Item 8.01 Other Events.

At the 2006 Annual Meeting of Shareholders, the shareholders of Avista Corporation (Avista Corp. or the Company) approved a proposal to proceed with a statutory share exchange, which would have changed the Company's organization to a holding company structure. Subsequently, Avista Corp. received approval from the Federal Energy Regulatory Commission, conditioned on approval by the state regulatory agencies. The Company also received approval from the Washington Utilities and Transportation Commission (WUTC) and the Idaho Public Utilities Commission (IPUC), having reached agreement with staffs of those commissions and other parties, as to the terms of various proposed financial and other conditions and commitments on the part of the Company and the proposed new holding company. The Company was unable, however, to reach agreement on acceptable terms and conditions with interested parties in proceedings before the Public Utility Commission of Oregon (OPUC).

At the August 14, 2009 meeting of the Avista Corp. Board of Directors, the Board of Directors concluded that the conditions and commitments proposed by the OPUC staff would present risks and uncertainties related to the future issuance of equity capital such that it would not be in the best interests of the Company's shareholders, or the Company's customers, to accept such conditions. Therefore, the Board of Directors determined that the consummation of the statutory share exchange would not be in the best interests of the Company or its shareholders and, accordingly, abandoned the plan of share exchange and related transactions.

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