AMENDMENT NO. 8 TO RECEIVABLES PURCHASE AGREEMENT

EXHIBIT 10.1

EXECUTION VERSION

AMENDMENT NO. 8

TO

RECEIVABLES PURCHASE AGREEMENT

THIS AMENDMENT NO. 8 TO RECEIVABLES PURCHASE AGREEMENT dated as of March 13, 2009 (this “ Amendment ”) is entered into among AVISTA RECEIVABLES CORP. (the “ Seller ”), AVISTA CORPORATION (the “ Servicer ”), RANGER FUNDING COMPANY LLC (formerly known as Receivables Capital Company LLC) (the “ Conduit Purchaser ”) and BANK OF AMERICA, N.A., as “Committed Purchaser” (in such capacity, the “ Committed Purchaser ”) and as “Administrator” (in such capacity, the “ Administrator ”) under the Receivables Purchase Agreement defined below. Capitalized terms used herein but not defined herein shall have the meanings provided in such Receivables Purchase Agreement.

W I T N E S S E T H

WHEREAS, the Seller, the Servicer, the Conduit Purchaser, the Committed Purchaser and the Administrator are parties to that certain Receivables Purchase Agreement dated as of May 29, 2002 (as amended, supplemented or otherwise modified from time to time, the “ Receivables Purchase Agreement ”); and

WHEREAS, the Seller, the Servicer, the Conduit Purchaser, the Committed Purchaser and the Administrator have agreed to amend the Receivables Purchase Agreement on the terms and conditions hereafter set forth;

NOW, THEREFORE, in consideration of the premises set forth above, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Seller, the Servicer, the Conduit Purchaser, the Committed Purchaser and the Administrator hereby agree as follows:

SECTION 1. Amendment . Subject to the fulfillment of the condition precedent set forth in Section 2 below, the Receivables Purchase Agreement is hereby amended as follows:

1.1 Section 3.03(b) of the Receivables Purchase Agreement is hereby amended by deleting the reference to “2% per annum above the Alternate Base Rate” set forth in such section and replacing such reference with “a rate equal to the then applicable Earned Discount Rate”.

1.2 Section 4.01 of the Receivables Purchase Agreement is amended and restated in its entirety to read as follows:

SECTION 4.01. Fees . Seller shall pay to the Administrator and the Purchasers the fees in the amounts and at the times set forth herein and in the fee letter, dated March 13, 2009, among the Administrator, Parent and Seller (as amended, restated, supplemented or otherwise modified from time to time, the “ Fee Letter ”).

1.3 Article XII of the Receivables Purchase Agreement is hereby amended to add the following new Section 12.03 to the end of such article:

SECTION 12.03. Federal Reserve Bank . Notwithstanding any other provision of this Agreement to the contrary, any Purchaser may at any time pledge or grant a security interest in all or any portion of its rights (including, without limitation, the Asset Interest and any rights to payment of Earned Discount and fees related to the Transaction Documents) under this Agreement to secure obligations of such Investor to a Federal Reserve Bank, without notice to or consent of any party hereto; provided that no such pledge or grant of a security interest shall release any Purchaser from any of its obligations hereunder, or substitute any such pledgee or grantee for such Purchaser as a party hereto.

1.4 Section 4.02(a) of the Receivables Purchase Agreement is hereby amended to add the phrase “or (iii) any Accounting Based Consolidation Event” immediately following the words “Regulatory Change”.

1.5 Appendix A to the Receivables Purchase Agreement is amended by adding the following definition in the appropriate alphabetical location:

“ Accounting Based Consolidation Event ” means the consolidation, for financial and/or regulatory accounting purposes, of all or any portion of the assets and liabilities of the Conduit Purchaser that are subject to this Agreement or any other Transaction Document with all or any portion of the assets and liabilities of an Affected Party as the result of the existence of, or occurrence of any change in, accounting standards or the issuance of any pronouncement, interpretation or release, by any accounting body or any other body charged with the promulgation or administration of accounting standards, including, without limitation, the Financial Accounting Standards Board, the International Accounting Standards Board, the American Institute of Certified Public Accountants, the Federal Reserve Board of Governors and the Securities and Exchange Commission, and shall occur as of the date that such consolidation (i) shall have occurred with respect to the financial statements of the Conduit Purchaser or any of its affiliates or (ii) shall have been required to have occurred, regardless of whether such financial statements were prepared as of such date.

