1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 21, 1998 THE WASHINGTON WATER POWER COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Washington 1-3701 91-0462470 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification No.) 1411 East Mission Avenue, Spokane, Washington 99202-2600 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 509-489-0500 Web site: http://www.wwpco.com None - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) 2 ITEM 5. OTHER INFORMATION Earnings Press Release On October 19, 1998, the Company announced earnings for the third quarter of 1998. A copy of the press release is attached hereto as Exhibit 99(a) and is incorporated herein by reference. Neither the filing of any press release as a exhibit to this Current Report nor the inclusion in such press releases of a reference to the Company's Internet address shall, under any circumstances, be deemed to incorporate the information available at such Internet address into this Current Report. The information available at the Company's Internet address is not part of this Current Report or any other report filed by the Company with the Securities and Exchange Commission. Potential Future Rate Increase On September 30, 1998, the Company notified Idaho regulators of its intent to file later this year for increased electric prices in Idaho. A copy of the press release is attached hereto as Exhibit 99(b) and is incorporated herein by reference. Commitments and Contingencies On October 9, 1998, Eastern Pacific Energy (Eastern Pacific), an energy aggregator participating in the restructured retail energy market in California, filed suit against the Company and its affiliates, Avista Advantage, Inc. and Avista Energy, Inc. in the United States District Court for the Central District of California. Eastern Pacific alleges, among other things, a breach of an oral or implied joint venture agreement, alleging that the Company agreed to supply not less than 300 megawatts of power to Eastern Pacific's California customers and that Avista Advantage agreed to provide energy-related products and services. The complaint seeks an unspecified amount of alleged damage and also seeks to impose a constructive trust over any future profits earned from sales of the aforementioned amount of power to California consumers. The Company and its affiliates intend to vigorously defend against all of the claims. Capital Expenditures Changes underway in the utility and energy industries are creating new opportunities to expand the Company's businesses and serve new markets. In pursuing such opportunities, the Company is shifting its strategic direction to growth in order to achieve its goal of becoming a diversified North American energy company. The Company's strategies were previously described in its Current Report on Form 8K dated August 14, 1998. The Company's estimates for capital expenditures (as reported in the 1997 Form 10-K) do not include expenditures that would be required to fund such strategies. Additional capital expenditures that would be required during the 1999-2000 period could be in the range of $400-600 million. Sources of funds would include, but are not necessarily limited to, cash flows from the reduction in the Company's common stock dividend that was announced on August 17, 1998, monetization of certain long-term contracts, an increase in the sale of the Company's accounts receivable, sales of certain assets, additional long-term debt, leasing or other equity securities. Year 2000 Update The Company is providing the following Year 2000 information in compliance with the new disclosure requirements of the Securities and Exchange Commission. Year 2000 Overview The Company continues to move forward with a comprehensive program to address areas of risk associated with the year 2000. Systems and programs that may be affected by the Year 2000 problem have been identified and activities are underway to make these systems Year 2000 ready. At this time, it is the Company's belief that all identified modifications that are within the Company's operating control will be made within the required time frames. STATE OF READINESS In order to address Year 2000 issues, several project activity teams were created and a comprehensive readiness plan was developed to bring the Company into Year 2000 readiness by the middle of 1999. The project was divided into four major categories of activities: Desktop Computer Systems, Business Systems, Supply Chain and Embedded Systems. Desktop Computer Systems All desktop computer hardware has been Year 2000 tested and an inventory and assessment of desktop resident third-party software has been completed. As a result, more than 350 of the Company's 1,100 desktop computers require hardware remediation, which is expected to be completed by mid-1999. All non-compliant third-party software programs are planned to be upgraded to a Year 2000 ready version by the middle of 1999. In addition, all critical business desktop applications are expected to be converted, tested