ex10_2-2.htm


    


      Exhibit
10.2.2

      


      JOINT
OPERATING AGREEMENT

      


      This
Joint Operating Agreement (the “Agreement”) is made and entered into this 10th
day of October, 2008 by and between Kansas City Power & Light Company
("KCP&L”) and Aquila, Inc., doing business as KCP&L Greater Missouri
Operations Company ("KCP&L GMO").

      


      WITNESSETH

      


      WHEREAS,
KCP&L is a wholly-owned subsidiary of Great Plains Energy Incorporated
("Great Plains Energy"); and

      


      WHEREAS,
Great Plains Energy acquired KCP&L GMO as of July 14, 2008, and

      


      WHEREAS,
to facilitate utility operations integration and to realize synergies, employees
of KCP&L GMO were transferred to KCP&L, and employees of KCP&L will
operate and manage the business and properties of both KCP&L and KCP&L
GMO, and

      


      WHEREAS,
in Case No. EM-2007-0374 before the Missouri Public Service Commission (the
“MPSC”), KCP&L and KCP&L GMO requested a waiver from the MPSC affiliate
transaction rules to permit KCP&L to provide services and non-power goods to
KCP&L GMO at fully distributed cost, and offered to execute and file a joint
operating agreement to document the provision of such services and non-power
goods, and

      


      WHEREAS,
the MPSC granted such waiver, authorized Great Plains Energy to acquire
KCP&L GMO, and directed that such a joint operating agreement be filed with
the MPSC, and

      


      WHEREAS,
KCP&L and KCP&L GMO have entered into this Agreement whereby each party
agrees to provide and to accept and pay for various services and non-power
goods.

      


      NOW
THEREFORE, in consideration of the promises and the mutual agreements herein
contained, the parties to this Agreement covenant and agree as
follows:

      


      ARTICLE
I – JOINT OPERATING SERVICES

      


      Section
1.1     Purpose.  This
Agreement provides the contractual basis for the coordinated planning,
construction, acquisition, disposition, operation and maintenance of KCP&L’s
and KCP&L GMO’s business and properties to achieve synergies, consistent
with reliable electric service and all legal and other
requirements.

      


       

       

      1


      
        

      


      Section
1.2     KCP&L Designated Agent
and Operator.  KCP&L GMO hereby designates KCP&L as its
agent and operator of its business and properties.  KCP&L shall be
responsible for and shall perform, through its employees, agents, and
contractors, all such actions and functions (including, without limitation, the
entry into contracts for the benefit of or as agent for  KCP&L
GMO) as may be required or appropriate for the proper design, planning,
construction, acquisition, disposition, operation, engineering, maintenance and
management of KCP&L GMO’s business and properties in accordance with the
terms of this Agreement (the “Services”).  KCP&L GMO hereby
delegates to KCP&L, and KCP&L hereby accepts responsibility and
authority for the duties set forth in this Agreement.

      


      Section
1.3     Description of the
Services.  The Services shall include all services required or
appropriate for the design, planning, construction, acquisition, disposition,
operation, engineering, maintenance and management of KCP&L GMO’s business
and properties.  The Services exclude wholesale electricity and
transmission service transactions between KCP&L and KCP&L GMO, which
will be governed by applicable Federal Energy Regulatory Commission (“FERC”)
tariffs and rules.  Such Services are more fully described in Appendix
A hereto.

      


      Section
1.4     Standards for
Services.  KCP&L shall provide the Services in accordance
with its practices, methods, standards, guides, policies and procedures in
effect from time to time which, as applicable, will be consistent with those
that are generally accepted in the electric utility
industry.  KCP&L will comply with all applicable Federal, State
and local laws, regulations, ordinances and other requirements in the provision
of Services to KCP&L GMO.

      


      Section
1.5     Facilities
Services.  KCP&L will use its properties, systems,
agreements and other assets in providing Services (the “KCP&L Facilities
Services”).  KCP&L GMO consents to the use of its properties,
systems and agreements by KCP&L in providing Services and in operating and
managing KCP&L’s own business (the “KCP&L GMO Facilities
Services”).  The KCP&L Facilities Services and the KCP&L GMO
Facilities Services are collectively referred to as the “Facilities
Services”.  The provision of, and payment for, the Facilities Services
will be done pursuant to the terms of this Agreement.

      


      Section
1.6     Compliance with Policies and
Agreements.  In connection with its receipt of the Services,
each party shall comply with (i) all applicable policies and procedures of the
other party, and (ii) all applicable terms and conditions of any third party
agreements pursuant to which KCP&L GMO receives Services and KCP&L
receives Facilities Services, including without limitation terms and conditions
preserving the confidentiality and security of proprietary information of
vendors.

      


      Section
1.7     Adequacy of
Personnel.  KCP&L shall use commercially reasonable efforts
to maintain a staff trained and experienced in provision of the
Services.  Notwithstanding the foregoing, KCP&L may (i) arrange
for the services of nonaffiliated experts, consultants, attorneys and other
third parties in connection with the performance of any of the Services or (ii)
subcontract performance of the Services to one or more third
parties.

       

      
2

      
        

      


      Section
1.8     Parity of Services and
Internal KCP&L Operations.  KCP&L will at all times use
its commercially reasonable efforts to provide the Services in scope, quality
and schedule equivalent to those it provides to its own internal
operations.  In providing the Services, KCP&L will seek to
maximize the aggregate synergies to both companies, and shall not take any
action that would unduly prefer either party over the other party.

