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Expressing its disappointment in the commission's decision, the company said it plans to file for rate relief as soon as possible. The Washington Utilities and Transportation Commission concluded that the nature of Avista's filing is by definition a "general" rate case, but the information provided by the company does not comply with applicable rules, Avista said in a statement. In the Production Transmission Update or P/T Update request, Avista included investments in efficiency upgrades at many of its hydroelectric generating units and the continuing upgrades to Avista's 230-kilovolt high voltage transmission system to increase reliability and transmission capability.

Additionally, contributing to the need for the P/T Update are higher operating costs for purchasing and generating electricity to serve Avista's customers. Avista did not request an update to other operating, administrative and distribution costs. The company also said it is disappointed in the commission's decision.

It believes that the P/T Update request, similar in form to other requests filed with the commission, would have provided for timely review and cost recovery while resulting in smaller rate adjustments over time. Included in the P/T Update request, was an increase in electric rates for its Washington customers of an average 8.8%, which was intended to increase revenues by $28.

9 million. An expected customer electric demand for 2007 was also outlined in the request. The company stated that its last general rate case, approved in December 2005, was designed to reflect the costs to serve customers in 2006.

Avista said it is evaluating its options and plans to file for rate relief for it's most recent request, as expeditiously as possible. On December 12, Avista announced that it was selling shares of common stock out of the corporate treasury for the first time in 23 years as part of a financing plan that raised about $220 million. The stock sale, which includes a public offering of 2.

75 million common shares, valued at about $26.12 each, is a significant development for Avista. The company said about $150 million would be from the sale of first mortgage bonds due in 2037, while the rest would be raised from the common stock sales.

Avista also plans to use the money to pay down debts and help pay for upgrades to hydroelectric dams and transmission lines. The proceeds would also help Avista meet a set of Washington state regulations designed to bolster the equity, or net worth, of the company's regulated utility, which provides electricity and natural gas to homes and businesses across Eastern Washington and North Idaho. The AVA shares closed Tuesday regular trading session at $25.

53 on the New York Stock Exchange on an average of 285,819 shares. In the past year, the stock has traded between $17.60 and $27.

52.