and made Year 2000 ready by the middle of 1999. Business Systems Many of the Company's critical business systems would not have operated correctly in the year 2000 and beyond, and thus have been or are in the process of being re-programmed, upgraded or replaced. Key business systems have been inventoried and assessed. For example, the Company's Accounts Payable and General Ledger systems have been upgraded to Year 2000 ready versions, while new Materials Management, Human Resources and Payroll systems are currently being installed. Year 2000 testing is in process on the Accounts Payable and General Ledger systems. Testing of the Company's Billing, Customer Service and Work Management systems will begin in October 1998 and is expected to be completed before the middle of 1999. A failure of these systems would not jeopardize the Company's ability to deliver energy services to customers, but might affect its ability to perform selected accounting and business-related functions. Supply Chain The Company recognizes its dependence on outside suppliers of goods and services and is working to assure that the necessary products and services are available. To address these issues, the Company has communicated with suppliers and identified critical suppliers in order to investigate their efforts to become year 2000 ready. In addition, the Company has made site visits to select key suppliers and will be reviewing their contingency plans. Embedded Systems The Embedded System team is responsible for locating, assessing, testing, fixing or replacing microprocessor-controlled devices. Inventory and assessment is 90 percent complete, and to date very few embedded systems have been found that require remediation. None of these requiring remediation would have caused a disruption in service to our customers. Remediation and testing is complete at nine of the Company's twelve generation sites and these sites are Year 2000 ready. The combined output from these plants represents about 75 percent of the Company's overall generation capacity or about 900 megawatts. The process for testing a generation facility for Year 2000 consists of identification and testing of all facility systems and system components; renovations of systems and components that fail the tests; and a full facility test where system clocks are manually moved forward and the entire plant is put into operation as if it were already the year 2000. Remediation and testing at the remaining sites is scheduled to occur before the middle of 1999. The Company's Supervisory Control and Data Acquisition (SCADA) system, which monitors and controls the majority of the Company's generating and substation equipment and the transmission system, was run "in the Year 2000" for three days without incident. All testing of electric metering has been completed. Testing of devices in the Company's transmission and distribution substations systems is expected to be complete by mid-1999. Initial 3 assessment indicates that most of the embedded systems in these areas are either already Year 2000 compliant or are not within an essential business system. COSTS The Company estimates that the cost of its Year 2000 project will be approximately $4-6.5 million in incremental costs during the 1997-1999 time period. Through September 30, 1998, the Company has spent $2.2 million in incremental costs. These costs are being funded through operating cashflows. The Company does not expect costs associated with the Year 2000 project to materially affect the Company's earnings in any one year. RISKS The Company believes the primary areas of Year 2000 risk to be internal business systems, which are discussed above, and external factors, which include the regional electric transmission grid and natural gas pipelines. There can be no guarantee that systems of other companies on which the Company's systems rely will be timely converted. A failure to convert by another company or a conversion that is incompatible with the Company's systems could have an effect on the Company's ability to provide energy services. Electric The Company is working with the other energy suppliers in the area to address risks related to the regional electric transmission grid, which consists of the interconnected transmission systems of each utility within the Western Systems Coordinating Council (WSCC). Such interconnected systems are critical to the reliability of each interconnected electric service provider, as the failure of one such interconnected provider to achieve Year 2000 compliance could disrupt the others from providing electric services. Should the regional electric transmission grid become unstable, power outages may occur. The Company is in the process of developing contingency plans, including re-starting from a system-wide outage. The Company is in the process of contacting its major suppliers of electricity to assess their Year 2000 preparations. The Company has met with one of its largest suppliers, Bonneville Power Administration, and exchanged information. The