      


      ARTICLE
II - COMPENSATION

      


      Section
2.1     Payment for
Services.  As compensation for the Services, KCP&L GMO
shall reimburse KCP&L for all costs that reasonably can be identified and
related to the Services performed by or on behalf of KCP&L for KCP&L GMO
including, but not limited to, KCP&L’s cost of salaries and wages, office
supplies and expenses, third party vendor costs, property insurance, injuries
and damages, employee pensions and benefits, taxes, miscellaneous general
expenses, rents, maintenance of structures and equipment, depreciation and
amortization, and compensation for use of capital.  Notwithstanding
anything herein to the contrary, the price of the Services shall comply with all
applicable rules and regulations of the FERC, the MPSC, all other applicable
regulatory commissions, and the provisions of Great Plains Energy’s Cost
Allocation Manual, which includes KCP&L and KCP&L GMO cost allocation
information, filed from time to time with the MPSC.

      


      Section
2.2     Payment for Facilities
Services.  It is understood that KCP&L GMO Facilities
Services may be used by KCP&L in providing Services to KCP&L GMO, as
well as used by KCP&L for its own business.  In order to avoid
duplicate billing, the parties agree that KCP&L will be billed, and will
reimburse KCP&L GMO, only for that portion of KCP&L GMO Facilities
Services used by KCP&L for its own business. As compensation for Facilities
Services, the receiving party shall reimburse the providing party for all costs
that can reasonably be identified and related to the Facilities Services
including, but not limited to, cost of salaries and wages, office supplies and
expenses, third party vendor costs, property insurance, injuries and damages,
employee pensions and benefits, taxes, miscellaneous general expenses, rents,
maintenance of structures and equipment, depreciation and amortization,
compensation for use of capital, and a return on capital associated with the
assets used to provide Facilities Services.  Costs recovered through
Services billings shall be excluded from the costs of Facilities
Services.  Notwithstanding anything herein to the contrary, the price
of Facilities Services shall comply with all applicable rules and regulations of
the FERC, the MPSC, all other applicable regulatory commissions, and the
provisions of Great Plains Energy’s Cost Allocation Manual, which includes
KCP&L and KCP&L GMO cost allocation information, filed from time to time
with the MPSC.

      


      Section
2.3     Billing.  KCP&L
shall render a monthly statement to KCP&L GMO setting forth a description of
the Services and KCP&L Facilities Services rendered to KCP&L GMO in the
previous month and KCP&L’s costs in connection therewith.  The
monthly statement to KCP&L GMO will also set forth a description of
KCP&L GMO Facilities Services used by KCP&L for its own business and
KCP&L GMO’s associated costs.  KCP&L shall maintain reasonable
supporting documentation in connection with costs.  Payment shall be
made by remittance of the amounts billed within thirty (30) days of the date of
the statement or by making appropriate accounting entries on KCP&L’s and
KCP&L GMO’s books.

      
3

      
        
          

        



      


      Section
2.4     Dispute
Resolution.  In the event that a dispute arises between
KCP&L and KCP&L GMO regarding the costs charged by the providing party
to the receiving party for Services or Facilities Services hereunder,
representatives of KCP&L and KCP&L GMO will attempt to resolve the
issues.  Unresolved disputes regarding costs or any other claim or
dispute related to this Agreement shall be resolved by binding arbitration by
the American Arbitration Association under the rules then in
effect.  Any award of the arbitrator(s) may be entered as a judgment
in any court of competent jurisdiction.

      


      Section
2.5     Records
Inspection.  KCP&L GMO at its own expense may examine
KCP&L’s pertinent books, records, data and other documents once each year
for the purpose of evaluating the accuracy of KCP&L’s statements to
KCP&L GMO.  Such examination shall begin no fewer than thirty (30)
days after KCP&L receives a written notice requesting an examination and
shall be completed no later than thirty (30) days after the start of such
examination. Such examination shall be conducted by an independent auditor
reasonably acceptable to both KCP&L GMO and KCP&L.  If an
independent auditor is used, KCP&L GMO shall cause the independent auditor
to execute a nondisclosure agreement reasonably acceptable to
KCP&L.  Each audit shall be conducted on the premises of KCP&L
during normal business hours.  KCP&L shall cooperate fully in any
such audit, providing the auditor reasonable access to any and all appropriate
KCP&L employees and books, records and other documents reasonably necessary
to assess the accuracy of KCP&L’s invoices.  The results of the
examination shall be provided to KCP&L.

      


      If
KCP&L and KCP&L GMO agree that the amount of any statement should be
adjusted as a result of the examination, the amount of the adjustment shall be
paid or reimbursed, as applicable, promptly with interest at a rate equal to the
applicable compensation for use of capital if the adjustment is related to
Services provided, or at a rate equal to the applicable return on capital used
for Facilities Services billings (as such rates are described in the Great
Plains Energy Cost Allocation Manual) from the due date of the applicable
invoice.  Any unresolved dispute shall be submitted to arbitration
pursuant to Section 2.3, and any resulting award shall include interest
calculated on Services or Facilities Services as previously described from the
due date of the applicable invoice.

