Avista Makes Another Power Play Purchase Boosts Avista’S National Status

Washington Water Power subsidiary Avista Energy has reached agreement to acquire another major player in the energy marketing arena.

Avista will acquire Boston-based Vitol Gas & Electric LLC, described as one of the top 20 energy marketing companies in the United States.

“This is a pretty substantial deal,” WWP spokesman Pat Lynch said Thursday. “It puts together two of the industry’s top companies in the country to form what is squarely now a top-10 energy marketing company in North America.”

No regulatory approval is required for the acquisition, which should close early next year. Terms of the deal were not announced.

WWP officials said the acquisition provides Avista Energy the platform to continue growth of its North American trading and marketing business in both electric and natural gas markets.

Both Avista Energy and Vitol Gas & Electric are well-established in the energy marketing arena. In the third quarter this year, Avista Energy was ranked 11th nationally and Vitol 18th in megawatt-hour sales.

Together the two companies would have achieved power sales exceeding 38 million megawatt hours in the third quarter of 1998 and would have been ranked sixth in sales among all U.S. power marketers.

“The deal allows us the opportunity now to truly market power from coast to coast,” Lynch said. “There is very little overlap in markets and customers between the two companies.”

Avista so far has done most of its business in western markets, while Vitol’s business has been east of the Rockies.

“The fact that there was minimal overlap in the markets our two companies serve was critically important and made this deal a perfect fit,” T.M. Matthews, WWP’s chairman, president and CEO, said in a news release.

Under terms of the deal, Neil E. Kelley, board chairman for Vitol, will become chairman of Avista Energy. Michael R. Kutsch, currently president of Vitol, will become president of Avista. Current Avista president Lloyd H. Meyers, will become president of newly-formed Avista Power, a WWP affiliate created to develop and own generation assets, primarily in support of Avista Energy.

The Vitol acquisition is the second purchase this week by Avista Energy. The company announced Wednesday its acquisition of Coast Pacific Management Inc., a natural gas marketing marketing firm based in Vancouver, British Columbia.

WWP, with annual revenues exceeding $3 billion, is a diversified energy services company with utility and subsidiary operations throughout the United States.It will change its name to Avista Corp. on Jan. 1.