KANSAS CITY, Mo., Dec. 5, 2006 (PRIME NEWSWIRE) -- Aquila Inc. (NYSE:ILA) announced today that it has concluded its effort to purchase Calpine Corp.'s 580-megawatt, natural gas-fired power plant known as the "Aries" plant in Pleasant Hill, Mo. The plant was auctioned off yesterday at an auction held in New York City. "The bidding reached a point where it did not make economic sense for our customers. We based that decision on the cost of power supply alternatives which compete with Aries," said Keith Stamm, Aquila's senior vice president and chief operating officer.
"Funds we previously set aside for the purchase of Aries will now be utilized for debt reduction and other liability management efforts," Stamm added.
In September Aquila announced its agreement to purchase the plant for $158.5 million. By submitting asset purchase agreements to the U.S. Bankruptcy Court, Southern District of New York, Aquila became the "stalking horse" bidder. The court adopted a procedural schedule that included an auction that was held on Dec. 4 and Kelson Energy was selected as the winning bidder. "We congratulate Calpine on a successful auction and Kelson Energy on its selection as the Aries purchaser -- we welcome them to Missouri," said Stamm.
The auction results are subject to final review and approval by the court overseeing the Calpine bankruptcy. A ruling is expected Wednesday, Dec. 6. As part of the auction process Aquila now holds the position of back-up bidder at its last offer price yesterday of $230 million until Dec. 28, 2006. This means that if the Kelson acquisition is terminated, the company remains obligated until Dec. 28 to purchase the plant for $230 million upon the terms and conditions in the asset purchase agreements signed by Aquila.
Communities in the company's Missouri service area continue to grow, some at double-digit rates, increasing the demand for electricity to meet customer needs. To meet those growing needs Aquila added the South Harper peaking facility to its fleet of power plants. The company also is participating in the expansion of the Iatan coal-fired plant being built by KCP&L near Weston, MO.
Based in Kansas City, Missouri, Aquila owns electric power generation and operates electric and natural gas utilities serving nearly 1 million customers in Colorado, Iowa, Kansas, Missouri and Nebraska. More information is available at aquila.com.
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