North American Electric Reliability Council (NERC) has responsibility for overseeing the efforts of the industry in the United States and is coordinating Year 2000 efforts and contingency planning within ten electric reliability councils throughout the United States. Coordination in the Company's region is through the WSCC. The WSCC, along with NERC, has set a deadline of December 31, 1998 for the development of contingency plans. The Company cannot assure Year 2000 compliance or assess the effect of non-compliance by systems or parties that the Company does not control. In addition to the traditional electric utility operations of the Company, the energy trading business conducted by Avista Energy, Inc. is subject to Year 2000 risk. Most of Avista Energy's internal business systems do not require any significant upgrading and those that do are being addressed. However, if any of Avista Energy's counterparties experience Year 2000 problems (including but not limited to problems arising out of failures in the generation or transmission systems of utilities or other energy suppliers), such problems could impair the ability of Avista Energy or any of its counterparties to fulfill their contractual obligations. Avista Energy is in the process of contacting its counterparties to assess their Year 2000 readiness and of developing contingency plans. See "Energy Trading Business" in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998. Natural Gas The Company has performed an inventory and assessment of the equipment in its natural gas distribution systems and believes that there are no devices in the systems that will cause a disruption in the delivery of natural gas to customers due to a Year 2000 problem. However, the Company depends on natural gas pipelines which it does not own or control, and if one or more of the pipelines is unable to deliver natural gas, the Company in turn will be unable to deliver natural gas to customers. In order to address this issue, the Company has contacted each of the natural gas pipeline companies with which it has contracts to assess their Year 2000 readiness efforts and will continue to take reasonable steps to ensure that these suppliers are addressing any Year 2000 related problems that would result in a disruption in natural gas services to customers. In the event of a disruption in natural gas service, the Company has in place Emergency Operating Plans (generic plans to handle any unexpected emergency event) to address this type of situation, and is in the process of developing contingency plans specifically for Year 2000 related disruptions in the delivery of natural gas. CONTINGENCY PLANNING The Company is in the process of developing contingency plans, which will include such topics as identifying key personnel, communications, and deployment plans, along with training and equipment. Plans are scheduled to be completed by December 31, 1998. SAFE HARBOR FOR FORWARD LOOKING STATEMENTS. The Company is including the following cautionary statement in this Form 10-Q to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements are all statements other than statements of historical fact, including without limitation those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," and similar expressions. Such statements 4 are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Such risks and uncertainties include, among others, changes in the utility regulatory environment, wholesale and retail competition, weather conditions and various other matters, many of which are beyond the Company's control. These forward-looking statements speak only as of the date of the report. The Company expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. See "Safe Harbor for Forward Looking Statements" in the Company's 1997 Form 10-K under Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Future Outlook. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE WASHINGTON WATER POWER COMPANY (Registrant) Date: October 21, 1998 /s/ Jon E. Eliassen ----------------------------------------- Jon E. Eliassen Senior Vice President, Chief Financial Officer and Treasurer (Principal Accounting and Financial Officer)
1 Exhibit 99(a) [WASHINGTON WATER POWER LOGO] NEWS RELEASE CONTACT: Media Contact: Patrick Lynch (509) 482-4246; e-mail: plynch@wwpco.com Investment Community Contact: Diane Thoren (509) 482-4331; e-mail: dthoren@wwpco.com FOR IMMEDIATE RELEASE: October 19, 1998 5:53 a.m. PDT WASHINGTON WATER POWER REPORTS THIRD QUARTER EARNINGS DESPITE CURRENT-YEAR OPERATING CONDITIONS THAT CONTINUE TO AFFECT RETAIL ELECTRIC GROSS MARGINS, COMPANY SAYS IT EXPECTS 1998 EARNINGS TO FALL WITHIN SECURITIES ANALYSTS' ESTIMATES OF $1.40 AND $1.50 PER SHARE. SPOKANE, WASH.: Washington Water Power (NYSE: WWP), soon to become Avista Corp., today reported third quarter net income available for common stock of $8.1 million and earnings of $0.14 per share. Despite weather- and hydro generation-related conditions that continued to negatively affect the company's near-term