      


      ARTICLE
III – TERM AND TERMINATION

      


      This
Agreement shall become effective as of the date first written above and shall
continue in force until terminated pursuant to this Article III (the
“Term”).  This Agreement may be terminated by either party upon at
least one year's prior written notice to the other party.  This
Agreement shall also be subject to termination or modification at any time,
without notice, if and to the extent performance under this Agreement may
conflict with any applicable law, rule, regulation or order of any regulatory
body adopted before or after the date of this Agreement.  Further,
this Agreement shall automatically terminate in the event of a direct or
indirect change of control of either KCP&L or KCP&L
GMO.   Sections 2.4, 2.5, 4.1, 4.2, 5.3 and 5.4 shall survive
expiration or termination of this Agreement for any reason.

      


      ARTICLE
IV –

       

       

      4

      
        
          

        




      DISCLAIMER
OF WARRANTIES; LIMITATION OF LIABILITY

      


      Section
4.1     EXCEPT AS SET FORTH IN SECTION 1.4,
KCP&L MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES
AND HEREBY DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES AS TO MERCHANTABILITY,
NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.

      


      Section
4.2     Limitation of
Liability. Except with respect to its indemnification obligations set out
in this Section 4.2, KCP&L’s aggregate liability to KCP&L GMO pursuant
to this Agreement for any acts or omissions in any 12-month period during the
Term shall not exceed the aggregate charges payable to KCP&L by KCP&L
GMO pursuant to Section 2.1 and 2.2 in such 12-month period.  Except
with respect to its indemnification obligations set out in this Section 4.2,
KCP&L GMO’s aggregate liability to KCP&L pursuant to this Agreement for
any acts or omissions in any 12-month period during the Term shall not exceed
the aggregate charges payable to KCP&L GMO by KCP&L pursuant to Section
2.2 in such 12-month period. Notwithstanding the foregoing sentences, each party
hereto will defend, indemnify and save harmless the other party hereto from and
against any and all liability, loss, costs, damages and expenses, including
reasonable attorney’s fees, caused by or arising out of the gross negligence,
willful misconduct or breach of this Agreement by such indemnifying
party.  In no event shall any party be liable to the other party for
any punitive, exemplary, indirect, special or consequential damages in
connection with this Agreement.

      


      ARTICLE
V  - MISCELLANEOUS

      


      Section
5.1     Amendments. No
amendment, change, or modification of this Agreement shall be valid, unless made
in writing and signed by the parties hereto.

      


      Section
5.2     No Assignment.
Neither party may assign this agreement, in whole or in part, without the prior
written consent of the other party.

      


      Section
5.3     Choice of
Laws.  This Agreement will be deemed to be made in and in all
respects shall be interpreted, construed and governed by and in accordance with
the laws of Missouri, without giving effect to rules concerning conflicts of
laws.

      


      Section
5.4     No Third Party
Beneficiaries.  This Agreement is not intended to, and does
not, confer upon any party other than KCP&L and KCP&L GMO any rights or
remedies hereunder.

      


      Section
5.5     Regulatory
Filings.  KCP&L and KCP&L GMO shall make all necessary
regulatory filings and seek all necessary regulatory approvals for this
Agreement.

      


      Section
5.6     No Effect on Other
Agreements.  This Agreement shall not modify the obligations of
any party under any agreement with a third party, and shall not modify any
agreement between the parties under any tariff or other agreement filed with the
FERC, the

       

       

      5

        

      


      MPSC or
other regulatory commission.

      


      Section
5.7     Waivers.  Any
waiver at any time by a party of any of its rights with respect to a default by
the other party under this Agreement shall not be deemed a waiver with respect
to any subsequent default of similar or different nature, nor shall it prejudice
its right to deny waiver of any other default by the other party.

      


      Section
5.8     Independent
Contractor.  KCP&L and KCP&L GMO agree that for the
purposes of this Agreement, each party is an independent contractor to the other
party.  KCP&L will be solely responsible for directing the work of
its personnel.  KCP&L is solely responsible for the compensation
of its employees assigned to provide the Services hereunder, and payment of
workers’ compensation, disability and other similar benefits, unemployment and
other similar insurance, and for withholding, income, social security and other
taxes.

      
 

       

      6

      
        
          

        



      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date and year first above written.

      


      
        	
                Kansas
      City Power & Light Company

              	
                Aquila, Inc., doing
      business as KCP&L  Greater Missouri Operations
      Company

              
	 
      	 
      
	
                /s/
      William H. Downey

              	
                /s/
      William H. Downey

              
	
                William
      H. Downey

              	
                William
      H. Downey

              
	
                President
      and Chief Operating Officer

              	
                President
      and Chief Operating Officer

              
	 
      	 
      
	
                Approved
      by Counsel:

              	 
      
	 
      	 
      
	
                /s/
      William G. Riggins

              	 
      
	
                William
      G. Riggins

              	 
      
	
                General
      Counsel and Chief Legal Officer

              	 
      
	
                Kansas
      City Power & Light Company

              	 
      
	
                Aquila,
      Inc.

              	 
      


      

      


      


      
 

      7

      
        
          

        



      APPENDIX
A

      


      Description
of Services

      


      General
descriptions of the Services to be provided by KCP&L to KCP&L GMO are
detailed below.  The descriptions are deemed to include services
associated with, or related or similar to, the services contained in such
descriptions.  The descriptions are not intended to be exhaustive, and
KCP&L will provide such additional services, whether or not referenced
below, that are necessary or appropriate to meet the service needs of KCP&L
GMO.

