1998 IN REVIEW

                                                         PERCENT
FINANCIAL DATA                    1998         1997       CHANGE

Operating revenues          $124,374,000 $116,165,000         7.1
Net income                   $10,664,000  $10,840,000        (1.6)
Basic earnings per share           $1.32        $1.36        (2.9)
Diluted earnings per share         $1.31        $1.36        (3.7)
Return on average common equity    11.4%        12.2%        (6.6)

COMMON STOCK DATA

Market value-to-book value ratio    1.53         1.57        (2.5)
Market price per common share
  (year-end)                      $17.94       $17.75         1.1
Dividends per share                 $.98         $.96         2.1
Payout ratio                         74%          71%         4.2
Dividend yield                      5.5%         5.4%         1.9
Price/earnings ratio                13.6         13.1         3.8
Number of shareholders (year-end)  5,049        4,651         8.6


<TABLE>
<CAPTION>

SELECTED FINANCIAL INFORMATION

The following table sets forth financial data regarding St. Joseph Light & Power
Company's financial position and operating results. This information should be
read in conjunction with Management's Discussion and Analysis, and the
Consolidated Financial Statements and Notes thereto, appearing elsewhere in this
Annual Report.

(IN THOUSANDS EXCEPT PER SHARE DATA AND PERCENTAGES)

                                   1998      1997      1996      1995      1994
1993
<S>                             <C>       <C>        <C>       <C>       <C>
<C>
STATEMENTS OF INCOME:
Operating revenues              $124,374  $116,165   $95,869   $93,521   $90,782   $88,539
Operating expenses               102,187    93,177    74,941    73,249    70,033    77,853
                                --------  --------   -------   -------   -------   -------
  Operating income                22,187    22,988    20,928    20,272    20,749    10,686
Interest charges, net              6,787     6,480     5,807     5,555     4,460     4,457
Other income                        (847)     (440)     (504)   (1,470)      (32)     (191)
Income taxes                       5,512     6,214     5,268     5,147     5,255    (1,502)
Minority interest                     71      (106)        -         -         -         -
                                --------  --------   -------   -------   -------    ------
  Net income                     $10,664   $10,840   $10,357   $11,040   $11,066    $7,922
                                ========  ========   =======   =======   =======    ======


COMMON STOCK DATA:
(Adjusted to reflect two-for-one stock split in July 1996)

For the year ended December 31-
  Weighted average shares
    outstanding                    8,100     7,989     7,868     7,813     7,884     8,016
  Basic earnings per share         $1.32     $1.36     $1.32     $1.41     $1.40      $.99
  Diluted earnings per share       $1.31     $1.36     $1.32     $1.41     $1.40      $.99
  Dividends per common share        $.98      $.96      $.94      $.92      $.90      $.88
  Return on average common equity  11.4%     12.2%     12.4%     13.9%     14.4%     10.4%

As of December 31-
  Market price per common share   $17.94    $17.75    $15.38    $17.75    $14.25    $14.50
  Book value per common share     $11.76    $11.34    $10.87    $10.42     $9.93     $9.54


LIQUIDITY AND CAPITAL RESOURCES DATA:
 Capital-
  Expenditures, excluding AFUDC  $16,442   $14,346   $14,318   $21,781   $12,224   $12,483
  Percent of expenditures financed
    internally from operations       79%       79%       92%       58%       77%       86%
  AFUDC as a percent of net income    4%        2%        5%        4%        2%        3%
 Capitalization ratios-
  Common equity                      57%       57%       54%       53%       59%       59%
  Long-term debt (excluding
    current maturities)              43%       43%       46%       47%       41%       41%
Ratio of earnings to fixed
  charges                           3.23      3.47      3.44      3.63      4.39      2.33
Total assets                    $251,255  $243,769  $227,250  $219,330  $199,699  $191,690
Long-term obligations            $76,417   $71,837   $76,371   $75,612   $55,627   $55,642

</TABLE>

COMMON STOCK MARKET PRICES
                      High      Low
1997 First quarter  $16.625   $15.000
     Second quarter  17.250    15.375
     Third quarter   16.750    15.563
     Fourth quarter  17.938    16.313

1998 First quarter  $18.625   $17.250
     Second quarter  19.000    18.000
     Third quarter   19.375    17.813
     Fourth quarter  19.125    17.563


DIVIDENDS PAID ON COMMON STOCK

1997 First quarter   $.24
     Second quarter   .24
     Third quarter    .24
     Fourth quarter   .24
                     

1998 First quarter  $.245
     Second quarter  .245
     Third quarter   .245
     Fourth quarter  .245


MANAGEMENT'S DISCUSSION AND ANALYSIS

GENERAL
In Management's Discussion and Analysis, we explain the general
financial condition and operating results of St. Joseph Light &
Power Company, a public utility, its wholly owned subsidiary,
SJLP Inc. and its subsidiary, Percy Kent Bag Co., Inc. (Percy
Kent). As you read Management's Discussion and Analysis, it may
be helpful to refer to our Consolidated Statements of Income,
which present the results of operations for 1998, 1997 and 1996.

We are engaged primarily in the generation and distribution of
electric energy, serving approximately 62,000 customers in
northwest Missouri. We also sell natural gas in 15 communities in
the northern part of our service area and industrial steam to six
customers in St. Joseph. SJLP Inc. was formed in September 1996
to pursue investments in non-utility areas. Effective May 31,
1997, SJLP Inc. acquired a controlling interest in Percy Kent, a
manufacturer of multiwall and small paper bags, primarily for
food products, agricultural products, specialty chemicals, pet
foods and other consumer packaging companies throughout the
United States. Neither SJLP Inc.'s nor Percy Kent's operations
were material to St. Joseph Light & Power Company's consolidated
financial position or results of operations.

About two-thirds of our approximately 350 employees are covered
under physical and clerical bargaining agreements which expire
July 31, 1999. We expect a new contract will be agreed upon and
will not have a significant negative impact on the Company.
Substantially all of Percy Kent's manufacturing labor force is
covered by a collective bargaining agreement, which expires in
March 2000.

RESULTS OF OPERATIONS
1998 vs. 1997

EARNINGS - Diluted earnings per share totaled $1.31 in 1998,
compared with 1997 earnings of $1.36 per share. The earnings
decrease was primarily the result of increases in per unit
purchased power costs.

ELECTRIC REVENUES - 1998 electric operating revenues were $89.7
million, an increase of 3% from 1997. The growth in 1998 revenues
was primarily due to increased retail sales.

Retail sales totaled 1.64 million mwh in 1998, a 4% increase from
the 1.58 million mwh reported in 1997. Warmer summer weather and
the continued strong economy boosted retail sales to all three
customer classes - residential, 2.1%; commercial, 4.7%; and
industrial 5.8%.

We entered into an agreement with another utility in which we
agreed to transfer energy to them in 1998 in exchange for
receiving approximately the same amount of energy from them in
1999. Participation in this agreement reduced the amount of
energy available for resale, resulting in a 42% decrease in sales
for resale volumes.

INDUSTRIAL STEAM REVENUES - Industrial steam revenues increased
1.5% from 1997's level. Sales in 1998 increased 3% as a result of
increased sales to a major customer.

NATURAL GAS REVENUES - Gas revenues declined 20% from 1997, as
the result of a 14% decrease in retail sales and transportation
services due to reduced heating requirements and lower per unit
gas prices which are passed on to customers.

MANUFACTURING REVENUES - The operations of Percy Kent are
reflected in manufacturing revenues and cost of goods sold, which
increased 38% and 34%, respectively. The increases are due to the
inclusion of a full year of operating results in 1998 as compared
to only seven months in 1997, partially offset by the elimination
of lower margin contracts.

FUEL AND PURCHASED POWER - Total energy costs (fuel and purchased
power for system energy and resale) were $29.9 million for 1998,
$2.4 million more than the 1997 expense. This increase was the
result of higher per unit costs for purchased power, increased
system requirements, and more expensive replacement energy
required by outages at the Iatan generating station, partially
offset by lower resale requirements.

Per unit fuel costs were slightly higher in 1998 at $1.099 per
million Btu, up from $1.097 per million Btu in 1997, due to
changes in the mix of fuels and generating units utilized. Of the
total fuel burned in 1998, 92% was coal, similar to the pattern
of recent years. The cost of coal burned decreased from $1.002
per million Btu in 1997 to $.979 per million Btu in 1998.
The coal-fired Iatan plant provided approximately 50% of our
overall energy needs in 1998, a decrease from 52% in 1997, due to
unscheduled outages. A Wyoming mine supplies low-sulfur coal to
the plant under a 20-year contract, which expires in 2003. The
coal is delivered by rail under an agreement which extends
through 2000.

The Lake Road units supplied 25% of our energy needs, down
slightly from 26% in 1997. Per unit fuel costs at Lake Road were
up less than 1% in 1998 from 1997. Since modifying the plant's
main generating units to burn lower cost low-sulfur coal (see
"Environmental Issues"), utilization of the Lake Road plant has
increased in 1997 and 1998 over prior years. Such modifications
and enhancements to optimize performance are continuing.

We met 25% of our energy needs through purchased power
arrangements in 1998 compared to 22% in 1997, reflecting the
purchase of replacement power for Iatan outages. Purchased power
fixed charges for firm and peaking capacity were $2.7 million for
1998 and $2.4 million for 1997.

Per unit costs of purchased power increased almost 18% in 1998.
Along with many utilities in the midwest, we saw the per unit
costs for purchased power reach unprecedented levels during one
week in June. The situation was a result of hot, humid weather
and reduced availability of transmission and generation
facilities, placing the region's electric supply under stress. We
expect this trend of higher prices for purchased energy to
continue.

OTHER OPERATIONS - Other operations expenses for 1998 increased
$1.3 million in comparison to 1997. The increase is primarily the
result of the inclusion of a full year of Percy Kent's expenses
and increased Year 2000 expenses, partially offset by lower
benefits costs for the year.

MAINTENANCE - Consistent with prior years, maintenance expenses
remained relatively stable in 1998, increasing only $.5 million
over 1997, due to increased Lake Road maintenance costs. The
balanced expenses continue to reflect our efforts to schedule
maintenance outages in a way which minimizes both maintenance and
generation replacement costs.

INTEREST CHARGES - The increase in interest charges is primarily
due to the inclusion of a full year of Percy Kent's expenses.

1997 vs. 1996

EARNINGS - Earnings per share totaled $1.36 in 1997, compared
with 1996 earnings of $1.32. The earnings increase was primarily
the result of higher electric sales and lower per unit costs.

ELECTRIC REVENUES - Electric operating revenues for 1997 were
$86.9 million, an increase of 4% from 1996. The growth in 1997
revenues was primarily due to increased retail sales and sales
for resale.

