Mar 31 , 2011
Report to Shareholders
Post by Jessie Wuerst
 
We’ve talked in this blog before about Avista being an investor-owned company. Because we’re publicly owned by our shareholders, we have reporting requirements, which we meet each year. These reports are available to the public (www.avistacorp.com), and we believe they are a good way for people to gain a better understanding of how we do business.

At the end of February we filed our Annual Report on Form 10K and today we filed our proxy statement with the Securities and Exchange Commission. In addition, Avista’s 2010 Report to Shareholders will begin mailing today and will be available on our website avistacorp.com. This is a great opportunity for shareholders and the public to read about how our company performed in 2010. The annual report takes an in-depth look at the financial operations of Avista Corp. and talks about the issues that may impact or currently are impacting our company.

The proxy statement provides information for shareholders who will vote on issues at the company’s upcoming annual meeting. There is also a complete description of how the company is governed by the Board of Directors, their roles and responsibilities and information about the director who is nominated for re-election.

The proxy also contains in-depth information about executive compensation at Avista. Given the stories in the national news over the past couple of years, there is more and more attention to executive compensation. Some of our customers think that one of the reasons we request a rate increase is to pay the salaries of our executives.  That’s not the case. You may or may not agree, so I hope you’ll read on to learn more about salaries and your bill.

The first thing to know is that all employee salaries, including executives, are targeted to be in the middle of the range for similar jobs at similar companies in our region. We review what’s happening in the market regularly. Salaries and incentives are reviewed by the state utility commissions each time we ask for a change to rates, and they determine what is reasonable to include when rates are set. 

Less than one-half cent of each dollar in your energy bill goes to pay for the salaries and incentives for all of our officers. That’s less than 75 cents on a monthly bill of $150.  Any remainder is paid by shareholders.

Okay, what’s driving the rest of the compensation you see for executives? A part of their compensation is based solely on achieving the targets set for the company’s performance. This means that a part of their compensation is at risk and not guaranteed to be paid. In other words, if we don’t meet goals for customer satisfaction, service reliability and overhead costs, that part of their compensation isn’t paid. Not all industries or all companies set these kinds of targets, but we do and we have for many years.

Some of what is included in the Total Compensation chart in the proxy is a change in the value of the top five executives’ pension – it’s not money they’re taking home – it’s a change in value of their future pension based on length of service with the company, age and other factors. And I want to assure you that Avista doesn’t give perquisites (perks) – no personal private club memberships or discounts on energy bills or cars or boats or vacation homes.

I hope I’ve been able to give you a little more information about our company than you had before you read this post. If you have questions about executive compensation or how our company runs or our annual report and proxy statement, please contact us at conversation@avistautilities.com. We’ll do our best to give you the information you request as quickly as possible.
 
Published: 3/31/2011  2:38 PM | 0  Comments | 0  Links to this post

Mar 30 , 2011
Avista crew replacing and upgrading a new electrical structure.
This Avista crew was in the middle of installing a
large steel electrical structure that holds power lines
which cross the Spokane River near SFCC and TJ
Meenach Bridge. The old wooden structure is still
standing in the middle with the poles connected at
the top. Two of the taller steel replacement poles are
on the picture on the left and right. The placement of
this structure is on the side of a 45-degree angle
ravine that slopes down to the river below. Once the
full structure is built the crew will re-string new, more
efficient power lines across the river.
Crew members fill in a hole for the new steel pole.
The Avista crew fills in the hole for a new steel pole.
A contractor had to shoot gravel down the ravine on
a belt to fill in the massive depth of the new poles.
We all use power every day, but don’t always know where it comes from or why it’s so reliable
 
Post By Dan Kolbet 

This morning I wrote a reply in an ongoing online conversation I’ve been having with a few folks on a local news website. The discussion was wide-ranging from rates to hydropower.  We don’t always agree with one another. That’s OK. It got me thinking about power generation in our area and our customers’ use of it.

One area of the discussion that struck me was the idea that Avista’s hydroelectric dams (built when the company was Washington Water Power) were paid for by taxpayers. I don’t know if this is a common misperception, but it’s incorrect. In fact, all of Avista’s (WWPs) dams were built through private funding. All Spokane River projects: Monroe Street (1890) Post Falls (1906), Nine Mile (1908), Nine Mile (1915) and Upper Falls (1922); and Clark Fork projects: Noxon Rapids (1959) and Cabinet Gorge (1953) were built privately.

