Unassociated Document


     

     

    Exhibit
      10.2.1

     

    BEFORE
      THE STATE CORPORATION COMMISSION

     

    OF
      THE
      STATE OF KANSAS

     

    In
      the
      Matter of the Application of

    Kansas
      City Power & Light
      Company                                                                                      Docket
      No. 07-KCPE-905-RTS

    To
      Modify
      its Tariffs to Continue

    The
      Implementation of its Regulatory Plan.

     

    JOINT
      STIPULATION AND AGREEMENT

     

    As
      a
      result of extensive discussions between the Staff of the Kansas Corporation
      Commission ("Staff'), Kansas City Power & Light Company ("KCPL" or
      "Company"), and the Citizens' Utility Ratepayer Board ("CURB"), (referred to
      collectively as the "Signatories" or the "Signatory Parties"), the Signatories
      hereby submit to the Kansas Corporation Commission ("Commission") for its
      consideration and approval the following Stipulation and Agreement:

    I.           KANSAS
      CITY POWER & LIGHT COMPANY'S APPLICATION

    1.
      On
      March 1, 2007, KCPL filed an Application with the Commission to make certain
      changes in its rates and charges for electric service, which was docketed as
      the
      above-captioned proceeding. Pursuant to a Commission Order issued on March
      14,
      2007, the effective date of this Application was suspended until December 10,
      2007. This Application was the second in a series of rate cases that are
      contemplated in the Rate Plan (Appendix C of the Stipulation ("1025
      Stipulation") in Docket No. 04-KCPE-1025-GIE ("1025 Docket")), in conjunction
      with KCPL's implementation of the Resource Plan1.

     

    

      

    

      
      1
        The 1025
        Stipulation refers collectively to the “Regulatory Plan” that is comprised of a
        Resource Plan set forth in Appendices A and A-1 and the Customer Programs
        set
        forth in Appendices B and B-1, and the Rate Plan set forth in Appendices
        C, C-1
        and C-2.  References to the “regulatory Plan” within this Stipulation
        and Agreement shall have the same meaning.

    


    
      

    


    2.           The
      first rate filing made by KCPL pursuant to the 1025 Stipulation was docketed
      as
      Docket No. 06-KCPE-828-RTS ("828 Docket"), which resulted in a Stipulation
      and
      Agreement ("828 Stipulation") that was approved by the Commission on December
      4,
      2006. In accordance with the 1025 Stipulation, KCPL was provided the option
      to
      file this current rate application no later than March 1, 2007. The filing
      of
      this Application also complies with the Commission's Order in the 828 Docket,
      which required KCPL to file a rate case that included an Energy Cost Adjustment
      ("ECA") mechanism on or before March 1, 2007.

    3.           Because
      the Resource Plan involves major capital expenditures by KCPL during an
      intensive period of construction over a five-year period, the Rate Plan was
      structured to incrementally address the rate treatment for such additions and
      improvements. This second rate application pursuant to the Rate Plan also
      reflects KCPL's investment in plant and equipment since the time KCPL's rate
      base was adjusted in the 828 Docket.

    4.           The
      schedules filed with KCPL's Application indicated a gross revenue deficiency
      of
      $34,220,000, based upon normalized operating results for the 12 months ending
      December 31, 2006, adjusted for known and measurable changes in revenues,
      operating and maintenance expenses, cost of capital and taxes, and other
      adjustments. Pursuant to the Contribution In Aid of Construction ("CIAC")
      mechanism established in the 1025 Stipulation, KCPL also requested an additional
      $12.8 million in order to adequately maintain its financial ratios.

    5.           In
      addition, consistent with the 828 Stipulation, KCPL has participated in a series
      of discussions with Staff and other interested signatory parties to develop
      an
      ECA mechanism, which will be discussed in greater detail below.

    
 

    2


    
      

    

    


     

    6.           In
      support of its Application, KCPL submitted the testimony of 13 witnesses and
      the
      schedules required by K.A.R. 82-1-231.  On May
      1, 2007, consistent with the 828 Stipulation, KCPL also filed its class cost
      of
      service study and supporting testimony.

     

    II.               STAFF
      AND OTHER PARTIES' PRE-FILED POSITIONS

    7.           On
      August 3, 2007, Staff filed its direct testimony in the above docket, wherein
      it
      recommended a rate increase for KCPL of approximately $4.6 million. Staff did
      not recommend including a CIAC amortization amount in this docket. Staff also
      made certain recommendations concerning the structure of KCPL's amended ECA
      tariff, and recommended several reporting requirements with respect to the
      ECA
      mechanism.

    8.           Also
      on August 3, 2007, CURB filed testimony in which it recommended the Commission
      decrease KCPL's annual revenue requirement by approximately $3 million. For
      cash
      flow purposes, at this revenue requirement level CURB calculated a pre-tax
      payment on plant of $16.4 million which, if allowed by the Commission, would
      result in an annual increase in KCPL's rates of no more than $13.4 million.
      CURB
      also opposed implementation of an ECA.

    9.           MUUG
      and The City of Mission Hills, Kansas, also filed testimony on August 3, 2007.
      MUUG opposed the imposition of any ECA mechanism, contending consumers generally
      do not benefit from rate mechanisms that automatically pass through utility
      costs. In addition, MUUG made certain design recommendations for any ECA
      mechanism that might be adopted. The City of Mission Hills addressed KCPL's
      Municipal Ornamental Streetlighting tariff (Schedule
      MOL).

    10.           On
      August 13, 2007, Staff and MUUG each filed cross-answering
      testimony

    regarding
      the other's direct ECA mechanism testimony.

     

    3

    
      

    


     

    11.            Subsequently,
      on August 28, 29, and 31, 2007, the parties met collectively to discuss
      the terms of a stipulation and agreement.

     

    III.    TERMS
      OF
      THE STIPULATED SETTLEMENT

          After
      extensive negotiations, the
      Signatory Parties have agreed upon the following terms:

     

    A.           Stipulated
      Revenue Requirement and Customer Advancement Amount

    The
      Signatory Parties agree that KCPL's overall annual revenue increase will be
      twenty-eight million dollars ($28,000,000). However, after factoring in the
      median forecasted revenues from off-system sales that will be credited through
      the ECA mechanism, KCPL's annual net revenue increase will likely be closer
      to
      seventeen million dollars ($17 million). To provide KCPL with sufficient cash
      flow to proceed with the Resource Plan as set forth in the 1025 Stipulation,
      the
      Signatory Parties agree that eleven million dollars (811,000,000) of the total
      revenue increase will be treated for accounting purposes as a pre-tax payment
      on
      plant on behalf of customers. The $11
      million pre-tax payment on plant shall be treated as an increase
      to
      KCPL's depreciation reserve and will be assigned to primary plant accounts
      in a
      future rate case.

    B.           Energy
      Cost Adjustment (ECA) Mechanism

    The
      Signatory Parties agree that KCPL's ECA tariff
      will be as
      shown
      in Appendix A hereto. All components of such ECA mechanism
      including fuel and purchased power costs, off-system sales margins as well
      as
      the other components of the ECA tariff will be forecasted for the coming ECA
      year. On or before December 20, 2007 and each December 20 thereafter, KCPL
      will
      provide Staff with its forecasted ECA factors and supporting documentation
      for
      each of the 12 months of the following ECA year. (KCPL will provide MUUG with
      a
      copy of such initial December 20, 2007 submittal on the same day it is provided
      to Staff. MUUG agrees to maintain the confidentiality of such submittal under
      the same provisions as the Protective Order in this Docket.) The factors for
      January, February and March of the ECA year shall be set based
      upon

    
 

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    such
      forecast. KCPL will re-forecast monthly factors for each remaining month of
      the
      ECA year and provide such re-forecast ECA factors, along with supporting
      documentation, to Staff on or before March 20, 2008, June 20, 2008, and
      September 20, 2008 and each March 20, June 20 and September 20 thereafter.
      The
      ECA factors for the three months following each re-forecast shall be set based
      upon such forecast. The parties also agree that KCPL will file an annual report
      by March 1, 2009 and each March 1 thereafter including the actual annual revenue
      received through the ECA tariff for the prior ECA year and the actual fuel,
      purchased power and other costs as well as the off-system sales margins for
      the
      prior ECA year, including supporting documentation. Such report shall calculate
      the difference in these year-end totals and recommend a correction factor to
      be
      applied to the monthly ECA factors over a 12 month period beginning April 1
      following the filing. Such report will be subject to review by Staff, and any
      party granted intervener status in such proceeding, and approval of the
      Commission pursuant to the terms and conditions of Appendix A.

    The
      Signatory Parties agree that it is their intent to require KCPL to publish,
      or
      otherwise make available, ECA figures in a manner reasonably accessible to
      customers. The Signatory Parties will continue to discuss the appropriate
      mechanism necessary to accomplish this requirement.

