News Release

January 28, 2005

KCC approves $7.4 million electric rate increase for Aquila Networks - WPK

The Kansas Corporation Commission today approved a $7.4 million revenue increase for Aquila, Inc., d/b/a Aquila Networks – WPK (WPK). WPK had filed an application with the KCC requesting an annual increase in rates for electric service of $19.2 million. The increase approved by the KCC represents an approximate increase in a customers’ overall bill of 5 percent as compared to the company’s requested increase of approximately 15 percent. As in the past, fuel costs incurred by the company are passed on to the customer through the ECA (Energy Cost Adjustment) charge and will fluctuate on a monthly basis. The rate increase will be assessed across-the-board to all customer classes.

WPK must file new rate tariffs within 30 days that reflect the new rates approved in today’s Commission order. These tariffs must be filed and approved prior to implementation of the rate increase. Customers can expect to see the new rates on bills beginning approximately March 1, 2005.

In its order, the Commission allows for a return on equity (ROE) of 10.5 percent. The ROE is the amount of money a company has the opportunity to earn on its common equity provided to shareholders. WPK has requested an ROE of 11.5 percent. The Commissioner also approved a rate of return of 8.7285 percent. WPK had requested a rate of return of 9.487 percent.

WPK provides retail electric service to approximately 68,500 customers in Kansas, including service to approximately 152 communities and other areas in 32 counties located in the central and southwestern areas of Kansas.

Background

In its request, the company said it was requesting the rate increase because its current rates were producing an overall rate of return of only 2.71 percent. According to WPK, significant factors driving the need for rate relief included increased investment in production, transmission and distribution facilities, increases in staffing and wage levels, and other administrative costs incurred by the WPK since its last rate increase in August 2001.

On June 9, 2004, WPK requested permission to implement $10 million of the requested $19.2 million rate increase on an interim bases, subject to refund, pending final determination of the permanent rate request. The Commission rejected the interim rate request on August 10, 2004.