      


      Corporate
Services

      


      Corporate
Services is responsible for providing Information Technology, Purchasing,
Facilities and Resource Protection services for KCP&L GMO
operations.  These services also apply to any new facilities that may
be added from time to time.

      


      Information Technology
(“IT”):  Support existing applications, technologies and
infrastructure to ensure business continuity and leverage
capabilities.  Examples include CIS, PeopleSoft, desktop, real-time
systems, radio and telecommunications.  In addition, IT will work with
KCP&L GMO to develop and deploy new applications and technologies as
appropriate.

      


      Purchasing:  Acquire
goods and services on behalf of KCP&L GMO operations, as well as for all
construction projects; exercise governance and oversight over all procurement
functions and ensure compliance with established policies and
procedures.

      


      Facilities:  Responsible
for the planning and management of existing company buildings and grounds,
whether owned or leased, as well as for any new building construction or
remodeling; and provide print, courier and mailroom services
and  records management.

      


      Resource
Protection:  Responsible for the protection of the physical,
human and information assets of KCP&L GMO, and for business continuity
planning and adherence to applicable standards such as required by Homeland
Security, etc.

      


      Delivery

      


      Delivery
is responsible for providing customer, transmission and distribution
services.  This includes business performance services, claims
services, customer services, major outage/catastrophic event management
services, energy efficiency and demand response services, metering and
infrastructure technology services, resource management, safety training and
incident response services, transmission and distribution construction and
maintenance management, transmission and distribution operations and
maintenance, transmission, distribution and substation engineering and asset
management, transmission policy, planning and compliance services to KCP&L
GMO.  These services also apply to any new facilities that may be
added from time to time.

       

       

      8


      
        

      


      Business Performance
Services:  Develop, gather data, manage, create and maintain
financial and reliability reports; provide financial analysis, training on
financial systems and business support; oversee financial and accounting
processes; direct the preparation of budgets and forecasts; draft certain
regulatory reports and testimony; develop policies, monitor key developments in
the electrical delivery arena and KCP&L GMO territories; prepare and file
compliance related reporting; manage process and performance improvement; create
and conduct process and performance training; and collect and analyze
benchmarking and scorecard data.

      


      Claims
Services:  Administer claims received relating to property
damage and/or service issues in KCP&L GMO service territories; prosecute
claims to recover damages for property damage against KCP&L GMO
assets.

      


      Community Liaison and Communication
Services: Act as liaison with government agencies; federal, state and
locally elected officials, civic organizations, and other community stakeholders
affecting the KCP&L GMO service area; respond to media and governmental
stakeholder requests for information; and create and present information to the
public through press releases, advertising, public speaking and other available
communication channels.

      


      Community Relations Services:
Identify and administer investment and membership support in KCP&L
GMO's community organizations; administer contributions to nonprofit agencies
identified in KCP&L GMO's service and operating territories that support
at-risk youth, the environment and economic/workforce development; administer
memberships with chambers, economic development corporations and other
organizations in KCP&L GMO's service and operating territories; coordinate
presentations and public speaking requests; identify and administer community
sponsorships in coordination with partners; manage and provide support for
KCP&L GMO's events, including town hall meetings and executive visits;
identify and manage employees in KCP&L GMO community support roles, such as
serving on boards and providing direct service to underserved people and
communities.

      


      Customer
Services:  Receive and process customer requests through all
customer contact channels; answer customer questions, create and enter service
orders, and educate customers about KCP&L GMO services; obtain and record
meter data; process customer service orders;  manage the field
collection process at the customer premise, investigate potential revenue loss,
and report irregular customer activities pertaining to their electric service;
prepare and deliver accurate and timely statements and invoices to customers;
manage the payment application process, reconcile payments received from
customers, remit payments received, and conduct research on non-routine
payments; collect amounts owed on delinquent accounts, bad debt recoveries, and
bankruptcy; process and remit amounts recovered; manage and apply energy
assistance payments; conduct fraud investigations, diversion investigations, and
analyze customer usage and pricing for accuracy and timeliness of sending
customer bills; investigate and manage commission complaints to resolution;
design programs to increase funding to assist low income customers; manage
programs targeted for the elderly and vulnerable (i.e., medical emergency)
customers; create partnerships with energy assistance agencies; administer cold
and hot weather rules; develop and present outreach programs designed to educate
customers about energy usage and efficiency; design and use measurement and
assessment tools to gauge

       

       

       

      
9

      
        

      


      effectiveness
and efficiency of customer contact work processes; and collect, verify and
report statistics and data as requested by internal customers.

      


      Economic Development
Services:  Manage and administer business development
initiatives, strategies and programs associated with retention, expansion and
recruitment of major customers in KCP&L GMO's service territory; manage and
develop relationships with strategic state, regional and local development
groups while being familiar with state and local incentives, and financing
options; assist KCP&L GMO's communities in strategic planning, setting goals
and priorities, and facilitate implementation of community and economic
development programs; and represent KCP&L GMO on relevant community and
state boards.

      


      Energy Efficiency and Demand Response
Services (“EE/DSM”):  Identify and develop products for EE/DSM
including market analysis, technology review, feasibility analysis, load
research and tariff development/approval; provide marketing of EE/DSM to
customers; act as liaison and support EE/DSM programs with large industrial and
commercial users; create and present public education and training
demonstrations on EE/DSM programs; provide eServices management; and develop and
provide marketing, sales and product support for unregulated, revenue generating
services.

