UNITED
                                          STATES
 SECURITIES
                                          AND EXCHANGE COMMISSION
 Washington,
                                          D.C. 20549
 
 **FORM
                                          10-K**
 
 [X]
                                          ANNUAL REPORT PURSUANT TO SECTION 13 OR
                                          15(d) OF THE SECURITIES
 EXCHANGE
                                          ACT OF 1934
 
 For
                                          the
                                          fiscal year ended **December
                                          31, 2005**
 
 or
 
 [
                                          ]
                                          TRANSITION REPORT PURSUANT SECTION 13 OR
                                          15(d) OF THE SECURITIES
 EXCHANGE
                                          ACT OF 1934
 For
                                          the
                                          transition period from _______to_______
 
 **Exact
                                                    name of registrant as specified
                                                    in charter,****Commission**
                                                
                                                **state
                                                    of incorporation, address of
                                                    principal**
                                                
                                                **I.R.S.
                                                    Employer****File
                                                    Number**
                                                
                                                **executive
                                                    offices and telephone number**
                                                
                                                **Identification
                                                    Number**001-32206
                                                
                                                **GREAT
                                                    PLAINS ENERGY INCORPORATED**
                                                
                                                43-1916803(A
                                                    Missouri Corporation)1201
                                                    Walnut StreetKansas
                                                    City, Missouri 64106(816)
                                                    556-2200www.greatplainsenergy.com1-707
                                                
                                                **KANSAS
                                                    CITY POWER & LIGHT COMPANY**
                                                
                                                44-0308720(A
                                                    Missouri Corporation)1201
                                                    Walnut StreetKansas
                                                    City, Missouri 64106(816)
                                                    556-2200www.kcpl.com
 
 **Each
                                          of the following classes or series of securities
                                          registered pursuant to Section
                                          12(b) of the Act is registered on the New
                                          York Stock
                                          Exchange:**
 
 **Registrant**
                                                **Title
                                                    of each class**Great
                                                    Plains Energy Incorporated
                                                Cumulative
                                                    Preferred Stock par value $100
                                                    per share
                                                3.80%Cumulative
                                                    Preferred Stock par value $100
                                                    per share
                                                4.50%Cumulative
                                                    Preferred Stock par value $100
                                                    per share
                                                4.35%Common
                                                    Stock without par valueIncome
                                                    PRIDESSM
 
 Securities
                                          registered pursuant to Section 12(g) of
                                          the Act.  None.
 
 
  
 Indicate
                                                          by check mark if the registrant
                                                          is a well-known seasoned
                                                          issuer, as
                                                          defined in Rule 405 of
                                                          the Securities Act.Great
                                                          Plains Energy Incorporated
                                                      Yes
                                                      X
                                                      No
                                                      
                                                      
                                                      Kansas
                                                          City Power & Light Company
                                                      Yes
                                                      
                                                      No
                                                      XIndicate
                                                          by check mark if the registrant
                                                          is not required to file
                                                          reports pursuant
                                                          to Section 13 or Section
                                                          15(d) of the Act.Great
                                                          Plains Energy Incorporated
                                                      Yes
                                                      
                                                      No
                                                      X
                                                      
                                                      Kansas
                                                          City Power & Light Company
                                                      Yes
                                                      X
                                                      NoIndicate
                                                          by check mark whether the
                                                          registrant (1) has filed
                                                          all reports required to
                                                          be filed by Section 13
                                                          or 15(d) of theSecurities
                                                          Exchange Act of 1934 during
                                                          the preceding 12 months
                                                          (or for such shorter
                                                          period that the registrant
                                                          was required tofile
                                                          such reports), and (2)
                                                          has been subject to such
                                                          filing requirements for
                                                          the past 90 days.Great
                                                          Plains Energy Incorporated
                                                      Yes
                                                      X
                                                      No
                                                      
                                                      
                                                      Kansas
                                                          City Power & Light Company
                                                      Yes
                                                      
                                                      No
                                                      XIndicate
                                                          by check mark if disclosure
                                                          of delinquent filers pursuant
                                                          to Item 405 of
                                                          Regulation S-K is not contained
                                                          herein, and willnot
                                                          be contained, to the best
                                                          of registrant’s knowledge, in definitive
                                                          proxy
                                                          or information statements
                                                          incorporated by referencein
                                                          Part III of this Form 10-K
                                                          or any amendment to the
                                                          Form
                                                          10-K.Indicate
                                                          by check mark whether the
                                                          registrant is a large accelerated
                                                          filer, an
                                                          accelerated filer or a
                                                          non-accelerated filer.
                                                          Seedefinition
                                                          of “accelerated filer and large
                                                          accelerated filer” in Rule 12b-2 of the
                                                          Exchange Act.Great
                                                          Plains Energy Incorporated
                                                      Large
                                                          accelerated filer
                                                      X
                                                      Accelerated
                                                          filer
                                                      
                                                      
                                                      Non-accelerated
                                                          filerKansas
                                                          City Power & Light Company
                                                      Large
                                                          accelerated filer
                                                      
                                                      Accelerated
                                                          filer
                                                      
                                                      
                                                      Non-accelerated
                                                          filer
                                                      XIndicate
                                                          by check mark whether the
                                                          registrant is a shell company
                                                          (as defined in
                                                          Rule 12b-2 of the Exchange
                                                          Act).Great
                                                          Plains Energy Incorporated
                                                      Yes
                                                      
                                                      No
                                                      X
                                                      
                                                      Kansas
                                                          City Power & Light Company
                                                      Yes
                                                      
                                                      No
                                                      XThe
                                                          aggregate market value
                                                          of the voting and non-voting
                                                          common equity held by
                                                          non-affiliates of Great
                                                          Plains EnergyIncorporated
                                                          (based on the closing price
                                                          of its common stock on
                                                          the New York Stock
                                                          Exchange on June 30, 2005)
                                                          wasapproximately
                                                          $2,380,255,632. All of
                                                          the common equity of Kansas
                                                          City Power & Light
                                                          Company is held by Great
                                                          PlainsEnergy
                                                          Incorporated, an affiliate
                                                          of Kansas City Power & Light
                                                          Company.On
                                                          February 28, 2006, Great
                                                          Plains Energy Incorporated
                                                          had 74,835,687 shares
                                                          of common stock outstanding.
                                                          Theaggregate
                                                          market value of the common
                                                          stock held by non-affiliates
                                                          of Great Plains
                                                          Energy Incorporated (based
                                                          upon theclosing
                                                          price of its common stock
                                                          on the New York Stock Exchange
                                                          on February 28,
                                                          2006) was approximately$2,115,604,125.
                                                          On February 28, 2006, Kansas
                                                          City Power & Light Company had one share
                                                          of common stock outstandingand
                                                          held by Great Plains Energy
                                                          Incorporated.**Documents
                                                          Incorporated by Reference**Portions
                                                          of the 2006 Proxy Statement
                                                          of**Great
                                                          Plains Energy Incorporated**to
                                                          be filed with the Securities
                                                          and ExchangeCommission
                                                          are incorporated by reference
                                                          in Part III of this
                                                          report.
 **TABLE
                                                    OF CONTENTS****Page****Number**Cautionary
                                                    Statements Regarding Forward-Looking
                                                    Information
                                                
                                                3Glossary
                                                    of Terms
                                                
                                                4PART
                                                    IItem
                                                    1
                                                Business
                                                
                                                6Item
                                                    1A
                                                Risk
                                                    Factors
                                                
                                                15Item
                                                    1B
                                                Unresolved
                                                    Staff Comments
                                                
                                                20Item
                                                    2
                                                Properties
                                                
                                                21Item
                                                    3
                                                Legal
                                                    Proceedings
                                                
                                                22Item
                                                    4
                                                Submission
                                                    of Matters to a Vote of Security
                                                    Holders
                                                
                                                24PART
                                                    IIItem
                                                    5
                                                Market
                                                    for the Registrant's Common Equity,
                                                    Related Stockholder
                                                    Mattersand
                                                    Issuer Purchases of Equity Securities
                                                
                                                24Item
                                                    6
                                                Selected
                                                    Financial Data
                                                
                                                26Item
                                                    7
                                                Management's
                                                    Discussion and Analysis of Financial
                                                    Conditionand
                                                    Results of Operation
                                                
                                                27Item
                                                    7A
                                                Quantitative
                                                    and Qualitative Disclosures About
                                                    Market Risks
                                                
                                                54Item
                                                    8
                                                Consolidated
                                                    Financial Statements and Supplementary
                                                    DataGreat
                                                    Plains EnergyConsolidated
                                                    Statements of Income
                                                
                                                57Consolidated
                                                    Balance Sheets
                                                
                                                58Consolidated
                                                    Statements of Cash Flows
                                                
                                                60Consolidated
                                                    Statements of Common Stock Equity
                                                
                                                61Consolidated
                                                    Statements of Comprehensive Income
                                                
                                                62Kansas
                                                    City Power & Light CompanyConsolidated
                                                    Statements of Income
                                                
                                                63Consolidated
                                                    Balance Sheets
                                                
                                                64Consolidated
                                                    Statements of Cash Flows
                                                
                                                66Consolidated
                                                    Statements of Common Stock Equity
                                                
                                                67Consolidated
                                                    Statements of Comprehensive Income
                                                
                                                68Great
                                                    Plains EnergyKansas
                                                    City Power & Light CompanyNotes
                                                    to Consolidated Financial Statements
                                                
                                                69Item
                                                    9
                                                Changes
                                                    in and Disagreements With Accountants
                                                    on Accountingand
                                                    Financial Disclosure
                                                
                                                123Item
                                                    9A
                                                Controls
                                                    and Procedures
                                                
                                                123Item
                                                    9B
                                                Other
                                                    Information
                                                
                                                126PART
                                                    IIIItem
                                                    10
                                                Directors
                                                    and Executive Officers of the
                                                    Registrants
                                                
                                                126Item
                                                    11
                                                Executive
                                                    Compensation
                                                
                                                129Item
                                                    12
                                                Security
                                                    Ownership of Certain Beneficial
                                                    Owners and Managementand
                                                    Related Stockholder Matters
                                                
                                                138Item
                                                    13
                                                Certain
                                                    Relationships and Related Transactions
                                                
                                                139Item
                                                    14
                                                Principal
                                                    Accounting Fees and Services
                                                
                                                139PART
                                                    IVItem
                                                    15
                                                Exhibits,
                                                    Financial Statement Schedules
                                                
                                                140
 2
 Great
                                        Plains Energy Incorporated and Kansas City
                                        Power & Light Company separately
                                        file this combined Annual Report on Form
                                        10-K. Information contained herein
                                        relating to an individual registrant and
                                        its subsidiaries is filed by such
                                        registrant on its own behalf. Each registrant
                                        makes representations only as to
                                        information relating to itself and its subsidiaries.
                                        This report should be read
                                        in its entirety. No one section of the report
                                        deals with all aspects of the
                                        subject matter.
 Kansas
                                        City Power & Light Company is not required to file reports
                                        with the
                                        Securities and Exchange Commission (SEC)
                                        under Sections 13(a), 13(c), 14 or
                                        15(d) of the Securities Exchange Act of 1934,
                                        as amended (the Exchange Act);
                                        however, Kansas City Power & Light Company has continued to file such
                                        reports, including this Annual Report on
                                        Form 10-K, with the SEC voluntarily and
                                        will continue to do so. In addition, Kansas
                                        City Power & Light Company may
                                        determine to register its common stock under
                                        Section 12(g) of the Exchange Act
                                        and upon the effectiveness of the registration
                                        it will be required to file such
                                        reports.
  **CAUTIONARY
                                        STATEMENTS REGARDING CERTAIN FORWARD-LOOKING
                                        INFORMATION**
 *Statements
                                        made in this report that are not based on
                                        historical facts are forward-looking,
                                        may involve risks and uncertainties, and
                                        are intended to be as of the date when
                                        made. In connection with the safe harbor
                                        provisions of the Private Securities
                                        Litigation Reform Act of 1995, the registrants
                                        are providing a number of
                                        important factors that could cause actual
                                        results to differ materially from the
                                        provided forward-looking information. These
                                        important factors
                                        include:*
  *·*
                                            *future
                                                economic conditions in the regional,
                                                national and international markets,
                                                including but not limited to regional
                                                and national wholesale electricity
                                                markets* *·*
                                            *market
                                                perception of the energy industry
                                                and the
                                                Company* *·*
                                            *changes
                                                in business strategy, operations
                                                or development
                                                plans* *·*
                                            *effects
                                                of current or proposed state and
                                                federal legislative and regulatory
                                                actions or developments, including,
                                                but not limited to, deregulation,
                                                re-regulation and restructuring of
                                                the electric utility
                                                industry* *·*
                                            *adverse
                                                changes in applicable laws, regulations,
                                                rules, principles or practices
                                                governing tax, accounting and environmental
                                                matters including, but not
                                                limited to, air quality* *·*
                                            *financial
                                                market conditions and performance
                                                including, but not limited to, changes
                                                in interest rates and in availability
                                                and cost of capital and the effects
                                                on the Company’s pension plan assets and
                                                costs* *·*
                                            *credit
                                                ratings* *·*
                                            *inflation
                                                rates* *·*
                                            *effectiveness
                                                of risk management policies and procedures
                                                and the ability of
                                                counterparties to satisfy their contractual
                                                commitments* *·*
                                            *impact
                                                of terrorist acts* *·*
                                            *increased
                                                competition including, but not limited
                                                to, retail choice in the electric
                                                utility industry and the entry of
                                                new
                                                competitors* *·*
                                            *ability
                                                to carry out marketing and sales
                                                plans* *·*
                                            *weather
                                                conditions including weather-related
                                                damage* *·*
                                            *cost,
                                                availability, quality and deliverability
                                                of
                                                fuel* *·*
                                            *ability
                                                to achieve generation planning goals
                                                and the occurrence and duration of
                                                unplanned generation outages* *·*
                                            *delays
                                                in the anticipated in-service dates
                                                of additional generating
                                                capacity* *·*
                                            *nuclear
                                                operations* *·*
                                            *ability
                                                to enter new markets successfully
                                                and capitalize on growth opportunities
                                                in non-regulated businesses* *·*
                                            *performance
                                                of projects undertaken by the Company’s non-regulated businesses and the
                                                success of efforts to invest in and
                                                develop new opportunities
                                                and* *·*
                                            *other
                                                risks and uncertainties.* 
 This
                                        list
                                        of factors is not all-inclusive because it
                                        is not possible to predict all
                                        factors. Item 1A. Risk Factors included in
                                        this report should be carefully read
                                        for further understanding of potential risks
                                        to the companies. Other sections of
                                        this report and other periodic reports filed
                                        by the companies with the SEC
                                        should also be read for more information
                                        regarding risk factors.
  3
 **GLOSSARY
                                          OF TERMS**
  The
                                        following is a glossary of frequently used
                                        abbreviations or acronyms that are
                                        found throughout this report.
  **Abbreviation
                                                  or Acronym**
                                              
                                              **Definition****ARO**
                                              
                                              Asset
                                                  Retirement Obligation**BART**
                                              
                                              Best
                                                  available retrofit technology**CAIR**
                                              
                                              Clean
                                                  Air Interstate Rule**CAMR**
                                              
                                              Clean
                                                  Air Mercury Rule**Clean
                                                  Air Act**
                                              
                                              Clean
                                                  Air Act Amendments of 1990**CO****2**
                                              
                                              Carbon
                                                  Dioxide**Company**
                                              
                                              Great
                                                  Plains Energy Incorporated and
                                                  its subsidiaries**Consolidated
                                                  KCP&L**
                                              
                                              KCP&L
                                                  and its wholly owned subsidiaries**Digital
                                                  Teleport**
                                              
                                              Digital
                                                  Teleport, Inc.**DOE**
                                              
                                              Department
                                                  of Energy**DTI**
                                              
                                              DTI
                                                  Holdings, Inc. and its subsidiaries,
                                                  Digital Teleport, Inc.
                                                and
                                                  Digital Teleport of Virginia, Inc.**EBITDA**
                                              
                                              Earnings
                                                  before interest, income taxes,
                                                  depreciation and
                                                  amortization**EEI**
                                              
                                              Edison
                                                  Electric Institute**EIRR**
                                              
                                              Environmental
                                                  Improvement Revenue Refunding**EPA**
                                              
                                              Environmental
                                                  Protection Agency**EPS**
                                              
                                              Earnings
                                                  per common share**FASB**
                                              
                                              Financial
                                                  Accounting Standards Board**FELINE
                                                  PRIDES****SM**
                                              
                                              Flexible
                                                  Equity Linked Preferred Increased
                                                  Dividend Equity Securities,a
                                                  service mark of Merrill Lynch & Co., Inc.**FERC**
                                              
                                              The
                                                  Federal Energy Regulatory Commission**FIN**
                                              
                                              Financial
                                                  Accounting Standards Board Interpretation**GAAP**
                                              
                                              Generally
                                                  Accepted Accounting Principles**GPP**
                                              
                                              Great
                                                  Plains Power Incorporated**Great
                                                  Plains Energy**
                                              
                                              Great
                                                  Plains Energy Incorporated and
                                                  its subsidiaries**Holdings**
                                              
                                              DTI
                                                  Holdings, Inc.**HSS**
                                              
                                              Home
                                                  Service Solutions Inc., a wholly
                                                  owned subsidiary of KCP&L**IEC**
                                              
                                              Innovative
                                                  Energy Consultants Inc., a wholly
                                                  owned subsidiary
                                                of
                                                  Great Plains Energy**ISO**
                                              
                                              Independent
                                                  System Operator**KCC**
                                              
                                              The
                                                  State Corporation Commission of
                                                  the State of Kansas**KCP&L**
                                              
                                              Kansas
                                                  City Power & Light Company, a wholly owned subsidiary
                                                of
                                                  Great Plains Energy**KLT
                                                  Gas**
                                              
                                              KLT
                                                  Gas Inc., a wholly owned subsidiary
                                                  of KLT Inc.**KLT
                                                  Gas portfolio**
                                              
                                              KLT
                                                  Gas natural gas properties**KLT
                                                  Inc.**
                                              
                                              KLT
                                                  Inc., a wholly owned subsidiary
                                                  of Great Plains Energy**KLT
                                                  Investments**
                                              
                                              KLT
                                                  Investments Inc., a wholly owned
                                                  subsidiary of KLT Inc.**KLT
                                                  Telecom**
                                              
                                              KLT
                                                  Telecom Inc., a wholly owned subsidiary
                                                  of KLT Inc.**KW**
                                              
                                              Kilowatt**kWh**
                                              
                                              Kilowatt
                                                  hour**MAC**
                                              
                                              Material
                                                  Adverse Change**MD&A**
                                              
                                              Management’s
                                                  Discussion and Analysis of Financial
                                                  Condition andResults
                                                  of Operations
  4
  **Abbreviation
                                                  or Acronym**
                                              
                                              **Definition****MISO**
                                              
                                              Midwest
                                                  Independent Transmission System
                                                  Operator, Inc.**MPSC**
                                              
                                              Public
                                                  Service Commission of the State
                                                  of Missouri**MW**
                                              
                                              Megawatt**MWh**
                                              
                                              Megawatt
                                                  hour**NEIL**
                                              
                                              Nuclear
                                                  Electric Insurance Limited**NO****x**
                                              
                                              Nitrogen
                                                  Oxide**NPNS**
                                              
                                              Normal
                                                  Purchases and Normal Sales**NRC**
                                              
                                              Nuclear
                                                  Regulatory Commission**OCI**
                                              
                                              Other
                                                  Comprehensive Income**PJM**
                                              
                                              PJM
                                                  Interconnection**PRB**
                                              
                                              Powder
                                                  River Basin**PURPA**
                                              
                                              Public
                                                  Utility Regulatory Policy Act**Receivables
                                                  Company**
                                              
                                              Kansas
                                                  City Power & Light Receivables Company, a wholly
                                                  owned
                                                subsidiary
                                                  of
                                                  KCP&L**RTO**
                                              
                                              Regional
                                                  Transmission Organization**SEC**
                                              
                                              Securities
                                                  and Exchange Commission**SECA**
                                              
                                              Seams
                                                  Elimination Charge Adjustment**SE
                                                  Holdings**
                                              
                                              SE
                                                  Holdings, L.L.C.**Services**
                                              
                                              Great
                                                  Plains Energy Services Incorporated**SFAS**
                                              
                                              Statement
                                                  of Financial Accounting Standards**SO****2**
                                              
                                              Sulfur
                                                  Dioxide**SPP**
                                              
                                              Southwest
                                                  Power Pool, Inc.**Strategic
                                                  Energy**
                                              
                                              Strategic
                                                  Energy, L.L.C., a subsidiary of
                                                  KLT Energy Services**T
                                                  - Lock**
                                              
                                              Treasury
                                                  Lock**Union
                                                  Pacific**
                                              
                                              Union
                                                  Pacific Railroad Company**WCNOC**
                                              
                                              Wolf
                                                  Creek Nuclear Operating Corporation**Wolf
                                                  Creek**
                                              
                                              Wolf
                                                  Creek Generating Station**Worry
                                                  Free**
                                              
                                              Worry
                                                  Free Service, Inc., a wholly owned
                                                  subsidiary of
                                                  HSS
    5
 **PART
                                        I**
  **ITEM
                                        1. BUSINESS**
  **General**
 Great
                                        Plains Energy Incorporated and Kansas City
                                        Power & Light Company are
                                        separate registrants filing this combined
                                        annual report. The terms “Great Plains
                                        Energy,” “Company,” “KCP&L” and “consolidated KCP&L” are used throughout
                                        this report. “Great Plains Energy” and the “Company” refer to Great Plains
                                        Energy Incorporated and its consolidated
                                        subsidiaries, unless otherwise
                                        indicated. “KCP&L” refers to Kansas City Power & Light Company, and
“consolidated KCP&L” refers to KCP&L and its consolidated
                                        subsidiaries.
  Information
                                        in other Items of this report as to which
                                        reference is made in this Item 1. is
                                        hereby incorporated by reference in this
                                        Item 1. The use of terms such as see or
                                        refer to shall be deemed to incorporate into
                                        this Item 1. the information to
                                        which such reference is made.
  **GREAT
                                        PLAINS ENERGY**
 Great
                                        Plains Energy, a Missouri corporation incorporated
                                        in 2001 and headquartered in
                                        Kansas City, Missouri, is a public utility
                                        holding company and does not own or
                                        operate any significant assets other than
                                        the stock of its subsidiaries. Great
                                        Plains Energy has four direct subsidiaries
                                        with operations or active
                                        subsidiaries:
  ·
                                            KCP&L
                                                is described below.  ·
                                            KLT
                                                Inc. is an intermediate holding company
                                                that primarily holds, directly or
                                                indirectly, interests in Strategic
                                                Energy, L.L.C. (Strategic Energy),
                                                which provides competitive retail
                                                electricity supply services in several
                                                electricity markets offering retail
                                                choice, and affordable housing limited
                                                partnerships. KLT Inc. also wholly
                                                owns KLT Gas Inc. (KLT Gas). See
                                                Note 8
                                                to the consolidated financial statements
                                                for additional information
                                                regarding KLT Gas discontinued operations.  ·
                                            Innovative
                                                Energy Consultants Inc. (IEC) is
                                                an intermediate holding company that
                                                holds an indirect interest in Strategic
                                                Energy. IEC does not own or
                                                operate any assets other than its
                                                indirect interest in Strategic Energy.
                                                When combined with KLT Inc.’s indirect interest in Strategic
                                                Energy, the
                                                Company owns just under 100% of the
                                                indirect interest in Strategic Energy.  ·
                                            Great
                                                Plains Energy Services Incorporated
                                                (Services) provides services at cost
                                                to Great Plains Energy and its subsidiaries,
                                                including consolidated
                                                KCP&L.  Great
                                        Plains Energy’s wholly owned subsidiary, Great Plains Power
                                        Incorporated (GPP),
                                        focused on the development of wholesale generation.
                                        GPP sold all of its capital
                                        assets related to the siting and permitting
                                        process for construction of Iatan
                                        No. 2, a coal-fired generating plant, to
                                        KCP&L, at cost, during 2005. GPP
                                        was dissolved in 2005.
  **Executing
                                        On Strategic Intent**
 For
                                        a
                                        discussion of the Company’s strategic intent and KCP&L’s comprehensive
                                        energy plan, please refer to the Executing
                                        On Strategic Intent section in Item
                                        7. Management’s Discussion and Analysis of Financial Condition
                                        and Results of
                                        Operations (MD&A) and Note 5 to the consolidated financial
                                        statements for
                                        additional discussion of KCP&L’s comprehensive energy plan.
   6
 **CONSOLIDATED
                                        KCP&L**
 KCP&L,
                                        a Missouri corporation incorporated in 1922,
                                        is an integrated, regulated
                                        electric utility, which provides electricity
                                        to customers primarily in the
                                        states of Missouri and Kansas. KCP&L’s wholly owned subsidiary, Home Service
                                        Solutions Inc. (HSS), sold its wholly owned
                                        subsidiary Worry Free Service, Inc.
                                        (Worry Free) in February 2005 and completed
                                        the disposition of its interest in
                                        R.S. Andrews Enterprises, Inc. (RSAE) in
                                        June 2003. After these sales, HSS has
                                        no active operations.
  **Business
                                        Segments of Great Plains Energy and KCP&L**
 Consolidated
                                        KCP&L’s sole reportable business segment is KCP&L. Great Plains Energy,
                                        through its direct and indirect subsidiaries,
                                        has two reportable business
                                        segments: KCP&L and Strategic Energy.
  For
                                        information regarding the revenues, income
                                        and assets attributable to the
                                        Company's reportable business segments, see
                                        Note 17 to the consolidated
                                        financial statements. Comparative financial
                                        information and discussion regarding
                                        the Company’s and KCP&L’s reportable business segments can be found
                                        in Item
                                        7. MD&A.
  **Regulation
                                        - General**
 Regulatory
                                        matters affecting KCP&L and Strategic Energy are described below
                                        in the
                                        discussion on each of these reportable business
                                        segments.
  **Capital
                                        Program and Financing**
 For
                                        information on the Company's and KCP&L’s capital program and financial
                                        needs, see Item 7. MD&A ,
                                        Capital
                                        Requirements and Liquidity section and Notes
                                        18 and 19 to the consolidated
                                        financial statements.
  **KCP&L**
 KCP&L,
                                        headquartered in Kansas City, Missouri, engages
                                        in the generation, transmission,
                                        distribution and sale of electricity. KCP&L serves approximately
                                        500,000 customers located in all or portions of 24
                                        counties in western Missouri and
                                        eastern Kansas. Customers include approximately
                                        440,000 residences, over 55,000 commercial firms, and over 2,200 industrials, municipalities and other electric
                                        utilities. KCP&L’s retail
                                        revenues averaged approximately 82% of its
                                        total operating revenues over the last three
                                        years. Wholesale firm power, bulk
                                        power sales and miscellaneous electric revenues
                                        accounted for the remainder of
                                        utility revenues. KCP&L is significantly impacted by seasonality
                                        with
                                        approximately one-third of its retail revenues
                                        recorded in the third quarter.
                                        KCP&L’s total electric revenues averaged approximately
                                        45% of Great
                                        Plains Energy’s revenues over the last three years. KCP&L’s income from
                                        continuing operations accounted for approximately
                                        88%, 86% and 67% of Great
                                        Plains Energy’s income from continuing operations in 2005,
                                        2004 and 2003,
                                        respectively.
  **Regulation**
 KCP&L
                                        is regulated by the Public Service Commission
                                        of the State of Missouri (MPSC)
                                        and The State Corporation Commission of the
                                        State of Kansas (KCC) with respect
                                        to retail rates, certain accounting matters,
                                        standards of service and, in
                                        certain cases, the issuance of securities,
                                        certification of facilities and
                                        service territories. KCP&L is classified as a public utility under
                                        the
                                        Federal Power Act and accordingly, is subject
                                        to regulation by the Federal
                                        Energy Regulatory Commission (FERC). By virtue
                                        of its 47% ownership interest in
                                        Wolf Creek Generating Station (Wolf Creek),
                                        KCP&L is subject to regulation
                                        by the Nuclear Regulatory Commission (NRC),
                                        with respect to licensing,
                                        operations and safety-related requirements.
  Missouri
                                        jurisdictional retail revenues averaged 57 %
                                        of
                                        KCP&L’s total retail revenue over the last three
                                        years. Kansas
                                        jurisdictional retail revenues averaged 43 %
                                        of
                                        KCP&L’s total retail revenue over the last three
                                        years. See Item 7.
                                        MD&A, Critical Accounting Policies section and
                                        Note 5 to the consolidated
                                        financial statements for additional information
                                        concerning regulatory
                                        matters.
  7
 ***Missouri
                                          and Kansas Rate Case Filings***
 In
                                        February 2006, KCP&L filed rate cases with the MPSC and the
                                        KCC. For
                                        information on these rate cases, see Note
                                        5 to the consolidated financial
                                        statements for additional discussion of KCP&L’s comprehensive energy plan.
  ***Southwest
                                        Power Pool Regional Transmission Organization***
 Under
                                        FERC Order 2000, KCP&L, as an investor-owned utility, is strongly
                                        encouraged
                                        to join a FERC approved RTO. See Note 5 to
                                        the consolidated financial statements
                                        for further information.
  **Competition**
 Missouri
                                        and Kansas continue on the fully integrated
                                        utility model and no legislation
                                        authorizing retail choice has been introduced
                                        in Missouri or Kansas for several
                                        years. As a result, KCP&L does not compete with others to supply
                                        and deliver
                                        electricity in its franchised service territory,
                                        although other sources of
                                        energy can provide alternatives to KCP&L’s customers. If Missouri or Kansas
                                        were to pass and implement legislation authorizing
                                        or mandating retail choice,
                                        KCP&L may no longer be able to apply regulated
                                        utility accounting principles
                                        to deregulated portions of its operations
                                        and may be required to write off
                                        certain regulatory assets and liabilities.
  KCP&L
                                        does compete in the wholesale market to sell
                                        power in circumstances when power
                                        generated is not required for customers in
                                        its service territory. KCP&L
                                        competes in this regard with other owners
                                        of generating stations, principally
                                        utilities in its region, on the basis of
                                        availability and price. In recent years
                                        these wholesale sales have been an important
                                        source of revenues to
                                        KCP&L.
  **Power
                                        Supply**
 KCP&L
                                        is a member of the Southwest Power Pool,
                                        Inc. (SPP) reliability region. As one
                                        of the ten regional members of the North
                                        American Electric Reliability Council,
                                        SPP is responsible for maintaining reliability
                                        in its area through coordination
                                        of planning and operations. As a member of
                                        the SPP, KCP&L is required to
                                        maintain a capacity margin of at least 12%
                                        of its projected peak summer demand.
                                        This net positive supply of capacity and
                                        energy is maintained through its
                                        generation assets and capacity, power purchase
                                        agreements and peak demand
                                        reduction programs. The capacity margin is
                                        designed to ensure the reliability of
                                        electric energy in the SPP region in the
                                        event of operational failure of power
                                        generating units utilized by the members
                                        of the SPP.
  KCP&L’s
                                        maximum system net hourly summer peak load
                                        of 3,610 MW occurred on August 21,
                                        2003. The maximum winter peak load of 2,563 MW
                                        occurred on December 7, 2005. During 2005,
                                        the summer peak load was
                                        3,512 MW. The
                                        projected peak summer demand for 2006 is
                                        3,595 MW.
                                        KCP&L expects to meet its projected capacity
                                        requirements for the years 2006
                                        through 2009 with its generation assets and
                                        through short-term capacity
                                        purchases, additional demand-side management
                                        and efficiency programs and the
                                        addition of wind generation. As part of its
                                        comprehensive energy plan, KCP&L
                                        expects to have Iatan No. 2 in service in
                                        2010.
  8
 ***Fuel***
 The
                                        principal sources of fuel for KCP&L’s electric generation are coal and
                                        nuclear fuel. KCP&L expects, with normal weather, to satisfy
                                        approximately
                                        98% of its 2006 fuel requirements from these
                                        sources with the remainder provided
                                        by natural gas and oil. The actual 2005 and
                                        estimated 2006 fuel mix and
                                        delivered cost in cents per net kWh generated
                                        are in the following
                                        table .
 **Fuel
                                                    cost in cents per****Fuel
                                                    Mix****(a)**
                                                
                                                **net
                                                    kWh generated****Estimated**
                                                **Actual**
                                                **Estimated**
                                                **Actual**Fuel
                                                
                                                **2006**
                                                **2005**
                                                **2006**
                                                **2005**Coal
                                                
                                                
                                                77
                                                %
                                                
                                                77
                                                %
                                                
                                                1.24
                                                
                                                
                                                1.01Nuclear
                                                
                                                
                                                21
                                                
                                                
                                                21
                                                
                                                
                                                0.44
                                                
                                                
                                                0.44Natural
                                                    gas and oil
                                                
                                                
                                                2
                                                
                                                
                                                2
                                                
                                                
                                                11.15
                                                
                                                
                                                8.29Total
                                                    Generation
                                                
                                                
                                                100
                                                %
                                                
                                                100
                                                %
                                                
                                                1.22
                                                
                                                
                                                1.06(a)Fuel mix based on percent of
                                                    total MWhs
                                                    generated.
 Less
                                        than
                                        1% of KCP&L’s rates contain an automatic fuel adjustment
                                        clause.
                                        Consequently, to the extent the price of
                                        coal, coal transportation, nuclear
                                        fuel, nuclear fuel processing, natural gas
                                        or purchased power increase
                                        significantly after the expiration of the
                                        contracts described in this section,
                                        or if KCP&L’s lower fuel cost units do not meet anticipated
                                        availability
                                        levels, KCP&L’s net income may be adversely affected until
                                        the increased
                                        cost could be reflected in rates.
  ***Coal***
 During
                                        2006, KCP&L’s generating units, including jointly owned
                                        units, are projected
                                        to burn approximately 13.5 million
                                        tons of coal. KCP&L has entered into coal-purchase contracts
                                        with various
                                        suppliers in Wyoming's Powder River Basin
                                        (PRB), the nation's principal supply
                                        region of low-sulfur coal, and with local
                                        suppliers. These contracts will
                                        satisfy all projected coal requirements for
                                        2006 and
                                        2007
                                        and 84%, 35% and 22% respectively, for 2008 through 2010. The
                                        remainder of KCP&L’s coal
                                        requirements will be fulfilled through additional
                                        contracts or spot market
                                        purchases. KCP&L has entered into its coal contracts over
                                        time at higher
                                        average prices affecting coal costs for 2006
                                        and beyond.
  KCP&L
                                        has also entered into rail transportation
                                        contracts with various railroads for
                                        moving coal from the PRB to its generating
                                        units. These contracts will satisfy
                                        approximately all of the projected requirements
                                        for 2006 and
                                        2007
                                        and 98%, 78% and 77% ,
                                        respectively, for 2008 through 2010; however,
                                        KCP&L has been experiencing
                                        coal delivery issues. Coal transportation
                                        costs are expected to increase in 2006
                                        and beyond. See Note 15 to the consolidated
                                        financial statements regarding a
                                        rate complaint case against Union Pacific
                                        Railroad Company. See Item 7.
                                        MD&A, KCP&L Business Overview for additional information.
  ***Nuclear
                                        Fuel***
 KCP&L
                                        owns 47% of Wolf Creek Nuclear Operating
                                        Corporation (WCNOC), the operating
                                        company for Wolf Creek, its only nuclear
                                        generating unit. Wolf Creek purchases
                                        uranium and has it processed for use as fuel
                                        in its reactor. This is a three
                                        step process that involves conversion of
                                        uranium concentrates to uranium
                                        hexafluoride, enrichment of uranium hexafluoride
                                        and fabrication of nuclear fuel
                                        assemblies. The owners of Wolf Creek have
                                        on hand or under contract 100% of the
                                        uranium and conversion services needed to
                                        operate Wolf Creek through September
                                        2009. The owners also have under contract
                                        100% of the uranium enrichment
                                        required to operate Wolf Creek through March
                                        2008. Fabrication requirements are
                                        under contract through 2024. Letters of intent
                                        have been issued with suppliers
                                        for a substantial portion of Wolf Creek’s uranium, conversion and enrichment
                                        requirements extending through at least 2017.
  9
  All
                                        uranium, uranium conversion and uranium enrichment
                                        arrangements, as well as the
                                        fabrication agreement, have been entered
                                        into in the ordinary course of
                                        business. However, contraction and consolidation
                                        among suppliers of these
                                        commodities and services, coupled with increasing
                                        worldwide demand and past
                                        inventory drawdowns, have introduced some
                                        uncertainty as to Wolf Creek's ability
                                        to replace some of these contracts in the
                                        event of a protracted supply
                                        disruption. Great Plains Energy’s management believes this potential problem
                                        is
                                        common to the nuclear industry. Accordingly,
                                        in the event the affected contracts
                                        were required to be replaced, Great Plains
                                        Energy’s and Wolf Creek's management
                                        believes that the industry and government
                                        would work together to minimize
                                        disruption of the nuclear industry's operations,
                                        including Wolf Creek's
                                        operations.
  See
                                        Note
                                        4 to the consolidated financial statements
                                        for additional information regarding
                                        nuclear plant.
  ***Natural
                                        Gas***
 KCP&L
                                        is projecting decreased use of natural gas
                                        during 2006 as a result of
                                        KCP&L’s projected normal summer weather and fewer
                                        plant outages in 2006.
                                        KCP&L has hedged approximately 45% of its
                                        2006 projected natural gas usage for generation
                                        requirements to serve retail
                                        load and firm MWh sales.
  ***Purchased
                                        Power***
 At
                                        times,
                                        KCP&L purchases power to meet its customers’ needs. Management believes
                                        KCP&L will be able to obtain enough power to
                                        meet its future demands due to
                                        the coordination of planning and operations
                                        in the SPP region; however, price
                                        and availability of power purchases may be
                                        impacted during periods of high
                                        demand. KCP&L’s purchased power, as a percent of MWh requirements,
                                        averaged
                                        approximately 5% for
                                        2005, 2004 and 2003.
  **Environmental
                                        Matters**
 KCP&L’s
                                        operations are subject to regulation by federal,
                                        state and local authorities
                                        with regard to air and other environmental
                                        matters. The generation and
                                        transmission of electricity produces and
                                        requires disposal of certain hazardous
                                        products that are subject to these laws and
                                        regulations. In addition to imposing
                                        continuing compliance obligations, these
                                        laws and regulations authorize the
                                        imposition of substantial penalties for noncompliance,
                                        including fines,
                                        injunctive relief and other sanctions. Failure
                                        to comply with these laws and
                                        regulations could have a material adverse
                                        effect on KCP&L.
  KCP&L
                                        operates in an environmentally responsible
                                        manner and seeks to use current
                                        technology to avoid and treat contamination.
                                        KCP&L regularly conducts
                                        environmental audits designed to ensure compliance
                                        with governmental regulations
                                        and to detect contamination. Environmental-related
                                        legislation is continuously
                                        introduced in Congress. Such legislation
                                        typically includes various compliance
                                        dates and compliance limits. Such legislation
                                        could have the potential for a
                                        significant financial impact on KCP&L, including the installation of new
                                        pollution control equipment to achieve compliance.
                                        However, KCP&L would seek
                                        recovery of capital costs and expenses for
                                        such compliance through rates.
                                        KCP&L will continue to monitor proposed legislation.
                                        See Note 13 to the
                                        consolidated financial statements for additional
                                        information regarding
                                        environmental matters.
  **STRATEGIC
                                        ENERGY**
 Great
                                        Plains Energy owns just under 100% of the
                                        indirect interest in Strategic Energy.
                                        Strategic Energy provides competitive retail
                                        electricity supply services by
                                        entering into power supply contracts to supply
                                        electricity to its end-use
                                        customers. Of the states that offer retail
                                        choice, Strategic Energy operates in
                                        California, Maryland, Massachusetts, Michigan,
                                        New Jersey, New York, Ohio,
                                        Pennsylvania and Texas. In addition to competitive
                                        retail electricity supply
                                        services, Strategic Energy records insignificant
                                        wholesale revenues and
                                        purchased power expense incidental to the
                                        retail services provided.
                                        Strategic Energy also provides strategic
                                        planning, consulting and billing and
                                        scheduling services in the natural gas and
                                        electricity markets.
  10
  Strategic
                                        Energy provides services to approximately
                                        51,000 commercial, institutional and small manufacturing
                                        accounts for approximately
                                        10,300 customers including numerous Fortune 500
                                        companies, smaller companies and
                                        governmental entities. Strategic Energy’s projected MWh deliveries for 2006
                                        based on signed contracts and expected additional
                                        MWh contracts and deliveries
                                        are in the range of 16 to 18 million
                                        MWhs. Based solely on expected usage under
                                        current signed contracts, Strategic
                                        Energy has forecasted future MWh commitments
                                        (backlog) of 10.4 million, 4.3
                                        million and 2.3 million for the
                                        years 2006 through 2008, respectively.
  Strategic
                                        Energy’s revenues averaged approximately 55% of Great
                                        Plains Energy’s revenues over the last three years. Strategic
                                        Energy’s net
                                        income accounted for approximately 17%, 24%
                                        and 21% of Great
                                        Plains Energy’s income from continuing operations in 2005,
                                        2004 and 2003,
                                        respectively.
  Strategic
                                        Energy’s growth objective is to continue to expand
                                        in retail choice states and
                                        continue to earn its share of a large and
                                        growing market opportunity. Strategic
                                        Energy’s continued success is dependent on a number
                                        of industry and operational
                                        factors including, but not limited to, the
                                        ability to contract for wholesale
                                        MWhs to meet its customers’ needs at prices that are competitive with
                                        the host
                                        utility territory rates and with current
                                        and/or future competitors, the ability
                                        to provide value-added customer services
                                        and the ability to attract and retain
                                        employees experienced in providing service
                                        in retail choice states.
  **Power
                                        Supply**
 Strategic
                                        Energy does not own any generation, transmission
                                        or distribution facilities.
                                        Strategic Energy purchases blocks of electricity
                                        from power suppliers based on
                                        forecasted peak demand for its retail customers.
                                        Management believes it will
                                        have adequate access to energy in the markets
                                        it serves.
  **Regulation**
 Strategic
                                        Energy, as a participant in the wholesale
                                        electricity and transmission markets,
                                        is subject to FERC jurisdiction. Additionally,
                                        Strategic Energy is subject to
                                        regulation by state regulatory agencies in
                                        states where Strategic Energy is
                                        licensed to sell power. Each state has a
                                        public utility commission and rules
                                        related to retail choice. Each state’s rules are distinct and may conflict.
                                        These rules do not restrict the amount Strategic
                                        Energy can charge for its
                                        services, but can have an impact on Strategic
                                        Energy’s ability to provide retail
                                        electricity services in any jurisdiction.
  ***Texas***
 During
                                        2005, the Public Utility Commission of Texas
                                        (Texas PUC) opened a project to
                                        review rules related to the Price-to-Beat
                                        (PTB) and Provider of Last Resort.
                                        Should the Texas PUC change the current PTB
                                        mechanism to one that is less
                                        reflective of market-based rates, the change
                                        could have an impact on this
                                        competitive market and Strategic Energy’s prospects for growth in
                                        Texas.
  ***Seams
                                        Elimination Charge Adjustment***
 Seams
                                        Elimination Charge Adjustment (SECA) is a
                                        transitional pricing mechanism
                                        authorized by FERC and intended to compensate
                                        transmission owners for the
                                        revenue lost as a result of FERC’s elimination of regional through and out
                                        rates
                                        between PJM Interconnection (PJM) and the
                                        Midwest Independent Transmission
                                        System Operator, Inc. (MISO) during a 16-month
                                        transition period from December
                                        1, 2004, through March 31, 2006. See Note
                                        5 to the consolidated financial
                                        statements for further information regarding
                                        SECA.
  ***Transmission***
 In
                                        many
                                        markets, RTOs/ISOs manage the power flows,
                                        maintain reliability and administer
                                        transmission access for the electric transmission
                                        grid in a defined region.
                                        RTOs/ISOs coordinate and monitor communications
                                        among the generator, distributor
                                        and retail electricity provider. Additionally,
                                        RTOs/ISOs manage the real-time
                                        electricity supply and demand, and direct
                                        the energy flow. Through these
                                        activities RTOs/ISOs maintain a reliable
                                        energy supply within their region.
  11
  As
                                          a
                                          competitive retail electricity supplier,
                                          Strategic Energy must register with
                                          each RTO/ISO in order to operate in the
                                          markets covered by their grids.
                                          Strategic Energy primarily engages with
                                          PJM, New England RTO (formerly ISO-New
                                          England), California ISO, New York ISO,
                                          Electric Reliability Council of Texas
                                          (ERCOT) and MISO.
 In
                                        some
                                        cases, RTO/ISOs provide Strategic Energy
                                        with all or a combination of the data
                                        for billing, settlement, application of electricity
                                        rates and information
                                        regarding the imbalance of electricity supply.
                                        In addition, they provide
                                        balancing energy services and ancillary services
                                        to Strategic Energy in the
                                        fulfillment of providing services to retail
                                        end users. Strategic Energy must go
                                        through a settlement process with each RTO/ISO
                                        in which the RTO/ISO compares
                                        scheduled power with actual meter usage during
                                        a given time period and adjusts
                                        the original costs charged to Strategic Energy
                                        through a revised settlement. All
                                        participants in the RTOs/ISOs have exposure
                                        to other market participants. In the
                                        event of default by a market participant
                                        within the RTOs/ISOs, the uncollectible
                                        balance is generally allocated to the remaining
                                        participants in proportion to
                                        their load share.
  RTOs/ISOs
                                        may continue to modify the market structure
                                        and mechanisms in an attempt to
                                        improve market efficiency. In addition, existing
                                        regulations may be revised or
                                        reinterpreted and new laws and regulations
                                        may be adopted or become applicable
                                        to Strategic Energy’s activities. These actions could have an
                                        effect on
                                        Strategic Energy’s results of operations. Strategic Energy
                                        participates
                                        extensively, together with other market participants,
                                        in relevant RTO/ISO
                                        governance and regulatory issues.
  **Competition**
 Strategic
                                        Energy operates in several retail choice
                                        electricity markets. Strategic Energy
                                        has several competitors that operate in most
                                        or all of the same states in which
                                        it provides services to customers. Some of
                                        these competitors also operate in
                                        states other than where Strategic Energy
                                        has operations. Strategic Energy also
                                        faces competition in certain markets from
                                        regional suppliers and deregulated
                                        utility affiliates formed by holding companies
                                        affiliated with regulated
                                        utilities to provide retail load in their
                                        home market territories. Strategic
                                        Energy’s competitors vary in size from small companies
                                        to large corporations,
                                        some of which have significantly greater
                                        financial, marketing, and procurement
                                        resources than Strategic Energy. Additionally,
                                        Strategic Energy, as well as its
                                        other competitors, must compete with the
                                        host utility in order to convince
                                        customers to switch from the host utility.
                                        In most markets, there is a
                                        regulatory lag that slows the adjustment
                                        of host public utility rates in
                                        response to changes in wholesale prices,
                                        which may negatively affect Strategic
                                        Energy’s ability to compete in a rising wholesale
                                        price environment. The
                                        principal elements of competition are price,
                                        service and product
                                        differentiation.
  **GREAT
                                        PLAINS ENERGY AND CONSOLIDATED KCP&L EMPLOYEES**
 At
                                        December 31, 2005, Great Plains Energy had
                                        2,382 employees. Consolidated KCP&L had 2,078 employees, including 1,335 represented by three local unions of the
                                        International Brotherhood of Electrical
                                        Workers (IBEW). KCP&L has labor agreements with Local 1613, representing
                                        clerical employees (expires March 31, 2008),
                                        with Local 1464, representing
                                        transmission and distribution workers (expires
                                        January 31, 2009), and with Local
                                        412, representing power plant workers (expires
                                        February 28, 2007).
  All
                                          of
                                          the individuals in the following table
                                          have been officers or employees in a
                                          responsible position with the Company for
                                          the past five years except as noted in
                                          the footnotes. The term of office of each
                                          officer commences with his or her
                                          appointment by the Board of Directors and
                                          ends at such time as the Board of
                                          Directors may determine. There are no family
                                          relationships between any of the
                                          executive officers, nor any arrangement
                                          or understanding between any executive
                                          officer and any other person involved in
                                          officer selection.
  12
  **Officers
                                                  of Great Plains Energy****Name**
                                              **Age**
                                              **Current
                                                  Position(s)**
                                              **Year
                                                  First Assumed**
                                                **An
                                                  Officer Position**Michael
                                                  J. Chesser(a)*
                                              57
                                              Chairman
                                                  of the Board and Chief Executive
                                                  Officer
                                              2003William
                                                  H. Downey(b)*
                                              61
                                              President
                                                  and Chief Operating Officer
                                              2000Terry
                                                  Bassham(c)*
                                              45
                                              Executive
                                                  Vice President, Finance and Strategic
                                                  Development and Chief Financial
                                                  Officer
                                              2005Michael
                                                  W. Cline(d)
                                              44
                                              Treasurer
                                                  and Chief Risk Officer
                                              2003Barbara
                                                  B. Curry(e)*
                                              51
                                              Senior
                                                  Vice President, Corporate Services
                                                  and Corporate Secretary
                                              2005Michael
                                                  L. Deggendorf(f)
                                              44
                                              Vice
                                                  President, Public Affairs
                                              2005Stephen
                                                  T. Easley(g)*
                                              50
                                              Senior
                                                  Vice President, Supply - KCP&L
                                              2000Mark
                                                  G. English(h)*
                                              54
                                              General
                                                  Counsel and Assistant Secretary
                                              2003Chris
                                                  B. Giles(i)*
                                              52
                                              Vice
                                                  President, Regulatory Affairs -
                                                  KCP&L
                                              2005Todd
                                                  A. Kobayashi(j)
                                              38
                                              Vice
                                                  President, Strategy and Investor
                                                  Relations
                                              2005Shahid
                                                  Malik(k)*
                                              45
                                              Executive
                                                  Vice President
                                                President
                                                  and Chief Executive Officer - Strategic
                                                  Energy
                                              2004John
                                                  R. Marshall(l)*
                                              56
                                              Senior
                                                  Vice President, Delivery - KCP&L
                                              2005William
                                                  G. Riggins(m)*
                                              47
                                              Vice
                                                  President, Legal and Environmental
                                                  Affairs and General Counsel -
                                                  KCP&L
                                              2000Lori
                                                  A. Wright(n)*
                                              43
                                              Controller
                                              2002John
                                                  J. DeStefano(o)*
                                              56
                                              President -
                                                  Great Plains Power Incorporated
                                                President -
                                                  Home Service Solutions Inc.
                                              1989
 
 13
  **Officers
                                                  of KCP&L****Name**
                                              **Age**
                                              **Current
                                                  Position(s)**
                                              **Year
                                                  First Assumed**
                                                **An
                                                  Officer Position**Michael
                                                  J. Chesser(a)*
                                              57
                                              Chairman
                                                  of the Board
                                              2003William
                                                  H. Downey(b)*
                                              61
                                              President and
                                                  Chief Executive Officer
                                              2000Terry
                                                  Bassham(c)*
                                              45
                                              Chief
                                                  Financial Officer
                                              2005Lora
                                                  C. Cheatum(p)*
                                              49
                                              Vice
                                                  President, Administrative Services
                                              2005Michael
                                                  W. Cline(d)
                                              44
                                              Treasurer
                                              2003F.
                                                  Dana Crawford(q)*
                                              55
                                              Vice
                                                  President, Plant Operations
                                              2005Barbara
                                                  B. Curry(e)*
                                              51
                                              Secretary
                                              2005Stephen
                                                  T. Easley(g)*
                                              50
                                              Senior
                                                  Vice President, Supply
                                              2000Mark
                                                  G. English(h)
                                              54
                                              Assistant
                                                  Secretary
                                              2003Chris
                                                  B. Giles(i)*
                                              52
                                              Vice
                                                  President, Regulatory Affairs
                                              2005William
                                                  P. Herdegen III(r)*
                                              51
                                              Vice
                                                  President, Customer Operations
                                              2001John
                                                  R. Marshall(l)*
                                              56
                                              Senior
                                                  Vice President, Delivery
                                              2005William
                                                  G. Riggins(m)*
                                              47
                                              Vice
                                                  President, Legal and Environmental
                                                  Affairs and General
                                                  Counsel
                                              2000Marvin
                                                  L. Rollison(s)
                                              53
                                              Vice
                                                  President, Corporate Culture and
                                                  Community Strategy
                                              2005Richard
                                                  A. Spring *
                                              51
                                              Vice
                                                  President, Transmission
                                              1994Lori
                                                  A. Wright(n)*
                                              43
                                              Controller
                                              2002
 *
                                              Designated
                                                  an executive officer.
 (a)
                                              Mr.
                                                  Chesser was previously Chief Executive
                                                  Officer of United Water (2002-2003)
                                                  and President and Chief Executive
                                                  Officer of GPU Energy
                                                  (2000-2002).
 (b)
                                              Mr.
                                                  Downey was previously Executive
                                                  Vice President of Great Plains
                                                  Energy
                                                  (2001- 2003) and Executive Vice
                                                  President of KCP&L (2000-2002) and
                                                  President - KCP&L Delivery Division
                                                  (2000-2002).
 (c)
                                              Mr.
                                                  Bassham was previously Executive
                                                  Vice President, Chief Financial
                                                  and
                                                  Administrative Officer (2001-2005)
                                                  and Executive Vice President and
                                                  General Counsel (2000-2001) of
                                                  El Paso Electric
                                                  Company.
 (d)
                                              Mr.
                                                  Cline was previously Treasurer
                                                  of Great Plains Energy (2005),
                                                  Assistant
                                                  Treasurer of Great Plains Energy
                                                  and KCP&L (2003-2005), Director,
                                                  Corporate Finance (2001-2002),
                                                  and Assistant Treasurer*-*Corporate
                                                  Finance of Corning Inc. (2001).
 (e)
                                              Ms.
                                                  Curry was previously Senior Vice
                                                  President, Retail Operations (2003-2004),
                                                  Executive Vice President, Global
                                                  Human Resources (2001-2003) and
                                                  Executive
                                                  Vice President, Corporate Services
                                                  (1997-2001) of TXU
                                                  Corporation.
 (f)
                                              Mr.
                                                  Deggendorf was previously Senior
                                                  Director, Energy Solutions of KCP&L
                                                  (2002-2005), Senior Vice President
                                                  of Everest Connections, a cable
                                                  services company (2000-2002) and
                                                  Vice President of UtiliCorp
                                                  Communications (2000-2002).
 (g)
                                              Mr.
                                                  Easley was previously Vice President,
                                                  Generation Services (2002-2005),
                                                  President and CEO of GPP (2001-2002)
                                                  and Vice President - Business
                                                  Development of KCP&L Power Division (2000-2001). He
                                                  was promoted to
                                                  Senior Vice President, Supply of
                                                  KCP&L in March 2005. (i)
                                              Mr. Giles was
                                                previously Senior Director, Regulatory
                                                Affairs and Business Planning (2004-2005)
                                                and Director, Regulatory Affairs
                                                of KCP&L (1993-2004).
  14
 (j)
                                                  Mr.
                                                      Kobayashi was previously Investor
                                                      Relations Officer (2002-2005)
                                                      and
                                                      Director*-*Investor
                                                      Relations and Corporate Development
                                                      of Lante Corporation, a technology
                                                      consulting firm (2000-2002).
 (k)
                                                  Mr.
                                                      Malik was appointed as President
                                                      and Chief Executive Officer
                                                      of Strategic
                                                      Energy effective November 10,
                                                      2004 and was appointed Executive
                                                      Vice
                                                      President of Great Plains Energy
                                                      effective January 1, 2006.
                                                      Mr. Malik
                                                      was previously a partner of
                                                      Sirius Solutions LLP, a consulting
                                                      company,
                                                      (2002-2004) and President of
                                                      Reliant Energy Wholesale Marketing
                                                      Group
                                                      (1999-2002).
 (l)
                                                  Mr.
                                                      Marshall was previously President
                                                      of Coastal Partners, Inc.,
                                                      a strategy
                                                      consulting company (2001-2005),
                                                      Senior Vice President, Customer
                                                      Service of
                                                      Tennessee Valley Authority
                                                      (2002-2004), and President
                                                      of Duquesne Light
                                                      Company (1999-2001). (m)
                                                  Mr. Riggins
                                                      was previously General Counsel
                                                      of Great
                                                      Plains Energy (2000-2005). (n)
                                                  Ms.
                                                      Wright served as Assistant
                                                      Controller of KCP&L from 2001 until named
                                                      Controller in 2002 and was
                                                      Director of Accounting and
                                                      Reporting of
                                                      American Electric Power Company,
                                                      Inc.
                                                      (2000-2001). (o)
                                                  Mr.
                                                      DeStefano retired December
                                                      31, 2005. (p)
                                                  Ms.
                                                      Cheatum was previously Interim
                                                      Vice President, Human Resources
                                                      (2004-2005)
                                                      and Director, Human Resources
                                                      (2001-2004) of KCP&L, and Regional Human
                                                      Resources Director (1999-2001)
                                                      of McLane Distribution, a division
                                                      of
                                                      Wal-Mart. (q)
                                                  Mr.
                                                      Crawford was previously Plant
                                                      Manager (1994-2005) of KCP&L’s LaCygne
                                                      Generating Station. (r)
                                                  Mr.
                                                      Herdegen was Chief Operating
                                                      Officer of Laramore, Douglass
                                                      and Popham, an
                                                      engineering consulting company,
                                                      (2001) and Vice President and
                                                      Director of
                                                      Utilities Practice of System
                                                      Development Integration, a
                                                      consulting
                                                      company, (1999-2001). (s)
                                                  Mr.
                                                    Rollison was previously
                                                    Supervisor-Engineering
                                                    (2000-2005).
  **Available
                                        Information**
 Great
                                        Plains Energy’s website is www.greatplainsenergy.com and
                                        KCP&L’s website is www.kcpl.com .
                                        Information contained on the companies’ websites is not incorporated herein.
                                        Both companies make available, free of charge,
                                        on or through their websites,
                                        their annual reports on Form 10-K, quarterly
                                        reports on Form 10-Q, current
                                        reports on Form 8-K and amendments to those
                                        reports filed or furnished pursuant
                                        to Section 13(a) or 15(d) of the Securities
                                        Exchange Act as soon as reasonably
                                        practicable after the companies electronically
                                        file such material with, or
                                        furnish it to, the SEC. In addition, the
                                        companies make available on or through
                                        their websites all other reports, notifications
                                        and certifications filed
                                        electronically with the SEC.
  **ITEM
                                        1A. RISK FACTORS**
  Actual
                                        results in future periods for Great Plains
                                        Energy and consolidated KCP&L
                                        could differ materially from historical results
                                        and the forward-looking
                                        statements contained in this report. Factors
                                        that might cause or contribute to
                                        such differences include, but are not limited
                                        to, those discussed below. The
                                        companies’ business is influenced by many factors that
                                        are difficult to predict,
                                        involve uncertainties that may materially
                                        affect actual results, and are often
                                        beyond the companies’ control. Additional risks and uncertainties
                                        not presently
                                        known or that the companies’ management currently believes to be immaterial
                                        may
                                        also adversely affect the companies. The
                                        risk factors described below, as well
                                        as the other information included in this
                                        Annual Report and in the other
                                        documents filed with the SEC, should be carefully
                                        considered before making an
                                        investment in the Company’s securities. Risk factors of consolidated
                                        KCP&L
                                        are also risk factors for Great Plains Energy.
  **The
                                        Company has Regulatory Risks**
 The
                                        Company is subject to extensive federal and
                                        state regulation, as described
                                        below. Failure to obtain adequate rates or
                                        regulatory approvals, in a timely
                                        manner, adoption of new regulations
                                        by federal or state agencies, or changes
                                        to current regulations and
                                        interpretations of such regulations may materially
                                        affect the Company’s business
                                        and its results of operations and financial
                                        position. The Energy Policy Act of
                                        2005 repealed the Public Utility Holding
                                        Company Act of 1935, as amended, and
                                        provided certain utility customer protection
                                        authority to FERC and the states.
                                        The Energy Policy Act of 2005,
                                        among other things, also requires FERC to
                                        perform a study of competition in
                                        wholesale and retail electricity markets
                                        and authorizes the creation of an
                                        Electric Reliability Organization (ERO) to
                                        establish
  15
  and
                                        enforce mandatory reliability standards subject
                                        to FERC oversight. The final
                                        rule for ERO development and processes for
                                        insuring reliable grid operations was
                                        issued in February 2006. Management has not
                                        yet determined the impact of this
                                        final rule. FERC is in the process of establishing
                                        rules implementing the Energy
                                        Policy Act of 2005, and there is the risk
                                        that the rules may adversely affect
                                        operations, the results of operations and
                                        financial condition of the
                                        Company.
 
 KCP&L
                                        is regulated by the MPSC and KCC with respect
                                        to retail rates, certain
                                        accounting matters, standards of service
                                        and, in certain cases, the issuance of
                                        securities and certification of facilities
                                        and service territories. Failure to
                                        obtain adequate and timely rate relief may
                                        adversely affect KCP&L’s results
                                        of operations and financial condition. KCP&L is also subject to regulation
                                        by FERC with respect to the issuance of short-term
                                        debt, wholesale electricity
                                        sales and transmission matters and the NRC
                                        as to nuclear
                                        operations.
 
 Strategic
                                        Energy is a participant in the wholesale
                                        electricity and transmission markets,
                                        and is subject to FERC regulation with respect
                                        to wholesale electricity sales
                                        and transmission matters. Additionally, Strategic
                                        Energy is subject to
                                        regulation by state regulatory agencies in
                                        states where it has retail customers.
                                        Each state has a public utility commission
                                        and rules related to retail choice.
                                        Each state's rules are distinct and may conflict.
                                        These rules do not restrict
                                        the amount Strategic Energy can charge for
                                        its services, but can have an impact
                                        on Strategic Energy's ability to provide
                                        retail electricity services in each
                                        state. Additionally, each state regulates
                                        the rates of the host public utility,
                                        and the timing and amount of changes in host
                                        public utility rates can materially
                                        affect Strategic Energy’s results of operations and financial
                                        position.
 
 **The
                                        Company has Financial Market and Ratings
                                        Risks**
 The
                                        Company relies on access to both short-term
                                        money markets and longer-term
                                        capital markets as a significant source of
                                        liquidity for capital requirements
                                        not satisfied by cash flows from operations.
                                        KCP&L’s capital requirements
                                        are expected to increase substantially over
                                        the next several years as it
                                        implements the generation and environmental
                                        projects in its comprehensive energy
                                        plan. The Company’s management believes that it will maintain
                                        sufficient access
                                        to these financial markets at a reasonable
                                        cost based upon current credit
                                        ratings and market conditions. However, changes
                                        in market conditions or credit
                                        ratings could adversely affect its ability
                                        to access financial markets at a
                                        reasonable cost, impact the rate treatment
                                        provided KCP&L, or both, and
                                        therefore materially affect its results of
                                        operations and financial
                                        position.
  Great
                                        Plains Energy, KCP&L and certain of their securities are rated
                                        by Moody's
                                        Investors Service
                                        and Standard & Poor's. These ratings impact the Company’s cost of funds
                                        and Great Plains Energy’s ability to provide credit support for its
                                        subsidiaries.
  **The
                                        Company’s Financial Statements Reflect the Application
                                        of Critical Accounting
                                        Policies**
 The
                                        application of the Company’s critical accounting policies reflects complex
                                        judgments and estimates. These policies include
                                        industry-specific accounting
                                        applicable to regulated public utilities,
                                        accounting for pensions, long-lived
                                        and intangible assets, goodwill and derivative
                                        instruments. The adoption of new
                                        Generally Accepted Accounting Principles
                                        (GAAP) or changes to current accounting
                                        policies or interpretations of such policies
                                        may materially affect the Company’s
                                        results of operations and financial position.
  **The
                                        Company is Subject to Environmental Laws
                                        and the Incurrence of Environmental
                                        Liabilities**
 The
                                        Company is subject to regulation by federal,
                                        state and local authorities with
                                        regard to air and other environmental matters
                                        primarily through KCP&L’s
                                        operations. The generation, transmission
                                        and distribution of electricity
                                        produces and requires disposal of certain
                                        hazardous products, which are subject
                                        to these laws and regulations. In addition
                                        to imposing continuing compliance
                                        obligations, these laws and regulations authorize
                                        the imposition of substantial
                                        penalties for noncompliance, including
  16
  fines,
                                          injunctive relief and other sanctions.
                                          KCP&L regularly conducts
                                          environmental audits designed to ensure
                                          compliance with governmental regulations
                                          and to detect contamination. Failure to
                                          comply with these laws and regulations
                                          could have a material adverse effect on
                                          Great Plains Energy and consolidated
                                          KCP&L results of operations and financial position.
  New
                                          environmental laws and regulations affecting
                                          KCP&L’s operations may be
                                          adopted, and new interpretations of existing
                                          laws and regulations could be
                                          adopted or become applicable to KCP&L or its facilities, which may
                                          substantially increase its environmental
                                          expenditures in the future. New
                                          facilities, or modifications of existing
                                          facilities, may require new
                                          environmental permits or amendments to
                                          existing permits. Delays in the
                                          environmental permitting process, denials
                                          of permit applications or conditions
                                          imposed in permits may materially affect
                                          the cost and timing of the generation
                                          and environmental retrofit projects included
                                          in the comprehensive energy plan,
                                          among other projects, and thus materially
                                          affect KCP&L’s results of
                                          operations and financial position. In addition,
                                          KCP&L may not be able to
                                          recover all of its costs for environmental
                                          expenditures through rates in the
                                          future. Under current law, KCP&L is also generally responsible for any
                                          on-site liabilities associated with the
                                          environmental condition of its
                                          facilities that it has previously owned
                                          or operated, regardless of whether the
                                          liabilities arose before, during or after
                                          the time it owned or operated the
                                          facilities. The incurrence of material
                                          environmental costs or liabilities,
                                          without related rate recovery, could have
                                          a material adverse effect on
                                          KCP&L’s results of operations and financial position.
                                          See Note 13 to the
                                          consolidated financial statements for additional
                                          information regarding
                                          environmental matters.
 **Great
                                        Plains Energy’s Ability to Pay Dividends and Meet Financial
                                        Obligations Depends
                                        on its Subsidiaries**
 Great
                                        Plains Energy is a holding company with no
                                        significant operations of its own.
                                        The primary source of funds for payment of
                                        dividends to its shareholders and its
                                        financial obligations is dividends paid to
                                        it by its subsidiaries, particularly
                                        KCP&L. The ability of Great Plains Energy’s subsidiaries to pay dividends or
                                        make other distributions, and, accordingly,
                                        Great Plains Energy’s ability to pay
                                        dividends on its common stock and meet its
                                        financial obligations, will depend on
                                        the actual and projected earnings and cash
                                        flow, capital requirements and
                                        general financial position of its subsidiaries,
                                        as well as on regulatory
                                        factors, financial covenants, general business
                                        conditions and other
                                        matters.
  **KCP&L
                                        and Strategic Energy are Affected by Demand,
                                        Seasonality and Weather**
 The
                                        results of operations of KCP&L and Strategic Energy can be materially
                                        affected by changes in weather and customer
                                        demand. KCP&L and Strategic
                                        Energy estimate customer demand based on
                                        historical trends, to procure fuel and
                                        purchased power. Differences in customer
                                        usage from these estimates due to
                                        weather or other factors could materially
                                        affect KCP&L’s and Strategic
                                        Energy’s results of operations.
  Weather
                                        conditions directly influence the demand
                                        for electricity and natural gas and
                                        affect the price of energy commodities. KCP&L is significantly impacted by
                                        seasonality with approximately one-third
                                        of its retail revenues recorded in the
                                        third quarter. Strategic Energy is impacted
                                        by seasonality, but to a much lesser
                                        extent. In addition, severe weather, including
                                        but not limited to tornados,
                                        snow, rain and ice storms can be destructive
                                        causing outages and property damage
                                        that can potentially result in additional
                                        expenses and lower revenues.
                                        KCP&L’s Iatan and Hawthorn stations use water from
                                        the Missouri River for
                                        cooling purposes. Low water and flow levels,
                                        which have been experienced in
                                        recent years, can increase KCP&L’s maintenance costs at these stations and,
                                        if these levels get low enough, could cause
                                        KCP&L to modify plant
                                        operations.
  **KCP&L
                                        and Strategic Energy have Commodity Price
                                        Risks**
 KCP&L
                                        and Strategic Energy engage in the wholesale
                                        and retail marketing of electricity
                                        and, accordingly, are exposed to risks associated
                                        with the price of electricity.
                                        Strategic Energy routinely  17
 enters
                                          into contracts to purchase and sell electricity
                                          in the normal course of
                                          business. KCP&L generates, purchases and sells electricity
                                          in the retail and
                                          wholesale markets.
  *Fossil
                                        Fuel and Transportation Prices Impact
                                        KCP&L’s Costs*
 Less
                                        than
                                        1% of KCP&L's rates contain an automatic fuel adjustment
                                        clause, exposing
                                        KCP&L to risk from changes in the market prices
                                        of coal and natural gas used
                                        to generate power and in the cost of coal
                                        and natural gas transportation.
                                        Changes in KCP&L’s fuel mix due to electricity demand, plant
                                        availability,
                                        transportation issues, fuel prices and other
                                        factors can also adversely affect
                                        KCP&L’s fuel costs.
 
 KCP&L
                                        does not hedge its entire exposure from fossil
                                        fuel and transportation price
                                        volatility. As a consequence, its results
                                        of operations and financial position
                                        may be materially impacted by changes in
                                        these prices, until increased costs are
                                        recovered in rates.
 
 ***Wholesale
                                        Electricity Prices Affect Costs and Revenues***
 KCP&L's
                                        ability to maintain or increase its level
                                        of wholesale sales depends on the
                                        wholesale market price, transmission availability
                                        and the availability of
                                        KCP&L’s generation for wholesale sales, among other
                                        factors. A substantial
                                        portion of KCP&L’s wholesale sales are made in the spot market,
                                        and thus
                                        KCP&L has immediate exposure to wholesale price
                                        changes. Declines in
                                        wholesale market price or availability of
                                        generation or transmission constraints
                                        in the wholesale markets, could reduce KCP&L's wholesale sales and adversely
                                        affect KCP&L’s results of operations and financial position.
 
 KCP&L
                                        is also exposed to risk because at times
                                        it purchases power to meet its
                                        customers’ needs. The cost of these purchases may be
                                        affected by the timing of
                                        customer demand and/or unavailability of
                                        KCP&L’s lower-priced generating
                                        units. Wholesale power prices can be volatile
                                        and generally increase in times of
                                        high regional demand and high natural gas
                                        prices.
 
 Strategic
                                        Energy operates in competitive retail electricity
                                        markets, competing against the
                                        host utilities and other retail suppliers.
                                        Wholesale electricity costs, which
                                        account for a significant portion of its
                                        operating expenses, can materially
                                        affect Strategic Energy’s ability to attract and retain retail electricity
                                        customers at profitable prices. There is
                                        also a regulatory lag that slows the
                                        adjustment of host public utility rates in
                                        response to changes in wholesale
                                        prices. This lag can negatively affect Strategic
                                        Energy’s ability to compete in
                                        a rising wholesale price environment. Strategic
                                        Energy manages wholesale
                                        electricity risk by establishing risk limits
                                        and entering into contracts to
                                        offset some **** of
                                        its
                                        positions to balance energy supply and demand;
                                        however, Strategic Energy does
                                        not hedge its entire exposure to electricity
                                        price volatility. As a consequence,
                                        its results of operations and financial position
                                        may be materially impacted by
                                        changes in the wholesale price of electricity.
  **KCP&L
                                        has Operations Risks**
 The
                                        operation of KCP&L’s electric generation, transmission and distribution
                                        systems involves many risks, including breakdown
                                        or failure of equipment or
                                        processes; operating limitations that may
                                        be imposed by equipment conditions,
                                        environmental or other regulatory requirements;
                                        fuel supply or fuel
                                        transportation reductions or interruptions;
                                        transmission scheduling; and
                                        catastrophic events such as fires, explosions,
                                        severe weather or other similar
                                        occurrences.
  These
                                        and
                                        other operating events may reduce KCP&L’s revenues or increase its costs, or
                                        both, and may materially affect KCP&L’s results of operations and financial
                                        position.
  **KCP&L
                                          has Construction-Related Risks**
 KCP&L’s
                                        comprehensive energy plan includes the construction
                                        of an estimated 850 MW
                                        coal-fired generating plant, 100.5 MW of
                                        wind generation and environmental
                                        retrofits at two existing coal-fired units.
                                        KCP&L has not recently managed a
                                        construction program of this magnitude. There
                                        are risks  18
 that
                                        actual costs may exceed budget estimates,
                                        delays may occur in obtaining permits
                                        and materials, suppliers and contractors
                                        may not perform as required under their
                                        contracts, and events beyond KCP&L’s control may occur that may materially
                                        affect the schedule, budget and performance
                                        of these projects. These risks may
                                        increase the costs of these construction
                                        projects, require KCP&L to purchase
                                        additional electricity to supply its retail
                                        customers until the projects are
                                        completed, or both, and may materially affect
                                        KCP&L’s results of operations
                                        and financial position. 
 KCP&L
                                        has Retirement-Related
                                        Risks
 Through
                                        2010, approximately 30% of
                                        KCP&L’s current employees will be eligible to retire
                                        with full pension
                                        benefits. Failure to hire and adequately
                                        train replacement employees, including
                                        the transfer of significant internal historical
                                        knowledge and expertise to the
                                        new employees, may adversely affect KCP&L’s ability to manage and operate
                                        its business.
 