1.6 The definition of “Concentration Limit” set forth in Appendix A to the Receivables Purchase Agreement is amended and restated in its entirety to read as follows:

“ Concentration Limit ” at any time for (1) any Obligor that is a Governmental Authority (other than any federal Governmental Authority), means an amount equal to (i) the aggregate Unpaid Balance of all Eligible Receivables at such time times (ii) 1% (or in the case of Bonneville Power Authority, 2% so long as the Administrator has confirmed in writing that it has received satisfactory evidence of the assignability of such Receivables), (2) all Obligors (on a combined basis) that are federal Governmental Authorities, means an amount equal to (i) the aggregate Unpaid Balance of all Eligible Receivables at such time times (ii) 2% and (3) any other Obligor means an amount equal to (i) the aggregate Unpaid Balance of all Eligible Receivables at such time times (ii) the applicable percentage as set forth below opposite the appropriate ratings of such Obligor’s long-term and short-term unsecured debt. Any Obligor that has a split rating shall be deemed to be in the lower rating category.

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1.7 The definition of “Earned Discount Rate” set forth in Appendix A to the Receivables Purchase Agreement is amended and restated in its entirety as follows:

“ Earned Discount Rate ” means for any Settlement Period;

(a) in the case of any portion of the Capital funded by a Liquidity Funding or by a Committed Purchaser, the sum of (i) the Federal Funds Rate for such Settlement Period plus (ii) 3.00% per annum; and

(b) in the case of any portion of the Capital funded by any Commercial Paper Notes, the CP Rate for such Settlement Period;

provided, however, that on any day during a Settlement Period when any Liquidation Event or Unmatured Liquidation Event shall have occurred and be continuing, the Earned Discount Rate for the Capital shall mean the sum of (i) the Federal Funds Rate for such Settlement Period plus (ii) 4.00% per annum.

1.8 The definition of “Termination Date” set forth in Appendix A to the Receivables Purchase Agreement is amended to delete the reference to “March 13, 2009” in clause (c) thereof and substitute “March 12, 2010” therefor.

SECTION 2. Condition Precedent . The effectiveness of this Amendment is subject to the satisfaction of the condition precedent that the Administrator shall have received (i) counterparts (which receipt may be by facsimile transmission) of (x) this Amendment, executed by the Seller, the Servicer, the Conduit Purchaser, the Committed Purchaser and the Administrator and (y) the Fee Letter (as defined after giving effect hereto) and (ii) all fees payable on the date hereof pursuant to the Fee Letter.

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SECTION 3. Representations and Warranties . Each of the Seller and the Servicer hereby represents and warrants that (i) this Amendment constitutes its legal, valid and binding obligation, enforceable against such party in accordance with its terms, (ii) before and after giving effect to this Amendment, the representations and warranties of each such party, respectively, set forth in Article 6 of the Receivables Purchase Agreement are true and correct in all material respects with the same effect as if made on the date hereof, except to the extent such representations and warranties expressly relate to an earlier date. The Seller further represents and warrants that before and after giving effect to this Amendment, no event has occurred and is continuing that constitutes a Liquidation Event or an Unmatured Liquidation Event.

SECTION 4. Reference to and Effect on the Receivables Purchase Agreement .

