H2fuel Developing Promising Membrane Technology for Fuel Cell Hydrogen.

Process Would Create Pure Hydrogen From Readily Available Fuel Sources for Use

In Fuel Cells

SPOKANE, Wash., Oct. 17 /PRNewswire/ --

Avista Labs today announced its affiliate H2fuel, LLC is developing new technology that would greatly reduce the cost of producing hydrogen for use in fuel cells. Avista Labs, a subsidiary of Avista Corporation (NYSE: AVA), and a 70 percent owner of H2fuel, is a leading developer of Proton Exchange Membrane (PEM) fuel cells. H2fuel is a developer of hydrogen extraction and purification technologies for use in the fuel cell industry.

(Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/19990629/AVALOGO )

The new membrane-based technology works by eliminating carbon dioxide and carbon monoxide from readily available fuels such as natural gas and propane, thus allowing the production of nearly pure hydrogen. This is important for fuel cells, because the cleaner the hydrogen fed into them, the more efficiently they tend to run.

H2fuel, of Mt. Prospect, Ill, recently awarded a research and development contract to the University of Kentucky to synthesize, characterize and test a family of chemical transport membranes that efficiently and selectively remove the oxides of carbon from a gas mixture.

The H2fuel research at the University of Kentucky is being supplemented by a parallel effort funded by the U.S. Department of Energy (DOE).

According to H2Fuel President Serge Randhava, this membrane-based approach to the extraction and purification of hydrogen from natural gas or propane is a departure from other methods currently in use, and is expected to be less expensive than other methods.

Dr. Winston Ho of the University of Kentucky's Department of Chemical and Materials Engineering is the principal investigator for both the H2fuel and the DOE programs. The H2fuel technical team is led by Dr. Richard Kao, H2fuel vice president of technology.

Avista Corp. is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista's affiliates include Avista Utilities, a company operating division that provides electric and natural gas service to customers in four western states. Non-regulated affiliates include Avista Advantage, Avista Labs and Avista Energy. Avista Corp.'s stock is traded under the ticker symbol "AVA" and its Internet address is www.avistacorp.com

NOTE: Avista Corp. and the Avista Corp. logo are trademarks of Avista Corporation. All other trademarks mentioned in this document are the property of their respective owners.

This news release contains forward-looking statements regarding the company's current expectations. Forward-looking statements are all statements other than historical facts. Such statements speak only as of the date of the news release and are subject to a variety of risks and uncertainties, many of which are beyond the company's control, which could cause actual results to differ materially from the expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2000, and the Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2001.

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