      


      Major Outage/Catastrophic Event
Management Services:  Provide “command and control” management
including allocation of resources, communication with MPSC, internal and
external stakeholders, coordination with the Mutual Assistance Group, and
analysis of operational and performance data from KCP&L GMO systems; act as
liaison with government agencies, municipalities and emergency response
organizations; and create and conduct training with stakeholders .

      


      Metering and Infrastructure
Technology Services:  Plan, design and implement integrated
technologies to better supply, manage, and enable more efficient use of energy
both by the utility and the customer; identify and evaluate existing and
emerging technologies in the areas of advanced metering, distribution
automation, grid communication networks, advanced control centers, demand
response, energy efficiency, as well as the integration of renewable and
distributed supply resources; and plan, design and implement metering and meter
reading infrastructure.

      


      Resource
Management:  Provide supervision of resource procurement,
including strategic sourcing, vendor alliance development, order management,
supplier management, consignment systems and contract governance; manage
vegetation management services and infrastructure monitoring and improvements
consistent with approved KCP&L GMO vegetation and infrastructure plans;
provide supply chain management to drive optimum service, quality and innovation
for material, services and fleet management in order to achieve operational
excellence and lower operational and maintenance costs; develop policies and
implement contract compliance practices to ensure value is captured; provide
work management asset tracking services; provide meter procurement and
maintenance services; and provide shop services that include equipment testing
and reconditioning, welding, mechanical services, pipefitting, plumbing and
carpentry.

       

       

      
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      Safety Training and Incident Response
Services:  Create and present public safety education and
training demonstrations; respond to incidents of personal injury and/or property
damage involving employees and/or KCP&L GMO assets; and develop operating
and compliance guidelines.

      


      Transmission and Distribution
Construction and Maintenance Management:  Analyze, coordinate
and support work for system expansion, construction, system improvements, and
corrective and preventive maintenance; provide patrolling services of
infrastructure and equipment; and act as company liaison to customers,
municipalities, community organizations and local stakeholders.

      


      Transmission and Distribution
Operations and Maintenance:  Provide “first response” to outage
and irregular system operation reports and analyze, coordinate and support work
to restore service and return system to regular operating status.

      


      Transmission, Distribution and
Substation Engineering and Asset Management:  Analyze,
coordinate and support work for delivery and substation system expansion,
improvements, and corrective and preventive maintenance; provide engineering,
planning, design, trouble-shooting and mapping services; support field personnel
in handling right–of-way purchases, right-of-way inquiries, zoning permits and
crossing permits; and establish and monitor system-wide electrical
standards.

      


      Transmission Policy, Planning and
Compliance Services:  Develop policies, monitor key
developments in the transmission arena, and participate in industry groups and
forums relevant to transmission system reliability, operations and policy
issues; act as liaison with FERC, NERC, Southwest Power Pool (“SPP”), Midwest
Independent Transmission System Operator (“MISO”), Edison Electric Institute
(“EEI”), Kansas Electric Transmission Authority (“KETA”), the Transmission
Owners and Operators Forum and other organizations and stakeholders; perform
analysis and planning of transmission system; negotiate agreements with
transmission stakeholders; provide support for real-time transmission system
analysis, monitor system reliability and security; respond to threats against
system reliability and security; provide compliance review of relevant NERC and
FERC standards and policies; administer transmission tariffs; and provide
accounting of energy flowing across transmission system and monitor transmission
revenues received.

      


      Supply

      


      Supply is
responsible for all aspects of providing the electric energy necessary to
reliably, and in compliance with applicable laws, fulfill the electric demands
of KCP&L GMO customers.  In order to effectively meet this
obligation, Supply shall provide the following general services to KCP&L
GMO: resource planning; plant operations and maintenance; fuel procurement and
logistics; generation dispatch; power purchases and sales; new unit
construction; and system black-start.  These services shall apply to
all present and future KCP&L GMO generating facilities.  These
services also include the optimization of all KCP&L GMO jointly owned units
and all capacity and energy contracts that exist or may be entered into from
time to time.

      
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      KCP&L
and KCP&L GMO will be operated and planned for as separate control areas
with wholesale transactions governed by applicable FERC tariffs and rules, until
and unless otherwise determined by the parties and approved by all applicable
regulatory bodies.

      


      Resource
Planning:  Develop periodic integrated resource plans, capacity
testing, reliability reporting, and interconnection applications; coordinate new
source review as needed; and maintain fleet generation statistics.

      


      Plant Operations and
Maintenance:  Conduct safety training, safety incident
investigation, training of the operating and maintenance staff; develop/maintain
operating procedures; manage operating staff; maintain planning (near term and
long term); maintain facilities and equipment; outage planning; maintenance
management; contractor management; inventory management; and environmental
compliance and reporting.

      


      Fuel Procurement and
Logistics:  Develop fuel procurement plan, fuel procurement for
power production (coal, oil and natural gas); arrange for fuel delivery,
nomination of required natural gas deliveries, procurement, delivery of all
plant combustion reagents (lime, limestone, ammonia, urea, etc.); fuel handling
and storage at the plants; and fuel inventory management, sale or off-site
disposal of coal combustion products (including fly ash, bottom ash, and
scrubber by-products).