Retail sales totaled 1.58 million mwh in 1997, a 3% increase from
the 1.53 million mwh reported in 1996. Despite moderate summer
weather, the strong economy boosted retail sales to all three
customer classes _ residential, 1.6%; commercial, 4.0%; and
industrial 4.5%.

Sales for resale volume increased 67% as we substantially
increased our generation for resale, as a result of our costs
becoming more competitive with regional suppliers. Per unit costs
at our Lake Road plant have decreased substantially due to
burning a blend of lower-sulfur coal (see "Fuel and Purchased
Power" and "Environmental Issues").

INDUSTRIAL STEAM REVENUES - Industrial steam sales in 1997
decreased 5%, while revenues decreased 4% from 1996's level,
primarily as a result of reduced sales to a major customer.

NATURAL GAS REVENUES - Gas revenues declined 3% from 1996, due to
a 9% decrease in retail sales and transportation services to
large commercial and industrial customers, partially offset by
higher per unit gas prices which are passed on to customers.

MANUFACTURING REVENUES - Manufacturing revenues and cost of goods
sold reflect the acquisition of Percy Kent, whose operating
results from June through December 1997 are included in our 1997
income statement.

FUEL AND PURCHASED POWER - Total energy costs were $27.5 million
for 1997, $.3 million less than the 1996 expense. This decrease
was the result of lower per unit costs and lower steam sales,
partially offset by increased electric system and resale
requirements.

Per unit costs were lower in 1997 at $1.097 per million Btu, down
from $1.131 per million Btu in 1996. Consistent with recent
years, the use of coal accounted for 94% of the total fuel burned
in 1997. The cost of coal burned decreased from $1.047 per
million Btu in 1996 to $1.002 per million Btu in 1997.

The coal-fired Iatan plant provided approximately 52% of our
overall energy needs in 1997, a decrease from 58% in 1996, due to
both unscheduled and scheduled outages throughout the year.

The Lake Road units supplied 26% of our energy needs, up from 16%
in 1996, as a result of substantially lower per unit fuel costs.

We met 22% of our energy needs through purchased power
arrangements in 1997 compared to 26% in 1996. Purchased power
fixed charges for firm and peaking capacity were $2.4 million for
1997 and $1.3 million for 1996.

OTHER OPERATIONS - Expenses of other operations for 1997
increased $3.2 million in comparison to 1996. The increase is
primarily the result of the inclusion of Percy Kent's expenses.

MAINTENANCE - Maintenance expenses for 1997 were $.5 million less
than for 1996. The balanced expenses in both periods resulted
from our attempt to schedule maintenance outages to minimize both
maintenance and generation replacement expenses.

INTEREST CHARGES - The increase in interest charges on long-term
debt, notes payable, and other interest is a result of interest
expense on Percy Kent's borrowings.

FUTURE OUTLOOK

LIQUIDITY AND CAPITAL RESOURCES - Our total authorized capital
stock includes 25 million shares of common stock, four million
shares of cumulative preferred stock, and two million shares of
preference stock. Common equity was 57% of total capitalization
in 1998 and 1997 and 54% in 1996.

Financial coverages are at levels in excess of those required for
the issuance of debt and preferred stock. St. Joseph Light &
Power Company currently holds a secured debt rating of A and an
unsecured debt rating of A- from Standard & Poors. At year-end,
we had $373,000 in cash and temporary investments.

Our short-term financing requirements are satisfied through
borrowings under unsecured lines of credit maintained with banks.
At December 31, 1998, we had available committed lines of credit
of $3.5 million and over $7 million available under uncommitted
lines.

Percy Kent also has a revolving loan agreement through a finance
company which provides them with up to $4.5 million of available
credit. At December 31, 1998, the outstanding borrowings under
this loan agreement, in the amount of $2.1 million, were
classified as long-term in our balance sheet.

Cash generated from operations remains strong. Over the last
three years, operating cash flows have been $20.6 million, $18.6
million, and $21.2 million, respectively. Our ratio of earnings
to fixed charges was 3.23 for 1998.

We project capital expenditures (excluding allowance for funds
used during construction and including non-utility investments)
for the five-year period ending in 2003 to be approximately $71.3
million. We expect to finance these expenditures primarily
through internally generated funds supplemented by external
financing as necessary.

The combined aggregate amount of maturities and payments for long-
term obligations and for operating leases for the next five years
is $10.6 million. See Note (b), Long-Term Debt, in Consolidated
Statements of Capitalization and Note 7, Commitments and
Contingencies, in Notes to Consolidated Financial Statements.

IMPACT OF ACCOUNTING STANDARDS CHANGES - There were no accounting
changes in 1998, 1997 or 1996 that had a material impact on the
financial statements.

MARKET RISK - We are exposed to various market risks in our
business operations. Commodity market prices are one such risk as
Missouri does not have an energy cost adjustment to allow for
current recovery of changes in the cost of fuel or purchased
power.

We have entered into a long-term, fixed-price contract to meet
our fuel needs at the coal-fired Iatan generating plant to
mitigate our exposure to market price fluctuations. Coal for the
Lake Road plant, approximately $8.8 million in 1998, is mainly
purchased on the spot market. The availability and cost of rail
transportation used to deliver coal to our generating facilities
are additional market risks we face. Again, we have long-term
rail service contracts for both Iatan and Lake Road to help
reduce our risk.

We are also exposed to price risk when we purchase energy to meet
our system requirements throughout the year. We have been able to
partially reduce our exposure to that risk for the approximately
400,000 mwh of energy purchased annually by entering into cost-
based contracts for approximately half of those purchases. To
reduce this exposure during the scheduled maintenance outage at
Iatan in early 2000, we have entered a fixed-price contract to
purchase replacement energy. Changes in spot market prices for
energy, similar to those experienced last summer, can have a
significant negative impact (see 1998 vs. 1997 "Fuel and
Purchased Power"). We also have the ability to reduce our need
for spot market purchases by placing into service higher cost
generating units when market prices exceed the cost of the units'
operation. We are required to maintain certain levels of capacity
for which long-term, fixed price contracts are in place (see
"Capacity").

Commodity market prices for natural gas also represent a risk.
However, changes in the price of natural gas purchased for resale
are passed on to our customers.

Interest and inflation rates also pose risks to our financial
position. We have limited our exposure to interest rate risk by
maintaining the majority of our debt capitalization in long-term,
fixed-rate instruments. During the year, we had weighted average
short-term debt outstanding, subject to variable market rates, of
$1,169,000.

Under the ratemaking practices followed by the PSC, only
historical costs are recoverable in revenues. Assuming adequate
and timely rate relief, we will recover the increases in cost of
service caused by inflation.

COMPETITION/DEREGULATION - The 1992 Energy Policy Act (the Act)
promotes competition in the way electricity is transmitted and
marketed. The Act provides for increased competition in the
wholesale electric market by permitting the Federal Energy
Regulatory Commission to order third party access to utilities'
transmission systems and by liberalizing the rules of generating
facility ownership. The opening of the nation's transmission
system has increased the size of the market from which we buy and
sell firm and non-firm (wholesale) energy. This will increase the
options for expanding markets. We also believe that increased
transmission access will increase the demand for available
wholesale energy supply and result in higher purchased energy
costs.

In March 1997, the PSC opened a docket to investigate
restructuring in the electric utility industry in the state of
Missouri. The Retail Electric Competition Task Force, comprised
of representatives from various industry groups, was established
and charged with preparing comprehensive reports for the PSC. The
reports were prepared in 1998 based upon a thorough investigation
of retail wheeling of electricity and related issues, and
included recommendations of how Missouri should implement retail
electric competition in the event that legislation is enacted
which authorizes it.

Based on the PSC docket and deregulation plans implemented or
considered by other states, we believe it is most likely that the
generation portion of the business could become unregulated and
that the transmission and distribution functions will continue to
be regulated. Although bills have been introduced in the 1999
session of the legislature, observers believe that 2000 is the
earliest a bill will be passed, which would defer retail
competition in Missouri until 2001 or later.

If retail wheeling were to be implemented, we believe that our
current low prices and the excellent power supply options
available to us to meet future requirements will permit us to
remain competitive in comparison with other regional suppliers.

While state law currently prohibits competing with rural electric
cooperatives for existing customers, competition remains for new
customers, especially industrial, in the rural areas of our
service territory. To meet the competition for new large
customers and encourage businesses to locate in our service
territory, we offer an economic development incentive rate for
customers meeting certain criteria.

We are taking a proactive stance to meet the increasing
competition within the industry. We continually review our
strategic plan, which focuses on customer-oriented activities
designed to provide high levels of customer satisfaction while
continuing to provide low-priced energy.

EFFECTS OF REGULATION - We are subject to rate regulation by the
PSC. Rates are established to allow us an opportunity to recover
our costs and earn a return on our investment. We currently apply
Statement of Financial Accounting Standards (SFAS) No. 71,
"Accounting for the Effects of Certain Types of Regulation,"
which recognizes the economic effects of rate regulation. In the
event we determine that we no longer meet the criteria for
following SFAS No. 71, the accounting impact would be a non-cash
charge to operations of an amount that could be material.
Criteria that give rise to the discontinuance of SFAS No. 71
include, (1) increasing competition that restricts our ability to
establish prices to recover specific costs, and (2) a significant
change in the manner in which rates are set by regulators from
cost-based regulation to another form of regulation. We
continually review the applicability of SFAS No. 71 based on the
current regulatory environment.

Based on our current evaluation of the various factors and
conditions that are expected to impact future cost recovery (see
"Competition/Deregulation"), we believe that our regulatory
assets, including those related to generation, are probable of
future recovery and that the utilization of SFAS No. 71 continues
to be appropriate.

If the generation portion of the business is deregulated, all or
a portion of its net regulatory assets, which are approximately
$2.3 million at December 31, 1998, are expected to be recovered
from ratepayers through a charge collected by the regulated
businesses.

ENVIRONMENTAL ISSUES - We are subject to various environmental
regulations, including those related to air and water quality,
polychlorinated biphenyl, ash removal, underground storage tanks,
and asbestos. Routine testing and maintenance programs have been
put in place to comply with these regulations.

We continue to plan and implement projects to meet the Phase II
acid deposition control provisions of the Clean Air Act
Amendments of 1990 (CAAA), which establish standards for electric
utilities to reduce certain emissions from coal-fired generating
stations. Final compliance with this legislation becomes
effective in 2000. Missouri's air quality law is in compliance
with, and does not contain requirements that are more stringent
than, the federal legislation.

While the Iatan plant meets the Phase II requirements, the Lake
Road plant is undergoing modifications in order to meet the
stricter standards. Alterations to the plant's main generating
units have been made, an electrostatic precipitator was modified,
and a continuous emissions monitoring system and flue gas
conditioning system were installed to allow for the use of low-
sulfur coal. Modifications to the ash handling system and rail
modifications which allow coal deliveries by unit train have also
been made.

