Spokane, WA-based Avista Corp. Wednesday reported first quarter 2006 earnings that are three times more than results in the first quarter of last year — $31.6 million, or 64 cents/diluted share, compared with $10.2 million, or 21 cents/diluted share, for the same period in 2005. Avista Utilities reported $26.1 million in earnings compared with $18.9 million the same quarter last year.

Improved hydroelectric conditions and various favorable regulatory moves contributed to the improved earnings, Avista said. “Most significantly, electric resource costs were lower than the amount included in base retail rates,” a company spokesperson said. Both higher-than-anticipated hydro resources and warmer-than-normal temperatures helped drive down the resource costs.

Avista is currently predicting that hydroelectric generation will be 104% of normal this year — a forecast revised upward based on precipitation, temperatures and other variables during the year.

In the first quarter, the utility operations made “good progress” in reducing power and natural gas deferrals by $17.5 million. Avista said that as of the end of March, deferred power and natural gas costs were $95.3 million and $34.8 million, respectively.

Avista CEO Gary Ely attributed the strong quarter to a combination of the earnings growth for both the utility segment and Avista Advantage, and what he called “a return to positive results” by its merchant unit, Avista Energy. “After generally earning below our authorized return for the past several years in our utility operations, we are currently earning close to our authorized return of approximately 9% percent,” Ely said.

Ely affirmed the company’s previous earnings guidance in the range of $1.30/diluted share to $1.45/diluted share. And it expects the utilities to chip in $1.00-1.15/diluted share.

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