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Avista Slows Shopping Spree, Plans Stock Purchase

Avista Slows Shopping Spree, Plans Stock Purchase

At an annual meeting yesterday, Avista Corp. CEO T.M. Matthews unveiled a new strategy that will include the purchase of 10% of Avista's common stock and will defer any major acquisitions so Avista can concentrate on the company's existing energy business.

"The share repurchase program is an expression of the confidence we have in the underlying strength of our company, in our strategies for long-term growth and the belief by us and others that our stock is very undervalued in the market today," he said.

Matthews added the company has re-evaluated its strategy of acquiring regulated assets in the Northwest. Although it still makes sense, there are few acquisition opportunities available that would be accretive to earnings in the first year, a significant factor for Avista Corp. in any purchase scenario, he said. Current price expectations, which are based on other recent industry activity, are not attractive to the company at this time. "We are still interested in growing our customer base, acquiring electric and natural gas distribution, generation and storage assets, and realizing cost savings and synergies-but at the right price. We will not overpay for assets," he said.

Along with its partners, Avista recently agreed to sell the 1,340 MW Centralia Power Plant and the adjacent coal mine to TransAlta of Calgary. The company also recently formed a joint venture with STEAG AG, Germany's largest independent power producer, with the intention of investing in various power projects. Avista has a similar agreement with Cogentrix Energy to develop natural-gas fired generating plants in the Pacific Northwest. Recent important acquisitions have included the first quarter 1999 purchase of Vitol Gas & Electric, which has substantially expanded Avista's energy marketing and trading presence in the eastern United States and has established the company as a significant participant in the emerging coal marketing business. In January, Avista also purchased a majority interest in One Eighty Communications and formed Avista Communications, a competitive local exchange carrier that provides local dial tone, data and Internet services in the Pacific Northwest.

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