4.1 Upon the effectiveness of this Amendment, (i) each reference in the Receivables Purchase Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean and be a reference to the Receivables Purchase Agreement, as amended hereby, and (ii) each reference to the Receivables Purchase Agreement in any other Transaction Document or any other document, instrument or agreement executed and/or delivered in connection therewith, shall mean and be a reference to the Receivables Purchase Agreement as amended hereby.

4.2 Except as specifically amended above, the terms and conditions of the Receivables Purchase Agreement, of all other Transaction Documents and any other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect and are hereby ratified and confirmed.

4.3 The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrator, the Conduit Purchaser or the Committed Purchaser under the Receivables Purchase Agreement or any other Transaction Document or any other document, instrument or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein, in each case except as specifically set forth herein.

SECTION 5. Execution in Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument.

SECTION 6. GOVERNING LAW . THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. Section Titles . The section titles contained in this Amendment are and shall be without substance, meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

[T HE R EMAINDER OF P AGE I NTENTIONALLY L EFT B LANK ]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective signatories thereunto duly authorized as of the date first above written.

Signature Page to

Amendment No. 8 to Receivables Purchase Agreement

APPENDIX A

DEFINITIONS

This is Appendix A to the Receivables Purchase Agreement dated as of May 29, 2002 among Avista Receivables Corp., as Seller, Eaglefunding Capital Corporation, as Conduit Purchaser, Avista Corporation, as initial Servicer, Fleet National Bank, as Committed Purchaser, and Fleet Securities, Inc., as Administrator (as amended, supplemented or otherwise modified from time to time, the “ Agreement ”). Unless otherwise indicated, all Section, Exhibit and schedule references in this Appendix are to Sections of and Exhibits and Schedules to the Agreement.

A. Defined Terms . As used in the Agreement, unless the context requires a different meaning, the following terms have the meanings indicated hereinbelow:

“ Administrator ” has the meaning set forth in the preamble .

“ Administrator’s Office ” means the office of the Administrator at 100 Federal Street, Eleventh Floor, Boston, Massachusetts 02110 or such other address as shall be designated by the Administrator in writing to Seller, Parent and each Purchaser.

“ Affected Party ” means each of each Purchaser, each Program Support Provider, any assignee or participant of any Purchaser or any Program Support Provider, Fleet Securities, any successor to Fleet Securities as Administrator, and any sub-agent of the Administrator.

“ Affiliate ” when used with respect to a Person means any other Person, directly or indirectly, controlling, controlled by, or under common control with such Person.

“ Allocation Limit ” has the meaning set forth in Section 1.01 .

“ Alternate Base Rate ” means, on any date, a fluctuating rate of interest per annum equal to the higher of

(a) the rate of interest most recently announced by the Liquidity Agent in Boston, Massachusetts, as its prime rate; and

(b) the Federal Funds Rate most recently determined by the Liquidity Agent plus 0.50%  per annum .

The Alternate Base Rate is not necessarily intended to be the lowest rate of interest determined by the Liquidity Agent in connection with extensions of credit.

“ Applicable Law ” means all applicable laws, rules, regulations (including temporary and final income tax regulations), statutes, treaties, codes, ordinances, permits, certificates, orders and licenses of and interpretations by any Governmental Authority, and applicable judgments, decrees, injunctions, writs, orders or like action of any court, arbitrator or other administrative, judicial or quasi-judicial tribunal or agency of competent jurisdiction.

“ Asset Interest ” means an undivided ownership interest determined from time to time as provided in Section 1.04(b) in all Pool Assets.

“ Avista Utilities ” means the operating division of the Parent which represents all the regulated utility operations of the Parent that are responsible for retail electric and natural gas distribution, electric transmission services and electric generation and production.