We anticipate total future capital expenditures of approximately
$4.3 million through 2000 related to the CAAA requirements, for
coal handling equipment modifications, exhaust stack
replacements, boiler modifications, and additional continuous
emissions monitoring equipment.

The Missouri Department of Natural Resources (MDNR) has found
that the ground-level concentration of sulfur-dioxide (SO2) near
the Lake Road plant exceeded the limit set by the National
Ambient Air Quality Standards (NAAQS) twice in 1997 and once in
1998. The maximum allowed is once per year. We have conducted
dispersion air modeling to investigate the problem and identify
appropriate SO2 emission control measures. Based on the modeling,
we have provided MDNR with a proposal to achieve NAAQS
compliance. MDNR has not yet responded to our proposal; however,
we have commenced implementation of the plan to assure that no
further violations occur.

The United States Environmental Protection Agency (EPA) has
recently issued a NOx State Implementation Plan (SIP) Call under
which Missouri, twenty-one other eastern states, and the District
of Columbia are required to revise their SIPs to establish more
stringent emission standards for nitrogen oxides (NOx). This is
being done primarily to help the northeastern states meet the
NAAQS for ozone. The EPA has determined that the transport of NOx
(a precursor of ozone) from neighboring states is the major cause
of ozone non-compliance in the northeastern states. We have
joined with five other western Missouri utilities, other states,
and private organizations in a lawsuit challenging the EPA's SIP
Call. Should the legal challenge fail, some of our units will be
required to meet lower NOx emission standards beginning in 2003.
The full extent of how we will be affected and the related cost
of implementation are not yet known.

The Kyoto Protocol to the United Nations global warming treaty
mandates that the U.S. reduce its overall greenhouse gas
emissions 7% below 1990 levels over the period 2008-2012. Most
observers believe that it will not be ratified by the U.S.
Congress in its present form. A study by Energy Security Analysis
Inc. indicates that the treaty could cost the utility industry
$10 billion annually by 2010, primarily in higher fuel costs. We
cannot currently estimate the impact of the treaty; however, it
could have a significant continuing impact on our results of
operations and financial position.

CAPACITY - Our high-voltage interconnections with other utilities
and membership in power pools provide access to capacity and
energy for emergency and economy purposes and for longer term
capacity transactions. We are a member of the Mid-Continent Area
Power Pool (MAPP) and the Western Systems Power Pool (WSPP).

Through MAPP, we can access over 70 utilities, marketers, and
exempt wholesale generators across the country for both purchases
and sales of energy and capacity, as well as for transmission
services. Over 150 utilities, marketers, and exempt wholesale
generators in the western states are accessible through WSPP.

In July 1996, we signed a long-term contract to purchase both
capacity and energy beginning in mid-2000 and running through mid-
2011. In the first year of the contract, we will receive 60 mw of
electricity. This will increase by 10 mw each year until it
reaches 100 mw in 2004 and remains at that level for the
remainder of the contract.

We also have contracts to purchase an additional 65 mw of
generating capacity from regional suppliers in 1999.

Fixed charges under these contracts total $35 million for the
five years ending in 2003. We believe that these contracts and
power pool memberships will enable us to economically provide for
the growing demand in our service territory.

IMPACT OF THE YEAR 2000 ISSUE -  We are currently involved in an
ongoing project to identify, evaluate, and implement
modifications to computer hardware, software, and other equipment
required for the Year 2000 issue. The Year 2000 problem is the
result of computer programs being written using two digits rather
than four to define the applicable year. Computer programs that
have date-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. Additionally, other
equipment may have microchips with embedded logic, which may fail
to function correctly after December 31, 1999, resulting in
system failure or miscalculations causing disruptions of
operations.

We have utilized, and will continue to utilize, both internal and
external resources to inventory, reprogram or replace, and test
hardware, software, and embedded systems for Year 2000
modifications. In 1997, we developed and implemented a written
plan for Year 2000 remediation, and substantially completed the
plan in 1998, with additional testing scheduled for 1999.  At
December 31, 1998, we had completed the assessment phase of the
project and approximately 90% of the remediation and testing
procedures necessary to achieve Year 2000 compliance. Costs
incurred through December 31, 1998 for remediation efforts
related to Year 2000 issues were approximately $400,000,
excluding the costs of redeployment of existing resources.
Additional costs are expected to be less than $200,000 over the
next year and will be expensed as incurred.

We anticipate that $100,000 of the remaining planned expenditures
will be utilized for non-information technology costs and the
remaining $100,000 will be utilized for testing of the various
systems and remediation of additional items which may be
discovered during final testing.

Because of the nature of the Year 2000 issue and the varying
degrees of exposure and complexities, some business units are
further along in their Year 2000 readiness than others. All
business units have completed their assessment phase of Year 2000
readiness, have developed or are developing contingency plans,
and are in the remediation and testing stages of Year 2000
readiness.  Each of our business units is at least 90% finished
with its Year 2000 project.

The costs of the project and the timing for completion of the
Year 2000 modifications are based on our best estimates, which
were derived utilizing numerous assumptions of future events,
including the continued availability of certain resources, the
ability to locate and correct all relevant computer codes, and
similar uncertainties.  However, there can be no guarantee that
these estimates will be achieved and actual results could differ
materially from those plans.

We have identified the following major areas of risk related to
Year 2000: 1) vendors and/or suppliers, 2) telecommunications,
and 3) generation and power supply. We are addressing these risks
in our contingency planning, and have implemented, or will be
implementing, action plans in advance to mitigate these potential
risks. The most reasonably likely worst case scenarios we
anticipate are: the partial interruption of rail service
affecting coal deliveries to our generating plants; partial loss
of generating capacity in the region for brief periods of time;
and the partial interruption of telecommunication services
affecting our ability to communicate internally and/or with our
customers and other business partners.

We consider vendors and suppliers a risk because of the lack of
control we have over their operations. We have contacted vendors
and suppliers critical to our operations for information
pertaining to their Year 2000 readiness. Although we have found
no specific exposure related to the Year 2000 issue for third
parties' failure to remediate their own Year 2000 problems, there
can be no guarantee that the systems of other companies on which
our systems rely will be timely converted, or that a failure to
convert by another company, or a conversion that is incompatible
with our systems, would not have a material adverse effect on our
operations.

We consider telecommunications a risk because it performs a
critical function in a large number of our business processes and
plant control functions. Our contingency plans provide for the
availability of alternative methods of communication such as
radios, cellular phones, and satellite phones.

We consider our plant generation and power supply a risk due to
the complexity of the interactions with external systems beyond
our control. Our contingency planning includes placing in service
generating units, which would normally not be in service, to
provide reserves in the event of an unexpected loss of some of
the generation capacity of others in the region.  In addition, we
generally maintain a 60-day supply of coal at our generation
facilities and are considering increasing this level to mitigate
the effect of any temporary interruption of rail transportation.
Propane and diesel fuel storage will be scheduled as backup in
case of a natural gas interruption.

Because of the unprecedented nature of the Year 2000 issue and
its effects, the success of related remediation efforts will not
be fully determinable until Year 2000 and thereafter. All
business units have developed or are developing contingency plans
to cover essential business functions and anticipated possible
Year 2000 related failures. These plans will continually be
reviewed and updated.

We presently believe that, with modifications to existing and
conversions to new software, hardware, and embedded systems, the
Year 2000 issue can be mitigated with no significant adverse
effect on customers or disruption to business operations. If such
modifications are not completed, the Year 2000 issue could have a
material adverse effect on our operations.

PROPOSED MERGER - On March 4, 1999, we entered into an Agreement
and Plan of Merger to form a strategic business combination with
UtiliCorp United Inc. Under terms of the agreement, each share of
our common stock, valued at $23.00 per share, will be exchanged
for UtiliCorp United Inc. common stock. The transaction is
subject to several closing conditions, including approval by our
shareholders and approval by a number of state and federal
regulatory agencies.  Approval by UtiliCorp United Inc.
shareholders is not required. We expect the merger to be
completed in mid-2000.

FORWARD-LOOKING INFORMATION - This report contains information
based on projections and estimates made by management, which
involve risks and uncertainties. Some of the important factors
which could cause actual results to differ materially from those
anticipated include, but are not limited to, future national and
regional economic conditions, inflation rates, regulatory changes
(including, but not limited to, ongoing state and federal
activities with respect to electric utility deregulation,
competition, and restructuring), weather conditions, financial
market conditions, interest rates, Year 2000 issues, future
business decisions, and other uncertainties, all of which are
difficult to predict and many of which are beyond our control.


CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31         1998          1997         1996

OPERATING REVENUES:
  Electric utility           $89,678,000  $86,910,000  $83,499,000
  Other utility               10,876,000   11,948,000   12,370,000
  Manufacturing               23,820,000   17,307,000            -
                             -----------  -----------  -----------
                             124,374,000  116,165,000   95,869,000
                             -----------  -----------  -----------

OPERATING EXPENSES:
  Production fuel             19,964,000   19,166,000   17,821,000
  Purchased power              9,896,000    8,307,000    9,911,000
  Gas purchased for resale     2,481,000    3,456,000    3,376,000
  Manufacturing cost of goods
    sold                      19,868,000   14,864,000            -
  Other operations            22,854,000   21,596,000   18,402,000
  Maintenance                  8,472,000    7,976,000    8,446,000
  Depreciation                11,535,000   11,045,000   10,474,000
  Taxes other than income
    taxes                      7,117,000    6,767,000    6,511,000
                             -----------  -----------  -----------
                             102,187,000   93,177,000   74,941,000
                             -----------  -----------  -----------
OPERATING INCOME              22,187,000   22,988,000   20,928,000

INTEREST CHARGES, NET:
  Long-term debt               6,057,000    6,182,000    5,850,000
  Notes payable                  562,000      181,000            -
  Other                          320,000      192,000      172,000
  Allowance for borrowed funds
    used during construction    (152,000)     (75,000)    (215,000)
                              ----------   ----------   ----------
                               6,787,000    6,480,000    5,807,000
                              ----------   ----------   ----------

OTHER INCOME                     847,000      440,000      504,000
                              ----------   ----------   ----------

INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST         16,247,000   16,948,000   15,625,000

INCOME TAXES                   5,512,000    6,214,000    5,268,000
                              ----------   ----------   ----------

INCOME BEFORE MINORITY
INTEREST                      10,735,000   10,734,000   10,357,000

MINORITY INTEREST IN INCOME
  (LOSS) OF SUBSIDIARY            71,000     (106,000)           -
                              ----------   ----------   ----------

NET INCOME                   $10,664,000  $10,840,000  $10,357,000
                             ===========  ===========  ===========

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING             8,099,928    7,988,714    7,868,169

BASIC EARNINGS PER SHARE           $1.32        $1.36        $1.32
                                   =====        =====        =====

DILUTED EARNINGS PER SHARE         $1.31        $1.36        $1.32
                                   =====        =====        =====



The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.


