Avista (AVA) 8-K Avista Corp. Reports Final First Quarter 2007 Results

Exhibit 99.1

Contact:

Media: Jessie Wuerst (509) 495-8578jessie.wuerst@avistacorp.com

Investors: Jason Lang (509) 495-2930jason.lang@avistacorp.com

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Avista Corp. Reports Final First Quarter 2007 Results

SPOKANE, Wash. – May 4, 2007, 4:05 a.m. PDT: Avista Corp. (NYSE: AVA) today reported its final results for the first quarter of 2007, which were consistent with preliminary results reported on April 18, 2007. Avista Corp. had net income of $14.1 million, or $0.26 per diluted share, for the first quarter of 2007, as compared to $31.6 million, or $0.64 per diluted share, for the first quarter of 2006.

Results for the first quarter of 2007 as compared to the first quarter of 2006:

($ in thousands, except per-share data)	Q1 2007			Q1 2006
Operating Revenues	$	459,187		$	499,202
Income from Operations	$	38,937		$	70,938
Net Income	$	14,094		$	31,572
Net Income (Loss) by Business Segment:
Avista Utilities	$	19,927		$	26,172
Energy Marketing & Resource Management	$	(7,623	)	$	5,046
Advantage IQ	$	1,584		$	1,427
Other	$	206		$	(1,073	)
Contribution to earnings per diluted share by Business Segment:
Avista Utilities	$	0.37		$	0.53
Energy Marketing & Resource Management	$	(0.14	)	$	0.10
Advantage IQ	$	0.03		$	0.03
Other	$	—		$	(0.02	)
Total earnings per diluted share	$	0.26		$	0.64

As announced on April 17, 2007, we have entered into an agreement to sell substantially all of Avista Energy’s contracts and ongoing operations to Coral Energy Holding, L.P., a subsidiary of Shell, and certain of Coral Energy’s subsidiaries. Completion of this transaction will effectively end the majority of the operations of the Energy Marketing and Resource Management business segment. We have made all of the necessary regulatory filings related to this transaction.

The attached condensed consolidated statements of income, condensed consolidated balance sheets, and financial and operating highlights are integral parts of this news release.

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 our operating division that provides service to 346,000 electric and 306,000 natural gas customers in three Western states. Our non-regulated subsidiaries include Advantage IQ and Avista Energy. Our stock is traded under the ticker symbol “AVA.” For more information about Avista, please visitwww.avistacorp.com.

Avista Corp. and the Avista Corp. logo are trademarks of Avista Corporation.

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AVISTA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in Thousands except Per Share Amounts)

	First Quarter
	2007			2006
Operating revenues	$	459,187		$	499,202
Operating expenses:
Resource costs		307,713			321,732
Other operating expenses		66,177			62,038
Depreciation and amortization		22,365			22,428
Utility taxes other than income taxes		23,995			22,066
Total operating expenses		420,250			428,264
Income from operations		38,937			70,938
Other income (expense):
Interest expense, net of capitalized interest		(21,067	)		(23,324	)
Other income—net		3,711			2,475
Total other income (expense)—net		(17,356	)		(20,849	)
Income before income taxes		21,581			50,089
Income taxes		7,487			18,517
Net income	$	14,094		$	31,572
Weighted-average common shares outstanding (thousands), basic		52,684			48,795
Weighted-average common shares outstanding (thousands), diluted		53,322			49,305
Total earnings per common share, basic	$	0.27		$	0.65
Total earnings per common share, diluted	$	0.26		$	0.64
Dividends paid per common share	$	0.145		$	0.140

Issued May 4, 2007

AVISTA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in Thousands)

	March 31, 2007		December 31, 2006
Assets
Cash and cash equivalents	$	56,974	$	28,242
Restricted cash		26,237		29,903
Accounts and notes receivable		258,932		286,150
Current energy commodity derivative assets		—		343,726
Assets held for sale		600,962		3,543
Other current assets		259,920		340,710
Total net utility property		2,232,774		2,215,037
Non-utility properties and investments-net		59,955		60,301
Non-current energy commodity derivative assets		—		313,300
Other property and investments-net		60,653		60,030
Regulatory assets for deferred income taxes		104,718		105,935
Regulatory assets for pensions and other postretirement benefits		53,555		54,192
Other regulatory assets		31,578		31,752
Non-current utility energy commodity derivative assets		16,418		25,575
Power and natural gas deferrals		84,110		97,792
Unamortized debt expense		44,895		46,554
Other deferred charges		12,948		13,766
Total Assets	$	3,904,629	$	4,056,508
Liabilities and Stockholders’ Equity
Accounts payable	$	243,910	$	286,099
Current energy commodity derivative liabilities		—		313,499
Current portion of long-term debt		14,607		26,605
Current portion of preferred stock (subject to mandatory redemption)		26,250		26,250
Short-term borrowings		—		4,000
Liabilities held for sale		574,372		—
Other current liabilities		248,947		288,756
Long-term debt		950,053		949,854
Long-term debt to affiliated trusts		113,403		113,403
Non-current energy commodity derivative liabilities		—		309,990
Regulatory liability for utility plant retirement costs		200,665		197,712
Pensions and other postretirement benefits		98,239		100,033
Deferred income taxes		430,393		461,006
Other non-current liabilities and deferred credits		76,516		62,455
Total Liabilities		2,977,355		3,139,662
Common stock—net (52,736,534 and 52,514,326 outstanding shares)		717,938		715,620
Retained earnings and accumulated other comprehensive loss		209,336		201,226
Total Stockholders’ Equity		927,274		916,846
Total Liabilities and Stockholders’ Equity	$	3,904,629	$	4,056,508

Issued May 4, 2007

AVISTA CORPORATION

FINANCIAL AND OPERATING HIGHLIGHTS

(Dollars in Thousands)

	First Quarter
	2007			2006
Avista Utilities
Retail electric revenues	$	151,860		$	145,394
Retail kWh sales (in millions)		2,377			2,292
Retail electric customers at end of period		345,907			339,281
Wholesale electric revenues	$	26,308		$	39,152
Wholesale kWh sales (in millions)		342			474
Sales of fuel	$	8,143		$	30,937
Other electric revenues	$	3,857		$	6,525
Retail natural gas revenues	$	177,573		$	166,961
Wholesale natural gas revenues	$	43,534		$	31,215
Transportation and other natural gas revenues	$	2,991		$	3,106
Total therms delivered (in thousands)		246,734			221,623
Retail natural gas customers at end of period		305,821			298,765
Income from operations (pre-tax)	$	50,154		$	62,912
Net income	$	19,927		$	26,172
Energy Marketing and Resource Management
Gross margin (operating revenues less resource costs)	$	(8,318	)	$	11,415
Realized gross margin	$	12,615		$	5,275
Unrealized gross margin	$	(20,933	)	$	6,140
Income (loss) from operations (pre-tax)	$	(13,581	)	$	6,320
Net income (loss)	$	(7,623	)	$	5,046
Electric sales (millions of kWhs)		4,344			6,979
Natural gas sales (thousands of dekatherms)		26,890			50,162
Advantage IQ
Revenues	$	10,999		$	9,076
Income from operations (pre-tax)	$	2,576		$	2,398
Net income	$	1,584		$	1,427
Other
Revenues	$	4,513		$	5,294
Loss from operations (pre-tax)	$	(212	)	$	(692	)
Net income (loss)	$	206		$	(1,073	)

Issued May 4, 2007