    C.    Unused
      Energy
      ("UE1") Allocator for Off-System Sales Margins

    KCPL
      agrees to utilize its UE1 Allocator to allocate off-system sales margins to
      Kansas retail ratepayers within the context of its ECA tariff. Such UE1
      Allocator will be forecast at the start of each ECA year for use in the ECA
      factor calculation and will be trued-up for the ECA year as part of the annual
      ECA review process.

     

    5

    
      

    


    


     

    
      	
              D.

            	
              Energy
                Efficiency Program Costs to be Recovered Through an Energy Efficiency
                Rider

            


    

         In
      its Application, KCPL included in
      rate base an amount equal to KCPL's budgeted September 2007 balance of Account
      182441, the regulatory asset KCPL has established to accumulate the cost of
      all
      affordability, energy efficiency, and demand side management programs performed
      in Kansas in compliance with the 1025 Stipulation. KCPL also included in its
      cost of service a yearly amortization amount associated with the regulatory
      asset balance, using a 10-year amortization period. The Signatory Parties agree
      that until such time as either the Commission rules in Docket No.
      07-GIMX-247-GIE, the "Energy Efficiency or EE Docket" or the Kansas Legislature
      implements a new statute(s) addressing treatment of these costs, that, as an
      interim mechanism for recovery, KCPL will not include these program costs in
      its
      rate base and cost of service and instead will recover these program costs
      through an Energy Efficiency Rider ("EE Rider"). KCPL will file such EE Rider
      for Commission approval by March 1, 2008, to include costs associated with
      Commission-approved programs, including internal labor costs, incurred during
      the time period July 1, 2006 through December 31, 2007 and an effective date
      of
      July 1, 2008. Such EE Rider will recover such costs over the period July 1,
      2008
      through June 30, 2009. KCPL would file the next such EE Rider for Commission
      approval on or before March 31, 2009 to recover program costs incurred from
      January 1, 2008 through December 31, 2008 over the time period July 1, 2009
      through June 30, 2010. Thereafter, KCPL would file its new EE Rider no later
      than March 31 of each year to recover costs incurred during the prior calendar
      year for recovery over the following July through June period.

    At
      any
      time either the Commission rules on Energy Efficiency Docket or a law is passed
      regarding treatment of such expenses, KCPL shall have the right to file for
      Commission approval of compliant recovery methodology to replace or revise
      the
      EE Rider. KCPL agrees that at no

    
6
      

    


     

    time
      will
      it seek Kansas jurisdiction ratepayer recovery of program costs recorded to
      Regulatory Asset Account 182441 prior to July 1, 2006.

    E.           Performance
      Standard Data for Asset Management Plan

    In
      order
      to enable the Commission to continue to monitor and evaluate KCPL's delivery
      performance and reliability during the remainder of the Asset Management Plan
      as
      defined in the 1025 Stipulation, KCPL agrees to continue to maintain the
      following performance data through the remaining term of the Regulatory
      Plan:

    
      	
              §  

            	
              Customers
                Experiencing Multiple Interruptions in excess of three per year
                ("CEMI3");

            


    

     

    
      	
              §  

            	
              Number
                of distribution devices with four or more multiple outages by number
                of
                outages;

            


    

     

    
      	
              §  

            	
              Overall
                residential customer satisfaction survey ("CSI");
                and

            


    

     

    
      	
              §  

            	
              Trend
                and benchmark analysis for KCPL delivery operating and maintenance
                ("O&M") expense per retail customer, detailing all data and sources
                for the calculation of KCPL's performance, based on FERC Form 1
                reporting.

            


    

     

    F.           Review
      of Kansas Weather Stations for Weather Normalization
      Analysis

    KCPL
      agrees to explore with Staff the use of weather stations within KCPL's Kansas
      service territory for use in its future weather normalization analysis and
      load
      forecasting. KCPL will review the availability and completeness of data from
      such stations and the suitability of such data for use within KCPL's weather
      normalization and load forecasting methodology. Such review and exploration
      shall not require KCPL to change its methodology for weather normalization
      and
      load forecasting.

    G.           Miscellaneous
      Stipulated Accounting Provisions

    As
      agreed
      by the Signatory Parties and consistent with the 1025 Stipulation, the following
      accounting provisions should be adopted by the Commission:

     

     

    7

    
      

    




    1)            Rate
      Case Expenses

    The
      Commission authorizes KCPL to establish a regulatory asset for incremental
      rate
      case expenses incurred through the duration of Docket No. 07-KCPE-905-RTS.
      KCPL
      currently estimates the Kansas jurisdictional regulatory asset will be
      approximately $0.8 million at December 31, 2007. KCPL is authorized to amortize
      this regulatory asset over four (4) years commencing January 1, 2008. The
      deferred expenses will not receive any rate base treatment in future rate
      cases.

    The
      Commission reaffirms its Order in the 828 Docket authorizing the Company's
      four
      (4) year amortization period for rate case expenses incurred in that case with
      no rate base treatment.

    2)           Surface
      Transportation Board ("STB") Expenses

    The
      Commission reaffirms KCPL's regulatory asset and five (5) year amortization
      period beginning January 1, 2007 ordered in the 828 Docket for the Kansas
      jurisdictional portion of STB expenses incurred through December 31, 2006.
      The
      Commission also reaffirms its authorization in the 828 Docket for KCPL to
      establish a regulatory asset for actual STB expenses incurred after December
      31,
      2006, to be amortized over a five (5) year period beginning with rates effective
      in a future rate case under the Rate Plan. The deferred expenses will not
      receive any rate base treatment in future rate cases.

    3)           Talent
      Assessment Expenses

    The
      Commission authorizes KCPL to establish a regulatory asset for 2006 Talent
      Assessment expenses in the amount of $8,960,783 (Kansas jurisdictional
      $4,026,084). KCPL is authorized to amortize this regulatory asset over ten
      (10)
      years commencing January 1, 2008. The deferred expenses will not receive any
      rate base treatment in future rate cases.

    
 

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    The
      Commission reaffirms KCPL's regulatory asset, with no rate base treatment,
      and
      ten (10) year amortization period ordered in the 828 Docket, for the Kansas
      jurisdictional portion of 2005 Talent Assessment expenses.

    4)           Employee
      Augmentation Program

    The
      Commission authorizes KCPL to establish a regulatory asset for the Employee
      Augmentation Program expenses in the amount of $624,301 (Kansas jurisdictional
      $264,183). KCPL is authorized to amortize this regulatory asset over ten (10)
      years commencing January 1, 2008. The deferred expenses will not receive any
      rate base treatment in future rate cases.

    5)           Enhanced
      Security Costs

    The
      Commission reaffirms KCPL's regulatory asset, to be included in rate base,
      and
five
      (5)
      year amortization period ordered in the 828 Docket, for the Kansas
      jurisdictional portion of enhanced security costs through December 31,
      2006.

    6)           Department
      of Energy ("DOE") Wolf Creek Refund

    The
      Commission authorizes KCPL to establish a regulatory liability for a $427,150
      DOE refund
      (Kansas jurisdictional $181,305) received in 2006. KCPL will amortize this
      regulatory liability over a three (3) year period beginning January 1, 2008.
      The
      deferred refund will not receive any rate base treatment in future rate
      cases.

    7)           Pension
      Costs

    The
      Commission approves treatment of pension costs as set forth in the attached
      Appendix
      B, which is intended to be consistent with the treatment of pension costs
      outlined in Appendix C, paragraph (E) of the 1025 Stipulation.

    
9
      

    


    8)           AFUDC
      Rate on Iatan 2

    The
      Commission authorizes KCPL for purposes of calculating the equity component
      of
      the Allowance for Funds Used During Construction ("AFUDC") rate on Iatan 2
      to
      set the equity rate used in the calculation at 8.3% beginning January 1, 2008.
      This agreed upon equity component of AFUDC may be revised either through a
      Commission order determining a Return on Equity or through a Stipulation and
      Agreement in KCPL's next rate case.

    9)           Depreciation
      Rates

    The
      Commission authorizes KCPL to continue utilizing the depreciation rates set
      forth in Appendix C, which are the same rates set out in Appendix C-2 of the
      1025 Stipulation.

         10)           SO2
      Emission
      Allowances

    The
      Commission reaffirms its authorization in the 828 Docket for KCPL's sale of
      SO2
      emission allowances through June 1, 2010, including related coal premiums.
      KCPL
      will continue to record net sales proceeds to a regulatory liability (FERC
      Account 254) and offset rate base for ratemaking purposes. The regulatory
      liability will be amortized over a time period to be determined in the 2009
      rate
      filing. Such amortization shall be reflected in rates beginning with the rates
      resulting from the 2009 rate filing.

