UtiliCorp United said its power marketing operations willcontribute positively to second quarter earnings before interestand taxes. Wholesale electricity volumes for the quarter areexpected to be about 24.8 million MWh, up about 112% from the 1997quarter.

Hot weather at the end of June, coupled with nationwideshortages in generation capability and transmission bottlenecks,combined to temporarily drive prices from $30/MWh to as much as$7,500/MWh, resulting in huge losses for some utilities and powermarketers.

UtiliCorp estimated consolidated financial results for thesecond quarter will be about $0.38 per basic common share, or abouteven with quarterly results a year ago. These results would be inline with consensus analyst estimates. The positive effect of theJune surge in power trading helped offset a previously discloseddecline in earnings from the Aquila Gas Pipeline subsidiary, whichhas been hampered this year by decreases in gas liquids prices andvolumes.

“The much-publicized events of June, when power traded atextremely escalated prices due to high demand and short supply, wasa wake-up call to the industry,” said Richard C. Green Jr.,UtiliCorp CEO. “It was a necessary passage on the way to a freemarket – not the end of the world, but for those dealing ingeneration, perhaps the end of the world as we knew it.”

In other UtiliCorp news, subsidiary Aquila Energy launched adirect mail campaign to be followed by print advertising targetingmarkets in industries such as pulp and paper, chemicals andplastics, food processing, steel and auto producers, electric andgas utilities and independent power producers. The ad campaigninitially will focus on Aquila’s core portfolio of wholesale gasand power products and services and its family of weather riskmanagement products introduced last year. The Aquila advertisingmarks the first public use of UtiliCorp’s new corporate theme,”Smart. Simple. Energy.”

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