February 2007

From the Chairman

Investor Update   Financial Resources Avista Corp. Q4 and Year-end 2006 Income Statement Avista Corp. Q4 and Year-end 2006 Balance Sheet Avista Corp. Q4 and Year-end 2006 Financial and Operating Highlights Avista Corp. Stock Quote/Chart Avista Corp. 2005 Summary Annual Report Avista Corp. Contact Us Unsubscribe Avista Corp. reports earnings for Q4 and year-end 2006 Avista Corp. reported net income of $18.0 million, or $0.36 per diluted share, for the fourth quarter of 2006, as compared to $25.4 million, or $0.52 per diluted share, for the fourth quarter of 2005.  For the year ended Dec. 31, 2006, Avista Corp.’s net income was $73.1 million, or $1.47 per diluted share, as compared to $45.2 million, or $0.92 per diluted share, for the year ended Dec. 31, 2005. Ely “We are pleased with our results for 2006.  Earnings from our utility operations, the energy marketing and resource management business segment, and Advantage IQ all increased over 2005,” said Avista Chairman and Chief Executive Officer Gary G. Ely.  “During December, we completed two significant financing transactions that will allow us to reduce our debt service costs and improve our capitalization ratios as part of the continuing process of improving our corporate financial health.  We issued over 3 million shares of common stock and $150 million of First Mortgage Bonds.” Read more. Other financial news: > Q4 and Year-End 2006 Earnings Report -- archived Webcast and slides > The next quarterly earnings report is scheduled for 7:30 a.m. PDT, Tuesday, April 24, 2007. Watch for more information. We Want to Hear From You Your opinion matters to us We want to make sure that our communications to you are valuable and that they are meeting your needs for information about our company. To help us gauge the effectiveness of this e-newsletter, we would appreciate your taking a brief survey to give us your thoughts. Thank you for your help. Take the survey.

This e-newsletter contains forward-looking statements, including statements regarding our current expectations for future financial performance and cash flows, capital expenditures, our current plans or objectives for future operations, future hydroelectric generation projections and other factors, which may affect the company in the future. Such statements are subject to a variety of risks, uncertainties and other factors, most of which are beyond our control and many of which could have significant impact on our operations, results of operations, financial condition or cash flows and could cause actual results to differ materially from the those anticipated in such statements.

For a further discussion of these factors and other important factors, please refer to our Annual Report on Form 10-K for the year ended Dec. 31, 2005 and Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2006. The forward-looking statements contained in this e-newsletter speak only as of the date hereof. We undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances that occur after the date on which such statement is made or to reflect the occurrence of unanticipated events.  New factors emerge from time to time, and it is not possible for us to predict all of such factors, nor can we assess the impact of any such factor on our business or the extent to which any such factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.