Avista Corp., based in Spokane, WA, got on board the technologystock express last week as Washington state neighbor, Bill Gatestook a 5% stake in the company and Avista’s stock price just aboutdoubled.

Analysts said the Microsoft chief’s investment likely wasspurred by the internet link to subsidiary Avista Advantage, anon-line bill management service, and Avista’s budding enterprisein the suddenly blossoming fuel cell market.

Avista’s stock price went from about $24 on Wednesday to closeat $46 3/8 after Gates’ private investment company, CascadeInvestment LLC of Kirkland, disclosed to the SEC it had taken a5.01% position in the stock, putting him among the top 10investors in the company.

The move coincided with a sudden Wall Street interest in fuelcells, principally in Plug Power, a three-year old ventureco-founded by Detroit Edison’s parent, DTE Energy, and MechanicalTechnology. Plug Power’s stock price leaped 48 points from about$60 last Wednesday to $108 Friday. The company went public inNovember at about $20 share. Sempra Energy’s SoCal Gas also hasinvested in Plug Power, which has signed on General Electric todistribute residential-sized generation units.

An Avista spokesman confirmed his company is looking atspin-offs over the next year or so to maximize shareholder value,first of its more mature venture, Avista Advantage and then itsfuel cell arm, Avista Labs. It has not been decided what form theactions will take. The company reportedly is entertaining offersfrom backers for its fuel cell unit, which is expected to go intoproduction in early 2001.

Avista Labs, like Plug Power, is developing PEM (proton exchangemembrane) fuel cell systems that turn oil, propane or natural gasinto hydrogen for electric power generation without combustion (orpollutants) for homes and small businesses. Avista Advantageprovides energy information and utility billing services tothousands of commercial customers over the internet. (See NGI, May31)

Avista CEO Tom Matthews was brought in from the Houston gascommunity less than two years ago to direct an all-points push ofthe northwestern utility, formerly Washington Water Power intounregulated ventures. He appears to be bringing in some winnersalong with a previously announced loser.

The company recently announced it was abandoning one strategicinitiative, the push to develop a nationwide energy marketing unit.In the face of disappointing results Avista is scaling back to aregional marketing focus. It has put Boston-based Vitol Gas &Electric, which it acquired in December 1998, back on the market,at the same time warning investors to expect some disappointmentsin its fourth quarter results (See NGI, Nov. 29)

The fourth quarter notwithstanding, Friday an Avista spokesmansaid the company was “pleased that many investors are starting tounderstand the strategy that CEO Tom Matthews put forward. Part ofthat strategy is to increase and drive shareholder value and it’spaying off.”

“We are in a multi-year process of transforming our company froma regional utility into a national energy, information andtechnology company. In meeting our objectives, we will likelycontinue to see some quarter-to-quarter earnings volatility in thenear term. Whether the analysts like it or not, I cannot be worriedabout quarter-to-quarter earnings, but I am worried about where I’mgoing to be in three years,” Matthews told NGI in an interview lastJuly.

Ellen Beswick

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