Summary Of Significant Accounting Policies (Policy)

3 Months Ended

Mar. 31, 2014

Dividends

The payment of dividends on common stock could be limited by:


•	certain covenants applicable to preferred stock (when outstanding) contained in the Company’s Restated Articles of Incorporation, as amended (currently there are no preferred shares outstanding),


•	certain covenants applicable to the Company's outstanding long-term debt and committed line of credit agreements, and


•	the hydroelectric licensing requirements of section 10(d) of the FPA.

Under the covenant applicable to the Company's committed line of credit agreement, which does not permit the ratio of “consolidated total debt” to “consolidated total capitalization” to be greater than 65 percent at any time, the amount of retained earnings available for dividends at March 31, 2014 was limited to approximately $342.9 million.

Appropriated Retained Earnings [Policy Text Block]

Appropriated Retained Earnings

In accordance with the hydroelectric licensing requirements of section 10(d) of the Federal Power Act (FPA), the Company maintains an appropriated retained earnings account for any earnings in excess of the specified rate of return on the Company's investment in the licenses for its various hydroelectric projects. The rate of return on investment is specified in the various hydroelectric licensing agreements for the Clark Fork River and Spokane River. Per section 10(d) of the FPA, the Company must maintain these excess earnings in an appropriated retained earnings account until the termination of the licensing agreements or apply them to reduce the net investment in the licenses of the hydroelectric projects at the discretion of the FERC. The Company calculates the earnings in excess of the specified rate of return on an annual basis. The appropriated retained earnings amounts included in retained earnings were as follows as of March 31, 2014 and December 31, 2013 (dollars in thousands):



	March 31,		December 31,
	2014		2013
Appropriated retained earnings	$	9,714	$	9,714

Nature Of Business

Nature of Business

Avista Corporation is an energy company engaged in the generation, transmission and distribution of electricity and distribution of natural gas, as well as other energy-related businesses. Avista Utilities is an operating division of Avista Corp., comprising the regulated utility operations. Avista Utilities provides electric distribution and transmission, as well as natural gas distribution, services in parts of eastern Washington and northern Idaho. Avista Utilities also provides natural gas distribution service in parts of northeastern and southwestern Oregon. Avista Utilities has generating facilities in Washington, Idaho, Oregon and Montana. The Company also supplies electricity to a small number of customers in Montana, most of whom are employees who operate one of the Montana generating facilities. Avista Capital, Inc. (Avista Capital), a wholly owned subsidiary of Avista Corp., is the parent company of all of the subsidiary companies in the non-utility businesses, except Spokane Energy, LLC (Spokane Energy). Avista Capital’s subsidiaries include Ecova, Inc. (Ecova), an 80.2 percent owned subsidiary as of March 31, 2014. Ecova is a provider of energy efficiency and other facility information and cost management programs and services for multi-site customers and utilities throughout North America. See Note 12 for business segment information.

Basis Of Reporting

Basis of Reporting

The condensed consolidated financial statements include the assets, liabilities, revenues and expenses of the Company and its subsidiaries, including Ecova and other majority owned subsidiaries and variable interest entities for which the Company or its subsidiaries are the primary beneficiaries. Intercompany balances were eliminated in consolidation. The accompanying condensed consolidated financial statements include the Company’s proportionate share of utility plant and related operations resulting from its interests in jointly owned plants.