      


      Generation
Dispatch:  Unit scheduling; maintenance of reserve
requirements; coordination with the RTO; and coordination with generating
stations and load balancing.

      


      Power Purchases and
Sales:  Manage day ahead and real time sales and/or purchases
to  effectively meet customer demand; secure transmission paths;
cultivate wholesale customers on both the buy and sell side; track and manage
RTO transactions and costs; and manage participation in RTO markets as they
become available (energy imbalance market, ancillary services,
etc.).

      


      New Unit
Construction:  Organize and manage the construction efforts
necessary to place new generating assets into service or to retro-fit existing
facilities with new process equipment necessary to allow the unit to continue to
operate, including the removal of abandoned equipment, as may be
necessary.

      


      Black
Start:  Maintain and periodically test the system black-start
capability.

      


      Human
Resources

      


      Services
are provided to KCP&L GMO by employees of KCP&L.  Human
Resources (“HR”) is responsible for the planning, development, and
implementation of all aspects of human capital strategy which complements and
reinforces the strategies of KCP&L GMO and its affiliates.  HR
will meet KCP&L GMO’s needs through the general services categories
described below.

      


      Employee Relations – HR uses a
Generalist model in working with operating groups as business partners to ensure
close alignment with, and proactive support of, operating needs.

       

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      Labor Relations – Provide
centralized leadership in working collaboratively with the IBEW locals,
including labor strategy, negotiations, grievances, arbitrations, job bidding,
and other activities.

      


      Staffing and Recruitment –
Ensure a robust pipeline of talent into the organization by creatively sourcing
candidates and overseeing/coordinating the recruiting, interviewing, testing,
placement, and on-boarding processes; and manage a variety to specialized
sourcing programs ranging from college recruiting, internship programs, high
programs, diversity programs, and other practices.

      


      Compensation and Benefits –
Recommend and develop the overall reward program to ensure the acquisition and
retention of talent and effective cost management, including base salary,
incentive, and all other benefit and recognition programs; and oversee
Affirmative Action Programs.

      


      Safety and Medical – Oversee
worker’s compensation and return-to-work programs, DOT, and other health and
safety programs.

      


      Winning Culture – Work to
ensure a workforce that is engaged, innovative, accountable, and
high-performing.

      


      Training and Development –
Ensure an effective professional workforce through the development/delivery of
programs through the GPE University; identify suitable external programs and
leadership development opportunities; and identify, coaching, and development of
high potential employees; and oversee an assessment center, workforce planning,
periodic employee surveys, and effective performance management
processes.

      


      Human Resource Information
System – Ensure secure and effective systems that allow accurate
reporting of employee-related information; develop and implement systems and
processes that enable increased employee and manager self-service; and promote
and implement process improvements for HR.

      


      HR Service Center - The HR
Service Center provides a “one-stop shop” for efficient response to employees’
and retirees’ HR questions.

      


      HR Strategy and Planning –
Ensure awareness of best practices and adopts as appropriate; ensures goals,
metrics, and plans are established to enhance service and efficiency; and craft
and implement company-wide strategies to address chronic workforce
challenges.

      


      Finance
and Accounting Services

      


      Finance
and Accounting Services (“F&A”) is responsible for all aspects of providing
services across the organization necessary to support the operations of
KCP&L GMO and all other corporate entities.  These services are
provided by KCP&L to the other entities.  F&A will meet
KCP&L GMO’s need for F&A services through the general services
categories described below.

       

       

      
13

      
        

      


      


      Accounting
Systems:  Provide system support of financial systems for all
entities, including KCP&L GMO.  Major financial systems include
the PeopleSoft financial and HR systems, CIS+ customer billing system, and the
property management system, PowerPlant.  System support is categorized
into operations and project management functions.  The operations
function includes; run the month-end financial close process; maintain
PeopleSoft and PowerPlant security for the organization; update PeopleSoft chart
fields; maintain the PeopleSoft allocation processes; maintain PeopleSoft trees
for reporting, and nVision and query development for the organization; including
support provided in gathering financial information to respond to regulatory,
customer, or audit requests.  The project management function includes
upgrades and system enhancements and consists of gathering requirements,
developing timelines, developing and maintaining test scripts for testing
phases, and signoff during implementations.

      


      Accounts
Payable:  Provide accounts payable transaction processing and
reporting for all Great Plains Energy entities, including KCP&L
GMO.  Primary services provided include:  Create/maintain
vendor profiles;  receive/process paper/electronic invoices and
payments;  prepare vendor 1099s;  review/update invoice
approval workflow; review/update voucher account coding;  reconcile
payment records and vendor balances;  research/resolve purchase order
payment exceptions;  provide monthly reporting metrics;  and
receive/research/provide vendor and/or payment inquiries.

      


      Audit
Services:  Examine and evaluate the adequacy and effectiveness
of the organization’s governance, risk management process, internal control
system structure, and the quality of performance in carrying out assigned
responsibilities to achieve the organization’s stated goals and
objectives.  Primary services provided include:  review the
reliability and integrity of financial and operating information and the means
used to identify, measure, classify, and report such information; review the
systems established to ensure compliance with those policies, plans, procedures,
laws, and regulations, including relevant provisions of the Sarbanes-Oxley Act
of 2002, which could have a significant impact on operations and reports, and
assessing whether the organization is in compliance; review the means of
safeguarding assets and, as appropriate, verifying the existence of such assets;
review operations or programs to ascertain whether results are consistent with
established objectives and goals and whether the operations or programs are
being carried out as planned; review specific matters at the request of the
audit committee or management, as appropriate; monitor and evaluate the
effectiveness of the organization’s risk management system; and review, where
contractually authorized, accounting and other relevant records of joint
ventures, contractors, suppliers, and other third party business
associates.

