Aquila Brings Energy and Risk Management Skills to Global Chemical Fertilizer Industry.

Business Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--Jan. 29, 2002

The Aquila subsidiary of UtiliCorp United (NYSE:UCU) is taking the first step to bring its energy and risk management expertise to the chemical fertilizer industry, a market segment where natural gas can account for up to 80 percent of a product's costs.

"The chemical fertilizer industry is a good strategic fit for Aquila because it is linked to our knowledge of the energy market," said Ed Mills, president and chief operating officer of Aquila. "This represents an opportunity for Aquila to help chemical fertilizer firms manage, for example, the price and margin risks associated with the impact of natural gas prices on their business."

Aquila will enter the nitrogen market first, and within 12 months it plans to expand into the sulfur and phosphate markets. Target clients will be large resellers of chemical fertilizers and farm cooperatives "who are willing to share the risks and rewards in strategic areas of their business," said Mills.

Aquila will focus geographically in areas where the company already is well established. While the company has a global footprint, providing energy, coal and risk management services in North America and Europe, much of the U.S. chemical fertilizer market is within easy reach of the company's base in Kansas City, Mo. Roughly 90 percent of the nitrogen used for agriculture in the United States is applied within 500 miles of Kansas City.

"The chemical fertilizer market is undergoing significant upheaval as a result of the volatility in natural gas prices and supplies," said Kevin Fox, senior vice president and general manager of Aquila's Commodity Transaction Group. "Without help in managing the risks associated with such a market, the domestic industry stands to lose profitability at a time when the industry is facing extremely difficult conditions worldwide."

The chemical fertilizer business is complementary to Aquila's knowledge in the natural gas industry. Aquila entered the natural gas wholesaling and risk management business in 1985 and has established a leadership position through its knowledge of the market and needs of its clients. For example, Aquila is one of a few companies with the ability to deliver natural gas to its clients within 20 minutes. Aquila also is a pioneer in the development and marketing of risk management products for the power, natural gas and weather markets.

Aquila is one of the leading wholesalers of natural gas, power and coal in North America and is recognized as an innovative provider of risk management services. The company also provides wholesale energy services in the United Kingdom and has a presence in Germany and Scandinavia. Aquila is wholly owned by UtiliCorp United, an international energy company with more than 4 million customers across the U.S. and in Canada, the U.K., New Zealand and Australia. Additional information is available at www.aquila.com or contact George Dorsey at 816/527-1965.