Taxes Other Than Income Taxes

Taxes other than income taxes include state excise taxes, city occupational and franchise taxes, real and personal property taxes and certain other taxes not based on net income. These taxes are generally based on revenues or the value of property. Utility related taxes collected from customers (primarily state excise taxes and city utility taxes) are recorded as operating revenue and expense and totaled the following amounts for the three months ended March 31 (dollars in thousands):



	2014		2013
Utility taxes	$	19,738	$	17,906

Other Income - Net

Other Income-Net

Other Income-net consisted of the following items for the three months ended March 31 (dollars in thousands):



	2014			2013
Interest income	$	(274	)	$	(258	)
Interest income on regulatory deferrals	(44		)	(13		)
Equity-related AFUDC	(2,034		)	(1,391		)
Net loss on investments	40			398
Other income	(239		)	(881		)
Total	$	(2,551	)	$	(2,145	)

Materials And Supplies, Fuel Stock And Natural Gas Stored

Materials and Supplies, Fuel Stock and Natural Gas Stored

Inventories of materials and supplies, fuel stock and natural gas stored are recorded at average cost for our regulated operations and the lower of cost or market for our non-regulated operations and consisted of the following as of March 31, 2014 and December 31, 2013 (dollars in thousands):



	March 31,		December 31,
	2014		2013
Materials and supplies	$	29,158	$	28,747
Fuel stock	3,639		3,170
Natural gas stored	7		13,029
Total	$	32,804	$	44,946

Investments And Funds Held For Clients And Client Fund Obligations

Investments and Funds Held for Clients and Client Fund Obligations

In connection with the bill paying services, Ecova collects funds from its clients and remits the funds to the appropriate utility or other service provider. Some of the funds collected are invested by Ecova and classified as investments and funds held for clients, and a related liability for client fund obligations is recorded. Investments and funds held for clients include cash and cash equivalent investments, money market funds and investment securities classified as available for sale. Ecova does not invest the funds directly for the clients' benefit; therefore, Ecova bears the risk of loss associated with the investments. Investments and funds held for clients as of March 31, 2014 are as follows (dollars in thousands):



	Amortized Cost (1)		Unrealized Gain (Loss)			Fair Value
Cash and cash equivalents	$	13,618	$	—		$	13,618
Money market funds	23,034		—			23,034
Securities available for sale:
U.S. government agency	55,638		(1,311		)	54,327
Municipal	3,086		23			3,109
Corporate fixed income – industrial	752		11			763
Certificates of deposit	1,000		—			1,000
Total securities available for sale	60,476		(1,277		)	59,199
Total investments and funds held for clients	$	97,128	$	(1,277	)	$	95,851

Investments and funds held for clients as of December 31, 2013 are as follows (dollars in thousands):



	Amortized Cost (1)		Unrealized Gain (Loss)			Fair Value
Cash and cash equivalents	$	16,147	$	—		$	16,147
Money market funds	11,180		—			11,180
Securities available for sale:
U.S. government agency	63,633		(2,555		)	61,078
Municipal	3,497		21			3,518
Corporate fixed income – financial	3,000		—			3,000
Corporate fixed income – industrial	753		12			765
Certificates of deposit	1,000		—			1,000
Total securities available for sale	71,883		(2,522		)	69,361
Total investments and funds held for clients	$	99,210	$	(2,522	)	$	96,688


(1)	Amortized cost represents the original purchase price of the investments, plus or minus any amortized purchase premiums or accreted purchase discounts.

Investments and funds held for clients are classified as a current asset since these funds are held for the purpose of satisfying the client fund obligations. As of March 31, 2014 and December 31, 2013, approximately 94 percent and 95 percent of the investment portfolio, respectively, were rated AA-, Aa3 and higher by nationally recognized statistical rating organizations. All fixed income securities were rated as investment grade as of March 31, 2014 and December 31, 2013.

Ecova management reviews its investments continuously for indicators of other-than-temporary impairment. To make this determination, management employs a methodology that considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds its fair value, management evaluates, among other factors, general market conditions, credit quality of instrument issuers, the length of time and extent to which the fair value is less than cost, and whether it has plans to sell the security or it is more-likely-than not that the Company will be required to sell the security before recovery. Management also considers specific adverse conditions related to the financial health of and specific prospects for the issuer as well as other cash flow factors. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded in earnings and a new cost basis in the investment is established. Based on management’s analysis, securities available for sale do not meet the criteria for other-than-temporary impairment as of March 31, 2014 or December 31, 2013.

