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Avista Utilities 2007-2008 Winter Outlook

Avista Utilities 2007-2008 Winter Outlook. WUTC October 10, 2007 Kevin Christie. Bearish Storage balances are higher than the five year average and are near record levels Lack of hurricanes/weather Supply appears stable and drilling levels remain high Economy . Bullish

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Avista Utilities 2007-2008 Winter Outlook

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  1. Avista Utilities 2007-2008 Winter Outlook WUTC October 10, 2007 Kevin Christie

  2. Bearish Storage balances are higher than the five year average and are near record levels Lack of hurricanes/weather Supply appears stable and drilling levels remain high Economy Bullish Oil prices pressure natural gas prices High cost of drilling/production Increased gas-fired generation REX – Rockies gas going East Decline in Canadian gas imports due to declining production and Canadian consumption Market Fundamentals

  3. November – October Forward Prices50/25/25 AECO/Sumas/Rockies Blend Source: Nymex Sept 28, 2005, 2006, 2007

  4. November 2007 – March 2008 Average Winter Forward Prices50/25/25 AECO/Sumas/Rockies Blend Min: $6.31 Max: $8.47 Avg: $7.66

  5. Avista’s Recent PGA Filing • Proposed 5.8% overall decrease • The residential rate will decrease by 7.6 cents to $1.11414 • A residential customer using an average of 70 therms per month will see a decrease of $5.32 in their monthly bill • WACOG largely unchanged from prior year • Amortization rate decreases 6.7 cents/therm • Includes the settled NWP rate increase. The GTN rate case had not been settled at the time of the PGA filing

  6. Hedges Fixed price purchases made since February 2007 Diversified by transaction date, tenor and source of supply Includes three year, annual, seasonal, and monthly purchases Resources Available to Serve WA/ID Average Winter Load

  7. Index Purchases made prior to the beginning of each month Price based on published indices Hedges Resources Available to Serve WA/ID Average Winter Load 18% 65%

  8. JP Storage Gas injected since spring Current balance is 2.9 Bcf at a weighted average cost of $4.61 Index Hedges Resources Available to Serve WA/ID Average Winter Load 17% 18% 65%

  9. Peak day planning assumes Avista experiences the coldest day on record, an average daily temperature of 17 degrees below zero On that peak day, additional gas needs are met through increased storage withdrawals All supplies are served via firm transportation WA/ID Peak vs. Winter Average Winter Load 58% Storage 17% Index 18% 10% 32% 65% Hedges

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