There are so many little dams chugging away day after day, decade after decade that they are easy to ignore. Even after four years of working at Avista when I think of a “big” dam, I find myself thinking of Grand Coulee or Chief Joseph dams on the Columbia River. Those are federal dams built with taxes, Avista’s weren’t.

Our power mix is roughly 50 percent hydroelectricity. Forty-two of that 50 percent comes from the dams we built, own and operate. The rest come from long-term contracts with other hydro generators.

Focusing on reliability so you don’t have to
Operating these dams and electric resources is really a complex process that most of us don’t think about every day. The perception may exist since these resources are up and running that power has, and always will be plentiful and reliable. That’s just not the case. We’ve got to work at it together. One of the questions I received last summer when I was working on our Energy on the Street project was about the future of energy. How is Avista planning for the future?
 
The web of electric generation around the Northwest provides juice for those who want it and pay for it. When I come home at night and flip on the lights, I don’t think about where that power comes from and I bet you don’t either. Is it hydro, natural gas, biomass, coal or wind? But there’s a system in place that we manage that ensures you get the power you need when you want it. That’s one way to think of reliability.

The system is also reliable because employees maintain it. The effort extends beyond maintaining or upgrading power plants. It’s reliable because of the people who climb the poles in six-feet of snow. The men and women who brave the elements to ensure the power lines that feed your home are back in service as quickly as possible when nature’s fury blows trees into the lines, encases them in ice or burns them to the ground in a firestorm.

Avista’s electrical system is rooted around 125 years of history, but it’s not on autopilot. Our employees work hard to ensure that when you flip the light switch or turn on the TV, you don’t have to think about 125 years of power lines and dams. All you need to know is that we’re taking care of it and that it’s there for you when you need it. That’s reliability.
Published: 3/30/2011  11:22 AM | 0  Comments | 0  Links to this post

Mar 25 , 2011
PUD/IOU Video
 
Post by Dan Kolbet

It’s been a little while since I posted an Energy on the Street video here on the blog. I absolutely love this project and how we’ve been able to shape it together by beging transparent about it from the beginning. By posting on the blog and twitter where we would film and who was answering questions, we hopefully built some excitement for the launch of the videos way back in September.

We haven’t released any new videos since December, so to help broaden the reach of the videos, I posted some of our most popular ones on YouTube, where hopefully they will be seen by Avista customers like you. You can see all the videos at AvistaUtilities.com/Street.

As always, Energy on the Street is a living project and we’d like your submissions. Send us a video or e-mail about whatever energy related topic you’re interested in and we’ll do our best to get you an answer.

In the meantime, enjoy the video above about Public Utility Districts (PUDs) and Investor Owned Utilities (IOUs).
Visit the YouTube Channel: http://www.youtube.com/EnergyOnTheStreet 
Published: 3/25/2011  4:07 PM | 0  Comments | 0  Links to this post

Mar 22 , 2011

Post by Dan Kolbet

owl video
Avista recently gave a helping hand to a Great Horned owl chick on the Palouse. It’s small efforts like this that tell the real story about who Avista is as a company and how much our employees care about the communities we live in.

The owl is now back in its nest at Pullman’s Lincoln Middle School. The chick, which was too young to fly, was found a week ago at the foot of the nest tree on the school grounds. Employees from Washington State University College of Veterinary Medicine took the bird back to WSU, for an examination and feeding while plans were made to replace it in its nest.

After waiting for winds to die down, Avista donated a large bucket truck, along with serviceman Tom Haeder, to reach the nest, about 40 feet off the ground. The mother owl flew off when Avista arrived, but was seen circling nearby before returning to the nest.

We’re glad we could be there to help out.

Published: 3/22/2011  9:26 AM | 0  Comments | 0  Links to this post

Mar 14 , 2011
Original Song video
Grand Prize Video winner, "Original Song" by Vivek Jayarm, Rachit Singh, Maritz Lang from Pullman High School.
 
Post by Brandi Smith

They're On Video
Grand Prize Runner Up video winner, "They're On"
by Hunter Farnsworth and Kyle Libey of Pullman
High School.
Looking for a little creative refreshment to start your day? Well look no further. High school students from our service territory recently took the “Every Little Bit” video challenge to create a short film demonstrating the importance of energy efficiency. With over 70 entries, the competition was fierce.