The following is a summary of the disposition of available-for-sale securities for the three months ended March 31 (dollars in thousands):



	2014		2013
Proceeds from sales, maturities and calls	$	11,403	$	7,000
Gross realized gains	3		2
Gross realized losses	—		—

Contractual maturities of securities available for sale as of March 31, 2014 and December 31, 2013 are as follows (dollars in thousands):



	Due within 1 year		After 1 but within 5 years		After 5 but within 10 years		After 10 years		Total
March 31, 2014	$	2,235	$	10,508	$	43,460	$	2,996	$	59,199
December 31, 2013	5,382		12,745		48,310		2,924		69,361

Actual maturities may differ due to call or prepayment rights and the effective maturity was 2.9 years as of March 31, 2014 and 3.0 years as of December 31, 2013.

Goodwill

Goodwill arising from acquisitions represents the excess of the purchase price over the estimated fair value of net assets acquired. The Company evaluates goodwill for impairment using a combination of the discounted cash flow model and a market approach on at least an annual basis or more frequently if impairment indicators arise. The Company completed its annual evaluation of goodwill for potential impairment as of December 31, 2013 for Ecova and as of November 30, 2013 for the other businesses and determined that goodwill was not impaired at that time.

The carrying amount of goodwill as of March 31, 2014 and December 31, 2013 are as follows (dollars in thousands):



	Ecova		Other		Accumulated Impairment Losses			Total
March 31, 2014	$	71,011	$	12,979	$	(7,733	)	$	76,257
December 31, 2013	$	71,011	$	12,979	$	(7,733	)	$	76,257

There have been no acquisitions or adjustments to goodwill during the three months ended March 31, 2014. Accumulated impairment losses are attributable to the other businesses.

Other Intangibles

Intangible Assets

Amortization expense related to Intangible Assets was as follows for the three months ended March 31 (dollars in thousands):



	2014		2013
Intangible asset amortization	$	2,776	$	2,579

The following table details the estimated amortization expense related to Intangible Assets for each of the next five years ending December 31 (dollars in thousands):



	Remaining
	2014		2015		2016		2017		2018
Estimated amortization expense	$	7,863	$	8,818	$	7,697	$	6,887	$	4,100

The gross carrying amount and accumulated amortization of Intangible Assets as of March 31, 2014 and December 31, 2013 are as follows (dollars in thousands):



	Estimated	March 31,			December 31,
	Useful Lives	2014			2013
Client relationships	2 - 12 years	$	33,562		$	33,562
Software development costs	3 - 7 years	41,146			39,327
Other	1 - 10 years	3,312			3,321
Total intangible assets		78,020			76,210
Client relationships accumulated amortization		(13,347		)	(12,336		)
Software development costs accumulated amortization		(23,437		)	(21,861		)
Other accumulated amortization		(2,626		)	(2,437		)
Total accumulated amortization		(39,410		)	(36,634		)
Total intangible assets - net		$	38,610		$	39,576

As of March 31, 2014 and December 31, 2013, all of the intangible assets reported above are associated with Ecova.

Derivative Assets And Liabilities

Derivative Assets and Liabilities

Derivatives are recorded as either assets or liabilities on the Condensed Consolidated Balance Sheets measured at estimated fair value. In certain defined conditions, a derivative may be specifically designated as a hedge for a particular exposure. The accounting for a derivative depends on the intended use of such derivative and the resulting designation.

The Washington Utilities and Transportation Commission (UTC) and the Idaho Public Utilities Commission (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 delivery. The orders provide for Avista Utilities to not recognize the unrealized gain or loss on utility derivative commodity instruments in the Condensed Consolidated Statements of Income. Realized gains or losses are recognized in the period of delivery, 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 Energy Recovery Mechanism (ERM) in Washington, the Power Cost Adjustment (PCA) mechanism in Idaho, and periodic general rates cases. Regulatory assets are assessed regularly and are probable for recovery through future rates.

