A strong performance by Aquila Energy during the first quarterhelped UtiliCorp United earnings reach a record level. UtiliCorpearnings available for common shares were $54.4 million, comparedto $51.9 million in 1Q99.

“Our Aquila Energy subsidiary is off to a great start,” saidRichard C. Green, Jr., UtiliCorp chairman and CEO, “with recordfirst quarter results. These were driven by strong commoditybusiness including a 42% increase in longer-term transactions,solid improvement in earnings from carbon and power marketing,favorable natural gas liquids prices, and continued growth in itsstructured finance business. The record results from Aquila’smerchant businesses allowed us to exceed last year’s first-quarterperformance in spite of lower earnings from our domestic energynetworks.”

Aquila’s EBIT reached $34.2 million, a 195% increase from 1Q99.Commodity services (formerly marketing and trading) earned $21.3million, a 142% increase, primarily because of strong gas marketingand improved results in gas and power term business over 1999. Thecarbon business improved as well compared to its start-up phase ayear earlier. EBIT from Capacity Services was $8.5 million, upsignificantly due mainly to strong NGL prices and cost reductions.Capital Services had EBIT of $4.4 million compared to a small lossin the 1999 quarter.

In contrast, UtiliCorp’s energy distribution businesses had EBITof $71.4 million compared to $77.6 million in the 1999 period.Weather was not a major factor for these operations, primarily dueto an effective weather hedging strategy. The number of customersand their energy use continued to grow steadily, but this was morethan offset by increased costs of purchased power, costs related tooperations, depreciation related to continued investment intechnology infrastructure, and the sale of West Virginia networkoperations, which were winter-peaking, in late 1999.

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