      


      Corporate
Accounting:  Maintain the accounting books and records of all
Great Plains Energy entities, including KCP&L GMO.  Primary
services provided include: establish and maintain accounting policies and
procedures; establish and monitor internal controls; record revenues, operation
and maintenance expenses, other income/expense and assets and liabilities, and
analyze activity in accounts; and perform account monitoring and
reconciliations, management reports, certain regulatory reports and provide
financial support to operations, regulatory affairs and other internal
customers, as requested.

       

      14


      
        

      


      Corporate
Finance:  Direct the Company's corporate finance function,
which includes the development, analysis, and implementation of financial plans
and capital structure so as to maintain continuous access to capital at the
lowest overall cost.  Primary services provided
include:  prepare documentation and satisfy the filing requirements
associated with the Company's financing and lead negotiations of specific costs
and terms of security issues and/or leases by working directly with the
underwriters; minimize the cost of debt by managing the variable rate debt
portfolio utilizing interest rate management products; support the Company’s
regulatory efforts, including cost of capital analysis / testimony preparation
assistance; primary day-to-day management of relationships with rating agencies,
members of the Company’s bank group and any other investment banks; and
preparation of financial materials for internal and external stakeholders as
requested and required.

      


      Corporate Planning &
Budgeting:  Develop budgets and financial forecasts for all
Great Plains Energy entities, including KCP&L GMO.  Primary
services provided include:  collection of departmental operating and
capital budgets; allocation of budgeted pension and benefit costs, jointly owned
facilities, and other allocable costs between business units; and development of
forecasted financial statements as needed.

      


      Corporate
Treasury:  Responsible for all cash management activities,
including short-term financing facilities, for all Great Plains Energy entities,
including KCP&L GMO.  Primary services provided include: maintain
an appropriate level of liquidity through supervision of cash management
activities, maintenance of banking relationships and accessing of capital
markets for longer-term funding; issue commercial paper or draw on credit
facilities as needed, keeping an appropriate maturity ladder; conduct
intra-company lending/borrowing to share liquidity within the corporation and
minimize idle balances; oversee issuance of letters of credit and guarantees;
assist Enterprise Risk in monitoring and maintaining credit support; maintain
banking and brokerage relationships, negotiate lines of credit and determine
banking/treasury management services to use; monitor and manage investment
portfolios in compliance with the corporate investment policy; supervise
remittance processing activities in coordination with the Customer Service
division; establish and monitor external remittance processing agents (lockbox,
direct debit, pay-stations, credit/debit cards, etc.) so to offer customers,
reliable, lost cost service; assist in the issuance of capital market
securities; provide input in the determination of desired capital structure
through detailed cash forecasting; assure compliance with Sarbanes-Oxley
requirements and maintenance of proper documentation and controls; provide
information for rate cases, regulatory filings, financings and other
applications; develop and maintain department policies; create and maintain a
corporate wide investment policy; and oversee required accounting and record
keeping to maintain the general ledger and reconcile cash accounts.

      


      Income and Transaction
Taxes:  Responsible for all aspects of maintaining the tax
books and records of all Great Plains Energy entities, including KCP&L
GMO.  Tax services can be categorized in five major functions
providing the primary services as follows:  prepare, review and file
all consolidated and separate federal, state and local income, franchise, sales,
use, gross receipts, fuel excise, property and other miscellaneous tax returns
and payments; research tax issues and questions, including interpretation of
rules and proceedings, develop short and long range planning for all types of
taxes and monitor and review new or proposed tax laws,

       

      
15

      
        

      


      regulations,
court decisions and industry positions; provide tax data for budget estimates
and rate cases, provide reports of tax activity and projected cash requirements
and prepare, review and record tax data for financial reports; supervise and
review tax audit activities; respond to
vendor-related tax matters associated with tax compliance or tax saving
opportunities and process customer tax refunds and adjustments to customer
accounts.

      


      Insurance:  Provide
the following insurance services: place and administer Property and Casualty
insurance policies, including Property, Liability, Workers Compensation and
Management Liability; file and manage Property insurance claims; review
contracts and agreements as needed for adequacy of insurance provisions; issue
Certificates of Insurance and other evidence of coverage; and place and
administer bonds.

      


      Property
Accounting:  Maintain all fixed asset and intangible property
records for all Great Plains Energy entities, including KCP&L
GMO.  Primary services provided include:  set up, maintain
and close capital projects; provide analysis of capital projects; calculate,
record and report AFUDC; maintain fixed assets and accumulated depreciation;
perform month end close processes; support billing of joint owner projects;
support construction projects, including those associated with the Comprehensive
Energy Plan; and perform processes to support day-to-day property accounting
activity and prepare necessary internal and external reports, and support
regulatory filings and depreciation studies.