CONSOLIDATED BALANCE SHEETS

DECEMBER 31                               1998           1997

-ASSETS-
PROPERTY, PLANT AND EQUIPMENT:
  Electric utility plant              $324,621,000   $309,028,000
  Other                                 20,377,000     18,865,000
                                      ------------   ------------
                                       344,998,000    327,893,000
  Less - Reserves for depreciation    (167,112,000)  (157,127,000)
                                      ------------   ------------
                                       177,886,000    170,766,000
  Construction work in progress          3,669,000      6,086,000
                                      ------------   ------------
                                       181,555,000    176,852,000

OTHER INVESTMENTS                        4,922,000      3,477,000

CURRENT ASSETS:
  Cash and cash equivalents                371,000        350,000
  Temporary investments                      2,000      1,649,000
  Accounts receivable, net of
    reserves of $282,000 and $270,000   10,160,000      9,820,000
  Accrued utility revenue                3,674,000      3,287,000
  Manufacturing inventories, at
    first-in first-out cost              2,911,000      3,570,000
  Fuel, at average cost                  3,366,000      3,008,000
  Materials and supplies, at
    average cost                         5,674,000      5,778,000
  Prepayments and other                  1,900,000      1,627,000
                                         ---------      ---------
                                        28,058,000     29,089,000
DEFERRED CHARGES:
  Debt expense, being amortized
    over term of debt                    1,349,000      1,571,000
  Lease payments receivable              3,166,000      3,289,000
  Prepaid pension expense               16,389,000     13,572,000
  Regulatory assets                     13,843,000     13,940,000
  Other                                  1,973,000      1,979,000
                                      ------------   ------------
                                        36,720,000     34,351,000
                                      ------------   ------------
                                      $251,255,000   $243,769,000
                                      ============   ============

-CAPITALIZATION AND LIABILITIES-
CAPITALIZATION:
  Common stock                         $33,816,000    $33,816,000
  Retained earnings                     73,450,000     70,714,000
  Other paid-in capital                  1,877,000      1,251,000
  Less - Treasury stock                (13,338,000)   (14,613,000)
                                      ------------   ------------
                                        95,805,000     91,168,000
  Long-term debt                        73,515,000     68,744,000
                                      ------------   ------------
                                       169,320,000    159,912,000

MINORITY INTEREST IN
CONSOLIDATED SUBSIDIARY                  1,369,000      1,298,000

CURRENT LIABILITIES:
  Outstanding checks in excess
    of cash balances                     3,512,000      3,288,000
  Current maturities of long-term
    obligations                          1,213,000      8,628,000
  Accounts payable                       9,988,000     11,400,000
  Notes payable                          7,290,000      2,621,000
  Accrued income and general taxes         823,000        735,000
  Accrued interest                       1,923,000      1,960,000
  Accrued vacation                       1,233,000      1,154,000
  Other                                    679,000        565,000
                                        ----------     ----------
                                        26,661,000     30,351,000

NON-CURRENT LIABILITIES AND DEFERRED CREDITS:
  Capital lease obligations              2,902,000      3,093,000
  Deferred income taxes                 31,822,000     29,635,000
  Investment tax credit                  3,689,000      4,096,000
  Accrued claims and benefits            1,833,000      1,744,000
  Deferred interest                      2,138,000      2,255,000
  Regulatory liabilities                 8,440,000      8,971,000
  Other                                  3,081,000      2,414,000
                                        ----------     ----------
                                        53,905,000     52,208,000
COMMITMENTS AND CONTINGENCIES (NOTE 7)
                                      ------------   ------------
                                      $251,255,000   $243,769,000
                                      ============   ============



The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.


CONSOLIDATED STATEMENTS OF CAPITALIZATION
DECEMBER 31                               1998           1997
COMMON EQUITY: 
  Common stock - authorized 25,000,000
    shares,without par value; issued
    9,252,748 shares                   $33,816,000    $33,816,000 
  Retained earnings                     73,450,000     70,714,000
  Other paid-in capital (principally
    gain on issuance of treasury stock)  1,877,000      1,251,000 
  Less - Treasury stock, at cost,
    1,105,821 and 1,211,110 shares     (13,338,000)   (14,613,000)
                                      ------------   ------------
                                        95,805,000     91,168,000

LONG-TERM DEBT: 
  First mortgage bonds -  9.44% series
    due February 1, 2021                22,500,000     22,500,000
  Unsecured pollution control
    revenue bonds - 5.85% series due
    February 1, 2013                     5,600,000      5,600,000
  Unsecured medium-term notes -
    5.77% due December 8, 1998                   -      5,000,000
    7.13% due November 29, 2013          1,000,000      1,000,000
    7.16% due November 29, 2013          9,000,000      9,000,000
    7.17% due December 1, 2023           7,000,000      7,000,000
    7.33% due November 30, 2023          3,000,000      3,000,000
    8.36% due March 15, 2005            20,000,000     20,000,000
                                      ------------   ------------
                                        40,000,000     45,000,000
  Other long-term debt                   6,628,000      4,272,000
                                      ------------   ------------
                                        74,728,000     77,372,000
  Less - Current maturities             (1,213,000)    (8,628,000)
                                      ------------   ------------
                                        73,515,000     68,744,000
                                      ------------   ------------
    Total capitalization              $169,320,000   $159,912,000
                                      ============   ============
Notes:(a) Common Stock:
At December 31, 1998, there were 8,146,927 shares of common
stock outstanding.

St. Joseph Light & Power Company (the Company) has an Automatic
Dividend Reinvestment and Optional Cash Payment Plan. Under this
Plan, common shares may be newly issued, reissued or purchased on
the open market. At December 31, 1998, the Company had 326,811
shares of common stock reserved for this Plan. In addition, the
Company has 447,884 shares of stock reserved for its stock-based
compensation plans. Refer to Note 3 in the Notes to Consolidated
Financial Statements.

At December 31, 1998, there were 8,146,927 Rights outstanding.
Each Right entitles the holder thereof to purchase one-half share
of common stock at a price of $35 per one-half share. The Rights,
which expire on December 4, 2006, have no voting rights.

The Rights are exercisable in the event of certain attempted
business acquisitions. Exercising the Rights will cause
substantial dilution to a person or group attempting to acquire
the Company on terms not approved by the Company's board of
directors. Refer to Note 10 in the Notes to Consolidated
Financial Statements.

(b) Long-Term Debt:
The first mortgage bonds are secured equally and ratably by a direct lien on
substantially all fixed property and franchises now owned or hereafter
acquired.

Other long-term debt includes notes payable to banks and finance
companies which are payable through 2003 and bear interest at
rates ranging from 9.635% to 9.75% and prime plus 1.5% to prime
plus 1.75%. These notes are collateralized by substantially all
of the assets of Percy Kent Bag Co., Inc. (Percy Kent). Refer to
Note 1 in the Notes to Consolidated Financial Statements.

The combined aggregate amount of maturities and unfulfilled
sinking fund requirements for the next five years are as follows:

     1999      $1,213,000
     2000       4,951,000
     2001         419,000
     2002       1,155,000
     2003       1,140,000
               ----------
               $8,878,000
               ==========

(c) Cumulative Preferred Stock:
Cumulative preferred stock of 4,000,000 shares, without par
value, is authorized.

(d) Preference Stock:
Preference stock of 2,000,000 shares, without par value, is authorized.

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

YEARS ENDED DECEMBER 31           1998        1997        1996
BALANCE AT BEGINNING OF YEAR $70,714,000 $67,533,000  $64,560,000
NET INCOME                    10,664,000  10,840,000   10,357,000
                             ----------- -----------  -----------
                              81,378,000  78,373,000   74,917,000
LESS - Dividends on common
  stock of $.98, $.96 and
  $.94 per share              (7,928,000) (7,659,000)  (7,384,000)
                            ------------ -----------  -----------
BALANCE AT END OF YEAR       $73,450,000 $70,714,000  $67,533,000
                            ============ ===========  ===========

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.


CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31          1998        1997        1996
CASH FLOWS FROM OPERATING ACTIVITIES: 
  Net income                 $10,664,000 $10,840,000  $10,357,000
  Adjustments to reconcile
    net income to net cash
    provided by operating
    activities:
      Depreciation            12,346,000  11,440,000   10,474,000
      Pension expense         (2,228,000) (1,961,000)  (1,921,000)
      Deferred taxes and
        investment tax credit    812,000     402,000      768,000
      Allowance for equity
        funds used during
        construction            (249,000)   (129,000)    (316,000)
  Net changes in working capital
    items not considered elsewhere:
      Accounts receivable and
        accrued utility revenue (727,000)    591,000     (207,000)
      Inventories                405,000    (255,000)   1,008,000
      Accounts payable and
        outstanding checks    (1,188,000) (2,804,000)   1,416,000
      Accrued income and
        general taxes             88,000     234,000     (211,000)
      Other, net                (118,000)   (147,000)    (225,000)
  Net changes in regulatory
    assets and liabilities       535,000     464,000      (94,000)
  Net changes in other assets
    and liabilities              266,000     (98,000)     126,000
                             ----------- -----------  -----------
    Net cash provided by
      operating activities    20,606,000  18,577,000   21,175,000
                             ----------- -----------  -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to plant         (16,843,000)(14,128,000) (15,188,000)
  Allowance for borrowed funds
    used during construction     152,000      75,000      215,000
  Investments                    202,000   2,996,000     (193,000)
  Other                           97,000     (18,000)     101,000
                             ----------- -----------  -----------
    Net cash used in
      investing activities   (16,392,000)(11,075,000) (15,065,000)    
                             ----------- -----------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Lines of credit increase
   (decrease)                  6,811,000    (462,000)           -
  Principal payments under
    capital lease obligations   (191,000)   (178,000)    (129,000)
  Long-term debt retired      (7,873,000) (1,358,000)           -
  Long-term debt issued        3,087,000           -            -
  Common stock purchased               -      (4,000)     (17,000)
  Common stock issued          1,901,000   1,821,000    1,821,000
  Dividends paid              (7,928,000) (7,659,000)  (7,384,000)
                              ----------  ----------   ----------
    Net cash used in financing
      activities              (4,193,000) (7,840,000)  (5,709,000)
                              ----------  ----------   ----------

NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS         21,000    (338,000)     401,000

CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR                350,000     688,000      287,000    
                                --------    --------     --------
CASH AND CASH EQUIVALENTS AT
END OF YEAR                     $371,000    $350,000     $688,000
                                ========    ========     ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the year for:
    Interest                  $6,677,000  $7,444,000   $5,872,000
    Income taxes, net of
      refunds                  4,588,000   5,609,000    4,795,000

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: A
capital lease obligation of $874,000 was incurred in 1996
when the Company entered into a lease agreement for computer
equipment.