 Substantially
                                        all of KCP&L’s employees participate in defined benefit
                                        and postretirement
                                        plans. If KCP&L employees retire when they become eligible
                                        for retirement
                                        through 2010, or if KCP&L’s plans experience adverse market returns
                                        on its
                                        investments, or if interest rates materially
                                        fall, KCP&L’s pension expense
                                        and contributions to the plans could rise
                                        substantially over historical levels.
                                        The timing and number of employees retiring
                                        and selecting the lump sum payment
                                        option could result in pension settlement
                                        charges that could materially affect
                                        KCP&L’s results of operations. In addition, assumptions
                                        related to future
                                        costs, returns on investments, interest rates
                                        and other actuarial assumptions,
                                        including projected retirements, have a significant
                                        impact on KCP&L’s
                                        results of operations and financial position.
                                        Proposed legislation pending in
                                        Congress on pension reform could result in
                                        increased pension funding
                                        requirements. The Financial Accounting Standards
                                        Board (FASB) has a project to
                                        reconsider the accounting for pensions and
                                        other post-retirement benefits. This
                                        project may result in accelerated expense,
                                        liability recognition and
                                        contributions.
  **KCP&L
                                        has Nuclear Exposure**
 KCP&L
                                        owns 47% (548 MW) of Wolf Creek. The NRC
                                        has broad authority under federal law
                                        to impose licensing and safety-related requirements
                                        for the operation of nuclear
                                        generation facilities, including Wolf Creek.
                                        In the event of non-compliance, the
                                        NRC has the authority to impose fines, shut
                                        down the facilities, or both,
                                        depending upon its assessment of the severity
                                        of the situation, until compliance
                                        is achieved. Any revised safety requirements
                                        promulgated by the NRC could result
                                        in substantial capital expenditures at Wolf
                                        Creek.
  Wolf
                                        Creek has the lowest fuel cost per MWh of
                                        any of KCP&L's generating units.
                                        Although not expected, an extended outage
                                        of Wolf Creek, whether resulting from
                                        NRC action, an incident at the plant or otherwise,
                                        could have a substantial
                                        adverse effect on KCP&L's results of operations and financial position
                                        in
                                        the event KCP&L incurs higher replacement power and other
                                        costs that are not
                                        recovered through rates. If a long-term outage
                                        occurred, the state regulatory
                                        commissions could reduce rates by excluding
                                        the Wolf Creek investment from rate
                                        base.
  Ownership
                                        and operation of a nuclear generating unit
                                        exposes KCP&L to risks regarding
                                        decommissioning costs at the end of the unit's
                                        life. KCP&L contributes
                                        annually to a tax-qualified trust fund to
                                        be used to decommission Wolf Creek.
                                        The funding level assumes a projected level
                                        of return on trust assets. If the
                                        actual return on trust assets is below the
                                        anticipated level, KCP&L could be
                                        responsible for the balance of funds required.
                                        If returns are lower than the
                                        expected level, management believes a rate
                                        increase would be allowed ensuring
                                        full recovery of decommissioning costs over
                                        the remaining life of the
                                        unit.
  KCP&L
                                          is also exposed to other risks associated
                                          with the ownership and operation of a
                                          nuclear generating unit, including but
                                          not limited to potential liability
                                          associated with the potential harmful effects
                                          on the environment and human
                                          health resulting from the operation of
                                          a nuclear generating unit and the  19
  storage,
                                            handling and disposal of radioactive
                                            materials, and to potential retrospective
                                            assessments and losses in excess of insurance
                                            coverage.
 **Strategic
                                        Energy Operates in Competitive Retail Electricity
                                        Markets**
 Strategic
                                        Energy has several competitors that operate
                                        in most or all of the same states in
                                        which it serves customers. Some of these
                                        competitors also operate in states
                                        other than where Strategic Energy has operations.
                                        It also faces competition in
                                        certain markets from regional suppliers and
                                        deregulated utility affiliates
                                        formed by holding companies affiliated with
                                        regulated utilities to provide
                                        retail load in their home market territories.
                                        Strategic Energy's competitors
                                        vary in size from small companies to large
                                        corporations, some of which have
                                        significantly greater financial, marketing
                                        and procurement resources than
                                        Strategic Energy. Additionally, Strategic
                                        Energy, as well as its other
                                        competitors, must compete with the host utility
                                        in order to convince customers
                                        to switch from the host utility. Strategic
                                        Energy’s results of operations and
                                        financial position are impacted by the success
                                        Strategic Energy has in
                                        attracting and retaining customers in these
                                        markets.
  **Strategic
                                        Energy has Wholesale Electricity Supplier
                                        Credit Risk**
 Strategic
                                        Energy has credit risk exposure in the form
                                        of the loss that it could incur if a
                                        counterparty failed to perform under its
                                        contractual obligations. Strategic
                                        Energy enters into forward contracts with
                                        multiple suppliers. In the event of
                                        supplier non-delivery or default, Strategic
                                        Energy’s results of operations could
                                        be affected to the extent the cost of replacement
                                        power exceeded the combination
                                        of the contracted price with the supplier
                                        and the amount of collateral held by
                                        Strategic Energy to mitigate its credit risk
                                        with the supplier. Strategic
                                        Energy’s results of operations could also be affected,
                                        in a given period, if it
                                        were required to make a payment upon termination
                                        of a supplier contract to the
                                        extent the contracted price with the supplier
                                        exceeded the market value of the
                                        contract at the time of termination.
  **ITEM
                                        1B. UNRESOLVED STAFF COMMENTS**
  None.
  20
  ITEM
                                        2. PROPERTIES
  **KCP&L
                                        Generation Resources**
 **Year**
                                                
                                                **Estimated
                                                    2006**
                                                
                                                **Primary****Unit**
                                                
                                                **Completed**
                                                
                                                **MW
                                                    Capacity**
                                                
                                                **Fuel**Base
                                                    Load
                                                Wolf
                                                    Creek
                                                
                                                1985
                                                
                                                
                                                548
                                                (a)
                                                
                                                NuclearIatan
                                                    No. 1
                                                
                                                1980
                                                
                                                
                                                456
                                                (a)
                                                    (b)
                                                
                                                CoalLaCygne
                                                    No. 2
                                                
                                                1977
                                                
                                                
                                                341
                                                (a)
                                                
                                                CoalLaCygne
                                                    No. 1
                                                
                                                1973
                                                
                                                
                                                370
                                                (a)
                                                
                                                CoalHawthorn
                                                    No. 5(c)
                                                
                                                1969
                                                
                                                
                                                563
                                                
                                                
                                                CoalMontrose
                                                    No. 3
                                                
                                                1964
                                                
                                                
                                                176
                                                
                                                
                                                CoalMontrose
                                                    No. 2
                                                
                                                1960
                                                
                                                
                                                164
                                                
                                                
                                                CoalMontrose
                                                    No. 1
                                                
                                                1958
                                                
                                                
                                                170
                                                
                                                
                                                CoalPeak
                                                    Load
                                                West
                                                    Gardner Nos. 1, 2, 3 and 4(e)
                                                2003
                                                
                                                
                                                308
                                                
                                                
                                                Natural
                                                    GasOsawatomie(e)
                                                
                                                2003
                                                
                                                
                                                77
                                                
                                                
                                                Natural
                                                    GasHawthorn
                                                    No. 9(d)
                                                
                                                2000
                                                
                                                
                                                130
                                                
                                                
                                                Natural
                                                    GasHawthorn
                                                    No. 8(e)
                                                
                                                2000
                                                
                                                
                                                77
                                                
                                                
                                                Natural
                                                    GasHawthorn
                                                    No. 7(e)
                                                
                                                2000
                                                
                                                
                                                77
                                                
                                                
                                                Natural
                                                    GasHawthorn
                                                    No. 6(e)
                                                
                                                1997
                                                
                                                
                                                136
                                                
                                                
                                                Natural
                                                    GasNortheast
                                                    Nos. 17 and 18(e)
                                                
                                                1977
                                                
                                                
                                                117
                                                
                                                
                                                OilNortheast
                                                    Nos. 15 and 16(e)
                                                
                                                1975
                                                
                                                
                                                116
                                                
                                                
                                                OilNortheast
                                                    Nos. 13 and 14(e)
                                                
                                                1976
                                                
                                                
                                                114
                                                
                                                
                                                OilNortheast
                                                    Nos. 11 and 12(e)
                                                
                                                1972
                                                
                                                
                                                111
                                                
                                                
                                                OilNortheast
                                                    Black Start Unit
                                                
                                                1985
                                                
                                                
                                                2
                                                
                                                
                                                OilTotal
                                                
                                                
                                                
                                                
                                                
                                                4,053(a)
                                                KCP&L's
                                                    share of a jointly owned unit.(b)
                                                The
                                                    Iatan No. 2 air permit limits
                                                    KCP&L's accredited capacity of Iatan
                                                    No.
                                                    1 to 456 MWs from 469 MWsuntil
                                                    the air quality control equipment
                                                    included in the comprehensive
                                                    energy
                                                    plan is operational.(c)
                                                The
                                                    Hawthorn Generating Station returned
                                                    to commercial operation in 2001
                                                    with
                                                    a new boiler, air qualitycontrol
                                                    equipment and an uprated turbine
                                                    following a 1999
                                                    explosion.(d)
                                                Heat
                                                    Recovery Steam Generator portion
                                                    of combined cycle.(e)
                                                Combustion
                                                    turbines.
 KCP&L
                                          owns the Hawthorn Station (Jackson County,
                                          Missouri), Montrose Station (Henry
                                          County, Missouri), Northeast Station (Jackson
                                          County, Missouri), West Gardner
                                          Station (Johnson County, Kansas) and Osawatomie
                                          Station (Miami County, Kansas).
                                          KCP&L also owns 50% of the 740 MW LaCygne No.
                                          1 and 682 MW LaCygne No. 2
                                          (Linn County, Kansas), 70% of the 651 MW
                                          Iatan No. 1 (Platte County, Missouri)
                                          and 47% of the 1,166 MW Wolf Creek Unit
                                          (Coffey County, Kansas). See Note 5 to
                                          the consolidated financial statements for
                                          information regarding KCP&L’s
                                          comprehensive energy plan and the proposed
                                          addition of new
                                          capacity.
  **KCP&L
                                          Transmission and Distribution Resources**
 KCP&L’s
                                          electric transmission system interconnects
                                          with systems of other utilities for
                                          reliability and to permit wholesale transactions
                                          with other electricity
                                          suppliers. KCP&L owns over 1,700 miles of
                                          transmission lines, approximately 9,000 miles of
                                          overhead distribution lines and over 3,700 miles of
                                          underground distribution lines in Missouri
                                          and Kansas. KCP&L has all the
                                          franchises necessary to sell electricity
                                          within the territories from which
                                          substantially all of its gross operating
                                          revenue is derived.
  KCP&L’s
                                            transmission and distribution systems
                                            are continuously monitored for adequacy
                                            to
                                            meet customer needs. Management believes
                                            the current systems are adequate to
                                            serve its customers.
 21
 **KCP&L
                                          General**
 KCP&L’s
                                          principal plants and properties, insofar
                                          as they constitute real estate, are
                                          owned in fee simple. Certain other facilities
                                          are located on premises held under
                                          leases, permits or easements. KCP&L electric transmission and distribution
                                          systems are for the most part located over
                                          or under highways, streets, other
                                          public places or property owned by others
                                          for which permits, grants, easements
                                          or licenses (deemed satisfactory but without
                                          examination of underlying land
                                          titles) have been obtained.
  Substantially
                                          all of the fixed property and franchises
                                          of KCP&L, which consists
                                          principally of electric generating stations,
                                          electric transmission and
                                          distribution lines and systems, and buildings
                                          subject to exceptions and
                                          reservations, are subject to a General
                                          Mortgage Indenture and Deed of Trust
                                          dated as of December 1, 1986. General mortgage
                                          bonds totaling $159.3 million
                                          were outstanding at December 31, 2005.
  **ITEM
                                          3. LEGAL PROCEEDINGS**
  **Weinstein
                                          v. KLT Telecom**
 Richard
                                          D. Weinstein (Weinstein) filed suit against
                                          KLT Telecom Inc. (KLT Telecom) in
                                          September 2003 in the St. Louis County,
                                          Missouri Circuit Court. KLT Telecom
                                          acquired a controlling interest in DTI
                                          Holdings, Inc. (Holdings) in February
                                          2001 through the purchase of approximately
                                          two-thirds of the Holdings stock held
                                          by Weinstein. In connection with that purchase,
                                          KLT Telecom entered into a put
                                          option in favor of Weinstein, which granted
                                          Weinstein an option to sell to KLT
                                          Telecom his remaining shares of Holdings
                                          stock. The put option provided for an
                                          aggregate exercise price for the remaining
                                          shares equal to their fair market
                                          value with an aggregate floor amount of
                                          $15 million and was exercisable between
                                          September 1, 2003, and August 31, 2005.
                                          In June 2003, the stock of Holdings was
                                          cancelled and extinguished pursuant to
                                          the joint Chapter 11 plan confirmed by
                                          the Bankruptcy Court. In September 2003,
                                          Weinstein delivered a notice of
                                          exercise of his claimed rights under the
                                          put option. KLT Telecom rejected the
                                          notice of exercise. KLT Telecom denied
                                          that Weinstein has any remaining rights
                                          or claims pursuant to the put option and
                                          denied any obligation to pay Weinstein
                                          any amount under the put option. Subsequent
                                          to KLT Telecom’s rejection of his
                                          notice of exercise, Weinstein filed suit
                                          alleging breach of contract. Weinstein
                                          sought damages of at least $15 million,
                                          plus statutory interest. In April 2005,
                                          summary judgment was granted in favor of
                                          KLT Telecom, and Weinstein has appealed
                                          this judgment to the Missouri Court of
                                          Appeals for the Eastern District. The $15
                                          million reserve has not been reversed pending
                                          the outcome of the appeal process,
                                          which management expects will conclude
                                          in early 2006.
  **Hawthorn
                                          No. 5 Litigation**
 KCP&L
                                          filed suit on April 3, 2001, in Jackson
                                          County, Missouri Circuit Court against
                                          multiple defendants who are alleged to
                                          have responsibility for the 1999 boiler
                                          explosion at KCP&L’s Hawthorn No. 5 generating unit, which
                                          was subsequently
                                          reconstructed and returned to service.
                                          KCP&L and National Union Fire
                                          Insurance Company of Pittsburgh, Pennsylvania
                                          (National Union) entered into a
                                          subrogation allocation agreement under
                                          which recoveries in this suit are
                                          generally allocated 55% to National Union
                                          and 45% to KCP&L. Certain
                                          defendants have been dismissed from the
                                          suit and various defendants settled,
                                          with KCP&L receiving a total of $38.2 million under
                                          the terms of the
                                          subrogation allocation agreement. Trial
                                          of this case with the one remaining
                                          defendant resulted in a March 2004 jury
                                          verdict finding KCP&L’s damages as a
                                          result of the explosion were $452 million.
                                          After deduction of amounts received
                                          from pre-trial settlements with other defendants
                                          and an amount for KCP&L’s
                                          comparative fault (as determined by the
                                          jury), the verdict would have resulted
                                          in an award against the defendant of approximately
                                          $97.6 million (of which
                                          KCP&L would have received $33 million pursuant
                                          to the subrogation allocation
                                          agreement after payment of attorney’s fees). In response to post-trial pleadings filed
                                          by
                                          the defendant, in May 2004, the trial judge
                                          reduced the award against the
                                          defendant to $0.2 million. Both KCP&L and the defendant have appealed this
                                          case to the Court of Appeals for the Western
                                          District of Missouri. Oral
                                          arguments are expected in the first quarter
                                          of 2006.
  22
  **KCP&L
                                          Stipulations and Agreements**
 On
                                          March
                                          28, 2005, and April 27, 2005, KCP&L filed Stipulations and Agreements with
                                          the MPSC and KCC, respectively, containing
                                          a regulatory plan and other
                                          provisions. The Stipulations and Agreements
                                          are discussed in Note 5 to the
                                          consolidated financial statements, which
                                          is incorporated herein by reference.
                                          Parties to the MPSC Stipulation and Agreement
                                          are KCP&L, the Staff of the
                                          MPSC, the City of Kansas City, Missouri,
                                          Office of Public Counsel, Praxair,
                                          Inc., Missouri Industrial Energy Consumers,
                                          Ford Motor Company, Aquila, Inc.,
                                          The Empire District Electric Company, Missouri
                                          Joint Municipal Electric Utility
                                          Commission and the Missouri Department
                                          of Natural Resources. Parties to the KCC
                                          Stipulation and Agreement are KCP&L, the Staff of the KCC, Sprint Nextel
                                          Corporation and the Kansas Hospital Association.
  The
                                          MPSC
                                          issued its Report and Order, approving
                                          the Stipulation and Agreement, on July
                                          28, 2005, and the KCC issued its Order
                                          Approving Stipulation and Agreement on
                                          August 5, 2005. On September 22, 2005, the Sierra Club and Concerned
                                          Citizens of Platte County, two nonprofit
                                          corporations, filed a petition for
                                          review in the Circuit Court of Cole County,
                                          Missouri, seeking to review and set
                                          aside the MSPC Report and Order. On October
                                          21, 2005, the Sierra Club filed a
                                          petition for review in the District Court
                                          of Shawnee County, Kansas, seeking to
                                          set aside or remand the KCC order. Although
                                          subject to the appeal, the MPSC and
                                          KCC orders remain in effect pending the
                                          court’s decision. The appeals are
                                          expected to be decided by the courts in
                                          2006.
  **KCP&L
                                          Rate Cases**
 On
                                          February 1, 2006, KCP&L filed retail rate cases with the MPSC
                                          and KCC,
                                          requesting annual rate increases effective
                                          January 1, 2007, of approximately
                                          $55.8 million (11.5%) and $42.3 million
                                          (10.5%), respectively, over current
                                          levels. Hearings on these cases are expected
                                          to begin in September 2006 and the
                                          decisions of the MPSC and KCC are expected
                                          in December 2006.
  **Kansas
                                          City Power & Light Company v. Union Pacific Railroad
                                          Company**
 On
                                          October 12, 2005, KCP&L filed a rate complaint case with the
                                          Surface
                                          Transportation Board (STB) charging that
                                          Union Pacific Railroad Company’s (Union
                                          Pacific) rates for transporting coal from
                                          the PRB in Wyoming to KCP&L’s
                                          Montrose Station are unreasonably high.
                                          Prior to the end of 2005, the rates were
                                          established under a contract with Union
                                          Pacific. Efforts to extend the term of
                                          the contract were unsuccessful and Union
                                          Pacific is the only service for coal
                                          transportation from the PRB to Montrose
                                          Station. KCP&L charged that Union
                                          Pacific possesses market dominance over
                                          the traffic and requested the STB
                                          prescribe maximum reasonable rates. Management
                                          anticipates filing opening
                                          evidence by mid-year 2006 and the STB issuing
                                          its decision toward the end of
                                          2007. Until the STB case is finalized,
                                          KCP&L is paying tariff rates subject
                                          to refund.
  **Tech
                                          Met, Inc., et al. v. Strategic Energy**
 On
                                          November 21, 2005, a class action complaint
                                          for breach of contract was filed
                                          against Strategic Energy in the Court of
                                          Common Pleas of Allegheny County,
                                          Pennsylvania. The five named plaintiffs
                                          purportedly represent the interests of
                                          customers in Pennsylvania who entered into
                                          Power Supply Coordination Service
                                          Agreements (Agreement) for electricity
                                          service. The complaint seeks monetary
                                          damages, attorney fees and costs and a
                                          declaration that the customers may
                                          terminate their Agreement with Strategic
                                          Energy. Strategic Energy has filed
                                          preliminary objections asking the court
                                          to order plaintiffs to file an amended
                                          complaint that conforms to applicable court
                                          rules.
  **ITEM
                                            4. SUBMISSION OF MATTERS TO A VOTE OF
                                            SECURITY
                                            HOLDERS**
  During
                                          the fourth quarter of 2005, no matter was
                                          submitted to a vote of security
                                          holders through the solicitation of proxies
                                          or otherwise for either Great Plains
                                          Energy or KCP&L.
  23
  **PART
                                          II**
  **ITEM
                                          5. MARKET FOR REGISTRANT'S COMMON EQUITY,
                                          RELATED STOCKHOLDER MATTERS AND ISSUER
                                          PURCHASES OF EQUITY SECURITIES**
  **GREAT
                                          PLAINS ENERGY**
 Great
                                          Plains Energy common stock is listed on
                                          the New York Stock Exchange under the
                                          symbol GXP. At February 28, 2006, Great
                                          Plains Energy’s common stock was held by
                                          14,186 shareholders of record. Information relating
                                          to market prices and cash dividends
                                          on Great Plains Energy's common stock is
                                          set forth in the following
                                          table .
 **Common
                                                    Stock Price Range**
                                                
                                                **Common
                                                    Stock****2005**
                                                
                                                **2004**
                                                
                                                **Dividends
                                                    Declared****Quarter**
                                                
                                                **High**
                                                
                                                **Low**
                                                
                                                **High**
                                                
                                                **Low**
                                                
                                                **2006**
                                                
                                                **2005**
                                                **2004**First
                                                
                                                $
                                                31.61
                                                
                                                $
                                                29.56
                                                
                                                $
                                                35.29
                                                
                                                $
                                                31.66
                                                
                                                $
                                                0.415
                                                (a)
                                                
                                                
                                                
                                                $
                                                0.415
                                                
                                                $
                                                0.415Second
                                                
                                                
                                                32.25
                                                
                                                
                                                29.77
                                                
                                                
                                                34.36
                                                
                                                
                                                29.23
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                0.415
                                                
                                                
                                                0.415Third
                                                
                                                
                                                32.63
                                                
                                                
                                                29.82
                                                
                                                
                                                31.71
                                                
                                                
                                                28.62
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                0.415
                                                
                                                
                                                0.415Fourth
                                                
                                                
                                                30.23
                                                
                                                
                                                27.27
                                                
                                                
                                                30.71
                                                
                                                
                                                28.17
                                                
                                                
                                                
                                                
                                                
                                                
                                                0.415
                                                
                                                
                                                0.415(a)
                                                    Declared February 7, 2006.
 **Regulatory
                                          Restrictions**
 Under
                                          stipulations with the MPSC and KCC, Great
                                          Plains Energy has committed to
                                          maintain consolidated common equity of
                                          not less than 30%.
  **Dividend
                                          Restrictions**
 Great
                                          Plains Energy's Articles of Incorporation
                                          contain certain restrictions on the
                                          payment of dividends on Great Plains Energy's
                                          common stock in the event common
                                          equity falls to 25% of total capitalization.
                                          If preferred stock dividends are
                                          not declared and paid when scheduled, Great
                                          Plains Energy could not declare or
                                          pay common stock dividends or purchase
                                          any common shares. If the unpaid
                                          preferred stock dividends equal four or
                                          more full quarterly dividends, the
                                          preferred shareholders, voting as a single
                                          class, could elect members to the
                                          Board of Directors.
 24
 **Equity
                                          Compensation Plan**
 The
                                          Company’s Long-Term Incentive Plan is an equity
                                          compensation plan approved by
                                          its shareholders. The Long-Term Incentive
                                          Plan permits the grant of restricted
                                          stock, stock options, limited stock appreciation
                                          rights and performance shares
                                          to officers and other employees of the
                                          Company and its subsidiaries. The
                                          following table provides information, as
                                          of December 31, 2005, regarding the
                                          number of common shares to be issued upon
                                          exercise of outstanding options,
                                          warrants and rights, their weighted average
                                          exercise price, and the number of
                                          shares of common stock remaining available
                                          for future issuance under the
                                          Long-Term Incentive Plan. The table excludes
                                          shares issued or issuable under Great Plains
                                          Energy’s defined contribution
                                          savings plans.
  **Number
                                                  of securities****remaining
                                                  available****for
                                                  future issuance****Number
                                                  of securities to**
                                              **Weighted-average**
                                              
                                              **under
                                                  equity****be
                                                  issued upon exercise**
                                              **exercise
                                                  price of**
                                              
                                              **compensation
                                                  plans****of
                                                  outstanding options,**
                                              **outstanding
                                                  options,**
                                              
                                              **(excluding
                                                  securities****warrants
                                                  and rights**
                                              **warrants
                                                  and rights**
                                              
                                              **reflected
                                                  in column (a))****Plan
                                                  Category**
                                              
                                              **(a)**
                                              
                                              **(b)**
                                              
                                              **(c)**Equity
                                                  compensation plansapproved
                                                  by security holders
                                              
                                              
                                              284,216
                                              (1)
                                              
                                              $
                                              25.56
                                              (2)
                                              
                                              
                                              2,014,496Equity
                                                  compensation plans notapproved
                                                  by security holders
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Total
                                              
                                              
                                              284,216
                                              
                                              
                                              $
                                              25.56
                                              
                                              
                                              
                                              2,014,496(1)
                                              Includes
                                                  172,761 performance shares at target
                                                  performance levels and options
                                                  for
                                                  111,455 shares of Great PlainsEnergy
                                                  common stock outstanding at December
                                                  31, 2005.(2)
                                              The
                                                  172,761 performance shares have
                                                  no exercise price and therefore
                                                  are not
                                                  reflected in the weighted averageexercise
                                                  price.
 **Purchases
                                          of Equity Securities**
 The
                                          following table provides
                                          information regarding purchases by the
                                          Company of its equity securities during
                                          the fourth quarter of 2005.
 **Issuer
                                                    Purchases of Equity Securities****Maximum
                                                    Number****Total
                                                    Number of**
                                                **(or
                                                    Approximate****Shares
                                                    (or Units)**
                                                **Dollar
                                                    Value) of****Total**
                                                
                                                
                                                
                                                **Purchased
                                                    as**
                                                **Shares
                                                    (or Units)****Number
                                                    of**
                                                **Average**
                                                **Part
                                                    of Publicly**
                                                **that
                                                    May Yet Be****Shares**
                                                **Price
                                                    Paid**
                                                **Announced**
                                                **Purchased
                                                    Under****(or
                                                    Units)**
                                                **per
                                                    Share**
                                                **Plans
                                                    or**
                                                **the
                                                    Plans or****Month**
                                                **Purchased**
                                                **(or
                                                    Unit)**
                                                **Programs**
                                                **Programs**October
                                                    1 - 31
                                                
                                                5,862
                                                (1)
                                                $
                                                30.12
                                                
                                                
                                                -
                                                
                                                
                                                N/ANovember
                                                    1 - 30
                                                
                                                1,390
                                                (1)
                                                
                                                28.54
                                                
                                                
                                                -
                                                
                                                
                                                N/ADecember
                                                    1 - 31
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                N/ATotal
                                                
                                                7,252
                                                
                                                $
                                                29.82
                                                
                                                
                                                -
                                                
                                                
                                                N/A(1)
                                                Represents
                                                    shares of common stock surrendered
                                                    to the Company by certain officers
                                                    to
                                                    pay taxesrelated
                                                    to the vesting of restricted
                                                    common
                                                    stock.
 25
 **KCP&L**
 KCP&L
                                          is a wholly owned subsidiary of Great Plains
                                          Energy, which holds the one share
                                          of issued and outstanding KCP&L common stock.
  **Regulatory
                                          Restrictions**
 Under
                                          the
                                          Federal Power Act, KCP&L can pay dividends only out of retained
                                          or current
                                          earnings. Under stipulations with the MPSC
                                          and KCC, KCP&L has committed to
                                          maintain consolidated common equity of
                                          not less than 35%.
  **Equity
                                          Compensation Plan**
 KCP&L
                                          does not have an equity compensation plan;
                                          however, KCP&L officers
                                          participate in Great Plains Energy’s Long-Term Incentive
                                          Plan.
  ITEM 6. SELECTED FINANCIAL
                                          DATA
 **Year
                                                    Ended December 31**
                                                
                                                **2005**
                                                
                                                **2004**
                                                
                                                **2003**
                                                
                                                **2002**
                                                
                                                **2001****Great
                                                    Plains Energy****(a)**
                                                
                                                (dollars
                                                    in millions except per share
                                                    amounts)Operating
                                                    revenues
                                                
                                                $
                                                2,605
                                                
                                                $
                                                2,464
                                                
                                                $
                                                2,148
                                                
                                                $
                                                1,802
                                                
                                                $
                                                1,399Income
                                                    (loss) from continuing operations(b)
                                                
                                                $
                                                164
                                                
                                                $
                                                174
                                                
                                                $
                                                190
                                                
                                                $
                                                137
                                                
                                                $
                                                (28
                                                )Net
                                                    income (loss)
                                                
                                                $
                                                162
                                                
                                                $
                                                181
                                                
                                                $
                                                145
                                                
                                                $
                                                126
                                                
                                                $
                                                (24
                                                )Basic
                                                    and diluted earnings (loss) per
                                                    commonshare
                                                    from continuing operations
                                                
                                                $
                                                2.18
                                                
                                                $
                                                2.39
                                                
                                                $
                                                2.72
                                                
                                                $
                                                2.16
                                                
                                                $
                                                (0.49
                                                )Basic
                                                    and diluted earnings (loss) percommon
                                                    share
                                                
                                                $
                                                2.15
                                                
                                                $
                                                2.49
                                                
                                                $
                                                2.07
                                                
                                                $
                                                1.99
                                                
                                                $
                                                (0.42
                                                )Total
                                                    assets at year end
                                                
                                                $
                                                3,834
                                                
                                                $
                                                3,799
                                                
                                                $
                                                3,682
                                                
                                                $
                                                3,517
                                                
                                                $
                                                3,464Total
                                                    redeemable preferred stock, mandatorilyredeemable
                                                    preferred securities and long-term
                                                    debt (including current maturities)
                                                
                                                $
                                                1,143
                                                
                                                $
                                                1,296
                                                
                                                $
                                                1,347
                                                
                                                $
                                                1,332
                                                
                                                $
                                                1,342Cash
                                                    dividends per common share
                                                
                                                $
                                                1.66
                                                
                                                $
                                                1.66
                                                
                                                $
                                                1.66
                                                
                                                $
                                                1.66
                                                
                                                $
                                                1.66SEC
                                                    ratio of earnings to fixed charges
                                                
                                                
                                                3.61
                                                
                                                
                                                3.51
                                                
                                                
                                                4.23
                                                
                                                
                                                2.99
                                                
                                                
                                                (c
                                                )**Consolidated
                                                    KCP&L****(a)**Operating
                                                    revenues
                                                
                                                $
                                                1,131
                                                
                                                $
                                                1,092
                                                
                                                $
                                                1,057
                                                
                                                $
                                                1,013
                                                
                                                $
                                                1,287Income
                                                    from continuing operations(d)
                                                
                                                $
                                                144
                                                
                                                $
                                                143
                                                
                                                $
                                                126
                                                
                                                $
                                                103
                                                
                                                $
                                                116Net
                                                    income
                                                
                                                $
                                                144
                                                
                                                $
                                                143
                                                
                                                $
                                                117
                                                
                                                $
                                                96
                                                
                                                $
                                                120Total
                                                    assets at year end
                                                
                                                $
                                                3,339
                                                
                                                $
                                                3,337
                                                
                                                $
                                                3,303
                                                
                                                $
                                                3,139
                                                
                                                $
                                                3,146Total
                                                    redeemable preferred stock, mandatorilyredeemable
                                                    preferred securities and long-term
                                                    debt (including current maturities)
                                                
                                                $
                                                976
                                                
                                                $
                                                1,126
                                                
                                                $
                                                1,336
                                                
                                                $
                                                1,313
                                                
                                                $
                                                1,311SEC
                                                    ratio of earnings to fixed charges
                                                
                                                
                                                3.87
                                                
                                                
                                                3.34
                                                
                                                
                                                3.69
                                                
                                                
                                                2.88
                                                
                                                
                                                2.07
 (a)
                                                Great
                                                    Plains Energy’s consolidated financial statements
                                                    include results for all
                                                    subsidiaries in operation for
                                                    the periods presented. KCP&L’s
                                                    consolidated financial statements
                                                    include its wholly owned subsidiary
                                                    HSS.
                                                    In addition, KCP&L’s consolidated results of operations
                                                    include KLT
                                                    Inc. and GPP for all periods
                                                    prior to the October 1, 2001,
                                                    formation of
                                                    Great Plains Energy. (b)
                                                This
                                                    amount is before discontinued
                                                    operations of $(1.9), $7.3, $(44.8),
                                                    $(7.5)
                                                    and $4.3 million in 2005 through
                                                    2001, respectively. In 2002,
                                                    this amount
                                                    is before a $3.0 million cumulative
                                                    effect of a change in accounting
                                                    principle. (c)
                                                An
                                                    $87.1 million deficiency in earnings
                                                    caused the ratio of earnings
                                                    to fixed
                                                    charges to be less than a one-to-one
                                                    coverage. A $195.8 million net
                                                    write-off before income taxes
                                                    related to the bankruptcy filing
                                                    of DTI was
                                                    recorded in 2001. (d)
                                                This
                                                    amount is before discontinued
                                                    operations of $(8.7), $(4.0)
                                                    and $3.6
                                                    million in 2003 through 2001,
                                                    respectively. In 2002, this amount
                                                    is before
                                                    a $3.0 million cumulative effect
                                                    of a change in accounting
                                                    principle.
  26
 **ITEM
                                          7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
                                          CONDITION AND RESULTS OF
                                          OPERATIONS**
  The
                                          MD&A that follows is a combined presentation
                                          for Great Plains Energy and
                                          consolidated KCP&L, both registrants under this filing.
                                          The discussion and
                                          analysis by management focuses on those
                                          factors that had a material effect on
                                          the financial condition and results of
                                          operations of the registrants during the
                                          periods presented. It should be read in
                                          conjunction with the accompanying
                                          consolidated financial statements and related
                                          notes. See Item 1A. Risk Factors
                                          for further discussion of the companies’ risk factors.
  Great
                                          Plains Energy is a public utility holding
                                          company and does not own or operate
                                          any significant assets other than the stock
                                          of its subsidiaries. Great Plains
                                          Energy’s direct subsidiaries with operations or
                                          active subsidiaries are
                                          KCP&L, KLT Inc., IEC and Services. As a diversified
                                          energy company, Great
                                          Plains Energy’s reportable business segments include
                                          KCP&L and Strategic
                                          Energy.
  **EXECUTING
                                          ON STRATEGIC INTENT**
  During
                                          2005, the Company initiated several important
                                          steps in executing on its
                                          Strategic Intent.
  **KCP&L’s
                                          Comprehensive Energy Plan**
 KCP&L
                                          continues to make progress in implementing
                                          its comprehensive energy plan and
                                          received orders from the MPSC and KCC in
                                          2005. The orders were on agreements
                                          reached among KCP&L, the Commissions’ staffs and certain key parties in the
                                          respective jurisdictions. The Sierra Club
                                          and Concerned Citizens of Platte
                                          County have appealed the MPSC order, and
                                          the Sierra Club has appealed the KCC
                                          order. These appeals are expected to be
                                          decided in 2006. Although subject to
                                          these appeals, the MPSC and KCC orders
                                          remain in effect pending the applicable
                                          court’s decision.
  In
                                          February 2006, KCP&L filed requests with the MPSC and KCC
                                          for annual rate
                                          increases of $55.8 million or 11.5% and
                                          $42.3
                                          million or 10.5%, respectively.
                                          Iatan No. 2 detailed project engineering
                                          and design has begun and plant
                                          construction is expected to start in 2006.
                                          KCP&L has selected a developer
                                          and contractor for the construction of
                                          a 100.5 MW wind
                                          project in Kansas and management expects
                                          the project to be completed in time for
                                          inclusion in rates in 2007. See Note 5 to
                                          the
                                          consolidated financial statements for
                                          more
                                          information on the comprehensive energy
                                          plan.
  **Strategic
                                          Energy’s Business Plan**
 Strategic
                                          Energy is addressing the rising electricity
                                          price environment by focusing on
                                          four key areas.
  ·
                                              Positioning
                                                  - Strategic Energy is focused on
                                                  retail choice markets where host
                                                  utility
                                                  electricity prices adjust quickly
                                                  to changes in the wholesale markets
                                                  and
                                                  a consultative sales approach to
                                                  provide value to
                                                  customers.  ·
                                              Procurement
                                                  - Strategic Energy is focused on
                                                  strategies to gain price improvement
                                                  through load aggregation to increase
                                                  the volume purchased from certain
                                                  suppliers. Strategic Energy has
                                                  continued to invest in talent to
                                                  improve
                                                  procurement practices as well as
                                                  identify and take advantage of
                                                  opportunities to manage retail
                                                  portfolio load
                                                  requirements.  ·
                                              Products
                                                  - Strategic Energy is focused on
                                                  designing and marketing products
                                                  to
                                                  address customers’ needs in a high price environment.
                                                  In 2005, over half
                                                  of Strategic Energy’s new sales were attributable to
                                                  the introduction of
                                                  new products or product extensions
                                                  into new customer classes. In 2006,
                                                  management expects to introduce
                                                  additional new and innovative products
                                                  and
                                                  services in each of Strategic Energy’s customer classes. The introduction
                                                  of these products and services
                                                  will strive to meet customers’ expectations
                                                  in challenging and dynamic retail
                                                  choice
                                                  markets.  27
 ·
                                              Productivity
                                                  - New systems are in the process
                                                  of being implemented and are anticipated
                                                  to improve operational scalability.
                                                  Focusing on dynamic markets also
                                                  enhances productivity by enabling
                                                  Strategic Energy to maximize general
                                                  and
                                                  administrative resources.  **KCP&L
                                          BUSINESS OVERVIEW**
  KCP&L
                                          is an integrated, regulated electric utility
                                          that engages in the generation,
                                          transmission, distribution and sale of
                                          electricity. KCP&L has over 4,000 MWs
                                          of generating capacity and has transmission
                                          and distribution facilities that
                                          provide electricity to approximately 500,000 customers in the states of Missouri and
                                          Kansas. KCP&L has continued to
                                          experience modest load growth. Load growth
                                          consists of higher usage per customer
                                          and the addition of new customers. Retail
                                          electricity rates are below the
                                          national average.
  KCP&L’s
                                          residential customers’ usage patterns are significantly affected
                                          by weather.
                                          Bulk power sales, the major component of
                                          wholesale sales, vary with system
                                          requirements, generating unit and purchased
                                          power availability, fuel costs and
                                          requirements of other electric systems.
                                          Less than 1% of revenues include an
                                          automatic fuel adjustment provision. KCP&L’s coal base load equivalent
                                          availability factor decreased to 82 %
                                          in 2005
                                          from 84 %
                                          in
                                          2004, reflecting scheduled and forced plant
                                          outages. The 176 MW Montrose No. 3
                                          generator step-up transformer (GSU) failed
                                          in late May 2005. KCP&L leased a
                                          spare GSU until the failed GSU was repaired
                                          and installed during the fourth
                                          quarter of 2005. In August 2005, Hawthorn
                                          No. 5’s GSU failed, which resulted in
                                          a 32-day outage. A spare GSU was installed
                                          in September; however, the size of
                                          the spare GSU limits the output of the
                                          unit to net 500 MW. The 65 MW decrease
                                          in
                                          Hawthorn No. 5 capability will continue
                                          until a new transformer is installed,
                                          currently expected in June 2006. The outage
                                          to install the repaired GSU is
                                          expected to be completed in 14 days.
  KCP&L’s
                                          nuclear unit, Wolf Creek, accounts for
                                          approximately 20 %
                                          of its
                                          base load capacity and over a three-year
                                          period averaged over 20 %
                                          of
                                          KCP&L’s MWhs generated. Wolf Creek’s availability was approximately
                                          13 %
                                          lower
                                          in 2005 compared to 2004 due to its scheduled
                                          spring 2005 refueling outage.
                                          Replacement power costs for scheduled Wolf
                                          Creek outages are accrued evenly over
                                          the unit’s 18-month operating cycle. KCP&L expects its cost of nuclear fuel
                                          to remain relatively stable through 2009
                                          because of contracts in
                                          place .
  The
                                          fuel
                                          cost per MWh generated and the purchased
                                          power cost per MWh has a significant
                                          impact on the results of operations for
                                          KCP&L. Generation fuel mix can
                                          substantially change the fuel cost per
                                          MWh generated. Nuclear fuel cost per MWh
                                          generated is substantially less than the
                                          cost of coal per MWh generated, which
                                          is significantly lower than the cost of
                                          natural gas and oil per MWh generated.
                                          The cost per MWh for purchased power is
                                          significantly higher than the cost per
                                          MWh of coal and nuclear generation. KCP&L continually evaluates its system
                                          requirements, the availability of generating
                                          units, availability and cost of
                                          fuel supply and purchased power, and the
                                          requirements of other electric systems
                                          to provide reliable power economically.
  KCP&L
                                          expects its fuel expense to increase significantly
                                          in 2006 due to projected
                                          increases in the cost of coal and coal
                                          transportation. The anticipated increase
                                          in delivered coal prices is expected to
                                          affect most regional utilities;
                                          therefore, the increase is not expected
                                          to materially erode KCP&L’s position
                                          as a low cost regional electricity generator.
  Rail
                                          companies have experienced longer cycle
                                          times for coal deliveries to utilities
                                          across the country since the third quarter
                                          of 2004. Western rail service further
                                          deteriorated in 2005 due to two train derailments
                                          that occurred on the primary
                                          rail line serving the PRB. Maintenance
                                          to repair significant sections of track
                                          on this rail line began in 2005 and is
                                          expected to be completed by the end of
                                          2006. These repairs must be completed before
                                          normal train operations from the
                                          PRB can resume, which affects
                                          all users of PRB coal. Approximately 98%
                                          of KCP&L’s coal requirements come
                                          from the PRB
  28
  and
                                            originate on the Burlington Northern
                                            Santa Fe and the Union Pacific railroads,
                                            both of which have been affected by the
                                            current rail situation. As a result,
                                            most utilities, including KCP&L, have coal inventories that are below
                                            desired levels. KCP&L implemented coal conservation measures
                                            by reducing
                                            coal generation in 2005 and expects to
                                            continue these measures for at least
                                            the
                                            first half of 2006. This reduction in
                                            coal generation in the marketplace caused
                                            upward pressure on both pricing for next
                                            power generation fuel sources (natural
                                            gas and/or oil) and wholesale electricity
                                            prices in 2005 and is expected to
                                            continue into 2006. The rail companies
                                            have indicated that they expect the
                                            impact related to the 2006 maintenance
                                            program to be less than the 10% to 15%
                                            reduction in deliveries experienced in
                                            2005, but have offered no estimate on
                                            the
                                            likely reduction. Management cannot predict
                                            with any certainty the 2006 impact
                                            of the situation; however, an inability
                                            to obtain timely delivery of coal to
                                            meet generation requirements could materially
                                            impact KCP&L’s results of
                                            operations. Management is monitoring
                                            the situation closely and steps will
                                            be
                                            taken, as necessary, to maintain an adequate
                                            energy supply for KCP&L’s
                                            retail load and firm MWh sales.
 **STRATEGIC
                                          ENERGY BUSINESS OVERVIEW**
  Great
                                          Plains Energy owns just under 100% of the
                                          indirect interest in Strategic Energy.
                                          Strategic Energy does not own any generation,
                                          transmission or distribution
                                          facilities. Strategic Energy provides competitive
                                          retail electricity supply
                                          services by entering into power supply
                                          contracts to supply electricity to its
                                          end-use customers. Of the states that offer
                                          retail choice, Strategic Energy
                                          operates in California, Maryland, Massachusetts,
                                          Michigan, New Jersey, New York,
                                          Ohio, Pennsylvania and Texas.
  In
                                          addition to competitive retail electricity
                                          supply services, Strategic Energy
                                          records insignificant wholesale revenues
                                          and purchased power expense incidental
                                          to the retail services provided. Strategic
                                          Energy also provides strategic
                                          planning, consulting and billing and scheduling
                                          services in the natural gas and
                                          electricity markets. The cost of supplying
                                          electricity to retail customers can
                                          vary widely by geographic market. This
                                          variability can be affected by many
                                          factors, including, but not limited to,
                                          geographic differences in the cost per
                                          MWh of purchased power, renewable energy
                                          requirements and capacity charges due
                                          to regional purchased power availability
                                          and requirements of other electricity
                                          providers and differences in transmission
                                          charges.
  Strategic
                                          Energy provides services to approximately
                                          51,000 commercial, institutional and small manufacturing
                                          accounts for approximately
                                          10,300 customers including numerous Fortune 500
                                          companies, smaller companies and
                                          governmental entities. In response to marketplace
                                          trends, Strategic Energy has
                                          designed and introduced new products tailored
                                          for specific market conditions and
                                          segments. Strategic Energy offers an array
                                          of products, including fixed price,
                                          index-based and month-to-month renewal
                                          products, designed to meet the various
                                          requirements of a diverse customer base
                                          in evolving markets. Strategic Energy’s
                                          volume-based customer retention rate, excluding
                                          month-to-month customers on
                                          market-based rates, for 2005 was 76 %.
                                          The
                                          corresponding volume-based customer retention
                                          rate including month-to-month
                                          customers on market-based rates was 86 %.
  In
                                          some
                                          markets, wholesale power prices in 2005
                                          rose faster than host utility rates. In
                                          markets where this occurred, the savings
                                          competitive suppliers could offer to
                                          customers were reduced or in some markets
                                          were unavailable. Additionally, in
                                          those markets where wholesale power prices
                                          were lower than host utility rates,
                                          Strategic Energy faced strong competition
                                          from other competitive suppliers.
                                          These factors, among others, contributed
                                          to reductions in MWhs delivered and
                                          average retail gross margin per MWh in
                                          2005 compared to 2004.
  At
                                          the
                                          end of 2005, Strategic Energy experienced
                                          improvement in certain key metrics,
                                          including strong backlog growth, longer
                                          contract durations and higher retention
                                          rates. Management believes a combination
                                          of factors contributed to the improved
                                          metrics, including successful focus on
                                          positioning, procurement,
                                          products and productivity, as well as a
                                          changing market environment. Customer
                                          perceptions about the longer-term price
                                          of electricity may be changing as a
                                          result of the prolonged
  29
  period
                                            of
                                            high and volatile power prices seen in
                                            the last few years and customers may
                                            be
                                            more willing to enter into long-term
                                            contracts in order to achieve price
                                            certainty. Also, a decrease in near-term
                                            power prices at the end of 2005 may
                                            have provided a catalyst for some customers
                                            to convert from month-to-month
                                            service to term contracts. Management
                                            believes, but cannot assure, that these
                                            trends may continue into 2006.
 Strategic
                                          Energy currently expects the retail gross
                                          margin per MWh (retail revenues less
                                          retail purchased power divided by retail
                                          MWhs delivered) delivered in 2006 to
                                          average $4.25 to $4.75 and the retail gross
                                          margin per MWh on new customer contracts
                                          entered into in 2006 to average from
                                          $3.00 to $4.00 .
                                          Strategic Energy expects to realize additional
                                          retail gross margin on fixed
                                          price contracts of up to $0.50 per MWh
                                          over the life of the contract. The
                                          additional expected margin is derived from
                                          management of the retail portfolio
                                          load requirements. These activities include
                                          benefits from financial transmission
                                          rights and auction revenue rights, short-term
                                          load balancing activities,
                                          short-term arbitrage activities and identifying
                                          and executing on favorable
                                          transmission paths. MWhs delivered in 2006
                                          are projected to range from 16 to
                                          18 million.
                                          Based solely on expected usage under current
                                          signed contracts, Strategic Energy
                                          has forecasted future MWh commitments (backlog)
                                          of 10.4 million, 4.3 million and
                                          2.3 million for the
                                          years 2006 through 2008, respectively.
                                          Strategic Energy expects to deliver
                                          additional MWhs in these years through
                                          new and renewed term contracts and MWh
                                          deliveries to month-to-month customers.
  **LOWER
                                          EARNINGS EXPECTED IN 2006**
  Great
                                          Plains Energy’s projected net income is expected to decrease
                                          in 2006. The
                                          decrease in projected net income for 2006
                                          is due to a significant increase in
                                          fuel cost and related transportation expenses
                                          at KCP&L, lower volume and
                                          lower anticipated average retail gross
                                          margins at Strategic Energy and the
                                          absence of certain tax benefits recorded
                                          in 2005. These factors are expected to
                                          more than offset projected operational
                                          efficiencies at both KCP&L and
                                          Strategic Energy, KCP&L’s retail load growth, higher wholesale
                                          volume and
                                          higher allowance for equity funds used
                                          during construction related to the
                                          comprehensive energy plan.
  Through
                                          2010, approximately 30% of
                                          KCP&L’s current employees are eligible to retire
                                          with full pension benefits.
                                          The timing and number of employees retiring
                                          and selecting the lump sum payment
                                          option could result in settlement charges
                                          that could materially affect
                                          KCP&L’s 2006 results of operations.
  **RELATED
                                          PARTY TRANSACTIONS**
  See
                                          Note
                                          12 to the consolidated financial statements
                                          for information regarding related
                                          party transactions.
  **CRITICAL
                                          ACCOUNTING POLICIES**
  The
                                          preparation of financial statements in
                                          conformity with GAAP requires management
                                          to make estimates and assumptions that
                                          affect reported amounts and related
                                          disclosures. Management considers an accounting
                                          estimate to be critical if it
                                          requires assumptions to be made that were
                                          uncertain at the time the estimate was
                                          made and changes in the estimate or different
                                          estimates that could have been
                                          used could have a material impact on the
                                          results of operations and financial
                                          position. Management has identified the
                                          following accounting policies deemed
                                          critical to the understanding of the companies’ results of operations and
                                          financial position. Management has discussed
                                          the development and selection of
                                          these critical accounting policies with
                                          the Audit Committee of the Board of
                                          Directors for Great Plains Energy and KCP&L.
  30
  Pensions
 The
                                          companies incur significant costs in providing
                                          non-contributory defined pension
                                          benefits. The costs are measured using
                                          actuarial valuations that are dependent
                                          upon numerous factors derived from actual
                                          plan experience and assumptions of
                                          future plan experience.
  Pension
                                          costs are impacted by actual employee demographics
                                          (including age, compensation
                                          levels and employment periods), the level
                                          of contributions made to the plan,
                                          earnings on plan assets and plan amendments.
                                          In addition, pension costs are also
                                          affected by changes in key actuarial assumptions,
                                          including anticipated rates of
                                          return on plan assets and the discount
                                          rates used in determining the projected
                                          benefit obligation and pension costs.
  These
                                          actuarial assumptions are updated annually
                                          in accordance with Statement of
                                          Financial Accounting Standards (SFAS) No.
                                          87, “Employers’ Accounting for
                                          Pensions.” In selecting an assumed discount rate,
                                          the prevailing market rate of
                                          fixed income debt instruments with maturities
                                          matching the expected timing of
                                          the benefit obligation was considered.
                                          The assumed rate of return on plan assets
                                          was developed based on the weighted average
                                          of long-term returns forecast for
                                          the expected portfolio mix of investments
                                          held by the plan. These assumptions
                                          are based on management’s best estimates and judgment; however,
                                          material changes
                                          may occur if these assumptions differ from
                                          actual events. See Note 9 to the
                                          consolidated financial statements for information
                                          regarding the assumptions used
                                          to determine benefit obligations and net
                                          costs.
  The
                                          following table reflects the sensitivities
                                          associated with a 0.5% increase or a
                                          0.5% decrease in key actuarial assumptions.
                                          Each sensitivity reflects the impact
                                          of the change based solely on a change
                                          in that assumption
                                          only.
 **Impact
                                                    on**
                                                
                                                
                                                
                                                **Impact
                                                    on****Projected**
                                                
                                                **Impact
                                                    on**
                                                
                                                **2005****Change
                                                    in**
                                                
                                                **Benefit**
                                                
                                                **Pension**
                                                
                                                **Pension****Actuarial
                                                    assumption**
                                                
                                                **Assumption**
                                                
                                                **Obligation**
                                                
                                                **Liability**
                                                
                                                **Expense**(millions)Discount
                                                    rate
                                                
                                                
                                                0.5
                                                %
                                                
                                                increase
                                                
                                                $
                                                (32.9
                                                )
                                                $
                                                (18.1
                                                )
                                                $
                                                (2.3
                                                )Rate
                                                    of return on plan assets
                                                
                                                
                                                0.5
                                                %
                                                
                                                increase
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                (1.9
                                                )Discount
                                                    rate
                                                
                                                
                                                0.5
                                                %
                                                
                                                decrease
                                                
                                                
                                                35.1
                                                
                                                
                                                19.8
                                                
                                                
                                                2.5Rate
                                                    of return on plan assets
                                                
                                                
                                                0.5
                                                %
                                                
                                                decrease
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                1.9
  KCP&L
                                          recorded pension expense reflecting orders
                                          from the MPSC and KCC that
                                          established annual pension costs at $22
                                          million, reducing 2005 pension expense.
                                          The difference between pension costs under
                                          SFAS No. 87 and the amount allowed
                                          for ratemaking is recorded as a regulatory
                                          asset or liability for future
                                          ratemaking recovery or refunds, as appropriate.
                                          See discussion of Regulatory
                                          Matters below and Note 9 to the consolidated
                                          financial statements for additional
                                          information.
  Market
                                          conditions and interest rates significantly
                                          affect the future assets and
                                          liabilities of the plan. It is difficult
                                          to predict future pension costs,
                                          changes in pension liability and cash funding
                                          requirements due to volatile
                                          market conditions.
  **Regulatory
                                          Matters**
 As
                                          a
                                          regulated utility, KCP&L is subject to the provisions of SFAS
                                          No. 71,
“Accounting for the Effects of Certain Types
                                          of Regulation.” Accordingly,
                                          KCP&L has recorded assets and liabilities on
                                          its balance sheet resulting
                                          from the effects of the ratemaking process,
                                          which would not be recorded under
                                          GAAP if KCP&L were not regulated. Regulatory assets
                                          represent costs incurred
                                          that have been deferred because future
                                          recovery in customer rates is probable.
                                          Regulatory liabilities generally represent probable
                                          future reductions in revenue or refunds
                                          to customers. Future recovery of
                                          regulatory assets is
  31
  not
                                            assured, but is generally subject to
                                            review by regulators in rate proceedings
                                            for matters such as prudence and reasonableness.
                                            Future reductions in revenue or
                                            refunds for regulatory liabilities generally
                                            are not mandated, pending future
                                            rate proceedings or actions by the regulators.
                                            Management regularly assesses
                                            whether regulatory assets and liabilities
                                            are probable of future recovery or
                                            refund by considering factors such as
                                            decisions by the MPSC, KCC or FERC on
                                            KCP&L’s rate case filings; decisions in other
                                            regulatory proceedings,
                                            including decisions related to other
                                            companies that establish precedence on
                                            matters applicable to KCP&L; and changes in laws and regulations.
                                            If
                                            recovery or refund of regulatory assets
                                            or liabilities is not approved by
                                            regulators or is no longer deemed probable,
                                            these regulatory assets or
                                            liabilities are recognized in the current
                                            period results of operations.
                                            KCP&L’s continued ability to meet the criteria
                                            for application of SFAS No.
                                            71 may be affected in the future by restructuring
                                            and deregulation in the
                                            electric industry. In the event that
                                            SFAS No. 71 no longer applied to a
                                            deregulated portion of KCP&L’s operations, the related regulatory
                                            assets and
                                            liabilities would be written off unless
                                            an appropriate regulatory recovery
                                            mechanism is provided. Additionally,
                                            these factors could result in an impairment
                                            on utility plant assets as determined
                                            pursuant to SFAS No. 144, “Accounting for
                                            the Impairment or Disposal of Long-lived
                                            Assets.” See Note 5 to the consolidated
                                            financial statements for more information.
 **Impairment
                                          of Assets, Intangible Assets and Goodwill**
 Long-lived
                                          assets and intangible assets subject to
                                          amortization are periodically reviewed
                                          for impairment whenever events or changes
                                          in circumstances indicate that the
                                          carrying amount of an asset may not be
                                          recoverable as prescribed under SFAS No.
                                          144.
  Goodwill
                                          is tested for impairment at least annually
                                          and more frequently when indicators
                                          of impairment exist as prescribed under
                                          SFAS No. 142, “Goodwill and Other
                                          Intangible Assets.” SFAS No. 142 requires that if the fair
                                          value of a reporting
                                          unit is less than its carrying value including
                                          goodwill, the implied fair value
                                          of the reporting unit goodwill must be
                                          compared with its carrying value to
                                          determine the amount of impairment.
  Impairment
                                          analyses require management to make assumptions
                                          about future sales, operating
                                          costs and discount rates over the life
                                          of the related asset, or in some cases
                                          over an indefinite life. Potential impairment
                                          indicators include such factors as
                                          current period losses combined with a history
                                          of losses, or a projection of
                                          continuing losses or a significant decrease
                                          in the market price of the asset
                                          under review. Management’s assumptions about these factors require
                                          significant
                                          judgment and under different assumptions,
                                          the fair value of an asset could be
                                          materially different.
  Accounting
                                          standards require a company to recognize
                                          an impairment in the current period
                                          results of operations if the sum of the
                                          undiscounted expected future cash flows
                                          from the company’s asset is less than the carrying value
                                          of the asset. The
                                          impairment recognized is the difference
                                          between the fair value and book value of
                                          the asset.
  **Energy
                                          and Energy-Related Contract Accounting**
 Strategic
                                          Energy generally purchases power under
                                          forward physical delivery contracts to
                                          supply electricity to its retail energy
                                          customers under full requirement sales
                                          contracts. The full requirements sales
                                          contracts and the forward physical
                                          delivery contracts meet the accounting
                                          definition of a derivative; however,
                                          Strategic Energy applies the normal purchases
                                          and normal sales (NPNS) exception
                                          accounting treatment on full requirement
                                          sales contracts. Derivative contracts
                                          designated as NPNS are accounted for by
                                          accrual accounting, which requires the
                                          effects of the derivative to be recorded
                                          when the underlying contract settles.
  Strategic
                                          Energy has historically designated the
                                          majority of the forward physical delivery
                                          contracts as NPNS; however, as certain
                                          markets continue to develop, some
                                          derivative instruments may no longer qualify
                                          for the NPNS exception. As such, Strategic
                                          Energy is designating these forward
                                          physical
  32
  delivery
                                            contracts as cash flow hedges, which
                                            could result in future increased volatility
                                            in derivative assets and liabilities,
                                            other comprehensive income (OCI) and
                                            net
                                            income. Under cash flow hedge accounting,
                                            the fair value of the contract is
                                            recorded as a current or long-term derivative
                                            asset or liability. Subsequent
                                            changes in the fair value of the derivative
                                            assets and liabilities are recorded
                                            on a net basis in OCI and subsequently
                                            reclassified to purchased power expense
                                            in Great Plains Energy’s consolidated statement of income as
                                            the power is
                                            delivered and/or the contract settles.
                                            Accordingly, the increase in derivatives
                                            accounted for as cash flow hedges and
                                            the corresponding decrease in derivatives
                                            accounted for as NPNS transactions may
                                            affect the timing and nature of
                                            accounting recognition, but does not
                                            change the underlying economics of the
                                            transactions.
 The
                                          fair
                                          value of forward purchase derivative contracts
                                          that do not meet the requirements
                                          for the NPNS exception or cash flow hedge
                                          accounting are recorded as current or
                                          long-term derivative assets or liabilities.
                                          Changes in the fair value of these
                                          contracts could result in operating income
                                          volatility as changes in the
                                          associated derivative assets and liabilities
                                          are recorded in purchased power
                                          expense in Great Plains Energy’s consolidated statement of income.
  Strategic
                                          Energy’s derivative assets and liabilities consist
                                          of a combination of energy
                                          and energy-related contracts. While some
                                          of these contracts represent
                                          commodities or instruments for which prices
                                          are available from external sources,
                                          other commodities and certain contracts
                                          are not actively traded and are valued
                                          using modeling techniques to determine
                                          expected future market prices. The market
                                          prices used to determine fair value reflect
                                          management's best estimate
                                          considering time, volatility and historical
                                          trends. Future market prices may
                                          vary from those used in recording energy
                                          assets and liabilities at fair value
                                          and such variations could be significant.
  Market
                                          prices for energy and energy-related commodities
                                          vary based upon a number of
                                          factors. Changes in market prices will
                                          affect the recorded fair value of energy
                                          contracts. Changes in the fair value of
                                          energy contracts will affect operating
                                          income in the period of the change for
                                          contracts under fair value accounting and
                                          OCI in the period of change for contracts
                                          under cash flow hedge accounting,
                                          while changes in forward market prices
                                          related to contracts under accrual
                                          accounting will affect operating income
                                          in future periods to the extent those
                                          prices are realized. Management cannot
                                          predict whether, or to what extent, the
                                          factors affecting market prices may change,
                                          but those changes could be material
                                          and could be either favorable or unfavorable.
 33
  GREAT
                                          PLAINS ENERGY RESULTS OF OPERATIONS
  The
                                          following table summarizes Great Plains
                                          Energy’s comparative results of
                                          operations.
 **2005**
                                                
                                                **2004**
                                                
                                                **2003**(millions)Operating
                                                    revenues
                                                
                                                $
                                                2,604.9
                                                
                                                $
                                                2,464.0
                                                
                                                $
                                                2,148.0Fuel
                                                
                                                
                                                (207.9
                                                )
                                                
                                                (179.4
                                                )
                                                
                                                (160.3
                                                )Purchased
                                                    power
                                                
                                                
                                                (1,429.7
                                                )
                                                
                                                (1,300.0
                                                )
                                                
                                                (1,022.1
                                                )Other
                                                    operating expenses
                                                
                                                
                                                (527.5
                                                )
                                                
                                                (510.6
                                                )
                                                
                                                (479.2
                                                )Depreciation
                                                    and amortization
                                                
                                                
                                                (153.1
                                                )
                                                
                                                (150.1
                                                )
                                                
                                                (142.8
                                                )Gain
                                                    (loss) on property
                                                
                                                
                                                (3.5
                                                )
                                                
                                                (5.1
                                                )
                                                
                                                23.7Operating income
                                                
                                                
                                                283.2
                                                
                                                
                                                318.8
                                                
                                                
                                                367.3Non-operating
                                                    income (expenses)
                                                
                                                
                                                2.7
                                                
                                                
                                                (8.4
                                                )
                                                
                                                (13.0
                                                )Interest
                                                    charges
                                                
                                                
                                                (73.8
                                                )
                                                
                                                (83.0
                                                )
                                                
                                                (76.2
                                                )Income
                                                    taxes
                                                
                                                
                                                (39.7
                                                )
                                                
                                                (54.5
                                                )
                                                
                                                (78.6
                                                )Minority
                                                    interest in subsidiaries
                                                
                                                
                                                (7.8
                                                )
                                                
                                                2.1
                                                
                                                
                                                (7.8
                                                )Loss
                                                    from equity investments
                                                
                                                
                                                (0.4
                                                )
                                                
                                                (1.5
                                                )
                                                
                                                (2.0
                                                )Income from continuing operations
                                                
                                                
                                                164.2
                                                
                                                
                                                173.5
                                                
                                                
                                                189.7Discontinued
                                                    operations, net of income taxes
                                                
                                                
                                                (1.9
                                                )
                                                
                                                7.3
                                                
                                                
                                                (44.8
                                                )Net income
                                                
                                                
                                                162.3
                                                
                                                
                                                180.8
                                                
                                                
                                                144.9Preferred
                                                    dividends
                                                
                                                
                                                (1.6
                                                )
                                                
                                                (1.6
                                                )
                                                
                                                (1.6
                                                )Earnings available for common
                                                    shareholders
                                                
                                                $
                                                160.7
                                                
                                                $
                                                179.2
                                                
                                                $
                                                143.3
  **2005
                                          compared to 2004**
 Great
                                          Plains Energy’s 2005 earnings decreased to $160.7 million,
                                          or $2.15 per
                                          share, from $179.2 million, or $2.49 per
                                          share in 2004. A higher average number
                                          of common shares diluted 2005 EPS by $0.08 primarily due to the issuance of 5.0 million
                                          shares in June 2004.
  Consolidated
                                          KCP&L’s net income represented approximately
                                          90% of
                                          Great
                                          Plains Energy’s 2005 earnings and was relatively unchanged
                                          in 2005 compared to
                                          2004. KCP&L’s net income decreased $4.8 million primarily
                                          due to higher fuel
                                          costs and purchased power prices, as well
                                          as the effects of plant outages and
                                          coal conservation on fuel mix. Higher other
                                          operating expenses were partially
                                          offset by the regulatory accounting treatment
                                          of pension expense. These
                                          decreases to net income were offset by
                                          retail revenues increasing 6% as
                                          a
                                          result of significantly warmer summer weather
                                          in 2005 compared to an unusually
                                          mild summer in 2004. Additionally, the
                                          favorable impact of sustained audit
                                          positions on the 2005 composite tax rates
                                          lowered income taxes. KCP&L’s
                                          decrease was more than offset by $5.2 million
                                          in reduced losses at HSS primarily
                                          due to a 2004 impairment charge related
                                          to the 2005 sale of Worry
                                          Free.
  Strategic
                                          Energy’s net income decreased $14.3 million in 2005 compared to 2004.
                                          Retail MWhs delivered decreased 4% in
                                          2005
                                          compared to 2004. The average retail gross
                                          margin per MWh declined
                                          14% to $5.19
                                          in 2005. The decline in average retail
                                          gross margin per MWh in 2005 compared to
                                          2004 was primarily due to an environment
                                          of higher and less volatile energy
                                          prices, flat to higher forward electricity
                                          prices and 2005 SECA charges in
                                          excess of recoveries. The negative impacts
                                          on average retail gross margin per
                                          MWh were partially offset by two significant
                                          opportunities to manage retail
                                          portfolio load requirements, the favorable
                                          reduction of a gross receipts tax
                                          contingency and a favorable change in fair
                                          value related to non-hedging energy
                                          contracts and from cash flow hedge ineffectiveness.
                                          Strategic Energy’s 2005
                                          income taxes decreased due to lower taxable
                                          income partially offset by $3.2 million
                                          in lower tax benefits allocated from the
                                          holding company.
 34
 Higher
                                              reductions in affordable housing investments
                                              and lower related tax credits
                                              decreased other non-regulated operations
                                              net income in 2005 compared to 2004
                                              by
                                              $5.5 million. Discontinued operations
                                              decreased net income $9.2 million in
                                              2005 compared to 2004, primarily due
                                              to a 2004 gain on the sale of the majority
                                              of the KLT Gas natural gas properties
                                              (KLT Gas portfolio). This gain was
                                              partially offset by 2004 losses from
                                              the wind down operations and a loss
                                              due to
                                              the write down of the KLT Gas portfolio
                                              to its estimated net realizable value.
                                              See Note 8 to the consolidated financial
                                              statements for information regarding
                                              the discontinued operations.
  **2004
                                          compared to 2003**
 Great
                                          Plains Energy’s 2004 earnings increased to $179.2 million,
                                          or $2.49 per
                                          share, from $143.3 million, or $2.07 per
                                          share in 2003. A higher average number
                                          of common shares diluted 2004 EPS by $0.10
                                          primarily due to the issuance of 5.0
                                          million shares in June 2004.
  Consolidated
                                          KCP&L’s income from continuing operations increased
                                          $17.4 million
                                          in 2004 compared to 2003. Wholesale revenues
                                          increased as a result of increased
                                          generation, bundling transmission with
                                          energy and lower than expected retail
                                          loads during the summer months. An increase
                                          in operating expenses more than
                                          offset these factors primarily due to the
                                          increase in MWhs generated, including
                                          higher coal and coal transportation costs,
                                          higher administrative expenses, an
                                          impairment charge related to the first
                                          quarter 2005 sale of Worry Free and the
                                          significant positive impact on 2003 of
                                          the Hawthorn No. 5 litigation
                                          settlements. Income taxes decreased due
                                          to the favorable impact of state tax
                                          planning on the composite tax rate and
                                          the allocation of tax benefits from
                                          holding company losses pursuant to the
                                          Company’s intercompany tax allocation
                                          agreement. The change in consolidated KCP&L's discontinued operations was
                                          due to a $7.1 million loss on the June
                                          2003 disposition of HSS’ interest in RSAE
                                          and continuing losses through the date
                                          of disposition of $1.6
                                          million.
  Strategic
                                          Energy’s net income increased $2.9 million
                                          in 2004 compared to 2003. Retail MWhs delivered
                                          increased 22% in 2004 compared
                                          to 2003. Great Plains Energy, through IEC,
                                          completed the purchase of an
                                          additional 11.45% indirect interest in
                                          Strategic Energy resulting in a $1.8
                                          million increase in net income. The increase
                                          to net income was partially offset
                                          by a 16% decline in the average retail
                                          gross margin per MWh to $6.01 in
                                          2004.
                                          The decline in average retail gross margin
                                          was primarily due to the roll-off of
                                          older, higher margin contracts, price discounts
                                          driven by a more competitive
                                          market and persistently higher commodity
                                          prices and a $4.2 million increase in
                                          tax reserves. The negative impacts on average
                                          retail gross margin per MWh were
                                          partially offset by a $1.7 million change in fair value related to
                                          non-hedging energy contracts and from cash
                                          flow hedge ineffectiveness. Strategic
                                          Energy’s income taxes decreased $5.9 million in
                                          2004 compared to 2003 reflecting
                                          lower taxable income and additional tax
                                          benefits allocated from the holding
                                          company.
 
 Lower
                                          reductions in affordable housing investments
                                          and lower interest charges
                                          increased other non-regulated operations
                                          net income in 2004 compared to 2003 by
                                          $3.1 million.
                                          KLT Gas discontinued operations increased
                                          $43.4 million
                                          in 2004 compared to 2003 primarily due
                                          to the gain on the sale of the majority
                                          of KLT Gas portfolio in 2004 combined with
                                          the 2003 impairment related to the
                                          exit of the KLT Gas business.
  35
  CONSOLIDATED
                                          KCP&L RESULTS OF
                                          OPERATIONS
  The
                                          following discussion of consolidated KCP&L results of operations includes
                                          KCP&L, an integrated, regulated electric utility
                                          and HSS, an unregulated
                                          subsidiary of KCP&L. References to KCP&L, in the discussion that
                                          follows, reflect only the operations of
                                          the utility. The following table
                                          summarizes consolidated KCP&L's comparative results of operations.
 **2005**
                                                
                                                **2004**
                                                
                                                **2003**(millions)Operating
                                                    revenues
                                                
                                                $
                                                1,130.9
                                                
                                                $
                                                1,091.6
                                                
                                                $
                                                1,057.0Fuel
                                                
                                                
                                                (207.9
                                                )
                                                
                                                (179.4
                                                )
                                                
                                                (160.3
                                                )Purchased
                                                    power
                                                
                                                
                                                (61.3
                                                )
                                                
                                                (52.5
                                                )
                                                
                                                (53.2
                                                )Other
                                                    operating expenses
                                                
                                                
                                                (460.8
                                                )
                                                
                                                (442.3
                                                )
                                                
                                                (422.6
                                                )Depreciation
                                                    and amortization
                                                
                                                
                                                (146.6
                                                )
                                                
                                                (145.2
                                                )
                                                
                                                (141.0
                                                )Gain
                                                    (loss) on property
                                                
                                                
                                                (4.6
                                                )
                                                
                                                (5.1
                                                )
                                                
                                                1.6Operating income
                                                
                                                
                                                249.7
                                                
                                                
                                                267.1
                                                
                                                
                                                281.5Non-operating
                                                    income (expenses)
                                                
                                                
                                                11.8
                                                
                                                
                                                (1.9
                                                )
                                                
                                                (3.1
                                                )Interest
                                                    charges
                                                
                                                
                                                (61.8
                                                )
                                                
                                                (74.2
                                                )
                                                
                                                (70.3
                                                )Income
                                                    taxes
                                                
                                                
                                                (48.2
                                                )
                                                
                                                (52.8
                                                )
                                                
                                                (83.5
                                                )Minority
                                                    interest in subsidiaries
                                                
                                                
                                                (7.8
                                                )
                                                
                                                5.1
                                                
                                                
                                                1.3Income from continuing operations
                                                
                                                
                                                143.7
                                                
                                                
                                                143.3
                                                
                                                
                                                125.9Discontinued
                                                    operations, net of income taxes
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                (8.7
                                                )Net income
                                                
                                                $
                                                143.7
                                                
                                                $
                                                143.3
                                                
                                                $
                                                117.2
  **Consolidated
                                          KCP&L Sales Revenues and MWh Sales**
 **%**
                                                
                                                
                                                **%****2005**
                                                **Change**
                                                **2004**
                                                **Change**
                                                **2003**Retail
                                                    revenues
                                                
                                                (millions)Residential
                                                
                                                $
                                                380.0
                                                
                                                
                                                9
                                                
                                                $
                                                347.1
                                                
                                                
                                                (4
                                                )
                                                $
                                                361.5Commercial
                                                
                                                
                                                434.6
                                                
                                                
                                                3
                                                
                                                
                                                421.1
                                                
                                                
                                                1
                                                
                                                
                                                417.6Industrial
                                                
                                                
                                                100.9
                                                
                                                
                                                5
                                                
                                                
                                                96.2
                                                
                                                
                                                1
                                                
                                                
                                                95.0Other retail revenues
                                                
                                                
                                                8.6
                                                
                                                
                                                (2
                                                )
                                                
                                                8.7
                                                
                                                
                                                1
                                                
                                                
                                                8.7Total retail
                                                
                                                
                                                924.1
                                                
                                                
                                                6
                                                
                                                
                                                873.1
                                                
                                                
                                                (1
                                                )
                                                
                                                882.8Wholesale
                                                    revenues
                                                
                                                
                                                192.4
                                                
                                                
                                                (4
                                                )
                                                
                                                200.2
                                                
                                                
                                                27
                                                
                                                
                                                157.5Other
                                                    revenues
                                                
                                                
                                                14.3
                                                
                                                
                                                (15
                                                )
                                                
                                                16.8
                                                
                                                
                                                15
                                                
                                                
                                                14.6KCP&L electric revenues
                                                
                                                
                                                1,130.8
                                                
                                                
                                                4
                                                
                                                
                                                1,090.1
                                                
                                                
                                                3
                                                
                                                
                                                1,054.9Subsidiary
                                                    revenues
                                                
                                                
                                                0.1
                                                
                                                
                                                (93
                                                )
                                                
                                                1.5
                                                
                                                
                                                (25
                                                )
                                                
                                                2.1Consolidated KCP&L revenues
                                                
                                                $
                                                1,130.9
                                                
                                                
                                                4
                                                
                                                $
                                                1,091.6
                                                
                                                
                                                3
                                                
                                                $
                                                1,057.0
  **%**
                                              
                                              
                                              **%****2005**
                                              **Change**
                                              **2004**
                                              **Change**
                                              **2003**Retail
                                                  MWh sales
                                              
                                              (thousands)Residential
                                              
                                              
                                              5,383
                                              
                                              
                                              10
                                              
                                              
                                              4,903
                                              
                                              
                                              (3
                                              )
                                              
                                              5,047Commercial
                                              
                                              
                                              7,292
                                              
                                              
                                              4
                                              
                                              
                                              6,998
                                              
                                              
                                              1
                                              
                                              
                                              6,933Industrial
                                              
                                              
                                              2,165
                                              
                                              
                                              5
                                              
                                              
                                              2,058
                                              
                                              
                                              1
                                              
                                              
                                              2,035Other retail MWh sales
                                              
                                              
                                              82
                                              
                                              
                                              (3
                                              )
                                              
                                              85
                                              
                                              
                                              -
                                              
                                              
                                              85Total retail
                                              
                                              
                                              14,922
                                              
                                              
                                              6
                                              
                                              
                                              14,044
                                              
                                              
                                              -
                                              
                                              
                                              14,100Wholesale
                                                  MWh sales
                                              
                                              
                                              4,608
                                              
                                              
                                              (30
                                              )
                                              
                                              6,603
                                              
                                              
                                              14
                                              
                                              
                                              5,777KCP&L electric MWh sales
                                              
                                              
                                              19,530
                                              
                                              
                                              (5
                                              )
                                              
                                              20,647
                                              
                                              
                                              4
                                              
                                              
                                              19,877
  36
 Retail
                                          revenues increased $51.0 million in 2005
                                          compared to 2004. The increase was
                                          driven by significantly warmer summer weather
                                          in 2005 compared to an unusually
                                          mild summer in 2004 and continued load
                                          growth of approximately 2%, adjusted
                                          for weather for 2005 and 2004. Residential
                                          usage per customer increased 9% in
                                          2005,
                                          driven by a 45% increase
                                          in cooling degree-days, which was 19% above
                                          normal.
  Retail
                                          revenues decreased $9.7 million
                                          in 2004 compared to 2003 primarily due
                                          to a $14.4 million reduction in
                                          residential revenues. Residential usage
                                          per customer decreased 4% in 2004
                                          compared to 2003 as a result of significantly
                                          cooler summer weather in 2004. The
                                          Kansas City area experienced one of the
                                          coolest summers in the past 30 years,
                                          which resulted in cooling degree-days 18%
                                          below normal. The impact of the cooler
                                          summer weather was partially offset by
                                          load growth in 2004. The average number
                                          of residential and commercial customers
                                          continues to grow; both increased 1% to
                                          2% in 2005 and 2004 compared to the respective
                                          prior years.
  Wholesale
                                          revenues decreased $7.8 million in 2005 compared to 2004 due to
                                          a 30% decrease
                                          in MWhs sold, which was significantly offset
                                          by an increase in the average
                                          market price per MWh. The decrease in MWhs
                                          sold was driven by a 5% decrease
                                          in net MWhs generated as a result of coal
                                          conservation and plant outages.
                                          Additionally, retail MWh sales increased
                                          6% in 2005 compared to 2004, which
                                          resulted in less MWhs available for wholesale
                                          sales. Average market price per
                                          MWh increased 56% to
                                          $47.82
                                          in 2005 compared to 2004 due to warmer
                                          summer weather in 2005, higher natural
                                          gas prices, transmission constraints and
                                          coal conservation in the region.
  Wholesale
                                          revenues increased $42.7 million
                                          in 2004 compared to 2003. Wholesale MWhs
                                          sold increased 14%, primarily due to
                                          increased generation, bundling transmission
                                          with energy and lower than expected
                                          retail loads during the summer months,
                                          combined with successful marketing
                                          efforts. Average market prices per MWh
                                          increased 13% to $30.72 in 2004 compared
                                          to 2003, primarily due to more sales made
                                          during periods of higher natural gas
                                          prices and bundling transmission with energy
                                          to provide a delivered product.
                                          Additionally, wholesale revenues were affected
                                          by the partial settlements of the
                                          Hawthorn No. 5 litigation.
  As
                                          described in Item 3. Legal Proceedings,
                                          KCP&L filed suit against multiple
                                          defendants who are alleged to have responsibility
                                          for the 1999 Hawthorn No. 5
                                          boiler explosion .
                                          Various
                                          defendants settled with KCP&L in this litigation, resulting in KCP&L
                                          recording $2.4 million and $35.8 million
                                          in 2004 and 2003, respectively. A
                                          portion of the settlements, $1.2 million
                                          and $17.3 million for 2004 and 2003,
                                          respectively, was recorded as a recovery
                                          of capital expenditures. The following
                                          table summarizes the income statement impact
                                          related to the remainder of the
                                          settlements for loss of use of Hawthorn
                                          No. 5.
 **2004**
                                                
                                                **2003**(millions)Wholesale
                                                    revenues
                                                
                                                $
                                                0.2
                                                
                                                $
                                                2.7Fuel
                                                
                                                
                                                0.2
                                                
                                                
                                                4.0Purchased
                                                    power
                                                
                                                
                                                0.8
                                                
                                                
                                                11.8Operating income
                                                
                                                
                                                1.2
                                                
                                                
                                                18.5Income
                                                    taxes
                                                
                                                
                                                (0.5
                                                )
                                                
                                                (7.2
                                                )Net income
                                                
                                                $
                                                0.7
                                                
                                                $
                                                11.3
 37
 **Consolidated
                                            KCP&L Fuel and Purchased Power**
 **Net
                                                    MWhs Generated**
                                                
                                                
                                                
                                                **%**
                                                
                                                
                                                **%****by
                                                    Fuel Type**
                                                
                                                **2005**
                                                **Change**
                                                **2004**
                                                **Change**
                                                **2003**(thousands)Coal
                                                
                                                
                                                14,994
                                                
                                                
                                                (4
                                                )
                                                
                                                15,688
                                                
                                                
                                                5
                                                
                                                
                                                15,011Nuclear
                                                
                                                
                                                4,146
                                                
                                                
                                                (13
                                                )
                                                
                                                4,762
                                                
                                                
                                                14
                                                
                                                
                                                4,178Natural
                                                    gas and oil
                                                
                                                
                                                473
                                                
                                                
                                                206
                                                
                                                
                                                155
                                                
                                                
                                                (43
                                                )
                                                
                                                270Total Generation
                                                
                                                
                                                19,613
                                                
                                                
                                                (5
                                                )
                                                
                                                20,605
                                                
                                                
                                                6
                                                
                                                
                                                19,459
  Fuel
                                          expense increased $28.5 million in 2005
                                          compared to 2004 despite a 5% decrease
                                          in MWhs generated due to a combination
                                          of changes in the fuel mix to
                                          higher
                                          cost generation, increased coal and coal
                                          transportation costs and increased
                                          natural gas prices. The changes in fuel
                                          mix were driven by the number and
                                          duration of plant outages as well as coal
                                          conservation measures. KCP&L’s
                                          2005 coal and coal transportation contracts
                                          were entered into at higher average
                                          prices than related 2004 contracts.
  Fuel
                                          expense increased $19.1 million
                                          in 2004 compared to 2003 due to a 6% increase
                                          in MWhs generated, higher coal and
                                          coal transportation costs, higher natural
                                          gas costs and the net effect of $3.8
                                          million from the Hawthorn No. 5 partial
                                          litigation settlements. The increase was
                                          partially offset by changes in the fuel
                                          mix to lower cost generation due to
                                          increased coal and nuclear fuel and less
                                          natural gas in the fuel mix. The change
                                          in fuel mix was primarily due to the 2003
                                          refueling outage at Wolf Creek and the
                                          cooler 2004 summer weather, which allowed
                                          coal and nuclear capacity to supply a
                                          greater percentage of the reduced retail
                                          load.
  Purchased
                                          power expense increased $8.8 million in
                                          2005 compared to 2004. The average price
                                          per MWh purchased increased 61% in
                                          2005
                                          compared to 2004 partially offset by an
                                          8% decline
                                          in MWhs purchased. The increased prices
                                          were driven by purchases during higher
                                          priced peak hours as a result of warmer
                                          weather, plant outages and overall
                                          higher average prices due to higher natural
                                          gas prices combined with
                                          transmission constraints, coal conservation
                                          and outages in the region.
  Purchased
                                          power expense decreased $0.7 million
                                          in 2004 compared to 2003. MWhs purchased
                                          decreased 31% in 2004 compared to 2003
                                          primarily due to lower retail customer
                                          demand and a 2% increase in the coal
                                          fleet equivalent availability factor in
                                          2004 compared to 2003. The decrease in
                                          MWhs purchased was partially offset by
                                          an 11% increase in the average price per
                                          MWh purchased in 2004 compared to 2003
                                          primarily due to higher natural gas
                                          market prices and increased market demand.
                                          Another offset includes the net
                                          effect of the Hawthorn No. 5 partial litigation
                                          settlements, which impacted
                                          purchased power expense by $11.0 million
                                          in 2004 compared to 2003.
  **Consolidated
                                          KCP&L Other Operating Expenses*****(including other
                                          operating, maintenance and general taxes)***
 Consolidated
                                          KCP&L's other operating expenses increased
                                          $18.5 million in 2005 compared to
                                          2004 primarily due to the following:
  ·
                                              increased
                                                  employee related expenses of $4.7
                                                  million including severance and
                                                  incentive compensation,  ·
                                              increased
                                                  expenses of $2.4 million due to
                                                  higher legal reserves,  ·
                                              increased
                                                  regulatory expenses of $1.2 million
                                                  including expenses related to the
                                                  comprehensive energy plan,  ·
                                              increased
                                                  general taxes of $5.9 million mostly
                                                  due to increases in gross receipts
                                                  tax, assessed property valuations
                                                  and mill
                                                  levies,  38
 ·
                                              increased
                                                  expenses of $4.2 million due to
                                                  higher restoration costs for a
                                                  January
                                                  2005 ice storm and June 2005 wind
                                                  storms compared to the 2004 wind
                                                  storm
                                                  restoration costs and  ·
                                              increased
                                                  production operations and maintenance
                                                  expenses of $4.3 million primarily
                                                  due to scheduled and forced plant
                                                  maintenance in 2005 and the reversal
                                                  of
                                                  an environmental accrual in 2004.  Partially
                                          offsetting the increase in other operating
                                          expenses was:
  ·
                                              decreased
                                                  pension expense of $4.7 million
                                                  due to the regulatory accounting
                                                  treatment
                                                  of pension expense in accordance
                                                  with MPSC and KCC orders
                                                  and  ·
                                              decreased
                                                  transmission service expense of
                                                  $5.7 million primarily due to lower
                                                  wholesale MWhs sold.  Consolidated
                                          KCP&L's other operating expenses increased
                                          $19.7 million in
                                          2004
                                          compared to 2003 primarily due to the following:
  ·
                                              increased
                                                  pension expense of $3.5 million
                                                  primarily due to lower discount
                                                  rates, the
                                                  amortization of investment losses
                                                  from prior years and plan settlement
                                                  losses,  ·
                                              increased
                                                  other employee-related costs of
                                                  $3.5 million including higher medical
                                                  costs and incentive compensation
                                                  costs,  ·
                                              increased
                                                  property taxes of $4.3 million
                                                  primarily due to increases in assessed
                                                  property valuations and mill levies,  ·
                                              increased
                                                  outside services of $4.4 million
                                                  including costs associated with
                                                  Sarbanes-Oxley compliance,  ·
                                              increased
                                                  transmission and distribution expenses
                                                  including $2.5 million primarily
                                                  due to increased transmission usage
                                                  charges as a result of the increased
                                                  wholesale MWh sales, $2.3 million
                                                  related to SPP administration and
                                                  $1.3
                                                  million in storm related expenses
                                                  and  ·
                                              increased
                                                  office expense including $2.1 million
                                                  expenditure to buy out computer
                                                  equipment operating leases.  Partially
                                          offsetting the increase in other operating
                                          expenses was:
  ·
                                              decreased
                                                  plant maintenance expense of $1.3
                                                  million primarily due to differences
                                                  in
                                                  timing and scope of outages and
                                                  $0.9 million in lower gross receipts
                                                  taxes
                                                  as a result of lower retail revenues
                                                  and  ·
                                              decreased
                                                  expenses due to the reversal of
                                                  an environmental accrual and the
                                                  establishment of a regulatory asset
                                                  for the probable recovery in the
                                                  Kansas jurisdiction of enhanced
                                                  security
                                                  costs.  **Consolidated
                                          KCP&L Gain (loss) on Property**
 Consolidated
                                          KCP&L's gain (loss) on property remained relatively
                                          unchanged in 2005
                                          compared to 2004, due to offsetting losses.
                                          During 2005, KCP&L wrote off
                                          $3.6 million
                                          of plant operating system development costs
                                          as a result of vendor
                                          non-performance. See Note 15 to the consolidated
                                          financial statements for
                                          related legal proceedings. Consolidated
                                          KCP&L's gain (loss) on property
                                          increased operating expenses $6.7 million
                                          in 2004 compared to 2003 primarily due
                                          to the 2004 impairment charge related to
                                          the 2005 sale of Worry Free.
  **Consolidated
                                          KCP&L Interest Charges**
 Consolidated
                                          KCP&L's interest charges decreased $12.4 million
                                          in 2005 compared to 2004
                                          primarily due to $10.1 million
                                          of interest related to the IRS 1995-1999
                                          audit settlement in 2004. Consolidated
                                          KCP&L's interest charges increased $3.9 million
                                          in 2004 compared to 2003.
                                          The increase was primarily due to the $10.1
                                          million of interest discussed above,
                                          partially offset by a $6.3 million decrease
                                          primarily due to the 2004 redemption
                                          of KCP&L’s $154.6 million 8.3% Junior Subordinated
                                          Deferred Interest Bonds.
  39
  Consolidated
                                            KCP&L Income
                                            Taxes
 Consolidated
                                          KCP&L's income taxes decreased $4.6 million
                                          in 2005 compared to 2004.
                                          Several factors contributed
                                          to the decreased taxes including lower
                                          taxable income in 2005. The favorable
                                          impact of sustained audit positions on
                                          the composite tax rate decreased income
                                          taxes $6.3 million,
                                          including $3.1 million reflecting the composite
                                          tax rate change on deferred tax
                                          balances, and the domestic manufacturers’ deduction provided for under the
                                          American Jobs Creation Act of 2004 contributed
                                          $1.5 million to the decrease in
                                          taxes. These 2005 decreases to income taxes
                                          were partially offset when compared
                                          to 2004 due to the $10.1 million 2004 tax
                                          reserves release discussed
                                          below.
  Consolidated
                                          KCP&L's income taxes decreased $30.7 million
                                          in 2004 compared to 2003. Several factors
                                          contributed to the decreased taxes
                                          including lower taxable income in 2004.
                                          The favorable impact of state tax
                                          planning on the composite tax rate decreased
                                          income taxes $10.1 million,
                                          including $8.6 million reflecting the composite
                                          tax rate change on deferred tax
                                          balances resulting from book to tax temporary
                                          differences. An additional $10.1
                                          million decrease is attributable to the
                                          reserves for the interest component of
                                          the IRS 1995-1999 audit settlement, which
                                          offset interest expense and had no
                                          impact on income from continuing operations.
                                          Income taxes also decreased by $5.9
                                          million due to the allocation of tax benefits
                                          from holding company losses
                                          pursuant to the Company's intercompany
                                          tax allocation agreement.
  **STRATEGIC
                                          ENERGY RESULTS OF OPERATIONS**
  The
                                          following table summarizes Strategic Energy's
                                          comparative results of
                                          operations.
 **2005**
                                                
