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Avista Requesting to Lower Natural Gas Prices for its Oregon Customers
Price decrease would make customer prices the lowest in five years

SPOKANE, Wash., Aug. 31 // -- Natural gas prices for residential customers of Avista (NYSE: AVA) could decrease by 21 percent effective Nov. 1, if the Public Utility Commission of Oregon (OPUC) approves the company's request. Avista made the request in its annual Purchase Gas Cost Adjustment (PGA) request filed today with the OPUC.

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Steep declines in wholesale natural gas prices caused by lower demand and an abundance of natural gas supplies have driven natural gas prices down significantly since July 2008. Avista has been purchasing gas at these lower prices to serve customers during the coming winter.

If the request is approved, an Avista residential customer using an average 52 therms per month could expect their bill to decrease by $16.22 for a revised monthly bill of $61.21. Other customer groups could also expect decreases of over 20 percent.

"We're pleased that our customers will have the lowest natural gas rates since 2004. That's especially good news as the winter heating season approaches," said Kevin Christie, Avista's director of gas supply.

Christie cautioned that although wholesale natural gas prices are at their lowest level in several years, the market remains volatile. Because Avista cannot accurately predict future wholesale prices, it follows a diversified natural gas purchasing plan that allows for flexibility based on changing market prices and conditions.

The direct cost of wholesale natural gas currently makes up about 75 percent of an Avista customer's bill, and these costs fluctuate up and down. Avista does not mark up the cost of natural gas purchased to meet customer needs. The remaining 25 percent covers the cost of delivering natural gas - the equipment and people needed to provide safe and reliable delivery of service.

Natural gas is a clean, green fuel that is most efficient when used directly for space and/or water heat rather than in a combustion turbine to supply electricity for the same purposes.

Customers can take advantage of a number of billing options, energy efficiency programs, incentives and rebates offered by Avista to help them proactive manage their natural gas usage. Comfort Level Billing is option that gives qualifying customers the opportunity to smooth seasonal energy bill highs and lows by averaging energy bills over 12 months. Information is available at www.everylittlebit.com.

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 353,000 homes and businesses and natural gas to 313,000 homes and businesses in three Western states, serving more than 492,000 customers. Avista's primary, non-regulated subsidiary is Advantage IQ. Avista 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.

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, 2008, and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2009.

SOURCE Avista Corp.

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SOURCE: Avista Corp.

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

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