Aquila Files Electric Rate Case for St. Joseph Area to Recover Costs of Electric Service Operations.

ST. JOSEPH, Mo. -- Aquila, Inc. (NYSE:ILA) today filed a request with the Missouri Public Service Commission for an electric rate increase to recover costs associated with service for its customers in the company's former St. Joseph Light & Power area.

In its request, Aquila seeks to recover higher fuel costs in electricity generation, as well as costs associated with providing safe and reliable service for customers. The request is for a 6.2 percent, or $7 million, increase for 60,000 electric customers in Aquila's former St. Joseph Light & Power service area. The proposed increase would raise bills about $4.54 monthly for the average St. Joseph area residential customer using 1,000 kilowatt-hours of electricity a month.

"We understand higher energy costs are a burden on customers, and we have worked to hold down our operating costs," said Jon Empson, senior vice president of Aquila's regulated operations. "However, it's important that we recover costs so customers will benefit from our continued operational improvements."

The primary reason for the increase is to recover $6.3 million in higher costs of natural gas and coal to fuel power plants, as well as purchased power costs. Other reasons for the increase are investments in improvements and expansion of electric transmission and distribution such as the new Alabama Street substation project in St. Joseph, as well as the cost of capital, including depreciation. Aquila was able to reduce the amount of the increase nearly $7 million by selling excess power to off-system customers.

Aquila serves 346,000 electric and natural gas customers in Missouri. Based in Kansas City, Mo., Aquila provides electricity and natural gas delivery service to 1.3 million customers in Missouri, Kansas, Colorado, Michigan, Minnesota, Iowa and Nebraska.