1. OPUC Natural Gas Outlook 2014 July 8, 2014

2. -18

5. PeriodAECO Price Cash$4.14 Winter 2014$4.46 Winter 2015$3.95 Winter 2016$3.98 Winter 2017$4.16

6. US Storage Balances

8. Natural Gas Procurement Plan Goal – To provide reliable supply at stable and competitive prices in an expected volatile market Premise - Avista cannot accurately predict future natural gas prices, but market conditions and experience help shape our overall approach Components: The Plan utilizes a mix of index, fixed price, and storage transactions Transaction Dates: Hedge windows are developed to distribute the transactions throughout the Plan Supply Basins: Plan to utilize the lowest pricing point for hedging – typically AECO Delivery Periods: Hedges are completed in annual, seasonal and monthly timeframes. Discretionary long-term hedges may be also be executed.

9. Note: Hedged includes long term and prompt year hedges executed prior to June 2014. Planned hedges, storage, and index are a basin weighted 60 day average forward price as of June 23, 2014. PGA Commodity Cost Component Comparison

10. Anatomy of the PGA Estimates – as of July 1 10 Removal of previous years demand credit (credit eliminated – net 6% increase to PGA) Demand Charge Change Market related commodity change (includes hedges and storage) PGA Expected to Increase