

			Receiving Regulatory Treatment
	Remaining Amortization Period		(1) Earning A Return		Not Earning A Return		(2) Expected Recovery		Total 2012		Total 2011
Regulatory assets:
Investment in exchange power-net	2019		$	16,333	$	—	$	—	$	16,333	$	18,783
Regulatory assets for deferred income tax	(3	)	79,406		—		—		79,406		84,576
Regulatory assets for pensions and other postretirement benefit plans	(4	)	—		—		306,408		306,408		260,359
Current regulatory asset for utility derivatives	(5	)	—		35,082		—		35,082		69,685
Unamortized debt repurchase costs	(6	)	21,635		—		—		21,635		23,037
Regulatory asset for settlement with Coeur d’Alene Tribe	2059		50,509		—		—		50,509		52,463
Demand side management programs	(3	)	—		2,579		—		2,579		798
Montana lease payments	(3	)	4,059		—		—		4,059		5,096
Lancaster Plant 2010 net costs	2015		3,967		—		—		3,967		5,327
Deferred maintenance costs	2016		—		6,312		—		6,312		—
Regulatory asset for interest rate swaps	2013		—		1,406		—		1,406		18,895
Non-current regulatory asset for utility derivatives	(5	)	—		25,218		—		25,218		40,345
Other regulatory assets	(3	)	5,053		3,986		4,678		13,717		14,313
Total regulatory assets			$	180,962	$	74,583	$	311,086	$	566,631	$	593,677
Regulatory Liabilities:
Oregon Senate Bill 408	2012		$	—	$	—	$	—	$	—	$	772
Natural gas deferrals	(3	)	6,917		—		—		6,917		12,140
Power deferrals	(3	)	27,323		—		—		27,323		13,692
Regulatory liability for utility plant retirement costs	(7	)	234,128		—		—		234,128		227,282
Income tax related liabilities	(3	)	—		17,206		—		17,206		18,607
Regulatory liability for interest rate swaps	2014-2015		—		7,265		—		7,265		—
Regulatory liability for Spokane Energy	(8	)	—		—		21,488		21,488		19,902
Other regulatory liabilities	(3	)	2,718		1,598		—		4,316		5,534
Total regulatory liabilities			$	271,086	$	26,069	$	21,488	$	318,643	$	297,929


(1)	Earning a return includes either interest on the regulatory asset/liability or a return on the investment as a component of rate base at the allowed rate of return.


(2)	Expected recovery is pending regulatory treatment including regulatory assets and liabilities that have prior regulatory precedence.


(3)	Remaining amortization period varies depending on timing of underlying transactions.


(4)	As the Company has historically recovered and currently recovers its pension and other postretirement benefit costs related to its regulated operations in retail rates, the Company records a regulatory asset for that portion of its pension and other postretirement benefit funding deficiency.

(5)

The UTC and the IPUC issued accounting orders authorizing Avista Utilities to offset commodity derivative assets or liabilities with a regulatory asset or liability. This accounting treatment is intended to defer the recognition of mark-to-market gains and losses on energy commodity transactions until the period of settlement. The orders provide for Avista Utilities to not recognize the unrealized gain or loss on utility derivative commodity instruments in the Consolidated Statements of Income. Realized gains or losses are recognized in the period of settlement, subject to approval for recovery through retail rates. Realized gains and losses, subject to regulatory approval, result in adjustments to retail rates through purchased gas cost adjustments, the ERM in Washington, the PCA mechanism in Idaho, and periodic general rates cases.

(6)

For the Company’s Washington jurisdiction and for any debt repurchases beginning in 2007 in all jurisdictions, premiums paid to repurchase debt are amortized over the remaining life of the original debt that was repurchased or, if new debt is issued in connection with the repurchase, these costs are amortized over the life of the new debt. In the Company’s other regulatory jurisdictions, premiums paid to repurchase debt prior to 2007 are being amortized over the average remaining maturity of outstanding debt when no new debt was issued in connection with the debt repurchase. These costs are recovered through retail rates as a component of interest expense.


(7)	This amount is dependent upon the cost of removal of underlying utility plant assets and the life of utility plant.


(8)	Consists of a regulatory liability recorded for the cumulative retained earnings of Spokane Energy that the Company will flow through regulatory accounting mechanisms in future periods.