results, Washington Water Power Board Chairman, President and Chief Executive Officer T.M. Matthews said he is comfortable that the company's 1998 earnings will still fall within the range of securities analysts' current estimates of $1.40-$1.50 per share. Matthews said the company has seen a near-term reduction in gross margin from its retail electric business, largely the result of a combination of unusually hot third quarter weather and lower streamflows that reduced hydroelectric generating capacity throughout the region. These conditions, he said, greatly contributed to increased purchased power costs in both the second and third quarters of this year. Matthews said quarterly power supply costs for the company's regulated energy business were higher by $96.3 million, compared with the third quarter of 1997. Thus far in 1998, the company's power supply costs have been higher by nearly $121 million, compared with the same period in 1997. "We expect the operating conditions we've seen throughout 1998 to have an impact on our results for the near term," Matthews said. "The third quarter was especially difficult because of the high energy demand for air conditioning--which set records for summer peak loads--and substantially higher prices for energy throughout the region." In spite of the near-term effects of adverse operating conditions, Matthews said the company remains focused on improving long-term results through its disciplined growth initiatives. In last year's third quarter, the company reported earnings of $0.22 per share on net income for common stock of $12.3 million. The company's consolidated revenues for the third quarter of 1998 were $1.4 billion, compared with revenues of $295.1 million achieved in the third quarter of 1997. Consolidated revenues for the first nine months of 1998 have already reached $2.7 billion, compared with $815 million for the same period in 1997. Thus far in 1998, company earnings from ongoing operations stand at $0.97 per share on net income for common stock of $54.4 million. This compares with earnings from 2 ongoing operations of $0.99 per share and income of $55.4 million for the first nine months of 1997, absent a gain related to a federal income tax recovery and some non-recurring accounting adjustments. ENERGY DELIVERY AND GENERATION AND RESOURCES The company's regulated gas and electric business units contributed $0.10 per share to third quarter earnings, compared with earnings per share of $0.12 in the third quarter of 1997. Coupled with the lower streamflows and reduced hydroelectric availability was one of the hottest summers on record in the company's service area, which pushed summer electric loads to record levels. The reliance on higher-cost thermal generation and purchased power will continue, with streamflows for the year on the company's hydroelectric generating system expected to approach between 90-95 percent of normal, compared with the record 172 percent of normal for all of 1997. The lower streamflows have contributed to a 21 percent decrease in hydroelectric generation so far this year, compared with the first nine months of 1997. Even with the difficult operating conditions, Matthews said Washington Water Power is recognized as one of the most effective operators of hydroelectric generating facilities in the country. He also noted that the company was recently ranked as one of the nation's five most efficient utilities. Utility wholesale electric revenues for the quarter were $177.1 million, up from the $93.4 million in revenues reached in last year's third quarter, with nearly all of the increase resulting from higher levels of lower-margin short-term sales. Retail electric and natural gas revenues in this year's third quarter were higher by $9.6 million. NATIONAL ENERGY TRADING AND MARKETING Avista Energy, the company's national energy trading and marketing affiliate, was slightly profitable in the third quarter, but that profit was offset by small losses at Avista Advantage, the company's energy services affiliate. Together, these Avista companies lost $0.01 per share in the third quarter, compared with a loss of $0.02 per share in 1997's third quarter. (Avista Energy results reflect mark-to-market accounting. Because it maintains a trading portfolio, Avista Energy marks its portfolio to fair market value on a daily basis, which causes earnings variability). Avista Energy has been profitable in every quarter since it began national energy trading and marketing a year ago, Matthews noted. He said that third quarter market prices dampened near-term results, but he remains confident that Avista Energy will continue to provide positive results for the long term. He said he expects Avista Energy to meet or exceed its 1998 return on investment target of 15 percent. Matthews added that he recognizes the potential for volatility in national energy markets, but said he is comfortable with Avista Energy's strategic focus and with the judicious approach the company has taken to energy trading. "Our