Aquila Submitted Responses to FERC; Confirms Round-Trip Trades Not an Acceptable Practice.

Business Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--June 3, 2002

The Aquila Merchant Services subsidiary of Aquila, Inc. (NYSE:ILA) announced today that it responded on May 31 to the Federal Energy Regulatory Commission (FERC) data requests on power trading in the Western Systems Coordinating Council, and again confirms it has not conducted round-trip trades. These transactions are simultaneous sell-buyback trades of the same product with the same party at the same price for the purpose of increasing volume.

"After a thorough review of more than 60,000 power trades for the years 2000 and 2001, we are confident that our power trading practices were proper and in full compliance with the FERC regulations and standards," said Ed Mills, Aquila Merchant's president and chief operating officer. "We've also confirmed that none of our trades were for the purpose of increasing volumes or revenue, impacting market prices, or for any other improper business purpose. Our policy continues to be very clear on this. All trades are conducted for legitimate business purposes."

Aquila and more than 100 other companies received fact-finding letters from the FERC seeking information on potential "round-trip" or "wash" transactions during 2000 and 2001 in the Western Systems Coordinating Council (WSCC) for power and in WSCC and Texas for natural gas. Aquila intends to file a similar response to the FERC on June 4 regarding gas trades.

As previously disclosed, some of the trades reviewed may have some of the characteristics of sell-buyback trades. Those trades that may have some characteristics of sell-buyback trades accounted for less than one-half of one percent of the company's trading and marketing revenues. However, these trades were conducted for legitimate business purposes such as determining market price, depth and direction and to manage the risk of Aquila's portfolio due to changing market information.

Aquila's response to FERC is available on its website at http://merchant.aquila.com/affidavit_roundtrip.pdf.

Based in Kansas City, Missouri, Aquila (formerly UtiliCorp United) operates electricity and natural gas distribution networks serving more than six million customers in seven states and in Canada, the United Kingdom, New Zealand and Australia. It is also one of the largest wholesalers of electricity and natural gas in North America, provides risk management products and services, provides wholesale energy services in the United Kingdom and has a presence in Germany and Scandinavia. At March 31, 2002, Aquila had total assets of $12.3 billion and 12-month sales of $37.3 billion. More information is available at www.aquila.com.