3. Procedural Background

A Prehearing Conference in this matter was conducted on November 30, 2004, at which time the parties reported that settlement discussions were in progress. Avista stated that it had notified customers of the proposed acquisition through newspaper advertisements. It was asked to include an announcement of the proposal in a bill insert approved by the Commission's Public Advisor, and this was subsequently done. No customer has protested the proposed transaction.

On January 11, 2005, the parties filed a settlement agreement and jointly moved for its approval. A settlement hearing was conducted on January 14, 2005, in which three witnesses described the terms of the proposed acquisition and the settlement and answered questions posed by the Administrative Law Judge (ALJ) and an Energy Division advisor. At the conclusion of the settlement hearing, the proceeding was deemed submitted to the Commission for decision.