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Business Update

Boston/New York City

March 2006

NYSE: AVA

www.avistacorp.com

Exhibit 99.1

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Corporate Summary

Regulated

Non-regulated

Energy company involved in the production,

transmission and distribution of energy as well as

other energy-related businesses

Incorporated in 1889 and headquartered in

Spokane, Washington

Avista Utilities is a company operating division

comprising the regulated utility operations that

provides electric and natural gas service to

customers in Washington, Idaho and Oregon

Avista Advantage is a business process outsourcer

that provides facilities resource management

Avista Energy provides electricity, natural gas and

hydroelectric portfolio optimization and

management, as well as risk management services

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Avista Utilities

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Electric and Natural Gas Service Areas

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Results

7,418 new electric customers

10,326 new natural gas customers

Extended service to:

3,754 electric lots

8,943 gas lots

0

3,000

6,000

9,000

12,000

15,000

18,000

21,000

2001

2002

2003

2004

2005

Electric

Gas

2005 Customer Growth

Record number of electric hookups

Adding these new customers created:

37 miles of new conductor

150 miles of new gas main

17,744 new meters to be read

2,946 new transformers

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Integrated Resource Plan (IRP)

Acquiring additional transmission is critical to the Company’s plans

Over half of future energy needs are met with renewables, plant upgrades and conservation

Energy and capacity deficits begin in 2010 and 2009, respectively

Avista’s 2005 IRP calls for acquisition of 69 MW of conservation, 400 MW of wind, 80 MW of other

renewable resources, 52 MW of hydroelectric efficiency upgrades and 250 MW of coal-based generation

over a period of ten years

Contract

8%

Other Renews

2%

Coal

11%

Hydro

Upgrades

1%

Hydro

52%

Gas

26%

2006 Resource Mix

Gas

22%

Hydro

42%

Hydro

Upgrades

2%

Coal

19%

Other Renews

5%

Contract

3%

DSM

3%

Wind

4%

2016 Resource Mix

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2006 Utility Capital Expenditures

$160 million in CapEx equates to an additional $80 million to net rate base

$160.0 million Total CapEx

230 kV

Upgrades $29.2

Other $6.7

IS/IT & Security

$9.9

Gas $11.1

Environmental

$9.9

Growth $40.4

T&D $25.7

Generation

$27.1

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Transmission System Upgrades

19

of

30

projects

fully

commissioned

(63%)

50 of 115 miles of 230 kV line constructed

4 of 6 –

230 kV substations energized

90 of 200 miles of F/O cable installed

Total project cost is approximately $120 million through 2007

230 kV Construction Schedule and Cost Trend

Palouse 230 Line

Lolo Substation

Beacon-Bell 230 Lines

$29,200

2006

$20,835

2007

Benewah Substation

Fiber Optic and C. Fork RAS

$21,926

2004

$27,104

2005

$21,041

230 kV Upgrade Total CapX

Boulder Sub & 230 Lines

Dry Creek Sub & 230 Lines

Beacon-Rathdrum Line

2003

Palouse 230 Line

Lolo Substation

Beacon-Bell 230 Lines

$29,200

2006

$20,835

2007

Benewah Substation

Fiber Optic and C. Fork RAS

$21,926

2004

$27,104

2005

$21,041

230 kV Upgrade Total CapX

Boulder Sub & 230 Lines

Dry Creek Sub & 230 Lines

Beacon-Rathdrum Line

2003

($ thousands)

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Hydro Upgrades

Noxon

Rapids Runner Upgrade

Noxon Rapids is Avista’s largest hydro project

Upgrade Units 1-4 to improve efficiency, reliability and

eliminate operating restrictions

Replace turbine runners on Units 1-4

Requires $31.4 million of capital over the

next seven years

Requires $1.4 million for maintenance over

the same period

Noxon

Rapids capacity improvements

Maximum capacity is 554 MW; currently

at 532 MW due to operating restrictions

Upgrade expected to restore maximum capacity, improve

unit availability and add an additional

16 MW

Total plant increased to 570 MW

Noxon Rapids Dam

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Advanced Meter Reading (AMR)