                                                **2004**
                                                
                                                **2003**(millions)Operating
                                                    revenues
                                                
                                                $
                                                1,474.0
                                                
                                                $
                                                1,372.4
                                                
                                                $
                                                1,091.0Purchased
                                                    power
                                                
                                                
                                                (1,368.4
                                                )
                                                
                                                (1,247.5
                                                )
                                                
                                                (968.9
                                                )Other
                                                    operating expenses
                                                
                                                
                                                (53.4
                                                )
                                                
                                                (51.3
                                                )
                                                
                                                (42.1
                                                )Depreciation
                                                    and amortization
                                                
                                                
                                                (6.4
                                                )
                                                
                                                (4.8
                                                )
                                                
                                                (1.7
                                                )Gain
                                                    (loss) on property
                                                
                                                
                                                (0.1
                                                )
                                                
                                                -
                                                
                                                
                                                -Operating income
                                                
                                                
                                                45.7
                                                
                                                
                                                68.8
                                                
                                                
                                                78.3Non-operating
                                                    income (expenses)
                                                
                                                
                                                2.5
                                                
                                                
                                                1.7
                                                
                                                
                                                1.0Interest
                                                    charges
                                                
                                                
                                                (3.4
                                                )
                                                
                                                (0.7
                                                )
                                                
                                                (0.4
                                                )Income
                                                    taxes
                                                
                                                
                                                (16.6
                                                )
                                                
                                                (24.3
                                                )
                                                
                                                (30.2
                                                )Minority
                                                    interest in subsidiaries
                                                
                                                
                                                -
                                                
                                                
                                                (3.0
                                                )
                                                
                                                (9.1
                                                )Net income
                                                
                                                $
                                                28.2
                                                
                                                $
                                                42.5
                                                
                                                $
                                                39.6
  Retail
                                              MWhs delivered decreased 4% to 19.5 million
                                              in 2005 compared to 2004. The average
                                              retail gross margin per MWh declined
                                              14%
                                              to $5.19 in 2005 .
                                              The
                                              decline in average retail gross margin
                                              per MWh in 2005 compared to 2004 was
                                              primarily due to an environment of
                                              higher and less volatile energy prices,
                                              flat
                                              to higher forward electricity prices
                                              and $8.3 million
                                              in 2005 SECA charges in excess of recoveries.
                                              The negative impacts on average
                                              retail gross margin per MWh were partially
                                              offset by $6.8 million
                                              for two significant opportunities to
                                              manage retail portfolio load requirements,
                                              a $2.5 million
                                              favorable reduction of a gross receipts
                                              tax contingency and an $0.8 million
                                              change in fair value related to non-hedging
                                              energy contracts and from cash flow
                                              hedge ineffectiveness.
  Retail
                                              MWhs delivered increased 22% in
                                              2004
                                              compared to 2003. In 2004, Great Plains
                                              Energy, through IEC, purchased an
                                              additional 11.45% indirect interest
                                              in Strategic Energy resulting in a
                                              $1.8
                                              million increase in net income. The
                                              increase to net income was partially
                                              offset
                                              by a 16% decline
                                              in the average retail gross margin
                                              per MWh to $6.01 in 2004. The decline
                                              in
                                              average retail gross margin is primarily
                                              due to the roll-off of older, higher
                                              margin contracts, price discounts driven
                                              by a more competitive
                                              market and persistently higher commodity
                                              prices and a $4.2 million increase
                                              in
                                              tax
  40
  reserves.
                                                The negative impacts on average retail
                                                gross margin per MWh were partially
                                                offset by a $1.7 million change in
                                                fair value related to non-hedging
                                                energy
                                                contracts and from cash flow hedge
                                                ineffectiveness.
 **Strategic
                                              Energy Purchased Power**
 Purchased
                                              power is the cost component of Strategic
                                              Energy’s average retail gross margin.
                                              Strategic Energy purchases blocks of
                                              electricity from power suppliers based
                                              on
                                              forecasted peak demand for its retail
                                              customers. Actual customer demand does
                                              not
                                              always equate to the volume included
                                              in blocks of purchased power. Consequently,
                                              Strategic Energy sells any excess retail
                                              electricity supply over actual customer
                                              requirements back into the wholesale
                                              market. These sales occur on many contracts
                                              and are usually short-term power sales
                                              (day ahead) and typically settle within
                                              the reporting period. Excess retail
                                              electricity supply sales also include
                                              long-term forward physical sales to
                                              wholesale counterparties, which are
                                              accounted for on a mark-to-market basis.
                                              Strategic Energy typically executes
                                              these transactions to manage basis
                                              and credit risks. The proceeds from
                                              excess
                                              retail supply sales are recorded as
                                              a reduction of purchased power, as
                                              they do
                                              not represent the quantity of electricity
                                              consumed by Strategic Energy’s
                                              customers. The amount of excess retail
                                              supply sales that reduced purchased
                                              power
                                              was $181.2 million,
                                              $173.3 million and $91.2 million in
                                              2005, 2004 and 2003, respectively.
                                              Additionally, in certain markets, load-serving
                                              entities are required to sell to
                                              and purchase power from a RTO/ISO rather
                                              than directly transact with suppliers
                                              and end use customers. The sale and
                                              purchase activity related to these
                                              certain
                                              RTO/ISO markets is reflected on a net
                                              basis in Strategic Energy’s purchased
                                              power.
  Strategic
                                              Energy utilizes derivative instruments,
                                              including forward physical delivery
                                              contracts, in the procurement of electricity.
                                              Purchased power is also impacted
                                              by the net change in fair value related
                                              to non-hedging energy contracts and
                                              from
                                              cash flow hedge ineffectiveness. Net
                                              changes in fair value reduced purchased
                                              power expenses by $2.5 million
                                              in 2005, $1.7 million in 2004 and were
                                              insignificant for 2003. See Note 21
                                              to
                                              the consolidated financial statements
                                              for more information.
  **Strategic
                                              Energy Other Operating Expenses**
 Strategic
                                              Energy’s other operating expenses increased
                                              $2.1 million in 2005 compared to
                                              2004 primarily due to increased employee
                                              related expenses including increased
                                              severance and incentive compensation,
                                              partially offset by a 11% decrease
                                              in full time employees to 240 in 2005.
                                              Strategic Energy’s other operating
                                              expenses increased $9.2 million in
                                              2004 compared to 2003; a 22% increase driven
                                              mainly by higher staffing levels associated
                                              with the continued growth of
                                              Strategic Energy. Additionally, higher
                                              consulting expenses associated with
                                              new
                                              software development initiatives and
                                              higher general tax expenses primarily
                                              due
                                              to higher capital stock and franchise
                                              tax rates increased 2004 other operating
                                              expenses compared to 2003.
  **Strategic
                                              Energy Income Taxes**
 Strategic
                                              Energy’s income taxes decreased $7.7 million in 2005 compared to 2004
                                              reflecting lower taxable income partially
                                              offset by a net $3.2 million
                                              decrease in the allocation of tax benefits
                                              from holding company losses pursuant
                                              to the Company's intercompany tax allocation
                                              agreement. Strategic Energy’s
                                              income taxes decreased $5.9 million
                                              in 2004 compared to 2003 reflecting
                                              lower
                                              taxable income and
                                              additional tax benefits. The additional
                                              benefits included $3.1 million due
                                              to
                                              the allocation of tax benefits from
                                              holding company losses pursuant to
                                              the
                                              Company's intercompany tax allocation
                                              agreement and a slight decrease due
                                              to the
                                              favorable impact of state tax planning
                                              on the composite tax rate.
  **OTHER
                                              NON-REGULATED ACTIVITES**
  **Investment
                                              in Affordable Housing Limited Partnerships
                                              - KLT
                                              Investments**
 KLT
                                              Investments Inc.’s (KLT Investments) net income in 2005
                                              totaled $5.7 million
                                              (including an after tax reduction of
                                              $6.2 million
                                              in its affordable housing investment)
                                              compared to net income of
                                              $11.2 million
  41
  in
                                                2004
                                                (including an after tax reduction
                                                of $4.6 million in its affordable housing
                                                investment) and net income of $8.1 million in 2003 (including an after
                                                tax
                                                reduction of $6.7 million in its affordable housing
                                                investment).
 On
                                              a
                                              quarterly basis, KLT Investments compares
                                              the cost of properties accounted for
                                              by the cost method to the total of
                                              projected residual value of the properties
                                              and remaining tax credits to be received.
                                              Based on the latest comparison, KLT
                                              Investments reduced its investments
                                              in affordable housing limited partnerships
                                              by $10.0 million, $7.5 million and
                                              $11.0 million in 2005, 2004 and 2003,
                                              respectively. Pre-tax reductions in
                                              affordable housing investments are
                                              estimated
                                              to be $1 million in 2006 and $2 million
                                              in 2007. These projections are based
                                              on
                                              the latest information available but
                                              the ultimate amount and timing of actual
                                              reductions could be significantly different
                                              from the above estimates. The
                                              properties underlying the partnership
                                              investment are subject to certain risks
                                              inherent in real estate ownership and
                                              management. Even after these estimated
                                              reductions, net income from the investments
                                              in affordable housing is expected to
                                              be positive for 2006 through 2008.
  KLT
                                              Investments accrued tax credits related
                                              to its investments in affordable housing
                                              limited partnerships of $15.4 million,
                                              $18.3 million and $19.1 million in
                                              2005, 2004 and 2003, respectively.
                                              Management
                                              estimates tax credits will be $9 million,
                                              $5 million and $2 million for 2006
                                              through 2008, respectively.
  **KLT
                                              Gas Discontinued Operations**
 Discontinued
                                              operations decreased net income $9.2
                                              million in 2005 compared to 2004 primarily
                                              due to a gain on the 2004 sale of the
                                              KLT Gas portfolio, partially offset
                                              by
                                              losses from the wind down operations
                                              and for an arbitration settlement in
                                              2005.
                                              KLT Gas’ discontinued operations loss in 2003
                                              was $36.1 million including
                                              impairments and operating losses. See
                                              Note 8 to the consolidated financial
                                              statements for additional information.
  **GREAT
                                              PLAINS ENERGY AND CONSOLIDATED KCP&L SIGNIFICANT BALANCE SHEET CHANGES
                                              (DECEMBER 31, 2005 COMPARED TO DECEMBER
                                              31, 2004)**
  ·
                                                  Great
                                                      Plains Energy’s restricted cash and supplier
                                                      collateral decreased $5.8
                                                      million due to certain Strategic
                                                      Energy suppliers posting letters
                                                      of
                                                      credit to satisfy collateral
                                                      requirements rather than
                                                      cash.  ·
                                                  Great
                                                      Plains Energy’s and consolidated KCP&L’s fuel inventories decreased
                                                      $4.0 million primarily due
                                                      to $9.3 million in fewer coal
                                                      deliveries
                                                      resulting from railroad performance
                                                      issues partially offset by
                                                      an increase
                                                      in coal due to physical inventory
                                                      adjustments.  ·
                                                  Great
                                                      Plains Energy’s combined deferred income
                                                      taxes - current assets and
                                                      deferred income taxes - current
                                                      liabilities changed from an
                                                      asset of $13.1
                                                      million at December 31, 2004,
                                                      to a liability of $1.3 million.
                                                      The change
                                                      in the fair value of Strategic
                                                      Energy’s energy-related derivative
                                                      instruments increased the liability
                                                      $10.1million.
                                                      Consolidated KCP&L’s deferred income taxes - current
                                                      assets decreased
                                                      $3.9 million partially due
                                                      to a lower nuclear fuel outage
                                                      reserve
                                                      resulting from the completion
                                                      of the scheduled spring 2005
                                                      refueling.
                                                      Consolidated KCP&L’s deferred income taxes - current
                                                      assets were
                                                      reclassified to a current liability
                                                      during consolidation with Great
                                                      Plains
                                                      Energy.  ·
                                                  Great
                                                      Plains Energy’s derivative instruments -
                                                      current assets increased $32.8
                                                      million primarily due to an
                                                      increase in Strategic Energy’s energy-related
                                                      derivative instruments of $33.2
                                                      million due to additional contract
                                                      volume
                                                      and an increase in fair value
                                                      as a result of changes in forward
                                                      market
                                                      prices for power.  ·
                                                  Great
                                                      Plains Energy’s affordable housing limited
                                                      partnerships decreased $13.1
                                                      million due to reductions in
                                                      the valuation of the properties
                                                      held by KLT
                                                      Investments.  42
  ·
                                                  Great
                                                      Plains Energy’s other - nonutility property
                                                      and investments decreased
                                                      $15.4 million primarily due
                                                      to a $2.3 million decrease
                                                      related to the sale
                                                      and write off of investments
                                                      and a decrease at consolidated
                                                      KCP&L.
                                                      Consolidated KCP&L’s other - nonutility property
                                                      and investments
                                                      decreased $12.9 million primarily
                                                      due to KCP&L receiving a return of
                                                      its net investment from the
                                                      Central Interstate Low Level
                                                      Radioactive Waste
                                                      Compact Commission.  ·
                                                  Great
                                                      Plains Energy’s and consolidated KCP&L’s construction work in progress
                                                      increased $47.1 million due to $25.3 million
                                                      in contract payments
                                                      related to wind generation
                                                      and environmental equipment
                                                      upgrades and normal
                                                      construction activity.  ·
                                                  Great
                                                      Plains Energy’s and consolidated KCP&L’s regulatory assets increased
                                                      $35.6 million primarily due to the
                                                      regulatory accounting treatment
                                                      for pension expense and the
                                                      change in Wolf Creek depreciable
                                                      life for
                                                      Missouri regulatory purposes
                                                      in accordance with MPSC and
                                                      KCC orders.
                                                      Additionally, adopting FASB
                                                      Interpretation (FIN) No. 47,
“Accounting for
                                                      Conditional Asset Retirement
                                                      Obligations” during 2005 increased regulatory
                                                      assets $13.2 million.  ·
                                                  Great
                                                      Plains Energy’s derivative instruments -
                                                      deferred charges and other
                                                      assets
                                                      increased $19.5 million primarily
                                                      due to a $20.2 million increase
                                                      in
                                                      Strategic Energy’s energy-related derivative
                                                      instruments due to additional
                                                      contract volume and an increase
                                                      in fair value as a result of
                                                      changes in
                                                      forward market prices for power.  ·
                                                  Great
                                                      Plains Energy’s other - deferred charges
                                                      and other assets decreased
                                                      $8.6
                                                      million primarily due to IEC’s amortization of $15.0 million for the
                                                      intangible assets related to
                                                      the 2004 purchase of an additional
                                                      indirect
                                                      interest in Strategic Energy
                                                      partially offset by consolidated
                                                      KCP&L.
                                                      Consolidated KCP&L’s other - deferred charges
                                                      and other assets
                                                      increased $7.0 million primarily
                                                      due to a reclass from accrued
                                                      taxes of an
                                                      $8.8 million income tax refund receivable
                                                      that management expects to
                                                      be delayed until the related
                                                      IRS audit cycle can be completed.  ·
                                                  Great
                                                      Plains Energy’s and consolidated KCP&L’s commercial paper increased
                                                      $31.9 million primarily due
                                                      to $25.3 million in contract
                                                      payments related
                                                      to wind generation and environmental
                                                      equipment upgrades and timing
                                                      of cash
                                                      payments.  ·
                                                  Great
                                                      Plains Energy’s and consolidated KCP&L’s accounts payable increased
                                                      $31.5 million and $21.9 million,
                                                      respectively, primarily due
                                                      to timing of
                                                      cash payments.  ·
                                                  Great
                                                      Plains Energy’s accrued taxes decreased $9.9
                                                      million primarily due to the
                                                      timing of tax payments and
                                                      Strategic Energy’s payment of accrued gross
                                                      receipts taxes and the reversal
                                                      of a reserve related to an
                                                      audit
                                                      settlement. Consolidated KCP&L’s accrued taxes decreased
                                                      $7.0 million due to the timing of
                                                      tax payments partially offset
                                                      by an
                                                      increase related to a reclass
                                                      of an $8.8 million income tax
                                                      refund
                                                      receivable to other deferred
                                                      charges and other
                                                      assets.  ·
                                                  Great
                                                      Plains Energy’s and consolidated KCP&L’s ARO increased $32.2 million
                                                      primarily due to $11.3 million
                                                      related to revised decommissioning
                                                      cost
                                                      estimates for Wolf Creek, $7.5 million of accretion and a
                                                      $15.4
                                                      million addition due to adopting
                                                      FIN No. 47 during
                                                      2005.  ·
                                                  Great
                                                      Plains Energy’s and consolidated KCP&L’s regulatory liabilities
                                                      increased $65.5 million primarily due to KCP&L’s regulatory
                                                      treatment of SO2
                                                      emission allowance sales totaling$61.0 million
                                                      and $4.3 million of additional
                                                      Wolf Creek amortization for
                                                      Missouri
                                                      regulatory purposes. See Note
                                                      5 to the consolidated financial
                                                      statements.  ·
                                                  Great
                                                      Plains Energy’s derivative instruments -
                                                      deferred credits and other
                                                      liabilities increased $7.6
                                                      million primarily due to Strategic
                                                      Energy’s
                                                      derivative instruments increasing
                                                      $5.0 million related to an
                                                      increase in
                                                      fair value as a result of changes
                                                      in forward market prices for
                                                      power.
                                                      Consolidated KCP&L’s derivative instruments -
                                                      deferred credits and
                                                      other liabilities increased 43
 $2.6
                                                    million due to a change in the
                                                    fair value of KCP&L’s interest rate
                                                    swaps on its 1998 Series A, B
                                                    and D EIRR bonds.  ·
                                                  Great
                                                      Plains Energy’s other - deferred credits
                                                      and other liabilities decreased
                                                      $18.5 million primarily due
                                                      to IEC’s $11.6 million amortization of
                                                      the liability for the fair
                                                      value of acquired retail contracts
                                                      related to
                                                      the 2004 purchase of an additional
                                                      indirect interest in Strategic
                                                      Energy.
                                                      Consolidated KCP&L’s other - deferred credits
                                                      and other liabilities
                                                      decreased $4.4 million primarily
                                                      due to KCP&L receiving a return of
                                                      its net investment from the
                                                      Central Interstate Low Level
                                                      Radioactive Waste
                                                      Compact Commission.  **·**
                                                  Great
                                                      Plains Energy’s accumulated other comprehensive
                                                      loss decreased
                                                      $33.3 million primarily due to the
                                                      increase in fair value as a
                                                      result
                                                      of changes in forward market
                                                      prices for power of Strategic
                                                      Energy’s
                                                      energy-related cash flow hedges.
                                                      Consolidated KCP&L’s accumulated
                                                      other comprehensive loss decreased
                                                      $10.4 million primarily due to the
                                                      fair values of the Treasury
                                                      Locks (T-Locks), which were
                                                      entered into and
                                                      settled during 2005. See Note
                                                      21 to the consolidated financial
                                                      statements.  ·
                                                  Great
                                                      Plains Energy’s long-term debt increased
                                                      $184.4 million. Consolidated
                                                      KCP&L’s long-term debt increased
                                                      $186.1 million primarily due to
                                                      a $250.0 million issuance of
                                                      senior notes and an $85.9 million
                                                      issuance of Series 2005 EIRR
                                                      bonds partially offset by the
                                                      $145.3 million redemption of debt
                                                      related to the buyout of the
                                                      Combustion Turbine Synthetic
                                                      Lease. EIRR bonds classified
                                                      as current and
                                                      current maturities decreased
                                                      as a result of the repayment
                                                      and remarketing
                                                      of the respective bonds.  **CAPITAL
                                              REQUIREMENTS AND LIQUIDITY**
  Great
                                              Plains Energy operates through its
                                              subsidiaries and has no material assets
                                              other
                                              than the stock of its subsidiaries.
                                              Great Plains Energy’s ability to make
                                              payments on its debt securities and
                                              its ability to pay dividends is dependent
                                              on
                                              its receipt of dividends or other distributions
                                              from its subsidiaries and
                                              proceeds from the issuance of its securities.
  Great
                                              Plains Energy’s capital requirements are principally
                                              comprised of KCP&L’s
                                              utility construction and other capital
                                              expenditures, debt maturities and credit
                                              support provided to Strategic Energy.
                                              These items as well as additional cash
                                              and
                                              capital requirements for the companies
                                              are discussed below.
  Great
                                              Plains Energy's liquid resources at
                                              December 31, 2005, consisted of $103.1
                                              million of
                                              cash
                                              and cash equivalents on hand, including
                                              $3.0 million at
                                              consolidated KCP&L, and $739.7 million of
                                              unused
                                              bank lines of credit. The unused lines
                                              consisted of $218.1 million from
                                              KCP&L's revolving credit facility, $59.8
                                              million from
                                              Strategic Energy’s revolving credit facility and $461.8  million from
                                              Great Plains Energy's revolving credit
                                              facility. See the Debt Agreements section
                                              below for more information on these
                                              agreements. At February 28, 2006, Great
                                              Plains Energy’s and consolidated KCP&L’s unused bank lines of credit had
                                              increased $16.3 million and $9.3 million,
                                              respectively, from the amounts at
                                              December 31, 2005.
  KCP&L
                                              expects to meet day-to-day cash flow
                                              requirements including interest payments,
                                              construction requirements (excluding
                                              its comprehensive energy plan), dividends
                                              to Great Plains Energy and pension
                                              benefit plan funding requirements,
                                              discussed
                                              below, with internally generated funds.
                                              KCP&L might not be
                                              able
                                              to meet these requirements with internally
                                              generated funds because of the effect
                                              of inflation on operating expenses,
                                              the level of MWh sales, regulatory
                                              actions,
                                              compliance with future environmental
                                              regulations and the availability of
                                              generating units. The funds Great Plains
                                              Energy and consolidated KCP&L need
                                              to retire maturing debt will be provided
                                              from operations, the issuance of long
                                              and short-term debt and/or the issuance
                                              of equity or equity-linked instruments.
                                              In addition, the Company may issue
                                              debt, equity and/or equity-linked instruments
                                              to finance growth or take advantage
                                              of new opportunities.
 44
 KCP&L
                                              currently expects to fund its comprehensive
                                              energy plan from a combination of
                                              internal and external sources including,
                                              but not limited to, contributions from
                                              rate increases, capital contributions
                                              to KCP&L from Great Plains Energy's
                                              proceeds of new equity financing and
                                              2004 FELINE PRIDES SM equity
                                              in 2007, new debt financing, and internally
                                              generated funds.
  Strategic
                                              Energy expects to meet day-to-day cash
                                              flow requirements including interest
                                              payments, credit support fees, capital
                                              expenditures and dividends to its
                                              indirect interest holders with internally
                                              generated funds. Strategic Energy
                                              might not be able to meet these requirements
                                              with internally generated funds
                                              because of the effect of inflation
                                              on operating expenses, the level of
                                              MWh
                                              sales, seasonal working capital requirements,
                                              commodity-price volatility and the
                                              effects of counterparty non-performance.
  **Cash
                                              Flows from Operating Activities**
 Great
                                              Plains Energy and consolidated KCP&L generated positive cash flows from
                                              operating activities for the periods
                                              presented. Cash flows from operating
                                              activities for Great Plains Energy
                                              and consolidated KCP&L increased during
                                              2005 compared to 2004 primarily due
                                              to KCP&L’s sales of SO 2 emission
                                              allowances totaling $61.0 million and
                                              KCP&L’s $12.0 million cash settlement
                                              on the T-Locks, discussed in significant
                                              financing activities. KCP&L’s net
                                              income after consideration of non-cash
                                              items decreased primarily due to the
                                              decrease in operating income discussed
                                              in consolidated KCP&L’s results of
                                              operations section. The timing of the
                                              Wolf Creek outage affects the refueling
                                              outage accrual, deferred income taxes
                                              and amortization of nuclear fuel.
                                              Additionally, Great Plains Energy’s cash flows from operating activities
                                              reflects a decrease in Strategic Energy’s net income due to fewer MWhs delivered
                                              and a decline in average retail gross
                                              margin per MWh.
  The
                                              decrease in cash
                                              flows from operating activities for
                                              Great Plains Energy in 2004 compared
                                              to 2003
                                              was primarily due to the changes in
                                              working capital detailed in Note 2
                                              to the
                                              consolidated financial statements.
                                              The individual components of working
                                              capital
                                              vary with normal business cycles and
                                              operations. In addition, the timing
                                              of the
                                              Wolf Creek outage affects the refueling
                                              outage accrual, deferred income taxes
                                              and amortization of nuclear fuel. Consolidated
                                              KCP&L’s cash flow from
                                              operating activities increased in 2004
                                              compared to 2003 partially due to a
                                              $26.1
                                              million increase in net income and
                                              the changes in working capital detailed
                                              in
                                              Note 2 to the consolidated financial
                                              statements.
  **Cash
                                              Flows from Investing Activities**
 Great
                                              Plains Energy’s and consolidated KCP&L’s cash used for investing activities
                                              varies with the timing of utility capital
                                              expenditures and purchases of
                                              investments and nonutility property.
                                              Investing activities are offset by
                                              the
                                              proceeds from the sale of properties
                                              and insurance recoveries.
  Great
                                              Plains Energy’s and consolidated KCP&L’s utility capital expenditures
                                              increased $136.7 million and $141.6 million ,
                                              respectively, during 2005 compared
                                              to 2004. KCP&L exercised its early
                                              termination option in the Combustion
                                              Turbine Synthetic Lease and subsequently
                                              paid $154.0 million to
                                              purchase the leased property and made
                                              contract payments totaling $25.3 million
                                              related to wind generation and environmental
                                              equipment upgrades. These payments
                                              were partially offset by the $28.5 million buyout
                                              of
                                              KCP&L’s operating lease for vehicles and
                                              heavy equipment in 2004. The
                                              increases in capital expenditures were
                                              partially offset by KCP&L’s
                                              receipt of $10.0 million for
                                              insurance recoveries related to Hawthorn
                                              No. 5 during 2005.
  Great Plains
                                                Energy’s and consolidated KCP&L’s utility capital expenditures increased
                                                $41.9 million in 2004 compared to
                                                2003 primarily due to the $28.5 million
                                                buyout
                                                of KCP&L’s operating lease for vehicles and
                                                heavy equipment in 2004.
                                                Insurance recoveries and litigation
                                                settlements related to Hawthorn No.
                                                5 in
                                                2004 of $31.9 million, a $10.7 million
                                                increase over 2003 recoveries, offset
                                                cash used in investing activities.
                                                Additionally, Great Plains Energy
                                                paid $90.0
                                                million to acquire an additional
                                                indirect interest in Strategic Energy
                                                during
                                                2004.
 45
 **Cash
                                              Flows from Financing Activities**
 The changes
                                              in Great Plains Energy’s and consolidated KCP&L’s cash flows from financing
                                              activities in 2005 compared to 2004
                                              and in 2004 compared to 2003 reflect
                                              KCP&L’s retirement of $54.5 million of its
                                              medium-term notes and its
                                              redemption of $154.6 million of 8.3%
                                              Junior Subordinated Deferred Interest
                                              Bonds
                                              from KCPL Financing I during 2004.
                                              KCPL Financing I used those proceeds
                                              to
                                              redeem the $4.6 million common securities
                                              held by KCP&L and the
                                              $150.0 million of 8.3% Trust Preferred Securities.
                                              These 2004 financing
                                              activities at consolidated KCP&L were offset by $225.0 million in
                                              equity contributions from Great Plains
                                              Energy. Great Plains Energy’s 2004
                                              financing activities reflect proceeds
                                              of $150.0 million from the June 2004
                                              issuance of 5.0 million shares of common
                                              stock at $30 per share and proceeds
                                              of
                                              $163.6 million from the issuance of
                                              6.5 million FELINE PRIDES. Great Plains
                                              Energy used the proceeds to repay short-term
                                              borrowings and to fund the equity
                                              contributions to KCP&L. Fees related to these issuances
                                              were $10.2 million.
                                              See Note 19 to the consolidated financial
                                              statements for additional information.
  During
                                              2005, KCP&L redeemed its secured 1994 series
                                              EIRR bonds totaling
                                              $35.9 million by issuing secured EIRR Bonds
                                              Series 2005 also
                                              totaling $35.9 million: $14.0 million at a fixed rate of 4.05% until
                                              maturity at March 1, 2015, and $21.9
                                              million at a fixed rate of 4.65% until
                                              maturity at September 1, 2035. KCP&L also redeemed its unsecured Series
                                              C EIRR bonds totaling $50.0 million
                                              by issuing unsecured EIRR Bonds Series
                                              2005
                                              also totaling $50.0 million at a fixed
                                              rate of 4.65% until maturity at
                                              September 1, 2035. The previous interest rate
                                              periods on these two series,
                                              with interest rates of 2.25% and 2.38%,
                                              respectively, expired on August 31,
                                              2005. Both of the redeemed series were
                                              classified as current liabilities at
                                              December 31, 2004. Both of the new
                                              EIRR Bonds Series 2005 are covered
                                              by
                                              municipal bond insurance policies issued
                                              by XL Capital Assurance Inc. (XLCA).
                                              The insurance agreements between KCP&L and XLCA provide for reimbursement
                                              by
                                              KCP&L for any amounts that XLCA pays under
                                              the municipal bond insurance
                                              policies. The insurance policies are
                                              in effect for the term of the bonds.
                                              The
                                              insurance agreements contain a covenant
                                              that the indebtedness to total
                                              capitalization ratio of KCP&L and its consolidated subsidiaries
                                              will not be
                                              greater than 0.68 to 1.00. At December
                                              31, 2005, KCP&L was in compliance
                                              with this covenant. KCP&L is also restricted from issuing additional
                                              bonds
                                              under its General Mortgage Indenture
                                              if, after giving effect to such additional
                                              bonds, the proportion of secured debt
                                              to total indebtedness would be more
                                              than
                                              75%, or more than 50% if the long term
                                              rating for such bonds by Standard &
Poor’s or Moody’s Investors Service would be at or
                                              below A- or A3, respectively.
                                              The insurance agreement covering the
                                              unsecured EIRR Bond Series 2005 also
                                              requires KCP&L to provide XLCA with $50 million
                                              of general mortgage bonds as
                                              collateral for KCP&L’s obligations under the insurance agreement
                                              in the
                                              event KCP&L issues general mortgage bonds (other
                                              than refundings of
                                              outstanding general mortgage bonds)
                                              resulting in the aggregate amount of
                                              outstanding general mortgage bonds
                                              exceeding 10% of total capitalization.
                                              In the
                                              event of a default under the insurance
                                              agreements, XLCA may take any available
                                              legal or equitable action against KCP&L, including seeking specific
                                              performance of the covenants.
  KCP&L
                                              had $625.0 million of
                                              outstanding unsecured senior notes
                                              at December 31, 2005 and 2004. During
                                              2005,
                                              KCP&L completed a private placement of
                                              $250.0 million of 6.05% unsecured
                                              senior notes, maturing in 2035. The
                                              proceeds from the issuance were used
                                              to
                                              repay the 7.125% unsecured senior notes
                                              that matured in 2005. Pursuant to its
                                              obligations under a registration rights
                                              agreement entered into in connection
                                              with the private placement, KCP&L plans to file in 2006 an S-4 registration
                                              statement for the exchange of registered
                                              6.05% unsecured senior notes for the
                                              $250.0 million privately placed
                                              notes. The registered notes will carry
                                              the same terms and conditions as the
                                              privately placed issue without, except
                                              in limited circumstances, transfer
                                              restrictions and payment of additional
                                              interest provisions.
  **Significant
                                              Financing Activities**
 KCP&L’s
                                              long-term financing activities are
                                              subject to the authorization of the
                                              MPSC. In
                                              November 2005, the MPSC authorized
                                              KCP&L to issue up to $635 million of
                                              long-term debt and to enter into  46
 interest
                                              rate hedging instruments in connection
                                              with such debt through December 31,
                                              2009.
                                              Under stipulations with the MPSC and
                                              the KCC, Great Plains Energy and KCP&L
                                              maintain common equity at not less
                                              than 30% and 35%, respectively, of
                                              total
                                              capitalization.
  In
                                              February 2006, FERC authorized KCP&L to issue up to $300.0 million in
                                              outstanding short-term debt instruments
                                              through February 2008. The authorization
                                              is subject to four restrictions: (i)
                                              proceeds of debt backed by utility
                                              assets
                                              must be used for utility purposes;
                                              (ii) if any utility assets that secure
                                              authorized debt are divested or spun
                                              off, the debt must follow the assets
                                              and
                                              also be divested or spun off; (iii)
                                              if any proceeds of the authorized debt
                                              are
                                              used for non-utility purposes, the
                                              debt must follow the non-utility assets
                                              (specifically, if the non-utility assets
                                              are divested or spun off, then a
                                              proportionate share of the debt must
                                              follow the divested or spun off non-utility
                                              assets); and (iv) if utility assets
                                              financed by the authorized short-term
                                              debt
                                              are divested or spun off to another
                                              entity, a proportionate share of the
                                              debt
                                              must also be divested or spun off.
  During the
                                              first
                                              quarter of 2006, KCP&L entered into a Forward Starting Swap
                                              with a notional
                                              principal amount of $110 million to
                                              hedge interest rate volatility on the
                                              first
                                              $110 million of the anticipated refinancing
                                              of KCP&L’s $225 million senior
                                              notes that mature in March 2007.
  During
                                              2005, KCP&L entered into two T-Locks to hedge
                                              against interest rate
                                              fluctuations on the U.S. Treasury rate
                                              component of the $250.0 million 30-year
                                              long-term debt that KCP&L issued in 2005. The T-Locks settled
                                              simultaneously
                                              with the issuance of the long-term
                                              fixed rate debt and KCP&L received $12.0
                                              million in cash for the settlement.
                                              See Note 21 to the consolidated financial
                                              statements.
  During
                                              2005, KCP&L entered into a revolving agreement
                                              to sell all of its retail
                                              electric accounts receivable to Receivables
                                              Company, which sold an undivided
                                              percentage ownership interest in the
                                              accounts receivable to an outside investor.
                                              Receivables Company received $70 million in
                                              cash
                                              from the outside investor, which was
                                              forwarded to KCP&L as consideration for
                                              its sale. KCP&L’s accounts receivable agreement is
                                              an additional source of
                                              liquidity with an all-in borrowing
                                              cost generally equal to or lower than
                                              KCP&L’s other sources of short-term borrowings
                                              including the revolving
                                              credit facility and commercial paper.
                                              See Note 3 to the consolidated financial
                                              statements for additional information.
  **Debt
                                              Agreements**
 Great
                                              Plains Energy has a $550 million revolving
                                              credit facility with a group of banks
                                              that expires in December 2009. The
                                              facility contains a Material Adverse
                                              Change
                                              (MAC) clause that requires Great Plains
                                              Energy to represent, prior to receiving
                                              funding, that no MAC has occurred.
                                              The clause does, however, permit the
                                              Company
                                              to access the facility even in the
                                              event of a MAC in order to repay maturing
                                              commercial paper. Available liquidity
                                              under this facility is not impacted
                                              by a
                                              decline in credit ratings unless the
                                              downgrade results in a MAC or occurs
                                              in the
                                              context of a merger, consolidation
                                              or sale. A default by Great Plains
                                              Energy or
                                              any of its significant subsidiaries
                                              of other indebtedness totaling more
                                              than
                                              $25.0 million is a default under the
                                              current facility. Under the terms of
                                              this
                                              agreement, Great Plains Energy is required
                                              to maintain a consolidated
                                              indebtedness to consolidated capitalization
                                              ratio, as defined in the agreement,
                                              not greater than 0.65 to 1.00 at all
                                              times. At December 31, 2005, the
                                              Company was in compliance with this
                                              covenant. At December 31, 2005, Great
                                              Plains Energy had $6.0 million of
                                              outstanding borrowings with an interest
                                              rate of 4.98% and
                                              had issued
                                              letters of credit totaling $38.5 million under
                                              the
                                              credit facility as credit support for
                                              Strategic Energy.
  KCP&L
                                              has a $250 million revolving credit
                                              facility with a group of banks that
                                              expires
                                              in December 2009 to provide support
                                              for its issuance of commercial paper
                                              and
                                              other general purposes. The facility
                                              contains a MAC clause that requires
                                              KCP&L to represent, prior to receiving
                                              funding, that no MAC has occurred.
                                              The clause does, however, permit KCP&L to access the facility even in the
                                              event of a MAC in order to repay maturing
                                              commercial paper. Available liquidity
                                              under this facility is not impacted
                                              by a  47
 decline
                                              in credit ratings unless the downgrade
                                              results in a MAC or occurs in the context
                                              of a merger, consolidation or sale.
                                              A default by KCP&L on other indebtedness
                                              totaling more than $25.0 million is
                                              a default under the current facility.
                                              Under
                                              the terms of the agreement, KCP&L is required to maintain a consolidated
                                              indebtedness to consolidated capitalization
                                              ratio, as defined in the agreement,
                                              not greater than 0.65 to 1.00 at all
                                              times. At December 31, 2005, KCP&L was
                                              in compliance with this covenant. At
                                              December 31, 2005, KCP&L had $31.9
                                              million of commercial paper outstanding
                                              and no cash borrowings under the
                                              facility. The weighted-average interest
                                              rate of the commercial paper was
                                              4.35%.
  During
                                              2005, Strategic Energy entered into
                                              an amendment to
                                              its
                                              $125 million revolving credit facility
                                              with a group of banks. The amendment
                                              extends the expiration of the facility
                                              from June 2007 to June 2009 and increases
                                              the aggregate revolving loan commitment
                                              from $125 million to $135 million.
                                              So
                                              long as there is no default or unmatured
                                              default, Strategic Energy may increase
                                              this amount by up to $15 million by
                                              increasing the commitment of one or
                                              more
                                              lenders that have agreed to such increase,
                                              or by adding one or more lenders with
                                              the consent of the administrative agent.
                                              Great Plains Energy has currently
                                              guaranteed $25.0 million of this facility.
                                              The facility contains a MAC clause
                                              that requires Strategic Energy to represent,
                                              prior to receiving funding, that no
                                              MAC has occurred. A default by Strategic
                                              Energy of other indebtedness, as
                                              defined in the facility, totaling more
                                              than $7.5 million is a default under
                                              the
                                              facility. Under the terms of this amended
                                              agreement, Strategic Energy is
                                              required to maintain a minimum net
                                              worth of $75.0 million, a minimum fixed
                                              charge coverage ratio of at least 1.05
                                              to 1.00 and a minimum debt service
                                              coverage ratio of at least 4.00 to
                                              1.00, as those terms are defined in
                                              the
                                              agreement. In addition, under the terms
                                              of this amended agreement, Strategic
                                              Energy is required to maintain a maximum
                                              funded indebtedness to EBITDA ratio,
                                              as
                                              defined in the agreement, of 3.00 to
                                              1.00, on a quarterly basis through
                                              June 30,
                                              2007, and 2.75 to 1.00 thereafter.
                                              In the event of a breach of one or
                                              more of
                                              these four covenants, so long as no
                                              other default has occurred, Great Plains
                                              Energy may cure the breach through
                                              a cash infusion, a guarantee increase
                                              or a
                                              combination of the two. At December
                                              31, 2005, Strategic Energy was in compliance
                                              with these covenants. At December 31,
                                              2005, $75.2 million in
                                              letters of credit had been issued and
                                              there were no cash borrowings under
                                              the
                                              agreement, leaving $59.8 million of
                                              capacity available for loans and additional
                                              letters of credit.
  Great
                                              Plains Energy has agreements with KLT
                                              Investments associated with notes KLT
                                              Investments issued to acquire its affordable
                                              housing investments. Great Plains
                                              Energy has agreed not to take certain
                                              actions including, but not limited
                                              to,
                                              merging, dissolving or causing the
                                              dissolution of KLT Investments, or
                                              withdrawing amounts from KLT Investments
                                              if the withdrawals would result in
                                              KLT
                                              Investments not being in compliance
                                              with minimum net worth and cash balance
                                              requirements. The agreements also give
                                              KLT Investments’ lenders the right to
                                              have KLT Investments repurchase the
                                              notes if Great Plains Energy’s senior debt
                                              rating falls below investment grade
                                              or if Great Plains Energy ceases to
                                              own at
                                              least 80% of KCP&L’s stock. At December 31, 2005, KLT
                                              Investments had
                                              $2.6 million in
                                              outstanding notes, including current
                                              maturities.
 48
 **KCP&L
                                              Projected Utility Capital Expenditures**
 KCP&L’s
                                              utility capital expenditures, excluding
                                              allowance for funds used to finance
                                              construction, were $332.1 million,
                                              $190.5 million and $148.7 million in
                                              2005,
                                              2004 and 2003, respectively. Utility
                                              capital expenditures projected for
                                              the next
                                              three years, excluding allowance for
                                              funds used during construction, are
                                              detailed in the following table .
  **2006**
                                                
                                                **2007**
                                                
                                                **2008**(millions)Generating
                                                    facilitiesIatan
                                                    No. 2(a)
                                                $
                                                30.7
                                                
                                                $
                                                120.4
                                                
                                                $
                                                274.5Wind
                                                    generation(a)
                                                
                                                143.0
                                                
                                                
                                                -
                                                
                                                
                                                -Environmental(a)
                                                
                                                43.3
                                                
                                                
                                                124.8
                                                
                                                
                                                101.3Other
                                                
                                                49.3
                                                
                                                
                                                53.1
                                                
                                                
                                                53.9Total generating facilities
                                                
                                                266.3
                                                
                                                
                                                298.3
                                                
                                                
                                                429.7Distribution
                                                    and transmission facilitiesCustomer
                                                    programs & asset management(a)
                                                
                                                5.6
                                                
                                                
                                                9.1
                                                
                                                
                                                14.9Other
                                                
                                                93.4
                                                
                                                
                                                83.9
                                                
                                                
                                                84.4Total distribution and transmission
                                                    facilities
                                                
                                                99.0
                                                
                                                
                                                93.0
                                                
                                                
                                                99.3Nuclear
                                                    fuel
                                                
                                                20.9
                                                
                                                
                                                25.2
                                                
                                                
                                                1.1General
                                                    facilities
                                                
                                                30.6
                                                
                                                
                                                20.5
                                                
                                                
                                                11.8Total
                                                $
                                                416.8
                                                
                                                $
                                                437.0
                                                
                                                $
                                                541.9(a) Comprehensive
                                                    energy plan
 This
                                          utility capital expenditure plan is subject
                                          to continual review and change and
                                          includes utility capital expenditures related
                                          to KCP&L’s comprehensive
                                          energy plan for environmental investments
                                          and new capacity. See Note 5 to the
                                          consolidated financial statements.
  **Pensions**
 The
                                          Company maintains defined benefit plans
                                          for substantially all employees of
                                          KCP&L, Services and WCNOC and incurs significant
                                          costs in providing the
                                          plans, with the majority incurred by KCP&L. At a minimum, plans are funded
                                          on an actuarial basis to provide assets
                                          sufficient to meet benefits to be paid
                                          to plan participants consistent with the
                                          funding requirements of the Employee
                                          Retirement Income Security Act of 1974
                                          (ERISA) and further contributions may be
                                          made when deemed financially advantageous.
  The
                                          Company contributed $14.5 million to the
                                          plans in 2005, which included $10.0
                                          million of funding above the minimum ERISA
                                          funding requirements. In 2004, the
                                          Company contributed $39.1 million to the
                                          plans, which included $4.1 million for
                                          minimum ERISA funding requirements and
                                          $35.0 million of additional funding.
                                          KCP&L contributed $13.8 million and $32.7 million
                                          of the contributions in
                                          2005 and 2004, respectively.
  The
                                          Company expects to contribute $20.0 million
                                          to the plans in 2006, which includes
                                          $6.0 million to meet ERISA funding requirements,
                                          all of which will be paid by
                                          KCP&L. Management believes the Company has
                                          adequate access to capital
                                          resources through cash flows from operations
                                          or through existing lines of credit
                                          to support the funding requirements. Participants
                                          in the plans may request a
                                          lump-sum cash payment upon termination
                                          of their employment. A change in payment
                                          assumptions could result in increased cash
                                          requirements from pension plan assets
                                          with the Company being required to accelerate
                                          future funding.
  Legislative
                                          changes have been proposed that would alter
                                          the manner in which pension plan
                                          assets and liabilities are valued for purposes
                                          of calculating required pension
                                          contributions and change the timing  49
 and
                                            manner in which required contributions
                                            to underfunded plans are made. If these
                                            proposals are adopted, the funding requirements
                                            could be significantly
                                            affected.
  Under
                                          the
                                          terms of the pension plans, the Company
                                          reserves the right to amend or terminate
                                          the plans, and from time to time benefits
                                          have changed. See Note 9 to the
                                          consolidated financial statements for additional
                                          information.
  **Credit
                                          Ratings**
 At
                                          December 31, 2005, the major credit rating
                                          agencies rated the companies’
securities as detailed in the following
                                          table .
 **Moody's**
                                                
                                                **Standard****Investors
                                                    Service**
                                                
                                                **and
                                                    Poor's****Great
                                                    Plains Energy**Outlook
                                                Negative
                                                
                                                StableCorporate Credit Rating
                                                -
                                                
                                                BBBPreferred Stock
                                                Ba1
                                                
                                                BB+Senior Unsecured Debt
                                                Baa2
                                                
                                                BBB-**KCP&L**Outlook
                                                Stable
                                                
                                                StableSenior Secured Debt
                                                A2
                                                
                                                BBBSenior Unsecured Debt
                                                A3
                                                
                                                BBBCommercial Paper
                                                P-2
                                                
                                                A-2
 The
                                          ratings presented reflect the current views
                                          of these rating agencies and are
                                          subject to change. The companies view maintenance
                                          of strong credit ratings as
                                          being extremely important and to that end
                                          an active and ongoing dialogue is
                                          maintained with the agencies with respect
                                          to the companies’ results of
                                          operations, financial position, and future
                                          prospects.
  None
                                          of
                                          the companies’ outstanding debt, except for the notes
                                          associated with affordable
                                          housing investments, requires the acceleration
                                          of interest and/or principal
                                          payments in the event of a ratings downgrade,
                                          unless the downgrade occurs in the
                                          context of a merger, consolidation or sale.
                                          In the event of a downgrade, the
                                          companies and/or their subsidiaries may
                                          be subject to increased interest costs
                                          on their credit facilities. Additionally,
                                          in KCP&L’s bond insurance policies
                                          on its secured 1992 series EIRR bonds totaling
                                          $31.0 million, its Series 1993A
                                          and 1993B EIRR bonds totaling $79.5 million
                                          and its secured and unsecured EIRR
                                          Bonds Series 2005 totaling $35.9 million
                                          and $50.0 million, respectively,
                                          KCP&L has agreed to limits on its ability to
                                          issue additional mortgage bonds
                                          based on the mortgage bond’s credit ratings. See Note 19 to the consolidated
                                          financial statements.
  **Strategic
                                          Energy Supplier Concentration and Credit**
 Strategic
                                          Energy enters into forward physical contracts
                                          with multiple suppliers. At
                                          December 31, 2005, Strategic
                                          Energy’s five largest suppliers under forward
                                          supply contracts represented
                                          76 %
                                          of the
                                          total future dollar committed purchases. Four of
                                          Strategic Energy’s five largest suppliers, or their guarantors,
                                          are rated
                                          investment grade; and the non-investment
                                          grade rated supplier collateralizes its
                                          position with Strategic Energy. In the
                                          event of supplier non-delivery or
                                          default, Strategic Energy’s results of operations could be affected
                                          to the
                                          extent the cost of replacement power exceeded
                                          the combination of the contracted
                                          price with the supplier and the amount
                                          of collateral held by Strategic Energy
                                          to
                                          mitigate its credit risk with the supplier.
                                          In addition to the collateral, if
                                          any, that the supplier provides, Strategic
                                          Energy’s risk may be further
                                          mitigated by the obligation of the supplier
                                          to make a default payment equal to
                                          the shortfall and to pay liquidated damages
                                          in the event of a failure to deliver
                                          power. There is no assurance that the supplier
                                          in such an instance would make
                                          the default payment  50
 and/or
                                            pay liquidated damages. Strategic Energy’s results of operations could also be
                                            affected, in a given period, if it were
                                            required to make a payment upon
                                            termination of a supplier contract to
                                            the extent the contracted price with
                                            the
                                            supplier exceeded the market value of
                                            the contract at the time of
                                            termination.
  The
                                          following tables provide
                                          information on Strategic Energy’s credit exposure to suppliers, net of
                                          collateral, as of December 31, 2005.
 **Number
                                                    Of**
                                                **Net
                                                    Exposure Of****Counterparties**
                                                **Counterparties****Exposure**
                                                
                                                
                                                
                                                
                                                **Greater
                                                    Than**
                                                **Greater
                                                    Than****Before
                                                    Credit**
                                                **Credit**
                                                **Net**
                                                **10%
                                                    Of Net**
                                                **10%
                                                    of Net****Rating**
                                                **Collateral**
                                                **Collateral**
                                                **Exposure**
                                                **Exposure**
                                                **Exposure***External
                                                    rating*
                                                (millions)
                                                
                                                
                                                
                                                (millions)Investment Grade
                                                $
                                                205.3
                                                
                                                $
                                                88.5
                                                
                                                $
                                                116.8
                                                
                                                
                                                3
                                                
                                                $
                                                84.5Non-Investment Grade
                                                
                                                37.3
                                                
                                                
                                                31.2
                                                
                                                
                                                6.1
                                                
                                                
                                                -
                                                
                                                
                                                -*Internal
                                                    rating*Investment Grade
                                                
                                                3.0
                                                
                                                
                                                -
                                                
                                                
                                                3.0
                                                
                                                
                                                -
                                                
                                                
                                                -Non-Investment Grade
                                                
                                                9.7
                                                
                                                
                                                5.7
                                                
                                                
                                                4.0
                                                
                                                
                                                -
                                                
                                                
                                                -Total
                                                $
                                                255.3
                                                
                                                $
                                                125.4
                                                
                                                $
                                                129.9
                                                
                                                
                                                3
                                                
                                                $
                                                84.5
 **Maturity
                                                    Of Credit Risk Exposure Before
                                                    Credit Collateral****Less
                                                    Than**
                                                
                                                
                                                **Total****Rating**
                                                
                                                **2
                                                    Years**
                                                **2
                                                    - 5 Years**
                                                **Exposure***External
                                                    rating*
                                                
                                                (millions)Investment Grade
                                                
                                                $
                                                205.9
                                                
                                                $
                                                (0.6
                                                )
                                                $
                                                205.3Non-Investment Grade
                                                
                                                
                                                30.9
                                                
                                                
                                                6.4
                                                
                                                
                                                37.3*Internal
                                                    rating*Investment Grade
                                                
                                                
                                                2.9
                                                
                                                
                                                0.1
                                                
                                                
                                                3.0Non-Investment Grade
                                                
                                                
                                                7.8
                                                
                                                
                                                1.9
                                                
                                                
                                                9.7Total
                                                
                                                $
                                                247.5
                                                
                                                $
                                                7.8
                                                
                                                $
                                                255.3
 External
                                          ratings are determined by using publicly
                                          available credit ratings of the
                                          counterparty. If a counterparty has provided
                                          a guarantee by a higher rated
                                          entity, the determination has been based
                                          on the rating of its guarantor.
                                          Internal ratings are determined by, among
                                          other things, an analysis of the
                                          counterparty’s financial statements and consideration
                                          of publicly available
                                          credit ratings of the counterparty’s parent. Investment grade counterparties
                                          are
                                          those with a minimum senior unsecured debt
                                          rating of BBB- from Standard &
Poor’s or Baa3 from Moody’s Investors Service. Exposure before credit
                                          collateral
                                          has been calculated considering all netting
                                          agreements in place, netting
                                          accounts payable and receivable exposure
                                          with net mark-to-market exposure.
                                          Exposure before credit collateral, after
                                          consideration of all netting
                                          agreements, is impacted significantly by
                                          the power supply volume under contract
                                          with a given counterparty and the relationship
                                          between current market prices and
                                          contracted power supply prices. Credit
                                          collateral includes the amount of cash
                                          deposits and letters of credit received
                                          from counterparties. Net exposure has
                                          only been calculated for those counterparties
                                          to which Strategic Energy is
                                          exposed and excludes counterparties exposed
                                          to Strategic Energy.
  In
                                          December 2005, Calpine Energy Services
                                          filed a motion in bankruptcy court
                                          seeking to reject a power sales agreement
                                          with Strategic Energy. A district
                                          court held that FERC, not the court, had
                                          jurisdiction over the agreement. The
                                          matter is currently pending at FERC. Strategic
                                          Energy has adequate supply in its
                                          existing portfolio to cover its position
                                          in the event the agreement is rejected
                                          and any rejection is not expected to materially
                                          affect its results of
                                          operations.  51
 At
                                            December 31, 2005, Strategic Energy had
                                            exposure before collateral to
                                            non-investment grade counterparties totaling
                                            $47.0 million, of which
                                            82 %
                                            is
                                            scheduled to mature in less than two
                                            years. In addition, Strategic Energy
                                            held
                                            collateral totaling $36.9 million limiting
                                            its exposure to these non-investment
                                            grade counterparties to $10.1 million.
  Strategic
                                          Energy contracts with national and regional
                                          counterparties that have direct
                                          supplies and assets in the region of demand.
                                          Strategic Energy also manages its
                                          counterparty portfolio through disciplined
                                          margining, collateral requirements
                                          and contract-based netting of credit exposures
                                          against payable
                                          balances.
  **Supplemental
                                          Capital Requirements and Liquidity Information**
 The
                                          information in the following tables is
                                          provided to summarize cash obligations
                                          and commercial
                                          commitments.
  ***Great
                                                  Plains Energy Contractual Obligations*****Payment
                                                    due by period**
                                                
                                                **2006**
                                                **2007**
                                                **2008**
                                                **2009**
                                                **2010**
                                                **After
                                                    2010**
                                                **Total**Long-term
                                                    debt
                                                
                                                (millions)Principal
                                                
                                                $
                                                1.7
                                                
                                                $
                                                226.1
                                                
                                                $
                                                0.3
                                                
                                                $
                                                163.6
                                                
                                                $
                                                -
                                                
                                                $
                                                755.3
                                                
                                                $
                                                1,147.0Interest
                                                
                                                
                                                67.4
                                                
                                                
                                                51.2
                                                
                                                
                                                47.6
                                                
                                                
                                                47.6
                                                
                                                
                                                47.6
                                                
                                                
                                                541.1
                                                
                                                
                                                802.5Lease
                                                    obligations
                                                
                                                
                                                17.1
                                                
                                                
                                                15.4
                                                
                                                
                                                14.9
                                                
                                                
                                                10.7
                                                
                                                
                                                8.4
                                                
                                                
                                                91.0
                                                
                                                
                                                157.5Pension
                                                    plans
                                                
                                                
                                                20.0
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                20.0Purchase
                                                    obligationsFuel
                                                
                                                
                                                107.9
                                                
                                                
                                                99.9
                                                
                                                
                                                91.5
                                                
                                                
                                                46.0
                                                
                                                
                                                32.3
                                                
                                                
                                                37.7
                                                
                                                
                                                415.3Purchased
                                                    capacity
                                                
                                                
                                                5.4
                                                
                                                
                                                6.8
                                                
                                                
                                                7.8
                                                
                                                
                                                8.2
                                                
                                                
                                                5.4
                                                
                                                
                                                18.6
                                                
                                                
                                                52.2Purchased
                                                    power
                                                
                                                
                                                423.4
                                                
                                                
                                                135.6
                                                
                                                
                                                46.4
                                                
                                                
                                                21.8
                                                
                                                
                                                18.0
                                                
                                                
                                                -
                                                
                                                
                                                645.2Other
                                                
                                                
                                                33.6
                                                
                                                
                                                5.6
                                                
                                                
                                                2.9
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                42.1Total
                                                    contractual obligations
                                                
                                                $
                                                676.5
                                                
                                                $
                                                540.6
                                                
                                                $
                                                211.4
                                                
                                                $
                                                297.9
                                                
                                                $
                                                111.7
                                                
                                                $
                                                1,443.7
                                                
                                                $
                                                3,281.8
  ***Consolidated
                                                  KCP&L Contractual Obligations*****Payment
                                                    due by period**
                                                
                                                **2006**
                                                **2007**
                                                **2008**
                                                **2009**
                                                **2010**
                                                **After
                                                    2010**
                                                **Total**Long-term
                                                    debt
                                                
                                                (millions)Principal
                                                
                                                $
                                                -
                                                
                                                $
                                                225.5
                                                
                                                $
                                                -
                                                
                                                $
                                                -
                                                
                                                $
                                                -
                                                
                                                $
                                                755.3
                                                
                                                $
                                                980.8Interest
                                                
                                                
                                                54.2
                                                
                                                
                                                43.4
                                                
                                                
                                                40.6
                                                
                                                
                                                40.6
                                                
                                                
                                                40.6
                                                
                                                
                                                541.1
                                                
                                                
                                                760.5Lease
                                                    obligations
                                                
                                                
                                                15.9
                                                
                                                
                                                14.4
                                                
                                                
                                                14.0
                                                
                                                
                                                10.5
                                                
                                                
                                                8.4
                                                
                                                
                                                91.0
                                                
                                                
                                                154.2Pension
                                                    plans
                                                
                                                
                                                20.0
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                20.0Purchase
                                                    obligationsFuel
                                                
                                                
                                                107.9
                                                
                                                
                                                99.9
                                                
                                                
                                                91.5
                                                
                                                
                                                46.0
                                                
                                                
                                                32.3
                                                
                                                
                                                37.7
                                                
                                                
                                                415.3Purchased
                                                    capacity
                                                
                                                
                                                5.4
                                                
                                                
                                                6.8
                                                
                                                
                                                7.8
                                                
                                                
                                                8.2
                                                
                                                
                                                5.4
                                                
                                                
                                                18.6
                                                
                                                
                                                52.2Other
                                                
                                                
                                                33.6
                                                
                                                
                                                5.6
                                                
                                                
                                                2.9
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                42.1Total
                                                    contractual obligations
                                                
                                                $
                                                237.0
                                                
                                                $
                                                395.6
                                                
                                                $
                                                156.8
                                                
                                                $
                                                105.3
                                                
                                                $
                                                86.7
                                                
                                                $
                                                1,443.7
                                                
                                                $
                                                2,425.1
 Long-term
                                          debt includes current maturities. Long-term
                                          debt principal excludes
                                          $1.8 million
                                          discount on senior notes and the $2.6 million
                                          liability for the fair value adjustment
                                          to the EIRR bonds related to interest
                                          rate swaps. FELINE PRIDES senior notes
                                          totaling $163.6 million mature in 2009,
                                          but must be remarketed between August 16,
                                          2006 and February 16, 2007. Variable
                                          rate interest obligations are based on
                                          rates as of December 31, 2005. See Note
                                          19 to the consolidated financial statements
                                          for additional
                                          information.
  Lease
                                          obligations include capital and operating
                                          lease obligations; capital lease
                                          obligations are $0.2 million
                                          per year for the years 2006 through 2010
                                          and total $3.9 million
                                          after 2010. Lease obligations also include
                                          railcars to serve jointly-owned
                                          generating units where KCP&L is the managing partner.  52
 KCP&L
                                            will be reimbursed by the other owners
                                            for approximately $2.0 million
                                            per year ($22.7 million
                                            total) of the amounts included in the
                                            table above. See Note 13 to the
                                            consolidated financial statements for
                                            additional information regarding
                                            contractual commitments.
  The
                                          Company expects to contribute $20.0 million
                                          to the plans in 2006, which includes
                                          $6.0 million to meet ERISA funding requirements,
                                          all of which will be paid by
                                          KCP&L. Minimum ERISA funding requirements for
                                          future periods after 2006 are
                                          not yet known.
  Fuel
                                          represents KCP&L’s 47% share of Wolf Creek nuclear fuel
                                          commitments,
                                          KCP&L’s share of coal purchase commitments based
                                          on estimated prices to
                                          supply coal for generating plants and KCP&L’s share of rail transportation
                                          commitments for moving coal to KCP&L’s generating units.
  KCP&L
                                          purchases capacity from other utilities
                                          and nonutility suppliers. Purchasing
                                          capacity provides the option to purchase
                                          energy if needed or when market prices
                                          are favorable. KCP&L has capacity sales agreements not included
                                          above that
                                          total $11.4
                                          million for 2006, $11.2 million per year
                                          for 2007 through 2010 and $12.3 million
                                          after 2010.
  Purchased
                                          power represents Strategic Energy’s agreements to purchase electricity at
                                          various fixed prices to meet estimated
                                          supply requirements. Strategic Energy has
                                          firm energy sales contracts not included
                                          above for 2006 and 2007 totaling $41.1
                                          million and $4.2 million,
                                          respectively.
  Other
                                          purchase obligations represent individual
                                          commitments entered into in the
                                          ordinary course of business.
  Strategic
                                          Energy has entered into financial swaps
                                          in certain markets to limit the
                                          unfavorable effect that future price increases
                                          will have on future electricity
                                          purchases. These financial swaps settle
                                          during the same period as power flows to
                                          the retail customer and could result in
                                          a cash obligation or a cash receipt. Due
                                          to the uncertainty of the future cash flows,
                                          these financial swaps have been
                                          omitted from the table above.
  Great
                                          Plains Energy and consolidated KCP&L have long-term liabilities recorded on
                                          their consolidated balance sheets at December
                                          31, 2005, under GAAP that do not
                                          have a definitive cash payout date and
                                          are not included in the table
                                          above.
  **Off-Balance
                                          Sheet Arrangements**
 In
                                          the
                                          normal course of business, Great Plains
                                          Energy and certain of its subsidiaries
                                          enter into various agreements providing
                                          financial or performance assurance to
                                          third parties on behalf of certain subsidiaries.
                                          Such agreements include, for
                                          example, guarantees, stand-by letters of
                                          credit and surety bonds. These
                                          agreements are entered into primarily to
                                          support or enhance the creditworthiness
                                          otherwise attributed to a subsidiary on
                                          a stand-alone basis, thereby
                                          facilitating the extension of sufficient
                                          credit to accomplish the subsidiaries’
intended business purposes. The information
                                          in the following table is provided
                                          to summarize these agreements.
  ***Other
                                                    Commercial Commitments Outstanding*****Amount
                                                    of commitment expiration per
                                                    period****2006**
                                                **2007**
                                                **2008**
                                                **2009**
                                                **2010**
                                                **After
                                                    2010**
                                                **Total**(millions)Great
                                                    Plains Energy Guarantees
                                                
                                                $
                                                123.0
                                                
                                                $
                                                1.0
                                                
                                                $
                                                1.0
                                                
                                                $
                                                0.9
                                                
                                                $
                                                -
                                                
                                                $
                                                -
                                                
                                                $
                                                125.9Consolidated
                                                    KCP&L Guarantees
                                                
                                                
                                                1.0
                                                
                                                
                                                1.0
                                                
                                                
                                                1.0
                                                
                                                
                                                0.9
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                3.9
 53
 KCP&L
                                          is contingently liable for guaranteed energy
                                          savings under an agreement with a
                                          customer, guaranteeing an aggregate value
                                          of approximately $3.9 million
                                          over the next four years. A subcontractor
                                          would indemnify KCP&L for any
                                          payments made by KCP&L under this guarantee. Great Plains Energy
                                          has
                                          provided $122.0 million
                                          of guarantees to support certain Strategic
                                          Energy power purchases and regulatory
                                          requirements. At December 31, 2005, guarantees
                                          related to Strategic Energy are
                                          as follows:
  ·
                                              Great
                                                  Plains Energy direct guarantees
                                                  to counterparties totaling
                                                  $58.0million, which expire in 2006,  ·
                                              Great
                                                  Plains Energy provides indemnifications
                                                  to the issuers of surety bonds
                                                  totaling $0.5million, which expire in 2006,  ·
                                              Great
                                                  Plains Energy guarantees related
                                                  to letters of credit totaling $25.0
                                                  million, which expire in 2006 and  ·
                                              Great
                                                  Plains Energy letters of credit
                                                  totaling $38.5million.  The
                                          table
                                          above does not include guarantees related
                                          to bond insurance policies that
                                          KCP&L has as a credit enhancement to its secured
                                          1992 series EIRR bonds
                                          totaling $31.0 million, its Series 1993A
                                          and 1993B EIRR bonds totaling $79.5
                                          million and EIRR Bond Series 2005 totaling
                                          $85.9 million. The insurance
                                          agreement between KCP&L and the issuer of the bond insurance
                                          policies
                                          provides for reimbursement by KCP&L for any amounts the insurer pays under
                                          the bond insurance policies.
  **ITEM
                                          7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                          ABOUT MARKET
                                          RISK**
  In
                                          the
                                          normal course of business, Great Plains
                                          Energy and consolidated KCP&L face
                                          risks that are either non-financial or
                                          non-quantifiable. Such risks principally
                                          include business, legal, operations and
                                          credit risks and are not represented in
                                          the following analysis. See Item 1A. Risk
                                          Factors and Item. 7 MD&A for
                                          further discussion of the companies’ risk factors.
  Great
                                          Plains Energy and consolidated KCP&L are exposed to market risks associated
                                          with commodity price and supply, interest
                                          rates and equity prices. Management
                                          has established risk management policies
                                          and strategies to reduce the
                                          potentially adverse effects the volatility
                                          of the markets may have on its
                                          operating results. During the normal course
                                          of business, under the direction and
                                          control of internal risk management committees,
                                          the companies’ hedging
                                          strategies are reviewed to determine the
                                          hedging approach deemed appropriate
                                          based upon the circumstances of each situation.
                                          Though management believes its
                                          risk management practices to be effective,
                                          it is not possible to identify and
                                          eliminate all risk. The companies could
                                          experience losses, which could have a
                                          material adverse effect on its results
                                          of operations or financial position, due
                                          to many factors, including unexpectedly
                                          large or rapid movements or disruptions
                                          in the energy markets, from regulatory-driven
                                          market rule changes and/or
                                          bankruptcy or non-performance of customers
                                          or counterparties.
  Derivative
                                          instruments are frequently utilized to
                                          execute risk management and hedging
                                          strategies. Derivative instruments, such
                                          as futures, forward contracts, swaps or
                                          options, derive their value from underlying
                                          assets, indices, reference rates or
                                          a combination of these factors. These derivative
                                          instruments include negotiated
                                          contracts, which are referred to as over-the-counter
                                          derivatives and instruments
                                          listed and traded on an exchange. The companies
                                          maintain commodity-price risk
                                          management strategies that use derivative
                                          instruments to minimize significant,
                                          unanticipated net income fluctuations caused
                                          by commodity price volatility.
 54
  Interest
                                          Rate Risk
 Great
                                          Plains Energy and consolidated KCP&L manage interest expense and short and
                                          long-term liquidity through a combination
                                          of fixed and variable rate debt.
                                          Generally, the amount of each type of debt
                                          is managed through market issuance,
                                          but interest rate swap and cap agreements
                                          with highly rated financial
                                          institutions may be used to achieve the
                                          desired combination. Using outstanding
                                          balances and annualized interest rates
                                          as of December 31, 2005, a hypothetical
                                          10% increase in the interest rates associated
                                          with long-term variable rate debt
                                          would result in an increase of less than
                                          $1.1 million in interest expense for
                                          2006. Additionally, interest rates impact
                                          the fair value of long-term debt.
                                          Also, KCP&L had $31.9 million of commercial paper
                                          outstanding at December
                                          31, 2005. The principal amount, which will
                                          vary during the year, of the
                                          commercial paper will drive KCP&L’s commercial paper interest expense.
                                          Assuming that $31.9 million of commercial
                                          paper was outstanding for all of 2006,
                                          a hypothetical 10% increase in commercial
                                          paper rates would result in an
                                          increase of less than $0.2 million in interest
                                          expense for 2006. A change in
                                          interest rates would impact the Company
                                          to the extent it redeemed any of its
                                          outstanding long-term debt. Great Plains
                                          Energy’s and consolidated KCP&L’s
                                          book values of long-term debt were 1% below
                                          fair values at December 31, 2005.
  **Commodity
                                          Risk**
 KCP&L
                                          and Strategic Energy engage in the wholesale
                                          and retail marketing of electricity
                                          and are exposed to risk associated with
                                          the price of electricity.
  KCP&L's
                                          wholesale operations include the physical
                                          delivery and marketing of power
                                          obtained through its generation capacity
                                          and long, intermediate and short-term
                                          capacity or power purchase agreements.
                                          The agreements contain penalties for
                                          non-performance to limit KCP&L’s energy price risk on the contracted energy.
                                          KCP&L also enters into additional power purchase
                                          agreements with the
                                          objective of obtaining the most economical
                                          energy to meet its physical delivery
                                          obligations to customers. KCP&L is required to maintain a capacity margin
                                          of
                                          at least 12% of its peak summer demand.
                                          This net positive supply of capacity and
                                          energy is maintained through its generation
                                          assets and capacity and power
                                          purchase agreements to protect it from
                                          the potential operational failure of one
                                          of its power generating units. KCP&L continually evaluates the need for
                                          additional risk mitigation measures in
                                          order to minimize its financial exposure
                                          to, among other things, spikes in wholesale
                                          power prices during periods of high
                                          demand.
  KCP&L's
                                          sales include the sales of electricity
                                          to its retail customers and bulk power
                                          sales of electricity in the wholesale market.
                                          KCP&L continually evaluates
                                          its system requirements, the availability
                                          of generating units, availability and
                                          cost of fuel supply, the availability and
                                          cost of purchased power and the
                                          requirements of other electric systems;
                                          therefore, the impact of the
                                          hypothetical amounts that follow could
                                          be significantly reduced depending on the
                                          system requirements and market prices at
                                          the time of the increases. A
                                          hypothetical 10% increase in the market
                                          price of power could result in a $5.3
                                          million decrease in operating income for
                                          2006 related to purchased power. In
                                          2006, approximately 77 %
                                          of
                                          KCP&L’s net MWhs generated are expected to be
                                          coal-fired. KCP&L
                                          currently has all of its coal requirements
                                          for 2006 under contract. A
                                          hypothetical 10% increase in the market
                                          price of coal could result in less than
                                          a $1.0 million increase in fuel expense
                                          for 2006. KCP&L has also implemented
                                          price risk mitigation measures to reduce
                                          its exposure to high natural gas
                                          prices. A hypothetical 10% increase in
                                          natural gas and oil market prices could
                                          result in an increase of $2.4 million in
                                          fuel expense for 2006. At December 31,
                                          2005, KCP&L did not have any of its 2006 projected
                                          natural gas usage for
                                          generation requirements to serve retail
                                          load and firm MWh sales hedged.
                                          KCP&L had slightly under half of its 2005 projected
                                          natural gas usage for
                                          generation requirements to serve retail
                                          load and firm MWh sales hedged at
                                          December 31, 2004.
  Strategic
                                          Energy maintains a commodity-price risk
                                          management strategy that uses derivative
                                          instruments including forward physical
                                          energy purchases, to minimize
                                          significant, unanticipated net income fluctuations
                                          caused by commodity-price
                                          volatility. In certain markets where Strategic
                                          Energy
  55
  operates,
                                            entering into forward fixed price contracts
                                            is cost prohibitive. Financial
                                            derivative instruments, including swaps,
                                            are used to limit the unfavorable
                                            effect that price increases will have
                                            on electricity purchases, effectively
                                            fixing the future purchase price of electricity
                                            for the applicable forecasted
                                            usage and protecting Strategic Energy
                                            from significant price volatility. A
                                            hypothetical 10% increase in the cost
                                            of purchased power could result in less
                                            than $2.2 million increase in purchased
                                            power expense for 2006.
 Strategic
                                          Energy has historically utilized certain
                                          derivative instruments to protect
                                          against significant price volatility for
                                          purchased power that have qualified for
                                          the NPNS exception, in accordance with
                                          SFAS No. 133, as amended. However, as
                                          certain markets continue to develop, some
                                          derivative instruments may no longer
                                          qualify for the NPNS exception. As such,
                                          Strategic Energy is designating these
                                          derivative instruments as cash flow hedges,
                                          where appropriate, which could
                                          result in future increased volatility in
                                          derivative assets and liabilities, OCI
                                          and net income above levels historically
                                          experienced. Derivative instruments
                                          that were designated as NPNS are accounted
                                          for by accrual accounting, which
                                          requires the effects of the derivative
                                          to be recorded when the derivative
                                          contract settles. Accordingly, the increase
                                          in derivatives accounted for as cash
                                          flow hedges, and the corresponding decrease
                                          in derivatives accounted for as NPNS
                                          transactions, may affect the timing and
                                          nature of accounting recognition, but
                                          does not change the underlying economics
                                          of the transactions.
  **Investment
                                          Risk**
 KCP&L
                                          maintains trust funds, as required by the
                                          NRC, to fund its share of
                                          decommissioning the Wolf Creek nuclear
                                          power plant. As of December 31, 2005,
                                          these funds were invested primarily in
                                          domestic equity securities and fixed
                                          income securities and are reflected at
                                          fair value on KCP&L’s balance sheets.
                                          The mix of securities is designed to provide
                                          returns to be used to fund
                                          decommissioning and to compensate for inflationary
                                          increases in decommissioning
                                          costs; however, the equity securities in
                                          the trusts are exposed to price
                                          fluctuations in equity markets and the
                                          value of fixed rate fixed income
                                          securities are exposed to changes in interest
                                          rates. A hypothetical increase in
                                          interest rates resulting in a hypothetical
                                          10% decrease in the value of the
                                          fixed income securities would have resulted
                                          in a $4.2 million reduction in the
                                          value of the decommissioning trust funds
                                          at December 31, 2005. A hypothetical
                                          10% decrease in equity prices would have
                                          resulted in a $4.4 million reduction in
                                          the fair value of the equity securities
                                          at December 31, 2005. KCP&L's
                                          exposure to investment risk associated
                                          with the decommissioning trust funds is
                                          in large part mitigated due to the fact
                                          that KCP&L is currently allowed to
                                          recover its decommissioning costs in its
                                          rates.
  KLT
                                          Investments has affordable housing notes
                                          that require the greater of 15% of the
                                          outstanding note balances or the next annual
                                          installment to be held as cash,
                                          cash equivalents or marketable securities.
                                          A hypothetical 10% decrease in market
                                          prices of the securities held as collateral
                                          could result in a decrease of less
                                          than $1.0 million in pre-tax net income
                                          for 2006.
  56
 **ITEM
                                            8. CONSOLIDATED FINANCIAL STATEMENTS****GREAT
                                            PLAINS ENERGY****Consolidated
                                            Statements of Income****Year
                                            Ended December 31**
                                        
                                        **2005**
                                        2004
                                        2003**Operating
                                            Revenues**
                                        
                                        (thousands,
                                            except per share amounts)Electric revenues - KCP&L
                                        
                                        **$**
                                        **1,130,792**
                                        
                                        $
                                        1,090,067
                                        
                                        $
                                        1,054,900Electric revenues - Strategic Energy
                                        
                                        
                                        **1,471,490**
                                        
                                        
                                        1,370,760
                                        
                                        
                                        1,089,663Other revenues
                                        
                                        
                                        **2,600**
                                        
                                        
                                        3,191
                                        
                                        
                                        3,482Total
                                        
                                        
                                        **2,604,882**
                                        
                                        
                                        2,464,018
                                        
                                        
                                        2,148,045**Operating
                                            Expenses**Fuel
                                        
                                        
                                        **207,875**
                                        
                                        
                                        179,362
                                        
                                        
                                        160,327Purchased power - KCP&L
                                        
                                        
                                        **61,263**
                                        
                                        
                                        52,533
                                        
                                        
                                        53,163Purchased power - Strategic Energy
                                        
                                        
                                        **1,368,419**
                                        
                                        
                                        1,247,522
                                        
                                        
                                        968,967Other
                                        
                                        
                                        **327,749**
                                        
                                        
                                        324,237
                                        
                                        
                                        295,383Maintenance
                                        
                                        
                                        **90,350**
                                        
                                        
                                        83,603
                                        
                                        
                                        85,416Depreciation and amortization
                                        
                                        
                                        **153,080**
                                        
                                        
                                        150,071
                                        
                                        
                                        142,763General taxes
                                        
                                        
                                        **109,436**
                                        
                                        
                                        102,756
                                        
                                        
                                        98,461(Gain) loss on property
                                        
                                        
                                        **3,544**
                                        
                                        
                                        5,133
                                        
                                        
                                        (23,703
                                        )Total
                                        
                                        
                                        **2,321,716**
                                        
                                        
                                        2,145,217
                                        
                                        
                                        1,780,777Operating
                                            income
                                        
                                        
                                        **283,166**
                                        
                                        
                                        318,801
                                        
                                        
                                        367,268Non-operating
                                            income
                                        
                                        
                                        **19,505**
                                        
                                        
                                        6,799
                                        
                                        
                                        7,414Non-operating
                                            expenses
                                        
                                        
                                        **(16,745**
                                        **)**
                                        
                                        (15,184
                                        )
                                        
                                        (20,462
                                        )Interest
                                            charges
                                        
                                        
                                        **(73,787**
                                        **)**
                                        
                                        (83,030
                                        )
                                        
                                        (76,171
                                        )Income
                                            from continuing operations before income
                                            taxes, minorityinterest in subsidiaries and loss from
                                            equity investments
                                        
                                        
                                        **212,139**
                                        
                                        
                                        227,386
                                        
                                        
                                        278,049Income
                                            taxes
                                        
                                        
                                        **(39,691**
                                        **)**
                                        
                                        (54,451
                                        )
                                        
                                        (78,565
                                        )Minority
                                            interest in subsidiaries
                                        
                                        
                                        **(7,805**
                                        **)**
                                        
                                        2,131
                                        
                                        
                                        (7,764
                                        )Loss
                                            from equity investments, net of income
                                            taxes
                                        
                                        
                                        **(434**
                                        **)**
                                        
                                        (1,531
                                        )
                                        
                                        (2,018
                                        )Income
                                            from continuing operations
                                        
                                        
                                        **164,209**
                                        
                                        
                                        173,535
                                        
                                        
                                        189,702Discontinued
                                            operations, net of income taxes (Note
                                            8)
                                        
                                        
                                        **(1,899**
                                        **)**
                                        
                                        7,276
                                        
                                        
                                        (44,779
                                        )Net
                                            income
                                        
                                        
                                        **162,310**
                                        
                                        
                                        180,811
                                        
                                        
                                        144,923Preferred
                                            stock dividend requirements
                                        
                                        
                                        **1,646**
                                        
                                        
                                        1,646
                                        
                                        
                                        1,646Earnings
                                            available for common shareholders
                                        
                                        **$**
                                        **160,664**
                                        
                                        $
                                        179,165
                                        
                                        $
                                        143,277Average
                                            number of common shares outstanding
                                        
                                        
                                        **74,597**
                                        
                                        
                                        72,028
                                        
                                        
                                        69,206Basic
                                            and diluted earnings (loss) per common
                                            shareContinuing operations
                                        
                                        **$**
                                        **2.18**
                                        
                                        $
                                        2.39
                                        
                                        $
                                        2.72Discontinued operations
                                        
                                        
                                        **(0.03**
                                        **)**
                                        
                                        0.10
                                        
                                        
                                        (0.65
                                        )Basic
                                            and diluted earnings per common share
                                        
                                        **$**
                                        **2.15**
                                        
                                        $
                                        2.49
                                        
                                        $
                                        2.07Cash
                                            dividends per common share
                                        
                                        **$**
                                        **1.66**
                                        
                                        $
                                        1.66
                                        
                                        $
                                        1.66The
                                            accompanying Notes to Consolidated Financial
                                            Statements are an integral
                                            part of these
                                            statements.
  57
 **GREAT
                                          PLAINS ENERGY****Consolidated
                                          Balance Sheets****December
                                          31****2005**
                                      2004**ASSETS**
                                      
                                      (thousands)**Current
                                          Assets**Cash and cash equivalents
                                      
                                      **$**
                                      **103,068**
                                      
                                      $
                                      127,129Restricted cash
                                      
                                      
                                      **1,900**
                                      
                                      
                                      7,700Receivables, net
                                      
                                      
                                      **259,043**
                                      
                                      
                                      247,184Fuel inventories, at average cost
                                      
                                      
                                      **17,073**
                                      
                                      
                                      21,121Materials and supplies, at average cost
                                      
                                      
                                      **57,017**
                                      
                                      
                                      54,432Deferred income taxes
                                      
                                      
                                      **-**
                                      
                                      
                                      13,065Assets
                                          of discontinued operations
                                      
                                      
                                      **627**
                                      
                                      
                                      749Derivative instruments
                                      
                                      
                                      **39,189**
                                      
                                      
                                      6,372Other
                                      
                                      
                                      **13,001**
                                      
                                      
                                      14,485Total
                                      
                                      
                                      **490,918**
                                      
                                      
                                      492,237**Nonutility
                                          Property and Investments**Affordable housing limited partnerships
                                      
                                      
                                      **28,214**
                                      
                                      
                                      41,317Nuclear decommissioning trust fund
                                      
                                      
                                      **91,802**
                                      
                                      
                                      84,148Other
                                      
                                      
                                      **17,291**
                                      
                                      
                                      32,739Total
                                      
                                      
                                      **137,307**
                                      
                                      
                                      158,204**Utility
                                          Plant, at Original Cost**Electric
                                      