For purposes of the Consolidated Statements of Cash Flows, the
Company considers all highly liquid debt instruments purchased
with an original maturity of three months or less to be cash
equivalents.

The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.


CONSOLIDATED STATEMENTS OF TAXES

YEARS ENDED DECEMBER 31           1998        1997        1996
COMPONENTS OF INCOME TAX EXPENSE:  
  Taxes payable currently-
    Federal                   $4,156,000  $5,025,000   $4,097,000 
    State                        544,000     787,000      403,000
                              ----------  ----------   ----------
                               4,700,000   5,812,000    4,500,000

  Provisions for deferred taxes (a)-
     Depreciation and other plant-
       related differences (b)   648,000     255,000      252,000    
     Pensions                  1,072,000     971,000      948,000    
     Other                      (501,000)   (417,000)     (24,000)
                              ----------  ----------   ----------
                               1,219,000     809,000    1,176,000
  Amortization of investment
    tax credits                 (407,000)   (407,000)    (408,000)
                              ----------  ----------   ----------
    Total income tax expense  $5,512,000  $6,214,000   $5,268,000
                              ==========  ==========   ==========

RECONCILIATION OF INCOME TAX RATES:
  Statutory federal income
    tax rate                       35.0%       35.0%        35.0%
  State income tax benefit for
    deduction of federal income
    taxes                           (1.8)       (1.8)        (1.8)
  Timing differences flowed
    through as required by 
    regulators                       1.8         1.2          (.2)
  Amortization of investment
    tax credits                     (2.5)       (2.4)        (2.6)  
  Amortization of excess
    deferred taxes                  (1.3)       (1.0)        (1.0)
  State income taxes, net of
    federal income tax benefit       5.6         5.8          5.2
  Other                             (2.7)        (.4)         (.9)
                                  ------      ------       ------
Effective income tax rate (c)      34.1%       36.4%        33.7%
                                  ======      ======       ======

Notes:(a) The Company has recorded regulatory assets and liabilities
to account for the effect of expected future regulatory actions related to
unamortized investment tax credits, income tax liabilities
recorded at tax rates in excess of current rates, and other items
for which deferred taxes have not previously been provided.

The principal components of the Company's deferred income tax
balances at December 31, 1998 and 1997, consist of the following:

                                          1998           1997
Accelerated depreciation and other
  plant-related differences            $24,934,000    $24,286,000
Pensions                                 6,265,000      5,080,000
Unamortized investment tax credits      (2,552,000)    (2,806,000)
Regulatory assets                       12,802,000     12,363,000
Regulatory liabilities                  (5,888,000)    (6,165,000)
Net operating loss and tax credit
  carryforwards of Percy Kent, which
  expire through 2011                   (2,060,000)    (2,403,000)
Other, net                              (1,679,000)      (720,000)
                                       -----------    -----------
Net deferred tax liabilities           $31,822,000    $29,635,000
                                       ===========    ===========

(b) The Company has elected, for tax purposes, to apply various
accelerated depreciation methods allowed by the Internal Revenue
Code.

(c) The effective income tax rate is computed by dividing total
income tax expense by the sum of tax expense and net income.


The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 STATEMENT OF ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION - The consolidated financial
statements include the accounts of St. Joseph Light & Power
Company, a public utility, and its wholly owned subsidiary, SJLP
Inc. and its subsidiary, Percy Kent. Collectively, these entities
are referred to as the "Company." All significant intercompany
transactions have been eliminated in consolidation.

The Company is engaged principally in the generation, purchase,
transmission, distribution, and sale of electricity, the
generation and distribution of industrial steam, and the
distribution of natural gas. SJLP Inc. was formed in September
1996, to pursue investments in non-utility areas. Effective May
31, 1997, SJLP Inc. acquired a controlling interest in Percy
Kent, a manufacturer of multiwall and small paper bags.

The acquisition was accounted for as a purchase. Acquired
goodwill of $1,308,000, net of amortization, is included in other
deferred charges in the Consolidated Balance Sheets and is being
amortized on a straight-line basis over 15 years. The
consolidated financial statements include the results of
operations since the date of acquisition. Pro forma financial
data prior to the date of acquisition do not materially differ
from reported results.

PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment is
stated at original cost. These costs include payroll-related
costs such as taxes, pensions and other fringe benefits, and
AFUDC.

Improvements to units of property are capitalized. Utility
property units retired are charged to accumulated depreciation
together with any related removal costs, net of salvage.
Maintenance costs and replacements of assets which do not
constitute units of property are expensed as incurred.

DEPRECIATION - Provisions for utility depreciation have been
computed on a straight-line basis by applying rates approved by
the PSC to the classified account balances. The Company's annual
depreciation provisions (including amounts classified elsewhere
in the Consolidated Statements of Income), as a percentage of the
average balance of depreciable property, were 3.7% for 1998 and
1997 and 3.6% for 1996.

JOINTLY OWNED IATAN PLANT - The Company has an agreement with
Kansas City Power and Light Company and The Empire District
Electric Company for joint ownership of a coal-burning generating
plant in Iatan, Missouri. The Company's share of operating
expenses for Iatan is included in operating expenses in the
Consolidated Statements of Income. The amounts below represent
the Company's 18% interest in the 670-megawatt unit:

DECEMBER 31                     1998           1997
Electric utility plant       $61,541,000    $61,306,000
Reserves for depreciation     35,339,000     33,307,000

REVENUE RECOGNITION - Utility revenues relating to service rendered but
unbilled are recognized in the period the service is provided. Manufacturing
revenues are recognized at the time the finished bags are shipped
to the customer.

ACCOUNTING POLICIES - The preparation of financial statements, in
conformity with generally accepted accounting principles,
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.

In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) 133,
"Accounting for Derivative Instruments and Hedging Activities."
The Statement establishes accounting and reporting standards
requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded
in the balance sheet as either an asset or liability measured at
its fair value. The Statement requires that changes in the
derivative's fair value be recognized currently in earnings
unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and
losses to offset related results on the hedged item in the income
statement, and requires that a company must formally document,
designate, and assess the effectiveness of transactions that
receive hedge accounting.

SFAS 133 is effective for fiscal years beginning after June 15,
1999. A company may also implement the Statement as of the
beginning of any fiscal quarter after issuance (that is, fiscal
quarters beginning June 16, 1998 and thereafter). SFAS 133 cannot
be applied retroactively. SFAS 133 must be applied to (a)
derivative instruments and (b) certain derivative instruments
embedded in hybrid contracts that were issued, acquired, or
substantively modified after December 31, 1997 (and, at the
company's election, before January 1, 1998).

The Company has not yet quantified the impacts of adopting SFAS
133 on its financial statements and has not determined the timing
of or method of its adoption of SFAS 133. However, the Statement
could increase volatility in earnings and other comprehensive
income.

In December 1998, the Emerging Issues Task Force reached
consensus on Issue No. 98-10, "Accounting for Contracts Involved
in Energy Trading and Risk Management Activities" (EITF Issue 98-
10). EITF Issue 98-10 is effective for fiscal years beginning
after December 15,1998. EITF Issue 98-10 requires that energy
trading contracts be recorded at fair value on the balance sheet,
with the changes in fair value included in earnings. The effects
of initial application of EITF Issue 98-10 must be reported as a
cumulative effect of a change in accounting principle. Financial
statements for periods prior to initial adoption of EITF Issue 98-
10 may not be restated. The Company believes it does not have any
commitments considered to be trading activity pursuant to the
principles of EITF Issue 98-10.

EARNINGS PER SHARE - Basic and diluted earnings per average
common share were computed by dividing net income by the
following:
                                 1998         1997        1996
Denominator for basic EPS -
  Weighted average number of
  shares of common stock
  outstanding during the year  8,099,928   7,988,714    7,868,169
Stock options (see Note 3)        13,578       7,550        2,182
Contingently issuable shares
  pursuant to long-term
  incentive plan (see Note 3)     15,423           -       14,306
                               ---------   ---------    ---------
Denominator for diluted EPS    8,128,929   7,996,264    7,884,657
                               =========   =========    =========

RECLASSIFICATIONS - Certain reclassifications have been made in
the financial statements to enhance comparability.

2 BENEFIT PLANS

RETIREMENT SAVINGS PLAN - The Company has a Retirement Savings
Plan under Section 401(k) of the Internal Revenue Code.  The plan
covers all employees with one year or more of service.  Under
this plan, eligible employees may defer and contribute a portion
of current compensation in order to supplement retirement
benefits.  The Company makes a matching contribution of 25
percent of employee contributions, up to 6 percent of
compensation, on a monthly basis.  Discretionary matching
contributions up to an additional 25 percent may be made based on
an incentive formula.  The Company made contributions of $359,000
for 1998, $300,000 for 1997, and $377,000 for 1996.

Effective January 1, 1999, the Company began making matching
contributions of 50 percent of employee contributions, up to 6
percent of compensation. Additional discretionary awards will no
longer be made. The plan was also amended to allow employees to
begin contributing immediately upon starting employment with the
Company. The Company will begin matching contributions for new
employees after one year of service. This amendment was also
effective January 1, 1999.

PENSION AND POSTRETIREMENT BENEFIT PLANS - The Company has two
non-contributory defined benefit pension plans, one for
bargaining and one for non-bargaining employees, covering all
employees with one year or more of continuous service.  Benefits
for both plans are based on years of service and compensation,
utilizing the final average-pay benefit formula. The Company's
funding policy is to comply with the minimum funding requirements
of the Employee Retirement Income Security Act.

In addition to providing pension benefits, the Company provides
certain postretirement medical and life insurance benefits.
Employees hired after December 31, 1992 are not eligible for
postretirement life insurance benefits. Employees covered under
the plans become eligible for these benefits if they reach
retirement age while working for the Company and have 10 years of
service. The Company uses Voluntary Employees' Beneficiary
Association trusts, which cover substantially all active and
retired employees.

