Avista Corp. Selects AT&T for New Suite of Voice and Data Services

Spokane, Washington, West Palm Beach, Florida, May 4, 2007

AT&T Inc. (NYSE: T) announced today that Avista Corp. (NYSE:AVA) has extended and expanded its agreement with AT&T for an additional three-year $1.5 million contract. Under the terms of the agreement, AT&T will provide Avista with a suite of voice and data services.

A leading energy company involved in the production, transmission, and distribution of energy and other energy-related businesses, Avista is a strong believer in using technology as a component in managing its electric and gas business. For example, Avista uses wireless devices to read customers' meters; that information then feeds to the AT&T data network and, ultimately, into Avista's corporate center. This has improved productivity, mobile dispatching for gas service, and efficiencies to provide outstanding service to its customers.

AT&T delivered a solution to move Avista's applications to an IP-enabled network with increase bandwidth at selected sites. The improved engineering will allow Avista's voice applications to co-exist with its data, providing the company with converged network services. The benefit to Avista is that it can use existing infrastructure to add new applications and ensure cutting-edge services to its customers.

When customers call Avista, the calls come through the AT&T Advanced Features network into Avista's call centers and are then evenly distributed throughout the region to create less customer wait time. To support Avista's online services, online requests come through AT&T's IP connection, which frees up Avista's network and allows for faster transactions.

"Our two companies have a long-standing relationship because AT&T has provided reliable and cost-effective solutions that meet the needs of Avista's business," said Jim Corder, Avista's director of IT infrastructure. "As our business continues to evolve, AT&T has been in stride with us by providing new technologies that facilitate our growth, and this new solution is no exception. The MPLS network will connect 35 locations more efficiently while delivering cost savings."

The agreement renews and expands a relationship between the two companies that spans more than 15 years.

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About Avista
Avista Corp. is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is a company operating division that provides service to 346,000 electric and 305,000 natural gas customers in three western states. Avista's non-regulated subsidiaries include Advantage IQ and Avista Energy. Avista Corp.'s stock is traded under the ticker symbol "AVA." For more information about Avista, please visit www.avistacorp.com. Avista Corp. and the Avista Corp. logo are trademarks of Avista Corporation.

About AT&T
AT&T Inc. is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world's most advanced IP-based business communications services and the nation's leading wireless, high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at www.att.com.

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