Aquila Reaches Agreement to Sell Interest in Lockport Energy Facility

Business Wire, July 2, 2002

Business Editors

Aquila, Inc. (NYSE:ILA) announced today that it has signed an agreement to sell its 16.58 percent interest in the Lockport Energy facility to Fortistar Capital Inc., L.L.C. for $37.5 million in cash.

The transaction is expected to close before the end of this year's third quarter.

The Lockport facility is a 180 megawatt gas-fired power plant approximately 30 miles north of Buffalo, New York, in the town of Lockport. The facility has been in service since 1992 and is managed by Fortistar.

"This sale and others that will follow demonstrate our commitment to execute on our previously announced decision to sell $1 billion of non-strategic assets," said Robert K. Green, Aquila's president and chief executive officer.

Based in Kansas City, Missouri, Aquila operates electricity and natural gas distribution networks serving more than six million customers in seven states and in Canada, the United Kingdom, New Zealand and Australia. The company also owns, operates and contractually controls power generation, natural gas and coal processing assets. At March 31, 2002, Aquila had total assets of $12.3 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 "expected to close," "moves us forward," and similar terms identify forward-looking information. 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: unanticipated events that do not permit the company to sell its interest in the plant; abnormal weather conditions; unanticipated financial market conditions, including changes in exchange rates, interest rates, and commodity prices; prices of natural gas, natural gas liquids, and electricity; the failure to successfully execute the restructuring of our trading operations; and adverse changes in our credit rating. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed might not occur.