The following table summarizes net pension credits and postretirement
benefit costs, including amounts capitalized:

<TABLE>
<CAPTION>
                                          PENSION                             OPEB
                                1998        1997       1996         1998      1997       1996
<S>                          <C>        <C>          <C>        <C>        <C>         <C>
Service cost-benefits earned
  during the period           $977,000    $861,000    $777,000    $216,000  $149,000   $213,000
Interest cost on benefit
  obligation                 2,433,000   2,280,000   2,053,000     733,000   672,000    707,000
Expected return on plan
  assets                    (5,392,000) (4,755,000) (4,325,000)   (229,000) (169,000)  (119,000)
Amortization of transition
  (asset) obligation          (431,000)   (431,000)   (431,000)    388,000   388,000    388,000
Amortization of prior service
  cost                         223,000     175,000     138,000           -         -          -
Recognized net actuarial
  (gain) loss                 (627,000)   (551,000)   (526,000)          -         -          -    
                            ----------- ----------- -----------  --------- ---------  ---------
                            (2,817,000) (2,421,000) (2,314,000)  1,108,000 1,040,000  1,189,000
Amounts credited (charged)
  to construction              589,000     460,000     393,000    (232,000) (198,000)  (202,000)
                            ----------- ----------- ----------- ---------- ---------  ---------
Net benefit costs (credits)
  included in operating
  expenses                 $(2,228,000)$(1,961,000)$(1,921,000)   $876,000  $842,000   $987,000
                           ====================================  ========= =========  =========

</TABLE>

The following table reconciles the beginning and ending balances
of the plans' benefit obligations and fair value of plan assets and
reconciles the funded status of the plans to the related amounts
recognized in the Consolidated Balance Sheets:

<TABLE>
<CAPTION>
                                                 PENSION                     OPEB
                                             1998        1997          1998        1997
<S>                                      <C>          <C>         <C>           <C>
Change in benefit obligation:
  Benefit obligation at beginning of
    year                                 $32,643,000  $27,544,000  $10,140,000  $8,747,000
  Service cost-benefits earned during
    period                                   977,000      861,000      216,000     149,000
  Interest cost on benefit obligation      2,433,000    2,280,000      733,000     672,000
  Actuarial (gains) losses                   350,000    3,988,000      (55,000)  1,165,000
  Plan amendment                             633,000            -           -            -
  Participant contributions                        -            -      222,000     175,000  
  Benefits paid and other
    expenses                              (2,176,000)  (2,030,000)    (663,000)   (768,000)     
                                         -----------  -----------  ----------- -----------
  Benefit obligation at end of year      $34,860,000  $32,643,000  $10,593,000 $10,140,000

Change in plan assets:
  Fair value of plan assets at
    beginning of year                    $60,971,000  $53,813,000   $2,783,000  $1,955,000
  Actual return on plan
    assets                                 8,661,000    9,188,000      588,000     298,000
  Employer contribution                            -            -    1,134,000   1,123,000
  Participant contributions                        -            -      222,000     175,000
  Benefits paid and other expenses        (2,176,000)  (2,030,000)    (663,000)   (768,000)
                                         -----------  -----------   ----------  ----------
  Fair value of plan assets at end
    of year                              $67,456,000  $60,971,000   $4,064,000  $2,783,000

Funded status:
  Plan assets in excess of (less than)
    benefit obligation                   $32,596,000  $28,328,000  $(6,529,000)$(7,357,000)
  Unrecognized net actuarial (gain)
    loss                                 (16,868,000) (14,576,000)     (23,000)    391,000
  Unrecognized transition (asset)
    obligation                            (1,294,000)  (1,725,000)   5,407,000   5,795,000
  Unrecognized prior service cost          1,955,000    1,545,000            -           -
                                         -----------  -----------   ----------  ----------
  Prepaid (accrued) benefit cost         $16,389,000  $13,572,000  $(1,145,000)$(1,171,000)

Assumptions as of December 31:
  Discount rate                                7.25%        7.25%        7.25%       7.25% 
  Expected return on plan assets               9.00%        9.00%        9.00%       9.00%
  Rate of compensation increase                4.30%        4.30%          N/A         N/A

</TABLE>

For measurement purposes, an 8 percent annual rate of increase in the
per-capita health care benefits was assumed for 1999; the rate was assumed to
decrease gradually to 6 percent by 2020 and remain at that level thereafter.
Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans. A one-percentage-point change in assumed
health care cost trend rates would have the following effects:

                                     1-Percentage-  1-Percentage-
                                    Point Increase Point Decrease
Effect on total of service and
  interest cost components                $195,000       $174,000
Effect on postretirement benefit
  obligation                            $1,815,000     $1,693,000     

3 STOCK-BASED COMPENSATION PLANS

The Company has a long-term stock incentive plan (the Plan). Under the Plan,
non-employee directors are automatically granted restricted stock and non-
qualified options to purchase shares of common stock. All options are 
exercisable in full from the date of grant and have exercise prices equal to the
stock's market price on the date of the grant. For 1998, 1997, and 1996, the
Company recorded compensation expense of $55,000, $40,000, and $166,000,
respectively, related to the issuance of restricted shares under the Plan.

The following table is a summary of data regarding stock options
and restricted stock for non-employee directors:

<TABLE>
<CAPTION>

                                       1998               1997
1996
                                 Shares    Price(1)  Shares   Price(1)   Shares   Price(1)
<S>                              <C>       <C>       <C>      <C>        <C>
<C>
Options outstanding at
  January 1                      123,000   $15.250   106,000   $15.125         -       N/A
Options granted                   16,000    18.313    17,000    16.030   106,000   $15.125
Options exercised                 18,000    15.222         -       N/A         -       N/A
                                 -------   -------   -------   -------   -------   -------
Options outstanding at
  December 31                    121,000   $15.660   123,000   $15.250   106,000   $15.125
                                 =======   =======   =======   =======   =======   =======
Restricted shares granted          3,000               2,500              11,000

Shares available for grant (for
  options and restricted stock)
  at December 31                 144,500             163,500             183,000

(1) weighted average exercise price

</TABLE>

The Company accounts for the option feature of the Plan under
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," under which no compensation cost has been
recognized. The following table shows the assumptions made for
grants in each year, as well as the amounts the Company's net
income and earnings per share would have been had compensation
cost for this plan been recorded consistent with SFAS No. 123,
"Accounting for Stock-Based Compensation," using the Black-
Scholes pricing model:

                                 1998        1997         1996
Net income: As reported      $10,664,000 $10,840,000  $10,357,000
            Pro forma         10,640,000  10,815,000   10,201,000
Basic EPS:  As reported            $1.32       $1.36        $1.32
            Pro forma               1.31        1.35         1.30
Diluted EPS:As reported             1.31        1.36         1.32
            Pro forma               1.31        1.35         1.30
Risk-free interest rate            5.81%       6.89%        6.85%
Expected dividend yield            5.83%       5.79%        5.81%
Expected life                   10 years    10 years     10 years
Expected volatility                  19%         18%          19%
Weighted average fair value of
  options granted                  $2.42       $2.37        $2.37

The Plan also covers long-term incentives for officers and
certain other key employees. It provides for overlapping three-
year performance cycles with stock awards established on the
first day and earned on the last day of each performance cycle.
At December 31, 1998, 303,384 shares were available for issurance
pursuant to this portion of the Plan. Compensation of $132,000,
$(9,000), and $14,000 was expensed for this portion of the Plan
in 1998, 1997, and 1996, respectively.

4 SHORT-TERM BORROWINGS

The Company has arrangements with certain banks to provide
unsecured short-term lines of credit on a committed basis with
available amounts at December 31, 1998, totaling $3,500,000.
Outstanding notes bear interest at rates based on the prime rate
or money market rates. In addition, the Company has agreements
with several banks to borrow, as available, on an uncommitted
basis at market-based rates quoted by the banks.

At December 31, 1998, outstanding borrowings consisted of
$7,290,000 of notes payable to banks with weighted average
interest rates of 6.1%. At December 31, 1997, outstanding
borrowings consisted of $2,621,000 of Percy Kent's notes payable
to other financial institutions with weighted average interest
rates of 11.0%. During 1998 and 1997, weighted average short-term
debt outstanding was $1,169,000 and $1,944,000, with weighted
average interest rates of 6.7% and 10.6%, respectively.

5 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:

CASH AND TEMPORARY INVESTMENTS - The fair value of these
investments is estimated based on quoted market prices for the
same or similar issues and approximates the carrying amount.

OTHER INVESTMENTS - The balance includes investments in
convertible securities of two non-publicly traded companies, a
business park joint venture, community betterment projects, and
retirement trusts. The fair value of the investments in the
convertible securities, the joint venture and the community
betterment projects are stated at the original cost of
$2,028,000, $500,000 and $230,000, respectively, due to the
impracticability of estimating the market value. The fair value
of the underlying instruments of the retirement trusts is
estimated based on quoted market prices for the same or similar
issues. The investment in the trusts is offset by a corresponding
liability for future obligations in other non-current
liabilities.

LONG-TERM DEBT - Most of the Company's long-term debt is not
publicly traded; therefore, a market price does not exist for
these instruments. The fair value of long-term debt is estimated
based upon market prices for comparable securities with similar
maturities.

The difference in carrying amounts and fair values of financial
instruments is not expected to result in a material impact on the
Company's financial position or results of operations. Under the
ratemaking principles followed by the PSC, any gain or loss on
early refinancing of the Company's long-term debt would be used
to reduce or increase the Company's rates over a prescribed
amortization period.

                                         Carrying          Fair
                                          Amounts         Values
1998
Cash and temporary investments            $373,000       $373,000
Other investments                        4,922,000      5,215,000
Long-term debt                          74,728,000     85,739,000

1997
Cash and temporary investments          $2,000,000     $2,000,000
Other investments                        3,477,000      3,688,000
Long-term debt                          77,372,000     86,155,000

6 EFFECTS OF REGULATION

The Company is subject to rate regulation by the PSC. Rates are
established to allow the Company an opportunity to recover its
costs and earn a return on its investment. The Company currently
applies SFAS No. 71, "Accounting for the Effects of Certain Types
of Regulation," which recognizes the economic effects of rate
regulation. In the event the Company determines that it no longer
meets the criteria for following SFAS No. 71, the accounting
impact would be a non-cash charge to operations of an amount that
could be material. Criteria that give rise to the discontinuance
of SFAS No. 71 include, (1) increasing competition that restricts
the Company's ability to establish prices to recover specific
costs, and (2) a significant change in the manner in which rates
are set by regulators from cost-based regulation to another form
of regulation. The continued applicability of SFAS No. 71 is
continually reviewed based on the current regulatory environment.

In March 1997, the PSC opened a docket to investigate
restructuring in the electric utility industry. The Retail
Electric Competition Task Force, comprised of representatives
from various industry groups, was established and charged with
preparing comprehensive reports to the PSC. The reports were
prepared in 1998 based upon a thorough investigation and study of
retail wheeling of electricity and related issues and included
recommendations as to how Missouri should implement retail
electric competition, in the event that legislation is enacted
which authorizes it.

Based on the PSC docket and deregulation plans implemented or
considered by other states, management believes it is most likely
that the generation portion of the business could become
unregulated and that the transmission and distribution functions
will continue to be regulated. Although bills have been
introduced in the 1999 session of the legislature, most observers
believe that the earliest a bill will be passed is 2000, which
would defer retail competition in Missouri until 2001 or later.

Based on a current evaluation of the various factors and
conditions that are expected to impact future cost recovery, the
Company believes that its regulatory assets, including those
related to generation, are probable of future recovery and that
the utilization of SFAS No. 71 continues to be appropriate.
Accordingly, the Company has recorded regulatory assets and
liabilities on the Consolidated Balance Sheets, consisting
primarily of deferred taxes as noted in Note (a) to Consolidated
Statements of Taxes.