    KCPL
      currently purchases coal from vendors under contracts that indicate nominal
      sulfur content. To the extent that coal supplied has a lower sulfur content
      than
      specified in the contract, KCPL pays a premium over the contract price.
      Beginning January 1, 2008, to the extent that KCPL pays premiums for lower
      sulfur coal and has an approved ECA in place, the Commission authorizes KCPL
      to
      determine the portion of such premiums, net of joint partners' shares, that
      apply to retail sales and will record the proportionate cost of such premiums
      in
      FERC Account 254 as a reduction of the regulatory liability beginning January
      1,
      2008. But in no event will the charges to the Kansas jurisdictional portion
      of
      FERC Account 254 for these premiums exceed

    
10
      

    


    


    $5,000,000
      annually. The portion of premiums applicable to retail will be determined
      monthly based on the system-wide percentage of MWhs from coal generation used
      for retail sales versus wholesale sales as computed by the hourly energy costing
      model. This system-wide percentage will be applied to premiums invoiced during
      the same period.

    11)           Decommissioning
      Accruals for Wolf Creek

    The
      Commission approves the schedule of decommissioning cost accruals included
      in
      Appendix D, affirms that the decommissioning cost accruals are included in
      cost
      of service and are included in rates for ratemaking purposes and affirms that
      the earnings rate assumed for the trust takes into consideration the tax rate
      change and the removal of the investment restrictions resulting from the Energy
      Policy Act of 1992.

    12)           Asset
      Retirement Obligations and Cost of Removal

    The
      Commission reaffirms its Order in Docket No. 04-WSEE-605-ACT allowing KCPL
      to
      defer all costs on the balance sheet, for financial reporting purposes,
      associated with the adoption of Statement of Financial Accounting Standards
      No.
      143 ("FAS 143") and Financial Accounting Standards Board Interpretation No.
      47
      ("FIN 47"), including accretion and depreciation expenses and amounts included
      for cost of removal in depreciation rates as set forth in Appendix
      C.

    H.           Rules
      and Regulations

    The
      Signatory Parties agree that the following changes to KCPL's Rules and
      Regulations should be adopted by the Commission:

    1)           New
      Definitions

    The
      following eight definitions will be added to Section 1:

    1.15
      – ADULT: One who has reached the legal age of majority, generally 18
      years.

    
 

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    1.16
      – BILLING ERROR: The incorrect billing of an account due to a Company or
      Customer meter reading error, which results in incorrect
      charges.

     

    1.17
      – FIELD ERROR: Shall be considered to include lost/mishandled paperwork,
      installing metering incorrectly, or failure to close the meter potential or
      test
      switches. A Field Error may result in a Billing Error.

     

    1.18
      FRAUD: The misrepresentation of material facts by a customer, or other person,
      by giving false or misleading information or by concealment of that which should
      have been disclosed as a deceptive means to gain or maintain utility service,
      avoid payment for past, present or future service, or obtain a refund and so
      cause the Company or others to rely upon such misrepresentations to the
      Company's financial detriment. Includes, but is not limited to: (a) furnishing
      the Company with false names, or customer information not legally assigned
      to
      such person, (b) furnishing false or altered customer identification, (c)
      furnishing false or altered residency history, (d) furnishing false or altered
      ownership or lease papers, (e) rendering false reports of unauthorized
      electronic fund transfers to the Company.

     

    1.20
      – METER ERROR: The incorrect registration of electric consumption resulting from
      a malfunctioning or defective meter.

     

    1.21
      – RESPONSIBLE PARTY: Any adult, landlord, property management company, or owner
      applying for electric service at a given premise.

     

    1.22
      – TAMPERING: To rearrange, damage, injure, destroy, alter, or interfere with,
      Company facilities, service wires, electric meters and associated wiring,
      locking devices, or seals or otherwise prevent any Company equipment from
      performing a normal or customary function.

     

    1.24 -
      UNAUTHORIZED USE: To use or receive the direct benefit of all, or a portion
      of
      the utility service with knowledge of or reason to believe that diversion,
      tampering or other unauthorized connection existed at the time of the use,
      or
      that the use or receipt was fraudulent and/or without the authorization or
      consent of the utility. Includes but is not limited to: (a) tampering with
      or
      reconnection of service wires and/or electric meters to obtain metered use
      of
      electricity, (b) the unmetered use of electricity resulting from unauthorized
      connections, alterations or modifications to service wires and/or electric
      meters, (c) placing conductive material in the meter socket to allow unmetered
      electricity to flow from the line-side to the load-side of the service, (d)
      installing an unauthorized electric meter in place of the meter assigned to
      the
      account, (e) inverting or repositioning the meter to alter registration, (f)
      disrupting the magnetic field or wireless communication of the meter causing
      altered registration, (g) damaging or altering the electric meter to stop
      registration, (h) using electric service without compensation to the
      utility.

    

 

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    2)            Reconnection
      Charge Modifications

     

    The
      following will replace the
      Discontinuation of Service terms in Section 5, paragraph 5.08:

     

    5.08           RECONNECTION
      CHARGE:

     

    If
      electric service is discontinued for non-payment of a bill or for violation
      of
      any other provision of the Customer's service agreement except tampering and/or
      diversion, the Company shall assess reconnection charges to the Customer as
      follows:

     

    Reconnection
      of service
      meter                                                                                    $20.00

    Reconnection
      of service at the pole or service
      pedestal                                        $30.00

     

    If
      electric service is discontinued for tampering and/or diversion, the Company
      shall assess reconnection charges to the Customer as follows:

     

    Reconnection
      regardless of point of
      reconnection                                                 $55.00

    (Excessive
      damage of Company property will result in additional charges.)

     

    3)           Line
      Extension Language Changes

    The
      following will replace paragraph 8.01, items (A) and (B), (paragraph 8.01 items
      (C) and (D) remain unchanged) and paragraph 8.02 in KCPL's Line Extension and
      Distribution Policies in Section 8. In addition, KCPL agrees to modify paragraph
      8.01 to clarify customer payment options for line extensions exceeding
      one-quarter (1/4) mile.

    
      	
               

            	
              8.01

            	
              OVERHEAD
                SINGLE-PHASE RESIDENTIAL AND RURAL RESIDENTIAL
                EXTENSIONS:

            


    

     

    (A)           Company
      will make free extensions of its distribution lines as and when necessary to
      serve any and all prospective customers applying for electric service, located
      within one-quarter (1/4) mile of existing distribution lines in rural areas
      in
      which utility holds certificates of convenience and necessity from the State
      Corporation Commission. Extensions may involve application of the quarter-mile
      (1/4 mile) provision to a Customer's property line, onto a. Customer's property,
      or a combination providing extension to the Customer's property line and onto
      a
      Customer's property.

     

    (B)           The
      Company will build the first one-eighth (1/8) mile and the last one-eighth
      (1/8)
      mile of single-phase line per residential or rural residential Customer under
      its established rates and minimum charges. In the event the line extension
      exceeds one-quarter (1/4) mile per residential or rural residential Customer,
      there shall be a monthly Customer Charge or an increase in the existing monthly
      Customer Charge. The amount

    
 

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    of 
      the Customer Charge or increase to an existing monthly Customer Charge
      may be paid in equal installments over sixty consecutive
      bills.

     

    8.02            OTHER
      PERMANENT EXTENSIONS AND EXCESS FACILITIES:

     

    Each
      Application to the Company for electric service (other than an overhead
      single-phase extension for residential or rural residential electric service)
      to
      premises requiring extension of the Company's existing distribution facilities
      will be studied by the Company, as received, in order that the Company may
      determine the amount of investment warranted by the Company in making such
      extension giving full consideration to the Customer's load requirements and
      characteristics and the Company's estimated revenue from the Customer during
      the
      term of the Customer 's service agreement as may be required by the Company.
      In
      the absence of special arrangements between the Customer and the Company, any
      cost of such extension in excess of the investment warranted by the Company
      shall be deposited by the Customer with the Company. Should additional
      intervening Customers be attached to the extension covered by the Customer's
      deposit, the deposit shall be refunded to the Customer to the extent determined
      by the Company to be appropriate in each case, but in no event shall refunds
      aggregate an amount greater than the deposit. The Company shall not be obligated
      to refund any portion of a deposit after five years from the date of deposit.
      No
      interest shall accrue or be payable on any such deposit held by the
      Company.

     

    In
      those instances where a Customer requests facilities beyond that which would
      normally be provided, this shall be considered an Excess Facilities Request.
      Where the Company chooses to provide facilities at applicant's request in
      variance with the Line Extension standard, applicant shall be required to pay
      Company for the cost of such facilities including appropriate carrying charges,
      cost of insurance, replacement (or cost of removal), license and fees, taxes,
      operation and maintenance, and appropriate administrative and general expenses
      associated with such transmission, substation, and/or distribution facilities.
      Specific Terms and Conditions shall be mutually agreed upon between Company
      and
      Customer.

     

    I.           Test
      Period in Future Rate Cases

    KCPL
      agrees to use a base test period reflective of 12 months actual operation rather
      than budgeted information in future rate cases. To
      the extent KCPL may need to file certain information in a
      future rate case later than the March 1 application filing date of the
      applicable year, KCPL will coordinate such filings with Staff.