“ Avista Utilities EBITDA ” means, for any period, (a) Avista Utilities Net Income for such period plus (b) in each case, without duplication and to the extent deducted in computing Avista Utilities Net Income for such period, the sum of such period of (i) income tax expense, (ii) interest expense, (iii) depreciation and amortization expense, (iv) any extraordinary or non-recurring losses and (v) other non-cash items reducing such Avista Utilities Net Income for such period, minus (c) in each case, without duplication and to the extent added in computing Avista Net Income for such period, the sum of for such period of (i) any extraordinary or non-recurring gains and (ii) other non-cash items increasing Avista Utilities Net Income for such period, all as determined in accordance with GAAP, plus (d) for any period including the fiscal quarter ended December 31, 2001, $20,600,000 of power cost deferrals deducted in computing Avista Utilities Net Income for such fiscal quarter but incurred with respect to prior fiscal quarters.

“ Avista Utilities Interest Expense ” means, for any period, interest expense of Avista Utilities for such period determined in accordance with GAAP.

“ Avista Utilities Net Income ” means, for any period, the net income or loss of Avista Utilities for such period determined in accordance with GAAP.

“ Business Day ” means a day other than a Saturday or a Sunday on which both (a) the Administrator at its principal office in Boston, Massachusetts is open for business and (b) commercial banks in New York City and Spokane, Washington are not authorized or required to be closed for business.

“ Capital ” means at any time with respect to the Asset Interest an amount equal to (a) the aggregate of the amounts theretofore paid to Seller for Purchases pursuant to Section 1.01 , less (b) the aggregate amount of Collections theretofore received and actually distributed to, and received by, a Purchaser on account of the Capital pursuant to Section 3.01 .

“ Capital Lease Obligations ” means as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and, for the purposes of the Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

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“ Change in Control ” means any of the following:

(a) in relation to Parent, the acquisition following the date hereof by any person or group of persons (within the meaning of Section 13 or 14 of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under the Exchange Act) of issued and outstanding shares of the capital stock of Parent entitled (without regard to the occurrence of any contingency) to vote for the election of members of the board of directors of Parent and having a then present right to exercise 30% or more of the voting power for the election of members of the board of directors of Parent attached to all such outstanding shares of capital stock of Parent, unless otherwise agreed in writing by the Liquidity Banks and the Administrator; or

(b) the creation or imposition of any Lien on any shares of capital stock of Seller; or

(c) the failure by Parent to own all of the issued and outstanding capital stock of Seller.

“ Collection Ratio ” means, for any Cut-Off Date, the ratio (expressed as a percentage) computed as of such Cut-Off Date by dividing (x) the Collections received during the month ending on such Cut-Off Date by (y) the amount of Sales generated during the month ending on the immediately preceding Cut-Off Date.

“ Collections ” means, with respect to any Receivable, all funds which either (a) are received by Seller, Servicer, the Originator or any other Person from or on behalf of the related Obligors in payment of any amounts owed (including, without limitation, purchase prices, finance charges, interest and all other charges) in respect of such Receivable, or applied to such amounts owed by such Obligors (including, without limitation, insurance payments that Seller, the Originator or Servicer applies in the ordinary course of its business to amounts owed in respect of such Receivable and net proceeds of sale or other disposition of repossessed goods or other collateral or property of the Obligor or any other party directly or indirectly liable for payment of such Receivable and available to be applied thereon), or (b) are deemed to have been received by Seller or any other Person as a Collection pursuant to Section 3.02 .

“ Commercial Paper Holders ” means the holders from time to time of the Commercial Paper Notes.

“ Commercial Paper Notes ” means short-term promissory notes issued or to be issued by Conduit Purchaser, or the proceeds of which are loaned to Conduit Purchaser, to fund its investments in accounts receivable or other financial assets.

“ Committed Purchaser ” has the meaning set forth in the preamble .

“ Commitment ” means with respect to any Committed Purchaser, the amount listed opposite such Committed Purchaser’s name on the signature page to the Agreement.

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“ Commitment Fee ” means, for each day, the amount equal to the product of (x) the unused Liquidity Commitment Amount on such day, times (y) the Commitment Fee Rate, times (z) 1/360.

“ Commitment Fee Rate ” has the meaning set forth in the Fee Letter.

