Avista will lead a smart grid demonstration project that will create the first "smart community" in the Pacific Northwest. Matching funds for the $38 million project are part of a U.S. Department of Energy grant for a larger $178 million regional project which is administered by Battelle.

Avista will team up with several regional entities for the Pullman, Wash., project. Participants include the City of Pullman, Schweitzer Engineering Laboratories, Washington State University, Itron, Hewlett Packard and Spirae. Avista's portion of the matching funds will be $12.9 million.

The project involves automation of many parts of the electric distribution system using advanced metering, enhanced utility communication and other elements of smart grid technologies. Once the work is completed, customers in the City of Pullman and the nearby Town of Albion are expected to experience greater reliability, shorter outage times and access to their own energy use information, allowing them to better manage energy expenses.

"This project will demonstrate the viability of modernizing our electric system with proven technology, and it will prepare us for things to come in the future," said Scott Morris, Avista chairman, president and CEO.

"I have to especially thank Senator Maria Cantwell for her outstanding leadership in making smart grid a national priority," Morris added. "I would also like to express my appreciation to the rest of our congressional delegation and to Governor Chris Gregoire for their support on this initiative."

The project is expected to help move the region and the nation closer to establishing a more efficient and effective electricity infrastructure that is intended to help contain costs, reduce emissions, incorporate more wind power and other types of renewable energy, increase power grid reliability and provide greater flexibility for consumers.

Work is expected to begin by the end of 2009 and should be completed in 2014.