Avista Receives Commission Decision in Washington General Rate Cases

SPOKANE, WA--(Marketwired - January 07, 2016) - Avista's (NYSE: AVA) electric and natural gas general rate cases have concluded, with an order from the Washington Utilities and Transportation Commission (Commission or UTC) that will change electric and natural gas rates, beginning Jan. 11, 2016.

The Commission approved rates designed to provide a 1.6 percent, or $8.1 million decrease in electric base revenue, and a 7.4 percent, or $10.8 million increase in natural gas base revenue. The Commission also approved a rate of return (ROR) on rate base of 7.29 percent, with a common equity ratio of 48.5 percent and a 9.5 percent return on equity (ROE).

Throughout the rate case process, certain circumstances and costs changed, causing Avista to revise its overall proposed rate requests downward, especially for its electric operations. Avista's need for electric rate relief was reduced primarily due to a decrease in power supply costs of approximately $24 million, largely driven by the continuing decline in the price of natural gas used to run the company's gas-fired generation, as well as other cost updates and revisions.

The natural gas revenue increase approved by the Commission is related to Avista's ownership and operating costs to run the natural gas business. Changes in the commodity costs of natural gas for natural gas customers are reflected in Avista's annual Purchased Gas Cost Adjustment, which is generally effective November 1^st each year. On Nov. 1, 2015 natural gas customers' bills were reduced approximately 15 percent related to the decline in the market price of natural gas.

"We are pleased with the Commission's decision and its recognition that Avista's investment in utility infrastructure and its operating expenses are increasing at a faster pace than revenues. This is a positive outcome that provides us the opportunity to continue to recover the costs of serving our customers and investing in our systems while maintaining a fair return for our shareholders," said Scott Morris, chairman, president and chief executive officer of Avista Corp.

"In addition, we are pleased that our Washington electric customers will receive the benefit of Avista's reduced power supply costs going forward."

Avista anticipates issuing 2016 earnings guidance during the fourth quarter 2015 earnings call in February 2016.

Low Income Rate Assistance Program (LIRAP)

Recognizing the impact of rising prices on customers, especially limited income and senior customers, the Commission approved a multi-year funding plan for Avista's Low Income Rate Assistance Program (LIRAP). LIRAP provides direct energy bill assistance for limited income and senior customers. LIRAP is funded through a separate tariff. The increase in LIRAP funding results in a $320,000, or 0.1 percent increase in electric revenue and a $391,000, or 0.3 percent increase in natural gas revenue for these programs.

Expiring Customer Rebate

Avista's electric customers in Washington are currently receiving benefits from a rebate related to the Energy Recovery Mechanism (ERM) that has been reducing customer bills by 1.6 percent, totaling approximately $8.2 million on an annual basis. This rebate will expire effective Jan. 11, 2016. The expiration of the rebate will result in a 1.6 percent increase in customer bills.

Residential Customer Bill

As a result of the Commission's decision, including the changes in LIRAP and the expiring ERM rebate, residential electric customers using an average of 966 kilowatt hours per month would see an increase in their monthly bill of $0.15, or 0.2 percent. There is no change to the residential monthly basic charge.

Residential natural gas customers using an average of 68 therms per month would see a total bill increase of $4.63 per month, or 7.9 percent, for a revised monthly bill of $62.96. There is no increase to the residential monthly basic charge. This increase includes the change in LIRAP.

For more information about the general rate cases, visit www.utc.wa.gov.

About Avista Corp.

Avista Corp. is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is our operating division that provides electric service to 365,000 customers and natural gas to 325,000 customers. Its service territory covers 30,000 square miles in eastern Washington, northern Idaho and parts of southern and eastern Oregon, with a population of 1.5 million. Alaska Energy and Resources Company is an Avista subsidiary that provides retail electric service in the city and borough of Juneau, Alaska, through its subsidiary Alaska Electric Light and Power Company. Avista stock is traded under the ticker symbol "AVA." For more information about Avista, please visit www.avistacorp.com.

This news release contains forward-looking statements regarding the company's current expectations. Forward-looking statements are all statements other than historical facts. Such statements speak only as of the date of the news release and are subject to a variety of risks and uncertainties, many of which are beyond the company's control, which could cause actual results to differ materially from the expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2014 and the Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2015.