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Seattle Post Intelligencer: Avista Energy to be sold to Shell subsidiary

THE ASSOCIATED PRESS

SPOKANE, Wash. — Avista Corp. will sell its energy trading subsidiary in a deal that could be worth some $200 million, the utility said Tuesday.

Avista Energy, which employs about 50 people, will be sold to Coral Energy Holding, L.P., a subsidiary of Shell, in a deal expected to close by the end of the second quarter or early third quarter, Avista said.

“We will be out of the general, unregulated energy marketing business,” said Jessie Wuerst, a spokeswoman for Avista, which is based in Spokane.

The utility had been trying for some time to sell the power marketing arm, which buys and sells electricity and natural gas from a variety of utilities. Avista Energy had been investigated by the federal goverment for some deals with scandal-plagued Enron, but cleared of wrongdoing, Wuerst said.

The agreement also included the sale of the operating assets of Avista Energy Canada, Ltd.

“We believe Avista Energy’s strong presence in the Pacific Northwest and western Canada complements our existing portfolio in North America,” Mark Hanafin, president and chief executive officer of Coral Energy, said in a statement. “We look forward to increasing our scale, resources and experience through this transaction, which will allow us to offer a broader portfolio of value-added services to our customers in the region.”

Avista Energy will receive cash for the assets acquired by Coral at approximately the book value of the assets at the time the deal closes.

While it is impossible to predict what those assets will be worth at that time, book value on March 31 was $202 million, Wuerst said.

Avista Energy offices in Spokane; Great Falls, Mont.; and Vancouver, British Columbia, are expected to remain open, with most of the employees being offered employment by Coral, Avista said.

Avista Utilities provides electricty and natural gas to more than 300,000 customers, mostly in Eastern Washington and northern Idaho.

The sale requires government approval.

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