On December 1, 1998, the Company filed separate rate cases before
the PSC asking for price increases of approximately $6,100,000,
$500,000, and $275,000 for electric, natural gas, and industrial
steam, respectively. An earlier electric earnings complaint filed
by the PSC staff, requesting a reduction of $6.4 million, has
been consolidated with the Company's electric case. Hearings for
the three cases are scheduled for July 1999. The PSC has until
November 1, 1999, to rule on the Company's proposed increases.

7 COMMITMENTS AND CONTINGENCIES

LEASES - The Company has a 50-year capital lease agreement with
six other regional utilities for a transmission line and related
facilities. Electric utility plant, as of December 31, 1998,
includes $2,902,000 for the leased joint facilities and other
property acquired under capital leases.
The future minimum lease payments under this, and other capital
leases, together with the present value of the net lease payments
(obligations under the capital leases) are:

1999                                      $426,000
2000                                       426,000
2001                                       267,000
2002                                       216,000
2003                                       216,000
Later years                              5,318,000
                                        ----------
Total minimum lease payments             6,869,000
Less - Amounts representing interest     3,967,000
                                        ----------
Present value of obligations under
  capital leases                        $2,902,000
                                        ==========

The Company also has 50-year direct financing lease
agreements for terminal and associated joint facilities. The
future minimum lease payments receivable, together with the
present value of net receivables, under the leases are:

1999                                      $123,000
2000                                       123,000
2001                                       123,000
2002                                       123,000
2003                                       123,000
Later years                              2,551,000
                                        ----------
Total minimum lease payments receivable  3,166,000
Less - Amounts representing interest     2,138,000
                                        ----------
Present value of net receivables        $1,028,000
                                        ==========

OTHER COMMITMENTS - The Company's capital budget, excluding AFUDC
and including non-utility investments, for 1999 is approximately
$14,677,000. The five-year capital budget is estimated to be
$71,286,000.

The Company has entered into long-term contracts to purchase
generating capacity, fossil fuels, and rail transportation.
Minimum annual amounts to be purchased under these contracts
approximate $10,865,000, $16,741,000, $12,673,000, $11,562,000,
and $14,191,000 for each of the next five years, respectively.

ENVIRONMENTAL CONTINGENCIES - The Company is required to meet
various environmental regulations governing air and water
standards. The Company anticipates future capital expenditures of
approximately $4,315,000 at the Lake Road plant, related to the
requirements of Phase II of the Clean Air Act Amendments which
become effective in 2000.

The United States Environmental Protection Agency (EPA) has
recently issued a NOx State Implementation Plan (SIP) Call under
which Missouri, twenty-one other eastern states, and the District
of Columbia are required to revise their SIPs to establish more
stringent emission standards for nitrogen oxides (NOx). The
Company has joined with five other western Missouri utilities,
other states, and private organizations in a lawsuit challenging
the EPA's SIP Call. Should the legal challenge fail, some of our
generating units will be required to meet lower NOx emission
standards beginning in 2003. The full extent of how the Company
will be affected and the related cost of implementation are not
yet known.

OTHER CONTINGENCIES - Certain legal actions are pending which may
impact the Company. In management's opinion, the ultimate
resolution of these matters is not expected to materially affect
the Company's financial position or operating results.

8 SEGMENTS OF BUSINESS

The Company has two reportable segments: electric utility and
manufacturing. The Company is principally a public utility
engaged primarily in the business of generating and distributing
electric energy in a 10-county area in northwest Missouri. The
Company's 62,000 regulated customers include residential,
commercial, and industrial classes. The Company's manufacturing
segment represents a controlling interest in a company which
manufactures multiwall and small paper bags primarily for food
products, agricultural products, specialty chemicals, pet foods
and other consumer packaging. Other operations of the Company
include the limited sale of natural gas and industrial steam, as
well as investment in non-utility businesses.

The accounting policies of the segments are the same as those
described in the summary of significant accounting policies in
Note 1. The Company evaluates performance and allocates resources
to its regulated business units based on profit or loss from
operations, not including interest charges or nonrecurring gains
and losses, and on the rate of return achieved. The performance
of the Company's manufacturing segment is evaluated based on net
income after taxes and minority interest.

The following table sets forth certain information regarding the Company's
segments of business:

<TABLE>
<CAPTION>

                                        ELECTRIC
                                        UTILITY      MANUFACTURING  ALL OTHER      TOTALS
(IN THOUSANDS)
<S>                                     <C>            <C>            <C>         <C>
YEAR ENDED DECEMBER 31, 1998
Revenues from external customers        $89,678           $23,820     $10,876     $124,374
Depreciation                             10,813               995         538       12,346
Income taxes                              5,307                 -         (48)       5,259
Segment profit (loss)                    15,617               (24)        396       15,989
Segment assets                          217,947            13,906      14,804      246,657
Expenditures for segment assets,
  including AFUDC                        15,659               768         416       16,843
Net regulatory assets                     5,191                 -         212        5,403
Accumulated deferred income taxes and
  investment tax credits                 33,252                 -       2,259       35,511
Other non-cash items-pension expense     (1,941)                -        (287)      (2,228)

YEAR ENDED DECEMBER 31, 1997
Revenues from external customers        $86,910           $17,307     $11,948     $116,165
Depreciation                             10,409               526         505       11,440
Income taxes                              5,881                 -          75        5,956
Segment profit (loss)                    16,476              (168)        381       16,689
Segment assets                          209,505            15,671      12,848      238,024
Expenditures for segment assets,
  including AFUDC                        13,520               143         465       14,128
Net regulatory assets                     4,805                 -         164        4,969
Accumulated deferred income taxes and
  investment tax credits                 31,745                 -       1,986       33,731
Other non-cash items-pension expense     (1,716)                -        (245)      (1,961)

YEAR ENDED DECEMBER 31, 1996
Revenues from external customers        $83,499                 -     $12,370      $95,869
Depreciation                              9,975                 -         499       10,474
Income taxes                              4,998                 -         236        5,234
Segment profit                           15,076                 -         697       15,773
Segment assets                          204,372                 -      10,189      214,561
Expenditures for segment assets,
  including AFUDC                        14,864                 -         324       15,188
Net regulatory assets                     5,192                 -         160        5,352
Accumulated deferred income taxes and
  investment tax credits                 31,415                 -       1,822       33,237
Other non-cash items-pension expense     (1,670)                -        (251)      (1,921)

</TABLE>


The following table reconciles reportable segment profit, assets, depreciation,
and income taxes, disclosed above, to the Company's Consolidated Financial
Statements:


<TABLE>
<CAPTION>

YEARS ENDED DECEMBER 31 (IN THOUSANDS)   1998              1997        1996
<S>                                     <C>               <C>         <C>
PROFIT
Reportable segment profit               $15,593           $16,308     $15,076
Other profit                                396               381         697
Interest charges (net)(1)                (5,909)           (5,931)     (5,807)
Other income                                837               340         470
Income taxes on other income               (253)             (258)        (79)
                                       --------          --------    --------
Consolidated net income                 $10,664           $10,840     $10,357
                                       ========          ========    ========

ASSETS
Reportable segment assets              $231,853          $225,176    $204,372
Other assets                             14,804            12,848      10,189
Temporary and other investments           2,810             3,923       8,122
Debt expense                              1,324             1,437       1,553
Other assets not allocated                  464               385       3,014
                                       --------          --------    --------
Consolidated assets                    $251,255          $243,769    $227,250
                                       ========          ========    ========

DEPRECIATION
Reportable segment depreciation         $11,808           $10,935      $9,975
Other depreciation                          538               505         499
Less-Manufacturing depreciation included
  in cost of goods sold                    (811)             (395)          -
                                       --------          --------    --------
Consolidated depreciation               $11,535           $11,045     $10,474
                                       ========          ========    ========

INCOME TAXES
Reportable segment income taxes          $5,307            $5,881      $4,998
Other income taxes                          (48)               75         236
Income taxes on other income                253               258          34
                                       --------          --------    --------
Consolidated income taxes                $5,512            $6,214      $5,268
                                       ========          ========    ========

(1) Excludes manufacturing segment interest expense of $878,000 and $549,000 for
1998 and 1997, respectively, as interest expense is included in manufacturing
net income which is the measure of profit or loss used to evaluate the
performance of that segment.

</TABLE>

9 QUARTERLY FINANCIAL DATA
 (UNAUDITED)

<TABLE>
<CAPTION>
                                            First       Second       Third   Fourth
                                           Quarter      Quarter     Quarter  Quarter
1998
<S>                                      <C>          <C>         <C>          <C>
Operating revenues                       $29,717,000  $30,056,000 $37,366,000  $27,235,000
Operating income                           4,999,000    4,842,000  10,122,000    2,224,000
Net income                                 2,401,000    1,990,000   5,214,000    1,059,000
Weighted average common shares
  outstanding                              8,056,020    8,092,173   8,114,921    8,135,561
Basic and diluted earnings per average
  common share                                  $.30         $.25        $.64         $.13

1997
Operating revenues                       $23,510,000  $25,199,000 $37,116,000  $30,340,000
Operating income                           4,365,000    5,100,000  10,228,000    3,295,000
Net income                                 1,991,000    2,268,000   5,395,000    1,186,000
Weighted average common shares
  outstanding                              7,940,138    7,979,852   8,004,627    8,029,089
Basic and diluted earnings per average
  common share                                  $.25         $.28        $.67         $.15

The quarterly data reflect seasonal variations common to the utility industry.

</TABLE>

10 SUBSEQUENT EVENT (Unaudited)

On March 4, 1999, the Company and UtiliCorp United Inc. entered
into an Agreement and Plan of Merger to form a strategic business
combination.  Under terms of the agreement, each share of common
stock of the Company, valued at $23.00 per share, will be
exchanged for UtiliCorp United Inc. common stock.  The
transaction is subject to several closing conditions, including
approval by the Company's shareholders and approval by a number
of state and federal regulatory agencies.  Approval by UtiliCorp
United Inc. shareholders is not required.  Management expects the
merger to be completed in mid-2000.

The Rights Agreement described in Note (a) to the Consolidated
Statements of Capitalization is inoperative with respect to the
proposed merger agreement.


FINANCIAL RESPONSIBILITY / INDEPENDENT AUDIT

RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of St. Joseph Light & Power Company
is responsible for the preparation and presentation of
the financial information in this Annual Report. The preceding
financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied,
and reflect management's best estimates and informed judgments as
required.

To fulfill these responsibilities, management has developed and
maintains a comprehensive system of internal operating,
accounting, and financial controls. These controls provide
reasonable assurance that the Company's assets are safeguarded,
transactions are properly recorded, and resulting financial
statements are reliable. An internal audit function assists
management in monitoring the effectiveness of the controls.

