Exhibit 10.1

SEVERANCE COMPENSATION AGREEMENT

This Agreement is effective as of the date it is signed by both AQUILA, INC., a Delaware corporation (the "Company"), and Rick J. Dobson ("Executive").

WHEREAS,
the Company's Board of Directors has determined that it is appropriate to reinforce and encourage the continued attention and dedication of members of the Company's management,
including Executive, to their assigned duties without distraction in potentially disturbing circumstances arising from the possibility of a Change of Control; and

WHEREAS,
this Agreement sets forth the severance compensation to which Executive will be entitled upon certain conditions if Executive's employment with the Company terminates following
a Change of Control.

NOW,
THEREFORE, IN CONSIDERATION of the mutual premises, covenants and agreements set forth below, it is hereby agreed as follows:

1.Term.This Agreement shall terminate, except to the extent that any obligation of the Company hereunder
remains unpaid as of such time, upon the earliest of: (i) two (2) years from the date hereof if a Change in Control has not occurred within such 2-year period; provided that
the term of this Agreement shall be automatically extended for an additional month upon each monthly anniversary of the date hereof until a party provides notice to the other party prior to the end of
any month that such automatic extension shall cease, in which case this Agreement shall terminate at the end of the then existing 2-year term; (ii) the termination of Executive's
employment for any reason, including by reason of death, Disability or Retirement, prior to a Change of Control; (iii) the termination of Executive's employment for Cause following a Change of
Control; (iv) the
termination of Executive's employment for any reason other than for Good Reason following a Change of Control; or (v) two (2) years from the date of a Change in Control.

2.Severance upon Termination of Employment.



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3.Tax Reimbursement.



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4.Definitions.As used in this Agreement, the following capitalized terms shall have the meaning set forth
below:



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5.Notice of Termination.Any termination of Executive's employment for any reason shall be effected pursuant to
a Notice of Termination conforming to the requirements of this section.

6.No Obligation to Mitigate Damages; No Effect on Other Contractual Rights.



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7.Successor to the Company.



8.Notice.For purposes of this Agreement, notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified or registered mail, return receipt requested, postage prepaid, as follows:

| |  | If to the Company:
Aquila, Inc..
20 West Ninth Street
Kansas City, Missouri 64105
ATTN: Corporate Secretary
If to Executive to the address of
Executive on the books of the Company.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Another address may be used if a party has furnished a different address to the other party in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.

9.Sole Agreement.This Agreement represents the entire agreement between the parties with respect to the
matters contemplated herein. Any earlier agreement relating to severance compensation between the parties or between Executive and any affiliate of the Company is hereby terminated and superseded, and
all obligations by either party thereunder shall cease immediately preceding the commencement of the term of this Agreement and are hereby agreed to be satisfied in full. No agreements or
representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The parties

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acknowledge
and agree that the severance benefits hereunder are in lieu of the benefits offered under the Company's Workforce Transition Program (or any successor severance plan or arrangement) and
that Executive shall not be eligible for any benefits under such program.

10.Validity.The invalidity or unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

11.Counterparts.This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument.

12.Legal Fees and Expenses.The Company shall pay all legal fees and expenses which Executive reasonably may
incur as a result of the Company's contesting the validity, enforceability or Executive's interpretation of, or determinations under, this Agreement.

13.Confidential Information.Executive agrees not to disclose during the term hereof or thereafter any of the
Company's confidential or trade secret information, except as required by law. Executive recognizes that Executive shall be employed in a sensitive position in which, as a result of a relationship of
trust and confidence, Executive will have access to trade secrets and other highly confidential and sensitive information. Executive further recognizes that the knowledge and informed acquired by
Executive concerning the Company's materials regarding employer/employee contracts, customers, pricing schedules, advertising and interviewing techniques, manuals, systems, procedures and forms
represent the most vital part of the Company's business and constitute by their very nature, trade secrets and confidential knowledge and information. Executive hereby stipulates and agrees that all
such information and materials shall be considered trade secrets and confidential information. If it is at any time determined that any of the information or materials identified in this Section are,
in whole or in part, not entitled to protection as trade secrets, they shall nevertheless be considered and treated as confidential information in the same manner as trade secrets, to the maximum
extent permitted by law. Executive further agrees that all such trade secrets or other confidential information, and any copy, extract or summary thereof, whether originated or prepared by or for
Executive or otherwise coming into Executive's knowledge, possession, custody, or control, shall be and remain the exclusive property of the Company.

14.Withholding.The Company may withhold from any benefits payable under this Agreement all federal, state,
city or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

15.Arbitration.Any claim or controversy arising out of or relating to this Agreement or any breach thereof
shall be settled by arbitration. Any such arbitration shall take place in Kansas City, Missouri, in accordance with the rules of the American Arbitration Association. Any award rendered shall be final
and conclusive upon the parties and judgment therein may be entered in the highest court of the forum, state or federal, having jurisdiction.

16.Attachment.Except as required by law, the right to receive payments under this Agreement shall not be
subject to anticipation, sale, encumbrance, charge, levy, or similar process or assignment by operation of law.

17.Waivers.Any waiver by a party or any breach of this Agreement by another party shall not be construed as a
continuing waiver or as a consent to any subsequent breach by the other party. Except as otherwise expressly set forth herein, no failure on the part of any party hereto to exercise and no delay in
exercising any right, power or remedy hereunder shall operate s a waiver thereof, nor

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shall
any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

18.Headings.The headings of the sections of this Agreement have been inserted for convenience of reference
only and shall in no way restrict or modify any of the terms or provisions hereof.

19.Governing Law.This Agreement shall be governed and construed and the legal relationships of the parties
determined in accordance with the laws of the State of Missouri.

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

|AQUILA, INC. |  |                                                                   
|------------ |  | ------------------------------------------------------------------
|By:          |  | /s/RICHARD C. GREENChairman, Chief Executive Officer and President
|Date:        |  | 07/10/04                                                          
|EXECUTIVE   
|By:          |  | /s/RICK J. DOBSONSenior Vice President and Chief Financial Officer
|Date:        |  | 06/11/04                                                          

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