                                      
                                      **4,959,539**
                                      
                                      
                                      4,841,355Less-accumulated depreciation
                                      
                                      
                                      **2,322,813**
                                      
                                      
                                      2,196,835Net utility plant in service
                                      
                                      
                                      **2,636,726**
                                      
                                      
                                      2,644,520Construction work in progress
                                      
                                      
                                      **100,952**
                                      
                                      
                                      53,821Nuclear fuel, net of amortization of $115,240
                                          and $127,631
                                      
                                      
                                      **27,966**
                                      
                                      
                                      36,109Total
                                      
                                      
                                      **2,765,644**
                                      
                                      
                                      2,734,450**Deferred
                                          Charges and Other Assets**Regulatory assets
                                      
                                      
                                      **179,922**
                                      
                                      
                                      144,345Prepaid pension costs
                                      
                                      
                                      **98,295**
                                      
                                      
                                      119,811Goodwill
                                      
                                      
                                      **87,624**
                                      
                                      
                                      86,767Derivative instruments
                                      
                                      
                                      **21,812**
                                      
                                      
                                      2,275Other
                                      
                                      
                                      **52,204**
                                      
                                      
                                      60,812Total
                                      
                                      
                                      **439,857**
                                      
                                      
                                      414,010Total
                                      
                                      **$**
                                      **3,833,726**
                                      
                                      $
                                      3,798,901The
                                          accompanying Notes to Consolidated Financial
                                          Statements are an integral
                                          part of these
                                          statements.
  58
 **GREAT
                                          PLAINS ENERGY****Consolidated
                                          Balance Sheets****December
                                          31****2005**
                                      
                                      2004**LIABILITIES
                                          AND CAPITALIZATION**
                                      
                                      (thousands)**Current
                                          Liabilities**Notes payable
                                      
                                      **$**
                                      **6,000**
                                      
                                      $
                                      20,000Commercial paper
                                      
                                      
                                      **31,900**
                                      
                                      
                                      -Current maturities of long-term debt
                                      
                                      
                                      **1,675**
                                      
                                      
                                      253,230EIRR bonds classified as current
                                      
                                      
                                      **-**
                                      
                                      
                                      85,922Accounts payable
                                      
                                      
                                      **231,496**
                                      
                                      
                                      199,952Accrued taxes
                                      
                                      
                                      **37,140**
                                      
                                      
                                      46,993Accrued interest
                                      
                                      
                                      **13,329**
                                      
                                      
                                      11,598Accrued payroll and vacations
                                      
                                      
                                      **36,024**
                                      
                                      
                                      32,462Accrued refueling outage costs
                                      
                                      
                                      **8,974**
                                      
                                      
                                      13,180Deferred income taxes
                                      
                                      
                                      **1,351**
                                      
                                      
                                      -Supplier collateral
                                      
                                      
                                      **1,900**
                                      
                                      
                                      7,700Liabilities of discontinued operations
                                      
                                      
                                      **64**
                                      
                                      
                                      2,129Derivative instruments
                                      
                                      
                                      **7,411**
                                      
                                      
                                      2,434Other
                                      
                                      
                                      **25,658**
                                      
                                      
                                      22,497Total
                                      
                                      
                                      **402,922**
                                      
                                      
                                      698,097**Deferred
                                          Credits and Other Liabilities**Deferred income taxes
                                      
                                      
                                      **621,359**
                                      
                                      
                                      632,160Deferred investment tax credits
                                      
                                      
                                      **29,698**
                                      
                                      
                                      33,587Asset retirement obligations
                                      
                                      
                                      **145,907**
                                      
                                      
                                      113,674Pension liability
                                      
                                      
                                      **87,355**
                                      
                                      
                                      95,805Regulatory liabilities
                                      
                                      
                                      **69,641**
                                      
                                      
                                      4,101Derivative instruments
                                      
                                      
                                      **7,750**
                                      
                                      
                                      112Other
                                      
                                      
                                      **65,787**
                                      
                                      
                                      84,311Total
                                      
                                      
                                      **1,027,497**
                                      
                                      
                                      963,750**Capitalization**Common shareholders' equityCommon stock-150,000,000 shares authorized
                                          without par
                                          value74,783,824 and 74,394,423 shares issued,
                                          stated value
                                      
                                      
                                      **777,216**
                                      
                                      
                                      765,482Unearned compensation
                                      
                                      
                                      **(2,088**
                                      **)**
                                      
                                      (1,393
                                      )Capital stock premium and expense
                                      
                                      
                                      **(30,671**
                                      **)**
                                      
                                      (32,112
                                      )Retained earnings
                                      
                                      
                                      **488,001**
                                      
                                      
                                      451,491Treasury stock-43,376 and 28,488 shares,
                                          at cost
                                      
                                      
                                      **(1,304**
                                      **)**
                                      
                                      (856
                                      )Accumulated other comprehensive loss
                                      
                                      
                                      **(7,727**
                                      **)**
                                      
                                      (41,018
                                      )Total
                                      
                                      
                                      **1,223,427**
                                      
                                      
                                      1,141,594Cumulative preferred stock $100 par value3.80% - 100,000 shares issued
                                      
                                      
                                      **10,000**
                                      
                                      
                                      10,0004.50% - 100,000 shares issued
                                      
                                      
                                      **10,000**
                                      
                                      
                                      10,0004.20% - 70,000 shares issued
                                      
                                      
                                      **7,000**
                                      
                                      
                                      7,0004.35% - 120,000 shares issued
                                      
                                      
                                      **12,000**
                                      
                                      
                                      12,000Total
                                      
                                      
                                      **39,000**
                                      
                                      
                                      39,000Long-term debt (Note 19)
                                      
                                      
                                      **1,140,880**
                                      
                                      
                                      956,460Total
                                      
                                      
                                      **2,403,307**
                                      
                                      
                                      2,137,054**Commitments
                                          and Contingencies (Note 13)**Total
                                      
                                      **$**
                                      **3,833,726**
                                      
                                      $
                                      3,798,901The
                                          accompanying Notes to Consolidated Financial
                                          Statements are an integral
                                          part of these
                                          statements.
  59
 **GREAT
                                      PLAINS ENERGY****Consolidated
                                      Statements of Cash Flows**Revised
                                  
                                  Revised**Year
                                      Ended December 31**
                                  
                                  **2005**
                                  
                                  2004
                                  
                                  2003**Cash
                                      Flows from Operating Activities**
                                  
                                  
                                  
                                  (thousands)Net
                                      income
                                  
                                  **$**
                                  **162,310**
                                  
                                  $
                                  180,811
                                  
                                  $
                                  144,923Adjustments
                                      to reconcile income to net cash from operating
                                      activities:Depreciation and amortization
                                  
                                  
                                  **153,080**
                                  
                                  
                                  150,090
                                  
                                  
                                  143,712Amortization of:Nuclear fuel
                                  
                                  
                                  **13,374**
                                  
                                  
                                  14,159
                                  
                                  
                                  12,334Other
                                  
                                  
                                  **10,580**
                                  
                                  
                                  11,827
                                  
                                  
                                  11,626Deferred income taxes, net
                                  
                                  
                                  **(23,021**
                                  **)**
                                  
                                  30,319
                                  
                                  
                                  17,058Investment tax credit amortization
                                  
                                  
                                  **(3,889**
                                  **)**
                                  
                                  (3,984
                                  )
                                  
                                  (3,994
                                  )Loss from equity investments
                                  
                                  
                                  **434**
                                  
                                  
                                  1,531
                                  
                                  
                                  2,018(Gain) loss on property
                                  
                                  
                                  **3,295**
                                  
                                  
                                  (9,686
                                  )
                                  
                                  30,797Minority interest in subsidiaries
                                  
                                  
                                  **7,805**
                                  
                                  
                                  (2,131
                                  )
                                  
                                  7,764Other
                                      operating activities (Note 2)
                                  
                                  
                                  **92,923**
                                  
                                  
                                  (18,866
                                  )
                                  
                                  20,857Net cash from operating activities
                                  
                                  
                                  **416,891**
                                  
                                  
                                  354,070
                                  
                                  
                                  387,095**Cash
                                      Flows from Investing Activities**Utility
                                      capital expenditures
                                  
                                  
                                  **(327,283**
                                  **)**
                                  
                                  (190,548
                                  )
                                  
                                  (148,675
                                  )Allowance
                                      for borrowed funds used during construction
                                  
                                  
                                  **(1,598**
                                  **)**
                                  
                                  (1,498
                                  )
                                  
                                  (1,368
                                  )Purchases
                                      of investments
                                  
                                  
                                  **(14,976**
                                  **)**
                                  
                                  (35,003
                                  )
                                  
                                  -Purchases
                                      of nonutility property
                                  
                                  
                                  **(6,853**
                                  **)**
                                  
                                  (6,108
                                  )
                                  
                                  (22,746
                                  )Proceeds
                                      from sale of assets and investments
                                  
                                  
                                  **17,369**
                                  
                                  
                                  67,457
                                  
                                  
                                  33,277Purchases
                                      of nuclear decommissioning trust investments
                                  
                                  
                                  **(34,607**
                                  **)**
                                  
                                  (49,720
                                  )
                                  
                                  (111,699
                                  )Proceeds
                                      from nuclear decommissioning trust investments
                                  
                                  
                                  **31,055**
                                  
                                  
                                  46,167
                                  
                                  
                                  108,179Purchase
                                      of additional indirect interest in Strategic
                                      Energy
                                  
                                  
                                  **-**
                                  
                                  
                                  (90,033
                                  )
                                  
                                  -Hawthorn
                                      No. 5 partial insurance recovery
                                  
                                  
                                  **10,000**
                                  
                                  
                                  30,810
                                  
                                  
                                  3,940Hawthorn
                                      No. 5 partial litigation settlements
                                  
                                  
                                  **-**
                                  
                                  
                                  1,139
                                  
                                  
                                  17,263Other
                                      investing activities
                                  
                                  
                                  **(930**
                                  **)**
                                  
                                  (7,081
                                  )
                                  
                                  (1,220
                                  )Net cash from investing activities
                                  
                                  
                                  **(327,823**
                                  **)**
                                  
                                  (234,418
                                  )
                                  
                                  (123,049
                                  )**Cash
                                      Flows from Financing Activities**Issuance
                                      of common stock
                                  
                                  
                                  **9,061**
                                  
                                  
                                  153,662
                                  
                                  
                                  -Issuance
                                      of long-term debt
                                  
                                  
                                  **334,417**
                                  
                                  
                                  163,600
                                  
                                  
                                  -Issuance
                                      fees
                                  
                                  
                                  **(4,522**
                                  **)**
                                  
                                  (14,496
                                  )
                                  
                                  (266
                                  )Repayment
                                      of long-term debt
                                  
                                  
                                  **(339,152**
                                  **)**
                                  
                                  (213,943
                                  )
                                  
                                  (133,181
                                  )Net
                                      change in short-term borrowings
                                  
                                  
                                  **17,900**
                                  
                                  
                                  (67,000
                                  )
                                  
                                  42,320Dividends
                                      paid
                                  
                                  
                                  **(125,484**
                                  **)**
                                  
                                  (120,806
                                  )
                                  
                                  (116,527
                                  )Other
                                      financing activities
                                  
                                  
                                  **(5,975**
                                  **)**
                                  
                                  (7,309
                                  )
                                  
                                  (7,598
                                  )Net cash from financing activities
                                  
                                  
                                  **(113,755**
                                  **)**
                                  
                                  (106,292
                                  )
                                  
                                  (215,252
                                  )**Net
                                      Change in Cash and Cash Equivalents**
                                  
                                  
                                  **(24,687**
                                  **)**
                                  
                                  13,360
                                  
                                  
                                  48,794**Less:
                                      Net Change in Cash and Cash Equivalents from****Discontinued
                                      Operations**
                                  
                                  
                                  **(626**
                                  )
                                  
                                  458
                                  
                                  
                                  73Cash
                                    and Cash Equivalents at Beginning of Year
                                  
                                  
                                  **127,129**
                                  
                                  
                                  114,227
                                  
                                  
                                  65,506**Cash
                                        and Cash Equivalentsat End
                                        of Year**
                                  
                                  **$**
                                  **103,068**
                                  
                                  $
                                  127,129
                                  
                                  $
                                  114,227The
                                      accompanying Notes to Consolidated Financial
                                      Statements are an integral
                                      part of these statements.
  60
 **GREAT
                                          PLAINS ENERGY****Consolidated
                                          Statements of Common Shareholders' Equity****2005**
                                      
                                      2004
                                      
                                      2003**Shares**
                                      
                                      **Amount**
                                      
                                      Shares
                                      
                                      Amount
                                      
                                      Shares
                                      
                                      Amount**Common
                                          Stock**
                                      
                                      (thousands,
                                          except share amounts)Beginning
                                          balance
                                      
                                      
                                      **74,394,423**
                                      
                                      **$**
                                      **765,482**
                                      
                                      
                                      69,259,203
                                      
                                      $
                                      611,424
                                      
                                      
                                      69,196,322
                                      
                                      $
                                      609,497Issuance
                                          of common stock
                                      
                                      
                                      **313,026**
                                      
                                      
                                      **9,400**
                                      
                                      
                                      5,121,887
                                      
                                      
                                      153,662
                                      
                                      
                                      -
                                      
                                      
                                      -Issuance
                                          of restricted common stock
                                      
                                      
                                      **76,375**
                                      
                                      
                                      **2,334**
                                      
                                      
                                      13,333
                                      
                                      
                                      396
                                      
                                      
                                      62,881
                                      
                                      
                                      1,927Ending balance
                                      
                                      
                                      **74,783,824**
                                      
                                      
                                      **777,216**
                                      
                                      
                                      74,394,423
                                      
                                      
                                      765,482
                                      
                                      
                                      69,259,203
                                      
                                      
                                      611,424**Unearned
                                          Compensation**Beginning
                                          balance
                                      
                                      
                                      
                                      
                                      
                                      **(1,393**
                                      **)**
                                      
                                      
                                      
                                      
                                      (1,633
                                      )
                                      
                                      
                                      
                                      
                                      -Issuance
                                          of restricted common stock
                                      
                                      
                                      
                                      
                                      
                                      **(2,434**
                                      **)**
                                      
                                      
                                      
                                      
                                      (396
                                      )
                                      
                                      
                                      
                                      
                                      (1,927
                                      )Forfeiture
                                          of restricted common stock
                                      
                                      **324**
                                      
                                      
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      
                                      
                                      -Compensation
                                          expense recognized
                                      
                                      
                                      
                                      
                                      
                                      **1,415**
                                      
                                      
                                      
                                      
                                      
                                      636
                                      
                                      
                                      
                                      
                                      
                                      294Ending balance
                                      
                                      
                                      
                                      
                                      **(2,088**
                                      **)**
                                      
                                      
                                      
                                      (1,393
                                      )
                                      
                                      
                                      
                                      (1,633
                                      )**Capital
                                          Stock Premium and Expense**Beginning
                                          balance
                                      
                                      
                                      
                                      
                                      
                                      **(32,112**
                                      **)**
                                      
                                      
                                      
                                      
                                      (7,240
                                      )
                                      
                                      
                                      
                                      
                                      (7,744
                                      )Issuance
                                          of common stock
                                      
                                      
                                      
                                      
                                      
                                      **-**
                                      
                                      
                                      
                                      
                                      
                                      (5,434
                                      )
                                      
                                      
                                      
                                      
                                      -Equity
                                          compensation expense
                                      
                                      
                                      
                                      
                                      
                                      **1,394**
                                      
                                      
                                      
                                      
                                      
                                      181
                                      
                                      
                                      
                                      
                                      
                                      443FELINE
                                          PRIDESSM purchase contractadjustment, allocated fees and expenses
                                      
                                      **-**
                                      
                                      
                                      
                                      
                                      
                                      (19,603
                                      )
                                      
                                      
                                      
                                      
                                      -Other
                                      
                                      
                                      
                                      
                                      
                                      **47**
                                      
                                      
                                      
                                      
                                      
                                      (16
                                      )
                                      
                                      
                                      
                                      
                                      61Ending balance
                                      
                                      
                                      **(30,671**
                                      **)**
                                      
                                      
                                      (32,112
                                      )
                                      
                                      
                                      
                                      (7,240
                                      )**Retained
                                          Earnings**Beginning
                                          balance
                                      
                                      
                                      
                                      
                                      
                                      **451,491**
                                      
                                      
                                      
                                      
                                      
                                      391,750
                                      
                                      
                                      
                                      
                                      
                                      363,579Net
                                          income
                                      
                                      
                                      
                                      
                                      
                                      **162,310**
                                      
                                      
                                      
                                      
                                      
                                      180,811
                                      
                                      
                                      
                                      
                                      
                                      144,923Loss
                                          on reissuance of treasury stock
                                      
                                      
                                      
                                      
                                      
                                      **-**
                                      
                                      
                                      
                                      
                                      
                                      (193
                                      )
                                      
                                      
                                      
                                      
                                      -Dividends:Common stock
                                      
                                      
                                      
                                      
                                      
                                      **(123,838**
                                      **)**
                                      
                                      
                                      
                                      
                                      (119,160
                                      )
                                      
                                      
                                      
                                      
                                      (114,881
                                      )Preferred stock - at required rates
                                      
                                      
                                      
                                      
                                      
                                      **(1,646**
                                      **)**
                                      
                                      
                                      
                                      
                                      (1,646
                                      )
                                      
                                      
                                      
                                      
                                      (1,646
                                      )Performance shares
                                      
                                      
                                      
                                      
                                      
                                      **(260**
                                      **)**
                                      
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      
                                      
                                      -Options
                                      
                                      
                                      
                                      
                                      
                                      **(56**
                                      **)**
                                      
                                      
                                      
                                      
                                      (71
                                      )
                                      
                                      
                                      
                                      
                                      (225
                                      )Ending balance
                                      
                                      
                                      
                                      
                                      **488,001**
                                      
                                      
                                      
                                      
                                      451,491
                                      
                                      
                                      
                                      
                                      391,750**Treasury
                                          Stock**Beginning
                                          balance
                                      
                                      
                                      **(28,488**
                                      **)**
                                      
                                      **(856**
                                      **)**
                                      
                                      (3,265
                                      )
                                      
                                      (121
                                      )
                                      
                                      (152
                                      )
                                      
                                      (4
                                      )Treasury
                                          shares acquired
                                      
                                      
                                      **(18,385**
                                      **)**
                                      
                                      **(553**
                                      **)**
                                      
                                      (54,683
                                      )
                                      
                                      (1,645
                                      )
                                      
                                      (85,000
                                      )
                                      
                                      (2,332
                                      )Treasury
                                          shares reissued
                                      
                                      
                                      **3,497**
                                      
                                      
                                      **105**
                                      
                                      
                                      29,460
                                      
                                      
                                      910
                                      
                                      
                                      81,887
                                      
                                      
                                      2,215Ending balance
                                      
                                      
                                      **(43,376**
                                      **)**
                                      
                                      **(1,304**
                                      **)**
                                      
                                      (28,488
                                      )
                                      
                                      (856
                                      )
                                      
                                      (3,265
                                      )
                                      
                                      (121
                                      )**Accumulated
                                          Other Comprehensive Loss**Beginning
                                          balance
                                      
                                      
                                      
                                      
                                      
                                      **(41,018**
                                      **)**
                                      
                                      
                                      
                                      
                                      (36,886
                                      )
                                      
                                      
                                      
                                      
                                      (25,858
                                      )Derivative
                                          hedging activity, net of tax
                                      
                                      
                                      
                                      
                                      
                                      **28,397**
                                      
                                      
                                      
                                      
                                      
                                      931
                                      
                                      
                                      
                                      
                                      
                                      (598
                                      )Minimum
                                          pension obligation, net of tax
                                      
                                      **4,894**
                                      
                                      
                                      
                                      
                                      
                                      (5,063
                                      )
                                      
                                      
                                      
                                      
                                      (10,430
                                      )Ending balance
                                      
                                      
                                      
                                      
                                      **(7,727**
                                      **)**
                                      
                                      
                                      
                                      (41,018
                                      )
                                      
                                      
                                      
                                      (36,886
                                      )**Total
                                          Common Shareholders' Equity**
                                      **$**
                                      **1,223,427**
                                      
                                      
                                      
                                      $
                                      1,141,594
                                      
                                      
                                      
                                      $
                                      957,294The
                                          accompanying Notes to Consolidated Financial
                                          Statements are an integral
                                          part of these statements.
  61
 **GREAT
                                          PLAINS ENERGY****Consolidated
                                          Statements of Comprehensive Income****Year
                                          Ended December 31**
                                      
                                      **2005**
                                      
                                      2004
                                      
                                      2003(thousands)Net
                                          income
                                      
                                      **$**
                                      **162,310**
                                      
                                      $
                                      180,811
                                      
                                      $
                                      144,923Other
                                          comprehensive incomeGain on derivative hedging instruments
                                      
                                      
                                      **84,070**
                                      
                                      
                                      2,649
                                      
                                      
                                      7,712Income taxes
                                      
                                      
                                      **(34,718**
                                      **)**
                                      
                                      (1,126
                                      )
                                      
                                      (3,359
                                      )Net gain on derivative hedging instruments
                                      
                                      
                                      **49,352**
                                      
                                      
                                      1,523
                                      
                                      
                                      4,353Reclassification to expenses, net of tax
                                      
                                      
                                      **(20,955**
                                      **)**
                                      
                                      (592
                                      )
                                      
                                      (4,951
                                      )Derivative hedging activity, net of tax
                                      
                                      
                                      **28,397**
                                      
                                      
                                      931
                                      
                                      
                                      (598
                                      )Change in minimum pension obligation
                                      
                                      
                                      **8,722**
                                      
                                      
                                      (7,624
                                      )
                                      
                                      (17,100
                                      )Income taxes
                                      
                                      
                                      **(3,828**
                                      **)**
                                      
                                      2,561
                                      
                                      
                                      6,670Net change in minimum pension obligation
                                      
                                      
                                      **4,894**
                                      
                                      
                                      (5,063
                                      )
                                      
                                      (10,430
                                      )Comprehensive
                                          income
                                      
                                      **$**
                                      **195,601**
                                      
                                      $
                                      176,679
                                      
                                      $
                                      133,895The
                                          accompanying Notes to Consolidated Financial
                                          Statements are an integral
                                          part of these
                                          statements.
  62
 **KANSAS
                                          CITY POWER & LIGHT COMPANY****Consolidated
                                          Statements of Income****Year
                                          Ended December 31**
                                      
                                      **2005**
                                      2004
                                      2003**Operating
                                          Revenues**
                                      
                                      (thousands)Electric revenues
                                      
                                      **$**
                                      **1,130,792**
                                      
                                      $
                                      1,090,067
                                      
                                      $
                                      1,054,900Other revenues
                                      
                                      
                                      **113**
                                      
                                      
                                      1,568
                                      
                                      
                                      2,101Total
                                      
                                      
                                      **1,130,905**
                                      
                                      
                                      1,091,635
                                      
                                      
                                      1,057,001**Operating
                                          Expenses**Fuel
                                      
                                      
                                      **207,875**
                                      
                                      
                                      179,362
                                      
                                      
                                      160,327Purchased power
                                      
                                      
                                      **61,263**
                                      
                                      
                                      52,533
                                      
                                      
                                      53,163Other
                                      
                                      
                                      **265,707**
                                      
                                      
                                      259,699
                                      
                                      
                                      241,701Maintenance
                                      
                                      
                                      **90,321**
                                      
                                      
                                      83,535
                                      
                                      
                                      85,391Depreciation and amortization
                                      
                                      
                                      **146,610**
                                      
                                      
                                      145,246
                                      
                                      
                                      140,955General taxes
                                      
                                      
                                      **104,823**
                                      
                                      
                                      98,984
                                      
                                      
                                      95,590(Gain) loss on property
                                      
                                      
                                      **4,613**
                                      
                                      
                                      5,133
                                      
                                      
                                      (1,603
                                      )Total
                                      
                                      
                                      **881,212**
                                      
                                      
                                      824,492
                                      
                                      
                                      775,524Operating
                                          income
                                      
                                      
                                      **249,693**
                                      
                                      
                                      267,143
                                      
                                      
                                      281,477Non-operating
                                          income
                                      
                                      
                                      **16,104**
                                      
                                      
                                      5,402
                                      
                                      
                                      5,251Non-operating
                                          expenses
                                      
                                      
                                      **(4,281**
                                      **)**
                                      
                                      (7,407
                                      )
                                      
                                      (8,280
                                      )Interest
                                          charges
                                      
                                      
                                      **(61,841**
                                      **)**
                                      
                                      (74,170
                                      )
                                      
                                      (70,294
                                      )Income
                                          from continuing operations beforeincome taxes and minority interest in subsidiaries
                                      
                                      
                                      **199,675**
                                      
                                      
                                      190,968
                                      
                                      
                                      208,154Income
                                          taxes
                                      
                                      
                                      **(48,213**
                                      **)**
                                      
                                      (52,763
                                      )
                                      
                                      (83,572
                                      )Minority
                                          interest in subsidiaries
                                      
                                      
                                      **(7,805**
                                      **)**
                                      
                                      5,087
                                      
                                      
                                      1,263Income
                                          from continuing operations
                                      
                                      
                                      **143,657**
                                      
                                      
                                      143,292
                                      
                                      
                                      125,845Discontinued
                                          operations, net of income taxes (Note 8)
                                      
                                      
                                      **-**
                                      
                                      
                                      -
                                      
                                      
                                      (8,690
                                      )Net
                                          income
                                      
                                      **$**
                                      **143,657**
                                      
                                      $
                                      143,292
                                      
                                      $
                                      117,155The
                                          disclosures regarding KCP&L included in the accompanying Notes to
                                          Consolidated Financial Statements are anintegral
                                          part of these
                                          statements.
  63
 **KANSAS
                                          CITY POWER & LIGHT COMPANY****Consolidated
                                          Balance Sheets****December
                                          31****2005**
                                      2004**ASSETS**
                                      
                                      (thousands)**Current
                                          Assets**Cash and cash equivalents
                                      
                                      **$**
                                      **2,961**
                                      
                                      $
                                      51,619Receivables, net
                                      
                                      
                                      **70,264**
                                      
                                      
                                      63,366Fuel inventories, at average cost
                                      
                                      
                                      **17,073**
                                      
                                      
                                      21,121Materials and supplies, at average cost
                                      
                                      
                                      **57,017**
                                      
                                      
                                      54,432Deferred income taxes
                                      
                                      
                                      **8,944**
                                      
                                      
                                      12,818Prepaid expenses
                                      
                                      
                                      **11,292**
                                      
                                      
                                      12,511Derivative instruments
                                      
                                      
                                      **-**
                                      
                                      
                                      363Total
                                      
                                      
                                      **167,551**
                                      
                                      
                                      216,230**Nonutility
                                          Property and Investments**Nuclear decommissioning trust fund
                                      
                                      
                                      **91,802**
                                      
                                      
                                      84,148Other
                                      
                                      
                                      **7,694**
                                      
                                      
                                      20,576Total
                                      
                                      
                                      **99,496**
                                      
                                      
                                      104,724**Utility
                                          Plant, at Original Cost**Electric
                                      
                                      
                                      **4,959,539**
                                      
                                      
                                      4,841,355Less-accumulated depreciation
                                      
                                      
                                      **2,322,813**
                                      
                                      
                                      2,196,835Net utility plant in service
                                      
                                      
                                      **2,636,726**
                                      
                                      
                                      2,644,520Construction work in progress
                                      
                                      
                                      **100,952**
                                      
                                      
                                      53,821Nuclear fuel, net of amortization of $115,240
                                          and $127,631
                                      
                                      
                                      **27,966**
                                      
                                      
                                      36,109Total
                                      
                                      
                                      **2,765,644**
                                      
                                      
                                      2,734,450**Deferred
                                          Charges and Other Assets**Regulatory assets
                                      
                                      
                                      **179,922**
                                      
                                      
                                      144,345Prepaid pension costs
                                      
                                      
                                      **98,002**
                                      
                                      
                                      116,024Derivative instruments
                                      
                                      
                                      **-**
                                      
                                      
                                      674Other
                                      
                                      
                                      **27,905**
                                      
                                      
                                      20,947Total
                                      
                                      
                                      **305,829**
                                      
                                      
                                      281,990Total
                                      
                                      **$**
                                      **3,338,520**
                                      
                                      $
                                      3,337,394The
                                          disclosures regarding KCP&L included in the accompanying Notes to
                                          Consolidated Financial Statements arean
                                          integral part of these
                                          statements.
  64
 **KANSAS
                                          CITY POWER & LIGHT COMPANY****Consolidated
                                          Balance Sheets****December
                                          31****2005**
                                      2004**LIABILITIES
                                          AND CAPITALIZATION**
                                      
                                      (thousands)**Current
                                          Liabilities**Notes payable to Great Plains Energy
                                      
                                      **$**
                                      **500**
                                      
                                      $
                                      24Commercial paper
                                      
                                      
                                      **31,900**
                                      
                                      
                                      -Current maturities of long-term debt
                                      
                                      
                                      **-**
                                      
                                      
                                      250,000EIRR bonds classified as current
                                      
                                      
                                      **-**
                                      
                                      
                                      85,922Accounts payable
                                      
                                      
                                      **106,040**
                                      
                                      
                                      84,105Accrued taxes
                                      
                                      
                                      **27,448**
                                      
                                      
                                      34,497Accrued interest
                                      
                                      
                                      **11,549**
                                      
                                      
                                      9,800Accrued payroll and vacations
                                      
                                      
                                      **27,520**
                                      
                                      
                                      22,870Accrued refueling outage costs
                                      
                                      
                                      **8,974**
                                      
                                      
                                      13,180Other
                                      
                                      
                                      **8,600**
                                      
                                      
                                      8,327Total
                                      
                                      
                                      **222,531**
                                      
                                      
                                      508,725**Deferred
                                          Credits and Other Liabilities**Deferred income taxes
                                      
                                      
                                      **627,048**
                                      
                                      
                                      654,055Deferred investment tax credits
                                      
                                      
                                      **29,698**
                                      
                                      
                                      33,587Asset retirement obligations
                                      
                                      
                                      **145,907**
                                      
                                      
                                      113,674Pension liability
                                      
                                      
                                      **85,301**
                                      
                                      
                                      90,491Regulatory liabilities
                                      
                                      
                                      **69,641**
                                      
                                      
                                      4,101Derivative instruments
                                      
                                      
                                      **2,601**
                                      
                                      
                                      -Other
                                      
                                      
                                      **38,387**
                                      
                                      
                                      42,832Total
                                      
                                      
                                      **998,583**
                                      
                                      
                                      938,740**Capitalization**Common shareholder's equityCommon stock-1,000 shares authorized without
                                          par value1 share issued, stated value
                                      
                                      
                                      **887,041**
                                      
                                      
                                      887,041Retained earnings
                                      
                                      
                                      **283,850**
                                      
                                      
                                      252,893Accumulated other comprehensive loss
                                      
                                      
                                      **(29,909**
                                      **)**
                                      
                                      (40,334
                                      )Total
                                      
                                      
                                      **1,140,982**
                                      
                                      
                                      1,099,600Long-term debt (Note 19)
                                      
                                      
                                      **976,424**
                                      
                                      
                                      790,329Total
                                      
                                      
                                      **2,117,406**
                                      
                                      
                                      1,889,929**Commitments
                                          and Contingencies (Note 13)**Total
                                      
                                      **$**
                                      **3,338,520**
                                      
                                      $
                                      3,337,394The
                                          disclosures regarding KCP&L included in the accompanying Notes to
                                          Consolidated Financial Statements arean
                                          integral part of these statements.
  65
 **KANSAS
                                      CITY POWER & LIGHT COMPANY****Consolidated
                                      Statements of Cash Flows**Revised**Year
                                      Ended December 31**
                                  
                                  **2005**
                                  
                                  2004
                                  
                                  2003**Cash
                                      Flows from Operating Activities**
                                  
                                  (thousands)Net
                                      income
                                  
                                  **$**
                                  **143,657**
                                  
                                  $
                                  143,292
                                  
                                  $
                                  117,155Adjustments
                                      to reconcile income to net cash from operating
                                      activities:Depreciation and amortization
                                  
                                  
                                  **146,610**
                                  
                                  
                                  145,246
                                  
                                  
                                  140,955Amortization of:Nuclear fuel
                                  
                                  
                                  **13,374**
                                  
                                  
                                  14,159
                                  
                                  
                                  12,334Other
                                  
                                  
                                  **7,681**
                                  
                                  
                                  7,719
                                  
                                  
                                  9,350Deferred income taxes, net
                                  
                                  
                                  **(33,408**
                                  **)**
                                  
                                  10,861
                                  
                                  
                                  34,285Investment tax credit amortization
                                  
                                  
                                  **(3,889**
                                  **)**
                                  
                                  (3,984
                                  )
                                  
                                  (3,994
                                  )(Gain) loss on property
                                  
                                  
                                  **4,613**
                                  
                                  
                                  5,133
                                  
                                  
                                  (1,603
                                  )Minority interest in subsidiaries
                                  
                                  
                                  **7,805**
                                  
                                  
                                  (5,087
                                  )
                                  
                                  (1,263
                                  )Other
                                      operating activities (Note 2)
                                  
                                  
                                  **79,043**
                                  
                                  
                                  (1,080
                                  )
                                  
                                  (24,627
                                  )Net cash from operating activities
                                  
                                  
                                  **365,486**
                                  
                                  
                                  316,259
                                  
                                  
                                  282,592**Cash
                                      Flows from Investing Activities**Utility
                                      capital expenditures
                                  
                                  
                                  **(332,055**
                                  **)**
                                  
                                  (190,548
                                  )
                                  
                                  (148,675
                                  )Allowance
                                      for borrowed funds used during construction
                                  
                                  
                                  **(1,598**
                                  **)**
                                  
                                  (1,498
                                  )
                                  
                                  (1,368
                                  )Purchases
                                      of nonutility property
                                  
                                  
                                  **(127**
                                  **)**
                                  
                                  (254
                                  )
                                  
                                  (147
                                  )Proceeds
                                      from sale of assets
                                  
                                  
                                  **469**
                                  
                                  
                                  7,465
                                  
                                  
                                  4,135Purchases
                                      of nuclear decommissioning trust investments
                                  
                                  
                                  **(34,607**
                                  **)**
                                  
                                  (49,720
                                  )
                                  
                                  (111,699
                                  )Proceeds
                                      from nuclear decommissioning trust investments
                                  
                                  
                                  **31,055**
                                  
                                  
                                  46,167
                                  
                                  
                                  108,179Hawthorn
                                      No. 5 partial insurance recovery
                                  
                                  
                                  **10,000**
                                  
                                  
                                  30,810
                                  
                                  
                                  3,940Hawthorn
                                      No. 5 partial litigation settlements
                                  
                                  
                                  **-**
                                  
                                  
                                  1,139
                                  
                                  
                                  17,263Other
                                      investing activities
                                  
                                  
                                  **(930**
                                  **)**
                                  
                                  (7,100
                                  )
                                  
                                  (4,045
                                  )Net cash from investing activities
                                  
                                  
                                  **(327,793**
                                  **)**
                                  
                                  (163,539
                                  )
                                  
                                  (132,417
                                  )**Cash
                                      Flows from Financing Activities**Issuance
                                      of long-term debt
                                  
                                  
                                  **334,417**
                                  
                                  
                                  -
                                  
                                  
                                  -Repayment
                                      of long-term debt
                                  
                                  
                                  **(335,922**
                                  **)**
                                  
                                  (209,140
                                  )
                                  
                                  (124,000
                                  )Net
                                      change in short-term borrowings
                                  
                                  
                                  **32,376**
                                  
                                  
                                  (21,959
                                  )
                                  
                                  (1,867
                                  )Dividends
                                      paid to Great Plains Energy
                                  
                                  
                                  **(112,700**
                                  **)**
                                  
                                  (119,160
                                  )
                                  
                                  (98,000
                                  )Equity
                                      contribution from Great Plains Energy
                                  
                                  
                                  **-**
                                  
                                  
                                  225,000
                                  
                                  
                                  100,000Issuance
                                      fees
                                  
                                  
                                  **(4,522**
                                  **)**
                                  
                                  (2,362
                                  )
                                  
                                  (266
                                  )Net cash from financing activities
                                  
                                  
                                  **(86,351**
                                  **)**
                                  
                                  (127,621
                                  )
                                  
                                  (124,133
                                  )**Net
                                      Change in Cash and Cash Equivalents**
                                  
                                  
                                  **(48,658**
                                  **)**
                                  
                                  25,099
                                  
                                  
                                  26,042**Less:
                                    Net Change in Cash and Cash Equivalents from****Discontinued Operations**
                                  
                                  -
                                  
                                  
                                  -
                                  
                                  
                                  (307
                                  )**Cash
                                      and Cash Equivalents  at Beginning of
                                      Year**
                                  
                                  **51,619**
                                  
                                  
                                  26,520
                                  
                                  
                                  171**Cash
                                      and Cash Equivalents at End of Year**
                                  
                                  **$**
                                  **2,961**
                                  
                                  $
                                  51,619
                                  
                                  $
                                  26,520The
                                      disclosures regarding KCP&L included in the accompanying Notes to
                                      Consolidated Financial Statements are an integralpart
                                        of these statements.
  66
 **KANSAS
                                          CITY POWER & LIGHT COMPANY****Consolidated
                                          Statements of Common Shareholder's Equity****2005**
                                      
                                      2004
                                      
                                      2003**Shares**
                                      
                                      **Amount**
                                      
                                      Shares
                                      
                                      Amount
                                      
                                      Shares
                                      
                                      Amount**Common
                                          Stock**
                                      
                                      (thousands,
                                          except share amounts)Beginning
                                          balance
                                      
                                      
                                      **1**
                                      
                                      **$**
                                      **887,041**
                                      
                                      
                                      1
                                      
                                      $
                                      662,041
                                      
                                      
                                      1
                                      
                                      $
                                      562,041Equity
                                          contribution from Great Plains Energy
                                      
                                      **-**
                                      
                                      
                                      **-**
                                      
                                      
                                      -
                                      
                                      
                                      225,000
                                      
                                      
                                      -
                                      
                                      
                                      100,000Ending balance
                                      
                                      
                                      **1**
                                      
                                      
                                      **887,041**
                                      
                                      
                                      1
                                      
                                      
                                      887,041
                                      
                                      
                                      1
                                      
                                      
                                      662,041**Retained
                                          Earnings**Beginning
                                          balance
                                      
                                      
                                      
                                      
                                      
                                      **252,893**
                                      
                                      
                                      
                                      
                                      
                                      228,761
                                      
                                      
                                      
                                      
                                      
                                      209,606Net
                                          income
                                      
                                      
                                      
                                      
                                      
                                      **143,657**
                                      
                                      
                                      
                                      
                                      
                                      143,292
                                      
                                      
                                      
                                      
                                      
                                      117,155Dividends:Common stock held by Great Plains Energy
                                      
                                      **(112,700**
                                      **)**
                                      
                                      
                                      
                                      
                                      (119,160
                                      )
                                      
                                      
                                      
                                      
                                      (98,000
                                      )Ending balance
                                      
                                      **283,850**
                                      
                                      
                                      
                                      
                                      252,893
                                      
                                      
                                      
                                      
                                      228,761**Accumulated
                                          Other Comprehensive Loss**Beginning
                                          balance
                                      
                                      
                                      
                                      
                                      
                                      **(40,334**
                                      **)**
                                      
                                      
                                      
                                      
                                      (35,244
                                      )
                                      
                                      
                                      
                                      
                                      (26,614
                                      )Derivative
                                          hedging activity, net of tax
                                      
                                      
                                      
                                      
                                      
                                      **7,571**
                                      
                                      
                                      
                                      
                                      
                                      (233
                                      )
                                      
                                      
                                      
                                      
                                      (83
                                      )Minimum
                                          pension obligation, net of tax
                                      
                                      
                                      
                                      
                                      
                                      **2,854**
                                      
                                      
                                      
                                      
                                      
                                      (4,857
                                      )
                                      
                                      
                                      
                                      
                                      (8,547
                                      )Ending balance
                                      
                                      
                                      
                                      
                                      **(29,909**
                                      **)**
                                      
                                      
                                      
                                      (40,334
                                      )
                                      
                                      
                                      
                                      (35,244
                                      )**Total
                                          Common Shareholder's Equity**
                                      
                                      
                                      
                                      **$**
                                      **1,140,982**
                                      
                                      
                                      
                                      $
                                      1,099,600
                                      
                                      
                                      
                                      $
                                      855,558The
                                          disclosures regarding KCP&L included in the accompanying Notes to
                                          Consolidated Financial Statements are an
                                          integral part of thesestatements.
  67
 **KANSAS
                                          CITY POWER & LIGHT COMPANY****Consolidated
                                          Statements of Comprehensive Income****Year
                                          Ended December 31**
                                      
                                      **2005**
                                      
                                      2004
                                      
                                      2003(thousands)Net
                                          income
                                      
                                      **$**
                                      **143,657**
                                      
                                      $
                                      143,292
                                      
                                      $
                                      117,155Other
                                          comprehensive incomeGain on derivative hedging instruments
                                      
                                      
                                      **12,650**
                                      
                                      
                                      280
                                      
                                      
                                      657Income taxes
                                      
                                      
                                      **(4,759**
                                      **)**
                                      
                                      (111
                                      )
                                      
                                      (256
                                      )Net gain on derivative hedging instruments
                                      
                                      
                                      **7,891**
                                      
                                      
                                      169
                                      
                                      
                                      401Reclassification to expenses, net of tax
                                      
                                      
                                      **(320**
                                      **)**
                                      
                                      (402
                                      )
                                      
                                      (484
                                      )Derivative hedging activity, net of tax
                                      
                                      
                                      **7,571**
                                      
                                      
                                      (233
                                      )
                                      
                                      (83
                                      )Change in minimum pension obligation
                                      
                                      
                                      **5,410**
                                      
                                      
                                      (7,321
                                      )
                                      
                                      (14,012
                                      )Income taxes
                                      
                                      
                                      **(2,556**
                                      **)**
                                      
                                      2,464
                                      
                                      
                                      5,465Net change in minimum pension obligation
                                      
                                      
                                      **2,854**
                                      
                                      
                                      (4,857
                                      )
                                      
                                      (8,547
                                      )Comprehensive
                                          income
                                      
                                      **$**
                                      **154,082**
                                      
                                      $
                                      138,202
                                      
                                      $
                                      108,525The
                                          disclosures regarding KCP&L included in the accompanying Notes to
                                          Consolidated Financial Statements are anintegral
                                          part of these
                                          statements.
 68
 **GREAT
                                  PLAINS ENERGY INCORPORATED**
 **KANSAS
                                  CITY POWER & LIGHT COMPANY**
 **Notes
                                  to Consolidated Financial Statements**
  The
                                  notes
                                  to consolidated financial statements that follow
                                  are a combined presentation for
                                  Great Plains Energy Incorporated and Kansas City
                                  Power & Light Company, both
                                  registrants under this filing. The terms “Great Plains Energy,” “Company,”
“KCP&L” and “consolidated KCP&L” are used throughout this report. “Great
                                  Plains Energy” and the “Company” refer to Great Plains Energy Incorporated and
                                  its consolidated subsidiaries, unless otherwise
                                  indicated. “KCP&L” refers to
                                  Kansas City Power & Light Company, and “consolidated KCP&L” refers to
                                  KCP&L and its consolidated subsidiaries.
  **1.**
                                      **SUMMARY
                                          OF SIGNIFICANT ACCOUNTING
                                          POLICIES**  **Organization**
 Great
                                  Plains Energy, a Missouri corporation incorporated
                                  in 2001, is a public utility
                                  holding company and does not own or operate any
                                  significant assets other than
                                  the stock of its subsidiaries. Great Plains Energy
                                  has four direct subsidiaries
                                  with operations or active subsidiaries:
  ·
                                      KCP&L
                                          is an integrated, regulated electric utility
                                          that provides electricity to
                                          customers primarily in the states of Missouri
                                          and Kansas. KCP&L’s
                                          wholly owned subsidiary, Home Service Solutions
                                          Inc. (HSS) sold its wholly
                                          owned subsidiary, Worry Free Service, Inc.
                                          (Worry Free) in February 2005
                                          and completedthe
                                          disposition of its interest in R.S. Andrews
                                          Enterprises, Inc. (RSAE) in
                                          June 2003. See Note 8 for additional information
                                          concerning the June 2003
                                          disposition of RSAE.After these sales, HSS has no active
                                          operations.  ·
                                      KLT
                                          Inc. is an intermediate holding company
                                          that primarily holds, directly or
                                          indirectly, interests in Strategic Energy,
                                          L.L.C. (Strategic Energy),
                                          which provides competitive retail electricity
                                          supply services in several
                                          electricity markets offering retail choice,
                                          and affordable housing limited
                                          partnerships. KLT Inc. also wholly owns
                                          KLT Gas Inc. (KLT Gas). See Note 8
                                          for additional information regarding KLT
                                          Gas discontinued operations.  ·
                                      Innovative
                                          Energy Consultants Inc. (IEC) is an intermediate
                                          holding company that
                                          holds an indirect interest in Strategic
                                          Energy. IEC does not own or
                                          operate any assets other than its indirect
                                          interest in Strategic Energy.
                                          When combined with KLT Inc.’s indirect interest in Strategic Energy,
                                          the
                                          Company owns just under 100% of the indirect
                                          interest in Strategic
                                          Energy.  ·
                                      Great
                                          Plains Energy Services Incorporated (Services)
                                          provides services at cost
                                          to Great Plains Energy and its subsidiaries,
                                          including consolidated
                                          KCP&L.  The
                                  operations of Great Plains Energy and its subsidiaries
                                  are divided into two
                                  reportable segments, KCP&L and Strategic Energy. Great Plains Energy’s legal
                                  structure differs from the functional management
                                  and financial reporting of its
                                  reportable segments. Other activities not considered
                                  a reportable segment
                                  include the operations of HSS, Services, all KLT
                                  Inc. operations other than
                                  Strategic Energy, and holding company operations.
  **Cash
                                  and Cash Equivalents**
 Cash
                                  equivalents consist of highly liquid investments
                                  with original maturities of
                                  three months or less. For Great Plains Energy,
                                  this includes Strategic Energy’s
                                  cash held in trust of $21.9 million and
                                  $21.0 million
                                  at December 31, 2005 and 2004, respectively.
  Strategic
                                  Energy has entered into collateral arrangements
                                  with selected electricity power
                                  suppliers that require selected customers to remit
                                  payment to lockboxes that are
                                  held in trust and managed by a Trustee. As part
                                  of the trust administration, the
                                  Trustee remits payment to the supplier of electricity
  69
 purchased
                                    by Strategic Energy. On a monthly basis, any
                                    remittances into the lockboxes in
                                    excess of disbursements to the supplier are remitted
                                    back to Strategic Energy.
  **Restricted
                                  Cash**
 Strategic
                                  Energy has entered into Master Power Purchase and
                                  Sale Agreements with its power
                                  suppliers. Certain of these agreements contain
                                  provisions whereby, to the extent
                                  Strategic Energy has a net exposure to the purchased
                                  power supplier, collateral
                                  requirements are to be maintained. Collateral posted
                                  in the form of cash to
                                  Strategic Energy is restricted by agreement, but
                                  would become unrestricted in
                                  the event of a default by the purchased power supplier.
                                  Strategic Energy’s
                                  restricted cash collateral was $1.9 million
                                  and $7.7 million
                                  at December 31, 2005 and 2004, respectively.
  **Fair
                                  Value of Financial Instruments**
 The
                                  following methods and assumptions were used to
                                  estimate the fair value of each
                                  class of financial instruments for which it is
                                  practicable to estimate that
                                  value.
  *Nonutility
                                  property and investments* -
                                  Consolidated KCP&L's investments and nonutility property includes
                                  the
                                  nuclear decommissioning trust fund recorded at
                                  fair value. Fair value is based
                                  on quoted market prices of the investments held
                                  by the fund. In addition to
                                  consolidated KCP&L’s investments, Great Plains Energy’s investments and
                                  nonutility property include KLT Investments Inc.’s (KLT Investments) affordable
                                  housing limited partnerships. The fair value of
                                  KLT Investments' affordable
                                  housing limited partnership total portfolio, based
                                  on the discounted cash flows
                                  generated by tax credits, tax deductions and sale
                                  of properties, approximates
                                  book value. The fair values of other various investments
                                  are not readily
                                  determinable and the investments are therefore
                                  stated at cost.
  *Long-term
                                  debt* -
                                  The
                                  incremental borrowing rate for similar debt was
                                  used to determine fair value if
                                  quoted market prices were not available. Great
                                  Plains Energy’s and consolidated
                                  KCP&L’s book values of long-term debt were 1% below
                                  fair values at December 31, 2005.
  *Derivative
                                  instruments* - The
                                  fair value of derivative instruments is estimated
                                  using market quotes,
                                  over-the-counter forward price and volatility curves
                                  and correlation among power
                                  and fuel prices, net of estimated credit risk.
  **Derivative
                                  Instruments**
 The
                                  Company accounts for derivative instruments in
                                  accordance with Statement of
                                  Financial Accounting Standards (SFAS) No. 133,
“Accounting for Derivative
                                  Instruments and Hedging Activities,” as amended. This statement generally
                                  requires derivative instruments to be recorded
                                  on the balance sheet at fair
                                  value and establishes criteria for designation
                                  and effectiveness of hedging
                                  relationships. The Company enters into derivative
                                  contracts to manage its
                                  exposure to commodity price fluctuations and interest
                                  rate risk. Derivative
                                  instruments designated as normal purchases and
                                  normal sales (NPNS) and cash flow
                                  hedges are used solely for hedging purposes and
                                  are not issued or held for
                                  speculative reasons.
  The
                                  Company considers various qualitative factors,
                                  such as contract and market place
                                  attributes, in designating derivative instruments
                                  at inception. The Company may
                                  elect the NPNS exception, which requires the effects
                                  of the derivative to be
                                  recorded as the underlying contract settles.
  The
                                  Company accounts for derivative instruments that
                                  are not designated as NPNS as
                                  cash flow hedges or non-hedging derivatives, which
                                  are recorded as assets or
                                  liabilities on the consolidated balance sheets
                                  at fair value. At the inception
                                  of a derivative instrument, the Company designates
                                  its derivative instrument as
                                  NPNS, a cash flow hedge or a non-hedging derivative
                                  under the requirements of
                                  SFAS No. 133. In addition, if a derivative instrument
                                  is designated as a cash
                                  flow hedge, the Company
                                  documents its method of determining hedge effectiveness
                                  and measuring
                                  ineffectiveness. See Note 21 for additional information
                                  regarding derivative
                                  financial instruments and hedging activities.
 70
 **Investments
                                  in Affordable Housing Limited Partnerships**
 At
                                  December 31, 2005, KLT Investments had $28.2 million
                                  in affordable housing
                                  limited partnerships. Approximately 59% of these
                                  investments were recorded at
                                  cost; the equity method was used for the remainder.
                                  Tax expense is reduced in
                                  the year tax credits are generated. The investments
                                  generate future cash flows
                                  from tax credits and tax losses of the partnerships.
                                  The investments also
                                  generate cash flows from the sales of the properties.
                                  For most investments, tax
                                  credits are received over ten years. A change in
                                  accounting principle relating
                                  to investments made after May 19, 1995, requires the use of the equity
                                  method when a company owns more than 5% in a limited
                                  partnership investment. Of
                                  the investments recorded at cost, $16.2 million
                                  exceed this 5% level but were
                                  made before May 19, 1995. Management does not anticipate making
                                  additional investments in affordable housing limited
                                  partnerships at this
                                  time.
  On
                                  a
                                  quarterly basis, KLT Investments compares the cost
                                  of those properties accounted
                                  for by the cost method to the total of projected
                                  residual value of the
                                  properties and remaining tax credits to be received.
                                  Based on the latest
                                  comparison, KLT Investments reduced its investments
                                  in affordable housing
                                  limited partnerships by $10.0 million, $7.5 million
                                  and $11.0 million in 2005,
                                  2004 and 2003, respectively. These amounts are
                                  included in Non-operating
                                  expenses on Great Plains Energy’s consolidated statements of income. The
                                  properties underlying the partnership investments
                                  are subject to certain risks
                                  inherent in real estate ownership and management.
  **Other
                                  Nonutility Property**
 Great
                                  Plains Energy’s and consolidated KCP&L’s other nonutility property includes
                                  land, buildings, vehicles, general office equipment
                                  and software and is recorded
                                  at historical cost, net of accumulated depreciation,
                                  and has a range of
                                  estimated useful lives of 3 to 43 years .
  **Utility
                                  Plant**
 KCP&L's
                                  utility plant is stated at historical costs of
                                  construction. These costs include
                                  taxes, an allowance for the cost of borrowed and
                                  equity funds used to finance
                                  construction and payroll-related costs, including
                                  pensions and other fringe
                                  benefits. Replacements, improvements and additions
                                  to units of property are
                                  capitalized. Repairs of property and replacements
                                  of items not considered to be
                                  units of property are expensed as incurred (except
                                  as discussed under Accrued
                                  Refueling Outage Costs). When property units are
                                  retired or otherwise disposed,
                                  the original cost, net of salvage, is charged to
                                  accumulated depreciation.
                                  Substantially all utility plant is pledged as collateral
                                  for KCP&L’s
                                  mortgage bonds under the General Mortgage Indenture
                                  and Deed of Trust dated
                                  December 1, 1986, as supplemented.
  As
                                  prescribed by the Federal Energy Regulatory Commission
                                  (FERC), Allowance for
                                  Funds used During Construction (AFDC) is charged
                                  to the cost of the plant. AFDC
                                  is included in the rates charged to customers by
                                  KCP&L over the service life
                                  of the property. AFDC equity funds are included
                                  as a non-cash item in
                                  non-operating income and AFDC borrowed funds are
                                  a reduction of interest
                                  charges. The rates used to compute gross AFDC are
                                  compounded semi-annually and
                                  averaged 7.1% in 2005,
                                  8.6% in 2004 and 8.2% in 2003 .
 71
 The
                                  balances of utility plant, at original cost, with
                                  a range of estimated useful
                                  lives are listed in the following table .
 **December
                                            31**
                                        
                                        **2005**
                                        
                                        **2004**Utility
                                            Plant, at original cost
                                        
                                        (millions)Production (23 - 42 years)
                                        
                                        $
                                        2,970.1
                                        
                                        $
                                        2,938.5Transmission (27 - 76 years)
                                        
                                        
                                        331.2
                                        
                                        
                                        315.5Distribution (8 - 75 years)
                                        
                                        
                                        1,377.3
                                        
                                        
                                        1,320.0General (5 - 50 years)
                                        
                                        
                                        280.9
                                        
                                        
                                        267.4Total(a)
                                        
                                        $
                                        4,959.5
                                        
                                        $
                                        4,841.4(a)Includes $80.4 million and $66.6 million
                                            of land and other assets forwhich depreciation was not recorded in
                                            2005 and 2004,
                                            respectively.
 **Depreciation,
                                  Depletion and Amortization**
 Depreciation
                                  and amortization of KCP&L’s utility plant other than nuclear fuel is
                                  computed using the straight-line method over the
                                  estimated lives of depreciable
                                  property based on rates approved by state regulatory
                                  authorities. Annual
                                  depreciation rates average approximately 3% .
                                  Nuclear
                                  fuel is amortized to fuel expense based on the
                                  quantity of heat produced during
                                  the generation of electricity.
  Depreciation
                                  of nonutility property is computed using the straight-line
                                  method. Consolidated
                                  KCP&L’s nonutility property annual depreciation rates
                                  for 2005, 2004 and
                                  2003 were 11.2%, 11.8% and 11.1% ,
                                  respectively. Other Great Plains Energy nonutility
                                  property annual depreciation
                                  rates for 2005, 2004 and 2003 were 20.4% ,
                                  24.2%
                                  and 21.2% ,
                                  respectively. Other Great Plains Energy’s nonutility property includes Strategic
                                  Energy’s depreciable assets, which are primarily software
                                  costs and are
                                  amortized over a shorter period, three years, resulting
                                  in a higher annual
                                  depreciation rate.
  As
                                  part
                                  of the 2004 acquisition of an additional interest
                                  in Strategic Energy, IEC
                                  recorded intangible assets that have finite lives
                                  and are subject to
                                  amortization. These intangible assets include the
                                  fair value of acquired supply
                                  contracts, customer relationships and asset information
                                  systems, which are being
                                  amortized over 28, 72 and 44 months, respectively.
                                  See Note 7 for additional
                                  discussion of the May 2004 acquisition of an additional
                                  indirect interest in
                                  Strategic Energy.
  Depletion,
                                  depreciation and amortization of natural gas properties
                                  were calculated using
                                  the units of production method. After deciding
                                  to exit the gas business, the
                                  Company ceased recording depletion and as such,
                                  there was no significant
                                  depletion recorded since 2003. The depletion per
                                  mmBtu was $2.78 in
                                  2003.
  **Accrued
                                  Refueling Outage Costs**
 KCP&L
                                  accrues anticipated incremental costs to be incurred
                                  during scheduled Wolf Creek
                                  refueling outages monthly over the unit's operating
                                  cycle, normally the 18
                                  months preceding the outage. Estimated incremental
                                  costs, which include
                                  operating, maintenance and replacement power expenses,
                                  are based on anticipated
                                  outage costs and the estimated outage duration.
                                  Changes to or variances from
                                  those estimates are recorded when known or are
                                  probable.
  **Nuclear
                                  Plant Decommissioning Costs**
 Nuclear
                                  plant decommissioning cost estimates are based
                                  on the immediate dismantlement
                                  method and include the costs of decontamination,
                                  dismantlement and site
                                  restoration. Based on these cost estimates, KCP&L contributes to a
                                  tax-qualified trust fund to be used to decommission
                                  Wolf Creek. Related
                                  liabilities for decommissioning are included on
                                  KCP&L’s balance sheet in
                                  Asset Retirement Obligations (AROs). As a result
                                  of the authorized regulatory
                                  treatment and related regulatory accounting, differences
                                  between the
                                  decommissioning trust fund asset and the related
                                  ARO are recorded
                                  as a regulatory asset or liability. See Note 16
                                  for discussion of AROs including
                                  those associated with nuclear plant decommissioning
                                  costs.
 72
 **Regulatory
                                  Matters**
 KCP&L,
                                  an integrated, regulated electric utility, is subject
                                  to the provisions of SFAS
                                  No. 71, “Accounting for the Effects of Certain Types of
                                  Regulation.” Pursuant to
                                  SFAS No. 71, KCP&L defers items on the balance sheet resulting from
                                  the
                                  effects of the ratemaking process, which would
                                  not be recorded if KCP&L were
                                  not regulated. See Note 5 for additional information
                                  concerning regulatory
                                  matters.
  **Revenue
                                  Recognition**
 KCP&L
                                  and Strategic Energy recognize revenues on sales
                                  of electricity when the service
                                  is provided. Revenues recorded include electric
                                  services provided but not yet
                                  billed by KCP&L and Strategic Energy. Unbilled revenues are recorded
                                  for kWh
                                  usage in the period following the customers’ billing cycle to the end of the
                                  month. The estimate is based on net system kWh
                                  usage less actual billed kWhs,
                                  adjusted for weather. Estimated unbilled kWhs are
                                  allocated and priced by state
                                  across the rate classes based on the following
                                  month budget.
  As
                                  a
                                  public utility, KCP&L collects from customers gross receipts taxes
                                  levied by
                                  state and local governments. These taxes are recorded
                                  gross in operating
                                  revenues and general taxes on Great Plains Energy’s and consolidated KCP&L’s
                                  consolidated statements of income. KCP&L’s gross receipts taxes collected
                                  were $39.3 million, $37.6 million and $38.3 million
                                  in 2005, 2004 and 2003,
                                  respectively.
  Strategic
                                  Energy purchases blocks of electricity from power
                                  suppliers based on forecasted
                                  peak demand for its retail customers. Actual customer
                                  demand does not always
                                  equate to the volume included in blocks of purchased
                                  power. Consequently,
                                  Strategic Energy sells any excess retail electricity
                                  supply over actual customer
                                  requirements back into the wholesale market. The
                                  proceeds from excess retail
                                  supply sales are recorded as a reduction of purchased
                                  power, as they do not
                                  represent the quantity of electricity consumed
                                  by Strategic Energy’s customers.
                                  The amount of excess retail supply sales that reduced
                                  purchased power was $181.2
                                  million, $173.3 million and $91.2 million in
                                  2005,
                                  2004 and 2003, respectively.
  KCP&L
                                  and Strategic Energy record sale and purchase activity
                                  on a net basis in
                                  purchased power when RTO/ISO markets require them
                                  to sell and purchase power
                                  from the RTO/ISO rather than directly transact
                                  with suppliers and end-use
                                  customers.
  **Allowance
                                  for Doubtful Accounts**
 This
                                  reserve represents estimated uncollectible accounts
                                  receivable and is based on
                                  management’s judgment considering historical loss experience
                                  and the
                                  characteristics of existing accounts. Provisions
                                  for losses on receivables are
                                  charged to income to maintain the allowance at
                                  a level considered adequate to
                                  cover losses. Receivables are charged off against
                                  the reserve when they are
                                  deemed uncollectible.
  **Property
                                  Gains and Losses**
 Net
                                  gains
                                  and losses from the sales of assets, businesses
                                  and asset impairments are
                                  recorded in operating expenses.
  **Asset
                                  Impairments**
 Long-lived
                                  assets and finite lived intangible assets subject
                                  to amortization are
                                  periodically reviewed for impairment whenever events
                                  or changes in circumstances
                                  indicate that the carrying amount of an asset may
                                  not be recoverable as
                                  prescribed under SFAS No. 144, “Accounting for the Impairment or Disposal of
                                  Long-lived Assets.” SFAS No. 144 requires that if the sum of the undiscounted
                                  expected future cash flows
                                  from an asset to be held and used is less than
                                  the carrying value of the asset,
                                  an asset impairment must be recognized in the financial
                                  statements. The amount
                                  of impairment recognized is the excess of the carrying
                                  value of the asset over
                                  its fair value.
 73
 Goodwill
                                  and indefinite lived intangible assets are tested
                                  for impairment at least
                                  annually and more frequently when indicators of
                                  impairment exist as prescribed
                                  under SFAS No. 142, “Goodwill and Other Intangible Assets.” The annual test must
                                  be performed at the same time each year. SFAS No.
                                  142 requires that if the fair
                                  value of a reporting unit is less than its carrying
                                  value including goodwill, an
                                  impairment charge for goodwill must be recognized
                                  in the financial statements.
                                  To measure the amount of the impairment loss to
                                  recognize, the implied fair
                                  value of the reporting unit goodwill would be compared
                                  with its carrying value.
                                  See Note 6 for additional information.
  **Income
                                  Taxes**
 In
                                  accordance with SFAS No. 109, “Accounting for Income Taxes,” Great Plains Energy
                                  has recognized deferred taxes for temporary book
                                  to tax differences using the
                                  liability method. The liability method requires
                                  that deferred tax balances be
                                  adjusted to reflect enacted tax rates that are
                                  anticipated to be in effect when
                                  the temporary differences reverse. Deferred tax
                                  assets are reduced by a
                                  valuation allowance when, in the opinion of management,
                                  it is more likely than
                                  not that some portion of the deferred tax assets
                                  will not be
                                  realized.
  Great
                                  Plains Energy and its subsidiaries file consolidated
                                  federal and combined and
                                  separate state income tax returns. Income taxes
                                  for consolidated or combined
                                  subsidiaries are allocated to the subsidiaries
                                  based on separate company
                                  computations of income or loss. In accordance with
                                  the Company’s intercompany
                                  tax allocation agreement, the holding company also
                                  allocates its own net income
                                  tax benefits to its direct subsidiaries based on
                                  the positive taxable income of
                                  each company in the consolidated federal or combined
                                  state returns. Consistent
                                  with its ratemaking treatment, KCP&L uses the separate return method,
                                  adjusted for the allocation of parent company tax
                                  benefits, to compute its
                                  income tax provision.
  KCP&L
                                  has established a net regulatory asset for the
                                  additional future revenues to be
                                  collected from customers for deferred income taxes.
                                  Tax credits are recognized
                                  in the year generated except for certain KCP&L investment tax credits that
                                  have been deferred and amortized over the remaining
                                  service lives of the related
                                  properties.
  **Environmental
                                  Matters**
 Environmental
                                  costs are accrued when it is probable a liability
                                  has been incurred and the
                                  amount of the liability can be reasonably estimated.
  **Stock
                                  Options**
 The
                                  Company has an equity compensation plan, which
                                  is described more fully in Note
                                  10. The Company adopted the fair value recognition
                                  provisions of SFAS No. 123,
“Accounting for Stock-Based Compensation,” for its stock options as of January
                                  1, 2003. The Company elected to use the modified
                                  prospective method of adoption;
                                  therefore, stock option compensation cost recognized
                                  beginning January 1, 2003,
                                  was the same as if the fair value recognition provisions
                                  of SFAS No. 123 had
                                  been applied to all stock options granted after
                                  October 1, 1995.
  In
                                  December 2004, FASB issued SFAS No. 123 (revised
                                  2004), “Share-Based Payment,”
which the Company adopted as of January 1, 2006.
                                  Management determined that this
                                  statement will not have a significant impact on
                                  the Company’s results of
                                  operations or financial position.
  **Basic
                                      and Diluted Earnings per Common Share Calculation**
 There
                                      was
                                      no significant dilutive effect on Great Plains
                                      Energy’s EPS from other
                                      securities in 2005, 2004 and 2003. To determine
                                      basic EPS, preferred stock
                                      dividend requirements are deducted from income
                                      from continuing operations and
                                      net income before dividing by average number
                                      of common shares outstanding. The
                                      earnings (loss) per share impact of discontinued
                                      operations, net of income
                                      taxes, is determined by dividing discontinued
                                      operations, net of income taxes,
                                      by the average number of common shares outstanding.
                                      The effect of dilutive
                                      securities, calculated using the treasury stock
 74
 method,
                                  assumes the issuance of common shares applicable
                                  to stock options, performance
                                  shares and FELINE PRIDES.
  The
                                  following table reconciles
                                  Great Plains Energy’s basic and diluted EPS from continuing
                                  operations.
 **2005**
                                        
                                        **2004**
                                        
                                        **2003****Income**
                                        (millions,
                                            except per share amounts)Income
                                            from continuing operations
                                        $
                                        164.2
                                        
                                        $
                                        173.5
                                        
                                        $
                                        189.7Less:
                                            preferred stock dividend requirements
                                        
                                        1.6
                                        
                                        
                                        1.6
                                        
                                        
                                        1.6Income
                                            available to common stockholders
                                        $
                                        162.6
                                        
                                        $
                                        171.9
                                        
                                        $
                                        188.1**Common
                                            Shares Outstanding**Average
                                            number of common shares outstanding
                                        
                                        74.6
                                        
                                        
                                        72.0
                                        
                                        
                                        69.2Add:
                                            effect of dilutive securities
                                        
                                        0.1
                                        
                                        
                                        0.1
                                        
                                        
                                        -Diluted
                                            average number of common shares outstanding
                                        
                                        74.7
                                        
                                        
                                        72.1
                                        
                                        
                                        69.2**Basic
                                            and diluted EPS from continuing operations**
                                        $
                                        2.18
                                        
                                        $
                                        2.39
                                        
                                        $
                                        2.72
 At
                                  December 31, 2005, there were 20,493 anti-dilutive shares applicable to performance
                                  shares. At December 31, 2004 and
                                  2003, there were no anti-dilutive shares applicable to stock options,
                                  performance shares or FELINE
                                  PRIDES.
  In
                                  February 2006, the Board of Directors declared
                                  a quarterly dividend of $0.415
                                  per share on Great Plains Energy’s common stock. The common dividend is payable
                                  March 20, 2006, to shareholders of record as of February
                                  27, 2006. The
                                  Board of Directors also declared regular dividends
                                  on Great Plains Energy’s
                                  preferred stock, payable June 1, 2006, to shareholders
                                  of record as of May 10,
                                  2006.
 75
  **2.**
                                      **SUPPLEMENTAL
                                          CASH FLOW INFORMATION**
 ***Great
                                            Plains Energy Other Operating Activities*****2005**
                                        **2004**
                                        **2003**Cash
                                            flows affected by changes in:
                                        
                                        (millions)Receivables
                                        
                                        $
                                        6.6
                                        
                                        $
                                        (37.5
                                        )
                                        $
                                        (15.6
                                        )Fuel inventories
                                        
                                        
                                        4.9
                                        
                                        
                                        1.8
                                        
                                        
                                        (0.8
                                        )Materials and supplies
                                        
                                        
                                        (2.6
                                        )
                                        
                                        2.2
                                        
                                        
                                        (5.8
                                        )Accounts payable
                                        
                                        
                                        12.4
                                        
                                        
                                        9.6
                                        
                                        
                                        17.0Accrued taxes
                                        
                                        
                                        (23.1
                                        )
                                        
                                        15.3
                                        
                                        
                                        25.5Accrued interest
                                        
                                        
                                        1.6
                                        
                                        
                                        (1.0
                                        )
                                        
                                        (4.5
                                        )Accrued
                                            refueling outage costs
                                        
                                        
                                        (4.2
                                        )
                                        
                                        11.4
                                        
                                        
                                        (6.5
                                        )Pension
                                            and postretirement benefit assets and
                                            obligations
                                        
                                        
                                        8.4
                                        
                                        
                                        (10.4
                                        )
                                        
                                        (20.6
                                        )Allowance
                                            for equity funds used during construction
                                        
                                        
                                        (1.8
                                        )
                                        
                                        (2.1
                                        )
                                        
                                        (1.4
                                        )Proceeds
                                            from the sale of SO2emission allowances
                                        
                                        
                                        61.0
                                        
                                        
                                        0.3
                                        
                                        
                                        0.2Proceeds
                                            from T-Locks
                                        
                                        
                                        12.0
                                        
                                        
                                        -
                                        
                                        
                                        -Other
                                        
                                        
                                        17.7
                                        
                                        
                                        (8.5
                                        )
                                        
                                        33.4Total other operating activities
                                        
                                        $
                                        92.9
                                        
                                        $
                                        (18.9
                                        )
                                        $
                                        20.9Cash
                                            paid during the period:Interest
                                        
                                        $
                                        68.9
                                        
                                        $
                                        84.1
                                        
                                        $
                                        78.0Income taxes
                                        
                                        $
                                        84.4
                                        
                                        $
                                        38.6
                                        
                                        $
                                        42.4
 ***Consolidated
                                            KCP&L Other Operating Activities*****2005**
                                        **2004**
                                        **2003**Cash
                                            flows affected by changes in:
                                        
                                        (millions)Receivables
                                        
                                        $
                                        (8.5
                                        )
                                        $
                                        1.6
                                        
                                        $
                                        (2.9
                                        )Fuel inventories
                                        
                                        
                                        4.9
                                        
                                        
                                        1.8
                                        
                                        
                                        (0.8
                                        )Materials and supplies
                                        
                                        
                                        (2.6
                                        )
                                        
                                        2.2
                                        
                                        
                                        (5.8
                                        )Accounts payable
                                        
                                        
                                        16.3
                                        
                                        
                                        1.8
                                        
                                        
                                        7.8Accrued taxes
                                        
                                        
                                        (17.2
                                        )
                                        
                                        (6.6
                                        )
                                        
                                        (2.8
                                        )Accrued interest
                                        
                                        
                                        1.7
                                        
                                        
                                        (2.0
                                        )
                                        
                                        (3.7
                                        )Accrued
                                            refueling outage costs
                                        
                                        
                                        (4.2
                                        )
                                        
                                        11.4
                                        
                                        
                                        (6.5
                                        )Pension
                                            and postretirement benefit assets and
                                            obligations
                                        
                                        
                                        4.6
                                        
                                        
                                        (8.0
                                        )
                                        
                                        (20.3
                                        )Allowance
                                            for equity funds used during construction
                                        
                                        
                                        (1.8
                                        )
                                        
                                        (2.1
                                        )
                                        
                                        (1.4
                                        )Proceeds
                                            from the sale of SO2emission allowances
                                        
                                        
                                        61.0
                                        
                                        
                                        0.3
                                        
                                        
                                        0.2Proceeds
                                            from T-Locks
                                        
                                        
                                        12.0
                                        
                                        
                                        -
                                        
                                        
                                        -Other
                                        
                                        
                                        12.8
                                        
                                        
                                        (1.5
                                        )
                                        
                                        11.6Total other operating activities
                                        
                                        $
                                        79.0
                                        
                                        $
                                        (1.1
                                        )
                                        $
                                        (24.6
                                        )Cash
                                            paid during the period:Interest
                                        
                                        $
                                        57.6
                                        
                                        $
                                        73.8
                                        
                                        $
                                        71.4Income taxes
                                        
                                        $
                                        104.1
                                        
                                        $
                                        64.9
                                        
                                        $
                                        68.1
 76
 **Discontinued
                                      Operations**
 In
                                      2005,
                                      the companies changed the presentation of their
                                      consolidated statements of cash
                                      flows to include the cash flows from operating,
                                      investing and financing
                                      activities of discontinued operations within
                                      the respective categories of
                                      operating, investing and financing activities
                                      and retroactively revised the
                                      consolidated statements of cash flows for the
                                      years ended December 31, 2004 and
                                      2003, as applicable.
 **Great
                                                    Plains Energy**
                                                
                                                **2004**
                                                
                                                **2003**(millions)Net
                                                    cash flows from operating activities
                                                    as previously
                                                    reported
                                                
                                                $
                                                377.1
                                                
                                                $
                                                366.7Change
                                                    in net cash flows
                                                
                                                
                                                (23.0
                                                )
                                                
                                                20.4Net
                                                    cash flows from operating activities
                                                    as currently reported
                                                
                                                
                                                354.1
                                                
                                                
                                                387.1Net
                                                    cash flows from investing activities
                                                    as previously
                                                    reported
                                                
                                                
                                                (257.9
                                                )
                                                
                                                (104.3
                                                )Change
                                                    in net cash flows
                                                
                                                
                                                23.5
                                                
                                                
                                                (18.7
                                                )Net
                                                    cash flows from investing activities
                                                    as currently reported
                                                
                                                
                                                (234.4
                                                )
                                                
                                                (123.0
                                                )Net
                                                    cash flows from financing activities
                                                    as previously
                                                    reported
                                                
                                                
                                                (106.3
                                                )
                                                
                                                (213.7
                                                )Change
                                                    in net cash flows
                                                
                                                
                                                -
                                                
                                                
                                                (1.5
                                                )Net
                                                    cash flows from financing activities
                                                    as currently reported
                                                
                                                $
                                                (106.3
                                                )
                                                $
                                                (215.2
                                                )
 **Consolidated
                                                    KCP&L**
                                                
                                                **2003**(millions)Net
                                                    cash flows from operating activities
                                                    as previously
                                                    reported
                                                
                                                $
                                                281.4Change
                                                    in net cash flows
                                                
                                                
                                                1.2Net
                                                    cash flows from operating activities
                                                    as currently reported
                                                
                                                
                                                282.6Net
                                                    cash flows from investing activities
                                                    as previously
                                                    reported
                                                
                                                
                                                (132.4
                                                )Change
                                                    in net cash flows
                                                
                                                
                                                -Net
                                                    cash flows from investing activities
                                                    as currently reported
                                                
                                                
                                                (132.4
                                                )Net
                                                    cash flows from financing activities
                                                    as previously
                                                    reported
                                                
                                                
                                                (122.6
                                                )Change
                                                    in net cash flows
                                                
                                                
                                                (1.5
                                                )Net
                                                    cash flows from financing activities
                                                    as currently reported
                                                
                                                $
                                                (124.1
                                                )
 **Significant
                                          Non-Cash Items**
 ***Asset
                                          Retirement Obligations***
 During
                                          2005, KCP&L recorded AROs totaling $26.7 million,
                                          increased net utility
                                          plant by $13.0 million and increased regulatory
                                          assets by $13.7 million. This
                                          activity had no impact on Great Plains
                                          Energy and consolidated KCP&L’s 2005
                                          net income and had no effect on 2005 cash
                                          flows. See Note 16 for additional
                                          information.
  During
                                          2003, KCP&L adopted SFAS No. 143, “Accounting for Asset Retirement
                                          Obligation,” and accordingly, recorded AROs totaling
                                          $99.2 million, reversed the
                                          decommissioning liability of $64.6 million
                                          previously accrued and increased net
                                          utility plant by $18.3 million. The $16.3
                                          million net cumulative effect was
                                          recorded as a regulatory asset and therefore,
                                          had no impact on net income. The
                                          adoption of SFAS No. 143 had no effect
                                          on Great Plains Energy and consolidated
                                          KCP&L’s 2003 cash flows.
  ***FIN
                                          No. 46***
 KCP&L
                                          consolidated a lease trust and de-consolidated
                                          KCPL Financing I in 2003, as
                                          required by FASB Interpretation (FIN) No.
                                          46, “Consolidation of Variable
                                          Interest Entities,” as amended. As a result of the consolidation
                                          of the lease
                                          trust, Great Plains Energy’s and consolidated KCP&L’s long-term debt
                                          increased $143.8 million. The consolidation
                                          of the lease trust had no effect on
                                          Great Plains Energy’s and consolidated KCP&L’s 2003 cash flows. See Note 13
                                          for additional information concerning the
                                          consolidation of the lease
                                          trust.
 77
 Prior
                                          to
                                          the de-consolidation of KCPL Financing
                                          I, Great Plains Energy and consolidated
                                          KCP&L reflected $150 million of 8.3% preferred
                                          securities issued by KCPL
                                          Financing I on their respective balance
                                          sheets. As a result of the
                                          de-consolidation, Great Plains Energy’s and consolidated KCP&L’s other
                                          nonutility property and investments increased
                                          $4.6 million representing the
                                          investment in the common securities of
                                          KCPL Financing I, and long-term debt
                                          increased $154.6 million representing the
                                          8.3% Junior Subordinated Deferrable
                                          Interest Debentures issued by KCP&L and held by KCPL Financing I. The
                                          de-consolidation of KCPL Financing I had
                                          no effect on Great Plains Energy’s and
                                          consolidated KCP&L’s 2003 cash flows.
  ***Minimum
                                          Pension Liability***
 The
                                          Company reduced its minimum pension liability
                                          $9.9 million primarily due to an
                                          increase in the market value of plan assets.
                                          This was offset by a $1.2 million
                                          reduction of an intangible asset and OCI
                                          of $8.7 million ($4.9 million net
                                          of
                                          tax) in 2005. In 2004, primarily as a result
                                          of lower discount rates and
                                          historical losses in the market value of
                                          plan assets, the Company recorded an
                                          additional minimum pension liability of
                                          $5.8 million and a reduction to an
                                          intangible asset of $1.8 million offset
                                          by OCI of $7.6 million ($5.1 million net
                                          of tax). Recording the minimum pension
                                          liabilities had no effect on Great Plains
                                          Energy’s and consolidated KCP&L’s cash flows.
  ***RSAE
                                          Disposition***
 In
                                          2003,
                                          HSS completed the disposition of its interest
                                          in RSAE. See Note 8 for additional
                                          information concerning the disposition
                                          of RSAE. The following table summarizes
                                          Great Plains Energy’s and consolidated KCP&L’s loss from discontinued
                                          operations as a result of this transaction.
 **2003**(millions)Cash
                                                    repayment of supported bank line
                                                $
                                                (22.1
                                                )Write-off
                                                    of intercompany balance and investment
                                                
                                                4.8Accrued
                                                    transaction costs
                                                
                                                (1.6
                                                )Income
                                                    tax benefit
                                                
                                                11.8Loss
                                                    on disposition
                                                
                                                (7.1
                                                )Pre-disposition
                                                    operating losses
                                                
                                                (1.6
                                                )Discontinued
                                                    operations
                                                $
                                                (8.7
                                                )
 ***DTI
                                        Bankruptcy***
 The
                                        following table summarizes Great Plains Energy’s gain on the sale of DTI assets.
                                        See Note 15 for a KLT Telecom related legal
                                        proceeding.
  **DTI**
                                              **2003**(millions)Cash
                                                  proceeds from bankruptcy estates
                                              $
                                              19.2Cash
                                                  proceeds from sale of office building
                                              
                                              1.2Receivables
                                              
                                              1.3Total
                                                  proceeds
                                              
                                              21.7Book
                                                  basis of office building sold
                                              
                                              (2.7
                                              )DIP
                                                  financing accrual reversal
                                              
                                              5.0Accounts
                                                  payable
                                              
                                              (1.9
                                              )Income
                                                  tax
                                              
                                              (9.8
                                              )Reversal
                                                  of tax valuation allowance
                                              
                                              15.8Gain
                                                  on sale of assets
                                              $
                                              28.1
 78
  **3.**
                                            **RECEIVABLES**  The
                                        Company’s receivables are detailed in the following
                                        table .
 **December
                                                  31****2005**
                                              **2004****Consolidated
                                                  KCP&L**
                                              (millions)Customer
                                                  accounts receivable(a)
                                              $
                                              34.0
                                              
                                              $
                                              21.6Allowance
                                                  for doubtful accounts
                                              
                                              (1.0
                                              )
                                              
                                              (1.7
                                              )Other
                                                  receivables
                                              
                                              37.3
                                              
                                              
                                              43.5Consolidated KCP&L receivables
                                              
                                              70.3
                                              
                                              
                                              63.4**Other
                                                  Great Plains Energy**Other
                                                  receivables
                                              
                                              193.0
                                              
                                              
                                              188.5Allowance
                                                  for doubtful accounts
                                              
