Avista OKs transformation

Avista Corp. shareholders approved a plan to change the company’s corporate structure to a holding company.

The company announced the vote Thursday during its annual meeting.

Executives say operating as a holding company will allow greater autonomy for Avista’s various operating units, including its regulated utility. The change is expected to have little effect on the day-to-day operations of the company’s current business.

The new structure comes amid a brighter financial picture for the company.

Gary Ely, Avista’s chairman and chief executive officer, told shareholders that their company is recovering from the West Coast electricity crisis of several years ago.

The company is paying down debt, earning profits, reinvesting in its property and equipment, and enjoying a modest rise in stock price.

He said the last few years were a challenge, but the company is on a quick pace so far in 2006.

The meeting lasted about an hour. About 100 people attended and there were few questions.

Doug Kilgore, executive director of the Worker Owner Council of Washington State, which helps invest the retirement funds of building and trades unions, asked Ely and the board to consider changing the way people are elected to the board of directors. Kilgore’s group, which has about $200 billion invested in large American companies on behalf of its members’ retirement plans, urged Avista to adopt a policy that a director needs to collect more than half the votes cast to be elected. Directors are now elected with a simple plurality of the vote.

Kilgore urged Avista to consider the change, which has been adopted by companies such as Dell Inc., Safeway Inc., Intel Corp. and many others.

And Rachael Paschal Osborn repeated a Sierra Club request of Avista that the company prepare an economic study that would evaluate its Spokane River dams in a broader way.

“What we seek is not simply a tally of revenues versus costs of operation,” she said to Ely during the time allotted for comments and questions from shareholders. “Rather, our community needs a study that explores the true costs and benefits of the dams, to the corporation and the region as a whole.”

She singled out the Long Lake Dam, the last of Avista’s six on the Spokane River, for specific criticism.

The poor quality of the Lake Spokane reservoir pooled behind the dam, she said, has been a factor forcing cities to spend millions of dollars on sewage treatment upgrades.

She said a free-flowing river instead of the reservoir would reduce water quality problems and thus ease the financial burden on local governments.

Scott Morris, president of Avista’s regulated utility division, recounted the company’s efforts to amicably resolve Spokane River issues so that the company can win a new relicensing agreement from the Federal Energy Regulatory Commission to manage the river and operate its dams.

He said Avista was a key driver behind the effort to ban the sale of detergents with phosphates in Washington state.

The relicensing process features multiple studies and includes diverse interests, such as environmental and conservation groups, Native American tribal governments, multiple federal and state government agencies, cities, counties, businesses and others.