not, which could result in, among other things, costly litigation and a decline in our common stock price; changes in technologies, possibly making some of the current technology obsolete; changes in tax rates and/orpolicies; and changes in our strategic business plans, which maybe affected by any or all of the foregoing, including the entry into new businesses and/or the exit from existing businesses. For a further discussion of these factors and other important factors,please refer to the companys Annual Report on Form 10-K for the year ended Dec. 31, 2007 and the companys 10-Q for the quarter ended June 30, 2008. The forward-looking statementscontained in this presentation speak only as of the date hereof. The company undertakes no obligation to update any forward-looking statement or statements to reflect events orcircumstances that occur after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management topredict all of such factors, nor can it assess the impact of each such factor on the companys business or the extent to which any such factor, or combination of factors, may cause actualresults to differ materially from those contained in any forward-looking statement.

24

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