    J.           Rate
      Design

    The
      Signatory Parties agree that the rates should be apportioned among the
      respective classes of customers according to the amounts of revenue requirement
      indicated for each class in

    
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    Staff's
      cost of service as shown on Appendix E hereto. The Signatory Parties also agree
      that the amount of pre-tax payment on plant on behalf of customers should be
      equally apportioned among the respective classes of customers based upon revenue
      percentage as also shown on Appendix E. Furthermore, KCPL agrees that the final
      rate design will spread the percentage revenue increase proposed for each
      customer class to every component part of the rates of each class. Rate design
      amounts assigned to each class are subject to check in order to assure that
      rate
      design recovery is consistent with the revenue increase approved by the
      Commission. KCPL agrees to submit documentation proving that final rates, by
      tariff class and by subclass (after all Commission approved adjustments)
      generate the revenue requirement approved by the Commission. This rate design
      shall not set forth a precedent for future rate proceedings as to the method
      of
      allocation. KCPL agrees that it shall conduct a class cost of service (CCOS)
      study and report the results of that study in its next rate filing. KCPL shall
      have the right to file the results of that study in testimony as late-filed
      testimony no later than May 1, 2008. The Signatory Parties agree that direct
      testimony of Staff and non-KCPL parties in the next rate case shall not be
      due
      until at least fourteen (14) weeks following KCPL's filing of its CCOS study
      results. The Signatory Parties preserve their rights to review and oppose any
      such filing in future proceedings, including opposing any method proposed by
      any
      party regarding the allocation of rates or rate design.

     

    K.           Non-Asset-Based
      Sales Classification Process

    KCPL
      agrees to meet with the other Signatory Parties prior to KCPL's next rate filing
      to discuss KCPL's internal process for the classification of asset-based and
      non-asset-based off-system sales. On or before May 1, 2008, KCPL agrees to
      file
      its process for classifying asset-based and non-asset-based off-system sales
      for
      Commission review and approval. KCPL agrees

    
 

    15

    
      
        

      



    that
      subsequent changes to its process for classifying asset-based and
      non-asset-based off-system sales will be subject to Commission review and
      approval.

    IV.   MISCELLANEOUS
      PROVISIONS

     

    A.           The
      Commission's Rights

    Nothing
      in this Stipulation and Agreement is intended to impinge or restrict, in any
      manner, the exercise by the Commission of any statutory right, including the
      right of access to information, and any statutory obligation, including the
      obligation to ensure that KCPL is providing efficient and sufficient service
      at
      just and reasonable rates.

    B.           Signatory
      Parties' Rights

    The
      Signatory Parties, including Staff, shall have the right to present pre-filed
      testimony in support of this Stipulation. Such testimony shall be filed formally
      in the docket and presented by witnesses at a hearing on this
      Stipulation.

    C.           Parties
      not Signatories to the Agreement

    The
      Midwest Utility Users Group ("MUUG" — a group comprised of Danisco USA, Inc.,
      Shawnee Mission Unified School District #512, The City of Mission, Kansas,
      and
      The City of Overland Park, Kansas) and The City of Mission Hills, Kansas are
      not
      yet signatories to this Stipulation and Agreement, but negotiations with those
      parties continue.

    D.           Negotiated
      Settlement

    This
      Stipulation and Agreement represents a negotiated settlement that fully resolves
      the issues addressed in this document. The Signatory Parties represent that
      the
      terms of this Stipulation and Agreement constitute a fair and reasonable
      resolution of the issues addressed herein. Except as specified herein, the
      Signatory Parties shall not be prejudiced, bound by, or in any way affected
      by
      the terms of this Stipulation and Agreement: (a) in any future proceeding;
      (b)
      in any proceeding currently pending under a separate docket; and/or (c) in
      this
      proceeding

    
16
      

    


     

     

    should
      the Commission decide not to approve this Stipulation and Agreement in the
      instant proceeding. If the Commission accepts this Stipulation and Agreement
      in
      its entirety and incorporates the same into a final order without material
      modification, the parties shall be bound by its terms and the Commission's
      order
      incorporating its terms as to all issues addressed herein and in accordance
      with
      the terms hereof, and will not appeal the Commission's order on these
      issues.

    E.           Interdependent
      Provisions

    The
      provisions of this Stipulation and Agreement have resulted from negotiations
      among the Signatory Parties and are interdependent. In the event that the
      Commission does not approve and adopt the terms of this Stipulation and
      Agreement in total, it shall be voidable and no Signatory Party hereto shall
      be
      bound, prejudiced, or in any way affected by any of the agreements or provisions
      hereof. Further, in such event, this Stipulation and Agreement shall be
      considered privileged and not admissible in evidence or made a part of the
      record in any proceeding.

    F.           Submission
      of Documents To The Commission Or Staff

    To
      the
      extent this Stipulation and Agreement provides for information, documents or
      other data to be furnished to the Commission or Staff, such information,
      documents or data shall be filed with the Commission and a copy served upon
      the
      Commission's Director of Utilities. Such information, documents or data shall
      be
      marked and identified with the docket number of this proceeding.

    
17

    
      
        

      



    IN
      WITNESS WHEREOF, the Signatory Parties have executed and approved this
      Agreement, effective as of the 12th day of September 2007, by subscribing their
      signatures below.

    


    
      	
              By:

            	
              /s/
                Dana A. Bradbury

            	 
	 	
              SUSAN
                B. CUNNINGHAM

            	
              (#14085)

            
	 	
              DANA
                BRADBURY

            	
              (#11939)

            
	 	
              JASON
                T. GRAY

            	
              (#22619)

            
	 	
              MATTHEW
                R. SPURGIN

            	
              (#20470)

            
	 	
              Assistants
                General Counsel

            	 
	 	
              Kansas
                Corporation Commission

            	 
	 	
              1500
                S.W. Arrowhead Road

            	 
	 	
              Topeka,
                Kansas 66604

            	 
	 	
              (785)
                271-3100

            	 
	 	
              s.cunningham@kcc.ks.gov

              d.bradbury@kcc.ks.gov 

              j.gray@kcc.ks.gov

            	 
	 	
              m.spurgin@kcc.ks.gov

            	 


    

     

                                              ATTORNEYS
      FOR STAFF

     

    
      	
              By:

            	
              /s/
                William G. Riggins by dab

            	 
	 	
              WILLIAM
                G. RIGGINS

            	
              (#12080)

            
	 	
              Vice
                President and General Counsel

            	 
	 	
              Kansas
                City Power & Light Company

            	 
	 	
              1201
                Walnut

            	 
	 	
              Kansas
                City, MO 64106

            	 
	 	
              (816)
                556-2785

            	 
	 	
              bill.riggins@kcpl.com

            	 
	 	 	 
	 	
              FRANK
                A. CARO, JR.

            	
              (#11678)

            
	 	
              ANNE
                E. CALLENBACH

            	
              (#18488)

            
	 	
              Polsinelli
                Shalton Flanigan Suelthaus PC

            	 
	 	
              6201
                College Boulevard, Suite 500

            	 
	 	
              Overland
                Park, Kansas 66211

            	 
	 	
              913)
                451-8788

            	 
	 	
              (913)
                451-6205 Fax

            	 
	 	
              fcaro@polsinelli.com

            	 
	 	
              acallenbach@polsinelli.com

            	 
	 	 	 
	 	
              ATTORNEYS
                FOR KCPL

            	 


    

     

    


     

    18

    
      

    


    


    
      	
              By:

            	
              /s/
                David Springe

            	 
	 	
              DAVID
                SPRINGE

            	
              (#15619)

            
	 	
              Citizens'
                Utility Ratepayer Board

            	 
	 	
              1500
                SW Arrowhead Road

            	 
	 	
              Topeka,
                KS 66604 d.springe@curb.kansas.gov

            	 
	 	
               

              ATTORNEY
                FOR CURB

            	 


    

     

    


    

 

    19

    
      

    



    


    
      	 	
              THE
                STATE CORPORATION COMMISSION OF KANSAS

            	 
	 	 	 	 	
              SCHEDULE

            	
              2

            
	 	
              KANSAS
                CITY POWER & LIGHT COMPANY

            	 
	 	
                                         (Name
                of Issuing Utility)

            	
              Replacing
                Schedule

            	
               

            	
              Sheet

            	 
	 	
              Rate
                Areas No. 2 & 4

            	 	 	 
	 	
              (Territory
                to which schedule is applicable)

            	 	
              which
                was filed

            	 
	
              No
                supplement or separate understanding

              shall
                modify the tariff as shown hereon.

               

            	
               

              Sheet

               

            	
               

              1

               

            	
               

              of

               

            	
               

              4

               

            	
               

              Sheets

               

            	 
	
              ENERGY
                COST ADJUSTMENT

              Schedule
                ECA

               

              APPLICABILITY:

              This
                Energy Cost Adjustment (ECA)
                Schedule shall be applicable to all Kansas Retail Rate Schedules
                for
                KCPL.