Oregon

93,000 gas meters installed

Oregon granted a 35% Business Tax Credit on a portion

of the cost of the project

Idaho

Completed installation of 112,000 electric and gas

meters in 2005; additional 60,000 to install through 2008

IPUC pre-approved $16 million, four-year project,

including current return on investment

CapEx Dedicated to AMR

(in millions)

$2.3

$8.4

$8.7

2004

2005

2006

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Phase I: Gas service and collections company-wide, gas compliance Oregon

Phase II: Gas compliance in WA/ID, electric service workers company-wide

Phase II: Excludes construction crews & CPCs

Mobile Dispatch

Process improvements unlocks expense savings

N/A

$700,000 Approved

Energy Business Tax Credit

$0.4 million

$0.4 million

Expense Increase

$0.8 million

$1.3 million

Average Annual Benefit

$1.6 million

$2.8 million

Capital Expenditures

63

68

Mobile Users

Phase II

Estimate

Phase I

Category

Field worker to dispatcher ratio is currently at 8:1

Phase I target ratio is 14:1

Phase II target ratio is 43:1

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Avista Utilities

Regulatory Update

Authorized

48%

10.25%

8.88%

Oregon Natural Gas

(implemented in October 2003)

43%

40%

Common

Equity

Level

Return

on

Equity

Rate of

Return

Jurisdiction and service

10.40%

9.25%

Idaho Electric and Natural Gas

(implemented in September 2004)

10.40%

9.11%

Washington Electric and Natural Gas

(implemented in January 2006)

$67 million

$63 million

$447 million

$136 million

$801 million

Gas

Gas

Electric

Gas

Electric

Oregon

Idaho

Washington

Rate Base

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Washington ERM

*

Idaho PCA

Power

Supply

Costs

in

Base

Rates

$0

+ $9 Million

-

$9 Million

90/10 Sharing

90/10 Sharing

Power

Supply

Costs

in

Base

Rates

$0

90/10 Sharing

90/10 Sharing

Avista Utilities

Electric Power Cost Mechanism

*

On

January

31,

2006

Avista

filed

with

the

WUTC

to

review

the

ERM

and

eliminate

the

$9

million

deadband.

The Commission has made a commitment to expedite the process. Any changes made to the ERM will be

effective January 1, 2006.

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Avista Advantage

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Facility Information and Expense Management Services for Utilities,

Telecom and Waste

3

2

1

ENHANCED SERVICES

Post payment analysis, leverage data

and execute strategies.

Rate Optimization, Contract Management, Energy Supply

Management, Network Planning, Usage Trending,

Executive Reporting and EPA Energy Star Measurement.

AUDIT & REPORTING

Validate invoices, identify and resolve

errors, optimize services.

Bill and Service Rate Accuracy, Initial Recovery Audit,

Inventory Tracking and Management, Online Reports and

Measurements.

PROCESS & PAY

Receive, enter and scan invoices, cost

allocate, issue vendor payments.

Bill Receipt, Processing and Payment, Expense

Management

Avista Advantage

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Avista Advantage

Avista Advantage has

penetration

in

virtually all market

segments; industry

penetration is

approximately 18%.

All Clients by Market Segment

Health & Med

6%

Government

7%

Big Box

9%

Retail Food

17%

Industrial

19%

Financial

Services

4%

Multi-Site

Retail

21%

Hospitality &

Property Mgt

14%

Grocery

3%

Client sampling:

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Provides services for more than 175,000 Client sites throughout the

United States

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Avista Advantage

Net Income

Revenue

Avista Advantage’s

revenues increased

by 35% for 2005, as

compared to 2004.

.

$(4,500,000)

$(3,500,000)

$(2,500,000)

$(1,500,000)

$(500,000)

$500,000

$1,500,000

$2,500,000

$3,500,000

$4,500,000

2002

2003

2004

2005

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

2002

2003

2004

2005

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Avista Advantage

Sites Billed

$ Value of Bills Processed

Total Accounts

The number of billed

sites increased by

approximately 33,000,

or 25% in 2005.