      


      Regulatory
Accounting:  Serve as the primary liaison between the
Regulatory Affairs and Accounting Services teams and provide Accounting Services
support for all jurisdictional filings and regulatory reporting for the Company,
including KCP&L GMO.  Primary services provided
include:  primary accounting support of rate case process including
accounting adjustment planning and preparation;  primary accounting
support and data request response preparation and review;  support of
rate case process for accounting focused issue areas;  regulatory
reporting preparation and filing for all jurisdictional areas including the
preparation of the annual FERC Form 1 and quarterly FERC Form 3-Q and certain
other monthly, quarterly and annual statistical reports and jurisdictional
surveillance reporting;  development, tracking and reporting of all
merger synergies and transition costs created/incurred across the organization,
as relates to the acquisition of KCP&L GMO;  and maintenance,
review and analysis of critical revenue requirement input components, including
regulatory asset and liability tracking and maintenance, debt assignment process
maintenance and tracking and FERC account activity analysis for rate case
adjustment impacts.

      


      Risk
Management:  Provide the following risk management services on
behalf of KCP&L GMO: credit risk management to include complete credit
reviews for wholesale counterparties;  develop, gather data, manage,
create and maintain financial, reliability and accounting
reports;  develop credit limits for wholesale counterparties and
monitor credit exposure on an ongoing basis; manage collateral requirements with
wholesale counterparties and manage daily margining requirements; review
contracts and agreements for adequacy of credit risk provisions; monitor the
external credit markets and develop policies and procedures to help mitigate
potential credit risks; prepare and file compliance related reporting; market
risk management which includes monitor wholesale commodity transactions and
verify that transaction types are covered by risk control policies, monitor
wholesale commodity transactions and monitor compliance with risk

       

      
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      control
limits; develop market volatility curves for new transaction locations and
commodities within the deal capture system; monitor the wholesale power and gas
markets and develop policies and procedures to help mitigate market risks; and
prepare and file compliance related reporting.

      


      Strategic Planning and
Development:  Provide strategy development and coordination in
the following areas:  manage the development and approval process for
the Company’s long term strategic plans; coordinate strategic planning for major
asset decisions; coordinate internal and public policy positions on renewable
energy, climate change, nuclear power, energy efficiency and other energy
related issues; and develop and manage renewable energy resource strategy and
development of the renewable resource portfolio.

      


      Legal
and Environmental Services

      


      Legal and
Environmental Services is responsible for providing legal advice and
representation and environmental services to KCP&L GMO.  The
following is a representative list of the types of services
provided.

      


      Legal Advice and
Representation:  Advise and represent KCP&L GMO concerning
anticipated and pending litigation matters, contract negotiation and
administration, general corporate matters and regulatory compliance, including
the representation of KCP&L GMO before the MPSC, the FERC, and other
regulatory bodies; provide legal advice and support for securities filings,
financings and their administration; and provide legal advice and support for
other transactions and matters as requested.

      


      Environmental
Services:  Advise KCP&L GMO concerning compliance with all
applicable environmental laws and regulations, including the obtainment of any
requisite environmental permits related to KCP&L GMO’s
operations.

      


      Regulatory
Affairs

      


      Regulatory
Affairs is responsible for all aspects of providing services across the
organization necessary to support the regulatory strategies that achieve
corporate goals and which satisfy the requirements of regulatory policies, rules
and procedures for KCP&L GMO   The following is a
representative list of the types of services provided.

      


      Maintain
a working knowledge state and federal regulatory practices, rules and
regulations, KCP&L GMO tariffs, regulatory affairs activities of other
utilities, and regulatory trends;  contribute to the achievement of
corporate goals by developing regulatory strategies to enhance earnings,
mitigate risk, and guide regulatory and legislative industry restructuring;
provide justification for KCP&L GMO’s need for changes in rate levels by
directing the preparation of filing requirements and responses to Commission
complaint investigations, and by submitting testimony; build relationships with
state and federal regulators, and consumer counsels; represent KCP&L GMO by
serving as a regulatory expert before regulatory commissions, legislatures, and
other public forums; work with the Commission and staff of the Missouri Public
Service Commission, FERC and legislative committees to establish regulatory
policy; oversee economic,

       

      
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      engineering,
and financial analysis in relation to revenues and costs, day-to day
administration of rates, rules, regulations, and tariff filings, review and
strategy of revenue requirements, determination of rate designs, and revenue
verification; contribute to the development of revenue and resource planning by
providing review of cost studies and by participating in the development and
review of KCP&L GMO objectives and strategies; and provide information and
training to other divisions (departments) on regulatory requirements, rates,
rules, and regulations and provide assistance to operational departments in
fulfilling regulatory requirements.

      


      Corporate
Secretary and Governance

      


      These
functions are primarily responsible for ensuring compliance with applicable
corporation laws and regulations, the requirements of organizational documents,
and appropriate corporate governance principles.  These functions are
also responsible for the design, maintenance and administration of director and
officer compensation programs.  The following is a representative list
of the types of services provided:  prepare and maintain Board and
Committee communications, minutes, materials and other corporate documents;
provide advice and analysis to directors and officers on current and emerging
corporate governance matters, and recommend appropriate actions in light of
those matters; prepare and file all documents necessary to maintain the
corporate existence of KCP&L GMO and its subsidiaries; ensure that KCP&L
GMO conducts its business in compliance with applicable corporate legal and
organizational requirements; act as a liaison between management and the Board
of Directors; design, maintain and administer director and officer compensation
programs; and provide corporate compliance program management, support and
training.

      


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