                                              (4.3
                                              )
                                              
                                              (4.7
                                              )Great Plains Energy receivables
                                              $
                                              259.0
                                              
                                              $
                                              247.2(a)Customer
                                                  accounts receivable included unbilled
                                                  receivables of $31.4million
                                                  and $31.2 million at December 31,
                                                  2005 and 2004,
                                                  respectively.
 Consolidated
                                        KCP&L’s other receivables at December 31, 2005,
                                        consisted primarily of
                                        receivables from partners in jointly owned
                                        electric utility plants and wholesale
                                        sales receivables. At December 31, 2004,
                                        the balance consisted primarily of
                                        receivables from partners in jointly owned
                                        electric utility plants, wholesale
                                        sales receivables and accounts receivable
                                        held by Worry Free. Great Plains
                                        Energy’s other receivables at December 31, 2005,
                                        and December 31, 2004,
                                        consisted primarily of accounts receivable
                                        held by Strategic Energy, including
                                        unbilled receivables of $99.9 million and
                                        $103.0 million,
                                        respectively.
  During
                                        2005, KCP&L entered into a new three-year revolving
                                        agreement to sell all of
                                        its retail electric accounts receivable to
                                        its wholly owned subsidiary, Kansas
                                        City Power & Light Receivables Company (Receivables Company),
                                        which in turn
                                        sold an undivided percentage ownership interest
                                        in the accounts receivable to
                                        Victory Receivables Corporation, an independent
                                        outside investor. In accordance
                                        with SFAS No. 140, “Accounting for Transfers and Servicing of
                                        Financial Assets
                                        and Extinguishment of Liabilities,” the agreements qualify as a sale under which
                                        the creditors of Receivables Company are
                                        entitled to be satisfied out of the
                                        assets of Receivables Company prior to any
                                        value being returned to KCP&L or
                                        its creditors. Accounts receivable sold by
                                        Receivables Company to the outside
                                        investor under this revolving agreement totaled
                                        $70 million
                                        at December 31, 2005. The proceeds of this sale were
                                        forwarded to KCP&L
                                        as consideration for its sale. The new agreement
                                        allows for a maximum
                                        outstanding principal amount sold to the
                                        outside investor of $100 million during
                                        the period June 1 through October 31, and
                                        $70 million during the period November
                                        1 through May 31 of each year.
  Under
                                        the
                                        agreement, KCP&L sells its receivables at a fixed price
                                        based upon the
                                        expected cost of funds and charge-offs. These
                                        costs comprise KCP&L’s loss on
                                        the sale of accounts receivable. KCP&L services the receivables and receives
                                        an annual servicing fee of 2.5% of the outstanding
                                        principal amount of the
                                        receivables sold to Receivables Company.
                                        KCP&L does not recognize a
                                        servicing asset or liability since management
                                        determined the collection agent
                                        fee earned by KCP&L approximates market value.
 79
 Information
                                        regarding KCP&L’s sale of accounts receivable to Receivables
                                        Company under
                                        the new agreement is reflected in the following
                                        table .
 **Receivables**
                                          **Consolidated****2005**
                                          **KCP&L**
                                          **Company**
                                          **KCP&L**(millions)Receivables
                                              (sold) purchased
                                          $
                                          (605.8
                                          )
                                          $
                                          535.8
                                          
                                          $
                                          (70.0
                                          )Collections
                                          
                                          499.3
                                          
                                          
                                          (499.3
                                          )
                                          
                                          -(Gain)
                                              loss on sale of accounts receivable(a)
                                          
                                          6.0
                                          
                                          
                                          (5.0
                                          )
                                          
                                          1.0Servicing
                                              fees
                                          
                                          1.4
                                          
                                          
                                          (1.4
                                          )
                                          
                                          -Fees
                                              to outside investor
                                          
                                          -
                                          
                                          
                                          (1.5
                                          )
                                          
                                          (1.5
                                          )**Cash
                                              flows during the period**Cash
                                              proceeds from sale of receivables(b)
                                          $
                                          569.3
                                          
                                          $
                                          (499.3
                                          )
                                          $
                                          70.0Servicing
                                              fees
                                          
                                          1.4
                                          
                                          
                                          (1.4
                                          )
                                          
                                          -(a)The
                                              net loss is the result of the timing
                                              difference inherent in collecting
                                              receivables and overthe
                                              life of the agreement will net to zero.(b)During 2005, Receivables Company received
                                              $70 million cash from the
                                              outside investorfor
                                              the sale of accounts receivable, which
                                              was then forwarded to KCP&L for
                                              considerationof
                                              its sale.
 KCP&L had
                                        a
                                        revolving agreement, which expired in January
                                        2005, to sell all of its right,
                                        title and interest in the majority of its
                                        customer accounts receivable to
                                        Receivables Company, which in turn sold most
                                        of the receivables to independent
                                        outside investors. The expired agreement
                                        was structured as a true sale under
                                        which the creditors of Receivables Company
                                        were entitled to be satisfied out of
                                        the assets of Receivables Company prior to
                                        any value being returned to KCP&L
                                        or its creditors. Accounts receivable sold
                                        under the expired revolving agreement
                                        totaled $84.9 million at December 31, 2004.
                                        As a result of the sale to the
                                        outside investors, Receivables Company received
                                        up to $70 million in cash, which
                                        was forwarded to KCP&L as consideration for its sale. At December 31,
                                        2004, Receivables Company had received $65.0
                                        million in cash.
  Information
                                        regarding KCP&L’s sale of accounts receivable to Receivables
                                        Company under
                                        the expired agreement is reflected in the
                                        following table .
 **2005**
                                              **2004**
                                              **2003**Gross
                                                  proceeds on sale of
                                              (millions)accounts receivable
                                              $
                                              46.1
                                              
                                              $
                                              929.1
                                              
                                              $
                                              939.5Collections
                                              
                                              44.3
                                              
                                              
                                              928.0
                                              
                                              
                                              949.5Loss
                                                  on sale of accounts receivable
                                              
                                              -
                                              
                                              
                                              2.5
                                              
                                              
                                              3.7Late
                                                  fees
                                              
                                              0.1
                                              
                                              
                                              2.2
                                              
                                              
                                              2.3
 **4.**
                                            **NUCLEAR
                                                PLANT**  KCP&L
                                        owns 47% of Wolf Creek Nuclear Operating
                                        Corporation (WCNOC), the operating
                                        company for Wolf Creek Generating Station
                                        (Wolf Creek), its only nuclear
                                        generating unit. Wolf Creek is regulated
                                        by the Nuclear Regulatory Commission
                                        (NRC), with respect to licensing, operations
                                        and safety-related requirements.
  **Spent
                                        Nuclear Fuel and Radioactive Waste**
 Under
                                        the
                                        Nuclear Waste Policy Act of 1982, the Department
                                        of Energy (DOE) is responsible
                                        for the permanent disposal of spent nuclear
                                        fuel. KCP&L pays the DOE a
                                        quarterly fee of one-tenth of a cent for
                                        each kilowatt-hour of net nuclear
                                        generation delivered and sold for the future
                                        disposal of spent nuclear
                                        fuel. These disposal costs are charged to
                                        fuel expense. In 2002, the U.S. Senate
                                        approved
 80
 Yucca
                                        Mountain, Nevada as a long-term geologic
                                        repository. The DOE is currently in the
                                        process of preparing an application to obtain
                                        the NRC license to proceed with
                                        construction of the repository. Management
                                        cannot predict when this site may be
                                        available. Under current DOE policy, once
                                        a permanent site is available, the DOE
                                        will accept spent nuclear fuel first from
                                        the owners with the oldest spent fuel.
                                        Wolf Creek has completed an on-site storage
                                        facility that is designed to hold
                                        all spent fuel generated at the plant through
                                        the end of its 40-year licensed
                                        life in 2025. See Note 15 for a related legal
                                        proceeding.
  **Nuclear
                                        Plant Decommissioning Costs**
 The
                                        Public Service Commission of the State of
                                        Missouri (MPSC) and The State
                                        Corporation Commission of the State of Kansas
                                        (KCC) require KCP&L and the
                                        other owners of Wolf Creek to submit an updated
                                        decommissioning cost study every
                                        three years and to propose funding levels.
                                        The most recent study was submitted
                                        to the MPSC and KCC in 2005 and is the basis
                                        for the current cost of
                                        decommissioning estimates in the following
                                        table. The MPSC issued an order
                                        effective January 20, 2006, continuing the
                                        Missouri jurisdictional funding at
                                        the previously ordered level. The MPSC order
                                        did not explicitly approve or
                                        disapprove the 2005 decommissioning cost
                                        study submitted by KCP&L. The KCC
                                        has not yet ruled on the study but has set
                                        a procedural schedule in 2006 to
                                        address it.
  The
                                        Missouri funding schedule previously approved
                                        by the MPSC assumes funding
                                        through the expiration of Wolf Creek’s current NRC operating license (2025). In
                                        2005, the MPSC order regarding the comprehensive
                                        energy plan increased Wolf
                                        Creek’s depreciable life for Missouri regulatory
                                        purposes from 40 to 60 years
                                        and assumes funding through 2045. The Kansas
                                        funding schedule previously
                                        approved by KCC assumes that Wolf Creek will
                                        be granted a 20-year license
                                        extension and, thus, assumes funding through
                                        2045. WCNOC has filed with the NRC
                                        a letter of intent to file an application
                                        for a license extension. Management
                                        anticipates that WCNOC will file that application
                                        with the NRC in 2006. As such,
                                        it is likely that any future decommissioning
                                        cost study and funding levels will
                                        be based on the assumed extended life.
  Nuclear
                                        decommissioning cost and the associated nuclear
                                        decommissioning trust funding
                                        levels were addressed in the general rate
                                        cases filed in February 2006.
                                        KCP&L proposed cost estimates, assumptions and
                                        related funding schedules for
                                        nuclear plant decommissioning in its general
                                        rate cases as provided in the
                                        following table .
                                        KCP&L’s proposal will be considered by the MPSC
                                        and KCC; however, the
                                        outcome could differ from the proposal.
 **Total**
                                              **KCP&L's****Station**
                                              **47%
                                                  Share**(millions)Current
                                                  cost of decommissioning (in 2005
                                                  dollars)
                                              $
                                              518
                                              
                                              $
                                              243Future
                                                  cost of decommissioning (in 2045
                                                  dollars)
                                              
                                              2,897
                                              
                                              
                                              1,362Annual
                                                  escalation factor
                                              4.40%Annual
                                                  return on trust assets(a)
                                              6.48%(a)The
                                                  6.48% rate of return is thru 2025.
                                                  The rate then systematically decreasesthrough
                                                  2045 to 4.04% based on the assumption
                                                  that the fund's investment mixwill
                                                  become increasingly more conservative
                                                  as the decommissioning dateapproaches.
 KCP&L
                                        currently contributes approximately $3.6
                                        million annually
                                        to a tax-qualified trust fund to be used
                                        to decommission Wolf Creek. If
                                        KCP&L’s proposal is accepted by the MPSC and KCC,
                                        total annual funding would
                                        not change. Amounts funded are charged to
                                        other operating expense and recovered
                                        in billings to customers. If the actual return
                                        on trust assets is below the
                                        anticipated level, management
 81
  The
                                        following table summarizes
                                        the change in Great Plains Energy’s and consolidated KCP&L’s decommissioning
                                        trust fund.
 **December
                                                  31**
                                              **2005**
                                              **2004****Decommissioning
                                                  Trust**
                                              (millions)Beginning
                                                  balance
                                              $
                                              84.1
                                              
                                              $
                                              75.0Contributions
                                              
                                              3.6
                                              
                                              
                                              3.6Realized
                                                  gains
                                              
                                              3.9
                                              
                                              
                                              3.6Unrealized
                                                  gains
                                              
                                              0.2
                                              
                                              
                                              1.9Ending balance
                                              $
                                              91.8
                                              
                                              $
                                              84.1
 The
                                        decommissioning trust is reported at fair
                                        value on the balance sheets and is
                                        invested in assets as detailed in the following
                                        table .
 **December
                                                  31****Asset
                                                  Category**
                                              
                                              **2005**
                                              
                                              **2004**Equity
                                                  securities
                                              
                                              48%
                                              
                                              46%Debt
                                                  securities
                                              
                                              46%
                                              
                                              50%Other
                                              
                                              6%
                                              
                                              4%Total
                                              
                                              100%
                                              
                                              100%
 **Nuclear
                                        Liability and Insurance**
 The
                                        owners of Wolf Creek, a nuclear generating
                                        station, (Owners) maintain nuclear
                                        insurance for Wolf Creek in four areas: liability,
                                        worker radiation, property
                                        and accidental outage. These policies contain
                                        certain industry standard
                                        exclusions, including, but not limited to,
                                        ordinary wear and tear, and war. Both
                                        the nuclear liability and property insurance
                                        programs subscribed to by members
                                        of the nuclear power generating industry
                                        include industry aggregate limits for
                                        non-certified acts of terrorism and related
                                        losses, as defined by the Terrorism
                                        Risk Insurance Act, including replacement
                                        power costs. An industry aggregate
                                        limit of $0.3 billion exists for liability
                                        claims, regardless of the number of
                                        non-certified acts affecting Wolf Creek or
                                        any other nuclear energy liability
                                        policy or the number of policies in place.
                                        An industry aggregate limit of $3.2
                                        billion plus any reinsurance recoverable
                                        by Nuclear Electric Insurance Limited
                                        (NEIL), the Owners’ insurance provider, exists for property claims,
                                        including
                                        accidental outage power costs for acts of
                                        terrorism affecting Wolf Creek or any
                                        other nuclear energy facility property policy
                                        within twelve months from the date
                                        of the first act. These limits are the maximum
                                        amount to be paid to members who
                                        sustain losses or damages from these types
                                        of terrorist acts. For certified acts
                                        of terrorism, the individual policy limits
                                        apply. In addition, industry-wide
                                        retrospective assessment programs (discussed
                                        below) can apply once these
                                        insurance programs have been exhausted.
  ***Liability
                                        Insurance***
 Pursuant
                                        to the Price-Anderson Act, which was reauthorized
                                        through December 31, 2025, by
                                        the Energy Policy Act of 2005, the Owners
                                        are required to insure against public
                                        liability claims resulting from nuclear incidents
                                        to the full limit of public
                                        liability, which is currently $10.8 billion.
                                        This limit of liability consists of
                                        the maximum available commercial insurance
                                        of $0.3 billion, and the remaining
                                        $10.5 billion is provided through an industry-wide
                                        retrospective assessment
                                        program mandated by law, known as the Secondary
                                        Financial Protection (SFP)
                                        program. Under the SFP program, the Owners
                                        can be assessed up to $100.6 million
                                        ($47.3 million, KCP&L’s 47% share) per incident at any commercial
                                        reactor in the country, payable at no more
                                        than $15 million ($7.1 million,
                                        KCP&L’s 47%
 82
 share)
                                          per incident per year effective with the
                                          Energy Policy Act of 2005. This
                                          assessment is subject to an inflation adjustment
                                          based on the Consumer Price
                                          Index and applicable premium taxes. This
                                          assessment is in addition to worker
                                          radiation claims insurance. In addition,
                                          the U.S. Congress could impose
                                          additional revenue-raising measures to
                                          pay claims.
  ***Property,
                                        Decontamination, Premature Decommissioning
                                        and Extra Expense Insurance***
 The
                                        Owners carry decontamination liability, premature
                                        decommissioning liability and
                                        property damage insurance for Wolf Creek
                                        totaling approximately $2.8 billion
                                        ($1.3 billion, KCP&L's 47% share). NEIL provides this insurance.
  In
                                        the
                                        event of an accident, insurance proceeds
                                        must first be used for reactor
                                        stabilization and site decontamination in
                                        accordance with a plan mandated by the
                                        NRC. KCP&L’s share of any remaining proceeds can be
                                        used for further
                                        decontamination, property damage restoration
                                        and premature decommissioning
                                        costs. Premature decommissioning coverage
                                        applies only if an accident at Wolf
                                        Creek exceeds $500 million in property damage
                                        and decontamination expenses, and
                                        only after trust funds have been exhausted.
  ***Accidental
                                        Nuclear Outage Insurance***
 The
                                        Owners also carry additional insurance from
                                        NEIL to cover costs of replacement
                                        power and other extra expenses incurred in
                                        the event of a prolonged outage
                                        resulting from accidental property damage
                                        at Wolf Creek.
  Under
                                        all
                                        NEIL policies, the Owners are subject to
                                        retrospective assessments if NEIL
                                        losses, for each policy year, exceed the
                                        accumulated funds available to the
                                        insurer under that policy. The estimated
                                        maximum amount of retrospective
                                        assessments under the current policies could
                                        total approximately
                                        $26.5 million ($12.4 million, KCP&L’s 47% share) per policy
                                        year.
  In
                                        the
                                        event of a catastrophic loss at Wolf Creek,
                                        the insurance coverage may not be
                                        adequate to cover property damage and extra
                                        expenses incurred. Uninsured losses,
                                        to the extent not recovered through rates,
                                        would be assumed by KCP&L and the
                                        other owners and could have a material adverse
                                        effect on KCP&L’s results of
                                        operations, financial position and cash flows.
  ***Low-Level
                                        Waste***
 The
                                        Low-Level Radioactive Waste Policy Amendments
                                        Act of 1985 mandated that the
                                        various states, individually or through interstate
                                        compacts, develop alternative
                                        low-level radioactive waste disposal facilities.
                                        The states of Kansas, Nebraska,
                                        Arkansas, Louisiana and Oklahoma formed the
                                        Central Interstate Low-Level
                                        Radioactive Waste Compact (Compact) and selected
                                        a site in northern Nebraska to
                                        locate a disposal facility. WCNOC and the
                                        owners of the other five nuclear units
                                        in the Compact provided most of the pre-construction
                                        financing for this project.
  On
                                        December 18, 1998, the application for a
                                        license to construct this project was
                                        denied. After the license denial, WCNOC,
                                        the Compact Commission (Commission) and
                                        others filed a lawsuit in federal court contending
                                        Nebraska officials acted in
                                        bad faith while handling the license application.
                                        In September 2002, the U.S.
                                        District Court Judge presiding over the lawsuit
                                        issued his decision in the case
                                        finding that the State of Nebraska acted
                                        in bad faith in processing the license
                                        application for a low-level radioactive waste
                                        disposal site in Nebraska and
                                        rendered a judgment on behalf of the Commission
                                        in the amount of $151.4 million
                                        against the state. After the U.S. Court of
                                        Appeals affirmed the decision,
                                        Nebraska and the Commission settled the case
                                        by Nebraska agreeing to pay the
                                        Commission a one-time amount of $145.8 million.
                                        At the request of the
                                        Commission, WCNOC along with other members
                                        of the Compact, filed with the
                                        Commission their claims for refund. In 2005,
                                        WCNOC received a return of its
                                        investment of $19.6 million ($9.2 million,
                                        KCP&L’s 47%
                                        share), including pre-judgment interest and attorney’s fees. The Commission
                                        continues to explore alternative long-term
                                        waste disposal capability and has
                                        retained a portion of the settlement, above
                                        the amounts
 83
 returned,
                                                  until it determines what role it
                                                  will take in the development of
                                                  alternative
                                                  disposal capability. In February
                                                  2006, the Commission decided to
                                                  refund an
                                                  additional $1.7 million ($0.8 million,
                                                  KCP&L’s 47% share) to WCNOC. The
                                                  remaining insignificant amount
                                                  will be retained by the Commission
                                                  for future
                                                  operations. At December 31, 2005,
                                                  KCP&L’s balance sheet no longer reflects
                                                  an investment in the Compact. KCP&L's net investment in the Compact
                                                  was $7.4
                                                  million at December 31, 2004.
  Wolf
                                        Creek continues to dispose of its low-level
                                        radioactive waste at the reopened
                                        disposal facility at Barnwell, South Carolina.
                                        South Carolina intends to
                                        gradually decrease the amount of waste it
                                        allows from outside its compact until
                                        around 2008 when it intends to no longer
                                        accept waste from generators outside
                                        its compact. Wolf Creek remains able to dispose
                                        of some of its radioactive waste
                                        at a facility in Utah. Although management
                                        is unable to predict when a permanent
                                        disposal facility for Wolf Creek low-level
                                        radioactive waste might become
                                        available, this issue is not expected to
                                        affect continued operation of Wolf
                                        Creek.
  **5.**
                                              **REGULATORY
                                                  MATTERS**
  ***KCP&L’s
                                        Comprehensive Energy Plan***
 KCP&L
                                        continues to make progress in implementing
                                        its comprehensive energy plan and
                                        received orders from the MPSC and KCC in
                                        2005. The orders were on agreements
                                        reached among KCP&L, the Commissions’ staffs and certain key parties in the
                                        respective jurisdictions. The Sierra Club
                                        and Concerned Citizens of Platte
                                        County have appealed the MPSC order, and
                                        the Sierra Club has appealed the KCC
                                        order. These appeals are expected to be decided
                                        in 2006. Although subject to
                                        these appeals, the MPSC and KCC orders remain
                                        in effect pending the applicable
                                        court’s decision.
  ·
                                              KCP&L
                                                  will make energy infrastructure
                                                  investments as detailed in the
                                                  orders and
                                                  summarized in the tablebelow.
 **Estimated****Capital****Project**
                                                
                                                **Details**
                                                **Expenditures**(millions)Iatan
                                                    No. 2(a)
                                                
                                                Building
                                                    and owning 465 MW of an 850 MW
                                                    coal firedplant with an estimated completion
                                                    date of June 2010
                                                $
                                                733Wind
                                                    Generation
                                                
                                                Installation
                                                    of 100.5 MW of wind generation
                                                    in 2006
                                                
                                                166Environmental
                                                
                                                Retrofit
                                                    of selected existing coal plants
                                                
                                                272Asset
                                                    Management
                                                
                                                Enhanced
                                                    system performance and reliability
                                                
                                                42Customer
                                                    Programs
                                                
                                                Various
                                                    demand management, distributed
                                                    generation andefficiency programs
                                                
                                                53**Total****(b)**
                                                
                                                
                                                **$**
                                                **1,266**(a)
                                                MW
                                                    based on current estimates.(b)
                                                These
                                                    amounts are estimates. Because
                                                    of the magnitude of these investments
                                                    and
                                                    the length of timeto
                                                    implement the comprehensive energy
                                                    plan, actual expenditures may
                                                    differ
                                                    from these estimates.
 ·
                                            Ownership
                                                agreements are being finalized with
                                                Iatan No. 2 partners. KCP&L
                                                has awarded a contract for detailed
                                                engineering design services and
                                                project and construction management
                                                support. Detailed project engineering
                                                and design has begun and plant construction
                                                is expected to start in 2006.
                                                KCP&L has received an air permit from
                                                the Missouri Department of
                                                Natural Resources, which is being
                                                appealed by the Sierra Club. KCP&L
                                                anticipates issuances of a wetlands
                                                permit, a permit for the construction
                                                of a temporary barge slip and an
                                                Environmental Assessment with a finding
                                                of No Significant Impact toward
                                                mid-year 2006.
 ·
                                                              KCP&L
                                                                  has selected a
                                                                  developer and contractor
                                                                  for the construction
                                                                  of a 100.5 MW
                                                                  wind
                                                                  project in Kansas.
                                                                  Construction will
                                                                  begin in the first
                                                                  half of 2006 and
                                                                  management expects
                                                                  the project
  84
 to
                                                              be completed in time
                                                              for inclusion in rates
                                                              in 2007. The orders
                                                              also
                                                              include the possible
                                                              addition of another
                                                              100 MW of wind generation
                                                              in 2008
                                                              if supported by a detailed
                                                              evaluation.
  ·
                                              KCP&L
                                                  has awarded a contract to install
                                                  a Selective Catalytic Reduction
                                                  (SCR)
                                                  system at LaCygne No. 1scheduled
                                                  for completion in May 2007. Additional
                                                  environmental upgrades at LaCygne
                                                  No. 1 are scheduled for 2009. Other
                                                  planned environmental investments
                                                  include a similar SCR upgrade and
                                                  the addition of a wet scrubber
                                                  and
                                                  baghouse at Iatan No. 1 expected
                                                  to be completed in
                                                  2008.  ·
                                              Several
                                                  demand management efficiency and
                                                  affordability programs are being
                                                  implemented to help customers manage
                                                  usage and costs including online
                                                  energy analysis, air conditioner
                                                  cycling and low-income weatherization.  ·
                                              KCP&L’s
                                                  current rates will remain in place
                                                  until 2007 in accordance with the
                                                  orders. On February 1, 2006, KCP&L filed requests with the MPSC
                                                  and
                                                  KCC for annual rate increases of
                                                  $55.8 million or 11.5%and
                                                  $42.3 million or 10.5%,respectively.
                                                  The requested rate increases are
                                                  for recovery of increasing operating
                                                  costs including fuel, transportation
                                                  and pensions as well as investments
                                                  in wind generation and customer
                                                  programs. The request is based
                                                  on a return
                                                  on equity of 11.5% and an adjusted
                                                  equity ratio of 53.8%.
                                                  KCP&L anticipates that approved rate
                                                  adjustments will go into effect
                                                  January 1, 2007. The last rate
                                                  case required by the orders is
                                                  expected to
                                                  be filed in 2009, with rates effective
                                                  near the time Iatan No. 2 is placed
                                                  in service. Two additional rate
                                                  cases could be filed in 2007 and
                                                  2008 at
                                                  KCP&L’s discretion.  ·
                                              The
                                                  KCC order allows KCP&L to request recovery, on a dollar-for-dollar
                                                  basis with no profit to the company,
                                                  of actual fuel and purchased power
                                                  expense incurred through an energy
                                                  cost adjustment. Similarly, an
                                                  interim
                                                  energy charge, based on forecasted
                                                  costs and subject to customer refund,
                                                  is contained in the MPSC order.
                                                  The rate requests filed with the
                                                  MPSC and
                                                  KCC on February 1, 2006, do not
                                                  include the fuel clauses; however,
                                                  fuel
                                                  clauses still could be proposed
                                                  and implemented based on developments
                                                  during the proceedings.  ·
                                              KCP&L
                                                  may sell SO2emission
                                                  allowances during the term of the
                                                  orders. The sales proceeds are
                                                  recorded
                                                  as a regulatory liability for ratemaking
                                                  purposes and will be amortized
                                                  in
                                                  accordance with the last rate case
                                                  filed under the orders. In 2005,
                                                  KCP&L sold $60.3million ofSO2emission
                                                  allowances.  ·
                                              The
                                                  rate increase requests filed with
                                                  the MPSC and the KCC on February
                                                  1,
                                                  2006, include pension costs of
                                                  approximately $46 millioncalculated
                                                  consistently with the methodology
                                                  established in the orders. The
                                                  orders
                                                  established KCP&L’s annual pension costs for regulatory
                                                  purposes at
                                                  $22 millionuntil
                                                  2007 through the creation of regulatory
                                                  assets or liabilities, as
                                                  appropriate. See Note 9 for additional
                                                  information.  ·
                                              Wolf
                                                  Creek’s depreciable life for Missouri
                                                  regulatory purposes has been
                                                  increased from 40 to 60 years.
                                                  The MPSC order calls for $10.3
                                                  million,
                                                  on an annual jurisdictional basis,
                                                  of additional amortization expense
                                                  to
                                                  be recorded to offset the reduction
                                                  in depreciation expense due to
                                                  the
                                                  change in depreciable life. The
                                                  60-year Missouri depreciable life
                                                  matches
                                                  the current Kansas regulatory depreciable
                                                  life. In 2005, KCP&L began
                                                  recording depreciation and amortization
                                                  expense in accordance with the
                                                  order. ·
                                                The
                                                      orders are intended to provide
                                                      KCP&L with regulatory mechanisms
                                                      to be
                                                      able to recover the prudent
                                                      costs of its investments as
                                                      they are placed in
                                                      service and an ability to maintain
                                                      targeted credit ratios over
                                                      the
                                                      five-year term of the orders.
  The
                                              orders provide regulatory clarity on
                                              certain items; however, normal regulatory
                                              risk will continue to exist as the
                                              commissions establish rates in the
                                              rate
                                              cases, including, but not limited to,
                                              the actual amount
                                              of
                                              costs to be recovered through rates,
                                              the return on equity, the capital structure
                                              utilized and expenses to be recovered.
 85
 **Regulatory
                                              Assets and Liabilities**
 KCP&L
                                              is subject to the provisions of SFAS
                                              No. 71 and has recorded assets and
                                              liabilities on its balance sheet resulting
                                              from the effects of the ratemaking
                                              process, which would not be recorded
                                              under GAAP for non-regulated entities.
                                              Regulatory assets represent costs incurred
                                              that have been deferred because
                                              future recovery in customer rates is
                                              probable. Regulatory liabilities generally
                                              represent probable future reductions
                                              in revenue or refunds to customers.
                                              Future
                                              recovery of regulatory assets is not
                                              assured, but is generally subject to
                                              review
                                              by regulators in rate proceedings for
                                              matters such as prudence and
                                              reasonableness. Future reductions in
                                              revenue or refunds for regulatory
                                              liabilities generally are not mandated,
                                              pending future rate proceedings or
                                              actions by the regulators. Management
                                              regularly assesses whether regulatory
                                              assets and liabilities are probable
                                              of future recovery or refund by considering
                                              factors such as decisions by the MPSC,
                                              KCC or FERC on KCP&L’s rate case
                                              filings; decisions in other regulatory
                                              proceedings, including decisions related
                                              to other companies that establish precedence
                                              on matters applicable to KCP&L;
                                              and changes in laws and regulations.
                                              If recovery or refund of regulatory
                                              assets
                                              or liabilities is not approved by regulators
                                              or is no longer deemed probable,
                                              these regulatory assets or liabilities
                                              are recognized in the current period
                                              results of operations. KCP&L’s continued ability to meet the criteria
                                              for
                                              application of SFAS No. 71 may be affected
                                              in the future by restructuring and
                                              deregulation in the electric industry.
                                              In the event that SFAS No. 71 no longer
                                              applied to a deregulated portion of
                                              KCP&L’s operations, the related
                                              regulatory assets and liabilities would
                                              be written off unless an appropriate
                                              regulatory recovery mechanism is provided.
                                              Additionally, these factors could
                                              result in an impairment of utility
                                              plant assets if the cost of the assets
                                              could
                                              not be expected to be recovered in
                                              customer rates. Whether an asset has
                                              been
                                              impaired is determined pursuant to
                                              the requirements of SFAS No.
                                              144.
 **Amortization**
                                                **December
                                                    31****ending
                                                    period**
                                                **2005**
                                                **2004****Regulatory
                                                    Assets**
                                                
                                                
                                                (millions)Taxes
                                                    recoverable through future rates
                                                
                                                
                                                
                                                $
                                                85.7
                                                
                                                $
                                                81.0Decommission
                                                    and decontaminate federal uraniumenrichment
                                                    facilities
                                                
                                                2007
                                                
                                                
                                                1.3
                                                
                                                
                                                2.0Loss
                                                    on reacquired debt
                                                
                                                2037
                                                
                                                
                                                7.1
                                                
                                                
                                                7.7January
                                                    2002 incremental ice storm costs
                                                    (Missouri)
                                                
                                                2007
                                                
                                                
                                                4.9
                                                
                                                
                                                9.5Change
                                                    in depreciable life of Wolf Creek
                                                
                                                2045
                                                
                                                
                                                27.4
                                                
                                                
                                                15.5Cost
                                                    of removal
                                                
                                                
                                                
                                                
                                                9.3
                                                
                                                
                                                13.9Asset
                                                    retirement obligations
                                                
                                                
                                                
                                                
                                                23.6
                                                
                                                
                                                11.4Future
                                                    recovery of pension costs
                                                
                                                
                                                
                                                
                                                15.6
                                                
                                                
                                                -Other
                                                
                                                Various
                                                
                                                
                                                5.0
                                                
                                                
                                                3.3Total
                                                  Regulatory
                                                  Assets
                                                
                                                
                                                
                                                $
                                                179.9
                                                
                                                $
                                                144.3**Regulatory
                                                    Liabilities**Emission
                                                    allowances
                                                
                                                
                                                
                                                $
                                                64.3
                                                
                                                $
                                                4.1Pension
                                                    accounting method difference
                                                
                                                
                                                
                                                
                                                1.0
                                                
                                                
                                                -Additional
                                                    Wolf Creek amortization (Missouri)
                                                
                                                
                                                
                                                4.3
                                                
                                                
                                                -Total Regulatory Liabilities
                                                
                                                
                                                $
                                                69.6
                                                
                                                $
                                                4.1
 Except
                                          as
                                          noted below, regulatory assets for which
                                          costs have been incurred have been
                                          included (or are expected to be included,
                                          for costs incurred subsequent to the
                                          most recently approved rate case) in KCP&L’s rate base, thereby providing a
                                          return on invested costs when included
                                          in rate base. Certain regulatory assets
                                          do not result from cash expenditures and
                                          therefore do not represent investments
                                          included in rate base or have offsetting
                                          liabilities that reduce rate base. The
                                          pension accounting method difference (which
                                          may be either a regulatory asset or
                                          liability) and certain insignificant items
                                          in Regulatory Assets - Other are not
                                          included in rate base. 86
 **Southwest
                                          Power Pool Regional Transmission Organization**
 Under
                                          FERC Order 2000, KCP&L, as an investor-owned utility, is strongly
                                          encouraged
                                          to join a FERC approved RTO. RTOs combine
                                          transmission operations of utility
                                          businesses into regional organizations
                                          that schedule transmission services and
                                          monitor the energy market to ensure regional
                                          transmission reliability and
                                          non-discriminatory access. The Southwest
                                          Power Pool (SPP), of which KCP&L is
                                          a member, obtained approval from FERC as
                                          an RTO in a January 24, 2005, order.
                                          KCP&L intends on participating in the SPP RTO
                                          and during 2005, KCP&L
                                          filed applications with the MPSC and KCC
                                          seeking authorization to participate in
                                          the SPP RTO. In these applications, KCP&L requested authorization be granted
                                          by May 1, 2006. In February 2006, KCP&L reached an agreement with the MPSC
                                          staff and interveners regarding interim
                                          approval to turn over functional control
                                          of KCP&L’s transmission facilities to the SPP RTO
                                          and participate in the
                                          energy imbalance market scheduled to start
                                          May 1, 2006. KCC has held
                                          workshops seeking additional information
                                          on the request to participate.
  During
                                          2005, a cost/benefit analysis was completed
                                          under the direction of the SPP
                                          Regional State Committee (composed of state
                                          commissioners from the states where
                                          the SPP RTO operates). The analysis indicates
                                          that implementation of an energy
                                          imbalance market within the SPP region
                                          would provide net benefits of
                                          approximately $373 million over a 10-year
                                          period to the transmission-owning
                                          members of the SPP RTO; however, there
                                          was no significant documented impact for
                                          KCP&L over the 10-year period. During 2005,
                                          SPP RTO filed its plans for the
                                          energy imbalance market with FERC. These
                                          plans include a May 1, 2006, start date
                                          for the energy imbalance market. Subsequently,
                                          FERC issued an order rejecting
                                          this filing. SPP RTO made a revised filing
                                          on January 4, 2006, addressing FERC’s
                                          issues.
  **Seams
                                          Elimination Charge Adjustment**
 Seams
                                          Elimination Charge Adjustment (SECA) is
                                          a transitional pricing mechanism
                                          authorized by FERC and intended to compensate
                                          transmission owners for the
                                          revenue lost as a result of FERC’s elimination of regional through and out
                                          rates
                                          between PJM Interconnection (PJM) and the
                                          Midwest Independent Transmission
                                          System Operator, Inc. (MISO) during a 16-month
                                          transition period from December
                                          1, 2004 through March 31, 2006. Each relevant
                                          PJM and MISO zone and the
                                          load-serving entities within that zone
                                          are allocated a portion of the SECA based
                                          on transmission services provided to that
                                          zone during 2002 and
                                          2003.
  In
                                          2005,
                                          PJM and MISO began invoicing Strategic
                                          Energy for these charges, based on
                                          allocations in compliance filings made
                                          by transmission owners and accepted by
                                          FERC, subject to refund and adjustment.
                                          During 2005, Strategic Energy recorded
                                          purchased power expenses totaling $13.6
                                          million for
                                          these
                                          charges covering billings for the transition
                                          period. The compliance filings
                                          allocate approximately $1 million of charges
                                          per month, through March 2006.
                                          Strategic Energy began to bill a portion
                                          of its SECA costs to its retail
                                          customers.
  There
                                          are
                                          several unresolved matters and legal challenges
                                          to the SECA that are pending
                                          before FERC on rehearing. FERC established
                                          a schedule for resolution of certain
                                          SECA issues, including the issue of shifting
                                          SECA allocations to the shipper.
                                          The shipper in Strategic Energy’s situation is the wholesale supplier,
                                          which,
                                          through a contract with Strategic Energy,
                                          delivered power to various zones in
                                          which Strategic Energy was supplying retail
                                          customers. In most instances, the
                                          shipper was the purchaser of through and
                                          out transmission service and therefore
                                          included the cost of the through and out
                                          rate in its energy price. Management is
                                          unable to predict the outcome of legal
                                          and regulatory challenges to the SECA
                                          mechanism.
  **6.**
                                                **GOODWILL
                                                    AND INTANGIBLE PROPERTY**  Goodwill
                                            reported on Great Plains Energy’s consolidated balance sheets associated
                                            with
                                            the Company’s ownership in Strategic Energy was $87.6
                                            million and
                                            $86.8 million
                                            at December 31, 2005
 87
 and
                                          2004,
                                          respectively. Annual impairment tests,
                                          conducted September 1, have been
                                          completed and there were no impairments
                                          of goodwill in 2005, 2004 or 2003. See
                                          Note 7 for additional information regarding
                                          the 2004 acquisition of an
                                          additional indirect interest in Strategic
                                          Energy.
  **Other
                                          Intangible Assets and Related Liabilities**
 Great
                                          Plains Energy and consolidated KCP&L’s intangible assets and related
                                          liabilities are detailed in the following
                                          table .
 **December
                                                    31, 2005**
                                                
                                                **December
                                                    31, 2004****Gross
                                                    Carrying**
                                                **Accumulated**
                                                
                                                **Gross
                                                    Carrying**
                                                **Accumulated****Amount**
                                                **Amortization**
                                                
                                                **Amount**
                                                **Amortization****Consolidated
                                                    KCP&L**
                                                (millions)Computer
                                                    software(a)
                                                $
                                                92.9
                                                
                                                $
                                                (68.8
                                                )
                                                
                                                $
                                                88.7
                                                
                                                $
                                                (61.3
                                                )**Other
                                                    Great Plains Energy**Computer
                                                    software(a)
                                                
                                                12.0
                                                
                                                
                                                (5.2
                                                )
                                                
                                                
                                                5.4
                                                
                                                
                                                (3.4
                                                )Acquired
                                                    intangible assetsSupply
                                                    contracts
                                                
                                                26.5
                                                
                                                
                                                (19.3
                                                )
                                                
                                                
                                                26.5
                                                
                                                
                                                (7.7
                                                )Customer
                                                    relationships
                                                
                                                17.0
                                                
                                                
                                                (4.7
                                                )
                                                
                                                
                                                17.0
                                                
                                                
                                                (1.9
                                                )Asset
                                                    information systems
                                                
                                                1.9
                                                
                                                
                                                (0.9
                                                )
                                                
                                                
                                                1.9
                                                
                                                
                                                (0.3
                                                )Unamortized
                                                    intangible assetsStrategic
                                                    Energy trade name
                                                
                                                0.7
                                                
                                                
                                                
                                                
                                                
                                                
                                                0.7Total
                                                    intangible assets
                                                $
                                                151.0
                                                
                                                $
                                                (98.9
                                                )
                                                
                                                $
                                                140.2
                                                
                                                $
                                                (74.6
                                                )Amortized
                                                    related liabilitiesRetail
                                                    contracts
                                                $
                                                26.5
                                                
                                                $
                                                (19.3
                                                )
                                                
                                                $
                                                26.5
                                                
                                                $
                                                (7.7
                                                )(a)Computer software is included in
                                                  electric utility plant or other
                                                  nonutility property, as applicable,
                                                  on theconsolidated
                                                  balance sheets.
 The
                                          fair
                                          value of acquired supply (intangible asset)
                                          and retail (liability) contracts is
                                          being amortized over approximately 28 months.
                                          Other intangible assets recorded
                                          that have finite lives and are subject
                                          to amortization include customer
                                          relationships and asset information systems,
                                          which are being amortized over 72
                                          and 44 months, respectively. A $0.7 million
                                          intangible asset for the Strategic
                                          Energy trade name was also recorded and
                                          deemed to have an indefinite life, and
                                          as such, is not being amortized. See Note
                                          7 for more information.
  Amortization
                                          expense for the acquired share of intangible
                                          assets and related liabilities is
                                          detailed in the following table .
 **Estimated
                                                    Amortization Expense****2005**
                                                **2004**
                                                **2006**
                                                **2007**
                                                **2008**
                                                **2009**
                                                **2010**(millions)Intangible
                                                    assets
                                                $
                                                15.0
                                                
                                                $
                                                9.9
                                                
                                                $
                                                10.6
                                                
                                                $
                                                3.3
                                                
                                                $
                                                2.8
                                                
                                                $
                                                2.9
                                                
                                                $
                                                0.9Related
                                                    liabilities
                                                
                                                (11.6
                                                )
                                                
                                                (7.7
                                                )
                                                
                                                (7.2
                                                )
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -
                                                
                                                
                                                -Net amortization expense
                                                $
                                                3.4
                                                
                                                $
                                                2.2
                                                
                                                $
                                                3.4
                                                
                                                $
                                                3.3
                                                
                                                $
                                                2.8
                                                
                                                $
                                                2.9
                                                
                                                $
                                                0.9
 **7.**
                                              **ACQUISITION
                                                  OF ADDITIONAL INDIRECT INTEREST
                                                  IN STRATEGIC
                                                  ENERGY**  In
                                          May
                                          2004, Great Plains Energy, through IEC,
                                          purchased an additional 11.45% indirect
                                          interest in Strategic Energy. The Company
                                          paid cash of $90.0 million, including
                                          $1.2 million of transaction costs. In accordance
                                          with the purchase terms, the
                                          Company also recorded a $0.9 million liability
                                          for 2004 fractional
                                          dividends to the previous owner for its
                                          share of 2004 budgeted Strategic Energy
                                          dividends. See Note 15 for discussion of
                                          a related legal proceeding.
 88
 A
                                              third
                                              party valuation was prepared to assist
                                              in the Company’s determination of the
                                              purchase price allocation. The acquired
                                              share of identifiable intangible assets
                                              and liabilities were recorded by IEC
                                              at fair value as part of the purchase
                                              price
                                              allocation. The purchase price allocation
                                              for the net assets acquired is
                                              detailed in the following table. See
                                              Note 6 for more
                                              information.
 **2004**(millions)Other
                                                    non-utility property and investments
                                                $
                                                10.6Goodwill
                                                
                                                60.7Other
                                                    deferred charges
                                                
                                                46.1Total assets
                                                
                                                117.4Accounts
                                                    payable
                                                
                                                0.9Other
                                                    deferred credits and liabilities
                                                
                                                26.5Net assets acquired
                                                $
                                                90.0
 **8.**
                                              **DISCONTINUED
                                                  OPERATIONS**  **KLT
                                          Gas**
 In
                                          February 2004, the Board of Directors approved
                                          the sale of the KLT Gas natural
                                          gas properties (KLT Gas portfolio) and
                                          discontinuation of the gas business.
                                          Since the approval, the KLT Gas portfolio
                                          has been reported as discontinued
                                          operations in accordance with SFAS No.
                                          144. During 2004, KLT Gas completed sales
                                          of substantially all of the KLT Gas portfolio.
                                          At December 31, 2005 and 2004,
                                          KLT Gas had $0.6 million and
                                          $0.7
                                          million of current assets and $0.1 million and
                                          $2.1
                                          million of current liabilities recorded
                                          in assets and liabilities from
                                          discontinued operations, respectively.
                                          The following table summarizes
                                          the discontinued operations.
 **2005**
                                                **2004**
                                                **2003**Revenues
                                                $
                                                -
                                                
                                                $
                                                1.6
                                                
                                                $
                                                1.5Gain
                                                    (loss) from operations, includingimpairments,
                                                    before income taxes
                                                
                                                (2.9
                                                )
                                                
                                                (4.5
                                                )
                                                
                                                (59.1
                                                )Gain
                                                    on sales of assets
                                                
                                                -
                                                
                                                
                                                16.8
                                                
                                                
                                                -Discontinued
                                                    operations before income taxes
                                                
                                                (2.9
                                                )
                                                
                                                12.3
                                                
                                                
                                                (59.1
                                                )Income
                                                    taxes
                                                
                                                1.0
                                                
                                                
                                                (5.0
                                                )
                                                
                                                23.0Discontinued
                                                    operations, net of income taxes
                                                $
                                                (1.9
                                                )
                                                $
                                                7.3
                                                
                                                $
                                                (36.1
                                                )
 89
 RSAE
 In
                                          2003,
                                          HSS completed the disposition of its interest
                                          in RSAE. The financial statements
                                          reflect RSAE as discontinued operations
                                          for 2003 in accordance with SFAS No.
                                          144. The following table summarizes the
                                          discontinued
                                          operations.
 **2003**(millions)Revenues
                                                $
                                                31.8Loss
                                                    from operations before income
                                                    taxes
                                                
                                                (1.6
                                                )Loss
                                                    on disposal before income taxes
                                                
                                                (18.9
                                                )Total
                                                    loss on discontinued operations
                                                    before income taxes
                                                
                                                (20.5
                                                )Income
                                                    tax benefit
                                                
                                                11.8Discontinued
                                                    operations, net of income taxes
                                                $
                                                (8.7
                                                )
 **9.**
                                              **PENSION
                                                  PLANS AND OTHER EMPLOYEE BENEFITS**  **Pension
                                          Plans and Other Employee Benefits**
 The
                                          Company maintains defined benefit pension
                                          plans for substantially all employees,
                                          including officers, of KCP&L, Services and WCNOC. Pension benefits
                                          under
                                          these plans reflect the employees’ compensation, years of service and age
                                          at
                                          retirement. The funding policy for the
                                          pension plans is to contribute amounts
                                          sufficient to meet the minimum funding
                                          requirements under the Employee
                                          Retirement Income Security Act of 1974
                                          (ERISA) plus additional amounts as
                                          considered appropriate.
  The
                                          MPSC
                                          and KCC 2005 orders establish KCP&L’s annual pension costs at $22 million
                                          through the creation of regulatory assets
                                          and liabilities for future recovery
                                          from or refund to customers, as appropriate.
                                          As a result, pension cost for
                                          KCP&L was reduced by $14.6 million and a corresponding
                                          regulatory asset and
                                          liability were established.
  For
                                          defined benefit pension plans sponsored
                                          by Great Plains Energy, contributions
                                          and expense are allocated to KCP&L and Services based on labor costs of
                                          plan
                                          participants. Any additional minimum pension
                                          liability is allocated based on the
                                          Company’s funded status per plan.
  In
                                          addition to providing pension benefits,
                                          the Company provides certain
                                          postretirement health care and life insurance
                                          benefits for substantially all
                                          retired employees of KCP&L, Services and WCNOC. The cost of postretirement
                                          benefits charged to KCP&L are accrued during an employee's years
                                          of service
                                          and recovered through rates. The Company
                                          funds the portion of net periodic
                                          postretirement benefit costs that are tax
                                          deductible. For post-retirement health
                                          care plans sponsored by Great Plains Energy,
                                          contributions and expense are
                                          allocated to KCP&L and Services based upon the number of
                                          plan
                                          participants.
  90
 The
                                          following pension benefits tables provide
                                          information relating to the funded
                                          status of all defined benefit pension plans
                                          on an aggregate basis as well as the
                                          components of net periodic benefit costs.
                                          The plan measurement date for the
                                          majority of plans is September 30. In 2005,
                                          contributions of $0.2 million and
                                          $3.8 million were made to the pension and
                                          postretirement benefit plans,
                                          respectively, after the measurement date
                                          and in 2004, contributions of $20.7
                                          million were made to the pension plans
                                          after the measurement date. Net periodic
                                          benefit costs reflect total plan benefit
                                          costs prior to the effects of
                                          capitalization and sharing with joint-owners
                                          of power
                                          plants.
 **Pension
                                                      Benefits**
                                                  
                                                  **Other
                                                      Benefits****2005**
                                                  
                                                  **2004**
                                                  
                                                  **2005**
                                                  
                                                  **2004****Change
                                                      in projected benefit obligation
                                                      (PBO)**
                                                  
                                                  (millions)PBO
                                                      at beginning of year
                                                  
                                                  $
                                                  515.7
                                                  
                                                  $
                                                  501.5
                                                  
                                                  $
                                                  49.1
                                                  
                                                  $
                                                  52.1Service
                                                      cost
                                                  
                                                  
                                                  17.3
                                                  
                                                  
                                                  16.7
                                                  
                                                  
                                                  0.9
                                                  
                                                  
                                                  0.9Interest
                                                      cost
                                                  
                                                  
                                                  29.8
                                                  
                                                  
                                                  30.1
                                                  
                                                  
                                                  2.9
                                                  
                                                  
                                                  3.1Contribution
                                                      by participants
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  1.2
                                                  
                                                  
                                                  1.1Amendments
                                                  
                                                  
                                                  0.6
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -Actuarial
                                                      loss (gain)
                                                  
                                                  
                                                  33.0
                                                  
                                                  
                                                  25.1
                                                  
                                                  
                                                  3.6
                                                  
                                                  
                                                  (3.2
                                                  )Benefits
                                                      paid
                                                  
                                                  
                                                  (41.2
                                                  )
                                                  
                                                  (54.7
                                                  )
                                                  
                                                  (4.1
                                                  )
                                                  
                                                  (4.3
                                                  )Benefits
                                                      paid by Company
                                                  
                                                  
                                                  (0.6
                                                  )
                                                  
                                                  (0.3
                                                  )
                                                  
                                                  (0.6
                                                  )
                                                  
                                                  (0.6
                                                  )Settlements
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  (2.7
                                                  )
                                                  
                                                  -
                                                  
                                                  
                                                  -PBO at end of plan year
                                                  
                                                  $
                                                  554.6
                                                  
                                                  $
                                                  515.7
                                                  
                                                  $
                                                  53.0
                                                  
                                                  $
                                                  49.1**Change
                                                      in plan assets**Fair
                                                      value of plan assets at beginning
                                                      of year
                                                  
                                                  $
                                                  370.5
                                                  
                                                  $
                                                  341.0
                                                  
                                                  $
                                                  14.7
                                                  
                                                  $
                                                  8.3Actual
                                                      return on plan assets
                                                  
                                                  
                                                  47.8
                                                  
                                                  
                                                  33.9
                                                  
                                                  
                                                  0.3
                                                  
                                                  
                                                  0.3Contributions
                                                      by employer and participants
                                                  
                                                  
                                                  35.1
                                                  
                                                  
                                                  50.3
                                                  
                                                  
                                                  1.3
                                                  
                                                  
                                                  10.4Benefits
                                                      paid
                                                  
                                                  
                                                  (41.2
                                                  )
                                                  
                                                  (54.7
                                                  )
                                                  
                                                  (4.1
                                                  )
                                                  
                                                  (4.3
                                                  )Fair value of plan assets at
                                                      end of plan year
                                                  
                                                  $
                                                  412.2
                                                  
                                                  $
                                                  370.5
                                                  
                                                  $
                                                  12.2
                                                  
                                                  $
                                                  14.7**Prepaid
                                                      (accrued) benefit cost**Funded
                                                      status
                                                  
                                                  $
                                                  (142.4
                                                  )
                                                  $
                                                  (145.2
                                                  )
                                                  $
                                                  (40.8
                                                  )
                                                  $
                                                  (34.4
                                                  )Unrecognized
                                                      actuarial loss
                                                  
                                                  
                                                  195.0
                                                  
                                                  
                                                  195.9
                                                  
                                                  
                                                  14.1
                                                  
                                                  
                                                  10.5Unrecognized
                                                      prior service cost
                                                  
                                                  
                                                  32.6
                                                  
                                                  
                                                  36.3
                                                  
                                                  
                                                  0.8
                                                  
                                                  
                                                  1.0Unrecognized
                                                      transition obligation
                                                  
                                                  
                                                  0.3
                                                  
                                                  
                                                  0.4
                                                  
                                                  
                                                  8.2
                                                  
                                                  
                                                  9.4Net
                                                      prepaid (accrued) benefit cost
                                                  
                                                  
                                                  85.5
                                                  
                                                  
                                                  87.4
                                                  
                                                  
                                                  (17.7
                                                  )
                                                  
                                                  (13.5
                                                  )Regulatory
                                                      asset, net
                                                  
                                                  
                                                  14.6
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -Net amount recognized at December
                                                      31
                                                  
                                                  $
                                                  100.1
                                                  
                                                  $
                                                  87.4
                                                  
                                                  $
                                                  (17.7
                                                  )
                                                  $
                                                  (13.5
                                                  )**Amounts
                                                      recognized in the consolidated
                                                      balance sheets**Prepaid
                                                      benefit cost
                                                  
                                                  $
                                                  98.3
                                                  
                                                  $
                                                  89.2
                                                  
                                                  $
                                                  -
                                                  
                                                  $
                                                  -Accrued
                                                      benefit cost
                                                  
                                                  
                                                  (12.8
                                                  )
                                                  
                                                  (1.8
                                                  )
                                                  
                                                  (17.7
                                                  )
                                                  
                                                  (13.5
                                                  )Minimum
                                                      pension liability adjustment
                                                  
                                                  
                                                  (74.3
                                                  )
                                                  
                                                  (84.2
                                                  )
                                                  
                                                  -
                                                  
                                                  
                                                  -Intangible
                                                      asset
                                                  
                                                  
                                                  14.4
                                                  
                                                  
                                                  15.6
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -Accumulated
                                                      other comprehensive income
                                                  
                                                  
                                                  59.9
                                                  
                                                  
                                                  68.6
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -Regulatory
                                                      asset, net
                                                  
                                                  
                                                  14.6
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -Net amount recognized in balance
                                                      sheets
                                                  
                                                  
                                                  100.1
                                                  
                                                  
                                                  87.4
                                                  
                                                  
                                                  (17.7
                                                  )
                                                  
                                                  (13.5
                                                  )Contributions
                                                      and changes aftermeasurement date
                                                  
                                                  
                                                  0.2
                                                  
                                                  
                                                  20.7
                                                  
                                                  
                                                  3.8
                                                  
                                                  
                                                  -Net amount recognized at December
                                                      31
                                                  
                                                  $
                                                  100.3
                                                  
                                                  $
                                                  108.1
                                                  
                                                  $
                                                  (13.9
                                                  )
                                                  $
                                                  (13.5
                                                  )
 91
  **Pension
                                                        Benefits**
                                                    
                                                    **Other
                                                        Benefits****2005**
                                                    **2004**
                                                    **2003**
                                                    **2005**
                                                    **2004**
                                                    **2003****Components
                                                        of net periodic benefit cost**
                                                    
                                                    (millions)Service
                                                        cost
                                                    
                                                    $
                                                    17.3
                                                    
                                                    $
                                                    16.7
                                                    
                                                    $
                                                    15.0
                                                    
                                                    $
                                                    0.9
                                                    
                                                    $
                                                    0.9
                                                    
                                                    $
                                                    0.9Interest
                                                        cost
                                                    
                                                    
                                                    29.8
                                                    
                                                    
                                                    30.1
                                                    
                                                    
                                                    29.9
                                                    
                                                    
                                                    2.9
                                                    
                                                    
                                                    3.1
                                                    
                                                    
                                                    3.2Expected
                                                        return on plan assets
                                                    
                                                    
                                                    (32.4
                                                    )
                                                    
                                                    (31.7
                                                    )
                                                    
                                                    (27.7
                                                    )
                                                    
                                                    (0.6
                                                    )
                                                    
                                                    (0.6
                                                    )
                                                    
                                                    (0.6
                                                    )Amortization
                                                        of prior service cost
                                                    
                                                    
                                                    4.3
                                                    
                                                    
                                                    4.3
                                                    
                                                    
                                                    4.3
                                                    
                                                    
                                                    0.2
                                                    
                                                    
                                                    0.2
                                                    
                                                    
                                                    0.2Recognized
                                                        net actuarial loss (gain)
                                                    
                                                    
                                                    18.6
                                                    
                                                    
                                                    7.7
                                                    
                                                    
                                                    1.3
                                                    
                                                    
                                                    0.5
                                                    
                                                    
                                                    0.7
                                                    
                                                    
                                                    0.6Transition
                                                        obligation
                                                    
                                                    
                                                    0.1
                                                    
                                                    
                                                    0.1
                                                    
                                                    
                                                    0.1
                                                    
                                                    
                                                    1.2
                                                    
                                                    
                                                    1.2
                                                    
                                                    
                                                    1.2Amendment
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    0.1Net
                                                        settlements
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    1.8
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -Net periodic benefit cost
                                                        beforeregulatory adjustment
                                                    
                                                    
                                                    37.7
                                                    
                                                    
                                                    29.0
                                                    
                                                    
                                                    22.9
                                                    
                                                    
                                                    5.1
                                                    
                                                    
                                                    5.5
                                                    
                                                    
                                                    5.6Regulatory
                                                        adjustment
                                                    
                                                    
                                                    (14.6
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -Net periodic benefit cost
                                                    
                                                    $
                                                    23.1
                                                    
                                                    $
                                                    29.0
                                                    
                                                    $
                                                    22.9
                                                    
                                                    $
                                                    5.1
                                                    
                                                    $
                                                    5.5
                                                    
                                                    $
                                                    5.6
 The
                                              accumulated benefit obligation (ABO)
                                              for all defined benefit pension plans
                                              was
                                              $469.9 million and $445.4 million at
                                              December 31, 2005 and 2004, respectively.
                                              The PBO, ABO and the fair value of
                                              plan assets at plan year-end are aggregated
                                              by funded and under funded plans in
                                              the following
                                              table.
 **2005**
                                                    
                                                    **2004****Pension
                                                        plans with the ABO in excess
                                                        of plan assets**
                                                    
                                                    (millions)Projected
                                                        benefit obligation
                                                    
                                                    $
                                                    337.8
                                                    
                                                    $
                                                    309.8Accumulated
                                                        benefit obligation
                                                    
                                                    
                                                    280.6
                                                    
                                                    
                                                    266.1Fair
                                                        value of plan assets
                                                    
                                                    
                                                    204.1
                                                    
                                                    
                                                    180.0**Pension
                                                        plans with plan assets in
                                                        excess of the ABO**Projected
                                                        benefit obligation
                                                    
                                                    $
                                                    216.8
                                                    
                                                    $
                                                    205.9Accumulated
                                                        benefit obligation
                                                    
                                                    
                                                    189.3
                                                    
                                                    
                                                    179.3Fair
                                                        value of plan assets
                                                    
                                                    
                                                    208.1
                                                    
                                                    
                                                    190.5
 The
                                              expected long-term rate of return on
                                              plan assets is based on historical
                                              and
                                              projected rates of return for current
                                              and planned asset classes in the plans’
investment portfolio. Assumed projected
                                              rates of return for each asset class
                                              were selected after analyzing historical
                                              experience and future expectations
                                              of
                                              the returns of various asset classes.
                                              Based on the target asset allocation
                                              for
                                              each asset class, the overall expected
                                              rate of return for the portfolio was
                                              developed and adjusted for the effect
                                              of projected benefits paid from plan
                                              assets and future plan contributions.
  The
                                              following tables provide the weighted-average
                                              assumptions used to determine
                                              benefit obligations and net costs.
 **Weighted
                                                        average assumptions used
                                                        to determine**
                                                    
                                                    **Pension
                                                        Benefits**
                                                    **Other
                                                        Benefits****the benefit obligation at
                                                        plan year-end**
                                                    
                                                    **2005**
                                                    **2004**
                                                    **2005**
                                                    **2004**Discount
                                                        rate
                                                    
                                                    
                                                    5.62
                                                    %
                                                    
                                                    5.82
                                                    %
                                                    
                                                    5.62
                                                    %
                                                    
                                                    5.82
                                                    %Rate
                                                        of compensation increase
                                                    
                                                    
                                                    3.57
                                                    %
                                                    
                                                    3.06
                                                    %
                                                    
                                                    3.60
                                                    %
                                                    
                                                    3.05
                                                    %
 92
 **Weighted
                                                        average assumptions used
                                                        to determine**
                                                    
                                                    **Pension
                                                        Benefits**
                                                    **Other
                                                        Benefits****net costs for years ended
                                                        at December 31**
                                                    
                                                    **2005**
                                                    **2004**
                                                    **2005**
                                                    **2004**Discount
                                                        rate
                                                    
                                                    
                                                    5.82
                                                    %
                                                    
                                                    6.00
                                                    %
                                                    
                                                    5.82
                                                    %
                                                    
                                                    6.00
                                                    %Expected
                                                        long-term return on plan
                                                        assets
                                                    
                                                    
                                                    8.75
                                                    %
                                                    
                                                    9.00
                                                    %
                                                    
                                                    4.26
                                                    %
                                                        *
                                                    
                                                    6.62
                                                    %
                                                        *Rate
                                                        of compensation increase
                                                    
                                                    
                                                    3.06
                                                    %
                                                    
                                                    3.30
                                                    %
                                                    
                                                    3.05
                                                    %
                                                    
                                                    3.25
                                                    %*
                                                        after tax
 Primarily
                                              as a result of lower discount rates
                                              and historical losses in the market
                                              value of
                                              plan assets, the Company has a minimum
                                              pension liability offset by an intangible
                                              asset and OCI. The amounts recognized
                                              in Great Plains Energy’s and consolidated
                                              KCP&L’s balance sheets related to the minimum
                                              pension liability are detailed
                                              in the following table.
 **Great
                                                        Plains Energy**
                                                    **Consolidated
                                                        KCP&L****December
                                                        31**
                                                    **December
                                                        31****2005**
                                                    **2004**
                                                    **2005**
                                                    **2004**(millions)Additional
                                                        minimum pension liability
                                                    
                                                    $
                                                    74.3
                                                    
                                                    $
                                                    84.2
                                                    
                                                    $
                                                    73.5
                                                    
                                                    $
                                                    79.8Intangible
                                                        asset
                                                    
                                                    
                                                    14.4
                                                    
                                                    
                                                    15.6
                                                    
                                                    
                                                    13.7
                                                    
                                                    
                                                    14.6Deferred
                                                        taxes
                                                    
                                                    
                                                    22.5
                                                    
                                                    
                                                    26.3
                                                    
                                                    
                                                    22.5
                                                    
                                                    
                                                    25.0OCI,
                                                        net of tax
                                                    
                                                    
                                                    37.4
                                                    
                                                    
                                                    42.3
                                                    
                                                    
                                                    37.3
                                                    
                                                    
                                                    40.2
 Pension
                                              plan assets are managed in accordance
                                              with “prudent investor” guidelines
                                              contained in the ERISA requirements.
                                              The investment strategy supports the
                                              objective of the fund, which is to
                                              earn the highest possible return on
                                              plan
                                              assets within a reasonable and prudent
                                              level of risk. Investments are
                                              diversified across classes and within
                                              each class to minimize risks. At December
                                              31, 2005 and 2004, respectively, the
                                              fair value of plan assets was $412.2
                                              million, not including a $0.2 million
                                              contribution made after the plan year-end,
                                              and $370.5 million, not including a
                                              $20.7 million subsequent contribution.
                                              The
                                              asset allocation for the Company’s pension plans at the end of 2005
                                              and 2004,
                                              and the target allocation for 2006
                                              are reported in the following table.
                                              The
                                              portfolio is periodically rebalanced
                                              to generally meet target allocation
                                              percentages.
 **Plan
                                                        Assets at****Target**
                                                    **December
                                                        31****Asset
                                                        Category**
                                                    
                                                    **Allocation**
                                                    **2005**
                                                    **2004**Equity
                                                        securities
                                                    
                                                    
                                                    61
                                                    %
                                                    
                                                    61
                                                    %
                                                    
                                                    59
                                                    %Debt
                                                        securities
                                                    
                                                    
                                                    27
                                                    %
                                                    
                                                    26
                                                    %
                                                    
                                                    31
                                                    %Real
                                                        estate
                                                    
                                                    
                                                    7
                                                    %
                                                    
                                                    7
                                                    %
                                                    
                                                    8
                                                    %Other
                                                    
                                                    
                                                    5
                                                    %
                                                    
                                                    6
                                                    %
                                                    
                                                    2
                                                    %Total
                                                    
                                                    
                                                    100
                                                    %
                                                    
                                                    100
                                                    %
                                                    
                                                    100
                                                    %
 Assumed
                                              health care cost trend rates have a
                                              significant effect on the amounts reported
                                              for the health care plans. The cost
                                              trend assumed for 2005 was 10% and
                                              is 9% for
                                              2006. The cost trend rate will continue
                                              to decline through 2010 to the ultimate
                                              cost trend rate of 5%. The health care
                                              plan requires retirees to make monthly
                                              contributions on behalf of themselves
                                              and their dependents in an amount
                                              determined by the Company. 
 93
 The
                                              effects of a one-percentage point change
                                              in the medical cost trend rates,
                                              holding all other assumptions constant,
                                              at December 31, 2005, are detailed
                                              in
                                              the following table.
 **Increase**
                                                    **Decrease**(millions)Effect
                                                        on total service and interest
                                                        component
                                                    
                                                    $
                                                    0.1
                                                    
                                                    $
                                                    (0.1
                                                    )Effect
                                                        on postretirement benefit
                                                        obligation
                                                    
                                                    
                                                    0.7
                                                    
                                                    
                                                    (0.7
                                                    )
 The
                                              Company expects to contribute $20.0
                                              million to the plans in 2006, which
                                              includes
                                              $6.0 million to meet ERISA funding
                                              requirements, all of which will be
                                              paid by
                                              KCP&L. The Company will also contribute
                                              $4.6 million to other postretirement
                                              benefit plans in 2006, $4.3 million
                                              of which will be paid by KCP&L. The
                                              Company’s funding policy is to contribute amounts
                                              sufficient to meet the ERISA
                                              minimum funding requirements plus additional
                                              amounts as considered appropriate;
                                              therefore, actual contributions may
                                              differ from expected contributions.
                                              The
                                              following benefit payments, which reflect
                                              expected future service, as
                                              appropriate, are expected to be paid
                                              through 2015.
 **Pension**
                                                    
                                                    **Other****Benefits**
                                                    
                                                    **Benefits**(millions)2006
                                                    
                                                    $
                                                    43.8
                                                    
                                                    $
                                                    6.02007
                                                    
                                                    
                                                    43.2
                                                    
                                                    
                                                    7.02008
                                                    
                                                    
                                                    41.8
                                                    
                                                    
                                                    7.72009
                                                    
                                                    
                                                    42.7
                                                    
                                                    
                                                    8.62010
                                                    
                                                    
                                                    45.6
                                                    
                                                    
                                                    9.32011-2015
                                                    
                                                    
                                                    230.3
                                                    
                                                    
                                                    57.1
 **Employee
                                              Savings Plans**
 Great
                                              Plains Energy has defined contribution
                                              savings plans that cover substantially
                                              all employees. The Company matches
                                              employee contributions, subject to
                                              limits.
                                              The annual cost of the plans was $4.8
                                              million, $4.9 million and $4.7
                                              million in 2005, 2004 and 2003, respectively.
                                              Consolidated KCP&L’s annual
                                              cost of the plans was approximately
                                              $3.1 million for each of the last three
                                              years.
  **Strategic
                                              Energy Phantom Stock Plan**
 Strategic
                                              Energy had a phantom stock plan that
                                              provided incentive in the form of deferred
                                              compensation based upon the award of
                                              performance units, the value of which
                                              was
                                              related to the increase in profitability
                                              of Strategic Energy. The plan was
                                              terminated and an insignificant amount
                                              of costs were recorded in 2004. Strategic
                                              Energy’s annual cost for the plan was $4.6 million
                                              in 2003.
  **Cash-Based
                                              Long-Term Incentives**
 In
                                              2005,
                                              Strategic Energy initiated long-term
                                              incentives designed to reward officers
                                              and
                                              key members of management with Great
                                              Plains Energy restricted stock (issued
                                              under the Company’s Long-Term Incentive Plan) and a cash
                                              performance payment for
                                              achieving specific performance goals
                                              over stated periods of time, commencing
                                              January 1, 2005. The restricted stock
                                              compensation expense is discussed in
                                              Note
                                              10. In 2005, compensation expense of
                                              $1.6 million was
                                              recognized for the cash-based incentives.
  **10.**
                                                  **EQUITY
                                                      COMPENSATION**  The
                                              Company’s Long-Term Incentive Plan is an equity
                                              compensation plan approved by
                                              its shareholders. The Long-Term Incentive
                                              Plan permits the grant of restricted
                                              stock, stock options, limited stock
                                              appreciation rights and performance
                                              shares
                                              to officers and other employees of
                                              the Company and its subsidiaries. In
                                              accordance with the provisions of SFAS
                                              No. 123, compensation expense and 
 94
 accrued
                                              dividends related to equity compensation
                                              are recognized over the stated vesting
                                              period. Forfeitures of equity compensation
                                              are recognized when incurred and
                                              previously recorded compensation expense
                                              related to the forfeited shares is
                                              reversed. The maximum number of shares
                                              of Great Plains Energy common stock
                                              that
                                              can be issued under the plan is 3.0
                                              million .
                                              At
                                              December 31, 2005, 2.0 million shares
                                              remained available for future issuance.
  **Stock
                                              Options Granted 2001 - 2003**
 Stock
                                              options were granted under the plan
                                              at market value of the shares on the
                                              grant
                                              date. The options vest three years
                                              after the grant date and expire in
                                              ten years
                                              if not exercised. Exercise prices range
                                              from $24.90 to $27.73 and the
                                              weighted-average remaining contractual
                                              life at December 31, 2005 was 6
                                              years .
                                              In
                                              accordance with the provisions of SFAS
                                              No. 123, the Company recognized an
                                              insignificant amount of compensation
                                              expense in 2005, 2004 and 2003.
  The
                                              fair
                                              value for the stock options granted
                                              in 2001 - 2003 was estimated at the
                                              date of
                                              grant using the Black-Scholes option-pricing
                                              model. The option valuation model
                                              requires the input of highly subjective
                                              assumptions, primarily stock price
                                              volatility, changes in which can materially
                                              affect the fair value estimate. The
                                              weighted-average assumptions used are
                                              detailed in the following
                                              table .
 **2003**Risk-free
                                                        interest rate
                                                    
                                                    4.77
                                                    %Dividend
                                                        yield
                                                    
                                                    6.88
                                                    %Stock
                                                        volatility
                                                    
                                                    22.65
                                                    %Expected
                                                        option life (in years)
                                                    
                                                    10
 All
                                              stock
                                              option activity for the last three
                                              years is summarized in the following
                                              table .
 **2005**
                                                    **2004**
                                                    **2003****Shares**
                                                    **Price***
                                                    **Shares**
                                                    **Price***
                                                    **Shares**
                                                    **Price***Beginning
                                                        balance
                                                    
                                                    
                                                    195,973
                                                    
                                                    $
                                                    25.48
                                                    
                                                    
                                                    241,898
                                                    
                                                    $
                                                    25.41
                                                    
                                                    
                                                    397,000
                                                    
                                                    $
                                                    25.21Granted
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    27,898
                                                    
                                                    
                                                    27.73Exercised
                                                    
                                                    
                                                    (68,000
                                                    )
                                                    
                                                    25.08
                                                    
                                                    
                                                    (26,000
                                                    )
                                                    
                                                    24.79
                                                    
                                                    
                                                    (16,000
                                                    )
                                                    
                                                    26.19Forfeited
                                                    
                                                    
                                                    (16,518
                                                    )
                                                    
                                                    26.57
                                                    
                                                    
                                                    (19,925
                                                    )
                                                    
                                                    25.50
                                                    
                                                    
                                                    (167,000
                                                    )
                                                    
                                                    25.26Ending
                                                        balance
                                                    
                                                    
                                                    111,455
                                                    
                                                    $
                                                    25.56
                                                    
                                                    
                                                    195,973
                                                    
                                                    $
                                                    25.48
                                                    
                                                    
                                                    241,898
                                                    
                                                    $
                                                    25.41Exercisable
                                                        at December 31
                                                    
                                                    
                                                    95,000
                                                    
                                                    $
                                                    25.19
                                                    
                                                    
                                                    75,000
                                                    
                                                    $
                                                    25.43
                                                    
                                                    
                                                    7,000
                                                    
                                                    $
                                                    21.67*
                                                        weighted-average price
 **Performance
                                              Shares**
 The
                                              payment of performance shares is contingent
                                              upon achievement of specific
                                              performance goals over a stated period
                                              of time as approved by the Compensation
                                              and Development Committee of the Company’s Board of Directors. The number of
                                              performance shares ultimately paid
                                              can vary from the number of shares
                                              initially
                                              granted depending on Company performance
                                              over stated performance periods.
                                              Performance shares have a value equal
                                              to the market value of the shares on
                                              the
                                              grant date with accruing dividends.
                                              Performance share activity for the
                                              last
                                              three years is summarized in the following
                                              table.
 **2005**
                                                    **2004**
                                                    **2003**Beginning
                                                        balance
                                                    
                                                    
                                                    19,313
                                                    
                                                    
                                                    20,744
                                                    
                                                    
                                                    144,500Granted
                                                    
                                                    
                                                    182,130
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    20,744Cancelled
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    (144,500
                                                    )Forfeited
                                                    
                                                    
                                                    (28,682
                                                    )
                                                    
                                                    (1,431
                                                    )
                                                    
                                                    -Ending
                                                        balance
                                                    
                                                    
                                                    172,761
                                                    
                                                    
                                                    19,313
                                                    
                                                    
                                                    20,744
 95
 Compensation
                                              expense for performance shares is recognized
                                              over the performance period. In
                                              2005, the Company recognized compensation
                                              expense of $1.2 million and
                                              reversed an insignificant amount related
                                              to forfeited shares. The Company
                                              recognized an insignificant amount
                                              of compensation expense in 2004 and
                                              $0.4
                                              million in 2003. No compensation expense
                                              had been recorded related to
                                              performance shares cancelled in 2003.
  **Restricted
                                              Stock**
 Restricted
                                              stock cannot be sold or otherwise transferred
                                              by the recipient prior to vesting
                                              and has a value equal to the fair market
                                              value of the shares on the grant date.
                                              Restricted stock shares issued in 2003
                                              totaling 57,315 vested in 2003 and
                                              were
                                              issued out of treasury stock; however,
                                              54,436 of these shares were restricted
                                              as
                                              to transfer until December 31, 2004,
                                              but were considered vested under SFAS
                                              No.
                                              123 because the employee’s right to retain the shares of stock
                                              was not
                                              contingent upon remaining in the service
                                              of the Company and was not contingent
                                              upon achievement of performance conditions.
                                              All other restricted stock shares
                                              issued vest on a graded schedule over
                                              a stated period of time with accruing
                                              reinvested dividends. Restricted stock
                                              activity for the last three years is
                                              summarized in the following table .
 **2005**
                                                    
                                                    **2004**
                                                    
                                                    **2003**Beginning
                                                        balance
                                                    
                                                    
                                                    76,214
                                                    
                                                    
                                                    62,881
                                                    
                                                    
                                                    -Granted(a)
                                                    
                                                    
                                                    79,872
                                                    
                                                    
                                                    13,333
                                                    
                                                    
                                                    120,196Vested
                                                    
                                                    
                                                    (25,404
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    (57,315
                                                    )Forfeited
                                                    
                                                    
                                                    (10,716
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    -Ending
                                                        balance
                                                    
                                                    
                                                    119,966
                                                    
                                                    
                                                    76,214
                                                    
                                                    
                                                    62,881(a) Restricted
                                                                        stock shares
                                                                        granted in
                                                                        2005 totaling
                                                                        3,497 were
                                                                        issued out
                                                                        oftreasury
                                                        stock. Restricted stock shares
                                                        issued in 2003 totaling
                                                        57,315vested in 2003 and were issued
                                                        out of treasury stock.
 Compensation
                                              expense for restricted stock is recognized
                                              over the vesting period. The Company
                                              recognized compensation expense of
                                              $1.4 million ,
                                              $0.6
                                              million and $1.8 million in 2005,
                                              2004 and 2003, respectively and reversed
                                              an insignificant amount related to
                                              forfeited shares in 2005.
  **11.**
                                                  **TAXES**  Components
                                              of income taxes are detailed in the
                                              following tables .
 **Great
                                                        Plains Energy**
                                                    
                                                    **2005**
                                                    
                                                    **2004**
                                                    
                                                    **2003**Current
                                                        income taxes
                                                    
                                                    (millions)Federal
                                                    
                                                    $
                                                    64.3
                                                    
                                                    $
                                                    19.9
                                                    
                                                    $
                                                    12.1State
                                                    
                                                    
                                                    1.3
                                                    
                                                    
                                                    13.3
                                                    
                                                    
                                                    8.9Total
                                                    
                                                    
                                                    65.6
                                                    
                                                    
                                                    33.2
                                                    
                                                    
                                                    21.0Deferred
                                                        income taxesFederal
                                                    
                                                    
                                                    (4.2
                                                    )
                                                    
                                                    45.8
                                                    
                                                    
                                                    23.3State
                                                    
                                                    
                                                    (18.8
                                                    )
                                                    
                                                    (15.5
                                                    )
                                                    
                                                    3.5Total
                                                    
                                                    
                                                    (23.0
                                                    )
                                                    
                                                    30.3
                                                    
                                                    
                                                    26.8Investment
                                                        tax credit amortization
                                                    
                                                    
                                                    (3.9
                                                    )
                                                    
                                                    (4.0
                                                    )
                                                    
                                                    (4.0
                                                    )Total
                                                        income tax expense
                                                    
                                                    
                                                    38.7
                                                    
                                                    
                                                    59.5
                                                    
                                                    
                                                    43.8Less:
                                                        taxes on discontinuedoperations
                                                        (Note 8)Current
                                                        tax benefit
                                                    
                                                    
                                                    (1.0
                                                    )
                                                    
                                                    (5.0
                                                    )
                                                    
                                                    (31.1
                                                    )Deferred
                                                        tax (benefit) expense
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    10.0
                                                    
                                                    
                                                    (3.7
                                                    )Income
                                                        taxes on continuing operations
                                                    
                                                    $
                                                    39.7
                                                    
                                                    $
                                                    54.5
                                                    
                                                    $
                                                    78.6
 96
 **Consolidated
                                                        KCP&L**
                                                    
                                                    **2005**
                                                    **2004**
                                                    **2003**Current
                                                        income taxes
                                                    
                                                    (millions)Federal
                                                    
                                                    $
                                                    79.9
                                                    
                                                    $
                                                    39.2
                                                    
                                                    $
                                                    26.1State
                                                    
                                                    
                                                    5.6
                                                    
                                                    
                                                    6.7
                                                    
                                                    
                                                    5.7Total
                                                    
                                                    
                                                    85.5
                                                    
                                                    
                                                    45.9
                                                    
                                                    
                                                    31.8Deferred
                                                        income taxesFederal
                                                    
                                                    
                                                    (14.3
                                                    )
                                                    
                                                    22.2
                                                    
                                                    
                                                    37.1State
                                                    
                                                    
                                                    (19.1
                                                    )
                                                    
                                                    (11.3
                                                    )
                                                    
                                                    6.8Total
                                                    
                                                    
                                                    (33.4
                                                    )
                                                    
                                                    10.9
                                                    
                                                    
                                                    43.9Investment
                                                        tax credit amortization
                                                    
                                                    
                                                    (3.9
                                                    )
                                                    
                                                    (4.0
                                                    )
                                                    
                                                    (4.0
                                                    )Total
                                                        income tax expense
                                                    
                                                    
                                                    48.2
                                                    
                                                    
                                                    52.8
                                                    
                                                    
                                                    71.7Less:
                                                        taxes on discontinuedoperations
                                                        (Note 8)Current
                                                        tax (benefit) expense
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    (21.5
                                                    )Deferred tax expense
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    9.7Income
                                                        taxes on continuing operations
                                                    
                                                    $
                                                    48.2
                                                    
                                                    $
                                                    52.8
                                                    
                                                    $
                                                    83.5
 **Income
                                              Tax Expense and Effective Income Tax
                                              Rates**
 Income
                                              tax expense and the effective income
                                              tax rates reflected in continuing
                                              operations in the financial statements
                                              and the reasons for their differences
                                              from the statutory federal rates are
                                              detailed in the following
                                              tables .
 **Income
                                                        Tax Expense**
                                                    
                                                    **Income
                                                        Tax Rate****Great
                                                        Plains Energy**
                                                    
                                                    **2005**
                                                    **2004**
                                                    **2003**
                                                    **2005**
                                                    **2004**
                                                    **2003**(millions)Federal
                                                        statutory income tax
                                                    
                                                    $
                                                    71.4
                                                    
                                                    $
                                                    79.8
                                                    
                                                    $
                                                    93.9
                                                    
                                                    
                                                    35.0
                                                    %
                                                    
                                                    35.0
                                                    %
                                                    
                                                    35.0
                                                    %Differences
                                                        between book and taxdepreciation
                                                        not normalized
                                                    
                                                    
                                                    2.3
                                                    
                                                    
                                                    1.4
                                                    
                                                    
                                                    3.9
                                                    
                                                    
                                                    1.1
                                                    
                                                    
                                                    0.6
                                                    
                                                    
                                                    1.5Amortization
                                                        of investment tax credits
                                                    
