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Avista Begins Construction of Sagle Substation
New 115 kV substation to serve growing electric demand, improve reliability

Spokane, Wash., May 22// -- Avista has begun construction of a new 115,000-volt substation to meet the growing demand for electricity in the communities of Sandpoint, Sagle and Dover, Idaho. The new Sagle Substation represents an investment by Avista of more than $1 million in new infrastructure to serve customers with improved capacity and reliability.

The Sagle Substation is designed to ease the electrical demand on Avista's nearby facilities. New housing growth and an expanding economy have put increasing strain on the electric distribution system. When complete, the project will provide greater capacity for load growth and increase service reliability to the local area.

"This project demonstrates Avista's commitment to ensure high quality, dependable service that will handle growing demand well into the future," said Greg Gfeller, Avista Sandpoint district manager. "Customers in the area should also see fewer outages and shorter repair times as a result of this installation."

The Sagle Substation will be located on a two-acre parcel on Gun Club Road just off Highway 95 in Sagle. Grading and fencing of the site has been completed and equipment will arrive this summer. Avista expects construction to be completed by the end of 2006.

Substations are an integral part of the electrical system. For power to be useful in a home or business, it normally comes off the high voltage transmission grid and is converted or "stepped-down" to the lower voltage of the distribution grid.

A substation typically serves three purposes:
. Reduces transmission voltages to distribution voltages, in the case of the Sagle Substation from 115,000 volts down to 21,000 volts.

. Splits the distribution power in multiple directions to homes and businesses via distribution feeders and then to smaller distribution transformers where the voltage is transformed to 120/240 volts for the customer.

. Substations include circuit breakers and switches so that power can be disconnected from the transmission grid or distribution lines if necessary to protect facilities from damage.

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 a company operating division that provides service to 338,000 electric and 297,000 natural gas customers in three western states. Avista's non-regulated subsidiaries include Avista Advantage and Avista Energy. Avista Corp.'s stock is traded under the ticker symbol "AVA." For more information about Avista, please visit www.avistacorp.com.

Avista Corp. and the Avista Corp. logo are trademarks of Avista Corporation.

CONTACTS:

Hugh Imhof

509-495-4264

hugh.imhof@avistacorp.com

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