Substantially all forward contracts to purchase or sell power and natural gas are recorded as derivative assets or liabilities at estimated fair value with an offsetting regulatory asset or liability. Contracts that are not considered derivatives are accounted for on the accrual basis until they are settled or realized, unless there is a decline in the fair value of the contract that is determined to be other-than-temporary.

Fair Value Measurements

Fair value represents the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Energy commodity derivative assets and liabilities, investments and funds held for clients, deferred compensation assets, as well as derivatives related to interest rate swap agreements and foreign currency exchange contracts, are reported at estimated fair value on the Condensed Consolidated Balance Sheets. See Note 9 for the Company’s fair value disclosures.

Regulatory Deferred Charges And Credits

Regulatory Deferred Charges and Credits

The Company prepares its condensed consolidated financial statements in accordance with regulatory accounting practices because:


•	rates for regulated services are established by or subject to approval by independent third-party regulators,


•	the regulated rates are designed to recover the cost of providing the regulated services, and


•	in view of demand for the regulated services and the level of competition, it is reasonable to assume that rates can be charged to and collected from customers at levels that will recover costs.

Regulatory accounting practices require that certain costs and/or obligations (such as incurred power and natural gas costs not currently included in rates, but expected to be recovered or refunded in the future) are reflected as deferred charges or credits on the Condensed Consolidated Balance Sheets. These costs and/or obligations are not reflected in the Condensed Consolidated Statements of Income until the period during which matching revenues are recognized. If at some point in the future the Company determines that it no longer meets the criteria for continued application of regulatory accounting practices for all or a portion of its regulated operations, the Company could be:


•	required to write off its regulatory assets, and


•	precluded from the future deferral of costs not recovered through rates at the time such costs are incurred, even if the Company expected to recover such costs in the future.

Redeemable Noncontrolling Interests [Policy Text Block]

Redeemable Noncontrolling Interests

Certain option holders of Ecova have the right to put their shares back to Ecova at their discretion during an annual put window. Stock options and other outstanding redeemable stock are valued at their maximum redemption amount which is equal to their intrinsic value (fair value less exercise price).

Contingencies

The Company has unresolved regulatory, legal and tax issues which have inherently uncertain outcomes. The Company accrues a loss contingency if it is probable that a liability has been incurred and the amount of the loss or impairment can be reasonably estimated. The Company also discloses losses that do not meet these conditions for accrual, if there is a reasonable possibility that a loss may be incurred.

Accumulated Other Comprehensive Loss [Policy Text Block]

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, net of tax, consisted of the following as of March 31, 2014 and December 31, 2013 (dollars in thousands):



	March 31,			December 31,
	2014			2013
Unfunded benefit obligation for pensions and other postretirement benefit plans - net of taxes of $(2,220) and $(2,280), respectively	$	(4,122	)	$	(4,233	)
Unrealized loss on securities available for sale - net of taxes of $(474) and $(936), respectively	(803		)	(1,586		)
Total accumulated other comprehensive loss	$	(4,925	)	$	(5,819	)

The following table details the reclassifications out of accumulated other comprehensive loss by component for the three months ended March 31 (dollars in thousands):



	Amounts Reclassified from Accumulated Other Comprehensive Loss
Details about Accumulated Other Comprehensive Loss Components	2014			2013			Affected Line Item in Statement of Income
Realized gains on investment securities	$	3		$	2		Other income-net
	3			2			Total before tax
	(1		)	(1		)	Tax expense
	$	2		$	1		Net of tax
Amortization of defined benefit pension items
Amortization of net loss	$	(1,952	)	$	(4,891	)	(a)
Adjustment due to effects of regulation	1,782			4,608			(a)
	(170		)	(283		)	Total before tax
	59			99			Tax benefit
	$	(111	)	$	(184	)	Net of tax


(a)	These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 6 for additional details).