trading approach primarily involves physical products, rather than financial positions," Matthews said. "The nature of our trading and marketing business requires that we perform a significant amount of analytical work. We hire people who have a wealth of experience and knowledge of electric and natural gas infrastructures and systems. We believe it is essential that we have extensive knowledge of how the systems are operated in the regions where we trade and market energy." Avista Energy traded 22.5 million megawatt hours of electricity in the third quarter, an increase of 81 percent over the 12.4 million megawatt hours the company traded in the second quarter of this year. Avista Energy ranked 14th nationally in total megawatt sales in the second quarter. Gas trading volumes in Avista Energy's Spokane and Houston trading operations averaged 1.4 billion cubic feet per day, a 57 percent increase over the second quarter average of 0.894 billion cubic feet per day. Avista Energy provided third quarter electric and gas revenues of $1.1 billion. Avista Energy revenues in the second quarter of this year were $381 million. Matthews said Avista Energy and Avista Advantage are playing a key role in the company's objective of becoming a total energy supplier with a significant national presence. As examples, Matthews cited Avista 3 Energy's recent agreement with Riverside (Calif.) Public Utilities. Activities within this alliance include implementation of joint energy marketing and trading activities, the sharing of market price information and real-time generation availability, and the dispatch of electric generation. With the signing of several new contracts, including deals with Stage Stores and Extended Stay America, Avista Advantage now serves 7,000 customer sites nationwide, and the Avista brand is now positioned in all 50 states. "Avista Energy and Avista Advantage continue to establish the Avista brand on a national level," Matthews said. "These companies have played an important role in furthering our position as a diversified energy services company and establishing a mindset within our customers that the Avista brand stands for consistent and superior products and services." NON-ENERGY BUSINESS Non-energy earnings, principally driven by Pentzer Corporation, Washington Water Power's private investment firm, were $0.05 per share for the third quarter of 1998 on income of $2.6 million. This compares with third quarter 1997 non-energy income of $6.6 million, or $0.12 per share. While earnings from Pentzer portfolio companies were up for the most recent quarter, the earnings difference can primarily be attributed to 1997 gains related to Pentzer's sale of stock it held in Itron, a Spokane-based provider of automatic meter-reading equipment and services. Matthews said Pentzer remains a consistent and strong contributor to company earnings, but he is also optimistic about the possibilities that exist for other non-energy portfolio companies, particularly for Avista Labs, a leading developer of fuel cells with proton exchange membrane technology for distributed power markets. Avista Labs was recently selected to receive a $2 million technology development award from the Department of Commerce's National Institute of Standards and Technology Advanced Technology Program. Washington Water Power will add another $1.22 million to the award over the next two years. "The $2 million award from the Department of Commerce is a strong endorsement in the potential of Avista Labs and in the fuel cell technology the company is developing," Matthews said. "The award will allow us to accelerate work on the next generation of technology that will enable us to deliver more affordable distributed power generation products worldwide." Results for 12 months ended September 30, 1998 Washington Water Power consolidated revenues for the trailing 12 months ended September 30, 1998, were $3.2 billion, compared with $1.1 billion for the 12-month period ended September 30, 1997. Income from ongoing operations for the period was $81 million, with earnings of $1.45 per share. Income from ongoing operations for the 12 months ended September 30, 1997, was $79 million, with earnings of $1.41 per share. Washington Water Power, with annual revenues of more than $3 billion, is a diversified energy services company with utility and subsidiary operations located throughout North America. Washington Water Power also operates Avista Capital, which owns all the company's non-regulated energy and non-energy businesses. Avista companies include Pentzer Corporation, Avista Energy, Avista Advantage, Avista Labs, WWP Fiber and Avista Development. Washington Water Power's Internet address is WWW.WWPCO.COM and the company's stock is traded under the ticker symbol "WWP." Effective Jan. 1, 1999 the company's new corporate name will be Avista Corp., traded on the New York Stock Exchange under the ticker symbol "AVA." This news release contains forward-looking statements regarding the company's current expectations. These statements are subject to a variety of risks and uncertainties that 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 1997 and the Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 1998. --9864-- 4 THE WASHINGTON WATER POWER COMPANY CONSOLIDATED COMPARATIVE STATEMENTS OF INCOME (UNAUDITED) (Dollars in Thousands except Per Share Amounts)
