Aquila Inc. said it received US$477 million after fees and expenses for its Australian energy investments from a consortium representing Alinta Limited, AMP Henderson and their affiliates. The proceeds were about US$32 million higher than earlier estimates mainly because of a stronger Australian dollar. Aquila said the net proceeds will be used to repay obligations under its recent 364-day secured loan and for other actions to strengthen the company’s balance sheet. Aquila’s investments in Australia included a 34% investment in United Energy Limited, the first electric distribution system to be privatized by the state of Victoria. Aquila purchased its interest in UEL in 1995. Prior to the sale Aquila also owned a significant minority interest in Alinta, a natural gas distributor and operator of a retail gas business in the state of Western Australia, and an interest in Multinet Gas, a gas distribution business in Victoria. The sale of the Australian investments is part of Aquila’s back to basics strategy, which has involved exiting the energy trading business, selling international assets and merchant power plants and refocusing on its utility operations in Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska and Michigan.

As part of its ongoing Chapter 11 bankruptcy proceeding, the backruptcy court approved Pacific Gas and Electric Co.’s plan to pay $281 million of 6.25% first mortgage refunding bonds that mature Aug. 1. The PG&E Corp. utility will pay the bondholders from its current available cash, which totaled $3.49 billion on May 31, 2003. There are no other large payouts due by the utility in the near term, a PG&E spokesperson said. The next large bond maturity is in March 2004. Bondholders will receive the principal and interest as part of the payoff, with those with brokerage accounts having the total paid to their accounts. Certificate holders will receive their payoff from the trustee, The Bank of New York, after they turn over their certificates to the bank.

With natural gas prices sustaining a much higher than average level, TXU Energy said Wednesday that it was forced to file a request with the Public Utility Commission of Texas to raise the company’s electricity prices for North Texas customers. The change would raise the average monthly residential electric bill of a customer using 1,000 kWh by 3.7% or $3.61 per month. The commission now has 45 days to review the company’s request. “While we understand that any increase is difficult for our customers, we work hard to keep our prices competitive,” said Carl Bracy, TXU Energy senior vice president. “When this change goes into effect, our price to beat will still remain the lowest in the state.” Under the Texas Electric Choice Act, changes in electricity prices are allowed when natural gas or purchased power prices increase or decrease beyond the threshold. TXU Energy noted that it believes that this flexibility contributes to making Texas the most competitive electricity market in the United States. TXU serves five million customers in North America and Australia, including 2.7 million competitive electric customers in Texas.

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