Aquila to Provide Marketing Services to Two Large U.S. Power Projects.

Business Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--Aug. 14, 2001

Aquila, Inc. (NYSE: ILA) today announced that it has reached an agreement to provide power management services for the two largest independent power projects in the United States. Under these agreements Aquila will market all excess energy from these plants.

Totaling nearly 4,400 megawatts, the plants are being constructed as a joint venture between PANDA Energy International and TECO Power Services (TPS), a wholly owned subsidiary of Tampa-based TECO Energy, Inc. When completed, they will become new sources of energy in power-short regions of the United States. The agreement covers power produced at Union Power Station in El Dorado, Ark., and Gila River Power Station in Gila Bend, Ariz.

Panda Energy President Todd Carter said, "Panda has had an excellent history with Aquila and is excited to have them associated with our two largest power plant projects."

TPS Vice President of Energy Management Jerry Brown said: "We are pleased to have Aquila facilitate our energy management needs. Their power marketing expertise will help us deliver reliable energy to the market efficiently."

"These projects are classic examples of leveraging the core competencies of three organizations to create more value for all involved," said Dave Freeman, Aquila's senior director for the project. "Panda is a premier power development company, TPS a proven operator of energy generation and Aquila adds the market knowledge. Together it's an unbeatable combination."

Earlier this month TPS and Panda completed a five-year, $2.2 billion financing to cover the construction of the two power projects. Construction has already begun on the Union Power Station, which is expected to be in operation in the summer of 2002.

The Union facility is being constructed to serve wholesale customers throughout Arkansas and Louisiana, as well as in portions of Mississippi and Texas.

Construction of the Gila River project is expected to begin in August and is scheduled to be in full commercial operation by the summer of 2003. Designed primarily to sell electricity throughout Arizona, Gila River is also expected to sell excess energy to wholesale customers in California, Nevada and New Mexico.

Based in Kansas City, Aquila is an innovative provider of risk management services and one of the top wholesalers of electricity and natural gas in North America. The company also controls a diverse portfolio of merchant assets, including power plants, gas storage, pipeline and processing facilities. Aquila also provides wholesale energy services in the United Kingdom, Scandinavia and Germany. Additional information is available at www.aquila.com. Aquila is 80 percent owned by UtiliCorp United (NYSE: UCU), a multinational energy company based in Kansas City with more than 4 million customers. It operates in the United States, Canada, New Zealand and Australia.

TECO Power Services Corporation is a wholly owned subsidiary of TECO Energy, Inc. (NYSE:TE), a diversified, energy-related holding company headquartered in Tampa. Other TECO Energy businesses include Tampa Electric, Peoples Gas System, TECO Transport, TECO Coal, TECO Coalbed Methane, TECO Propane Ventures and TECO Solutions. TPS builds, owns and operates electric generation facilities with emphasis on high-growth areas of North America. Domestically, announced projects call for TPS to serve customers in 18 states, spanning the southern half of the United States. TECO Energy as a whole has net ownership interests in nearly 11,000 megawatts of generating capacity, either operating, in construction, or in advanced stages of development worldwide.

Headquartered in Dallas, Texas, PANDA Energy International, Inc. is a privately held, non-regulated electric generation company whose primary focus is the development, ownership and operation of state-of-the-art, environmentally clean, low-cost power plants. The company has plants in Roanoke Rapids, North Carolina, and Brandywine, Maryland; and it has an ownership in three 1,000 megawatt plants it developed in Guadalupe County, Paris, and Odessa, Texas. Panda also has plants in China and Nepal and is the developer and a partner in three merchant plants presently being constructed in the United States. Panda has developed 9,000 megawatts that are either under construction or in commercial operation. Panda also has 10,000 megawatts of electric generating capacity currently in advanced development and an additional 6,500 megawatts in the early stages of development. For more information, visit online: www.tecopowerservices.com and www.pandaenergy.com.