                                                    
                                                    (3.9
                                                    )
                                                    
                                                    (4.0
                                                    )
                                                    
                                                    (4.0
                                                    )
                                                    
                                                    (1.9
                                                    )
                                                    
                                                    (1.7
                                                    )
                                                    
                                                    (1.5
                                                    )Federal
                                                        income tax credits
                                                    
                                                    
                                                    (10.0
                                                    )
                                                    
                                                    (12.8
                                                    )
                                                    
                                                    (14.4
                                                    )
                                                    
                                                    (4.9
                                                    )
                                                    
                                                    (5.6
                                                    )
                                                    
                                                    (5.4
                                                    )State
                                                        income taxes
                                                    
                                                    
                                                    2.7
                                                    
                                                    
                                                    7.9
                                                    
                                                    
                                                    8.2
                                                    
                                                    
                                                    1.3
                                                    
                                                    
                                                    3.5
                                                    
                                                    
                                                    3.0Changes
                                                        in uncertain tax positions,
                                                        net
                                                    
                                                    
                                                    (7.9
                                                    )
                                                    
                                                    (3.4
                                                    )
                                                    
                                                    12.0
                                                    
                                                    
                                                    (3.9
                                                    )
                                                    
                                                    (1.5
                                                    )
                                                    
                                                    4.5Rate
                                                        changes on deferred taxes
                                                    
                                                    
                                                    (11.7
                                                    )
                                                    
                                                    (8.6
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    (5.8
                                                    )
                                                    
                                                    (3.8
                                                    )
                                                    
                                                    -Valuation
                                                        allowance
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    0.5
                                                    
                                                    
                                                    (15.8
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    0.2
                                                    
                                                    
                                                    (5.9
                                                    )Other
                                                    
                                                    
                                                    (3.2
                                                    )
                                                    
                                                    (6.3
                                                    )
                                                    
                                                    (5.2
                                                    )
                                                    
                                                    (1.4
                                                    )
                                                    
                                                    (2.8
                                                    )
                                                    
                                                    (1.9
                                                    )Total
                                                    
                                                    $
                                                    39.7
                                                    
                                                    $
                                                    54.5
                                                    
                                                    $
                                                    78.6
                                                    
                                                    
                                                    19.5
                                                    %
                                                    
                                                    23.9
                                                    %
                                                    
                                                    29.3
                                                    %
 **Income
                                                        Tax Expense**
                                                    
                                                    **Income
                                                        Tax Rate****Consolidated
                                                        KCP&L**
                                                    
                                                    **2005**
                                                    
                                                    **2004**
                                                    
                                                    **2003**
                                                    
                                                    **2005**
                                                    
                                                    **2004**
                                                    
                                                    **2003**(millions)Federal
                                                        statutory income tax
                                                    
                                                    $
                                                    67.1
                                                    
                                                    $
                                                    68.6
                                                    
                                                    $
                                                    73.3
                                                    
                                                    
                                                    35.0
                                                    %
                                                    
                                                    35.0
                                                    %
                                                    
                                                    35.0
                                                    %Differences
                                                        between book and taxdepreciation
                                                        not normalized
                                                    
                                                    
                                                    2.3
                                                    
                                                    
                                                    1.4
                                                    
                                                    
                                                    3.9
                                                    
                                                    
                                                    1.2
                                                    
                                                    
                                                    0.7
                                                    
                                                    
                                                    1.9Amortization
                                                        of investment tax credits
                                                    
                                                    
                                                    (3.9
                                                    )
                                                    
                                                    (4.0
                                                    )
                                                    
                                                    (4.0
                                                    )
                                                    
                                                    (2.0
                                                    )
                                                    
                                                    (2.0
                                                    )
                                                    
                                                    (1.9
                                                    )State
                                                        income taxes
                                                    
                                                    
                                                    4.2
                                                    
                                                    
                                                    7.0
                                                    
                                                    
                                                    7.1
                                                    
                                                    
                                                    2.2
                                                    
                                                    
                                                    3.6
                                                    
                                                    
                                                    3.4Changes
                                                        in uncertain tax positions,
                                                        net
                                                    
                                                    
                                                    (1.7
                                                    )
                                                    
                                                    (2.7
                                                    )
                                                    
                                                    3.9
                                                    
                                                    
                                                    (0.9
                                                    )
                                                    
                                                    (1.4
                                                    )
                                                    
                                                    1.9Rate
                                                        changes on deferred taxes
                                                    
                                                    
                                                    (11.7
                                                    )
                                                    
                                                    (8.6
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    (6.1
                                                    )
                                                    
                                                    (4.4
                                                    )
                                                    
                                                    -Allocation
                                                        of parent company tax benefits
                                                    
                                                    
                                                    (5.4
                                                    )
                                                    
                                                    (5.9
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    (2.8
                                                    )
                                                    
                                                    (3.0
                                                    )
                                                    
                                                    -Other
                                                    
                                                    
                                                    (2.7
                                                    )
                                                    
                                                    (3.0
                                                    )
                                                    
                                                    (0.7
                                                    )
                                                    
                                                    (1.5
                                                    )
                                                    
                                                    (1.5
                                                    )
                                                    
                                                    (0.4
                                                    )Total
                                                    
                                                    $
                                                    48.2
                                                    
                                                    $
                                                    52.8
                                                    
                                                    $
                                                    83.5
                                                    
                                                    
                                                    25.1
                                                    %
                                                    
                                                    27.0
                                                    %
                                                    
                                                    39.9
                                                    %
 
 97
 During
                                              2005, Great Plains Energy and consolidated
                                              KCP&L’s income tax expense
                                              decreased by $7.5 million and $6.3
                                              million, respectively, due to the favorable
                                              impact of sustained audited positions
                                              on the companies’ composite tax rates.
                                              Great Plains Energy’s income tax expense was also reduced
                                              by $5.7 million due to
                                              events during 2005 that strengthened
                                              the probability of sustaining tax
                                              deductions taken on previously filed
                                              tax returns.
  SFAS
                                              No.
                                              109 requires the companies to adjust
                                              deferred tax balances to reflect tax
                                              rates
                                              that are anticipated to be in effect
                                              when the differences reverse. The largest
                                              component of the companies’ decreases in effective income tax rates
                                              in 2005 and
                                              2004 was the result of adjusting KCP&L’s deferred tax balance to its lower
                                              composite tax rate due to the impact
                                              of sustained audited positions and
                                              state
                                              tax planning. The impact of the composite
                                              tax rate reductions on the deferred
                                              tax balances resulted in tax benefits
                                              for Great Plains Energy and consolidated
                                              KCP&L of $11.7 million in 2005 and $8.6
                                              million in 2004.
  **Deferred
                                              Income Taxes**
 The
                                              tax
                                              effects of major temporary differences
                                              resulting in deferred income tax assets
                                              (liabilities) in the consolidated balance
                                              sheets are in the following
                                              tables .
 **Great
                                                        Plains Energy**
                                                    
                                                    **Consolidated
                                                        KCP&L****December
                                                        31**
                                                    
                                                    **2005**
                                                    
                                                    **2004**
                                                    
                                                    **2005**
                                                    
                                                    **2004**Current
                                                        deferred income taxes
                                                    
                                                    (millions)Nuclear
                                                        fuel outage
                                                    
                                                    $
                                                    3.4
                                                    
                                                    $
                                                    5.1
                                                    
                                                    $
                                                    3.4
                                                    
                                                    $
                                                    5.1Derivative
                                                        instruments
                                                    
                                                    
                                                    (11.2
                                                    )
                                                    
                                                    (1.2
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    0.1Accrued
                                                        vacation
                                                    
                                                    
                                                    4.7
                                                    
                                                    
                                                    4.5
                                                    
                                                    
                                                    4.7
                                                    
                                                    
                                                    3.8Other
                                                    
                                                    
                                                    1.8
                                                    
                                                    
                                                    4.7
                                                    
                                                    
                                                    0.8
                                                    
                                                    
                                                    3.8Net
                                                        current deferred income tax
                                                        asset(liability)
                                                    
                                                    
                                                    (1.3
                                                    )
                                                    
                                                    13.1
                                                    
                                                    
                                                    8.9
                                                    
                                                    
                                                    12.8Noncurrent
                                                        deferred income taxesPlant
                                                        related
                                                    
                                                    
                                                    (554.2
                                                    )
                                                    
                                                    (556.5
                                                    )
                                                    
                                                    (554.2
                                                    )
                                                    
                                                    (556.5
                                                    )Income
                                                        taxes on future regulatory
                                                        recoveries
                                                    
                                                    
                                                    (85.7
                                                    )
                                                    
                                                    (81.0
                                                    )
                                                    
                                                    (85.7
                                                    )
                                                    
                                                    (81.0
                                                    )Derivative
                                                        instruments
                                                    
                                                    
                                                    (11.1
                                                    )
                                                    
                                                    (0.5
                                                    )
                                                    
                                                    (4.5
                                                    )
                                                    
                                                    -Pension
                                                        and postretirement benefits
                                                    
                                                    
                                                    (8.0
                                                    )
                                                    
                                                    (9.0
                                                    )
                                                    
                                                    (8.4
                                                    )
                                                    
                                                    (9.2
                                                    )Storm
                                                        related costs
                                                    
                                                    
                                                    (1.9
                                                    )
                                                    
                                                    (3.7
                                                    )
                                                    
                                                    (1.9
                                                    )
                                                    
                                                    (3.7
                                                    )Debt
                                                        issuance costs
                                                    
                                                    
                                                    (2.7
                                                    )
                                                    
                                                    (2.8
                                                    )
                                                    
                                                    (2.7
                                                    )
                                                    
                                                    (2.8
                                                    )Gas
                                                        properties related
                                                    
                                                    
                                                    (1.3
                                                    )
                                                    
                                                    (3.4
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    -SO2emission
                                                        allowance sales
                                                    
                                                    
                                                    24.2
                                                    
                                                    
                                                    1.3
                                                    
                                                    
                                                    24.2
                                                    
                                                    
                                                    1.3Tax
                                                        credit carryforwards
                                                    
                                                    
                                                    16.0
                                                    
                                                    
                                                    23.7
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -Alternative
                                                        minimum tax credit carryforward
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    4.1
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -State
                                                        net operating loss carryforward
                                                    
                                                    
                                                    0.5
                                                    
                                                    
                                                    0.5
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -Other
                                                    
                                                    
                                                    3.3
                                                    
                                                    
                                                    (4.4
                                                    )
                                                    
                                                    6.2
                                                    
                                                    
                                                    (2.1
                                                    )Net
                                                        noncurrent deferred tax liability
                                                        beforevaluation
                                                        allowance
                                                    
                                                    
                                                    (620.9
                                                    )
                                                    
                                                    (631.7
                                                    )
                                                    
                                                    (627.0
                                                    )
                                                    
                                                    (654.0
                                                    )Valuation
                                                        allowance
                                                    
                                                    
                                                    (0.5
                                                    )
                                                    
                                                    (0.5
                                                    )
                                                    
                                                    -
                                                    
                                                    
                                                    -Net
                                                        noncurrent deferred tax liability
                                                    
                                                    
                                                    (621.4
                                                    )
                                                    
                                                    (632.2
                                                    )
                                                    
                                                    (627.0
                                                    )
                                                    
                                                    (654.0
                                                    )Net deferred income tax liability
                                                    
                                                    $
                                                    (622.7
                                                    )
                                                    $
                                                    (619.1
                                                    )
                                                    $
                                                    (618.1
                                                    )
                                                    $
                                                    (641.2
                                                    )
 **Great
                                                        Plains Energy**
                                                    
                                                    **Consolidated
                                                        KCP&L****December
                                                        31**
                                                    
                                                    
                                                    **2005**
                                                    
                                                    
                                                    **2004**
                                                    
                                                    
                                                    **2005**
                                                    
                                                    
                                                    **2004**(millions)Gross
                                                        deferred income tax assets
                                                    
                                                    $
                                                    120.3
                                                    
                                                    $
                                                    144.3
                                                    
                                                    $
                                                    100.3
                                                    
                                                    $
                                                    120.8Gross
                                                        deferred income tax liabilities
                                                    
                                                    
                                                    (743.0
                                                    )
                                                    
                                                    (763.4
                                                    )
                                                    
                                                    (718.4
                                                    )
                                                    
                                                    (762.0
                                                    )Net
                                                        deferred income tax liability
                                                    
                                                    $
                                                    (622.7
                                                    )
                                                    $
                                                    (619.1
                                                    )
                                                    $
                                                    (618.1
                                                    )
                                                    $
                                                    (641.2
                                                    )
 
 98
 **Tax
                                              Credit Carryforwards**
 At
                                              December 31, 2005, the Company had
                                              $16.0 million of state income tax credit
                                              carryforwards. These credits relate
                                              primarily to the Company’s Missouri
                                              affordable housing investment portfolio,
                                              and the carryforwards expire in years
                                              2008 to 2010. Management believes the
                                              credits will be fully utilized within
                                              the
                                              carryforward period.
  **Net
                                              Operating Loss Carryforwards**
 At
                                              December 31, 2004, KLT Inc. and subsidiaries
                                              had Kansas state net operating loss
                                              carryforwards of $10.0 million primarily
                                              resulting from losses associated with
                                              DTI. KLT Inc. and subsidiaries moved
                                              its corporate headquarters to Missouri
                                              in
                                              2003, and as a result, will not have
                                              sufficient presence in Kansas to utilize
                                              the losses. The Kansas state net operating
                                              loss carryforwards expire in years
                                              2011 to 2012. In 2004, management determined
                                              that the loss carryforwards will
                                              more likely than not expire unutilized
                                              and has provided a valuation allowance
                                              against the entire $0.5 million deferred
                                              state income tax benefit.
  **Uncertain
                                              Tax Positions**
 Management
                                              evaluates and records tax liabilities
                                              for uncertain tax positions based on
                                              the
                                              probability of ultimately sustaining
                                              the tax deductions or income positions.
                                              Management assesses the probabilities
                                              of successfully defending the tax
                                              deductions or income positions based
                                              upon statutory, judicial or administrative
                                              authority.
  At
                                              December 31, 2005 and 2004, the Company
                                              had $4.6 million and $13.4 million,
                                              respectively, of liabilities for uncertain
                                              tax positions related to tax
                                              deductions or income positions taken
                                              on the Company’s tax returns. Consolidated
                                              KCP&L had liabilities of $1.2 million and $3.7 million at
                                              December 31, 2005 and 2004, respectively. Management
                                              believes the tax
                                              deductions or income positions are
                                              properly treated on such tax returns,
                                              but has
                                              recorded reserves based upon its assessment
                                              of the probabilities that certain
                                              deductions or income positions may
                                              not be sustained when the returns are
                                              audited. The tax returns containing
                                              these tax deductions or income positions
                                              are
                                              currently under audit or will likely
                                              be audited. The timing of the resolution
                                              of
                                              these audits is uncertain. If the positions
                                              are ultimately sustained, the
                                              Company will reverse these tax provisions
                                              to net income. If the positions are
                                              not ultimately sustained, the Company
                                              may be required to make cash payments
                                              plus
                                              interest and/or utilize the Company’s federal and state credit carryforwards.
                                              During 2005, the Company reversed $9.2
                                              million of previously recorded
                                              liabilities for uncertain tax positions
                                              primarily due to sustained audited
                                              tax
                                              positions and the occurrence of events
                                              that strengthen the probability of
                                              successfully defending deductions taken
                                              on its tax returns. During 2005,
                                              consolidated KCP&L reversed $2.0 million of tax liabilities
                                              for uncertain
                                              tax positions.
  **Internal
                                              Revenue Service Settlement**
 In
                                              November 2002, KCP&L accepted a settlement offer related
                                              to the proposed
                                              disallowance of interest deductions
                                              on corporate-owned life insurance (COLI)
                                              loans. The offer allowed 20% of the
                                              interest originally deducted and taxed
                                              only
                                              20% of the gain on surrender of the
                                              COLI policies. KCP&L surrendered the
                                              policies in February 2003. KCP&L paid $1.3 million to the IRS in 2003
                                              to
                                              satisfy the liability associated with
                                              the surrender. In December 2004, KCP&L
                                              settled the 1995-1999 IRS audit and
                                              paid tax of $7.3 million and interest
                                              of
                                              $4.2 million related to the disallowed
                                              COLI interest deduction. KCP&L
                                              accrued for these payments in 2000.
  In
                                              addition to COLI, as part of the settlement
                                              of the 1995-1999 IRS audit,
                                              consolidated KCP&L agreed to additional tax of $6.9
                                              million and interest of
                                              $5.9 million related primarily to timing
                                              differences. This settlement did not
                                              have a significant impact on consolidated
                                              KCP&L’s net income because the
                                              liability had been previously recorded
                                              in the liabilities for uncertain tax
                                              positions or had offsetting impacts
                                              on deferred taxes. 
 99
  **12.**
                                                  **RELATED
                                                      PARTY TRANSACTIONS AND RELATIONSHIPS**  Consolidated
                                              KCP&L receives various support and administrative
                                              services from Services.
                                              These services are billed to consolidated
                                              KCP&L at cost, based on payroll
                                              and other expenses, incurred by Services
                                              for the benefit of consolidated
                                              KCP&L. These costs totaled $42.6 million ,
                                              $62.7
                                              million and $45.2 million for 2005,
                                              2004 and 2003, respectively. These
                                              costs
                                              consisted primarily of employee compensation,
                                              benefits and fees associated with
                                              various professional services. At December
                                              31, 2005 and 2004, consolidated
                                              KCP&L had a net intercompany payable to
                                              Services of $3.5 million and
                                              $9.2
                                              million, respectively. In 2005, approximately
                                              80% of Services’ employees were
                                              transferred to KCP&L to better align resources with the
                                              operating business.
  **13.**
                                                  **COMMITMENTS
                                                      AND CONTINGENCIES**  **Environmental
                                              Matters**
 The
                                              Company is subject to regulation by
                                              federal, state and local authorities
                                              with
                                              regard to air and other environmental
                                              matters primarily through KCP&L’s
                                              operations. The generation, transmission
                                              and distribution of electricity
                                              produces and requires disposal of certain
                                              hazardous products that are subject
                                              to
                                              these laws and regulations. In addition
                                              to imposing continuing compliance
                                              obligations, these laws and regulations
                                              authorize the imposition of substantial
                                              penalties for noncompliance, including
                                              fines, injunctive relief and other
                                              sanctions. Failure to comply with these
                                              laws and regulations could have a
                                              material adverse effect on consolidated
                                              KCP&L and Great Plains
                                              Energy.
  KCP&L
                                              operates in an environmentally responsible
                                              manner and seeks to use current
                                              technology to avoid and treat contamination.
                                              KCP&L regularly conducts
                                              environmental audits designed to ensure
                                              compliance with governmental regulations
                                              and to detect contamination. At December
                                              31, 2005 and 2004, KCP&L had
                                              $0.3 million
                                              accrued for environmental remediation
                                              expenses. The accrual covers water
                                              monitoring at one site. The amounts
                                              accrued were established on an undiscounted
                                              basis and KCP&L does not currently have an estimated
                                              time frame over which
                                              the accrued amounts may be paid out.
  Environmental-related
                                              legislation is continuously introduced
                                              in Congress. Such legislation typically
                                              includes various compliance dates and
                                              compliance limits. Such legislation
                                              could
                                              have the potential for a significant
                                              financial impact on KCP&L, including
                                              the installation of new pollution control
                                              equipment to achieve compliance.
                                              However, KCP&L would seek recovery of capital costs
                                              and expenses for such
                                              compliance through rates. KCP&L will continue to monitor proposed
                                              legislation.
  The
                                              following table contains
                                              estimates of expenditures to comply
                                              with environmental laws and regulations
                                              described below. The allocation between
                                              states is based on location of the
                                              facilities and has no bearing as to
                                              recovery in jurisdictional
                                              rates.
 **Clean
                                                        Air Estimated Required**
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    **Estimated****Environmental
                                                        Expenditures**
                                                    
                                                    **Missouri**
                                                    
                                                    **Kansas**
                                                    
                                                    **Total**
                                                    **Timetable**(millions)CAIR
                                                    $
                                                    395
                                                    -
                                                    575
                                                    $
                                                    
                                                    -
                                                    
                                                    $
                                                    395
                                                    -
                                                    575
                                                    2005
                                                        - 2015Incremental
                                                        BART
                                                    
                                                    55
                                                    -
                                                    85
                                                    
                                                    225
                                                    -
                                                    325
                                                    
                                                    280
                                                    -
                                                    410
                                                    2005
                                                        - 2013Incremental
                                                        CAMR
                                                    
                                                    48
                                                    -
                                                    70
                                                    
                                                    4
                                                    -
                                                    6
                                                    
                                                    52
                                                    -
                                                    76
                                                    2010
                                                        - 2018Comprehensive
                                                        energy plan retrofits
                                                    
                                                    (171)
                                                    
                                                    (101)
                                                    
                                                    (272)
                                                    2006
                                                        - 2008Estimated
                                                        required environmental expenditures
                                                        inexcess of the comprehensive
                                                        energy plan retrofits
                                                    $
                                                    327
                                                    -
                                                    559
                                                    $
                                                    128
                                                    -
                                                    230
                                                    $
                                                    455
                                                    -
                                                    789
 Expenditure
                                              estimates provided in the table above
                                              include, but are not limited to, the
                                              accelerated environmental upgrade expenditures
                                              included in the MPSC and KCC
                                              orders discussed in Note 5.
 100
 These
                                                expenditures are expected to reduce
                                                SO 2 ,
                                                NO x ,
                                                mercury
                                                and air particulate matter. KCP&L’s expectation is that any such
                                                expenditures will be recovered through
                                                rates.
  ***Clean
                                                Air Interstate Rule***
 The
                                                Environmental Protection Agency (EPA)
                                                Clean Air Interstate Rule (CAIR)
                                                requires
                                                reductions in SO 2 and
                                                NO x emissions in 28 states, including
                                                Missouri, and became effective July
                                                11, 2005.
                                                The reduction in both SO 2  and
                                                NO x emissions will be accomplished through
                                                establishment of permanent statewide
                                                caps
                                                for NO x effective January 1, 2009, and SO 2 effective January 1, 2010. More restrictive caps will
                                                be effective on
                                                January 1, 2015. KCP&L’s coal-fired plants located in Missouri
                                                are
                                                subject to CAIR, while its coal-fired
                                                plants in Kansas are not.
  KCP&L
                                                expects to meet the emissions reductions
                                                required by CAIR at its Missouri
                                                plants
                                                through a combination of pollution
                                                control capital projects and the
                                                purchase of
                                                emission allowances in the open market
                                                as needed. The final rule establishes
                                                a
                                                market-based cap-and-trade program.
                                                Missouri will establish an emission
                                                allowance allocation mechanism through
                                                a State Implementation Plan (SIP)
                                                that is
                                                expected to be issued by December
                                                2006. Facilities will demonstrate
                                                compliance
                                                with CAIR by holding sufficient allowances
                                                for each ton of SO 2 and
                                                NO x emitted
                                                in any given year with SO 2 emission
                                                allowances transferable among all
                                                regulated facilities nationwide and
                                                NO x emission
                                                allowances transferable among all
                                                regulated facilities within the 28
                                                CAIR
                                                states. KCP&L will also be allowed to utilize
                                                unused SO 2 emission
                                                allowances that it has banked from
                                                previous years of the Acid Rain Program
                                                to
                                                meet the more stringent CAIR requirements.
                                                At December 31, 2005, KCP&L had
                                                over 125,000 tons of SO 2 emission
                                                allowances, which are recorded in
                                                inventory at zero cost. KCP&L is permitted
                                                to sell excess SO 2 emission
                                                allowances in accordance with KCP&L’s comprehensive energy plan as approved
                                                by the MPSC and KCC. During 2005,
                                                KCP&L sold SO 2 emission
                                                allowances for proceeds of $61.0
                                                million. See Note
                                                5 for more information.
  Analysis
                                                of the final rule indicates that
                                                selective catalytic reduction technology
                                                for
                                                NO x control
                                                and scrubbers for SO 2 control
                                                will likely be required for KCP&L’s Montrose station, in addition to
                                                the
                                                environmental upgrades at Iatan No.
                                                1 included in the comprehensive energy
                                                plan.
                                                The timing of the installation of
                                                such control equipment is currently
                                                being
                                                developed. KCP&L continues to refine the preliminary
                                                cost estimates detailed
                                                in the table above and explore alternatives.
                                                The ultimate cost of these
                                                regulations could be significantly
                                                different from the amounts estimated.
                                                As
                                                discussed below, certain of the control
                                                technology for SO 2 and
                                                NO x will
                                                also aid in the control of mercury.
  ***Best
                                                Available Retrofit Technology Rule***
 In
                                                2005,
                                                the EPA published regulations on
                                                best available retrofit technology
                                                (BART) that
                                                amended its July 1999 regional haze
                                                regulations regarding emission controls
                                                for
                                                industrial facilities emitting air
                                                pollutants that reduce visibility.
                                                The BART
                                                regulations apply to specific eligible
                                                facilities and were effective September
                                                6, 2005. KCP&L coal-fired plants on the BART eligible
                                                list include LaCygne
                                                Nos. 1 and 2 in Kansas and Iatan
                                                No. 1 and Montrose No. 3 in Missouri.
                                                The CAIR
                                                suggests that states in CAIR that
                                                meet the CAIR requirement may also
                                                meet BART
                                                requirements for individual sources.
                                                Missouri is considering this proposal
                                                as
                                                part of the CAIR SIP, but no final
                                                decision has been reached. Kansas
                                                is not a
                                                CAIR state and therefore BART will
                                                likely impact LaCygne Nos. 1 and
                                                2. The BART
                                                rule directs state air quality agencies
                                                to identify whether emissions from
                                                sources subject to BART are below
                                                limits set by the state, or whether
                                                retrofit
                                                measures are needed to reduce emissions.
                                                States must submit a BART
                                                implementation plan in 2007 with
                                                required emission controls. If emission
                                                controls to comply with BART are
                                                required at LaCygne Nos. 1 and 2,
                                                additional
                                                capital expenditures will be required.
                                                KCP&L continues to refine its
                                                preliminary cost estimates detailed
                                                in the table above and explore alternatives.
                                                The ultimate cost of these regulations
                                                could be significantly different
                                                from the
                                                amounts estimated. 
 101
 ***Mercury
                                                Emissions***
 In
                                                2000,
                                                the National Research Council published
                                                its findings of a study under the
                                                Clean
                                                Air Act, which stated that power
                                                plants that burn fossil fuels, particularly
                                                coal, generate the greatest amount
                                                of mercury emissions from man-made
                                                sources.
                                                In 2005, the EPA reversed its December
                                                2000 finding that it was “appropriate and
                                                necessary” to regulate fossil fuel-fired power
                                                plants under section 112 of the
                                                Clean Air Act, concluding that the
                                                earlier finding lacked foundation
                                                and that
                                                recent information demonstrates that
                                                it is not appropriate or necessary
                                                to
                                                regulate fossil fuel-fired power
                                                plants under section 112. The EPA
                                                therefore
                                                removed coal- and oil-fired power
                                                plants from the section 112(c) list.
                                                Under
                                                section 112 of the Clean Air Act,
                                                the EPA would have been required
                                                to issue
                                                Maximum Available Control Technology
                                                standards for affected facilities
                                                and would
                                                have been prohibited from using cap
                                                and trade provisions for achieving
                                                compliance.
  In
                                                2005,
                                                the EPA published the Clean Air Mercury
                                                Rule (CAMR), which regulates mercury
                                                emissions from coal-fired power plants
                                                located in 48 states, including Kansas
                                                and Missouri, under the New Source
                                                Performance Standards of the Clean
                                                Air Act.
                                                The rule was effective July 18, 2005,
                                                and established a market-based
                                                cap-and-trade program that will reduce
                                                nationwide utility emissions of mercury
                                                in two phases. The first phase cap
                                                is effective January 1, 2010, and will
                                                establish a permanent nationwide
                                                cap of 38 tons of mercury for coal-fired
                                                power
                                                plants. Management anticipates meeting
                                                the first phase cap by taking advantage
                                                of KCP&L’s mercury reductions achieved through
                                                capital expenditures to
                                                comply with CAIR and BART. The second
                                                phase is effective January 1, 2018,
                                                and
                                                will establish a permanent nationwide
                                                cap of 15 tons of mercury for coal-fired
                                                power plants. When fully implemented,
                                                the rule will reduce utility emissions
                                                of
                                                mercury by nearly 70% from current
                                                emissions of 48 tons per year.
  Facilities
                                                will demonstrate compliance with
                                                the standard by holding allowances
                                                for each
                                                ounce of mercury emitted in any given
                                                year and allowances will be readily
                                                transferable among all regulated
                                                facilities nationwide. Under the
                                                cap-and-trade
                                                program, KCP&L will be able to purchase mercury
                                                allowances or elect to
                                                install pollution control equipment
                                                to achieve compliance. While it is
                                                expected
                                                that mercury allowances will be available
                                                in sufficient quantities for purchase
                                                in the 2010-2018 timeframe, the significant
                                                reduction in the nationwide cap in
                                                2018 may hamper KCP&L’s ability to obtain reasonably priced
                                                allowances
                                                beyond 2018. Management expects capital
                                                expenditures will be required to
                                                install
                                                additional pollution control equipment
                                                to meet the second phase cap. During
                                                the
                                                ensuing years, management will closely
                                                monitor advances in technology for
                                                removal of mercury from Powder River
                                                Basin (PRB) coal and expects to make
                                                decisions regarding second phase
                                                removal based on then available technology
                                                to
                                                meet the 2018 compliance date. The
                                                ultimate cost of this rule could
                                                be
                                                significantly different from the
                                                amounts estimated in the table above.
                                                KCP&L
                                                is a participant in the DOE project
                                                at the Sunflower Electric Holcomb
                                                plant to
                                                investigate control technology options
                                                for mercury removal from coal-fired
                                                plants burning sub-bituminous coal.
  In
                                                2005,
                                                the EPA agreed to reconsider certain
                                                aspects of the rule and to invite
                                                additional comments on certain aspects
                                                of the rule. However, in its
                                                reconsideration notice, the EPA reiterated
                                                its position that the methodology
                                                used for the risk analysis performed
                                                to justify the CAMR is sound and
                                                scientifically justified. Comments
                                                were due in December 2005. The EPA’s actions
                                                to de-list mercury under section
                                                112 of the Clean Air Act and issue
                                                CAMR remain
                                                controversial and subject to challenge.
  ***Carbon
                                                Dioxide***
 At
                                                a
                                                December 1997 meeting in Kyoto, Japan,
                                                delegates from 167 nations, including
                                                the
                                                U.S., agreed to a treaty (Kyoto Protocol)
                                                that would require a 7% reduction
                                                in
                                                U.S. CO 2 emissions below 1990 levels, a nearly
                                                30% cut from current levels. In 2001,
                                                the
                                                Bush administration announced it
                                                will not negotiate implementation
                                                of the Kyoto
                                                Protocol and it will not send the
                                                Kyoto Protocol to the U.S. Senate
                                                for
                                                ratification. 
 102
 In
                                                2002,
                                                President Bush unveiled his Clear
                                                Skies Initiative, which included
                                                a climate
                                                change policy. The climate change
                                                policy is a voluntary program that
                                                relies
                                                heavily on incentives to encourage
                                                industry to voluntarily limit emissions.
                                                The
                                                strategy includes tax credits, energy
                                                conservation programs, funding for
                                                research into new technologies, and
                                                a plan to encourage companies to
                                                track and
                                                report their emissions so that companies
                                                could gain credits for use in any
                                                future emissions trading program.
                                                The greenhouse strategy links growth
                                                in
                                                emissions of greenhouse gases to
                                                economic output. The administration's
                                                strategy
                                                is intended to reduce the greenhouse
                                                gas intensity of the U.S. economy
                                                by 18%
                                                over the next 10 years. Greenhouse
                                                gas intensity measures the ratio
                                                of
                                                greenhouse gas emissions to economic
                                                output as measured by Gross Domestic
                                                Product (GDP). Under this plan, as
                                                the economy grows, greenhouse gases
                                                also
                                                would continue to grow, although
                                                at a slower rate than they would
                                                have without
                                                these policies in place. When viewed
                                                per unit of economic output, the
                                                rate of
                                                emissions would drop. The plan projects
                                                that the U.S. would lower its rate
                                                of
                                                greenhouse gas emissions from an
                                                estimated 183 metric tons per $1
                                                million of GDP
                                                in 2002 to 151 metric tons per $1 million of GDP by 2012.
  In
                                                2002,
                                                KCP&L joined the Power Partners through
                                                Edison Electric Institute (EEI).
                                                Power Partners is a voluntary program
                                                with the DOE under which utilities
                                                commit
                                                to undertake measures to reduce,
                                                avoid or sequester CO 2 emissions. In 2003, the EEI sent
                                                a letter to numerous Administration
                                                officials,
                                                in which the EEI committed to work
                                                with the government over the next
                                                decade to
                                                reduce the power sector’s CO 2 emissions per kWh generated (carbon
                                                intensity) by the equivalent of 3%
                                                to 5% of
                                                the current level. In 2004, Power
                                                Partners entered into a cooperative
                                                umbrella
                                                memorandum of understanding (MOU)
                                                with the DOE. This MOU contains supply
                                                and
                                                demand-side actions as well as offset
                                                projects that will be undertaken
                                                to reduce
                                                the power sector’s CO 2 emissions per kWh generated over
                                                the next decade consistent with the
                                                EEI
                                                commitment of 3% to 5%.
  ***Air
                                                Particulate Matter and Ozone***
 In
                                                1997,
                                                the EPA revised ozone and particulate
                                                matter air quality standards creating
                                                a
                                                new eight-hour ozone standard and
                                                establishing a new standard for particulate
                                                matter less than 2.5 microns (PM-2.5)
                                                in diameter. In 2004, the EPA designated
                                                the Kansas City area as attainment
                                                with respect to the PM-2.5 National
                                                Ambient
                                                Air Quality Standards (NAAQS). In
                                                2005, the EPA published a final rule
                                                that
                                                designated Jackson, Platte, Clay
                                                and Cass counties in Missouri and
                                                Johnson,
                                                Linn, Miami and Wyandotte counties
                                                in Kansas as attainment with respect
                                                to the
                                                eight-hour ozone NAAQS effective
                                                June 2, 2005.
  ***Water
                                                Use Regulations***
 In
                                                2004,
                                                the EPA finalized the Phase II rule
                                                implementing Section 316(b) of the
                                                Clean
                                                Water Act establishing standards
                                                for cooling water intake structures
                                                at existing
                                                facilities. This final regulation
                                                is applicable to certain existing
                                                power
                                                producing facilities that employ
                                                cooling water intake structures that
                                                withdraw
                                                50 million gallons or more per day
                                                and use 25% or more of that water
                                                for cooling
                                                purposes. KCP&L is required to complete a Section
                                                316(b) comprehensive
                                                demonstration study on each of its
                                                generating facilities’ intake structures by
                                                the end of 2007, the studies are
                                                expected to cost a total of $1.2
                                                million to
                                                $2.0 million. Depending on the outcome
                                                of the comprehensive demonstration
                                                studies, facilities may be required
                                                to implement technological, operational
                                                or
                                                restoration measures to achieve compliance.
                                                Compliance with the final rule is
                                                expected to be achieved between 2011
                                                and 2014. Until the Section 316(b)
                                                comprehensive demonstration studies
                                                are completed, the impact of this
                                                final rule
                                                cannot be quantified.
 103
 **Contractual
                                                Commitments**
 Great
                                                Plains Energy’s and consolidated KCP&L’s expenses related to lease
                                                commitments are detailed in the following
                                                table .
 **2005**
                                                    
                                                    **2004**
                                                    
                                                    **2003**(millions)Consolidated
                                                        KCP&L
                                                    
                                                    $
                                                    19.4
                                                    
                                                    $
                                                    18.4
                                                    
                                                    $
                                                    23.1Other
                                                        Great Plains Energy(a)
                                                    
                                                    
                                                    1.4
                                                    
                                                    
                                                    1.9
                                                    
                                                    
                                                    1.0Total
                                                        Great Plains Energy
                                                    
                                                    $
                                                    20.8
                                                    
                                                    $
                                                    20.3
                                                    
                                                    $
                                                    24.1(a)
                                                          Includes insignificant
                                                          amounts related to discontinued
                                                          operations.
 Great
                                              Plains Energy’s and consolidated KCP&L’s contractual commitments at December
                                              31, 2005, excluding pensions and long-term
                                              debt are detailed in the following
                                              tables .
 ***Great
                                                        Plains Energy Contractual
                                                        Commitments*****2006**
                                                    
                                                    **2007**
                                                    
                                                    **2008**
                                                    
                                                    **2009**
                                                    
                                                    **2010**
                                                    
                                                    **After
                                                        2010**
                                                    
                                                    **Total**(millions)Lease
                                                        commitments
                                                    
                                                    $
                                                    17.1
                                                    
                                                    $
                                                    15.4
                                                    
                                                    $
                                                    14.9
                                                    
                                                    $
                                                    10.7
                                                    
                                                    $
                                                    8.4
                                                    
                                                    $
                                                    91.0
                                                    
                                                    $
                                                    157.5Purchase
                                                        commitmentsFuel(a)
                                                    
                                                    
                                                    107.9
                                                    
                                                    
                                                    99.9
                                                    
                                                    
                                                    91.5
                                                    
                                                    
                                                    46.0
                                                    
                                                    
                                                    32.3
                                                    
                                                    
                                                    37.7
                                                    
                                                    
                                                    415.3Purchased
                                                        capacity
                                                    
                                                    
                                                    5.4
                                                    
                                                    
                                                    6.8
                                                    
                                                    
                                                    7.8
                                                    
                                                    
                                                    8.2
                                                    
                                                    
                                                    5.4
                                                    
                                                    
                                                    18.6
                                                    
                                                    
                                                    52.2Purchased
                                                        power
                                                    
                                                    
                                                    423.4
                                                    
                                                    
                                                    135.6
                                                    
                                                    
                                                    46.4
                                                    
                                                    
                                                    21.8
                                                    
                                                    
                                                    18.0
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    645.2Other
                                                    
                                                    
                                                    33.6
                                                    
                                                    
                                                    5.6
                                                    
                                                    
                                                    2.9
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    42.1Total
                                                        contractual commitments
                                                    
                                                    $
                                                    587.4
                                                    
                                                    $
                                                    263.3
                                                    
                                                    $
                                                    163.5
                                                    
                                                    $
                                                    86.7
                                                    
                                                    $
                                                    64.1
                                                    
                                                    $
                                                    147.3
                                                    
                                                    $
                                                    1,312.3(a)Fuel
                                                        commitments consists of commitments
                                                        for nuclear fuel, coal and
                                                        coal
                                                        transportation costs.
  ***Consolidated
                                                          KCP&L Contractual Commitments*****2006**
                                                      
                                                      **2007**
                                                      
                                                      **2008**
                                                      
                                                      **2009**
                                                      
                                                      **2010**
                                                      
                                                      **After
                                                          2010**
                                                      
                                                      **Total**(millions)Lease
                                                          commitments
                                                      
                                                      $
                                                      15.9
                                                      
                                                      $
                                                      14.4
                                                      
                                                      $
                                                      14.0
                                                      
                                                      $
                                                      10.5
                                                      
                                                      $
                                                      8.4
                                                      
                                                      $
                                                      91.0
                                                      
                                                      $
                                                      154.2Purchase
                                                          commitmentsFuel(a)
                                                      
                                                      
                                                      107.9
                                                      
                                                      
                                                      99.9
                                                      
                                                      
                                                      91.5
                                                      
                                                      
                                                      46.0
                                                      
                                                      
                                                      32.3
                                                      
                                                      
                                                      37.7
                                                      
                                                      
                                                      415.3Purchased
                                                          capacity
                                                      
                                                      
                                                      5.4
                                                      
                                                      
                                                      6.8
                                                      
                                                      
                                                      7.8
                                                      
                                                      
                                                      8.2
                                                      
                                                      
                                                      5.4
                                                      
                                                      
                                                      18.6
                                                      
                                                      
                                                      52.2Other
                                                      
                                                      
                                                      33.6
                                                      
                                                      
                                                      5.6
                                                      
                                                      
                                                      2.9
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      42.1Total
                                                          contractual commitments
                                                      
                                                      $
                                                      162.8
                                                      
                                                      $
                                                      126.7
                                                      
                                                      $
                                                      116.2
                                                      
                                                      $
                                                      64.7
                                                      
                                                      $
                                                      46.1
                                                      
                                                      $
                                                      147.3
                                                      
                                                      $
                                                      663.8(a)Fuel
                                                            commitments consists
                                                            of commitments for nuclear
                                                            fuel, coal and coal
                                                            transportation costs.
 Lease
                                                commitments end in 2028 and include
                                                insignificant amounts for capital
                                                leases. As
                                                the managing partner of three jointly
                                                owned generating units, KCP&L has
                                                entered into leases for railcars
                                                to serve those units. Consolidated
                                                KCP&L
                                                has reflected the entire lease commitment
                                                in the above amounts, although the
                                                other owners will reimburse approximately
                                                $2.0 million per year ($22.7 million
                                                total ).
  KCP&L
                                                purchases capacity from other utilities
                                                and nonutility suppliers. Purchasing
                                                capacity provides the option to purchase
                                                energy if needed or when market prices
                                                are favorable. KCP&L has capacity sales agreements not
                                                included above that
                                                total $11.4 million for 2006, $11.2
                                                million per year for 2007 through
                                                2010 and
                                                $12.3 million after 2010 .
  Purchased
                                                power represents Strategic Energy’s agreements to purchase electricity
                                                at
                                                various fixed prices to meet estimated
                                                supply requirements. Strategic Energy
                                                has
                                                energy sales contracts not included
                                                above for 2006 and 2007 totaling
                                                $41.1
                                                million and $4.2 million ,
                                                respectively. 
 104
 ***Synthetic
                                                Lease***
 In
                                                2001,
                                                KCP&L entered into a synthetic lease
                                                arrangement with a Lease Trust (Lessor)
                                                to finance the purchase, installation,
                                                assembly and construction of five
                                                combustion turbines and related property
                                                and equipment that added 385 MWs
                                                of
                                                peaking capacity. Rental payments
                                                under the lease, which reflects interest
                                                payments only, began in 2004 and
                                                were to end in October 2006. KCP&L
                                                exercised its early termination option
                                                in 2005 and purchased the leased
                                                property
                                                for $154.0 million .
                                                KCP&L’s expense for the synthetic lease
                                                was $2.0 million
                                                and $1.9 million
                                                in 2005 and 2004, respectively.
  The
                                                Lease
                                                Trust, a special purpose entity,
                                                acting as Lessor in the synthetic
                                                lease
                                                arrangement discussed above, was
                                                considered a variable interest entity
                                                under FIN
                                                No. 46. Because KCP&L had variable interests in the Lease
                                                Trust, including
                                                among other things, a residual value
                                                guarantee provided to the Lessor,
                                                KCP&L
                                                was the primary beneficiary of the
                                                Lease Trust. The Lease Trust was
                                                consolidated
                                                in 2003, as required by FIN No. 46.
                                                As a result, Great Plains Energy’s and
                                                consolidated KCP&L’s depreciation expense increased
                                                $1.9 million,
                                                $5.1 million and $1.3 million in
                                                2005,
                                                2004 and 2003, respectively, with
                                                offsetting recognition of minority
                                                interest.
  **14.**
                                                    **GUARANTEES**  In
                                                the
                                                normal course of business, Great
                                                Plains Energy and certain of its
                                                subsidiaries
                                                enter into various agreements providing
                                                financial or performance assurance
                                                to
                                                third parties on behalf of certain
                                                subsidiaries. Such agreements include,
                                                for
                                                example, guarantees and indemnification
                                                of letters of credit and surety bonds.
                                                These agreements are entered into
                                                primarily to support or enhance the
                                                creditworthiness otherwise attributed
                                                to a subsidiary on a stand-alone
                                                basis,
                                                thereby facilitating the extension
                                                of sufficient credit to accomplish
                                                the
                                                subsidiaries’ intended business purposes. The majority
                                                of these agreements
                                                guarantee the Company’s own future performance, so a liability
                                                for the fair
                                                value of the obligation is not recorded.
  At
                                                December 31, 2005, KCP&L had guaranteed, with a maximum
                                                potential of $3.9
                                                million, energy savings under an
                                                agreement with a customer that expires
                                                over the
                                                next four years. A subcontractor
                                                would indemnify KCP&L for any payments made
                                                by KCP&L under this guarantees. This guarantee
                                                was entered into before
                                                December 31, 2002; therefore, a liability
                                                was not recorded in accordance with
                                                FIN No. 45, “Guarantor's Accounting and Disclosure
                                                Requirements for Guarantees,
                                                Including Guarantees of Indebtedness
                                                of Others.”
  **15.**
                                                    **LEGAL
                                                        PROCEEDINGS**  **Union
                                                Pacific**
 In
                                                2005,
                                                KCP&L filed a rate complaint case with
                                                the Surface Transportation Board
                                                (STB) charging that Union Pacific
                                                Railroad Company’s (Union Pacific) rates for
                                                transporting coal from the PRB in
                                                Wyoming to KCP&L’s Montrose Station are
                                                unreasonably high. Prior to the end
                                                of 2005, the rates were established
                                                under a
                                                contract with Union Pacific. Efforts
                                                to extend the term of the contract
                                                were
                                                unsuccessful and Union Pacific is
                                                the only service for coal transportation
                                                from
                                                the PRB to Montrose Station. KCP&L charged that Union Pacific possesses
                                                market dominance over the traffic
                                                and requested the STB prescribe maximum
                                                reasonable rates. Management anticipates
                                                filing opening evidence by mid-year
                                                2006 and the STB issuing its decision
                                                toward the end of 2007. Until the
                                                STB case
                                                is finalized, KCP&L is paying tariff rates subject
                                                to refund.
  **Framatome**
 In
                                                2005,
                                                WCNOC filed a lawsuit on behalf of
                                                itself, KCP&L and the other two Wolf
                                                Creek owners against Framatome ANP,
                                                Inc., and Framatome ANP Richland,
                                                Inc.
                                                (Framatome) in the District Court
                                                of Coffey County, Kansas. The suit
                                                alleges
                                                various claims against Framatome
                                                related to the design, licensing
                                                and
                                                installation of a digital control
                                                system. The suit seeks recovery of
                                                approximately $16 million in damages
                                                from Framatome. Framatome removed
                                                the case
                                                to U.S. District Court for the 
 105
 District
                                                  of Kansas. Thereafter, the plaintiffs
                                                  filed a motion to remand the case
                                                  back to
                                                  Coffey County District Court. The
                                                  federal court has not yet decided
                                                  that motion.
                                                  Framatome has not yet filed its
                                                  answer in the lawsuit.
  **Hawthorn
                                                  No. 5 Subrogation Litigation**
 KCP&L
                                                  filed suit in 2001, in Jackson
                                                  County, Missouri Circuit Court
                                                  against multiple
                                                  defendants who are alleged to have
                                                  responsibility for the 1999 Hawthorn
                                                  No. 5
                                                  boiler explosion. KCP&L and National Union Fire Insurance
                                                  Company of
                                                  Pittsburgh, Pennsylvania (National
                                                  Union) have entered into a subrogation
                                                  allocation agreement under which
                                                  recoveries in this suit are generally
                                                  allocated
                                                  55% to National Union and 45% to
                                                  KCP&L. Certain defendants have been
                                                  dismissed from the suit and various
                                                  defendants settled, with KCP&L receiving
                                                  a total of $38.2 million ,
                                                  of
                                                  which $18.5 million was
                                                  recorded as a recovery of capital
                                                  expenditures. Trial of this case
                                                  with the one
                                                  remaining defendant resulted in
                                                  a March 2004 jury verdict finding
                                                  KCP&L’s
                                                  damages as a result of the explosion
                                                  were $452 million. After deduction
                                                  of
                                                  amounts received from pre-trial
                                                  settlements with other defendants
                                                  and an amount
                                                  for KCP&L’s comparative fault (as determined
                                                  by the jury), the verdict would
                                                  have resulted in an award against
                                                  the defendant of approximately
                                                  $97.6 million
                                                  (of which KCP&L would have received $33 million
                                                  pursuant to the subrogation
                                                  allocation agreement after payment
                                                  of attorney’s fees). In response to
                                                  post-trial pleadings filed by the
                                                  defendant, in 2004, the trial judge
                                                  reduced
                                                  the award against the defendant
                                                  to $0.2 million. Both KCP&L and the
                                                  defendant have appealed this case
                                                  to the Court of Appeals for the
                                                  Western
                                                  District of Missouri. Oral arguments
                                                  are expected in the first quarter
                                                  of
                                                  2006.
  KCP&L
                                                  has received $204.8 million
                                                  in insurance recoveries related
                                                  to property destroyed in the 1999
                                                  explosion at
                                                  the Hawthorn No. 5 generating unit. Recoveries received
                                                  related to property
                                                  destroyed and subrogation settlements
                                                  recorded as a recovery of capital
                                                  expenditures have been recorded
                                                  as an increase in accumulated
                                                  depreciation.
  **Spent
                                                  Nuclear Fuel and Radioactive Waste**
 In
                                                  2004,
                                                  KCP&L and the other two Wolf Creek
                                                  owners filed suit against the United
                                                  States in the U.S. Court of Federal
                                                  Claims seeking an unspecified amount
                                                  of
                                                  monetary damages resulting from
                                                  the government’s failure to begin accepting
                                                  spent fuel for disposal in January
                                                  1998, as the government was required
                                                  to do by
                                                  the Nuclear Waste Policy Act of
                                                  1982. Approximately sixty other
                                                  similar cases
                                                  are pending before that court.
                                                  The court has stayed the Wolf Creek
                                                  case until at
                                                  least October 2006 to allow for
                                                  some of the earlier cases to be
                                                  decided first.
                                                  Another federal court already has
                                                  determined that the government
                                                  breached its
                                                  obligation to begin accepting spent
                                                  fuel for disposal. The questions
                                                  now before
                                                  the court in the pending cases
                                                  are whether and to what extent
                                                  the utilities are
                                                  entitled to monetary damages for
                                                  that breach. KCP&L management cannot
                                                  predict the outcome of the Wolf
                                                  Creek case.
  **Haberstroh**
 In
                                                  2004,
                                                  Robert C. Haberstroh filed suit
                                                  for breach of employment contract
                                                  and violation
                                                  of the Pennsylvania Wage Payment
                                                  Collection Act against Strategic
                                                  Energy
                                                  Partners, Ltd. (Partners), SE Holdings,
                                                  L.L.C. (SE Holdings) and Strategic
                                                  Energy in the Court of Common Pleas
                                                  of Allegheny County, Pennsylvania.
                                                  Mr.
                                                  Haberstroh claims that he acquired
                                                  an equity interest in Partners
                                                  under the
                                                  terms of his employment agreement
                                                  and that through a series of transactions,
                                                  Mr.
                                                  Haberstroh’s equity interest became an equity
                                                  interest in SE Holdings. In 2001,
                                                  Mr. Haberstroh’s employment was terminated and
                                                  SE Holdings redeemed his equity
                                                  interest. Mr. Haberstroh is seeking
                                                  the loss of his non-equity compensation
                                                  (including salary, bonus and benefits)
                                                  and equity compensation and associated
                                                  distributions (his equity interest
                                                  in SE Holdings).
  Strategic
                                                  Energy has filed a counterclaim
                                                  against Mr. Haberstroh for breach
                                                  of contract.
                                                  SE Holdings, and its direct and
                                                  indirect owners, have agreed to
                                                  indemnify
                                                  Strategic Energy and IEC against
                                                  any judgment or settlement of Mr.
                                                  Haberstroh’s
                                                  claim that relates to his alleged
                                                  equity interest in SE 
 106
 Holdings,
                                                    up to approximately $8 million
                                                    plus any dividends or interest
                                                    received in
                                                    relation to his alleged interest.
  **Class
                                                    Action Complaint**
 In
                                                    2005,
                                                    a class action complaint for
                                                    breach of contract was filed
                                                    against Strategic
                                                    Energy. The plaintiffs purportedly
                                                    represent the interests of customers
                                                    in
                                                    Pennsylvania who entered into  Power
                                                    Supply Coordination Service Agreements
                                                    (Agreement) for the bundled product
                                                    in
                                                    Pennsylvania. The complaint seeks
                                                    monetary damages, attorney fees
                                                    and costs and
                                                    a declaration that the customers
                                                    may terminate their Agreement
                                                    with Strategic
                                                    Energy. Strategic Energy has
                                                    filed preliminary objections
                                                    asking the court to
                                                    order plaintiffs to file an amended
                                                    complaint that conforms to applicable
                                                    court
                                                    rules.
  **KLT
                                                    Telecom**
 On
                                                    December 31, 2001, a subsidiary
                                                    of KLT Telecom Inc. (KLT Telecom),
                                                    DTI Holdings,
                                                    Inc. (Holdings) and its subsidiaries
                                                    Digital Teleport Inc. (Digital
                                                    Teleport)
                                                    and Digital Teleport of Virginia,
                                                    Inc., filed separate voluntary
                                                    petitions in
                                                    the Bankruptcy Court for the
                                                    Eastern District of Missouri
                                                    for reorganization
                                                    under Chapter 11 of the U.S.
                                                    Bankruptcy Code. DTI Holdings
                                                    and its two
                                                    subsidiaries are collectively
                                                    called “DTI.” In 2003, the Bankruptcy Court
                                                    confirmed the plan of reorganization
                                                    for these three companies, which
                                                    included
                                                    the sale of substantially all
                                                    assets. KLT Telecom received
                                                    $19.2 million in 2003
                                                    related to the confirmation of
                                                    the DTI bankruptcy.
  KLT
                                                    Telecom originally acquired a
                                                    47% interest in DTI in 1997.
                                                    On February 8, 2001,
                                                    KLT Telecom acquired control
                                                    of DTI by purchasing shares from
                                                    another Holdings
                                                    shareholder, Richard D. Weinstein
                                                    (Weinstein), increasing its ownership
                                                    to
                                                    83.6%. In connection with this
                                                    purchase, KLT Telecom granted
                                                    Weinstein a put
                                                    option. The put option provided
                                                    for the sale by Weinstein of
                                                    his remaining
                                                    shares in Holdings to KLT Telecom
                                                    during a period beginning September
                                                    1, 2003,
                                                    and ending August 31, 2005. The
                                                    put option provides for an aggregate
                                                    exercise
                                                    price for these remaining shares
                                                    equal to their fair market value
                                                    with an
                                                    aggregate floor amount of $15
                                                    million. The floor amount of
                                                    the put option was
                                                    fully reserved during 2001. On
                                                    September 2, 2003, Weinstein
                                                    delivered to KLT
                                                    Telecom notice of the exercise
                                                    of his put option. KLT Telecom
                                                    declined to pay
                                                    Weinstein any amount under the
                                                    put option because, among other
                                                    things, the stock
                                                    of Holdings had been cancelled
                                                    and extinguished pursuant to
                                                    the joint Chapter 11
                                                    plan confirmed by the Bankruptcy
                                                    Court. Weinstein has sued KLT
                                                    Telecom for
                                                    allegedly breaching the put option
                                                    and seeks damages of at least
                                                    $15 million
                                                    plus statutory interest. In April
                                                    2005, summary judgment in the
                                                    Weinstein
                                                    litigation was granted in favor
                                                    of KLT Telecom, and Weinstein
                                                    has appealed this
                                                    judgment to the Missouri Court
                                                    of Appeals for the Eastern District.
                                                    The $15
                                                    million reserve has not been
                                                    reversed pending the outcome
                                                    of the appeal process,
                                                    which management expects will
                                                    conclude in early 2006.
  **16.**
                                                        **ASSET
                                                            RETIREMENT OBLIGATIONS**  Asset
                                                    retirement obligations associated
                                                    with tangible long-lived assets
                                                    are those for
                                                    which a legal obligation exists
                                                    under enacted laws, statutes
                                                    and written or oral
                                                    contracts, including obligations
                                                    arising under the doctrine of
                                                    promissory
                                                    estoppel. These liabilities are
                                                    recognized at estimated fair
                                                    value as incurred
                                                    and capitalized as part of the
                                                    cost of the related long-lived
                                                    assets and
                                                    depreciated over their useful
                                                    lives. Accretion of the liabilities
                                                    due to the
                                                    passage of time is recorded as
                                                    an operating expense. Changes
                                                    in the estimated
                                                    fair values of the liabilities
                                                    are recognized when known.
  In
                                                    2005,
                                                    FASB issued FIN No. 47, “Accounting for Conditional Asset
                                                    Retirement
                                                    Obligations.” FIN No. 47 clarifies the term
                                                    conditional ARO, as used in SFAS
                                                    No.
                                                    143. Conditional ARO refers to
                                                    a legal obligation to perform
                                                    an asset retirement
                                                    activity in which the timing
                                                    and/or method of settlement are
                                                    conditional on a
                                                    future event that may or may
                                                    not be within the control of
                                                    the entity. Under FIN
                                                    No. 47, an entity is required
                                                    to recognize a liability for
                                                    the fair value of a
                                                    conditional ARO if the fair value
                                                    of the liability can be reasonably
                                                    estimated.
                                                    Great Plains Energy and consolidated
                                                    KCP&L adopted the provisions of FIN
                                                    No.
                                                    47 for the year ended December
                                                    31, 2005. 
 107
 KCP&L
                                                    management determined AROs exist
                                                    for asbestos in certain fossil
                                                    fuel plants and
                                                    for an ash pond and landfill.
                                                    The additional AROs at December
                                                    31, 2005, totaled
                                                    $8.4 million for remediation
                                                    of asbestos and $7.0 million
                                                    for the remediation of
                                                    the ash pond and landfill. The
                                                    AROs were derived from third
                                                    party and internal
                                                    engineering estimates. To estimate
                                                    the AROs, KCP&L used a credit-adjusted
                                                    risk free discount rate of 5.6%
                                                    for 12.5-year assets, 5.89% for
                                                    19.5-year asset
                                                    and 6.12% for 29.5-year assets.
                                                    The estimated rate was based
                                                    on the rate
                                                    KCP&L could issue bonds for the specific
                                                    period.
  In
                                                    recording the AROs, net utility
                                                    plant was increased by $2.2 million.
                                                    KCP&L
                                                    is a regulated utility subject
                                                    to the provisions of SFAS No.
                                                    71 and management
                                                    believes it is probable any differences
                                                    between expense under SFAS No.
                                                    143 and
                                                    expense recovered currently in
                                                    rates will be recoverable in
                                                    future rates. As a
                                                    result, the $13.2 million net
                                                    effect of adopting FIN No. 47
                                                    was recorded as a
                                                    regulatory asset; therefore,
                                                    it had no impact on net income.
  During
                                                    2005, KCP&L also recorded an addition to
                                                    its ARO to decommission Wolf
                                                    Creek
                                                    of $11.3 million, which reflects
                                                    a 2005 update to the decommissioning
                                                    study cost
                                                    estimates. To estimate the additional
                                                    ARO, KCP&L used a credit-adjusted risk
                                                    free discount rate of 5.89%.
                                                    In recording the ARO addition,
                                                    net utility plant
                                                    was increased by $10.8 million.
                                                    A related $0.5 million for accretion
                                                    expense and
                                                    depreciation was recorded as
                                                    a regulatory asset; therefore,
                                                    it had no impact on
                                                    net income.
  Revisions
                                                    to the estimated liabilities
                                                    of KCP&L could occur due to changes
                                                    in the
                                                    decommissioning or other cost
                                                    estimates, extension of the nuclear
                                                    operating
                                                    license or changes in federal
                                                    or state regulatory requirements.
  The
                                                    following table summarizes
                                                    the change in Great Plains Energy’s and consolidated KCP&L’s
                                                    AROs.
 **December
                                                            31**
                                                        
                                                        **2005**
                                                        
                                                        **2004**(millions)Beginning
                                                            balance
                                                        
                                                        $
                                                        113.7
                                                        
                                                        $
                                                        106.7Additions
                                                        
                                                        
                                                        26.7
                                                        
                                                        
                                                        -Settlements
                                                        
                                                        
                                                        (2.0
                                                        )
                                                        
                                                        -Accretion
                                                        
                                                        
                                                        7.5
                                                        
                                                        
                                                        7.0Ending balance
                                                        
                                                        $
                                                        145.9
                                                        
                                                        $
                                                        113.7
 The
                                                  following table illustrates the
                                                  effect of FIN No. 47 related AROs
                                                  if the
                                                  provisions of FIN No. 47 had been
                                                  applied beginning January 1, 2003.
                                                  Pro forma
                                                  amounts for the periods prior to
                                                  adoption of FIN No. 47 were measured
                                                  using
                                                  assumptions consistent with the
                                                  period of adoption.
 **December
                                                            31**
                                                        
                                                        **2005**
                                                        
                                                        **2004**
                                                        
                                                        **2003**(millions)Beginning
                                                            balance
                                                        
                                                        $
                                                        14.6
                                                        
                                                        $
                                                        13.8
                                                        
                                                        $
                                                        13.0Accretion
                                                        
                                                        
                                                        0.8
                                                        
                                                        
                                                        0.8
                                                        
                                                        
                                                        0.8Ending
                                                            balance
                                                        
                                                        $
                                                        15.4
                                                        
                                                        $
                                                        14.6
                                                        
                                                        $
                                                        13.8
 **17.**
                                                      **SEGMENT
                                                          AND RELATED INFORMATION**  **Great
                                                  Plains Energy**
 Great
                                                  Plains Energy has two reportable
                                                  segments based on its method of
                                                  internal
                                                  reporting, which generally segregates
                                                  the reportable segments based on
                                                  products
                                                  and services, management responsibility
                                                  and regulation. The two reportable
                                                  business segments are KCP&L, an integrated,
 108
 regulated
                                                    electric utility and Strategic
                                                    Energy, a competitive electricity
                                                    supplier. Other
                                                    includes the operations of HSS,
                                                    Services, all KLT Inc. operations
                                                    other than
                                                    Strategic Energy, unallocated
                                                    corporate charges, consolidating
                                                    entries and
                                                    intercompany eliminations. Intercompany
                                                    eliminations include insignificant
                                                    amounts of intercompany financing
                                                    related activities. The summary
                                                    of significant
                                                    accounting policies applies to
                                                    all of the reportable segments.
                                                    For segment
                                                    reporting, each segment’s income taxes include the effects
                                                    of allocating holding
                                                    company tax benefits. Segment
                                                    performance is evaluated based
                                                    on net
                                                    income.
  The
                                                  following tables reflect summarized
                                                  financial information concerning
                                                  Great
                                                  Plains Energy’s reportable segments.
 **Strategic**
                                                        
                                                        
                                                        **Great
                                                            Plains****2005**
                                                        
                                                        **KCP&L**
                                                        **Energy**
                                                        **Other**
                                                        **Energy**(millions)Operating
                                                            revenues
                                                        
                                                        $
                                                        1,130.8
                                                        
                                                        $
                                                        1,474.0
                                                        
                                                        $
                                                        0.1
                                                        
                                                        $
                                                        2,604.9Depreciation
                                                            and amortization
                                                        
                                                        
                                                        (146.5
                                                        )
                                                        
                                                        (6.4
                                                        )
                                                        
                                                        (0.2
                                                        )
                                                        
                                                        (153.1
                                                        )Interest
                                                            charges
                                                        
                                                        
                                                        (61.8
                                                        )
                                                        
                                                        (3.4
                                                        )
                                                        
                                                        (8.6
                                                        )
                                                        
                                                        (73.8
                                                        )Income
                                                            taxes
                                                        
                                                        
                                                        (49.3
                                                        )
                                                        
                                                        (16.6
                                                        )
                                                        
                                                        26.2
                                                        
                                                        
                                                        (39.7
                                                        )Loss
                                                            from equity investments
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        (0.4
                                                        )
                                                        
                                                        (0.4
                                                        )Discontinued
                                                            operations, net of income
                                                            taxes
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        (1.9
                                                        )
                                                        
                                                        (1.9
                                                        )Net
                                                            income (loss)
                                                        
                                                        
                                                        145.2
                                                        
                                                        
                                                        28.2
                                                        
                                                        
                                                        (11.1
                                                        )
                                                        
                                                        162.3**Strategic**
                                                        
                                                        
                                                        
                                                        **Great
                                                            Plains****2004**
                                                        
                                                        **KCP&L**
                                                        **Energy**
                                                        **Other**
                                                        **Energy**(millions)Operating
                                                            revenues
                                                        
                                                        $
                                                        1,090.1
                                                        
                                                        $
                                                        1,372.4
                                                        
                                                        $
                                                        1.5
                                                        
                                                        $
                                                        2,464.0Depreciation
                                                            and amortization
                                                        
                                                        
                                                        (144.3
                                                        )
                                                        
                                                        (4.8
                                                        )
                                                        
                                                        (1.0
                                                        )
                                                        
                                                        (150.1
                                                        )Interest
                                                            charges
                                                        
                                                        
                                                        (73.7
                                                        )
                                                        
                                                        (0.7
                                                        )
                                                        
                                                        (8.6
                                                        )
                                                        
                                                        (83.0
                                                        )Income
                                                            taxes
                                                        
                                                        
                                                        (55.7
                                                        )
                                                        
                                                        (24.3
                                                        )
                                                        
                                                        25.5
                                                        
                                                        
                                                        (54.5
                                                        )Loss
                                                            from equity investments
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        (1.5
                                                        )
                                                        
                                                        (1.5
                                                        )Discontinued
                                                            operations, net of income
                                                            taxes
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        7.3
                                                        
                                                        
                                                        7.3Net
                                                            income (loss)
                                                        
                                                        
                                                        150.0
                                                        
                                                        
                                                        42.5
                                                        
                                                        
                                                        (11.7
                                                        )
                                                        
                                                        180.8**Strategic**
                                                        
                                                        
                                                        
                                                        **Great
                                                            Plains****2003**
                                                        
                                                        **KCP&L**
                                                        **Energy**
                                                        **Other**
                                                        **Energy**(millions)Operating
                                                            revenues
                                                        
                                                        $
                                                        1,054.9
                                                        
                                                        $
                                                        1,091.0
                                                        
                                                        $
                                                        2.1
                                                        
                                                        $
                                                        2,148.0Depreciation
                                                            and amortization
                                                        
                                                        
                                                        (139.9
                                                        )
                                                        
                                                        (1.7
                                                        )
                                                        
                                                        (1.2
                                                        )
                                                        
                                                        (142.8
                                                        )Interest
                                                            charges
                                                        
                                                        
                                                        (69.9
                                                        )
                                                        
                                                        (0.4
                                                        )
                                                        
                                                        (5.9
                                                        )
                                                        
                                                        (76.2
                                                        )Income
                                                            taxes
                                                        
                                                        
                                                        (84.4
                                                        )
                                                        
                                                        (30.2
                                                        )
                                                        
                                                        36.0
                                                        
                                                        
                                                        (78.6
                                                        )Loss
                                                            from equity investments
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        (2.0
                                                        )
                                                        
                                                        (2.0
                                                        )Discontinued
                                                            operations, net of income
                                                            taxes
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        (44.8
                                                        )
                                                        
                                                        (44.8
                                                        )Net
                                                            income (loss)
                                                        
                                                        
                                                        127.2
                                                        
                                                        
                                                        39.6
                                                        
                                                        
                                                        (21.9
                                                        )
                                                        
                                                        144.9
 109
  **Strategic**
                                                        
                                                        
                                                        **Great
                                                            Plains****KCP&L**
                                                        **Energy**
                                                        **Other**
                                                        **Energy****2005**
                                                        
                                                        (millions)Assets
                                                        
                                                        $
                                                        3,334.6
                                                        
                                                        $
                                                        441.8
                                                        
                                                        $
                                                        57.3
                                                        
                                                        $
                                                        3,833.7Capital
                                                            expenditures
                                                        
                                                        
                                                        332.2
                                                        
                                                        
                                                        6.6
                                                        
                                                        
                                                        (4.7
                                                        )
                                                        
                                                        334.1**2004**Assets
                                                        
                                                        $
                                                        3,330.2
                                                        
                                                        $
                                                        407.7
                                                        
                                                        $
                                                        61.0
                                                        
                                                        $
                                                        3,798.9Capital
                                                            expenditures
                                                        
                                                        
                                                        190.8
                                                        
                                                        
                                                        2.6
                                                        
                                                        
                                                        3.3
                                                        
                                                        
                                                        196.7**2003**Assets
                                                        
                                                        $
                                                        3,293.5
                                                        
                                                        $
                                                        283.0
                                                        
                                                        $
                                                        105.5
                                                        
                                                        $
                                                        3,682.0Capital
                                                            expenditures
                                                        
                                                        
                                                        148.8
                                                        
                                                        
                                                        3.1
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        151.9
 **Consolidated
                                                  KCP&L**
 The
                                                  following tables reflect
                                                  summarized financial information
                                                  concerning consolidated KCP&L’s reportable
                                                  segment. Other includes the operations
                                                  of HSS and intercompany eliminations.
                                                  Intercompany eliminations include
                                                  insignificant amounts of intercompany
                                                  financing related activities.
 **Consolidated****2005**
                                                        
                                                        **KCP&L**
                                                        **Other**
                                                        **KCP&L**(millions)Operating
                                                            revenues
                                                        
                                                        $
                                                        1,130.8
                                                        
                                                        $
                                                        0.1
                                                        
                                                        $
                                                        1,130.9Depreciation
                                                            and amortization
                                                        
                                                        
                                                        (146.5
                                                        )
                                                        
                                                        (0.1
                                                        )
                                                        
                                                        (146.6
                                                        )Interest
                                                            charges
                                                        
                                                        
                                                        (61.8
                                                        )
                                                        
                                                        -
                                                        
                                                        
                                                        (61.8
                                                        )Income
                                                            taxes
                                                        
                                                        
                                                        (49.3
                                                        )
                                                        
                                                        1.1
                                                        
                                                        
                                                        (48.2
                                                        )Net
                                                            income (loss)
                                                        
                                                        
                                                        145.2
                                                        
                                                        
                                                        (1.5
                                                        )
                                                        
                                                        143.7**Consolidated****2004**
                                                        
                                                        **KCP&L**
                                                        **Other**
                                                        **KCP&L**(millions)Operating
                                                            revenues
                                                        
                                                        $
                                                        1,090.1
                                                        
                                                        $
                                                        1.5
                                                        
                                                        $
                                                        1,091.6Depreciation
                                                            and amortization
                                                        
                                                        
                                                        (144.3
                                                        )
                                                        
                                                        (0.9
                                                        )
                                                        
                                                        (145.2
                                                        )Interest
                                                            charges
                                                        
                                                        
                                                        (73.7
                                                        )
                                                        
                                                        (0.5
                                                        )
                                                        
                                                        (74.2
                                                        )Income
                                                            taxes
                                                        
                                                        
                                                        (55.7
                                                        )
                                                        
                                                        2.9
                                                        
                                                        
                                                        (52.8
                                                        )Net
                                                            income (loss)
                                                        
                                                        
                                                        150.0
                                                        
                                                        
                                                        (6.7
                                                        )
                                                        
                                                        143.3**Consolidated****2003**
                                                        
                                                        **KCP&L**
                                                        **Other**
                                                        **KCP&L**(millions)Operating
                                                            revenues
                                                        
                                                        $
                                                        1,054.9
                                                        
                                                        $
                                                        2.1
                                                        
                                                        $
                                                        1,057.0Depreciation
                                                            and amortization
                                                        
                                                        
                                                        (139.9
                                                        )
                                                        
                                                        (1.1
                                                        )
                                                        
                                                        (141.0
                                                        )Interest
                                                            charges
                                                        
                                                        
                                                        (69.9
                                                        )
                                                        
                                                        (0.4
                                                        )
                                                        
                                                        (70.3
                                                        )Income
                                                            taxes
                                                        
                                                        
                                                        (84.4
                                                        )
                                                        
                                                        0.9
                                                        
                                                        
                                                        (83.5
                                                        )Discontinued
                                                            operations, net of income
                                                            taxes
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        (8.7
                                                        )
                                                        
                                                        (8.7
                                                        )Net
                                                            income (loss)
                                                        
                                                        
                                                        127.2
                                                        
                                                        
                                                        (10.0
                                                        )
                                                        
                                                        117.2
 
 110
  **Consolidated****KCP&L**
                                                        **Other**
                                                        **KCP&L****2005**
                                                        
                                                        (millions)Assets
                                                        
                                                        $
                                                        3,334.6
                                                        
                                                        $
                                                        3.9
                                                        
                                                        $
                                                        3,338.5Capital
                                                            expenditures
                                                        
                                                        
                                                        332.2
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        332.2**2004**Assets
                                                        
                                                        $
                                                        3,330.2
                                                        
                                                        $
                                                        7.2
                                                        
                                                        $
                                                        3,337.4Capital
                                                            expenditures
                                                        
                                                        
                                                        190.8
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        190.8**2003**Assets
                                                        
                                                        $
                                                        3,293.5
                                                        
                                                        $
                                                        9.1
                                                        
                                                        $
                                                        3,302.6Capital
                                                            expenditures
                                                        
                                                        
                                                        148.8
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        148.8
 **18.**
                                                          **SHORT-TERM
                                                              BORROWINGS AND SHORT-TERM
                                                              BANK LINES OF CREDIT**  Great
                                                      Plains Energy has a $550 million
                                                      revolving credit facility with
                                                      a group of banks
                                                      that expires in December 2009.
                                                      A default by Great Plains Energy
                                                      or any of its
                                                      significant subsidiaries of
                                                      other indebtedness totaling
                                                      more than $25.0 million
                                                      is a default under the facility.
                                                      Under the terms of this agreement,
                                                      Great Plains
                                                      Energy is required to maintain
                                                      a consolidated indebtedness
                                                      to consolidated
                                                      capitalization ratio, as defined
                                                      in the agreement, not greater
                                                      than 0.65 to 1.00
                                                      at all times. At December 31, 2005, the Company was in
                                                      compliance with this
                                                      covenant. At December 31, 2005, Great Plains Energy
                                                      had $6.0
                                                      million of
                                                      outstanding borrowings with
                                                      an interest rate of 4.98% and
                                                      had
                                                      issued letters of credit totaling
                                                      $38.5 million under
                                                      the
                                                      credit facility as credit support
                                                      for Strategic Energy. At December
                                                      31, 2004,
                                                      Great Plains Energy had $20.0 million
                                                      of outstanding borrowings with
                                                      an interest rate of 3.04% and
                                                      had
                                                      issued letters of credit totaling
                                                      $8.0 million
                                                      under the credit facility as
                                                      credit support for Strategic
                                                      Energy.
  KCP&L
                                                      has a $250 million revolving
                                                      credit facility with a group
                                                      of banks that expires
                                                      in December 2009, to provide
                                                      support for its issuance of
                                                      commercial paper and
                                                      other general purposes. A default
                                                      by KCP&L on other indebtedness totaling
                                                      more than $25.0 million is
                                                      a default under the facility.
                                                      Under the terms of the
                                                      agreement, KCP&L is required to maintain a
                                                      consolidated indebtedness to
                                                      consolidated capitalization
                                                      ratio, as defined in the agreement,
                                                      not greater than
                                                      0.65 to 1.00 at all times.
                                                      At December 31, 2005, KCP&L was in
                                                      compliance with this covenant.
                                                      At December 31, 2005, KCP&L had $31.9
                                                      million of
                                                      commercial paper outstanding
                                                      and no cash borrowings under
                                                      the facility. The
                                                      weighted-average interest rate
                                                      of the commercial paper was
                                                      4.35%. At
                                                      December 31, 2004, KCP&L had no cash
                                                      borrowings or commercial paper
                                                      outstanding.
  During
                                                      2005, Strategic Energy entered
                                                      into an amendment to
                                                      its
                                                      $125 million revolving credit
                                                      facility with a group of banks.
                                                      The amendment
                                                      extends the expiration of the
                                                      facility from June 2007 to
                                                      June 2009 and increases
                                                      the aggregate revolving loan
                                                      commitment from $125 million
                                                      to $135 million. So
                                                      long as there is no default
                                                      or unmatured default, Strategic
                                                      Energy may increase
                                                      this amount by up to $15 million
                                                      by increasing the commitment
                                                      of one or more
                                                      lenders that have agreed to
                                                      such increase, or by adding
                                                      one or more lenders with
                                                      the consent of the administrative
                                                      agent. Great Plains Energy
                                                      has currently
                                                      guaranteed $25.0 million of
                                                      this facility. A default by
                                                      Strategic Energy of
                                                      other indebtedness, as defined
                                                      in the facility, totaling more
                                                      than $7.5 million
                                                      is a default under the facility.
                                                      Under the terms of this amended
                                                      agreement,
                                                      Strategic Energy is required
                                                      to maintain a minimum net worth
                                                      of $75.0 million, a
                                                      minimum fixed charge coverage
                                                      ratio of at least 1.05 to 1.00
                                                      and a minimum debt
                                                      service coverage ratio of at
                                                      least 4.00 to 1.00, as those
                                                      terms are defined in
                                                      the agreement. In addition,
                                                      under the terms of this amended
                                                      agreement, Strategic
                                                      Energy is required to maintain
                                                      a maximum funded indebtedness
                                                      to EBITDA ratio, as
                                                      defined in the agreement, of
                                                      3.00 to 1.00, on a quarterly
                                                      basis through
                                                      June 30, 2007, and 2.75 to 1.00
                                                      thereafter. In the event of
                                                      a breach of one
                                                      or more of these four covenants,
                                                      so long as no other default
                                                      has occurred, Great
                                                      Plains Energy may cure the
                                                      breach through a cash infusion,
                                                      a guarantee increase
                                                      or a combination of the two.
                                                      At December 31, 2005,
  111
 in
                                                        letters of credit had been
                                                        issued and there were no
                                                        cash borrowings under the
                                                        agreement. At December 31, 2004, $69.2 million
                                                        in letters of credit had
                                                        been issued and there were
                                                        no cash borrowings under
                                                        the
                                                        agreement.
 **19.**
                                                          **LONG-TERM
                                                              DEBT AND EIRR BONDS
                                                              CLASSIFIED AS CURRENT
                                                              LIABILITIES**  Great
                                                      Plains Energy and consolidated
                                                      KCP&L’s long-term debt is detailed
                                                      in the
                                                      following table .
 **December
                                                            31****Year
                                                            Due**
                                                        
                                                        **2005**
                                                        
                                                        **2004****Consolidated
                                                            KCP&L**
                                                        
                                                        
                                                        
                                                        (millions)General Mortgage Bonds7.95% Medium-Term Notes
                                                        
                                                        
                                                        2007
                                                        
                                                        $
                                                        0.5
                                                        
                                                        $
                                                        0.53.45%* EIRR bonds
                                                        
                                                        
                                                        2012-2035
                                                        
                                                        
                                                        158.8
                                                        
                                                        
                                                        158.8Senior Notes7.125%
                                                        
                                                        
                                                        2005
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        250.06.00%
                                                        
                                                        
                                                        2007
                                                        
                                                        
                                                        225.0
                                                        
                                                        
                                                        225.06.50%
                                                        
                                                        
                                                        2011
                                                        
                                                        
                                                        150.0
                                                        
                                                        
                                                        150.06.05%
                                                        
                                                        
                                                        2035
                                                        
                                                        
                                                        250.0
                                                        
                                                        
                                                        -Unamortized discount
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (1.8
                                                        )
                                                        
                                                        (0.6
                                                        )EIRR bonds4.75% Series A & B
                                                        
                                                        
                                                        2015
                                                        
                                                        
                                                        104.6
                                                        
                                                        
                                                        107.02.38% Series C
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        50.04.75% Series D
                                                        
                                                        
                                                        2017
                                                        
                                                        
                                                        39.3
                                                        
                                                        
                                                        40.24.65% Series 2005
                                                        
                                                        
                                                        2035
                                                        
                                                        
                                                        50.0
                                                        
                                                        
                                                        -2.10% Combustion Turbine
                                                            Synthetic Lease
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        145.3Current liabilitiesEIRR bonds classified
                                                            as current
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        (85.9
                                                        )Current maturities
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        (250.0
                                                        )Total consolidated KCP&L excluding current liabilities
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        976.4
                                                        
                                                        
                                                        790.3**Other
                                                            Great Plains Energy**7.70%* Affordable Housing
                                                            Notes
                                                        
                                                        
                                                        2006-2008
                                                        
                                                        
                                                        2.6
                                                        
                                                        
                                                        5.84.25% FELINE PRIDES Senior
                                                            Notes
                                                        
                                                        
                                                        2009
                                                        
                                                        
                                                        163.6
                                                        
                                                        
                                                        163.6Current maturities
                                                        
                                                        
                                                        
                                                        (1.7
                                                        )
                                                        
                                                        (3.2
                                                        )Total consolidated Great
                                                            Plains Energy excluding
                                                            current
                                                            maturities
                                                        $
                                                        1,140.9
                                                        
                                                        $
                                                        956.5*
                                                            Weighted-average interest
                                                            rates as of December
                                                            31, 2005
 **Amortization
                                                  of Debt Expense**
 Great
                                                  Plains Energy’s and consolidated KCP&L’s amortization of debt expense
                                                  is
                                                  detailed in the following table .
 **2005**
                                                        
                                                        **2004**
                                                        
                                                        **2003**(millions)Consolidated
                                                            KCP&L
                                                        
                                                        $
                                                        2.3
                                                        
                                                        $
                                                        2.1
                                                        
                                                        $
                                                        2.1Other
                                                            Great Plains Energy
                                                        
