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IOWA POWER AND IOWA PUBLIC SERVICE WILL MERGE TO FORM MIDWEST POWER SYSTEMS

 IOWA POWER AND IOWA PUBLIC SERVICE WILL MERGE TO FORM
 MIDWEST POWER SYSTEMS
 DES MOINES, Iowa, July 15 /PRNewswire/ -- Iowa Power Inc. of Des Moines and Iowa Public Service Co. of Sioux City, Iowa, will merge to form Midwest Power Systems Inc. The merger will become effective no later than Aug. 1, as the result of approval today by the Federal Energy Regulatory Commission (FERC).
 A written order from FERC is expected soon, possibly by the end of this week.
 Midwest Power Systems has two operating divisions: Midwest Power and Midwest Gas. Midwest Power combines the electric systems of Iowa Power and IPS Electric to serve 412,000 customers in Iowa and South Dakota. Midwest Gas continues to provide natural gas service to 363,000 customers in Iowa, Minnesota, Nebraska and South Dakota. Prior to the merger, Midwest Gas and IPS Electric had been divisions of Iowa Public Service.
 Midwest Power Systems, Iowa's largest utility, will have corporate headquarters in Des Moines, home of the parent company, Midwest Resources Inc. (NYSE: MWR). The Midwest Power division will have electric distribution headquarters in Des Moines, and generation and transmission headquarters in Sioux City. The Midwest Gas division will maintain its headquarters in Sioux City.
 "We're pleased that FERC has approved the merger. We have felt the case for merging the utilities is a strong one and regulatory agencies agree," said Russell Christiansen, chairman and chief executive officer of Midwest Power Systems.
 "We now have the ability to move ahead with a stronger, more efficient utility operation that will result in long-term benefits for customers and shareholders."
 Christiansen said savings through the year 2001 are estimated at nearly $89 million for the merged utility compared to the cost of operating separate utilities. Greater rate stability also will result from the merger, he said.
 Midwest Power owns 2,819 megawatts in generating capacity, including units at Iowa's four largest coal-fired generating stations at Sioux city, Council Bluffs, Ottumwa and Muscatine, Iowa. Midwest Power also holds a major ownership share in 345,000-volt transmission lines that link the generating plants to communities.
 Christiansen said the merger will have no effect on the relationships that have existed with municipal utilities that buy electricity and transmission services from Iowa Power and Iowa Public Service.
 "We have had good, longstanding relationships with these communities and we look forward to continuing these ties," Christiansen said.
 The merger of Iowa Power and Iowa Public Service will have no immediate impact on rates. Eventually, Christiansen said, rates charged by Iowa Power and IPS Electric will be merged. The new rate structure will require approval by the Iowa Utilities Board.
 For Mark Putney, chairman and chief executive officer of Midwest Resources, the mergers of the the past two years represent accomplishment of a goal set decades ago.
 "I have long felt that Iowa could be efficiently served by fewer electric and gas utilities. I'm proud that our company has shown the leadership necessary to get this accomplished," Putney said.
 Major population centers served by Midwest Power Systems are Des Moines, Sioux City, Waterloo and Council Bluffs in Iowa and suburban areas north of Minneapolis-St. Paul, Minn.
 The merger of Iowa Power and Iowa Public Service comes two years after their previous parent companies -- Iowa Resources Inc. of Des Moines and Midwest Energy Co. of Sioux City -- announced their intent to merge. The merger of these holding companies was completed in November 1990, creating the new parent company, Midwest Resources.
 Approval by FERC today was the last step in the approval process for merging the utilities. The Iowa Utilities Board approved the merger Dec. 23, 1991, and the Minnesota Public Utilities Commission approved it Jan. 21, 1992.
 -0- 7/15/92
 /CONTACT: John McCarroll of Midwest Resources, 515-281-2785/
 (MWR) CO: Midwest Resources Inc.; Iowa Power Inc.; Iowa Public Service Co.;
 Midwest Power Systems Inc. ST: Iowa IN: UTI SU: TNM


BB-MC -- DV003 -- 9636 07/15/92 14:33 EDT
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Date:Jul 15, 1992
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