The Empire District Electric Company Announces New Rating by Standard & Poor's

Business Wire, May 18, 2006

JOPLIN, Mo. -- The Empire District Electric Company (NYSE:EDE) announced today that Standard & Poor's has downgraded the Company's corporate credit rating to BBB- from BBB, senior secured debt to BBB from A-, and senior unsecured debt rating to BB from BBB-. The Company's short-term rating of A-3 was affirmed. S&P's outlook for Empire is stable.

S&P stated, "The downgrade reflects Standard & Poor's view that Empire's financial measures will be constrained over the next several years by fuel and power costs that continue to exceed the level recoverable in rates, and by Empire's higher-than-historical level of capital spending, including the acquisition of a Missouri gas utility."

In making the announcement, Bill Gipson, President and CEO, stated: "I am disappointed with the action taken by Standard & Poor's. We have a rate case pending before the Missouri Public Service Commission where the key issue is the recovery of fuel and purchased power expense. The case is scheduled to conclude by year's end."

"In regard to our higher-than-historical capital spending requirement in the next few years, cited by S&P as a contributing factor for the downgrade, this building program has become necessary to meet the increasing needs of our growing customer base. We are located in an area of the country that has continually seen robust growth and projections call for this trend continuing," said Gipson. "We must build power generating facilities and other infrastructure to serve this growth."

Gipson continued: "We find ourselves in a position very similar to the one the Company faced in the late 1960's when we prepared to build our Asbury Power Plant. We had a huge task before us but, when completed, it made the Company stronger and ensured competitively priced energy for our customers for decades. We believe our current building project will allow our customers and this area to continue to prosper."

"Our acquisition of the Aquila natural gas distribution operation presents us with an excellent opportunity to balance our summer air-conditioning peak with the winter heating peak characteristic of natural gas utility service. This acquisition is also advantageous as the business is within our area of expertise and lies in close proximity to our current service territory, where we are known and respected by regulatory authorities. We intend to finance the acquisition consistent with our current capital structure," stated Gipson.

Based in Joplin, Missouri, The Empire District Electric Company (NYSE:EDE) is an investor-owned utility providing electric service to approximately 162,000 customers in southwest Missouri, southeast Kansas, northeast Oklahoma, and northwest Arkansas. The Company also provides fiber optic and Internet services, customer information software services, and has an investment in close-tolerance, custom manufacturing. Empire provides water service in three incorporated communities in Missouri and expects to acquire, on June 1, 2006, the Missouri natural gas operations of Aquila, Inc., which serves 48,500 customers in northwest, north central, and west central Missouri.

Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements address future plans, objectives, expectations, and events or conditions concerning various matters. Actual results in each case could differ materially from those currently anticipated in such statements, by reason of the factors noted in our filings with the SEC, including the most recent Form 10-K and Form 10-Q.