               

              BASIS:

              Energy
                costs will be measured and applied to a customer’s bill using an ECA
                factor.  The ECA factor is applied on a kilowatt-hour basis
                ($/kWh).  Retail customer charges for energy costs are
                determined by multiplying the kilowatt-hours of electricity during
                any
                calendar month by the corresponding ECA factor for that calendar
                month.

               

              ENERGY
                COST ADJUSTMENT:

              Prior
                to January 1 of each ECA year, an ECA factor (ECAP)
                will be
                calculated for each calendar month of the ECA year as
                follows:

               

                ((FP
                + PP
                + EP
                + TP)
                -
                BPRP)    OSSMK        TRUEA

              ECAP     =     ------------------------------------------      –    -----------------    –    ------------

                       SP                                                     SK                             STRUE

              Where:

               

              FP=    Projected
                cost
                of nuclear and fossil fuel to be consumed for the generation of
                electricity during the month in which the ECA is in effect for all
                KCPL
                Retail, Requirements Sales for Resale, and Bulk Power Sales customers
                not
                included in OSSM, to be recorded in Account 501, Account 518 and
                Account
                547, excluding any KCPL internal labor cost.

               

              PP=    Projected
                cost
                of purchased power during the month in which the ECA is in effect
                for all
                KCPL Retail, Requirements Sales for Resale, and Bulk Power Sales
                customers
                not included in OSSM, to be recorded in Account 555, and KCPL’s projected
                charges or credits incurred due to participation in markets associated
                with Regional Transmission Organizations (RTOs).

               

              EP=    Projected
                cost
                of emission allowances during the month in which the ECA is in effect
                for
                all KCPL Retail, Requirements Sales for Resale, and Bulk Power Sales
                customers not included in OSSM, to be recorded In Account
                509.

               

              TP=    Projected
                transmission costs, to be recorded in Account 565, and RTO, FERC
                and NERC
                fees, to be recorded in Account 560 and Account 928, during the month
                in
                which the ECA is in effect for all KCPL Retail, Requirements Sales
                for
                Resale, and Bulk Power Sales customers not included in OSSM.

               

              BPRP =      Projected
                Revenue from asset-based Bulk Power Sales customers not included in
                OSSM.

               

              SP=    Projected
                kWhs
                to be delivered to all KCPL Retail and Requirements Sales for Resale
                customers during the month in which the ECA is in effect.

               

              OSSM
                =  Projected
                annual
                asset-based Off-System Sales Margin from Bulk Power Sales at the
                median
                for the effective ECA year.

               

              OSSMK
                = The projected
                annual asset-based Off-System Sales Margin from Bulk Power Sales
                at the
                median for the effective ECA year multiplied by the projected Unused
                Energy (UE1) Allocator for Kansas.

               

              SK         =     Projected
                annual kWhs to be delivered to all Kansas Retail customers during
                the
                effective ECA year.

               

              STRUE=  Projected
                kWhs for
                Kansas Retail customers for the twelve-month period beginning in
                April of
                the year following the ECA year.

               

               

               

            	 
	
              Issued:

            	 	 	
               

            	
              FILED

            	
               

            	 
	 	
              Month                    Day                  Year

            	 	 	 	 	 	 
	
              Effective:

            	
              January
                1, 2008

            	 	
                    THE
                STATE CORPORATION COMMISSION OF KANSAS

            	 
	 	
              Month                   Day                 Year

            	 	 	 	 	 	 
	
              By:

            	
              Chris
                Giles

            	
              Vice
                President

            	 	
              By:  

            	
               

            	 
	 	
              Title

            	 	 	 	
              Secretary

            	 


    


    
      

    



    
 

    
      	 	
              THE
                STATE CORPORATION COMMISSION OF KANSAS

            	 
	 	 	 	 	
              SCHEDULE

            	
              2

            
	 	
              KANSAS
                CITY POWER & LIGHT COMPANY

            	 
	 	
                                         (Name
                of Issuing Utility)

            	
              Replacing
                Schedule

            	
                   

            	
              Sheet

            	 
	 	
              Rate
                Areas No. 2 & 4

            	 	 	 
	 	
              (Territory
                to which schedule is applicable)

            	 	
              which
                was filed

            	
               

            
	
              No
                supplement or separate understanding

              shall
                modify the tariff as shown hereon.

               

            	
               

              Sheet

               

            	
               

              2

               

            	
               

              of

               

            	
               

              4

               

            	
               

              Sheets

               

            	 
	
              ENERGY
                COST ADJUSTMENT

              Schedule
                ECA

               

              TRUEA=  
The
                annual true-up amount
                for an ECA year, to be calculated by March 1 of the year following
                the ECA
                year and to be applied for a twelve-month period beginning April
                1 of the
                year following the ECA year.  The true-up amount will reflect
                any difference between the total ECA revenue for the Retail sales
                during
                the ECA year and the actual costs incurred to achieve those Retail
                sales
                less the credits applied for Off-System Sales Revenue for the ECA
                year.  Such true-up amount may be positive or
                negative.  Any remaining balances from prior true-up periods
                will be added.

               

                                                                                                                                                 
                SAK

              TRUEA   =      ECAREVA  –  [((FA
                + PA
                + EA
                + TA
                -
                BPRA) –  NABPCA)  x   --------
                ]  + OSSMA
                + TRUEPRIOR

                                                                                                                                                 
                SAT

              Where:

               

              ECAREVA =   Actual
                ECA revenue for Kansas Retail sales during the ECA year.

               

              FA             = 
Actual
                total company
                cost of nuclear and fossil fuel consumed for the generation of electricity
                for the ECA year recorded in Account 501, Account 518 and Account
                547,
                excluding any internal KCPL labor cost and all costs associated with
                OSSMA.

               

              PA    = 
 Actual
                total
                company cost of purchased power incurred during the ECA year recorded
                in
                Account 555, and KCPL’s actual charges or credits incurred due to
                participation in markets associated with Regional Transmission
                Organizations (RTOs) less all costs associated with OSSMA.

               

              EA    =  Actual
                total
                company emission allowance costs incurred during the ECA year recorded
                in
                Account 509 less all costs associated with OSSMA.

               

              TA    =  Actual
                total
                company transmission costs recorded in Account 565 and RTO, FERC
                and NERC
                fees recorded in Account 560 and Account 928 for the ECA year less
                all
                costs associated with OSSMA.

               

              BPRA  = 
Actual
                Revenue from asset-based
                Bulk Power Sales customers not included in OSSMA.

               

              NABPCA = 
Actual
                total company cost for
                non-asset-based sales to Bulk Power customers during the ECA year,
                as
                reflected in PA,
                and TA.

               

              OSSMA = 
Actual
                total company asset-based
                Off-System Sales Margin from Bulk Power Sales for the ECA year multiplied
                by the actual Unused Energy (UE1) Allocator for Kansas.

               

              SAK        =      Actual
                kWhs delivered to KCPL’s Kansas Retail customers during the ECA
                year.

               

              SAT  = 
Actual
                kWhs delivered to all
                KCPL Retail and Requirements Sales for Resale customers during the
                ECA
                year.

               

              TRUEPRIOR
                =Remaining true-up
                amounts from
                previous ECA years (positive or negative).

               

               

            	 
	
              Issued:

            	 	 	
               

            	
              FILED

            	
               

            	 
	 	
              Month                    Day                  Year

            	 	 	 	 	 	 
	
              Effective:

            	
              January
                1, 2008

            	 	
                    THE
                STATE CORPORATION COMMISSION OF KANSAS

            	 
	 	
              Month                   Day                 Year

            	 	 	 	 	 	 
	
              By:

            	
              Chris
                Giles

            	
              Vice
                President

            	 	
              By:  

            	
              Secretary

            	 


    

     

    
 

    
      

    



    
      	 	
              THE
                STATE CORPORATION COMMISSION OF KANSAS

            	 
	 	 	 	 	
              SCHEDULE

            	
              2

            
	 	
              KANSAS
                CITY POWER & LIGHT COMPANY

            	 
	 	
                                         (Name
                of Issuing Utility)

            	
              Replacing
                Schedule

            	
               

            	
              Sheet

            	 
	 	
              Rate
                Areas No. 2 & 4

            	 	 	 
	 	
              (Territory
                to which schedule is applicable)

            	 	
              which
                was filed

            	
               

            
	
              No
                supplement or separate understanding

              shall
                modify the tariff as shown hereon.

               

            	
               

              Sheet

               

            	
               

              3

               

            	
               

              of

               

            	
               

              4

               

            	
               

              Sheets

               

            	 
	
              ENERGY
                COST ADJUSTMENT

              Schedule
                ECA

               

              NOTES
                TO THE TARIFF:

               

              1.      By
                December 20th
                prior to
                each ECA year, KCPL will submit a report containing the projected
                monthly
                ECA factors on a $/kWh basis for each month of the coming ECA
                year.  Such report will set the monthly ECA factors for January,
                February and March of the ECA year.  KCPL will publish such
                projected monthly ECA factors, and any updates to such monthly ECA
                factors
                to consumers.

