Aquila Energy and South Mississippi Electric Power Association Announce Power Sales Agreement

Business Wire, Sept 14, 1999

KANSAS CITY, Mo.--(BUSINESS WIRE)--Sept. 14, 1999--

Aquila Energy, a wholly owned subsidiary of UtiliCorp United (NYSE: UCU), has signed a 20-year contract with South Mississippi Electric Power Association ("SMEPA") for the sale of all the electric capacity and associated energy from a 279-megawatt combined cycle electric power unit currently being built in Batesville, MS. Financial terms were not disclosed. Beginning June 1, 2001, Aquila Energy will provide the natural gas to run the unit and will market excess power not scheduled by SMEPA.

"The agreement provides SMEPA with needed capacity and energy for future load growth, and strengthens Aquila's position in the physical market in the southeast by providing marketing services for the excess capacity and energy," said David Stevenson, vice president and general manager, Commodity Transactions for Aquila Energy.

"The Aquila unit provides much-needed capacity to assure a reliable power supply for SMEPA's members. The combined cycle unit is an excellent addition to SMEPA's already good generation mix," said John Carley, SMEPA's Manager of Corporate Planning & Operations.

The project was developed by LSP Energy Limited Partnership, an affiliate of LS Power, LLC of East Brunswick, N.J., and is being constructed by BVZ Power Partners, a joint venture between Black & Veatch Construction Co. and H.B. Zachry Company. Aquila Energy contracted with LSP Energy Limited Partnership for the output of Unit 3 in 1998.

Based in Kansas City, Missouri, Aquila Energy is the nation's second-largest wholesaler of natural gas and third-largest wholesaler of electric power. UtiliCorp United is a Kansas City-based international electric and gas company with more than 4.5 million energy customers and operations across the U.S. and in Canada, Great Britain, New Zealand and Australia. The company has assets of $6.8 billion and 12-month sales of $14.9 billion.

With headquarters in Hattiesburg, Mississippi, SMEPA is a rural electric generation and transmission cooperative that provides wholesale power to 11 member distribution cooperatives who in turn serve approximately 350,000 customers. In 1998 SMEPA sold 7,500,000 megawatt-hours of energy to its member cooperatives. SMEPA's generation base includes coal, natural gas and nuclear, in addition to some hydro purchased power.