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

“The share repurchase program is an expression of the confidencewe have in the underlying strength of our company, in ourstrategies for long-term growth and the belief by us and othersthat our stock is very undervalued in the market today,” he said.

Matthews added the company has re-evaluated its strategy ofacquiring regulated assets in the Northwest. Although it stillmakes sense, there are few acquisition opportunities available thatwould be accretive to earnings in the first year, a significantfactor for Avista Corp. in any purchase scenario, he said. Currentprice expectations, which are based on other recent industryactivity, are not attractive to the company at this time. “We arestill interested in growing our customer base, acquiring electricand natural gas distribution, generation and storage assets, andrealizing cost savings and synergies-but at the right price. Wewill not overpay for assets,” he said.

Along with its partners, Avista recently agreed to sell the1,340 MW Centralia Power Plant and the adjacent coal mine toTransAlta of Calgary. The company also recently formed a jointventure with STEAG AG, Germany’s largest independent powerproducer, with the intention of investing in various powerprojects. Avista has a similar agreement with Cogentrix Energy todevelop natural-gas fired generating plants in the PacificNorthwest. Recent important acquisitions have included the firstquarter 1999 purchase of Vitol Gas & Electric, which hassubstantially expanded Avista’s energy marketing and tradingpresence in the eastern United States and has established thecompany as a significant participant in the emerging coal marketingbusiness. In January, Avista also purchased a majority interest inOne Eighty Communications and formed Avista Communications, acompetitive local exchange carrier that provides local dial tone,data and Internet services in the Pacific Northwest.

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