“Comparing quarterly results in 2007 to the previous year,” Emery continued. “oil and gas production increased 13 percent to 3.9 billion cubic feet equivalent (Bcfe). Earnings decreased by $1.0 million due in large part to lower overall realized prices and higher depletion expense caused by higher expected future development costs, higher finding costs, and the impact of last year’s downward revisions to reserves. Our current expectations for fourth quarter production have caused us to revise 2007 annual production growth to be in the 2 to 4 percent range on an Mcf-equivalent basis compared to 2006 production of 14.4 Bcfe. Coal mining production increased 6 percent to 1.3 million tons, with higher revenues more than offset by higher operating costs and production taxes, resulting in lower earnings.

“Regarding our power generation business, plant operations were normal. However, earnings reflected an after-tax charge of $(1.8) million related to the impairment of our Ontario, California, power plant. The impairment was caused by the pending thermal host contract expiration with no long-term extension. In addition, two benefits occurred last year that improved 2006 earnings – a favorable tax adjustment of $2.0 million and the receipt of $1.9 million after tax in insurance proceeds related to the Las Vegas power plant outages earlier in 2006.”

Emery continued, “We are very well positioned for the future, both financially and operationally. Year-to-date 2007 income from continuing operations is 28 percent stronger on a per-share basis, compared to 2006, even with a significant increase in common shares outstanding.

“Our power plant construction activity continues to progress. The construction and testing of the 90 megawatt Wygen II coal-fired power plant remain on schedule for a January 1, 2008 start of commercial operations. In late October, we reached a milestone with the successful test-firing of the plant at full load using coal fuel. We believe this plant will be the first coal plant in the nation with mercury emissions reduction. This facility will serve economical and reliable power to Cheyenne Light customers. Work on the 149 megawatt gas-fired Valencia power plant near Albuquerque, New Mexico, is proceeding as planned, with an anticipated start of commercial operations in mid-2008. This plant will be under a 20-year power purchase contract with Public Service Company of New Mexico. We also continue to pursue the construction of the 100 megawatt Wygen III mine-mouth coal-fired plant. Recently, we filed our application for its Industrial Siting Permit. We remain confident that construction can commence in early 2008, assuming all regulatory approvals and permits are in place.”

Emery said, “Our plans to acquire certain utility assets of Aquila (NYSE: ILA) in Colorado, Kansas, Nebraska and Iowa are going well. The list of accomplishments has grown tremendously since August. Thus far, we have obtained state regulatory approval for the transfer of ownership in Iowa and Nebraska. At the federal level, the Federal Energy Regulatory Commission recently approved our acquisition of the Colorado Electric operation, and antitrust clearance has been obtained from the Federal Trade Commission. In the months ahead, we will work diligently to obtain the remaining state regulatory approvals in Colorado and Kansas. Our transaction to purchase assets is cross-contingent with the proposed merger of Aquila and Great Plains Energy (NYSE: GXP). Last month, shareholders of both of those companies approved the merger, which is subject to regulatory approval in Missouri and Kansas. We are providing our support to Aquila’s and Great Plains’ regulatory efforts there, just as they have been valuable in our efforts to obtain approvals in the other states. On the operational and integration front, we are very pleased with our progress thus far. We continue to work hard on planning and processes to help assure a smooth transition of operations and ownership.

“Regarding earnings guidance for 2008, we are providing a forecast that includes only results from our current operations,” said Emery. “The uncertainties of the timing of the Aquila asset closing and any potential sale resulting from a strategic review of our current assets preclude us from including these impacts on our earnings guidance at this time. Based on our current expectations for existing operations only, we expect income from continuing operations, on a per share basis, to be in the range of $2.35 to $2.55. We also expect between $0.10 and $0.20 per share in pre-closing Aquila-related expenses in early 2008, pertaining to ongoing transition and integration activities. These expenses have not been included in the guidance range.             

Emery concluded, “We are excited and optimistic about our long-term growth prospects. With the pending expansion of utility operations and other projects under way, we have several years ahead with identified growth drivers. We will continue to execute our plan to propel our Company to a new level of performance.”

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