Avista Energy has invested $25 million in a new partnership with one of the country’s largest natural gas marketers.
The Washington Water Power Co. subsidiary will split ownership of Howard/Avista Energy LLC, a limited liability company, with Howard Energy Marketing Inc. of Traverse City, Mich.
Howard did more than $1.5 billion in business in the one-year period that ended April 30, said Avista President Lloyd Meyers.
Howard sells almost 2 billion cubic feet of natural gas daily. Among the company’s 1,600 customers are Chrysler Corp. and Procter and Gamble.
Meyers said Avista will complement Howard’s gas business with its own expertise in electricity marketing.
Avista, formed in April, has already affiliated with other gas marketers as it positions itself for the deregulation of electricity markets.
Meyers said officials began looking for potential partners in the Midwest even before Avista was launched. Attention quickly focused on Howard, which has customers from New York to Wisconsin to Texas.
“The formation of this partnership is significant for our company because it will provide immediate and positive bottom-line results,” he said.
Meyers predicted Howard/Avista Energy will triple or quadruple revenues within the next few years.
David Howard, chief executive officer of Howard Energy Marketing, said the partners will have to increase the capitalization of the LLC to about $100 million in the next two years to reach those sales levels.
Meyers said a few Avista officials will relocate to Michigan to help set policy and procedures for the partnership, but they will return to Spokane after a few months.
Roger Steed, a Howard Energy Marketing executive, will head the new business.
Howard Energy is a subsidiary of Howard Energy Co. Inc., which is owned by Howard Publications Inc., the privately held publisher of 18 newspapers around the country.
Avista, like Pentzer Corp., is a non-regulated operation of WWP.