               

              2.      Prior
                to the
                20th
                day
                of March, June, and September of each ECA year, KCPL will submit
                a report
                containing updated projected ECA factors for the remaining months
                of the
                effective ECA year.   Such updated projected ECA factors
                will set the monthly ECA factors for the next calendar quarter of
                the ECA
                year.  Such report shall also compare the original ECA revenue
                projections and the then-current ECA year-end projections on a total
                revenue basis.  If the original projection and the then-current
                projection become significantly out of balance at any time during
                the ECA
                year, the remaining monthly ECA factors may be adjusted to address
                the
                anticipated difference.

               

              3.      Prior
                to the 1st
                day of March
                each year beginning March 1, 2009, KCPL will file an application
                that
                provides the true-up reconciliation for the preceding ECA year, otherwise
                known as the Actual Cost Adjustment (“ACA”).  Such
                reconciliation amount, if any, for a given ECA year will be applied
                as an
                adjustment to the monthly ECA factors for the 12-month period beginning
                April following the reconciled ECA year.  The Commission may
                make such ACA subject to correction in whole or in part, pending
                final
                determination on the application.  All revenues collected
                pursuant to the ECA tariff shall be deemed to be revenues subject
                to
                adjustment until the ACA review is complete, the Commission has issued
                a
                final order in the ACA matter, and all terms and conditions of such
                order
                are satisfied.  The Commission shall make a final determination
                on the adjustment, including the reasonableness and prudence of the
                actual
                ECA costs incurred during the ECA year, within two hundred forty
                (240)
                days of the filing of the application.  Prudent operation of
                KCPL’s system will be consistent with industry standards regarding
                economic dispatch, reliability, maintenance and fuel procurement
                as such
                is necessary to minimize the impact of this ECA tariff on customer
                rates.

               

              4.      The
                monthly ECA
                factor will be expressed in dollars per kilowatt-hour rounded to
                four
                decimal places.

               

              5.      Each
                ECA year will
                be a calendar year, with the first year beginning January 1,
                2008.

               

              6.      The
                ECA amount on
                each customer bill will be calculated such that the ECA factor for
                each
                calendar month within the billing period is applied to the estimated
                usage
                for the appropriate calendar month (i.e., prorated) based on the
                number of
                days of usage in each calendar month.

               

              7.      The
                references to
                Accounts within the ECA tariff are as defined in the FERC uniform
                system
                of accounts.

               

              8.      Retail
                Customers
                are customers that receive service under one of the KCPL Retail
                tariffs.

               

              9.      Requirements
                Sales
                for Resale Customers are wholesale customers receiving firm service
                for
                the full capacity and energy needs of the customer on a contract
                basis of
                one year or longer (Account 447).

               

              10.     
Bulk
                Power Sales
                Customers are wholesale customers receiving service under Power
                contracts.  These are Non-Requirements Sales for Resale
                customers (Account 447).

               

               

               

            	 
	
              Issued:

            	 	 	
               

            	
              FILED

            	
               

            	 
	 	
              Month                    Day                  Year

            	 	 	 	 	 	 
	
              Effective:

            	
              January
                1, 2008

            	 	
                    THE
                STATE CORPORATION COMMISSION OF KANSAS

            	 
	 	
              Month                   Day                 Year

            	 	 	 	 	 	 
	
              By:

            	
              Chris
                Giles

            	
              Vice
                President

            	 	
              By:  

            	
               

            	 
	 	
              Title

            	 	 	 	
              Secretary

            	 


    


    
      

    




    
      	 	
              THE
                STATE CORPORATION COMMISSION OF KANSAS

            	 
	 	 	 	 	
              SCHEDULE

            	
              2

            
	 	
              KANSAS
                CITY POWER & LIGHT COMPANY

            	 
	 	
                                         (Name
                of Issuing Utility)

            	
              Replacing
                Schedule

            	
                   

            	
              Sheet

            	 
	 	
              Rate
                Areas No. 2 & 4

            	 	 	 
	 	
              (Territory
                to which schedule is applicable)

            	 	
              which
                was filed

            	
                   

            
	
              No
                supplement or separate understanding

              shall
                modify the tariff as shown hereon.

               

            	
               

              Sheet

               

            	
               

              4

               

            	
               

              of

               

            	
               

              4

               

            	
               

              Sheets

               

            	 
	
              ENERGY
                COST ADJUSTMENT

              Schedule
                ECA

               

              NOTES
                TO THE TARIFF (continued):

               

              11.     
The
                Unused Energy (UE1)
                Allocator for KCPL’s Kansas jurisdiction is calculated by dividing the
                KCPL Kansas jurisdictional “Unused Energy” MWhs by the total KCPL “Unused
                Energy” MWhs.  The “Unused Energy” MWhs for each KCPL
                jurisdiction (Kansas, Missouri, and FERC) is calculated by subtracting
                the
                “Energy Used” MWhs for each jurisdiction from the “Available Energy” MWhs
                for each jurisdiction.  The “Energy Used” is based on the
                “Energy w/ Losses” Allocator (E1) which reflects the energy used by each
                jurisdiction’s customers.  The “Available Energy” is calculated
                by multiplying KCPL’s total “Available Capacity” by the total hours in the
                subject year (8760 in non-leap years) and by the jurisdictional “Demand”
                Allocator (D1) which reflects the 12-CP demand from each jurisdiction’s
                customers.  The “Available Capacity” is defined as the total MWs
                of capacity from all sources of generation and capacity purchases
                that are
                included in the cost-of-service (revenue requirement)
                calculation.

               

              12.     
This
                tariff is subject
                to KCPL’s Rules and Regulations as approved by the State Corporation
                Commission of Kansas.

               

              13.      This
                tariff is
                subject to all applicable Kansas statutes and regulations regarding
                the
                filing and investigation of complaints on unreasonable, unfair or
                unjust
                rates.

               

               

               

               

               

               

               

               

               

               

               

               

            	 
	
              Issued:

            	 	 	
               

            	
              FILED

            	
               

            	 
	 	
              Month                    Day                  Year

            	 	 	 	 	 	 
	
              Effective:

            	
              January
                1, 2008

            	 	
                    THE
                STATE CORPORATION COMMISSION OF KANSAS

            	 
	 	
              Month                   Day                 Year

            	 	 	 	 	 	 
	
              By:

            	
              Chris
                Giles

            	
              Vice
                President

            	 	
              By:  

            	
               

            	 
	 	
              Title

            	 	 	 	
              Secretary

            	 


    




    
      

    




    APPENDIX
      B

    TREATMENT
      OF PENSION COSTS

    Docket
      No. 07-KCPE-905-RTS

    


    1.           The
      intent of this pension agreement is to:

    
      	
               

            	
              ·

            	
              Ensure
                that KCPL recovers the amount of the net prepaid pension asset
                representing the recognition of a negative pension cost used in setting
                rates in prior years;

            


    

    
      	
               

            	
              ·

            	
              Ensure
                that the amount collected in rates is based on the pension cost determined
                using the methodology described below in item
                2.b.;

            


    

    
      	
               

            	
              ·

            	
              Ensure
                that, once the amount in section 4 has been collected in rates by
                KCPL,
                all pension cost collected in rates is contributed to the pension
                trust;
                and

            


    

    
      	
               

            	
              ·

            	
              Ensure
                that all amounts contributed by KCPL are recoverable in
                rates.

            


    

    2.           To
      accomplish these goals, the following items are agreed upon as part of this
      Stipulation and Agreement.

    a.           KCPL’s
      pension cost, for financial reporting purposes, will differ from the method
      used
      for ratemaking purposes described in item 2.b.  For financial
      reporting purposes, KCPL will amortize gains and losses over a five (5) year
      period.

    b.           Pension
      cost, excluding cost determined under FAS 88, used for ratemaking purposes
      will
      be calculated based on the following methodology:

    i.           Market
      Related Value for asset determination, smoothing all asset gains and losses
      that
      occur on and after January 1, 2005 over five (5) years;

     

    1

    
      

    

    ii.           No
      10% corridor; and

    iii.           Amortization
      period of ten (10) years for unrecognized gains and losses.

    3.           KCPL’s
      actuary will maintain actuarial reports under each method on an annual
      basis.  Any difference between the two methods is merely a timing
      difference that will eventually be recovered, or refunded, through rates under
      the method used in setting rates over the life of the pension
      plan.  KCPL will establish a regulatory asset or liability for the
      difference in pension cost calculated under the two methods.  No rate
      base recognition will be provided for the regulatory asset or liability
      determined pursuant to this paragraph.

