Avista Corp., rocked by early cold weather and increased loadsthat reduced profit within its utilities division, now expects toreport better-than-expected earnings for the fourth quarter, drivenby its non-regulated energy trading arm, Avista Energy.

The Spokane, WA-based company’s consolidated fourth quarterdiluted earnings will exceed $.50 per share, based on results formthe first two months of the quarter. The earnings would be wellabove the consensus figure of $.09, with earnings ranging between$.05 and $.17, according to seven analysts surveyed by FirstCall/Thomson Financial.

The improved performance by the energy arm offset predictedlosses within Avista Utilities, which “continues to be affected bycold weather that has increased loads.” The increased loads haveled to higher purchased power costs that are not currently beingrecovered from customers or included in power cost deferrals.

Ironically, Avista’s second quarter earnings, reported in June,were driven down by Avista Energy because of what the company callederrors in its wholesale trading decisions made a few months earlier(see Daily GPI, June 22). However,company officials predicted then that the energy arm would recover andlead the way toward better economic health for the entire company bythe end of this year.

Despite its comeback, there has been fallout within the company,with CEO Tom Matthews resigning in early November. Also last month, afederal investigation was launched into the trading practices of thecompany. Federal investigators have begun looking into possible energyfutures trading rule violations that may have occurred two years agoat a Houston subsidiary (see Daily GPI,Nov. 16).

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