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Avista to Adjust Hydro Operations in Response to Dry Winter
Hydro generation expected below normal but other resources meet demand

Spokane, Wash., March 10// -- Avista Utilities is preparing for extremely low spring runoff conditions due to a warm, dry winter. Runoff is expected to be sufficient to achieve an initially normal summer level on Lake Coeur d'Alene, but lower levels are possible in late summer. Hydroelectric generation is anticipated to be well below normal and Avista will utilize other resources to meet customer demand.

Current forecasts are predicting runoff levels below 50 percent of normal in the Spokane and Clark Fork river drainages from April through September. Avista operates eight hydroelectric projects with 980 megawatts of generating capability on those two rivers. Avista currently estimates its hydro generation will be approximately 80 percent of normal for the calendar year.

Note: The reason that the generation percentage is greater than the runoff level is because under normal streamflow conditions Avista's hydroelectric facilities can produce at full capacity and are unable to utilize all of the water passing by the dams. Power production is not affected until river levels fall below normal in the drier months of the year.

When Avista falls short of hydroelectric energy, it can generate electricity with more costly resources or purchase power from the wholesale market to meet the needs of its 330,000 electric customers in Washington and Idaho.

"Our first priority is to obtain enough energy to serve our customers, and we don't expect to have any problems meeting our customers energy needs," said Ron Peterson, Avista vice president of energy resources. "It is fortunate that we recently obtained full ownership of our natural gas generating plant, Coyote Springs 2. Although gas generation is more expensive than hydro, the plant will help us to meet a portion of the shortfall and allow us to avoid buying even more expensive energy from the wholesale markets."

Water managers warn that continued dry weather could affect Lake Coeur d'Alene, the Spokane River and Lake Spokane levels later in the summer.

"This is the first time we have ever encountered conditions like this," said Gary Stockinger, Avista hydro operations engineer. "We should be able to reach summer level by mid-May. If things continue to stay dry throughout the summer, we could see the river and lake levels below normal in late August."

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 330,000 electric and 305,000 natural gas customers in four 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.


Hugh Imhof




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