    4.           Any
      pension cost amount calculated pursuant to item 2.b. above, which exceeds the
      pension contribution will reduce the prior net prepaid pension asset recognized
      in rate base currently estimated to be $12.6 million ($5.7 million Kansas
      jurisdictional), after allocation to joint owners, at December 31,
      2007.  When the prior net prepaid pension asset is reduced to zero,
      any pension cost (as calculated in item 2.b. above) that exceeds the amounts
      contributed, must be funded.  Any pension cost that is not funded
      because it exceeds the amount of funding that is tax deductible will be tracked
      as a regulatory liability to ensure it is funded in the future when it becomes
      tax deductible.

    5.           In
      the case pension cost becomes negative, KCPL is ordered to establish a
      regulatory liability to offset the negative amount.  In future years,
      when pension cost becomes positive, rates will remain zero ($0) until the
      prepaid pension asset that was created by the negative amount is reduced to
      zero
      ($0).  The regulatory liability will be reduced at the same rate as
      the prepaid pension asset is reduced until the regulatory liability becomes
      zero.  This regulatory liability is not provided rate base
      recognition.

     

     2
      
        

      

    

     

    6.           KCPL
      will be allowed to establish a regulatory asset with rate base recognition
      for
      contributions made to the pension trust in excess of pension cost calculated
      pursuant to item 2.b.

    7.           A
      regulatory asset or liability will be established on KCPL’s books to track the
      difference between the level of pension cost calculated pursuant to item 2.b.
      and the level of pension cost built into rates.  The level of pension
      cost built into rates effective January 1, 2008 is established as $40,101,040
      ($18,017,678 Kansas jurisdictional), before amounts capitalized and applicable
      to joint owners.  If the pension cost, before amounts capitalized and
      applicable to joint owners, during the rate period is more than the cost built
      into rates for the period, KCPL will establish a regulatory asset.  If
      the pension cost during the period is less than the cost built into rates,
      KCPL
      will establish a regulatory liability.  If the pension cost, before
      amounts capitalized and applicable to joint owners, becomes negative, a
      regulatory liability equal to the difference between the level of pension cost
      built into rates for that period and zero ($0) will be established.

    The
      regulatory asset or liability, currently estimated to be a $25.0 million
      ($11.2 million Kansas jurisdictional) regulatory asset at December 31, 2007
      after allocation to joint owners, will have rate base
      recognition.  The regulatory asset or liability will be amortized over
      five (5) years, with amortization for each vintage year commencing with the
      effective date of rates for which ratemaking recovery of that vintage is
      included.  Amortization included in rates at January 1, 2008, after
      amounts capitalized, is $4,866,816 ($2,186,694 Kansas
      jurisdictional).

    8.           The
      Signatory Parties agree that KCPL should follow the accounting treatment
      prescribed by the Federal Energy Regulatory Commission (FERC) in General
      Instruction No. 23 

    3

    
      
        

      

    

    regarding
      pension-related Other Comprehensive Income (OCI) and transfer existing and
      future pension OCI amounts to a regulated asset.

    9.           FAS
      88 does not allow for delayed recognition of certain unrecognized amounts in
      net
      periodic pension cost.  FAS 88 requires immediate recognition of
      certain costs arising from settlements and curtailments of defined benefit
      plans.  KCPL shall establish a regulatory asset or liability, with
      rate base recognition, for the amount of pension
      costs, before amounts capitalized determined
      pursuant to FAS 88 and the level of FAS 88 pension cost built into rates
      (currently $0), effective January 1, 2007.

    This
      regulatory asset, currently estimated to be $22.6 million at December 31, 2007
      ($10.2 million Kansas jurisdictional), after allocation to joint owners, will
      be
      amortized over five (5) years beginning January 1, 2008.  Amortization
      included in rates at January 1, 2008, after amounts capitalized, is $3,442,194
      ($1,546,602 Kansas jurisdictional).  Beginning in 2008, KCPL will be
      required to make contributions to the pension trusts in an annual amount equal
      to the FAS 88 amortization built into rates for that year.

    

 

    4

    
      

    

     

    APPENDIX
      C


    Kansas
      City Power & Light Company

    Depreciation
      & Amortization Rates

    Kansas
      Jurisdictional

    
      	
              Account

            	
               

              Acct.

              No.

            	
              Avg.

              Service

              Life

            	
               

              Net

              Salvage

            	
               

              Deprec.

              Rate

            
	
                  Total
                Steam
                Production (Note)

            	 	 	 	 
	
              Structures
                & Improvements

            	
              311

            	
              32.0

            	
              -10.0%

            	
              3.44%

            
	
              Structures
                & Improv – Haw 5 Rebuild

            	
              311

            	 	 	
              0.85%

            
	
              Boiler
                Plant Equipment (excl trains)

            	
              312

            	
              25.5

            	
              -5.0%

            	
              4.12%

            
	
              Boiler
                Plant Equipment - Trains

            	
              312

            	
              15.0

            	
              10.0%

            	
              6.00%

            
	
              Boiler
                Plant Equip-Scrubber-La Cygne

            	
              312

            	
              10.0

            	
              0.0%

            	
              10.00%

            
	
              Boiler
                Plant Equip – Haw 5 Rebuild

            	
              312

            	 	 	
              1.02%

            
	
              Turbogenerator
                Units

            	
              314

            	
              42.4

            	
              0.0%

            	
              2.36%

            
	
              Accessory
                Electric Equipment

            	
              315

            	
              33.7

            	
              5.0%

            	
              2.82%

            
	
              Accessory
                Electric Equip – Haw 5 Rebuild

            	
              315

            	 	 	
              0.70%

            
	
              Acc
                Electric Equip – Computers (like 391)

            	
              315

            	
              30.0

            	
              8.0%

            	
              3.07%

            
	
              Miscellaneous
                Power Plant Equipment

            	
              316

            	
              22.8

            	
              5.0%

            	
              4.16%

            
	
              Misc
                Power Plant Equip – Haw 5 Rebuild

            	
              316

            	 	 	
              1.03%

            
	 	 	 	 	 
	
                  Total
                Nuclear Production (Note)

            	 	 	 	 
	
              Structures
                & Improvements

            	
              321

            	 	 	
              1.55%

            
	
              Reactor
                Plant Equipment

            	
              322

            	 	 	
              1.73%

            
	
              Turbogenerator
                Unites

            	
              323

            	 	 	
              1.96%

            
	
              Accessory
                Electric Equipment

            	
              324

            	 	 	
              1.73%

            
	
              Miscellaneous
                Power Plant Equipment

            	
              325

            	 	 	
              2.36%

            
	
              Nuclear
                Plant Write-Off

            	
              328

            	 	 	
              1.73%

            
	 	 	 	 	 
	
                  Total
                Combustion Turbines

            	 	 	 	 
	
              Structures
                & Improvements

            	
              341

            	
              25.0

            	
              0.0%

            	
              4.00%

            
	
              Fuel
                Holders, Producers, & Acc. Equip.

            	
              342

            	
              25.0

            	
              0.0%

            	
              4.00%

            
	
              Generators

            	
              344

            	
              25.0

            	
              0.0%

            	
              4.00%

            
	
              Accessory
                Electric Equipment

            	
              345

            	
              25.0

            	
              0.0%

            	
              4.00%

            
	 	 	 	 	 
	
                  Total
                Wind
                Generation

            	 	 	 	 
	
              Structures
                & Improvements

            	
              341

            	
              20.0

            	 	
              5.00%

            
	
              Generators

            	
              344

            	
              20.0

            	 	
              5.00%

            
	
              Accessory
                Electric Equipment

            	
              345

            	
              20.0

            	 	
              5.00%

            
	 	 	 	 	 
	
                  Total
                Transmission Plant

            	 	 	 	 
	
              Structures
                & Improvements

            	
              352

            	
              45.0

            	
              -5.0%

            	
              2.33%

            
	
              Station
                Equipment

            	
              353

            	
              29.3

            	
              5.0%

            	
              3.24%

            
	
              Station
                Equip-Communication Equip (like 397)

            	
              353

            	
              26.0

            	
              5.0%

            	
              3.65%

            
	
              Towers
                & Fixtures

               

               

               

               

              Note:  Nuclear
                Production rates are
                based on a lifespan under a 60-year license using remaining life
                rates.            

                        Rates
                  for Steam Production Plant related to Hawthorn Unit 5 Rebuild plant
                  reflect Missouri jurisdictional rates after consideration of insurance
                  and
                  subrogation recoveries recorded in Account 108, Accumulated Provision
                  for
                  Depreciation.  Future depreciation studies will use remaining
                  life rates.

