Aquila Energy signs 15-year gas contract to fuel Calpine's Pasadena, Texas, power project.

OMAHA, Neb.--(BUSINESS WIRE)--Jan. 16, 1997--Aquila Energy Corp., a wholly owned subsidiary of UtiliCorp United, announced today that it has signed a 15-year contract, valued at an estimated $600 million, to provide natural gas to an affiliate of Calpine Corp. for a 240-megawatt cogeneration project in Pasadena, Texas.

When the cogeneration facility comes on line in 1998, approximately 90 megawatts of electric power and 200,000 pounds per hour of steam will be sold to Phillips Petroleum Co., with the remaining power sold in the wholesale market.

"A number of natural gas suppliers bid for the project but we selected Aquila because of our confidence in their ability to develop a creative solution to the complex fuel supply portion of this project in time for financing," said John Rocchio, vice president of business development for Calpine.

Under terms of the contract, Aquila will supply the Pasadena cogeneration plant with up to 45 million cubic feet per day of natural gas.

"This project is another step in the aggressive growth strategy that made Aquila one of the top ten North American wholesale gas and power marketers," said Thomas P. McCarthy, Aquila's vice president and general manager of commercial marketing. "Sophisticated energy customers increasingly expect more than just a competitive price when selecting suppliers. Customers expect trust, excellent communications and expert solutions tailored to their unique circumstances," he said.

Over the past few years, Aquila has executed long-term gas supply agreements for several cogeneration and independent power projects. Other projects have included the Grays Ferry Cogeneration Partnership near Philadelphia, the Cottage Grove project in Minnesota and the Whitewater project in Wisconsin.

Construction on the Pasadena project, which will be built at the Phillips Petroleum Houston Chemical Complex in Pasadena, is expected to begin later this month with operation scheduled to begin in August 1998.

The Pasadena facility will operate partly as a "merchant plant" that sells electricity directly to the competitive wholesale power market without the majority of its capacity being committed to long-term power sales agreements.

Based in San Jose, Calif., Calpine Corp. (NYSE: CPN) is engaged in the acquisition, development, ownership and operation of power generation facilities, and the sale of electricity and steam in the U.S. and selected international markets.

Aquila Energy Corp., based in Omaha, is a wholly owned subsidiary of UtiliCorp United (NYSE: UCU). Aquila is one of the largest marketers of natural gas and electricity in North America. Based in Kansas City, Mo., UtiliCorp is an international electric and gas company with total assets of $4 billion. The company has energy customers and operations across the U.S. and in Canada, Great Britain, New Zealand, Australia and Jamaica.

CONTACT: Carl Petz, 816/467-3323

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