The Report of Independent Public Accountants on the financial
statements appears on this page. The responsibility of the
independent auditors is limited to the audit of financial
statements presented and the expression of an opinion as to their
fairness.

The Board of Directors maintains oversight of the Company's
financial situation through its monthly review of operations and
financial condition and its selection of the independent
auditors. The Audit Committee, comprised of board members who are
not employees or officers of the Company, also meets periodically
with the independent auditors and the Company's internal audit
staff. The auditors have complete access to and meet with the
Audit Committee, without management representatives present, to
review accounting, auditing, and financial matters. Pertinent
items discussed at the meetings are reviewed with the full Board
of Directors.

/s/ Terry F. Steinbecker
Terry F. Steinbecker
President and Chief Executive Officer

/s/ Larry J. Stoll
Larry J. Stoll
Vice President-Finance,Treasurer and Assistant Secretary


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of St. Joseph Light & Power Company:

We have audited the accompanying consolidated balance sheets and
statements of capitalization of St. Joseph Light & Power Company
(a Missouri corporation) and subsidiaries as of December 31, 1998
and 1997, and the related consolidated statements of income,
retained earnings, cash flows, and taxes for each of the three
years in the period ended December 31, 1998. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion of these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. 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, the financial statements referred to above
present fairly, in all material respects, the financial position
of St. Joseph Light & Power Company and subsidiaries as of
December 31, 1998 and 1997, and the results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted
accounting principles.


ARTHUR ANDERSEN LLP
Kansas City, Missouri
January 22, 1999


<TABLE>
<CAPTION>

SUMMARY OF ELECTRIC UTILITY OPERATING STATISTICS


                                  1998      1997      1996      1995      1994      1993
<S>                            <C>       <C>       <C>       <C>       <C>       <C>
SALES (mwh)
Residential                      634,165   621,432   611,911   593,881   562,148   564,885
Commercial                       493,630   471,698   453,387   437,008   422,582   406,379
Industrial                       502,426   474,972   454,662   440,176   431,468   447,859
Other                              9,707     9,220     9,505     8,968     8,976     9,310
                               --------- --------- --------- --------- --------- ---------
Total retail sales             1,639,928 1,577,322 1,529,465 1,480,033 1,425,174 1,428,433

Sales for resale                  76,286   132,044    79,156    68,769   222,185    91,645

RESIDENTIAL CUSTOMER DATA (Average)
Number of customers               55,082    54,621    54,237    53,900    53,424    53,250
Annual kwh sales                  11,513    11,377    11,282    11,018    10,522    10,608
Revenue  (Cents per kwh)            6.07      5.96      5.95      6.06      5.83      5.60
Number of all electric dwellings  11,774    11,137    10,565    10,039     9,513     9,020

COMMERCIAL AND INDUSTRIAL CUSTOMER DATA (Average)
Number of customers                6,757     6,727     6,730     6,713     6,618     6,618
Revenue (Cents per kwh)             4.76      4.78      4.80      4.95      4.81      4.83

SYSTEM DATA
System requirements (mwh)      1,773,388 1,683,048 1,661,029 1,585,624 1,526,088 1,532,022
Load factor (Percent)               53.8      54.9      54.8      52.5      55.0      52.5
Net peak load (mw)                   376       350       346       345       317       333
System capability at peak (mw)       433       432       422       417       439       434

</TABLE>


CORPORATE INFORMATION

CORPORATE OFFICES
520 Francis Street
Post Office Box 998
St. Joseph, Missouri
64502-0998

(816) 387-6434
fax (816) 387-6332
1-800-367-4562
http://www.sjlp.com
email: invrel@sjlp.com

INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
1500 Commerce Tower
Kansas City, Missouri 64199

STOCK LISTING AND PRINCIPAL MARKET
New York Stock Exchange
Eleven Wall Street
New York, New York 10005
Symbol: SAJ

COMMON STOCK TRANSFER AGENT AND REGISTRAR
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60690

ANNUAL SHAREHOLDERS MEETING
The annual meeting of shareholders will
be at 9 a.m., Wednesday, May 19, 1999,
at the Albrecht-Kemper Museum of Art,
2818 Frederick Boulevard, St. Joseph, Missouri.

FORM 10-K
A copy of the Annual Report to the Securities and Exchange
Commission, Form 10-K, will be furnished without charge to any
shareholder upon contacting:

St. Joseph Light & Power Company
Investor Relations Department
520 Francis Street
Post Office Box 998
St. Joseph, Missouri 64502-0998

Access to the Form 10-K is also available via the internet
through the EDGAR database on the SEC website at www.sec.gov or
on the Company's website listed above.

This report and financial statements contained herein are
submitted for the general information of the security holders of
St. Joseph Light & Power Company, and are not in connection with,
or to induce, any sale or offer to sell or to buy any securities
of the Company, or in connection with preliminary negotiations
for such sale or purchase.

DIRECTORS AND OFFICERS

BOARD OF DIRECTORS

* John P. Barclay, Jr., 69
Chairman, President and Chief Executive Officer, Wire Rope Corporation of 
America, Inc. (Manufacturer and distributor of wire rope and wire rope
products)
St. Joseph, Missouri, Director since 1974.

Deborah A. Beck, 51
Senior Vice President-Insurance Operations, Northwestern Mutual Life
Insurance Company (Insurance company)
Milwaukee, Wisconsin, Director since 1997.

* Daniel A. Burkhardt, 51
Principal, The Jones Financial Companies (Investment banking and retail
securities firm)
St. Louis, Missouri, Director since 1988.

James P. Carolus, 48
President, Hillyard Industries, Inc. (Manufacturer of maintenance cleaning
products)
St. Joseph, Missouri, Director since 1989.

* William J. Gremp, 56
Managing Director and Senior Vice President, First Union Capital Markets Group
(Banking)
Charlotte, North Carolina, Director since 1995.

David W. Shinneman, 60
President, Shinneman Management Company (Operator of McDonald's restaurants)
St. Joseph, Missouri, Director since 1994.

* Robert L. Simpson, 65
General Partner, St. Joseph Riverboat Partners (Riverboat casino)
St. Joseph, Missouri, Director since 1983.

Gerald R. Sprong, 65
President and Chief Executive Officer, The Morris Plan Company of St. Joseph
(Financial management and lending)
St. Joseph, Missouri, and

Director, Chairman and Chief Executive Officer, First Savings Bank, F.S.B. 
(Banking)
Manhattan, Kansas, and

President and Chief Executive Officer, Noble Properties of Iowa, L.L.C.
(Ownership and management of hotels)
Des Moines, Iowa, Director since 1976.

Terry F. Steinbecker, 53
President and Chief Executive Officer, St. Joseph Light & Power Company
St. Joseph, Missouri, Director since 1985.

* Member of Audit Committee

OFFICERS

Terry F. Steinbecker, 53, President and Chief Executive Officer
Gary L. Myers, 45, Vice President, General Counsel and Secretary
Larry J. Stoll, 46, Vice President-Finance, Treasurer and Assistant Secretary
John A. Stuart, 45, Vice President-Customer Service & Energy Delivery
Dwight V. Svuba, 56, Vice President-Energy Supply 


GLOSSARY

INDUSTRY TERMINOLOGY:
AFUDC: Allowance for funds used during construction.  A method of
compensating a utility for financing costs it incurs during
construction of new facilities, prior to the inclusion of those
facilities in rates.
DISTRIBUTION: The flow of electricity over lower voltage
facilities to the ultimate retail customer-usually
businesses and homes.
GENERATION: The process of transforming other forms of energy,
such as fossil fuels, into electricity.  Also, the amount of
electric energy produced, expressed in megawatt-hours.
LOAD: The amount of electric power delivered or required at any
specific point on a system, usually expressed in megawatts.
MISSOURI PUBLIC SERVICE COMMISSION (PSC): The governmental body
that regulates all utilities that do business in Missouri.
PEAK LOAD: The amount of electricity required during periods of
highest demand.
POWER POOL: A group of geographically related electric power
producers who combine their resources through interconnections in
order to transfer power among themselves to realize certain
efficiencies and enhance reliability.
RETAIL WHEELING: The use, for a fee, of transmission facilities
of one system to transmit electrical power produced by another
system.
SYSTEM CAPABILITY: The maximum amount of electricity a given
power plant is able to produce, usually expressed in megawatts.
TRANSMISSION: The flow of electricity from generating stations
over high voltage lines.

COMPANY GENERATING PLANTS:
IATAN: A coal-fired, 670-megawatt electric generating plant in
Iatan, Missouri which is jointly owned by St. Joseph Light &
Power Company, The Empire District Electric Company, and Kansas
City Power & Light.
LAKE ROAD: A 257-megawatt generating facility, owned and operated
by St. Joseph Light & Power Company, that burns a mix of coal and
other fuels, and is located in St. Joseph, Missouri.

FINANCIAL TERMINOLOGY:
BASIC EARNINGS PER SHARE (EPS): The company's net income divided
by the average number of common shares outstanding.
DILUTED EARNINGS PER SHARE: A measure of the company's earnings
per share given the effect of all potential common shares that
were dilutive and outstanding during the period.  Potential
common shares are securities (such as options, warrants,
convertible preferred stock, etc.) that do not have a current
right to participate fully in earnings, but could do so in the
future by virtue of their option or conversion rights.
BOOK VALUE PER SHARE: The value of each common share of stock
after all debts are paid, computed by dividing common equity by
the number of common shares outstanding.
DIVIDEND YIELD: Dividends paid per share as a percentage of the
market price per share.
MARKET VALUE-TO-BOOK VALUE RATIO: A measure of the market value
of a company's common shares compared to the book value per
share.  This ratio is calculated by dividing the market price per
share of common stock by the book value per share.
PAYOUT RATIO: Dividends paid as a percentage of net income.
PRICE/EARNINGS RATIO: A measure of the market value of a
company's common shares to the earnings per share of common
stock.  To calculate this ratio, divide the price of a stock by
its earnings per share.
RETURN ON AVERAGE COMMON EQUITY: The amount, expressed as a
percentage, earned on the company's average common equity for a
given period. Dividing net income less preferred and preference
dividends by average common equity calculates this ratio.

UNITS OF MEASURE:
BRITISH THERMAL UNIT (Btu): The amount of heat energy necessary
to raise the temperature of one pound of water one degree
Fahrenheit. A standard unit for measuring thermal energy or heat.
KILOWATT (kw): A measure of the rate at which electric energy is
generated or consumed.
KILOWATT-HOUR (kwh): A basic unit of electric energy equal to one
kilowatt of power supplied to or taken from an electric circuit
steadily for one hour.  The amount of electricity sold or
consumed is measured in kilowatt-hours.
MEGAWATT (mw): A measure of electric power equal to one thousand
kilowatts.
MEGAWATT-HOUR (mwh): A unit of electric energy equal to one
megawatt of power supplied to or taken from an electric circuit
steadily for one hour.

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