The Grand Prize winners were three imaginative students from Pullman High School. Not only will their school get a $2,500 technology grant from Avista, but they will each receive a day of learning at NxNW Production Company in Spokane as part of their prize package. Talk about awesome.

Check out the top five videos by clicking on the links below. You will no doubt be inspired by their creativity and attention to detail. Watch out “Glee,” it looks like our local talent might give you a run for your money. 
 

• “Original Song” Grand Prize video by Vivek Jayarm, Rachit Singh, Maritz Lang from Pullman High School.
 
• “They’re On” Grand Prize Runner Up video winner by Hunter Farnsworth and Kyle Libey of Pullman High School.

• “Eco-Friendly Rap” Viewers Choice Award by Aliva Imholt, Jesse German, and Ethan Sanchez of St. Maries High School.

• “Simple Ideas” Honorable Mention by Savannah Miller and Ana Ruddlesden of Mead High School.

• “Eye Save Energy” Honorable Mention by Chelsea Thaut and Jessica Hudson of St. Maries High School
 
Published: 3/14/2011  2:12 PM | 0  Comments | 0  Links to this post

Mar 14 , 2011
Post by Dan Kolbet
Back in early February we posted that Avista had reached a settlement agreement regarding our natural gas rate case in Oregon. The Oregon PUC has now approved that settlement. See the details in the news release below.
 
Avista Receives Approval to Adjust Natural Gas Rates in Oregon
The Public Utility Commission of Oregon approves all-party settlement agreement
 
Avista received approval from the Public Utility Commission of Oregon (PUC) on the all-party settlement, concluding the company’s natural gas rate case in Oregon. New customer rates will be implemented in two phases: effective March 15, 2011, and June 1, 2011. Avista made the request to the PUC on Sept. 30, 2010, followed by an all-party settlement agreement on Jan. 31, 2011. The order will result in an overall increase in billed rates of 3.1 percent.

A residential customer using an average of 46 therms per month can expect to see an increase of about $1.31 per month, or 2.3 percent, for a revised monthly bill of approximately $59.45, effective March 15. Included in the rate change is an increase in the monthly basic charge from $6.50 to $7.00. On June 1, an increase of about $0.63 per month, or 1.1 percent, will become effective for a revised monthly bill of about $60.08. Overall rate increases for commercial and industrial customers vary between 0.6 percent and 3.3 percent, depending on the rate schedule.

The order sets Avista’s rate of return on rate base at 8.0 percent, with a common equity ratio of 50 percent and a 10.10 percent return on equity. Revenues are expected to increase by approximately $2.0 million effective March 15 and by approximately $1.0 million effective June 1 for an overall $2.975 million to recover expenses and capital investments made by Avista to its distribution system to ensure the safe, reliable delivery of natural gas to over 95,000 Oregon customers.

“Avista is committed to providing our customers with the safe, reliable energy they need at a fair price,” said Dennis Vermillion, president of Avista Utilities. “We are pleased the Commission recognized the need for our retail rates to reflect the increased costs necessary to operate and maintain our natural gas delivery system.”

The order also provides for deferred accounting treatment for two capital additions – the second phase of the Roseburg Reinforcement Project and the Medford Integrity Management Pipe Replacement Project - to be completed by Nov. 1, 2011, and the opportunity for a subsequent rate adjustment of approximately $0.6 million on June 1, 2012, to recover the prudently incurred costs for the two projects.

Customer Assistance
To help customers manage their energy use and costs, Avista offers a number of energy efficiency programs for residential, commercial and industrial customers. In 2010, over $950,000 in energy efficiency incentives and rebates were returned to Oregon customers.

In addition to support for energy assistance programs like Project Share, Avista also offers services for customers such as comfort level billing, payment arrangements and Customer Assistance Referral and Evaluation Services (CARES), which provide assistance to special-needs customers through referrals to area agencies and churches for help.
Published: 3/14/2011  1:37 PM | 0  Comments | 0  Links to this post

Mar 04 , 2011
 
The photos above are courtesy of Nicole Hensley and Blush Response Photography.
 