FOR THE TWELVE MONTHS 3RD QUARTER ENDED SEPTEMBER 30 ----------------------------------- ----------------------------------- 1998 1997 1998 1997 ------------- ------------- ------------- ------------- OPERATING REVENUES $ 1,434,055 $ 295,076 $ 3,167,500 $ 1,095,950 ------------- ------------- ------------- ------------- OPERATING EXPENSES: Resource costs 1,292,871 166,227 2,539,723 534,305 Operations and maintenance 57,868 45,719 207,804 183,422 Administrative and general 30,023 24,606 117,857 90,892 Depreciation and amortization 17,622 16,764 69,070 70,521 Taxes other than income taxes 11,369 12,052 48,847 49,515 ------------- ------------- ------------- ------------- Total operating expenses 1,409,753 265,368 2,983,301 928,655 ------------- ------------- ------------- ------------- INCOME FROM OPERATIONS 24,302 29,708 184,199 167,295 ------------- ------------- ------------- ------------- OTHER INCOME (EXPENSE): Interest expense (17,104) (16,545) (68,470) (64,855) Interest on income tax recovery (Note 1) -- -- -- 47,338 Net gain on subsidiary transactions 48 7,756 7,534 7,900 Other - net 2,342 571 946 5,381 ------------- ------------- ------------- ------------- Total other income (expense) - net (14,714) (8,218) (59,990) (4,236) ------------- ------------- ------------- ------------- INCOME BEFORE INCOME TAXES 9,588 21,490 124,209 163,059 INCOME TAXES 881 8,253 44,389 57,287 ------------- ------------- ------------- ------------- NET INCOME 8,707 13,237 79,820 105,772 DEDUCT - Preferred stock dividend requirements 608 979 3,044 6,348 ------------- ------------- ------------- ------------- INCOME AVAILABLE FOR COMMON STOCK $ 8,099 $ 12,258 $ 76,776 $ 99,424 ============= ============= ============= ============= Average common shares outstanding (thousands) 55,960 55,960 55,960 55,960 EARNINGS PER COMMON SHARE, BASIC AND DILUTED $ 0.14 $ 0.22 $ 1.37 $ 1.78 DIVIDENDS PER SHARE OF COMMON STOCK $ 0.31 $ 0.31 $ 1.24 $ 1.24 SUPPLEMENTAL INFORMATION NET INCOME BY BUSINESS SEGMENT: Energy Delivery and Generation and Resources $ 6,511 $ 7,800 $ 57,054 $ 95,658 National Energy Trading and Marketing $ (345) $ (1,097) $ 11,359 $ (3,614) Non-energy $ 2,541 $ 6,534 $ 11,407 $ 13,728
1 Exhibit 99(b) [WASHINGTON WATER POWER LOGO] NEWS RELEASE CONTACTS: News Media: Rob Strenge-(509) 482-4230, e-mail: rstrenge@wwpco.com INVESTMENT COMMUNITY: DIANE THOREN--(509)482-4331, E-MAIL: DTHOREN@WWPCO.COM FOR IMMEDIATE RELEASE: September 30, 1998 WASHINGTON WATER POWER TO FILE FOR INCREASED ELECTRIC PRICES IN IDAHO EXPECTS TO REQUEST INCREASE OF BETWEEN FIVE AND 10 PERCENT TO BECOME EFFECTIVE IN 1999 - -------------------------------------------------------------------------------- SPOKANE, WASH.: Washington Water Power (NYSE:WWP), soon to be known as Avista Corporation, today notified Idaho regulators of its intent to file later this year for increased electric prices in that state. In a notice filed with the Idaho Public Utilities Commission, the company indicated it intends to seek an overall general electric price increase of between five and 10 percent in a filing to be made on or about December 1, 1998. Washington Water Power has not had an electric general price increase in Idaho since September of 1986, while inflation during the same period has risen nearly 50 percent. Tom Dukich, the company's manager of rates and regulatory affairs, said the company expects to seek an annual revenue increase in Idaho of between $7 million and $12 million. Approximately one-third of Washington Water Power's annual electric revenues are derived from Idaho, where the company serves nearly 100,000 customers. Dukich said the requested price increase, which the company hopes to implement by mid-1999, is necessary because Washington Water Power's earnings in Idaho continue to be below authorized levels. The requested increase is necessary to increase the company's return to an acceptable level, he said. Washington Water Power, with annual revenues of $2 billion, is an energy services company with utility and subsidiary operations located throughout the United States. Washington Water Power also operates Avista Capital, which owns all the company's non-regulated energy and non-energy businesses. Avista Capital companies include Pentzer Corporation, Avista Energy, Avista Advantage, Avista Labs, and WWP Fiber. Washington Water Power's Internet address is WWW.WWPCO.COM and the company's stock is currently traded under the ticker symbol "WWP." On Jan. 1, 1999, Avista Corporation will become the company's new name, with the company's stock traded under the ticker symbol "AVA." Washington Water Power will become an operating division of Avista Corporation. -9857-