                                                        
                                                        0.7
                                                        
                                                        
                                                        1.8
                                                        
                                                        
                                                        1.4Total Great Plains Energy
                                                        
                                                        $
                                                        3.0
                                                        
                                                        $
                                                        3.9
                                                        
                                                        $
                                                        3.5
 **KCP&L
                                                  General Mortgage Bonds**
 KCP&L
                                                  has issued mortgage bonds under
                                                  the General Mortgage Indenture
                                                  and Deed of Trust
                                                  dated December 1, 1986, as supplemented. The Indenture
                                                  creates a
                                                  mortgage lien on substantially
                                                  all utility plant. Mortgage bonds
                                                  secure $159.3 million
                                                  of medium-term notes and Environmental
                                                  Improvement
 112
 Revenue
                                                    Refunding (EIRR) bonds at December
                                                    31, 2005 and 2004. In 2004, KCP&L
                                                    redeemed $54.5 million of its
                                                    medium-term notes at maturity.
  During
                                                  2005, KCP&L redeemed its secured 1994 series
                                                  EIRR bonds totaling
                                                  $35.9 million
                                                  by issuing secured EIRR Bonds Series
                                                  2005 also totaling $35.9 million:
                                                  $14.0 million
                                                  at a fixed rate of 4.05 %
                                                  until
                                                  maturity at March 1, 2015, and
                                                  $21.9 million
                                                  at a fixed rate of 4.65 %
                                                  until
                                                  maturity at September 1, 2035.
                                                  The previous interest rate periods
                                                  on this
                                                  series, with an interest rate of
                                                  2.25%, expired on August 31, 2005.
                                                  This series
                                                  was classified as a current liability
                                                  at December 31, 2004. The new EIRR
                                                  Bonds
                                                  Series 2005 is covered by a municipal
                                                  bond insurance policy issued by
                                                  XL Capital
                                                  Assurance Inc. (XLCA). The insurance
                                                  agreement between KCP&L and XLCA is
                                                  described below.
  In
                                                  2004,
                                                  KCP&L secured a municipal bond insurance
                                                  policy as a credit enhancement
                                                  to
                                                  its secured 1992 series EIRR bonds
                                                  totaling $31.0 million. This municipal
                                                  bond
                                                  insurance policy replaced a 364-day
                                                  credit facility with a bank, which
                                                  expired
                                                  in August 2004 and previously supported
                                                  full liquidity of these bonds.
                                                  These
                                                  variable-rate secured EIRR bonds
                                                  with a final maturity in 2017 are
                                                  remarketed on
                                                  a weekly basis through a Dutch
                                                  auction process. The insurance
                                                  agreement between
                                                  KCP&L and XLCA is described below.
  **KCP&L
                                                  Unsecured Notes**
 KCP&L
                                                  had $196.5 million of unsecured
                                                  EIRR bonds outstanding excluding
                                                  the fair value of interest rate
                                                  swaps of a $2.6 million liability and
                                                  $0.7
                                                  million asset at
                                                  December 31, 2005 and 2004, respectively.
                                                  The interest rates swaps resulted
                                                  in
                                                  an effective rate of 5.43 %
                                                  for the
                                                  Series A, B and D EIRR bonds at
                                                  December 31, 2005. During 2005,
                                                  KCP&L
                                                  redeemed its unsecured Series C
                                                  EIRR bonds totaling $50.0 million
                                                  by issuing unsecured EIRR Bonds
                                                  Series 2005 also totaling $50.0 million
                                                  at a fixed rate of 4.65 %
                                                  until
                                                  maturity at September 1, 2035.
                                                  The previous interest rate period
                                                  on this series,
                                                  with an interest rate of 2.38%,
                                                  expired on August 31, 2005. The Series C
                                                  EIRR bonds were classified as current
                                                  liabilities at December 31, 2004.
                                                  The new
                                                  EIRR Bonds Series 2005 is covered
                                                  by a municipal bond insurance policy
                                                  issued by
                                                  XLCA. The insurance agreement between
                                                  KCP&L and XLCA is described
                                                  below.
  KCP&L
                                                  had $625.0 million of
                                                  outstanding unsecured senior notes
                                                  at December 31, 2005 and 2004.
                                                  During 2005,
                                                  KCP&L privately issued $250.0 million
                                                  of 6.05% unsecured
                                                  senior notes, maturing in 2035.
                                                  The proceeds from the issuance
                                                  were used to
                                                  repay the 7.125% unsecured senior
                                                  notes that matured in 2005. KCP&L entered
                                                  into two Treasury Locks (T-Locks)
                                                  to hedge against interest rate
                                                  fluctuations on
                                                  the U.S. Treasury rate component
                                                  of this issuance. As a result,
                                                  the effective
                                                  interest rate on these notes was
                                                  5.78% at
                                                  December 31, 2005. See Note 21
                                                  for more information about the
                                                  T-Locks.
  KCP&L
                                                  exercised its early termination
                                                  option in the Combustion Turbine
                                                  Synthetic Lease
                                                  and purchased the leased property
                                                  during 2005.
  **Municipal
                                                  Bond Insurance Policies**
 The
                                                  insurance agreements between KCP&L and XLCA provide for reimbursement
                                                  by
                                                  KCP&L for any amounts that XLCA pays
                                                  under the municipal bond insurance
                                                  policies. The insurance policies
                                                  are in effect for the term of the
                                                  bonds. The
                                                  insurance agreements contain a
                                                  covenant that the indebtedness
                                                  to total
                                                  capitalization ratio of KCP&L and its consolidated subsidiaries
                                                  will not be
                                                  greater than 0.68 to 1.00. At December
                                                  31, 2005, KCP&L was in compliance
                                                  with this covenant. KCP&L is also restricted from issuing
                                                  additional bonds
                                                  under its General Mortgage Indenture
                                                  if, after giving effect to such
                                                  additional
                                                  bonds, the proportion of secured
                                                  debt to total indebtedness would
                                                  be more than
                                                  75%, or more than 50% if the long
                                                  term rating for such bonds by Standard
&
Poor’s or Moody’s Investors Service would be at
                                                  or below A- or A3, respectively.
                                                  The insurance agreement covering
                                                  the unsecured EIRR Bond Series
                                                  2005 also
                                                  requires KCP&L to provide XLCA with $50.0 million
                                                  of general
                                                  mortgage 
 113
 bonds
                                                  as
                                                  collateral for KCP&L’s obligations under the insurance
                                                  agreement in the
                                                  event KCP&L issues general mortgage bonds
                                                  (other than refundings of
                                                  outstanding general mortgage bonds)
                                                  resulting in the aggregate amount
                                                  of
                                                  outstanding general mortgage bonds
                                                  exceeding 10% of total capitalization.
                                                  In the
                                                  event of a default under the insurance
                                                  agreements, XLCA may take any available
                                                  legal or equitable action against
                                                  KCP&L, including seeking specific
                                                  performance of the covenants.
  **Other
                                                  Great Plains Energy Long-Term Debt**
 Great Plains
                                                  Energy filed a registration statement,
                                                  which became effective in April
                                                  2004, for
                                                  the issuance of an aggregate amount
                                                  up to $500.0 million of any combination
                                                  of
                                                  senior debt securities, subordinated
                                                  debt securities, trust preferred
                                                  securities
                                                  and related guarantees, common
                                                  stock, warrants, stock purchase
                                                  contracts or
                                                  stock purchase units. The prospectus
                                                  filed with this registration statement
                                                  also
                                                  included $148.2 million of securities
                                                  remaining available to be offered
                                                  under a
                                                  prior registration statement providing
                                                  for an aggregate amount of availability
                                                  of $648.2 million.
  In
                                                  June
                                                  2004, Great Plains Energy issued
                                                  $163.6 million of FELINE PRIDES
                                                  under this
                                                  registration statement. After this
                                                  transaction and the stock issuance
                                                  discussed
                                                  in Note 20, $171.0 million remains
                                                  available under the registration
                                                  statement.
                                                  FELINE PRIDES, each with a stated
                                                  amount of $25, initially consist
                                                  of an
                                                  interest in a senior note due February
                                                  16, 2009, and a contract requiring
                                                  the
                                                  holder to purchase the Company’s common stock on February 16,
                                                  2007. Each
                                                  purchase contract obligates the
                                                  holder of the purchase contract
                                                  to purchase, and
                                                  Great Plains Energy to sell, on
                                                  February 16, 2007, for $25 in cash,
                                                  newly issued
                                                  shares of the Company’s common stock equal to the settlement
                                                  rate. The
                                                  settlement rate will vary according
                                                  to the applicable market value
                                                  of the
                                                  Company’s common stock at the settlement
                                                  date. Applicable market value will
                                                  be
                                                  measured by the average of the
                                                  closing price per share of the
                                                  Company’s common
                                                  stock on each of the 20 consecutive
                                                  trading days ending on the third
                                                  trading day
                                                  immediately preceding February
                                                  16, 2007. The settlement rate will
                                                  be applied to
                                                  the 6.5 million FELINE PRIDES at
                                                  the settlement date to issue a
                                                  number of common
                                                  shares determined as described
                                                  in the following table.
 **Applicable**
                                                        
                                                        **Settlement
                                                            rate**
                                                        
                                                        **Market
                                                            value****market
                                                            value**
                                                        
                                                        **(in
                                                            common shares)**
                                                        
                                                        **per
                                                            common share****(a)**$35.40
                                                            or greater
                                                        
                                                        0.7062
                                                            to 1
                                                        
                                                        Greater
                                                            than $25 per common share$35.40
                                                            to $30.00
                                                        
                                                        $25
                                                            divided by the applicable
                                                        Equal
                                                            to $25 per common sharemarket
                                                            value to 1$30.00
                                                            or less
                                                        
                                                        0.8333
                                                            to 1
                                                        
                                                        Less
                                                            than $25 per common share(a)Assumes
                                                            that the market price
                                                            of the Company’s common stock on February
                                                            16, 2007,
                                                            is thesame as the applicable
                                                            market
                                                            value.
 Great
                                                  Plains Energy makes quarterly contract
                                                  adjustment payments at the rate
                                                  of 3.75%
                                                  per year and interest payments
                                                  at the rate of 4.25% per year both
                                                  payable in
                                                  February, May, August and November
                                                  of each year. Great Plains Energy
                                                  must
                                                  attempt to remarket the senior
                                                  notes, in whole but not in part.
                                                  If the senior
                                                  notes are not successfully remarketed
                                                  between August 16, 2006 and February
                                                  16,
                                                  2007, Great Plains Energy will
                                                  exercise its rights as a secured
                                                  party to dispose
                                                  of the senior notes in accordance
                                                  with applicable law and satisfy
                                                  in full each
                                                  holder’s obligation to purchase the Company’s common stock under the purchase
                                                  contracts.
  The
                                                  June
                                                  2004 fair value of the contract
                                                  adjustment payments of $15.4 million
                                                  was
                                                  recorded as a liability in other
                                                  deferred credits and other liabilities
                                                  with a
                                                  corresponding amount recorded as
                                                  capital stock premium and expense
                                                  on Great
                                                  Plains Energy’s consolidated balance sheet. Expenses
                                                  incurred with the offering
                                                  were allocated between the senior
                                                  notes and the purchase contracts.
                                                  Expenses
                                                  allocated to the senior notes of
                                                  $1.2 million have been deferred
                                                  and are being
                                                  recognized as interest 
 114
 expense
                                                  over the term of the notes. Expenses
                                                  allocated to the purchase contracts
                                                  of $4.2
                                                  million were recorded as capital
                                                  stock premium and expense. Great
                                                  Plains Energy
                                                  has the right to defer the contract
                                                  adjustment payment on the purchase
                                                  contracts, but not the interest
                                                  payments on the senior notes. In
                                                  the event Great
                                                  Plains Energy exercises its option
                                                  to defer the payment of contract
                                                  adjustment
                                                  payments, Great Plains Energy and
                                                  its subsidiaries are not permitted
                                                  to, with
                                                  certain exceptions, declare or
                                                  pay dividends on, make distributions
                                                  with respect
                                                  to, or redeem, purchase or acquire,
                                                  or make a liquidation payment with
                                                  respect
                                                  to, any capital stock of Great
                                                  Plans Energy until the deferred
                                                  contract
                                                  adjustment payments have been paid.
  KLT
                                                  Investments' affordable housing
                                                  notes are collateralized by the
                                                  affordable
                                                  housing investments. Most of the
                                                  notes also require the greater
                                                  of 15% of the
                                                  outstanding note balances or the
                                                  next annual installment to be held
                                                  as cash,
                                                  cash equivalents or marketable
                                                  securities. At December 31, 2005
                                                  and 2004, the
                                                  collateral was held entirely as
                                                  cash and totaled $1.9 million and
                                                  $3.7 million,
                                                  respectively.
  **Scheduled
                                                  Maturities**
 Great
                                                  Plains Energy's and consolidated
                                                  KCP&L's long-term debt maturities for
                                                  the
                                                  next five years are detailed in
                                                  the following table .
 **2006**
                                                        
                                                        **2007**
                                                        
                                                        **2008**
                                                        
                                                        **2009**
                                                        
                                                        **2010**(millions)Consolidated
                                                            KCP&L
                                                        
                                                        $
                                                        -
                                                        
                                                        $
                                                        225.5
                                                        
                                                        $
                                                        -
                                                        
                                                        $
                                                        -
                                                        
                                                        $
                                                        -Other
                                                            Great Plains Energy(a)
                                                        
                                                        
                                                        1.7
                                                        
                                                        
                                                        0.5
                                                        
                                                        
                                                        0.3
                                                        
                                                        
                                                        163.6
                                                        
                                                        
                                                        -Total Great Plains Energy
                                                        
                                                        $
                                                        1.7
                                                        
                                                        $
                                                        226.0
                                                        
                                                        $
                                                        0.3
                                                        
                                                        $
                                                        163.6
                                                        
                                                        $
                                                        -(a)FELINE PRIDES senior
                                                            notes totaling $163.6
                                                            million mature in 2009,
                                                            but must be remarketedbetween August 16, 2006
                                                            and February 16,
                                                            2007.
 **20.**
                                                      **COMMON
                                                          SHAREHOLDERS’ EQUITY AND PREFERRED
                                                          STOCK**  **Common
                                                  Shareholders’ Equity**
 In
                                                  2004,
                                                  Great Plains Energy issued 5.0
                                                  million shares of common stock
                                                  at $30 per share
                                                  under the registration statement
                                                  discussed in Note 19 with $150.0
                                                  million in
                                                  gross proceeds. Issuance costs
                                                  of $5.4 million are reflected in
                                                  capital stock
                                                  premium and expense on Great Plains
                                                  Energy’s consolidated balance sheet and
                                                  statement of common shareholders’ equity.
  Treasury
                                                  shares are held for future distribution
                                                  upon exercise of options issued
                                                  in
                                                  conjunction with the Company’s equity compensation plan.
  Great
                                                  Plains Energy has 3.0 million shares
                                                  of common stock registered with
                                                  the SEC for
                                                  a Dividend Reinvestment and Direct
                                                  Stock Purchase Plan (Plan). The
                                                  Plan allows
                                                  for the purchase of common shares
                                                  by reinvesting dividends or making
                                                  optional
                                                  cash payments. Great Plains Energy
                                                  can issue new shares or purchase
                                                  shares on
                                                  the open market for the Plan. At
                                                  December 31, 2005, 2.0 million shares
                                                  remained available for future issuances.
  Great
                                                  Plains Energy has 9.3 million shares
                                                  of common stock registered with
                                                  the SEC for
                                                  a defined contribution savings
                                                  plan. The Company matches employee
                                                  contributions,
                                                  subject to limits. At December
                                                  31, 2005, 0.6 million shares
                                                  remained available for future issuances.
  Great
                                                  Plains Energy’s Articles of Incorporation contain
                                                  a restriction related to the
                                                  payment of dividends in the event
                                                  common equity falls to 25% of total
                                                  capitalization. If preferred stock
                                                  dividends are not declared and
                                                  paid when
                                                  scheduled, Great Plains Energy
                                                  could not declare or pay common
                                                  stock dividends
                                                  or purchase any common shares.
                                                  If the unpaid preferred stock dividends
                                                  equal
                                                  four or more full quarterly dividends,
                                                  the preferred shareholders, voting
                                                  as a
                                                  single class, could elect the smallest
                                                  number of Directors necessary to
                                                  constitute a majority of the full
                                                  Board of Directors. Under
                                                  stipulations 
 115
 with
                                                  the
                                                  MPSC and KCC, Great Plains Energy
                                                  and KCP&L have committed to maintain
                                                  consolidated common equity of not
                                                  less than 30% and 35%, respectively.
  Great
                                                  Plains Energy made capital contributions
                                                  to KCP&L of $225 million in
                                                  2004.
                                                  These contributions were used to
                                                  pay down long-term debt. At December 31,
                                                  2005, KCP&L’s capital contributions from Great
                                                  Plains Energy totaled $400 million
                                                  and are reflected in common stock
                                                  in the consolidated KCP&L balance
                                                  sheet.
  **Preferred
                                                  Stock**
 At
                                                  December 31, 2005, 1.6 million
                                                  shares of Cumulative No Par Preferred
                                                  Stock and
                                                  11.0 million shares of no par Preference
                                                  Stock were authorized under Great
                                                  Plains Energy’s Articles of Incorporation. Great
                                                  Plains Energy has the option to
                                                  redeem the $39.0 million of issued
                                                  Cumulative Preferred Stock at prices
                                                  approximating par or stated value.
  **21.**
                                                      **DERIVATIVE
                                                          INSTRUMENTS**  The
                                                  Company is exposed to a variety
                                                  of market risks including interest
                                                  rates and
                                                  commodity prices. Management has
                                                  established risk management policies
                                                  and
                                                  strategies to reduce the potentially
                                                  adverse effects that the volatility
                                                  of the
                                                  markets may have on the Company’s operating results. The risk management
                                                  activities, including the use of
                                                  derivative instruments, are subject
                                                  to the
                                                  management, direction and control
                                                  of internal risk management committees.
                                                  Management’s interest rate risk management
                                                  strategy uses derivative instruments
                                                  to adjust the Company’s liability portfolio to optimize
                                                  the mix of fixed and
                                                  floating rate debt within an established
                                                  range. In addition, the Company
                                                  uses
                                                  derivative instruments to hedge
                                                  against future interest rate fluctuations
                                                  on
                                                  anticipated debt issuances. Management
                                                  maintains commodity-price risk
                                                  management
                                                  strategies that use derivative
                                                  instruments to reduce the effects
                                                  of fluctuations
                                                  in fuel and purchased power expense
                                                  caused by commodity price volatility.
                                                  Counterparties to commodity derivatives
                                                  and interest rate swap agreements
                                                  expose
                                                  the Company to credit loss in the
                                                  event of nonperformance. This credit
                                                  loss is
                                                  limited to the cost of replacing
                                                  these contracts at current market
                                                  rates less
                                                  the application of counterparty
                                                  collateral held. Derivative instruments,
                                                  excluding those instruments that
                                                  qualify for the NPNS election which
                                                  are
                                                  accounted for by accrual accounting,
                                                  are recorded on the balance sheet
                                                  at fair
                                                  value as an asset or liability.
                                                  Changes in the fair value are recognized
                                                  currently in net income unless
                                                  specific hedge accounting criteria
                                                  are
                                                  met.
  **Fair
                                                  Value Hedges - Interest Rate Risk
                                                  Management**
 In
                                                  2002,
                                                  KCP&L remarketed its 1998 Series A,
                                                  B and D EIRR bonds totaling $146.5
                                                  million to a five-year fixed interest
                                                  rate of 4.75% ending October 1,
                                                  2007.
                                                  Simultaneously with the remarketing,
                                                  KCP&L entered into an interest rate
                                                  swap for the $146.5 million based
                                                  on the London Interbank Offered
                                                  Rate (LIBOR)
                                                  to effectively create a floating
                                                  interest rate obligation. The transaction
                                                  is a
                                                  fair value hedge with no ineffectiveness.
                                                  Changes in the fair market value
                                                  of
                                                  the swap are recorded on the balance
                                                  sheet as an asset or liability
                                                  with an
                                                  offsetting entry to the respective
                                                  debt balances with no net impact
                                                  on net
                                                  income.
  **Cash
                                                  Flow Hedges - Treasury Locks**
 In
                                                  2005,
                                                  KCP&L entered into two T-Locks to hedge
                                                  against interest rate fluctuations
                                                  on the U.S. Treasury rate component
                                                  of the $250.0 million 30-year long-term
                                                  debt
                                                  that KCP&L issued. The T-Locks settled simultaneously
                                                  with the issuance of
                                                  the long-term fixed rate debt.
                                                  The T-Locks removed the uncertainty
                                                  with respect
                                                  to the U.S. Treasury rate component
                                                  of the debt to be issued, thereby
                                                  enabling
                                                  KCP&L to predict with greater assurance
                                                  what its future interest costs
                                                  on
                                                  that debt would be. The T-Locks
                                                  were accounted for as cash flow
                                                  hedges and no
                                                  ineffectiveness was recorded on
                                                  the T-Locks. A pre-tax gain of
                                                  $12.0 million on
                                                  the T-Locks was recorded to OCI
                                                  and is being reclassified to interest
                                                  expense
                                                  over the life of the issued 30-year
                                                  debt. An insignificant amount was
                                                  reclassified from OCI to interest
                                                  expense subsequent to the debt
                                                  issuance. 
 116
 **Cash
                                                  Flow Hedges - Commodity Risk Management**
 KCP&L’s
                                                  risk management policy is to use
                                                  derivative instruments to mitigate
                                                  its exposure
                                                  to market price fluctuations on
                                                  a portion of its projected natural
                                                  gas purchases
                                                  to meet generation requirements
                                                  for retail and firm wholesale sales.
                                                  At December
                                                  31, 2005, KCP&L did not have any projected natural
                                                  gas usage hedged for
                                                  retail load and firm MWh sales.
                                                  The hedging instruments in place
                                                  at
                                                  December 31, 2004, were designated as cash
                                                  flow hedges. The fair values of
                                                  these instruments are recorded
                                                  as current assets or current liabilities
                                                  with an
                                                  offsetting entry to OCI for the
                                                  effective portion of the hedge.
                                                  To the extent
                                                  the hedges are not effective, the
                                                  ineffective portion of the change
                                                  in fair
                                                  market value is recorded currently
                                                  in fuel expense. KCP&L did not record any
                                                  gains or losses due to ineffectiveness
                                                  during 2005, 2004 or 2003. When
                                                  the
                                                  natural gas is purchased, the amounts
                                                  in OCI are reclassified to fuel
                                                  expense in
                                                  the consolidated income statement.
  Strategic
                                                  Energy maintains a commodity-price
                                                  risk management strategy that uses
                                                  forward
                                                  physical energy purchases and other
                                                  derivative instruments to reduce
                                                  the effects
                                                  of fluctuations in purchased power
                                                  expense caused by commodity-price
                                                  volatility.
                                                  Derivative instruments are used
                                                  to limit the unfavorable effect
                                                  that price
                                                  increases will have on electricity
                                                  purchases, effectively fixing the
                                                  future
                                                  purchase price of electricity for
                                                  the applicable forecasted usage
                                                  and protecting
                                                  Strategic Energy from significant
                                                  price volatility. The maximum term
                                                  over which
                                                  Strategic Energy hedged its exposure
                                                  and variability of future cash
                                                  flows was
                                                  5.0 years and 3.1 years
                                                  at
                                                  December 31, 2005 and 2004, respectively.
  Certain
                                                  forward fixed price purchases and
                                                  swap agreements are designated
                                                  as cash flow
                                                  hedges. The fair values of these
                                                  instruments are recorded as assets
                                                  or
                                                  liabilities with an offsetting
                                                  entry to OCI for the effective
                                                  portion of the
                                                  hedge. To the extent the hedges
                                                  are not effective, the ineffective
                                                  portion of
                                                  the change in fair market value
                                                  is recorded currently in purchased
                                                  power. When
                                                  the forecasted purchase is completed,
                                                  the amounts in OCI are reclassified
                                                  to
                                                  purchased power. Purchased power
                                                  expense for 2005 and 2004, included
                                                  gains of
                                                  $3.3 million and $3.2 million,
                                                  respectively, due to ineffectiveness
                                                  of the cash flow hedges. Strategic
                                                  Energy
                                                  did not record any gains or losses
                                                  due to ineffectiveness during 2003.
  In
                                                  2003,
                                                  Strategic Energy terminated an
                                                  agreement with a swap counterparty
                                                  due to credit
                                                  and performance concerns. Strategic
                                                  Energy received a $4.8 million
                                                  fair value settlement. The swap
                                                  was designated as a cash flow hedge
                                                  of a
                                                  forecasted transaction and Strategic
                                                  Energy management believed the
                                                  forecasted
                                                  transaction would occur. Accordingly,
                                                  the $4.8 million settlement was
                                                  reclassified to purchased power
                                                  expense over the remaining term
                                                  of the
                                                  underlying transaction, which was
                                                  completed in 2003.
  As
                                                  part
                                                  of its commodity-price risk management
                                                  strategy, Strategic Energy also
                                                  enters
                                                  into economic hedges (non-hedging
                                                  derivatives) that do not qualify
                                                  for cash flow
                                                  hedge accounting. The changes in
                                                  the fair value of these derivative
                                                  instruments
                                                  recorded as a component of purchased
                                                  power expense were a $0.8 million
                                                  loss, a
                                                  $1.5 million loss and an insignificant
                                                  gain for 2005, 2004 and 2003,
                                                  respectively.
  The
                                                  fair
                                                  value of non-hedging derivatives
                                                  at December 31, 2005, also includes
                                                  certain forward contracts at Strategic
                                                  Energy that were amended during
                                                  2005.
                                                  Prior to being amended, the contracts
                                                  were accounted for under the NPNS
                                                  election
                                                  in accordance with SFAS No. 133.
                                                  As a result of being amended, the
                                                  contracts no
                                                  longer qualify for NPNS exceptions
                                                  or cash flow hedge accounting and
                                                  are now
                                                  accounted for as non-hedging derivatives
                                                  with the fair value at amendment
                                                  being
                                                  recorded as a deferred liability
                                                  that will be reclassified to net
                                                  income as the
                                                  contracts settle. Strategic Energy
                                                  is recording the change in fair
                                                  value of
                                                  these contracts after the amendment
                                                  as a component of purchased power
                                                  expense.
 117
 The
                                                  notional and recorded fair values
                                                  of the Company’s derivative instruments are
                                                  summarized in the following table.
                                                  The fair values of these derivatives
                                                  are
                                                  recorded on the consolidated balance
                                                  sheets.
 **December
                                                            31****2005**
                                                        
                                                        **2004****Notional**
                                                        
                                                        
                                                        **Notional****Contract**
                                                        **Fair**
                                                        
                                                        **Contract**
                                                        **Fair****Amount**
                                                        **Value**
                                                        
                                                        **Amount**
                                                        **Value****Great
                                                            Plains Energy**
                                                        
                                                        (millions)Swap
                                                            contractsCash flow hedges
                                                        
                                                        $
                                                        164.7
                                                        
                                                        $
                                                        23.8
                                                        
                                                        $
                                                        92.4
                                                        
                                                        $
                                                        4.5Non-hedging derivatives
                                                        
                                                        
                                                        35.5
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        2.3
                                                        
                                                        
                                                        0.7Forward
                                                            contractsCash flow hedges
                                                        
                                                        
                                                        121.9
                                                        
                                                        
                                                        21.0
                                                        
                                                        
                                                        23.0
                                                        
                                                        
                                                        1.6Non-hedging derivatives
                                                        
                                                        
                                                        178.3
                                                        
                                                        
                                                        3.6
                                                        
                                                        
                                                        5.5
                                                        
                                                        
                                                        (2.2
                                                        )Interest
                                                            rate swapsFair value hedges
                                                        
                                                        
                                                        146.5
                                                        
                                                        
                                                        (2.6
                                                        )
                                                        
                                                        146.5
                                                        
                                                        
                                                        0.7**Consolidated
                                                            KCP&L**Swap
                                                            contractsCash flow hedges
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        6.3
                                                        
                                                        
                                                        (0.3
                                                        )Interest
                                                            rate swapsFair value hedges
                                                        
                                                        
                                                        146.5
                                                        
                                                        
                                                        (2.6
                                                        )
                                                        
                                                        146.5
                                                        
                                                        
                                                        0.7
 The
                                                  amounts recorded in accumulated
                                                  OCI related to the cash flow hedges
                                                  are
                                                  summarized in the following table.
 **Great
                                                              Plains Energy**
                                                        **Consolidated
                                                            KCP&L****December
                                                            31**
                                                        **December
                                                            31****2005**
                                                        **2004**
                                                        **2005**
                                                        **2004**(millions)Current
                                                            assets
                                                        
                                                        $
                                                        35.8
                                                        
                                                        $
                                                        2.5
                                                        
                                                        $
                                                        11.9
                                                        
                                                        $
                                                        (0.3
                                                        )Other
                                                            deferred charges
                                                        
                                                        
                                                        11.8
                                                        
                                                        
                                                        0.9
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        -Other
                                                            current liabilities
                                                        
                                                        
                                                        1.6
                                                        
                                                        
                                                        (0.5
                                                        )
                                                        
                                                        -
                                                        
                                                        
                                                        -Deferred
                                                            income taxes
                                                        
                                                        
                                                        (20.5
                                                        )
                                                        
                                                        (0.8
                                                        )
                                                        
                                                        (4.5
                                                        )
                                                        
                                                        0.2Other
                                                            deferred credits
                                                        
                                                        
                                                        1.0
                                                        
                                                        
                                                        (0.9
                                                        )
                                                        
                                                        -
                                                        
                                                        
                                                        -Total
                                                        
                                                        $
                                                        29.7
                                                        
                                                        $
                                                        1.2
                                                        
                                                        $
                                                        7.4
                                                        
                                                        $
                                                        (0.1
                                                        )
 The
                                                  amounts recorded in current assets
                                                  and liabilities reflected in accumulated
                                                  OCI
                                                  in the table above at December
                                                  31, 2005, are expected to be reclassified
                                                  to
                                                  expenses during the next twelve
                                                  months for Great Plains Energy
                                                  and consolidated
                                                  KCP&L.
 118
 The
                                                  amounts reclassified to expenses
                                                  are summarized in the following
                                                  table.
 **2005**
                                                        **2004**
                                                        **2003****Great
                                                            Plains Energy**Fuel
                                                            expense
                                                        
                                                        $
                                                        (0.5
                                                        )
                                                        $
                                                        (0.7
                                                        )
                                                        $
                                                        (0.8
                                                        )Purchased
                                                            power expense
                                                        
                                                        
                                                        (35.6
                                                        )
                                                        
                                                        (0.6
                                                        )
                                                        
                                                        (9.0
                                                        )Minority
                                                            interest
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        0.2
                                                        
                                                        
                                                        1.0Income
                                                            taxes
                                                        
                                                        
                                                        15.1
                                                        
                                                        
                                                        0.5
                                                        
                                                        
                                                        3.8OCI
                                                        
                                                        $
                                                        (21.0
                                                        )
                                                        $
                                                        (0.6
                                                        )
                                                        $
                                                        (5.0
                                                        )**Consolidated
                                                            KCP&L**Fuel
                                                            expense
                                                        
                                                        $
                                                        (0.5
                                                        )
                                                        $
                                                        (0.7
                                                        )
                                                        $
                                                        (0.8
                                                        )Income
                                                            taxes
                                                        
                                                        
                                                        0.2
                                                        
                                                        
                                                        0.3
                                                        
                                                        
                                                        0.3OCI
                                                        
                                                        $
                                                        (0.3
                                                        )
                                                        $
                                                        (0.4
                                                        )
                                                        $
                                                        (0.5
                                                        )
 **22.**
                                                      **JOINTLY
                                                          OWNED ELECTRIC UTILITY
                                                          PLANTS** KCP&L’s
                                                  share of jointly owned electric
                                                  utility plants at December 31,
                                                  2005, is detailed
                                                  in the following table.
 **Wolf
                                                            Creek**
                                                        **LaCygne**
                                                        **Iatan
                                                            No. 1****Unit**
                                                        **Units**
                                                        **Unit**(millions,
                                                            except MW amounts)KCP&L's
                                                            share
                                                        
                                                        47
                                                        %
                                                        
                                                        50
                                                        %
                                                        
                                                        70
                                                        %Utility
                                                            plant in service
                                                        $
                                                        1,414
                                                        
                                                        $
                                                        337
                                                        
                                                        $
                                                        263Accumulated
                                                            depreciation
                                                        
                                                        712
                                                        
                                                        
                                                        244
                                                        
                                                        
                                                        190Nuclear
                                                            fuel, net
                                                        
                                                        28KCP&L's
                                                            accredited capacity--MWs
                                                        
                                                        548
                                                        
                                                        
                                                        711
                                                        
                                                        
                                                        456
                                                        (a)(a)
                                                        The
                                                          Iatan No. 2 air permit
                                                          limits KCP&L's accredited capacity
                                                          of Iatan No.
                                                          1to
                                                          456 MWs from 469 MWs until
                                                          the air quality control
                                                          equipment
                                                          includedin
                                                          the comprehensive energy
                                                          plan is operational.
 Each
                                                  owner must fund its own portion
                                                  of the plant's operating expenses
                                                  and capital
                                                  expenditures. KCP&L’s share of direct expenses is included
                                                  in the
                                                  appropriate operating expense classifications
                                                  in Great Plains Energy’s and
                                                  consolidated KCP&L’s financial statements.
 119
 **23.**
                                                          **QUARTERLY
                                                              OPERATING RESULTS (UNAUDITED****)**
 **Quarter****Great
                                                            Plains Energy**
                                                        
                                                        **1st**
                                                        
                                                        **2nd**
                                                        
                                                        **3rd**
                                                        
                                                        **4th****2005**
                                                        
                                                        (millions,
                                                            except per share amounts)Operating
                                                            revenue
                                                        
                                                        $
                                                        545.1
                                                        
                                                        $
                                                        631.7
                                                        
                                                        $
                                                        782.9
                                                        
                                                        $
                                                        645.2Operating
                                                            income
                                                        
                                                        
                                                        41.8
                                                        
                                                        
                                                        62.6
                                                        
                                                        
                                                        125.5
                                                        
                                                        
                                                        53.3Income
                                                            from continuing operations
                                                        
                                                        
                                                        20.2
                                                        
                                                        
                                                        25.5
                                                        
                                                        
                                                        89.1
                                                        
                                                        
                                                        29.4Net
                                                            income
                                                        
                                                        
                                                        20.2
                                                        
                                                        
                                                        21.9
                                                        
                                                        
                                                        90.9
                                                        
                                                        
                                                        29.3Basic
                                                            and diluted earning per
                                                            commonshare from continuing
                                                            operations
                                                        
                                                        
                                                        0.27
                                                        
                                                        
                                                        0.34
                                                        
                                                        
                                                        1.19
                                                        
                                                        
                                                        0.39Basic
                                                            and diluted earning per
                                                            common share
                                                        
                                                        
                                                        0.27
                                                        
                                                        
                                                        0.29
                                                        
                                                        
                                                        1.21
                                                        
                                                        
                                                        0.39**2004**Operating
                                                            revenue
                                                        
                                                        $
                                                        541.5
                                                        
                                                        $
                                                        613.5
                                                        
                                                        $
                                                        714.8
                                                        
                                                        $
                                                        594.2Operating
                                                            income
                                                        
                                                        
                                                        62.6
                                                        
                                                        
                                                        82.3
                                                        
                                                        
                                                        125.5
                                                        
                                                        
                                                        48.4Income
                                                            from continuing operations
                                                        
                                                        
                                                        29.5
                                                        
                                                        
                                                        41.4
                                                        
                                                        
                                                        67.9
                                                        
                                                        
                                                        34.7Net
                                                            income
                                                        
                                                        
                                                        27.3
                                                        
                                                        
                                                        41.6
                                                        
                                                        
                                                        75.9
                                                        
                                                        
                                                        36.0Basic
                                                            and diluted earning per
                                                            commonshare from continuing
                                                            operations
                                                        
                                                        
                                                        0.42
                                                        
                                                        
                                                        0.59
                                                        
                                                        
                                                        0.91
                                                        
                                                        
                                                        0.46Basic
                                                            and diluted earning per
                                                            common share
                                                        
                                                        
                                                        0.39
                                                        
                                                        
                                                        0.59
                                                        
                                                        
                                                        1.02
                                                        
                                                        
                                                        0.48
 **Quarter****Consolidated
                                                            KCP&L**
                                                        
                                                        **1st**
                                                        
                                                        **2nd**
                                                        
                                                        **3rd**
                                                        
                                                        **4th****2005**
                                                        
                                                        (millions)Operating
                                                            revenue
                                                        
                                                        $
                                                        233.3
                                                        
                                                        $
                                                        272.1
                                                        
                                                        $
                                                        353.0
                                                        
                                                        $
                                                        272.5Operating
                                                            income
                                                        
                                                        
                                                        24.6
                                                        
                                                        
                                                        59.0
                                                        
                                                        
                                                        100.1
                                                        
                                                        
                                                        66.0Net
                                                            income
                                                        
                                                        
                                                        10.3
                                                        
                                                        
                                                        29.0
                                                        
                                                        
                                                        68.9
                                                        
                                                        
                                                        35.5**2004**Operating
                                                            revenue
                                                        
                                                        $
                                                        247.0
                                                        
                                                        $
                                                        275.0
                                                        
                                                        $
                                                        323.7
                                                        
                                                        $
                                                        245.9Operating
                                                            income
                                                        
                                                        
                                                        49.7
                                                        
                                                        
                                                        68.3
                                                        
                                                        
                                                        111.3
                                                        
                                                        
                                                        37.8Net
                                                            income
                                                        
                                                        
                                                        21.2
                                                        
                                                        
                                                        32.3
                                                        
                                                        
                                                        63.9
                                                        
                                                        
                                                        25.9
 Quarterly
                                                    data is subject to seasonal fluctuations
                                                    with peak periods occurring in
                                                    the
                                                    summer months.
 120
 **REPORT
                                          OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
                                          FIRM**
  To
                                          the
                                          Board of Directors and Shareholders of
 Great
                                          Plains Energy Incorporated
  We
                                          have
                                          audited the accompanying consolidated balance
                                          sheets of Great Plains Energy
                                          Incorporated and subsidiaries (the “Company”) as of December 31, 2005 and 2004,
                                          and the related consolidated statements
                                          of income, comprehensive income, common
                                          shareholders’ equity, and cash flows for each of the
                                          three years in the period
                                          ended December 31, 2005.  Our audits also included the financial
                                          statement
                                          schedules listed in the Index at Item 15.
                                          These financial statements and
                                          financial statement schedules are the responsibility
                                          of the Company's
                                          management.  Our responsibility is to express an opinion
                                          on the financial
                                          statements and financial statement schedules
                                          based on our audits.
  We
                                          conducted our audits in accordance with
                                          the standards of the Public Company
                                          Accounting Oversight Board (United States).  Those standards require that
                                          we plan and perform the audit to obtain
                                          reasonable assurance about whether the
                                          financial statements are free of material
                                          misstatement.  An audit includes
                                          examining, on a test basis, evidence supporting
                                          the amounts and disclosures in
                                          the financial statements.  An audit also includes assessing the accounting
                                          principles used and significant estimates
                                          made by management, as well as
                                          evaluating the overall financial statement
                                          presentation.  We believe that
                                          our audits provide a reasonable basis for
                                          our opinion.
  In
                                          our
                                          opinion, such consolidated financial statements
                                          present fairly, in all material
                                          respects, the financial position of Great
                                          Plains Energy Incorporated and
                                          subsidiaries as of December 31, 2005 and
                                          2004, and the results of their
                                          operations and their cash flows for each
                                          of the three years in the period ended
                                          December 31, 2005, in conformity with accounting
                                          principles generally accepted
                                          in the United States of America. Also,
                                          in our opinion, such financial statement
                                          schedules, when considered in relation
                                          to the basic consolidated financial
                                          statements taken as a whole, present fairly,
                                          in all material respects, the
                                          information set forth therein.
  As
                                          discussed in Note 16 to the consolidated
                                          financial statements, effective
                                          December 31, 2005, the Company changed
                                          its method of accounting for conditional
                                          asset retirement obligations to adopt FIN
                                          47 “ *Accounting
                                          for Conditional Asset Retirement Obligations”.*  As
                                          discussed in Note 2 to the consolidated
                                          financial statements, in 2005 the
                                          Company changed the presentation of its
                                          consolidated statements of cash flows to
                                          include the cash flows from operating,
                                          investing, and financing activities of
                                          discontinued operations within the respective
                                          categories of operating, investing
                                          and financing activities of the Company
                                          and retroactively revised the statements
                                          of cash flows for the years ended December
                                          31, 2004 and 2003, for the change.
  We
                                          have
                                          also audited, in accordance with the standards
                                          of the Public Company Accounting
                                          Oversight Board (United States), the effectiveness
                                          of the Company's internal
                                          control over financial reporting as of
                                          December 31, 2005, based on the criteria
                                          established in *Internal
                                          Control—Integrated Framework* issued
                                          by the Committee of Sponsoring Organizations
                                          of the Treadway Commission and our
                                          report dated March 8, 2006, expressed an
                                          unqualified opinion on management's
                                          assessment of the effectiveness of the
                                          Company's internal control over financial
                                          reporting and an unqualified opinion on
                                          the effectiveness of the Company's
                                          internal control over financial reporting.
  /s/DELOITTE
                                          & TOUCHE LLP **
  Kansas
                                          City, Missouri
 March
                                          8,
                                          2006
   121
 **REPORT
                                          OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
                                          FIRM**
  To
                                          the
                                          Board of Directors of
 Kansas
                                          City Power & Light Company
  We
                                          have
                                          audited the accompanying consolidated balance
                                          sheets of Kansas City Power &
Light Company and subsidiaries (the “Company”) as of December 31, 2005 and 2004,
                                          and the related consolidated statements
                                          of income, comprehensive income, common
                                          shareholder’s equity, and cash flows for each of the
                                          three years in the period
                                          ended December 31, 2005.  Our audits also included the financial
                                          statement
                                          schedules listed in the Index at Item 15.  These financial statements and
                                          financial statement schedules are the responsibility
                                          of the Company's
                                          management.  Our responsibility is to express an opinion
                                          on the financial
                                          statements and financial statement schedules
                                          based on our audits.
  We
                                          conducted our audits in accordance with
                                          the standards of the Public Company
                                          Accounting Oversight Board (United States).  Those standards require that
                                          we plan and perform the audit to obtain
                                          reasonable assurance about whether the
                                          financial statements are free of material
                                          misstatement.  An audit includes
                                          examining, on a test basis, evidence supporting
                                          the amounts and disclosures in
                                          the financial statements.  An audit also includes assessing the accounting
                                          principles used and significant estimates
                                          made by management, as well as
                                          evaluating the overall financial statement
                                          presentation.  We believe that
                                          our audits provide a reasonable basis for
                                          our opinion.
  In
                                          our
                                          opinion, such consolidated financial statements
                                          present fairly, in all material
                                          respects, the financial position of Kansas
                                          City Power & Light and
                                          subsidiaries as of December 31, 2005 and
                                          2004, and the results of their
                                          operations and their cash flows for each
                                          of the three years in the period ended
                                          December 31, 2005, in conformity with accounting
                                          principles generally accepted
                                          in the United States of America.  Also, in our opinion, such financial
                                          statement schedules, when considered in
                                          relation to the basic consolidated
                                          financial statements taken as a whole,
                                          present fairly, in all material respects,
                                          the information set forth therein.
  As
                                          discussed in Note 16 to the consolidated
                                          financial statements, effective
                                          December 31, 2005, the Company changed
                                          its method of accounting for conditional
                                          asset retirement obligations to adopt FIN
                                          47 “ *Accounting
                                          for Conditional Asset Retirement Obligations”* .
                                          As
                                          discussed in Note 2 to the consolidated
                                          financial statements, in 2005 the
                                          Company changed the presentation of its
                                          consolidated statements of cash flows to
                                          include the cash flows from operating,
                                          investing, and financing activities of
                                          discontinued operations within the respective
                                          categories of operating, investing
                                          and financing activities of the Company
                                          and retroactively revised the statement
                                          of cash flows for the year ended December
                                          31, 2003, for the change.
  We
                                          have
                                          also audited, in accordance with the standards
                                          of the Public Company Accounting
                                          Oversight Board (United States), the effectiveness
                                          of the Company's internal
                                          control over financial reporting as of
                                          December 31, 2005, based on the criteria
                                          established in *Internal
                                          Control—Integrated Framework* issued
                                          by the Committee of Sponsoring Organizations
                                          of the Treadway Commission and our
                                          report dated March 8, 2006, expressed an
                                          unqualified opinion on management's
                                          assessment of the effectiveness of the
                                          Company's internal control over financial
                                          reporting and an unqualified opinion on
                                          the effectiveness of the Company's
                                          internal control over financial reporting.
  /s/DELOITTE
                                          & TOUCHE LLP
  Kansas
                                          City, Missouri
 March
                                          8,
                                          2006
 122
 **ITEM
                      9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                      AND FINANCIAL
                      DISCLOSURE**
  None.
  **ITEM
                      9A. CONTROLS AND PROCEDURES**
  **Disclosure
                      Controls and Procedures**
 Great
                      Plains Energy and KCP&L carried out evaluations of their disclosure controls
                      and procedures (as defined in Rules 13a-15(e) or 15d-15(e)
                      under the Securities
                      Exchange Act of 1934, as amended). These evaluations were conducted
                      under the
                      supervision, and with the participation, of each company’s management, including
                      the chief executive officer and chief financial officer of
                      each company and the
                      companies’ disclosure committee.
 
 Based
                      upon these evaluations, the chief executive officer and chief
                      financial officer
                      of Great Plains Energy and KCP&L, respectively, have concluded as of the end
                      of the period covered by this report that the disclosure controls
                      and procedures
                      of Great Plains Energy and KCP&L are functioning effectively to provide
                      reasonable assurance that: (i) the information required to
                      be disclosed by the
                      respective companies in the reports that they file or submit
                      under the
                      Securities Exchange Act of 1934, as amended, is recorded, processed,
                      summarized
                      and reported within the time periods specified in the SEC’s rules and forms; and
                      (ii) the information required to be disclosed by the respective
                      companies in the
                      reports that they file or submit under the Securities Exchange
                      Act of 1934, as
                      amended, is accumulated and communicated to their respective
                      management,
                      including the principal executive and principal financial officers,
                      as
                      appropriate to allow timely decisions regarding required
                      disclosure.
  **Changes
                      in Internal Control Over Financial Reporting**
 There
                      has
                      been no change in Great Plains Energy’s internal control over financial
                      reporting that occurred during the quarterly period ended December
                      31, 2005,
                      that has materially affected, or is reasonably likely to materially
                      affect, its
                      internal control over financial reporting, other than the implementation
                      by
                      Strategic Energy of a new energy supply-side management system,
                      which converted
                      manual controls to electronic controls with no change to control
                      objectives.
  There
                      has
                      been no change in KCP&L’s internal control over financial reporting that
                      occurred during the quarterly period ended December 31, 2005,
                      that has
                      materially affected, or is reasonably likely to materially
                      affect, its internal
                      control over financial reporting.
  **Management’s
                      Report on Internal Control Over Financial Reporting**
 Because
                      of the inherent limitations of internal control over financial
                      reporting,
                      including the possibility of collusion or improper override
                      of controls,
                      material misstatements due to error or fraud may not be prevented
                      or detected on
                      a timely basis. Therefore, even those systems determined to
                      be effective can
                      provide only reasonable assurance with respect to financial
                      statement
                      preparation and presentation. Also, projections of any evaluation
                      of the
                      effectiveness of internal control over financial reporting
                      to future periods are
                      subject to the risk that the controls may become inadequate
                      because of changes
                      in conditions, or that the degree of compliance with the policies
                      or procedures
                      may deteriorate.
  ***Great
                      Plains Energy***
 Management
                      is responsible for establishing and maintaining adequate internal
                      control over
                      financial reporting (as defined in Rule 13a-15(f) under the
                      Securities Exchange
                      Act of 1934, as amended) for Great Plains Energy. Under the
                      supervision and with
                      the participation of Great Plains Energy’s chief executive officer and chief
                      financial officer, management evaluated the effectiveness of
                      Great Plains
                      Energy’s internal control over financial reporting as of December
                      31, 2005.
                      Management used for this evaluation the framework in *Internal
                      Control - Integrated Framework* issued
                      by the Committee of Sponsoring
                      Organizations (COSO) of the Treadway Commission. Management
                      has concluded that,
                      as
  123
  of
                        December 31, 2005, Great Plains Energy’s internal control over financial
                        reporting is effective based on the criteria set forth in
                        the COSO framework.
                        Deloitte & Touche, LLP, the independent registered public accounting
                        firm
                        that audited the financial statements included in this annual
                        report on
 Form
                        10-K, has issued its audit report on this assessment, which
                        is included
                        below.
 **REPORT
                      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
  To
                      the
                      Board of Directors and Shareholders of
 Great
                      Plains Energy Incorporated
  We
                      have
                      audited management's assessment, included in the accompanying
                      Management’s
                      Report on Internal Control Over Financial Reporting, that Great
                      Plains Energy
                      Incorporated and subsidiaries (the “Company”) maintained effective internal
                      control over financial reporting as of December 31, 2005, based
                      on criteria
                      established in *Internal
                      Control—Integrated Framework* issued
                      by
                      the Committee of Sponsoring Organizations of the Treadway Commission.  The
                      Company's management is responsible for maintaining effective
                      internal control
                      over financial reporting and for its assessment of the effectiveness
                      of internal
                      control over financial reporting.  Our responsibility is to express an
                      opinion on management's assessment and an opinion on the effectiveness
                      of the
                      Company's internal control over financial reporting based on
                      our
                      audit.
  We
                      conducted our audit in accordance with the standards of the
                      Public Company
                      Accounting Oversight Board (United States).  Those standards require that
                      we plan and perform the audit to obtain reasonable assurance
                      about whether
                      effective internal control over financial reporting was maintained
                      in all
                      material respects.  Our audit included obtaining an understanding of
                      internal control over financial reporting, evaluating management's
                      assessment,
                      testing and evaluating the design and operating effectiveness
                      of internal
                      control, and performing such other procedures as we considered
                      necessary in the
                      circumstances.  We believe that our audit provides a reasonable basis for
                      our opinions.
  A
                      company's internal control over financial reporting is a process
                      designed by, or
                      under the supervision of, the company's principal executive
                      and principal
                      financial officers, or persons performing similar functions,
                      and effected by the
                      company's board of directors, management, and other personnel
                      to provide
                      reasonable assurance regarding the reliability of financial
                      reporting and the
                      preparation of financial statements for external purposes in
                      accordance with
                      generally accepted accounting principles.  A company's internal control
                      over financial reporting includes those policies and procedures
                      that (1) pertain
                      to the maintenance of records that, in reasonable detail, accurately
                      and fairly
                      reflect the transactions and dispositions of the assets of
                      the company; (2)
                      provide reasonable assurance that transactions are recorded
                      as necessary to
                      permit preparation of financial statements in accordance with
                      generally accepted
                      accounting principles, and that receipts and expenditures of
                      the company are
                      being made only in accordance with authorizations of management
                      and directors of
                      the company; and (3) provide reasonable assurance regarding
                      prevention or timely
                      detection of unauthorized acquisition, use, or disposition
                      of the company's
                      assets that could have a material effect on the financial
                      statements.
  Because
                      of the inherent limitations of internal control over financial
                      reporting,
                      including the possibility of collusion or improper management
                      override of
                      controls, material misstatements due to error or fraud may
                      not be prevented or
                      detected on a timely basis.  Also, projections of any evaluation of the
                      effectiveness of the internal control over financial reporting
                      to future periods
                      are subject to the risk that the controls may become inadequate
                      because of
                      changes in conditions, or that the degree of compliance with
                      the policies or
                      procedures may deteriorate.
  In
                      our
                      opinion, management's assessment that the Company maintained
                      effective internal
                      control over financial reporting as of December 31, 2005, is
                      fairly stated, in
                      all material respects, based on the criteria established in *Internal
                      Control—Integrated Framework* issued
                      by
                      the Committee of Sponsoring  124
  Organizations
                        of the Treadway Commission.  Also in our opinion, the Company maintained,
                        in all material respects, effective internal control over
                        financial reporting as
                        of December 31, 2005, based on the criteria established in
*Internal
                        Control—Integrated Framework*issued by the Committee of Sponsoring
                        Organizations of the Treadway Commission.
 We
                      have
                      also audited, in accordance with the standards of the Public
                      Company Accounting
                      Oversight Board (United States), the consolidated financial
                      statements and
                      financial statement schedules as of and for the year ended
                      December 31, 2005, of
                      the Company and our report dated March 8, 2006, expressed an
                      unqualified opinion
                      on those financial statements and financial statement schedules
                      and included an
                      explanatory paragraph regarding the Company’s adoption of a new accounting
                      standard and revisions made to the consolidated statements
                      of cash flows for the
                      years ended December 31, 2004 and 2003.
  /s/DELOITTE
                      & TOUCHE LLP
  Kansas
                      City, Missouri
 March
                      8,
                      2006
  ***KCP&L***
 Management
                      is responsible for establishing and maintaining adequate internal
                      control over
                      financial reporting (as defined in Rule 15d-15(f) under the
                      Securities Exchange
                      Act of 1934, as amended) for KCP&L. Under the supervision and with the
                      participation of KCP&L’s chief executive officer and chief financial
                      officer, management evaluated the effectiveness of KCP&L’s internal control
                      over financial reporting as of December 31, 2005. Management
                      used for this
                      evaluation the framework in *Internal
                      Control - Integrated Framework* issued
                      by the COSO of the Treadway Commission. Management has concluded
                      that, as of
                      December 31, 2005, KCP&L’s internal control over financial reporting is
                      effective based on the criteria set forth in the COSO framework.
                      Deloitte &
Touche, LLP, the independent registered public accounting firm
                      that audited the
                      financial statements included in this annual report on Form
                      10-K, has issued its
                      audit report on this assessment, which is included below.
 
 **REPORT
                      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
  To
                      the
                      Board of Directors of
 Kansas
                      City Power & Light Company
  We
                      have
                      audited management's assessment, included in the accompanying
                      Management’s
                      Report on Internal Control Over Financial Reporting, that Kansas
                      City Power
& Light Company and subsidiaries (the “Company”) maintained effective
                      internal control over financial reporting as of December 31,
                      2005, based on
                      criteria established in *Internal
                      Control - Integrated Framework* issued
                      by
                      the Committee of Sponsoring Organizations of the Treadway Commission.  The
                      Company's management is responsible for maintaining effective
                      internal control
                      over financial reporting and for its assessment of the effectiveness
                      of internal
                      control over financial reporting.  Our responsibility is to express an
                      opinion on management's assessment and an opinion on the effectiveness
                      of the
                      Company's internal control over financial reporting based on
                      our
                      audit.
  We
                      conducted our audit in accordance with the standards of the
                      Public Company
                      Accounting Oversight Board (United States).  Those standards require that
                      we plan and perform the audit to obtain reasonable assurance
                      about whether
                      effective internal control over financial reporting was maintained
                      in all
                      material respects.  Our audit included obtaining an understanding of
                      internal control over financial reporting, evaluating management's
                      assessment,
                      testing and evaluating the design and operating effectiveness
                      of internal
                      control, and performing such other procedures as we considered
                      necessary in the
                      circumstances.  We believe that our audit provides a reasonable basis for
                      our opinions.  125
  A
                          company's internal control over financial reporting is
                          a process designed by, or
                          under the supervision of, the company's principal executive
                          and principal
                          financial officers, or persons performing similar functions,
                          and effected by the
                          company's board of directors, management, and other personnel
                          to provide
                          reasonable assurance regarding the reliability of financial
                          reporting and the
                          preparation of financial statements for external purposes
                          in accordance with
                          generally accepted accounting principles.  A company's internal control
                          over financial reporting includes those policies and procedures
                          that (1) pertain
                          to the maintenance of records that, in reasonable detail,
                          accurately and fairly
                          reflect the transactions and dispositions of the assets
                          of the company; (2)
                          provide reasonable assurance that transactions are recorded
                          as necessary to
                          permit preparation of financial statements in accordance
                          with generally accepted
                          accounting principles, and that receipts and expenditures
                          of the company are
                          being made only in accordance with authorizations of management
                          and directors of
                          the company; and (3) provide reasonable assurance regarding
                          prevention or timely
                          detection of unauthorized acquisition, use, or disposition
                          of the company's
                          assets that could have a material effect on the financial
                          statements.
  Because
                          of the inherent limitations of internal control over financial
                          reporting,
                          including the possibility of collusion or improper management
                          override of
                          controls, material misstatements due to error or fraud
                          may not be prevented or
                          detected on a timely basis.  Also, projections of any evaluation of the
                          effectiveness of the internal control over financial reporting
                          to future periods
                          are subject to the risk that the controls may become inadequate
                          because of
                          changes in conditions, or that the degree of compliance
                          with the policies or
                          procedures may deteriorate.
  In
                          our
                          opinion, management's assessment that the Company maintained
                          effective internal
                          control over financial reporting as of December 31, 2005,
                          is fairly stated, in
                          all material respects, based on the criteria established
                          in *Internal
                          Control—Integrated Framework* issued
                          by
                          the Committee of Sponsoring Organizations of the Treadway
                          Commission.  Also
                          in our opinion, the Company maintained, in all material
                          respects, effective
                          internal control over financial reporting as of December
                          31, 2005, based on the
                          criteria established in *Internal
                          Control—Integrated Framework* issued
                          by
                          the Committee of Sponsoring Organizations of the Treadway
                          Commission.
  We
                          have
                          also audited, in accordance with the standards of the Public
                          Company Accounting
                          Oversight Board (United States), the consolidated financial
                          statements and
                          financial statement schedules as of and for the year ended
                          December 31, 2005, of
                          the Company and our report dated March 8, 2006, expressed ** an
                          unqualified opinion on those financial statements and financial
                          statement
                          schedules and included an explanatory paragraph regarding
                          the Company’s adoption
                          of a new accounting standard and revisions made to the
                          consolidated statement of
                          cash flows for the year ended December 31, 2003.
  /s/DELOITTE
                          & TOUCHE LLP
  Kansas
                          City, Missouri
 March
                          8,
                          2006
  **ITEM
                          9B. OTHER INFORMATION**
  None.
  **PART
                          III**
  **ITEM
                          10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS**
  **Great
                          Plains Energy Directors**
 The
                          following information is incorporated by reference from
                          the Great Plains Energy
                          2006 Proxy Statement, which will be filed with the SEC
                          no later than March 31,
                          2006 (Proxy Statement):  126
 ·
                              Information
                                  regarding the directors of Great Plains Energy
                                  required by this item
                                  contained in the section titled “Election of
                                  Directors”.  ·
                              Information
                                  regarding the Audit Committee of Great Plains Energy
                                  required by this item
                                  contained in the sections titled “Corporate Governance”, “Election of
                                  Directors” and “Director Independence”.  **KCP&L
                          Directors**
 Great
                          Plains Energy, as the sole shareholder of KCP&L, elects the directors of
                          KCP&L. The directors of KCP&L are also directors of Great Plains Energy,
                          and the Board committees of Great Plains Energy function
                          as the Board committees
                          of KCP&L. The nine individuals listed below are all of the current
                          directors
                          of KCP&L and have consented to stand for election to the Board
                          of Great
                          Plains Energy. If they are elected at the annual shareholders
                          meeting on May 2,
                          2006, to serve on the Great Plains Energy Board, they will
                          also be elected to
                          the KCP&L Board to serve as directors until the next annual shareholders
                          meeting and until their successors are elected and qualified.
                          The committee
                          information listed for each director refers to the Great
                          Plains Energy Board
                          committees, which function as the KCP&L Board committees.
  **David
                          L. Bodde** Director
                          since 1994
 Dr.
                          Bodde, 63, is the Senior Fellow and Professor, Arthur M.
                          Spiro Center for
                          Entrepreneurial Leadership at Clemson University (since
                          2004). He previously
                          held the Charles N. Kimball Professor of Technology and
                          Innovation (1996-2004)
                          at the University of Missouri-Kansas City. He also serves
                          on the board of The
                          Commerce Funds. Dr. Bodde served as a member of the Executive, Audit and
                          Governance committees during 2005.
 
 **Michael
                          J. Chesser** Director
                          since 2003
 Mr.
                          Chesser, 57, is Chairman of the Board and Chief Executive
                          Officer - Great Plains
                          Energy and Chairman of the Board - KCP&L (since October 2003). Previously he
                          served as Chief Executive Officer of United Water (2002-2003);
                          and President and
                          Chief Executive Officer of GPU Energy (2000-2002). Mr. Chesser served as a
                          member of the Executive committee in 2005.
  **William
                          H. Downey** Director
                          since 2003
 Mr.
                          Downey, 61, is President and Chief Operating Officer - Great
                          Plains Energy and President and Chief Executive Officer - KCP&L (since October 2003). Mr. Downey joined the Company in
                          2000 as
                          Executive Vice President - Kansas City Power & Light Company and President -
                          KCPL Delivery Company. Mr. Downey also serves on the board of Enterprise
                          Financial Services Corp.
  **Mark
                          A. Ernst** Director
                          since 2000
 Mr.
                          Ernst, 47, is Chairman of the Board, President and Chief
                          Executive Officer of
                          H&R Block, Inc., a global provider of tax preparation, investment,
                          mortgage
                          and accounting services. He was elected Chairman of the
                          Board in 2002, Chief
                          Executive Officer in 2001 and President in 1999. Mr. Ernst also serves on
                          the board of Knight Ridder, Inc. Mr. Ernst served on the Executive, Audit
                          and Compensation and Development committees during 2005.
  **Randall
                          C. Ferguson, Jr.** Director
                          since 2002
 Mr.
                          Ferguson, 54, is
                          the
                          Senior Partner for Business Development for Tshibanda & Associates, LLC
                          (since March 2005), a consulting and project management
                          services firm committed
                          to assisting clients to improve operations and achieve
                          long-lasting, measurable
                          results. Previously he served as Senior Vice President
                          Business
                          Growth &  127
  Member
                                Connections with the Greater Kansas City Chamber
                                of Commerce (2003-2005) and the
                                retired Senior Location Executive (1998-2003) for
                                the IBM Kansas City Region.
                                Mr. Ferguson served on the Audit and Governance committees
                                during
                                2005.
  **Luis
                          A. Jimenez** Director
                          since 2001
 Mr.
                          Jimenez, 61, is Senior Vice President and Chief Strategy
                          Officer (since 2001) of
                          Pitney Bowes Inc., a global provider of integrated mail
                          and document management
                          solutions. He served as Vice President, Global Growth and
                          Future Strategy
                          (1999-2001). Mr. Jimenez served on the Governance and Compensation and
                          Development committees during 2005.
  **James
                          A. Mitchell** Director
                          since 2002
 Mr.
                          Mitchell, 64, is the Executive Fellow-Leadership, Center
                          for Ethical Business
                          Cultures (since 1999), a not-for-profit organization, assisting
                          business leaders
                          in creating ethical and profitable cultures. Mr. Mitchell served on the
                          Compensation and Development and Governance committees
                          during 2005.
  **William
                          C. Nelson** Director
                          since 2000
 Mr.
                          Nelson, 68, is Chairman (since 2001) of George K. Baum Asset Management, a
                          provider of investment management services to individuals,
                          foundations and
                          institutions. He also serves on the board of DST Systems.
                          Mr. Nelson served
                          on the Executive, Audit and Compensation and Development
                          committees during
                          2005.
  **Linda
                          H. Talbott** Director
                          since 1983
 Dr.
                          Talbott, 65, is President of Talbott & Associates (since 1975), consultants
                          in strategic planning, philanthropic management and development
                          to foundations,
                          corporations, and nonprofit organizations. She is also
                          Chairman of the Center
                          for Philanthropic Leadership. Dr. Talbott served as the Advising Director
                          for Corporate Social Responsibility and on the Governance
                          and Compensation and
                          Development committees during
                          2005.
  **KCP&L
                          Audit Committee**
 The
                          KCP&L Board has designated the Audit Committee of the Great
                          Plains Energy
                          Board as the KCP&L Audit Committee for purposes of Section 10A of the
                          Securities Exchange Act of 1934, as amended, and related
                          rules. The members of
                          the Audit Committee are Mark A. Ernst, David L. Bodde,
                          Randall C. Ferguson, Jr.,
                          William K. Hall, William C. Nelson and Robert H. West.
                          The Boards identified
                          Messrs. Ernst, Hall, Nelson and West as “audit committee financial experts”, as
                          that term is defined by the SEC pursuant to Section 407 of the
                          Sarbanes-Oxley Act of 2002, and determined that those individuals
                          are
                          independent.
  **Great
                          Plains Energy and KCP&L Executive Officers**
 Information
                          regarding the executive officers of Great Plains Energy
                          and KCP&L is
                          contained in this report in the Part I, Item 1 sections
                          titled “Officers of
                          Great Plains Energy” and “Officers of KCP&L”.
  **Great
                          Plains Energy and KCP&L Code of Ethics**
 The
                          Company has adopted a Code of Business Conduct and Ethics
                          (Code), which applies
                          to all directors, officers and employees of Great Plains
                          Energy, KCP&L and
                          their subsidiaries. The Code is posted on the investor
                          relations page of our
                          Internet websites at www.greatplainsenergy.com and www.kcpl.com .
                          A copy
                          of the Code is available, without charge, upon written
                          request to Corporate
                          Secretary, Great Plains Energy Incorporated, 1201 Walnut,
                          Kansas City, Missouri
                          64106. Great Plains Energy and KCP&L intend to satisfy the disclosure
                          requirements under Item 5.05 of Form 8-K regarding an amendment
                          to, or a waiver
                          from, a provision of the Code that applies to the principal
                          executive officer,
                          principal financial officer, principal accounting officer
                          or controller of those
                          companies by posting such information on the investor relations
                          page of their
                          Internet websites.  128
 **Section
                          16(a) Beneficial Ownership Reporting Compliance**
 The
                          information regarding compliance with Section 16(a) of
                          the Securities Exchange
                          Act of 1934, as amended, contained in the section titled
“Security Ownership of
                          Directors and Officers” of the Proxy Statement is incorporated by reference.
  **ITEM
                          11. EXECUTIVE COMPENSATION**
  **GREAT
                          PLAINS ENERGY**
 The
                          information regarding compensation of Great Plains Energy
                          directors and named
                          executive officers contained in the sections titled “Corporate Governance”,
“Executive Compensation”, “Compensation and Development Committee Report on
                          Executive Compensation”, and “Stock Performance Graph” of the Proxy Statement is
                          incorporated by reference.
  **KCP&L**
 **Summary
                          Compensation Table**
 The
                          following table contains compensation data for KCP&L executive officers
                          named below, for fiscal years ended December 31, 2005,
                          2004 and 2003. The
                          compensation shown for some executive officers is also
                          included in the Summary
                          Compensation Table in the Proxy Statement.
 **Annual
                                        Compensation**
                                    **Long
                                        Term Compensation****Awards**
                                    **Payouts****Name
                                        and Principal Position**
                                      **(a)**
                                    **Year**
                                      **(b)**
                                    **Salary**
                                      **($)**
                                      **(c)**
                                    **Bonus**
                                      **($)**
                                      **(d)**
                                    **Other
                                        Annual Compensation ($) (1)**
                                      **(e)**
                                    **Restricted
                                        Stock**
                                      **Award(s)**
                                      **($)(2)**
                                      **(f)**
                                    **Securities
                                        Underlying Options/**
                                      **SARs
                                        (#)**
                                      **(g)**
                                    **LTIP
                                        Payouts**
                                      **($)
                                        (3)**
                                      **(h)**
                                    **All
                                        Other Compensation**
                                      **($)(4)**
                                      **(i)**Michael
                                        J. Chesser
                                      Chairman of the Board
                                    2005
                                      2004
                                      2003
                                    610,000
                                      550,000
                                      137,500
                                    555,707
                                      495,535
                                      123,750
                                    -
                                      311,436
                                      -
                                    -
                                      -
                                      1,115,813
                                    -
                                      -
                                      -
                                    -
                                      -
                                      -
                                    27,710
                                      8,734
                                      1,403William H.
                                        Downey
                                      President and Chief
                                      Executive Officer
                                    2005
                                      2004
                                      2003
                                    440,000
                                      400,000
                                      325,000
                                    395,292
                                      270,292
                                      219,375
                                    -
                                      -
                                      -
                                    -
                                      -
                                      1,001,998
                                    -
                                      -
                                      5,249
                                    85,947
                                      -
                                      -
                                    39,210
                                      27,562
                                      20,764Terry
                                        Bassham
                                      Chief Financial Officer
                                    2005
                                      2004
                                      2003
                                    210,069
                                      -
                                      -
                                    141,998
                                      -
                                      -
                                    76,119
                                      -
                                      -
                                    275,942
                                      -
                                      -
                                    -
                                      -
                                      -
                                    -
                                      -
                                      -
                                    3,228
                                      -
                                      -Stephen
                                        T. Easley
                                      Senior Vice President-
                                      Supply
                                    2005
                                      2004
                                      2003
                                    250,000
                                      225,000
                                      210,000
                                    147,798
                                      116,684
                                      94,500
                                    -
                                      -
                                      -
                                    302,000
                                      -
                                      128,378
                                    -
                                      -
                                      2,449
                                    40,086
                                      -
                                      -
                                    14,381
                                      11,972
                                      10,737John
                                        R. Marshall
                                      Senior Vice President-
                                      Delivery
                                    2005
                                      2004
                                      2003
                                    192,222
                                      -
                                      -
                                    347,657
                                      -
                                      -
                                    157,315
                                      -
                                      -
                                    636,635
                                      -
                                      -
                                    -
                                      -
                                      -
                                    -
                                      -
                                      -
                                    8,338
                                      -
                                      -
  (1)
                                The
                                    executive officers named above received certain
                                    perquisites from the
                                    Company, which may include relocation costs,
                                    transportation allowances, a
                                    tax and financial planning allowance of up to
                                    $1,500, dues for one club
                                    and in limited situations, the expenses of spouses
                                    accompanying the
                                    executive officers. With the exception of Messrs.
                                    Marshall and Bassham in
                                    2005 and Mr. Chesser in 2004, perquisites did not reach in
                                    any of the
                                    reported years the threshold for reporting of
                                    the lesser of either $50,000
                                    or ten percent of salary and bonus set forth
                                    in the applicable rules of
                                    the Securities and Exchange
                                    Commission.
  For
                                    2005, amounts include:
  *Marshall*
 ·
                              Relocation
                                  Costs: $151,115 ·
                              Transportation
                                  Allowance: $4,200 ·
                              Club
                                  Dues: $500 ·
                              Tax/Financial
                                  Planning: $1,500  ***Bassham***
 ·
                              Relocation
                                  Costs: $69,173 ·
                              Transportation
                                  Allowance: $5,400 ·
                              Club
                                  Dues: $875 ·
                              Spouse
                                  Travel: $671 129
 For
                          2004,
                          amounts include:
  ***Chesser***
 ·
                              Relocation
                                  Costs: $299,292 ·
                              Transportation
                                  Allowance: $7,200 ·
                              Club
                                  Dues: $1,150 ·
                              Spouse
                                  Travel: $3,794  (2)
                                At
                                    Year-End 2005, amounts include:
 ****
 **Restricted
                          Stock:** The
                          dollar
                          value of the restricted stock awards shown in Column (f)
                          above is calculated by
                          multiplying the number of shares awarded by the closing
                          market price of the
                          Great Plains Energy common stock on the date of the grant.
                          The grants of
                          restricted stock vest over time. Unvested grants of restricted
                          stock are
                          forfeited in the event the executive’s employment with the Company is terminated
                          (except in the events of retirement, disability or death,
                          in which cases the
                          grants would be prorated for service during the restriction
                          period).
  ***Chesser*** ******
 12,135
                          shares vested October 1, 2005. 12,135 shares each vest
                          on October 1, 2006
                          and October 1, 2007. Dividends are reinvested with the same restrictions
                          as
                          the restricted stock. The value at December 31, 2005, of
                          the remaining
                          restricted stock was $678,589.
  ***Downey***
 8,825
                          shares vested October 1, 2005. 8,825 shares vest on October 1, 2006, and
                          8,826 shares vest on October 1, 2007. Dividends are reinvested with the
                          same restrictions as the restricted stock. The value at
                          December 31, 2005, of
                          the remaining restricted stock was $493,522.
  ***Bassham***
 9,083
                          shares vest March 28, 2008. Dividends are reinvested with
                          the same restrictions
                          as the restricted stock. The value at December 31, 2005,
                          of the restricted stock
                          was $253,961.
  ***Easley***
 10,000
                          shares vest on February 1, 2008. Dividends are reinvested with the same
                          restrictions as the restricted stock. The value at December
                          31, 2005, of the
                          restricted stock was $279,600.
  ***Marshall***
 20,275
                          shares of restricted stock were granted in 2005, vesting
                          May 25, 2008.
                          Dividends are reinvested with the same restrictions as
                          the restricted stock. The
                          value at December 31, 2005, of the restricted stock was
                          $566,889.
  (3)
                                
                                The
                                    LTIP Payouts for 2005 represent the value of
                                    common stock and cash
                                    dividends paid under 2003 Performance Shares
                                    for the period ended 2005.
                                    The value of the payouts are calculated as of
                                    February 7, 2006, the
                                    date the payouts were approved by the
                                    Board.
  (4)
                                For 2005, amounts include:
  ***Chesser***
 ·
                              Contribution
                                  under the Great Plains Energy Employee Savings
                                  Plus Plan:
                                  $6,300 ·
                              Contribution
                                  under the Great Plains Energy Employee Savings
                                  Plus Plan accruing to the
                                  Great Plains Energy Non-Qualified Deferred Compensation
                                  Plan: $12,000 ·
                              Flex
                                  dollars under the Great Plains Energy Flexible
                                  Benefits Plan: $6,835 ·
                              Deferred
                                  flex dollars: $1,582 ·
                              Above-market
                                  interest paid on compensation deferred pursuant
                                  to the Great Plains Energy
                                  Non-Qualified Deferred Compensation Plan:
                                  $993  ***Downey***
 ·
                              Contribution
                                  under the Great Plains Energy Employee Savings
                                  Plus Plan:
                                  $6,300 ·
                              Contribution
                                  under the Great Plains Energy Employee Savings
                                  Plus Plan accruing to the
                                  Great Plains Energy Non-Qualified Deferred Compensation
                                  Plan:
                                  $6,900 ·
                              Flex
                                  dollars under the Great Plains Energy Flexible
                                  Benefits Plan: $6,253 ·
                              Deferred
                                  flex dollars: $214 ·
                              Above-market
                                  interest paid on compensation deferred pursuant
                                  to the Great Plains Energy
                                  Non-Qualified Deferred Compensation Plan: $19,543 130
  ***Bassham***
 ·
                              Flex
                                  Dollars Under the Great Plains Energy Flexible
                                  Benefits Plan:
                                  $3,228  ***Easley***
 ·
                              Contribution
                                  under the Great Plains Energy Employee Savings
                                  Plus Plan:
                                  $6,300 ·
                              Contribution
                                  under the Great Plains Energy Employee Savings
                                  Plus Plan accruing to the
                                  Great Plains Energy Non-Qualified Deferred Compensation
                                  Plan: $1,200 ·
                              Flex
                                  dollars under the Great Plains Energy Flexible
                                  Benefits Plan:
                                  $4,192 ·
                              Above-market
                                  interest paid on compensation deferred pursuant
                                  to the Great Plains Energy
                                  Non-Qualified Deferred Compensation Plan:
                                  $2,689  ***Marshall***
 ·
                              Contribution
                                  under the Great Plains Energy Employee Savings
                                  Plus Plan accruing to the
                                  Great Plains Energy Non-Qualified Deferred Compensation
                                  Plan:
                                  $5,200 ·
                              Flex
                                  dollars under the Great Plains Energy Flexible
                                  Benefits Plan:
                                  $2,714 ·
                              Above-market
                                  interest paid on compensation deferred pursuant
                                  to the Great Plains Energy
                                  Non-Qualified Deferred Compensation Plan:
                                  $424  **Long-Term
                          Incentive Plans - Awards in Last Fiscal Year**
 **Name**
                                      **(a)**
                                    **Number
                                        of**
                                      **Shares,
                                        Units or Other Rights (#)**
                                      **(b)(1)**
                                    **Performance
                                        or Other Period Until Maturation or Payout
                                        (c)**
                                    **Estimated
                                        Future Payouts Under**
                                      **Non-Stock
                                        Price-Based Plans****Threshold**
                                      **($
                                        or #)**
                                      **(d)**
                                    **Target**
                                      **($
                                        or #)**
                                      **(e)**
                                    **Maximum**
                                      **($
                                        or #)**
                                      **(f)**Michael
                                        J. Chesser
                                    30,233
                                        shares
                                    2
                                        years ending 2006
                                    0
                                    30,233
                                        shares
                                    60,466
                                        shares30,233
                                        shares
                                    3
                                        years ending 2007
                                    0
                                    30,233
                                        shares
                                    60,466
                                        sharesWilliam
                                        H. Downey
                                    16,719
                                        shares
                                    2
                                        years ending 2006
                                    0
                                    16,719
                                        shares
                                    33,438
                                        shares16,719
                                        shares
                                    3
                                        years ending 2007
                                    0
                                    16,719
                                        shares
                                    33,438
                                        sharesTerry
                                        Bassham
                                    6,358
                                        shares
                                    3
                                        years ending 2007
                                    0
                                    6,358
                                        shares
                                    12,716
                                        sharesJohn
                                        R. Marshall
                                    7,096
                                        shares
                                    3
                                        years ending 2007
                                    0
                                    7,096
                                        shares
                                    14,192
                                        sharesStephen
                                        T. Easley
                                    5,782
                                        shares
                                    2
                                        years ending 2006
                                    0
                                    5,782
                                        shares
                                    11,564
                                        shares5,782
                                        shares
                                    3
                                        years ending 2007
                                    0
                                    5,782
                                        shares
                                    11,564
                                        shares
 
 (1)
                              The
                                  awards of performance shares to Messrs. Chesser
                                  and Bassham are based on
                                  the following weightings of Great Plains Energy
                                  objectives during the
                                  applicable performance period: 50% total shareholder
                                  return compared to
                                  other Edison Electric Institute companies; 25%
                                  earnings per share; and 25%
                                  return on invested capital. The awards of performance
                                  shares to Messrs.
                                  Downey, Marshall and Easley are based 60%, 20%
                                  and 20%, respectively, on
                                  the Great Plains Energy objectives, with the remainder
                                  based on the
                                  following weightings of KCP&L objectives during the applicable
                                  performance period: 25% earnings; 25% return on
                                  invested capital; 25% on
                                  regulatory/build plan on schedule and budget; and
                                  25% distributed utility
                                  goal. Payment of performance shares will range
                                  from 0% to 200% of the
                                  target amount of performance shares, depending
                                  on performance. Payment
                                  will be made in an amount equal to the number of
                                  performance shares
                                  earned, multiplied by the fair market value of
                                  common stock at the end of
                                  the applicable performance period and divided by
                                  the fair market value of
                                  common stock at the time of grant.  **Aggregated
                          Option/SAR Exercises in the Last Fiscal Year and Fiscal
                          Year-End Option/SAR
                          Values**
 **Name**
                                      **(a)**
                                    **Shares**
                                      **Acquired**
                                      **on**
                                      **Exercise**
                                      **(#)**
                                      **(b)**
                                    **Value**
                                      **Realized**
                                      **($)**
                                      **(c)**
                                    **Number
                                        of Securities Underlying Unexercised Options/SARs
                                        at Fiscal Year
                                        End**
                                      **(#)**
                                    **Value
                                        of Unexercised In-the-Money Options/SARs
                                        at Fiscal Year
                                        End**
                                      **($)****Exercisable**
                                      **(1)(d)**
                                    **Unexercisable**
                                      **(d)**
                                    **Exercisable****(1)**
                                      **(e)**
                                    **Unexercisable**
                                      **(e)**Michael
                                        J. Chesser
                                    -
                                    -
                                    -
                                    -
                                    -
                                    -William
                                        H. Downey
                                    -
                                    -
                                    40,000
                                    5,249
                                    109,400
                                    1,207Terry
                                        Bassham
                                    -
                                    -
                                    -
                                    -
                                    -
                                    -Stephen
                                        T. Easley
                                    -
                                    -
                                    19,000
                                    2,449
                                    54,240
                                    563John
                                        R. Marshall
                                    -
                                    -
                                    -
                                    -
                                    -
                                    -
 131
  Pension
                            Plans
 Great
                          Plains Energy has a non-contributory pension plan (Great
                          Plains Energy Pension
                          Plan) providing for benefits upon retirement, normally
                          at age 65. In addition, a
                          supplemental retirement benefit is provided for selected
                          executive officers
                          based on the number of years such persons were officers.
                          The following table
                          shows examples of single life option pension benefits (including
                          unfunded
                          supplemental retirement benefits) payable upon retirement
                          at age 65 to the named
                          executive officers, assuming that the person was covered
                          by the supplemental
                          retirement benefit for all years of service.
 **Average
                                        Annual Base Salary**
                                    
                                    **Annual
                                        Pension for Years of Service Indicated****for
                                        Highest 36 Months**
                                    
                                    **15**
                                    
                                    **20**
                                    
                                    **25**
                                    
                                    **30
                                        or more**150,000
                                    
                                    45,000
                                    
                                    60,000
                                    
                                    75,000
                                    
                                    90,000200,000
                                    
                                    60,000
                                    
                                    80,000
                                    
                                    100,000
                                    
                                    120,000250,000
                                    
                                    75,000
                                    
                                    100,000
                                    
                                    125,000
                                    
                                    150,000300,000
                                    
                                    90,000
                                    
                                    120,000
                                    
                                    150,000
                                    
                                    180,000350,000
                                    
                                    105,000
                                    
                                    140,000
                                    
                                    175,000
                                    
                                    210,000400,000
                                    
                                    120,000
                                    
                                    160,000
                                    
                                    200,000
                                    
                                    240,000450,000
                                    
                                    135,000
                                    
                                    180,000
                                    
                                    225,000
                                    
                                    270,000500,000
                                    
                                    150,000
                                    
                                    200,000
                                    
                                    250,000
                                    
                                    300,000550,000
                                    
                                    165,000
                                    
                                    220,000
                                    
                                    275,000
                                    
                                    330,000600,000
                                    
                                    180,000
                                    
                                    240,000
                                    
                                    300,000
                                    
                                    360,000650,000
                                    
                                    195,000
                                    
                                    260,000
                                    
                                    325,000
                                    
                                    390,000700,000
                                    
                                    210,000
                                    
                                    280,000
                                    
                                    350,000
                                    
                                    420,000750,000
                                    
                                    225,000
                                    
                                    300,000
                                    
                                    375,000
                                    
                                    450,000
  Each
                          eligible employee with 30 or more years of credited service,
                          or whose age and
                          years of service add up to 85, is entitled under the Great
                          Plains Energy Pension
                          Plan to a total monthly annuity equal to 50% of their average
                          base monthly
                          salary for the period of 36 consecutive months in which
                          their earnings were
                          highest. The monthly annuity will be proportionately reduced
                          if their years of
                          credited service are less than 30 or if their age and years
                          of service do not
                          add up to 85. The compensation covered by the Great Plains
                          Energy Pension
                          Plan -- base monthly salary -- excludes any bonuses and other
                          compensation. The Great Plains Energy Pension Plan provides
                          that pension amounts
                          are not reduced by Social Security benefits. The estimated
                          years of credited
                          service under the Great Plains Energy Pension Plan for
                          the named executive
                          officers in the Summary Compensation table are as follows.
 **Officer**
                                    
                                    **Years
                                        of**
                                      **Credited
                                        Service**Michael
                                        J. Chesser(a)
                                    
                                    2.5William
                                        H. Downey
                                    
                                    5.5Terry
                                        Bassham
                                    
                                    0.5John
                                        R. Marshall(a)
                                    
                                    0Stephen
                                        T. Easley
                                    
                                    9
 (a) Pursuant
                          to the terms of employment agreements, Messrs.
 Chesser and Marshall will be credited with two years of
 service for every one year of service earned. The additional
 year of service will be paid as a supplemental
                          retirement
 benefit.
 
