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Avista closes deal to buy Juneau utility

Published on NewsOK Modified: July 4, 2014 at 4:31 am •  Published: July 4, 2014
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JUNEAU, Alaska (AP) — A Washington-based energy company has concluded its acquisition of Juneau's electric company.

Even though Avista Corp., which is headquartered in Spokane, now owns Alaska Electric Light and Power Company, things are expected to be "business as usual" moving forward, an Avista spokeswoman told the Empire Tuesday.

Jessie Wuerst, senior communications manager for Avista, said the company decided to acquire AEL&P and its parent company, Alaska Energy and Resources Company, because Avista's "northwest customer base isn't growing."

"To keep value for our shareholders, we needed to look for ways to expand," she said.

Avista, which is four years older than AEL&P at 125 years, provides electric and gas energy to nearly 700,000 customers in eastern Washington, northern Idaho and parts of southern and eastern Oregon.

"We are very pleased to complete this transaction, and to have AERC become part of our company," said Avista Corp. chairman and CEO Scott Morris. "We look forward to working with the highly skilled and dedicated management and employees of AEL&P, and to being a partner in the Juneau community.".

One of the conditions of the sale, set by former AERC owner Bill Corbus before the acquisition was first announced in November 2013, was that nothing at AEL&P be changed for at least two years. Corbus also said he'd be donating 90 percent of his shares, about $40 million, from the sale to the Juneau Community Foundation.

Wuerst was complimentary of AEL&P's business model, saying the two companies share the same culture and appreciation for innovative technology.

"We want to expand what AEL&P is doing in the community," she said.

Some of the innovative measures she referred to included AEL&P's construction of hydro-electric power plants, lake taps, avalanche diversion structures and the use of a Daisy Bell, which is a portable device used to remotely trigger avalanches.

Wuerst said the challenges faced by AEL&P and Avista aren't so different. AEL&P uses helicopters to reach its remote hydro plants, and Avista uses Snowcats to navigate mountainous terrain for its facilities.

She said AEL&P's role in the community, from public outreach to community service, is also similar. She noted, for example, that Avista's 1,643 employees volunteered 50,000 hours of service and $1 million in financial contributions last year. However, the expansion she referred to goes beyond AEL&P's public involvement.

Wuerst said more resources will now be available as well, which can help minimize costs to customers. Expenses like infrastructure improvement and purchasing technology upgrades previously were paid for through rate increases, but Wuerst said Avista can "help leverage" those costs.

AEL&P vice president Debbie Driscoll described it as "more possibilities with less impact to rate payers."

Driscoll said AEL&P staff were nervous about the transition at first and had plenty of questions, but most of those concerns were addressed when Corbus explained that he'd spent a considerable amount of time finding the right company to take over.

"He wanted to make sure the community and our company was able to make the transition in the best possible way."

Tim McLeod will remain AEL&P's president and general manager, and those with Avista who came up to Juneau to assist with the transition won't be staying.

In connection with the acquisition, Avista Corp. issued about 4.5 million new shares of stock to AERC shareholders, according to a press release, and the price of $32.46 per share reflects a purchase price of $170 million.

Also on Tuesday, Avista announced it concluded the sale of its energy management and sustainability company, Ecova, Inc., to Cofely USA Inc. The sale price was $335 million in cash, less the payment of debt and other customary closing adjustments.


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