Aquila Files Electric Rate Case with Commission to Recover Missouri Fuel, System Improvement Costs.

KANSAS CITY, 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 to customers in the company's former Missouri Public Service (MPS) area.

In its request, Aquila seeks to recover higher fuel costs in electricity generation, as well as system improvements in its MPS service area. The request is for a 14.3 percent, or $53 million, increase for the company's 240,000 electric customers in the MPS service area. The proposed rate increase would raise monthly bills approximately $11.48 for the average residential customer using 1,000 kilowatt-hours of electricity a month.

"We understand that customers are feeling the effects of higher energy expenses," said Jon Empson, senior vice president of Aquila's regulated operations. "To lessen the burden on our customers, the company decided to reduce its rate request by absorbing $14.3 million in costs that could have been justified."

The elements of the rate request include:

--$11.7 million in increased costs of natural gas and coal to fuel power plants, as well as purchased power costs.

--$30 million for increased cost of capital for plant investments, including the South Harper Peaking Plant.

--$18.9 million in increased depreciation costs.

--$6.7 million in other increased costs.

--Costs absorbed by Aquila reduces request by $14.3 million.

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