Aquila to provide marketing services to two large U.S. power projects

KANSAS CITY, Mo., Aug. 14, 2001 — Aquila, Inc. today announced that it has reached an agreement to provide power management services for the two largest independent power projects in the United States. Under these agreements Aquila will market all excess energy from these plants.

Totaling nearly 4,400 megawatts, the plants are being constructed as a joint venture between PANDA Energy International and TECO Power Services (TPS), a wholly owned subsidiary of Tampa-based TECO Energy, Inc. When completed, they will become new sources of energy in power-short regions of the United States. The agreement covers power produced at Union Power Station in El Dorado, Ark., and Gila River Power Station in Gila Bend, Ariz.

Panda Energy President Todd Carter said, “Panda has had an excellent history with Aquila and is excited to have them associated with our two largest power plant projects.”

TPS Vice President of Energy Management Jerry Brown said: “We are pleased to have Aquila facilitate our energy management needs. Their power marketing expertise will help us deliver reliable energy to the market efficiently.”

“These projects are classic examples of leveraging the core competencies of three organizations to create more value for all involved,” said Dave Freeman, Aquila’s senior director for the project. “Panda is a premier power development company, TPS a proven operator of energy generation and Aquila adds the market knowledge. Together it’s an unbeatable combination.”

Earlier this month TPS and Panda completed a five-year, $2.2 billion financing to cover the construction of the two power projects. Construction has already begun on the Union Power Station, which is expected to be in operation in the summer of 2002.

The Union facility is being constructed to serve wholesale customers throughout Arkansas and Louisiana, as well as in portions of Mississippi and Texas.

Construction of the Gila River project is expected to begin in August and is scheduled to be in full commercial operation by the summer of 2003. Designed primarily to sell electricity throughout Arizona, Gila River is also expected to sell excess energy to wholesale customers in California, Nevada and New Mexico.

Based in Kansas City, Aquila is a provider of risk management services and a wholesaler of electricity and natural gas in North America. The company also controls a portfolio of merchant assets, including power plants, gas storage, pipeline and processing facilities. Aquila also provides wholesale energy services in the United Kingdom, Scandinavia and Germany. Additional information is available at www.aquila.com.

TECO Power Services Corporation is a wholly owned subsidiary of TECO Energy, Inc., a diversified, energy-related holding company headquartered in Tampa. For more information, visit online: www.tecopowerservices.com and www.pandaenergy.com.

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