Aquila and FirstEnergy Agree to Final Terms for Aquila's Acquisition of Midlands Electricity.

Business Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--March 18, 2002

Aquila, Inc. (NYSE: ILA) (formerly UtiliCorp United) announced today that on March 15 it entered into an agreement with FirstEnergy Corp. (NYSE:FE) for the acquisition by Aquila of a 79.9 percent interest in FirstEnergy's wholly-owned Avon Energy Partners Holdings subsidiary, the holding company for Midlands Electricity plc, for a total price of $264 million. Aquila plans to operate Midlands Electricity, which is the fourth-largest regional electricity company in the United Kingdom and serves more than 2.3 million network customers. The transaction is subject to the receipt of all applicable regulatory approvals and is expected to close by mid-April.

Aquila and FirstEnergy will own all of the outstanding shares of Avon Energy Partners Holdings through a jointly owned subsidiary, with each company having a 50-percent voting interest. Aquila will account for its investment under the equity method of accounting.

Midlands Electricity's assets include its 38,000-mile electric distribution network, an investment in the 1,875-megawatt Teesside Power generating plant in the United Kingdom, and investments in other energy businesses.

"We are looking forward to adding Midlands Electricity to our international network operations," said Robert K. Green, president and chief executive officer of Aquila. "Since we expect this investment to be accretive to Aquila's earnings, it will give us added confidence in achieving our financial objectives in 2002."

Aquila announced that Don Bacon will become the chief executive officer of Midlands Electricity plc upon completion of the transaction. Bacon will replace Mike Hughes, who has announced his retirement as Midlands chief executive officer. Also retiring is Roger Murray, Midlands chief operating officer. Both retirements are effective upon closing of the purchase.

For the past two years, Bacon has served as chief executive officer of United Energy in Melbourne, Australia, which is managed and 34 percent-owned by Aquila. Prior to that he was chief executive officer for two-and-a-half years at UnitedNetworks, a New Zealand utility 55%-owned by Aquila. Bacon started his career with Aquila in 1993 as chief executive officer of the company's first international acquisition, West Kootenay Power, an electric utility in British Columbia, Canada, that is now part of UtiliCorp Networks Canada.

"Don's vast experience operating three of our international electric distribution utilities will be a tremendous asset as Aquila enters the energy networks market in the United Kingdom," said Keith Stamm, president and chief operating officer of Aquila's Global Networks Group.

Midlands Electricity serves the city of Birmingham and parts of Staffordshire, Gloucestershire, Shropshire, Hereford and Worcester. For 2001, it had sales of approximately $566 million and earnings before interest and taxes of about $275 million.

Based in Kansas City, Missouri, Aquila (formerly UtiliCorp United) is an international energy and risk management company. It is one of the largest wholesalers of electricity and natural gas in North America, provides wholesale energy services in the United Kingdom and has a presence in Germany and Scandinavia. It also operates electricity and natural gas distribution networks in seven states and in Canada, New Zealand and Australia. At December 31, 2001, Aquila had total assets of $11.9 billion and 12-month sales of $40.4 billion. More information is available at www.aquila.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

The terms "expected" or "expects" 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 contemplated by the forward-looking statements include: financial market conditions, including changes in exchange rates and interest rates, the failure to receive regulatory approvals or the imposition by regulatory bodies of substantial conditions; and the failure to reach an agreement for the sale of the investments in certain energy businesses on commercially acceptable terms.