The request is for a surcharge of 36.9 percent in Washington and 14.7 percent in Idaho. The proposed surcharge would be applied as a uniform percentage increase to the rates for all customer classes in each state.

The surcharge in each state would begin on Sept. 15. Avista has requested that the surcharge continue until the end of 2003. However, if conditions allow, the surcharge could be removed sooner.

"We know this will be difficult for many of our customers and we have taken extraordinary steps to avoid this request. But the volatile energy markets we have experienced in recent months have required us to ask for a price increase," Avista Utilities President Scott Morris explained in a written statement. "We must ensure that our company has sufficient resources to maintain cashflow, obtain needed financing and thereby provide adequate and reliable energy supplies for our service area."

As of June 30, 2001, Avista had deferred more than $140 million in costs for energy purchased on the wholesale market. Deferred power costs are cash expenses that Avista has incurred in acquiring power from the marketplace for its retail customers, but not recovered in rates, thereby limiting Avista's ability to meet ongoing cash needs and other financial obligations. The deferral balances continue to grow and are expected to reach $267 million by the end of 2001 unless rate relief is granted.