                 

                       

              

            	
              354

            	
              40.0

            	
              -10.0%

            	
              2.75%

               

               

               

               

               

               

               

            
	
                                                              APPENDIX
                C

               

               

              Poles
                & Fixtures

            	
               

               

               

              355

            	
               

               

               

              27.0

            	
               

               

               

              -5.0%

            	
               

               

               

              3.89%

            
	
              Overhead
                Conductors & Devices

            	
              356

            	
              27.0

            	
              15.0%

            	
              3.15%

            
	
              Underground
                conduit

            	
              357

            	
              50.0

            	
              -5.0%

            	
              2.10%

            
	
              Underground
                Conductors & Devices

            	
              358

            	
              50.0

            	
              10.0%

            	
              1.80%

            
	
               

                  Total
                Distribution Plant

            	 	 	 	 
	
              Structures
                & Improvements

            	
              361

            	
              45.0

            	
              -5.0%

            	
              2.33%

            
	
              Station
                Equipment

            	
              362

            	
              37.0

            	
              7.0%

            	
              2.51%

            
	
              Station
                Equip-Communication Equip (like 397)

            	
              362

            	
              26.0

            	
              5.0%

            	
              3.65%

            
	
              Poles,
                Towers, & Fixtures

            	
              364

            	
              30.0

            	
              -6.0%

            	
              3.53%

            
	
              Overhead
                Conductors & Devices

            	
              365

            	
              27.0

            	
              25.0%

            	
              2.78%

            
	
              Underground
                Conduit

            	
              366

            	
              50.0

            	
              -5.0%

            	
              2.10%

            
	
              Underground
                Conductors & Dev

            	
              367

            	
              25.0

            	
              20.0%

            	
              3.20%

            
	
              Line
                Transformers

            	
              368

            	
              25.0

            	
              10.0%

            	
              3.60%

            
	
              Services

            	
              369

            	
              33.0

            	
              5.0%

            	
              2.88%

            
	
              Meters

            	
              370

            	
              28.0

            	
              5.0%

            	
              3.39%

            
	
              Install
                on Customers’ Premises

            	
              371

            	
              8.5

            	
              2.0%

            	
              11.53%

            
	
              Street
                Lighting & Signal Systems

            	
              373

            	
              29.0

            	
              5.0%

            	
              3.28%

            
	 	 	 	 	 
	
                  Total
                General Plant

            	 	 	 	 
	
              Structures
                & Improvements

            	
              390

            	
              50.0

            	
              5.0%

            	
              1.90%

            
	
              Office
                Furniture & Equipment

            	
              391

            	
              30.0

            	
              8.0%

            	
              3.07%

            
	
              Transportation
                Equipment

            	
              392

            	
              11.0

            	
              15.0%

            	
              7.73%

            
	
              Stores
                Equipment

            	
              393

            	
              30.0

            	
              5.0%

            	
              3.17%

            
	
              Tools,
                Shop & Garage Equipment

            	
              394

            	
              27.0

            	
              5.0%

            	
              3.52%

            
	
              Laboratory
                Equipment

            	
              395

            	
              33.0

            	
              5.0%

            	
              2.88%

            
	
              Power
                Operated Equipment

            	
              396

            	
              15.0

            	
              20.0%

            	
              5.33%

            
	
              Communication
                Equipment

            	
              397

            	
              26.0

            	
              5.0%

            	
              3.65%

            
	
              Miscellaneous
                Equipment

            	
              398

            	
              17.0

            	
              5.0%

            	
              5.59%

            


    

    


    Amortization
      of Limited Term & Other Electric Plant

    
      	
              Account

            	
               

              Acct.

              No.

            	
              Avg.

              Service

              Life

            	
               

              Net

              Salvage

            	
               

              Deprec.

              Rate

            
	 	 	 	 	 
	
              Intangible
                – Five Year Software

            	
              303

            	
              5.0

            	
              0.0%

            	
              20.0%

            
	
              Intangible
                – Ten Year Software

            	
              303

            	
              10.0

            	
              0.0%

            	
              10.0%

            
	
              Intangible
                – Communication Equip (like 397)

            	
              303

            	
              26.0

            	
              5.0%

            	
              3.65%

            
	
              Intangible
                – Accessory Equip (like 345)

            	
              303

            	
              25.0

            	
              0.0%

            	
              4.00%

            
	
              Steam
                Prod–Structures & Impr-Leasehold Impr

            	
              311

            	
              Lease

            	 	 
	
              Combustion
                Turbine Plant – Land Rights

            	
              340

            	 	 	
              0.00%

            
	
              Transmission
                Plant – Land Rights

            	
              350

            	 	 	
              0.00%

            
	
              Distribution
                Plant – Land Rights

            	
              360

            	 	 	
              0.00%

            
	
              General
                –Structures & Impr-Leasehold Impr

            	
              390

            	
              Lease

            	 	 


    

    


     




    
      
              

           Note:   Nuclear
            Production rates are based on a lifespan under a 60-year license using
            remaining
            life rates.      
 Rates
          for
          Steam Production Plant related to Hawthorn Unit 5 Rebuild plant reflect
          Missouri
          jurisdictional rates after consideration of insurance and subrogation recoveries
          recorded  in Account
          108, Accumulated Provision for Depreciation.  Future depreciation
          studies will use remaining life
          rates.           

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    APPENDIX
      E



    
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
              For
                Illustrative Purposes Only

            	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
              Percentage

            	 	 	 	 	 	
              Percentage

            
	 	 	
              Staff
                Existing

            	 	
              ECA(1)

            	 	
              Staff
                Existing

            	 	
              Pre-Tax

            	 	
              Increase
                To

            	 	
              Total
                To Be

            	 	
              Change

            	 	
              ECA(1)

            	 	
              Total

            	 	
              Change

            
	 	 	
              Revenue
                w/

            	 	
              w/25th
                Percentile

            	 	
              Revenue
                w/o

            	 	
              Payment

            	 	
              Revenue

            	 	
              Recovered
                In

            	 	
              In
                Base Rate

            	 	
              w/50th
                Percentile

            	 	
              Revenue

            	 	
              in
                Revenue

            
	 	 	
              ECA
                Costs

            	 	
              OSSM

            	 	
              ECA
                Costs

            	 	
              On
                Plant

            	 	
              Requirement

            	 	
              Base
                Rates

            	 	
              Revenue

            	 	
              OSSM

            	 	
              Including
                ECA(1)

            	 	
              w/ECA(1)

            
	
              Customer
                Class

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Residential

            	 	
               $   205,377,786

            	 	
               $         20,168,329

            	 	
               $   185,209,457

            	 	
               $   5,225,678

            	 	
               $   14,099,441

            	 	
               $
                204,534,576

            	 	
              -0.41%

            	 	
               $            15,196,971

            	 	
               $      219,731,547

            	 	
              6.99%

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Small
                General Service

            	 	
                       31,451,433

            	 	
                              2,581,957

            	 	
                     28,869,476

            	 	
                       800,257

            	 	
                                      -

            	 	
                    29,669,733

            	 	
              -5.66%

            	 	
                               1,971,261

            	 	
                       31,640,994

            	 	
              0.60%

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Medium
                General Service

            	 	
                        51,687,140

            	 	
                             5,328,656

            	 	
                     46,358,484

            	 	
                      1,315,139

            	 	
                                      -

            	 	
                    47,673,623

            	 	
              -7.77%

            	 	
                            4,067,566

            	 	
                          51,741,189

            	 	
              0.10%

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Large
                General Service

            	 	
                     103,178,508

            	 	
                           13,585,630

            	 	
                     89,592,878

            	 	
                    2,625,297

            	 	
                                      -

            	 	
                      92,218,175

            	 	
              -10.62%

            	 	
                          10,435,239

            	 	
                      102,653,414

            	 	
              -0.51%

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Large
                Power Service

            	 	
                      33,470,190

            	 	
                              5,252,595

            	 	
                       28,217,595

            	 	
                        851,623

            	 	
                     2,091,000

            	 	
                      31,160,218

            	 	
              -6.90%

            	 	
                             4,052,016

            	 	
                        35,212,234

            	 	
              5.20%

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Off-Peak
                Lighting

            	 	
                        1,490,389

            	 	
                                 258,731

            	 	
                         1,231,658

            	 	
                         37,922

            	 	
                                      -

            	 	
                       1,269,580

            	 	
              -14.82%

            	 	
                               204,093

            	 	
                           1,473,673

            	 	
              -1.12%

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Other
                Lighting

            	 	
                         5,662,750

            	 	
                                 198,667

            	 	
                       5,464,083

            	 	
                       144,084

            	 	
                         809,559

            	 	
                        6,417,726

            	 	
              13.33%

            	 	
                                 156,427

            	 	
                           6,574,153

            	 	
              16.09%

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                   Total

            	 	
               $   432,318,196

            	 	
               $          47,374,565

            	 	
               $  384,943,631

            	 	
               $
                11,000,000

            	 	
               $  17,000,000

            	 	
               $  412,943,631

            	 	
              -4.48%

            	 	
               $         36,083,573

            	 	
               $   449,027,204

            	 	
              3.86%

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              (1)
                The ECA amount will be determined based upon application of the ECA
                tariff
                (Schedule ECA).

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                   The
                ECA includes fuel, purchased power, emissions and transmission costs
                for
                Retail, Requirements Sales for Resale, and Bulk Power Sales customers
                as
                well as long-term asset-based bulk power sales revenue and short-term
                asset-based off-system sales margins as defined in the ECA
                tariff.