“ Concentration Limit ” at any time for (1) any Obligor that is a Governmental Authority, means an amount equal to (i) the aggregate Unpaid Balance of all Eligible Receivables at such time times (ii) 1% (or in the case of Bonneville Power Authority, 2% so long as the Administrator has confirmed in writing that it has received satisfactory evidence of the assignability of such Receivables) and (2) any other Obligor means an amount equal to (i) the aggregate Unpaid Balance of all Eligible Receivables at such time times (ii) the applicable percentage as set forth below opposite the appropriate ratings of such Obligor’s long-term and short-term unsecured debt. Any Obligor that has a split rating shall be deemed to be in the lower rating category.

“ Conduit Purchaser ” has the meaning set forth in the preamble .

“ Consolidated Total Capitalization ” on any date means the sum, without duplication, of the following with respect to the Parent and its consolidated subsidiaries: (a) total capitalization as of such date, as determined in accordance with GAAP, (b) the current portion of liabilities which as of such date would be classified in whole or part as long-term debt in accordance with GAAP (it being understood that the noncurrent portion of such liabilities is included in the total capitalization referred to in clause (a)), (c) all obligations as lessee which, in accordance with GAAP, are capitalized as liabilities (including the current portion thereof), and (d) all other liabilities which would be classified as short-term debt in accordance with GAAP.

“ Consolidated Total Debt ” on any date means the sum, without duplication, of the following with respect to the Parent and its consolidated subsidiaries: (a) all liabilities which as of such date would be classified in whole or in part as long-term debt in accordance with GAAP (including the current portion thereof), (b) all obligations as lessee which, in accordance with GAAP, are capitalized as liabilities (including the current portion thereof), (c) all other liabilities which would be classified as short-term debt in accordance with GAAP, and (d) all Guarantee Obligations of or by the Parent.

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“ Contract ” means a contract between the Originator and any Person, or an invoice or bill from the Originator to any Person, pursuant to or under which such Person shall be obligated to make payments for products or services to the Originator. A “related” Contract with respect to the Receivables means a Contract under which Receivables in the Receivables Pool arise, which evidence such Receivables, or which is relevant to the collection or enforcement of such Receivables.

“ Contractual Obligation ” with respect to any Person, means any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is party or by which it or any of its Property is bound.

“ CP Rate ” for any Settlement Period means the per annum rate equivalent to the “weighted average cost” (as defined below) related to the issuances of Commercial Paper Notes that are allocated, in whole or in part, by the Conduit Purchaser (or by the Administrator) to fund or maintain the Asset Interest (and which may also be allocated in part to the funding of other assets of the Conduit Purchaser); provided , however , that if any component of such rate is a discount rate, in calculating the “ CP Rate ” for such Settlement Period, the Conduit Purchaser shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum. As used in this definition, the Conduit Purchaser’s “ weighted average cost ” shall consist of (w) the actual interest rate (or discount) paid to purchasers of the Conduit Purchaser’s Commercial Paper Notes, together with the Dealer Fee, to the extent allocated, in whole or in part, to the Conduit Purchaser’s Commercial Paper Notes by the Conduit Purchaser (or the Administrator), (x) certain documentation and transaction costs associated with the issuance of such Commercial Paper Notes, (y) any incremental carrying costs incurred with respect to Commercial Paper Notes maturing on dates other than those on which corresponding funds are received by the Conduit Purchaser and (z) other borrowing by the Conduit Purchaser, including borrowings to fund small or odd dollar amounts that are not easily accommodated in the commercial paper market.

“ Credit Agreement ” means the Credit Agreement, dated as of May 21, 2002, among Avista Corporation, the banks party thereto, Keybank and Washington Mutual Bank, as Co-Agents, U.S. Bank, National Association, as Managing Agent, Fleet National Bank and Wells Fargo Bank, as Documentation Agents, Union Bank of California, N.A., as Syndication Agent, and The