Post by Dan Kolbet

Earlier this winter when it was really, really cold outside, I took a tour of Avista’s Post Street Sub with local freelance photographer Nicole Hensley. Nicole was seeking an inside look at this historic building. Most people refer to it as the Washington Water Power building, because of the big green letters on the roof. We were taken on an insider’s tour by Avista Chief Operator Dave Brown.

Nicole got some great photos of the historic elements of the building and I encourage you to thumb through them above and visit her website. I grabbed some video as well, you can see that below. Post Street is still a working piece of Avista’s electrical grid, but most everything you’ll see in the images and video are no longer in service, but preserved for history’s sake.

Video
Details on the Post Street Sub
Energy generated at Avista's Monroe Street and Upper Falls power plants is transmitted via large underground cables to the Post Street Substation, where it is distributed throughout the company's electrical system. Serving as the control center for Monroe Street and Upper Falls, this building houses personnel who oversee both plants.

Constructed in 1909, the Post Street Substation has also served as a warehouse and sheltered streetcars. Powered by electricity from Avista's hydroelectric facilities, streetcars were a popular form of Spokane-area transportation from the late 1800s until they were removed from service in 1936.

Designed by the famed architect Kirtland Cutter, this Romanesque brick structure with large, recessed arch windows is an excellent example of Spokane's early industrial architecture.

The four ornate iron domes, or cupolas, which once graced the corners of the substation roof, were donated to the U.S. government during the World War II scrap metal shortage. Post Street stands today as a prominent part of Avista's "living history."
Published: 3/4/2011  3:25 PM | 0  Comments | 0  Links to this post

Mar 02 , 2011
Post by Brandi Smith

Noxon turbine runner and shaft.
This is a picture of the upgraded turbine runner and shaft
prior to installation. The turbine runner (water wheel) is 18
feet in diameter and weighs 130,000 pounds.
Generator rotor.
This picture shows the generator rotor being lowered into unit
3. It is 34 feet in diameter and weighs 650,000 pounds.
Project management is like juggling three balls at once - time, cost, and quality. The four-year, $45 million project to upgrade four generating units at Noxon Rapids Dam, Avista’s largest hydro facility, started in July of 2008. The improvements include upgrading the generator, installing higher capacity transformers and replacing the original turbine runners in all four units.

Sounds simple enough right? Well not so much.

Unfortunately, our local hardware stores don’t carry parts for turbine runners and generator rotors, so as you can imagine, this is no small deal. In fact, many of the parts that need to be replaced or refurbished have to be ordered a year in advance and are shipped from all over North America.

Each turbine runner weighs 130,000 pounds and the generator rotor weighs 650,000 pounds which combined is the equivalent of 47 elephants. Dealing with such significant weights and sizes makes the project more complex. Additionally, all of these upgrades are taking place in the midst of routine dam operations and maintenance. Talk about a juggling act.

To date, the Noxon team has finished upgrading two units and is nearly finished with the third, which will start seeing action this spring. The crew will begin work on the final unit this summer to complete the project by April of next year.

When finished, the improved turbine runners will generate more power using the same amount of water. Pretty cool, right? Approximately 30 megawatts will be added to the plant’s current maximum capacity (556.6 MW) and the incremental energy generated will meet some of the renewable energy portfolio standards as well. It’s a win-win.
The Noxon Rapids Dam is located on the Clark Fork River in Montana and provides Avista customers in Washington and Idaho with clean, renewable hydroelectric power.

Watch this video from 2009 of Noxon’s Unit 3 being removed from the bowels of the dam. Avista Blog: Noxon Rapids Dam upgrades underway, massive Unit 3 turbine removed.
Published: 3/2/2011  2:56 PM | 0  Comments | 0  Links to this post

Mar 02 , 2011
charge video
 
Post by Dan Kolbet

Today the Spokesman-Review published an article about Avista’s plan to upgrade our three electric vehicle charging stations in Spokane. Check out “Plugged into the future.” We’ve got one at Avista’s HQ on Mission, one at Spokane City Hall and the last one is at the Steam Plant downtown.

The plan is to upgrade the stations from 120 volts to 240 volts, speeding charge time and convenience. As more electric vehicles find their way to our streets, stations like these are likely to become more common.

The video above is from last April when the stations were first installed. Thought you might like another look.
Published: 3/2/2011  8:59 AM | 0  Comments | 0  Links to this post