$-

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

$5,000,000,000

$6,000,000,000

$7,000,000,000

$8,000,000,000

$9,000,000,000

$10,000,000,000

2002

2003

2004

2005

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

2002

2003

2004

2005

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2002

2003

2004

2005

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Avista Energy

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Saskatchewan

Medford

Mid-Columbia

Malin

COB

Spokane

AECO

Sumas

Stanfield

Lancaster

(270mw)

British Columbia

Alberta

Jackson  Prairie

Storage

John

Day

Chelan

(2.6 BCF)

Kingsgate

Teck

Cominco

Clark Co.

PUD

To Rockies

Montana

Idaho

Oregon

Washington

Saskatchewan

Medford

Mid-Columbia

Malin

COB

COB

Spokane

AECO

Sumas

Stanfield

Lancaster

(270mw)

British Columbia

Alberta

Jackson  Prairie

Storage

John

Day

Chelan

(2.6 BCF)

Kingsgate

Teck

Cominco

Clark Co.

PUD

To Rockies

Montana

Idaho

Oregon

Washington

Electricity

Transmission

BPA

PGE

Hydro facilities

Chelan Co

PUD

Teck

Cominco

Location

Spread

Time

Spread

Gas

Pipeline transport

NEGT

NW Pipeline

Natural gas storage

Jackson Prairie

Natural gas-fired generation

* Lancaster Project

* Clark County PUD

Inter-commodity Spread

Electricity

Transmission

BPA

PGE

Hydro facilities

Chelan Co

PUD

Teck

Cominco

Location

Spread

Time

Spread

Gas

Pipeline transport

NEGT

NW Pipeline

Natural gas storage

Jackson Prairie

Natural gas-fired generation

* Lancaster Project

* Clark County PUD

Inter-commodity Spread

Avista Energy

Energy Marketing and Resource Management

$0.47

2002

$(0.18)

2005

$0.20*

2004

$0.43*

2003

$1.33

2001

Earnings per

Diluted Share

Long-term contract rights to physical assets in the West

Generation, transmission, pipelines and storage

*

Includes Avista Power asset impairment write-down of

$(0.06) per share in 2003 and $(0.07) in 2004.

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Avista Energy

Key Contractual Assets and Strategic Agreements

Power Generation and Transmission

Lancaster 270 MW CCCT power project

250 MW of NW point-to-point transmission (BPA)

200 MW of firm AC intertie transmission capacity

Chelan PUD: real-time management of 2000 MW hydro system

Teck-Cominco: 450 MW hydro optimization

Clark PUD: 280 MW CCCT optimization

Barrick

Goldstrike

Mines: 115 MW thermal optimization

Columbia Power Corporation: 70 MW hydro optimization in 2007

Natural Gas

Jackson Prairie Natural Gas Storage

(2.7 million MMBtu’s working capacity; 100,000 MMBtu’s per day)

Nova/ANG/GTN: long-term natural gas transport

250 plus end-user customers and growing

Clark County PUD: fuel manager (48,000 m/day)

City

of

Ellensburg:

utility

operations

(storage,

transportation,

commodity,

scheduling)

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Financial

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Capital Expenditures

($ millions)

0

50,000

100,000

150,000

200,000

250,000

2002

2003

2004

2005

2006 Target

Avista Utilities

Energy Marketing & Resource Management

Avista Advantage & Other

Coyote Springs 2

$84

$106

$118

$218

$160

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Consolidated Earnings

$0.20

$0.60

$0.89

$0.72

$0.92

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

2001

2002

2003

2004

2005

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2006 Earnings Guidance

$(0.05)

Other

$0.10-$0.12

Avista Advantage

$0.20-$0.30

Energy Marketing & Resource Management

$1.00-$1.15

Avista Utilities

$1.30-$1.45

Consolidated

2006

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