Important Step to Capture Retail Market Share Business Editors KANSAS CITY, Mo.--(BUSINESS WIRE)--June 30, 2000--Continuing to leverage its investments in growing international energy networks, UtiliCorp United (NYSE:UCU) today said that Melbourne-based United Energy Limited, managed and 34 percent owned by UtiliCorp, has closed its transaction with Shell Australia, Woodside Energy and Ikon Energy to establish Pulse Energy, a joint energy marketing venture in Australia. UtiliCorp holds a 50 percent economic interest in Ikon Energy, a gas retailer which is managed by United Energy. "Pulse Energy will retail electricity and gas to more than 1.1 million electricity and gas customers in Victoria, Australia," said UtiliCorp President and Chief Operating Officer Robert K. Green, "and it has the potential to access another 9 million energy customers in the country's eastern states and in South Australia." The joint venture positions UtiliCorp and its Pulse Energy partners to capitalize on the ongoing deregulation of the national Australian electricity and gas market, Green said. United Energy and Ikon have a combined 50 percent ownership position in the new joint venture. "With the retail energy markets becoming contestable next year, Pulse Energy will provide Australia's first large-scale combination of electricity and gas services," Green said. Based in Kansas City, UtiliCorp United is an international electric and gas company with energy customers and operations across the U.S. and in Canada, the United Kingdom, Scandinavia, Germany, Spain, New Zealand and Australia. At March 31, 2000, UtiliCorp had total assets of $7.5 billion and 12-month sales of $19.6 billion. Additional information is available on the World Wide Web at www.utilicorp.com. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding UtiliCorp United Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties and could cause actual results to differ from those contained in the forward-looking statements. Note to editors: The following news release was issued in Melbourne, Australia, Thursday, June 29. All financials below are expressed in Australian dollars. UNITED ENERGY CLOSES PULSE ENERGY TRANSACTION United Energy announced today it had closed the transaction with Shell Australia, Woodside Energy and Ikon Energy to establish Pulse Energy -- a joint energy marketing venture. Pulse Energy will retail electricity and gas to more than 1.1 million electricity and gas customers in Victoria, with the potential to access a further 9 million energy customers in the eastern states and South Australia. United Energy will contribute its electricity retail customers in return for $A350 million. It will invest $A118 million into Pulse Energy for a 25% shareholding. Energy Partnership (Ikon Energy), which is owned by United Energy's cornerstone shareholders (AMP and UtiliCorp), will contribute its gas retail customers to Pulse Energy and will also have a 25% shareholding. Shell Australia will have a 40% shareholding and Woodside Energy a 10% shareholding. The transaction results in United Energy receiving net proceeds of approximately $A232 million. Initially this will be used to retire debt and to position the company to take advantage of future growth opportunities. United Energy will record a one-time abnormal gain of approximately $A83 million on the sale of its retail business to Pulse Energy. United Energy will provide Pulse Energy with e-commerce based customer support services and information technology services, under a seven-year contract, starting in 2001. The contract is projected, based on expected customer growth, to generate revenue of $A435 million. Under a separate two-year agreement United Energy will provide corporate support services such as accounting, treasury, regulatory and human resources. This contract produces annual revenue of $A1 million. EdgeCap, a new electricity and gas merchant business proposed to be formed by United Energy, Shell Australia and Woodside Energy, will provide risk management and hedging services to Pulse Energy. EdgeCap will draw on the substantial trading and risk management skills of United Energy, and access to significant gas resources held by Shell and Woodside. United Energy Background United Energy is one of Australia's fastest growing energy companies. It serves approximately 560,000 electricity customers in Melbourne's south, east and the Mornington Peninsula and 520,000 gas customers in Melbourne's north and east. United Energy buys and sells electricity in the wholesale market, trades related commodities, and sells risk management products. United Energy also offers energy retailers a range of back office services including call center, metering, billing and account collection functions. United Energy's telecommunications business has developed fiber optic networks in Melbourne, Sydney and Brisbane. United Energy is listed on the Australian Stock Exchange and has more than 52,000 predominantly Australian domiciled shareholders. AMP and UtiliCorp own 57.8% of United Energy. PULSE ENERGY BACKGROUND Pulse Energy is set to be Australia's most significant and innovative energy retailer as a result of combining the strengths of leading energy companies. United Energy Ltd., Energy Partnership (Ikon Energy Pty Ltd.), Shell Australia Ltd., and Woodside Energy Ltd. have formed Pulse Energy. Pulse Energy will initially service more than one million electricity and gas customers in Victoria, with the aim of rapidly becoming a national energy player. With retail energy markets becoming progressively contestable from 2001, Pulse Energy will have access to potentially 10 million energy customers in eastern Australia, and will provide Australia's first large-scale combination of electricity and gas services. Pulse Energy will provide smart efficiencies for customers and will deliver innovations such as e-commerce facilities including web- based bill payments. Additionally Fly Buys points will also be offered to residential customers. Pulse Energy combines United Energy's existing customer base and extensive operating and marketing expertise with Shell's considerable retail strengths, and the vast gas resources of both Shell and Woodside.
UtiliCorp Sees Formation of Pulse Energy in Australia as
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