Aquila Subsidiary Completes $503 Million Sale of Its Interest in New Zealand's UnitedNetworks; Estimates Fourth Quarter Gain of $28 Million.

Business Editors/Energy Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--Oct. 11, 2002

Aquila, Inc. (NYSE:ILA) announced today that its indirect, wholly-owned subsidiary UtiliCorp N.Z. Limited (UNZ) has completed the sale of its 70.2 percent interest in UnitedNetworks Limited to VECTOR Limited for approximately US$503 million.

Aquila expects to book a fourth quarter gain on the transaction estimated at approximately $28 million.

Under its takeover offer, VECTOR purchased all shares of UnitedNetworks that were held by UNZ. The takeover offer was conditional upon Aquila's receipt of bank consents and VECTOR's acquisition of UNZ's 70.2 percent stake in UnitedNetworks. Both conditions were satisfied last week. Under New Zealand law, VECTOR then had seven days to settle its takeover offer in cash, and it funded the acquisition of UNZ's interest in UnitedNetworks yesterday in Auckland.

Aquila's share of the net proceeds, estimated to be approximately $362.0 million, will be used to retire debt related to Aquila's acquisition of UnitedNetworks and other utilities in Australia, Canada and the United Kingdom. Last week, Aquila repurchased the minority stake in UNZ held by its financial partner for approximately $38.5 million, increasing its interest in UnitedNetworks from 55.5 percent to 70.2 percent. The sale to VECTOR is the culmination of a bid process announced in June by UnitedNetworks as part of Aquila's ongoing effort to sell $1 billion or more in assets to strengthen its balance sheet and credit ratings.

"Since beginning our strategic restructuring a few months ago, Aquila has now sold or agreed to sell assets with net proceeds totaling $876.1 million," said Richard C. Green, Jr., chairman, president and chief executive officer. "The transfer of ownership in UnitedNetworks brings the total of completed transactions to about $696 million, or more than two-thirds of our stated goal of $1 billion."

                                                    Net Proceeds
Aquila Asset Sales As of October 10, 2002            (Millions)
-----------------------------------------           ------------
Lockport power project                                 $ 37.5
Natural gas pipeline and processing assets              265.0
UnitedNetworks                                          362.0
Texas gas storage assets (pending)                      180.0
Quanta stock (open market and private sales)             13.8
Corporate aircraft                                       15.4
Other businesses                                          2.4
                                                       ------
Total asset sales closed or pending                    $876.1

Green also stated that asset sales, elimination of costs and management restructuring have been the principal focus of Aquila as it repositions itself as an electric and gas utility and owner of fully contracted generation. "As we continue to press ahead with these important steps, we will now redouble our efforts toward the next phase of our repositioning, the continued exit from the remaining non-core elements of our previous energy merchant strategy. This task is essential to addressing the concerns expressed by the market."

UnitedNetworks is one of New Zealand's largest network infrastructure companies, distributing energy to about 30 percent of the country's electricity consumers and more than half of New Zealand's natural gas consumers. It also owns and manages telecommunications networks in the central business districts of Auckland and Wellington. UnitedNetworks was created by Aquila in 1998 by combining electricity distribution operations acquired from three different New Zealand utilities, and later a natural gas network.

Based in Kansas City, Missouri, Aquila operates electricity and natural gas distribution networks serving customers in seven states and in Canada, the United Kingdom and Australia. The company also owns and operates power generation assets. At June 30, 2002, Aquila had total assets of $11.9 billion. More information is available at www.aquila.com.

Forward-Looking Information

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: the terms "expects," "goals" and similar expressions identify forward-looking statements. Naturally, all forward-looking statements involve risk and uncertainty and actual results or events could be materially different. Although Aquila believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those contained in the forward-looking statements include the possibility that regulatory or governmental authorities challenge the assumptions used in preparing our calculations and other factors discussed in reports Aquila files with the Securities and Exchange Commission (including Aquila's Forms 8-K, 10-Q and 10-K). In light of these risks, uncertainties, and assumptions, the forward-looking events discussed might not occur.