 Eligibility
                          for supplemental retirement benefits is limited to executive
                          officers selected
                          by the Compensation and Development Committee of the Board;
                          all the named
                          executive officers are participants. The total retirement
                          benefit payable at the
                          normal retirement date is equal to 1 2/3% of highest average
                          annual base salary
                          over the thirty-six consecutive month period when base
                          salary was highest
                          (highest average annual base salary), as shown above, for
                          each year of credited
                          service, plus
  132
  an
                          additional 1/3% of highest average annual base salary for
                          each year of credited
                          service when the executive was eligible for supplemental
                          retirement benefits, up
                          to 30 years (or a maximum of 60% of highest average annual
                          base salary in the
                          situation where the executive was eligible for supplemental
                          retirement benefits
                          for at least 30 years). A liability accrues each year to
                          cover the estimated
                          cost of future supplemental benefits.
  The
                          Internal Revenue Code imposes certain limitations on pensions
                          that may be paid
                          under tax qualified pension plans. In addition to the supplemental
                          retirement
                          benefits, the amount by which pension benefits exceed the
                          limitations will be
                          paid outside the qualified plan and accounted for by Great
                          Plains Energy as an
                          operating expense.
  **Severance
                          Agreements**
 Great
                          Plains Energy has severance agreements (Severance Agreements)
                          with certain of
                          its executive officers, including the named executive officers,
                          to ensure their
                          continued service and dedication and their objectivity
                          in considering on behalf
                          of Great Plains Energy any transaction that would change
                          the control of the
                          Company. Under the Severance Agreements, an executive officer
                          would be entitled
                          to receive a lump-sum cash payment and certain insurance
                          benefits during the
                          three-year period after a Change in Control (or, if later,
                          the three-year period
                          following the consummation of a transaction approved by
                          Great Plains Energy’s
                          shareholders constituting a Change in Control) if the officer's
                          employment was
                          terminated by:
  ·
                              Great
                                  Plains Energy other than for cause or upon death
                                  or
                                  disability;  ·
                              the
                                  executive officer for Good Reason (as defined in
                                  the Severance
                                  Agreements); and  ·
                              the
                                  executive officer for any reason during a 30-day
                                  period commencing one
                                  year after the Change in Control or, if later,
                                  commencing one year
                                  following consummation of a transaction approved
                                  by Great Plains Energy’s
                                  shareholders constituting a change in control (a
                                  Qualifying
                                  Termination).  A
                          Change
                          in Control is defined as:
 ·
                              an
                                  acquisition by a person or group of 20% or more
                                  of the Great Plains Energy
                                  common stock (other than an acquisition from or
                                  by Great Plains Energy or
                                  by a Great Plains Energy benefit plan);  ·
                              a
                                  change in a majority of the Board; and  ·
                              approval
                                  by the shareholders of a reorganization, merger
                                  or consolidation (unless
                                  shareholders receive 60% or more of the stock of
                                  the surviving Company) or
                                  a liquidation, dissolution or sale of substantially
                                  all of Great Plains
                                  Energy’s assets.  Upon
                          a
                          Qualifying Termination, a lump-sum cash payment will be
                          made to the executive
                          officer of:
 ·
                              the
                                  officer's base salary through the date of
                                  termination;  ·
                              a
                                  pro-rated bonus based upon the average of the bonuses
                                  paid to the officer
                                  for the last five fiscal years;  ·
                              any
                                  accrued vacation pay;  ·
                              two
                                  or three times the officer's highest base salary
                                  during the prior 12
                                  months;  ·
                              two
                                  or three times the average of the bonuses paid
                                  to the officer for the last
                                  five fiscal years;  ·
                              the
                                  actuarial equivalent of the excess of the officer's
                                  accrued pension
                                  benefits including supplemental retirement benefits
                                  computed without
                                  reduction for early retirement and including two
                                  or three additional years
                                  of benefit accrual service, over the officer's
                                  vested accrued pension
                                  benefits; and  ·
                              the
                                  value of any unvested Great Plains Energy contributions
                                  for the benefit of
                                  the officer under the Great Plains Energy Employee
                                  Savings Plus
                                  Plan. 133
 In
                          addition, Great Plains Energy must offer health, disability
                          and life insurance
                          plan coverage to the officer and his dependents on the
                          same terms and conditions
                          that existed immediately prior to the Qualifying Termination
                          for two or three
                          years, or, if earlier, until the executive officer is covered
                          by equivalent plan
                          benefits. Great Plains Energy must make certain "gross-up"
                          payments regarding
                          tax obligations relating to payments under the Severance
                          Agreements as well as
                          provide reimbursement of certain expenses relating to possible
                          disputes that
                          might arise.
  In
                          the
                          following circumstances, termination of the officer’s employment prior to a
                          Change in Control (or, if later, prior to the consummation
                          of a transaction
                          approved by shareholders that constitutes a Change in Control)
                          will be treated
                          as a Qualifying Termination:
 ·
                              the
                                  officer’s employment was terminated without Cause (as defined
                                  in the
                                  Severance Agreement) and the termination was at
                                  the request or direction
                                  of the other party to the agreement;  ·
                              the
                                  officer terminates his employment for Good Reason;
                                  or  ·
                              the
                                  officer’s employment is terminated without Cause and such
                                  termination is
                                  otherwise in connection with or in anticipation
                                  of a Change in Control
                                  that actually occurs.  Payments
                          and other benefits under the Severance Agreements are in
                          addition to balances
                          due under the Great Plains Energy Long-Term Incentive Plan
                          and Annual Incentive
                          Plan. Upon a Change in Control (as defined in the Great
                          Plains Energy Long-Term
                          Incentive Plan), all stock options granted in tandem with
                          limited stock
                          appreciation rights will be automatically exercised.
  **Other
                          Employment Arrangements**
 Pursuant
                          to the terms of an employment arrangement, Mr. Chesser
                          is entitled to receive
                          three times annual salary and bonus if he is terminated
                          without cause prior to
                          his reaching age 63. After age 63, any benefit for termination
                          without cause
                          will be one times annual salary and bonus until age 65.
                          Messrs. Chesser and
                          Marshall will receive two credited years of service for
                          every one year of
                          service earned. The additional year of service will be
                          paid as a supplemental
                          retirement benefit.
  **Director
                          Compensation**
 The
                          directors of KCP&L receive the following compensation for serving on the
                          Boards of Great Plains Energy and KCP&L:
  An
                          annual
                          retainer of $50,000 was paid in 2005 ($25,000 of which
                          was used to acquire
                          shares of common stock through the Dividend Reinvestment
                          and Direct Stock
                          Purchase Plan on behalf of each non-employee member of
                          the Board). An additional
                          retainer of $10,000 was paid annually to the lead director.
                          Also, a retainer of
                          $6,000, $5,000 and $5,000 was paid to the non-employee
                          director serving as chair
                          of the Audit Committee, the Compensation and Development
                          Committee and the
                          Governance Committee, respectively. Attendance fees of
                          $1,000 for each Board
                          meeting and $1,000 for each committee and other meeting
                          attended were also paid
                          in 2005. Directors may defer the receipt of all or part
                          of the cash retainers
                          and meeting fees.
  Great
                          Plains Energy provides life and medical insurance coverage
                          for each non-employee
                          member of the Board. The total premiums paid by Great Plains
                          Energy for this
                          coverage for all non-employee directors in 2005 was $32,789.
                          Great Plains Energy
                          pays or reimburses directors for travel, lodging and related
                          expenses they incur
                          in attending Board and committee meetings, including the
                          expenses incurred by
                          directors’ spouses in accompanying the directors to one Board meeting
                          in 2005.
                          It also matches up to $2,000 per year of charitable donations
                          made by a director
                          to 501(c)(3) organizations that meet our strategic giving
                          priorities and are
                          located in the service territory.
 134
 **Compensation
                          and Development Committee Report on KCP&L Executive
                          Compensation**
 
 **The
                          Committee’s Responsibilities**
 The
                          Compensation and Development Committee of the Board of
                          Great Plains Energy
                          (Committee) is composed of six non-employee directors,
                          each of whom is
                          independent under applicable standards of the New York
                          Stock Exchange. The
                          Committee is responsible for setting the executive compensation
                          structure and
                          administering the policies and plans that govern compensation
                          for the executive
                          officers. The purpose of this report is to summarize the
                          Committee’s
                          compensation philosophy, identify key elements of the executive
                          compensation
                          programs and describe the process and practices applied
                          by the Committee in
                          making compensation decisions for fiscal year 2005.
  **Compensation
                          Philosophy**
 The
                          Committee has adopted a compensation philosophy intended
                          to:
 ·
                              Attract
                                  and retain highly qualified and experienced
                                  executives;  ·
                              Emphasize
                                  a significant alignment between pay and Great Plains
                                  Energy’s and/or the
                                  executive’s performance;  ·
                              Motivate
                                  executives to achieve strong short-term and long-term
                                  financial and
                                  operational results;  ·
                              Provide
                                  variable compensation opportunities that recognize
                                  and reward outstanding
                                  performance;  ·
                              Align
                                  management interests with those of the shareholders;
                                  and  ·
                              Provide
                                  a significant portion of total pay in the form
                                  of stock-based incentives,
                                  correspondingly requiring target levels of stock
                                  ownership.  **Compensation
                          Methodology**
 Each
                          year
                          the Committee reviews data from market surveys, proxy statements,
                          and other
                          information provided by independent compensation consultants
                          relating to an
                          assessment of Great Plains Energy’s competitive position with respect to
                          base salaries, annual incentives, long-term incentives,
                          and other specific
                          aspects of executive compensation. The Committee reviews
                          the alignment between
                          executive pay and performance on a regular basis. In the
                          most recent assessment
                          of its compensation practices by the compensation consultant
                          retained by the
                          Committee, it was reported that analyses demonstrated a
                          strong relationship
                          between pay and performance. The Committee also considers
                          in its assessment
                          individual performance, level of responsibility, internal
                          comparisons, and
                          skills and experience. Certain of Great Plains Energy’s executive officers serve
                          as officers and/or directors of various subsidiaries. The
                          total compensation of
                          officers is designed to cover the full range of services
                          they provide to Great
                          Plains Energy and its subsidiaries.
  **Components
                          of Compensation**
  ***Base
                          Salary***
 The
                          Committee reviews executive officer base salaries annually
                          and concurrent with
                          an evaluation of the executive’s performance for the prior year. Base salaries
                          are based upon job responsibilities, level of experience,
                          individual
                          performance, comparisons of the salaries of executives
                          in similar positions
                          obtained from market surveys, internal comparisons and
                          competitive data provided
                          by compensation consultants retained by the Committee.
                          The goal for the base
                          salary component is to compensate executives at a level,
                          which approximates the
                          median salaries of individuals in comparable positions
                          in companies of similar
                          size within the industry and general industry, as appropriate.
                          Base salary
                          increases for Messrs. Chesser, Downey and Easley were effective
                          January 1, 2005.
                          Messrs. Bassham and Marshall were not employed by Great
                          Plains Energy until
                          March 28, 2005 and May 25, 2005, respectively.
 135
 ***Annual
                          Incentives***
 Annual
                          cash incentives are provided to executive officers based
                          upon the achievement of
                          pre-established corporate and business unit objectives,
                          and also provide the
                          ability to recognize individual performance. In 2005, the
                          Committee administered
                          the Great Plains Energy Annual Incentive Plan (the Plan)
                          that permitted the
                          award of annual cash incentives to executive officers,
                          including the Named
                          Executive Officers set forth in the Summary Compensation
                          Table. Target
                          incentives under the Plan are established as a percentage
                          of base pay, using
                          survey data for individuals in comparable positions and
                          markets and internal
                          comparisons. The Committee has established total target
                          annual bonus levels
                          intended to approximate the 50 th percentile bonus levels in comparable positions and markets
                          when target
                          performance is achieved. Target annual incentives under
                          the Plan for 2005 ranged
                          from 30% to 60% of base pay. The total amount available
                          for payment was
                          determined by corporate earnings per share and subject
                          to established threshold,
                          target and maximum levels. The Plan will pay out at 100%
                          at target. Fifty
                          percent of the incentive is payable at the threshold level
                          of performance and
                          150% of the incentive is payable at the maximum level of
                          performance. If
                          performance falls below target, but is above threshold,
                          the amount of the award
                          payable will be below the target award level. Similarly,
                          performance above
                          target will result in an award higher than target level.
                          Individual awards will
                          not be paid if the corporate EPS performance falls below
                          the threshold level.
                          The entire award is distributed proportionately among participants
                          based on
                          other corporate and business unit measures, such as return
                          on invested capital,
                          customer satisfaction, customer retention rate, reliability,
                          and others.
                          Individual performance is also taken into account. For
                          2005, discretion was used
                          to exclude from Great Plains Energy reported earnings and
                          Strategic Energy
                          pre-tax income goals and results the applicable effects
                          of mark-to-market gains
                          and losses on energy contracts, SECA, certain compensation
                          expenses and
                          discontinued operations. As a result, corporate earnings
                          per share were at the
                          maximum level and individual awards were earned in the
                          amounts set forth in the
                          Summary Compensation Table.
  The
                          Annual Incentive Plan of Great Plains Energy Incorporated
                          was amended in
                          February of 2006. The amended Plan will continue to be
                          based on achievement of
                          pre-established company and business unit financial and
                          operational metrics. For
                          2006, the measures for annual incentives are based 50%
                          on core earnings, and 30%
                          on financial ratios, production availability, achievement
                          of comprehensive
                          energy plan milestones, customer satisfaction, profitability,
                          employee
                          engagement and/or other specified business unit objectives.
                          The Committee also
                          takes into account individual performance to account for
                          20% of the target
                          award. Individual Incentive amounts will range from 0%
                          to 200% of target based
                          on performance, and the Committee intends to target the
                          50 th percentile or above as the basis for target annual bonus
                          levels. Strategic
                          Energy also revised the Strategic Energy L.L.C. Annual
                          Incentive Plan in
                          February of 2006 and has the same structure and terms as
                          the Great Plains Energy
                          Annual Incentive Plan.
  ***Long-Term
                          Incentive Compensation***
 The
                          Committee has structured a long-term compensation element
                          to more closely align
                          the interests of management with the creation of long-term
                          shareholder value.
                          The Great Plains Energy Long-Term Incentive Plan was approved
                          by shareholders in
                          2002, and provides for grants by the Committee of stock
                          options, restricted
                          stock, performance shares, and other stock-based awards.
                          Each executive officer
                          is assigned a long-term incentive target based on both
                          internal comparisons and
                          upon survey data for individuals in comparable positions
                          in the markets in which
                          Great Plains Energy competes for executive talent. Compliance
                          with stock
                          ownership guidelines is also taken into consideration in
                          determining grants
                          under the Long-Term Incentive Program. The Committee has
                          established total
                          target long-term incentive targets at the 50 th percentile in comparable positions and markets. Targets
                          range from 40% to 150%
                          of base salary. Based on performance over the period, awards
                          can pay out from 0%
                          to 200%. However, since no long-term grants were made under
                          the program in 2004,
                          in 2005 executives received a two-year performance share
                          grant for 2005-2006
                          performance, and a three-year performance share grant for
                          2005-2007 performance.
                          Payouts, if any, will be made after the end of the  136
 period
                          based on performance during the period. Goals for both
                          long-term grants were
                          based on pre-approved corporate and business unit measures.
  For
                          2006,
                          the performance share component of long-term awards will
                          be based on the
                          Company’s Total Shareholder Return over a three-year period, as
                          compared to the
                          Total Shareholder Return of the Edison Electric Institute
                          (EEI) Index of
                          electric utilities. The Committee believes this measure
                          ensures strong alignment
                          of executive financial interests with the long-term interests
                          of its
                          shareholders.
  **KCP&L
                          Chief Executive Officer Compensation**
 The
                          Committee considers the assessment of the Chief Executive
                          Officer’s (CEO)
                          performance and determination of the CEO’s compensation as among its principal
                          responsibilities. Its objective with regards to setting
                          an appropriate level of
                          compensation is to motivate and retain a CEO who is committed
                          to delivering
                          sustained superior performance for the Company’s shareholders.
  In
                          2005,
                          Mr. Downey received a base salary of $440,000, which is below
                          the median
                          for CEOs of comparably-sized companies in similar markets.
                          In determining Mr.
                          Downey’s base salary, the Committee considered the financial performance
                          of the
                          Company; the cost and quality of services provided; leadership
                          in enhancing the
                          long-term value of the Company; performance against other
                          pre-established
                          objectives; survey data; and consideration of length of
                          service.
                          Mr. Downey’s annual incentive compensation award was targeted at 45%
                          of
                          base pay, also considered to be somewhat below market levels.
                          In 2005, Mr.
                          Downey’s incentive award was based 80% on Great Plains Energy
                          performance which
                          included a balanced scorecard of financial, customer-related
                          and
                          internal/operational metrics, and 20% on individual performance.
                          Funding for
                          annual awards was based on corporate earnings per share.
                          The Great Plains Energy
                          scorecard resulted in overall performance between target
                          and maximum levels for
                          purposes of the annual incentive plan, and earnings performance
                          allowed funding
                          at the maximum level. Mr. Downey received two long-term
                          performance share grants
                          in 2005 since no awards were made in 2004. Awards were
                          determined in the same
                          manner as for other executive officers. Mr. Downey’s long-term incentive
                          target was 115% of base pay, which is consistent with the
                          50 th percentile for comparable CEO positions and markets.
  It
                          is the
                          Committee’s intent that, when taken together, the components of Mr.
                          Downey’s
                          pay, including base salary, annual incentives and long-term
                          incentives, would
                          result in total compensation that would approximate the
                          50 th percentile of the market when incentive plan performance
                          measures are met and in
                          compensation levels at the 75 th percentile or higher when incentive plan performance is
                          at superior
                          levels.
  **Code
                          Section 162(m)**
 Section
                          162(m) of the Internal Revenue Code precludes the Company
                          from taking a
                          deduction for compensation in excess of $1 million for
                          any individual who, on
                          the last day of that year, is the CEO or among the other
                          four highest
                          compensated officers unless that compensation qualifies
                          as performance-based
                          compensation under Section 162(m). With respect to incentive
                          compensation, the
                          Great Plains Energy Long-Term Incentive Plan was approved
                          by shareholders in
                          2002 and offers vehicles, which are performance-based.
                          It is the Committee’s
                          intent to take reasonable steps to include the provisions
                          necessary to qualify
                          for exemptions from the limitations on such deductibility
                          under Section 162(m)
                          at the time the Plan is next taken for shareholder vote
                          in May 2007. With
                          respect to awards under the Great Plains Energy Annual
                          Incentive Plan, the
                          Committee believes that the interests of the Company’s shareholders are best
                          served by not restricting the Committee’s and Company’s discretion and
                          flexibility in developing compensation programs.
 137
 COMPENSATION
                          AND DEVELOPMENT COMMITTEE
 William
                          C. Nelson (Chairman)
 Mark
                          A.
                          Ernst
 Luis
                          A.
                          Jimenez
 James
                          A.
                          Mitchell
 Linda
                          H.
                          Talbott
 Robert
                          H.
                          West
  **ITEM 12.
                          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                          MANAGEMENT**
  **GREAT
                          PLAINS ENERGY**
 The
                          information regarding security ownership of the directors
                          and executive officers
                          of Great Plains Energy contained in the section titled
“Security Ownership of
                          Certain Beneficial Owners, Directors and Officers” of the Proxy Statement is
                          incorporated by reference.
  **KCP&L**
 Great
                          Plains Energy is the sole shareholder of KCP&L. The following table shows
                          beneficial ownership of Great Plains Energy’s common stock by the named
                          executive officers, directors and all directors and executive
                          officers of
                          KCP&L as of February 7, 2006, (with the exception of shares
                          held in the
                          Employee Savings Plus Plan, which is reported as of January
                          31, 2006). The total
                          of all shares owned by directors and executive officers
                          represents less than 1%
                          of Great Plains Energy’s common stock.
 **Name
                                        of Beneficial Owner**
                                    **Shares
                                        of Common**
                                      **Stock**
                                      **Beneficially
                                        Owned**(1)**Named
                                        Executive Officers**Michael
                                        J. Chesser
                                    43,973William
                                        H. Downey
                                    89,255Terry
                                        Bassham
                                    11,721Stephen
                                        T. Easley
                                    39,705John
                                        R. Marshall
                                    25,761**Non-management
                                        Directors**David
                                        L. Bodde
                                    10,465
                                    (2)Mark
                                        A. Ernst
                                    8,663Randall
                                        C. Ferguson, Jr.
                                    4,203Luis
                                        A. Jimenez
                                    4,650James
                                        A. Mitchell
                                    5,209William
                                        C. Nelson
                                    5,069
                                    (3)Linda
                                        H. Talbott
                                    10,781**All
                                        KCP&L Executive Officers and Directors As A Group**(20
                                        persons)
                                    334,181
 (1)
                                  Includes
                                      restricted stock and exercisable non-qualified
                                      stock options.
 ·
                              **Restricted
                                  Stock:**Chesser - 36,006 shares; Downey - 24,487 shares; Bassham
                          -
                          11,721 shares; Marshall - 23,567 shares; Easley - 12,593
                          shares; other executive
                          officers - 15,886.
 ·
                              **Exercisable
                                  Non-Qualified Stock Options:**Downey - 40,000 shares; Easley -
                                19,000
                                  shares; other executive officers -
                                  36,000. (2)
                              The
                                  nominee disclaims beneficial ownership of 1,000
                                  shares reported and held
                                  by nominee's mother. (3)
                              The
                                  nominee disclaims beneficial ownership of 62 shares
                                  reported and held by
                                  nominee’s wife.  138
  **Equity
                          Compensation Plan**
 The
                          information regarding Great Plains Energy’s equity compensation plan is in Item
                          5, Market for the Registrants’ Common Equity and Related Shareholder Matters, of
                          this report and is incorporated by reference.
  **ITEM 13.
                          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**
  **GREAT
                          PLAINS ENERGY**
 The
                          information contained in the section titled “Security Ownership of Certain
                          Beneficial Owners, Directors and Officers - Certain Relationships
                          and Related
                          Transactions” of the Proxy Statement is incorporated by reference.
  **KCP&L**
 See
                          Note
                          12 to the consolidated financial statements.
  **ITEM
                          14. PRINCIPAL ACCOUNTING FEES AND SERVICES**
  **GREAT
                          PLAINS ENERGY**
 The
                          information regarding the independent auditors of Great
                          Plains Energy and its
                          subsidiaries contained in the section titled “Audit Committee Report” of the
                          Proxy Statement is incorporated by reference.
  **KCP&L**
 The
                          Audit
                          Committee of the Great Plains Energy Board functions as
                          the Audit Committee of
                          KCP&L. The following table sets forth the aggregate fees billed
                          by Deloitte
& Touche LLP for audit services rendered in connection with
                          the consolidated
                          financial statements and reports for 2005 and 2004 and
                          for other services
                          rendered during 2005 and 2004 on behalf of the Company
                          and its subsidiaries, as
                          well as all out-of-pocket costs incurred in connection
                          with these
                          services :
 **Fee
                                        Category**
                                    **2005**
                                    **2004**Audit
                                        Fees
                                    $1,075,986
                                    $   
                                        920,904Audit-Related
                                        Fees
                                    62,251
                                    138,080Tax
                                        Fees
                                    24,307
                                    373,730All
                                        Other Fees
                                    21,100
                                    -Total
                                        Fees
                                    $1,183,644
                                    $
                                        1,432,714
 
 **Audit
                          Fees:** Consists
                          of fees billed for professional services rendered for the
                          audits of the annual
                          consolidated financial statements of the Company and its
                          subsidiaries and
                          reviews of the interim condensed consolidated financial
                          statements included in
                          quarterly reports. Audit fees also include: services provided
                          by
                          Deloitte & Touche LLP in connection with statutory and regulatory
                          filings or engagements; audit reports on audits of the
                          effectiveness of internal
                          control over financial reporting and on management’s assessment of the
                          effectiveness of internal control over financial reporting
                          and other attest
                          services, except those not required by statute or regulation;
                          services related
                          to filings with the Securities and Exchange Commission,
                          including comfort
                          letter, consents and assistance with and review of documents
                          filed with the
                          Securities and Exchange Commission; and accounting research
                          in support of the
                          audit.
  **Audit-Related
                          Fees:** Consists
                          of fees billed for assurance and related services that
                          are reasonably related to
                          the performance of the audit or review of consolidated
                          financial statements of
                          the Company and its subsidiaries and are not reported under
“Audit Fees”. These
                          services include consultation concerning financial accounting
                          and reporting
                          standards and services in connection with the Company’s assessment of the
                          effectiveness of its internal control over financial reporting
                          (the fees in 2004
                          aggregated $131,980).
  139
  **Tax
                          Fees:** Consists
                          of fees billed for tax compliance and related support of
                          tax returns and other
                          tax services, including assistance with tax audits, and
                          tax research and
                          planning. Tax fees for 2004 included $372,040 of fees that
                          became payable upon
                          resolution of engagements entered into in prior years.
  **All
                          Other Fees:** Consists
                          of fees for all other services other than those reported
                          above. Those services
                          included the development and facilitation of a group training
                          course in 2005.
  **Audit
                          Committee Pre-Approval of Audit and Permissible Non-Audit
                          Services of
                          Independent Auditors**
 The
                          Audit
                          Committee pre-approves all audit and permissible non-audit
                          services provided by
                          the independent auditor to the Company and its subsidiaries.
                          These services may
                          include audit services, audit-related services, tax services
                          and other services.
                          The Audit Committee has adopted for the Company and its
                          subsidiaries policies
                          and procedures for the pre-approval of services provided
                          by the independent
                          auditor. Under these policies and procedures, the Audit
                          Committee may
                          pre-approve certain types of services, up to aggregate
                          fee levels established by
                          the Audit Committee. The Audit Committee as well may specifically
                          approve audit
                          and permissible non-audit services on a case-by-case basis.
                          Any proposed service
                          within a pre-approved type of service that would cause
                          the applicable fee level
                          to be exceeded cannot be provided unless the Audit Committee
                          either amends the
                          applicable fee level or specifically approves the proposed
                          service. Pre-approval
                          is generally provided for up to one year, unless the Audit
                          Committee
                          specifically provides for a different period. The Audit
                          Committee receives
                          quarterly reports regarding the pre-approved services performed
                          by the
                          independent auditor. The Chairman of the Audit Committee
                          may between meetings
                          pre-approve audit and non-audit services provided by the
                          independent auditor,
                          and report such pre-approval at the next Audit Committee
                          meeting.
  **PART
                          IV**
  **ITEM
                          15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES**
  **Financial
                                    Statements****Page**
                                  **No.****Great
                                    Plains Energy**a.
                                Consolidated
                                    Statements of Income for the years ended December 31, 2005, 2004 and
                                    2003
                                57b.
                                Consolidated
                                    Balance Sheets - December 31, 2005 and 2004
                                58c.
                                Consolidated
                                    Statements of Cash Flows for the years ended
                                    December 31, 2005, 2004 and
                                    2003
                                60d.
                                Consolidated
                                    Statements of Common Shareholders’ Equity for the years ended
                                    December 31, 2005, 2004 and 2003
                                61e.
                                Consolidated
                                    Statements of Comprehensive Income for the years
                                    ended December 31,
                                    2005, 2004 and 2003
                                62f.
                                Notes
                                    to Consolidated Financial Statements
                                69g.
                                Report
                                    of Independent Registered Public Accounting Firm
                                121140**KCP&L**h.
                                Consolidated
                                    Statements of Income for the years ended December 31, 2005, 2004 and
                                    2003
                                63i.
                                Consolidated
                                    Balance Sheets - December 31, 2005 and 2004
                                64j.
                                Consolidated
                                    Statements of Cash Flows for the years ended
                                    December 31, 2005, 2004 and
                                    2003
                                66k.
                                Consolidated
                                    Statements of Common Shareholder’s Equity for the years ended
                                    December 31, 2005, 2004 and 2003
                                67l.
                                Consolidated
                                    Statements of Comprehensive Income for the years
                                    ended December 31,
                                    2005, 2004 and 2003
                                68m.
                                Notes
                                    to Consolidated Financial Statements
                                69n.
                                Report
                                    of Independent Registered Public Accounting Firm
                                122**Financial
                                    Statement Schedules****Great
                                    Plains Energy**a.
                                Schedule
                                    I - Parent Company Financial Statements
                                148b.
                                Schedule
                                    II - Valuation and Qualifying Accounts and Reserves
                                152**KCP&L**c.
                                Schedule
                                    II - Valuation and Qualifying Accounts and Reserves
                                153
 
 **Exhibits**
  **Great
                          Plains Energy Documents**
  Exhibit
                                  Number
                                
                                Description
                                    of Document2.1
                                *
                                Agreement
                                    and Plan of Merger among Kansas City Power & Light Company, Great
                                    Plains Energy Incorporated and KCP&L Merger Sub Incorporated dated as
                                    of October 1, 2001 (Exhibit 2 to Form 8-K dated October 1,
                                    2001).3.1.a
                                *
                                Articles
                                    of Incorporation of Great Plains Energy Incorporated
                                    dated as of
                                    February 26, 2001 (Exhibit 3.i to Form 8-K filed October 1,
                                    2001).3.1.b
                                *
                                By-laws
                                    of Great Plains Energy Incorporated, as amended
                                    September 16, 2003
                                    (Exhibit 3.1 to Form 10-Q for the period ended
                                    September 30,
                                    2003).4.1.a
                                *
                                Resolution
                                    of Board of Directors Establishing 3.80% Cumulative
                                    Preferred Stock
                                    (Exhibit 2-R to Registration Statement, Registration
                                    No.
                                    2-40239).4.1.b
                                *
                                Resolution
                                    of Board of Directors Establishing 4.50% Cumulative
                                    Preferred Stock
                                    (Exhibit 2-T to Registration Statement, Registration
                                    No.
                                    2-40239).4.1.c
                                *
                                Resolution
                                    of Board of Directors Establishing 4.20% Cumulative
                                    Preferred Stock
                                    (Exhibit 2-U to Registration Statement, Registration
                                    No.
                                    2-40239).4.1.d
                                *
                                Resolution
                                    of Board of Directors Establishing 4.35% Cumulative
                                    Preferred Stock
                                    (Exhibit 2-V to Registration Statement, Registration
                                    No.
                                    2-40239).1414.1.e
                                *
                                Pledge
                                    Agreement, dated June 14, 2004, between Great
                                    Plains Energy Incorporated
                                    and BNY Midwest Trust Company, as Collateral
                                    Agent, Custodial Agent and
                                    Securities Intermediary and BNY Midwest Trust
                                    Company, as Purchase
                                    Contract Agent (Exhibit 4.2 to Form 8-A/A, dated
                                    June 14,
                                    2004).4.1.f
                                *
                                Indenture,
                                    dated June 1, 2004, between Great Plains Energy
                                    Incorporated and BNY
                                    Midwest Trust Company, as Trustee (Exhibit 4.5
                                    to Form 8-A/A, dated
                                    June 14, 2004).4.1.g
                                *
                                First
                                    Supplemental Indenture, dated June 14, 2004,
                                    between Great Plains Energy
                                    Incorporated and BNY Midwest Trust Company, as
                                    Trustee (Exhibit 4.5 to
                                    Form 8-A/A, dated June 14, 2004).4.1.h
                                *
                                Form
                                    of Income PRIDES (included in Exhibit 4.1 to
                                    Form 8-A/A, dated June 14,
                                    2004, as Exhibit A thereto).10.1.a
                                *+
                                Amended
                                    Long-Term Incentive Plan, effective as of May
                                    7, 2002 (Exhibit 10.1.a to
                                    Form 10-K for the year ended December 31, 2002).10.1.b
                                +
                                Great
                                    Plains Energy Incorporated Long-Term Incentive
                                    Plan Awards Standards and
                                    Administration effective as of February 7, 2006.10.1.c
                                *+
                                Form
                                    of Restricted Stock Agreement Pursuant to the
                                    Great Plains Energy
                                    Incorporated Long-Term Incentive Plan Effective
                                    May 7, 2002 (Exhibit 10.1
                                    to Form 8-K dated February 4, 2005).10.1.d
                                *+
                                Form
                                    of Restricted Stock Agreement Pursuant to the
                                    Great Plains Energy
                                    Incorporated Long-Term Incentive Plan Effective
                                    May 7, 2002 (Exhibit 10.2
                                    to Form 8-K dated February 4, 2005).10.1.e
                                +
                                Form
                                    of Restricted Stock Agreement Pursuant to the
                                    Great Plains Energy
                                    Incorporated Long-Term Incentive Plan Effective
                                    May 7, 2002.10.1.f
                                *+
                                Form
                                    of Performance Share Agreement Pursuant to the
                                    Great Plains Energy
                                    Incorporated Long-Term Incentive Plan Effective
                                    May 7, 2002 (Exhibit
                                    10.1.b to Form 10-Q for the quarter ended March
                                    31, 2005).10.1.g
                                *+
                                Form
                                    of Performance Share Agreement Pursuant to the
                                    Great Plains Energy
                                    Incorporated Long-Term Incentive Plan Effective
                                    May 7, 2002 (Exhibit
                                    10.1.c to Form 10-Q for the quarter ended March
                                    31, 2005).10.1.h
                                +
                                Form
                                    of Performance Share Agreement Pursuant to the
                                    Great Plains Energy
                                    Incorporated Long-Term Incentive Plan Effective
                                    May 7, 2002.10.1.i
                                *+
                                Strategic
                                    Energy, L.L.C. Long-Term Incentive Plan Grants
                                    2005, Amended May 2, 2005
                                    (Exhibit 10.1.f to Form 10-Q for the period ended
                                    March 31,
                                    2005).10.1.j
                                +
                                Strategic
                                    Energy, L.L.C. Executive Long-Term Incentive
                                    Plan 2006.10.1.k
                                *+
                                Great
                                    Plains Energy Incorporated/Kansas City Power
& Light Company Annual
                                    Incentive Plan 2005, Amended May 3, 2005 (Exhibit
                                    10.1.c to Form 10-Q for
                                    the quarter ended March 31, 2005).10.1.l
                                +
                                Great
                                    Plains Energy Incorporated Kansas City Power
& Light Company Annual
                                    Incentive Plan amended as of January 1, 2006.10.1.m
                                +
                                Strategic
                                    Energy, L.L.C. Annual Incentive Plan dated January
                                    1, 2006.10.1.n
                                *+
                                Form
                                    of Indemnification Agreement with each officer
                                    and director (Exhibit 10-f
                                    to Form 10-K for year ended December 31, 1995).14210.1.o
                                *+
                                Form
                                    of Conforming Amendment to Indemnification Agreement
                                    with each officer and
                                    director (Exhibit 10.1.a to Form 10-Q for the
                                    period ended March 31,
                                    2003).10.1.p
                                +
                                Form
                                    of Indemnification Agreement with officers and
                                    directors.10.1.q
                                *+
                                Form
                                    of Restated Severance Agreement dated January
                                    2000 with certain executive
                                    officers (Exhibit 10-e to Form 10-K for the year
                                    ended December 31,
                                    2000).10.1.r
                                *+
                                Form
                                    of Conforming Amendment to Severance Agreements
                                    with certain executive
                                    officers (Exhibit 10.1.b to Form 10-Q for the
                                    period ended March 31,
                                    2003).10.1.s
                                *+
                                Great
                                    Plains Energy Incorporated Supplemental Executive
                                    Retirement Plan, as
                                    amended and restated effective October 1, 2003
                                    (Exhibit 10.1.a to Form
                                    10-Q for the period ended September 30, 2003).10.1.t
                                *+
                                Nonqualified
                                    Deferred Compensation Plan (Exhibit 10-b to Form
                                    10-Q for the period ended
                                    March 31, 2000).10.1.u
                                +
                                Description
                                    of Compensation Arrangements with Directors and
                                    Certain Executive
                                    Officers.10.1.v
                                *+
                                Employment
                                    Agreement among Strategic Energy, L.L.C., Great
                                    Plains Energy Incorporated
                                    and Shahid J. Malik, dated as of November 10,
                                    2004 (Exhibit 10.1.p to Form
                                    10-K for the year ended December 31, 2004).10.1.w
                                *+
                                Severance
                                    Agreement among Strategic Energy, L.L.C., Great
                                    Plains Energy Incorporated
                                    and Shahid J. Malik, dated as of November 10,
                                    2004 (Exhibit 10.1.q to Form
                                    10-K for the year ended December 31, 2004).10.1.x
                                *
                                First
                                    Amended and Restated Joint Plan under Chapter
                                    11 of the United States
                                    Bankruptcy Code dated March 31, 2003, of Digital
                                    Teleport Inc., DTI
                                    Holdings, Inc. and Digital Teleport of Virginia,
                                    Inc. (Exhibit 10.1.e to
                                    Form 10-Q for the period ended March 31, 2003).10.1.y
                                *
                                Credit
                                    Agreement dated as of December 15, 2004, among
                                    Great Plains Energy
                                    Incorporated, Bank of America, N.A., as Syndication
                                    Agent, The Bank of
                                    Tokyo-Mitsubishi, Ltd, Wachovia Bank, National
                                    Association and BNP
                                    Paribas, as Co-Documentation Agents, JPMorgan
                                    Chase Bank, N.A., as
                                    Administrative Agent, The Bank of New York, KeyBank
                                    National Association,
                                    The Bank of Nova Scotia, U.S. Bank National Association,
                                    Merrill Lynch
                                    Bank USA, Morgan Stanley Bank, Mizuho Corporate
                                    Bank, UMB Bank, N.A., PNC
                                    Bank, National Association, Bank Midwest, N.A.
                                    and UFJ Bank Limited
                                    (Exhibit 10.1.s to Form 10-K for the year ended
                                    December 31,
                                    2004).10.1.z
                                *
                                First
                                    Amendment, dated October 6, 2005, to the Credit
                                    Agreement dated as of
                                    December 15, 2004, among Great Plains Energy
                                    Incorporated, Bank of
                                    America, N.A., as Syndication Agent, The Bank
                                    of Tokyo-Mitsubishi, Ltd,
                                    Wachovia Bank, National Association and BNP Paribas,
                                    as Co-Documentation
                                    Agents, JPMorgan Chase Bank, N.A., as Administrative
                                    Agent, The Bank of
                                    New York, KeyBank National Association, The Bank
                                    of Nova Scotia, U.S. Bank
                                    National Association, Merrill Lynch Bank USA,
                                    Morgan Stanley Bank, Mizuho
                                    Corporate Bank, UMB Bank, N.A., PNC Bank, National
                                    Association, Bank
                                    Midwest, N.A. and UFJ Bank Limited (Exhibit 10.1.a
                                    to Form 10-Q for the
                                    quarter ended September 30, 2005).14310.1.aa
                                *
                                Amended
                                    and Restated Credit Agreement, dated as of July
                                    2, 2004, by and among
                                    Strategic Energy, L.L.C., LaSalle Bank National
                                    Association, PNC Bank,
                                    National Association, Citizens Bank of Pennsylvania,
                                    Provident Bank, Fifth
                                    Third Bank and Sky Bank. (Exhibit 10.2 to Form
                                    10-Q for the period ended
                                    June 30, 2004).10.1.bb
                                
                                Amendment
                                    No. 1 dated as of December 20, 2005, to Amended
                                    and Restated Credit
                                    Agreement, dated as of July 2, 2004, by and among
                                    Strategic Energy,
                                    L.L.C., LaSalle Bank National Association, PNC
                                    Bank, National Association,
                                    Citizens Bank of Pennsylvania, Provident Bank,
                                    Fifth Third Bank, First
                                    National Bank of Pennsylvania and Sky Bank.10.1.cc
                                *
                                Amended
                                    and Restated Limited Guaranty dated as of July
                                    2, 2004, by Great Plains
                                    Energy Incorporated in favor of the lenders under
                                    the Amended and Restated
                                    Credit Agreement dated as of July 2, 2004 among
                                    Strategic Energy, L.L.C.
                                    and the financial institutions from time to time
                                    parties thereto. (Exhibit
                                    10.3 to Form 10-Q for the period ended June 30,
                                    2004).10.1.dd
                                *
                                General
                                    Agreement of Indemnity issued by Great Plains
                                    Energy Incorporated and
                                    Strategic Energy, L.L.C. in favor of Federal
                                    Insurance Company and
                                    subsidiary or affiliated insurers dated May 23,
                                    2002 (Exhibit 10.1.a. to
                                    Form 10-Q for the period ended June 30, 2002).10.1.ee
                                *
                                Agreement
                                    of Indemnity issued by Great Plains Energy Incorporated
                                    and Strategic
                                    Energy, L.L.C. in favor of Federal Insurance
                                    Company and subsidiary or
                                    affiliated insurers dated May 23, 2002 (Exhibit
                                    10.1.b. to Form 10-Q for
                                    the period ended June 30, 2002).10.1.ff
                                *
                                Agreement
                                    between Great Plains Energy Incorporated and
                                    Andrea F. Bielsker dated
                                    March 4, 2005 (Exhibit 10.1.jj to Form 10-K for
                                    the year ended
                                    December 31, 2004).10.1.gg
                                *
                                Agreement
                                    between Great Plains Energy Incorporated and
                                    Jeanie Sell Latz dated April
                                    5, 2005 (Exhibit 10.1 to Form 8-K dated April
                                    5, 2005).12.1
                                
                                Computation
                                    of Ratio of Earnings to Fixed Charges.21.1
                                
                                List
                                    of Subsidiaries of Great Plains Energy Incorporated.23.1.a
                                
                                Consent
                                    of Counsel.23.1.b
                                
                                Consent
                                    of Independent Registered Public Accounting Firm.24.1
                                
                                Powers
                                    of Attorney.31.1.a
                                
                                Rule
                                    13a-14(a)/15d-14(a) Certifications of Michael
                                    J. Chesser.31.1.b
                                
                                Rule
                                    13a-14(a)/15d-14(a) Certifications of Terry Bassham.32.1
                                
                                Section
                                    1350 Certifications.
 *** Filed
                          with the SEC as exhibits to prior registration statements
                          (except as otherwise
                          noted) and are incorporated herein by reference and made
                          a part hereof. The
                          exhibit number and file number of the documents so filed,
                          and incorporated
                          herein by reference, are stated in parenthesis in the description
                          of such
                          exhibit.
  +
                          Indicates management contract or compensatory plan or arrangement.
  Copies
                          of
                          any of the exhibits filed with the SEC in connection with
                          this document may be
                          obtained from Great Plains Energy upon written request.
 144
 Great
                          Plains Energy agrees to furnish to the SEC upon request
                          any instrument with
                          respect to long-term debt as to which the total amount
                          of securities authorized
                          does not exceed 10% of total assets of Great Plains Energy
                          and its subsidiaries
                          on a consolidated basis.
  **KCP&L
                          Documents**
  ExhibitNumber
                                
                                Description
                                    of Document2.2
                                *
                                Agreement
                                    and Plan of Merger among Kansas City Power & Light Company, Great
                                    Plains Energy Incorporated and KCP&L Merger Sub Incorporated dated as
                                    of October 1, 2001 (Exhibit 2 to Form 8-K dated October 1,
                                    2001).3.2.a
                                *
                                Restated
                                    Articles of Consolidation of Kansas City Power
& Light Company, as
                                    amended October 1, 2001 (Exhibit 3-(i) to Form 10-Q for the period
                                    ended September 30, 2001).3.2.b
                                
                                By-laws
                                    of Kansas City Power & Light Company, as amended November 1,
                                    2005.4.2.a
                                *
                                General
                                    Mortgage and Deed of Trust dated as of December
                                    1, 1986, between Kansas
                                    City Power & Light Company and UMB Bank, n.a. (formerly United
                                    Missouri Bank of Kansas City, N.A.), Trustee
                                    (Exhibit 4-bb to Form 10-K
                                    for the year ended December 31, 1986).4.2.b
                                *
                                Fourth
                                    Supplemental Indenture dated as of February 15, 1992, to Indenture
                                    dated as of December 1, 1986 (Exhibit 4-y to Form 10-K for the year
                                    ended December 31, 1991).4.2.c
                                *
                                Fifth
                                    Supplemental Indenture dated as of September 15, 1992, to Indenture
                                    dated as of December 1, 1986 (Exhibit 4-a to quarterly report on Form
                                    10-Q for the period ended September 30, 1992).4.2.d
                                *
                                Seventh
                                    Supplemental Indenture dated as of October 1, 1993, to Indenture
                                    dated as of December 1, 1986 (Exhibit 4-a to quarterly report on Form
                                    10-Q for the period ended September 30, 1993).4.2.e
                                *
                                Eighth
                                    Supplemental Indenture dated as of December 1, 1993, to Indenture
                                    dated as of December 1, 1986 (Exhibit 4 to Registration Statement,
                                    Registration No. 33-51799).4.2.f
                                *
                                Eleventh
                                    Supplemental Indenture dated as of August 15,
                                    2005, to the General
                                    Mortgage and Deed of Trust dated as of December
                                    1, 1986, between Kansas
                                    City Power & Light Company and UMB Bank, n.a. (formerly United
                                    Missouri Bank of Kansas City, N.A.), Trustee
                                    (Exhibit 4.2 to Form 10-Q for
                                    the quarter ended September 30, 2005).4.2.g
                                *
                                Indenture
                                    for Medium-Term Note Program dated as of February 15, 1992, between
                                    Kansas City Power & Light Company and The Bank of New York (Exhibit
                                    4-bb to Registration Statement, Registration
                                    No. 33-45736).4.2.h
                                *
                                Indenture
                                    for $150 million aggregate principal amount of
                                    6.50% Senior Notes due
                                    November 15, 2011 and $250 million aggregate
                                    principal amount of 7.125%
                                    Senior Notes due December 15, 2005 dated as of
                                    December 1, 2000,
                                    between Kansas City Power & Light Company and The Bank of New York
                                    (Exhibit 4-a to Report on Form 8-K dated December 18,
                                    2000).4.2.i
                                *
                                Indenture
                                    dated March 1, 2002 between The Bank of New York
                                    and Kansas City Power
                                    & Light Company (Exhibit 4.1.b. to Form 10-Q for
                                    the period ended
                                    March 31, 2002).1454.2.j
                                
                                Supplemental
                                    Indenture No. 1 dated as of November 15, 2005,
                                    to Indenture dated March 1,
                                    2002 between The Bank of New York and Kansas
                                    City Power & Light
                                    Company.4.2.k
                                
                                Registration
                                    Rights Agreement dated as of November 17, 2005,
                                    among Kansas City Power
                                    & Light Company, and BNP Paribas Securities Corp.
                                    and J.P. Morgan
                                    Securities Inc. as representatives of the several
                                    initial
                                    purchasers.10.2.a
                                *
                                Railcar
                                    Lease dated as of January 31, 1995, between First Security Bank of
                                    Utah, National Association, and Kansas City Power
& Light Company
                                    (Exhibit 10-o to Form 10-K for the year ended
                                    December 31,
                                    1994).10.2.b
                                *
                                Railcar
                                    Lease dated as of September 8, 1998, with CCG Trust Corporation
                                    (Exhibit 10(b) to Form 10-Q for the period ended
                                    September 30,
                                    1998).10.2.c
                                *
                                Insurance
                                    agreement between Kansas City Power & Light Company and XL Capital
                                    Assurance Inc., dated December 5, 2002 (Exhibit
                                    10.2.f to Form 10-K for
                                    the year ended December 31, 2002).10.2.d
                                *
                                Insurance
                                    Agreement dated as of August 1, 2004, between
                                    Kansas City Power &
                                    Light Company and XL Capital Assurance Inc. (Exhibit
                                    10.2 to Form 10-Q for
                                    the period ended September 30, 2004).10.2.e
                                
                                Insurance
                                    Agreement dated as of September 1, 2005, between
                                    Kansas City Power &
                                    Light Company and XL Capital Assurance Inc.10.2.f
                                
                                Insurance
                                    Agreement dated as of September 1, 2005, between
                                    Kansas City Power &
                                    Light Company and XL Capital Assurance Inc.10.2.g
                                *
                                Credit
                                    Agreement dated as of December 15, 2004, among
                                    Kansas City Power &
                                    Light Company, Bank of America, N.A., as Syndication
                                    Agent, The Bank of
                                    Tokyo-Mitsubishi, Ltd, Wachovia Bank, National
                                    Association and BNP
                                    Paribas, as Co-Documentation Agents, JPMorgan
                                    Chase Bank, N.A., as
                                    Administrative Agent, The Bank of New York, KeyBank
                                    National Association,
                                    The Bank of Nova Scotia, U.S. Bank National Association,
                                    Merrill Lynch
                                    Bank USA, Morgan Stanley Bank, Mizuho Corporate
                                    Bank, UMB Bank, N.A., PNC
                                    Bank, National Association, Bank Midwest, N.A.
                                    and UFJ Bank Limited
                                    (Exhibit 10.2.h to Form 10-K for the year ended
                                    December 31,
                                    2004).10.2.h
                                *
                                First
                                    Amendment, dated October 6, 2005, to the Credit
                                    Agreement dated as of
                                    December 15, 2004, among Kansas City Power & Light Company, Bank of
                                    America, N.A., as Syndication Agent, The Bank
                                    of Tokyo-Mitsubishi, Ltd,
                                    Wachovia Bank, National Association and BNP Paribas,
                                    as Co-Documentation
                                    Agents, JPMorgan Chase Bank, N.A., as Administrative
                                    Agent, The Bank of
                                    New York, KeyBank National Association, The Bank
                                    of Nova Scotia, U.S. Bank
                                    National Association, Merrill Lynch Bank USA,
                                    Morgan Stanley Bank, Mizuho
                                    Corporate Bank, UMB Bank, N.A., PNC Bank, National
                                    Association, Bank
                                    Midwest, N.A. and UFJ Bank Limited (Exhibit 10.2.a
                                    to Form 10-Q for the
                                    quarter ended September 30, 2005).10.2.i
                                *
                                Stipulation
                                    and Agreement dated March 28, 2005, among Kansas
                                    City Power & Light
                                    Company, Staff of the Missouri Public Service
                                    Commission, Office of the
                                    Public Counsel, Missouri Department of Natural
                                    Resources, Praxair, Inc.,
                                    Missouri Independent Energy Consumers, Ford Motor
                                    Company, Aquila, Inc.,
                                    The Empire District Electric Company, and Missouri
                                    Joint Municipal
                                    Electric Utility Commission (Exhibit 10.2 to
                                    Form 10-Q for the quarter
                                    ended March 31, 2005).14610.2.j
                                *
                                Stipulation
                                    and Agreement filed April 27, 2005, among Kansas
                                    City Power & Light
                                    Company, the Staff of the State Corporation Commission
                                    of the State of
                                    Kansas, Sprint, Inc., and the Kansas Hospital
                                    Association (Exhibit 10.2.a
                                    to Form 10-Q for the quarter ended June 30, 2005).10.2.k
                                *
                                Purchase
                                    and Sale Agreement dated as of July 1, 2005,
                                    between Kansas City
                                    Power & Light Company, as Originator, and Kansas City
                                    Power &
                                    Light Receivables Company, as Buyer (Exhibit
                                    10.2.b to Form 10-Q for the
                                    quarter ended June 30, 2005).10.2.l
                                *
                                Receivables
                                    Sale Agreement dated as of July 1, 2005, among
                                    Kansas City Power &
                                    Light Receivables Company, as the Seller, Kansas
                                    City Power & Light
                                    Company, as the Initial Collection Agent, The
                                    Bank of Tokyo-Mitsubishi,
                                    Ltd., New York Branch, as the Agent, and Victory
                                    Receivables Corporation
                                    (Exhibit 10.2.c to Form 10-Q for the quarter
                                    ended June 30,
                                    2005).12.2
                                
                                Computation
                                    of Ratio of Earnings to Fixed Charges.23.2.a
                                
                                Consent
                                    of Counsel.23.2.b
                                
                                Consent
                                    of Independent Registered Public Accounting Firm.24.2
                                
                                Powers
                                    of Attorney.31.2.a
                                
                                Rule
                                    13a-14(a)/15d-14(a) Certifications of William
                                    H. Downey.31.2.b
                                
                                Rule
                                    13a-14(a)/15d-14(a) Certifications of Terry Bassham.32.2
                                
                                Section
                                    1350 Certifications.
 *** Filed
                          with the SEC as exhibits to prior registration statements
                          (except as otherwise
                          noted) and are incorporated herein by reference and made
                          a part hereof. The
                          exhibit number and file number of the documents so filed,
                          and incorporated
                          herein by reference, are stated in parenthesis in the description
                          of such
                          exhibit.
  Copies
                          of
                          any of the exhibits filed with the SEC in connection with
                          this document may be
                          obtained from KCP&L upon written request.
  KCP&L
                          agrees to furnish to the SEC upon request any instrument
                          with respect to
                          long-term debt as to which the total amount of securities
                          authorized does not
                          exceed 10% of total assets of KCP&L and its subsidiaries on a consolidated
                          basis.
  147
 **Schedule
                          I - Parent Company Financial Statements**
  **GREAT
                                    PLAINS ENERGY INCORPORATED****Income
                                    Statements of Parent Company****Year
                                    Ended December 31**
                                
                                **2005**
                                2004
                                2003**Operating
                                    Expenses**
                                
                                (millions)Other
                                
                                **$**
                                **7.1**
                                
                                $
                                8.5
                                
                                $
                                5.3General taxes
                                
                                
                                **0.3**
                                
                                
                                0.2
                                
                                
                                0.2Total
                                
                                
                                **7.4**
                                
                                
                                8.7
                                
                                
                                5.5Operating
                                    loss
                                
                                
                                **(7.4**
                                **)**
                                
                                (8.7
                                )
                                
                                (5.5
                                )Equity
                                    from earnings in subsidiaries
                                
                                
                                **178.2**
                                
                                
                                199.2
                                
                                
                                149.5Non-operating
                                    income
                                
                                
                                **1.6**
                                
                                
                                2.3
                                
                                
                                3.1Non-operating
                                    expenses
                                
                                
                                **(0.1**
                                **)**
                                
                                (0.2
                                )
                                
                                (0.4
                                )Interest
                                    charges
                                
                                
                                **(9.4**
                                **)**
                                
                                (8.1
                                )
                                
                                (4.6
                                )Income
                                    before income taxes
                                
                                
                                **162.9**
                                
                                
                                184.5
                                
                                
                                142.1Income
                                    taxes
                                
                                
                                **(0.6**
                                **)**
                                
                                (3.7
                                )
                                
                                2.8Net
                                    income
                                
                                
                                **162.3**
                                
                                
                                180.8
                                
                                
                                144.9Preferred
                                    stock dividend requirements
                                
                                
                                **1.6**
                                
                                
                                1.6
                                
                                
                                1.6Earnings
                                    available for common shareholders
                                
                                **$**
                                **160.7**
                                
                                $
                                179.2
                                
                                $
                                143.3Average
                                    number of common shares outstanding
                                
                                
                                **74.6**
                                
                                
                                72.0
                                
                                
                                69.2Basic
                                    and diluted earnings per common share
                                
                                **$**
                                **2.15**
                                
                                $
                                2.49
                                
                                $
                                2.07Cash
                                    dividends per common share
                                
                                **$**
                                **1.66**
                                
                                $
                                1.66
                                
                                $
                                1.66The
                                    accompanying Notes to Financial Statements of
                                    Parent Company are an
                                    integral part of these
                                  statements.
 148
  **GREAT
                                      PLAINS ENERGY INCORPORATED****Balance
                                      Sheets of Parent Company****December
                                      31****2005**
                                  2004**ASSETS**
                                  
                                  (millions)**Current
                                      Assets**Cash and cash equivalents
                                  
                                  **$**
                                  **2.0**
                                  
                                  $
                                  2.8Accounts receivable from subsidiaries
                                  
                                  
                                  **1.0**
                                  
                                  
                                  0.8Notes receivable from subsidiaries
                                  
                                  
                                  **5.4**
                                  
                                  
                                  19.3Taxes receivable
                                  
                                  
                                  **1.8**
                                  
                                  
                                  4.4Other
                                  
                                  
                                  **0.5**
                                  
                                  
                                  0.5Total
                                  
                                  
                                  **10.7**
                                  
                                  
                                  27.8**Nonutility
                                      Property and Investments**Investment in KCP&L
                                  
                                  
                                  **1,141.0**
                                  
                                  
                                  1,099.6Investments in other subsidiaries
                                  
                                  
                                  **288.0**
                                  
                                  
                                  248.7Total
                                  
                                  
                                  **1,429.0**
                                  
                                  
                                  1,348.3**Deferred
                                      Charges and Other Assets**Total
                                  
                                  
                                  **2.0**
                                  
                                  
                                  2.5Total
                                  
                                  **$**
                                  **1,441.7**
                                  
                                  $
                                  1,378.6**LIABILITIES
                                      AND CAPITALIZATION****Current
                                      Liabilities**Notes payable
                                  
                                  **$**
                                  **6.0**
                                  
                                  $
                                  20.0Accounts payable to subsidiaries
                                  
                                  
                                  **0.5**
                                  
                                  
                                  -Accounts payable
                                  
                                  
                                  **0.1**
                                  
                                  
                                  -Accrued interest
                                  
                                  
                                  **1.7**
                                  
                                  
                                  1.6Other
                                  
                                  
                                  **6.5**
                                  
                                  
                                  6.1Total
                                  
                                  
                                  **14.8**
                                  
                                  
                                  27.7**Deferred
                                      Credits and Other Liabilities**Total
                                  
                                  
                                  **0.9**
                                  
                                  
                                  6.7**Capitalization**Common shareholders' equityCommon stock-150,000,000 shares authorized
                                      without par
                                      value74,783,824 and 74,394,423 shares issued, stated
                                      value
                                  
                                  
                                  **777.2**
                                  
                                  
                                  765.5Unearned compensation
                                  
                                  
                                  **(2.1**
                                  **)**
                                  
                                  (1.4
                                  )Capital stock premium and expense
                                  
                                  
                                  **(30.7**
                                  **)**
                                  
                                  (32.1
                                  )Retained earnings
                                  
                                  
                                  **488.0**
                                  
                                  
                                  451.5Treasury stock-43,376 and 28,488 shares, at
                                      cost
                                  
                                  
                                  **(1.3**
                                  **)**
                                  
                                  (0.9
                                  )Accumulated other comprehensive loss
                                  
                                  
                                  **(7.7**
                                  **)**
                                  
                                  (41.0
                                  )Total
                                  
                                  
                                  **1,223.4**
                                  
                                  
                                  1,141.6Cumulative preferred stock $100 par value3.80% - 100,000 shares issued
                                  
                                  
                                  **10.0**
                                  
                                  
                                  10.04.50% - 100,000 shares issued
                                  
                                  
                                  **10.0**
                                  
                                  
                                  10.04.20% - 70,000 shares issued
                                  
                                  
                                  **7.0**
                                  
                                  
                                  7.04.35% - 120,000 shares issued
                                  
                                  
                                  **12.0**
                                  
                                  
                                  12.0Total
                                  
                                  
                                  **39.0**
                                  
                                  
                                  39.0Long-term debt
                                  
                                  
                                  **163.6**
                                  
                                  
                                  163.6Total
                                  
                                  
                                  **1,426.0**
                                  
                                  
                                  1,344.2**Commitments
                                      and Contingencies**Total
                                  
                                  **$**
                                  **1,441.7**
                                  
                                  $
                                  1,378.6The
                                        accompanying Notes to Financial Statements
                                        of Parent Company are an
                                        integral part of these
                                      statements.
 149
  **GREAT
                                    PLAINS ENERGY INCORPORATED****Statements
                                    of Cash Flows of Parent Company****Year
                                    Ended December 31**
                                
                                **2005**
                                2004
                                2003**Cash
                                    Flows from Operating Activities**
                                
                                
                                
                                (millions)Net
                                    income
                                
                                **$**
                                **162.3**
                                
                                $
                                180.8
                                
                                $
                                144.9Adjustments
                                    to reconcile income to net cash from operating
                                    activities:Amortization
                                
                                
                                **0.6**
                                
                                
                                1.8
                                
                                
                                -Deferred income taxes, net
                                
                                
                                **-**
                                
                                
                                0.6
                                
                                
                                (0.6
                                )Equity in earnings from subsidiaries
                                
                                
                                **(178.2**
                                **)**
                                
                                (199.2
                                )
                                
                                (149.5
                                )Cash
                                    flows affected by changes in:Accounts receivables from subsidiaries
                                
                                
                                **(0.4**
                                **)**
                                
                                4.3
                                
                                
                                (3.0
                                )Taxes receivable
                                
                                
                                **2.6**
                                
                                
                                (4.4
                                )
                                
                                -Accounts payable to subsidiaries
                                
                                
                                **0.5**
                                
                                
                                (0.8
                                )
                                
                                (1.9
                                )Other accounts payable
                                
                                
                                **0.1**
                                
                                
                                -
                                
                                
                                (0.2
                                )Accrued and current taxes
                                
                                
                                **-**
                                
                                
                                (7.5
                                )
                                
                                1.2Accrued interest
                                
                                
                                **0.1**
                                
                                
                                0.8
                                
                                
                                0.1Cash
                                    dividends from subsidiaries
                                
                                
                                **133.9**
                                
                                
                                210.1
                                
                                
                                98.0Other
                                
                                
                                **3.0**
                                
                                
                                0.4
                                
                                
                                0.7Net cash from operating activities
                                
                                
                                **124.5**
                                
                                
                                186.9
                                
                                
                                89.7**Cash
                                    Flows from Investing Activities**Equity
                                    contributions to subsidiaries
                                
                                
                                **-**
                                
                                
                                (305.0
                                )
                                
                                (100.0
                                )Net
                                    change in notes receivable from subsidiaries
                                
                                
                                **11.0**
                                
                                
                                7.8
                                
                                
                                56.3Net cash from investing activities
                                
                                
                                **11.0**
                                
                                
                                (297.2
                                )
                                
                                (43.7
                                )**Cash
                                    Flows from Financing Activities**Issuance
                                    of common stock
                                
                                
                                **9.1**
                                
                                
                                153.7
                                
                                
                                -Issuance
                                    of long-term debt
                                
                                
                                **-**
                                
                                
                                163.6
                                
                                
                                -Issuance
                                    fees
                                
                                
                                **-**
                                
                                
                                (12.1
                                )
                                
                                -Net
                                    change in short-term borrowings
                                
                                
                                **(14.0**
                                **)**
                                
                                (67.0
                                )
                                
                                68.3Dividends
                                    paid
                                
                                
                                **(125.5**
                                **)**
                                
                                (120.8
                                )
                                
                                (116.5
                                )Other
                                    financing activities
                                
                                
                                **(5.9**
                                **)**
                                
                                (5.0
                                )
                                
                                (0.4
                                )Net cash from financing activities
                                
                                
                                **(136.3**
                                **)**
                                
                                112.4
                                
                                
                                (48.6
                                )**Net
                                    Change in Cash and Cash Equivalents**
                                
                                
                                **(0.8**
                                **)**
                                
                                2.1
                                
                                
                                (2.6
                                )**Cash
                                    and Cash Equivalents at Beginning of Year**
                                
                                
                                **2.8**
                                
                                
                                0.7
                                
                                
                                3.3**Cash
                                    and Cash Equivalents at End of Year**
                                
                                **$**
                                **2.0**
                                
                                $
                                2.8
                                
                                $
                                0.7The
                                    accompanying Notes to Financial Statements of
                                    Parent Company are an
                                    integral part of these statements.
  **GREAT
                              PLAINS ENERGY INCORPORATED**
 **Statements
                              of Common Shareholders’ Equity of Parent Company**
 **Statements
                              of Comprehensive Income of Parent Company**
 
 Incorporated
                              by reference is Great Plains Energy Consolidated Statements
                              of Common
                              Shareholders’ Equity and Consolidated Statements of Comprehensive
                              Income.
  150
  **GREAT
                              PLAINS ENERGY INCORPORATED**
 **NOTES
                              TO FINANCIAL STATEMENTS OF PARENT COMPANY**
  The
                              following are supplemental notes to the Great Plains
                              Energy Incorporated Parent
                              Company Financial Statements and should be read in
                              conjunction with the Great
                              Plains Energy Incorporated Notes to Consolidated Financial
                              Statements in Part
                              II, Item. 8.
  **1.**
                                  **SUMMARY
                                      OF SIGNIFICANT ACCOUNTING
                                      POLICIES**  **Organization**
 Great
                              Plains Energy, a Missouri corporation incorporated
                              in 2001, is a public utility
                              holding company and does not own or operate any significant
                              assets other than
                              the stock of its subsidiaries.
  **2.**
                                  **GUARANTEES**  In
                              the
                              normal course of business, Great Plains Energy and
                              certain of its subsidiaries
                              enter into various agreements providing financial or
                              performance assurance to
                              third parties on behalf of certain subsidiaries. Such
                              agreements include, for
                              example, guarantees and indemnification of letters
                              of credit and surety bonds.
                              These agreements are entered into primarily to support
                              or enhance the
                              creditworthiness otherwise attributed to a subsidiary
                              on a stand-alone basis,
                              thereby facilitating the extension of sufficient credit
                              to accomplish the
                              subsidiaries’ intended business purposes. The majority of these agreements
                              guarantee the future performance of Great Plains Energy
                              or its subsidiaries, so
                              a liability for the fair value of the obligation is
                              not recorded.
  Great
                              Plains Energy has provided $122.0 million
                              of guarantees to support certain Strategic Energy power
                              purchases and regulatory
                              requirements. At December 31, 2005, guarantees related
                              to Strategic Energy are
                              as follows:
  ·
                                  Great
                                      Plains Energy direct guarantees to counterparties
                                      totaling
                                      $58.0million, which expire in 2006,  ·
                                  Great
                                      Plains Energy provides indemnifications to
                                      the issuers of surety bonds
                                      totaling $0.5million, which expire in 2006,  ·
                                  Great
                                      Plains Energy guarantees related to letters
                                      of credit totaling $25.0
                                      million, which expire in 2006 and  ·
                                  Great
                                      Plains Energy letters of credit totaling $38.5million.
 151
 **Schedule
                          II - Valuation and Qualifying Accounts and
                          Reserves**
  **Great
                                  Plains Energy****Valuation
                                  and Qualifying Accounts****Years
                                  Ended December 31, 2005, 2004 and 2003****Additions****Charged****Balance
                                  At**
                              **To
                                  Costs**
                              **Charged**
                              
                              
                              **Balance****Beginning**
                              **And**
                              **To
                                  Other**
                              
                              
                              **At
                                  End****Description**
                              
                              **Of
                                  Period**
                              **Expenses**
                              **Accounts**
                              **Deductions**
                              **Of
                                  Period**Year
                                  Ended December 31, 2005
                              
                              (millions)Allowance
                                  for uncollectible accounts
                              
                              $
                              6.4
                              
                              $
                              6.9
                              
                              $
                              5.0
                              (a)
                              $
                              11.4
                              (b)
                              $
                              6.9Legal
                                  reserves
                              
                              
                              3.2
                              
                              
                              4.5
                              
                              
                              -
                              
                              
                              1.8
                              (c)
                              
                              5.9Environmental
                                  reserves
                              
                              
                              0.3
                              
                              
                              -
                              
                              
                              -
                              
                              
                              -
                              
                              
                              0.3Uncertain
                                  tax positions
                              
                              
                              13.4
                              
                              
                              1.2
                              
                              
                              -
                              
                              
                              10.0
                              (d)
                              
                              4.6Year
                                  Ended December 31, 2004Allowance
                                  for uncollectible accounts
                              
                              $
                              8.5
                              
                              $
                              5.4
                              
                              $
                              2.8
                              (a)
                              $
                              10.3
                              (b)
                              $
                              6.4Legal
                                  reserves
                              
                              
                              4.0
                              
                              
                              1.4
                              
                              
                              -
                              
                              
                              2.2
                              (c)
                              
                              3.2Environmental
                                  reserves
                              
                              
                              1.8
                              
                              
                              -
                              
                              
                              -
                              
                              
                              1.5
                              (e)
                              
                              0.3Uncertain
                                  tax positions
                              
                              
                              16.8
                              
                              
                              3.2
                              
                              
                              -
                              
                              
                              6.6
                              (d)
                              
                              13.4Year
                                  Ended December 31, 2003Allowance
                                  for uncollectible accounts
                              
                              $
                              8.8
                              
                              $
                              5.1
                              
                              $
                              2.8
                              (a)
                              $
                              8.2
                              (b)
                              $
                              8.5Legal
                                  reserves
                              
                              
                              3.8
                              
                              
                              3.3
                              
                              
                              -
                              
                              
                              3.1
                              (c)
                              
                              4.0Environmental
                                  reserves
                              
                              
                              1.9
                              
                              
                              -
                              
                              
                              -
                              
                              
                              0.1
                              (f)
                              
                              1.8Tax
                                  valuation allowance
                              
                              
                              15.8
                              
                              
                              (15.8
                              )
                                  (g)
                              
                              -
                              
                              
                              -
                              
                              
                              -Uncertain
                                  tax positions
                              
                              
                              2.5
                              
                              
                              12.0
                              
                              
                              3.6
                              (h)
                              
                              1.3
                              (d)
                              
                              16.8Discontinued
                                  operations
                              
                              
                              1.7
                              
                              
                              -
                              
                              
                              -
                              
                              
                              1.7
                              (i)
                              
                              -(a)Recoveries.
                                Charged to other accounts for the year ended December
                                31, 2005, includes
                                the establishment of anallowance
                                of $1.6 million.(b)Uncollectible
                                accounts charged off. Deductions for the year ended
                                December 31, 2004,
                                includes a charge off of$1.4
                                  million by Worry Free.(c)Payment
                                  of claims.(d)Reversal
                                  of uncertain tax positions. Deductions for the
                                  year ended December 31,
                                  2005, includes a reclass of$0.8
                                million to franchise taxes payable.
                                Deductions for the year ended December 31, 2003,
                                includes taxes paidfor
                                an IRS settlement.(e) Reversal
                                of reserve for remediation of soil and groundwater.(f)Payment of expenses.(g)A
                                tax valuation allowance of $15.8 million was recorded
                                at KLT Telecom in
                                2001 to reduce the income tax benefitsarising
                                primarily from DTI's 2002 abandonment
                                of its $104 million of long-haul assets. The allowance
                                wasnecessary
                                due to the uncertainty of recognizing
                                future tax deductions while DTI was in the bankruptcy
                                process.
                                Theallowance
                                was reversed in 2003 after
                                confirmation of the DTI restructuring plan.(h)Establishment of liability for uncertain
                                tax positions for
                                prior years current tax expense in excess of taxes
                                paid.(i)In
                                    2003, HSS completed the disposition of its interest
                                    in
                                    RSAE.
 152
  **Kansas
                                City Power & Light Company****Valuation
                                and Qualifying Accounts****Years
                                Ended December 31, 2005, 2004 and 2003****Additions****Charged****Balance
                                At**
                            **To
                                Costs**
                            **Charged**
                            
                            
                            **Balance****Beginning**
                            **And**
                            **To
                                Other**
                            
                            
                            **At
                                End****Description**
                            
                            **Of
                                Period**
                            **Expenses**
                            **Accounts**
                            **Deductions**
                            **Of
                                Period**Year
                                Ended December 31, 2005
                            
                            (millions)Allowance
                                for uncollectible accounts
                            
                            $
                            1.7
                            
                            $
                            3.3
                            
                            $
                            4.6
                            (a)
                            $
                            7.0
                            (b)
                            $
                            2.6Legal
                                reserves
                            
                            
                            3.2
                            
                            
                            3.1
                            
                            
                            -
                            
                            
                            1.8
                            (c)
                            
                            4.5Environmental
                                reserves
                            
                            
                            0.3
                            
                            
                            -
                            
                            
                            -
                            
                            
                            -
                            
                            
                            0.3Uncertain
                                tax positions
                            
                            
                            3.7
                            
                            
                            0.3
                            
                            
                            -
                            
                            
                            2.8
                            (d)
                            
                            1.2Year
                                Ended December 31, 2004Allowance
                                for uncollectible accounts
                            
                            $
                            4.9
                            
                            $
                            2.6
                            
                            $
                            2.7
                            (a)
                            $
                            8.5
                            (b)
                            $
                            1.7Legal
                                reserves
                            
                            
                            3.8
                            
                            
                            1.4
                            
                            
                            -
                            
                            
                            2.0
                            (c)
                            
                            3.2Environmental
                                reserves
                            
                            
                            1.8
                            
                            
                            -
                            
                            
                            -
                            
                            
                            1.5
                            (e)
                            
                            0.3Uncertain
                                tax positions
                            
                            
                            6.4
                            
                            
                            2.1
                            
                            
                            -
                            
                            
                            4.8
                            (d)
                            
                            3.7Year
                                Ended December 31, 2003Allowance
                                for uncollectible accounts
                            
                            $
                            5.6
                            
                            $
                            3.5
                            
                            $
                            2.7
                            (a)
                            $
                            6.9
                            (b)
                            $
                            4.9Legal
                                reserves
                            
                            
                            3.8
                            
                            
                            3.1
                            
                            
                            -
                            
                            
                            3.1
                            (c)
                            
                            3.8Environmental
                                reserves
                            
                            
                            1.9
                            
                            
                            -
                            
                            
                            -
                            
                            
                            0.1
                            (f)
                            
                            1.8Uncertain
                                tax positions
                            
                            
                            2.5
                            
                            
                            3.9
                            
                            
                            1.2
                            (g)
                            
                            1.2
                            (d)
                            
                            6.4Discontinued
                                operations
                            
                            
                            1.7
                            
                            
                            -
                            
                            
                            -
                            
                            
                            1.7
                            (h)
                            
                            -(a)Recoveries.
                              Charged to other accounts for the year ended December
                              31, 2005, includes
                              the establishment of anallowance
                              of $1.6 million.(b)Uncollectible
                              accounts charged off. Deductions for the year ended
                              December 31, 2004,
                              includes a charge off of$1.4
                                million by Worry Free.(c)Payment
                                of claims.(d)Reversal
                                of uncertain tax positions. Deductions for the year
                                ended December 31,
                                2005, includes a reclass of$0.8
                              million to franchise taxes payable.
                              Deductions for the year ended December 31, 2003, includes
                              taxes paidfor
                              an IRS settlement.(e) Reversal
                              of reserve for remediation of soil and groundwater.(f)Payment of expenses.(g)Establishment of liability for uncertain
                              tax positions for
                              prior years current tax expense in excess of taxes
                              paid.(i)In
                                  2003, HSS completed the disposition of its interest
                                  in
                                  RSAE.
 153
  **SIGNATURES**
  Pursuant
                          to the requirements of Section 13 or 15(d) of the Securities
                          Exchange Act of
                          1934, the registrant has duly caused this report to be
                          signed on its behalf by
                          the undersigned, thereunto duly authorized.
  GREAT
                          PLAINS ENERGY INCORPORATED
 Date:
                              March 8, 2006     By:
                              /s/Michael J. Chesser
 Michael
                              J. Chesser
 Chairman
                              of the Board and
 Chief
                              Executive Officer
 Pursuant
                          to the requirements of the Securities Act of 1934, this
                          report has been signed
                          below by the following persons on behalf of the registrant
                          and in the capacities
                          and on the dates indicated.
  Signature
                                Title
                                Date/s/Michael
                                    J. Chesser
                                  Michael
                                    J. Chesser
                                Chairman
                                    of the Board and Chief Executive Officer
                                  (Principal
                                    Executive Officer)
                                )
                                  )
                                  ))/s/Terry
                                    Bassham
                                  Terry
                                    Bassham
                                Executive
                                    Vice President - Finance
                                  and
                                    Strategic Development and
                                  Chief
                                    Financial Officer
                                  (Principal
                                    Financial Officer)
                                )
                                  )
                                  )
                                  ))/s/Lori
                                    A. Wright
                                  Lori
                                    A. Wright
                                Controller
                                  (Principal
                                    Accounting Officer)
                                )
                                  ))David
                                    L. Bodde*
                                Director
                                )
                                      March 8, 2006)/s/William
                                    H. Downey
                                  William
                                    H. Downey
                                Director
                                )
                                  ))Mark
                                    A. Ernst*
                                Director
                                ))Randall
                                    C. Ferguson, Jr.*
                                Director
                                ))William
                                    K. Hall*
                                Director
                                ))Luis
                                    A. Jimenez*
                                Director
                                ))James
                                    A. Mitchell*
                                Director
                                ))William
                                    C. Nelson*
                                Director
                                ))Linda
                                    H. Talbott*
                                Director
                                ))Robert
                                    H. West*
                                Director
                                )
 *By  /s/Michael
                          J. Chesser
 Michael
                          J. Chesser
 Attorney-in-Fact*
 
 154
 **SIGNATURES**
  Pursuant
                          to the requirements of Section 13 or 15(d) of the Securities
                          Exchange Act of
                          1934, the registrant has duly caused this report to be
                          signed on its behalf by
                          the undersigned, thereunto duly authorized.
  KANSAS
                          CITY POWER & LIGHT COMPANY
 Date:
                          March 8, 2006     By:
                          /s/
                          William H. Downey
 William
                          H. Downey
 President
                          and Chief Executive Officer
 
 Pursuant
                          to the requirements of the Securities Act of 1934, this
                          report has been signed
                          below by the following persons on behalf of the registrant
                          and in the capacities
                          and on the dates indicated.
  Signature
                                Title
                                Date/s/
                                    William H. Downey
                                  William
                                    H. Downey
                                President
                                    and Chief Executive
                                  Officer
                                    and Director
                                  (Principal
                                    Executive Officer)
                                )
                                  )
                                  ))/s/Terry
                                    Bassham
                                  Terry
                                    Bassham
                                Chief
                                    Financial Officer
                                  (Principal
                                    Financial Officer)
                                )
                                  ))/s/Lori
                                    A. Wright
                                  Lori
                                    A. Wright
                                Controller
                                  (Principal
                                    Accounting Officer)
                                )
                                  ))David
                                    L. Bodde*
                                Director
                                )
                                      March 8, 2006)/s/Michael
                                    J. Chesser
                                  Michael
                                    J. Chesser
                                Chairman
                                    of the Board
                                )
                                  ))Mark
                                    A. Ernst*
                                Director
                                ))Randall
                                    C. Ferguson, Jr.*
                                Director
                                ))Luis
                                    A. Jimenez*
                                Director
                                ))James
                                    A. Mitchell*
                                Director
                                ))William
                                    C. Nelson*
                                Director
                                ))Linda
                                    H. Talbott*
                                Director
                                ))
 *By  /s/Michael
                          J. Chesser
 Michael
                          J. Chesser
 Attorney-in-Fact*
 
 155
  **Supplemental
                          Information to be Furnished With Reports Filed Pursuant
                          to Section 15(d) of the
                          Act by Registrants Which Have Not Registered Securities
                          Pursuant to Section 12
                          of the Act.**
 KCP&L
                          did not send any annual report to security holders covering
                          its last fiscal
                          year, and did not send any proxy statement, form of proxy
                          or other proxy
                          soliciting material to its security holders with respect
                          to any annual or other
                          meeting of security holders.
  156