Aquila Receives Approval for 1.8 Percent Rate Increase From Iowa Utilities Board

Only the Third Rate Increase for Aquila Customers in Past 13 years

Kansas City, Missouri, UNITED STATES

WEST DES MOINES, Iowa, March 1, 2006 (PRIMEZONE) -- Aquila, Inc. (NYSE:ILA) today received approval from the Iowa Utilities Board (IUB) for a 1.8 percent rate increase to recover the costs of investments made in the company's natural gas transmission and distribution operations.

Operating costs and system improvements made by Aquila include construction of new gas main lines, individual gas service lines and equipment to serve customers energy demand in the state.

The new rates for Aquila's 147,000 gas customers in the state are expected to be effective on or before April 1. This is only the company's third rate increase in the last 13 years. The last rate increase was in 2003.

"We are pleased that the IUB approved the recovery of costs necessary to allow Aquila to continue to provide safe and reliable service," said Tracy Peterson, operating vice president for Aquila in Iowa. "We are currently reviewing the order to determine if there are other aspects of the case we might ask the IUB to reconsider."

With the new rates, a typical residential customer using 903 therms (one therm equals 100 cubic feet of gas) a year will have an increase over current rates of about 60 cents per month, or approximately 2 cents a day. A typical commercial customer using 3,498 therms annually would have an increase over current rates of about $2.53 a month, or approximately 8 cents a day.

An interim rate increase of about 1 percent has been in effect since May 2005 while the IUB considered Aquila's rate request. The company had originally filed for a 2.7 percent, or $4.1 million, increase in annual revenues. The approved rates will increase annual revenues by $2.9 million for Aquila in Iowa.

The new rates apply to the delivery of gas to Aquila customers and are not related to the gas cost portion of customers' bills. The gas cost portion typically comprises about 75 percent of a monthly bill. Aquila provides gas to its customers at the same price it obtains gas supplies.

Aquila's Iowa gas headquarters is in West Des Moines. Based in Kansas City, Mo., the company provides electricity and natural gas service to 1.3 million customers in Missouri, Kansas, Colorado, Michigan, Minnesota, Iowa and Nebraska. More information is available at

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