Avista cuts back top-level salaries to avoid layoffs

Associated Press

SPOKANE — Avista Corp. is cutting executive salaries, cell phone use and other expenses in an attempt to avoid layoffs.

Executives at the energy and technology corporation will see their pay cut by 15 percent and managers by 5 percent, Avista spokesman Pat Lynch said Thursday. About 175 people will be affected.

Lynch said the company will also curtail credit card, travel and training expenses.

Lynch had no estimate of potential savings. "It will be significant," he said.

The company, whose subsidiaries employ 2,000 workers, announced a hiring freeze in July.

For more than a year, Avista’s biggest subsidiaries — Avista Utilities and Avista Energy — saw electricity and natural gas prices soar to record levels. Since June, however, those prices have plunged.

Avista Energy, the company’s energy-trading subsidiary, has prospered, but Avista Utilities has been whipsawed by the up-and-down prices.

The company has asked Washington and Idaho regulators for electricity rate surcharges to cover the costs of a new generating plant and losses from high wholesale power costs.

If approved, the 36.9 percent surcharge in Washington means an average customer using 1,000 kilowatt-hours per month would pay an additional $16.26. Idaho regulators were asked to approve a 14.7 percent surcharge, or an additional $7.55 per month.

The staff of the Washington Utilities and Transportation Commission called earlier this month for Avista to undergo a full review of expenses and revenue to make sure the rate increase is justified.

Lynch said the belt-tightening is unrelated to the rate cases, which will be the subject of public hearings within the next few weeks.

Avista stock closed at $16.37, down 42 cents, on the New York Stock Exchange on Thursday. It opened at $16.45 Friday.

Credit-rating agencies have downgraded Avista’s bonds and other debt to below investment grade. Bankers have refused to fund continued construction on a natural gas-fired generating plant near Hermiston, Ore.

"There’s tremendous pressure on the company," Lynch said. "We’re trying to do everything we can internally to control the situation."