New Rates Would Become Effective on or About Sept. 9, if Approved by
                                  Regulators

Spokane, Wash., July 23 /PRNewswire-FirstCall/ -- Avista Corp. (NYSE: AVA) filed a request today with Idaho regulators to increase natural gas rates to reflect higher current and projected wholesale natural gas prices.

(Logo: http://www.newscom.com/cgi-bin/prnh/20040128/SFW031LOGO )

This request is a Purchased Gas Cost Adjustment (PGA) that is filed annually to reflect changes in the cost of gas purchased by Avista to serve customers. Any increases or decreases related to these PGA filings directly result from the cost of gas purchased in the marketplace. Avista Utilities makes no additional profits from these rate changes.

This proposed increase reflects higher wholesale natural gas prices during 2004, as compared to 2003. These higher prices are expected to continue at or near current levels through the coming winter. The market price for natural gas can fluctuate based on supply and demand, similar to the prices for commodities such as wheat or crude oil. The increase in the wholesale cost of gas during 2004 is due to factors that affect short-term supply and demand, as well as the overall increase seen in other energy prices.

Avista is requesting an overall price increase of 14.2 percent, or $7.8 million in annual revenues. A residential or small business customer using an average of 70 therms per month can expect to see an average increase of $8.21 per month, or about 14.2 percent. Larger commercial and industrial customers can expect to see an average increase between 15.9 and 17.2 percent, with the higher increase percentages due to lower base rates.

This PGA request is independent of the general rate increase request filed by Avista with the Idaho Public Utilities Commission (IPUC) in February. That request for an average natural gas price increase of 7.8 percent is related to the increased ownership and operating costs associated with delivering natural gas to the customer. Avista has not had a general natural gas rate increase since 1989. Decisions by the IPUC on these requests are expected simultaneously for an effective date on or about Sept. 9, 2004.

"We understand the impact that increased prices have on our customers, especially on those who have the most difficulty paying their energy bill," said Scott Morris, president of Avista Utilities. "We have a number of programs to assist our customers in managing their energy bills including Project Share, an emergency energy assistance program."

Other customer programs offered by Avista include energy conservation and efficiency programs; Comfort Level Billing, a plan that averages annual energy bills into equal monthly payments; and CARES, a program for customers facing financial hardships that provides assistance with payment arrangements and referrals to community resources. Avista also offers energy conservation education, including workshops or seniors, energy use guides and home visits by meter shop personnel to help customers reduce energy costs on a long-term basis.

For more information on conservation tips, energy assistance programs, and bill payment plans, customers may visit www.avistautilities.com or call Avista at 800-227-9187.

Avista serves 62,000 natural gas customers in Idaho.

This request to increase natural gas rates is subject to public review and a decision by the IPUC. Copies of the filing and proposed tariff changes are available in Avista's offices and the office of the IPUC.

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 325,000 electric and 300,000 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.

NOTE: Avista Corp. and the Avista Corp. logo are trademarks of Avista Corporation. All other trademarks mentioned in this document are the property of their respective owners.

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, 2003, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.

SOURCE  Avista Corp.
    -0-                             07/23/2004
    /CONTACT:  Media, Catherine Markson, +1-509-495-2916, or
catherine.markson@avistacorp.com, or Investors, Angela Teed, +1-509-495-2930,
or angela.teed@avistacorp.com, both of Avista Corp./
    /Photo:  NewsCom:  http://www.newscom.com/cgi-bin/prnh/20040128/SFW031LOGO
             AP Archive:  http://photoarchive.ap.org
             PRN Photo Desk, photodesk@prnewswire.com/

    /Web site:  http://www.avistacorp.com /
    (AVA)

CO:  Avista Corp.; Idaho Public Utilities Commission; IPUC
ST:  Washington, Idaho
IN:  UTI OIL
SU:

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5715 07/23/2004 08:30 EDT http://www.prnewswire.com