

			Receiving Regulatory Treatment
	Remaining Amortization Period		(1) Earning A Return		Not Earning A Return		(2) Expected Recovery or Refund		Total 2014		Total 2013
Regulatory Assets:
Investment in exchange power-net	2019		$	11,433	$	—	$	—	$	11,433	$	13,883
Regulatory assets for deferred income tax	(3	)	100,412		—		—		100,412		71,421
Regulatory assets for pensions and other postretirement benefit plans	(4	)	—		235,758		—		235,758		156,984
Current regulatory asset for utility derivatives	(5	)	—		29,640		—		29,640		10,829
Unamortized debt repurchase costs	(6	)	17,357		—		—		17,357		19,417
Regulatory asset for settlement with Coeur d’Alene Tribe	2059		47,887		—		—		47,887		49,198
Demand side management programs	(3	)	—		4,603		—		4,603		9,576
Montana lease payments	(3	)	1,984		—		—		1,984		3,022
Lancaster Plant 2010 net costs	2015		1,247		—		—		1,247		2,607
Deferred maintenance costs	2017		—		5,804		—		5,804		5,813
Power deferrals	(3	)	8,291		—		—		8,291		5,065
Regulatory asset for interest rate swaps	(9	)	—		77,063		—		77,063		—
Non-current regulatory asset for utility derivatives	(5	)	—		24,483		—		24,483		23,258
Other regulatory assets	(3	)	2,879		5,663		4,496		13,038		13,282
Total regulatory assets			$	191,490	$	383,014	$	4,496	$	579,000	$	384,355
Regulatory Liabilities:
Natural gas deferrals	(3	)	$	3,921	$	—	$	—	$	3,921	$	12,075
Power deferrals	(3	)	14,186		—		—		14,186		17,904
Regulatory liability for utility plant retirement costs	(7	)	254,140		—		—		254,140		242,850
Income tax related liabilities	(3	)	—		14,534		—		14,534		9,203
Regulatory liability for interest rate swaps	(9	)	—		460		—		460		33,543
Regulatory liability for Spokane Energy	(8	)	—		—		29,028		29,028		25,046
Regulatory liability for rate refunds	(3	)	—		4,275		5,856		10,131		2,490
Other regulatory liabilities	(3	)	5,919		1,309		—		7,228		11,170
Total regulatory liabilities			$	278,166	$	20,578	$	34,884	$	333,628	$	354,281


(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 with 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 Corp. 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 Corp. 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.

(9)

For interest rate swap agreements, each period Avista Utilities records all mark-to-market gains and losses as assets and liabilities and records offsetting regulatory assets and liabilities, such that there is no income statement impact. This is similar to the treatment of energy commodity derivatives described above. Upon settlement of interest rate swaps, the regulatory asset or liability (included as part of long-term debt) is amortized as a component of interest expense over the term of the associated debt.